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TABLE OF CONTENT
Theoretical Framework Company Profile Financial Summary Of Maruti Udyog Ltd o Profit & Loss Account o Balance Sheet o Cash Flow Statement o Key Ratios o Analysis And Interpretation Of Key Ratios o Conclusion Bibliography
Financial Analysis of Maruti Udyog Ltd
THEORITCAL FRAMEWORK Financial Statement
Financial statements (or financial reports) are formal records of a business' financial activities. In British English, including United Kingdom company law, financial statements are often referred to as accounts, although the term financial statements is also used, particularly by accountants. Financial statements provide an overview of a business' financial condition in both short and long term. There are four basic financial statements: 1. Balance sheet: also referred to as statement of financial position or condition, reports on a company's assets, liabilities and net equity as of a given point in time. 2. Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's results of operations over a period of time. 3. Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period. 4. Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities.
For large corporations, these statements are often complex and may include an extensive set of notes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.
Financial Analysis of Maruti Udyog Ltd
Purpose of financial statements
The objective of financial statements is to provide information about the financial strength, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions." Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization's financial position. Reported income and expenses are directly related to an organization's financial performance. Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently." • Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis are then performed on these statements to provide management with a more detailed understanding of the figures. These statements are also used as part of management's report to its stockholders, as it form part of its Annual Report. • Employees also need these reports in making collective bargaining agreements (CBA) with the management, in the case of labor unions or for individuals in discussing their compensation, promotion and rankings. 2. External Users: are potential investors, banks, government agencies and other parties who are outside the business but need financial information about the business for a diverse number of reasons.
Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and is prepared by professionals (financial analysts), thus providing them with the basis in making investment decisions.
Financial Analysis of Maruti Udyog Ltd • Financial institutions (banks and other lending companies) use them to decide whether to grant a company with fresh working capital or extend debt securities (such as a long-term bank loan or debentures) to finance expansion and other significant expenditures. • Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company. • Media and the general public are also interested in financial statements for a variety of reasons .
The purpose of the income statement is . also known as the "top line") is transformed into net income (the result after all revenues and expenses have been accounted for. is a financial statement for companies that indicates how Revenue (money received from the sale of products and services before expenses are taken out.Financial Analysis of Maruti Udyog Ltd Income Statement An Income Statement. also called a Profit and Loss Statement (P&L). also known as the "bottom line").
they produce a similar statement that reflects the fact that the charity is not operating to make a profit.represent expenses needed to sell products (e.represent expenses included in research and development Depreciation . year. shipping. depreciation of sales equipment) R & D expenses . or other activities that constitute the entity's ongoing major operations. utilities. • Expenses . depreciation of office building and equipment. Charitable organizations that are required to publish financial statements do not produce an income statement. freight.represent expenses to manage the business (officer salaries.g. Instead. Usually presented as sales minus sales discounts.e.Cash inflows or other enhancements of assets of an entity during a period from delivering or producing goods. rendering services. returns. rendering services. stationery. o General and administrative expenses (G & A) . insurance. accounting period) with respect to fixed assets that have been capitalised on the balance sheet. or carrying out other activities that constitute the entity's ongoing major operations. advertising.Financial Analysis of Maruti Udyog Ltd to show managers and investors whether the company made or lost money during the period being reported.Cash outflows or other using-up of assets or incurrence of liabilities during a period from delivering or producing goods. supplies) Selling expenses . legal and professional fees.. Items on income statement Operating section • Revenue . sales salaries and commissions.is the charge for a specific period (i. o o o . and allowances.
