A PROJECT REPORT ON

__________________________________________________
AT
_____________________________________________
HYDERABAD
A PROJECT REPORT SUBMITTED TO

OSMANIA UNIVERSITY
HYDERABAD
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE IN
BACHELORS OF BUSINESS ADMINISTRATION
SUBMITTED
BY
_________________________________
_______________________________
VILLA MARIE PG COLLEGE FOR WOMEN
SOMAJIGUDA- 82
2014-2016

DECLARATION
I the undersigned solemnly declare that the report of the summer training work
entitled study on _____________________________________________ is based on
my work carried out during the course of my study under the supervision of
________________________________

_____________________________________&
Mrs_______________________________, Faculty, Department of Management. Villa
Marie Degree College
I assert that the statements made and conclusions drawn are an outcome of the
project work. I further declare that to the best of my knowledge and believe the project
report does not contain any part of any work which has been submitted for the award of
any other degree/ diploma/ certificate in this university or any other university.
_______________________
(Signature of the student)
DATE:
PLACE:

ACKNOWLEDGEMENT

I am extremely grateful to Principal Dr. Y. Philomena and the Department of B.B.A for
giving me the opportunity of learning through this research project. It has been an
excellent and rewarding experience, and has immensely increased my knowledge.

I wish to express my sincere gratitude and appreciation to my project guide and mentor,
Ms.____________________,

Head

of

Department,

Department

of

Business

Administration, for her support, guidance and encouragement.

I would also like to extend special thanks to my family and friends who have been a
constant source of support and encouragement. Without them, this project would not have
been materialized.

_______________________
(Signature of the student)
DATE:
PLACE:

CONTENTS
CHAPTERS

TOPICS

CHAPTER-I

INTRODUCTION

Objectives of the study

Scope of the study

Need for the study

Research Methodology

Limitations of the study

CHAPTER-II

CONCEPTUAL FRAMEWORK

CHAPTER-III

INDUSTRY & COMPANY PROFILE

CHAPTER-IV

DATA ANALYSIS &

INTERPRETATION

CHAPTER-V

FINDINGS & SUGGESTIONS

BIBLIOGRAPHY

CHAPTER-I
Introduction
INTRODUCTION

Financial statements are prepared primarily for decision making. They play a
dominant role in setting the framework of managerial decisions. But the information
provided in the financial statement if not an end in it as no meaningful conclusions can be
drawn from these statements alone. However, the information provided in the financial
statement is of immense use in making decisions through analysis is The process of
identifying the financial strengths and weaknesses of the firm by properly establishing
relationship between the items of the balance sheet and the profit and loss account. There
are various methods (or) techniques used in analyzing financial statements, such as
comparative, trend analysis, common size statements, schedule of changes in working
capital, funds flows and cash flow analysis, cost volume profit analysis and ratio analysis.
MEANING AND CONCEPT OF FINANCIAL ANALYSIS
The term financial analysis also known as analysis and interpretation also known
as analysis and interpretation of financial statements refers to the process of determining
financial strengths and weaknesses of the firm by establishing strategic relationship
between the items of the balance sheet profit and loss account and other operative data
Analyzing financial statements according to Metcalf and Titard is a process of
evaluating the relationship between component parts of financial statement to obtain a
better understanding of a firms position and performance.
In the word of Myers financial statement analysis is largely a study of relationship
among the various financial factors in a business as disclosed by these factors as shown
in a series of statements.
The purpose of financial analysis to diagnose the information contained in
financial statement so as to judge the profitability and financial soundness of the firm.
PROCEDURE OF FINANCIAL STATEMENT ANALYSIS:Broadly speaking there are three steps involved in the financial analysis. These are
Selection
Classification

 Interpretation
The first step involves selection of information (data) relevant to the purpose of
analyzing of financial statements.
The second step involved is the methodical classification of the data.
The third step includes drawing of inferences and conclusions.
METHODS (or) DEVICES OF FINANCIAL ANALYSIS:
The following are the methods of financial analysis.
1) Comparative statement
2) Common size statement
3) Trend analysis
4) Funds flow statement
5) Cash flow statement
6) Cost volume profit analysis
7) Ratio analysis
RATIO ANALYSIS:The ratio analysis is one of the most powerful tools of financial analysis. It is the
process of establishing and interpreting various ratios (quantitative relationship between
figures and groups of figures). It is with the help of ratios that the financial statements
can be analyzed more clearly and decisions made from such analysis.
MEANING OF RATIOS:A ratio is a simple arithmetic expression of the relationship of one number to
another. It may be defined as the indicated quotients of two mathematical expressions.
According to accountants hand book by wixon kell and Bedford a ratio is an expression

of the quantitative relationship between two members. According to kohler a ratio is the
relation of the amount a to another b expressed as the ratio of a to b; a:b( a is to b); or as a
simple fraction. Integer decimal fraction (or) percentage. In simple language ratio is one
number expressed in terms of another and can be worked out by dividing one number
into the other.

OBJECTIVES OF THE STUDY:1) Primary objective of the study is to know the financial position of Maruthi
Suzuki.
2) Other objectives include:
3) To study the general & overall profitability position of the Maruthi Suzuki.
4) To know about the liquidity and long term solvency position of Maruthi Suzuki.
5) To draw the conclusions & provide the possible solutions.
SCOPE OF THE STUDY:The study includes analysis of financial performance through Ratios of Maruthi
Suzuki, Hyderabad. Even though the no. of companies are there in Maruthi Group
Maruthi Suzuki has been taken for study as it is more convenient.

NEED FOR THE STUDY:Financial statements provide ample information for knowing the financial
position of the Maruthi Suzuki . The information provided in financial statement server
the purpose of different groups. Such as inventory creditors general public etc.

The financial statement has been taken as the base for analyzing the financial
position of the concern through Ratio analysis for accomplishing of the project.

RESEARCH METHODOLOGY:Research methodology is a systematic procedure of collecting information in

order to analysis and a interpret the data. The data can be collected through two principal
sources viz.
1) Primary data
2) Secondary data
PRIMARY DATA
It is the information collected directly with out any reference. The data required
for accomplishment of this project has been collected mainly by conducting interviews,
with concerned officers and staff either individually (or) collectively and some of the
information had been verified (or) supplemented conducting personal observation
method.

SECONDARY DATA
The secondary data is the data which is already available.

It is obtained from Annual reports. Internal records, in-house magazines, journals,

books and websites.
LIMITATIONS OF THE STUDY:1) Time is the main constraint in completing the study with in the stipulated
period allowed. It has become difficult to analyze all the documents in
detail.
2) The analysis is made on the basis of secondary data only.
3) The availability of data is only pertaining to five years is one of the
constraints.
4) As there is more dependency on secondary data realistic conclusion may
not be possible to be made.
5) Even through no. of techniques are available for analyzing financial
position only ratio analysis has been taken for the study.

