A

Comprehensive Project Report On

“A Study On Financial Performance of TATA STEEL LIMITED”

NAME : VHORA ADNAN S.

ROLL NO : 04
SEMESTER : TY BBA 6TH
SUBJECT : COMPREHENSIVE PROJECT
ACADEMIC YEAR : 2022-2023

Submitted to
Sardar Patel University
Under The Guidence Of
Dr. Pinki Nenwani
College Name
C.P.PATEL & F.H.SHAH COMMERCE COLLEGE , ANAND.
PREFACE

As a part of the BBA syllabus and in order to gain project knowledge in the field of management, we
are required to make a report on “ A study on Financial Performance Of TATA STEEL LIMITED.” The
basic objective behind doing this project report is to get knowledge of different tools of FINANCING .
In this project report we have included various concepts, literature review, charts, Data collection, data
analysis, conclusion and implication regarding TATA STEEL LIMITED. Doing this project report helped
us gain so many experience related to our topic concept . Through this report we come to know about
importance of project work and role of TATA STEEL LIMITED towards the work.
ACKNOWLEDGEMENT
I have great pleasure in expressing my deep sense of gratitude to our principle
DR. R D MODI SIR for giving me an opportunity to carry out my project as a part of BBA (ADV.
FINANCIAL MANAGEMENT)
I would like to appreciate his efforts in guiding and providing me valuable suggestion and spend his
valuable time for me to carry out my project.
I feel immense pleasure in expressing my deep sense of respect and indebtedness to my guide
DR. PINKI NENWANI for her invaluable, talented and inspiring guidance, planning, constructive
criticism and constant encouragement throughout the course of investigation and preparation of this
report.
I would also like to thank my parents and my friends who have extended their support throughout the
study. .
 INDEX

Sr. no. Content Pg. no.

1 Chapter 1 1
2 Introduction 2
3 History 3
4 Management 4
5 Management BOD 5
6 Senior Management 7
7 Financial Manager 9
8 Product 10
9 Competitors 13
10 Achievements 16
11 Vision, Mission & Values 18
12 Objectives 19
13 Chapter 2 20
14 Literature Review 22
 CHAPTER 1
INTRODUCTION OF
COMPANY
TATA STEEL LIMITED
Tata Steel Limited is an Indian multinational steel-making company, based
in Jamshedpur, Jharkhand and headquartered in Mumbai, Maharashtra. It is a part of the Tata Group.

Formerly known as Tata Iron and Steel Company Limited (TISCO), Tata Steel is among the
top steel producing companies in the world with an annual crude steel capacity of 34 million tonnes. It
is one of the world's most geographically diversified steel producers, with operations and commercial
presence across the world. The group (excluding SEA operations) recorded a consolidated turnover of
US$19.7 billion in the financial year ending 31 March 2020. It is the second largest steel company in
India (measured by domestic production) with an annual capacity of 13 million tonnes after Steel
Authority of India Ltd. (SAIL). TATA Steel, along with SAIL and Jindal Steel and Power, are the only 3
Indian steel companies that have captive iron-ore mines, which gives the three companies price
advantages.
The Key Managerial Personnel (KMP) at Tata Steel Limited India are Koushik Chatterjee as CFO
(KMP) and Parvatheesam Kanchinadham as Company Secretary. Koushik Chatterjee, Mallika
Srinivasan, Chandrasekaran Natarajan and 7 other members are presently associated as directors.
Tata Steel operates in 26 countries with key operations in India, Netherlands and the United Kingdom,
and employs around 80,500 people.[6] Its largest plant (10 MTPA capacity) is located
in Jamshedpur, Jharkhand. In 2007, Tata Steel acquired the UK-based steel maker corus. It was
ranked 486th in the 2014 Fortune Global 500 ranking of the world's biggest corporations.[8] It was the
seventh most valuable Indian brand of 2013 according to Brand Finance.
In July 2019 Tata Steel Kalinganagar (TSK) was included in the list of the World Economic Forum's
(WEF's) Global Lighthouse Network.
Tata Steel has been recognized amongst India's Best Workplaces in Manufacturing 2022 by Great
Place to Work. This recognition has been received for the fifth time, highlights the company's
sustained focus on fostering a culture of high-trust, integrity, growth, and care for the
employees.[12] Tata Steel has also been inclusive towards its LGBTQ employees and also provides
health insurance benefits for partners of its LGBTQ employees under the new HR policy.
HISTORY

1. Tata Iron and Steel Company (TISCO) was founded by Jamsetji Nusserwanji Tata and
established by Sir Dorabji Tata on 26 August 1907. TISCO started pig iron production in 1911
and began producing steel in 1912 as a branch of Jamsetji's Tata Group.[14][15][16] The first steel
ingot was manufactured on 16 February 1912. During the First World War (1914–1918), the
company made rapid progress.
2. In 1920, The Tata Iron & Steel Company also incorporated The Tinplate Company of India Ltd
(TCIL), as a joint venture with then Burmah Shell to manufacture Tinplate. TCIL is now Tata
Tinplate and holds 70% market share in India.
3. By 1939, it operated the largest steel plant in the British Empire. The company launched a
major modernisation and expansion program in 1951. Later, in 1958, the program was
upgraded to 2 million metric tonnes per annum (MTPA) project.[14] By 1970, the company
employed around 40,000 people at Jamshedpur, and a further 20,000 in the neighbouring coal
mines. In November 2021, Tata Steel was the most profitable company in the Tata Group.
 MANAGEMENT OF TATA STEEL LIMITED

Ratan N Tata
Mr Ratan Naval Tata is the Emeritus Chairman of Tata Sons, Tata Industries, Tata Motors, Tata Steel
and Tata Chemicals. He has been the Chairman of Tata Steel, Tata Motors, Tata Steel, Tata
Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Taj Group and Tata
Teleservices. During his tenure, the Tata Group’s revenues grew manifold, totalling over $100 billion in
2011-12.

Mr Tata joined the Tata Group in 1962. After serving in various companies, he was appointed Director-
in-Charge of the National Radio Electronics Company Limited in 1971. In 1981, he was named
Chairman of Tata Industries and was responsible for transforming it into a group strategy think-tank,
and a promoter of new ventures in high technology businesses.

