Tata Motors- Ratio Analysis 336j53
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A STUDY ON FINANCIAL PERFORMANCE ANALYSIS
TATA MOTORS LIMITED A Project report submitted to Prof: Lisha Dawan Submitted By Deepa Chandirrasekar
IIPM GURGAON – SS09-11
Profitability Ratios
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
1
1. Return on Investment (ROI)/Return on Capital Employed [Operating Profit/Capital Employed]
ROI
=
Operating Profit
x 100
Share Capital + Reserves & Surplus + Long Term Loans
Year
ROI
2008
2007
2006
2005
25.88%
32.43%
33.78%
35.32%
40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%
ROI
Return On Investments
2. Return On Share Holders Funds ROSF =
Net Profit after Tax & Interest
x
100
Share Holders Funds
Year
ROSF
2008
2007
2006
2005
25.88%
27.85%
27.61%
30.09%
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
2
31.00% 30.00% 29.00% 28.00% 27.00% 26.00% 25.00% 24.00% 23.00%
ROSF
Return On Shareholders Funds
3.
Return On Total Assets ROTA =
Net Profit after Tax & Interest
x
100
Total Assets
Year
ROTA
2008
2007
2006
2005
14.37%
17.59%
18.04%
18.72%
Return On Total Assets 20.00% 15.00% 10.00% 5.00% 0.00% Year
4.
Return On Gross Capital Employed
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
3
ROGC =
Net Profit before Tax & Interest
x
100
Total Assets Excluding Fictitious Assets
Year
ROGC
2008
2007
2006
2005
21.26%
27.04%
27.63%
28.51%
Return On Gross Capital Employed 30.00% 20.00% 10.00% 0.00% Year
5. Earning Per Share EPS =
Net Profit after Tax – Preference Divident
x
100
No.Of Equity share
Year
2008
2007
2006
2005
EPS
52.63
49.65
39.93
34.19
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
4
Equity Per Share 60 50 40 30 20 10 0 Year
6. Price Earning Ratio PER =
Market Price Per Equity Share
x
100
Earning Per share
Year
2008
2007
2006
2005
PER
7.60
8.06
10.02
11.70
Price Earning Ratio 12 10 8 6 4 2 0 Year
7. Gross Profit Ratio
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
5
GPR =
Gross Profit
x
100
Net Sales
Year
2008
2007
2006
2005
GPR
29.61%
30.47%
32.01%
32.34%
Gross Profit Ratio 33.00% 32.00% 31.00% 30.00% 29.00% 28.00% Year
8. Net Profit Ratio NPR =
Net Profit
x
100
Net Sales
Year
2008
2007
2006
2005
NPR
12.72%
12.84%
13.89%
13.40%
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
6
Net Profit Ratio 14.00% 13.50% 13.00% 12.50% 12.00% Year
9. Operating Cost Ratio OCR =
Operating Cost
x
100
Net Sales =
100 – Net Profit Ratio
Year
2008
2007
2006
2005
OCR
89.94%
88.49%
87.84%
87.92%
Operating Cost Ratio 90.00% 89.00% 88.00% 87.00% 86.00% Year
10.
Pay Out Ratio
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
7
POR =
Dividend Per Equity Share
x 100
Earning Per Share
Year
2008
2007
2006
2005
POR
28.51%
30.20%
32.35%
34.31%
Pay Out Ratio 40.00% 30.00% 20.00% 10.00% 0.00% Year
11.
Retained Earning Ratio
RER =
Retained Earning Per Share
x 100
Earning Per Share
=
1 – Dividend Pay Out Ratio
Year
2008
2007
2006
2005
RER
52.63
49.65
39.93
34.19
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
8
Retained Earning Per Share 75.00% 70.00% 65.00% 60.00% 55.00% Year
12.
Dividend Yield Ratio
DYR =
Dividend Per Share
x
100
Market Price Per share
Year
2008
2007
2006
2005
DYR
3.75%
-
-
-
Market Price - Not Available for the year 2007 2006 2005
Dividend Yield Ratio 4.00% 3.00% 2.00% 1.00% 0.00% Year
Coverage Ratios 1. Fixed Charge Cover Ratio ------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
9
FCCR =
Income before Interest & Tax Interest Charges
Year
2008
2007
2006
2005
FCCR
7.05
7.98
7.98
8.65
Fixed Charge Cover Ratio 10 8 6 4 2 0 Year
2. Debt Service Coverage Ratio DSCR =
Net Profit before Interest & Tax Interest +
Principal Repayment 1- Tax Rate
Year
2008
2007
2006
2005
DSCR Principal Amount is not available.
