ratio analysis tata motors

Balance Sheet for Tata Motors

Balance Sheet of Tata Motors ------------------- in Rs. Cr. -------------------

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Sources Of Funds

Total Share Capital 361.79 382.87 385.41 385.54 514.05

Equity Share Capital 361.79 382.87 385.41 385.54 514.05

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 3,749.60 5,127.81 6,458.39 7,428.45 11,855.15

Revaluation Reserves 0.00 26.39 25.95 25.51 25.07

Networth 4,111.39 5,537.07 6,869.75 7,839.50 12,394.27

Secured Loans 489.81 822.76 2,022.04 2,461.99 5,251.65

Unsecured Loans 2,005.61 2,114.08 1,987.10 3,818.53 7,913.91

Total Debt 2,495.42 2,936.84 4,009.14 6,280.52 13,165.56

Total Liabilities 6,606.81 8,473.91 10,878.89 14,120.02 25,559.83


Application Of Funds

Gross Block 6,611.95 7,971.55 8,775.80 10,830.83 13,905.17

Less: Accum. Depreciation 3,454.28 4,401.51 4,894.54 5,443.52 6,259.90

Net Block 3,157.67 3,570.04 3,881.26 5,387.31 7,645.27

Capital Work in Progress 538.84 951.19 2,513.32 5,064.96 6,954.04

Investments 2,912.06 2,015.15 2,477.00 4,910.27 12,968.13

Inventories 1,601.36 2,012.24 2,500.95 2,421.83 2,229.81

Sundry Debtors 811.32 715.78 782.18 1,130.73 1,555.20

Cash and Bank Balance 345.26 327.66 535.78 750.14 638.17

Total Current Assets 2,757.94 3,055.68 3,818.91 4,302.70 4,423.18

Loans and Advances 2,831.16 5,964.61 6,208.53 4,831.36 5,909.75

Fixed Deposits 1,659.78 791.77 290.98 1,647.17 503.65

Total CA, Loans & Advances 7,248.88 9,812.06 10,318.42 10,781.23 10,836.58

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 6,142.74 6,673.61 6,956.88 10,040.37 10,968.95

Provisions 1,126.06 1,215.04 1,364.32 1,989.43 1,877.26

Total CL & Provisions 7,268.80 7,888.65 8,321.20 12,029.80 12,846.21

Net Current Assets -19.92 1,923.41 1,997.22 -1,248.57 -2,009.63

Miscellaneous Expenses 18.16 14.12 10.09 6.05 2.02

Total Assets 6,606.81 8,473.91 10,878.89 14,120.02 25,559.83

Contingent Liabilities 1,450.32 2,185.63 5,196.07 5,590.83 5,433.07

Book Value (Rs) 113.65 143.94 177.59 202.70 240.64

Profit and Loss account for Tata Motors

Profit & Loss account of Tata Motors

------------------- in Rs. Cr. -------------------


Income

Sales Turnover 20,262.61 23,490.55 31,089.69 33,123.54 28,538.20

Excise Duty 3,063.44 3,401.92 4,425.44 4,355.63 2,877.53

Net Sales 17,199.17 20,088.63 26,664.25 28,767.91 25,660.67

Other Income 403.98 852.41 1,114.38 734.17 921.29

Stock Adjustments 144.00 256.91 349.68 -40.48 -238.04

Total Income 17,747.15 21,197.95 28,128.31 29,461.60 26,343.92

Expenditure

Raw Materials 12,245.28 14,633.02 19,879.56 20,891.33 18,801.37

Power & Fuel Cost 237.81 258.51 327.41 325.19 304.94

Employee Cost 1,039.34 1,143.13 1,367.83 1,544.57 1,551.39

Other Manufacturing Expenses 592.64 671.31 872.95 904.95 866.65

Selling and Admin Expenses 890.21 1,061.07 1,505.23 2,197.49 1,652.31

Miscellaneous Expenses 620.27 740.99 1,051.49 964.78 1,438.89

Preoperative Exp Capitalised -282.43 -308.85 -577.05 -1,131.40 -916.02

Total Expenses 15,343.12 18,199.18 24,427.42 25,696.91 23,699.53


Operating Profit 2,000.05 2,146.36 2,586.51 3,030.52 1,723.10

PBDIT 2,404.03 2,998.77 3,700.89 3,764.69 2,644.39

Interest 234.30 350.24 455.75 471.56 704.92

PBDT 2,169.73 2,648.53 3,245.14 3,293.13 1,939.47

Depreciation 450.16 520.94 586.29 652.31 874.54

Other Written Off 67.12 73.78 85.02 64.35 51.17

Profit Before Tax 1,652.45 2,053.81 2,573.83 2,576.47 1,013.76

Extra-ordinary items -1.54 0.00 -0.07 0.00 15.29

PBT (Post Extra-ord Items) 1,650.91 2,053.81 2,573.76 2,576.47 1,029.05

Tax 415.50 524.93 660.37 547.55 12.50

Reported Net Profit 1,236.95 1,528.88 1,913.46 2,028.92 1,001.26

Total Value Addition 3,097.84 3,566.16 4,547.86 4,805.58 4,898.16

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 452.19 497.94 578.07 578.43 311.61

Corporate Dividend Tax 63.42 69.84 98.25 81.25 34.09

Per share data (annualised)

Shares in issue (lakhs) 3,617.52 3,828.34 3,853.74 3,855.04 5,140.08

Earning Per Share (Rs) 34.19 39.94 49.65 52.63 19.48

Equity Dividend (%) 125.00 130.00 150.00 150.00 125.00

Book Value (Rs) 113.65 143.94 177.59 202.70 240.64

RATIO ANALYSIS

Sr.No.

