FSTlHATl0t 0F FltAtClAl STRFt6TH 0F

FSC0RTS.
Presented to:
Mr. 5uniI Buddhiraja,
Presentation lncharge
Presented by:
Narender Dagar,
Reg. No. 10904044
R51903A23
Oljcciivc Of TIc Siudy
To assess the long-term and short-
term financial soundness of the
company.
To make a comparison of Escorts
performance with its competitors.
To evaluate current performance of the company and
comparing it with its past performances
To find out various reasons which are
responsible for the differences in the
performance of Escorts and its
competitors.
3iroduciio3 io iIc Projcci
financial position of financial position of
the company on the the company on the
basis of ratio analysis. basis of ratio analysis.
financial position of financial position of
the company on the the company on the
basis of ratio analysis. basis of ratio analysis.
the financial position the financial position
of the company is of the company is
measured by making measured by making
comparison with its comparison with its
competitors competitors
the financial position the financial position
of the company is of the company is
measured by making measured by making
comparison with its comparison with its
competitors competitors
Two methods are adopted to
estimated the strength of
escorts
o3i....
3iroduciio3 io Escoris
n 1960, Escorts set up the
strategic Agri Machinery
Group (AMG) to venture
into tractors.
n 1960, Escorts set up the
strategic Agri Machinery
Group (AMG) to venture
into tractors.
n 1965, the company rolled
out its first batch of tractors
under the brand name of
Escort.
n 1965, the company rolled
out its first batch of tractors
under the brand name of
Escort.
n 1969, a separate
company Escorts Tractors
Ltd. was established
n 1969, a separate
company Escorts Tractors
Ltd. was established
1996, Escorts Tractors Ltd.
formally merged with the
parent company Escorts
Ltd.
1996, Escorts Tractors Ltd.
formally merged with the
parent company Escorts
Ltd.
Escorts AMG has three
recognized and well accepted
tractor brands
Scoc of iIc siudy
The ability of
the firm to meet
current
obligation
The ability of
the firm to meet
current
obligation
The extent to which
firm has used its
long term solvency
by borrowing funds.
The extent to which
firm has used its
long term solvency
by borrowing funds.
The efficiency to
which firm is utilizing
its assets in
generating sales
revenue.
The efficiency to
which firm is utilizing
its assets in
generating sales
revenue.
Firm utilizing the
overall operating
efficiency and
performance of the
firm.
Firm utilizing the
overall operating
efficiency and
performance of the
firm.
#cscarcI MciIodology
#esearch
Design
#esearch
Design
ExpIoratory
+
Descriptive
ExpIoratory
+
Descriptive
Methods of
Data coIIection
Methods of
Data coIIection
Primary Data Primary Data
Secondary
Data
Secondary
Data
observations
newspaper
JournaIs
websites
#cscarcI MciIodology co3i.
SampIe
Size
SampIe
Size
4 Companies 4 Companies
Presentation Presentation
Bar- diagram
Pie charts
Graphs
Bar- diagram
Pie charts
Graphs
#cvicw Of Eisii3g Liicraiurc
< $&#
ltt:// www.cscorts.com
BaIance
Sheet of
different
years
BaIance
Sheet of
different
years
InternaI data
of the
company
InternaI data
of the
company
AnnuI
#eports of
the escorts
AnnuI
#eports of
the escorts
#aiio A3alysis
WA 'ratio' is defined as the indicated quotient of two
mathematical expressions and as the relationship
between two or more things
W#atio analysis involves comparison for a useful
interpretation of the financial statements
Types of #atio:-
RATIO ANALYSIS OF ESCORTS
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Curent ratio 1.04 1.03 1.15 1.27 0.97 1.12 1.13
Quick ratio 0.75 0.83 0.89 0.97 0.7 0.84 0.85
sep'05 sep'06 sep'07 sep'08 sep'09 sep'10 sep'11
CU##ENT AND QUCK #AT:-
< Projected ratios for year 2010 and 2011 by using
nethod of 'Least 5quare'.
