FM Project 2

F.M.
II ASSIGNMENT
SUBMITTED TO,
MR. SURYA NARAYAN MOHAPATRA
SUBMITTED BY,
ARADHANA SINGH
ANSHUMAN SARANGI
SAMIR RAPAUEL
SHRESTHA DAS
KARTHIK KUMAR S.A.
BATCH 2011 2013
INDEX
Serial
No
1
Particulars
Introduction
1.1
1.2
1.3
Tata Motors
Maruti Suzuki
Mahindra and Mahindra
Analysis of Financial statements of the company

2.1
2.2
2.3
3
4
Tata Motors
Maruti Suzuki
Leverages
Methods of Financial statements Analysis
4.1
4.2
4.3
4.4
4.5
Ratios
Common size Analysis
Trend analysis
Funds flow Analysis
Cash Flow Analysis
5
6
Sources of Long Term Finance

Projected Financial Statement Analysis
6.1
6.2
6.3
Tata Motors
Maruti Suzuki
7
8
Capital Structure
Compare its performance with industry
averages/other companies in the
Scopes and limitations
Summary
9
10
Page
no
1. INTRODUCTION
1.1 Tata Motors Ltd
Industry :Automobiles - LCVs/HCVs
Tata Motors Ltd is India's largest automobile company. The company is the leader in commercial
vehicles in each segment, and among the top three in passenger vehicles with winning products
in the compact, midsize car and utility vehicle segments. They are the world's fourth largest truck
manufacturer, and the world's second largest bus manufacturer.
The company is engaged in the development, designing, manufacturing, assembling and sale of
vehicles, including financing thereof, as well as sale of related parts and accessories. They
manufacture commercial vehicle, three passenger vehicle, truck and bus. They have a portfolio
of automotive products, ranging from sub-1 ton to 49 ton gross vehicle weight (GVW), trucks
(including pickup trucks) and from small, medium, and large buses and coaches to passenger
cars, including the car, the Tata Nano.
The company's segments include automotive, and others, which include information technology
(IT) services, construction equipment manufacturing, machine tools and factory automation
solutions, high-precision tooling and plastic and electronic components for certain applications,
and investment business.
The company's passenger cars include the Indica, the Indica Vista, the Indigo and the Indigo
Marina. Jaguar produces four car lines: XK, XF, XJ and X-Type. They manufacture a number of
utility vehicles (UV), including the Sumo, and the sports utility vehicle (SUV), Tata Safari. Also,
they manufacture a variety of light commercial vehicles (LCVs), including pickup trucks, trucks
and buses with GVW of between 0.7 ton and 7.5 tons. This also includes the Ace, a mini-truck
with a 0.7 ton payload, the Magic, a passenger variant for commercial transportation and the
Winger. They also manufacture a variety of medium and heavy commercial vehicles
(M&HCVs), which include trucks, buses, dumpers and multi-axled vehicles with GVW of
between 9 tons to 49 tons.
The company's manufacturing plants are situated at Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Dharwad (Karnataka) and
Sanand (Gujarat). Through their subsidiaries and associate companies, the company has
operations in the UK, South Korea, Thailand and Spain.
Tata Motors Ltd was incorporated in the year 1945 with the name Tata Engineering and
Locomotive Co Ltd for manufacturing locomotives and other engineering products. In the year
1948, the company introduced steam road roller in collaboration with Marshall Sons (UK). In the
year 1954, they made collaboration with Daimler Benz AG, West Germany for manufacturing
medium commercial vehicles. In the year 1959, they set up a Research and Development Centre
at Jamshedpur. In the year 1961, they started to export their products and the fist truck being
shipped to Sri Lanka.

In the year 1966, the company set up the Engineering Research Centre at Pune to provide
impetus to automobile Research and Development. In the year 1977, they manufactured first
commercial vehicle in Pune. In the year 1983, they commenced manufacturing of Heavy
Commercial Vehicle. In the year 1985, the company produced first hydraulic excavator in
collaboration with Hitachi. In the year 1986, they produced the indigenously designed light
commercial vehicle Tata 407 followed by 608. In the year 1989, they introduced third LCV
model, Tata mobile 206.
In the year 1991, the company launched first indigenous passenger car, Tata Sierra and in the
next year, they launched Tata Estate. In the year 1993, the company signed a joint venture
agreement with Cummins Engine Co. Inc. for the manufacture of high horsepower and emission
friendly diesel engines. In the year 1994, the company launched Tata Sumo and LPT 709. During
the year, the company signed a joint venture agreement with Daimler - Benz / Mercedes - Benz
for manufacture of Mercedes Benz passenger cars in India. Also, they signed a joint venture
agreement with Tata Holset Ltd, UK for manufacturing turbochargers to be used on Cummins
engines. In the year 1995, they launched Mercedes Benz car E220 and in the next year, they
launched Tata Sumo deluxe.
In the year 1997, the company launched Tata Sierra Turbo and in the next year, they launched
Tata Safari and Indica in the market. In the year 2000, they launched Indica 2000 and CNG
buses. In the year 2001, they launched Indica V2, CNG Indica and Tata Safari EX. In the year
2002, the company signed a product agreement with MG Rover of the UK. Also, they launched
Petrol version of Indica V2, EX series in Commercial vehicles, Tata Sumo+ Series and Tata
Indigo. In the year 2003, they launched Tata Safari Limited Edition CityRover, 135 PS Tata
Safari EXi Petrol and Tata SFC 407 EX Turbo in the market. In July 29, 2003, the name of the
company was changed from Tata Engineering Co Ltd to Tata Motors Ltd.
In the year 2004, the company acquired Daewoo Commercial Vehicle Company and renamed it
as Tata Daewoo Commercial Vehicle Co. Ltd. This company launched the heavy duty truck
'NOVUS' in Korea. Also, the company launched Tata Indica V2, Tata LPT 909 EX, Sumo Victa
and Indigo Marina during the year. In the year 2005, the company acquired 21% stake in
Hispano Carrocera SA, Spanish bus manufacturing Company. The company launched branded
buses and coaches, namely Starbus and Globus in the market. Also, they launched Tata
Ace, Indigo SX series, Indica V2 Turbo Diesel, Tata TL 4X4 and Tata Novus. During the year,
the company inaugurated a new factory at Jamshedpur for Novus. Also, they unveiled Tata
Xover at the 75th Geneva Motor Show.
In the year 2006, the company made a joint venture with Marcopolo, Brazil for manufacturing
fully built buses & coaches for India & markets abroad. They launched Indica V2 Xeta and new
Indigo range. Also, they unveiled new long wheel base premium Indigo & X-over concept at
Auto Expo 2006. In the year 2007, the company and Thonburi Automotive Assembly Plant Co.
(Thonburi) formed a joint venture company in Thailand to manufacture, assemble and market
pickup trucks. They inaugurated Tata-Fiat plant at Ranjangaon. They launched long wheel base
Indigo XL, Tata Spacio, Magic, Winger, Sumo Victa Turbo DI, Indica V2 Turbo with dual
airbags & ABS and Safari DICOR 2.2 VTT range.
During the year 2007-08, the company unveiled the TATA Nano, the world's least expensive
car at the Auto Expo 2008 in New Delhi. Subsequently, the car was also unveiled at the Geneva
Motor Show and received international acclaim. They commenced production of TATA Ace
from their manufacturing facility at Uttarakhand during the year.
During the year, the company developed new products for the M&HCV passenger carrier subsegment and displayed in the Auto Expo 2008, a 28 seater bus and an air conditioned low floor
bus developed through their joint venture - Tata Marcopolo Motors Ltd. In the LCV segment, the
company introduced two new products - Magic and Winger, which hold a strong potential to
shape the future of commercial passenger transportation in India.
Further, the company unveiled the 1 Ton and CNG variant of Ace, Cargo Panel van, Xenon XT a lifestyle pickup truck and Winger Executive office concept vehicle in the Auto Expo 2008.
They showcased their new range of tactical and armoured vehicles for military and para-military
forces in the Defence Expo 2008. These include Tata Light Specialist Vehicle, Light Armoured
Troop Carrier, Tata 8x8 HMV and the armoured Tata Safari.
During the year 2007-08, the company signed an agreement with Flat Group automobiles SpA
Italy and Flat India Automobiles Pvt Ltd (FIAPL) for establishment of joint venture to
manufacture passenger cars engines and transmissions at Ranjangaon in India. They sold 15%
stake each, in their subsidiary companies, HV Axles Ltd (HVAL) and HV Transmissions Ltd
(HVTL). In March 2008, the Company introduced Tata Xenon- 1 Ton pickup truck in Thailand
through its subsidiary Tata Motors (Thailand) Ltd.
In June 2, 2008, the company acquired the businesses of Jaguar and Land Rover (a part of
Premier Automotive Group of Ford Motor Co.) for USD 2.3 billion. Jaguar and Land Rover are
in the business of development, manufacture and sale of high end luxury cars and SUVs
respectively. The acquisition includes the ownership of three major manufacturing plants, two
advanced design centres in UK a worldwide sales network, Intellectual Property Rights
(including perpetual royalty free licenses) and Brands and Trademarks.
During the year 2008-09, the company partially divested their stake in Tata AutoComp Systems
Ltd an associate company, from 50% to 26%. Also, they sold their investment in Tata Tele
Services Ltd. During the year, the company launched 28 new commercial vehicles. Among the
new products launched during the year were LPT 3118 - a truck with lift axle, CNG variants of
the Ace, Magic and Xenon, new range of LCV buses manufactured by Tata Marcopolo Motors
and the ICV 909 bus.
The company also completed the execution of their first order of 650 low floor buses to Delhi
Transport Corporation (DTC). They have also bagged a second order of 1625 similar buses from
DTC to be executed in financial year 2009-10, the total order value of which is over Rs 2200
crore. In May 2009, they also unveiled the World Truck range of their next generation heavy
trucks.
During the year 2009-10, the company acquired 79% shares in Hispano Carrocera, S A by way
of exercise of the existing call option, through mutual agreement with the other share-holder,
Investalia S. A., Spain, for a consideration of Euro 2 million (Rs 1371 lakh). Consequently,
Hispano Carrocera, S A has become a 100% subsidiary of the company. Also, the company sold
20% stake in Telco Construction Equipment Company Ltd (Telcon) to Hitachi Construction
Machinery Co Ltd. The company now holds 39.75% stake in Telcon.
In June 2010, the company inaugurated the factory for the Nano mini car at Sanand, in the
western state of Gujarat. The factory is having an initial capacity of producing 250,000 cars per
year.
1.2 Mahindra and Mahindra Ltd
Mahindra & Mahindra Limited (M&M) (BSE: 500520) is an Indian multinational automaker
company and a subsidiary of Mahindra Group conglomerate. Its based in Mumbai, India. The
company was set up in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra
and J.C. Mahindra and Malik Ghulam Mohammed.[3] After India gained independence and
Pakistan was formed, Mohammed emigrated to Pakistan where he became the nation's first
finance minister. The company changed its name to Mahindra & Mahindra in 1948 It is ranked
#21 in the list of top companies of India in Fortune India 500 in 2011
Founded in 1945 as a steel trading company, we entered automotive manufacturing in 1947 to
bring the iconic Willys Jeep onto Indian roads. Over the years, weve diversified into many new
businesses in order to better meet the needs of our customers. We follow a unique business
model of creating empowered companies that enjoy the best of entrepreneurial independence and
Group-wide synergies. This principle has led our growth into a US $14.4 billion multinational
group with more than 144,000 employees in over 100 countries across the globe.
Today, our operations span 18 key industries that form the foundation of every modern
economy: aerospace, aftermarket, agribusiness, automotive, components, construction
equipment, consulting services, defense, energy, farm equipment, finance and insurance,
industrial equipment, information technology, leisure and hospitality, logistics, real estate, retail,
and two wheelers.
Our federated structure enables each business to chart its own future and simultaneously leverage
synergies across the entire Groups competencies. In this way, the diversity of our expertise
allows us to bring our customers the best in many fields.
1.3 Maruti Suzuki India Ltd

