MRF tyre is a leading brand in the tyre industry in India. The financial position of MRF Ltd. is sound. The liquidity position, short term solvency position and profitability is satisfactory. The progress made by the company during the last 10 years is exceptionally well. The company is growing speedily. Recently MRF won the silver award and is the only Indian company to win this excellence award.

1. Page 1
Subject: Financial Management.
Topic: Analysis of balance sheet and
Ratio statement.
Project Submitted By: Project Submitted To:
Name: Zil Shah Prof.Afrin.R
Class:E-MBA
Roll No: 81

2. Page 2
INDEX
Sr. no particulars Page no.
1 Company profile -
MRF
4
2 Profit and loss
account
6
3 Balance sheet 8
4 Ratio analysis 9
5 Conclusion 13
6 Bibliography 16

3. Page 3
ACKNOWLEDGEMENT
I would like to thank all those who have directly or
indirectly helped me in completing this project
report. I would like to thank Prof.Afrin.R for
giving me this project and also for her continuous
guidance which helped me to successfully do the
project.

4. Page 4
COMPANY PROFILE
The MRF story is a truly remarkable one. What started as a
rubber balloon factory with a funding of Rs.14, 000 way back
in the 40’s is now a multibillion legacy that produces quality
tyres used all around India & internationally along with a
presence in paints & coats, toys, motorsports and cricket
training.
MRF’s origin traces back to the humble shack in Madras that
housed its first makeshift toy balloon manufacturing unit set
up by KM Mammen Mappillai in 1946. It was not until 1952
when it changed course and turned to tread rubber
manufacturing. Thus began its glorious reign as the undisputed
leader in the tyre making industry.
By the early 60’s, MRF was exporting its quality tyres to
offices overseas in the U.S. & Beirut and soon made its
presence known globally across 65 different countries - with
tyres rolling out of 6 interdependent facilities built across 450
acres, 3000 strong dealer networks and 180 different offices
MRF is recognized for its drive towards continuous quality
improvement and customer satisfaction. It has won the JD
Power award not once but 10 times till date. It has also won
the TNS and CAPEXIL awards for being voted as the most
trusted tyre company in India.

5. Page 5
MRF’s passion for motorsports is seen through its
involvement in racing, karting, rallying and various other
motorsport events. Its rallying team has won the prestigious
FIA Asia Pacific Rally Championship twice and even in
international championships, MRF karting tyres homologated
by FIA, is the preferred choice.
MRF Ltd sells its products in the replacement/retail market
only through authorized dealers to ensure genuine products
and the best after sale service to the customers. The internet
sites or web based sites (on-line sellers) are not authorized by
MRF Ltd to sell and to
make any representation
for and on behalf of MRF
Ltd and its products.
Hence MRF Ltd may not
honor any unauthorized
claims, warranty,
representations made by
any unauthorized retailers
including on-line sellers
on MRF products.
MRF shares a passion for
quality tyres and fast cars
just as it does for quality
cricket and fast bowlers. It has chosen to associate itself with
some of the world’s best fast bowlers through ‘Pace
Foundation’ - An academy that has trained legends such as
Irfan Pathan, Munaf Patel, RP Singh, Bret Lee, Shoaib Akhtar,
Glenn McGrath and many more.

6. Page 6
Profit and loss account of MRF
Profit & Loss account of MRF Rs. (In cr) Rs. (In cr)
Sep '14 Sep '13
12 months 12 months
Income
Sales Turnover 13,197.58 12,131.16
Excise Duty 0.00 0.00
Net Sales 13,197.58 12,131.16
Other Income 65.62 29.03
Stock Adjustments -19.18 26.73
Total Income 13,244.02 12,186.92
Expenditure
Raw Materials 8,635.06 8,137.76
Power & Fuel Cost 664.67 600.11
Employee Cost 732.69 603.49
Other Manufacturing Expenses 0.00 0.00
Selling and Admin Expenses 0.00 0.00
Miscellaneous Expenses 1,218.04 1,049.89
Preoperative Exp Capitalised 0.00 0.00
Total Expenses 11,250.46 10,391.25
Sep '14 Sep '13
Operating Profit 1,927.94 1,766.64
PBDIT 1,993.56 1,795.67
Interest 231.58 195.94
PBDT 1,761.98 1,599.73
Depreciation 423.09 372.93
Other Written Off 0.00 0.00
Profit Before Tax 1,338.89 1,226.80
Extra-ordinary items 0.00 0.00
PBT (Post Extra-ord Items) 1,338.89 1,226.80
Tax 441.00 424.59
Reported Net Profit 897.89 802.21
Minority Interest 0.01 0.01
Share Of P/L Of Associates 0.00 0.00
Net P/L After Minority Interest & Share Of
Associates
908.32 808.60
Total Value Addition 2,615.40 2,253.49
Preference Dividend 0.00 0.00
Equity Dividend 21.20 12.72
Corporate Dividend Tax 4.19 2.15
Per share data (annualised)

7. Page 7
Shares in issue (lakhs) 42.41 42.41
Earning Per Share (Rs) 2,117.09 1,891.49
Equity Dividend (%) 500.00 300.00
Book Value (Rs) 10,651.94 8,594.71

8. Page 8
Balance sheet of MRF
Balancesheet of MRF Rs. (In cr) Rs. (In cr)
Sep '14 Sep '13
12 months 12 months
Sources Of Funds
Total Share Capital 4.24 4.24
Equity Share Capital 4.24 4.24
Share Application Money 0.00 0.00
Preference Share Capital 0.00 0.00
Init. Contribution Settler 0.00 0.00
Preference Share Application Money 0.00 0.00
Employee Stock Option 0.00 0.00
Reserves 4,513.40 3,640.90
Networth 4,517.64 3,645.14
Secured Loans 1,390.87 1,259.92
Unsecured Loans 424.13 168.77
Total Debt 1,815.00 1,428.69
Minority Interest 0.11 0.10
Policy Holders Funds 0.00 0.00
Group Share in Joint Venture 0.00 0.00
Total Liabilities 6,332.64 5,073.83
Sep '14 Sep '13
12 months 12 months
Application Of Funds
Gross Block 6,309.76 5,459.38
Less: Revaluation Reserves 0.00 0.00
Less: Accum. Depreciation 2,881.07 2,489.84
Net Block 3,428.69 2,969.54
Capital Work in Progress 626.67 359.12
Investments 1,087.91 906.16
Inventories 1,799.70 1,795.29
Sundry Debtors 1,708.47 1,556.14
Cash and Bank Balance 707.67 330.81
Total Current Assets 4,215.84 3,682.24
Loans and Advances 437.85 340.28
Fixed Deposits 0.00 0.00
Total CA, Loans & Advances 4,653.69 4,022.52
Deferred Credit 0.00 0.00
Current Liabilities 3,059.16 2,839.20
Provisions 405.16 344.31
Total CL & Provisions 3,464.32 3,183.51
Net Current Assets 1,189.37 839.01
Minority Interest 0.00 0.00
Group Share in Joint Venture 0.00 0.00
Miscellaneous Expenses 0.00 0.00
Total Assets 6,332.64 5,073.83
Contingent Liabilities 2,563.95 1,646.12
Book Value (Rs) 10,651.94 8,594.71

9. Page 9
RATIO ANALYSIS
Liquidity ratio:
Current ratio = Current Assets/Current Liabilities
2014 2013 comparison
4215.84
3039.16
3682.24
2839.20
1.38 1.29 0.09
Quick ratio = (Current Assets – Inventory)
Current Liabilities
2014 2013 Comparison
4215.84-1799.70
3039.16
3682.24-1795.29
2839.20
0.79 0.66 0.13
Solvency ratio:
Debt-equity ratio = Total Debt/Total Equity
2014 2013 Comparison
1815.00
4526.12
1428.69
4.24
0.40 0.39 0.01
Interest coverage ratio = EBIT/Interest
2014 2013 Comparison
1570.47
231.58
1422.74
195.94
6.78 7.26 (0.48)

10. Page
10
Profitability Ratios:
Net profit margin = Gross Profit × 100 / Total Revenue
2014 2013 Comparison
897.89×100
13197.58
802.21×100
12131.16
6.76 6.61 0.15
Gross profit margin = Gross profit x 100
Net sales
2014 2013 Comparison
1504.52×100
13197.58
1392.65×100
12131.16
11.40 11.48 (0.080)
Return on asset =Net Income/ Average Total Assets
2014 2013 Comparison
897.89×100
13197.58
802.21×100
12131.16
6.80 6.61 0.19
Return on equity = Net Income/ Average Total Equity
2014 2013 Comparison
897.89×100
4.24
802.21×100
4.24
21176.65 18920.04 2256.61

