SUMMER TRAINING PROJECT REPORT

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE AWARD OF DEGREE OF

Bachelor of Business Administration

2015-2016

Submitted to:

Submitted by:

Ms. Bharti Aggrawal

Lecturer, BBA Department

Krishan Kumar
BBA V Semester
Regn.no 13DAVCF1031

DAV CENTENARY COLLEGE

NH-3 FARIDABAD

ACKNOWLEDGEMENT
A project report has never been the sale product of the person whose name appears on the
cover. There are always some people whose guidance proves to be of immense help in
giving its final shape. So, it is my first duty to express my gratitude towards all of them.
Success in my endeavor calls for co-operation and the valuable for senior and colleagues.
First, of all I would like to convey my heart full gratitude to Mr. Munesh Gupta
(C.A. ,Finance) for giving me permission to work on a project in this organization. I am
also thankful to Mr. R.N.Katyal who has provided me supervision and guidance during
my project work. I cherish to record my thanks to management of ESCORTS
LIMITED.
I am also thankful to my project guide for helping me in preparation of this project
report.

PREFACE
The project was carried out during the tenure of summer training and my job was to
conduct a market research in to two states in which I was instructed to do and find out the
perception of the single cylinder tractor owners. The purpose of this training was to give
a comprehensive & innovation, managerial& practical introduction to marketing in an
entirely marketing atmosphere. This project report describes not only the single cylinder
market but also the strategies preferred by companies their market share and brand
awareness.
This project further deficits the company profile of escorts Ltd as well and in depth
picture of MPT,the revolutionary double cylinder tractor and which can be drag into this
niche single cylinder segment or escort Ltd. over the few years hundred of companies
have greatly improved their performance through superior marketing research .escort
MPT,JAWAN that is in fact a double cylinder tractors but equivalent in price in
comparison to single cylinder tractors and is used by the farmers as single cylinder tractor
and having excellent running power on road and in the cultivation.

INDEX

CHAPTER

TOPIC

CHAPTER 1

INTRODUCTION TO THE TOPIC

CHAPTER 2

COMPANY PROFILE

CHAPTER 3

REVIEW OF LITERATURE

CHAPTER 4

RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

SCOPE OF THE STUDY

RESEARCH DESIGN

a. DATA COLLECTION
b. DATA ANALYSIS

LIMITATIONS OF THE STUDY

CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

CHAPTER 6

CONCLUSIONS AND SUGGESTIONS

CHAPTER 7

BIBLIOGRAPHY

PAGE NO.

CHAPTER 1
INTRODUCTION OF THE TOPIC

Introduction

FROM

TO

The Indian Tractor Industry:

1945 to 1960.

War surplus tractors and bulldozers were imported for land reclamation and cultivation in
mid 1940's. In 1947 Central and State Tractor Organisations were set up to develop and
promote the supply and use of tractors in agriculture and till 1960, the demand was met
entirely through imports. There were 8,500 tractors in use in 1951, 20,000 in 1955 and
37,000 by 1960.
1961 to 1970.
Local production began in 1961 with five manufacturers producing a total of 880 units
per year. By 1965 this had increased to over 5000 units per year and the tractors in use
had risen to over 52000.
By 1970 annual production had exceeded 20000 units with over 146000 units working in
the country.
1971 to 1980.
Six new manufacturers were established during this period although three companies
(Kirloskar Tractors, Harsha Tractors and Pittie Tractors) did not survive. Escorts Ltd
began local manufacturing of Ford tractors in 1971 in collaboration with Ford, UK and
total production climbed steadily to 33000 in 1975 reaching 71000 by 1980. Credit
facilities for farmers continued to improve and the tractor market expanded rapidly with
the total in use passing the half million mark by 1980.

1981 to 1990.
A further five manufacturers began production during this period but only one of these
survived in the increasingly competitive market place. Annual production exceeded

75000 units by 1985 and reached 140000 in 1990 when the total in use was about 1.2
million. Then India - a net importer up to the mid-seventies - became an exporter in the
80's mainly to countries in Africa.
1991 to 1997.
From 1992 it was not necessary to obtain an industrial licence for tractor manufacturing
in India. By 1997 annual production exceeded 255000 units and the national tractor park
had passed the two million mark. India had now emerged as one of the world leaders in
wheeled tractor production.
1997 to 1999.
Five new manufacturers had started production since 1997. In 1998 Bajaj Tempo, already
well established in the motor industry, began tractor production in Pune. In April of the
same year New Holland Tractor (India) Ltd launched production of 70 hp tractors with
matching equipment.