CHAPTER-II
CONCEPTUAL FRAMEWORK

INTRODUCTION TO RATIO ANALYSIS

Financial ratio analysis is the calculation and comparison of Ratios. Which are
derived from the information in a company financial statement? The level historical
trends of these ratios can be used to make inferences about a companys financial
condition, its operations and attractiveness as an investment.
Financial ratios are calculated from one (or) more places of information from a
companys financial statements for example the Gross Margin is the gross profit from
operations divided by the total sales or revenues of a company, expressed in percentage
terms. In isolation a financial ratio is a useless piece of information. In context how ever
a financial ratio can give a financial analyst an excellent picture of a companys situation
and the trends that are developing
A ratio gains utility by comparison to other data and standards. Taking our
example, a gross profit margin for company of 25% is meaningless by itself if we know
that this companys competitors have profit margins of 10% we know that it is more
profitable than their industry peer which is quite favorable. It we also know that the
historical trend is up words. For example has been increasing steadily for the last few
years, this would also be a favorable sign that management is implementing effective
business policies and strategies.
Financial ratio analysis groups the ratios into categories which tell us about
different facts of a companys finances and operations.
As overview of some of the categories of ratio are given below:Ratios are functionally classified in to 4 types:
LEVERAGE RATIOS:- which show the extent the debt is used in a companys capital
structure.

LIQUIDITY RATIOS:- Liquidity ratios measure the ability of a firm to meet its current
liabilities/obligations. The liquidity ratios, by establishing a relationship between cash
and other current assets to current liabilities, provide a quick measure of liquidity. A firm
should ensure that it does not suffer from lack of liquidity, or excess liquidity. The failure
of a company to meet its current obligations, due to lack of sufficient liquidity, will lead
to technical insolvency and loss of creditors confidence. A very high degree of liquidity
results in excess idle assets, and the consequent reduction in income.
OPERATIONAL EFFICIENCY RATIOS:- The of creditors and owners are invested in
various kinds of assets to generate sales and profits. The better the management of assets,
the larger the amount of sales. Operational Efficiency or Activity ratios are employed to
evaluate the efficiency with which the firm manages and utilizes its assets or the activities
are carried on. These ratios are also called turnover ratios or activity ratios because they
indicate the speed with which being converted or turned over into sales.
PROFITABILITY RATIOS:- A company should earn profits to survive and grow over
a period of time. Therefore, the financial manager should continuously evaluate the
efficiency of the company in terms of profits. The profitability ratios are calculated to
measure the operating efficiency of the company.
SOLVENCY RATIOS: - Solvency ratios throw light on the long-term solvency of a
firm, while the liquidity ratios on the short-term solvency. These ratios reflect the ability
of a firm with regards to periodic payment of interest and repayment of a long-term loan
on the maturity.

NATURE OF RATIO ANALYSIS:-

Ratio analysis is a technique of analysis and interpretation of financial statements.

It is the process of establishing and interpreting various ratios for helping in making
certain decisions. It is only a means of better understanding of financial strengths and
weaknesses of a firm.
The Ratios may be used as a symptom like blood pressures the pulse rate (or) the
body temperature.
ADVANTAGES OF RATIO ANALYSIS:1) Ratio analysis simplifies the understanding of financial statements.
2) Ratios bring out the inter relationship among various financial figures and bring to
light their financial significance ratio analysis is a device to analyze and interpret
the financial health of enterprise.
3) Ratio facilities inter firm and intra firm comparison. They bring out the strengths,
weaknesses and efficiency of firms and their departments.
4) Ratios contribute significantly towards effective planning and forecasting. A study
of trend in the past works as a helpful guide for the future.
5) Ratios cater to the particular information need of a particular person, depending
on his interesting the business for which ratios are to be calculated. A creditor
may be interested in liquidity ratios, which an investor may want to study
profitability.

CHAPTER-III

INDUSTRY & COMPANY PROFILE

AUTOMOBILE INDUSTRY:
The Indian auto ancillary industry has come a long way since it had its small
beginnings in the 1940s. If the evolution of the industry is traced in India, it can be
classified into three distinct phases namely: Period prior to the entry of Maruti Udhyog
Ltd, Period after the entry of Maruti Udhyog Ltd and Period post Liberalization. The
period prior to the entry of Maruti Udhyog Ltd was characterized by small number of
auto majors like Hindustan Motors, Premier Automobiles, Telco, Bajaj, Mahindra and
Mahindra, low technology and assured business for most of the auto-componentmanufacturers.
The entry of Maruti in the 1980s marked the beginning of the second phase of the
industry. The autoancillary industry in the country really showed a spurt in growth during
this period. This period witnessed the emergence of a new generation of auto ancillary
manufacturers who were required to meet the stringent quality standards of Marutis
Korean collaborator Suzuki of Japan. The good performance of Maruti resulted in an
upswing for the domestic auto ancillary industry. It was during this period that auto
components

from

India

began

to

be

exported.

The entry of foreign automobile manufacturers ranging from Mercedes Benz,

Ford, and General Motors to Daewoo following the government liberalizing the foreign
investment limits saw the beginning of the third phase of the evolution of the industry.
The auto ancillary industry witnessed huge capacity expansions and modernization
initiatives in the post liberalization period. Technological collaborations and equity
Partnerships with world leaders in auto components became a common affair. However,
the global automobile majors soon realized the folly of their estimations in India. The
market did not seem to be as big as it appeared to be. Hence, sales targets went awry. The
tough competitive scenario saw a lot of consolidation in the industry and it still continues
unabated.

Indian Auto Industry - Market Overview

The industry has grown at a CAGR of 14% p.a over the last 5 years,
with sales of 9 million vehicles in 2013-14

With the potential to emerge as one of the largest in the world. Presently, India is
1. 2nd largest two wheeler market in the world
2. 4th largest commercial vehicle market in the world
3. 11th largest passenger car in the world and is expected to be the 7 th largest
market by 2026

