Do-Pont is the method of measuring the performance which was started by DuPont Corporation in 1920’s. With this method, assets are measured at their gross book value rather than at net book value in order to produce a higher return on equity (ROE). It is also known as "DuPont identity". DuPont analysis tells us that ROE is affected by three things: - Operating efficiency, which is measured by profit margin - Asset use efficiency, which is measured by total asset turnover - Financial leverage, which is measured by the equity multiplier The Du-Pont analysis also called the Du-Pont model is a financial ratio based on the return on equity ratio that is used to analyze a company's ability to increase its return on equity. In other words, this model breaks down the return on equity ratio to explain how companies can increase their return for investors. The Du-Pont analysis looks at three main components of the ROE ratio. • Profit Margin • Total Asset Turnover • Financial Leverage Based on these three performances measures the model concludes that a company can raise its ROE by maintaining a high profit margin, increasing asset turnover, or leveraging assets more effectively It is one of the strongest indicators for a financially successful company. ROE is a great tool for investors because it shows you what the return is on the portion of the company that belongs to equity. It is a simple calculation that quickly summarizes the ability of management to turn shareholder equity into profitable returns There are two other indicators that would like to analyze in a company: profit margin and asset turnover. Ideally we would like to see a company with high numbers for both of these, but that’s not always possible. It is a must that the company has at least one of these performing better than the industry standard. If the asset turnover is low, then the profit margin better be high (a specialty producer with a competitive advantage). If the profit margin is low, then the asset turnover better be high (a low cost provider with large market share). In this report there is comparison between Five automobile companies i.e. Tata motors, Mahindra and Mahindra ,Maruti Suzuki, Hero MotoCorp, and Bajaj Auto through Do-Pont Model The Du-Pont analysis is only the first step in analyzing the firm’s performance. The next step is to dig deeper into the differences between the firm’s performance and the benchmark against which it is being measured. After analyzing these automobile companies I found that Hero MotoCorp maintaining highest ROE as per comparison of others automobile companies more effectively. Additional analysis can include comparing additional financial ratios and common-size financial statements that facilitate comparisons between firms. Common-size financial statements express everything as a percentage of one financial statement parameter, such as sales on the income statement or total assets on the balance she

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Institute of Professional Education and Research
BHOPAL
PGDM BATCH: 2013-15
DISSERTATION REPORT
ON
“A Study of Du-Pont Analysis on Automobile
Companies ”
Submitted By:
Kumari Priyadarshini
(1-2101521342)
Under the Guidance of:
Dr Jyoti Badge

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DECLARATION
I Kumari Priyadarshini, hereby declare that the Dissertation work titled “A study on Du-Pont
analysis of automobile companies” is an authentic work done by me under the guidance and
supervision of my guide Prof. (DR.)Joyti Badge. This project report has been submitted for the
partial fulfillment of requirement of PGDM Degree from IPER Institute, Bhopal
Place: Bhopal KUMARI PRIYADARSHINI
Date:

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ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to Prof. Dr JYOTI BADGE who gave me
the golden opportunity to do this wonderful project on the topic “A STUDY OF DU-PONT
ANALYSIS ON AUTOMOBILE COMPANIES” which also helped me in doing a lot of
research and I came to know so many new things. I am really thankful to them.
I am auxiliary indebted to my guide Prof. Dr JYOTI BADGE for his insightful and helping
approaches throughout this particular research and all those scholarly.
Lastly, I express my thankfulness and extend my appreciation for all those subjects who
participated in my entire research study and I express my heartily thanks to the congregation of
passion for supporting me in all my ways.
BHOPAL KUMARI PRIYADARSHINI
DATE TRIM-VI
IPER [PGDM]

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TABLE OF CONTENTS
Chapter
no
Chapter Title Page no.
1 Conceptual Overview
2 Research Methodology
2.1- Objective of study
2.2- Need of study
2.3- Methodology
2.4- Significance of Study
2.5- Limitation
3 Theoretical Background
3.1- Concepts
3.2- History
4 Case study
5 Data Analysis and Interpretation
6 Findings
Bibliography

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CHAPTER-1
CONCEPTUAL OVERVIEW

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Do-Pont is the method of measuring the performance which was started by DuPont Corporation
in 1920’s. With this method, assets are measured at their gross book value rather than at net book
value in order to produce a higher return on equity (ROE). It is also known as "DuPont identity".
DuPont analysis tells us that ROE is affected by three things:
- Operating efficiency, which is measured by profit margin
- Asset use efficiency, which is measured by total asset turnover
- Financial leverage, which is measured by the equity multiplier
The Du-Pont analysis also called the Du-Pont model is a financial ratio based on the return on
equity ratio that is used to analyze a company's ability to increase its return on equity. In other
words, this model breaks down the return on equity ratio to explain how companies can increase
their return for investors.
The Du-Pont analysis looks at three main components of the ROE ratio.
 Profit Margin
 Total Asset Turnover
 Financial Leverage
Based on these three performances measures the model concludes that a company can raise its
ROE by maintaining a high profit margin, increasing asset turnover, or leveraging assets more
effectively
It is one of the strongest indicators for a financially successful company. ROE is a great tool for
investors because it shows you what the return is on the portion of the company that belongs to
equity. It is a simple calculation that quickly summarizes the ability of management to turn
shareholder equity into profitable returns
There are two other indicators that would like to analyze in a company: profit margin and asset
turnover. Ideally we would like to see a company with high numbers for both of these, but that’s
not always possible. It is a must that the company has at least one of these performing better
than the industry standard. If the asset turnover is low, then the profit margin better be high (a
specialty producer with a competitive advantage). If the profit margin is low, then the asset
turnover better be high (a low cost provider with large market share).
In this report there is comparison between Five automobile companies i.e. Tata motors,
Mahindra and Mahindra ,Maruti Suzuki, Hero MotoCorp, and Bajaj Auto through Do-Pont
Model
The Du-Pont analysis is only the first step in analyzing the firm’s performance. The next step is
to dig deeper into the differences between the firm’s performance and the benchmark against
which it is being measured.

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After analyzing these automobile companies I found that Hero MotoCorp maintaining highest
ROE as per comparison of others automobile companies more effectively.
Additional analysis can include comparing additional financial ratios and common-size financial
statements that facilitate comparisons between firms. Common-size financial statements express
everything as a percentage of one financial statement parameter, such as sales on the income
statement or total assets on the balance sheet. This analysis can provide the management with
valuable insights into how it can improve its operations and increase its ROI.

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CHAPTER-2
RESEARCH METHODOLOGY

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2.1 OBJECTIVE OF STUDY
 To analysis of liquidity, profitability, risk of top five automobile company of India
 To analyses short term position through liquidity analysis.
 To examine the profitability of the company over the study period.
 To know the association between profitability and risk.
2.2 NEED OF THE STUDY
The main objective any business is to maximize the profit. The Company can use its resource to
maximum extent in order to achieve their objective, it is very easy for enterprise to prepare its
financial statement, and know the financial position but it is a challenging task for them to know
liquidity, profitability and risk in companies. This study helps to overcome the above challenge
and to understand the company’s financial strength using different ratio.
2.3 METHODOLOGY
Methodology consists of procedures or behavior set conducting study. This study was
adescriptive study conducted mainly to familiarize with the activities, processes, policies,
programs and procedures followed in the firm required data for the study was collected through
monitoring and calculations.1ata's collected for the study is secondary data, it mainly focus on
the annual reports of the company and information drawn from company manuals and journals.
2.4 SAMPLING
The financial statement of HERO MOTO CROP, MARUTI SUZUKI, BAJAJ AUTO, TATA
MOTORS, and MAHINDRA AND MAHINDRA are taken as a sample for the study.
2.5 DATA COLLECTION
SECOUNDRY DATA
Secondary data was collected from final accounts, books, literature published, and internet and from other
various documents like company manuals, journals, and websites and from other company records.