TurnOver Ratios 1. Fixed Asset Turnover Ratio
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
10
FATR =
Net Sales
Times
Net Fixed Asset
Year
2008
2007
2006
2005
FATR
5.33
7.08
5.77
5.52
Fixed Asset Turnover Ratio 8 6 4 2 0 Year
2. Working Capital Turnover Ratio FATR =
Net Sales
Times
Current Assets – Current Liabilities
Year
WCTR
2008
2007
2006
2005
-105.30
9.87
8.09
31.94
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
11
Working Capital Turnover Ratio 50 0 -50 -100 -150 Year
3. Debtor Turnover Ratio DTR =
Credit Sales Average Receivable s
Year
DTR
2008
2007
2006
2005
29.27
40.68
33.54
25.25
Debtor Turnover Ratio 50 40 30 20 10 0 Year
4. Debt Collection Period Ratio DR =
12 or 365
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
12
Debtors Turnover Ratio
Year
2008
2007
2006
2005
DR
0.41
0.29
0.36
0.48
Debtor Collection Period Ratio 0.5 0.4 0.3 0.2 0.1 0 Year
5. Creditor Turnover Ratio CTR =
Total Purchase
s Payable( Raw Material Cost – Sundry Creditors)
Year
2008
2007
2006
2005
CTR
4.34
4.75
5.03
5.26
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
13
CreditorsTurnover Ratio 6 5 4 3 2 1 0 Year
6. Debt Payment Period DPP =
Average s Payable Average Monthly Credit Purchase(units in months)
Year
DPP
2008
2007
2006
2005
1.69
1.54
1.42
1.33
Debt Payment Period 2 1.5 1 0.5 0 Year
7. Stock/ Inventory Turnover Ratio STR =
Cost of Goods Sold During the Year Average Inventory
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
14
Year
2008
2007
2006
2005
STR
3.51
3.35
3.28
3.52
Stock Turnover Ratio 3.6 3.5 3.4 3.3 3.2 3.1 Year
Financial Ratios 1. FIXED ASSET RATIO FAR = Fixed Assets of the company Long Term Funds
2. Current Ratio CR =
Current Asset CA Current Liabilities CL
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
15
3. Liquidity Ratio Quick Ratio
= CA – Inventory Current Liabilities
4. Debt Equity Ratio DER = Total Long Term Fund Shareholders funds
Profit & Loss Statement ------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
16
Gross Sales Sales
Mar 200 Mar 2008 7 Mar 2006 Mar 2005 Mar 2004 12 12 12 12 12 330939.3 318194.8 240041.2 204825.7 154935.2 325218.3 310647 234394.1 202174.2 152087.4
Job Work / Contract receipts
0
0
0
0
0
Prcessing Charges / Service Income
0
0
0
0
0
Others operational income
5721
7547.8
5647.1
2651.5
2847.8
0 0 43631.1 287308.2
0 0 43494.5 274700.3
0 0 34019.2 206022
0 0 30634.4 174191.3
0 0 22703 132232.2
Increase/Decrease in Stock Opening Balances Work In Progress Finished Goods
330
-2736.9
-2569.1
-1458.2
1419.8
3013.2 0
2863.1 0
2644.6 0
1766.4 0
1182.2 0
Shares, Units and Bonds Other Less : Work In Progress Finished Goods
0 11030.2
0 8443.4
0 5332.9
0 4752.9
0 6756.9
2960 0
3013.2 0
2863.1 0
2644.6 0
1766.4 0
Shares, Units and Bonds Other
0 10753.4
0 11030.2
0 7683.5
0 5332.9
0 4752.9
Raw Materials Consumed
201901.9
193749.3
142638.6
119313
83413.9
Opening Raw Materials
8725.9
7326.9
6300.6
3497.2
2380.7
Purchases Raw Materials
184980.6
180556.3
133677.5
115447
79850.6
Closing Raw Materials
7785.7
8725.9
7326.9
6300.6
3497.2
Particulars No of Months
Less :Inter divisional transfers Less: Sales Returns Less: Excise Net Sales EXPENDITURE :
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
17
Other Direct Purchases / Brought in cost Others Power & Fuel Cost Employee Cost
0 15981.1 3251.9 15260.1
14592 0 3274.1 13556.3
9987.4 0 2585.1 11332.5
6651.2 18.2 2378.1 10295.1
4679.8 0 2145.2 8745.6
Other Manufacturing Expenses
22395.1
19651.3
14852.1
12666.4
9172.6
General and istration Expenses
1695
1584.4
1354.6
810.3
755.4
Selling and Distribution Expenses
9939.5
12330.5
9919.1
8665.8
7809.3
Miscellaneous Expenses
3631.1
1669.9
850
481.1
468.8
Less: Pre-operative Expenses Capitalised Total Expenditure
0 258404.6
0 243078.9
0 180962.9
0 153151.6
0 113930.6
Operating Profit (Excl OI) Other Income Interest Dividend
28903.6 7640.3 1432.4 1318.9
31621.4 3658.4 554.4 869.4
25059.1 3562.5 671.4 414
21039.7 2297.5 636.6 198.7
18301.6 1001.2 412.2 30.8
Profits on sale of FA
0
0
0
0
0
Profits on sale of Investments
1518.1
354.8
1776.4
312
39.8
Forex Exchange Gains Other Operating Profit Interest PBDT Depreciation
1376.1 1994.8 36543.9 4256.1 32287.8 6523.1
652.1 1227.7 35279.8 3685.1 31594.7 5862.9
0 700.7 28621.6 2934.9 25686.7 5209.4
0 1150.2 23337.2 2178.1 21159.1 4501.6
0 518.4 19302.8 2024.8 17278 3826
Profit Before Taxation & Exceptional Items
25764.7
25731.8
20477.3
16657.5
13452
Exceptional Income / Expenses Profit Before Tax Provision for Tax
0 25764.7 5475.5
0 25731.8 6597.2
56.5 20533.8 5245
-138.5 16519 4149.5
-528.6 12923.4 4820
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
18
