CHAPTER 1

INTRODUCTION OF THE STUDY

1.1 INTRODUCTION

Investments are assets or items acquired with the goal generating income or appreciation.
Appreciation refers to an increase in the value of an asset over time. When an individual
purchases a good as an investment, the intent is not to consume the good but rather to use it in
the future to create wealth. An investment always concerns the outlay of some capital today-
time, effort, money, or an asset- in hopes of a greater payoff in the future than what was
originally put in. In general, any action that is taken in the hopes of raising future revenue can
also be considered an investment. Investment is oriented toward the potential for future growth
or income. Investment also includes money committed into a new business venture or for
expanding an existing business or investment of an asset in a business.

The purpose of investment is to make the money work for or to let the money grow. There is
an always an element of risk associated with an investment. Risk is the likelihood of securing
the return of the amount invested. The risk is low in cases such as investment in government
securities. The risk is high in case of investment in stocks, new business ventures, business
expansion and so on. An investment may not generate any income, or may actually lose value
over time. For example, it’s also a possibility that one may invest in aa company that ends up
going bankrupt or a project that fails to materialize. This is the primary way that saving can be
differentiated from investing: saving is accumulating money for future use and entails no risk,
whereas investment is the act of leveraging money for a potential future gain and it entails
some risk.

Investments can be broadly categorized into;

 Fixed income investments such as debentures and bonds which bear a fixed percentage
of return such as interest.

 Variable income investments such as equities and real estate, do not provide a fixed
return annually. The dividends or rental payments vary each financial year. And, their
value appreciates in the long term.
1.2 OBJECTIVE OF THE STUDY

1.2.1 Primary Objective

 To analyse the financial summary and investment pertaining to Bosch Electrical Drives
India Pvt Ltd.

1.2.2 Secondary Objective

 To assess the impact of investments on the balance sheet of Bosch Electrical Drives
India Pvt Ltd.
 To know the financial position of Bosch Electrical Drives India Pvt Ltd pertaining to
investments.
 To know the changes in cash flows, income statement for the last five years.
 To assess the impact of profit/loss that arise through investment made by Bosch
Electrical Drives India Pvt Ltd.

1.3 NEED FOR THE STUDY

 The main purpose of this study is to know about the investments of Bosch Electrical
Drives India Pvt Ltd and how it affects the aspects of the balance sheet.
 The present study was conducted to know about the investment trends.
 The research conducted earlier focused only on the financial performance of the
company.

1.4 SCOPE OF THE STUDY

 Financial analysis is a process of understanding the profitability, strength and weakness

between various items of the balance sheet and P&L account.
 The study is conducted to know the changes in the investments of the balance sheet and
also the impact it has on the balance sheet.
 The study was done on changes in profits with changes in cash flows, fund flows and
the income statement for the last five years with available financial information.
1.5 LIMITATION OF THE STUDY

 The project period of two months is insufficient as the company’s operations are
numerous and complex. Hence various areas could not be fully covered.
 Analysis of ratios can also be done using alternative formulae.
 The scope of the study is limited to five years.
 Investments cannot be studied in detail so only a few investments are taken due to the
company’s privacy policy.
 CHAPTER 2

COMPANY PROFILE

2.1 INTRODUCTION

The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as “Workshop for
Precision Mechanics and Electrical Engineering”. The special ownership structure of Robert
Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible
for the company to plan over the long term and to undertake significant upfront investments in
the safeguarding of its future. 92% of the share capital of Robert Bosch GmbH is held by Robert
Bosch Stiftung GmbH, a charitable foundation. The majority of voting rights are held by Robert
Bosch Industrial true hand KG, an industrial trust. The entrepreneurial ownership functions are
carried out by the trust. The remaining shares are held by the Bosch family and by Robert
Bosch GmbH.

Bosch has been present in India for more than 80 years, first through a representative office in
Calcutta since 1922, and from 1951 through its subsidiary Bosch Limited. The Bosch Group
operates in India through six companies, viz, Bosch Limited, Bosch Chassis Systems India
Limited, Bosch Rexroth India Limited, Robert Engineering and Business Solutions Limited,
Bosch Automotive Electronics India Private Ltd. and Bosch Electrical Drives India Private Ltd.
Bosch Limited is the flagship company of the Bosch Group of India. The Robert Bosch Gmbh
holds 71.18 percent stake in Bosch Limited. Headquartered out of Bangalore, Bosch Limited
has its manufacturing facilities in Bangalore, Nashik, Naganathapura, Jaipur and Goa. These
plants are TS 16949 and ISO14001 certified. With a presence across automotive technology,
industrial technology, consumer goods and energy and building technology, the company has
a headcount of over 11,000 associates. It manufactures and trades products as diverse as diesel
and gasoline fuel injection system, automotive aftermarket products, auto electricals, and
special purpose machines, packing machines, electric power tools and security systems. In
2012 Bosch Limited touched a turnover of Rs. 8400 Crores. Apart from wide product portfolio,
over the decade the company has also developed excellent R&D facilities in the country
resulting in a strong and loyal customer base. The market leadership of Bosch Limited is a
testimony to the high quality and technology of its products. Over and above the strong
presence in India Automotive service sector, Bosch in India has a vast service network that
spans across 1,000 towns and cities with over 2,500 service outlets. These service outlets ensure
widespread availability of both products and services. In addition to this, Bosch India also has
a strong automotive training network that is spread across 16 cities thereby offering parts,
bytes, services and training all under one roof.

2.2 MISSION STATEMENT

 To develop products that are “Invented for Life,” that spark enthusiasm, that improve
quality of life, and that help conserve natural resources.

2.3 VISION STATEMENT

 The vision is to mobility that is sustainable, safe, and exciting. It uses its expertise in
sensor technology, software, and services, as well as its own IoT cloud, to offer its
customers connected, cross-domain solutions from a single source.

2.4 GOALS

 To facilitate connected living with products and solutions that either contain artificial
intelligence (AI) or have been developed or manufactured with its help.

2.5 COMPANY LOGO

2.6 PRODUCT DESIGN
INVESTMENTS AN OVERVIEW
Investment is an asset acquired or money committed with a purpose to earn income in future.
investments are also made to benefit from future appreciation in the value of an asset.
Investment is a purchase of goods which is future oriented, aimed at earning income in the
future or creating wealth in the future. An individual may also seek to gain by selling the asset
in future for a higher price.

INVESTMENTS THAT BOSCH HAS INVESTED IN

 Mutual Funds
 Inter Corporate Deposits
 Corporate Fixed Deposits
 Foreign Direct Investment
 Investment In Other Companies- Inter Corporate Investments

MUTUAL FUNDS
Investors contribute to a common pool of funds, which are then invested in accordance with
the goals. The investments are held in a trust, with the investors as sole beneficial owners. The
management is overseen by the trustees through investment managers. Mutual fund investing
begins with investors pooling their capital and giving it to the fund manager. The money is
then invested in stocks or assets by the fund manager. The investment aids in the generation of
returns, which are then distributed to the investors who gain.

A mutual fund is formed when an asset management company (AMC) pools investments from
various individuals and institutional investors with common investment objectives. A fund
manager professionally manages the pooled investment by strategically investing in securities
to generate maximum returns for the investors in line with the investment objectives of the
fund.

