Intra firm Three Stage DuPont Analysis:

CALCULATION 2014 2015 2016 2017 2018

Margin= EAT/Sales (%) 6.37 7.43 7.92 9.50 9.42
Asset turnover= Sales/Total Assets 1.53 1.56 1.59 1.71 1.49
ROA (%) = Margin X Asset turnover 9.72 11.58 12.57 16.27 13.99
Equity multiplier= Total Assets/Equity 1.45 1.43 1.43 1.43 1.42
ROE= ROA X Equity multiplier 14.07 16.61 18.03 23.23 19.82

The margin for Maruti Suzuki is rising every year which is a very good sign for the growth of the
company. And the growth in margin for the company is due to rise in both the EAT and the sales of the
company.

The asset turnover ratio for the company is consistent through out without major fluctuations which is
due to a constant rise in both sales and assets of the company.

The equity multiplier for the company is constant and on the lower side which is positive for the
company.

Intra firm five stage DuPont Analysis:

Calculation 2014 2015 2016 2017 2018

Tax burden 0.76 0.80 0.71 0.74 0.72
Interest burden 0.95 0.96 0.99 0.99 0.97
Operating income margin 8.77 9.74 11.32 12.87 13.42
Asset turnover 1.53 1.56 1.59 1.71 1.49
Equity multiplier 1.45 1.43 1.43 1.43 1.42
ROE 14.07 16.61 18.03 23.23 19.82

The tax burden ratio of Maruti Suzuki seems healthy with an average tax rate of 25% with a little
fluctuation in 2015-16.

The interest burden ratio of Maruti Suzuki is has increased over the years from 2014 to 2018, initially the
company has 5% interest, but in 2016 and onwards this ratio improved a lot which also means that
company is not leveraged.

The operating income margin of the company is growing constantly which is a good sign for the
company as increase in this ratio signifies improvement in sales along with decrease in expenses of the
company.

The asset turnover ratio signifies that how much sales is obtained on the total assets present. So, a
larger ratio is good for a company. And this ratio is strong for Maruti Suzuki.
Inter Firm Three Stage Du Pont Analysis:

CALCULATION Maruti Suzuki Mahindra & Mahindra Tata Motors

Margin= EAT/Sales (%) 9.42 8.81 -1.74
Asset turnover= Sales/Total Assets 1.49 1.14 1.01
ROA (%) = Margin X Asset turnover 13.99 10.04 -1.76
Equity multiplier= Total Assets/Equity 1.42 1.55 2.87
ROE= ROA X Equity multiplier 19.82 15.57 -5.05

The margin for Maruti Suzuki as well as M&M is positive and good but for tata motors this ratio is
negative which shows that company is in loss.

Maruti Suzuki is having the highest asset turnover ratio among the 3 companies which is a good sign for
the company.

The equity multiplier ratio signifies, how much liabilities the company have in comparison to its total
assets and it is favourable for a company to have a low equity multiplier ratio. Maruti Suzuki have the
least equity multiplier ratio among the 3.

Inter Firm Five Stage Du Pont Analysis:

Calculations Maruti Suzuki Mahindra & Mahindra Tata Motors

Tax burden 0.72 0.75 1.09
Interest burden 0.97 1.04 -1.19
Operating income margin 13.42 11.24 1.34
Asset turnover 1.49 1.14 1.01
Equity multiplier 1.42 1.55 2.87
ROE 19.82 15.57 -5.05