Mr Tata currently serves on the board of directors of Alcoa and is on the international advisory boards
of Mitsubishi Corporation, JP Morgan Chase, Rolls Royce and the Monetary Authority of Singapore.
He is the Chairman of the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust, two of the largest
private sector-promoted philanthropic Trusts in India. He is the chairman of the Council of
Management of the Tata Institute of Fundamental Research. He also serves on the board of trustees
of Cornell University and the University of Southern California. Mr Tata has received honorary
doctorates from several universities in India and abroad. In 2008, the Government of
India honoured Mr Tata with its second-highest civilian award, the Padma Vibhushan.

BOARD OF DIRECTORS
Mr Natarajan Chandrasekaran
Chairman, Non-Executive
Mr Natarajan Chandrasekaran is the Chairman of Tata Sons Limited and the former CEO and MD of
Tata Consultancy Services (TCS). Under his leadership, TCS became the largest private sector
employer and was rated as the world's most powerful brand in IT services in 2015. TCS was also
recognised as a Global Top Employer by the Top Employers Institute across 24 countries.

Mr Chandrasekaran has played an active role in Indo-US and India-UK CEO Forums and is part of
India’s business taskforces for Australia, Brazil, Canada, China, Japan and Malaysia. He served as
the Executive Chairman of NASSCOM, India’s apex trade body for IT services firms, in 2012-13 and
continues to be a member of its governing executive council.
Mr Chandrasekaran has received several awards and was honoured with the ’Business Leader Award’
at the Economic Times Awards for Corporate Excellence 2016. He was voted the ‘Best CEO’ at the
2015 All-Asia Executive Team rankings for the fifth consecutive year in 2015. He was awarded the
Frans Banninck Cocq Medal from the City of Amsterdam for promoting trade and economic relations
between The Netherlands and India. Mr Chandrasekaran has been conferred honorary degrees and
doctorates by several universities in India and abroad including KIIT University (2012), SRM University
(2010) and Nyenrode Business Universiteit in the Netherlands, among others.
Mrs Farida Khambata
Independent Director
Prior to co-founding Cartica, Mrs. Khambata was a member of IFC’s Management Group. In her last
position at IFC she served as the Regional Vice President in charge of operations in East Asia and the
Pacific, South Asia, Latin America and the Caribbean. She was responsible for strategy, investment
operations and advisory services in IFC’s member countries in these regions. She also oversaw IFC’s
equity investments globally.
Prior to that, Mrs. Khambata was Vice President for Portfolio and Risk Management where she had
responsibility for the Corporation’s portfolio (approximately $14 billion) and risk management
operations, as well as for information technology, controls, budgeting, trust funds and back office
operations. Previously she was the Treasurer of IFC and coined the term Frontier Markets.
Mrs. Khambata earned her MA in Economics from the University of Cambridge and her MS in
Business Management from the London Business School. She serves on the boards of directors of
Kotak Mahindra Bank in India and Dragon Capital in Vietnam.

And Other Board of Directors including :

1. Mr. Noel Naval Tata- Vice-Chairman, Non Executive
2. Independent Directors:
A) Mr. O.P. Bhatt
B) Mr. Deepak Kapoor
C) Ms. Bharti Gupta Ramola ETC.

SENIOR MANAGEMENT
Atrayee Sanyal
Vice President, Human Resource Management
Atrayee Sanyal is the Vice President HRM at Tata Steel. She joined Tata Steel in the year 1998.
Joining from Hindustan Unilever after a stint in Market Research in Mumbai, Atrayee joined Tata Steel,
Kolkata in the Marketing function.
A graduate from Calcutta University and an MBA, she completed the General Management
Programme from CEDEP (INSEAD) and also won the British Chevening Scholarship in leadership &
management. Atrayee has spearheaded the Branding Journey for Tata Steel from the year 1999,
building brands in a commodity industry like steel. She has grown in the Marketing and Sales function
by handling various retail and B2SME brands. She was appointed the Chief of Marketing & Sales for
Branded Products Retail and Solutions in 2014.
She was appointed the Chief Diversity Officer for the organisation while in Marketing & Sales and has
passionately taken forward the journey of Diversity & Inclusion for the Company. She joined the
Human Resource Division in 2017 and has handled multiple areas in this function involving white
collared and blue collared employees. In addition, she is part of the Profit Centre Councils of two
Divisions in Tata Steel and is also a Member of the Board of Directors of two subsidiary companies of
Tata Steel.
Chaitanya Bhanu
Vice President, Steel Manufacturing
Mr Chaitanya Bhanu is Vice President, Steel Manufacturing, at Tata Steel Limited. He joined Tata
Steel as a Graduate Trainee in 1992 after receiving his degree in Metallurgical Engineering from IIT
(BHU), Varanasi. He received his post graduate degree in Materials & Metallurgical Engineering from
IIT, Kanpur in 1997. In 2019, he attended the General Management Program (GMP) at CEDEP in
Fontainebleau, France.
Since 1992 he has worked in different capacities across functions such as Technology, R&D,
Steelmaking & Hot Rolling Operations, as well as Human Resources at Tata Steel. He has played an
active role in the improvement of performance levels in steelmaking and casting operations at Tata
Steel for over two decades. In 2009, Mr Bhanu was the recipient of the Indian Institute of Metals’
Essar Gold Medal for his outstanding contribution to Metallurgy in the area of Steel Manufacturing.
Mr Bhanu is a certified Green Belt in 6 Sigma (IGE India) as well as a certified Thomas Profile
Assessor, apart from holding Professional Coach qualification from ICF. He is also associated with the
Indian Institute of Metals (IIM) and is currently serving as its Joint Secretary.
MANISHA JAJODIYA –SENIOR FINANCE MANAGER
Economic Times Young Leader ,2017
Qualified Chartered Accountant & Company Secretary
Presently working for Tata Steel Limited as Senior Finance Manager , Western Region 9 years of
post Qualification experience across consulting & Large Conglomerates namely ITC Limited, KPMG,
Tata Steel Limited.
Products:

Continuous improvement in our product and service portfolio, along with success in value
creating initiatives for customers, has led to the Company’s unique position to serve domestic
markets.

