A STUDY ON FINANCIAL PERFORMANCE ANALYSIS AT MARUTHI MOTORS

PRIVATE LIMITED, COIMBATORE

CHAPTER I
1.INTRODUCTION

1.1 INTRODUCTION TO FINANCIAL STATEMENTS

Accounting process involves recording, classifying and summarizing of various
business transactions. The day to day transactions of business are recorded in different subsidiary
books. These transactions are posted into various ledger accounts and the balances are taken out
at the end of a financial period. The aim of maintaining various records is to determine
profitability of the enterprise from operations of the business and also to find out its financial
position. Financial statements, essentially, are interim reports, presented annually and reflect a
division of the life of an enterprise into more or less arbitrary accounting period –more
frequently a year.

The financial statements are the end product of financial accounting. They are statements
containing the financial information of business enterprises. It is prepared primarily for decision
making. They are drawn from the accounting balances contained in the Trial Balance. Financial
Statements normally include Profit &Loss Account and Balance Sheet. The financial statements
are historical documents and relate to past period. Decision making is possible through analysis
and interpretation of financial statements. Financial Analysis is the process of identifying the
financial strength and weakness of the firm by properly establishing relationship between the
items of balance sheet and profit &loss account. There are various methods and techniques used
for analyzing financial statements such as comparative statements, trend analysis, common-size
statements, ratio analysis, fund flow and cash flow an analysis cost-volume profit analysis etc.

OBJECTIVES OF FINANCIAL STATEMENTS

Financial Statements are major means employed by firms to present their financial
situation to owners, creditors and general public. The primary objective is to assist in decision
making.
 The Accounting Principles Board of America (APB) states the following objectives
o To provide reliable financial information about economic resources and
obligations of a business.
o To provide reliable information about changes in net resources (resources less
obligation) arising out of business activities.
o To provide financial information that assist in establishing the earning potentials
of business.
o To disclose, to the extend all possible other information related to the financial
statements that is relevant to the needs of the users.

MEANING AND CONCEPTS OF FINANCIAL ANALYSIS

The term financial statement analysis includes both analysis and interpretation. The
term „analysis‟ refers to simplification of financial data by methodical classification of the data
given in the financial statement. The term „interpretation‟ means, explaining the meaning and
significance of the data so simplified. However both „analysis‟ and „interpretation‟ are
interlinked and complementary to each other. In the words of Myers, “Financial statement
analysis is largely a study of relationship among various financial factors in a business as
disclosed by a single set of statements, and a study of the trend of these factors as shown in a
series of statements.”
Financial analysts do these financial analyses to find out the firm‟s
1. Profitability: Its ability to earn income and sustain growth in both short- term and long- term.
A company degree of profitability is usually based on the income statement, which reports on the
company‟s results of operations:
2. Solvency: Its ability to pay its obligation to debtors and other third parties in the long- term;
3. Liquidity: Its ability to maintain positive cash flow, while satisfying immediate obligations;
4. Stability: The firm‟s ability to remain in business in the long run, without having to sustain
significant losses in the conduct of its business. Assessing a company‟s stability require the use
of the income statement and balance sheet, as well as other financial and non- financial
indicators
TYPES OF FINANCIAL ANALYSIS
The classification of financial analysis can be made either on the basis of (1) the
materials used, and (2) the modus operandi of analysis.

1) ON THE BASIS OF MATERIAL USED

According to this basis, financial analysis can be of two types:

(A)EXTERNAL-ANALYSIS
This analysis is done by those who are outsiders for the business. The term outsiders
include investors, credit agencies, government agencies and other creditors who have no access
to the internal records of the company. These persons mainly depend upon the published
financial statements.

B) INTERNAL -ANALYSIS
This analysis is done by persons who have access to the books of account and other
information related to the business. Such an analysis can, therefore, be done by executives and
employees of the organization or by officers appointed for this purpose by the Government or the
Court udders power vested in them. This analysis is meant for managerial purposes. The analysis
is done depending upon the objectives to be achieved through this analysis.

