1

FINANCIAL STATEMENT ANALYSIS OF FIVE AUTOMOBILE INDUSTRIES

(TATA MOTORS,MARUTI SUZUKI,HERO MOTOCORP, TVS MOTORS, BAJAJ

AUTO)

Project Report

PRESENTED TO THE FACULTY OF Commerce and Management OF

THE

S. P. Pune University

IN FULFILMENT OF THE REQUIREMENTS FOR THE

DEGREE OF Master in Commerce

Name of Student

(SHREYAS SUDHIR JADHAV)

Name of Guide

(Dr. Ashutosh A. Deshmukh)

N. B. Navale College of Commerce and Science,

Kusgaon (bk), Lonavala 410401

DEPARTMENT OF COMMERCE N. B. Navale College of Commerce, Kusgaon (bk)

Lonavala, July 2021
 2

Certificate

This is to certify that this Project Report titled “FINANCIAL STATEMENT

ANALYSIS OF FIVE AUTOMOBILE INDUSTRIES (TATA MOTORS,
MARUTI SUZUKI, HERO MOTOR CORP, TVS MOTORS, BAJAJ AUTO)”
embodies the research work carried out by SHREYAS SUDHIR JADHAV
himself/herself under my supervision. The data reported in it are genuine. It
represents his original work and the Project Report is worthy of
consideration for the award of Doctor of Philosophy in Commerce degree.

(Dr. Ashutosh A. Deshmukh)

N. B. Navale College

of Commerce and Science,

Kusgaon (bk), Lonavala 410401

Date:

Declaration
 3

I hereby affirm that the work presented in this Project Report is

exclusively my own and there are no collaborators. It does not contain any
work for which a degree/diploma has been awarded by any other
University/Institution. A part of this work has already been published.

Date:

(SHREYAS SUDHIR JADHAV)

N. B. Navale College

of Commerce and Science,

Kusgaon (bk), Lonavala 410401

Countersigned:

(Dr. Ashutosh A. Deshmukh)

N. B. Navale College

of Commerce and Science,

Kusgaon (bk), Lonavala 410401

LIST OF TABLES

Table Name of Table Page

 4

Number Number

GROSS PROFIT MARGIN

1 CHART NO.1 GROSS PROFIT AND NET SALES 22/23

OPERATING PROFIT MARGIN TABLE.

CHART NO.2 RELATION CONCERNING OPERATING PROFIT

2 AND SALES. 24/25

NET PROFIT MARGIN TABLE

CHART NO. 3 RELATION CONCERNING NET PROFIT AND

3 SALES 26/27

4 GROSS PROFIT RATIO OF MARUTI SUZUKI INDIA 37

5 NET PROFIT RATIO OF MARUTI SUZUKI INDIA 38

6 OPERATING PROFIT RATIO OF MARUTI SUZUKI INDIA 39

7 COMPUTATION OF RATIO 50

CURRENT AND QUICK RATIO OF HERO MOTOR CORP,

8 BAJAJ AUTO & TVS MOTORS. 51

9 EVALUATION OF CURRENT RATIO 52

10 EVALUATION OF QUICK RATIO 53

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LIST OF ABBREVIATIONS

Abbreviations Terms

No. NUMBER

POV POINT OF VIEW

OFDI OUTWARD FOREIGN DIRECT INVESTMENT

V/S VERSUS

P&L PROFIT AND LOSS

FDI FOREIGN DIRECT INVESTMENT

SKU STOCK KEEPING UNIT

ROI RETURN ON INVESTMENT

ABSTRACT

FINANCIAL STATEMENT ANALYSIS OF FIVE AUTOMOBILE INDUSTRIES

(TATA MOTORS,MARUTI SUZUKI,HERO MOTOCORP, TVS MOTORS, BAJAJ

AUTO)

Submitted by SHREYAS SUDHIR JADHAV

 6

Supervised by Dr. Ashutosh Deshmukh

Analysis of financial performance is a process of deciding the operational and

financial characteristics of a company from accounting and financial credentials.
Such analysis aims to measure the efficiency and performance of the companies
administration, as shown in the financial reports and records. This study focuses
on the overall financial position of tata motors, Maruti Suzuki, hero moto corp,
TVS motors, and bajaj motors.

