CHAPTER-I

INTRODUCTION
RATIO ANALYSIS:
Ratio analysis is a fundamental tool used to evaluate the financial
performance and health of a company by analyzing relationships between
various financial variables in its financial statements. It involves
calculating and interpreting ratios that provide insights into different
aspects of a company's operations, profitability, liquidity, solvency, and
efficiency. Ratio analysis helps stakeholders, such as investors, creditors,
and management, assess a company's financial position, make informed
decisions, and compare its performance with competitors and industry
benchmarks. Common ratios include liquidity ratios (e.g., current ratio,
quick ratio), profitability ratios (e.g., net profit margin, return on assets),
solvency ratios (e.g., debt-to-equity ratio, interest coverage ratio), and
efficiency ratios (e.g., inventory turnover, asset turnover).

IMPORTANCE AND USES OF RATIO ANALYSIS

➢ Analysis of Financial Statements.

➢ Helps in Understanding the Profitability of the Company.

➢ Analysis of Operational Efficiency of the Firms

➢ Liquidity of the Firms.

➢ Helps in Identifying the Business Risks of the Firm.

➢ Helps in Identifying the Financial Risks of the Company.

➢ For Planning and Future Forecasting of the Firm.

➢ To Compare the Performance of the Firms.

1
CURRENT RATIO:

The current ratio is a financial ratio that measures a company's ability to

pay its short-term obligations with its short-term assets. It is calculated by
dividing a company's current assets by its current liabilities. A higher
current ratio indicates a greater ability to cover short-term liabilities.

QUICK RATIO:
The quick ratio, also known as the acid-test ratio, is a financial ratio that
measures a company's ability to pay its short-term obligations with its
most liquid assets. It is similar to the current ratio but is more conservative
because it excludes inventory from current assets. The quick ratio is
calculated by dividing a company's liquid assets (such as cash,
marketable securities, and accounts receivable) by its current liabilities.
This ratio provides a more stringent measure of a company's liquidity than
the current ratio because it excludes inventory, which may not be easily
converted to cash in the short term. A higher quick ratio indicates a
stronger liquidity position.

SOLVENCY RATIO:

The quick ratio, also known as the acid-test ratio, is a financial ratio that
measures a company's ability to pay its short-term obligations with its
most liquid assets. It is similar to the current ratio but is more conservative
because it excludes inventory from current assets. The quick ratio is
calculated by dividing a company's liquid assets (such as cash,
marketable securities, and accounts receivable) by its current liabilities.
This ratio provides a more stringent measure of a company's liquidity than
the current ratio because it excludes inventory, which may not be easily
converted to cash in the short term. A higher quick ratio indicates a
stronger liquidity position.
2
DEBT-TO-EQUITYY RATIO:

The quick ratio, also known as the acid-test ratio, is a financial ratio that
measures a company's ability to pay its short-term obligations with its
most liquid assets. It is similar to the current ratio but is more conservative
because it excludes inventory from current assets. The quick ratio is
calculated by dividing a company's liquid assets (such as cash,
marketable securities, and accounts receivable) by its current liabilities.
This ratio provides a more stringent measure of a company's liquidity than
the current ratio because it excludes inventory, which may not be easily
converted to cash in the short term. A higher quick ratio indicates a
stronger liquidity position.

NET PROFIT RATIO:

The net profit ratio, also known as the net profit margin, is a financial ratio
that measures a company's profitability by expressing its net profit as a
percentage of its revenue. It indicates how much profit a company
generates from its total revenue. The net profit ratio is an important metric
for investors and analysts to assess a company's profitability and
efficiency in managing its expenses. A higher net profit ratio indicates that
a company is more efficient in converting revenue into profit.

STOCK TURNOVER RATIO:

The stock turnover ratio, also known as inventory turnover ratio, is a

financial ratio that measures how many times a company sells and
replaces its inventory during a specific period. It is calculated by dividing
the cost of goods sold (COGS) by the average inventory for the period. A
high stock turnover ratio indicates that a company is selling its inventory
quickly and efficiently, which is generally considered positive. However, a

3
very high ratio could also indicate a risk of stockouts if the company is not
able to replenish its inventory quickly enough.

FIXED ASSET TURNOVER RATIO:

The fixed asset turnover ratio is a financial ratio that measures how
efficiently a company uses its fixed assets to generate revenue. It is
calculated by dividing a company's net sales by its average fixed assets.
The fixed asset turnover ratio indicates how efficiently a company is using
its fixed assets to generate revenue. A higher ratio indicates better
efficiency, as it means the company is generating more revenue per unit
of fixed assets.

FIXED ASSET TO CURRENT ASSET RATIO:

This ratio would indicate how efficiently a company uses both its fixed
assets and current assets to generate revenue. A higher ratio would
suggest that the company is effectively utilizing its assets to generate
sales. However, since this ratio is not standard, it's essential to interpret
its meaning cautiously and consider other relevant financial metrics for a
comprehensive analysis.

RESERVE TO EQUITY CAPITAL RATIO:

The reserve to equity share capital ratio is a financial ratio that indicates
the proportion of a company's equity share capital that is covered by its
reserves. It is calculated by dividing the total reserves (including retained
earnings, general reserves, and any other reserves) by the equity share
capital. A higher ratio indicates that a larger portion of the equity share
capital is covered by reserves, which can be seen as a positive sign of
financial stability and strength. It suggests that the company has built up

4
reserves over time, which can be used to support future growth or absorb
potential losses.

PROPRIETARY RATIO:

The proprietary ratio, also known as the equity ratio or net worth to total
assets ratio, is a financial ratio that measures the proportion of a
company's assets that are financed by its owners' equity. It indicates the
extent to which the company relies on equity financing rather than debt
financing. A higher proprietary ratio indicates that a larger proportion of
the company's assets is funded by equity, which can be seen as a positive
sign of financial strength and stability. It suggests that the company has a
lower reliance on debt financing, which can reduce financial risk.

