Maruti analysis

1. Contents
Comparative income statement ............................................................................1
Interpretation...................................................................................................1
Comparative balance sheet ..................................................................................2
Interpretation...................................................................................................3
Common size income statement...........................................................................5
Interpretation...................................................................................................5
Common size balance sheet.................................................................................6
Interpretation...................................................................................................7
Trend analysis.....................................................................................................9
Interpretation...................................................................................................9

2. 1
Comparative income statement
Interpretation
Company has increased its revenue by 6 % in the year 2018, but due to the fall in the other
income the aggregate income has not increased as much as revenue.
With increase in the revenue it is necessary that the expenditure will increase but the increase in
interest is 286.4% which is much more than the expected rate.
There has been 5.99% increase in depreciation which is justifiable as there has been a subsequent
increase in the value of assets. Also it can be seen that there is a significant increase in the tax
which is a result of increased revenue of the company.
Profit before tax and debenture increased by 9.71% which shows the growth of the company and
if we compare the profit after tax which is 5.23 % that is a clear indicator that the company is
performing overall good but they have to manage the financial cost wisely.
There has also been an increase in earnings per share by 5.23% signifying the improvement of
the share price of the company in the market.
PARTICULAR 2018 2017 CHANGE %
Revenue 81,994.40 77,266.20 4,728.20 6.12
Other Income 2,045.50 2,279.80 -234.30 -10.28
Total Income 84,039.90 79,546.00 4,493.90 5.65
Expenditure 70,278.60 67,002.60 3,276.00 4.89
Interest 345.7 89.4 256.30 286.69
PBDT 13,761.30 12,543.40 1,217.90 9.71
Depreciation 2,757.90 2,602.10 155.80 5.99
PBT 11,003.40 9,941.30 1,062.10 10.68
Tax 3,281.60 2,603.60 678.00 26.04
Net Profit 7,721.80 7,337.70 384.10 5.23
Equity 151 151 0 0
EPS 255.62 242.91 12.71 5.23

3. 2
Comparative balance sheet
2018 2017 change %
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 151 151 0 0
Total Share Capital 151 151 0 0
Reserves and Surplus 41,606.30 36,280.10 5326.2 14.68077541
Total Reserves and
Surplus 41,606.30 36,280.10 5326.2 14.68077541
Total Shareholders
Funds 41,757.30 36,431.10 5326.2 14.61992638
NON-CURRENT LIABILITIES
Long Term Borrowings 0 0 0 0
Deferred Tax Liabilities
[Net] 558.9 466.2 92.7 19.88416988
Other Long Term
Liabilities 1,585.30 1,105.00 480.3 43.46606335
Long Term Provisions 26.5 21.9 4.6 21.00456621
Total Non-Current
Liabilities 2,170.70 1,593.10 577.6 36.25635553
CURRENT LIABILITIES
Short Term Borrowings 110.8 483.6 -372.8 -77.08850289
Trade Payables 10,497.00 8,367.30 2129.7 25.45265498
Other Current Liabilities 4,274.30 3,926.50 347.8 8.857761365
Short Term Provisions 560 449 111 24.72160356
Total Current
Liabilities 15,442.10 13,226.40 2215.7 16.75210186
Total Capital And
Liabilities 59,370.10 51,250.60 8119.5 15.84274135
ASSETS
NON-CURRENT ASSETS
Tangible Assets 13,047.30 12,919.70 127.6 0.987639032
Intangible Assets 311.7 373 -61.3 -16.43431635
Capital Work-In-Progress 2,125.90 1,252.30 873.6 69.75964226
Fixed Assets 15,484.90 14,545.00 939.9 6.462014438
Non-Current Investments 34,072.90 26,302.20 7770.7 29.54391648
Long Term Loans And
Advances 0.2 0.3 -0.1 -33.33333333

