AFS - Indus Motors

Indus Motor Company
Analysis of Financial Statement
Submitted To:
Sir Shuja Ali
Submitted By:
Sameer Tariq (090032)
Air University, Islamabad

1
Company Information:
Company Registration Number:
0020742
National Tax Number:

0676546 7
Status of the Company:

Listed On:
Karachi Stock Exchange (Guarantee) Ltd
Lahore Stock Exchange (Guarantee) Ltd
Islamabad Stock Exchange (Guarantee) Ltd
Symbol:
INDU
Details of Permissible Business Activities:

Manufacturers, assemblers, distributors and importers of Toyota and Daihatsu vehicles,
spare parts and accessories in Pakistan.
Bankers:
Askari Bank Limited
Bank Alfalah Limited
Barclays Bank PLC Pakistan
Bank Al-Habib Limited
Citibank N.A.
Habib Bank Limited
Habib Metropolitan Bank Limited
HSBC Bank Middle East Limited
MCB Bank Limited
National Bank of Pakistan
NIB Bank Limited
2
Soneri Bank Limited

Standard Chartered Bank (Pakistan) Limited
The Bank of Tokyo-Mitsubishi UFJ, Limited
United Bank Limited
Auditors:
A.F. Ferguson & Co.
Chartered Accountants
State Life Building No. 1-C,
I.I. Chundrigar Road,
Karachi.
Legal Advisors:
A.K. Brohi & Company
Mansoor Ahmed Khan & Co.
Mahmud & Co.
Sayeed & Sayeed Co.
Share Registrar:
Noble Computer Services (Pvt.) Ltd.,
First Floor, House of Habib Building,
(Siddiqsons Tower), 3 Jinnah Cooperative Housing Society,
Main Shahrah-e-Faisal
Karachi-75350.
PABX: (92-21) 34325482-87, Fax (92-21) 34325442
Email: ncsl@noble-computers.com
Address of Head Office / Registered Office / Factory
Plot No. N.W.Z/1/P-1, Port Qasim Authority,
Bin Qasim, Karachi.
Phone: (PABX) (92-21) 34720041-48
(UAN) (92-21) 111-TOYOTA (869-682)
Fax: (92-21) 34720056
Email: customer.relations@toyota-indus.com
Memberships:
Pakistan Automotive Manufacturers Association (PAMA)
The Overseas Investors Chamber of Commerce & Industry (OICCI)
Karachi Chamber of Commerce & Industry (KCCI)
Pakistan Business Council (PBC)
Associated Companies:
Toyota Motor Corporation, Japan
Toyota Tsusho Corporation, Japan
Thal Limited
Habib Insurance Co. Limited
Shabbir Tiles & Ceramics Ltd.
Makro-Habib Pakistan Ltd.
Habib Metropolitan Bank Limited
Vision and Mission Statements:

Vision Statement:
To be the most respectable and successful enterprise, delighting customers with a wide
range of products and solutions in automobile industry with the best people and the best
technology.
Mission Statement:
IMCs Mission is reflected in our Companys Slogan
ACT # 1
Action, Commitment and Teamwork to become #1 in Pakistan.
The Indus Team is committed to ACT so that it achieves the #1 position in the auto industry
in:
Respect and Corporate Image
Customer Satisfaction
Profitability
Quality and Safety
Production and Sale
Best Employer
History:
Indus Motor Company (IMC) is a joint venture between the House of Habib , Toyota Motor
Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for assembling,
progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01,
1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd.
vehicles in Pakistan through its dealership network.
The company was incorporated in Pakistan as a public limited company in December 1989
and started commercial production in May 1993. The shares of company are quoted on the
stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation
have 25 % stake in the company equity. The majority shareholder is the House of Habib.
IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an
area measuring over 105 acres.
Indus Motor Companys plant is the only manufacturing site in the world where both
Toyota and Daihatsu brands are being manufactured.
Heavy investment was made to build its production facilities based on state of art
technologies. To ensure highest level of productivity world-renowned Toyota Production
Systems are implemented.
IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux
Single Cabin 4x2 and 4 versions of Daihatsu Cuore. We also have a wide range of imported
vehicles.
Collaboration:
EQUITY
Toyota Motor Corporation
Toyota Tsusho Corporation
House of Habib
BUSINESS
TOYOTA GROUP
Technology & KD Parts
Materials, Parts & Logistics Support
Technology KD Parts
Hilux Frame & Deck
Core Values:
These are the core values of Indus Motor Company Limited:
World class production quality

Achieving the ultimate goal of complete customer satisfaction
Being seen as the best employer
Fostering the spirit of teamwork
Inculcating ethical and honest practices
Strategic Objectives:
Achieving market leadership by delivering value to customers:
Following our Customer First philosophy in manufacturing and providing high
quality vehicles and services that meet the needs of Pakistani customers.
Enhancing the quality and reach of our 3S Dealership Network.
Employing customers insight and feedback for continuous corporate renewal,
including product development, improving service and customer care.
Bringing Toyota Quality to Pakistan

Maximizing QRD (Quality, Reliability and Durability) by built-in engineering.
Transferring technology and promoting indigenization at IMC and its Vendors.
Raising the bar in all support functions to meet Toyota Global Standards.
Optimizing cost by Kaizen

Fostering a Kaizen culture and mindset at IMC, its Dealers and Vendors.
Implementing Toyota Production System.
Removing waste in all areas and operating in the lowest cost quartile of the
industry.
Respecting our people

Treating employees as the most important sustainable competitive resource.
Providing a continuous learning environment that promotes individual creativity
and teamwork.
Supporting equal employment opportunities, diversity and inclusions without

discrimination.
Building competitive value through mutual trust and mutual responsibility
between the Indus Team and the Company.
Becoming a Good Corporate Citizen