Current Income Tax Deferred Tax Fringe Benefit tax Others Profits After Tax Appropriations General Reserve
1390.1 4015.4 70 0 20289.2 30427.5 0
4760 1772.2 65 0 19134.6 26902.2 0
3633.5 1421.5 190 0 15288.8 20945.4 0
3638.2 511.3 0 0 12369.5 16027.5 0
960 3860 0 0 8103.4 9340.5 0
Proposed Equity Dividend
5784.3
5780.7
4979.4
4521.9
2821.1
Preference Dividend
0
0
0
0
0
Corporate Dividend Tax Statutory Reserve
812.5 0
982.5 0
698.4 0
634.2 0
361.4 0
Other Appropriation
0
0.7
0
15.4
0
Profit & Loss Balance C/F Equity Dividend % Earnings Per Share Book Value
13830.7 150 52.63 202.54
10138.3 150 49.65 177.33
7767.6 130 39.94 143.58
5856 125 34.19 113.15
3658 80 22.96 101.08
Ratios Analysis Sr.No:
Profitability Ratios
2008
2007
2006
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
2005
19
Return on Investment (ROI)/Return on Capital Employed [Operating Profit/Capital Employed]
(Operating Profit)/(Share Capital+Reserves & Surplus+Long Term Loans)
25.88%
32.43%
33.78%
35.32%
Return on Shareholders Fund
(Net Profit after Income Tax)/ (Share Capital + Total Reserves)
25.88%
27.85%
27.61%
30.09%
3
Return on Equity Shareholders Fund
(Net Profit after Interest, Tax & Preference Dividend)/ (Equity Capital + Total Reserves)
25.88%
27.85%
27.61%
30.09%
4
Return on Total Assets
Net Profit after Tax/(Total Assets)
14.37%
17.59%
18.04%
18.72%
5
Return on Gross Capital Employed
Net PBIT/(Net Fixed Assets + Current Assets)
21.26%
27.04%
27.63%
28.51%
Earning per Share (EPS)
Net Profit after Tax/(Equity Capital/Face Value of the Share)
52.63
49.65
39.93
34.19
Price Earning Ratio
Market Price per Equity Share/Earning Per Share
7.60
8.06
10.02
11.70
8
Gross Profit Ratio
(Net Sales - Cost of goods Sold)/Net Sales = (Net Sales Rawmaterial Cost)/Net Sales
29.61%
30.47%
32.01%
32.34%
9
Net Profit Ratio
Net Operating Profit/Net Sales
12.72%
12.84%
13.89%
13.40%
#
Operating (OR) Expense Ratio
Operating Cost/Net Sales = (1-Net Operating Ratio)
89.94%
88.49%
87.84%
87.92%
Pay-Out Ratio
Dividend per Equity Share/Earning per Equity Share
28.51%
30.20%
32.35%
34.31%
Retained Earnings Ratio
Retained Earnings/Total Earnings = ( 1 - Pay-Out Ratio )
71.49%
69.79%
67.43%
63.44%
7.98
7.98
8.65
1
2
6 7
#
#
Dividend per Share/Market Price per Share
#
Dividend Yield Ratio Coverage Ratios
1
Fixed Interest Cover
2 3
Fixed Dividend Cover Debt Service Coverage Ratio
1
Turnover Ratios (Activity (OR) Efficiency Ratios Fixed Asset Turn Over Ratio
Net Sales/Net Fixed Assets
2
Working Capital Turn Over Ratio
Net Sales/(Currents Assets Current Liabilities)
Debtors Turnover Ratio
Total Sales/s Receivable
3
Income before Interest & Tax/Interest Charges Net Profit after Interest & Tax/Preferred Dividend
3.75%
7.05 NA
NA
NA
NA
5.33
7.08
5.77
5.52
-105.30
9.87
8.09
31.94
29.27
40.68
33.54
25.25
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
20
Debt Collection Period Ratio
s Receivables(Debtors)/Monthl y Credit Sales (Units in Months)
0.41
0.29
0.36
0.48
5
Creditors Turnover Ratio
Total Purchaces/s Payables = (Rawmaterial Cost/Sundry Creditors)
4.34
4.75
5.03
5.26
6
Debt Payment Period Enjoyed Ratio (Average age of Payable)
Average s Payable/ (Average Monthly Credit Purchase) (Units in Months)
1.69
1.54
1.42
1.33
7
Stock Turnover (OR) Inventory Turnover Ratio
Costs of Goods Sold during the year/Average Inventory
3.51
3.35
3.28
3.52
4
Balance Sheet Balance Sheet
(Rs.in Millions)
Particulars
Mar 2008
Mar 2007
Mar 2006
Mar 2005
Mar 2004
SOURCES OF FUNDS -
Share Capital
3855.40
3854.10
3828.70
3617.90
3530.00
3854.90
3853.60
3828.20
3617.40
3529.50
Adjustments to Equitys
0.00
0.00
0.00
0.00
0.00
Preference Capital Paid Up
0.00
0.00
0.00
0.00
0.00
Unclassified Shares Paid Up
0.00
0.00
0.00
0.00
0.00
10.00
10.00
10.00
10.00
10.00
0.00
0.00
0.00
0.00
38.30
74539.60
64843.40
51542.00
37496.00
32367.70
15372.20
19364.00
18287.00
14738.90
16813.40
0.00
0.00
0.00
0.00
0.00
Profit & Loss Balance
13830.70
10138.30
7767.60
5856.00
3658.00
General Reserves
41164.30
31164.30
21306.20
13536.30
8531.50
3343.50
3343.50
3343.50
3341.50
3341.50
Capital Redemption Reserve
22.80
22.80
22.80
22.80
22.80
Exchange Fluctuation reserve
0.00
0.00
0.00
0.00
0.00
Statutory Reserves
0.00
0.00
0.00
0.00
0.00
805.60
810.00
814.40
0.00
0.00
Equity - Paid Up
Face Value Share warrants & Outstandings -
Total Reserve Securities Capital Reserves
Debenture Redemption Reserve
Other Reserves
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
21
-
Revaluation reserve
255.10
259.50
263.90
0.00
0.00
Shareholder's Funds
78395.00
68697.50
55370.70
41113.90
35897.70
Secured Loans
24619.90
20220.40
8227.60
4898.10
9426.50
1705.00
755.00
755.00
825.00
1625.00
