ACCA - Oxford Brookes University Research and Analysis Project

ACCA – Oxford Brookes University Research and Analysis Project
Table of Contents
PART 1
PROJECT OBJECTIVES & OVERALL RESEARCH
APPROACH......................................................................................................2
INTRODUCTION...............................................................................................................................
..................................2
REASON FOR CHOOSING THE
TOPIC......................................................................................................................................2
CHOSEN ORGANIZATION & RATIONAL BEHIND CHOOSING TATA MOTORS
LIMITED........................................................................2
TATA COMPANY
PROFILE .......................................................................................................................................
............3
PROJECT AIM &
OBJECTIVES........................................................................................................................
.........4
BACKGROUND OF RESEARCH
APPROACH................................................................................................................................5
PART 2
INFORMATION GATHERING & ACCOUNTING & BUSINESS
TECHNIQUS...................................................................................6
SOURCE OF
INFORMATION........................................................................................................................
...........................6
METHODS USED TO COLLECT
INFORMATION............................................................................................................................7
LIMITATION IN INFORMATION
GATHERING...........................................................................................................................
...7
LIMITATION IN FINANCIAL
RATIO..........................................................................................................................................
8
LIMITATION OF SWOT
ANALYSIS.......................................................................................................................................
...8
LIMITATION OF PESTEL
ANALYSIS.......................................................................................................................................
.8
ETHICAL
ISSUES..........................................................................................................................................
.......................9
AN EXPLANATION OF ACCOUNTING & BUSINESS
TECHNIQUES.................................................................................................. 10
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PART 3
RESULTS, ANALYSIS, CONCLUSION &
RECOMMENDATIONS................................................................................................14
FINANCIAL PERFORMANCE
ANALYSIS..................................................................................................................................14
INDIAN AUTOMOBILE INDUSTRY
OVERVIEW.........................................................................................................................24
FUTURE OF INDIAN AUTO
SECTOR......................................................................................................................................2
5
PESTEL
ANALYSIS.......................................................................................................................................
...................26
SWOT
ANALYSIS.......................................................................................................................................
.....................31
CONCLUSION &
RECOMMENDATION..........................................................................................................................
.........34
 Introduction
The BSc (Hons) in Applied Accounting is an integrated program with ACCA
and this degree is awarded by Oxford Brookes University. This degree will
help me to assure to my employers that I have al relevant skill and
knowledge in accounting and finance, but that it is from a university that has
a reputation for excellence.
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 Reasons for Choosing the Topic

For my thesis I have chosen Topic 8- “An analysis and evaluation of the
business and financial performance of an organization over three year
period”.
During the time of my professional degree of ACCA, I have gained knowledge
in Accountancy and Finance. This selected topic gives me the opportunity to
enhance my knowledge and help to me to demonstrate to my acquired
knowledge. I use my learned techniques on accountancy and finance and
analyse and evaluate the performance of my selected company and to
improve my main graduate skill which is data analysis, research and
interpretation of data.
 Chosen Organization & Rationale behind choosing Tata Motors

Limited
For fair comparison purpose, I have chosen ‘Tata Motors Limited and
‘Mahindra & Mahindra’ due to the research and analysis of the project. In this
regard, I want to state that, for achieving my purpose I use Annual Report
(standalone) of Tata Motors Limited as well as Annual Report (standalone) of
Mahindra Motors.
To find out the current position and exact situation of Tata Motors Limited in
the automobile industry I study the financial statements for three years
(2013-2015) of this company. To accomplish my goal I will apply my
knowledge which connected with related topic. My rational behind the
choosing of Tata Motors Limited for analysing the business and financial
performance are as follows:
o Consistently Tata Motors Limited maintain faster growth pace
than it competitor and become as one of the most successful
market leader in commercial vehicle in Indian automobile
industry.
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o Recently customers become more sensitive to price, due to

economic slowdown. As a result, it negatively effects on
automobile sector and competition is getting stiff in India.
o Being a public listed company Tata Motors Limited it is easy to
get all required information. Shareholders, investors have the
legal right to know about financial information as a result Tata
Motors Limited provides detailed financial information to them.
 TATA Company Profile

Tata Motors, a subsidiary of the Tata Group, is an Indian automotive company
headquartered in Mumbai, India. It primarily operates in the automotive
segment, consisting of Tata and other vehicles as well as Jaguar Land Rover.
o Global Presence
Tata Motors has comprehensive global distribution network which in 175
country and 6600 sales and service points (Annual Report Standalone2014ofTATA Motors
Limited).It has manufacturing unit in seven countries of three continents which
are Europe, Asia & Oceania and Africa (Annual Report Standalone2014ofTATA Motors
Limited).. It has research and Development unit in 5 countries across two

continents.
o Joint Venture
In 2006, Tata Motors formed 51:49 joint ventures with the Brazil-based
company, Marcopolo, a global leader in body-building for buses and coaches
and the joint efforts help to manufacture fully-built buses and coaches for
India (Annual Report Standalone2014ofTATA Motors Limited).In 2006, Tata Motors entered
into joint venture with a Thailand based auto manufacturer name, Thonburi
Automotive Assembly Plant Company to grab the market of the company’s
pickup vehicles in Thailand. Tata Motors (SA) (Proprietary) Ltd., also entered
in joint venture with Tata Africa Holding (Pty) Ltd. And this joint effort enables
TATA to set up an assembly plant in Rosslyn, north of Pretoria , in 2011
(Annual Report Standalone2014ofTATA Motors Limited).
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o Acquisition
Jaguar Land Rover, acquired in 2008. TATA also acquired the Daewoo
Commercial Vehicles Company, South Korea’s second largest truck maker, in
2004 (Annual Report Standalone2014ofTATA Motors Limited).
o roduction Facility
TATA’s manufacturing base spread across Jamshedpur (Jharkhand), Pune
(Maharashtra), Lacknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand
(Gujarat) and Dharwad (Karnataka) (Annual Report Standalone 2014 of TATA Motors
Limited).
 Project aim & objectives

The major objective of Research and Analysis project (RAP) is to analyze the
overall business performance and financial performance of Tata Motors
Limited. In addition to the current business and financial performance status
of the company, this report also tries to find out the future prospect of the
company as well as industry overview and position of Tata Motors within the
industry.
To attain the research objective, it is important to gather information from
reliable sources. Here in this report, information is mainly gathered from last
three years annual report of Tata Motors and Mahindra Motors. Information is
also collect from newspaper and articles from various website.
o Financial performance:
In the report it is try to get answer of few selective questions. These answers
of the questions lead to the clear understanding of financial performance of
the company. Through this answers we get to know company’s return on
capital employed, profitable ratio, Earnings per shares etc. Financial
performance will be measured by answering the following questions:
i. How profitable the company is?
ii. Is the company facing any liquidity crisis?
iii. Performance comparison with its competitor
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o Business performance:
There are few business models use in business world to understand business
performance of any company. It would be determined by answering the
following questions:
i. What are the major opportunities and
threats
ii. What are industry situation and company’s
capability to cope up with it?
 Background of research approach:

After selecting the topic and company i have gathered information on
selected company, Tata Motors and Mahindra Motors. As Tata Motors and
Mahindra Motors is listed in NSE and BSE therefore, company therefore
information is available. To get financial performance i have calculated few
ratios which are listed below-
 Profitability
 Liquidity
 Gearing
 Investor ratios
To understand the business performance I use PESTEL, and SWOT analysis to
find out the company’s both external and internal competitive environment,
after reading through the company’s business nature and structure.
Limitations of the models also considered when selecting the appropriate
model.
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PART-2
Information Gathering and Accounting and
Business Techniques
 Sources of information
Information is foremost important element for conducting research and gets
the result. Therefore collecting information is very crucial for conducting
desired research result.
 Primary Source
For completing the research work, primary source of information is one of
most essential basis. Due to the nature of this particular research, I heavily
relied on secondary source of information such as- annual report, various
website, online newspaper, and online article rather than primary source of
information.
 Secondary Source
As I mentioned earlier, that to do my research work, attain research
objectives, and get the answer of my research question secondary source of
information sufficient. I have used various articles in business magazines and
the article for various journals which have been accessed via internet.
However, in this report the majority of the information is taken from online
sources that I’ve listed. Few benefits researchers can get by using secondary
source of information; are listed bellow
 Ease of Access: Secondary information is highly
available because of availability of online access;
secondary research is more openly accessed compare to
primary information.
 Low cost to acquire: To acquire secondary information a
researchers need not to expense high. A researcher’s can
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access to valuable information for little or no cost to

acquire. Therefore, this information is much less expensive
so that the researchers had to carry out the research
themselves
 Clarification of Research Question: The use of
secondary research may help the researcher to clarify the
research question. Secondary research is often used prior
to primary research to help clarify the research focus
 Methods Used to Collect Information
o Annual Reports of Tata Motors Limited and Mahindra &

Mahindra
I have used official website of Tata Motors Ltd, to gather information related
to company’s background, last three financial years annual reports. In
addition to this, information also collected form annual report to calculate the
key ratio. For analyzing the trend the use of the past three year’s financial
statements has helped me to exhibit the progress of the company over the
period.
o Electronic research
I collected majority of the information from internet for doing this report. I
have surfed the official website of Tata and Mahindra. As these sources were
more reliable, I have taken information from there. For my better
understanding and for achieving the research goal I have browsed through
other web pages. I also used some of their contents for clear definition in my
project.
o ACCA Text books
My report may not complete if paper F7 Financial Reporting & P2 Corporate
Reporting is not guide me. It leads me through the whole project for
conducting financial analysis of the project. My knowledge of Business
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analysis enhance by Paper F9, which taught me Financial Management & P3

Business Analysis. It also helps me to the application of business models.
 Limitations in information gathering

Company’s annual reports, newspaper articles, and websites are the main
source for gathering the information. I depend on these sources to complete
the project. . I have tried my level best to provide precise and applicable
information considering the following:
o Sometimes the exact information may not be possible to collect

from various websites. So considering this issue and ensure the
reliability, data was obtained from various government sites.
o Information credibility increased if third parties critically examine
the data. I scrutinize my all the information by third parties so
that information credulity is not under question.
 Limitations of the financial ratios

o Ratio calculation always cannot right information to analyze it is
depend on accuracy of financial statement. It might give altered
justification.
o Ratios deal with quantity rather than quality – ratio does not
address issues like product quality, customer service, after sales
service, these qualitative factors play an important role in
determining financial performance of the company.
 Limitations of the SWOT Analysis include
o One of the limitation of SWOT analysis is it cannot provide
solutions
o Through the analysis of SWOT it can generate too many ideas
but not help to choose the best one
o SWOT produce burden of information many of these are not
useful.
 Limitations of the PESTL Analysis include
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o External environment is not constant it changes every moment.

As its regularly changing, PESTL analysis must also conduct in
regular basis because it depends on it. Due to time and cost
constraints, companies are not doing this analysis regularly. So
the ultimate benefit of PESTL analysis is not possible to achieve.
o PESTL analysis sometimes leads huge loss for company. Because
the results of PESTL are subjective so that people can
misinterpret in many ways. so in the long run company can face
massive damage in its growth rate.
 Ethical issues
As I have attempted the ACCA Professional Ethics Module, which was, a
prerequisite to beginning work on my project. Ethics is significant to
everyday life in general and also applying ethical issue in the accounting
field in particular is very much crucial. Throughout the various ACCA papers
like P1 I have been learning various ethical issues. The ethical issue that
came into mind is as follows:
o Integrity:
Considering the issue of plagiarism, I have tried to reference others work,
report, ideas accordingly in order to safeguard against this threat. For
completing my research, I have relied mostly on secondary information,
which I have stated clearly.
o Objectivity:
Accordingly, in the R.A.P preparation guide, I have tried to be unbiased when
undertaking my research. I never try to provide only that information that
supports my view of the company have selected. According to me, neatly
sums up the other ethical issue I faced. Undoubtedly Tata Motors Limited is
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doing well than its rivals therefore I could run the risk of slanting my
research.
 An Explanation of the Accounting and Business

Techniques
o Financial Ratios
Financial statement analysis refers to: (1) comparing the firm’s performance
with that of other firms in the same industry, (2) evaluating trends in the
firm’s financial position over time.
 Gross Profit Margin: This is a profitability indicator for a
company. It measured by dividing Gross profit by Revenue
and present through percentage. The higher the margin is,
the better the company performance is.
 Operating Profit Margin: This profitability indicator
indicates the operating profit percentage over revenue.
This ratio is representing by percentage.
 Net Profit Margin: This is a profitability indicator
measurement tools. The ratio measured by dividing Net
profit by revenue. It is representing by percentage of
revenue.
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 Current Ratio: current ratio is liquidity measure

