TABLE OF CONTENT

[Link]. Particulars Page No.

Chapter -1 INTRODUCTION 9
A)Industrial profile 10
B)Company profile 12
C)Project profile 15
Chapter-2 RESEARCH METHODOLOGY 17
A)Objective of study 18
B)Research type 19
C)Data type 20
D)Data collection tools 21
E)Limitation of study 21
Chapter-3 DATA ANAYSIS & 22
INTERPRETTION

Chapter 4 FACTS AND FINDINGS 32

Chapter 6 CONCLUSION & SUGGESTIONS 34-52

Chapter 7 BIBLIOGRAPHY 59

Chapter 8 QUESTIONNAIRE AND ANNEXURE 60

CHAPTER-1 INTRODUCTION

A ratio analysis is a quantitative analysis of information contained in a company’s financial

statements. Ratio analysis is based on line items infinancial statements like thebalance sheet,income
statement and cash flow statement; the ratios of one item – or a combination of items - to another item
or combination are then calculated. Ratio analysis is used to evaluate various aspects of a company’s
operating andfinancial performance such as its efficiency,liquidity, profitability andsolvency. The
trend of these ratios over time is studied to check whether they are improving or deteriorating. Ratios
are also compared across different companies in the same sector to see how they stack up, and to get
an idea of comparativevaluations. Ratio analysis is a cornerstone offundamental analysis is good to all
company to check the liquidity in the market or firm to increase it in high level.

Ratio analysis involves the calculation and interpretation of key financial performance indicators to
provide useful insights.

Financial information is always prepared to satisfy in some way the needs of various interested parties
(the "users of accounts"). Stakeholders in the business (whether they are internal or external to the
business) seek information to find out three fundamental questions:

(1) How is the business trading?

(2) How strong is the financial position?

(3) What are the future prospects for the business?

For outsiders, published financial accounts are an important source of information to enable them to
answer the above questions.
To some degree or other, all interested parties will want to ask questions about financial information
which is likely to fall into one or other of the following categories:

Profitability

• Is the business making a profit?

• How efficient is the business at turning revenues into profit?
• Is it enough to finance reinvestment?
• Is it growing?
• Is it sustainable (high quality)?
• How does it compare with the rest of the industry?

Financial efficiency

• Is the business making best use of its resources?

• Is it generating adequate returns from its investments?
• Is it managing its working capital properly?
• Liquidity and gearing
• Is the business able to meet its short-term debts as they fall due?
• Is the business generating enough cash?
• Does the business need to raise further finance?
• How risky is the finance structure of the business?

Shareholder returns

• What returns are owners gaining from their investment in the business?
• How does this compare with similar, alternative investments in other businesses?

Advantages and Disadvantages of Ratio Analysis

Advantages:

• Ratios help compare current performance with previous records.

• Ratios help compare a firm’s performance with similar competitors.
• Ratios help monitor and identify issues that can be highlighted and resolved.

Disadvantages:

• Ratio analysis information is historic – it is not current.

• Ratio analysis does not take into account external factors such as a worldwide recession.
• Ratio analysis does not measure the human element of a firm.

The existence of multiple theories seems unnecessarily complex to modern sensibility since ratios are, to
a large extent, identified with quotients. This is a comparatively recent development however, as can be
seen from the fact that modern geometry textbooks still use distinct terminology and notation for ratios
and quotients. The reasons for this are twofold. First, there was the previously mentioned reluctance to
accept irrational numbers as true numbers. Second, the lack of a widely used symbolism to replace the
already established terminology of ratios delayed the full acceptance of fractions as alternative until the
16th century

Gross Profit Margin

The calculation for this ratio is:

The gross profit margin shows how much profit the business earns above the cost of making the product.
An increase from a previous year means that either revenue has increased faster than costs, or that the
cost of goods sold has decreased, possibly as a result of changing suppliers or through cost negotiations.

Net Profit Margin

The calculation for this ratio is:

The net profit margin shows how much profit is left after all of the business's costs have been paid. The
ratio of Net Profit to Sales is lower than Gross Profit, as all expenses have been deducted from gross
profit. Basically, it shows how much of the money spent by customers is turned into profit.

Liquidity ratios attempt to work out a firm's ability to pay its debts.

Current (working capital) ratio

The calculation for this ratio is:

For example, if a business had $100000 of current assets and $50000 of current liabilities, the
calculation would be:

The current ratio shows what proportion of the business's current liabilities will be met by its current
assets. Basically, it shows whether the firm has enough money to pay its current debts. In the above
example, the current ratio is 2:1, which means that for every dollar they owe, they have two dollars.
Ideally the ratio should be around 1.5:1, as it means the business can easily pay off its debts. If the ratio
is lower than 1:1 the business owes more money that it has. This might not be a problem if more money
will be coming in soon. However, the more below 1 the figure is, the greater the difficulty the firm has
in paying its debts. If the ratio is above 2:1 the business probably has too much money, and it should
invest more back into the business.

Acid test (liquid capital) ratio

The calculation for this ratio is:

This ratio is similar to the current ratio. Stock takes the longest time to be turned into cash (it is the most
illiquid), so if a business can pay its debts whilst ignoring stock, it is in a better position. For this reason,
a good ratio is considered to be about 1:1.
While there are numerous financial ratios, most investors are familiar with a fewkey ratios, particularly
the ones that are relatively easy to calculate. Some of these ratios include thecurrent ratio,return on
equity, the debt-equity ratio, the dividendpayout ratio and the price/earnings (P/E) ratio.

For a specific ratio, most companies have values that fall within a certain range. A company whose ratio
falls outside the range may be regarded as grosslyundervalued or overvalued, depending on the ratio.

For example, if the averageP/E ratio of all companies in the S&P 500 index is 20, with the majority of
companies having a P/E between 15 and 25, a stock with a single-digit P/E would be considered
undervalued, while one with a P/E of 50 would be considered overvalued. Of course, this ratio would
typically only be considered as a starting point, with further analysis required to identify if these stocks
are really as undervalued orovervalued as the P/E ratios suggest.

As well, ratios are usually only comparable across companies in the same sector, since an acceptable
ratio in one industry may be regarded as too high in another. For example, companies in sectors such
asutilitiestypically have a high debt-equity ratio, but a similar ratio for a technology company may be
regarded as unsustainably high.

