TATA MOTERS

2011-2013

A
PROJECT REPORT ON FINANCIAL ANALYSIS OF TATA MOTORS

In partial fulfillment for requirements of Accounting for Managers Course in the two year full time

MASTERS OF BUSINESS ADMINISTRATION

Submitted To:
Prof. Hetal Pandya

Prepared by:
Divyesh Kashiyani (11064) Mihir Makwana Arpit Nagar Jaydeep Tank Pritesh Vadera Dinesh Valiya (11072) (11158) (11168) (11070) (11086)

Submitted on: 24th November N.R. Institute of Business Management (GLS-MBA)

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2011-2013

PREFACE
In the past decade this country has been in the rapid phenomenal growth in the professional management. Experts all over the world believe that management can be taught in a planned fashion and one of the basic ingredients of such training should be an understanding of the actual practical study like this of the project report. This provides us the basic education and particular knowledge of practical aspects. The activities of analyzing the financial reports give us some basic knowledge of how to prepare it nicely. Our institute offers us this kind of facilities, so that we are really thankful to our institute. During the first semester of MBA education this type of report we have to prepare as project and which will really helpful to us because we have to face similar kind of situation in the future, serving in any corporate. The practical study like this support the theatrical study. With the great pleasure we undertake the writing of this report , because it is really a matter of pride to be a student of business management.

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2011-2013

ACKNOWLEDGEMENT

Now-a-days getting a practical knowledge is an important thing but more important is the support, guidance and motivation provided by the different persons of different status and section. we would like to express our healthy gratitude to all those people who helped us directly and indirectly in preparing this project. we are heartily to all those people who helped us for completion of this project report we are heartily thankful to Dr. Hitesh Ruparel (Director) and we are also thankful to Prof. Hetal Pandya who has provided us proper guidance to prepare the project report.

Thank you.

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2011-2013

TABLE OF CONTENT SR.NO . PAGE NO.

PARTICULARS

1 2 3 4 5 6 7 8 9 10

PREFACE ACKNOWLEDGEMENT HISTORY OF TATA MOTORS. BALANCE SHEET ( Last 5 yrs.) PROFIT & LOSS A/C ( Last 5 yrs.) HORIZONTAL ANALYSIS VERTICLE ANALYSES TREND ANALYSIS RATIO ANALYSES BIBLIOGRAPHY

2 3 5 7 8 9 14 19 24 41

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2011-2013

Introduction to industry TATA MOTOR

HISTORY

Tata Motors Limited is India's largest automobile company, with consolidated revenues of Rs.70,938.85 crores (USD 14 billion) in 2008-09. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer. Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company is establishing a new plant at Sanand (Gujarat). The companys dealership, sales, services and spare parts network comprises over 3500 touch points; Tata Motors also distributes and markets Fiat branded cars in India. Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, Indias first Sports Utility Vehicle and, in 1998, the -Tata Indica, India's first fully indigenous passenger car. In January 2008, Tata 5
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2011-2013

Motors unveiled its People's Car, the Tata Nano, which India and the world have been looking forward to. The Tata Nano has been subsequently launched, as planned, in India in March 2009. A development, which signifies a first for the global automobile industry, the Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at Rs.1 lac. Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

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2011-2013

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2011-2013

BALANCE SHEET Liabilities 12

(IN CR.)

Particulars

Mar'11 Month s 637.71 19,351. 40 20,013. 30 7,766.0 5 8,132.7 0 35,912. 05

Mar'10 12 Months 570.6 14,208. 55 14,803. 78 7,742.6 0 8,883.3 1 31,429. 69 18,416. 81 7,212.9 2 11,179. 26 5,232.1 5 22,336. 90 2,935.5 9 2,391.9 2 1,753.2 6 5,248.7 1 12,329. 48 16,909. 30 2,763.4 3 19,672. 73 7,343.2 5 0 31,429. 69

Mar'09 12 Months 514.05 11,855.15 12,394.27 5,251.65 7,913.91

Mar'08 12 Months 385.54 7,428.45 7,839.50 2,461.99 3,818.53

Mar'07 12 Months 385.41 6,458.39 6,869.75 2,022.04 1,987.10 10,878.89

Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans TOTAL LIABILITIES Assets Gross Block

25,559.83 14,120.02

21,883. 32 (-) Acc. 8,466.2 Depreciation 5 Net Block 13,392. 88 Capital Work in 4,058.5 Progress. 6 Investments. 22,624. 21 Inventories 3,891.3 9 Sundry Debtors 2,602.8 8 Cash And Bank 2,428.9 2 Loans And 5,852.4 Advances 2 Total Current 14,775. Assets 61 Current Liabilities 15,740. 69 Provisions 3,222.7 1 Total Current 18,963. Liabilities 40 NET CURRENT ASSETS 4,187.7 9 Misc. Expenses 0 Accounting for Managers TOTAL ASSETS 35,912. (A+B+C+D+E) 05

