A Study On The Financial Performance Ana

A Study on
“THE FINANCIAL PERFORMANCE ANALYSIS”
Conducted at
NANDI TOYOTA, BANGALORE
A Project Report
Undertaken and Prepared by:
GAGANA V
17MBA19
In compliance with the requirement for obtaining the Degree in
Masters of Business Administration
Conferred by:
Jyoti Nivas College Autonomous
Post Graduate Centre
Affiliated to Bangalore
University Bangalore – 560 095
2017 – 2019
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ACKNOWLEDGEMENT
The satisfaction and euphoria that accompanies the successful completion of

any task would be incomplete without mentioning the names of the people who
made it possible, whose constant guidance and encouragement crown all the
efforts with success.
I am deeply indebted to all people who have guided, inspired and helped me in
the successful completion of this project. I owe a debt of gratitude to all of
them, who were so generous with their time and expertise.
I wish to express my sincere gratitude to Dr. Sr. LALITHA THOMAS,

Director of Jyoti Nivas College Autonomous and Post Graduation Centre, for
granting an opportunity to experience the corporate world.
I would like to express my sincere thanks to PHILCY ANTONY, project

guide and all other staff members who have provided me excellent knowledge
and support throughout my project.
I would like to express my sincere thanks towards Mr. RAGHU, Sr. Manager
Finance, and the every employee of Nandi Toyota, who helped directly or
indirectly in completing the project.
I thank my family for their infinite love and support.
Thank you,
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CERTIFICATE
I PHILCY ANTONY, hereby certify that GAGANA V. pursuing her Masters

in Business Administration from Jyoti Nivas College Autonomous, Post
Graduate Centre has completed a project on “A STUDY ON THE
FINANCIAL PERFORMANCE ANALYSIS AT NANDI TOYOTA,
BANGALORE” as her Summer Internship Program during the period 1st June
2018 to 15th July 2018.
This is to certify that this report is submitted in Partial Fulfilment of the

requirements for the degree of Masters in Business Administration to Jyoti
Nivas College Autonomous, Post Graduate Centre, affiliated to Bangalore
University.
The information submitted by her is true and original to the best of my

knowledge.
Sign of Director Sign of Internal Project Guide
Date:
3
DECLARATION
I GAGANA V pursuing my Masters in Business Administration from Jyoti

Nivas College Autonomous, Post Graduate Centre, hereby declare that I have
completed a project on “A STUDY ON THE FINANCIAL
PERFORMANCE ANALYSIS AT NANDI TOYOTA, BANGALORE”
during the time 1st June 2018 to 15th July 2018.
The information compiled and submitted in this Report pertaining to the

project is true and original to the best of my knowledge.
However, the views expressed in this report are not necessarily those of the
company or college and all responsibility for any errors remains with the
author.
Signature of Student
Date:
4
EXECUTIVE SUMMARY
Financial performance analysis is the process of identifying the financial

strengths and weaknesses of the firm by the use of financial statements. The
financial performance analysis is done by using comparative statement, trend
analysis and ratio analysis.
The first chapter tells about the general introduction of the topic and then
continued with the review of literature of the topic given by various authors.
The automobile industry profile is also concentrated; the top four automobile
industries are mentioned and also the automobile industry history is dealt in the
study. The next chapter deals with the company profile along with the history,
hierarchy of the organisation along with the vision and mission of the company
with the various products and services of the company.
The third chapter of this study is about the research methodology which is
considered to do this study. This mainly deals about the background of the
study of financial performance, which even includes the statement of the study.
The need and importance of the study tells about the main purpose of doing
this study and the limitation concerned to this study, which is continued with
the objective of the study. The data for the study plays an important role so, it
even tells about the method of the data collection and the method adopted to
analyse the collected data.
The next chapter is mainly concerned with the analysis of data using various
methods which include comparative statement, common size statement, and
the trend analysis. The analysis is given with interpretations. The final chapter
tells about various findings which are found from the data analysis. The
findings are followed by the various suggestions and recommendations for the
finding which the company could consider for improving its financial
condition.
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TABLE OF CONTENTS
CHAPTERS PARTICULARS PAGE NO
1 INTRODUCTION
1.1 General Introduction 1-2
1.2 Review of Literature 3-4
1.3 Industry Profile 5-8
2 ORGANIZATIONAL STUDY
2.1 Company Profile 9-12
2.2 Company Hierarchy 13
2.3 Vision and Mission 14
2.4 Objective 15
2.5 Product and Services Offered 16-21
2.6 Departmental Studies 22-26
2.7 SWOT Analysis 26-27
3 RESEARCH METHODOLOGY
3.1 Background of Study 28
3.2 Statement of Problem 28
3.3 Need and Importance of Study 29
3.4 Limitations of the Study 29
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3.5 Objective of the Study 30
3.6 Type of Research 30
3.7 Method of Data Collection 30
3.8 Tools used in Analysis 30-32
3.9 Period of Study 32
4 ANALYSIS AND INTERPRETATION OF DATA 33-62
5 SUMMARY
5.1 Findings 63
5.2 Suggestion and Recommendation 64
5.3 Conclusion 65
Bibliography
Appendices
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LIST OF GRAPHS
4.3.1.1 Graph showing Gross Profit Ratio 48
4.3.1.2 Graph showing Net Profit Ratio 49
4.3.1.3 Graph showing Operating Profit Ratio 50
4.3.1.4 Graph showing Return on Investment 51
4.3.1.5 Graph showing Return on Shareholders’ Funds 52
4.3.2.1 Graph showing Capital Turnover Ratio 54
4.3.2.3 Graph showing Fixed Assets Turnover Ratio 55
4.3.2.4 Graph showing Working Capital Turnover Ratio 56
4.3.3.1 Graph showing Current Ratio 59
4.3.3.2 Graph showing Liquid Ratio 60
4.3.3.3 Graph showing Cash Position Ratio 61
4.3.3.4 Graph showing Total Debt Ratio 62
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LIST OF TABLES
4.3.1.1 Table showing Gross Profit Ratio 47
4.3.1.2 Table showing Net Profit Ratio 49
4.3.1.3 Table showing Operating Profit Ratio 50
4.3.1.4 Table showing Return on Investment 51
4.3.1.5 Table showing Return on Shareholders’ Funds 52
4.3.2.1 Table showing Capital Turnover Ratio 53
4.3.2.3 Table showing Fixed Assets Turnover Ratio 55
4.3.2.4 Table showing Working Capital Turnover Ratio 56
4.3.3.1 Table showing Current Ratio 58
4.3.3.2 Table showing Liquid Ratio 60
4.3.3.3 Table showing Cash Position Ratio 61
4.3.3.4 Table showing Total Debt Ratio 62
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CHAPTER-1
INTRODUCTION
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1.1 GENERAL INTRODUCTION
Financial performance analysis is the process of identifying the financial
strengths and weaknesses of the firm by the use of financial statements. The
analysis can be either conducted by the management or by the external parties.
The analysis is mainly conducted to gain information on the performance of
the company and the ability of the firm to service in the market from its
competitors.
The analysis is of two types. They are
a) External Analysis: When the analysis is undertaken by outsides or
externals (the people who are not a part of the management of the firm)
namely existing and prospective investors, suppliers, lenders,
government agencies, customers etc., it is external financial statement
analysis. These external parties do not have any access to the internal
records of the company. So, they have to depend almost entirely on the
published financial statements.
b) Internal Analysis: This analysis is undertaken by the management of
the company to monitor its financial and operating performance. As the
analysis is done by the party who has access to the internal records and
policies, it is expected to be more effective and reliable.
Financial statements are the formal record of the financial activities of

the firm. It contains the details of transactions taken place in the firm. It is
prepared in a structured manner or in a particular format which is
understandable by all. The financial statements are used by management for
analysis and for decision making. The important 4 financial statements include
Balance Sheet, Income Statement, Cash Flow Statement, and Statement of
changes in Equity.
According to Frich Kohlar “The performance is a general term applied to

a part or to all the conducts of activities of an organization over a period of
time often with reference to past or projected cost efficiency, management
responsibility or accountability or the like”.
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Financial performance is the act of performing financial activities and
is the result of the firms operations in monetary terms. It is the process results
of firms’ policies and operations and the overall financial health or financial
condition over a given period of time.
Objective of financial performance analysis
 To examine efficiency of various business activities.
 To find out the financial performance of a company.
 To compare the performance of a company for different periods.
 To determine the long term liquidity and solvency of the business

concern.
 To decide about the future prospects of the business concern.
 To know the profitability and collection policy of the business concern.
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1.2 REVIEW OF LITERATURE
 Secchi and Tmamgni (2008), “Industrial and Corporate Changes”, say

that profitability and productivity are two crucial dimensions of firms’
performance. Here various parametric and non parametric excises
where used on a panel of Italian firms which included both
manufacturing and service sectors during the period of 1998-2003.
Here the third dimensions (i.e., the growth) was also investigated and
found that there is weak market pressure and little behavioural
inclination for the efficient and more profitable firms to grow faster.
 Efendioglu and Karabulut (2010), “Impact of strategic planning on

financial performance of companies in Turkey” studies the impact of
strategic planning on financial performance of various industries in
Turkey. The study is a longitudinal one because it examines the
financial performance of both domestic and foreign firms over a time,
as the company incorporate the use of strategic planning. The study
shows a positive response on the performance of firms.
 Brown and Davison (2010), “The best way to measure company

performance” states in the article that most Wall Street analysts and
investors focus on return on equity to measure the company
performance. Even though there are many sophisticated valuation
techniques like IRR, DCF, etc, modelling to measure the company
performance, ROE method is used. Stock buyback and debt leaverage
are used as tools to maintain the return on equity.
 Mirza and Javed (2013), “Determination of financial performance of a

firm: case of Pakistani stock market” examines the financial
performance and the possible associations such as economic indicators,
corporate governance, ownership structure, capital structure and risk
managements. This study is examined 60 Pakistani corporate firms
listed
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in Karachi Stock Exchange for a period of 2007 to 2011. The study
says that there is a positive association between corporate governance
and risk management and performance and also states there is a mixed
result for the other variables.
 Lu and Tayor (2015), “Which factors moderate the relationship

between sustainability performance and financial performance?”
addresses on the relationship between the Corporate Sustainability
Performance (CSP) and Corporate Financial Performance (CFP). The
analysis compares both social sustainability and environmental
sustainability and says that the environmental sustainability has a
positive contribution towards the CSP and CFP relationship. The article
concludes by saying that the U.S sample firms show a stronger impact
on the positive relationship between the CPS and CFP than the other
country sample firms.
 Tuan, Nhan and Giang (2016), “ the effects of innovation on the firm
performance of supporting industries in Hanoi, Vietnam” says that
innovation which includes product, process, marketing and
organisational innovation within the firm are the main components of
firm performance( includes production, market and financial
performance). The study finding says that there are positive effects of
innovation on firms’ performance.
 Eneizan (2016), “effects of green marketing strategy on the financial

and non- financial performance of the firm” studies the effect of green
marketing strategy on the firm’s performance. The green marketing
strategy includes the following: green products, green process, green
distribution, green promotion, etc. The study says that the firm which
adopts green marketing strategy are expected to generate more profits
than that of those firms who does not adopt the green marketing
strategy.
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1.3 INDUSTRIAL PROFILE
The history of the automobile begins as early as 1769, with the creation
steam-engine automobiles capable of human transport. In 1807, Francois Isaac
de Rivaz designed the first car powered by an internal combustion
engine running on fuel gas (hydrogen and oxygen), which although not in itself
successful led to the introduction of the ubiquitous modern gasoline or petrol
fuelled internal combustion engine in 1885. The year 1886 is regarded the year
of birth of the modern automobile - with the Benz Patent-Motorwagen, by
German inventor Karl Benz.
The automobile is a primary mode of transportation for many

developed economies. The Detroit branch of Boston Consulting Group predicts
that, by 2014, one-third of world demand will be in the four BRIC markets
(Brazil, Russia, India and China). Other potentially powerful automotive
markets are Iran and Indonesia.
Automobile industry at global level

