Download as doc, pdf, or txt
Download as doc, pdf, or txt
You are on page 1of 53

Rehman Auto Industry.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


1
Rehman Auto Industry.

INTERNSHIP REPORT
ON
REHMAN AUTO INDUSTRY BAHAWALPUR

Submitted to

Department of Management Sciences


The Islamic University of Bahawalpur

By

Majid Ali
BBA (Evening)
The Islamia University of Bahawalpur
2014-18

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


2
Rehman Auto Industry.

DESCRIPTION Page #

EXECTIVE SUMMARY___________________________________5

ACKNOWLEDGEMENT__________________________________6

DEDICATIONS_________________________________________7

 INTRODUCTION_______________________________________8

 ORGANTIZATION BACKGROUND________________________ 9

 Organization information_______________________________10

 VISION OF RAI________________________________________11

 MISSION STATEMENT OF RAI___________________________12

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


3
Rehman Auto Industry.

 GOALS OF RAI________________________________________13

STRATEGIC PLANNING _________________________________13

COMPANY POLICY_____________________________________14

 MARKETING MIX ______________________________________17

 COMPETITIVE ANALYSIS________________________________19

 PROMOTION___________________________________________23

DISTRIBUTION__________________________________________25

SWOT ANALYSIS________________________________________27

BCG MATRIX___________________________________________32

DEPARTMENTS_________________________________________33

FINANCIAL ANALYSIS____________________________________60

FINDINGS AND SUGGESTIONS_____________________________73

CONCLUSION____________________________________________74

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


4
Rehman Auto Industry.

REFERENCES ___________________________________________ 75

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


5
Rehman Auto Industry.

EXECUTIVE SUMMARY

As I have completed my internship of Six weeks periods in the Rehman Auto Industry.
I have compiled a report about the organization which comprise the history, departments
(i.e. Finance, Departments) my experiences and duties performed in the organization
during my period of stay.
A brief description of the history of the organization is provided to get an overview of the
organization. And also a brief history of the Auto Business of organization. The hierarchy
and the way of functioning of the organization is also included in the report to get an
overview of the different functions being performed in the organization at different levels
of Hierarchy. The Assembling process, geographic location and distribution of the
organization are described in the report. The business volume and financial analysis of
the organization are also a part of the report to get an overview of the organizations
performance over the years.
The Human Resource pol RAI_70 and strategies are also described to provide
information about the planning, selection, recruitment, compensation, rewards etc
provided to the employees in the organization.
There is a brief introduction of the Marketing Department and the duties performed by it
in the organization as well.
The SWOT of the organization is also a vital part of the report which gives a clear view
of the internal and external environment of the organizations with respect to the
competitors in the market.
In the last it contains all the duties and projects performed by me in the organization
during my period stay. The data of the project as well as my learning’s in the
organization is also included in the report.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


6
Rehman Auto Industry.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


7
Rehman Auto Industry.

ACKNOWLEDGMENT

A pessimist sees the difficulty in every opportunity; an every optimist sees the
opportunity in every difficulty. I deem it an honor to pray and pay thanks to Almighty
Allah who has gradually bestowed us with the ability to think, read, write, compose and
assimilate the gathered wisdom and knowledge and to complete this internship report in a
logical and presentable form.
I would also like to thank the entire Rehman Auto Industry for the support and guidance
provided to me during the internship programmers. Specially my Finance Department
Employees who help me in order to know the basic requirement of my internship. Lastly
I would like to utilize to for guiding me and helping me in the successful completion of
my 5 weeks internship.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


8
Rehman Auto Industry.

DEDICATIONS

I DEDICATE THIS REPORT TO


The Greatest Human Being

Holy Prophet
Muhammad (PBUH)
My Parents.
&
My Brother.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


9
Rehman Auto Industry.

I
N
T
R
O
D
U
C
T
I
O
N Auto Industry
8-Km.Hasil pur road
Bahawal pur.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


10
Rehman Auto Industry.

ORGANIZATION BACKGROUND

In December,2007 Mr. Zahoor Hussain Dharala made an agreement with


Some Other Well known Industrialists in Lahore and south Punjab,
planning ahead to form a company named “REHMAN AUTO INDUSTRY”.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


11
Rehman Auto Industry.

Parts are the basic in any unit; thus, it was started from the basics. In 1
Years only, the trademark “ROHI MOTOR’s” was very much known in
genuine market, which shows the QUALITY and its economical standard.
The REHMAN AUTO INDUSTRY believes to Produce best quality
motorcycles in the market rather than to maximize their profits.
RAI-70is the only well established motorcycle Company in the Bahawal pur
city which facilitate the local people to work with them and increase their
living standereds.

