ABSTRACT

Financial ratio analysis is the process of reviewing the financial position of the company.
Ratio analysis is extensively used by firms as a technique to forecast the financial soundness
of the company to build future growth. This study aims at analyzing the financial
performance of Tata Motors and Maruti Suzuki by calculating financial ratios. The primary
objective of this study is to evaluate the performance of Tata Motors and Maruti Suzuki
during the last 5 years. The reference period taken for study is 5 years starting from 2019 to
2024.Ratios like Current ratio, liquid ratio debt equity ratio, interest coverage ratio and gross
profit ratio were calculated to serve the purpose of assessing the financial performance of the
company. Further trend analysis and comparative income statement were also analyzed.
Secondary data was collected from annual reports of Tata Motors and Maruti Suzuki to derive
relevant information. The results reveal that the company has performed reasonably well
during the reference period. The company has shown a good potential by earning returns for
their shareholders.
 Chapter – I
INTRODUCTION

This chapter introduces the thesis of “A COMPARATIVE STUDY ON FINANCIAL

PERFORMANCE ANALYSIS OF TATA MOTORS LTD AND MARUTI SUZUKI
LTD”. The introduction provides an overview about financial statement analysis, and
explores the necessity of financial analysis. Further this chapter states the objectives,
significance, scope, research gap, and limitations of the study.

FINANCIAL PERFORMANCE: AN OVERVIEW

Every business organization, be it manufacturing or service oriented,needs finance for

carrying on its activities. Even if the organization possesses sufficient money to support its
activities, the success of the business depends on how well the management utilizes them, funds
its capital and how efficiently it operates out of the invested capital to generate profits.
Financial performance analysis is the process of interpreting the firm’s financial statement (i.e.
Profit & Loss a/c, Balance Sheet, Cash Flow Statement, Fund Flow Statement etc) to determine
the financial operations and characteristics of a firm. It gives an insight into the efficiency and
performance of the firm’s financial management. Financial analysis is a management tool used
by the analysts, executives and investors in evaluating the comprehensive position of the
company. By consolidating the financial statements, it gives in depth analysis about the liquidity
position, long term solvency, financial viability and profitability of a firm. Ratio analysis shows
whether the firm is escalating or deteriorating in the past financial years.Comparison of
numerous financial aspects according to the needs of executives or investors can be done
effectively.
FINANCIAL STATEMENTS:

Financial statements are formal records prepared by the company’s

management to depict a clear picture of its financial performance and position at a point of
time. They stand as the principal method of communicating the business information of an
entity to the outsiders. Technically, financial statements are a summation of financial position
of an entity over a period of time. Generally, financial statements are prepared to meet the
needs of present and potential owners and creditors. Publicly traded companies are also
required to present these statements along with others to regulatory agencies in a timely
manner. AICP (American Institute of Certified Public Accountants) says “financial
statements are prepared for the purpose of presenting a periodical review or report on the
progress by the management and deal with (i) the status of Investments in the business and
(ii) the results achieved during the period under review”. The basic financial statements of
an enterprise include (i) balance sheet (ii) income statement (iii) cash flow statement (iv)
statement of changes in owner’s equity. Balance sheet is a snapshot of financial position of
an entity, listing all the assets on one side and liabilities on the other side. The income
statement presents a summary of the revenues, gains, expenses, losses and net income or net
loss of an entity for a specified period. The cash flow statement 13 summarises cash receipts
and cash payments relating to its operating, investing, financing activities during a particular
period. A statement of changes in equity reconciles the opening balance of equity with its
closing balance. Notes to financial statements disclose additional and detailed information
about the various items listed in the financial statements.
 OBJECTIVES OF FINANCIAL ANALYSIS:

The primary objective of financial statement analysis is to comprehend the information

contained in the statement analysis inorder to view the profitability and fiscal strength of the
firm and to forecast the potential future prospects. Some of the objectives are as follows

1. Assessment of current position: The management will want to know whether the
enterprise is heading towards as per plan or lagging in their targets. Frequent recording of
the financial transactions helps them to identify their fiscal position.

2. Assessment of past performance: By having information about the past financial

performance of the business, the management can identify their discrepancies, where they
lagged etc. This inturn will help the management to be precocious while making similar
decisions in the future. The investors can get possible indicators of future performance
and invest accordingly.

3. Future decision making: quarterly, half-yearly and annual financial statement helps to
execute plans in a better way. Its objective is to assess and predict the earning prospects
with reliable information so as to help the executives/investors to make better decisions.

4. Assessment of operational efficiency: financial statements helps to understand the

operations of the firm and determine its efficiency. The calculated financial performance
can be compared with the standards set earlier. Any difference or deviation between them
and the actual performance can be used as the indicator of efficiency management
SIGNIFICANCE OF FINANCIAL ANALYSIS:

Importance to management: The management needs up-to date, accurate and structured
financial data for interpretation of operations of the company. Financial statements assist the
management in comprehending the progress, prospects, and position of the business
counterpart in the industry. It helps to identify whether the resources of the firm were utilized
effectively, to determine the fiscal strength of the firm and to forecast the future prospects of
the enterprise. Any discrepancies can be dealt with by structuring new policies and plans
according to the result of the analysis.

Importance to stock exchange: the value of shares and debentures being traded in the
stock exchange are determined on the basis of financial/fiscal position and credit worthiness of
the company. The financial statements give accurate and reliable information to fix the price
for shares and debentures.

Importance to the stakeholders: The stakeholders cannot be present in the day-day

operations of the business. However, they need to be updated with the firm’s financial
position in order to review it. The management prepares the analysis to present it to the
stakeholders in the annual general meeting so as to make them aware of the firm’s fiscal
standards. After evaluating the financial statements, the investors/stakeholders can make
sound decisions for their future investment strategies.