Industry : Automobiles - passenger cars
Maruti Suzuki India Ltd (formerly Maruti Udyog Ltd) is India's largest passenger car company,
accounting for over 50 per cent of the domestic car market. The company offers full range of
cars from entry level Maruti 800 & Alto to stylish hatchback Ritz, A-star, Swift, Wagon R,
Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. The company is a
subsidiary of Suzuki Motor Corporation of Japan.
The company is engaged in the business of manufacturing, purchase and sale of motor vehicles
and spare parts (automobiles). The other activities of the company include facilitation of preowned car sales, fleet management and car financing. They have four plants, three located at
Palam Gurgaon Road, Gurgaon, Haryana and one located at Manesar Industrial Town, Gurgaon,
Haryana.
The company has seven subsidiary companies, namely Maruti Insurance Business Agency Ltd,
Maruti Insurance Distribution Services Ltd, Maruti Insurance Agency Solutions Ltd, Maruti
Insurance Agency Network Ltd, Maruti Insurance Agency Services Ltd Maruti Insurance
Agency Logistics Ltd and True Value Solutions Ltd. The first six subsidiaries are engaged in the
business of selling motor insurance policies to owners of Maruti Suzuki vehicles and seventh
subsidiary, True Value Solutions Ltd is engaged in the business of sale of certified pre-owned
cars under the brand 'Maruti True Value'.
Maruti Suzuki India Ltd was incorporated on February 24, 1981 with the name Maruti Udyog
Ltd. The company was formed as a government company, with Suzuki as a minor partner, to
make a people's car for middle class India. Over the years, the company's product range has
widened, ownership has changed hands and the customer has evolved.
In October 2, 1982, the company signed the license and joint venture agreement with Suzuki
Motor Corporation, Japan. In the year 1983, the company started their productions and launched
Maruti 800. In the year 1984, they introduced Maruti Omni and during the next year, they
launched Maruti Gypsy in the market. In the year 1987, the company forayed into the foreign
market by exporting first lot of 500 cars to Hungary.
In the year 1990, the company launched India's first three-box car, Sedan. In the year 1992,
Suzuki Motor Corporation, Japan increased their stake in the company to 50%. In the year 1993,
they introduced the Maruti Zen and in the next year they launched Maruti Esteem in the market.
In the year 1995, the company commenced their second plant. In the year 1997, they started
Maruti Service Master as model workshop in India to look after sales services. In the year 1999,
the third plant with new press, paint and assembly shops became operational. In the year 2000,
the company launched Maruti Alto in the market.
In the year 2002, Suzuki Motor Corporation increased their stake in the company to 54.2%. In
January 2002, the company introduced 10 finance companies (8 + 2JVs) in Mumbai. Also, they
found one new business segment, Maruti True Value for sales, purchase and trade of pre-owned
cars in India. In the year 2005, the company launched the first world strategic model from Suzuki
Motor Corporation 'the SWIFT' in India. In the year 2006, they launched WaganR Duo with LPG
and also the New Zen Estillo.
During the year 2006-07, the company commenced operations in the new car plant and the
diesel engine facility at Manesar, Haryana. In November 2006, they inaugurated a new institute
of Driving Training and Research (IDTR), which was set up as a collaborative project with Delhi
Government at Sarai Kale Khan in South Delhi.
During the year 2007-08, the company signed an agreement with the Adani group for exporting
200,000 units annually through the Mundra port in Gujarat. They launched Swift Diesel and
SX4- Luxury Sedan with Tag line 'MEN ARE BACK' during the year. In July 2007, the
company launched the new Grand Vitara, a stylish, muscular and 5-seater in the MUV segment.
The company changed their name from Maruti Udyog Ltd to Maruti Suzuki India Ltd with effect
from September 17, 2007.
During the year, the company entered into a joint venture agreement with Magneti Marelli
Powertrain SpA and formed Magneti Marelli Powertrain India Pvt Ltd for manufacturing
Electric Control Units. Also they entered into another joint venture agreement with Futaba
Industrial Co Ltd and formed FMI Automotive Components Ltd for manufacturing Exhaust
Systems Components. During the year, the company made pact with Shriram City Union
Finance Ltd, a part of Shriram Group, Chennai, to offer easy, transparent and hassle-free car
finance to their customers, particularly in semi urban and rural markets. The agreement is a joint
initiative of the two companies for providing competitive car finance to people in Tier-II and
Tier-III cities across the country.
During the year 2008-09, the company launched a new A2 segment car, branded the A-star in
India and in Europe as the new Alto. They raised their production capacity to a landmark 1
million cars. In June 2008, the company launched Maruti 800 Duo, which is a dual fuel (LPGcum- petrol) model car.
In March 2009, the company launched A-star or Suzuki Alto at Geneva Motor Show sales
begin at EU. In April 2009, the company revealed new Ritz K12M engine at Gurgaon plant. The
company plans to modernize some part of their Gurgaon plant, expand their K-series capacity,
invest further in new model development and take the projects of test track and crash course
facility and Brand Centres further.
2. Analysis of Financial statements

Financial statement analysis (or financial analysis) the process of understanding the risk and
profitability of a firm (business, sub-business or project) through analysis of reported financial
information, particularly annual and quarterly reports
Financial analysis is the selection, evaluation, and interpretation of financial data, along with
other pertinent information, to assist in investment and financial decision-making. Financial
analysis may be used internally to evaluate issues such as employee performance, the efficiency
of operations, and credit policies, and externally to evaluate potential investments and the creditworthiness of borrowers, among other things. The analyst draws the financial data needed in
financial analysis from many sources. The primary source is the data provided by the company
itself in its annual report and required disclosures. The annual report comprises the income
statement, the balance sheet, and the statement of cash flows, as well as footnotes to these
statements. Certain businesses are required by securities laws to disclose additional information.
Besides information that companies are required to disclose through financial statements, other
information is readily available for financial analysis.
Tata motors
Balance Sheet of Tata Motors
------------------- in Rs. Cr. -------------------
Mar '11
12 mths
Sources Of Funds
Total Share Capital
Equity Share
Capital
Share
Application
Money
Preference
Share Capital
Reserves
Revaluation
Reserves
Networth
Secured
Loans
Unsecured
Loans
Mar '10
12
mth
s
634.65
634.65
570.60
570.60
3.06
0.00
0.00
0.00
19,351.40
24.19
14,208.55
24.63
20,013.30
14,803.78
7,766.05
8,132.70
Mar
'09
Mar '08
Mar
'07
12
mths
12 mths
12
mths
514.05
514.05
385.54
385.54
385.41
385.41
0.00
0.00
0.00
0.00
0.00
0.00
11,855.15
25.07
7,428.45
25.51
6,458.39
25.95
7,839.50
6,869.75
7,742.60
12,394.2
7
5,251.65
2,461.99
2,022.04
8,883.31
7,913.91
3,818.53
1,987.10
Total Debt
Total
Liabilities
15,898.75
35,912.05
16,625.91
31,429.69
13,165.56
25,559.83
6,280.52
14,120.02
4,009.14
10,878.89
Mar '11
Mar '10
Mar
'09
Mar '08
Mar
'07
12 mths
12
mths
12 mths
Application Of Funds
Gross Block
Less: Accum.
Depreciation
Net Block
Capital Work
in Progress
Investments
Inventories
Sundry
Debtors
Cash and
Bank Balance
Total Current
Assets
Loans and
Advances
Fixed Deposits
Total CA,
Loans &
Advances
Deffered
Credit
Current
Liabilities
Provisions
Total CL &
Provisions
Net Current
Assets
Miscellaneous
Expenses
Total Assets
Contingent
Liabilities
Book Value
12 mths
12 mths
21,883.32
8,466.25
18,416.81
7,212.92
13,905.17
6,259.90
10,830.83
5,443.52
8,775.80
4,894.54
13,417.07
4,058.56
11,203.89
5,232.15
7,645.27
6,954.04
5,387.31
5,064.96
3,881.26
2,513.32
22,624.21
3,891.39
2,602.88
22,336.90
2,935.59
2,391.92
12,968.13
2,229.81
1,555.20
4,910.27
2,421.83
1,130.73
2,477.00
2,500.95
782.18
612.16
638.17
7,133.06
5,939.67
4,423.18
4,302.70
3,818.91
5,852.42
5,248.71
5,909.75
4,831.36
6,208.53
1,790.13
14,775.61
1,141.10
12,329.48
503.65
10,836.58
1,647.17
10,781.23
290.98
10,318.42
0.00
0.00
15,740.69
16,909.30
10,968.95
10,040.37
6,956.88
3,222.71
18,963.40
2,763.43
19,672.73
1,877.26
12,846.21
1,989.43
12,029.80
1,364.32
8,321.20
-4,187.79
-7,343.25
-2,009.63
-1,248.57
1,997.22
0.00
2.02
35,912.05
31,429.69
25,559.83
14,120.02
10,878.89
4,798.83
3,708.33
5,433.07
5,590.83
5,196.07
259.03
240.64
638.79
0.00
0.00
314.93
750.14
535.78
0.00
0.00
6.05
202.70
10.09
177.59
Tata Motors has been the best motor in India for a long time now. The company has three
sources of funds.
a) Reserves The Companys most important and the biggest sources of funds are its
reserves. The company as seen above has huge reserves; it had reserves worth Rs.6869.75
crores in 2007 which increased to Rs. 19351.4 crores in 2011.
b) Equity shares- The Company has issued shares to the public in order to raise cash. Tata
motors had equity share capital worth Rs. 385.41 crores and reserves worth Rs. 7721
crores. The firm has issued shares to the public worth Rs. 128.59 in the 2009, 2010 and
2011. The company has not preferred equity as we can see that the amount from Equity
shares has been less than 1% of the total capital raised.
c) Debt - The raised debt in form of Secured and unsecured loans. Debt has been the second
preferred source of fund. The company has increased its debt simultaneously from Rs.
4009.14 crores in 2007 to Rs. 15898.75 crores in 2011, which shows that the % of debt
raised from the public has been increasing exponentially as the company feels that debt is
the cheaper source of raising funds.
The company deals with the manufacturing of motors. As a result huge amount of investment
is required 6 for procuring fixed assets and large amount of depreciation charged for theses
every year. The investments in fixed assets have increased from 8775.80 crores to 21883.32
crores and respective depreciation from Rs. 54 crores to Rs. 8 466.25 crores.
The company has chosen the option of investing in various securities for high returns. The
companys investments were Rs 2,477 crores in 2007 which has increased tenfold to Rs.
22624.21 crores.
The company liquidity position has been deteriorating since the year 1008. The company net
working capital of Rs. 1997.22 crores in 2007. But since the year 2008 the amount of current
liabilities are more than the current assets.
Profit & Loss account of Tata Motors
Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
Selling and Admin
Expenses
Miscellaneous Expenses
Preoperative Exp
Capitalised
------------------- in Rs. Cr. -------------------
Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
12 mths
12 mths
12 mths
12 mths
12 mths
52,067.87
4,110.63
47,957.24
341.53
354.22
48,652.99
38,173.39
2,800.10
35,373.29
1,220.86
606.63
37,200.78
28,538.20
2,877.53
25,660.67
921.29
-238.04
26,343.92
33,123.54
4,355.63
28,767.91
734.17
-40.48
29,461.60
31,089.69
4,425.44
26,664.25
1,114.38
349.68
28,128.31
35,047.05
471.28
2,294.02
1,753.46
25,366.12
362.62
1,836.13
1,289.60
18,801.37
304.94
1,551.39
866.65
20,891.33
325.19
1,544.57
904.95
19,879.56
327.41
1,367.83
872.95
2,790.19
2,126.10
1,652.31
2,197.49
1,505.23
2,067.42
-817.68
1,707.06
-740.54
1,438.89
-916.02
964.78
-1,131.40
1,051.49
-577.05
Total Expenses
Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord
Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
43,605.74
31,947.09
23,699.53
25,696.91
24,427.42
Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
12 mths
12 mths
12 mths
12 mths
12 mths
4,705.72
5,047.25
1,383.79
3,663.46
1,360.77
106.17
2,196.52
0.00
2,196.52
4,032.83
5,253.69
1,246.25
4,007.44
1,033.87
144.03
2,829.54
0.00
2,829.54
1,723.10
2,644.39
704.92
1,939.47
874.54
51.17
1,013.76
15.29
1,029.05
3,030.52
3,764.69
471.56
3,293.13
652.31
64.35
2,576.47
0.00
2,576.47
2,586.51
3,700.89
455.75
3,245.14
586.29
85.02
2,573.83
-0.07
2,573.76
384.70
1,811.82
8,558.69
0.00
1,274.23
192.80
589.46
2,240.08
6,580.97
0.00
859.05
132.89
12.50
1,001.26
4,898.16
0.00
311.61
34.09
547.55
2,028.92
4,805.58
0.00
578.43
81.25
660.37
1,913.46
4,547.86
0.00
578.07
98.25
6,346.14
28.55
200.00
314.93
5,705.58
39.26
150.00
259.03
5,140.08
19.48
60.00
240.64
3,855.04
52.63
150.00
202.70
3,853.74
49.65
150.00
177.59
The companys sales have been showing a positive trend for the past five years. The
proportionate expenditure pertaining to the sales have also been increasing year by year. This
shows the growth in the company.
The operating project has been increased from Rs. 2586 crores in 2007 to Rs. 4705.75 crores in
2011. But the Net profit has come down in spite of the growth in the company due to the
increasing depreciation and interest amount.
This is also projected by the decrease EPS which had reduced from Rs. 49.65 crores in 2007 to
28.55 crores in the year 2011.
Maruti Suzuki
Balance Sheet of Maruti Suzuki India
------------------- in Rs. Cr. ------------------Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
12 mths
12 mths
12 mths
12 mths
12 mths
Total Share Capital
144.50
144.50
144.50
144.50
144.50
Equity Share Capital
144.50
144.50
144.50
144.50
144.50
Share Application Money
0.00
0.00
0.00
0.00
0.00
Preference Share Capital
0.00
0.00
0.00
0.00
0.00
13,723.00
11,690.60
8,270.90
6,709.40
0.00
0.00
0.00
0.00
13,867.50
11,835.10
8,415.40
6,853.90
31.20
26.50
0.10
63.50
278.10
309.30
14,176.80
794.90
821.40
12,656.50
698.80
698.90
10,043.80
900.10
900.20
9,315.60
567.30
630.80
7,484.70
11,737.70
6,208.30
5,529.40
1,428.60
5,106.70
1,415.00
893.30
95.50
2,403.80
1,626.30
2,413.00
6,443.10
0.00
3,805.20
525.80
4,331.00
2,112.10
0.00
14,176.80
10,406.70
5,382.00
5,024.70
387.60
7,176.60
1,208.80
809.90
98.20
2,116.90
1,739.10
0.00
3,856.00
0.00
3,160.00
628.40
3,788.40
67.60
0.00
12,656.50
8,720.60
4,649.80
4,070.80
861.30
3,173.30
902.30
918.90
239.00
2,060.20
1,809.80
1,700.00
5,570.00
0.00
3,250.90
380.70
3,631.60
1,938.40
0.00
10,043.80
7,285.30
3,988.80
3,296.50
736.30
5,180.70
1,038.00
655.50
324.00
2,017.50
1,173.00
0.00
3,190.50
0.00
2,718.90
369.50
3,088.40
102.10
0.00
9,315.60
6,146.80
3,487.10
2,659.70
238.90
3,409.20
713.20
747.40
114.80
1,575.40
1,072.60
1,308.00
3,956.00
0.00
2,288.60
490.50
2,779.10
1,176.90
0.00
7,484.70
Sources Of Funds
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Total Assets
9,200.40
0.00
9,344.90
0.10
Contingent Liabilities
Book Value (Rs)
5,450.60
479.99
3,657.20
409.65
1,901.70
323.45
2,734.20
291.28
2,094.60
237.23
Maruti Suzuki has been the best motor in India for a long time now. The company has three
sources of funds.
a) Reserves The Companys most important and the biggest source of funds are its
reserves. The company as seen above has huge reserves; it had reserves worth Rs.6869.75
crores in 2007 which increased to 19351.4 in 2011.
b) Equity shares- The Company has issued shares to the public in order to raise cash. Tata
motors had equity share capital worth Rs. 144.5 crores and reserves worth Rs. 7721
crores. The firm has issued shares to the public worth Rs. 128.59 crores in the 2009, 2010
and 2011. The company has not preferred equity as we can see that the amount from
Equity shares has been less than 1% of the total capital raised.
preferred source of fund. The company has increased its debt simultaneously from Rs.
4009.14 crores in 2007 to Rs. 15898.75 crores in 2011, which shows that the % of debt
raised from the public has been increasing exponentially as the company feels that debt is
the cheaper source of raising funds.
is required 6 for procuring fixed assets and large amount of depreciation charged for theses
every year. The investments in fixed assets have increased from Rs. 8775.80 crores to Rs.
21883.32 crores and respective depreciation from Rs. 4894.54 crores to 8466.25 crores.
companys investments were Rs. 2,477 crores in 2007 which has increased tenfold to Rs.
22624.21 crores
The company liquidity position has been deteriorating since the year 2008. The company net
working capital of Rs. 2122.22 crores in 2007. But since the year 2008 the amount of current
liabilities are more than the current assets.
Profit and Loss Account