< Lquatlons tor regresslon llne or treno llne uslng tlme
serles:
< urrent ratio : Y = 1.09 + 0.011 X {ere X=3, 4 tor
2010 & 2011 respectlvely ln all cases)
< "uick ratio : Y = 0.83 + 0.004 X
0
2
4
6
8
10
12
14
creditors turnover
ratio
4.32 4.16 3.85 3.99 3.62 3.54 3.39
debtors turnover
ratio
5.89 7.46 6.18 4.07 5.09 4.24 3.74
sep'05 sep'06 sep'07 sep'08 sep'09 sep'10 sep'11
Debtor turnover ratio : Y = 5.74 0.5 X
Creditors turnover ratio : Y = 3.99 0.15 X
&##LNT #T|O:-
0
1
2
3
4
5
6
escorts ltd. 1.04 1.03 1.15 1.27 0.97
mahindrra & mahindra 1.51 1.48 1.48 1.23 1.02
HMT 5.29 4.77 5.1 3.59 3.65
VST Tillers 1.83 1.5 1.54 1.56 1.71
sep'05 sept'06 sept'07 sept'08 sept'09
COMPARATIVE ANALYSIS OF ESCORTS WITH
ITS COMPETITORS
OMPA#SON OF C#OSS P#OFT #ATOS OF
DFFE#ENT OMPANES WTH ESO#TS
-50%
0%
50%
100%
VST Tillers 10.21 11.17 13.74 11.54 15.34
HMT -4.73 0.56 -2.32 -29.21 -38.3
mahindrra &
mahindra
12.8 12.48 14.73 8.12 6.1
escorts ltd. -18.96 1.32 3.3 3.17 7.42
sep'05 sept'06 sept'07 sept'08 sept'09
OMPA#SON OF NET P#OFT #ATOS OF DFFE#ENT
OMPANES WTH ESO#TS
-60
-40
-20
0
20
escorts ltd. 3.08 1.08 -0.31 0.59 4.16
mahindrra &
mahindra
7.85 10.73 11.12 10.21 6.62
HMT 1.88 3.67 16.09 -18.41 -40.84
VST Tillers 4.42 5.72 7.65 7.55 10.41
sep'05 sept'06 sept'07 sept'08 sept'09
Limiiaiio3 of iIc siudy
Excessive carriage of Excessive carriage of
inventory over the inventory over the
normal levels normal levels
Excessive carriage of Excessive carriage of
inventory over the inventory over the
normal levels normal levels
Working capital Working capital
problems will arise problems will arise
when there is a slow when there is a slow
down in collection of down in collection of
debtors. debtors.
Working capital Working capital
problems will arise problems will arise
when there is a slow when there is a slow
down in collection of down in collection of
debtors. debtors.
Sometimes capital Sometimes capital
goods will be goods will be
purchased from the purchased from the
funds available for funds available for
working capital working capital
Sometimes capital Sometimes capital
goods will be goods will be
purchased from the purchased from the
funds available for funds available for
working capital working capital
Unplanned production Unplanned production
schedules will cause schedules will cause
excessive stocks excessive stocks
Unplanned production Unplanned production
schedules will cause schedules will cause
excessive stocks excessive stocks
Dependence in short
term sources of
finance
Dependence in short
term sources of
finance
#ccommc3daiio3s
Investments: Investments: The The
Company has invested Company has invested
in various fields which is in various fields which is
good as it has diversed good as it has diversed
its risk. its risk.
Investments: Investments: The The
Company has invested Company has invested
in various fields which is in various fields which is
good as it has diversed good as it has diversed
its risk. its risk.
Market share: Market share: The The
Company's main Company's main
motive should be to motive should be to
increase their market increase their market
share. share.
Market share: Market share: The The
Company's main Company's main
motive should be to motive should be to
increase their market increase their market
share. share.
CoIIection CoIIection
period: period: Escorts Escorts
should have to should have to
reduce its credit reduce its credit
period period
CoIIection CoIIection
period: period: Escorts Escorts
should have to should have to
reduce its credit reduce its credit
period period
>>Proper training: Proper training: The The
personnel must be given personnel must be given
training for proper use of training for proper use of
equipments and materials equipments and materials
so as to avoid damages so as to avoid damages
>>Proper training: Proper training: The The
personnel must be given personnel must be given
training for proper use of training for proper use of
equipments and materials equipments and materials
so as to avoid damages so as to avoid damages
>>Payment poIicies: Payment poIicies:
Payment policies Payment policies
followed by Escorts followed by Escorts
should be reviewed should be reviewed
time to time. time to time.
>>Payment poIicies: Payment poIicies:
Payment policies Payment policies
followed by Escorts followed by Escorts
should be reviewed should be reviewed
time to time. time to time.
ONLUSON
The company has improved its The company has improved its
performance very well as compared performance very well as compared
to its previous year's ratios to its previous year's ratios. .
The company has improved its The company has improved its
performance very well as compared performance very well as compared
to its previous year's ratios to its previous year's ratios. .
Escorts is still in backward position if compared it Escorts is still in backward position if compared it
with Mahindra & Mahindra and VST Tillers. with Mahindra & Mahindra and VST Tillers.
Escorts is still in backward position if compared it Escorts is still in backward position if compared it
with Mahindra & Mahindra and VST Tillers. with Mahindra & Mahindra and VST Tillers.
>>continuous improvement of Escorts is also giving them a continuous improvement of Escorts is also giving them a
tougher competition and will definitely acquire a better position tougher competition and will definitely acquire a better position
in the future. in the future.
>>continuous improvement of Escorts is also giving them a continuous improvement of Escorts is also giving them a
tougher competition and will definitely acquire a better position tougher competition and will definitely acquire a better position
in the future. in the future.
Time To Ask
Questions..!!!