Suzuki 2008 Annual Report Download - page 26

SUZUKI MOTOR CORPORATION 25
Financial Review
(3) Selling, general and administrative expenses
In this fiscal year, the amount of selling, general and administrative expenses increased by 69,106 million yen to
721,134 million yen. The expense of dispatch, advertising, sales promotion increased according to increase of sales. Also
R&D expenses increased due to development of new product, advanced safety technology, next generation vehicle such
as fuel cell vehicle, etc.
(4) Other income and expenses
In this fiscal year, the net amount of other income and expenses was a profit of 8,058 million yen, while in the previous
fiscal year net profit was 5,832 million yen. Due to increase of interest income, profit on sale of fixed assets and decrease of
impairment loss of fixed assets to zero against 796 million yen in the previous year, the net profit of this fiscal year increased
by 2,226 million yen against previous fiscal year.
(5) Outlook for results in the next fiscal year
Though business environment is being severe due to sharp appreciation of the yen and increase in material price, etc.,
the Suzuki Group will work all together for innovation in every area to achieve the target of consolidated sales of 3,500 billion
yen, consolidated operating income of 140 billion yen, consolidated ordinary income of 150 billion yen and consolidated net
income of 80 billion yen.
The above is based on the anticipated foreign exchange rate of 1 US dollar = 102 yen (first half: 1 US$ = 110 yen,
second half: 1 US$ = 95 yen) and 1 Euro = 155 yen (first half: 1 Euro = 160 yen, second half: 1 Euro = 150 yen).
*The outlook for business results in the next fiscal year, which is estimated based on the current information available
and assumption, includes risk and uncertainty. It is requested, therefore, to understand that the actual results may
extensively vary by the change of many factors. Those factors, which may influence the actual results, include
economic conditions and the trend of demand in major markets and the fluctuation of foreign exchange rate (mainly
Yen/US dollar rate, Yen/Euro rate).
2. Liquidity and capital resources
(1) Situation of cash flow
The net cash provided by operating activities decreased to 194,039 million yen. This is 8,154 million yen less than the
previous fiscal year due to a increase of inventories and income taxes paid while income before tax and depreciation and
amortization expenses increased against the previous fiscal year.
The net cash used in investing activities increased by 16,447 million yen to 215,921 million yen. This is more than the
previous fiscal year due to an increase in expenditure for the purchase of tangible fixed assets.
The net cash provided by financing activities decreased by 173,967 million yen to 49,322 million yen. This is less than
the previous fiscal year in which the company issued convertible bonds of 150,000 million yen.
As a result, the balance of cash and cash equivalents at the end of this fiscal year increased by 12,034 million yen to
456,369 million yen compared with the previous fiscal year.
(2) Demand for money
During this fiscal year, the Company and the major subsidiaries and affiliates invested a total 243,604 million yen on a
number of initiatives, such as new model production, production volume increase, rationalization, R&D for new models and
technical innovation, distribution, sales channel and IT related investments. These costs were covered by our own funds
and issuance of convertible bonds.
Planned capital expenditure spending for the next fiscal year is 290,000 million yen. These costs will be covered mainly
by our own funds.
3. Significant accounting policies
For information regarding significant accounting policies, please refer to the Notes to Consolidated Financial Statements.
FY 2008 Outlook FY 2007 actual
Net sales 3,500 billion yen 3,502 billion yen
Operating income 140 billion yen 149 billion yen
Net income 80 billion yen 80 billion yen
Exchange Rate 1 US dollar = 102 yen 1 US dollar = 114 yen
1 Euro = 155 yen 1 Euro = 160 yen