Term Loans – Banks
0.00
0.00
0.00
0.00
2859.80
Term Loans – Institutions
0.00
0.00
0.00
2217.60
2251.10
Working Capital Loans - Bank
0.00
0.00
0.00
0.00
0.00
Deferred Credit
0.00
0.00
0.00
0.00
0.00
Non Convertible Debentures
Hire Purchase / Financial Lease
-
0.00
0.00
0.00
0.00
0.00
Other Secured
24619.90
20220.40
8227.60
2680.50
4315.60
Unsecured Loans
38185.30
19871.00
21140.80
20056.10
3171.20
0.00
0.00
0.00
0.00
0.00
Commercial Paper
1000.00
0.00
0.00
0.00
0.00
Deferred Tax Loan
0.00
0.00
3.60
1.70
2.90
37185.30
19871.00
21137.20
20054.40
3168.30
62805.20
40091.40
29368.40
24954.20
12597.70
141200.20
108788.90
84739.10
66068.10
48495.40
108308.30
87758.00
79715.50
66119.50
59854.00
54435.20
48945.40
44015.10
34542.80
30236.90
0.00
0.00
0.00
0.00
0.00
53873.10
38812.60
35700.40
31576.70
29617.10
0.00
0.00
0.00
0.00
0.00
50649.60
25133.20
9511.90
5388.40
2860.90
Pre-operative Expenses pending
0.00
0.00
0.00
0.00
0.00
Assets in transit
0.00
0.00
0.00
0.00
0.00
49102.70
24770.00
20151.50
29120.60
30567.70
4896.90
2182.80
2182.80
2772.80
2779.00
10170.50
4133.30
4127.70
3737.30
4142.20
7907.90
519.90
1755.50
10007.50
14909.60
26127.40
17934.00
12085.50
12603.00
8736.90
25305.50
13230.80
15500.00
12608.50
7327.60
Fixed Deposits – Public
Other Unsecured Loan Total Debts
Total Liabilities APPLICATION OF FUNDS : Gross Block
Less: Accumulated Depreciation Less: Impairment of Assets Net Block Lease Adjustment A/c Capital Work in Progress
-
Investments Quoted Equity Unquoted Equity Units
Other Investments
Market Value of Quoted Investements
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
22
Current Assets, Loans & Advances -
Inventories
24218.30
25009.50
20122.40
16013.60
11474.40
Raw Materials
7785.70
8725.90
7326.90
6300.60
3497.20
Work-in Progress
2960.00
3013.20
2863.10
2644.60
1766.40
0.00
0.00
0.00
0.00
0.00
Finished Goods Stores and Spare Other Inventory -
Sundry Debtors
Debtors more than Six months Debtors Others
Less : Provisions for Doubtful Debts Cash and Bank
1111.50
1390.00
1355.00
1423.50
1078.10
12361.10
11880.40
8577.40
5644.90
5132.70
11307.30
7821.80
7157.80
8113.20
6149.90
956.80
883.60
698.60
717.40
1379.20
10696.50
7256.20
6802.10
7916.80
5801.10
346.00
318.00
342.90
521.00
1030.40
23973.10
8267.60
11194.30
20050.40
7704.90
Other Current Assets
8402.00
7217.90
353.20
309.40
212.60
Loans and Advances
35937.10
56803.70
57785.40
26975.40
11415.20
103837.80
105120.50
96613.10
71462.00
36957.00
Sundry Creditors
46531.80
40799.40
28384.80
22697.30
22771.40
Acceptances
37385.10
20038.00
26973.90
28072.80
15843.30
0.00
0.00
0.00
0.00
0.00
80.40
66.30
54.80
35.40
70.10
287.50
254.20
190.80
195.90
160.40
2387.20
2478.90
3398.90
3746.30
3398.80
19894.30
13643.20
12150.40
11260.60
4306.40
5784.30
5780.70
4979.40
4521.90
1421.60
Total Current Assets
Less : Current Liabilities and Provisions
Bank Overdraft / Short term credit
Unclaimed Dividend
Interest Accrued But Not Due
Other Liabilities
-
Provisions
Proposed Equity Dividend
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
23
Provision for Corporate Dividend Tax
812.50
982.50
698.40
634.20
182.10
Provision for Tax
0.00
0.00
0.00
0.00
0.00
Other Provisions
13297.50
6880.00
6472.60
6104.50
2702.70
106566.30
77280.00
71153.60
66008.30
46550.40
-2728.50
27840.50
25459.50
5453.70
-9593.40
60.50
100.90
141.20
181.60
221.90
Deferred Tax Assets
3974.50
1766.00
1507.50
1026.90
1350.60
Deferred Tax Liability
13731.70
9634.30
7732.90
6679.70
6492.10
-9757.20
-7868.30
-6225.40
-5652.80
-5141.50
141200.20
108788.90
84739.10
66068.20
48532.70
20430.00
14717.50
9928.60
3116.20
2672.80
Total Current Liabilities
Net Current Assets
Miscellaneous Expenses not written off
Deferred Tax Assets / Liabilities
Total Assets
Contingent Liabilities
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
24
TATA MOTORS LIMITED A Project report submitted to Prof: Lisha Dawan Submitted By Deepa Chandirrasekar
IIPM GURGAON – SS09-11
Profitability Ratios
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
1
1. Return on Investment (ROI)/Return on Capital Employed [Operating Profit/Capital Employed]
ROI
=
Operating Profit
x 100
Share Capital + Reserves & Surplus + Long Term Loans
Year
ROI
2008
2007
2006
2005
25.88%
32.43%
33.78%
35.32%
40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%
ROI
Return On Investments
2. Return On Share Holders Funds ROSF =
Net Profit after Tax & Interest
x
100
Share Holders Funds
Year
ROSF
2008
2007
2006
2005
25.88%
27.85%
27.61%
30.09%
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
2
31.00% 30.00% 29.00% 28.00% 27.00% 26.00% 25.00% 24.00% 23.00%
ROSF
Return On Shareholders Funds
3.