13,905.17 10,830.83 6,259.90 7,620.20 6,954.04 12,968.13 2,229.81 1,555.20 1,141.82 5,909.75 5,443.52 5,361.80 5,064.96 4,910.27 2,421.83 1,130.73 2,397.31 4,831.36

8,775.80 4,894.54 3,855.31 2,513.32 2,477.00 2,500.95 782.18 826.76 6,208.53 10,318.42 6,956.88 1,364.32 8,321.20 1,997.22 8 10.09 10,878.89

10,836.58 10,781.23 10,968.95 1,877.26 12,846.21 -2,009.63 10,040.37 1,989.43 12,029.80 -1,248.57

2.02 6.05 25,559.83 14,120.02

TATA MOTERS

2011-2013

PROFIT AND LOSS A/C

(IN CR.)

PARTICULAR INCOME: Sales Turnover Excise Duty NET SALES Other Income TOTAL INCOME EXPENDITURE: Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalized Provisions Made TOTAL EXPENDITURE Operating Profit EBITDA Depreciation Other Write-offs EBIT Interest EBT Taxes Profit and Loss for the Year Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT KEY ITEMS Preference Dividend

Mar'11 Mar'10 12 Months 12 Months 52,067.87 4,110.63 47,957.24 0 48,377.93 2,224.74 34,692.83 2,294.02 2,289.11 2,568.50 -817.68 0 43,251.52 4,705.72 5,126.41 1,360.77 106.17 3,659.47 1,383.79 2,275.68 384.7 1,890.98 -79.16 0 0 1,811.82 0 38,173.39 2,800.10 35,373.29 0 35,775.56 1,652.22 24,759.49 1,836.13 1,583.24 2,249.92 -740.54 0 31,340.46 4,032.83 4,435.10 1,033.87 144.03 3,257.20 1,246.25 2,010.95 589.46 1,421.49 818.59 0 0 2,240.08 0

Mar'09 12 Months 28,538.20 2,877.53 25,660.67 0 26,502.21 1,171.59 19,039.41 1,551.39 1,224.15 1,867.05 -916.02 0 23,937.57 1,723.10 2,564.64 874.54 51.17 1,638.93 704.92 934.01 12.5 921.51 79.75 15.29 -15.29 1,001.26 0

Mar'08 12 Months 33,123.54 4,355.63 28,767.91 0 29,127.33 1,230.14 20,931.81 1,544.57 1,179.48 1,982.79 -1,131.40 0 25,737.39 3,030.52 3,389.94 652.31 64.35 2,673.28 471.56 2,201.72 547.55 1,654.17 374.75 0 0 2,028.92 0

Mar'07 12 Months 31,089.69 4,425.44 26,664.25 0 27,551.48 1,200.36 19,529.88 1,367.83 1,068.56 1,488.16 -577.05 0 24,077.74 2,586.51 3,473.74 586.29 85.02 2,802.43 455.75 2,346.68 660.37 1,686.31 227.15 0 0.07 1,913.46 0 9

Accounting for Managers

TATA MOTERS Equity Dividend Equity Dividend (%) Shares in Issue (LAC) EPS - Annualized (Rs) 1,274.23 200.77 63.46 28.55 859.05 150.55 57.06 39.26 311.61 60.61 51.40 19.48

2011-2013 578.43 150.03 38.55 52.63 578.07 149.98 38.54 49.65

HORIZONTAL ANALYSIS
PROFIT AND LOSS ACCOUNT
(IN CR.)

particulars

MARCH 2011

MARCH 2010

increase/d ecre in amount

incre/de cr %

INCOME:
Sales Turnover Excise Duty NET SALES Other Income TOTAL INCOME 52,067.87 38,173.39 4,110.63 2,800.10 47,957.24 35,373.29 0 0 48,377.93 35,775.56 13,894.48 1,310.53 12,583.95 0.00 12,602.37 36.40 46.80 35.57

35.23

EXPENDITURE
Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalised Provisions Made 2,224.74 34,692.83 2,294.02 2,289.11 2,568.50 -817.68 0 1,652.22 24,759.49 1,836.13 1,583.24 2,249.92 -740.54 0 572.52 9,933.34 457.89 705.87 318.58 -77.14 0.00 34.65 40.12 24.94 44.58 14.16 10.42 0 10
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2011-2013

