A

PROJECT REPORT ON FINANCIAL ANALYSIS OF

Submitted to FACULTY OF SARDAR PATEL COLLEGE OF ADMINISTRATION & MANAGEMENT

Submitted by: MAHENDRAKUMAR D. KUMAVAT [Enrollment no. 117550592047] RAJESH M. VIKMA [Enrollment no. 117550592136]

M.B.A Semester I SARDAR PATEL COLLEGE OF ADMINISTRATION & MANAGEMENT M.B.A PROGRAMME Affiliated To Gujarat Technological University BAKROL
November-2011

INDEX
Chapter NO. 1 2 3 4 5 6 7 Introduction Company profile Theoretical concept Research methodology Analysis & Interpretation Conclusion Annexure Subject

Company History:Bajaj Auto Limited is India's largest manufacturer of scooters and motorcycles. The company generally has lagged behind its Japanese rivals in technology, but has invested heavily to catch up. Its strong suit is high-volume production; it is the lowest-cost scooter maker in the world. Although publicly owned, the company has been controlled by the Bajaj family since its founding.

Origins :The Bajaj Group was formed in the first days of India's independence from Britain. Its founder, Jamnalal Bajaj, had been a follower of Mahatma Gandhi, who reportedly referred to him as a fifth son. 'Whenever I spoke of wealthy men becoming the trustees of their wealth for the common good I always had this merchant prince principally in mind,' said the Mahatma after Jamnalal's death. Jamnalal Bajaj was succeeded by his eldest son, 27-year-old Kamalnayan, in 1942. Kamalnayan, however, was preoccupied with India's struggle for independence. After this was achieved, in 1947, Kamalnayan consolidated and diversified the group, branching into cement, ayurvedic medicines, electrical equipment, and appliances, as well as scooters.

The precursor to Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading Ltd. It began selling imported two- and three-wheeled vehicles in 1948 and obtained a manufacturing license from the government 11 years later. The next year, 1960, Bajaj Auto became a public limited company. Rahul Bajaj reportedly adored the famous Vespa scooters made by Piaggio of Italy. In 1960, at the age of 22, he became the Indian licensee for the make; Bajaj Auto began producing its first two-wheelers the next year. Rahul Bajaj became the group's chief executive officer in 1968 after first picking up an MBA at Harvard. He lived next to the factory in Pune, an industrial city three hours' drive from Bombay. The company had an annual turnover of Rs 72 million at the time. By 1970, the company had produced 100,000 vehicles. The oil crisis soon drove cars off the roads in favor of two-wheelers, much cheaper to buy and many times more fuelefficient. A number of new models were introduced in the 1970s, including the three-wheeler goods carrier and Bajaj Chetak early in the decade and the Bajaj Super and threewheeled, rear engine Autorickshaw in 1976 and 1977. Bajaj Auto produced 100,000 vehicles in the 1976-77 fiscal year alone. The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward, Piaggio, maker of the Vespa brand of scooters, filed patent infringement suits to block Bajaj scooter sales in the United States, United Kingdom, West Germany, and Hong Kong. Bajaj's scooter exports plummeted from Rs 133.2 million in 1980-81 to Rs 52 million ($5.4 million) in 1981-82, although total revenues rose five percent to Rs 1.16 billion. Pretax profits were cut in half, to Rs 63 million.

