Business valuation Report

FORMAT

 TATA MOTORS

 BUSINESS VALUATION REPORT

 A.JACKEYCHAN

 19MBA038
MASTER OF BUSINESS ADMINSTRATIONS

DEPARTMENT MANAGEMENT STUDIES

SRI MANAKULA VINAYAGAR ENGINEERINGCOLLEGE,
MADAGADIPET PUDUCHERRY
JUNE 2021
 CONTENTS

 Introduction
 Research Methodology
 Data Analysis
 Finding
 Suggestions
 conclusion

Introduction
Tata Motors Limited isIndian multinational automotive manufacturing
company, headquartered in Mumbai. Part of Tata Group, the company p
roduces passenger cars, trucks, vans, coaches, buses, sports cars,
construction equipment and military vehicles.
Formerly known as Tata Engineering and Locomotive Company
(TELCO), the company was founded in 1945 as a manufacturer
of locomotives. The company manufactured its first commercial vehicle
in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969.
Tata Motors entered the passenger vehicle market in 1988 with the
launch of the TataMobile followed by the Tata Sierra in 1991, becoming
the first Indian manufacturer to achieve the capability of developing a
competitive indigenous automobile.[5] In 1998, Tata launched the first
fully indigenous Indian passenger car, the Indica, and in 2008 launched
the Tata Nano, the world's cheapest car. Tata Motors acquired the South
Korean truck manufacturer Daewoo Commercial Vehicles Company in
2004 and purchased Jaguar Land Rover from Ford in 2008.
Tata Motors' principal subsidiaries include English premium car
maker Jaguar Land Rover (the maker of Jaguar and Land Rover cars)
and the South Korean commercial vehicle manufacturer Tata Daewoo.
Tata Motors has a bus-manufacturing joint venture with Marcopolo
S.A. (Tata Marcopolo), a construction-equipment manufacturing joint
venture with Hitachi (Tata Hitachi Construction Machinery), and a joint
venture with Fiat Chrysler which manufactures automotive components
and Fiat Chrysler and Tata branded vehicles.
Tata Motors has auto manufacturing and vehicle plants
in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad, and Pune in
India, as well as in Argentina, South Africa, Great Britain, and Thailand.
It has research and development centres in Pune, Jamshedpur, Lucknow,
and Dharwad, India and South Korea, Great Britain, and Spain. Tata
Motors is listed on the BSE (Bombay Stock Exchange), where it is a
constituent of the BSE SENSEX index, the National Stock Exchange of
India, and the New York Stock Exchange.
History of company
Tata Motors Limited (TML) is one of India’s largest Original Equipment
Manufacturers (OEMs) offering an extensive range of integrated, smart
and e-mobility solutions.

TML’s Commercial Vehicle (CV) offerings include sub-1 tonne to 55-

tonne Gross Vehicle Weight (GVW) trucks and small, medium and large
buses and coaches. TML’s Passenger Vehicle (PV) offerings include the
NEW FOREVER range that exemplifies the IMPACT 2.0 design
language across cars and utility vehicles and is developed using
pioneering technologies that are sustainable.

TML is also playing a leading role in proactively shaping the electric

mobility landscape in the country.

TML has a JV with Fiat Group Automobiles to manufacture passenger

cars, engines and transmissions for the domestic market, and a JV with
Cummins Inc. USA for the design and manufacturing of diesel engines.

Mission
We innovate mobility solutions with passion to enhance the quality of
life

Vision
By FY 2024, we will become the most aspirational Indian auto brand,
consistently winning, by

 delivering superior financial returns

 driving sustainable mobility solutions
 exceeding customer expectations, and creating a highly engaged
work force

Objective of study
"Building excellence in buying and servicing process, with an objective
to improve consumer's perception for the products. Distribution and
service network is strong, but focus is on improving dealership to
enhance consumer experience in sales and service.”

Research Methodology
Research definition
A careful consideration of study regarding a particular concern or
problem using scientific methods. According to the American
sociologist Earl Robert Bobbie, “Research is a systematic inquiry to
describe, explain, predict, and control the observed phenomenon.
Research involves inductive and deductive methods.”
Inductive research methods are used to analyse an observed event.
Deductive methods are used to verify the observed event. Inductive
approaches are associated with qualitative research and deductive
methods are more commonly associated with quantitative research.

Research Methodology Definition

Methodology is the systematic, theoretical analysis of the methods

applied to a field of study. It comprises the theoretical analysis of the
body of methods and principles associated with a branch of knowledge.
Typically, it encompasses concepts such as paradigm, theoretical model,
phases and quantitative or qualitative techniques. (Irony and Rose, 2005)
A methodology does not set out to provide solutions - it is, therefore, not
the same thing as a method. Instead, it offers the theoretical
underpinning for understanding which method, set of methods or best
practices which can be applied to specific case, for example, to calculate
a specific result.

