Internship Report

Pak Suzuki Motor Company Limited

A REPORT SUBMITTED TO THE DEPARTMENT OF MANAGEMENT SCIENCES,

VIRTUAL UNIVERSITY OF PAKISTAN IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTERS IN BUSINESS
ADMINISTRATION

Submitted by ID: MC180203763 NAME: Hassan Bilal Session:

2018 2020 Submission Date: 25 07 2020

Departement of Management Sciences

Virtual University of Pakistan.
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ACKNOWLEDGMENT

In the name of Allah, Most Gracious, Most Merciful

Praise be to Allah, the Cherisher and Sustainer of the worlds; Most

Gracious, Most Merciful;
Master of the Day of Judgment.
Thee do we worship, and Thine aid we seek.
The way of those on whom Thou hast bestowed Thy Grace, those
whose (portion) is not wrath, and who go not astray.
Ameen

I am heartily thankful to our Internship report Instructor, whose

encouragement, guidance and support from initial to the final level enabled
us to develop the Internship report. With his dedicated lectures we were
able to practically understand and apply what we have learned in the
classes.
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EXECUTIVE SUMMARY

This project is about the strategic Analysis of Pak Suzuki Motor Company.
During the project, I’ve done the detailed study of Pak Suzuki Motor
Company Limited like their company profile, mission, vision and corporate
values. Then I observer the some of the major products manufactured and
assembled by the Pak Suzuki Motor Company limited which include
SWIFT, LIANA, CULTUS, MEHRAN, APV etc... With the help of Internal
and External analysis, I’ve sorted out some of their strengths, weaknesses
and the opportunities and threats prevailing in the market. Also the PEST
analysis was conducted to observe the external factors that may influence
the performance of the company.

With the study of Pak Suzuki Motor Company Limited, I’ve learned that
they are doing well in the Pakistani market and are leading market
shareholder. They are producing Cars at affordable prices for the low
income to middle income people. But they are unable to compete with
Corolla and Honda in Luxury and semi-luxury cars. They need product
development strategy to follow so they tried to get into the Honda and
Corolla market by introducing Suzuki LIANA but that couldn’t make its
space. Now they have again tried that by launching Suzuki SWIFT which is
a 1300cc fully loaded car. I recommend Product Development strategy for
PSMC to pursue in order to compete with HONDA and TOYOTA. Then
they will be able to grow their market share and growth.
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TABLE OF CONTENTS

Sr. no. Contents Page #

1 Introduction 5

2 Product Mix 7

3 Internal and External Analysis 10

4 SWOT Analysis 10

5 PEST Analysis 12

6 SWOT or TOWS Analysis 15

7 Ratio Analysis. 18

15 Recommendations 17

16 Conclusion 20
17 References 20
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INTRODUCTION AND OVERVIEW OF THE

ORGANIZATION.

Pak Suzuki Motors Company Ltd. is a company assembling and distributing Suzuki Japan's cars in
Pakistan. Currently they are one of the most successful motor companies in Pakistan.

The firm was founded in 1983 as a joint venture between PAK and Suzuki, formalizing the
arrangement by which AWAMI Auto Ltd. had produced the Suzuki SS80 from 1982. Suzuki
originally owned 25% of the stock, and has gradually increased their holding; they now own 73.09%.
The company now assembles a wide range of Suzuki vehicles and aims to produce 150,000 vehicles
per year. (2005 production was 100,000)
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| Statement of Ethics and Business Practices

Here are the code of ethics and Business Practice of Pak Suzuki Motors Company,

1. Pak Suzuki insists on integrity and honesty of its employees in doing business. Any unfair or
corrupt practices to solicit business is fundamentally inconsistent with business codes of company
2. Pak Suzuki believes in compliance to regulatory obligation

3. Pak Suzuki believes in free and fair business practices and open competitive markets. Developing
any association with competitors to distort the pricing and supply of products is contradictory to
company’s business code of conduct.

4. Pak Suzuki believes in transparency in business transaction and they are to be recorded accurately
and fairly in books of accounts in accordance with standard procedure.

