Project Name

Mr. Your name

MASTER IN COMMERCE
(ADVANCE ACCOUNTANCY)

Under the Guidance of

Mr. Sachin Deshmukh Sir

SHRI PANCHEM KHEMRAJ MAHAVIDYALA,

SWANTWADI
Academic Year – 2024-25
 CERTIFICATE

I hereby certify that Mr. Your Name, Student of Shri Panchem Khemraj Mahavidyalaya studying in
Master in Commerce, has completed a project titled Project Name in the area of Advance
Accountancy specialization for the academic year 2024-2025. To the best of my knowledge the work
of the student is original and the information included in the project is correct.

Name and Signature of Research Project Guide

Name and Signature of HOD

Name and Signature of HOD/Principal/Director

 DECLARATION

I, Mr. Your name Student of Shri Panchem Khemraj Mahavidyalaya studying in Master in Commerce,
hereby declare that I have completed the Research project entitled Project name during the academic
year 2024-2025.

The report work is original and the information/data included in the report is true emerging from the primary
and/ secondary data gathered and analyzed as part of this project. Due credit is extended on the work of
Literature/Secondary Survey by endorsing it in the Bibliography as per prescribed format.

Signature of the Student with Date

 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.
I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.
I take this opportunity to thank the Shri Panchem Khemraj Mahavidyalaya for giving me chance to do
this project.
I would like to thank my Principal Dr. D. L. Bahramal, required for completion of this project. for
providing the necessary facilities
I take this opportunity to thank our Coordinator HOD Mr. S. Deshmukh for his moral support and
guidance.
I would like to thank my College Library, for having provided various reference books and magazines
related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout my
project.
 ABSTRACT

Financial ratio analysis is the process of reviewing the financial position of the company. Ratio
analysis is extensively used by firms as a technique to forecast the financial soundness of the company
to build future growth. This study aims at analyzing the financial performance of Tata Motors and
Maruti Suzuki by calculating financial ratios. The primary objective of this study is to evaluate the
performance of Tata Motors and Maruti Suzuki during the last 5 years. The reference period taken for
study is 5 years starting from 2016 to 2021.Ratios like Current ratio, liquid ratio debt equity ratio,
interest coverage ratio and gross profit ratio were calculated to serve the purpose of assessing the
financial performance of the company. Further trend analysis and comparative income statement were
also analyzed. Secondary data was collected from annual reports of Tata Motors and Maruti Suzuki to
derive relevant information. The results reveal that the company has performed reasonably well during
the reference period. The company has shown a good potential by earning returns for their
shareholders.
 TABLE OF CONTENTS

CHAPTER CONTENT PAGE NO

I INTRODUCTION
1.1. Financial performance: An Overview 1
1.2. Financial Statements 3
1.3. Objectives of Financial Analysis 4
1.4. Significance of Financial Analysis 5
1.5. Limitations of Financial Statement Analysis 6
1.6. Types of Financial Analysis 7
1.7. Techniques or Tools of Financial Statement Analysis 9
1.8. Methods of Ratio Analysis 18
1.9. Industry Profile 25
1.10. Indian Automobile Industry Swot Analysis 32
1.11. Company Profile 34
II REVIEW OF LITERATURE 39
2.1. Reviews on Financial Analysis 39
III RESEARCH METHODOLOGY 47
3.1. Objectives of the Study 47
3.2. Significance of the Study 47
3.3. Scope of the Study 47
3.4. Limitations of the Study 48
3.5. Sample Design 48
3.6. Sample Size 48
3.7. Sample Selection 48
3.8. Period of the Study 48
 3.9. Methods of Data Collection 49
3.10. Need for the Study 49
3.11. Accounting Tools Used for the Study 49
IV DATA ANALYSIS & INTERPRETATION 50
4.1. Ratio Analysis 50
4.2. Trend Analysis 62
4.3. Comparative Income Statement 70
v FINDINGS, SUGGESSTIONS AND CONCLUSION 86
BIBLIOGRAPHY
 CHAPTER 1
INTRODUCTION
` ANALYSIS OF TATA MOTORS LTD AND MARUTI SUZUKI LTD”.The introduction
provides an overview about financial statement analysis, and explores the necessity of
financial analysis. Further this chapter states the objectives, significance, scope, research gap,
and limitations of the study.

1.1. FINANCIAL PERFORMANCE: AN OVERVIEW

Every business organization, be it manufacturing or service oriented,needs finance for carrying

on its activities. Even if the organization possesses sufficient money to support its activities,
the success of the business depends on how well the management utilizes them, funds its
capital and how efficiently it operates out of the invested capital to generate profits.

Financial performance analysis is the process of interpreting the firm’s financial statement (i.e.
Profit & Loss a/c, Balance Sheet, Cash Flow Statement, Fund Flow Statement etc) to
determine the financial operations and characteristics of a firm. It gives an insight into the
efficiency and performance of the firm’s financial management. Financial analysis is a
management tool used by the analysts, executives and investors in evaluating the
comprehensive position of the company. By consolidating the financial statements, it gives in
depth analysis about the liquidity position, long term solvency, financial viability and
profitability of a firm. Ratio analysis shows whether the firm is escalating or deteriorating in
the past financial years.Comparison of numerous financial aspects according to the needs of
executives or investors can be done effectively.

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The analyst measures the firm’s solvency, liquidity, profitability and other indicators to know
whether the business is conducted in a rational manner. The analyst gives overall emphasis on
certain significant factors in any research on financial performance of a business organization.
They are,

1. Assessing short term and long term solvency

2. Assessing the liquidity and profitability

3. Identifying the efficiency of financial operations

4. Analyzing the factors determining the solvency level of liquidity and profitability.

Financial performance analysis helps the clients/investors to assess, evaluate and decide in
which firm they should invest so that they can reap maximum benefit out of it with minimal
risk involved. Financial statement analysis and interpretation is significant especially for the
shareholders, management, creditors and government. In short, Financial Statement Analysis
gives an overview about the fiscal status of an organization.

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1.2. FINANCIAL STATEMENTS:

Financial statements are formal records prepared by the company’s

management to depict a clear picture of its financial performance and position at a point of
time. They stand as the principal method of communicating the business information of an
entity to the outsiders. Technically, financial statements are a summation of financial position
of an entity over a period of time. Generally, financial statements are prepared to meet the
needs of present and potential owners and creditors. Publicly traded companies are also
required to present these statements along with others to regulatory agencies in a timely
manner.

AICP (American Institute of Certified Public Accountants) says “financial

statements are prepared for the purpose of presenting a periodical review or report on the
progress by the management and deal with (i) the status of Investments in the business and (ii)
the results achieved during the period under review”. The basic financial statements of an
enterprise include (i) balance sheet (ii) income statement(iii) cash flow statement (iv)
statement of changes in owner’s equity.

Balance sheet is a snapshot of financial position of an entity, listing all the assets
on one side and liabilities on the other side. The income statement presents a summary of the
revenues, gains, expenses, losses and net income or net loss of an entity for a specified period.
The cash flow statement 13 summarises cash receipts and cash payments relating to its
operating, investing, financing activities during a particular period. A statement of changes in
equity reconciles the opening balance of equity with its closing balance. Notes to financial
statements disclose additional and detailed information about the various items listed in the
financial statements.
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1.3. OBJECTIVES OF FINANCIAL ANALYSIS:

The primary objective of financial statement analysis is to comprehend the information

contained in the statement analysis inorder to view the profitability and fiscal strength of the
firm and to forecast the potential future prospects. Some of the objectives are as follows,

1. Assessment of current position: The management will want to know whether the
enterprise is heading towards as per plan or lagging in their targets. Frequent recording
of the financial transactions helps them to identify their fiscal position.

2. Assessment of past performance: By having information about the past financial

performance of the business, the management can identify their discrepancies, where
they lagged etc. This inturn will help the management to be precocious while making
similar decisions in the future. The investors can get possible indicators of future
performance and invest accordingly.

3. Future decision making: quarterly, half-yearly and annual financial statement helps to
execute plans in a better way. Its objective is to assess and predict the earning
prospects with reliable information so as to help the executives/investors to make
better decisions.

4. Assessment of operational efficiency: financial statements helps to understand the

operations of the firm and determine its efficiency. The calculated financial
performance can be compared with the standards set earlier. Any difference or
deviation between them and the actual performance can be used as the indicator of
efficiency management

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1.4. SIGNIFICANCE OF FINANCIAL ANALYSIS:

1. Importance to management: The management needs up-to date, accurate and

structured financial data for interpretation of operations of the company. Financial
statements assist the management in comprehending the progress, prospects, and
position of the business counterpart in the industry. It helps to identify whether the
resources of the firm were utilized effectively, to determine the fiscal strength of the
firm and to forecast the future prospects of the enterprise. Any discrepancies can be
dealt with by structuring new policies and plans according to the result of the analysis.

2. Importance to stock exchange: the value of shares and debentures being traded in the
stock exchange are determined on the basis of financial/fiscal position and credit
worthiness of the company. The financial statements give accurate and reliable
information to fix the price for shares and debentures.

3. Importance to the stakeholders: The stakeholders cannot be present in the day-day

operations of the business. However, they need to be updated with the firm’s financial
position in order to review it. The management prepares the analysis to present it to the
stakeholders in the annual general meeting so as to make them aware of the firm’s
fiscal standards. After evaluating the financial statements, the investors/stakeholders
can make sound decisions for their future investment strategies.

4. Importance to the Government: The financial statements helps the government in

structuring taxations and regulations policies based on the operations of the company.
The government has the authority to tax a business according to

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 their level of income and assets. The economic viability of a nation is identified by
collecting such financial statements from various sectors.
5. Importance to bankers: By analyzing the financial statement of a company, the bankers
can assess the ability of the enterprise to meet its obligations, short term and long term
solvency, credit worthiness, earring capacity etc. the borrowing capacity can be
identified and the extent of loan can be fixed by the banker after evaluating the
financial statement.

1.5. LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS:

1. Based on past data: only the past data of the firms are included in the financial
statements, which are then further analyzed. The future cannot be just like the past. So,
the analysis of future estimation cannot be taken literally for forecasting, future
budgeting and planning. It can, however, be considered as a precaution.

2. Problem in comparability: The size of the business concern can be varying according
to their volume of transactions. Hence the figures of different financial statements and
different firms lose the characteristic of comparability. So the analyst must choose the
statements accordingly for comparison.

3. Reliability: Very rarely, in some companies, the financial managers tweak and
manipulate the financial statements to make it look profitable to show favorable
results.

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 4. Not a substitute of actual judgment: the consolidated financial statement analysis
cannot be taken as final judgment. It only acts as a conclusion to the indicators.
1.6. TYPES OF ANALYSIS:

Analysis and interpretation of financial statements can be done by different methods.

FINANCIAL STATEMENT ANALYSIS

ON THE BASIS OF INFORMATION USED:

External Analysis: This analysis is based on published financial reports of a firm. Generally,
outsiders cannot access the internal records of a firm, so they depend on such published
statements. This analysis is done by the creditors, suppliers, investors, and government
7
agencies.

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Internal Analysis: This analysis is based on the internal and unpublished statements. It is
done by executives and very useful for the management in decision making.ON THE BASIS
OF “MODUS OPERANDI” OF ANALYSIS:

Horizontal Analysis: It is also known as dynamic or trend analysis, as the analysis is prepared
by analysing the statements of a number of years, taking the earliest year as the basis for
calculating percentages.Vertical Analysis: It is also known as static or structural analysis.
This analysis establishes the quantitative relationship between different items shown in a
particular statement.