Organization information:

REGISTERED OFFICE AND FACTORY


Rehman auto Industry 8-Km Hasil pur road BWP

DIRECTORS:
Mr.Zahoor Hussain Dharala Mr. glulam Yaseen

BANKERS:

Bank Alfalah Limited ASKARI BAMK LIMITED

Bank Al-Habib Limited United Bank Limited

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


12
Rehman Auto Industry.

VSION OF RAI
Habib Bank Limited Allied bank Limited

Muslim Commercial Bank Limited

AUDITOR:
Hameed Chaudhri & Company .Chartered Accountants

Phones: 062-2005602
Fax: 062-2050927

E.MAIL: Asif_Cmc2018@hotmail.com

Rehman auto Industry, being Chines, always believe in quality leadership customer
satisfaction and satisfaction of Owners. The executives and managers at RAI are keen
about the staff cooperation and dedication. That’s why promoting teamwork culture is the
core activity of the Organization. The vision of RAI as follows:

To Achieve a market leader in the

motorcycle industry and emerge as a

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


13
Rehman Auto Industry.

globally competitive center of

production.”.

MISSION STATMENT
Mission Statement, the statement that further reveals the practicalities of any
organization, comparable to its vision statement. MISSION STATEMENT

To be the partner of first choice for customers

and suppliers, ensuring sustained leadership

position in the markets where we compete,

delivering long-term business value through a

high performance culture, innovation, ethics

and responsible care.

GOALS OF RAI

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


14
Rehman Auto Industry.

o Dedicated involvement of every employee at all levels of the organization to the


total quality management concepts.
o A complete focus or prevention of non conformance through cohesive team work.
o Constant emphasis on “doing it right the first time and every time”.
o Improving the quality of every thing we do, to the complete satisfaction of our
internal and external customers.

STRATEGIC PLANNING

o Market drives innovation in products and services.

o Winning in quality growth markets worldwide.

o Inspiration and reward of trained people.

o Exemplary performance is safety and health.

o Efforts for the environment.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


15
Rehman Auto Industry.

COMPANY POLICY & STRTIGY


CUSTOMER
Our customers are the reason and source of our business , it is our joint aim with our

dealers to ensure that the customer enjoy the highest level of satisfaction from use of

REHMAN AUTO INDUSTRYmotorcycle.

QUALITY
To ensure that our product and service meet the set standards of excellence.

LOCAL MANUFACTURING
To be the industry leader in indigenous of motorcycle parts.

TECHNOLOGY
To develop and maintain distinct business advantage through continuous induction of
improved hard and soft technology.

EMPLOYEE
To enhance and continuously update each member’s capabilities and education and to
provide an environment to encourage practical expressions of individual potential in goal
directed team efforts and compensate them attractively, according to their abilities and
performance.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


16
Rehman Auto Industry.

MARKETING MIX

There are four elements of marketing


 Product
 Price
 Place
 Promotion

PRODUCT
Rehman Auto Industry basic products
 REHMAN AUTO INDUSTRY RI 70 and 100 cc
This is the four stroke motorcycles. Both the products have a good repute in the market
and that is the reason that REHMAN AUTO INDUSTRY has approximately 20% market
share now a days. The basic reason of the success is the quality maintained by the
company throughout its career. The models of REHMAN AUTO INDUSTRY are being
manufactured in Sadiqabad . Plant has a capacity to produce 250 motorcycles per day,
but still the market demand is not being fulfilled.
In order to increase market share marketing department perform following activities
 New model
 Changes in design

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


17
Rehman Auto Industry.

COMPETITIVE
ANALYSIS.

In automobile industry following vehicles are available for traveling.


 Buses
 Cars
 Trains
 Aero planes
 Motorcycles
 Cycles
 Rickshaws
But we are concern with Motorcycles automobiles.
In competitive analysis we are compare the Rohi RAI 70 brand with all available its
competitors brands as following.