5. Pak Suzuki expects its employees to act in company’s best interest while holding confidential
information. Company expects its employees neither to solicit internal information from other nor to
disclose company’s data or any other material information to any un- authorized person/body.

6. Pak Suzuki believes in individual’s respects and growth. Its employment policies do not
discriminate on basis of race, religion, gender or any other factor.
7. Pak Suzuki does not believe in political affiliation.

| Corporate Strategy

Pak Suzuki is built on the idea of a responsible corporate citizenship thereby managing environmental,
safety & occupational health matters as an integral part of our business. In fulfilling this responsibility
Pak Suzuki adheres to the following principles:

1) We are committed to provide top quality products to the satisfaction and requirement of our
customers.

2) We conduct our operations in compliance with applicable environmental, occupational

health & safety laws and regulations.

3) We recognize the interrelationship between energy and the environment, and we promote the
efficient use of energy throughout our system.
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4) We ensure safe disposal of waste generated from our facility

5) We minimize the discharge of waste materials into the environment by utilizing responsible
pollution control practices.
6) We will continuously seek opportunities to improve our adherence to these principles.

As it is clearly mentioned in their Vision Statement that to be excellent all around, and they always
operate in Environment friendly. And their Product will always be the environment friendly.

With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it
becomes all the more important to benchmark a company’s financial indicators on a worldwide basis.
World stock markets have recently witnessed a return to fundamental financial analysis. Sound
management as opposed to hype will in the long run generate shareholder value.

PRODUCT MIX

Following are some varieties of Cars with their and Prices:

| SWIFT (1300cc)

Price: Rs. 1,049,000/-

The European inspired exterior gives Swift a

distinctive look. A unique stylish and design
that turns a head where you go. The spirited
engine makes for exhilarating drive and gives
you ultimate freedom where the road takes you.
colors: Pearl Red, Graphite Grey, Solid white,
Indigo, Silky Silver, Aqua Blue, Eminent Blue

| LIANA (1300 & 1600 cc)

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Price: Rs. 1,230,000/-

The Suzuki Liana available in 1300 cc manual

transmission and 1600cc automatic
transmission takes you out of ordinary and into
the realm. Liana is entirely different car, its
style, dimension and comfort will inspire you to
see every day as an open door to a new age.
Colors: Pearl Red, Graphite Grey, Solid white,
Indigo, Silky Silver, Aqua Blue, Eminent Blue

| CULTUS (1000cc)

Price: Rs. 897,000/-

CULTUS is the blend of space and craft.

Its trim body Conceals ample space &
flexibility for both passenger and storage.
CULTUS ensures everyone, exceptional Value
and quality.
Colors: Pearl Red, Graphite Grey, Solid white,
Indigo, Silky Silver, Aqua Blue, Eminent Blue

| ALTO (1000cc)

Price: Rs. 662,000/-

Alto has a bright, roomy and comfortable

cabin which keeps body relax and strong and
lighter body shell resulting in smooth drive
due to reduction of unpleasant noise
harshness and vibration. Its small turning
radius and compact body make parking a
breeze.
Colors: Olive Green, Pearl Red, Graphite
Grey, Solid white, Indigo, Silky Silver, Aqua
Blue, Eminent Blue

| MEHRAN (800cc)
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Price: Rs. 514,000/-

Unrivalled in its class, MEHRAN is

Pakistan’s largest selling car. More smart
features like head turning lamp, matching
front grill and a two spoke steering wheel
gives it the tidy look. Functional economy,
peak performance or unmatched fuel
efficiency, MEHRAN VXR is the leader.
Colors: Pearl Red, Graphite Grey, Solid
white, Silky Silver, Eminent Blue

| APV (1500cc)

Price: Rs. 1,775,000/-

APV 1500 cc (Imported) The New APV

gives you everything you ever wanted in
your vehicle. Spacious interior for comfort,
tough engine to carry large loads and plenty
of room for passengers to enjoy a
comfortable day long ride.
Colors: Pearl Red, Graphite Grey, Solid
white, Indigo, Silky Silver, Aqua Blue,
Eminent Blue

| JIMNY (1300cc)

Price: Rs. 1,850,000/-

JIMNY 4X4 JEEP 1300cc (Imported) Steady,

sturdy and smart, Suzuki JIMNY with new
wide tread brings you the ultimate pleasure of
a real 4-wheel drive. It has got all the
sporting spirit to go along for adventurous
free souls.

