RATIO ANALYSIS OF TATA MOTORS, ASHOK

LEYLAND, AND MAHINDRA& MAHINDRA

A project is submitted in partial fulfilment of the requirements for
The award of the degree of
BACHELORS OF BUSINESS ADMINISTRATION
BY
SHAHZEB HAMID
BBA/40581/21

DEPARTMENT OF MANAGEMENT
BIRLA INSTITUTE OF TECHNOLOGY
MESRA, RANCHI-835215
(LALPUR OFF CAMPUS, RANCHI)
 ACKNOWLEDGEMENT
I am grateful to BIRLA INSTITUTE OF TECHNOLOGY (OFF
CAMPUS LALPUR RANCHI) for giving me an opportunity to
pursue BBA and I would like to thanks our Director Dr. Vandana
Bhattacharjee who has been perpetual source of inspiration and
offered valuable suggestions to improve my Research work.

I am thankful to my research guide Dr. Avinash Sinha for abundant

guidance, support, and encouragement throughout my study.

I would like to express my thanks to my thanks to my family, friends,

and colleagues for their unfailing support.

Thanks

SHAHZEB HAMID
 DECLARATION OF CERTIFICATE
This is to certify that the project entitled “ RATIO ANALYSIS OF
TATA MOTORS, ASHOK LEYLAND, AND MAHINDRA” is a
partial fulfilment of the requirement for the completion of
BACHELORS OF BUSINESS ADMINISTRATION in “ BIT
MESRA EXTENSION, LALPUR, RANCHI” is an authentic work
carried out under my supervision and guidance.

To the best of my knowledge, the content of this project does not form
a basis for the award of any previous degree to anyone else.

DATE: (Dr. AVINASH SINHA)

Department of Management
Birla institute of Technology
Extension centre, Lalpur.
 CERTIFICATE OF APPROVAL
The project entitled “Ratio analysis of Tata motors, Ashok Leyland,
Mahindra & Mahindra” is hereby approved as a credible study of
research topic and has been presented in satisfactory manner to
warrant its acceptance as prerequisite to the degree for which it has
been submitted.

It is understood that by this approval, the undersigned do not

necessarily endorsed any conclusion drawn or opinion expressed
therein, but approve the project for the purpose for which it is
submitted.

…………………… …………………..
Internal Examiner External Examiner
 CONTENT
S.NO. TOPIC PAGE
1. CHAPTER 1
1.1 Introduction of the study
1.2 Objectives of the study
2. CHAPTER 2
2.1 TATA MOTORS

2.1.1 About Tata motors

2.1.2 Product of Tata motors
2.1.3 Joint ventures
2.2 ASHOK LEYLAND

2.2.1 About Ashok Leyland

2.2.2 Product of Ashok leyland
2.2.3 Joint ventures
2.3 MAHINRA

2.3.1 About Mahindra

2.3.2 Product of Mahindra
2.3.3 Joint ventures

3. CHAPTER 3
3.1 Research Methodology
3.2 Tools to be Employed

4. CHAPTER 4
4.1 Literature Review
4.2 National Review
4.3 International Review

5. CHAPTER 5
5.1 Ratio Analysis
5.2 Types of Ratio Analysis
 5.3 Limitations of Ratio analysis
5.4 Advantages of Ratio analysis
6. CHAPTER 6
6.1 Data Presentation
6.2 Graphical Representation
7. CHAPTER 7
7.1 Conlusion
8. CHAPTER 8
8.1 Biblography

9.
 CHAPTER 1: 1.1 INTRODUCTION

This ratio analysis report aims to assess the financial performance and
health of three prominent players in the Indian automotive industry:
Tata Motors, Ashok Leyland, and Mahindra & Mahindra. Each of
these companies holds a significant presence in the sector, producing
a wide range of vehicles, from passenger cars and commercial
vehicles to agricultural machinery.

Ratio analysis is a valuable tool used to examine the financial

statements of these companies, offering insights into their
profitability, liquidity, solvency, and overall operational efficiency. By
comparing and analyzing various financial ratios, we can gain a
comprehensive understanding of how these companies are managing
their resources and whether they are poised for growth or facing
financial challenges.

In the following sections, we will delve into specific financial ratios,

including profitability ratios, liquidity ratios, and debt ratios, to gauge
the financial performance of Tata Motors, Ashok Leyland, and
Mahindra. These insights will be crucial for investors, creditors, and
stakeholders looking to make informed decisions regarding their
engagement with these companies in the Indian automotive market."

CHAPTER 1: 1.2 OBJECTIVES OF THE STUDY

The objectives of studying the ratio analysis of companies like Tata
Motors, Ashok Leyland, and Mahindra can vary depending on the
specific goals of the analysis. However, some common objectives
include:

Financial Performance Evaluation: To assess the financial health and

performance of these automotive companies by analyzing key
financial ratios such as profitability, liquidity, and solvency ratios.

Comparison: To compare the financial performance of these

companies to identify strengths and weaknesses relative to each other
and the industry average.

Trend Analysis: To track the financial performance over multiple

periods (e.g., years) to identify trends and changes in financial ratios,
which can provide insights into their financial stability.

Investment Decision-Making: To assist investors in making informed

investment decisions by analyzing the financial ratios and assessing
the companies' ability to generate returns and manage risks.

Creditworthiness Assessment: For creditors and lenders, to determine

the creditworthiness of these companies and assess their ability to
repay debts.

Operational Efficiency: To gauge how efficiently the companies are

managing their assets and liabilities and whether there is room for
improvement in operational efficiency.
Profitability Analysis: To evaluate the profitability of the companies
by analyzing ratios like net profit margin, return on assets (ROA), and
return on equity (ROE).

Liquidity Assessment: To determine if the companies have enough

short-term assets to cover their short-term obligations by analyzing
liquidity ratios like the current ratio and quick ratio.

Solvency Analysis: To assess the long-term financial stability and

debt management of these companies by looking at solvency ratios
such as the debt-to-equity ratio.

Strategic Planning: To aid in strategic planning and decision-making

by identifying areas that require improvement or further investment.