We have segmented Indian market in three categories of Automotive & Special Products, Branded
Products & Retail and Industrial Products, Projects & Exports.

We cater This Products Segments:

Agriculture

Automotive Steels

And Other Products such as :

Construction
Consumer Goods
Energy and Power
Engineering
Material Handling
We cater to the Indian Markets with following key products:

Hot Rolled
Cold Rolled
Coted Coils
Tubes
Rebar
Wire Rods

Some of the key segments that we target in Indian markets are Construction, Automotive, General
Engineering and Industrial Products & Agriculture apart from serving other sectors such as Packaging,
Consumer Goods etc. Developing new solutions in the emerging sectors has provided a big fillip to
expanding the scope
of businesses. Branded products and retail solutions segment is targeted to provide an end-to-end
customer service and has expanded its base to provide unique services to its existing & new
customers.

Developing new solutions in the emerging sectors has provided a big fillip to expanding the scope of
businesses. Branded products and retail solutions segment is targeted to provide an end-to-end
customer service and has expanded its base to provide unique services to its existing & new
customers.

Some Common Products are :

Galvano
Tata Astrum
Tata Bearings
Ferromag
IMDB
Tata Pipes
Tata Precision Tubes

Tata Steel Ltd., incorporated in the year 1907, is a Large Cap company (having a market cap of Rs
133,635.39 Crore) operating in Metals - Ferrous sector. Tata Steel Ltd. key Products/Revenue
Segments include Steel & Steel Products, Power, Other Operating Revenue and Others for the
year ending 31-Mar-2022.

Production Capacity:

34 MnTPA
Tata Steel Limited, with a consolidated turnover of US $32,836 million in the financial year ending
March 31, 2022, is the 10th largest steel producer in the world with an annual crude steel production
capacity of 34 MnTPA.
Competitors of TATA STEEL LIMITED:

HINDALCO INDUSTRIES
Hindalco Industries is one of India's biggest aluminium manufacturing company and the world's
largest flat-rolled products player and recycler of aluminium.

JINDAL STEEL AND POWER

An industrial powerhouse with a dominant presence in steel, power, mining
and infrastructure, JSP is a leading Indian conglomerate that aims to strengthen the future of the
nation and works towards building a better world.

BHEL
BHEL is one of the largest engineering and manufacturing companies of its kind in India engaged in
design, engineering, construction, testing, commissioning and servicing of a wide range of products
and services with over 180 product offerings to meet the ever-growing needs of the core sectors of
economy.

NUCOR
NORTH AMERICA’S MOST SUSTAINABLE STEEL AND STEEL PRODUCTS COMPANY.
IS are a team forged around a vision for leading our industry by providing unparalleled customer care,
building trusted partnerships and creating sustained value.

COMMERCIAL METALS
CMC steel serves as the backbone for an incredible array of highways, structures and other projects.
It’s just not always obvious. That’s why we’ve created this easy way for you to look inside and see the
strength and versatility of CMC steel for yourself.

MAGNITOGORSK IRON AND STEEL WORKS

 Magnitogorsk Iron & Steel Works is one of the world's largest steel producers and holds leading
positions among Russian steel companies.

ACHIEVEMENTS OF TATA STEEL LIMITED

Corporate awards

• India’s Most Admired Company – by FORTUNE and Hay Group.

• NDTV Profit Business Leadership Awards 2011 for business leadership and entrepreneurial
excellence, contributing significantly towards India’s economy growth.

• Tata Steel Conferred Best Conscious Capitalist Award by Forbes India.

• 3rd Annual Intellectual Property Awards.

• Thomson Reuters Innovation Award in the “Hi-Tech Corporate” category.

•Tata Steel’s Mines Division, Noamundi awarded Confederation of Indian Industry’s (CII) National
Award for Excellence in Water Management 2011 for its “Most Innovative Rainwater Harvesting
Project”.
• The Ministry of Labour and Employment, Government of India, conferred the prestigious Prime
Minister’s Shram Awards for the years 2008, 2009 and 2010, on 21 employees of Tata Steel.

Awards for excellence in social responsibility

• Tata Steel named among World’s Most Ethical Companies.

• CNBC Asia’s Corporate Social Responsibility Award for outstanding CSR Model.

• CII-ITC Sustainability Prize for 2011 for Sustainable Development for exemplary performance in
economic, social and environmental dimensions of Indian business.

• ‘Best Sports Advertisement’ and ‘Best Corporate Involvement in Sports’ awards at the grand fi nale
of NDTV’s ‘Marks for Sports’ campaign.

• ‘Best in Corporate Social Responsibility’ in India by Finance Asia.

• Winner in ‘Corporate Social Responsibility’ at the Procurement Leaders Forum in London.

• World Steel ‘Safety and Health Excellence Recognition Award’ for the second consecutive year.
 • NatSteel has been awarded the Work-Life Excellence Award by the Singapore Ministry of Manpower.

• NatSteel also a recipient of the apex Platinum HEALTH Award by the Singapore Health Promotion
Board.

VISION, MISSION & VALUES OF TATA STEEL LIMITED

Vision
To be globally significant in each of our chosen businesses by 2025.

Mission
To be the most reliable global network for customers and suppliers, that delivers value through products
and services. To be a responsible value creator for all ourstakeholders.

Values
Pioneering

We will be bold and agile, courageously taking on challenges, using deep customer insight to develop
innovative solutions.

Integrity
We will be fair, honest, transparent and ethical in our conduct; everything we do must stand the test of
public scrutiny.
 Excellence
We will be passionate about achieving the highest standards of quality, always promoting meritocracy.

Unity
We will invest in our people and partners, enable continuous learning, and build caring and
collaborative relationships based on trust and mutual respect.

Responsibility
We will integrate environmental and social principles in our businesses, ensuring that what comes
from the people goes back to the people many times over.