Colors: Solid white, Silky Silver

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EXTERNAL & INTERNAL ANALYSIS

| SWOT Analysis

Strengths:

❖ Highest Market Share The Company has a highest market share as the company has targeted the
middle range people in the country. Overall the prices of the cars are not very high when compared to
Honda Atlas and Toyota Indus. So this is one of the key benefits adopting by the Suzuki Company to
have low price vehicles.
❖ The cars are totally assembled in the country and no parts are assembled outside the country.
This is having a greater advantage over the competitors. Meanwhile the costs of the parts of the car
are not very expensive and are easily available in Pakistan.
❖ The Distribution channels of the company are also very located all over the country. The
company is progressing by leaps and bounds as there is greater market segmented that is targeted by
the company. The product of the company is also very innovative and is having a deep product line
all over the country. The supply chain of the Pak Suzuki Company is also highly maintained and the
estimations are also very accurate.
❖ The staff members of the Pak Suzuki Company are also very motivating, well managed and
highly skilled persons. The staff members are very keen to put their efforts towards the betterment of
the Pak Suzuki.
❖ The major benefit of the company is that its spare parts are easily available all across the
country. The cost of these spare parts is also very economic. The person can easily overhaul the car
anywhere in the country due to easy availability of the spare parts.
❖ The structure of the company also plays a vital role over the success of the company. The
structure is totally bureaucratic in nature and well managed. So overall the company has a vital range
of positive points and due to which the cars are competing in the marked over other brands like
Toyota Indus and Honda Atlas.
Weakness:

❖ Scarcity of raw material If we talk about the weakenesses of the company over other companies.
One of the greatest weakenesses of the company is that it has a very high demand due to targeting the
low or middle income people. So there is scarcity of the raw material in the country due to its greater
demand. This is the greatest weakeness f the Pak Suzuki company.
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❖ The other greatest weakeness is that the company does not focus on the design and structure
of the car. It means the models are reinvented again and again with only minor change. It
predicts the fact that company has very less investment in Research and its development
wing.
❖ Also the coordination between the governmental and semi governmental supporting bodies
is very less. The company is owned by the governmental bodies but it seems that there is a
lack of coordination between these departments.
❖ As the company has a highest demand in the country yet it has less technical training
institutes across the country. It means that Pak Suzuki has lack of interest over these
technical training institutes as compared to its competitors like Honda Atlas and Toyota
Indus motors.
❖ Pak Suzuki has also less number of distribution channels over sub urban areas it means that
the company is only focusing in the cities rather than in sub urban areas which is also one of
the huge markets.
Opportunities:

❖ Pak Suzuki has number of opportunities over its competiotor. One of the greatest
opportunity for Pak Suzuki is that the company has a very high sales demand across the
country and customers have to wait for their orders. This opportunity can easily be cashed by
the company.
❖ The larger market size has also one of the greatest opportunities of the company to operate
within the country. If the demands of the cars will be fulfilled then this opportunity will also
be cashed form this end.
❖ Pak Suzuki has another opportunity of having efficient EFI engines. This has also one the
greatest opportunity for the company to be cashed over it. The company has a global spare
part market. It means that its parts can be sold in any market in the country.
❖ Although the company does not work on the structure and design of the cars but the
company has the advantage of having a space saving small size CNG cylinders. It means this
will save the space and will be economical as CNG point of view.
❖ If company will work on its design and structure then it will again give competitive
advantage over the competitors and also the demand will be increased.
Threats:

❖ Pak Suzuki is focusing on the low middle income people. It means the company has very
less focus on its design and structure. Due to these reasons the companies like Toyota and
Honda Atlas gives tough time to Pak Suzuki.
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❖ Meanwhile the company has spent a very few investment over its Research and
development wing due to which the Company is less attractive over foreign market.
Therefore the company has less foreign investment and has less setup production facilities
abroad.