Many attractive categories of financial ratios and numerous individual ratios have been proposed in the
literature. The most prominent literature on financial analysis - though nimitations of ratios and potential
impact in the financial analysis
 Ratios are not predictive; as they are usually based on historical information notwithstanding
ratios can be used as a tool to assist financial analysis.
 They help to focus attention systematically on important areas and summaries information in an
understandable form and assist in identifying trends and relationships (see methods for
facilitating the financial analysis above).
 However, they do not reflect the future perspectives of a company, as they ignore future action
by management.
 They can be easily manipulated by window dressing or creative accounting and may be distorted
by differences in accounting policies.
 Inflation should be taken into consideration when a Ratio Analysis is being applied as it can
distort comparisons and lead to inappropriate conclusions.
 A comparison with industry averages is difficult for a conglomerate firm since it operates in
many different market segments.
 Seasonal factors may distort ratios and thus must be taken into account when making ratios are
used for financial analysis.
 Not always easy to tell that a ratio is good or bad. Must be always used as an additional tool to
back up or confirm other financial information gathered.
 Different operating and accounting practices can distort comparisons.

UTILITY OF RATIO ANALYSIS

1. Liquidity Position: -
With the help of ratio analysis, conclusion can be drawn regarding the liquidity position of firm. The
liquidity position of a firm would be satisfactory if it is able to meet its current obligations when they
become due.

2. Long-term Solvency: -
This aspect of the financial position of a borrower is of concern to the long-term creditors, security
analysis and the present and potential owners of a business.

3. Operating Efficiency: -
It throws light on the degree of efficiency in the management and utilization of its assets. It would be
recalled that the various activity ratios measure this kind of operational efficiency.

4. Over-all Profitability: -
The management is concerned about the ability of the firm to meet its short-term as well as long term
obligations to its creditors, to ensure a reasonable return to its owners and secure optimum utilization of
the assets of a firm.
5. Inter-firm Comparison: -
Ratio analysis is not only throwing light on the financial position of a firm but also serves as a stepping
stone to remedial measure. This is made possible inter-firm comparison/comparison with industrial
averages.

6. Trend Analysis: -
Whether the financial position of a firm is improving or deteriorating over the years. This is made
possible by the use of a trend analysis.

Introduction to the Industry

Mahindra & Mahindra Ltd. (M&M) operates in the automobile manufacturing and agricultural equipment
sectors, two key industries that play a significant role in the global and Indian economy. The company is a
dominant player in automotive manufacturing—especially in utility vehicles (UVs), tractors, and commercial
vehicles—as well as in the farm equipment sector, focusing on tractors, harvesters, and other agricultural
machinery. In recent years, M&M has also made significant inroads into electric vehicles (EVs) and renewable
energy solutions, reflecting the global push towards sustainable mobility and energy.

1. Automobile Industry in India

The Indian automobile industry is one of the largest and fastest-growing in the world, with India being one of the
top global producers of vehicles. The industry can be broadly categorized into:

 Passenger Vehicles (PV): Including cars, SUVs, and MPVs.

 Commercial Vehicles (CV): Trucks, buses, and vans.
 Two-wheelers: Motorcycles, scooters, etc.
 Electric Vehicles (EVs): An emerging segment driven by the transition towards green and sustainable
transport solutions.

The Indian automobile industry is characterized by:

 Demand from Rural and Urban Markets: The automotive sector caters to both the urban population with
SUVs, cars, and commercial vehicles, and rural India, which has a significant demand for tractors and
agricultural machinery.
 Technological Advancements: The industry is increasingly focused on electric mobility, autonomous
vehicles, and connectivity.
 Government Regulations: Policies like FAME (Faster Adoption and Manufacturing of Hybrid and
Electric Vehicles) and the BS VI (Bharat Stage VI) emission norms are driving the shift towards cleaner
and more efficient vehicles.
 Challenges: The industry faces challenges like raw material price fluctuations, high production costs, and
intense competition, both from domestic and international manufacturers. The transition to EVs also
requires significant infrastructure investment.
2. Agricultural Equipment Industry in India

India has a long history of agriculture being a major contributor to the economy, and the agriculture and farm
equipment industry plays a critical role in ensuring food security, productivity, and rural development. The
industry primarily includes:

 Tractors: The largest product segment, where India is the world’s largest tractor market.
 Harvesters: A growing segment driven by technological advancements in mechanized farming.
 Plowing, sowing, and other farm equipment: Such as combine harvesters, seeders, plows, etc.

Key characteristics of the Indian farm equipment industry include:

 Strong Rural Demand: Tractors and agricultural machinery are essential tools for improving farm
productivity, particularly in rural areas where farming is the primary occupation.
 Technological Evolution: Mechanized farming is gaining momentum, with growing adoption of advanced
machinery like automated tractors, harvesters, and drones.
 Government Support: The government promotes agricultural growth through subsidies, support schemes
like the PM-KISAN (Pradhan Mantri Kisan Samman Nidhi), and initiatives to enhance rural
infrastructure.
 Challenges: The sector faces issues such as low penetration of mechanized farming in some regions,
monsoon dependency, and the need for sustainable farming solutions amidst climate change concerns.

3. Electric Vehicle (EV) Industry in India

The EV industry in India is still in the nascent stages, but it is growing rapidly due to increasing awareness of
environmental issues, technological advancements, and government initiatives.

 Government Incentives: Initiatives such as FAME II aim to promote the adoption of electric vehicles in
India.
 Infrastructure Development: The growth of electric vehicles is dependent on the development of charging
infrastructure, which is still in its early stages in India.
 Manufacturers’ Involvement: Companies like Mahindra Electric (a subsidiary of Mahindra & Mahindra)
and other established automakers are increasingly focusing on electric mobility.
 Challenges: High upfront costs, limited charging stations, and range anxiety are some of the challenges
hindering rapid adoption of EVs in India.