indicators. This ratio indicates how much a company is
liquidating to pay off its current obligation. This liquidity
ratio measures a company’s capability to pay off its short-
term obligations by short-term asset. The higher the ratio,
the more liquid the company is.
 Quick Ratio: Quick ratio is another form of liquidity
measurement indicator. This ratio is also known as acid
ratio, this ratio mainly a testing measurement to test the
company’s ultimate capability to pay off its current
liabilities.
 Gearing Ratio: This ratio show the financial leverage. it
explain the degree to which a firm’s activities are funded
by owner’s funds versus creditor’s funds
 Return on Capital Employed: this ratio measures a
company’s profitability. As well as profitability with the
efficiency of its capital is employed.
 Asset Turnover: This is calculated as a ratio by dividing
Revenue by Capital employed. The higher the ratio, the
more efficient management is.
 Business Techniques
o SWOT Analysis:
SWOT is a critical method for analyzing the internal and external
environment of the company. We can try to find out whether the internal and
external environment favourable or non-favourable for the growth of the
company or not.
 Strengths: Strength of the company mainly
analyzes the internal strength, which is an advantage
over its competitor.
 Weaknesses: Weaknesses of a company indicate
internal disadvantageous part of the company. It
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shows the company’s overall weak management

policies, infrastructure.
 Opportunities: it refers to the external factors that
can help a company to achieve its mission. It
presents the untapped sectors, ability to converge
existing platforms, growing opportunities in emerging
Sectors. Therefore, it directly enhances the success
of the company. Therefore, the essential purpose of
this section is to identify strategic opportunities, so
that company can increase its profitability and
sustainability.
 Threats: It identifies the external factors, which can
create barrier to achieve the company’s goal. It
demonstrates that competitor’s power, so they can
gain advantage by developing holistic system,
increasing presence of independent service provider.
it also affect the company’s internal operating
system.
 PESTEL Analysis:
PESTEL Analysis is a useful tool for understanding the ‘big picture’ of the
environment in which you are operating, and for thinking about the
opportunities and threats that lie within it. By understanding your
environment, you can take advantage of the opportunities and minimize the
threats.
 Political: it refers to whether the poetical situation and

political decision taken by government is favourable or non
favourable for the industry growth.
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 Government initiative to regulate or and de-regulative

industries.
 Nature of the government type and stability is one of
the prime issues.
 Rule of law and levels of bureaucracy and corruption
within the government is substantive part within
political analysis
 Tax policy, and trade and tariff controls by the
government.
 Environmental and consumer-protection legislation
 Economical: Economic activities and growth of the
country’s economy is another indicator to get essence of
industry position whether it is favourable for the company
or not.
 Trends of economic growth in upcoming future very
precisely current and projected economic growth,
inflation and interest rates trends
 Unemployment rate of the economy and supply of
skill and unskilled labour plays vital role to analyze
economic environment.
 Labour costs are crucial part in economic environment
analysis, as low labour cost helps the business to
grow.
 Amount of disposable income of the consumers and
distribution of income among people from different
occupations
 Impact of globalization in local economy
 Likely impact of technological or other change on the
economy
 Social: company’s overall growth can positively or
negatively affected by Change in societal factor. We can
name some of the factor such as-
 Population growth rate and age profile of the
population.
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 Population health, education and social mobility, and

attitudes to these
 Population employment patterns, job market freedom
and attitudes to work
 Technological: Technological advancement not only boosts
up the company’s growth but also it can change the overall
industry.
 Impact of emerging technologies and emergence of
technologists
 Impact of Internet, reduction in communications costs
and increased remote working.
 Research & Development activity conducted by
country and facility provided by the government
 Impact of technology transfer
 Environmental: To sustain in this competitive market in
the end an industry need to be environment friendly. So like
the previous factors we examine whether the authority is
friendly or not.
 Legal: Favourable legal frame works to the industry are
badly important to the growth of the industry as well as
company. Again, in that case, we examine whether law and
regulation is favourable to the industry or company or not.
However, the analysis of the external environment is not so convenient for
any manager of any company. Above all users’ access to quality information
is limited. This model ignores internal environment and competitive scenario.
PART -3
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Results, Analysis, Conclusions and

Recommendations
 Financial Performance Analysis

Financial Ratios always provide the in-depth view about financial scenario of
a company. However performance of a company not only judged by
quantitative performance, assessment of qualitative performance is also
required, which is often ignored during financial ratio analysis. However, in
this report, I largely depend on financial ratio analysis to get the real picture
of my selected company TATA Motors and use it as a mechanism for
comparative analysis with Mahindra & Mahindra.
I also have done PESTEL analysis, SWOT analysis and Porter’s five forces
analysis to get a qualitative view of the company.
Eventually I have looked at the amount of R&D expenditure TATA has made
in the last 3 years to measure an understanding of what importance the
company is giving in case of advance technologies.
o Profitability Ratios
Profitability is a company’s ability to generate revenues in excess of the
costs incurred in producing those revenues.
Profitably is analysed as follows:
International & Domestic Sales Trend (Passenger Vehicle)
Source: Annual Report 2013, 2014 & 2015 of Tata Motors Limited (Standalone) & Society of Indian Automobile Manufacturer
Through out here financial years TATA Motors maintain a stable trends in
exporting as well as domestic sales. In FY 2015 sales of TATA motors
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increased by 5.22% compare to last financial years. However number of

passenger vehicles sales increased by 3.88% compared to last financial
years.
 International & Domestic Sales Trend
(Commercial Vehicle)
Source: Annual Report 2013, 2014 & 2015 of Tata Motors Limited (Standalone) & Society of Indian Automobile Manufacturer
Sales of Commercial vehicles of Tata Motor are declining year to year. There
is declining trend has been observed throughout three financial years. This
declining is the reflection of overall failing trend in industry. Although overall
industry sales have declined but still Tata has grab the more 53.82% of total
market share.
The overall weak economy has effect the Tata Motors Limited revenue but in
case of Mahindra revenue is increasing year to year.
 Revenue From Four Wheelers
Source: Annual Report 2013, 2014 & 2015 of Tata Motors Limited (Standalone) & Mahindra & Mahindra
(Standalone)
The above mentioned graph reveals the fact that, Tata Motors losing its
revenue consistently two financial years. But in FY 2015 Tata revenue
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increased compared to last financial year. Revenue increased by 4.06%

compare to last financial year. In this regard, chairman of Tata Motors, said,
“In 2014-15, the Indian automotive industry registered a growth of over 2.5
percent over last year, with overall automobile exports growing by 5.2
percent. Growth in domestic passenger vehicle is strong at 5.5 percent with
improving consumer sentiment on account of lower fuel price and interest
rate,”(Annual Report 2015, pp05).
In this graph we also reveal that Mahindra & Mahindra Limited has also done
well in generating revenue in four wheelers segment. Mahindra & Mahindra
experienced as improvement in this segment compare to last financial year.
 Gross Profit Margin (%)
(Standalone)
The company has experienced almost stable revenue but Gross profit margin
(GPM) is slightly fall in FY2015 compare to last financial year. The decreasing
trend of Tata’s GPM is a result of increasing Cost of Goods Sold (COGS).
COGS, which is increased by 32.68% compare to FY2014 forced GPM decline
even after rise in revenue from FY2014 to FY 2015. On the other hand,
Mahindra keep their GPM stable and constant.
 Operating Profit Margin (%)
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(Standalone)
Operating Profit Margin (OPM) of Tata Motors is reducing year to year. In