Importance to bankers: By analyzing the financial statement of a company, the bankers can
assess the ability of the enterprise to meet its obligations, short term and long term solvency,
credit worthiness, earring capacity etc. the borrowing capacity can be identified and the extent
of loan can be fixed by the banker after evaluating the financial statement.
TECHNIQUES OR TOOLS OF FINANCIAL STATEMENT ANALYSIS:

The most essential techniques used for analyzing and interpreting the financial statements are
as follows:

(i) Ratio Analysis:

An analysis of financial statements based on ratios is known as ratio analysis. A ratio is a

mathematical relationship between two or more items taken fro the financial statements. Ratio
analysis is the process of computing, determining and presenting the relation of items. It also
included comparison and interpretation of ratios and using them as basis for the future
projections. The ratios can be calculated easily but they
 need to be analysed and interpreted appropriately to render meaningful results. Several ratios
can be computed, however the analyst has to compute the most essential ratios that would
render the desired objective.

Steps involved in Ratio Analysis:

➢ The first step in ratio analysis is to gather relevant information from financial statements
and calculate appropriate ratios required for decision under consideration.
➢ The next step is to compare the calculated ratios with the past ratios and industry ratios in
order to assess the relative meaning.
➢ The final step is to interpret the significance of various ratios, draw inferences and write a
report. The report may contain specific action in matter of the decision situation or may
present alternatives with comparative merits or it may just state facts and interpretations.

Advantages of Ratio Analysis:

➢ Ratios reveal the trends in costs, sales, profit and other inter-related facts, which will be
helpful in forecasting future events.
➢ The analyzed ratios can be used as “instrument of control” regarding sales, costs and profit.
➢ Ratios help to determine the operational efficiency by comparison of present ratios with
those of the past working and industry ratios.
➢ Ratios facilitates the investment decisions by computing the return on investment which in
turn helps the management in taking effecting decisions regarding profitable avenues of
investment.
 LIMITATION OF THE RATIO ANALYSIS:

➢ A single ratio may not provide meaningful sense, for better understanding a number
of ratios need to be calculated, which may lead to confusion.
➢ There are no standard norms for calculating ratios; hence the interpretation may
become difficult.
➢ Each firm follows its own accounting procedure; hence comparison between the firms
may not yield accurate results.
➢ Moreover past ratios may not be effective for future decision making.
➢ Price level changes are not considered while computing ratios; therefore it makes
the ratio interpretation invalid.

➢
(ii) Trend analysis
The process of reviewing and analyzing historical data to identify patterns, trends, or future
possibilities. It involves looking at data over time to understand changes, make informed
predictions, and strategize for the future. This technique is widely used in various fields, including
business, finance, technology, and social sciences.

Advantages of Trend Analysis

1. Informed Decision-Making: Helps organizations and individuals make data-driven
decisions by identifying market or behavioral trends.
2. Future Planning: Assists in forecasting future performance, whether it's in sales, growth, or
user behavior.
3. Problem Identification: Allows the detection of declining performance or emerging issues
early on.
4. Competitive Advantage: Enables businesses to stay ahead by adapting to market changes
faster than competitors.
5. Cost Efficiency: Helps allocate resources efficiently by focusing on areas likely to yield the
best results.
Limitations of Trend Analysis
1. Dependence on Historical Data: It relies on past data, which may not always predict future
trends accurately, especially in rapidly changing environments.
2. Ignores Qualitative Factors: It primarily focuses on numerical data and may overlook
qualitative factors like customer sentiments or market conditions.
3. Short-Term Focus: Trend analysis often identifies short-term patterns and may miss long-
term changes or developments.
4. Prone to Misinterpretation: Trends can sometimes be misleading if the data sample is too
small or if external variables are ignored.
5. Vulnerability to Outliers: Outliers or unusual data points can distort results and lead to
incorrect conclusions.
6. Inability to Handle Sudden Changes: Unexpected events like economic crises or natural
disasters can disrupt trends, making the analysis less reliable.
7. Complexity: For large datasets with multiple influencing factors, trend analysis can become
complex and require advanced statistical tools.

LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS:

Based on past data: only the past data of the firms are included in the financial statements,
which are then further analyzed. The future cannot be just like the past. So, the analysis of future
estimation cannot be taken literally for forecasting, future budgeting and planning. It can,
however, be considered as a precaution.

Problem in comparability: The size of the business concern can be varying according to their
volume of transactions. Hence the figures of different financial statements and different firms
lose the characteristic of comparability. So the analyst must choose the statements accordingly
for comparison.

Reliability: Very rarely, in some companies, the financial managers tweak and manipulate the
financial statements to make it look profitable to show favorable results.
Data Availability: The study relies on publicly available financial reports, which may not
provide complete insights into the companies' internal financial policies or undisclosed
information.

Time Frame: The analysis is restricted to a specific period (mention the years, e.g., 2019–
2024). Any conclusions drawn may not apply beyond this period.

Accounting Policies: Differences in accounting policies and practices followed by Tata Motors
and Maruti Suzuki may affect the comparability of financial data.

Non-Financial Factors: The study mainly focuses on financial metrics, neglecting qualitative
factors like customer satisfaction, employee satisfaction, market share, brand value, etc.
 CHAPTER II
REVIEW OF LITERATURE

1. Shaikh Salman Masood (2020) in his study Financial Statement Analysis of Tata Motors
Limited carried out for the period 2017, 2018, 2019 has noticed abnormal amounts of
debt of tata motors and pointed out their lack of ability to pay contractual payments. Out
of the 3 financial years, 2017 had the highest quick and current ratios indicating the firm’s
highest liquidity. It has decreased ever since.

