International Journal of Research Publication and Reviews, Vol (6), Issue (4), April (2025), Page – 12518-12521

International Journal of Research Publication and Reviews

Journal homepage: www.ijrpr.com ISSN 2582-7421

A Study on Financial Analysis of TVS Motors

Dr. V. VIDHYA, Mr. VIKASH G
Assistant Professor, Department of Commerce, Professional Accounting, Sri Krishna Adithya College of Arts and Science.
Student of Department of Commerce, Professional Accounting, Sri Krishna Adithya College of Arts and Science.

ABSTRACT:

This study examines TVS Motor Company Limited's financial performance from 2019 to 2024, utilizing ratio analysis to assess profitability, liquidity, and solvency.
Based on secondary data from annual reports, the research examines important financial patterns and compares them to industry benchmarks to determine the
company's stability and growth. The findings illustrate the strengths and limitations of TVS Motors' financial management, providing stakeholders with practical
insights. While the report makes useful recommendations, its dependence on historical data and five-year timeframe may restrict prediction accuracy. Overall, the
research helps to evaluate the company's financial health and recommends measures for long-term success in the competitive vehicle industry.

INTRODUCTION

Finance is believed as the lifeblood of any company enterprise. No firm, large or little, can be launched without an acceptable amount of capital. Finance
may be described as the provision of money when it is needed. Finance refers to the management of money movements inside an organization. It is
concerned with the application of talents for manipulating, using, and controlling money. Financial performance analysis is the process of evaluating a
company's financial strengths and weaknesses by correctly defining the relationship between the balance sheet and profit and loss account. Financial
performance analysis can also aid with short-term and long-term forecasting, as well as identifying growth opportunities.

TVS Motor Company is one of India's leading two- and three-wheeler manufacturers, with a significant global presence in over 60 countries. Since its
inception in 1978, TVS Motors has evolved to be a respected name in the automobile industry, known for its quality, innovation, and customer satisfaction.

OBJECTIVES OF THE STUDY

 To examine the firm's long-term financial position.

 To analyze TVS Motors’ profitability, liquidity and solvency using ratio analysis over the past five years.

SCOPE OF THE STUDY

This entails assessing the company's financial health over the previous five years using important financial documents and ratios. It comprises trend
research, comparisons to industry peers, and consideration of external issues. The study attempts to provide insights into the company's financial strengths
and shortcomings, as well as recommendations for future financial plans.

LIMITATION OF THE STUDY

 Financial analysis based on past data might not accurately predict future trends due to market fluctuations.
 The majority of research use publicly accessible annual reports, which might not include all the relevant financial information or might be
manipulated by the business.

REVIEW OF LITERATURE

1. Patel and Desai’s (2022) The study looks at TVS Motor Company's liquidity and profitability patterns following the epidemic. The study
focuses on the company's difficulties, such as lower liquidity ratios and transitory losses in profitability caused by supply chain delays and decreased
demand. However, the study highlights TVS Motors' resurgence through smart cost management, inventory efficiency, and digital transformation. The
findings highlight the company's resilience and agility in dealing with post-pandemic issues, providing insights on preserving financial stability amid
crises.
2. Ajmera’s (2023) The study looks at the relationship between profitability and liquidity in the auto two- and three-wheeler industries. The
research emphasizes the importance of striking a balance between profitability and liquidity in order to fulfill organizational goals. The report underlines
 International Journal of Research Publication and Reviews, Vol (6), Issue (4), April (2025), Page – 12518-12521 12519

that effective liquidity management allows businesses to meet short-term obligations while profitability maintains long-term viability. The report analyzes
listed companies in the industry to provide insights into how organizations like TVS Motors can optimize financial performance through effective liquidity
and profitability management, both of which are crucial for growth and competitiveness in the automotive sector.

PROFILE OF THE STUDY:

TVS Motor Company is a well-known two- and three-wheeler manufacturer with four cutting-edge manufacturing sites in India's Hosur, Mysuru, and
Nalagarh, as well as Karawang, Indonesia. We take pride in producing worldwide aspirational products of the highest quality using innovative and
sustainable processes, building on our 100-year tradition of Trust, Value, and Service. We are the only two-wheeler company to have been awarded the
coveted Deming Prize.

HISTORY:

The company was founded by T.V. Sundaram Iyengar. He began with the bus service in Delhi. In 1911, he created Sundaram Iyengar and Sons Limited.
That company was the first to start bus services in Delhi. They dominated the bus service at the time, thanks to their massive fleet. After Mr. Sundaram
died, his sons took over the company. Sundaram Clayton was created in 1962 in conjunction with Clayton Dewandre Holdings from the United Kingdom.
It made brakes, exhausts, compressors, and other vehicle components. The firm established a plant in Hosur in 1976 to produce mopeds as part of their
new division. In 1980, the TVS 50, India's first two-seater moped, rolled out of the plant in Hosur, Tamil Nadu. In 1987, Sundaram Clayton Ltd and
Suzuki Motor Corporation formed a joint venture following a technological collaboration with the Japanese auto giant Suzuki Ltd. Commercial
motorcycle production began in 1989.