According to details Industries is assembling the following brands as Rohi RAI 70

Rohi RAI 70

 United US-70

 Ravi RA-70

 Star DS-70

 Lifan 70cc

 Super Power SP-70

 Unique UD-70cc

 Hero RF-70cc

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


18
Rehman Auto Industry.

 Royal Star RS-70cc

Level of Competition:
 Generic competition

Car, Motorcycle, Cycle, Animal.

 Industry competition

Honda, Yahma, Suzuki, Kawasaki.

 Brand competition
Honda70, Hero, Ravi, Star etc

Market Based
Full campaign promotion of RIE-70

Value Creation

 Customer segmentation
Male ------Female
Age above 18 Years
Income group above Rs.20000
Rs.15000 – Rs.19000
Rs.10000 – Rs.14000

 Market selection
Male
age above 18 Years

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


19
Rehman Auto Industry.

income group of above than Rs.8000


 Value positioning

Quality Based

" The Right Investment".

Provide the value

 Product development

Raw material
Engine are import from China.
Machinery & Installation: In BAWAL PUR.

 Services development

A regular skill development program for engineers and other support staff is implemented
through local and foreign training courses.

The various activities performed at RAI, After Sales & Services department are listed
below:

 Spare Parts sales.


 Free Bike Service.
 Training Rehman Industry (Rohi) Mechanics.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


20
Rehman Auto Industry.

 Addressing warranty claims.


Specific activities also include:

 Settling warranty claims within 48 hours.


 Demand Management of Spare Parts.
 Control & Check on Lead Time.
 Maintaining good relationship with Service Dealers through:

 Recreational Activities
 Factory Visits
 Training & also new model training.

PRICE

Meaning of Price:

Price is the amount of money and/or other items with utility needed to acquire a product.

RAI-70RAI-70has two products and their prices are as under


RAI-70RAI-70 Rs. 42500

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


21
Rehman Auto Industry.

The company PROMOTION uses the single


price strategy. It means the
product has the same price all over the Pakistan.
Initially RAI-70RAI-70 was the only producer of qualitative four-stroke motorcycle in
BAHAWAL PUR. So they were taking the advantage of this monopolistic situation and
using the price skimming strategy and were charging higher price
Due to these high prices the competitors found a gap and entered into the market with
low prices and start capturing market share. After the intense research work RAI-70RAI-
70 was in a position to reduce prices. The major objective to reduce the prices was to
increase the market share and to utilize full production capacity. So company has reduced
Rs. 2000 in RAI-70RAI-70.

Promotion mix is
 Advertisement
 Sales promotion
 Personal selling

ADVERTISEMENT
RAI-70uses the print media as well as electronic media for advertisement. In print media
the company gives advertisements in newspapers and it also uses billboards on the road
side for the promotion of the product.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


22
Rehman Auto Industry.

On electronic media, company


gives their
GEO channel
DISTRIBUTION advertisement on
during hourly
news. Company has a contract with AdCom (advertising agency) for all of its advertising
activities.

SALES PROMOTION
RAI-70also promotes its product through different sales promotional activities.
 Company sponsors different functions and activities in main cities.
 Company provides rewards and incentives to their dealers on achieving targets.
Company send their successful dealers to different trips all over the world.

PERSONAL SELLING
The company does personal selling as well, not to individuals but to institutional
customers.

RAI-70gained good market share due to its strong distribution network. For distribution
RAI-70has divided the whole country into two regions.
1. South region

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


23
Rehman Auto Industry.

2. North region

SOUTH REGION
It includes following territories
 Karachi
 Sukkur
 Quetta
(This covers whole Baluchistan province)

NORTH REGION
It includes following three territories
 Multan
(Its includes all lower Punjab cities)
 Lahore
(It covers cities from upper Punjab)
 Rawalpindi
(It covers Islamabad and NWFP.)

“5S” DEALERS
This is a new emerging trend set by REHMAN AUTOS. Now days the company is
emphasizing on “5S” facilities to their customers through “5S dealers”.
5s stands for the following five facilities
1. Sale
2. Service

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


24
Rehman Auto Industry.

3. Spare parts
4. Special sale
5. Second hand sales

SALE
It SWOT ANALYSIS includes only the sale
of new motorcycles.

SERVICE
It includes after sale service to the customers like Warranty claims, Tuning of
motorcycles, Repair of motorcycles etc.

SPAREPARTS
Company provides spare parts facility to their customer
.

