Professional Documents
Culture Documents
analysis
Tata Motors « Previous Years
Key Financial Ratios ------------------- in Rs. Cr. -------------------
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
1
Liquidity And Solvency Ratios
Current Ratio 1.07 0.86 0.64 0.44 0.44
Quick Ratio 0.97 0.92 0.66 0.58 0.44
Debt Equity Ratio 0.53 0.59 0.80 1.06 1.11
Long Term Debt Equity
0.42 0.31 0.50 0.49 1.11
Ratio
Debt Coverage Ratios
Interest Cover 7.62 7.19 6.28 2.43 2.77
Total Debt to Owners Fund 0.53 0.59 0.80 1.06 1.12
Financial Charges
8.08 7.62 7.19 3.64 3.56
Coverage Ratio
Financial Charges
7.06 6.67 6.82 3.73 3.74
Coverage Ratio Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio 10.32 11.02 14.44 13.47 13.07
Debtors Turnover Ratio 26.31 35.60 30.08 19.11 18.02
Investments Turnover Ratio 12.63 13.26 14.44 13.47 13.50
Fixed Assets Turnover
5.00 5.01 2.69 1.88 1.93
Ratio
Total Assets Turnover Ratio 2.40 2.49 2.06 1.02 1.13
Asset Turnover Ratio 2.55 3.08 2.69 1.88 1.95
Average Raw Material
19.88 17.53 15.08 20.90 15.66
Holding
Average Finished Goods
16.65 17.34 16.81 13.64 17.70
Held
Number of Days In Working
34.47 26.96 -15.62 -28.19 -74.73
Capital
Profit & Loss Account Ratios
Material Cost Composition 72.84 74.55 72.62 73.26 71.70
Imported Composition of
4.64 3.88 4.60 5.82 5.94
Raw Materials Consumed
Selling Distribution Cost
3.78 4.00 4.09 4.77 4.47
Composition
Expenses as Composition
11.87 10.18 9.88 9.49 8.61
of Total Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net
37.13 35.34 32.51 34.52 44.28
Profit
Dividend Payout Ratio Cash 26.73 26.16 24.02 17.94 29.02
2
Profit
Earning Retention Ratio 58.31 59.90 60.13 62.49 30.22
Cash Earning Retention
70.98 71.32 72.18 81.29 61.84
Ratio
AdjustedCash Flow Times 1.50 1.70 2.65 7.13 6.40
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Current Ratio 1.07 0.86 0.64 0.44 0.44
Quick Ratio 0.97 0.92 0.66 0.58 0.44
Inventory Turnover
Ratio 10.32 11.02 14.44 13.47 13.07
Debtors Turnover
Ratio 26.31 35.6 30.08 19.11 18.02
Current Ratio
3
The primary object
The profitability ratios are used to measure the overall efficiency of the business.
generally profitability ratios are calculate in relation to the sale or in relation to
investment .
Genrally profitability ratios arwe divided into following catagories
Operating ratos are used to establish the relation between cost of good
sold and other operating exp on the one hand and sales on the other .
in other words it measures the cost of operation per rupees of sales
the ratio generally calculate
Interpitation
Operating ratios indicates the percentages of the net sales that is consumed by
operating cost .obviously higher the operating ratios , the less is fabvorable it is ,
because it would have a small margin to cover interest , income tax , dividend
and reserves . however , 75-85% is considered as to be good ratos in case
manufacturing industry. Operatinf raios shoud be used catiously because it may
4
affected by a number of uncontrolables factors beyond the control of the firm .
more ever some firm , non operating expenses from the substantial part of the
total expensese.
5
Gross profit ratio .
l
Gross profit ratio measures the relationship of gross profit
to the net sales and is usually represent in terms of %
Gross profits ratio = Gross profit * 100
Net sales
Interpitation
Generally the gross profit ratios indicates the extent to which selling
prices of goods per unit may decline without resulting in losses on
operation of firm . there is no standards norms for gross profit ratios
and it may vary from business but the gross profit shoud adequate to
cover the operating and to provide for fixed charges dividend and
accumulations of reserves . Allow gross profit ratios generally indicate
high cost of goods sold due to unfavorable purchasing polices , lesser
sales lower selling price excessive compition over investment etc.
A comparison of goss profit ratios for different firm in the same industry is
good measures of the profitability. but any significant changes in the
ratio should be thoroughly investigated because an increases in Gp ratios
occurs not only by change in economic factors like selling in prices with
out any corresepondenting proportionate increases in cost or decrease in
costs without decrease in selling prices but also to certain misleading
factors like overvaluation of closing inventories or undervaluation of the
opening inventories .
6
7