By:Ajay Banka

8/14/2019 By:Ajay Banka

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TATA

BY:-

AJAY BANKA


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Tata Motors Industry : Automobile Company.

Established : 1945 .

Founder JRD Tata.

Chairman Ratan Tata

Headquarter Mumbai (India).

Revenues Rs.70,938.85 crores(2008-09)

Employees 23,000.


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Cont. Its a Dual Listed Company (BSE &

NYSE).

Manufacturing and Assembly Plant at

Jamshedpur, Pantnagar, Lucknow,

Ahmedabad and Pune in India.

Also in, Argentina, South Africa and

Thailand.


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Products Cars and utility vehicles

Concept vehicles

Commercial vehicles

Military vehicles


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Liquidity ratioCurrent ratio = Currentassets / Current liability

2008 2007

Current Assets 192,673.5 162,779.2

Current Liability 188,948.8 127,633.7

Current Ratio (2008) 192,673.5/ 188,948.8 = 1.01

Current Ratio (2007) 162,779.2/ 127,633.7 = 1.27

Quick Ratio (2008) C.A. - Invent. / C.L.192,673.5 - 32,946.4 / 188,948.8 = .85

Quick Ratio (2007) 162,779.2- 31,669.0/127,633.7 = 1.02


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Cont Interval measure = Current assets-inven. / avg. daily cash oper. Exp

For 2008 : Avg. daily cash oper. Exp.- Total cash exp./ 365

67,663.1/ 365 = 185.3

Interval measure - 192,673.5 - 32,946.4 / 185.3 = 862 days

For 2007 : Avg. daily cash oper. Exp - 56,050.6/ 365 = 153.5 Interval measure - 162,779.2- 31,669.0 / 153.5 = 854 days

In liquidity ratio, we observe that current ratio in 2008 is less in comparison of2007. it means companies efficiency decreases in paying current liability. And inquick ratio, it also decreases. In 2008, regular cash meet was 862 days incomparison of 854 of 2007. It means firms ability to pay its daily exp. Increases.


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Leverage Ratio Total debt ratio : Total debt / capital employed

For 2008

Total debt : 63,345.5 Capital employed : Net worth + borrowing

Or Share capital + debt.

86,975.2+ 63,345.5= 150320.763,345.5 / 150320.7 = .42

For 2007 Total debt : 38,693.6 Capital employed : 77,216.7 + 38,693.6= 115910.3

(shr. cap) (debt)38,693.6 / 115910.3 = .33


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Cont Debt equity ratio - Net worth / total debt

Net worth = share cap. For 2008 86,975.2/63,345.5 = 1.37 For 2007 77,216.7 /38,693.6 = 1.99

Capital equity ratio - Capital employed / net worth

For 2008 150320.7 / 86,975.2= 1.73 For 2007 115910.3 / 77,216.7 = 1.50

Interest coverage ratio EBIT + depreciation / Intere

2008 2007

Earning before tax 30,448.3 31,326.4 Add- Interest 9,127.2 4,650.6 Total 39575.5 359


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Cont. For 2008 : 39575.5 + 7,820.7/9,127.2 =

5.19

For 2007 : 35977 + 6,880.9 / 4,650.6=

9.21

In 2008, the long term financial position getting strong than2008. Capability of

paying long term debt. is increases. As we seen, debt ratioincreases. And the

contribution of debt is increases in 2008 than 2007. and thepart of share capital is

Also increases in total capital employed than 2007. it means,company is increasing

Its capital through shares.


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Activity RatioInventory Turnover Ratio = Cost of goods sold / Inventory

(2008) (2007)

Cost of goods sold : 254,571.5234,753.6

Inventory : 32,946.4 31,669.0

For 2008 : 254,571.5 / 32,946.4 = 7.72

For 2007 : 234,753.6 / 31,669.0 =7.41


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ContDebtor Turnover Ratio = Sales / debtor

For 2008 : 358,086.0 (sales) / 97,555.9 (debtor) = 3.67

For 2007 : 325,143.8 (sales) / 101,638.5 (debtor) = 3.20

Average collection period (2008) = 360 / 3.67 = 98 days

Average collection period (2007) = 360 / 3.20 = 112 days

Assets Turnover Ratio : Sales / Net assets or capital employed

For 2008 : 358,086.0 (sales) / 150320.7 (c.e.) = 2.38

For 2007 : 325,143.8 (sales) / 115910.3 (c.e.) = 2.80


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ContWorking Capital Turnover Ratio = Sales / Net working capital

Net Working Capital = Current assets Current liability

For 2008 : = 192,673.5 - 188,948.8 = 3724.7 For 2007 : = 162,779.2 - 127,633.7 = 35145.5

For 2008 : 358,086.0 (sales) / 3724.7 (N.W.C.) = 96.13

For 2007 : 325,143.8 (sales) / 35145.5 (N.W.C) = 09.25

As we seen, companys efficiency of using its assets is increasing in 2008 than

2007. The inventory turnover ratio which shows its efficiency of selling product isincreasing. Average collection period is decreasing means company is selling itsproduct more on cash basis in 2008 than 2007. but companys assets turnoverratio is decreasing means sales is not growing according to its capital employedand working capital.


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Profitability Ratio Gross Margin = Gross profit / Sales Gross Margin (2008) = 103,514.5 / 358,086.0

= .29 Gross Margin (2007) = 90,390.2 / 325,143.8

= .28 EBIT Ratio = PAT / EBIT For 2008 = 21,677.0 / 37878.9 = .57 For 2007 = 21,699.9 / 35384.5 = .61 Return on investment= EBIT / Capital employed

For 2008 = 39575.5 / 150320.7 = .26 For 2007 = 35977 / 115910.3 = .31


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Cont. Return on equity = PAT / Net worth

For 2008 = 21,677.0 / 86,975.2 =.25

For 2007 = 21,699.9 / 77,216.7 = .28

In profitability ratio, the gross profit ratio is increasing in 2008 than 2007.it

means its profit is growing in sales. But companys EBIT ratio isdecreasing means

interest on capital and tax rate is increased in 2008 than 2007 which isresponsible

in decreasing its PAT. And companys return on investment is decreasedthat

indicates that its earning on capital employed is decreased in 2008 than2007. and

its ROE is also decreases means its PAT on its share capital is decreased.


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THANK YOU


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By:Ajay Banka

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