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1.7. TECHNIQUES OR TOOLS OF FINANCIAL STATEMENT ANALYSIS:

The most essential techniques used for analyzing and interpreting the financial statements are
as follows:

(i) Ratio Analysis:

An analysis of financial statements based on ratios is known as ratio analysis. A ratio is a

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mathematical relationship between two or more items taken fro the financial statements. Ratio
analysis is the process of computing, determining and presenting the relation of items. It also
included comparison and interpretation of ratios and using them as basis for the future
projections. The ratios can be calculated easily but they

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need to be analysed and interpreted appropriately to render meaningful results. Several ratios
can be computed, however the analyst has to compute the most essential ratios that would
render the desired objective.Steps involved in Ratio Analysis:

 The first step in ratio analysis is to gather relevant information from financial
statements and calculate appropriate ratios required for decision under consideration.
 The next step is to compare the calculated ratios with the past ratios and industry ratios
in order to assess the relative meaning.
 The final step is to interpret the significance of various ratios, draw inferences and
write a report. The report may contain specific action in matter of the decision situation
or may present alternatives with comparative merits or it may just state facts and
interpretations.

Advantages of Ratio Analysis:

 Ratios reveal the trends in costs, sales, profit and other inter-related facts, which will
be helpful in forecasting future events.
 The analyzed ratios can be used as “instrument of control” regarding sales, costs and
profit.
 Ratios help to determine the operational efficiency by comparison of present ratios
with those of the past working and industry ratios.
 Ratios facilitates the investment decisions by computing the return on investment
which in turn helps the management in taking effecting decisions regarding profitable
avenues of investment.

Limitations of Ratio Analysis:

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  A single ratio may not provide meaningful sense, for better understanding a
number of ratios need to be calculated, which may lead to confusion.
 There are no standard norms for calculating ratios; hence the interpretation may
become difficult.
 Each firm follows its own accounting procedure; hence comparison between the
firms may not yield accurate results.
 Moreover past ratios may not be effective for future decision making.

 Price level changes are not considered while computing ratios; therefore it makes
the ratio interpretation invalid.

(ii)Cash Flow Analysis:

Cash flow statement depicts the cash inflow and cash outflow of a concern. The cash flow of
the firm can be found as a difference between opening and closing cash balance during a
period of time. It clearly shows the sources of cash and how it is applied to every activity. The
loan proceeds, issue of shares, sale of assets are the various sources of cash. Cash flow
analysis is the study of movement of cash and cash equivalents through the business.

Steps involved in cash flow analysis:

 Compare the last two years balance sheet and income statement, to prepare the
statement of cash flows in three parts.
 Analyze the various sources and application of cash, and then ascertain the cash
balances which will be useful for future projects.
 Cash flow statement can also be prepared by analyzing the cash from
operating, financing and investing activities.

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Advantages of cash flow analysis:

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  Cash flow statement provides information regarding liquidity and profitability of the
firm. It helps to ascertain the cash earning capacity of the firm as well as the efficiency
of the firm in paying off its obligations.
 It helps to maintain optimum cash balance of the firm, so that the firm can invest the
surplus cash or borrow from lenders to meet the deficit.
 Cash flow statement enables proper management of cash, resulting in effective
planning and coordination of various activities.
 Preparation of cash budget helps in appraising the performance of the cash of the firm.

Limitations of cash flow analysis:

 Cash flow statement does not provide net income as it does not consider various
noncash items.
 Historical costs are the basis of preparation of cash flow statement; hence the cash
flow statement will not be helpful to project the future cash flows.
 Inter-industry comparison is not possible as cash flow statement does not
measure the economic efficiency of the firm.

c) Funds flow analysis:

The term ’funds’ refers to working capital. Funds flow statement depicts the internal and
external sources of working capital and how they are spend towards each activity. Thus funds
flow shows the changes in working capital of the firm. Working capital is ascertained as a
difference between current assets and current liabilities of the company. Fund flow analysis
involves three parts,
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 Schedule of changes in working capital

 Statement of funds from operation

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  Statement of fund flow.

Steps involved in fund flow analysis:

 The first step is to prepare the schedule of changes in working capital, by analyzing the
increase or decrease in the current assets and current liabilities of the company.
 Next is to ascertain the funds earned from the regular business operation by adding the
non-operating expenses to the net profit earned during the period and then subtracting
the non-operating income.
 The last step is to prepare the fund flow statement with the help of net
increase/decrease working capital and funds from operation.

Importance of fund flow statement:

 Fund flow statement discloses the changes in assets, liabilities and equity of the
company between two balance sheet dates.
 It helps to analyse the operational position of the concern.

 It helps in proper allocation of resources of the company in an effective and

efficient manner.
 It is useful for the investors to interpret the strength and weakness of the firm.

Limitations of fund flow statement:

 Fund flow statement fails to consider the non-fund transactions, which may provide

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 misleading information to the users of financial statements.
 Fund flow statement is prepared based on the data provided in the balance sheet and
income statement; hence the reliability of fund flow statement depends on the accuracy
of such statements.

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  It is historical in nature as it prepared with the help of past data.

d) Comparative income statements:

This method establishes the comparison of data, either between two accounting years or between
two firms. Generally these statements include comparative profit & loss account, comparative
balance sheet. These statements indicate the trends in performance efficiency and financial
position. The comparative income statement combines the data of various accounting periods
and presents it in a single table for interpretation.

Steps involved in comparative income statement:

 Tabulate the value of assets, liabilities, income, expenses of the firm for desired
accounting periods.
 Compute the increase or decrease amount by finding the difference between the two
year’s values.
 Ascertain the percentage change of the current year values in relation to the previous
year.

Advantages of comparative income statement:

 Comparative income statement enables inter-comparison as well as intra-

comparison of the financial results of the firm.
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 It helps in evaluating the overall performance of the company.

 It is also useful for predicting the financial distress, so that corporate failures will also
be predicted.

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Disadvantages of comparative income statement:

 Inter-firm comparison would be more effective, when both the firm follows the same
accounting procedures. Therefore mere preparation of comparative income statement
does not yield proper comparison.
 It may provide misleading information as there could be negative amount in base year
and positive amount in next year. Moreover percentage calculation becomes
impossible.

e) Common size statements:

Common size statements emphasize the relation of various items to one common item
(expressed as a percentage of some common item) in the financial statement. This method
can be used in balance sheet and income statement. In case of income statements, sales
figure is considered to be the common item to establish relation. In balance sheet, the total
value of assets would be the base.

Steps involved in common size statement analysis:

 In case of comparative balance sheet, classify the assets into fixed assets and current

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 assets; liabilities into proprietor’s funds, long term liabilities, current liabilities and
ascertain its total.
 Divide the computed total with the common base and ascertain the percentage.
 Percentage of base = ( individual item amount / common base amount ) *100

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Advantages of common size statement analysis:

 Common-size statement can be easily computed by the analysts using the financial
statements.
 It is helpful for comparing the financial performance at a single glance.

 It is also useful for understanding the structural composition of various items in the
financial statements in relation to some common base.

Limitations of common size statement analysis:

 Common size statement cannot be used as a basis for making decision as it does not
possess standard percentage regarding the change of percentage in various
components.
 As it considers only the percentage increase or decrease, it does not provide details
regarding liquidity and solvency position of the firm.
 Comparative income statement ignores the qualitative aspects of the firm.

f) Net working capital analysis:

Net working capital is a measure to interpret whether the business has sufficient liquid assets
to pay off its short term obligations. Liquid assets refer to such assets that can be quickly
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converted into cash. It includes cash, bank balances, marketable securities, accounts
receivables, and etc. In this method, schedule of changes in working capital is prepared to
analyze the increase or decrease in working capital. Net working capital is ascertained as
difference between current assets and current liabilities. A positive working capital
reveals good financial

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position of the firm, however too much of working capital denotes that the company’s
funds are idle, not being utilized towards the growth and success of the firm. It also
denotes that either the company fails to take such opportunities towards growth or it is
unaware of them. On the other hand, negative working capital results in delay in payment
of dues to the suppliers, creditors. It may also lead towards bankruptcy and even
liquidation of the firm.

g) Trend analysis:

Trend analysis ascertains the trend percentages of data over a particular period of time and
provides information regarding changes in financial and operating data between specific
periods. Trend analysis is basically analyzing the past and current data to reveal the future
prospects of the firm. There are three types of trends namely short, intermediate, long
term. It is also considered as a form of comparative analysis.

Steps involved in trend analysis:

 The first step is to identify the data that has to be analysed.

 Then choose the time period for gathering such data.

 Prepare trends and analyse it, so that the future could be predicted.

Advantages of trend analysis:

 Trend analysis helps in inter-firm comparison, as it provide absolute figures over a

period of time.
 It is useful for analyzing the liquidity, solvency, profitability position of the firm

 As it forms as a basis of comparative analysis, it is also useful for decision

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making.

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 Limitations of trend analysis:

 It is very difficult to select a base year for the purpose of ascertaining trend
analysis.
 It is also difficult to use the same accounting policies as the trends will be
changed constantly.
 During price level changes, the trend analysis may not yield proper results.

1.8. METHODS OF RATIO ANALYSIS:

1. Current Ratio:

The current ratio is a liquidity ratio which is a liquidity ratio that measures a company’s
ability to pay short term obligations or those due within one year

Current ratio= Current assets

Current liabilities

2. Liquid Ratio:

Liquid ratios are used to determine the debtor's ability to pay off current debt obligations
without raising external debt.

Liquid Ratio= Quick assets

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 —

Current liabilities

3. Absolute Liquid Ratio:

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Absolute liquid ratio is a type of liquidity ratio which is calculated to analyze the short term
solvency or financial position of the firm.

Absolute liquid ratio= Cash + Marketable securities

Current liabilities

4. Debt equity ratio:

The debt-to-equity ratio is a financial ratio indicating the relative proportion of shareholders'
equity and debt used to finance a company's assets.

Debt equity ratio= Total long term debt

Shareholder’s fund

5. Proprietary ratio:

Proprietary ratio is a type of solvency ratio that is useful for determining the amount or contribution of
shareholders or proprietors towards the total assets of the business.

Proprietary ratio= Shareholder’s fund

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 —

Total tangible assets

6. Fixed assets ratio:

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Fixed-asset turnover is the ratio of sales to the value of fixed assets. It indicates how well the
business is using its fixed assets to generate sales.

Fixed assets ratio= Fixed assets

Long Term funds/ capital employed

7. Gross profit ratio:

Gross profit ratio (GP ratio) is a financial ratio that measures the performance and efficiency of a
business by dividing its gross profit figure by the total net sales.

Gross profit ratio= Gross profit

— X 100

Net sales

8. Net profit ratio:

It reveals the remaining profit after all costs of production, administration, and financing have
been deducted from sales, and income taxes recognized.

Net profit ratio= Net profit

— X 100

Net sales

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 9. Operating profit ratio:

The operating profit margin ratio indicates how much profit a company makes after paying for
variable costs of production such as wages, raw materials, etc.