The modern global automobile industry encompasses the principal
manufacturers, General Motors, Ford, Toyota, Honda, Volkswagen, and
Daimler Chrysler, all of which operate in a global competitive marketplace. It
is suggested that the globalization of the automobile industry, has
greatly
accelerated during the last half of the 1990’s due to the construction of important
overseas facilities and establishment of mergers between giant multinational

automakers. Increasing global trade has enabled the growth in world
commercial distribution systems, which has also expanded global competition
amongst the automobile manufacturers. Japanese automakers in particular,
have instituted innovative production methods by modifying the U.S.
manufacturing model, as well as adapting and utilizing technology to enhance
production and increase product competition.
Major players: The Automobile industry includes designing, manufacturing,
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and marketing of the world's commercial vehicles, such as automobiles
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(passenger cars), trucks (lorry), buses, motorcycles, and motorized bicycles.
The US is one of the leading players in the Automobile industry, in terms of
production and consumption of vehicles. Some of the countries that are
predicted to be major players in the Automobile industry in the near future
include Brazil, Russia, India, China, Iran, and Indonesia.
Global sales of passenger cars are forecasted to hit 72.2 million

vehicles in 2014. Along with China, the United States is counted among the
largest automobile markets worldwide, both in terms of production and
sales. About 7.24 million passenger cars were sold to U.S. customers in 2012,
and around 4.11 million cars were produced in the same year. In terms of
revenue, Toyota, Volkswagen and General Motors top the list of major
automobile makers, while the automotive supplier industry is dominated by
Bosch, Continental, Denso and Bridgestone.
Growth rate - Global car sales are set to rise from 81 million last year to 116
million in the next decade. Most of that growth will be in emerging markets,
with the BRIC countries acting as the primary drivers until 2020.
Major players in the automobile industry in the world
With the ever-increasing competition in the automobile market, many

companies are coming up with products that would attract people across the
world. There are manufacturers who mint money selling a lot of cars, while
there are others that make fortune-selling trucks. If Volkswagen is known for
biggest car manufacturer globally, then Toyota beats the market by selling
highest numbers of trucks in the world. In 2010 the company employed up to
400,000 across the world. It is the largest producer of trucks and 2nd largest
manufacturer of cars in the world. The company manufactures 8,381,968 cars
annually.
Some of the major players throughout the world include:

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 Volkswagen Group
 Toyota Motor Corporation
 General Motors Company, LLC
 Nissan Motor Corporation
 Bayerische Motoren Werke AG (BMW)
 Daimler AG
 Fiat S.P.A.
Automobile Industry in India
An embryonic automobile industry emerged in India in the

1940s. Hindustan was launched 1942, long time competitor Premier in 1944.
They built GM and Fiat products respectively. Mahindra and Mahindra were
established by two brothers in 1945, and began assembly of Jeep CJ-3A utility
vehicles. Following the independence, in 1947, the Government of India and
the private sector launched efforts to create an automotive component
manufacturing industry to supply to the automobile industry.
In 1953 an import substitution programme was launched, and the

import of fully built-up cars began to impede. However, the growth was
relatively slow in the 1950s and 1960s due to nationalization and the license,
which hampered the Indian private sector. Total restrictions for import of
vehicles were set and after 1970 the automobile industry started to grow, but
tractors, commercial vehicles and scooters mainly drove the growth. Cars were
still a major luxury item.
In the 1970s price controls were finally lifted, inserting a competitive

element into the automobile market. By the 1980s, the automobile market was
still dominated by Hindustan and Premier, who sold superannuated products in
fairly limited numbers.
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Automobile industry is booming in this century. India is one of the key
players in the international automobile market. One of the fastest growing
sectors in India is the automobile industry. High demand for cars, two wheelers
and other vehicles has driven the growth of the automobile sector.
Major players in the Indian automobile industry

 Tata Motors- Tata Motors is a leader in automobile industry for last
couple of years in the country; it is a flagship company of prestigious
Tata group. It is the largest manufacturer of truck, buses and
commercial vehicle. Tata is also major player in car manufacturing in
India. Its major selling car models are Indica, Indigo, Safari and Nano.
 Maruthi Suzuki- Maruthi Suzuki is India’s no. 1 car manufacturer,
which is dominating ever since it was established in year 1981. It is a
joint venture between Maruthi India and Suzuki Japan. It offers multi
segment cars like Alto, Ertiga, Swift, Desire etc.
 Hyundai- Hyundai is a South Korean multinational automobile
company and second best car manufacturer in India. Company’s top car
selling model includes i10, i20 and Verna.
 Ashok Leyland- Ashok Leyland has been a leading automotive
company in commercial vehicle category headquartered in Chennai.
The company deals in trucks, buses and other MUV which are supplied
to many government organizations like defence, state transports and
Industry.
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CHAPTER- 2
ORGANIZATIONAL STUDY
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2.1 COMPANY PROFILE
Toyota Motor Corporation is a Japanese automotive manufacturer

headquartered in Toyota, Aichi, Japan. In March 2014 the multinational
corporation consisted of 338,875 employees worldwide and, as of November
2014, is the twelfth-largest company in the world by revenue. Toyota was the
largest automobile manufacturer in 2012 (by production) ahead of the
Volkswagen Group and General Motors. In July of that year, the company
reported the production of its 200-millionth vehicle. Toyota is the world’s first
automobile manufacturer to produce more than 10 million vehicles per year.

As of July 2014, Toyota was the largest listed company in Japan by market
capitalization and by revenue
The history of Toyota started in 1933 with the company being a

division of Toyoda Automatic Loom Works devoted to the production of
automobiles under the direction of the founder's son, Kiichiro Toyoda. Kiichiro
Toyoda had traveled to Europe and the United States in 1929 to investigate
automobile production and had begun researching gasoline-powered engines in
1930. Toyoda Automatic Loom Works was encouraged to develop automobile
production by the Japanese government, which needed domestic vehicle
production, due to the war with China. In 1934, the division produced its first
Type A Engine, which was used in the first Model A1 passenger car in May
1935 and the G1 truck in August 1935. Production of the Model AA passenger
car started in 1936. Early vehicles bear a striking resemblance to the Dodge
Power Wagon and Chevrolet, with some parts actually interchanging with their
American originals.
The company invests heavily in 2,000 plus workforce of team members

and management employees and creating a culture of high performing
empowered teams working seamlessly across processes in search of quality
and continuous improvement (kaizen). The core values of the company
encourage employees to pursue high standards of business ethics and safety,
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communicate
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candidly by giving bad news first and respect for people. The bi-annual TMC
morale surveys show employees giving a high positive score to the IMC work
environment and level of job satisfaction.
The company has played a major role in the development of the entire
value chain of the local auto industry and is proud to have contributed in
poverty alleviation at the grass root level by nurturing localization that in turn
has directly created thousands of job opportunities and transferred technology
to 60 vendors supplying parts. IMC is also a major tax payer and significant
contributor towards GOP exchequer.
Logo and branding: In 1936, Toyota entered the passenger car market
with its Model AA and held a competition to establish a new logo emphasizing
speed for its new product line. After receiving 27,000 entries, one was selected
that additionally resulted in a change of its moniker to “Toyota” from the family
name “Toyota”. The new name was believed to sound better, and its eight-stroke
count in the Japanese language was associated with wealth and good fortune.
The original logo no longer is found on its vehicles, but remains the corporate
emblem used in Japan. Still, no guidelines existed for the use of the brand
name,
so “TOYOTA”, which was used throughout most of the world, led to
inconsistencies in its worldwide marketing campaigns.
To remedy this, Toyota introduced a new worldwide logo in October

1989 to commemorate the 50th year of the company, and to differentiate it
from the newly released luxury Lexus brand. The logo made its debut on the
1989 Toyota Celsior and quickly gained worldwide recognition. The three
ovals in
the new logo combine to form the letter “T”, which stands for Toyota. The
overlapping of the two perpendicular ovals inside the larger oval represent the
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mutually beneficial relationship and trust between the customer and the
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company, while the larger oval surrounding both of these inner ovals represents
the "global expansion of Toyota’s technology and unlimited potential for the
future. The new logo started appearing on all printed material, advertisements,
dealer signage, and the vehicles themselves in 1990.
Company strategy: Toyota's management philosophy has evolved from the
company's origins and has been reflected in the terms “Lean Manufacturing” and
Just in Time Production, which it was instrumental in developing. Toyota’s
managerial values and business methods are known collectively as the Toyota
Way.
In April 2001, Toyota adopted the “Toyota Way 2001”, an expression of
values and conduct guidelines that all Toyota employees should embrace.
Under the two headings of respect for people and continuous improvement,
Toyota summarizes its values and conduct guidelines with these five
principles:
 Challenge
 Kaizen (improvement)
 Genchi genbutsu (go and see)
 Respect
 Teamwork
According to external observers, the Toyota Way has five components:

 Long-term thinking as a basis for management decisions
 A process for problem-solving
 Adding value to the organization by developing its people
 Recognizing that continuously solving root problems drives
organizational learning
 The Toyota Way incorporates the Toyota Production System.
Toyota has grown to a large multinational corporation from where it
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started and expanded to different worldwide markets and countries.
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Worldwide presence
Toyota has factories in most parts of the world, manufacturing or
assembling vehicles for local markets in Japan, Australia, India, Sri Lanka,
Canada, Indonesia, Poland, South Africa, Turkey, Colombia, the United
Kingdom, the United States, France, Brazil, Portugal, and more recently,
Argentina, Czech Republic, Mexico, Malaysia, Thailand, Pakistan, Egypt,
China, Vietnam, Venezuela, the Philippines, and Russia.
Nandi Toyota
 Nandi Toyota started operation in January 2000.