OBJECTIVES OF TATA STEEL LIMITED

Tata Steel Group since its Inception strives to positively impact the lives of the communities around its
areas of operation, minimize impact on the environment and address concerns of communities in a
mutually beneficial manner.
The 3 core Social Objectives Tata Steel has taken up:
• build capacity
• engage with community as partners
• enable shared value creation
CHAPTER 2
 Literature
Review

Company’s annual report is a comprehensive report or company’s activity throughout the preceding
year. Annual reports are intended to give shareholders and other interested parties information about
company’s activity and financial performance. They may be considered as grey literature. Grey
literature means manifold document type produced on all level of government, academics, business
and industry in print and electronic formats that are protected my intellectual property rights of
sufficient quality to be collect and preserved by library holdings or institutional repositories. Most
jurisdictions requires companies to prepare and disclose annual reports and many require the annual
report to be filled at the company’s listed in the stock exchange are also required to report at more
frequent intervals. Accounting ratio or analysis is an important technique of analysis of financial
performance. It is most widely used technique of financial performance. Ratio is first to developed to
analysis and interprets financial statement

2.1 International Reviews

DeVancy (1993) conducted a study to measure the changes of status in the families of
United States of America by using financial ratios selected from different categories for a
period of four years ranging from 1983 to 1986. This study used the financial ratios as
indicators of progress to answer the question whether the households were able to
improve their financial status during the study period.
Gallizo and Salvador (2003) also carried out a study on financial ratios of U.S
manufacturing firms for a period of eight years since 1993 to 2000 to understand the
behavior and adjustment process of the same. A proper balance between sales and
assets generally specify that the assets are managed and utilized well towards the sales
generation. The main aim of the company is to maximize its profit and profitability ratios
helps to measure overall performance and efficiency of the firm.

Peeler J. Patsula (2006), he define that a sound business analysis tells others a lot
about good sense and understanding of the difficulties that a company will face.
We have to make sure that people know exactly how we arrived to the final
financial positions. We have to show the calculation but we have to avoid anything
that is too mathematical. A business performance analysis indicates the further
growth and the expansion. It gives a physiological advantage to the employees
and also a planning advantage.

Susan Ward (2008), emphasis that financial analysis using ratios between key values help
investors cope with the massive amount of numbers in company financial statements. For
example, they can compute the percentage of net profit a company is generating on the funds
it has deployed. All other things remaining the same, a company that earns a higher
percentage of profit compared to other companies is a better investment option.
Ahmed and Ahmed (2014) conducted a study to analyze the effect of mergers upon
financial performance of manufacturing industries in Pakistan. Twelve manufacturing
companies were selected for the study which had involved in the process of merger
during 2000-2009. Three years data before merger and three years data after merger
were used to test the significance of study. Paired sample t-test was applied on
accounting ratios. The study revealed that overall financial performance of acquiring
manufacturing corporations were insignificantly improved after the merger. The liquidity,
profitability and capital position of the selected companies were insignificantly improved
and the efficiency deteriorated after the merger. Finally, it was concluded that merger
impacted on different industries of manufacturing sector differently.

2.2 National Reviews

Rooh Ollah Arab, Seyed Saadat Masoumi and Azadeh Barati (2015) examined the financial
performance of identified units in the steel industry in India in terms of financial ratios such as Liquidity,
Solvency, Activity and Profitability position. For this study , Tata Steel Ltd., Jindal Steel & Power Ltd., J
S W Steel Ltd., Bhushan Steel Ltd. and Steel Authority of India Ltd. are selected for this study. The
study evaluated the impact of selected variables on the financial performance of identified units in the
steel industry, ANOVA-Test analysis is used.
Ramaratnam and Jayaraman (2010) used financial ratios in terms of liquidity, profitability, variability
and sustainability to measure the financial performance of Indian steel industry for a period of five
years from 2005 to 2010. Their study reveals that the critical situation faced by the Indian steel
industry is due to over capacity and demand slowdown resulting in price cuts.A study has been
conducted by Pal (2011) on the Indian steel companies for a period of ten years
range between 2000-01 and 2009-10 to measure the profitability of the selected companies which is of
major importance to the internal and external stakeholders to determine the earning capacity together
with the credibility of the companies to sustain in the competition for a long run.

Tiwari (2013) examined working capital management efficiency in Indian cement industry. They found
that though some of the sample firms had successfully improved efficiency during these years, the
existence of a very high degree of inconsistency in this matter clearly pointed out the need for
adopting sound working capital management policies by these firms. It was suggested that the firms
under study should have taken necessary steps in order to improve their efficiency.
Acharya (2013) compared the liquidity position of TATA Steel Ltd. and SAIL and studied the
relationship that exists between liquidity and profitability of both the companies. The purpose of the
study was to investigate the liquidity management efficiency and profitability position of selected steel
companies. Therefore, an attempt was made to investigate the liquidity position and its impact on the
profitability of Tata Steel Ltd. and Steel Authority of India Ltd for a period
of ten years ranging from 2004 to 2013. Various accounting ratios were analyzed with the help of
statistical techniques, such as multiple correlations, multiple regression analysis and t-test.Through
the analysis of the data, it was found that liquidity position had positive impact on the profitability of the
selected firms.

Sneha Lata & Dr. Robin Anand (2017) they conducted financial performance
of Mahindra & Mahindra Ltd before merger and after merger with the Korean
company from the year 2007-2017. They used tools such as ratio analysis,
arithmetic mean, standard deviation and t-test. Company’s profit margin has
been pulled back after merging that from 18% it went down to 13%.The merger
made for increasing profit has declined the value of business of Mahindra &
Mahindra Ltd and the reason they are stating are that sometimes other merger
took place in the recent years may be the reason for decline.

Dr. A Ramya &Dr. S Kavitha (2017) they studied financial performance of

Maruti Suzuki Ltd from 2010-2015. Profitability ratio activity ratio are used for
the study. They found that gross profit ratio, current ratio, asset turnover ratio,
net profit turnover ratio all declined when we reach 2014-2015. They also
come to conclusion that the calculation in the financial statement are prepared
by desired management and policies that it cannot produce complete picture
about its performance.

