Project Proposal No.

_______________
(To be assigned by the School) MBA

School of Management Studies INDIRA GANDHI NATIONAL OPEN

UNIVERSITY Proforma for Approval of Project Proposal (MS-100)

Enrolment No. : 192695950 Study Centre Code : 0769

Regional Centre Code : 29
Name of the Student : Akshay Kumar Singh

Address of the Student : KH. Ho.262,Gali No.24, Jagatpur Extension, Near Rama Public School.
Delhi-110084
E-mail Address : akshayraaajput@gmail.com

Title of the Project : FINANCIAL STATEMENT ANALYSIS OF ASHOK LEYLAND

Subject Area : Finance

Name of the Guide : Mr. Raj Sharma

Address of the Guide : 207B Shri Ram Nagar Shahdara Delhi -110032
Is the Guide an Academic Counsellor of Management Programme of IGNOU? No
If Yes, Name and Code of :
Study _________________________________________________________
Centre, the courses s/he is __________________________________________________________
counselling, and period __________________________________________________________

No. of Students currently working : 2

under the guide for MS-100

Signature of Student Signature of Guide

Date: Date :

Please do not forget to enclose the Project Proposal and signed Bio-data of the guide.

For Office Use only

Proposal Guide
(SIGNATURE OF MANAGEMENT FACULTY)
Approved Approved
Date ..........................................
Not Approved Not Approved
 PROJECT SYNOPSIS

FINANCIAL STATEMENT ANALYSIS OF ASHOK LEYLAND

Submitted By:

Akshay Kumar Singh

Enrollment No: 192695950

Under The Guidance Of:

Mr. Raj Sharma

Submitted To:

INDIRA Gandhi National Open University

In partial fulfillment for the award of the Master’s Degree in Business

Administration (Finance)
 INTRODUCTION

Financial Statement Analysis is the selection, evaluation and interpretation of the

financial data along with other potential information. Financial Statement Analysis
helps in financial decision making; it is also used to assist various issues like credit
policies, employee performance evaluation, efficiency of operations etc.

Ratio Analysis plays a very important role when it comes to financial statement
analysis. A ratio is expressed as “the quotient of two mathematical expressions, i.e.
it represents the relationship between two or more objects”. Ratio analysis is used
as a benchmark for evaluating the performance and financial position of a firm.
The accounting figures posted in a financial statement do not provide a clear
understanding of the financial position and performance of a business. These
accounting figures convey a meaningful understanding when they are related with
other important information. For example, a net profit of Rs 10 crore may look
impressive in the financial statements but it cannot help us in understanding the
clear position of a firm until it is related to company’s operations and investment.

Ratio Analysis helps in summarizing the large numbers in a financial statement

which helps in making a qualitative judgment about the financial position of a
firm. For example, to understand the liquidity of a company we calculate current
ratio. Current ratio is calculated as Current Assets divided by current liabilities.
This relationship between current assets and current liabilities is a yardstick which
provides a clear picture of a firm’s liquidity. A ratio reflecting a quantitative
relationship helps in forming a qualitative judgment.
 Ratio analysis is the most important tool of financial statement analysis. It is
used to analyse and interpret the financial position of a firm.

Ratios represent the relationship between two or more items of the financial
statements. With the help of ratio analysis, we can judge the financial health and
stability of a company. These ratios can be used widely and are immensely used
these days.

Liquidity Ratios are used by the firm to measure its ability to meet its current
obligations.

Leverage Ratios helps in financing the firm’s assets by showing the proportions of
debt and equity.

Activity Ratios tells about the firm’s efficiency of utilizing its assets.

Profitability Ratios help in knowing the overall effectiveness and performance of

the firm.
 Introduction of the organization

The origin of Ashok Leyland, a Hinduja group company can be traced to the
urge for self–reliance, felt by independent India. Pundit Jawaharlal Nehru, India's
first Prime Minister persuaded Raghunandan Saran, an industrialist, to enter
automotive manufacture. In 1948, Ashok Motors was set up in what was then
Madras, for the assembly of Austin Cars. The Company's destiny and name
changed soon with equity participation by British Leyland and Ashok Leyland
commenced manufacture of commercial vehicles in 1955.

Since then Ashok Leyland has been a major presence in India's commercial vehicle
industry with a tradition of technological leadership, achieved through tie–ups
with international technology leaders and through vigorous in–house R&D. Access
to international technology enabled the Company to set a tradition to be first
with technology. Be it full air brakes, power steering or rear engine busses, Ashok
Leyland pioneered all these concepts. Responding to the operating conditions and
practices in the country, the Company made its vehicles strong, over–engineering
them with extra metallic muscles. 'Designing durable products that make
economic sense to the consumer, using appropriate technology', became the
design philosophy of the Company, which in turn has molded consumer attitudes
and the brand personality.

The Hinduja Group is a transnational conglomerate that provides a wide range of

products in over fifty countries worldwide. Today, the Hinduja Group has become
one of the largest transnational business conglomerates in the world with
 diversified operations, spanning all the continents. The Group employs over
25,000 people and has offices in many key cities of the world and all the major
cities in India. Ashok Leyland vehicles have built a reputation for reliability and
ruggedness.