 Nandi Toyota - Bangalore & Mysore.
 Popular Auto match - Used Car Division in Bangalore –2 Outlets
 Manpower strength is 500. Consisting of Engineers, Diploma / ITI,
MBA, Graduates, Under-Graduates.
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2.2 COMPANY HIERARCHY
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2.3 VISION AND MISSION
Nandi Toyota will lead the way to the future of mobility, enriching
lives around the world with the safest and most responsible ways of moving
people.
VISION
“To be the most respected and successful enterprise, delight customers with a
wide range of products and solutions in the automobile industry with the best
people and best technology.”
 The most respected.
 The most successful.
 Delighting customers.
 Wide range of products.
 The best people.
 The best technology.
MISSION
Mission of Nandi Toyota is to provide safe and sound journey. Nandi

Toyota is developing various new technologies from the perspective of energy
saving and diversifying energy sources. Environment has been first and most
important issue in priorities of Nandi Toyota and working toward creating a
prosperous society and clean world.
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2.4 OBJECTIVE
Effective and efficient utilization of resources to produce cars for
customer satisfaction and a long term strategic plans for growth.
Profitability: To focus on controlling costs in both production and operations

while maintaining the profit margin on products sold.
Productivity: Employee training, equipment maintenance and new equipment

purchases all go into company productivity. The main objective is to provide
all of the resources to the employees which they need to remain as productive
as possible.
Customer Service: Good customer service helps to retain clients and generate
repeat revenue. Keeping the customers happy is the primary objective of Nandi
Toyota.
Employee Retention: Employee turnover costs us the money in lost

productivity and the costs associated with recruiting, which include
employment advertising and paying placement agencies. Maintaining a
productive and positive employee environment improves retention.
Marketing: Marketing is more than creating advertising and getting customer

input on product changes. It understands consumer buying trends, being able to
anticipate product distribution needs and developing business partnerships that
help Toyota to improve market share.
Competitive Analysis: A comprehensive analysis of the activities of the

competition is an ongoing business objective. Understanding where the
products of Toyota rank in the marketplace helps to determine how to improve
the standing among consumers and improve revenue.
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2.5 PRODUCTS AND SERVICES OFFERED
I. PRODUCTS AND SPECIFICATION
 FORTUNER
SPECIFICATION:
 3.0L Diesel engine, intercooler turbocharger
 Tank capacity-80 litres
 Steering wheel with audio, MID and Bluetooth control
switches
 2WD with 5-speed automatic transmission
 Mileage 12.26kmpl
 INNOVA
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SPECIFICATION:
 D-4D common-rail diesel engine, VVT-I petrol engine
 Tank capacity- 55 litres
 Collapsible steering column
 7 seater, transmission- 5 speed model
 Mileage diesel- 12.06kmpl, petrol- 10,37kmpl
 LC PRADO
SPECIFICATION:
 D-4D Diesel with Intercooler Turbocharger, 4

Cylinders In-line
 Fuel Tank Capacity 87 litres
 5 speed Automatic transmission
 Roof Rails, Rear Spoiler [with Integrated High
Mount Stop Lamp]
 Mileage– 23.91kmpl
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 YARIS
SPECIFICATION:
 1.5 Dual VVT-I Engine, 1496 cc Engine

Displacement
 Fuel Tank Capacity- 42 liters
 Front and rear power windows
 Mileage- 17.1kmpl
 ETIOS
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SPECIFICATION:
 Petrol-4-Cylinder 16V, DOHC, Diesel-4-

Cylinder 8V, SOHC, D-4D
 Electronic power steering with tilt function
 Tank Capacity- 45 litres
 Transmission- 5 speed manual
 Mileage diesel- 22.33kmpl, petrol- 16.85kmpl
 ETIOS LIVA
SPECIFICATION:
 0.0012m3(1.2L) DOHC PETROL ENGINE and

New TRD Sportive Engine
 0.0014m3(1.4L) D-4D DIESEL ENGINE
 Tank Capacity- 45 litres
 Transmission -5 speed manual
 Mileage diesel- 23.59kmpl, petrol-17.71kmpl
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II. SERVICES OFFERED
 EXPRESS MAINTAINANCE
 3 highly trained technicians work simultaneously
 Quality check is an inherent part of each process
 Specially designed tools and equipment’s
 Watch your car being serviced
 Get your vehicle delivered in 60 minutes
 QUICK VEHICLE INFORMATION

 Assure faster response and resolution to all customer
quires
 Watch live status of your vehicle being serviced
 Get service reminder, special offers and book
appointment to on a call
 QUICK NETWORK REACH

 Widespread network which is constantly growing
 Designed to enhance customer convenience and
equipped with latest equipments
 Stop shop solutions for all your needs like finance,
insurance, service, parts lubricants, tire, battery and car
care solutions under one roof.
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 TOYOTA’S QUALIFIED MANPOWER
 Recruited from best technical institutes supported by
Toyota under Toyota Technical Education Program
initiative
 Toyota technicians are continuously groomed through
Toyota Global Training System
 UNMATCHED WARRANTY
 Best in class vehicle warranty[100,000km/3years]
 Warranty begins from date of sale of vehicle to the first
customer
 Warranty covers for repairs or replacement of any
Toyota found defective
 TOYOTA’S GENUINE PARTS

 Over the years, heavy investments in R&D have been
made to study the design, material selection and internal
construction of Toyota Genuine Parts. These parts are
also tested under various simulated extreme conditions
to ensure quality, reliability and durability
 All Toyota Genuine Parts carry 6 months/10,000 km.
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2.6 DEPARTMENTAL STUDIES
1. FINANCE DEPARTMENT
This department is mainly stands to maintain the accounts related to
revenue, expenditure on account of employees salary, payment to outside
agencies and to account for miscellaneous expenditure.
FUNCTIONS OF FINANCE DEPARTMENT

 Maintain an appropriate system of budgetary control based on the
program of operation and reporting the same to the management.
 Management of financial resources for meeting the companies program
of operation and capital expenditure.
 Find out ways and means to minimize expenditure, which include
efficiency and profitability.
 Maintain the financial accounts and cost accounts according to the
necessity under various statutory and other requirements.
 Arrangement of funds, utilisation of fund in the best interest of the
company.
 Payment to employees and outside parties and its maintenance of
accounts.
 It renders advice to other departments of the company.
Financial Information of Nandi Toyota:

 Total Turnover in 2016-2017 Rs.1000 Crores.
 Service present volume 3200 units/month.
 Used Car about 150units/month.
 Service Labor about Rs. 6.5 Millions/month.
 Parts and Accessories Rs. 10Millions/month.
2. MARKETING DEPARTMENT
STP
SEGMENT :
37
It is very important for firms to split their clients into different
segments, grouping together those clients with similar characteristics which
have similar needs. This process is called ‘segmentation’ and it identifies the
most attractive and profitable segments and also those with the highest
potential in growth. Toyota mainly deals with SUV, Sedan, Hatchback and
Hybrid Segment of cars. It has a wide variety of segments suitable for different
individuals.
TARGET GROUP:
Targeting is giving more relevance to a considered particular segment.
It’s a process of evaluating each segment’s attractiveness and then selecting
one or more segments to enter, depending on the demand for each segment.
The target audience set is from the upper middle class to upper class society.
Young executives, businessmen, urban families are the main target groups.
POSITIONING:
Positioning is placing the product in the minds of the people. The
quality of service provided plays an important role in the position. In Toyota it
is positioned as a car manufacturer which provides power, performance along
with reliability.
Advertising:
 Newspapers
 Magazines
 Posters & Billboards
 Company Website
 Commercial advertisements on television and radio
 Advertisements on social networking sites.
 Display of the cars in shopping malls so as to attract the attention of
the customers.
38
These are the main section of the market departments:
39
 Sales department is responsible for the sales and distribution of the
products to the different regions.
 Research & Department is responsible for market research and testing
new products to make sure that they are suitable to be sold.
 Promotion department decides on the type of promotion method for the
products, arranges advertisements and the advertising media used.
 Distribution department transports the products to the market.
3. PRODUCTION SYSTEM
The Toyota Production System (TPS) is an integrated socio-technical
system, developed by Toyota that comprises its management philosophy and
practices. The TPS organizes manufacturing and logistics for the automobile
manufacturer, including interaction with suppliers and customers. The system
is a major precursor of the more generic "lean manufacturing." Taiichi Ohno,
and Eiji Toyota developed the system between 1948 and 1975.
The main objectives of the Toyota production system are to design out
overburden, inconsistency and to eliminate waste. The most significant effects
on process value delivery are achieved by designing a process capable of
delivering the required results smoothly by designing out inconsistency. It is
also crucial to ensure that the process is as flexible as necessary without stress
overburden since this generates waste. Finally the tactical improvements of
waste reduction or the elimination of are very valuable. There are seven kinds
of that are addressed in the TPS:
 Waste of over production (largest waste)
 Waste of time on hand (waiting)
 Waste of transportation
 Waste of processing itself
 Waste of stock at hand
 Waste of movement
 Waste of making defective products
40
The elimination of waste has come to dominate the thinking of many
when they look at the effects of the TPS because it is the most familiar of the
three to implement. In the TPS many initiatives are triggered by inconsistency
or over-run reduction which drives out waste without specific focus on its
reduction.
4. HUMAN RESOURCE DEPARTMENT

The Management strongly believes that their major strength is their
manpower. It considers that it is a privilege to enrich & enhance this strength
all the time. The Management is firmly committed to provide an environment
conducive to all round development of all their staff members. Training is
considered to be an inherent part of employee development and it is an
ongoing process in the organization.
Salary, Incentives, allowance and working hours:

Salaries will be disbursed on the last working day of the month.
Incentives: Employees are eligible for incentives on achieving their targets and
will be disbursed on every 15th day of next month.
Allowances for Field Staff: Field Staff are entitled to the following benefits:
1. Daily Allowance
2. Petrol/Travelling Allowance
Working Hours: Working time is from 9 am to 6 pm with one hour lunch break.
CODE OF CONDUCT
Attendance and punctuality:

 It is the duty of each and every employee to mark his / her attendance
as soon as he/she enters into the office.
 All employees are given Biometric registration to mark their attendance
in their respective branches.
41
 Employees who arrive late to office i.e. after 9.00 am for more than
three days in the month will be considered as half day leave for each
late coming.
 It is mandatory to mark the attendance those who are working on
Holidays.
Dress code and personal grooming:

 Uniforms will be distributed to all the employees by free of cost once in
a year.
 For technicians uniforms and shoes will be given twice in a year.
 All employees are expected to wear their allotted uniforms from
Monday to Friday (excluding technicians).
 On Saturdays all employees are allowed to wear formal wears.
 Male employees are expected to shave everyday and French, dot beard
are not allowed.
 Female employees are expected to come with proper grooming (Not
allowed to leave free hairs, keep flowers, sleeveless salwar, Jean & T-
Shirts, skirts) Supposed to wear salwar with duppatta, sarees and
western formals.
2.7 SWOT ANALYSIS

SWOT Analysis is the most renowned tool for audit and analysis of the
overall strategic position of the business and its environment. Its key purpose is
to identify the strategies that will create a firm specific business model that will
best align an organization’s resources and capabilities to the requirements of
the environment in which firm operates. In other words, it is the foundation for
evaluating the internal potential and limitation and the probable opportunities
and threats from external environment. It views all positive and negative
factors inside and outside the firm that affect success.
STRENGTHS
42
 Wide range of car variants to offer.
 One of the oldest and reputed car manufacturers which brings high
brand awareness.
 Over 310,000 employees.
 A pioneer in hybrid technology and its production values like kaizen,
kanban are benchmarks in manufacturing.
 Highly diversified product portfolio.
 World class R&D and Engineering capabilities.
 High brand awareness and market presence in the international market.
 Popular in motor sport and sponsoring events.
WEAKNESS
 Immense competition from world class competitors.
 Lesser grip in European market as compared to other
car manufacturers.
OPPORTUNITY
 Expanding Automobile market and opportunities for launching new
products.
 Concentrated efforts in hybrid segment can help Toyota become
a market leader.
 Augmenting worldwide distribution and servicing network to
increase market penetration.
THREATS
 Intense competition in the market leading to saturation.
 Competition offering innovative features at lower price.
 New entrants in the same segment with better features and lower price.
 Car manufacturers catering to high ended customers.
43
CHAPTER- 3
RESEARCH METHODOLOGY
44
3.1 BACKGROUND OF THE STUDY
Financial performance analysis is the process of identifying the
financial strengths and weaknesses of the firm by properly establishing the
relationship between the items of balance sheet and profit and loss account. It
also helps in short-term and long-term forecasting and growth can be identified
with the help of financial performance analysis.
Financial performance analysis is done by analysising the financial
statement i.e, mainly the balance sheet of the company. Financial performance
analysis helps to know the financial position of the company as well as to
forcaste future trend.
Financial performance analysis is done by using ratio analysis, comparitive
statement, common size statement and trend analysis.
The main purpose of financial analysis is to find out the financial
condition or current financial situation of the company. The financial condition
include profitability, working capital, return on investment, return on
shareholders fund, comparation of the present balalnce sheet and profit and
loss account with the past once to learn about the changes happening in the
company performance, etc.
3.2 STATEMENT OF THE PROBLEM

A study on the the financial performance of Nandi Toyota from the
financial year 2012-13 to 2016-17.
The study on financial performance basically involves analysis of the
financial performance of the company. The analysis is done on the financial
statements i.e. Balancesheet and Profit and Loss Account.
This study is mainly done through comparative statement, trend
analysis and ratio analysis. Financial performance analysis is the process of
identifying the financial strengths and weaknesses of the firm by properly
establishing the relationship between the items of balance sheet and profit and
loss account.
45
3.3 NEED AND IMPORTANCE OF THE STUDY
The various need and importance of the study are as follows:
 To find out the strength and weakness of company: it is very
important to kow the company financial strength and weakness. The
weakness should be mainly taken into consideration and should be
analysed properly.
 To forcaste the future value of the company: the financial
performance analysis helps the company to forcaste its future value.
 To make investment decisions: the company can take investment
decisions if the company has more profit or funds in its hands and
increase profit.
 To make decisions on market expansions: the financial performance
analysis helps the company to know its current position and can make
decisions of market expansion and attract more customers.
 To access the factors influencing the financial performance of the
firm: The factors which influence the financial performance are studied
so that the company can concentrate on them and take various financial
decisions.
3.4 LIMITATIONS OF THE STUDY

The various limitations of the study are as follows:
 The project duration is only 45 days.
 The financial statements which are used for the analysis is of past 5
years only.
 The analysis is based on annual reports of one company and not
compared with its competitors.
 The study concentrates only on financial performance and does not
consider any other concepts.
 The statements used are only Balance sheet and Profit and Loss
Account and does not use any other statements like Cash Flow
Statement, etc.
46
3.5 OBJECTIVES OF THE STUDY
The various objective of the study are as follws:
 To study and analyze the financial performance of Nandi Toyota.
 To study the working capital management of the firm.
 To analyze the financial changes over a period of five years.
 To evaluate the financial position of the company in terms of solvency,
profitability, activity and earnings ratios.
3.6 TYPE OF RESEARCH

Quantitative methods emphasize objective measurements and the statistical,
mathematical, or numerical analysis of data collected through polls,
questionnaires, and surveys, or by manipulating pre-existing statistical data
using computational techniques. Quantitative research focuses on gathering
numerical data and generalizing it across groups of people or to explain a
particular phenomenon.
3.7 METHOD
OFDATACOLLECTION
SECONDARY DATA:
The secondary data are data are collected from information which is used
by other. It is not direct information. This information is already collected and
analysis by other and that information is used by others. The secondary data
are collected from following:-
 Company’s annual report (Balance sheet, Profit and Loss Account)

 Newspaper, Magazines
 Company’s website
3.8 TOOLS USED IN ANALYSIS

The tools used in the analysis of financial performance of Nandi Toyota are as
follows:
47
 Comparative balance sheet: The comparative balance sheet is helpful
in analysing and evaluating the financial position of the firm over a
period of years. The comparative balance sheet analysis is the study of
the trend of the same items, group of items, and computed items in two
or more balance sheet of the same business enterprise on different
dates. The changes in periodic balance sheet items reflect the conduct
of a business. The changes can be observed by comparison of the
balance sheet at the beginning and at the end of the period and these
changes can help in forming an opinion about the progress of an
enterprise.
 Comparative income statement: A comparative income statement is a
statement prepared to compare the various items of the income
statement of the different periods and to ascertain the changes, i.e., the
increases or decreases that have taken place in the items of income
statements from one period to another. In the comparative income
statement, the figures of revenue and costs for the current period and
previous period are given.
 Trend analysis: The ‘trend’ signifies a tendency and as such the
review and appraisal of tendency in accounting variables are nothing
but the trend analysis. Trend analysis is carried out by calculating trend
ratio. Trend analysis is significant for forecasting and budgeting. Trend
analysis discloses the change in financial and the operating data
between specific periods.
 Ratio analysis: A ratio analysis is a quantitative analysis of information
contained in a company’s financial statements. Ratio analysis is based
on line items in financial statements like thebalance sheet, income
statement and cash flow statement. Ratio analysis is used to evaluate
various aspects of a company’s operating and financial
performance such as its efficiency, liquidity, profitability and solvency.
The ratio analysis include:
 Profitability ratio
 Turnover ratio
48
 Solvancy or financial ratio
49
3.9 PERIOD OF THE STUDY
The study covers the period of 2012-2013 to 2016- 2017
50
CHAPTER- 4
ANALYSIS AND INTERPRETATION
OF DATA
51
4.1 COMPARATIVE STATEMENT
4.1.1 COMPARITIVE BALANCESHEET OF 2012-13 AND 2013-14
2012-13 Changes(increase or
(in 2013-14 decrease)
Particulars millions) (in millions) Percentage
Amount (%)
EQUITY AND LIABILITY
Shareholders fund
a. Share capital 12,148,035 14,469,148 2,321,113 19.1
b. Non controlling interests 624,821 749,839 125,018 20
Non Current Liabilities

a. Long term borrowings 7,337,824 8,546,910 1,209,086 16.47
b. Accrued pension and severance costs 766,112 767,618 1,506 0.196
c. Deferred income taxes 1,385,927 1,811,846 425,919 30.73
d. Other long term liabilities 308,078 411,427 103,349 33.54
Current Liabilities
a. Short term borrowings 4,089,528 4,830,820 741,292 18.12
b. Trade payables 2,834,843 3,058,644 223,801 7.89
c. Current position of long term debt 2,704,428 2,949,663 245,235 9.06
d. Accrued expenses 2,185,537 2,313,160 127,623 5.83
e. Other current liabilities 1,098,184 1,528,398 430,214 39.17
TOTAL 35,483,317 41,437,473 5,954,156 16.78
ASSETS
Non Current Assets
a. Fixed assets 18,223,620 19,764,791 1,541,171 8.45
b. Accumulated depreciation -11,372,381 -12,123,493 -751,112 6.6
c. Investments and other assets 7,903,422 9,976,175 2,072,753 26.22

d. Long term trade receivables 6,943,766 8,102,294 1,158,528 16.68
Current Assets
a. Cash and cash equivalents 1,718,297 2,041,170 322,873 18.79
b. Inventories 1,715,786 1,894,704 178,918 10.42
c. Trade receivables 7,522,012 8,016,348 494,336 6.57
d. Deferred income taxes 749,398 866,386 116,988 15.61
e. Marketable securities 1,552,363 2,227,084 674,721 43.46
f. Other current assets 527,034 672,014 144,980 27.5
TOTAL 35,483,317 41,437,473 5,954,156 16.78
52
INTERPRETATION
 The above table shows the comparative Balance sheet for the years
2012- 13 and 2013-14 of Nandi Toyota Ltd. There is an increase in the
value of the share capital by 19.1% in 2013-14 when compared to
2012-13.
 The value of non controlling interest is increased by 20% in 2013-14
when compared to 2012-13.
 Under Non-Current Liabilities, the value of long term borrowings,
accrued pensions and severance cost, deferred income taxes and other
long term liabilities has increased in 2013-14 by an average of 16.47%,
0.196%, 30.73% and 33.54% respectively when compared to 2012-13.
 Current Liabilities, the value of short term borrowings, trade payables,
accrued expenses and other current liabilities has increased by an
average of 18.12%, 7.89%, 5.83% and 39.17% respectively in 2013-14
 In the Assets side, under Fixed Asset the value has increased on an
average of 8.45% in 2013-14, when compared to 2012-13, and
accumulated depreciation has increased by an average of 6.6% in 2013-
14, when compared to 2012-13.
 Under the Other Non Current Assets, the investments and other assets
has increased by an average of 22.22% in 2013-14 when compared to
2012-13.
 Under Current Assets, the cash and cash equivalence value has
increased by an average of 18.79% in 2013-14 when compared to
2012-13.
 There is an increase in the value of inventories, trade receivables,
deferred income taxes, marketable securities and other current assets by
an average of 10.42%, 6.57%, 15.61%, 43.46% and 27.5% respectively
in 2013-14 when compared to 2012-13.
53
4.1.2 COMPARITIVE BALANCESHEET OF 2013-14 AND 2014-15
2014-15 Changes
2013-14 (in (Increase/Decrease)
Particulars (in millions) millions) Percentage
Amount (%)
Shareholders fund
a. Share capital 14,469,148 16,788,131 2,318,983 16.02
b. Non controlling interests 749,839 859,198 109,359 14.58

