Presented by: Manish Gupta

‡ It is Asia s First and India s largest steel company in the private Sector ‡ It is India s 2nd largest and 2nd most profitable company in private sector ‡ It is one of the most admired companies in terms of HR Practices and sustainable growth and Corporate Social Responsibiliy

‡ Established in 1907 by Jamshetji N Tata in Jamshedpur. ‡ Formerly known as Tata Iron and Steel Company Limited (TISCO). ‡ 28.1 million tonnes per annum of crude steel production capacity. ‡ 82,700 employees ‡ Headquartered in Jamshedpur, Jharkhand and registered office in Mumbai.

Major Sources of Revenue
According to the annual reports 2008-09 of Tata Steel,the particulars are as follow:
Figures in crore

Price/earnings ratio:
Analysis: Here in this case P/E ratio in FY 2008-09 had increased almost 3 times from the value in FY 200304. however ratio is reduced to 5.19 from 5.64 last. Means market has lower confidence in the shares as compared to last year

Return on assets:
Analysis: Here figures of 22.60% in FY 2004-05 to 8.49% in FY 2008-09 indicates that the company is steadfastly moving from being an asset light company to an asset heavy one.

Return on Equity:
Analysis: Over the years, Tata steel has been witnessing a downfall in its ROE. ROE acts as a useful tool to compare the profitability of Tata steel with its competitors.

Profit Margin Percentage:
Analysis: Indicates what portion of sales contributes to the income of a company. Thus the Profit Margin is 20.87 is the contributions to the income of the company.

Earning per Share:
Analysis: Here if we compare the EPS of Tata steel for the last two years, we find an increase of 2 percent. This means that the there is a 2 percent growth rate in the company s earnings.

Asset Turnover:
Analysis: In the case of Tata steel, it has a low asset turnover which indicates that it makes high profit margin on its product.

Invested Capital Turnover:
Analysis: The figures indicate that there has been a increase in invested capital, however the increase in return has not matched the growth in capital investment. Means it s overall profitability has not been healthy for the studied period.

Equity Turnover:
Analysis: Here again Tata steel s invested capital turnover shows a downturn over last 5 years and gives the impression that the company is not able to grow its revenue from stockholder s equity.

Inventory Turnover:
Analysis: In this ratio, inventory turnover has been almost same over the years which implies that Tata steel has been successfully in controlling inventory.

Working capital Turnover:
Analysis: This ratio indicates that Tata steel has been able to improve its working capital considerably and this can be used to expand and improve their operations.

Current Ratio:
Analysis: It s ratio has always been healthy in last 5 years though relative to 200708, the ratio has decreased but still it is higher. Means it is in relatively good short-term financial standing.

Acid-test Ratio:
Analysis: The ratio tells creditors how much of the company s short term debt can be met by selling all the company s liquid assets at very short notice. Tata steel acquired Corus in year 2006 justify the fairness of low ratio in next two fiscal years

Debt/Equity ratio:
Analysis: A high debt/equity ratio, as is the case with Tata steel at 94.66% in FY 2008-09, generally means that a company has aggressive in financing its growth with debt.

Dividend Yield Ratio:
Analysis: Tata Steel has given an excellent dividend yield by announcing a dividend of Rs. 16 on each share.

Dividend payout:
Analysis: In this ratio FY 2008-09 net income has increased, the dividend payout has decreased since total dividends paid has been the same as the previous year.

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