A PROJECT REPORT SUBMITTED IN PARTIAL FULFILMENT OF REQUIREMENT FOR THE

DEGREE OF [Link]. HONOURS IN ACCOUNTING & FINANCE/MARKETING UNDER THE

UNIVERSITY OF CALCUTTA

AN ANALYTICAL STUDY ON THE

FINANCIAL PERRFORMANCE
ANALYSIS OF TATA MOTORS USING
RATIO ANALYSIS

Submitted by
NAME:ROHIT MAJEE
CU REGISTRATION NO:126-1112-0577-21
CU ROLL NO:211126-21-0886
COLLEGE ROLL:428 ,SECTION: F

Supervised by
SANJOY NAYAK
(Professor)

UMESHCHANDRA COLLEGE
Month & Year of Submission: May,2024

1
 ACKNOWLDGEMENT
It is a matter of great pleasure to present this
project on
“AN ANALYTICAL STUDY ON THE
FINANCIAL PERFORMANCE ANALYSIS
OF TATA MOTORS USING RATIO
ANALYSIS”

I take this opportunity to thanks our respected

Principal DR. MD. TOFAZZAL HAQUE for giving
me an opportunity to work on this field. I am
eagerly grateful to our Head of the Department Dr
without whom this project would not have been
successful one. I am very thankful to my
SUPERVISOR Dr. SANJOY NAYAK for his full
support in completing this project work.

Finally, I am grateful for the support of my family

and friends. Without their help and motivation, it
would have been impossible to complete this
project.

Rohit Majee
2
 6th Sem [Link](Hon)

Supervisor’s Certificate

This is to certify that Mr. ROHIT MAJEE a student

of [Link]. Honors in Accounting & Finance of
UMESHCHANDRA COLLEGE, KOLKATA under
the University of Calcutta has worked under my
supervision and guidance for her Project Work and
prepared a Project Report with the title “AN
ANALYTICAL STUDY ON THE FINANCIAL
USING RATIO ANALYSIS” which she is
submitting, is her genuine and original work to the
best of my knowledge.

PLACE: KOLKATA SIGNATURE:

DATE: NAME: Dr. Sanjoy Nayak
DESIGNATION:
Professor
COLLEGE NAME: Umesh
Chandra College

3
 Student’s Declaration

I hereby declare that the Project Work with the title

“AN ANALYTICAL STUDY ON THE FINANCIAL
PERMANCE ANALYSIS OF TATA MOTORS
USING RATIO ANALYSIS” submitted by me for the
partial fulfilment of the degree of [Link]. Honours
in Accounting & Finance under the University of
Calcutta is my original work and has not been
submitted earlier to any other University /
Institution for the fulfilment of the requirement for
any course of study.
I also declare that no chapter of this manuscript in
whole or in past has been incorporated in this
report from any earlier work done by others or by
me.
However, extracts of any literature which has been
used for this report has been.

PLACE: KOLKATA Signature:

DATE: Name: Rohit Majee

4
 Address: Girish
Park,
Kolkata-6

TABLE OF CONTENT
SCHEME OF WORK (CHAPTER
PLANNINNG)

CHAPTER-1
Page no.
INTRODUCTION TO THE PROJECT:
1.1 Background of the study.
7
1.2 Need of study
8
1.3 Literature Review 8-
10
1.4 Objectives of the study.
11
1.5 Scope of the study
11
1.6 Methodology used.
12
1.7 Limitations of the study.
13
CHAPTER-2

5
 CONCEPTUAL FRAMEWORK:
2.1 Definition,importance, limitations of
Financial Statement analysis.
14-17
2.2 Tools of financial statement analysis.
17
2.3 Definition,importance, and limitations
18-19
of Ration analysis.

CHAPTER-3
PRESENTATION OF DATA, ANALYSIS AND
FINDINGS:
3.1 Data Presentation 20-22
3.2 Data Analysis 23-44
3.3 Findings 44-46
CHAPTER-4
CONCLUSION AND RECOMENDATIONS
4.1 CONCLUSIONS
47
4.2 RECOMENDATIONS
47

CHAPTER-5
5.1 BIBLOGRAPHY
48
6
7
CHAPTER 1: INTRODUCTION OF
THE PROJECT

 BACKGROUND OF THE
PROJECT
Company performance is very essential to the
management as it is an outcome which has been
achieved by an individual or a group of individuals
in an organization related to its authority and
responsibility in achieving goal legally, not against
the law.
Finance is the life blood of any business. An
organization communicates the financial
information to the users through financial
statements and reports. There are two types of
performance of any business. Financial
performance and another one is non-financial
performance. Financial performance emphasizes
on items related directly to financial report. This
helps to present organization’s financial situation
to the users.

8
 NEED OF THE STUDY
Studying Tata Motors can provide insights into
various aspects of the automotive industry,
including market trends, competition analysis,
technological advancements, and strategic
decisions. It can be valuable for investors,
researchers, business analysts, and enthusiasts
alike to understand the company's performance,
growth potential, and its impact on the broader
economy.

