Chapter 1

INTRODUCTION

1. Introduction

The automotive industry is a wide range of companies and organizations involved in

the design, development, manufacture, marketing, and selling of motor vehicles. The industry’s
principal products are passenger automobiles and light trucks, including pickups, vans, and sport
utility vehicles. Commercial vehicles (i.e., delivery trucks and large transport trucks, often called
semis), though important to the industry, are secondary.
It is one of the world's most important economic sectors by revenue. The automotive
industry does not include industries dedicated to the maintenance of automobiles following
delivery to the end-user, such as automobile repair shops and motor fuel filling stations.
The term automotive was created from Greek autos (self), and Latin motives (of motion)
to represent any form of self-powered vehicle.
The history of the automobile industry, though brief compared with that of many other
industries, has exceptional interest because of its effects on 20th-century history. Although the
automobile originated in Europe in the late 19th century, the United States completely dominated
the world industry for the first half of the 20th century through the invention of mass
production techniques. In the second half of the century the situation altered sharply as western
European countries and Japan became major producers and exporters.

1
 Chapter 2
FINANCIAL ANALYSIS OF BMW
INTRODUCTION
Bayerische Motoren Werke AG (Bavarian Motor Works), commonly known as BMW or BMW AG,
is a German automobile, motorcycle and engine manufacturing company founded in 1916. BMW
is headquartered in Munich, Bavaria. It also owns and produces Mini cars, and is the parent company
of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motored. In 2014, the BMW
Group produced 2,117,965 automobiles and approximately 120,000 motorcycles across all of its
brands. BMW is part of the "German Big 3" luxury automakers, along with Audi and Mercedes-
Benz, which are the three best-selling luxury automakers in the world

STRATEGY
The world continues to change at a rapid pace. In many countries, individual mobility
remains a focus of political regulation and national industrial policy. The shift in society requires
new mobility solutions. Volatility has long become a constant in our everyday business. Markets and
consumers alike remain uneasy in these periods of economic uncertainty.
To meet these challenges we formulated our Strategy Number ONE, which aligns the BMW
Group with two targets: to be profitable and to enhance long-term value in times of change. And this
applies to technological, structural as well as cultural aspects of our company. Since 2007, we have
been implementing various initiatives in keeping with the strategy’s four pillars: Growth, Shaping the
Future, Profitability and Access to Technology Customers.
Our activities will remain firmly focused on the premium segments of the international
automobile markets. Our mission statement up to the year 2020 is clearly defined: the BMW Group
is the world’s leading provider of premium products and premium services for individual mobility

BUSINESS SEGMENTS
The BMW Group – one of Germany’s largest industrial companies – is one of the most
successful car and motorcycle manufacturers in the world. With BMW, MINI and Rolls-Royce, the
BMW Group owns three of the strongest premium brands in the automobile industry. The vehicles
manufactured by BMW set the highest standards in terms of aesthetics, dynamics, technology and
quality, borne out by the company’s leading position in engineering and innovation. In addition to its
strong position in the motorcycles market with the BMW brand, the BMW Group also offers a
successful range of financial services.

FINANCIAL ANALYSIS OF BMW

The BMW Group sold a total of 1,963,798 BMW, MINI and Rolls-Royce brand vehicles
during the year 2013, the best sales volume performance ever achieved in the Company’s history
(2012: 1,845,186 units;+6.4%). Despite increasing volatility on many markets, particularly in
Europe, the BMW Group retained its pole position in the premium segment worldwide. All three
brands set new sales volume records. Sales of BMW brand cars rose by 7.5% to 1,655,138 units
(2012: 1,540,085 units). In addition, 305,030 MINI brand vehicles (2012: 301,526 units;+1.2%) and
3,630 Rolls-Royce brand vehicles (2012: 3,575 units;+1.5%) were sold.
The Financial Services segment again benefited from its attractive product range in 2013 and
reported profitable growth. The portfolio of leasing and credit financing contracts in place with retail
customers and dealers grew by 7.4% to a total of 4,130,002 contracts, the highest figure ever reported
by the segment (2012: 3,846,364 contracts). Business volume in balance sheet terms grew by 4.2% to
stand at € 84,347 million at the end of the reporting period (2012: € 80,974 million).

2
 Group revenues decreased by 1.0% to € 76,058 million (2012: € 76,848 million). Despite
increased levels of expenditure for future technologies, intense competition and higher personnel
expenses, Group profit before tax rose by 1.4% to total € 7,913 million (2012: € 7,8033 million).

INCOME STATEMENT OF BMW DURING 2013 AND 2014 (In € million)

Notes 2014 2013

Revenues 60,474 58,805

Cost of sales –47,067 –46,252

Gross profit 13,407 12,553

Selling expenses –3,528 –3,684

Administrative expenses –2,141 –1,701

Research and development expenses –4,362 –3,573

Other operating income and expenses 542 703

Result on investments 373 598

Financial result –328 –99

Profit from ordinary activities 3,963 4,797

Income taxes –1,629 –1,635

Other taxes –45 –31

Net profit 2,289 3,131

Transfer to revenue reserves –582 –1,491

Inappropriate profit available for 1,707 1,640

distribution

3
 BALANCE SHEET OF BMW AS ON DECEMBER 2013 AND 2014
In € million
Notes 2014 2013
Assets
Intangible assets 474 178
Property, plant and equipment 8,982 7,806
Investments 3,377 3,094
Tangible, intangible and investment assets 12,833 11,078

Inventories 3,863 3,749

Trade receivables 659 858
Receivables from subsidiaries 4,871 6,297
Other receivables and other assets 3,194 2,061
Marketable securities 3,429 2,514
Cash and cash equivalents 3,757 4,618
Current assets 19,773 20,097

Prepayments 169 118

Surplus of pension and similar plan assets over 990 672
liabilities
Total assets 33,765 31,965

Equity and liabilities

Subscribed capital 656 656
Capital reserves 2,069 2,053
Revenue reserves 6,097 5,515
Inappropriate profit available for distribution 1,707 1,640
Equity 10,529 9,864
Registered profit-sharing certificates 32 32
Pension provisions 43 56
Other provisions 7,299 7,406
Provisions 7,342 7,462

Liabilities to banks 1,463 1,408

Trade payables 4,818 3,900
Liabilities to subsidiaries 8,795 8,451
Other liabilities 285 800
Liabilities 15,361 14,559
Deferred income 501 48
Total equity and liabilities 33,765 31,965

4
 COMPARATIVE BALANCE SHEET OF BMW (In € million)
Notes 2014 2013 Absolute Percentage
Assets
Intangible assets 474 178 296 166.3
Property, plant and equipment 8,982 7,806 1176 15.07
Investments 3,377 3,094 283 9.15
Tangible, intangible and investment assets 12,833 11,078 1,755 15.84
Inventories 3,863 3,749 114 3.04
Trade receivables 659 858 -199 -23.19
Receivables from subsidiaries 4,871 6,297 -1426 -22.65
Other receivables and other assets 3,194 2,061 1133 54.97
Marketable securities 3,429 2,514 915 36.40
Cash and cash equivalents 3,757 4,618 -861 -18.64
Current assets 19,773 20,097 -324 -1.61

Prepayments 169 118 51 43.22

Surplus of pension and similar plan assets over
990 672 318 47.32
liabilities
Total assets 33,765 31,965 1800 5.63

Equity and liabilities

Subscribed capital 656 656 0 0.00
Capital reserves 2,069 2,053 16 0.78
Revenue reserves 6,097 5,515 582 10.55
Inappropriate profit available for distribution 1,707 1,640 67 4.09
Equity 10,529 9,864 665 6.74
Registered profit-sharing certificates 32 32 0 0.00
Pension provisions 43 56 -13 -23.21
Other provisions 7,299 7,406 -107 -1.44

Provisions 7,342 7,462 -120 -1.61

Liabilities to banks 1,463 1,408 55 3.91

Trade payables 4,818 3,900 918 23.54
Liabilities to subsidiaries 8,795 8,451 344 4.07
Other liabilities 285 800 -515 -64.38
Liabilities 15,361 14,559 802 5.51
Deferred income 501 48 453 943.75
Total equity and liabilities 33,765 31,965 1800 5.63

5
 COMMON SIZE BALANCE SHEET OF BMW (IN € MILLION)
Percentage Percentage
Notes 2014 2014
2014 2014
Assets
Intangible assets 474 1.40 178 0.56
Property, plant and equipment 8,982 26.60 7,806 24.42
Investments 3,377 10.00 3,094 9.68
Tangible, intangible and investment assets 12,833 38.01 11,078 34.66

Inventories 3,863 11.44 3,749 11.73

Trade receivables 659 1.95 858 2.68
Receivables from subsidiaries 4,871 14.43 6,297 19.70
Other receivables and other assets 3,194 9.46 2,061 6.45
Marketable securities 3,429 10.16 2,514 7.86
Cash and cash equivalents 3,757 11.13 4,618 14.45
Current assets 19,773 58.56 20,097 62.87

Prepayments 169 0.50 118 0.37

Surplus of pension and similar plan
990 2.93 672 2.10
assets over liabilities
Total assets 33,765 100.00 31,965 100.00

Equity and liabilities

Subscribed capital 656 1.94 656 2.05
Capital reserves 2,069 6.13 2,053 6.42
Revenue reserves 6,097 18.06 5,515 17.25
Unappropriated profit available for
1,707 5.06 1,640 5.13
distribution
Equity 10,529 31.18 9,864 30.86
Registered profit-sharing certificates 32 0.09 32 0.10
Pension provisions 43 0.13 56 0.18
Other provisions 7,299 21.62 7,406 23.17
Provisions 7,342 21.74 7,462 23.34
Liabilities to banks 1,463 4.33 1,408 4.40
Trade payables 4,818 14.27 3,900 12.20
Liabilities to subsidiaries 8,795 26.05 8,451 26.44
Other liabilities 285 0.84 800 2.50
Liabilities 15,361 45.49 14,559 45.55
Deferred income 501 1.48 48 0.15
Total equity and liabilities 33,765 100.00 31,965 100.00

6
FINANCIAL STATEMENT ANALYSIS OF BMW

LIQUIDITY RATIO

Current Ratio = Current Assets/ Current Liabilities

= 19773/13898
= 1.43 times
Industrial Current Ratio = 1.26 times
Here the Current Ratio of BMW is greater than the Current Ratio of the Automobile Industry.
This shows that BMW position is good in terms of Current Ratio.