Key Drivers of Growth in the Industry:

1. Economic Growth and Rising Disposable Income: As the Indian economy continues to grow, disposable
incomes in urban and semi-urban areas are on the rise, leading to higher demand for passenger vehicles,
particularly SUVs.
2. Government Initiatives: Policies such as Make in India, FAME for electric vehicles, and incentives for
rural development have boosted demand for farm equipment and affordable vehicles.
3. Technological Advancements: Increasing adoption of digital technologies, automation in manufacturing,
and innovation in product offerings (electric vehicles, autonomous vehicles) are reshaping the industry.
4. Urbanization and Infrastructure Development: As urbanization increases, there is a surge in demand for
commercial vehicles (logistics, construction), and advanced personal mobility solutions like electric cars
and high-performance SUVs.
 5. Sustainability and Environmental Concerns: The global push for reducing carbon emissions and ensuring
sustainable development is driving the demand for green technologies, electric mobility, and eco-friendly
alternatives.

COMPANY PROFILE

PROFILE OF THE ORGANIZATION/COMPANY

Mahindra and Mahindra Limited is engaged in the manufacture of passenger cars, commercial vehicles
and tractors. The Company's segments include Automotive, which is engaged in the sale of automobiles,
spare parts and related services; Farm Equipment, which is engaged in the sale tractors, spare parts and
related services; IT Services, which includes business consulting and related support activities; Financial
Services, which includes services relating to financing, leasing and hire purchase of automobiles and
tractors; Steel Trading and Processing, which is engaged in trading and processing of steel;
Infrastructure, including operation of commercial complexes, project management and development;
Hospitality, including sale of Timeshare; Systech, which consists of automotive components and other
related products and services; Two wheelers, which consists of sale of two wheelers, spare parts and
related services, and Others, which includes logistics, after-market and investments.

Mahindra & Mahindra Ltd is an India-based company. The company operates in nine segments:
automotive segment comprises of sales of automobiles, spare parts and related services; farm equipment
segment comprises of sales of tractors, spare parts and related services; information technology (IT)
services comprises of services rendered for IT and telecom; financial services comprise of services
relating to financing, leasing and hire purchase of automobiles and tractors; steel trading and processing
comprises of trading and processing of steel; infrastructure comprise of operating of commercial
complexes, project management and development; hospitality segment comprises of sale of timeshare;
Systech segment comprises of automotive components and other related products and services, and its
others segment comprise of logistics, after-market, two wheelers and investment.

Mahindra & Mahindra Ltd was incorporated on October 2, 1945 with the name Mahindra & Mohammed
Ltd. The company was renamed as Mahindra & Mahindra Ltd in the year 1948. The steel trading
business was commenced in association with suppliers in UK. In the year 1950, the company
commenced the first business with Mitsubishi Corporation and 5000 tons of wagon building plates from
Yawata Iron & Steel were supplied.

In the year 1953 Otis Elevator Company (India) was established. A joint venture was made with Rubery
Owen & Company Limited, UK and established a company under the name of Mahindra Owen. The
company’s Machine Tools Division was commenced its operations in the year 1958. In the year 1960,
Mahindra Sintered Products Limited was established based on a joint venture with Bir Field (GKN
Group, UK). In the year 1962, Mahindra Ugine Steel Company was established as a joint venture
between the company and Ugine Kuhlmann, France. In the year 1963, International Tractor Company of
India was established as a joint venture with International Harvester Company, USA.

In the year 1965, the company entered into light commercial vehicles segment. They established Vickers
Sperry of India Ltd, a joint venture with Sperry Rand Corporation, USA. In the year 1969, the company
entered the world market with export of utility vehicles and spare parts.

In the year 1977, International Tractor Company of India merged with the company and became its
Tractor Division. In the year 1982, Mahindra brand of tractors were launched and also became the
market leader in the Indian tractor market. In the year 1991, the company introduced commander range
of vehicles in the market. Also, they established Mahindra Financial Services Ltd as a wholesale fund
provider.

In the year 1995, Mahindra Holding & Finance Limited became a subsidiary of the company to carry out
business as an investment company. The company made a technical collaboration with Mitsubishi /
Samcor to manufacture the Mitsubishi L300. In the year 1996, Mahindra Ford India Limited was
established, a joint venture with Ford Motor Company, USA, to manufacture passenger cars. In the year
1999, the company acquired a major stake in Gujarat Tractors and renamed it Mahindra Gujarat Tractors
Ltd. Also, Mahindra & Mahindra Financial Services Ltd became a subsidiary of the company.

In the year 2000, the company set up their first satellite tractor plant at rudrapur. They launched a new
age tractor, Mahindra Arjun 605 DI (60 HP) in the market. Also, they launched Bolero GLX (a utility
vehicle) launched in response to the needs of urban consumers. In the year 2001, the company launched
Champion, a 3-wheeler diesel vehicle. They launched Mahindra Maxx, a multi-utility vehicle
positioned with the caption Maximum Space, Maximum Comfort. They made a tie up with Renault for
Petrol Engines.

In the year 2002, the company launched Scorpio, a new generation, world-class sports utility vehicle. In
the year 2003, they launched Invader, a sporty open top vehicle and MaXX Pik Up. They set up second
tractor assembly plant in USA. They ventured into Industrial engine business. Also, they launched
India’s first Turbo tractor, Mahindra Sarpanch 595 DI Super Turbo.

In the year 2004, the company launched Bolero and Scorpio in Latin American, Middle East and
South African markets. They signed an MOU to enter into joint venture with Jiangling Motor Company
Group (JMCG) of China, to acquire tractor manufacturing assets from Jiangling Tractor Company, a
subsidiary of Jiangling Motor Company Group.

In the year 2005, the company acquired 51% stake in SAR Transmission Private Limited, a company
engaged in manufacture of gears and transmission shafts. The company became the became the first
Indian auto manufacturer to launch the Common Rail Diesel Engine (CRDE), offering it in the Scorpio.
They acquired 80% stake in the joint venture with Jiangling Motors i.e., in Mahindra (China) Tractor
Company. They established Mahindra Renault Ltd, a joint venture with Renault to manufacture and
market Logan, a mid-sized sedan, in India. Also, they established Mahindra International Ltd, a joint
venture with International Truck and Engine Corporation to manufacture trucks & buses in India.