FY2015 OPM of the company appeared nil or negative. Due to significant
increase in Operating cost, the company is facing this decline in FY2015.
Component of the operating cost increasing year to year such as employee
cost increased by 7.43%, dep. Cost increased by 25.74% and Product
development expense increased by 2.04% and other expense increased by
15.64%. On the other hand, Mahindra & Mahindra keep it OPM stable
compare to last financial year.
 Net Profit Margin (%)
(Standalone)
Net Profit Margin of Tata Motors Limited is very in FY 2013 and FY2014. But in
FY 2015 it appeared nil. Increasing finance cost as well as net operating loss
cause of this result. Finance cost increased by 20.50% compare to last
financial years in FY 2015. Tata Motors Limited made loss in FY2015.
Increasing finance cost as well as higher tax payment forced to incur loss in
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net profit. On the other hand, due to improvement in revenue, net profit
margin showing increasing and stable trend throughout three financial years.
 Return On Capital Employed
(Standalone)
It is the method of knowing the situation of the company regarding its

employed capital efficiency against profitability of the company. Tata motors
performance in this regard is not satisfactory. Efficiency of capital employed
to generate EBIT is not satisfactory. Due incurring operating loss in FY2015
caused a negative outcome in employed capital. The company need to
control in operation cost as well as must give emphasis to increase in
domestic sales and export so that employed capital could generate more
operating profit and make the company more efficient. In this case, it is
important to mention that, according to the consolidated statement ROCE of
Tata Motors appeared in FY2015 is 21.32% and 20.39% in FY2014.
 Asset Turnover (%)
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(Standalone)
This ratio measures management’s efficiency in generating revenue from its

net assets. The higher the ratio, the more efficient management has been. In
FY 2015, Tata Motors have ensured stability compare to last financial year.
But compare to Mahindra it is low.
o Liquidity Ratio
Liquidity ratio, expresses a company's ability to repay short-term creditors
out of its total cash. The following liquidity ratios would be analyses for the
research work.
 Current Ratio
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(Standalone)
A company is using current ratio to get the view of its capability to pay off its
short term liability by using its current asset. Tata motors current asset is
mainly comprise of inventories which is 56.01% in FY2015 and 57.32% in
FY2014 this indicates that inventory portion in current asset slight decline
year but as of decline in current investment, trade receivables and cash in
hand of the company decline which reduce the asset base of the company
and put the business in pressure to pay off its short term liability of the
company as Tata Motors current ratio is less than1 in each of the three years
which means the company is in a risky position to meet its short term
payment. On the other hand, Mahindra’s current ratio is more than the
norm, which indicates that the company is capable in paying its short term
obligation at any given time.
 Acid Test Ratio
(Standalone)
Acid test ratio indicates the company’s capability to pay off its current
liability by using it current asset excluding inventories. Comparing with
current ratio, acid test shows that there is a significant contribution of
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inventory in current assets for Tata Motors. As mentioned above, inventories

of Tata is increasing year to year, which is 56.01% in FY2015 and 57.32% in
FY2014 of total current asset. This indicates that the company is under
significant risk of not being able to pay off short term debts. However,
Mahindra & Mahindra is in relatively comfortable zone compare to Tata
Motors.
 Receivables Days
(Standalone)
Receivables days indicate about the fact how well a company manages its
debtor and how efficiently debt collection team is collecting debt. Tata
Motors is taking fewer days in collecting receivables. The company is trying
to maintain stable pattern in receivables. Analysis of three years data gives
the impressive impression about the company. In FY 2015 it is 10.66 days,
11.65 days in FY2014 and 17.63 days in 2013 took to realize working capital
tied up with receivables. Receivable of the company is always in a
acceptable manner. It shows strong credit control policy of the company. On
the other hand, Mahindra and Mahindra doing relatively poor compare to
Tata Motors.
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 Payables Days
(Standalone)
Payables days are indicating company’s capability to pay of its suppliers. In

the graph it is clearly represent that Tata motors is taking more time to pay
off its suppliers. Moreover payables are decreasing in FY2015 compare to
FY2014. Moreover this high amount of payables contributes to increase
current liability of the company. Though payables days of Tata decreased in
FY2015 compared to FY2014, there is a potential threat that Tata might end
up of good relations with suppliers if it continues. On the other hand,
payables days of Mahindra showing stable trend all over three financial
years. Mahindra is paying suppliers early whereas Tata Motors is doing the
opposite.
 Inventory Days
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(Standalone)
Inventory of Tata Motors is increasing in respective of its current asset. As we

mentioned above in FY2015 it is more than 50%. Inventory holding days is
indicating the company’s capability to consume it inventory which held up in
godown. Slight fall in commercial vehicle sales and almost stable passenger
vehicle sales caused for, inventory consumption days of the increased year
to year. For Tata higher inventory holding up is a reason for lower acid test
ratio. On the other hand, Mahindra is managing its inventory better than Tata
Motors.
 Gearing Ratio
(Standalone)
Gearing ratios essentially tells us the amounts of risk associated to the

company. The more highly geared a company is, the more unpredictable will
be its profits left to distribute to shareholders. Tata Motors gearing ratio is
upward trending slightly which is because of company policy to debt
financing. Therefore little rise in gearing is actually meeting company’s
objective.
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o Investor Ratio
 EPS
EPS is very crucial and important figure for common stockholders, because
through this they get to know earning of the company in future and
based on this value of the stock may increase, Tata Motors EPS figure
is low which indicates lower earning of the company and weak financial
position, but in this case it is very important to mention that we are
considering only Stand Alone Annual Report for fair comparison but
if Consolidated Annual Report is chosen the EPS will be appeared
Rs.43.51 in FY2014 and Rs.31.05 in FY2013
 Price/Earnings Ratio
The price earnings (P/E) ratio reflects the worth of the company, it is stock
markets evaluation regarding company’s worth. It indicates whether the
stock market’s has assurance in the company’s future growth or not. Tata
Motors Limited P/E is improving as it is rising from FY2015 was caused vitally
for rise in average share prices because of improved earnings if we consider
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Consolidated Annual Report during economic downturn. it‘s Competitor

Mahindra & Mahindra P/E is still higher than Tata Motors Limited through
three financial years.
 Indian Automobile Industry Overview

In India, automotive is showing impressive growth over the years and has
significant contribution to overall industrial development in the country.
Indian automobile industry consists of passenger cars; light, medium and
heavy commercial vehicles. At present, India is the world's second largest
manufacturer of two wheelers, fifth, in terms of commercial vehicles
manufacturer and largest tractors manufacturer. It is the fourth largest
passenger car market in Asia as well as a home to the largest motor cycle
manufacturer. (Business Portal of India:Government of India, Indian Economy,
Investment, Incentives, Trade,Infrustructure,Legal Aspect)
 Automobile Sales Trend
27 | P a g e
Indian automobile industry largely dominated by two wheelers and sales

passengers vehicles stand second in position. According to, Society of
Indian Automobile Industry- Two wheelers grabbed 81% of total
production and passenger vehicles 13% in fiscal year 2014-15.
Source: (Society of Indian Automobile industry, 2014-15)

Fig-1 –Domestic Market Share, 2014-15
In Fiscal year 2014-15, Indian automobile industry experienced a murky

scenario due to global as well as domestic economic slowdown.
Source: (Society of Indian Automobile industry, 2013-14)

Fig-2 –Automobile Domestic Sales Trend
 Future of Indian Auto Sector

India will be the fourth largest automotive market by 2015, and currently 215
million vehicles produced in 2013-14 fiscal year which is 7% of the country’s
GDP by volume (Make in India, 2015).Indian government has given emphasis
to development of automobile sector.
For robust growth in automobile industry Indian government plan to increase
budgetary allocation in research and development by 200% from 150% (in
house) and 175% from 125% (outsourced) as well as government will revise
excise duty on small cars (Make in India 2015) .In addition government has
been set up Automotive Testing and R&D Infrastructure Project at cost of
28 | P a g e
USD 388.5 Million to adopt and implement global performance standard

(Make In India 2015).
 PESTEL ANALYSES
The Indian automotive industry has flourished in recent years. This
extraordinary growth that the Indian automotive industry has witnessed is a
result of a two factors namely, the improvement in the living standard of the
middle class and an increase in their disposable incomes. In addition to this,
relaxation of government monetary policy also helps the industry to grow
leaps and bound. PESTL analysis is concerned with the environment in
fluencies on a business. Identifying PESTL influences is a useful way of
analyzing external environment in which a business operates.
29 | P a g e
o POLITICAL Environment
 Make in India Campaign:
Make in India campaign is a major national program designed to transform
India into global manufacturing destination. This campaign allures foreign
direct investor to invest in India. This is one of the bold initiative has been
taken by Prime Minister Narendra Modi led Government. It includes plans to
cut red tape, develop infrastructure and make it easier for companies to do
business (www.bbc.com/news/world-asia-india-29357627). This new
campaign also includes automobile sector. Therefore, this campaign also
boost automobile sector of India In addition to, Indian government has
appeared with Automotive Mission Plan-
“To emerge as the destination of choice in the world for design and
manufacture of automobiles and auto components with output reaching a
level of US$ 145 billion accounting for more than 10% of the GDP and
providing additional employment to 25 million people by 2016” (Department
of Heavy Industry and Public Enterprise, Automotive Mission Plan 2006-2016)
 E-Biz Mission:
To ease the business environment and to ensure more transparent business
environment within Indian Territory, Indian government has taken The eBiz
Project. Therefore, business environment of the country become more
efficient, convenient, transparent, and integrated electronic service to
investors, industries, and business in the areas of information on forms &
procedures, license, permits, registration, approvals, clearness, permission,
filing, payments and compliances throughout the life-cycle of an industry or
business life cycle (Department of Industrial Policy & Promotion, Annual
Report 2013-14).
o ECONOMIC Environment
 FDI Inflow:
30 | P a g e
Government of India is trying increase foreign direct investment in overall

manufacturing sector. According to UNCTAD Word Investment Report (WIR)
2013, in its analysis of the global trends in Foreign Direct Investment (FDI)
inflows, has continued to report India as the third most attractive location for
FDI for 2013-2015. The report also mentions that India accounted for more
than four fifths of the FDI in South Asia in 2012 (Department of Industrial
Policy & Promotion, Annual Report 2013-14).Indian Government allowed
100% FDI under the automatic route in the auto sector, subject to all the
applicable regulations and laws (Make in India 2015).
 Increasing GDP and Per Capita Income:

Growth in national income and personal income forced to raise the
consumption of consumers’ goods. More income gives the opportunity to
consume more luxurious item such as automobiles. As more and more
persons buy motor vehicles, the motorization rate will increase (Richet &
Ruet, 2008).The economic situation in India is better. Growth in gross
domestic production is consistently increasing and contribution of
manufacturing segment is increasing.
Source: CIA World Fact book
World Bank’s India Development Update, A biannual analysis of the

Indian Economy,
31 | P a g e
“With economic reforms gaining momentum, India’s long-term growth

prospects remain bright”.
The report also finds-
“Indian economy expected to grow by5.6% in FY2015, 6.4% in FY2016 and
7.0% in FY2017”. s
 Excise Duty Reduction:

For the smooth growth of the industry Indian government has reduced excise
duty on every kind of automobile. Government declared duty reduction in its
interim Union Budget 2014. Small cars, motorcycle and scooters will enjoy
duty reduction from 12% to 8%, along with this, duty has been reduced from
30% to 24% on Commercials Vehicles and SUVs and Large and mid segment
cars will enjoy reduced duty facility from 27% to 24% and 24% to 20%
respectively (Make in India 2015).
o SOCIAL Environment
 Population Growth
Population growth has impact on the number of motor vehicles in developing
countries. With increasing of population consumption of service and goods
per person also increase, therefore, size of transportation sector is
population growth sensitive.
 Urbanization
Rapid urbanization is playing important role to the growth of automobile
industry. As urbanization force more people to migrate to cities because of
jobs, education and medical treatment which influence the number.
Many analysts indentify these primary factors that influence the growth rate
of motor vehicle in many developing countries and they are population
growth, increased urbanization and economic development (Riley, 2002).
According to World Urbanization Prospects 2014,
32 | P a g e
“Just three countries-India, China, and Nigeria-together are expected to

account for 37percent of the projected growth of the world’s population
between 2014 and 2050. India is projected to add 404 million urban
dwellers, China 292 million and Nigeria 212 million”
Table 1: Total Population, Urban Population and Motor

Vehicles (2000-2009)
Urban Population (In Total Motor Vehicles(in
Year
Thousands) millions)
2000 281416 52.37
2001 285748 54.99
2002 294668 58.92
2003 301224 67.01
2004 307721 72.72
2005 314145 81.5
2006 321623 89.61
2007 329112 100.7
2008 336746 110.52
2009 371460 121.63
Source: An overview of India’s Urbanization, Urban Economic Growth an Urban Equity –
Sabyasachi Tripathi –Institute for Social and Economic Change Mach -2013 pp 140
o TECHNOLOGICAL Environment
 Electric Mobility 2020:
Indian government has taken initiative for greener and cleaner environment
as well as protecting National Fuel Security by reducing fuel consumption.
Therefore Indian government has initiated a collaborative approach between
government and industry to encourage reliable, affordable and efficient xEVs
(hybrid and electric vehicles that meet consumer performance and price
expectation (Make in India, 2015). This collaborative approach also helps to
develop indigenous manufacturing capabilities, required infrastructure,
consumer awareness and technology. (Make in India 2015)
 Pilot Electric Vehicle Projects:
33 | P a g e
To facilitate the Technological advancement Indian government has already

take a pilot project on electric vehicles in Delhi and subsequently, other
metros and cities all across the country under the NEMPP 2020 with a dual
purpose- demonstrating and disseminating the benefits of adopting cleaner,
greener modes of transportation as also to explore the viable optional
modalities(Make in India2015)
o LEGAL Environment
India- EU Trade Liberalization Pact:
Indian government is going to sign a deal with EU which helps to liberalize
the trade between India and EU by reducing tariff. But according to SIAM
(Society of Indian Automobile Industry) this proposed pact hurt the domestic
automobile firms. SIAM also said-
“FTAs with competing countries do not benefit automobile industry, it is
against the concept of Make in India for local value addition and local
employment and such completely built (CBUs) of vehicles and engines
should be kept in India’s negative list under India-EU FTA”
Indian auto industry will be hurt because of reduction of tariff which is more
clear by the below mentioned statement of SIAM-
“Indians car can already be exported at 10 per cent duty to Europe.
Obviously, India will not gain much by further reduction of EU duties for our
cars but if Indian duties are reduced by 50 per cent or even more, it will be
substantial reduction in tariff. The gains will be clearly be for the EU
34 | P a g e
 SWOT Analysis
o Strength
 International strategy - about new acquisitions, Tata
added some of senior managers in the new companies or
market. The benefit is that Tata Motors is able to exchange
the expertise. Also by doing that the new company will
don’t need to setup new managerial post and company can
run as per the old settings.
 Globalization- The company has a strategy to expand its
network in world wide and company already started by
expanding its networks to South Africa, China, UK, South
Korea, Brazil and many others countries.
 R&D- Tata Motors put emphasize on R&D, and developed
some of the very useful machine for Indian market for
example- Tata Safari- India first sport utility vehicle, Tata
Nano- World cheapest car, Tata Ace- Indies first mini
transport utility vehicle, Tata Indica V2- Car that is most
fuel efficient in Indian Market. Tata is also working for
Compressed air car- Motor Development International of
France has developed the world’s first prototype of
Compressed air car Named OneCat.
o Weaknesses
 Less Luxury-Tata as a international brand, do not produce
luxury vehicles for domestic market. That is a
disadvantage for company to competing with other Car
makers in domestic market.
 Wrong Advertisement- Company is lacking in
advertisement of their brand and Media is focusing
35 | P a g e
company’s failures about Tata Nano now days. Company

also started monthly payment system for Tata Nano that is
99rupee (14 SEK) per month that is cheaper than the
mobile subscription per month. That is developing negative
psychology about Nano in people.
o Opportunities
 Demography - According to indexmundi.com, 64.9% of

the India population is between 15 and 64 years which, in
other words, states that over 700 million are legal
candidates to have a car. (Index Mundi) This number is
growing.
 Economy - The eyes of the world are on India’s economy.
There is a lot of demand for Indian products. Many journals
such as The Economist and India is growing economic
power house. Indian economy will grow by 7.4% this fiscal
year, outpacing China to become world’s fastest growing
economy (The Times of India 9 February 2015). The per
capita net national income raised by 10.1% to RS. 88,538
from RS. 80,380 compare to previous year (The Times of
India 9 February 2015). This is an opportunity for the
company to have trustworthy providers as well as
employees.
 Political - According to The Economic Times “the
government is aiming to spend $1 trillion on infrastructure
development by 2017”. This can only be interpreted as a
political willpower to help the country’s wellbeing. A
healthy country is a low-risk-to-invest country.
 Social - Times of India published the following on
September 15th, 2010: “… Indian women demonstrate
stratospheric levels of aspiration – 76 per cent… aspire to
36 | P a g e
a top job… 85 per cent of Indian women consider

themselves “very ambitious,”…”. This boosts the number
of potential clients. Environmental trends are also an
opportunity on which the company is already taking
advantage.
o Threats
 Economy – A fast growing economy could mean more

competitors. At the same time, high demand of products
could bring inflation that affects the company’s potential
clients budged. The following statement was taken from
bbc.co.uk: “Raging inflation and a gradual increase in
borrowing costs has dampened domestic demand,
alongside lackluster investment sentiment,” said Radhika
Rao of Forecast Pte.
 Social - Times of India (timesofindia.com) states the

following: “… more than half of Indian women experience
pressure from their spouses and in-laws to quit working
when they get married… 52 per cent of Indian women
were criticized for continuing their career”. This on the
other hand decreases the number of potential clients.
37 | P a g e
4.0 Conclusion and Recommendations:
As it is mentioned earlier, in this report for analysis purpose, Annual Report

