See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/335389201

Financial Performance in Maruti Suzuki

Article · August 2019

CITATIONS READS

0 1,904

3 authors, including:

Raja Narayanan Sandhir Sharma

Chitkara University Chitkara University
11 PUBLICATIONS   1 CITATION    35 PUBLICATIONS   20 CITATIONS   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Financial Performance in Maruti Suzuki View project

Research on Stakeholder Opinions and Financial Performance in Reliance Industry View project

All content following this page was uploaded by Raja Narayanan on 20 April 2020.

The user has requested enhancement of the downloaded file.

 Int. J. Manag. Bus. Res., 9 (3), 01-07, August 2019

Financial Performance in Maruti Suzuki

1*
Raja Narayanan, 2Sandhir Sharma
1*
Professor, Chitkara Business School, Chitkara University, NH 64, Rajpura, Punjab,
India.
2
Professor and Dean, Chitkara Business School, Chitkara University, NH 64,
Rajpura, Punjab, India.
1*
Corresponding Author, E-mail: rajanarayanan40@gmail.com
2
E-mail: sandhir@chitkara.edu.in

Received: 05 June 2019 Accepted: 15 July 2019

ABSTRACT:

The achievement of every business is purely depending up on their operational activity in

financial. In the financial market will give more idea about handlining the money related risk.
Especially EPS and DPS will give you clear picture about the company performance. So, the
management always show more concentrate on financial activity and who will handling
financial position. This paper will focus on the financial performance of Marathi Suzuki
Company‟s financial position using some financial tools to evaluate the company
performance.

Keywords: Finance, Motor Company, Financial Position, Maruti Suzuki.

frequently identified to be low, even if it is

INTRODUCTION making profit.
Maruthi Suzuki India (MSI), previously
famous vehicle production in India. It is a FINANCIAL PERFORMANCE
56.21% kept for the Japanese Car and Financial performance investigation is
Motorcycle production automobile business. the progression of defining the action and
Up to early 2019, it had nearly 53 percentage monetary features of a business from
of market share for India Passenger car accounting and financial statements. The
marker, no matter for manufacturing, service, object of an such instigations is to identify
finance, human resource and IT. However, the effectiveness and performance of the
every corporate group gets adequate cash for firm‟s management, it will be reflecting in
booming its events, achievement of the the financial record and report as well.
business rest on how well the group able to Basically the word “performance” is birth
be handle them. That is, it be subject to how from the word „Perfourmen‟ meaning to do /
fit a corporate body, how effectively invest carry / to tender. It mentions to the
their capital, like debt and equity form and it performance of accomplishment:
will be result of how generate their profit. implementation, achievement, contentment
Success of the business is purely by how the etc. In a wider logic, performance denotes to
firm it finances to their assets and make use the achievement of an agreed duty evaluate
of the resource to generate income, the in contradiction with preset values of
company can be stand healthy if its financial accuracy, extensiveness, price and haste.
performance constantly getting profit. Performance is used to specify the business
Sometime business is measured to be achievement, circumstances, and protests.
incompetent, if the production level is The object of financial evaluation is to