Quick Ratio = Quick Assets/ Current Liabilities

= 15910/13898
= 1.15 times
Industrial Quick Ratio = 1.02 times
Here the Quick Ratio of BMW is greater than the Quick Ratio of Automobile Industry. This
shows that the Liquidity of BMW is good when compared to its competitors in the automobile sector

LEVERAGE RATIO

Long Debt Equity Ratio = Long term Debt/Shareholder funds

= 1463/10529
= 14%
Industry Long Debt Equity
Ratio =26.83%
Here the Long Debt Equity Ratio of BMW is lesser than the Long Debt Equity Ratio of
Automobile Industry. This shows that the position of BMW is good when compared to its
competitors in terms of Debt Equity ratio.

Debt Asset Ratio = Debt/ Total Assets

= 15361/33765
= 45.49%
Industry Debt Asset Ratio =42.65%
Here the Debt Asset Ratio of BMW is greater than the Debt Asset Ratio of Automobile
Industry. Thus in terms of Debt Asset Ratio BMW is better than its competing companies

Proprietary Ratio =Shareholder funds/Total Asset

=10529/33765
=31.18%
Industry Proprietary Ratio =30.07%
Here the Proprietary Ratio of BMW is almost equal to the Proprietary Ratio of the
Automobile Industry. Thus the Proprietary ratio of BMW is more ideal.

7
ACTIVITY RATIO

Stock Turnover Ratio = Cost of Goods Sold/Average Stock

= 47067/3863
=12.18 times
Industry STR =10.18 times
Here Stock Turnover Ratio of BMW is greater than the Industry Stock Turnover Ratio which
shows that BMW is good in terms of Stock Turnover Ratio

PROFITABILITY RATIO

Net Profit Margin = Net profit/Sales

= 2289/60474
= 3.78%
Industry Net Profit Margin = 4.50%
Here the Net Profit Margin of BMW is comparatively lower than the Net Profit Margin of
Automobile Industry. Though Net Profit of BMW is good, when compared to its sales revenue it is
less than the competitors which shows that the indirect expenses of BMW is high. Hence BMW
should look into reducing the unnecessary indirect expenses.

Return on Assets = Net Profit/Total Assets

= 2289/33765
= 6.70%
Industry Return on Assets =4.28%
Here the Return on Assets of BMW is higher than the industrial average Return on Assets.
Thus BMW is getting more return from its assets when compared to its competitors.

Gross Profit Ratio = Gross Profit/Sales

= 30407/60474
= 50.28%
Industry Gross Profit Ratio = 27.09%
The Gross profit Ratio of BMW is higher than the Gross Profit of Automobile Industry. Thus
BMW is comparatively better than its competitors in achieving more gross profits from its sales.

8
 Chapter 3
FINANCIAL ANALYSIS OF HONDA MOTORS
INTRODUCTION
Honda Motor Co. Ltd is primarily known as a manufacturer of automobiles, motorcycles and power
equipment.
Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's
largest manufacturer of internal combustion engines measured by volume, producing more than 14
million internal combustion engines each year. Honda became the second-largest Japanese
automobile manufacturer in 2001.Honda was the eighth largest automobile manufacturer in the world
behind General Motors, Volkswagen Group, Toyota, Hyundai Motor Group, Ford, Nissan,
and PSA in 2011.
Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in
1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden
equipment, marine engines, personal watercraft and power generators, amongst others. Since 1986,
Honda has been involved with artificial intelligence/robotics research and released
their ASIMO robot in 2000. They have also ventured into aerospace with the establishment of GE
Honda Aero Engines in 2004 and the Honda HA-420 Honda Jet, which began production in 2012.
Honda has three joint-ventures in China (Honda China, Dongfeng Honda, and Guangqi Honda).
In 2013, Honda invested about 5.7% (US$6.8 billion) of its revenues in research and
development. Also in 2013, Honda became the first Japanese automaker to be a net exporter from the
United States, exporting 108,705 Honda and Acura models while importing only 88,357.

FINANCIAL ANALYSIS OF HONDA MOTORS

INCOME STATEMENT OF HONDA MOTORS DURING 2014

In Millions of JPY (except for per share items) 2014

Total Revenue 11,842,451.00

Cost of Revenue, Total 8,761,083.00
Gross Profit 3,081,368.00
Selling/General/Admin. Expenses, Total 1,696,957.00
Research & Development 634,130.00
Total Operating Expense 11,092,170.00
Operating Income 750,281.00
Other, Net -32,664.00
Income Before Tax 728,940.00
Income After Tax 476,278.00
Minority Interest -34,642.00
Equity In Affiliates 132,471.00
Net Income Before Extra. Items 574,107.00
Net Income 574,107.00

9
BALANCE SHEET OF HONDA MOTORS

In Millions of JPY (except for per share items) 2014 2013

Cash & Equivalents 1,168,914.00 1,206,128.00
Cash and Short Term Investments 1,168,914.00 1,206,128.00
Accounts Receivable - Trade, Net 1,158,671.00 1,005,981.00
Total Receivables, Net 2,622,886.00 2,248,983.00
Total Inventory 1,302,895.00 1,215,421.00
Other Current Assets, Total 676,571.00 652,521.00
Total Current Assets 5,771,266.00 5,323,053.00
Property/Plant/Equipment, Total - Gross 9,858,425.00 8,565,886.00
Accumulated Depreciation, Total -4,803,272.00 -4,323,224.00
Other Long Term Assets, Total 913,793.00 822,397.00
Total Assets 15,622,031.00 13,635,357.00
Accounts Payable 1,099,680.00 988,014.00
Accrued Expenses 669,588.00 642,024.00
Notes Payable/Short Term Debt 1,319,344.00 1,238,297.00
Current Port. of LT Debt/Capital Leases 1,303,464.00 945,046.00
Other Current liabilities, Total 319,253.00 275,623.00
Total Current Liabilities 4,711,329.00 4,089,004.00
Long Term Debt 3,234,066.00 2,710,845.00
Total Long Term Debt 3,234,066.00 2,710,845.00
Total Debt 5,856,874.00 4,894,188.00
Minority Interest 194,419.00 161,923.00
Other Liabilities, Total 1,563,238.00 1,630,085.00
Total Liabilities 9,703,052.00 8,591,857.00
Common Stock, Total 86,067.00 86,067.00
Additional Paid-In Capital 171,117.00 171,117.00
Retained Earnings (Accumulated Deficit) 6,480,958.00 6,049,232.00
Treasury Stock - Common -26,149.00 -26,124.00
Other Equity, Total -793,014.00 -1,236,792.00
Total Equity 5,918,979.00 5,043,500.00
Total Liabilities & Shareholders' Equity 15,622,031.00 13,635,357.00
Total Common Shares Outstanding 1,802.29 1,802.30

10
COMPARATIVE BALANCE SHEET OF HONDA MOTORS

In Millions of JPY (except for per Absolut

2014 2013 Percentage
share items) e
Cash & Equivalents 1,168,914.00 1,206,128.00 -37214 -3.085
Cash and Short Term Investments 1,168,914.00 1,206,128.00 -37214 -3.085
Accounts Receivable - Trade, Net 1,158,671.00 1,005,981.00 152690 15.178
Total Receivables, Net 2,622,886.00 2,248,983.00 373903 16.625
Total Inventory 1,302,895.00 1,215,421.00 87474 7.197
Other Current Assets, Total 676,571.00 652,521.00 24050 3.685
Total Current Assets 5,771,266.00 5,323,053.00 448213 8.42
Property/Plant/Equipment, Total - Gross 9,858,425.00 8,565,886.00 1292539 15.08
Accumulated Depreciation, Total -4,803,272.00 -4,323,224.00 -480048 11.1
Other Long Term Assets, Total 913,793.00 822,397.00 91396 11.11
Total Assets 15,622,031.00 13,635,357.00 1986674 14.57
Accounts Payable 1,099,680.00 988,014.00 111666 11.3
Accrued Expenses 669,588.00 642,024.00 27564 4.293
Notes Payable/Short Term Debt 1,319,344.00 1,238,297.00 81047 6.545
Current Port. of LT Debt/Capital Leases 1,303,464.00 945,046.00 358418 37.925
Other Current liabilities, Total 319,253.00 275,623.00 43630 15.829
Total Current Liabilities 4,711,329.00 4,089,004.00 622325 15.219
Long Term Debt 3,234,066.00 2,710,845.00 523221 19.3
Total Long Term Debt 3,234,066.00 2,710,845.00 523221 19.3
Total Debt 5,856,874.00 4,894,188.00 962686 19.66
Minority Interest 194,419.00 161,923.00 32496 20.06
Other Liabilities, Total 1,563,238.00 1,630,085.00 -66847 -14.1
12.17.3589
Total Liabilities 9,703,052.00 8,591,857.00 1111195
33
Common Stock, Total 86,067.00 86,067.00 0 0
Additional Paid-In Capital 171,117.00 171,117.00 0 0
Retained Earnings (Accumulated
6,480,958.00 6,049,232.00 431726 7.136
Deficit)
Treasury Stock - Common -26,149.00 -26,124.00 -25 0.095
Other Equity, Total -793,014.00 -1,236,792.00 443778 -35.881
Total Equity 5,918,979.00 5,043,500.00 875479 17.358
Total Liabilities & Shareholders' Equity 15,622,031.00 13,635,357.00 1986674 14.57