The Industry today

Tractor manufacturing is now firmly established in India and is highly competitive with
rapid advancements being made in technical design and quality with increasing attention
to export markets. Of the 16 companies that began operations before 1990s, eight are
considered major manufacturers (Eicher, Escorts Ltd, Sonalika, Mahindra and Mahindra,
John Deere, Swaraj, VST, and TAFE).

Market share in 2007-08 in %

Escorts

12.80

Mahindra n Mahindra

28.40

Eicher

7.30

Tafe

15.10

HMT

1.20

Sonalika
John Deere

8.4
8.1

Ptl

9.20

Nhi

6.50

Others

1.30

ABOUT ESCORTS
The Escorts Group is amongst India's leading engineering conglomerates operating in the
high growth sectors of agri-machinery, construction & material handling equipment,
railway equipment and auto components.
Having pioneered the farm mechanization in the country, Escorts has played a pivotal
role in the agricultural growth of India for over five decades. One of the leading tractor
manufacturers of the country, Escorts offers a comprehensive range of tractors, more than
45 variants starting from 25 to 80 HP. Escorts Farmtrac and Powertrac are the widely
accepted and preferred brands of tractors.
A leading material handling and construction equipment manufacturer, Escorts
manufactures and markets a diverse range of equipment like cranes, loaders, vibratory
rollers and forklifts. Escorts today is the world's largest Pick 'n' Carry Hydraulic Mobile
Crane manufacturer.

Escorts Group

Agri
Machinery
Escorts
Communicatio
ns
Construction
Equipments
Railway
Equipments

Escorts has been a major player in the railway equipment business in India for nearly five
decades. There product offering includes brakes, couplers, shock absorbers, and rail
fastening systems, composite brake blocks and vulcanized rubber parts.
In the auto components segment, Escorts is a leading manufacturer of auto suspension
products including shock absorbers and telescopic front forks. Over the years, with
continuous development and improvement in manufacturing technology and design, new
reliable products have been introduced. The Escort Group has also been operating in the
ITES and financial services sectors.
Technological and business collaboration with world leaders over the years, globally
competitive indigenous engineering capabilities, over 1600 sales and service outlets and
footprints in over 40 countries have been instrumental in making Escorts the Indian
multinational. Today, when the world is looking at India as an outsourcing destination,
Escorts is rightly placed to be the dependable outsourcing partner of world's leading
engineering corporations looking at outsourcing manufacture of engines, transmissions,
gears, hydraulics, implements and attachments to tractors, and shock absorbers for heavy
trailers and armored tanks.
In today's Global Market Place, Escorts is fast on the path of an internal transformation,
which will help it to be a key driver of manufacturing excellence in the global arena.

THE FOUNDING PHILOSOPHY

Around six decades back two young men were out on a journey together armed with little
beyond intelligence, business acumen and determination and dreams aplenty. They
believed that India could only achieve total freedom with a breakthrough in the field of
agriculture and mechanization would have to rule the fields. Their youthful enthusiasm
had kindled the hope that one day they would make a mark of their own. They were in
fact writing the first chapter of what has come to be widely recognized as one of the
greatest success stories in Indian industry.
Escorts came into being with a vision. A vision that eschewed easy paths to profitability,
and sought instead for ways to make a contribution. A vision that led two young brothers,
Yudi and Hari Nanda, to branch out of their family's prospering transport business and
institute ventures that were to become the foundations of Escorts Limited. On 17th
October 1944, Escorts Agents Limited was born at Lahore (now in Pakistan) with Mr.
Yudi Nanda as Managing Director and Mr. Hari Nanda as Chairman. It was a trend
setting marketing house driven by the same business philosophy, which had given their
family enterprise an unrivalled reputation: customer concern.
Not long afterwards, the driving ambition to go beyond the expected led Hari Nanda to
the first of his many successful business insights - the discovery of the great business
potential that lay in India's villages. This led to the launch, in 1948, of Escorts
(Agriculture and Machines) Ltd., with Yudi Nanda as Director. Though separate business
entities then, both companies had two great strengths in common: the dynamic Nanda
brothers and the

unifying force of the name they gave their companies; Escorts, literally 'escorting' their
products and services to the customer while most other businessmen were just selling.

