Introduction & Meaning Of Ratio Analysis

'Ratio' is an arithmetical expression of relationship

between two related or independent items. Ratios
calculated on the basis of accounting data are
called Accounting Ratio. Ratio Analysis is the study
of relationship among various financial factors in a
business. Ratio analysis is an accounting tool,
which can be used to measure the solvency, the
profitability, and the overall financial strength of a
business, by analysing its financial accounts
(specifically the balance sheet and the profit and
loss account).
Accounting ratios are very easy to calculate and
they enable a business to highlight which areas of
its finances are weak and therefore require
immediate attention.

Ratio analysis is a quantitative method of gaining

insight into a company's liquidity, operational
efficiency, and profitability by studying its financial
statements such as the balance sheet and income
statement. Ratio analysis is a cornerstone of
fundamental equity analysis.

It is a technique of analysing financial statements. It

is a process of determining and interpreting
relationships between the related or independent
items of financial statements to have a meaningful
understanding of the Performance and financial
position of an enterprise.
Objectives of Ratio Analysis

1] Measure of Profitability -
Profit is the ultimate aim of every organisation.
Context is required to measure profitability, which is
provided by ratio analysis. Gross Profit Ratios, Net
Profit Ratio, Expense ratio etc provide a measure
of the profitability of a firm. The management can
use such ratios to find out problem areas and
improve upon them.

2] Ensure Suitable Liquidity -

Every firm has to ensure that some of its assets are

liquid, in case it requires cash immediately. So the
liquidity of a firmis measured by ratios such as
Current ratio and Quick Ratio.

These help a firm maintain the required level of

short-term solvency.

3] Overall Financial Strength –

There are some ratios that help determine the

firm's long- term solvency. They help determine if
there is a strain on the assets of a firm or if the firm
is over-leveraged. The management will need to
quickly rectify the situation to avoid liquidation in
the future. Examples of such ratios are Debt-Equity
Ratio, Leverage ratios etc.

Advantages & Uses of Ratio Analysis

1] Useful in Analysis of Financial Statements –

Accounting Ratios are useful for understanding the
financial position of the enterprise. Bankers,
investors, creditors, all analyse Balance Sheet and
Statement of Profit and Loss by means of ratios.

2] Useful in Simplifying Accounting Information -

Accounting Ratio simplifies, summarises, and

systematises a
long array of accounting information to make them
understandable. Its main contribution lies in
communicating precisely the interrelationships
which exist between various elements of financial
statements. In the words of Biramn and Dribin,
"Financial Ratios are useful because they
summarise briefly the results of detailed and
complicated computation."

3] Useful in Assessing the Operating Efficiency of

Business -

The management can determine the operating

efficiency of business with the help of Activity
Ratios such as Inventory Turnover Ratio, Trade
Receivables Turnover Ratio and
Working capital turnover ratio.

4] Useful in Determining Profitability –

\Management and Investors can determine the

profitability with respect to Revenue from
Operations and Capital Employed with the help of
Profitability Ratios such as Gross Profit Ratio, Net
Profit Ratio, Operating Profit Ratio, and Return on
Investment.
5] Useful for Forecasting -

Ratios are helpful in business planning and

forecasting. The trend of ratios is analysed and
used as a guide to future planning. What should be
the future course of action is decided, many a
times, on the basis of trend of ratios, that is ratios
are calculated for a number of years.

5] Useful for Forecasting -

Ratios are helpful in business planning and

forecasting. The trend of ratios is analysed and
used as a guide to future planning. What should be
the future course of action is decided, many a
times, on the basis of trend of ratios, that is, ratios
are calculated for a number of years.

6] Useful in Identifying the Weak Areas

Ratio Analysis assists in identifying weak areas in

the business even though the overall performance
may be satisfactory. Management can pay
attention to the weaknesses and take remedial
action. For example, if the firm finds that the
increase in distribution expenses is morethan the
proportionate to the results achieved, these can be
examined in detail to prevent wastage, if any.