In the year 2006, the company acquired the Stokes Group of UK, the largest automotive forgings
company in the UK. They launched the Scorpio V-series. In July 2007, the company launched the
Mahindra Pik-Up (double cab) in Chile. In November 1, 2007, a wholly owned affiliate of Navistar
International Corporation signed a joint venture agreement with the company to produce diesel engines
for medium and heavy commercial trucks and buses in India.
In the year 2008, the company introduced Fuel Smart system in Bolero and Scorpio SUVs. They entered
into JV with TMI Pacific in Australia. In the year 2009, the company launched Xylo. Also, they
launched New, Mighty Muscular Scorpio in the market.

During the year 2009-10, the company hived off Mahindra Defense Systems Division into a wholly
owned subsidiary, Mahindra Defense Land Systems Pvt Ltd (now rechristened as Defense Land
Systems India Pvt Ltd) with effect from July 1, 2009. Also, the company signed a joint venture
agreement on November 30, 2009 with BAE Systems Plc. to form a 74:26 Joint Venture for defense
land systems products. The company divested 46.66% of the equity share capital in Mahindra Gears &
Transmissions Pvt Ltd in favor of ICICI Venture Fund. As per the scheme of arrangement between the
company and Mahindra Shubh Labh Services Ltd, the Agri Inputs Business of along with other common
assets and liabilities of MSSL was de-merged and transferred into the company.

During the year 2010-11, the company acquired SYMC, a premier manufacturer of sports utility
vehicles and recreational vehicles in Korea. Also, the company acquired 38% of the paid-up equity share
capital through a Preferential Allotment in EPC Industry Ltd (EPC), a company listed on the Bombay
Stock Exchange Limited. In February, 2010, the company had launched Maximo in a very competitive
small 4-wheeler cargo segment (0.75 Ton). In June 2011, Bristlecone International AG became a
subsidiary of the company.

In 2012, the company which had acquired SsangYong Motor Company, a South Korean SUV maker,
almost a year ago, was now planning to set up a assembly plant and invest Rs 800 crore over next 3-4
years. The company wins arbitration award and class action suit against global vehicles. During the
year, the company also entered the Kenyan passenger vehicles market with the launch of their utility
vehicles, XUV500 and Scorpio. Other vehicles include pick-up range, Genio and Maximo mini-truck
The company also signed an agreement with Telephonic Corporation to form a joint venture, named as
Mahindra-Telephonic Integrated Systems Limited.

In 2013, the company has inked partnership with online shopping portal, [Link] to sell its two-
wheels on the site. The company launches new visual identity reflecting modernity and dynamism. The
company launches the Verito Executive edition. The company unveils the new MaxximoPlus Mini-
truck in Bengaluru and Chennai. The company expands dealership network across India. The company
launches the new Bolero Maxi Truck Plus - The Perfectly Styled City
Pick-up in Ahmedabad. During the year, Mahindra Two Wheelers wins 3 Awards at the CMO Asia
Manufacturing Excellence Awards 2013. Mahindra 2 Wheelers opens new dealership in Zirakpur,
Punjab.

In 2014, the company introduces Yoga Seats in Quanto Compact SUV. During the year, the company
signs MoU with Government of Bhutan to promote usage of Electric Vehicles in the country. Mahindra
Defense Naval Systems Inaugurates new Chakan plant. Mahindra Integrated Business Solutions Signs
MoU with CARE Advisory. Mahindra Logistics acquires majority stake in LORDS Freight (India) Pvt.
Ltd.

In 2015, Mahindra & Mahindra Ltd, Mahindra Two Wheelers and Peugeot Motorcycles complete
strategic partnership. Mahindra inaugurates its extended automotive manufacturing facility at Zaheer
Abad in Telangana. During the year under review, Mahindra & Mahindra & Mitsubishi Heavy
Industries enter into Strategic Partnership in Agricultural Machinery. The company launches all new
mini-truck Jeeto small commercial vehicle landscape in India. During the year, the company has set up
an Africa-focused business unit to maintain double-digit growth levels in the continent. The company is
also signing an MOU with the Government of Tamil Nadu. The company launches its tough & stylish
true-blue SUV - TUV 300. Mahindra & Mahindra, Mitsubishi Agricultural Machinery and Mahindra
announce Start of their Strategic partnership. Mahindra Introduces the AllNew Automatic Transmission
of The New Age XUV500. Pininfarina. A (Pininfarina), an automotive design and engineering services
company was acquired by the Mahindra group during the year under review.

FOCUS OF THE STUDY

The focus of the study is limited to collecting financial data published in the annual reports of the
company every year. The analysis is done to suggest the possible solutions. The study is carried out for
4 years. Using the ratio analysis, firms past, present and future performance can be analyzed and this
study has been divided as short-term analysis and long-term analysis. The firm should generate enough
profits not only to meet the expectations of owner, but also to expansion activities. The prevalent
educational system providing the placement training at an industry being a part of the curriculum has
helped in comparison of theoretical knowledge with practical system. It has led to note the convergences
and divergence between theory and practice. The study enables us to have access to various facts of the
organization. It helps in understanding the needs for the importance and advantage of materials in the
organization, the study also helps to exposure our minds to the integrated materials management the
different of part and vary useful techniques that is make a full type of stages in various procedures,
methods and technique adopted by the organization. The study provides knowledgea bout how the
theoretical aspects are put in the organization.

CHAPTER 2
RESEARCH
METHODOLOGY
 OBJECTIVES OF THE STUDY/PROJECT

• To study and analyze the financial position of the Company through ratio analysis.
• To suggest measures for improving the financial performance of organization.
• To analyze the profitability position of the company.
• To assess the return on investment.  To analyze the asset turnover ratio.
• To determine the solvency position of company.
• To suggest measures for effective and efficient usage of inventory.

LIMITATIONS OF THE STUDY

• The study was limited to only four years Financial Data.

• The study is purely based on secondary data which were taken primarily from Published annual
reports of Mahindra & Mahindra Ltd.
• There is no set industry standard for comparison and hence the inference is made on general
standards.
• The ratio is calculated from past financial statements and these are not indicators of future.
• The study is based on only on the past records.
• Non availability of required data to analysis the performance.
• The short span of the time provided also one of limitations.

RESEARCH DESIGN
In view of the objects of the study listed above an exploratory research design has been adopted.
Exploratory research is one which is largely interprets and already available information and it lays
particular emphasis on analysis and interpretation of the existing and available information.
•To know the financial status of the company.
•To know the credit worthiness of the company.
•To offer suggestions based on research finding.

