Automobile Industry Presentation

8/12/2019 Automobile Industry Presentation

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A STUDY ON FINANCIAL PERFORMANCE OFSELECTED AUTOMOBILE COMPANIES

S.JA

IInd


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INTRODUCTION

Financial Performance is a subjective measure of how

firm can use assets from its primary mode of business and generate rev

Financial decisions which increase risks will decrease the value of th

and on the other hand, financial decisions which increase the profitabili

increase value of the firm. Risk and profitability are two essential ingre

of a business concern. There has been a considerable debate abo

ultimate objective of firm performance, whether it is profit maximizat

wealth maximization .


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MEANING

1.Finance is the allocation of assets and liabilities over time under conditio

certainty and uncertainty. A key point in finance is the time value of money, w

states that a unit of currency today is worth more than the same unit of cur

tomorrow.

2. Finance aims to price assets based on their risk level, and expected rate of re

Finance can be broken into three different sub categories: public finance, corpfinance and personal finance.


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IMPORTANCE OF FINANCE

1. It helps in obtaining sufficient funds at a minimum cost.

2. It tries to generate sufficient profits to finance expansion

modernization of the enterprise and secure stable growth.

3. It also ensures safety of funds through creation of res

investment of profit, etc.


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Uses of Financial Management

1. Anticipating financial needs.2. Acquiring financial resources.3. Allocating funds in Business.4. Administrating the allocation of funds.5. Analyzing the performance of finance.6. Accounting and Reporting to management.


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Need of the Study

1. Financial analysis is the powerful mechanism which helps in ascertaining t

strengths and weakness in the operation and financial position of an enterp

2. Financial statement analysis is largely a study of the relationship among th

various financial factors in a business as disclosed by a single set statemen

a study of the trend of these factors as shows in a series of statement.

3. Financial analysis is the process of identifying the financial strengths and

weakness of the firm by properly establishing relationship between the item

the balance sheet and the profit and loss accounts.


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Limitation of the study

Time was one of the limitations of this study. Because of the

of time the analysis is based on the secondary data collected from

balance sheet, profit and loss accounts and other records from

organization.


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Review of Literature

1. The study was intended to probe into the financial condition-financial

and weakness-of the Indian Auto-mobile industry.

2. An attempt has been made in this study to analyze the important v

Automobile industry and projected future trends regarding sales and pro

next 10 year periods, with a view to help the policy makers to take

decisions .

3. It is conceptualized that sustained growth, adequate liquidity an

profitability in the SME sector is significantly related to their inve

financing decisions.


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RESEARCH METHODOLOGY 1.RESEARCH

Research is a process in which the researcher wishes to find out

end result for a given problem and thus the solution helps in fucourse of action2.RESEARCH DESIGN

The research design used in this project is Analytical in nature

procedure using, which researcher has to use facts or informaalready available, and analyze these to make a critical evaluation of

performance.


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3.OBJECTIVES OF THE STUDY

To analyse the liquidity position of selected companies.

To analyse the profitability position of the leverage selected

companies.

To analyse the leverage position of the selected companies.

To analyse the turnover position of the selected companies


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4.Scope of the study

The scope of the study is to analyse the financial performance of t

company. Automobile industry and also ascertain the development of

financial position of the company.

5. Limitations of the study

The time duration of the study is limited.The financial statement and annual reports are taken into

consideration


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RATIO ANALYSIS

Ratio analysis is an accounting tool, which can be used to meas

the solvency, the profitability, and the overall financial strength o

business, by analyzing its financial accounts Accounting ratios are v

easy to calculate and they enable a business to highlight which areas

its finances are weak and therefore require immediate attention


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1.LIQUIDITY RATIO

1. Current RatioCurrent ratio=Current Assets/Current Liabilities .

2. Quick RatioQuick Ratio = Current Assets - Inventories/Current Liabilities.

3. Cash RatioCash Ratio =Cash and Cash Equivalents / Current Liabilitie

4.Net Working Capital Networking Capital = Current Assets Current Liabilities


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4.Net Working Capital

Net Working Capital=Current Assets Current Liabilities


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Suggestions

The companies may use debt so that may attract the shareholders. Because of

liquidity position, so it can meet out its immediate obligations.


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CURRENT RATIO COMPANY NAME YEAR CURRENT ASSETS CURRENT LIABILITIES CURRENT RATIO