stopping production temporarily. • Extraordinary items are both unusual (abnormal) and infrequent. frost damage would not qualify in Canada but would in the tropics).g. expropriation. Measurement of cash flow can be used • to evaluate the state or performance of a business or project. Irregular items They are reported separately because this way users can better predict future cash flows irregular items most likely won't happen next year. deciding to depreciate an investment property that has previously not been depreciated. prohibitions under new regulations. estimated useful life of a fixed asset) do not qualify. . • Discontinued operations is the most common type of irregular items. These are reported net of taxes. • Other expenses or losses . sale of securities or fixed assets). unexpected nature disaster. for example.g. sometimes tied to a specific project. patents).Financial Analysis of Maruti Udyog Ltd Non-operating section • Other revenues or gains . for example. Note: natural disaster might not qualify depending on location (e. but not both (e.expenses or losses not related to primary business operations. It also includes unusual gains and losses that are either unusual or infrequent. changes in estimates (e.g. rent. However.revenues and gains from other than primary business activities (e.g. Shifting business location. • Changes in accounting principle is. Cash Flow Cash flow is a term that refers to the amount of cash being received and spent by a business during a defined period of time. or changes due to technological improvement do not qualify as discontinued operations.
Cash flow as a generic term may be used differently depending on context. and certain cash flow definitions may be adapted by analysts and users for their own uses. Alternately. The cash flow statement can be examined to determine the short-term sustainability of a . Classification Cash flows can be classified into: 1. 3. and net present value. • to examine income or growth of a business when it is believed that accrual accounting concepts do not represent economic realities. even while profitable.Financial Analysis of Maruti Udyog Ltd • to determine problems with liquidity. issuing or repurchasing stock. Common terms (with relatively standardized definitions) include operating cash flow and free cash flow. Being profitable does not necessarily mean being liquid. cash flow can be used to 'validate' the net income generated by accrual accounting. All three together are necessary to reconcile the beginning cash balance to the ending cash balance. 2. • to generate project rate of returns. Investment cash flows: Cash received or expended through capital expenditure. Financing cash flows: Cash received or expended as a result of financial activities. A company can fail because of a shortage of cash. Benefits from using Cash flow The cash flow statement is one of the four main financial statements of a company. such as receiving or paying loans. Operational cash flows: Cash received or expended as a result of the company's core business activities. and paying dividends. investments or acquisitions. The time of cash flows into and out of projects are used as inputs to financial models such as internal rate of return.
the company may be deriving additional operating cash by issuing shares. Mannesmann. This information cannot always be seen in the income statement or the balance sheet of a company. Companies that have announced significant writedowns of assets. These write-downs have frequently resulted in large announced annual losses. WorldCom committed an accounting fraud that was discovered in 2002. This breakdown allows the user of financial statements to determine where the company is deriving its cash for operations. and remain solvent. The cash flow statement breaks the sources of cash generation into three sections: operational cash flows. or raising additional debt finance. For example. For instance. cash flow statements may allow careful analysts to detect problems that would not be evident from the other financial statements alone. If cash is increasing (and operational cash flow is positive). Despite this large "loss". such as Vodafone's announcement in May 2006 that it had lost £21. may have substantially higher cash flows than the announced earnings would indicate.Financial Analysis of Maruti Udyog Ltd company. particularly goodwill. For example. a company may be notionally profitable but generating little operational cash (as may be the case for a company that barters its products rather than selling for cash). the fraud consisted primarily of treating ongoing expenses as capital investments. and financing. indicate that these investments were now worth much less. allowing operators like Vodafone to return money to shareholders even as they rack up huge paper losses. Increasing or stable cash balances suggest that a company is able to meet its cash needs. telecoms firms that paid substantial sums for 3G licenses or for acquisitions have subsequently had to write-off goodwill. which represented a sunk cost. one of the largest annual losses in European history. In such a case. that is. investing. then a company will often be deemed to be healthy in the short-term." In certain cases. a company may be generating profit.9 billion due to a writedown of its German acquisition. For example. Vodafone's operating cash flows were solid: "Strong cash flow is one of the most attractive aspects of the cellphone business. but still have difficulty in remaining solvent. thereby fraudulently boosting net .