Imran Khan (2016) Here he studies analyze the financial performance of

Britannia from 2011-2012 to 2015-2016 and has used ratio analysis as the tool
for the same. Through his study he found that sales, operating profit margin,
net profit margin are in a increasing trend and debt equity ratio and return on
assets how decrease. He also put up some suggestions like current asset should
be increased, debt capital should be increased.

Anupa Jayawardhana (2016) she studied on financial performance of Adidas

from the year 2010-2014. She uses tools like horizontal analysis, trend analysis,
vertical analysis financial ratio and key ratio. He come to conclusion that they
should reduce their operating expenses and capital should be invested in
productive asset.

Dr. M Ravichandran & M Venkat Subramanian (2016) studied on Force

Motors formerly known as Bajaj Tempo from 2010-2015. They used ratio
analysis, comparative financial statement analysis. The company’s financial
performance is good that it shows an increase in reserve and surplus and
decrease in borrowings. They suggest that it can further improve by
concentrates on its operating, administrative and selling expenses and by
reducing the expenses.
CHAPTER 3
 RESEARCH
METHODOLOGY

MEANING OF RESEARCH

(Payton, 1979). Research is a systematic, formal, rigorous and precise process employed to
gain solutions to problems or to discover and interpret new facts and relationships.

( C.C. Crawford) Research is simply a systematic and. refined technique of thinking, employing
specialized tools, instruments and procedures in order to obtain a more adequate solution of a
problem.
A studious inquiry or examination, especially; investigation or experimentation aimed at the discovery
and interpretation of facts, revision of accepted theories or law in the light of new facts or practical
application of such new or revised theories or law. According to Waltz and Bansell (1981).

DEFINITION: Research is defined as the creation of new knowledge and/or the use of existing
knowledge in a new and creative way so as to generate new concepts, methodologies and
understandings. This could include synthesis and analysis of previous research to the extent that it
leads to new and creative outcomes.

RESEARCH METHODOLOGY

A research methodology encompasses the way in which you intend to carry out your research. This
includes how you plan to tackle things like collection methods, statistical analysis, participant
observations, and more.
You can think of your research methodology as being a formula. One part will be how you plan on
putting your research into practice and another will be why you feel this is the best way to approach
it. Your research methodology is ultimately a methodological and systematic plan to resolve your
research problem.
Why do you need a research methodology?

The purpose of a research methodology is to explain the reasoning behind your approach to your
research - you'll need to support your collection methods, methods of analysis, and other key points
of your work.
Think of it like writing a plan or an outline for you what you intend to do.
When carrying out research, it can be easy to go off-track or depart from your standard
methodology.
Having a methodology keeps you accountable and on track with your original aims and objectives,
and gives you a suitable and sound plan to keep your project manageable, smooth, and effective.

What is research methodology?

Research methodology is a way of explaining how a researcher intends to carry out their research. It's
a logical, systematic plan to resolve a research problem. A methodology details a researcher's
approach to the research to ensure reliable, valid results that address their aims and objectives. It
encompasses what data they're going to collect and where from, as well as how it's being collected
and analyzed.A research methodology gives research legitimacy and provides scientifically sound
findings. It also provides a detailed plan that helps to keep researchers on track, making the process
smooth, effective and manageable. A researcher's methodology allows the reader to understand the
approach and methods used to reach conclusions.

OBJECTIVES OF STUDY

 To know profitability of the company.

 To assess liquidity position of the company.

 To assess solvency and debt equity position of the firm.

 To formulate a broad planning and development.

 To describe what your research is trying to achieve and explain why you are pursuing it.

 To get a broader idea of the company.

SCOPE OF STUDY

 The scope of the study is limited to collecting financial data published in the annual reports of the
company every year.

 The ratio analysis is done to suggest the possible solutions. The study is carried out for 5 years
data of Tata steel ( 2015-16 to 2019-20).

 This study is confined to Tata steel only.

SELECTION OF PROBLEM
 In the selection of problem the problem which is selected by me is probability of
TATA STEELS LIMITED. Basically the problem is that because TATA STEEL is a
very popular firm, the probability of me getting the chance of making this report was
very low.

The basic idea of problem is always with us. The topic selected by me is very easy.
My attempts are to prove it my best. But this was the main problem that I faced.

SAMPLE SIZE

The number of years taken by me for the sample size are 5 years.
It includes the data of year 2016, 2017, 2018, 2019, 2020.

DATA COLLECTION

Data collection

a) Primary data

Primary data is data originated for the first time by the researcher through direct efforts and
experience, specifically for the purpose of addressing his research problem. Also known as the first
hand or raw data. The data can be collected through various methods like surveys, observations ,
physical testing,
mailed questionnaires personal interviews, telephone interviews, case studies etc.
b) Secondary data

Secondary data implies second hand information which is already collected and recorded by any
person other than a user for a purpose, not relating to the current research problem. It is the readily
available form of data collected from various sources like censuses, government publication, internal
records of the organizations , reports books ,journal articles, websites and so on.

Sources of data

The required data for the study are basically secondary in nature and the data are collected from the
audited reports of the company. The sources of data are from the annual reports of the company from
the year 2015-2016 to 2019-2020.

Methods of data analysis

The data collected were classified and tabulated for analysis. The analytical tool used in this study.

The study employs the following analytical tools:

 Graph

 Ratio analysis
 TOOLS AND TECHNIQUES OF STUDY

After the preparation of financial statement generally people are interested in knowing the position of
an enterprise from various point of view. And it is possible by the financial statement with the help of
different tools and techniques such as :
 Ratio Analysis

LIMITATIONS OF STUDY

The study is based on secondary data, obtained from the publish report and as its finding depends
entirely on the accuracy of such data.
CHAPTER 4

CONCEPTUAL
 THEORY

RATIO ANALYSIS
MEANING :Ratio analysis is referred to as the study or analysis of the line items present in the
financial statements of the company. It can be used to check various factors of a business such as
profitability, liquidity, solvency and efficiency of the company or the business.
DEFINITION : Ratio analysis is a technique of analysis, comparison and interpretation of financial
statement. It is a process through which various ratio are calculated and on that basis conclusions are
drawn which become the base of managerial decision.