Maruti Suzuki
Mar '10
Mar '09
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Mar '11
40,865.50
4,304.00
36,561.50
784.6
73.2
32,174.10
2,856.40
29,317.70
662
200.9
23,381.50
2,652.10
20,729.40
491.7
-356.6
Mar '08
Mar '07
21,200.40
3,133.60
18,066.80
494
336.3
17,358.40
2,552.00
14,806.40
338.1
-200.7
Total Income
37,419.30
30,180.60
20,864.50
18,897.10
14,943.80
28,880.00
210.2
703.6
1,949.40
22,636.30
216.6
545.6
1,061.60
15,983.20
193.6
471.1
716.1
13,958.30
147.3
356.2
523.3
10,863.00
97.4
288.4
392.4
1,153.87
1,032.17
817.66
521.48
483.26
289.73
-25.7
201.73
0
236.84
-22.3
287.62
-19.8
239.44
-14.3
33,161.10
3,473.60
25,694.00
3,824.60
18,396.20
1,976.60
15,774.40
2,628.70
12,349.60
2,256.10
4,258.20
24.4
4,233.80
1,013.50
0
3,220.30
18.9
3,239.20
4,486.60
33.5
4,453.10
825
0
3,628.10
51.1
3,679.20
2,468.30
51
2,417.30
706.5
0
1,710.80
37.9
1,748.70
3,122.70
59.6
3,063.10
568.2
0
2,494.90
76.6
2,571.50
2,594.20
37.6
2,556.60
271.4
0
2,285.20
33.4
2,318.60
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
Selling and Admin
Expenses
Preoperative Exp
Capitalised
Total Expenses
Operating profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
PBT (Post Extra-ord
Items)
Tax
Reported Net Profit
Preference Dividend
Equity Dividend
Equity Dividend (%)
Book Value (Rs)
% change in sales
Avg
820.2
2,288.60
4,281.10
0
216.7
35.1
2,889.10
79.21
150
479.99
24.70794094
24.85620704
1,094.90
457.1
763.3
705.3
2,497.60
1,218.70
1,730.80
1,562.00
3,057.70
2,413.00
1,816.10
1,486.60
0
0
0
0
173.3
101.1
144.5
130
28.8
17.2
24.8
21.9
2,889.10
2,889.10
2,889.10
2,889.10
86.45
42.18
59.91
54.07
120
70
100
90
409.65
323.45
291.28
237.23
41.4305286 14.73752961 22.0202075 21.3848285
The operating profit has been increased from 2256.10 crores in 2007 to 3473.60 crores in 2011.
But the Net profit has grown with of the growth in the company due to the increasing
depreciation and interest amount.
This is also projected by the increase EPS which had reduced from Rs. 54.07 in 2007 to 79.21 in
the year 2011.

Balance Sheet
Sources Of Funds
Mar '12
Mar '11
Total Share Capital
355.2802
293.62
355.2802
293.62
41.1037
33.97
12069.2902
9,974.62
Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
13.5278
11.18
12479.2019
10,313.39
492.7483
407.23
2417.6526
1,998.06
2910.4009
2,405.29
15389.6028
12,718.68
Gross Block
7077.6167
5,849.27
3438.4933
2,841.73
Net Block
3639.1234
3,007.54
Total Liabilities

Mar '10
Mar '09
Mar '08
282.95
272.62
239.07
282.95
272.62
239.07
8.01
0
0
0
0
0
7,527.60 4,959.26 4,098.53
11.67
12.09
12.47
7,830.23 5,243.97 4,350.07
602.45
981
617.26
2,277.70 3,071.76 1,969.80
2,880.15 4,052.76 2,587.06
10,710.38 9,296.73 6,937.13
Mar '07
238.03
238.03
0
0
3,302.01
12.86
3,552.90
106.65
1,529.35
1,636.00
5,188.90
Mar '06
233.4
233.4
0
0
2,662.14
13.33
2,908.87
216.68
666.71
883.39
3,792.26
1650.8151
1,364.31
Investments
11283.6009
9,325.29
Inventories
2049.9941
1,694.21
Sundry Debtors
1639.2112
1,354.72
541.6202
447.62
4230.8255
3,496.55
Loans and Advances
3210.7592
2,653.52
202.0942
167.02
7643.6789
6,317.09
Fixed Deposits
Total CA, Loans &
Advances
Current Liabilities
6400.5007
5,289.67
Provisions
2427.1148
2,005.88
8827.6155
7,295.55
-1183.9366
-978.46
15389.6028
12,718.68
Deffered Credit
Net Current Assets

Total Assets
4,866.18
4,653.66
3,552.64
3,180.57
2,859.25
1,510.27
1,348.98
205.46
1,669.09
878.74
637.97
258.39
1,775.10
558.02
471.92
2,805.04
2,537.77
2,328.41
1,374.31
6,398.02
1,188.78
1,258.08
475.17
2,922.03
2,034.47
1,268.06
6,224.56
2,326.29
2,327.37
886.96
5,786.41
1,060.67
1,043.65
635.61
2,739.93
1,402.45
938.82
5,081.20
1,841.68
1,710.96
649.94
4,215.06
1,084.11
1,004.88
310.58
2,399.57
866.19
550.65
3,816.41
1,639.12
1,541.45
329.72
2,237.46
878.48
700.89
415.89
1,995.26
1,011.50
910.18
3,916.94
0
3,822.50
1,796.54
5,619.04
605.52
4.12
10,710.38
0
3,520.20
1,277.56
4,797.76
283.44
12.55
9,296.73
0
2,525.31
943.46
3,468.77
347.64
13.53
6,937.13
0
0
2,138.77 1,711.23
715.43
543.14
2,854.20 2,254.37
1,062.74
550.67
17.55
18.05
5,188.92 3,792.25
3184.841
2,632.10
Book Value (Rs)
211.5685
174.85
2,307.70
138.02
1,220.39
191.91
985.35
181.43
1,008.27
148.72
946.36
124.06
Mahindra and Mahindra has been the best motor in India for a long time now. The company has
three sources of funds.
a) Reserves The companys most important and the biggest source of funds are its
reserves. The company as seen above has huge reserves, it had reserves worth Rs.3302.01
crores in 2007 which increased to 9974.62 in 2011.
b) Equity shares- The company has issued shares to the public in order to raise cash. Maruti
Suzuki motors had equity share capital worth 293.62 crores and reserves worth 9974.62
crores. The firm has issued shares to the public worth 272.62 in the 2009, 282.95 in 2010,
and 293.62 in 2011. The company has not preferred equity as we can see that the amount
from Equity shares has been less than 1% of the total capital raised.
preferred source of fund. The company has increased its debt simultaneously from
1636.00 crores in 2007 to 2405.29 crores in 2011, which shows that the % of debt raised
from the public has been increasing exponentially as the company feels that debt is the
cheaper source of raising funds.
is required Rs 6146 crores for procuring fixed assets and large amount of depreciation
charged for theses every year. The investments in fixed assets have increased from
Rs1541.45 crores to Rs 3007.54 crores and respective depreciation from Rs 1639.12 crores to
Rs 2841.73 crores.
companys investments were Rs 2237.46 crores in 2007 which has increased tenfold to
9325.29.
The company liquidity position has been decreasing since the year 2008. The company net
working capital of 1062.74 crores in 2007. It went down to -978.46 in 2011.
Mahindra and Mahindra ltd.
Profit & Loss account

Mar '11
Mar '09
Mar '08
Mar '07
14,668.13
1,587.05
13,081.08
132.65
-156.29
13,057.44
12,894.94
1,584.57
11,310.37
575.96
149.11
12,035.44
11,231.99
1,310.65
9,921.34
531.17
6.41
10,458.92
Mar 10
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
25,569.55
2,092.02
23,477.53
563.13
202.23
24,242.89
20,323.63
1,807.30
18,516.33
285.09
23.69
18,825.11
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
16,604.88
143.93
1,445.56
98.33
12,461.56
120.97
1,199.85
96.92
9,208.71
98.69
1,024.52
75.36
7,963.82
91.33
853.65
73.35
6,937.16
65.19
666.15
68.8
1,735.63
1,439.26
1,109.96
1,108.33
891.29
261.1
-50.87
264.21
-59.55
165.83
-42.83
257.84
-46.49
210.03
-47.1
20,238.56
3,441.20
15,523.22
3,016.80
11,640.24
1,284.55
10,301.83
1,157.65
8,791.52
1,136.23
Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
PBT (Post Extra-ord Items)
4,004.33
70.86
3,933.47
413.86
0
3,519.61
0
3,519.61
3,301.89
156.85
3,145.04
370.78
0
2,774.26
72.49
2,846.75
1,417.20
134.12
1,283.08
291.51
0
991.57
48.97
1,040.54
1,733.61
87.59
1,646.02
238.66
0.59
1,406.77
0
1,406.77
1,667.40
19.8
1,647.60
209.59
0.33
1,437.68
-19.19
1,418.49
Tax
Reported Net Profit
Preference Dividend
Equity Dividend
Equity Dividend (%)
Book Value (Rs)
857.51
2,662.10
3,633.68
0
706.08
96.56
5,872.47
45.33
230
174.85
759
2,087.75
3,061.66
0
549.52
74.23
5,659.08
36.89
190
138.02
199.69
836.78
2,431.53
0
278.83
33.23
2,726.16
30.69
100
191.91
303.4
1,103.37
2,338.01
0
282.61
38.48
2,390.73
46.15
115
181.43
350.1
1,068.39
1,854.37
0
282.23
42.5
2,380.33
44.88
115
148.72
Selling and Admin Expenses

Preoperative Exp Capitalised
Total Expenses
The operating profit has been increased from 1136.23 crores in 2007 to 3441.20 crores in 2011.
The Net profit has too has increased due to the growth in the company .This is also projected by
the increase EPS which had increased from Rs. 44.88 in 2007 to 45.33 in the year 2011.
3. Leverage
A. Leverages
Operating Leverage
%Change in EBIT
Contribution
--------------------------- or --------------------% Change in Sales
EBIT
DOL =
Financial Leverage
DFL =
% Change in EPS
-----------------------------% Change in sales
Total leverage =
DOL * DFL
Maruti
Suzuki
Mah
&
Mah
Tata
Mot.
Maruti
Suzuki
Mah
&
Mah
Tata
Mot.
Maruti
Suzuki
Mah
&
Mah
Tata
Mot.
Maruti
Suzuki
Mah
&
Mah
Tata
Mot.
Maruti
Suzuki
Mah
&
Mah
Tata
Mot.
Mar
'11
Mar
'11
Mar
'11
Mar
'10
Mar
'10
Mar
'10
Mar
'09
Mar
'09
Mar
'09
Mar
'08
Mar
'08
Mar
'08
Mar
'07
Mar
'07
Mar
'07
DOL
-0.42
0.87
0.35
2.87
4.16
4.10
-3.02
1.80
3.12
0.45
0.17
-0.01
1.77
1.39
0.79
DFL
0.74
1.02
2.16
0.97
0.13
0.73
0.95
1.36
1.46
1.08
1.11
84.21
1.07
0.76
0.95
DTL
-0.31
0.89
0.75
2.79
0.52
3.01
-2.88
2.44
4.55
0.49
0.19
0.92
1.90
1.05
0.75
4. Financial statements Analysis

