CHAPTER-8 SUMMARY, FINDINGS & SUGGESTIONS

CHAPTER-8 SUMMARY, FINDINGS & SUGGESTIONS SR. NO. PARTICULAR P. NO 8.1 INTRODUCTION 166 8.2 METHODOLOGY 166 8.3 ANALYSIS OF LIQUIDITY 167 8.4 ANALYSIS OF PROFITABILITY 168 8.5 ANALYSIS OF FINANCIAL STRUCTURE 171 8.6 ANALYSIS OF ACTIVITY 173 8.7 SUGGESTIONS: 175 8.7.1 SUGGESTIONS BASED ON RATIO 175 8.7.2 OVERALL SUGGESTIONS 178 8.8 SUMMARY CHART OF ANALYSIS 180

8.1 INTRODUCTION The term financial performance analysis means manage funds very well i.e. breaking down a complex set of facts contained financial position in to simple elements, in such a way that proper evaluation about the past and present financial position and liquidity position can be done and forecast about future position can be made. With liberalization and globalization in the world today, financial management is most important matter for the every one because of its used by various classes of people who are directly or indirectly related and interested in the concern in order to know short-term liquidity, long-term liquidity, profitability, solvency, operational efficiency and growth potential of activity. Such analysis is done by using different tools and techniques of financial management such as ratio analysis like financial leverage analysis, profitability analysis, liquidity analysis as well as activity analysis. Thus, financial management in the automobile industry is important not only for managerial personnel but also for creditors, investors, government, employees and researcher as well as for all those who have interest regarding financial and liquidity in the automobile industry. 8.2 METHODOLOGY The present study A Study of Financial Performance of Selected Companies of Indian Automobile Industry has been undertaken with the object of analyzing liquidity, profitability, financial structure and activity. The present study includes five automobile companies which are Hind Motors, Mahindra & Mahindra Motors, Premier Motors, Tata Motors and Force Motors registered in India and it covers a span of eleven years from 2002-03 to2012-13. Data are collected from annual reports of the selected companies. Further information obtained from Society of Indian automobile manufacturers (SIAM), Magazines, News Papers, various Journals and websites etc For the purpose of analysis financial performance of selected automobile companies has been done by applying the accounting technique ratio analysis. In addition to this statistical techniques like Descriptive statistics, graphical presentation, one way ANOVA between selected companies and selected years of Indian automobile industry are used to analyze financial performance.. 166

8.3 ANALYSIS OF LIQUIDITY Liquidity has been defined in three ways: The different between current assets and currents liabilities (The net working capital approach). Second approach concerned with difference between quick assets and liquid liabilities and last approach concerned with difference between liquid assets and liquid liabilities. For the purpose of the present analysis the liquidity management has been taken in to consideration. The management of liquidity is one of the most important facets of financial management. The objective of liquidity management is to manage current assets and current liabilities in such a way that an acceptable level of networking is maintained so as to protect and preserve liquidity and profitability of the firm. 1. The average current ratio of Hind Motors, Mahindra & Mahindra Motors, Tata Motors and Force Motors was less than the norm of 2:1. It means the solvency position of these companies was poor and unstable. While the average current ratio of Premier Motors was more than the norm. It means the solvency position of this companies was good than the other companies. The solvency position was bad and sort term creditors position regarding their claims was not safe because companies had not sufficient funds in the form of current assets to meet their claims. It is also found that the current ratio of all the selected automobile companies marked in fluctuating trend. This situation indicates the inconsistence performance as well as no fix policy regarding current assets. (Table 4.1) 2. From the ANOVA test, it is observed for company wise analysis; the null hypothesis of current ratio is rejected. It can be concluded that there is significant difference in current ratio between considered automobile companies. While from the year-wise analysis, the null hypothesis is not rejected. It can be concluded that there is no significant difference in current ratio between considered years. (Table 4.2.1 & 4.2.2) 3. Super Quick ratio was found lower than the normal 0.5:1 in all selected automobile companies and also marked a fluctuating trend during the study period. The financial position regarding the super quick ratio of these 167