These objectives can provide a comprehensive understanding of the

financial health and performance of Tata Motors, Ashok Leyland, and
Mahindra, which is valuable for various stakeholders, including
investors, creditors, management, and analysts.
CHAPTER 2: 2.1.1 ABOUT TATA MOTORS
Tata Motors Group (Tata Motors) is a $37 billion organization. It is a
leading global automobile manufacturing company. It's diverse
portfolio includes an extensive range of cars, sports utility vehicles,
trucks, buses and defense vehicles. Tata Motors is one of India's
largest OEMs offering an extensive range of integrated, smart and e-
mobility solutions.

Part of the USD128 billion Tata group founded by Jamshedji tata in

1868, tata motors is among the world's leading manufacturers of
automobiles. We believe in 'Connecting aspirations', by offering
innovative mobility solutions that are in line with customer's
aspirations. We are India's largest manufacturer, and we continue to
take the lead in shaping the Indian commercial vehicle landscape,
with the introduction of leading-edge powertrains and electric
solutions packaged for power performances and user comfort at the
lowest life-cycle costs. Our new passenger cars and utility vehicles
are based on Impact Design and offer a superior blend of
performance, drive ability and connectivity.

Tata Motors focuses on connecting aspirations and our pipeline of

tech enabled products keeps them at the forefront of the market. Tata
motors have identified six key mobility drivers that lead them into the
future- modular architecture, complexity reduction in the
manufacturing, connected and autonomous vechiles, clean drivelines,
shared mobility and low cost of ownership.
CHAPTER 2: 2.1.2 PRODUCTS OF TATA MOTORS
PASSENGER VEHICLES

TATA NEXON

TATA PUNCH

TATA TAIGO
TATA HARRIER
COMMERCIAL VEHICLES

TATA ACE GOLD

TATA YODHA

TATA PRIMA
TATA SIGMA
MILITARY VEHICLES

DEFENCE COMBAT WHEELED ARMOURED PLATFORM

DEFENCE SUPPORT COMBAT PLATFORM 8*8

DEFENCE SUPPORT COMBAT 12*12

DEFENCE COMBAT SUPPORT 4*4
CHAPTER 2: 2.1.3 JOINT VENTURES OF TATA
MOTORS

Jaguar Land Rover (JLR): Tata Motors acquired the British

automotive brands Jaguar and Land Rover from Ford in 2008. JLR
operates as a separate entity under Tata Motors.

Tata Daewoo Commercial Vehicle: This is a subsidiary of Tata Motors

and specializes in the production of commercial vehicles, primarily
for the South Korean market.

Tata Hispano: Tata Hispano is a subsidiary that focuses on

manufacturing urban and intercity buses.

Tata Motors Finance: This division offers financial services, including

vehicle financing, to customers purchasing Tata vehicles.

Tata Motors European Technical Centre (TMETC): This subsidiary is

involved in research and development activities, especially for the
European market.
Tata Technologies: Tata Technologies provides engineering and
design services to various industries, including automotive.

CHAPTER 2: 2.2.1 ABOUT ASHOK LEYLAND

Ashok Leyland is a leading global commercial vehicle manufacturer
with headquarters in Chennai, India. The company was founded in
1948 as Ashok Motors and was later renamed Ashok Leyland in 1955
after a collaboration with British Leyland. Ashok Leyland is the
second largest manufacturer of commercial vehicles in India, the third
largest manufacturer of buses in the world, and the tenth largest
manufacturer of trucks.

The company has a wide range of products, including trucks, buses,

military vehicles, and power solutions. Ashok Leyland's trucks are
known for their durability and fuel efficiency, and its buses are
popular for their comfort and safety. The company also has a strong
presence in the defence sector, manufacturing a variety of armored
vehicles and other military equipment. In addition, Ashok Leyland
provides a range of power solutions, including diesel engines and
generators.

The company has a global presence, with operations in over 40

countries. Ashok Leyland's products are exported to a variety of
markets, including Europe, Asia, Africa, and the Middle East. The
company has a strong network of dealerships and service centers
around the world.
Ashok Leyland is committed to innovation and sustainability. The
company is investing heavily in research and development to develop
new and innovative products. Ashok Leyland is also committed to
reducing its environmental impact and is working to develop more
fuel-efficient and environmentally friendly vehicles.

CHAPTER 2: 2.2.2 PRODUCTS OF ASHOK LEYLAND

COMMERCIAL VEHICLES

TIPPER TRUCK

TRUCK

SMALL LOADER
SCHOOL BUS

DEFENCE VEHICLES

STALLION BROSHURE

GUN TOWING VEHICLES

STALLION MK 4 GENERAL UTILITY

CHAPTER 2: 2.2.3 JOINT VENTURES OF ASHOK
LEYLAND

Hinduja Leyland Finance Ltd.- (HLFL): A wholly-owned subsidiary

of Ashok Leyland, HLFL provides financing solutions for the
purchase of Ashok Leyland vehicles.
Avia s.r.o.:-A Czech Republic-based manufacturer of buses, trucks,
and vans. Ashok Leyland acquired a majority stake in Avia in 2006.
Ashok Leyland Nissan Vehicles Ltd.- (ALNVL): A joint venture with
Nissan Motor Company that was formed in 2008 to develop and
manufacture light commercial vehicles (LCVs) for the Indian market.
Nissan Ashok Leyland Powertrain Ltd.- (NALPT): A joint venture
with Nissan Motor Company that was formed in 2008 to develop and
manufacture powertrains for LCVs.
Nissan Ashok Leyland Technologies Ltd.- (NALT): A joint venture
with Nissan Motor Company that was formed in 2008 to develop and
manufacture technologies for LCVs.
Ashok Leyland John Deere Ltd.- (ALJDL): A joint venture with John
Deere that was formed in 2009 to develop and manufacture earth-
moving equipment.
Ashok Leyland Optare Ltd.- (AOL): A joint venture with Optare plc
that was formed in 1994 to develop and manufacture buses for the
Indian market.
Ashok Leyland Hino Ltd.- (ALHL): A joint venture with Hino Motors
that was formed in 1983 to develop and manufacture buses for the
Indian market

CHAPTER 2: 2.3.1 ABOUT MAHINDRA & MAHINDRA

Mahindra & Mahindra Limited (M&M), also known as Mahindra
Group, is an Indian multinational conglomerate headquartered in
Mumbai. It is one of the largest automotive manufacturers in India,
with a wide range of products, including tractors, utility vehicles,
passenger vehicles, and defence vehicles.