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2
Operating profit ratio = Earnings before interest and tax

— X 100

Net sales

10. Return on capital employed:

Return on capital employed (ROCE) is a financial ratio that can be used to assess a company's
profitability and capital efficiency. In other words, this ratio can help to understand how well a
company is generating profits from its capital as it is put to use.

Return on capital employed = Operating profit

— X 100

Capital employed

11. Return on shareholders fund:

Return on shareholders' funds is an accounting measure of the rate of return that shareholders
have obtained on the capital which they have invested in the business.

Return on shareholders fund = Net profit after tax

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3
 — X 100

Shareholders fund

12. Earnings per share:

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The earnings per share ratio (EPS ratio) measures the amount of a company's net income that is
theoretically available for payment to the holders of its common stock.

Earnings per share= = Net profit after tax and preference dividend

— X 100

Number of equity shares

13. Book value per share:

It is a method to calculate the per-share book value of a company based on common shareholders' equity
in the company.

Book value per share= Share capital + Reserves and Surplus

Number of equity shares

14. Dividend payout ratio:

The Dividend Payout Ratio (DPR) is the amount of dividends paid to shareholders in relation to
the total amount of net income the company generates. In other words, the dividend payout
ratio measures the percentage of net income that is distributed to shareholders in the form of
dividends.
Dividend payout ratio= Equity dividend per share
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 — X 100

Earnings per share

15. Working capital turnover ratio:

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Working Capital Turnover Ratio helps in determining how efficiently the company is using its
working capital (current assets – current liabilities) in the business.

Working capital turnover ratio = Sales

Net working capital

16. Inventory turnover ratio:

The inventory turnover ratio is an effective measure of how well a company is turning its
inventory into sales. The ratio also shows how well management is managing the costs
associated with inventory and whether they're buying too much inventory or too little.

Inventory turnover ratio = cost of goods sold

Average inventory

17. Debtors turnover ratio:

Debtor's Turnover Ratio is an accounting measure used to measure how effective a company is in
extending credit as well as collecting debts.

Debtors turnover ratio= sales

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7
—

Average accounts receivable

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18. Comparative income statement:

Comparative Income Statement is the income statement in which multiple periods of the
income statement are dealt and compared side by side so as to allow the reader to compare the
incomes from a previous year and make investment decisions on whether or not to invest in
the company.

19. Trend analysis:

Trend analysis is a technique used in technical analysis that attempts to predict future stock
price movements based on recently observed trend data. Trend analysis uses historical data,
such as price movements and trade volume, to forecast the long-term direction of market
sentiment.

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1.9. INDUSTRY PROFILE
AUTOMOBILE
INDUSTRY:
The automobile industry in India is a growing industry that shows promise and is necessary for
the nation’s economic and technological advancement. The availability of low-cost skilled
labour, various research and development centers, and easy cheap steel production all help
make India the viable choice. India is a growing economy and is a lucrative opportunity for
investors.

The automobile industry in India was the fifth largest in the world in 2020. Several Indian
automobile manufacturers have spread their operations globally as well, asking for more
investments in the Indian automobile sector by the MNCs. The CAGR of the Indian
automotive industry’s sales between FY 2009 and FY 2020 comes around 8%. The vehicle
registrations fell by 29% in the financial year 2020-2021 from 295.8 million registered
vehicles to 221.85 million in 2020.

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 Top Automobile Companies in India: Tata
Motors

Tata Motors is the largest automobile manufacturing company in India. Established way back
in 1945 Tata Motors is a multinational automobile company with its headquarters in Mumbai.
Previously known as Telco TATA Engineering and Locomotive Company Tata Motors
belongs to Tata Group.
This company manufactures compact medium-sized utility vehicles. Over the last few
decades, it has stood as the undisputed leader in the commercial vehicles segment. It is also
the third-largest producer of passenger cars in India. This automobile company in India is
listed on both the Bombay Stock Exchange and the New York Stock Exchange. The revenues
earned by Tata Motors in 2020 accumulated to 34.7 billion USD.
Some of the well-known cars manufactured by Tata Motors are Tata Indigo, Tata Indica,
Tata Sumo, Tata Indigo Marina and Tata safari.

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 Hindustan Motors Limited

Hindustan Motors Limited was founded in the year 1942 by B.M Birla. It is an operative
subsidiary of the Birla Technical Services group. This company held the title of the biggest
manufacturer of cars in India before Maruti Udyog.
Hindustan Motors was the pioneer in manufacturing automobiles in India. Some of the
important cars and multi-utility vehicles manufactured by Hindustan Motors Limited include;
Mitsubishi Lancer, Trekker, Contessa, Ambassador, Porter, Pushpak and Mitsubishi.
Hindustan Motors shut down its factory at Uttarpara in West Bengal State, where it has been
making the Ambassador since 1957.

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 Ashok Leyland

Ashok Leyland is a leading commercial vehicle manufacturer in India. It was established in

1948. The company over the years has become synonymous with the production of trucks,
passenger buses and emergency military vehicles. It happens to be the second-largest
commercial vehicle producer in India holding a market share of almost 30 per cent. The
company holds a record for selling almost 60, 000 vehicles and almost 7000 engines per year.
Ashok Leyland accounted for consolidated revenues of Rs. 174.67 billion in 2020. Some of
the popular products by this company are; Panther BS-II Multi-axle Vehicles, Cheetah Bus-III,
Tractors and Ecomet, Lynx BS-II, Diesel and Natural Gas gensets from
15KVA to 250KVA.

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 Maruti Suzuki India Limited

Maruti Suzuki India Limited was established in 1981. A part of this company is owned by
Suzuki Motor Corporation of Japan. It is the country's largest passenger car manufacturing
company.
Credited for having brought in the automobile revolution in the country, Maruti Suzuki India
Limited was known as Maruti Udyog Limited till 2007. With its headquarters in Delhi, this
automobile company in India happens to be the largest producer and market shareholder of
cars.
The company accounted for consolidated revenues of Rs. 71,690.4 crore in 2020. Maruti
Suzuki India Limited has been credited for manufactures a variety of passenger cars, SUVs,
and Sedans.
Some of Maruti's most popular cars are Alto, Gypsy, Omni, Wagon R, Maruti 800, Versa,
Zen, Esteem, Baleno and Swift.

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 Hyundai Motor India Limited

Hyundai Motor India Limited (HMIL) is owned entirely by Hyundai Motors of South Korea.
Hyundai Motors happens to be the largest car manufacturer in South Korea and the sixth-
largest in the world.
This automobile company in India is also the largest passenger cars exporter in India.
Established on May 6 1996 this company in a short period has taken the Indian automobile
industry by storm.
Some of the popular cars manufactured by this company are;

 Santro,

 Getz Prime

 Hyundai i10

 Hyundai i20 Accent

 Verna

 Sonata

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 Bajaj Auto

Bajaj Auto is another important automobile manufacturing company in India. It is one of India's
most trusted car manufacturers. It is an operative subsidy of the Bajaj Group.

Bajaj Auto happens to be the largest two and three-wheeler manufacturer in India and also ranks
in this field across the globe. This automobile company was established on 2 November 1945.

The company was then known as M/s Bachraj Trading Corporation Private Limited. The company
made a modest beginning by importing and then selling two and three- wheelers in India.
Today Bajaj Auto has become synonymous with two and three- wheelers in the country.

Some of its popular two-wheelers are;

 Pulsar 220DTS

 Kawasaki Ninja 250R

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 1.10. Indian Automobile Industry SWOT Analysis:

Strengths

 The domestic market is large

 The government provides monetary assistance for manufacturing units

 Reduced labour cost

 Evolving industry

 Continuous product innovation and technological advancement

 Growth shifting to Asian markets

 Increase in demand for luxury commercial vehicles

 Manufacturing facilities in Asian nations to control cost

Weaknesses

 Infrastructural setbacks

 Low productivity

 Too many taxes levied by the government increase the cost of production

 Low investments in Research and Development

Opportunities

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 Reduction in Excise duty

 Rural demand is rising

 Income level is at a constant increase

 Introducing fuel-efficient vehicles

 Changing lifestyle and customer demand causing a rise in the sale of two-
wheelers and compact cars

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Threats

 Increasing rates of interest

 Too much competition

 The rising cost of raw materials

 Steeply rising fuel prices

 Slow economy

 Economic recession

 High fixed costs and investments

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 1.11. COMPANY PROFILE:

Two automobile companies have been chosen for the study. They are tata motors ltd and maruti
suzuki ltd.

TATA MOTORS:

Tata motors is an indian multinational automotive manufacturing company, founded in 1945, 77

years ago, by Jehangir Ratanji Dadabhoy Tata. It is headquartered in Mumbai, India. The
company produces and manufactures passenger cars, trucks, vans, coaches, buses, luxury cars,
sports cars, construction equipment. Tata motors has vehicle assembly operations in several
countries apart from India, including the United Kingdom, South Korea, Thailand, Spain and
South Africa. It further plans to establish plants in Turkey, Indonesia and Eastern Europe. In
India it has manufacturing and assembly units in Jamshedpur, Ranjangaon, Pune, Lucknow,
Sanand, Pantnagar and goa. The Manufacturing units at Jamshedpur and Pune are the oldest
and largest of Tata Motors. Tata motors has more than 250 dealerships in more than 195 cities
across 27 states and four union territories of India. Tata’s dealership, sales, service and spare
parts network comprises over 3,500 touch points. Tata also has fanchisee/joint venture
assembly operations in Kenya, Bangladesh, Ukraine, Russia and Senegal. Tata has
dealerships in 26 countries
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across 4 continents.

REVENUE AND INCOME OF TATA MOTORS

Revenue ₹319,247 crore

(US$42 billion) (2021)

Operating Income ₹−2,377 crore

(US$−310 million)
Net income ₹−13,016 crore

(US$−1.7 billion) (2021)

Total Assets ₹343,125 crore

(US$45 billion) (2021)

In Share Market Tata Motors Ltd is traded as,

 BSE: 500570

 NSE: TATAMOTORS

 NYSE: TTM

 NSE: NIFTY 50 constituent

Share Holding Pattern of Tata Motors Ltd

Holder’s Name No of Share % of Share Holding

Promoters 1540885009 46.4%
Foreign Institutions 479896460 14.45%
N Banks Mutual Fund 214929894 6.47%
Central Government 4789854 0.14%

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 General Public 550123974 16.57%
Financial Institutions 262669799 7.91%
Others 267367017 8.05%

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The following are the automobiles launched by tata motors over the years,

 1954 - First commercial vehicle in collaboration with Daimler-Benz AG(Ended in

1969)
 1988 - Entered passenger vehicle market with the launch of TataMobile

 1991 - Tata Seirra, becoming the first Indian Manufacturer to achieve the
capability of developing a competitive indigenous automobile.
 1998 - Tata Indica, a fully indigenous passenger car.

 2008 - Tata Nano, The world’s most affordable car.

Current Models:

 Tata Tiago (2015–present)

 Tata Tigor (2016–present)

 Tata Nexon (2017–present)

 Tata Hexa (2017–2019)

 Tata Harrier (2018–present)

 Tata Altroz (2020–present)

 Tata Nexon EV (2020–present)

 Tata Safari (2021–present)

 Tata Tigor EV (2021–present)

 Tata Punch (2021–present)

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 MARUTI SUZUKI:

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian
automobile manufacturer, based in New Delhi. It was founded in 1981 and owned by the
Government of India until 2003, when it was sold to the Japanese automaker
Suzuki Motor Corporation. As of February 2022 Maruti Suzuki has a market share of 44.2
percent in the Indian passenger car market.