selected automobile companies were not sound and this state of affairs indicates poor liquidity position. (Table 4.3) 4. It is depicted from company wise analysis; the null hypothesis of quick ratio is not rejected. It can be concluded that there is no significant difference in quick ratio between considered automobile companies. From ANOVA for the year-wise, the null hypothesis is not rejected. It can be concluded that there is no significant difference in quick ratio between considered years. (Table 4.4.1 & 4.4.2) 5. An average Liquid ratio of Premier Motors was found better as compared to average of other selected auto-mobile companies during the study period. Average liquid ratio of Hind Motors, Mahindra & Mahindra Motors, Tata Motors and Force Motors was 0.31, 0.67, 0.28 and 0.61 respectively. As far as concerned about the trend of Liquid ratio of all selected companies registered a fluctuating trend during the study period. (Table 4.5) 6. The null hypothesis of liquid ratio for companies-wise is rejected. It can be concluded that there is significant difference in liquid ratio between considered automobile companies. From ANOVA for the year-wise, the null hypothesis is not rejected. It can be concluded that there is no significant difference in liquid ratio between considered years. (Table 4.6.1 & 4.6.2) 8.4 ANALYSIS OF PROFITABILITY Profit planning is an integrated part of overall process of financial planning. The term profitability refers to the ability of a given investment to earn returns from its use. Profitability can be ascertained and analyzed the computation of profits ratio either based on operating profit profits or net profits or both. In this chapter the concepts of the profit, profitability and rate of return, bases of profitability measuring the profitability in relation to sales and capital employed, shareholders investment and dividend policy of the sample units have been analysis. Profitability is a measure of the organizations ability to translate to its financial resources into mission related activities. Financial efficacy is desirable in all organization of individual mission. 168

Profitability measures the intensity with which a business uses it assets to generate gross revenue and the effectiveness of producing, purchasing, pricing, financing, and marketing decisions. At the micro level profitability refers to the efficiency with which resources are correctly allocated among competing uses at a point of time. Profitability is a measure of how well an organization has managed certain trade of (risk and return, liquidity and profitability) in the use of its financial efficiency. The present study has been made in order to analysis profitability through ratio of the automobile of companies in India. The profitability ratios which have been discussed like: (1) Gross profit ratio (2) Operating profit ratio (3) Return on net capital employed (4) Net profit ratio (5) Return on total assets ratio (6) Return on net worth of the company under study has been also made. 1. Gross profit is basically relative term as percent of net sales, which registered in fluctuating trend during the period of study. An average gross profit ratio of Mahindra and Mahindra Motors and Tata motors was high as compared to other selected companies. These companies showed good profitability, whereas other three auto-mobile companies profitability condition was not good, this may affect the market reputation as well as investors. (Table 5.1) 2. The null hypothesis of gross profit ratio (company wise as well as year wise) is not rejected. It can be concluded that there is no significant difference in Gross Profit between considered automobile companies as well as between considered years. (Table 5.2.1 & 5.2.2) 3. Operating profit margin ratio is used to measure company's pricing strategy and operating efficiency. This ratio is basically concerned with operating income and net sales. Operating profit margin ratio showed a fluctuating trend during the period of study. Operating profit margin ratio of all selected companies was less than 13%, whereas in the Hind Motors, this ratio marked in negative. This situation indicates that company management was not satisfactory. So, Hind motors did not have to make control over the cost of goods sold and strategy of sales was not properly. (Table 5.3) 169