11
FINANCIAL STATEMENT ANALYSIS OF HONDA MOTORS
LIQUIDITY RATIO
Current Ratio = Current Assets/ Current Liabilities
= 1.22 times
Industrial Current Ratio = 1.26 times
Here the Current Ratio of Honda is lesser than the Current Ratio of the Automobile Industry.
This shows that Honda position is not good in terms of Current Ratio when compared with few its
competitors in the automobile sector.

Quick Ratio = Quick Assets/ Current Liabilities

= .95 times
Industrial Quick Ratio = 1.02 times
Here the Quick Ratio of Honda is lesser than the Quick Ratio of Automobile Industry.
The Quick Ratio of Honda is not good when compared with few its competitors in the automobile
sector.

LEVERAGE RATIO
Long Debt Equity Ratio = Long term Debt/Shareholder funds
= 20%
Industry Long Debt Equity
Ratio =36.17%
Here the Long Debt Equity Ratio of Honda is less than the industry ratio.
Here the Quick Ratio of Honda is lesser than the Long Debt Equity Ratio of Automobile
Industry. This shows that the position of Honda is good when compared to its competitors in
terms of Debt Equity ratio.

Debt Asset Ratio = Debt/ Total Assets

= 37.49%
Industry Debt Asset Ratio =42.65%
Here the Debt Asset Ratio of Honda is lesser than the Debt Asset Ratio of Automobile
Industry. Thus in terms of Debt Asset Ratio Honda is not better than it’s compared competing
companies.

Proprietary Ratio =Shareholder funds/Total Asset

=37.88%
Industry Proprietary Ratio =30.07%
Here the Proprietary Ratio of Honda is greater than the Proprietary Ratio of the Automobile
Industry. Thus the Proprietary ratio of Honda is better.

ACTIVITY RATIO

Stock Turnover Ratio = Cost of Goods Sold/Average Stock

=6.724 times
Industry STR =10.18 times
Here Stock Turnover Ratio of Honda is less than the Industry Stock Turnover Ratio which
shows that Honda is not good in terms of Stock Turnover Ratio with the compared companies.

12
PROFITABILITY RATIO

Net Profit Margin = Net profit/Sales

= 5%
Industry Net Profit Margin = 4.50%
Here the Net Profit Margin of Honda is comparatively higher than the Net Profit Margin of
Automobile Industry. Though Net Profit of Honda is not good when compared to its sales revenue, it
is greater than the competitors which show that the indirect expenses of Honda are low.

Return on Assets = Net Profit/Total Assets

=3.6%
Industry Return on Assets =4.28%
Here the Return on Assets of Honda is lower than the industrial average Return on Assets.
Thus Honda is getting less return from its assets when compared to its competitors.

Gross Profit Ratio = Gross Profit/Sales

=26%
Industry Gross Profit Ratio = 27.09%
The Gross profit Ratio of Honda is slightly lesser than the Gross Profit of Automobile
Industry. Thus Honda is a bit less than its competitors in achieving more gross profits from its sales.

13
 Chapter 4

FINANCIAL ANALYSIS OF TATA MOTORS

INTRODUCTION
Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company)
is an Indian multinational automotive manufacturing company headquartered in Mumbai,
Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks,
vans, coaches, buses, construction equipment and military vehicles. It is the world's 17th-largest
motor vehicle manufacturing company, fourth-largest truck manufacturer, and second-largest bus
manufacturer by volume.

Founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial
vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered
the passenger vehicle market in 1991 with the launch of the Tata Sierra, becoming the first Indian
manufacturer to achieve the capability of developing a competitive indigenous automobile. [4] In
1998, Tata launched the first fully indigenous Indian passenger car, the Indica, and in 2008 launched
the Tata Nano, the world's most affordable car. Tata Motors acquired the South Korean truck
manufacturer Daewoo Commercial Vehicles Company in 2004 and purchased Jaguar Land Rover
from Ford in 2008.

Tata Motors is listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX
index, the National Stock Exchange of India, and the New York Stock Exchange. Tata Motors is
ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest corporations.

Tata entered the commercial vehicle sector in 1945 after forming a joint venture with Daimler-Benz
of Germany. After years of dominating the commercial vehicle market in India, Tata Motors entered
the passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. Tata
subsequently launched the Tata Estate (1992; a station wagon design based on the earlier 'Tata
Mobile' (1989), a light commercial vehicle), the Tata Sumo (1994; LCV) and the Tata Safari (1998;
India's first sports utility vehicle).

Tata launched the Indica in 1998, the first fully indigenous Indian passenger car. Although initially
criticized by auto analysts, its excellent fuel economy, powerful engine, and an aggressive marketing
strategy made it one of the best-selling cars in the history of the Indian automobile industry. A newer
version of the car, named Indica V2, was a major improvement over the previous version and quickly
became a mass favorite. Tata Motors also successfully exported large numbers of the car to South
Africa. The success of the Indica played a key role in the growth of Tata Motors.

In 2004, Tata Motors acquired Daewoo's South Korea-based truck manufacturing unit, Daewoo
Commercial Vehicles Company, later renamed Tata Daewoo.

On 27 September 2004, Tata Motors rang the opening bell at the New York Stock Exchange to mark
the listing of Tata Motors.[7]

14
In 2005, Tata Motors acquired a 21% controlling stake in the Spanish bus and coach manufacturer
Hispano Carrocera. Tata Motors continued its market area expansion through the introduction of new
products such as buses (Star bus and Globus, jointly developed with subsidiary Hispano Carrocera)
and trucks (Novus, jointly developed with subsidiary Tata Daewoo).

In 2006, Tata formed a joint venture with the Brazil-based Marcopolo, Tata Marcopolo Bus, to
manufacture fully built buses and coaches.

In 2008, Tata Motors acquired the British car maker Jaguar Land Rover, manufacturer of the Jaguar,
Land Rover, and Daimler luxury car brands, from Ford Motor Company.

In May 2009, Tata unveiled the Tata World Truck range jointly developed with Tata Daewoo; the
range went on sale in South Korea, South Africa, the SAARC countries, and the Middle East at the
end of 2009.

Tata acquired full ownership of Hispano Carrocera in 2009.

In 2009, its Lucknow plant was awarded the "Best of All" Rajiv Gandhi National Quality Award.

In 2010, Tata Motors acquired an 80% stake in the Italian design and engineering company Trilix for
€1.85 million. The acquisition formed part of the company's plan to enhance its styling and design
capabilities.

In 2012, Tata Motors announced it would invest around 6 billion in the development of Futuristic
Infantry Combat Vehicles in collaboration with DRDO.

In 2013, Tata Motors announced it will sell in India, the first vehicle in the world to run on
compressed air (engines designed by the French company MDI) and dubbed "Mini CAT".

On 26 January 2014, the Managing Director Karl Slym was found dead. He fell from the 22nd floor
to the fourth floor of the Shangri-La Hotel in Bangkok, where he was to attend a meeting of Tata
Motors Thailand.

15
BALANCE SHEET OF TATA MOTORS AS ON DATED 31ST MARCH 2014

16
PROFIT AND LOSS STATEMENT OF TATA MOTORS

17
 Particulars 4/1/2013(in Million) 4/1/2014(in Million)
Total income 470727.2 394814.6
Net sales 447657.2 342881.1
Total expenses 469145.1 387752.2
Raw materials, stocks, spares, purchase of finished goods 331087.3 255426.9
Raw materials, stores & spares 272442.8 204928.7
Purchase of finished goods 58644.5 50498.2
Salaries and wages 28370 29249.7
Total other expenses 75184 66802.2
Extra-ordinary expenses 175.2
Depreciation 18176.2 20703
Provisions and contingencies 2450 2020
Net Profit 3018.1 3345.2
Reported Profit after tax 3018.1 3345.2
PBT 3018.1 3345.2
PBP 5468.1 5365.2
PBDIT 35071.9 37423.4
Shareholders' funds 191348.4 191766.5
Capital 6380.7 6437.8
Reserve and surplus 184967.7 185328.7
Borrowings 142686.9 145155.3
Other long term liabilities 12384.4 11554.8
Current liabilities & provisions 155788.9 148436.5
Current liabilities 133781.2 121355.4
Sundry creditors & acceptances 84550.2 96723.6
Other current liabilities 49231 24631.8
Provisions 22007.7 27081.1
Long term provisions 6911.9 8152
Short term provisions 15095.8 18929.1
Net fixed assets 202085.4 215956.4
Investments 199343.9 184584.2
Long term investments 181717.1 183575.7
Short term investments 17626.8 1008.5
Other non-current assets 943.2 1238.5
Current assets & loans and advances 119475.2 95565.1
Net current asset & loans and advances -36313.7 -52871.4

RATIO ANALYSIS

A > LIQUIDITY RATIO

1. Current Ratio = Current Assets/ Current Liabilities

= 6739.06/18797.53
= .35
Industrial Current Ratio = 1.26 times

18
 Here the Current Ratio of TATA MOTORS is less than the Current Ratio of the Automobile
Industry. This shows that TATA positions is not good in terms of Current assets and have more
current liabilities.