❖ However there is a greatest threat for the company that its parts are smuggled inside and
outside the country which have adverse impact on the progress of the company.

❖ The government has imposed recently heavy taxes on the automobiles industry due to
which Pak Suzuki is also affected by it. Heavy taxes increased the price of the car and now
the price will touch the skies over its recent period.

❖ Inflation has also badly impacted the Pak Suzuki Company over its competitors. The prices
of the low cost cars have also increased which is nearly equal to the mid-range cars of the
competitors. This has created a bad impact over the progress of the company.

| PEST Analysis

Uncontrollable environment are those external factors which can create hurdles between us and our
business. It is also called pest analysis, which is as follow:
^Political Environment

Investor needs political stability in the country. The countries that are political stable have the highest
level of investment there as the main focus is to work in the stable working environment. The political
factors in Pakistan are different with recent years. The people all over the world are not very keen to
do investment from all over the world. Political factors influence the tax rates and also the labor
regulations working in that condition. Due to recent COVID 19 the system has disturbed and
investment has been locked in the country. People from all over the world are hesitant to do
investment in that pandemic.
^Legal Environment

As all countries, Pakistan also has some legislation about each sector. But like developing countries it
is hardly being imposed by authorities. The corruption, smuggling and black marketing have been
supported by Government related officials. The undue favor is given to those business men who have
been politically affiliated and hardly any legal suite is carried on against them. Such unethical
activities destroy all law and legislation.
^Economic Environment

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political
disputes and external ongoing conflict with India. However, IMF approved the
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government policies, encourages by different foreign assistance and renewed access to global market
since 2001.
By following these policies government succeed to reverse the situation of economy during last five
years.
^Socio-Culture Environment
Social factors also play an important role in the success and development of the company. If we
discuss the social trends that also changes with the change in the environment. But with the passage of
time it is going to change. People thoughts, choices, taste and style has been totally changed. At this
spot of time people need the transportation that is good and healthy for the life and it must be
affordable, means in the reach of the people. In Pakistan Mehran is in the reach of the people at
affordable prices as compared to Honda and Toyota.
^Technological Environment
Technology plays a vital role in success of the company. Technology is increasing with the lapse of
time. People now a days gives great importance to the technology of the product. Technological
factors are having a greater importance. For example every six months the technology is improving
very abruptly. Due to this dynamic environment technology plays a very important role. Also the
product life cycle has also been decreased due to this technological change.

OPPROTUNITIES AND TREATS.

Results from Opportunities and threats.

1. The production of the cars of Pak Suzuki is maximum over the competitors. It means that company
is moving far beyond over its competiors.2. Pak Suzuki has introduced new EFI engine in its CULTUS
model which is a 1000cc car. The EFI engine technology is never introduced before in below 1300cc
cars.
3. The dealer network of Pak Suzuki is almost all around the country which help them to maximize
their sales and reach in every corner of the country.
4. In new CNG fitted cars, the Suzuki is introducing new compact CNG cylinders which take less
space and are lighter than their equivalent available in the market.
5. The major threat Suzuki Company could have is from Toyota and Honda, as Suzuki is still unable
to meet them in 1300cc and above category of cars. The new product SWIFT is not giving the respond
which was expected.

SWOT ANALYSIS.
Analysis from Strength, Weaknesses’ and Opportunities and threats.
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1. The Pak Suzuki Motor Company has large market share herein and also the largest producers of
Cars which is a major strength.
2. Company prices are very affordable in the same quality that is another major strength.
3. The large distribution channel is another major strength which helps them to achieve their desired
sales targets.
4. The innovation is another key strength of Pak Suzuki and the example is new Suzuki SWIFT.
5. The spare parts availability is a critical issue which cars, Suzuki has comparative advantage in
spare parts availability as most of them are being manufactured in Pakistan.
7. They should also focus on sub-urban areas like Southern Punjab and Interior Sind which their
distribution network.
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SWOT MATRIX

| Recommendations for the Pak Suzuki Company.