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2.6 SIGNIFICANCE OF THE STUDY
Any decision affecting the product prices, per unit costs, volume or efficiency has an impact on
the profit margin or turnover ratios. Similarly any decision affecting the amount and ratio of debt
or equity used will affect the financial structure and the overall cost of capital of a company.
Therefore, these financial concepts are very important to evaluate as every business is competing
for limited capital resources. Understanding the interrelationships among the various ratios such
as turnover ratios, leverage, and profitability ratios helps companies to put their money areas
where the risk adjusted return is the maximum.
2.7 LIMITATIONS OF THE STUDY
 This research work is mainly based on secondary data that is, it is based on audited
accounts and its audited account are ambiguous then the result will be misleading.
 Less importance has been given to primary data which is actually the original data and
more reliable.
 Data is used for comparison between 2010-2014
 Resources are limited.

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CHAPTER-3
THORETICAL BACKGROUND

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3.1 CONCEPT
The Du Pont Company of the US pioneered a system of financial analysis, which has received
widespread recognition and acceptance. This system of analysis considers important
interrelationships between different elements based on the information found in the financial
statements.
The Du Pont analysis can be depicted via the following chart:
(Exhibit-1)
At the apex of the Du Pont chart is the Return on Total Assets (ROTA), defined as the product of
the Net Profit Margin (NPM) and the Total Assets Turnover Ratio (TATR). As a formula this
can be shown as follows:
(Net profit/Total asset)= (Net profit/Net sales)*(Net sales/Total assets)
(ROTA) (NPM) (TATR)
Such decomposition helps in understanding how the return on total assets is influenced by the net
profit margin and the total assets turnover ratio.

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The left side of the Du Pont chart shows details underlying the net profit margin ratio. A detailed
examination of this side presents areas where cost reductions may be effected to improve the net
profit margin.
The right side of the chart highlights the determinants of total assets turnover ratio. If this study
is supplemented by the study of other ratios such as inventory, debtors, fixed asset turnover
ratios, a deeper insight into efficiencies and inefficiencies of asset utilisation can be sought.
The basic Du Pont analysis can be extended to explore the determinants of the Return on Equity
(ROE).
Return on equity= Asset turnover * Net profit margin*leverage
(Net profit/Equity)= (Net profit/Sales)*(Sales/Total assets)*(Total assets/Equity)
(ROE) (NPM) (TATR) 1/ (1-DR)
Where DR is the debt ratio= debt (D)/assets (A)
Breaking ROE into these three parts allows evaluation of how well one can manage the
company’s assets, expenses, and debt. A manager has basically three ways of improving
operating performance in terms of ROA and ROE. These are:
 Increase capital asset turnover
 Increase operating profit margins
 Change financial leverage
Each of these primary drivers is impacted by the specific decisions on cost control, efficiency
productivity, marketing choices etc.
This model was developed to analyze ROE and the effects different business performance
measures have on this ratio. So investors are not looking for large or small output numbers from
this model. Instead, they are looking to analyze what is causing the current ROE. For instance, if
investors are unsatisfied with a low ROE, the management can use this formula to pinpoint the
problem area whether it is a lower profit margin, asset turnover, or poor financial leveraging.
Once the problem area is found, management can attempt to correct it or address it with
shareholders. Some normal operations lower ROE naturally and are not a reason for investors to
be alarmed. For instance, accelerated depreciation artificially lowers ROE in the beginning
periods. This paper entry can be pointed out with the Dupont analysis and shouldn't sway an
investor's opinion of the company.

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3.1.1 Basic formula
ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier
(Assets/Equity)
3.1.2 ROE Analysis
Return on equity is an important measure of the profitability of a company. Higher values are
generally favorable meaning that the company is efficient in generating income on new
investment. Investors should compare the ROE of different companies and also check the trend
in ROE over time. However, relying solely on ROE for investment decisions is not safe. It can be
artificially influenced by the management, for example, when debt financing is used to reduce
share capital there will be an increase in ROE even if income remains constant.
The amount of net income returned as a percentage of shareholders equity. Return on equity
measures a corporation's profitability by revealing how much profit a company generates with
the money shareholders have invested.
ROE is expressed as a percentage and calculated as:
Return on Equity = Net Income/Shareholder's Equity
Net income is for the full fiscal year (before dividends paid to common stock holders but after
dividends to preferred stock.) Shareholder's equity does not include preferred shares.
Also known as "return on net worth" (RONW).
3.1.3 ROA- (Return On Assets)
An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to
how efficient management is at using its assets to generate earnings. Calculated by dividing a
company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this
is referred to as "return on investment".
The formula for return on assets is:

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ROA tells you what earnings were generated from invested capital (assets). ROA for public
companies can vary substantially and will be highly dependent on the industry. This is why when
using ROA as a comparative measure, it is best to compare it against a company's previous ROA
numbers or the ROA of a similar company.
The assets of the company are comprised of both debt and equity. Both of these types of
financing are used to fund the operations of the company. The ROA figure gives investors an
idea of how effectively the company is converting the money it has to invest into net income.
The higher the ROA number, the better, because the company is earning more money on less
investment
3.1.4 ROE (Return on Equity)
The amount of net income returned as a percentage of shareholders equity. Return on equity
measures a corporation's profitability by revealing how much profit a company generates with
the money shareholders have invested.
ROE is expressed as a percentage and calculated as:
3.1.5 Return on Equity = Net Income/Shareholder's Equity
Net income is for the full fiscal year (before dividends paid to common stock holders but after
dividends to preferred stock.) Shareholder's equity does not include preferred shares.
The ROE is useful for comparing the profitability of a company to that of other firms in the same
industry.
There are several variations on the formula that investors may use:
1. Investors wishing to see the return on common equity may modify the formula above by
subtracting preferred dividends from net income and subtracting preferred equity from
shareholders' equity, giving the following: return on common equity (ROCE) = net income -
preferred dividends / common equity.
2. Return on equity may also be calculated by dividing net income by average shareholders'
equity. Average shareholders' equity is calculated by adding the shareholders' equity at the
beginning of a period to the shareholders' equity at period's end and dividing the result by two.
3. Investors may also calculate the change in ROE for a period by first using the shareholders'
equity figure from the beginning of a period as a denominator to determine the beginning ROE.
Then, the end-of-period shareholders' equity can be used as the denominator to determine the
ending ROE. Calculating both beginning and ending ROEs allows an investor to determine the
change in profitability over the period.

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3.2 HISTORY
Return on Equity Financial Expression
Efficient use of assets is important for the profitability and growth of any organization. One of
the easiest ways to gauge whether a company is an asset creator or cash user is to look at the
return on equity (ROE) ratio. ROE is a strong measure of how well management is creating
value for shareholders.
In its simplest form, ROE is calculated:
Annual Earnings/Shareholder’s Equity
If the result of this basic ROE ratio increases over time, it is generally considered a good sign.
However, the ratio can also rise when the company takes on more debt, increasing leverage, but
decreasing shareholder equity – a risky situation.
To avoid the false positive that the simple ROE calculation can give, the DuPont Analysis, a
more in-depth method of determining Return on Equity, was developed in the early 1900s.
Origin of DuPont Analysis
F. Donaldson Brown, a staff person in DuPont’s Treasury department, developed the DuPont
model of return on equity.
The DuPont Analysis provides a starting point for determining the strengths and weaknesses of a
company. The model is built on three components, which cover the areas of profitability,
operating efficiency and leverage (liquidity).