LITERATURE REVIEW:
A literature review on Tata Motors would delve into
various aspects of the company, including its
history, performance, strategies, challenges, and
future prospects. Here's a structured approach to
conducting a literature review on Tata Motors:

Introduction to Tata Motors:

9
Provide an overview of Tata Motors, including its
founding, evolution, and current standing in the
automotive industry.
Highlight key milestones, such as mergers,
acquisitions, and strategic alliances that have
shaped the company's trajectory.
Financial Performance and Market Position:

Review scholarly articles, financial reports, and

industry analyses to assess Tata Motors' financial
performance and market position.
Analyze factors influencing the company's
revenue, profitability, market share, and
competitive advantage.
Product Portfolio and Innovation:
Examine literature on Tata Motors' product
portfolio, including passenger vehicles,
commercial vehicles, and electric vehicles.
Evaluate the company's innovation strategies,
such as R&D investments, technological
advancements, and product differentiation.
Global Expansion and Internationalization:
Explore how Tata Motors has expanded its
presence globally, including its entry into new

10
markets and strategic alliances with international
partners.
Assess the challenges and opportunities
associated with Tata Motors' internationalization
efforts.
Strategic Management and Corporate
Governance:
Investigate Tata Motors' strategic management
practices, including its vision, mission, values, and
corporate [Link] the company's
corporate governance structure, board
composition.

11
 OBJECTIVE OF THE STUDY
The main aim of the study is to prepare a five
years’ comparative ratio analysis of a car
manufacturing company naming “TATA MOTORS”.
This aim will be achieved by the following
objectives:-
 An overview of the performance of the
company TATA MOTORS for 5 years
 To provide recommendations of the company
in respect of liquidity, solvency, profitability use
of asset and capital structure.

SCOPE OF THE STUDY

 It is useful for the management.
 It gives information to the investors about the
earning capacity of the business
 With the help of Ratio Analysis comparison of
profitability and financial soundness can be
made.

12
 Current year’s ratios are compared with those
of previous years and if some weak spots are
located remedial measures are taken to
correct them.
 It gives information to the financial institution
for providing the finance to the company
 It gives information to the taxation authorities.
METHODOLOGY USED

 PRIMARY DATA: Data that has been collected

from first-hand-experience is known as
Primary Data. Primary Data has not been
published yet and is more reliable, authentic
and objective.
 SECONDARY DATA: Data collected from the
source that has already been published in any
form is called as Secondary Data. It includes
book, journals, periodicals, E-journal, general
websites and weblogs etc.
 METHODOLOGY USED: My Project is based
on Secondary Data to the current pandemic
situation it was not possible to visit anywhere
and collect data. I’ve collected all the
information digitally through different websites
and weblogs.

13
 In this project the Secondary Data are
collected from the following sources:-
 Annual Report i.e. Statement of Balance Sheet
and Income Statement of the particular
company.
 Text Books
 E-Books
 Other material and report published by the
company

LIMITATION OF THE STUDY

The study conducted and done is

analytical subject to following some
limitations.
 The study fully depends upon reliability of data
information collected from the secondary
source. It is not possible to collect the data on
all detailed activities taken place over the
years.
 The overall performance is taken into
consideration without taking into the account
of individual values.
 There may be some fractional differences in
the calculated ratios.

14
 Different definitions of capital employed may
cause confusion.
 Changes in external environment will affect the
comparison.
 Insufficient time available for the study and
submission of the project.
 Only the case study had been done for the
project and therefore, the conclusions drawn
based on this may not be reflection of the
entire industry.

15
CHAPTER 2: CONCEPTUALFRAMEWORK

 DEFINITION: Financial statements are

prepared primarily for decision making, But the
data reported in the financial statements are
not directly usable in decision making. They
need to be analyzed and interpreted. Financial
Statement Analysis is the process of
identifying the strength and weakness of an
organization by organization such as liquidity,
solvency, leverage effects and profitability of
the organization.

However, the Modern Financial Statement

Analysis is not only restricted to financial
statement but also it covers the study of
environment – both Internal and external of the
organization. Thus, Financial Statement
Analysis means the analysis of relevant
financial data included financial statements
along with non financial factors affecting the
firm such as competitive business
environment, customer reaction, risk involved,
employee ethics etc. On the basis of these all
such information the users predict its overall

16
 position and simultaneously take different
decisions.

Objective of Financial Statement

Analysis:
The main objectives of Financial
Statement Analysis are as follows-
 To evaluated the financial position of the
business.
 To assess the financial risk and business risk
associated with the business.
 To assess the short term as well as long term
solvency of the firm.
 To assess the operational efficiency and
managerial effectiveness with which various
resources of the firm are being utilized.
 To assess the earing capacity or profitability of
the firm.
 To identify the reasons for change in
profitability and financial position of the firm.
 To make inter firm comparison.
 To forecast the future prospect of the firm.
 To help in decision making and determine the
dividend.

17
 ADVANTAGES OF FINANCIAL STATEMENT
ANALYSIS

The different advantages of Financial

Statement Analysis are as follows-
 The most important benefit of Financial
Statement Analysis is that it provides an
idea to the investors about deciding on
investing their funds in a particular
company.
 Financial Statement Analysis is helpful to
the Government agencies in analyzing the
taxation owed to the firm.
 Liquidity i.e. short-term debt paying
capacity
 Above all, the company is able to analyze
its own performance over a specific time
periods.