Financial Analysis of Maruti Udyog Ltd income. liabilities and Ownership equity for an organization or . a balance sheet or statement of financial position is a summary of the value of all assets. Use of one measure of cash flow (free cash flow) would potentially have detected that there was no change in overall cash flow (including capital investments Balance Sheet In financial accounting.
they build up inventories of goods to sell and they acquire buildings and equipment. plus any cash in hand. liabilities and shareholders' equity. real businesses are not paid immediately. instead of a period of time. even if they wanted to. Records of the values of each account or line in the balance sheet are usually maintained using a system of accounting known as the double-entry bookkeeping system. immediately turn these into cash at the end of each period.Financial Analysis of Maruti Udyog Ltd individual on a specific date. the balance sheet is the only statement which applies to a single point in time. The difference between the assets and the liabilities is known as the net assets or the net worth of the company. A balance sheet is often described as a "snapshot" of a company's financial condition on a given date. According to the accounting equation. However. Of the four basic financial statements. Types of balance sheets . and the proprietors do not withdraw all their original capital and profits at the end of each period. Real businesses also owe money to suppliers and to tax authorities. A simple business operating entirely in cash could measure its profits by simply withdrawing the entire bank balance at the end of the period. The main categories of assets are usually listed first and are followed by the liabilities. In other words: businesses have assets and so they could not. such as the end of its financial year. In other words businesses also have liabilities. net worth must equal assets minus liabilities. A company balance sheet has three parts: assets.
Financial Analysis of Maruti Udyog Ltd A balance sheet summarizes an organization or individual's asset. intangible assets such as patents. fixed assets such as land.  Corporate balance sheet structure Guidelines for corporate balance sheets are given by the International Accounting Standards Committee and numerous country-specific organizations.  Personal balance sheet A personal balance sheet lists current assets such as cash in checking accounts and savings accounts. Contingent liabilities such as warranties are noted in the footnotes to the balance sheet. Government organizations do not generally follow standards established for individuals or businesses. buildings. equity and liabilities at a specific point in time. Large businesses also may prepare balance sheets for segments of their businesses. Balance sheet account names and usage depend on the organization's country and the type of organization.[dead link] Larger businesses tend to have more complex balance sheets. A balance sheet is often presented alongside one for a different point in time (typically the previous year) for comparison. . accrued expenses.  Small business balance sheet A small business balance sheet lists current assets such as cash. Personal net worth is the difference between an individual's total assets and total liabilities. and liabilities such as accounts payable. Individuals and small businesses tend to have simple balance sheets. long-term assets such as common stock and real estate. and inventory. and long-term liabilities such as mortgage and other loan debt. and these are presented in the organization's annual report. The small business's equity is the difference between total assets and total liabilities. and long-term debt. accounts receivable. current liabilities such as loan debt and mortgage debt due or overdue. and equipment. Securities and real estate values are listed at market value rather than at historical cost or cost basis.
biological assets. plant and equipment 2. such as promissory notes and corporate bonds 4. investments accounted for using the equity method 6. intangible assets 4. such as real estate held for investment purposes 3. Bearer biological assets are plants or animals which bear agricultural produce for harvest. Liabilities 1. accounts receivable 3. inventories 2. investment property. provisions for warranties or court decisions 3. issued capital and reserves attributable to equity holders of the parent company . and cash and cash equivalents) 5. accounts receivables. minority interest in equity 7. financial assets (excluding investments accounted for using the equity method. deferred tax liabilities and deferred tax assets 6. property. financial liabilities (excluding provisions and accounts payable). such as apple trees grown to produce apples and sheep raised to produce wool.Financial Analysis of Maruti Udyog Ltd If applicable to the business. summary values for the following items should be included on the balance sheet: Assets Current assets 1. which are living plants or animals. liabilities and assets for current tax 5. cash and cash equivalents Long-term assets 1. accounts payable 2.