4. 3
Other Non-Current Assets 1,890.70 1,626.90 263.8 16.21488721
Total Non-Current
Assets 51,448.70 42,474.40 8974.3 21.12872695
CURRENT ASSETS
Current Investments 1,217.30 2,178.80 -961.5 -44.12979622
Inventories 3,160.80 3,262.20 -101.4 -3.108331801
Trade Receivables 1,461.80 1,199.20 262.6 21.89793195
Cash And Cash
Equivalents 71.1 13.8 57.3 415.2173913
Short Term Loans And
Advances 3 2.5 0.5 20
OtherCurrentAssets 2,007.40 2,119.70 -112.3 -5.297919517
Total Current Assets 7,921.40 8,776.20 -854.8 -9.739978578
Total Assets 59,370.10 51,250.60 8119.5 15.84274135
Interpretation
There is a significant increase in the value of total shareholders’ funds due to an increase of
14.68% in total reserves and surplus.
Coming to the non-current liabilities, the deferred tax liabilities have increased by 19.88% that
indicates that the estimated tax was less than the actual tax to be paid. Other long term liabilities
have increased by 43.46% which is a very significant difference as they have increased the
investment in fixed assets. There has been a 21.004% increase in the long term provisions. Total
non-current liabilities have increased by 36.25%.
There was an opposite outcome for the short term borrowings. The company has almost paid off
77.08% of their short term borrowings which show that the company wants to create a good
credibility in the market. The trade payables increased by 25.44% which is justifiable since it is
an automobile company therefore, it has to take credit from suppliers. Total current liabilities
have increased by 16% which approximately balances the current liability section of the balance
sheet.
The total capital and liabilities have increased by 15.84% which is in accordance with the growth
rate of the company.
There is a significant change in the capital work in progress of about 69.75% while the change in
the value of total fixed assets is just 6.49%. This change in capital work in progress is because of
the new manufacturing facility being established in Gujarat and new upgraded showrooms
known as Maruti arena being opened.
There is an increase of 21.12% in the value of non-current assets. This maybe because of risk-
management and utilizing the revenues in a proper direction. There is a significant increase in

5. 4
both non-current investments and other non-current assets while there is a significant decrease in
long term loans and advances.
The value of current assets has decreased by 9.73% due to fall in the values of current
investments, inventories and other current assets whereas the values of trade receivables, cash
and cash equivalents and short term loans and advances increased.
The company is performing well and is working towards growth therefore, most of the fixed
assets and long term investments of the company are being jammed in capital work in progress
and risk management respectively.

6. 5
Common size income statement
particular 2018 2017
% change in
2018
% change
in 2017
Revenue 81,994.40 77,266.20 100.00 100.00
Other
Income 2,045.50 2,279.80 2.494682564 2.950578649
Expenditure 70,278.60 67,002.60 85.71 86.72
Interest 345.7 89.4
-
0.421614159
-
0.115703891
PBDT 13,761.30 12,543.40 16.7832 16.23402
Depreciation 2,757.90 2,602.10 3.36 3.37
PBT 11,003.40 9,941.30 13.42 12.87
Tax 3,281.60 2,603.60 4.00 3.37
Net Profit 7,721.80 7,337.70 9.42 9.50
Equity 151 151 0.18415 0.19542827
EPS 255.62 242.91 0.311752998 0.314380674
Interpretation
There is an increase in the revenue generated by 4728.2. Even though there has been an increase
in the revenue, the other incomes have decreased when we compare them on the basis of the
revenue generated along with the expenditure incurred by the company.
There has been an increase in the interest paid from 2017 to 2018 yet the change in profit before
depreciation and tax is negligible. Although there is very minimal change in the depreciation
recorded, there has been an increase in the profit before tax.
A significant change in tax on the basis of revenue can also be seen. The net profit of the
company on the basis of its revenue has decreased from 9.50 to 9.42 indicating that the company
has not been able to maintain its profits.
There is no significant change in the equity of the company along with earnings per share when
we compare the two on the basis of the revenue that the company has generated in the two years,
2017 and 2018 respectively.
The company needs to look into the reasons for decrease in the other incomes and manage its
financial costs to maintain the profits and continue to grow and develop.

7. 6
Common size balance sheet
2018 2017
% change
in 2018
%
change
in 2017
QUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 151 151 0.25433678 0.294631
Total Share
Capital 151 151 0.25433678 0.294631
Reserves and
Surplus 41,606.30 36,280.10 70.0795518 70.78961
Total Reserves and
Surplus 41,606.30 36,280.10 70.0795518 70.78961
Total Shareholders
Funds 41,757.30 36,431.10 70.3338886 71.08424
NON-CURRENT LIABILITIES
Long Term
Borrowings 0 0 0 0
Deferred Tax
Liabilities [Net] 558.9 466.2 0.94138295 0.909648
Other Long Term
Liabilities 1,585.30 1,105.00 2.67019931 2.156072
Long Term
Provisions 26.5 21.9 0.04463526 0.042731
Total Non-Current
Liabilities 2,170.70 1,593.10 3.65621752 3.108451
CURRENT LIABILITIES
Short Term
Borrowings 110.8 483.6 0.18662593 0.943599
Trade Payables 10,497.00 8,367.30 17.680617 16.32625
Other Current
Liabilities 4,274.30 3,926.50 7.19941519 7.661374
Short Term
Provisions 560 449 0.94323574 0.876087
Total Current
Liabilities 15,442.10 13,226.40 26.0098939 25.80731
Total Capital And
Liabilities 59,370.10 51,250.60 100 100
ASSETS

