A PROJECT REPORT

ON

“FINANCIAL STATEMENT ANALYSIS OF MARUTI SUZUKI”

SUBMITTED BY

SIMRAN NADAF

UNDER THE GUIDANCE OF

PROF. LAVAKUSH SINGH

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE

AWARD OF THE DEGREE OF

BACHELORS OF BUSINESS ADMINISTRATION

FOR THE ACADEMIC YEAR 2021-2022

THROUGH

Abeda Inamdar Senior College of Arts, Science & Commerce PUNE: 41100
 ACKNOWLEDGEMENT

It is indeed a matter of great pleasure and pride to be able to present this project
on“FINANCIAL STATEMENT ANALYSIS OF MARUTI SUZUKI”. It gives me
immense pleasure to extend my gratitude to those who have been instrumental in the
successful completion of my project.
I would like to thank the Pune University for the opportunity provided to me to do this
project and learn about the “FINANCIAL ANALYSIS OF MARUTI SUZUKI
COMPANY.”
I would also like to express my sincere gratitude towards Dr.Shaila Bootwala,
Principal of Abeda Inamdar Senior College, Pune and Prof. Ameena Sbooni, Head of
Department of Commerce and Management who has been a constant source of support
and encouragement during the past three years of my course in my college.

I am highly obliged to acknowledge the help and support I have received from Prof.
L.K. Singh, my guide who made sure I was provided with all the information about the
formats required to complete this project according to the standard set by the university.
I am really thankful to my parents and my colleagues too for their deep support.
Place: Pune SIMRAN NADAF

1
 DECLARATION

I hereby declare that the report titled, “A FINANCIAL STATEMENT ANALYSIS

OF MARUTI SUZUKI has been prepared by me during the year 2021-2022 under
the guidance of Prof. L.K. Singh, Abeda Inamdar Senior College, Pune.

I would declare that this project is conducted in the partial requirements of the
‘Bachelors of Business Administration’, degree of Pune University and has not been
previously submitted for the award of any degree to any institution or university.

I further declare that all facts and figures furnished in this report are the outcome of
my own research and findings.

I would also like to mention that this project is only for educational purposes.

PLACE: PUNE SIMRAN NADAF

DATE:

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 INDEX
CHAPTER NO. CONTENTS PAGE NO:
1 LIST OF TABLES 4
2 LIST OF FIGURES 5
3 INTRODUCTION 6-9
4 COMPANY PROFILE 10-19
5 REVIEW OF LITERATURE 20-23
6 RESEARCH METHODOLOGY 24-26
7 DATA INTERPRETATION 27-39
AND ANALYSIS
8 FINDINGS, SUGGESTIONS & 40-44
CONCLUSIONS
9 BIBLIOGRAPHY 45-46
10 ANNEXURE 47-51

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LIST OF TABLES
TABLE TITLE PAGE
NO: NO:

4.1 Gross profit ratio 28

4.2 Net profit ratio 29

4.3 Operating ratio 31

4.4 Proprietary ratio 32

4.5 Assets turnover ratio 34

4.6 Stock turnover ratio 36

4.7 Current ratio 37

4.8 Liquid ratio 38

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 LIST OF CHARTS
FIGURE TITLE PAGE
NO: NO:

4.1 Chart showing Gross profit ratio 29

4.2 Chart showing Net profit ratio 30

4.3 Chart showing Operating profit ratio 32

4.4 Chart showing Proprietary ratio 33

4.5 Chart showing Assets turnover ratio 35

4.6 Chart showing Stock turnover ratio 36

4.7 Chart showing Current ratio 38

4.8 Chart showing Liquid ratio 39

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1.1 INTRODUCTION
Analysis of financial statements means establishing relationships between the
items in financial statements for determining the financial strength and weakness
of the business. Therefore, the main purpose of financial statement analysis is to
utilize information about the past performance of the company in order to predict
how it will fare in the future. Another important purpose of the analysis of
financial statements is to identify potential problem areas and troubleshoot those.
The analysis of financial statements involves gaining an understanding of the
financial situation of an organization by reviewing the organization’s financial
statements. You can use three key financial statements – Income statement,
Balance sheet and statement of cash flows.
Analysis of these financial statements is often reported to the board of directors
and senior management. They use this information as input in their
decision-making process. External parties such as regulatory bodies and investors
also use this analysis for gaining insight into the organization.
If a business has plans to issue its financial statements to outside users such as
investors or creditors, the financial statements should be ideally formatted in
accordance with one of the major accounting frameworks. These frameworks allow
for some leeway in how financial statements can be structured, so statements
issued by different firms even in the same industry are likely to have somewhat
different appearances. Financial statements that are being issued to outside parties
may be audited to verify their accuracy.

Financial statements are records that provide an indication of the organizations

financial status.it quantitatively describes the financial health of the company.it
helps in the evaluation of companies prospects and risks for the purpose of making
business decisions.the objective of financial statements is to provide information
about the financial position, performance and changes in financial position of an
enterprise that is useful to wide range of users in making economic
decisions.financial statements should be understandable,relevant,reliable and
comparable. They give an accurate picture of a company's condition and operating
results in a condensed form. Analysis and interpretation of financial statements
helps in determining the liquidity position,long term solvency,financial
viability,profitability and soundness of a firm.There are four basic types of
financial statements: balance sheet,income statement,cash flow statements,and
statements of retained earnings.
The analysis of financial statements is a process of evaluating the relationship
between component parts of financial statements to obtain a better understanding
of firm financial position,analysis is process of critically examining the accounting
information given in financial statements.for the purpose of analysis,individual
items are studied;their interrelationship with other related figures is established.

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1.2 Objectives
● To understand, analyze and interpret the basic concepts of financial
statements of a company.
● Interpretation of financial ratios and their significance.
● To know about liquidity position
● To know about long term solvency
● To know about operating efficiency
● To know about overall profitability
● To know about inter-firm comparison

1.3 Users of Financial Statement Analysis

There are various users of financial statement analysis. They include:
Management of the company: The finance controller of the company does an
ongoing analysis of company’s financial statements, particularly operational
metrics such as the profit by product, cost per distribution channel, cost per
delivery etc. that aren’t seen by external entities.
Investors: The current, as well as prospective investors, scrutinize the health of the
organization by performing analysis of the financial statements. They do this to
understand about the company’s ability to continue as a going concern, issue
dividends, generate cash flows and to ensure that the company continues to grow at
least at the historical rate.
Creditors: A creditor or anyone for that matter, who has provided funds to the
company will be interested to know the ability of the company to pay back the debt
and their several cash management measures.
Regulatory authorities: In cases of publicly held companies, Securities and
Exchange Board of India (SEBI) examines their financial statements to see if the
statements conform to accounting standards as well as the SEBI rules and
guidelines.

