A TRAINING REPORT ON

“FINANCIAL STATEMENT ANALYSIS OF HONDA COMPANY”

Submitted to:

“Satyug Darshan Institute of Engineering and Technology”

By:

GAYATRI DEVI

Roll No.

Batch 2017– 2020

In Partial Fulfillment Bachelor of Business Administration

J.C.BOSE YMCA UNIVERSITY

FARIDABAD (HARYANA)

(JULY, 2019)

Satyug Darshan Institute of Engineering and Technology

Bhupani Lalpur Road, Village Bhupani

Faridabad-121002, NCR, Haryana , INDIA.

 DECLARATION

I GAYATRI DEVI hereby declare that this training report titled “ FINANCIAL

STATEMENT ANALYSIS OF HONDA COMPANY” the record of authentic work

carried out by me during the period from ________________________________ and has not
been submitted to any other University or Institute for the award of any degree / diploma etc.

(Signature)
Gayatri Devi

Date:
 BONAFIDE CERTIFICATE
This is to certify that Ms.Gayatri devi of Satyug Darshan Institute of Engineering and
Technology has successfully completed to the project work Title ” FINANCIAL
STATEMENT ANALYSIS OF HONDA COMPANY” in partial fulfillment
requirement of the completion of Bachelor of Business Administration(General) course as
prescribed by the J.C BOSE UNIVERSITY OF SCIENCE & TECHNOLOGY,
YMCA,FARIDABAD(HARYANA). This Project report is the record of authentic work carried
out by his during period from to. She has worked under my Guidance

(Signature)

Mrs. NEHA BAJAJ

Assistance Professor, BBA Department

Date:-
 ACKNOWLEDGEMENT

I would like to express my gratitude and appreciation to all those who gave me the Possibility to
complete this report. A special thanks to MS. NEHA BAJAJ who help stimulating, suggestions
and encouragement, helped me to coordinate my project especially in writing this report.
I would also like to acknowledge with much appreciation the crucial role of the staff of
SATYUG DARSHAN INSTITUTE OF ENGINEERING AND
TECHNOLOGY, Who helped me in collecting all required information to complete the
project report.
 PREFACE
For a management student training plays an important role during his/her study. Training
provides a corporate or real world platform to learn practically. This training provides a great
opportunity to know the current market. To know the market situations, prevailing competitions,
behavioral environment of different people etc.

It was for the first time I got the opportunity to work in such a prestigious and well-known
organization. And things which I have experienced in my training time are going to help me
throughout my life time. I have worked on this project with great enthusiasm and zeal.

GAYATRI DEVI

DATE:-
SR. NO PURTICULAR REMARKS

1. INTRODUCTION OF THE STUDY

2. COMPANY PROFILE

RESEARCH METHODOLOGY
 Objective of study
3.  Research Design
 Method of data collection
 Limitations of the study

DATA COLLECTION ANALYSIS AND

4.
INTERPRETATION

5. FINDING AND SUGGESTIONS

6. CONCLUSION

7. BIBLIOGRAPHY
CHAPTER -1
INTRODUCTION

OF THE STUDY
 INTRODUCTION

These financial reports include audited financial statements, additional disclosures required by
regulatory authorities, and any accompanying (unaudited) commentary by management. Basic
financial statement analysis. —as presented in this reading—provides a foundation that enables
the analyst to better understand other information gathered from research beyond the financial
reports.

Financial statement analysis  focuses on ratios, equities and debts. It is useful for portfolio
management, distribution of dividend, capital raising, hedging and looking after fluctuations in
foreign currency and product cycles.. It also refers to the efficient and effective management of
money (funds) in such a manner as to accomplish the objectives of the organization. It is the
specialized function directly associated with the top management. The significance of this
function is not seen in the 'Line' but also in the capacity of the 'Staff' in overall of a company. It
has been defined differently by different experts in the field.

The term typically applies to an organization or company's financial strategy, while personal

finance or financial life management refers to an individual's management strategy. It includes
how to raise the capital and how to allocate capital, i.e. capital budgeting. Not only for long term
budgeting, but also how to allocate the short term resources like current liabilities. It also deals
with the dividend policies of the share holders.