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Components of the DuPont Analysis
1. Net Margin (Net Income/Sales). This ratio measures after tax profitability -- how much
profit a company makes for every $1.00 it generates in revenue. Net Income and Sales
figures can be found on the Income Statement. Generally, the higher the ratio, the better.
It should be noted that, in order to generate more sales, management might reduce the net
profit by reducing prices. Lowest-cost firms (like Wal-Mart) have used this strategy very
effectively.
2. Asset Turnover (Sales/Total Assets). This ratio indicates the amount of sales generated
for every dollar’s worth of assets. This evaluates the firm’s efficiency in using its assets.
Typically, the higher, the better. However, this ratio tends to be inversely related to the
net margin, i.e. the higher the net profit margin, the lower the asset turnover.
The Sales number to calculate this ratio is found on the Income Statement. The Asset
figures, however, come from the balance sheet. Income Statement items are measured
over an interval of time, while Balance Sheet items are measured at a specific point in
time. This difference can skew the result. Therefore, rather than using Total Assets, it’s a
good idea to use Average Assets to ensure a more meaningful ratio.
3. Leverage Factor (Average Assets/Average Shareholder Equity). This ratio determines
the extent to which the company relies on debt financing. The higher the number, the
more debt the company is carrying. Averages are used to control any potential bias that
may be caused by end-of-the-year values.
The DuPont Formula -- 3 Step Return on Equity
Net Income
X
Sales
X
Assets
Sales Assets Equity
Utilizing all three ratios, the DuPont Analysis provides deeper insight into the health of the
organization versus the simple ROE calculation (annual earnings/ shareholder’s equity).
For instance, if a company’s return on equity increases because of an improved net profit margin
(net income/sales) or due to increased asset turnover (sales/assets), this is a very positive sign.
But, if the assets to equity result is the reason for the increase, the company could very well be
over leveraged (too much debt), which puts the company in a more risky situation.
While the DuPont Analysis is a good starting point when analyzing the creditworthiness of an
organization, the result is not meaningful unless compared to an industry benchmark. If such a
benchmark is not available, you should at least do a trend analysis of the same company’s return
on equity over 3 or more years.Starting from the era when there was too slim of a variety of cars
available in Indian market, Indian automobile industry has come up a long way to have a diverse

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array of cars these days. There are a number of top automobile companies running their
operations in India, which again have a range of models in different segments of cars. However,
while looking for top 10 automobile companies in India; one name that would always lead the
list is Maruti Suzuki India. Maruti Suzuki has consistently been the dominant leader in the Indian
automobile industry. However, there are also other big names like Tata Motors, Mahindra and
Mahindra, Hyundai Motors, Hindustan Motors etc.
During its early days, the most of the Indian car auto manufacturers banked upon foreign
technologies. But the scenario has changed over the years and currently, the Indian auto
manufacturers are using their own technology. Due to the growing pace of Indian automobile
market, a number of car manufacturers including the global leaders have locked their horns in the
Indian auto market.
After the recent setback due to the global recession, the Indian automobile market has again
started to grow up. Though the auto sales except commercial vehicles started creeping up since
the beginning of this financial year, it's only the month of September 2009 when the market saw
buoyant sales. It fueled optimism in the industry. The retail trade also started soaring up. The
auto sales saw a 9.6% rise in the month of September with a sale of 1,092,262 units. The
passenger vehicle sales also grew by 20.32%. The two wheeler market was also augmented by
7.67% during the same period with a total sale of 838,150 units. The same trade is applicable for
the three-wheeler market, which saw a growth of 13.51% (with sale of 41,137 units) during the
same period.

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CHAPTER-4
CASE STUDY

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4.1 TATA MOTORS
Tata Motors Limited (formerly TELCO, short
for Tata Engineering and Locomotive Company) is
an Indian multinational automotive manufacturing
company headquartered in Mumbai, Maharashtra,
India and a subsidiary of the Tata Group. Its products
include passenger cars, trucks, vans, coaches, buses,
construction equipment and military vehicles. It is
the world's 17th-largest motor vehicle manufacturing
company, fourth-largest truck manufacturer, and
second-largest bus manufacturer by volume.
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 in 1969. Tata Motors entered
the passenger vehicle market in 1991 with the launch
of the Tata Sierra, becoming the first Indian
manufacturer to achieve the capability of developing
a competitive indigenous automobile.[4]
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 was first established in 1935 as a locomotive manufacturing unit. The first commercial vehicle
was manufactured in 1954, in collaboration with Daimler-Benz AG of Germany. In 1960, the first truck,
quite similar to a Daimler truck, rolled out from the Tata factory in Pune. Ever since its launch, the truck
became highly successful. However, the success of the commercial vehicles was just the beginning of the
flourishing and booming future of Tata Motors. The company went ahead diversifying itself and took up
other products as well. Apart from exporting heavy-duty trucks, the company decided to come up with
lighter versions for the local market. Thus, began the production of the first LCV (Light Commercial
Vehicle) model, Tata 407 in 1986.
In the early 1990s, the company began its expansion into the car market. Its first passenger vehicle was Tata
Sierra, a multi utility vehicle that was launched in 1991. Tata came up with three other automobiles,
namely, Tata Estate in 1992 (a station wagon based on the earlier ‘Tata Mobile’ in 1989), Tata Sumo in
1994 (LCV) and Tata Safari in 1998 (India’s first SUV). After thoroughly analyzing the demand of the
consumers, Ratan Tata, the current chairman of Tata Group, decided to build a small car, which was
practically a new venture. Thus, in 1998, India’s first fully indigenous passenger car, Tata Indica was
launched. It received an immediate success, since it was inexpensive and relatively easy to build maintain.
The car was exported to Europe, to UK and Italy. The second generation of Indica, V2 was even more
successful.
Industry- Automobile
Founded- 1945
Founder Jamsetji tata
Area served- World wide
Parent- Tata Group
Slogan- More Dream Per Car.
Website- www.tatamotors.com
Product- Automobiles,
Commercial vehicles,
Coaches,
Buses,
Military vehicles

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Indica’s high success gave Tata Motors the financial power to take over Daewoo Motors in 2004. This gave
the company an opportunity to give their brand international exposure. Today, Daewoo’s trucks are sold as
Tata Daewoo Commercial Vehicle in South Korea. In 2005, the company acquired 21% share in Hispano
Carrocera SA, earning the controlling rights of the company. In January 2008, the global automobile sector
showcased the world’s cheapest car in the form of Tata Nano. Launched by Tata Motors, the car cost only
Rs.1, 00,000 (US $2,500). In the March of that year, Tata Motors also acquired the Jaguar Land Rover
(JLR) business from the Ford Motor Company, which included the Daimler and Lanchester brands.
Tata Motors formed 51:49 joint ventures with Marcopolo of Brazil and came up with manufacturing and
assembling fully-built buses and coaches targeting the developing mass rapid transportation systems. Tata
and Marcopolo jointly have launched low-floor city buses that are widely used by Delhi, Mumbai, Lucknow
and Bangalore transport corporations. Tata Motors has been continuously acquiring foreign brands to
increase its global presence. The company operates in the UK, South Korea, Thailand and Spain. Today,
Tata Motors has its auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow,
Ahmedabad and Pune in India, and in Argentina, South Africa, South Korea and Thailand. It is further
planning to set up more plants in Turkey, Indonesia and Eastern Europe.

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4.2 MAHINDRA AND MAHINDRA LTD
Mahindra and Mahindra Limited (M&M) is an
Indian multinational
automobile manufacturing corporation headquartered
in Mumbai, Maharashtra, India It is one of the largest
vehicle manufacturers by production in India and the
largest manufacturer of tractors across the world. It is
a part of Mahindra Group, an Indian conglomerate.
It was ranked as the 10th most trusted brand in India,
by The Brand Trust Report, India Study 2014. It was
ranked 21st in the list of top companies of India
in Fortune India 500 in 2011.
Its major competitors in the Indian market
include Maruti Suzuki, Tata Motors, Ashok
Leyland, Toyota, Hyundai, Mercedes-Benz
(Merc) and others.
Mahindra And Mahindra Ltd is an India-based
company with operations in 18 industries that
include aerospace, aftermarket, agribusiness,
automotive, components,
Construction equipment, consulting services, defense, energy, farm equipment, finance and
insurance, industrial equipment, information technology, leisure and hospitality, logistics. The
Company’s business segments include Automotive Segment that comprises of sale of automobiles,
spare parts and related services and Farm Equipment Segment, which includes sale of tractors, spare
parts and related services. Its subsidiaries include Tech Mahindra Limited, Mahindra & Mahindra
Financial Services Limited, Mahindra Investments (India) Private Limited, and Mahindra
Investments (International) Private Limited etc.
Industry- Automobile
Founded- 1945(Ludhiana)
Founder- K.C. Mahindra
Area served- World wide
Parent- Mahindra Group
Slogan- Mahindra Rise
Website- www.mahindra.com
Product- Automobiles,
Commercial Vehicles,
Two wheelers