Ratio analysis is the comparison of line items in the financial statements of a business. Ratio analysis
is used to evaluate a number of issues with an entity, such as its liquidity, efficiency of operations, and
profitability. This type of analysis is particularly useful to analysts outside of a business, since their
primary source of information about an organization is its financial statements.
Accounting ratio or analysis is an important technique of analysis of financial
performance. It is most widely used technique of financial performance. Ratio
is first to developed to analysis and interprets financial statement.

Liquidity Ratio

The term liquidity refers to firm’s ability to pay its current liability out of its
current asset. Liquidity ratios are used to measure the liquidity position or short
term financial position of firm. These ratios are used to assess the short term
debt paying ability of firm. Important liquidity ratios are current ratios, quick
ratios and super quick ratio.

a) Current Ratio

Current ratio is one of the oldest of all financial ratios. It was first used in 1891.
Current ratio is defined as the ratio of current asset to current liabilities. It
shows the relationship between total current asset and total current liabilities.
Current ratio is also called working capital ratio or banker’s ratio. Generally a
current ratio of 2:1 is considered satisfactory or ideal. It is calculated as follows
Current ratio = Current asset

Current liablity

b) Quick ratio

Quick ratio is the ratio of liquidity asset to current liability. It is the measure of
instant ability of the business enterprise. It is also called acid test ratio. It is
called so because the ratio is calculated to eliminate all possible liquid elements
from current asset. Ratio 1:1 is considered ideal. It is computed as follows
Quick Ratio = Quick assets
Current liablity
c) Super quick Ratio

It is the ratio which shows the relationship between the absolute liquid asset
and current liability. It is also called absolute liquid ratio. Absolute liquid asset
take into account cash in hand, cash at bank and marketable securities. The
most favorable and optimum value at this ratio should be 0.5:1. It is calculated
as follows
Super quick ratio = Absolute liquid asset

Current liablity

Solvency ratio

Solvency refers to the ability of a firm to pay its outside liabilities both short
term and long term. Solvency ratios are used to analyze long term financial
position of business. In other words these ratios are used to analyze the capital
structure of firm. Important solvency ratios are debt equity ratio, proprietary
ratio, leverage ratio etc.

a) Debt Equity Ratio

Debt equity ratio is most commonly used ratio to test solvency of a firm. This
ratio indicates the relative proportion of debt and equity in financing the asset
of the firm. In shot it expresses the relationship between the external equity and
internal equity of company. Sometimes it’s referred as security ratio. The
formulae used is
Debt Equity Ratio = Debt
Equity

b) Proprietary ratio

Proprietary ratio establishes the relationship between shareholders fund and

total asset. The ratio shows how much funds have been contributed byshareholders in total asset by
firm. It is also called net worth ratio. Generally
0.5:1 is considered as ideal.
Proprietary Ratio = Shareholders fund
Total asset

c) Leverage Ratio

The ratio expresses the relationship between total asset and liability of a
company. It measures the solvency of business. This ratio is also called
solvency ratio, ratio of total asset to total debt. Higher solvency ratio indicates
financial position of a business is strong. A lower solvency ratio indicates
financial position of business is weak. The following formula is used to
compute solvency ratio
Leverage ratio = Total asset
Total debt
Activity ratio

Activity ratios show how effectively a firm uses its available resources or
assets. This ratio indicates efficiency in asset management. In other words, this
ratio indicates the speed with which the business resources are turned over or
converted into cash. Higher turnover ratio means better use of resources and
lower turnover ratios means worst use of resources. Important turnover ratios
are inventory turnover ratio, working capital turnover ratio and fixed asset
turnover ratio.

a) Inventory turnover ratio

This ratio show the relationship between costs of goods sold and average
inventory or stock. It is also called merchandise turnover ratio. It is obtained by
dividing cost of goods sold by average stock of company. It indicates number
of times stock is turn over or converted in to cash. Generally ratio of 8 times is
considered as satisfactory. Stock turnover ratio is computed by the following
formula
Stock turnover ratio = cost of goods sold

Average stock
b) Working capital turnover ratio

Working capital offer to the ratio with current asset will change with the
change in sales of a company. This means working capital is related with the
sales. The relationship between sales and working capital is called working
capital turnover ratio. This ratio shows how many times working capital is
rotated to generate sales. Standard working capital turnover ratio is 7 or 8
times. It is calculated as follows
Working capital turnover ratio = Net sales

Working capital

c) Fixed asset turnover ratio

Fixed asset explains the purchase of fixed asset for the business. Without fixed
asset it cannot make sale and profit. These sales depend on how fixed assets are
utilized in the business for knowing whether fixed assets are efficiently utilized
or not fixed asset turnover is used. Fixed asset turnover establishes the
relationship between net sales and fixed asset ratio. Higher the ratio indicates
better utilization and lower ratio indicates lower utilization of fixed assets. It is
computed as follows
Fixed asset turnover ratio = Net Sales
Fixed asse
t

Profitability ratio

The ultimate aim of a business enterprise is to earn profit. Profit is the engine
that drives a business enterprise or a company. Firm should earn profit to
survive and grow for a long period of time. To the management profit is
measure of efficiency and control of business. Profitability refers to ability of a
firm’s income. Profitability can be easily measured by profitability ratio. The
important profitability ratios are gross profit ratio, net profit ratio, operating
profit ratio, return on investment and return on shareholders fund.

a) Gross profit ratio

It is most common type of profitability ratio based on sales. Basic component of
gross profit ratio are gross profit and net sales. The main objectives of gross
profit ratio are to measure the efficiency with which a firm produces its product.
The ideal or standard form of gross profit ratio is 20% to 25%. It is calculated as
follows
Gross profit ratio = Gross profit * 100
Net sales

b)Operating profit ratio

Operating profit explains the relationship between operating profit and net sales.
Operating profit means profit from normal business operations. It is the profit
before adjusting non-operating expenses and non-operating income. It measures
the operational efficiency of a company. Operating profit can be ascertained as
follows
Operating profit ratio = Operating profit * 100
Net sales

c)Net profit ratio

Net profit ratio is ratio of net profit earned by the business and its net sales. It
measures overall profitability. Net profit ratio indicates the efficiency as well as
the profitability of the business. It determines the return to the owner of the
business. The ratio indicates how much of sales are left after meeting all
expenses of the business. Ideal form of net profit ratio is 5% to 10%. It is
calculated as follows
Net profit ratio =Net profit * 100
Net sales
d) Return on investment

