AMITY BUSINESS SCHOOL

AMITY UNIVERSITY
UTTAR PRADESH

PROJECT
ON
TREND ANALYSIS
OF
MARUTI SUZUKI INDIA LTD.
SUBMITTED TO: SUBMITTED BY:
Mr. SUMIT SINGH JAISIAL NEHA GHILDIYAL D O4
FACULTY MEGHA SHARMA D 09
(QUANTITATIVE POOJA SARIN D 12
APPLICATIONS NIDHI MEHTA D 34
IN MANAGEMENT) MEDHA D 38
UMA YADAV D43

Page 1 of 31
 ACKNOWLEDGEMENT
We would like to express our sincerest gratitude to all the people who
have contributed towards the successful completion of our project.

We would like to extend our heartfelt thanks to our faculty Mr. Sumit
Singh Jasial for nurturing a congenial yet competitive environment in
the department, which motivates all students to pursue higher goals. Our
sincere thanks for his guidance and expertise in making this project a
reality.

Last but not the least, we would like to extend our thanks to all the
teaching and non-teaching staff members of our department, and to all
our colleagues who helped us with the ever daunting task of gathering
information for the completion of project.

Page 2 of 31
 CERTIFICATE
This is certify that the major project report entitled “Trend Analysis of
Maruti Suzuki India Limited” has been submitted to Amity Business
School, Amity University, Noida by mutual cooperation of Neha
Ghildiyal (Roll No: - D 04), Uma Yadav (Roll No: -D 43), Nidhi Mehta
(Roll. No: - D 34), Medha (Roll. No:-D 38), Megha Sharma (Roll No: - D
09), Pooja Sarin (Roll No: - D 12) in partial fulfillment for the award of the
degree, Master of Business Administration in Human Resource.

Mr. Sumit Singh Jasial Dr. Parul Jhajaria

Faculty H.O.D (HumanResource)
Quantitative Applications in Mgmt.

13/10/2008

Page 3 of 31
 TABLE OF CONTENTS

S.NO. TOPICS PAGE NO.

1. Introduction: Project Overview 5–7

2. About the company: Maruti Suzuki 8 – 13

India Limited
3. Problem Faced 14

4. Various methods of Trend Analysis 14 - 24

5. Solutions to the Problems 25

6. Limitations of the Applied Methods 26 – 28

7. Appendix 29 - 30

8. Bibliography 31

Page 4 of 31
PROJECT OVERVIEW:

TIME SERIES:
A time series may be defined as a sequence of repeated measurement of the
variables made periodically through time.
-Cecil H. Mayers

COMPONENTS OF TIME SERIES:

• Secular Trend (Long term variations or secular variations)
• Seasonal variations
• Cyclical variations or cyclic variations
• Irregular variations

TREND ANALYSIS:

It refers to the concept of collecting information and attempting to spot a pattern, or

trend, in the information. In some fields of study the term trend is often used to
predict future events.

It is the process of analyzing company’s financial ratios over time. An aspect of

technical analysis that tries to predict the future movement of a stock based on past
data. Trend analysis is based on the idea that what has happened in the past gives
traders an idea of what will happen in the future.

There are three main types of trends: short-, intermediate- and long-term.
Trend analysis tries to predict a trend like a bull market run and ride that trend until
data suggests a trend reversal. Trend analysis is helpful because moving with
trends, and not against them, will lead to profit for an investors.

The trend analysis module allows you to plot aggregated response over time. This is
especially valuable, if you are conducting a long running survey and would like to
measure differences in perception and responses over time.

The following data points can be measured on Y-axis:

1. MEAN and MEAN PERCENTILE

2. STANDARD DEVIATION and VARIANCE

Page 5 of 31
The “TIME FACTOR” on X axis can have the following granularity:

1. Daily
2. Weekly
3. Monthly
4. Quarterly (Jan-Mar, Apr-Jun, Jul-Sept, Oct-Dec)
5. Yearly

Trend Analysis can be extremely valuable as an early warning indicator of potential

problems and issues with product line and service level changes that impact
customers. If you see a dip in the "mean" for a Continuous Variable satisfaction
question after a particular "marketing event" you can immediately start investigating
the dip and explore causes of the decrease in satisfaction levels. It can also be used
to gauge response rates over time.