New Competition in the 1980s

Japanese and Italian scooter companies began entering the Indian market in the early 1980s. Although some boasted superior technology and flashier brands, Bajaj Auto had built up several advantages in the previous decades. Its customers liked the durability of the product and the ready availability of maintenance; the company's distributors permeated the country.
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The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc motorcycle was immediately successful, and the company aimed to be able to make 60,000 of them a year by 1985. Capacity was the most important constraint for the Indian motorcycle industry. Although the country's total production rose from 262,000 vehicles in 1976 to 600,000 in 1982, companies like rival Lohia Machines had difficulty meeting demand. Bajaj Auto's advance orders for one of its new mini-motorcycles amounted to $57 million. Work on a new plant at Waluj, Aurangabad commenced in January 1984. The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles. The company was making 500,000 vehicles a year at this point. Although Rahul Bajaj credited much of his company's success with its focus on one type of product, he did attempt to diversify into tractor-trailers. In 1987 his attempt to buy control of Ahsok Leyland failed. The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year later. About this time, the Indian government was initiating a program of market liberalization, doing away with the old 'license raj' system, which limited the amount of investment any one company could make in a particular industry. A possible joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told the Financial Times that his company was too large to be considered a potential collaborator by Japanese firms. It was hoping to increase its exports, which then amounted to just five percent of sales. The company began by shipping a few thousand vehicles a year to neighboring Sri Lanka and Bangladesh, but soon was reaching markets in Europe, Latin America, Africa, and West Asia. Its domestic market share, barely less than 50 percent, was slowly slipping. By 1994, Bajaj also was contemplating high-volume, low-cost car manufacture. Several of Bajaj's rivals were looking at this market as well, which was being rapidly liberalized by the Indian government. Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the world's fourth largest manufacturer of two-wheelers, behind Japan's Honda,

Suzuki, and Kawasaki. New models included the Bajaj Classic and the Bajaj Super Excel. Bajaj also signed development agreements with two Japanese engineering firms, Kubota and Tokyo R & D. Bajaj's most popular models cost about Rs 20,000. 'You just can't beat a Bajaj,' stated the company's marketing slogan. The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw were introduced in 1997. The next year saw the debut of the Kawasaki Bajaj Caliber, the Spirit, and the Legend, India's first four-stroke scooter. The Caliber sold 100,000 units in its first 12 months. Bajaj was planning to build its third plant at a cost of Rs 4 billion ($111.6 million) to produce two new models, one to be developed in collaboration with Cagiva of Italy.

BOARD OF DIRECTORS:-

Name of the Directors Shri Rahul Bajaj Shri Nanoo Pamnani Shri Sanjiv Bajaj Shri Madhur Bajaj Shri Rajiv Bajaj Shri D J Balaji Rao Shri S H Khan Shri Naresh Chandra

Designation Chairman Vice Chairman Managing Director Director Director Director Director Director

Company profile:
Founder Year of Establishment Industry Business Group Listings & its codes Presence Jamnalal Bajaj 1926 Automotive - Two & Three Wheelers The Bajaj Group BSE - Code: 500490; NSE - Code: BAJAJAUTO Distribution network covers 50 countries. Dominant presence in Sri Lanka, Bangladesh, Columbia, Guatemala, Peru, Egypt, Iran and Indonesia. Joint Venture Registered & Head Office Kawasaki Heavy Industries of Japan Akurdi Pune - 411035 India Tel.: +(91)-(20)-27472851 Fax: +(91)-(20)-27473398 Works

Akurdi, Pune 411035 Bajaj Nagar, Waluj Aurangabad 431136 Chakan Industrial Area, Chakan, Pune 411501

E-mail Website

rahulbajaj@bajajauto.co.in www.bajajauto.com

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INTRODUCTION TO RATIO ANALYSIS In practice a number of techniques are used for the analysis of financial statements. Such as, common sized statement, percentage increase or decrease of various items, trend analysis and so on. But the most popular and widely used technique is the ratio analysis which highlights the relationship between different figures in the same financial statement, that is, balance sheet or income statement or relationship of figures in both the financial statement. Ratio is a numerical relationship between one item and another. Ration analysis is a widely- used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strengths and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two items\ variables. This relationship can be expressed as:1) Percentages, say, net profits are 25 per cent of sales. (Assuming net profits of 25,000 and sales of Rs. 100,000) 2) Fraction (net profit is one-fourth of sales) and 3) Proportion of numbers (the relationship between net profits and sales is 1:4). These alternative methods of expressing items which are related to each other are, for purpose of financial analysis, referred to as ratio analysis. It should be noted that computing the ratio does not add any information not already inherent in the above figures of profits and sales. What the ratios do is that they reveal the relationship in a more meaningful way so as to enable us to draw conclusions from them. The rationale of ratio analysis lies in the fact that it makes related information comparable. A single figure by itself has no meaning but when expressed in terms of a related figure, it yields significant inferences. For instance, the fact that net profits of a firm amount to, say, Rs. 10 lakh throws no light on its adequacy or otherwise. The figure of net profit has to be considered in relation to other variables. How dose it stand in relation to sales? What does it represent by way of return on total assets used or total capital employed? If, therefore, net profits are shown in terms of their relationship with items such as, sales, assets, capital employed, equity capital and so on, meaningful