(standalone) has been used. It is also important to mention that product
category of both of the company is not identical. It clearly stated the rational
behind selecting TATA Motors Limited for my analysis. In this report business
performance and financial performance of Tata Motors Limited is analyzed.
Here for financial purpose ratio analysis is used, so that financial
performance of Tata Motors can be understand and evaluate. In this analysis,
it is found; Tata Motors must give utmost attention to boost up its domestic
sales as well as international export. Otherwise, profitability will suffer much
in coming years. Operating cost increased resultant of operating loss as well
as net loss also hampered company financial strength. Return on Capital
Employed (ROCE), (calculate based information collected from standalone
annual report) also give murky scenario of the company. Liquidity position of
the company is not satisfactory. Tata Motors Limited is struggling to pay off
its current liability by using its current asset. According to the Standalone
38 | P a g e
Annual Report 2015, investor are likely to be demoralized and net loss left
negative EPS.
Being multinational Tata has to abide by laws and restrictions, corporate
governance code, human right which the company is meeting successfully.
Moreover Tata manages its risk of losing market share by investing more in
R&D and inventing more friendly commercial vehicle. Adoption of robust
marketing, policy, purchasing or raw material, attachment with government,
and central bank and proactive approach made Tata even more credible.
Reference
1. Society of Indian Automobile Manufacturers, Domestic Market Share for2014-
2015. Available from:: http://www.siamindia.com/statistics.aspx?
mpgid=8&pgidtrail=12 (Accessed:25 April2015)
2. Society of Indian Automobile Manufacturers, Domestic Sales Trend. Available
from:: 8http://www.siamindia.com/statistics.aspx?mpgid=8&pgidtrail=14
(Accessed:25 April2015)
3. Society of Indian Automobile Manufacturers, Automobile Export Trend.
Available from:: http://www.siamindia.com/statistics.aspx?
mpgid=8&pgidtrail=15 (Accessed:25 April2015)
4. PTI 2015, ‘India to grow at 7.4% this year, outpacing China’, The Economic Times 9
February. Available From:
http://economictimes.indiatimes.com/news/economy/indicators/india-to-grow-at-7-4-
this-year-outpacing-china/articleshow/46179512.cms (Accessed:25 April 2015
5. PTI 2015, ‘India to grow at 7.4% this year, outpacing China’, The Economic Times 9
February. Available
From:http://economictimes.indiatimes.com/news/economy/indicators/india-to-grow-
39 | P a g e
at-7-4-this-year-outpacing-china/articleshow/46179512.cms (Accessed:25 April

2015)
6. Make In India 2015, Reasons To Invest. Available From:
http://www.makeinindia.com/sector/automobiles/ (Accessed:26 April 2015)
7. Ministry of Heavy Industry and Public Enterprise, Department of Heavy
Industry and Public Enterprise, Automotive Mission Plan 2006-2016.
Available From: http://dhi.nic.in/Final_AMP_Report.pdf (Accessed:26 April
2015)
8. Make In India 2015, Sector Policy. Available From:
9. Make In India 2015, Sector Policy. Available From:
10. Tata Motors n.d. Tata Motors Limited Company Profile. Available from:
http://www.tatamotors.com/about-us/company-profile.php (Accessed:26 April
2015)
http://www.tatamotors.com/about-us/company-profile.php (Accessed:27April
2015)
http://www.tatamotors.com/about-us/company-profile.php (Accessed:28April
2015)
http://www.tatamotors.com/about-us/company-profile.php (Accessed:28 April
2015)
14. Ministry of Commerce & Industry, Department of Industrial Policy &

Promotion, Annul Report 2013-2014. Available From:
http://dipp.nic.in/English/Publications/Annual_Reports/AnnualReport_Eng_201
3-14.pdf
(Accessed: 28 April 2015)
15. United Nations Conference on Trade and Development, World Investment
Repot 2013. Available From:
3-14.pdf
16. Ministry of Commerce & Industry, Department of Industrial Policy &
Promotion, Annul Report 2013-2014. Available From:
3-14.pdf
40 | P a g e
17. Make In India 2015, FDI Policy. Available From:

18. CIA Fact book, Economy India: Economic Overview. Available from:
(Accessed:28 April 2015)

https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
19. The World Bank, Global economic Prospects, Country and Region specific
forecasts and data. Available
form:http://www.worldbank.org/en/publication/global-economic-
prospects/data?region=SAS (Accessed:28 April 2015)
20. World Bank, India Development Update October 2014.
http://www.worldbank.org/en/country/india/publication/development-update-
domestic-reforms-encourage-investments (Accessed: 28 April 2015)
21. United Nations, Department of Economic and Social Affairs, World
Urbanization Prospect 2014. Available from:
http://esa.un.org/unpd/wup/Highlights/WUP2014-Highlights.pdf
22. Tripathi, S. 2013, An Overview of India’s Urbanization, Urban Economic
Growth and Urban Equity, Institute of Social and Economic Change. Available
from http://mpra.ub.uni-muenchen.de/45537/ (Accessed: 28 April 2015)
APPENDIX
41 | P a g e
Appendix 1: Extracts from Annual Reports of Tata Motors Limited

(Income Statements)
42 | P a g e
Financial Year Ending : March (INR in

2,015 2,014 2,013
Millions)
468,539.2
Revenue 381,762 381,212
0
(270,41 (259,13 (359,457.0
Less : Cost Of Sales/Services
7) 5) 0)
Gross Profit 111,345 122,077 109,082
GP Margin 29% 32% 23.28%
Other Operating Income 0 0 0.00
(130,93 (113,55 (89,196.30
Less : Operating Cost
8) 1) )
(19,593
Profit/(Loss) From Operations 8,526 19,886
)
(16,117 (13,375 (13,877.60
Net Finance Costs
) ) )
Non-Operating Income 0 0 0
(35,710
Profit/(Loss) Before Tax (4,849) 6,008.30
)
Tax Expense And Zakat/ provision for
(7,642) 13,603 1,269
taxation
(43,352
Profit/(Loss) After Tax 8,754 7,277
)
Pre-Acquisition Loss/(Profit)
Profit/(Loss) Attributable To Minority
Interests And Others/tax holiday reserve
Profit/(Loss) After Tax And Before
(43,352
Extraordinary Item Attributable To 8,754 7,277
)
Shareholders
Extraordinary Item (4,038) (5,399) (4,259)
Net Profit/(Loss) For The Year (47,390
3,355 3,018
Attributable To Shareholders )
Retained Profit/(Loss) Brought Forward 18,796 15,440 12,422
Prior Year Adjustments
Restated Retained Profit/(Loss) Brought
18,796 15,440 12,422
Forward
(28,594
Profit/(Loss) Available For Appropriation 18,796 15,440
)
43 | P a g e
Appendix 2: Extracts from Annual Reports of Tata Motors Limited

(Balance Sheet)
Balance Sheet
Financial Year Ending : 2,015 2,014 2,013
March
NON-CURRENT ASSETS
Fixed And Operating Assets 218,240 215,955 420,498
Other Non-Current Assets 195,462 213,999 0
413,702 429,954 420,498
CURRENT ASSETS
Current Land And 0 0 0
Development Expenditure
Inventories 48,021 38,625 44,550
Trade Receivables 11,145 12,167 18,180
Other Receivables 0 0 0
Cash And Bank Balances 9,448 2,261 4,629
Cash in hand & at banks 9,448 2,261 4,629
Other Current Assets 17,117 14,337 33,989
85,730 67,390 101,347
CURRENT LIABILITIES
Borrowings 77,620 47,690 62,169
Trade Payables 88,527 96,724 84,550
Other Payables 31,429 24,632 49,231
Provisions For Liabilities 6,131 18,929 15,096
203,706 187,975 211,046
NET CURRENT ASSETS/ (117,977) (120,585) (109,699)
(LIABILITIES)
295,725 309,369 310,799
FINANCED BY :
SHAREHOLDERS' EQUITY
Share Capital 6,438 6,438 6,381
Reserves 142,188 185,329 184,965
Retained Profits/(Losses)
148,626 191,767 191,346
Minority Interests
148,626 191,767 191,346
NON-CURRENT LIABILITIES
Borrowings 123,190 97,465 80,518
Provisions For Liabilities 0 431 32,024
Other Non-Current 23,910 19,707 6,912
Liabilities
44 | P a g e
147,100 117,602 119,453