The period of selected time is based on the selected variables, which may interest
not only the respective companies in the automotive industry but also brings a
procedure of evolving operational view of the whole industry. The study is of the
utmost significance to the administration from the context of decision-making
purpose, to rectify the strong and week areas of the organization and finally helps
to increase the market value of the company.

The Indian automobile industry is the fourth largest in the world with sales
increasing 9.5 percent year-on-year to 4.02 million units (excluding two-wheelers)
in 2017. It was the 7th largest manufacturer of commercial vehicles in the year
2017. The Two Wheelers segment dominates the market in terms of volume owing
to a growing middle class and a young population. however, the increasing
interest of the companies in exploring the rural markets further helped the
growth of the sector. India is also a large auto exporter and has strong export
growth potential for the near future. total automobile exports from India grew at
6.86 percent CAGR between FY13-18. The present paper measures the financial
 7

performance of the major selected automobile. The objective of the study is to

analyze and compare the financial performance of 5 companies position tata
motors, Maruti Suzuki, hero motor corp, tvs motors, and bajaj motors, and to
rate their financial performances. The study forecasts to analyze by observing the
risk of different organizations,

CONTENTS

Certificate

Declaration

Acknowledgment

List of Tables

Abbreviations Used
 8

Chapter Title Page Number

1. FINANCIAL ANALYSIS OF TATA MOTORS 11

INTRODUCTION TO THE STUDY 11-13

LITERATURE REVIEW 14-16

PROBLEM STATEMENT 17-18

OBJECTIVES OF THE STUDY: 19

HYPOTHESIS: 19-20

RESEARCH METHODOLOGY: 20-21

DATA ANALYSIS & INTERPRETATION: 22-27

CONCLUSION & SUGGESTIONS:

28

A STUDY ON FINANCIAL ANALYSIS OF MARUTI

SUZUKI

2. INTRODUCTION 29

NEED FOR THE STUDY 30

STATEMENT OF THE PROBLEMS 31

OBJECTIVE OF THE STUDY 31

HYPOTHESIS 32

LITERATURE REVIEW 32-34

RESEARCH METHODOLOGY 34-35

FRAMEWORK OF ANALYSIS 35
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LIMITATIONS OF STUDY 36

PERIOD OF STUDY 36

DATA ANALYSIS 37-40

CONCLUSION 40-41

REFERENCE 42

A STUDY ON FINANCIAL ANALYSIS OF HERO

3. MOTORCORP, BAJAJ AUTO & TVS MOTORS 43

INTRODUCTION 43-44

REVIEW OF LITERATURE 45

STATEMENT OF PROBLEM 46-47

SCOPE OF STUDY 47-48

OBJECTIVES OF THE STUDY 48

HYPOTHESIS 48-49

RESEARCH METHODOLOGY 49

SAMPLE DESIGN 49-52

TEST OF QUICK RATIO 53

TEST OF CURRENT RATIO 54

CONCLUSION 55-56

REFERENCE 56
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FINANCIAL
ANALYSIS OF TATA
MOTORS
 11

INTRODUCTION TO THE
STUDY:

Profitability is the most essential goal of all business

institutions. In absence of profitability, the business
will struggle to survive in the long run. That’s why
analyzing current and past profitability and forecasting
future profitability is a vital activity.

Profitability is analyzed with the help of income and

expenses. Income is funds generated from the
process of the business. For instance, if parts and
machines are produced and sold, funds are
generated. However, funds brought into the business
from actions like borrowing or loans do not create
 12

income. This is merely a transaction between two

parties the business and the lender to create funds for
operating the business institutions or acquiring
assets.

Expenses are the price of resources rendered or

consumed by a business or its activities. For instance,
raw sheet metal is an expense of an automobile
production business as it is used in the production
process of manufacturing various cars, bikes, trucks,
or other consumable parts. A resource such as a
production machine unit whose useful life is greater
than a given year is used up over a period of years.
Repayment of borrowed funds/ loans is not to be
taken as an expense; it is a simple cash transfer
between the business and the lender.

Profitability is ascertained with an “income statement”.

