Financial Statement

Analysis

GROUP MEMBERS
VISHNU SATHEESH
VISHNU MOHAN
ARUN S NAIR
JIMCY JOY
REVATHI
 Financial Statement Analysis

Financial Statement Analysis will help

business owners and other interested
people to analyze the data in financial
statements to provide them with better
information about such key factors for
decision making and ultimate business
survival.
 Financial Statement Analysis is the collective
name for the tools and techniques that are
intended to provide relevant information to the
decision makers. The purpose of the FSA is to
assess the financial health and performance of
the company.
FSA consist of the comparisons for the same
company over the period of time and
comparisons' of different companies either in
the same industry or in different industries
Financial Statement Analysis Purpose
To use financial statements to evaluate an organization's
Financial performance
Financial position
Prediction of future performance
To have a means of comparative analysis across time in terms of:
Intracompany basis (within the company itself)
Intercompany basis (between companies)
Industry Averages (against that particular industrys averages)
To apply analytical tools and techniques to financial statements to
obtain useful information to aid decision making.
 Financial statement analysis involves
analyzing the information provided in the
financial statements to:
Provide information about the organization's
Past performance
Present condition
Future performance
Assess the organization's:
Earnings in terms of power, persistence,
quality and growth
Solvency
 TOOLS OF FINANCIAL STATEMENT
ANALYSIS

Comparative Statements

Common Size Statements

Trend Analysis

Ratio Analysis

Fund Flow Statement

Cash Flow Statement

 Comparative Financial Statements

Comparative Financial Statements is a

statement of Financial Position of a business
designed in such a way where a comparative
study is undertaken of different accounting
items, to measure the performance of a
Business Activity.
 Types of Comparison

There are 3 types of Comparison

1) Inter Firm Comparison
2) Intra Firm Comparison
3) Inter Period Comparison
 Common Size Statements

It is a Statement in Vertical Form in which

every item of the Financial Statement is
reduced to a common base. This was
introduced with a view to overcome the
limitation of Comparative Statement.
 Types of common size statements

(1)Common Size Balance Sheet

(2)Common Size Income Statement:
 Ratio Analysis

Ratio analysis is used to evaluate various

aspects of a company's operating and
financial performance such as its efficiency,
liquidity, profitability and solvency. The trend
of these ratios over time is studied to check
whether they are improving or deteriorating.
 Liquidity Ratios
Liquidity ratios asses a businesss liquidity,
i.e. its ability to convert its assets to cash and
pay off its obligations without any significant
difficulty (i.e. delay or loss of value). Liquidity
ratios are particularly useful for suppliers,
employees, banks, etc. Important liquidity
ratios are:
Current ratio
Quick ratio (also called acid-test ratio)
Cash ratio
Cash conversion cycle
 Solvency ratios
Solvency ratios assess the long-term financial
viability of a business i.e. its ability to pay off its long-
term obligations such as bank loans, bonds payable,
etc. Information about solvency is critical for banks,
employees, owners, bond holders, institutional
investors, government, etc. Key solvency ratios are:

Debt ratio
Debt to equity ratio
Debt to capital ratio
Times interest earned ratio
Fixed charge coverage ratio
Equity multiplier
 Profitability ratios
Profitability ratios measure the ability of a business to
earn profit for its owners. While liquidity ratios and
solvency ratios explain the financial position of a business,
profitability ratios and efficiency ratios communicate the
financial performance of a business. Important
profitability ratios include:

net profit margin

gross profit margin
operating profit margin
return on assets
return on capital employed
return on equity
earnings per share
 Activity ratios
Activity ratios assess the efficiency of operations of a
business. For example, these ratios attempt to find out
how effectively the business is converting inventories into
sales and sales into cash, or how it is utilizing its fixed
assets and working capital, etc. Key activity ratios are:

inventory turnover ratio

days sales in inventory
receivables turnover ratio
days sales outstanding
payables turnover ratio
days payable outstanding
fixed asset turnover ratio
working capital turnover ratio
 COMPANIES

TATA MOTORS
NESTLE
DABUR INDIA
INDIAN OIL
EICHER
TATA MOTORS
 Brief Introduction
Largest automobile and commercial vehicle manufacturer in India
Part of USD 70 billion TATA group which consists of 98 companies
Worth of Tata motors is 22 billion dollars
Amongst fortune 500 companies
Acquired Jaguar, Land Rover for 2.8 billion USD
Subsidiaries are Jaguar Land rover, Daewoo Commercial Companies
Manufactures passenger cars, utility vehicles, commercial vehicles and
passenger buses
Employees 3,57,000 worldwide
Products include Nano, Safari, Manza, Indica and others
 Tata Motors has auto manufacturing and
assembly plants in Jamshedpur, Pantnagar,
Lucknow, Sanand, Dharwad, and Pune in India,
as well as in Argentina, South Africa, Great
Britain and Thailand.
Tata Motors Cars
Tata Daewoo
Tata Hispano
Jaguar Land Rover
Tata Technologies
TML Drivelines
Market Share by Volume
Sales

