Accounts Assign

8/8/2019 Accounts Assign

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ASSIGNMENTON RATIO ANALYSIS OF

TATA MOTORS FOR 2007 AND 2008.


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INCOME STATEMENT OF TATA MOTORS

(currency in million Rs.)

(2007) (2008)

Revenues 323,612.0 356,514.8

Other Revenues 19.6 65.0

TOTAL REVENUES 325,143.8 358,086.0

Cost of Goods Sold 234,753.6 254,571.5

GROSS PROFIT 90,390.2 103,514.5

Selling General & Admin Expenses, Total 30,811.0 35,136.3

R&D Expenses 850.2 659.5Depreciation & Amortization, Total 6,880.9 7,820.7

Other Operating Expenses 17,508.5 24,046.6

OTHER OPERATING EXPENSES, TOTAL 56,050.6 67,663.1

OPERATING INCOME 34,339.6 35,851.4

Interest Expense -4,650.6 -9,127.2

Interest and Investment Income 592.5 1,696.6

NET INTEREST EXPENSE -4,058.1 -7,430.6

Income (Loss) on Equity Investments 394.2 652.0

Currency Exchange Gains (Loss) 652.1 1,376.1

Other Non-Operating Income (Expenses) -1.4 -0.6

EBT, EXCLUDING UNUSUAL ITEMS 31,326.4 30,448.3

Gain (Loss) on Sale of Assets -- 1,103.6

Other Unusual Items, Total -52.2 -37.0

EBT, INCLUDING UNUSUAL ITEMS 31,274.2 31,514.9

Income Tax Expense 8,832.1 8,515.4

Minority Interest in Earnings -742.2 -1,322.5

Earnings from Continuing Operations 21,699.9 21,677.0

NET INCOME 21,699.9 21


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BALANCE SHEET OF TATA MOTORS

(2007) (2008)

ASSETS (currency in millions Rs.)

Cash and Equivalents 11,542.7 38,331.7TOTAL CASH AND SHORT TERM INVESTMENTS 11,542.7 38,331.7

Accounts Receivable 17,022.2 20,605.1

Notes Receivable 84,553. 76,938.9

Other Receivables 62.7 11.9

TOTAL RECEIVABLES 101,638.5 97,555.9

Inventory 31,669.0 32,946.4

Prepaid Expenses 1,247.3 3,334.8

Other Current Assets 16,681.7 20,504.7

TOTAL CURRENT ASSETS 162,779.2 192,673.5

Gross Property Plant and Equipment 129,408.3 182,484.4

Accumulated Depreciation -54,266.5 -57,652.4

NET PROPERTY PLANT AND EQUIPMENT 75,141.8 124,832.0

Goodwill 4,430.1 5,661.6

Long-Term Investments 11,745.9 26,658.3

Deferred Charges, Long Term 119.3 2,442.1

Other Intangibles -- 1,429.6

Other Long-Term Assets -- --

TOTAL ASSETS 254,216.3 353,697.1

LIABILITIES & EQUITY

Accounts Payable 48,723.3 67,832.8

Accrued Expenses 4,704.9 5,389.3

Short-Term Borrowings 34,325. 52,503.2

Current Income Taxes Payable 1,084.2 901.4

Other Current Liabilities, Total 38,789.2 62,104.1

Unearned Revenue, Current 6.7 218.0

TOTAL CURRENT LIABILITIES 127,633.7 188,948.8

long-Term Debt 38,693.6 63,345.5


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For 2008 = 86975.2/63,345.5 = 1.37

For 2007 = 77,216.7/38,693.6 = 1.99

2. Total debt ratio = Total debt / capital employed

For 2008

Total debt = 63,345.5

Capital employed = Net worth + borrowing

Or Share capital + debt.

=86,975.2+ 63,345.5= 150320.7

Hence total debt equity ratio=63,345.5 / 150320.7 = 0.42

For 2007

Total debt = 38,693.6

Capital employed = 77,216.7 + 38,693.6= 115910.3

Hence total debt equity ratio = 38,693.6 / 115910.3 = .33

3.Capital Equity Ratio = Capital employed/ net worth

For 2008 = 150,320.7/86,975.2 = 1.73

For 2007 = 115910.3/77,216.7 = 1.50

Coverage ratios can be classified into

Interest Coverage Ratio

Dividend Ratio


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1.INTEREST COVERAGE RATIO: This ratio facilitates the prospective lender to study the

strength of the enterprise in making the payment of interest regularly out of total income.Greater

the ratio means better the capacity of the firm in making the payment of interest as well as

greater safety and vice versa.

1.Interest coverage ratio = (EBIT+depreciation)/Interest

For 2008

Earning before tax + interest=30,448.3 +9127.2 = 39575.5

Hence ratio = 39,575.5/9127.2 = 5.19

For 2007

Earning before tax + interest=31,326.4+6,880.6 = 35,977

Hence ratio = 35,977/6,880.6 = 9.21

In 2008, the long term financial position getting strong than 2008. Capability of

paying long term debt. is increases. As we seen, debt ratio increases. And the

contribution of debt is increases in 2008 than 2007. and the part of share capital is

also increases in total capital employed than 2007. it means, company is increasing

its capital through shares.

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Accounts Assign