11. Page
11
Return on investment = Net Income/ Average investment
2014 2013 Comparison
897.89×100
4.24
802.21×100
4.24
21176.65 18920.04 2256.61
Return on capital employed
(ROCE) = Net profit after taxes + interest x 100
Capital employed
2014 2013 Comparison
897.89+231.58×100
6,332.64
802.21+195.94×100
5,073.83
17.83 19.67 (1.84)
Turnover ratio
Inventory turnover ratio = COGS / Average Inventory
2014 2013 Comparison
13,197.58-1,927.94
1,797.49
12,131.16 -1,766.64
1720.62
6.26 6.02 0.24
Creditor turnover ratio = Credit sales
Average Debtors & bill receivables
2014 2013 Comparison
13,197.58-1,927.94
1,797.49
12,131.16 -1,766.64
1720.62
6.26 6.02 0.24
*assuming credit sales = sales

12. Page
12
DuPont Analysis:
Two-level Analysis:
ROE= Net income × Average assets
Average assets Average equity
Three-level Analysis:
ROE= Net income × Revenue × Average assets
Revenue Average assets Average equity
Five-level:
2014 2013 Comparison
897.89
4.24
802.21
4.24
211.76 189.20 22.56

13. Page
13
CONCLUSION
There is no change in share capital. Reserves and surplus have
decreased then previous year. Secured loan are less than
compared to previous year. Unsecured loan has decreased than
previous year. There has been sale of fixed asset in current
year. There is decrease in debtors. Dividend paid form 12 to
21 this year.
Current ratio is the ratio of current liabilities and current
assets. A current ratio measure the ability of the firm to meet
its current liabilities. It indicates the rupee of current assets
available for each rupee of current liability. As shows in the
table above the current ratio of MRF Ltd is 1.38 :1 at the end
of last financial year as against 1.29:1 of previous year. It
shows the company has kept the current assets level optimally.
It has positive impact on the profitability.
The quick ratio indicates the relation of quick assets with
current liabilities. The table above indicates the quick ratio if
MRF Ltd. is 0.79:1 as against 0.66:1. It means the company
has enough liquid assets to meet short term liabilities. The
short term liquidity position of the concern is satisfactory.
The debt-equity ratio indicates the proportion of borrowed
capital to the net worth. A very high ratio is unfavourable
from firm’s point of view. The above table shows the debt
equity ratio of MRF Ltd. is 0.40:1 and 0.39:1 on the previous
year. It indicates that the company is not much relied on
borrowed capital to finance its activities It raises the
creditworthiness of the company and it further strengthen the
liquidity position of the company

14. Page
14
Gross profit margin is also known as gross margin. It is
calculated by dividing gross profit by sales. Gross profit is the
result of the relation between prices, sales volume and costs.
There is substantial decrease in the gross profit ration of MRF
Ltd in the last two years. It was 11.48% in Sept. 2013 which is
raised to 11.40% in Sept. 2014.
The ratio of net profits to sales essentially the cost price
effectiveness of the operation. The ratio of net profit margin of
MRF Ltd. was 6.76% at the end of last financial year as
against 6.51% in the previous year.
RETURN ON ASSETS Return on the asset is another
indicator of the company’s profitability. It shows how
efficiently the management has used the assets of the
company. ROA of MRF Ltd was 6.80% at the end of last
financial year as against 6.61% in the previous year.
RETURN ON CAPITAL EMPLOYED ROCE indicates how
much return/ profits the company earned on the capital
employedA higher ROCE indicates more efficient use of
capita. ROCE of MRF Ltd. is 17.83% at the end of last
financial year.
INVENTORY TURNOVER RATIO This ratio indicates the
efficiency of the firm in producing and selling its products. It
is calculated by dividing the cost of goods sold by the average
inventory. Inventory turnover ratio of MRF Ltd. is 6.26:1 at
the end of Sept.2013 as compared to 6.02:1 in the previous
year.
MRF tyre is a leading brand in the tyre industry in India. The
financial position of MRF Ltd. is sound. The liquidity

15. Page
15
position, short term solvency position and profitability is
satisfactory. The progress made by the company during the
last 10 years is exceptionally well. The company is growing
speedily. Recently MRF won the silver award and is the only
Indian company to win this excellence award.

16. Page
16
Bibliography
http://www.mrftyres.com/
http://www.moneycontrol.com/india/stockpric
equote/tyres/mrf/MRF
http://www.investopedia.com/