VALUE MANAGEMENT SOLUTIONS

Pvt . Ltd Session :- 2020-2023

SUMMER INTE8RNSHIP PROJECT

(08/08/2022 –24/09/2022)

SARLA BIRLA UNIVERSITY, RANCHI

Name : Satyam Kumar Mehta

Roll No. : BBAX20R140
Enrolment No. : SBU200488
Branch : BBA (B)
Semester :4
CERTIFICATE FROM THE GUIDE
This is to certify that this project report on “FINANCIAL ANALYSIS OF A
COMPANY” is based on an original project study conducted by Mr/Miss
___________, bearing Roll no ___________, under my guidance.

____________________
(Signature of the guide)

Place :

Date :
Prof. ___________
Department of commerce and Management
SARLA BIRLA UNIVERSITY
 DECLARATION BY THE STUDENT

I hereby declare that this Project Report on “Financial Planning Of An Individual” has been
prepared by me during the month of JULY 2022 under the guidance of ________________,
Assistant Professor, Department Of Commerce And Management of Sarala Birla
University, Ranchi.

I also hereby declare that this project report is an original work and has not been
submitted at any time to any other university or institute for the award of any degree or
diploma.

Place : Signature :

Date :
 Acknowledgement

I express my sincere thanks to Prof. Sandeep Kumar, Dean, Department of Commerce and
Management for his valuable suggestions and help in preparing this project report.
I express my deep sense of gratitude to my guide Prof. Rashi Malpani, Assistant Professor
Department Of Commerce And Management , Sarala Birla University for her valuable
guidance in this endeavour. She has been a constant source of inspiration and I sincerely
thank her for her suggestions and help in preparing this report. Finally, I express my sincere
thanks and gratitude to the respondents who helped me to complete my field work without
whose help this project report would not have been possible.

Place : __________ Signature :__________

Date : __________
 Executive Summary

In any organisation the two important financial statements are the Balance
Sheet and Profit and Loss Account of the business. Balance Sheet is a statement of
financial position of an enterprise at a particular point of time. Profit and Loss account
shows the net profit or net loss of a company for a specified period of time.
When these statements of the last few years of any organisation are
studied and analysed significant conclusions may be arrived regarding the
changes in the financial position , the important policies followed and
trends in profit and loss etc. Analysis and interpretation of financial
statement has now become an important technique of credit appraisal. The
investors, financial experts, management, executives and the bankers all
analyse these statements. Though the basic
technique of appraisal remains the same in all the cases but the
approach and
emphasis in the analysis vary. A banker interprets the
f i n a n c i a l   s t a t e m e n t   s o   a s   t o evaluate the financial soundness and stability, the
liquidity position and the profitability o r   t h e   e a r n i n g   c a p a c i t y   o f   b o r r o w i n g
concern. 
A n a l y s i s   o f   f i n a n c i a l   s t a t e m e n t s   i s necessary because it helps in
depicting the financial position on the basis of past and current records.
Analysis of financial statements helps in making the future decisions and strategies.
Therefore it is very necessary for every organisation whether it is a financial or
manufacturing to make financial statement and to analyse it.
Table of Contents
 Introduction

Financial analysis refers to the process of analysing a business' various finances

to evaluate its financial stability and future. Financial analysis helps business
owners determine any necessary courses of action they'll need to take to stay
afloat, make a profit or avoid bankruptcy. It also helps investors decide whether
they will invest in your business. During this process, financial statements such
as balance sheets and income statements are analysed.

Companies use financial analysis both internally and externally. Internally, they
analyse their financial status to improve future decisions that could be beneficial
or adjust their budgets accordingly. Externally, a company uses various types of
financial analyses for investment. In other words, analysts evaluate a company's
finances to determine whether they'd make a worthwhile investment. Investors
can even analyse a company's past performance to predict future performance.
This is considered a bottom-up approach.

There are various techniques to perform financial analysis and evaluate the
performance of the company in comparison with its competitors or growth of
the company over the years . For corporate finance, the accounting department
performs the research internally and shares it with management to enhance
company decision-making. This form of internal analysis can involve ratios,
such as Net Present Value (NPV) and Internal Return Rate (IRR), to identify
projects worth carrying out. There are three significant financial statements that
every company needs to maintain. –  balance sheet, income statement, and cash
flow statement. This financial statements are used for financial analysis of the
organisation .
Within the general scope of financial analysis, there are several types to
consider. Here are seven types of financial analysis:
 Vertical Analysis
In vertical financial analysis, the relationship between various items on a
financial statement is analysed. For example, during one accounting period, one
item is measured against another item that's considered the base and the
relationship is expressed as a percentage. Though it only accounts for one time
period, it can help you recognize any changes over time and compare various
entities.