SPECIAL SALE
It deals with the credit facility. In special sale, the dealer provides the customer with
credit facility at his own behalf. RAI-70does not provide any support for credit sale.

SECOND HAND SALE


Dealer also deals in second hand RAI-70motorcycles. The company wants that the
customer might not switch to other brand even in second hand motorcycles.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


25
Rehman Auto Industry.

SWOT Analysis is a strategic planning method used to evaluate the Strengths,


Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieving that
objective.

 STRENGTHS

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


26
Rehman Auto Industry.

RAI-70. has following strengths.

QUALITY PRODUCT
RAI-70. has quality products, which is one of its major strengths.

GOOD IMAGE
Company has a good and favorable image in the market and in the mind of
customers.

EXCELLENT SERVICES
Company provides excellent services (after sales services) to its customers.

FINANCIAL STRENGTH
RAI-70. is financially strong company which is its another strength.

COMMITTED EMPLOYEES
Company has committed and devoted employees that are loyal to the company,
which is another strength of the company.

AVAILABILITY OF PARTS
The Spare Parts OF the motorcycles are easily available all over the country
which is another strength of the company.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


27
Rehman Auto Industry.

RESEARCH AND DEVELOPEMENT


The company has an R&D department which suggests the production department
to use latest technologies.

MARKET RESEARCH
Company has a sophisticated market research system. With the help of this
system company is able to get knowledge about competitors activities and market trends.

INNOVATIVE CULTURE
The culture of the company is very rich which is supportive for employees to
innovate new ways to improve the things.

VENDOR IMPROVEMENT PROGRAM


Company has a vendor improvement program. With the help of this program
company is able to convince vendors to produce better quality for the company
productions.

LOCALIZATION
Till now company is in a position to localize its productions up to 89%. Almost
89% of parts to be used in production are in house.

LESS EMPLOYEE TURN OVER


Employee turn over is very less at RAI-70. This shows that the employees are
well satisfied with their jobs.

 WEAKNESSES

HIGH PRICE

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


28
Rehman Auto Industry.

The price of RAI-70motorcycle is relatively higher than others.

LESSER PROMOTIONAL ACTIVITIES


Company has lesser promotional activities. Usually it does not use electronic
media to promote the motorcycle but now company is adopting the strategy to use the
electronic medias well for promotion..

 OPPORTUNITIES

“5S” CONCEPT
New concept of “5S” is an opportunity for company to develop. With this new
concept company has introduced two new “S” other than sales, spare parts and service.
These are special sales and second hand sale. According to this new idea dealers will help
The customers to replace their second hand motorcycle with new one and customers can
get motorcycle on credit as well.

POOR QUALITY OF CHINESE BRANDS


Chinese brands that are available in the market are not comparable with RAI-
70motorcycle in quality terms. So the poor quality of Chinese brands is an opportunity
for the company as the company believes that people using Chinese brand will eventually
switch back towards RAI-70because of relatively poor quality of Chinese brands..

GOVERNMENT RULE OF LOCALIZATION


Recently government of Pakistan has passed a rule for the motorcycle industry in

Pakistan. According to this rule, within few years only that motorcycle company will be

able to sell their brands which will localize its production at a rate of 5% to 10 % each

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


29
Rehman Auto Industry.

year. RAI-70has localized its production up to 89% till now. So the company is leading

the industry in this regard. This is an opportunity for company as it has more government

support because of this reason (localization).

 THREATS

MARKET CONDITIONS OF KARACHI


Karachi is most populated city of Pakistan. So it is a huge market for the
company. But now a days snatching of new RAI-70motorcycle is very common in
Karachi. Because of this reason people are reluctant to buy new motorcycle. So it is a
great threat for the company.

NEW BCG SHARE MATRIX CHINESE


BRANDS
There are more than
15 Chinese brands of motorcycle available in the market. These are competing RAI-70 in
price terms very badly. So it is a threat for the company.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


30
Rehman Auto Industry.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


31
Rehman Auto Industry.

HUMAN RESOURCE DEPARTMENT


DEAPRTMENTS

I have visited following departments of REHMAN AUTO INDUSRTY.

 Finance
 Quality control department
 Information technology
 Marketing

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


32
Rehman Auto Industry.

FINANCE

FINANCE:___________________________________________

Glulam Yaseen (Director)

REHMAN AUTO INDUSTRY has a well established finance department. It is totally


computerized .it has its own system which is prepared by IT department.
Finance department has further following sections.

