A PROJECT REPORT ON

ANALYSIS OF FINANCIAL RATIO

OF

TATA MOTORS COMPANY

BY
KARAN JADHAV
UNDER THE GUIDANCE OF

PROF : MUBINA ATTARI

SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY,PUNE

THROUGH
DACC COLLEGE BALEWADI PUNE (2020-2021)

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 CERTIFICATE
This is to certify that Mr. Karan Jadhav ,a bonafied student of
Dnyansagar Arts & commerce college has successfully completed the
project on “A STUDY ON ANALYSIS OF BALANCE SHEET, PROFIT AND
LOSS , RATIOS “ of Tata Motor Company India towards partial
fulfilment of the requirement of the course , BACHELOR IN BUSINESS
ADMINISTRATION (BBA) affiliated to the Savitr Bai Phule Pune
University.

External examiner Internal examiner Dr.Sajid Alvi (principle)

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 Declaration

To
The principal
Dnyansagar Arts & commerce college , Savitribai Phule Pune
University
Respected Sir,
I Karan Jadhav student of Dnyansagar Arts and commerce college
Pune , hereby declare that the project report on “ Tata Motors ”
written and submitted by me to Savitri bai Phule Pune University,
in partial fulfilment of the requirement of the degree of

Bachelor of business Administration under the guidance of Prof.

Mubina Attari is my original work

And the conclusion drawn are based on the material collected by

myself. To the best of my knowledge, the matter presented in

this project has not been submitted for Award of any degree,

diploma or membership either to this or any Institute or

University.

Date
Place

3
 INDEX

Sr no Particulars Pg no

1 About company 5

2 Company's journey 6

3 Objective of study 7

4 Data analysis 8

5 Conclusion 18

6 Reference 19

4
 About company

Company name : Tata Motors

Headquarters : Mumbai , India
Industry : Automotive
Founder : J R D Tata

Founded : 1945 , Mumbai

CEO : Guenter Butschek

5
 Company’s journey

Formerly it was known as Tata Engineering and Locomotive Company (TELCO).

Tata Motors has auto manufacturing and assembly plant and manufacturing
in jamshedpur, Pantnagar, Lukhnow, Sanand, Dharwad, and Pune in India, as
well as in Argentina, 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' principal subsidiaries
purchased the 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 Tata marcopolo ), a construction-equipment manufacturing joint venture
with Hitachi (Tata Hitachi construction), and a joint venture with Fiat which
manufactures automotive components and Fiat Chrysler and Tata branded
vehicles.

Founded in 1945 as a manufacturer of locomotives , the company

manufactured its first commercial vehicle in 1954 in a collaboration with , which
ended in 1969. Tata Motors entered the passenger vehicle market in 1988 with
the launch of the Tata mobile followed by the Tata siera in 1991, becoming the
first Indian manufacturer to achieve the capability of developing a competitive
indigenous automobile 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 is listed on the (Bombay Stock Exchange), where it is a constituent
of the BSE and NSE index , and the New york stock exchange. The company is
ranked 265th on the list of fortune global 500 world's biggest corporations as
of 2019..
On 17 January 2017, Natranjan Chandrasekaran was appointed chairman of the
company Tata group. Tata Motors increases its UV market share
to over 8% in FY2019.

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 Objective of study
Here we are going to study the balance sheet and profit and loss account of
Tata motors for the year 2018 and 2019 on the data provided by the balance
sheet and profit and loss account on the base of that data we are going to
calculate ratio current ratio , proprietary ratio, debt equity ratio , operating
profit ratio , gross profit ratio , interest coverage ratio and try to analyse and
study those ratio and interpret the ratio and find out the reason behind the
change in ratio.

