ASSINMENT OF

BUSINESS FINANCE
SUBMITTED BY:
Aqsa Batool
Roll no: 6501
Class: BBA(6th)
Section: A (Morning)
SUBMITTED TO:
Sir Shahzad

UNIVERSITY OF EDUCATION LAHORE

MULTAN CAMPUS
EXECUTIVE SUMMARY
The report included the ratio analysis of TOYOTA & TATA MOTORS.
To see the performance of the company with the help of the ratio
analysis the investor can easily measure company’s stability. For this
analysis to be conducted, data is needed. Balance sheet and profit and
loss account of the company are used which is purely a secondary data
(given in appendixes) to make such analysis. The conclusion made from
this analysis is that TATA MOTORS has been declining and is
performing not well in last two years; the company is going at declining
sagas per the all ratios.
  Toyota Motors & Tata Motors:
 Ratio Analysis:
1-Liquidity Ratio:
 Current ratio: Current Asset
Current liability

Current Ratio of Toyota =160044000 =1.03

155425000

Current Ratio of Tata =582695=0.74

784792

Comparison:

Year Toyota Tata

Current 1.03 0.74

ratios

Interpretation:
Current ratio of year 2017 of Toyota is 1.03; current ratio of 2017
of Tata is 0.74. This shows that the current ratios are not preferable
& not suitable. But the company increases its current ratio.
  Quick ratio/Acid test ratio: Current assets-inventory

Current liabilities
Quick Ratio of Toyota=160044000-21436000=0.89
155425000
Quick Ratio of Tata=582695-12985=0.72
784792

Comparison:
Companies Toyota Tata

Quick ratios 0.89 0.72

Interpretation:
Quick ratio of the year 2017 of Toyota is 0.89, & Tata is 0.72 acc.to the
calculations. This shows that the quick ratio is not suitable because it is
less than 1.50.
We deduct inventory from current assets because it’s a least liquid asset
& Inventory can’t convert quickly into cash.

2. Activity Ratio:
Activity ratios are financial analysis tools used to measure a business' ability to
convert its assets into cash.
  Inventory turnover = C.G.S
Inventory
Inventory turnover of Toyota=204023000 =9.51 times
21436000

Inventory turnover Tata= 0 =0times

12985

Comparison:
Companies Toyota Tata

Inventory 9.51 0
turnover(times)

Interpretation:
Inventory turnover tells us the cycle time. Inventory turnover in year
2017 of Toyota is 9.51(times) & of Tata is 0 (times) .We see that
turnover of Toyota is high. It measures how many times a company sold
its total average inventory.

 Average Collection period= A/R

Average sale per day
Average collection period = A/R
Annual sale/365
 Average collection period Toyota= 78520000 =115.72days
247664000/365
Average collection period Tata= 1345690 =60.8days
8079445/365

Comparison:
Companies Toyota Tata

Average
collection 115.72 60.8
period(days)

Interpretation:
Average collection period of year 2017 of Toyota is 115.72, & of Tata
are 60.8. As we see that average collection period of Tata is less than
Toyota.

 Average payment period= A/P

Annual purchase/365

Average payment period = 53197000

of Toyota 74633000/365
= 260.16 days
 Average payment period = 42787
172637/365
=90.46 days
 Total Assets Turnover = Sales
Total assets

Total assets turnover of Toyota=247664000=0.56

437496000
=56%
Total assets turnover Tata = 8079445 = 0.6
12166140
=60%

Comparison:
Companies Toyota Tata

Assets turnover 56% 60%

Interpretation:

Total assets turnover of year2017 of Toyota is 56%, year & of Tata is

60%. This shows that the assets turnover of Toyota is less than Tata
motors. This shows the capability of assets that how much products will
be sale.
If sales are increases then high profit will be generated.

3. Profitability Ratio:

 Gross Profit Margin=Gross profit

Sales
Gross profit margin of Toyota=43640000 =17%
247664000
Gross profit margin of Tata=8079445=100%
8079445

Comparison:
Companies Toyota Tata

Gross Profit 0.17 1

Margin%

Interpretation:
Gross profit margin in year 2017 of Toyota is 0.17 & of Tata is 1. We
see that the gross profit margin of Toyota is less than Tata.

 Operating Profit Margin=Operating profit%

Sales
Operating profit margin of Toyota=17898000 =7.5%
247664000
 Operating profit margin of Tata= 134119 =1%
8079445

Comparison:
Companies Toyota Tata

Operating 7.5 1
profit Margin
(%)

Interpretation:
Operating profit margin in year 2017 of Toyota is 0.075% & of Tata is
0.01%. This shows the increase in the operating profit margin of Toyota.
.

 Net profit margin=Net profit%

Sales

Net profit margin of Toyota = 16433000 =6%

247664000
Net profit margin of Tata= 235810 =3%
8079445
 Comparison:
Companies Toyota Tata

Net profit 0.06 0.03

margin (%)

Interpretation:
Net profit Margin of year 2017 of Toyota is 0.06% &of Tata is 0.03%.
This shows that net profit margin of Tata is less than Toyota.

