A PROJECT REPORT ON

TATA MOTORS FINANCIAL PERFORMANCE ANALYSIS

PROJECT REPORT SUBMITTED TO

PARTIAL FULFILLMENT OF REQUIREMENT FOR THE AWARD OF

DEGREE OF MBA (DUAL SPECALIZATION)

UNDER THE GUIDANCE OF

PROFESSOR

DR. BHUPENDRA KUMAR SIR

SUBMITTED BY:-

i. MOHAMMAD ALTAF KHAN – 23GSOB2010122

ii. MAYANK SINGH – 23GSOB2010366
iii. BISWAJIT SAU – 23GSOB2010074
iv. NAUSHAD AHMAD – 23GSOB2011286
v. AJAY GUPTA

MASTER OF BUSINESS ADMINISTRATION, GALGOTIAS

UNIVERSITY, GREATER NOIDA

I WOULD LIKE TO EXPRESS MY GRATITUDE TO ALL THE

FACULTIES OF THE DEPARTMENT FOR THEIR INTEREST AND
COOPERATION IN THIS REGARD.

1
 TABLE OF CONTENTS

Serial CONTENTS

No. PAGE
NO:

1 INTRODUCTION 3–5

INDUSTRY AND
2 6–7
COMPANY PROFILE

3 DATA ANALYSIS AND 8 – 29

INTERPRETATION

4 30 – 31
SWOT ANALYSIS

5 FINDINGS, 32– 34
SUGGESTIONS &
CONCLUSION

2
 1. INTRODUCTION:-

Introduction

Finance is an integral aspect of every business. The success of an organization

depends on how competently the firm is managing the funds available to them. The
topic for the project is “a study on the financial performance of Tata Motors
Limited”. There are many stakeholders in a company, including trade creditors,
bondholders, investors, employees, and management. Each group has its own interest
in tracking the financial performance of a company. Understanding financial
performance is essential for every organization because most of the organization’s
crucial decisions depend on the financials. Understanding financial performance is
necessary because they help in the decision-making process of the company.
Financial performance analysis is the process of determining the operating and
financial characteristics of a firm from accounting and financial statements. The goal
of such analysis is to determine the efficiency and performance of firm’s
management, as reflected in the financial records and reports.

The study on financial performance of the company is by using ratio analysis, trend
analysis and comparative statements to assess the solvency, liquidity, and
profitability of the selected company. Ratio analysis is a quantitative method of
gaining insight into a company's liquidity, operational efficiency, and profitability by
studying its financial statements such as the balance sheet and income statement. A
comparative statement is a document used to compare a particular financial
statement with prior period statements. Previous financials are presented alongside
the latest figures in side-by-side columns, enabling investors to identify trends, track
a company's progress and compare it with industry rivals.
1.1Statement of the problem

The effectiveness of the financial performance involves decision making in the

organization with the help of various analytical tools to recognize the

1
profitability, solvency and liquidity position and to check whether the
organization is in a position to meet their obligations in properly and timely
manner. Here the problem is to study about the financial performance of Tata
Motors Ltd.

1.2Scope of study

The study was conducted in Tata Motors Ltd to analyze the effectiveness of the
financial performance of the company during the last five years ranging from
2015-2016 to 2019-2020 to have a clear and a proper outline regarding the
financial aspects of the organization by using various analysis tools.

1.3Significance of study

● Assessing the operational efficiency and managerial effectiveness of

thecompany

● Analyzing the financial strengths and weaknesses and creditworthinessof the

company

● Providing information’s about the cash position company is holding andhow

much debit the company has in relation to equity

● Studying the reasonability of stock and debtors held by the company

1.4 Objectives of the study

● To analyze the financial performance of the selected company

● To gain practical knowledge in analysis
● To assess the solvency, liquidity, and profitability.
1.52 Research design

1.52.1 Nature of study

This is an analytical study

1.52.2 Nature of data

Secondary data is used in the study, as the study mainly depended on secondary

2
data.

1.52.3 Source of data

Secondary data is collected from company’s website.

1.52.4 Period of study

The study is based on the current year and past four years. That is 2016-2020.

