Corporate Accounting (COA301-3N)

CIA - III

Made by:
Hammad (23214208)
Harish.G (23214209)
C. Malsawmtluanga (23214231)
Jithu Emmanuel Joshy (23214241)

Under the guidance of-

DR.BHUPENDRA SINGH HADA SIR

Date of submission: 24/10/2024

 Maruti Suzuki

Although the name Maruti Suzuki India Limited (MSIL) is frequently a mouthful, the
Japanese carmaker Suzuki Motor Corporation's Indian division has gained greater
reputation in Asia for its compact cars. It is an Indian automaker that specializes in
compact vehicles.

In February 1981, the Indian government established the business as Maruti Udyog
Limited, a joint venture with Suzuki, the first Japanese automaker to invest in India. An
image of the Manesar plant In 1982, Maruti opened its first manufacturing plant in
Gurugram, Haryana. When Maruti was first founded by order in 1982, Suzuki only had a
26% stake, and the Indian government was one of its largest shareholders—company in
2007.

Maruti Suzuki has two manufacturing plants in Haryana (at Gurugram and Manesar). At
the same time, a completely owned facility by parent company Suzuki, located at Gujarat
takes care of the complete production throughput to Maruti27 Jun2019.UTC. The
proposed production facilities have a cumulative capacity to produce 2,250,000 units
annually (1.5 million from Maruti Suzuki's two plants and another one million in the
multi-year agreement with SMG).

This service began as a client add-on, so it was easy to expand and could be used quickly.
Since its founding, they have sold more than two million insurance products as of
December 2005.
PROFIT AND LOSS