TOTAL EXPENDITURE Operating Profit

43,251.52 31,340.46 4,705.72 5,126.41 1,360.77 106.17 3,659.47 1,383.79 2,275.68 384.7 4,032.83 4,435.10 1,033.87 144.03 3,257.20 1,246.25 2,010.95 589.46

11,911.06 672.89 691.31 0.00 326.90 -37.86 402.27 137.54 264.73 -204.76

38.01 16.69 15.59 31.62 -26.29 12.35 11.04 13.16 -34.74

EBITDA
Depreciation Other Write-offs

EBIT
Interest EBT Taxes Profit and Loss for the Year Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT

1,890.98 -79.16 0 0 1,811.82

1,421.49 818.59 0 0 2,240.08

469.49 -897.75 0.00 0.00 -428.26

33.03 -109.67 0 0 -19.12

Horizontal Analysis of profit & loss Statement

1) Sales growth is 35.67% 2) Manufacturing expenses has increased by 34.65% 3) Operating profit has increased by 16.69% over the last year.
4) Other expenses likePersonal, administering so increased by only 19%

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TATA MOTERS 5) But selling expences increase by 44.85% 6) Growth in profit in every stage.

2011-2013

PBDIT PBIT PBT Profit and Loss for the Year PAT

15.59% 12.35% 13.16% 33.03% -19.12%

HORIZONTAL ANALYSIS OF BALANCE SHEET Of TATA MOTERS.

(IN CR.)

Particulars Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans Assets Gross Block (-) Acc. Depreciation

March 2011 637.71 19,351.40 20,013.30 7,766.05 8,132.70

March 2010

increase/dec rese

incre/decr % 11.76 36.20 35.19 0.30 -8.45

in amount 570.6 67.11 14,208.55 14,803.78 7,742.60 8,883.31 5142.85 5209.52 23.45 -750.61

21,883.32 8,466.25

18,416.81 7,212.92

3466.51 1253.33

18.82 17.38

Net Block Capital Work in Progress. Investments.

13,392.88 4,058.56 22,624.21

11,179.26 5,232.15 22,336.90

2213.62 -1173.59 287.31

19.80 -22.43 1.29 12

Accounting for Managers

TATA MOTERS Inventories Sundry Debtors Cash And Bank Loans And Advances Total Current Assets Current Liabilities Provisions Total Current Liabilities NET CURRENT ASSETS Misc. Expenses TOTAL ASSETS (A+B+C+D+E ) 3,891.39 2,602.88 2,428.92 5,852.42 2,935.59 2,391.92 1,753.26 5,248.71 955.8 210.96 675.66 603.71

2011-2013 32.56 8.82 38.54 11.50

14,775.61 15,740.69 3,222.71 18,963.40

12,329.48 16,909.30 2,763.43 19,672.73

2446.13 -1168.61 459.28 -709.33

19.84 -6.91 16.62 -3.61

-4,187.79 0

-7,343.25 0

3155.46

-42.97

35,912.05

31,429.69

4482.36

14.26

Ananysis of Balance sheet as at March 31, 2011

1) Share capital is increase by only 11.76%. 2) Net worth increase by 36% because there is more increase in reserve and surplus about 35.19%. 3) Secured loan increase by only 0.30% but unsecured loan decrease by 8.45% it means that in March,2011 some unsecured loan may be matured. 4) Fixed asset increase by 19.80%. 5) There is not much change in Investment. ( increase by 1.29%).

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6) Inventories and sundry debtors has increased by 32.56% and 8.82% respectively. 7) Cash and bank balance increase by 38..54%. it means that company have more liquid asset than last year. 8) Current Liability has been decreased by 6.91%. which is because of incurred in creditors.

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2011-2013

Overall Assessment:

1) Growth in sales is

higher than last year. It increase from 35,373.29 lack to 47,957.24 Rs which is a good sign for the company.

2) Current asset is increase by 19.84% ,while current liability decrease by

3.61% . which is good sign shows companys liquidity.

3) There

is littel increase in capital is 11.85% while increase in revenue surplus is 36.20%

4) There is decrease in loan funds which indicates that company has pay
off more unsecured loans during the year.

5) Fixed assets has utilized very effectively as there is a increase in sales

is double than fixed asset.

6) Companys

liquidity position is good as there is a higher increase in cash and bank balance.