Maruti Suzuki has 3,598 sales outlets across 1,861 cities in India. The company aims to increase
its sales network to 4,000 outlets by 2020. It has 3,792 service stations across 1,861 cities
throughout India. Maruti's dealership network is larger than that of enough known companies
combined. Service is a major revenue generator of the company. Most of the service stations
are managed on franchise basis, where Maruti Suzuki trains the local staff. Also, The Express
Service stations exist, sending across their repair man to the vehicle if it is away from a normal
service center.
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The following are the automobiles launched by Maruti Suzuki over the years,

 1983- Maruti 800

 1984- Omni

 1985-Gypsy E

 1990- Gypsy king

 1993- 1000

 1984- Zen

 1999- Esteem

 2000- Baleno

 2001- Baleno Altura

 2003- Versa

 2007- Zen Estilo

 2008- A-Star

 2008- Swift Dzire

 2008- Ritz

 2010- Alto K10

 2017- Baleno RS

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 CHAPTER II
REVIEW OF LITERATURE

2.1. REVIEWS ON FINANCIAL ANALYSIS

1. Bismark Maka1, Dr. N. Suresh(2018) in their article “Review of financial performance

analysis of corporate organizations”examined that, a standard shift to financial
performance analysis which inspects the internal KPIs like current ratio, quick ratio,
net profit margin, working capital ratio etc on the overall financial performance of the
firms will supplement financial performance literature both in industry and academia.
This approach will later complement in making decisions with respect to business
planning, budgeting processes and investment decision making. Since the performance
of internal KPIs are trackable and measurable; their significant contribution to the
overall achievement of the goals of the company can be ascertained. Hence the key
indicators which led to the non achievement of financial goals can be determined and
new structure can be modeled to arrest the financial under performance.

2. Shaikh Salman Masood (2020) in his study Financial Statement Analysis of Tata
Motors Limited carried out for the period 2017, 2018, 2019 has noticed abnormal
amounts of debt of tata motors and pointed out their lack of ability to pay contractual
payments. Out of the 3 financial years, 2017 had the highest quick and current ratios
indicating the firm’s highest liquidity. It has decreased ever since.

3. Bhupender Kumar Som1 , Himanshu Goel2 (2020) in their journal “Ratio Analysis: A
Study on Financial Performance of Tata Motors”, reviewed the
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financial performance of Tata Motors from 2016-2020. The results reveal the Return on
capital employed and Net worth were at all time low. The current ratio of the firm were
to be considered a matter of concern for the investors as it directly influences the
company’s financial performance. The company seemed to produce good results in
2019, before the pandemic, may be due to the expected reasons such as voluntary
retirement scheme and sell-off non- core assets which worked well in favor of the
company.

4. MODI TANVIR R. and KHORAJIYA MAHMADARIF I. (2014) concluded that

Tata Motors Ltd has been decreasing their profitability. Their study “ANALYSIS OF
PROFITABILITY OF TATA MOTORS LIMITED” indicates that even though the
sales revenue of the firm was high the gross profit margin the company was not
increasing. Operating profit was low compared to the sales volume of the company.
Over the period of the study the net profit margin of the company signifies lower level
of profitability of the company.

5. Moses Joushva Daniel A (2013) in his study “A Study on Financial Status of Tata
Motors Ltd” examined the financial performance of the firm from 2006- 2007 to 2010-
2011. He concluded that the financial performance was satisfactory and has had a
stable growth over the years. It is said to reduce expenditure as it’s been increasing
every year. The net profit is increased but the net profit ratio has decreased so in order
to have increased actual profit the firm must increase the sales.

6. V. Gokulapriya (2020) in her journal “A STUDY ON FINANCIAL PERFORMANCE

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OF MARUTI SUZUKI MOTORS” concluded that the firm should increase their
profitability level by considering the internal and external

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factors even though the the firm’s profitability is satisfactory. The firm should invest more
in their current assets as there seems to be a fluctuation in liquidity position.

7. Biswajit Rout **Abinash Dash ***Baisali Das (2020) in their journal “A Study on
Financial Statement Analysis of Maruti Suzuki India Limited Company” reviewed the
financial performance of the frim from 2009-2019. They concluded that the prosperity
of Maruti Suzuki has been wealthy for the last 10 years. It was found to be in a
gradually increasing manner regarding the Net Sales and Net Profits of the company
since 2009 onwards.

8. Sudarshan Kumar (2020) in his article “A study on evaluation of financial performance

of Maruti Udyog Ltd '' analyzed that Maruti Suzuki has demonstrated that it is
consistently ahead of its rivals as a result of continuous developments. What's more,
mechanical upgrades. The organization has set a benchmark of greatness due to the
Exploration and Development movement as Maruti Suzuki accepts that this action will
empower the organization to offer better and climate cordial items than clients with
complete fulfillment. Maruti Suzuki‟s ecological execution is truly uncountable.
Thinking about the developing vehicle contamination, the organization presented a
progressed K- Series motor in its vehicles which brought about a decrease of CO, THC
and NOx discharges by right around 50%. To the extent financial execution is
concerned, Maruti Suzuki‟s last not many year‟s measurements of Domestic deals,
Fare, portrays that still Maruti Suzuki is the head of Indian Automobile sector.

9. B Navaneetha, R Padmasri and A Pavithira (2018) in their study “A ratio analysis of

Maruti Suzuki India Ltd '' have concluded that MSIL is following a

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conservative working capital policy as it maintains minimum level of liquidity. Companies
with low liquidity ratios have a higher risk of meeting its current obligations. In the
case of MSIL the fall in the liquidity ratios is offset by the rise in profitability ratios.
The company allocates more funds on investments to have an edge over the
competitors. MSIL is the king of the Indian automotive industry. MSIL has been
consistently surviving in the industry with the effective growth rate which is evidenced
by high profit earning capacity.

10. MD Qamar Azam and MD Abrar Alam (2020) in their study “FINANCIAL
RATIOS AND ANALYSIS OF TATA MOTORS” found out that the Overall Z score
of Tata motors is lies between 0.71 to 2.44, lowest in 2015. Company needs serious
studies. We can say that its main reason is company's working capital to total assets is
negative during the periods. It's all profitability ratios are under the average and
negative during the years. Debt to total assets is approx. 60-70% which is above the
average. Debt to equity ratio is moving between 1.5 to 2.2 which is bad for any
company. In the case of the liquidity ratios which are very low relatively to industry.
On an average tata motors financial ratios indicates that its financial conditions are
under performance.

11. Sebe-Yeboah and Mensah evaluated the financial performance of ADB by using
varied analytical tools. The study was conducted with the help of secondary data i.e.
audited financial statements and information pertaining to that domain with the help of
important sources. Statements from 2006-2012 were gathered for the study.
Descriptive statistics, Du Pont financial ratio analysis, vertical and horizontal analysis
were implemented in the study.The study found that ADB’s attitude towards the
financing of agriculture was shrinking. The liquidity position of the banks indicated a
descending trend and fell further down in 2010.

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12. Tehrani (2012) in their study “A model for evaluating financial performance of
companies by data envelopment analysis” developed a model for analyzing the
company’s performance. The performance assessment indexes were generated from
financial statements and ratios from articles and books. Data envelopment analysis was
employed to evaluate the study due to the large number of variables. Parameters used
to measure the performance f the company were liquidity, activity, leverage, economic
added value and profitability ratios. The result indicated that nine out of thirty six
companies were efficient.

13. Donkor and Tweneboa-Kodua (2013) in their study Profitability, Liquidity and
Efficiency of Rural Banks: Evidence from Ghana looked into the efficiency, liquidity
and profitability of Asante Akyem Rural Bank (AARB) from 2007 to 2011. The
parameters of the study were gross and net profit margin. Both primary data and
secondary data were collected. Expect for the financial year 2010, the bank achieved
profitability for the rest of the years of study. The study also concluded that the bank’s
liquidity is weak and the management of the bank is inefficient.

14. Vadiraj Deshpande and Dr.N.S.Narahari (2014) in their study “Statistical

Modelling Approach to Estimation of Average Revenue per User in Telecom Service-
a Case Study” attempted to structure a model for estimating Average Revenue Per User
(ARPU) trends. The model was designed to serve as a guide to telecommunication
service providers for structuring strategies to improve ARPUs. The study of regression
analysis revealed that subscriber base, new users added periodically and number of
operators are the key determinants of how much a user spends on the average.

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15. Gahlot, Kishan Lal (2017) in his Analysis of financial statement of Rajasthan
tourism Development Corporation, analyzed the origin and growth of tourism industry
at national and international level. He made significant remarks about the various
policies framed by the Indian Government towards the tourism sector. The study
undertook the period of 2005-2006 to 2014-2015 by using the financial indicators of
solvency, working capital, cash flow etc with the help of accounting ratios and trend
analysis. The study conclude that overall there is a fluctuating trend in working capital
and cash flow.

16. Manickavasugi,S P(July 2011) evaluated the production, sales, profitability and
solvency performance of three major Indian Public Sector oil companies- Bharat
Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited and Indian
Oil Corporation Limited after liberalization. The period of study was from 2001-2002
to 2008-2009. The data were primarily from secondary sources (annual reports,
financial statements of the companies). Accounting ratios, statistical and mathematical
methods were employed to analyze and arrive at the result that the oil companies
showed good performance during the study period and suggested improving their
liquidity position.

17. Basheer Ahamed, T M (2006) did an analytical study on the performance of

selected units (i.e.), Madras Fertilisers Limited (MFL), Southern Petrochemical
Industries Corporation Limited (SPIC), E.I.D. Parry (India) Limited (PARRY) and
Neyveli Lignite Corporation (NLC) for a period of 10 years (1993- 1994 to 2002-
2003). Statistical tools such as mean, regression techniques, correlation coefficient,
autocorrelation coefficient, Durbin-Watson d-test, multicollinearity and ANOVA
techniques were used to interpret the financial statements, and
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suggested that Capital budgeting appraisal methods such as, pay-back period, average rate
of return, internal rate of return, net present value and profitability index are to be
prudently used by the firms to increase the return to equity shareholders to certain
extent

18. Kharpas, A B (2004) has explained the financial indicators of 6 Public Ltd
Engineering companies in Maharashtra which are selected on regional basis, for a
period of 11 years (1992 – 2002). He evaluated the manufacturing cost incurred,
profitability, short term and long term solvency using accounting methods and
proposed to have standardization in operating and non operating expenses, adopt
common depreciation cost system, and improve exports

19. Maria Nevis Soris N (2003) made a research on “financial viability of major
ports in south India’’ by comparing the financial performance of Tuticorin port with
other ports of South India for a period of 10 years, and revealed that Tuticorin port’s
performance is more satisfactory by earning surplus revenue for repayment of loans
and infrastructure development . And other ports except Cochin port are also
performing well during the study period.

20. Manoharan,Padmaja (2002) had evaluated the profitability of cement industry in

India by analysing the sample of 32 companies ,of which 31 are public limited
companies in private sector and 1 company from the central sector. These companies
where chosen for the reason that, they have financial data for a continuous period of 10
years (1990-91 to 1999-2000). The sample consists of 48% of entire cement industry in
India. The companies were classified on the basis of size, age, region for the research.
The required data were collected from the compilation made by the Centre for
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monitoring Indian Economy (CMIE). Statistical tools were employed for the study and
suggested

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that Altman’s model and Lambda index would decipher the areas of weakness and take
remedial measures.

