International Journal of Financial Management and Economics 2019; 2(1): 90-93

P-ISSN: 2617-9210
E-ISSN: 2617-9229
IJFME 2019; 2(1): 90-93 A case study of the financial performance of selected
Received: 11-11-2018
Accepted: 19-12-2018 four wheeler automobile companies in India
Sudarshan Kumar
Research Scholar, University Sudarshan Kumar
Department of Commerce &
Business Administration,
TMBU Bhagalpur, Bihar, Abstract
India The Indian automobile industry has performed incredible in present time. In today’s time, Indian
automobile industry provides varieties of cars and provides all models which available on the world
wide. When we are talking about the Indian automobile industry, which includes Maruti Suzuki, Tata
motors, Mahindra and Mahindra, Hyundai motors, Hero Honda and Hindustan motors to a number of
companies. In the early time, Indian automobile industry depends on foreign technology for their
growth, then after, Indian producers have started to produce their own equipment’s in India. On a
globe, the Indian automobile sector has 7th rank. Automobile industry experts forecast that in future, it
will be a huge rise in this sector. As an exporter of automobiles in India became a fourth position after
Japan, South Korea and Thailand. As per the thinking of experts in 2050 on Indian roads about 611
million cars which will be the highest in all over the world.

Keywords: Automobile industry, foreign technology, own equipment’s, highest, future

Introduction
Journey of the cars begun in the year 1898 when the first car rolled out on the roads of
Mumbai. The future of Indian automobile industry has very bright, so the well-known
automobile companies of the world had also come in the India to new heights. In September
2009, when global market was crashing at that time automobile industry of the India
performed tremendously well. At the present time, In Manufacturing of the small cars, India
is on top, 75% of automobile industry in India is manufacturing only small cars. Within 2 or
3 years, India will offer dozen of new brands and new models.

Types of Automobiles
The automobiles are categorized on the following basis:
1. Purpose
1. Passenger vehicle- car, jeep, bus
2. Good Vehicle- Truck

2. Capacity
1. Light motor vehicle- car, motorcycle, and scooter
2. Heavy Motor vehicle- Bus, Coach, tractor

3. Fuel used
1. Petrol vehicles – car, jeep, motorcycle, scooter
2. Diesel Vehicles- Truck, bus, tractor, bulldozer
3. Electric cab- Battery truck, fork lift, scooter
4. Stream carriage- stream road rollers

Corresponding Author: 4. No. of Wheels

Sudarshan Kumar 1. Two Wheeler
Research Scholar, University 2. Three Wheeler
Department of Commerce &
3. Four Wheeler
Business Administration,
TMBU Bhagalpur, Bihar, 4. Six Wheeler
India

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International Journal of Research in Finance and Management