Concept

 “Financial statement may be defined as that area or set of administrative function in an

organization which are related with arrangement of cash and credit so that organization may
have the means to carry out its objective as satisfactorily as possible." - by Howard & Opton.

Objectives of Financial Statement Analysis

 Profit maximization happens when marginal cost is equal to marginal revenue. This is the

main objective of Financial Statement analysis.
 Wealth maximization means maximization of shareholders' wealth. It is an advanced goal
compared to profit maximization.
 Survival of company is an important consideration when the financial statement makes
any financial decisions. One incorrect decision may lead company to be bankrupt.
 Maintaining proper cash flow is a short run objective of financial statement. It is
necessary for operations to pay the day-to-day expenses e.g. raw material, electricity bills,
wages, rent etc. A good cash flow ensures the survival of company.
 Minimization on capital cost in financial statement analysis can help operations gain
more profit.
 It is vague :- There are several types of profits before interest, depreciation and taxes,
profit before taxes, profit after taxes, cash profit etc

Scope of Financial Management

 Estimating the Requirement of Funds: Businesses make forecast on funds needed in both
short run and long run, hence, they can improve the efficiency of funding. The estimation is
based on the budget e.g. sales budget, production budget.
 Determining the Capital Structure: Capital structure is how a firm finances its overall
operations and growth by using different sources of funds.[2] Once the requirement of funds
has estimated, the financial manager should decide the mix of debt and equity and also types
of debt.
 Investment Fund: A good investment plan can bring businesses huge returns.
 To ascertain maximum profit as well as maintain the core value of the organization
 CHAPTER-2
COMPANY PROFILE
 COMPANY PROFILE
Honda has been the world's largest motorcycle manufacturer since 1959 as well as the world's
largest manufacturer of internal combustion engines measured by volume, producing more than
14 million internal combustion engines each year. Honda became the second-largest Japanese
automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the
world in 2015.

Honda was the first Japanese automobile manufacturer to release a dedicated luxury
brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also
manufactures garden equipment, marine engines, personal watercraft and power generators, and
other products. Since 1986, Honda has been involved with artificial intelligence/robotics
research and released their ASIMO robot in 2000. They have also ventured into aerospace with
the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 Honda Jet, which
began production in 2012. Honda has three joint-ventures in China (Honda China, Dongfeng
Honda, and Guangqi Honda).

In 2013, Honda invested about 5.7% (US$6.8 billion) of its revenues in research and
development. Also in 2013, Honda became the first Japanese automaker to be a net exporter
from the United States, exporting 108,705 Honda and Acura models, while importing only
88,357.

Honda Motor Co., Ltd. (Honda), incorporated on September 24, 1948, develops, manufactures
and markets motorcycles, automobiles and power products across the world. The Company's
segments include Motorcycle Business, Automobile business, Financial services business, and
Power product and other businesses. Honda conducts its operations in Japan and around the
world, including North America, Europe and Asia. Honda markets its products through a sales
network of independent local dealers. Its motorcycles are distributed through outlets, including
PRO'S shops and Honda Dream authorized dealerships. Its automobiles and power products are
distributed in Japan through retail dealers. Its manufacturing facilities are located in Japan, the
United States, Canada, Mexico, the United Kingdom, Turkey, Italy, France, China, India,
Indonesia, Malaysia, Thailand, Vietnam, Argentina and Brazil.

Motorcycle Business
The Company produces a range of motorcycles, with engine displacement ranging from the 50
cubic centimeters class to the 1,800 cubic centimeters class. Honda's motorcycles use internal
combustion engines developed by Honda that are air-or water-cooled, four-cycle, and are in
single, two, four or six-cylinder configurations. Honda's motorcycle line consists of sports
(including trial and moto-cross racing), business and commuter models. Honda also produces a
range of off-road vehicles, including all-terrain vehicles (ATVs) and side-by-side (SxS).

