Vishweshwar Education Society’s

Indira Institute of Business Management, Sanpada, Navi Mumbai

Vishweshwar Education Society’s

Indira Institute of Business Management

PROJECT REPORT

ON

A STUDY ON FINANCIAL RATIO ANALYSIS OF BAJAJ

FINSERV
(For 5 years from 2016 to 2020)

SUBMITTED TO

INDIRA INSTITUTE OF BUSINESS MANAGEMENT, NAVI

MUMBAI

BY

Jobin Joy

Roll No. 2022008

Batch No 2022-24

IN PARTIAL FULFILLMENT OF

MASTER OF MANAGEMENT STUDIES (MMS),

UNIVERSITY OF MUMBAI

MONTH, 2023
 DECLARATION
I, Ms. Jobin Joy hereby declare that this project report is the record of authentic work carried out
by me during the period from 08 May 2023 to 10 July 2023 and has not been submitted to any other
University or Institute for the award of any degree / diploma etc.

Signature

Jobin Joy

Date:
 Vishweshwar Education Society’s
Indira Institute of Business Management, Sanpada, Navi Mumbai

CERTIFICATE FROM THE COMPANY/ORGANISATION

 CERTIFICATE

This is to certify that the project entitled ‘A STUDY ON FINANCIAL RATIO ANALYSIS
OF BAJAJ FINSERV’ submitted by Mr. Jobin Joy of Indira Institute of Business
Management in partial fulfillment for the award of Master of Management Studies of
Mumbai University is his original work and does not form any part of the projects undertaken
previously.

This project report is the record of authentic work carried out by his during the period
from 08 May 2023 to 10 July 2023.

He has worked under my guidance.

Prof. Nikhil Shirshat Dr. Susen Varghese

(Signature of Faculty Guide) (Signature of the

Director)

Place: Navi Mumbai

Date:
 Vishweshwar Education Society’s
Indira Institute of Business Management, Sanpada, Navi Mumbai

ACKNOWLEDGEMENT

The project is a golden opportunity to me for learning and self- development. I feel very
lucky and blessed to have talented and wonderful people who lead me through in the
completion of this project.

I express my deepest thanks to the Director of Indira Institute of Business Management, Dr.
Susen Varghese.

My special thanks to my mentor Prof. Nikhil Shirsat for his valuable time and guidance. He
took time from busy schedule and guiding me to carry out my summer internship project at
My Sharekhan Ltd.

A humble thanks to all other faculties for helping me whenever I need. I also feel delighted to
express my thanks to library staff and non-teaching staffs who helped me to complete my
project on time.

I express my sincere gratitude to My Sharekhan Ltd. for giving me this opportunity. My

special thanks to Mr. Praful Sharma, (Kalyan, Mumbai) for his guidance and support. I am
thankful to the entire staff of My Sharekhan Ltd. for aiding me to complete the internship
successfully.

My gratitude to my friends and family for motivating and encouraging me through the
journey. I express my heartfelt acknowledgement for the guidance and support from them.
 Executive summary

About the Project

Financial ratios are widely used for modelling purposes both by practitioners and
researchers. The firm involves many interested parties, like the owners, management,
personnel, customers, suppliers, competitors, regulatory agencies, and academics, each
having their views in applying financial statement analysis in their evaluations. Practitioners
use financial ratios, for instance, to forecast the future success of companies, while the
researchers' main interest has been to develop models exploiting these ratios. Many distinct
areas of research involving financial ratios can be discerned. Historically one can observe
several major themes in the financial analysis literature. There is overlapping in the
observable themes, and they do not necessarily coincide with what theoretically might be the
best founded areas.

Financial Management is the specific area of finance dealing with the financial
decision corporations make, and the tools and analysis used to make the decisions. The
discipline as a whole may be divided between long-term and short-term decisions and
techniques. Both share the same goal of enhancing firm value by ensuring that return on
capital exceeds cost of capital, without taking excessive financial risks.