Mahindra & Mahindra was founded in 1945 as Mahindra &

Mohammed by brothers Kailash Chandra Mahindra and Jagdish
Chandra Mahindra, along with Malik Ghulam Muhammad. It began
as a steel trading company in Ludhiana, Punjab. The company's first
major breakthrough came in the 1950s when it obtained the license to
assemble Willys Jeeps in India. This led to the development of the
Mahindra Jeep, which became a popular vehicle in India.

In the 1970s, Mahindra & Mahindra expanded into the tractor

industry, acquiring Escorts Group. This acquisition made Mahindra &
Mahindra the world's largest tractor manufacturer by volume. The
company also began to develop its own passenger cars in the 1980s,
starting with the Mahindra Scorpio in 2002.

Today, Mahindra & Mahindra is a diversified conglomerate with

businesses in a variety of sectors, including agriculture, automotive,
finance, renewable energy, and defense. The company has a presence
in over 100 countries around the world.
Overall, Mahindra & Mahindra is a well-managed and diversified
conglomerate with a strong track record of innovation and
sustainability. The company is well-positioned for long-term growth
and success.

CHAPTER 2: 2.3.2 PRODUCTS OF MAHINDRA

PESSENGER VEHICLES

MAHINDRA SUV 700

MAHINDRA BOLERO
MAHINDRA SCORPIO N

MAHINDRA THAR 4*4

COMMERCIAL VEHICLES

MAHINDRA PICK-UP

MAHINDRA BLAZO X 35
MAHINDRA YUVA TRACTOR

MAHINDRA JEETO
DEFENCE VEHICLES

BUFFALO 6*6

MAHINDRA GPYSY AXE

MAHINDRA MARKSMAN

MAHINDRA TITAN-S
CHAPTER 2: 2.3.3 JOINT VENTURE OF MAHINDRA
Mahindra Renault Limited:- This joint venture was formed in 2007
between M&M and Renault S.A. of France. The partnership focused
on the development and production of new passenger cars for the
Indian market. However, the joint venture was dissolved in 2020.

Mahindra Ford India Limited:- This joint venture was formed in 2019
between M&M and Ford Motor Company. The partnership aimed to
develop new SUVs and electric vehicles for the Indian and emerging
markets. However, the joint venture was called off in 2020 due to
changes in global economic and business conditions.

Mahindra Navistar Limited:- This joint venture was formed in 2005

between M&M and Navistar International, an American truck and
engine manufacturer. The partnership focused on the development and
production of commercial vehicles for the Indian market.

Mahindra Mitsubishi Agricultural Machinery Limited:- This joint

venture was formed in 1994 between M&M and Mitsubishi Heavy
Industries of Japan. The partnership focused on the production and
distribution of agricultural machinery in India.

Mahindra & Mahindra Korea Limited:- This joint venture was formed
in 2011 between M&M and Ssangyong Motor Company of South
Korea. The partnership aimed to expand M&M's presence in the
Korean market.

CHAPTER 3 : 3.1 RESEARCH METHODOLOGY

INTRODUCTION
Research can be defined as the search for knowledge or as any
systematic investigation, with an open mind, to establish novel facts,
usually using a scientific method. The primary purpose for applied
research (as opposed to basic research) is discovering, the
development of methods and systems for the advancement of human
knowledge on a interpreting and wide variety of scientific matters of
our world and the universe Scientific research relies on the
application of the scientific method, a harnessing of curiosity. This
research provides scientific information and theories for the
explanation of the properties of the of the nature and the world around
us. It makes practical application possible. Scientific research is
funded by public authorities, by charitable possible organizations and
by Scientific research private groups including many companies. can
be subdivided into different classifications to their academic and
application disciplines.

Artistic research, also seen as 'practice-based research', can take form

when creative works are considered both the research and the object
of research itself. It is the debatable body of thought which offers an
alternative to purely scientific methods in research in its search for
knowledge and truth.

Historic research is embodied in the scientific method. The phrase my

research is also used loosely to describe a person's entire collection of
information about a particular subject.

RESEARCH METHODS

The goal of the research process is to produce new knowledge, which

takes three main forms (although, as previously discussed, the
boundaries between them may be obscure):

• Exploratory Research, which structures and identifies new problems

• Constructive Research, which develops solution to a problem

Empirical Research, which tests the feasibility of a solution using

empirical evidence.

Research can also fall into two distinct types:

 • Primary Research ( collection of data that does not already
exists)
• Secondary data (summary collection and/or synthesis of existing
research)
In social sciences and later in other disciplines, the following two
research method can be applied, depending on the properties of matter
and on the objectives of the research.
• Qualitative Research(understanding of human behaviour and the
reasons that governs such behaviour)
• Quantitative Research(systematic empirical investigation of
quantitative properties relationships and phenomenon of their
relationships)
Research is often conducted using the hourglass model structure of
research. The hourglass model starts with a broad spectrum of
research, focusing in the requirement information through the
methodology of the projects (like the neck of the hourglass), then
expands the research in the form of discussion and result.
RESEARCH DESIGN

research design specifies the methods and procedures for conducting a

particular study.

The researcher should specify the approach he intends to use with.

respect to the proposed study. Research design can be grouped into
three categories:

An Exploratory Research focuses on the discovery of ideas and is

generally based on secondary data. It is preliminary investigation
which does not have a rigid design. This is because a researcher
engaged in an exploratory study may have to change his focus as a
result of new ideas and relationships among the variables.

A Descriptive study is undertaken when the researcher wants to know

the characteristics of certain groups such as age, sex, educational
level, income, occupation, etc. In contrast to exploratory research
descriptive studies are well-structured.