 LIMITATIONS OF FINANCIAL STATEMENT

ANALYSIS:
Financial statement Analysis helps different
stakeholders of the firm evaluate its
performance and financial status. However,
this analysis is not free from some limitations.
These limitations are as follows

18
  Qualitative factors like efficiency of the
employees, sound organizational
structure, efficiency of management,
confidence of the customer etc. are not
considered in analysis of financial
statement but these have an outstanding
impact on financial results.
 Financial statements are prepared with
past events. So, they are historical in
nature. For this, it is not possible to reach
the perfect conclusion about future
prospects of the business through analysis
of these statements.

 TOOLS AND TECHNIQUES OF FINANCIAL

STATEMENT ANALYSIS
Following are the most important tools and
techniques of financial statement analysis:-
1. Comparative Financial Statement Analysis.
2. Common -Size Statement Analysis.
3. Trends Analysis.
4. Cash Flow Statement.
5. Fund Flow Statement.
6. Ratio analysis.
NOTE: FROM THE GIVEN TOOLS &
TECHNIQUES IN MY PROJECTS I HAVE
DCIDED TO WORK RATIO ANALYSIS. MY
19
PROJECT IS ABOUT RATIO ANALYSIS OF A
COMPANY NAMED “TATA MOTORS” UNDER
THE TOPIC FINANCIAL STATEMENT ANALYSIS.

RATIO AYALYSIS
 RATIO ANALYSIS: Ratio Analysis is the
process of identifying strength and weakness
in the various arears of an organization with
the help of ratios of relevant accounting
figures. Accounting Ratio is the mathematical
expression of relationship between two figures
and the expression may by either in the form
of pure ratio or rate or percentage. Financial
ratios help to arrive at the conclusion
regarding the profitability, liquidity, operating
efficiency and long term solvency of the
company.

 IMPORTACE OF RATIO ANALYSIS:

 Liquidity Position: With the help pf ratio

analysis can know he liquidity position of
the firm . We can know whether it is able
to meet its short term liabilities. This ability
is reflected in the liquidity ratios of the firm.
20
  Long Term Solvency: Ratio analysis is
useful to assessing the long term financial
position is concerned to the term creditors
, security analyst and present and
potential owners of a business. The long
term solvency is measured by leverage
ratios.
 Over-All Profitability: The management is
constantly concerned about the overall
growth in the enterprise. It to meet short
and long term obligations to creditors
 Trend Analysis: It shows whether the
financial position of the firm is improving or
deteriorating over the years. Significance
of trend analysis ratios lies in the fact to
know the direction of the financial position

 LIMITATIONS OF RATIO ANALYSIS:

 Differences in the basis of inventory valuation.

 Different depreciation methods.
 Estimated life of assets
 Amortization of intangible assets like goodwill,
Patents.
 Amortization of deferred revenue expenditure
such as preliminary expenditure and discount
on issue of shares.

21
22
 CHAPTER 3: DATA
PRESENTATION OF THE
COMPANY

 HISTORY:
Tata Motors, part of the Tata Group, is India's
largest automobile company. Its history is a
testament to visionary leadership and innovative
engineering. Established in 1945, Tata Motors
began with commercial vehicles and soon
expanded into passenger vehicles. In 2008, Tata
Motors made global headlines with the launch of
the Nano, touted as the world's cheapest car.
Now Tata Motors is also expanding in electric
vehicle market rapidly. It has the third-largest
sales and service network after Maruti
Suzuki and Hyundai.

23
 VISION
By FY24, tata motors aim to become the most
aspirational Indian automotive brand,
consistently winning by:
 Delivering superior financial returns
 Driving sustainable mobility solutions
 Exceeding customer expectations
 Creating a highly engaged workforce

 COMPANY POLICY: The Company offers

various type of vehicle such as cars, trucks,
vans, and busses. Tata Motors has vehicle
assembly operations in India, the United
Kingdom, South Korea, Thailand, Spain, and
South Africa. It plans to establish plants in
Turkey, Indonesia, and Eastern Europe. Tata
Motors has more than 250 dealerships in more
than 195 cities across 27 states and
four Union Territories of India.
Tata has dealerships in 26 countries across 4
continents. Tata is present in many countries,
it has managed to create a large consumer
base in the Indian subcontinent, namely India,

24
Bangladesh, Bhutan, Sri Lanka and Nepal.
Tata is also present in various country like:
Italy, Spain, Poland, Romania, Turkey, Chile,
Australia etc.
Currently it is dealing with passenger,
commercial, electric vehicles