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2011-2013

Vertical Analysis of profit & loss Statement Of TATA MOTERS

(in Cr.) comman

particulars

March 2011(cr.)

comman size ( in %)

MARCH size 2010 ( in %)

INCOME:
Sales Turnover Excise Duty NET SALES 52,067.87 4,110.63 47,957.24 108.57 8.57 100% 38,173.39 2,800.10 35,373.29 107.92 7.92 100%

Other Income TOTAL INCOME

0 48,377.93

0.00 100.88

0 35,775.56

0 101.14

EXPENDITURE
Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalised Provisions Made TOTAL EXPENDITURE 2,224.74 34,692.83 2,294.02 2,289.11 2,568.50 -817.68 0 43,251.52 4.64 72.34 4.78 4.77 5.36 -1.71 0.00 90.19 1,652.22 24,759.49 1,836.13 1,583.24 2,249.92 -740.54 0 31,340.46 4.67 69.99 5.19 4.48 6.36 -2.09 0.00 88.60 16
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2011-2013

Operating Profit

4,705.72 5,126.41 1,360.77

9.81 10.69 2.84

4,032.83 4,435.10 1,033.87

11.40 12.54 2.92

EBITDA
Depreciation

Other Write-offs

106.17 3,659.47 1,383.79 2,275.68 384.7

0.22 7.63 2.89 4.75 0.80

144.03 3,257.20 1,246.25 2,010.95 589.46

0.41 9.21 3.52 5.68 1.67

EBIT
Interest EBT Taxes

Profit and Loss for the Year Non Recurring Items Other Non Cash Adjustments Other Adjustments

1,890.98 -79.16 0 0

3.94 -0.17 0.00 0.00

1,421.49 818.59 0 0

4.02 2.31 0.00 0.00

REPORTED PAT

1,811.82

3.78

2,240.08

6.33

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2011-2013

Vertical Analysis of Multi step Income Statement

1) It shows increase in material consumed by 2.35%.

2) Manufacturing expenses has decreased from 4.76% to 4.64% .

3) Selling expences increase by only 0.29% over sales while administration

expenses decreas by only 1% over sales.

4) Operating profit is decreased by 1.59% over sales from the last years

profit.

5) Depreciation is lower is 0.08% which also constitute a lower portion as

compare to sales.

6) Taxes are also reduced by 0.87% over sales.

7) Interest on loan is olso redused by 0.63% from the last year.

8) The net profit constitute 3.94% of net sales which lower as compare to

the year 2010 tax and interest also less. 18

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2011-2013

Vertical Analysis of Balance sheet Statement Of TATA MOTERS

(in Cr.)

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2011-2013

Particulars
Share Capital Reserves & Surplus

March 2011
637.71 19,351.40 20,013.30 7,766.05 8,132.70 35,912.05 21,883.32 8,466.25 13,392.88 4,058.56 22,624.21 3,891.39 2,602.88 2,428.92 5,852.42 14,775.61 15,740.69 3,222.71 18,963.40

comman size ( in %) 1.78 53.89 55.73 21.63 22.65 100% 60.94 23.57 37.29 11.30 63.00 10.84 7.25 6.76 16.30 41.14 43.83 8.97 52.81 0.00

March 2010
570.6 14,208.55 14,803.78 7,742.60 8,883.31 31,429.69 18,416.81 7,212.92 11,179.26 5,232.15 22,336.90 2,935.59 2,391.92 1,753.26 5,248.71 12,329.48 16,909.30 2,763.43 19,672.73

comman size ( in %) 1.82 45.21 47.10 24.63 28.26 100% 58.60 22.95 35.57 16.65 71.07 9.34 7.61 5.58 16.70 39.23 53.80 8.79 62.59 0.00

Net Worth
Secured Loans Unsecured Loans

Total
Assets
Gross Block (-) Acc. Depreciation

Net Block
Capital Work in Progress. Investments. Inventories Sundry Debtors Cash And Bank Loans And Advances

Total Current Assets

Current Liabilities Provisions

Total Current Liabilities

NET CURRENT ASSETS
Misc. Expenses

-4,187.79 0

-11.66

-7,343.25 0

-23.36

TOTAL ASSETS (A+B+C+D+E)

35,912.05

100%

31,429.69

100%

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TATA MOTERS

2011-2013

Analysis of Balance sheet as at March 31, 2011

1) Share capital involved 1.78% of the total sources of funds which

indicates that company has used more capital from outside.

2) Reserves and surplus has increased by 8.68% as compared to previous year but still constitute a portion of sources of fund.

3) There is a decrease in unsecured loans by 5.61%% decrease and

secured loan around by 3%.

4) Net block of fixed assets constitute a 37.29% portion in total assets which

is 35.57% in last year. it has increased by 1.72% . But as net sales has rise which indicates that there is not effectively utilization of fixed assets.

5) There is only 10.84% inventory in total asset which is more than last year

(9.34%).

6)

Capital Work in Progress is decresed by 5.35% from the last year.

7) In total asset , INVESTMENT consist more than half of the asset about 63

%. Which is less than last year 71.07%?