1. Maximize market share by producing more cars per year

2. Develop more efficient and innovative engines which give comparative advantage
3. Use efficient CNG system
4. Focus on looks and design of exterior to compete with Honda and Toyota
5. Fund and establish technical institutes to gain more skilled workforce from local market
6. Maintain quality in affordable price will help to compete with direct competitors and used
imported cars
7. Develop fuel efficient engines to gain edge and eliminate threat of fuel prices increase
8. Enhance distribution to avoid threat from second hand imported cars
IMPORTANT RECOMMENDATIONS FROM STRATEGIC POINT OF
VIEW.

Product Development: the strategy adopted by the Pak Suzuki Company is

product development. We recommend the company at this stage to focuses
on having the greatest level of product performance, the highest level of
functionality or functions and features, the upgraded technology or the
upgraded level of product innovation.

This strategy could have some risk for the company as innovative products
are involved but proper research and development will cater the risk and
company can pursue with the strategy to be the market leaders and get on
top.

One major setback to PSMC was in the shape of Suzuki LIANA, which was
not able to meet the expectations and couldn’t hold the market it was made
for.

But company didn’t stop its journey there, and now Suzuki SWIFT has
recently been launched in the market, which seems to be an attractive offer
for the market in the 1300cc class. But still company has nothing to
compete with HONDA and TOYOTA. The Suzuki needs to enter into the
1600cc and 1800cc market to expand its market share and market growth.
But for that purpose they need to
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put more efforts of product development as the new product must have all
the required features and technology that is needed to compete with giant
competitors. And of course, PSMC has competitive advantage in local
assembling and manufacturing of parts and they can utilize that advantage
to produce cheaper cars in the categories mentioned above.
The PSMC has recently received acknowledgement from Prime Minister of
Pakistan for being the only car manufacturers for the lower and middle
income people of Pakistan. But they should also need to get into the line of
HONDA and TOYOTA, to achieve that target they need to develop more
technologically cheap and efficient and quality oriented products.

RATIO ANALYSIS.

For Ratio analysis we are taking three companies Pak Suzuki motors Ltd, Toyota Indus motors and
Honda Atlas. We will take the results of the three recent years of these companies and then will
compare the results. First we will take the financial results of Pak Suzuki company, then Toyota
Indus, afterwards Honda Atlas results will be made and compared.

PAK SUZUKI MOTORS LTD.

Activity Ratios:

Activity Ratios measure the firm’s ability to convert different account within their balance sheets into
cash or sales.

1. ACCOUNT RECEIVABLE TURNOVER

Significance of Account Receivable turnover: This ratio is used to quantify a firm's effectiveness in
extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio,
measuring how efficiently a firm uses its assets.
Formula: Account Receivable turnover = Annual net credit sales/Average
account receivables.

2019
2018
Pak Suzuki Ltd. 14,409,566 /237538=60 14,507,762 /401,020=36
Times times
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Toyota Indus 15,731,241 15,950,203/

/1,453,670=10.18 2,547,915=6.2601
Times Times

Honda Atlas

TOTAL ASSET TURNOVER RATIO

Account Recievable turnover

□ Pak Suzuki
□ Toyota Indus
□ Honda Atlas

2018 2019 2020

Year

Total assets turnover ratio tells us about that how efficiently an asset is used to generate the sales.
How efficiently management is using assets at its disposal to generate the sales value.
Formula: Net Sales or Revenue/ total assets.

