INTERNSHIP REPORT

ON
DIAMOND TYRES LIMITED

By
ANEES AHMAD

ROLL NO 0 9 6 4 B A F 2 0 1 9

SESSION (2019-2023)

DEPARTMENT OF BUSINESS AND FINANCE

GC UNIVERSITY LAHORE

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An internship entitled

DIAMOND TYRES LIMITED

Submitted to the GC University, Lahore

in partial fulfillment of the requirements for the
award of the degree of

Bachelor (Hons.)

In

Business Accounting & Finance

By

ANEES AHMAD

ROLL NO 0 9 6 4 B A F 2 0 1 9

SESSION (2019-2023)

DEPARTMENT OF BUSINESS & FINANCE

GC UNIVERSITY LAHORE

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 DECLARATION

I, Anees Ahmad, Roll No. 0964-BH-BAF-19, student of Bachelor (Hons.) in the subject of
Commerce, Session 2019-2023, hereby declare that the matter contained in this internship
titled, “DIAMOND TYRES LIMITED” is my own work and has not been printed, published
and submitted as research work, thesis or publication in any form in any University, Research
institution etc. within or outside of Pakistan.

Date: 10/August/2023

Anees Ahmad

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 INTERNSHIP COMPLETION CERTIFICATE

It is to certify that the research work contained in this internship entitled, “DIAMOND TYRES
LIMITED” is carried out and completed by Mr. Anees Ahmad, Roll No. 0964-BH-BAF-19,
under my supervision during his Bachelor (Hons.) studies in the subject of Business,
Accounting & Finance.

Dated: ___________________

_______________________

Mr. Hesan Zahid

Assistant Professor
Department of Commerce & Finance
GC University, Lahore

Submitted through

____________________________ _______________________
Ms. Nosheen Rasool Controller Examination
In-Charge Government College University,
Department Of Commerce & Finance Lahore
GC University, Lahore

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TABLE OF CONTENTS

Declaration………………………………………………………………………iii
Research Completion Certificate………………………………………………….iv
Acknowledgements………………………………………………………………. 1
Executive Summary………………………………………………………………. 2
Introduction……………………………………………………………………….. 3
Organizational Structure of DTL…………………………………………………. 5
Plan of Internship Program……………………………………………………….. 17
Training Program…………………………………………………………………. 18
Critical Evaluation of Self Learning……………………………………………… 19
Work Ethics Observed at the Organization………………………………………..20
SWOT Analysis……………………………………………………………………21
List of Learning Outcomes……………………………………………………….. 23
Financial Ratios…………………………………………………………………... 25
References………………………………………………………………………... 44

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 Acknowledgements

All the praises and thanks for almighty Allah who bestowed me with the potential and
ability to contribute a drop of a material to the existing ocean of knowledge. I offer my humblest
thanks from the deepest care of my heart to the Holy Prophet Muhammad (peace be upon him)
who is forever a torch of guidance and knowledge for humanity as a whole.
I take this opportunity to record my deep sense of gratitude and indebtedness to my
worthy teachers for their constant encouragement, inspiring guidance, keen interest, useful
suggestions and fatherly treatment throughout these investigations and help in completion and
preparation of this internship report.
I do not have words at my command to express my gratitude and profound admiration
to my affectionate Parents, Sisters and Brothers for their spiritual and intellectual inspiration
and other relatives whose hands always rose in pray for me

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1. Executive Summary

This internship report offers a comprehensive account of my internship journey within the
Accounting Department at Diamond Tyres Limited. The report encompasses the organization's
history, structure, operations, and my practical application of theoretical concepts. Notably, it
includes a financial analysis that provides insights into the company's financial performance
and prospects.

My decision to intern at Diamond Tyres was motivated by its industry reputation for quality
products and ethical practices. The company's evolution from a family-owned enterprise to a
market leader underscores its dedication to innovation and customer satisfaction. The report
outlines Diamond Tyres' organizational structure, including its hierarchy, employee count,
main offices, and key departments.

My internship, conducted at the Head Office, Lahore, spanned 06 weeks and allowed for an in-
depth exploration of various departments. The primary focus was on the Accounting
Department, where I gained insights into financial transactions, statement preparation, and
ethical considerations.

Reflective journal entries chronicle my hands-on experience, detailing tasks such as

reconciliations, budgeting, and financial reporting. The integration of theoretical knowledge
into practical scenarios illuminated the importance of accurate financial data for informed
decision-making. Ethical considerations were pervasive, emphasizing the critical role of
integrity in financial operations.

The critical evaluation section underscores the value of experiential learning, where theoretical
concepts found relevance in real-world applications. Collaborative teamwork and
communication emerged as essential factors, highlighting the interconnectedness of accounting
with various organizational functions.

Diamond Tyres' commitment to strong work ethics and professionalism contributed to a

positive work environment. The organization's culture promotes accountability and integrity,
fostering personal and professional growth.

The SWOT analysis identifies Diamond Tyres' strengths, weaknesses, opportunities, and
threats. High-quality tire production is a key strength, while supply chain disruptions and the
need for ongoing research pose challenges. Opportunities lie in eco-friendly tire solutions and
global market exploration, while competition and economic fluctuations pose threats.

Moreover, this report includes a financial analysis that delves into Diamond Tyres' financial
performance. Through ratio analysis and trend assessment, I analyzed key financial indicators,
providing valuable insights into the company's financial health and prospects.

In conclusion, this report highlights the transformative impact of experiential learning.

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Diamond Tyres' commitment to quality, ethics, and innovation resonates with my professional
aspirations, positioning it as an environment for personal growth and career development. The
inclusion of a financial analysis adds a layer of insight into the company's financial standing,
enhancing the comprehensiveness of this report.

This report serves as a testament to the significance of practical experience in bridging the gap
between academia and industry, and the value of integrating theoretical principles with real-
world practices.

2. Introduction

2.1. Overview of the Organization

In the ever-evolving landscape of modern business, practical experience is crucial for students
to bridge the gap between theoretical knowledge and real-world application. This internship
report chronicles my immersive experience within the Accounting Department of Diamond
Tyres Limited, a prominent player in the tire manufacturing industry. This chapter delves into
the organization's motivation for selecting me as an intern, the historical evolution of Diamond
Tyres, its policy, and its position among competitors.

2.2 Motivation for Internship

My decision to pursue an internship at Diamond Tyres was driven by the organization's
esteemed reputation, market presence, and its emphasis on ethical business practices. As an
aspiring accounting professional, I recognized the opportunity to immerse myself in a real-
world accounting setting, refining my skills and understanding of industry practices.

2.3. Brief History and Introduction of the Organization

Diamond Tyres Limited stands as a cornerstone within Pakistan's industrial landscape,
specifically in the realm of tyre manufacturing. As a subsidiary of the esteemed Diamond
Group of Industries, one of the country's largest and most influential business conglomerates,
Diamond Tyres has solidified its position as a dominant force in the industry. With a history
spanning 43 years, this company's evolution is a testament to resilience, innovation, and
unwavering commitment.

Commencing as a modest enterprise in Karachi, Diamond Tyres embarked on its journey with
a vision to redefine the standards of quality and reliability in the tyre sector. Over the decades,
its growth trajectory has been marked by strategic decisions, dynamic leadership, and a
relentless pursuit of excellence. Today, Diamond Tyres stands tall as one of the largest tyre
manufacturing entities in Pakistan, serving as an embodiment of success and progress.

The Diamond Group of Industries, under which Diamond Tyres operates, is a towering
presence in the business landscape of Pakistan. The conglomerate's vast portfolio encompasses

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 diverse sectors, ranging from manufacturing to real estate, textiles, and beyond. This diversity
has enabled synergistic growth across various sectors, contributing to the overarching success of
Diamond Tyres as well.

With a commitment to delivering excellence, Diamond Tyres caters to a diverse range of

vehicles, from passenger cars to heavy-duty industrial equipment. Its diverse product portfolio
underscores its ability to adapt to changing consumer demands, further enhancing its market
standing.

2.4. Vision and Mission Statement

Vision
As a group our collective objective is to aim, sustain and execute only the highest standards of
innovation and systems across all department functions and to work as one frictionless unit.

Mission
We are a growth-oriented company, profoundly dedicated to producing and providing the
highest quality products to our customers. Deeply invested in the values of excellence and expert
craftsmanship, Diamond Group embodies a distinctively Pakistani form of elegance. We set
international standards for comfort and sophistication. With continued improvement in our
products, we endure to achieve our customers’ utmost satisfaction. Our company’s policy is to
manufacture thermal insulation products which help save energy, whilst at the same time, not
causing any kind of environmental pollution. We eliminate all scrap material by re-cycling and
re-using it.

2.5. Policy of the Organization

At the heart of Diamond Tyres Limited's philosophy lies a strong commitment to innovation
and sustainability. This dedication is deeply rooted in the company's approach, fostering an
environment of continuous improvement and introducing new ideas in tire manufacturing.

Diamond Tyres' approach is a clear reflection of its determination for excellence. Their pursuit
of new and better solutions goes beyond just words—it's a principle that guides every aspect of
their operations. This commitment is evident in the significant investments they make in
research and development, showing their dedication to staying ahead in industry trends.

The company's focus on innovation is evident in how they approach research and development.
By putting substantial resources into this area, Diamond Tyres ensures that their products
remain competitive, technologically advanced, and aligned with what consumers want. This
proactive stance helps them predict changes in the industry and adapt their offerings to meet
the evolving needs of the market.

Additionally, Diamond Tyres operates under the larger umbrella of the Diamond Group of
Industries, a respected conglomerate that places high value on core principles like honesty,
excellence, innovation, and responsibility. These values aren't just abstract concepts—they

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 guide the group's operations and underscore their strong commitment to Corporate Social
Responsibility (CSR).

Incorporating CSR as a central part of their philosophy, the Diamond Group of Industries uses
its influence to make a positive impact on society. Right from the beginning, the group
understood the importance of giving back and making a meaningful difference in the world.
This comprehensive approach extends to critical areas such as healthcare, sustainability, and
empowerment.

The group's CSR efforts are more than just gestures—they have a clear purpose and are carried
out in a professional way. This approach reflects the dedication of the employees and the
leadership of the Board of Directors. These initiatives have become a source of pride for the
Diamond Group of Industries. By promoting practices that are sustainable and responsive, the
group actively improves lives and contributes to a fairer and more flourishing society.