2. Quick Ratio = Quick Assets/ Current Liabilities

= (6739.06-3862.53)/18797.53
= .153
Industrial Quick Ratio = 1.02 times
Here the Quick Ratio of TATA MOTORS is less than the Quick Ratio of Automobile
Industry. This shows that the Liquidity of TATA MOTORS is not at all good when compared to its
competitors in the automobile sector

B > LEVERAGE RATIO

1. Long Debt Equity Ratio = Long term Debt/Shareholder funds

= 11760.24/19176.65
= 61.32%
Industry Long Debt Equity
Ratio =26.83%
Here the Long Debt Equity Ratio of TATA MOTORS is greater than the Long Debt Equity
Ratio of Automobile Industry. This shows that the position of TATA MOTORS is not good when
compared to its competitors in terms of Debt Equity ratio.

2. Debt Asset Ratio = Debt/ Total Assets

= 11760.24/49734.42
= 23.64%
Industry Debt Asset Ratio =42.65%
Here the Debt Asset Ratio of BMW is less than the Debt Asset Ratio of Automobile Industry.
Thus in terms of Debt Asset Ratio TATA MOTORS is poor than its competing companies

3. Proprietary Ratio =Shareholder funds/Total Asset

=19176.65/49734.42
=38.5%
Industry Proprietary Ratio =30.07%
Here the Proprietary Ratio of TATA MOTORS is near to the Proprietary Ratio of the
Automobile Industry. Thus the Proprietary ratio of TATA MOTORS is ideal.

C > ACTIVITY RATIO

1. Stock Turnover Ratio = Cost of Goods Sold/Average Stock

= 34319.28/4158.78
=8.25
Industry STR =10.18 times
Here Stock Turnover Ratio of TATA MOTORS is less than the Industry Stock Turnover
Ratio which shows that TATA MOTORS is not in good position in terms of Stock Turnover Ratio

19
D > PROFITABILITY RATIO

1. Net Profit Margin = Net profit/Sales

= 1334.52/34319.28
=3.8
Industry Net Profit Margin = 4.50%
Here the Net Profit Margin of TATA MOTORS is comparatively lower than the Net Profit
Margin of Automobile Industry. Though Net Profit of TATA MOTORS is good, when compared to
its sales revenue it is less than the competitors which shows that the indirect expenses of TATA
MOTORS is high. Hence TATA MOTORS should look into reducing the unnecessary indirect
expenses.

2. Return on Assets = Net Profit/Total Assets

=1334.52/49734.42
= 2.6%
Industry Return on Assets =4.28%
Here the Return on Assets of TATA MOTORS is higher than the industrial average Return
on Assets. Thus TATA MOTORS is getting more return from its assets when compared to its
competitors

3. Gross Profit Ratio = Gross Profit/Sales

= 7457.86/34319.28
=21.7%
Industry Gross Profit Ratio = 27.09%
The Gross profit Ratio of TATA MOTORS is less than the Gross Profit of Automobile
Industry. Thus TATA MOTORS is comparatively poor than its competitors in achieving more gross
profits from its sales

20
 Chapter 5
FINANCIAL ANALYSIS OF TOYOTA MOTORS
INTRODUCTION
Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi,
Japan. In March 2014 the multinational corporation consisted of 338,875 employees worldwide and,
as of November 2014, is the twelfth-largest company in the world by revenue. Toyota was the largest
automobile manufacturer in 2012 (by production) ahead of the Volkswagen Group and General
Motors. In July of that year, the company reported the production of its 200-millionth vehicle.
Toyota is the world's first automobile manufacturer to produce more than 10 million vehicles per
year. It did so in 2012 according to OICA, and in 2013 according to company data. As of July 2014,
Toyota was the largest listed company in Japan by market capitalization and by revenue.
The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his
father's company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a
department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first
passenger car, the Toyota AA.

Financial results
In 2011, the Toyota Group (including Daihatsu, Hino and Chinese joint ventures) fell to place three
with 8,050,181 units produced globally. According to an unofficial count, based on unit production
reported by major automakers, Toyota regained its top rank with 9,909,440 units produced globally
in calendar year 2012. On May 8, 2013, Toyota announced plans to produce 10.1 million units in
fiscal year 2013, which, if achieved, would make it the first auto manufacturer to cross the 10-
million-unit threshold.
On May 8, 2009, Toyota reported a record annual net loss of US$4.2 billion, making it the latest
automobile maker to be severely affected by the global financial crisis that started in 2007. Toyota's
financial unit had asked for an emergency loan from a state-backed lender on March 16, 2009, with
reports putting the figure at more than $3 billion. It said the international financial situation was
squeezing its business, forcing it to ask for an emergency loan from the Japan Bank for International
Cooperation. This was the first time the state-backed bank has been asked to lend to a Japanese car
manufacturer.
On May 8, 2013, Toyota Motor Corporation announced its financial results for the fiscal year ended
March 31, 2013. Net revenues totaled ¥22.0 trillion (+18.7%). Operating income was ¥1.32
trillion (+371%), net income ¥962.1 billion (+239%)
Company strategy Toyota's management philosophy has evolved from the company's origins and
has been reflected in the terms "Lean Manufacturing" and Just In Time Production, which it was
instrumental in developing. Toyota's managerial values and business methods are known collectively
as the Toyota Way

INCOME STATEMENT OF TOYOTA MOTORS

Mar 31 Mar 31
Currency in
As of: 2013 2014
Millions of Japanese Yens
JPY JPY
Revenues 20,914,150.0 24,312,644.0

21
TOTAL REVENUES 22,064,192.0 25,691,911.0
Cost Of Goods Sold 18,010,569.0 19,988,245.0
GROSS PROFIT 3,423,197.0 4,890,772.0
Selling General & Admin Expenses, Total 2,012,309.0 2,598,660.0
OTHER OPERATING EXPENSES, TOTAL 2,012,309.0 2,598,660.0
OPERATING INCOME 1,410,888.0 2,292,112.0
Interest Expense -22,967.0 -19,630.0
Interest And Investment Income 98,673.0 115,410.0
NET INTEREST EXPENSE 75,706.0 95,780.0
Income (Loss) On Equity Investments 231,519.0 318,376.0
Currency Exchange Gains (Loss) 5,551.0 50,260.0
Other Non-Operating Income (Expenses) 3,608.0 9,125.0
EBT, EXCLUDING UNUSUAL ITEMS 1,727,272.0 2,765,653.0
Gain (Loss) On Sale Of Investments -2,104.0 -6,197.0
Other Unusual Items, Total -90,000.0 --
Legal Settlements -90,000.0 --
EBT, INCLUDING UNUSUAL ITEMS 1,635,168.0 2,759,456.0
Income Tax Expense 551,686.0 767,808.0
Minority Interest In Earnings -121,319.0 -168,529.0
Earnings From Continuing Operations 1,083,482.0 1,991,648.0
NET INCOME 962,163.0 1,823,119.0
NET INCOME TO COMMON INCLUDING
962,163.0 1,823,119.0
EXTRA ITEMS
NET INCOME TO COMMON EXCLUDING
962,163.0 1,823,119.0
EXTRA ITEMS

BALANCE SHEET OF TOYOTA MOTORS

In Millions of JPY (except for per share items) As of 2014-03-31 As of 2013-03-31

Cash & Equivalents 2,041,170.00 1,718,297.00
Short Term Investments 2,227,084.00 1,552,363.00
Cash and Short Term Investments 4,268,254.00 3,270,660.00
Accounts Receivable - Trade, Net - -
Receivables – Other - -

22
In Millions of JPY (except for per share items) As of 2014-03-31 As of 2013-03-31
Total Receivables, Net 8,016,348.00 7,522,012.00
Total Inventory 1,894,704.00 1,715,786.00
Prepaid Expenses 672,014.00 527,034.00
Other Current Assets, Total 866,386.00 749,398.00
Total Current Assets 15,717,706.00 13,784,890.00
Property/Plant/Equipment, Total – Gross 18,164,180.00 16,628,470.00
Accumulated Depreciation, Total -12,123,493.00 -11,372,381.00
Goodwill, Net - -
Intangibles, Net - -
Long Term Investments 9,194,821.00 7,279,865.00
Other Long Term Assets, Total 736,388.00 569,816.00
Total Assets 41,437,473.00 35,483,317.00
Accounts Payable 2,213,218.00 2,113,778.00
Accrued Expenses 2,313,160.00 2,185,537.00
Notes Payable/Short Term Debt 4,830,820.00 4,089,528.00
Current Port. of LT Debt/Capital Leases 2,949,663.00 2,704,428.00
Other Current liabilities, Total 2,373,824.00 1,819,249.00
Total Current Liabilities 14,680,685.00 12,912,520.00
Long Term Debt 8,546,910.00 7,320,521.00
Capital Lease Obligations - 17,303.00
Total Long Term Debt 8,546,910.00 7,337,824.00
Total Debt 16,327,393.00 14,131,780.00
Deferred Income Tax 1,811,846.00 1,385,927.00
Minority Interest 749,839.00 624,821.00
Other Liabilities, Total 1,179,045.00 1,074,190.00
Total Liabilities 26,968,325.00 23,335,282.00
Redeemable Preferred Stock, Total - -
Preferred Stock - Non Redeemable, Net - -
Common Stock, Total 397,050.00 397,050.00
Additional Paid-In Capital 551,308.00 551,040.00
Retained Earnings (Accumulated Deficit) 14,116,295.00 12,689,206.00
Treasury Stock – Common -1,123,666.00 -1,133,138.00
Other Equity, Total 528,161.00 -356,123.00
Total Equity 14,469,148.00 12,148,035.00
Total Liabilities & Shareholders' Equity 41,437,473.00 35,483,317.00
Shares Outs - Common Stock Primary Issue - -

