Case Study On

“Aftab Auto Mobiles Limited”Topic: Finance and Accounting Division

Course code: BBA-3323

Course title: Business Policy and Strategy

Prepared for:

MD: Masum Billah Senior Lecturer Northern University, Bangladesh.

Prepared by:

Dipock Mondal

Department of Business AdministrationNorthern University, Bangladesh

Date of submission: 25TH March, 2010

25TH March, 2010ToMD: Masum Billah Course TeacherBusiness Policy and StrategyDepartment of Business AdministrationNorthern University, Bangladesh.

Subject: Case study on “Aftab Auto Mobile Limited”

Dear Sir,

We, the student of Business Policy and Strategy course are here by presenting you our case study on “Aftab Auto Mobile Limited”. It is a great pleasure for us to present you the Report as a requirement of the course. This is to bring to your kind notice that it is our great pleasure to submit the Case

Study on the above captioned subject to accomplish the purpose of 25TH as a part

of the course requirement of Policy and Strategy. To prepare this case study we have tried to maintain your guidelines from several discussions. The whole experience of this Case Study enable us to bridge the gap between classroom and real life situation to a great content. Here, we want to declare that, the Case Study is uniquely prepared by us and we would be happy to provide further clarification regarding this Case Study whenever necessary. We have tried our level best to submit this Case Study within the short time.

Hope our effort on writing this Case Study could serve you as an actual source of information. Thanking you for providing us with such opportunity.

Thank you.Sincerely,

Acknowledgement

We the students of Northern University Bangladesh completing 10 th Semester are

working for several days to prepare the term paper for “Business policy and strategy” as a

course requirement. All students of our group give their time and effort to prepare the

case solution. Alal, Humayun, Sazzdul, Moumita participate in the Case Study. Ripon

also With us There is no doubt that our Report would become a batter on with their help.

We would like to thank the entire student who helped a lot in preparing the Report.

Last but not least overriding debt goes to MD: Masum Billah lecturer, sir for giving us

this grateful opportunity to work on such an important subject. This would definitely help

us to build and develop ourselves as a team player in the future. Besides this he has also

guided us through the total Report. So we are very grateful to him.

Introduction

Aftab Automobiles Ltd, a sister concern of NAVANA Group mainly a vehicle

assembling and small parts manufacturing company. The company has been successfully

assembling TOYOTA & HINO vehicles for Bangladesh market since 1982, recently

lunched HINO -Mini bus.

Company has gone through an extensive BMRE and as a result of that Paints and Battery

units were established. It has a great IT and R&D department. R&D department related to

parts design, shape size and its proper function or any difficulty then again check and

rectify. We started this department in full fledged research and development work with

assistance of experience research experts and Engineers.

Ratio Analysis of Aftab auto mobile limited

RATIO ANALYSIS OFAFTAB AUTO MOBILE LIMITED

Name of Ratio 2003 2006 20091.Current Ratio= Current Assets Current Liabilities

622839161599967714= 1.04 times

15152317931089431023= 1.39 times

20012678121506436479= 1.33 times

2.Quick Ratio/Acid Test Ratio= Current Assets – Inventories

Current Liabilities

622839161 - 223982606599967714= 0.66 times

1515231793 - 6102587161089431023= 0.83 times

2001267812 - 7375172741506436474= 0.84 times

3. Fixed Assets Turnover = Sales Net Fixed Assets

1257281932 157248610

= 8.00 times

1553133796 250393892

= 6.20 times

2124637706437616084= 4.86 times

4. Total Assets Turnover = Sales Total Assets

1257281932 757116324

= 1.66 times

1553133796 1765625685

= 0.88 times

21246377062438883896= 0.87 times

5. Debt Ratio = Total Liabilities Total Assets

17100000+22871447757116324

= 0.052

11065310231765625685

= 0.63

15333644032438883896

= .6306. Times Interest Earned Ratio =Earning Before Interest & Taxes Interest Charges

64950230 27790260

= 2.34 times

47078893 44319538

= 1.055 times

12531276190846346

= 1.38 times7. Net Profit Margin =Net Income Sales

493596951257281932

= 0.04

482165331553133796

= 0.27

316616692 2124637706

= 0.15

1. Current Ratio: Current ratio says that in 2006 current ratio is high than 2003 and 2009. It means that Aftab Automobiles Ltd. Can repay the total liabilities with the current asset by 1.04, 1.39 and 1.33 times.

2. Quick Ratio: It shows the company can meat up the current liability with the current asset in hand by 0.66, 0.83 and 0.84 times.

3. Fixed Assets Turnover: It shows that company’s sales recover the fixed asset by 8, 6.20 and 4.86 times.

4. Total Assets Turnover: It shows that company’s sales recover the Total asset by 1.66, 0.88 and 0.87 times.

5. Debt Ratio: It shows that company’s Total asset recover the Total Debt by 0.052, 0.63 and 0.63 times.

6. Times Interest Earned Ratio: It shows that company’s Earnings recover the Total interest expenses by 2.34, 1.05 and 1.38 times.

7. Net Profit Margin: It shows that company’s Net income recover the Sales by 0.04, 0.27 and 0.15 times.

Cash Flow Analysis of Aftab auto mobile limited

2003: In this year the company purchase additional fixed asset of Tk. 97934811 Net cash flow of the company is Tk. 29438922.

2006: In this year the company purchase fixed asset of Tk. 30531889 Net cash flow of the company is Tk. (9947154).

2009: In this year the company purchases Property, Plant and Equipment of Tk. 22385001 Net cash inflow of the company is Tk. (265362413).

Strategy of Aftab Automobiles Ltd.

A company’s strategy consists of the set of competitive moves and business approaches that management is employing to run the company.Aftab Automobiles Ltd. Use Functional- level Strategy .Because Functional-Level Strategy Focus on improving the effectiveness of operations within a company’s

Manufacturing Marketing Finance and Accounting Materials management Research and Development Human Resources Etc.

Conclusion

Aftab Automobiles Ltd. is one of the leading industry in automobile sector of our country. Its ratio analysis shows that in 2009 the entire ratio is not so good regarding to year 2003 and 2006. Otherwise the entire ratio is moderate.The company looks forward for considering expansion of the assembling unit and modernization of the Body Building unit to drive maximum financial benefits for the shareholder.