Return On Total Assets ROTA =
Net Profit after Tax & Interest
x
100
Total Assets
Year
ROTA
2008
2007
2006
2005
14.37%
17.59%
18.04%
18.72%
Return On Total Assets 20.00% 15.00% 10.00% 5.00% 0.00% Year
4.
Return On Gross Capital Employed
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
3
ROGC =
Net Profit before Tax & Interest
x
100
Total Assets Excluding Fictitious Assets
Year
ROGC
2008
2007
2006
2005
21.26%
27.04%
27.63%
28.51%
Return On Gross Capital Employed 30.00% 20.00% 10.00% 0.00% Year
5. Earning Per Share EPS =
Net Profit after Tax – Preference Divident
x
100
No.Of Equity share
Year
2008
2007
2006
2005
EPS
52.63
49.65
39.93
34.19
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
4
Equity Per Share 60 50 40 30 20 10 0 Year
6. Price Earning Ratio PER =
Market Price Per Equity Share
x
100
Earning Per share
Year
2008
2007
2006
2005
PER
7.60
8.06
10.02
11.70
Price Earning Ratio 12 10 8 6 4 2 0 Year
7. Gross Profit Ratio
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
5
GPR =
Gross Profit
x
100
Net Sales
Year
2008
2007
2006
2005
GPR
29.61%
30.47%
32.01%
32.34%
Gross Profit Ratio 33.00% 32.00% 31.00% 30.00% 29.00% 28.00% Year
8. Net Profit Ratio NPR =
Net Profit
x
100
Net Sales
Year
2008
2007
2006
2005
NPR
12.72%
12.84%
13.89%
13.40%
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
6
Net Profit Ratio 14.00% 13.50% 13.00% 12.50% 12.00% Year
9. Operating Cost Ratio OCR =
Operating Cost
x
100
Net Sales =
100 – Net Profit Ratio
Year
2008
2007
2006
2005
OCR
89.94%
88.49%
87.84%
87.92%
Operating Cost Ratio 90.00% 89.00% 88.00% 87.00% 86.00% Year
10.
Pay Out Ratio
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
7
POR =
Dividend Per Equity Share
x 100
Earning Per Share
Year
2008
2007
2006
2005
POR
28.51%
30.20%
32.35%
34.31%
Pay Out Ratio 40.00% 30.00% 20.00% 10.00% 0.00% Year
11.
Retained Earning Ratio
RER =
Retained Earning Per Share
x 100
Earning Per Share
=
1 – Dividend Pay Out Ratio
Year
2008
2007
2006
2005
RER
52.63
49.65
39.93
34.19
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
8
Retained Earning Per Share 75.00% 70.00% 65.00% 60.00% 55.00% Year
12.
Dividend Yield Ratio
DYR =
Dividend Per Share
x
100
Market Price Per share
Year
2008
2007
2006
2005
DYR
3.75%
-
-
-
Market Price - Not Available for the year 2007 2006 2005
Dividend Yield Ratio 4.00% 3.00% 2.00% 1.00% 0.00% Year
Coverage Ratios 1. Fixed Charge Cover Ratio ------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
9
FCCR =
Income before Interest & Tax Interest Charges
Year
2008
2007
2006
2005
FCCR
7.05
7.98
7.98
8.65
Fixed Charge Cover Ratio 10 8 6 4 2 0 Year
2. Debt Service Coverage Ratio DSCR =
Net Profit before Interest & Tax Interest +
Principal Repayment 1- Tax Rate
Year
2008
2007
2006
2005
DSCR Principal Amount is not available.
