Ratio Analysis – Ashokleyland SUDHEER

June 13, 2018 | Author: Arun Kumar | Category:Profit (Accounting)
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A STUDY ON RATIO ANALYSIS
INTRODUCTION Finance is the life blood of an organization. Without finance nothing is possible. It is impossible to imagine the operation of an advanced industrial society without money. In order to function the organs of the business concern properly, it should be sufficient to meet the liabilities
So I have taken up a study on the financial performance of “Ashok Leyland limited”, as a part of our curriculum activity, since we have gathered data mostly from the annual reports of the “Ashok Leyland limited”. In total five consecutive annual reports have been analyzed for this purpose from the year 2008-2012. The study is made mainly by analyzing few ratios for the given five years
The success of any business operations depends upon the manner by which its financial analysis was done. This study was conducted to ascertain the financial information
A financial statement contains summarized information of the firm’s financial affairs organized systematically. It is used to present the firm’s financial situation to the users. As these statements are used by financial analysts to examine the firm’s performance in order to make investment decisions
Financial statements are prepared from the accounting records maintained by the firm, inadequacy of working capital will lead to business failure. In business profitability and adequate liquidity are very essential
Management accounting & financial accounting provides necessary information to assist the management in the creation of the policy and in day to day operations. It enables the management to discharge all its functions of planning, organizing, staffing, directing and controlling efficiently with the help accounting information. With the background view the present study has been under taken for a proper insight into the “Financial analysis” in “ Ashok Leyland limited”
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A STUDY ON RATIO ANALYSIS
NEED FOR THE STUDY:
1. The study has great significance and provides benefits to various parties who directly or
indirectly interact with the company
2. It is beneficial to the management of the company by providing crystal clear picture
regarding important aspects like liquidity, leverage, activity profitability
3. The study is also beneficial to employees and offers motivation by showing how actively they are contributing for company’s growth
4. The investors who are interested in investing in the company’s shares will also get
benefited by going through the study and can easily take a decision whether to invest or not to invest in the company’s shares
SCOPE OF THE STUDY:
The study is confined to the financial performance of the ASHOK LEYLAND .This study aims at analyzing with help of tools of the financial performance of the company that are: • Ratio analysis • Comparative statement Ratio analysis is the process of computing, determining and presenting the relationship of the items. A financial ratio expresses the relationship between two accounting figures
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A STUDY ON RATIO ANALYSIS
Comparative financial statements are those statements, which have been designed in a way so as to provide time perspective to consider various elements of financial position embodied in such statements
OBJECTIVES
The major objectives of the recent study are to know about Financial strengths and weakness of ASHOK LEYLAND through the RATIO ANALYSIS
The main objectives of recent study is aimed as: 1) To evaluate the performance of the company by using ratios as a yardstick to measure the efficiency of the company
2) To understand the liquidity, profitability and efficiency positions of the company during the study period
3) To evaluate and analyze various facts of the financial performance of the company
4) To make comparisons between the ratios during different periods
5) To offer appropriate suggestions for the better performance of the organization 6) To analyze the capital structure of the company with the help of Leverage ratio
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A STUDY ON RATIO ANALYSIS
RESEARCH METHODOLOGY: Research methodology is the way to systematically solve the research problem .it may be understand as a science of studying how research is done scientifically
This involves exploring all possible methods of solving the research problem examine the alternative methods one by one and arriving at the best possible method considering the resources at the disposal of the researcher
The information is collected through secondary sources during the project. This information was utilized for calculating performance evaluation and based on that, interpretations were made
Sources of secondary data: 1. Most of the calculations are made on the financial statements of the company provided
2.some of the information regarding theoretical aspects were collected from reference books
3. Method- to assess the performance of the company,method of Observation was followed in finance department as follows
• AREA COVERED It covers the financial function of the ASHOK LEYLAND limited
• PERIOD COVERED
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A STUDY ON RATIO ANALYSIS
The study covers the five years period from 2007 to 2011 to have a comprehensive picture
The study suggests the measures for the maximization of the profit in ASHOK LEYLAND Limited
LIMITATIONS OF THE STUDY •
No primary data is used for study

The study has been limited i.e, (2007 -2011)

All ratio could not be covered under the study, because of inadequate information

Opinions of the managers of the organization were taken into consideration. Hence there is a chance for personal bias

The study provides an insight into the financial, personnel, marketing and other aspects of ASHOK LEYLAND. Every study will be bound with certain limitations

One of the factors of the study was lack of availability of ample information. Most of the information has been kept confidential
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A STUDY ON RATIO ANALYSIS
INDUSTRY PROFILE
The automobile industry in India is the tenth largest in the world with an annual production of approximately 2 million units – is expected to become one of the major global automotive industries in the coming years. A number of domestic companies produce automobiles in India and the growing presences of multinational investment, too has led to an increase in overall growth following the economic reforms of 1991 the Indian growth as a result of increased competiveness and relaxed restrictions
History: In 1953, the Govt of India and the Indian private sector initiated manufacturing processes to help develop the automobile industry, which had emerged by the 1940‟s in a nascent form. Between 1940 to the economic liberalization of 1991, the automobile industry continued to grow at a slow pace due to the many govt restrictions. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti udyog. A number of foreign firms joint ventures with Indian companies
AUTOMOBILE INDUSTRY HISTORY: In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented the first automobile to run on roads
This automobile, in fact, was a self-powered, three wheeler, military tractor that made use of steam engine. The range of the automobile, however, was very brief and at the most, it could only run at a stretch for fifteen minutes. In addition, these automobiles were not fit for RAO’S INSTITUTE OF MANAGEMENT STUDIES
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