Causal research is undertaken when the researcher when the

researcher is interested in knowing the cause-and-effect relationship
between two or more variables.

What Design you choose depends on different factors. *What

information do you want? The aims of the study.

*The nature of the phenomenon- is it feasible to collect data, and if

so, would it be valid/reliable?
*How reliable should the information be ? It is ethical to conduct the
study?
*The cost of the design.
* Is there is little or much current scientific theory and literature on
the topic?

Descriptive Research
Descriptive Research includes surveys and fact-finding enquiries
different kinds. The major purpose of descriptive research is
description of the situation as sit exists at present. In social science
and business research we quite often use the term ex-post facto
research for descriptive research studies The main characteristics of
this method is that the researcher has no control over the variable, he
can only report what has happened or what is happening. The methods
of research utilized in descriptive research are survey methods of all
kinds, including and comparative and correlation methods.

DATA COLLECTION

Data Collection is a term used to describe a process of preparing and

collecting data- for example as part of a process improvement or
similar project. The purpose of data collection is to obtain information
to keep on record, to make decisions about important issues, to pass
information on to together. Primarily, data is collected to provide
information regarding a specific topic.

For Primary Data-Survey method has been adopted for this project.
For Secondary Data- Secondary data was derived from printed matter
such as journals. magazines, and annual reports.
TYPES OF DATA COLLECTION:
1. Mail questionnaires
2. By personal interview

Other main types of data collection include census, sample survey,

and administrative by-product and each with their respective
advantages and disadvantages. A census refers to data collection about
everyone or everything in a group or population and has advantages,
such as accuracy and detail and disadvantages. A sample survey is a
data collection method that includes only part of the total population
and has advantages,
Such as cost and the time and disadvantage, such as accuracy and
detail.

CHAPTER 3: 3.2 RESEARCH METHODOLOGY OF

THE PROJECTS
he report will be prepared mainly using primary and secondary data.
They are follows below

PRIMARY DATA
It is first hand data, which is collected by researcher itself. Primary
data is collected by various approaches to get a precise, accurate,
realistic, and relevant data. The main tool in gathering primary data
was investigation and observation. It was achieved by a direct
approach and observation from the officials of the company
SECONDARY DATA
It is the data which is already collected by someone else. Researcher
must analyze the data and interprets the results. It has always been
important for the completion of any report. It provides reliable,
suitable, adequate, and specific knowledge.

It took data comprise annual reports and post records. Company

website has provided me annual reports of the year 2016-2021 help of
which, I prepared my report.

The valuable cooperation extended by staff members contributed a lot

to fulfill the requirements in the collection of data in order to
complete the project. In this study ratio analysis, has been used for
analyzing and interpreting the result. Some of the secondary data
which was collected through

• Company research mauals.

• Annual Report of the company.

Research Design

In view of the objects of the study listed above an exploratory

research design has been adopted. Exploratory research is one which
is largely interprets and already available information and it lays
particular emphasis on analysis and interpretation of the existing and
available information.
To know the financial status of the company.
To know the credit worthiness of the company.
To offer suggestions based on research finding.

Data Collection Tools

To analyze the data, acquire from the secondary sources "Ratio
Analysis". The scope of the study is defined below in terms of
concepts adopted and period under focus. First the study of Ratio
Analysis is confined to the Tata motors, Ashok Leyland, and
Mahindra. Secondly the study is based on the annual reports of the
company for the year 2026 – 2021.

CHAPTER 4: 4.1 LITERATURE REVIEW

A literature review is a comprehensive summary of previously
published research on a particular topic. It is a critical evaluation of
the existing body of knowledge, identifying key themes, debates, and
gaps in the literature. Literature reviews are typically written as part
of a larger research project, such as a thesis or dissertation, but they
can also be standalone pieces of writing.

The purpose of a literature review is to:

Synthesize existing knowledge:- A literature review provides a clear
and concise overview of what is known about a particular topic. It
identifies the key theories, concepts, and findings that have been
established in the field.
Identify gaps in the literature:-By reviewing the existing research, a
literature review can identify areas where there is a need for more
research. This can help to guide future research efforts.
Establish a context for new research:- A literature review positions
new research within the context of existing knowledge. This helps to
show how the new research contributes to the field.

There are several different types of literature reviews, but they all
share some common elements. These elements include:

A clear topic:- The literature review should clearly define the topic of
interest.
A comprehensive search:-The literature review should include a
comprehensive search of relevant sources, including books, journal
articles, and other scholarly materials.
Critical evaluation:- The literature review should critically evaluate
the sources, identifying strengths and weaknesses in the research.
Synthesis:- The literature review should synthesize the findings from
the sources, identifying key themes, debates, and gaps in the
literature.
A conclusion:- The literature review should conclude by summarizing
the key findings and identifying future directions for research.

Writing a literature review can be a challenging task, but it is an

essential skill for any researcher. By carefully reviewing and
synthesizing the existing research, a literature review can make a
significant contribution to the field of study.
CHAPTER 4: 4.2 NATIONAL REVIEWS
TITLE AUTHOR DESCRIPTION

A study on financial A Moses Using a variety of financial

status of Tata motors Joshuva instruments, this study examined
Ltd. Daniels TATA MOTORS LTD's overall
financial situation. The research
was carried out over a five-year
period, from 2006-07 to 2010-11.
Various accounting ratios have
been used to measure financial
status in terms of profitability,
solvency, operation, and financial
stability. (Daniel, 2013) found that
 that the company's financial
performance is satisfactory. The
business is growing steadily and
has a higher status in all of the
markets where it operates.