 Horizontal Analysis
Horizontal analysis refers to the evaluation of how financial statement figures
change over a period. In other words, it compares one item to another in a
different time period. Because of this, it can help analyse a business' finances
from one year to the next. Horizontal analysis is also known as dynamic
analysis or trend analysis, the latter being because this form of analysis can be
useful in spotting trends over time.

 Profitability Analysis
In a profitability analysis, a company's rate of return is evaluated. Every
business wants to be profitable, therefore, using the profitability analysis to
measure its cost and revenue in a given period can be highly beneficial for
them. If a company's revenue outweighs its costs, it's considered profitable.
Profitability ratios—both margin and return ratios—are used in this type of
analysis.
 Scenario and Sensitivity
During this type of analysis, an investment's value is measured based on current
scenarios and changes. For example, it analyses how variable A is affected
based on changes and sensitivities in other variables such as variable B or C.
Scenario and sensitivity analysis can even help analysts predict certain
outcomes based on different variables. They do so by studying the various
variable effects based on prior data and then making informed decisions based
on their findings.
 RESEARCH METHODOLGY

General Objective
The general objective of the
study is to analyze the
performance of private
commercial banks in
Ethiopia and to rank the
respective private
commercial banks based on
their performances.
Primary Objective –
The objective of this study is to analyse the financial position of Tata Motors
and its competitors using key financial ratio .
Secondry Objective –
To study the automobile industry and its current trend .
To ascertain the financial position of Tata Motors and its Competitors using
ratio analysis .
To provide measures and suggestions
Methods of analysis –
Methods of analysis includes vertical and horizontal analysis using the financial
ratios of the company such as profitability ratio and liquidity ratio.
Financial Analysis
On
Tata Motors
And
Its competitors
 Company Profile : Tata Motors Ltd

Tata Motors Limited is regarded as one of the leading automobile company globally ,
which manufactures cars ,utility vehicles ,trucks buses and defence vehicles.
It is a part of the USD113 billion Tata group founded by Jamsetji Tata in 1868, Tata Motors
is among the world’s leading manufacturers of automobiles. The company believe in
‘Connecting aspirations’, by offering innovative mobility solutions that are in line with
customers' aspirations. Its diverse portfolio includes an extensive range of cars, sports utility
vehicles, trucks, buses, and defence vehicles. Tata Motors is one of India's largest OEMs
offering an extensive range of integrated, smart, and e-mobility solutions
Tata Motors has operations in the UK ,South Korea, Thailand ,South Africa and Indonesia
through a strong global network of 76 subsidiary and associate companies including Jaguar
Land Rover in the UK and Tata Daewoo in South Korea. In India Tata Motors is a market
leader in commercial vehicles and among the top passenger vehicles manufacturers with 9
million vehicles on Indian roads. With design and R&D centres located in India the UK Italy
and Korea Tata Motors strives to pioneer new products that fire the imagination of GenNext
customers.
In Forbes world’s best regarded companies Tata Motors stood 31st out of 2000 and was
ranked fifth among the global auto manufactures . The company received Auto Expo Car Car
and Bike Award . Also received The Economic Times Polymer award 2020 Annual
convention.

A worldwide and diversified portfolio of cars , sports utility vehicles ,trucks , buses and
defence vehicles are offered by the company. They operate in India, the UK ,China ,South
Africa ,Brazil ,Austria and Slovakia , Including a joint venture with Jaguar Land Rover , Uk
and Tata Daewoo ,South Korea they have strong global network of subsidiaries and
associates .

.
 COMPETITIORS OF TATA MOTORS

Mahindra & Mahindra ltd

Mahindra &Mahindra Ltd ,which is the flagship company of Mahindra group is
manufacture SUVs to electric vehicles , pickups ,commercial vehicles , tractors ,two -
wheelers and construction equipment .Their exports started started in 1960s ,their
vehicles and tractors can be found all over the world.