NET WORKING CAPITAL RATIO:

The net working capital ratio, also known as the working capital ratio or
simply the current ratio, is a financial ratio that measures a company's
ability to meet its short-term obligations with its short-term assets. It is
calculated by dividing a company's current assets by its current liabilities.
A net working capital ratio of greater than 1 indicates that a company has
more current assets than current liabilities, which suggests that it is in a
strong position to meet its short-term obligations. Conversely, a ratio of
less than 1 indicates that a company may have difficulty meeting its short-
term obligations.

RETURN ON CAPITAL EMPLOYED RATIO:

The Return on Capital Employed (ROCE) ratio is a financial ratio that

measures a company's profitability and the efficiency with which its capital
is being used. It indicates the return the company is generating from its
capital employed, which includes both debt and equity. ROCE is a useful

5
measure for investors and analysts to assess how effectively a company
is using its capital to generate profits. A higher ROCE indicates that a
company is generating more profit per unit of capital employed, which is
generally seen as a positive sign of efficiency and profitability.

INTRODUCTION TO AUTOMOBILE INDUSTRY:

The automobile industry is a major contributor to the global economy.

The automobile industry is mainly comprised of the world's largest
passenger car and light truck suppliers. Most members of the industry sell
vehicles in the global market, including both developed and developing
countries, through vast dealership networks. Automobile manufacturers
offer a wide range of makes and models, but brand integration is often
limited at the marketing, advertisement, and dealership levels. The bulk of
these companies operate production facilities in multiple geographic
regions.

INDIAN AUTOMOBILE INDUSTRY:

“India enjoys a strong position in the global heavy vehicles market as it

is the largest tractor producer, second-largest bus manufacturer, and
third-largest heavy truck manufacturer in the world. India’s annual
production of automobiles in FY22 was 22.93 million vehicles. India has a
strong market in terms of domestic demand and exports. In
November 2023, total passenger vehicle sales reached 3,34,130*. Sales
of Passenger Vehicles in November 2023 have been the highest, with a
marginal growth of 3.7%, compared to November 2022. In FY23, total
automobile exports from India stood at 47,61,487. This sector's share of
the national GDP increased from 2.77% in 1992-1993 to around 7.1%
presently. It employs about 19 million people directly and indirectly."
6
MAJOR COMPANIES IN THE INDUSTRY:

➢ Tata Motors

➢ Maruti Suzuki

➢ Mahindra & Mahindra

➢ Hyundai Motors

➢ Hero MotoCorp

➢ Honda Motor Company

➢ Kia Motors

➢ Bajaj Auto

➢ Ashok Leyland

➢ Eicher Motors

7
INTRODUCTION TO COMPANY:

Tata Motors is an Indian multinational car manufacturer that was

founded in 1945. It’s head quarter is situated in Mumbai, Maharashtra,
India. Tata Motors is among the world’s leading manufacturers of
automobiles, producing buses, trucks, sports cars, and coaches. It is also
a manufacturer of military vehicles. The company makes one of India's
safest vehicles, with excellent safety features and high quality. The price
range is between 4.70 lakhs and 16.25 lakhs. Tata Motors, a $35 billion
organization and a subsidiary of the USD 113 billion Tata group, has
operations in the, South Korea, United Kingdom, Thailand, Indonesia and
South Africa through a solid worldwide network of 113 subsidiary and
associate companies, including Tata Daewoo in South Korea and Jaguar
Land Rover in the United Kingdom. (TAT) With 9 million cars on Indian
streets, Tata Motors is the market leader in commercial vehicles and one
of the largest passenger vehicle manufacturers. Tata Motors strives to
pioneer new technologies that spark the interest of GenNext consumers,
with design and R&D centers in India, the United Kingdom, Italy, and
Korea.

8
1.1 OBJECTIVE OF THE STUDY:

➢ To simplify accounting information.

➢ To determine liquidity or Short-term solvency and Long-term

solvency.

➢ To assess the operating efficiency of the business.

➢ To analyze the profitability of the business.

➢ To compare the statement for two years.

9
1.2 SCOPE OF THE STUDY:

The scope of the study is limited to collecting financial data published in

the annual reports of the company every year. The analysis is done to

suggest the possible solutions. The study is carried out for 2 years (2021-

2022 and 2022-2023).

A study of the Ratio Analysis involves an examination of long term as well

as short term sources that a company taps in order to meet its

requirements of finance. The scope of the study is confined to the sources

that TATA MOTORS LTD tapped over the years under study i.e. 2022-

23.

10
1.3 RESEARCH METHODOLOGY:

The procedure adopted for conducting the research requires a lot of

attention as it has direct bearing on accuracy, reliability and adequacy of
results obtained. It is due to this reason that research methodology, which
we used at the time of conducting the research, needs to be elaborated
upon. Research Methodology is a way to systematically study and solve
the research problems. If a researcher wants to claim his study as a good
study, he must clearly state the methodology adapted in conducting the
research the research so that it way be judged by the reader whether the
methodology of work done is sound or not.

Meaning Research:
Research is defined as "a scientific and systematic search for
pertinent information on a specific topic". Research is an art of scientific
investigation. Research is a systematized effort to gain now knowledge.
It is a careful investigation or inquiry especially through search for new
facts in any branch of knowledge. Research is an academic activity and
this term should be used in a technical sense. Research comprises
defining and redefining problems, formulating in procedure. Research
Design is the conceptual structure with in which research in conducted.
It constitutes the blueprint for the collection measurement and analysis
of data. Research Design includes and outline of what the researcher
will do form writing the hypothesis and it operational implication to the
final analysis of data. A research design is a framework for the study and
is used as guide in collection and analyzing the data. It is a strategy
specifying which approach will be used for gathering and analyzing the
data. It also included the time and cost budget since most studies are

11
done under these two cost budget since most studies are done under
theses two constraints.