23
In Millions of JPY (except for per share items) As of 2014-03-31 As of 2013-03-31
Total Common Shares Outstanding 3,169.77 3,167.43

FINANCIAL STATEMENT ANALYSIS OF TOYOTA

LIQUIDITY RATIO
Current Ratio = Current Assets/ Current Liabilities

=15,717,706 /14,680,685
= 1.07 times
Industrial Current Ratio = 1.26 times
Here the Current Ratio of Toyota is less than the Current Ratio of the Automobile Industry.
Quick Ratio = Quick Assets/ Current Liabilities
= 13,182,476/14,680,685
= .89 times
Industrial Quick Ratio = 1.02 times
Here the Quick Ratio of Toyota is less than the Quick Ratio of Automobile Industry. This
shows that the Liquidity of Toyota is not good when compared to its competitors in the automobile
sector

LEVERAGE RATIO
Debt Equity Ratio = Long term Debt/Shareholder funds
=8,546,910/14,469,148
= 59%
Industry Long Debt Equity
Ratio =26.83%
Here the Long Debt Equity Ratio of Toyota is greater than the Long Debt Equity Ratio of
Automobile Industry. This shows that the position of Toyota is good when compared to its
competitors in terms of Debt Equity ratio.
Debt Asset Ratio = Debt/ Total Assets
= 16,327,393/41,437,473
= 39.4%
Industry Debt Asset Ratio = 42.65%
Here the Debt Asset Ratio of Toyota is less than the Debt Asset Ratio of Automobile
Industry. Thus in terms of Debt Asset Ratio Toyota is not better than its competing companies

Proprietary Ratio =Shareholder funds/Total Asset

=14,469,148/41,437,473
=34.91%
Industry Proprietary Ratio =30.07%
Here the Proprietary Ratio of Toyota is greater than the Proprietary Ratio of the Automobile
Industry.

ACTIVITY RATIO
Stock Turnover Ratio = Cost of Goods Sold/Average Stock

24
 =19,988,245/1,894,704
=10.54 times
Industry STR =10.18 times
Here Stock Turnover Ratio of Toyota is almost equal to the Industry Stock Turnover Ratio
which shows that Toyota is good in terms of Stock Turnover Ratio.

PROFITABILITY RATIO
Net Profit Margin = Net profit/Sales
= 1,823,119/25,691,911
= 7.09%
Industry Net Profit Margin = 4.5%
Here the Net Profit Margin of Toyota is comparatively higher than the Net Profit Margin of
Automobile Industry.
Return on Assets = Net Profit/Total Assets
= 1,823,119/41,437,473
= 4.39%
Industry Return on Assets =4.28%
Here the Return on Assets of Toyota is almost equal to the Industry Return on Assets of
Automobile Industry.
Gross Profit Ratio = Gross Profit/Sales
= 4,890,772/25,691,911
=19.03%
Industry Gross Profit Ratio = 27.09%
The Gross profit Ratio of Toyota is less than the Gross Profit of Automobile Industry.

25
 Chapter 6

FINANCIAL ANALYSIS OF GENERAL MOTORS

INTRODUCTION
General Motors Company, commonly known as GM, is an American multinational
corporation headquartered in Detroit, Michigan, that designs, manufactures, markets and distributes
vehicles and vehicle parts and sells financial services. General Motors produces
vehiclesin37countriesunderthirteenbrands: Alpheon, Chevrolet, Buick, GMC, Cadillac, Holden, HSV
,Opel, Vauxhall, Wuling, Baojun, Jie Fang, UzDaewoo. General Motors holds a 20% stake in IMM,
and a 77% stake in GM Korea. It also has a number of joint-ventures, including Shanghai
GM, SAIC-GM-Wuling and FAW-GM in China, GM-AvtoVAZin Russia, Ghandhara Industries in
Pakistan, GM Uzbekistan, General Motors India, General Motors Egypt, and Isuzu Truck South
Africa. General Motors employs 212,000 people and does business in more than 120
countries.[1] General Motors is divided into five business segments: GM North
America (GMNA), Opel Group, GM International Operations (GMIO), GM South
America (GMSA), and GM Financial.
General Motors led global vehicle sales for 77 consecutive years from 1931 through 2007, longer
than any other automaker, and is currently among the world's largest automakers by vehicle unit
sales.
General Motors acts in most countries outside the U.S. via wholly owned subsidiaries, but operates
in China through 10 joint ventures.GM's On Star subsidiary provides vehicle safety, security and
information services.
In 2009, General Motors shed several brands, closing Saturn, Pontiac and Hummer, and emerged
from a government-backed Chapter 11 reorganization. In 2010, the reorganized GM made an initial
public offering that was one of the world's top five largest IPOs to date and returned to profitability
later that year.
The company was founded on September 16, 1908, in Flint, Michigan, as a holding company for
McLaughlin Car Company of Canada Limited and Buick, then controlled by William C.
Durant.[10] At the beginning of the 20th century there were fewer than 8,000 automobiles in America
and Durant had become a leading manufacturer of horse-drawn vehicles in Flint before making his
foray into the automotive industry.[11] GM's co-founder was Charles Stewart Mott, whose carriage
company was merged into Buick prior to GM's creation. Over the years Mott became the largest
single stockholder in GM and spent his life with his Mott Foundation which has benefited the city of
Flint, his adopted home. GM acquired Oldsmobile later that year. In 1909, Durant brought
in Cadillac, Elmore, Oakland and several others. Also in 1909, GM acquired the Reliance Motor
Truck Company of Owosso, Michigan, and the Rapid Motor Vehicle Company of Pontiac, Michigan,
the predecessors of GMC Truck. Durant lost control of GM in 1910 along with R. S. McLaughlin to
a bankers' trust, because of the large amount of debt taken on in its acquisitions coupled with a
collapse in new vehicle sales.
The next year, Durant started the Chevrolet Motor Car Company in 1911 in the U.S. in Canada in
1915 and through this he secretly purchased a controlling interest in GM. Durant took back control of
the company after one of the most dramatic proxy wars in American business history. Durant then
reorganized General Motors Company into General Motors Corporation in 1916 Merging General
Motors of Canada Limited as an ally in 1918. Shortly after, he again lost control, this time for good,

26
after the new vehicle market collapsed. Alfred P. Sloan was picked to take charge of the corporation
and led it to its post-war global dominance when the seven manufacturing facilities operated by
Chevrolet before GM acquired the company began to contribute to GM operations. These facilities
were added to the individual factories that were exclusive to Cadillac, Buick, Oldsmobile, Oakland,
and other companies acquired by GM. This unprecedented growth of GM would last into the early
1980s when it employed 349,000 workers and operated 150 assembly plants.
GM led global sales for 77 consecutive years from 1931 through 2007, longer than any other
automaker. In 2008, 2009 and 2010, GM has ranked as the second largest global automaker by sales.
The company regained its position as the world's largest automaker, by vehicle unit sales, in
2011.[8] GM filed for Chapter 11 bankruptcy in June 2009.

BALANCE SHEET OF GENERAL MOTORS COMPANY

In Millions of USD (except for per share items) As of 2014-12-31 As of 2013-12-31

Cash & Equivalents 18,954.00 20,021.00
Short Term Investments 9,222.00 8,972.00
Cash and Short Term Investments 28,176.00 28,993.00
Accounts Receivable - Trade, Net 25,606.00 22,813.00
Receivables – Other - -
Total Receivables, Net 25,606.00 22,813.00
Total Inventory 13,642.00 14,039.00
Prepaid Expenses - -
Other Current Assets, Total 16,246.00 15,656.00
Total Current Assets 83,670.00 81,501.00
Property/Plant/Equipment, Total – Gross 36,101.00 28,730.00
Accumulated Depreciation, Total -9,275.00 -7,429.00
Goodwill, Net 1,427.00 1,560.00
Intangibles, Net 4,983.00 5,668.00
Long Term Investments 8,350.00 8,094.00
Other Long Term Assets, Total 28,438.00 25,917.00
Total Assets 177,677.00 166,344.00
Accounts Payable 22,529.00 23,621.00
Accrued Expenses 16,891.00 16,085.00
Notes Payable/Short Term Debt 0.00 0.00
Current Port. of LT Debt/Capital Leases 14,988.00 14,158.00
Other Current liabilities, Total 11,293.00 8,548.00
Total Current Liabilities 65,701.00 62,412.00
Long Term Debt 30,885.00 21,060.00
Capital Lease Obligations 968.00 965.00
Total Long Term Debt 31,853.00 22,025.00
Total Debt 46,841.00 36,183.00
Deferred Income Tax - -
Minority Interest 567.00 567.00