It is a profitability ratio based on investment. When a firm invests money in the

business, it naturally expects return from the investment. Therefore the firm
wants to know how much profit is earned from its investment. It establishes the
relationship between profit or return and investment. It is also called accounting ratio of return. The
standard return on investment ratio is 15%. It is calculated
as follows
ROI =Profit before interest and tax * 100
Capital employed

e) Return on shareholders fund

It is ratio of net profit to shareholders fund or net worth. It measures the

profitability from shareholders point of view. It is profitability ratio based on
investment. This ratio is also called the mother of all ratios. This ratio is perhaps
most important ratio because it measures the return that is earned towards the
owner’s capital. It is computed as below
Return on shareholders fund = Net profit after interest and tax * 100
Shareholders fund
 CHAPTER 5

DATA ANALYSIS
AND
INTERPRETATION
Liquid ratios

1. Current ratio = current asset/current liabilities

(Rs. Crores)

Year Current assets Current liabilities Current ratio

2016 14421.49 21087.99 0.68
2017 20110.40 23056.33 0.87
2018 34643.91 25607.34 1.35
2019 17035.58 25593.65 0.67
2020 20009.19 30871.30 0.65
Current ratio compares current assets with current liabilities and tell us whether the current assets are
enough to settle current liabilities. It is inferred from the table that the higher current ratio of Tata steel
is 1.35 in the year 2018 and the lower was 0.65 in the year 2020. The ratio of 1.2 to 2 or above is
usually considered safe. Tata steel is in poor condition to pay back its debts. Hence the current ratio of
Tata steel is dissatisfactory.

LIQUID RATIO

Liquid ratio= current assets- inventory- prepaid expenses/current liabilities

(Rs. Crores)

Year Liquid assets Current Liquid ratio

liabilities
2016 7337.68 21087.99 0.35
2017 9873.55 23056.33 0.43
2018 23620.5 25607.34 0.92
2019 5780.24 25593.65 0.23
2020 9292.53 30871.30 0.30

Ratio of 1.1 is said to be the ideal quick ratio. Indicating that company has in its possession enough
assets which may be immediately liquidated for paying off the current liabilities. The table shows that
the highest liquid ratio of Tata steel is 0.92 in the year 2018 that is not more than the ideal ratio. Hence
the liquid ratio of the company is dissatisfactory.
LONG TERM FINANCIAL POSITION RATIO OR SOLVENCY RATIO

DEBT EQUITY RATIO

Debt equity ratio = long term borrowing (Debt) / shareholder funds

(Rs. Crores)

Year debt Shareholders Debt equity ratio

fund
2016 29368.44 70476.72 0.41
2017 36475.07 49659.00 0.73
2018 35717.16 61514.82 0.58
2019 39175.00 70454.71 0.55
2020 42683.14 74563.12 0.57

The debt equity ratio is a financial ratio indicating the relative proportion of shareholders equity and debt used to finance a
company assets. Debt to equity ratio greater than 1 indicate the company may be overleveraged. In all the years debt equity
ratio of a company is less than 1. Hence the company is good in maintaining its debt position.
PROPRIETARY RATIO
Proprietary ratio = shareholder funds / total assets
(Rs. Crores)

Year Shareholders Total assets Proprietary ratio

fund
2016 70476.72 123208.15 0.57
2017 49659.00 111465.41 0.44
2018 61514.82 125114.34 0.49
2019 70454.71 137498.36 0.51
2020 74563.12 150392.56 0.49

The high proprietary ratio indicates that a company has a sufficient amount of equity to support the function of business. The
ideal value of the proprietary ratio is depend on the risk appetite of the investors . If investor agree to take large amount of
risk than a lower proprietary ratio is preferred. It is inferred from the table that the proprietary ratio of Tata steel is higher in
the year 2016 (0.57) and lower in the year 2017 (0.44). Hence proprietary ratio of the company is satisfactory.

RETURN ON EQUITY

Return on equity = net profit after tax and preference dividend/ (share capital+ reserve and surplus) X 100
(Rs. Crores)
Year Net profit after Share capital + Return on
tax and reserve and equity
preference surplus
dividend
2016 4900.95 70476.72 6.95
2017 3444.55 49659.00 6.93
2018 4169.55 61514.82 6.77
2019 10533.19 70454.71 14.95
2020 6743.80 74563.12 9.04

The return on equity signifies how good the company is in generating returns on the investment it received from his
shareholders. It is inferred from the table that the return on equity of Tata steel is higher in the year 2019 (14.95%) and the
lower in 2018 that was (6.77%).
Return on capital employed

Return on capital employed= net profit before interest and tax / capital employed X 100
Capital employed= total assets – current liabilities
(Rs. Crores)

Year Net profit before Capital Return on

interest and tax employed capital
employed
2016 11102.45 102120.16 10.87
2017 12290.41 88409.08 13.90
2018 16542.62 99507 16.62
2019 22968.02 111904.71 20.52
2020 15265.69 119521.26 12.77

Return on capital employed measures the efficiency with which investment made by the shareholders. It is inferred from the
table that the return on capital employed is higher in the year 2019 (20.52%) and lower in the year 2016 (10.87%).
PROFITABILITY RATIOS

GROSS PROFIT RATIO

Gross profit ratio = (gross profit/net sales) x 100
(Rs. Crores)

Year Gross profit Net sales Gross profit ratio

2016 6154.90 37814.69 16.27
2017 9601.86 47296.99 20.30
2018 13732.00 58550.68 23.45
2019 20144.44 68923.15 29.22
2020 12234.68 58815.57 20.80