1
 Int. J. Manag. Bus. Res., 9 (3), 01-07, August 2019

identify the competence and presentation of in Indian and also other unindustrialized
the business administration, as reproduced in bazaars. Balakrishnan, Jagathy (2016),
the financial history. The investigation absorbed on Globalization and liberalization,
efforts to amount the business soundness, with the access of countless protuberant
liquidness, effectiveness and other pointers, external producers, different the vehicle set-
so that the business is led in a lucid and usual up in India, since initial 1990s. Constructors
way. More exactly, any investigation on such as Ford, General Motors, Honda,
economic performance of a corporate body Toyota, Suzuki, Hyundai, Renault,
seeks to reside upon primarily, Mitsubishi, Benz, BMW, Volkswagen and
1. Evaluating the quick and short term Nissan set up their industrial components in
as well as long term solvency. India in dual undertaking with their Indian
2. Measuring the acid form and complement businesses by manufacture use
effectiveness. of the Foreign Direct Investment strategy of
3. Classifying the competence of the Government of India. These producers
monetary processes. ongoing apprehending the emotions of
4. Examining the issues influential in Indian car customs with their choice of
solvency level liquidness and technical and pioneering creation landscapes,
effectiveness. with excellence and dependability. With the
array of selections accessible to the Indian
PERVIOUS APPROACHES passenger car buyers, it radically altered the
The aim of this part is to investigate way the car acquisitions in India and mainly
work applicable to Car Businesses as well as in the State of Kerala. This distorted the
earlier studys from journals, article, books, vehicle division from a venders ‟marketplace
newspaper, TV and radios which is focus on to purchasers”. Car customers ongoing
financial analysis and performance of the emerging their own personal favorites and
business under various business. The purchasing decorations, which were
researcher identified Sharma (2014), in her previously unidentified in the Indian vehicle
schoolwork on „Indian Automotive Industry‟ section. Ray (2017) tries to appraise the
has examined the sales and competences of presentation of Indian auto manufacturing
various business in vehicle manufacturing. industry in footings of numerous economic
The study al so, shows that the development pointers, sales trend, production trend, export
in the vehicle is predictable to produce due trend etc. for the retro of 2013-14 to2017-
to growing disposable revenue and 18.The result recommends that the vehicle
cumulative consumerism. The worldwide manufacturing has been transitory finished
vehicle producer will remain to assign a wild stages considered by improved debt
increasing quantity of the foreign direct weight, short operation of properties, and
investment in India (FDI), rising vehicle – above all, massive liquidness crisis .The key
producing first and latter auto engineering to achievement in the manufacturing is to
Research and Development facilities. Many recover labor efficiency, labor suppleness,
businesses are conscious of the fact that their and capital competence. Dharmaraj and
labour cost benefit is beginning to erode as Kathirvel (2018), the Indian Automobile
both shop floor and managerial wage costs Industry noticeable a new trip in the 1991
rise. But, they are positive that output with the monetary radical New Industrial
developments through low cost automation Policy Act 1991, inaugural involuntary
and improved management efficiency will direction which allowable the 100 per cent
compensate to rising direct wage cost. But, Foreign Direct Investment (FDI). Now, an
Mr. Kale (2015), recognize previous retro effort is complete to find out the
the Indian automobile professional has bare consequence of FDI on the monetary
increasing the high-tech complication and presentation of Indian Vehicle Industry. For
significant expansion. The Indian automobile this determination, sixteen businesses were
manufacturing contains of home-grown nominated and analyzed over various
companies with original enterprise and financial ratios. Expressive numerical tools
expansion competence, well recognized like Mean, Standard Deviation and Student‟s
worldwide products and has selling presence paired „t‟ Test were rummage-sale to test the