8. 7
NON-CURRENT ASSETS
Tangible Assets 13,047.30 12,919.70 21.9762136 25.20888
Intangible Assets 311.7 373 0.52501175 0.727796
Capital Work-In-
Progress 2,125.90 1,252.30 3.58075866 2.443484
Fixed Assets 15,484.90 14,545.00 26.081984 28.38016
Non-Current
Investments 34,072.90 26,302.20 57.3906731 51.32077
Long Term Loans
And Advances 0.2 0.3 0.00033687 0.000585
Other Non-Current
Assets 1,890.70 1,626.90 3.18459966 3.174402
Total Non-Current
Assets 51,448.70 42,474.40 86.6575936 82.87591
CURRENT ASSETS
Current Investments 1,217.30 2,178.80 2.05035868 4.251267
Inventories 3,160.80 3,262.20 5.32389199 6.365194
Trade Receivables 1,461.80 1,199.20 2.46218214 2.339875
Cash And Cash
Equivalents 71.1 13.8 0.11975725 0.026927
Short Term Loans
And Advances 3 2.5 0.00505305 0.004878
OtherCurrentAssets 2,007.40 2,119.70 3.38116325 4.135952
Total Current
Assets 7,921.40 8,776.20 13.3424064 17.12409
Total Assets 59,370.10 51,250.60 100 100
Interpretation
There has been a significant increase in the total liabilities and capital from 2017 to 2018.
The change in the equity share capital from 2017 to 2018 on the basis of total liabilities and
capital is very minimal. There is a slight change in the reserves and surplus of the company
whereas the total shareholders’ fund has increased with slight significance.
There is an increase in the overall non-current liabilities when we compare them to the total
liabilities that the company has. This shows that the company looking forward towards
diversification in the product line.

9. 8
The total current liabilities of the company has increased which can be seen by trade payables
and short term provisions even though there has been a decrease in short term borrowings and
other current liabilities when compared to total liabilities and capital.
The increase in trade payable and short term provisions together is significantly more than the
total decrease in short term borrowings and other current liabilities.
There is decrease in the tangible assets of the company along with a significant decrease in
intangible assets. There has been an increase in the capital work in progress showing that the
company is working towards expansion. The overall fixed assets of the company have decreased.
There has been a significant increase in both non-current investments and long term loans and
advances but the increase in the other non-current assets is insignificant. In all the total non-
current assets of the company has increased a lot indicating investment in the company for the
purpose of diversification and expansion.
The current investments, other current assets and inventories of Maruti have decreased to a great
extent because of the new policy of Maruti which offers the customers the service to customize
their vehicle according to the demand. Trade receivables, cash and cash equivalents and the short
term loans and advances have increased. The total current assets have decreased as the increase
in some particular current assets is significantly less than the decrease in the other current assets.
When we see the overall comparison of Maruti from 2017 to 2018 we can see that they are trying
to redefine their policies to innovate and follow a new style of business through their customer
centric services which can be seen by the significant change in capital work in progress and
current assets, inventory management.

10. 9
Trend analysis
years r and d Trend Sales Trend
Profit
before
tax Trend
2018 8,316 224 781,048 225 110,034 512.6922
2017 6,404 172 669,094 193 99,603 464.09
2016 5,935 160 564,412 163 74,437 346.8316
2015 6,560 176 486,055 140 48,682 226.8288
2014 6,576 177 426,448 123 36,585 170.4641
2013 5,175 139 426,126 123 29,910 139.3626
2012 3,717 100 347,059 100 21,462 100
Interpretation
There has been a constant increase in research and development along with sales and profit. The
total increase in r and d has been of approximately 2.24 times. The increase in r and d from 2015
to2016 is less due to the problems created by the workers at the Gurgaon facility.
The sales have also increased by 2.25 times over the period of the last 7 years. This is due to the
constant innovation in the r and d department that the company has to offer to its customers in
India. The sales from 2013 to2014 because of new emerging competitions from the international
market.
The profit before tax for Maruti has increased by more than 5 times over the period of last seven
years. There has been a drastic increase from the years 2016 to 2017 due to the introduction of
new segment of Maruti India called Nexa which offers the customer a whole new experience of
premium cars with the Maruti trust and service.
The trend analysis shows that Maruti has used its revenue in a optimum level and compete with
international brands through its innovative research and development team which can be seen
from the performance as a whole.