and are a residual. which is known as the shareholders' equity. usually. "liabilities" is used in the more restrictive sense of liabilities excluding shareholders' equity. a description of the nature and purpose of each reserve within owners' equity Financial Statement Analysis Financial statement analysis is the process of examining relationships among financial statement elements and making comparisons with relevant information. Formally. 1. however. preferences. shares reserved for issuance under options and contracts 7. The balance of assets and liabilities (including shareholders' equity) is not a coincidence. description of rights. issued and fully paid.Financial Analysis of Maruti Udyog Ltd Equity The net assets shown by the balance sheet equals the third part of the balance sheet. In this sense. and restrictions of shares 5. including shares held by subsidiaries and associates 6. reconciliation of shares outstanding at the beginning and the end of the period 4. treasury shares. Records of the values of each account in the balance sheet are maintained using a system of accounting known as double-entry bookkeeping. shareholders' equity is part of the company's liabilities: they are funds "owing" to shareholders (after payment of all other liabilities). and issued but not fully paid 2. par value of shares 3. shareholders' equity by construction must equal assets minus liabilities. numbers of shares authorised. It is a valuable .
Financial Analysis of Maruti Udyog Ltd tool used by investors and creditors. Three primary types of financial statement analysis are commonly known as horizontal analysis. and others in their decisionmaking processes related to stocks. and other financial instruments. since the analyst is reading across the page to compare any single line item. the analyst may prefer to use a variation of horizontal analysis called trend analysis. and ratio analysis. bonds. such as cash and inventory. vertical analysis. such as bonds. Trend analysis involves calculating each year's financial statement balances as percentages of the first year. Investors who buy stock are primarily interested in a company's profitability and their prospects for earning a return on their investment by receiving dividends and/or increasing the market value of their stock holdings. such as sales revenues. Financial analysts. liquidity. and solvency of companies in order to make recommendations about the purchase or sale of securities. . the base year figures are always 100 percent. Creditors and investors who buy debt securities. in comparing financial statements for a number of years. financial analysts. routinely assess the profitability. such as stocks and bonds. are more interested in liquidity and solvency: the company's short-and long-run ability to pay its debts. also known as the base year. When expressed as percentages. and percentage changes from the base year can be determined. who frequently specialize in following certain industries. The goal in analyzing financial statements is to assess past performance and current financial position and to make predictions about the future performance of a company. the process is referred to as horizontal analysis. Horizontal Analysis When an analyst compares financial information for two or more years for a single company. In addition to comparing dollar amounts. Alternatively. Analysts can obtain useful information by comparing a company's most recent financial statements with its results in previous years and with the results of other companies in the same industry. the analyst computes percentage changes from year to year for all financial statement balances.
while on the balance sheet it is total assets.Financial Analysis of Maruti Udyog Ltd Vertical Analysis When using vertical analysis. COMPANY PROFILE "Count on Us" . Solvency ratios indicate the ability of the company to meet its long-term obligations on a continuing basis and thus to survive over a long period of time. also known as component percentages.Maruti Suzuki . In judging how well on a company is doing. Profitability ratios are gauges of the company's operating success for a given period of time. Ratios are often classified using the following terms: profitability ratios (also known as operating ratios). liquidity ratios. analysts typically compare a company's ratios to industry statistics as well as to its own past performance. Ratio Analysis Ratio analysis enables the analyst to compare items on a single financial statement or to examine the relationships between items on two financial statements. and solvency ratios. produces common-size financial statements. whether across the years for a single company or across different companies. This approach to financial statement analysis. After calculating ratios for each year's financial data. The total used by the analyst on the income statement is net sales revenue. Common-size balance sheets and income statements can be more easily compared. The term vertical analysis applies because each year's figures are listed vertically on a financial statement. the analyst can then examine trends for the company across years. using this analytical tool facilitates inter ompany as well as intra mpany comparisons. the analyst calculates each item on a single financial statement as a percentage of a total. Liquidity ratios are measures of the short-term ability of the company to pay its debts when they come due and to meet unexpected needs for cash. Since ratios adjust for size.