7] Useful in Inter-firm and Inter-firm Comparison

Performance of the enterprise is compared with
that of other enterprises and with industry in
general. The comparison is
called inter-firm comparison. If the performance of
different units of the same firm is to be compared, it
is called intra-firm comparison. In brief, in the basis
of ratio analysis, a firm's performance can be
compared to its own performance in previous
years, performance of competing firms, and
performance of industry.

Limitations of Ratio Analysis

1] Misleading if Based on Incorrect Information

Ratios are calculated from the financial statements,

thus, the reliability of ratios and their analysis is
dependent upon the correctness of the financial
statements. If the Financial Statements are
misleading, the analysis will also show false
picture.

2] Definitions of Terms not standardised

Elements and sub-elements of financial statements

are not defined in a unique manner. An enterprise
may computeratios on the basis of profit after
interest and tax; another enterprise may consider
profit after interest but the ratios that will be
computed will be different and will not be
comparable. Before comparison is made, one must
ensure that the ratios have been worked out on the
same basis.
3] Not Comparable if Different Firms Follow
Different Accounting Policies
When results of two enterprises are being
compared, it should be kept in mind that the
enterprises may follow different accounting policies.
For example, one enterprise may charge
depreciation on the straight line basis and the other
on diminishing value basis. Such differences will
adversely affect the comparison of the financial
statements.

4] Effect of Price Level Changes -

Change in price level affects the comparability of

ratios. But price level changes are not considered
in the accounting variables from which ratios are
computed, This handicaps the utility of accounting
ratios.

5] Ignores Qualitative Factors

Ration Analysis is a technique of quantitative

analysis and not qualitative analysis, which is
important in decision making. For example,
average collection period may be equal to standard
credit period, but debtors may be in the list of
doubtful debtors, which is not discussed by ratio
analysis.

6] Limitation of a Single Ratio

A single ratio cannot be explained and no decision

can be taken on its basis. For example, X Ltd has
Current Ratio of 2:1.5 can only tell that when
current assets are 2, current liabilities are 1.5.
Hence, a single ratio is of less use.

7] Difficult to Evolve a Standard Ratio -

The financial and economic scenario is dynamic,
therefore, it is not easy to evolve a standard ratio
acceptable for all times. Again the underlying
conditions of different firms and different industries
are not similar. Therefore, an acceptable standard
ratio cannot be evolved.

Stick pic of ratios

Meaning, Formula, Objectives & Significance Of

The 17 Ratios

1) Current Ratio

Meaning -- It is a relationship of current assets to

current liabilities and is computed to assess the
short-term financial position of the enterprise.

Formula -- Current Assets

Current liabilities

Objectives & Significance -- The objective of

calculating Current Ratio is to assess the ability of
the enterprise to
meet its short-term liabilities as they become due
for payment. It is a ratio used to assess the short-
term solvency of the enterprise.

2) Quick Ratio
Meaning -- It is a relationship of Quick Assets with
Current
Liabilities. It is computed to assess short-term
liquidity of the enterprise.

Quick ratio = Quick Assets

Current Liabilities

Objectives & Significance -- The objective of

computing Quick Ratio is to assess the ability of
firm to meet its short- term obligations as and when
due for payment without
relying on the realisation of inventories. Higher the
Quick Ratio, better the short-term financial position.

3) Debt to Equity Ratio

Meaning -- It expresses relationship between

borrowings (debt) and equity.

Debt to Equity Ratio -- Debt / Long Term Debt

Equity / Shareholder's
Funds

Objectives & Significance -- It aims to measure

the relative proportions of outsiders' funds and
shareholders' funds invested in the company.

4) Proprietary Ratio
Meaning -- It establishes the relationship between
proprietors' funds and total assets.
Proprietary Ratio -- Shareholders' Funds /
Equity
Total assets
Objectives & Significance -- It aims to measure
the relative proportions of outsiders' funds and
shareholders' funds invested in the company.

5) Debt to Total Assets Ratio

Meaning -- It establishes relationship between debt

and total assets of the enterprise.