2) ON THE BASIS OF MODUS OPERANDI

According to this, financial analysis can also be of two types:

(A) HORIZONTAL ANALYSIS

In case of this type of analysis, financial statements for a number of years are reviewed
and analysed .The current year‟s figures are compared with the standard or base year. The
analysis statement usually contains figures for two or more years and the changes are shown
regarding each item from the base year usually in the form of percentages. Such analysis gives
the management considerable insight into levels and areas of strength and weakness. Since such
type of analysis is based on the data from year to year rather than on one date, it is also termed as
„Dynamic Analysis.‟
B) VERTICAL ANALYSIS
In this type of analysis a study is made of the quantitative relationship of various items in
the financial statements on a particular date. Such analysis is useful in comparing the
performance of several companies in the same group, or divisions or departments in the same
company. Since this analysis depends on the data for one period, this is not very conductive to a
proper analysis of the company‟s financial position. It is also called „Static Analysis‟ as it is
frequently used for referring to ratios developed on one date or for one accounting period.

PERSONS INTERESTED IN FINANCIAL ANALYSIS

The persons interested in the financial analysis can broadly be divided in to two categories –
(a) the insiders i.e. the management; and (b) the outsiders i.e., share holders, creditors, banks and
financial institutions.

(a) Insiders or Management: The management is basically interested in overall performance of

the firm. It shall like that the firm maintains the solvency so as to able to meet both the long-term
and short-term obligations to its creditors and at the same time ensuring adequate return on the
investment to its owners. The management also employs financial analysis for purpose of
internal control. In particular it is concerned with rationality of investment in the various assets
of the company and in the efficiency of assets management.

(b) Outsiders: The outsiders are mainly interested in the information that is relevant from
their point of view. For instance short-term creditors are basically interested in determining the
firm‟s capacity to pay its current maturing obligations. The relevant information for them is the
items which constitutes current assets and current liabilities. The debenture holders and financial
institutions, granting long-term loans would be more concerned with examining the capital
structure of the company, its past and projected earnings and changes in the financial position.
The share-holders and potential investors would be more interested in the earning per share and
dividend pay-out ratio.
 SIGNIFICANCE OF FINANCIAL ANALYSIS
The financial statements provide a summarized view of the operations of a firm. As a
matter of fact one can know much about a firm by a careful examination of its financial
statements. However, the focus of the financial analysts is on the key figures contained in the
financial statement and the significant relationship that exists between them. The significance of
financial analysis can be summarized as follows:

(a) Helps in screening: Financial analysis can serve as a preliminary screening tool in the
selection of investments. It greatly helps the investors in studying “3 Ps” i.e., prospects, payment
and protection. The prospects of a firm can be judged by looking to both, its present and the
future profitability. The capacity of payment can be judged on the basis of present and
prospective liquidity of the firm. The protection can be judged on the basis of tangible assets
backing, which the firm enjoys.
(b) Helps in forecasting: Financial analysis can be used as a forecasting tool for future
profitability and financial soundness of the business. A comparative study of the key figures in
the financial statements facilitates this work.

(c)Helps in diagnosis: The financial analysis helps the management in identifying the factors
responsible for creating managerial, operating and other problems.
(d) Helps in evaluation: The financial analysis is an important tool for evaluating the
performance of both the management and the organization. It is, thus a yard stick used by the
financial analyst to evaluate the financial condition and performance of the firm.

METHOD OR DEVICES OF ANALYSIS AND INTERPRETATION

The tools or devices mainly used for analysis and interpretation of financial statements
are:
(1) COMPARITIVE STATEMENTS
(2) RATIO ANALYS
RATIO ANALYSIS
A statistic has little value in isolation. Hence, a profit figure of Rs.100 million is meaningless
unless it is related to either the firms turnover (sales revenue) or the value of its assets.
Accounting ratios attempt to highlight the relationships between significant items in the accounts
of a firm. Financial ratios are the analysts microscope; they allow them to get a better view of the
firms financial health than just looking at the raw financial statements.

Ratios are used by both internal and external analysts

* Internal uses
* Planning
* Evaluation of management
* External uses
* Credit granting
* Performance monitoring
* Investment decision

Can approach any dealer in the country for warranty jobs Dealer take the warranty decision,
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1.2 INDUSTRY PROFILE

Introduction to the Automobile Industry
The automobile Industry is one of the most important Industries in the world affecting not
only the economy but also the cultures of the world. It provides jobs for millions of people
generate billions of dollars in the worldwide revenues and provides the basis for a multitude
of related services and support Industries. The automobile has enabled people to travel and
transport goods farther and faster and has opened wide market areas for business. The dream
carriage that moved on its own was realized only in the 18th century when the first car rolled
on streets today the automobile Industry has grown to its maximum. New revolutions are
taking place in this sector. The passenger car division is presenting a wide array of vehicles
that are even beyond imagination.