Financial Analysis of Maruti Udyog Ltd Maruti Udyog Ltd.Four Wheelers BSE . Few of the popular models of MUL are Alto.com Milestones . The company has a joint venture with Suzuki Motor Corporation of Japan. India Tel. Quick Facts Year of Establishment Vision Industry Listings & its codes February 1981 "The Leader in The Indian Automobile Industry. 2341341-5 Website www." Automotive . of Japan in October 1982. 23713575 Telex: 031-65029 MUL IN Works Palam Gurgaon Road Gurgaon -122015 Haryana. now Suzuki Motor Corporation.110001. Kasturba Gandhi Marg New Delhi . (MUL) is the first automobile company in the world to be honoured with an ISO 9000:2000 certificate. Jeevan Prakash 25.marutiudyog.BO Joint Venture Registered & Corporate Office With Suzuki Motor Company. Creating Customer Delight and Shareholder's Wealth. India Tel. Baleno.: +(91)-(124)-2340341-5. Swift. Wagon-R and Zen.Code: 532500 NSE . A pride of India. It is said that the company takes only 14 hours to make a car. 11th Floor.: +(91)-(11)-23316831 (10 lines) Fax: +(91)-(11)-23318754.Code: MARUTI Bloomberg: MUL@IN Reuters: MRTI.
Maruti 800. Launch of customer information centers in Hyderabad. Launch of Maruti Gypsy (970cc.Financial Analysis of Maruti Udyog Ltd 1981 1982 1983 1984 1985 1986 1987 1988 1992 1994 1995 1996 1997 1998 1999 2000 2001 2002 • • • Maruti Udyog Ltd. Second plant launched.Suzuki innovative traffic beat in Delhi and Chennai as social initiatives. Launch of 24-hour emergency on-road vehicle service. Launch of Maruti Finance with 10 finance companies in Mumbai. India's first affordable car was produced. Produced the 2 millionth vehicle since the commencement of production. Bangalore. SMC increases its stake to 54. Installed capacity reached 40. and Chennai.000 vehicles (cumulative production). a 796 cc MUV was in production. Produced the 1 millionth vehicle since the commencement of production. Launch of Maruti .000 units. the installed capacity reached 200. Installed capacity increased to 100. • • • • • • • • • • • • • • • • • Start of Maruti True value in Mumbai. Exported first lot of 500 cars to Hungary.2 per cent. IDTR (Institute of Driving Training and Research) launched jointly with Delhi government to promote safe driving habits. a 796 cc hatchback. Launch of website as part of CRM initiatives. Omni. Listed on BSE and NSE after a public issue oversubscribed 10 2003 • • .000 units. SMC increases its stake to 50 per cent. Production of 4 millionth vehicle. Steped into a JV with SMC of Japan. 4WD off-road vehicle). Produced 100. was incorporated.000 units.
2005 • The fiftieth lakh car rolls out in April. Production of large number of motor vehicles which was necessary for economic growth. which is caused due to lack of efficient public transport system. Company Flashback Maruti Udyog Limited (MUL). 2005. 2004 • Maruti closed the financial year 2003-04 with an annual sale of 472122 units. established in 1981. The MUL plant has already rolled out 4. had a prime objective to meet the growing demand of a personal mode of transport. to be honoured with an ISO 9000:2000 certificate. MUL became one of the first automobile companies. Suzuki Motor Company of Japan was chosen from seven other prospective partners worldwide. the highest ever since the company began operations 20 years ago. Suzuki was due not only to its undisputed leadership in small cars but also to commitments to actively bring to MUL contemporary technology and Japanese managementpractices.Financial Analysis of Maruti Udyog Ltd times. Production of fuel-efficient vehicles to conserve scarce resources. The objectives of MUL then are as cited below: • • • Modernization of the Indian Automobile Industry. globally. In 2001. The production/ R&D is spread across 297 acres with 3 fully-integrated production facilities. The incorporation of the company was through an Act of Parliament. A license and a Joint Venture agreement were signed between Government of India and Suzuki Motor Company (now Suzuki Motor Corporation of Japan) in Oct 1982.3 million .
