Escolar Documentos
Profissional Documentos
Cultura Documentos
SUBMITTED BY:
SHAHTAJ KHAN
BATCH:
MBA 2016-18 (BLOCK-I)
MODULE:
FINANCIAL ACCOUNTING AND ANALYSIS
MODULE LEADER:
Dr. MEGHNA DANGI
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide (Mrs.
Meghna Dangi) for her exemplary guidance, monitoring and constant encouragement
throughout the project.
I am obliged to my batch mates for the valuable information provided by them in their
respective fields. I am grateful for their cooperation during the period of my assignment.
--Shahtaj Khan
TABLE OF CONTENTS
About Tata Motors
Company Profile
Ratio Analysis
LIQUIDITY RATIOS
Current Ratio
Quick Ratio
PROFITABILITY RATIOS
Gross Profit
Return on Equity
Return on Asset
LONGTERMSOLVENCY RATIOS
Dividend Yield
Limitations
Conclusion
Bibliography
4
6
7
8
10
13
19
21
25
26
27
In 2008, Tata Motors acquired the English car maker Jaguar Land Rover, manufacturer of the
Jaguar and Land Rover from Ford Motor Company.
In May 2009, Tata unveiled the Tata World Truck range jointly developed with Tata
Daewoo; the range went on sale in South Korea, South Africa, the SAARC countries, and the
Middle East at the end of 2009.
Tata acquired full ownership of Hispano Carrocera in 2009.
In 2009, its Lucknow plant was awarded the "Best of All" Rajiv Gandhi National Quality
Award.
In 2010, Tata Motors acquired an 80% stake in the Italian design and engineering company
Trilix for 1.85 million. The acquisition formed part of the company's plan to enhance its
styling and design capabilities.
In 2012, Tata Motors announced it would invest around 6 billion in the development of
Futuristic Infantry Combat Vehicles in collaboration with DRDO.
In 2013, Tata Motors announced it will sell in India, the first vehicle in the world to run on
compressed air and dubbed "Mini CAT".
In 2014, Tata Motors introduced first Truck Racing championship in India "T1 Prima Truck
Racing Championship".
On 26 January 2014, the Managing Director Karl Slym was found dead. He fell from the
22nd floor to the fourth floor of the Shangri-La Hotel in Bangkok, where he was to attend a
meeting of Tata Motors Thailand.
On 2 November 2015, Tata Motors announced Lionel Messi as global brand ambassador at
New Delhi , to promote and endorse passenger vehicles globally
COMPANY PROFILE
Tata Motors is part of the USD 100 billion Tata group founded by Jamsetji Tata in 1868.
Sustainability and the spirit of giving back to society is a core philosophy and good
corporate citizenship is strongly embedded in our DNA. Tata Motors is Indias largest
automobile company. Where they try to bring to the customer a proven legacy of thought
leadership with respect to customer-centricity and technology. By driving the transformation
of the Indian commercial vehicle landscape by offering customers leading edge auto
technologies, packaged for power performances and lowest life-cycle costs. New passenger
cars are designed for superior comfort, connectivity and performance. What keeps TATA
Motors at the forefront of the market is our focus on future-readiness and our pipeline of
tech-enabled products. Design and R&D centres located in India, the UK, Italy and Korea
strive to innovate new products that achieve performances that will fire the imagination of
GenNext customers. Across the globally dispersed organisation that TATA Motors is today,
there is one thing that energises and drives all our people and our activities and that is their
mission to be passionate in anticipating and providing the best vehicles and experiences that
excite our customers globally.
RATIO ANALYSIS
LIQUIDITY RATIOS
Current Ratio
Quick Ratio
PROFITABILITY RATIOS
Gross Profit
Return on Equity
Return on Asset
Dividend Yield
LIQUIDITY RATIOS
CURRENT RATIO:
Current Ratio = Current Assets / Current Liabilities
Year
Total
Current
Assets
Total
Current
Liabilities
Current Ratio
March'16
March'15
March'14
March'13
March'12
10,705.91
8,572.97
5,305.38
6,739.06
10,134.96
17,751.06
0.6
20,370.63
0.42
13,334.13
0.39
18,797.53
0.48
21,104.61
0.62
Current Ratio
0.7
0.6
0.5
0.4
Current Ratio
0.3
0.2
0.1
0
March'16 March'15 March'14 March'13 March'12
INTERPRETATION
The higher the ratio, the more protected are the short term creditors. This indicates that the
company is in a position to pay off its creditors. If the ratio is less than ideal which is 2:1,
then the working capital is less than required.
In 2016, 2015, 2014, 2013&2012 the ratio has gone up in 2016 to 0.62:1 respectively. The
Current ratio of company is almost stable but can be a big threat to the company which will
harm their day to day activities of the company in long run.