Research Design:

1) What is the study about?

2) Why is the study being made?

3) Where will the study be carried out?

4) What type of data is required?

5) Where can be required data be found?

6) What period of time will the study include?

7) What will be sample design?

8) What techniques of data collection will be used?

9) How will the data be analyzed?

10) In what style will the report be prepared?

12
Use and Significance of Ratio Analysis

The ratio is one of the most powerful tools of financial analysis. It is

used as a device to analyze and interpret the financial health of
enterprise.

Thus ratios have wide applications and are of immense use today.

Data sources

The study is based on secondary data. However the primary data is

also collected to fill the gap in the information.

➢ Primary data will be through regular interaction with the officials of

TATA MOTORS LIMITED.

➢ Secondary data collected from annual reports and also existing

manuals and like company records balance sheet and necessary

records.

13
1.4 LIMITATIONS

➢ The study is based on only secondary data.

➢ The period of study was 2021-2022 and 2022-2023 two financial

years only.

➢ The accuracy and correctness of ratios are totally dependent upon

the reliability of the data contained in financial statements on the

basis of which ratios are calculated.

➢ Due to limited time only twelve Ratios have been analyzed.

14
 CHAPTER-II

REVIEW OF LITERATURE

Review of Literature refers to the collection of the results of the various

researches relating to the present study. It takes into consideration the
research of the previous researchers which are related to the present
research in any way. Here are the reviews of the previous researches
related with the present study:

Bollen (1999) conducted a study on Ratio Variables on which he found

three different uses of ratio variables in aggregate data analysis: (1) as
measures of theoretical concepts. (2) as a means to control an extraneous
factor, and (3) as a correction for heteroscedasticity. In the use of ratios
as indices of concepts, a problem can arise if it is regressed on other
indices or variables that contain a common component. For example, the
relationship between two per capita measures may be confounded with
the common population component in each variable. Regarding the
second use of ratios, only under exceptional conditions will ratio variables
be a suitable means of controlling an extraneous factor. Finally, the use
of ratios to correct for heteroscedasticity is also often misused. Only under
special conditions will the common form forgers soon with ratio variables
correct for heteroscedasticity. Alternatives to ratios for each of these
cases are discussed and evaluated.

15
Cooper (2000) conducted a study on Financial Intermediation on which
he observed that the quantitative behavior of business-cycle models in
which the intermediation process acts either as a source of fluctuations or
as a propagator of real shocks. In neither case do we find convincing
evidence that the intermediation process is an important element of
aggregate fluctuations. For an economy driven by intermediation shocks,
consumption is not smoother than output, investment is negatively
correlated with output, variations in the capital stock are quite large, and
interest rates are procyclical. The model economy thus fails to match
unconditional moments for the U.S. economy. We also structurally
estimate parameters of a model economy in which intermediation and
productivity shocks are present, allowing for the intermediation process to
propagate the real shock. The unconditional correlations are closer to
those observed only when the intermediation shock is relatively
unimportant.

Gerrard (2001) conducted a study on The Financial Performance on

which he found that Using ratio analysis the financial performance of a
sample of independent single-plant engineering firms in Leeds is
examined with regard to structural and locational differences in
establishments. A number of determinants of performance are derived
and tested against the constructed data. base. Inner-city engineering firms
perform relatively less well on all indicators of performance compared with
outer-city firms. The study illustrates the importance of using different
measures of performance since this affects the magnitude and
significance of the results. Financial support is necessary to sustain
engineering in the inner city in the long run.

16
Schmidgall (2003) conducted a study on Financial Analysis Using the
Statement of Cash Flows on which he observed that Managers use many
financial ratios to judge the health of their businesses. With the recent
requirement of a statement of cash flow (SCF) by the Financial Accounting
Standards Board, managers now have a new set of ratios that will give a
realistic picture of the business. The ratios include cash flow-interest
coverage, cash flow-dividend coverage, and cash flow from operations to
cash flow in investments. These ratios are particularly useful because they
show changes in a hotel or restaurant's cash position over time, rather
than at a given moment, as is the case with many other ratios.

Murinde (2003) conducted study on Corporate Financial Structures on

which he observed that the financial structure of a sample of Indian non-
financial companies using a new and unique dataset consisting of a panel
containing the published accounts of almost 900 companies that
published a full set of accounts every year during 1989-99. In a new
departure in the literature, the dataset includes quoted and unquoted
companies. We compare the sources-uses approach to analyzing
company financial structures with the asset-liability approach. We use
both approaches to characterize and to compare the financial structures
of Indian companies over time; between quoted and unquoted companies;
and between companies which belong to a business group and those that
do not. Finally, we compare our results to those obtained previously for
India and for the industrial countries.

17
McMahon (2005) conducted a study on Financial Information on which
he found that financial statements mean little to the uninitiated. This paper,
explains, in layman's terms, how to understand financial information. It
covers measures of profitability. The second article will cover measures
of company liquidity and the use of financial ratios. This paper continues
to explain how to interpret and understand financial information. It deals
with measures of liquidity. solvency and fund flow and describes how to
establish standards against which a company's financial ratios can be
compared.

Lee (2008) conducted a study on Financial Risk on which he observed

that Financial researchers, including those concentrating on the lodging
industry, use various financial risk measures for their studies. Examples
of those risk measures are beta, eamings variability, bankruptcy
probability, debt-to-equity ratio and book-to-market ratio. The purpose of
this study is, first, to descriptively investigate various financial risk
measures used in the lodging financial literature by performing factor
analysis and identifying four distinct risk groups. Second, this study
examines the predictive ability of the four risk groups for lodging firm
performance. The findings of this study suggest that strategic and stock
performance risk factors better represent a lodging firm's financial risk
than do bankruptcy and firm performance risk factors, and also, ROA than
ROE better estimates lodging firm performance in terms of their
relationships with financial risk factors.