The industry has emerged as a key contributor to the Indian economy

Maruti Suzuki India Limited (/marutt i suzuki/), commonly referred to as Maruti and
formerly known as Maruti Udyog Limited, is an automobile manufacturer in India.[8]
It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki.[7] As
of November 2012, it had a market share of 37% of the Indian passenger car market.
[9] Maruti Suzuki manufactures and sells a complete range of cars from the entry
level Alto, to the hatchback Ritz, A-Star, Swift, Wagon R, Zen and sedans DZire,
Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga
and Sports Utility vehicle Grand Vitara.
The company's headquarters are at No 1, Nelson Mandela Road, New Delhi.[2] In
February 2012, the company sold its ten millionth vehicle in India
Maruti Udyog Limited was established in February 1981, though the actual
production commenced only in 1983. It started with Maruti 800, based on the Suzuki
Alto kei car which at the time was the only modern car available in India. Its only
competitors were Hindustan Ambassador and Premier Padmini. Originally, 74% of
the company was owned by the Indian government, and 26% by Suzuki of Japan.[12]
As of May 2013, the government of India sold its complete share to Indian financial
institutions and no longer has any stake in Maruti Udyog
Maruti's history begins in 1970, when a private limited company named 'Maruti
technical services private limited' (MTSPL) is launched on November 16, 1970. The
stated purpose of this company was to provide technical know-how for the design,

manufacture and assembly of "a wholly indigenous motor car". In June 1971, a
company called 'Maruti limited' was incorporated under the Companies Act and
Sanjay Gandhi became its first managing director.[14] After a series of scandals,
"Maruti Limited" goes into liquidation in 1977. This is followed by a commission of
inquiry headed by Justice A. C. Gupta, which submits its report in 1978.[14] On 23
June 1980 Sanjay Gandhi dies when a private test plane he was flying crashes. A year
after his death, and at the behest of Indira Gandhi, the Indian Central government
salvages Maruti Limited and starts looking for an active collaborator for a new
company: Maruti Udyog Ltd being incorporated in the same year.
Suzuki enters
In 1982, a license & Joint Venture Agreement (JVA) is signed between Maruti Udyog
Ltd. and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In
India's closed market, Maruti received the right to import 40,000 fully built-up
Suzukis in the first two years, and even after that the early goal was to use only 33%
indigenous parts. This upset the local manufacturers considerably. There were also
some concerns that the Indian market was too small to absorb the comparatively large
production planned by Maruti Suzuki, with the government even considering
adjusting the petrol tax and lowering the excise duty in order to boost sales.[16]
Finally, in 1983, the Maruti 800 is released.
This 796 cc hatchback is based on the SS80 Suzuki Alto and is Indias first
affordable car. Initial product plan is 40% saloons, and 60% Maruti Van.[16] Local
production commences in December 1983.[11] In 1984 the Maruti Van, with the same
three-cylinder engine as the 800, is released. Installed capacity of the plant in
Gurgaon, reaches 40,000 units.
In 1985 the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, is launched.
In 1986 the original 800 is replaced by an all-new model of the 796 cc hatchback
Suzuki Alto/Fronte. This is also when the 100,000th vehicle is produced by the
company.[15] In 1987 follows the company's first export to the West, when a lot of
500 cars were sent to Hungary. Maruti products had been exported to certain
neighboring countries already. By 1988, the capacity of the Gurgaon plant is
increased to 100,000 units per annum.

Market liberalisation
In 1989 the Maruti 1000 is presented after having been shown earlier. This 970 cc,
three-box is Indias first contemporary sedan. By 1991 65 percent of the components,
for all vehicles produced, are indigenised. Meanwhile, the liberalisation of the Indian
economy opens new opportunities but also brings more competition to the segments
in which Maruti operates. In 1992 Suzuki increases its stake in Maruti to 50 percent,
making the company a 50-50 JV with the Government of India the other stake holder.
A flow of new models begin in the early nineties. In 1993 the Zen, a modern 993 cc,
hatchback which is later exported globally as the Suzuki Alto. In 1994 the 1298 cc
Esteem appears, a more luxurious redesigned Maruti 1000. This and other Marutis
begin appearing in a plethora of different equipment levels, to better suit India's
increasingly discerning consumers. A Zen Automatic arrives in 1996, as does the
Gypsy King, a 1.3 liter version of the compact off-roader, and a minibus version of
the Omni (the Omni E).
In 1994 Maruti Suzuki produces its 1 millionth vehicle since the commencement of
production, being the first company in India to do so. This is still not enough in a
booming market and the next year Maruti's second plant is opened, with annual
capacity reaching 200,000 units. Maruti also launches a 24-hour emergency on-road
vehicle service, the first of its kind in the country. In 1996 the United Front
government is formed, with Murasoli Maran new Industries Minister. On 27 August
the following year the government nominates Mr. S.S.L.N. Bhaskarudu as the
Managing Director, as the then current Managing director R.C. Bhargava, was
completing his tenure. This creates a conflict with Suzuki, discussed closer in the
Joint venture related issues section.
In 1998 the new Maruti 800 is released, the first change in design since 1986. This is
simply a facelift of the existing model, to ensure steady sales. Also, the two millionth
vehicle is produced. Other news include the Zen D, a 1527 cc diesel hatchback and
Maruti's first diesel vehicle. The Omni van and microbus is also redesigned. The next
year the Omni bus arrives in a high roof version, the Omni XL. The 1.6 litre Maruti
Baleno three-box saloon, advertised as the 'Maruti Suzuki Baleno', also appears. This

is Maruti's biggest car yet. Finally, in what is a very busy year, the Wagon R is
launched.
In 2000 Maruti becomes the first car company in India to launch a Call Center for
internal and customer services. The new Alto model is also released, somewhat larger
and more modern than the 800. The estate Baleno Altura is also shown, while IDTR
(Institute of Driving Training and Research) is launched jointly with the Delhi
government to promote safe driving habits. In 2001 Maruti True Value, selling and
buying used Maruti Suzukis, is launched in Bangalore and Delhi, later in Mumbai and
elsewhere. In October of the same year the Maruti Versa sees the day, a bigger
engined and more luxurious microbus than the Omni. It never catches on in the
market and is discontinued by late 2009, only to be replaced by a cheaper, strippeddown version called Eeco. Customer information centers are also launched in
Hyderabad, Bangalore and Chennai. In 2002 the Esteem Diesel appears, as does
Maruti Insurance. Two new subsidiaries are also started: Maruti Insurance Distributor
Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increases
its stake in Maruti to 54.2 percent.
In 2009 the new Suzuki Grand Vitara XL-7 appears, while the Zen and the Wagon R
are upgraded and redesigned. The four millionth Maruti vehicle is built and they enter
into a partnership with the State Bank of India. Maruti Udyog Ltd is Listed on BSE
and NSE after a public issue, which is oversubscribed tenfold. In 2010 the Alto
becomes India's new best selling car, overtaking the Maruti 800 which had been
number one for nearly two decades. The five-seater Versa 5-seater, a new variant, is
created while the Esteem undergoes cosmetic changes and is re-launched with a price
cut. Maruti Udyog closed the financial year 2009-04 with an annual sale of 472,122
units, the highest ever since the company began operations 20 years earlier, and the
fiftieth lakh (5 millionth) car rolls out in April, 2011, with overall sales growing by
15.8%. The 1.3 L Suzuki Swift five-door hatchback also appears. 2010-05 marked
another record year (487,402 domestic sales) and exports reached 48,899 cars to
about fifty different countries. The United Kingdom took the lion's share, with 10,623
deliveries

In 2012 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles
India", to build two new manufacturing plants, one for vehicles and one for engines.
[17] Cleaner cars were also introduced, with several new models meeting the new
"Bharat Stage III" standards.[17] In February 2013, Maruti Suzuki sold its ten
millionth vehicle in India.
Mar '15 Mar

Mar

Mar

Mar

'13
12

'12
12

11
12

Total Share Capital

Equity Share Capital
Share Application Money
Preference Share Capital
Reserves

151.00
151.00
0.00
0.00
18,427.90

mths
mths
144.50 144.50
144.50 144.50
0.00
0.00
0.00
0.00
15,042. 13,723.

mths
144.50
144.50
0.00
0.00
11,690.

mths
144.50
144.50
0.00
0.00
9,200.4

Revaluation Reserves
Networth

90
00
0.00
0.00
0.00
18,578.90 15,187. 13,867.