Financial Analysis of Suman Rana n this study the financial statement

Tata motors and of Tata Motors & Ashok Leyland
Maruti Suzuki. was examined using ratio analysis
from 2013-14 to 2017-18. In
comparison to Ashok leyland, Tata
Motors had a greater capacity to
pay liabilities. Ashok Leyland has
a high debt-to-equity ratio,
indicating the company's poor
performance. Ashok leyland has a
higher inventory turnover ratio,
indicating that stock is selling
quickly. Tata Motors has lower
earnings per share than
Profitability Analysis Dr K Gandhi They discovered that Tata Motors'
of selected companies net profit decreased during the
in India with special study period, while Mahindra and
reference to tata Mahindra's profit increased
motors and Mahindra significantly. The operating profit
and Mahindra. ratio and return on investment of
the sample companies did not
show any major variations in the
ANOVA test
A study on Dr. M.S This research aims to determine
profitability Analysis Ranjithkumar the determinants of profitability in
of Indian selected the Indian automotive industry by
Automobile industry. examining a sample of all
automobile firms from different
segments of the industry. They
discovered that improvements
could be made to the industries'
liquidity positions in order to boost
profitability. As a result, liquidity
has an effect on profitability

CHAPTER 4: 4.3 INTERNATIONAL REVIEWS

TITLE AUTHOR DESCRIPTION
Ratio Analysis of Anupam Mehta (Mehta, et al., 2018) found that
Tesla Ganga Bhavani while the company's Gross
Profit was rising in absolute
terms, when measured as a
percentage of revenue, it had
declined from 23 percent in
 2015 and 2016 to 19 percent in
2017. Higher maintenance,
research and development,
general, selling and
administrative expenditures
have all contributed to the
Financial Dusan BARAN (BARAN, et al., 2016) revealed
Analysis of Andrej PASTYR that financial analysis is an
selected Daniel important tool for supporting
Company in BARANOVA the decision-making of different
Norway stakeholder groups and is an
important part of monitoring the
company subject. It also
provides a picture or input on
the overall state of the company
subject and its growth, as well
as the state of individual activity
areas.
Role of Ratio Mohammed The aim of this study was to
analysis in Nuhu. determine the role of ratio
business decision: analysis in business decisions.
A case study They came to the conclusion
NBC Maiduguri that ratio analysis aids in the
Plant discovery, comparison, and
interpretation of key features of
financial statements. They aid in
determining a company's
strengths and weaknesses.

CHAPTER 5 : 5.1 RATIO ANALYSIS

Ratio analysis is a quantitative method of gaining insight into a
company's liquidity. operational efficiency, and profitability by
studying its financial statements such as the balance sheet and income
statement. Ratio analysis is a cornerstone of fundamental equity
analysis.
Investors and analysts employ ratio analysis to evaluate the financial
health of companies by scrutinizing past and current financial
statements. Comparative data can demonstrate how a company is
performing over time and can be used to estimate likely future
performance. This data can also compare a company's financial
standing with industry averages while measuring how a company
stacks up against others within the same sector.

Investors can use ratio analysis easily, and every figure needed to
calculate the ratios is found on a company's financial statements.

Ratios are comparison points for companies. They evaluate stocks

within an industry. Likewise, they measure a company today against
its historical numbers. In most cases, it is also important to understand
the variables driving ratios as management has the flexibility to, at
times, alter its strategy to make its stock and company ratios more
attractive. Generally, ratios are typically not used in isolation but
rather in combination with other ratios. Having a good idea of the
ratios in each of the four previously mentioned categories will give
you a comprehensive view of the company from different angles and
help you spot potential red flags.

CHAPTER 5 : 5.2 TYPES OF RATIO ANALYSIS

PROFITABILITY RATIO
Profitability ratios are a type of financial ratio that measures a
company's ability to generate profits. There are many different
profitability ratios, but some of the most common include:
Return on assets (ROA):- This ratio measures the percentage of a
company's assets that is generated as income. It is calculated by
dividing net income by average total assets. A higher ROA indicates
that a company is using its assets more effectively.
Return on equity (ROE):- This ratio measures the percentage of a
company's equity that is generated as income. It is calculated by
dividing net income by average stockholders' equity. A higher ROE
indicates that a company is generating more profits for its
shareholders.

Profitability ratios are important for investors because they can help
to assess a company's financial health and its ability to generate
profits. Investors typically look for companies with high profitability
ratios, as these companies are more likely to be successful in the long
run.

Here is an example of how to calculate profitability ratios using

publicly available data for Apple:

Revenue:- $274.515 billion

Expenses:- $234.295 billion
Net income:- $40.220 billion

Return on assets:-
(40.220 / (274.515 + 234.295)) / 2 * 100 = 13.98%
*Return on equity:-
(40.220 / 274.515) * 100 = 14.65%

As you can see, Apple has a high profit margin, return on assets, and
return on equity. This suggests that Apple is a very profitable
company.

LIQUIDITY RATIO
A liquidity ratio is a financial metric that measures a company's
ability to meet its short-term obligations. It indicates how quickly a
company can convert its assets into cash to pay its debts. Liquidity
ratios are important for investors, creditors, and management because
they provide insights into a company's financial health and ability to
operate smoothly.

Common Liquidity Ratios

There are several liquidity ratios, but the three most commonly used
are:

1.Current ratio:- This ratio measures a company's ability to pay its

current liabilities with its current assets. It is calculated by dividing
current assets by current liabilities. A current ratio of 1.0 or higher is
generally considered to be healthy.

2.Quick ratio (acid-test ratio):- This ratio measures a company's

ability to pay its current liabilities with its most liquid assets. It is
calculated by dividing current assets minus inventory by current
liabilities. A quick ratio of 0.8 or higher is generally considered to be
healthy.
INTEGRATING LIQUIDITY RATIO
The interpretation of liquidity ratios depends on the industry and the
company's specific circumstances. However, in general, higher
liquidity ratios are considered to be better because they indicate that a
company has more resources to meet its short-term obligations. A
company with a low liquidity ratio may have difficulty paying its bills
and may be at risk of defaulting on its debt.

IMPORTANCE OF LIQUIDITY RATIO

Liquidity ratios are important for several reasons:
Investors:- Investors use liquidity ratios to assess a company's
financial health and its ability to generate profits. A company with
strong liquidity ratios is less likely to default on its debt and is more
likely to be able to meet its capital expenditure needs.