SAMPLE SIZE AND TECHNIQUES

Sample Size:
The size of the sample was around 100 people considering the time constraint.
 ANALYSIS PATTERN

To summarize findings of any project study the data collected needs analysis of the raw data can be
made meaningful simple and appropriate. Presentations of such interpretations help to draw conclusion
from the analyzed data. This analysis is based on the data collected from the companies belonging to
the sectors namely, Analysis will be based on journal, internet. And there three types of schemes
provided by Bajaj Allianz.

• Two-wheeler insurance
• Health Insurance
• Travel Insurance
• Car Insurance

DATA COLLECTION (PRIMARY AND SECONDARY)

Data collection is the selection of sources of information and selection of methods and procedures for
gathering the data needed for any research.

“The search for answers to research questions is called collection of data.”

“Data are facts and other relevant materials serving a base for study& analysis.”

For economy analysis, various types of survey’s data are collected from ministry of finance. Industry
analysis was carried from the various research report prepared by the government of India. The
company analysis is done through financial statements, which are required for analyzing the ratios,
balance sheet and profit & loss a/c , which is collected from the company MAHINDRA
ANDMAHINDRA LTD. The task of data collection begins after a research problem has been defined
and research design/plan chalked out.
While deciding about the method of data collection to be used for the study, the researcher should keep
in mind two types of data…

• Primary data method.

• Secondary data method
For my study purpose I have used SECONDARY DATA METHOD. And the data is collected from
the internet (website) and some data from the company and then calculation & analysis is done.

The basic significance or merits of secondary data are: 

Readymade availability.
• Available quickly and cheaply.
• Less time is consumed.
• Less effort is required to collect the data.

LIMITATIONS OF THE STUDY

• The study was limited to only four years Financial Data.

• The study is purely based on secondary data which were taken primarily from Published annual
reports of Mahindra & Mahindra Ltd.
• There is no set industry standard for comparison and hence the inference is made on general
standards.
• The ratio is calculated from past financial statements and these are not indicators of future.
• The study is based on only on the past records.
• Non availability of required data to analysis the performance.
• The short span of the time provided also one of limitations.
 CHAPTER 3

DATA ANALYSIS AND

INTERPRETATION

Year 2011-12 2012-13 2013-14 2014-15 2015-16

3569.16 5535.18 6409.53 8263.86 7060.37

Current

Assets

3679.55 5591.09 6283.85 6944.42 6724.16

Current

liabilities

0.97 0.99 1.02 1.19 1.05

Current

Ratio
Q1. What is the current ratio of assets and liabilities?

[Link] Ratio: - (Liquidity Ratios) Current ratio: -The current ratio is the ratio of total
current assets to total current liabilities. The ideal current ratio of any firm is 2:1. The current ratio of a
firm measures its short- term solvency, that is, its ability to meet short term obligations. The higher the
current ratio, the larger is the amount of rupees available per rupee of current liability, the more is the
firm’s ability to meet current obligations and the greater is the safety of funds of short –term creditors

Table 1

(IN CR)

1.4

1.2

0.8

0.6

0.4

0.2

0
2010‐11 2011‐12 2012‐13 2013‐14 2014‐15

INTERPRETATION: -

From graphical representation we can observe that current ratio improves from 2012 to 2016
means firm’s liquidity improved year by year. Higher ratio is preferable because it shows better
short-term solvency. But very high ratio of current asset to current liability is indication of poor
credit management and firm may not make full use of its borrowing capacity.
 QUICK RATIO:

Q2. What is the quick ratio?

This ratio is also called liquid ratio or acid test ratio. It establishes a relationship between quick
assets and quick liabilities. Quick assets include all the current assets except stock & prepaid
expenses and quick liabilities refer to liabilities which are repayable within a short period. It refers to
current liabilities excluding bank overdraft & cash credit.
The actual quick ratio has to be compared with the standard or ideal quick ratio of 1:1. If the actual
quick ratio is equal to or more than the standard quick ratio of 1:1, the conclusion can be that the
concern is liquid, and so, it can pay off its short-term liabilities out of its quickly realizable assets
without any difficulty. On the other hand, if the actual quick ratio is less than the standard ratio of
1:1, the conclusion can be that the concern is not liquid.
Formula: -
Quick Assets = current assets- (stock + prepaid expenses)

Table: - 2
(IN CR)
Year 2011-12 2012-13 2013-14 2014-15 2015-16

Current 3569.16 5535.18 6409.53 8263.86 7060.37

Assets

Inventories 871 1450 1553 1827 1500

Current 3679.55 5591.09 6283.85 6944.42 6724.16

Liabilities

Quick 0.73 0.72 0.77 0.93 .84

Ratio

INTERPRETATION: -

Quick ratio shows liquidity of firm. It is same as current ratio but it’s more stringent than current
ratio. Because it excludes inventory and advance means those current assets which cannot easily
convert in cash. Liquidity in terms of ability of firm to meet obligation immediately and that can be
current assets and all those assets which can easily convert into cash. So, from table we can see
quick ratio improved means firm’s liquidity improved. It shows decrease in liquid liabilities.
 Year 2011-12 2012-13 2013-14 2014-15 2015-16

2321.1 3174.22 3227.07 3745.16 3987

Long term
debt.

293.62 294.52 295.16 295.16 295.87

Share holder

Equity

7.91 10.77 10.93 12.69 13.48

Debt to
equity ratio

DEBT TO EQUITY RATIO: -

Q3 What is debt to equity ratio of firm?

Debt= Current Liabilities
TABLE:

(IN CR) 16

14
12
10 8
6
4
2
0
2011-12 2012-13 2013-14 2014-15 2015-16
 INTERPRETATION: -

As per Chart debt ratio is very low in year 2014-15 compare to other year it shows in year 2011-12
debt proportion is less compare to owner’s fund which may dilute control over operation because
no of equity shares increase. At same time it’s very good condition from creditor’s point of view
because firm have enough fund to meet obligation.
Ratio is very high in year 2011-12 is dangerous for creditors. If firm fail financially, creditors loose very
high at a same time interruption of creditors increase in operation.
DEBT TO CAPITAL RATIO: -

Q4. What is debt to capital ratio of the firm?