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2011-2013

8) Current liability is 52.81% while current asset is only 41.14% of the total

asset.

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2011-2013

TREND ANALYSIS PROFIT & LOSS - TATA MOTORS LTD.PRINT

Mar'11 12 Months INCOME: Sales Turnover Index Excise Duty NET SALES Index Other Income TOTAL INCOME Index EXPENDITURE: Manufacturing Expenses Index Material Consumed Index Personal Expenses Index Selling Expenses Index Administrative Expenses Index Expenses Capitalised 52,067.8 7 167.48 4,110.63 47,957. 24 179.86 0 48,377. 93 175.59 38,173.3 9 152.78 2,800.10 35,373. 29 132.66 0 35,775. 56 129.85 28,538. 33,123. 20 54 31,089.69 91.21 106.54 100.00 2,877.5 4,355.6 3 3 4,425.44 25,660. 28,767. 67 91 26,664.25 96.24 107.90 100.00 0 0 0 26,502. 29,127. 21 33 27,551.48 96.19 105.72 100.00 1,171.5 9 97.60 19,039. 41 97.49 1,551.3 9 113.42 1,224.1 5 114.56 1,867.0 5 125.46 -916.02 1,230.1 4 102.48 20,931. 81 107.18 1,544.5 7 112.92 1,179.4 8 110.38 1,982.7 9 133.24 1,131.4 Mar'10 12 Months Mar'09 12 Months Mar'08 12 Months Mar'07 12 Months

2,224.74 185.34 34,692.8 3 177.32 2,294.02 167.71 2,289.11 214.22 2,568.50 172.60 -817.68

1,652.22 137.64 24,759.4 9 126.78 1,836.13 134.24 1,583.24 148.17 2,249.92 151.19 -740.54

1,200.36 100.00 19,529.88 100.00 1,367.83 100.00 1,068.56 100.00 1,488.16 100.00 -577.05 23

Accounting for Managers

TATA MOTERS

2011-2013 0 0 0 25,737. 39 24,077.74 100.00 3,030.5 2 2,586.51 100.00 3,389.9 4 3,473.74 100.00 652.31 586.29 64.35 85.02 2,673.2 8 2,802.43 100.00 471.56 455.75 2,201.7 2 2,346.68 93.82 100.00 547.55 660.37 1,654.1 7 98.09 374.75 0 1,686.31 100 227.15 0 0.07 1,913.46 0 578.07 100 149.98 100% 3,853.74 49.65 24

Provisions Made TOTAL EXPENDITURE Index Operating Profit Index EBITDA Index Depreciation Other Write-offs EBIT Index Interest EBT Index Taxes Profit and Loss for the Year Index Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT KEY ITEMS Preference Dividend Equity Dividend Index Equity Dividend (%) Index Shares in Issue (Lakhs) EPS -

0 43,251. 52 4,705.72 5,126.4 1 1,360.77 106.17 3,659.4 7 1,383.79 2,275.6 8 96.97 384.7 1,890.9 8 112.14 -79.16 0 0 1,811.8 2 0 1,274.23 220.43 200.77 133.86 6,346.14 28.55

0 0 31,340. 23,937. 46 57 4,032.83 1,723.1 0

4,435.1 2,564.6 0 4 1,033.87 874.54 144.03 51.17 3,257.2 1,638.9 0 3 1,246.25 2,010.9 5 85.69 589.46 1,421.4 9 84.30 818.59 0 704.92 934.01 39.8 12.5 921.51 54.65 79.75 15.29

0 -15.29 0 2,240.0 1,001.2 2,028.9 8 6 2 0 859.05 148.61 150.55 100.38 5,705.58 39.26 0 311.61 53.91 60.61 40.41 5,140.0 8 19.48 0 578.43 100.06 150.03 100.03 3,855.0 4 52.63

Accounting for Managers

TATA MOTERS Annualised (Rs) Index

2011-2013

57.5

79.07

39.23

106

100

BALANCE SHEET-TATA MOTORS LTD.