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4.3 MARUTI SUZUKI INDIA LTD
Maruti Suzuki India Limited (/marut̪i suzuki/),
commonly referred to as Maruti and formerly known
as Maruti Udyog Limited, is an automobile
manufacturer in India. It is a subsidiary of Japanese
automobile and motorcycle manufacturer Suzuki. As
of November 2012, it had a market share of 37% of the
Indian passenger car markets.
They started out in 1982 in Gurgaon, Haryana. Little
did the then quiet suburb of New Delhi know that it
was going to become the epicenter of the automobile
revolution in India? The year marked the birth of the
Maruti Suzuki factory. India turned out 40,000 cars
every year. The new Maruti Suzuki 800 hit the streets
to begin a whole new chapter in the Indian automobile
industry.
They set out with an obsession for customer delight,
one that was unheard in the corridors of automobile
manufacturers then. It was about a commitment to
create value through innovation, quality, creativity,
partnerships, openness and learning. It created a road
that was going to lead the world in to a whole new
direction, laid out by Maruti Suzuki.
Today, Maruti Suzuki alone makes 1.5 million Maruti Suzuki family cars every year. That’s one car
every 12 seconds. They drove up head and shoulders above every major global auto company. Yet
their story was not just about making a mark. It was about revolutionary cars that delivered great
performance, efficiency and environment friendliness with low cost of ownership. That’s what we
call true value. They built their story with a belief in small cars for a big future. Their story
encouraged millions of Indians to make driving a way of life. India stepped up with our vision to
take on the fast lane. A comradeship had begun. Something incredible had begun.
So, what drives them? Millions of Indians who’ve put their faith in them. A team of over 12500
dedicated and passionate professionals that turned out 14 cars with over 150 variants. The drive
is backed up by a nationwide service network spanning over 1454 cities and towns and a sales
network that spreads across 1097 cities, 2 state of the art factories. A diesel engine plant with a
capacity upped to turn out 7 lakh diesel cars a year and a commitment to road safety to make
Indian roads safer.
Industry- Automobile
Founded- 1981
Predecessor- Maruti udyog ltd
Headquarter- New Delhi
Product- Automobile
Parent- Suzuki
Slogan- Count on us
Website- www.marutisuzuki.com

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4.4 HERO MOTOCORP LTD
Hero MotoCorp Ltd., formerly Hero Honda, is an
Indian motorcycle and scooter manufacturer based
in New Delhi, India. The company is the largest two
wheeler manufacturer in the world. In India, it has a
market share of about 46% share in 2-wheeler
category. The 2006 Forbes 200 Most Respected
companies list has Hero Honda Motors ranked at
#108. On 31 March 2013, the market capitalization of
the company was INR 308 billion (USD 5.66 billion).
Hero Honda started in 1984 as a joint venture
between Hero Cycles of India and Honda of Japan. In
2010, when Honda decided to move out of the joint
venture, Hero Group bought the shares held by Honda.
Subsequently, in August 2011 the company was
renamed Hero MotoCorp with a new corporate identity.
In June 2012, Hero MotoCorp approved a proposal to
merge the investment arm of its parent Hero Investment
Pvt. Ltd. into the automaker. The decision comes after
18 months of its split from Honda Motors.
"Hero" is the brand name used by the Munjal brothers for their flagship company, Hero Cycles Ltd. A
joint venture between the Hero Group and Honda Motor Company was established in 1984 as the
Hero Honda Motors Limited at Dharuhera, India. Munjal family and Honda group both owned 26%
stake in the Company.
During the 1980s, the company introduced motorcycles that were popular in India for their fuel
economy and low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it – Forget
it' that emphasized the motorcycle's fuel efficiency helped the company grow at a double-digit pace
since inception. In 2001, the company became the largest two-wheeler manufacturing company in
India and globally. It maintains global industry leadership till date. The technology in the bikes of
Hero MotoCorp (earlier Hero Honda) for almost 26 years (1984–2010) has come from the Japanese
counterpart Honda.
Industry- Automobile
Predecessor- Hero Honda Motors Ltd
Founded- 19 January 1982
Head quarter- New Delhi
Product- Motorcycle, Scooter
Parent- Hero Group
Slogan- Hum me hai hero
Website- www.heromotocorp.com

25. 25 | P a g e
4.5 BAJAJ AUTO LTD
Bajaj Auto Limited is an Indian two-wheeler and
three-wheeler manufacturing company. Bajaj Auto
manufactures and sells motorcycles, scooters and auto
rickshaws. Bajaj Auto is a part of the Bajaj Group. It
was founded by Jamnalal Bajaj in Rajasthan in the
1930s. It is based in Pune, Mumbai, with plants
in Chakan (Pune), Waluj (near Aurangabad)
and Pantnagar in Uttarakhand. The oldest plant at
Akurdi (Pune) now houses the R&D centre 'Ahead'.
Bajaj Auto is the world's sixth-largest manufacturer of
motorcycles and the fourth-largest in India. It is the
world’s largest three-wheeler manufacturer.
On 31 March 2013, its market capitalization was INR
520 billion (US$9.57 billion), making it India's 23rd
largest publicly traded company by market
value. The Forbes Global 2000 list for the year 2012
ranked Bajaj Auto at 1,416.
Bajaj Auto came into existence on 29 November 1945
as M/s Bachraj Trading Corporation Private Limited. It
started off by selling imported two- and three-wheelers
in India.
In 1959, it obtained a license from the Government of India to manufacture two-wheelers and three-
wheelers and it became a public limited company in 1960. In 1970, it rolled out its 100,000th
vehicle. In 1977, it sold 100,000 vehicles in a financial year. In 1985, it started producing at Waluj
near Aurangabad. In 1986, it sold 500,000 vehicles in a financial year. In 1995, it rolled out its ten
millionth vehicles and produced and sold one million vehicles in a year.
With the launch of motorcycles in 1986, the company has changed its image from a scooter
manufacturer to a two-wheeler manufacturer.
According to the authors of Globality: Competing with Everyone from Everywhere for Everything,
Bajaj has operations in 50 countries by creating a line of bikes targeted to the preferences of entry-
level buyers
Industry- Automobile
Founder- Jamnalal Bajaj
Hear quarter- Pune, Maharashtra
Products- Motorcycle,
Three wheeler vehicles,
Cars
Parents- Bajaj Group
Slogan- Hamara bajaj
Website- www.bajajauto.com

26. 26 | P a g e
CHAPTER-5
DATA ANALYSIS AND
INTERPRETATION

27. 27 | P a g e
5.1 HERO MOTOCORP
ROE= NET INCOME/EQUITY
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 2,231.83 1,927.90 2,378.13 2,118.18 2,109.08
Equity 39.94 39.94 39.94 39.94 39.94
ROE 55.88 48.27 59.54 53.03 52.81
(Table- 5.1.1)
(Fig-5.1.1)
0.00
10.00
20.00
30.00
40.00
50.00
60.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE
in crore

28. 28 | P a g e
Interpretation
The amount of net income returned as a percentage of shareholders equity. Return on equity measures
a corporation’s profitability by revealing how much profit a company generate with the money
shareholder have invested. ROE of the company is higher in 2012 after that its goes down then in
2014 its start growing. That means company tries to achieve their previous position.