This is mostly a list of income and expenses during a
 13

period (usually 12 months or a year) for the entire

business. An Income Statement is generally used to
ascertain the profitability of the business for the
previous accounting year. However, a “pro forma
income statement” forecasts the projected profitability
of the business for the upcoming accounting period or
upcoming year. A budget may be taken into account
when you want to forecast profitability for a defined
operation or a section of an institution.
 14

LITERATURE
REVIEW:

Horne and Wachowicz, (2000) Working capital is a

significant tool for growth and profitability for
institutions. If the state of working capital is not
sufficient, it may lead to shortcomings and problems
with day-to-day activities.

Lazard’s and Tryfonidis (2006) analyzed the

relationship of corporate profitability and working
capital management for firms listed at Athens Stock
Exchange. They concluded that there is a
statistically significant relationship between
profitability measured by gross operating profit And
the Cash Conversion Cycle. Furthermore, Managers
 15

can create profit by correctly handling the individual

components of working capital to an optimal level.

Shah and Sana (2006) used Avery's small sample

of 7 oil and gas sector firms to investigate this
relationship for the period 2001-2005. The results
suggested that managers can generate a positive
return for the shareholders by effectively managing
working capital.

Ganesan (2007) selected the telecommunication

equipment industry to study the effectiveness of
working capital management. The sample included
for his research paper included 443annual financial
statements of 349telecommunication equipment
companies covering the period 2001 to 2007. The
statistical tests used included correlation, regression
analyses, and Analysis of variance (ANOVA). The
results showed those days of working capital
 16

negatively affect the profitability of these firms but in

reality, it does not affect the transportability of firms
in the telecommunication equipment industry.

Sen. M (2009) examined the ISE (Istanbul Stock

Exchange) listed firms and checked out the
relationship with the working capital. According to
them, there is a negative relationship among
variables. His research uncovered the importance of
the finance directors who act as moderators or
catalysts to increase the productivity of the firm in
other words they positively affect the firm’s
performance.
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PROBLEM
STATEMENT:

Many institutions are contributing to the

economic upliftment of the country and modern
automobile institutions contact almost all
spheres of economic activity. They have
significantly impacting consequences on the
economical development of a nation. The
automobile sector is one of the top leading
industries in the manufacturing sector of our
nation.

Although the automobile sector is working

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effectively it does have to face many

challenges. One of the major challenges faced
by the automobile sector is inconsistency in the
revenue they earn. It is crucial to forecast the
profitability of the industry which is concerned
by various factors. Profit is the fule of every
institution that needs to have cared. Thus, it
becomes significant for every manufacturer to
know its current trend of profit.

In this context, my project work is aimed

towards ascertaining the profitability of TATA
MOTORS LTD. through various analyses on
the financial data of the last five years.
 19

OBJECTIVES OF THE
STUDY:
 To financially analyze the profit concerning sales.

 To analyze the profitability concerning investment.

HYPOTHESIS:
The following hypotheses were structured to conduct the
tests and analyze the profitability results of TATA MOTORS
LIMITED.

H01: there is no major relationship between gross profit

margin and net sales.

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H02: there is no significant relationship between operating

profit and net sales.

H03: there is no significant relationship between net profit

and net sales.

RESEARCH
METHODOLOGY:
POPULATION:
Population for this concerned study is the whole listing of
companies available in the stock market of India

SAMPLING:
The sample was taken from a list of companies
mentioned on the BSE (Bombay stock
exchange)under the head of the automobile
 21

manufacturing unit, is TATA MOTORS LIMITED.

SAMPLE DESIGN:
Sampling design is a simple random sampling of data
for analysis

COVERAGE:
The chosen analysis sample focuses on several
profitability variables involving a period of five years.

DATA COLLECTION:

I have used secondary type of data in my analysis of

tata motors (Annual reports, balance sheet, and P&L
accounts
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DATA ANALYSIS &

INTERPRETATION:
Hypothesis 1:

H0: There is no major relationship relating gross profit

and net sales.
Ha: There is an important relationship relating gross
profit net sales.