Tragically, Mr. Yudi Nanda died in an accident in 1952 - but his spirit remained
embedded in the foundations of the company. Mr. H P Nanda then took on the mantle to
realize the dreams, which he had always seen with his brother.
Escorts (Agents) Ltd., and Escorts (Agriculture and Machines) Ltd. merged in 1953 to
create a single entity -Escorts Agents Pvt Ltd. Having initially started with a franchise for
Westinghouse domestic appliances, by this time the Company had already expanded its
marketing and service operations, representing internationally known German and
American organizations such as MAN, AEG, Haniel & Leug, Knorr Bremse, MIAG and
BMA for sophisticated electrical and mechanical engineering equipment and Minneapolis
Moline and Wisconsin for agricultural tractors, implements and engines. Escorts made a

major thrust into the agricultural arena by taking on the marketing and service franchise
for Massey Ferguson tractors in Northern India, which soon comprised 75% of MF's allIndia sales - a signal tribute to Escorts' inherent strengths. Its first industrial venture came
up in 1954, in partnership with Goetzewerke of Germany for the manufacture of piston
rings and cylinder liners - followed by production of pistons in collaboration with
MAHLE of Germany, in 1960. The company's incorporation in its present name, Escorts
Limited, was effected on 18th January, 1960.
Escorts' next major industrial activity was the assembly of tractors in 1961 in technical
cooperation with URSUS of Poland. Subsequently this led to the manufacture of the
country's first indigenous tractors under Escorts' own brand name, which were to play a
pivotal role in the Green Revolution. This went on to lay the foundations that even today
are the Company's core strengths -relevant, world-standard technology through strategic
international alliances; a broad based marketing and service network yet unrivalled;
powerful symbiotic relationships with suppliers and dealers and above all, the crusade to
make a difference.

Beyond the growth of the organization, these principles have ensured that Mr. H. P.
Nanda's contribution to the cause of industry and the consumer will endure. He pioneered
the revolutionary concept of 'interdependence' between ancillary and large industries,
institutionalizing vendor development and in the process building Faridabad and the
entire belt of townships in the region. He introduced the discipline of service going
before marketing, reassuring the customer that Escorts would stay with them, that they
were here for the long run. He built lasting alliances with an array of the world's most
respected names in tractors, industrial equipment, two-wheelers, construction equipment
and telecommunications. Going further, he created institutions devoted to value
engineering and training, not only as investments in the company's future but also as
catalysts for the enhancement of Indian industry as a whole: The Escorts R&D Centre
and The Escorts Institute of Farm Mechanization. His concern extended to the society in
which he worked, and he manifested it by establishing the Escorts Medical Center at

Faridabad, Escorts Heart Institute and Research Centre at New Delhi, as well as
numerous village development programmes. And above all, he imbued the corporation
with his own pioneering, entrepreneurial spirit, instilling both a conscience.

Board of Directors of Escorts Limited

CHAIRMAN & MANAGING DIRECTOR

MR. RAJAN NANDA

JOINT MANAGING DIRECTOR

MR. NIKHIL NANDA

DIRECTORS

DR. M.G.K. MENON

DR. S.A. DAVE
DR. P.S. PRITAM
DR. S.C. BHARGAVA

VICE PRESIDENT LAW & COMPANY SECRETARY

MR. G. B. MATHUR

EXEC. VICE PRESIDENT & GROUP

FINANCE CHIEF OFFICER

MR. R.K. BUDHIRAJA

LOGORATIONALE
The hexagonal nut (in red) represents a geometric perfection. The nut has been a
functional device that has stayed at the core of mankinds engineering adventures. In spite
of modern technologies coming in, it still remains unarguably a symbol of technology
and all that holds it together. Locked into the nut is a spanner (in white), the turning force
for the symbol of technology. The two pictorial elements are configured together to form
an 'E', a pneumonic for Escorts.
A doctrine of corporate and engineering openness, the Escorts logo allows an aisle, a
pathway through which new ideas can walk in any time freely, giving Escorts the
character to listen and absorb new and fresh thoughts.
The symbol with its three meanings makes a rebus or visual pun and is rendered in red,
the color of energy and dynamism. Every time it is used, it represents the Escorts seal of
quality and excellence.