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conclusions can be drawn regarding their adequacy. To carry the above example further, assuming the capital employed to be Rs. 50 lakh and Rs 100 lakh; the net profits are 20 per cent and 10 per cent respectively. Ratio analysis, thus, as a quantitative tool, enables analysts to draw quantitative answers to questions such as: Are the net profits adequate? Are the assets being used efficiently? Is the firm solvent? Can the firm meet its current obligations IMPORTANCE OF RATIO ANALYSIS As a tool of financial management, rations are of crucial significance. The importance of ration analysis lies in the fact that it presents facts on a comparative basis and enables the drawing of inferences regarding the performance of a firm. Ration analysis is relevant in assessing the performance of a firm in respect of the following aspects: Liquidity Position:With the help of ration analysis conclusions can be drawn regarding the liquidity position of a firm. The liquidity position of a firm would be satisfactory if it is able to meet its current obligations when they become due. A firm can be said to have the ability to meet its short-term liabilities if it ahs sufficient liquid funds to pay the interest on its short-maturing debt usually within a year as well as to repay the principal. This ability is reflected in the liquidity ration of a firm. The liquidity ratios are particularly useful in credit analysis by banks and other suppliers of short-term loans. Long-term Solvency:Ratio analysis is equally useful for assessing the long-term financial viability of a firm. This aspect of the financial position of a borrower is of concern to the long-term creditors, security analysts and the present and potential owners of a business. The longterm solvency is measured by the leverage/capital structure and profitability ratios which focus on earning power and operating efficiency. Ration analysis reveals the strengths and weaknesses of a firm in this respect. The leverage ratios, for instance, will indicate whether a firm has a reasonable proportion of various source of finance or if it is heavily loaded with debt in which case its solvency is exposed to serious strain. Similarly, the various profitability ratios would reveal whether or not the firm is able to offer adequate return to its owners consistent with the risk involved.