25
STATEMENT OF PROFIT & LOSS
AND
STATEMENT OF PROFIT & LOSS

26
 TATA MOTORS
PROFIT & LOSS ACCOUNT OF TATA MOTORS (in Rs. Cr.) Mar 24 Mar 23 Mar 22 Mar 21 Mar 20
12 months 12 months 12 months 12 months 12 months
INCOME
Revenue From Operations [Gross] 434,984.12 342,874.58 275,235.23 246,972.17 258,594.36
Revenue From Operations [Net] 434,984.12 342,874.58 275,235.23 246,972.17 258,594.36
Other Operating Revenues 2,943.65 3,092.38 3,218.39 2,822.58 2,473.61
Total Operating Revenues 437,927.77 345,966.96 278,453.62 249,794.75 261,067.97
Other Income 5,949.92 4,633.19 3,053.63 2,643.19 2,973.15
Total Revenue 443,877.69 350,600.15 281,507.25 252,437.94 264,041.12
EXPENSES
Cost Of Materials Consumed 249,277.79 208,944.31 160,920.56 141,357.27 152,671.47
Purchase Of Stock-In Trade 25,043.44 22,306.95 18,374.77 12,250.09 12,228.35
Operating And Direct Expenses 0.00 10,675.71 9,223.95 5,226.63 4,188.49
Changes In Inventories Of FG,WIP AndStock-In Trade -1,565.53 -4,781.62 1,590.49 4,684.16 2,231.19
Employee Benefit Expenses 42,486.64 33,654.70 30,808.52 27,648.48 30,438.60
Finance Costs 9,985.76 10,225.48 9,311.86 8,097.17 7,243.33
Depreciation And Amortisation Expenses 27,270.13 24,860.36 24,835.69 23,546.71 21,425.43
Other Expenses 63,147.09 61,682.08 47,212.53 39,189.82 58,826.20
Less: Amounts Transfer To CapitalAccounts 0.00 18,434.84 14,397.29 12,849.13 17,503.40
Total Expenses 415,645.32 349,133.13 287,881.08 249,151.20 271,749.66
Profit/Loss Before Exceptional,ExtraOrdinary Items And Tax 28,232.37 1,467.02 -6,373.83 3,286.74 -7,708.54
Exceptional Items -977.06 1,590.53 -629.58 -13,761.02 -2,871.44
Profit/Loss Before Tax 27,255.31 3,057.55 -7,003.41 -10,474.28 -10,579.98
Tax Expenses-Continued Operations
Current Tax -3,851.64 3,258.35 2,669.98 1,710.18 1,893.05
Deferred Tax 0.00 -2,554.29 1,561.31 831.68 -1,497.80
Total Tax Expenses -3,851.64 704.06 4,231.29 2,541.86 395.25
Profit/Loss After Tax And BeforeExtraOrdinary Items 31,106.95 2,353.49 -11,234.70 -13,016.14 -10,975.23
Profit/Loss From ContinuingOperations 31,106.95 2,353.49 -11,234.70 -13,016.14 -10,975.23
Profit/Loss For The Period 31,106.95 2,353.49 -11,234.70 -13,016.14 -10,975.23
Minority Interest -407.66 -275.58 -132.71 -56.29 -95.62
Share Of Profit/Loss Of Associates 699.80 336.38 -74.06 -378.96 -1,000.00
Consolidated Profit/Loss After MI AndAssociates 31,399.09 2,414.29 -11,441.47 -13,451.39 -12,070.85
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 82.00 6.00 -30.00 -37.00 -35.00
Diluted EPS (Rs.) 82.00 6.00 -30.00 -37.00 -35.00
DIVIDEND AND DIVIDEND PERCENTAGE

27
 Tata Motors
Consolidated Balance Sheet of Tata Motors(in cr.)
Particulars Mar 24 Mar 23 Mar 22 Mar 21 Mar 20
12 months 12 months 12 months 12 months 12 months
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 766.50 766.02 765.88 765.81 719.54
Preference Share
Capital 2,547.90 0.00 0.00 0.00 0.00
Total Share Capital 3,314.40 766.02 765.88 765.81 719.54
Reserves and Surplus 84,151.52 44,553.31 43,788.97 54,480.91 61,491.49
Total Reserves and
Surplus 84,151.52 44,553.31 43,788.97 54,480.91 61,491.49
Money Received
Against Share
Warrants 0.00 0.00 0.00 0.00 867.50
Total Shareholders
Funds 87,465.92 45,319.33 44,554.85 55,246.72 63,078.53
Equity Share
Application Money 0.00 2.46 6.39 0.00 0.00
Minority Interest 8,175.91 7,277.72 4,271.06 1,573.49 813.56
NON-CURRENT
LIABILITIES
Long Term
Borrowings 62,148.53 88,695.81 97,759.17 93,112.77 83,315.62
Deferred Tax
Liabilities [Net] 1,143.35 1,406.95 1,558.44 1,555.89 1,941.87
Other Long Term
Liabilities 21,576.59 25,155.25 18,831.32 20,280.99 17,780.94
Long Term Provisions 16,536.66 13,196.53 12,955.89 13,606.76 14,736.69
Total Non-Current 101,405.1 128,454.5 117,775.1
Liabilities 3 4 131,104.82 128,556.41 2
CURRENT LIABILITIES
Short Term
Borrowings 36,351.56 36,964.66 41,917.87 21,662.79 16,362.53
Trade Payables 93,978.52 72,055.77 59,970.38 68,179.84 63,626.88
Other Current
Liabilities 30,995.45 34,196.24 38,028.25 55,058.52 50,135.60
Short Term Provisions 12,291.47 11,810.66 10,766.31 12,848.03 10,329.04
Total Current 173,617.0 155,027.3 140,454.0
Liabilities 0 3 150,682.81 157,749.18 5
Total Capital And 370,663.9 336,081.3 322,121.2
Liabilities 6 8 330,619.93 343,125.80 6
ASSETS
NON-CURRENT
ASSETS
156,123.6
Tangible Assets 3 84,442.47 87,586.15 86,130.71 84,158.17