The Relationship between Creditor’s funds and owner’s capital can also be expressed in terms of
another leverage ratio. Here, the outside liabilities are related to the total capitalization of the firm and
not merely to the shareholder’s equity.

TABLE: -4
(IN CR)
Year 2011-12 2012-13 2013-14 2014-15 2015-16

Long term 5739.49 5742.03 4833.57 4876.64 8185.1

Debt

Permanent 6078.84 6072.38 5822.87 5914.89 10970.39

Capital

Debt to capital 0.94 0.94 0.83 0.82 0.74

ratio
 0.8
0.7 0.6 0.5 0.4 0.3 0.2
0.1
0

2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION: -

Ratio decreased from 2011 to 2016 Lower ratios is better condition for creditors of firm. It
means proportion of debt in total capital employed is very less compared to owner’s firm which
shows sufficient safety margin available to creditor.
But it reduces possibility of equity trading so firm cannot utilize its ability for capital gearing.
Initially ratio is very high which is dangerous for firm’s creditors.

INTEREST COVERAGE RATIO

Q5. What is the interest coverage ratio of the firm?

This ratio measures the debt servicing capacity of the firm in so far as fixed interest on long
term loan is concerned. It is determined by dividing the profits or earnings before interest and
taxes by the fixed interest charges on loans. This ratio, as the name suggests shows how many
times the interest charges are covered by the EBIT out of which they will be paid. In other
words, it indicates the extent to which fall in EBIT is tolerable in the sense that the ability of
the firm to service its debt would not be adversely affected .

TABLE:-5

(IN CR)
Year 2011-12 2012-13 2013-14 2014-15 2015-16

Ebit 4005.96 4344.78 5349.09 5491.99 5794.78

interest 192.78 193.19 224.85 311.16 282.95

Interest 20.78 22.49 23.79 17.65 20.48

coverage

Ratio

25

20

15

10

5
 0
2012 2013 2014 2015 2016

INTERPRETATION:

From the table, we can see initially ratio is low during initial period but after ratio increase.
There is coverage of four times which indicate that fall in operating earnings to only up to one
fourth level can be tolerated anger is the ratio means greater is the ability of the firm to handle
fixed charge liabilities and the more assured is the payment of interest to the creditors. However
too high a ratio may imply unused debt capacity. In contrast, low ratio is a danger signal the firm
is using excessive debt and does not have the ability to offer assured payment of interest to the
creditors

GROSS PROFIT MARGIN:

Q6. What is the gross profit margin of the firm?

Gross profit is the result of relationship between prices, sales volume and costs. A change in the
gross margin can be brought about by change in any of these factors. The gross margin
represents the limit beyond which fall in sales prices are outside the tolerance limit. Further the
gross profit ratio/margin can also be made use of determining the extent of loss caused by theft,
spoilage, damage and so on in the case of those firms which follows the policy of fixed gross
profit margin in pricing their products.

TABLE: 6

(IN CR)
Year 2011-12 2012-13 2013-14 2014-15 2015-16

Gross 3040.44 3191.72 3995.58 3859.4 3872.02

Profit
 Sales 23460.26 31853.53 40441.16 40508.5 40844.1

GP. ratio 12.96% 10.02% 9.88% 9.52% 9.48%

14

12

10

0
2011-12 2012-13 2013-14 2014-15 2015-16
INTERPRETATION:

A high gross profit margin relative to the industry average implies that he firm is able to
produce at relatively lower cost. It’s sign of goods management. The more the firms maintain
it, better would for his firm itself.
A high gross profit margin relative to the industry average implies that he firm is able to
produce at relatively lower cost. Company’s gross profit increase a sign of goods
management. The more the firms maintain it, better would for a high gross profit margin
relative to the industry average implies that Company’s gross profit increase a sign of goods
management. The more the firms maintain it.

NET PROFIT: -

Q7. What is the net profit of the firm?

Net profit margin is indicative of management abilities to operates the business with sufficient
success not only to recover from revenue of the period, cost of merchandise or service, the
expense of operating the business and the cost of borrowed funds but also leave a margin of
reasonable compensation to the owner for providing their capital at risk.

TABLE:-7
(IN CR)
Year 2011-12 2012-13 2013-14 2014-15 2015-16

Net profit 2662.1 2878.89 3352.82 3758.35 3812.28

Sales 23460.26 31853.52 40441.16 40508.5 40681.47

Net profit 11.14 8.9 8.17 9.11 9.34

ratio.

12
 10 8

0
2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION: -

From graph we can see net profit margin was initially negative means initially firm's ability
was so poor that it could not meet even expenses. Then after firm’s ability improved day by
day. On an average net profit was high in the year 2011-'12 compare to other years. High net
profit margin ensure adequate return to the owners as well as enable a firm to with stand
adverse economic conditions .so we can say firm’s performance was better in year 2012-'13
compare to other year.
RETURN ON CAPITAL EMPLOYED: -

Q8. What is the return on capital employed of the firm?

Here the profits are related to the total capital employed. The term capital employed refers to
long term fund supplied by the creditors and owners of the firm. Thus, the capital employed
basis provides a test of profitability related to the source of long-term funds. It would provide
sufficient insight into how efficiency the long-term funds of owners and creditors are being
used. The higher the ratio, the more efficient is the use of capital employed.

TABLE: -8

Year 2011-12 2012-13 2013-14 2014-15 2015-16

Eat +int.-tax 255.15 110.31 409.59 1033.32 841.26

Avg. total 7829.37 7493.87 7152.33 7172.48 9367.5
Capital
employed

ROCE (%) 3.25 1.47 5.72 14.4 8.98

16
14
12
10
8
6
4
2
0
2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:-

From the table, we can see ratio is very high in 2013-'14 compare to other year. Ratio
improving year by year. From ratio we can see firm utilize very efficiently its capital
employed. Thus, the capital employed basis provided a test of profitability related to source of
long–term funds.
In year firm utilized its capital very efficiently which make firm to earn more profit on capital
employed. In year ratio is very less in year 2012-'13 means firm didn't utilized its capital fully.
So, if firm want to increase its revenue as well enhance its growth, firm must give more
important on utilization on capital employed.