ANALYSIS AND INTERPRETATION

1.1 CURRENT RATIO

The current ratio is a popular technique for evaluating a company's short-term solvency. Short-term solvency refers to a company's capacity to meet its
short-term commitments when they fall due. Short-term obligations are liabilities that must be paid off within a year or less. The current ratio is calculated
by dividing the total current assets by the total current liabilities of the business.

Current Asset
CURRENT RATIO = Current Liability

TABLE 1.1

CURRENT RATIO

YEAR Current Asset Current Liability Current Ratio

2020 3,221.59 4,494.16 0.72
2021 3,446.79 4,585.41 0.75
2022 3362.28 5186.50 0.65
2023 3667.50 6008.54 0.61
2024 4217.82 6606.80 0.64
Source: Secondary data

INTERPRETATION:

From 2020 to 2024, the company's current ratio remained persistently below one, suggesting that current assets were insufficient to meet short-term
liabilities. The ratio improved significantly from 0.72 in 2020 to 0.75 in 2021 before falling to 0.61 by 2023, with a tiny recovery to 0.64 in 2024. This
graph shows rising current obligations surpassing current asset growth, indicating future liquidity issues. To boost its financial position, the corporation
may need to increase working capital by adding assets or reducing liabilities.
 International Journal of Research Publication and Reviews, Vol (6), Issue (4), April (2025), Page – 12518-12521 12520

CHART 1.1

CURRENT RATIO

Current Ratio
0.8 0.75
0.72
0.7 0.65 0.64
0.61
0.6
0.5
RATIO

0.4
0.3
0.2
0.1
0
2020 2021 2022 2023 2024
FINANCIAL YEAR

1.2 OPERATING PROFIT RATIO

The Operating Profit Ratio is a financial measure that compares a company's profitability from its main business activities to its sales. It is computed by
dividing the operational profit (revenue from operations minus operating expenses) by revenue from operations and multiplying by 100 to get the
percentage. This ratio measures how successfully a company manages its operating expenses and turns income into profit from its key activities. A higher
ratio indicates greater operational efficiency and profitability, whereas a lower ratio may imply inefficiencies or increased operating costs. It is an
important measure of a company's ability to continue and expand its core business operations.

Operating Profit
OPERATING PROFIT RATIO = Revenue from Operation

Operating Profit = Revenue from Operations – Operating Expenses

TABLE 4.2.6

TABLE SHOWING OPERATING PROFIT RATIO

YEAR Operating Profit Revenue from Operation Operating Profit Ratio

2020 856.83 16423.34 5.22%
2021 934.87 16750.54 5.58%
2022 1350.30 20790.51 6.49%
2023 2043.46 26378.09 7.75%
2024 2813.76 31776.37 8.85%
Source: Secondary Data

INTERPRETATION

The company's Operating Profit Ratio has steadily climbed from 5.22% in 2020 to 8.85% in 2024, indicating greater operational efficiency and cost
control. This growing trend, driven by improved control over operating expenses and increased revenue from operations, demonstrates the company's
capacity to create bigger profits from its main business activities. By 2024, the company produced ₹8.85 in operational profit for every ₹100 in revenue,
indicating a focus on streamlining operations and increasing profitability. This is a favorable indicator for stakeholders and investors.
 International Journal of Research Publication and Reviews, Vol (6), Issue (4), April (2025), Page – 12518-12521 12521

Chart 1.2

Chat 1.2 showing Operating profit ratio

Operating Profit Ratio

10

0
2020 2021 2022 2023 2024

operating Profit Ratio

SUGGESTIONS

 There aren't enough current assets to satisfy short-term commitments, as the current ratio has continuously been below 1. In order to increase
liquidity and successfully fulfill short-term obligations, TVS Motors should concentrate on either boosting current assets or decreasing current
liabilities.
 The substantial decrease in cash and cash equivalents in 2022 and 2023, followed by a recovery in 2024, suggests uneven cash flow management.
To provide adequate liquidity, the organization should put in place sophisticated cash flow forecasting and monitoring tools.
 The steady improvement in the operational profit ratio (from 5.22% in 2020 to 8.85% in 2024) suggests improved cost management. To increase
profits, the corporation should continue to streamline processes and cut operational expenses.

CONCLUSION

TVS Motors' financial study from 2020 to 2024 shows that the company is profitable and has improved solvency, but it still faces ongoing liquidity issues.
By increasing receivables collection, optimizing inventory levels, and negotiating better terms of payment with suppliers, TVS Motors should concentrate
on enhancing cash flow management. Liquidity can be further strengthened by improving operational efficiency and refinancing short-term debt into
long-term debt. By putting these tactics into practice, TVS Motors will be able to get over its cash flow problems, lessen its dependency on outside
funding, and maintain long-term financial stability, setting itself up for future expansion and stability in the cutthroat auto sector.

REFERENCES

 Patel, A., & Desai, V. (2022). Liquidity and Profitability Trends in TVS Motor Company: A Post-Pandemic Analysis. Asian Journal of Finance &
Accounting, 14(1), 34-49
 Ajmera, T. R. (2023). Profitability and Liquidity in the Auto Two- and Three-Wheeler Industry: An Empirical Study. Journal of Social Commerce, 3(1),
10-17.