Final Project
F U N D A M E N TA L S O F F I N A N C E
B B A ( 3 - B ) SUBMITTED BY:
S U B M I T T E D T O : SHEHROZ AHMED GILL
M DANIAL ASHIQ
M A A M T A L A T M TAMOOR ULFAT
R E H M A N SALEH ALI
ZOHAIB GULZAR
D U E D A T E : QASIM ULLAH WAZIR
09-DEC-2013
Yamaha Motors
Introduction:
Yamaha Motor Company Limited is a Japanese motorized vehicle-producing
company. Yamaha Motor is part of Yamaha Corporation and its headquarters is located in Iwata,
Shizuoka. Along with expanding Yamaha Corporation into the world's biggest piano maker, then
Yamaha CEO Genichi Kawakami took Yamaha into the field of motorized vehicles on July 1,
1955. The company's intensive research into metal alloys for use in acoustic pianos had given
Yamaha wide knowledge of the making of lightweight, yet sturdy and reliable metal
constructions. . Yamaha Motor produces motorcycles, all-terrain vehicles, and boats, marine
engines including outboards, automobile engines, personal watercraft and snowmobiles.
In 2000, Toyota and Yamaha Corporation made a capital alliance in which Toyota paid Yamaha
Corporation 10.5 billion for a 5 percent share in Yamaha Motor Company, while Yamaha and
Yamaha Motor each bought 500,000 shares of Toyota stock in return. Yamaha Motor Company
was founded by Torakusu Yamaha Torakusu in Japanese it means" mountain leaf".
Yamaha Motors in Pakistan:
In 1976, under the umbrella of the Dawood Group of Companies, Dawood Yamaha Limited was
formed in a joint venture with Yamaha Motor Company (YMC), Japan. Since its launch it has
built extensive world-class facilities for manufacturing and marketing motorcycles in Pakistan
and their reputation as a manufacturer of quality motorcycles has remained unquestioned.
Their manufacturing plants are located in Hub Chowki, where its sister company Balochistan
Engineering Works (BEWL) produces the frame, fuel tank, rear arm, fenders, gears, hubs,
leavers, crank and cover cases, for their motorcycle range. The assembly plant for their
motorcycles is based in Uthal, where the plant manufactures motorcycles in accordance with very
high quality standards laid down by Yamaha Motor Company, Japan.
Data of 5 Years March 2007- 2011
Formulas:
1 Current Ratio = Current Assets/ Current Liabilities
2 Inventory Turnover Ratio = Sales/ Inventories
3 Debt Ratio = Total Debts/ Total Assets
4 Quick Ratio = (Current Assets-Inventories) / Current Liabilities
5 Fixed Asset Turnover = Sales/ Net Fixed Assets
6 Total Asset Turnover = Sales/ Total Assets
7 Times Interest Earned = EBIT/ Interest Expense
8 Profit Margin = Net Income/ Net sales
9 Price earning = Price/ Earnings per share
10Market Book = Market Price/Book value per share
Ratio Interpretation
March 11 March 10 March 09 March 08 March 07
Current Ratio 0.8 0.69 0.84 0.88 0.84
Liquid Ratio 0.71 0.55 .73 .64 0.76
Inventory turnover 32.8 29.87 28.64 29.33 36.88
Fixed asset turnover 4.85 3.5 2.6 2.95 2.96
Total asset turnover 3.14 2.77 2.53 3.02 1.32
Profit margin (%) 19.8 14.23 7.4 8.32 12.66
Debt ratio .07 .46 .84 .84 .29
Time interest earned 26.22 41.10 51.89 24.33 35.7
Price earning 25.07 12.29 31.88 27.69 8.27
Market book 17.04 7.14 11.18 13.18 18.15
Fixed Asset turnover:
The fixed asset turnover ratio measures how effectively the firm uses its plant and
equipment. Yamaha ratios indicate that the firm is using its fixed assets intensively as the ratio
keeps on increasing as compared to previous years.
Total Asset Turnover:
The total asset turnover measures the turnover of all the firms asset. This is indicating that the
company is generating sufficient volume of business given its total assets investment to increase
it further some assets should be disposed of.
Time Interest earned Ratio:
The TIE ratio measures the extent to which the operating income can decline before the firm is
unable to meet its annual interest cost. Except for year 2009 the firm is not able to its interest
charges and this could cause the company to face difficulties while borrowing additional funds.
Price Earnings Ratio:
It shows how much investors are willing to pay per dollar of reported profits. The P/E ratios of
firms are higher in year 2008, 09, 11 which shows strong growth prospects while in 2007 and
2008 it has poor growth.
Market Book Ratio:
It gives the indication how investors regard the company and this company has fairly high rate of
return on equity so it will sell at higher multiple of book value.
Conclusion:
Yamahas financial position is not as per standard.
Working capital ratio is negative for all years which are not good for the
company.
Current ratio and liquid ratio are also showing a decreasing trend.
Yamaha should try to improve its current ratio.