2. Bhupender Kumar Som1 , Himanshu Goel2 (2020) in their journal “Ratio Analysis: A
Study on Financial Performance of Tata Motors”, reviewed thefinancial performance of
Tata Motors from 2016-2020. The results reveal the Return on capital employed and
Net worth were at all time low. The current ratio of the firm were to be considered
a matter of concern for the investors as it directly influences the company’s financial
performance. The company seemed to produce good results in 2019, before the pandemic, may
be due to the expected reasons such as voluntary retirement scheme and sell-off non- core assets
which worked well in favor of the company

3. Kumar (2021) analyzed the working capital management and solvency trends of leading Indian
automobile companies. The study highlighted that Maruti Suzuki has a stronger liquidity position,
whereas Tata Motors relies more on external borrowings, affecting its solvency ratios. Gupta &
Sharma (2022) examined the financial performance of Tata Motors and Maruti Suzuki
using key financial ratios such as liquidity, profitability, and solvency. Their study found
that Maruti Suzuki maintained better profitability and liquidity, while Tata Motors had
higher leverage due to debt-financed expansion strategies
4. Biswajit Rout **Abinash Dash ***Baisali Das (2020) in their journal “A Study on
Financial Statement Analysis of Maruti Suzuki India Limited Company” reviewed the
financial performance of the frim from 2009-2019. They concluded that the prosperity of
Maruti Suzuki has been wealthy for the last 10 years. It was found to be in a gradually
increasing manner regarding the Net Sales and Net Profits of the company since 2009
onwards.

5. Sudarshan Kumar (2020) in his article “A study on evaluation of financial performance

of Maruti Udyog Ltd '' analyzed that Maruti Suzuki has demonstrated that it is
consistently ahead of its rivals as a result of continuous developments. What's more,
mechanical upgrades. The organization has set a benchmark of greatness due to the
Exploration and Development movement as Maruti Suzuki accepts that this action will
empower the organization to offer better and climate cordial items than clients with
complete fulfillment. Maruti Suzuki‟s ecological execution is truly uncountable.
Thinking about the developing vehicle contamination, the organization presented a
progressed K- Series motor in its vehicles which brought about a decrease of CO, THC
and NOx discharges by right around 50%. To the extent financial execution is concerned,
Maruti Suzuki‟s last not many year‟s measurements of Domestic deals, Fare, portrays
that still Maruti Suzuki is the head of Indian Automobile sector.

6. B Navaneetha, R Padmasri and A Pavithira (2018) in their study “A ratio analysis of Maruti
Suzuki India Ltd '' have concluded that MSIL is following a conservative working capital
policy as it maintains minimum level of liquidity. Companies with low liquidity ratios have a
higher risk of meeting its current obligations. In the case of MSIL the fall in the liquidity ratios is
offset by the rise in profitability ratios. The company allocates more funds on investments to have
an edge over the competitors. MSIL is the king of the Indian automotive industry. MSIL has been
consistently surviving in the industry with the effective growth rate which is evidenced by high
profit earning capacity.
7. MD Qamar Azam and MD Abrar Alam (2020) in their study “FINANCIAL RATIOS
AND ANALYSIS OF TATA MOTORS” found out that the Overall Z score of Tata
motors is lies between 0.71 to 2.44, lowest in 2015. Company needs serious studies. We
can say that its main reason is company's working capital to total assets is negative during
the periods. It's all profitability ratios are under the average and negative during the years.
Debt to total assets is approx. 60-70% which is above the average. Debt to equity ratio is
moving between 1.5 to 2.2 which is bad for any company. In the case of the liquidity
ratios which are very low relatively to industry. On an average tata motors financial ratios
indicates that its financial conditions are under performance.

8. Patel & Rao (2023) conducted a comparative profitability analysis and found that Maruti
Suzuki consistently achieved higher net profit margins and return on assets, whereas Tata
Motors exhibited fluctuations due to its capital-intensive projects. The study suggested
that Maruti Suzuki follows a conservative financial approach, while Tata Motors focuses
on aggressive growth strategies.

9. The Reserve Bank of India’s (RBI) Annual Report (2023) on the automobile sector’s
financial trends indicated that Tata Motors carries a heavier debt burden, impacting its
financial stability. In contrast, Maruti Suzuki operates with minimal debt and a self-
sustaining capital structure.

10. According to ICRA (2022), Tata Motors has been investing heavily in EV technology,
which has increased its financial risk but positioned it as a long-term market leader.
Maruti Suzuki, on the other hand, follows a stable investment approach, prioritizing fuel
efficiency and hybrid technology.
 RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY:

PRIMARY OBJECTIVE:
1. To compare and analyze the financial performance of Tata Motors Ltd and
Maruti Suzuki Ltd.
SECONDARY OBJECTIVE:
1. To evaluate the financial performance of Tata Motors Ltd and Maruti Suzuki
Ltd using various financial ratios.
2. To examine the profitability , liquidity , leverage and effective performances of
Tata Motors Ltd and Maruti Suzuki Ltd
3. To review the growth and development and compare the past five years
financial results of Tata Motors Ltd and Maruti Suzuki Ltd.

SIGNIFICANCE OF THE STUDY:

The study of Financial Performance Analysis can be a learning criterion to the management
as well as the investors to identify significant changes in the fiscal management and to analyze
the financial operations in the enterprise in order to make investment decisions. This
comparative study is done to identify the pattern and evaluate the areas in which the
company is has been affected in order to arrive at standard solutions.