29. 29 | P a g e
ROA= NET INCOME/TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 2,231.83 1,927.90 2,378.13 2,118.18 2,109.08
Total Assets 3,531.05 4,447.22 5,284.68 5,308.40 5,599.87
ROA 0.632 0.434 0.450 0.399 0.377
(Table- 5.1.2)
(Fig- 5.1.2)
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROA
in crore

30. 30 | P a g e
Interpretation
ROA is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as
to how efficient management is at using its assets to generate earning. ROA of Hero MotoCorp shows
ups and downs in last five year. According to analysis firm has to put more effort to utilize their
assets to generate more profits

31. 31 | P a g e
ASSETS TURNOVER RATIO = NET SALES/ TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Sales 15,839.58 19,366.97 23,586.80 23,768.11 25,275.47
Total Assets 3,531.05 4,447.22 5,284.68 5,308.40 5,599.87
Assets Turnover
Ratio 4.486 4.355 4.463 4.477 4.514
(Table- 5.1.3)
(Fig- 5.1.3)
4.250
4.300
4.350
4.400
4.450
4.500
4.550
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Assets Turnover Ratio
in crore

32. 32 | P a g e
Interpretation
Assets Turnover measures firm’s efficiency at using its assets in generating sales and revenue-
the higher the number the better. It’s also indicates price strategy; Companies with low profit
margins tend to have high assets turnover, while those with high profit margin have low assets
turnover. Assets turnover ratio is increasing which shows that performance of using assets in
generating sales increase during the year 2014 as compare to 2010 to 2013

33. 33 | P a g e
GROSS PROFIT MARGIN= GROSS PROFIT * 100/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit 15,730.01 19,278.44 23,436.15 23,729.30 25,242.68
Net Sales 15,839.58 19,366.97 23,586.80 23,768.11 25,275.47
Gross Profit
Margin 99.308 99.543 99.361 99.837 99.870
(Table- 5.1.4)
(Fig- 5.1.4)
99.000
99.100
99.200
99.300
99.400
99.500
99.600
99.700
99.800
99.900
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit Margin
in crore

34. 34 | P a g e
Interpretation
Gross profit margin is the financial matric used to assess a firm’s financial health by revealing
the proportion of money left over from revenue after accounting for the cost of goods sold. Gross
profit margin serves as the source foe playing additional expanses and future saving. Increasing
gross profit margin which is good for the company but in this case gross profit margin increasing
year after year which is good sign for the company

35. 35 | P a g e
NET PROFIT MARGIN= NET PROFIT/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit 2,231.83 1,927.90 2,378.13 2,118.18 2,109.08
Net sales 15,839.58 19,366.97 23,586.80 23,768.11 25,275.47
Net Profit Margin 0.141 0.100 0.101 0.089 0.083
(Table-5.1.5)
(Fig- 5.1.5)
0.000
0.020
0.040
0.060
0.080
0.100
0.120
0.140
0.160
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit Margin
in crore

36. 36 | P a g e
Interpretation
Net profit margin goes down year after year. But in year 2014 firm try to achieve their previous
position in the market. In 2013 net profit margin is 0.089 now it decrease up to 0.083 in 2014

37. 37 | P a g e
FINANCIAL LEVERAGE= ROE/ROA
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE 55.88 48.27 59.54 53.03 52.81
ROA 0.63 0.43 0.45 0.40 0.38
Financial
Leverage 88.41 111.35 132.32 132.91 140.21
(Table-5.1.6)
(Fig- 5.1.6)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Financial Leverage
in crore

38. 38 | P a g e
Interpretation
Financial Leverage can be defined as the degree to which a firm uses fixed income securities,
such as debt and preferred equity. With a high Degree of Financial leverage come High Interest
payments. In this case financial leverage goes up in last five year. In 2014 it is 140.21

39. 39 | P a g e
5.2 BAJAJ AUTO
ROE= NET INCOME/EQUITY
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 1,702.73 3,339.73 3,004.05 3,043.57 3,243.32
Equity 144.68 289.37 289.37 289.37 289.37
ROE 11.77 11.54 10.38 10.52 11.21
(Table-5.2.1)
(Fig-5.2.1)
9.50
10.00
10.50
11.00
11.50
12.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE
in crore

40. 40 | P a g e
Interpretation
The amount of net income returned as a percentage of shareholders equity. Return on equity measures
a corporation’s profitability by revealing how much profit a company generate with the money
shareholder have invested. ROE of the company is higher in 2010 after that its goes down then in
2014 its start growing. That means company tries to achieve their previous position.

41. 41 | P a g e
ROA= NET INCOME/TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 1,702.73 3,339.73 3,004.05 3,043.57 3,243.32
Total Assets 4,266.92 5,201.94 6,138.55 7,973.22 9,665.76
ROA 0.399 0.642 0.489 0.382 0.336
(Table-5.2.2)
(Fig-5.2.2)
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROA
in crore

42. 42 | P a g e
Interpretation
ROA is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as
to how efficient management is at using its assets to generate earning. ROA of Bajaj Auto shows ups
and downs in last five year. According to analysis firm has to put more effort to utilize their assets to
generate more profits.

43. 43 | P a g e
ASSETS TURNOVER RATIO = NET SALES/ TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Sales 11,813.25 16,398.23 19,528.98 19,997.25 20,149.51
Total Assets 4,266.92 5,201.94 6,138.55 7,973.22 9,665.76
Assets Turnover
Ratio 2.77 3.15 3.18 2.51 2.08
(Table-5.2.3)
(Fig-5.2.3)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Assets Turnover Ratio
in crore

44. 44 | P a g e
Interpretation
Assets Turnover measures firm’s efficiency at using its assets in generating sales and revenue-
the higher the number the better. It’s also indicates price strategy; Companies with low profit
margins tend to have high assets turnover, while those with high profit margin have low assets
turnover. Assets turnover ratio is decreasing which shows that performance of using assets in
generating sales declined during the year 2014 as compare to 2010 to 2013

45. 45 | P a g e
GROSS PROFIT MARGIN= GROSS PROFIT * 100/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit 11,705.88 16,297.16 19,397.73 19,955.00 20,146.07
Net Sales 11,813.25 16,398.23 19,528.98 19,997.25 20,149.51
Gross Profit Margin 99.091 99.384 99.328 99.789 99.983
(Table- 5.2.4)
(Fig- 5.2.4)
98.600
98.800
99.000
99.200
99.400
99.600
99.800
100.000
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit Margin
in crore

46. 46 | P a g e
Interpretation
Gross profit margin is the financial matric used to assess a firm’s financial health by revealing
the proportion of money left over from revenue after accounting for the cost of goods sold. Gross
profit margin serves as the source foe playing additional expanses and future saving. Increasing
gross profit margin which is good for the company In this case also after comparing last five year
we can see that in year 2014 firm performance is very good.

47. 47 | P a g e
NET PROFIT MARGIN= NET PROFIT/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit 1,702.73 3,339.73 3,004.05 3,043.57 3,243.32
Net sales 11,813.25 16,398.23 19,528.98 19,997.25 20,149.51
Net Profit Margin 0.144 0.204 0.154 0.152 0.161
(Table- 5.2.5)
(Fig- 5.2.5)
0.000
0.050
0.100
0.150
0.200
0.250
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit Margin
in crore

48. 48 | P a g e
Interpretation
Net profit margin goes down year after year. But in year 2014 firm try to achieve their previous
position in the market. In 2013 net profit margin is 0.125 now it increases up to 0.161 in 2014

49. 49 | P a g e
FINANCIAL LEVERAGE= ROE/ROA
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE 11.77 11.54 10.38 10.52 11.21
ROA 0.40 0.64 0.49 0.38 0.34
Financial Leverage 29.49 17.98 21.21 27.55 33.40
(Table- 5.2.6)
(Fig- 5.2.6)
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Financial Leverage
in crore

50. 50 | P a g e
Interpretation
Financial Leverage can be defined as the degree to which a firm uses fixed income securities,
such as debt and preferred equity. With a high Degree of Financial leverage come High Interest
payments. In this case financial leverage shows ups and downs in last five year in year 2014
financial leverage 33.40

51. 51 | P a g e
5.3 MARUTI SUZUKI INDIA
ROE= NET INCOME/EQUITY
in crore
Mar’10 Mar’11 Mar’12 Mar’13 Mar’14
Net Income 2,497.60 2,288.60 1,635.20 2,392.10 2,783.00
Equity 144.5 144.5 144.5 151 151
ROE 17.28 15.84 11.32 15.84 18.43
(Table-5.3.1)
(Fig- 5.3.1)
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE
in crore

52. 52 | P a g e
Interpretation
The amount of net income returned as a percentage of shareholders equity. Return on equity measures
a corporation’s profitability by revealing how much profit a company generate with the money
shareholder have invested. ROE of the company is higher in 2012 after that its increase then in 2014.
That means company enjoys their profitability.