Debt to Total Assets Ratio - Debt

Total Asset

Objectives & Significance - It computes the ratio

to establish the relationship between debt and total
assets of the enterprise. It also measures the
safety margin available to the lenders of long-term
debt.

6) Interest Coverage Ratio

Meaning -- It establishes the relationship between

net profit before interest and tax and interest on
long-term debts.

Interest Coverage Ratio -- Net Profit before

Interest and Tax
Interest on Long
Term Borrowings

Objectives & Significance -- It aims to ascertain

the amount of profit available to cover the interest.
It indicates that an enterprise can increase
borrowing. This ratio is meaningful to debenture
holders and lenders of long-term credit.
7) Trade Receivables Turnover Ratio

Meaning -- It is the ratio that establishes

relationship between Credit Revenue from
Operations and Average Trade Receivables of the
year.

Formula -- Credit Revenue from Operations

Average Trade Receivables

Objectives & Significance -- This ratio shows the

number of times amount invested in trade
receivables is turned over in a year in relation to
Revenue from Operations. Higher it is, the better.

8) Trade Payables Turnover Ratio

Meaning -- It shows the relationship between net

credit purchases and average trade payables.

Formula -- Net Credit Purchases

Average Trade Payables

Objectives & Significance -- It determines the

efficiency with which Trade Payables are managed
and paid. A high ratio indicates shoter payment
period .

9) Working Capital Turnover Ratio

Meaning -- It establishes the relationship between

Working Capital and Revenue from Operations.
Formula -- Revenue from Operations
Working Capital

Objectives & Significance -- It is computed to

ascertain whether or not working capital has been
utilised efficiently in making sales. Higher the ratio,
more efficient the management.

10) Inventory Turnover Ratio

Meaning -- It establishes the relationship between

Cost of Revenue or Cost of Goods Sold during a
period and average inventory carried during that
period.

Formula -- Cost of Revenue from Operations

(COGS)
Times Average Inventory

Objectives & Significance -- It determines the

efficiency with which inventory is being used
(inventory management). Higher the ratio, more the
sales generated by a unit of rupee in inventory.

11) Gross Profit Ratio –

Meaning -- It establishes the relationship of Gross

Profit with Revenue from Operation of an
enterprise.
Formula -- Gross Profit. ×
100
Revenue from Operations
Objectives & Significance -- It helps in fixing
selling prices and assessing efficiency of trading
activities. It helps investigate for a change. It
determines how much selling price per unit may
decline without resulting in operational losses.

12) Net Profit Ratio

Meaning -- It establishes the relationship between

Net Profit and Revenue from Operations.

Formula -- Net Profit × 100

Revenue from Operations

Objectives & Significance -- It indicates overall

efficiency of the business. Higher the Net Profit
Ratio, better it is for the business. Increase in Ratio
over the previous period shows improvement in
operational efficiency.

13) Operating Ratio

Meaning -- It establishes relationship between

Operating Cost and Revenue from Operations.

Formula -- Operating Cost × 100

Revenue from Operations

Objectives & Significance -- It is the test of

operational efficiency of the business. Lower the
Operating Ratio, the
better, because it would leave higher margin profit
to meet interests and dividends.

14) Operating Profit Ratio

Meaning -- It measures the relationship between

Operating Profit and Revenue from Operation .

Formula -- Net Operating Profit. × 100

Revenue from Operations

Objectives & Significance -- It helps determine

the operational efficiency of the management. It
also helps assess profitability of the enterprise.

15) Earning per Share (EPS) –

Meaning-- It is the earnings of a company

attributable to the Equity Shareholders divided by
the number of Equity Shares.

Formula -- Net Profit after Tax and

Preference
Dividend Number of Equity
Shares

Objectives & Significance -- This ratio helps in

evaluating the prevailing market price of share in
the light of profit earning capacity. More the EPS,
better the performance and prospects of the
company.
16) Price Earning (P/E) Ratio

Meaning -- This ratio measures the relationship

between the market price share and earning per
share.

