Maruti vs mahindra

MSIL V/S M&MLFINANCIAL STATEMENT ANALYSIS Slide 1

Maruti v/s Mahindra

Harsh Agarwal A39

Kiran Kannan A39

Samiksha Singh A58Shivani Sharan A62Shri Krishan Sharma A63

http://en.wikipedia.org/wiki/File:Mahindra_Rise_New_Logo.svg


COMPANY PROFILE RATIOS COMPARISION MANAGEMENT CONCLUSION

For more than three decades, Maruti Suzuki has been a household name across urban and rural India, through multiple business challenges.

Since 1982, the pride of owning a Maruti Suzuki vehicle has grown despite the availability of multiple brands.

Today, Maruti produces more than 1 million units annually, with 15 different models and over 500 variants



NET SALES AND PAT Profit and Loss Ratios % to Net Sales



FINANCIAL HIGHLIGHTS •Total revenue (net of excise) was Rs. 444,003 million as against Rs. 364,139 million in the previous year showing an increase of 22 percent.

•Sale of vehicles in the domestic market was 1,051,046 units as compared to 1,006,316 units in the previous year showing an

increase of 4 per cent.•Total number of vehicles exported was 120,388 units as compared to 127, 379 units in the previous year.

•Profit before tax (PBT) was Rs. 29,910 million against Rs. 21,462 million showing an increase of 39 per cent and profit after tax (PAT) stood at Rs. 23,921 million against Rs. 16,352 million in the previous year showing an increase of 46 per cent.

DIVIDEND The board recommends a dividend of Rs. 8 (eight) per equity share of Rs. 5 each for the year ended 31st March 2013 amounting to Rs. 2,417 million.

CRISIL RATINGS

The Company was awarded the highest financial credit rating of AAA/stable (long term)and A1 (short term) on its bank facilities by CRISIL

The rating underscores the financial strength of the Company in terms of the highest safety with regard to timely fulfillment of its financial obligations.



• Mahindra & Mahindra Limited (M&M) is an Indian multinational automobile manufacturing corporation headquartered in Mumbai.

• One of the largest vehicle manufacturers by production in India and the largest seller of tractors across the world. It is a part of Mahindra Group, an Indian conglomerate.

• Ranked as the 10th most trusted brand in India, by The Brand Trust Report, India Study 2014.

• Ranked 21st in the list of top companies of India in Fortune India 500 in 2011.

• Major competitors in the Indian market include Maruti Suzuki, Tata Motors, Ashok Leyland, Toyota, Hyundai, Mercedes-Benz (Merc) etc.

• Incorporated in 1945 and converted into Public Limited in 1955 at Mumbai.



The Automotive and Farm Divisions of your Company have shown good performance during the year, reflecting substantial growth in the net income of the Company by 26.8% from Rs. 32,319 crores in the previous year to Rs. 40,990 crores in the year under review.

FINANCIAL HIGHLIGHT

DIVIDEND

A dividend of Rs. 12.50 per Ordinary (Equity) Share and also a Special Dividend of Re. 0.50 per Ordinary (Equity) Share aggregating Rs. 13.00 per Ordinary (Equity) Share of the face value of Rs. 5 each, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date.



OPERATING PROFITS PROFITS

MSIL V/S M&ML

COMPANY PROFILE RATIOS COMPARISION

FINANCIAL STATEMENT ANALYSIS Slide 8

MANAGEMENT CONCLUSION

RATIO ANALYSIS

LIQUIDITY RATIOS

Current Ratio• The Current Ratio formula is:

Current Ratio = Current Assets

• Current Liabilities

Mahindra Maruti

1.02 1.04

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RATIO ANALYSIS

LIQUIDITY RATIOS

Quick RatioQuick Ratio

= Current Assets – Inventories

Current Liabilities Mahindra Maruti

0.77 0.90

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RATIO ANALYSIS

LIQUIDITY RATIOS

Debt Equity Ratio• Debt Equity Ratio= Total Liabilities Share holders Equity

Mahindra Maruti

0.22 0.07

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FINANCIAL LEVERAGE RATIOS

1. Debt to Asset

• Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.

• Total Debt to Total Asset=

(Short term Debt + Long Term Debt)/ Total Assets

Maruti Calculations

1389.20/ 19968.1= 0.069570

Mahindra Calculation

3227.07/ 17885.9 = 0.180425

INFERENCE: -The higher the ratio, the higher the degree of leverage, and consequently, financial risk. Accordingly Mahindra’s financial risk as per the degree of leverage is higher than Maruti’s.

MSIL V/S M&ML





2. Debt to Equity

• A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.

• Debt to Equity=

Total Liabilities/ Shareholder’s equity

Maruti Calculations:

1389.20/(151+ 18427.90) = 0.07477

Mahindra’s Calculations:

3227.07/(295.16+14363.76)= 0.22014

INFERENCE: - Accordingly Maruti’s Debt to Equity ratio is better than Mahindra’s

MSIL V/S M&ML





3. Equity Multiplier

• A measure of financial leverage. Calculated as: Total Assets / Total Stockholders' Equity

The equity multiplier is a way of examining how a company uses debt to finance its assets. Also known as the financial leverage ratio or leverage ratio

Maruti’s Calculations:

Total Assets / Total Stockholders' Equity= 19968.1/(151+18427.9)= 1.0748


Total Assets / Total Stockholders' Equity=

17885.99/(295.16+14363.76)=1.220

INFERENCE: - Higher equity multiplier leads to a higher return on equity. Accordingly Mahindra’s return on equity would be higher than Maruti’s

MSIL V/S M&ML





4. Interest Coverage Ratio• A ratio used to determine how easily a company can pay interest on outstanding debt. The interest

coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) of one period by the company's interest expenses of the same period

• Interest coverage ratio= EBIT/ Interest Expense

Maruti Calculations:

(PBDIT- Dep)/ Interest= (5042-1861.2)/189.8=16.758


PBDIT- Dep)/ Interest=(5349.09-710.81)/191.19=24.260

INFERENCE: - The lower the ratio, the more the company is burdened by debt expense.• A ratio under 1 means that the company is having problems generating enough cash flow to pay its interest

expenses.• Ideally you want the ratio to be over 1.5. Accordingly Mahindra’s Interest coverage ratio is better than

Maruti’s.