Profit and Loss 2021 2022 2023

Sales 70,372 88,330 118,410

Expenses 64,961 82,578 105,288

Operating Profit 5,411 5,752 13,122

OPM% 8% 7% 11%

Other Income 3,046 1,861 2,415

Interest 102 127 252

Depreciation 3,034 2,789 4,846

Profit before Tax 5,321 4,697 10,438

Tax% 18% 17% 21%

Net Profit 4,389 3,880 8,264

EPS in Rs. 145.3 128.43 273.56

Dividend Payout% 31% 47% 34%

BALANCE SHEET

Balance Sheet 2021 2022 2023

Equity Capital 151 151 157

Reserves 52,350 55,182 74,443

Borrowings 541 426 1,248

Other Liabilities 18,335 18,896 24,258

Total Liabilities 71,376 74,656 100,106

Fixed Assets 14,989 13,747 17,941

WIP 1,497 2,936 4,143

Investments 42,945 42,035 49,184

Other Assets 11,946 15,937 18,837

Total Assets 71,376 74,656 100,106

CASH FLOW

Cash Flows 2021 2022 2023

Cash from 8,856 1,840 10,815

Operating Activity

Cash from Investing -7,291 -239 -8,820

Activity

Cash from -1,545 -1,607 -1,214

Financing Activity

Net Cash Flow 20 -6 780

SOLVENCY RATIO

Year 2021 2022 2023

Debt To Equity 0.956 0.69 1.97

Interest Coverage 51.61 36.82 56.2

Shareholder Equity 73.65 74.12 73.04

Ratio

Short Term Debt to 0.931 0.69 1.97

Equity Ratio

MARKET BASED RATIOS

Year 2021 2022 2023

EPS 140.02 124.68 266.46

Price Earnings 50 50 33.33

Ratio

EFFICIENCY RATIO

Year 2021 2022 2023

Inventory Turnover 23.06 12.07 11.94

Ratio

Asset Turnover 100.37 1.23 1.5

Ratio
PROFITABILITY RATIO

Year 2021 2022 2023

Operating Margin% 3.15 3.16 6.97

Net Margin% 6.24 4.39 6.98

ROE% 8.36 7.01 13.29

ROCE% 9.52 8.09 16.3

LIQUIDITY RATIO

Year 2021 2022 2023

Current Ratio 1.15 0.99 0.58

Quick Ratio 0.96 0.78 0.36

1. Trend Analysis:
Over the three year period, Maruti Suzuki continued to grow in terms of sales. From 2021
to 2022, sales increased from ₹70,372 Cr to ₹88,330 Cr, an increase of 25.54%. In 2023,
sales grew further with a jump of 34.09% to ₹118,410 Cr. Net profit, however, was down
11.6 percent in 2022 compared with ₹4,389 Cr in 2021, dipping to ₹3,880 Cr, probably
because of higher expenses. In 2023 the company made a strong rebound with net profit
growing by 112.9% to ₹8,264 Cr. Similarly, OPM declined slightly from 8% in 2021 to
7% in 2022, but improved greatly to 11% in 2023. This pattern also showed up in the
company’s EPS, which more than doubled from ₹128.43 in 2022 to ₹273.56 in 2023.
The trend analysis indicates strong sales and profit growth in 2023 after a difficult 2022.
2. Horizontal and Vertical Analysis:
Horizontal Analysis:
During the three year period the company experienced substantial growth in key financial
areas. From 2021 to 2022 sales increased by 25.54%, and from 2022 to 2023 sales
increased by 34.09%. However, these operating expenses also increased steadily,
growing 27.1% from 2021 to 2022 and 27.51% from 2022 to 2023. However, in 2022 net
profit declined by 11.6% as a result, but in 2023 net profit rebounded 112.9%. Operating
profit margin increased substantially from 7% in 2022 to 11% in 2023.
Vertical Analysis:
The company’s operating profit margin (OPM) was 8% in 2021, 7% in 2022, 11% in
2023, and analyzed as percentages of sales. Also, the net profit margin had a similar trend
where the 6.24% in 2021 fell down to 4.39% in 2022 and then increased to 6.98% in
2023. This shows the company’s ability of cost control and pricing strategies in 2023
which have improved the company’s better profitability.

3. Cash Flow Analysis:

Over the three years, Maruti Suzuki’s cash flows varied. In 2021, cash flow from the
operating activities was strong to the tune of ₹8,856 Cr while in 2022, it declined sharply
to ₹1,840 Cr, which may introduce market considerations faced by revenues from
operations in this period. But 2023 was a big recovery, with operating cash going as high
as ₹10,815 Cr. Investing activities continued to generate negative cash flows of ₹-7,291
Cr in 2021 and an increase to ₹-8,820 Cr in 2023, reflecting investments in assets or
expansion. Financing activities continued to exhibit consistent outflows which were
slightly lower from ₹-1,545 Cr in 2021 to ₹-1,214 Cr in 2023. In 2021 the net cash flow
was positive It dipped slightly to ₹-6 Cr in 2022, however, before bouncing back to ₹780
Cr in 2023. Improved profitability and operational efficiency are behind the substantial
increase in 2023 cash from operations, while the still negative cash flow from investing
indicates the company is investing heavily in growth — through capacity expansion, or
through asset acquisition. These are stable financing cash outflows, which indicate
controlled debt repayment, or dividend distributions. But the high level of investments
means Maruti Suzuki’s cash flow health is positive overall, although the level of liquidity
and return on investment should be monitored closely.
 TATA MOTORS
Tata Motors Limited, a part of the Tata Group, is an Indian multinational automotive
company with its headquarters in Mumbai. The company manufactures a wide range of
vehicles including cars, trucks, vans, and buses.

Among its subsidiaries are British Jaguar Land Rover and South Korean Tata Daewoo.
Tata Motors also has joint ventures with Hitachi (Tata Hitachi Construction Machinery)
and Stellantis, which produces vehicle parts for Fiat Chrysler and Tata-branded vehicles.

Tata Motors has manufacturing and vehicle plants in various locations such as
Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad, and Pune in India, as well as in
Argentina, South Africa, the United Kingdom, and Thailand. The company also has
research and development centers in multiple locations including Pune, Jamshedpur,
Lucknow, Dharwad, India, South Korea, the United Kingdom, and Spain. Tata Motors is
listed on the BSE and NSE, and is a constituent of the BSE SENSEX and NIFTY 50
benchmark indices. As of 2019, it is ranked 265th on the Fortune Global 500 list of the
world's biggest corporations.