RETURN ON ASSET: -
Q9. What is the return on assets of the firm?
Profitability ratio is measured in terms of the relationship between net profits and assets. The Return
on assets may also be called as profit to asset ratio.

TABLE: -9
(IN
CR)
Year 2011-12 2012-13 2013-14 2014-15 2015-16

EAT 59.99 590.15 530.18 600.14 650.24

ASSETS 5774.36 6234.22 13159.32 15148.7 18007.15

RETURN 1.03 9.45 4.02 3.96 3.61

ON ASSETS
(IN %)

10

2011-'12 2012-'13 2013-'14 2014-'15 2015-'16

9
8
7
6
5
4
3
2
1
0
INTERPRETATION:-

This ratio gives the relationship between profit and asset. From table we can see ratio is
negative in year 2012 and it increase from 2012 to 2016. So we can see firm was able to earn
higher profit in year 2011 on asset.
The Return on assets measures the profitability of the total funds /investments of a firm .so we can
say year by year firm’s ability to earn.

OPERATING PROFIT RATIO: -

Q10. Calculate operating profit ratio of the firm?

It is a ratio showing relationship between cost of goods sold plus operating expenses and sales.
It shows the efficiency of the management this ratio suggests that a particular share of selling
price is absorbed by cost of sales and other operating expenses and the remainder is left for the
owner of the business. Hence, the higher this ratio, the less profitable it is, because it would
prove insufficient to pay dividend and create necessary reserves.

TABLE: - 10

Year 2011-12 2012-13 2013-14 2014-15 2015-16

EBIT 208.97 472.25 1542.46 1207.01 1578.42

SALES 1764.78 3700.95 6116.71 6182.58 6207.2

Operating ratio 11.84 11.73 25.22 19.58 25.43

( in %)
 Chart:-10

30

25

20

15
10

0
2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:-
From the table, we can see net profit margin was initially negative means initially firm’s ability
was so poor that it could not meet even expenses. Then after firm’s ability improved day by day.
On an average net profit was high in the year 2013-'14 compare to other years. High net profit
margin ensures adequate return to the owners as well as enable a firm to with stand adverse
economic conditions.

So, we can say firm’s performance was better in year2013-'14 compare to other
 CHAPTER 4
FACTS AND FINDINGS

Mahindra & Mahindra Ltd. (M&M) is a well-established conglomerate in India, primarily known for its
manufacturing of automobiles, including SUVs, trucks, tractors, and electric vehicles. The company operates across
multiple sectors, including automotive, agribusiness, aerospace, construction, defense, and information technology.
To conduct a ratio analysis project for M&M, we can focus on key financial ratios that evaluate its liquidity,
profitability, efficiency, and solvency.

Below are the major facts and findings you might use for a ratio analysis of Mahindra & Mahindra Ltd., including
a brief description of the company’s financial health and performance.

1. Key Financials for M&M Ltd.

Revenue & Profitability:

 Revenue Growth: M&M has witnessed steady growth in revenue over the years due to the expansion of its
product portfolio and its strong presence in rural India (through its tractor and agricultural business).
 Net Profit: Net profit is affected by several external factors, such as fuel prices, interest rates, and foreign
exchange fluctuations. However, the company generally maintains a steady profit, driven by strong demand
in key markets like SUVs and agricultural equipment.

Divisional Performance:

 The automotive division (cars, SUVs, and commercial vehicles) is a major contributor to the company’s
revenue.
 The farm equipment sector, particularly the tractor business, has also been a key pillar.
 The company is investing heavily in electric vehicles (EVs) and renewable energy, which is expected to
drive future growth.

2. Common Ratios for Financial Analysis

Here are some of the ratios that would be most relevant for analyzing Mahindra & Mahindra's financial position:

Liquidity Ratios

 Current Ratio = Current Assets / Current Liabilities

A measure of the company’s ability to pay short-term liabilities with short-term assets. A higher current
ratio indicates a strong liquidity position.
  Quick Ratio = (Current Assets - Inventories) / Current Liabilities
This is a stricter measure than the current ratio, excluding inventory from current assets. It shows the
company's ability to meet its short-term obligations without relying on inventory.
 Cash Ratio = Cash and Cash Equivalents / Current Liabilities
A more conservative liquidity ratio, indicating how much cash or near-cash assets are available to cover
short-term liabilities.

Profitability Ratios

 Gross Profit Margin = (Revenue - Cost of Goods Sold) / Revenue

Indicates how efficiently a company is producing and selling its products.
 Operating Profit Margin = Operating Income / Revenue
Shows the proportion of revenue left over after paying for variable costs of production, such as wages and
raw materials.
 Net Profit Margin = Net Income / Revenue
Shows how much profit is generated from revenue after all expenses, taxes, and interest.
 Return on Assets (ROA) = Net Income / Average Total Assets
Measures the company’s ability to generate profit from its assets.
 Return on Equity (ROE) = Net Income / Average Shareholders' Equity
Indicates the profitability of the company from the equity shareholders' perspective.

Efficiency Ratios

 Asset Turnover Ratio = Revenue / Average Total Assets

Indicates how efficiently a company uses its assets to generate revenue.
 Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Shows how quickly a company sells its inventory.
 Receivables Turnover Ratio = Net Credit Sales / Average Accounts Receivable
Indicates how efficiently a company collects its receivables.

Solvency Ratios

 Debt-to-Equity Ratio = Total Debt / Total Equity

A measure of the financial leverage of a company. A higher ratio indicates that a company is more reliant
on debt to finance its operations.
 Interest Coverage Ratio = EBIT / Interest Expense
Indicates how easily a company can pay interest on its outstanding debt with its operating profit.
 Debt Ratio = Total Debt / Total Assets
Shows the proportion of a company’s assets that are financed by debt.

3. Findings from Ratio Analysis (Hypothetical Data Based on Recent

Years)
Liquidity and Short-term Health:

 Mahindra & Mahindra has a current ratio of around 1.3 in recent years, indicating that the company can
cover its short-term liabilities using its short-term assets.
  The quick ratio is slightly lower than the current ratio, at around 0.9, reflecting that a portion of its current
assets are tied up in inventory, which is typical for a manufacturing company.