SCOPE OF THE STUDY:

• Two automobile companies have been chosen for the study (i.e. tata Motors and
maruti suzuki)
• The study covers the financial aspect of 2 enterprises.
• The study is confined to analyzing the financial performance of the companies

• hence the theoretical scope consists of accounting aspects and financial ratios.
LIMITATIONS OF THE STUDY:

• The report focuses only on Tata Motors and Maruti Suzuki Ltd.
• The period of study is limited to 5 years
• The financial reports considered for the study are within the specified 5 years
• Certain ratios were only calculated due to insufficiency of data.
• The study is mainly based on secondary data derived from annual reports and
accounts of Tata Motors and Maruti Suzuki, therefore the reliability and
accuracy of the findings depends on such data.

SAMPLE DESIGN:
The study undertook convenience sampling to collect the required data.

SAMPLE SIZE:
Past 5 years of both Tata Motors Ltd and Maruti Suzuki Ltd are taken into
consideration to analyze, evaluate and interpret the results.

SAMPLE SELECTION:
The balance sheet, Income statement and profit and loss A/C and other related Financial
Reports of Tata Motors and Maruti Suzuki were incorporated in the study.

PERIOD OF THE STUDY:

The study was carried out from December 2021- March 2022
METHODS OF DATA COLLECTION:
Since the study is primarily based on secondary data, the financial reports, balance sheets,
profit and loss A/Cs were taken from the Company’s official annual reports, investment
websites, previous research projects and journals relating to financial analysis.

NEED FOR THE STUDY:

The need for the study is to find out which company performs satisfactorily in terms of fiscal
performance and asset management and to identify the reasons as to why the enterprise is

ACCOUNTING TOOLS USED FOR THE STUDY:

• Ratio Analysis
• Trend Analysis
 Chapter - III
COMPANY PROFILE
Two automobile companies have been chosen for the study. They are tata motors ltd and
maruti suzuki ltd.

TATA MOTORS:

Tata motors is an indian multinational automotive manufacturing company, founded in

1945 by Jehangir Ratanji Dadabhoy Tata. It is headquartered in Mumbai, India. The
company produces and manufactures passenger cars, trucks, vans, coaches, buses,
luxury cars, sports cars, construction equipment. Tata motors has vehicle assembly
operations in several countries apart from India, including the United Kingdom, South
Korea, Thailand, Spain and South Africa. It further plans to establish plants in Turkey,
Indonesia and Eastern Europe. In India it has manufacturing and assembly units in
Jamshedpur, Ranjangaon, Pune, Lucknow, Sanand, Pantnagar and goa. The Manufacturing
units at Jamshedpur and Pune are the oldest and largest of Tata Motors. Tata motors has
more than 250 dealerships in more than 195 cities across 27 states and four union territories
of India. Tata’s dealership, sales, service and spare parts network comprises over 3,500
touch points. Tata also has fanchisee/joint venture assembly operations in Kenya,
Bangladesh, Ukraine, Russia and Senegal. Tata has dealerships in 26 countries
across 4 continets
 REVENUE AND INCOME OF TATA MOTORS
Revenue ₹4,438,777 crore(2024)

Operating Income ₹60,000crore(2024)

Net income ₹31,807crore (2024)

Total Assets ₹1,20,000 crore(2024)

In Share Market Tata Motors Ltd is traded as,

• BSE: 500570
• NSE: TATAMOTORS
• NYSE: TTM
• NSE: NIFTY 50 constituent

Share Holding Pattern of Tata Motors Ltd

Holder’s Name % of Share

Holding
Promoters 42.58%
Foreign Institutions 18.66%
Mutual Fund 10.96%
Central Government 0.05%
General Public 21.97%
Financial Institutions 0.01%
Others 5.77%
The following are the automobiles launched by tata motors over the years,

• Tata Harrier (2019) – A bold mid-size SUV known for its powerful performance.
• Tata Nexon EV (2020) – A popular electric SUV offering impressive performance
and range.
• Tata Altroz (2020) – A premium hatchback with a focus on safety and design.
• Tata Punch (2021) – A compact, stylish micro SUV with a premium feel
• Tata Safari (2021) – A reimagined full-size SUV offering luxury and space.
• Tata Tigor EV (2021) – An affordable electric sedan for urban commuting.
• Tata Tiago EV (2022) – A compact and budget-friendly electric hatchback.
• Tata Curvv (2024) – A futuristic electric SUV concept with a focus on design and
performance.
• Tata Sierra EV (2024) – An electric version of the iconic Sierra SUV, reviving a classic
name with modern features.
MARUTI SUZUKI:

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian
automobile manufacturer, based in New Delhi. It was founded in 1981 and owned by the
Government of India until 2003, when it was sold to the Japanese automaker
Suzuki Motor Corporation. As of early 2025 Maruti Suzuki has a market share of 42 percent
in the Indian passenger car market.

As of August 2024, Maruti Suzuki has 2,987 Arena sales outlets across 2,522 cities and 495
Nexa sales outlets across 301 cities in India. Maruti’s dealership network is larger than that
of enough known companies combined. Service is a major revenue generator of the company.
Most of the service stations are managed on franchise basis, where Maruti Suzuki trains the
local staff. Also, The Express Service stations exist, sending across their repair man to the
vehicle if it is away from a normal service center.
 REVENUE AND INCOME OF MARUTI SUZUKI
Revenue ₹1,34,938 Crores (2024)

Operating Income ₹13,380crore (2024)

Net income ₹13,488crore (2024)

Total Assets ₹1,15,000 crore(2024)

Share Holding Pattern of Tata Motors Ltd

Holder’s Name % of Share

Holding
Promoters 58.28%
Foreign Institutions 58.28%
Mutual Fund 15.58%
Foreign Institutional Investors (FII) 15.47%
Other Domestic Institutions 7.38%
Non-Institutional Investors 3.29%
Others 3.29%
The following are the automobiles launched by maruti suzuki over the year,
• Maruti Suzuki S-Presso (2019) - A compact SUV-styled hatchback, offering a fresh design
and BS6 engine.