a. Long term borrowings 8,546,910 10,014,395 1,467,485 17.16
b. Accrued pension and severance
costs 767,618 880,293 112,675 14.67
c. Deferred income taxes 1,811,846 2,298,469 486,623 26.85
Current Liabilities
b. Trade payables 3,058,644 3,323,601 264,957 8.66
e. Other current liabilities 1,528,398 1,475,737 -52,661 -3.44
TOTAL 41,437,473 47,729,830 6,292,357 15.18
ASSETS
Non Current Assets
a. Fixed assets 19,764,791 22,364,429 2,599,638 13.15
c. Investments and other assets 9,976,175 11,295,183 1,319,008 13.22

d. Long term trade receivables 8,102,294 9,202,531 1,100,237 13.57
Current Assets
b. Inventories 1,894,704 2,137,618 242,914 12.82
d. Deferred income taxes 866,386 978,179 111,793 12.90
f. Other current assets 672,014 805,393 133,379 19.84
TOTAL 41,437,473 47,729,830 6,292,357 15.18
54
INTERPRETATION
2013-14.
 The value of non controlling interest is increased by 14.58% in 2014-15
accrued pensions and severance cost, deferred income taxes and other
long term liabilities has increased in 2014-15 by an average of 17.16%,
14.67%, 26.85% and 11.28% respectively when compared to 2013-14.
 Under the Current Liabilities, the value of short term borrowings, trade
payables and accrued expenses has increased by an average of 4.49%,
8.66% and 15.36% respectively in 2014-15 when compared to 2013-
14.
 The value of other current liabilities has decreased by an average of
3.44% in 2014-15 when compared to 2013-14.
accumulated depreciation has increased by an average of 7.79% in
2014- 15, when compared to 2013-14.
has increased by an average of 13.22% in 2014-15 when compared to
2013-14.
increased by an average of 11.92% in 2014-15 when compared to
2013-14.
 There is an increase in the value of inventories, trade receivables,
deferred income taxes, marketable securities and other current assets by
an average of 12.82%, 9.76%, 12.90%, 31.62% and 19.84%
55
respectively in 2014-15 when compared to 2013-14.
56
4.1.3 COMPARATIVE BALANCESHEET OF 2014-15 AND 2015-16
Changes
2014-15 2015-16 (Increase/Decrease)
Particulars (in millions) (in millions) Percentage
Amount (%)
Shareholders fund
a. Share capital 16,788,131 17,226,714 438,583 2.61
b. Non controlling interests 859,198 861,472 2,274 0.26

a. Long term borrowings 10,014,395 9,772,065 -242,330 -2.41
costs 880,293 904,911 24,618 2.79
c. Deferred income taxes 2,298,469 2,046,089 -252,380 10.98
Current Liabilities
a. Short term borrowings 5,048,188 4,698,134 -350,054 -6.93
b. Trade payables 3,323,601 3,429,792 106,191 3.19
c. Current position of long term debt 3,915,304 3,822,954 -92,350 -2.35
TOTAL 47,729,830 47,427,597 -302,233 -0.63
ASSETS
Non Current Assets
a. Fixed assets 22,364,429 22,776,641 412,212 1.84
b. Accumulated depreciation -13,068,710 -13,036,224 32,486 -0.24
c. Investments and other assets 11,295,183 10,834,680 -460,503 -4.07

d. Long term trade receivables 9,202,531 8,642,947 -559,584 -6.08
Current Assets
b. Inventories 2,137,618 2,061,511 -76,107 -3.50
c. Trade receivables 8,799,230 8,364,239 -434,991 -4.94
d. Deferred income taxes 978,179 967,607 -10,572 -1.08
e. Marketable securities 2,931,420 2,543,423 -387,997 -13.23
f. Other current assets 805,393 1,333,345 527,952 65.55
TOTAL 47,729,830 47,427,597 -302,233 -0.63
57
INTERPRETATION
2014-15.
 The value of non controlling interest is slightly increased by 0.26% in
2015-16 when compared to 2014-15.
 Under Non-Current Liabilities, the value of long term borrowings has
decreased by an average of 2.41%. The value of accrued pensions and
severance cost, deferred income taxes and other long term liabilities has
increased in 2015-16 by an average of 2.79%, 10.98% and 7.43%
respectively when compared to 2014-15.
 Under the Current Liabilities, the value of short term borrowings and
other current liabilities has decreased by an average of 6.93% and
 The value of trade payables and accrued expenses has increased by an
average of 3.19% and 2.15% in 2015-16 when compared to 2014-15.
accumulated depreciation has decreased by an average of 0.24% in
2015- 16, when compared to 2014-15.
has decreased by an average of 4.07% in 2015-16 when compared to
2014-15.
 Under Current Assets, the cash and cash equivalence and other current
assets value has increased by an average of 28.66% and 65.55% in
2015- 16 when compared to 2014-15.
 There is a decrease in the value of inventories, trade receivables,
deferred income taxes and marketable securities by an average of
3.50%, 4.94%, 1.08% and 13.23% in 2015-16 when compared to 2014-
15.
58
4.1.4 COMPARATIVE BALANCESHEET OF 2015-16 AND 2016-17
Changes
2015- 16 2016-17 (Increase/Decrease)
Particulars (in millions) (in millions) Percentage
Amount (%)
Shareholders fund
a. Share capital 17,226,714 18,000,689 773,975 4.49
b. Non controlling interests 861,472 668,264 -193,208 -22.42

a. Long term borrowings 9,772,065 9,911,596 139,531 1.42
costs 904,911 905,070 159 0.01
c. Deferred income taxes 2,046,089 1,423,726 -622,363 -30.41
Current Liabilities
b. Trade payables 3,429,792 3,503,320 73,528 2.14

TOTAL 47,427,597 48,750,186 1,322,589 2.78
ASSETS
Non Current Assets
a. Fixed assets 22,776,641 23,649,094 872,453 3.83
c. Investments and other assets 10,834,680 11,707,160 872,480 8.05

d. Long term trade receivables 8,642,947 9,012,222 369,275 4.27
Current Assets
b. Inventories 2,061,511 2,388,617 327,106 15.86
d. Deferred income taxes 967,607 - -967,607 -
f. Other current assets 1,333,345 796,297 -537,048 -40.27
TOTAL 47,427,597 48,750,186 1,322,589 2.78
59
INTERPRETATION
2015-16.
 The value of non controlling interest is decreased by 22.42% in 2016-
17 when compared to 2015-16.
accrued pensions and severance cost and other long term liabilities has
increased in 2016-17 by an average of 1.42%, 0.01% and 6.09%
respectively when compared to 2015-16.
 Under the Current Liabilities, the value of short term borrowings, trade
payables and accrued expenses has increased by an average of 5.43%,
2.14% and 15.10% respectively in 2016-17 when compared to 2015-16.
 The value of other current liabilities has decreased by an average of
average of 3.83% and accumulated depreciation has also increased by
an average of 3.18% in 2016-17, when compared to 2015-16.
has increased by an average of 8.05% in 2016-17, when compared to
2015-16.
increased by an average of 1.89% in 2016-17, when compared to 2015-
16.
 There is an increase in the value of inventories, trade receivables and
marketable securities by an average of 15.86%, 4.60% and 14.18%
respectively and other current assets has decreased by 40.27% in 2016-
17, when compared to 2015-16.
60
4.1.5 COMPARATIVE PROFIT AND LOSS ACCOUNT OF 2012-13
AND 2013-14
Changes
2012-13 2013-14 (Increase/decrease)
(in (in
Particulars millions) millions) Percentage
Amount (%)
1. Net Revenue 22,064,192 25,691,911 3,627,719 16.44
2. Cost of Revenue 18,640,995 20,801,139 2,160,144 11.58
3. GROSS PROFIT(1-2) 3,423,197 4,890,772 1,467,575 42.87
4. Operating Expenses
Selling, general and admistrative 2,102,309 2,598,660 496,351 23.6
5. Operating income(Profit) (3-4) 1,320,888 2,292,112 971,224 73.52
6. Non operating income
a. Interest and dividend income - - - -
b. Foreign exchange gain/ loss net - - - -
c. other income 105,728 168,598 62,870 59.46
7. TOTAL (5+6) 1,426,616 2,460,710 1,034,094 72.48
8. Non operating expenses
Interest expenses 22,967 19,630 -3,337 -14.52
9. INCOME BEFORE TAX(7-8) 1,403,649 2,441,080 1,037,431 73.9
10. Provision for income taxes 551,686 767,808 216,122 39.17
11.Equity in earnings affiliated companies 110,200 149,847 39,647 35.97
12. NET INCOME(PROFIT) (9-10+11) 962,163 1,823,119 860,956 89.48
Basic earnings per share 607.64 1150.6 542.96 89.35
INTERPRETATION
The above table shows the Comparative Profit and Loss Account of
2012- 13 and 2013- 14. The Net revenue when compared to the base year (i.e.
2012-13) has an increase of 16.44% in 2013-14. The Gross Profit has also
increased by 42.87% in 2013-14 when compared to 2012-13. There is an
increase in the value of operating profit by an average of 73.52% 3 in 2013-14
when compared to 2012-13. Profit before tax of 2013-14 when compared to
2012-13 is 73.9%. And the net profit is increased by an average of 89.48% in
2013-14 when compared to 2012-13. Basic Earnings per Share is 89.35% and
the change in amount is Rs.542.96.
61
4.1.6 COMPARATIVE PROFIT AND LOSS ACCOUNT OF 2013- 14
AND 2014- 15
2013-14 2014-15 Changes