18
Johnson (2009) conducted a study on Financial Ratio patterns on which
he found that the properties and characteristics of financial ratios have
received considerable attention in recent years with interest primarily
focused on determining the predictive ability of financial ratios and related
financial data. Principal areas of investigation have included the prediction
of corporate bond ratings, and the anticipation of financial impairment].
Related studies have examined the characteristics of merged firms the
differences in financial ratio averages among industries whether firms
seek to adjust their financial ratios toward industry averages the
relationship between accounting-determined and market-determined risk
measures, and the influence of financial ratios on analysts' judgments
about impending bankruptcy The general conclusion to emerge from
these various research efforts is that a number of financial ratios have
predictive and descriptive utility when properly employed.

To summarize the literature. Ratio analysis is a key dimension of financial

management, suggesting a relationship between profit and loss as
mentioned in the balance sheet of an organization. Its appropriate use will
go toward giving a true picture of the financial health of the unit. Its benefits
can be seen in areas of management, production, marketing, personnel
management etc. summarize the literature. Ratio analysis is a key
dimension of financial management, suggesting a relationship between
profit and loss as mentioned in the balance sheet of an organization. Its
appropriate use will go toward giving a true picture of the financial health
of the unit. Its benefits can be seen in areas of management, production,
marketing, personnel management etc.

19
 CHAPTER-III

ORGANIZATIONAL PROFILE

Tata Motors Limited

Formerly Public
Industry Automotive
Founded 1945
Founder Jehangir Ratanji Dadabhoy Tata
Headquarters Mumbai, Maharashtra, India.
Area served Worldwide
Key people Natarajan
Chandrasekaran (Chairman)
Guenter Butschek (CEO)
Martin Uhlarik (CDO)
Products Automobiles
Luxury vehicles
Commercial vehicles
Automotive parts
Pickup trucksSUVs
Production output 1.1 Million (approx)(2021)
Services Automotive financeVehicle leasing
Vehicle service

20
Revenue ₹350,600.15 crore (US$44 billion)
(2023)
Operating income ₹7,059.30 crore (US$880 million)
(2023)
Net income ₹2,414.30 crore (US$300 million)
(2023)
Total assets ₹336,081.38 crore (US$42 billion)
(2023)
Total equity ₹45,321.80 crore (US$5.7 billion)
(2023)
Number ofemployees ~81,811+(2023)
Parent Tata Group
Subsidiaries Tata Motors Cars
Jaguar Land Rover
Tata Daewoo
Tata Marcopolo
Tata Technologies
Tata Hispano
Tata Hitachi
Construction
Machinery
Rating S&P BB/Stable

Subsidiaries include British Jaguar Land Rover and South Korean Tata
Daewoo. Tata Motors has joint ventures with Hitachi (Tata Hitachi
Construction Machinery) and Stellantis, which makes vehicle parts for Fiat

21
Chrysler and Tata-branded vehicles. On 12 October 2021, private equity
firm TPG invested $1 billion in Tata Motors' electric vehicle subsidiary.

Tata Motors has auto manufacturing and vehicle plants in Jamshedpur,

Pantnagar, Lucknow, Sanand, Dharwad, and Pune in India, as well as in
Argentina, South Africa, the United Kingdom, and Thailand. It has
research and development centers in Pune, Jamshedpur, Lucknow,
Dharwad, India and South Korea, the United Kingdom, and Spain. Tata
Motors is listed on the BSE (Bombay Stock Exchange), where it is a
constituent of the BSE SENSEX index, the National Stock Exchange of
India, and the New York Stock Exchange. The company is ranked 265th
on the Fortune Global 500 list of the world's biggest corporations as of
2019.

On 17 January 2017, Natarajan Chandrasekaran was appointed

chairman of the company Tata Group. Tata Motors increased its UV
market share to over 8% in FY2019.

22
History

Tata Sierra (1991-

2000)

Tata Sumo (1994–2019)

23
Tata motors was founded in1945, as locomotive manufacture. Tata
Groups entered the commercial vehicle sector in 1954 after forming a joint
venture with Daimler-Benz of Germany in which Tata developed a
manufacturing facility in Jamshedpur for Daimler lorries.

By November 1954 Tata and Daimler manufactured their first goods carrier
chassis at their Jamshedpur plant with 90-100 hp and capacity of 3-5 tons.
After years of dominating the commercial vehicle market in India, Tata
Motors entered the passenger vehicle market in 1991 by launching the Tata
Sierra, a sport utility vehicle based on the Tata Mobile platform. Tata
subsequently launched the Tata Estate (1992; a station wagon design
based on the earlier Tata Mobile), the Tata Sumo (1994, a 5-door SUV) and
the Tata Safari (1998).

Tata Indica (first generation)

Tata launched the Indica in 1998. A newer version of the car, named Indica
V2, later appeared. Tata Motors also exported cars to South Africa.

24
In the 2000s, Tata Motors made a series of acquisitions and partnerships,
acquiring Daewoo's South Korea-based truck manufacturing unit,[13] a joint
venture with the Brazil- based Marcopolo, Tata Marcopolo Bus,[14] Jaguar
Land Rover., Hispano Carrocera, and an 80% stake in the Italian design
and engineering company Trilix

PRODUCT LIST

PASSENGER VEHICLES

Model Year of
Introduction
Hatchbak

Tata Tiago 2016

Tata Altroz 2020

Sedan

Tata Tigor 2016

SUV/Crossover

Tata Punch 2021

Tata Nexon 2017

Tata Harrier 2018

Tata Safari 2021

Electric

25
 Tata Nexon 2020
EV
Tata Tigor EV 2021

Tata Tiago 2022

EV
Tata Punch 2023
EV

COMMERCIAL VEHICLE

❖ Tata ace

❖ Tata ace Zip

❖ Tata Ace EV

❖ Tata Super Ace

❖ Tata Intra

.a Tata Intra V10

b. Tata Intra V20

. Tata Intra V30

c

d. Tata Intra V50

❖ Tata Xenon XT

❖ Tata Yodha

❖ Tata Ace Mega

26
❖ Tata Iris

❖ Tata TL/Telcoline/207 Pick-up truck

❖ Tata 407 Ex and Ex2

❖ Tata 709 Ex

❖ Tata 807 (Steel cabin chassis, cowl chassis,

medium bus chassis, steel cabin + steel body

chassis)