Year Gross profit Net sales Gross profit

margin
2010 11834.66 35373.39 33.46

2011 12671.46 47088.44 26.91

2012 13837.45 54306.56 25.48

2013 12807.25 44765.72 28.61

2014 11237.34 34319.28 32.74

(Table no.1 gross profit margin table)

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60000

50000

40000

30000

gross profit
net sales
20000

10000

2010 2011 2012 2013 2014

CHART EXPLANATION:

In the years 2011 and 2012 there is an uptrend

concerning 2010 in the sales of the company with
this there is also incline in gross profit. In the years
2013 and 2014 there is a downtrend in sales
concerning the preceding year and also a decline in
gross profit. So we can conclude that there is an
important relationship between sales and gross
profit
 24

Hypothesis 2:

H0: There is no important relation in the

context of operating profit and net sales.

Ha: There is no important relation in the context

of operating profit net sales.

Year operating Net sales operating

profit profit margin
2010 4032.83 35373.39 11.4

2011 4665.14 47088.44 9.91

2012 4177.55 54306.56 7.69

2013 1717.98 44765.72 3.84

2014 -879.98 34319.28 -2.56

(Table 2. operating profit and margin table)

60000

50000

40000

30000
opreating profit
net sales
20000

10000
 2010 2011 2012 2013 2014
25
-10000

(Chart no.2 Relation concerning operating profit & sales)

CHART EXPLANATION
In the year 2011, there is an uptrend in sales and
there is also growth in operating profit concerning the
year 2010. While in 2014 there is a downtrend in
sales and there is also a decline in sales concerning
the year 2013. So we can conclude that there is a
very important relation in the context of sales and
operating profit
 26

Hypothesis 3:

H0: There is no important relation in the

context of net profit and net sales.

Ha: There is no important relation in the

context of net profit net sales.

Year Net profit Net sales Net profit

margin
2010 2240.08 35373.39 6.33

2011 1811.82 47088.44 3.85

2012 1242.23 54306.56 2.29

2013 301.81 44765.72 0.67

2014 334.52 34319.28 0.97

(Table no.3 net profit margin table)

60000

50000

40000

30000 EAT
net sales

20000
 27
0
2010 2011 2012 2013 2014

Chart no.3 (Relationship concerning net profit & sales)

CHART EXPLANATION

Here there is a constant uptrend in sales but there is

a constant downtrend in net profit of the business
concerning the year 2010.

So we can conclude that there is no important relation

in the context of net profit and sales
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CONCLUSION & SUGGESTIONS:

The proceeds from revenue of the TATA motors

ltd was high, but it was noted that the gross profit
margin of the institution was not evolving or there
was no important change compared to net sales.
Operating profit which is a mirror image of the
profit obtained from manufacturing and selling
products was small compared to the sales of the
company. Therefore, the institution should roll
back its expenses to be able to pay its debts and
ensure more earnings after taxes. Net profit
margin which reflects how profitable an institution
sales are after payment of all expenses, interest,
taxes & preferred stock dividends declines from
profitability but forecast good future opportunities,
the institution has to critically control the costs of
goods sold and minimize its expenses to avoid
facing critical financial conditions in the future.
 29

A Study on Financial
Analysis of Maruti Suzuki
India Limited
INTRODUCTION
Every business institution, whether production-
oriented or service lead, needs finance, that is, money
for the performance of its activities. Though business
institutions get enough money for carrying out their
activities, the profitability of the business depends on
how well the institution manages them. That is, it
depends on how well a business institution funds its
capital and how efficiently it operates out of the
invested capital to generate profit. While the success
of a business is also a subjective measure of how well
a firm can finance its assets and make use of the
assets to generate revenues, the business can be
stable and healthy if it is financial performance
consistently yields profit. These measures often
determine whether or not that level of performance is
considered adequate. Further, a business institution is
identified to be inefficient, if the performance level is
often found to be low, even if it is making a profit.
 30

NEED FOR THE STUDY

The heed of the many organizations related to

a company is affected by the financial
performance of the organization. Hence it is of
the utmost importance for these institutions to
review the financial performance of the
company they are keen on. This study focuses
on the overall financial position of tata motors,
Maruti Suzuki, hero moto corp, TVS motors,
and bajaj motors. during a specific timeframe
based on the known variables not dynamic,
which may concern not only the respective
companies of the automobile industry but also
shine a light on the process of developing an
operational view of the whole industry. The
study is significant to the management for the
sake of decision-making, to identify the strong
and week areas of the company.
 31

STATEMENT OF THE PROBLEMS

Analysis of financial performance is a continuous

process of deciding the operational and financial
characters of observing from accounting and financial
statements. The key of such an observation is to
forecast the optimization and performance of the
companies administration, as shown in the financial
reports and records. From the stated POV, we have
studied analysis of the financial conditions of Maruti
Suzuki India Limited in this particular chapter to
know how the administration of finance plays a
significant task in scalability.