QUICK RATIO :
Quick Ratio = (Current Assets (Stock + Prepaid Expense))/Current Liabilities
Year
Total
Current
Assets
Inventories
Quick Assets
Quick Liabilities
Quick Ratio
March'16
March'15
March'14
March'13
March'12
10,705.91
8,572.97
7,674.97
6,739.06
10,134.96
4,902.20
5,803.71
17,751.06
0.33
4,802.08
3,770.89
20,370.63
0.19
4,672.81
3,004.08
16,909.30
0.177
3,862.53
2,876.53
18,797.53
0.27
4,455.03
5,679.93
21,101.61
0.41
Quick Ratio
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
March'16
March'15
March'14
March'13
March'12
INTERPRETATION
Liquid Ratio is a better test of financial liquidity because it places more emphasis on
immediate conversion of assets into cash than the current ratio. A liquid ratio of 1:1 is
considered satisfactory and ideal. Here, the liquid ratio is below ideal ratio which indicates
below satisfactory performance. The overall result for the ratio is not satisfactory. Till 2016
companies liquidity ratio is under control because the maximum level they have reached is
0.33 that is of previous financial year 2015-2016. So can say that companys financial
liquidity position is better.
Year
Net Sales
Fixed Assets
Fixed
Assets
Ratio
Turnover
March'16
42,369.82
22,244.86
March'12
54,306.56
19,056.19
1.904
1.663
2.849
1.621
2.215
1.5
1
0.5
0
1
INTEPRETATION
The company has not shown a symmetrical performance in accordance to the industrial
performance, with an average fixed asset turnover ratio of 4.44. However, a low figure of
fixed asset turnover ratio can be traced down to the fact that either the sales of the company
are fairly low or the company has made a huge investment recently, which is indeed the case
with Tata Motors.
10
Year
March'16
March'12
Net Sales
42,369.82
36,294.74
34,319.28
44,765.72
54,306.56
Working Capital
5,232.15
3,799.03
6,355.07
4,752.80
4,036.67
8.09
9.55
5.4
9.41
13.45
6
4
2
0
1
INTERPRETATION
The aforementioned graph shows an uneven working capital turnover ratio as recorded by the
company. Their current liabilities account for almost double of their current assets. Also the
accounts receivables of the company is very high in comparison to its competitors. The
numbers took a nosedive, proving the in-efficiency of the management in utilizing its
working capital to generate sales and poor operational activities of the company.
11
Year
March'16
March'12
Net Sales
42,369.82
36,294.74
34,319.28
44,765.72
54,306.56
Capital Employed
31,762.07
24,743.03
20,358.05
16,823.06
10,356.82
1.33
1.46
1.685
2.66
5.243
3
2
1
0
1
INTERPRETATION
The aforementioned graph shows a steady performance of the company in terms of Capital
Employed Turnover Ratio, except in year 2012. In 2012 the net sales of the company was
excessively high and was mainly propelled by the overwhelming increase of 136% in the
sales made by Jaguar Land Rover. Owing to this, Tata Motors was able to record a peak in its
Capital Employed Turnover
12
PROFITABILITY RATIO
GROSS PROFIT:
Gross Profit = Gross Profit / Net Sales * (100)
Or
Gross Profit = Net Sales + Closing Stock Purchases Direct Expense
Or
Gross Profit = Net Sales - COGS
Year
March'16
Gross Profit
-0.32
Margin
March'15
March'14
March'13
March'12
-10.58
-8.59
-0.22
4.73
-4
5
Gross Profit Margin
-6
-8
-10
-12
INTERPRETATION
Gross profit ratio shows the relation between gross profit and sales. That means how much
proportion of gross profit in sales.
13
Year
Net Profit
March'16
March'15
March'14
March'13
March'12
0.55
-13.05
0.0097
0.0067
0.0228
Net Profit
2
0
-2
-4
-6
Net Profit
-8
-10
-12
-14
INTERPRETATION:
Net profit ratio shows the relationship of PAT with the sales. This ratio is in 2016, it is
0.55%, in 2015 it is -13.05%, in 2014 it is 0.0097%, in 2013 it is 0.0067%, in 2012 it is
0.228% which means PAT is always near to 3% to 5%. Because of Tax charges is increasing
year by year.
14
RETURN ON EQUITY:
Year
Net Profit
Equity
Return
Equity
on
March'16
2,77,299.90
679.18
March'15
2,66,840.71
643.78
March'14
2,35,517.45
643.78
March'13
1,92,057.88
638.07
March'12
1,68,020.44
634.75
408.28
414.49
365.835
300.998
264.703
Return on Equity
450
400
350
300
250
200
150
100
50
0
Return on Equity
Interpretation:
Return on equity is a measure of profitability that calculates how many Rupees of profit a
company generates with each rupee of shareholders' equity. Here return on equity is moderate
to high.
