Tata Steel Limited is India's largest steel company, established in 1907. It has manufacturing operations in 26 countries and was the 12th largest global steel producer in 2012. Tata Steel aims to be the benchmark for value creation and corporate citizenship. Financial ratio analysis is important for evaluating a company's performance and financial health by calculating ratios from financial statements. Ratios are classified into liquidity, profitability, management efficiency, leverage, and market valuation. An analysis found Tata Steel and JSW Steel had similar financial positions in recent years, though Tata Steel could improve its liquidity ratios and return on capital employed.

1. BY- RASHI GROVER
REGISTRATION NO-11508163

2. ABOUT COMPANY
 Established in 1907 as Asia's first integrated private sector steel
company
• Tata Steel Limited was the 12th largest steel producing company in
the world in 2012, with an annual crude steel capacity of 23.8
million tones
 The second largest private-sector steel company in India (measured
by domestic production) with an annual capacity of over 29 million
tonnes after SAIL and JSW Steel
 Manufacturing operations in 26 countries, including Australia,
China, India, the Netherlands, Singapore, Thailand and the United
Kingdom

3. CONT..
 Tata Steel was awarded the '2015 World's Most Ethical Company'
award under the Metals category by the Ethisphere Institute. This
was the third time that Tata Steel won this award.
 TATA STEEL VISION
“To be the global steel industry benchmark for value creation
and corporate citizenship”

4. FINANCIAL RATIO ANALYSIS
• Useful indicators of a firm's performance and financial situation.
• Calculation and comparison of ratios which are derived from the
information in a company's financial statements
• Interpret the strength and weakness of the firm
• These ratios are calculated from current year figures and then
compared to past years, other companies, the industry, and also
the company to assess the performance of the company.

5. IMPORTANCE OF RATIO ANALYSIS
 Useful indicators of a firm's performance and financial situation
 Measures and evaluates the financial condition and operating
effectiveness of a business institution
 effective control of business operations by means of appraisal targets
both physical and monetary

6. CLASSIFICATION OF RATIOS
 Liquidity & Solvency Ratios
 Profitability Ratios
 Management Efficiency Ratios
 Leverage Ratios
 Market valuation Ratios

7. LEVERAGE RATIOS
0
2
4
6
8
2015
2014
2013
5.45
7.69
6.5
INTEREST COVER RATIO

8. MARKET VALUE RATIOS
0
10
20
30
40
50
60
70
2015
2014
2013
64.49 64.21
50.28
BASIC EARNINGS PER SHARE

9. 500
550
600
650
700
750
2015 2014 2013
709.82
653.03
591.88
NET WORTH PER SHARE

10. COMPARISON WITH
JSW STEEL

11. Liquidity Ratios
0.67
0.3
0.86
0.51
0
0.2
0.4
0.6
0.8
1
CURRENT
RATIO
LIQUID
RATIO
TATA STEEL JSW STEEL

12. Profitability Ratios
0
0.2
0.4
0.6
0.8
1
DEBT EQUITY RATIO RETURN ON CAPITAL EMPLOYED
0.39
10.97%
1
12.75%
TATA STEEL JSW STEEL

13. Efficiency Ratios
0
10
20
30
40
50
60
7.18
54.77
7.31
21.97
TATA STEEL JSW STEEL

14. FINDINGS
• Liquidity ratios should be raised to their ideal ratio
• Company is earning reasonable profit, good sign
• Good inventory turnover annually
• Reasonable return by profitability ratios
• Financial position is good, company needs to maintain
this
• Tata Steel and JSW both had almost same financial
position

15. RECOMMENDATIONS
 Liquidity ratios are lower than standard ratio, should
raise
 Increase inventory turnover ratio
 Increase Return on Capital employed to get good
reasonable profits

16. THANK YOU