4.1
Ratios
To assess whether the financial ratios are within limits, they can be compared with the industry
averages or with a good player in normal business conditions if an organized industry is absent.
This is called cross sectional analysis in which the industry averages or standard players averages
are used as benchmarks.
LEVERAGE RATIOS
The leverage ratios can be used to extend the analysis of the long term solvency of a firm. The
structural ratios are based on the proportions of debt and equity in the capital structure of the
firm and the coverage ratios are derived form the relationships between the debt servicing
commitments and sources of funds for meeting these obligations. The two basic components of
debt to equity ratio are outsiders funds i.e. external equities and shareholders funds, i.e.,
internal equities. The outsiders funds include all debts / liabilities to outsiders, whether long
term or short term or whether in the form of debentures, bonds, mortgages or bills. The
shareholders funds consist of equity share capital, preference share capital, capital reserves,
revenue reserves, and reserves representing accumulated profits and surpluses like reserves for
contingencies, sinking funds, etc. The accumulated losses and deferred expenses, if any, should
be deducted from the total to find out shareholder's funds.
Some writers are of the view that current liabilities do not reflect long term commitments and
they should be excluded from outsider's funds. There are some other writers who suggest that
current liabilities should also be included in the outsider's funds to calculate debt equity ratio for
the reason that like long term borrowings, current liabilities also represents firm's obligations to
outsiders and they are an important determinant of risk. However, we advise that to calculate
debt equity ratio current liabilities should be included in outsider's funds. The ratio calculated on
the basis outsider's funds excluding liabilities may be termed as ratio of long-term debt to
shareholders funds.
PROFITABILITY RATIOS
The prime objective of making investments in any business is to obtain satisfactory return on
capital invested. Hence, the return on capital employed is used as a measure of success of a
business in realizing this objective. Return on capital employed establishes the relationship
between the profit and the capital employed. It indicates the percentage of return on capital
employed in the business and it can be used to show the overall profitability and efficiency of the
business.
Return on capital employed ratio is considered to be the best measure of profitability in order to
assess the overall performance of the business. It indicates how well the management has used
the investment made by owners and creditors into the business. It is commonly used as a basis
for various managerial decisions. As the primary objective of business is to earn profit, higher
the return on capital employed, the more efficient the firm is in using its funds.
Solvency ratios
Solvency ratios measure the financial soundness of a business and how well the company can satisfy its short- and
long-term obligations. D&B uses six key financial business ratios to measure a companys solvency:
Quick Ratio This ratio, also called "acid test" or "liquid" ratio, considers only cash, marketable securities
(cash equivalents) and accounts receivable because they are considered to be the most liquid forms of
current assets. A Quick Ratio less than 1.0 implies dependency on inventory and other current assets to
liquidate short-term debt. This ratio is calculated using the following formula:
Cash + Accounts Receivable Current Liabilities
Current Ratio This ratio is a comparison of current assets to current liabilities, commonly used as a
measure of short-run solvency, i.e., the immediate ability of a business to pay its current debts as they come
due. Potential creditors use this ratio to measure a company's liquidity or ability to pay off short-term debts.
Thist ratio is calculated using the following formula:
Current Assets Current Liabilities
Current Liabilities to Net Worth Ratio This ratio indicates the amount due creditors within a year as a
percentage of the owners or stockholders investment. The smaller the net worth and the larger the
liabilities, the less security for creditors. Normally a business starts to have trouble when this relationship
exceeds 80%. This ratio is calculated using the following formula:
Current Liabilities Net Worth
Current Liabilities to Inventory Ratio This ratio shows, as a percentage, the reliance on available
inventory for payment of debt (how much a company relies on funds from disposal of unsold inventories to
meet its current debt). This ratio is calculated using the following formula:
Current Liabilities Inventory
Total Liabilities to Net Worth Ratio This ratio shows how all of a company's debt relates to the equity
of the owners or stockholders. The higher this ratio, the less protection there is for the creditors of the
business. This ratio is calculated using the following formula:
Total Liabilities Net Worth
Fixed Assets to Net Worth Ratio This ratio shows the percentage of assets centered in fixed assets
compared to total equity. Generally the higher this percentage is over 75%, the more vulnerable a concern
becomes to unexpected hazards and business climate changes. Capital is frozen in the form of machinery
and the margin for operating funds becomes too narrow for day-to-day operations. This ratio is calculated
using the following formula:
Fixed Assets Net Worth
Activity ratios
Activity Ratios indicate how much a company has invested in a particular type of asset (or group
of assets), relative to the revenue the asset is producing. The most common activity ratios
include; the average collection period and the inventory turnover ratio. Lets look at each
separately; beginning with the average collection period ratio.
Average collection period
The average collection period ratio indicates the average length of time (in days) a business must
wait before it receives payment from customers who buy merchandise on credit. Below shows
how a business would calculate its average collection period ratio.
Inventory turnover ratio:
The second type of activity ratio is known as the Inventory Turnover Ratio. The inventory
turnover ratio provides an indication on whether a company has excessive or inadequate goods
(products) in inventory. The ratio calculates the number of times per year a company uses or
consumes an average stock of goods.
Often businesses have too much inventory on hand in relation to demand. In this instance, a
company may experience cash flow problems since they are required to finance the inventory
until it's sold and cash is received. Other businesses may have insufficient inventory on hand
which may lead to dissatisfied customers and eventual loss of customers due to unfilled orders.
RATIOS
Tata Motors
Investment Valuation Ratios
Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share (Rs)
Mar '11
10
20
74.15
755.69
Mar '10
10
15
70.68
619.98
Mar '09
10
6
33.52
499.23
Mar '08
10
15
78.61
746.24
Mar '07
10
15
67.12
691.91
Free Reserves Per Share (Rs)

Bonus in Equity Capital
Profitability Ratios
Operating Profit Margin(%)
Profit Before Interest And Tax Margin(%)
287.53
17.53
229.67
19.5
217.77
21.64
182.38
28.86
157.16
28.87
9.81
6.91
11.4
8.38
6.71
3.2
10.53
8.16
9.7
7.25
Gross Profit Margin(%)

Cash Profit Margin(%)
Adjusted Cash Margin(%)
Net Profit Margin(%)
Adjusted Net Profit Margin(%)
Return On Capital Employed(%)
Return On Net Worth(%)
Adjusted Return on Net Worth(%)
Return on Assets Excluding
Revaluations
Return on Assets Including Revaluations
6.97
6.94
6.94
3.74
3.74
10.19
9.06
9.46
314.93
8.47
7.26
7.26
6.26
6.26
10.37
15.15
9.61
259.03
3.3
6.97
6.97
3.77
3.77
6.41
8.09
7.45
240.6
8.26
8.13
8.13
6.96
6.96
18.96
25.98
21.18
202.54
7.5
8.55
8.55
6.94
6.94
25.82
28
24.67
177.33
315.31
259.46
241.09
203.2
178
12.01
12.26
8.89
22.85
31.18
Return on Long Term Funds(%)

Liquidity And Solvency Ratios
Current Ratio
Quick Ratio
Debt Equity Ratio
Long Term Debt Equity Ratio
Debt Coverage Ratios
Interest Coverage ratio
Total Debt to Owners Fund
Financial Charges Coverage Ratio
0.53
0.54
0.8
0.52
0.44
0.44
1.12
0.8
0.44
0.58
1.06
0.49
0.64
0.66
0.8
0.5
0.86
0.92
0.59
0.31
2.64
0.8
3.7
2.61
1.12
3.56
2.43
1.06
3.64
6.28
0.8
7.19
7.19
0.59
7.62
Financial Charges Coverage Ratio Post

Tax
Management Efficiency Ratios
3.37
3.74
3.73
6.82
6.67
13.86
19.2
13.86
2.22
1.35
2.22
13.5
17.92
13.5
1.95
1.14
1.95
13.47
19.11
13.47
1.88
1.02
1.88
14.44
30.08
14.44
2.69
2.06
2.69
13.26
35.6
13.26
3.08
2.49
3.08
44.28
29.02
34.52
17.94
32.51
24.02
35.34
26.16
Inventory Turnover Ratio

Debtors Turnover Ratio
Investments Turnover Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
Asset Turnover Ratio
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash Profit
80.96
44.74
Maruti Suzuki
Face Value
Dividend Per Share
Mar '11
Mar '10
Mar '09
Mar '08
5
7.5
Mar '07
3.5
4.5
115.72
129.38
65.89
88.31
76.3
1,265.50
1,014.77
717.5
625.34
512.49
474.32
403.82
318.45
286.28
231.89
9.14
12.74
9.18
14.12
14.88
6.24
9.73
5.62
10.7
12.74
6.37
9.93
5.77
10.97
16.66
8.69
10.78
9.13
11.79
12.08
8.69
10.78
9.13
11.79
12.01
6.13
8.34
5.72
9.34
10.29
6.13
8.34
5.72
9.34
10.22
21.69
27.89
17.37
26.18
30.65
16.5
21.1
13.04
20.56
22.79
16.08
20.29
13.23
19.2
22.63
Return on Assets Excluding Revaluations
479.99
409.65
323.45
291.28
237.23
479.99
409.65
323.45
291.28
237.23
21.74
28.8
17.48
27.35
30.74
Current Ratio
1.47
0.91
1.51
0.91
1.4
Quick Ratio
1.14
0.68
1.26
0.66
1.13
Debt Equity Ratio
0.02
0.07
0.07
0.11
0.09
0.02
0.04
0.07
0.06
0.09
126.04
105.39
34.21
40.93
61.01
0.02
0.07
0.07
0.11
0.09
167.58
136.33
130.02
100.18
48.06
38.75
50.46
39.57
68.23
49.76
33.33
30.47
30.46
22.93
21.27
42.93
33.92
26.33
25.76
21.12
33.33
30.47
30.46
22.93
28.76
3.13
2.82
2.38
2.48
6.32
2.59
2.32
2.06
1.94
1.98
3.13
2.82
2.38
2.48
2.41
11
8.09
9.7
9.78
9.72
7.62
6.08
6.14
7.36
8.28




Interest Cover
Tax

Mahindra and mahindra

Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
10
10
10
Dividend Per Share
11.5
9.5
10
11.5
11.5
58.6
53.31
47.12
48.42
47.73
399.79
327.2
479.84
473.09
416.81
165.14
120.24
170.32
168.36
135.66
58.1
60.29
62.58
71.36
71.67
14.65
16.29
9.81
10.23
11.45
12.67
14.04
7.41
7.87
8.97
12.89
14.29
7.59
8.12
14.73
12.19
12.84
9.38
9.68
12.37
12.19
12.84
9.38
9.68
11.34
11.14
11.08
6.25
9.45
10.34
11.14
11.08
6.25
9.45
9.3
26.96
27.7
13.99
18.52
25.71
25.92
26.74
16.03
25.51
30.18
24.33
26.23
18.49
20.61
27.28
Return on Assets Excluding

Revaluations
174.85
137.95
191.45
180.87
147.98
175.04
138.15
191.9
181.39
148.52
27.05
27.73
14.51
19.64
26.09
Current Ratio
0.86
1.11
0.9
0.86
1.31
Quick Ratio
0.61
0.86
0.83
0.74
1.01
Debt Equity Ratio
0.23
0.37
0.77
0.6
0.46
0.32
0.46
0.83
0.63
0.53
48.36
18.9
9.69
14.64
67.24
0.23
0.37
0.77
0.6
0.46
54.2
21.26
11.86
17.37
77.85
44.41
16.67
9.41
16.33
65.57
15.64
17.91
14.56
12.49
11.75
17.97
16.09
12.77
13.26
14.82
15.64
17.91
14.56
12.49
13.42
Face Value
Bonus in Equity Capital



Interest Cover

Tax
4.08
3.85
2.84
3.22
5.88
1.86
1.74
1.42
1.64
1.92
4.08
3.85
2.84
3.22
3.14
30.15
29.87
37.29
29.1
30.39
26.09
25.37
27.65
23.91
25.4
4.2
Common size Analysis
Any financial statement in which the items are expressed as percentages of some figure instead
of as dollar amounts. For example, a common-size statement may express all cash inflows as a
percentage of total revenue. A common-size statement is most useful when one attempts to
compare a company to similar companies of different size. It is also called a one hundred percent
statement.
COMMON SIZE ANALYSIS