Gross profit ratio measures the relationship of gross profit and net sales. Higher ratio is better. The higher ratio indicates an
increase in the selling price of the goods sold without any corresponding increase in the cost of goods sold.
For the last 4 year, the gross profit ratio of Tata steel has been grown upwards consistently but in the year 2020 it decreases.
Overall It indicate that the gross profit ratio is increased over a period of time. It shows the good progress of the company. It
is inferred from the table that the gross profit ratio is higher in the year 2019 (29.22%) and lower in the year 2016 (16.27%)

NET PROFIT RATIO

Net profit ratio = ( net profit / net sales ) x 100

(Rs. Crores)
Year Net profit Net sales Net profit ratio
2016 4900.95 37814.69 12.96
2017 3444.55 47296.99 7.28
2018 4169.55 58550.68 7.12
2019 10533.19 68923.15 15.28
2020 6743.80 58815.57 11.46

Net profit ratio shows the relationship between net profit and net sales. Higher the ratio indicates that operational efficiency of
the concern. It can be observed from table that the net profit ratio of Tata steel shows that there is decrease in the net profit
margin from the year 2017 to 2018 as compared to 2016.The higher net profit ratio was observed in the year 2019 that was
15.28% and the lower in the year 2018 (7.12%) .
OPERATING PROFIT RATIO

Operating profit ratio = (operating profit / net sales ) x 100

(Rs. Crores)

Year Operating profit Net sales Operating profit

ratio
2016 7611.79 37814.69 20.12
2017 11875.95 47296.99 25.10
2018 15778.96 58550.68 26.94
2019 20562.94 68923.15 29.83
2020 14861.57 58815.57 25.26

This ratio is used to measure the operational efficiency of the management . It is inferred from the
table that From the last 4 year, the operating profit ratio of the company has been grown upwards
consistently but in the year 2020 it decreases.
The highest operating ratio was observed in the year 2019 (29.83%) and lowest is observed in the
year 2016 (20.12%).
CHAPTER 6 -
FINDINGS AND
SUGGESTIONS
1
FINDINGS

 The higher current ratio of the Tata steel is 1.35 in the year 2018 and the
lower was 0.65 in the year 2020.

 Higher liquid ratio of Tata steel is 0.92 in the year 2018 and lower was
0.23 in the year 2019 and It was 0.30 in the year 2020.

 The Gross profit ratio of Tata steel has been grown upwards consistently
from 2016 to 2019. It was high in 2019 (29.22%) and low in 2016 (16.27%)
and 20.80% in the year 2020.

 The Net profit of Tata steel shows that there is decrease in the net profit
margin in the year 2017 (7.28%) and 2018 (7.12%) as compared to 2016
(12.96%) it was high in the year 2019 (15.28%) and low in the year 2018
(7.12%) It was 11.46% in the year 2020.

 The operating profit ratio of Tata steel Tata steel has been grown upwards
consistently from 2016 to 2019. It was high in 2019 (29.83%) and low in 2016
(20.12%) and 25.26% in the year 2020.

 Return on equity of Tata steel is high in the year 2019 (14.95%) and was
low in 2018 (6.77%) and 9.04% in the year 2020.

 Return on capital employed of Tata steel is high in the year 2019 (20.52%)
and was low in 2016 (10.87%) and 12.77% in the year 2020.

2
 Debt equity ratio of Tata steel is low in the last five years and it was 0.57
in the year 2020. Lower debt equity ratio shows a good performance of a
company.

 The proprietary ratio of Tata steel is higher in the year 2016 (0.57) and
lower in the year 2017 (0.44) and 0.49 in the year 2020.

SUGGESTIONS

 Current ratio of Tata steel ltd is low it should increase its current ratio where it
can meet it short term obligation smoothly.

 The company should be maintaining a sound short-term debts paying capacity

in future because the use of more amount of external funds may lead to short-
term insolvency.

 Liquid ratio of Tata steel ltd is low. So I suggest that a company maintain proper
liquid funds.

 All operational and related activities should be performed efficiently and

effectively.

 Tata steel ltd has sound solvency position but the Company has to avail on the
benefit of trading on equity.

 The government intervention in promoting ‘Make in India’ in public

3
procurement has resulted in Indian companies garnering over Rs 50 billion in
projects.

 For the very existence and growth, every company has to earn adequate
profit. As regards profitability, the company witnessed a fluctuating trend
throughout the study period, which is not desirable from the management of
the company. To keep the shareholders‟ happy and reliable the rate of return to
the equity shareholders should be consistent in the years to come.

CONCLUSION

Efficient management of finance is very important for the success of an enterprise.

Term financial performance is very dynamic term. The subject matter of financial
performance has been changing very rapidly. In present time greater importance
is given to financial performance. So, here an attempt is made by me to analyze
the financial performance of TATA STEEL LTD. While analyzing the financial
performance it can be concluded that TATA Steel is performing good in terms of
Quick assets, better inventory management, management of fixed assets, gross
profit, return on capital employed and dividend payout ratio. These factors plays
important role in forming company strategic and operational thinking. Efforts
should constantly be made to improve the financial position up to next level of
performance in order to make benchmark. This will yield greater efficiencies and

4
improve investor satisfaction. Lastly the policy adopted by government of India
under National steel policy (2017) and policy on preference to domestically
manufactured iron and steel products is expected to provide the much necessary
momentum to the iron and steel sector of the country.

REFRENCES

https://en.wikipedia.org/wiki/Tata_Steel

https://www.ibef.org/industry/steel.aspx

Kothari C.R, (1990), Research methodology methods and techniques, University

of Rajasthan, New age international (p) limited.

Gupta S.P & Gupta K.L. Management and cost accounting, Sahitya bhavan
publication.

Gupta Shashi k & Sharma RK , management accounting, kalyani publisher.

Pandey I M, financial management, vikas publishing house pvt.ltd.

https://www.moneycontrol.com/financials/tatasteel/balance-sheetVI/TIS

https://money.rediff.com/companies/Tata-Steel-Ltd/15510001/results-annual

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ANNEXURE

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