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 Data analysis
o Balance sheet for the year 2018
o Profit and loss account for the year 2018
o Balance sheet for the year 2019
o Profit and loss account for the year 2019
o Combine balance sheet for the year 2018 and 2019
o Combine profit and loss account for the year 2018 and 2019

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Balance sheet of Tata motors 2018
Sources of funds
Share Capital 679.22
Reserves 19491.76
Total Shareholders Funds 20170.98
Secured Loans 2950.14
Unsecured Loans 17025.55
Total Debt 19975.69
Total Liabilities 40146.67
Applications of funds
Gross Block 43165.71
Capital Work In Progress 5196.6
Investments 16763.57
Current assets, Loans & Advances
Inventories 5670.13
Sundry Debtors 3479.81
Cash And Bank 795.42
Loans And Advances 10632.69
Total Current Assets 20578.05
Current liabilities and provisions
Current Liabilities 23110.61
Provisions 884.69
Net Current Assets -3417.25
Total Assets 40146.67

INTERPRETATION:-

From the above balance sheet for the year 2018 of Tata motors we can
interpret that the Tata motors are having the current ratio of ( 0.89 : 1 ) as the
ratio is a liquidity ratio that measures a company’s ability to pay short term
obligations or other due within one year. And here we are having proprietary
ratio of ( 0.51 : 1 ) from this we can consider that the company is having a good
proprietary ratio in the sense that the relationship between shareholders fund
and total assets is good enough. And last ratio we can conclude from the above
balance sheet is the debt equity ratio that is ( 0.99 : 1 ) this ratio is designed to
ascertain the firm’s obligations to creditors in relation to fund invested by the
owner.

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Profit and loss account of Tata motors 2018
Income
Sales Turnover 58689.81
Net Sales 57896.53
Other Income 2492.48
Stock Adjustments -842.05
Total Income 59546.96
Expenditure
Raw Materials 41842.86
Power & Fuel Cost 545.12
Employee Cost 3966.73
Selling And Administration Expenses 3682.22
Miscellaneous Expenses 3873.53
Total Expenditure 55647.56
Operating Profit 3899.4
Interest 1744.43
Gross Profit 2154.97
Depreciation 3101.89
Tax 87.93
Net Profit -1034.85

INTERPRETATION:-

From the above profit and loss account of Tata motors for the year 2018 we can
interpret the ratios such as operating profit ratio and gross profit ratio so we
had concluded the operating profit ratio ( 6.73 ) as the operating profit ratio
indicates the operational efficiency of the firm and is a measure of the firms
ability to cover total operating expenses and the gross profit ratio we had
concluded was ( 3.72 ) so the formative component in relationship between
gross profit and net sale , so higher the gross profit is a precursor to business
concern that the firm has high profitability.

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 Ratio for year 2018 Value
Current ratio 0.89

Proprietary ratio 0.51

Operating profit ratio 6.73

Interest coverage ratio 1.01

Gross profit ratio 3.72

Debt equity ratio 0.99

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Balance sheet of Tata motors 2019
Sources of funds
Share Capital 679.22
Reserves 21483.3
Total Shareholders Funds 22162.52
Secured Loans 3061.53
Unsecured Loans 17258.73
Total Debt 20320.26
Total Liabilities 42482.78
Applications of funds
Gross Block 45396.9
Capital Work In Progress 6286.59
Investments 16867.37
Current assets, Loans & Advances
Inventories 4662
Sundry Debtors 3250.64
Cash And Bank 1306.61
Loans And Advances 11487.73
Total Current Assets 20706.98
Current liabilities and provisions
Current Liabilities 22438
Provisions 1226.99
Net Current Assets -2958.01
Total Assets 42482.78

INTERPRETATION:-

From the above balance sheet for the year 2019 of Tata motors we can interpret
that the Tata motors are having the current ratio of ( 0.92 : 1 ) as the ratio is a
liquidity ratio that measures a company’s ability to pay short term obligations or
other due within one year. And here we are having proprietary ratio of ( 0.52 : 1
) from this we can consider that the company is having a good proprietary ratio
in the sense that the relationship between shareholders fund and total assets is
good enough.

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Profit and loss account of Tata motors 2019
Income

Sales Turnover 69202.76

Net Sales 69202.76

Other Income 2887.61

Stock Adjustments -144.69

Total Income 71945.68

Expenditure

Raw Materials 50471.09

Power & Fuel Cost 598.62

Employee Cost 4273.1

Selling And Administration Expenses 4185.41

Miscellaneous Expenses 3319.7

Total Expenditure 64654.54

Operating Profit 7291.14

Interest 1793.57

Gross Profit 5497.57

Depreciation 3098.64

Tax 378.33

Net Profit 2020.6

INTERPRETATION:-

From the above profit and loss account of Tata motors for the year 2019 we can
interpret the ratios such as operating profit ratio and gross profit ratio so we
had concluded the operating profit ratio ( 10.53 ) as the operating profit ratio
indicates the operational efficiency of the firm and is a measure of the firms
ability to cover total operating expenses and the gross profit ratio we had
concluded was ( 7.94 ) so the formative component in relationship between
gross profit and net sale , so higher the gross profit is a precursor to business
concern that the firm has high profitability.
.

