ratio analysis group8
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RATIO ANALYSIS
SUBMITTED BY GROUP8
CURRENT RATIO:-
Bajaj = 5204.19 / 4664.37 =1.12
Tata Motors = 64461.47 / 73268.07
= 0.879 Bajaj has better liquidity than
Tata motors but overall both the company has far lower liquidity than standard ratio.
ACID TEST RATIO:-
Bajaj = 4500.58 / 4664.37
=0.965Tata Motors = 46245.45 /
73268.07=0.631
Bajaj has a good acid ratio than Tata and also close to standard ratio. That means Bajaj has 96.5 rs acid assets for 100 rs of liabilities
INVENTORY TURNOVER RATIO:-
Bajaj = 14126.02 / 639.93
=22.07Holding Period =17 daysTata Motors = 109467.58 /
16143.265=6.78
Holding Period = 54 daysInventory holding period of Tata
motors is very high
DEBTORS TURNOVER RATIO:-
Bajaj = 18945.52 / 370.335
= 51.16Period = 8 daysTata Motors = 165654.49 /
7381.245= 22.44
Period = 17 days
CREDITORS TURNOVER RATIO:-
Bajaj =14211.67 / 1905.695= 7.46
Period = 49 daysCash Conversion Cycle = (24) daysTata Motors = 112003.3 / 32294.69
= 3.468Period = 104 daysCash Conversion Cycle = (33) days
Cash conversion cycleAs both the companies have long
time period of payment from their suppliers they have negative cash conversion cycle
Tata motors has better suppliers payment period than Bajaj
FIXED ASSET TURNOVER RATIO
Bajaj = 18945.52 / 5958.22
= 3.18
Tata Motors = 165654.49 / 80469.74
= 2.06Bajaj is able to use its assets more
efficiently to produce sales
TOTAL ASSET TURNOVER RATIO
Bajaj =18945.52 / 11162.41=1.697
Tata =165654.59 / 64461.47
=2.57But over all Tata is more able to
use its total assets to produce sales
DEBT EQUITY RATIO
Bajaj =254.55 / 6081.72=0.0418
Tata Motors =30421.06 / 33149.06
=0.918Bajaj has lesser debt than Tata
motors but both the companies has lower debt equity ratio than standard ratio.
LIABILITY TO EQUITY RATIOBajaj = 5080.69 / 6081.72
= 0.835
Tata Motors = 112232.77 / 33149.93
= 3.39
INTEREST COVERAGE RATIOBajaj = 4234.58 / 22.79
=185.81
Tata Motors = 22084.06 / 2982.22
=7.405Bajaj is able to repay the interest
rate 185 times which is higher than Tata because Tata has huge long term liabilities.
RETURN ON EQUITY
Bajaj = 3045.4 / 6081.72= 50.07%
Tata Motors =13516.5 / 33149.93
= 40.7%Bajaj has greater return on equity
than Tata.
RETURN ON TOTAL ASSETSBajaj = 3045.4 / 11162.41
= 27.28%
Tata Motors = 13516.5 / 145382.64
= 9.29%
RETURN ON CAPITAL EMPLOYED
Bajaj = 3045.4 / 6387.71= 47.68%
Tata = 13516.5 / 63570.99
= 21.26%
EARNINGS PER SHARE(EPS)Bajaj = 3045.4 / 28.937
=105.2
Tata Motors = 13516.5 / 63.475=212.94
GROSS PROFIT MARGIN
Bajaj = 4466.1 / 18945.52= 23.58%
Tata Motors = 48905.99 / 165654.49
= 29.52%Gross profit of Tata is greater than
Bajaj that shows that Tata has greater efficiency in manufacturing.
PRICE EARNING RATIO
Bajaj =1677.9 / 105.2=15.92
Tata Motors = 275.7 / 212.94=1.294
Bajaj has a higher p/e ratio that shows that investor has ready to invest at higher price.
PAY-OUT RATIO
Bajaj = 45 / 105.2= 0.427
Tata Motors = 40.50 / 212.94= 0.19
Bajaj is paying greater part of their earning as dividend
DIVIDEND YIELD RATIO
Bajaj = 45 / 1677.9= 0.0268
Tata Motors = 40.50 / 275.7= 0.146
It shows the real return to the investors as a percent of current market price. Tata has better return.
Price fluctuation
Price changes of Bajaj’s share 1680-1460/1460=15.07%Price changes of Tata’s share 275.70- 249.5/249.5=10.5%As Bajaj is paying higher dividend
and has better profitability ratios and lesser risk therefore they have more growth in market price,