Financial Analysis Of Tvs Motor Co. Ltd.

Presented by: Piyush Jain



Financial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationships between the items of the balance sheet and the profit & loss A/c.



Financial analysis can be undertaken by management of the firm, or by parties outside the firm i.e. owners, creditors, investors and others.

Sales Analysis of TVS motor co ltd.

Capital Structure Analysis

Working Capital Analysis

Shareholding Pattern

 Ratio

analysis is a powerful tool of financial analysis. It can be used to compare the risk & return relationships of firms of different sizes.



Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is done by comparing a company's most liquid assets(or, those that can be easily converted to cash), its short-term liabilities.



In general, the greater the coverage of liquid assets to short-term liabilities the better as it is a clear signal that a company can pay its debts that are coming due in the near future and still fund its ongoing operations. On the other hand, a company with a low coverage rate should raise a red flag for investors as it may be a sign that the company will have difficulty meeting running its operations,

as

well

as

meeting

its

obligations.



Current ratio indicates the availability of current assets in rupees for every one rupee of current liability. So we can see that over 5 years the current ratio has increased from unsatisfactory level of 0.94 to satisfactory level of 1.37



Quick ratio shows the relationship between liquid asset & current liabilities. It is also measure of short term solvency. So we can see that the quick ratio of co. is not satisfactory as they are short with their assets to pay of the liabilities as in all 5 years the quick ratio < 1.



Cash Ratio shows the Companies abilities to meet its short term obligations out of Cash Balance or assets equivalent to cash

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Leverage ratio shows the proportions of debt and equity in financing the firm’s assets.



These ratios can be used to determine the overall level of financial risk a company and the firm’s ability of using debt to shareholder’s advantage.



Efficiency ratio reflect the firm’s efficiency in utilizing its assets.



These ratios look at how well a company turns its assets into revenue as well as how efficiently a company converts its sales into cash. Basically, these ratios look at how efficiently and effectively a company is using its resources to generate sales and increase shareholder value. In general, the better these ratios are, the better it is for shareholders.

 Profitability

ratios

measure

overall

performance and effectiveness of the firm

in

generating

profit,

and

are

calculated by establishing relationships between sales and assets on the other.