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Presented by:

Piyush
Jain
 Financial analysis is the process of identifying the
financial strengths and weaknesses of the firm
by properly establishing relationships between
the items of the balance sheet and the profit &
loss A/c.
 Financial analysis can be undertaken by
management of the firm, or by parties outside
the firm i.e. owners, creditors, investors and
others.
Sales Analysis of TVS motor co ltd.
Capital Structure Analysis
Working Capital Analysis
Shareholding Pattern
 Ratio analysis is a powerful tool of
financial analysis. It can be used to
compare the risk & return relationships
of firms of different sizes.
 Liquidity ratios attempt to measure a company's ability to pay off
its short-term debt obligations. This is done by comparing a
company's most liquid assets(or, those that can be easily
converted to cash), its short-term liabilities.

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


liabilities the better as it is a clear signal that a company can pay
its debts that are coming due in the near future and still fund its
ongoing operations. On the other hand, a company with a low
coverage rate should raise a red flag for investors as it may be a
sign that the company will have difficulty meeting running its
operations, as well as meeting its obligations.
 Current ratio indicates the availability of current assets in
rupees for every one rupee of current liability. So we can
see that over 5 years the current ratio has increased from
unsatisfactory level of 0.94 to satisfactory level of 1.37
 Quick ratio shows the relationship between liquid asset &
current liabilities. It is also measure of short term
solvency. So we can see that the quick ratio of co. is not
satisfactory as they are short with their assets to pay of
the liabilities as in all 5 years the quick ratio < 1.
 Cash Ratio shows the Companies abilities to meet its
short term obligations out of Cash Balance or assets
equivalent to cash
 Leverage ratio shows the proportions of debt and equity in
financing the firm’s assets.
 These ratios can be used to determine the overall level of
financial risk a company and the firm’s ability of using debt
to shareholder’s advantage.
 Efficiency ratio reflect the firm’s efficiency in utilizing its
assets.
 These ratios look at how well a company turns its assets
into revenue as well as how efficiently a company converts
its sales into cash. Basically, these ratios look at how
efficiently and effectively a company is using its resources
to generate sales and increase shareholder value. In
general, the better these ratios are, the better it is for
shareholders.
 Profitability ratios measure overall
performance and effectiveness of the
firm in generating profit, and are
calculated by establishing relationships
between sales and assets on the other.

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