Following ethical business practices and the laws of the land.
Engaging in the philanthropic and social activities that contribute to the
enrichment of Pakistani society, especially in the areas that are strategic to both
societal and business needs e.g. Road Safety, Technical Education, Environment
Protection, etc.
Enhancing corporate values and respect while achieving stable and long-term
growth for the benefit of our shareholders.
10
Stockholder Information:
Factory / Registered Office
Plot No. N.W.Z/1/P-1, Port Qasim Authority,
Bin Qasim, Karachi.
PABX: 92-21-34720041-48
Fax: 92-21-34720056
Share Registrar:
Noble Computer Services (Private) Limited
First Floor, House of Habib Building
(Siddiqsons Tower), 3-Jinnah C. H. Society,
Main Shahrah-e-Faisal, Karachi 75350.
PABX: 92-21-34325482-87
Fax: 92-21-34325442
Ownership:
On June 30, 2011, there were 3,497 shareholders on record of the Companys ordinary
shares.
Listing on stock exchanges:

Indus Motor Company Limited equity shares are listed on Karachi, Lahore and Islamabad
Stock Exchanges.
Stock Code:
The stock code for dealers in equity shares of Indus Motor Company Limited at KSE, LSE
and ISE is INDU.
11
12
Financial Statement Analysis:

This section will include the following to analyze the Financial Statements of Indus Motor
Company Limited:
Vertical Analysis
Horizontal Analysis
Ratio Analysis
13
Profit and Loss Account
14
Profit and Loss Account:
Net sales
Cost of sales
Gross profit
Distribution
costs
Administrative
expenses
Other operating
expenses
Other operating
income
Finance cost
Profit before
taxation
Taxation
Profit after
taxation
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
39,061,226
(34,620,632)
4,440,594
41,423,843
(37,575,356)
3,848,487
37,864,604
(35,540,418)
2,324,186
60,093,139
(55,382,306)
4,710,833
61,702,677
(57,613,542)
4,089,135
(509,986)
(487,373)
(469,985)
(468,496)
(690,130)
(265,302)
(775,288)
3,665,306
(297,284)
(784,657)
3,063,830
(352,249)
(822,234)
1,501,952
(381,575)
(850,071)
3,860,762
(462,517)
(1,152,647)
2,936,488
(348,430)
3,316,876
(306,193)
2,757,637
(156,479)
1,345,473
(416,106)
3,444,656
(355,796)
2,580,692
956,494
4,273,370
(43,889)
786,834
3,544,471
(2,760)
727,080
2,072,553
(26,540)
1,801,459
5,246,115
(3,576)
1,507,878
4,088,570
(77,115)
4,229,481
(1,483,780)
3,541,711
(1,250,866)
2,046,013
(660,911)
5,242,539
(1,799,136)
4,011,455
(1,268,071)
2,745,701
2,290,845
1,385,102
3,443,403
2,743,384
15
Vertical Analysis (Profit and Loss Account):
Net sales
Cost of sales
Gross profit
Distribution
costs
Administrative
expenses
Other operating
expenses
Other operating
income
Finance cost
Profit before
taxation
Taxation
Profit after
taxation
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
100.00%
88.63%
11.37%
100.00%
90.71%
9.29%
100.00%
93.86%
6.14%
100.00%
92.16%
7.84%
100.00%
93.37%
6.63%
1.31%
1.18%
1.24%
0.78%
1.12%
0.68%
1.98%
9.38%
0.72%
1.89%
7.40%
0.93%
2.17%
3.97%
0.63%
1.41%
6.42%
0.75%
1.87%
4.76%
0.89%
8.49%
0.74%
6.66%
0.41%
3.55%
0.69%
5.73%
0.58%
4.18%
2.45%
10.94%
0.11%
1.90%
8.56%
0.01%
1.92%
5.47%
0.07%
3.00%
8.73%
0.01%
2.44%
6.63%
0.12%
10.83%
3.80%
8.55%
3.02%
5.40%
1.75%
8.72%
2.99%
6.50%
2.06%
7.03%
5.53%
3.66%
5.73%
4.45%
Interpretation:
The vertical analysis is used to measure the accounts in comparison with the other
businesses. In this profit and loss account the cost of sales contains the major portion of net
sales which is 88.63% in FY 2007, 90.71% in FY 2008, 93.86% in FY 2009, 92.16% in FY
2010 and 93.37% in FY 2011.
16
Horizontal Analysis (Profit and Loss Account):
Net sales
Cost of sales
Gross profit
Distribution
costs
Administrative
expenses
Other operating
expenses
Other operating
income
Finance cost
Profit before
taxation
Taxation
Profit after
taxation
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
100.00%
100.00%
100.00%
106.05%
108.53%
86.67%
96.94%
102.66%
52.34%
153.84%
159.97%
106.09%
157.96%
166.41%
92.09%
100.00%
95.57%
92.16%
91.86%
135.32%
100.00%
100.00%
100.00%
112.05%
101.21%
83.59%
132.77%
106.06%
40.98%
143.83%
109.65%
105.33%
174.34%
148.67%
80.12%
100.00%
100.00%
87.88%
83.14%
44.91%
40.56%
119.42%
103.85%
102.11%
77.80%
100.00%
100.00%
100.00%
82.26%
82.94%
6.29%
76.02%
48.50%
60.47%
188.34%
122.76%
8.15%
157.65%
95.68%
175.70%
100.00%
100.00%
83.74%
84.30%
48.38%
44.54%
123.95%
121.25%
94.85%
85.46%
100.00%
83.43%
50.45%
125.41%
99.92%
Interpretation:
In the horizontal analysis, the items in a financial statement are measured over a certain
period of time. As compared to the FY 2007 the net sales in FY 2008 has increased by
6.05%, in FY 2009 it has decreased by 3.06%, in FY 2010 it has increased exponentially by
53.84% and same is the case in FY 2011 the net sales have increased by 57.96%. Going on
to the cost of sales, it has increased by 66.41% in FY 2011 which is the most increase in this
time series. Same is the case in distribution costs the percentage has increased by 35.32%
as compared to FY 2007 in FY 2011. The operating expenses shows an increasing trend till
FY 2010 but falls in FY 2011 from 88.34% to 57.65%. The change is a decrease by 30.69%.
17
Balance Sheet
18
Balance Sheet:
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
Assets
Non-current assets
Fixed assets
Long-term loans and
advances
Long-term deposits
Current assets
Stores and spares
Stock-in-trade
Trade debts
Current maturity of
finance under musharika
arrangements
Loans and advances
Short-term prepayments
and trade deposits
Accrued mark-up
Other receivables
Investments - at fair value
through profit and loss
Taxation-net
Cash and bank balances
Total Assets
2,093,852
4,033,762
3,934,473
3,324,333
4,225,710
28,487
6,629
2,128,968
42,341
7,222
4,083,325
28,509
7,222
3,970,204
15,570
7,122
3,347,025
11,949
9,222
4,246,881
227,191
2,859,951
665,647
232,142
2,637,629
1,332,832
128,483
4,088,858
1,736,631
111,567
5,198,367
1,613,247
189,755
5,690,052
1,356,068
3,710
401,918
0
737,372
0
894,459
0
839,819
0
926,174
47,523
132,634
605,725
23,148
35,012
74,360
16,876
50,944
67,902
18,778
57,254
196,241
18,900
52,586
149,533
0
48,520
8,543,263
13,536,082
54,171
209,533
4,328,585
9,664,784
0
0
9,731,166
16,715,319
0
0
15,755,980
23,791,253
4,993,464
399,006
8,812,199
22,587,737
15,665,050
13,748,109
20,685,523
27,138,278
26,834,618
19
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
Liabilities and Equity