(in (in (Increase/decrease)
Amount (%)
1. Net Revenue 25,691,911 27,234,521 1,542,610 6.00
2. Cost of Revenue 20,801,139 21,841,676 1,040,537 5.00
3. GROSS PROFIT(1-2) 4,890,772 5,392,845 502,073 10.26
a. Interest and dividend income - 147,122 147,122 -
b. Foreign exchange gain/ loss net - 88,140 88,140 -
c. other income 168,598 -70,127 -238,725 -141.59
7. TOTAL (5+6) 2,460,710 2,915,699 454,989 18.49
Interest expenses 19,630 22,871 3,241 16.51
9. INCOME BEFORE TAX(7-8) 2,441,080 2,892,828 451,748 18.50
10. Provision for income taxes 767,808 893,469 125,661 16.36
12. NET INCOME(PROFIT) (9-10+11) 1,823,119 2,307,904 484,785 26.59
Basic earnings per share 1150.6 688.02 -462.58 -40.20
INTERPRETATION
2013- 14 and 2014- 15. The Net revenue when compared to the base year has
an increase of 6% in 2014-15. The Gross Profit has also increased by 10.26%
in 2014-15 when compared to 2013-14. There is an increase in the value of
operating profit by an average of 20% in 2014-15 when compared to 2013-14.
Profit before tax of 2014-15 when compared to 2013-14 is 18.50%. And the
net profit is increased by an average of 26.59% in 2014-15 when compared to
2013-
14. Basic Earnings per Share is decreased by an average of 40.20% and the
change in amount is Rs.-462.58.
62
AND 2015- 16
2014-15 2015-16 changes(Increase/decrease)
(in (in
Amount (%)
1. Net Revenue 27,234,521 28,403,118 1,168,597 4.29
2. Cost of Revenue 21,841,676 22,605,465 763,789 3.49
3. GROSS PROFIT(1-2) 5,392,845 5,797,653 404,808 7.50
a. Interest and dividend income 147,122 157,862 10,740 7.30
b. Foreign exchange gain/ loss net 88,140 -5,573 -93,713 -106.32
c. other income -70,127 12,524 82,651 -117.85
7. TOTAL (5+6) 2,915,699 3,018,784 103,085 3.53
Interest expenses 22,871 35,403 12,532 54.79
9. INCOME BEFORE TAX(7-8) 2,892,828 2,983,381 90,553 3.13
10. Provision for income taxes 893,469 878,269 -15,200 -1.70
12. NET INCOME(PROFIT) (9-10+11) 2,307,904 2,434,211 126,307 5.47
INTERPRETATION
2014-15 and 2015-16. The Net revenue when compared to the base year has an
increase of 4.29% in 2015-16. The Gross Profit has also increased by 7.5% in
2015-16 when compared to 2014-15. There is an increase in the value of
operating profit by an average of 3.75% in 2015-16 when compared to 2014-
15. Profit before tax of 2015-16 when compared to 2014-15 is 3.13%. And the
net profit is increased by an average of 5.47% in 2015-16 when compared to
2014-
15. Basic Earnings per Share is 7.75% and the change in amount is Rs.53.34.
63
AND 2016- 17
2015-16 2016-17 Changes(Increase/decrease)

(in (in
Amount (%)
1. Net Revenue 28,403,118 27,597,193 -805,925 -2.83
2. Cost of Revenue 22,605,465 22,734,336 128,871 0.57
3. GROSS PROFIT(1-2) 5,797,653 4,862,857 -934,796 -16.12
Selling, general and admistrative 2,943,682 2,868,485 -75,197 -2.55
5. Operating income(Profit) (3-4) 2,853,971 1,994,372 -859,599 -30.11
a. Interest and dividend income 157,862 158,983 1,121 0.71
b. Foreign exchange gain/ loss net -5,573 33,601 39,174 -702.92
c. other income 12,524 36,222 23,698 189.22
7. TOTAL (5+6) 3,018,784 2,223,178 -795,606 -26.35
Interest expenses 35,403 29,353 -6,050 17.08
9. INCOME BEFORE TAX(7-8) 2,983,381 2,193,825 -789,556 -26.46
10. Provision for income taxes 878,269 628,900 -249,369 -28.39
12. NET INCOME(PROFIT) (9-10+11) 2,434,211 1,926,085 -507,226 -20.83
INTERPRETATION
2015-16 and 2016-17. The Net revenue when compared to the base year has a
decrease of 2.83% in 2015-16. The Gross Profit has also decreased by 16.12%
in 2016-17 when compared to 2015-16. There is a decrease in the value of
operating profit by an average of 30.11% in 2016-17 when compared to 2015-
16. Profit before tax of 2016-17 when compared to 2015-16 is decreased by
26.46%. And the net profit is decreased by an average of 20.83% in 2016-17
when compared to 2015-16. Basic Earnings per Share is 18.32% and the
change in amount is Rs.135.89.
64
4.2 TREND ANALYSIS
4.2.1 TREND ANALYSIS OF BALANCE SHEET FOR 2012-13 TO

2016-17
Percentage (%)
PARTICULARS 2016-
2012-13 2013-14 2014-15 2015-16 17
Shareholders fund
a. Share capital 100 119 138 142 148
b. Non controlling interests 100 120 137 138 107

a. Long term borrowings 100 116 136 133 135
b. Accrued pension and severance costs 100 100.19 115 118 118
c. Deferred income taxes 100 131 166 148 103
d. Other long term liabilities 100 134 149 159 169
Current Liabilities
a. Short term borrowings 100 118 123 115 121
b. Trade payables 100 108 117 121 126
c. Current position of long term debt 100 109 145 141 159
d. Accrued expenses 100 106 122 125 143
e. Other current liabilities 100 139 134 132 131
TOTAL 100 117 135 134 137
ASSETS
Non Current Assets
a. Fixed assets 100 108 123 125 130
b. Accumulated depreciation 100 107 115 114 118
c. Investments and other assets 100 126 143 137 148

d. Long term trade receivables 100 117 132 124 129
Current Assets
a. Cash and cash equivalents 100 119 133 171 174
b. Inventories 100 110 124 120 139
c. Trade receivables 100 106 117 111 116
d. Deferred income taxes 100 116 130 129 -

e. Marketable securities 100 143 188 164 187
f. Other current assets 100 127 153 253 151
TOTAL 100 117 135 134 137
65
4.2.2 TREND ANALYSIS OF PROFIT AND LOSS FOR 2012-13 TO
2016- 17
PARTICULARS Percentage (%)

2012-13 2013-14 2014-15 2015-16 2016-17
1. Net Revenue 100 116 123 129 125
2. Cost of Revenue 100 112 117 121 122
3. GROSS PROFIT(1-2) 100 143 156 169 142
Selling, general and admistrative 100 124 126 140 136
5. Operating income(Profit) (3-4) 100 174 208 216 151
a. Interest and dividend income - - - - -
b. Foreign exchange gain/ loss net - - - - -
c. other income 100 159 -66 12 34
7. TOTAL (5+6) 100 172 204 212 156
Interest expenses 100 85 99.5 154 128
9. INCOME BEFORE TAX(7-8) 100 174 206 213 156
10. Provision for income taxes 100 139 162 159 114
11.Equity in earnings affiliated companies 100 136 279 298 328
12. NET INCOME(PROFIT) (9-10+11) 100 189 239 253 200
Basic earnings per share 100 189 113 122 99.6
INTERPRETATION
The above table shows the Trend Analysis of Profit and Loss Account
for 2012-13 to 2016-17. The total net revenue is at increasing trend from 2012-
13 to 2015-16, but in the year 2016-17 the value has decreased by an average
of 125%. The profit before tax is fluctuating in all the past five years. And the
net profit is increasing from 2013-14 to 2016-17, when compared to the base
year (i.e. 2012-13). Profit making
66
4.3 RATIO ANALYSIS
4.3.1 PROFITABILITY RATIO

Profit making is the main objective of business. Aim of every business
concern is to earn maximum profits in absolute terms and also in relative terms
i.e. profit is to be maximum in terms of risk undertaken and capital employed.
Ability to make maximum profits from optimum utilization of resources by a
business concern is termed as “profitability”.
Profitability analysis consists of different elements i.e. study of sales,
cost of goods sold, analysis of gross margin on sales, analysis of operating
expenses, operating profit and analysis of profit in relation to capital
employed.
4.3.1.1 GROSS PROFIT RATIO (G P RATIO)

Gross Profit ratio is also called as Gross margin or trading margin ratio.
Gross Profit Ratio is a profitability ratio that shows the relationship between
gross profit and total net sales revenue. The formula for calculating Gross
Profit Ratio is. Gross Profit ratio is also called as Gross margin or trading
margin ratio. FORMULA:
G P RATIO
PROFIT =
GROSS ×100
NET SALES
Table- 4.3.1.1
Year 2012-13 2013-14 2014-15 2015-16 2016-17
G P Ratio (%) 15.5 19.03 19.8 20.41 17.62
67
GP RATIO
25
19.8 20.41
19.03
20 17.62
15.5
Ratio(tim
15
10
0
2012-13 2013-14 2014-15 2015-16 2016-17
Year
INTERPRETATION:
The above graph represents the Gross Profit Ratio from 2012-13 to 2016-
17. The percentage of gross profit over sales is gradually increasing till 2015-
16, thus it show an increasing trend from 2012-13 to 2015-16. But, in the year
2016- 17 the percentage of gross profit has decreased to 17.62 when compared
to past 3 years (i.e., from 2013-14 to 2015-16).
68
4.3.1.2 NET PROFIT RATIO
Net Profit Ratio is a profitability ratio that shows relationship between the
net profit and the net sales. It is computed by dividing the net profit by sales i.e.
FORMULA:
NET PROFIT
NET PROFIT RATIO = × 100
NET SALES
Table-4.3.1.2
Year 2012-13 2013-14 2014-15 2015-16 2016-17

N P Ratio (%) 4.36 7.09 8.47 8.57 6.98
NET PROFIT RATIO

10
8.47 8.57
8 7.09
Ratio(tim
6 6.98
4 4.36
2
0
2012-13 2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION:
The above graph represents the Net Profit Ratio from 2012-13 to 2016-
17. The percentage of net profit over sales is gradually increasing till 2015-16,
thus it show an increasing trend from 2012-13 to 2015-16. But in the year
2016- 17 the percentage of net profit has decreased to 6.98 when compared to
past 3 years (i.e., from 2013-14 to 2015-16).
69
4.3.1.3 OPERATING PROFIT RATIO
The Operating Profit Ratio is the ratio of profit made from operating
sources to the sales, usually shown as a percentage. It shows the operational
efficiency of the firm and is a measure of the management’s efficiency in
running the routine operations of the firm.
FORMULA:
OPERATING PROFIT RATIO = OPERATING PROFIT

×100
SALES
Table-4.3.1.3
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Operating Profit
5.98 8.92 10.09 10.04 7.23
Ratio (%)
OPERATING PROFIT RATIO

15
10.09
Ratio(tim
8.92 10.04
10 5.98
7.23
5
0
2012-13 2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION
The above graph represents the Operating Profit Ratio from 2012-13 to
2016-17. The percentage of operating profit ratio over sales is gradually
increasing from 2013-13 to 2014-15 and after which it is decreased to 10.04
and
7.23 in 2015-16 and 2016-17 respectively.
70
4.3.1.4 RETURN ON INVESTMENT
This ratio is called ‘Return on Investment’ (ROI) or ‘Return on Capital

Employed’. It measures the sufficiency or otherwise of profit in relation to
capital employed. Return on capital employed is calculated by using the
following formula
FORMULA:
OPERATING PROFIT ×100