ABOUT AGRI MACHINERY GROUP

Background
In 1960, Escorts set up the strategic Agri Machinery Group (AMG) to venture into
Tractors.
In 1965, they rolled out their first batch of tractors under the brand name of escort.
In 1969 a separate company, Escorts Tractors Ltd., was established with equity
participation of Ford Motor Co., Basildon, UK for the manufacture of Ford agricultural
Tractors in India.
In the year 1996 Escorts Tractors Ltd. formally merged with the parent company, Escorts
ltd.
Since inception, we have manufactured over 1 million tractors.
Technologies
Escorts AMG has three recognized and well-accepted tractor brands, which are on
distinct and separate technology platforms.
Farmtrac: World Class Premium tractors, with single reduction and epicyclic reduction
transmissions from 34 to 75 HP.
Powertrac: Utility and Value-for-money tractors, offering straight-axle and hubreduction tractors from 34 to 55 HP. Indias No.1 economy range engineered to give
spectacular diesel economy.
Escort: Economy tractors having hub-reduction transmission and twin-cylinder engines
from 27 to 35 HP. Pioneering brand of tractors introduced by Escorts with unbeatable
advantages.

International Subsidiaries
Escorts AMG has two international subsidiaries
Farmtrac North America LLC in the U.S.A
Farmtrac Tractors Europe Sp.z o.o.in Poland
They now cater to 41 countries

AGRI MACHINERYS FUNCTIONAL DEPARTMENT

DETAILS OF ESCORTS TRACTORS

Farmtrac 30 Hero [26-30 HP Category]

Escort Series

Escorts 325 Josh [25-30 HP Category]

Escorts Jawan MPT [25-30 HP Category]

Escorts 335 Josh [31-40 HP Category]

Farmtrac Series

Farmtrac 35 Champion [31-40 HP Category]

Farmtrac 45 [40-45 HP Category]

Farmtrac 50 [45-55 HP Category]
Farmtrac 60 [50-60 HP Category]

Farmtrac 70 [60-70 HP Category]

Farmtrac 80 [71-80 HP Category]

PRODUCT KNOWLEDGE
Segmentation of Tractors

The Indian tractor industry, in line with the tractor industry worldwide, is segmented on
the bases of the power delivered by the engine. i.e., horsepower (HP). However the
average tractor size in India is 35hp, while it is much higher in developed countries.
While in the international market, the tractors with an engine power of less then 50 hp are
classified as small tractors, those with less than 30 hp are classified as small tractors but,
in India, 31-40 hp as medium range tractors and those over 40 hp as large tractors.

Tractor: Segment-Wise Break-Up On The Basis Of HP

TRACTORS

Small Tractors

<30 hp

Medium Tractors

31-40 hp

Large Tractors

>40 hp

Small tractors
The 21-30 hp small tractors account for 20 % of the total demand. These tractors are
suitable for soft soil condition of northern states such as Punjab haryana and western part
of Uttarpradesh.
Medium range tractors
The medium range segments comprising 31-40 hp tractors for around 50 % of the total
tractor sales. These tractors are best suited for the Indian soil condition and haulage
requirements.
Large tractors
The rich farmers with large land holdings, especially in Punjab and Haryana, prefer the
above 40 hp tractors. Most of the replacement demand is from these segments, as the
farmers upgrade to high- powered tractors.

Performance at a glance
(AMG GROUP)

Financial performance

Profit Before Tax (in crores)

PBT

Profit after tax (in crores)

2005-06

2006-07

34.44

-17.33

2007-08
26.14

PAT

2005-06

2006-07

2007-08

19

-6.44

11.87

SALES ANALYSIS

YEAR
2006-2007
2007-2008

DOMESTIC
47767
53000

EXPORT
5225
6450

TOTAL
52992
59450

Ratio analysis
A ratio is defined as the indicated quotient of two mathematical expressions and as the
relationship between two or more things. In Financial analysis, a ratio is used as
benchmark for evaluating the financial position and performance of a firm. Ratios help to
summarize large quantities of financial data and to make qualitative judgment about the
firms financial performance.
Ratio analysis involves comparison for a useful interpretation of the financial statements.
Single ratio in itself does not indicate favorable or unfavorable condition. Therefore in
this report it is compared with:
Past ratios, i.e. ratios calculated from the past financial statements of the same
company.
Competitors ratios, i.e. Ratio of the major competitor at the same point in time.
Projected ratios, i.e., ratios developed using the projected, Performa, financial
statements of the same firm.

Since liquidity ratios and Activity ratios help to measure the firms ability to meet current
obligations and firms efficiency in utilizing its assets respectively, these two have been
used.

OBJECTIVE OF RATIO ANALYSIS

It is helpful in analysis of financial statement.

It helps in simplification of accounting data.

Helpful in comparative studies.

It helps in locating weak spots of the business.

Helpful in forecasting.

Estimate about trends in business

To have effective control.

To study about the financial soundness.

Helps in fixation of ideal standards.