Equity
Share capital
Authorized capital
100,000,000
(2006:100,000,000)
Ordinary shares of Rs 10
each
Issued, subscribed and

paid-up capital
Reserves
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
786,000
7,257,975
8,043,975
786,000
8,650,340
9,436,340
786,000
9,510,973
10,296,973
786,000
11,801,615
12,587,615
786,000
13,333,648
14,119,648
210,149
210,149
532,138
532,138
503,700
503,700
325,797
325,797
454,012
454,012
2,892,017
2,793,554
3,942,988
5,905,062
5,740,869
4,514,480
715
985,972
105
5,926,529
673
8,076,281
944
6,519,669
420
3,714
0
7,410,926
0
0
3,779,631
0
14,660
9,884,850
0
242,579
14,224,866
0
0
12,260,958
15,665,050
13,748,109
20,685,523
27,138,278
26,834,618
Liabilities
Non-current liabilities
Deferred taxation
Current liabilities
Trade and other payables
Advances from customers
and dealers
Accrued mark-up
Short-term running
finances
Current portion of
liabilities against assets
subject to finance lease
Taxation - net
Contingencies and
commitments
Total equity and
liabilities
20
Vertical Analysis (Balance Sheet):

2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
Assets
Non-current assets
Fixed assets
Long-term loans and
advances
Long-term deposits
Current assets
Stores and spares
Stock-in-trade
Trade debts
Current maturity of
arrangements
Loans and advances
and trade deposits
Accrued mark-up
Other receivables
Taxation-net
Total Assets
13.37%
29.34%
19.02%
12.25%
15.75%
0.18%
0.04%
13.59%
0.31%
0.05%
29.70%
0.14%
0.03%
19.19%
0.06%
0.03%
12.33%
0.04%
0.03%
15.83%
1.45%
18.26%
4.25%
1.69%
19.19%
9.69%
0.62%
19.77%
8.40%
0.41%
19.16%
5.94%
0.71%
21.20%
5.05%
0.02%
2.57%
0.00%
5.36%
0.00%
4.32%
0.00%
3.09%
0.00%
3.45%
0.30%
0.85%
3.87%
0.17%
0.25%
0.54%
0.08%
0.25%
0.33%
0.07%
0.21%
0.72%
0.07%
0.20%
0.56%
0.00%
0.31%
54.54%
86.41%
0.39%
1.52%
31.48%
70.30%
0.00%
0.00%
47.04%
80.81%
0.00%
0.00%
58.06%
87.67%
18.61%
1.49%
32.84%
84.17%
100.00%
100.00%
100.00%
100.00%
100.00%
21
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000

Equity
Share capital
Authorized capital
100,000,000
(2006:100,000,000)
each

paid-up capital
Reserves
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
5.02%
46.33%
51.35%
5.72%
62.92%
68.64%
3.80%
45.98%
49.78%
2.90%
43.49%
46.38%
2.93%
49.69%
52.62%
1.34%
1.34%
3.87%
3.87%
2.44%
2.44%
1.20%
1.20%
1.69%
1.69%
18.46%
20.32%
19.06%
21.76%
21.39%
28.82%
0.00%
7.17%
0.00%
28.65%
0.00%
29.76%
0.00%
24.30%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.02%
0.00%
47.31%
0.00%
0.00%
27.49%
0.00%
0.07%
47.79%
0.00%
0.89%
52.42%
0.00%
0.00%
45.69%
100.00%
100.00%
100.00%
100.00%
100.00%
Liabilities
Deferred taxation
Current liabilities
and dealers
Accrued mark-up
Short-term running
finances
Current portion of
Taxation - net
Contingencies and
commitments
Total equity and
liabilities
22
Horizontal Analysis (Balance Sheet):