Now the cars are styled with gracious proportions; creative artistry merges with Industry
design to produce appealing models. The demands for passenger cars are very high and
competition is too tight.

Automobile manufacturing companies all over the world are competing each other. In the
earlier times automobile manufactures of India was not fit for competition, but today the
scenario is completely changed. Indian automobile Industry is still in its infancy but growing
rapidly. The opportunity in the automobile Industry in India is poised for the big leap. India is
the third largest car market in Asia, surpassing China in the process. An Indian automobile
manufacturer comes with more stylish, affordable and super quality vehicles, which stand
along with the foreign brands.

Now in the market car that fit for any economic class are available. Luxury at affordable
price is the new strategy that is followed by the manufacturers. This pulls most of the people
to buy at least one small car.

Today, stepping into 21st century, utilizing new materials, high-tech electronics, new power
source and artificial intelligence, the type of car that automakers are capable of producing
cannot even be imagined.

The Birth of Automobile

The history of automobile actually began about 4000 years ago when the first wheel was
used for transportation in India. Several Indians recorded designs for wind driven vehicles.
The first was Guido da Vigevano in 1335. It was a windmill type to gears and thus to wheels.
In the early 15th century the Portuguese arrived in China and the interaction of two cultures
led to a variety of new technologies, including the creation of a wheel that turned under its
own power. By 1660s small before a full sized engine powered vehicle was created.

By the mid 15th century the idea of self-propelled vehicle have been put into practice with the
development of experimental vehicles powered by the means of springs, clock-works and
Nicolas-Joseph Cugnot of France is considered to hav built the first true automobile in 1769.
Designed by Cugnot and constructed by M. Berzin, it is also the first American who obtained
patent for self-propelled carriage. The early steam powered vehicle were only practical on a
perfectly flat surface as strong as iron.

First Carl Benz invented the petrol engine in 1885 and a year later Daimler made a car driven
by motor of its own design and the rest is history. Daimler‟s deliver 1000 pm and needed
only very small and light vehicles to carry them. France too joined the motoring scenario in
1890.

Charles Duryea built motor carriage in America with petrol engine in 1892, followed by
Elwood Hayness in 1894, thus paving way for motor cars in that country. For many years
after the introduction o automobile, three kinds of power sources were in common use: steam
engines, gasoline or petrol engines and electric motors.

In 1990, over 2300 automobiles were registered in New York, Boston, Massachusettes and
Chicago. Of these 1170 were steam cars, 800 were electric cars and only 400 were gasoline
cars. In ten years from the invention of petrol engine, the motor car had evolved itself into
amazing designs and shapes. By 1898, there were 50 automobile manufacturing companies in
USA, a number that rose to 241 by 1908. In that year Henry Ford revolutionized the
manufacture of automobiles with his assembly-line style of production and brought out the
model T, a car that was inexpensive, versatile and easy to maintain.

The introduction of the model T transformed the automobile from a plaything of the rich to
an item that even people of modest income could afford: by the late 1920s the car has
commonplace in modern nations.

Austin seven was the world‟s first practical four seated “baby car” which brought the
pleasures of motoring to thousands of people who could not buy a larger, more expensive car.
Automobile manufacturers in the 1930s and 1940s are reined and improved on the principles
of ford and other pioneers. Cars were generally large and many were still extremely
expensive and luxurious; many of the most collectible cars date from this time. The increased
affluence of the United states after world war 2nd led to the development of large, petrol
consuming vehicles, while most of the companies in Europe made smaller, more fuel
efficient cars. Since the mid 1970, the rising cost of the fuel has increased the demand for
these smaller cars, many of which have been produced in Japan as well as in Europe and the
United States.
The history of motor vehicles has surely been a well-traversed one. The automobile
as it progressed was a product of many hands, of revolutionary concept and of simple, almost
unnoticed upgrading. In the end, the one who received the most of these challenges and
changes was the motorist, whose interest; money and enthusiasm have forced the
automughals to upgrade, perfect and add to previous achievement in order to stay in
competition.
INDIAN AUTOMOBILE INDUSTRY
The high growth in the Indian economy has resulted in many foreign car manufacturers
entering the Indian market. Rolls Royce, Bentley and Maybach are examples of the few high
end automobile manufacturers to enter India in the recent years.