Particulars Liabilities Share Capital Index Reserves & Surplus Index Net Worth Secured Loans Index Unsecured Loans Index Assets Gross Block 21,883. 32 18,416.8 1 13,905.17 10,830.83 8,775.80 25
Accounting for Managers

Mar'11 12 Months

Mar'10 12 Months

Mar'09 12 Months 514.05 133.38 11,855.15 183.56 12,394.27 5,251.65 259.72 7,913.91 398.26

Mar'08 12 Months 385.54 100.033 7,428.45 115.02 7,839.50 2,461.99 121.76 3,818.53 192.17

Mar'07 12 Months 385.41 100 6,458.39 100 6,869.75 2,022.04 100 1,987.10 100

637.71 570.6 165.46 148.05 19,351. 14,208.5 40 5 299.63 220.00 20,013. 14,803.7 30 8 7,766.0 5 384.07 8,132.7 0 409.27 7,742.60 382.91 8,883.31 447.05

TATA MOTERS (-) Acc. Depreciation 8,466.2 5 7,212.92 13,392. 11,179.2 Net Block 88 6 Capital Work 4,058.5 in Progress. 6 5,232.15 Index 161.48 208.18 22,624. 22,336.9 Investments. 21 0 Index 913.37 901.77 3,891.3 Inventories 9 2,935.59 Sundry 2,602.8 Debtors 8 2,391.92 Index 322.77 305.80 Cash And 2,428.9 Bank 2 1,753.26 Loans And 5,852.4 Advances 2 5,248.71 Index 94.26 84.54 Total Current 14,775. 12,329.4 Assets 61 8 Index Current Liabilities Index Provisions Index 143.20 15,740. 69 226.26 3,222.7 1 236.21 119.49 16,909.3 0 243.06 2,763.43 202.55

2011-2013

6,259.90 7,620.20 6,954.04 276.69 12,968.13 523.24 2,229.81 1,555.20 198.83 1,141.82 5,909.75 95.19 10,836.58 105.02 10,968.95 157.67 1,877.26 137.60

5,443.52 5,361.80 5,064.96 201.52 4,910.27 198.23 2,421.83 1,130.73 144.56 2,397.31 4,831.36 77.82 10,781.2 3 104.49 10,040.37 143.89 1,989.43 145.82 12,029.8 0

4,894.54 3,855.31 2,513.32 100 2,477.00 100 2,500.95 782.18 100 826.76 6,208.53 100 10,318.4 2 100 6,956.88 100 1,364.32 100

Total Current 18,963. 19,672.7 Liabilities 40 3 NET CURRENT 4,187.7 ASSETS 9 7,343.25 Misc. Expenses 0 0 TOTAL 35,912. 31,429.6 ASSETS 05 9 (A+B+C+D+

12,846.21

8,321.20 1,997.22 10.09 10,878.8 9 26

-2,009.63 -1,248.57 2.02 25,559.83 6.05 14,120.0 2

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E)

Ananlysis
1) The trends are generally favourable. 2) Sales have increased from 100 base year to 167.48 during the last five years, which indicates the good sign for the company. 3) manufacturing expenses has increased as compare to the year 2007 but it decreases in the year 2009 and in 2011 it is increases to 185.34 due to increase in the sales amount. 4) Investment in fixed assets over a period has also been increased as the more sale requires more production and more production requires more fixed assets. It increases to 913.37 in 2011 as compare to 100.00 in 2007 which 813.37% more. 5) Net profit has increased in 2011 as 112.14 compare to 2007 as 100. Trend is positive axcept the one in 2009. It is just because of the recession period. Otherwise it is very good.it is increased over the year 2011 as compare to the year 2007. 6) Secured loan has increased a 384.07 in 2011 as compared to 2007 as 100. It is just because company has borrowes money from outside but in 2011 the unsecured loan has decreased to 409.27 compare to last year as 447.05 as now the trend is goning on positive side. 7) Net current assets has also increased as 143.20 in 2011comapared in 2007 as 100. It increase during the trend period in 2011. 8) Reserves and surplus has increased slowly but is tripled approximately in last five years.so, its positive side trend of the company.

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TATA MOTERS 9)

2011-2013

RATIO ANALYSIS
1) Gross profit ratio= gross profit*100/sales Year 2011= (4,705.72*100)/ 47,957.24 =9.81 Year 2010= (4,032.83*100)/ 35,373.29 =11.40

Gross Profit ratio reflects the efficiency with which the management produces each unit of product. This ratio indicates the average spread between the cost of goods sold and the sales revenue. It is a ratio expressing relationship between Gross profits earned to Net Sales. Interpretation: The gross profit of the company has Decreased during these two years from 9.81% to 11.40% which is a bad sign for the company though the change is marginal.

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TATA MOTERS 2) Net profit ratio= Net profit*100/sales Year 2011= (1,890.98*100)/ 47,957.24 =3.94 Year 2010= (1,421.49*100)/ 35,373.29 =4.02

2011-2013

Net profit ratio establishes a relationship between net profit and sales and indicates managements efficiency in manufacturing, administering and selling the products. This ratio is the overall measure of the firms ability to turn each rupee sales into ne profit. A firm with a high net margin ratio would be in an advantageous position to survive in the face of falling selling prices, rising costs of production or declining demand for the product. Interpretation Net profit ratio of the company has decreased from 4.02% to 3.94%. the reason behind this may be that the operating expenses of the company like administrative and selling and Personal expenses are very high.