OBJECTIVE OF THE STUDY

*To observe growth and scalability of Maruti Suzuki

India Pvt limited.
*To study the growth factor of Maruti Suzuki motors
and the stability of the growth.
*To evaluate the liquidity ratio of the company and
overall financial analysis in a given period
 32

HYPOTHESIS:
No particular hypothesis was forecasted or made at the
beginning of the study of the analysis of the financial
statement of Maruti Suzuki motors.

LITERATURE
REVIEW

*****QUOTING THE STUDIES*****

Pradhan, Singh (2008): in recent years, developing

“

countries have emerged as significant participants in

the OFDI (Outward foreign direct investment) activities
having the strategic asset-seeking motive. Such OFDI
which is assets exploiting cum augmenting involves
potential two-way cross-border knowledge flows. This
 33

study examines these issues for the Indian automotive

industry that is currently changing at a rapid rate in
terms of both exports and OFDI. The study traces the
technological capability building and several
dimensions of OFDI in this industry. The case studies of
two major automotive groups highlight their
competence-building and knowledge-seeking
operations. This study undertakes a quantitative
analysis of the influence of OFDI activities on the in-
house (domestic) R&D performance of Indian
automotive firms during 1988–2008. As expected, the
favorable impacts on R&D intensity appear to be
stronger for developed vs. developing host nations and
joint venture vs. wholly-owned ownership OFDI. The
study concludes with suggestions to promote
particularly the strategic asset enhancing OFDI.

Ray (2012): this study tries to evaluate the

performance of the Indian automobile industry in
 34

terms of various financial indicators, sales trends,

production trends, export trends, etc. for the period of
2003-04 to2009- 10. The result suggests that the
automobile industry has been passing through
turbulent phases characterized by enhanced debt
burden, low utilization of assets, and above all, huge
liquidity crunch. The key to success in the industry is to
improve labor productivity, labor flexibility, and capital
efficiency.

**NOTE**

THESE STUDIES ARE MENTIONED FOR REFERENCE

ONLY, I DO NOT TAKE CREDIT FOR THESE STUDIES

RESEARCH METHODOLOGY

SOURCES OF DATA

The type of data used in this particular study is a

secondary type of data which was taken from various
 35

journals articles online newspapers and websites. Data

Variable reacting to liquidity, assets leverage, and
profit were taken from the balance sheet and profit
and loss accounts of the Maruthi Suzuki India Limited
Company for a period of 5 years that is from 2010-11
to2014-15.

FRAMEWORK OF ANALYSIS

Evaluating the performance of an organization can be

done by a careful and close evaluation of financial
statements. The most critical financial statements are
‘Balance sheet” and ‘ Profit and loss account (P&L)’. It
reflects the operational schemes and financial situation
of the concerning, therefore by evaluating and
analytical reviewing the documents, performance can
be ascertained. In the light of the mentioned study,
some financial ratios have been determined to test the
goal of the study.
 36

LIMITATIONS OF THE STUDY

This study takes into account a period of five years

from 2010-11 to 2014-15. The data collected for this
study is Secondary data due to time constraints. This
study is majorly based on ratios, which have their own
limitations as they don’t take into account the ever-
changing dynamic situations of our markets.

PERIOD OF STUDY
This study is majorly based on a period of secondary
data accounting for 5 years. The data collected and the
financial ratios determined would be based on financial
statements of the companies Balance sheet and profit
and loss accounts (P&L).
 37

DATA ANALYSIS
GROSS PROFIT RATIO OF MARUTI SUZUKI
INDIA
Gross profit = Gross profit / (Net sales × 100)
Year Gross Profit Sales Ratio
2010-2011 11718.6 36618.4 32
2011-2012 14678.3 35587.1 41.24
2012-2013 19633.9 43587.9 45.04
2013-2014 22435 43700.6 51.33
2014-2015 26076.9 49970.6 52.18
TABLE 4 Gross Profit Ratio of Maruti Suzuki India
EXPLANATION
The mentioned table projects the Gross Profit Ratio of
Maruti Suzuki India. The Gross Profit Ratio ranges from
32 to 52.1 during the study duration year 10-11 to 14-
15.
 38