• Maruti Suzuki Vitara Brezza BS6 (2020) - The updated version of the Vitara Brezza with a
BS6-compliant engine and design updates.

• Maruti Suzuki S-Cross Facelift (2020) - Updated with a new design, features, and a more
refined engine.

• Maruti Suzuki XL6(2021) - A premium MPV based on the Ertiga, launched with a 1.5L
engine and improved features.

• Maruti Suzuki Celerio (New Generation)(2021) - Completely redesigned with the new
K10C engine, modern styling, and features.

• Maruti Suzuki Grand Vitara (2022)- A new mid-size SUV co-developed with Toyota,
offering hybrid powertrains and premium features.

• Maruti Suzuki Fronx(2023) - A new compact crossover based on the Baleno, offering a
coupe-like design and hybrid powertrains.

• Maruti Suzuki Jimny 5-door(2024) - The iconic Jimny, now available in a 5-door version
with more space and comfort.

• Maruti Suzuki Swift CNG (2024)- A newly launched CNG variant of the popular Swift
hatchback.

• Maruti Suzuki Dzire CNG(2024) - CNG variant of the Dzire sedan, offering enhanced fuel
efficiency and eco-friendly performance.
 CHAPTER IV
DATA ANALYSIS & INTERPRETATION

4.1. RATIO ANALYSIS

1. Current ratio is a financial metric used to evaluate a company's ability to meet its
short-term obligations with its short-term assets. It is a measure of liquidity and shows
how well a company can cover its liabilities due within a year using its assets that can
be converted into cash within the same period.

TATA MOTORS:
Table 4.1.1. Current Ratio of Tata Motors

YEAR CURRENT ASSETS CURRENT RATI

LIABILITIES O

2019-2020 119,587 140,454 0.85

2020-2021 146,887 157,749 0.93

2021-2022 1,515,285 1,550,273 0.98

2022-2023 1,506,828 1,577,492 0.95

2023-2024 1,670,000 1,804,000 0.93

MARUTI SUZUKI:
Table 4.1.2. Current Ratio of Maruti Suzuki

YEAR CURRENT CURRENT RATIO

ASSETS LIABILITIES

2019-2020 8,441 11,305 0.75

2020-2021 18,544 16,121 1.15

2021-2022 16,793 17,024 0.99

2022-2023 11,616 20,107 0.58

2023-2024 22,634 25,952 0.87

 Table 4.1.3. Consolidated Current Ratio of Tata Motors And Maruti Suzuki

YEAR TATA MARUTI

2019-2020 0.85 0.75

2020-2021 0.93 1.15

2021-2022 0.98 0.99

2022-2023 0.95 0.58

2023-2024 0.93 0.87

1.4

1.2

0.8

0.6

0.4

0.2

0
2019-2020 2020-2021 2021-2022 2022-2023

TATA MARUTI

Current Ratio of Tata and Maruti

INFERENCE: The consolidated current ratio data of Tata Motors and Maruti Suzuki reveals
fluctuations in their short-term liquidity over the years. Tata Motors maintained a relatively stable
current ratio between 0.85 and 0.98, consistently below 1, indicating potential liquidity concerns
but controlled financial management. In contrast, Maruti Suzuki exhibited more volatility,
peaking at 1.15 in 2020-2021 before dropping to a low of 0.58 in 2022-2023, suggesting liquidity
challenges during that period. While Maruti had stronger liquidity in 2020-2021, Tata Motors
outperformed in other years, with both companies converging to similar ratios in 2023-2024. The
overall trend suggests that both companies operate with tight liquidity, potentially relying on
efficient working capital management or external funding to meet short-term obligations.
2.Liquid ratio, also known as the quick ratio, measures a company's ability to meet its short-
term liabilities using its most liquid assets. It is a more stringent measure of liquidity than the
current ratio because it excludes inventory and other less-liquid current assets.

TATA MOTORS
Table 4.1.4. Liquid ratio of Tata motors

YEAR QUICK ASSETS CURRENT RATIO

(INR Crores) LIABILITIES
2019-2020 1,04,000 140,454 0.78
2020-2021 1,10,000 157,749 0.66
2021-2022 1,05,042 1,550,273 0.07
2022-2023 1,09,564 1,577,492 0.06
2023-2024 1,08,057 1,804,000 0.06

MARUTI SUZUKI
Table 4.1.5. Liquid Ratio of Maruti Suzuki

YEAR QUICK ASSETS CURRENT RATIO

(INR Crores) LIABILITIES
2019-2020 63,628 11,305 0.46
2020-2021 71,376 16,121 0.93
2021-2022 74,514 17,024 0.78
2022-2023 100,0106 20,107 0.45
2023-2024 115,304 25,952 0.67
 Table 4.1.6. Consolidated Liquid Ratio of Tata Motors And Maruti Suzuki

YEAR TATA MARUTI

2019-2020 0.78 0.46

2020-2021 0.66 0.93

2021-2022 0.07 0.78

2022-2023 0.06 0.45

2023-2024 0.06 0.67

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2019-2020 2020-2021 2021-2022 2022-2023 2023-2024

TATA MARUTI

INFERENCE: The consolidated liquid ratio data indicates a sharp decline in Tata Motors'
liquidity, dropping from 0.78 in 2019-2020 to just 0.06 in 2022-2023 and 2023-2024,
signaling potential liquidity challenges. In contrast, Maruti Suzuki's ratio has fluctuated but
remained relatively stable, peaking at 0.93 in 2020-2021 and settling at 0.67 in 2023-2024.
This suggests that Maruti has managed its short-term financial obligations better, while
Tata Motors may face liquidity risks that could impact its financial stability.
3.Debt-to-equity ratio is a financial metric that indicates the proportion of debt and equity used to
finance a company's assets. It measures the level of financial leverage and helps assess the
company's financial health and risk.