4. The alternative hypothesis is accepted in the case of operating profit margin ratio and this is indicated that there is significant difference in operating ratio between considered automobile companies. Whereas, the null hypothesis of operating profit margin ratio is not rejected and this is indicated that there is no significant difference in operating ratio between considered years. (Table 5.4.1 & 5.4.2) 5. The study shows that return on the capital employed in the selected automobile company has marked fluctuating trend during all the years of study period. All the selected companies have tried to maintain this ratio in range of 20% to 49%. This situation indicates that the each company try to give minimum to shareholders. (Table 5.5) 6. From the table it can be said that, the null hypothesis of return on capital employed ratio (company wise as well as year wise) is accepted means that there is no significant difference in Return on capital Employed between considered automobile companies as well as between considered years. (Table 5.6.1 & 5.6.2) 7. An average of Net profit ratio indicated that selected auto-mobile Companies except Hind Motors were quite satisfactory. Hind Motors as marked in negative trend. Net profit ratio was highest marked in Premier Motors that being an average of 16.98% and it was followed by M & M. (Table 5.7) 8. The alternative hypothesis is accepted in the case of net profit ratio (companies-wise) means that there is significant difference in net profit ratio between considered automobile companies. While the null hypothesis is not rejected in the case of year wise net profit ratio and it can be said that there is no significant difference in net profit ratio between considered years. (Table 5.8.1 & 5.8.2) 9. The return on assets ratio highest marked in M & M Motors means efficient use of fund or efficient management of funds. Whereas lowest marked in Hind Motors which means that inefficient use of funds. For the Hind Motors this lead toward over-capitalisation and this situation is harmful. So, it s advisable to use funds in efficient manner. Mahindra & Mahindra Motors, 170

Premier Motors, Tata Motors and Force Motors have tried to maintain an average 5% to 11% respectively. It means that these companies tried to get minimum return through funds. Here, also above three companies should try to use funds in efficient manner. (Table 5.9) 10. The null hypothesis is rejected in the case of return on assets ratio (companies-wise) and from it can be concluded that there is significant difference in return on assets between considered automobile companies. Whereas, the null hypothesis is not rejected in the case of return on assets ratio (year-wise), which concluded that there, is no significant difference in return on assets between considered years. (Table 5.10.1 & 5.10.2) 11. Return on net worth indicates how well the company has used the resources of the owners. On making an analysis of the performance of the selected auto mobile companies the return on net worth marked in fluctuating trend during the period of study. The average return on net worth in the covered period ranged 10% to 24% in selected automobile companies except Hind Motors. Return on net worth ratio of Hind Motors indicates the negative trend. This situation indicates that Hind Motors more rely on external funds which may creates serious problems for the company. (Table 5.11) 12. In the case of return on net worth ratio (companies-wise & year-wise), the null hypothesis is not rejected. It can be concluded that there is no significant difference in return on net worth between considered automobile companies as well as between considered years. (Table 5.12.1 & 5.12.2) 8.5 ANALYSIS OF FINANCIAL STRUCTURE Understandably a Financial analyst should not be interested in the performance of a business enterprise during a short-period of times because a company which is financially sound today may eventually lose its strength in the long period if it suffers prolonged losses. 1. Proprietary ratio indicates the extent of share holder s fund utilization in financing the assets of the business. This ratio was lowest marked in Hind Motors with an average of 14.70% and highest marked in Premier Motors with an average of 52.09% respectively. Whereas other three auto-mobile 171

companies indicated at satisfactory level means good return on internal funds. (Table 6.1) 2. The alternative hypothesis is accepted in the case of proprietary ratio means that there is significant difference in proprietary ratio between considered automobile companies and that means the difference is considered as major between companies as well as within company. While the null hypothesis of proprietary is accepted and it can be concluded that there is no significant difference in proprietary ratio between considered years. That means the difference is considered as negligible between years as well as within year. (Table 6.2.1 & 6.2.2) 3. On the basis of analysis it can be concluded that the highest marked debtequity ratio with an average of 1515.31 percentage in Tata Motors Followed by Force Motors, Mahindra & Mahindra Motors, Premier Motors respectively and this situation indicates high risk, even as lowest marked in Hind Motors with an average of 131.37 percentage. Lower ratio indicates less risk but this ratio showed a fluctuating trend in all the selected automobile companies during the period of study. (Table 6.3) 4. The alternative hypothesis is accepted in the case of debt-equity ratio (companies-wise) means that there is significant difference in debt-equity ratio between considered automobile companies. While the null hypothesis of debt-equity ratio is accepted and from it can be concluded that there is no significant difference in debt equity ratio between considered years. (Table 6.4.1 & 6.4.2) 5. It is one of the convention ratio used to measure debt-servicing capacity of a company. Interest coverage ratio was highest marked in Mahindra and Mahindra Motors followed by Premier Motors, Force Motors and Tata Motors respectively. Above four auto-mobile companies maintained this ratio at higher level than the standard norm. While lower ratio marked in Hind Motors with an average of 1.17. Interest coverage ratio was marked in a fluctuating trend during the period of the study. (Table 6.5) 172