NET PROFIT RATIO OF MARUTI SUZUKI

INDIA
Net profit = Net profit / sales * 100
Year Net Profit Sales Ratio
2010-2011 2288.6 36618.4 63.24
2011-2012 1635.2 35587.1 4.60
2012-2013 2392.1 43587.9 5.49
2013-2014 2783 43700.6 6.37
2014-2015 3711.2 49970.6 7.43
TABLE 5 Net Profit Ratio of Maruti Suzuki India
EXPLANATION:
The Mentioned table reflects the Net profit ratio of
Maruti Suzuki India Limited. The net profit ratio is from
63.2 to 7.4 during the period of year(s) 10-11 to 14-15.
 39

OPERATING PROFIT RATIO

Operating ratio = operating ratio / sales * 100
Year Operating Profit Sales Ratio
2010-2011 3638.5 36618.4 9.94
2011-2012 2513 35587.1 7.06
2012-2013 4229.6 43587.9 9.70

2013-2014 5095.9 43700.6 11.66

2014-2015 6712.9 49970.6 13.43

TABLE 6 OPERATING PROFIT RATIO OF MARUTI

SUZUKI
EXPLANATION:
The Mentioned table projects the operating profit ratio
situation of Maruti Suzuki India Limited. The operating
profit ratio was is from 9.9 to 13.4 during the study
years(s) 10-11 to 14-15.
OPERATING PROFIT RATIO
 40

CONCLUSION
The presented analysis searched the truth that ratios
mean very little. It is discovered that ratios are
determined from the financial documents’ which are
altered as wished by the administration and reforms
accepted on depreciation and stock valuations.
therefore producers only a mere account of facts
projected in financial terms and could not reveal a fair
and true image of the organization and could not shine
the light on other factors which degrade performance.
 41

It is also seen that to control manager’s administration

is concentrate vastly on improving the ratios. It's a
known fact that any ratio is just a comparison of
numerator and denominator and in comparing ratios it
becomes hard to decide that un-similarities are due to
change in the numerator or denominator or both. It is
seen that evaluation of ratios doesn’t reflect originality
as data used for calculation is not accurate but edited
presentation by the administration. It is also seen that
In the light of the mentioned fact of this study.
we conclude that Maruti Suzuki has a great strategic
position in relevance to its rivals in all the respective
ratios. It has achieved top position in ratio analysis, of
gross profit, net profit, operating profit, and in-market
valuation and has secured topmost rank.
Tata Motors on the other hand has secured the second
position respectively from its competitor.
 42

Reference:
*www.marutisuzki.com
*the economic times
*ray 2012
*times of India
*BOMBAY STOCK EXCHANGE
*Pradhan, Singh (2008)

A STUDY ON FINANCIAL
ANALYSIS OF HERO
 43

MOTORCORP, BAJAJ AUTO & TVS

MOTORS

INTRODUCTION

The automobile industry is one of the major sectors of

the country boosting majorly to the economy of India.
In a direct or indirect way, it employs more than 1.45
cr. people in the country. A stable government
structure, higher buying capacity, large domestic
market, and always increasing development in
infrastructure have made India a desirable country for
foreign investment. It's one of the vastest sectors in
the world, both in terms of sales volume and
manufacturing. The Indian automobile industry has a
well-known name worldwide being the second largest
two-wheeler marketplace in the world and the fourth
largest commercial vehicle marketplace in the world
and the eleventh largest passenger car market in the
world and forecasted to become the third-largest
automobile industry in the world only next to USA and
China.
 44

The automobile industry provides an improvement in

various infrastructures like power, rail, and road
transportation. Due to the historical forward and
backward linkages with various key segments of the
Indian economy, the automobile sector is having a
confident multiplier effect on the monetary stability of
a country and hence is forecasted of being the driver of
economic upliftment. It plays a vital catalyst role in
improving the transport sector on one hand and
provides a helping hand to the industrial market on the
other to increase sustainably and therefore make an
important employment opportunity.

