MRF tyres

MRF TYRES
FINANCIAL STATEMENT OBSERVATION

BY ANKITA GUPTA
IIEBM
Pune
Madras Rubber Factory (MRF) is an Indian Multinational tyre manufacturing company and the
largest manufacturer of tyres in India, also the sixth largest manufacturer in the world. It is
headquartered in Chennai, Tamil Nadu, India.] The company manufactures rubber products
including tyres, treads, tubes and conveyor belts, paints and toys. MRF also runs the MRF Pace
Foundation, Chennai and MRF Challenge in motorsport.

Financial management is all about capital mix, asset mix and distribution mix.

Capital Mix is related to: -

 The capital of the company

 Amount of capital
 Pattern of capital
 Cost of capital
 Implicit and explicit cost
 Own and borrowed capital
Asset mix is related to: -

 Investment inside and outside the business

 Current and Non-Current assets
 Return on assets
 Return on investment
Distribution mix is related to

 Amount of distributable profit

 Retained earnings

CAPITAL MIX
Particular
Years
s

2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020

share capital 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24
Long term 616.2 961.49 1102. 952.4 1198.8 616.18 214.28 441.32 250.15 216.66
214.3
borrowings 7 6

ASSET MIX
Particular
Years
s

2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020

Tangible 1316 1967.6 2907. 2964. 3421.6 4584.7 5474.3 6057.8 6751.3 8820.7
915.9
assets 8 2 5 4 5 4 2 2
Intangible 13.32 3.81 5.99 5.39 7.04 9.06 13.23 17.47 16.20 28.46
17.66
Assets
Capital Work 497.7 1042.3 414.6 359.1 626.67 1058.4 846.96 1078.8 1403.1 1734.5
286.2
in Progress 5 2 0 4 9 6
1111 1526 1645. 1795. 1799.7 1879.7 2392.9 2135.9 2361.6 2257.0
Inventories 650.5
6 3 4 2 2 2 3
Non current 148.5 77.67 72.69 71.54 84.68 151.76 1044.6 1080.5 1092.4 1078 26.53
Investment 7 4 7 2
Short Term 127.2 182.03 203.4 141.1 136.75 0.00 3.98 1.90 0.61 2.89
393.2
loans and 9 2 4
4
advances
Long Term 146.43 57.23 138.1 224.27 10.05 3.68 14.09 0.31 12.22
loans And 0.00 0.00 2
Advances
Other 6.52 7.22 22.13 34.72 329.98 242.43 181.53 176.88
current 0.00 0.00 224.70
assets
Other non 23.74 30.46 34.46 42.11 238.22 318.29 356.29 658.16 573.81
current 0.00 0.00
assets
Current 353.1 821.4 936.15 2102.7 2313.7 3054.0 2770.3 1513.6
0.00 0.00 0.00
Investments 7 8 5 8 2 9 5
Trade 811.5 1308.9 1454. 1556. 1708.5 1831.7 2392.9 2172.0 2950.9 2852.6
580
Receivables 1 1 2 2 7 3 9
Cash and 59.89 52.79 55.98 61.1 330.8 707.67 80.45 274.42 139.41 60.67 1106.8
Cash 1 5
Equivalents

DISTRIBUTION MIX
Particular
Years
s

2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020

353.9 619.42 572.3 802.2 897.89 2473.9 1451.0 1092.2 1096.8 1394.9
Profit & Loss 253
8 6 1 0 8 8 7 8
Dividend 10.6 21.20 10.60 10.6 12.7 21.2 21.2 42.41 25.45 25.45 25.45
Reserve and 1686 2293.5 2853. 3640. 4513.4 1686.4 1357.2 1116.6 981.91 820.05
1357
surplus 6 9

Charts showing the graphical representation of the data

given in the table above.

CAPITAL MIX
Share capita long term borrowings
1400
1200
1000 Chart
800
RANGE

600
400
200
0
2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020
Years

showing the financial data of MRF tyres of capital mix

 ASSET MIX
3500
3000
2500
2000
RANGE

1500
1000
500
0
2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020
Years

Tangiable Assets Intangiable assets Capital Work in progress

Inventories Trade Receivables Cash and Cash equivalents

Chart showing the asset mix of financial statement of the above data.

DISTRIBUTION MIX
5000
4500
4000
3500
3000 Profit & Loss
RANGE

2500 Dividend
2000 Reserve & surplus
1500
1000
500
0
2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020
Years

Chart showing the graph of distribution mix of the above data given.
 Observation
1. The company’s investment in tangible (investment inside the business) on march 2010 1316 which
increased to 8820.72. non-current investment on march 2010 77.67 crore which came down to
26.53. throughout the past 10 years it can be observed that company invested more inside the
business than outside the business.

2. The share capital remained same for past 10 years at 4.24cr. Whereas long term borrowing was
on march 2010 was 616.2cr which came down to 216.2cr. it shows that companies owned capital
was less than loaned capital. It also indicates that company is financially dependent.

3. reserve and surplus increased from 1686cr on March 2010 to 4513.4cr and it decreased to 820.5cr
in 2020, on the other hand long term borrowing decreased from 616.2 on march 2010 to 216.6 cr. It
can be observed that company had paid its debt out of reserve and surplus.

4. total non- current assets on march 2010 was 1,919.30cr which increased to 11,196.30cr. whereas
current assets on 2010 were 2102.25cr which increased to 7957.81cr.

This indicates that both current and non- current assets increased over the past 10years. In the asset
mix, current assets were more than non-current assets in 2010 and in 2020 current assets were less
than non-current assets.

5. the company increased the dividend % for shareholder over the past 10 years.

6. profit of the company increased from 353.98 on march 2010 to 1394.98 on march 2020. The
revenue from operation increased from 7462.74 on march 2010 to 15991.41 on march 2020. It
indicates due to increase in sales the company’s profit has also increased.

Conclusion – we can conclude that company improved its financial position. Over the past 10years
company also decreased its long-term borrowing. current and non-current assets have also shown a
great increment.