3) Current ratio
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current ratio= 2011 2010

current assets/current liability 14,775.61/18,963.40= 12,329.48/19,672.73=

0.78:1 0.63:1

The current ratio is a measure of the firms Short-Term Solvency. It indicates the availability of current assets in rupees for every one rupee of current liability. A ratio of greater than one means that the firm has more current assets than current claims against him. It is also known as Working Capital Ratio as it is a measure of working capital available at a particular time. Current ratio is calculated by dividing current assets by current liabilities: As a conventional rule, a current ration of 2:1 or more is considered satisfactory.

Interpretation 30
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The companys current ratio in the year 2009-10 was 0.63:1 which is further increased to 0.78:1 in 2010-11. The standard current ratio is 2:1 the company has not have a adequate current ratio is the company has maintain less current ratio even less than 1.current liability is more than current asset.

4) Quick ratio :
quick ratio= 2011 2010 current assets-inventory/current liability 14,775.61-3,891.39/18,963.40= 12,329.48-2,935.59/19,672.73= 0.48:1

0.57:1

The measure of absolute liquidity may be obtained by comparing only cash and bank balance as well as readily marketable securities with liquid liabilities. This is a very exacting standard of liquidity and it is satisfactory if the ratio is 0.5:1. It is computed by dividing the value of quick assets by liquid liabilities. Here, quick assets do not include 31
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both stock and debtors, because payments from debtors would not generally be received immediately when liquid liabilities are to be paid. Thus the quick assets comprise only cash balance, bank balance and readily marketable securities only.

Interpretation
Quick ratio of the company in 2009-10 is 0.48:1 further it increased to 0.57:1 in 2010:11. The standard acid test ratio is 1.33:1 so companys liquidity position is not good as compare the standard ratio this is because the current liability of the company is more than current asset.

5) Asset turnover Ratio :

assets turnover ratio= 2011 2010

net sales/avg. total assets 47,957.24/35,912.05 35,373.29/31,429.69 1.34 1.13

The Asset Turnover ratio measures the efficiency of capital investment. It reflects the level of sales generated by investments in productive capacity. To ascertain the efficiency and profitability of business, the total assets are compared to sales. The more the sales in relation to the amount invested in total assets, the more efficient is the use of total assets. It indicates higher efficiency. If the sales are less as compared to investment in assets, it means that total assets are not adequately utilized in business. Of course, excessive sale is an indication of over trading and is dangerous

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Interpretation As the total assets turnover ratio has increased from 1.13 times in the year 2009-10 to 1.34 times in the year 2010-11. It implies that the company has managed a good production and sales from the existing total assets.

6)total debt to equity ratio

total debt to equity ratio=

2011 2010

total debt/share holders equity 15,898.75/20,013.30 16,625.91/14,803.78

0.79 1.12

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Debt-to-equity ratio examines the firms capital structure and, indirectly, its ability to meet current debt obligations. This ratio is only another form of proprietary ratio and establishes relationship between the outside long-term liabilities and owners funds. It shows the proportion of long-term External Equities and Internal Equities i.e. proportion of funds provided by long-term creditors and that provided by shareholders or proprietors. Interpretation The debt equity ratio of the company in 2009-10 was 0.79:1 which increases to 1.12:1 in 2010-11. As the ideal debt equity ratio is 1:1. It is a good sign for the company. The long term debt is lower than the total net worth. But in 2009-10 debt equity ratio is more than 1.means that companies debt is more than share capital.

7) Long term debt to fixed assets ratio

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long term debt to fixed assets ratio=

2011 2010

long term debt/fixed assets

637.71+7,766.05+8,132.70/ 13392.88 570.6+7,742.60+8,883.31/ 11179.26

1.236526 1.540454

Normally, the fixed assets of business must be purchase out of Fixed Capital only, which includes share capital, reserves and long term liabilities. This ratio, therefore, shows the relationship between fixed capital and fixed assets. The ratio must be 1:1 or more i.e. the fixed capital must be more than fixed assets or must at least be equal to fixed assets. If fixed capital is less than fixed assets, it would mean that short-term funds have been used in purchasing fixed assets. When these short-term obligations mature, the business would be put to trouble and may be compelled to dispose of its fixed assets at a considerable loss to the business.

