RATIO ANALYSIS

SUBMITTED BY GROUP8

CURRENT RATIO:-

Bajaj = 5204.19 / 4664.37 =1.12

Tata Motors = 64461.47 / 73268.07

= 0.879 Bajaj has better liquidity than

Tata motors but overall both the company has far lower liquidity than standard ratio.

ACID TEST RATIO:-

Bajaj = 4500.58 / 4664.37

=0.965Tata Motors = 46245.45 /

73268.07=0.631

Bajaj has a good acid ratio than Tata and also close to standard ratio. That means Bajaj has 96.5 rs acid assets for 100 rs of liabilities

INVENTORY TURNOVER RATIO:-

Bajaj = 14126.02 / 639.93

=22.07Holding Period =17 daysTata Motors = 109467.58 /

16143.265=6.78

Holding Period = 54 daysInventory holding period of Tata

motors is very high

DEBTORS TURNOVER RATIO:-

Bajaj = 18945.52 / 370.335

= 51.16Period = 8 daysTata Motors = 165654.49 /

7381.245= 22.44

Period = 17 days

CREDITORS TURNOVER RATIO:-

Bajaj =14211.67 / 1905.695= 7.46

Period = 49 daysCash Conversion Cycle = (24) daysTata Motors = 112003.3 / 32294.69

= 3.468Period = 104 daysCash Conversion Cycle = (33) days

Cash conversion cycleAs both the companies have long

time period of payment from their suppliers they have negative cash conversion cycle

Tata motors has better suppliers payment period than Bajaj

FIXED ASSET TURNOVER RATIO

Bajaj = 18945.52 / 5958.22

= 3.18

Tata Motors = 165654.49 / 80469.74

= 2.06Bajaj is able to use its assets more

efficiently to produce sales

TOTAL ASSET TURNOVER RATIO

Bajaj =18945.52 / 11162.41=1.697

Tata =165654.59 / 64461.47

=2.57But over all Tata is more able to

use its total assets to produce sales

DEBT EQUITY RATIO

Bajaj =254.55 / 6081.72=0.0418

Tata Motors =30421.06 / 33149.06

=0.918Bajaj has lesser debt than Tata

motors but both the companies has lower debt equity ratio than standard ratio.

LIABILITY TO EQUITY RATIOBajaj = 5080.69 / 6081.72

= 0.835

Tata Motors = 112232.77 / 33149.93

= 3.39

INTEREST COVERAGE RATIOBajaj = 4234.58 / 22.79

=185.81

Tata Motors = 22084.06 / 2982.22

=7.405Bajaj is able to repay the interest

rate 185 times which is higher than Tata because Tata has huge long term liabilities.

RETURN ON EQUITY

Bajaj = 3045.4 / 6081.72= 50.07%

Tata Motors =13516.5 / 33149.93

= 40.7%Bajaj has greater return on equity

than Tata.

RETURN ON TOTAL ASSETSBajaj = 3045.4 / 11162.41

= 27.28%

Tata Motors = 13516.5 / 145382.64

= 9.29%

RETURN ON CAPITAL EMPLOYED

Bajaj = 3045.4 / 6387.71= 47.68%

Tata = 13516.5 / 63570.99

= 21.26%

EARNINGS PER SHARE(EPS)Bajaj = 3045.4 / 28.937

=105.2

Tata Motors = 13516.5 / 63.475=212.94

GROSS PROFIT MARGIN

Bajaj = 4466.1 / 18945.52= 23.58%

Tata Motors = 48905.99 / 165654.49

= 29.52%Gross profit of Tata is greater than

Bajaj that shows that Tata has greater efficiency in manufacturing.

PRICE EARNING RATIO

Bajaj =1677.9 / 105.2=15.92

Tata Motors = 275.7 / 212.94=1.294

Bajaj has a higher p/e ratio that shows that investor has ready to invest at higher price.

PAY-OUT RATIO

Bajaj = 45 / 105.2= 0.427

Tata Motors = 40.50 / 212.94= 0.19

Bajaj is paying greater part of their earning as dividend

DIVIDEND YIELD RATIO

Bajaj = 45 / 1677.9= 0.0268

Tata Motors = 40.50 / 275.7= 0.146

It shows the real return to the investors as a percent of current market price. Tata has better return.

Price fluctuation

Price changes of Bajaj’s share 1680-1460/1460=15.07%Price changes of Tata’s share 275.70- 249.5/249.5=10.5%As Bajaj is paying higher dividend

and has better profitability ratios and lesser risk therefore they have more growth in market price,