1.4 Performing analysis of financial statements

Note: It’s important to keep in mind that if you are using financial statements from
more than one reporting period, each of the financial statements should be in a
similar format so that you have all the relevant data in a comparable format to
understand one period to other.

Each of the methods provided below gives visibility of variances, business trends,
and also flags various issues. They raise questions about the company, which is
required to be answered. Investigating the business, finding logical explanations
for the variances and performing changes based on the positive or negative trends
are the ultimate goals of the financial statement analysis.

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There are various methods and techniques to perform Financial Statement
Analysis. However, the most common methods of financial statement analysis
include:
● Horizontal
● Vertical analysis
● Ratio analysis

Horizontal Analysis: A horizontal analysis is a two-year comparison of analysis

of the financial statements and its elements. It is also referred to as trend analysis,
usually expressed in monetary terms and percentages.
This comparison provides analysts with insight into the aspects that could
contribute significantly to the financial position or profitability of the organization.
For instance, in 2015, a company earned INR 4 lakhs more than its previous year.
This increase in turnover appears to be a positive development.

Vertical Analysis: Vertical analysis is a financial statement analysis technique in

which every line items of the financial statements are listed as percentages, based
on a figure within the financial statement. The line items on the income statement
could be stated as percentages of the gross sales, while the line items on the
balance sheet could be stated as percentages of the total assets or liabilities.
And in case of cash flow, every inflow or outflow of cash could be stated as a
percentage of total cash inflows. By doing this analysis, insight would be created
about the changes in the allocation and distribution of the total assets.

Ratio Analysis: A ratio between two quantities is used for representing the
relationships between different figures on the profit and loss account, balance
sheet, cash flow statement or such other accounting records. It is a form of
Financial Statement Analysis, used for obtaining a quick indication of the
organization’s financial performance in various key areas. Ratio Analysis as a
financial analysis tool possesses many important features.

1.5 Need of the study

The interest of the various groups related to a firm is affected by the financial
performance of the firm.
So it is much of significance for these groups to analyze the financial performance
of the firm they are interested in. The study focus on overall financial position

8
particular Maruti Suzuki company during the specific period based on the selected
variables, which may interest not only for the respective companies in the industry
but also brings a process of development operational aspects of the entire industry.
The study is much important to the management from the point of decision-making
purpose, to identify the strength, weakness areas of the company and finally helps
to maximize the intrinsic value of the company.
1.6 Statement of problem
Financial performance analysis is the process of determining the operation and
financial characteristics of affirm from accounting and financial statements. The
goal of such an analysis is to determine the efficiency and performance of the
firm’s management, as reflected in the financial records and reports. From the
above point of view the researcher has undertaken an analysis of financial
performance of Maruti Suzuki India Limited Company to understand how
management of finance plays a crucial role in the growth.
1.7 Limitation of financial statements analysis
1 Comparing companies with different fiscal year end can be difficult.
2 Comparing companies with different accounting methods can be difficult.
3 Estimates are as accurate as input and depends on the integrity of the input data.
4 Takes into account only quantitative factors and ignore qualitative factors such as
efficiency,loyalty and honesty of the human resource.
5 Explanation of the results of the analysis involves human decision.
6 Data based on historical events which may not hold in future.
1.8 Attributes Of Good Financial Statements Analysis
1. Objectivity: Results of financial statement analysis should be analyzed
objectively to reduce the possibility of any behavioral bias to minimum.
2. Precision and Brevity: Financial statement analysis should done with precision
and should provide relevant information in concise form.
3. Understandability: Information provided by financial statement analysis should
be presented in such a way that the analysis fosters understandability.
4. Relevance: Analysis of financial statement should be relevant to the purpose of
the analysis. Financial statements used in analysis should be timely and should
have a predictive value.
5. Reliability: The information derived from the analysis of financial statement
must be free of material error and bias and should provide full and fair disclosure
of the financial performance and other relevant information.

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 CHAPTER:1
COMPANY PROFILE

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 INTRODUCTION
1.1 ORGANIZATION OVERVIEW
● Maruti Udyog Limited (MUL) was established in Feb 1981through an Act
of Parliament, to meet the growing demand of a personal mode of transport
caused by the lack of an efficient public transport system.
● Suzuki Motor Company was chosen from seven prospective partners
worldwide. This was due not only to their undisputed leadership in small
cars but also to their commitment to actively bring to MUL contemporary
technology and Japanese Management practices (which had catapulted
Japan over USAto the status of the top auto manufacturing country in the
world).
● A license and a Joint Venture agreement was signed between Govt of India
and Suzuki Motor Company (now SuzukiMotor Corporation of Japan) in
Oct 1982.

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an

Indian automobile manufacturer headquartered in New Delhi. It is a subsidiary of
the Japanese automotive manufacturer Suzuki Motor Corporation.
Maruti Suzuki India Limited is a holding company. The Company is engaged in the
manufacture, purchase and sale of motor vehicles, components and spare parts
(automobiles). The other activities of the Company comprise facilitation of
pre-owned car sales, fleet management and car financing.
Spread over a sprawling 297 acres with 3 fully-integrated production facilities, the
Maruti Udyog Plant has already rolled out over 4.3 million vehicles. In fact, on an
average, two vehicles roll out of the factory every minute. And it takes on an
average, just 14 hours to make a car. More importantly, with an incredible range of
11 models available in 50 variants, there's aMaruti Suzuki made here to fit every
car-buyer's budget. Anddream.
The company is engaged in he business of manufacturing,purchase and sale of
motor vehicles and spare parts(automobiles).the other activities of the company
include facilitation of preowned car sales,fleet management and car financing.they
have four plants,three located at palam Gurgaon road,Gurgaon, Haryana,and one
located at Manesar industrial town,Gurgaon,Haryana.
The company has nine subsidiary companies,namely maruti insurance business
agency ltd,maruti insurance distribution services ltd,maruti insurance agency
network ltd,maruti insurance agency services ltd, maruti insurance agency logistics
ltd, and j j impex (delhi) pvt ltd.
Maruti suzuki india lit was incorporated on february 24,1981 with the name maruti
udyog ltd.the company was formed as a government company,with suzuki as a
minor partner, to make a peoples car for middle class india. Over the years,the
company’s product range as widened, ownership has changed hands and the
customer has evolved.