2
 Int. J. Manag. Bus. Res., 9 (3), 01-07, August 2019

hypothesis. The liquidity examination RO2: To investigate profitability and

presented little vicissitudes and effectiveness acid status of the Maruti Suzuki Company
examines presented an cumulative tendency Limited.
during post FDI when associated to pre FDI. RO3: To inspect the constancy and
The competence examination presented that development degree of nominated economic
the businesses are professionally using the strictures of the specific Maruti Suzuki
obtainable resources throughout pole FDI as Company.
associated to pre FDI. It is resolved that
foreign direct investment in India helpful TOOLS AND TECHNIQUE
impact on the financial variables of the The study has descriptive and systematic
Automobile Companies. In this light in countryside both primary as well as
discussion above, the researcher could secondary data where used. data were
identify that automobile industry have lot of composed as of the several data base,
challenges due to incompetence as will as periodical magazines. Variables relating to
failed to manage financial obligations. In this performance of liquidity, influence and
paper is trying to find out the financial effectiveness were composed from the
position of Marathi Suzi industry in India balance sheet and profit and loss account of
Ltd., the Maruti Suzuki India Limited Company
for the period of 5 years i.e from 2013-14 to
NEED FOR THE STUDY 2017-18.
The attention of the numerous
collections linked to a business and affected DATA ANALYSIS &
by the economic presentation of the business. INTERPRETATIONS
So it is considerable of implication for these A Balance sheet might be defined as a
collections to examine the economic declaration of the fiscal situation of a
presentation of the business they are apprehension at a given data. The fiscal
attentive in. The study focusses on general situation of a concern is discovered by its
economic situation of more specifically assets on a given data and its liabilities on
Maruti Suzuki company throughout the that date. Additional of properties over
specific period based on the selected obligations characterizes Capital, such extra
variables, which may attention not only for may be occupied as an pointer of the fiscal
the individual businesses in the reliability of a concern.
manufacturing but also transports and In the Table 1 shows horizontal vise
procedure of expansional working features of trend analysis of the Marathi Suzuki
the complete manufacturing. The study is Company, in general the financial position of
considerable significant to the organization the company is seeming to be good. The
from the opinion of policymaking company kept their general reserves amount
determination, to recognize the strength, always increasing trend, thus 2014 its kept as
weakness areas of the company and in 100% which it was 200 % in 2018. Hence
conclusion helps to exploit the inherent the net worth of the company showing
worth of the company. Hence, the above increasing trend, because reserves amount is
assumption the following research question in increasing trend. While we see the other
has been seated out for the researcher hand, the unsecured loan and total debt has
RQ1. What is the financial performance in decreeing trend, so the company may settle
Maruti Suzuki right now? up their loans and advances. The
RQ2. Does the effectiveness and acid status accumulated depreciation and capital works
of Maruti Suzuki industry is satisfactory? in progress is showing decreeing trend.
RQ3. How does appearing the growth rate of Hence, the researcher identifies the company
Maruti Suzuki in Financial parameters? have good form of the fixed assets positions.
Objectives The investment, debtors, loans and advances
and current liabilities its shows decreasing
RO1: To identify the Economic Recital trend, however inventory only keeping in the
of Maruti Suzuki. form of ideal.

3
 Int. J. Manag. Bus. Res., 9 (3), 01-07, August 2019

Table 1: Source of Fund: Trend Analysis

Sources of Fund 2014 2015 2016 2017 2018
Total Share Capital 100 100 100 100 100
Equity Share Capital 100 100 100 100 100
Reserves 100 113 143 174 200
Net worth, 100 113 142 174 199
Unsecured loans 100 11 5 29 1
Total Debt 100 11 5 29 7
Total liabilities 100 105 132 163 185
Gross Block 100 116 68 82 94
Less: Accum Depreciation 100 119 23 Missing 66
Net block 100 114 116 123 124
Capital work in process 100 72 38 86 81
Investment 100 127 197 281 349
Inventories 100 153 184 191 185
Sundry Debtors 100 76 94 85 103
Cash and Bank Balances 100 3 7 2 11
Total Current Assets 100 99 120 119 125
Loans and advances 100 89 123 115 120
Total CA, Loans & Advances 100 94 121 117 123
Current Liabilities 100 115 165 198 242
Provisions 100 189 47 54 67
Total CL & Provisions 100 123 152 182 222
Net Current Asset 100 354 402 705 1028
Sources: Primary, Trend Analysis
So its clearly show the company taking which is the achievement of the company.
very much initiative about keeping their Net profit signifies the additional of gross
inventory. The net current assets form is very profit desirable other income over sales
strong position, because it has increased expense with sales costs and other expenses.
more than 1000 times from 2014. At the The debit side of P&L a/c displays the
same time, in the balance sheet , cash at bank expenses and the credit side the incomes. If
is decreasing from 2014-2158 and it is not the total of the credit side is extra, it will be
good for the organization. The percentage net profit. And if the debit side occurs to be
changes in investments and advances is a extra, it would be net loss. In Profit and loss
little bit but is satisfactory. The borrowing account we can see that Total revenue is
from financial institutions is decreasing from increasing from 55,999 to 81,808 . It is due
11% to 1% due to which the interest expense to because maruti suzuki has launched new
is decreasing and income is increasing which variants of their existing cars like the most
is very good for the company. In Balance popular Swift and dzire facelift model which
Sheet amount has amplified progressively made huge profits to the company and
from the year 2013-14 -2017-18 i.e (22,663) company gained more revenue in 2017 i.e.
to (41,868) as we can see that Maruti Suzuki from 70,334 to 81,808 Crores profit. This
the development has been a considerable ratio actions the overall efficacy of
one, year-on-year and in the local market manufacture, management, marketing,
itself the company listed a 14.5 per cent backing, assessing and tax management.
development and the net worth of the Effectiveness ratio of business
company also amplified from preceding five demonstrations substantial growth in 5
years i.e. 20,978 to 41,757 crores as because year.Company‟s sales have amplified in five
of the presentation of NEXA, and many years and At the same time company has
other schemes as the new dealership for been positive in regulatory the expenditures
premium cars was launched like baleno and i.e. manufacturing & other expenses. It is a
ciaz and the book value of maruti Suzuki clear directory of cost control, managerial
also increased in the market fom 694 to 1382 competence & sales elevation.