Automobile Business

The Company's automobiles use gasoline engines of three, four or six cylinder, diesel engines,
gasoline-electric hybrid systems and gasoline-electric plug-in hybrid systems. Honda also offers
alternative fuel-powered vehicles, such as ethanol, battery electric and fuel cell vehicles. Honda's
principal automobile products include passenger cars, light trucks and mini vehicles. Its
passenger car models include Accord, Accord Hybrid, Amaze, Brio, Brio Amaze, Brio Satya,
City, Civic, Civic Tourer, Civic Type R, Crider, CR-Z, Fit/Jazz, Fit/Jazz Hybrid, Freed, Freed
Hybrid, Freed Spike, Freed Spike Hybrid, Grace, Grace Hybrid, Greiz, Honda Mobilio, Insight,
Jade, Jade Hybrid, Legend Hybrid, Mobilio, Shuttle, Shuttle Hybrid, Spirior, Acura ILX, Acura
RLX and Acura TLX. Its light trucks models include BR-V, Crosstour, CR-V, Elysion, Odyssey,
Odyssey Hybrid, Pilot, Step WGN, Vezel/HR-V, Vezel Hybrid, XR-V, Acura MDX and Acura
RDX. Its mini vehicles models include Acty, N-BOX, N-BOX +, N-BOX Slash, N-ONE, N-
WGN, S660 and Vamos.

Financial Services Business

Honda offers a range of financial services to its customers and dealers through finance
subsidiaries in countries, including Japan, the United States, Canada, the United Kingdom,
Germany, Brazil and Thailand. The services of these subsidiaries include retail lending, leasing
to customers and other financial services, such as wholesale financing to dealers.

Power Product and Other Businesses

Honda manufactures a range of power products, including general-purpose engines, generators,

water pumps, lawn mowers, riding mowers, grass cutters, brush cutters, tillers, snow blowers,
outboard marine engines, power carriers, sprayers and pressure washers. Honda offers
cogeneration units.
Native name 本田技研工業株式会社

Romanized name Honda Giken Kōgyō Kabushiki-gaisha

Type Public KK

Traded as TYO: 7267
NYSE: HMC
TOPIX Core 30 Component

ISIN JP3854600008 

Industry Conglomerate

Founded Hamamatsu, Japan (October 1946, incorporated 24 September 1948; 71

years ago)

Founder Soichiro Honda

Takeo Fujisawa

Headquarters Minato, Tokyo,Japan

Area served Worldwide

Key people Toshiaki Mikoshiba

(Chairman)
Takahiro Hachigo
(President and CEO)

Automobiles
Products
commercial vehicles
luxury vehicles
motorcycles
Scooters
electric generators
water pumps
lawn and garden equipment
rotary tillers
 outboard motors
robotics
jet aircraft
jet engines
thin-film solar cells
internavi (telematics)
Revenue  ¥15.36 trillion (2018)[1]

Operating income  ¥833.5 billion (2018)[1]

Net income  ¥1.05 trillion (2018)[1]

Total assets  ¥19.34 trillion (2018)[1]

Total equity  ¥8.23 trillion (2018)[1]

Owner JTSB investment trusts (6.46%)

TMTBJ investment trusts (4.71%)
Mokusurei (3.09%)
Meiji Yasuda Life (2.83%)
Tokio Marine (2.35%)
(As of March 2014)
Number of 215,638 (2018)[1]
employees

Divisions Acura
Honda Aircraft Company
Honda Automobiles
Honda Motorcycles
Subsidiaries America Honda Motor Company, Honda Aircraft Company, Honda
Racing, Honda Motorcycle and Scooter etc.

Website Honda Worldwide: Honda Motor Co., Ltd.

Products

Automobiles
For a list of automobiles, see List of Honda automobiles.

Tenth generation Honda Accord

Tenth generation Honda Civic in production from 2016–present

Fifth generation Honda CR-V

Honda's automotive manufacturing ambitions can be traced back to 1963, with the Honda T360,
a kei car truck built for the Japanese market.[29] This was followed by the two-door roadster,
the Honda S500 also introduced in 1963. In 1965, Honda built a two-door commercial delivery
van, called the Honda L700. Honda's first four-door sedan was not the Accord, but the air-
cooled, four-cylinder, gasoline-powered Honda 1300 in 1969. The Civic was a hatchback that
gained wide popularity internationally, but it wasn't the first two-door hatchback built. That was
the Honda N360, another Kei car that was adapted for international sale as the N600. The Civic,
which appeared in 1972 and replaced the N600 also had a smaller sibling that replaced the air-
cooled N360, called the Honda Life that was water-cooled.

Motorcycles

Honda is the largest motorcycle manufacturer in Japan and has been since it started production in
1955. At its peak in 1982, Honda manufactured almost three million motorcycles annually. By
2006 this figure had reduced to around 550,000 but was still higher than its three domestic
competitors.

In 2017, India became the largest motorcycle market of Honda. In India, Honda is leading in the
scooters segment, with 59 percent market share.

Engines

Honda Outboard motor on a pontoon boat

Honda engines powered the entire 33-car starting field of the 2010 Indianapolis 500 and for the
fifth consecutive race, there were no 

Honda Outboard motor on a pontoon boat

Honda engines powered the entire 33-car starting field of the 2010 Indianapolis 500 and for the
fifth consecutive race, there were no engine-related retirements during the running of the
Memorial Day Classic.

In the 1980s Honda developed the GY6 engine for use in motor scooters. Although no longer
manufactured by Honda it is still commonly used in many Chinese, Korean and Taiwanese light
vehicles.
Robots

ASIMO at Expo 2005

ASIMO is the part of Honda's Research & Development robotics program. It is the eleventh in a
line of successive builds starting in 1986 with Honda E0 moving through the ensuing Honda E
series and the Honda P series. Weighing 54 kilograms and standing 130 centimeters tall, ASIMO
resembles a small astronaut wearing a backpack, and can walk on two feet in a manner
resembling human locomotion, at up to 6 km/h (3.7 mph). ASIMO is the world's only humanoid
robot able to ascend and descend stairs independently. However, human motions such as
climbing stairs are difficult to mimic with a machine, which ASIMO has demonstrated by taking
two plunges off a staircase.

Mountain bikes
 Honda RN-01 G-cross

Honda has also built a downhill racing bicycle known as the Honda RN-01. It is not available for
sale to the public. The bike has a gearbox, which replaces the standard derailleur found on most
bikes.

Honda has hired several people to pilot the bike, among them Greg Minnaar. The team is known
as Team G Cross Honda.
Former products

Motorsports

Main article: Honda in motorsport

Honda has been active in motorsports, like Motorcycle Grand Prix, Superbike racing and others.

Automobile
 Honda in Formula One

Rubens Barrichello driving for Honda

Honda entered Formula One as a constructor for the first time in the 1964 season at the German
Grand Prix with Ronnie Bucknum at the wheel. 1965 saw the addition of Richie Ginther to the
team, who scored Honda's first point at the Belgian Grand Prix, and Honda's first win at
the Mexican Grand Prix. 1967 saw their next win at the Italian Grand Prix with John Surtees as
their driver. In 1968, Jo Schlesser was killed in a Honda RA302 at the French Grand Prix. This
racing tragedy, coupled with their commercial difficulties selling automobiles in the United
States, prompted Honda to withdraw from all international motorsport that year.
 CHAPTER-3
RESEARCH
METHODOLOGY
Meaning of research methodology
The process used to collect in information and data for the purpose of making business decision.
The methodology may include publication research, interviews. Surveys and other research
techniques and could include both present and historical information.

My research is based on the in financial areas. In which analysis of financial statement of the
Honda company. In financial statement we will know position of the company in the market.

Objectives of the study:-

1. To study the financial performance of the “Honda motocorp ltd”.
2. To know the financial strength of the company.
3. To know the solvency of the company.
4. To make comparative study with other years performance.
5. To know the capability of the payment of dividend or interest.
6. To know the managerial capacity towards the finance.
7. To know the profitability of the company in the form of ratio.

Research Design:-

A research design can be as “Arrangement of condition for collection and analysis of data in the
manner that aims to combine relevance to the research purpose with economy in procedure”. It
consists of the blue print for the collection measurement and analysis of data.

A research design is a master plan or a model to conduct a formal investigation and survey It is a
specification not method and procedures for acquiring the information needs for solving the
problem. It decides the sources of information and methods for gathering data.

A good research design ensures that the information obtained is relevant to the research question
and that it was collected by objectives. Since research design simplifies the study, it should used
as guide in collecting and analyzing data. The research used here is exploratory research design.
Types of research design

 Descriptive Research.
 Analytical Research.
 Fundamental Research.
 Exploratory Research.
 Conceptual Research.

In this report, Descriptive Research design was taken. This is descriptive in nature because study
is focused on investigation in a well structured from and is based on secondary data. I had used
information or facts which is already available and analyzed that to make critical evaluation
about the Equity and Derivative. It involves the in-depth study and evaluation of available
information in an attempt to explain complex phenomenon. It is primary concerned with testing
hypothesis and specifying and interpreting relationship by analyzing the facts or information
already available.

Methods of data collection:-

Data Collection

The task of data collection begins after a research problem has been defined and research design
chalked out. Collection of data is the first step in any statistical investigation.

Collection of data is a very important function. The success and failure of investigation mainly
depends upon the quality of data. Adequacy and accuracy of data is essential to arrive at correct
conclusion.

The person who is collecting statistical data has to observe self-restraint, confidence, Patience,
caution and unbiased attitude while collecting data.

According to BOWLEY “In collection of statistical data commonsense is the chief requisite and
experience the chief justice”.

When we talk of collection of data we should be clear as to what does the word data cannot the
word DATUM is Latin word, which means SOMETHING GIVEN. It means a piece of
information which can be either quantitative or qualitative.

There are two types of data by which analysis can be done. These are as follows:

 Primary data
 Secondary data

Primary data was collected by the personal visits to the company under study. Today intelligence
is defined as what is measured by the intelligence test.

Secondary data was collected from various published and unpublished sources such as manuals
and documents, company website, magazines, internet etc.
In this report I used the Secondary data because we analysis of flow of Finance. Whose some of
data is given in company website, internet and various other websites and some of data is
collected by me personally.

Limitation of Study:

I have tried my best to make this project as transparent as possible but there exit some
uncontrollable limitation which also exists in our report which are as follows:

1. Time limitation.

2. The study confined to a period of last three months for assessing the financial statement
analysis of Honda motocorp.

3. Firstly the main limitation of the research was generated from the small size of the data. Under
time and financial constraints, the study was performed only with a small portion of the financial
from the whole company. This may get the incorrect results.

4. Unavailability of proper information.

5. Lack of guidance.
6. Organizational restriction.

CHAPTER-4
DATA ANALYSIS &
ITERPRETATION
Financial Statement Analysis

Tools used for of analysis financial statement:

The numbers given in financial statement are not much of use to the decision maker. These
numbers are to be analyzed over a period of time or relation to other numbers so that significant
conclusions could be drawn regarding the strength and weakness of business enterprises. The
tools of financial analysis help in this regard.

In this project we show or discuss:

 Comparative statement
 Common size statement
 Ratio analysis
 Cash flow statement
 Income statement
COMMON SIZE BALANCE SHEET

FIG:4.1

INTERPRETATION:

This figure shows the current liabilities of the company increased per year on the other hand we
can see also assets of that company increased per anum. In figure shows total equity of the
company is decreased by 39.90% from 35.70% in year 2016 and every year almost decreasing by
5%. Toatal assets is more than the all liabilities hence we can say financial condition of the
company is good on the basis of this figure.
CASH FLOW STATEMENT OF HONDA COMPANY

PARTICULAR AMOUNT
Cash flows from operating activities
Net Income
524,071,000
Depreciation & amortization
697,329,000
Deferred income taxes
-
Stock based compensation
-
Change in working capital
-480,397,000
Accounts receivable
50,846,000
Inventory
-118,408,000
Accounts Payable
-31,848,000
Other working capital
230,748,000
Other non-cash items
-201,831,000
Net cash provided by operating activities
788,744,000
Cash flows from investing activities 
Investments in property, plant and equipment
-557,996,000
Acquisitions, net
-5,448,000
Purchases of investments
-392,820,000
Sales/Maturities of investments
 363,223,000
Other investing activites
-
Net cash used for investing activites
-576,245,000
Cash flows from financing activities
Debt repayment
-10,518,998,000
Common stock issued
-
Common stock repurchased
-
Dividends Paid
-197,150,000
Other financing activites
-102,914,000
Net cash used privided by (used for) financing activities
-47,386,000
Net change in cash
84,088,000
Cash at beginning of period
2,250,879,000
Cash at end of period
2,415,992,000
Free Cash Flow
Operating Cash Flow
788,744,000
Capital Expenditure
-557,996,000
Free Cash Flow
230,748,000
FIG:4.2
Interpretation

In this above figure we can see the net income of the company is 524,071,000 Rs in the current
year. Cash flow statement shows the income and expenditure of the company in this figure
company have 230,748,000 free cash flow. Company provide the very much fund for the doing
all activities like for working capital, for investing in the stock market, capital expenditure,
dividend, interest etc. this company pay their liabilities on the time like salary, wages, interest
etc. therefore the company have good net income in the current year.
INCOME STATEMENT OF HONDA COMAPANY

FIG:4.3

INTERPRETATION
This figure shows the statement of income of the company. That’s figure shows total revenue,
gross profit, operating income, expenditure, operating expenses etc. we can see EBIT of the
company is 1,714,287,000 for current year. EBIT increased every financial year. That’s shows
income of statement of the company is good for current year.
RATIO ANALYSIS OF HONDA MOTOR COMPANY.

FIG:4.4

INTERPRETATION:
In the figure we can see the ratio of the company. Ratio analysis helps to find out the situation or
position of the company. In this analysis shows ROA (Return on Asset) and ROI (Return on
Investment) is decreased every year. Inventory turnover ration of the company is good from last
5 year. Long term debt is also decreased every year that’s shows the company pays the loan or
interest on the time.
 CHAPTER-5
FINDING AND SUGGESTIONS
FINDINGS
 The Gross Profit Ratio was increased the ratio of 1.02% in the year 2017-18 and
decreased 1.5% in the year2018-19.
 The Net Profit Ratio was increased in the ratio of 4.403% in the year 2017-18 and
decreased 3.082% in the year2018-19.
 Inventory turnover ratio was increased the ratio of 0.601% in the year 2017-18 and the
decreased 0.5% in the year 2018-19.
 Current ratio was decreased 0.3% in the year 2019 and increased 0.239% in the year
2018.
 Gross profit was decreased with the amount of 227,213,000 in the year 2017-18 and in
year 2018-19 also decreased by 52,897,000.
 The EBIT was increased with the amount of 147,250,000 in the year 2017-18 and
decreased by the amount of 126,749,000 in the year 2018-19.

SUGGESTIONS

Performance of a company measured in financial terms, the success of the firm depends on how
it is perceived by and reacts to the external economics markets. The field of managing fiancé is
much more complicated and faster faces today. The present study is concerned with financial
analysis of HONDA MotoCorp Limited for a period of four years during 2016-17 to 2018-19.
This chapter optimizes the major findings, suggestions and conclusions for efficient utilization
with respect to Honda MotoCorp Limited Company.

 Company should proper strategies and techniques or budgeting should be used which
result in a proper utilization of borrowed money.
 Company should use MIS as it provides very effective information , which ultimately
helps in decision –making.
 Company should reduce indirect expenses and to control unnecessary costs .
 Improve co-operation and co-ordination among the departments.
 Financial managers need to know how effective decisions can be made and ineffective
ones be avoided.
CHAPTER-6

CONCLUSION
CONCLUSION

The company has been able to increase its sales and profit during the year. The operation of the
company has there for improved. The net profit ratio has increased which proved that the
company has been able to control the cost effectively both motorcycle & car segment, Honda
MotoCorp Ltd has faced severe competition from its peers resulting in a loss of market share.
Honda MotoCorp Ltd’s margins have remained under pressure in the past fiscal years as the
product mix deteriorated. However, with the launch of the LEAP program, Honda MotoCorp
Ltdhas managed to show a significant cost reduction. HONDA MotoCorp Ltd continues to boast of
a negative working capital cycle even as the industry faces a slowdown. Even with aggressive
capex planned, FCF generation is likely to be strong as the working capital management remains
strong.
 CHAPTER-7

BIBLIOGRAPHY
Bibliography

 www.google.com
 www.moneycontrol.com
 www.yahoo.com
 www.wikepedia.com
 www.hondamotocorp.com
 Newspaper
 Magazines
 Branch of Honda company