2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
Assets
Non-current assets
Fixed assets
Long-term loans and
advances
Long-term deposits
Current assets
Stores and spares
Stock-in-trade
Trade debts
Current maturity of
arrangements
Loans and advances
and trade deposits
Accrued mark-up
Other receivables
Taxation-net
Total Assets
100.00%
192.65%
187.91%
158.77%
201.82%
100.00%
100.00%
100.00%
148.63%
108.95%
191.80%
100.08%
108.95%
186.48%
54.66%
107.44%
157.21%
41.95%
139.12%
199.48%
100.00%
100.00%
100.00%
102.18%
92.23%
200.23%
56.55%
142.97%
260.89%
49.11%
181.76%
242.36%
83.52%
198.96%
203.72%
100.00%
100.00%
0.00%
183.46%
0.00%
222.55%
0.00%
208.95%
0.00%
230.44%
100.00%
100.00%
100.00%
48.71%
26.40%
12.28%
35.51%
38.41%
11.21%
39.51%
43.17%
32.40%
39.77%
39.65%
24.69%
100.00%
100.00%
100.00%
431.85%
50.67%
71.40%
0.00%
113.90%
123.49%
0.00%
184.43%
175.76%
822.35%
103.15%
166.87%
100.00%
87.76%
132.05%
173.24%
171.30%
23
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000

Equity
Share capital
Authorized capital
100,000,000
(2006:100,000,000)
each

paid-up capital
Reserves
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
100.00%
100.00%
100.00%
100.00%
119.18%
117.31%
100.00%
131.04%
128.01%
100.00%
162.60%
156.49%
100.00%
183.71%
175.53%
100.00%
100.00%
253.22%
253.22%
239.69%
239.69%
155.03%
155.03%
216.04%
216.04%
100.00%
96.60%
136.34%
204.18%
198.51%
100.00%
100.00%
21.84%
14.69%
131.28%
94.13%
178.90%
132.03%
144.42%
58.74%
100.00%
0.00%
0.00%
0.00%
0.00%
100.00%
51.00%
133.38%
191.94%
165.44%
100.00%
87.76%
132.05%
173.24%
171.30%
Liabilities
Deferred taxation
Current liabilities
and dealers
Accrued mark-up
Short-term running
finances
Current portion of
Taxation - net
Contingencies and
commitments
Total equity and
liabilities
24
Interpretation:
Vertical Analysis of Balance Sheet:
The current assets are greater in respective financial years which are 86.41% in FY 2007,
70.30% in FY 2008, 80.81% in FY 2009, 87.67% in FY 2010 and 84.17% in FY 2011. The
major portion of current assets is contained by cash and bank balances which drops in FY
2008 to 31.48% and in FY 2011 to 32.84%. The second major portion of current assets is
contained by stock-in-trade which shows a positive trend in a time series. The non-current
assets have increased in FY 2008.
In the liabilities and equity portion the vertical analysis shows that the major portion is the
equity and the current liabilities. In equity the reserves shows the higher percentage in a
group. Whereas in current liabilities; trade and other payables and advances from
customers and dealers shows the highest percentage.
Horizontal Analysis of Balance Sheet:
The horizontal analysis of the balance sheet shows that the fixed assets shows an
increasing trend but falls in FY 2010. Long-term loans and advances show a decreasing
trend but increases by 48.63% in FY 2008. The short term loans and advances show an
increasing trend. In FY 2009 and FY 2010 the stores and spares have decreased.
In the liabilities and equity portion the reserves shows increasing trend. It has increased by
19.18% in FY 2008, 31.04% in FY 2009, 62.60% in FY 2010 and 83.71% in FY 2011. The
deferred taxation has increased exponentially in FY 2008 by 153.22% and decreased in FY
2009 from 239.69% to 155.03% in FY 2010. The total liabilities and equity has decreased
by 12.24% in FY 2008 but shows increasing trend afterwards.
25
Cash Flow Statement
26
Cash Flow Statement:
Cash flow from operating activities

Cash generatated from operations
Interest paid
Workers profit participation fund
paid
Workers welfare fund paid
Interest received
Income tax paid
Long-term loans - net
Long-term deposits
Net cash flow from operating
activities
Cash flow from investing activities
Fixed capital expenditure
Proceeds from disposal of fixed assets
Investment made in listed mutual
fund
Proceeds from redemption of
investment in listed mutual fund
Receipts from finance under
musharika arrangements
Purchase of market treasury bills
Proceeds from redemption of market
treasury bills
Net cash flow from investing
activities
Cash flow fom financing activities
Repayments of obligation against
assets subject to finance lease
Dividend paid
Net cash flow from financing
activities
Net cash and cash equivalents
Cash and cash equivalents at the
beginning of the year
end of the year
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
4,045,040
(43,411)
(125,517)
(3,427)
6,538,777
(8,267)
7,952,792
(77,415)
1,806,008
(25,443)
(227,390)
(67,655)
780,163
(1,634,104)
(27,468)
(1,448)
(201,390)
(78,562)
702,156
(1,089,890)
(13,854)
(593)
(105,538)
(50,069)
612,950
(465,156)
13,832
0
(282,674)
(37,587)
1,605,244
(1,749,120)
12,939
100
(205,836)
(110,469)
1,017,491
(1,781,441)
3,621
(2,100)
2,823,727
(811,077)
6,536,529
7,424,279
701,831
(805,259)
46,989
(2,422,406)
8,952
(721,823)
42,806
(270,252)
19,864
(1,877,040)
15,548
(25,000)
(50,000)
(1,490,000)
(7,059,000)
26,313
55,922
1,515,186
4,372,743
6,570
0
3,849
0
0
0
0
0
0
(7,048,403)
5,124,596
(750,387)
(2,459,605)
(623,095)
(225,202)
(6,471,556)
(6,413)
(939,844)
(3,878)
(940,118)
0
(510,853)
0
(1,174,263)
0
(1,174,056)
(946,257)
(943,996)
(510,853)
(1,174,263)
(1,174,056)
1,127,083
(4,214,678)
5,402,581
6,024,814
(6,943,781)
7,416,180
8,543,263
4,328,585
9,731,166
15,755,980
8,543,263
4,328,585
9,731,166
15,755,980
8,812,199
27
Vertical Analysis (Cash Flow Statement):