Ratios Formula

Year EndedMar0

8

Year endedMar0

9

Explanation

1.Current

ratio

Current Assets/ Current

Liabilities0.64 0.44

Higher the current ratio better is the situation and the ideal value is 2:1. Tata Motors’ current ratio is less than 1 which indicates more liabilities than assets.

2.Liquid ratio

Liquid assets/liquid

liabilities0.66 0.58

A higher liquid ratio indicates that there are sufficient assets available with the organisation which can be converted in the form of cash almost immediately to pay off those liabilities which are to be paid off almost immediately.

3.

Fixed Assets

turnover ratio

Net sales/ fixed assets

2.69 1.88

It indicates the capability of organisation to achieve maximum sales with the minimum investment in fixed assets. Higher the ratio, the better.

4.

Current assets

turnover ratio

Net sales/ current assets

6.68 5.8

It indicates the capability of organisation to achieve maximum sales with the minimum investment in current assets. Higher the ratio, the better.

5. Working Net sales/ 5.68 3.68 It indicates the capability

capital turnover

ratioworking capital

of organisation to achieve maximum sales with the minimum investment in working capital. Higher the ratio, the better.

6.

Inventory/Stock

turnover ratio

Net sales/Closing

inventory3.52 4.60

It indicates the capability of organisation to achieve maximum sales with the minimum investment in inventory. Higher the ratio, the better.

7.

Capital turnover

ratio

Sales/capital employed

0.76 0.60

It indicates the efficiency of the organisation with which the capital employed is being utilized. Higher the ratio, the better.

8.Proprietary

ratioFixed assets/ owners’ fund

0.54 0.60

Both these figures indicate that the owners’ funds are exceeding the fixed assets which indicate that a part of owners’ funds is invested in the current assets also.

9.

Fixed Assets/Cap

ital employed

ratio

Fixed assets*100/capit

al employed32% 26%

A low value of this ratio in both cases indicates that a major portion of the long term funds are invested in current assets as compared to fixed assets.

10. Interest Coverage

ratio

Profits before interest and

taxes/ Interest charges

10.70 7.84 A high ratio as indicted by the 2 figures is favorable as it indicates the protection available to the lenders of long term capital in the form of funds available to pay

the interest charges.

11.

Debt service

Coverage ratio

(Net profit after taxes +

Depreciation + Interest on term loans)/(Interest on term loans + Installments of

term loans

0.47 0.35

It gives indication about the capability of Tata Motors to meet the obligations of long term borrowing. A very low value of ratio means insufficient earning capacity of organisation to meet the obligations of long term borrowing.

12.Gross

profit ratioGross profit * 100/net sales

15.28%

16.10%

A low value shown by the 2 figures indicates that this organisation is not able to produce or purchase at a low cost. It can be increased by either adjusting the sales price or production cost or by increasing volume of products having high gross profit margin.

13.Net profit

ratio

(Net profit after taxes) * 100/net

sales15.14

%12.40

%

It indicates that portion of sales available to the owner after considering all types of expenses and costs. The lower figures alongside indicate lower profitability of the business.

14.Operating

ratio

(Manufacturing cost of goods

sold+ operating expenses)*100/N

et sales

83.52%

81.16%

A high ratio as seen alongside indicates that only a small margin of sales is available to meet the expenses in the form of interest, dividend and other non-operating expenses. A lower value is generally desirable.

15. Return on Net profit * 36.13 26.87 It measures profitability

Asset 100 /assets % %

of investments in the firm. Higher value is preferred which is not the case as per figures shown.

16.Return on

capital employed

(Net profit + Interest on long

term sources)/capital

employed

0.73 0.57

It measures profitability of capital employed in the firm. Higher value is preferred and the situation of Mar08 was much better than Mar09.

17.Return on

Shareholders’ funds

Net profit after taxes * 100/

Total shareholders’

funds

0.14 0.08

It measures if the firm has earned sufficient returns for its shareholders or not. Higher the ratio, the better the situation which is not the case for Tata Motors in both the years.

18.Earnings per share

(Net profit after taxes- preference

dividend)/ Number of

equity shares outstanding

52.63 19.48

It measures the profits available to the equity shareholders on a per share basis.

19.

Capital to non-

current assets ratio

Owners equity/ Non-current

assets3.51 4.22

A higher capital to non-current assets ratio indicates that it is easier to meet the business' debt and creditor commitments.

20.Fixed costs

to total assets

Fixed costs/ Total assets

1.09 1.06

An increase in the fixed costs to total assets ratio may indicate higher fixed charges, possibly resulting in greater instability in operations and earnings.

ratio analysis tata motors

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