❖ Tata 809 Ex and Ex2

❖ Tata 909 Ex and Ex2

❖ Tata 1210 SE and SFC (Semi Forward)

❖ Tata 1210 LP (Long Plate)

❖ Tata 1109 (Intermediate truck/ LCVbus)

❖ Tata 1512c (Medium bus chassis)

❖ Tata 1515c/1615 (Medium buschassis)

❖ Tata 1612c/1616c/1618c (Heavy buschassis)

❖ Tata 1623 (Rear-engined low-floor buschassis)

❖ Tata 1518C (Medium truck) 10 ton

❖ Tata 1613/1615c (Medium truck)

❖ Tata 1616/1618c (Heavy duty truck)

❖ Tata 2515c/2516c/2518c (Heavy duty10-wheeler

truck)

27
 ❖ Tata Star bus (Branded buses for city,intercity, school

bus, and standard passenger transportation)

❖ Tata Divo (Hispano Divo)

❖ Tata City Ride (12- to 20-seater busesfor intracity

use)

❖ Tata 3015 (Heavy truck)

❖ Tata 3118 (Heavy truck) (8×2)

❖ Tata 4923 (Ultraheavy truck) (6×4)

❖ Tata Novus

❖ Tata Prima

❖ Tata SIGNA series

❖ Tata Ultra series (ICV Segment)Tata Winger - (Maxivan)

ELECTRIC VEHICLE

Tata Motors has unveiled electric versions of the Tata Indica passenger
car powered by TM4electric motors and inverters, as well as the Tata Ace
commercial vehicle, both of which run on lithium batteries which
launched in 2022.

In 2008 Tata Motors' UK subsidiary, Tata Motors European Technical

Centre, bought a 50.3%holding in electric vehicle technology firm Miljøbil
Grenland/Innovasion of Norway for US$1.93 million, and planned to
launch the electric Indica hatchback in Europe the following year. In
September 2010, Tata Motors presented four CNG–Electric Hybrid
low- floored Starbuses to the Delhi Transport Corporation, to be used

28
during the 2010 Commonwealth Games. These were the first
environmentally friendly buses to be used for public transportation in
India.

In December 2019, Tata Motors unveiled the Nexon EV, an SUV with a
30.2KWh lithium-ion battery and a consistent range of 312 km on a
single charge. It is also equipped with fast charging technology, which
can charge the vehicle from 0% - 80% in 60 minutes. With 525 units of
Nexon EV sold in India last month, Tata Nexon EV was the best-selling
electric carin the month of April 2021 in India.

Tata Passenger Electric Mobility is a subsidiary which produces electric

cars under the brand name Tata Motors.

LIST OF TATA ELECTRIC VEHICLES:

❖ Tata Nexon EV

❖ Tata Tigor EV

❖ Tata Altroz EV

❖ Tata Tiago EV

❖ Tata Ace EV

❖ Tata Punch EV

29
ELECTRIC VEHICLE CONCEPTS

➢ Tata Curvv

➢ Tata Avinya

➢ Tata EVision

➢ Harrier.ev

➢ Sierra.ev

DISCONTINUED VEHICLE

❖ Tata Telcoline (1988–2010)

❖ Tata Sierra (1991–2003)

❖ Tata Estate (1992–2000)

❖ Tata Sumo (1994–2019)

❖ Tata Indica (1998–2015)

❖ Tata Spacio (2000-2011)

❖ Tata Indigo (2002–2015)

❖ Tata Indigo Marina (2006–2009)

❖ Tata Xenon (2007–2018)

❖ Tata Sumo Grande (2008–2016)

❖ Tata Vista (2008–2015)

❖ Tata Nano (2008–2018)

30
❖ Tata Manza (2009–2016)

❖ Tata Venture (2010–2017)

❖ Tata Aria (2010–2017)

❖ Tata Zest (2014–2020)

❖ Tata Bolt (2014–2019)

❖ Tata Hexa (2017–2020)

31
 CHAPTER-IV

ANALYSIS AND INTERPRETATION

Table:1

The table showing the Current ratio of the TATA MOTORS LTD,

for the year 2021-2022 and 2022-23.

S.NO YEAR CURRENT RATIO

1 2021-22 0.57:1

2 2022-23 0.45:1

Note:

Generally, a Current Ratio 2:1 is considered healthy.

Inference:

From the above table current ratio is 0.57:1 in 2021-22 and 0.45:1 in

2022-23 indicates that the company may have difficulties in meeting its

short-term obligations with its current asset alone.

32
Table: 1.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Current Asset:

Inventories 3,718.49 3,142.96

Financial asset 10,809.17 7,252.87

Other current asset 1,091.95 1,219.18

Total 15,619.61 11,499.95

Current Liabilities

Financial liabilities 24,287.81 22,868.51

Provision 608.89 408.89

Current tax

liabilities 49.67 53.66

Other current

liabilities 2047.27 2511.08

Total 26,992.81 25,803.53

33
Chart:1

The chart showing the comparison current ratio for last two year.

0.6 0.57

0.5
0.45

0.4

0.3

0.2

0.1

0
2021-22 2022-23

34
Table:2

The table showing the Quick ratio of the TATA MOTORS LTD, for

the year 2021-2022 and 2022-23.