Creditors:- Creditors use liquidity ratios to assess a company's

creditworthiness and its ability to repay loans. A company with strong
liquidity ratios is less risky to lend to and is more likely to be able to
meet its debt obligations.

Management:- Management uses liquidity ratios to track the

company's financial performance and identify any potential problems.
A company with deteriorating liquidity ratios may need to take steps
to improve its cash flow or reduce its debt.

Overall, liquidity ratios are a valuable tool for assessing a company's

financial health and its ability to meet its short-term obligations.*
Investors, creditors, and management should all consider these ratios
when evaluating a company.

EFFICIENCY RATIO
Efficiency ratio is a financial ratio that measures the profitability of a
company by comparing its operating income to the average assets
employed. It measures how efficiently a company is using its assets to
generate income.
Common Efficiency Ratio are-
There are several Efficiency Ratio but only one are very common-

1. Asset Turnover Ratio- The asset turnover ratio, also known as

the total asset turnover ratio, is a financial metric that measures
the efficiency with which a company utilizes its assets to
generate sales or revenue. It compares the company's net sales
or revenue to the average total assets it held during a specific
period. A higher asset turnover ratio indicates that the company
is using its assets more effectively to generate revenue.

Formula of Asset Turnover Ratio are-

Asset Turnover Ratio = Net Sales / Average Total Assets

INTERPRETATION OF EFFICIENCY RATIO

A higher efficiency ratio indicates that a company is using its

assets more efficiently to generate income. A lower efficiency
ratio indicates that a company is not using its assets as
efficiently and may be generating less income than it could.

LIMITATIONS OF EFFICIENCY RATIO

The efficiency ratio can be affected by a number of factors, such

as the industry in which a company operates, the company's
business strategy, and the company's financial leverage. As a
result, it is important to compare a company's efficiency.
CHAPTER 5: 5.3 LIMITATIONS OF RATIO
ANALYSIS
Ratio analysis is one of the important techniques of determining
the performance of financial strength and weakness of a firm.
Though ratio analysis is relevant and useful technique for the
business concern, the analysis is based on the information
available in the financial statements. There are some situations,
where ratios are misused, it may lead the management to wrong
direction. The ratio analysis suffers from the following
limitations:

Ratio analysis is used on the basis of financial statements.

Number of limitations of financialstatements may affect the
accuracy or quality of ratio analysis.

Ratio analysis heavily depends on quantitative facts and figures

and it ignores qualitative data. Therefore this may limit
accuracy.

Ratio Analysis is a poor measure of a firm's performance due to

lack of adequate standards laid for ideal ratios.

It is not a substitute for analysis of financial statements. It is

merely used as a tool for measuring the performance of business
activities.

Ratio analysis clearly has some latitude for window dressing.

It makes comparison of ratios between companies which is

questionable due to differences in methods of accounting
operation and financing.

CHAPTER 5: 5.4 ADVANTAGE OF RATIO

ANALYSIS
Ratio analysis is necessary to establish the relationship between
two accounting figures to highlightthe significant information to
the management or users who can analyses the business
situation and tomonitor their performance in a meaningful way.
The following are the advantages of ratio analysis:

(1) It facilitates the accounting information to be summarized

and simplified in a required form.

(2) It highlights the inter-relationship between the facts and

figures of various segments of business.

(3) Ratio analysis helps to remove all type of wastages and

inefficiencies.

(4) It provides necessary information to the management to take

prompt decision relating to business.

(5) It helps to the management for effectively discharge its

functions such as planning, organizing, controlling, directing
and forecasting.

(6) Ratio analysis reveals profitable and unprofitable activities.

Thus, the management is able to concentrate on unprofitable
activities and consider to improve the efficiency.

(7) Ratio analysis is used as a measuring rod for effective

control of performance of business activities.
 CHAPTER 6: DATA ANALYSIS AND
INTERPRETATION

A COMPARATIVE FINANCIAL PERFORMANCE ANALYSIS OF

TATA MOTORS, ASHOK LEYLAND AND MAHINDRA BY
MEANS OF RATIOS.
1. Return on Assets- Net Income
Total Assets

TATA MOTORS
YEAR 2017 2018 2019 2020 2021

Net (1,034.85) 2,020.60 (7,289.63) (2,395.44)

Income (2,429.60)
Total 58,878.28 59,212.30 60,909.63 62,589.87 65,059.66
Assets

R.O.A % -4.12% -1.75% 3.41% -11.63% -3.68%

ASHOK LEYLAND
YEAR 2017 2018 2019 2020 2021

Net 1,223.08 1,717.73 1,983.20 239.52 (313.68)

Income
Total 14,040.07 17,336.39 18,224.40 16,389.61 18,449.91
Assets

R.O.A % 8.71% 9.91% 10.88% 1.46% (1.70)%

 MAHINDRA AND MAHINDRA
YEAR 2017 2018 2019 2020 2021

Net 3,643.39 4,356.01 4,796.04 1,330.55 268.66

Income

Total 39,968.32 47,416.75 52,697.06 50,502.06 59,588.80

Assets
R.O.A 9.11% 9.19% 9.10% 2.64% 0.45%

INTERPRETATION
Favourable Range- 5% to 30%.
Return on Assets measures the a company ability to Generate profit
relative to its total assets. The R.O.A of Tata motors has gone
Negative in all 5 years except 2019. But in 2019 R.O.A also in not in
favourable Range. This means Tata motors doesn’t generate return
from its assets.
The R.O.A of Ashok leyland has done exceptional between 2017-2020
But due to COVID-19 in 2021 the R.O.A has gone down to negative.
This means that Ashok leyland has generated return from its assets.