TurnOver Ratios 1. Fixed Asset Turnover Ratio
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
10
FATR =
Net Sales
Times
Net Fixed Asset
Year
2008
2007
2006
2005
FATR
5.33
7.08
5.77
5.52
Fixed Asset Turnover Ratio 8 6 4 2 0 Year
2. Working Capital Turnover Ratio FATR =
Net Sales
Times
Current Assets – Current Liabilities
Year
WCTR
2008
2007
2006
2005
-105.30
9.87
8.09
31.94
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
11
Working Capital Turnover Ratio 50 0 -50 -100 -150 Year
3. Debtor Turnover Ratio DTR =
Credit Sales Average Receivable s
Year
DTR
2008
2007
2006
2005
29.27
40.68
33.54
25.25
Debtor Turnover Ratio 50 40 30 20 10 0 Year
4. Debt Collection Period Ratio DR =
12 or 365
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
12
Debtors Turnover Ratio
Year
2008
2007
2006
2005
DR
0.41
0.29
0.36
0.48
Debtor Collection Period Ratio 0.5 0.4 0.3 0.2 0.1 0 Year
5. Creditor Turnover Ratio CTR =
Total Purchase
s Payable( Raw Material Cost – Sundry Creditors)
Year
2008
2007
2006
2005
CTR
4.34
4.75
5.03
5.26
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
13
CreditorsTurnover Ratio 6 5 4 3 2 1 0 Year
6. Debt Payment Period DPP =
Average s Payable Average Monthly Credit Purchase(units in months)
Year
DPP
2008
2007
2006
2005
1.69
1.54
1.42
1.33
Debt Payment Period 2 1.5 1 0.5 0 Year
7. Stock/ Inventory Turnover Ratio STR =
Cost of Goods Sold During the Year Average Inventory
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
14
Year
2008
2007
2006
2005
STR
3.51
3.35
3.28
3.52
Stock Turnover Ratio 3.6 3.5 3.4 3.3 3.2 3.1 Year
Financial Ratios 1. FIXED ASSET RATIO FAR = Fixed Assets of the company Long Term Funds
2. Current Ratio CR =
Current Asset CA Current Liabilities CL
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
15
3. Liquidity Ratio Quick Ratio
= CA – Inventory Current Liabilities
4. Debt Equity Ratio DER = Total Long Term Fund Shareholders funds
Profit & Loss Statement ------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
16
Gross Sales Sales
Mar 200 Mar 2008 7 Mar 2006 Mar 2005 Mar 2004 12 12 12 12 12 330939.3 318194.8 240041.2 204825.7 154935.2 325218.3 310647 234394.1 202174.2 152087.4
Job Work / Contract receipts
0
0
0
0
0
Prcessing Charges / Service Income
0
0
0
0
0
Others operational income
5721
7547.8
5647.1
2651.5
2847.8
0 0 43631.1 287308.2
0 0 43494.5 274700.3
0 0 34019.2 206022
0 0 30634.4 174191.3
0 0 22703 132232.2
Increase/Decrease in Stock Opening Balances Work In Progress Finished Goods
330
-2736.9
-2569.1
-1458.2
1419.8
3013.2 0
2863.1 0
2644.6 0
1766.4 0
1182.2 0
Shares, Units and Bonds Other Less : Work In Progress Finished Goods
0 11030.2
0 8443.4
0 5332.9
0 4752.9
0 6756.9
2960 0
3013.2 0
2863.1 0
2644.6 0
1766.4 0
Shares, Units and Bonds Other
0 10753.4
0 11030.2
0 7683.5
0 5332.9
0 4752.9
Raw Materials Consumed
201901.9
193749.3
142638.6
119313
83413.9
Opening Raw Materials
8725.9
7326.9
6300.6
3497.2
2380.7
Purchases Raw Materials
184980.6
180556.3
133677.5
115447
79850.6
Closing Raw Materials
7785.7
8725.9
7326.9
6300.6
3497.2
Particulars No of Months
Less :Inter divisional transfers Less: Sales Returns Less: Excise Net Sales EXPENDITURE :
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
17
Other Direct Purchases / Brought in cost Others Power & Fuel Cost Employee Cost
0 15981.1 3251.9 15260.1
14592 0 3274.1 13556.3
9987.4 0 2585.1 11332.5
6651.2 18.2 2378.1 10295.1
4679.8 0 2145.2 8745.6
Other Manufacturing Expenses
22395.1
19651.3
14852.1
12666.4
9172.6
General and istration Expenses
1695
1584.4
1354.6
810.3
755.4
Selling and Distribution Expenses
9939.5
12330.5
9919.1
8665.8
7809.3
Miscellaneous Expenses
3631.1
1669.9
850
481.1
468.8
Less: Pre-operative Expenses Capitalised Total Expenditure
0 258404.6
0 243078.9
0 180962.9
0 153151.6
0 113930.6
Operating Profit (Excl OI) Other Income Interest Dividend
28903.6 7640.3 1432.4 1318.9
31621.4 3658.4 554.4 869.4
25059.1 3562.5 671.4 414
21039.7 2297.5 636.6 198.7
18301.6 1001.2 412.2 30.8
Profits on sale of FA
0
0
0
0
0
Profits on sale of Investments
1518.1
354.8
1776.4
312
39.8
Forex Exchange Gains Other Operating Profit Interest PBDT Depreciation
1376.1 1994.8 36543.9 4256.1 32287.8 6523.1
652.1 1227.7 35279.8 3685.1 31594.7 5862.9
0 700.7 28621.6 2934.9 25686.7 5209.4
0 1150.2 23337.2 2178.1 21159.1 4501.6
0 518.4 19302.8 2024.8 17278 3826
Profit Before Taxation & Exceptional Items
25764.7