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In october 2,1982 the company signed the license and joit venture agreement with
suzuki motor corporation, japan. In the year 1983, the company started their
productions and launched maruti 800. In the year 1984,they introduced maruti
omni and during the next year, they launched maruti gypsy in the market.in the
year 1987,the company forayed into the foreign market by exporting first lot of 500
cars to hungary.
In the year 1990, the company launched india's first three-box car,sedan. In the
year 1992,suzuki motor corporation,japan increased their stake in the company to
50%.in the year 1993,they introduced the maruti zen and in the next year they
launched maruti esteem in the market.
MILESTONES
● In the year 1994
Produced the 1 millionth vehicle since the commencement of production.
● 1995
Esteem 1.3L (1298 cc, 3 box car)VX
With the launch of second plant, installed capacity reached 200,000 units.
● 1996
Gypsy (E) (970cc, 4WD 8 seater)
Omni (E) (796cc, MUV, 8 seater)
Gypsy King (1298cc, 4WD, off road vehicle)
Zen Automatic (993cc, hatchback car)
Esteem 1.3L (1298 cc, 3 box Car)AX
Launch of 24-hour emergency on-road vehicle service.

● 1997
Esteem (1299cc, 3 box car) LX, VX and AX
New Maruti 800 (796cc,hatchback Car) Standard and Deluxe.
Produced the 2 millionth vehicle since the commencement of production.
● 1998
Maruti launches website as part of CRM initiatives
Zen D (1527 cc diesel,hatchback car)
Zen VX & Zen VX Automatic
New (omni & omni E) (796CC,MUV)
Launch of websites as part of CRM initiatives.

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 ● 1999
Maruti 800 EX (796cc,hatchback car)
Zen LX (993cc,hatchback car)
Zen VXi(993cc,hatchback car with power steering)
Omni XL (796cc, MUV high roof)
Baleno (1600cc,3 box car)
Wagon R
Launch of maruti - suzuki innovative traffic beat in delhi and chennai as
social initiatives.
● 2000
• First car company in India to launch a Call Center
• New Alto
•Altura, a luxury estate car
•IDTR (Institute of Driving Training and Research) launched jointly with the
Delhi government to promote safe driving habits.
● 2001
•Zen LXi
•Maruti True Value launched in Bangalore and Delhi
•Maruti Versa, India’s first luxury MPV
•Alto Spin LXi, with electronic power steering
•Alto Vxi
•Customer information centers launched in Hyderabad,Bangalore and Chennai
•Launch of versa.
● 2002
•WagonR Pride
•Esteem Diesel. All other variants upgraded
•Maruti Insurance. Two new subsidiaries started: MarutiInsurance Distributor
Services and Maruti Insurance Brokers Limited
•Alto Spin LXi, with electronic power steering.
Special edition of Maruti 800, India’s first color-coordinated car
• Maruti True value in Mumbai
•Maruti Finance in Mumbai with 10 finance companies
•Suzuki Motor Corporation (SMC) increases its stake in Maruti 54.2 percent.

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 ● 2003
New Suzuki Grand Vitara XL-7
• Redesigned and all-new Zen
•New upgraded WagonR
•Enters into partnership with State Bank of India
•Production of 4 millionth vehicle. Listed on BSE and NSE after a public issue
oversubscribed 10 times.
● 2004
Alto becomes India's new best selling car
•LPG variant of 'Omni Cargo'
•Versa 5-seater, a new variant
•Baleno LXi, a new variant
•Maruti closed the financial year 2003-04 with an annual sale of 472122 units,
the highest ever since the company began operations 20years ago.
● 2005
•The fiftieth lakh car rolls out in April, 2005
•Growth in overall sales by 15.8%.

PRODUCTION MILESTONES
i) 1st vehicle produced, December 1983
ii) 1,00,000 vehicles produced by August, 1986
iii) 5,00,000 vehicles produced by June, 1990
iv) 1st vehicle produced, December 1983
v) 1,00,000 vehicles produced by August, 1986
vi) 5,00,000 vehicles produced by June, 1990
vii) 10,00,000 vehicles produced by March, 1994
viii)15,00,000 vehicles produced by April, 1996
ix) 20,00,000 vehicles produced by October, 1997
x) 25,00,000 vehicles produced by March, 1999
xi) 30,00,000 vehicles produced by June, 2000
xii)35,00,000 vehicles produced by December 2001
xiii)40,00,000 vehicles produced by April, 2003
xiv)45,00,000 vehicles produced by April, 2004

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Maruti suzuki is one of india's leading automobile manufacturers and the market
leader in the car segment,both in terms of volume of vehicles sold and revenue
earned until recently, 18.28% of the company was owned by the indian government
And 54.2% by suzuki of japan.the indian government held an initial public offering
of 25% of the company in june 2003.as of may 10, 2007,Govt of india sold its
complete share indian financial institutions. With this,Govt of india no longer has
stake in maruti udyog.
Maruti udyog limited(MUL),established in 1981,though the actual production
commenced in 1983 with the maruti 800, based on the suzuki alto kei car which at
the ti e was the only modern car available in indias its only competitors the
hindustan ambassador and premier padmini were both around 25 years out of date
that point.through 2004, maruti has produced over 5 million vehicles, maruti are
sold in indias and various several other countries,depending upon export
orders.cars similar to marutis are sold by suzuki and manufactured in pakistan and
other south asian countries.
The company annually exports more than 50000 cars and has an extremely large
domestic market in india selling over 730000 cars annually. Maruti 800, till 2004,
was the indias largest selling compact car eversince it was launched in 1983. More
than a million units of this car have been sold worldwide so far. Currently,maruti
alto tops the sales charts and maruti swift is the largest selling in A2 segment.
Maruti Suzuki has 3,598 sales outlets across 1,861 cities in India. The Brand Trust
Report published by Trust Research Advisory, a brand analytics company, has
ranked Maruti Suzuki in the thirty-seventh position in 2013 and ninth position in
2019 among the most trusted brands of India.
Maruti is clearly an “employer of choice” for automotive engineers and young
managers from across the country.nearly 75000 people are employed directly by
maruti and its partners.
Its geographical segments include the domestic segment, which includes sales to
customers located in India, and the overseas segment, which includes sales to
customers located outside India. The Company's product portfolio includes Alto
800, Alto K10, Wagon R, Celerio, Ritz, Swift, DZire, Ertiga, Omni, Eeco, Gypsy,
Ciaz, etc.
Its service offerings include Maruti Finance, True Value, Maruti Genuine Parts,
Maruti Genuine Accessories, Maruti Suzuki Auto Card and Maruti Driving School.
It has approximately five plants, located in Palam Gurgaon Road, Gurgaon,
Haryana, and at Manesar Industrial Town, Gurgaon, Haryana, with an installed
capacity of over 1.5 million vehicles per year.