There were only a few handful of cars in the Indian market in the 1980s. Most of these were
outdated models like HAathitan motor‟s Ambassador (which is still produced and sold). The
only car with the latest technology then was the Maruti 800. It became very popular because
of the low price, high fuel efficiency an good reliability. Since then the market has grown
with over 20 manufacturers and hundreds of models and variants. The Maruti 800 is at the
lower end of over 2 million US dollars.
The Indian automotive Industry has also greatly matured. The Tata Indica was indigenously
developed by Tata Motors. Another Indian manufacturer Mahindra & Mahindra also came up
with its own SUVs, the Scorpio and the Bolero. These cars have proved very popular here
and are also exported to the European markets. An electric car is also manufactured by a local
company, REVA. Tata Motors plans to produce the world‟s first air powered in partnership
with MDI of France.
The passenger vehicle sales in India crossed the one million mark in 2008. This segment
grows at 10-15% annually. Around 85%of the cars sold in India are financed as against the
global average of 70%. In neighboring China, only 15-20% vehicles are financed. There are
only three cars in India for 1000 people as compared to the other extreme 500 cars for 1000
people in the United States. Goldman Sachs has predicted that India will have the maximum
number of cars on the planet by 2050 overtaking the United States.

The Modern Industry

After 1945, sales once again took off, reaching 6.7 million in 1950 and 9.3 million in 1965.
The U.S. auto Industry dominated the global market with 83% of all sales, but as Europe and
Japan rebuilt their economies, their auto Industries grew and the U.S. share dropped to about
25%. Following the OPEC oil embargo in 1973, smaller, fuel-efficient imports increased
their share of the U.S. market to 26% by 1980. In the early 1980s, U.S. auto makers cut costs
with massive layoffs. Throughout the 1990s, imports-particularly from Japan-took an
increasing share of the U.S. market.

Beginning in the early1980s, Japanese and, later, German companies set up factories in the
United States; by 1999, these were capable of producing about 3 million vehicles per year. As
a result, the three big U.S. auto makers now produce less than two thirds of the cars sold in
America.
In the early 1990s, over $140 billion worth of motor vehicles and parts were produced in the
United States by the companies employing more than 210,000 workers. Complaints about
auto pollution, traffic congestion, and auto safety led to the passage of government
regulations beginning in the 1970s, forcing auto manufacturers to improve fuel efficiency and
safety. Auto companies are now experimenting with cars powered by such alternative energy
sources as natural gas, electricity, and solar power.

The automobile Industry in India is the tenth largest in the world with an annual production of
approximately 2 million units. India is expected to overtake China as the world‟s fastest growing
car market in terms of the number of units sold and the automotive Industry is one the fastest
growing manufacturing sector in India. Because of its large market (India has a population of 1.1
billion; second largest in the world ), a low base of car ownership (25 per 1,000 people ) and a
surging economy ,India has become a huge attraction for car manufactures around the world.

Though several major foreign automakers , like Ford , Suzuki , GM, and Honda have their
manufacturing bases in India , Indian automobile market is dominated by domestic companies.
Maruti Suzuki is the largest passenger vehicle company ; Tata Motors is the largest commercial
vehicle company while Aathi is the largest motorcycle company in India. Other major Indian
automobile manufactures include Mahindra& Mahindra, Ashok Leyland and Bajaj auto.

The automotive Industry directly and indirectly employs 13 million individuals in India .The
Industry is valued at about US $ 35billion contributing about 3.1% of India‟s GDP (nominal)
.India‟s cost –competitive auto components
Industry is the second largest in the world .In addition , India‟s motorcycle market is also the
second largest in the world with annual sales of about 5 million units.
History
While automobile were introduced to India in the 1890‟s, the manufacturing Industry
only took off after independence in 1947.The protectionist economic policies of the
government gave rise in 1950‟s to the HAathitan Motors Ambassador , based on a 1950‟s Morris
Oxford , and , is still ubiquitous in the roads and highways of India. HAathitan Motors and few
smaller manufactures such as Premier Automobiles ,Tata Motors ,Bajaj Auto ,Ashok and
Standard Motors held an oligopoly unit India‟s initial economic opening

in 1980‟s . The maverick Indian politician Sanjay Gandhi championed the need for a “people‟s
car”;the project was realized after his death with the launch of a state-owned firm Maruti
Udyog which quickly gained over 50% market share. The Maruti 800 became popular because of
its low price , high fuel efficiency , reliability and modern features relative to its competition at
the time. Tata Motors exported buses and trucks to niche market in the developing world.