In India, automobiles is one of the vast industries

reflecting massive uptrend over the years and has been
noticeable making a large contribution to whole
industrial improvement in the nation.

currently, 99% foreign direct investment (FDI) is

allowed under the automated route in this sector,
including the car segment.
 45

REVIEW OF LITERATURE
Sheela Christina (2017):
Performed the study on Financial analysis of Wheels
India Limited-Chennai. The study shows an Analytical
type of research framework with the support of
secondary data.
For this reason, the researcher took the five years
information and also checked it out for authenticity
and dependability before performing the study. The
researcher had the help of the following financial tools
namely the following
ratio evaluation, comparing balance sheet, and DuPont
analysis, and also a statistical tools known as trend
analysis.
Profit ratio evaluations show that there is a decline in
the revenue level, optimization of fixed assets, and
working capital in the last financial year.
Thus the organizations can implement necessary steps
to improve sales and profit. Finally, the study shows
that the financial performance is satisfactory.
 46

STATEMENT OF THE
PROBLEM
analyzing Performance is significant to completely
understand its pros and cons to know the losses and
benefits and to acknowledge what necessary changes
to impart, to attain higher returns, if possible with
minimal risk.
The reason of ascertain performance analysis is not to
see how the organization is performing but to provide
it to perform efficiently. As there is rising pressure from
other global companies, the administration has to
fortake the necessary steps to lower the value of
manufacturing and generation additional profits
through cost competition.
For this reason, many production areas have been
rectified for cost reduction. The administration can aim
at increasing revenue through the following methods:

• simplification of the product materials to increase the

sales revenue and thus, the revenue of the company.
 47

• Increased production of consumable products

such as oil seals and washers.
• significant downsizing of SKU of PARTS and raw
materials.
• facilitation of exposure plans as per schedule to
capture the expanding and new market.
•Creating a good reputation by providing good and
supportive after-sales services

The objective of Performance analysis is to view the

past and current financial information so that an
organization's performance and financial status can be
evaluated and future potential risks can be mitigated.

SCOPE OF THE STUDY

This current study deals with the financial analysis of
HERO MOTOR CORP, BAJAJ AUTO & TVS MOTORS
Performance indicates that the company's strategy and
its planning to execution-process are optimally giving
effort towards Profitability, Liquidity, Efficiency,
 48

and Solvency so that the organization can be carried

out optimally ensuring success, growth, and bottom-
line efficiency.

OBJECTIVES OF THE
STUDY
• To study the status and potential of selected
automobile companies HERO MOTOR CORP, BAJAJ
AUTO & TVS MOTORS
• To evaluate the quick ratios and ratio solvency
optimization of automobile companies HERO MOTOR
CORP, BAJAJ AUTO & TVS MOTORS
• To make sure turnover and revenue performance
of selected automobile companies HERO MOTOR
CORP, BAJAJ AUTO & TVS MOTORS is viable And
consistently scalable in future

HYPOTHESIS
 49

The hypothesis of this study has been formed as

follows:
H1) There is nil major difference among the worth of
current ratio between HERO MOTOR CORP, BAJAJ
AUTO & TVS MOTORS, namely automobile companies.

H2) There is a negligible difference among the worth of

Quick ratio between HERO MOTOR CORP, BAJAJ AUTO
& TVS MOTORS, namely automobile companies.

RESEARCH METHODOLOGY
The mentioned study has significantly relied on
secondary data. The data has been collected from
Annual Reports of the respective company's websites,
Journals, Articles, Magazines, and from the Internet.
The necessary data has been collected from money
control.com, equity master, and the Society of Indian
Automobile Manufacturers (SIAM).

Sample Design:
 50

The manufacturers are taken based on high volume

manufacturing of two and three-wheelers
Manufacturers. We have selected three Automobile
manufacturers, HERO MOTOR CORP, BAJAJ AUTO &
TVS MOTORS, namely based on the acceptability of
data for the past five years. This sample has been
selected for the ongoing project. The mentioned
companies have been selected for the study.
a) Hero Motocorp Limited,
b). Bajaj Auto Limited,
c).TVS Motor Company Limited.
The duration of study that has been taken for the
research is five years that is from the financial year
2012-13 to 2016- 17.