Page 6 of 31
OBJECTIVES OF MEASURING TREND
There are four main objectives of measuring Trend in a time series data:

1. To study past growth or decline of the series. On ignoring the short term
fluctuations, trend describes the basic growth or decline tendency of the data.
2. Assuming that the same behavior would continue in future also, the trend
curve can be extended for forecasting future.
3. In order to analyze the influence of other factors the trend may first be
measured and then eliminated from the observed values.
4. Trend values of two or more time series can be used for their comparison.

METHODS OF MEASURING TREND:

There are four methods of measuring trend ant they are:

• Free Hand method or Graphical method.

• Semi-Average Method.
• Method of Moving Averages.
• Method of Least squares.

Page 7 of 31
MARUTI SUZUKI INDIA LTD.
COMPANY HISTORY:

Maruti Suzuki India Ltd. (MSIL) was established in Feb.1981 through an act of
parliament as a government company with Suzuki Motor Corporation of Japan
holding 26% stake. The joint venture agreement was signed between government of
India and Suzuki Motor Company in October1982. Maruti Suzuki India Ltd., formally
Maruti udyog ltd., a subsidiary of Suzuki Motor Corporation of Japan, is India’s
largest passenger car company accounting for over 50% of the domestic car market.
More than half the no. of cars sold in India wears a Maruti Suzuki batch. It offers 11
different ranges of cars. Since inception, Maruti produced and sold over 7.5 million
vehicles in India and exported over 5 lakh units to Europe and other countries.

PRODUCTS:

The company has the portfolio of 11 brands including

• MARUTI 800
• MARUTI OMNI
• ZEN
• ALTO
• WAGON-R
• GYPSY
• ESTEEM
• BALENO
• VERSA
• SX4
• SWIFT
• GRAND VITARA
• DEZIRE

Page 8 of 31
EQUITY STRUCTURE OF MARUTI:

54.21% of SUZUKI MARUTI CORPORATION

45.79% of OTHERS (Financial institutions mutual funds, banks, public etc.)

EQUITY STRUCTURE

SUZUKI MOTOR
45.79% CORPORATION
54.21% OTHERS

COMPANY AT A GLANCE:
• Cars produced and sold : 7,000,000
• Domestic cars sales for 2007-08 : 711818
• Car exports for 2007-08 : 53024
• Recorded profit after tax in 2007-08 : 17308
• Total income in 2007-08 : 188238
• No. of Maruti Suzuki sales outlets in 393 towns and cities : 600
• No. of workshops that provide customers with maintenance
support in 1220 cities : 2628
• Employee strength till March 2008 : 7090

Page 9 of 31
One million promise
Maruti has laid down a clear road map to achieve an annual sale of 1 million cars in
the domestic market and 2 lakh exports by 2010-11. In addition, the management
team at Maruti Suzuki has identified specific initiatives to serve customers better and
ensure their leadership in the future.

COMPANY’S STRENGTH:
One of the Maruti’s great strength is that they have internal resources to finance both
R & D expansion as well as capital and investments. The higher interest rates and
the risk of making large borrowings till finance capital cost will not affect them.

Maruti Suzuki is recently being rated as the 4th most

reputed automobile company in the world. This has happened
because of the contribution of all the stake holders of Maruti.

BUSINESS HIGHLIGHTS OF MSIL:

SALES GROWTH:

SALES GROWTH

45.00%
40.00% 38.60%
35.00%
SALES GROWTH

30.00%
25.00%
22.60% SALES GROWTH
20.00% 19.50%
15.00%
11.90%
10.00%
5.00%
0.00%
2005 2006 2007 2008
YEAR

Page 10 of 31
EARNING PER SHARE & BOOK VALUE

EARNING PER SHARE & BOOK VALUE

350
EPS & BOOK VALUE

300 297
250
EARNING PER
200 189 SHARE
150 BOOK VALUE
124
100
50 59.9
41.2
18.8
0
2003 - 04 2005 - 06 2007 - 08
YEAR

EXPORTS & DOMESTIC:

EXPORTS & DOMESTIC

800000
711818
EXPORTS & DOMESTIC

700000
600000
500000 527038
420947 EXPORTS (units)
400000
DOMESTIC (units)
300000
200000
100000
51175 34784 53024
0
2003 - 04 2005 - 06 2007 - 08
YEAR

Page 11 of 31
PROFIT AFTER TAX AND NET SALES:

PROFIT AFTER TAX & NET SALES

200000
180000 178603
160000
PAT & NET SALES

140000
PROFIT AFTER TAX (Rs
120000 120034
Mn)
100000
90812 NET SALES
80000
60000
40000
20000 17308
5422 11891
0
2003 - 04 2005 - 06 2007 - 08
YEAR

TREND ANALYSIS OF MARUTI SUZUKI

Factors Year 2004 2005 2006 2007 2008

Sales 2089.4 2562.5 2867.1 3425.3 4747.3

Sales Growth 0.226 0.119 0.195 0.386
COGS 1539.7 1939.3 2147.4 2427.1 3500.2
COGS as a % of
Sales 0.737 0.757 0.749 0.709 0.737
SG&A 242.6 234.7 289.6 371.8 521.3
SG&A % of Sales 0.1161 0.0916 0.101 0.1085 0.1098
$ $ $
R&D - $ - $ - - -
R&D % of Sales 0 0 0 0 0
Operating Income 307.1 388.5 430.1 626.4 725.8
Operating Margin 0.147 0.152 0.15 0.183 0.153
Employees 3334 3453 7090
Revenue per
Employee 626.7 742.1 #DIV/0! #DIV/0! 670
Net PPE 446.8 447.5 459.8 679.4 1025.4
Asset Utilization 0.21 0.17 0.16 0.2 0.22
Inventory 101.2 152.6 197.7 161.3 258.6
COGS/Inventory 15.21 12.71 10.86 15.05 13.54

Page 12 of 31
 365 365 365 365 365
DII 24 29 34 24 27
Accounts Receivable 164.6 144.3 154.1 182.1 173.2
Sales/AR 12.69 17.76 18.61 18.81 27.41
365 365 365 365 365
DSO 29 21 20 19 13

From the above trend it has been found that the

1. The sales of the company have increased from 19.5% in 2007 to 38.6% in
2008.
2. Cost of goods sold also increased from 70.9% in 2007 to 73.7% in 2008.
3. Operating margin trended negatively from 18.3% to 15.3%.
4. Number of employees and revenue from the employees also increased from
2007 to 2008.
5. Also there is increment in asset utilization, net PPE, inventory and Days in
inventory.

Page 13 of 31
PROBLEMS FACED: -

Following problems are found during the study of trend analysis on

Maruti Suzuki India Limited (MSIL).

1.) Cost of Goods Sold has been increased from 2004 to 2008 i.e., the expenses
incurred for the production of items has increased during this particular period of
time.

2.) Days in Inventory has also been increased from 2007 to 2008 i.e., time of
production has increased even after the implementation of new techniques and
technologies in production process.

Methods under TREND ANALYSIS on basis of which problems are

studied:

1.) By Graphical Method

2.) By Least squares method
3.) By Semi-averages and
4.) By Moving Averages

1.) BY GRAPHICAL METHOD:

The simplest, quickest and easiest method of estimating the trend is to plot the
original data on a graph and then to draw a smooth curve through the points so that
it may accurately describe the general long run tendency of the data.

(i) Trend Analysis of COGS using Graphical Method

Year COGS (Y)

2004 1539.7

2005 1939.3

2006 2147.4

2007 2447.1

Page 14 of 31
2008 3500.2

Trend Showing COST OF GOODS SOLD

4000

3500

3000
COGS

2500
COGS(Y)
2000
Linear (COGS(Y))
1500

1000

500

0
2004 2005 2006 2007 2008
YEARS

(ii) Trend Analysis of DII using Graphical Method

Year DII (Y)

2004 24

2005 29

2006 34

2007 24

2008 27

Page 15 of 31
Trend Showing DAYS IN INVENTORY:

40

35

30

25
DII (Y)
DII

20
Linear (DII (Y))
15

10

0
2004 2005 2006 2007 2008
YEARS

2.) METHOD OF LEAST SQUARES

Method of Least Squares is a mathematical method which is most widely used and
with its help a trend line is fitted to the data in such a manner that the following two
conditions are satisfied.