TATA MOTORS
Table 4.1.7. Debt Equity Ratio of Tata Motors

YEAR LONG TERM DEBT SHARE HOLDERS RATIO

FUND
2019-2020 70,807.64 58,061.89 1.219520067
2020-2021 78,273.74 95,427.91 0.8202394876
2021-2022 84,163.39 60,179.56 1.398537809
2022-2023 99,994.18 63,078.53 1.585233201
2023-2024 114,949.65 55,246.72 2.080660173

MARUTI SUZUKI
Table 4.1.8. Debt Equity Ratio of Maruti Suzuki

YEAR LONG TERM SHARE HOLDERS RATIO

DEBT
FUND
2019-2020 527.7 37,075.10 0.01423327247
2020-2021 638.5 42,559.40 0.01500256113
2021-2022 661.4 47,092.10 0.01404481856
2022-2023 714.5 49,413.00 0.01445975755
2023-2024 492.9 52,500.60 0.009388464132
 Table 4.1.9. Consolidated Debt Equity Ratio of Tata Motors and Maruti Suzuki

YEAR TATA MARUTI

2019-2020 1.22 0.01
2020-2021 0.82 0.02
2021-2022 1.4 0.01
2022-2023 1.59 0.01
2023-2024 2.08 0.01

1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2019-2020 2020-2021 2021-2022 2022-2023

TATA MARUTI

Debt Equity Ratio of Tata Motors and Maruti Suzuki

INFERENCE: The debt-to-equity ratio is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets. ideal ratio is 0.5:1 for debt-
equity.The debt-equity ratio is far less than 0.5:1 during all the years of study for Maruti suzuki.
This indicates that debt proportion is highly satisfactory and the company is highly solvent to
pay off its long term debts. Meanwhile the least debt equity ratio for Tata during the study period
is 1.4.
4.Interest coverage ratio is a financial metric that measures a company's ability to meet its interest
payment obligations on outstanding debt. It assesses how easily a company can pay interest on its debt
with its current earnings, providing insight into its financial stability and risk level

TATA MOTORS
Table 4.1.10. Interest Coverage Ratio of Tata Motors

YEAR EBIT INTEREST RATIO

2019-2020 -22,446 9,985 -0.46
2020-2021 -6,307 10,224 -0.29
2021-2022 2,105 8,414 0.25
2022-2023 5,500 7,269 1.33
2023-2024 41,984 6,290 3.80

MARUTI SUZUKI
Table 4.1.11. Interest Coverage Ratio of Maruti Suzuki

YEAR EBIT INTEREST RATIO

2019-2020 7064 132 53.16
2020-2021 5159 100 51.19
2021-2022 4582 125 36.40
2022-2023 10159 186 54.44
2023-2024 17040 193 88.22
 Table 4.1.12. Consolidated Interest Coverage Ratio of Tata Motors and Maruti
Suzuki

YEAR TATA MARUTI

2019-2020 -0.46 53.16
2020-2021 -0.29 51.19
2021-2022 0.25 36.40
2022-2023 1.33 54.44
2023-2024 3.80 88.22

60

50

40

30

20

10

0
2019-2020 2020-2021 2021-2022 2022-2023
-10

TATA MARUTI

Interest Coverage Ratio of Tata Motors and Maruti Suzuki

INFERENCE: The data shows a significant improvement in Tata Motors' financial
performance, transitioning from negative values in 2019-2021 to a strong growth trend,
reaching 3.80 in 2023-2024. In contrast, Maruti Suzuki has maintained consistently
high figures, with a steady increase from 53.16 in 2019-2020 to 88.22 in 2023-2024.
This suggests that while Maruti has sustained strong financial stability, Tata Motors has
experienced a remarkable recovery and growth, indicating improved financial health
and potential strategic success in recent years.
5.Gross profit ratio is a financial metric that measures the proportion of gross profit to net sales,
expressed as a percentage. It helps evaluate a company's ability to generate profit from its core business
operations before accounting for other expenses, such as taxes and interest.

TATA MOTORS
Table 4.1.13. Gross Profit Ratio of Tata Motors

YEAR GROSS PROFIT NET SALES RATIO

2019-2020 1008596 2507749 40.2%
2020-2021 1082567 2776745 39%
2021-2022 1327496 3531828 37.6%
2022-2023 1856322 4384729 42.3%
2023-2024 1553624 4398971 35.3%

MARUTI SUZUKI
Table 4.1.14. Gross Profit Ratio of Maruti Suzuki

YEAR GROSS PROFIT NET SALES RATIO

2019-2020 12119 78994 15.3%
2020-2021 15398 70372 21.9%
2021-2022 18123 88329 20.5%
2022-2023 26680 118409 22.5%
2023-2024 34952 141858 24.6%
 Table 4.1.15. Consolidated Gross Profit Ratio of Tata Motors and Maruti Suzuki

YEAR TATA MARUTI

2019-2020 40.2% 15.3%
2020-2021 39% 21.9%
2021-2022 37.6% 20.5%
2022-2023 42.3% 22.5%
2023-2024 35.3% 24.6%

45.00%

40.00%

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
2019-2020 2020-2021 2021-2022 2022-2023

TATA MARUTI

Gross Profit Ratio of Tata Motors and Maruti Suzuki

INFERENCE: The data indicates that Tata Motors has maintained a relatively high gross profit
ratio over the years, peaking at 42.3% in 2022-2023 but then dropping to 35.3% in 2023-2024. In
contrast, Maruti Suzuki has shown a steady improvement, increasing from 15.3% in 2019-2020
to 24.6% in 2023-2024. While Tata Motors experienced fluctuations, Maruti Suzuki demonstrated
consistent growth, suggesting improved cost efficiency and profitability over time.
4.2.TREND ANALYSIS
TREND ANALYSIS OF SALES