Ratio implemented for evaluation of Data

“Ratio evaluation is a significantly used tool of financial

evaluation. It is described as the chronological use of
ratios to dictate the financial documents so that the
pros and cons of a company, as well as its past
performance and recent financial position, can be
 51

evaluated. The term ratio means to the numerological

relation relating to two variables.

TABLE 7 COMPUTATION OF RATIO

S.No Ratio Computed Formula

1 Current Ratio Current assets /Current liabilities

2 Quick Ratio Current asset- inventories)/Current liabilities

3 Interest Coverage Ratio EBIT / Interest Expense

4 Proprietary Ratio Shareholders‟ funds / Total Assets

5 Sales to Total Assets Net Sales / Total Assets

Ratio

Liquidity Performance of HERO MOTOR CORP,

BAJAJ AUTO & TVS MOTORS
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The following table-8 Displays current and a

quick ratio of HERO MOTOR CORP, BAJAJ
AUTO & TVS MOTORS.
Table 8
Year/ Current Ratio of the selected Quick Ratio of the selected automobile
Compan automobile industry
y industry

Hero Bajaj TVS Hero Bajaj Auto TVS

Moto Auto Motor Motocorp Motor
corp

2013 1.2 1.5 0.9 1.06 1.32 0.48

2014 1.3 1.2 0.9 1.10 1.05 0.52

2015 1.6 3.7 0.9 1.13 1.95 0.47

2016 1.8 1.7 0.8 1.27 1.32 0.45

2017 1.8 2.9 0.8 1.64 2.72 0.39

Mean 1.54 2.2 0.86 1.24 1.67 0.46

Median 1.6 1.7 0.9 1.13 1.32 0.47

S.D 0.27 1.05 0.05 0.23 0.67 0.04

CV 18.13 48.10 6.36 19.00 40.03 9.98

Skewnes - 0.791 -0.609 1.68 1.14 -0.067

s 0.340
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Test of Current Ratio

Table 9 evaluvation of Current Ratio

Source
of SS Df MS F P-value F crit
Variatio
n
Between
Groups 1.96666 4 0.49166 0.671065 0.626819 3.47805
7 7

Within
Groups 7.32666 10 0.73266
7 7

Total 9.29333 14
3

Table -9 gives the F-value (0.67) is less than the

F-crit value (3.47) and P-value is 0.62. It is more
than the alpha level of 0.05. Therefore, the null
hypothesis is accepted. So there is no major
difference between the worth of Current Ratio
among the companies.
 54

Test of Quick Ratio

Table 10 evaluation of Quick Ratio

Source of
Variation SS Df MS F P-value F crit

Between
Groups 0.929373 4 0.232343
0.477707 0.751759 3.47805

Within
Groups 4.863719 10 0.486372

Total 5.793092 14

Table -10 reveals that the F-value (0.47) is less

than the F-critical value (3.47) and P-value is 0.75
It is more than the alpha level of 0.5. hence, the
null hypothesis is approved. and there is no major
difference between the worth of Quick Ratio
between the selected automobile companies.
 55

CONCLUSION:
Ratio evaluation promotes to juxtapose the financial
documents of the company and an evaluation of
financial caliber is also researched over some time.
companies have utilized more loaned funds.
The ongoing project analysis showed that there is a
supportive relationship of liquidity ratio. It changes the
active inventory utilization and turn-around time frame
results in greater liquidity strength to the
organizations.
Thus, the study justifies that there are various
important changes to satisfy their liabilities.

The liquidity Ratios of selected automobile companies

have some uncertain movements. This notifies us that
they face a minimal risk to satisfy their long-term
obligations.
 56

The optimization or quick ratios of Hero Motocorp is a

greater rank compared to other Automobile
companies.
This reflects that Hero Motocorp optimally
administrates its resources and assets. The revenue
Ratios of Hero Motocorp are greater than other
automobile companies.
It reflects Hero Motocorp analyzed greater profits and
it is great for the company.
After evaluating all the perspectives, concerns with this
project, we can state that Bajaj Auto and TVS Motors
are satisfying but Hero Motocorp maintains a good
place in the market. thus shareholders can invest their
funds. They can get a good ROI and their hard-earned
money will be safe and sound.

REFERENCE
TIMES OF INDIA
GOOGLE.COM
MONETORY.COM