(1) Σ (Y-Yc) = 0
i.e., the sum of deviations of the actual values of Y and the computed values of Y is
zero.
(2) Σ (Y-Yc)2 is least.
i.e., the sum of the squares of the deviations of the actual and computed values is
least from this line and hence the name method of least squares. The line obtained
by this method ‘as the line of best fit’.

The straight line trend is represented by the equation

Yc = a + bX
Where,
Yc = designates the trend values to distinguish them from the actual Y values
a = Y intercept or the computed trend figure or the Y variable when X = 0
b = slope of the trend line or amount of change in Y variable that is associated

Page 16 of 31
 with a change of one unit in X variable.
X = represents time

Following points should be specified when any straight line trend is fitted:
1. Which year was selected as the origin?
2. What is the unit of time represented by X? Is it half year, one year or five
years?
3. In what kind of units is Y being measured? Is it production in tones, sales in
rupees, price in rupees, and employment in thousands of workers?

Formula for constants ‘a’ and ‘b’

a = Σ Y/N
b = ΣXY/ΣX2
Where,
N = represents number of years (months or weeks) for which data are given.
The constant ‘a’ is simply equal to the mean of Y values and the constant ‘b’ gives
the rate of change.

(i) Trend Analysis of COGS using Least Squares Method

Year COGS (Y) X XY X2 Yc

2004 1539.7 -2 -3079.4 4 1428.98

2005 1939.3 -1 -1939.3 1 1871.86

2006 2147.4 0 0 0 2314.74

2007 2447.1 1 2447.1 1 2757.62

2008 3500.2 2 7000.4 4 3200.5

N=5 Σ Y = 11573.7 Σ XY = 4428.8 Σ X2 = 10

Here,
Arithmetic mean = 10030/5
= 2006
Yc = a + bX
a = Σ Y/N
= 11573.7/5
= 2314.74
b = ΣXY/ΣX2
= 4428.8/10
= 442.88

Page 17 of 31
Linear trend by the Method of Least Squares

4000

3500
COGS and Yc

Trend Line
3000

2500
COGS(Y)
2000
Yc
1500

1000
Actual Line
500

0
2004 2005 2006 2007 2008
YEAR

Future Analysis:
Yc = a + bX
= 2314.74 + 442.88(2009-2006)
= 3643.38
This particular data shows that in coming year, COGS will increase which will effect
the revenue of the company.

(ii) Trend Analysis of DII using Least Squares Method

Year DII (Y) X XY X2 YC

2004 24 -2 -48 4 27.4

2005 29 -1 -29 1 27.5

2006 34 0 0 0 27.6

2007 24 1 24 1 27.7

2008 27 2 54 4 27.8

N=5 Σ Y = 138 Σ XY = 1 Σ X2 = 10

Here,
Arithmetic mean = 10030/5
= 2006

Page 18 of 31
Yc = a + bX
a = Σ Y/N
= 138/5
= 27.6
b = ΣXY/ΣX2
= 1/10
= 0.10

Linear trend by the Method of Least Squares

40

35

30

25
DII (Y)
DII

20
YC
15

10

0
2004 2005 2006 2007 2008
YEARS

Future Analysis:
Yc = a + bX
= 27.6 + 0.10(2009-2006)
= 27.9
This particular data also shows that in coming future there will be an increase in DII
which will result in delay in production of items

Page 19 of 31
3.) Method of Semi-averages

The important step of Semi-averages method is that whenever this method is used,
the given data is divided into two parts, preferably with the same number of years.

Procedure:

• If we are given data even number of years then simply divide the data into two
equal halves. For example, the data are from 2000 to 2005, i.e., over a period
of 6 years, the two equal parts will be each three years, i.e., from 2000 to
2002 and from 2003 to 2005.

• In case of odd number of years like 5, 9, 13, etc. two equal parts can be made
simply by omitting the middle year. For example, if data are given for 5 years
from 2000 to 2004, the equal parts would be from 2000 to 2001 and from
2003 to 2004-the middle year 2002 will be omitted.