6. The null hypothesis is rejected it means alternative hypothesis is accepted in the case of interest coverage ratio (companies-wise) which indicates that there is significant difference in Interest Coverage between considered automobile companies whereas the null hypothesis of interest coverage ratio is accepted and from it can be concluded that there is no significant difference in interest coverage ratio between and considered years. (Table 6.6.1 & 6.6.2) 8.6 ANALYSIS OF ACTIVITY This finding section deals with the activity analysis in terms of size of investment. Activity ratios are concerned with how efficiency the assets of the firm are managed or utilized. These ratios indicate the rate at which different assets are turned over in the process of doing business. The greater the rate of turnover or conversion, is the more efficient the utilization or management, other things being equal, resulting in higher profitability. For the activity analysis following ratio are calculated (1) Total assets turnover ratio (2) Capital turnover ratio (3) Inventory turnover ratio and (4) Current assets turnover ratio. It also highlights the efficiency with which the activities are concluded and also deal with operation efficiency as well as in term of size of investment. The main conclusions drawn are as under: 1. The total assets turnover ratio, which indicates the effectiveness of the utilization of assets, registered a fluctuating trend in almost all the companies under study. An average ratio of Premier Motors was the lowest 0.30 times while it was the highest 1.53 times in Hind Motors respectively. The ratio was in most of years less than one in Premier Motors, whereas it was almost more than one in Hind Motors, Mahindra & Mahindra Motors and Force Motors during the study period. In case of Tata Motors is to be found that this ratio was les that one in some of the year like 2008-2009 to 2010-2011 and 2012-2013, whereas other than these years, it is found that to be more than one. The reason responsible for the lower ratio was the increase in the amount of assets because of huge expansion and development programmes. Thus, the addition to investment in various assets could not be resulted in proportionate in sale. (Table 7.1) 173

2. The alternative hypothesis is accepted in the case of total turnover ratio (companies-wise), which means there is significant difference in total asset turnover ratio between considered automobile companies. While the total turnover ratio analysed with year-wise, the result showed that the null hypothesis is not rejected which means there is no significant difference in total asset turnover ratio between considered years. (Table 7.1.1 & 7.1.2) 3. Analysis of capital turnover ratio reveals that the Hind Motors showed the highest turnover ratio. Highest oscillation marked in Hind Motors. Capital turnover ratio showed ratio as more than one in Hind Motors, Mahindra & Mahindra Motors, Tata Motors and Force Motors which was showing efficiency in the utilization of the capital employed. Capital turnover ratio showed less than one in Premier Motors which was point out inefficiency in the utilization of the capital employed. (Table 7.3) 4. The null hypothesis of current turnover ratio is accepted (company wise as well as year wise) means that there is no significant difference in capital turnover ratio between considered automobile companies as well as between considered years. (Table 7.4.1 & 7.4.2) 5. Inventory turnover ratio expresses the frequency with which average level of inventory it turned through operations. Inventory turnover ratio registered in fluctuating trend during the period of study in all selected auto-mobile companies. It varied from 1.49 times to 6.50 times during the study. This ratio was marked lowest in Premier Motors with 1.49 times. The inventory turnover ratio was the highest in Mahindra& Mahindra Motors followed by Hind Motors, Tata Motors and Force Motors respectively. The companies should plan a policy to maintain a defined proportion of inventory to avoid heavy short term investment in it. (Table 7.5) 6. From ANOVA of inventory turnover ratio (companies-wise), it can be concluded that the null hypothesis is rejected means there is significant difference in inventory turnover ratio between considered automobile companies whereas the null hypothesis is not rejected (year wise) an it can be said that there is no significant difference in inventory turnover ratio between considered years. (Table 7.6.1 & 7.6.2) 174