15
RETURN ON ASSET:
Year
Net Profit
Total Asset
Return on Asset
March'16
2,77,299.90
52,426.25
5.289
March'15
2,66,840.71
49,943.17
5.342
March'14
2,35,517.45
49,943.17
4.715
March'13
1,92,057.88
49,734.42
3.861
March'12
1,68,020.44
52,184.77
3.219
Return on Asset
6
4
2
0
Return on Asset
Interpretation:
Return on assets is an indicator of how profitable a company is relative to its
total assets. ROA gives an idea as to how efficient management is at using its assets to
generate earnings. It is 5.289 in 2016 as compared to 3.219 in 2012
16
Year
Net Sales
Total Assets
Asset Turnover Ratio
March'16
42,369.82
52,426.25
0.808
March'15
36,294.74
49,943.17
0.726
March'14
34,288.11
49,943.17
0.686
March'13
44,765.72
49,734.42
0.9
March'12
54,306.56
52,184.77
1.04
0.2
0
Interpretation:
Asset turnover ratio is the ratio of the value of a company's sales or revenues generated
relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator
of the efficiency with which a company is deploying its assets in generating revenue. It keeps
fluctuating every year as assets keep increasing.
17
Year
Net Profit
Net Sales
Profit Margin
March'16
2,77,299.90
42,369.82
6.54
March'15
2,66,840.71
36,294.74
7.35
March'14
2,35,517.45
34,288.11
6.86
March'13
1,92,057.88
44,765.72
4.29
March'12
1,68,020.44
54,306.56
3.09
3,00,000.00
2,50,000.00
2,00,000.00
1,50,000.00
1,00,000.00
50,000.00
0.00
March'16
March'15
March'14
March'13
March'12
Interpretation:
The profit margin ratio, also called the return on sales ratio or gross profit ratio, is a
profitability ratio that measures the amount of net income earned with each of sales generated
by comparing the net income and net sales of a company.
18
DEBT EQUITY:
Debt Equity = Debt / Equity * 100
Debt = Long Term Debts
Equity Shareholders Fund
Year
Debt equity
Mar 16
17.9241
Mar 15
19.258
Mar 14
6.14806
Mar 13
34.1147
Mar 12
14.9435
Debt equity
35
30
25
20
Debt equity
15
10
5
0
Mar 16
Mar 15
Mar 14
Mar 13
Mar 12
INTERPRETATION
The debt ratio is fluctuating very frequently. As we can see in diagram that it is going up and
down year by year and at highest level at 2016. Because decrease in CE more than total debt.
In Tata motors Capital Employed is more than the Total debts. So the ratio is decreasing from
in last financial year.
19
LIABITLITY TO EQUITY:
Year
Total Liabilities
Total Equity
Liability to Equity
Ratio
54.243
52.299
52.314
48.229
Interpretation:
Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage, calculated
by dividing a company's total liabilities by its stockholders' equity. The D/E ratio indicates
how much debt a company is using to finance its assets relative to the amount of value
represented in shareholders' equity
20
Year
Market Price Per
Share
Earningg Per Share
Price Earning Ratio
10
10
10
10
0.68
14.705
-14.72
-0.679
-15
-0.666
1.03
9.708
0.93
10.752
6
4
2
0
-2
Interpretation:
P/E is short for the ratio of a company's share price to its per-share earnings. As the name
implies, to calculate the P/E, you simply take the current stock price of a company and divide
by its earnings per share (EPS): P/E Ratio = Market Value per Share. The price has increased
from negative to positive which is relatively high.
21
DIVIDEND YIELD:
Year
Dividend Per Share
Market Price Per
Share
Dividend Yield
10
10
10
10
2.5
10
10
Dividend Yield
10
9
8
7
6
5
4
3
2
1
0
Dividend Yield
Interpretation:
Dividend expressed as a percentage of a current share price. The firm has a yield of 2.5.