June 2018 (Quarter ended) June 2019 (Quarter ended)

Pak Suzuki Ltd. 30,880,756/61,509,849=0.502 31,039,879/58,450,219=0.53

Toyota Indus motors 139,715,429/7,383,936=18.921 157,996,212/

13,925,068=11.346

Interpretations: Toyota company is utilizing its assets more efficiently as compared to the Pak
Suzuki motors company. So the assets utilization strategy of Toyota company is far better than that of
Pak Suzuki motors as the financial ratios clearly depicts that situation.
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FIXED ASSETS TURNOVER RATIO

Fixed assets turnover ratio tells us how efficiently a company is using its fixed assets to generate it
sales. This ratio helps to find out the company performance about efficiently utilizing its fixed assets.
The formula for finding out the fixed assets ratio is
Formula: Net Sales / Fixed Assets (Property, Plant and equipment)

2019
2018
Pak Suzuki Ltd. 62,391,543/15,654,887=3.99 65,429,412/16,353,514=4.00

Toyota Indus Motors. 139,715,429 157,996,212/

/7,224,839=19.33 13,804,509=11.44

Interpretations:

The Fixed assets turnover ratio of Toyota Indus is again far more better in 2019 and 2018 than the Pak
Suzuki motors. It reveals that Toyota is managing its fixed assets far better than that of Pak Suzuki
Ltd co.

INVENTORY TURNOVER RATIO

Inventory Turnover ratio tells us that how many times a company has replaced or sold its
inventory over the period of time.
Formula for calculating Inventory turnover Ratio:

Cost of goods sold/ Average inventory.

Companie 2018 2019

s

Pak 58,026,114/(29,397,056+146,878)=1.9 64,057,042/(25,097,127+214,681)=2.5

suzuki 64 30
motors
Ltd.

Toyota 115,830,771/(11,150,736+301,254)= 138,504,838/(13,560,393+544,005)=9.

Indus 10.11 81
Inventory turnover:
motors.
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Inventory turnover ratio of Pak Suzuki Company is far better than that of Toyota Company as it is in
the range of the middle income source person. It means that Suzuki is selling more than that of Toyota
due to its low prices. It shows that middle income person like more Suzuki and the selling inventory
of that car is much more than that of Toyota Company.

CURRENT RATIO

a) Current Ratio:

Current Ratio = Current Assets / Current Liabilities

b) Calculations.

Companie 2017 2018 2019

s

Pak 41,006,087/21,360,75 43,681,834/32,276,98 37,728,581/30,473,6

Suzuki 1 4 6

=1.92 =1.35 4=1.23

Toyota 57,441,499/ 74,543,128/ 50,857,994/ 24,178,833

Indus 32,678,828=1.75 45,160,011=1.65 =2.10

Industry 3 3 3
Average.

Current Ratio

3
2.
5
2
Ratios 1.5
□ Pak Suzuki
1 0.5 0 □ Toyota Indus
□ Industry
Average
2017 2018 2019
years

Working of Current assets and Current Liabilities. Figures taken from Financial
reports.

Interpretations: Although both companies show the good current ratios. The Industry
average of these companies suggests it should be 3:1 is the ideal stage in automobile
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company. Pak Suzuki is performing far better than the Toyota Indus although Toyota Indus Current
Ratios are not too bad.

WORKING CAPITAL
Working Capital:

Working Capital = Current Assets - Current Liabilities.

b) Calculations
Companie 2017 2018 2019
s

Pak 41,006,087- 43,681,834- 37,728,581-

Suzuki 21,360,751=1964533 32,276,984=1140485 30,473,664=7,25,491
6 0 7

Toyota 57,441,499-- 74,543,128-- 50,857,994-24,178,833 =

Indus 32,678,828= 45,160,011= 26679161
24762671 29383117

industry
Average. Working Capital

30000000 25000000
20000000 Working Capital
15000000 10000000
5000000 0 □ Pak Suzuki
□ Toyota
Indus

2017 2018 2019

Years

c) Working of Current assets and Current liabilities. Figures are taken from financial
statements.
e) Interpretations. Working Capital suggests the amount of capital for running the day to day
expenses of the company. Toyota indus has trapped a lot amount of capital in
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working capital which tide the investment into the working capital as compared to Pak Suzuki

TIMES INTEREST EARNED

Times Interest Earned:

Times interest Earned = income before interest and tax / Total interest Expense. b) Calculations

Companies 2017 2019

2018
Pak Suzuki -2125,877/706,422
568,730,2/68,088 =84 21,405,25/92,864 =23
=0
times times
Toyota Indus 189,75,929+
19,140,767+397,998/ 229,99,166+572,406/
67407/67407=282
397,998 = 49 times 572,406= 41 times times.