Data collection
Primary data
The primary data are those which are collected a fresh and for the first
time and thus happen to be in original character. For this project primary
data was collected with the help of questionnaire.

Secondary data
Secondary data was collected from the book on consumer perception,
company profile, web site and market research.

Population
Population refers to the total set of observation that can be made. In the
research the population refers to the people living in Pondicherry state.

Sample Sampling Technique

Simple random sampling technique is a technique in which each unit of
the universe has equal chance to be selected in sample. Simple Random
sampling technique has been used to conclude this study.

Sampling Method
Convenience sampling method- Researcher has selected a sample of 150
respondents from each zone of India on the basis of availability as well
as preparedness of the respondents to respond without using any bias.

Sampling Unit
Each and every owners and users of bikes in India is the sampling unit
for this study

Sample size
A sample of 150 units has been selected. To give the wide coverage and
a Pondicherry perspective and dimension to the study.
Tools used for Analysis
 Ratios analysis

Introduction

Ratio analysis is a quantitative procedure of obtaining a look into a

firm’s functional efficiency, liquidity, revenues, and profitability by
analysing its financial records and statements. Ratio analysis is a very
important factor that will help in doing an analysis of
the fundamentals of equity.

Analysts and investors make use of the methods for ratio analysis to

study and evaluate the fiscal wellbeing of businesses by closely
examining the historical performance and monetary statements.

Comparative data and analysis can give an insight into the performance
of the businessover a given period of time by comparing it with
the industry standards. At the same time, it also measures how well a
business racks up against other businesses functioning in the same
sector.
Liquidity ratio

These ratios evaluate a business’ efficiency to settle its debts as and

when they become due, with its revenues or assets in the disposal.
Liquidity ratios cover quick ratio, current ratio, and the
working capital ratio.
Solvency ratio
Solvency ratios are also referred to as the financial leverage ratios.
These ratios will compare an organisation’s level of debt with assets,
earnings, and equity in order to determine the possibility of an
organisation to stay in operation over an extended period of time by
settling all its short and long-term debts and by paying coupon/interest
regularly. Solvency ratios include interest coverage ratios, debt-asset
ratios, and debt-equity ratios.
Profitability ratio
Profitability ratios indicate how efficiently a business will be able to
generate revenues and profits through its operations. Profit margins,
return on equity, return on assets, gross margin ratios, and return on
capital employed are good examples of profitability ratios.

Efficiency ratio
Efficiency ratios are also called as the activity ratios. These ratios
determine the efficiency of a business by using its liabilities and assets
to boost sales and optimise profits. Inventory turnover and turnover
ratios are examples of efficiency ratios.

Cash flow
The statement of cash flows, or the cash flow statement is a financial
statement that summarizes the amount of cash and cash equivalents
entering and leaving a company. The cash flow statement
(CFS) measures how well a company manages its cash position,
meaning how well the company generates cash to pay its debt
obligations and fund its operating expenses. The cash flow statement
complements the balance sheet and income statement and is a mandatory
part of a company's financial reports since 1987.1 In this article, we'll
show you how the CFS is structured, and how you can use it when
analyzing a company.

The Structure of the Cash Flow Statement

The main components of the cash flow statement are:

1. Cash from operating activities

2. Cash from investing activities
3. Cash from financing activities
4. Disclosure of noncash activities is sometimes included when
prepared under the generally accepted accounting principles .

These operating activities might include:

 Receipts from sales of goods and services

 Interest payments
 Income tax payments
 Payments made to suppliers of goods and services used in
production
 Salary and wage payments to employees
 Rent payments
 Any other type of operating expenses

How Cash Flow Is Calculated

Cash flow is calculated by making certain adjustments to net income by
adding or subtracting differences in revenue, expenses, and credit
transactions (appearing on the balance sheet and income statement)
resulting from transactions that occur from one period to the next. These
adjustments are made because non-cash items are calculated into net
income (income statement) and total assets and liabilities (balance
sheet). So because not all transactions involve actual cash items, many
items have to be re-evaluated when calculating cash flow from
operations.

As a result, there are two methods of calculating cash flow: the direct
method and the indirect method.

Direct Cash Flow Method

The direct method adds up all the various types of cash payments and
receipts, including cash paid to suppliers, cash receipts from customers,
and cash paid out in salaries. These figures are calculated by using the
beginning and ending balances of a variety of business accounts and
examining the net decrease or increase in the accounts.

Indirect Cash Flow Method

With the indirect method cash flow from operating activities is
calculated by first taking the net income off of a company's income
statement. Because a company’s income statement is prepared on
an accrual basis revenue is only recognized when it is earned and not
when it is received.

Net income is not an accurate representation of net cash flow from

operating activities, so it becomes necessary to adjust earnings before
interest and taxes (EBIT) for items that affect net income, even though
no actual cash has yet been received or paid against them. The indirect
method also makes adjustments to add back non-operating activities that
do not affect a company's operating cash flow.