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Operating Efficiency:Yet another dimension of the usefulness of the ratio analysis, relevant from the viewpoint of management, is that it throws light on the degree of efficiency in the management and utilization of its assets. The various activity ratios measure this kind of operational efficiency. In fact the solvency of a firm is, in the ultimate analysis, dependent upon the sales revenues generated by the use of its assets-total as well as its components. Overall Profitability:Unlike the outside parties which are interested in one aspect of the financial position of a firm, the management is constantly concerned about the over-all profitability of the enterprise. This is, they are 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 the firm. This is possible if an integrated view is taken and all the ratios are considered together. Inter-firm Comparison:Ratio analysis not only throws light on the financial position of a firm but also serves as a stepping stone to remedial measures. This is made possible due to inter-firm comparison and comparison with industry averages. A single figure of a particular ratio is meaningless unless it is related to some standard or norm. One of the popular techniques is to compare the ratio of a firm with the industry average. It should be reasonably expected that the performance of a firm should be in broad conformity with that of the industry to which it belongs. An inter-firm comparison would demonstrate the firms position vis--vis its competitors. If the results are at variance either with the industry average or with those of the competitors, the firm can seek to identify the probable reasons and, in that light, take remedial measures. Trend Analysis:Finally, ratio analysis enables a firm to take the time dimension into account. In other words, whether the financial position of a firm is improving or deteriorating over the years. This is made possible by the use of trend analysis. The significance of a trend
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analysis of ratios lies in the fact that the analysts can know the direction of movement, that is, whether the movement is favourable or unfavourable. For example, the ratio may be low as compared to the norm but the trend may be upward. On the other hand, though the present level may be satisfactory but the trend may be a declining one. ADVANTAGE OF RATIO ANALYSIS The accounting ratios offer the following advantages: Help in financial statement analysis:It is easy to understand the financial position of a business enterprise in respect of short term solvency, capital structure position etc., with the help of various ratios. The users can also gain by knowing the profitability rations of the firm. Help in simplifying accounting figures:The single figures in terms of absolute amount such Rs. 10 lakhs income, Rs. 50 lakhs sales etc, are not of much use. But they become important when relationship are established, say for example, between gross profit and sales or net profits and capital employed and so on. Help in calculating the operating efficiency of the business enterprise:Ratios enable the users of financial information to determine operational efficiency of a business firm by relating the profit figure to the capital employed for a given period. Help in locating weak points of the firms:Ratio analysis would pin-point the deficiency of various departments or a branch of a business unit even through the overall performance is satisfactory. Help in inter-firm and inter-period comparisons:A firm can compare its results not only with other firms in the same industry but also its own performance over a period of time with the help of ratio. Help in forecasting:Accounting ratios calculated and tabulated for a numbers of years enable the users of financial information to determine the future result on the basis of past trends.
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LIMITATION OF RATIO ANALYSIS The ratio analysis is not a fool-proof method in financial statement analysis. In spite of many good points, in suffers from a numbers of limitations which arise from the nature of financial information itself. Some of the important limitations are given below: Ratios Ignore Qualitative Factors:The ratios are obtained from the figure expressed in money. In this way, qualitative factors, which may be important, are ignored. For instance, it is just possible that the financial position of a firm may be quite satisfactory in terms of money, yet it may not be desirable to extend credit because of inefficient management in the matter of payments on due dates. Trends and not the Actual Ratios:The different ratios calculated from the financial statement of a business enterprise for one single year are of limited value. It would be more useful to calculate the important figures in respect of income, dividends, working capital, etc. for a numbers of years. Such trends are more useful than absolute ratios. Defective Accounting Information:The ratios are calculated from the accounting data in the financial statement. It means that defective information would give wrong ratios. Thus, the deliberate omission such as omitting purchase, would positively affect the ratios too. Variation In General Operating Condition:While interpreting the results based on ratio analysis, all business enterprise have to work within given general economic conditions, conditions of the industry in which the firms operate and the position of individual companies within the industry. For example, if the firm has been forced by the government to sell its products at fixed prices, its comparison with other firms would become impossible.

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1) OBJECTIVE OF THE STUDY: The main objective of project is to do Ratio analysis of an Automobile (two and three wheeler) Industry of an India. Analyze the information collected on sales, profit, earning per share, market price etc. To do Ratio Analysis for the selected company and make necessary comments on it so as to provide complete idea and core ideology of the company.

2) BENEFIT OF THE STUDY: It is useful for analysis of the actual financial situation of the company. It helps the investor while taking the investment decision. It provides vast knowledge about Automobile (two and three wheeler) industry.

3) SOURCES OF DATA:Basically the sources of data are divided into two main categories: Primary Sources of Data. Secondary Sources of Data.

Secondary data is the data already collected by someone for his/her purpose of study. I have utilized secondary sources of data to suffice the need of my project adequately.

4) RESEARCH DESIGN:A research design specifies the methods and procedures for conducting a particular study. Broadly speaking, research design can be grouped in three different categories: Exploratory research Descriptive research Casual research

I have used DESCRIPTIVE RESEARCH design.

5) REFERENCE PERIOD:I have utilized Last 5 Year data of balance sheet of company for analysis of Automobile (Two and three Wheeler) sector.

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RATIO ANALYSIS OF BAJAJ AUTO

1) GROSS PROFIT RATIO :This ratio establishes the relationship between gross profit on sales and net sales in terms of percentage indicating the percentage of gross profit earned on sales. Gross Profit Gross Profit Ratio = -------------------- * 100 Net Sales Years 2006 2007 2008 2009 2010 AVERAG RATIO Gross profit (a) 1738.74 1897.05 1,416.21 1,313.99 2,715.06 1,816.21 Net sales (b) 7,572.13 9,420.24 8,827.15 8,700.17 11,813.25 9,266.59 Ratio (%) (a/b) 22.9624 20.1380 16.0438 15.1030 22.9832 19,4461

25

22.9624 20.138

22.9832

20 16.0438 15 15.103

10

0 2006 2007 2008 2009 2010

Overall gross profit of the company is good. The highest ratio is in the year of 2010 and the lowest ratio is in the year 2009.In 2006 to 2009 Ratio is decreasing year by year and after 2010 ratio is increasing. This is good sign for the company.

