Project Report On Escort Tractors

Estimation of Financial Strength of Escorts.
Presented to: Presented by:
Mr. Sunil Buddhiraja, Narender Dagar,

Presentation Incharge Reg. No. 10904044
RS1903A23
Objective Of The Study
To evaluate current performance of the company and

comparing it with its past performances
To make a comparison of Escorts

performance with its competitors.
To assess the long-term and short-

term financial soundness of the
company.
To find out various reasons which

are responsible for the differences in
the performance of Escorts and its
competitors.
Introduction to the Project
Cont……….
Two methods are adopted to

estimated the strength of escorts
the financial position

financial position of
of the company is
the company on the
measured by making
basis of ratio analysis.
comparison with its
competitors
Introduction to Escorts
In 1960, Escorts set up the
strategic Agri Machinery
Group (AMG) to venture
into tractors.
In 1965, the company rolled

out its first batch of tractors
under the brand name of
Escort.
In 1969, a separate
company Escorts Tractors
Ltd. was established
1996, Escorts Tractors Ltd.

formally merged with the
parent company Escorts
Ltd.
Escorts AMG has three
recognized and well accepted
tractor brands
Scope of the study
The extent to which

The ability of firm has used its
the firm to meet long term solvency
current by borrowing funds.
obligation
The efficiency to
Firm utilizing the which firm is utilizing
overall operating its assets in
efficiency and generating sales
performance of the revenue.
firm.
Research Methodology
Exploratory
Research
+
Design
Descriptive
 observations
Primary Data
Methods of
Data collection
 newspaper
Secondary Data  Journals
 websites
Research Methodology cont.
Sample
Size 4 Companies
Bar- diagram
Presentation Pie charts
Graphs
Review Of Existing Literature
 SOURCE 1
http:// www.escorts.com
Balance Sheet Annul

of different Reports of the
years Internal data of escorts
the company
Ratio Analysis
•A ‘ratio’ is defined as the indicated quotient of two
mathematical expressions and as the relationship
between two or more things
•Ratio analysis involves comparison for a useful
interpretation of the financial statements
Types of Ratio:-
RATIO ANALYSIS OF ESCORTS
CURRENT AND QUICK RATIO:-
1.4
1.2
0.8
0.6
0.4
0.2
0
sep'05 sep'06 sep'07 sep'08 sep'09 sep'10 sep'11
Curent ratio 1.04 1.03 1.15 1.27 0.97 1.12 1.13
Quick ratio 0.75 0.83 0.89 0.97 0.7 0.84 0.85
 Projected ratios for year 2010 and 2011 by using
method of ‘Least Square’.
 Equations for regression line or trend line using time

series:
 Current ratio : Y = 1.09 + 0.011 X (where X=3, 4 for
2010 & 2011 respectively in all cases)
 Quick ratio : Y = 0.83 + 0.004 X
Debtor turnover ratio : Y = 5.74 – 0.5 X
Creditors turnover ratio : Y = 3.99 – 0.15 X
14
12
10
8
6
4
2
0
sep'05 sep'06 sep'07 sep'08 sep'09 sep'10 sep'11
creditors turnover 4.32 4.16 3.85 3.99 3.62 3.54 3.39
ratio
debtors turnover 5.89 7.46 6.18 4.07 5.09 4.24 3.74
ratio
COMPARATIVE ANALYSIS OF ESCORTS WITH
ITS COMPETITORS
CURRENT RATIO:-
6
5
4
3
2
1
0
sep'05 sept'06 sept'07 sept'08 sept'09
escorts ltd. 1.04 1.03 1.15 1.27 0.97
mahindrra & mahindra 1.51 1.48 1.48 1.23 1.02
HMT 5.29 4.77 5.1 3.59 3.65
VST Tillers 1.83 1.5 1.54 1.56 1.71
COMPARISON OF GROSS PROFIT RATIOS OF
DIFFERENT COMPANIES WITH ESCORTS
100%
50%
0%
-50%
VST Tillers 10.21 11.17 13.74 11.54 15.34
HMT -4.73 0.56 -2.32 -29.21 -38.3
mahindrra & 12.8 12.48 14.73 8.12 6.1
mahindra
escorts ltd. -18.96 1.32 3.3 3.17 7.42
COMPARISON OF NET PROFIT RATIOS OF DIFFERENT
COMPANIES WITH ESCORTS
20
-20
-40
-60
escorts ltd. 3.08 1.08 -0.31 0.59 4.16
mahindrra & 7.85 10.73 11.12 10.21 6.62
mahindra
HMT 1.88 3.67 16.09 -18.41 -40.84
VST Tillers 4.42 5.72 7.65 7.55 10.41
Limitation of the study
Working capital
Excessive carriage of problems will arise
inventory over the when there is a slow –
normal levels down in collection of
debtors.
Sometimes capital
goods will be Unplanned production
purchased from the schedules will cause
funds available for excessive stocks
working capital
Dependence in short
term sources of
finance
Recommendations
Investments: The Market share: The
Company has invested Company’s main
in various fields which is motive should be to
good as it has diversed increase their market
its risk. share.
►Payment policies:
Payment policies
followed by Escorts
should be reviewed
time to time.
Collection
►Proper training: The
period: Escorts
personnel must be given
should have to training for proper use of
reduce its credit equipments and materials
period so as to avoid damages
CONCLUSION
 The company has improved its

performance very well as compared
to its previous year’s ratios.
Escorts is still in backward position if compared it

with Mahindra & Mahindra and VST Tillers.
►continuous improvement of Escorts is also giving them a

tougher competition and will definitely acquire a better position
in the future.
Time To Ask
Questions….!!!

Project Report On Escort Tractors

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Estimation of Financial Strength of Escorts.

Presented to: Presented by:

Mr. Sunil Buddhiraja, Narender Dagar,

To evaluate current performance of the company and

To make a comparison of Escorts

To assess the long-term and short-

To find out various reasons which

Two methods are adopted to

the financial position

In 1965, the company rolled

1996, Escorts Tractors Ltd.

The extent to which

Balance Sheet Annul

CURRENT AND QUICK RATIO:-

 Equations for regression line or trend line using time

 The company has improved its

Escorts is still in backward position if compared it

►continuous improvement of Escorts is also giving them a

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