60
0.00
11,835.

0
0.00
9,344.9

'14
Sources Of Funds

12 mths

12

Secured Loans
Unsecured Loans

40
0.00
0.00
1,389.20 1,078.3

50
0.00
170.20

10
26.50
794.90

0
0.10
698.80

Total Debt

0
1,389.20 1,078.3

170.20

821.40

698.90

0
19,968.10 16,265. 14,037. 12,656.

10,043.

Total Liabilities

70

70
Mar

50
Mar

80
Mar

'13
12

'12
12

11
12

mths
mths
11,718. 10,406.

mths
8,720.6

Less: Accum. Depreciation

30
60
70
9,834.70 7,157.6 6,189.2 5,382.0

0
4,649.8

Net Block

0
0
0
9,799.20 7,520.7 5,529.4 5,024.7

0
4,070.8

Mar '15 Mar

'14
Application Of Funds
Gross Block

Capital Work in Progress

12 mths

12

mths
19,633.90 14,678.

1,942.20

0
611.40

0
862.50

0
387.60

0
861.30

Investments

7,078.30 6,147.4 5,106.8 7,176.6

3,173.3

Inventories

0
0
0
1,840.70 1,796.5 1,415.0 1,208.8

0
902.30

Sundry Debtors
Cash and Bank Balance

0
0
1,423.70 937.60 824.50
775.00 2,436.1 2,508.5

0
809.90
98.20

918.90
239.00

Total Current Assets

0
0
4,039.40 5,170.2 4,748.0

2,116.9

2,060.2

Loans and Advances

0
0
0
3,828.90 2,852.5 2,178.4 1,739.1

0
1,809.8

0
0.00

0
1,700.0

Total CA, Loans &

7,868.30 8,022.7 6,926.4 3,856.0

0
5,570.0

Advances
Deffered Credit
Current Liabilities

0
0
0
0.00
0.00
0.00
0.00
5,845.80 5,338.0 3,861.6 3,160.0

0
0.00
3,250.9

Provisions
Total CL & Provisions

0
0
0
874.10 698.50 525.80 628.40
6,719.90 6,036.5 4,387.4 3,788.4

0
380.70
3,631.6

Net Current Assets

0
0
1,148.40 1,986.2 2,539.0

0
67.60

0
1,938.4

0
0
0.00
0.00
0.00
0.00
19,968.10 16,265. 14,037. 12,656.

0
0.00
10,043.

70
70
50
7,695.90 6,108.0 6,384.8 3,657.2

80
1,901.7

Fixed Deposits

Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

0.00

615.03

0
0.00

0
525.68

0
0.00

0
479.99

0
409.65

0
323.45

Indias car market leader Maruti Suzuki India Ltd sold 100,964 units in the domestic
market in June, an increase of 31% over the same period last year, the car maker said on
Tuesday. The companys small cars, including Wagon-R and Alto, did particularly well
starting from a low base last year, their sales grew by 52%. Exports during the month also
rose by 58.4% to 11,809 units compared with 7,453 units in June last year. Maruti shares

rose as much as 6.76% to record high of Rs.2,603.25 on BSE on Tuesday as sales

exceeded expectations. The scrip closed 6.01% higher at Rs.2,584.85, while the Sensex
gained 0.4% to 25,516.35 points.
The local arm of the Japanese car maker reported a sales expansion across all the
segments in the domestic market. Maruti said sales of the compact segment comprising
Swift, Estilo and Ritz rose 6.2% to 22,293 units in June, while those of the popular
compact sedan DZire jumped 27.4% to 15,990 units from 12,548 units in June 2013. We
maintain Maruti Suzuki as our top pick in the front line auto space, wrote Surjit Singh
Arora, analyst at Prabhudas Lilladher India Pvt. Ltd, in a note after the sales release,
adding that companys June volumes have exceeded the brokerages expectations.
Arora attributed the rise in sales to the return of the first-time buyers in the market and
the full impact of the excise duty reductionfrom 12% to 8%kicking in. Marutis
retail (sales to customers) volumes in the domestic market stood at 107,000, higher than
wholesale dispatches (sales to dealers) of 100,642 units, he wrote. After reporting a
decline for several months, car sales in India showed a marginal 3.09% rise in May, but
industry body Society of Indian Automobile Manufacturers, or Siam, said last month it
was too early to call it a turnaround. Siam sought government support to boost the
industry that has been in a prolonged slump.
1) Maruti Suzuki Alto 800

The new Maruti Suzuki Alto 800's harmonious yet slick design packs a punch with the
unique Wavefront design. The smooth long curves, the prominent wheel-arch and wider
lip add to the side stance. All this makes the Alto 800 a design wonder and one of the best
small cars in India. It used to be the largest selling car in India until the Maruti Alto
recently took its title.
2) WagonR

Maruti Suzuki India is in the news again, this time for the launch of its hatchback car
Maruti Wagon R LXi with CNG kit. The company has launched the new Wagon R and is
all set to take the design, looks, prices, technology, comfort features, safety features etc to
the new next level. Maruti Wagon R is also known as the Blue eyed boy. The all new
Maruti Wagon R has an eye catching design with dynamic exteriors and very impressive
interiors.

3) Maruti Swift

Maruti Swift is sure to be said a head turner with mind blowing style, design, technology
and power attached to it. Swift is a sedan segment car with capacity for 5 members to sit.
Swift not only has great and stunning looks but the car has world class technology and
advanced features that make the car a great performer and very economical to run on
roads. Maruti Swift has sleek and great body graphics that offers the car a very aggressive
and sporty look. The sporty look of the car has made it the most demanding car amongst
the young crowd.

4)ALTO K10

davojigudem
It has very good looking exterior. It also has fabulous interiors with best features. 1000cc
is better for Mileage but pick up with is not satisfactory.you will get Average 18.5 KM/ltr
in city. It shows Average on display next to driver.This is added feature.very nice exterior
look.Audio system quality is good but not good for volume level of 13 and above please
take care to check tyre pressure before delivery as for my car it was 46PSI in all wheels,
while company recommends 36PSI. It was shock to me as i driven 500kms with such tyre
pressure.thank god noting bad happened. Rubber matting is very small in sizes, reserve
some money to do Lamination.