27
In Millions of USD (except for per share items) As of 2014-12-31 As of 2013-12-31
Other Liabilities, Total 44,099.00 38,733.00
Total Liabilities 142,220.00 123,737.00
Redeemable Preferred Stock, Total - -
Preferred Stock - Non Redeemable, Net 0.00 3,109.00
Common Stock, Total 16.00 15.00
Additional Paid-In Capital 28,937.00 28,780.00
Retained Earnings (Accumulated Deficit) 14,577.00 13,816.00
Treasury Stock – Common - -
Other Equity, Total -8,070.00 -3,115.00
Total Equity 35,457.00 42,607.00
Total Liabilities & Shareholders' Equity 177,677.00 166,344.00
Shares Outs - Common Stock Primary Issue - -
Total Common Shares Outstanding 1,600.00 1,500.00
INCOME STATEMENT OF GENERAL MOTORS COMPANY

12 months
12 months ending 2013-
In Millions of USD (except for per share items) ending 2014-12-
12-31
31
Revenue 155,929.00 155,427.00
Other Revenue, Total - -
Total Revenue 155,929.00 155,427.00
Cost of Revenue, Total 142,121.00 137,373.00
Gross Profit 13,808.00 18,054.00
Selling/General/Admin. Expenses, Total 12,158.00 12,382.00
Research & Development - -
Depreciation/Amortization - -
Interest Expense(Income) - Net Operating - -
Unusual Expense (Income) -82.00 753.00
Other Operating Expenses, Total - -
Total Operating Expense 154,197.00 150,508.00
Operating Income 1,732.00 4,919.00
Interest Income(Expense), Net Non-Operating - -
Gain (Loss) on Sale of Assets - -
Other, Net 72.00 196.00
Income Before Tax 4,246.00 7,458.00
Income After Tax 4,018.00 5,331.00
Minority Interest -69.00 15.00
Equity In Affiliates - -
Net Income Before Extra. Items 3,949.00 5,346.00
Accounting Change - -
Discontinued Operations - -

28
 12 months
12 months ending 2013-
In Millions of USD (except for per share items) ending 2014-12-
12-31
31
Extraordinary Item - -
Net Income 3,949.00 5,346.00
Preferred Dividends - -
Income Available to Common Excl. Extra Items 2,804.00 3,770.00
Income Available to Common Incl. Extra Items 2,804.00 3,770.00
Basic Weighted Average Shares - -
Basic EPS Excluding Extraordinary Items - -
Basic EPS Including Extraordinary Items - -
Dilution Adjustment - 218.00
Diluted Weighted Average Shares 1,687.00 1,676.00
Diluted EPS Excluding Extraordinary Items 1.66 2.38
Diluted EPS Including Extraordinary Items - -
Dividends per Share - Common Stock Primary
1.20 0.00
Issue
Gross Dividends - Common Stock - -
Net Income after Stock Based Comp. Expense - -
Basic EPS after Stock Based Comp. Expense - -
Diluted EPS after Stock Based Comp. Expense - -
Depreciation, Supplemental - -
Total Special Items - -
Normalized Income Before Taxes - -
Effect of Special Items on Income Taxes - -
Income Taxes Ex. Impact of Special Items - -
Normalized Income After Taxes - -
Normalized Income Avail to Common - -
Basic Normalized EPS - -
Diluted Normalized EPS 2.02 3.33

FINANCIAL STATEMENT ANALYSIS OF GENERAL MOTORS COMPANY

LIQUIDITY RATIO

Current Ratio = Current Assets/ Current Liabilities

= 81501/62412
= 1.30times
Industrial Current Ratio = 1.26times
Here the Current Ratio of GM is greater than the Current Ratio of the Automobile Industry. This
shows that GM position is good in terms of Current Ratio.

Quick Ratio = Quick Assets/ Current Liabilities

= (81501-14039)/62412

29
 = 1.08 times
Industrial Quick Ratio = 1.02 times
Here the Quick Ratio of GM is greater than the Quick Ratio of Automobile Industry. This shows that
the Liquidity of GM is good when compared to its competitors in the automobile sector.

LEVERAGE RATIO

Long Debt Equity Ratio = Long term Debt/Shareholder funds

= 22025/42607
= 51.69%
Industry Long Debt Equity Ratio = 26.83%
Here the Long Debt Equity Ratio of GM is greater than the Long Debt Equity Ratio of Automobile
Industry. This shows that the position of GM is not good when compared to its competitors in terms
of Debt Equity ratio.

Debt Asset Ratio = Debt/ Total Assets

= 36183/166344
= 21.75%
Industry Debt Asset Ratio =42.65%
Here the Debt Asset Ratio of GM is lesser than the Debt Asset Ratio of Automobile Industry. Thus in
terms of Debt Asset Ratio GM are not better than its competing companies.

Proprietary Ratio =Shareholder funds/Total Asset

=35457/166344
=21.31%
Industry Proprietary Ratio =30.07%
Here the Proprietary Ratio of GM is lesser than to the Proprietary Ratio of the Automobile Industry.
Thus the Proprietary ratio of GM is more ideal.

ACTIVITY RATIO

Stock Turnover Ratio = Cost of Goods Sold/Average Stock

= 137373/14039
=9.78 times
Industry STR =10.18 times
Here Stock Turnover Ratio of GM is lesser than the Industry Stock Turnover Ratio which shows that
GM is not good in terms of Stock Turnover Ratio.

PROFITABILITY RATIO

Net Profit Margin = Net profit/Sales

= 5346/155427
= 3.43%
Industry Net Profit Margin = 4.5%. Here the Net Profit Margin of GM is comparatively lower
than the Net Profit Margin of Automobile Industry. Though Net Profit of GM is good, when
compared to its sales revenue it is less than the competitors which shows that the indirect expenses of
GM is high. Hence GM should look into reducing the unnecessary indirect expenses.

30
Return on Assets = Net Profit/Total Assets
= 5346/166344
= 3.21%
Industry Return on Assets =4.28%
Here the Return on Assets of GM is lesser than the industrial average Return on Assets. Thus GM is
not getting more return from its assets when compared to its competitors.

Gross Profit Ratio = Gross Profit/Sales

= 18054/155427
=11.61%
Industry Gross Profit Ratio = 27.09%
The Gross profit Ratio of GM is lesser than the Gross Profit of Automobile Industry. Thus GM is
comparatively not better than its competitors in achieving more gross profits from its sales.

31
 Chapter 7
FINANCIAL ANALYSIS OF FORD
INTRODUCTION
Industry: - Automotive
Founded: - October 1995 (as Mahindra Ford India Limited)
Headquarters:-Chengalpattu, Kanchipuram district, Tamil Nadu[1]
Nigel Harris: - President, Ford India
Products: - Automobiles
Number of employees: - 10,000
Slogan: - Make Every Day Exciting
Website: - www.india.ford.com
Ford India Private Limited is a wholly owned subsidiary of the Ford Motor Company in India. Ford
India Private Limited's headquarters are in Chengalpattu, Chennai, Tamil Nadu. It currently is the
sixth largest car maker in India after Maruti Suzuki, Hyundai, Tata, Mahindra and Chevrolet. FIPL's
main manufacturing plant located in Maraimalai Nagar, 45 km from Chennai has a capacity to
produce 150,000 cars on a two-shift basis and 200,000 with three shifts. In 2010-11, the company's
production crossed the 100,000 mark. As its new hatchback Figo was launched in March 2010,Ford
Motor Company has invested $500 million to double capacity of the plant to 200,000 vehicles
annually and setting up a facility to make 250,000 engines annually.The engine plant opened for
operations in January 2010.To meet the growing domestic demand and with an eye on engine
exports, the company has invested $72 million to raise engine production capacity to 330,000
units.The company is rolling out the urban SUV Ford EcoSport in June 2013. It had announced a
$142-million investment on this. With Ford EcoSport, the Chennai plant will ramp up to full capacity
(200,000 units). Last year, production touched 127,000 units.As part of its plan to launch 8 new
vehicles by 2015, the car maker is pumping in an investment of $1 billion for a news state-of-the-art
manufacturing plant at Sanand, Gujarat. The plant is coming up on 460 acre site. It will have an
initial installed capacity to manufacture 2,70,000 engines and 2,40,000 vehicles a year. Coming up
alongside the plant is the supplier park spread across 150 acres and the company has attracted 19
world-class supplier manufacturers to date. The plant is expected to commence production by 2014.