1.6 sample design

1.6.1 Size of sample

The sample size is limited to one company. The company selected is TATA
Motors ltd.

1.7 Tools of analysis

For analysis, the data collected through secondary source especially the financial
statements of the company, statistical tools such as ratio analysis and
comparative balance sheet are used and the results are interpreted using tables,
graphs and bar diagrams.

1.8 Limitations of study

1. Study involves only automotive industry.

2. Study is mainly based on secondary data.

3
Company profile
Tata Motors limited, is an Indian multinational automotive manufacturing
company headquartered in Mumbai, Maharashtra, India. It is a part of Tata
group, an Indian conglomerate. Its products include passenger cars, trucks, vans,
coaches, buses, sports cars, construction equipments and military vehicles.

Formally, known as Tata Engineering and Locomotive Company (TELCO),

Tata Motors is a part of the Tata Group. Tata Motors has auto manufacturing
and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad,
and Pune in India, as well as in Argentina, South Africa, Great Britian, and
Thailand. It has research and development centers in Pune, Jamshedpur,
Lucknow, and Dharwad, India and South Korea, Great Britian and span. Tata
Motors’ principle subsidiaries purchased the English premium car maker Jaguar
Land Rover (the maker of Jaguar and Land Rover cars) and the South Korean
commercial vehicle manufacturer Tata Daewoo. Tata Motors has a bus-
manufacturing joint venture with Fiat Chrysler which manufactures automotive
components and Fiat Chrysler and Tata branded vehicles. Furthermore, Tata
Motors has OEMs offering an extensive range of integrated, smart and e-
mobility solutions. Its vehicles can now be found on the roads in more than 125
countries. The company generates majority of sales from international markets.

Founded in 1945 as a manufacturer of locomotives, the company manufactured

its first commercial vehicle in 1954 in collaboration with Daimler-Benz AG,
which ended 1969. Tata Motors entered the passenger vehicle market in 1988
with the launch of the Tata Mobile followed by the Tata Sierra in1991,
becoming the first Indian manufacturer to achieve the capability of developing a
competitive indigenous automobile. In 1998, Tata launched the first fully
indigenous Indian passenger car, the Indica, and in 2008 launched the Tata
Nano, the world’s cheapest car. Tata Motors acquired the South Korean truck

4
 manufacturer Daewoo commercial vehicle company in 2004 and purchased
Jaguar Land Rover from Ford in 2008.Tata Motors is listed on the BSE
(Bombay Stock Exchange), where it is a constituent of the BSE SENSEX index,
the National Stock Exchange of India, and the New York Stock Exchange. The
company is ranked 265th on the Fortune Global 500 list of the world’s biggest
corporations as of 2019.On 17 January 2017, Natarajan Chandrasekaran was
appointed chairman of the company Tata Group. Tata Motors increases its
utility vehicle market share to over 8% in FY2019.

Mission

Tata Motors ltd innovate mobility solutions with passion to enhance the quality of
life.

Vision

By FY 2024, the company will become the most aspirational Indian auto
brand, consistently winning, by

● Delivering superior financial returns.

● Delivering sustainable mobility solutions.

● Exceeding customer expectations

5
3. Data analysis and interpretation

3.1 Data Analysis

Data analysis is a process of inspecting, cleansing, transforming, and modeling

data with the goal of discovering useful information, informing conclusions,
and supporting decision-making. Data analysis has multiple facets and
approaches, encompassing diverse techniques under a variety of names, and is
used in different business, science, and social science domains. In today’s
business world, data analysis plays a role in making decisions more scientific
and helping businesses operate more effectively. Although many groups,
organizations, and experts have different ways to approach data analysis, most
of them can be distilled into a one-size-fits-all definition. Data analysis is the
process of cleaning, changing, and processing raw data, and extracting
actionable, relevant information that helps businesses make informed
decisions. The procedure helps reduce the risks inherent in decision making by
providing useful insights and statistics, often presented in charts, images,
tables, and graphs.
Balance sheet

As on 31 March, 2016-2020

(Rs. In crore)
particulars 2015- 2016- 20172018 2018- 2019-
2016 2017 2019 2020
Equity and
liabilities
Equityshare 679.18 679.22 679.22 679.22 719.54
Capital
Reserves and 22582.93 20483.39 19491.76 21483.30 16800.61
surplus