The R.O.A of Mahindra and mahindra has done very good in all Five
years. Even the R.O.A of Mahindra and Mahindra in COVID period is
also in positive. This means that Mahindra and mahindra has
generated good return from its assets.
 2. Return on Equity (R.O.E)- Net Income
Shareholder’s equity
TATA MOTORS
YEAR 2017 2018 2019 2020 2021
Net (2,429.60) (1,034.85) 2,020.60 (7,289) (2,395.44)
Income

Share 37,339.43 34,993.35 37,968 36,799.05 38,808.11

Holders
Equity

R.O.E (6.5) (2.95) 5.3% (19.80) (6.17)

ASHOK LEYLAND
YEAR 2017 2018 2019 2020 2021

Net Income 1,223.08 1,717.73 1,983.20 239.52 (313.68)

Shareholder’s 7,618.32 8,516.89 9,435.44 9,390.68 10,176.07

Equity

R.O.E % 16.05% 20.1% 21.01% 2.55% (3.08)

 MAHINDRA AND MAHINDRA
YEAR 2017 2018 2019 2020 2021

Net Income 3,643.39 4,356.01 4,796.04 1,330.55 268.66

Shareholder’s 30,334.27 34,093.54 38,362.99 39,529.24 44,455.63

Equity

R.O.E % 12.01% 12.77% 12.50% 3.36% 0.60%

INTREPRETATION
Favourable Range- 10% to 25 %
Return on Equity measures (R.O.E) measures that a company ability
of management to generate income from the equity available to it. The
R.O.E of Tata motors has gone to negative in all 5 financial years
because of bad performance of the company.
The R.O.E of Ashok Leyland has been in Favourable range in all five
financial years except the 2021. Due to the COVID-19 R.O.E of
Ashok Leyland in 2021 has gone Limited.
The R.O.E of Mahindra and Mahindra has been positive but not in
favourable range. This means Mahindra and Mahindra does not
generate good return from its shareholders equity.
 3. Current Ratio- Current Assets
Current Liabilities
Tata Motors
YEAR 2017 2018 2019 2020 2021
Current 12,757.07 14,971.66 13,229.30 13,568.76 15,854.59
Assets
Current 21,538.35 24,218.95 22,940.21 25,810.21 26,251.55
Liabilities
Current Ratio 0.5% 0.61% 0.57% 0.52% 0.59%
%

Ashok Leyland
YEARS 2017 2018 2019 2020 2021

Current 5,977.12 8,063.47 8,186.34 5,423.29 7,451.53

assets

Current 6,421.75 8,819.50 8,788.96 6,998.93 8,273.84

Liabilities

Current 0.93% 0.91% 0.93% 0.77% 0.9%

Ratio %
MAHINDRA AND MAHINDRA
YEARS 2017 2018 2019 2020 2021
Current 12,608.00 16,474.47 18,071.21 15,141.49 20,312.30
Assets
Current 9,634.05 13,323.21 14,334.07 10,972.82 15,133.17
Liabilities
Current 1.30% 1.23% 1.26% 1,37% 1.34%
Ratio %

INTRETATION
Favourable Range- 1.3% to 3%.
Current Ratio is the Liquidity Ratio that measures a company abilities
to pay short term obligations or those due within one years.
The current ratio of tata motors is less than 0.6%, it suggest potential
difficulty in covering short term liabilities with existing current assets.
This may raise concerns about liquidity and the company abilities to
meet immediate financial obligations.
The Current ratio of ashok Leyland is also not more than 1% in all
five financial years, it suggest that the company may have difficulty
meeting its short term obligation. This indicates potential liquidity
concerns, and further investigation into the company financial health
and management of working capital may necessary.

The current ratio of mahindra and mahindra is grater than 1%, it

implies that a company has more current asset than current liabilities,
indicating a healthier short term financial position.
 4. Quick Ratio – Current Assets- Inventory
Current Liabilities

Tata Motors
YEARS 2017 2018 2019 2020 2021
C.A- 7,204.06 9,301.53 8,567.3 9,736.84 11,302.88
Inventory
Current 21,538.35 24,218.95 22,940.81 25,810.21 26,251.55
Liabilities
Quick Ratio% 0.33% 0.38% 0.37% 0.37% 0.43%

Ashok Leyland
YEARS 2017 2018 2019 2020 2021
C.A- 3,346.21 6,305.14 5,501.67 4,185.49 5,309.24
Inventory
Current 6,421.75 8,819.50 8,788.96 6,998.93 8,273.84
Liabilities
Quick Ratio % 0.52% 0.71% 0.62% 0.59% 0.64%
 MAHINDRA AND MAHINDRA
YEAR 2017 2018 2019 2020 2021
C.A- 9,850.76 13,772.78 14,231.79 11,740.58 16,356.83
Inventory
Current 9,634.05 13,323.21 14,334.07 10,972.82 15,133.17
Liabilities

Quick Ratio 1.02% 1.03% 0.99% 1.06% 1.08%

%

INTERPRETATION

Favourable Range- 1% to 1.5%

The quick ratio measures a company’s capacity to pay its current

liabilities without needing to sell its inventory or obtain additional
finance.

The Quick ratio of Tata motors less than 0.5%, it suggest potential
liquidity issues. Investors might be concerned about the company
ability to cover its short-term liabilities with its most liquid assets.

The quick Ratio of Ashok Leyland is below 0.7, it could a relative

lower ability to meet short-term obligations. Investors may scrutinize
the company’s liquidity position, and it could be signal for further
financial analysis.

The quick Ratio of mahindra exceeds 1%, it generate implies a strong

ability to cover short-term obligations with highly liquid assets.
 5. Assets Turnover Ratio- Net Sales
Average Total assets

Tata Motors
YEARS 2017 2018 2019 2020 2021
Net Sales 44,363.60 58,831.41 68,764.88 43,485.76 46,559.39

Average 57,944.15 59,893.95 60,901.08 62,984.65 63,244.87

Total
Asset
A.T .R% 0.76% 0.98% 1.1% 0.6% 0.7%

ASHOK LEYLAND

YEARS 2017 2018 2019 2020 2021

Net Sales 20,018.66 26,247.91 28,614.03 17,467.47 15,229.22

Average Total 15,055.07 16,132.23 16,836.65 18,337.05 18,361.69

Assets
A.T.R % 1.3% 1.6% 1.6% 0.9% 0.8%
MAHINDRA AND MAHINDRA

YEAR 2017 2018 2019 2020 2021

Net Sales 43,785.36 48,685.55 53,614.00 45,487.78 45,040.98
Average 41,458.16 44,832.69 48,959.40 56,142.93 58,816.16
Total
Assets
A.T.R 1.05% 1.08% 1.09% 0.8% 0.76%

INTERPRETATION

Favourable Range- Above 1%

The Assets turnover Ratio measures the value of a company’s sales or

revenue relative to its value of assets.