Maruti Suzuki - Recent News

Maruti Suzuki sees 'much better' 2021 as economy rebounds: Chairman
Maruti Suzuki sales increase 1.7% to 1,53,223 units in November.

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 Startup Name Maruti suzuki india limited

headquarters New delhi

industry automotive

founded 24 february,1981

founder Government of india

CEO kenichi ayukawa

parent Suzuki motor corporation

Area served india

website www.marutisuzuki.com

Maruti Suzuki - Logo and its Meaning

The present variant of Suzuki logo is designed in red and blue colors. The red color
(the letter S of Suzuki) represents passion, integrity and tradition, while the
blue(the letter M of Maruti) stands for excellence and grandeur.

Maruti Suzuki - Joint Ventures

Relationship between the Government of India, under the United Front (India)
coalition and Suzuki Motor Corporation over the joint venture was a point of
heated debate in the Indian media until Suzuki Motor Corporation gained the
controlling stake. This highly profitable joint venture that had a near monopolistic
trade in the Indian automobile market and the nature of the partnership built up till
then was the underlying reason for most issues.

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The success of the joint venture led Suzuki to increase its equity from 26% to 40%
in 1987, and to 50% in 1992, and further to 56.21% as of 2013. In 1982, both the
venture partners entered into an agreement to nominate their candidate for the post
of Managing Director and every Managing Director would have a tenure of five
years.
Maruti Suzuki - Business Model
Maruti Suzuki's product range extends from entry level small cars like Alto 800,
Alto K10 to the luxury sedan Ciaz. Other activities include facilitation of
pre-owned car sales fleet management, car financing. Its Business Segments are
divided into : Operating Income from sales of cars and Interests from
Investments.Maruti Suzuki offers 17 models of cars

Maruti Finance
History
Maruti finance was launched in january 2002 with an objective to increase the
maruti car sales by providing organized fiance across the country and also to
consolidate the car finance market there by giving the finance partners economies
of scale and preferred financier status. In a market where more than 80% of cars
are financed, maruti. This as been found to be a major driver in converting a maruti
car sale in certain cases. Finance is one of the major decision drivers in car
purchase.
Maruti was initially formed with eight finance partners namely ICICI Bank,
HDFC Bank, Maruti Countrywide(MCW), citicorp maruti finance
limited(CMFL),Kotak Mahindra Primus Limited(KMPL), Sundaram Finance
Ltd(SFL), ABN AMRO Bank and standard chartered bank.
It was introduced across the country in a phased manner with the final launch in
january 2004 in the north i market. MF is now available in all locations across the
country except for a few locations in the north east.

Current Status
After consolidation in the market ABN AMRO bank and standard chartered bank
has excited the maruti finance consortium. Currently we have six players under
maruti finance.

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 Vision ,mission and core values of maruti suzuki
vision:-
Vision of any company is those values on which company works.as the maruti
udyog limited(MUL) is started by government initiatives it tends to be more
consumer oriented and hence cost-effective,but on the other hand suzukis
participation ensures not only need of profit, but the need of maximum profit. The
only way of nora's dilemma of selecting principles for the companies working
vision was to maximize profit and sales and hence maruti udyog limited(MUL)
declared its vision as:-“ the leader in the indian automobile industry, creating
customer delight one and shareholders wealth two eventually become pride of
india.customer delight one is making sure that performance,after sales service and
customer are best and beyond expectations, shareholders wealth two is the prime
concern for running business smoothly.maruti udyog limited (MUL) knows this
and understands”customer Is king”,he can change the future of any company hence
goes companies brand line:COUNT ON US!

MISSION:-
Mission is thestatement of any organizatios purpose, what is what to accomplish in
the larger environment and its goal which are specific, realistic, and
motivating.missions are described over visions and visions demand certain
objectives.the main objectives/missions of maruti udyog limited are:-

1 Modernisation of indian automobiles industry.

2 Developing cars faster and selling for less.
3 Production of fuel-efficient vehicles to conserve scare resources.
4 Production of large number of motor vehicles which are necessary for the
economic growth.
5 Market penetration, market developments,similar product development and
diversification.
6 Parter relation management,value chain,value delivery networks.

Core values:-
● Customer obsession
● Fast,flexible and first mover
● Innovation and creativity
● Networking and partnership
● Openness And learning

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 ● Objectives

The objectives of maruti finance was:

To consolidate the car finance market.
To provide organized finance across the country.
To provide best transparent deal to the customer.
To bring additional revenue to the dealer.
To provide customized loan schemes to the customer based on his requirements.
To provide transparency in the finance deal to the end customer.