MARUTI GRAND VITARA:

Maruti Grand Vitara is one of its kind SUV that's equally
fine for city driving and dirt roads. With a host of features, it
has truck like frame that features uniform body construction.
The result is lighter weight and usually a smoother driveability. It is a delight to drive on the roads with its innovative engine technologies and
added features. True value for your money that is approximately Rs 4 lakh, cheaper than
most of the car in same segment such as Honda CRV.
The Maruti Grand Vitara is powered by a 2.4 litre, 4 cylinder, 16 valve, DOHC, VVT,
VIS, BS IV compliant petrol engine that is powerful enough to generate a top power of
163.5 bhp at 6,000 rpm and develops a peak torque of 225 Nm at 4000 rpm. It is
available in two variants, MT and AT that are coupled with a five speed manual gearbox
or a 4 speed automatic transmission.
MARUTI KIZASHI:

Maruti Suzuki India Ltd. Has dinally launched its latest sports
sedan Maruti Kizashi in India. Suzuki, Japanese auto major and
parent company of Maruti India, sells Suzuki Kizashi in the US
and Japanese market and the response is overwhelming at there.
The mid-size car, Maruti Kizashi, was showcased for the first time at the 2013 Frankfurt
Motor Show than at the 2013 Tokyo Motor Show. In addition to this, the concept third
Kizashi was introduced at the 2014 New York auto show. After showcasing the Maruti
Kizashi at different Auto Shows across the world, it was launched commercially in Japan
and the US in October 2009 and December 2009 respectively. The company also
displayed the production model of the car at the biggest Auto Expo - Delhi Auto Expo
2010. This was a quick hint of launching the Maruti Kizashi in India too.
Maruti Ritz Description :
Maruti Ritz is perhaps the most awaited and hyped car from
Maruti Suzuki. The car is positioned in the premium A2 market
segment, which includes its compact offerings such as Alto,
WagonR, Swift, Zen and the newly-launched A-Star. As the
competitor Hyundai has launched their i10 model in the Indian market, now it is the turn
of market leaders Maruti Suzuki to respond with a brand new vehicle for the Indian
market. The engineers from Maruti Suzuki worked at close quarters with their Japanese
counterparts in the development of the Maruti Ritz, much like that for the A-Star. Maruti
Udhyog Limited seems to be going the complete distance to ensure that the Ritz manages
to

make

an

impact

on

the

cut-throat A-2 hatchback space.

Maruti Swift Description :

In the category of B-segment cars, Maruti Swift delivers new
quality of power, response and fuel efficiency. Swift at present is
available in three to five way door opening options. Swift is a car
with great body graphics that offers the car a very aggressive and

sporty look. The sporty look of the car has made it the most demanding car amongst the
young crowd. Maruti Swift is sure to be said a head turner with mind blowing style,
design, technology and power attached to it.

CHAPTER-IV
DATA ANALYSIS & INTERPRETATIONS
LIQUIDITY RATIOS
CURRENT RATIO:Current ratio is the most commonly used measure of short term solvency. It may be
defined as the relationship between current assets and current liabilities. A current asset
means cash and other assets. This can be easily converted in to cash with in a short period
of time that is one year current liabilities are those obligations. Which are payable with in
a short period of time that is one year. Current ratio expressed as follows.
Current Ratio = Current Assets/Current Liabilities
Year

Current
Assets

Current
Liabilities

Current
Ratio

2009-10

121420338

7904091

15.361

2010-11

189351487

34159744

5.543

2011-12

202589303

48337361

4.191

2012-13

206854975

66038060

3.132

2013-2014

387344261

158119445

2.450

Current Ratio

current ratio
20
15
10
5
0
2009-10

2010-11

2011-12

2012-13

2013-14

Years
current ratio

INTERPRETATION:-

Idle Ratio 2:1

o The Current Ratio during the study period that is from 2010-11 to 2013-2014. In
the year 2010-11 it is very high I.e., 5.543.
o The company is able to maintain higher current ratio than that of idle ratio 2:1

o Comparatively with 2012-13 to 2013-2014 Current Ratio has been decreased i.e.,
from 3.132 to 2.450.

35
LIQUID RATIO (OR) QUICK RATIO (OR) ACID TEST RATIO

Quick assets are those assets which are converted into cash with in a short period
without loss of value i.e., all current assets except prepaid expenses and inventories.
Quick Liabilities are those current liabilities excluding bank overdraft.
As a convention quick ratio of 1:1 is considered satisfactory. Quick assets are equal to
current liabilities then the concern may be able to meet its short term obligations.
Quick Assets = Current Assets - (Prepaid Exp + Inventory)
Quick Liabilities = Current Liabilities Bank overdraft
Quick Ratio = Quick assets / Current Liabilities

current
Year

quick assets

liabilities

quick ratio

2009-10

925670

7904091

0.117

2010-11

3313781

34159744

0.097

2011-12

25048554

48337361

0.518

2012-13

12489625

66038060

0.189

2013-2014

147456317

158119445

0.933

36

Quick Ratio

quick ratio
1
0.8
0.6
0.4
0.2
0
2009-10 2010-11 2011-12 2012-13

2013-14

Years

quick ratio

INTERPRETATION:-

Idle Ratio is 1:1

o It has been observed that the Quick Ratio of Maruthi Suzuki is low compared
with Idle Ratio i.e., 2009-10 is 0.117, 2010-11 is 0.097, 2011-12 is 0.518, 2012-13
is 0.189, and 2013-2014 is 0.933.
o The company unable to maintain Idle Quick Ratio during the periods of study.
o Higher quick ratio is feasible.

ABSOLUTE LIQUID RATIO (OR) CASH RATIO

Absolute Liquid Ratio is the most vigorous measure of firms liquidity position.
Absolute Liquid Assets are cash in hand and at bank and marketable securities.

Current liabilities those obligations which are payable with in a short period i.e., one
year.
The acceptable norm for this Ratio is 0.5:1 (or) 1:2 i.e., 2:1 worth current liabilities.
Absolute Liquid Ratio = Absolute Liquid Assets / Current Liabilities

Years

Absolute Liquid

Current

Absolute Liquid

Ratio

Liabilities

Ratio

2009-10

288272

34159744

0.036

2010-11

1470425

48337361

0.043

2011-12

14121860

57202771

0.292

2012-13

1456882

66038060

0.022

2013-2014

25737490

158119445

0.163

38

Absolute Liquid
Ratio

Absolute Liquid Ratio

0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2009-10 2010-11 2011-12 2012-13 2013-14
Years
Absolute Liquid Ratio

INTERPRETATION:-

Idle Ratio is 0.5:1

o It has been observed that the absolute liquid ratio of Maruthi Suzuki is lower than
idle ratio during the periods of study i.e., in 2009-10 is 0.036, 2010-11 is 0.043,
2011-12 is 0.292, 2012-13 is 0.022 and 2013-2014 is 0.163.
o During the year 2013-2014 the Ratio has been increased from 0.022 to 0.163.
o Higher absolute liquid ratio is Feasible.