Tata Motors Cars is a division of Tata Motors that focuses on producing passenger cars.
The company is a prominent player in the Indian passenger vehicle market, offering
products in the compact, midsize car, and utility vehicle segments.
The company's manufacturing facilities are located in Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Dharwad
(Karnataka), and Sanand (Gujarat). Tata's extensive dealership, sales, service, and spare
parts network comprises over 3,500 touchpoints. With more than 250 dealerships in over
195 cities across 27 states and four Union Territories of India, Tata Motors boasts the
third-largest sales and service network in the country, following Maruti Suzuki and
Hyundai.
Key Milestones

1. 1945: Founded as Tata Engineering and Locomotive Company (TELCO)

2. 1954: Started producing trucks
3. 1991: Launched India's first indigenously developed passenger car, Tata Sierra
4. 2004: Acquired Daewoo Commercial Vehicle Company, South Korea
5. 2008: Acquired Jaguar Land Rover (JLR) from Ford Motor Company
6. 2010: Launched Tata Nano, the world's cheapest car
7. 2015: Launched Tata Hexa and Tata Tiago

Business Segments

1. Passenger Vehicles: Tata Motors produces a range of passenger vehicles, including

hatchbacks, sedans, SUVs, and electric vehicles.
2. Commercial Vehicles: Tata Motors manufactures trucks, buses, and construction
equipment.
3. Jaguar Land Rover (JLR): Luxury vehicles, including Jaguar and Land Rover brands.
4. Electric Vehicles: Tata Motors offers electric versions of its passenger vehicles.
PROFIT AND LOSS