19
 CHAPTER-2
REVIEW OF LITERATURE

20
REVIEW OF LITERATURE
Mr. V. Elayabharathi, Mrs. D. Praveena, Mrs.
S. Rathika (2019), “a study on financial performance analysis with reference to
TNSC Bank, Chennai”. They analyzed the financial performance of the TNSC
APEX CO-OPERATIVE BANK. They suggested the bank needs to maintain
proper receivables. The performance should be continued and improvement to be
made in order to attain the objectives of the concern which pave the way to have
the result in attaining the competitive advantage.Lam Weng Hoe, Lam Weng
Siew,Liew Kah Fai (2019), “a study on performance analysis on
Telecommunication companies in Malaysia with TOPSIS model”. The objective of
this paper is to propose a conceptual framework to evaluate, compare and rank the
financial performance of companies in Malaysia.They concluded that the best ideal
and worst ideal solutions for each financial ratio can serve as the benchmark to the
telecommunication companies for further improvement.
Dr. D. Pathma Priya (2019), “a study on financial performance analysis of HDFC
limited”. The study was made to analyze the financial performance of HDFC
limited for the period of five years and to offer suggestions based on their findings
of the study. She concluded that the financial performance of the HDFC Limited is
at satisfactory level and suggested concentrating on getting back the funds from
debt to equity funds and also reducing long term financial obligations.

This is to provide a review of research work relevant to Auto (car) Industries as

well as articles in journals and earlier studies that focused on the financial
performance of various companies.
Sharma (2008): She analyzed the sales and capabilities of different firms in the
automobile industries in her study “Indian Automobile Industry''. Her study reveals
that due to rising disposable income and increasing consumerism the automobile
sector is growing. The global automakers will continue to allocate a rising
proportion of the FDI in India, growing auto – manufacturing first and then auto
engineering R&D services. Many companies are aware of the fact that their labor
cost advantage is beginning to gradually destroy as both the shop floor and
management wage costs rise. However, they are optimistic that productivity
improvements through lower-cost automation and improved management
efficiency will compensate for rising direct wage costs.
Mukherjee and Sastry (1996) discuss that focusing on passenger cars in rural and
semi-urban areas is extremely low and could provide fresh markets. They have a
thought that new entrants will have to deal with the uncertainty of demand,
different and evolving customer needs, a relatively poor supplier base, a market
crowded with competition and industry-wide capacity shortages. They see the
Indian prospect emerging as a significant manufacturing base for exports. They
summarized that in the high price-sensitive market, reduction of prices because of
lower duties and taxes and progressive indigenization, and rising middle-class
incomes are likely to further increase industry growth rates.

21
Pillai (2009)quoted that car sales are getting into a steady stage, in the month of
December 2008. In spite of the general sink in the automobile market, the used car
segment has not taken much of a beating. Many of the dealers have said steady
sales in December 2008, contrary to the negative sales in the previous few months.
This is attributed to the package announced by the Government of India for the
automobile industry in terms of reduction in the excise duty of cars, and lucrative
packages announced by the car manufacturers.
As per Kotwal (2009), face off buyers now prefer to have cars with the space,
comfort, and luxury of a mid-size sedan. With the growing affluence and
technological advancement, they develop a certain maturity in taste, as evidenced
by the growing popularity of the Indian Hatchback market. The “third box” or the
boot space does not seem to have equal importance, which it once had. Many
customers buy cars with space and comfort, less theboot, as it is easy to negotiate
in our ever-increasing crowded cities. That is where a premium hatchback
commands respect in its segment. Though they cost more money, customers buy
them for the practicality and comfort they offer, without sacrificing the feel-good
factor.
Kumar (2009) in ‘Business Manorama’ and “Auto Focus” quoted identically in
The Hindu (2009) that the passenger car market is coming out of the economic
slowdown phenomenon being witnessed all over the World. He also reported that
manufacturers have adopted a strategy to introduce new and modified editions of
the existing models in the market in the coming months, to smarten the market,
which gives a positive signal to the car industry in general. Because of several
measures implemented by the Reserve Bank of India to support the economy and
boost up the demand, Indian banks have reduced the interest rate for car loans,
which gives hope for the industry. While the current generation banks in the private
sector concentrate their car financing activities in the cities, Public Sector Banks
are turning the heat on, in the small and medium towns and rural areas, where they
have more coverage and influence, as quoted by Ajit (2009).
Kale (2011): He reported in his paper “Sources of Innovation and Technology
Capability Development in the Indian Automobile Industry”, the Indian automobile
industry has shown significant improvements in technology and remarkable growth
in the last decade. The Indian auto industry comprises local firms with indigenous
design and development capability, well established global brands and has
marketing presence in India as well as other emerging markets. The study points
out that the industrial policy of the Indian Government secured the development of
basic capabilities but restricted innovative capability development in auto
manufacturing. This paper reveals that key attributes of firm ownership such as
managerial vision and diversified nature of the business, helped firms of India in
the development of innovative capabilities.
Ray Sarbapriya (2012), this study tries to evaluate the performance of the
automobile industry in India in terms of several financial indicators, sales trends,
production trends, export trends, etc. for the period of 2003-04 to 2009-10. The
result suggests that the auto industry has been passing through turbulent phases
characterized by enhanced debt burden, low utilization of assets, and above all,

22
huge liquidity crunch. The key to success in the industry is to improvise labor
productivity, labor flexibility, and capital efficiency.
Jagathy (2011): Globalization and liberalization, with the entry of many
prominent foreign manufactures, changed the entire automobile scenario in India,
since the early 1990s. World Leaders in auto manufacturing companies have set up
their manufacturing units in India in a joint venture with their Indian counterpart
companies, by making use of the Foreign Direct Investment Policy of the
Government of India.These manufacturers started capturing the hearts of Indian
customers brilliantly with their choice of technological and innovative product
features, with quality and reliability. With the multiplicity of options available to
the Indian passenger car buyers, it drastically changed the way the car purchase
scenario in India and particularly in the State of Kerala. This transformed the
automobile scene significantly from a sellers’ market to buyers’ market. The prime
motive of this paper is to come up with the identification of possible parameters
and framework development that influence the consumer purchase behavior
patterns of passenger car owners in the State of Kerala, so that further research
could be done, based on the framework and the identified parameters.
Shurveer S. Bhanawat(2011) this study "Impact of Financial Crisis on The
Financial Performance of The Indian Automobile Industry" India is a country with
diversity in culture and religion, strong in will and manpower, large in size and
opportunities has become a highly wooed automobile market. On the analyses of
the t-Test and Analysis of Variance, it was evaluated that the impact was not
significant which proves that though the global economies are impacted by the
recession, the Automobile Sector of India showed resilience and was not affected
significantly by the recession.
Dharmaraj and Kathirvel (2013), stated that the Auto Industry of India marked a
new journey in 1991 with the financial revolutionary New Industrial Policy Act
1991, opening an automatic route which allowed 100 percent Foreign Direct
Investment (FDI). Here, an attempt is made to find the effect of FDI on the
financial performance of the Indian Automobile Industry. For this purpose, 16
companies were selected and analyzed through various financial ratios. Descriptive
statistical tools like Mean, Standard Deviation and Students are paired t' test was
used to test the hypothesis. Liquidity analysis showed that little changes and
profitability analyses showed an increasing trend during post-FDI when compared
to pre-FDI. Efficiency analysis showed the companies are efficiently utilizing the
available resources during post-FDI as compared to pre-FDI. It is summarized that
foreign direct investment in India makes a positive impact on the financial
variables of the Automobile Companies.