Professionals with a proven track record of managing investments and a thorough

understanding of markets are fund managers. The cost ratio is the annual fee charged by the
fund house to operate the mutual fund. Regular dividends/interest and capital appreciation
provide income to investors. Customers can either reinvest their capital gains in the form of a
growth option or get a stable income in the form of a dividend option.

TYPES OF MUTUAL FUNDS

LIQUID MUTUAL FUNDS

Liquid mutual funds are one of the debt funds. It requires a clear understanding of the investors’
investment horizon since the investors are categorized based on duration. From overnight funds
to long-duration funds of 7 years, debt funds have been classified into 16 different categories.
This move by SEBI is to help investors find the right type of fund without being overwhelmed
by choices. Liquid mutual fund is a debt fund which invest in fixed-income instruments like
commercial paper, government securities, treasury bills, etc. with a maturity of up to 91 days.
The net asset value or NAV of liquid fund is calculated for 365 days. Further, investors can get
their withdrawals processed within 24 hours. These funds carry the lowest interest-rate risk in
the debt funds category.

HOW DO LIQUID MUTUAL FUNDS WORK?

The core objective of a liquid mutual fund is providing and liquidity to the investors. Therefore,
the fund manager selects high-quality debt securities with the maturity of the portfolio is not
more than 91 days. Shorter maturity makes the fund less prone to change in interest rates. By
matching the maturity of individual securities with the maturity of the portfolio, the fund
manager tries to deliver better returns than a regular savings account.

OVERNIGHT MUTUAL FUNDS

Overnight funds are a type of open-ended debt scheme that invest in debt securities maturing
the next day. This means, the securities for the portfolio maturing the very next day. Since the
securities in these funds mature the next day, these funds are not exposed to the kind of interest
rate risk or default risk like they the rest of the debt funds. This low risk profile also implies
they offer the least return. Overnight mutual funds are considered the safest of all mutual funds.
They are suitable for businessmen and entrepreneurs. They are debt funds that invest in
overnight assets, or securities with a residual maturity of one day. This was introduced as a part
of SEBI’s mutual fund reclassification exercise in 2018.
HOW TO FIND THE BEST OVERNIGHT FUNDS?
In evaluating overnight funds, two criteria are commonly used: returns and expense ratio. Since
overnight funds invest in securities that mature overnight, their performance should be
measured on the basis of one week, or at most one-month returns.

INTER CORPORATE DEPOSITS

Inter-company deposit is the deposit made by a company that has surplus funds, to another
company for a maximum of 6 months. it is a source of short-term financing. It is an unsecured
borrowing by corporate and FIs from other corporate entities registered under The Companies
Act, 1956. The corporate having surplus funds would lend to another corporate in need of
funds.

TYPES OF INTER CORPORATE DEPOSITS CALL DEPOSIT

Call deposits are withdrawn by the lenders by giving a notice of one day. However, in practice,
a lender has to wait for at least 3 days.

THREE-MONTH DEPOSITS
These deposits provide funds for three months to meet up short-term cash inadequacy.

SIX-MONTH DEPOSITS
The lending company provides funds to another company for a period of six months.

 It is uncertain source of finance, as deposit can be withdrawn any time- so it is risky

also.
 Such deposits are secured in nature. Inter-corporate deposits can be easily procured.
CORPORATE FIXED DEPOSITS
A corporate deposit is an interest-bearing deposit bank product offered to corporate banking
customers by banks and accredited financial institutions. Corporate deposit target customers
can include larger commercial companies, public institutions, government agencies and large
non- profits. It contrasts to retail deposits which are held by consumers and business deposits
that are held by SMEs. Corporate banking clients may use this type of product as a cash
management solution when managing the optimal mix of liquidity and returns of surplus funds
as it may provide an investment stream.

FOREIGN DIRECT INVESTMENT

A foreign direct investment is a purchase of an interest in a company by a company or an
investor located outside its borders. Generally, the term is used to describe a business decision
or to buy it outright in order to expand its operations to a new region. It is not usually used to
describe a stock investment in a foreign company.

INVESTMENT IN OTHER COMPANIES - INTER CORPORATE

INVESTMENTS
Inter corporate investments are undertaken when companies invest in the equity or debt of other
firms. The reasons why one company would invest in other company are many but could
include the desire to gain access to another market, increase its asset base, gain a competitive
advantage, or simply increase profitability through an ownership (or creditor) stake in another
company.

Inter corporate deposits are typically categorized depending on the percentage of ownership or
voting control that the investing firm (investing) undertakes in the target firm (investee). Such
investments are therefore generally categorized under generally accepted accounting principles
(GAAP) in three categories:

 Investment in financial assets

 Investment in associates
 Business combinations
INVESTMENT IN FINANCIAL ASSETS
An investment in financial assets is typically categorized as having ownership of less than 20%
in the target firm. Such a position would be considered “passive” investment” because, in most
cases, an investor would not have significant influence or control over the target firm. At
acquisition, the invested assets are recorded on the investing firm’s balance sheet at fair value.
As time elapses and the fair value of the assets change, the accounting treatment will depend
upon the classification of the assets, described as either

 Held-to-maturity.
 Held-for-trading.
 Available for sale.

HELD-TO-MATURITY
Held-to-maturity refers to debt securities intended to be held till maturity. Long term securities
will be reported at amortized cost on the balance sheet, wit interest oncome being reported on
the target firm’s income statement.

HELD-FOR-TRADING
Held-for-trading refers to equity and debt securities held with intent to be sold for a profit
within a short-time horizon, typically three months. They are reported on the balance sheet at
fair value, with any fair value changes (realized and unrealized) being reported on the income
statement, along with any interest or dividend income.

AVAILABLE-FOR-SALE
Available for sale securities are debt or equity securities purchased by a company with the
intention of holding them for indefinite periods of time or selling them before they reach
maturity. They can be a temporary investment a company makes for various reasons. For
example, a company may use these investments to provide higher return to shareholders,
manage interest rate exposure, or meet liquidity requirements.
CLASSIFICATION CHOICE
The choice of classification is an important factor when analyzing financial asset investments.
U.S GAAP does not allow firms to reclassify investments. So, the accounting choices made by
investing companies when making investments in financial assets can have a major effect on
their financial statements.

INVESTMENT IN ASSOCIATES
An investment in an associate is typically an ownership interest of between 20% and 50%.
Although the investment would generally be regarded as non-controlling, such an ownership
stake would be considered influential, due to the investor’s ability to influence the investee’s
managerial team, corporate plan, and policies along with the possibility of representation on
the investee’s board of directors.

EQUITY METHOD OF ACCOUNTING

An influential investment in an associate is accounted for using the equity method of
accounting. The original investment is recorded on the balance sheet at cost (fair value).
Subsequent earnings by the investee are added to the investing firm’s balance sheet ownership
stake (proportionate to ownership), with any dividends paid out by the investee reducing that
amount. The dividends received from the investee by the investor, however, are recorded on
the income statement.

The equity method also calls for the recognition of goodwill paid by the investor at acquisition,
with goodwill defined as any premium paid over and above the book value of the investee’s
identifiable assets. Additionally, the investment must also be tested for impairment. If the fair
value of the investment falls below the recorded balance sheet value (and is considered
permanent), the asset must be written down. A joint venture, whereby two or more firms share
control of an entity, would also be accounted for using the equity method. A major factor that
must also be considered for the purpose of investments in associates is intercorporate
transactions.
Since such an investment is accounted for under the equity method, transactions between the
investor and the investee can have a significant impact on both companies’ financials. For both,
upstream (investee to investor) and downstream (investor to investee), the investor must
account for its proportionate share of the investee’s profits from any intercorporate
transactions.