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2) NET PROFIT RATIO :This ratio establishes the relationship between the amount of net profit or net income and the amount of sales revenue. Net Profit Net Profit Ratio = ------------------- * 100 Net Sales Years 2006 2007 2008 2009 2010 AVERAG RATIO Net profit (a) 1,101.63 1,237.96 755.95 656.48 1,702.73 1,090.95 Net sales (b) 7,572.13 9,420.24 8,827.15 8,700.17 11,813.25 9,266.59 Ratio (%) (a/b) 14.5485 13.1415 8.5639 7.5456 14.4137 11.6426

16 14 12 10 8 6 4 2 0

14.5485 13.1415

14.4137

8.5639 7.5456

2006

2007

2008

2009

2010

Overall net profit of the company is good. The highest ratio is in the year of 2006 and the lowest ratio is in the year 2009.In 2006 to 2009 Ratio is year by year decreasing and after 2010 ratio is increasing. This is good sign for the company.

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3) OPERATING RATIO :This ratio takes into account the aggrerate of manufacturing cost of goods sold and other operating expenses on the one hand, and the net sales revenue on the other. Cost of Sales Operating Ratio = ------------------- * 100 Sales Revenue Years 2006 2007 2008 2009 2010 AVERAG RATIO Cost of sales(a) 6,341.36 8,089.45 7,809.79 7,582.97 9,373.16 7,839.35 Sales revenue(b) 7,572.13 9,420.24 8,827.15 8,700.17 11,813.25 9,266.59 Ratio (%) (a/b) 83.7461 85.8731 88.4746 87.1589 79.3445 84.9194

90 88 86 84 82 80 78 76 74 2006 2007 83.7461 85.8731

88.4746 87.1589

79.3445

2008

2009

2010

Operating ratio of the company is increasing 2006 to 2008 and then after year by year decreasing. It is higher in year 2008 and lowest in the year 2010. So it shows company increases its cost of sales. This is not shows good sign.

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4) OPERATING PROFIT RATIO:Operating profit ratio defines the relationship between operating profit and net sales. It shows the percentage of operating profit on net sales. Operating Profit Operating Profit Ratio = ---------------------- * 100 Net sales Years Operating Profit(a) 2006 2007 2008 2009 2010 AVERAG RATIO 1,279.78 1,329.89 1,085.21 1,092.71 2,487.69 1,455.06 7,572.13 9,420.24 8,827.15 8,700.17 11,813.25 9,266.59 16.9012 14.1174 12.2940 12.5596 21.0585 15.3861 Sales revenue (b) Ratio (%) (a/b)

25 21.0585 20 16.9012 15 14.1174 12.294 12.5596

10

0 2006 2007 2008 2009 2010

Operating profit of the company is increasing year by year except year 2008. It means operating profit of the company is increasing. So it shows better efficiency of the company.

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5) CURRENT RATIO :The ability of a company to meet its short-term commitment is normally assessed by comparing current assets with current liabilities. The current ratio establishes the relationship between the current assets and the current liabilities. The ideal ratio is 2:1. Current Assets Current Ratio = ------------------------Current Liabilities Years Current Assets (a) 2006 2007 2008 2009 2010 AVERAG RATIO 2,939.55 3,848.25 1,780.67 2,401.45 3,111.75 2,816.33 Current Liabilities (b) 3,734.97 4,517.25 2,019.23 2,602.35 4,466.78 3,468.12 0.7870 0.9257 0.8819 0.9228 0.6966 0.8428 Ratio (a/b)

1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 0.787

0.9257

0.8819

0.9228

0.6966

2007

2008

2009

2010

Overall ratio of the current assets to current liability is not good of this company. Ratio is increasing is good but below 1 is the bad sign of the company.