4
 Int. J. Manag. Bus. Res., 9 (3), 01-07, August 2019

Table 2: Ratio comparations relationship between the returns belonging to

Ratios 201 2017 2016 2015 2014 the equity shareholders and the dividend paid
8 to them. Thus, is calculated as: Payout ratio
Basic 255. 243. 177. 122. 92.1 = dividend per share / Earning per share.
EPS 62 32 58 85 3 Inventory turnover ration always in right
Cash 347. 329. 271. 204. 161. place maintain by the company.
EPS 01 55 01 69 17 Table 3: Performance of the company
Divide 80.0 75.0 35.0 25.0 12.0
nd / 0 0 0 0 0
Share
Net 255. 243. 177. 122. 92.1
profit / 69 38 63 86 5
Share
Net 9.68 10.8 9.32 7.42 6.36
Profit 0
margi
n
Return 13.0 14.3 12.7 11.0 9.11
on 0 4 9 6
Assest
Assets 134. 132. 137. 148. 143.
turnov 34 74 19 93 11
er
ratio
Invent 25.2 20.8 18.3 19.1 25.6 Figure 1: EPS and DPS
ory 3 6 7 1 2 This ratio displays the association
turnov between Earning Per Share and Dividend Per
er Share, this ratio stands at and natural average
ratio keeping this company every year. In figure 1.
We can see the payout ratio is growing from
From the table number 2 shows the
preceding 5 years as the Earning Per Share in
company financial performance for 2014 –
2013-14 was 94.4 but now it continually
2018, Earning per Share (EPS) its increase
exposed growing in earlier 5 years and
nearly 250% over the last five years, its just
presently it is 260.9 and Before Dividend Per
92.13 to 255.62 for 2018, its seems to be
Share in 2013-14 was 12.0 as in 2013-14
company have generate very good EPS over
company give less bonuses to shareholders
the years. Cash Earnings Per Share
as they retain more for the growth of the
(EPS) reflects cash flow created by a
company and now company has made a good
business on per share basis. It is diverse from
development in the market. So, they allocate
earnings per share, which appearances at net
more dividend to their shareholders and it
income or profit of a company on per share
has been augmented uninterruptedly which
basis. Cash EPS is considered by adding all
involved more shareholders to invest in
the non-cash transactions like depreciation,
Maruti Suzuki and attained a good market
amortization, deferred tax and intangibles
share among participants and now currently
like royalty to net income of the company
dividend per share in 2017-18 is 80.0 which
and then divide it by total number of shares.
is the good pointer of the growth of the
Hence, Marathi Suzuki Companies‟ Basic
Maruti Suzuki.
EPS always lesser then Cash EPS, at the
Table: 4 Liquidity form
same time its incur 255.62 from 92.13 on
2014. Even though the company have huge
EPS dividend Per Share have only 80 in
2018, but in 2014 it was in only 12 per share.
Net profit margin is 9.68 but net profit per
shar it represents 255.69. return on assets is
also taking good places. This is the