6
Total share 23262.11 21162.61 20170.98 22162.52 18387.65
holders funs

Non- current
liabilities

Longterm 10599.96 13686.09 13155.91 13914.74 14776.51

borrowings

Deferred tax 71.39 147.58 154.61 205.83 198.59

Liabilities
(net)
Other long 3289.91 1451.47 502.37 404.11 1646.56
term
liabilities

Long term 750.89 892.18 1009.48 1281.59 1769.74

provisions

Total 14712.15 16177.32 14822.37 15806.30 18391.40

noncurrent
liabilities

Current
liabilities

Short term 3654.72 5158.52 3099.87 3617.72 6121.36

borrowings

Trade 5141.17 11462.24 14225.63 10408.83 8102.25

payables

Other current 9455.58 4440.42 6030.53 7765.57 10180.46

liabilities

Short term 450.27 477.17 862.92 1148.69 1406.75

provisions

Total 18701.74 21538.35 24218.95 22940.81 25810.82

current
liabilitie
s

7
 Total capital 56676.00 58878.28 59212.30 60909.63 62589.87
and
liabilities
Assets

Non-current

Assets

Tangibles 17573.25 17897.13 18192.52 18316.61 19540.25

assets

Intangible 3502.56 2875.80 3411.23 3970.22 5667.73

assets

Capital work in 1557.95 1902.61 1371.45 2146.96 1755.51

progress

Fixed assets 26762.34 28043.92 26800.35 28573.42 29702.78

Non-current 15217.48 14858.39 14260.79 15434.19 15730.86

investments

Long term 252.93 391.46 143.96 143.13 138.46

Loans and
advances

Other 2581.56 2827.44 3035.54 3529.59 3449..09

noncurrent
assets
Total non 44814.31 46121.21 44240.64 47680.33 49021.11
currents
assets

Current assts

Current 1745.84 2437.42 2502.78 1433.18 885.31

investments

Inventories 5117.92 5553.01 5670.13 4662.00 3831.92

8
Trade 2045.58 2128.00 3479.81 3250.64 1978.06
receivable

Cash and cash 788.42 326.61 795.42 1306.61 3532.19

equivalents

Short term 484.44 215.96 140.27 200.08 232.14

Loans and
advances

Other current 1679.49 2096.07 2383.25 2376.79 3109.14

Assets
Total current 11861.69 12757.07 14971.66 13229.30 13568.76
assets

Total assets 56676.00 58878.28 59212.30 60909.63 62589.87

9
Liquidity Ratio (short term solvency ratio)

1) Current Ratio = current assets/current liabilities

Figure 3.1 showing current ratio

2. Liquid Ratio = liquid assets/current assets

Figure 3.2 showing liquid ratio

3) Super quick ratio = super quick assets/current liabilities Table 3.3 showing

super quick ratio

10
 Figure 3.3 showing super quick ratio

Solvency Ratio (long term solvency ratio)

4) Debt-equity ratio = long term debt/share holders’ fund Table

Figure 3.4 showing debt-equity ratio

11
Proprietary ratio = share holders’ fund/total assets
Figure 3.5 showing proprietary ratio

6) Solvency ratio = total assets/total debt

Total debt = long term borrowings + current liabilities

Table 3.6 showing solvency ratio

YEA SOLVENCY RATIO
RS
2016 56676.00/(10599.96+18701.74) = 1.93:1
2017 58878.28/(13686.09+21538.00) = 1.67:1
2018 59212.30/(13155.91+24218.95) = 1.58:1
2019 60909.63/(13914.74+22940.81) = 1.65:1
2020 62589.87/(14776.51+25810.82) = 1.54:1
The following table shows solvency ratio. If the ratio is more than one it is
treated as satisfactory. Here, the company shows higher ratio than the
satisfactory ratio which indicates the solvency and financial position are
strong.
And in the creditors’ point of view, it shows a greater margin of safety to them.

Figure 3.6 showing solvency ratio

12
Fixed assets to net worth ratio = fixed assets/total share holders’ fund
Table 3.7 showing fixed assets to net worth ratio
YE FIXED ASSETS TO NET WORTH
AR RATIO
2016 26762.34/23262.11 = 1.15:1
2017 28043.92/21162.61 = 1.32 :1
2018 26800.35/20170.98 = 1.33:1
2019 28573.42/22162.52 = 1.29:1
2020 29702.78/18387.65 = 1.62:1
The following table shows fixed assets to net worth ratio. The standard rate of
the fixed assets to net worth ratio is one. The company shows higher ratio for
the past five years, when compared to the standard ratio. A higher ratio
indicates that the outsiders’ funds have been used to acquire a part of fixed
assets.

Figure 3.7 showing fixed assets to net worth ratio

13
7) Fixed assets ratio = (fixed assets/long term funds)*100

Long term funds = share capital + reserves and surpluses + long term
liabilities

Table 3.8 showing fixed assets ratio

YEA FIXED ASSETS RATIO
RS
2016 (26762.34/14712.15)*100 = 181%
2017 (28043.92/16177.32)*100 = 173%
2018 (26800.35/14822.32)*100 = 180%
2019 (28573.42/15806.30)*100 = 180%
2020 (29702.78/18391.40)*100 = 161%
The following table shows fixed assets ratio. The standard percentage is 100%.
Here the company shows decreased mode for the past five years but it is higher
when compared to the standard rate. This indicates that the company’s fixed
assets are more than long term funds. That means fixed assets have been
financed out of short term funds. So the company’s financial position is not
sound.

Figure 3.8 showing fixed assets ratio

14
 8) Capital gearing ratio = fixed income bearing funds/equity share holders’
funds

Table 3.9 showing capital gearing ratio

YE CAPITAL GEARING RATIO
AR
2016 26762.34/10599.96 = 2.52:1
2017 28043.92/13686.09 = 2.05:1
2018 26800.35/13155.91 = 2.04:1
2019 28573.42/13914.74 = 2.05:1
2020 29702.78/14776.51 = 2.01:1
The following table shows capital gearing ratio. Here the company shows higher
ratio than the standard ratio which is 1:1. This indicates that the company is highly
geared. That is, its equity capital is less than its fixed income bearing funds which
is not a risky element to the equity share holders.

Figure 3.9 showing capital gearing ratio

15
 Income statement

As on 31 march 2016-2017

(Rs in crore)
particulars 2015-2016 2016- 2017- 2018- 2019-2020
2017 2018 2019
Income

Revenue 42845.47 44316.34 58831.41 69202.76 43928.17

from
operation
s
Other 1402.31 981.06 1557.60 2554.66 1383.05
income
Total 44247.78 45297.40 60389.01 71757.42 45311.22
revenue
Expenses

Cost of 24997.40 27651.65 37080.45 43748.77 26171.85

materials
consumed
Operatin 418.27 454.48 474.98 571.76 830.24
g and
direct
expenses

16
 Changes 10.05 -252.14 842.05 144.69 722.68
in
inventory
of FG,
WIP,
Stock-In
- Trade
Employee 3188.97 3764.65 3966.73 4273.10 4384.31
benefit
expenses
Finance 1592.00 1569.01 1744.43 1793.57 1973.00
costs
Depreciation 2329.22 3037.12 3101.89 3098.64 3375.29
and
amortization
expenses

17
 Other 6790.29 8802.57 8396.33 7141.52 7182.25
expenses
43820.13 47311.96 60369.27 69155.42 49927.64
Total
expenses

Profit/loss 427.65 -2014.56 19.74 2602.00 -4616.42

before
exceptiona
l

items and tax

-499.55 -415.04 -1054.59 -581.4 -2673.21
(-)exceptional
items and tax

-62.30 -2429.60 -1034.85 2020.60 -7289.63

Profit for the
period

Profitability Ratio 9) Gross profit ratio = (gross profit/revenue from

operation)*100

Figure 3.10 showing gross profit ratio

10) Net profit ratio = (net profit after tax/revenue from operation)*100
Figure 3.11 showing net profit ratio

11) Operating cost ratio = (operating cost/revenue from operation)*100

Table

Figure 3.12 showing operating cost ratio

12) Operating profit ratio = (operating profit/revenue from

operation)*100

Osperating profit = Net profit before taxes + Non-operating expenses –

Non-operating incomes

Table 3.13 showing operating profit ratio

YE OPERATING PROFIT RATIO

19
 AR
2016 (29279.14/42845.47)*100 = 68.34%
2017 (30866.95/44316.34)*100 = 69.65%
2018 (42486.60/58831.41)*100 = 72.22%
2019 (51109.47/69202.76)*100 = 73.85%
2020 (26143.74/43928.17)*100 = 59.47%
The following table shows operating profit ratio. An operating profit ratio
higher than 15% is considered good. The company has higher ratio for the past
five years. So it indicates that the company is earning enough money from
business operations to pay for all of the associated costs involved in
maintaining the business.

Figure 3.13 showing operating profit ratio

Comparative balance sheet

Table 3.14 showing Comparative balance sheet from 2015-16 to 2016-17

particulars 2015- 2016- Increase/decreas
2016 2017 Increase/decre e
ase in amount in percentage
Share capital 679.18 679.22 0.04 0.01%

Reserves 22582.93 20483.39 -2099.54 -9.30%

and
surplus

20
 Long term 10599.96 13686.09 3086.13 29.11%
borrowings

Other LT 3361.30 1599.05 -1762.25 -52.43%

liabilities

LT 750.89 892.18 141.29 18.82%

provisions
Total 14712.15 16177.32 1465.17 9.96%
noncurrent
liabilities
Short term 3654.72 5158.52 1503.80 41.15%
borrowings

Other ST 14596.75 15902.66 1305.91 8.95%

liabilities

ST 450.27 477.17 26.9 5.97%

provisions
Total 18701.74 21538.35 2836.61 15.17%
current
liabilities
Total 56676.00 58878.28 2202.28 3.89%
liabilities

Capital WIP 1557.95 1902.61 344.66 22.12%

Fixed assets 26762.34 28043.92 1281.58 4.79%

Other non- 25431.78 38850.22 13418.44 52.76%

21
 current assets
44814.31 46121.21 1306.9 2.92%
Totalnoncurrent
assets
Inventories 5117.92 5553.01 435.09 8.50%
788.42 326.61 -461.81 -58.57%
Cash and
equivalents
Other current 5955.35 6877.45 922.1 15.48%
Assets
11861.69 12757.07 895.38 7.55%
Total current
assets
Total assets 56676.00 58878.28 2202.28 3.89%
Table 3.15 showing Comparative balance sheet from 2016-17 to 2017-18
particulars 2016- 2017- Increase/ Increase/
Decrease decrease in
2017 2018
in percentage
amount
Share capital 679.22 679.22 0 0%
Reserves and 20483.39 19491.76 -991.63 -4.84%
surplus

Longterm 13686.09 13155.91 -530.18 -3.87%

borrowings

OtherLT 1599.05 656.98 -942.07 -58.19%

liabilities
LT 892.18 1009.48 117.3 13.15%

provisions

Total 16177.32 14822.37 -1354.95 -8.38%

noncurrent

liabilities

Short term 5158.52 3099.87 -2058.65 -39.91%

borrowings

22
Other ST 15902.6 20256.1 4353.5 27.38%
6 6
liabilities
ST 477.17 862.92 385.75 80.84%
provisions
Total current 21538.3 24218.9 2680.6 12.45%
liabilities 5 5

Total 58878.2 59212.3 334.1 0.57%

0
liabilities
Capital WIP 1902.61 1371.45 -531.16 -27.92%
Fixed assets 28043.9 26800.3 -1243.57 -4.43%
2 5
Other non- 38850.2 39044.0 193.82 0.50%
2 4
current assets

Total non- 46121.2 44240.6 -1880.57 -4.08%

current 1 4
assets

Inventories 5553.01 5670.13 117.12 2.11%

Cash and 326.61 795.42 468.81 143.54%
equivalents

Other 6877.45 8506.11 1628.66 23.68%

current
Assets

Total 12757.0 14971.6 2214.59 17.36%

current 7 6
assets

Total 58878.2 59212.3 334.02 0.57%

assets 8 0

23
 Table 3.16 showing Comparative balance sheet from 2017-18 to 2018-19
particulars 2017- 2018- Increase/decrea Increase/decrea
2018 2019 se se
in amount in percentage
Share capital 679.22 679.22 0 0%
Reserves 19491.76 21483.30 1991.54 10.22%
and surplus
Long term 13155.91 13914.74 758.83 5.77%
borrowings
OtherLT 656.98 609.94 -47.04 -7.16%
liabilities
LT 1009.48 1281.59 272.11 26.96%
provisions
Total 14822.37 15806.30 983.93 6.64%
noncurrent
liabilitie
s
Short term 3099.87 3617.72 517.85 16.71%
borrowings
Other ST 20256.16 18174.4 -208.76 -10.28%
liabilities
ST 862.92 1148.69 285.77 33.12%
provisions
Total 24218.95 22940.81 -1278.14 -5.28%
current
liabilities
Total 59212.30 60909.63 1697.33 2.87%
liabilitie
s
Capital WIP 1371.45 2146.96 775.51 56.55%
Fixed assets 26800.35 28573.42 1773.07 6.62%
Other 39044.04 41393.74 2349.7 6.02%
noncurrent
assets
Total non- 44240.64 47680.33 3439.69 7.77%
current
assets

Inventories 5670.13 4662.00 -1008.13 -17.78%

24
 Cash and 795.42 1306.61 511.19 64.27%
equivalents

Other current 8506.11 7260.69 -1245.42 -14.64%

Assets
Total current 14971.6 13229.3 -1742.36 -11.64%
assets 6 0
Total assets 59212.3 60909.6 1697.33 2.87%
0 3
Table 3.17 showing Comparative balance sheet from 2018-19 to 2019-20
particulars 2018- 2019- Increase/ Increase/
decrease decrease in
2019 2020 in percentage
amount
Share 679.22 719.54 40.32 5.94%
capital
Reserves 21483.30 16800.61 -4682.69 21.80%
and
surplus

Long term 13914.74 14776.51 861.77 6.19%

borrowings

Other LT 609.94 1845.15 1235.21 202.21%

liabilities

LT 1281.59 1769.74 488.15 38.09%

provisions
Total 15806.30 18391.40 2582.10 16.35%
noncurrent
liabilities
Short term 3617.72 6121.36 2503.64 69.20%
borrowings

Other ST 18174.4 18282.71 108.31 0.59%

liabilities
ST 1148.69 1406.75 258.06 22.47%
provisions

25
 Total 22940.81 25810.82 2870.01 12.51%
current
liabilities

Total 60909.63 62589.87 1680.24 2.76%

liabilities
Capital 2146.96 1755.51 -391.45 -18.23%
WIP
Fixed assets 28573.42 29702.78 1129.36 3.95%
Other 41393.74 44526.39 2132.65 5.15%
noncurrent
assets

Total 47680.33 49021.11 1340.78 2.81%

noncurrent
assets

Inventories 4662.00 3831.92 -830.08 -17.81%

Cash and 1306.61 3532.19 2225.58 170.33%
equivalents

Other 7260.69 6204.65 -1056.04 -14.54%

current

Assets
Total 13229.30 13568.76 339.46 2.57%
current
Assets

Total assets 60909.63 62589.87 1680.24 2.76%

Interpretation:
In comparative balance sheet, it shows the changes in the items on it on the basis
of just previous year. In case of current assets and current liabilities, the
comparative balance sheet from 2016-17 to 2017-18 shows that current assets
increased to 17.36% and current liabilities to 12.45%. But in case of other three
comparative balance sheets, the current liabilities show higher percentage than
26
 the current assets. When we analyze the comparative balance sheet from 201718
to 2018-19, it shows negative value in case of current assets and liabilities. Thus
it results that, the short term financial position of the company is not satisfied.
In case of liquid assets (cash and equivalents), shows an increase in the current
year of the comparative balance sheet except that of 2015-16 to 2016-17. This
means that, there is an improvement in the liquidity position of the company.