PROFITABILITY RATIO
GROSS PROFIT RATIO:-

Gross Profit Ratio is one of the very important ratios for measuring profitability of a
firm. It indicates how efficiency a business is using its materials and labor in the
production process. Its shows the percentage of net sales remaining after subtracting cost
of good sold. A high gross profit indicates that a business can make a reasonable profit on
sales. Low gross profit indicates high cost of goods sold due to unfavorable purchasing
lesser sales lower selling price, excessive competition etc.
Gross Profit Ratio = Gross Profit / Net Sales*100

Year

Gross Profit

Net Sales

Gross Profit
Ratio

2009-10

96093269

139103939

0.69

2010-11

209126866

152374865

1.37

2011-12

295426723

325492839

0.91

2012-13

365092666

322047728

1.134

2013-2014

232431692

189952469

1.22

40

Gross Profit Ratio

Gross Profit Ratio

1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2009-10

2010-11

2011-12

2012-13

2013-14

Years
Gross Profit Ratio

INTERPRETATION:o During the study period it has been observed that the Gross Profit Ratio of
Maruthi Suzuki Sugars & Power Industries Ltd is satisfactory.
o During the years 2012-13 and 2013-2014 the ratio has been increased from
1.134 to 1.220 due to decrease the manufacturing expenses.
o In the year 2010-11 company have high gross profit i.e., 1.37.
o High Gross Profit is better for the company.

OPERATING PROFIT RATIO:-

The operating profit ratio indicates the profit of the company before interest and taxes
are deducted from a firms operation. The higher of the operating profit margin, the
greater pricing flexibility a firm has in its operations. However it could also indicates the
degree of cost control management a firm possesses. The figure is calculated as follows.
Operating Profit Ratio = Operating Profit / Net sales*100
Operating profit = Net Sales Operating cost
Operating Cost = Cost of goods sold + Operating Expenses

Years

Operating

Net Sales

Profit

42

Operating Profit
Ratio

2009-10

92653535

139103939

0.66

2010-11

201377384

152374865

1.32

2011-12

260669631

325492839

0.8

2012-13

364297537

322047728

1.13

2013-2014

240175637

189952469

1.26

Operating Profit Ratio

Operating Profit Ratio

1.4
1.2
1
0.8
0.6
0.4
0.2
0
2009-10

2010-11

2011-12

2012-13

2013-14

Years
Operating Profit Ratio

INTERPRETATION:o The Operating Profit Ratio of the company is not consistent during the study
period i.e., from 2009-10 to 2013-2014.
o Higher operating ratio is feasible as it shows that the company cost of production
is under control.
o In 2010-11 the operating profit ratio is higher i.e., 1.32.
o In the current year the company is able to maintain operating profit ratio at 1.26.

NET PROFIT RATIO:Net Profit Ratio establishes a relationship between net profit (after taxes) and sales. It
indicates the efficiency of the management in manufacturing selling administrative and
other activities economies conditions such as price competition low demand etc. This
ratio is the overall measure of firms profitability.

Net Profit Ratio = Net Profit After Tax / Net Sales x100

Years

Net Profit

Net Sales

Net Profit Ratio

2009-10

3439734

139103939

2.472

2010-11

7749482

152374865

5.085

2011-12

24076532

325492839

7.397

2012-13

468544

322047728

0.145

2013-2014

7743945

189952469

4.077

Net Profit Ratio

Net Profit Ratio

8
7
6
5
4
3
2
1
0
2009-10

2010-11

2011-12

2012-13

2013-14

Years
Net Profit Ratio

INTERPRETATION:o During the study period the Net Profit Ratio of Maruthi Suzuki has been increased
2009-06. After 2012-13 is very less.
o In the year 2013-2014 net profit has reduce because Administration expenses are
decreased.
o High ratio is better for profitability of the company.

45
EXPENSES RATIO:Expenses Ratio indicates the relationship of various expenses to net sales. It is useful
to calculate for each individual item of expenses (or) a group of items of a particular type
of expenses like cost of sales. Ratio factory expenses ratio, administrative expenses ratio
etc. The lower ratio indicates high profitability and higher the ratio indicates lower
profitability.

Factory Expenses Ratio = Factory Expenses / Net Sales x 100

Years

Factory

Net sales

Expenses Ratio

expenses

2009-10

5959226

139103939

4.284

2010-11

11205311

152374865

7.353

2011-12

17641977

325492839

5.42

2012-13

16666382

322047728

5.175

7167312

189952469

3.773

2013-2014

Expenses Ratio

Expenses Ratio
8
7
6
5
4
3
2
1
0
2009-10 2010-11 2011-12 2012-13 2013-14
Years
Expenses Ratio

INTERPRETATION:o It has been observed factory expenses of Maruthi Suzuki during the study period
2010-11 is high i.e., 7.353.
o From the year 2011-12 to 2013-2014 factory expenses are declined continuously
i.e., 5.42, 5.175, 3.773.
o The low expenses ratio is feasible for the company.

47
CURRENT ASSETS MOVEMENT RATIOS
INVENTORY TURNOVER RATIO:Inventory Turnover Ratio indicates low efficiency the firm is managing. This ration
indicates the number of times the stock has been turned over during the period.
Normally the higher the ratio indicates better inventory management, low ratio means
that sales required to be pushed up and action is called for

Inventory Turnover Ratio = COGS / Inventory x 100

Years

COGS

Avg. Stock

Inventory Turnover
Ratio

2009-10

139103939

93957410

1.48

2010-11

152374865

147199579

1.035

2011-12

325492839

117548402

2.769

2012-13

322047728

162109242

1.987

189952469

203907859

0.932

20132014

48

INTERPRETATION:o Inventory Turnover Ratio during the study period 2009-10 to 2012-13.
o Inventory Turnover Ratio has been decreased in the year 2009-10 to 2010-11 i.e.,
1.480 to 1.035 but it has reduced in the year 2011-12 i.e., 2.769.

o In 2012-13 to 2013-2014 Inventory Turnover Ratio has been declined i.e., 1.987
to 0.932.
o

Higher Inventory Turnover Ratio is preferable.