Formula - Market Value of an Equity Share

Earnings per Share

Objectives & Significance -- The objective of

computing this ratio is to find out the expectations
of the shareholders. It helps decide whether shares
should be purchased or not in a company.

17) Return on Investment

Meaning -- It shows the relationship of profit with

Capital Employed.

Formula -- Net Profit before Interest & Tax ×

100
Capital Employed

Objectives & Significance -- It assesses overall

performance of the enterprise. It measures how
efficiently the resources of the business are used.
Gass authority of India limited (GAIL)

Introduction of (GAIL)

Gail (India) Limited (GAIL) (formerly known as Gas

Authority of India Ltd.) is Government of India
undertaking company. Gail is the largest state-
owned natural gas processing and distribution
company in India. It is headquartered in New Delhi.
It is a state- owned enterprise of the Government of
India, under the administrative control of the
Ministry of Petroleum and Natural Gas.

It was one of the largest cross-country natural gas

pipeline projects in the world. This 1750-kilometre-
long pipeline was built at a cost of ₹17 billion
(US$240 million) and it laid the foundation for
development of market for natural gas in India.
GAIL commissioned the 1,750 kilometres (1,090
mi) Hazira-Vijaipur- Jagdishpur (HVJ) pipeline in
1991. GAIL began its city gas distribution in New
Delhi in 1997 by setting up nine compressednatural
gas (CNG) stations. In order to secure gas for its
mainstream business, the Exploration and
Production department was created.

As a strategy of going global and further expanding

global footprint, GAIL has formed a wholly owned
subsidiary company, GAIL Global (Singapore) Pte
Ltd. in Singapore for pursuing overseas business
opportunities including LNG & petrochemical
trading. GAIL has also established a wholly owned
subsidiary, GAIL Global (USA) Inc. in Texas, USA.
The
US subsidiary has acquired 20% working interest in
an unincorporated joint venture with Carrizo Oil &
Gas Inc in the Eagle Ford shale acreage in the
state of Texas. In addition to having two wholly
owned subsidiaries in Singapore and the US, GAIL
has a representative office in Cairo, Egypt to
pursue business opportunities in Africa and the
Middle East.
GAIL is also an equity partner in two retail gas
companies in Egypt, namely Fayum Gas Company
(FGC) and National Gas Company (Natgas).
Besides, GAIL is an equity partner in a retail gas
company involved in city gas and CNG business in
China – China Gas Holdings Limited (China Gas).
Further, GAIL and China Gas have formed an
equally owned joint venture company – GAIL China
Gas Global Energy Holdings Limited for pursuing
gas sector opportunities primarily in China.

In terms of the guidelines issued by the Department

of Public Enterprises, GAIL has allocated an annual
budget of 2% of the previous year's profit after tax
for CSR activities, which is effectively used for
carefully chosen programmes. Socially useful
programmes have been undertaken in GAIL since
its inception in and around the areas adjoining its
major work centres under the SCP/TSP Plan.But
over the years, the scope of the CSR activities, the
nature of programmes undertaken and the systems
adopted for the implementation of these
programmes have been streamlined and
strengthened and the work under SCP/TSP came
under the wider scope of CSR. Today, CSR &
sustainability development is accorded high priority
in the organisational ethos and attempted to be
interwoven in all the business
activities and the projects that are being
undertaken by the company. It is currently a
sponsor of Durand Cup.

Products & Services Provided by

GAIL
1] LPG Transmission

GAIL is the first company in India to own and

operate pipelines for LPG transmission. It has
1,900 km LPG pipeline network 1,300 km of which
connects the western and northern parts of India
and 600 km of networks is in the southern part of
the country connecting Eastern Coast. The LPG
transmission system has a capacity to transport 3.8
MMTPA of LPG. LPG transmission through
pipelines was 3337 TMT in the year 2010-11.

