This document analyzes the ratio analysis of Bajaj Auto Ltd from 2011-2014. It provides background on Bajaj Auto, which was founded in 1926 and is one of the largest manufacturers of two and three-wheelers. It then examines various liquidity ratios like current ratio and quick ratio and profitability ratios like gross profit ratio, net profit ratio, EBITDA margin, return on equity and return on capital employed for Bajaj over the years. It finds that while liquidity and most profitability ratios improved from 2011-2013, return on equity and return on capital employed decreased in 2013-2014 possibly due to increased selling and distribution expenses. Areas for improvement include controlling expenses to boost returns.

1. IIMT School Of Management
Financial Accounting
Module Leader :
Ms. Uma Nagrajan
-
Presented By
Shresth
Kapoor

2. Ratio Analysis Of Bajaj Auto Ltd

3. INTRODUCTION OF BAJAJ AUTO LTD
 Bajaj is a $2.3 billion dollar company founded in
1926 by Mr Jamnalal Bajaj
 Bajaj is world’s fourth largest two and three wheeler
manufacturer.
 Bajaj Auto ranks 96th in “Top 100 World’s Most
Innovative Companies” by Forbes in 2014.
(Bajaj Auto Ltd,2014)

4. Categories of Ratio Analysis
 Liquidity Ratio
 Current Ratio
 Quick Ratio
 Absolute Liquidity Ratio

5.  Profitability Ratio
 Gross Profit Ratio
 Net Profit Ratio
 EBITDA margin
 Return on Equity
 Return on Capital Employed

6. Liquidity Ratio Analysis
2012 2013 2014
Current
Ratio
1.1 1.48 1.19
Quick Ratio 0.96 1.3 1.05
Absolute
Liquidity
Ratio
0.59 0.79 0.59

7. Interpretation
 Increase of CR in year 2012 to 2013 which
suggest that 2012-13 company was in good
position to pay its future debts but in year 2013-
14 as CR is less so company will have problem
in paying future bills on time.
 As Quick ratio suggest that company is having
more cash in his hand and it is not dependent
on sale of inventory for that.
 Company is in a stable liquidity position.

8. Profitability Ratio
2011 2012 2013
Gross Profit
Ratio
22.84% 22.7% 24.39%
Net Profit
Ratio
15.8% 15.66% 16.55%
Return On
Equity
49.22% 37.93% 32.11%
EBITDA
Margin
21.96% 22.75% 24.52%
Return on
capital
employed
63.95% 52.56% 45.52%

9. Interpretation
 From GP Ratio we can suggest that company is
in good position and is making reasonable
profits.
 Increase in NP Ratio suggest that company is
maintaining and trying increasing its overall
profits.
 EBITDA margin has also increased may be
because of less operating expenses.
 ROE & ROCE is decreasing may be because of
increase in S&D expenses.

10. Strengths
 Companies profits are also increasing and
they are controlling on there operating
expenses very well.
 Company is in a stable liquidity position.

11. Areas Of Improvements
 Company need to work on there Selling and
distribution expenses and need to control them
so ROE and ROCE can be improved.
 Company also need to work on there Current
expenses and need to decrease them so ratio
can reach its ideal position .

12. References
 http://www.bajajauto.com
- Annual Report 2011-12
- Annual Report 2012-13
-Annual Report 2013-14