• Now arithmetic mean is calculated for the two equal parts to get two points.

• Each point is plotted at the mid-point of the class interval covered by the
respective part and then the two points are joined by a straight line

• This gives us the required trend line.

(i) Trend Analysis of COGS using Method of Semi-averages

Year COGS (Y) Semi-average Semi-average

(year) (COGS)
2004 1539.7
2004.5 1739.5
2005 1939.3

2007 2447.1
2007.5 2973.65
2008 3500.2

Here,
Average of 2004 and 2005 is 2004.5
Average of 2007 and 2008 is 2007.5
Average of 1539.7 and 1939.3 is 1739.5
Average of 2447.1 and 3500.2 is 2973.65

Page 20 of 31
Trend by the Method of Semi-averages

4000

3500

3000

2500
COGS

COGS (Y)
2000
Linear (COGS (Y))
1500

1000

500

0
2004 2005 2007 2008
YEARS

Future analysis:
From the above graph, it is shown that due to increase in the trend line values there
will be hike in COGS in coming future.

(ii) Trend Analysis of DII using Method of Semi-averages

Semi-average Semi-average
Year DII (Y)
(year) (DII)
2004 24
2004.5 26.5
2005 29

2007 24
2007.5 25.5
2008 27

Here,
Average of 2004 and 2005 is 2004.5
Average of 2007 and 2008 is 2007.5
Average of 24 and 29 is 26.5
Average of 24 and 27 is 25.5

Page 21 of 31
Trend by the Method of Semi-averages

35

30

25

20
DII (Y)
DII

15 Linear (DII (Y))

10

0
2004 2005 2007 2008
YEARS

Future analysis:
By observing the trend line it may be predicted that there would be more chances of
DII to increase in coming future which will result in delay production.

4.) Method of Moving Averages

In the method of Moving Averages, when a trend value is to be determined, the

average value for a number of years (or month or weeks) is secured and this
average is taken as the normal or trend value for the unit of time falling at the middle
of the period covered in the calculation of the averages.

Effect of averaging:

• To give a smoother curve

• Lessening the influence of the fluctuations that pull the annual figure away
from the general trend.

We have three types of Moving Averages Method:

1. 3-yearly moving average
2. 5-yearly moving average and
3. 8-yearly moving average

Page 22 of 31
Note: - It is necessary to select a period for moving average which coincides with
the length of the cycle; otherwise the cycle will not be entirely removed. The period
of moving average is to be decided in the light of the length of the cycle.

(i) Trend Analysis of COGS using 3-yearly Moving Average Method

Year COGS (Y) 3-Yearly 3-yearly moving

totals average
_ _
2004 1539.7

2005 1939.3 5626.4 1875.466667

2006 2147.4 6533.8 2177.933333

2007 2447.1 8094.7 2698.233333

_ _
2008 3500.2

Here,
5626.4 is the 3-yearly moving totals of the values given corresponding to the years
2004, 2005 and 2006.
Similarly for the 3-yearly moving averages

Trend by the Method of 3-yearly Moving Average

4000

3500

3000
COGS (Y)
2500
COGS

2000 Linear
(COGS (Y))
1500

1000

500

0
2004 2005 2006 2007 2008
YEARS

Future analysis:
From the above graph, it is observed that due to increase in the trend line values
there will be hike in COGS in coming future which will affect the company’s revenue.

Page 23 of 31
(ii) Trend Analysis of DII using 3-yearly Moving Average Method

Year DII (Y) 3-yearly 3-yearly moving

totals average
_ _
2004 24

2005 29 87 29

2006 34 87 29

2007 24 85 28.33333333
_ _
2008 27

Here,
87 is the 3-yearly moving totals of the values given corresponding to the years 2004,
2005 and 2006.
Similarly for the 3-yearly moving averages.

Trend by the Method of 3-yearly Moving Average

40

35

30

25 DII (Y)
Linear (DII (Y))
DII

20

15

10

0
2004 2005 2006 2007 2008
YEARS

Future analysis:
By observing the trend line it is being predicted that there would be more chances of
DII to increase in coming future which will result in delay production in the company.