These treatments are general guidelines, not hard rules. A company that exhibits significant
influence over an investee with an ownership stake of less than 20% should be classified as an
investment in an associate. A company with a 20% to 50% stake that does not show any signs
of significant influence could be classified as only having an investment in financial assets.

BUSINESS COMBINATIONS
Business combinations are categorized as one of the following:

 Merger: A merger refers to when the acquiring firm absorbs the acquired firm, which
from the acquisition on, will cease to exist.
 Acquisition: an acquisition refers to when the acquiring firm, along with the newly
acquired firm, continues to exist, typically in parent-subsidiary roles.
 Consolidation: consolidation refers to when two firms combine to create a completely
new company.
 Special purpose entities: a special purpose entity is an entity typically created by a
sponsoring firm for a single purpose or project
 CHAPTER 3
REVIEW OF LITERATURE

 Idhayajyothi, Dr. Latasri, Manjula, MeharajBanu, Malini, 2014, A study on Financial

Performance of Ashok Leyland Limited at Chennai, OSR Journal of Business and
Management (IOSR-JBM) e-ISSN: 2778-487X, p-ISSN; 2319-7668. Volume 16, Issue
6, Ver. 1 (Jun. 2014), PP 83-89. The current ratio in the year 2008-09 was 1.08 and then
it decreases to 0.95 in the year 2009-10, next year onwards it moves upwards to 1.02 in
the year 2010-11 and it again moves down to 0.72 and finally in the year 2012-13 it
again moved down to 0.70. The normal current ratio is 2:1. The above table shows
current ratio is less than 2% in all the financial years. This shows that the company is
not enjoying credit worthiness. The liquidity ratio during the study period is lower than
the normal(i.e.) 1:1. It was 0.59 in the year 2008-09 and further reduced to 0.51 in 2009-
10 and it has been downward trend. Hence the firm is not controlling its stock position
because there is linear relationship between current ratio and liquidity ratio. In all the
years the equity is less when compared with borrowings.

 MD Aminul Islam, 2014, An Analysis of the Financial Performance of National Bank

Limited Using Financial Ratio, Journal of Behavioral Economics, Finance,
Entrepreneurship, Accounting and Transport, 2014, VOL 2, NO 5, 121-129.The
financial position of the NBL is satisfactory compare to other commercial bank but has
some problems. There have also some problems in balance sheet others area. The
presentation of data can be summarized as of the following findings: profit rate is low
in the recent years. So, to somebody it is unattractive. Profitability performance of NBL
not satisfactory level because of the last two years growth. Liquidity is good compare
to others but they have chance to improve more. Credit management last few years
really good because the trend of nonperforming loan getting lower. Overall financial
performance effective if we compare to others bank because of the last few years
unstable environment in our country. In case of import and export financing it takes
long time to sanction the fund. NBL banks have their own websites which acts as an
information centre and promotional tool for the banks. NBL has own banking software.
Lack of available information on banking project.
 Amalendu Bhunia, 2010, Financial Performance of Indian Pharmaceutical Industry: A
case study, Asian Journal of Management Research, ISSN 2229-3795. From the study
of the financial performance of the select pharmaceutical it can be concluded that the
liquidity position was strong in case of KAPL and RDPL, thereby reflecting the ability
of the companies to pay short-term obligations on due dates. Solvency in case of KAPL
and RDPL in all years which shows that companies relied more on external funds in
terms of long-term borrowings thereby providing a lower degree of protection to the
creditors. Debtors’ turnover ratio of RDPL needs to be improved as the solvency of the
firm depends on the sales income generated from the use of various assets. The Indian
pharmaceutical will witness an increase in the market share. The sector is poised not
only to take new challenge but to sustain the growth momentum of the past decade.

 Shika Gupta, 2014, an Empirical study financial performance of ICCI bank- A

comparative analysis, IITM Journal of Business Studies (JBS) Vol. 1, Issue 1, 2014.
After the study of the components of current assets and current liabilities and the trends
of working capital it was found that: The liquidity position of the bank is not good. The
current ratio is below 1 (current liabilities exceed current assets) optimally. Total asset
turnover ratio is a key driver of return on equity which is quite constant. There should
be a steady stream of sustainable dividends from a company, the dividend payout ratio
analysis is important. A consistent trend in this ratio is usually more important than a
high or low ratio. Bank has fallen percentage each year for the last five years might
indicate that the company can no longer afford to pay such high dividends

CHAPTER 4
RESEARCH METHODOLOGY
4.1 RESEARCH DESIGN

Research can be defined as a systematic and objective process of gathering, recording and
analysing data to guide decision making. It is mainly used to reduce the uncertainty of
decisions. The key objective of any research is to obtain accurate, relevant and timely
information.

4.2 DATA USED

 Secondary Data

4.2.1 Secondary Data

 Data is the recorded measure of phenomenon.

 The collection of data can be done through two ways.
 This project involves secondary data method.
 The secondary data for this study is collected from the company’s financial statements.
 Due to confidentiality reasons the company disclosed only the required information
from their books.

4.3 PERIOD OF THE STUDY

A reference period of 5 years has been taken for the performance analysis i.e., 2016-17, 2017-
18, 2018-2019, 2019-2020, 2020-2021.

4.4 FINANCIAL TOOL FOR DATA ANALYSIS

 Ratio Analysis
 Common Size Balance Sheet
 Comparative Balance Sheet
 Trend Analysis

4.5 RATIOS USED

Some of the ratios required to assess the investments and financial position of the company,

 Current Ratio = Current Assets/ Current Liabilities

  Quick Ratio = Quick Assets/ Current Liabilities
 Fixed Asset Ratio = Net Fixed Asset/ Capital Employed
 Debt Equity Ratio= Long Term Debt/ Shareholders’ Funds
 Proprietary Ratio= Total shareholders’ equity/ Total Assets
 Stock Turnover Ratio = Cost of Goods Sold/ Average Inventory
 Debtor Turnover Ratio= Annual Sales/ Average Receivables
 Gross Profit Ratio = Gross Profit/ Sales
 Return On Total Asset Ratio= Net Profit/ Total Assets
 Operating Profit Ratio = Operating Profit/ Net Sales
 Net Profit Ratio = Net Profit/ Net Sales
 Return On Investment = Operating Profit/ Operating Assets
 Working Capital Turnover Ratio = Net Annual Sales/ Average Working Capital
 Capital Turnover Ratio= Net Annual Sales/ Capital Employed
 Total Asset Turnover Ratio = Net Sales/ Average Total Assets
 Return On Capital Employed Ratio =EBIT/ Capital Employed

4.6 INVESTMENTS TRENDS IN BOSCH

 Investments made in equity.

 Investments made in preference.
 Investments made in special limited partnership.
 Investments made in Mutual Funds.

CHAPTER 5
DATA ANALYSIS AND INTERPRETATION
 NOTE: Every item number in this analysis are valued in crores.

5.1 CURRENT RATIO

Current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations
or those due within one year. It tells investors and analysts how a company can maximize the
current assets on its balance sheet to satisfy its current debt and other payables. The ideal
current ratio for any company is 1.5 to 3.