 Finance
 General ledger
 Costing
 Taxation
 Sales
 Payables
 Payroll

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


33
Rehman Auto Industry.

This section deals with the


 Banking matters
 Fund management
 Import accounting.

COSTING
It is an important section of finance department, which deals with all costing
matters including all material, labor, and overhead costs.

TAXATION
It deals with all tax and custom duty related affairs.

PAYABLES
This section deals with the following activities.
 Vender payables
 Utility payables
 Insurance payables
 Tax payables
 Club payments

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


34
Rehman Auto Industry.

 Other payable

PAYROLLS
This section controls the salary system of the organization. All the system is
computerized. First of all the attendance of all employees is recorded and at the end of
the month salary of all employees are paid after all deductions*
 Tax deductions, absenteeism deductions and all other deductions

GENERAL LEDGER
Finally all the transactions are recorded in general ledgers. General ledger for each
account is maintained separately. There is a computerized system, which then produce
different statements.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


35
Rehman Auto Industry.

QUALITY CONTROL DEPARTMENT

Mr.Zahid Farooq
We fully concentrate on our quality because we are offering quality to our customers. We
have Quality Control department which is equipped according to the requirement of
PSQCA and EDBP. All the parts are checked by the Quality Control equipment in all the
process of manufacturing in our plant.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


36
Rehman Auto Industry.

Quality Checking Tools

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


37
Rehman Auto Industry.

INFORMAION TECHNOLOGY DEPARTMENT

REHMAN AUTO INDUSTRY has a sophisticated IT system. All the departments are

linked through network. Each and every department is computerized. This

computerization has reduced the burdens on employees. Particularly the employees of

finance department have different soft wares to support their work. All these soft wares

have been developed by company’s own IT department. Mostly soft wares are developed

in-house and in some special cases outsourcing is also being used.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


38
Rehman Auto Industry.

VISION STATEMENT
OF IT MARKETING DEPTT
DEPARTMENT

I.T Department is dedicated to provide reliable information base using most modern
technology to potential users at all levels. Our professionals individually and collectively,
will constantly improve their competitive skills and excel in providing quality service
covering all the aspects of the technology.

By embarking into the digital age we will accelerate the positive effects and mitigate the
challenges as knowledge grows when shared.

We will innovate in a research-oriented manner with technologies to create our own


future and value added activities for profitable relationships with our stakeholders, thus
encouraging intellectual curiosity for our products, service and insight that will help
people around the world, shape the ways business and education will be done in future.
Our professionals and their competitive skills will be the hallmark, that combined with
technology innovation, expert skills and teamwork, will keep us leaders in "CHANGE" to
open new doors.

Marketing department is divided into three parts on behalf of its functions.


 Sale
 Service
 Spare parts

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


39
Rehman Auto Industry.

FINANCIAL ANALYSIS
OF REHMAN AUTO INDUSTRY
SALE
It is an important division of marketing department. It is the profit centre of the
company. It deals with three types of sales.

INDIVIDUAL SALE
This is the usual sale to the individuals. This usually follows the following path.
Company Dealer Customer
SERVICE

The second major section of the marketing department is service section. The service
section deals with
 service dealers
 Warranty and training centre.

SPARE PARTS
This is another important division of the marketing department. Basically company

doesn’t consider it as profit center rather a supportive section to produce better customer

service. It has separate distribution system and different parts dealers in different regions

FINANCIAL RATIOS
Financial statements have two major uses in financial analysis .first, they are used to
present a historical recover of the firm’s financial development. Second, they are used for

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


40
Rehman Auto Industry.

a course of action for the firm. A performance financial statement is prepared for a future
period. It is the financial manager’s estimate of the firm’s future performance. The
operation and performance of a business depends on many individuals are collective
decisions that are continually made by its management team. Every one of these
decisions ultimately causes a financial impact, for better or works on the condition and
the periodic results of the business. In essence, the process of managing involves a series
of economic choices that activates moments of financial resources connected with the
business.

Some of the decisions made by management one will be the major, such as investment in
a new facility, raising large amounts of debts or adding a new line of products or services.
Most other decisions are part of the day to day process in which every functional area of
the business is managed. The combine of effect of all decisions can be observed
periodically when the performance of the business is judged through various financial
statements and special analysis.