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6) LIQUIDITY RATIO :A liquidity ratio is also known as acid-test ratio, therefore, used as a complementary ratio to the current ratio. The ratio is concerned with the establishment of relaionship between the liquid assets and the liquid liabilities. The ideal ratio is 1:1 Liquidity Assets Liquidity Ratio = -----------------------Curent Liabilities Years Liquid Assets(a) Current Liabilities(b) 2006 2007 2008 2009 2010 AVERAG RATIO 382.39 593.99 330.05 494.33 373.04 434.76 3,734.97 4,517.25 2,019.23 2,602.35 4,466.78 3468.12 0.1024 0.1315 0.1634 0.1900 0.0840 0.1342 Ratio(a/b)

0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2006 2007 2008 0.1024 0.1315 0.1634

0.19

0.084

2009

2010

Liquidity ratio of the company is also not good. The company should have it above 1. But in no years it is above 1. So it is bad sign for the company. 24

7) DEBT EQUITY RATIO :This ratio is calculated to measure the relative proportion of outsiderss funds invested in the company. This ratio determined to ascertain the soundness of long term financial policies of that company and is also known as external-internal equity ratio. Long Term Debt Debt Equity Ratio = ------------------------Shareholder Fund Years Long term debt(a) Shareholder fund(b) 2006 2007 2008 2009 2010 AVERAG RATIO 1,467.15 1,625.43 1,334.34 1,570.00 1,338.58 1,467.10 4,770.73 5,534.32 1,587.59 1,869.69 2,928.34 3,338.13 0.3075 0.2937 0.8405 0.8397 0.4571 0.5477 Ratio(a/b)

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 2007 0.3075 0.2937

0.8405

0.8397

0.4571

2008

2009

2010

The debt of the company compares to its share holders fund is very low. It fluctuate year by year. This is not good sign for the company.

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8) PROPRITORY RATIO :This ratio shows the relationship between shareholders fund and total assets. The result clearly shows the share of owners in the total assets of the company. When the proprietary ratio is substracted from one, the resultant figure represents the share of outsiders claim on the assets of the company. Shareholder Fund Propritory Ratio = -------------------------Total assets Years Shareholder fund(a) 2006 2007 2008 2009 2010 AVERAG RATIO 4,770.73 5,534.32 1,587.59 1,869.69 2,928.34 3,338.13 6,237.88 7,159.75 2,921.93 3,439.69 4,266.92 4,805.23 0.7648 0.7730 0.5433 0.5436 0.6863 0.6622 Total assets(b) Ratio(a/b)

1 0.8 0.6 0.4 0.2 0 2006 2007 2008 2009 2010 0.7648 0.773 0.6863 0.5433 0.5436

Most of the fund of the company is shareholders own fund. Debts are very less of the company. Majority part of the fund is contributed by the shareholders so it is good sign for the company.

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9) RETURN ON CAPITAL EMPLOYED RATIO:This is an important ratio as it shows the amount of profit available on the total capital employed. Earning Befor Intrest Tax Return on Propritory Fund Ratio = ------------------------------ ---Total capital employed Years 2006 2007 2008 2009 2010 AVERAG RATIO EBIT (a) 1,738.40 1,891.71 1,250.32 1,067.18 2,520.47 1,693.62 Capital employed (b) 6,237.88 7,159.75 2,921.93 3,439.69 4,266.92 4,805.23 Ratio (a/b) 0.2787 0.2642 0.4279 0.3103 0.5907 0.3744

0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 2007 2008 2009 2010 0.2787 0.3103 0.2642 0.4279 0.5907

Return on capital employed is very less of the company. A firm gets very less return compare to employment of its fund. It is not good for the company. Company should increase its return.