Tata
Motors
Maruti
Suzuki
Hyundai
Motors
GM

OTHERS
 CASH FLOW STATEMENT FOR THE
YEAR 2011-2016
PARTICULARS 2012 2013 2014 2015 2016

(A)Cash Flow from operating

activities 3,653.59 2,258.44 2,463.46 -2,214.30 2,346.18
(B)Cash Flow from investing
activities 144.72 991.5 2,552.91 253.37 -2,925.96
(C)Cash Flow from financing
activities -4,235.59 -4,045.69 -5,033.81 2,631.53 -71.14
Net increase/(decrease) in cash and
cash equivalents -437.28 -795.75 -17.44 670.6 -650.92
Opening Cash & Cash Equivalents
1,352.14 919.64 205.57 198.68 861.95
Effect of Foreign Exchange 0.71
Fluctuations 4.78 81.68 10.55 -7.33
Closing Cash & Cash Equivalent
919.64 205.57 198.68 861.95 211.74

INTERPRETATION
Cash from investing activity : this portion of the cash flow statement accounts for cash used to
make new investments, as well as proceeds gained from previous investments. In this case, the
amount in 2016 is -2925.96, which shows the company spend significant cash investing in project. It
hopes it will lead to future growth.
Here in this case , it has got a negative number in the year 2016 ( cash from financing activity) -
71.14%.. but this should not be mis constructed: the company is paying off its debts and dividends.
It has got an overall positive cash account balance
 Comparative balance sheet

particulars 2011 2012 percentage

EQUITY AND LIABILITIES
Shareholder's Funds 20013.3 19626.1 -2%
non current liabilities
long term borrowing 9679.42 8004.5 -17%
deferred tax liabilities 2023.16 2105.41 4%
other long term liabilities 2221.05 1959.63 -12%
long term provision 1253.25 646.26 -48%
total non current liabilities 15176.88 12715.8 -16%
current liabilities
short term borrowing 958.77 3007.13 214%
trade payables 8817.27 8744.83 -1%
other current liabilities 3210.37 7470.95 133%
short term provision 2013.86 2954.56 47%
total current liabilities 19000.27 22177.47 17%
Total 54190.45 54519.28 1%
Assets
tangible assets 10911.96 11746.47 8%
intangible assets 2505.11 3273.05 31%
capital work in progress 1719.86 1910.3 11%
intangible assets under development 2079.17 2126.37 2%
non current investments 22538.21 17903.29 -21%
long term loans & advances 3429.64 3488.11 2%
other non current assets 34.84 100.42 188%
Total non current assets 43218.79 40545.01 -6%
current assets
current investments 86 2590.26 2912%
inventories 3891.39 4588.23 18%
trade receivables 2602.88 2708.32 4%
cash & bank balance 2428.92 1840.96 -24%
short term loans &advances 1850.62 1871.74 1%
other current assets 111.85 113.41 1%
total current assets 10971.66 13712.92 25%
Total assets 54190.45 54519.28 1%
Interpretation
The comparative balance sheet of the company
shows that during 2012 short term borrowing has
been increased by 214% ,other liabilities has been
increased by 133% , other non current assets has
been 188% current investments
 Comparative balance sheet
PARTICULARS 2012 2013 PERCENT
EQUITY AND LIABILITIES
Share Capital 634.75 638.07 0.52%
Shareholder's Funds 19,367.66 19,134.84 -1.20%
Secured Loans 4,107.76 2,397.97 -41.62%
Unsecured Loans 3,896.74 5,653.81 45.09%
Deferred Tax Assets / Liabilities 2,105.41 1,963.91 -6.72%
Other Long Term Liabilities 1,959.63 1,238.44 -36.80%
Long Term Provisions 685.56 691.19 0.82%
Total Non-Current Liabilities 12,755.10 11,945.32 -6.35%
Trade Payables 8,705.53 8,455.02 -2.88%
Current Liabilities
Other Current Liabilities 7,470.95 4,923.10 -34.10%
Short Term Borrowings 3,007.13 6,216.91 106.74%
Short Term Provisions 2,954.56 1,509.58 -48.91%
Total Current Liabilities 22,138.17 21,104.61 -4.67%
Total Liabilities 54,260.93 52,184.77 -3.83%
ASSETS
Gross Block 24,985.39 27,067.18 8.33%
Less: Accumulated Depreciation 9,965.87 11,611.44 16.51%
Net Block 15,019.52 15,455.74 2.90%
Capital Work in Progress 1,910.30 1,507.84 -21.07%
Intangible assets under development 2,126.37 3,244.96 52.61%
Non Current Investments 17,903.29 18,171.71 1.50%
Long Term Loans & Advances 3,488.11 2,880.70 -17.41%
Other Non Current Assets 100.42 788.86 685.56%
Total Non-Current Assets 40,548.01 42,049.81 3.70%
Total Reserves 18,732.91 18,496.77 -1.26%
Current Assets Loans & Advances
Currents Investments 2,590.26 1,762.68 -31.95%
Inventories 4,588.23 4,455.03 -2.90%
Cash and Bank 1,840.96 462.86 -74.86%
Other Current Assets 113.41 1,277.50 1026.44%
Short Term Loans and Advances 1,871.74 358.85 -80.83%
Total Current Assets 13,712.92 10,134.96 -26.09%
Net Current Assets (Including Current Investments) -8,425.25 -10,969.65 30.20%
Total Current Assets Excluding Current Investments 11,122.66 8,372.28 -24.73%
Miscellaneous Expenses not written off 0 0
Total Assets 54,260.93 52,184.77 -3.83%
 Interpretation

The comparative balance sheet of the

company shows that during 2013 Short
Term Borrowings has been decreased to
106 %, net block asset has been increased
to 2.90% ,non current asset was increased
highly to 685 % & Other Current Assets has
also increased more than 1026.44% In
2012 .
 Comparative balance sheet

PARTICULARS 2013 2014 PERCENT

EQUITY AND LIABILITIES
Share Capital 638.07 643.78 0.89%
Shareholder's Funds 19,134.84 19,176.65 0.22%
Secured Loans 2,397.97 2,505.37 4.48%
Unsecured Loans 5,653.81 7,241.08 28.07%
Deferred Tax Assets / Liabilities 1,963.91 43.11 -97.80%
Other Long Term Liabilities 1,238.44 1,155.48 -6.70%
Long Term Provisions 691.19 815.2 17.94%
Total Non-Current Liabilities 11,945.32 11,760.24 -1.55%
Trade Payables 8,455.02 9,672.36 14.40%
Current Liabilities
Other Current Liabilities 4,923.10 2,463.18 -49.97%
Short Term Borrowings 6,216.91 4,769.08 -23.29%
Short Term Provisions 1,509.58 1,892.91 25.39%
Total Current Liabilities 21,104.61 18,797.53 -10.93%
Total Liabilities 52,184.77 49,734.42 -4.70%
ASSETS
Gross Block 27,067.18 28,791.45 6.37%
Less: Accumulated Depreciation 11,611.44 13,550.88 16.70%
Net Block 15,455.74 15,240.57 -1.39%
Capital Work in Progress 1,507.84 1,716.85 13.86%
Intangible assets under development 3,244.96 4,638.22 42.94%
Non Current Investments 18,171.71 18,357.57 1.02%
Long Term Loans & Advances 2,880.70 2,072.96 -28.04%
Other Non Current Assets 788.86 969.19 22.86%
Total Non-Current Assets 42,049.81 42,995.36 2.25%
Total Reserves 18,496.77 18,532.87 0.20%
Current Assets Loans & Advances
Currents Investments 1,762.68 100.85 -94.28%
Inventories 4,455.03 3,862.53 -13.30%
Cash and Bank 462.86 226.15 -51.14%
Other Current Assets 1,277.50 996.56 -21.99%
Short Term Loans and Advances 358.85 336.27 -6.29%
Total Current Assets 10,134.96 6,739.06 -33.51%
Net Current Assets (Including Current Investments) -10,969.65 -12,058.47 9.93%
Total Current Assets Excluding Current Investments 8,372.28 6,638.21 -20.71%
Miscellaneous Expenses not written off 0 0
Total Assets 52,184.77 49,734.42 -4.70%
 Interpretation