169 119.0 11. Not only this. Profit & Loss account (Rs.009 31.7 19.287 2.354 9. The company takes approximately 14 hours to make a car.975 1.062 16.170 105.4 101.2 13.2 51.1 15.4 10.5 11.187 35.6 15. m) Year-end March Mar03 110.545 8.448 22.474 Mar04 133.4 11.Financial Analysis of Maruti Udyog Ltd vehicles.265 150. on an average two vehicles roll out of the factory in every single minute. Financial Summary of Maruti Udyog Ltd.266 19.960 2.764 Total revenues YoY growth (%) Operating expenses Raw material expenses Excise and taxes Trading purchases Salaries and wages Manufacturin g expenses Managerial remunaration Operating profit YoY growth (%) Operating margin (%) 23.996 Mar07 192.278 70.065 12.265 85.0 20.372 0 0 0 0 0 2.295 131.529 119.384 23.357 Mar05 147.305 14.376 19.7 . with range of 11 models in 50 variants.531 Mar06 169.799 11.174 92.486 145.766 3.548 170.7 10. Maruti Suzuki fits every car-buyer's budget and any dream.393 0 0 0 0 0 9.137 8.6 15.6 8. The fact says that.807 27.
890 39.976 13.1 20.408 9.0 13.6 5.500 4.949 8.948 13.558 13.617 11.6 0 344 22.132 7.9 0 5.525 22.863 16.3 0 376 20.380 .0 15.700 13.500 11.535 11.5 23.535 57.5 5.513 34.8 2.380 10.7 3.609 32.081 11.292 4.047 9.914 4.698 6.6 8.8 4.421 270.4 0 360 13.Financial Analysis of Maruti Udyog Ltd Treasury income EBDITA EBDITA margin (%) Depreciation EBIT EBIT margin (%) Interest Pre-tax profit Pre-tax margin (%) Tax provision Effective tax rate (%) Adjusted net profit YoY growth (%) +(-) Extraordinary Inc/ (Exp) Reported net profit 3.890 13.7 27.863 15.186 13.7 2.1 11.524 32.5 7.461 11.4 0 204 17.854 17.704 11.1 4.568 13.4 17.277 29.237 32.487 20.7 6.387 11.5 4.421 8.777 3.7 4.661 434 7.
796 36.022 49.997 81.076 1.119 1.100 0 47.912 3.057 19.872 29.081 Mar07 1.964 50.594 Mar06 1.526 717 0 717 779 0 56.833 0 40.076 0 3.788 3.864 45.667 27.226 17 0 17 779 0 68.606 749 421 920 0 0 19.Financial Analysis of Maruti Udyog Ltd Balance sheet Year-end March Equity capital Reserves and surplus Shareholders funds Secured loans Unsecured loans Long term loans Net deferred tax liability Minority interest Capital employed Gross fixed assets Less accumulated depreciation Add capital work in progress Net fixed assets Mar03 1.531 31.022 65.796 40.781 67.445 79.445 34.359 Mar04 1.158 17.343 43.467 35.445 65.238 83.546 32.190 .445 53.794 Mar05 1.715 43.445 42.442 17 0 17 779 0 82.081 54.119 0 3.
114 3.238 .744 751 15.032 35.398 6.864 12.623 4.204 4.512 37.579 16.720 20.894 2.964 15.638 0 56.662 458 19.022 17.773 20.139 8.800 17.147 10.016 7.666 5.080 8.795 0 68.640 0 47.500 400 24.166 29.189 15.423 400 22.188 3.Financial Analysis of Maruti Udyog Ltd Investments Current assets loans/Advanc es Inventory Sundry debtors Cash and bank Loans and advances Other current assets Current liabilities and provisions Current liabilities Provisions Net current assets Miscellaneous expenditure Capital deployed 16.812 6.347 4.402 5.082 683 16.800 11.942 28.892 13.058 4.294 6.963 7.806 6.512 39.423 12.440 4.578 6.995 10.318 6.858 8.496 20.800 17.548 14.022 19.595 9.016 0 82.871 163 40.