53. 53 | P a g e
ROA= NET INCOME/TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 2,497.60 2,288.60 1,635.20 2,392.10 2,783.00
Total Assets 12,656.50
14,037.70
16,265.70 19,968.10 22,663.10
ROA 0.197 0.163 0.101 0.120 0.123
(Table- 5.3.2)
(Fig- 5.3.2)
0.000
0.020
0.040
0.060
0.080
0.100
0.120
0.140
0.160
0.180
0.200
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROA
in crore

54. 54 | P a g e
Interpretation
ROA is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as
to how efficient management is at using its assets to generate earning. ROA of Maruti Suzuki shows
ups and downs in last five year. According to analysis firm has to put more effort to utilize their
assets to generate more profits

55. 55 | P a g e
ASSETS TURNOVER RATIO = NET SALES/ TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Sales 29,317.70 36,618.40 35,587.10 43,587.90 43,700.60
Total Assets 12,656.50 14,037.70 16,265.70 19,968.10 22,663.10
Assets Turnover
Ratio 2.316 2.609 2.188 2.183 1.928
(Table- 5.3.3)
(Fig- 5.3.3)
0.000
0.500
1.000
1.500
2.000
2.500
3.000
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Assets Turnover Ratio
in crore

56. 56 | P a g e
Interpretation
Assets Turnover measures firm’s efficiency at using its assets in generating sales and revenue-
the higher the number the better. It’s also indicates price strategy; Companies with low profit
margins tend to have high assets turnover, while those with high profit margin have low assets
turnover. Assets turnover ratio is decreasing which shows that performance of using assets in
generating sales declined during the year 2014 as compare to 2010 to 2013

57. 57 | P a g e
GROSS PROFIT MARGIN= GROSS PROFIT * 100/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit 29,011.92 36,412.20 35,205.60 43,543.70 43,565.80
Net Sales 29,317.70 36,618.40 35,587.10 43,587.90 43,700.60
Gross Profit Margin 98.957 99.437 98.928 99.899 99.692
(Table- 5.3.4)
(Fig- 5.3.4)
98.400
98.600
98.800
99.000
99.200
99.400
99.600
99.800
100.000
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit Margin
in crore

58. 58 | P a g e
Interpretation
Gross profit margin is the financial matric used to assess a firm’s financial health by revealing
the proportion of money left over from revenue after accounting for the cost of goods sold. Gross
profit margin serves as the source foe playing additional expanses and future saving. Increasing
gross profit margin which is good for the company but in this case after 2013 its goes down
which means firm has to try hard to achieve previous position in the market

59. 59 | P a g e
NET PROFIT MARGIN= NET PROFIT/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit 2,497.60 2,288.60 1,635.20 2,392.10 2,783.00
Net sales 29,317.70 36,618.40 35,587.10 43,587.90 43,700.60
Net Profit Margin 0.0852 0.0625 0.0459 0.0549 0.0637
(Table- 5.3.5)
(Fig- 5.3.5)
0.0000
0.0100
0.0200
0.0300
0.0400
0.0500
0.0600
0.0700
0.0800
0.0900
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit Margin
in crore

60. 60 | P a g e
Interpretation
Net profit margin goes down year after year. But in year 2014 firm try to achieve their previous
position in the market. In 2013 net profit margin is 0.0549 now it increases up to 0.0637 in 2014

61. 61 | P a g e
FINANCIAL LEVERAGE= ROE/ROA
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE 17.28 15.84 11.32 15.84 18.43
ROA 0.20 0.16 0.10 0.12 0.12
Financial Leverage 87.59 97.15 112.57 132.24 150.09
(Table- 5.3.6)
(Fig- 5.3.6)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Financial Leverage
in crore

62. 62 | P a g e
Interpretation
Financial Leverage can be defined as the degree to which a firm uses fixed income securities,
such as debt and preferred equity. With a high Degree of Financial leverage come High Interest
payments. In this case financial leverage goes up in last five year. In 2014 it is 150.09 that mean
firm has to pay high interest payments.

63. 63 | P a g e
5.4 MAHINDRA AND MAHINDRA
ROE= NET INCOME/EQUITY
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 2087.75 2662.1 2878.89 3352.82 3758.35
Equity 282.95 293.62 294.52 295.16 295.16
ROE 7.379 9.066 9.775 11.359 12.733
(Table- 5.4.1)
(Fig- 5.4.1)
0.000
2.000
4.000
6.000
8.000
10.000
12.000
14.000
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE
in crore

64. 64 | P a g e
Interpretation
The amount of net income returned as a percentage of shareholders equity. Return on equity measures
a corporation’s profitability by revealing how much profit a company generate with the money
shareholder have invested. ROE of the company is lower in 2010 after that its goes up in 2014. That
means company enjoys their profitability and generates money from shareholder investment.

65. 65 | P a g e
ROA= NET INCOME/TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 2087.75 2662.1 2878.89 3352.82 3758.35
Total Assets 10698.71 12634.49 15345.31 17885.99 20536.35
ROA 0.195 0.211 0.188 0.187 0.183
(Table- 5.4.2)
(Fig- 5.4.2)
0.165
0.170
0.175
0.180
0.185
0.190
0.195
0.200
0.205
0.210
0.215
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROA
in crore

66. 66 | P a g e
Interpretation
ROA is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as
to how efficient management is at using its assets to generate earning. ROA of Mahindra and
Mahindra shows ups and downs in last five year. According to analysis firm has to put more effort to
utilize their assets to generate more profits

67. 67 | P a g e
ASSETS TURNOVER RATIO = NET SALES/ TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Sales 18516.33 23460.26 31853.52 40441.16 40508.5
Total Assets 10678.71 12634.49 15345.31 17885.99 20536.35
Assets Turnover
Ratio 1.734 1.857 2.076 2.261 1.973
(Table- 5.4.3)
(Fig- 5.4.3)
0.000
0.500
1.000
1.500
2.000
2.500
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Assets Turnover Ratio
in crore

68. 68 | P a g e
Interpretation
Assets Turnover measures firm’s efficiency at using its assets in generating sales and revenue-
the higher the number the better. It’s also indicates price strategy; Companies with low profit
margins tend to have high assets turnover, while those with high profit margin have low assets
turnover. Assets turnover ratio is decreasing which shows that performance of using assets in
generating sales declined during the year 2014 as compare to 2010 to 2013

69. 69 | P a g e
GROSS PROFIT MARGIN= GROSS PROFIT * 100/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit 18388.22 22954.83 31189.34 40379.78 40469.64
Net Sales 18516.33 23460.26 31853.52 40441.16 40508.5
Gross Profit Margin 99.308 97.846 97.915 99.848 99.904
(Table- 5.4.4)
(Fig- 5.4.4)
96.500
97.000
97.500
98.000
98.500
99.000
99.500
100.000
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross Profit Margin
in crore

70. 70 | P a g e
Interpretation
Gross profit margin is the financial matric used to assess a firm’s financial health by revealing
the proportion of money left over from revenue after accounting for the cost of goods sold. Gross
profit margin serves as the source foe playing additional expanses and future saving. Increasing
gross profit margin which is good for the company in this case also company financial health is
good company enjoy its profitability because gross profit margin increase year after year which
is good for company as well as shareholders.