25731.8
20477.3
16657.5
13452
Exceptional Income / Expenses Profit Before Tax Provision for Tax
0 25764.7 5475.5
0 25731.8 6597.2
56.5 20533.8 5245
-138.5 16519 4149.5
-528.6 12923.4 4820
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
18
Current Income Tax Deferred Tax Fringe Benefit tax Others Profits After Tax Appropriations General Reserve
1390.1 4015.4 70 0 20289.2 30427.5 0
4760 1772.2 65 0 19134.6 26902.2 0
3633.5 1421.5 190 0 15288.8 20945.4 0
3638.2 511.3 0 0 12369.5 16027.5 0
960 3860 0 0 8103.4 9340.5 0
Proposed Equity Dividend
5784.3
5780.7
4979.4
4521.9
2821.1
Preference Dividend
0
0
0
0
0
Corporate Dividend Tax Statutory Reserve
812.5 0
982.5 0
698.4 0
634.2 0
361.4 0
Other Appropriation
0
0.7
0
15.4
0
Profit & Loss Balance C/F Equity Dividend % Earnings Per Share Book Value
13830.7 150 52.63 202.54
10138.3 150 49.65 177.33
7767.6 130 39.94 143.58
5856 125 34.19 113.15
3658 80 22.96 101.08
Ratios Analysis Sr.No:
Profitability Ratios
2008
2007
2006
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
2005
19
Return on Investment (ROI)/Return on Capital Employed [Operating Profit/Capital Employed]
(Operating Profit)/(Share Capital+Reserves & Surplus+Long Term Loans)
25.88%
32.43%
33.78%
35.32%
Return on Shareholders Fund
(Net Profit after Income Tax)/ (Share Capital + Total Reserves)
25.88%
27.85%
27.61%
30.09%
3
Return on Equity Shareholders Fund
(Net Profit after Interest, Tax & Preference Dividend)/ (Equity Capital + Total Reserves)
25.88%
27.85%
27.61%
30.09%
4
Return on Total Assets
Net Profit after Tax/(Total Assets)
14.37%
17.59%
18.04%
18.72%
5
Return on Gross Capital Employed
Net PBIT/(Net Fixed Assets + Current Assets)
21.26%
27.04%
27.63%
28.51%
Earning per Share (EPS)
Net Profit after Tax/(Equity Capital/Face Value of the Share)
52.63
49.65
39.93
34.19
Price Earning Ratio
Market Price per Equity Share/Earning Per Share
7.60
8.06
10.02
11.70
8
Gross Profit Ratio
(Net Sales - Cost of goods Sold)/Net Sales = (Net Sales Rawmaterial Cost)/Net Sales
29.61%
30.47%
32.01%
32.34%
9
Net Profit Ratio
Net Operating Profit/Net Sales
12.72%
12.84%
13.89%
13.40%
#
Operating (OR) Expense Ratio
Operating Cost/Net Sales = (1-Net Operating Ratio)
89.94%
88.49%
87.84%
87.92%
Pay-Out Ratio
Dividend per Equity Share/Earning per Equity Share
28.51%
30.20%
32.35%
34.31%
Retained Earnings Ratio
Retained Earnings/Total Earnings = ( 1 - Pay-Out Ratio )
71.49%
69.79%
67.43%
63.44%
7.98
7.98
8.65
1
2
6 7
#
#
Dividend per Share/Market Price per Share
#
Dividend Yield Ratio Coverage Ratios
1
Fixed Interest Cover
2 3
Fixed Dividend Cover Debt Service Coverage Ratio
1
Turnover Ratios (Activity (OR) Efficiency Ratios Fixed Asset Turn Over Ratio
Net Sales/Net Fixed Assets
2
Working Capital Turn Over Ratio
Net Sales/(Currents Assets Current Liabilities)
Debtors Turnover Ratio
Total Sales/s Receivable
3
Income before Interest & Tax/Interest Charges Net Profit after Interest & Tax/Preferred Dividend
3.75%
7.05 NA
NA
NA
NA
5.33
7.08
5.77
5.52
-105.30
9.87
8.09
31.94
29.27
40.68
33.54
25.25
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
20
Debt Collection Period Ratio
s Receivables(Debtors)/Monthl y Credit Sales (Units in Months)
0.41
0.29
0.36
0.48
5
Creditors Turnover Ratio
Total Purchaces/s Payables = (Rawmaterial Cost/Sundry Creditors)
4.34
4.75
5.03
5.26
6
Debt Payment Period Enjoyed Ratio (Average age of Payable)
Average s Payable/ (Average Monthly Credit Purchase) (Units in Months)
1.69
1.54
1.42
1.33
7
Stock Turnover (OR) Inventory Turnover Ratio
Costs of Goods Sold during the year/Average Inventory
3.51
3.35
3.28
3.52
4
Balance Sheet Balance Sheet
(Rs.in Millions)
Particulars
Mar 2008
Mar 2007
Mar 2006
Mar 2005
Mar 2004
SOURCES OF FUNDS -
Share Capital
3855.40
3854.10
3828.70
3617.90
3530.00
3854.90
3853.60
3828.20
3617.40
3529.50
Adjustments to Equitys
0.00
0.00
0.00
0.00
0.00
Preference Capital Paid Up
0.00
0.00
0.00
0.00
0.00
Unclassified Shares Paid Up
0.00
0.00
0.00
0.00
0.00
10.00
10.00
10.00
10.00
10.00
0.00
0.00
0.00
0.00
38.30
74539.60
64843.40
51542.00
37496.00
32367.70
15372.20
19364.00
18287.00
14738.90
16813.40
0.00
0.00
0.00
0.00
0.00
Profit & Loss Balance
13830.70
10138.30
7767.60
5856.00
3658.00
General Reserves
41164.30
31164.30
21306.20
13536.30
8531.50
3343.50
3343.50
3343.50
3341.50
3341.50
Capital Redemption Reserve
22.80
22.80
22.80
22.80
22.80
Exchange Fluctuation reserve
0.00