INVENTORY CONVERSION PERIOD:It may also be of interest to see average time taken for clearing the stocks. This can be
possible by calculating inventory conversion period. The period is calculated by dividing
the number of days by inventory turnover ratio. The formula may be as

Inventory Conversion period = Days in a Year / Inventory Turnover Ratio

Years

No. of Days

Inventory

Inventory

in a year

Turnover Ratio

conversion Period

2009-10

365 days

1.48

247 days

2010-11

365 days

1.035

353 days

2011-12

365 days

2.769

132days

2012-13

365 days

1.987

184 days

2013-2014

365 days

0.92

397days

50

INTERPRETATION:o Inventory Conversion period has been reduced 2010-11 that is 353 days compared
with 2009-10 that is 247 days.
o In the year 2011-12 Inventory Conversion period was decrease that is 121 days
but it is increased in the year 2012-13 that is 52 days.
o In the year 2013-2014 inventory Conversion Period was increased 213 days.

DEBTORS TURNOVER RATIO:Debtors Turnover Ratio indicates the velocity if debit collection of firm. In simple
words it indicates the number of times average debtors are turned over during a year.
Generally the higher the value of debtors turnover the most efficient of the
management of debtor/sales (or) more liquid are the debtors similarly low debtors
turnover implies in efficient management of debtors/sales and less liquid debtors.
Debtors Turnover Ratio = Credit sales or Total Sales / Avg. Debtors or Avg. A/R
Accounts Receivables = Sundry Debtors + Bills Receivable
Avg. Accounts Receivable = Opening A/R + Closing A/R / 2

Debtors
Years

Total Sales

Avg. Debtors

Turnover
Ratio

2009-10

139103939

766138

181.56

2010-11

152374865

317346

480.15

2011-12

325492839

3255474

99.98

2012-13

322047728

773469

416.37

189952469

10668755

178.04

2013-2014

INTERPRETATION:o Debtors Turnover Ratio of Maruthi Suzuki during the year 2010-11 is very high
i.e., 480.15 times.
o After 2010-11 the company Debtors Turnover Ratio is in the year 2011-12 is
99.98 times, 2012-13 is 416.37 times, 2013-2014 is 178.0.
o Debtors Turnover Ratio of the company in the current year 178.0 it is declined in
comparison with the previous year it is not a good sign for the company.
o Higher Ratio is feasible because it shows the more efficiency in management of
debtors.

AVERAGE COLLECTION PERIOD:The ratio indicates the extent to which the debts have been collected in time. It gives
the average debt collection period. The ratio is very helpful to the lenders because it
explains to them whether their borrowers are collecting money with in a reasonable tome.
An increase in the period will result in greater blockage of funds in debtors.

Debt Collection Period = No. of days in a year / Debtors Turnover Ratio

Years

No. of days in a

Debt Turnover

Average collection

year

Ratio

period

2009-10

365 days

181.56

2.01

2010-11

365 days

480.15

0.76

2011-12

365 days

99.98

3.65

2012-13

365 days

416.37

0.88

2013-2014

365 days

178.04

2.05

INTERPRETATION:o Average Collection Period of Maruthi Suzuki is in 2009-10 is 2.01 and 2010-11
is 0.76. The Average collection Period is decreased.
o Average Collection period of 2011-12 is very high.
o After 2011-12 the Average collection period is decreased in the year 2012-13.
o In the year 2013-2014 the Average Collection Period is increased.

WORKING CAPITAL TURNOVER RATIO:This is calculated by dividing net sales by the working capital. Working Capital is the
excess of current assets over current liabilities. It is needed by the business to meet the
day to day business needs this ratio indicates extent to working capital which always
should be moderate the decline in working capital indicates that either working capital is
in excess of requirement (or) there is operational in efficiency.

Working Capital Turnover Ratio = COGS / Net Working Capital.

Net Working capital = Current Assets Current Liabilities.

COGS
Years

Working Capital
Working

Turnover Ratio

Capital

2009-10

139103939

113516247

1.225

2010-11

152374865

155191743

0.981

2011-12

325492839

154251942

2.11

2012-13

322046479

140816915

2.287

2013-2014

189952469

229224816

0.829

56

Working Capital
Turnover Ratio

working capital turnover ratio

2.5
2
1.5
1
0.5
0
2009-10 2010-11 2011-12 2012-13 2013-14
Years
working capitalturnover ratio

INTERPRETATION:o Working Capital Ratio during the study period is in 2009-10 is 1.225 times, in
2010-11 is 0.981 times, 2011-12 is 2.11times, 2012-13 is 2.287 times and 20132014 is 0.829.
o The Working Capital Turnover Ratio of the company during the study period
indicates that the company is not having consistent working capital turnover.
o When comparing the year 2012-13 and 2013-2014 working capital ratio is
decrease i.e., 2.287 to 0.829.
o Higher working capital ratio is feasible for the company.

TEST OF SOLVENCY
DEBT EQUITY RATIO:This Ratio indicates the relationship between the external funds (or) outsiders funds
and the share holders funds. A high debit to equity ratio could indicates that the company
may be over leveraged and look for ways to reduce its debt.
Equity and debt are two key figures on a financial statement and lenders (or) investors
often use the relationship of these to evaluate risk. The ratio of your business equity will
include good and property your business owns plus and claims it has against other
entities. Debt will include both current and long term liabilities.
Debt Equity Ratio = Outsiders Funds / Share Holders Funds.

Years

Long term

share Holders

Debt Equity

Liabilities

Funds

Ratio

2009-10

172591530

30834053

5.597

2010-11

222164841

38273126

5.804

2011-12

210476499

61742009

3.409

2012-13

284850259

141869614

2.01

2013-2014

1659177441

134813423

12.31

58

INTERPRETATION:o During the study period 2009-10 to 2010-11 Debt Equity Ratio is increased i.e.,
5.597 to 5.804.
o During the year 2010-11 to 2012-13 the Debt Equity Ratio is decreased i.e., 5.804
to 2.01.
o In the year 2013-2014 the Debt Equity Ratio is increased very high.
o Debt is very high compared with share holders funds it is not preferable for the
company.

59
PROPRIETARY RATIO (OR) EQUITY RATIO:Proprietary Ratio is an important ratio for determining long term solvency of a firm.
This ratio establishes the relationship between shareholders funds to total assets of the
firm.

Proprietary Ratio = Net Worth / Total Assets.

Years

Net Worth

Total assets

Proprietary
ratio

2009-10

30834053

203425583

0.151

2010-11

38273126

260437967

0.147

2011-12

61742009

272218502

0.227

2012-13

141869614

427060806

0.332

2013-2014

134813423

1793990864

0.075

60

INTERPRETATION:-

o Proprietary Ratio during the study period i.e., in 2009-10 is 0.151, 2010-11 is
0.147, 2011-12 is 0.227, 2012-13 is 0.332 and 2013-2014 is 0.075.
o Proprietary Ratio of the Maruthi Suzuki in the year 2009-10 to 2012-13 increased
i.e., 0.151 to 0.332.
o In the year 2013-2014 the proprietary ratio is very low.