28
Intangible Assets 0.00 46,796.69 50,462.13 51,773.18 42,171.91
Capital Work-In-
Progress 0.00 5,219.87 3,529.04 8,377.14 8,599.56
Intangible Assets
Under Development 0.00 9,054.63 6,722.05 12,586.79 27,022.73
156,123.6 145,513.6 161,952.3
Fixed Assets 3 6 148,299.37 158,867.82 7
Non-Current
Investments 8,717.83 7,540.85 6,670.31 5,569.09 5,446.94
Deferred Tax Assets
[Net] 13,099.02 5,184.67 3,870.85 4,520.35 5,457.90
Long Term Loans And
Advances 441.58 870.65 843.35 1,204.59 782.78
Other Non-Current
Assets 23,029.49 24,602.48 23,151.34 25,272.59 28,116.96
Total Non-Current 202,271.8 184,552.9 202,534.0
Assets 1 1 183,642.39 196,238.16 1
CURRENT ASSETS
Current Investments 14,253.24 18,838.31 22,709.22 19,051.19 10,861.54
Inventories 47,788.29 40,755.39 35,240.34 36,088.59 37,456.88
Trade Receivables 41,021.31 15,737.97 12,442.12 12,679.08 11,172.69
Cash And Cash
Equivalents 45,806.69 37,015.56 40,669.19 46,792.46 33,726.97
Short Term Loans And
Advances 196.7 2302.84 1671.93 1749.4 935.25
OtherCurrentAssets 19325.92 36878.4 34244.74 30526.92 25433.92
Total Current Assets 168392.15 151528.47 146977.54 146887.64 119587.25
Total Assets 370663.96 336081.38 330619.93 343125.8 322121.26
OTHER ADDITIONAL
INFORMATION
CONTINGENT
LIABILITIES,
COMMITMENTS
Contingent Liabilities 0 39477.3 18470.45 17773.75 15590.75
BONUS DETAILS
Bonus Equity Share
Capital 0 111.29 111.29 111.29 111.29
NON-CURRENT
INVESTMENTS
Non-Current
Investments Quoted
Market
Value 0 1733.69 1345.52 499.39 316.46
Non-Current
Investments
Unquoted Book
Value 0 1131.5 975.4 868.91 711.59
CURRENT
INVESTMENTS

29
Current Investments
Quoted Market
Value 0 134.45 685.62 0 0
Current Investments
Unquoted Book
Value 0 18703.86 22023.6 19051.19 10861.54

30
The ratios which determine the Financial
Performance of the company are:
 LIQUIDITY RATIO

 SOLVENCY RATIO

 ACTIVITY OF EFFICIENCY RATIO

 PROFITABILITY

LIQUIDITY RATIO: Liquidity or Short-term

solvency means ability of the business to pay
its short-term liabilities. Inability to pay-off
short term liabilities affects its credibility as
well as its credits rating. It includes expenses
such as payment to creditors, payment of
wages and salaries and other operating
expenses.

 NET WORKING CAPITAL: It represents the

excess of current assets over current liabilities.
An enterprise should have sufficient Net
working Capital in order to be able to meet the
claims of the creditors and the day to day
needs of the business. Net Working Capital
measures the firm’s reservoir of funds. The
31
 greater is the amount of Net Working Capital,
greater is the liquidity position of the firm.

NET WORKING CAPITAL = CURRENT ASSETS – CURRENT

LAIBILITIES

NET WORKING CAPITAL

PARTICULARS Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Total Current Assets 1,68,392.15 1,51,528.47 1,46,977.54 1,46,887.64 1,19,587.25

Total Current Liabilities 1,73,617.00 1,55,027.33 1,50,682.81 1,57,749.18 1,40,454.05
Net Working Capital -5,224.85 -3,498.86 -3,705.27 -10,861.54 -20,866.80

0.00
Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

-5,000.00

-10,000.00

-15,000.00

-20,000.00

-25,000.00

32
ANALYSIS: From the above table, shows that the
net working capital in last 5 years are in negative
figures, but the management is managing the
working capital efficiently from (-
)[Link] down to (-)3498.86 cr. in mar
23 though it increased to (-)5224.85 cr. in mar 24.

INTERPRETATION: From the table we can see

that The Company’s Net Working Capital is not
that in good position. The company doesn’t have
sufficient current assets to cover its current
liabilities portion. Also the table shows that that
there was a huge correction in mar 21 and also in
mar 22. Though company is progressing in
managing its working capital but still it is in
negative figure. This shows that liquidity position is
not well right now.

 CURRENT RATIO: It is the ratio of current

assets to current liabilities. Current ratio
measures short term solvency or liquidity
position of the firm. It indicates how much
current assets in rupees are being held by the
company for each rupee of current liabilities.
As a convention, current ratio 2:1 is standard
which means that each rupee of current

33
 liabilities should be backed by current assets
valued two rupees. The logic behind this is
that even if actual value of current assets is
reduced to half, the firm will not face any
problem in meeting its current liabilities.