S.NO YEAR QUICK RATIO

1 2021-22 0.44:1

2 2022-23 0.32:1

Note:

The standard norms of the quick ratio 1:1 is often

considered acceptable.

Inference:

From the above table quick ratio is 0.44:1 in 2021-22 and 0.32:1 in

2022-23. A quick ratio of less than 1 indicates that the company have

difficulty meeting its short-term obligations with its liquid asset alone.

35
Table: 2.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Quick Asset:

Financial asset 10,809.17 7,252.87

Other current asset 1,091.95 1,219.18

Total 11,901.12 8,4272.05

Quick Liabilities

Financial liabilities 24,287.81 22,868.51

Provision 608.89 408.89

Current tax 49.67 53.66

liabilities

Other current 2047.27 2511.08

liabilities

Total 26,992.81 25,803.53

36
Chart:2

The chart showing the comparison quick ratio last two year.

0.5

0.45 0.44

0.4

0.35
0.32

0.3

0.25

0.2

0.15

0.1

0.05

0
2021-22 2022-23

37
Table:3

The table showing the solvency ratio of the TATA MOTORS LTD,

for the year 2021-2022 and 2022-23.

S.NO YEAR SOLVENCY RATIO

1 2021-22 1.45

2 2022-23 1.57

Note:

Generally, a solvency ratio of 0.5 to 2 is considered healthy.

Inference:

From the above table an increase in the solvency ratio from 1.45 in

2021-22 to 1.57 in 2022-23. Tata Motors improved its ability to cover its

long-term debt obligation.

38
Table: 3.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Total Asset:

Non-current asset 48,280.26 50,270.82

Current asset 15,619.61 11,499.95

Total 63,899.87 61,770.77

Total Liabilities

Non-current 16,962.91 13,497.39

liabilities

Current liabilities 26,992.81 25,803.53

Total 43,955.72 39,300.92

39
Chart:3
The chart showing the comparison of solvency ratio for last two

year.

1.58
1.57

1.56

1.54

1.52

1.5

1.48

1.46
1.45

1.44

1.42

1.4

1.38
2021-22 2022-23

40
Table:4

The table showing the Debt-to-equity ratio of the TATA MOTORS

LTD, for the year 2021-2022 and 2022-23.

S.NO YEAR DEBT-TO-EQUITY

RATIO

1 2021-22 2.20:1

2 2022-23 1.74:1

Note:

Generally, a Debt-to-equity ratio of 2:1 or lower is considered healthy.

Inference:

From the above table decreased from 2.20 in 2021-22 to 1.74 in

2022-23. This indicates that organization reduced its reliance on debt to

finance its operations.

41
Table: 4.1

2021-2022 2022-2023
PARTICULAR Amount (Crore) Amount (Crore)

Total Debt:
Long term financial
liabilities:
i. Browing 14,102.74 10,445.70
ii. Lease liabilities 237.84 305.26
iii. Other financial
liabilities 460.37 414.44
Provision 1474.11 1588.75
Deferred tax 173.72 51.16
Other non-current
liabilities 514.13 692.08
Short term financial
liabilities:
i. Browing 9,129.91 8,426.74
ii. Lease liabilities 58.58 100.99
iii. Trade payables 6,102.10 7,162.60
iv. Acceptance 7,883.96 5,839.39
v. Other financial
liabilities 1,113.26 1,300.18
Provision 608.06 408.89
Current tax liabilities 49.67 53.66
Other current liabilities 2,047.27 2511.08
Total 43,955.72 39,300.92

42
Total Equity:
Equity share 765.88 766.02
Other equity 19,178.27 21,703.83
Total 19,944.15 22,469.85

43
Chart:4

The chart showing the comparison of Debt-to- equity ratio for last

two year.

2.5

2.12

1.5
1.34

0.5

0
2021-22 2022-23

44
Table:5

The table showing the Net profit ratio of the TATA MOTORS LTD,

for the year 2021-2022 and 2022-23.

S.NO YEAR NET PROFIT RATIO

1 2021-22 3.63%

2 2022-23 4.15%

Note:

Generally, a net profit ratio of 5% or higher is often considered

healthy.

Inference:

From the above table a net profit ratio is 3.63% in 2021-22 and

4.15% in 2022-23 indicates an improvement in their profitability.

Although need to increase upto standard.

45
Table: 5.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Net Profit:

Profit 1,739.23 2,728.13

Total 1,739.23 2,728.13

Total revenue

from

operation:

Revenue 46,880.97 65,298.84

Other revenue from

operation 382.71 458.49

Total 47,263.68 65,757.33

46
Chart:5

The chart showing the comparison of Net profit ratio for last two

year.

4.20%
4.15%

4.10%

4.00%

3.90%

3.80%

3.70%
3.63%

3.60%

3.50%

3.40%

3.30%
2021-22 2022-23

47
Table:6

The table showing the Stock turnover ratio of the TATA MOTORS

LTD, for the year 2021-2022 and 2022-23.

S.NO YEAR STOCK TURNOVER

RATIO

1 2021-22 8.8 Times

2 2022-23 14.3 Times

Note:

Generally, a stock turnover ratio of 4 to 6 times is considered healthy

for most industry.it differ as per the size of firm.

Inference:

From the above table a stock turnover ratio is 8.8 times in 2021-22

and 14.3 times in 2022-23. It indicates that the company’s efficiency in

managing its inventory has improved significantly.

48
Table: 6.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Cost good sold:

Material consumed 31,693.11 42,226.81
{Purchase of
product sale} 5,030.00 6,561.32
[-] {Changes in
inventories of
finished goods,
WIP & product
sale} 403.87 484.69

Total 36,319.24 48,303.44

Average inventory
Opening stock 4,551.71 3,718.49
Closing stock 3,718.49 3,027.90
Total 8,270.20 6,746.39

49
Chart:6

The chart showing the comparison of Stock turnover profit ratio for

last two year.