In essence, Diamond Tyres Limited's commitment to innovation, sustainability, and CSR

reflects their core values and forward-thinking approach. Their determination to push the
boundaries of tire manufacturing aligns well with the Diamond Group of Industries' bigger
mission to bring about positive change and uplift communities. By combining innovative
policies with socially responsible efforts, Diamond Tyres is not just changing the industry but
also shaping a better corporate landscape.

2.6. Competitors

In the midst of the fast-paced and highly competitive tire manufacturing sector, Diamond Tyres
Limited stands tall, facing challenges from both local competitors and global rivals. Notably,
Servis Industries Ltd. and Panther Tyres Ltd. are prominent contenders, striving to capture a
portion of the market. Despite the weight of these challenges, Diamond Tyres' unwavering
commitment to maintaining quality and driving innovation positions it as a robust and
influential player within this industry landscape.

Within the realm of tire production, Diamond Tyres Limited shines as a pivotal player,
securing its place as the third largest manufacturer in Pakistan. Amidst the presence of
formidable competitors, Diamond Tyres maintains a steadfast focus on delivering quality and
fostering fresh concepts. This steadfast dedication propels it as a significant force within the
market, driving positive impact and influence.

3. Organizational Structure of DTL

The efficiency and effectiveness of an organization are often influenced by its structure and
hierarchy. This section offers a comprehensive analysis of Diamond Tyres' organizational
structure, encompassing its hierarchy, employee count, departmental configuration, and insights
into the company's overall structure.

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The Board of Directors of the Diamond Tyres Ltd. is 04 Executive directors (Including
Chairman and Chief Executive Officer) and 01 independent director. Following is the list of the
Board of Director members:

 Mr. Iftikhar Shaffi is serving as the Chairman and CEO

 Mr. Muzamil Ejaz as Managing Director
 Mr. Bilal Ejaz as Executive Director
 Mr. Mudassir Shaffi as Executive Director
 Mr. Imran Kabir as Independent Director

3.1. Organizational Hierarchy Chart:

During my internship period, I had the privilege of being a part of the Head Office team at
Diamond Tyres Ltd., which is situated at W Mall, MM Alam Road. My internship journey
commenced on the 3rd of July 2023 and concluded on the 11th of August 2023, spanning a
rewarding duration of six weeks.
At the heart of Diamond Tyres' operational excellence is its well-defined hierarchical structure.
This structure serves as the backbone, fostering transparent communication channels, effective
decision-making processes, and the seamless distribution of responsibilities. Notably, the
organization is led by accomplished individuals who head various departments, each contributing
to the cohesive functioning of the company:
• Mr. Munawar Hussain – Serving as the CFO and heading the Accounts department.

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• Mr. Mobin Raza – Responsible for leading the Sales department.
• Mr. Zaffar Ahmed - Overseeing the Procurement and Imports department.
• Ms. Samra Sharif - Guiding the Internal Audit department.
• Mr. Wajih Ullah - In charge of the Management Information Systems (MIS) and IT
department.
• Mr. Aqleem - Directing the Production department.
In addition to these department heads, the structure includes capable managers who report to
their respective department heads. Each manager is entrusted with the supervision of a team
comprising around four to seven members. This hierarchical arrangement ensures efficient
coordination, division of labor, and optimal utilization of skills within the organization.
During my internship, I had the opportunity to closely observe and learn from these leaders and
managers, witnessing firsthand how they synergize their efforts to achieve collective goals. The
interconnectedness of departments and their leaders, along with the teamwork exhibited by
managers and their teams, underscored the unity and collaborative spirit that defines Diamond
Tyres Ltd.

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 3.2. Main Offices:
Diamond Tyres Ltd. has its main headquarters strategically located in Lahore, while its
manufacturing plant in Manga is backed by regional offices in Faisalabad and Karachi.
Furthermore, to ensure seamless distribution and operational excellence, the company has
established distribution centers in every major city across Pakistan.

This well-planned network serves as a foundation for efficient coordination, streamlined

communication, and the smooth flow of operations across different units within the
organization. The central office in Lahore acts as a hub for strategic decision-making and
overall management, while the manufacturing plant in Manga plays a pivotal role in producing
high-quality tires.

The regional offices in Faisalabad and Karachi extend the organization's reach and influence,
allowing for responsive decision-making tailored to local markets. These offices act as vital
links between the central management and the field operations, ensuring that the company's
strategies are effectively implemented and localized to meet the unique demands of each
region.

In addition, the distribution centers located in various cities play a crucial role in delivering
Diamond Tyres' products to customers across the country. These centers optimize logistics,
minimize delivery times, and enable the company to cater to a diverse range of customers
efficiently.

This strategically designed network not only enhances the organization's operational
capabilities but also underscores its commitment to providing high-quality products and
services to customers nationwide. The interconnectedness of these locations fosters a cohesive
approach to business operations, where information flows seamlessly, decisions are made
promptly, and customer needs are met effectively.

3.3. Various Department of DTL

The overall activities of National Bank of Pakistan are based on following nine main
departments;
1. Account Dept.
2. Finance Dept.
3. Procurement Dept.
4. Sales Dept.
5. MIS & IT dept.
6. Production Dept.
7. Audit Dept.
8. Marketing Dept.
9. HR Dept.
Besides these departments some other departments are admin and electrical department, each
contributing to the organization's seamless functioning.

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3.3.1. Accounts Department

The Accounts Department plays a critical role in ensuring financial stability, accuracy, and
effective operations. Serving as the financial backbone, this department is responsible for a
range of essential functions that contribute to the Diamond Tyres Ltd.’s success. Here's a
comprehensive breakdown of key roles of accounts department:

i. Financial Reporting and Analysis

The Accounts Department is tasked with generating accurate and timely financial reports,
including balance sheets, income statements, and cash flow statements. These reports offer
valuable insights into the organization's financial performance, aiding both management and
stakeholders in making informed decisions. Through analysis, the department assesses
profitability, liquidity, and solvency, which in turn supports well-informed plans for future
growth and financial stability.

ii. Budgeting and Forecasting

Collaborating closely with different departments, the Accounts Department engages in
budgeting and forecasting. It actively contributes to the creation of budgets for various
segments of the business, guiding resource allocation and expenditure control. By comparing
actual financial results to projected figures, the department identifies variances and assists in
implementing corrective measures.

iii. Cost Control and Management

Efficient cost management is a cornerstone of Diamond Tyres Limited. The Accounts
Department monitors costs associated with production, distribution, and other operational
aspects. It identifies opportunities for cost reduction, recommends efficient resource utilization,
and contributes to optimizing production processes to enhance overall profitability.

iv. Inventory Management

The Accounts Department ensures accurate valuation of inventory, encompassing raw
materials, work-in-progress, and finished goods. This approach mitigates risks associated with
overstocking and understocking, while minimizing the carrying costs associated with
inventory.

v. Payroll and Employee Benefits

The department oversees the meticulous processing of payroll, ensuring accurate and punctual
salary disbursements to employees. It also administers employee benefits such as insurance,
retirement plans, and compensation packages, ensuring they are handled correctly and in
compliance with relevant regulations.

vi. Taxation
The Accounts Department is responsible for a range of tax-related activities. This includes
calculating, deducting, and remitting taxes such as income tax and sales tax. Ensuring
adherence to tax regulations and minimizing the risk of non-compliance is a key part of the
department's role.

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 vii. Record Keeping and Vouching
The department is also responsible for maintaining accurate and organized financial records.
This involves systematically recording transactions and ensuring that all supporting
documentation, or vouching, is in place. Proper record-keeping is vital for accountability,
transparency, and facilitating audits.

In conclusion, the Accounts Department is the financial engine of Diamond Tyres Ltd. Its
multifaceted roles encompass financial reporting, cost management, inventory oversight,
payroll, employee benefits administration, taxation, record keeping, vouching, and strategic
planning. These roles collectively contribute to the organization's financial health, operational
efficiency, and sustainable growth.

3.3.2. Finance Department

The Finance Department plays a vital and dynamic role within Diamond Tyres Ltd., ensuring
efficient financial management and contributing to the overall success of the company. The
Finance Department's responsibilities are essential to maintaining financial stability and driving
growth in DTL. Here's an in-depth exploration of its key roles:

i. Loan Approvals and Management

The Finance Department is responsible for managing the DTL's borrowing activities. This
includes evaluating loan options, negotiating terms with financial institutions, and overseeing the
process of obtaining loans. They assess the financial implications of different loan options and
ensure that the DTL's borrowing aligns with its financial goals.

ii. Adjustments and Settlements

Managing financial transactions often involves adjustments and settlements. The Finance
Department oversees these processes, ensuring that discrepancies in financial records are
identified and resolved promptly. This can involve reconciling accounts, rectifying errors, and
ensuring accurate financial reporting.

iii. Cash Management

Efficient cash management is crucial for DTL's operational continuity. The Finance Department
is tasked with optimizing cash flow, monitoring cash balances, and making informed decisions
on when and how to invest surplus funds. Effective cash management ensures that the DTL can
meet its financial obligations and seize growth opportunities.

iv. Investment Management

The Finance Department evaluates investment opportunities to maximize returns on surplus
funds. This can include short-term investments in money markets or longer-term investments in
stocks, bonds, and other financial instruments. Careful investment decisions contribute to
enhancing the DTL's financial position.

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 v. Risk Management
Identifying and mitigating financial risks is a critical role of the Finance Department. They
analyze market trends, economic conditions, and other factors that could impact the
organization's financial stability. By developing risk management strategies and contingency
plans, the department helps safeguard the DTL against potential financial setbacks.

vi. Financial Forecasting

The Finance Department engages in financial forecasting, projecting the organization's financial
performance based on various scenarios. This forward-looking analysis assists in planning and
decision-making, enabling the organization to proactively address challenges and capitalize on
opportunities.

vii. Financial Reporting and Analysis

The department prepares comprehensive financial reports, including income statements, balance
sheets, and cash flow statements. These reports provide insights into the organization's financial
health and guide strategic decision-making. Financial analysis helps identify trends, performance
metrics, and areas for improvement.

viii. Arrangement of Capital

The Finance Department plays a crucial role in arranging the necessary capital for the
organization's growth and operations. This involves assessing capital requirements, exploring
funding options, and raising capital through various means such as equity issuance or debt
financing.

ix. Treasury Management

The management of the organization's funds and financial assets falls within the domain of the
Finance Department. This includes optimizing short-term liquidity, managing investments, and
ensuring that financial resources are utilized efficiently.

x. Compliance and Regulatory Reporting

The Finance Department ensures compliance with financial regulations and reporting
requirements. They prepare and submit financial statements to regulatory authorities, ensuring
that the organization remains compliant with legal obligations.