Profitability:

 Gross Profit Margin is typically in the range of 25-30%, reflecting efficient cost control in its core
manufacturing operations.
 Operating Profit Margin remains healthy, around 10-12%, due to economies of scale and strong
performance in key segments like tractors and SUVs.
 Net Profit Margin is more variable, often in the range of 5-7%, which fluctuates based on external market
conditions, especially foreign exchange fluctuations and commodity prices.

Efficiency:

 The Asset Turnover Ratio is approximately 0.8, which is decent for a capital-intensive company like
M&M. This suggests that the company is generating a reasonable amount of revenue relative to its assets.
 Inventory Turnover Ratio is around 4-5 times, indicating that M&M is able to sell its inventory at a
reasonable pace.

Solvency and Debt:

 M&M's Debt-to-Equity Ratio has been fairly conservative at around 0.3-0.4, reflecting that the company is
not overly reliant on debt to finance its operations.
 Interest Coverage Ratio is strong, typically above 5, indicating that M&M can comfortably cover its
interest obligations with its operating income.
 Debt Ratio stands at 0.2-0.3, suggesting that a relatively low portion of its total assets are financed through
debt.

4. Trends and Observations

 Mahindra & Mahindra has demonstrated steady growth in both revenue and profitability, particularly driven
by its leadership in the tractor and utility vehicle markets.
 The company has been actively investing in green technologies, including electric vehicles (EVs) and
renewable energy, which is expected to enhance its long-term growth prospects.
 Despite having a lower net profit margin compared to some of its peers, M&M’s diversified operations help
mitigate risks associated with fluctuations in specific industries.
 The company’s balance sheet remains healthy with low debt, which reduces financial risk in periods of
economic uncertainty.

5. Conclusion and Recommendations

 Strengths: M&M’s strong brand equity, leadership in the tractor and utility vehicle segments, diversified
business operations, and low debt levels are its key strengths.
 Weaknesses: Profit margins could be improved, especially in the automotive segment, where competition
from both traditional and electric vehicle manufacturers is intensifying.
 Recommendations: The company should focus on increasing operational efficiency, exploring higher-
margin businesses, and leveraging its investments in EVs to tap into the growing demand for sustainable
mobility solutions.
For the most accurate and up-to-date information, it is advisable to refer to Mahindra & Mahindra’s latest annual
report, investor presentations, and quarterly results. The figures mentioned in this overview are based on historical
trends and may vary with the latest data.

Chapter -5
Conclusion and
Suggestions

CONCLUSION

Viewing MAHINDRA INTERNATIONAL from every angle, it can be concluded that the
entire unit is progressing well because kinetic has provided excellent quality of product due to
sophisticated technology and highly qualified technical & management staff. By this way,
they can able to create a good demand for their product and satisfy the consumer.

In the report presented, an attempt has been made to focus on the ratio analysis through
MAHINDRA AND MAHINDRA [Link] MAHINDRA INTERNATIONAL at Delhi. It
was an excellent opportunity and I am glad that I was provided an opportunity to make an
internship report on such a famous company.
It can be said that credit of success of the company goes to the management as well as workers and
employee that MAHINDRA INTER-NATIONAL has bring bright future.

In Short, its grip on every aspect of the business is right which helps it in fight every
uncertainty. It is continuing to do well; sure, its future will be full of success. Again, I am
thanking to all who directly or indirectly helped me.
SUGGESTIONS

After analyzing the ratio and watching the whole condition of the business. I would like to give
suggestions as bellow.

The operating expenses are very high .such as a raw material research &extension, packaging,
power & fuel etc. In this expense raw material consumption is the most and company can
never controlled. Such expenses, because MAHINDRA AND MAHINDRA [Link]
expanding its network year by year. So plant machinery consumption, operation expenses and
other expenses will be increase in future.

So the firm should more focus to increase in sales, because selling is being increased more
and more company can achieve such an expenses. So increasing the selling of the products is
necessary.

In the globalization world when cutthroat competition is prevailing in all developed or

developing country so to survive in the market, high qualified persons are more necessary for
every firm. Due to, lack of salary and other Facilities qualified person cannot stay in the
particular firm. So, for MAHINDRA AND MAHINDRA LTD manufacturing ltd. should
take necessary steps for this. Firm should increase extra facility or high salary.

In the marketing field, to increase the market of new products, Firm should use more and more
distribution channels like MAHINDRA AND MAHINDRA LTD . DELHI
RETAILER, and direct selling and media like more advertisement in television, news-paper
posters, board and many more.
CHAPTER 6
BIBLIOGRAPHY
 BIBLIOGRAPHY

BOOKS

Bhaves, M Patel, Project Management, Vikas Publishing House, New Delhi

Drury, Colin, Management Accounting and Control, Thomson Learning

Khan, M.Y., Financial Services, Tata McGraw Hill, New Delhi.

Machiraju, H.R., Project Finance, Vikas Publishing House, New Delhi.

Reference: -

[Link]
[Link]
[Link]
[Link]
[Link]
limitations-accounting/65204/
[Link]
definitionimportance-and-limitations/65812/
 CHAPTER 7

QUESTIONAIRE AND

ANNEXURE
Q1. What is the current ratio of assets and liabilities?
a.) Current Assets
b.) Current Liabilities
c.) Current Ratio

Q2. What is the quick ratio?

a.) Current Assets
b.) Inventories
c.) Current Liabilities
d.) Current Ratio

Q3 What is debt to equity ratio of firm?

a.) Long term debt
b.) Share holder Euity
c.) Debt to Equity ratio

Q4. What is debt to capital ratio of the firm?

a.) Long term debt
b.)Permanent Capital
c.) Debt to capital ratio

Q5. What is the interest coverage ratio of the firm?

a.) EBIT
b.) Interest
c.) Interest coverage Ratio
Q6. What is the gross profit margin of the firm?
a.) Gross Profit
b.) Sales
c.) G.P Ratio
Q7. What is the net profit of the firm?
a.) Net profit
b.) Sales
c.) Net profit Ratio

Q8. What is the return on capital employed of the firm?

a.) Eat + Int. – Tax
b.) Average total Capital employed
c.) ROCE (%)

Q9. What is the return on assets of the firm?

a.) EAT
b.) Assets
c.) Return on assets (IN %)

Q10. Calculate operating profit ratio of the firm?

a.) EBIT
b.) Sales
c.) Operating ratio (in %)