23
 CHAPTER:3
RESEARCH METHODOLOGY

By

24
Meaning of Research
Redman and mory define research as a systemized effort to gain new
knowledge.”Some people consider research as a movement, a movement from the
known to the unknown.
Research is an academic activity and as such the term should be used in a technical
sense.according to clifford woody,research comprises defining and redefining
problems,formulating hypothesis or suggested solutions; collecting,organizing and
evaluating data; making deductions and reaching conclusions; and at last carefully
testing the conclusions to determine whether they fit the formulating hypothesis.

Objectives of Research

The purpose of research is to discover answers to Questions through the

application of scientific procedures. *the main aim of research is to find out the
truth which is hidden and which has not been discovered as yet. *though each
research study has its own specific purpose.
The main objectives of this research was to:-
1. To study about -maruti Suzui i.e. when it was established , why it was
established and by whom it was established, financial structure,
(organizational structure etc.
2. To study about the marketing mix and the strategies adopted by -maruti
Suzui in order to cater the needs of the people and also to face tough competition in
the market since after the globalization of the Indian economy many competitors
have grown and tried to undermine the monopoly created by -maruti Suzui.
3. To study the strategies adopted by -maruti Suzui due to which they are able
to dominate the Indian automobile Sector for the last three decades.

Significance of Research
“All processes are born of inQuiry. Doubt is often better than overconfidence, for it
leads to inquiry and inquiry leads to invention.” Is a famous Hudson Maximum in
context of which the significance of research can well be understood. Increased
amounts of research make progress possible.
Research inculcates scientific and inductive thinking and it promotes the
development of logical habits of thinking and organization.
The role of research in several fields of applied economics, whether related to
business or to the economy as a whole, has greatly increased in modern times.The

25
increasingly complex nature of business and government has focused attention on
the use of research in solving operational problems. Jesearch, as an aid to
economic policy, has gained added importance, both for government and business.

Research Methodology
Research methodology is a way to systematically solve the research problem. It
may be understood as a science of studying how research is done scientifically. In
it we study the various steps that are generally adopted by a researcher in studying
his research problem along with the logic behind them. It is necessary for the
researcher to know not only the research methods or techniques but also the
methodology.

Data Collection Source

Information for this project was collected primarily through secondary sources.The
data collected from the secondary sources are called Secondary data.
Secondary Data: Any data, which have been gathered earlier for some other
purpose, are secondary data in the hands of the researcher. *those data collected
first hand, either by the researcher or by someone else, especially for the purpose
of the study is known as primary data.
The data collected for this project has been taken from the secondary source.
Source, of secondary data are :-
● Internet
● magazines
● publications
● Newspaper
● Brochures

26
 CHAPTER:4
DATA INTERPRETATION
AND ANALYSIS

27
Profitability ratios
The profitability ratio measures the overall performance and effectiveness of the
firm.
Gross profit ratio
Gross profit ratio is the ratio of gross profit to net sales i.s. sales less sales returns.
The ratio thus reflects the margin of profit that a concern is able to earn on its
trading and manufacturing activity. It is the most commonly calculated ratio. It is
employed for inter-firm and inter-firm comparison of trading results. Gross profit
is what is revealed by the trading account. It results from the difference between
net sales and cost of goods sold without taking into account expenses generally
charged to the profit and loss account.
Table 4.1
year Gross profit sales ratio

2016 11718.6 36618.4 32

2017 14678.3 35587.1 41.24

2018 19633.9 43587.9 45.04

2019 22435 43700.6 51.33

2020 26076.9 49970.6 52.18

INFERENCE:
The above table shows the Gross Profit Ratio position of the Maruti Suzuki India.
The Gross Profit Ratio was ranges from32 to 52.18 during the study period 2016 to
2020

28
Figure 4.1

2016 2017 2018 2019 2020

YEAR

Net Profit Ratio

Net profit ratio (NP ratio) expresses the relationship between net profit after taxes
and sales. This ratio is a measure of the overall profitability net profit is arrived at
after taking into account both the operating and non-operating items of incomes
and expenses. The ratio indicates what portion of the net sales is left for the owners
after all expenses have been met.
Net profit ratio
Net profit=net profit/sales*100
Table 4.2
year Net profit sales ratio

2016 2288.6 36618.4 63.24

2017 1635.2 35587.1 4.60

2018 2392.1 43587.9 5.49

2019 2783 43700.6 6.37

2020 3711.2 49970.6 7.43

29
 INFERENCE:
The above table shows the Net profit ratio of the Maruti Suzuki India Limited . The
Net profit ratio was ranges from 63.24 to 7.43 during the study period 2016 to
2020
Figure 4.2

2016 2017 2018 2019 2020

YEAR

Operating Ratio

30
The operating ratio is a financial term defined as a company's operating expenses
as a percentage of revenue. This financial ratio is most commonly used for
industries which require a large percentage of revenues to maintain operations,
such as railroads. In railroading, an operating ratio of 80 or lower is considered
desirable. The operating ratio can be used to determine the efficiency of a
company's management by comparing operating expenses to net sales. It is
calculated by dividing the operating expenses by the net sales. The smaller the
ratio, the greater the organization's ability to generate profit. The ratio does not
factor in expansion or debt repayment. Alternatively, it may be expressed as a ratio
of sales to cost. In such cases a higher ratio indicates a better ability to generate
revenue.
Operating ratio
Operating ratio=operating ratio/sales*100