Page 24 of 31
HOW TREND CAN BE USEFUL IN COPING UP THE
PROBLEM
As can be seen that trend has helped us to measure the growth or decline of the
various problems faced by the company and hence is describing the basic growth or
decline tendency of the data. By assuming that the same behavior would continue in
future also, the trend curve can be extended for forecasting future.

Problem of increased COGS: -

• As can be seen from the trend Cost of Goods Sold has increased from 2004
to 2008. Hence the expenses incurred by the company in producing the items
that it sold during a particular period have been increased. This increment is
very large and as the price of steel is increasing there is the possibility of
increment in the prices of raw material.
• COGS will increase in the future in a very steep manner. Being a
manufacturing company it is very important for Maruti to lower the value of
COGS. This can be lowered by strategic sourcing and procurement i.e. by
continuously improving and re-evaluating the purchasing activities of a
company and also by acquisition of goods and/or services at the best possible
total cost of ownership, in the right quantity and quality, at the right time, at
the right place and from the right source for the direct benefit or use of
corporations, or individuals, generally via a contract.

Problem of hiked DII: -

• Days in inventory is the time period from the date of execution of the offer to
purchase with the employee through the resale closing date. As the days in
inventory have increased from 24 in 2007 to 27 in 2008 that means the time
of production has increased even after the implementation of new techniques
and technologies in production process.
• DII will also increase in future which again is a bad news for company.
According to the trend in future the value can go from 27 to as high as 30 and
this needs to be lowered so as to get more revenue. This can be done by
ensuring better inventory management. Effective Inventory Management
enables an organization to meet or exceed customers' expectations of
product availability while maximizing net profits or minimizing costs.

Page 25 of 31
LIMITATIONS OF TREND ANALYSIS:

GRAPHICAL METHOD

1.) Subjective method and hence not reliable: -

This method is highly subjective because the trend line depends on the personal
judgment of the investigator and, therefore, different persons may draw different
trend lines from the same set of data. Moreover, the work cannot be left to clerks
and it must be handled by skilled and experienced people who are well
conversant with the history of the particular concern.

2.) Prediction made are not of much value: -

Since freehand curve fitting is subjective, it cannot have much value if it is used
as a basis for prediction.

3.) This method appears simple and direct. However, it is very time consuming to
construct a freehand trend if a careful and a conscientious job is done.

It is only after long experience in trend fitting that a statistician should attempt to
fit a trend line by inspection.

METHOD OF LEAST SQUARES

1.) Great care has to be exercised in selecting the type of trend curve to be fitted,
i.e., linear, parabolic or some other type. Carelessness in this respect may lead
to fallacious results.

2.) This method is more tedious and time-consuming compared to other methods.

3.) Predictions are based only on long-term variations, i.e., trend and the impact of
cyclical, seasonal and irregular variations is ignored.

4.) Being a mathematical method it is not flexible-the addition of even one more
observation makes it necessary to do all the computations again.

5.) The method cannot be used to fit the growth curves like Gompertz curve, logistic
curve, etc.

Hence, mathematically methods of fitting trend are not foolproof-in fact; they can
be the source of some of the most serious errors that are made in statistical

Page 26 of 31
 work. They should never be used unless rigidly controlled by a separate logical
analysis. Trend fitting depends upon the judgment of the statistician, and a
skillfully made freehand sketch is often more practical than a refined
mathematical formula.

METHOD OF SEMI-AVERAGES

1.) Gives only linear trend of the data irrespective of whether it exists or not.

2.) Only a crude method as effects of other components might be completely

eliminated or not.

3.) The limitations of arithmetic averages shall automatically apply. If there are
extremes in either half or both halves of the series, then the trend line will not
give a true picture of the growth factor. This danger is greatest when the time
period represented by the average is small. Consequently, trend values obtained
are not precise enough for the purpose either of either of forecasting the future
trend or of eliminating trend from original data.

For the above reasons if the arithmetic averages of the data are to be used in
estimating the secular movement. It is sometimes better to use moving averages
than semi-averages.