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TATA MOTERS Interpretation

2011-2013

In the year 2009-10 the long term to fixed assets ratio was 1.54:1. it was high because the standard ratio was 1:1. it further decreased in the 2010-11 and reached at 1.34:1

8) Interest coverage ratio

Interest Coverage Ratio = Earning before depreciation, interest and tax / Interest

Interest Coverage Ratio = 2011 2010

Earning before depreciation, interest and tax / Interest

5,126.41/1,383.79 4,435.10/1,246.25

3.70 3.56

It measures the protection available to creditors as the extent to which earnings available for interest cover interest expense. The ratio tells us the amount of earnings that company holds to make interest payments of its debt. The ratio indicates as to how many times the profit covers the payment of interest on debentures and other long-term loans. It measures the debt service capacity of the firm in respect of fixed interest on long-term debts.

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2011-2013

Interpretation Interest paying capacity of the company has 3.56 times in the year 2009-10 AND 3.70 times in the year 2010-11 though it is very less increase it is a not good sign of operating efficiency of the company, the reason behind change in the interest coverage is more interest than profit.

9) Earnings per share :

earnings per share= 2011 2010 (N.P. Preference Dividend)/No. of Equity Shares 1,890.98/63.46 1,421.49/57.06

29.80 24.91

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2011-2013

Earning per share is probably the most widely available and commonly used corporate performance statistic for publicly traded firms. It is used to compare operating performance and for valuation purposes either directly or together with market prices in the familiar form of price earnings ratios. This ratio measures the profit available to equity shareholders on per share basis. It is not the actual amount paid to shareholders as dividend but is the maximum that can be paid to them.

Interpretation In the year 2009-10 the companys earning par share is 24.91. it also increase from the 29.80 in the year 2010-11 which is a good sign for the company as well as for the share holders as they have a good return per share. The reason behind increase in share is generally increase in the net profit while company has not issued much any new share capital.

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10)

RETURN ON ASSETS :

RETURN ON ASSETS= 2011 2010

pat*100/avg.total assets (1,890.98*100)/35,912.05 (1,421.49*100)/31,429.69 5.27 4.52

Interpretation The return on asset in 2010-11 is 5.27% as compare to 4.52% in 2009-10. It increases in 2010-11 which reveals effective utilization of fixed assets during the year as a result net profit increases very largely with little increase in total assets.

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11)

Return on equity

return on equity= 2011 2010

pat*100/avg.share holders fund (1,890.98*100)/637.71 (1,421.49*100)/570.6

296.53 249.12

Interpretation The return on equity ratio is very high. It is 296.53% in 2010-11 as compare to 249.12% in 2009-10. The reason behind this is that there is issue of equity shares during

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the year while with the same equity share capital the company has managed to earn more net profit.

12)

Asset turnover ratio :

net sales/avg. total assets 47,957.24/35,912.05 35,373.29/31,429.69

assets turnover ratio=

2011 2010

1.34 1.13

Interpretation Asset turnover ratio in the year 2010-11 was 1.34:1 as compare to 1.13:1 in the year 2009-10. It is because the net sales has increased higher as compare to total asset which indicates effective utilization of total asset. 41
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13) Collection period allowed to customers

This ratio indicates the number of the days for which company makes the credit sales. it is mainly depends upon the companys policy that whether it wants to adopt the liberal policy or strict policy for recovery of the money.

Collection period allowed to customers ratio=

2011 2010

Average_debtors/credit sales*365
3,693.36/47,957.24 28. days 3,506.83/13,444.39 95. days

Interpretation 43
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2011-2013

The Collection period allowed to customers for the year 2010-11 has decreased to 28 days from 95 days in the year 2009-10. It reduces that company has started strict recovery system to improve the liquidity position.

14) INVENTORY TURNOVER RATIO

The inventory turnover shows how rapidly the inventory is turning into receivable through sales. Generally, a high inventory turnover is indicative of good inventory management. A low inventory turnover implies excessive inventory levels than warranted be production and sales activities. Too high and too low inventory turnover ratios should be investigated further. The computation of inventory turnovers for individual components of inventory may help to detect the imbalanced investments in the various inventory components Stock Turnover = Cost of goods sold / Average stock Where, Average Stock Cost of goods sold = Opening Stock + Closing Stock / 2 = Sales G.P Cost of goods sold / Average stock
2011 2010 11,039.67/3413.49 8,961.58/2582.7 3.23 times 3.46 times

Stock Turnover

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2011-2013

Interpretation The stock turnover ratio in the company is decreased to 3.23 times from 3.46 times in 2010-11 .it means that inventory is used frequently in a year.

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BIBLIOGRAPHY

WWW.GOOGLE.COM WWW.MONEYCONTROL.COM WWW.ECONOMICTIMES.COM WWW.TATAMOTORS.COM/HOME.HTM

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