Table 4.3
Year Operating profit sales ratio

2016 3638.5 36618.4 9.94

2017 2513 35587.1 7.06

2018 4229.6 43587.9 9.70

2019 5095.9 43700.6 11.66

2020 6712.9 49970.6 13.43

INFERENCE:
The above table shows the operating profit ratio position of the Maruti Suzuki
India Limited. The operating profit ratio was range from 9.94 to 13.43 during the
study period 2016 to 2020

Figure 4.3

31
 2016 2017 2018 2019 2020
YEAR

Proprietary Ratio
The proprietary ratio (also known as the equity ratio) is the proportion of
shareholders' equity to total assets, and as such provides a rough estimate of the
amount of capitalization currently used to support a business. If the ratio is high,
this indicates that a company has a sufficient amount of equity to support the
functions of the business, and probably has room in its financial structure to take
on additional debt, if necessary. Conversely, a low ratio indicates that a business
may be making use of too much debt or trade payables, rather than equity, to
support operations (which may place the company at risk of bankruptcy).

Proprietary ratio
Proprietary ratio=shareholders fund/total tangible assets
Table 4.4
year Shareholders fund Total tangible assets ratio

2016 13867.5 14037.7 0.98

32
 2017 15187.4 16265.7 0.93

2018 18578.9 19968.1 0.93

2019 20978 22663.1 0.92

2020 23704.2 23884.4 0.99

Source: Computed

INFERENCE:
The above table shows the proprietary ratio position of the Maruti Suzuki India
Limited. The proprietary ratio ranged from 0.98 to 0.99 during the study period
2016 to 2020.
Figure 4.4

2016 2017 2018 2019 2020

YEAR

Assets Turnover Ratio

Asset turnover is a financial ratio that measures the efficiency of a company's use
of its assets in generating sales revenue or sales income to the company.
Companies with low profit margins tend to have high asset turnover, while those
with high profit margins have low asset turnover. Companies in the retail industry
tend to have a very high turnover ratio due mainly to cutthroat and competitive

33
pricing. The ratio of the value of a company’s sales or revenues generated relative
to the value of its assets. The Asset Turnover ratio can often be used as an indicator
of the efficiency with which a company is deploying its assets in generating
revenue.

Asset turnover ratio

Total asset turnover ratio=sales/net Assets
Table 4.5
year sales Net sales ratio

2016 36618.4 14037.7 2.60

2017 35587.1 16265.7 2.19

2018 43587.9 19968.1 2.18

2019 43700.6 22663.1 1.92

2020 49970.6 23884.4 2.09

INFERENCE:
The above table shows the Assets Turnover Ratio position of the Maruti Suzuki
India Limited . The Assets Turnover Ratio ranges from 2.60 to 2.09 during the
study period 2016 to 2020

34
Figure 4.5

2016 2017 2018 2019 2020

YEAR

Stock turnover ratio ( Inventory Turnover Ratio)

The Inventory turnover is a measure of the number of times inventory is sold or
used in a time period such as a year. The equation for inventory turnover equals the
cost of goods sold or net sales divided by the average inventory. Inventory turnover
is also known as inventory turns, merchandise turnover, stock turn, stock turns,
turns, and stock turnover.Increasing inventory turns reduces holding cost. The
organization spends less money on rent, utilities, insurance, theft and other costs of
maintaining a stock of goods to be sold.Reducing holding cost increases net
income and profitability as long as the revenue from selling the item remains
constant.
Items that turn over more quickly increase responsiveness to changes in customer
requirements while allowing the replacement of obsolete items. This is a major
concern in fashion industries.When making comparisons between firms, it's
important to take note of the industry, or the comparison will be distorted. Making
comparisons between a supermarket and a car dealer will not be appropriate, as
they sell fast moving goods such as sweets, chocolates, and soft drinks so the stock
turnover will be higher. However, a car dealer will have a low turnover due to the
item being a slow moving item. As such only intra-industry comparison will be
appropriate.

35
Stock Turnover Ratio/(Inventory Turnover Ratio)
Stock turnover ratio=cost of goods sold/Average inventory
Table 4.6
year Cost of goods sold Average inventory ratios

2016 36618.4 1303.35 28.09

2017 35587.1 2472.3 14.39

2018 49090 203.1 241.70

2019 48878.6 97.35 502.09

2020 55133.6 44 1253.03

Source: Computed

INFERENCE:
The above table shows the Stock Turnover / Inventory Ratio Position of the Maruti
Suzuki India Limited. The Stock Turnover / Inventory Ratio ranges from 28.09 to
1253.03 during the study period for the study period 2016 to 2020.

Figure 4.6

2016 2017 2018 2019 2020

YEAR

36
Liquidity ratios
Liquidity ratio measures the firm’s ability to pay off current dues i.e., repayable
within a year.Liquidity ratios are otherwise called as short term solvency ratios.
The important liquidity ratios are
1. Current Ratio
2. Liquid Ratio

1. Current Ratio
This ratio is used to assess the firm’s ability
to meet its current liabilities. The relationship of
current assets to current liabilities is known as current
ratio. The ratio is calculated as:

Current ratio=current asset/current liabilities

Table 4.7
year Current asset Current liabilities ratio

2016 43,911.20 36,643.54 1.19

2017 48,787.76 39,832.47 1.22

2018 59,076.02 49,149.54 1.20

2019 69,406.04 58743.33 1.18

2020 64,045.43 54,009.52 1.18

INFERENCE:
The above table 4.8 shows the Current Ratio position of the Maruti Suzuki ltd. The
Current Ratio was ranges from 1.18 to 1.19 during the study period 2016 to 2020

37
Figure 4.7

YEAR

Liquid Ratio
This ratio is used to assess the firm’s short term liquidity. The relationship of liquid
assets to current liabilities is known as liquid ratio. It is otherwise called a quick
ratio or acid test ratio. The ratio is calculated as:
Liquid Ratio = Liquid Assets / Current Liabilities

Table 4.8
Year Liquid asset Current liabilities ratio

2016 34794.88 36643 0.94

2017 39900.99 39832 1.00

2018 4940.4 49149 1.01

2019 57205.84 58743 0.97

2020 52933.14 54009 0.98

38
INFERENCE:
The above table shows the Liquid Ratio position of the maruti suzuki ltd. The
Liquid Ratio was ranges from 0.94 to 0.98 during the study period 2016 to 2020
Figure 4.8

YEAR

39
 CHAPTER:5
FINDING,SUGGESTIONS
& CONCLUSION

40
Findings, Suggestions And Conclusions
Performance of a company measured in financial terms, the success of the firm
depends on how it is perceived by and reacts to the external economics markets.
The field of managing a fiancé is much more complicated and faster. Financial
managers need to know how effective decisions can be made and ineffective ones
be avoided. The present study is concerned with financial analysis of Maruti
Suzuki India Limited for a period of five years during 2010-11 to 2014-15. This
chapter optimizes the major findings, suggesting conclusions for efficient
utilization with respect to Maruti Suzuki India Limited Company.