7. Current assets turnover ratio is indicative of the over-all marking efficiency of the organization. As far as concerned about current assets turnover ratio was marked more than 4 times in Hind Motors followed by M & M Motors as 3.84 times and Tata Motors with 3.57 times. This indicates efficient use of short-term funds. Current assets turnover ratio registered near to 2.5 times in Force Motors and this condition indicates that this company tried to efficient use of short-term fund. While in Premier Motors this ratio was marked in 0.64 times only and this situation leads towards inefficient use of short-term funds. (Table 7.7) 8. The null hypothesis of current assets ratio (company wise) is rejected which means there is significant difference in current asset turnover ratio between considered automobile companies. Whereas the null hypothesis is accepted when the comparison made between year-wise, and it can be concluded that there is no significant difference in current asset turnover ratio between considered years. (Table 7.8.1 & 7.8.2) 8.7 SUGGESTIONS As a researcher, the following suggestions are found for the betterment of the selected automobile companies based on analysis. A suggestion is to be divided into two categories; one is based on ratio analysis and second one is general. 8.7.1 SUGGESTIONS BASED ON RATIO These suggestions are based on ratio analysis and this through company may improve their financial stability, liquidity position, operating efficiency and may restructure finance. 1. As current ratio was less than standard ratio 2:1 in all the selected automobile companies. Therefore these companies need to increase current ratio by investing in current assets or by decreasing current liabilities and try to maintain standard norm of this ratio. 2. Super Quick ratio of all companies found very negative therefore all the selected automobile companies required to improve quick ratio immediately to improve its quick ratio. Automobile companies need to maintain the proper level of cash, bank balance and short-term investment in current 175

assets. At the same way try to increase reserves by investing profit or decreasing level of current liabilities. 3. As liquid ratio found that liquidity ratio was less than the standard ratio 1:1 in all the selected automobile companies. Hence these companies should increase liquid ratio by investing in liquid assets or by decreasing liquid liability. All the companies should try to maintain standard norm (1:1) of this ratio as know well without liquid assets very difficult meet with current obligation. For the trust of creditors and investor, companies need to make proper planning about short-term funds and its utilization. 4. Gross profit ratio thus reflects the margin of profit that a concern is able to earn on its trading and manufacturing activity. All the selected companies should have to maintain this ratio at high level as it s indicates operating efficiency. Moreover companies should have to make the plan about inventory or try to reduce cost of goods sold and increase the sales. 5. Operating margin is used to measure company's pricing strategy and operating efficiency. It gives an idea of how much a company makes (before interest and taxes) on each rupees of sales. All the selected companies should try to maintain this ratio at high level. For the maintaining high level of this companies need to increase operating income by net sales or increase operating efficiency and also reduce the external funds. 6. Return on capital employed ratio measures the profitability of a company by expressing its operating profit as a percentage of its capital employed. From the analysis it is to be found that return on capital employed below than 50% in all the selected automobile companies. Accordingly, all the selected companies should try to maintain this ratio up to 50% because its point to well-organized use of funds. 7. Net profit ratio indicates the company s capacity to face adverse economic conditions such as price competition, low demand, etc. Obviously, higher the ratio the better is the profitability. Hence, try to sustain this ratio at higher level because this ratio reflects the operating efficiency and performance of the company. As we know this ratio is very useful for the investors. 176

8. Return on assets ratio should to be maintained at higher level because it s beneficial for the company. 9. Return on net worth should try to preserve at higher level as it s indicates that efficient use of equity capital and reserves. If this ratio is to be found at higher level means company has to be invested funds in profitable manner. 10. All the selected automobile companies should have to increase proportion of net worth by reinvesting profit in the business. Net worth ratio high means companies have sufficient internal fund and less depends on external funds. 11. Lowe value of debt-equity ratio are favourable because it s indicates less risk and less depends of external. Hence, all the selected automobile companies should try to maintain at lower level as it s favourable for the companies. 12. Companies should have to maintain interest coverage ratio at higher level because it indicates greater ability of the company to handle fixed charge liabilities. Also try to obtain funds at low interest or less use of external funds. 13. Companies should try to sustain total assets turnover ratio at highest level as it s indicates well-organized use of funds. 14. As far concerned of capital turnover ratio, companies can be preserved up to 20 times but consistency is to be required per year. 15. For maintain inventory turnover ratio company can be decided purchasing policy. If purchasing policy is to be planned it means avoid the unnecessary investment in inventory. At the same way companies should have to increase operating efficiency. Therefore, company can be maintained inventory turnover ratio at higher level as it desirable for the company. 16. Higher level of capital turnover ratio is preferable for the company as it indicates that the efficient and well-organized management of current asset. Higher ratio means current assets is to be easily converted into cash and working capital cycle is to be smooth going. 17. From the analysis, it is found that all the selected ratios are fluctuating trend during the period of study. Hence, all the selected companies should have to maintain these ratios at particular level or as per standard norm otherwise 177