NOTE: As, separate financial reports are not maintained for AMG, figures have been
taken from the balance sheet of Escorts

TYPES OF RATIO:There is four types of ratio which is used for calculating the firm financial position

RATIO
ANALYSIS

LIQUIDITY

ACTIVITY
RATIO

RATIO

Limitations of Ratio analysis

PROFITABILITY
RATIO

LEVERAGE
RATIO

 It is difficult to decide on the proper basis of comparison.

The comparison is rendered difficult because of differences in situations of two
companies or of one company over years.
Price level changes make the interpretation of ratios invalid.
The differences in the definition of items in the balance sheet and profit and loss
account make the interpretation of ratios difficult.
The results are based on highly summarized information. Consequently, situations
that require control might not be apparent or situations that do not want
significant efforts might be unnecessarily highlighted.

Liquidity Ratios
Liquidity ratios measure the ability of the firm to meet its current obligations. It is
necessary to strike a proper balance between high liquidity and lack of liquidity. A high
degree of liquidity means that a firms fund will be unnecessarily tied up in current assets.
Whereas lack of liquidity, implies failure of a company to meet its obligations due to lack
of sufficient liquidity.
The ratios, which are used for the analysis of Escorts liquidity position in this report, are:
Current Ratio
Quick Ratio

CURRENT RATIO

LIQUIDITY
RATIOS

Quick Ratio

Current ratio
Current ratio is calculated by dividing current assets by current liabilities:
Current ratio = Current Assets
Current Liabilities

Current Ratio

2005-06

2006-07

2007-2008

1.13

1.30

1.29

Significance:- As a conventional rule a current ratio of 2 to 1 or more is considered

satisfactory because in a worse situation, even if the value of current assets become half,

the firm will be able to meet its obligation. Current ratio refers to the margin of safety for
creditors therefore higher the current ratio, the greater the margin of safety.
Comment:-From the above table it can be interpreted that Escorts liquidity position is
more or less constant .Escorts current ratio has increased from 1.13 in 2005-06 to 1.30%
in 2006-07 but has decreased from 1.30% in 2006-07 to 1.29% in 2007-08.
Quick Ratio
Quick ratio establishes a relationship between quick or liquid assets and current
liabilities. An asset is liquid if it can be converted into cash immediately or reasonably
soon without a loss of value. Inventories are considered to be less liquid therefore for
calculating quick ratio they are deducted from current assets.
Quick Ratio = Current Assets Inventory
Current Liabilities

Quick ratio

2005-06

2006-07

0.81

1.04

2007-08

0.98

Significance: Generally, the quick ratio of 1:1 is considered to be satisfactory. Quick

ratio thus more rigorous test of liquidity than the current ratio and, when used together
with current ratio, it gives a better picture of short term financial position of the firm.

Comment:-Escorts quick ratio in the current year has decreased in comparison to

previous year. Although quick ratio is more penetrating test of liquidity than current ratio,
yet it should be used cautiously as all debtors may not be liquid and cash may be
immediately needed to pay operating expenses.

Activity Ratios

Activity Ratios are used to evaluate the efficiency with which the firm manages and
utilizes its assets. These ratios are also called turnover ratios as they indicate the speed
with which the firm manages and utilizes its assets.
Activity ratios, which are used to analyze Escorts effectiveness in Asset utilization, are:
Inventory Turnover
Debtor Turnover
Net Assets Turnover
Current Asset Turnover
Creditor Turnover

INVENTOTY TURNOVER
DEBTOR TURNOVER

ACTIVITY
RATIOS

NET ASSEST TURNOVER

CURRENT ASSEST TURNOVER
CREDITOR TURNOVER

Inventory Turnover
It indicates the efficiency of the firm in producing and selling its product. It is calculated
by dividing Sales by average inventory. In a manufacturing company inventory of
finished goods is used to calculate inventory turnover.
Inventory Turnover =

Sales
Average Inventory

Inventory turnover

2005-06

2006-07

2007-08

10.15

13.10

9.87

Significance:This ratio indicates whether or not the stock has been efficiently utilised. It shows the
speed with which the stock is rotated into sales. The higher the ratio, the better it is, since
it indicates that the stock is selling quickly. In business where stock turnover is high
goods can be sold at low margin of profit and even then the profitability can be high.
Comments:
Escorts Inventory turnover ratio of the company is good it means that there is proper
outflow of the stock and goods do not remain in the go down for a long time

Debtors Turnover Ratio

Debtors turnover indicates the number of times debtors turnover each year. Higher the
value of Debtors turnover, the more efficient is the management of credit. The liquidity
position of the firm depends on the quality of the debtors to a great extent. Two ratios
being used in the report to analyze liquidity of debtors are:
Debtors Turnover
Collection Period

Debtors Turnover = Net credit sales

Average debtor

Debtors turnover

2005-06

2006-07

2007-08

0.26

0.31

0.16

2005-06

2006-07

2007-08

49.00

65.50

Collection Period = Debtors x no of days

Gross Sales

Collection period

77.13

NOTE: For calculating the collection period, the number of days have been taken
as 365 instead of 300.