ASHOK LEYLAND

2008-2009 2374.91 2207.29 1.075

2009-2010 2849.22 3002.68 0.948

2010-2011 3573.64 3505.26 1.019

2011-2012 3493.56 4837.41 0.722

2012-2013 3329.37 4749.58 0.701

BAJAJ AUTO

2008-2009 833.17 1378.20 0.604

2009-2010 819.25 2218.06 0.369

2010-2011 1065.49 2624.35 0.406

2011-2012 1548.22 2925.53 0.529

2012-2013 1195.14 668.22 1.788

HERO MOTORCORP

2008-2009 694.26 1678.93 0.413

2009-2010 2408.27 3965.69 0.607

2010-2011 703.27 5316.40 0.132

2011-2012 1003.98 3520.66 0.285

2012-2013 1482.80 2893.39 0.512

TATA MOTORS

2008-2009 4423.18 10968.95 0.403

2009-2010 5939.67 16909.30 0.351

2010-2011 8923.19 16271.85 0.548

2011-2012 9137.51 20280.82 0.450

2012-2013 6753.93 16580.47 0.407

TVS MOTORS

2008-2009 544.11 776.08 0.701

2009-2010 549.78 838.62 0.655

2010-2011 804.48 1047.94 0.767

2011-2012 831.66 1149.47 0.723

2012-2013 827.63 1242.15 0.666


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CHART


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LEVERAGE RATIO

1. Debt Equity RatioDebt Equity Ratio = Total Debt/ Net Worth.

2.Debt RatioDebt Ratio = Total Debt/ Total Assets.

Suggestions


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Suggestions

Debt Ratio

COMPANY NAME YEAR TOTAL DEBT TOTAL ASSETS DEBT RATIO

ASHOK LEYLAND

2008-2009 1961.98 5435.87 0.360

2009-2010 2280.45 5936.76 0.384

2010-2011 2658.19 6621.14 0.401

2011-2012 2395.53 6607.32 0.362

2012-2013 3504.82 7959.92 0.440

BAJAJ AUTO

2008-2009 1570.00 3439.69 0.456

2009-2010 1338.58 4266.92 0.313

2010-2011 325.15 5235.37 0.062

2011-2012 97.48 6138.55 0.015

2012-2013 71.27 9300.35 0.007

HERO MOTORCORP

2008-2009 78.49 3879.24 0.020

2009-2010 66.03 3531.05 0.018

2010-2011 1491.16 4447.22 0.335

2011-2012 994.85 5284.68 0.188

2012-2013 302.16 5308.40 0.056

TATA MOTORS

2008-2009 13165.56 25559.83 0.515

2009-2010 16625.91 31429.69 0.528

2010-2011 14638.19 34651.49 0.422

2011-2012 11011.63 30637.64 0.359

2012-2013 14268.69 33403.53 0.427

TVS MOTORS

2008-2009 905.98 1719.11 0.527

2009-2010 1003.29 1868.67 0.536

2010-2011 785.42 1784.83 0.440

2011-2012 715.46 1884.76 0.379

2012-2013 545.86 1770.53 0.308


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CHART

TURN OVER RATIO


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TURN OVER RATIO

1. Fixed Assets Turnover RatioFixed Assets Turnover Ratio= Sales/Fixed Assets.

2. Current Assets Turnover RatioCurrent Assets Turnover Ratio = Net Sales / Current


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Suggestions

The turnover ratio is decreasing .

FIXED ASSETS TURNOVER RATIOCOMPANY NAME YEAR NET SALES FIXED ASSETS FIXED ASSETS

TURNOVER RATIO

ASHOK LEYLAND

2008-2009 6168.99 3060.96 2.015

2009-2010 7436.18 3087.54 2.408

2010-2011 11407.15 3047.5 3.743

2011-2012 13309.59 3113.76 4.274

2012-2013 12481.20 4630.55 2.695

BAJAJ AUTO

2008-2009 8709.06 2606.52 3.341

2009-2010 11847.91 3447.67 3.436

2010-2011 16482.38 4169.88 3.952

2011-2012 19582.32 4590.33 4.265

2012-2013 20041.99 8105.21 2.472

HERO

MOTORCORP

2008-2009 12325.38 3184.98 3.869

2009-2010 15839.58 1122.78 14.107

2010-2011 19366.97 3743.95 5.172

2011-2012 23586.80 4280.7 5.510

2012-2013 23768.11 3825.6 6.212

TATA MOTORS

2008-2009 25660.67 21136.65 1.214

2009-2010 35373.29 25490.02 1.387

2010-2011 47088.44 25728.3 1.830

2011-2012 54306.56 21500.13 2.525

2012-2013 44765.72 26667.6 1.678

TVS MOTORS

2008-2009 3670.92 1175 3.124

2009-2010 4363.11 1318.89 3.308

2010-2011 6179.48 980.35 6.303

2011-2012 7126.20 1053.1 6.776

2012-2013 7065.00 942.9 7.492


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FIXED ASSETS TURNOVER RATIOCHART


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FINDINGSAnalysis of financial statements leads to some findings which indicate the perfo

of the company in certain aspects.

Long term solvency :

This shows that company is using long term fund for other than acquiring fixe

Short term solvency :

Short term solvency ratios are in more than the comfort level. Most of them

above the recommendable levels.Activity Ratios :

Activity ratios of the company are giving different pictures about the util

of the resources.

Conclusion


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Conclusion

The financial performance of the companies shou

developed from one year to next year. The financial analysis help

organization 1.0 improve its financial strength . A continuouscost cutting and improving productivity will help the companie

making reasonable profits despite the impact of higher comm

prices and weaker rupee. The analysis gives an optimistic view a

the industry and its growth which recommends the investors to ke

good watch on the major players to benefit in terms of returns on

investments.

Automobile Industry Presentation

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