When the brand came into existence, it was called Muhammad and Mahindra. The company
was formed by J.C. Mahindra; K.C. Mahindra and Malik Ghulam Muhammad in Ludhiana,
Punjab with an objective of trading steel. Mahindra & Mahindra was set up as a steel trading
company in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra
and J.C. Mahindra and Malik Ghulam Mohammed. 

After India gained independence and Pakistan was formed, Mohammed emigrated to

Pakistan. The company changed its name to Mahindra & Mahindra in 1948. It eventually saw
business opportunity in expanding into manufacturing and selling larger MUVs, starting with
assembly under licence of the Willys Jeep in India.
Soon established as the Jeep manufacturers of India, the company later commenced
manufacturing light commercial vehicles (LCVs) and agricultural tractors. Today, Mahindra
& Mahindra is a key player in the utility vehicle manufacturing and branding sectors in
the Indian automobile industry with its flagship UV Scorpio and uses India's growing global
market presence in both the automotive and farming industries to push its products in other
countries.
Mahindra &Mahindra Limited collaborated with Ford Motor Company for
developing ,marketing and distributing Ford Brand vehicles in India and Mahindra
automobiles in highly-growing markets around the globe . France -based Peugeot
Motorcycles was fully acquired by the Mahindra and Mahindra Two wheelers Europe .
The Company won the Golden Peacock Global Award for Excellence in Corporate
Governance for 2019. The Mahindra & Mahindra Automotive and Farm Equipment Sectors
were recognised among India Top’s 50 Best Companies to work for 2019 and among India’s
Best Workplaces in Manufacturing 2020.
Maruti Suzuki ltd
India’s largest passenger auto company is Maruti Suzuki India ltd, formerly also
known as Maruti Udyog Ltd which is accounting more than % of the domestic
auto market.

India’s largest passenger car company is Maruti Suzuki was started back on February 24,
1981, to manufacture cars for middle-class Indians. The company was formed as a
government company, incorporated as Maruti Udyog Ltd. with Suzuki as its minor partner.
Maruti Udyog then signed the license and joint venture agreement with Suzuki Motor
Corporation, Japan, on October 2, 1982, which began the start of the long-lasting and
successful partnership.

The company started its productions in 1983, which then came to be the choice of every
Indian household. The first car it launched was Maruti 800. It was affordable back then and
was thus incredibly popular. This model of Maruti is still considered to be a Maruti classic to
date. Although the journey of Maruti Suzuki India Ltd. started off in a very different way.

In the fiscal year there was an overall volume decrease of 16.1% in the company since
there was weak domestic and export markets .A nationwide shutdown of economic
activities was faced due to the outbreak of covid-19 in the later part of the year
2020.During the year the network was expanded bybadding 250service workshop whi h
was noted as the highest ever in a financial year resulted in 3864 workshops over 1914
cities in the country.
 RATIO ANALYSIS

Ratio analysis is a quantitative method of gaining insight into a company's

liquidity, operational efficiency, and profitability by studying its financial
statements such as the balance sheet and income statement. Ratio analysis is a
cornerstone of fundamental equity analysis.

Investors and analysts employ ratio analysis to evaluate the financial health of
companies by scrutinizing past and current financial statements. Comparative
data can demonstrate how a company is performing over time and can be used
to estimate likely future performance.

This data can also compare a company's financial standing with industry
averages while measuring how a company stacks up against others within the
same sector.

 Ratio analysis compares line-item data from a company's financial

statements to reveal insights regarding profitability, liquidity, operational
efficiency, and solvency.
 Ratio analysis can mark how a company is performing over time, while
comparing a company to another within the same industry or sector.
 Ratio analysis may also be required by external parties that set benchmarks
often tied to risk.
 While ratios offer useful insight into a company, they should be paired with
other metrics, to obtain a broader picture of a company's financial health.
 Examples of ratio analysis include current ratio, gross profit margin ratio,
inventory turnover ratio.
 Ratio Analysis
Of
Tata Motors Ltd
BALANCE SHEET OF TATA MOTORS
PROFIT AND LOSS STATEMENT OF TATA MOTORS
 Balance Sheet Ratio of Tata Motors