The Assets turnover Ratio of Tata motors is 0.5% in all five years this
means that company is generating more sales relative to its total
assets. This could be indication of efficient assets utilization and
effective sales management.

The Assets turnover Ratio of Ashok Leyland is more than 1%, it

means that company is efficiently using its assets to generate revenue.
This is a positive sign for investor.

The Assets turnover Ratio of mahindra and mahindra is more than

1%, it means that company is efficiently using its assets to generate
revenue in all five year except 2020-21 Financial year due to Covid.
CHAPTER 6: 6.2 GRAPHICAL REPRESENTATION

Tata Motors

Ashok Leyland

Mahindra and Mahindra

2. Return on Equity

Tata Motors

Ashok Leyland

Mahindra and Mahindra

3. Current Ratio

Tata Motors

Ashok Leyland

Mahindra and Mahindra

4. Quick Ratio

Tata Motors

Ashok Leyland

Mahindra and Mahindra

5. Assets Turnover Ratio

Tata Motors

Ashok Leyland.

Mahindra and Mahindra

 CHAPTER 7 : 7.1 CONCLUSION

In Conclusion, the ratio analysis of Tata motors, ashok Leyland, and

Mahindra and Mahindra provides valuable insights into the financial
health and performance of these automative companies. Through an
examination of key ratio like R.O.A ratio we found that R.O.A of tata
motors is negative in five financial years, whereas the R.O.A of
Ashok Leyland of ashok Leyland is very good and it is lies in
favourable range except 2021 due to covid, whereas the R.O.A of
Mahindra and Mahindra is also giving good return lies approx.
between 8% to 9% in all five years.

The R.O.E of Tata motors is also in negative in all financial years this
indicates that Tata motors doesn’t utilize its shareholders funds.
Whereas the R.O.E of Ashok Leyland is very good and Ashok
Leyland has utilize its shareholders funds very properly. And the
R.O.E of Mahindra and Mahindra is also in Favourable range which is
good sign for its investors to invest in Mahindra and Mahindra
without any doubt.

The Current Ratio of Tata motors is positive in all five financial years
but not in the favourable range this means that company needs to
change in planning or strategies to come in the favourable range.

The Current Ratio of Ashok Leyland is also not in the favourable

range this means the company can’t obligate its short term liquidity
and if it is continues the company face liquidity crises.
The current Ratio of Mahindra and Mahindra is very good and it is
lies in favourable range this means that the company utilize its
liquidity very well.

The quick ratio of tata motors is lies between 0.3 % to 0.5 % which
means that tata motors have face difficulty in to pay their current
liabilities with their liquid assets.

The quick Ratio of Ashok Leyland is fluctuating in all five years this
means the company has face difficulty in pay their liabilities.

The quick Ratio of Mahindra and Mahindra is above 1% in all five

years this means that company has pay its current liabilities on time.

Tata motors all financial Ratios are all negative trends in Financial
Performance, Ashok Leyland on the other hand demonstrate
suggesting strength and areas for Improvement. And Mahindra and
Mahindra ratio analysis has very good performance.

It is a crucial note that while ratios offer a snapshot of financial

matrics, a holistic assestment should consider industry benchmark,
economic conditions, and company specific factors. Investors and
stakeholders should interpret these findings in the context of broader
market and strategic direction of each company.
CHAPTER 8: 8.1 BIBLOGRAPHY

*Books*

* Chandra, Prasanna. Financial Ratio Analysis: A Comprehensive

Study. Prentice Hall India, 2012.

* Damodaran, Aswath. Investment Valuation: Tools and

Techniques for Determining Value of Any Asset. Wiley, 2012.

* Gitman, Lawrence J., and Michael D. Joehnk. Principles of

Managerial Finance. Pearson Education India, 2012.

* Pandey, I. M. Financial Management. Vikas Publishing House,

2012.

* Van Horne, James C., John M. Wachowicz, and Sudipto Basu.

Fundamentals of Financial Management. Pearson Education India,
2012.

*Articles*

* Anand, N. K., and V. S. Bhandari. "Financial Ratio Analysis of

Automotive Companies in India: A Case Study of Tata Motors,
Ashok Leyland, and Mahindra & Mahindra." International Journal
of Business and Management 11, no. 3 (2016): 18-26.

* Arora, N. K., and D. K. Singh. "Ratio Analysis of Select

Automobile Companies in India." International Journal of
Advanced Research in Management and Social Sciences 7, no. 12
(2018): 187-203.

* Gupta, S. K., and D. K. Singh. "Financial Performance Analysis

of Select Automobile Companies in India." International Journal of
Management and Social Sciences 4, no. 5 (2015): 207-218.

* Jain, G. K., and M. Jain. "A Comparative Study of Financial

Performance of Selected Automobile Companies in India."
International Journal of Management and Social Sciences 5, no. 2
(2016): 147-156.

* Kumar, N., and S. K. Singh. "Financial Performance Analysis of

Automobile Companies in India: A Comparative Study of Tata
Motors, Ashok Leyland, and Mahindra & Mahindra." International
Journal of Research in Management and Social Sciences 5, no. 3
(2016): 179-188.

Websites

* *Annual Reports of Tata Motors, Ashok Leyland, and Mahindra

& Mahindra*

* *Financial websites such as BSE, NSE, Moneycontrol, and

Yahoo! Finance*

* *Research reports from investment banks and brokerage houses*

*Other Sources*

* *Investor presentations of Tata Motors, Ashok Leyland, and

Mahindra & Mahindra*

* *News articles and press releases*

This bibliography is not exhaustive, but it provides a good starting

point for your research on the ratio analysis of Tata Motors, Ashok
Leyland, and Mahindra.