4. Debt Ratio:

 Debt Ratio=Total liabilities

Total Assets
Debt ratio of Toyota=280313000=64%
437496000
Debt ratio of Tata=11216010=92%
12166140

Comparison:
Companies Toyota Tata

Debt ratio (%) 64 92

Interpretation:
Debt ratio of year 2017 of Toyota is 64% & of Tata is 92%. A debt ratio
less than 100% indicates that a company has more assets than debt.

 Time Interest Earned Ratio=Earnings before Interest & Taxes

Interest
Time interest earned ratio of Toyota= 19951000=75.85times
263000
Time interest earned ratio of Tata=117759=1.63 times
72301

Comparison:
Companies Toyota Tata

Time interest
earned 75.85 1.63
ratio(times)

Interpretation:
Time interest earned ratio of Toyota of year 2017 is 75.85 times & Tata
motors of year 2017 are 1.63 times.

Annual Income Statement (values in 000's)Get Quarterly Data

Period Ending: 3/31/2017 3/31/2016

Cash and Cash Equivalents $26,879,000 $26,153,000

Period Ending: 3/31/2017 3/31/2016

Short-Term Investments $26,063,000 $22,629,000

Net Receivables $78,520,000 $83,027,000

Inventory $21,436,000 $18,342,000

Other Current Assets $7,146,000 $11,863,000

Total Current Assets $160,044,000 $162,014,000

Long-Term Investments $175,563,000 $166,799,000

Fixed Assets $91,511,000 $86,662,000

Goodwill $0 $0

Intangible Assets $0 $0

Other Assets $10,378,000 $6,497,000

Deferred Asset Charges $0 $0

Total Assets $437,496,000 $421,972,000

Accounts Payable $53,197,000 $48,570,000

Short-Term Debt / Current Portion $91,368,000 $85,069,000

of Long-Term Debt

Other Current Liabilities $10,860,000 $9,824,000

Total Current Liabilities $155,425,000 $143,462,000

Long-Term Debt $88,949,000 $86,944,000

Other Liabilities $12,805,000 $12,427,000

Deferred Liability Charges $12,777,000 $18,204,000

Misc. Stocks $4,360,000 $4,269,000

Minority Interest $5,997,000 $7,665,000

Total Liabilities $280,313,000 $272,972,000

Common Stocks $3,563,000 $3,533,000

Capital Surplus $4,344,000 $4,877,000

Retained Earnings $157,956,000 $149,422,000

Treasury Stock ($14,433,000) ($14,265,000)

Other Equity $5,752,000 $5,434,000

Period Ending: 3/31/2017 3/31/2016

Total Equity $157,182,000 $149,001,000

Total Liabilities & Equity $437,495,000 $421,973,000

Annual Income Statement (values in 000's)Get Quarterly Data

Period Ending: 3/31/2017 3/31/2016

Total Revenue $247,664,000 $252,708,000

Cost of Revenue $204,023,000 $201,125,000

Gross Profit $43,640,000 $51,583,000

Research and Development $0 $0

Sales, General and Admin. $25,742,000 $26,191,000

Non-Recurring Items $0 $0

Other Operating Items $0 $0

Operating Income $17,898,000 $25,392,000

Add'l income/expense items $2,054,000 $1,466,000

Earnings Before Interest and Tax $19,951,000 $26,859,000

Interest Expense $263,000 $315,000

Earnings Before Tax $19,688,000 $26,544,000

Income Tax $5,644,000 $7,814,000

Minority Interest ($860,000) ($1,081,000)

Equity Earnings/Loss $3,249,000 $2,928,000

Unconsolidated Subsidiary

Net Income-Cont. Operations $16,433,000 $20,576,000

Net Income $16,433,000 $20,576,000

Net Income Applicable to Common $16,433,000 $20,576,000

Shareholders
 Balance Sheet
2017 2016

Assets

Cash & Equivalents 336818 319978

Trade Accounts Receivable 1345690 1278410

Inventory 12985 13657

Other Current Assets 98323 94325

Total Current Assets 582695 555801

Long-Term Investments 81197 77137

Net Fixed Assets 412458 383750

Intangible Assets 61874 58780

Other Non-Current Assets 78390 74471

Total Assets 1216614 1149939

Liabilities

Accounts Payable 42,787 32,658

Notes Payable 88,247 83,835

Accrued Liabilities 5,32,506 530,190

Income Taxes Payable 10,014 9,115

Current Portion of Long-Term Debt 1,11,238 1,15,676

Total Current Liabilities 7,84,792 7,71,474

Long-Term Debt 2,81,809 2,63,352

Other Long-Term Liabilities 55,000 36,000

Total Long-Term Liabilities 336,809 2,99,352

Total Liabilities 11,21,601 10,70,826

Retained Earnings 95,013 79,113

Total Equity 95,013 79,113

Total Liabilities and Equity 12,16,614 11,49,939

INCOME STATEMENT

2017 2016

Sales 80,79,445 77,56,266

Cost of Sales 0 0

Gross Profit 80,79,445 77,56,266

Operating Expenses 79,45,326 76,20,193

Operating Profit 1,34,119 1,36,075

Other Income 0 0

Other Expenses 16,360 15,542

Earnings Before Interest and Taxes 117,759 120,533

Interest Expense 72,301 68,439

Earnings Before Taxes 45.458 52,094

Provision for Income Taxes 21,877 21,070

Net Income 23,581 3,1024