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10) NET PROFIT TO TOTAL ASSETS RATIO :This ratio establishes the relationship between the net profit and otal assets. This ratio tries to findout how efficient the company was in utilizing the funds to generate or earn profit. Net profit Net Profit to Total Assets Ratio = -----------------Total assets Years 2006 2007 2008 2009 2010 AVERAG RATIO Net profit (a) 1,101.63 1,237.96 755.95 656.48 1,702.73 1,090.95 Total assets (b) 6,237.88 7,159.75 2,921.93 3,439.69 4,266.92 4,805.23 Ratio (a/b) 0.1766 0.1729 0.2587 0.1909 0.3991 0.2396

0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2006 2007 2008 2009 2010 0.1766 0.1729 0.1909 0.2587 0.3991

Net profit compare to total assets of the company is also very less. To have a better efficiency, company should increase its net profit. Overall return is not good for the company.

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11) DEBTORS TURNOVER RATIO :Debtor turnover ratio, also known as receivables turnover ratio or debtors velocity establishes the relationship between the net credit sales of the year and the average receivable. Debtors Debtors Turnover Ratio = ----------------------- * 365 Net Credit Sales Years 2006 2007 2008 2009 2010 AVERAG RATIO Debtors (a) 301.55 529.83 275.31 358.65 272.84 347.64 Credit sales (b) 7,572.13 9,420.24 8,827.15 8,700.17 11,813.25 9266.59 Ratio (days) 15 21 11 15 8 14

25 21 20 15 15 11 10 8 15

0 2006 2007 2008 2009 2010

The debtors turnover ratio is fluctuating year by year. This ratio should not be decrease. It becomes high in the year 2007 and low in the 2010 which is good sign for the company.

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12) FIXED ASSETS TO PROPRIETERS FUND RATIO :This ratio establishes the relationship between the fixed assets and propritors fund. This ratio tries to findout how much percentage is the fixed assets of total net worth. Total fixed assets Fixed assets to propri. Fund ratio = ---------------------------Total propritors fund

Years 2006 2007 2008 2009 2010 AVERAG RATIO

fixed assets 1,133.00 1,273.60 1,268.61 1,542.29 1,479.59 1,339.49

proprietors fund 4,770.73 5,534.32 1,587.59 1,869.69 2,928.34 3,338.13

Ratio (a/b) 0.2375 0.2301 0.7991 0.8249 0.5053 0.5194

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 2007 2008 0.2375 0.2301 0.7991

0.8249

0.5053

2009

2010

Fixed assets compares to the owners fund is decreasing year by year and last year 2010 it decreases it means companys assets investment is decreasing compare to the owners fund.

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13) EARNING PER SHARE :EPS Ratio shows the return that shareholders getting out of per share. It shows the earning available to shareholder per share. It can be find out by dividing net profit by total no. of shares. Total Net Profit EPS = ------------------------Total no. of shares Years 2006 2007 2008 2009 2010 AVERAG RATIO Net profit 1,101.63 1,237.96 755.95 656.48 1,702.73 1,090.95 No. of shares 10.1184 10.1184 14.4684 14.4684 14.4684 12.7284 Ratio (a/b) 108.8739 122.3474 52.2483 45.3734 117.6861 89.3058

140 122.3474 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 52.2483 45.3734 108.8739 117.6861

EPS of the company is increasing in the year 2007 but it starts falling from 2008 which is not good sign. In the year 2010 it again increases it shows good sign for the company.
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Conclusion:-

I have prepared this report on the bases of the information available in the balance sheet of BAJAJ AUTO (INDIA) LTD.

From the above discussion conclude that of BAJAJ AUTO (INDIA) LTD. has a good future. The company has good technology for its product.

Total profit of company is increasing in last year and also a total sale of the company is increasing continuously from last three years. The amount of dividend declared by the company is increasing year by year.

The company is also engaged in a project of overseas which helps the company in its growth.

According to me, BAJAJ AUTO (INDIA) LTD. is doing an excellent business and so it becomes profitable company and very popular company.