Profit and Loss 2021 2022 2023

Sales 249,795 278,454 345,967

Expenses 217,507 253,734 314,151

Operating Profit 24,720 24,720 31,816

OPM% 13% 9% 9%

Other Income -11,118 2,424 6,664

Interest 8,097 9,312 10,225

Depreciation 23,547 24,836 24,860

Profit before Tax -10,474 -7,003 3,394

Tax% 24% 60% 21%

Net Profit -13,395 -11,309 2,690

EPS in Rs. -40.51 -34.46 7.27

Dividend Payout% 0% 0% 32%

BALANCE SHEET

Balance Sheet 2021 2022 2023

Equity Capital 766 766 766

Reserves 54,481 43,795 44,556

Borrowings 142,131 146,449 134,113

Other Liabilities 144,193 138,051 155,239

Total Liabilities 341,570 329,061 334,674

Fixed Assets 138,708 138,855 132,080

WIP 20,964 10,251 14,274

Investments 24,620 29,380 26,278

Other Assets 157,278 150,575 161,941

Total Assets 341,570 329,061 334,674

CASH FLOW

Cash Flows 2021 2022 2023

Cash from 29,001 14,283 35,388

Operating Activity

Cash from Investing -25,672 -4,444 -15,417

Activity

Cash from 9,904 -3,380 -26,243

Financing Activity

Net Cash Flow 13,232 6,459 -6,272

SOLVENCY RATIO

Year 2021 2022 2023

Debt to Equity% 247.47 313.49 84.44

Short Term Debt to 39.21 94.08 37.5

Equity%

Interest Coverage% -0.294 0.248 -2.2

Shareholder Equity 16.1 13.48 36.38

Ratio%

MARKET BASED RATIOS

Year 2021 2022 2023

EPS -6.59 -3.63 7.11

Price-Earning Ratio -50 -100 50

EFFICIENCY RATIO

Year 2021 2022 2023

Inventory Turnover 4.54 7.66 12.52

Ratio

Asset Turnover 0.47 0.73 1.05

Ratio

PROFITABILITY RATIO
Year 2021 2022 2023

Operating Margin% 0.258 -3.39 2.67

Net Margin% -5.38 -4.11 0.698

ROE% -25.35 -25.68 10.74

ROCE% -1.28 1.28 -62.41

LIQUIDITY RATIO

Year 2021 2022 2023

Current Ratio 0.6 0.58 0.45

Quick Ratio 0.43 0.44 0.33

Trend Analysis:
The revenue of Tata Motors was increasing steadily in the past three years, from
₹249,795 Cr in 2021 to ₹278,454 Cr in 2022 and to ₹345,967 Cr in 2023, which is a
healthy growth of around 23.7% in 2023. But operating profit in 2021 and 2022 was
relatively stable at ₹24,720 Cr, and increased to ₹31,816 Cr in 2023. However, the
operating profit margin (OPM) fell from 13% in 2021 to 9% in 2022 and 2023, implying
the increasing cost and the loss of operational efficiency. However, net profit had a
difficult path, showing losses in 2021 and 2022, but a big rebound in 2023 with ₹2,690
Cr net profit. From negative values (₹40.51 in 2021; ₹34.46 in 2022) to ₹7.27 in 2023,
the EPS shows its turnaround to a positive value.

2. Horizontal and Vertical Analysis:

Horizontal Analysis:
Sales increased 11.47% from 2021 to 2022 and 24.23% from 2022 to 2023,
demonstrating a continuous growth of the market share and demand. Unfortunately, these
expenses also skyrocketed to 16.67% from 2021 to 2022 and to 23.81% from 2022 to
2023 from their previous level, which naturally had an impact on the operating profit
margins. However, financial performance of the company has improved overall as it
reported a net loss of ₹13,395 Cr in 2021, a loss of ₹11,309 Cr in 2022, but a net profit
of ₹2,690 Cr in 202
Vertical Analysis:
In 2021, expenses were approximately 87.1 percent of total sales. The percentage grew
slightly in 2022, but in 2023 it stayed around 91 percent, indicating that operational
efficiency has been a problem even as revenue has grown. Pressure was brought on net
profitability as the company’s interest expenses steadily increased from ₹8,097 Cr in
2021 to ₹10,225 Cr in 2023. Operating margins declined from 13% in 2021 to 9% in
2022 and 2023, suggesting the need for better cost management. The equity base
continued to be stable on the balance sheet, total liabilities fluctuated slightly, and
borrowing levels remained high in 2023 but decreased.
3. Cash Flow Analysis:
The three years showed a volatile cash flow pattern exhibited by Tata Motors. However,
cash from operating activities fluctuated, but remained strong, at ₹29,001 Cr in 2021,
₹14,283 Cr in 2022, and ₹35,388 Cr in 2023. Investing activities resulted in a
consistently negative cash flow from investing activities, with ₹-25,672 Cr in 2021 to ₹-
15,417 Cr in 2023, indicating that cash continues to be invested in capital assets / other
ventures. On the financing side, Tata Motors had positive cash flows in 2021 ( ₹9,904 Cr)
but then turned into huge outflows in 2022 and 2023 due to debt repayments or dividend
distributions. The net cash flow followed a downward trend, from ₹13,232 Cr positive
cash in 2021, to ₹6,459 Cr in 2022 and to ₹-6,272 Cr in 2023. Overall, operating cash
flow improved significantly in 2023, however investments and debt management
continue to affect liquidity.
 SUMMARY
Maruti Suzuki sales growth were strong from 2021 to 2023, were sales reaching
approximately ₹118,410 Cr and Net Profit increased by 112.9% in 2023 after a drop in
2023. Suzuki's profit margin raised to 11%, showing a good cost control and efficiency.
On the other hand, Tata motors reported losses in 2021 and 2022 before making a
₹2,690 Cr profit in 2023 with having a consistent growth in revenue. Tata's cash flow
remained unstable because of investments and debt management.

References:-

1) https://www.screener.in/company/MARUTI/consolidated/
2) https://www.screener.in/company/TATAMOTORS/consolidated/
3) https://www.moneycontrol.com/india/stockpricequote/auto-carsjeeps/
marutisuzukiindia/MS24
4) https://www.moneycontrol.com/india/stockpricequote/auto-lcvshcvs/tatamotors/
TM03