21. Gupta,Dinesh chandra (1991) had interpreted the annual reports of cement
industry in India with special reference to UPSCC Ltd from the period 1984-85 to
1988-1989 by explaining the origin, growth and development of cement industry and
various tools of analysis; common size analysis (comparative financial & operating
statements) , trend ratios , ratio analysis , break even analysis , funds flow analysis .
And the study revealed reduced profits, low capital turnover rate, inadequate sales,
deficit working capital and overall down in the cement industry in early 1990’s.

22. Arya (1984) analysed the financial statements (balance sheet and profit & loss
account) of 12 cement companies in India to determine its cost function during the
period 1951 – 1970. He ascertained that there is no relation in capacity increase and
total cost. And the factors responsible for slow growth of cement industry could be
poor quality coal, power, technological obsolescence, price controls; by taking prompt
measures these defects could be rectified to attain self sufficiency.

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 CHAPTER III
RESEARCH
METHODOLOGY

3.1. OBJECTIVES OF THE STUDY:

PRIMARY OBJECTIVE:

1. To compare and analyze the financial performance of Tata Motors Ltd and Maruti
Suzuki Ltd.
SECONDARY OBJECTIVE:

1. To evaluate the financial performance of Tata Motors Ltd and Maruti Suzuki Ltd
using various financial ratios.
2. To examine the profitability , liquidity , leverage and effective performances of Tata
Motors Ltd and Maruti Suzuki Ltd
3. To review the growth and development and compare the past five years financial
results of Tata Motors Ltd and Maruti Suzuki Ltd.

3.2. SIGNIFICANCE OF THE STUDY:

The study of Financial Performance Analysis can be a learning criterion to the management as
well as the investors to identify significant changes in the fiscal management and to analyze
the financial operations in the enterprise in order to make investment decisions. This
comparative study is done to identify the pattern and evaluate the areas in which the
company is has been affected in order to arrive at standard solutions.

3.3. SCOPE OF THE STUDY:

 Two automobile companies have been chosen for the study (i.e. tata Motors and
maruti suzuki)
 The study covers the financial aspect of 2 enterprises.
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 The study is confined to analyzing the financial performance of the companies hence
the theoretical scope consists of accounting aspects and financial ratios.

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 3.4. LIMITATIONS OF THE STUDY:

 The report focuses only on Tata Motors and Maruti Suzuki Ltd.

 The period of study is limited to 5 years

 The financial reports considered for the study are within the specified 5 years

 Certain ratios were only calculated due to insufficiency of data.

 The study is mainly based on secondary data derived from annual reports and
accounts of Tata Motors and Maruti Suzuki, therefore the reliability and
accuracy of the findings depends on such data.

3.5. SAMPLE DESIGN:

The study undertook convenience sampling to collect the required data.

3.6. SAMPLE SIZE:

Past 5 years of both Tata Motors Ltd and Maruti Suzuki Ltd are taken into consideration to
analyze, evaluate and interpret the results.

3.7. SAMPLE SELECTION:

The balance sheet, Income statement and profit and loss A/C and other related Financial Reports of
Tata Motors and Maruti Suzuki were incorporated in the study.

3.8. PERIOD OF THE STUDY:

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The study was carried out from December 2021- March 2022

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3.9. METHODS OF DATA COLLECTION:

Since the study is primarily based on secondary data, the financial reports, balance sheets,
profit and loss A/Cs were taken from the Company’s official annual reports, investment
websites, previous research projects and journals relating to financial analysis.

3.10. NEED FOR THE STUDY:

The need for the study is to find out which company performs satisfactorily in terms of fiscal
performance and asset management and to identify the reasons as to why the enterprise is

3.11. ACCOUNTING TOOLS USED FOR THE STUDY:

 Ratio Analysis

 Trend Analysis

 Comparative Income Statement

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 CHAPTER IV

DATA ANALYSIS & INTERPRETATION

4.1. RATIO ANALYSIS

1. Current ratio = Current assets

—
Current liabilities

TATA MOTORS:
Table 4.1.1. Current Ratio of Tata Motors

YEAR CURRENT ASSETS CURRENT LIABILITIESRATIO

2016-2017 116,119.75 115,629.52 1

2017-2018 135,972.84 143,219.47 0.95

2018-2019 123,431.16 145,457.43 0.85

2019-2020 119,587.25 140,454.05 0.85

2020-2021 146,887.64 157,749.18 0.93

MARUTI SUZUKI:

Table 4.1.2. Current Ratio of Maruti Suzuki

YEAR CURRENT ASSETS CURRENT LIABILITIES RATIO

2016-2017 8,798.00 13,236.80 1.504523755

2017-2018 7,930.00 15,448.50 1.948108449

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2018-2019 12,372.70 14,160.50 1.144495543

2019-2020 8,440.60 11,305.40 1.339407151

2020-2021 18,544.30 16,120.50 0.869296765

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 Table 4.1.3. Consolidated Current Ratio of Tata Motors And Maruti Suzuki

YEAR TATA MARUTI

2016-2017 1 1.5

2017-2018 0.95 1.95

2018-2019 0.85 1.14

2019-2020 0.85 1.34

2020-2021 0.93 0.87

Figure 4.1.1. Current Ratio of Tata and Maruti

INFERENCE: Current ratio indicates the ability of a concern to meet its current obligations
as and when they are due for payment .The expected standard current ratio is 2:1.All the
financial years of both Tata and Maruti didn’t meet the expected current ratio resulting in
inadequate current assets. Whereas, during the years current ratio of maruti is found to be
higher than Tata except for the financial year 2020-2021.
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2. Liquid Ratio= Quick assets

—
Current liabilities

TATA MOTORS

Table 4.1.4. Liquid ratio of Tata motors

YEAR QUICK ASSETS CURRENT LIABILITIES RATIO

2016-2017 81,034.44 115,629.52 0.700811004
2017-2018 93,835.21 143,219.47 0.6551847315
2018-2019 84,417.43 145,457.43 0.580358322
2019-2020 82,130.37 140,454.05 0.5847490336
2020-2021 110,799.05 157,749.18 0.7023748079

MARUTI SUZUKI

Table 4.1.5. Liquid Ratio of Maruti Suzuki

YEAR QUICK ASSETS CURRENT LIABILITIES RATIO

2016-2017 5,534.30 13,236.80 0.4180995407
2017-2018 4,769.80 15,448.50 0.3087548953
2018-2019 9,050.10 14,160.50 0.6391087885
2019-2020 5,226.70 11,305.40 0.4623188919

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2020-2021 15,495.30 16,120.50 0.9612170838

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 Table 4.1.6. Consolidated Liquid Ratio of Tata Motors And Maruti Suzuki

YEAR TATA MARUTI

2016-2017 0.7 0.42

2017-2018 0.65 0.31

2018-2019 0.58 0.64

2019-2020 0.58 0.46

2020-2021 0.7 0.96

Figure 4.1.2. Liquid Ratio of Tata Motors and Maruti Suzuki INFERENCE:
Liquid ratios are used to determine the debtor's ability to pay off current debt obligations
without raising external debt. The generally accepted quick ratio is 1:1. From the table, both
maruti and suzuki have failed to attain the standard quick ratio. Over the years they both
have maintained same quick ratio collectively
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 3. CASH POSITION RATIO =

Cash and bank balances + marketable securities Current

liabilities

TATA MOTORS

Table 4.1.7. Cash Position Ratio of Tata Motors

YEAR CASH CURRENT LIABILITIES RATIO

EQUIVALENTS
2016-2017 57,674.00 115,629.52 0.4987826638
2017-2018 65,188.52 143,219.47 0.455165209
2018-2019 52,913.69 145,457.43 0.3637744046
2019-2020 45,834.91 140,454.05 0.3263338437
2020-2021 61,220.94 157,749.18 0.388090385

MARUTI SUZUKI

Table 4.1.8. Cash Position Ratio of Maruti Suzuki

YEAR CASH CURRENT LIABILITIES RATIO

EQUIVALENTS
2016-2017 1,228.60 13,236.80 0.09281699504
2017-2018 1,542.40 15,448.50 0.09984140855
2018-2019 2,516.70 14,160.50 0.1777267752
2019-2020 2,023.70 11,305.40 0.1790029543
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2020-2021 4,350.00 16,120.50 0.2698427468

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 Table 4.1.9. Consolidated Cash Position Ratio of Tata Motors and Maruti Suzuki

YEAR TATA MARUTI

2016-2017 0.5 0.09

2017-2018 0.45 0.09

2018-2019 0.36 0.18

2019-2020 0.37 0.18

2020-2021 0.37 0.27

Figure 4.1.3. Cash Position Ratio of Tata Motors and Maruti Suzuki

INFERENCE: An ideal cash position ratio is 0.75:1 .During the study period,neither Tata nor
Maruti had satisfactory cash ratio. The highest ever cash ratio for Tata and Maruti was 0.45

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9
and 0.27 for the financial year 2017-2018 and 2020-2021. Between them, Tata managed to
move past Maruti.

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4. Debt equity ratio= Total long term debt

—
Shareholder’s fund

TATA MOTORS

Table 4.1.10. Debt Equity Ratio of Tata Motors

YEAR LONG TERM DEBT SHARE HOLDERS FUND RATIO

2016-2017 70,807.64 58,061.89 1.219520067
2017-2018 78,273.74 95,427.91 0.8202394876
2018-2019 84,163.39 60,179.56 1.398537809
2019-2020 99,994.18 63,078.53 1.585233201
2020-2021 114,949.65 55,246.72 2.080660173

MARUTI SUZUKI

Table 4.1.11. Debt Equity Ratio of Maruti Suzuki

YEAR LONG TERM DEBT SHARE HOLDERS RATIO

FUND
2016-2017 527.7 37,075.10 0.01423327247
2017-2018 638.5 42,559.40 0.01500256113
2018-2019 661.4 47,092.10 0.01404481856
2019-2020 714.5 49,413.00 0.01445975755
2020-2021 492.9 52,500.60 0.009388464132
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 Table 4.1.12. Consolidated Debt Equity Ratio of Tata Motors and Maruti Suzuki

YEAR TATA MARUTI

2016-2017 1.22 0.01

2017-2018 0.82 0.02

2018-2019 1.4 0.01

2019-2020 1.59 0.01

2020-2021 2.08 0.01

Figure 4.1.4. Debt Equity Ratio of Tata Motors and Maruti Suzuki

INFERENCE: The debt-to-equity ratio is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets. ideal ratio is 0.5:1 for debt-
equity.The debt-equity ratio is far less than 0.5:1 during all the years of study for Maruti
suzuki. This indicates that debt proportion is highly satisfactory and the company is highly
solvent to pay off its long term debts. Meanwhile the least debt equity ratio for Tata during the

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study period is 1.4.