16

14.3
14

12

10
8.8

0
2021-22 2022-23

50
Table:7

The table showing the Fixed asset turnover ratio of the TATA

MOTORS LTD, for the year 2021-2022 and 2022-23.

S.NO YEAR FIXED ASSET

TURNOVER RATIO

1 2021-22 3.06

2 2022-23 5.61

Note:

Generally, a Fixed asset turnover ratio 2 to 4 is considered healthy.

Inference:

From above the table a significant increase in the ratio is 3.06 in

2021-22 and 5.67 in 2022-23. It shows that organization improved its

efficiency in utilization its fixed asset to generate revenue between these

two years.

51
Table: 7.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Revenue:

Total revenue from

operation 47,263.68 65,757.33

Total 47,263.68 65,757.33

Average fixed

asset:

Opening Fixed

asset 19,153.47 11,733.44

Closing fixed asset 11,733.44 11,707.87

Total 15,443.45 11,720.65

52
Chart:7

The chart showing the comparison of Fixed asset turnover ratio last

for two years.

6
5.67

3.06
3

0
2021-22 2022-23

53
Table:8

The table showing the Reserve-to- equity capital ratio of the

TATA MOTORS LTD, for the year 2021-2022 and 2022-23.

S.NO YEAR RESERVE-TO-EQUITY

CAPITAL RATIO

1 2021-22 28.40

2 2022-23 32.51

Note:

Generally, a Reserve -to- equity capital 0.2 to 0.5 is considered

healthy. It differ as per size of firm.

Inference:

From the above table ratio for 2021-22 is 28.40 and for 2022-23 it is

32.51 this indicate that the proportion of reserve to equity capital is fairly

consistent between the two years.

54
Table: 8.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Reserve and

surplus:

Other equity 19,178.27 21,703.83

Other non-current

liability 514.13 692.08

Other current

liability 2,047.27 2,511.08

Total 21,739.67 24,906.16

Total equity:

Equity share capital 765.88 766.02

Total 26,992.81 25,803.53

55
Chart:8

The chart showing the comparison of Reserve to equity capital ratio

for last two year.

28.41

28.4
28.4

28.39

28.38

28.37

28.36

28.35
28.35

28.34

28.33

28.32
2021-22 2022-23

56
Table:9

The table showing the Fixed asset to Current asset ratio of the

TATA MOTORS LTD, for the year 2021-2022 and 2022-23.

S.NO YEAR FIXED ASSET TO

CURRENT ASSET
RATIO
1 2021-22 3.09

2 2022-23 4.37

Note:

Generally, a Fixed asset to Current asset ratio around 0.5 to 0.7 is

considered healthy.

Inference:

From above the table the ratio has increased from 3.09 in 2021-22 to

4.37 in 2022-23 that the organization has been investing more heavily in

fixed asset relative to its current asset.

57
Table: 9.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Current Asset:

Inventories 3,718.49 3,142.96

Financial asset 10,809.17 7,252.87

Other current asset 1,091.95 1,219.18

Total 15,619.61 11,499.95

Total fixed Asset:

Total non-current

asset 48,280.26 50,270.82

Total 48,280.26 25,803.53

58
Chart:9
The chart showing the comparison of Fixed asset to Current asset

ratio for last two year.

4.5 4.37

3.5
3.09
3

2.5

1.5

0.5

0
2021-22 2022-23

59
Table:10

The table showing the Proprietary ratio of the TATA MOTORS LTD,

for the year 2021-2022 and 2022-23.

S.NO YEAR PROPRIETARY RATIO

1 2021-22 0.31

2 2022-23 0.36

Note:

Generally, a Proprietary ratio 0.5 to 0.7 is considered healthy.

Inference:

From above the table organization being 0.31 in 2021-22 and 0.36 n

2022-23, we observe an improvement over the two year. That suggest

that the organization its equity financing relative to its total asset.

60
Table: 10.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Share holder

equity:

Equity share capital 765.88 766.02

Other equity 19,178.27 21,703.83

Total 19,944.15 22,469.85

Total asset:

Non-current asset 48,280.26 50,270.82

Current asset 15,619.61 11,499.95

Total 63,899.87 61,770.77

61
Chart:10
The chart showing the comparison of Proprietary ratio for last two

year.

0.37

0.36
0.36

0.35

0.34

0.33

0.32

0.31
0.31

0.3

0.29

0.28
2021-22 2022-23

62
Table:11

The table showing the Net working capital ratio of the TATA

MOTORS LTD, for the year 2021-2022 and 2022-23.

S.NO YEAR NET WORKING

CAPITAL RATIO

1 2021-22 0.17

2 2022-23 0.23

Note:

Generally, a Net working capital ratio1.2 to 2.0 is considered healthy.

Inference:

From above the table organization Net working capital ratio of 0.17 in

2021-22 indicates that organization may have had a lower ability to

cover its short term obligation. On the other hand the ratio of 0.23 in

2022-23 shows improvement, indicating the organization may have

strengthened its cover to long term obligation.

63
Table: 11.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Net working

capital:

Current asset 15,619.61 11,499.95

[-] Current liabilities 26,992.81 25,803.53

Total -11,373.20 -14,303.58

Total asset

Non-current asset 48,280.26 50,270.82

Current asset 15,619.61 11,499.95

Total 63,899.87 61,770.77

64
Chart:11

The chart showing the comparison of Net working capital ratio for

last two year.

0.25
0.23

0.2

0.17

0.15

0.1

0.05

0
2021-22 2022-23

65
Table:12

The table showing the Return capital employed ratio of the TATA

MOTORS LTD, for the year 2021-2022 and 2022-23.

S.NO YEAR RETURN CAPITAL

EMPLOYED RATIO

1 2021-22 4.67%

2 2022-23 4.27%

Note:

Generally, a Return capital employed ratio 10% or higher is

considered healthy.