BALANCE SHEET OF FORD INDIA

Balance Sheet of Ford India for the year endings March ’13 and March ‘12
Mar '13 Mar '12
12 mths 12 mths
Sources Of Funds
Total Share Capital 39.94 39.94
Equity Share Capital 39.94 39.94
Share Application Money 0 0
Preference Share Capital 0 0
Reserves 5,559.93 4,966.30
Networth 5,599.87 5,006.24
Secured Loans 0 302.16
Unsecured Loans 0 0
Total Debt 0 302.16

32
Total Liabilities 5,599.87 5,308.40
Application Of Funds
Gross Block 3,761.52 4,427.29
Less: Revaluation Reserves 0 0
Less: Accum. Depreciation 1,518.27 1,356.31
Net Block 2,243.25 3,070.98
Capital Work in Progress 854.11 62.09
Investments 4,088.77 3,623.83
Inventories 669.55 636.76
Sundry Debtors 920.58 665
Cash and Bank Balance 117.5 181.04
Total Current Assets 1,707.63 1,482.80
Loans and Advances 1,203.54 1,401.95
Fixed Deposits 0 0
Total CA, Loans & Advances 2,911.17 2,884.75
Deferred Credit 0 0
Current Liabilities 2,903.12 2,893.39
Provisions 1,594.31 1,439.86
Total CL & Provisions 4,497.43 4,333.25
Net Current Assets -1,586.26 -1,448.50
Miscellaneous Expenses 0 0
Total Assets 5,599.87 5,308.40

Contingent Liabilities 487.63 502

Book Value (Rs) 280.43 250.7
Mar '13 Mar '12
FINANCIAL STATEMENT ANALYSIS OF FORD

LIQUIDITY RATIO

Current Ratio = Current Assets/ Current Liabilities

= 17453/14325
= 1.21
Quick Ratio = Quick Assets/ Current Liabilities
= 14329/14325
= 1.0002
LEVERAGE RATIO

Long Debt Equity Ratio = Long term Debt/Shareholder funds

= 1542/10631
= 15%
Debt Asset Ratio = Debt/ Total Assets
= 15113/31542
= 47.91%
Proprietary Ratio =Shareholder funds/Total Asset
=10631/31542
=33.7%

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ACTIVITY RATIO

Stock Turnover Ratio = Cost of Goods Sold/Average Stock

= 51753/2964
=17.46 times

PROFITABILITY RATIO

Net Profit Margin = Net profit/Sales

= 2314/31542
= 7.03%
Return on Assets = Net Profit/Total Assets
= 2314/31542
= 7.3%
Gross Profit Ratio = Gross Profit/Sales
= 11365/31542
=33.4%

34
 Chapter 8
FIANANCIAL ANALYSIS OF VOLVO

INTRODUCTION
About the Volvo Group (1927 By Assar Gabrielsson & Gustav Larson)

The Volvo Group is a Swedish multinational automobile manufacturing company headquartered

in Gothenburg.

The Volvo Group is one of the world’s leading manufacturers of trucks, buses, construction
equipment and marine and industrial engines.

The Group also provides complete solutions for financing and service.

The Volvo Group, which employs about 110,000 people, has production facilities in 18 countries
and sells its products in more than 190 markets.

Report on the fourth quarter 2014

Fourth quarter Year
2014 2013 2014 2013
Net sales, SEK M 77,480 76,642 282,948 272,622
Operating income excl. restructuring charges, SEK M (1,429) 1,577 8,393 7,854
Operating margin excl. restructuring charges, % (1.8) 2.1 3.0 2.9
Restructuring charges, SEK M (830) (581) (2,569) (715)
Operating income, SEK M (2,258) 996 5,824 7,138
Operating margin, % (2.9) 1.3 2.1 2.6
Income after financial items, SEK M (2,286) 237 5,089 4,721
Income for the period, SEK M (2,984) 548 2,235 3,802
Diluted earnings per share, SEK (1.46) 0.24 1.03 1.76

35
Operating Cash Flow in Industrial Operations, SEK bn 10.6 10.3 6.4 1.5
Return on shareholders' equity, rolling 12 months, % 2.8 5.0

Net order intake, number of trucks 61,222 52,683 219,791 214,301

Net order intake, number of construction equipment 12,056 18,055 60,575 71,408

CONSOLIDATED INCOME STATEMENT

Industrial operations Customer Finance Eliminations Volvo Group Total

SEK M 2014 2013 2014 2013 2014 2013 2014 2013
Net sales 275,999 265,420 10,111 9,539 (3,162) (2,337) 282,948 272,622
Cost of sales (217,251) (209,307) (5,923) (5,534) 3,162 2,337 (220,012) (212,504)
Gross income 58,748 56,113 4,188 4,005 - - 62,937 60,118
Research and development
Expenses (16,656) (15,124) - - - - (16,656) (15,124)
Selling expenses (25,778) (26,904) (1,670) (1,602) - - (27,448) (28,506)
Administrative expenses (5,367) (5,824) (41) (38) - - (5,408) (5,862)
Other operating income and
Expenses (6,931) (2,710) (766) (843) - - (7,697) (3,554)
Income (loss) from investments in
joint ventures and associated
Companies 46 96 - - - - 46 96
Income from other investments 49 (31) 1 - - - 50 (30)
Operating income 4,111 5,616 1,712 1,522 - - 5,824 7,138
Interest income and similar credits 328 381 - - - - 328 381
Interest expense and similar
Charges (1,994) (2,810) - - - - (1,994) (2,810)
Other financial income and
Expenses 931 11 - - - - 931 11
Income after financial items 3,377 3,199 1,712 1,522 - - 5,089 4,721
Income taxes (2,287) (451) (568) (468) - - (2,854) (919)
Income for the period* 1,091 2,748 1,145 1,054 - - 2,235 3,802
*Attributable to:
Equity holders of the parent 2,099 3,583
Minority interests 136 219
2,235 3,802
Basic earnings per share, SEK 1.03 1.77
Diluted earnings per share, SEK 1.03 1.76

Key operating ratios

Gross margin, % 21.3 21.1 - - - - 22.2 22.1
Research and development
expenses in % of net sales 6.0 5.7 - - - - 5.9 5.5
Selling expenses in % of net sales 9.3 10.1 - - - - 9.7 10.5
Administrative expenses in % of net
Sales 1.9 2.2 - - - - 1.9 2.2
Operating margin, % 1.5 2.1 - - - - 2.1 2.6

CONSOLIDATED BALANCE SHEET

Industrial operations Customer Finance Eliminations Volvo Group Total
Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31
SEK M 2014 2013 2014 2013 2014 2013 2014 2013
Assets
Non-current assets
Intangible assets 37,010 36,479 105 109 - - 37,115 36,588
Tangible assets
Property, plant and equipment 55,087 52,146 94 87 - - 55,181 52,233
Assets under operating leases 19,484 17,013 17,872 13,714 (6,138) (5,055) 31,218 25,672

36
Financial assets
Investments in joint ventures and associated
companies 4,821 4,377 - - - - 4,821 4,377
Other shares and participations 5,004 1,944 13 6 - - 5,017 1,950
Non-current customer-financing receivables 1,205 727 51,380 49,466 (1,254) (6,401) 51,331 43,792
Deferred tax assets 15,022 12,326 809 840 - - 15,831 13,166
Prepaid pensions 126 11 - 11 - - 126 22
Non-current interest-bearing receivables 1,041 550 22 34 378 (104) 1,441 480
Other non-current receivables 3,528 3,017 150 128 (165) (208) 3,513 2,937
Total non-current assets 142,328 128,590 70,445 64,395 (7,179) (11,768) 205,594 181,217
Current assets
Inventories 45,364 40,964 169 189 - - 45,533 41,153
Current receivables
Customer-financing receivables 623 679 48,063 40,854 (850) (1,464) 47,836 40,069
Tax assets 2,918 1,692 496 57 - - 3,414 1,749
Interest-bearing receivables 1,736 1,645 345 473 (968) (1,209) 1,113 909
Internal funding 4,374 2,256 - - (4,374) (2,256) - -
Accounts receivable 30,495 29,170 400 245 - - 30,895 29,415
Other receivables 13,950 12,207 1,984 1,383 (1,265) (936) 14,669 12,654
Non interest-bearing assets held for sale 288 8,102 - - - - 288 8,102
Interest-bearing assets held for sale - 2 - - - - - 2
Marketable securities 6,927 2,570 385 21 - - 7,312 2,591
Cash and cash equivalents 24,178 25,660 2,470 1,679 (406) (371) 26,242 26,968
Total current assets 130,853 124,947 54,312 44,901 (7,863) (6,236) 177,302 163,612
Total assets 273,181 253,537 124,757 109,296 (15,042) (18,004) 382,896 344,829

Equity and liabilities

Equity attributable to the equity holders of the
parent company 68,382 67,134 9,943 8,906 - (8) 78,325 76,032
Minority interests 1,723 1,333 - - - - 1,723 1,333
Total equity 70,105 68,467 9,943 8,906 - (8) 80,048 77,365
Non-current provisions
Provisions for post-employment benefits 16,580 12,249 103 73 - - 16,683 12,322
Provisions for deferred taxes 201 324 2,595 2,082 - - 2,796 2,406
Other provisions 12,463 6,005 231 183 46 2 12,740 6,190
Non-current liabilities
Bond loans 68,877 46,585 - - - - 68,877 46,585
Other loans 27,395 31,219 13,013 12,182 (1,254) (6,537) 39,154 36,864
Internal funding (59,955) (34,027) 42,997 35,761 16,958 (1,734) - -
Other liabilities 17,549 14,315 607 665 (4,424) (3,503) 13,732 11,477
Current provisions 12,390 11,246 76 58 7 - 12,473 11,304
Current liabilities
Loans 32,130 46,806 9,266 6,705 (1,443) (1,959) 39,953 51,552
Internal funding (20,267) (38,090) 42,002 39,659 (21,735) (1,569) - -
Non interest-bearing liabilities held for sale 130 332 - - - - 130 332
Interest-bearing liabilities held for sale - 18 - - - - - 18
Trade payables 56,351 53,685 296 216 - - 56,647 53,901
Tax liabilities 2,558 1,072 135 48 - - 2,693 1,120
Other liabilities 36,674 33,331 3,493 2,758 (3,197) (2,696) 36,970 33,393
Total equity and liabilities 273,181 253,537 124,757 109,296 (15,042) (18,004) 382,896 344,829
Key ratios, %
Total equity as percentage of total assets 25.7 27.0 8.0 8.1 - - 20.9 22.4
Shareholders' equity per share, excluding
minority interests, SEK - - - - - - 38.6 37.5
Return on operating capital, 12 months rolling
values 4.5 5.9 - - - - - -
Return on shareholders' equity, 12 months
rolling values - - 12.5 12.1 - - 2.8 5.0
Financial Statement Analysis of Volvo