CURRENT RATIO = CURRENT ASSETS/CURRENT

LAIBILITIES

COMPUTATION OF CURRENT RATIO

CURRENT RATIO
PARTICULARS Mar-24 Mar-23 Mar-22 Mar-21 Mar-20
Total Current Assets 1,68,392.15 1,51,528.47 1,46,977.54 1,46,887.64 1,19,587.25
Total Current Liabilities 1,73,617.00 1,55,027.33 1,50,682.81 1,57,749.18 1,40,454.05
CURRENT RATIO 0.97 0.98 0.98 0.93 0.85

34
 CURRENT RATIO
1.00

0.98

0.96

0.94

0.92

0.90

0.88

0.86

0.84

0.82

0.80

0.78
Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

ANALYSIS: From the above table the Current Ratio in

mar 20 is 0.85:1, in mar 21 it becomes 0.93:1, in mar
22 and mar 23 it was 0.98:1, lastly it fell that is 0.97:1 in
mar 24.

INTERPETATION: It shows rupee value of current asset

for each rupee of current liabilities. The higher the
current ratio, the larger is the amount of rupees
available per rupee of current liability and therefore
more is the firm’s ability to meet current obligations
and greater is the safety to funds of short term
liabilities. The does not have that amount of current
assets to meet their current liabilities.

35
 QUICK RATIO: Quick ratio is also known as Acid
test ratio or Liquid ratio. Quick Ratio is more
effective than Current Ratio as the current assets
don’t include stock in it. Because of this, it can
more effectively measures the short-term debt
paying capacity. As a convention, Quick Ratio 1:1 is
standard which means each rupee of quick
liabilities should be backed by quick assets of equal
value.

QUICK RATIO = QUICK ASSETS/QUICK LIABILITIES

NOTE : QUICK ASSET= CURRENT ASSET- INVENTORIES

36
 COMPUTATION OF QUICK RATIO
QUICK RATIO
PARTICULARS Mar-24 Mar-23 Mar-22 Mar-21 Mar-20
Quick Assets 1,20,603.86 1,10,773.08 1,11,737.20 1,10,799.05 82,130.37
Quick
Liabilities 1,73,617.00 1,55,027.33 1,50,682.81 1,57,749.18 1,40,454.05
QUICK RATIO 0.69 0.71 0.74 0.70 0.58

QUICK RATIO
QUICK RATIO

0.69 0.71 0.74 0.70

0.58

Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

ANALYSIS: From the above table the Quick Ratio in

all the year below 1. Its refers that the company has
more current liability than current asset.

INTERPRETATION: We know that Quick Assets means

[current Assets – Inventory + Pre-Paid Expense] and
Quick Liabilities means [Current Liabilities-Bank
Overdraft]. As here is no inventory or Prepaid
37
Expense and Bank Overdraft Quick Ratio will remain
same as Quick Ratio. It shows rupee value of Quick
asset for each rupee of Quick Liabilities. The higher
the Quick Ratio, the larger is the amount of rupees
available per rupee of Quick liability and therefore
more is the firm’s ability to meet current obligations
and greater is the safety of funds of short-term
liabilities. Only Quick asset of 0.69 is available to
meet the quick liabilities. In the previous year quick
ratio is 0.71 which signifies that quick assets are of
0.71 times for its short-term obligations. The liquidity
position is better in previous year as compared to
current year.

SOLVENCY RATIO: The leverage ratios may be

defined as those ratios which measures the long-
term stability and structure of the firm. These
ratios indicate the mix of funds provided by
owners and lenders and assure the lenders of the
long-term funds with regard to periodic payment
of interest and Repayment of principle amount on
the maturity.

 DEBT-EQUITY RATIO: This ratio expenses the

relationship between debt capital and

38
 shareholders’ fund. Debt equity ratio indicates the
respective claim of outsiders and owner i.e.
shareholders in the asset of the firm. So, it reflects
the financial soundness of the firm. This is an
important tool of financial analysis to appraise the
financial structure of a firm.

DEBT-EQUITY RATIO = LONG TERM DEBT/SHAREHOLDERS’ EQUITY

COMPUTATION OF DEBT-EQUITY RATIO

DEBT-EQUITY RATIO
PARTICULARS Mar-24 Mar-23 Mar-22 Mar-21 Mar-20
Long Term
Debt 1,01,405.13 1,28,454.54 1,31,104.82 1,28,556.41 1,17,775.12
Shareholder's
Equity 87,465.92 45,319.33 44,554.85 55,246.72 63,078.53
DEBT-
EQUITY
RATIO 1.159367 2.834432 2.942549 2.326951 1.867119

DEBT-EQUITY RATIO
DEBT-EQUITY RATIO

2.5

2
1.5
1
0.5
0
Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

39
ANALYSIS: From the above table the company has
the debt-to-equity ratio of 1.86 times in mar 20.
Which was increased and stayed above 2 from mar
21 to mar 23, then in mar 24 it goes down to 1.15.

INTERPRETATION: It shows that how much debt is

available against equity. 2:1 is healthy ratio for a
company. In the mar 24 it goes down to 1.15, which
is a good sign.

