FUNDAMENTAL

ANALYSIS
Presentation
GROUP 9
Adarsh Kumar Agarwal
Ayushman Singh Ratnu
Arnav Mahajan
Anwesh Raajan
Rahul Pruthi
Mohit Jain
 INTRODUCTOIN
Project analysis slide 3
TATA Founded in 1945 as a manufacturer of locomotives, the company
manufactured its first commercial vehicle in 1954.

MOTOR
Tata Motors is one of the leading automobile manufacturers in the world,
S providing mobility solutions to over 175 countries.
ECONOMIC
ANALYSIS
By 2024, Tata Motors Finance targets to have Assets Under Management
(AUM) worth Rs.75,000 Crore and a Return On Equity
Lorem ipsum(ROE) of 20%, while
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maintaining Gross Non-Performing Assets (GNPA)
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Tata Motors' principal subsidiaries purchased the English premium car
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maker Jaguar Land Rover (the maker of Jaguar and Land Rover cars) and the
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South Korean commercial vehicle manufacturer Tata Daewoo

TATA Motors product portfolio includes Commercial vehicles, Military vehicles

and Electric vehicles.
 Ratio Analysis
Project analysis slide 2
LIQUIDITY RATIO PROFITABLITY RATIO

TATA
MOTORS

SOLVENCY RATIO TURNOVER RATIO

 Liquidity Ratio
Project analysis slide 3
CURRENT CASH RATIO LIQUITY RATIO
RATIO • Quick ratio of • Liquid ratio is 0.373
• Less than the company is 0.137 which is way below
ideal ratio which is also less the ideal ratio Liquidty Ratio
• Has shown a than the ideal ratio • The company is not
downward trend • The company is not doing good. ECONOMIC
1.600
ECOLOGICAL
• Industry average in good position to • Comparing it with ANALYSIS
1.400 ANALYSIS
has a current pay short term the industry 1.200

ratio of 1.380 obligation. average which has Lorem1.000

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shows that • Comparing it with a current ratio of amet, consectetur amet, consectetur

Axis Title
0.800

company has the industry 1.070 shows that adipiscing

0.600 elit, sed do adipiscing elit, sed do
performed bad average which has company has eiusmod
0.400
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in this year. a current ratio of performed bad in incididunt ut labore et incididunt ut labore et
0.200
0.386 shows that this year.. dolore magna aliqua. dolore magna aliqua.
company has 0.000
C u r r e n t R atio Liqu id Ratio C ash Ratio

performed bad in
this year.
 Solvency Ratio
Project analysis slide 3
DEBT TO EQUITY PROPRIETARY RATIO
DEBT TO ASSETS
RATIO
SOLVENCY RATIOS
RATIO
• A low ratio indicates
• Tata motors the
3.000 In the case of our that the company is
debt to equity ratio
company, the debt to already heavily
2.500 2.393 is .8:1
asset ratio is 0.236:1 depending on debts for
• The company has
2.000 which means it is well its operations.
risk involved but not
clear for receiving any • The ratio for the TATA
1.500 too much and it just
1.210 further loans than it motors is 0.98 which is
0.974 has under the ideal
1.000 0.804 may desire. But the at a lower level than the
0.628 ratio required.
market avg is shown to ideal required
0.500 • The market average
0.236 0.228
be 0.040:1 which is • When compared to the
0.059 0.040 on the other hands
0.000 almost 1/6th less than industry average of
Debt to Equity Ratio Debt to Assets Ratio Proprietary Ratio suggest a total of
the chosen company. 2.39 is extremely low
only .05 which is
19-20 18-19 Industry and this concludes that
extremely low and
the company is debt
has no risk involved.
based.
 Solvency Ratio
Project analysis slide 3
INTREST COVERAGE RATIO
35

30
INTEREST COVERAGE RATIO
25

20 In case of Tata motors this

ratio is -2.612 which indicates a
Axis Title

15
loss on the part of the
10 company in comparison to the
5 28.575 for industry
comparison.
0
Interest Coverage Ratio This indicates the fact Tata is
-5 not in a very healthy state and
providing loss would be risky.

Project analysis slide 3
Gross Profit Ratio
• Incurred a loss therefore the
Gross Profit Ratio shows
negative Ratio
• Compared to the industry ratio
which has a positive 11.562
shows the company had
performed bad comparatively
Profitability Ratio
Operating Profit
• Negative operating ratio of – 11.734 %
PROFITABLITY RATIOS
which shows which h bad sign for the
25.000
company
• Compare it with the competitors which
20.000
has a +7% ratio clearly shows that
company had not performed well in
15.000
this year
10.000

5.000

Axis Title
Net Profit Ratio 0.000

• The current year company had

Return on Investment Gross Profit Ratio Operating Profit Net Profit Ratio Return on Investment