568 339 2.049 Mar05 17.Financial Analysis of Maruti Udyog Ltd Cashflow statement Year-end March Net profit before tax extraordinary items Depreciation Interest expense Interest income Dividend income Provisions no longer required written back Provisions for contingencies Provisions for doubtful Mar03 7.487 376 4.500 Mar06 20.525 344 (761) (633) (1.854 204 3.698 Mar04 13.617 4.949 457 4.387 Mar07 22.069) 0 0 (723) (792) (720) 0 0 (826) (562) (54) 0 0 0 0 0 0 0 0 32 10 0 0 .
289 2.Financial Analysis of Maruti Udyog Ltd debts and advances Deferred revenue expenditure incurred Others Operating cash flow (Inc)/Dec in inventory (Inc)/Dec in debtors (Inc)/Dec in loans and advances/OC A Inc/(Dec) in trade and payables Operating free cash flow Direct taxes (Inc)/Dec in capex Investment Others Free cash flow Inc/(Dec) in equity capital Proceeds of short term borrowings Repayment of short term borrowings Repayment of long term 724 163 0 0 0 9 11.598 8.043 10.247) 2.031) (1.267) (2.527 108 16.524) (15.374 5.272 120 18.193 (2.825 (5.123 0 17 0 4.000) (15.520) 0 1.276 12.955 0 0 (133) (119) (2.052 3.427) - - (700) - .845 0 23.017) (232) (215) (1.958 0 119 1.922 0 76 (5.146) (151) (1.804) (2.335) (1.499 0 0 (7.330) (7.401) (4.130 1.994) (4.708) 1.376) - - (1.514 1.741 18.103) (6.301) 1297 (77) 1.353 27.186 473 (2.237) (18.694 15.185 2.948 0 27.030 26.176) (204) 899 (553) (1.
03 1.8 11.6 1.402 10.016 16.5 4.3 13.3 18.806 Key Ratios Year-end March Valuation ratios (x) P/E P/CF P/BV Mcap/Sales EV/Sales EV/EBDITA EV/Capital 2.04 1.4 2.2 3.722 (74) (1.163) 2.Financial Analysis of Maruti Udyog Ltd borrowings Interest paid Dividend Paid Net change in cash and cash equivalents Add total cash generation Closing cash and bank (472) (427) (7.578 2.3 3.9 5.578 9.562 (44) (1.892 (260) (578) 3.402 10.016 16.79 1.894 2.4 2.163) (6.36 1.3 2.6 17.3 FYO3 FY04 FY05 FY06 FY07 .294 14.1 6.6 2.0 4.4 14.294 14.0 1.9 3.4 1.7 20.772) 9.8 1.12 0.492) (443) (432) 7.2 2.7 9.0 7.
7 20.0 12.4 37.3 16.0 24.4 16.5 17.6 14.7 20.8 14.4 19.1 19.3 17.8 9.5 12. 5 14.9 21.4 13.6 10.7 10.3 22.5 13.9 270.5 22.0 14.9 20.2 23.6 20.4 39.0 9.7 14.1 17.3 14.4 16.7 23.6 15.0 16.8 22.4 6.8 99.8 24 24 31 31 31 63 52 60 60 60 .7 19.0 20.4 57.0 7.9 16.3 9.4 20.9 10.2 14.8 14.7 14.5 20.2 19.Financial Analysis of Maruti Udyog Ltd employed Growth ratios (%) Earnings growth Revenue growth Gross profit growth EBITDA growth Efficiency ratios Gross margin (%) EBDITA margin (%) EBIT margin (%) Pre-tax margin (%) Net margin (%) Profitability ratios Return on equity (%) Return on capital employed (%) Operational RoCE (%) Average collection period (Days) Inventory turnover (Days) Creditors (Days) 27.0 20.2 13.4 8.9 23.4 14.5 23.