Interest paid
paid
Interest received
Income tax paid
Long-term deposits
activities
fund
treasury bills
activities
Dividend paid
activities
end of the year
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
47.35%
-0.51%
-2.90%
-0.08%
67.19%
-0.08%
50.47%
-0.49%
20.49%
-0.29%
-2.66%
-0.79%
9.13%
-19.13%
-0.32%
-0.02%
-4.65%
-1.81%
16.22%
-25.18%
-0.32%
-0.01%
-1.08%
-0.51%
6.30%
-4.78%
0.14%
0.00%
-1.79%
-0.24%
10.19%
-11.10%
0.08%
0.00%
-2.34%
-1.25%
11.55%
-20.22%
0.04%
-0.02%
33.05%
-18.74%
67.17%
47.12%
7.96%
-9.43%
0.55%
-55.96%
0.21%
-7.42%
0.44%
-1.72%
0.13%
-21.30%
0.18%
-0.29%
-1.16%
0.00%
-9.46%
-80.10%
0.31%
0.00%
0.57%
9.62%
49.62%
0.08%
0.00%
0.09%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
-79.98%
0.00%
0.00%
0.00%
0.00%
58.15%
-8.78%
-56.82%
-6.40%
-1.43%
-73.44%
-0.08%
-11.00%
-0.09%
-21.72%
0.00%
-5.25%
0.00%
-7.45%
0.00%
-13.32%
-11.08%
-21.81%
-5.25%
-7.45%
-13.32%
13.19%
-97.37%
55.52%
38.24%
-78.80%
86.81%
197.37%
44.48%
61.76%
178.80%
100.00%
100.00%
100.00%
100.00%
100.00%
28
Horizontal Analysis (Cash Flow Statement):

Interest paid
paid
Interest received
Income tax paid
Long-term deposits
activities
fund
treasury bills
activities
Dividend paid
activities
end of the year
2007
Rs in 000
2008
Rs in 000
2009
Rs in 000
2010
Rs in 000
2011
Rs in 000
100.00%
100.00%
-3.10%
7.89%
161.65%
19.04%
196.61%
178.33%
44.65%
58.61%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
88.57%
116.12%
90.00%
66.70%
50.44%
40.95%
46.41%
74.01%
78.57%
28.47%
-50.36%
0.00%
124.31%
55.56%
205.76%
107.04%
-47.11%
-6.91%
90.52%
163.28%
130.42%
109.02%
-13.18%
145.03%
100.00%
-28.72%
231.49%
262.92%
24.85%
100.00%
100.00%
300.82%
19.05%
89.64%
91.10%
33.56%
42.27%
233.10%
33.09%
100.00%
200.00%
0.00%
5960.00%
28236.00%
100.00%
0.00%
212.53%
5758.32%
16618.18%
100.00%
58.58%
0.00%
0.00%
0.00%
100.00%
327.78%
83.04%
30.01%
862.43%
100.00%
100.00%
60.47%
100.03%
0.00%
54.36%
0.00%
124.94%
0.00%
124.92%
100.00%
99.76%
53.99%
124.10%
124.07%
100.00%
-373.95%
479.34%
534.55%
-616.08%
100.00%
115.20%
58.37%
131.22%
212.45%
100.00%
50.67%
113.90%
184.43%
103.15%
29
Ratio Analysis
30
Ratio Analysis:
The ratio analysis of Indus Motor Company Limited will include the following:
Turnover ratios
Liquidity ratios
Solvency ratios
Profitability ratios (with reference to investment)
Profitability ratios (with reference to sales)
31
Turnover ratios:
1. Inventory turnover ratio:
Formula =
2006
Inventory
turnover ratio
Cost of goods sold
Inventory
31088906
3959316
2007
2008
2009
2010
2011
10.15
13.67
10.57
11.93
10.58
34620632
2,859,951
37575356
2,637,629
35540418
4,088,858
55382306
5,198,367
57613542
5,690,052
Inventory turnover ratio

16
14
12
10
8
Inventory turnover
ratio
6
4
2
0
2006
2007
2008
2009
2010
2011
Interpretation:
It measures the number of times the inventory has been used or sold in a financial year. So,
in FY 2007 the inventory has been used 10.15 times which increases by 3.52 times in FY
2008 w.r.t FY 2007. Then it decreases by 3.1 times in FY 2009.
32
2. Average of inventory on hand:
Formula =
2007
35.96
Avg of inventory on hand
2008
26.70
2009
34.53
2010
30.60
2011
34.50
Avg of inventory on hand

40.00
35.00
30.00
25.00
20.00
Avg of inventory on
hand
15.00
10.00
5.00
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
This ratio tells us that how long it will take to convert the inventory into sales. The
calculated results show that in FY 2007 it takes 36 days to convert its inventory into
sales. Whereas, in FY 2008 it takes 27 days, in FY 2009 it takes 25 days, in FY 2010 it
takes 31 days and in FY 2011 it takes 35 days approximately.
33
3. Debtor turnover ratio:
Formula =
2006
Debtor turnover
ratio
Net Sales
Debtors
35,236,53
5
738,281
2007
2008
2009
2010
2011
55.65
41.46
24.67
35.88
41.56
39,061,226
41,423,843
37,864,604
60,093,139
61,702,677
665,647
1,332,832
1,736,631
1,613,247
1,356,068
Debtor turnover ratio