3.3.3. Procurement Department

The Procurement Department within Diamond Tyres Ltd. holds a critical role in ensuring the
seamless flow of resources and materials necessary for the company's operations. As a
manufacturing organization, Diamond Tyres relies heavily on the efficient procurement of raw
materials, components, and services to maintain its production processes and meet customer
demands. Here's an in-depth exploration of the Procurement Department's key roles:

i. Strategic Sourcing
The Procurement Department engages in strategic sourcing activities, which involve identifying
reliable suppliers, negotiating favorable terms, and establishing partnerships that align with the

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company's goals and values. This helps secure high-quality inputs at competitive prices.

ii. Supplier Relationship Management

Managing supplier relationships is vital for consistent and reliable procurement. The department
maintains open communication with suppliers, assesses their performance, and collaborates on
continuous improvements to ensure a steady supply of materials and services.

iii. Material Planning and Forecasting

The department works closely with production and inventory teams to forecast material
requirements based on production schedules and customer demands. Accurate material planning
prevents stockouts and overstocking, optimizing inventory levels.

iv. Cost Management

Effective cost management is crucial for maintaining profitability. The Procurement Department
focuses on negotiating competitive prices and terms with suppliers to ensure cost-effectiveness
without compromising quality.

v. Quality Control
Ensuring the quality of procured materials is essential for producing high-quality products. The
department establishes quality standards, conducts supplier audits, and monitors incoming
materials to guarantee that they meet the required specifications.

vi. Contract Management

Managing contracts with suppliers is a key responsibility. The Procurement Department drafts,
reviews, and finalizes contracts, outlining terms, conditions, delivery schedules, and quality
expectations to minimize risks and ambiguities.

vii. Inventory Optimization

The department collaborates with inventory management to optimize inventory levels. By
maintaining the right balance between stock on hand and production needs, the organization
minimizes carrying costs while ensuring uninterrupted production.

viii. Timely Delivery

Ensuring timely delivery of materials is essential to maintain production schedules. The
Procurement Department tracks delivery timelines, communicates with suppliers to address
delays, and works with production to adjust plans as needed.

In conclusion, the Procurement Department plays a vital role in Diamond Tyres Ltd.'s
operations. Its roles encompass strategic sourcing, supplier relationship management, material
planning, cost management, quality control, contract management, inventory optimization, risk
mitigation, ethical sourcing, market analysis, supplier negotiations, and ensuring timely delivery.
Through these roles, the department contributes to the organization's efficiency, sustainability,
and ability to deliver high-quality products to customers.

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 3.3.4. Sales Department
The Sales Department within Diamond Tyres Ltd. plays a crucial role in driving revenue,
building customer relationships, and expanding the company's market presence. It is responsible
for connecting the organization's products with customers' needs and ensuring a smooth flow of
products to the market. Here's an in-depth look at the Sales Department's key roles, including its
involvement in exports:

i. Market Research and Analysis

The Sales Department conducts thorough market research to understand customer preferences,
trends, and competition. This information helps shape sales strategies and product offerings.

ii. Sales Strategy Development

Based on market insights, the department develops sales strategies to effectively position
Diamond Tyres' products. It identifies target markets, pricing strategies, and distribution
channels to maximize sales opportunities.

iii. Customer Relationship Management

Building strong relationships with customers is a priority. The Sales Department interacts with
clients, understands their requirements, and provides solutions that meet their needs. It focuses
on customer satisfaction and retention.

iv. Lead Generation and Prospecting

The department identifies potential customers and generates leads through various methods,
including networking, referrals, and digital marketing. It then qualifies and nurtures these leads
to convert them into sales opportunities.

v. Order Processing and Fulfillment

After securing orders, the department ensures accurate order processing and timely fulfillment.
It coordinates with other departments to ensure that products are delivered to customers as
promised.

vi. Distribution Management

Efficient distribution of products is crucial. The Sales Department works closely with logistics
and distribution teams to ensure products reach customers on time and in optimal condition.

vii. Sales Target Achievement

The department sets sales targets aligned with the organization's goals. It monitors progress,
identifies performance gaps, and implements strategies to achieve or exceed targets.

viii. Exports
The Sales Department plays a pivotal role in the export of Diamond Tyres' products to

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international markets. This involves identifying export opportunities, complying with
international trade regulations, negotiating with overseas distributors, and ensuring efficient
logistics for global deliveries.

ix. Market Expansion

The department explores opportunities to expand the company's market reach. This can include
entering new geographic areas, targeting different customer segments, or introducing new
product lines.

x. Sales Reporting and Analysis

The Sales Department tracks sales performance, gathers data on customer preferences, and
analyzes sales trends. These insights inform decision-making and help refine sales strategies.

3.3.5. MIS & IT Department

This departments enable efficient data management, streamlined processes, and informed
decision-making. Here's an in-depth exploration of their roles within Diamond Tyres, with a
focus on their utilization of the EBS R12 system:

i. Data Management and Integration

MIS and IT collaborate to manage and integrate data across different departments and
functions. They ensure that accurate and up-to-date information is available for decision-
making and operational processes.

ii. Enterprise Resource Planning (ERP) System - EBS R12

Diamond Tyres employs the Oracle E-Business Suite (EBS) R12 as its ERP system. This
comprehensive software solution streamlines various business operations, including finance,
supply chain, manufacturing, sales, and human resources. MIS and IT oversee the
implementation, customization, and maintenance of the EBS R12 system.

iii. Process Automation

MIS and IT work together to automate various business processes using the ERP system. This
automation reduces manual effort, minimizes errors, and accelerates routine tasks such as order
processing, inventory management, and financial reporting.

iv. Data Analytics and Reporting

MIS harnesses the power of data analytics to generate meaningful insights from the
organization's data. The IT department ensures that the necessary tools and infrastructure are in
place to enable robust data analysis. This aids decision-makers in making informed choices
based on data-driven insights.

v. Cybersecurity and Data Protection

IT ensures that the organization's digital assets and data are secure from cyber threats and
breaches. This includes implementing security measures, monitoring for vulnerabilities, and
providing training to employees to enhance cybersecurity awareness.

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3.3.6. Production Department

The Production Department within Diamond Tyres Ltd. is at the heart of the organization's
operations, responsible for transforming raw materials into finished products while ensuring
efficiency, quality, and adherence to industry standards. This department encompasses both the
manufacturing and commercial aspects of the production process. Here's an in-depth
exploration of its roles:

i. Manufacturing Planning and Coordination

The Production Department devises comprehensive manufacturing plans, considering factors
like demand forecasts, resource availability, and production capacity. It coordinates with other
departments to ensure alignment with sales projections and overall business objectives.

ii. Process Design and Optimization

The department designs and optimizes production processes to maximize efficiency and
minimize waste. Continuous improvement initiatives are implemented to enhance productivity,
reduce costs, and maintain product quality.

iii. Raw Material Management

Efficient raw material management is crucial for uninterrupted production. The Production
Department collaborates with the Procurement Department to ensure timely availability of
required raw materials, preventing production bottlenecks.

iv. Workforce Management

The Production Department oversees staffing, training, and supervision of the production
workforce. It ensures that employees are well-trained, motivated, and equipped to execute
production tasks effectively.

v. Continuous Improvement
Constantly striving for process enhancement, the Production Department engages in continuous
improvement initiatives. It encourages innovation, implements best practices, and identifies
opportunities for operational excellence.

3.3.7. Audit Department

The Audit Department within Diamond Tyres Ltd. plays a critical role in ensuring
transparency, accountability, and compliance within the organization. It conducts
comprehensive audits of financial records, operational processes, and internal controls to
identify any discrepancies, inefficiencies, or potential risks. By evaluating the accuracy and
integrity of financial statements, the department helps maintain the organization's financial
health and credibility. Additionally, it assesses the effectiveness of internal controls, making
recommendations for improvements that enhance operational efficiency and minimize the risk
of fraud or errors. The Audit Department also ensures that the company adheres to legal and
regulatory requirements, fostering trust among stakeholders and contributing to the overall

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integrity of Diamond Tyres' operations. Through its impartial assessments and actionable
insights, the department safeguards the organization's resources and supports its long-term
success.

3.3.8. Marketing Department

The Marketing Department within Diamond Tyres Ltd. is tasked with creating and
implementing strategies to promote the company's products and services. This involves
understanding customer needs, identifying target markets, and developing impactful campaigns
that resonate with the audience. The department collaborates with various teams to ensure that
the organization's offerings are effectively communicated to the market. Through market
research, branding initiatives, advertising, and engagement across digital and traditional
channels, the Marketing Department plays a pivotal role in increasing brand awareness, driving
sales, and fostering customer loyalty.

3.3.9. HR Department
The HR Department within Diamond Tyres Ltd. serves as a critical link between the
organization and its workforce, playing a multifaceted role in managing human resources and
ensuring a harmonious and productive work environment. With a focus on aligning the
workforce with the company's mission and values, the HR Department carries out various key
functions.

One of the primary roles of the HR Department is recruitment and selection. This involves
identifying talent needs, sourcing candidates, conducting interviews, and making hiring
decisions that align with both job requirements and the company's culture.

Furthermore, the HR Department is responsible for onboarding and orientation. New

employees are welcomed and guided through the company's policies, procedures, work culture.

Employee training and development are integral aspects of the HR Department's

responsibilities. The department identifies skill gaps, designs training programs, and provides
opportunities for employees to enhance their competencies. By nurturing talent and facilitating
career growth, the HR Department contributes to the professional development of the
workforce.

Performance management is another significant focus area. Clear performance goals and
expectations are set, regular evaluations are conducted, and constructive feedback is provided
to enhance employee performance. This process promotes accountability, recognizes
achievements, and supports continuous improvement.

Compensation and benefits administration falls within the purview of the HR Department. It
designs competitive compensation structures and administers benefits such as healthcare plans
and retirement programs. This ensures that employees are fairly rewarded for their
contributions and have access to essential benefits.

Additionally, the HR Department ensures compliance with labor laws and regulations. It

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manages legal matters related to employment contracts and agreements, safeguarding the
company's adherence to legal requirements.

3.4. Comments on Organizational Structure

Diamond Tyres Ltd. exhibits a well-defined hierarchical organizational structure that facilitates
effective communication, decision-making, and accountability. The clear reporting lines and
specialized departments enhance efficiency and expertise. However, there is a potential for
bureaucratic tendencies and communication delays within the strict hierarchy. To mitigate these
challenges, fostering cross-functional collaboration, ensuring employee empowerment, and
cultivating adaptability to change are key considerations. Striking a balance between structure
and flexibility will enable Diamond Tyres to leverage the strengths of its organizational design
while remaining agile in a dynamic business environment.

4. Plan of Internship Program

4.1. Introduction of Head Office

My internship was centered within the Head Office of Diamond Tyres Ltd. This has provided
me with a valuable opportunity to delve into the distinctive operations and dynamics of the
organization. Being immersed in this office allowed me to gain a firsthand understanding of how
it functions within the larger framework of Diamond Tyres.

4.2. Starting and Ending Dates

My internship journey began on 3rd July 2023 and concluded on 11th August 2023, resulting in
a duration of 06 weeks. This timeframe enabled me to fully engage with the various
departments and activities, allowing for a comprehensive exploration of the organization's
workings.

4.3. Departments and Duration of Training

Throughout my internship, I had the privilege of training across multiple departments.
Work Experience & Evaluations Within the Accounts and Finance departments, my internship
exposed me to the financial backbone of Diamond Tyres Ltd. The allocated duration for each
department facilitated an immersive experience, allowing me to delve into their specific
functions and contribute to their operational processes.

In the Accounts Department, I had the privilege of spending time understanding the intricacies
of financial transactions, recording and managing financial data, and ensuring accuracy in
financial statements. This duration equipped me with valuable insights into the meticulous
processes required to maintain the organization's financial health.

Transitioning to the Finance Department, I gained exposure to tasks such as financial analysis,
budgeting, and strategic financial planning. By dedicating time to this department, I developed
a deeper understanding of how financial decisions impact the organization's long-term goals
and sustainability

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Collectively, my engagement with the Accounts and Finance departments provided me with a
profound appreciation for the financial intricacies that underpin Diamond Tyres Ltd.'s success.
This immersive experience allowed me to witness firsthand the vital roles that these
departments play in ensuring the organization's financial stability and strategic growth.

5. Training Program

5.1 Introduction
My internship at Diamond Tyres Ltd. provided me with a remarkable opportunity to immerse
myself in various departments and gain practical experience in diverse facets of the
organization's operations. One of the departments where I spent a significant portion of my
internship was the Accounts and Finance Department. During my tenure, I actively contributed
to several crucial tasks and projects, including invoices posting and their payments, funds
transfer vouchers, data entry in EBS R12 (Oracle E-Business Suite R12), and bank
reconciliation. This section will provide a comprehensive overview of my activities and
contributions within this department.

5.2 Detailed Description of Operations/Activities

The Accounts and Finance Department at Diamond Tyres Ltd. serves as the financial nerve
center of the organization, overseeing all financial transactions, record-keeping, and strategic
financial planning. My involvement in this department exposed me to a range of operations and
activities crucial for the organization's financial well-being.

5.3 Invoices Posting and Payment Processing

A significant portion of my responsibilities revolved around handling invoices posted by
various departments within the organization. This task involved reviewing incoming invoices
for accuracy, verifying the relevant purchase orders, and ensuring that the expenses were
correctly allocated to the appropriate cost centers. Once validated, I was responsible for
inputting these invoices into the accounting system, maintaining a transparent and organized
record of all financial transactions.

Moreover, I actively participated in the payment processing workflow. This included cross-
referencing invoices with purchase orders and delivery receipts, confirming payment approval,
and generating payment vouchers. My role extended to liaising with the procurement
department and suppliers to resolve any discrepancies or queries related to invoices.

5.4 Funds Transfer Voucher Management

Another crucial aspect of my internship involved working with funds transfer vouchers. This
process encompassed transferring funds between different accounts, both internally within the
organization and externally to suppliers and service providers. I was responsible for preparing
and verifying these vouchers, ensuring that they adhered to the organization's financial policies
and were accurately documented.

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5.5 Data Entry in EBS R12 (Oracle E-Business Suite R12)

As part of my responsibilities, I actively engaged in data entry within the organization's
financial software, EBS R12. This involved inputting financial data, including invoices,
receipts, and expense reports, into the system. Accuracy and attention to detail were paramount
to ensure that financial records remained error-free and up-to-date. The EBS R12 system
played a pivotal role in streamlining financial processes and maintaining an organized database
of financial transactions.

Bank Reconciliation
Bank reconciliation emerged as a critical task during my internship. I was responsible for
reconciling the organization's bank statements with internal records. This involved
meticulously comparing transaction records, identifying discrepancies, and ensuring that all
financial activities were accurately reflected. Bank reconciliation was vital for maintaining
financial transparency and identifying any anomalies that required investigation and resolution.

6. Critical Evaluation of Self Learning

My internship experience at Diamond Tyres Ltd. was an enlightening journey that bridged the
gap between theoretical concepts and practical application within a dynamic organizational
setting. This section delves into how I connected classroom knowledge to real-world scenarios,
while also providing a comprehensive analysis of my overall learning experience.

6.1 Relating Theoretical Concepts to Practical Experience

The fusion of theoretical knowledge with practical exposure was a defining aspect of my
internship. I found that concepts learned in my academic courses gained new dimensions when
applied to actual business operations. For instance, my understanding of accounting principles
enabled me to effectively verify and post invoices, and critically analyze financial records. This
firsthand application illuminated the significance of accuracy and attention to detail in
maintaining financial integrity.

Moreover, my exposure to Enterprise Resource Planning (ERP) systems, particularly EBS R12,
allowed me to witness the significance of integrated software in streamlining organizational
processes. Theoretical discussions on supply chain management came to life as I observed the
meticulous coordination between production and logistics teams to meet demand efficiently.

6.2 Overall Analysis of Learning Experience

My internship at Diamond Tyres provided an invaluable platform for personal and professional
growth. The experience enhanced my ability to work in a team-driven environment, honed my
communication skills, and allowed me to adapt to various roles within the organization.

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The exposure to different departments underscored the interdependence of functions in a

manufacturing organization. The cross-functional insights I gained during my internship
unveiled the intricacies of how diverse departments collaborate to achieve organizational
objectives. This perspective has broadened my horizons, enabling me to appreciate the holistic
view of business operations.

Furthermore, the hands-on experience in financial transactions instilled a sense of

accountability and precision in my work. The pressure of managing and reconciling funds,
while adhering to internal controls, was both challenging and rewarding. This experience
affirmed the crucial role of financial prudence in maintaining an organization's stability.

Additionally, my interactions with experienced professionals enriched my learning. Their

guidance provided practical insights beyond textbooks, underscoring the importance of
mentorship in professional development.

6.3 Conclusion
In conclusion, my internship at Diamond Tyres was a transformative journey that transcended
theoretical concepts into tangible experiences. The practical application of knowledge, coupled
with exposure to different facets of business operations, has positioned me on a trajectory
towards becoming a well-rounded professional. The insights gained during this internship have
not only augmented my academic foundation but have also cultivated skills that will
undoubtedly contribute to my future career aspirations. My time at Diamond Tyres has
affirmed the value of hands-on learning and deepened my appreciation for the intricate
dynamics that drive success in the manufacturing sector.

7. Work Ethics Observed at the Organization

During my internship at Diamond Tyres Ltd., I had the privilege of observing a strong
commitment to work ethics and a corporate culture that upheld essential social norms. The
organization's values were evident in various aspects of its operations, fostering a harmonious
and productive work environment. This section explores the work ethics and social norms I
observed during my time at the organization.

7.1 Professionalism and Integrity

The cornerstone of Diamond Tyres' work ethics was professionalism and integrity. Employees
demonstrated a high level of professionalism in their interactions, maintaining a respectful and
courteous demeanor. Honesty and transparency were evident in financial transactions,
communication, and decision-making processes. The organization's emphasis on ethical
behavior and accountability permeated every level of its operations.

7.2 Teamwork and Collaboration

Collaboration was an integral component of the work culture at Diamond Tyres. Employees
exhibited a strong sense of teamwork, readily assisting one another to achieve common goals.
Cross-functional interactions were seamless, and departments worked collaboratively to
address challenges and seize opportunities. This commitment to teamwork fostered a sense of

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unity and camaraderie among employees.

7.3 Time Management and Accountability

The organization placed great importance on time management and accountability. Employees
adhered to deadlines, ensuring that tasks were completed efficiently and effectively. Time was
managed judiciously, contributing to a productive work culture. The emphasis on
accountability extended to the quality of work delivered, ensuring that tasks were executed
meticulously.

7.4 Health and Safety Consciousness

Observing stringent health and safety protocols reinforced the organization's commitment to
employee well-being. Whether in the manufacturing facility or office spaces, adherence to
safety measures was a priority. This dedication to maintaining a safe work environment
underscored the organization's value for its employees' health and safety.

7.5 Social Responsibility

Beyond its internal operations, Diamond Tyres demonstrated a strong sense of social
responsibility. The organization's commitment to corporate social responsibility (CSR) was
evident in its initiatives aimed at community development, sustainability, and empowerment.
This holistic approach to business reflected its dedication to making a positive impact beyond
its immediate operations.

My time at Diamond Tyres exposed me to a work culture that adhered to strong work ethics
and upheld essential social norms. The organization's values of professionalism, integrity,
collaboration, diversity, and social responsibility created a nurturing and progressive
environment. These work ethics not only contributed to the organization's success but also left
a lasting impression on me as I witnessed the tangible benefits of fostering a culture grounded
in ethical principles and social awareness.

8. SWOT Analysis
The S.W.O.T. analysis serves an important tool for senior leadership, including heads,
chairpersons, board of directors, and senior managers, to comprehensively evaluate the
multitude of factors impacting their company. This plan entails conducting a S.W.O.T. analysis
that systematically highlights the organization's strengths, weaknesses, opportunities, and
threats. By utilizing insights from this analysis, managers are empowered to devise enhanced
strategies aimed at achieving both short-term and long-term goals, aligning with the
organization's overarching mission. In the subsequent sections, I will elaborate on the key
aspects encompassing each of the four dimensions:
 Strengths
 Weaknesses
 Opportunities
 Threat

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8.1 Strengths

8.1.1 Industry Experience and Reputation

With a history spanning over four decades, Diamond Tyres has established itself as a
prominent player in the tire manufacturing industry. Its reputation for quality products and
reliability contributes to a strong market presence.

8.1.2 State-of-the-Art Manufacturing Facility

Diamond Tyres boasts a modern and advanced manufacturing facility equipped with cutting-
edge technology. This enables efficient production processes, ensuring high-quality tire
manufacturing.

8.1.3 Integrated Supply Chain

The organization's well-structured supply chain management system enables seamless
coordination between production, procurement, and distribution, contributing to timely
deliveries and customer satisfaction.

8.1.4 Skilled Workforce

Diamond Tyres is equipped with a skilled and dedicated workforce that plays a pivotal role in
maintaining production efficiency, product quality, and innovation.

8.2 Weaknesses

8.2.1 Dependency on Raw Materials

Fluctuations in the prices of raw materials, such as rubber and other components, can impact
production costs, potentially affecting the company's profitability.

8.2.2 Limited Geographic Diversification

While Diamond Tyres holds a strong position in the domestic market, there is room for further
expansion into international markets to diversify revenue streams.

8.3 Opportunities

8.3.1 Growing Automobile Industry

The expansion of the automobile industry, both domestically and internationally, presents an
opportunity for Diamond Tyres to tap into increased demand for tires.

8.3.2 Technological Advancements

Embracing emerging technologies in tire manufacturing, such as smart tires and eco-friendly
materials, can position Diamond Tyres as an industry innovator, catering to evolving customer
preferences.

8.3.3 Sustainability Focus

With rising environmental consciousness, there is an opportunity for Diamond Tyres to

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emphasize eco-friendly manufacturing processes and products, catering to a socially

responsible consumer base.

8.3.4 Global Expansion

Exploring new markets and establishing international partnerships can enable Diamond Tyres
to reach a wider customer base and enhance its global footprint.

8.4 Threats

8.4.1 Intense Competition

The tire manufacturing industry is highly competitive, with both local and global players vying
for market share. Intense competition can impact pricing and profit margins.

8.4.2 Economic Uncertainties

Economic fluctuations, inflation, and currency devaluation can impact consumer purchasing
power and influence the demand for tires.

8.4.3 Regulatory Changes

Evolving regulations related to environmental standards, safety requirements, and trade
policies can pose challenges to the company's operations and market access.

8.4.4 Technological Disruption

Rapid technological advancements in the industry can render existing manufacturing processes
and products obsolete, necessitating continuous adaptation and innovation.

In conclusion, the S.W.O.T. analysis for Diamond Tyres highlights its strengths, weaknesses,
opportunities, and threats. By leveraging its strengths, addressing weaknesses, capitalizing on
opportunities, and mitigating threats, Diamond Tyres can strategically position itself to
navigate the complexities of the tire manufacturing industry and achieve sustainable growth.

9. List of Learning Outcomes

9.1 Learning Outcomes

My internship experience at Diamond Tyres Ltd. has been an enriching journey that has left a
profound impact on my personal and professional growth. Through critical assessments and the
application of theoretical concepts, I have gained valuable insights into the organization's
operations, dynamics, and strategic positioning. In this section, I will reflect on the key
learning outcomes that have shaped my internship experience.

One of the most significant learning outcomes of my internship was gaining a deep
understanding of the day-to-day operations within a manufacturing organization. By working
across various departments, I witnessed how each unit collaborates seamlessly to drive the

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organization's overarching goals. This practical exposure illuminated the interconnectedness of

different functions and highlighted the importance of a cohesive approach to achieve success.

The opportunity to apply theoretical concepts learned in academic settings to real-world

scenarios was an eye-opening experience. Through tasks like handling invoices, processing
funds transfer vouchers, performing data entry in EBS R12, and reconciling bank statements, I
bridged the gap between theory and practice. This hands-on application reaffirmed the
relevance of classroom learning in practical business contexts.

Undertaking critical analyses, including the S.W.O.T. analysis, provided me with a holistic
perspective of Diamond Tyres. Evaluating the organization's strengths, weaknesses,
opportunities, and threats within the broader industry landscape enhanced my strategic thinking
abilities. This perspective underscored the importance of aligning internal capabilities with
external market dynamics to drive sustainable growth. Engaging in critical assessments,
particularly the S.W.O.T. analysis, sharpened my analytical thinking. This outcome
empowered me to identify strategic advantages, potential areas for improvement, emerging
opportunities, and external threats. Equipped with this analytical acumen, I am better prepared
to make informed decisions aligned with organizational objectives

In conclusion, my internship at Diamond Tyres Ltd. has been a transformative experience. The
blend of practical exposure, application of theoretical knowledge, and an ethical perspective
has enriched my skill set and broadened my horizons. These learning outcomes are not only a
testament to my academic foundation but also a stepping stone towards a successful career
journey. As I carry forward the lessons learned, I am confident that the insights gained during
my internship will continue to shape my professional endeavors positively.

9.2 Work Place Compatibility

Considering the prospect of joining Diamond Tyres Ltd. for a full-time position, I find myself
contemplating the compatibility between my career aspirations and the organization's work
environment. This evaluation is pivotal in determining whether I would choose to become a
part of the organization or seek opportunities elsewhere.

There are compelling arguments that make Diamond Tyres an attractive option for future
employment:

Organizational Reputation: Diamond Tyres' reputation as one of the leading tire manufacturers
in Pakistan is a significant draw. Joining a well-established and respected organization like
Diamond Tyres would provide a strong foundation for career growth and development.

Industry Exposure: The manufacturing sector is dynamic and challenging. Joining Diamond
Tyres would provide me with an opportunity to immerse myself in the tire manufacturing
industry, gaining firsthand experience of its operations, innovations, and market trends.

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Learning and Growth: The exposure to various departments during my internship has offered a
taste of the diverse roles and responsibilities within the organization. Joining Diamond Tyres
would allow me to further expand my skill set and knowledge, contributing to my personal and
professional growth.

Commitment to Sustainability: Diamond Tyres' emphasis on sustainability aligns with my

values and aspirations. Participating in an organization that emphasizes eco-friendly
manufacturing processes and social responsibility would offer a sense of purpose in my work.

Taking all aspects into account, I am enthusiastic about the prospect of joining Diamond Tyres
Ltd. The alignment of values, growth prospects, and operational exposure makes the
organization an ideal fit for my career aspirations. However, it is essential to consider
alternative paths that provide a broader global outlook and innovation-driven opportunities.
Ultimately, my decision will be guided by a comprehensive evaluation of how well Diamond
Tyres can complement my professional goals and contribute to my journey of continuous
growth and success.

10.Financial Ratios

Statement of Profit or Loss

PROFIT AND LOSS

DIAMOND TYRES LTD.

2018 2019 2020 2021 2022

All amounts in PKR (Millions)

Sales -net 5,202 6,128 7,037 9,427 9,118

Cost of Sales (4,784) (5,655) (6,311) (8,402) (8,430)
Gross Profit 418 473 726 1,025 688

Selling expenses (100) (109) (112) (128) (78)

Administrative and general expenses (93) (113) (148) (167) (168)
(193) (222) (260) (295) (246)

Profit before financial charges 225 251 466 730 442

Financial charges (101) (162) (256) (360) (313)

Other Income 3 11 12 14 2

Profit before taxation 127 100 222 384 130

Taxation (9) (65) (146) (165) (116)

Profit after taxation for the year 118 35 76 220 14

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Statement of Financial Position

Balance Sheet
Diamond Tyres Ltd.

2018 2019 2020 2021 2022

All amounts in PKR (Millions)
NON CURRENT ASSETS
Property, plant and equipment 1,650 2,794 2,821 3,104 3,108
Capital work in progress 41 73 66 18 101
Long Term deposits 9 32 22 14 14
1,700 2,899 2,909 3,136 3,223
CURRENT ASSETS
Stores and spares and loose tools 16 13.2 15.9 26.2 32.3
Stock- in-trade 1,250 1,512 1,750 1,444 2,318
Trade debts 685 704 1,029 1,873 1,011
Advances and pre payments 501 614 605 504 700
Cash and bank balances 82 112 77 111 198
2,534 2,955 3,476 3,958 4,259

TOTAL ASSETS 4,234 5,854 6,385 7,093 7,482

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Authorized capital 375 375 375 375 1,000

Issued, subscribed and paid up capital 300 300 300 300 750
Revenue reserve-un appropriated profit/(loss) 592 1,287 815 984 865
Surplus on revaluation of property, plant and equipment 488 576 1,124 1,175 876
1,380 2,164 2,239 2,459 2,491

LONG TERM LIABILITIES

Long term financing 141 257 346 544 603
Liability against assets subject to finance lease 17 34 103 56 90
Deferred Liabilities 283 612 704 719 711

442 903 1,153 1,319 1,405

CURRENT LIABILITIES

Short term loans 1,695 1,937 1,965 1,871 1,808

Creditors, accrued and other payables 450 611 612 736 1,128
Current portion of long term financing 158 147 297 520 495
Current portion of liabilities against assets
subject to finance lease 53 19 18 47 41
Provision for taxation 58 74 102 141 114
2,413 2,788 2,993 3,315 3,587

TOTAL EQUITY AND LIABILITIES 4,234 5,854 6,385 7,093 7,482

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10.1 Asset to Equity Ratio:

(Amount is in PKR Million)
Total-Assets
Total Equity

Year Total Assets Total Equity Ratio (times)

2018 4,234 1,380 3.07
2019 5,854 2,164 2.71
2020 6,385 2,239 2.85
2021 7,093 2,459 2.89
2022 7,482 2,491 3.00

Interpretation
The Asset to Equity Ratio, also known as the Equity Multiplier, measures the relationship
between a company's total assets and shareholders' equity. It indicates how much in assets the
company can support with each unit of equity. Here's the interpretation for the years 2018 to
2022:
2018: The ratio was 3.07, indicating that for each PKR 1 in equity, the company had PKR 3.07
in total assets. This suggests a relatively high reliance on debt financing, which can increase
financial risk.
2019: In 2019, the ratio decreased to 2.71, implying a reduced reliance on debt compared to the
previous year. This could be seen as a positive sign, indicating lower financial risk.
2020: The ratio increased slightly to 2.85 in 2020, suggesting a moderate uptick in debt
reliance compared to 2019.
2021: It reached 2.89 in 2021, indicating relatively stable debt-to-equity reliance compared to
the previous year.
2022: The ratio rose to 3.00 in 2022, signifying an increased reliance on debt financing. This
could amplify returns but also elevate financial risk.
The trend shows a gradual increase in the Asset to Equity Ratio over the years, indicating a
growing reliance on debt to support assets. While higher ratios can enhance returns, they also
elevate financial risk due to increased interest expenses and repayment obligations. Thus, the
company must carefully balance debt and equity financing to maintain a healthy financial
structure and manage risk effectively.

10.2 Total Asset to Debt Ratio:

(Amount is in PKR Million)

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Total-Assets
Total Debt

Year Total Assets Total Debt Ratio (times)

2018 4,234 2,064 2.05
2019 5,854 2,393 2.45
2020 6,385 2,728 2.34
2021 7,093 3,037 2.34
2022 7,482 3,038 2.46

Interpretation
The Total Asset to Debt Ratio is a crucial financial metric that assesses the proportion of a
company's total assets that are financed by debt. Here's the interpretation for the years 2018 to
2022:
In 2018, the Total Asset to Debt Ratio was 2.05 times. This implies that for every PKR 1 in
debt, the company had PKR 2.05 in total assets. A ratio above 1 indicates that the company
relied on debt financing. This moderate ratio suggests a reasonably balanced approach, with a
significant portion of assets financed by equity.
In 2019, the ratio increased to 2.45 times, signifying a higher reliance on debt compared to the
previous year. This could be due to increased borrowing for expansion or operational needs.
While a rising ratio can signal growth, it also elevates financial risk due to increased debt
obligations.
The ratio slightly decreased to 2.34 times in 2020. This suggests that the company reduced its
reliance on debt financing compared to 2019. Such a decrease might indicate a strategic move
to lower financial risk or a shift towards equity-based financing.
In 2021, the ratio remained constant at 2.34 times, indicating a consistent reliance on debt. This
stability suggests that the company maintained its debt-to-asset financing structure from the
previous year.
The ratio increased marginally to 2.46 times in 2022. This uptick reflects a slightly higher
reliance on debt financing to support the company's assets. An increased ratio can potentially
fuel growth but also heightens financial risk due to additional debt-related costs.

The trend over these five years demonstrates fluctuations in the Total Asset to Debt Ratio.
While it remained relatively balanced in the early years, the DTL started relying more on debt
in 2019. The subsequent years showed fluctuations, with a slight increase in 2022. These
changes in the debt ratio highlight the evolving financial strategy of Diamond Tyres Limited.
It's important to note that a well-balanced ratio is often preferred to manage financial risk
effectively while pursuing growth opportunities.

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10.3 Current Ratio:

(Amount is in PKR Million)
Current-Assets
Current Liabilities
Year Current Assets Current Liabilities Ratio (times)
2018 2,534 2,413 1.05
2019 2,955 2,788 1.06
2020 3,476 2,993 1.16
2021 3,958 3,315 1.19
2022 4,259 3,587 1.187

Interpretation
The Current Ratio is a fundamental liquidity ratio that assesses a company's ability to meet its
short-term financial obligations using its current assets. Here's the interpretation for the years
2018 to 2022:
In 2018, the Current Ratio was 1.05 times, indicating that for every PKR 1 of current liabilities,
the company had PKR 1.05 in current assets. This suggests that the company had just enough
current assets to cover its short-term liabilities. While it's above 1, which is often considered
the minimum acceptable level, it signifies a relatively tight liquidity position.
The ratio increased slightly to 1.06 times in 2019. This indicates a modest improvement in
liquidity as the company had slightly more current assets to cover its short-term obligations.
However, it remained relatively close to the minimum acceptable level.
In 2020, the Current Ratio rose to 1.16 times, indicating an improved liquidity position. The
company had more current assets available to meet its short-term liabilities, suggesting a
stronger ability to cover immediate financial obligations.
The ratio continued to increase to 1.19 times in 2021. This demonstrates further improvement
in liquidity. The company had a comfortable buffer of current assets to meet its short-term
financial commitments.
In 2022, the Current Ratio was 1.187 times, which is similar to the previous year. While it
remained above 1, indicating that the company can cover its short-term obligations, it was
slightly lower than 2021. This suggests a relatively stable but slightly reduced liquidity
position.
The trend over these five years reflects a gradual improvement in Diamond Tyres Limited's
liquidity position. Although the Current Ratio remained above the minimum acceptable level of
1, it came close to this threshold in earlier years. The increasing trend from 2018 to 2021
indicates that the company was gradually strengthening its ability to cover short-term
liabilities. However, the slight dip in 2022 suggests that the company may have utilized some
of its current assets for other purposes or had increased short-term obligations.

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10.4 Quick Ratio:

(Amount is in PKR Million)
Current Assets - Inventory

Current Liabilities

Year Current Assets - Current Liabilities Ratio (times)

Inventory
2018 1,284 2,413 0.53
2019 1,443 2,788 0.52
2020 1,726 2,993 0.58
2021 2,514 3,315 0.76
2022 1,941 3,587 0.54

Interpretation
The Quick Ratio, also known as the Acid-Test Ratio, is a measure of a company's short-term
liquidity and ability to meet immediate financial obligations without relying on the sale of
inventory. Here's the interpretation for the years 2018 to 2022:
In 2018, the Quick Ratio was 0.53 times, indicating that for every PKR 1 of current liabilities,
the company had PKR 0.53 in highly liquid assets after deducting inventory. This suggests that
the company had limited quick assets to cover its short-term obligations, which could be a
cause for concern.
The ratio slightly decreased to 0.52 times in 2019, indicating a further reduction in the
availability of highly liquid assets compared to short-term liabilities. This suggests that the
company's liquidity position weakened in this year.
In 2020, the Quick Ratio increased to 0.58 times, signifying a slight improvement in liquidity.
The company had slightly more quick assets available to meet its immediate financial
obligations.
The ratio saw a significant improvement in 2021, rising to 0.76 times. This indicates a
substantially improved liquidity position. The company had a more comfortable buffer of quick
assets to cover short-term liabilities, which is a positive sign.
In 2022, the Quick Ratio dropped to 0.54 times, showing a slight decrease in the availability of
quick assets to cover short-term liabilities compared to the previous year. While it remained
above 0.5, it was lower than the previous year.
The trend over these five years indicates fluctuations in Diamond Tyres Limited's ability to
meet short-term obligations using highly liquid assets. The significant improvement in 2021
suggests that the company took measures to enhance its liquidity position. However, the drop
in 2022 indicates a potential reduction in quick assets or an increase in short-term liabilities

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10.5 Debt to Equity Ratio:

(Amount is in PKR Million)
Debt
Equity

Year Total Debt Total Equity Ratio (times)

2018 2,064 1,380 1.50
2019 2,393 2,164 1.11
2020 2,728 2,239 1.22
2021 3,037 2,459 1.24
2022 3,038 2,491 1.22

Interpretation
The Debt to Equity Ratio measures the proportion of a company's financing that comes from
debt compared to equity. It's a crucial indicator of the company's financial leverage and risk.
Here's the interpretation of the Debt to Equity Ratio for the years 2018 to 2022:
In 2018, the Debt to Equity Ratio was 1.50 times, indicating that for every PKR 1 of equity, the
company had PKR 1.50 in debt. This signifies a higher reliance on debt financing compared to
equity. It implies higher financial risk due to increased interest expenses and repayment
obligations.
The ratio decreased significantly to 1.11 times in 2019, suggesting a reduced reliance on debt
compared to the previous year. This reduction in financial leverage can be viewed positively as
it indicates lower financial risk.
In 2020, the ratio increased slightly to 1.22 times, indicating a moderate uptick in the
company's reliance on debt financing compared to 2019. However, it remained below the 2018
level, suggesting a relatively balanced financing structure.
The ratio in 2021 was 1.24 times, indicating a relatively stable debt-to-equity reliance
compared to the previous year. It suggests that the company maintained a similar financing
structure.
In 2022, the ratio remained at 1.22 times, signifying a consistent reliance on debt financing
compared to the previous year.
The trend over these five years indicates variations in the extent to which Diamond Tyres
Limited relies on debt financing. The significant reduction in 2019 suggests a move towards a
more balanced capital structure, lowering financial risk. Subsequent years saw relatively stable
levels of debt reliance.

10.6 Interest Coverage Ratio:

(Amount is in PKR Million)
PBIT .

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Interest Charges

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Year PBIT Interest Charges Ratio (times)

2018 225 101 2.23
2019 251 162 1.55
2020 466 256 1.82
2021 730 360 2.03
2022 442 313 1.41

Interpretation
The Interest Coverage Ratio, also known as the Times Interest Earned (TIE) ratio, assesses a
company's ability to meet its interest payments on outstanding debt. It's a crucial indicator of a
company's financial health and its capacity to manage its debt obligations. Here's the
interpretation of the Interest Coverage Ratio for the years 2018 to 2022:
In 2018, the Interest Coverage Ratio was 2.23 times, indicating that the company generated
2.23 times more operating profit (PBIT) than the interest charges on its debt. This suggests that
Diamond Tyres Limited had a comfortable margin to cover its interest expenses.
The ratio decreased to 1.55 times in 2019, indicating a lower ability to cover interest expenses
compared to the previous year. While still above 1, it suggests a slight reduction in financial
stability.
In 2020, the ratio improved to 1.82 times, suggesting a better ability to cover interest costs
compared to 2019. However, it remained below the 2018 level, indicating that the company
continued to manage its interest obligations but with a reduced margin.
The ratio increased to 2.03 times in 2021, indicating a stronger ability to cover interest charges.
This is a positive sign, suggesting improved financial stability.
In 2022, the ratio decreased to 1.41 times, indicating a reduced ability to cover interest
expenses compared to the previous year. While it remained above 1, it suggests that the
company faced slightly higher financial risk in terms of meeting its interest obligations.
The trend over these five years reflects fluctuations in Diamond Tyres Limited's ability to
cover its interest charges. The company exhibited relatively strong interest coverage in 2018,
which dipped in 2019, improved in 2020, and reached its highest point in 2021. However, it
declined in 2022. The variations observed in this ratio over the years reflect changes in the
company's financial stability and risk management.

10.7 Stock Turnover Ratio:

(Amount is in PKR Million)
…… Cost of Sale

Avg. Inventory

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Year Cost of Sale Avg. Inventory Ratio (times)

2018 4,784 1,381 3.46
2019 5,655 1,631 3.47
2020 6,311 1,597 3.95
2021 8,402 1,881 4.47
2022 8,430 2,318 3.64

Interpretation
The Stock Turnover Ratio evaluates how efficiently a company manages its inventory by
measuring how many times it sells and replaces its average inventory during a specific period.
Here's the interpretation of the Stock Turnover Ratio for the years 2018 to 2022:
In 2018, the Stock Turnover Ratio was 3.46 times, indicating that Diamond Tyres Limited sold
and replaced its average inventory approximately 3.46 times during the year. This suggests
efficient inventory management and a relatively quick turnover.
The ratio remained consistent in 2019 at 3.47 times, indicating that the company maintained
efficient inventory turnover similar to the previous year.
In 2020, the ratio increased to 3.95 times, reflecting a faster turnover of inventory compared to
the previous two years. This suggests that Diamond Tyres Limited effectively managed its
inventory during this period.
The ratio further improved to 4.47 times in 2021, indicating even more efficient inventory
management. This suggests that the company successfully reduced the time its products spent in
inventory, which can positively impact cash flow and profitability.
In 2022, the ratio decreased slightly to 3.64 times, indicating a slightly slower inventory turnover
compared to 2021. However, it remained relatively high, suggesting that the company continued
to manage its inventory efficiently.
The trend in the Stock Turnover Ratio over these five years reflects Diamond Tyres Limited's
effectiveness in managing its inventory. A higher ratio generally indicates efficient inventory
management, which can lead to improved cash flow and reduced carrying costs. The company
demonstrated consistent efficiency from 2018 to 2021, with a peak in 2021, indicating a strong
ability to manage its inventory effectively. The slight decrease in 2022 suggests a minor
slowdown in inventory turnover, but it still remains at a reasonable level. The variations in this
ratio demonstrate Diamond Tyres Limited's commitment to effective inventory management over
the years.

10.8 Receivables Turnover Ratio:

(Amount is in PKR Million)
Net Credit Sales

Receivables

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Year Net Credit Sales Receivables Ratio (times)

2018 4,422 685 6.46
2019 5,209 704 7.34
2020 5,982 1,029 5.81
2021 8,013 1,873 4.28
2022 7,750 1,011 7.67

Interpretation
The Receivables Turnover Ratio measures how efficiently a company manages its accounts
receivable by assessing how many times it collects outstanding payments during a specific
period. Here's the interpretation of the Receivables Turnover Ratio for the years 2018 to 2022:
In 2018, the Receivables Turnover Ratio was 6.46 times, indicating that Diamond Tyres
Limited collected outstanding payments approximately 6.46 times during the year. This suggests
that the company efficiently managed its accounts receivable, with relatively quick collections.
The ratio increased to 7.34 times in 2019, signifying an improvement in accounts receivable
management. The company collected outstanding payments even more efficiently compared to
the previous year.
In 2020, the ratio decreased slightly to 5.81 times, indicating a slightly slower rate of collections
compared to 2019. However, it still reflects efficient accounts receivable management.
The ratio further decreased to 4.28 times in 2021, suggesting a slower rate of collections
compared to the previous years. While it remained above 4 times, it indicates that Diamond
Tyres Limited took more time to collect outstanding payments during this period.
In 2022, the ratio significantly improved to 7.67 times, indicating a return to more efficient
accounts receivable management. The company collected outstanding payments at a faster rate
compared to 2021.
The trend in the Receivables Turnover Ratio over these five years reveals fluctuations in
Diamond Tyres Limited's ability to manage its accounts receivable efficiently. The peak in 2019
indicated excellent efficiency, while the dip in 2021 suggested a temporary slowdown in
collections. However, the substantial improvement in 2022 suggests that the company
successfully addressed this issue and returned to efficient accounts receivable management. The
variations in this ratio reflect Diamond Tyres Limited's adaptability and responsiveness to
changes in its receivables management processes.

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10.9 Payables Turnover Ratio:

(Amount is in PKR Million)
Net Credit Purchases

Payables

Year Credit Purchases Payables Ratio (times)

2018 4,306 450 9.57
2019 5,089 611 8.33
2020 5,680 612 9.28
2021 7,562 736 10.27
2022 7,587 1128 6.73

Interpretation
The Payables Turnover Ratio assesses how efficiently a company manages its accounts payable
by measuring how many times it pays off its outstanding bills during a specific period. Here's the
interpretation of the Payables Turnover Ratio for the years 2018 to 2022.
In 2018, the Payables Turnover Ratio was 9.57 times, indicating that Diamond Tyres Limited
paid off its outstanding bills approximately 9.57 times during the year. This suggests efficient
management of accounts payable, with relatively quick payments.
The ratio decreased slightly to 8.33 times in 2019, indicating a slightly slower rate of bill
payments compared to the previous year. However, it still reflects efficient management of
accounts payable.
In 2020, the ratio increased to 9.28 times, signifying improved accounts payable management.
The company paid off its outstanding bills more efficiently compared to 2019.
The ratio further increased to 10.27 times in 2021, indicating a faster rate of bill payments
compared to the previous years. This reflects highly efficient accounts payable management
during this period.
In 2022, the ratio decreased to 6.73 times, suggesting a slowdown in bill payments compared to
2021. While it decreased, it still indicates reasonably efficient management of accounts payable.
The trend in the Payables Turnover Ratio over these five years shows variations in Diamond
Tyres Limited's ability to manage its accounts payable efficiently. The peak in 2021 indicated
excellent efficiency in paying off outstanding bills, while the dip in 2022 suggested a temporary
slowdown in bill payments. The fluctuations in this ratio reflect Diamond Tyres Limited's
adaptability and responsiveness to changes in its accounts payable management processes.

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10.10 Working Capital Turnover Ratio:

(Amount is in PKR Million)
Operating Profit
Working Capital

Year Operating Profit Working Capital Ratio (times)

2018 225 121 1.86
2019 251 168 1.50
2020 466 483 0.96
2021 730 642 1.14
2022 442 672 0.66

Interpretation
The Working Capital Turnover Ratio measures how efficiently a company utilizes its working
capital to generate operating profits. Here's the interpretation of the Working Capital Turnover
Ratio for Diamond Tyres Limited for the years 2018 to 2022:
In 2018, the Working Capital Turnover Ratio was 1.86 times, indicating that Diamond Tyres
efficiently used its working capital to generate operating profits. This suggests that for every
PKR 1 invested in working capital, the company generated PKR 1.86 in operating profit.
The ratio decreased to 1.50 times in 2019, signifying a slightly less efficient utilization of
working capital compared to the previous year. However, it still reflects a reasonably effective
use of working capital to generate profits.
In 2020, the ratio dropped significantly to 0.96 times, indicating a less efficient use of working
capital. The company generated less operating profit relative to its working capital investment,
which could be a sign of inefficiency or challenging market conditions.
The ratio increased to 1.14 times in 2021, suggesting improved efficiency in using working
capital to generate operating profit. The company experienced a better utilization of its working
capital during this period.
In 2022, the ratio decreased to 0.66 times, indicating a less efficient use of working capital
compared to the previous year. The company generated significantly less operating profit relative
to its working capital investment.
The trend in the Working Capital Turnover Ratio reveals fluctuations in Diamond Tyres
Limited's ability to generate operating profit from its working capital over the five-year period.
While the ratio peaked in 2018, it experienced significant declines in 2020 and 2022, suggesting
potential challenges in managing working capital efficiency during those years. Efficient

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working capital management is vital for sustaining operations and supporting growth. The
fluctuations in this ratio reflect Diamond Tyres Limited's adaptability and responsiveness to
changes in working capital management practices and market conditions.

10.11 Gross Profit Ratio:

(Amount is in PKR Million)
Gross Profit
Sales

Year Gross Profit Sales Ratio (%)

2018 418 5,202 8.04
2019 473 6,128 7.72
2020 726 7,037 10.32
2021 1,025 9,427 10.87
2022 688 9,118 7.55

Interpretation
The Gross Profit Ratio measures the percentage of profit a company generates from its sales after
deducting the cost of goods sold (COGS). Here's the interpretation of the Gross Profit Ratio for
Diamond Tyres Limited for the years 2018 to 2022:
In 2018, the Gross Profit Ratio was 8.04%. This indicates that for every PKR 100 in sales, the
company had a gross profit of PKR 8.04 after accounting for the cost of goods sold.
The ratio decreased slightly to 7.72% in 2019, suggesting that the company's gross profit margin
was slightly lower compared to the previous year.
In 2020, the Gross Profit Ratio increased significantly to 10.32%, indicating a higher gross profit
margin. This could be attributed to various factors such as cost management or changes in
product pricing.
The ratio continued to increase in 2021, reaching 10.87%. This suggests that Diamond Tyres
improved its gross profit margin further during this year, which can be a positive sign for
profitability.
In 2022, the ratio decreased to 7.55%, indicating a lower gross profit margin compared to the
previous year. This reduction could be due to various factors like increased COGS or changes in
pricing strategies.
The trend in the Gross Profit Ratio shows fluctuations in Diamond Tyres Limited's ability to
maintain consistent gross profit margins over the five-year period. While the ratio peaked in

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2021, it decreased in 2022, suggesting potential challenges in maintaining profitability. The

fluctuations in this ratio highlight the dynamic nature of Diamond Tyres' financial performance
and its ability to adapt to changing market conditions.

10.12 Operating Profit Ratio:

(Amount is in PKR Million)
Operating Profit
Sales

Year Operating Profit Sales Ratio (%)

2018 225 5,202 4.33
2019 251 6,128 4.09
2020 466 7,037 6.62
2021 730 9,427 12.91
2022 442 9,118 4.85

Interpretation
The Operating Profit Ratio, also known as the Operating Margin or Return on Sales, measures
the percentage of operating profit generated from sales. Here's the interpretation of the Operating
Profit Ratio for Diamond Tyres Limited for the years 2018 to 2022:
In 2018, the Operating Profit Ratio was 4.33%. This indicates that for every PKR 100 in sales,
the company had an operating profit of PKR 4.33. This suggests that the company had a
moderate operating profit margin.
The ratio decreased slightly to 4.09% in 2019, indicating a slightly lower operating profit margin
compared to the previous year. This may be due to changes in operating expenses or other
factors.
In 2020, the Operating Profit Ratio increased significantly to 6.62%, suggesting an improved
operating profit margin. This could be due to factors like cost management or increased sales.
The ratio saw a substantial increase in 2021, reaching 12.91%. This signifies a significant
improvement in the company's operating profit margin, indicating more efficient operations or
higher sales prices.
In 2022, the ratio decreased to 4.85%, indicating a lower operating profit margin compared to the
previous year. This reduction could be attributed to various factors like increased operating
expenses or changes in sales mix.