2011
Maruti
Suzuki
Mah &
Mah
Tata Motors
Total Share Capital
144.50
0.78
293.62
1.47
634.65
1.16
144.50
0.78
293.62
1.47
634.65
1.16
0.00
0.00
33.97
0.17
3.06
0.01
0.00
0.00
0.00
0.00
0.00
0.00
13723.00
74.15
9974.62
49.84
19351.40
35.26
0.00
0.00
11.18
0.06
24.19
0.04
13867.50
74.93
10313.39
51.53
20013.30
36.47
31.20
0.17
407.23
2.03
7766.05
14.15
Unsecured Loans
278.10
1.50
1998.06
9.98
8132.70
14.82
Total Debt
309.30
1.67
2405.29
12.02
15898.75
28.97
3805.20
20.56
5289.67
26.43
15740.69
28.68
525.80
2.84
2005.88
10.02
3222.71
5.87
Sources of funds
Reserves
Networth
Secured Loans
Current Liabilities
Provisions
4331.00
23.40
7295.55
36.45
18963.40
34.56
18507.80
100.00
20014.23
100.00
54875.45
100.00
11737.70
63.42
5849.27
29.23
21883.32
39.88
Less: Accum.
Depreciation
6208.30
33.54
2841.73
14.20
8466.25
15.43
Net Block
5529.40
29.88
3007.54
15.03
13417.07
24.45
1428.60
7.72
1364.31
6.82
4058.56
7.40
Investments
5106.70
27.59
9325.29
46.59
22624.21
41.23
Inventories
1415.00
7.65
1694.21
8.47
3891.39
7.09
893.30
4.83
1354.72
6.77
2602.88
4.74
95.50
0.52
447.62
2.24
638.79
1.16
2403.80
12.99
3496.55
17.47
7133.06
13.00
Loans and Advances
1626.30
8.79
2653.52
13.26
5852.42
10.66
Fixed Deposits
2413.00
13.04
167.02
0.83
1790.13
3.26
Total CA, Loans &

Advances
6443.10
34.81
6317.09
31.56
14775.61
26.93
18507.80
100.00
20014.23
100.00
54875.45
100.00
Total Liabilities
Gross Block
Sundry Debtors
Total Assets
2010
Maruti Suzuki
Mah & Mah
Total Share Capital
144.50
0.88
282.95
144.50
0.88
Share Application
Money
0.00
Preference Share
Capital
1.73
Tata
Motors
570.60
1.12
282.95
1.73
570.60
1.12
0.00
8.01
0.05
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
11690.60
71.09
7527.60
46.10
14208.55
27.80
0.00
0.00
11.67
0.07
24.63
0.05
11835.10
71.97
7830.23
47.95
14803.78
28.97
26.50
0.16
602.45
3.69
7742.60
15.15
Unsecured Loans
794.90
4.83
2277.70
13.95
8883.31
17.38
Total Debt
821.40
4.99
2880.15
17.64
16625.91
32.53
3160.00
19.22
3822.50
23.41
16909.30
33.09
628.40
3.82
1796.54
11.00
2763.43
5.41
3788.40
23.04
5619.04
34.41
19672.73
38.50
16444.90
100.00
16329.42
100.00
51102.42
100.00
10406.70
63.28
4866.18
29.81
18416.81
36.04
Less: Accum.
Depreciation
5382.00
32.73
2537.77
15.55
7212.92
14.11
Net Block
5024.70
30.55
2328.41
14.26
11203.89
21.92
387.60
2.36
1374.31
8.42
5232.15
10.24
Investments
7176.60
43.64
6398.02
39.19
22336.90
43.71
Inventories
1208.80
7.35
1188.78
7.28
2935.59
5.74
809.90
4.92
1258.08
7.71
2391.92
4.68
98.20
0.60
475.17
2.91
612.16
1.20
Reserves
Networth
Secured Loans
Current Liabilities
Provisions
0.00
Gross Block
Capital Work in
Progress
Sundry Debtors
2116.90
12.87
2922.03
17.90
5939.67
11.62
Loans and Advances
1739.10
10.58
2034.47
12.46
5248.71
10.27
0.00
0.00
1268.06
7.77
1141.10
2.23
3856.00
23.45
6224.56
38.13
12329.48
24.13
16444.90
100.00
16325.30
100.00
51102.42
100.00
%
1.34
Fixed Deposits
Total CA, Loans &
Advances
0.00
2009
Maruti
Suzuki
Mah & Mah
Total Share Capital
144.50
1.06
272.62
1.93
Tata
Motors
514.05
144.50
1.06
272.62
1.93
514.05
1.34
Share Application
Money
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
9200.40
67.28
4959.26
35.19
11855.15
30.87
0.00
0.00
12.09
0.09
25.07
0.07
9344.90
68.33
5243.97
37.21
12394.27
32.27
0.10
0.00
981.00
6.96
5251.65
13.67
Unsecured Loans
698.80
5.11
3071.76
21.79
7913.91
20.61
Total Debt
698.90
5.11
4052.76
28.75
13165.56
34.28
3250.90
23.77
3520.20
24.98
10968.95
28.56
380.70
2.78
1277.56
9.06
1877.26
4.89
3631.60
26.56
4797.76
34.04
12846.21
33.45
13675.40
100.00
14094.49
100.00
38406.04
100.00
Gross Block
8720.60
63.77
4653.66
33.05
13905.17
36.21
Less: Accum.
Depreciation
4649.80
34.00
2326.29
16.52
6259.90
16.30
Net Block
4070.80
29.77
2327.37
16.53
7645.27
19.91
Reserves
Networth
Secured Loans
Current Liabilities
Provisions
0.00
Capital Work in
Progress
861.30
6.30
886.96
6.30
6954.04
18.11
3173.30
23.20
5786.41
41.09
12968.13
33.77
Inventories
902.30
6.60
1060.67
7.53
2229.81
5.81
Sundry Debtors
918.90
6.72
1043.65
7.41
1555.20
4.05
239.00
1.75
635.61
4.51
638.17
1.66
2060.20
15.07
2739.93
19.46
4423.18
11.52
Loans and Advances
1809.80
13.23
1402.45
9.96
5909.75
15.39
Fixed Deposits
1700.00
12.43
938.82
6.67
503.65
1.31
Total CA, Loans &

Advances
5570.00
40.73
5081.20
36.08
10836.58
28.22
13675.40
100.00
14081.94
100.00
38404.02
100.00
%
1.47
Investments
0.00
2008
Maruti
Suzuki
Mah & Mah
Total Share Capital
144.50
1.16
239.07
2.30
Tata
Motors
385.54
144.50
1.16
239.07
2.30
385.54
1.47
Share Application
Money
0.00
0.00
0.00
0.00
0.00
0.00
Preference Share
Capital
0.00
0.00
0.00
0.00
0.00
0.00
8270.90
66.68
4098.53
39.39
7428.45
28.41
0.00
0.00
12.47
0.12
25.51
0.10
8415.40
67.84
4350.07
41.80
7839.50
29.98
0.10
0.00
617.26
5.93
2461.99
9.41
Unsecured Loans
900.10
7.26
1969.80
18.93
3818.53
14.60
Total Debt
900.20
7.26
2587.06
24.86
6280.52
24.02
2718.90
21.92
2525.31
24.27
10040.37
38.40
369.50
2.98
943.46
9.07
1989.43
7.61
3088.40
24.90
3468.77
33.33
12029.80
46.00
12404.00
100.00
10405.90
100.00
26149.82
100.00
7285.30
58.73
3552.64
34.19
10830.83
41.43
Reserves
Networth
Secured Loans
Current Liabilities
Provisions
0.00
Gross Block
Less: Accum.
Depreciation
3988.80
32.16
1841.68
17.72
5443.52
20.82
Net Block
3296.50
26.58
1710.96
16.46
5387.31
20.61
736.30
5.94
649.94
6.25
5064.96
19.37
Investments
5180.70
41.77
4215.06
40.56
4910.27
18.78
Inventories
Capital Work in
Progress
1038.00
8.37
1084.11
10.43
2421.83
9.26
Sundry Debtors
655.50
5.28
1004.88
9.67
1130.73
4.33
324.00
2.61
310.58
2.99
750.14
2.87
2017.50
16.26
2399.57
23.09
4302.70
16.46
Loans and Advances
1173.00
9.46
866.19
8.33
4831.36
18.48
0.00
0.00
550.65
5.30
1647.17
6.30
3190.50
25.72
3816.41
36.72
10781.23
41.24
12404.00
100.00
10392.37
100.00
26143.77
100.00
2.01
Fixed Deposits
Total CA, Loans &
Advances
0.00
2007
Maruti
Suzuki
Mah & Mah
Total Share Capital
144.50
1.41
238.03
2.96
Tata
Motors
385.41
144.50
1.41
238.03
2.96
385.41
2.01
Share Application
Money
0.00
0.00
0.00
0.00
0.00
0.00
Preference Share
Capital
0.00
0.00
0.00
0.00
0.00
0.00
6709.40
65.37
3302.01
41.05
6458.39
33.64
0.00
0.00
12.86
0.16
25.95
0.14
6853.90
66.78
3552.90
44.17
6869.75
35.78
63.50
0.62
106.65
1.33
2022.04
10.53
Unsecured Loans
567.30
5.53
1529.35
19.01
1987.10
10.35
Total Debt
630.80
6.15
1636.00
20.34
4009.14
20.88
2288.60
22.30
2138.77
26.59
6956.88
36.23
490.50
4.78
715.43
8.89
1364.32
7.11
2779.10
27.08
2854.20
35.49
8321.20
43.34
10263.80
100.00
8043.10
100.00
19200.09
100.00
Reserves
Networth
Secured Loans
Current Liabilities
Provisions
0.00
Gross Block
6146.80
59.89
3180.57
39.63
8775.80
45.73
Less: Accum.
Depreciation
3487.10
33.97
1639.12
20.42
4894.54
25.51
Net Block
2659.70
25.91
1541.45
19.21
3881.26
20.23
238.90
2.33
329.72
4.11
2513.32
13.10
3409.20
33.22
2237.46
27.88
2477.00
12.91
Inventories
713.20
6.95
878.48
10.95
2500.95
13.03
Sundry Debtors
747.40
7.28
700.89
8.73
782.18
4.08
114.80
1.12
415.89
5.18
535.78
2.79
1575.40
15.35
1995.26
24.86
3818.91
19.90
Loans and Advances
1072.60
10.45
1011.50
12.60
6208.53
32.35
Fixed Deposits
1308.00
12.74
910.18
11.34
290.98
1.52
Total CA, Loans &

Advances
3956.00
38.54
3916.94
48.81
10318.42
53.77
10263.80
100.00
8025.57
100.00
19190.00
100.00
Capital Work in
Progress
Investments
0.00
4.3Trend analysis
Trend Analysis is the practice of collecting information and attempting to spot a pattern,
or trend, in the information. In some fields of study, the term "trend analysis" has more formallydefined meanings.
Trend analysis tries to predict a trend like a bull market run and ride that trend until data
suggests a trend reversal (e.g. bull to bear market). Trend analysis is helpful because moving
with trends, and not against them, will lead to profit for an investor.
Although trend analysis is often used to predict future events, it could be used to estimate
uncertain events in the past, such as how many ancient kings probably ruled between two dates,
based on data such as the average years which other known kings reigned.
Trend Analysis
Tata Motors
Mar '07
Mar '08
Mar '09
Mar '10
Mar '11
Total Share Capital
100.00
100.03
133.38
148.05
164.67
100.00
100.03
133.38
148.05
164.67
100.00
100.00
100.00
100.00
306.00
100.00
100.00
100.00
100.00
100.00
Reserves
100.00
115.02
183.56
220.00
299.63
100.00
98.30
96.61
94.91
93.22
Year
Sources Of Funds
Networth
100.00
114.12
180.42
215.49
291.33
Secured Loans
100.00
121.76
259.72
382.91
384.07
Unsecured Loans
100.00
192.17
398.26
447.05
409.27
Total Debt
100.00
156.66
328.39
414.70
396.56
Total Liabilities
100.00
129.79
234.95
288.91
330.11
Gross Block
100.00
123.42
158.45
209.86
249.36
100.00
111.22
127.90
147.37
172.97
Net Block
100.00
138.80
196.98
288.67
345.69
100.00
201.52
276.69
208.18
161.48
Investments
100.00
198.23
523.54
901.77
913.37
Inventories
100.00
96.84
89.16
117.38
155.60
Sundry Debtors
100.00
144.56
198.83
305.80
332.77
100.00
140.01
119.11
114.26
119.23
100.00
112.67
115.82
155.53
186.78
Loans and Advances
100.00
77.82
95.19
84.54
94.26
Fixed Deposits
100.00
566.08
173.09
392.16
615.21
100.00
104.49
105.02
119.49
143.20
Deffered Credit
100.00
100.00
100.00
100.00
100.00
Current Liabilities
100.00
144.32
157.67
243.06
226.26
Provisions
100.00
145.82
137.60
202.55
236.21
100.00
144.57
154.38
236.42
227.89
Net Current Assets
100.00
-62.52
-100.62
-367.67
-209.68
100.00
59.96
20.02
0.00
0.00
Total Assets
100.00
129.79
234.95
288.91
330.11
Maruti Suzuki
Year
Mar '07
Mar '08
Mar '09
Mar '10
Mar '11
Total Share Capital
144.5
144.5
144.5
144.5
144.5
144.5
144.5
144.5
144.5
144.5
6,709.40
8,270.90
9,200.40
11,690.60
13,723.00
Sources of Funds
Reserves
6,853.90
8,415.40
9,344.90
11,835.10
13,867.50
63.5
0.1
0.1
26.5
31.2
Unsecured Loans
567.3
900.1
698.8
794.9
278.1
Total Debt
630.8
900.2
698.9
821.4
309.3
7,484.70
9,315.60
10,043.80
12,656.50
14,176.80
Gross Block
6,146.80
7,285.30
8,720.60
10,406.70
11,737.70
3,487.10
3,988.80
4,649.80
5,382.00
6,208.30
Net Block
2,659.70
3,296.50
4,070.80
5,024.70
5,529.40
238.9
736.3
861.3
387.6
1,428.60
3,409.20
5,180.70
3,173.30
7,176.60
5,106.70
Inventories
713.2
1,038.00
902.3
1,208.80
1,415.00
Sundry Debtors
747.4
655.5
918.9
809.9
893.3
114.8
324
239
98.2
95.5
1,575.40
2,017.50
2,060.20
2,116.90
2,403.80
Loans and Advances
1,072.60
1,173.00
1,809.80
1,739.10
1,626.30
Fixed Deposits
1,308.00
1,700.00
2,413.00
3,956.00
3,190.50
5,570.00
3,856.00
6,443.10
2,288.60
2,718.90
3,250.90
3,160.00
3,805.20
Networth
Secured Loans
Total Liabilities
Application of Funds