If we analyze the fixed assets, long term liabilities and capital, the share capital
of the company is increased only in the comparative balance sheet of 2018-19
to 2019-20 to 5.94%. The share capital is constant for the others. It also shows
increasing fixed assets and long term liabilities except 2016-17 to 2017-18. If
we compare the increasing fixed assets and long term liabilities in the
comparative balance sheets, we can see that long term liabilities are
comparatively more than the fixed assets. That means, the fixed assets and part
of working capital has also been financed from the long term sources. So, this
indicates that the company’s long term financial position is satisfied.

In case of reserves and surplus of the company, it is in an increasing rate, when

we analyze the last two comparative balance sheets, which means that there is
an improvement in the profitability of the company.
So, it can be interpreted that, the company’s overall financial position is satisfied if
we ignore the short term financial position of the company.

27
 4.SWOT ANALYSIS:-
4.1 Strengths:
1. Diverse Product Portfolio: Tata Motors had a diverse range of
vehicles, including passenger cars, utility vehicles, and commercial
vehicles.
2. Global Presence: The company had a global footprint, with operations
and sales in various international markets.
3. Innovation and Technology: Tata Motors focused on innovation and
adopted advanced technologies in their vehicles, enhancing their
competitiveness.

4.2 Weaknesses:
1. Quality Concerns: Tata Motors faced challenges with product quality,
especially in some of their passenger cars, which affected their reputation.
2. Dependence on Commercial Vehicles: The heavy reliance on
commercial vehicles made Tata Motors vulnerable to economic downturns
in the commercial sector.

4.3 Opportunities:
1. Electric Vehicles (EVs): The increasing interest in electric vehicles
presented an opportunity for Tata Motors to expand their presence in the
EV market.
2. Global Market Expansion: There was room for Tata Motors to further
penetrate and expand in emerging markets and strengthen their position in
established ones.

28
4.4 Threats:

1. Intense Competition: The automotive industry faced fierce competition,

and Tata Motors encountered threats from both domestic and international
competitors.
2. Economic Uncertainty: Economic fluctuations and uncertainties
impacted consumer spending on automobiles, affecting Tata Motors'
sales.

FINDINGS, SUGGESTIONS AND CONCLUSION

5.1Findings

● Current ratio is below the ideal ratio and it is in a declined rate.

● Liquid ratio of the company is not satisfactory because it is lower than the
standard ratio.
● Super quick ratio is not satisfactory because it is lower than the ideal ratio of
the super quick ratio.

● The company’s short term assets are not sufficient to meet the short term
liabilities.
● The company is highly dependent on creditors for the working capital and its
outsiders’ funds are not sufficient to manage their earnings.
● The company’s solvency position is strong as they have sufficient total assets to
meet their debts.
● The company use share holders’ funds and short term funds to finance the fixed
assets
● The company’s equity share capital is less than fixed income bearing funds,
which is a satisfactory element to the share holders.

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 ● The company is in loss for the past five years except 2019, which means that
the company is not able to pay the returns to share holders. The company has to
improve its net profit.
● The company shows lower ratio in operating cost ratio, which is a satisfactory.
● Operating profit ratio shows higher value indicating that it is a good sign.
● In comparative balance sheet, the company’s long term financial position,
liquidity position and profitability are satisfactory.

5.2 Company’s short term financial position is week.Suggestions

The company has to improve its short term financial position by increasing its
working capital. It has no sufficient funds to finance even short term liabilities.
The company is dependent on creditors for working capital, which may lead to
increased liabilities. The company’s share capital is constant for the past five
years. They have to improve its share capital by improving the net earnings.
Generally, the companies do not pay dividend to the investors that they utilize
the dividend amount for operations of the business. Here also the company has
utilized the dividend. This may create a bad impact on the investors. So it is
very important to increase its sales revenue.

5.3 Conclusions
The study highlights, the financial performance of Tata Motors Ltd is
satisfactory. To conclude, Tata Motors company has shown its impact on
industry. We can see the downfall of the company, but it is expected, as it is
such a big company. Looking at all the five years, 2019 is considered the best
financial year out of all the five years, as it has improved its profitability in the
year 2019. If the company manages its revenue from sales and assets, it is
expected to recover from the loss.

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