2] Petrochemicals

GAIL's the country's premier Natural Gas Marketer

& Transporter, diversified into the manufacturing
and marketing of downstream HDPE & LLDPE
from natural gas cracking at its Pata (Uttar Pradesh
state, India) unit from 19th April 1999. GAIL has
also formed a Joint venture company by the name
of M/s Bhramaputra Cracker and Petrochemicals
Ltd. (BCPL) to accelerate the Gol's only authorised
petrochemical project in the North East of India (at
Lepetkata, Assam, India). The BCPL is a JV
between the Government of Assam, GAIL(I) Ltd.,
OIL (India) Ltd. & NRL. In a successful span of
about a decade of establishing and
marketing its grades under the brand names G-Lex
& G-Lene, GAIL has alongside augmented its
name plate capacity of HDPE & LLDPE to 4,10,000
MTPA by adding another dedicated HDPE
downstream polymerization unit of 1,00,000 ΜΤΡΑ.

3] City Gas Distribution

GAIL is the pioneer of city gas distribution in India.

GAIL took many Initiatives to introduced PNG for
households and CNG for the transport sector to
address the rising pollution levels. Pilot projects
were launched in early 1990s in two metros Delhi
and Mumbai through joint venture companies
Indraprastha Gas Limited (IGL) and Mahanagar
Gas Limited (MGL) leading to the start of
commercial operation of city gas projects. The
results of these ventures are quite visible through
the improvement in air quality in these cities.
ZX