295,725 309,369 310,799
Appendix 3: Extracts from Annual Reports of Mahindra & Mahindra

(Income Statements)
Financial Year Ending : March 2,015 2,014 2,013
Profit and Loss Account
Financial Year Ending : March 2,015 2,014 2,013
Revenue 397,943 412,265 409,903.3

0
Less : Cost Of Sales/Services (279,553 (294,323 (304,152.

) ) 40)
Gross Profit 118,390 117,942 105,751
GP Margin 30% 29% 25.80%
Less : Operating Cost (77,914) (72,183) (60,274.3

0)
Profit/(Loss) From Operations 40,475 45,759 45,477
Net Finance Costs (2,143) (2,592) (1,911.90)
Profit/(Loss) Before Tax 38,332 43,166 43,564.70
Tax Expense And Zakat/ provision for (8,478) (6,111) (10,943)

taxation
Profit/(Loss) After Tax 29,855 37,056 32,622
45 | P a g e
Appendix 4: Extracts from Annual Reports of Mahindra & Mahindra

(Balance Sheet)
Mahindra & Mahindra

Balance Sheet
Financial Year Ending : 2,015 2,014 2,013
March
NON-CURRENT ASSETS
Fixed And Operating Assets 81,082 71,054 58,213
Other Non-Current Assets 147,083 128,943 126,888
228,165 199,997 185,102
CURRENT ASSETS
Inventories 24,376 28,036 24,198
Trade Receivables 25,580 25,098 22,084
Cash And Bank Balances 20,648 29,504 17,814
Other Current Assets 30,678 30,251 25,339
101,282 112,889 89,434
CURRENT LIABILITIES
Borrowings 1,063 7 546
Trade Payables 53,654 60,688 55,797
Other Payables 35,025 26,973 25,161
89,742 87,668 81,504
NET CURRENT ASSETS/ 11,540 25,221 7,930
(LIABILITIES)
239,705 225,219 193,032
FINANCED BY :
SHAREHOLDERS' EQUITY
Share Capital 2,957 2,952 2,952
Reserves 189,594 164,960 143,638
Retained Profits/(Losses)
192,551 167,912 146,589
192,551 167,912 146,589
NON-CURRENT LIABILITIES
Borrowings 25,140 37,445 31,724
46 | P a g e
Provisions For Liabilities 6,073 5,103 4,416

Other Non-Current 15,940 14,759 10,303
Liabilities
47,154 57,307 46,443
239,705 225,219 193,032
APPENDIX 5
Formulas used in ratio calculation
Profitability ratios:
1. Gross profit margin = Gross profit / Sales * 100
2. Net profit margin = Operating profit / Sales * 100
3. Return on Capital employed
= profit before interest and tax / average capital employed
*100
Liquidity ratios:
1. Quick ratio = (Current assets – inventory) / Current liability
2. Current Ratio = current asset / current liability
Efficiency ratios:
1 Inventory days = Inventory / cost of sales * 365
2. Receivables days = Receivable / Sales * 365
3. Payable days = payables / Cost of Sales * 365
Gearing ratios:
1. Gearing ratio = long term debt / debt + equity
Investor ratios:
1. Earnings per share = Profit after tax and preference dividend /
weighted average number of shares
47 | P a g e
48 | P a g e

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 Reasons for Choosing the Topic

 Chosen Organization & Rationale behind choosing Tata Motors

o Recently customers become more sensitive to price, due to

 TATA Company Profile

Limited).. It has research and Development unit in 5 countries across two

 Project aim & objectives

 Background of research approach:

access to valuable information for little or no cost to

 Methods Used to Collect Information

o Annual Reports of Tata Motors Limited and Mahindra &

analysis enhance by Paper F9, which taught me Financial Management & P3

 Limitations in information gathering

o Sometimes the exact information may not be possible to collect

 Limitations of the financial ratios

o External environment is not constant it changes every moment.

 An Explanation of the Accounting and Business

 Current Ratio: current ratio is liquidity measure

shows the company’s overall weak management

 Political: it refers to whether the poetical situation and

 Government initiative to regulate or and de-regulative

 Population health, education and social mobility, and

Results, Analysis, Conclusions and

 Financial Performance Analysis

increased by 5.22% compare to last financial years. However number of

 Revenue From Four Wheelers

increased compared to last financial year. Revenue increased by 4.06%

 Gross Profit Margin (%)

Operating Profit Margin (OPM) of Tata Motors is reducing year to year. In

 Net Profit Margin (%)

 Return On Capital Employed

It is the method of knowing the situation of the company regarding its

 Asset Turnover (%)

This ratio measures management’s efficiency in generating revenue from its

 Acid Test Ratio

inventory in current assets for Tata Motors. As mentioned above, inventories

Payables days are indicating company’s capability to pay of its suppliers. In

Inventory of Tata Motors is increasing in respective of its current asset. As we

Gearing ratios essentially tells us the amounts of risk associated to the

Consolidated Annual Report during economic downturn. it‘s Competitor

 Indian Automobile Industry Overview

Indian automobile industry largely dominated by two wheelers and sales

Source: (Society of Indian Automobile industry, 2014-15)

In Fiscal year 2014-15, Indian automobile industry experienced a murky

Source: (Society of Indian Automobile industry, 2013-14)

 Future of Indian Auto Sector

USD 388.5 Million to adopt and implement global performance standard

Government of India is trying increase foreign direct investment in overall

 Increasing GDP and Per Capita Income:

Source: CIA World Fact book

World Bank’s India Development Update, A biannual analysis of the

“With economic reforms gaining momentum, India’s long-term growth

 Excise Duty Reduction:

“Just three countries-India, China, and Nigeria-together are expected to

Table 1: Total Population, Urban Population and Motor

 Pilot Electric Vehicle Projects:

To facilitate the Technological advancement Indian government has already

company’s failures about Tata Nano now days. Company