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 Ratio for year 2019 Value
Current ratio 0.92

Proprietary ratio 0.52

Operating profit ratio 10.53

Interest coverage ratio 2.45

Gross profit ratio 7.94

Debt equity ratio 0.91

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Balance sheet of Tata motors 2019 2018
Sources of funds
Share Capital 679.22 679.22
Reserves 21483.3 19491.76
Total Shareholders Funds 22162.52 20170.98
Secured Loans 3061.53 2950.14
Unsecured Loans 17258.73 17025.55
Total Debt 20320.26 19975.69
Total Liabilities 42482.78 40146.67
Applications of funds
Gross Block 45396.9 43165.71
Capital Work In Progress 6286.59 5196.6
Investments 16867.37 16763.57
Current assets, Loans & Advances
Inventories 4662 5670.13
Sundry Debtors 3250.64 3479.81
Cash And Bank 1306.61 795.42
Loans And Advances 11487.73 10632.69
Total Current Assets 20706.98 20578.05
Current liabilities and provisions
Current Liabilities 22438 23110.61
Provisions 1226.99 884.69
Net Current Assets -2958.01 -3417.25
Total Assets 42482.78 40146.67

INTERPRETATION:-

Form the above combine balance sheet for the year 2018 and 2019 we can come
to an interpretation that there is no major change in the current ratio of both
the years with just ( 0.10 ) difference and Proprietary ratio is just similar to each
other and last coming down to debt equity ratio even though the debt equity
ratio is just similar to each other just with slight change in it.

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Profit and loss account of Tata motors 2019 2018
Income
Sales Turnover 69202.76 58689.81
Net Sales 69202.76 57896.53
Other Income 2887.61 2492.48
Stock Adjustments -144.69 -842.05
Total Income 71945.68 59546.96
Expenditure
Raw Materials 50471.09 41842.86
Power & Fuel Cost 598.62 545.12
Employee Cost 4273.1 3966.73
Other Manufacturing Expenses 2899.73 2592.18
Selling And Administration Expenses 4185.41 3682.22
Miscellaneous Expenses 3319.7 3873.53
Operating Profit 7291.14 3899.4
Interest 1793.57 1744.43
Gross Profit 5497.57 2154.97
Depreciation 3098.64 3101.89
Tax 378.33 87.93
Net Profit 2020.6 -1034.85

INTERPRETATION:-

Form the above combine profit and loss account for the year 2018 and 2019 we
can come up on an interpretation that the operating profit ratio of both the years
has an change to each other as there is growth of ( 6.73 ) to ( 10.53 ) from year
2018 to 2019 and from ( 3.72 ) to ( 7.94 ) from year 2018 to 2019 in the gross
profit ratio.

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Ratio for year 2018 and 2019 2018 (blue) 2019(red)

Current ratio 0.89 0.92

Proprietary ratio 0.51 0.52

Operating profit ratio 6.73 10.53

Interest coverage ratio 1.01 2.45

Gross profit ratio 3.72 7.94

Debt equity ratio 0.99 0.91

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 Conclusion
From the above data analysis and data interpretation we can know
that how much this ratio are helpful for us as an financial student , if
further in future we wish to invest our savings or our any type of
investment in any company so before that we can go through any
company’s ratio analysis to find out the growth of company compared
to its previous year and doing this data analysis we can come to an
conclusion where we have invest our precious money and weather
we don’t have to invest in any company all this decisions can be
clarified with just an simple ratio analysis.

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 References

➢ https://wap.business-standard.com/company/tata-motors-
560/financials-balance-sheet

➢ https://www.tatamotors.com/

➢ https://en.m.wikipedia.org/wiki/Tata_Motors

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