The liberalisation of 1991 opened the flood gates of competition and growth which have
continued up to today .The high growth in the Indian economy has resulted in all major
international car manufactures entering the Indian Market. General Motors ,Ford, Toyota,
Honda, Hyundai, and others set up manufacturing plants .Rolls Royce, Bentley and Maybach are
examples of the few high and automobile manufacturers which the entered India in the recent
years .The Tata Nano is at the lower end of the price range costing approx US$ 2,500 and
Bugatti Veyron at the other with a price tag of over US $ 2 million.

India‟s love affair with the automobile is famously embodied in 1920‟s Roll Royce
collection of the erstwhile maharajas . The growing middle class aspires for the automobile
for its convenience and as a status symbol. Upper middle class and wealthy car owners employ
full-time chauffeurs to navigate the aggressive and seemingly lawless traffic patterns of most
cities . The construction of expressway such as the Mumbai –Pune expressway opened up
new touring opportunities . The expected launch of a Formula One circuit in New Delhi is
expected to spark public enthusiasm for a motor sporting Industry.

1.3 COMPANY PROFILE

Maruti Suzuki India Ltd.
December 1983 heralded a revolution in the Indian car Industry. Maruti collaborated with Suzuki
of Japan to produce the first affordable car for the average Indian. At this time, the Indian car
market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983. This was
from where Maruti took over.

The sales figure for the year 1993 reached up to 1,96,820. The company reached a total
production of one million vehicles in March 1994 becoming the first Indian Company to cross
this milestone. It crossed the two million mark in 1997.

India's largest automobile company, Maruti entered the Indian car market with the avowed aim
to provide high quality, fuel - efficient, low - cost vehicles. Its cars operate on Japanese
technology, adapted to Indian conditions and Indian car users. Maruti comes in a variety of
models in the 800 segment. Due to the large number of Maruti 800s sold in the Indian market,
the term "Maruti" is commonly used to refer to this compact car model. Till recently the term
"Maruti", in popular Indian culture, was associated to the Maruti 800 model.

To fend off growing competition, Maruti has recently completed a Rs. 4 billion expansion
project at the current site, which has increased the total production capacity to over 3,20,000
vehicles per annum. It has further plans to modernize the existing facilities and to expand its
capacity by 1,00,000 units in the year 1998-99. The total production of the company will exceed
4,00,000 vehicles per year.

Maruti Suzuki India Limited is a publicly listed automaker in India. It is a leading four-
wheeler automobile manufacturer in South Asia. Suzuki Motor Corporation of Japan holds a
majority stake in the company. It was the first company in India to mass-produce and sell more
than a million cars. It is largely credited for having brought in an automobile revolution to India.
It is the market leader in India. On 17 September, 2007,

Maruti Udyog was renamed to Maruti Suzuki India Limited. The company's headquarters
remain in Gurgaon, near Delhi.
The company vouches for customer satisfaction. For its sincere efforts it has been rated (by
customers)first in customer satisfaction among all car makers in India for seven years in a row in
annual survey by J D Power Asia Pacific.

Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in the
car segment, both in terms of volume of vehicles sold and revenue earned. Until recently,
18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan.
The Indian government held an initial public offering of 25% of the company in June 2003. As
of May 10, 2007, Govt. of India sold its complete share to Indian financial institutions. With this,
Govt. of India no longer has stake in Maruti Udyog.

Maruti Suzuki was born as a government company, with Suzuki as a minor partner, to make a
people‟s car for middle class India. Over the years, the product range has widened, ownership
has changed hands and the customer has evolved. What remains unchanged, then and now, is
Maruti‟s mission to motorise India.

Board of directors
Non-Executive Independent Director and Chairman Amal Ganguli
Non Executive Director D S Brar
CEO Jagdish Khattar
Director Manvinder Singh Banga
Director Osamu Suzuki
Director Pallavi Shroff
Director R C Bhargava
Chairman & Managing Director Shinzo Nakanishi
Director (Marketing and Sales) Shuji Oishi
Wholetime Director Tsuneo Kobayashi

Services offered by Maruti Suzuki India Limited

Authorized Service Stations
Maruti is one of the companies in India which has unparalleled service network. To ensure the
vehicles sold by them are serviced properly Maruti had 1545 listed Authorized service stations
and 30 Express Service Stations on 30 highways across India.
Service is a major revenue generator of the company. Most of the service stations are managed
on franchise basis, where Maruti trains the local staff. Other automobile companies have not
been able to match this benchmark set by Maruti. The Express Service stations help many
stranded vehicles on the highways by sending across their repair man to the vehicle.