12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER S FUNDS

Equity Share Capital 4,510.14 2,255.07

TOTAL SHARE CAPITAL 4,510.14 2,255.07

Reserves and Surplus 39,460.96 41,837.87

TOTAL RESERVES AND SURPLUS 39,460.96 41,837.87

TOTAL SHAREHOLDERS FUNDS 43,971.10 44,092.94

NON-CURRENT LIABILITIES

Long Term Borrowings 3,612.12 870.58

Deferred Tax Liabilities [Net] 4,497.19 5,947.71

Other Long Term Liabilities 4,485.98 3,438.38

Long Term Provisions 529.67 694.55

TOTAL NON-CURRENT LIABILITIES 13,124.96 10,951.22

CURRENT LIABILITIES

Short Term Borrowings 1,799.70 0.00

Trade Payables 4,128.43 3,961.18

Other Current Liabilities 4,754.40 4,642.48

Short Term Provisions 755.04 730.79

TOTAL CURRENT LIABILITIES 11,437.57 9,334.45

TOTAL CAPITAL AND LIABILITIES 68,533.63 64,378.61

ASSETS

NON-CURRENT ASSETS

Tangible Assets 31,772.04 29,682.92

Intangible Assets 1,872.94 1,403.17

Capital Work-In-Progress 10,581.89 9,202.46

Other Assets 0.00 0.00

FIXED ASSETS 44,226.87 40,288.55

Non-Current Investments 7,498.47 9,528.17

Deferred Tax Assets [Net] 0.00 0.00

Long Term Loans And Advances 3,101.88 667.76

Other Non-Current Assets 2,592.47 3,586.52

TOTAL NON-CURRENT ASSETS 57,419.69 54,071.00

CURRENT ASSETS

Current Investments 0.00 0.00

Inventories 2,960.08 2,321.91

Trade Receivables 4,546.84 4,060.19

Cash And Cash Equivalents 803.91 1,214.69

Short Term Loans And Advances 1,074.88 828.39

OtherCurrentAssets 1,728.23 1,882.43

TOTAL CURRENT ASSETS 11,113.94 10,307.61

TOTAL ASSETS 68,533.63 64,378.61

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 2,06,242.59 35,372.15

CIF VALUE OF IMPORTS

Raw Materials 0.00 0.00

Stores, Spares And Loose Tools 0.00 0.00

Trade/Other Goods 0.00 0.00

Capital Goods 0.00 0.00

EXPENDITURE IN FOREIGN EXCHANGE

Expenditure In Foreign Currency 26,485.00 29,868.59

REMITTANCES IN FOREIGN CURRENCIES FOR DIVIDENDS

Dividend Remittance In Foreign Currency

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods

Other Earnings 13,078.00 14,805.41

BONUS DETAILS

Bonus Equity Share Capital 3,664.49 1,409.42

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value 18,479.00 21,380.00

Non-Current Investments Unquoted Book Value 5,946.01 5,256.90

CURRENT INVESTMENTS

Current Investments Quoted Market Value

Current Investments Unquoted Book Value

 12 mths 12 mths

INCOME

REVENUE FROM OPERATIONS [GROSS] 71,729.57 74,807.98

Less: Excise/Sevice Tax/Other Levies 5.39 0.46

REVENUE FROM OPERATIONS [NET] 71,724.18 74,807.52

TOTAL OPERATING REVENUES 71,870.96 75,126.30

Other Income 1,416.84 1,544.81

TOTAL REVENUE 73,287.80 76,671.11

EXPENSES

Cost Of Materials Consumed 4,411.97 4,584.26

Operating And Direct Expenses 0.00 0.00

Changes In Inventories Of FG,WIP And Stock-In Trade -598.62 -382.45

Employee Benefit Expenses 1,519.25 1,778.37

Finance Costs 108.50 138.54

Depreciation And Amortisation Expenses 1,835.99 1,550.22

Other Expenses 4,621.79 4,928.68

TOTAL EXPENSES 65,446.07 67,259.96

PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORDINARY ITEMS AND TAX 7,841.73 9,411.15

Exceptional Items 101.63 -326.33

PROFIT/LOSS BEFORE TAX 7,943.36 9,084.82

TAX EXPENSES-CONTINUED OPERATIONS

Current Tax 2,077.23 2,464.26

Less: MAT Credit Entitlement 0.00 0.00

Deferred Tax -1,654.81 620.51

Tax For Earlier Years 900.31 -25.62

TOTAL TAX EXPENSES 1,322.73 3,059.15

PROFIT/LOSS AFTER TAX AND BEFORE EXTRAORDINARY ITEMS 6,620.63 6,025.67

PROFIT/LOSS FROM CONTINUING OPERATIONS 6,620.63 6,025.67

PROFIT/LOSS FOR THE PERIOD 6,620.63 6,025.67

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 14.68 26.72

Diluted EPS (Rs.) 14.68 26.72

VALUE OF IMPORTED AND INDIGENIOUS RAW MATERIALS STORES,

SPARES AND LOOSE TOOLS

Imported Raw Materials 1,788.72 1,221.00

Indigenous Raw Materials 2,623.25 3,363.26

Computation of 17 Ratios
1) Current Ratio = Current Asset
Current Liabilities

=11113.94/11216.55=0.97
2) Quick Rati = Quick Assets Current
Liabilities

=7963.75/11216.55= 0.71
3) Debt To Equity Ratio = Debt / Long Term Debt
Equity / Shareholder's Funds
=13,124.96I43,971.10=0.30
4) Proprietary Ratio = Shareholders' Funds I Equity
Total assets
=43,971.10I68,533.63 = 0.64
6) Interest Coverage Ratio = Net Profit Before Interest And Tax.
Downloaded by ruchika jaiswal (jruchika055@gmail.com)
lOMoARcPSD|44023198

Long term borrowing

=10428.94I3612.12=2.89
7) Trade Receivable Turnover Ratio
= Credit Revenue From Operation
Average Trade Receivable
=75126.76I4060.19 = 18.50
8) Trade Payable Turnover Ratio
= Net Credit Purchases
Average Trade Payables
=65953.65I4060.19 = 16.24
9) Working Capital Turnover Ratio
= Revenue From Operations
Working Capital
 =9223.36I2136 = 4.32 Times
10) Inventory Turnover Ratio
= Cost Of Revenue From Operations
Average Inventory
=46833.20I2321.91 = 20.17
11) Gross Proût Ratio