create problems for the automobile companies. For the improvement of the theses ratios, need to study of previous sales, invested fund records and also observed the marketing strategy of the product. All the selected automobile company should maintain the consistency in financial performance. 8.7.2 OVERALL SUGGESTIONS This is overall general suggestions and it may very useful for the companies to get better the financial position and for the better performance. 1. The company should try to increase the production so as to get economies of large-scale production. It will assist in raising the rate of return on capital employed. 2. In order to increase the profitability of the companies, it is suggested to control the cost of goods sold and operating expenses. 3. The management should try to adopt cost reduction techniques in their companies to get over this critical situation. At the same way, to reduce power and fuel Cost Company should find out other alternative for this. 4. The quantum of sales generated should be improved impressively in order better to enjoy better per of the assets and capital employed. 5. The selected automobile companies should try to match the amount of working with the sales trends. Where there is a deficit of working capital, they should try to build on adequate amount of working capital. Where, there is an excessive working capital, it should be invested either in trade securities or should be used to repay borrowings. 6. The management should try to utilize their production capacity fully in order to reduce factory overheads and to utilize their fixed assets properly. 7. The burden of interest has produced a deteriorating effect and reduced the percentage of net profit. It is suggested that the companies should try to reduce the interest burden gradually by increasing the owner s fund. 8. To strengthen the financial efficiency, long-term funds have to be used to finance core current assets and a part of temporary current assets. It is better if the companies can reduce the over sized short- term loans and advances eliminates the risk arranging finance regularly 178

9. The policy of borrowed financing in selected automobile companies under study was not proper. So the companies should use widely the borrowed funds and should try to reduce the fixed charges burden gradually by decreasing borrowed funds and by enhancing the owner s fund. For this purpose companies should enlarge their equity share capital by issuing new equity shares. 10. For regular supply of raw materials and the final product infrastructure facilities are required further improvement. 11. Cost accounting and cost audit should be made mandatory for this units and cost sheet along with annual financing statement should be prepared. 12. The public sector enterprises set up in backward areas were not guided by commercial considerations. They were set up to fulfil the aim of balanced regional development. 13. There has been too much of government interference in policy and day- today working and decisions. This leads to delays in decision-making. This should be abolished. 14. Improper planning and delays in implementation of projects lead to rise in their cost. So properly planning should be made. 15. There is overstaffing in public enterprises. The number of persons employed is more than what is required to run the public enterprises efficiently. This increases the cost and reduces profitability of these enterprises. 16. The automobile companies should reduce power and fuel consumption by using low as content coal (imported coal), lignite, agro waste product especially ground nut husk, and beggars should be used as coal substitute. 17. To regularize and optimize the use of cash balance proper techniques may be adopted for planning and control of cash. The investments in inventories should be reduced and need to introduce a system of prompt collection of debts. 18. Selected automobile companies should try to use properly their operating assets and should try to minimize their non-operating expenses. With the help of these suggestions all the selected automobile companies try to improve their financial performance. 179

8.8 Summary Chart of Analysis Main Objective: The objective of the study is to evaluate, analyze and interpret the Financial Performance Analysis of Selected Companies of Indian Automobile Industry. Objective of Liquidity Analysis: To assess the liquidity position of the Selected Automobile companies Sr. No. Name of the Objectives of 2 Super Quick 1 Current To measures shortterm solvency To assess the standard of liquidity 3 Liquid To assess the relation (Source: Table 4.1 to 4.6.2) between liquid assets and liquid liabilities Average of Result of ANOVA Result Hind M&M Premier Tata Force Average Companies Year wise wise 0.61 0.81 2.43 0.60 1.34 1.16 Fluctuating Trend Rejected 0.12 0.33 0.15 0.14 0.22 0.19 Fluctuating Trend 0.31 0.67 1.17 0.28 0.61 0.61 Fluctuating Trend Rejected Suggestions Try to maintain at least standard level (2:1) Try to maintain at least standard level (0.50:1) Try to maintain at least standard level (1:1) 180

Objective of Profitability Analysis: To examine the profitability of the Selected Automobile companies. Sr. No. Name of the 1 Gross Profit 2 Operating Profit Margin 3 Return on Capital Employed Objectives of To know the earning capacity on trading To measure company s pricing strategy as well as operating efficiency To measure the proficient use of capital 4 Net Profit To measures the 5 Return on Total Assets 6 Return on Net Worth profitability To evaluates the resourceful use of assets To assess the return on net worth (Source: Table 5.1 to 5.12.2) Average of Result of ANOVA Hind M&M Premier Tata Force Average Result Companies wise 8.88 21.99 12.26 21.29 12.98 15.48 Negative and Year wise Fluctuating Trend -6.07 11.48 12.25 9.74 0.34 5.55 Negative and Rejected Fluctuating Trend 19.53 48.78 21.61 46.23 48.17 36.87 Negative and High Fluctuating Trend -3.82 8.74 16.98 5.06 6.03 6.60 Negative and Fluctuating Trend -5.41 10.64 5.35 5.55 7.84 4.79 Negative and High Fluctuating Trend - 23.11 9.98 16.88 11.53 9.77 Negative and 12.69 Fluctuating Trend Rejected Rejected Suggestions To make the Specific Planning for sales and control expenses. Try to increase sales as well as operating income. Try to increase net profit through sales To change the strategy of sales and control the expenses. Try to efficient use of available assets Try to efficient use of net worth and increase the net profit also 181

Objective of Financial Structure Analysis: To assess the financial strength and funds management policy of the Selected Automobile companies. Sr. No. Name of the Objectives of Average of Result of ANOVA Result Hind M&M Premier Tata Force Average Companies Year wise Suggestions wise 1 Proprietary To measure the use 14.70 45.36 52.09 33.59 36.73 36.49 Higher This ratio should be of internal capital Fluctuation Rejected maintained at higher level. Debt-Equity To measure the 131.37 918.63 465.56 1515.31 1157.50 837.67 Higher According to rules companies proportion of Fluctuation Rejected should have to balance at creditors and desirable level. shareholders capital. 3 Interest To assess the debt- 1.18 30.79 10.55 6.59 9.65 11.75 Higher Profit through company Coverage serving capacity of Fluctuation Rejected should cover their interest firm. expense. So, try to increase their operating profit. (Source: Table 6.1 to 6.6.2) 182

Objective of Activity Analysis: To analyze the activity of the Selected Automobile companies. Sr. No. Name of the Objectives of Average of Result of ANOVA Result Hind M&M Premier Tata Force Average Companies Year wise Suggestions wise 1 Total Assets To measure the use of 1.53 1.20 0.30 1.05 1.34 1.08 Fluctuating Try to maintain this ratio at Turnover assets for generating Trend Rejected higher level because leads sales towards assets are to be covered by the sales. 2 Capital To know the relation 18.88 2.37 0.40 1.91 2.49 5.21 Fluctuating This ratio should maintain at Turnover between net sales and Trend higher level means capital is to capital employed be covered by net sales. 3 Inventory To measures the 6.47 6.50 1.49 4.86 3.50 4.56 Higher Inventory should be managed Turnover efficiency of inventory Fluctuation Rejected efficiently and try to be cover management through net sales 4 Current Assets To assess the current 4.37 3.84 0.64 3.57 2.38 2.96 Higher Try to efficient use of current Turnover assets policy Fluctuation Rejected assets because it leads towards efficient management of current assets. (Source: Table 7.1 to 7.8.2) 183