Before understanding the meaning of analysis of financial statements, it is necessary

to understand the meaning of ‘analysis’ and ‘financial statements‘.

Thus, analysis of financial statements means establishing meaningful relationship

between various items of the two financial statements, i.e., income statement and position
statement.

After preparation of the financial statements, one may be interested in knowing the
position of an enterprise from different points of view. This can be done by analyzing the
financial statement with the help of different tools of analysis such as ratio analysis, funds
flow analysis, cash flow analysis, comparative statement analysis, etc. Here I have done
financial analysis by ratios. In this process, a meaningful relationship is established between
two or more accounting figures for comparison.
 Vishweshwar Education Society’s
Indira Institute of Business Management, Sanpada, Navi Mumbai

Table of Contents

Sr. Title Page No.

1 INTRODUCTION
1.1 Relevance of the Project
1.2 Introduction Of the Topic
1.3 Objectives of the study
1.4 Scope of the study
1.5 Rationale Of the Study
1.4 Limitations of the Study

2 PROFILE OF THE
COMPANY
2.1 History and general
2.2 Company Profile
information
2.3 Competitors
2.4 Swot Analysis

3 PROCESS AND
WORKFLOW
3.1 Research Methodology
3.2 Types of data
3.3 Process and workflow details
of the organization under
study
4 FINDINGS

5 RECOMMENDATIONS
6 CONCLUSION

7 BIBLIOGRAPHY
1.1 Relevance of the project
The relevance of a project on financial planning and investments in share
market in India, as a part of the MMS (Master of Management Studies)
curriculum at the University of Mumbai, holds significant importance for
several reasons.
 Practical Application of Knowledge
 Understanding Personal Finance
 Risk Management and Portfolio Diversification
 Knowledge of Regulatory Framework

1.2 Introduction of the topic

RATIO ANALYSIS

The term “Ratio” refers to the numerical and quantitative relationship between two
items or variables. This relationship can be exposed as

• Percentages
• Fractions
• Proportion of numbers

Ratio analysis is defined as the systematic use of the ratio to interpret the financial
statements. Hence the strengths and weaknesses of a firm, as well as its historical
performance and current financial condition can be determined. Ratio reflects a quantitative
relationship helps to form a quantitative judgment.

Guidelines or Precautions for Use of Ratios

The calculation of ratios may not be a difficult task but their useis not easy. Following
guidelines or factors may be kept in mind whileinterpreting various ratios is

• Accuracy of financial statements

• Objective or purpose of analysis
• Selection of ratios
• Use of standards
• Caliber of the analysis

Importance of Ratio Analysis

• Aid to measure general efficiency

• Aid to measure financial solvency
 • Aid in forecasting and planning
• Facilitate decision making
• Aid in corrective action
• Aid in intra-firm comparison
• Act as a good communication
• Evaluation of efficiency

1.3 Objectives of the study

1. To understand concept of Ratio Analysis.
2. To compare value is ratio of Bajaj Finserv for the period 2016-2020.

1.4 Scope of the study

1. The study has great significance and provides benefits to various parties whom
directly or indirectly interact with the company.
2. It is beneficial to management of the company by providing crystal clear picture
regarding important aspects like liquidity, leverage, activity and profitability.
3. The study is also beneficial to employees and offers motivation by showing how
actively they are contributing for company growth.
4. The investors who are interested in investing in the company’s shares will also get
benefited by going through the study and can easily take a decision whether to
invest or not to invest in the company’s shares.
5. To know whether the company is growing or incurring losses or it is stagnant in its
performance.