MSIL V/S M&ML




WORKING CAPITAL ANALYSIS

PARTICULARS MAR’13 MAR’12 change

Total CA, Loans & Advances 7,868.30 8,022.70

-154.40Total CL & Provisions 6,719.90 6,036.50

683.40

working capital 1,148.40 1,986.20 -837.80

MARUTI MAHINDRA

PARTICULARS MAR’13 MAR’12 change Total CA, Loans & Advances 9,798.79 8,520.77

1,278.02Total CL & Provisions 9,567.60 8,566.67

1,000.93

working capital 231.19 -45.90 277.09

INFERENCE : WORKING CAPITAL OF MAHINDRA IS MORE ALTHOUGH WORKING CAPITAL IN THE YEAR 2013 MARUTI HAS IT HIGHER.

MSIL V/S M&ML

DEBTORS TURNOVER RATIO

YEAR MAR’13 MAR’12


36.92

40.39

Net credit sales/ Average debtors

MARUTI MAHINDRA

YEARMAR’13 MAR’12


19.27

19.61

INFERENCE: This implies that the company is effective enough to extend credit as well as collecting debts. Higher ratio depicts that the company’s collection of debt and extension of credit is efficient. MARUTI has

higher DTR compared to MAHINDRA

MSIL V/S M&ML

CREDITOR TURNOVER RATIO

COGS/ Average creditor

MARUTI MAHINDRA

Cogs = 30613.89 Average creditors= 2208.2Creditor turnover ratio = 13.86

Cogs = 32677.6

Average creditors= 1429.7Creditor turnover ratio = 22.85

INFERENCE: This ratio implies that the company is efficient enough to pay off its suppliers. MAHINDRA is a lower ratio hence; it proves that the company takes time to pay off its creditors

compared MARUTI

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INVENTORY TURNOVER RATIO

MAR’13 MAR’12


23.68

19.81

COGS/ Average Inventory

MARUTI MAHINDRA

INFERENCE: This show how many times the company’s inventory is sold and replaced over a period of time.

MAR’13 MAR’12


16.71

13.51

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OPERATING CYCLE

RECEIVABLES + ITR

MARUTI MAHINDRA

INFERENCE: This implies how well a company manages its critical operational capital assets, as opposed to impact on cash.

RECEIVABLES = 36.92 ITR = 23.68OPERATING CYCLE = 60.6 times

RECEIVABLES = 19.27 ITR = 16.71OPERATING CYCLE =35.98 times

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ACTIVITY BASED RATIOS

• The Inventory turnover ratio is an indicator of how fast the inventory is sold.A high ratio is good from the view point of liquidity and vice versa.

• It is calculated as : Cost of goods sold

• Average Inventory

Mahindra Maruti

11.71% 23.68%

1. Inventory Turnover Ratio

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2. Debtors Turnover Ratio

• The Debtors turnover ratio measures how rapidly receivables are collected. A high ratio is indicative of shorter time-lag between credit sales amd cash collection.

• It is calculated as : Net Credit sales

• Average DebtorsMahindra Maruti

8.60% 36.29%

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3. Average collection period

• The average collection period is an indicator of how fast the money is being received by the debtors. The lower the value the better the result.

• It is calculated as : Total months

• Debtors Turnover RatioMahindra Maruti

1.39 months 0.33 months

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4. Total asset turnover• The amount of sales or revenues generated per

dollar of assets. The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying its assets

• It is calculated as : Sales or Revenues

• Total Assets

• Higher the ratio, the better it is, since it implies the company is generating more revenues per dollar of assets.

Mahindra Maruti

0.49 2.21

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5. Fixed asset turnover

• The amount of sales or revenues generated per dollar of fixed assets. The Fixed Asset Turnover ratio is an indicator of efficiency of fixed assts being utlilized.

• It is calculated as : Sales or Revenues

• Total Fixed Assets

• Higher the ratio, the better it is, since it implies the company is generating more revenues by proper use of its fixed assets.

Mahindra Maruti

1.30 2.25

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Return On Capital Employed(%) 25.42

Return On Net Worth(%) 22.87

Return on Assets 238.75

Return On Capital Employed(%) 15.92

Return On Net Worth(%) 12.87

Return on Asses 615.03

DU PONT ANALYSIS

MSIL V/S M&ML




Earnings Per Share 79.19

Dividend Payout Ratio Net Profit

11.82

Earnings Per Share 54.61

Dividend Payout Ratio Net Profit

26.57

SHAREHOLDER’S RATIOS

Inference1. While Maruti gives a better earnings per share, the Dividend payout ratio to the shareholder’s is better of Mahindra



VISION CORE VALUES

Customer Obsession

Fast, Flexible & First Mover

Innovation & Creativity

Networking & Partnership

Openness & Learning



VISION MISSION

To create a fully collaborative environment in which suppliers can deliver exactly what the company needs, when it needs it, and at a

competitive cost

To create India's largest automobile and automobile-related products distribution

network by providing dealers and customers with

the largest choice of unique world-class

products and services.



CONCLUSION

1. On an average we can conclude that Maruti Suzuki India Limited is performing better in many fronts than Mahindra & Mahindra


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Maruti vs mahindra