60.00
50.00
40.00
30.00
20.00
10.00
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
This ratio shows that how many times the debts have been collected in a year. In FY
2007 it is 55.65 times, in FY 2008 it is 41.46 times, in FY 2009 it is 24.67 times, in FY
2010 it takes 35.88 times and in FY 2011 it takes 41.56 times to collect back the debts
from the account receivables.
34
4. Average collection period:
Formula =
2007
6.56
55.65
Avg collection period

2008
8.80
41.46
2009
14.80
24.67
2010
10.17
35.88
2011
8.78
41.56

16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
The average collection period tells us that in a year after how many days the debt the
collected from the account receivables. The lesser the number the days the better it is. In FY
2007 it takes 7 days, in FY 2008 it takes 9 days, in FY 2009 it takes 15 days, in FY 2010 it
takes 10 days and in FY 2011 it takes 9 days to collect the money from the debtors.
35
5. Creditor Turnover Ratio:
Formula =
2006
Creditor
turnover ratio
Purchases
Creditors
26,923,813
2599911
2007
2008
2009
2010
2011
9.95
2.30
1.07
9.65
8.71
27,327,660
2,892,017
6,541,304
2,793,554
3,597,898
3,942,988
47,500,217
5,905,062
50,744,050
5,740,869
Creditor turnover ratio

12.00
10.00
8.00
6.00
Creditor turnover ratio
4.00
2.00
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
This ratio tells us that how many times the money is paid to the creditors in a financial
year. The lower the times of payment the better it is. In FY 2007 it pays 10 times, in FY
2008 it pays 2.3 times, in FY 2009 it pays 1.07 times, in FY 2010 it pays 10 times and in
FY 2011 it pays money 8.71 times to its creditors in a financial year.
36
6. Average Payment Period:
Formula =
2006
2007
Average
payment period
Creditor
turnover ratio
2008
2009
2010
2011
36.68
158.70
341.12
37.82
41.91
9.95
2.30
1.07
9.65
8.71
Average payment period

400.00
350.00
300.00
250.00
200.00
Average payment
period
150.00
100.00
50.00
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
This ratio tells us that after how many days do the company pays the money to its
creditors. The greater the number of days the better it is. In FY 2007 the company paid
within 37 days, in FY 2008 it paid after 158 days, in FY 2009 it paid after 341 days, in FY
2010 it paid after 38 days and in the FY 2011 it paid within 42 days.
37
7. Fixed Assets Turnover Ratio:
Formula =
Fixed Asset
Turnover Ratio
Net Sales
Fixed Assets
2006
2007
2008
2009
2010
2011
35,236,535
1726811
20.26
39,061,226
2,128,968
13.34
41,423,843
4,083,325
9.40
37,864,604
3,970,204
16.43
60,093,139
3,347,025
16.25
61,702,677
4,246,881
Fixed Asset Turnover Ratio

25.00
20.00
15.00
Fixed Asset Turnover
Ratio
10.00
5.00
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
This ratio tells us the effectiveness of company use of fixed assets to generate sales. It ratio
shows a decrease in FY 2008 - FY 2009 which is 13.34 and 9.40 respectively. But in other
financial years the total assets are being used effectively.
38
8. Total Asset Turnover Ratio:
Formula =
Total Asset
Turnover Ratio
Net Sales
Total Assets
2006
2007
2008
2009
2010
2011
35,236,535
15822468
2.48
39,061,226
15,665,050
2.82
41,423,843
13,748,109
2.20
37,864,604
20,685,523
2.51
60,093,139
27,138,278
2.29
61,702,677
26,834,618
Total Asset Turnover Ratio

3.00
2.50
2.00
1.50
Total Asset Turnover

Ratio
1.00
0.50
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
This ratio tells us the effectiveness of company use of total assets to generate sales. It ratio
shows a decrease in FY 2009 and FY 2011 which are 2.20 and 2.29 respectively. But in
other financial years the total assets are being used effectively.
39
Liquidity Ratios:
1. Current Ratio:
Formula =
2006
Current Ratio
Current Assets
Current Liabilities
14,095,657
9444554
2007
1.83
13,536,082
7,410,926
2008
2.56
9,664,784
3,779,631
2009
1.69
16,715,319
9,884,850
2010
1.67
23,791,253
14,224,866
2011
1.84
22,587,737
12,260,958
Current Ratio
3.00
2.50
2.00
1.50
Current Ratio
1.00
0.50
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
The current ratio determines that whether the firm has enough short term resources or in
other words does the company has enough resources to pay up its debts within a period of
one year. The ratio greater than 1 shows that the company has the resources to pay off its
debts in one financial year. In FY 2008 it was 2.56 that means the company had 2.56 times
the assets as compared to its liabilities.
40
2. Quick Ratio:
Formula =
2006
Quick Ratio
Quick Assets
Current
Liabilities
Current Assets
Stores and
Spares
Stock in trade
9,910,172
2007
1.41
10,448,940
2008
1.80
6,795,013
2009
1.26
12,497,978
2010
1.30
18,481,319
2011
1.36
16,707,930
9444554
7,410,926
3,779,631
9,884,850
14,224,866
12,260,958
14,095,657
13,536,082
9,664,784
16,715,319
23,791,253
22,587,737
226,169
227,191
232,142
128,483
111,567
189,755
3,959,316
2,859,951
2,637,629
4,088,858
5,198,367
5,690,052
Quick Ratio
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Quick Ratio
2006
2007
2008
2009
2010
2011
Interpretation:
The acid test or quick ratio determines that if the company has enough short term most
liquid assets to cover its immediate liabilities. From the results the company in the whole
times series has the capability to pay off its immediate short term debts.
41
3. Cash Ratio:
Formula =
Cash Ratio
Cash and Bank
Balances
Current
Liabilities
2006
2007
1.15
2008
1.15
2009
0.98
2010
1.11
2011
0.72
7,416,180
8,543,263
4,328,585
9,731,166
15,755,980
8,812,199
9444554
7,410,926
3,779,631
9,884,850
14,224,866
12,260,958
Cash Ratio
1.40
1.20
1.00
0.80
Cash Ratio
0.60
0.40
0.20
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
The cash ratio shows that whether the company is using its cash to its best advantage or
not. The greater value of cash ratio means that the company Is not using its cash at its best.
If we look at the results the company is not using its cash at its best in FYs 2007, 2008 and
2010.
42
4. Cash Conversion Cycle:

Formula =
Cash conversion cycle

Avg of inventory on
hand
Average payment period
2007
5.84
2008
-123.2
2009
-291.79
2010
2.95
2011
1.37
35.96
26.7
34.53
30.6
34.5
6.56
36.68
8.8
158.7
14.8
341.12
10.17
37.82
8.78
41.91

50
0
-50
2006
2007
2008
2009
2010
2011
-100
-150
-200
-250
-300
-350
Interpretation:
The cash conversion cycle tells us that how quickly a company can convert its products into
cash through sales. The shorter cycle means the less capital is tied up in the business. The
negative values in FY 2008 and 2009 shows that the company has been holding cash from
the creditors and have not paid for a long time in a period of 1 year. These results have
already been shown in average payment period.
43
Solvency Ratios:
1. Debt to Asset Ratio:
Formula =
Debt to Asset Ratio

Total Debt
Total non-current
liabilities
Total current liabilities
Total Asset
2007
0.49
7,621,075
2008
0.31
4,311,769
2009
0.50
10,388,550
2010
0.54
14,550,663
2011
0.47
12,714,970
210,149
532,138
503,700
325,797
454,012
7,410,926
15,665,050
3,779,631
13,748,109
9,884,850
20,685,523
14,224,866
27,138,278
12,260,958
26,834,618
Debt to Asset Ratio

0.60
0.50
0.40
0.30
Debt to Asset Ratio
0.20
0.10
0.00
2007
2008
2009
2010
2011
Interpretation:
This ratio shows that how much the assets are financed through debt. The lower value of
this ratio means that the greater portion of assets is financed through equity rather than
debt. From the results shown above we can say that in a time series the major portion of
assets is financed through equity.
44
2. Debt to Capital Ratio:
Formula =
Debt to Capital Ratio

Total Debt
Total non-current
liabilities
Total current liabilities
Total Debt + Equity
2007
0.49
7,621,075
2008
0.31
4,311,769
2009
0.50
10,388,550
2010
0.54
14,550,663
2011
0.47
12,714,970
210,149
532,138
503,700
325,797
454,012
7,410,926
15,665,050
3,779,631
13,748,109
9,884,850
20,685,523
14,224,866
27,138,278
12,260,958
26,834,618

0.60
0.50
0.40
0.30
0.20
0.10
0.00
2007
2008
2009
2010
2011
Interpretation:
The ratio tells the users about how the company is financing its operations, along with
some insight into its financial strength. The lesser values from the results shows that the
company has more equity than its debt and is financially strong and that the company is
financing its operations more from its equity rather than debt.
45
3. Debt to Equity Ratio:
Formula =
Debt to Equity Ratio

Total Long term Debt
Total Equity
2007
0.03
210,149
8,043,975
2008
0.06
532,138
9,436,340
2009
0.05
503,700
10,296,973
2010
0.03
325,797
12,587,615
2011
0.03
454,012
14,119,648

0.06
0.05
0.04
0.03
0.02
0.01
0.00
2007
2008
2009
2010
2011
Interpretation:
Taking the long term debt in the debt position gives us an overview of how much long term
liabilities are financed by equity. From the results it shows a smaller portion is financed by
the equity.
46
4. Financial Leverage:
Formula =
2006
Financial
Leverage Ratio
Total Equity
Total Assets
6,257,879
15822468
2007
2008
2009
2010
2011
2.20
1.68
1.74
2.09
2.02
8,043,975
15,665,050
9,436,340
13,748,109
10,296,973
20,685,523
12,587,615
27,138,278
14,119,648
26,834,618
Financial Leverage
2.50
2.00
1.50
Financial Leverage
1.00
0.50
0.00
2006
2007
2008
2009
2010
2011
Interpretation:
The ratio tells us that how much portion of assets it covered by Rs. 1 of equity. The results
show that the company is highly leveraged. Companies that are highly leveraged may be at
risk of bankruptcy if they are unable to make payments on their debt; they may also be
unable to find new lenders in the future.
47
Profitability Ratios (with reference to Investment):

1. Return on assets:
Formula =
2007
17.53%
2,745,701
15,665,050
Return on assets
Net Income
Total Assets
x 100
2008
16.66%
2,290,845
13,748,109
2009
6.70%
1,385,102
20,685,523
2010
12.69%
3,443,403
27,138,278
2011
10.22%
2,743,384
26,834,618
Return on assets
20.00
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Return on assets
2007
2008
2009
2010
2011
Interpretation:
The ratio return on assets shows us that how efficient management is at using its assets to
generate earnings. The FY 2009 result shows the misuse or inefficient use of assets to
generate income.
48
2. Return on equity:
Formula =
2007
34.13
2,745,701
8,043,975
Return on equity
Net Income
Total Equity
x 100
2008
24.28
2,290,845
9,436,340
2009
13.45
1,385,102
10,296,973
2010
27.36
3,443,403
12,587,615
2011
19.43
2,743,384
14,119,648
Return on equity
40.00
35.00
30.00
25.00
20.00
Return on equity
15.00
10.00
5.00
0.00
2007
2008
2009
2010
2011
Interpretation:
This ratio tells us that how much the profit Is generated by the company from the
shareholders contribution. It has decreased in FY 2009 and FY 2011. The ratio has fallen
because of the decline in the net income.
49
3. Operating return on asset:
Formula =
Operating return on
assets
Operating Income
Total Assets
4,072,777
15822468
x 100
2007
2008
2009
2010
2011
0.27
0.24
0.12
0.22
0.15
4,229,481
15,665,050
3,541,711
13,748,109
2,046,013
20,685,523
5,242,539
27,138,278
4,011,455
26,834,618
Operating return on assets