 FINANCIAL LEVERAGE RATIO: The Financial

Leverage ratio captures the impact of all
obligations, both interest-bearing and non-
interest-bearing. This Ratio aims to determine how
much of the business assets belong to the
Shareholders of the company rather than the Debt
holders /Creditors. The higher the ratio, the higher
the leverage and the higher the financial risk on
the heavy debt obligation taken to finance the
business’s assets.

Financial Leverage= Total Assets/ Total Equity

40
 FINANCIAL LEVERAGE
PARTICULAR Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Total Assets 3,70,663.96 3,36,081.38 3,30,619.93 3,43,125.80 3,22,121.26

Total Equity 87,465.92 45,319.33 44,554.85 55,246.72 63,078.53

Financial Leverage 4.23781 7.415851 7.420515 6.21079 5.10667

FINANCIAL LEVERAGE
Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

17% 14%

21% 24%

24%

ANALYSIS: From the above Table it is showing that the

company is using its asset with higher leverage. In mar-
20 the leverage was 5.1 times. From mar-21 to mar-23
it was increasing rapidly it goes from 6.2 to 7.4 times. It
is refering that the company reduced the risk of
leverage from 7.4 to 4.2 times in mar-24.

INTERPRETATION: The financial leverage ratio is an

indicator of how much debt a company is using to
finance its assets. A high ratio means the firm is highly
levered (using a large amount of debt to finance its
assets). A low ratio indicates the opposite.
41
 ACTIVITY OF EFFICIENCY RATIO: Activity ratios are
most useful when employed to compare two
competing businesses within the same industry to
determine how a particular company stacks up
amongst its peers. But activity ratios may also be
used to track a company's fiscal progress over
multiple recording periods, to detect changes over
time. These numbers can be mapped to present a
forward-looking picture of a company's
prospective performance.

 TRADE RECEIVABLE TURNOVER RATIO: The Trade

receivable turnover ratio determines an entity's
ability to collect money from its customers. Total
credit sales are divided by the average accounts
receivable balance for a specific period. A low ratio
suggests a deficiency in the collection process.

ACCOUNTS RECEIVABLE= REVENUE FROM OPERATION/AVERAGE ACCOUNTS

RECEIVABLE
TRADE RECEIVABLE TURNOVER

PARTICULARS Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Revenue from operation 4,34,984.12 3,42,874.58 2,75,235.23 2,46,972.17 2,58,594.36

Average trade receciable NA 21959.03 18781.66 18265.43 20670.78

TRADE RECEIVABLE TURNOVER NA 15.61429 14.65447 13.52129 12.51014

42
ANALYSIS: The receivable turnover ratio in mar-20
12.51, in mar-21 it was 13.52, in mar-22 it was 14.65, in
mar-23 it was 15.61.

INPRETATION: A higher ratio indicates that the credit

policy of the company is sound, while a lower ratio
shows a weak credit policy. In the above table the ratio
it is showing that the receivable turnover is getting
strong every year.

 WORKING CAPITAL TURNOVER RATIO: Working

capital turnover is a ratio that measures how
efficiently a company is using its working capital to
support sales and growth. Also known as net sales
to working capital, working capital turnover
measures the relationship between the funds used
to finance a company's operations and the
revenues a company generates to continue
operations and turn a profit.
Working Capital Turnover Ratio = Net Revenue From Operation/Working capital

WORKING CAPITAL TURNOVER RATIO

Year Mar-24 Mar-23 Mar-22 Mar-21 Mar-20
Net Revenue From operation(A) 4,34,984.12 3,42,874.58 2,75,235.23 2,46,972.17 2,58,594.36
Total Current Assets(B) 3,70,663.96 3,36,081.38 3,30,619.93 3,43,125.80 3,22,121.26
Total Current Liabilities(C) 1,73,617.00 1,55,027.33 1,50,682.81 1,57,749.18 1,40,454.05
Working Capital(B-C=D) 1,97,046.96 1,81,054.05 1,79,937.12 1,85,376.62 1,81,667.21
Working Capital Turnover ratio(A/D=E) 2.207515 1.89376918 1.52961896 1.33227248 1.42345094

43
 WORKING CAPITAL TURNOVER RATIO
2.5

1.5

0.5

0
Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

ANALYSIS: From the above we can see that the number

of sales gradually increases except in the year March
2021. And we can also see that the working capital
turnover ratio increasing trend.
INTERPRETATION: A high turnover ratio shows that
management is being very efficient in using a
company’s short-term assets and liabilities for
supporting sales. In other words, it is generating a
higher dollar amount of sales for every dollar of
working capital used.
In contrast, a low ratio may indicate that a business is
investing in too many accounts receivable and
inventory to support its sales, which could lead to an
excessive number of bad debts or obsolete inventory.

44
 PROFITABILITY RATIO: Profitability ratios are a
class of financial metrics that are used to assess a
business's ability to generate earnings relative to
its revenue, operating costs, balance sheet assets,
or shareholders' equity over time, using data from
a specific point in time. They are among the most
popular metrics used in financial analysis.