ROI= CAPITAL EMPLOYED
Where, Capital Employed = Net working capital + Fixed assets
Table-4.3.1.4
Year 2012-13 2013-14 2014-15 2015-16 2016-17

ROI (%) 6.92 11.01 13.19 11.48 8.25
RETURN ON INVESTMENT
15 13.19
11.01 11.48
Ratio(tim
10 6.92
8.25
5
0
2012-13 2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION
The above graph shows that during the year 2012-13 the return on
investment is 6.92%, it is gradually increased to 11.01, 13.19 and 11.48% in the
71
year 2013-14, 2014-15 and 2015-16 respectively. But in the year 2016-17 the
percentage of return on investment has decreased to 8.25%.
4.3.1.5 RETURN ON SHAREHOLDERS FUNDS
The Return on Shareholders’ Fund ratio determines the profitability

from shareholder’s point of view. Return on Shareholders Fund is calculated by
using the following formula
FORMULA:
NET PROFIT AFTER TAX
RETURN ON SHAREHOLDERS FUND = × 100
SHAREHOLDERS FUNDS
Table-4.3.1.5
Year 2012-13 2013-14 2014-15 2015-16 2016-17

ROI (%) 7.53 11.97 13.07 13.45 10.32
RETURN ON SHAREHOLDERS FUNDS

15
11.97 13.07 13.45

Ratio(tim
10 7.53 10.32
0
2012-13
2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION
The above graph shows that during the year 2012-13 the return on
shareholders’ funds is 7.53%, it is gradually increased to 11.97, 13.07 and
72
13.45% in the year 2013-14, 2014-15 and 2015-16 respectively. But in the year
2016-17 the percentage of return on shareholders’ funds has decreased to
10.32%.
4.3.2 TURNOVER RATIOS
Turnover ratios are also called Activity Ratios or Performance Ratios.

Activity ratios highlight the operational efficiency of the business concern. The
term operational efficiency refers to effective, profitable and rational use of
resources available to the concern. They are used to indicate the efficiency
with which assets and resources of the firm are being utilized. These ratios are
known as turnover ratios because they indicate the speed with which assets are
being converted or turned over into sales. These ratios, thus express the
relationship between sales and various assets.
4.4.2.1 CAPITAL TURNOVER RATIO
Managerial efficiency is also calculated by establishing the relationship

between cost of sales or sales with the amount of capital invested in the
business. Capital turnover ratio is calculated with the help of following
formula
FORMULA:
CAPITAL TURNOVER RATIO = SALES

CAPITAL EMPLOYED
Where, Capital Employed = Net working capital + Fixed assets
Table-4.3.2.1
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Capital Turnover
1.16 1.23 1.14 1.14 1.14
Ratio (in times)
73
CAPITAL TURNOVER RATIO
1.241.23
1.22
1.2
1.18
Ratio(tim
1.16
1.16
1.14 1.14 1.14 1.14
1.12
1.1
1.08
2012-132013-14 2014-15 2015-16 2016-17

Year
INTERPRETATION
The above graph represents the Capital Turnover Ratio from 2012-13 to
2016-17. It is showing a fluctuation trend, the ratio is 1.16 times in the year
2012-13, 1.23 times in the year 2013-14, in the year 2014-15, 2015-16 and
2016- 17 the ratio is constant at 1.14 times in all the 3 years.
74
4.3.2.2 FIXED ASSETS TURNOVER RATIO
The Fixed Assets Turnover Ratio determines efficiency of utilization of fixed

assets and profitability of a business concern. The formula for fixed assets
turnover ratio is as follows
FORMULA:
SALES
FIXED ASSET TURNOVER RATIO
S = NET FIXED ASSETS
Where, Net Fixed Assets = Fixed assets - Depreciation
Table-4.3.2.2
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Fixed Assets
3.22 3.36 2.93 2.92 2.71
Turnover Ratio
FIXED ASSETS TURNOVER RATIO

4 3.223.36
3 2.93 2.92
Ratio(tim
2 2.71
1
0
2012-13 2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION
The above graph represents the Fixed Assets Turnover Ratio from 2012-
13 to 2016-17. In the year 2012-13 the ratio is 3.22 times and the ratio has
slightly increased to 3.36 times in the year 2013-14. In the year 2014-15, 2015-
16 and 2016-17 the ratio has decreased to 2.93, 2.92 and 2.71 times when
compared to 2013-14.
75
4.3.2.3 WORKING CAPITAL TURNOVER RATIO
Working Capital Ratio measures the effective utilization of working

capital. It also measures the smooth running of business. The ratio establishes
the relationship between the sales or cost of sales and working capital.
Working capital turnover ratio is calculated with the help of following
formula.
FORMULA:
COST OF SALES
WORKING CAPITAL TURNOVER RATIO =
NET WORKING CAPITAL
Where, Net Working Capital = Current Assets – Current Liabilities
Table-4.3.2.3
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Working Capital
Turnover Ratio 22.12 20.06 14.51 10.84 44.16
(in times)
WORLING CAPITAL TURNOVER RATIO

50
44.16
40
Ratio(time
30 22.12
20 20.06
10 14.51
0 10.84
2012-13 2013-14
2014-15
2015-16
2016-17
Year
76
INTERPRETATION
The above graph represents the Working Capital Turnover Ratio for the
years 2012-13 to 2016-17. In the year 2012-13 the ratio is 22.12 times and the
ratio has decreased to 20.06, 14.51 and 10.84 times in the year 2013-14, 2014-
15 and 2015-16 respectively. The ratio has increased to 44.16 times in the year
2016-17 when compared to past 4 years.
77
4.3.3 SOLVENCY OR FINANCIAL RATIO
Solvency or financial ratios include all ratios which express financial
position of the concern. Financial ratios are calculated on the basis of items of
the Balance Sheet.
Financial position may mean differently to different persons interested

in business concern. Creditors, banks, management, investors and auditors
have different views about financial position. The term financial position
generally refers to short-term and long-term solvency of the business concern.
4.3.3.1 CURRENT RATIO

The ratio of current assets to current liabilities is called ‘Current Ratio’.
Current ratio indicates the ability of a concern to meet its current obligations as
and when they are due for payment. The current ratio can be calculated as
following formula.
FORMULA:
CURRENT ASSETS
CURRENT RATIO = CURRENT LIABILITIES
Table-4.3.3.1
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Current Ratio
1.06 1.07 1.09 1.13 1.03
(in times)
78
CURRENT RATIO
1.141.13
1.12
1.1 1.09
1.07
Ratio(tim
1.08
1.06
1.06
1.04
1.03
1.02
1
0.98
2012-132013-14 2014-15 2015-16 2016-17

Year
INTERPRETATION
The above graph represents the Current Ratio from 2012-13 to 2016-
17. The Current Ratio in 2012-13 is 1.06 times, 2013-14 is 1.07 times, 2014-
15 is
1.09 times, 2015-16 is 1.13 times and 2016-17 is 1.03 times. The ratio has
increased from 2012-13 to 2015-16 and then, the ratio has decreased in the
financial year 2016-17.
79
4.3.3.2 LIQUID RATIO
Liquid Ratio is also called ‘Quick’ or ‘Acid test’ ratio. It is calculated
by comparing the quick assets or liquid assets with current liabilities. Liquid
assets refer to assets which are quickly convertible into cash.
FORMULA:
QUICK OR LIQUID ASSETS

LIQUID RATIO= CURRENT LIABILITIES
Where, Liquid Assets = Current Assets – Stock and Prepaid Expenses
Table-4.3.3.2
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Liquid Ratio
0.93 0.94 0.96 1.0 0.89
(in times)
LIQUID RATIO
1 1
0.94 0.96
0.95 0.93
Ratio(tim
0.9
0.85 0.89
0.8
2012-13 2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION
The above graph represents the Liquid Ratio from 2012-13 to
2016-17. The Liquid Ratio in 2012-13 is 0.93 times, 2013-14 is 0.94 times,
2014-15 is 0.96 times, 2015-16 is 1.0 times and 2016-17 is 0.89 times. The
ratio has increased from 2012-13 to 2015-16 and then, the ratio has decreased
in the financial year 2016-17.
80
4.3.3.3 CASH POSITION RATIO
Cash Position Ratio is also called ‘Absolute Liquidity Ratio’ or ‘Super

Quick Ratio’. This is the variation of quick ratio. This ratio is calculated when
liquidity is highly restricted in terms of cash and cash equivalents. Cash
position ratio is calculated with the help of following formula
FORMULA:
CASH POSITION RATIO=

CASH AND BANK BALANCE+MARKETABLE SECURITIES
CURRENT LIABILITIES
Table-4.3.3.3
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Cash Position
0.25 0.29 0.32 0.34 0.34
Ratio (in times)
CASH POSITION RATIO

0.4
0.3
Ratio(tim
0.2
0.1
0 0.25 0.29 0.32 0.34 0.34
2012-13 2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION
The above graph represents the Cash Position Ratio from 2012-13 to
2016-17. The cash position ratio was 0.25times in 2012-13 which has shown a
gradual increase to 0.29times in 2013-14 and further increased to 0.32times in
the year 2014-15. Between 2015-16 and 2016-17 the cash position ratio has
remained stable at 0.34 times in both the financial years.
81
4.3.3.4 TOTAL DEBT RATIO
Total Debt Ratio or Solvency Ratio is a ratio which relates the total
tangible assets with the total borrowed funds. The total debt includes both
short- term and long-term borrowing. Total debt ratio is calculated with the
help of following formula
FORMULA:
TOTAL DEBT RATIO= TOTAL DEBT

TOTAL TANGIBLE ASSETS
Table-4.3.3.4
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Total Debt
0.39 0.40 0.39 0.38 0.36
Ratio (in times)
TOTAL DEBT RATIO

0.4
Ratio(tim
0.38
0.39 0.4
0.36 0.39
0.38
0.34
0.36
2012-13 2013-14
2014-15
2015-16
2016-17
Year
INTERPRETATION
The above graph represents the Total Debt Ratio from 2011-12 to 2015-
16. The Solvency Ratio in 2012-13 is 0.39 times, 2013-14 is 0.40 times, 2014-
15 is 0.39 times, 2015-16 is 0.38 times and 2016-17 is 0.36 times. The ratio
has increased in financial year 2012-13 and 2013-14, then has decreased to
0.39 times. In the financial year 2015-16 and 2016-17 the ratio has decreased
from
82
0.38 times to 0.36 times.
83
CHAPTER- 5
SUMMARY
84
5.1 FINDINGS
Comparative Statement and Trend Analysis
Ratio Analysis
Profit and Loss