The comparative balance sheet of the

company shows that during 2014 there
was no much change ,other than Currents
Investments . decreased -94% overall it
was quite bad performance.
 Comparative balance sheet
PARTICULARS 2014 2015 percent
EQUITY AND LIABILITIES
Share Capital 643.78 643.78 0.00%
Shareholder's Funds 19,176.65 14,862.59 -22.50%
Secured Loans 2,505.37 1,203.36 -51.97%
Unsecured Loans 7,241.08 11,115.60 53.51%
Deferred Tax Assets / Liabilities 43.11 0 -100.00%
Other Long Term Liabilities 1,155.48 286.8 -75.18%
Long Term Provisions 815.2 2,104.19 158.12%
Total Non-Current Liabilities 11,760.24 14,709.95 25.08%
Trade Payables 9,672.36 8,852.65 -8.47%
Current Liabilities
Other Current Liabilities 2,463.18 3,142.88 27.59%
Short Term Borrowings 4,769.08 7,762.01 62.76%
Short Term Provisions 1,892.91 613.09 -67.61%
Total Current Liabilities 18,797.53 20,370.63 8.37%
Total Liabilities 49,734.42 49,943.17 0.42%
ASSETS
Gross Block 28,791.45 31,814.21 10.50%
Less: Accumulated Depreciation 13,550.88 16,030.98 18.30%
Net Block 15,240.57 15,783.23 3.56%
Capital Work in Progress 1,716.85 1,349.95 -21.37%
Intangible assets under development 4,638.22 4,690.84 1.13%
Non Current Investments 18,357.57 16,966.95 -7.58%
Long Term Loans & Advances 2,072.96 1,275.88 -38.45%
Other Non Current Assets 969.19 1,303.35 34.48%
Total Non-Current Assets 42,995.36 41,370.20 -3.78%
Total Reserves 18,532.87 14,218.81 -23.28%
Current Assets Loans & Advances
Currents Investments 100.85 20.22 -79.95%
Inventories 3,862.53 4,802.08 24.32%
Cash and Bank 226.15 944.75 317.75%
Other Current Assets 996.56 1,072.30 7.60%
Short Term Loans and Advances 336.27 619.14 84.12%
Total Current Assets 6,739.06 8,572.97 27.21%
Net Current Assets (Including Current Investments) -12,058.47 -11,797.66 -2.16%
Total Current Assets Excluding Current Investments 6,638.21 8,552.75 28.84%
Miscellaneous Expenses not written off 0 0
Total Assets 49,734.42 49,943.17 0.42%
 Interpretation

The comparative balance sheet of the

company shows that during 2015, Deferred
Tax Assets / Liabilities was not their. Cash
and Bank, Short Term Loans and Advance
,has been increased 317.75% 84.12%
respectively
 Comparative balance sheet
PARTICULARS 2015 2016 percent
EQUITY AND LIABILITIES
Share Capital 643.78 679.18 5.50%
Shareholder's Funds 14,862.59 22,368.08 50.50%
Secured Loans 1,203.36 1,262.69 4.93%
Unsecured Loans 11,115.60 9,425.25 -15.21%
Deferred Tax Assets / Liabilities 0 0
Other Long Term Liabilities 286.8 210.12 -26.74%
Long Term Provisions 2,104.19 1,409.05 -33.04%
Total Non-Current Liabilities 14,709.95 12,307.11 -16.33%
Trade Payables 8,852.65 8,916.60 0.72%
Current Liabilities
Other Current Liabilities 3,142.88 4,267.23 35.77%

Short Term Borrowings 7,762.01 3,351.74 -56.82%

Short Term Provisions 613.09 1,215.49 98.26%
Total Current Liabilities 20,370.63 17,751.06 -12.86%
Total Liabilities 49,943.17 52,426.25 4.97%
ASSETS
Gross Block 31,814.21 34,291.46 7.79%
Less: Accumulated Depreciation 16,030.98 18,527.49 15.57%
Net Block 15,783.23 15,763.97 -0.12%
Capital Work in Progress 1,349.95 1,469.71 8.87%
Intangible assets under development 4,690.84 5,011.18 6.83%
Non Current Investments 16,966.95 16,975.46 0.05%
Long Term Loans & Advances 1,275.88 1,437.56 12.67%
Other Non Current Assets 1,303.35 1,062.46 -18.48%
Total Non-Current Assets 41,370.20 41,720.34 0.85%
Total Reserves 14,218.81 21,688.90 52.54%
Current Assets Loans & Advances
Currents Investments 20.22 1,736.00 8485.56%
Inventories 4,802.08 4,902.20 2.08%
Cash and Bank 944.75 452.08 -52.15%
Other Current Assets 1,072.30 1,246.52 16.25%
Short Term Loans and Advances 619.14 800.65 29.32%
Total Current Assets 8,572.97 10,705.91 24.88%
Net Current Assets (Including Current Investments) -11,797.66 -7,045.15 -40.28%
Total Current Assets Excluding Current Investments 8,552.75 8,969.91 4.88%
Miscellaneous Expenses not written off 0 0
Total Assets 49,943.17 52,426.25 4.97%
 Interpretation

The comparative balance sheet of the

company shows that during 2016
Shareholder's Funds Currents Investments
has been increase .. 50.50%, 8485.56%
respectively company show positive
performance
The company is in sound position in terms of
the current ratio .The company is in a
position to pay off the debts .the long term
borrowing is negative which means that the
company is not borrowing funds ,so by the
comparison this balance sheet is having a
sound financial position