Presentation On

Ratio Analysis on Maruti Suzuki

Maruti Suzuki is India and Nepal's leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003. As of 10 May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.

CLASIFICATION OF RATIOS

The ratios may be classified under various ways, which may use various criterions
to do the same. However for the convenience purpose, the ratios are classified under following groups. EPS RNW NAV DEBT EQUITY RATIO CURRENT RATIO QUICK RATIO

RATIO ANALYSIS

Earning Par Share =

Year 2012 Calculation 1633.60 2889.10 2011 2307.10 2889.10 *100

Profit after tax

Answer 56.54%

No of equity share

* 100
79.86%

2010
2009 2008

2545
2889.10 1232.70 2889.10 1784.90 *100 *100

88.09%
42.63% 61.95%

Return on Net Worth=

Net aftertax profits Share holder capital + Retained earnings
calculation 1633.60 144.50 2307.10 144.50 2545.00 144.50 1231.70 144.50 1789.90 144.50 ans 11.30 15.96 17.62 8.52 12.38

Year 2012 2011 2010 2009 2008

Net Annual Value =

Equity share holder Fund No of Equity Share *100
Calculation 144.50 2889.10 * 100 Answer 5%

Year 2012

2011
2010 2009 2008

144.50
2889.10 144.50 2889.10 144.50 2889.10 144.50

* 100
* 100 * 100 * 100

5%
5% 5% 5%

Debt Equity Ratio = Long Term Debt Total Net worth

Year
2012 2011 2010 2009 2008

Calculation
1078.30 15187.40 309.30 13877.50 822.40

Answer
0.07 0.02 0.07 0.07 0.11

1835.10 698.90
9344.90 900.20 8415.40

A high debt-equity ratio may indicate that financial status of the creditors is more than that of the owners

very low debt equity rate may mean that the borrowing capacity of the Organization is being underutilized.

Year 2012 2011

Calculation 7310.30 6119 6443.10 4300.00 3856.00

Answer 1.20 1.48 1.01 1.53 1.03

Current Ratio= 2010

2009 2008

3814.90 Current Asset +Loan +Advance 5570.00 Current Liabilities + Provision 3631.70 3190.50 3088.50

ANALYSIS: The ideal level of current ratio is 2:1. The current asset should be double that of current liability. This ratio helps to discharge firms short term liabilities.

Quick Ratio =

Year

Current Asset +Loan & advance-inventories+ ShortTerm investment Current Liabilities+ Provision +short term Debt Calculation Answer
7310.30 -1796.50
6119.00 6443.10-1415.00 4362.02 3856.00-1208.80 3814.90 5570.00-902.30

2012
2011 2010 2009 2008

0.90
1.15 0.69 1.28 0.69

3631.70 3190.50-1038.00
3088.50

Higher liquid ratio indicates that there are sufficient assets available with the organization Generally, the acid test ratio should be 1:1 or higher, however this varies widely by industry.

Inventory Turnover Ratio= Cost of Goods Sold Average Inventory

years 2012 2011 Calculation 33535.9 1605.75 33590.8 1311.9 25.60 Answer 20.88

2010
2009 2008

25878.3
1055.55 19041.3 970.15 15659.1 1038

24.51
19.63 15.08

It is a ratio which shows relationship between cost of goods sold and avg. stock. If this ratio is high i.e. concern is able to yield high sales with low stock then marketing efficiency will be considered good and if its low then its a indication of slowdown of business or over-investment in stock.

Net Profit Ratio = Net Profit *100 Net Sales Year Calculation Answer

2012 2011 2010 2009 1633.60* 100 36061 2307.10 * 100 36543.70 2545.00 * 100 8.69% 5.94% 6.31% 4.53%

29437.10
1231.70 * 100 20715.40

2008

1789.90 * 100

9.91%

Net profit ratio shows the overall efficiency of business. Higher the ratio its good for the business. Here we can see there is decrease in the ratio in the comparison of last year.