FORMULA:
Current Assets
Current Ratio =

Current Liabilities

TABLE NO 5.1.1

CURRENT ASSETS/
YEAR CURRENT ASSETS CURRENT LIABILITES CURRENT LIABILITIES
2016-2017 5977.12 6421.59 0.93
2017-2018 7869.81 8246.98 0.95
2018-2019 8186.34 8788.98 0.93
2019-2020 5423.49 6998.93 0.77
2020-2021 7451.53 8273.84 0.90

SOURCE: ANNUAL REPORT

CHART NO 5.1.2
 CURRENT RATIO
1
0.9 0.9 0.9
5 0.9
0.9 3 3
0.7
7
0.
7

0.6

0.5

0.4

2016- 2017- 2018- 2019- 2020-

2017 2018 2019 2020 2021
CURRENT RATIO

INTERPRETATION
Current ratio for the year 2016-2017 was 0.93, 2017-2018 it was 0.95, 2018-2019 it was 0.93,
2019-2020 it was 0.77 and 2020-2021 it was 0.90. The current ratio does not differ much in
this study period.

5.2 QUICK RATIO

 The quick ratio is an indicator of a company’s short-term liquidity position and measures a
company’s ability to meet its short-term obligations with its most liquid assets. Since it
indicates the company’s ability to instantly use its near-cash assets (assets that can be converted
quickly to cash) to pay down its current liabilities. A result of 1 is considered to be ideal quick
ratio.

FORMULA

Quick Assets
Quick Ratio =

Current Liabilities

TABLE NO 5.2.1

QUICK ASSETS/
YEAR QUICK ASSETS CURRENT LIABILITIES CURRENT LIABLITIES
2016-2017 3553.52 6569.04 0.69
2017-2018 4000.78 9478.30 0.42
2018-2019 6631.10 9493.57 0.69
2019-2020 4185.49 6998.93 0.59
2020-2021 5309.24 8273.84 0.64

SOURCE: ANNUAL REPORT

CHART NO 5.2.2
 QUICK RATIO
0.8
0.69 0.69
0.7 0.64
0.59
0.6

0.5
0.42
0.4

0.3

0.2

0.1

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
QUICK RATIO

INTERPRETATION
Quick ratio shows sudden increase in the year 2018-19 (0.69) and shows a sudden decrease in
the next year (0.42). This shows inconsistent trend as the value increases one year and then
falls again. Since the ideal ratio has to be 1 or more than one the company need to improve its
quick ratio.

5.3 FIXED ASSET RATIO

Fixed asset ratio is a type of solvency ratio (long-term solvency) which is found by dividing
total fixed assets (net) of a company with its long-term funds. It shows the amount of fixed
assets being financed by each unit of long-term funds. The ideal fixed asset ratio is around
0.67.

FORMULA

Net Fixed assets

Fixed asset ratio =

Capital Employed

Capital Employed = Total Assets – Current liabilities

TABLE NO 5.3.1

YEAR NET FIXED ASSETS CAPITAL EMPLOYED NET FIXED ASSETS/

CAPITAL EMPLOYED
2016-2017 4138.20 7618.47 0.54

2017-2018 4133.03 8339.10 0.49

2018-2019 4184.97 9435.44 0.44
2019-2020 4366.86 9390.68 0.46
2020-2021 4567.95 10176.07 0.44

SOURCE: ANNUAL REPORT

CHART NO 5.3.2
 FIXED ASSET RATIO
0.6
0.54
0.5
0.49
0.46
0.44 0.44
0.4

0.3

0.2

0.1

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
FIXED ASSET RATIO

INTERPRETATION

Fixed asset ratio for the year 2016-2017 was 0.54 and it was the highest value while the lowest
being 2018-2019 and 2020-2021 (0.44). The fixed asset ratio was maintained evenly
throughout the period of study but the ideal ratio of 0.67 was not achieved by the company.

5.4 DEBT EQUITY RATIO

 Debt equity ratio is used to evaluate a company’s financial leverage and is calculated by
dividing a company’s total liabilities by its shareholder equity. The debt equity ratio is an
important metric used in corporate finance. The ideal debt equity ratio is 2 to 2.5.

FORMULA

Total Liabilities
Debt Equity Ratio =

Total Shareholders’ funds

TABLE NO 5.4.1

YEAR TOTAL TOTAL TOTAL LIABILITIES/ TOTAL

LIABILITIES SHAREHOLDERS’
SHAREHOLDERS’ FUNDS
FUNDS

2016-2017 14040.07 6126.06 2.29

2017-2018 16586.08 7164.79 2.31
2018-2019 18224.40 8332.43 2.18
2019-2020 16389.61 7263.99 2.25
2020-2021 18449.91 6977.20 2.64

SOURCE: ANNUAL REPORT

CHART NO 5.4.2
 DEBT-EQUITY RATIO
3

2.64
2.5 2.31
2.29 2.25
2.18
2

1.5

0.5

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
DEBT -EQUITY RATIO

INTERPRETATION

The data shows that the company has maintained a good debt-equity ratio throughout the five-
year period as the ideal ratio should be 2 to 2.5. Hence, the company can pay off its debts and
this is a good sign that the shareholders can also invest in the company.

5.5 PROPRIETARY RATIO

Proprietary ratio measures the amount of funds that investors have contributed towards the
capital of a firm in relation to the total capital that is required by the firm to conduct operations.
It is the proportion of shareholders’ equity to total assets, and as such provides a rough estimate
of the amount of capitalization currents used to support a business.

FORMULA

Total Shareholders’ Equity

Proprietary Ratio=

Total Assets

TABLE NO 5.5.1

TOTAL TOTAL SHAREHOLDERS’

SHAREHOLDERS’
YEAR TOTAL ASSETS EQUITY/
EQUITY
TOTAL ASSETS
2016-2017 6126.06 14040.07 0.43
2017-2018 7164.79 16586.08 0.43
2018-2019 8332.43 18224.40 0.45
2019-2020 7263.99 16389.61 0.44
2020-2021 6977.20 18449.91 0.37

SOURCE: ANNUAL REPORT

CHART NO 5.5.2
 PROPRIETARY RATIO

0.5
0.45 0.44
0.45 0.43 0.43
0.4 0.37
0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021

PROPRIETARY RATIO

INTERPRETATION

The proprietary ratio had been consistent for the year 2016-2017 and 2017-2018 (0.43), then it
has increased a little to 0.45 the next year and fallen to 0.37 in the year 2020-2021. In the five
years taken for this study the company has hovered around the ideal ratio of 0.5. So, the
company can manage the debts.

5.6 STOCK TURNOVER RATIO

 Stock turnover is the rate at which a company replaces inventory in a given period due to sales.
Calculating inventory turnover helps businesses make better pricing, manufacturing,
marketing, and purchasing decisions. The ideal stock turnover ratio is between 5 and 10.
Inventory turnover is the number of times a company sells and replaces its stock of good in a
period.

FORMULA
Cost of Goods Sold
Stock turnover ratio =

Average Inventory

TABLE NO 5.6.1

YEAR COST OF GOODS SOLD AVERAGE INVENTORY COST OF GOODS SOLD/

AVERAGE INVENTORY
2016-2017 13973.38 2063.06 6.77
2017-2018 18621.26 2170.44 8.57
2018-2019 20679.57 2197.27 9.41
2019-2020 12369.15 1961.33 6.30
2020-2021 11403.31 1690.10 6.74

SOURCE: ANNUAL REPORT

CHART NO 5.6.2
 STOCK TURNOVER RATIO
10 9.41
9 8.57
8

7
6.77 6.74
6.3
6

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
STOCK TURNOVER RATIO

INTERPRETATION

The stock turnover ratio of the company is good and very high in the course of the study period.
The ratio has a sudden increase from 6.77 in the year 2016-2017 to 8.57 in the year 2017-2018
and it also further increases to 9.41 in the next year. But after that there is a sudden decrease to
6.30 in the year 2019-2020 and it again increases to 6.74 in the year 2020-2021.

5.7 DEBTOR TURNOVER RATIO

The term receivables turnover ratio refers to an accounting measure that quantifies a company’s
effectiveness in collecting its accounts receivable. An efficient company has a higher accounts
receivable turnover ratio while an inefficient company has a lower ratio. The ideal debtor
turnover ratio is around 5.7.

FORMULA

Annual sales
Debtor Turnover Ratio =

Average Receivables

TABLE NO 5.7.1

YEAR ANNUAL AVERAGE ANNUAL SALES/

SALES RECEIVABLES
AVERAGE RECIVABLES
2016-2017 20140.13 1064.39 18.92
2017-2018 26356.40 944.78 27.82
2018-2019 29054.95 2505.53 11.60
2019-2020 17467.47 1188.35 14.69
2020-2021 15301.45 2816.00 5.40

SOURCE: ANNUAL REPORT

CHART NO 5.7.2
 DEBTOR TURNOVER RATIO
30
27.82

25

20 18.92

14.69
15
11.6

10

5.4
5

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
DEBTOR TURNOVER RATIO

INTERPRETATION

The debtor turnover ratio for all the five years in this research is more than the ideal ratio of
5.37. This proves that the company has very good customers that pay their debts back very
quickly. Since the company has a very high debtor turnover ratio the company also operates on
a cash basis.

5.8 GROSS PROFIT RATIO

Gross profit ratio is the profitability ratio that shows the relationship between gross profit and
total net sales revenue. It is a popular tool to evaluate the operational performance of the
business. The ratio is computed by dividing the gross profit by net sales. The ideal gross profit
ratio is 50 to 70 percent.

FORMULA

Gross Profit
Gross profit ratio= x 100

Sales

TABLE NO 5.8.1

YEAR GROSS SALES GROSS PROFIT/

PROFIT
SALES
2016-2017 7608.03 21589.41 35.23
2017-2018 8093.01 26714.27 30.29
2018-2019 8485.32 29164.89 29.09
2019-2020 5221.66 17590.81 29.86
2020-2021 4017.64 15420.95 26.05

SOURCE: ANNUAL REPORT

 CHART NO 5.8.2

GROSS PROFIT/SALES
40
35.23
35
30.29 29.86
29.09
30
26.05
25

20

15

10

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021

INTERPRETATION

The gross profit for the years is very moderate as the highest is 35.23 in the year 2016-2017
and the lowest being 26.05 in the year 2020-2021. The company’s operational performance
has to improve so that the company can reach the ideal gross profit of 50 to 70.

6.9 RETURN ON TOTAL ASSET RATIO

Return on assets is a profitability ratio that provides how much profit a company can generate
from its assets. In other words, return on assets (ROA) measures how efficient a company’s
management is in earning a profit from their economic resources or assets on their balance
sheet. ROA is shown as a percentage, the higher the number, the more efficient a company’s
management is at managing its balance sheet to generate profits. The ideal return on asset ratio
is 5%.
FORMULA

Net profit
Return on Total Assets Ratio=

Total Assets

TABLE NO 5.9.1

YEAR NET PROFIT TOTAL ASSETS NET PROFIT/

TOTAL ASSETS
2016-2017 1223.08 14040.07 8.71
2017-2018 1562.58 16586.08 9.42
2018-2019 1983.20 18224.40 10.88
2019-2020 239.52 16389.61 1.46
2020-2021 (313.68) 18449.91 (1.70)

SOURCE: ANNUAL REPORT

CHART NO 5.9.2
 RETURN ON TOTAL ASSET RATIO

12 10.88
9.42
8.71
8

1.46
4
0

-1.7
-4
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021

RETURN ON TOTAL ASSET RATIO

INTERPRETATION

The return on total asset ratio is positive throughout except for the last year where the ratio is
negative. Therefore, the company can make good profits from its assets the first three years
since the ratios are better than the ideal ratio which is 5. In the fourth year the company has a
ratio of 1.46 so though the company has a positive ratio it is below the ideal ratio of 5. In the
year 2020- 2021, The ratio is negative which means that the company does not make profits of
its assets.

5.10 OPERATING PROFIT RATIO

Operating profit ratio establishes a relationship between operating profit earned and net
revenue generated from operations (net sales). Operating profit is a type of profitability ratio
which is expressed in percentage. Net sales include both cash and credit sales. On the other
hand, operating profit is the net operating profit i.e. The operating profit before interest and
taxes. Operating profit ratio helps to find out operating profit earned in comparison to revenue
earned from operations. The ideal operating profit ratio is 15%.

FORMULA

Operating profit
Operating profit ratio =
Net Sales

TABLE NO 5.10.1

YEAR OPERATING PROFIT NET SALES OPERATING PROFIT/

NET SALES
2016-2017 2202.54 20276.40 10.80
2017-2018 2738.98 26552.98 10.32
2018-2019 3135.74 29164.89 10.75
2019-2020 1173.65 17590.81 6.67
2020-2021 535.14 15420.95 3.47

SOURCE: ANNUAL REPORT

CHART NO 5.10.2
 OPERATNG PROFIT RATIO
12
10. 10.7
8 10.3 5
10 2

8
6.6
7
6

4
3.47

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
OPERATNG PROFIT
RATIO

INTERPRETATION

The operating profit ratio for the five years has never gone beyond the ideal percentage of 15.
The company must improve the operating profit against the net sales percentage so that the
company perform well in the day-to-day operations.

5.11 NET PROFIT RATIO

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the remaining
profit after all costs of production, administration, and financing have been deducted from
sales, and income tax recognized. The ideal net profit ratio is 10% while 20% is considered
high.

FORMULA

Net profit
Net profit ratio= x 100

Net sales

TABLE NO 5.11.1

YEAR NET PROFIT NET SALES NET PROFIT/

NET SALES
2016-2017 1223.08 20276.40 6.03
2017-2018 1717.73 26552.98 6.46
2018-2019 1938.20 29164.89 6.60
2019-2020 239.52 17590.81 1.36
2020-2021 (313.68) 15420.95 (2.05)

SOURCE: ANNUAL REPORT

CHART NO 5.11.2
 NET PROFIT
8

7 6.46 6.6
6.03
6

2 1.36
1

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
-1

-2
-2.05
-3

INTERPRETATION

The net profit ratio for every year has been very low. The highest being 6.60 in the year 2018-
2019 and the lowest being (2.05) in the year 2020-2021. The company has never surpassed the
ideal percentage of 10 to 20 which means that the company has to improve the pricing strategies
and the cost structure.

5.12 RETURN ON INVESTMENT RATIO

ROI shows the return from the investments. It helps to choose the best investment across
different investment options. The return on investment is a financial ratio that helps to
determine the benefit of the investment against the costs. The ideal ROI ratio is 7% or greater.
Calculation of return on investments shows the profitability of the investments.

FORMULA

Operating profit
Return on investment ratio =

Operating Assets

TABLE NO 5.12.1

YEAR OPERATING OPERATING OPERATING PROFIT/

PROFITS ASSETS
OPERATING ASSETS
2016-2017 2202.54 6240.44 0.35
2017-2018 2738.98 5772.23 0.47
2018-2019 3135.74 6536.97 0.47
2019-2020 1173.65 7518.70 0.15
2020-2021 535.14 9775.79 0.05

SOURCE: ANNUAL REPORT

CHART NO 5.12.2
 RETURN ON INVESTMENTS RATIO

0.5 0.47 0.47

0.45

0.4
0.35
0.35

0.3

0.25

0.2 0.15
0.15

0.1
0.05
0.0
5

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021

RETURN ON INVESTMENTS
RATIO

SOURCE: ANNUAL REPORT

INTERPRETATION

The return on investment for the last five years is very low and the company has to improve
the ROI to increase the benefit of the investments against the costs. The lowest ROI is 0.05 in
the year 2020-2021 while the highest is 0.47 in the years 2017-2018 and 2018-2019.

5.13 WORKING CAPITAL TURNOVER RATIO

Working capital turnover is a ratio that measures how efficiently a company is using its
working capital to support sales and growth. Working capital turnover measures the
relationship between the funds used to finance a company’s operations and the revenues a
company generates to continue operations and turn a profit. The ideal capital turnover ratio is
2.5 or more.

FORMULA

Net annual sales

Working capital turnover ratio =

Average working capital

TABLE NO 5.13.1

NET AVERAGE NET ANNUAL SALES/

ANNUAL WORKING AVERAGE WORKING
YEAR
SALES CAPITAL CAPITAL
2016-2017 20276.40 687.77 29.48
2017-2018 26552.98 3111.20 08.53
2018-2019 29164.89 3067.41 09.50
2019-2020 17590.81 1075.69 16.35
2020-2021 15420.95 1120.66 13.76

SOURCE: ANNUAL REPORT

CHART NO 5.13.2
 WORKING CAPITAL RATIO
35

29.48
30

25

20 16.35

15
13.76

9.5
10 8.53

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
WORKING CAPITAL RATIO

INTERPRETATION

Working capital turnover ratio in these five years have been good and the company is using
its working capital efficiently to support sales and growth. Because of this the company can
measure the relationship between the funds used to finance a company’s operations and the
revenues the company generates.

5.14 CAPITAL TURNOVER RATIO

Managerial efficiency is also calculated by establishing the relationship between net sale with
the amount of capital invested in the business. It indicates organization’s efficiency about the
utilization of capital employed in the business. The ideal capital turnover ratio is 2.5 or more.

FORMULA

Net Annual Sales

Capital Turnover Ratio =

Capital Employed

TABLE NO 5.14.1

YEAR NET ANNUAL CAPITAL EMPLOYED NET ANNUAL SALES/

SALES CAPITAL EMPOYED
2016-2017 20276.40 7618.47 2.66
2017-2018 26552.98 8339.10 3.18
2018-2019 29164.89 9435.44 3.09
2019-2020 17590.81 9390.68 1.87
2020-2021 15420.95 10176.07 1.51

SOURCE: ANNUAL REPORT

CHART NO 5.14.2
 3.5
3.18
3.09
3
2.66
2.5

2 1.87
1.51
1.5

0.5

0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
CAPITAL TURNOVER RATIO

INTERPRETATION

The capital turnover ratio of the company was good in the first three years of the study it was
above the ideal ratio. In the last two years the ratio has fallen below 2 and needs improvement.
The company properly utilizes the capital employed in the business for the first three years.

5.15 TOTAL ASSET TURNOVER RATIO

The asset turnover ratio measures the efficiency of a company’s assets in generating revenue
or sales. Generally, a higher ratio is favored because it implies that the company is efficient in
generating sales or revenues from its asset base. A lower ratio indicates that a company is not
using its assets efficiently and may have internal problems. The ideal asset turnover ratio is 2.5
or more in retail sector while in the utilities sector it is 0.25 to 0.5

FORMULA

Net sales

Asset Turnover Ratio =

Average total assets

TABLE NO 5.15.1

YEAR NET SALES AVERAGE TOTAL ASSETS NET SALES/

AVERAGE TOTAL ASSETS
2016-2017 20276.40 14040.07 144.40
2017-2018 26552.98 16586.08 160.09
2018-2019 29164.89 18224.40 160.03
2019-2020 17590.81 16389.61 107.32
2020-2021 15420.95 18449.91 83.58

SOURCE: ANNUAL REPORT

CHART NO 5.15.2
 ASSET TURNOVER RATIO
180
160.09 160.03
160
144.4
140

107.32
100
83.58
80

60

40

2016-2017 2017-2018 2018-2019 2019-2020 2020-2021

ASSET TURNOVER RATIO

INTERPRETATION

Asset turnover ratio of the company is consistent and very high throughout the study, the
highest being 160.09 in the year 2017-2018 and the lowest being 83.58 in the year 2020-2021.
This implies that the company is very strong in generating revenues from its asset base.

5.16 RETURN ON CAPITAL EMPLOYED RATIO

Return on capital employed is a financial ratio that can be used to assess a company’s
profitability and capital efficiency. ROCE can be especially used when comparing the
performance of companies in capital-intensive sectors, such as utilities and telecoms.

FORMULA

EBIT

Return on capital employed = _

Capital employed

TABLE NO 5.16.1

YEAR EBIT CAPITAL EMPLOYED EBIT/

CAPITAL EMPLOYED
2016-2017 1680.93 7618.47 22.06
2017-2018 2243.28 8339.10 26.90
2018-2019 2551.66 9435.44 27.04
2019-2020 517.75 9390.68 05.51
2020-2021 (399.86) 10176.07 (03.91)

SOURCE: ANNUAL REPORT

CHART NO 5.16.2
 RETURN ON CAPITAL EMPLOYED
30
26.9 27.04
25
22.06
20

15

5.51
5

0
-3.91
-10
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
RETURN ON CAPITAL
EMPLOYED

INTERPRETATION

Return on capital employed in the most of the years in the study in above 20 percentage and is
on the high in the first three years highest being 27.04 in the year 2018-2019. After that the
ROCE drops to 05.51 in 2019-2020 and it further reduces to (03.91) in the year 2020-2021 as
the EBIT falls.

INVESTMENT TRENDS OF BOSCH

NON-CURRENT INVESTMENT

5.17 INVESTMENTS IN EQUITY

Equity represents the amount of money that would be returned to a company’s shareholders if
all of the assets were liquidated and all of the company’s debt were paid off in the case of
liquidation. In the case of acquisition, Equity can sometimes be offered as payment-in-kind. It
also represents the pro-rata ownership of a company’s shares. Bosch Pvt Ltd has many
subsidiaries and associates in which the company has invested equity shares in. The five-year
trend analysis of the investments made in equity.

TABLE NO 5.17.1

YEARS SUBSIDIARIES ASSOCIATES JOINT VENTURES OTHERS

2016-2017 2009.12 4.06 162.94 203.31
2017-2018 8363.41 7.03 164.14 202.76
2018-2019 2879 5.64 141.87 203.55
2019-2020 3303.76 5.64 143.11 203.2
2020-2021 3750.14 5.64 45.74 275.33

SOURCE: ANNUAL REPORTS

CHART NO 5.17.2
 INVESTMENTS IN EQUITY
900
0 8363.41
800
0

700
0

600
0

500
0

400 3750.14
0
3303.76
300
2879
0
2009.12
200
0 141.8
162.9 164.1 7
100 4 143.1 45.7
0 4 1 4
4.06 7.03 5.64 5.64 5.64
0 203.31 202.76 203.55 203.2 275.33
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
SUBSIDIARIES ASSOCIATES JOINT VENTURES OTHERS

INTERPRETATION
The table and the figure show the various ventures in which the company has invested in. There
is a lot of variation in subsidiaries in the year 2017-2018. The company’s investments are
consistent in joint ventures and other investments throughout the study period. There is also
slight to no difference in the investment in Associate companies.

5.18 INVESTMENT IN PREFERENCE

Preference shares, more commonly referred to as preferred stock, are shares of a company’s
stock with dividends that are paid out shareholders before common stock dividends are issued.
If the company enters bankruptcy, preferred stock holders are entitled to be paid from company
assets before common stockholders. The five-year trend analysis of investments made in
preference of Bosch Pvt Ltd;

TABLE NO 5.18.1

YEAR SUBSIDIARIES ASSOCIATES JOINT VENTURES

2016-2017 - 8.38 22.51
2017-2018 - 9.85 22.39.
2018-2019 35.86 5.15 22.37
2019-2020 38.82 6.37 22.45
2020-2021 59.08 6.73 -

SOURCE: ANNUAL REPORT

 CHART NO 5.18.2

INVESTMENTS MADE IN PREFERENCE

70

60
59.0
8

50

40 38.8
35.8 2
6
30

22.5 22.3 22.3 22.4

1 9 7 5
20

9.8
10 5 6.7
8.3 5.1 6.3
7 3
5
0 0 0
0
2016- 2017- 2018- 2019- 2020-
2017 2018 2019 2020 2021
SUBSIDIARIES ASSOCIATES JOINT VENTURES

INTERPRETATION

The company’s investment pattern in preference shares is show in the table and figure. There
is a sudden increase in investment in subsidiaries, the highest being 59.08 in the year 2020-
2021. The company’s investment in associates is consistent throughout the study period, but
there is slight variation as there was a sudden drop from 9.85 in the year 2017-2018 to 5.15 in
the year 2018- 2019. Investments regarding joint ventures were consistent throughout the study
period until the company sold the investments in the last year of the study period.
5.19 INVESTMENT MADE IN SPECIAL LIMITED PARTNERSHIP

The five-year trend analysis of investments made in special limited partnership;

TABLE NO 5.19.1
YEAR INVESTMENT
2016-2017 -
2017-2018 -
2018-2019 21.56
2019-2020 21.56
2020-2021 21.56
SOURCE: ANNUAL REPORT

CHART NO 5.19.2

INVESTMENTS
25
21.5 21.5 21.5
6 6 6
20

15

10

0 0
0
2016- 2017- 2018- 2019- 2020-
2017 2018 2019 2020 2021
INVESTMENTS

INTERPRETATION

In the table and figure the trend of the company’s investments in the special limited partnership
is highlighted. The company has not invested in the first two years of the study, but from the
year 2018-2019 the company invested in the special limited partnership for 21.56 crores and
has stayed consistent throughout the last three years of the study period.
CURRENT INVESTMENT

5.20 INVESTMENT IN MUTUAL FUNDS

Current investments are financial investments that can easily be converted to cash, typically
within 5 years. Many short-term investments are sold or converted to cash after a period of 3-
12 months. Some common examples of short-term investments include money market, high-
yield savings account, government bonds and treasury bills. Usually, these investments are
high-quality and highly liquid assets or investment vehicles.

TABLE NO 5.20.1

YEAR MUTUAL FUND

2016-2017 877.17
2017-2018 3055.15
2018-2019 -
2019-2020 -
2020-2021 -

SOURCE: ANNUAL REPORT

 CHART NO 5.20.2

MUTUAL FUNDS
350
0
3055.1
300 5
0
250
0
200
0

150
0
100
0 877.17
50
0
0 0 0
0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
MUTUAL FUNDS

INTERPRETATION

This table and figure show the company’s investment in the mutual funds. There is a sudden
increase in the amount invested from 877.17 crores in the year 2016-2017 to 3055.15 crores in
the 2017-2018. But after the year 2017-2018 the company has sold the mutual fund and has not
invested in mutual fund in the study period.
 CHAPTER 6

FINDINGS AND SUGGESTION

6.1 FINDINGS

 The current ratio does not differ much in this study period. But it was not ideal too.
 The quick ratio had many variations in the five-year study period. There is a sudden
increase in the ratio and then it suddenly falls the next year.
 Fixed asset ratio was consistent throughout the study period. Though the ratio was
consistent it was not ideal for the company.
 The company has a steady debt-equity ratio throughout the study period. This shows
that the company has the efficiency to pay off its debts and it is also good for the
investors to invest in the company.
 The proprietary ratio has not changed much in the study period. It has been even
throughout the five years and its has been near the ideal ratio of 0.5. Therefore, the
company can manage the debts.
 The stock turnover ratio of the company is good and very high in the course of the study
period. The ideal being 5 to 10, the ratio has always been around 6 to 8 in the study
period which very good for the company. The company is making better purchasing
decisions and pricing of the products.
 The debtor turnover ratio has been consistently over the ideal ratio throughout the five
years taken for the study. This proves that the company has very good customers that
pay their debts back very quickly. Since the company has a very high debtor turnover
ratio the company also operates on a cash basis.
 The company’s operational performance has to improve so that the company can reach
the ideal gross profit of 50 to 70.
 The company’s total asset ratio is higher than ideal in the first three years but in the
fourth and fifth year it suddenly decreases rapidly and falls below the ideal ratio. So,
the company efficiently uses the assets to make profits for the first three years.
 The operating profit ratio of the company has been very low than the ideal percentage
of 15. The company must improve the operating profit against the net sales percentage
so that the company perform well in day-to-day basis.
 The net profit ratio for every year has been very low. The company has to improve the
net profit percentage.
 The return on investments is not up to the mark in the study period. The company needs
to improve the ROI in order to determine the benefit of investment against costs and
also to increase the profitability of investments.
 The company is using its working capital efficiently to support sales and growth.
Because of this the company can measure the relationship between the funds used to
finance a company’s operations and the revenues the company generates.
 The capital turnover ratio of the company was above the ideal ratio but suddenly falls
below the ideal ratio in the last two years of the study. This shows that properly
utilization of capital employed are made by the company for the first three years.
 Asset turnover ratio of the company is consistent and very high throughout the study;
hence it implies that the company is efficient in generating sales or revenue from asset
base.
 The company has to increase its ROCE as it is important for the investors to invest in
the company and also for the company to receive sufficient capital.
 The company’s investments vary and stay consistent also. There are variations in
subsidiaries, consistency in associates, and slight variations in joint ventures and other
investments throughout the study period.
 There is a sudden increase in investment in subsidiaries. The company’s investment in
associates is consistent throughout the study period, but there is slight variation. Joint
ventures were consistent throughout the study period.
 The company has not invested in the first two years of the study, and after investing the
company has stay consistent throughout the study.
 The company’s investment in the mutual funds is analyzed. There is a sudden increase
in the amount invested. But after the first two years the company has not invested in
mutual funds.
6.2 SUGGESTIONS

 The company can improve the financial position as it is down due to covid situation in
the country.
 The investments made by the company are for business purpose only and the company
has made good investments over the study period.
 The cash flow of the company is stable but it has to improve the operating the cash flow
and has to maintain the day-to-day activities in a better way.
 Some ratios that were compiled in the study were not ideal so the company has to
improve the ratios. So that this will influence the investors to invest more in the
company.
 The company has to make amends to improve the profit as the covid situation has now
relaxed.
 The sales volume had decreased during the study period. The sales volume of the
company should increase so that the revenue of the company will increase.
 CHAPTER 7

CONCLUSION

This project of investment analysis in BOSCH ELECTRICAL DRIVE INDIA PVT LTD is
not merely a work of the project but a brief knowledge and experience of how to analyze the
financial performance and investments of the company. The study undertaken has brought in
to the light of the following conclusions.

The investments made by any company is for business purposes only. The investments made
by Bosch Electrical Drive India Pvt Ltd are taken and the trends of investments are analyzed
in this study. Though there are many companies in which Bosch Electrical Drive India Pvt Ltd
has invested in, only the total of the type of investments are taken for this study. The
investments made by the company are consistent and there are a lot of variations also. The
financial position of the company is also determined in the study with the required ratios. The
financial position of the company in the first three years of the study is good whereas the last
two years it has dropped. So, the company needs to improve the financial position of the
company. The cash flows of the company are also analyzed. The cash flows are better in the
first three years but it also decreases and falls down in the last two years of the study. Therefore,
the company needs to improve its cashflows. Overall, the study shows that the company is
down due to covid situation and it needs to improve in certain areas to improve the balance
sheet.
 BIBLIOGRAPHY

 Investopedia.com
 Clearyourtax.com
 Annual Reports of Bosch Electrical Drive India Pvt Ltd
 www.bosch.com
 Sebi.gov.in
 Business India
 Business World
 ANNEXURES

BALANCE SHEET OF BOSCH FOR THE PERIOD

2016-2019

PARTICULARS 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021

Assets
Non-current assets
Property’ plant and equipment 4656.09 4687.63 4805.98 5036.66 5309.66
Capital work-in progress 157.59 212.92 274.64 420.97 228.78
Intangible assets 31,471.18 28,658.60 358.63 910.55 1001.29
Intangible assets under development 48.26 188.31 392.98 173.17 143.07
Right of use assets - - - 406.46 289.54
Goodwill - - 449.90 449.90 449.90
Total 7339.94 8716.27 10038.06 10966.12 10998.38
Financial assets
Investments 2001.68 2747.46 2636.50 2719.63 3068.72
Trade Receivables 1.7 0.2 0.14 0.58 0.31
Loans 45.57 33.54 31.71 32.42 20.50
Other financial assets 136.52 24.40 41.44 69.37 37.04
Income tax assets (net) 111.05 59.90 102.34 124.71 100.26
Other non-current assets 468.26 475.37 953.80 621.70 349.31
Total 5977.12 7869.81 8186.34 5423.49 7451.53
Assets classified as held for sale 123.00 - - - -
Total assets 14040.07 16586.08 18224.40 16389.61 18449.91
Equity and liabilities
Equity
Equity share capital 284.58 292.71 293.55 293.55 293.55
Other equity 5841.47 6872.08 8038.88 6970.44 6683.65
Total 6126.06 7164.79 8332.43 7263.99 6977.20
Liabilities
Non- current liabilities
Financial liabilities
Borrowings 1146.32 415.68 298.40 1353.86 2558.01
Lease liability - - - 27.55 22.12
Other financial liabilities 47.21 143.83 34.59 49.92 44.88
Provisions 132.55 255.04 249.63 180.69 189.57
Deferred tax liabilities 126.90 298.38 249.73 264.82 170.79
Other non-current liabilities 39.26 203.74 1.64 - -
Contract liabilities - - 269.02 249.85 213.50
Total 1492.25 1174.30 1103.01 2126.69 3198.87
Current liabilities
Financial liabilities
Borrowings 198.63 100.00 100.00 1710.97 1158.24
Lease Liability - - - 12.92 7.94
Trade payables 3116.99 4658.61 5018.93 2623..91 5164.69
Other financial liabilities 1973.37 1647.94 1600.34 1340.79 784.43
Contract Liabilities - - 790.23 611.23 479.43
Provisions 518.30 616.23 802.77 624.85 424.96
Other Current Liabilities 613.92 1212.59 476.69 74.26 160.70
Current Tax Liabilities - 1159.01 - - 53.45
Total 6421.59 8246.98 8788.96 6998.93 8273.84
Total equity and liabilities 14040.07 16586.08 18224.40 16389.61 18449.91
 STATEMENT OF PROFIT OR LOSS ACCOUNT OF
BOSCH FOR THE PERIOD OF 2016-2019
PARTICULARS 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Income
Revenue from operation 21453.14 26524.51 29054.95 17467.47 15301.45
Other income 136.27 189.76 109.94 123.34 119.50
Total income 21589.41 26714.27 29164.89 17590.81 15420.95
Expenses
Cost of materials consumed 13148.79 15347.84 20872.27 10384.46 11118.96
Purchase of stock-in-trade 1583.39 1994.91 766.10 793.22 746.66
Changes in inventories of finished
(758.80)
goods, stock-in-trade and work-in- 1278.51 (955.80) 1191.47 (462.31)
progress
Excise duty on sale of goods 1313.01 276.60 - - -
Employee benefit expense 1480.05 1811.92 2098.77 1615.06 1583.89
Finance costs 155.37 131.24 70.38 109.45 306.79
Depreciation and amortization 517.89 554.60 621.01 669.80 747.74
expense
Other expenses 2484.15 3075.73 3140.87 2309.61 1779.11
Total expenses 19923.87 24471.38 26610.60 17073.07 15820.81
Profit/(loss) before exchange gain
on swap contracts, exceptional 1665.53 2242.89 2554.29 517.74 (399.86)
items and tax
Exchange gain on swap contracts 15.39 0.39 (2.63) 0.01 -
Profit/(loss) before exceptional
items and tax 1680.93 2243.28 2551.66 517.75 (399.86)
Exceptional items (350.84) (12.56) (54.86) (155.83) (12.05)
Profit/(loss) before tax 1330.08 2230.71 2496.80 361.92 (411.91)
Tax expense
 Current tax 313.71 677.27 378.20 71.74 0.02
Deferred tax (206.71) (914.63) 135.40 50.66 (98.25)
Profit for the year 1223.07 1562.58 1983.20 239.52 (313.68)
Other comprehensive income/ (loss) 8.51 (35.46) (46.68) (62.63) 7.87
Total comprehensive (loss)/ income
for the year 851.76 (3546.40) 1936.52 176.89 (305.81)

Earnings per share (face value rs.1

each)
Basic 4.24 5.34 6.76 0.82 (1.07)
Diluted 4.24 5.32 6.76 0.82 (1.07)