0.30
0.25
0.20
0.15
Operating return on
assets
0.10
0.05
0.00
2007
2008
2009
2010
2011
Interpretation:
This ratio tells us in a more descriptive way that how much assets have been used to
generate the profit from its operations rather than other income. It is lower in FY 2009 and
FY 2011 due to less operating income leading to misuse or inefficient use of assets.
50
Profitability Ratios (with reference to Sales):

1. Gross profit margin:
Formula =
Gross Profit
Margin
Gross Profit
Net Sales
x 100
2007
2008
2009
2010
2011
11.37%
9.29%
6.14%
7.84%
6.63%
4,440,594
39,061,226
3,848,487
41,423,843
2,324,186
37,864,604
4,710,833
60,093,139
4,089,135
61,702,677
Gross Profit Margin

12.00
10.00
8.00
6.00
Gross Profit Margin
4.00
2.00
0.00
2007
2008
2009
2010
2011
Interpretation:
The gross profit margin tells us the percentage of income left after accounting for the cost
of goods sold. The trend is falling in a time series; it tried to recover in FY 2010. It can be
the cause of economic conditions and inflation in Pakistan.
51
2. Net profit margin:
Formula =
Net Profit Margin

Net Profit
Net Sales
2007
7.03
2,745,701
39,061,226
x 100
2008
5.53
2,290,845
41,423,843
2009
3.66
1,385,102
37,864,604
2010
5.73
3,443,403
60,093,139
2011
4.45
2,743,384
61,702,677
Net Profit Margin

8.00
7.00
6.00
5.00
4.00
Net Profit Margin
3.00
2.00
1.00
0.00
2007
2008
2009
2010
2011
Interpretation:
The net profit margin tells us that how much income has been earned in a percentage after
deducting the direct and indirect expenses or how much net revenue has been generated
from Rs. 1 of sales. The trend is falling in a time series; it tried to recover in FY 2010. It can
be the cause of economic conditions and inflation in Pakistan.
52
3. Pre-tax margin:
Formula =
Pre-tax Margin
Earning before
tax
Net Sales
x 100
2007
10.83%
2008
8.55%
2009
5.40%
2010
8.72%
2011
6.50%
4,229,481
3,541,711
2,046,013
5,242,539
4,011,455
39,061,226
41,423,843
37,864,604
60,093,139
61,702,677
Pre-tax Margin
12.00
10.00
8.00
6.00
Pre-tax Margin
4.00
2.00
0.00
2007
2008
2009
2010
2011
Interpretation:
This percentage ratio tells us that how much income have been earned from Rs. 1 of sales
without deducting the tax expenses. The trend is falling in a time series; it tried to recover
in FY 2010. It can be the cause of economic conditions and inflation in Pakistan. It goes to
8.72% in FY 2010 but decreased to 6.50% in FY 2011 which also shows that the either the
expenses has increased or the rupee has been depreciated.
53
Appendix
54
1. Financial Year 2005 2006

a) Balance Sheet:
55
b) Profit and Loss:
56
c) Cash Flow Statement:
57

a) Balance Sheet:
58
b) Profit and Loss:
59
60

a) Balance Sheet:
61
b) Profit and Loss:
62
63
4. Financial Year 2008 2009:

a) Balance Sheet:
64
b) Profit and Loss:
65
66

a) Balance Sheet:
67
b) Profit and Loss:
68
69

a) Balance Sheet:
70
b) Profit and Loss:
71
72
References:
Indus Motor Company Limited Annual Report 2006

www.toyota-indus.com
73

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Indus Motor Company

Analysis of Financial Statement

Air University, Islamabad

National Tax Number:

Status of the Company:

Details of Permissible Business Activities:

Soneri Bank Limited

Vision and Mission Statements:

Toyota Motor Corporation

Toyota Tsusho Corporation

Technology & KD Parts

Materials, Parts & Logistics Support

Hilux Frame & Deck

World class production quality

Bringing Toyota Quality to Pakistan

Optimizing cost by Kaizen

Respecting our people

Supporting equal employment opportunities, diversity and inclusions without

Becoming a Good Corporate Citizen

Listing on stock exchanges:

Financial Statement Analysis:

Profit and Loss Account

Profit and Loss Account:

Vertical Analysis (Profit and Loss Account):

Horizontal Analysis (Profit and Loss Account):

Liabilities and Equity

Issued, subscribed and

Vertical Analysis (Balance Sheet):

Liabilities and Equity

Issued, subscribed and

Horizontal Analysis (Balance Sheet):

Liabilities and Equity

Issued, subscribed and

Cash Flow Statement

Cash Flow Statement:

Cash flow from operating activities

Vertical Analysis (Cash Flow Statement):

Cash flow from operating activities

Horizontal Analysis (Cash Flow Statement):

Cash flow from operating activities

Profitability ratios (with reference to investment)

Profitability ratios (with reference to sales)

Inventory turnover ratio

2. Average of inventory on hand:

Avg of inventory on hand

Avg of inventory on hand

3. Debtor turnover ratio:

Debtor turnover ratio

Debtor turnover ratio

4. Average collection period:

Avg collection period

Avg collection period

Avg collection period

5. Creditor Turnover Ratio:

Creditor turnover ratio

Creditor turnover ratio

6. Average Payment Period:

Average payment period

7. Fixed Assets Turnover Ratio:

Fixed Asset Turnover Ratio

8. Total Asset Turnover Ratio:

Total Asset Turnover Ratio

Total Asset Turnover

4. Cash Conversion Cycle: