Presented by: Piyush Jain

Financial analysis is the process of identifying the

financial strengths and weaknesses of the firm by

properly establishing relationships between the

items of the balance sheet and the profit & loss A/c.

Financial analysis can be undertaken by

management of the firm, or by parties outside the

firm i.e. owners, creditors, investors and others.

Sales Analysis of TVS motor co ltd.

Capital Structure Analysis

Working Capital Analysis

Shareholding Pattern

Ratio analysis is a powerful tool of financial analysis. It can be used to compare the risk & return relationships of firms of different sizes.

Liquidity ratios attempt to measure a company's ability to pay off its

short-term debt obligations. This is done by comparing a company's

most liquid assets(or, those that can be easily converted to cash), its

short-term liabilities.

In general, the greater the coverage of liquid assets to short-term

liabilities the better as it is a clear signal that a company can pay its

debts that are coming due in the near future and still fund its ongoing

operations. On the other hand, a company with a low coverage rate

should raise a red flag for investors as it may be a sign that the company

will have difficulty meeting running its operations, as well as meeting its

obligations.

Current ratio indicates the availability of current assets in rupees for

every one rupee of current liability. So we can see that over 5 years the

current ratio has increased from unsatisfactory level of 0.94 to

satisfactory level of 1.37

Quick ratio shows the relationship between liquid asset & current

liabilities. It is also measure of short term solvency. So we can see that

the quick ratio of co. is not satisfactory as they are short with their

assets to pay of the liabilities as in all 5 years the quick ratio < 1.

Cash Ratio shows the Companies abilities to meet its short term

obligations out of Cash Balance or assets equivalent to cash

Leverage ratio shows the proportions of debt and equity in

financing the firm’s assets.

These ratios can be used to determine the overall level of

financial risk a company and the firm’s ability of using debt

to shareholder’s advantage.

Efficiency ratio reflect the firm’s efficiency in utilizing its

assets.

These ratios look at how well a company turns its assets

into revenue as well as how efficiently a company converts

its sales into cash. Basically, these ratios look at how

efficiently and effectively a company is using its resources

to generate sales and increase shareholder value. In

general, the better these ratios are, the better it is for

shareholders.

Profitability ratios measure overall

performance and effectiveness of the

firm in generating profit, and are

calculated by establishing relationships

between sales and assets on the other.