TATA MOTORS

Table 4.2.1. Trend Analysis of Sales of Tata Motors

YEAR SALES TREND % DIFFERENCE %

2019-2020 2507749 100 0

2020-2021 2776745 110.73 10.73

2021-2022 3531828 140.84 27.19

2022-2023 4384729 174.85 24.15

2023-2024 4398971 175.42 0.32

MARUTI SUZUKI
Table 4.2.2. Trend Analysis of Sales of Maruti Suzuki

YEAR SALES TREND % DIFFERENCE %

2019-2020 78994 100 0
2020-2021 70372 108 -10.91
2021-2022 88329 111.82 25.52
2022-2023 118409 149.90 34.05
2023-2024 141858 179.58 19.8
 Table 4.2.3. Consolidated Trend Analysis of Sales of Tata Motors and Maruti Suzuki

YEAR TATA TREND % MARUTI TREND %

2019-2020 100 100

2020-2021 110.73 108

2021-2022 140.84 111.82

2022-2023 174.85 149.90

2023-2024 175.42 179.58

200

180

160

140

120

100

80

60

40

20

0
2019-2020 2020-2021 2021-2022 2022-2023 2023-2024

TATA TREND % MARUTI TREND % Series 3

Trend Analysis of Sales of Tata Motors and Maruti Suzuki

INFERENCE: The trend analysis indicates that both Tata Motors and Maruti Suzuki have
experienced significant sales growth from 2019-2020 to 2023-2024. Tata Motors showed
steady growth, rising from 100% to 175.42%, with its most substantial increase occurring
between 2020-2021 and 2021-2022. Maruti Suzuki, while initially growing at a slower pace,
surpassed Tata Motors in 2023-2024 with a trend percentage of 179.58%
TREND ANALYSIS OF CURRENT ASSETS

TATA MOTORS

Table 4.2.4. Trend Analysis of Current Assets of Tata Motors

YEAR CURRENT ASSETS TREND % DIFFERENCE %

2019-2020 119,587 100 0

2020-2021 146,887 122.83 22.83

2021-2022 1,515,285 1267.10 931.60

2022-2023 1,506,828 1260.03 -0.56

2023-2024 1,670,000 1396.47 10.83

MARUTI SUZUKI

Table 4.2.5. Trend Analysis of Current Assets of Maruti Suzuki

YEAR CURRENT ASSETS TREND % DIFFERENCE %

2019-2020 8,441 100 0

2020-2021 18,544 219.69 119.69

2021-2022 16,793 198.95 -9.44

2022-2023 11,616 137.61 -30.83

2023-2024 22,634 268.14 94.85

 Table 4.2.6. Consolidated Trend Analysis of Current Assets of Tata Motors and Maruti
Suzuki

YEAR TATA TREND % MARUTI TREND %

2019-2020 100 100

2020-2021 122.83 219.69

2021-2022 1267.10 198.95

2022-2023 1260.03 137.61

2023-2024 1396.47 268.14

1600

1400

1200

1000

800

600

400

200

0
2019-2020 2020-2021 2021-2022 2022-2023 2023-2024

TATA TREND % MARUTI TREND %

Trend Analysis of Current Assets of Tata Motors and Maruti Suzuki

INFERENCE: The table shows the trend percentage of current assets for Tata and Maruti from
2019-2020 to 2023-2024. Tata's trend percentage has increased significantly, especially in 2021-
2022, showing a sharp rise in assets. However, there was a slight dip in 2022-2023 before
increasing again in 2023-2024. On the other hand, Maruti's trend percentage also grew, but with
fluctuations. It peaked in 2020-2021, then declined in the next two years, and rose again in 2023-
2024. This suggests that Tata experienced a rapid expansion, while Maruti had an unstable trend
with periods of growth and decline.
TREND ANALYSIS OF CURRENT LIABILITIES

TATA MOTORS

Table 4.2.7. Trend Analysis of Current Liabilities of Tata Motors

YEAR CURRENT LIABILITIES TREND % DIFFERENCE %

2019-2020 140,454 100 0

2020-2021 157,749 112.31 12.31

2021-2022 1,550,273 1103.76 882.75

2022-2023 1,577,492 1123.14 1.76

2023-2024 1,804,000 1284.41 14.36

MARUTI SUZUKI
Table 4.2.8. Trend Analysis of Current Liabilities of Maruti Suzuki

YEAR CURRENT LIABILITIES TREND % DIFFERENCE %

2019-2020 11,305 100 0

2020-2021 16,121 142.60 42.60

2021-2022 7,024 62.13 -56.43

2022-2023 20,107 177.86 186.26

2023-2024 25,952 229.56 29.07

 Table 4.2.9. Consolidated Trend Analysis of current liabilities of Tata Motors and Maruti
Suzuki

YEAR TATA TREND % MARUTI TREND %

2019-2020 100 100

2020-2021 112.31 142.60

2021-2022 1103.76 62.13

2022-2023 1123.14 177.86

2023-2024 1284.41 229.56

1400

1200

1000

800

600

400

200

0
2019-2020 2020-2021 2021-2022 2022-2023 2023-2024

TATA TREND % MARUTI TREND %

Trend Analysis of Current Liabilities of Tata Motors and Maruti Suzuki

INFERENCE: The table shows how Tata Motors and Maruti Suzuki's current liabilities have
changed over the years. Tata Motors' liabilities have increased drastically, especially from 2021-
2022 onwards, reaching very high levels in 2023-2024. This suggests the company may have taken
on more debt or expanded its operations. In contrast, Maruti Suzuki’s liabilities have gone up and
down, showing a more unstable pattern. While its liabilities grew overall, the changes were not as
extreme as Tata Motors'. This difference suggests that Tata is taking bigger financial risks or
making larger investments, while Maruti's approach is more cautious.
 CHAPTER V
FINDINGS, SUGGESSTIONS & CONCLUSION
This chapter comprises the project findings, conclusions and suggestions.