Ratios MARCH 22 MARCH 21 MARCH 20

Current Ratio 0.58 0.60 0.53

Quick Ratio 0.44 0.43 0.38

Inventory Turnover 7.66 4.54 11.46

Ratio
Asset Turnover 0.73 0.47 70.18
Ratio

Profit and Loss Ratios of Tata Motors

Ratios MARCH 22 MARCH 21 MARCH 20

PBDIT(%) 4.56 6.21 1.66

Net Profit Margin -2.94 -7.93 -16.59

(%)
Return on Net -6.97 -12.57 -39.64
worth (%)
Return on Capital 1.07 0.37 -7.18
Employed (%)
Return of -2.17 -3.68 -11.68
Assets(%)
 PBDIT(%)- The PBDIT margin is 4.86 for the year 2021-22 . This ratio
measures the number of times the company can make interest payment on its
debts with its earning. A PBDIT ratio of more than two is considered good
for the investors or the lenders

 Net Profit Margin (%) – The Net profit Margin is in negative for last three
years . It means that the money the company make from selling products
or services is not enough to cover the cost of making or selling those
products or services.

 Return on Net worth (%) – The Return on Net Worth is last three years .It
shows whether or not the company is efficient enough to grow its net worth
every year for the future growth potential of the company. The company has
a low return which implies which shows less efficient use of shareholders
fund by the company.

 Return on Capital Employed (%)-  ROCE is a financial ratio that shows if a

company is doing a good job of generating profits from its capital. The
ROCE of the company is significantly lower than 23%b which is below
average in the auto industry. this could mean that the company is not
utilising its capital efficiently.

 Return of Assets (%)-Return on assets (ROA) is an indicator of how

profitable a company is relative to its total assets. The company ROA is in
negative for the year implies that the company isn’t able to acquire or utilize
its assets sufficiently enough to generate a profitable return.

 Current Ratio - The current ratio is less than 1 for the last three years . A
current ratio of less than 1 means the company may run out of money within
the year unless it can increase its cash flow or obtain more capital from
investors. A company with a high current ratio has no short-term liquidity
concerns, but its investors may complain that it is hoarding cash rather than
paying dividends or reinvesting the money in the business.
 Quick Ratio – The quick ratio is less than 1 for the year last three years. The
quick ratio is less than 1, it means that the company does not have enough
liquid assets to be used to repay the current liabilities. 

 Inventory Turnover Ratio – The inventory turnover ratio is less for last three
years. A high inventory turnover generally means that goods are sold
faster, and a low turnover rate indicates weak sales and excess inventories,
which may be challenging for a business.

 Asset Turnover Ratio – The asset turnover ratio for the year 2022 and 2021
is less than 1. If the ratio is less than 1, then it’s not good for the company as
the total assets cannot produce enough revenue at the end of the year.
 Ratio Analysis
Of
Mahindra and Mahindra
BALANCE SHEET OF MAHINDRA AND MAHINDRA LTD
PROFIT AND LOSS STATEMENT OF MAHINDRA AND MAHINDRA
 BALANCE SHEET RATIO OF MAHINDRA AND MAHINDRA

Ratios March 2022 March 2021 March 2020

Current Ratio 1.38 1.34 1.38

Quick Ratio 1.06 1.08 1.07

Inventory 8.23 11.39 13.38

Turnover Ratio
Asset Turnover 0.91 75.58 90.07
Ratio

PROFIT AND LOSS RATIO OF MAHINDRA AND MAHINDRA

Ratios March 2022 March 2021 March 2020

PBDIT(%) 15.87 17.15 16.41
Net Profit 8.59 0.59 2.92
Margin(%)
Return on Net 12.66 0.77 3.86
Worth(%)
Return on 13.80 12.35 13.26
Capital
Employed(%)
Return on Assets 7.35 0.45 2.60
(%)
 Current Ratio – The current ratio of the company for last three years
is above 1. This indicates that the company has enough liquid funds
to settle its short term liabilities .

 Quick Ratio- The quick ratio of the company for last three year is
above 1.This indicated that company has enough quick assets in its
possession which can be easily liquidated for paying off its current
liabilities .

 Inventory Turnover Ratio – The inventory turnover ratio for last

three years has been high which means that the speed at which the
company can sell inventory is at slow pace ,maybe the demand for
the product is low.

 Asset Turnover Ratio- The asset turnover ratio is higher in the year
2021 and 2020 which indicates that the company is more efficient at
generating revenue from its assets. In the year 2022 the asset turnover
ratio is less than 1. If the ratio is less than 1, then it’s not good for the
company as the total assets cannot produce enough revenue at the end of
the year.

