BALANCE SHEET

As At December 31, 2010

	NOTE	2010 (RUPEES IN *000)	2009 (RUPEES IN *000)
ASSETS
NON-CURRENT ASSETS
FIXED ASSETS	3	3324333	3934473
LOGN TERM LOANS ANS ADVANCES	4	15570	28509
LONG TERM DEPOSITS	5	7122	7222
		3347025	3970204
CURRENT ASSETS
STORES AND SPARES	6	111567	128483
STOCK IN TRADE	7	5198367	4088358
TRADE DEBTS	8	1613247	1736631
LOANS AND ADVANCES	9	839819	894459
SHORT TERM PREPAYMENTS	10	18778	16876
ACCRUED RETURN ON BANK DEPOSITS		57254	50944
OTHER RECEIVEABLES	11	196241	67902
CASH AND BANK BALANCES	12	15755980	9731166
		23791253	16715319
TOTAL ASSETS		27138278	20685523
EQUITY
SHARE CAPITAL AUTHORISED CAPITAL 100000000(2009:100000000)ORDINARY SHARES OF RS 10 EACH		1000000	1000000
ISSUED,SUBSCRIBED AND PAID-UP CAPITAL	13	786000	786000
RESERVES	14	11801615	9510973
		12587615	10296973
LIABILITIES
NON-CURRENT LIABILITIES
DEFFERED TAXATION	15	325797	503700
		325797	503700
CURRENT LIABILITIES
TRADE,OTHER PAYABLES AND PROVISIONS	16	5905062	3942988
ADVANCES FROM CUSTOMERS AND DEALERS	17	8076281	5926529
ACCRUED MARK-UP		944	673
SHORT-TERM RUNNING FINANCE	18	-	-
TAXATION-NET	19	242579	14660
		14224866	9884850
CONTINGENCIES AND COMMITMENTS	20
TOTAL EQUITY AND LIABILITIES		27138278	20685523

Topi:ratio analysisProfit and loss account

                                        For the year ended June 30, 2010

	NOTE	2010 (RUPEES IN *000)	2009 (RUPEES IN *000)
Net sales	21	60093139	37864604
Cost of sales	21	55382306	35540418
Gross profit		4710833	2324186
Distribution expenses	22	468496	469985
Administrative expenses	23	381575	352249
		850071	822234
		3860762	1501952
Other operating expenses	25	416106	156479
		3444656	1345473
Other operating income	26	1801459	727080
		5246115	2072553
Finance costs	27	3576	26540
Profit before taxation		5242539	2046013
Taxation	28	1799136	660911
Profit after taxation		3443403	1385102
Earning per share	29	43.81 rupees	17.62 rupees

,

Ø  . Current ratio

Ratios	Formulas	Results
Current ratio	Current Asset/Current liabilities
2009	16715319/9884850	1.69
2010	23791253/14224866	1.67

Comments.

It ratio tells us how much assets are available to meet the liabilities here we see current ratio in 2009 is 1.69 but in 2010 it is 1.67 this means company has not sufficient assets to meet liabilities.

Ø Quick  Ratio

Ratios	Formulas	Results
Quick ratio	Quick assets/Current liabilities
2009	12626461/9884850	1.27
2010	18592886/14224866	1.30

Comments.

This ratio tells us to how much liquids assets in the company to meet ant unconditional situation here in 2009 it is 1.27 but in 2010 it is 1.30 it is increasing this means the company can increasing quick assets to meet any unconditional situation.

Ø Gross profit ratio

Ratios	Formulas	Results
Gross profit ratio	Gross profit/sales*100
2009	2324186/37864604*100	6.138%
2010	4710833/60093139*100	7.83%

Comments.