Maruti Insurance
Launched in 2002 Maruti provides vehicle insurance to its customers with the help of the
National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The
service was set up the company with the inception of two subsidiaries Maruti Insurance
Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited
This service started as a benefit or value addition to customers and was able to ramp up easily.
By December 2005 they were able to sell more than two million insurance policies since its
inception.

Maruti Finance
To promote its bottom line growth, Maruti launched Maruti Finance in January 2002. Prior to the
start of this service Maruti had started two joint ventures Citicorp Maruti and Maruti
Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing
loan. Maruti tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra,
Standard Chartered Bank, and Sundaram to start this venture including its strategic partners in
car finance. Again the company entered into a strategic partnership with SBI in March 2003
Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-
Maruti Finance is currently available in 166 cities across India.

Maruti True Value

Maruti True Value is a service offered by Maruti Udyog to its customers. It is a market place for
used Maruti Vehicles. One can buy, sell or exchange used Maruti vehicles with the help of this
service in India.

N2N Fleet Management

N2N is the short form of End to End Fleet Management and provides lease and fleet
management solution to corporates. Its impressive list of clients who have signed up of this
service include Gas Authority of India Ltd, DuPont, Reckitt Benckiser, Sona Steering,
Doordarshan, Singer India, National Stock Exchange and Transworld. This fleet management
service include end-to-end solutions across the vehicle's life, which includes Leasing,
Maintenance, Convenience services and Remarketing.

Accessories
Many of the auto component companies other than Maruti Udyog started to offer components
and accessories that were compatible. This caused a serious threat and loss of revenue to Maruti.
Maruti started a new initiative under the brand name Maruti Genuine Accessories to offer
accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat
covers and other car care products. These products are sold through dealer outlets and authorized
service stations throughout India.

Maruti Driving School

As part of its corporate social responsibility Maruti Udyog launched the Maruti Driving School
in Delhi. Later the services were extended to other cities of India as well. These schools are
modelled on international standards, where learners go through classroom and practical sessions.
Many international practices like road behaviour and attitudes are also taught in these schools.
Before driving actual vehicles participants are trained on simulators.

Exports
Maruti Suzuki has helped India emerge as the fourth largest exporter of automobiles in Asia.
Maruti Exports Limited is the subsidiary of Maruti Udyog Limited with its major focus on
exports and it does not operate in the domestic Indian market. The first commercial consignment
of 480 cars were sent to Hungary. By sending a consignment of 571 cars to the same country
Maruti crossed the benchmark of 300,000 cars. Since its inception export was one of the aspects
government was keen to encourage. Every political party expected Maruti to earn foreign
currency.

Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka, Uganda, Chile,
Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti Exports.

Key competitors
 Tata Motors
 Hyundai India
 Ford India
 FIAT India
 General Motors India
 Honda India
ACHIEVEMENTS
Aadhi motors was declared as the No. 1 dealer in India for 2006-2007 and 2007-2008.
They have sold 22,876 vehicles in 2006-2007 and 26,833vehicles in 2007-2008.they have
received the overall excellence award for the year 2006-2007 and 2007-2008. The infrastructure
and management expertise which Aadhi put behind their business has borne fruit – Maruti gave
two coveted awards to Aadhi –Thevera was adjudged the best model Workshop in India and
Aadhi was the second highest seller of Genuine Maruti spare parts in India . JD power
associates have rated Aadhi as No1. In South India for sales and customer satisfaction. The
above said company has adopted several identifiable defined set of short and long term
strategies and actions , which encouraged in improving the performance of organisation in
terms of sales in the light of stringent competition in the auto sector. It has adopted a power of
reviewing and revamping with that of the changing needs of the contemporary market.

The strategy used by Aadhi Motors Limited is purely service based competition . The
company is concentrated on the service to the customer at the reasonable rate .The company has
already formulated an action plan to the aggressive service strategy for the vehicles owned
by the customers of Aadhi.

GOALS OF THE AADHI

 To meet exact needs of the customers
 To provide best available customer service at the lowest rate.
 Customer oriented workforce to give the exact service they need .
 To maintain high rate of growth consistent with stability
 To achieve target.