71. 71 | P a g e
NET PROFIT MARGIN= NET PROFIT/ NET SALES
in crore
Mar’10 Mar’11 Mar’12 Mar’13 Mar’14
Net Profit 2,087.75 2,662.10 2,878.89 3,352.82 3,758.35
Net sales 18516.33 23460.26 31853.52 40441.16 40508.5
Net Profit Margin 0.113 0.113 0.090 0.083 0.093
(Table- 5.4.5)
(Fig-5.4.5)
0.000
0.020
0.040
0.060
0.080
0.100
0.120
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit Margin
in crore

72. 72 | P a g e
Interpretation
Net profit margin goes down year after year. But in year 2014 firm try to achieve their previous
position in the market. In 2013 net profit margin is 0.007 now it increases up to 0.010 in 2014

73. 73 | P a g e
FINANCIAL LEVERAGE= ROE/ROA
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE 7.38 9.07 9.77 11.36 12.73
ROA 0.20 0.21 0.19 0.19 0.18
Financial Leverage 37.811 43.030 52.103 60.598 69.577
(Table- 5.4.6)
(Fig- 5.4.6)
0.000
10.000
20.000
30.000
40.000
50.000
60.000
70.000
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Financial Leverage
in crore

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Interpretation
Financial Leverage can be defined as the degree to which a firm uses fixed income securities,
such as debt and preferred equity. With a high Degree of Financial leverage come High Interest
payments. In this case financial leverage goes up in last five year. In 2014 it is 69.577

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5.5 TATA MOTORS
ROE= NET INCOME/EQUITY
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Sales 35373.29 47088.44 54306.56 44765.72 34288.11
Total Assets 31405.06 34651.49 30637.64 33380.22 33669.31
Assets Turnover Ratio 1.13 1.36 1.77 1.34 1.02
(Table- 5.5.1)
(Fig- 5.5.1)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar;14
ROE
in crore

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INTERPRETATION
The amount of net income returned as a percentage of shareholders equity. Return on equity measures
a corporation’s profitability by revealing how much profit a company generate with the money
shareholder have invested. ROE of the company is higher in 2010 after that its goes down then in
2014 its start growing. That means company tries to achieve their previous position.

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ROA= NET INCOME/TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Income 2240.08 1181.82 1242.23 301.81 334.52
Total Assets 31405.06 34651.49 30637.64 33380.22 33669.31
ROA 0.071 0.034 0.041 0.009 0.010
(Table- 5.5.2)
(Fig- 5.5.2)
0.000
0.010
0.020
0.030
0.040
0.050
0.060
0.070
0.080
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROA
in crore

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Interpretation
ROA is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as
to how efficient management is at using its assets to generate earning. ROA of Tata Motors shows
ups and downs in last five year. According to analysis firm has to put more effort to utilize their
assets to generate more profits.

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ASSETS TURNOVER RATIO = NET SALES/ TOTAL ASSETS
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Sales 35373.29 47088.44 54306.56 44765.72 34288.11
Total Assets 31405.06 34651.49 30637.64 33380.22 33669.31
Assets Turnover Ratio 1.13 1.36 1.77 1.34 1.02
(Table- 5.5.3)
(Fig- 5.5.3)
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Assets Turnover Ratio
in crore

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Interpretation
Assets Turnover measures firm’s efficiency at using its assets in generating sales and revenue- the
higher the number the better. It’s also indicates price strategy; Companies with low profit margins
tend to have high assets turnover, while those with high profit margin have low assets turnover.
Assets turnover ratio is decreasing which shows that performance of using assets in generating sales
declined during the year 2014 as compare to 2010 to 2013.

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GROSS PROFIT MARGIN= GROSS PROFIT * 100/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross profit 34667.51 46132.64 53609.72 44632.52 33695.61
Net Sales 35373.29 47088.44 54306.56 44765.72 34288.11
Gross profit Margin 98.00 97.97 98.72 99.70 98.27
(Table- 5.5.4)
(Fig- 5.5.4)
97.00
97.50
98.00
98.50
99.00
99.50
100.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Gross profit Margin
in crore

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Interpretation
Gross profit margin is the financial matric used to assess a firm’s financial health by revealing the
proportion of money left over from revenue after accounting for the cost of goods sold. Gross profit
margin serves as the source foe playing additional expanses and future saving. Increasing gross profit
margin which is good for the company but in this case after 2013 its goes down which means firm has
to try hard to achieve previous position in the market.

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NET PROFIT MARGIN= NET PROFIT/ NET SALES
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit 2240.08 1811.82 1242.23 301.81 334.52
Net sales 35373.29 47088.44 54306.56 44765.72 34288.11
Net Profit Margin 0.063 0.038 0.023 0.007 0.010
(Table- 5.5.5)
(Fig- 5.5.5)
0.000
0.010
0.020
0.030
0.040
0.050
0.060
0.070
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Net Profit Margin
in crore

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Interpretation
Net profit margin goes down year after year. But in year 2014 firm try to achieve their previous
position in the market. In 2013 net profit margin is 0.007 now it increases up to 0.010 in 2014.

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FINANCIAL LEVERAGE= ROE/ROA
in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
ROE 3.925832 1.853225 1.957038 0.473005 0.519619
ROA 0.071329 0.034106 0.040546 0.009042 0.009935
Financial Leverage 55.04 54.34 48.27 52.31 52.30
(Table- 5.5.6)
(Fig- 5.5.6)
44.00
46.00
48.00
50.00
52.00
54.00
56.00
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14
Financial Leverage
in crore

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Interpretation
Financial Leverage can be defined as the degree to which a firm uses fixed income securities, such as
debt and preferred equity. With a high Degree of Financial leverage come High Interest payments. In
this case financial leverage goes down in last five year. In 2014 it is 52.30.

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COMPARISION AMONG THE COMPANIES THROUGH DIFFERENT DU-PONT
FACTORS
ROE= NET INCOME/EQUITY
ROE in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Total
Tata motors ltd 3.9 1.9 2.0 0.5 0.5 8.7
Mahindra and
Mahindra ltd 7.4 9.1 9.8 11.4 12.7 50.3
Maruti Suzuki 17.3 15.8 11.3 15.8 18.4 78.7
Hero Moto Corp 55.9 48.3 59.5 53.0 52.8 269.5
Bajaj auto 11.8 11.5 10.4 10.5 11.2 55.4
(Table- 5.6.1)
(Fig- 5.6.1)
8.7
50.3
78.7
269.5
55.4
ROE
Tata motors ltd
Mahindra and Mahindra ltd
Maruti Suzuki
Hero Moto Cop
Bajaj auto

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Interpretation
After comparing all the five companies it shows that Hero MotoCorp is on the top as compare to
other four companies. ROE of this company is higher than any other company that means Hero
MotoCorp enjoying the profitability and generated money from shareholder investment. Highest ROE
shows that future of Hero MotoCorp is better than any other companies.

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ROA= NET INCOME/TOTAL ASSETS
ROA in c rore
Mar’10 Mar’11 Mar’12 Mar’13 Mar’14 Total
Tata motors ltd 0.07 0.03 0.04 0.01 0.01 0.16
Mahindra and
Mahindra ltd 0.20 0.21 0.19 0.19 0.18 0.96
Maruti Suzuki 0.20 0.16 0.10 0.12 0.12 0.70
Hero Moto Corp 0.63 0.43 0.45 0.40 0.38 2.29
Bajaj auto 0.40 0.64 0.49 0.38 0.34 2.25
(Table 5.6.2)
(Fig- 5.6.2)
Interpretation
After analyzing all the companies result come out is Hero MotoCorp has highest ROE than any other
companies. That means Hero MotoCorp successfully utilizing their assets and generating income
from their assets.
0.16
0.96
0.70
2.29
2.25
ROA
Tata motors ltd
Mahindra and Mahindra ltd
Maruti Suzuki
Hero Moto Cop
Bajaj auto

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ASSETS TURNOVER RATIO = NET SALES/ TOTAL ASSETS
Assets Turnover
Ratio in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Total
Tata motors ltd 1.13 1.36 1.77 1.34 1.02 6.62
Mahindra and
Mahindra ltd 1.73 1.86 2.08 2.26 1.97 9.90
Maruti Suzuki 2.32 2.61 2.19 2.18 1.93 11.22
Hero Moto Cop 4.49 4.35 4.46 4.48 4.51 22.29
Bajaj auto 2.77 3.15 3.18 2.51 2.08 13.69
(Table- 5.6.3)
(Fig- 5.6.3)
Interpretation
Assets Turnover measures of Hero MotoCorp shows the efficiency at using its assets in generating
sales and revenue- the higher the number the better. It’s also indicates their better price strategy;
Companies with low profit margins tend to have high assets turnover
6.62
9.90
11.22
22.29
13.69
Assets Turnover Ratio
Tata motors ltd
Mahindra and Mahindra ltd
Maruti Suzuki
Hero Moto Cop
Bajaj auto