 RETURN ON ASSETS: The term “return on assets”

(ROA) refers to a financial ratio that indicates how
profitable a company is in relation to its
total assets. Corporate management, analysts, and
investors can use ROA to determine how efficiently
a company uses its assets to generate a profit.
RETURN ON ASSETS = NET INCOME/TOTAL ASSETS

RETURN ON ASSETS

PARTICULAR Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

Net Income 31,399.09 2,414.29 -11,441.47 -13,451.39 -12,070.85

3,22,121.26

Total Assets 3,70,663.96 3,36,081.38 3,30,619.93 3,43,125.80

Return on Asset 0.08471 0.007184 -0.03461 -0.0392 -0.03747

45
 Return on Assets
0.1
0.08
0.06
0.04
0.02
0
-0.02
-0.04
-0.06

Mar-24 Mar-23 Mar-22 Mar-21 Mar-20

ANALYSIS: In past few years the ROA of the company is

not well even it is in negative figure form mar-20 to
mar-22. From mar-23 onward the on assets has
increased. In mar-24 it is 8.4%.
INTERPRETION: The ROA figure gives investors an idea
of how effective the company is in converting the
money it invests into net income. The higher the ROA
number, the better because the company is able to
earn more money with a smaller investment. Put
simply, a higher ROA means more asset efficiency.
Company slowly making progress in term of
profitability.

 RETURN ON CAPITAL EMPLOYED (ROCE): The term

return on capital employed (ROCE) refers to
a financial ratio that can be used to assess a
company's profitability and capital efficiency. In

46
 other words, this ratio can help to understand how
well a company is generating profits from
its capital as it is put to use. ROCE is one of several
profitability ratios financial managers,
stakeholders, and potential investors may use
when analysing a company for investment.
ROCE = Earning Before Interest Tax/Capital Employed

RETURN ON CAPITAL EMPLOYED

Particular Mar-24 Mar-23 Mar-22 Mar-21 Mar-20
EBIT(A) 38207.406 11677.986 2932.9751 11382.124 -454.16803
Total Assets(B) 3,70,663.96 3,36,081.38 3,30,619.93 3,43,125.80 3,22,121.26
Total Current Liability(C) 1,73,617.00 1,55,027.33 1,50,682.81 1,57,749.18 1,40,454.05
Capital employed(B-C) 1,97,046.96 1,81,054.05 1,79,937.12 1,85,376.62 1,81,667.21
Return On Capital Employed 0.1939 0.0645 0.0163 0.0614 -0.0025

RETURN ON CAPITAL EMPLOYED

0.25

0.2

0.15

0.1

0.05

0
Mar-24 Mar-23 Mar-22 Mar-21 Mar-20
-0.05

ANALYSIS: As per the above table we can see that the

companies return on capital employed is in negative figure in
mar-20. It increased in mar-21, but in marr-22 it decreases.
After that it is increases significantly till now.
47
INTERPRETATION: Return on capital employed is a financial
ratio that measures a company’s profitability in terms of all of
its capital. Higher ratios tend to indicate that companies are
profitable. As per above chart we can see that company is
getting profitable in mar-24.

FINDINGS
1. Net working capital of the company in 2020 it was
(-)20866.80. the company management is
efficiently managing its working capital but still
company’s management needs work towards it as
the working capital still in negative figure.

2. The Liquidity position of the company has

deteriorated which is significant from the decrease
in current ratio.

3. The higher the Quick Ratio, the larger is the

amount of rupees available per rupee of Quick
liability and therefore more is the firm’s ability to
meet current obligations and greater is the safety
of funds of short-term liabilities. Only Quick asset
of 0.69 is available to meet the quick liabilities. In
the previous year quick ratio is 0.71 which signifies
48
 that quick assets are of 0.71 times for its short-
term obligations. The liquidity position is better in
previous year as compared to current year.
Company needs to reduces its current liabilities
and increases current assets.

4. The company is on the path of becoming stable

and this is evident that the company is becoming
profitable.

5. Return on Assets, higher ratio indicates that the

credit policy of the company is sound, while a
lower ratio shows a weak credit policy. Company is
progressing towards its return on assets.

6. Return on capital employed has increased

compared to previous years, which signifies
company's profitability and capital efficiency

7. Debt of the company compared to its equity

shares is decreased which is a good thing for the
company.

8. Trade receivable turnover ratio is increasing in

every year. A higher ratio indicates that the credit

49
policy of the company is sound, while a lower ratio
shows a weak credit policy.

50
 CHAPTER 4:CONCLUSION AND
RECOMENDATION
A study on financial statement analysis was carried out
in Tata Motors. Financial Statement Analysis is one of
the important factors in analyzing company’s
performance hence while knowing the company’s
growth and profitability financial analysis would be
helpful.
The data was collected from various sources and also
through tools like company’s annual report and
relevant transactions with the company staffs. They
were identified in the form of findings and suitable
suggestions were put forth to the concerned authorizes
for further discussion.

51
 CHAPTER 5: BIBLOGRAPHY
REFERENCE BOOKS:

1. FINANCIAL REPORTING AND FINANCIAL

STATEMENT ANALYSIS – DR. JAYANTA GHOSH.
2. FINANCIAL MANAGEMENT – KAR, BAGCHI

WEBSITES:
1. [Link]
equote/auto-lcvshcvs/tatamotors/TM03
2. [Link]
[Link]
3. [Link]
y_info/print_main.php
4. [Link]
motors/profit-lossVI/TM03#TM03
5. [Link]

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