1.5 Rationale Of the Study

The rationale behind conducting a study on the financial ratio analysis of a

company like Bajaj Finserv can be multifaceted and valuable for various
stakeholders, including investors, financial analysts, and the company
itself. Here are several reasons why such a study would be beneficial:
1. Performance Evaluation: Financial ratios provide a comprehensive
view of a company's financial health. Analyzing Bajaj Finserv's ratios

10
 can help evaluate its operational efficiency, profitability, liquidity,
solvency, and overall performance.
2. Investment Decision-Making: Investors and potential investors can
use the findings to make informed decisions about buying, selling, or
holding Bajaj Finserv's stocks or bonds. Ratios can provide insights into
the company's growth prospects and its ability to generate returns for
shareholders.
3. Comparative Analysis: Comparing Bajaj Finserv's financial ratios with
its competitors or industry averages can help in understanding its
relative position in the market and identifying its competitive strengths
and weaknesses.
4. Risk Assessment: Ratio analysis assists in identifying risks associated
with the company's financial structure. For instance, high debt ratios
could signify potential financial risk, while strong liquidity ratios
indicate the company’s ability to meet short-term obligations.

1.5 Limitations of the Study

1. The study provides an insight into the financial, personnel, marketing and other
aspects of Bajaj Finserv. Every study will be bound with certain limitations.
2. The study is done only on the Balance sheet and profit and Loss A/c.
3. One of the factors of the study was lack of availability of sample information. Most
of the information has been kept confidential and as such as not assed as art of
policy of company.
4. Time is an important limitation. The whole study was conducted in a period of 60
days, which is not sufficient to carry out proper interpretation and analysis.
5. Study is based on information provided by the company.
 CHAPTER 2
PROFILE OF THE COMPANY

12
2.1 History and general information

2.2 Company Profile

2.3 Competitors
2.4 Swot Analysis

14
 CHAPTER 3

PROCESS AND WORKFLOW STUDY AND

ANALYSIS
3.1 Research Methodology

Research methodology is a way to systematically solve the research problem. It may

be understood as a science of studying how research is done scientifically. So, the research
methodology not only talks about the research methods but also considers the logic behind
the method used in the context of the research study.

Research Design

Descriptive research is used in this study because it will ensure the minimization of
bias and maximization of reliability of data collected. The researcher had to use fact and
information already available through financial statements of earlier years and analyze
these to make critical evaluation of the available material. Hence by making the type of the
research conducted to be both Descriptive and Analytical in nature.

From the study, the type of data to be collected and the procedure to be used for this
purpose were decided.

3.2 Types Data Collection

The required data for the study are basically secondary in nature and the data are
collected from the audited reports of the company.

Primary Data

The primary data was collected mainly with the interactions and discussions with
the company executives.

Secondary data

Most of the calculations are made on financial statements of the company and the
company provided financial statement of 5 years.

Some of the information regarding to the theoretical aspects were collected by referring
standards texts and through internet.

16
3.3 Process and workflow details of the organization under study
 5. FINDINGS
1. Current ratio of company in year 2015-16 is 16.73, in year 2016-17 is 7.57, in
year2017-18 is 46.2 , year 2018-19 is 30.82 and in the last year 2019-20 is 98.41.

2. Quick Liquid/Acid Test Ratio of company in year 2015-6 is 16.73, in year 2016-17
is 7.57, in year 2017-18 is 46.2, year 2018-19 is 30.82 and in the last year 2019-20
is 98.41.
3. Debt-Equity Ratio of company in year 2014-15 is 0.4, in year 2015-16 is 0.28, in
year 0.21, year 0.16 and in the last year 2018-19 is 0.14.
4. Net profit margin is high in the last year 2019-20, when compared to remaining
years.
5. Capital employed is greater or higher in the year of 2019-20, when compared to
remaining years.
6. Company can have an easy access to cash to meet financial obligations in the year
20019-20
7. Inventory turnover ratio of the company is not satisfactory because the ratio is going
on decreasing
8. Fixed asset turnover is too high in the year 2019-20, when compared to remaining
years
9. Total asset turnover ratio is high i.e.0.46 (in the year of 2019-20),
10. Gross profit and net profits are increased during the period of study, which indicates
that’s efficient management in manufacturing and trading operating.
11. Current Liabilities were increased compared to base year i.e. 2014.
12. Current ratio of Bajaj Finserv is comparatively lower than other companies and also
the Idea ratio of 2:1.
13. Generally a quick ratio of 1:1 is considered satisfactory as a firm. The ratio of Bajaj
Finserv are comparatively better than other companies.
14. When sales of the company increases the company production process also
increases. It helps to increase the growth of the company.

