RATIO ANALYSIS

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Per share ratios

Adjusted EPS (Rs) Dividend per share Free reserves per share (Rs) 83.15 6.00 403.82 42.81 3.50 318.45 55.94 5.00 286.28 53.69 4.50 231.89 183.18 43.87 3.50

Profitability ratios
Operating margin (%) Gross profit margin (%) Net profit margin (%) Return on long term funds (%) 12.74 9.93 8.34 28.80 9.18 5.77 5.72 17.48 14.12 10.97 9.34 27.35 14.88 13.05 12.95 10.29 9.53 30.74 33.47 15.29

Liquidity ratios
Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio 1.02 0.91 0.67 30.47 1.53 1.51 1.26 30.46 1.03 0.91 0.66 22.93 1.42 1.40 1.77 1.13 1.31 28.76 18.78 1.77

Component ratios
Material cost component (% earnings) Selling cost Component Long term assets / total Assets 77.21 3.12 0.76 77.10 3.56 0.59 77.25 3.10 0.74 73.36 3.37 0.61 0.49 77.25 2.91

ADJUSTED EPS: Diluted Earnings per Share (diluted EPS) is a company's earnings per share (EPS) calculated using fully diluted shares outstanding (i.e. including the impact of stock option grants and convertible bonds). Diluted EPS indicates a "worst case" scenario, one in which everyone who could have received stock without purchasing it directly for the full market value did so. To find diluted EPS, basic EPS is calculated for each of the categories on the income statement first. Then each of the dilutive securities are ranked based on their effects, from most dilutive to least dilutive and ant dilutive. THIS IS THE MOST RELIBLE RATIO FOR CALCULATING THE EARNING PER SHARE. ANALYSIS: while going through the diluted eps of Maruti we noticed that in the span of 4 years the diluted eps has increased by 116.7% which shows that in the worst case scenario in which the number of shares of the company increase, company will be giving them a better return when compared to past year returns. FREE RESRVES PER SHARE: AS THE name suggests this ratio deals with the free reserves of the company and higher the fee reserves of the concern higher will be the credibility of the company in the times of financial turmoil. This ratio specifically tells that how much reserves are available for each and every shareholder in case the company winds up in the near future. This ratio increase the credibility of the company amongst the shareholders as it gives them surety of their money invested n the company is safe and sound.

analysis:-during the course of time this ratio of Maruti

Suzuki ha improved to a great extent it has increased by 26.81% in the matter of two years the increase in the free reserves per share and the decrease of growth rate in the dividend per share shows that the company is trying to strengthen its reserves and is giving out its profits as dividends conservatively. In the changing scenario of automobile industry it's a positive sign by the company that it is sloughing back the profits and is prepared for facing the decrease in the profits.

Operating profit ratio: The operating profit margin ratio

indicates how much profit a company makes after paying for variable costs of production such as wages, raw materials, etc. It is expressed as a percentage of sales and shows the efficiency of a company controlling the costs and expenses associated with business operations. Phrased more simply, it is the return achieved from standard operations and does not include unique or one time transactions. Terms used to describe operating profit margin ratios this include operating margin, operating income margin, operating profit margin or return on sales (ROS). Analysis: according to the data provided by the company there is a small decline in the operating rate in the year 2009 and there too was a decline in 2010 as compared to data of 2006 and 2007. This decline is because of the increase of costs of materials(raw)i.e. steel price increased up to 12-15% and rubber prices had gone up to 100% so this increase in price has resulted in the decrease of the operating profit ratio and net profit ratio.

Component ratios:-

These ratios help the investors and the management to analyze the breakup of the cost of production. These ratios are of various types and vary from company to company, the ones used by the manufacturing concerns like Maruti, are 1. Material cost component 2. Selling cost component 3. Import component in raw material consumed 4. Long-term assets/total assets These rates will give a fair picture of the cost management of the company and analyze the effect of increase and decrease of the cost of raw materials, selling cost and cost of maintaining long term assets. Analysis: - the material cost component ratio shows a good sign as it stable and it shows that it hasnt changed in substantial terms in the course of years. there is a substantial increase from 2006 (73.3) to 2007 (77.25) which is because of the inflationary tendencies but leaving out that unevenness in the ratio the data of 2008,2009 and 2010 is sable and shows the efficient raw material procurement systems. Selling cost component: The selling cost is the sum total of the costs which the companies spend on selling and marketing there products. There is not much fluctuation in this ratio as it is controlled carefully by Maruti as the maximum increase in the selling cost is 1.48%.

Long term assets/total assets:-

Explanatory variables:From the above data we can observe that there has been a decrease in the sales of Maruti 800.This change is because of the following factors: PRICE OF THE PRODUCT: The price of Maruti 800 has increased by the 4.8%.this change in the price is minor but the segment of population to which Maruti is catering that population whose pocket is affected by this change. Petrol price: Petrol being a complementary product directly affects the demand of the product. Complementary goods are covered under generalized demand function...................................................

Income of the consumer:-10% also the whole

Segment-A-2 Change in sales: the factors working behind the change in the sales are as follows:1. Product Price: the price of the product is inversely related to the demand of the product i.e. with the increase in the price of the product; demand of the goods will decrease. Herein, Maruti increase in the product price is marginal so a minor change in price is not affecting the sales. I.e. consumer did not respond ----------- to the change in the price. 2. Petrol prices------ increase in petrol price is not having much effect on the sales. in the year there has been a huge increase in the sales this is because of the application of law of demand is not applicable here and other factors are not constant like price of the product, income of the consumer, price of the related goods. So we conclude here that there has been a change in taste.