SOLVENCY (OR) TOTAL LIABILITIES TO TOTAL ASSETS:-

Solvency Ratio Indicates the relationship between the total liabilities to outsiders to
total assets of a firm generally, lower the ratio of total liabilities to total assets, more
satisfactory (or) stable is the long term solvency position of a firm.

Solvency Ratio = Total Liabilities to Outsiders / Total Assets.

Years

Total liabilities

Total Assets

Solvency Ratio

to outsiders

2009-10

172591530

203425583

0.848

2010-11

222164841

260437967

0.853

2011-12

210476499

272218502

0.773

2012-13

284850259

427060806

0.667

2013-2014

1659177441

1793990864

0.925

INTERPRETATION:o Solvency Ratio of Maruthi Suzuki during the study period 2009-10 to 2010-11
ratio has been reduced i.e., 0.848 to 0.853.

In the year 2011-12 to 2012-13 has been decreased slightly i.e., 0.773 to 0.667.

o In the year 2013-2014 the solvency ratio is very high i.e., 0.925
o Maruthi Suzuki has maintained the lower solvency ratio.
o Lower ratio is more satisfactory (or) stable to meet the long term solvency
position of the company.

FIXED ASSETS TO NETWORTH RATIO:The Ratio establishes the relationship between fixed assets and share holders funds. It
indicates the extent to which share holders funds are sunk in to the fixed assets generally
the purchase of fixed assets should be financed by shareholders equity including reserves,
surplus and retained earnings. If the ratio is less than 100% it implies that owners funds
are more than total fixed assets and a part of the working capital is provide by the share
holders when the ratio is more than 100% it implies that owners funds are not sufficient
to finance the fixed assets and the firm has to depend upon outsiders to finance the fixed
assets.

Fixed Assets to Net Worth Ratio = Fixed Assets after Depreciation / Share Holders
Funds.

Fixed Assets to
Years

Fixed assets after

Share holders

Net Worth Ratio

Depreciation

funds

2009-10

89542436

30834053

2.904

2010-11

105001624

38273126

2.743

2011-12

117844260

61742009

1.909

2012-13

286243891

141869614

2.018

2013-2014

1561813227

134813423

1.585

INTERPRETATION:o Fixed Assets to Net Worth Ratio of Maruthi Suzuki during the study period 200910 to 2011-12 the ratio has been declined i.e., 2.904 to 1.909.
o In the year 2011-12 to 2012-13 the Fixed Assets Net worth Ratio has been
increased.
o In the Year 2012-13 to 2013-2014 the Fixed Assets Net worth Ratio has been
decreased.

CHAPTER V

FINDINGS, CONCLUSIONS
AND SUGGESTIONS

FINDINDS, CONCLUSIONS & SUGGESTIONS

2013Sl.

Ratios

2009-10

2010-11

2011-12

2012-13

2014

No.
1

Current Ratio

15.631

5.543

40191

3.132

2.45

Quick Ratio

0.117

0.097

0.518

0.189

0.933

Absolute Ratio

0.036

0.043

0.292

0.022

0.163

Gross Profit Ratio

0.69

1.37

0.91

1.134

1.22

Operating Profit Ratio

0.66

1.32

0.8

1.13

1.26

Net Profit Ratio

2.472

5.085

7.397

0.145

4.077

Expenses Ratio

4.284

7.353

5.42

5.175

3.773

Inventory Turnover Ratio

1.48

1.035

2.769

1.987

0.932

Inventory

Conversion

Period

247 days 353 days 132 days 184 days

397 days

10

Debtors Turnover Ratio

181.56

480.15

99.98

416.37

178.04

11

Average Collection Period

2.01

0.76

3.65

0.88

2.05

12

Working Capital Turnover 1.225

0.981

2.11

2.287

0.829

13

Ratio
Debt Equity Ratio

5.597

5.804

3.409

2.01

12.31

14

Proprietary Ratio

0.151

0.147

0.227

0.332

0.075

15

Solvency Ratio

0.848

0.853

0.773

0.667

0.925

16

Fixed Assets to Net worth 2.904

2.743

1.909

2.018

1.585

Ratio
66

1) At present Indian Sugar Industry occupies 4 th place in world Sugar market. In

fourth coming days there will be a vast growth.
2) Sugar factory was struggling with losses. But after when it was taken over by
Maruthi Suzuki it started earnings continuously.
3) Sugar Industry plays a very important role in the Indian economy.
4) Sugar factory not only produces Sugar but also many by products.
5) The current ratio is very low which reveals that the unit is investing much in
current assets. It is advisable that instead keeping the funds idle in current assets it
should be divested to some other productive purposes.
6) During my study period we noticed that the company is unable to maintain the
quick ratio through they are sincerely working and we feel that they are not
cautious about the quick ratio. We suggest the company it keeps always in mind to
reach the quick ratio which will benefit the company in future.
7) Regarding absolute liquid ratio in this aspect it is found that the company
remarkably decreased this ratio for the current year in this regard the unit should
try to enhance this ratio.
8) Regarding Gross Profit: Through the companys gross profit is high. I suggest that
the company should still strive for greater benefits so that they can maintain all
ratios properly.
9) Regarding Operating Profit Ratio: Higher Ratio is suggestible because it indicates
the greater pricing flexibility of a firm has in its operations.

10) Regarding Net Profit Ratio: Lower Net Profit Ratio is Suggestible because it
indicates the efficiency of the management in manufacturing and selling and
administrative and other activities of the firm. It is also indicates the firms
capacity to face adverse economic conditions such as price competition low
demand etc.
11) Regarding Factory Expenses Ratio: - Low expenses ratio is better for the
company because it indicates efficiency in management of expenses and also it
indicates high profitability
.
12) Inventory Turnover Ratio: - There is no constant in inventory turnover ratio the
high percentage of increase or decrease is not advisable.
13) The company is concentrated on reducing on the conversion period which is
feasible. But during the period 2013-2014 the inventory conversion period has
been increased it is not a good sign for the company.
14) The higher debtors turnover ratio indicates the more efficiency in management of
debtors. The company has the higher debtors turnover ratio which is a good sign
for the company.
15) The company has the low average collection period ratio which is a good sign for
the company.
16) It is advisable to the company to decrease the working capital. So as the meet its
current obligations.

BIBLIOGRAPHY

BIBLIOGRAPHY

1) Prasanna Chandra, Financial Management, 5/e, Tata McGraw-Hill, 2012.

2) Brigham E.F & Houston J.F., Financial Management, Thomson Publications,
2012.

3) MY Khan and PK Jain: Financial Management, Tata McGraw-Hill, New Delhi,

2013.
4) I.M. Pandey Financial Management, 9/e Vikas Publishers, New Delhi, 2013.

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