Investments
Deffered Credit
Current Liabilities
Provisions
490.5
369.5
380.7
628.4
525.8
2,779.10
3,088.40
3,631.60
3,788.40
4,331.00
Net Current Assets
1,176.90
102.1
1,938.40
67.6
2,112.10
7,484.70
9,315.60
10,043.80
12,656.50
14,176.80
Total Assets

Year
Mar 07
Mar 08
Mar 09
Mar 10
Mar 11
Share Capital +
100
100.43692
114.531782
118.871571
123.362601
Reserves Total +
100
128.354799
147.191961
213.825392
302.51152
Equity Share Warrants
100
100
100
100
100
Equity Application Money
100
125.786164
205.974843
251.886792
1067.61006
Total Shareholders Funds
100
126.984294
145.629126
209.194706
294.228951
Minority Interest
100
164.781739
182.574662
148.380818
261.325234
Secured Loans +
100
124.24711
137.466255
159.670602
231.572513
Unsecured Loans +
100
133.524172
201.704498
223.601627
209.260672
Total Debt
100
127.126577
157.404885
179.513876
224.647237
Total Liabilities
100
131.341145
156.354631
185.817482
251.836386
Gross Block +
100.00
136.73
166.81
181.67
381.37
Less: Accumulated Depreciation +
100.00
117.48
148.72
148.52
352.88
Less: Impairment of Assets
100.00
100.00
100.00
100.00
100.00
Net Block +
100.00
153.08
174.81
202.31
354.40
Lease Adjustment
100.00
100.00
100.00
100.00
100.00
Capital Work in Progress+
100.00
206.36
313.20
351.81
316.34
Producing Properties
100.00
100.00
100.00
100.00
100.00
Investments +
100.00
135.03
337.01
475.79
480.11
SOURCES OF FUNDS :
APPLICATION OF FUNDS :
Current Assets, Loans & Advances
Inventories +
100.00
134.87
134.71
146.13
224.37
Sundry Debtors +
100.00
140.55
130.67
117.56
172.45
Cash and Bank+
100.00
84.49
145.10
133.84
108.58
Loans and Advances +
100.00
118.85
129.44
157.76
236.32
100.00
120.83
132.86
144.48
203.30
Current Liabilities +
100.00
124.73
160.03
149.64
232.09
Provisions +
100.00
149.47
173.62
203.38
336.27
Total Current Liabilities
100.00
129.14
162.45
159.21
250.64
Net Current Assets
100.00
115.92
115.37
135.76
175.30
Miscellaneous Expenses not written off +
100.00
74.63
88.74
0.00
0.00
Deferred Tax Assets
100.00
130.50
252.47
220.54
264.32
Deferred Tax Liability
100.00
131.06
200.69
248.15
324.55
Net Deferred Tax
100.00
119.44
1,280.76
-327.74
-931.88
Total Assets
100.00
131.34
156.35
185.82
251.84
Less : Current Liabilities and Provisions
4.4 Funds flow Analysis

Fund flow analysis is the analysis of flow of fund from current asset to fixed asset or current
asset to long term liabilities or vise- versa. First of all, we make fund flow statement and then
study its cause and effect deeply and try to find many important facts and information which can
be used in business. It can also solve following problems.
Tata Motors Ltd
(Rs in Crs)
11-Mar
10-Mar
09-Mar
08-Mar
07-Mar
06-Mar
05-Mar
04-Mar
03-Mar
02-Mar
Cash profit
3065.15
3193.1
1817.64
2577.9
2406.49
2476.11
1667.54
1120.96
581.46
287.32
Increase in
equity
Increase in
other
networth
Increase in
loan funds
64.05
56.55
128.51
0.13
2.54
21.08
8.79
33.17
0.01
63.92
4446.63
1298.18
3572.93
367.21
431.21
3428.98
6885.04
2271.38
1072.3
441.42
1235.65
Decrease in
gross block
4.21
Decrease in
investments
896.91
144.71
197.26
Decrease in
working
capital
Others
5046.33
918.03
3245.79
862.76
716.22
48.24
2.02
4.03
4.04
4.03
4.04
4.03
7.87
891.88
7575.83
13025.16
13326.18
8099.24
3485.36
4206.77
3060.72
2455.97
1297.69
1492.83
Cash loss
Decrease in
networth
480.43
4.74
270.39
40.11
798.91
Decrease in
loan funds
695.79
198.54
846.65
693.92
Increase in
gross block
2292.92
2796.9
4956.27
4606.67
2366.38
1745.56
879.3
190.35
171.08
Year
Sources of
funds
Total
Inflow
Application
of funds
Increase in
investments
287.31
9368.77
8057.86
2433.27
461.85
1784.97
81.88
Increase in
working
capital
Dividend
3025.14
73.81
1943.33
1457.3
1274.23
859.05
311.61
578.43
578.14
517.88
453.73
282.11
127.91
0.44
0.44
0.44
0.44
0.44
30.06
7575.83
13025.16
13326.18
8099.24
3485.36
4206.77
3060.72
2455.97
1297.69
1492.83
05Mar
04Mar
Others
Total
Outflow
Maruti Suzuki India Ltd

(Rs in Crs)
Year
11Mar
10Mar
09Mar
08Mar
07Mar
06Mar
03Mar
02Mar
Sources of funds
Cash profit
Increase in
equity
Increase in other
networth
3114.9 3229.8 1879.7 2232.5 1789.7 1269.1 1297.1 1019.9 449.9 439.5
0
0
0
0
0
0
0
0 12.2
0
0
165.9
0 274.8
Increase in loan
funds
122.5
269.4
559.1
Decrease in
gross block
48.6
Decrease in
investments
2069.9
0 2007.4
160.7
1063
520.8
793.3
0 1870.8
Decrease in
working capital
Others
Total Inflow
0
5184.8
0 340.1
0
0
0
0
0
16.3
72.4 30.5
0
5389 3887.1 3564.9 2869.6 1317.7 1474.1 1885.6 767.4 779.6
Application of funds
Cash loss
Decrease in
networth
Decrease in loan
funds
0
39.5
0
0
0
188.1
0
24.8
0
30.7
0
14.2
0
8.2
0
5.6
512.1
201.3
235.9
4.3
144.1
0
0
0
0
200 456.1
Increase in gross
block
2372 1212.4 1560.3 1624.1 1350.9

0 4003.3
Increase in
investments
Increase in
working capital
2044.5
Dividend
Others
Total Outflow
216.7
0
5184.8
0 1771.5
0 1836.3
1358
534.6
431.9
453.6
118.5
66
222
0 1574.1
6.4
1.3
0 452.3
950.2
173.3 101.1 144.5

130 101.1
57.8
43.3 42.7 39.7
0
0
0
0
0
0
0
0 60.5
5389 3887.1 3564.9 2869.6 1317.7 1474.1 1885.6 767.4 779.6
Mahindra & Mahindra Ltd

(Rs in Crs)
Year
11-Mar
10-Mar
09-Mar
08-Mar
07-Mar
06-Mar
05-Mar
04Mar
03Mar
Cash profit
Increase in
equity
Increase in
other
networth
Increase in
loan funds
2966.06
10.67
2299.23
10.33
1352.12
33.55
1305.93
1.04
1197.25
4.63
1031.8
121.75
680.56
0
493.17
0
289.04
0
520.4
1016.55
290.16
188.45
1465.7
951.06
752.62
322.81
Decrease in
gross block
Decrease in
investments
Decrease in
working
capital
Others
Total Inflow
1584.64
46.09
715.09
349.15
202.13
0.02
5081.79
12.55
3338.66
0.98
3188.6
4.02
2977.14
0.5
1955
6.33
1348.33
0
1003.37
30.08
872.4
0
491.17
0
0
0
0
0
0
0
24.25
0
146.28
0
0
0
149.8
0
38.3
0
15.31
Sources of
funds
Application
of funds
Cash loss
Decrease in
networth
Decrease in
loan funds
474.86
1172.61
169.24
410.04
237.22
Increase in
gross block
973.09
699.87
1338.04
692.29
445.58
254.27
251.17
70.14
72.36
Increase in
investments
2927.27
611.61
1571.35
1977.6
568.38
479.29
78.64
248.88
62.14
304.63
512.06
200.57
357.65
706.08
0.49
5081.79
549.52
0.42
3338.66
278.83
0.38
3188.6
282.61
0.39
2977.14
282.23
0.47
1955
243.97
0.99
1348.33
150.81
15.3
1003.37
104.41
0.63
872.4
63.81
40.33
491.17
Increase in
working
capital
Dividend
Others
Total
Outflow
4.5 Cash flow Analysis

Cash flow analysis is the study of the cycle of your business' cash inflows and outflows, with
the purpose of maintaining an adequate cash flow for your business, and to provide the basis for
cash flow management.
Cash flow analysis involves examining the components of your business that affect cash flow,
such as accounts receivable, inventory, accounts payable, and credit terms. By performing a cash
flow analysis on these separate components, you'll be able to more easily identify cash flow
problems and find ways to improve your cash flow.
------------------- in Rs. Cr. -------------------
Cash Flow of Tata Motors

Mar
'11
Mar
'10
Mar
'09
Mar
'08
Mar
'07
12 mths
12 mths
12 mths
12 mths
12 mths
Net Profit Before Tax
1811.82
2240.08
1001.26 2028.92 1913.46
Net Cash From Operating Activities
1505.56
6586.03
1295.02 6174.50 2210.13
Net Cash (used in)/from

Investing Activities
2521.88 11848.29 10644.67 5721.86 2805.10
Net Cash (used in)/from Financing

Activities
Net (decrease)/increase In Cash and
Cash Equivalents
Opening Cash & Cash Equivalents
1648.42
5348.49
8104.70 1132.46
303.58
632.10
86.23
-1244.95 1585.10
-291.39
720.04
630.04
2386.77
Closing Cash & Cash Equivalents
1352.14
716.27
1141.82 2391.31

Activities
826.76
------------------- in Rs. Cr. -------------------
Cash Flow of Maruti Suzuki India

Net Cash From Operating Activities
806.21 1118.15
Mar '11
Mar '10 Mar '09
Mar '08
Mar
'07
12 mths
12 mths
12 mths
12 mths
12 mths
3108.80
3050.30
3592.50
2887.40
1675.80
1193.30
2503.00
1830.40
2279.80
2028.00
73.40
-4783.30
951.40
-3061.50
2436.80
-713.40
55.10
-536.20
132.30
430.00
Net (decrease)/increase In Cash and

Cash Equivalents
2410.30
-1840.80
1608.50
-1098.80
21.20
98.20
1939.00
330.50
1422.80
1401.60
2508.50
98.20
1939.00
324.00
1422.80
Cash Flow of Mahindra and

Mahindra
------------------- in Rs. Cr. ------------------Mar

'11
Mar
'10
Mar
'09
Mar
'08
Mar
'07
12 mths 12 mths 12 mths 12 mths 12 mths

Net Cash From Operating
Activities
3402.13 2756.00 1026.20 1241.57 1315.69

2979.75 2336.49 1631.30 825.83 1168.95
3734.99 1345.44 1941.00 2075.08
950.39

Activities
Net (decrease)/increase In Cash
and Cash Equivalents
-383.72
-783.87
696.91
811.34
418.08
-1138.9
207.18
387.21
-437.91
636.64

1753.13 1543.63 1174.62 1361.79 725.15

614.17 1750.81 1561.83 923.88 1361.79
5. Sources of Long term finance

The sources of long-term finance refer to the institutions or agencies from, or through which
finance for a long period can be procured. As stated earlier, in case of sole proprietary concerns
and partnership firms, long-term funds are generally provided by the owners themselves and by
the retained profits. But, in case of companies whose financial requirement is rather large, the
following are the sources from, or through which long-term funds are raised.
(a) Capital Market
(b) Special Financial Institutions
(c) Mutual Funds
(d) Leasing Companies
(e) Foreign Sources
(f) Retained Earning
The main sources of long term finance are as follows:
1 . Shares:
These are issued to the general public. These may be of two types:
(i)
Equity
(ii)
Preference.
The holders of shares are the owners of the business.
2 . Debentures:
These are also issued to the general public. The holders of debentures are the creditors of the
company.
3 . Public Deposits :
General public also like to deposit their savings with a popular and well established company
which can pay interest periodically and pay-back the deposit when due.
4 . Retained earnings:
The company may not distribute the whole of its profits among its shareholders. It may retain a
part of the profits and utilize it as capital.
5 . Term loans from banks:
Many industrial development banks, cooperative banks and commercial banks grant medium
term loans for a period of three to five years.
6 . Loan from financial institutions:
There are many specialised financial institutions established by the Central and State
governments which give long term loans at reasonable rate of interest. Some of these institutions
are: Industrial Finance Corporation of India ( IFCI ) , Indus t r i a l Development Bank of India
(IDBI), Industrial Credit and Investment Corporation of India (ICICI), Unit Trust of India (UTI),
State Finance Corporations etc.
Sources of finance for the Automobile Industry