Liquidity Ratio
Current Ratio = Current Assets/ Current Liabilities

37
 = 177302/136393
= 1.29
Quick Ratio = Quick Assets/ Current Liabilities
= 131769/136393
= .966
Leverage Ratio

Long Debt Equity Ratio = Long term Debt/Shareholder funds

= 108031/82283
= 1.31
Debt Asset Ratio = Debt/ Total Assets
= 244424/382896
= 63.83%
Proprietary Ratio =Shareholder funds/Total Asset
=82283/382896
=21.48%
Activity Ratio

Stock Turnover Ratio = Cost of Goods Sold/Average Stock

= 192564/43343
=4.42 times
Profitability Ratio

Net Profit Margin = Net profit/Sales

= 2235/282948
= .78%
Return on Assets = Net Profit/Total Assets
= 2235/382896
= .5%
Gross Profit Ratio = Gross Profit/Sales
= 62937/282948
=22.24%

38
 Chapter 9
FINANCIAL ANALYSIS OF HERO

INTRODUCTION
Hero Motocorp Ltd., (formerly Hero Honda), is an Indian two wheeler manufacturing company.
Its headquarters is in New Delhi, India. It is the largest two wheeler manufacturer in the world.
In India, it has a market share of about 46% share in 2-wheeler category. Hero Honda started in
1984 as a joint venture between Hero Cycles of India and Honda of Japan. Areas served by the
company include India, Sri Lanka and Nepal. In 2010, Honda decided to move out of the joint
venture then Hero Group bought the shares held by Honda and, in August 2011 the company was
renamed Hero MotoCorp with a new corporate identity. Its current Chairman is Dr. Brijmohan
Lall Munjal, and MD & CEO is Pawan Munjal. It is traded as BSE: 500182 in BSE; NSE:
HEROMOTOCO in NS Hero MotoCorp has four manufacturing facilities based
at Dharuhera, Neemran and Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants
together have a production capacity of 7.6 million 2-wheelers per year. Read More Hero
MotoCorp has a sales and service network with over 6,000 dealerships and service points across
India. It has a customer loyalty program since 2000, called the Hero Honda Passport Program
which is now known as Hero GoodLife Programe.
Product range includes Sleek, Street, Achiever, Ambition 133, Ambition 135, CBZ, CBZ Star,
CBZ Xtreme, Hero New Xtreme 2014, CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD
Deluxe, New HF Dawn,New HF Deluxe, HF DELUXE ECO, Glamour, Glamour F.I., Hunk,
Karizma, Karizma R, Karizma ZMR FI, Passion, Passion Plus, Passion Pro, Passion XPro, New
Passion Pro TR, Splendor, Splendor+, Splendor+ (Limited Edition), SuperSplendor, Splendor
NXG, Splendor PRO, Splendor [iSmart],Splendor Pro Classic, Hero Impulse, Hero Ignitor, and
Hero HX250r and in scooter segment pleasure, and maestro.
Balance Sheet of Hero Motocorp for the year endings March ’14 and March ‘13
Mar '14 Mar '13
12 mths 12 mths
Sources Of Funds
Total Share Capital 39.94 39.94
Equity Share Capital 39.94 39.94
Share Application Money 0 0

39
Preference Share Capital 0 0
Reserves 5,559.93 4,966.30
Networth 5,599.87 5,006.24
Secured Loans 0 302.16
Unsecured Loans 0 0
Total Debt 0 302.16
Total Liabilities 5,599.87 5,308.40
Application Of Funds
Gross Block 3,761.52 4,427.29
Less: Revaluation Reserves 0 0
Less: Accum. Depreciation 1,518.27 1,356.31
Net Block 2,243.25 3,070.98
Capital Work in Progress 854.11 62.09
Investments 4,088.77 3,623.83
Inventories 669.55 636.76
Sundry Debtors 920.58 665
Cash and Bank Balance 117.5 181.04
Total Current Assets 1,707.63 1,482.80
Loans and Advances 1,203.54 1,401.95
Fixed Deposits 0 0
Total CA, Loans & Advances 2,911.17 2,884.75
Deferred Credit 0 0
Current Liabilities 2,903.12 2,893.39
Provisions 1,594.31 1,439.86
Total CL & Provisions 4,497.43 4,333.25
Net Current Assets -1,586.26 -1,448.50
Miscellaneous Expenses 0 0
Total Assets 5,599.87 5,308.40

Contingent Liabilities 487.63 502

Book Value (Rs) 280.43 250.7
Mar '14 Mar '13

Profit & Loss account for the year endings March ’14 and March ‘13
Mar '14 Mar '13
12 mths 12 mths
Income
Sales Turnover 25,275.47 23,768.11
Excise Duty 0.00 0.00
Net Sales 25,275.47 23,768.11
Other Income 446.38 398.38
Stock Adjustments -8.36 0.00
Total Income 25,713.49 24,166.49
Expenditure
Raw Materials 18,320.46 17,470.73

40
Power & Fuel Cost 137.46 129.18
Employee Cost 930.04 820.92
Other Manufacturing Expenses 0.00 0.00
Selling and Admin Expenses 0.00 0.00
Miscellaneous Expenses 2,339.09 2,025.33
Preoperative Exp Capitalised 0.00 0.00
Total Expenses 21,727.05 20,446.16
Operating Profit 3,540.06 3,321.95
PBDIT 3,986.44 3,720.33
Interest 11.82 11.91
PBDT 3,974.62 3,708.42
Depreciation 1,107.37 1,141.75
Other Written Off 0.00 0.00
Profit Before Tax 2,867.25 2,566.67
Extra-ordinary items 0.00 0.00
PBT (Post Extra-ord Items) 2,867.25 2,566.67
Tax 758.17 411.04
Reported Net Profit 2,109.08 2,118.18
Total Value Addition 3,406.59 2,975.43
Preference Dividend 0.00 0.00
Equity Dividend 1,299.13 1,198.13
Corporate Dividend Tax 220.79 203.62
Per share data (annualised)
Shares in issue (lakhs) 1,996.88 1,996.88
Earning Per Share (Rs) 105.62 106.07
Equity Dividend (%) 3,252.70 3,000.00
Book Value (Rs) 280.43 250.70

Financial Statement Analysis of Hero Motocorp

Liquidity Ratio

Current Ratio = Current Assets/ Current Liabilities

= 0.65
Industrial Current Ratio = 1.253 times
Here the Current Ratio of HERO MOTOCORP is lesser than the Current Ratio of the
Automobile Industry. This shows that HERO MOTOCORP position is bad in terms of Current
Ratio.

Quick Ratio = Quick Assets/ Current Liabilities

= 0.48 times
Industrial Quick Ratio = 1.005 times
Here the Quick Ratio of HERO MOTOCORP is lesser than the Quick Ratio of
Automobile Industry. This shows that the Liquidity of HERO MOTOCORP is bad when
compared to its competitors in the automobile sector.

41
Leverage Ratio

Long Debt Equity Ratio = --

Industry Long Debt Equity
Ratio =36.17%

Debt Asset Ratio = Debt/ Total Assets

=0
Industry Debt Asset Ratio =42.645%
Here the Debt Asset Ratio of HERO MOTOCORP is a zero debt company.

Proprietary Ratio =Shareholder funds/Total Asset

=39.94/5,599.87
=0.7132%
Industry Proprietary Ratio =30.07%
Here the Proprietary Ratio of HERO MOTOCORP is less than the Proprietary Ratio of
the Automobile Industry.

Activity Ratio

Stock Turnover Ratio = Cost of Goods Sold/Average Stock

= 37.75
Industry STR =10.18 times
Here Stock Turnover Ratio of HERO MOTOCORP is greater than the Industry Stock
Turnover Ratio which shows that HERO MOTOCORP is good in terms of Stock Turnover Ratio

Profitability Ratio

Net Profit Margin = Net profit/Sales

= 8.19
Industry Net Profit Margin = 4.50%
Here the Net Profit Margin of HERO MOTOCORP is comparatively higher than the Net
Profit Margin of Automobile Industry. Effective the company is in converting revenue into
actual profit.
Return on Assets = Net Profit/Total Assets
= 20.34 %
Industry Return on Assets =4.28%
Here the Return on Assets of HERO MOTOCORP is higher than the industrial average
Return on Assets. Thus HERO MOTOCORP is getting more return from its assets when
compared to its competitors.

42
Gross Profit Ratio = Gross Profit/Sales
= 9.62%
Industry Gross Profit Ratio = 27.09%
The Gross profit Ratio of HERO MOTOCORP is lower than the Gross Profit of
Automobile Industry. Thus HERO MOTOCORP is comparatively not better than its competitors
in achieving more gross profits from its sales.

43