Meaning of automobile industry possibly then more than half dozen automobile companies
The automobile industry is the companies which concerned making profit by way of it. Suzuki has already started to
to design, development, manufacturing, marketing and export thousands of cars to Europe and Middle East with the
selling of vehicles. This is the supreme sector to generate help of Maruti.
money. When it is automotive industry just not care of
automobiles, but such services like repairing of automobile Areas of financial performance analysis
shops and filling fuel places. Financial analysis concerned with profitability performance,
liquidity performance, working capital performance, fund
Recent trends in Indian automobile industry flow performance of any firm. GSRTC defines its financial
Indian automobile industry is the 7th largest at the world analysis from following ways:
level. As compared to past, Automobile industry has 1. Working capital analysis
developed its performance in all aspects. 2. Financial structure analysis
Some of the facts about automobile sector in India like - 3. Analysis of activities
 Largest market for three wheelers 4. Performance analysis
 Second in the world of selling two wheeler
 Tenth in marketplace of passenger vehicle Financial Statement
 Fourth on selling tractor Financial statements are the conclusions of the process of
 Fifth on market place for profitable vehicle financial accounting. These statements are presentation of
 Fifth on motor vehicle segment and transportation financial information. A financial statement is based on
logical and reliable data. The purpose of financial statement
Review of literature related to understanding about financial aspects of business
Khyati Jagatkumar Patel (2015) [16] The main objectives of entity. Financial statements based on two basic statements.
the study are to find out whether the automobile industry of 1. Income Statement
India has been able to generate value of its shareholders, to 2. Balance Sheet
calculate the performance of the company by applying ROI
and EVA, make a study on the overall performance of There are four statements which is in annual reports which
Indian automobile industry and give appropriate suggestions are as follows
for improving financial performance through EVA. 1. Profit and Loss Account
Chauhan Lalitkumar Rajanikant (2014) [13] The main 2. Spreadsheet
objectives of the study are understand about financial 3. Director’s reports
performance, get idea about present practice of financial 4. Speech by the President
statements as well as accounting practices, evaluate the
financial performance by way of deciding strength, liquid Objectives of the study
position, efficiency and further scope of the automobile 1. To study the origin and the growth of selected four
companies in India. wheeler automobile companies.
Suresh Chandra Padhy (2014) [14] The main objectives of the 2. To analyze the financial performance of the selected
study are the awareness of green marketing and its practices four wheeler automobile companies.
among automobile companies in pune and Aurangabad city, 3. To compare the financial position of the selected four
the extent of implementation of Green Marketing Practices wheeler automobile companies with the help of
among automobile companies, challenges faced by the technique of Ratio Analysis.
automobile companies while implementing green marketing 4. To make inter firm comparison of financial position of
and identify strategies adopted by automobile companies to the selected four wheeler automobile companies.
overcome on those challenges, benefits of green marketing 5. To derive conclusions and suggest measures for
practices opted by automobile companies to consumers and improving their financial performance.
manufacturers, the consumer’s awareness and preferences of
eco-friendly automobile products and effect of Green Research methodology
Marketing in the customer preferences. This study mainly base on secondary data collection through
Vipulkumar A. Pandya (2011) [15] “A Comparative Analysis the sources like annual reports of the automobile companies
of Liquidity & profitability of Indian Car Industry” The and profile of the companies. Thus the information collected
main objectives of the study are to find out the liquidity is further tabulated and interpreted and necessary suggestion
position and analysis of the liquidity as well as profitability has been made on the basis of the analysis.
and make suggestions for the financial viability. The study
is from 2005-06 to 2009-10. In the study, there are four Data Collection
players of the automobile industry like Maruti Suzuki Ltd., Primary Data
Tata Motors, Hindustan Motors and Mahindra & Mahindra Researcher had collected necessary information on internal
respectively. financial audit from the financial department of public and
Viswanathan Krishnan (1999) [12] The Indian automobile private ltd. Researcher had also collected data by personal
industry growing rapidly. Currently, the projections of joint interview with financial manager.
venture for production plans are very high and import price
decreasing quickly and the economy grows tremendously. Secondary data
Currently 20 firms thinking about India to make as a base Researcher had also collected secondary information from
country for production as well as market capturing. If it will published literature our area of the proposed study.

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International Journal of Research in Finance and Management

Published literature such as annul reports of the different 1. Time: from value divided the another value, what you
companies, reference book, national and international get in unit that called “Times”. For example, if 50
journals, magazines, newspapers and other published students in a class, 40 are present, the ratio can be
sources would be utilized to collect relevant and useful expressed as : 40/50 = 0.80 times
secondary data. 2. Percentage: if proportion was multiplied by 100, then
what we get called “percentage”. For example, if the
Ratio analysis above same example then present students in the class
Ratios are shown in a mathematical ways in figures which are 0.8 x 100 = 80%
link in a particular way.
Ratio analysis was one type of accounting tool which Accounting reports concerned with a mathematical
present in simple, readable, comprehensible and concise relationship of accounting data.
manner. There are two ways to express reports:

Table 1: Asset turnover ratio of selected four wheeler automobile companies in India during the period from 2005-06 to 2014-15

Graph 1: Asset turnover ratio of selected four wheeler automobile companies in India during the period from 2005-06 to 2014-15

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International Journal of Research in Finance and Management

Period of the study Analysis of Liquidity& profitability of Indian Car

The study is mainly confined with the financial performance Industry”, Saurashtra university, November. 2011, 51-
of selected automobile companies. The annual reports of the 77.
companies have been study for consecutive ten years from 16. Patel Khyati J. Thesis on A study of economic value
2005-06 to 2014-15. added based performance measurement of selected
automobile companies in India, Sardar Patel University,
Conclusion 2015 February, 65-72.
This research will be useful for the automobile companies,
the government of India, potential customers and for further
research on automobile industry. A comparative picture
shows 10 selected automobile companies that Audi India
Private Limited, Maruti Suzuki India Limited, Mercedes
Benz India Private Limited, Renault India Private Limited
and Nissan Motors India Private Limited have registered
tremendous financial performance in relation to other
selected automobile companies during the period of 2005-06
to 2014-15.Toyota Automobile Company Limited, Hyundai
Motor India Limited and Ford India Private Limited have
low performance during the study period because of total
expenses, capital reserve, profit after tax, Non-current
liabilities, current liabilities and interest expenses were not
show good sign. so these automobile companies must
improve profit after tax, total income, capital reserve and
reduce their expenses for better performance. Management
policy and strategy of automobile companies took major
role in enhancement of financial performance.

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