STRUCTURE
Organisation are economic and social entities in which a number of persons
multifarious tasks in order to attain common goals .Organization design deals with structural
aspects of organisations; it aims at organized to achieve specific ends .The design process
what the Aadhi is having leads to development of an organisation structure consisting of units
and positions . There is relationships – involving exercise of authorities of hierarchy with well
defined tasks , responsibilities and accountability complied with well defined cut boundaries

STYLE.
The management of this company was adopted a participative style of management
for extracting and utilising the latest potential of its prospective employees.
The style adopted by the management in this organisations conductive and facilities
the creation, sustenance and upgradetion of the work life of the employees for encouraging the
simultaneous growth of the individual along with that of the organisation.

The company strongly believes that in sustaining the challenges posed by the ovative
solutions through wide variety of products and technical expertise. The company expects that
the customer loyalty will safety through innovative and quality leadership.

STAFF
It deals with the company‟s peoples resources and how they are developed, trained and
motivated . In other word the people in the organization and their socialization to the
organisational culture. The most important resources of an organization is its human resource
the people who supply the organisation with their work , talent creativity and drive.
Organization is not the factory, trade , transportations , money or other physical and financial
resources . The employee community in this organisation is striving to upgrade the corporate
culture by setting high level of business standards in almost all the business activities
undertaken by the company . The dedicated and deserving staff is one of the strengths of this
company.

The people in this organisation including the employees and the management have got
their distinct values and beliefs as guided and propelled by means of mission and policy
statement and the organisational behaviour which inherently formed a part and parcel of the
organization in establishing a repeated position for the organization in the market place and
has assisted .

SKILLS
This organization believes in the concept of “synergy” and is trying to blend the skills
of its employees by means of proportionate skills of its employees by means of proportionate
integration and ha s adopted effective training programmers to build the required level of
proficiency amongst its employee. The most important factor for growth of the firm is the
skills of the human resource. The success of the AADHI is generally depending on the
employee‟s skill. It got the excellent recruiting policy and training .Company is regularly
improving human resource to meet the global requirements and to have globally competitive
ability. Now it is one of the top dealers for the Maruti Suzuki range vehicles. Working with
Aadhi Motor Company Pvt Ltd , gives our peoples experience in a variety of Industries , in
addition to training in various disciplines . Our employees are expected to a code of conduct that
prescribes the highest ethical standards.

Sales and services

Aadhi Motor Company Pvt. Ltd. has 6 new car sales showrooms spread across India where
you can buy the Maruti car of your choice. Coimbatore, Chennai , Erode, Trichy, Chennai
The company will assist the customer from the time of choosing the car model, colour,
finding the best finance option that suits you. The company will constantly keep you updated
about your vehicle status until the delivery of the vehicle.

Aadhi Services Package:

The company is providing a comprehensive Service Package absolutely free for vehicles
purchased from Aadhi Motors with lot of benefit to the customer.

Maruti Extended Warranty

Maruti Extended Warranty has been specially devised to offer you extreme driving pleasure
during the ownership of the vehicle. This program is run by Maruti Suzuki India Limited
itself and hence it offers you the best protection against repairs. This policy commences at the
expiry of the primary warranty period and the duration will up to two years.

1.4 NEED & SCOPE OF THE STUDY

The study was carried out at AADHI Motors Pvt Ltd to analyze the financial performance
over the past 5 years. The study aims to analyze the profitability, liquidity, solvency position and
also the efficiency with which it converts the resources into sale. The study also finds out the
trend of the financial performance of the company in the period.

1.5 PERIOD OF STUDY

In this research study, the data collected from the respondents who are directly associated
with the problem have been analysed during the period from 2021 to June 2022.

1.6OBJECTIVES OF THE STUDY

 To assess the profitability and liquidity position of the firm
 To compare the performance of the firm for different time periods from 2018-2019 to
2021-2022.
 To identify the reason for changing profitability and financial position of the firm.
 To evaluate the cost and expenses incurred
 To study the optimum level of current assets and current liabilities of the company.

1.7 LIMITATIONS OF THE STUDY

 Data collection mainly depends on secondary sources.
 A detailed study was not possible because of time constraints.
 The reliability of analysis depends upon the accuracy of the data provided in financial
report.
 As the company may have trade secrets and busy schedule of senior official‟s, limits the
detailed information regarding the working pattern of the company.
 Ratio analysis is used to analyze data, so it has all the limitations of ratio analysis.
 Figures taken for the study are approximate, which provides different answers.