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Bajaj auto
Balance Sheet of Bajaj Auto
Mar '06 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 101.18 101.18 0.00 0.00 4,669.55 0.00 4,770.73 0.02 1,467.13 1,467.15 6,237.88 2,894.22 1,761.22 1,133.00 43.33 5,856.97 272.93 301.55 80.84 655.32 2,282.98 1.25 2,939.55 0.00 1,419.08 2,315.89 3,734.97 -795.42 0.00 6,237.88 719.06 471.49 Mar '07 12 mths 101.18 101.18 0.00 0.00 5,433.14 0.00 5,534.32 22.46 1,602.97 1,625.43 7,159.75 3,178.54 1,904.94 1,273.60 107.62 6,447.53 309.70 529.83 62.16 901.69 2,925.24 21.32 3,848.25 0.00 1,683.46 2,833.79 4,517.25 -669.00 0.00 7,159.75 811.66 546.96

--------- in Rs. Cr. --------Mar '08 12 mths 144.68 144.68 0.00 0.00 1,442.91 0.00 1,587.59 6.95 1,327.39 1,334.34 2,921.93 2,994.68 1,726.07 1,268.61 34.74 1,857.14 349.61 275.31 54.74 679.66 1,099.68 1.33 1,780.67 0.00 1,185.19 834.04 2,019.23 -238.56 0.00 2,921.93 1,129.29 109.73 Mar '09 12 mths 144.68 144.68 0.00 0.00 1,725.01 0.00 1,869.69 0.00 1,570.00 1,570.00 3,439.69 3,350.20 1,807.91 1,542.29 106.48 1,808.52 338.84 358.65 135.68 833.17 1,567.09 1.19 2,401.45 0.00 1,378.20 1,224.15 2,602.35 -200.90 183.30 3,439.69 924.96 129.23 Mar '10 12 mths 144.68 144.68 0.00 0.00 2,783.66 0.00 2,928.34 12.98 1,325.60 1,338.58 4,266.92 3,379.25 1,899.66 1,479.59 120.84 4,021.52 446.21 272.84 100.20 819.25 2,291.29 1.21 3,111.75 0.00 2,218.06 2,248.72 4,466.78 -1,355.03 0.00 4,266.92 818.25 202.40

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Profit & Loss account of Bajaj Auto

Mar '06 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

--------- in Rs. Cr. --------Mar '07 12 mths Mar '08 12 mths 9,856.66 1,029.51 8,827.15 170.27 67.85 9,065.27 6,760.04 69.20 350.09 53.72 390.15 209.63 -23.04 7,809.79 1,085.21 1,255.48 5.16 1,250.32 173.96 1.12 1,075.24 59.32 1,134.56 378.78 755.95 1,049.75 0.00 289.37 49.18 1,446.84 52.25 200.00 109.73 Mar '09 12 mths 9,310.24 610.07 8,700.17 -4.52 -24.49 8,671.16 6,502.10 60.89 366.67 58.10 383.41 226.22 -14.42 7,582.97 1,092.71 1,088.19 21.01 1,067.18 129.79 0.00 937.39 18.72 956.11 301.61 656.48 1,080.87 0.00 318.30 54.10 1,446.84 45.37 220.00 129.23 Mar '10 12 mths 12,420.95 607.70 11,813.25 38.76 47.60 11,899.61 8,187.11 70.35 411.76 73.80 423.87 221.94 -15.67 9,373.16 2,487.69 2,526.45 5.98 2,520.47 136.45 0.00 2,384.02 24.25 2,408.27 707.50 1,702.73 1,186.05 0.00 578.73 96.12 1,446.84 117.69 400.00 202.40

8,653.83 10,741.91 1,081.70 1,321.67 7,572.13 9,420.24 458.96 567.16 49.01 -0.90 8,080.10 9,986.50 5,446.62 59.09 282.45 79.50 299.99 198.52 -24.81 6,341.36 1,279.78 1,738.74 0.34 1,738.40 191.00 3.62 1,543.78 59.03 1,602.81 479.11 1,101.63 894.74 0.00 404.74 56.76 1,011.84 108.87 400.00 471.49 6,969.50 79.34 310.07 74.53 457.17 230.89 -32.05 8,089.45 1,329.89 1,897.05 5.34 1,891.71 190.26 0.39 1,701.06 26.60 1,727.66 490.09 1,237.96 1,119.95 0.00 404.73 68.78 1,011.84 122.35 400.00 546.96

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