DIFFERENT TYPES OF FINANCIAL RATIOS:


Major ratios can be calculated from financial statements.

 Liquidity ratios
 Leverage ratios
 Activity ratios

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


41
Rehman Auto Industry.

 Profitability ratios

Liquidity Ratio. (Purpose for short term financial strength).


These ratios measure the firm’s ability to meet short term obligation, usually for a period
of one year. These ratios are used to assess the short term financial position of the
business and measure the firm ability to continue to stay in business.

Working Capital = Current Assets - Current Liabilities


Jan2017 july2017
Rs. 11,850,000 Rs. 2,530,000

REHMAN AUTO INDUSTRIES has increased Working Capital in July 2017 as


compared to June 2017. That shows company has much cash to meet its short term
obligations.

Current Ratio:

The current ratio gauges how capable a business is in paying current liabilities by using
current assets only. Current ratio is also called the working capital ratio

The formula is:

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


42
Rehman Auto Industry.

Total Current Assets


_____________________

Total Current Liabilities

Jan
2017____________________________________________________1.48%

July
2017____________________________________________________1.38%

Comments: Last quarter the current ratio was 1.48 and the next quarter 1.38.So the
difference is telling that the company current assets are decreased.

Quick Ratio:

Quick ratio focuses on immediate liquidity (i.e., cash, accounts receivable, etc.) but
specifically ignores inventory. Also called the acid test ratio, it indicates the extent to
which you could pay current liabilities without relying on the sale of inventory.

The formula is:

Current assets
(- Inventory)
_____________________

Current Liabilities

Jan
2017____________________________________________________24.8%

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


43
Rehman Auto Industry.

July
2017____________________________________________________53.5%
Comments: As the difference is described that the RAI quick ratio in last quarter is
24.8 from last year 53.5 that shows the progress is going too much good in company

LEVERAGE RATIO
Leverage Ratios (propose for long term financial strength)
Debt to Equity:

Debt to equity is also called debt to net worth. It quantifies the relationship between the
capital invested by owners and investors and the funds provided by creditors. The higher
the ratio, the greater the risk to a current or future creditor. A lower ratio means your
client's company is more financially stable and is probably in a better position to borrow
now and in the future.

The formula is:

Total Liabilities (or Debt)


_____________________

Net Worth (or Total Equity)

Jan
2017____________________________________________________0.57%

July
2017___________________________________________________0.616%

Comments: The company debt equity increased as well as the sales of company also
increased with the change in Total Liabilities as well as in Net Worth of the company
from last quarter.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


44
Rehman Auto Industry.

Debt Ratio:
The formula is:

Total Liabilities (or Debt)


_____________________

Total assets

Jan
2017____________________________________________________49%

July
2017____________________________________________________50%

Comments: This ratio shows a minor change in both quarters. which shows stability
that is good for company.

o ACTIVITY RATIO
EffRAI_70ency evaluates how well the company manages its assets. Besides determining
the value of the company's assets, you and your client should also analyze how
effectively the company employs its assets. You can use the following ratios:

Inventory Turnover: This ratio shows how many times in one accounting
period the company turns over (sells) its inventory and is valuable for spotting under-
stocking, overstocking, obsolescence and the need for merchandising improvement.

The formula is:

Cost of Goods Sold


________________

Inventory

Jan 2017_____________________________________________4.92 Times

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


45
Rehman Auto Industry.

July
2017________________________________________________8.32 Times

Comments: Faster turnovers are generally viewed as a positive trend; company


increase the sale in 2nd quarter.

Days Inventory: This ratio identifies the average length of time in days it takes
the inventory to turn over. As with inventory turnover (above), fewer days mean that
inventory is being sold more quickly.

The formula is: 365 Days

______________________

Inventory Turnover

Jan
2017___________________________________________________45Days

July
2017___________________________________________________35Days

Comments: As Ratio shows inventory turnover fewer days mean that inventory is
being sold more quickly. Which means RAI is making progress.

o PROFITABILITY RATIOS
Indicate to the firm how effectively the business is being managed. These ratios provide
the firm information about the company's bottom line -- simply stated they describe how
successfully the firm is running the business

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


46
Rehman Auto Industry.

Gross Profit Margin: Gross profit margin indicates how well the company
can generate a return at the gross profit level.