The three companies in the automobile industry undertaken in this project i.e., Tata motors,
Mahindra and Mahindra and Maruti Suzuki use only four sources of finance.
1. Internal A/ Reserves: These companies use their reserves and internal accrual as the most
important source of finance as major portion of the total sources arise from the Internal
source itself. This is the cheapest source of finance.\
2. Equity Shares: All the three companies have opted for equity shares for borrowing money
from the company. But not a large of capital is raised from shares as the ownership is diluted
and the profits need to shared.
3. Secured / Unsecured Loans: This is third source of finance is debt finance. The companies
opted for secured and unsecured loans as a source of debt finance. Debt finance helps the
company raise money without dilution of the ownership and only fixed amount of interest
needs to be paid annually to the creditors.
6. Projected financial statement analysis
Projected Financial Statements is summary of various component projections of revenues and

expenses for the budget period. They indicate the expected net income for the period.
Projected Financial Statements are an important tool in determining the overall performance of a
company. They include the balance sheet, income statement and cash flow statements to indicate
the company performance.
The Balance Sheet shows your assets, liabilities and equity at a particular point in time. It is
basically a snapshot of your financial position. The basic accounting formula is assets equal
liabilities plus owners equity. The asset section of the balance sheet should be presented in order
of liquidity starting with the most liquid assets such as cash, accounts receivable and inventory.
The liabilities section should be presented in order of maturity starting with liabilities that are
payable over the next year such as a demand note payable and accounts payable.
Preparing Projected Financial Statements:
Preparing projected financial statements require careful analysis. Prior to preparing projected
financial statements, an analyst studies the financial history of the company. There may be some
drawbacks, which the company may have encountered down the years. To eradicate such hurdles
and for the betterment of the company's financial status, an analysis is conducted.
Financial Forecasting
Tata Motors
Mar12
63002.1227
Mar11
52,067.87
Sales Turover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
Mar10
38,173.39
Mar09
28,538.20
Mar08
33,123.54
Mar07
31,089.69
4973.8623
58028.2604
413.2513
428.6062
58870.1179
0
42406.9305
570.2488
2775.7642
2121.6866
4,110.63
47,957.24
341.53
354.22
48,652.99
2,800.10
35,373.29
1,220.86
606.63
37,200.78
2,877.53
25,660.67
921.29
-238.04
26,343.92
4,355.63
28,767.91
734.17
-40.48
29,461.60
4,425.44
26,664.25
1,114.38
349.68
28,128.31
35,047.05
471.28
2,294.02
1,753.46
25,366.12
362.62
1,836.13
1,289.60
18,801.37
304.94
1,551.39
866.65
20,891.33
325.19
1,544.57
904.95
19,879.56
327.41
1,367.83
872.95
Selling and Admin

Expenses
3376.1299
2,790.19
2,126.10
1,652.31
2,197.49
1,505.23
Preoperative Exp
Capitalised
2501.5782
-989.3928
2,067.42
-817.68
1,707.06
-740.54
1,438.89
-916.02
964.78
-1,131.40
1,051.49
-577.05
52762.9454
5693.9212
43,605.74
4,705.72
31,947.09
4,032.83
23,699.53
1,723.10
25,696.91
3,030.52
24,427.42
2,586.51
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
PBT (Post Extra-ord
Items)
6107.1725
1674.3859
4432.7866
1646.5317
128.4657
2657.7892
0
2657.7892
5,047.25
1,383.79
3,663.46
1,360.77
106.17
2,196.52
0
2,196.52
5,253.69
1,246.25
4,007.44
1,033.87
144.03
2,829.54
0
2,829.54
2,644.39
704.92
1,939.47
874.54
51.17
1,013.76
15.29
1,029.05
3,764.69
471.56
3,293.13
652.31
64.35
2,576.47
0
2,576.47
3,700.89
455.75
3,245.14
586.29
85.02
2,573.83
-0.07
2,573.76
Tax
Reported Net Profit
Preference Dividend
Equity Dividend
465.487
2192.3022
10356.0149
0
1541.8183
384.7
1,811.82
8,558.69
0
1,274.23
589.46
2,240.08
6,580.97
0
859.05
12.5
1,001.26
4,898.16
0
311.61
547.55
2,028.92
4,805.58
0
578.43
660.37
1,913.46
4,547.86
0
578.07
Total Expenses
Operating Profit

Equity Dividend (%)
Book Value (Rs)
233.288
7678.8294
34.5455
242
381.0653
192.8
6,346.14
28.55
200
314.93
132.89
5,705.58
39.26
150
259.03
34.09
5,140.08
19.48
60
240.64
81.25
3,855.04
52.63
150
202.7
98.25
3,853.74
49.65
150
177.59
Balance Sheet
Sources of Funds
Mar12
Total Share Capital
786.966
786.966
3.7944
Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
23995.736
29.9956
24816.492
9629.902
10084.548
19714.45
44530.942
Mar11
634.65
634.65
3.06
0
19,351.40
24.19
20,013.30
7,766.05
8,132.70
15,898.75
35,912.05
Mar10
570.6
570.6
0
0
14,208.55
24.63
14,803.78
7,742.60
8,883.31
16,625.91
31,429.69
Mar09
514.05
514.05
0
0
11,855.15
25.07
12,394.27
5,251.65
7,913.91
13,165.56
25,559.83
Mar08
385.54
385.54
0
0
7,428.45
25.51
7,839.50
2,461.99
3,818.53
6,280.52
14,120.02
Mar07
385.41
385.41
0
0
6,458.39
25.95
6,869.75
2,022.04
1,987.10
4,009.14
10,878.89
21,883.32
8,466.25
18,416.81
7,212.92
13,905.17
6,259.90
10,830.83
5,443.52
8,775.80
4,894.54
13,417.07
4,058.56
22,624.21
3,891.39
2,602.88
638.79
7,133.06
5,852.42
1,790.13
14,775.61
11,203.89
5,232.15
22,336.90
2,935.59
2,391.92
612.16
5,939.67
5,248.71
1,141.10
12,329.48
7,645.27
6,954.04
12,968.13
2,229.81
1,555.20
638.17
4,423.18
5,909.75
503.65
10,836.58
5,387.31
5,064.96
4,910.27
2,421.83
1,130.73
750.14
4,302.70
4,831.36
1,647.17
10,781.23
3,881.26
2,513.32
2,477.00
2,500.95
782.18
535.78
3,818.91
6,208.53
290.98
10,318.42
0
15,740.69
3,222.71
18,963.40
0
16,909.30
2,763.43
19,672.73
0
10,968.95
1,877.26
12,846.21
0
10,040.37
1,989.43
12,029.80
0
6,956.88
1,364.32
8,321.20
Gross Block
27135.317
Less: Accum.
Depreciation
Net Block
16637.167
5032.6144
10498.15
Investments
28054.02
Inventories
4825.3236
Sundry Debtors
3227.5712
792.0996
8844.9944
Loans and Advances
7257.0008
Fixed Deposits
2219.7612
Total CA, Loans &

Advances
18321.756
Deffered Credit
Current Liabilities
19518.456
Provisions
3996.1604
23514.616
Net Current Assets

Total Assets
-5192.8596
0
44530.942
-4,187.79
0
35,912.05
-7,343.25
0
31,429.69
-2,009.63
2.02
25,559.83
-1,248.57
6.05
14,120.02
1,997.22
10.09
10,878.89

Mar11
Mar10
40,865.50
32,174.10
4,304.00
2,856.40
36,561.50
29,317.70
784.6
662
73.2
200.9
37,419.30
30,180.60
Mar09
23,381.50
2,652.10
20,729.40
491.7
-356.6
20,864.50
Mar08
21,200.40
3,133.60
18,066.80
494
336.3
18,897.10
Mar07
17,358.40
2,552.00
14,806.40
338.1
-200.7
14,943.80
28,880.00
210.2
703.6
1,949.40
22,636.30
216.6
545.6
1,061.60
15,983.20
193.6
471.1
716.1
13,958.30
147.3
356.2
523.3
10,863.00
97.4
288.4
392.4
Maruti Suzuki
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
Mar12
51081.88
5380
45701.88
980.75
91.5
46774.13
0
36100
262.75
879.5
2436.75
Selling and Admin

Expenses
1442.338
1,153.87
1,032.17
817.66
521.48
483.26
Preoperative Exp
Capitalised
362.1625
-32.125
289.73
-25.7
201.73
0
236.84
-22.3
287.62
-19.8
239.44
-14.3
Total Expenses
Operating Profit
41451.38
4342
33,161.10
3,473.60
25,694.00
3,824.60
18,396.20
1,976.60
15,774.40
2,628.70
12,349.60
2,256.10
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
PBT (Post Extra-ord
Items)
5322.75
30.5
5292.25
1266.875
0
4025.375
23.625
4049
4,258.20
24.4
4,233.80
1,013.50
0
3,220.30
18.9
3,239.20
4,486.60
33.5
4,453.10
825
0
3,628.10
51.1
3,679.20
2,468.30
51
2,417.30
706.5
0
1,710.80
37.9
1,748.70
3,122.70
59.6
3,063.10
568.2
0
2,494.90
76.6
2,571.50
2,594.20
37.6
2,556.60
271.4
0
2,285.20
33.4
2,318.60
Tax
Reported Net Profit
1025.25
2860.75
820.2
2,288.60
1,094.90
2,497.60
457.1
1,218.70
763.3
1,730.80
705.3
1,562.00

Preference Dividend
Equity Dividend
Equity Dividend (%)
Book Value (Rs)
5351.375
0
270.875
43.875
3611.375
99.0125
187.5
599.9875
4,281.10
0
216.7
35.1
2,889.10
79.21
150
479.99
3,057.70
0
173.3
28.8
2,889.10
86.45
120
409.65
2,413.00
0
101.1
17.2
2,889.10
42.18
70
323.45
1,816.10
0
144.5
24.8
2,889.10
59.91
100
291.28
1,486.60
0
130
21.9
2,889.10
54.07
90
237.23
Balance Sheet
Sources of Funds
Mar12
Mar11
Total Share Capital
180.625
144.5
Mar10
144.5
Mar09
144.5
Mar08
144.5
Mar07
144.5
180.625
144.5
144.5
144.5
144.5
144.5
17153.75
13,723.00
11,690.60
17334.375
13,867.50
11,835.10
39
31.2
26.5
0.1
0.1
63.5
Unsecured Loans
347.625
278.1
794.9
698.8
900.1
567.3
Total Debt
386.625
309.3
821.4
698.9
900.2
630.8
17721
14,176.80
12,656.50 10,043.80 9,315.60 7,484.70
14672.125
11,737.70
10,406.70
8,720.60 7,285.30 6,146.80
7760.375
6,208.30
5,382.00
4,649.80 3,988.80 3,487.10
6911.75
5,529.40
5,024.70
4,070.80 3,296.50 2,659.70
1785.75
1,428.60
387.6
Investments
6383.375
5,106.70
7,176.60
Inventories
1768.75
1,415.00
1,208.80
1116.625
893.3
119.375

Loans and Advances
Reserves
Networth
Secured Loans
Total Liabilities
9,200.40 8,270.90 6,709.40

0
9,344.90 8,415.40 6,853.90
Gross Block
Less: Accum.
Depreciation
Net Block
Sundry Debtors
861.3
736.3
238.9
3,173.30 5,180.70 3,409.20

902.3 1,038.00
713.2
809.9
918.9
655.5
747.4
95.5
98.2
239
324
114.8
3004.75
2,403.80
2,116.90
2,060.20 2,017.50 1,575.40
2032.875
1,626.30
1,739.10
1,809.80 1,173.00 1,072.60
Fixed Deposits
3016.25
2,413.00
8053.875
6,443.10
3,856.00
Current Liabilities
4756.5
3,805.20
3,160.00
Provisions
657.25
525.8
628.4
5413.75
4,331.00
3,788.40
2640.125
2,112.10
67.6
1,938.40
17721
14,176.80
6813.25
5,450.60
3,657.20
599.9875
479.99
409.65
Total CA, Loans &

Advances
Deffered Credit

Net Current Assets
Total Assets
Book Value (Rs)
1,700.00
0 1,308.00
5,570.00 3,190.50 3,956.00

0
3,250.90 2,718.90 2,288.60

380.7
369.5
490.5
3,631.60 3,088.40 2,779.10

102.1 1,176.90
0
12,656.50 10,043.80 9,315.60 7,484.70

1,901.70 1,901.70 2,094.60
323.45
323.45
Mar09
Mar08
237.23

Profit and loss account
Mar12
Mar11
Mar10
Mar07
Sales Turnover
31706.242 25,569.55 20,323.63 14,668.13 12,894.94 11,231.99
Excise Duty
2594.1048
Net Sales
2,092.02
1,807.30
1,587.05
1,584.57
1,310.65
29112.1372 23,477.53 18,516.33 13,081.08 11,310.37
9,921.34
Other Income
698.2812
563.13
285.09
132.65
575.96
531.17
Stock Adjustments
250.7652
202.23
23.69
-156.29
149.11
6.41
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
30061.1836 24,242.89 18,825.11 13,057.44 12,035.44 10,458.92