Industry
Average.

Times Interest Earned

300
1
250
times interest earned
ratio 200 □ Pak Suzuki
7
150
100 Z _ □ Toyota Indus
50 ' -P
0
2017 2018 2019
Number of years

c) Working of Income before Interest and Tax and Total Expense.

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e) Interpretations. This ratio tells us that how many times company can pay its interest by its
Profits earned. In 2017 Pak Suzuki has a greater tendency as compared to Toyota Indus but in
2019 Honda Indus has greater tendency to its interest over its profits.

DEBT RATIO

Debt Ratio:

Debt Ratio = Total liabilities / Total assets*100 b) Calculations

Compan 2017 2018 2019

ies

Pak 21,360,751/50,910,467 32,276,984/61,509,849 31,032,523/58,450,219

Suzuki *100= 42 % *100= 52% *100= 53%

Toyota 32,678,828/64,783,062 45,160,011/81,927,064 24,178,833/63,879,723

Indus *100= 50% *100= 55% *100 = 38%

Industry 40% 40% 40%

Average

Debt Ratio

□ Pak Suzuki
□ Toyota Indus
□ Industry
Averge
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c) Working of total liabilities and total assets

e) Interpretations: Debt ratio suggests how much debt you have taken in terms of total assets.
The debt that have been taken by Pak Suzuki and Toyota Indus is between 40 to 50 percent. It is
due to having more investment in different sectors of industry. This may return the profits for
the company. Beyond 40 percent is risky and may cause adverse impact for the company.

DEBT EQUITY RATIO

Debt Equity Ratio:

Debt equity Ratio = Total liabilities / Total shareholders’ Equity*100 b) Calculations

Companies 2017 2019

2018
Pak Suzuki 21360751/29549716 32276984/29232865 31032523/27417696

*100= 72.3% *100= 110% *100= 113%

Toyota Indus 24,178,833/ 45,160,011/

40,045,309*100= 36,744,342*100= 32,678,828/31,196,962

60% 123% *100= 105%

Industry 50% 50% 50%

Average.

Debt to equity ratio

140
120
100
Debt to equity ratio 80
□ Pak Suzuki
60
□ Toyota Indus
40
□ Industry Average
20
0
2017 2018 2019
Number of years
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c) Working of Total liabilities and Total shareholder’s Equity.

d) Column Chart

e) Interpretations: Debt to equity ratio suggests how much company has taken debt over its
equity. How much portion a company is taken loan over the portion of its equity? If it is more
than 50% then it will be risky and have adverse effects for the company. Toyota Indus and Pak
Suzuki both have taken loans for making profits from other portfolios.

NET PROFIT MARGIN

Net Profit Margin:

Net Profit Margin Ratio: Net profit / Total sales*100

b) Calculations

Companies 2017 2019

2018
Pak Suzuki
3825,821/101,811,611 12,98,108/119,853,898 15,25,357/65,429,412

*100= 3.8% *100= 1.1% *100= 2.33%

Toyota Indus 13,714,975/
13,001,265/112,271,656 15,771,860/140,207,524 157,996,212*100=

*100= 11.6% *100= 11.24% 8.7%

Industry 10% 10% 10%

Average.
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Net Profit Margin

12.00%
10.00%
8.00%
Net profit Margin Ratios
6.00% □ Pak Suzuki

4.00% □ Toyota Indus

□ Industry Average
2.00%
0.00%
2017 2018 2019
Number of years

c) Working of Net profit and Total Sales: Figures are given in the financial statements.

e) Interpretations. Net profit margin of Toyota company is far better than that of Pak Suzuki.
The reason is that Toyota Indus is more comfortable than that of Pak Suzuki and the design and
structure of Toyota Indus is far more better than low middle income people company that is
Pak Suzuki Co.