11. 10
RATIO ANALYSIS
RATIO
FORMULA ANSWER
1) LIQUIDITY
RATIO
CURRENT
RATIO
CURRENT
ASSETS
/CURRENT
LIBILITIES 79,214
154,42
1 0.512974
QUICK
ASSETS
LIQUIDE
ASSETS
/CURRENT
LIBILITIES 47606 154421 0.308287
2)PROFITIBILIT
Y RATIO
NET
PROFIT
RATIO
NET PROFIT
/SALES *100
110,03
4
781,04
8
14.08799%
RETURN
ON TOTAL
ASSETS
NET
PROFIT/TOTA
L *100
110,03
4
593,70
1 18.53357%
RETURN
ON
EQUITY
NET
PROFIT/TOTA
L EQUITY*100
110,03
4
417,57
3 26.35084%

12. 11
STOCK
TURNOVE
R RATIO
COST OF
SALES
/AVERAGE
STOCK 32115
3)ACTIVITY
RATIO
FIXED
ASSETS
TURNOVE
R RATIO
SALES /FIXED
ASSETS
781,04
8
514,48
7 1.51811
CURRENT
ASSETS
TURN
OVER
SALES
/CURRENT
ASSETS
781,04
8 79,214 9.859974
TOTAL
ASSETS
TURNOVE
R
SALES
/TOTAL
ASSETS
781,04
8
593,70
1 1.315558
4)SOLVANCY
RATIO
DEBT
EQUITY
RATIO DEBT/EQUITY 21,707
417,57
3 0.051984
DEBT
CAPITAL
EMPLOYE
D RATIO
DEBT/CAPITA
L
EMPLOYEED 21,707 439280 0.049415

13. 12
Ratio analysis interpretation
1) Liquidity ratios
 Current ratio – the current ratio of the company is 0.5 which indicates that the liquidity
of the company is not good and it will not able to pay its current liabilities with is current
assets.
 Quick ratio – when we have a look at the quick ratio its around 0.3 which is a result of
low current assets of the company
 Conclusion- when we have the look at the business what Maruti do ,low liquidity ratio is
not a very big issue as because of the business with heavy investment in fixed assets may
be successful even the ratio is low
2) Profitability ratios
 Net profit ratio – it shows the profit margin of the company able to earn and have a
rough idea about the profitability of the company, when we see Maruti’s net profit ratio
which is around 14.2% which less the market average this is because of the low budget
car segment market of Maruti.
 Return on total assets – with a ROA of 18.388% Maruti shows that the company is
effectively use its current and fixed assets and which is able to earn a decent return out of
it.
 Return on equity - this is most useful ratio for investors of the company. They only
want to know the return from their investment which about 26.35 % for Maruti which
tells that it’s a good time to invest in Maruti to invest to get a good return
 Conclusion – when we look at all the profitability ratio Maruti is giving a good return to
is investor and able to utilize its assets in an efficient way.
3) Activity ratios
 Fixed asset turnover ratio - fixed asset turnover ratio for Maruti is around 1.5 it is a
justifiable because it is a business which needs heavy fixed assets but it can be also
interpreted that the company has over invested in the capital assets.
 Current asset turnover ratio - current assets return is very high as compared to fixed
but it does not put a significant influence because Maruti is a capital asset oriented
industry (9.21)
 Total asset turnover ratio – it’s about 1.3 which from the first point can be very clear
that because two reasons it can be low
 Conclusion – when we compare all the ratio it can be said that company has over fixed
assets to solve it they need to improve their sales.
4) Solvency ratios
 Debt to equity ratio - its around 0.05 which shows that the company, which means that
company has a very small amount of external liabilities as compared to internal liability
which is good sign for the shareholders of the company which will able to earn them
more return but a very small debt to equity ratio will be a concern for many because it
will not help to magnify the opportunity of low cost fund available in the market

14. 13
 Debt to capital employed ratio- when we look at the Debt to capital employed ratio
company it very low around 4% which is good as it always better to have a less of
external fund in the total capital of the company
 Conclusion – the above two ratio shows that the solvency position of the company is
very good but if the solvency is very good it will not fulfill the interest of shareholder as
it will not able to properly utilize the external fund benefit, therefore there should be mix
of external and internal fund which will fulfill both the need solvency and optimum use
of resources