Financial Management & Application
Final Project
Group Members
Muhammad Abubakr Zulfiqar
31361
Syed Husnain Bokhari
31661
Zeeshan Ahmad
31181
Haris Ahmad Butt
32540
Honda Atlas Cars (Pakistan) Limited

Company Introduction ;
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited
Japan, and the Atlas Group of Companies, Pakistan. The company is listed in Karachi, Lahore,
and Islamabad Stock Exchanges. On July 14, 1994, car bookings started at six dealerships in
Karachi, Lahore, and Islamabad. All dealerships are constructed in accordance with the standards
defined by Honda World over. The quality of local parts is thoroughly checked to meet stringent
international standards. It is the constant endeavor of Honda Atlas Cars (Pakistan) Limited to
achieve No .1 Customer satisfaction. Honda Atlas Cars (Pakistan) Limited is committed to meet
customer expectations and to provide good value for money. The Company currently has a
production capacity of over 1.5 million units per annum and continues to maintain its status as
market leader in terms of both volume and quality.

Financial Highlights:
1. Current Ratio
2022
2021
Current assets
59315464
36950368
Current Liability
45985174
23905843
Current ratio
1.2
1.5
 Interpretation:
The ratio tells about firm ability to meets its short term obligation. This ratio is 1.2 in
2022 and 1.5 in 2021 means that the firm easily repays all its modern Liabilities. The
ratio more than of means that company is able to fulfill their short term obligation or
current Liabilities by their current assets.
3. Return on equity:
2022
2021
Net profit
2509906
1793205
Shareholder equity
19960725
18196163
ROA
0.12
0.09
 Interpretation:
Atlas Honda cars has the return on equity ratio of 0.12 in 2022 and 0.09 in 2021. The
company has good return on equity financing. The ratio tell as earning power on
shareholder book value investment which is used in comparing two or more firms.
Debt-to-net-worth:
Debt-to-net-worth ratio (DTNW) = Total Debt/ Total Net worth
2022
2021
Total Debt
14402548
16453049
Total Net worth
15250834
17403256
DTNW
0.9
0.94
 Interpretation:
The debt to net worth ratio is used to gauge how much of a company's assets are financed by
debt. The higher the ratio, the higher the percentage financing by debt. A ratio above 100% is not
good as it means that the company cannot use its assets to pay off its debt. Therefore, the Honda
Atlas Debt to net worth ratio is not above 100%, The Company has 0.9 in 2022 and 0.94 in 2021
so it is good for company.
Return on Assets:
Return on Assets (ROA) = Profit after Taxation / Total assets x 100
2022
2021
Profit After Taxation
2509906
1793205
Total Assets
70263048
45155226
ROA
0.03
0.039
 Interpretation:
The return on total assets ratio is obtain by dividing a company's earnings after tax by its
total assets. This profitability indicator helps you determine how your company generates
its earnings and how you compare to your competitors. The Honda Atlas has Return on
Asset ratio is 0.03 in 2022 and 0.39 in 2021 so it is good for the company
Risk Free rate interpretation

When the β = 1 the systematic risk affects the stock returns as much as it affects the
market

When the β = 0 the systematic risk does not affect the stock returns but affects the market

When the β < 1 the systematic risk affects the stock returns but less than how much it
affects the market

When the β > 1 the systematic risk affects the stock returns but more than how much it
affects the market.
The approximate Beta is 0.147560547 the systematic risk affects the stock returns but less than
how much it affects the market
A higher systematic risk will be associated with certain investments because they will be more
liable to market factors than others. Keep in mind that portfolio risk is totally systematic for
investors with well-diversified stocks. Diversity has reduced systemic risk. These investors
might be interested in estimating the systematic risk associated with each individual investment
in their portfolio or with a potential new investment that they might add to the portfolio. Both
systematic and unsystematic risk can effect a single investment, but if an investor has a welldiversified portfolio, only the systematic risk of that investment would be important.
Ratio Analysis
It provides useful details on the financial statements' representations of the organization's
profitability, solvency, operational effectiveness, and liquidity positions are used to predict the
future and make important judgements.