OPERATING PROFIT MARGINS

Operating Profit Margin:

Operating Profit Margin = Operating Profit / Sales *100 b) Calculations

Compa 2017 2018 2019

nies

Pak
Suzuki 568,730,2/101,811,611 21,405,25/119,853,898
2125,877/65,429,
*100 *100
412
=5.6% =1.79%
*100

= 3.3%
 Page | 27

Toyota 19,140,767+397,998/112, 229,99,166+572,406/140, 189,75,929+

Indus 271,656*100 207,524*100
67407/157,996,2
= 17% = 16.8% 12*100= 12.05%

Industr 10% 10% 10%

y

Averag
e.

c) Working of operating Profit and Sales

d) Column Chart

e) Interpretations
RETURN ON EQUITY
Return on Equity:

Return on equity = Net Income / Shareholders equity b)

Calculations
Companies 2017 2019
2018
Pak Suzuki 13% 4.4% 5.6%

Toyota Indus 15% 10% 12%

Industry Average. 20% 20% 20%

Return on equity

0.2

0.15 □ 3-D Column 1

Return on equity. 0.1
□ Pak Suzuki
□ Toyota indus
0.05 □ Industry Average

0 2017 2018 2019

Number of years

1
 Page | 28

c) Working of Net Income and Shareholders’ equity: Figures from Financial statements are
taken.
e) Interpretations: this ratio suggest how well managed its equity to generate its revenues. The
Toyota Indus performs well due to its luxury and comfortable seat and interior system.

ASSET TURNOVER RATIO

Asset Turnover Ratio:

Asset Turnover Ratio = Sales Revenue / Total (or net) Assets. b) Calculations

Compani 2017 Rs 2018 Rs 2019 Rs

es

Pak 101,811,611/50,910,46 7=119,853,898/61,509,84 9=65,429,412/58,450,21 9=

Suzuki 2 Rupees 2 Rupees 1.11 Rupees

Toyota 112,271,656/ 140,207,524/ 157,996,212/ 64,783,062

Indus 63,879,723 81,927,064 =

=1.76 Rupees = 1.711 Rupees 2.44 Rupees.

Industry 2.5 2.5 2.5

Average

Asset Turnover Ratio

y- / _
2.5
2

Asset Turnover ratio.

1.5 | □ Pak Suzuki
1 □ Toyota Indus
0.5 □ Industry Average

0
2017_L 2018 2019_L _
Number of years
 Page | 29

c) Working of Total Assets. Figures are given in the Financial Statements.

e) Interpretations: Asset turnover ratio suggest how efficiently a company is utilizing its assets
to generate the revenue. Here it is seen that in 2017 and 2018 Pak Suzuki is performing well in
terms of assets management whereas in 2019 Toyota Indus performed well.

CONCLUSION

The Company is endeavoring to improve sales, profitability and diversity in its operations by
upgrading the existing products and launching new products. Company launched the New Alto in
June 2019. New Alto harbors contemporary 660cc R-series engine, modern design, spacious interior
with great fuel efficiency and Japanese technology. New Alto received overwhelming response from
customers due to its distinguished features.
Macroeconomic indicators of the country are challenging for auto industry. Pak Rupee devaluation,
rising raw material prices, increase in interest rate and additional taxes and duties imposed through
Federal Budget are major challenges for auto industry. Variation in forex rates and import duties
influenced the pricing of products due to high element of imported components in total cost of
products. Your Company has geared up to meet the challenges in future with wide range of quality
products at competitive prices through an efficient network of authorized dealers.

REFERENCES

http://www .yaksuzuki.com.yk

httvs://www.tovota-indus.com/fmancial-results

http://www.we.com.pk htty://www .maxi-yedia.com

https://www.paksuzuki.com.pk/Upload/FinancialReports/Report_Fin

al
 Page | 31

“Real Strategic change requires inventing

new categories, not rearranging old ones.”
Said, Henry Mintzberg