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 5. Interest coverage ratio = EBIT/Interest

TATA MOTORS

Table 4.1.13. Interest Coverage Ratio of Tata Motors

YEAR EBIT INTEREST RATIO

2016-2017 12,438.24 4,238.01 2.934924646
2017-2018 13,861.68 4,681.79 2.960765007
2018-2019 4,039.01 5,758.60 0.70138749
2019-2020 -465.21 7,243.33 0.06422598446
2020-2021 11,383.91 8,097.17 1.405912189

MARUTI SUZUKI

Table 4.1.14. Interest Coverage Ratio of Maruti Suzuki

YEAR EBIT INTEREST RATIO

2016-2017 10,043.80 89.4 112.3467562
2017-2018 11,349.40 345.8 32.82070561
2018-2019 10,544.00 75.9 138.9196311
2019-2020 7,118.60 134.2 53.04470939
2020-2021 5,253.80 101.8 51.60903733

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 Table 4.1.15. Consolidated Interest Coverage Ratio of Tata Motors and Maruti
Suzuki

YEAR TATA MARUTI

2016-2017 2.93 112.35

2017-2018 3 32.82

2018-2019 0.7 138.92

2019-2020 -0.06 53.04

2020-2021 1.4 51.61

Figure 4.1.5. Interest Coverage Ratio of Tata Motors and Maruti Suzuki
INFERENCE: The interest coverage ratio is a debt and profitability ratio used to
determine how easily a company can pay interest on its outstanding debt.Generally, an interest
coverage ratio of at least two (2) is considered the minimum acceptable amount for a
company that has solid, consistent revenues. From the above table and analysis, Maruti has
highest interest coverage ratio in all the years compared to tata with the highest being 138.92
as it meets the standard ratio. It has high possibility of paying off their interest. Tata only
meets the standard ratio in the financial year 2016- 2017 which is 2.93

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6. GROSS PROFIT RATIO = Gross profit ×100

Net sales

TATA MOTORS

Table 4.1.16. Gross Profit Ratio of Tata Motors

YEAR GROSS PROFIT NET SALES RATIO

2016-2017 27219.78 269692.52 10.09%
2017-2018 32708.62 291550.47 11.22%
2018-2019 -7780.52 301938.41 -2.58%
2019-2020 10845.45 261067.97 4.15%
2020-2021 13072.43 249794.75 5.23%

MARUTI SUZUKI

Table 4.1.17. Gross Profit Ratio of Maruti Suzuki

YEAR GROSS PROFIT NET SALES RATIO

2016-2017 12731.1 68085 18.70%
2017-2018 13926.7 79809.4 17.45%
2018-2019 13644.6 86068.5 15.85%
2019-2020 10631.2 75660 14.05%
2020-2021 8355.1 70372 11.87%

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Table 4.1.18. Consolidated Gross Profit Ratio of Tata Motors and Maruti Suzuki

YEAR TATA MARUTI

2016-2017 10.09 18.7

2017-2018 11.22 17.45

2018-2019 -2.58 15.85

2019-2020 4.15 14.05

2020-2021 5.23 11.87

Figure 4.1.6. Gross Profit Ratio of Tata Motors and Maruti Suzuki

INFERENCE: Gross profit ratio (GP ratio) is a financial ratio that measures the performance
and efficiency of a business.The above table and figure shows almost a constant but low
decline in the gross profit of Maruti Suzuki, the highest being in the year 2016-2017 of 18.7.
Tata motors has the lowest gross profit. During the financial year 2018-2019 it had a gross
loss of 2.58.

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 4.2. TREND ANALYSIS

TREND ANALYSIS OF SALES

TATA MOTORS

Table 4.2.1. Trend Analysis of Sales of Tata Motors

YEAR SALES TREND % DIFFERENCE %

2016-2017 265,498.47 100 0

2017-2018 288,596.09 108 8

2018-2019 299,190.59 112 12

2019-2020 258,594.36 97 -3

2020-2021 246,972.17 93 -7

MARUTI SUZUKI

Table 4.2.2. Trend Analysis of Sales of Maruti Suzuki

YEAR SALES TREND % DIFFERENCE %

2016-2017 66,924.70 100 0

2017-2018 78,117.10 117 17

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2018-2019 83,038.50 124 24

2019-2020 71,704.80 107 7

2020-2021 66,571.80 99 -1

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 Table 4.2.3. Consolidated Trend Analysis of Sales of Tata Motors and Maruti Suzuki

YEAR TATA TREND % MARUTI TREND %

2016-2017 100 100

2017-2018 108 117

2018-2019 112 124

2019-2020 97 107

2020-2021 93 99

Figure 4.2.1. Trend Analysis of Sales of Tata Motors and Maruti Suzuki
INFERENCE: The table and figure indicates that for Maruti, the sales gradually
increased from 2016-17 to 2019-20, however it decreased by 1 % during 2020-21. The
sale value was highest during 2018-19 with 83,038.50 crores. The huge increase in
current assets is due to increase of the investments in other companies. Meanwhile for Tata ,
the sales value were fluctuating having the highest sale value in the year 2018-19 with
299,190.59 crores.
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TREND ANALYSIS OF CURRENT ASSETS

TATA MOTORS

Table 4.2.4. Trend Analysis of Current Assets of Tata Motors

YEAR CURRENT ASSETS TREND % DIFFERENCE %

2016-2017 116,119.75 100 0

2017-2018 135,972.84 117 17

2018-2019 123,431.16 106 6

2019-2020 119,587.25 102 2

2020-2021 146,887.64 127 27

MARUTI SUZUKI

Table 4.2.5. Trend Analysis of Current Assets of Maruti Suzuki

YEAR CURRENT ASSETS TREND % DIFFERENCE %

2016-2017 8,798.00 100 0

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2017-2018 7,930.00 90 -10

2018-2019 12,372.70 141 41

2019-2020 8,440.60 96 -4

2020-2021 18,544.30 211 111

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Table 4.2.6. Consolidated Trend Analysis of Current Assets of Tata Motors and Maruti
Suzuki

YEAR TATA TREND % MARUTI TREND %

2016-2017 100 100

2017-2018 117 90

2018-2019 106 141

2019-2020 102 96

2020-2021 127 211

Figure 4.2.2. Trend Analysis of Current Assets of Tata Motors and Maruti Suzuki
INFERENCE: The figure clearly shows that even though the current asset of Maruti was
fluctuating, it reached a direct peak in the year 2020-2021 having 18,544.30 crores worth
current asset. The current asset of Tata was steadily declining. The highest ever it managed to
reach was 146,887.64 crores in 2020-2021.

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TREND ANALYSIS OF CURRENT LIABILITIES

TATA MOTORS

Table 4.2.7. Trend Analysis of Current Liabilities of Tata Motors

YEAR CURRENT LIABILITIES TREND % DIFFERENCE %

2016-2017 115,629.52 100 0

2017-2018 143,219.47 124 24

2018-2019 145,457.43 126 26

2019-2020 140,454.05 121 21

2020-2021 157,749.18 136 36

MARUTI SUZUKI

Table 4.2.8. Trend Analysis of Current Liabilities of Maruti Suzuki

YEAR CURRENT LIABILITIES TREND % DIFFERENCE %

2016-2017 13,236.80 100 0

2017-2018 15,448.50 117 17

2018-2019 14,160.50 107 7

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2019-2020 11,305.40 85 -15

2020-2021 16,120.50 122 22

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 Table 4.2.9. Consolidated Trend Analysis of Tata Motors and Maruti Suzuki

YEAR TATA TREND % MARUTI TREND %

2016-2017 100 100

2017-2018 124 117

2018-2019 126 107

2019-2020 121 85

2020-2021 136 122

Figure 4.2.3. Trend Analysis of Current Liabilities of Tata Motors and Maruti Suzuki

INFERENCE: The current liabilities of Maruti was steadily decreasing from 2017-2018 to
2019-2020. It had the lowest current liability in 2019-2020 with 11,305.40 crores. It made a
sharp rise in 2020-2021 with 15%. Meanwhile Tata maintained a constant current liability
throughout, reaching the highest in 2020-2021 with 157,749.18 crores.

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TREND ANALYSIS OF SHARE CAPITAL
TATA MOTORS
Table 4.2.10. Trend Analysis of Share Capital of Tata Motors

YEAR SHARE CAPITAL TREND % DIFFERENCE %

2016-2017 679.22 100 0

2017-2018 679.22 100 0

2018-2019 679.22 100 0

2019-2020 719.54 106 6

2020-2021 765.81 113 13

MARUTI SUZUKI

Table 4.2.11. Trend Analysis of Share Capital of Maruti Suzuki

YEAR SHARE CAPITAL TREND % DIFFERENCE %

2016-2017 151 100 0

2017-2018 151 100 0

2018-2019 151 100 0

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2019-2020 151 100 0

2020-2021 151 100 0

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 Table 4.1.12. Consolidated Trend Analysis of Tata Motors and Maruti Suzuki

YEAR TATA TREND % MARUTI TREND %

2016-2017 100 100

2017-2018 100 100

2018-2019 100 100

2019-2020 106 100

2020-2021 113 100

Figure 4.2.4. Trend Analysis of Share Capital of Tata Motors and Maruti Suzuki

INFERENCE: Tata Motors had steady share capital till 2018-2019 after which it had steady
rise in 2020-2021 of 13% having 765.81 crore. Over the study period Maruti Suzuki
maintained constant share capital of 151 crores.

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 4.3. COMPARATIVE INCOME
STATEMENT: TATA MOTORS:
TABLE 4.3.1. COMPARATIVE INCOME STATEMENT FOR THE YEAR
ENDING 31ST MARCH 2017 AND 2018.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS 2017 2018 PERCENTAGE
Revenue From
Operations
[Gross]
270,298.08 289,386.25 19,088.17 7.06%
Less: Excise 4,799.61 790.16 -4,009.45 -83.54%
Other operating
revenues
4,194.04 6,023.09 1,829.05 43.61%
Other Income 754.54 888.89 134.35 17.81%
Total Revenue 270,447.05 295,508.07 17,042.12 6.30%
EXPENSES
Cost Of Materials
Consumed
159,369.55 171,992.59 12,623.04 7.92%
Purchase Of
Stock-In Trade
13,924.53 15,903.99 1,979.46 14.22%
Operating And
Direct Expenses
3,413.57 3,531.87 118.30 3.47%
Changes In
Inventories Of
FG,WIP And
Stock-In Trade

-7,399.92 -2,046.58 5,353.34 -72.34%

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Employee Benefit
Expenses
28,332.89 30,300.09 1,967.20 6.94%
Finance Costs 4,238.01 4,681.79 443.78 10.47%
Depreciation And
Amortisation
Expenses
17,904.99 21,553.59 3,648.60 20.38%
Other Expenses 59,340.16 58,998.93 -341.23 -0.58%
Less: Amounts
Transfer To
Capital Accounts
16,876.96 18,588.09 1,711.13 10.14%
Total Expenses 262,246.82 286,328.18 27,503.62 10.49%
P/L Before
Exceptional
Items & Tax
8,200.23 9,179.89 979.66 11.95%
Exceptional Items 1,114.56 1,975.14 860.58 77.21%
Tax 3,251.23 3,251.23 0.00
Profit after tax 6,063.56 7,903.80 1,840.24 30.35%

INFERENCE:

The above statement discloses that the other income had increased by 17.81%, resulting in
increase of total revenue. Moreover the finance cost increased by 10.47%, the total expenses
had increased by 10.49% and the tax expenses were nil. However the profit increased by
30.35% compared to the previous year. This shows that the performance of the company was
good during the year 2017-18.