22
Mar 15
Mar 14
Mar 13
Mar 12
12 mths
12 mths
12 mths
12 mths
12 mths
679.18
643.78
643.78
683.07
623.89
679.18
643.78
643.78
683.07
623.89
2.29
Reserves
21,666.03
14,195.94
18,510.00
18,473.46
Networth
22,345.21
14,839.72
19,153.78
19,111.53
Secured Loans
3,717.42
4,803.26
4,450.01
5,877.72
6,915.77
Unsecured Loans
10,322.26
15,277.71
10,065.52
8,390.97
4,095.86
Total Debt
14,039.68
20,080.97
14,515.53
14,268.69
11,011.63
Total Liabilities
36,384.89
34,920.69
33,669.31
33,380.22
30,613.89
Gross Block
29,204.83
27,973.79
26,130.82
25,190.73
23,676.46
22.87
22.87
22.87
23.31
23.75
13,440.86
12,190.56
10,890.25
9,734.99
8,656.94
Net Block
15,741.10
15,760.36
15,217.70
15,432.43
14,995.77
6,480.89
6,040.79
6,355.07
4,752.80
4,036.67
Investments
18,711.46
16,987.17
18,458.42
19,934.39
20,493.55
Inventories
4,902.20
4,802.08
3,862.53
4,455.03
4,588.23
Sundry Debtors
1,568.46
1,114.48
1,216.70
1,818.04
2,708.32
452.08
944.75
226.15
462.86
1,840.96
6,922.74
6,861.31
5,305.38
6,735.93
9,137.51
4,547.19
4,270.67
4,374.98
5,305.91
5,832.03
11,469.93
11,131.98
9,680.36
12,041.84
14,969.54
Current Liabilities
13,393.95
12,282.33
13,334.13
16,580.47
20,280.82
Provisions
2,624.54
2,717.28
2,708.11
2,200.77
3,600.82
16,018.49
14,999.61
16,042.24
18,781.24
23,881.64
-4,548.56
-3,867.63
-6,361.88
-6,739.40
-8,912.10
Total Assets
36,384.89
34,920.69
33,669.31
33,380.22
30,613.89
Sources Of Funds
Application Of Funds
23
Mar 15
Mar 14
Mar 13
Mar
12
Sales Turnover
46,646.67
39,524.34
37,758.00
49,319.73
59,220.94
Excise Duty
4,276.85
3,229.60
3,469.89
4,554.01
4,914.38
Net Sales
42,369.82
36,294.74
34,288.11
44,765.72
54,306.56
Other Income
1,769.71
1,477.66
3,293.17
1,672.00
-11.16
Stock Adjustments
-22.94
878.82
-371.72
143.60
623.84
Total Income
44,116.59
38,651.22
37,209.56
46,581.32
54,919.24
Raw Materials
30,043.29
28,367.83
26,040.59
33,764.40
41,081.79
402.36
395.88
392.09
484.66
550.89
Employee Cost
3,026.75
3,091.46
2,877.69
2,837.00
2,691.45
424.61
437.47
428.74
425.76
234.25
6,134.33
6,118.40
5,088.43
5,689.19
6,194.47
Total Expenses
40,031.34
38,411.04
34,827.54
43,201.01
50,752.85
Operating Profit
2,315.54
-1,237.48
-911.15
1,708.31
4,177.55
PBDIT
4,085.25
240.18
2,382.02
3,380.31
4,166.39
Interest
1,481.11
1,611.68
1,337.52
1,387.76
1,218.62
PBDT
2,604.14
-1,371.50
1,044.50
1,992.55
2,947.77
Depreciation
2,453.75
2,603.22
2,070.30
1,817.62
1,606.74
150.39
-3,974.72
-1,025.80
174.93
1,341.03
150.39
-3,974.72
-1,025.80
174.93
1,341.03
Tax
-83.84
764.23
-1,360.32
-126.88
98.80
234.23
-4,738.95
334.52
301.81
1,242.23
9,988.05
10,043.21
8,786.95
9,436.61
9,671.06
61.00
0.00
648.56
645.20
1,280.70
12.00
0.00
93.40
79.03
183.02
33,956.80
32,186.80
32,186.80
31,901.16
31,735.47
0.69
-14.72
1.04
0.95
3.91
25.00
0.00
100.00
100.00
200.00
65.80
46.10
59.51
59.91
61.77
Expenditure
Other
Manufacturing
Expenses
Miscellaneous
Expenses
Reported
Profit
Total
Addition
Net
Value
Equity Dividend
Corporate
Dividend Tax
Per share data
(annualised)
Shares in issue
(lakhs)
Earning Per Share
(Rs)
Equity Dividend
(%)
Book Value (Rs)
24
LIMITATIONS
25
CONCLUSION
Tata Motors is far more aggressive option. The company is an automobile manufacturer with
a massive market share in India and control of the global Land Rover and jaguar brands. The
company is highly leveraged and demand for automobile is highly dependent on economic
conditions. However, it is made shift from focusing on its domestic market to operating on a
global scale. Tata motors should take benefit from taking knowledge and skills from its
global brands and applying that in its domestic business. This should allow Tata to compete
more effectively as the Indian car market expands with an expanding customer class. It
should also allow the company to branch out its home market nameplates. It seems that Tata
motors have this recipe for success and only time will tell where this car manufacturer will
head next.
26
BIBLIOGRAPHY
http://www.moneycontrol.com/
http://www.tatamotors.com/
27