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. GROSS PROFIT MARGIN= GROSS PROFIT * 100/ NET SALES
Gross Profit
Margin in crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Total
Tata motors ltd 98.005 97.970 98.717 99.702 98.272 492.67
Mahindra and
Mahindra ltd 99.308 97.846 97.915 99.848 99.904 494.82
Maruti Suzuki 98.957 99.437 98.928 99.899 99.692 496.91
Hero Moto Corp 99.308 99.543 99.361 99.837 99.870 497.92
Bajaj auto 99.091 99.384 99.328 99.789 99.983 497.58
(Table- 5.6.4)
(Fig- 5.6.4)
Interpretation
As we know Increasing gross profit margin which is good for the company here Hero MotoCorp
has an enough financial health to revealing the proportion of money left over from revenue after
accounting for the cost of goods sold. Gross profit margin serves as the source foe playing
additional expanses and future saving.
492.67
494.82
496.91
497.92
497.58
Gross Profit Margin
Tata motors ltd
Mahindra and Mahindra ltd
Maruti Suzuki
Hero Moto Corp
Bajaj auto

92. 92 | P a g e
NET PROFIT MARGIN= NET PROFIT/ NET SALES
Net Profit Margin
in
crore
Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Total
Tata motors ltd 0.063 0.038 0.023 0.007 0.010 0.141
Mahindra and
Mahindra ltd 0.113 0.113 0.090 0.083 0.093 0.492
Maruti Suzuki India 0.085 0.062 0.046 0.055 0.064 0.312
Hero Moto Corp 0.141 0.100 0.101 0.089 0.083 0.514
Bajaj auto 0.144 0.204 0.154 0.152 0.161 0.815
(Table- 5.6.5)
(Fig- 5.6.5)
Interpretation
Net profit (NP) margin is a useful tool to measure the overall profitability of the business. A high
ratio indicates the efficient management of the affairs of business. Here Hero MotoCorp business is
constantly improving its profitability.
0.141
0.492
0.312
0.514
0.815
Net Profit Margin
Tata motors ltd
Mahindra and Mahindra ltd
Maruti Suzuki India
Hero Moto Corp
Bajaj auto

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FINANCIAL LEVERAGE= ROE/ROA
Financial Leverage in crore
Mar’10 Mar’11 Mar’12 Mar’13 Mar’14 Total
Tata motors ltd 55.04 54.34 48.27 52.31 52.30 262.26
Mahindra and
Mahindra ltd 37.81 43.03 52.10 60.60 69.58 263.12
Maruti Suzuki 87.59 97.15 112.57 132.24 150.09 579.63
Hero Moto Corp 88.41 111.35 132.32 132.91 140.21 605.19
Bajaj auto 29.49 17.98 21.21 27.55 33.40 129.64
(Table- 5.6.6)
(Fig- 5.6.6)
Interpretation
Financial Leverage can be defined as the degree to which a firm uses fixed income securities,
such as debt and preferred equity. Here Hero MotoCorp has a high Degree of Financial leverage
in which they have to pay High Interest paymen
262.26
263.12
579.63
605.19
129.64
Financial Leverage
Tata motors ltd
Mahindra and Mahindra ltd
Maruti Suzuki
Hero Moto Corp
Bajaj auto

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CHAPTER-6
FINDINGS

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 After comparing all the automobile companies I found that Hero MotoCorp performing
very well in the Industry.
 Maruti Suzuki India gives tuff competition to Hero MotoCorp and There is also chances
of growing in automobile industry for Baja Auto, Mahindra and Mahindra and Tata
Motors Ltd.
 The amount of net income returned as a percentage of shareholder equity. Return on
Equity measures a corporation’s profitability by revealing how much profit a company
generates with the money shareholders have invested.
 ROE of the company increase which is a good sign for the company. Increasing ROE
Shows Company is growing.
 Return on Assets (ROA) can vary substantially across different industries. The only
common rule is that the higher return on assets is, the better, because the company is
earning more money on its assets.
 A low return on assets compared with the industry average indicates inefficient use of
company's assets. Return on Assets is one of the profitability ratios and is usually
expressed as a percentage.
 The Asset Turnover is also a key component of DuPont Analysis, which breaks down
Return on Equity into two parts that is profit margin and financial leverage.
 Assets turnover is good or bad depends on the industry in which company operates.
Some industries are simply more asset-intensive than others are, so their overall turnover
ratios will be lower.
 Hero MotoCorp is highest Assets Turnover which impact shows in net profit margin as
well as financial leverage.
 High gross profit margin indicates that the company can make a reasonable profit, as
long as it keeps the overhead cost in control. Low gross profit margin indicates that the
business is unable to control its production cost.
 Gross profit margin can be used to compare a company with its competitors. After
comparing I found that Hero MotoCorp has higher margin because of its good pricing,
cost structure and production efficiency. Therefore, gross profit margin can be used to
compare company's activity over time.

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 Net profit margin is an indicator of how efficient a company is and how well it controls its
costs. The higher the margin is, the more effective the company is in converting revenue into
actual profit.
 As we know Tata Motors shows its downfall after launching Nano car it doesn’t mean that net
profit margin will significantly reduce. That does not mean, necessarily, that the company is
less efficient than other competitors.
 Financial leverage is the amount of debt that an entity uses to buy more assets. Leverage is
employed to avoid using too much equity to fund operations. An excessive amount of financial
leverage increases the risk of failure, since it becomes more difficult to repay debt

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BIBLIOGRAPHY

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BOOKS
 Bhalla V.K “Financial management and policy”, first edition, annual publication, New
Delhi.
 Chandra Prasana, Financial Management, TMH, 4th Edition 1997, New Delhi
 Gupta Sunita “Management of working capital” , First edition, New Century
Publication , New Delhi (2003).
 Gupta S.P , “Management accounting” Sahitya Bhawan Publication, New Delhi 2002
 Kothari C.R “Research methodology- method and technique” second edition, vishwa
prakasan, New Delhi
 Khan and Jain “Financial management” , MH 3rd Edition ,1999
 Sharma R.K & Gupta S.K “Financial Management” Kalyani Publishers New Delhi 2003
 Bodie, Zane; Alex Kane; Alan J. Marcus (2004). Essentials of Investments, 5th ed.
McGraw-Hill Irwin. pp. 458–459
 Bodie, Zane; Alex Kane; Alan J. Marcus (2004). Essentials of Investments, 5th ed.
McGraw-Hill Irwin. p. 460
JOURNALS
 Angell, R.J. and Betty, L.B. (2003), Improving the Coverage of the DuPont Approach of
Financial Analysis in Finance Courses Through the Use of the Net Leverage Multiplier,
“Journal of economics and finance education”, Vol. 2, (2), 1199-1207.
 Dupont Analysis To Measure Return On Equity by Nihar Kiran Nanavati, Volume : 2 |
Issue : 3 | March 2013
 RATIO ANALYSIS FEATURING THE DUPONT METHOD by Thomas J. Liesz
University of Idaho.

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WEBSITES
 www.tatamotors.com/annualreport.
 www.mahindra.com/annualreport.
 www.bajajauto.com/annualreport.
 www.heromotocorp.com/annualreport
 www.marutisuzuki.com/annualreport
 www.moneycontrol.com.
 https://en.wikipedia.org/wiki/DuPont_analysis.
 www.investopedia.com/terms/d/dupontanalysis.asp.
 www.efinancemanagement.com/financial-analysis/dupont-analysis.
 https://thefinancialintern.wordpress.com/.../how-to-use-dupont-analysis.
 www.youtube.com/watch?v=EgqMKHb9ZeE