FINDINGS

● The current ratio was increased the ratio of 1.22 in the year 2017 and
decreased 0.18 in the year 2019 & 2020

● The Liquid Ratio was increased in the ratio of 1.01 in the year 2018 and
decreased 0.94 in the year 2016

● The Gross Profit Ratio was increased in the ratio of 52.18 in the year 2020
and decreased 32 in the year 2016

● The Net profit ratio was increased to a ratio of 63.24 in the year 2016 and
decreased 4.60 in the year 2017.

● The operating profit ratio was increased in the ratio of 13.43 in the year
2020 and decreased 7.06 in the year 2017

● The Proprietary ratio was increased in the ratio of 0.99 in the year 2020 and
decreased 0.92 in the year 2019

● The Total Assets Turnover Ratio was increased in the of 0.51 in the year
2019 and decreased 0.38 in the year 2016

● The Stock Turnover / Inventory Ratio was increased in the ratio of 1253.03
in the year 2020 and decreased 14.39 in the year 2017.

41
After the study of the project , we have got several information and real facts about
-maruti Suzuki:-
• It was the idea of Sanjay 8andhi, son of Indian prime -minister Indira Gandhi to
provide cheap and low maintenance cars to Indiansand for this purpose -maruti
limited was established but after his death -Maruti limited went into collaboration
with the Suzuki -motors of Japan.
• -Maruti Suzui focuses on the overall segment of the market and the strategies
adopted by Marutis are very appealing and interactive for the customers.
• Initially it focused on providing cheap cars to the customers but after
Globalization of the Indian economy (1990s) many foreign companies started to
enter the Indian market then to stand in the maret -Maruti Suzuki also started to
manufacture luxury cars also.
• Along with manufacturing cars -maruti also started other operations like maruti
finance, -maruti Insurance, -maruti genuine parts, after sale service, -maruti true
value, -maruti Driving school etc..

Some other findings about Maruti Suzuki

A buying experience like no other
-maruti Suzui has a sales network of 307 state of the art showrooms across 189
cities, with a workforce of over 6000 trained sales personnel to guide our
customers in finding the right car. Our high sales and customer care standards led
us to achieve the no.1 nameplate in the J .D. Power SSI Study 2004.
Quality Service Across 1036 Cities,
In the J. D. Power CSI Study 2004, -maruti Suzui scored the highest across all ;
parameters:
least problems experienced with vehicle serviced, highest service Equality, best
in-service
experience, best service delivery, best service advisor experience, most
user-friendly service and best service initiation experience.
92% of maruti Suzuki owners feel that work gets done right the first time during
service. The J. D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki
owners would probably recommend the same make of vehicle, while 90% owners
would probably repurchase the same make of vehicle.

42
 Suggestions
Auto industry thus presents a good opportunity for the investors especially in the
form of Mahindra and Mahindra ltd. Major Indian producers like Tata’s and Maruti
may be doing good in the form of numbers in sales but will face great competition
in form of Mahindra and Mahindra. Mahindra and Mahindra has a great position
on the stock market and will attract investors and this could lead to expansion and
growth. Thus the Tata’s and Maruti need to take care of their stock and work on its
consistency. This would help them attract more investors and grow in this growing
economy of India. Increasing demands and sales numbers of Indian auto bring
many opportunities for these players if they are up to grab it.

● The company can improve its profitability position by paying off current
liabilities.
● In order to improve the stable financial position of the company, current
liability can be reduced by selling unnecessary assets.
● Net profit of the company can be increased by reducing operational
expenses.
● The company’s profits are huge in the current year, so it is better to declare
a dividend to shareholders.

43
 Conclusions
The study explored the truth that ratios by themselves mean nothing. It is found
that ratios are calculated from the financial statements’ which are prepared as
desired by the management and policies adopted on depreciation and stock values
and thus produce only a collection of facts expressed in monetary terms and cannot
produce complete and authentic picture of the business and also may not highlight
other factors which affect performance. It is also found that to control manager’s
management often overuse ratios and concentrate more on improving the ratios. It
is also a known fact that ratio is a simple comparison of numerator and
denominator and in comparing ratios it becomes difficult to adjudicate whether
differences are due to change in the numerator or denominator or in both. It is also
found that ratios are interconnected but are often treated by management in
isolation. It is also found that analysis of ratios lack authenticity as data used in
calculation are not accurate but manipulated presentation by the promoters. It is
also found that different firms follow different accounting policies like
depreciation allowance; valuation of inventory etc. and often management ignores
these differences while making inter-firm comparisons. It is a known fact that
ratios are calculated from past records and have no indicator of future and are also
not compared according to standard. It is also found that change in price levels due
to inflation is also not properly considered by management. In the shadow of the
above revelation and fact, the study concluded that Marutisuzuki has a better
strategic position in comparison to its competitor in all the respective ratios. It has
secured top position in Liquidity analysis, in profitability analysis in relation to
sales and in relation to investment, in efficiency analysis, in leverage analysis, in
market valuation and has secured first rank. Tata on other hand with almost second
rank in all the respective analysis has secured second position.

44
BIBLIOGRAPHY

45
Books

• kotler, philip principles of marketing management, prentice hall India.

• "Chhabra, T.N.marketing -management,BhanpatJai and co.
• Kothari, C.R Research methodology, Vikas publishing house.

Magazines:-
• Overdrive
• Autocar
• Autodrive

Websites :-
• www.marutisuzuki.com
• www.surfindia.com
• www.carwale.com
• www.driveinside.com
• www.carindia.com

46
Annexure

47
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