 PBDIT Ratio -This ratio measures the number of times the company can
make interest payment on its debts with its earning. The company PBDIT
ratio is stable over the years which shows that company profit are stable.

 Net Profit Margin (%) – The Net profit Margin is low for the year 2020
and 2021 which can be the result of covid -19 pandemic. The decline can
be majorly from increase in payment of expense and miscellaneous
expenses.

 Return on Net worth (%) – It shows whether or not the company is

efficient enough to grow its net worth every year for the future growth
 potential of the company. The company Return on net worth is low for
the year 2020 and 2021 which implies less efficient use of shareholders
fund by the company.

 Return on Capital Employed (%)-  ROCE is a financial ratio that shows

if a company is doing a good job of generating profits from
its capital. The ROCE of the company is high which implies that the
company has utilised its financial resources efficiently.

 Return of Assets (%)-.  Return on assets (ROA) is an indicator of how

profitable a company is relative to its total assets. The company ROA is
more than 5%which is favourable for the investors as the company was
using its assets effectively to generate more net income .
COMPARITIVE ANALYSIS OF TATA MOTORS AND MAHINDRA
AND MAHINDRA

 Tata Motors Ltd recorded a revenue of Rs 249,795 Cr in FY21 whereas

M&M reported a total of Rs 74,278 Cr in the same year. 

2017 2018 2019 2020 2021

Mahindra 83,773 92,094 104,721 75,382 74,278
&Mahindra
(Revenue 10.46% 9.93% 13.71% -28.02% -1.46%
 growth in
%)
Tata 269,693 291,550 301,938 261,068 249,795
Motors Ltd
(Revenue -1.23% 8.10% 3.56% -13.54% -4.32%
growth in
%)

 The 3-year average ROE for Tata motors is negative 25.77% because the
company has been making losses for the last 3 years. M&M’s ROE has
been positive for the last three years with an average of 3.11%.

 The three years average ROCE for M&M is 8.17% and that of Tata
Motors is -5.93% due to negative earnings.

2017 2018 2019 2020 2021

Return on
Equity (ROE)
Mahindra 11.28 20.74 12.19 -3.43 0.57
&Mahindra
Tata Motors 8.85 8.88 -37.19 -17.94 -22.17
Return On
Capital
Employed
(ROCE)
Mahindra & 12.42 15.43 12.31 5.68 6.52
Mahindra
Tata Motors 9.51 9.87 -14.61 -1.92 -1.27

 The P/E ratio can be negative if the company has posted a loss for the
financial year. That is the reason why Tata motors have had a ratio of 0
over the last 3 years. On the other hand, M&M has a high P/E ratio of
48.71.

 The P/B ratio establishes a relationship between the market cap of the
company and the value of its total asset. A lower ratio is considered ideal
by the investors.
 2017 2018 2019 2020 2021
Price to
Earnings
Ratio
(PE)
Mahindra 18.82 10.71 13.75 248.69 48.71
&
Mahindra
Tata 21.23 12.37 0 0 0
Motors

Price to Book 2017 2018 2019 2020 2021

Value(P/B)
Mahindra and 2.36 2.2 1.84 0.8 2.14
Mahindra
Tata Motors 2.73 1.17 0.98 0.41 2.09
EV/EBITDA
Mahindra and 9.92 9.36 8.3 9.51 12.47
Mahindra
Tata Motors 6.62 4.67 4.8 5.28 5.56
 SUGGESTIONS

Accounting ratios are useful to analyse a company’s performance. As they may

not show the actual financial position of a company, there may be many other
criteria’s for the declined and increase in the financial position of the company
depending on the global trend , the country’s economy.
Tata Motors should make efforts to strengthen its management platform for
better performance.

Tata Motors should speed up business expansion into rapidly emerging

countries by thoroughly and carefully checking market conditions in respective
regions and should introduce products which are suited to the needs of each
market.

Tata Motors should set up production and supply structures to receive

maximum product pricing and delivery and to enhance the value chain to
provide a wide range of customer services in each country and region.

Tata Motors should be more versatile to capture more customer range which
will help to increase its net sales.

Tata Motors should try to decrease its expenses and in turn increase their profit.
 BIBLIOGRAPHY

www.wikipedia.com
www.investopedia.com
www.moneycontrol.com
www.tradebrains.in
www.slideshare.com