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1. ICFAI UNIVERSITY,DEHRADUN
SUMMER INTERNSHIP PROJE CT
TOPIC:CASE STUDY ON RATIO ANALYSIS OF ASHOK LEYLAND
GROUP MEMBERS : ENROLLMENT NO:
SAI BHARATH REDDY 22BSPDD01C040
AAYUSHI KUMARI 22BSPDD01C043
B.V.SAI YASHWANTH 22BSPDD01C045
BINDHIYA SINGH 22BSPDD01C048
DEEPAK YADAV 22BSPDD01C053
SUBMITTED TO:
Dr.DEEPTHI KIRAN

2. CONTENTS
 INTRODUCTION OF ASHOK LEYLAND COMPANY
 INTRODUCTION OF RATIO ANALYSIS
 CLASSIFICATION OF RATIO ANALYSIS
 CALCULATION OF RATIO ANALYSIS
 APPLICATIONS OF RATIO ANALYSIS
 STEPS INVOLVED IN FINANCIAL RATIO ANALYSIS
 ADVANTAGES OF RATIO ANALYSIS
 LIMITATIONS OF RATIO ANALYSIS
 CONCLUSION

3. INTRODUCTION TO ASHOK LEYLAND

4. Type Public
Traded as •BSE: 500477
•NSE: ASHOKLEY
ISIN INE208A01029
Industry Automotive
Founded 7 September 1948; 74 years ago
Headquarters Chennai, Tamil Nadu, India
Area served Worldwide
Products •Automobile
•Commercial vehicles
•Engines
Services Vehicle financing
Revenue ₹22,059 crore (US$2.8 billion) (2020)
Operating income ₹2,537 crore (US$320 million) (2020)
Net income ₹456 crore (US$57 million) (2020)
Total assets ₹38,126 crore (US$4.8 billion) (2020)
Total equity ₹7,469 crore (US$940 million) (2020)
Number of employees 11,463 (2020)
Parent Hinduja Group -51.54%
Subsidiaries •Albonair GmbH
•Global TVS Bus Body Builders Limited
•Optare
•Hinduja Leyland Finance
•Hinduja Tech
•Lanka Ashok Leyland
Website www.ashokleyland.com

5. WHAT IS RATIO ANALYSIS?
 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.
 Ratio analysis is a cornerstone of fundamental equity analysis.

6. CLASSIFICATION OF RATIO ANALYSIS
 RATIO ANALYSIS CAN BE CLASSIFIED AS:
1. LIQUIDITY RATIO
2. ACTIVITY RATIO
3. PROFITABILITY RATIO
4. CAPITAL STRUCTURE RATIO
LIQUIDITY RATIO
Ideal liquid ratio=1:1
 Current ratio
 Quick ratio
 Net-Working Capital
 Super-Quick Ratio
 Cash flow from operations ratio

7. ACTIVITY RATIO:
 Stock or Inventory Turnover Ratio
 Trade Receivables or Debtor’s Turnover Ratio
 Trade Payables or Creditor’s Turnover Ratio
 Working Capital Turnover Ratio
PROFITABILITY RATIO
 Gross Profit Ratio
 Net Profit Ratio
 Operating Profit Ratio
 Operating Ratio
 Return on Investment or Return on Capital Employed
 Price Earnings Ratio

8. CAPITAL STRUCTURE RATIO(SOLVENCY RATIO)
 Debt to Equity Ratio
 Debt to Asset Ratio
 Proprietary Ratio
 Fixed-Assets Ratio
 Interest-Coverage Ratio

9. CALCULATION OF RATIO ANALYSIS
 GROSS PROFIT RATIO
1. Also known as Gross Profit Margin ratio,.
2. It establishes a relationship between gross profit earned and net revenue generated from
operations (net sales).
3. Gross profit ratio is a profitability ratio which is expressed as a percentage hence it is multiplied by
100.
4. It also helps find out the lowest selling price of goods per unit to an extent that the business will not
suffer a loss.
 GP RATIO= GP/SALES*100
2012-13 2013-14
GP= 33580.67/134316.04*100 GP=23408.33/106081.29*/100
=25% =22.06%
IT SHOW COMPANY GENERATE MORE PROFIT IN 2012-13

10.  NET PROFIT RATIO
 Also known as Net Profit Margin ratio.
 It establishes a relationship between net profit earned and net revenue generated from
operations (net sales).
 Net profit ratio is a profitability ratio which is expressed as a percentage hence it is multiplied by 100.
 NP ratio helps to determine the overall efficiency of the business’ operations, furthermore, it is an
indicator of how well a company’s trading activities are performing.
NP= NP/NET SALES*100
2012-13 2013-14
NP=4337.06/134316.04*100 NP=293.81/106081.29*100
=3.22% =0.27%

11.  CURRENT RATIO
 The current ratio, also known as the working capital ratio.
 Measures the capability of a business to meet its short-term obligations that are due within a year.
 The ratio considers the weight of total current assets versus total current liabilities.
2012-13 2013-14
CURRENT ASSET/ CURRENT LIABILITIES
= 42768.94/52960.98 38554.35/45866.02
=0.81 =0.84

12. APPLICATIONS OF RATIO ANALYSIS:
 Ratio Analysis Over Time
 Ratio Analysis Across Companies
 Ratio Analysis Against Benchmarks

13. STEPS INVOLVED IN FINANCIAL RATIO ANALYSIS
 An analyst should decide the objectives of ratio analysis.
 Select th0 appropriate ratios on the basis of objectives of ratio analysis.
 Calculation of the selected such ratios.
 Comparison of the calculated ratios with the ratios of the same business concern in the
past.
 Comparison of the calculated ratios with the same type of ratios of other similar business
concern.
 Comparison of the calculated ratios with the same type of ratios of the industry to which
the business concern belongs.
 Interpretation of the ratios.

14. ADVANTAGES
 FORCASTING AND PLANNING
 BUDGETING
 MEASURING OF OPERATIONAL EFFICIENCY
 INDICATION OF LONG –TERM SOLVENCY POSITION

15. LIMITATIONS
 HISTORICAL INFORMATION
 CHANGES IN PRICE LEVEL
 DIFFERENT ACCOUNTING POLICIES

16. CONCLUSION
 The analysis of company was undertaken with help of ratios,which are important monatery
analysis.
 The validation of varied data like record and Profit and Loss account associated with Ashok
Leyland Limited was found during an analytical statement, its clear that profitability more or
less depends upon upper utilization of resources.

17. THANK YOU!