Inference:

From above the table a 4.67%ROCE is in 2021-2022 and 4.27% in

2022-2023. It show the low ROCE and indicate inefficiency in capital

utilization or lower profitability compared to the cost of capital.

66
Table: 12.1

PARTICULAR 2021-2022 2022-2023

Amount (Crore) Amount (Crore)

Profit before

interest & tax:

(Profit before

interest & tax) 1,723.46 1,537.62

Total 1,723.46 1,537.62

Capital employed

Total asset 63,899.87 61,770.77

[-]Current liabilities 26,992.81 25,803.53

Total 36,907.06 35,967.24

67
Chart:12
The chart showing the comparison Return capital employed ratio

last two year.

4.70%
4.67%

4.60%

4.50%

4.40%

4.30% 4.27%

4.20%

4.10%

4.00%
2021-22 2022-23

68
 FORMULA

CURRENT RATIO:

Current Ratio = (Total Current asset/Total Current liabilities)

QUICK RATIO:

Quick Ratio= (Total quick asset/Total current

liabilities)

• Total quick asset= Current asset – (Inventory +

Prepaid Expenses)

69
SOLVENCY RATIO:

Solvency Ratio= Total asset / Total liabilities

• Total asset= Noncurrent + Current asset

• Total liabilities= Noncurrent asset + Current asset

DEBT – EQUITY RATIO:

Debt – Equity ratio = Total Debt + Total Equity

• Total Debt = Browing + Lease liabilities + Other financial

liabilities + Provisions + Deferred tax + Other

Noncurrent + Current tax liabilities + Other current

liabilities

• Total Equity = Equity shares capital + Other equity

70
NET PROFIT RATIO:

Net Profit Ratio = (Net Profit / Total Revenue from

Operation)*100

STOCK TURNOVER RATIO:

Stock Turnover Ratio = Cost of Good Sold / Average
Inventory

• COGS = Cost of material consumed + Purchases of

products for sales – Changing in inventory of finished
goods, working progress, and product for sales

• Average Inventory = ((Opening inventory + Closing

Inventory)) / 2

71
 FIXED ASSET TURNOVER RATIO:
Fixed asset turnover ratio = Revenue from operation /
Average fixed asset
• Average Fixed Asset = ((Beginning Fixed Asset +
Ending Fixed Asset)) / 2

FIXED ASSET TO CURRENT ASSET RATIO:

Fixed asset to current asset ratio = Total Fixed asset / Total

Current asset

72
RESERVE TO EQUITY CAPITAL RATIO:

Reserve to Equity capital Ratio = Total Reserve and surplus /

Equity share capital

PROPRIETARY RATIO:

Proprietary Ratio = Share holder’s equity / Total Asset

• Share’s holder equity = Equity share capital + Other
equity

73
NET WORKING CAPITAL RATIO:

Net working capital ratio = Net working capital / Net asset

• Net working capital = Current asset – Current
liabilities

RETURN ON CAPITAL EMPLOYED RATIO:

ROCE = ((Profit before Interest and tax / Capital

Employed))*100
• Capital Employed = Total asset – Current liabilities

74
 CHAPTER-V
FINDINGS

1) It is found that current ratio declined from 0.57:1 in 2021-22 to 0.45:1

in 2022-23.

2) In Tata Motors' quick ratio declined from 0.44:1 in 2021-22 to 0.32:1

in 2022-23.

3) It is found that the solvency ratio increasing from 1.45 in 2021-

22 to 1.57 in 2022-23.

4) It is found that the debt-to-equity ratio decreasing from 2.20 in 2021-

22 to 1.74 in 2022-23.

5) It is found that the net profit ratio increasing from 3.63% in 2021-
22 to 4.15% in 2022-23.

6) It is found that the organization inventory turnover improved

significantly from 8.8 times in 2021-22 to 14.3 times in 2022-23.

7) It is found that fixed asset turnover ratio increases from 3.06 in 2021-
22 to 5.67 in 2022-23.

8) It is found that the organization maintained a fairly consistent

proportion of reserves to equity capital, with the ratio
at 28.40 in 2021-22 and 32.51 in 2022-23."

75
9) It is found that the organization increased its investment in fixed
assets relative to current assets, with the fixed asset to current asset
ratio rising from 3.09 in 2021-22 to 4.37 in 2022-23."

10) It is found that the organization increased its investment in fixed

assets relative to current assets, with the fixed asset to current
asset ratio rising from 3.09 in 2021-22 to 4.37 in 2022-23."

11) It is found that the organization improved its ability to cover

short-term obligations and strengthened its cover for long-term
obligations, with the net working capital ratio increasing
from 0.17 in 2021-22 to 0.23 in 2022-23."

12) It is found that the ROCE decreased from 4.67% in 2021-

22 to 4.27% in 2022-23.

76
 CHAPTER-VI
SUGGESTION
From the following findings the following suggestion have been
given.

❖ Tata Motors should focus on improving its current and quick ratios
to ensure better short-term liquidity.
❖ The company should continue reducing its debt levels to improve
financial stability
❖ Tata Motors needs to increase its net profit margin to meet
industry standards
❖ Improving efficiency in managing inventory should remain a priority
for Tata Motors
❖ Tata Motors should aim to increase its ROCE by improving capital
utilization or profitability.

77
 CONCLUSION

“A STUDY ON RATIO ANALYSIS OF TATA MOTORS FOR

FY 2021-22 AND 2022-23”, suggests a mixed performance, with
improvements in some areas such as inventory turnover and solvency,
but challenges in meeting short-term obligations due to declining current
and quick ratios.

78
 BIOLIOGRAPHY

Management Accounting - S.R.N. Pillai & Bagavathi

Research Methodology - C.R. Kothari

https://www.tatamotors.com

https://www.scribd.com

https://www.en.m.wikipiedia.org

79
ANNEXURE

80
81
82
83