METHOD OF MOVING AVERAGES

1.) Trend values cannot be computed for all the years. The longer the period of
moving average, the greater the number of years for which the trend values
cannot be obtained. For example, n a three-yearly moving average, trend values
cannot be obtained for the first year and last year, in a five-yearly moving
average for the first two years and the last two years, and so on.

2.) Great care has to be exercised in selecting the period of moving average. No
hard and fast rules are available for the choice of the period and one has to use
his own judgment.

3.) Since the moving average is not represented by a mathematical function this
method cannot be used in forecasting which is one of the main objectives of
trend analysis.

4.) Although theoretically we say that if the period of moving average happens to
coincide with the period of cycle, the cyclical fluctuations are completely
eliminated, but in practice since the cycles are by no means perfectly periodic,

Page 27 of 31
 the lengths of the various cycles in any given series will usually vary considerably
and, therefore, no moving average can completely remove the cycle. The best
result would be obtained by a moving average whose period was equal to the
average length of all the cycles in the given series. However, it is difficult to
determine the average length of the cycle until the cycles are isolated from the
series.

5.) Finally, when the trend situation is not linear (a straight line) the moving average
lies either above or below the true sweep of the data. Consequently, the moving
average is appropriate for trend computations only when
• the purpose of investigation does not call for current analysis or forecasting.
• the trend is linear, and
• the cyclical variations are regular both in period and amplitudes.
Unfortunately, these conditions are encountered very infrequently.

Page 28 of 31
APPENDIX:
Full forms:

COGS : Cost of goods sold.

DII : Days in inventory.
MSIL : Maruti Suzuki India limited.
O/M : Operating margin.
R&D : Research and development.
SG&A : Sales, general and administrative expenses

DEFINITIONS:
ASSET UTILISATION:
A ratio that indicates the amount of money invested in non-liquid assets (such as
property, plant, and equipment) for each dollar of revenue

COGS:
The expenses incurred by the company in producing the items that it sold during a
particular period.

DII:
The number of days of sales that goods and materials are held in stock by a
business i.e., it is the time period from the date of execution of the offer to purchase
with the employee through the resale closing date.

EQUITY:
The percentage of revenue held as equity.

OPERATING MARGIN:

Operating margin is the operating income as a percentage of sales during a period.

PROCUREMENT:

Procurement is the acquisition of goods and/or services at the best possible total
cost of ownership, in the right quantity and quality, at the right time, in the right place
and from the right source for the direct benefit or use of corporations, or individuals,
generally via a contract.

Page 29 of 31
RESEARCH AND DEVELOPMENT:

It refers to "creative work undertaken on a systematic basis in order to increase the

stock of knowledge, including knowledge of human, culture and society, and the use
of this stock of knowledge to devise new applications.

S, G & A:

This is the sum of all direct and indirect selling expenses and all general and
administrative expenses of a company. For a manufacturer these are expenses
outside of the manufacturing function. These expenses are reported on the income
statement of the period in which they occur.

STRATEGIC SOURCING:

Strategic sourcing is an institutional procurement process that continuously improves

and re-evaluates the purchasing activities of a company.

VALUE ENGINEERING:

Value engineering is a systematic method to improve the "value" of goods and

services by using an examination of function. Value, as defined, is the ratio of
function to cost. Value can therefore be increased by either improving the function or
reducing the cost.

FORMULA USED IN LEAST SQUARE METHOD:

The straight line trend is represented by the equation

Yc = a + bX
Where,
Yc = designates the trend values to distinguish them from the actual Y values
a = Y intercept or the computed trend figure or the Y variable when X = 0
b = slope of the trend line or amount of change in Y variable that is
associated with a change of one unit in X variable.
X = represents time

Formula to find constants:

a = Σ Y/N
b = ΣXY/ΣX2
Where,
N = represents number of years (months or weeks) for which data are given.

Page 30 of 31
 BIBLIOGRAPHY
Following are the sources of data required in handling and
solving the issues: -

• www.marketsimplifies.com
• www.oppapers.com
• www.moneycontrol.com
• www.justauto.com
• www.economictimes.indiatimes.com
• www.indiatelevision.com
• B. M. Agrawal
• S. P. Gupta
• Levin and Rubin

Page 31 of 31