As the world is growing rapidly, the businesses are also moving to become the huge one. And by thatresult, more and more people want to become a master in these businesses. The main purpose in thefinance field is to know how the financial analysis is done. We all know that finance is the blood of anybusiness and without it no business can run. Financial analysis of a company is very difficult and themost important task and by doing this I am able to know the whole financial position and financialstructure of the company.Simply by looking at how much cash a company has does not provide enough information. Thefinancial statements need to be analyzed to measure a company’s performance and to compare itwith other firm’s in the same industry. The resulting information is intended to be useful to owners,potential investors, creditors, analysts, and others as the analysis evaluates the past performance,future potential and financial position of the firm.This report is an analysis of financial statements of Ashok Leyland. This report has been preparedwith an objective to develop analytical skills required to interpret the information (explicit as well asimplicit) provided by the financial statements and to measure the company’s performance during thepast few years. The financial statements are analyzed using traditional evaluation techniques such ashorizontal analysis, vertical analysis and trend analysis. Details are given in chapter 3 of this report.Ratios are an important tool in analyzing the financial statements and so in chapter 4, 5 and 6 ratiosare analyzed to measure the company’s profitability, solvency & liquidity. Sincere attempts have beenmade to make this report error free but if any errors and omissions are found then I apologize for that.