RATIO

ANALYSIS
C O M PA N Y: T V S M o t o r s
S E C TO R : A u t o m o b i l e 2 a n d 3 w h e e l e r
S O U R C E O F D ATA : w w w. m o n e y c o n t r o l . c o m
PERIOD: For the period ending March 2022

Team – Ledger -ndar y | LI B A P T-P GD M2022

TEAM
MEMBERS
1.Alex Jayachandran Jayapalan (WE-P22004)
2.Alwyn Prabhu B (WE-P22005)
3.Lokesh R (WE-P22031)
4.Timothy John Infant C (WE-P22057)
5.Xavier Vedha Rayan B S (WE-P22060)

Note: The balance sheets and the formulas used to calculate the ratios are present in the
attached spreadsheet.
 LIQUIDITY &
SOLVENCY RATIOS
TVS MOTORS – MARCH
Current Ratio Q uick R atio Cash Ratio Solvency Ratio

2022
Current assets ÷
Current liabilities
(All Current Assets - Stock (Cash +Bank Balance +
- Prepaid Expenses) ÷
Current liabilities
Marketable Securities)
÷ Current liabilities. 
Total Long Term Debts
÷ Shareholders Funds

0.65 0.43 0.07 0.34

TVS - CURRENT RATIO

0.65
IN FER E NC E
The current ratio measures a company’s ability to pay short-term obligations or those due
within one year.
In this case of TVS, a ratio of 0.65 which is under 1.00 indicates that the company’s debts
due in a year or less are greater than its assets—cash or other short-term assets expected to
be converted to cash within a year or less.
TVS – QUICK RATIO

0.43
IN FE R EN C E
The quick ratio is an indicator of a company’s short-term liquidity position and measures a
company’s ability to meet its short-term obligations with its most liquid assets. A result of 1 is
considered to be the normal quick ratio.
In this case of TVS with the quick ratio of 0.43 which is less than 1,it indicates that the company
may not be able to fully pay off its current liabilities in the short term.
TVS – CASH RATIO

0.07
%
IN FE RE N C E
The cash ratio is almost like an indicator of a firm’s value under the worst-case scenario—
say, where the company is about to go out of business. If a company's cash ratio is less than
1, there are more current liabilities than cash and cash equivalents.
In this case of TVS where cash ratio is very minimal (0.07), It means insufficient cash on hand
exists to pay off short-term debt. 
TVS – DEBT TO EQUITY RATIO

0.34
%
INFER E NC E
Debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated
by dividing a company’s total liabilities by its shareholder equity. 

In this case, a low debt-to-equity ratio of 0.34. means the equity of the company’s
shareholders is bigger and it does not require any money to finance its business and
operations for growth.
 Comparison with a
Competitor
HERO MOTOCORP –
C urre nt R atio Q u i c k R atio Ca s h R a tio So lv e n c y R atio

MARCH 2022
1.99 1.77 0.03 0.03
0.65 0.43 0.07 0.34
(TVS) (TVS) (TVS) (TVS)
 COMPARISON OF RATIOS B/W TVS MOTORS AND HERO CORP
C U RR E NT R AT I O
A current ratio of 1.99 (Hero Motocorp) vs 0.65
(TVS) indicates that Hero Motocorp is doing much
better than
TVS in terms of ability to pay short-term obligations TVS in terms of its ability to fully pay off its current
or those due within one year.
C ASH R AT IO
A cash ratio of 0.07 (TVS) vs 0.03 (Hero Motocorp)
indicates that both TVS & Hero Motocorp are in
similar positions with respect to cash on hand to
pay off short term debts.
Q UIC K R AT IO
A quick ratio of 1.77 (Hero Motocorp) vs 0.43 (TVS)
indicates that Hero Motocorp is doing much better
than
liabilities in the short term.
D E BT TO E Q UIT Y R AT IO
Debt to Equity ratio of both the companies are similar
0.03 (Hero Motocorp and 0.07 (TVS) which indicates that
both the companies are in similar positions. In both
cases, equity of the company’s shareholders is bigger
and they do not require any money to finance their
business and operations for growth.