Balance Sheet
Account
 There is an
 There is an  The net profit
increase in
increase in the ratio is
the value of
value of cost of fluctuating in all
share capital
revenue every the five years.
every year.
year.  There is an
 There is an
 There is an increase in quick
increase in the
increase in the ratio and current
value of non-
value of ratio in 2012-13
current liabilities
operating to 2015-16, but
(Long term
revenue, but the the ratio has
borrowings and
value has decreased in the
other long term
decreased in the year 2016-17.
liabilities).
year 2016-17.  There is a
 The values of
 The net profit is decrease in
Fixed Assets
increasing from solvency ratio
are increasing
2012-13 to 2015- from 2013-14 to
every year from
16, but the value 2016-17
2012- 13 to
has decreased in  There is an
2016-17.
the year 2016- increase in cash
 There is also
17. position ratio in
increase in the
 The Earning per the past five
value of
Share value is years.
current assets
fluctuating in all
from the
85
past five years. the five years.
86
5.2 SUGGESTIONS AND RECOMMENDATIONS
 The company should continue to undertake concerted efforts to

strengthen its management platform and raise corporate value.
 The company should strive to establish production and supply
structures to realize optimum product pricing and delivery and to
enhance the value chain to provide a wide range of customer services in
each country and region.
 The company should maintain a streamlined structure through the
reduction of fixed costs and enhance its business in established
markets.
 The company could give their loyal and a regular customer with
membership offers to retain customers.
 The company should take more initiative to improve in quick assets
and quick liabilities of quick ratio.
 The company should provide better career opportunities for the
retention of its potential advisors.
 The working capital, current assets and current liabilities should be
well managed so that the company develops more and more.
87
5.3 CONCLUSION
The study was under taken for the “Financial Performance Analysis of
Nandi Toyota” the tools used for the study as ratio analysis, comparative
statement and trend analysis were used to find out the efficiency and
effectiveness of the company. Analysing and interpretation of financial
analysis is an important tool in assessing company’s performance. It reveals
the strength and weakness of the firm.
From the study, it is observed that the company’s overall position is at

a very good position. The company achieves sufficient profit in past five years.
The working capital of the company needs to be utilized to increase
productivity and the long term solvency position of the company is very good.
The company maintains high liquidity to achieve the profitability. The

company is moving towards a very positive trend and 2015-16 will be a
productive year for the company.
88
BIBLIOGRAPHY
89
JOURNALS
 AM Efendioglu, T Karabulut - International Journal of Business 2010 -

ccsenet.org
 BM Eneizan, KA Wahab, MS Zainon, TF Obaid, 2016 Arabian Journal
of Business and Management Review (Oman Chapter) 5 (12), 14
 G Bottazzi, A Secchi, F Tamagni, 2008 Industrial and Corporate
Change 17 (4), 711-751
 J Hagel, JS Brown, L Davison - Harvard Business Review, 2010
 NP Tuan, NT Nhan, PH Giang, NN Ngoc, 2016 Journal of industrial
engineering and management 9 (2), 413-431
 SA Mirza, A Javed - Economics and International Finance, 2013 -
academicjournals.org
 W Lu, ME Tayor - Journal of International Accounting Research, 2015
- aaajournals.org
BOOKS REFERRED
 K G C Nair (2010) Advanced accounting, second edition.

 Shashi K Gupta, R K Sharma (2008) Management accounting third
edition.
 Usha Devi N, Santhosh Kumar, Syed Yaseen, S.K. Podder, Business
Research Method
WEBSITES REFERRED
 www.nanditoyota.com
 www.toyota-global.com
 https://www.investopedia.com
 https://www.accountingtools.com
90
ANNEXURE
91
BALANCE SHEET OF TOYOTA LTD FROM 2012-13 TO 2016-17
2016-17
PARTICULARS 2012-13 (in 2013-14 (in 2014-15 (in 2015-16 (in (in
millions) millions) millions) millions) millions)
Shareholders fund
a. Share capital 12,148,035 14,469,148 16,788,131 17,226,714 18,000,689
b. Non controlling interests 624,821 749,839 859,198 861,472 668,264

a. Long term borrowings 7,337,824 8,546,910 10,014,395 9,772,065 9,911,596
costs 766,112 767,618 880,293 904,911 905,070
c. Deferred income taxes 1,385,927 1,811,846 2,298,469 2,046,089 1,423,726
d. Other long term liabilities 308,078 411,427 457,848 491,890 521,876
Current Liabilities
a. Short term borrowings 4,089,528 4,830,820 5,048,188 4,698,134 4,953,682
b. Trade payables 2,834,843 3,058,644 3,323,601 3,429,792 3,503,320
c. Current position of long term debt 2,704,428 2,949,663 3,915,304 3,822,954 4,290,449
d. Accrued expenses 2,185,537 2,313,160 2,668,666 2,726,120 3,137,827
e. Other current liabilities 1,098,184 1,528,398 1,475,737 1,447,456 1,433,687
TOTAL 35,483,317 41,437,473 47,729,830 47,427,597 48,750,186
ASSETS
Non Current Assets
a. Fixed assets 18,223,620 19,764,791 22,364,429 22,776,641 23,649,094
- - -
b. Accumulated depreciation 11,372,381 -12,123,493 -13,068,710 13,036,224 13,451,985
c. Investments and other assets 7,903,422 9,976,175 11,295,183 10,834,680 11,707,160

d. Long term trade receivables 6,943,766 8,102,294 9,202,531 8,642,947 9,012,222
Current Assets
a. Cash and cash equivalents 1,718,297 2,041,170 2,284,557 2,939,428 2,995,075
b. Inventories 1,715,786 1,894,704 2,137,618 2,061,511 2,388,617
c. Trade receivables 7,522,012 8,016,348 8,799,230 8,364,239 8,749,454
d. Deferred income taxes 749,398 866,386 978,179 967,607 -
e. Marketable securities 1,552,363 2,227,084 2,931,420 2,543,423 2,904,252
f. Other current assets 527,034 672,014 805,393 1,333,345 796,297
TOTAL 35,483,317 41,437,473 47,729,830 47,427,597 48,750,186
92
PROFIT AND LOSS ACCOUNT OF TOYOTA LTD FROM 2012-13 TO
2016-17
2012- 13 2013-14 2014-15 2015-16 2016-17
PARTICULARS (in (in (in (in (in
millions) millions) millions) millions) millions)
1. Net Revenue 22,064,192 25,691,911 27,234,521 28,403,118 27,597,193
2. Cost of Revenue 18,640,995 20,801,139 21,841,676 22,605,465 22,734,336
3. GROSS PROFIT(1-2) 3,423,197 4,890,772 5,392,845 5,797,653 4,862,857
Selling, general and admistrative 2,102,309 2,598,660 2,642,281 2,943,682 2,868,485
5. Operating income(Profit) (3-4) 1,320,888 2,292,112 2,750,564 2,853,971 1,994,372
a. Interest and dividend income - - 147,122 157,862 158,983
b. Foreign exchange gain/ loss net - - 88,140 -5,573 33,601
c. other income 105,728 168,598 -70,127 12,524 36,222
7. TOTAL (5+6) 1,426,616 2,460,710 2,915,699 3,018,784 2,223,178
Interest expenses 22,967 19,630 22,871 35,403 29,353
9. INCOME BEFORE TAX(7-8) 1,403,649 2,441,080 2,892,828 2,983,381 2,193,825
10. Provision for income taxes 551,686 767,808 893,469 878,269 628,900
11.Equity in earnings affiliated
companies 110,200 149,847 308,545 329,099 362,060
12. NET INCOME(PROFIT) (9-
10+11) 962,163 1,823,119 2,307,904 2,434,211 1,926,085
Basic earnings per share 607.64 1150.6 688.02 741.36 605.47
93

A Study On The Financial Performance Ana

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A Study on

“THE FINANCIAL PERFORMANCE ANALYSIS”

NANDI TOYOTA, BANGALORE

Undertaken and Prepared by:

In compliance with the requirement for obtaining the Degree in

Masters of Business Administration

Jyoti Nivas College Autonomous

Post Graduate Centre

University Bangalore – 560 095

The satisfaction and euphoria that accompanies the successful completion of

I wish to express my sincere gratitude to Dr. Sr. LALITHA THOMAS,

I would like to express my sincere thanks to PHILCY ANTONY, project

I thank my family for their infinite love and support.

I PHILCY ANTONY, hereby certify that GAGANA V. pursuing her Masters

This is to certify that this report is submitted in Partial Fulfilment of the

The information submitted by her is true and original to the best of my

Sign of Director Sign of Internal Project Guide

I GAGANA V pursuing my Masters in Business Administration from Jyoti

The information compiled and submitted in this Report pertaining to the

Financial performance analysis is the process of identifying the financial

CHAPTERS PARTICULARS PAGE NO

1.1 General Introduction 1-2

1.2 Review of Literature 3-4

1.3 Industry Profile 5-8

2.1 Company Profile 9-12

2.2 Company Hierarchy 13

2.3 Vision and Mission 14

2.5 Product and Services Offered 16-21

2.6 Departmental Studies 22-26

2.7 SWOT Analysis 26-27

3.1 Background of Study 28

3.2 Statement of Problem 28

3.3 Need and Importance of Study 29

3.4 Limitations of the Study 29

3.6 Type of Research 30

3.7 Method of Data Collection 30

3.8 Tools used in Analysis 30-32

3.9 Period of Study 32

4 ANALYSIS AND INTERPRETATION OF DATA 33-62

5.2 Suggestion and Recommendation 64

CHAPTERS PARTICULARS PAGE NO

4.3.1.1 Graph showing Gross Profit Ratio 48

4.3.1.2 Graph showing Net Profit Ratio 49

4.3.1.3 Graph showing Operating Profit Ratio 50

4.3.1.4 Graph showing Return on Investment 51

4.3.1.5 Graph showing Return on Shareholders’ Funds 52

4.3.2.1 Graph showing Capital Turnover Ratio 54

4.3.2.3 Graph showing Fixed Assets Turnover Ratio 55

4.3.2.4 Graph showing Working Capital Turnover Ratio 56

4.3.3.1 Graph showing Current Ratio 59

4.3.3.2 Graph showing Liquid Ratio 60

4.3.3.3 Graph showing Cash Position Ratio 61

4.3.3.4 Graph showing Total Debt Ratio 62

CHAPTERS PARTICULARS PAGE NO

4.3.1.1 Table showing Gross Profit Ratio 47

4.3.1.2 Table showing Net Profit Ratio 49

4.3.1.3 Table showing Operating Profit Ratio 50

4.3.1.4 Table showing Return on Investment 51

4.3.1.5 Table showing Return on Shareholders’ Funds 52

4.3.2.1 Table showing Capital Turnover Ratio 53

4.3.2.3 Table showing Fixed Assets Turnover Ratio 55

4.3.2.4 Table showing Working Capital Turnover Ratio 56

4.3.3.1 Table showing Current Ratio 58