In the populous Indian metros, four out of the five State Transport
Undertaking (STU) buses come from Ashok Leyland. Some of them like the
double–decker and vestibule buses are unique models from Ashok Leyland,
tailor–made for high–density routes.

Product range of the company includes:

 Buses
 Trucks
 Engines
 Defence & Special Vehicles
 RATIONALE OF THE STUDY

The Automobile industry in India is one of the largest in the world. It

accounts for 7.1% of country’s GDP. The 2-wheeler segment with the market
share of 81% is the market leader of Indian Automobile Industry. Growing middle
class, growing interest of young population, growing interest of companies in
exploring the rural markets further aided growth of the sector. The overall
passenger vehicle segment constitutes of 13% market share.

India has strong export growth expectations for the near future. In 2019
overall Automobile exports grew by 1.91%. PV, commercial vehicles and 2-
wheelers registered a growth of 5.24%, 16.97%, 0.97% respectively. Several
initiatives by the government and major automobile players are expected to make
India a leader in 2-wheeler and 4-wheeler market in the world by 2022.

Ratio analysis is the most important tool of financial statement analysis. It is

used to analyse and interpret the financial position of a firm.

Ratios represent the relationship between two or more items of the

financial statements. With the help of ratio analysis, we can judge the financial
health and stability of a company. These ratios can be used widely and are
immensely used these days.
 PROBLEM STATEMENT

Analyze the fundamental and operational efficiency of ASHOK LEYLAND LTD

by examine various financial data like balance sheet & profit/loss A/c and with the
help of various ratio analysis.

OBJECTIVES OF THE STUDY

1- To examine the fundamental financial performance of ASHOK LEYLAND

LTD from the past data.
2- To analyze and to interpret the operational efficiency of ASHOK
LEYLAND LTD by comparing the balance sheet & profit/loss A/c.
3- To critically analyze the financial performance of ASHOK LEYLAND LTD
with the help of ratios.
 RESEARCH METHODOLOGY
Research methodology helps in solving the research problem systematically.
Research methodology is as important as research method. Research
methodology is the procedure used by the researchers for describing, explaining
and predicting their work. Research method consists of generating, collecting,
evaluating data. Collection of data is very important in any project; the success of
any project depends largely on the accuracy, time, money and efforts done to
collect the data. Without accurate data we cannot analyse the data and thus we
cannot complete the research work accurately.

There are 2 types of data collection methods available:

 Primary Data
 Secondary Data

The study is based on secondary data. However, the primary data is also collected
to fill the gap in the information.

1- Primary data is collected through regular interaction with the

officials of ASHOK LEYLAND LTD.
2- Secondary data is collected from annual reports, existing manuals
and other necessary record.

The data collection was aimed at study of working capital management of the

company.

Project is based on:

  Annual report of ASHOK LEYLAND LTD. 2017-18
Annual report of ASHOK LEYLAND LTD. 2018-19

Earnings per Share – EPS

Price to Earnings Ratio – P/E

Projected Earnings Growth – PEG

Price to Sales – P/S

Price to Book – P/B

Dividend Payout Ratio

Dividend Yield

Book Value

Return on Equity

Ratio analysis

Turnover ratio

Valuation ratio
 LIMITATIONS OF THE STUDY

Ratio Analysis plays an important role in revealing the financial position of the
business. Besides its advantages, it has some limitations that restrict its use.

Following are some of the limitations:

 LIMITED DATA: The project has basically completed with annual reports;
it just constitutes one part of data collection i.e. secondary. There were
limitations for primary data collection because of confidentiality.
 The period of study was 2017-19 financial years only.
 LIMITED AREA: It was difficult to collect the data regarding the
competitors and their Financial Information.
 LIMITED PERIOD: This project is based on 2 year annual reports.
Conclusions and Recommendations are based on such limited data. The
trends of last three years may or may not reflect the real working capital
position of the company.
 Bio-Data of Guide

Name: RAJ SHARMA

Phone: +91-8750785343

E-mail: rajs8243@gmail.com

Father’s Name: Mr. Lekhraj Sharma

Date of Birth: 10TH July 1988
Address: 207B Shri Ram Nagar Shahdara Delhi -110032

Working experience:

Designation Organisation Duration

SBK INFOTECH PVT. LTD.
April 2018 – till
Senior Accountant Office no-1/3098, Mandoli road,
now
Shahdara, Delhi -110032
ANKIT ENTERPRISES (MESLEEP) Mar 2012– Mar
Accountant
Sahibabad Ghaziabad 2018

Educational Qualifications:
YEAR OF
Percen
INSTITUTION COMPLETIO
t
PROGRAM N
Swami Vivekanand Subharti University
MBA (Finance) 70 2011
(Meerut Bypass Road, Meerut, Uttar Pradesh)
Deshbandhu College ,University of Delhi
B.com 52 2008
(Kalkaji Main Rd, Block E, Delhi 110019)

RAJ SHARMA