The formula is

Gross Profit

________________

Net sales

Jan
2017___________________________________________________9.7%

July
2017___________________________________________________13.31%

Comments: The G.P margin ratio increased in 2nd quarter. Which shows the Variable

Cost is effRAI_70ently controlled by the management.

Operating Profit Margin:

The formula is

EBIT

________________

Net sales

Jan
2017___________________________________________________4.69%

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


47
Rehman Auto Industry.

July
2017___________________________________________________7.48%

Comments: The O.P margin ratio increased in 2nd quarter. Which shows the Expenses
are effRAI_70ently controlled by the management

Net Profit Margin:  The net profit on sales ratio (also called the profit margin
on sales ratio) measures the headquarters' organization's profit per dollar of sales. The
profit margin on sales ratio is calculated as:

The formula is

Net Profit after Tax

________________

Net Sales
Jan
2017___________________________________________________2.5%

July
2017___________________________________________________4.9%

Comments: As the net profit after tax increase as compared to last Quarter due to
decreased fixed expense therefore the net profit margin ratio increased.

Return on total assets:

The formula is

Net Profit

________________

Net ASSETS

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


48
Rehman Auto Industry.

Jan
2017___________________________________________________5.91%

July
2017___________________________________________________11.76%

Comments: As it is increased as compared to the last Quarter .Which shows the


profit is generated effRAI_70ently by the better productivity of Assets

FINDING AND SUGGESTIONS

I have found the following things important during this project


It is a better time to introduce some new model. There is an intense competition in the
market so major change in model will pave a better way for the company not only to
maintain the existing shares but also to increase the number of market share.
Company should increase its capacity in long run and in short run company should start
night shifts to fulfill the increasing market demands of their products.
Company should develop proper measures to eliminates the rumors from the market
regarding the company and its dealers
Company should control the prices of the motorcycle in the markets. We have observed
some dealers at our own, selling the motorcycles to the customers above the market price.
Although the company has already a system to control the price but it is not
suffRAI_70ent.

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


49
Rehman Auto Industry.

CONCLUSION
REHMAN AUTO INDUSTRIES main aim is to provide the latest, cutting-edge
technology, yet affordable means of transportation to people from all walks of life. We
have the infrastructure, business set-up and campaign management expertise to facilitate
us in building a solid reputation through the delivery of reliable technologies and
services, along with dedicated management and customer service personnel.As Auto
technology constantly evolves, our excellent resources will enable us to develop new
solutions that can enhance your demands and offerings by bringing new and innovative
services to the market first.
With the world of business becoming increasingly sophisticated, the requirement for
rapid, reliable and cost-effective solutions is critical to the success of our corporate
clients and individual customers. Most businesses have a common range of requirements,

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


50
Rehman Auto Industry.

but many have far more complex needs. As a dynamic company ROHI MOTORCYCLE
takes pride in its ability to respond rapidly and with great flexibility to meet individual
customer needs.
It was a good experience for me to work for the RAI_70 as an internee. I learned a lot of
good things during my internship period in the organization. I worked in different
Departments ofRAI_70. First I worked on the Store department through which I got
maximum knowledge and experience and than I have an other department Assembly line
for one week. There I came to know a lot about the manufacturing and parts of the
organization .
After that I worked on another department that is engine shop, paint shop, and at last the
FINANCE & Marketing department.
In the end, through my internship period the conclusion is that my 6 weeks in RAI_70
helps me in order to achieve an excellent carrier. And also this successful experience
opens the door of jobs in multinational companies for me.

References:

http://www.Atlashonda.com/pk http://www.pama.com.pk

http://www.mhhe.com http://www.google.cpm/

http://www.rai70.com.pk

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


51
Rehman Auto Industry.

Book Brand Management Marketing Management

BY By
Rondlend Philip Kottler 12th/ed

Advertising and Promotion

By
Michel Belch 6th ed

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


52
Rehman Auto Industry.

CERTIFICATE

This is to certify that this internship report submitted by Mr. MAJID ALI is accepted in
its present from the Department of management Sciences “The Islamia University of
Bahawalpur” as satisfying the requirement for the degree of Bachelor Business
administration

Committee

Supervisor Chairman
Ms Tabinda kiren DR Jawad iqbal
Department of Commerce Department of management Sciences
The is lamia University of The Is lamia University of
Bahawalpur Bahawalpur

Rohi Motorcycle ( RI 70 and 100) is the Product of Rehman Auto Industry.


53

You might also like