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1
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TATA MOTORS:

4.3.2. A COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDING

31ST MARCH 2018 AND 2019.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS 2018 2019 PERCENTAGE
Revenue From
Operations
[Gross]
289,386.25 299,190.59 9,804.34 3.39%
Less: Excise 790.16 0 -790.16 -100.00%
Other operating
revenues
6,023.09 2,747.81 -3,275.28 -54.38%
Other Income 888.89 2,965.31 2,076.42 233.60%
Total Revenue 295,508.07 304,903.71 9,395.64 3.18%
EXPENSES
Cost Of Materials
Consumed
171,992.59 181,009.08 9,016.49 5.24%
Purchase Of
Stock-In Trade
15,903.99 13,258.83 -2,645.16 -16.63%
Operating And
Direct Expenses
3,531.87 4,224.57 692.70 19.61%
Changes In
Inventories Of
FG,WIP And
Stock-In Trade

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 -2,046.58 2,053.28 4,099.86 -200.33%
Employee Benefit
Expenses
30,300.09 33,243.87 2,943.78 9.72%
Finance Costs 4,681.79 5,758.60 1,076.81 23.00%
Depreciation And
Amortisation
Expenses
21,553.59 23,590.63 2,037.04 9.45%
Other Expenses 58,998.93 63,144.03 4,145.10 7.03%
Less: Amounts
Transfer To
Capital Accounts
18,588.09 19,659.59 1,071.50 5.76%
Total Expenses 286,328.18 306,623.30 20,295.12 7.09%
P/L Before
Exceptional
Items & Tax
9,179.89 -1,719.59 -10,899.48 -118.73%
Exceptional Items 1,975.14 -29,651.56 -31,626.70 -1601.24%
Tax 3,251.23 -2,437.45 -5,688.68 -174.97%
Profit after tax 7,903.80 -28,933.70 -36,837.50 -466.07%

INFERENCE:

The above statement discloses that total revenue and total expenses had increased by 3.18%
and 7.09% respectively. However the changes in inventories were decreased by 200.33% The
finance cost increased by 23% following the previous year. The profit increased to 466.07%
indicating good performance of the company during the year 2018-19.

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1
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TATA MOTORS:

4.3.3. A COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDING

31ST MARCH 2019 AND 2020.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS 2019 2020 PERCENTAGE
Revenue From
Operations
[Gross]
299,190.59 258,594.36 -40,596.23 -13.57%
Less:Excise 0 0 0
Other operating
revenues
2,747.81 2,473.61 -274.20 -9.98%
Other Income 2,965.31 2,973.15 7.84 0.26%
Total Revenue 304,903.71 264,041.12 -40,862.59 -13.40%
EXPENSES
Cost Of Materials
Consumed
181,009.08 152,671.47 -28,337.61 -15.66%
Purchase Of
Stock-In Trade
13,258.83 12,228.35 -1,030.48 -7.77%
Operating And
Direct Expenses
4,224.57 4,188.49 -36.08 -0.85%
Changes In
Inventories Of
FG,WIP And
Stock-In Trade

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 2,053.28 2,231.19 177.91 8.66%
Employee Benefit
Expenses
33,243.87 30,438.60 -2,805.27 -8.44%
Finance Costs 5,758.60 7,243.33 1,484.73 25.78%
Depreciation And
Amortisation
Expenses
23,590.63 21,425.43 -2,165.20 -9.18%
Other Expenses 63,144.03 58,826.20 -4,317.83 -6.84%
Less: Amounts
Transfer To
Capital Accounts
19,659.59 17,503.40 -2,156.19 -10.97%
Total Expenses 306,623.30 271,749.66 -34,873.64 -11.37%
P/L Before
Exceptional
Items & Tax
-1,719.59 -7,708.54 -5,988.95 348.28%
Exceptional Items -29,651.56 -2,871.44 26,780.12 -90.32%
Tax -2,437.45 395.25 2,832.70 -116.22%
Profit after tax -28,933.70 -10,975.23 17,958.47 -62.07%

INFERENCE:

The above statement discloses that the revenue from operations decreased by 13.57%, other
operating revenues had decreased by 9.98%, resulting in decrease of total revenue. Moreover
except for the finance cost, all other expenses were decreased , the total expenses had
decreased by 11.37% and the tax expenses decreased by 116.22%. However the profit
increased by 62.07% compared to the previous year. This shows that the performance of the
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company was good during the year 2019-20.

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TATA MOTORS:

4.3.4. A COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDING

31ST MARCH 2020 AND 2021.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS 2020 2021 PERCENTAGE
Revenue From
Operations
[Gross]
258,594.36 246,972.17 -11,622.19 -4.49%
Less:Excise 0 0 0 0
Other operating
revenues
2,473.61 2,822.58 348.97 14.11%
Other Income 2,973.15 2,643.19 -329.96 -11.10%
Total Revenue 264,041.12 252,437.94 -11,603.18 -4.39%
EXPENSES
Cost Of Materials
Consumed
152,671.47 141,357.27 -11,314.20 -7.41%
Purchase Of
Stock-In Trade
12,228.35 12,250.09 21.74 0.18%
Operating And
Direct Expenses
4,188.49 5,226.63 1,038.14 24.79%
Changes In
Inventories Of
FG,WIP And
Stock-In Trade

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 2,231.19 4,684.16 2,452.97 109.94%
Employee Benefit
Expenses
30,438.60 27,648.48 -2,790.12 -9.17%
Finance Costs 7,243.33 8,097.17 853.84 11.79%
Depreciation And
Amortisation
Expenses
21,425.43 23,546.71 2,121.28 9.90%
Other Expenses 58,826.20 39,189.82 -19,636.38 -33.38%
Less: Amounts
Transfer To
Capital Accounts
17,503.40 12,849.13 -4,654.27 -26.59%
Total Expenses 271,749.66 249,151.20 -22,598.46 -8.32%
P/L Before
Exceptional
Items & Tax
-7,708.54 3,286.74 10,995.28 -142.64%
Exceptional Items -2,871.44 -13,761.02 -10,889.58 379.24%
Tax 395.25 2,541.86 2,146.61 543.10%
Profit after tax -10,975.23 -13,016.14 -2,040.91 18.60%

INFERENCE:

The above statement discloses that the revenue from operations decreased by 4.49%, other
income was reduced by 11.10%, while the other operating revenues had increased by 14.11%,
resulting in 4.39% decrease of total revenue. During the financial year, cost of materials
consumed employee benefit expenses depreciation were decreased resulting in the decrease in

1
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overall expenses by 8.32% and increase in profit of 18.60%. This shows that the performance
of the company was good during the year 2020-21.

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MARUTI SUZUKI:

4.3.5. A COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDING

31ST MARCH 2017 AND 2018.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS AMOUNT AMOUNT PERCENTAGE
Revenue From
Operations [Gross]
76,156.10 80,348.80 4,192.70 5.51%
Less: Excise 9,231.40 2,231.70 -6,999.70 -75.82%
Other operating
revenues
1,160.30 1,692.30 532.00 45.85%
Other Income 2,289.60 2,045.80 -243.80 -10.65%
Total Revenue 70,374.60 81,855.20 11,480.60 16.31%
EXPENSES
Cost Of Materials

Consumed 42,627.90 44,943.20 2,315.30 5.43%

Purchase Of Stock- In
Trade
4,493.60 10,002.10 5,508.50 122.59%
Changes In
Inventories Of
FG,WIP And Stock-
In Trade

-379.3 40.8 420.1 -110.76%

Employee Benefit
Expenses
2,360.30 2,863.40 503.10 21.32%
Finance Costs 89.4 345.8 256.4 286.80%
Depreciation And

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Amortisation
Expenses
2,603.90 2,759.80 155.90 5.99%
Other Expenses 8,728.00 9,995.60 1,267.60 14.52%
Less: Inter Unit /
Segment / Division
Transfer
103.6 99.1 -4.5 -4.34%
Total Expenses 60,420.20 70,851.60 10,431.40 17.26%
Profit/Loss Before
Exceptional,
ExtraOrdinary Items
And Tax

9,954.40 11,003.60 1,049.20 10.54%

Tax 2,616.20 3,286.20 670.00 25.61%
Profit after tax 7,338.20 7,717.40 379.20 5.17%

INFERENCE:

The above statement discloses that the other income had increased by 10.65%, however other
operating revenues were increased by 45.85% resulting in increase of total revenue. The
inventories and stock in trade decreased by 110.76%, the total expenses had increased by
17.26% and the tax expenses increased by 25.61%. However the profit increased by 5.17%
compared to the previous year. This shows that the performance of the company was good
during the year 2017-18.

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MARUTI SUZUKI:

4.3.6. A COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDING

31ST MARCH 2018 AND 2019.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS 2018 2019 PERCENTAGE
Revenue From
Operations [Gross]
80,348.80 83,038.50 2,689.70 3.35%
Less:Excise 2,231.70 0 -2,231.70 -100.00%
Other operating
revenues
1,692.30 3,030.00 1,337.70 79.05%
Other Income 2,045.80 2,561.60 515.80 25.21%
Total Revenue 81,855.20 88,630.10 6,774.90 8.28%
EXPENSES
Cost Of Materials
Consumed
44,943.20 45,025.70 82.50 0.18%
Purchase Of Stock- In
Trade
10,002.10 15,026.60 5,024.50 50.23%
Changes In
Inventories Of
FG,WIP And Stock-
In Trade

40.8 211.6 170.8 418.63%

Employee Benefit
Expenses
2,863.40 3,285.00 421.60 14.72%
Finance Costs 345.8 75.9 -269.9 -78.05%
Depreciation And

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Amortisation
Expenses
2,759.80 3,020.80 261.00 9.46%
Other Expenses 9,995.60 11,638.50 1,642.90 16.44%
Less: Inter Unit /
Segment / Division
Transfer
99.1 122.1 23 23.21%
Total Expenses 70,851.60 78,162.00 7,310.40 10.32%
Profit/Loss Before
Exceptional,
ExtraOrdinary Items
And Tax

11,003.60 10,468.10 -535.50 -4.87%

Tax 3,286.20 2,973.20 -313.00 -9.52%
Profit after tax 7,717.40 7,494.90 -222.50 -2.88%

INFERENCE:

The above statement discloses that the other income had increased by 25.21%, other operating
revenues were increased by 79.05% resulting in increase of total revenue. During the financial
year only the finance cost was reduced by 78.05% in expenses resulting in the increase in total
expense by 10.32%. The profit decreased by 2.88% compared to the previous year. This shows
that the performance of the company was satisfactory during the year 2018-19.

