TATA MOTORS : FINANCIAL STATEMENTS ANALYSIS

Essay by satyasudiptaUniversity, Master'sB, March 2008

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FINANCIAL ANALYSIS OF TATA MOTORSTABLE OF CONTENTSACKNOWLEDGEMENT.................................................................................3EXECUTIVE SUMMARY…..........................................................................4ENVIRONMENTAL ANALYSIS....................................................................5INDIAN AUTOMOBILE INDUSTRY……………………………………….7ABOUT TATA MOTORS…………………………………………………...13•TATA MOTORS SWOT ANALYSIS……………………………..14•HISTORY OF TATA MOTORS…………………………………...16•BOARD OF DIRECTORS…………………………………………21•SHAREHOLDING PATTERN OF TATA MOTORS LTD. ……...22•CAPITAL STRUCTURE OF TATA MOTORS LTD. ……………22FINANCIAL STATEMENTS……………………………………………….26FINANCIAL STATEMENT ANALYSIS OF TATA MOTORS…………...30•PROFITABILITY RATIOS………………………………………..30•LQUIDITY RATIOS……………………………………………….36•EFFICIENCY RATIOS…………………………………………….38•SOLVENCY RATIOS……………………………………………...39•MARKET BASED RETURN………………………………………42•DU PONT ANALYSIS……………………………………………..43INTERCOMPANY ANALYSIS…………………………………………….48•TATA MOTORS V/S ASHOK LEYLAND……………………….48ANNEXURE I (TATA MOTORS FINANCIAL RATIOS)…………………54ANNEXURE II (ASHOK LEYLAND FINANCIAL RATIOS)…………….55REFERENCES ………………………………………………………………57ACKNOWLEDGEMENTSSeveral people have been instrumental in allowing this project to be completed. First and foremost we would like to thank Dr. D. V. Ramana, Professor Financial Accounting, Xavier Institute of Management, Bhubaneswar for his constant encouragement and guidance throughout the duration of this project. He is responsible for instilling a passion for Financial Accounting in us and explaining the concepts in a very simplified and lucid manner. Last but not the least, this project would have been incomplete but for the timely support of some of batch mates who have been very co-operative and helped me whenever required.

EXECUTIVE SUMMARYThis project makes an attempt to present the complete Financial Statement Analysis of Tata Motors for the last three consecutive years. The Macro Environment in which Tata Motors is operating and the Overall Automobile Industry has also been analyzed in detailed, to understand the external factors influencing the company. All the various financial ratios have been calculated and analyzed in length to appreciate their impact on company's performance. DuPont analysis has been done to check the credibility of company as per shareholders, financial analysts and other mutual funds.

The financial statements of last three years have been identified, studied and interpreted in light of company's performance. Capital Structure of the company, critical decisions of distributing dividends, issue of bonus debentures and other current news have been analyzed and their impact on the bottom line of the company has been...