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The trend in the Operating Profit Ratio shows fluctuations in Diamond Tyres Limited's ability to
maintain consistent operating profit margins over the five-year period. While the ratio peaked in
2021, it decreased in 2022, indicating potential challenges in maintaining high operating
profitability.

10.13 Net Profit Ratio

(Amount is in PKR Million)
Net Profit
Sales

Year Net Profit Sales Ratio (%)

2018 118 5,202 2.27
2019 35 6,128 0.57
2020 76 7,037 1.08
2021 220 9,427 2.33
2022 14 9,118 0.15

Interpretation
The Net Profit Ratio, also known as the Net Profit Margin, measures the percentage of net profit
earned from sales. Here's the interpretation of the Net Profit Ratio for Diamond Tyres Limited
for the years 2018 to 2022:
In 2018, the Net Profit Ratio was 2.27%. This indicates that for every PKR 100 in sales, the
company had a net profit of PKR 2.27. This suggests a relatively low net profit margin, which
could be due to various factors such as operating expenses, interest costs, or taxes.
The ratio decreased significantly to 0.57% in 2019, indicating a lower net profit margin
compared to the previous year. This suggests that the company faced challenges in maintaining
profitability relative to its sales.
In 2020, the Net Profit Ratio improved to 1.08%, indicating a slightly better net profit margin.
This could be due to cost management efforts or changes in the company's revenue and expense
structure.
The ratio saw a substantial increase in 2021, reaching 2.33%. This signifies a significant
improvement in the company's net profit margin, indicating more efficient operations or higher
profitability relative to sales.
In 2022, the ratio decreased significantly to 0.15%, indicating a much lower net profit margin
compared to the previous year. This reduction suggests that the company's net profit relative to
its sales was substantially lower.

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The trend in the Net Profit Ratio reflects significant fluctuations in Diamond Tyres Limited's
ability to generate consistent net profits relative to its sales over the five-year period. While the
ratio reached its highest point in 2021, it decreased significantly in 2022, indicating potential
challenges in maintaining high profitability.
10.14 Earning Per Share
(Amount is in PKR Million)
Net Profit
No. of Shares

Year Net Profit No. of Shares Ratio (per

share)
2018 118 30 3.93
2019 35 30 1.16
2020 76 30 2.53
2021 220 75 2.33
2022 14 75 0.18

Interpretation
The Earnings Per Share (EPS) measures the portion of a company's profit allocated to each
outstanding share of common stock. Here's the interpretation of the EPS for Diamond Tyres
Limited for the years 2018 to 2022:
In 2018, the company reported earnings of PKR 118 million, and with 30 million shares
outstanding, the EPS was PKR 3.93 per share. This suggests that for each share of common
stock, the company generated a profit of PKR 3.93.
In 2019, the EPS decreased to PKR 1.16 per share. This indicates a significant decline in
earnings per share compared to the previous year, possibly due to various factors affecting net
profit.
The EPS improved to PKR 2.53 per share in 2020, signifying a recovery in profitability
compared to 2019. This could be attributed to cost management or changes in the company's
financial performance.
In 2021, the EPS was PKR 2.33 per share, suggesting relatively stable earnings compared to
2020 despite potential market challenges.
However, in 2022, the EPS dropped significantly to PKR 0.18 per share, indicating a
substantial decline in profitability relative to the number of shares outstanding.
The trend in EPS reflects the company's ability to generate earnings per share for its
shareholders. While the EPS saw fluctuations over the five-year period, it's crucial to consider
the factors that influenced these changes, such as variations in net profit and the number of
shares outstanding.

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10.15 Return on Assets

(Amount is in PKR Million)
Net Profit
Total Assets

Year Net Profit Total Assets Ratio (%)

2018 118 4,234 2.78
2019 35 5,854 0.60
2020 76 6,385 1.19
2021 220 7,093 3.10
2022 14 7,482 0.19

Interpretation
The Return on Assets (ROA) is a key financial ratio that measures a company's ability to
generate profit from its total assets. Here's the interpretation of ROA for Diamond Tyres
Limited for the years 2018 to 2022:
In 2018, the ROA was 2.78%, indicating that for every PKR 100 in total assets, the company
generated a profit of PKR 2.78. This suggests a relatively efficient use of assets to generate
earnings.
In 2019, the ROA decreased significantly to 0.60%. This drop signifies that the company's
ability to generate profit from its assets declined substantially compared to the previous year. It
may be due to various factors affecting net profit and asset utilization.
The ROA improved to 1.19% in 2020, indicating a recovery in the company's profitability
relative to its total assets. This could be attributed to improved financial performance or more
efficient asset utilization.
In 2021, the ROA increased substantially to 3.10%. This suggests that the company
significantly enhanced its ability to generate profit from its assets during this year, possibly
through improved operational efficiency or higher net profit.
However, in 2022, the ROA dropped sharply to 0.19%, indicating a substantial decrease in
profitability relative to total assets.
The trend in ROA reflects the company's efficiency in using its assets to generate profit. The
fluctuations in ROA over the five-year period suggest variations in the company's financial
performance. High ROA values indicate efficient asset utilization and profitability, while low
values may indicate inefficiencies or challenges in generating profit from assets.

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10.16 Return on Equity

(Amount is in PKR Million)
Net Profit
Shareholders’ Equity

Year Net Profit Shareholders’ Equity Ratio (%)

2018 118 1,380 8.55
2019 35 2,164 1.62
2020 76 2,239 3.39
2021 220 2,459 8.95
2022 14 2,491 0.56

Interpretation
The Return on Equity (ROE) is a crucial financial ratio that evaluates a company's ability to
generate profit relative to its shareholders' equity. Here's the interpretation of ROE for Diamond
Tyres Limited for the years 2018 to 2022:
In 2018, the ROE was 8.55%, signifying that the company generated a return of 8.55% on
shareholders' equity. This indicates efficient use of equity capital to generate profit.
In 2019, the ROE decreased significantly to 1.62%. This sharp drop indicates a substantial
reduction in the company's ability to generate profit from shareholders' equity during that year.
The ROE improved to 3.39% in 2020, indicating a recovery in the company's profitability
relative to shareholders' equity. However, it was still lower than the 2018 level.
In 2021, the ROE increased significantly to 8.95%. This suggests that the company significantly
enhanced its ability to generate profit from shareholders' equity during this year, possibly
through improved net profit or more efficient use of equity capital.
However, in 2022, the ROE dropped sharply to 0.56%, indicating a substantial decrease in
profitability relative to shareholders' equity.
The trend in ROE reflects the company's efficiency in generating profit from shareholders'
equity. The fluctuations in ROE over the five-year period highlight variations in the company's
financial performance. High ROE values indicate effective use of equity capital, while low
values may suggest inefficiencies or challenges in generating profit from equity.

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10.16 Interpretation and Conclusion – Financial Analysis

Diamond Tyres Ltd. has been subject to a comprehensive financial analysis through various key
ratios over the five-year period from 2018 to 2022 reveals several key insights about the
company's financial performance and stability.
Liquidity Ratios: The Current Ratio consistently stayed above 1, indicating the company's ability
to meet its short-term obligations. It showed a positive trend, reflecting improved liquidity over
the years. The Quick Ratio, while fluctuating, generally maintained a reasonable level,
suggesting the ability to cover short-term liabilities without relying heavily on inventory.
Activity Ratios: The company's inventory management efficiency has declined from 5.82 times
in 2021 to 3.64 times in 2022. This might indicate potential challenges in managing inventory
levels effectively.
Solvency Ratios: The Debt to Equity Ratio remained relatively stable over the years, with values
around 1.2. This indicates that the company maintained a balanced capital structure, relying on a
mix of debt and equity financing. The Interest Coverage Ratio exhibited fluctuations but
generally remained above 1, implying the company's capacity to cover its interest expenses from
operating profits.
Efficiency Ratios: The Stock Turnover Ratio decreased significantly from 2019 to 2022,
reflecting that Diamond Tyres took more time to sell its inventory. This could be due to changes
in demand or inventory management practices. The Receivables Turnover Ratio displayed a
mixed trend but generally increased, indicating improved efficiency in collecting outstanding
payments from customers. The Payables Turnover Ratio decreased from 2018 to 2022,
suggesting that the company took longer to pay its suppliers, potentially to improve its cash flow
position. The Working Capital Turnover Ratio decreased over the years, indicating a decline in
the efficiency of using working capital to generate operating profits.
Profitability Ratios: Gross Profit Ratio showed fluctuations but remained within a reasonable
range, indicating efficient cost management. Operating Profit Ratio fluctuated but showed a
positive trend overall, reflecting improved operational efficiency. Net Profit Ratio, while
fluctuating, generally remained low, indicating a relatively low profitability compared to total
sales.
Market Ratios: Earnings Per Share (EPS) displayed fluctuations but generally remained low,
which may affect investor confidence. Return on Assets (ROA) fluctuated significantly,
indicating variations in the company's ability to generate profit relative to its total assets. Return
on Equity (ROE) showed substantial fluctuations, reflecting changes in the company's
profitability relative to shareholders' equity.
In summary, Diamond Tyres Limited maintained reasonable liquidity and solvency throughout
the five years, with fluctuations in efficiency and profitability ratios. The company's ability to
generate profit and efficiently manage its resources experienced variations. These fluctuations

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could be attributed to various factors, including market conditions, industry dynamics, and the
company's strategic decisions.

References
 Diamondgroup.com.pk
 DTL Annual Audited Reports
 https://www.investopedia.com/terms/r/ratioanalysis.asp#:~:text=Investopedia%20%2F
%20Theresa%20Chiechi-,What%20Is%20Ratio%20Analysis%3F,cornerstone%20of
%20fundamental%20equity%20analysis.

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