The gross profit in 2009 is 6.138% while wee see in 2010 it has been increased. it is the good performance of the company its higher the ratio is in favour of the company for maximize the profit.reason is that because cost of goods sold is decreased

Ø Net  profit  ratio

Ratios	Formulas	Results
Net profit  ratio	Net profit  after tax/sales*100
2009	1385102/37864604*100	3.65%
2010	3443403/60093139*100	5.73%

Comments.Net profit is 3.65% in 2009 but it is increase in 2010 is 5.73% it is increase by in one year its better for the company to increase in net profit because higher ratio is in favour of company. reason is that because total expenses are decreas

Ø Net  profit  ratio

Ratios	Formulas	Results
Net profit  ratio	Net profit  before tax/sales*100
2009	2046013/37864604*100	5.40%
2010	5242539/60093139*100	8.72%

Ø Inventory turnover ratio

Ratios	Formulas	Results
Inventory turnover ratio	Cost of good sold/ average inventory
2009	35540418/1253021.5	28.36
2010	55382306/1195785	46.31

Comments.

Show the time, in which it will convert the current inventory in to sales, so 2010 is more beneficial for the company and favorable for the company.

Ø Average payment period

Ratios	Formulas	Results
Average payment period	Payments/purchases*365
2009	3942988/3597898*365	400 days
2010	5905062/4432441*365	486 days

Comments.

In 2010 the payment time for company is 486 days but in 2009 it was 2009 it is favourable for company reason is that because The number of days a company takes to pay off credit purchases.

Ø Fixed asset turnover

Ratios	Formulas	Results
Fixed asset turnover	Sales/fixed assets
2009	37864604/3934473	9.62
2010	60093139/3324333	18.07

Comments.

In 2009 the fixed assets turnover is 9.62 and in 2010 it is18.07.In 2009 fixed asset turnover ratio is decrease as compare to 2010 that shows Indus motors used his assets in 2010 effectively. Company used his fixed assets intensely that’s why his production level increases in every year.

Ø Asset turnover

Ratios	Formulas	Results
Total Asset turnover	sales/capital employed
2009	37864604/10800673	3.50times
2010	60093139/12913412	4.65times

Comments.

Ratio tells us how much time is requires to asset sale. In 2009 company asset turnover is 3.5 but in 2010 it is 4.65 it has been increasing so that it is not in favour of company.

Ø Debt ratio

Ratios	Formulas	Results
Debt ratio	(total assets-total  equity)/total assets
2009	10388550/20685523	0.502
2010	14550663/27138278	0.53

Comments.

Reason of increasing  debt ratio in 2010 is that the company is not using proper their funds properly they depends on their creditors.

Ø Average collection period

Ratios	Formulas	Results
Average collection period	receivable/ sales*365
2009	1804533/37864604*365	17.39days
2010	1809488/60093139*365	10.99days

Comments.

The average time period for which receivables are outstanding.Average collection period  is in 2010 is 10.99 days but in 2009 it was 17.39 days it is better for Indus motors because they have less time for collection period time.

Ø Earning per shares

Ratios	Formulas	Results
Earning per shares	PAT-perforance dividend/No.of ordinery share
2009	1385102-000/78600	17.62
2010	3443403-000/78600	43.81

Comments.

Earning per share in increased in 2010 is due to increased in net profit of company its for better performance of comapny

Ø Return on capital employed

Ratios	Formulas	Results
Return on capital employed	Profit before interest tax/Capital employed*100
2009	2046013/10800673*100	18.94%
2010	5242539/12913412*100	40.59%

Comments.

A measure of the returns that a company is realizing from its capital.this ratio tell us the investment of company in 2009 ROCE is 18.94% but in  2010 it is 40.59% it is increasing this means it is favorable for company because the high rate if ROCE is beneficial for company The resulting ratio represents the efficiency with which capital is being utilized to generate revenue..

Ø Time interest earned

Ratios	Formulas	Results
Time interest earned	PBIT/interest
2009	2046013/26540	77.09
2010	5242539/3576	1466.03

Comments.

A measure of the creditworthiness of a company, equal to EBIT divided by interestTime interest earned in 2010 is 1466.03 nd in 2009 it is 77.09. This ratio is increase in 2010 as compare to 2009 that show company’s EBIT is increased. it indicates that company is  able to meet his interest cost for long period of time. Time interest ratio is very good for company satiability

.

Ø Return on  total assets

Ratios	Formulas	Results
Return on  Total Assets	Net Income / Total Assets*100
2009	1385102/20685523*100	66.9%
2010	3443403/27138278*100	12.68%

Comments.