78 0.58 1.3 2.68 0.41 0.88 1.43 1.44 1. Current Ratio: .73 0.3 2.3 2.11 1.87 Analysis and Interpretation of Key Ratios Liquidity Ratios 1.5 2.2 1.013 86.24 0.00087 65.80 1.03 0.06 1.07 37.03 0.40 1.08 18.32 1.85 1.00025 54.05 1.45 1.Financial Analysis of Maruti Udyog Ltd Fixed assets turnover (x) Liquidity ratios Current Ratio Quick Ratio Absolute Current Ratio Solvency Ratios Debt Equity Ratio Interest Coverage Ratio 2.
the lower the .It is increasing from 2003 till 2006 but has diminished in the year 2007.This is because current liabilities have increased more as compared to current assets in 2007. Current Ratio of Maruti Suzuki has been increasing from 2003 till 2006 but has decreased in the year 2007.Financial Analysis of Maruti Udyog Ltd Current ratio tells us the short. Quick Ratio: This ratio indicates the working capital limit of the company. The ratio has shown a considerable increase till 2006 but has declined in the year 2007. 3. However the debt ratio has first decreased and then increased. 5. 2. It indicates what proportion of equity and debt the company is using to finance its assets. This is responsible for the trend of the Debt Equity Ratio as well. Interest Overage Ratio: The interest coverage ratio is a measurement of the number of times a company could make its interest payments with its earnings before interest and taxes. Absolute Cash Ratio: This ratio tests the liquidity on an immediate basis as it tests for liquidity with the cash and near cash items only. the Equity ratio has been almost constant over the years.term financial position of the company. Solvency Ratios 4. This implies that the net worth of the company as a part of the total assets has remained almost same. The quick ratio of the company under observation is quite comfortable and healthy . Debt-Equity Ratio: It is a measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. As can be observed.
Return on Net Worth indicates how well a company leverages the investment in it. ROCE should ideally be higher than the rate at which the company borrows. otherwise any increase in borrowing will reduce shareholders' earnings. The ratio has risen considerably from 2003 to 2005 but has declined through 2006 and 2007. Profitability Ratios 6. The . Return on Capital Employed (ROCE) It is a ratio that indicates the efficiency and profitability of a company's capital investments. The net profit margin ratio is the most commonly used profit margin ratio. Net Profit Margin Ratio: The profit margin ratios state how much profit the company makes for every dollar of sales. Return on equity: This ratio indicates the returns on investment made by the shareholder of the company. Efficiency Ratios: 8. It may appear higher for startups and sole proprietorships due to owner compensation draws accounted as net profit. 7. The Interest Coverage Ratio has increased till 2005 but has diminished since then.Financial Analysis of Maruti Udyog Ltd ratio. ROCE has increased till 2005 but has diminished since then. the higher the company’s debt burden. Put another way.
required to pay fixed costs and profits. Gross profit ratio has been more or less same in the concerned period.Financial Analysis of Maruti Udyog Ltd ratio has shown a considerable rise since 2003 but has decreased in the financial year 2006-2007. 9. BIBLIOGRAPHY WEBSITES http://www.html .surfindia. Gross Profit Margin Ratio: A low profit margin ratio indicates that low amount of earnings. A low profit margin ratio indicates that the business is unable to control its production costs.com/automobile/maruti-udyog-ltd. is generated from revenues.
(2006).marutisuzuki.com/sect/maud.Financial Analysis of Maruti Udyog Ltd http://www.aspx BOOKS Kishore M. Financial Management. Financial Management .pdf http://www.indiainfoline.com/knowing-maruti-suzuki. (2007). Taxmann Allied Services Pvt Ltd Pandey I.M. Ravi.
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