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MARUTI SUZUKI:

4.3.7. A COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDING

31ST MARCH 2019 AND 2020.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS 2019 2020 PERCENTAGE
Revenue From
Operations [Gross]
83,038.50 71,704.80 -11,333.70 -13.65%
Less:Excise 0 0 0 0.00%
Other operating
revenues
3,030.00 3,955.20 925.20 30.53%
Other Income 2,561.60 3,334.40 772.80 30.17%
Total Revenue 88,630.10 78,994.40 -9,635.70 -10.87%
EXPENSES
Cost Of Materials
Consumed
45,025.70 34,634.80 -10,390.90 -23.08%
Purchase Of Stock- In
Trade
15,026.60 18,767.20 3,740.60 24.89%
Changes In
Inventories Of
FG,WIP And Stock-
In Trade

211.6 -238.7 -450.3 -212.81%

Employee Benefit
Expenses
3,285.00 3,416.20 131.20 3.99%
Finance Costs 75.9 134.2 58.3 76.81%
Depreciation And

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Amortisation
Expenses
3,020.80 3,528.40 507.60 16.80%
Other Expenses 11,638.50 11,889.60 251.10 2.16%
Less: Inter Unit /
Segment / Division
Transfer
122.1 121.7 -0.4 -0.33%
Total Expenses 78,162.00 72,010.00 -6,152.00 -7.87%
Profit/Loss Before
Exceptional,
ExtraOrdinary Items
And Tax

10,468.10 6,984.40 -3,483.70 -33.28%

Tax 2,973.20 1,425.20 -1,548.00 -52.07%
Profit after tax 7,494.90 5,559.20 -1,935.70 -25.83%

INFERENCE:

The above statement discloses that the total revenue had decreased by 10.87%. During the
financial year inventories and cost of material consumed were decreased by 212.81% and
23.08% resulting in the overall decrease in expense by 7.87%. The profit decreased by 25.83%
compared to the previous year. This shows that the performance of the company was
satisfactory during the year 2019-2020.

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MARUTI SUZUKI:

4.3.8. A COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDING

31ST MARCH 2020 AND 2021.

AMOUNT OF
INCREASE/DECREASE
PARTICULARS 2020 2021 PERCENTAGE
Revenue From
Operations [Gross]
71,704.80 66,571.80 -5,133.00 -7.16%
Less:Excise 0 0 0 0.00%
Other operating
revenues
3,955.20 3,800.20 -155.00 -3.92%
Other Income 3,334.40 2,936.30 -398.10 -11.94%
Total Revenue 78,994.40 73,308.30 -5,686.10 -7.20%
EXPENSES
Cost Of Materials

Consumed 34,634.80 33,296.40 -1,338.40 -3.86%

Purchase Of Stock- In
Trade
18,767.20 17,254.10 -1,513.10 -8.06%
Changes In
Inventories Of
FG,WIP And Stock-
In Trade

-238.7 273.6 512.3 -214.62%

Employee Benefit
Expenses
3,416.20 3,431.60 15.40 0.45%
Finance Costs 134.2 101.8 -32.4 -24.14%
Depreciation And

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Amortisation
Expenses
3,528.40 3,034.10 -494.30 -14.01%
Other Expenses 11,889.60 10,837.50 -1,052.10 -8.85%
Less: Inter Unit /
Segment / Division
Transfer
121.7 72.8 -48.9 -40.18%
Total Expenses 72,010.00 68,156.30 -3,853.70 -5.35%
Profit/Loss Before
Exceptional,
ExtraOrdinary Items
And Tax

6,984.40 5,152.00 -1,832.40 -26.24%

Tax 1,425.20 931.9 -493.30 -34.61%
Profit after tax 5,559.20 4,220.10 -1,339.10 -24.09%

INFERENCE:

The above statement discloses that the revenue from operations(gross) had decreased by
7.16%. Other operating revenues and income were also reduced by 3.92% and 11.94%
resulting in the overall decrease in the total revenue of 7.20%. During the financial year, apart
from employee benefit expenses, all other expenses were decreased which led to total decrease
in expenses by 5.35%. The profit decreased by 24.09% compared to the previous year. This
shows that the performance of the company was poor during the year 2020-2021.

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 CHAPTER V

FINDINGS, SUGGESSTIONS & CONCLUSION

This chapter comprises the project findings, conclusions and suggestions.

5.1. FINDINGS:

 All the financial years of both Tata and Maruti didn’t meet the expected current ratio
resulting in inadequate current assets.

 Both maruti and suzuki have failed to attain the standard quick ratio of 1:1 in the study
period 2017-2021.

 The highest ever cash ratio for Tata and Maruti was 0.45 and 0.27 for the financial year
2017-2018 and 2020-2021. Between them, Tata managed to move past Maruti .Neither
Tata nor Maruti had satisfactory cash ratio of 0.75:1

 The debt-equity ratio is far less than 0.5:1 during all the years of study for Maruti
suzuki. This indicates that debt proportion is highly satisfactory and the company is
highly solvent to pay off its long term debts. Meanwhile the least debt equity ratio for
Tata during the study period is 1.4.

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 From the above table and analysis, Maruti has highest interest coverage ratio in all the
years compared to tata with the highest being 138.92 as it meets the standard ratio. It
has high possibility of paying off their interest . Tata only meets the standard ratio in
the financial year 2016-2017 which is 2.93 with the standard ratio being minimum 2.

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 There is a constant but low decline in the gross profit of Maruti Suzuki, the highest
being in the year 2016-2017 of 18.7. Tata motors has the lowest gross profit. During
the financial year 2018-2019 it had a gross loss of 2.58. Highest being 11.22 in the year
2017-2018

 The sales trend shows fluctuating trend (increasing in the beginning and
declining at the end) during the study period. For both Tata and Maruti.
However during the financial year 2017-2018 and 2018-2019 Maruti had
higher sales Trend with 17% and 24% while tata only had 8% and 12%.

 The current asset trend of Maruti was fluctuating in the start of the study period,
however it reached a direct peak in the year 2020-2021 having 18,544.30 crores worth
current asset. The current asset of Tata was steadily declining. The highest ever it
managed to reach was 14,887.64 crores in 2020- 2021.

 The trend percentage of current liabilities of Maruti was steadily decreasing from
2017-2018 to 2019-2020. It had the lowest current liability in 2019-2020 with
11,305.40 crores. It made a sharp rise in 2020-2021 with 15%. Meanwhile Tata
maintained a high but constant current liability through out, reaching the highest in
2020-2021 with 157,749.18 crores.

 Trend percentage of share capital of Tata Motors was steady till 2018-2019 after which
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it had sharp rise in 2020-2021 of 13% having 765.81 crore. Over

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the study period Maruti Suzuki maintained constant share capital of 151 crores.

 Overall in the financial year 2018-2019 Tata Motors have show high profits of
466.07%, while during the same financial year Maruti Suzuki had a loss of 2.88%

 During the study period 2019-2020, Tata motor had decrease in the expense by 11.37%
having decreased all their expenses and showed a profit of 62.07%. Maruti had
decreased expense of 7.87%. Both of the company showed less expense in the
entire study period of 2017-2021.

 Tata motors also had less revenue in the financial year 2019-2020 with - 13.40% and
maruti having -10.87. Even though maruti had reduced expenses, their revenue were
also decreased so they had a loss of 25.83%.

 The decrease in overall expenses of tata motors by 8.32% compensated the reduced
revenue of 4.39% resulting in profit of 18.60% for the financial year 2020-2021.

 Tata Motor’s other income had increased by 17.81%, resulting in increase of total
revenue. Moreover the finance cost increased by 10.47%, the total expenses had
increased by 10.49% and the tax expenses were nil. However the profit increased by
30.35% compared to the previous year. This shows that the performance of the
company was good during the year 2017-18. Maruti suzuki’s other income had
increased by 10.65%, other operating revenues were increased by 45.85% resulting in
increase of total revenue. The
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 inventories and stock in trade decreased by 110.76%, the finance cost increased to
282.60% the total expenses had increased by 17.26% and the tax expenses increased by
25.61%. However the profit increased by 5.17% compared to the previous year. This
shows that the performance of the company was good during the year 2017-18.

5.2. SUGGESTIONS

 Both Tata Motors and Maruti Suzuki have to increase their currents assets to meet the
fixed standard.

 Both the company must increase their quick ratio to pay off current debt
obligations without raising external debt.

 The cash ratio must be met with the standard to be able to meet the liquidity of the
company to pay off short term debt.

 Tata must increase their debt equity to pay off long term debts.

 Tata must raise it’s interest coverage ratio to pay off the interest on it’s
outstanding debts.

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5.3. CONCLUSION:

 Most of the obligations were not met by Tata motors while compared to Maruti Suzuki.

 During the study period, Tata Motors didn’t meet the qualified standards for measuring
ratios like current ratio, quick ratio, cash position ratio, debt equity ratio and interest
coverage ratio, which are the primary factors and indicators for the fiscal well being of
the company.

 The trend analysis of Tata in terms of sales, current assets were declining compared to
Maruti. Only the Trend analysis of Current liabilities was high in Tata Motors.

 The overall profits of Tata Motors were low when compared to Maruti Suzuki. Finally
the company is loss making or rather we can say decreasing their profitability but they
have good future opportunities.

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BIBLIOGRAPHY:

Journals and Publications

1. Gahlot, Kishan Lal, Analysis of financial statement of Rajasthan tourism Development

Corporation 2017; https://sg.inflibnet.ac.in/handle/10603/237447
2. Manickavasugi, S P, Analysis of financial statement of selected Indian public sector oil
companies July, 2011; https://sg.inflibnet.ac.in/handle/10603/4916
3. Basheer Ahamed, T M, Financial analysis of fertiliser industry in Tamil Nadu, 2006;
https://sg.inflibnet.ac.in/handle/10603/114904
4. Kanchana P, A study of financial statement of Sambandam spinning mills limited Salem
02/01/2006; http://hdl.handle.net/10603/23260
5. Chitrabalu P Financial performance analysis of Tata Elxsi LTD Chennai 03/10/2006;
http://hdl.handle.net/10603/23233 6. Vanitha G A study on financial statement analysis of
Lakshmi vilas bank LTD 01/09/2006; http://hdl.handle.net/10603/23203
7. Kharpas, A.B. Financial statement analysis of engineering industries in Maharashtra state
20/12/2004; https://sg.inflibnet.ac.in/handle/10603/106466
8. Maria Nevis Soris, N Financial viability of major ports in South India 2003;
http://hdl.handle.net/10603/63848
9. Manoharan, Padmaja, Profitability of cement industry in India an analytical study
31/03/2002; http://hdl.handle.net/10603/102275
10. Gupta, Dinesh Chandra Analysis of financial statement of public sector cement industry
in India with special reference to UP ,1991 ; https://sg.inflibnet.ac.in/handle/10603/260703
11. I.C. Arya, "Cost function is cement industry in India", Artha —vikas volume.20, No.1 &
2 Jan — Dec 1984 P.24-48

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Web links for journals and publications

1. https://www.lloydbusinessschool.edu.in/Research-Publication/pdf/complete-paper-
himanshu-goel-1-3-2021.pdf
2. https://www.researchgate.net/publication/342702846_Financial_Statement_Analyses_
of_Tata_Motors_Limited
3. https://www.researchgate.net/publication/325535534_Review_of_Financial_Performa
nce_analysis_of_Corporate_Organizations
4. http://www.azadsandesh.com/Upload/EPaper/PDF/1.pdf

5. https://www.worldwidejournals.com/indian-journal-of-applied-research-
(IJAR)/recent_issues_pdf/2013/April/April_2013_1364967428_45cc8_105.pdf
6. https://eprajournals.com/jpanel/upload/1157pm_86.EPRA%20JOURNALS-5755.pdf

7. https://www.ijcrt.org/papers/IJCRT2003042.pdf

8. https://www.theeconomicsjournal.com/article/view/68/4-1-4

9. https://www.allresearchjournal.com/archives/2018/vol4issue3/PartA/4-2-78-543.pdf

10. https://eprajournals.com/jpanel/upload/926pm_3.EPRA%20JOURNALS-5462.pdf

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