0
20590.0512 16,604.88 12,461.56
9,208.71
7,963.82
6,937.16
178.4732
143.93
120.97
98.69
91.33
65.19
1792.4944
1,445.56
1,199.85
1,024.52
853.65
666.15
121.9292
98.33
96.92
75.36
73.35
68.8
Selling and Admin Expenses
Preoperative Exp Capitalised
Total Expenses
Operating Profit
2152.1812
1,735.63
1,439.26
1,109.96
1,108.33
891.29
323.764
261.1
264.21
165.83
257.84
210.03
-63.0788
-50.87
-59.55
-42.83
-46.49
-47.1
25095.8144 20,238.56 15,523.22 11,640.24 10,301.83
8,791.52
4267.088
3,441.20
3,016.80
1,284.55
1,157.65
1,136.23
4965.3692
4,004.33
3,301.89
1,417.20
1,733.61
1,667.40
87.8664
70.86
156.85
134.12
87.59
19.8
4877.5028
3,933.47
3,145.04
1,283.08
1,646.02
1,647.60
513.1864
413.86
370.78
291.51
238.66
209.59
0.59
0.33
4364.3164
3,519.61
2,774.26
991.57
1,406.77
1,437.68
72.49
48.97
-19.19
PBT (Post Extra-ord Items)
4364.3164
3,519.61
2,846.75
1,040.54
1,406.77
1,418.49
Tax
1063.3124
857.51
759
199.69
303.4
350.1
Reported Net Profit
3301.004
2,662.10
2,087.75
836.78
1,103.37
1,068.39
4505.7632
3,633.68
3,061.66
2,431.53
2,338.01
1,854.37
Preference Dividend
Equity Dividend
875.5392
706.08
549.52
278.83
282.61
282.23
119.7344
96.56
74.23
33.23
38.48
42.5
7281.8628
5,872.47
5,659.08
2,726.16
2,390.73
2,380.33
56.2092
45.33
36.89
30.69
46.15
44.88
285.2
230
190
100
115
115
216.814
174.85
138.02
191.91
181.43
148.72
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Equity Dividend (%)

Book Value (Rs)
Balance Sheet
Sources of Funds
Mar12
Mar11
Total Share Capital
355.2802
293.62
Mar10
282.95
Mar09
272.62
Mar08
239.07
Mar07
238.03
355.2802
293.62
282.95
272.62
239.07
238.03
41.1037
33.97
8.01
12069.2902
9,974.62
7,527.60
4,959.26
4,098.53
3,302.01
13.5278
11.18
11.67
12.09
12.47
12.86
12479.2019
10,313.39
7,830.23
5,243.97
4,350.07
3,552.90
492.7483
407.23
602.45
981
617.26
106.65
Unsecured Loans
2417.6526
1,998.06
2,277.70
3,071.76
1,969.80
1,529.35
Total Debt
2910.4009
2,405.29
2,880.15
4,052.76
2,587.06
1,636.00
15389.6028
12,718.68
10,710.38
9,296.73
6,937.13
5,188.90
Gross Block
7077.6167
5,849.27
4,866.18
4,653.66
3,552.64
3,180.57
3438.4933
2,841.73
2,537.77
2,326.29
1,841.68
1,639.12
Net Block
3639.1234
3,007.54
2,328.41
2,327.37
1,710.96
1,541.45
1650.8151
1,364.31
1,374.31
886.96
649.94
329.72
Investments
11283.6009
9,325.29
6,398.02
5,786.41
4,215.06
2,237.46
Inventories
2049.9941
1,694.21
1,188.78
1,060.67
1,084.11
878.48
Sundry Debtors
1639.2112
1,354.72
1,258.08
1,043.65
1,004.88
700.89
541.6202
447.62
475.17
635.61
310.58
415.89
4230.8255
3,496.55
2,922.03
2,739.93
2,399.57
1,995.26
Loans and Advances
3210.7592
2,653.52
2,034.47
1,402.45
866.19
1,011.50
202.0942
167.02
1,268.06
938.82
550.65
910.18
7643.6789
6,317.09
6,224.56
5,081.20
3,816.41
3,916.94
Reserves
Networth
Secured Loans
Total Liabilities
Fixed Deposits
Total CA, Loans &
Advances
Deffered Credit
Current Liabilities
6400.5007
5,289.67
3,822.50
3,520.20
2,525.31
2,138.77
Provisions
2427.1148
2,005.88
1,796.54
1,277.56
943.46
715.43
8827.6155
7,295.55
5,619.04
4,797.76
3,468.77
2,854.20
-1183.9366
-978.46
605.52
283.44
347.64
1,062.74
4.12
12.55
13.53
17.55
15389.6028
12,718.68
10,710.38
9,296.73
6,937.13
5,188.92
Net Current Assets

Total Assets
7. Capital Structure
Capital structure is combination of sources of funds in which we can include two main sources'
proportion. One is share capital and other is Debt. All four theories are just explaining the effect
of changing the proportion of these sources on the overall cost of capital and total value of firm.
If I have to write theories of capital structure in very few lines, I will only say that it propounds
or presents the effect on overall cost of capital and market or total value of firm, if I change my
capital structure from 50: 50 to any other proportion. First 50 represent the share capital and
second 50 represent the Debt. Now, I am ready to explain these four theories of capital structure
in simple and clean words.
1st Theory of Capital Structure

Name of Theory = Net Income Theory of Capital Structure
This theory gives the idea for increasing market value of firm and decreasing overall cost of
capital. A firm can choose a degree of capital structure in which debt is more than equity
share capital. It will be helpful to increase the market value of firm and decrease the value of
overall cost of capital. Debt is cheap source of finance because its interest is deductible from
net profit before taxes. After deduction of interest company has to pay less tax and thus, it
will decrease the weighted average cost of capital.
For example if you have equity debt mix is 50:50 but if you increase it as 20: 80, it will
increase the market value of firm and its positive effect on the value of per share.
High debt content mixture of equity debt mix ratio is also called financial leverage.
Increasing of financial leverage will be helpful to for maximize the firm's value.
2nd Theory of Capital Structure

Name
of
Theory
Net
Operating
income Theory
of
Capital
Structure
Net operating income theory or approach does not accept the idea of increasing the financial
leverage under NI approach. It means to change the capital structure does not affect overall
cost of capital and market value of firm. At each and every level of capital structure, market
value of firm will be same.
3rd Theory of Capital Structure
Name of Theory = Traditional Theory of Capital Structure
This theory or approach of capital structure is mix of net income approach and net operating
income approach of capital structure. It has three stages which you should understand:
Ist Stage
In the first stage which is also initial stage, company should increase debt contents in its
equity debt mix for increasing the market value of firm.
2nd Stage
In second stage, after increasing debt in equity debt mix, company gets the position of
optimum capital structure, where weighted cost of capital is minimum and market value of
firm is maximum. So, no need to further increase in debt in capital structure.
3rd Stage
Company can gets loss in its market value because increasing the amount of debt in capital
structure after its optimum level will definitely increase the cost of debt and overall cost of
capital.
4th Theory of Capital Structure

Name of theory = Modigliani and Miller
MM theory or approach is fully opposite of traditional approach. This approach says that
there is not any relationship between capital structure and cost of capital. There will not
effect of increasing debt on cost of capital.
Value of firm and cost of capital is fully affected from investor's expectations. Investors'
expectations may be further affected by large numbers of other factors which have been
ignored by traditional theorem of capital structure.
9. Scope and Limitations

9.1 Scope
1.
2.
3.
4.
5.
Leveraging ratios are used extensively by analysts outside the firm to make decisions
concerning the provision of new credit or the extension of existing credit arrangements.
There is an important implicit assumption in Leverage calculation of a firm, which is that
the underlying levered asset is the same as the unlevered one. So while adding leverage to
a given asset always adds risk, it is not the case that a levered company or investment is
always riskier than an unlevered one.
Ratios are not predictive; as they are usually based on historical information
notwithstanding ratios can be used as a tool to assist financial analysis.
Ratio analysis helps to focus attention systematically on important areas and summarise
information in an understandable form and assist in identifying trends and relationships
(see methods for facilitating the financial analysis above).
Financial Statement Analysis helps regulatory authorities like International Accounting
Standards Board can ensure whether the company is following accounting standards or
not. Those analysed data also help the government agencies to analyze the taxation due to
the company.
9.2 Limitations
1. The biggest risk of leverage is that it multiplies losses. A corporation that borrows too
much money might face bankruptcy during a business downturn, while a less-levered
corporation might survive.
2. As ratio analysis is done from the data in the financial statements like profit and loss and
balance sheet, in case of any mistakes in those financial statements will reflect in the
ratios also.
3. Since Ratios are easy to manipulate they are misused by managers for window dressing;
window dressing refers to presenting of better picture of the company than what it is.
4. Ratio analysis does not take into account the qualitative factors; it only presents the
figures as they are. So for example it may possible that company may have higher current
ratio indicating that liquidity position of the company is good, however if large portion of
those current asset includes inventory then it does not mean a sound liquidity position.
5. Financial statement analysis provide an assessment of the costs and not value. For
example, fixed assets are usually shown on the balance sheet as the cost of the assets less
their accumulated depreciation, which may not reflect the actual current market value of
those assets.
6. Analysis of Financial statements does not include all considerable items. For example, it
is hard to put a value on human capital (such as management expertise). And recent
accounting scandals have brought light to the extent of financing that may occur off the
balance sheet.
10. Summary
This project has been done on Automobile Industry. Along with the leading company of this
sector Tata Motors Ltd, here we have taken the two other major players of this industryMahindra and Mahindra Ltd (a multinational automaker company in India and a subsidiary of
Mahindra Group conglomerate) and Maruti Suzuki India Ltd(India's largest passenger car
company).
The main areas of focus in this project are:
i)
Analysis of Financial statements of the company:
This is done to understand the risk and profitability of a firm (business, sub-business
or project) through analysis of reported financial information, particularly annual
and quarterly reports. Users of financial statements can get further insights abouts
financial strengths and weakness of the firm through these analysis. Analysis of
Financial statements is the starting point of making plans before using any
sophisticated forecasting and planning procedures.
ii)
Leverages:
The use of the fixed charges sources of fund, such as debt and preference capital
along with the owners equity in the capital structure is described as Leverages.
iii)
Methods of Financial statements Analysis:
The various methods of Financial statements Analysis that have used in this project
are the various ratios, trend analysis, common size balance sheet, funds flow
statement and cash flow statement.
iv)
Sources of Long term finance:

Two long term securities that are available to a company are shares and debentures.
Equity (referred to as shareholders funds on balance sheets) consists of equity
v)
vi)
capital, retained earnings, and preference capital. Debt (referred to as loan funds on
balance sheets) consists of term loans, debentures and short term borrowings.
Projected financial statement analysis:
Projected Financial Statements is summary of various component projections of
revenues and expenses for the budget period. They indicate the expected net income
for the period.
Capital Structure:
Capital structure is combination of sources of funds in which we can include two
main sources' proportion. One is share capital and other is Debt. All four theories are
just explaining the effect of changing the proportion of these sources on the
overall cost of capital and total value of firm.
The above analysis is followed by the scope and limitations of the project.

FM Project 2

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FM Project 2

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F.M.

Analysis of Financial statements of the company

Sources of Long Term Finance

shipped to Sri Lanka.

1.2 Mahindra and Mahindra Ltd

1.3 Maruti Suzuki India Ltd

2. Analysis of Financial statements

------------------- in Rs. Cr. -------------------

Profit & Loss account of Tata Motors

------------------- in Rs. Cr. -------------------

------------------- in Rs. Cr. ------------------Mar '11

Total Share Capital

Equity Share Capital

Share Application Money

Preference Share Capital

Profit and Loss Account

Mahindra and Mahindra

Total Share Capital

Equity Share Capital

Share Application Money

Preference Share Capital

Less: Accum. Depreciation

Mahindra and Mahindra

Capital Work in Progress

Total Current Assets

Loans and Advances

Cash and Bank Balance

Total CL & Provisions

Net Current Assets

Book Value (Rs)

Mahindra and Mahindra ltd.

Profit & Loss account

Selling and Admin Expenses

4. Financial statements Analysis

Current Liabilities Inventory

Free Reserves Per Share (Rs)

Gross Profit Margin(%)

Return on Long Term Funds(%)

Financial Charges Coverage Ratio Post

Inventory Turnover Ratio

Operating Profit Margin(%)

Profit Before Interest And Tax Margin(%)

Gross Profit Margin(%)

Cash Profit Margin(%)

Adjusted Cash Margin(%)

Net Profit Margin(%)

Adjusted Net Profit Margin(%)

Return on Assets Excluding Revaluations

Return on Assets Including Revaluations

Debt Equity Ratio

Long Term Debt Equity Ratio

Inventory Turnover Ratio

Debtors Turnover Ratio

Investments Turnover Ratio

Fixed Assets Turnover Ratio

Total Assets Turnover Ratio

Asset Turnover Ratio

Net Operating Profit Per Share (Rs)

Return On Capital Employed(%)

Return on Long Term Funds(%)

Debt Coverage Ratios

Cash Flow Indicator Ratios

Mahindra and mahindra