Accounts Project Tata Motors

ACCOUNTS PROJECT – 1 TATA MOTORS
BALANCE SHEET AND INCOME

STATEMENT
INTRODUCTION:
We know business is mainly concerned with the financial
activities. In order to ascertain the financial status of the
business every enterprise prepares certain statements,
known as financial statements. Financial statements are
mainly prepared for decision making purpose. But the
information as is provided in the financial statements is not
adequately helpful in drawing a meaningful conclusion. Thus,
an effective analysis and interpretation of financial
statements is required. Analysis means establishing a
meaningful relationship between various items of the two
financial statements with each other in such a way that a
conclusion is drawn.
MEANING OF FINANCIAL STATEMENTS:
(i) Profit and loss Account or Income Statement (ii) Balance
Sheet or Position Statement These are prepared at the end of
a given period. They are the indicators of profitability and
financial soundness of the business concern. The term
financial analysis is also known as analysis and interpretation
of financial statements. It refers to the establishing
meaningful relationship between various items of the two
financial statements i.e., Income statement and position
statement. It determines financial strength and weaknesses
of the firm. Analysis of financial statements is an attempt to
assess the efficiency and performance of an enterprise. Thus,
the analysis and interpretation of financial statements is very
essential to measure the efficiency, profitability, financial
soundness, and prospects of the business units.
TYPES OF FINANCIAL STATEMENTS:
External analysis:
The external analysis is done on the basis of published
financial statements by those who do not have access to the
accounting information, such as, stock holders, banks,
creditors, and the general public.
Horizontal Analysis:
The comparative financial statements are an example of
horizontal analysis, as it involves analysis of financial
statements for a number of years. Horizontal analysis is also
regarded as Dynamic Analysis
Vertical Analysis:
it is performed when financial ratios are to be calculated for
one year only. It is also called as static analysis
An assortment of techniques is employed in analysing

financial statements. They are:
Comparative Financial Statements, statement of changes
inworking capital, common size balance sheets and income
statements, trend analysis and ratio analysis.
Comparative Financial Statements:
It is an important method of analysis which is used to make
comparison between two financial statements. Being a
technique of horizontal analysis and applicable to both
financial statements, income statement and balance sheet, it
provides meaningful information when compared to the
similar data of prior periods.
The comparative statement of income statements enables to

review the operational performance and to draw conclusions,
whereas the balance sheets, presenting a change in the
financial position during the period, show the effects of
operations on the assets and liabilities. Thus, the absolute
change from one period to another may be determined.
Statement of Changes in Working Capital:

The objective of this analysis is to extract the information
relating to working capital. The amount of networking capital
is determined by deducting the total of current liabilities from
the total of current assets. The statement of changes in
working capital provides the information in relation to
working capital between two financial periods.
Common Size Statements:

The figures of financial statements are converted to
percentages. It is performed by taking the total balance
sheets as 100. The balance sheet items are expressed as the
ratio of each asset to total assets and the ratio of each
liability to total liabilities. Thus, it shows the relation of each
component to the whole - Hence, the name common size.
Ratio Analysis:
The most popular way to analyse the financial statements is
computing ratios. It is an important and widely used tool of
analysis of financial statements. While developing a
meaningful relationship between the individual items or
group of items of balance sheets and income statements, it
highlights the key performance indicators, such as, liquidity,
solvency, and profitability of a business entity. The tool of
ratio analysis performs in a way that it makes the process of
comprehension of financial statements simpler, at the same
time, it reveals a lot about the changes in the financial
condition of a business entity.
COMPARITIVE BALANCE SHEET:

A comparative balance sheet is a side-by-side comparison of
the entire balance sheet report of a current accounting
period and a previous accounting period. A date-to-date
comparison within the company helps a business owner or
investor identify financial performance trends over time.
Comparative Income Statement:

Like the Comparative Balance Sheet, the Comparative Income
Statement contains the same columns and supplies the same
type of information. The Comparative Income Statement
explains the relationship between sales and cost of goods
sold and its effect on gross profit. Increase in selling expenses
and office and administration expenses relating to the
increase in sale should not be proportional. This will indicate
clearly the efficiency of operations by showing changes in
absolute figures and in terms of percentage of the operating
profits from one period to another. The Companies Act of
India insists that companies should give figures for different
items for the previous year together with the current year’s
figures in the Profit and Loss account and Balance Sheet.
COMMON SIZE BALANCE SHEET:
A common size balance sheet is a balance sheet that displays
both the numeric value and relative percentage for total
assets, total liabilities, and equity accounts.
COMMON SIZE INCOME STATEMENT:
A common-size income statement is an income statement
where each line item is expressed as a percentage of a base
figure. This is usually total revenues or total sales.
TATA MOTORS:
Tata Motors Limited is an Indian multinational automotive
manufacturing company, headquartered in Mumbai, India,
which is part of the Tata Group. The company produces
passenger cars, trucks, vans, coaches, buses.
Formerly known as Tata Engineering and Locomotive
Company (TELCO), the company was founded in 1945 as a
manufacturer of locomotives. The company manufactured its
first commercial vehicle in 1954 in a collaboration with
Daimler-Benz AG, which ended in 1969. Tata Motors entered
the passenger vehicle market in 1988 with the launch of the
Tata Mobile followed by the Tata Sierra in 1991, becoming the
first Indian manufacturer to achieve the capability of
developing a competitive indigenous automobile. In 1998,
Tata launched the first fully indigenous Indian passenger car,
the Indica, and in 2008 launched the Tata Nano. Tata Motors
acquired the South Korean truck manufacturer Daewoo
Commercial Vehicles Company in 2004. Tata Motors has been
the parent company of Jaguar Land Rover since the company
established it for the acquisition of Jaguar Cars and Land
Rover from Ford in 2008.
Tata Motors' principal subsidiaries include British premium
car maker Jaguar Land Rover (the maker of Jaguar and Land
Rover cars) and the South Korean commercial vehicle
manufacturer Tata Daewoo. Tata Motors has a construction-
equipment manufacturing joint venture with Hitachi (Tata
Hitachi Construction Machinery), and a joint venture with
Stellantis which manufactures automotive components and
Fiat Chrysler and Tata branded vehicles. On 12 October 2021,
private equity firm TPG invested $1 billion in Tata Motors'
electric vehicle subsidiary.
Tata Motors has auto manufacturing and vehicle plants in
Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad, and
Pune in India, as well as in Argentina, South Africa, the United
Kingdom, and Thailand. It has research and development
centres in Pune, Jamshedpur, Lucknow, Dharwad, India and
South Korea, the United Kingdom, and Spain. Tata Motors is
listed on the BSE (Bombay Stock Exchange), where it is a
constituent of the BSE SENSEX index, the National Stock
Exchange of India, and the New York Stock Exchange. The
company is ranked 265th on the Fortune Global 500 list of
the world's biggest corporations as of 2019.
COMPARATIVE BALANCE SHEET OF TATA MOTORS:

COMPARATIVE INCOME STATEMENT OF TATA MOTORS:

Accounts Project Tata Motors

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ACCOUNTS PROJECT – 1 TATA MOTORS

BALANCE SHEET AND INCOME

An assortment of techniques is employed in analysing

The comparative statement of income statements enables to

Statement of Changes in Working Capital:

Common Size Statements:

COMPARITIVE BALANCE SHEET:

Comparative Income Statement:

COMPARATIVE BALANCE SHEET OF TATA MOTORS:

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