• Company had incurred a loss and -5.000

incurred a loss and therefore
the net profit margin is -16.594
which is very bad
• Compared to industry average
showing positive ratio, gives a
therefore the net profit margin is
-10.000
-16.594 which is very bad
• When compared to industry average
-15.000
showing positive ratio, gives a clear

clear sign that company is not sign that company is not in good -20.000

in good position. position

RETURN ON ASSETS
EARNINGS PER SHARE
• Return on Assets (ROA) is an
It is calculated by dividing the
indicator of how well a company
company's net income with its
utilizes its assets, by determining
total number of outstanding
how profitable a company is
shares,
relative to its total assets. PROFITABLITY RATIOS
As the company had incurred a
• Since the had a loss this year 20.000
loss of 7289 so the company
Return on assets shows negative
shoes a negative EPS and as 10.000
-11.64. YOY decline of 136% and
compared industry average shows
comparing with industry average
that the company has not 0.000
shows that company did not s y re re io
s et uit ha ha at
performed well compared to As Eq rS rS utr
perform good at all -10.000 on on Pe Pe y-
o

Axis Title
industry. rn rn s d Pa
tu etu ing en
Re R ar
n
ivid e nd
E D
-20.000 ivid
D

-30.000
DIVIDEND PAY OUT
RETURN ON EQUITY RATIO -40.000

As the company incurred a loss

Since the had a loss this year -50.000
and so did not give any dividend
Return on assets shows negative
the Dividend pay-out is 0.
-39.64. YOY decline of 123%
Comparing with the industry
and comparing with industry
average which gave a dividend
average shows that company
per share of 0.211 shows the
did not perform good at all
company is in bad position.
 Turnover Ratio
Project analysis slide 3 CREDITOR TURNOVER
RATIO
ASSET
The credit turnover ratio is 3.44
TURNOVER RATIO times which equates to 106 days
which is higher than the debtor
• TATA motors has
TURNOVER RATIOS dropped since last INVENTORY turnover period which means
that the company has a high
25.000
year drastically to TURNOVER RATIO
reputation and this is also
0.701 which
represented in the industry
20.000
indicates the In the inventory turnover ratio,
average of 96 days.
company is unable we can see that TATA motors
15.000 to use the assets have a ratio of 11.43 times
up to the which converts to 32 days of
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10.000 maximum average age of inventory

• We look at the which is close to the inventory
DEBTOR
market analysis, we average of 28 days which
TURNOVER RATIO
5.000
The debtor turnover ratio is
can clearly observe means that the stock is being
16.80 which convert to almost 22
0.000
that companies converted and sold at quite a
days average collection period
Asset Turnover Ratio Inventory Turnover Debtor Turnover Creditor Turnover have the Asset pace.
Ratio Ratio Ratio
which is even better than the
turnover close to 1
industry average of 26 days. This
which means full
implies that the collection policy
utilization.
of the company is excellent.
 CONCLUSION
Project analysis slide 3
Profitability Ratios
We can conclude that the company has bearded severe losses in the current financial year and also when we look at the industry average, we can see that the other companies have
flourished massively due to which a warning sign has to be taken from this analysis. Also, the fact that they couldn’t even convert the operating profit is what is the most concerning.

Liquidity Ratios
The company does not have enough current assets and the majority of the asset share is invested in the fixed assets. This also represents that the cash
in hand with the company is very low such that it cannot even fulfil all the current liabilities. But the credit period allowed to the company is very high
which means it can afford to have lower cash in hand.

Solvency Ratio
Generally average in comparison to the industry standards but the interest coverage shows a massive decline from last year which is due to the losses
that the company has had to bear this year. Also, the company has majority of its financing from the shares which means that the risk is less for the
company but still the little debt that it does have, the interest cannot be paid in full for it.

Turnover Ratios
The best maintained ratios in this company with matching the industry standards and even having more credit period than the competitors in some cases.
Also, the fact that the debt recovery period is also better than a lot. The Assets are not being utilized to the fullest which is a concern for the company and it
should look to fuller utilization by either having more inventory or more machinery and manpower.
 CONCLUSION
Project analysis slide 3
Looking at the profit trends for the last 8 years, TATA motors has had
losses 5 times compared to the profit which is 3 times. This combined with
TATA’s inability to be able to pay interest which is clearly shown through
the Interest Coverage Ratio. Also, the industry average represents that
there was not much of a competition and TATA lagged behind in all the
major comparisons, including its comparison with its last year analysis.

So the bank has decided to deny the loan request from TATA considering
the fact of Covid, nothing is going to improve in the coming months to an
year.
 SUGGESTION
Project analysis slide 3

Improve their ●
By selling off the fixed assets
Switch from short term to long term debt

Liquidity
●

●
Company need to generate more cash through public offerings

Improve their The are not utilising their assets well to increase their profitability
●

Profitability
Change suppliers through which the cast on material consumed is reduced.
●

Improve their ●
Asset turnover of the company is low which can be improved by increasing the amount of
inventory or increasing the amount of assets employed to convert the inventory into

Turnover finished good.

Thank You