FINDINGS:

• All the financial years of both Tata and Maruti didn’t meet the expected current ratio
resulting in inadequate current assets to fully cover short term obligations.
• Both maruti and suzuki have failed to attain the standard quick ratio of 1:1 in the study
period 2019-2024.
• Maruti Suzuki maintained a debt -equity ratio far below 0.5:1 throughout FY 2019 to FY
2024, indicating low reliance on debt and strong solvency. In contrast, Tata Motors had
a significantly higher debt-equity ratio, with the lowest being around 1.4, reflecting
higher financial leverage and greater dependence on debt financing.

• From the above table and analysis, Tata Motors' financial health has improved
significantly over the years. It moved from losses in 2019-2021 to strong growth in
2023-2024, with its interest coverage ratio reaching 3.80. Meanwhile, Maruti Suzuki
has remained financially stable with consistently high figures, increasing from 53.16
in 2019-2020 to 88.22 in 2023-2024. This suggests that while Maruti has always been
strong, Tata Motors has made a great recovery, showing better financial health and
strategic success.
• Tata Motors had a high profit ratio but saw ups and downs, dropping to 35.3% in 2023-
2024. Maruti Suzuki’s profit grew steadily from 15.3% to 24.6% over the years. While
Tata Motors faced fluctuations, Maruti Suzuki improved consistently.
• The trend percentage of sales shows that both Tata Motors and Maruti Suzuki
experienced sales growth from 2019-2020 to 2023-2024. Tata Motors had
steady growth, reaching 175.42%, while Maruti Suzuki grew at a slower pace
initially but surpassed Tata Motors in 2023-2024 with 179.58%. Overall, both
companies showed significant improvement in sales trend.

• Tata Motors showed a strong and rapid increase in current assets, especially in 2021-
2022, indicating significant growth. In contrast, Maruti Suzuki experienced fluctuations,
with periods of both growth and decline. This suggests that Tata had a more consistent
expansion, while Maruti faced an unstable asset trend over the years.

• Tata Motors’ liabilities have surged since 2021-2022, indicating higher debt or expansion,
while Maruti Suzuki’s liabilities have fluctuated but grown steadily. This suggests Tata is
taking bigger financial risks, whereas Maruti follows a more cautious approach.
SUGESTIONS:

• Both Tata Motors and Maruti Suzuki have to increase their currents assets to
meet the fixed standard.
• Both the company must increase their quick ratio to pay off current debt
obligations without raising external debt.
• The cash ratio must be met with the standard to be able to meet the liquidity of the
company to pay off short term debt.
• Tata must increase their debt equity to pay off long term debts.
• Tata must raise it’s interest coverage ratio to pay off the interest on it’s
outstanding debts.
CONCLUSION:

• Most of the obligations were not met by Tata motors while compared to Maruti
Suzuki.

• Tata Motors struggled to meet key financial ratio benchmarks, facing liquidity
challenges with low current and quick ratios, a high debt-equity ratio, and a weak
interest coverage ratio in earlier years, though it showed some improvement later. In
contrast, Maruti Suzuki maintained stronger financial stability with a low debt-equity
ratio, high interest coverage ratio, and a better cash position. However, both companies
had current and quick ratios below the ideal benchmark, indicating some liquidity
concerns. Overall, Maruti Suzuki demonstrated better fiscal health compared to Tata
Motors during this period.
• While Tata Motors’ profit ratio fluctuated, Maruti Suzuki showed continuous
growth.Maruti Suzuki’s steady increase suggests improved operational efficiency,
whereas Tata Motors’ decline in 2023-2024 might indicate cost pressures or market
challenges.
• During the period, trend analysis shows Tata Motors experienced moderate growth in
sales and current assets, accompanied by a significant increase in current liabilities, while
Maruti Suzuki saw substantial growth in sales and current assets, with a relatively smaller
rise in current liabilities.
BIBLIOGRAPHY:

Journals & Publications:

1. Gupta, R., & Sharma, P. (2022). Financial Performance Analysis of Indian Automobile
Giants: A Case Study of Tata Motors and Maruti Suzuki. Journal of Financial Studies,
45(3), 120-135.

2. Kumar, S. (2021). Liquidity and Profitability Trends in the Indian Auto Sector: A
Comparative Study. International Journal of Business and Economics, 39(2), 78-92.

3. Patel, V., & Rao, M. (2023). Financial Health Assessment of Tata Motors and Maruti
Suzuki: A Ratio Analysis Approach. Indian Journal of Corporate Finance, 27(1), 45-60.

4. RBI Annual Report (2023). Financial Performance of Indian Auto Sector. Reserve
Bank of India.

5. ICRA (2022). Credit Risk Assessment and Financial Trends in the Indian Automobile
Industry. ICRA Research Reports.

Web Links:

1. Tata Motors Annual Reports - https://www.tatamotors.com/investors/

https://www.tatamotors.com/investors/

2. Maruti Suzuki Financial Reports - https://www.marutisuzuki.com/investors

3. Reserve Bank of India Reports - https://www.rbi.org.in

4. Indian Automobile Industry Analysis (IBEF) -

https://www.ibef.org/industry/automobiles

5. Business Standard (Auto Sector Financial News & Reports) - https://www.business-

standard.com/

6. Moneycontrol (Stock & Financial Data for Tata & Maruti) -

https://www.moneycontrol.com/l