1.9.

OBJECTIVES

 To analyse and compare the income of Mahindra and Mahindra with that of Tata Motors.
 To study the profits and expenses of the companies and use ratio to identify the health of
business for making smart decisions.
 To understand their financial situations better by looking at various ratios.
 Aim to find out how well they are performing in terms of income and identify any trends
or differences between the two companies.
 This project isn't just about numbers; it's about gaining insights into how Mahindra and
Mahindra and Tata Motors make money and figuring out what that means for their overall
financial health.
 To examine various financial ratios, aiming to provide a better understanding of the
financial health and performance of the companies.
 By analyzing these ratios, a clear picture of the strengths and weaknesses of both
companies can be provided when it comes to their income, helping anyone interested in
these companies to make more informed decisions.
 To understand the identification of trends and patterns within both the company's income
structure and enable a side by side evaluation of Mahindra and Mahindra against Tata
Motors through comparative analysis.
1.7. REVIEW OF EXISTING LITERATURE

 Review of Existing Literature (Mahindra and Mahindra Limited)

Mahindra & Mahindra Limited is an Indian multinational automotive manufacturing

corporation headquartered in Mumbai. It was established in 1945 as Mahindra &
Mohammed and later renamed Mahindra & Mahindra. According to Mahindra &
Mahindra's latest financial reports the company's current revenue (TTM) is $15.84 B. In
2022 the company made a revenue of $14.26 B an increase over the years 2021 revenue
that were of $11.42 B. Mahindra & Mahindra Limited (M&M), a member of Mahindra
Group is the largest company of the group in terms of size and turnover.

 Review of Existing Literature (Tata Motors)

Incorporated in India in the year 1945, Tata Motors is a part of the over $100 billion Tata
Group founded by Jamsetji Tata in 1868. Recognised for its world-class quality,
originality, engineering and design excellence, the Company is on the path of shaping the
future of mobility in India. Tata Motors has outperformed its 3-year Compound Annual
Growth Rate (CAGR) in revenue, growing at 24.54% compared to the 3-year CAGR of
9.81%. This suggests strong revenue generation and business expansion. Tata Motors
earned Rs 2,22,860 crore through its Jaguar and Land Rover segment, which accounts for
63.41% share of the company's overall revenue. At present, the company has a capacity
of 480,000 units across multiple plants. In the first nine months (April-December 2022)
of FY23, Tata Motors produced 409,173 passenger vehicles compared to 248,600 a year
ago.
 1.8. CONCEPTUALIZATION

Ratio analysis serves as a potent tool for evaluating a company's performance. A ratio is
the result of dividing two mathematical expressions, representing the relationship
between various elements. This method aids in summarizing extensive data and forming
qualitative assessments of a firm's performance.

 According to R.N. Anthony:

"A ratio is simply one number expressed in terms of another. It is found by dividing one
number into the other". Thus, we can say that the relationship between two figures,
expressed in arithmetical terms is called a 'ratio".

1.9. LIMITATIONS OF THE STUDY

The study is conducted in short period. The time period of study has been limited to less
than 60days. The period is small to study the practical investment decision of the
company Mahindra and Mahindra Limited.

 It does not consider all the new unapproved schemes.

 The study is conducted with the available data, gathered from annual reports of
Mahindra and Mahindra Limited.

 The data is secondary one.

 The confidential data is not available.

1.10. LIMITATIONS OF RATIO STATEMENTS:

Ratios are derived from data found in ratio statements. However, these statements come
with limitations that can impact the effectiveness of ratio analysis. The information used
to calculate ratios is drawn from these statements, which summarize key financial data.
Yet, these statements are not without their challenges. They may not encompass all
relevant factors or provide a complete picture of a company's financial health. As a result,
the ratios derived from such statements might not fully capture the complexities of a
company's performance. These limitations could introduce inaccuracies and affect the
overall reliability of the ratio analysis. It's crucial to be aware of these constraints when
interpreting and making decisions based on ratio data. A more comprehensive
understanding of a company's financial landscape might require additional sources of
 information beyond what ratio statements offer. In conclusion, while ratios are valuable
tools, their utility is contingent upon the accuracy and completeness of the underlying
ratio statements.

1. Historical Information:
Ratio statements offer insights into the past but lack relevance to present conditions,
making them ineffective for predicting the future.

2. Different Accounting Policies:

Different accounting policies regarding valuation of inventories, charging depreciation
etc. make the accounting data and accounting ratios of two firms non- comparable.

3. Lack of Standard of Comparison:

No fixed standards can be laid down for ideal ratios. For example, current ratio is said to
be ideal if current assets are twice the current liabilities. But this conclusion may not be
justifiable in case of those concerns which have adequate arrangements with their bankers
for providing funds when they require, it may be perfectly ideal if current assets are equal
to or slightly more than current liabilities.

4. Quantitative Analysis:
Ratios are tools of quantitative analysis only and qualitative factors are ignored while
computing the ratios. For example, a high current ratio may not necessarily mean sound
liquid position when current assets include a large inventory consisting of mostly obsolete
items.

1.11 NEEDS OF RATIO ANALYSIS:

Ratio statements play a crucial role in discerning trends and relationships among various
items. Both internal management and external stakeholders, such as analysts, creditors,
and investors, must assess a company's profitability, liquidity, and solvency. This
involves utilizing methods like calculations and comparisons with historical company
data, competitors, or industry averages to gauge the company's relative strength and
performance. Being analyzed. This methods used for ratio statement analysis are trend
analysis, common- size statements, and ratio analysis.

1.12. FOCUS OF THE STUDY:

 To know the liquidity position and solvency.

 To study the profitability of Mahindra and Mahindra Limited & Tata Motors

 To find financial performance and efficiency use of capital employed.

1.14. RATIO STATEMENT:

 Meaning of Ratio Statement:

A ratio statement is a document that articulates essential ratio information about an

institution. These statements are meticulously prepared in adherence to accounting
principles, aiming to elucidate the ratio-related aspects of the business. Their primary goal
is to furnish insights into the business's ratio position at the conclusion of an accounting
period and delineate the outcomes of its operations throughout the year.

At any given point, a business can be regarded as a pool of funds originating from diverse
sources such as equity shares, preference shares, debentures, institutional investments,
and retained earnings. These funds are allocated to various purposes, including fixed
assets for production, inventories for facilitating production and sales, accounts receivable
from customers, and cash and marketable securities for transactional and liquidity needs.

 According to John N. Myer:

"The term ratio statements, as used in modern business, refer to the two statements which
the accountant prepares at the end of a period of time for a business enterprise. They are
the balance sheet, or a statement of ratio position and the income statement, or profit and
loss statement."

 Ratio statement includes:

1. Income statement

2. Balance sheet

3. Statement of Retained Earnings

4. Statement of Changes in Ratio Position

5. Analysis of Ratio Statements

 Ratio statements are crafted with specific objectives in mind, encompassing the
understanding of a business's ratio position, operational outcomes, liquidity status,
earning potential, and future plans for income growth. Fulfilling these objectives relies on
the analysis of the statements, as without it, the desired insights cannot be attained.

According to John Myer:

Analyzing ratio statements involves examining the interconnections among different ratio
elements within a business, as revealed in a singular set of statements. It also entails studying
the trends of these elements across a series of statements

 It Includes:
 Process of Ratio Analysis
 Determining objectives of analysis
 Rearrangement of facts.
 Approximation of figures
 Comparison