Return on asset in 2010 is 12.68%and in 2009 it is 66.9%.the return on assets in 2010 is increase as compare to 2009. It means that Indus motors basic earning power is increased in 2010.

Ø  Return on Equity (ROE)

Ratios	Formulas	Results
Return on Equity (ROE)	Net Income / capital employed*100
2009	1385102/10800673*100	12.8%
2010	3443403/129134128*100	26.6%

Comments.

Return on equity in 2010 is 12.8%but in 2009 it was 12.8%. it means that it is increase  This is a good sing for Indus motors if its return on equity remain positive than many shareholder will  invest money in the Indus motors.  

Ø Net Working Capital Ratio

Ratios	Formulas	Results
Net Working Capital	Current Assets - Current Liabilities
2009	16715319-9884850	6830469 Rs
2010	23791253-14224	9566387 Rs

Comments.

Indicates if a firm has enough short-term assets to cover its immediate liabilities in which we 2010 is better as 2009 because in 2010 it has more short term liquid assets to convert it

Ø Working Capital turnover

Ratios	Formulas	Results
	Sales/working capital
2009	37864604/6830469	5.54
2010	60093139/9566387	6.28

Comments.What this ratio tries to highlight is how effectively working capital is being used in terms of the turnover in 2010 is high from 2009 wee see that in 2010 it is effective as compare to 2009 in 2010 is effective used.

Ø Debt to Assets Ratio

Ratios	Formulas	Results
Debt to Assets Ratio	Total Liabilities / Total Assets
2009	10388550/20685523	0.502
2010	14550663/27138278	0.536

Comments

The debt to total assets ratio is an indicator of financial leverage. It tells you the percentage of total assets that were financed by creditors, liabilities, debt. It is higher in 2010 from 2009

Ø Return on investment

Ratios	Formulas	Results
Return on investment	Net profit after tax/ capital employed*100
2009	1385102/10800673*100	12.82%
2010	3443403/12913412*100	26.66%

Comments

Return on investment ratio is used by financial analysts to ascertain the best investment plans. It is also an important tool used by investors and shareholders, while making investment decisions in which we see in 2010 is 26.66% is favorable for the company than 2009

Ø Debt  to equity ratio

Ratios	Formulas	Results
Debt  to asset ratio	Total debts/ Total equity
2009	10388550/10296973	1.00
2010	14550663/12587615	1.15

Comments

Higher debts means higher financial risk involve. so in Indus industry 2010 is more risky than 2009 so it not favorable for the company.

Ø  Absolute liquid ratio:

Ratios	Formulas	Results
Absolute liquid ratio	Absolute liquid assets/current liabilities
2009	9731166/9884850	0.98times
2010	15755980/14224866	1.107times

Comments

Liquid ratio 2010 is 1.107 which is more liquid than 2009 which is 0.98 which is favorable. because cash and bank balances are more liquidate in 2010

Ø Financial leverage

Ratios	Formulas	Results
	Total assets/total equity
2009	20685523/10296973	2
2010	27138278/12587615	2.15

Comments

The financial leverage ratio is a measure of how much assets a company holds relative to its equity. A high financial leverage ratio 2010 means that the company is using debt and other liabilities to finance its assets -- and, every thing else being equal is more risky than a company with lower leverage. in 2009

Ø Dupont analysis

                      

                    ROA   X      financial leverage

(2009)                  0.0669   x              2                       =1.338

(2010)                0.1268    x               2.15                 =0.2726

                           

                              Net profit/sales              x              sales/total assets                  x         total assets/equity                                             

(2009)              1385102/37864604        x              37864604/20685523         x        20685523/10296973                                         

                                       0.036                      x                         1.83                            x                       2.00

                                                                                           0.1317

(2010)               3443403/60093139      x               60093139/27138278         x       27138278/12587615

                                      0.057                      x                        2.214                             x                   2.15

                                                                                           0.27

                             

                                                                              

                                                                                Project

INDUS MOTOR COMPANY LIMITED

Financial reporting