18
 6. RECOMMENDATIONS

1) Company check only financial, technical and commercial feasibility of the project
and it should not consider sensitivity analysis and social cost benefit analysis of the
project.
2) Company should consider this because these are also important from the point of
view of risk and economy growth. Company should be caution about the
availability of security and ensure honesty of both borrower and guarantor so as to
avoid the account becoming the loss assets.
3) Institute executive should visit examine & interact on regular basis.
4) They should pay proper attention towards checking of various components of study
material & faculty potential before end user delivery. Otherwise it tends towards
defame of brand name in comparison to rivals.
5) Need to expand counselor services as the consumer base of Bajaj Finserv is
increasing with tremendously fast pace.
6) Proper attention should be paid for advertisement planning otherwise it may lead to
problem for institute.
7) Company should tie up with some event management company to organize various
promotional activities for the increment of student.
8) From the study it is found that there is lack of periodic review & analysis which is
leading to inefficient utilization of resources &its leads to loss when its compare to
previous years apart from current year. So the firm should conduct quarterly
analysis. Hence the problems can be amended in time.
9) After the analysis of Financial Statements, the company status is better, because the
Net working capital of the company is doubled from the last year’s position.
10) The company is utilizing the fixed assets, which majorly help to the growth of the
organization. The company should maintain that perfectly.
11) The company fixed deposits are raised from the inception, it gives the other income
i.e., Interest on fixed deposits.

The company must do efficient utilization of shareholders fund to improve

its ROI and ROE to maintain its goodwill in investors mind. The company can go
for some debt borrowing to increase E.P.S for shareholders.
 7. CONCLUSION
Financial statement analysis generally begins with a set of financial ratios
designed to reveal a company’s strength and weakness as compared to other
companies in the
same industry and to show whether its financial position has been improving or
deteriorating over time. Also it helps in anticipating firm’s future conditions and
more importantly it is the starting point for planning actions that will improve the
firm’s future performance. As we know financial report contain a lot of information
hence the main objective of financial analysis is to seek through the information to
find useful and data in analyzing a business.

Efficient management of finance is very important for the success of an

enterprise. Term financial performance is very dynamic term. The subject matter of
financial performance has been changing very rapidly. In present time greater
importance is given to financial performance.

Finance is the life blood of every business. Without effective financial

management a company cannot survive in this competitive world. A Prudent
financial Manager has to measure the working capital policy followed by the
company

The company’s overall position is at a good position. Particularly the current

year’s position is well due to raise in the profit level from the last year position. It is
better for the organization to diversify the funds to different sectors in the present
market scenario.

Higher demand for seating system can be expected in the next decade, once
investments in ports and port development have started to reach fruition. As India is
hopeful of competing with other established shipbuilding nations, the multinationals
are likely to find plentiful opportunity in India, given the compliance requirements
imposed by effects of international legislation on seating systems.

Also other segments are showing promising opportunities to grow. With

these many opportunities at hand along with the potential player who would be able
to make use of the situation well, researcher would rather start looking at a career in

20
Bajaj Finserv. So from this researcher can conclude that there is a better
opportunities for investors to invest in this company.
 BIBLIOGRAPHY

Text Books

 Murthy - Management Accounting First Edition-2000, S.Viswanathan (Printers

&Publishers), PVT, LTD.
 S.M. Maheswari - Management Accounting, Sultan Chand & Sons Educational
Publishers, New Delhi.
 R.K. Sharma and Shashi K Gupta Management Accounting and Business
Finance-16th Edition 2008
 Murali Krishna Working Capital Management- 2010
 Prasanna Chandra Financial Management: Theory & Practice- 2004

Website

 www.haritaseating.com
 www.acma.in
 www.google.com
 www.readyratios.com
 www.crisilresearcher.com
 www.moneycontrol.com
 www.investoped

22
Page | 23