= Gross Profit x100

lOMoARcPSD|44023198

Revenue From Operations

=922336I13644 = 67.6 %
12) Net Proût Ratio

= Net Profit x100

Revenue From Operations
=602567I13644 = 44.16 %
13) Operating Ratio

= Operating Cost x100

Revenue From Operations
=50238.09I7673.46 = 6.55 %
14) Operating Proût Ratio

= Operating Profit x100

Revenue From Operations
=9555.10I9223.36 = 1.04 %
15) Earning Per Share
= Net Profit After Tax And Preference Dividend
Number Of Equity Shares
=602567I22550.71 = 26.72 Rupees
16) Price Earning Ratio
= Market Value Of Equity Share
 Earning Per Share
=93.65I26.72 = 3.50 Times
15)Return On Investment
= Net Profit Before Interest And Tax x100
Number Of Equity Shares
=898674I6500 = 138.26 %
For your project on ratio analysis of TVS Motor Company Limited, you'll need to access the
company's balance sheets for the financial years ending on March 31, 2022, and March 31, 2023.
This data is typically found in the company's annual reports or financial statements. Here’s a step-by-
step guide on how to proceed with your project:

Step 1: Obtain the Balance Sheets

1. Annual Reports: Visit the official website of TVS Motor Company Limited and look for
their annual reports section.
2. Financial Statements: Alternatively, you can find the required balance sheets in the financial
statements section.
3. Stock Exchange Filings: You can also check the filings on stock exchanges like the NSE
(National Stock Exchange) or BSE (Bombay Stock Exchange) websites.

Step 2: Extract Key Financial Data

From the balance sheets, extract the following key data for both years:

 Current Assets
 Non-Current Assets
 Current Liabilities
 Non-Current Liabilities
 Equity (Shareholders' Funds)

Step 3: Calculate Ratios

Based on the extracted data, you can calculate various financial ratios. Here are some important
ratios to consider:

1. Liquidity Ratios
o Current Ratio = Current Assets / Current Liabilities
o Quick Ratio = (Current Assets - Inventory) / Current Liabilities
2. Profitability Ratios
o Net Profit Margin = Net Profit / Revenue
o Return on Assets (ROA) = Net Profit / Total Assets
o Return on Equity (ROE) = Net Profit / Equity
3. Leverage Ratios
o Debt to Equity Ratio = Total Liabilities / Equity
o Interest Coverage Ratio = EBIT / Interest Expense
4. Efficiency Ratios
o Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
o Receivables Turnover Ratio = Revenue / Average Accounts Receivable

Step 4: Analyze the Results

Compare the ratios for the two financial years to identify trends and make interpretations about the
company’s financial health and performance.

Step 5: Compile Your Report

  Introduction: Briefly introduce TVS Motor Company Limited and the purpose of the ratio
analysis.
 Data Presentation: Present the balance sheet data for both years.
 Ratio Calculation: Show the calculations of the ratios.
 Analysis and Interpretation: Provide an analysis of the ratios, highlighting any significant
changes or trends.
 Conclusion: Summarize your findings and provide insights into the company’s financial
condition.

Additional Resources

 TVS Motor Company’s Official Website

 NSE India
 BSE India

Learning Outcome & Conclusion

1)Discipline - I have learned to sit at the same place for
hours with the help of this project. It has helped me to
concentrate better and taught me to remain focused.
2)Knowledge - This project has also provided a
sufficient amount of knowledge to me. It has helped me
discover and learn about things I had never know if it had
not been for this.
3)Independency - I learned that I could do this project
beautifully even though I was alone in this journey.

I would like to conclude this project by stating that consumer

exploitation is not in a particular state or a country, the
whole world is facing this. The consumer must know hisIher
rights as well as duties so as to prevent illegal trade practices
and continue with the day to day life without fear of being
cheatedIharassed.
Information regarding this topic should be shared worldwide
and awareness should be spread with the help of campaigns.
Consumer is the king and that is how heIshe should be
treated because heIshe is the one who helps sellers keep
their business alive and meet his needs.
 lOMoARcPSD|44023198

Bibliography
• investopedia.com
• s-cool.co.uk
• toppr.com
• en.wikipedia.org
• indiamart.com
• moneycontrol.com
• T.S Grewal's Management Accounting XII ISC

1387.42

6047.85

1387.42

13992.39

4933.28 x 100

20790.51

893.56 x 100

20790.51