5
 Int. J. Manag. Bus. Res., 9 (3), 01-07, August 2019

Figure 3: Debt / Equity ratio

In Figure 3 of Debt/Equity Ratio we can
see that The debt equity ratio is significant
Figure 2: Liquidity form instrument in financial analysis to consider
Current ratios show the association the financial structure of the business. It
among current asst and current liabilities and couriers and virtual deference between the
display the capability of the firm to return outside impartialities & inside justices. This
capacity, its current liabilities by applying its ratio is very important from the point of view
current asset. The current ratio for Maruthi of creditors & owners. The rate of debt
Suzuki 2014 was .49 that increases in 2018 equity ratio is reduced from 0.35 to 0.31
to 0.77 That was a company maintain good during the year 2016-2017 to 2017-2018.
sign for working capital in a company. But This shows that with the decrease in debt, the
due to financial collapse in 2014, its ratio shareholders fund amplified because a
was disturb to 0.49 But that was also a good inferior percentage of debt means that a
ratio. The quick ratio expressions the business is using less influence and has a
connection between the quick asset and the stronger equity position and the main reason
current liabilities and displays the business is increasing profitability, better management
aptitude to pay back its current liability of inventory, and restructuring debt.. The
within its short period of time. In figure 2 the lower ratio viewed as favorable from long
researcher identify the liquidness ratio is term creditor‟s point of view.
growing as mutually the current ratio and
quick ratio amount a company's short- CONCLUSION
term liquidity, or its aptitude to produce The investigator investigated the
sufficient cash to pay off all arrears must financial position of Maruti Suzuki India
Limited as of Five years assessment and the
they develop due at once. Even though
they're both actions of a business's economic connected Profit and Loss Account These
economic reports are the accountability of
fitness, they're slightly different. In all 5
years the liquid ratio is Cumulative, which is the company's administration. In fast an
better for the company to meet the resolve. opinion on these economic statements
founded on investigation includes
The liquid ratio of the Maruti Suzuki limited
has Increased from 0.68 to 0.77 in 2016- examining, on a test basis, indication
2017 to 2017-18 which shows that company supporting the amounts and exposes in the
financial statements. An analysis also
follow high liquidity or able to pay short-
term obligations in upcoming futures. Liquid comprises measuring the accounting
ratio of Company is favorable because the principles used and significant
approximations, financial position of the
quick assets of the company are more than
the quick liabilities.The liquid ratio shows Maruti Suzuki Limited. The company
the company‟s ability to meet its immediate analysis done by the researcher on Maruti
Suzuki Limited, organized out that the
obligations promptly.
automobile industry in India is wealthy and
Table 5: Debt / Equity Ratio
rising with revolutionizing knowledge. Cars
in the market through different marketing
strategies such as pricing strategy, products
development etc. Finally “Maruti Suzuki”
has it financial trend in uphill order from
preceding five years.

6
 Int. J. Manag. Bus. Res., 9 (3), 01-07, August 2019

BIBLIOGRAPHY
Atrill, P., & McLaney, E.J. (2002). Financial
accounting for non-specialists. Financial
Times Prentice Hall.
Keown, A.J., Martin, J.D. & William, P.J.
(2008). Foundation of Finance. 6th ed.
Person Prentice Hall: New Delhi.
Knott, G. (2004). Financial Management. 4th
ed. London: Palgrve Macmillan.
Lewellen, J. (2004). Predicting returns with
financial ratios. Journal of Financial
Economics, 74(2), 209-235.
Eljelly, A.M. (2004). Liquidity‐profitability
tradeoff: An empirical investigation in an
emerging market. International journal
of commerce and management, 14(2),
48-61.
McLaney, E.J. (2006). Business finance:
theory and practice. Pearson Education.
Whittington, G. (2007). Profitability,
Accounting Theory and Methodology:
The Selected Essays of Geoffrey
Whittington. Routledge.
Mott, G. (2012). Accounting for non-
accountants: a manual for managers and
students. Kogan Page Publishers.
Panwala, M. (2009). Dimensions of liquidity
management-A case study of the Surat
Textile‟s Traders Cooperative Bank
Ltd. Journal of Accounting
Research, 2(1), 69-78.
Schoenebeck, K.P., & Holtzman, M.P.
(2013). Interpreting and analyzing
financial statements. Pearson Higher.
Walsh, C. (2008). Key management ratios:
The 100+ ratios every manager needs to
know. Pearson Education.

View publication stats