0.00
0.00
0.00
0.00
Statutory Reserves
0.00
0.00
0.00
0.00
0.00
805.60
810.00
814.40
0.00
0.00
Equity - Paid Up
Face Value Share warrants & Outstandings -
Total Reserve Securities Capital Reserves
Debenture Redemption Reserve
Other Reserves
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
21
-
Revaluation reserve
255.10
259.50
263.90
0.00
0.00
Shareholder's Funds
78395.00
68697.50
55370.70
41113.90
35897.70
Secured Loans
24619.90
20220.40
8227.60
4898.10
9426.50
1705.00
755.00
755.00
825.00
1625.00
Term Loans – Banks
0.00
0.00
0.00
0.00
2859.80
Term Loans – Institutions
0.00
0.00
0.00
2217.60
2251.10
Working Capital Loans - Bank
0.00
0.00
0.00
0.00
0.00
Deferred Credit
0.00
0.00
0.00
0.00
0.00
Non Convertible Debentures
Hire Purchase / Financial Lease
-
0.00
0.00
0.00
0.00
0.00
Other Secured
24619.90
20220.40
8227.60
2680.50
4315.60
Unsecured Loans
38185.30
19871.00
21140.80
20056.10
3171.20
0.00
0.00
0.00
0.00
0.00
Commercial Paper
1000.00
0.00
0.00
0.00
0.00
Deferred Tax Loan
0.00
0.00
3.60
1.70
2.90
37185.30
19871.00
21137.20
20054.40
3168.30
62805.20
40091.40
29368.40
24954.20
12597.70
141200.20
108788.90
84739.10
66068.10
48495.40
108308.30
87758.00
79715.50
66119.50
59854.00
54435.20
48945.40
44015.10
34542.80
30236.90
0.00
0.00
0.00
0.00
0.00
53873.10
38812.60
35700.40
31576.70
29617.10
0.00
0.00
0.00
0.00
0.00
50649.60
25133.20
9511.90
5388.40
2860.90
Pre-operative Expenses pending
0.00
0.00
0.00
0.00
0.00
Assets in transit
0.00
0.00
0.00
0.00
0.00
49102.70
24770.00
20151.50
29120.60
30567.70
4896.90
2182.80
2182.80
2772.80
2779.00
10170.50
4133.30
4127.70
3737.30
4142.20
7907.90
519.90
1755.50
10007.50
14909.60
26127.40
17934.00
12085.50
12603.00
8736.90
25305.50
13230.80
15500.00
12608.50
7327.60
Fixed Deposits – Public
Other Unsecured Loan Total Debts
Total Liabilities APPLICATION OF FUNDS : Gross Block
Less: Accumulated Depreciation Less: Impairment of Assets Net Block Lease Adjustment A/c Capital Work in Progress
-
Investments Quoted Equity Unquoted Equity Units
Other Investments
Market Value of Quoted Investements
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
22
Current Assets, Loans & Advances -
Inventories
24218.30
25009.50
20122.40
16013.60
11474.40
Raw Materials
7785.70
8725.90
7326.90
6300.60
3497.20
Work-in Progress
2960.00
3013.20
2863.10
2644.60
1766.40
0.00
0.00
0.00
0.00
0.00
Finished Goods Stores and Spare Other Inventory -
Sundry Debtors
Debtors more than Six months Debtors Others
Less : Provisions for Doubtful Debts Cash and Bank
1111.50
1390.00
1355.00
1423.50
1078.10
12361.10
11880.40
8577.40
5644.90
5132.70
11307.30
7821.80
7157.80
8113.20
6149.90
956.80
883.60
698.60
717.40
1379.20
10696.50
7256.20
6802.10
7916.80
5801.10
346.00
318.00
342.90
521.00
1030.40
23973.10
8267.60
11194.30
20050.40
7704.90
Other Current Assets
8402.00
7217.90
353.20
309.40
212.60
Loans and Advances
35937.10
56803.70
57785.40
26975.40
11415.20
103837.80
105120.50
96613.10
71462.00
36957.00
Sundry Creditors
46531.80
40799.40
28384.80
22697.30
22771.40
Acceptances
37385.10
20038.00
26973.90
28072.80
15843.30
0.00
0.00
0.00
0.00
0.00
80.40
66.30
54.80
35.40
70.10
287.50
254.20
190.80
195.90
160.40
2387.20
2478.90
3398.90
3746.30
3398.80
19894.30
13643.20
12150.40
11260.60
4306.40
5784.30
5780.70
4979.40
4521.90
1421.60
Total Current Assets
Less : Current Liabilities and Provisions
Bank Overdraft / Short term credit
Unclaimed Dividend
Interest Accrued But Not Due
Other Liabilities
-
Provisions
Proposed Equity Dividend
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
23
Provision for Corporate Dividend Tax
812.50
982.50
698.40
634.20
182.10
Provision for Tax
0.00
0.00
0.00
0.00
0.00
Other Provisions
13297.50
6880.00
6472.60
6104.50
2702.70
106566.30
77280.00
71153.60
66008.30
46550.40
-2728.50
27840.50
25459.50
5453.70
-9593.40
60.50
100.90
141.20
181.60
221.90
Deferred Tax Assets
3974.50
1766.00
1507.50
1026.90
1350.60
Deferred Tax Liability
13731.70
9634.30
7732.90
6679.70
6492.10
-9757.20
-7868.30
-6225.40
-5652.80
-5141.50
141200.20
108788.90
84739.10
66068.20
48532.70
20430.00
14717.50
9928.60
3116.20
2672.80
Total Current Liabilities
Net Current Assets
Miscellaneous Expenses not written off
Deferred Tax Assets / Liabilities
Total Assets
Contingent Liabilities
------- Management ing ---- Ratio Analysis – TATA Motors Limited -------
24
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