Significance: This ratio indicates the speed with which the amount is collected from
debtors. The higher the ratio, the better it is, since it indicates that amount from debtors is
being collected more quickly. The less the risk from bad debt, and so the lower the
expenses of collection and increase in the liquidity of the firm
Comment: The debtors turnover ratio for the year 2007-08 is .16 and is lower than 200607. Likewise the collection period has also increased which is not a good indication.
The shorter the average collection period, the better the quality of debtors, since a short
collection period implies prompt payments by debtors. Although Escorts has a zero debt
credit policy but through channel finance facility by means of hundi it is giving credit up
to 90 days, comparing this with the average collection period, its collection and credit
efficiency appears to be satisfactory.
A too low collection period is also not necessarily favorable as it may indicate a very
restrictive collection and credit policy. Because of the fear of bad debt loses the firm may
be selling to those only whose financial conditions are undoubtedly sound and who are
very prompt in making the payment. Such a policy succeeds in avoiding the bad debt
loses, but it curtails sales so severely that overall profits are reduced.

Net Assets Turnover Ratio

A firms ability to produce a large volume of sales for a given amount of net assets is the
most important aspect of its operating performance. Unutilized or underutilized assets
increase the firms need for costly financing as well as expenses for maintenance and
upkeep. Net assets turnover is calculated by dividing sales by net assets.
Net assets turnover =

Sales
Net Assets

NAT

2005-06

2006-07

2007-08

1.12

1.34

1.22

Significance: This ratio is of particular importance in manufacturing concerns where the

investment in assets is quite high. This ratio reveals how effectively the assets are being
utilised, compared with previous year.
Comment:- Escorts net assets turnover has increased in 2006-07 but in 2007-08 it show
decrease in compare to previous year. The net assets turnover of 1.22 implies that it is
producing Rs. 1.22 sales for one rupee of capital employed.

It should be interpreted cautiously because the denominator of the ratio includes fixed
assets net of depreciation. Thus old assets with lower book value may create a misleading
impression of high turnover without any improvement in sales.
Current Assets and net working capital turnover ratio
This ratio shows the efficiency with which the firm is utilizing its current assets.

Current Assets Turnover =

Sales
Current Assets

Current assets turnover ratio

2005-06

2006-07

2007-08

2.57

2.62

2.35

Note :- Lone and advances are not taking when we calculate current assets
Net working capital turnover ratio = Sales / Net Working Capital

Net working capital turnover ratio

2005-06

2006-07

2007-2008

13.00

11.19

10.51

Comment:-Interpreting the reciprocals of these ratios Escorts need Rs 0.095 investments

in current assets for generating a sale of one rupee.
In case of working capital turnover Escorts has significantly improved. It needs Rs 0.095
of net current assets for generating sale of one rupee which has increase from Rs 0.089 in
2006-07.
Creditors turnover ratio

Creditors turnover = Net credit purchase

Average Creditors

C.T

2005-06

2006-07

0.37

0.52

2007-08
0.46

COMMENT: Escort credit turnover ratio is in increase in 2006-07 as compare to

previous year which is good for the company . Because in this year the time period
of payment is greater but the ratio is going to decrease in 2007-08 as compare to
previous year.

Profitability Ratio
A company should earn profits to survive and grow over a long period of time. Profit is
the measurement of the efficiency of the business.
Generally there are two types of profitability ratios calculated:

Profitability in relation to sales.

Profitability in relation to investment.

Profitability ratios, which are used to analyze Escorts profitability, are:

Gross Profit Ratio
Net Profit Ratio
Operating profit Ratio
Return On Equity
Rate of Return

GROSS PROFIT RATIO

PROFITABILITY
RATIO

NET PROFIT RATIO

OPERATING PROFIT RATIO
RETURN ON EQUITY
RATE OF RETURN

GROSS PROFIT RATIO:

Gross margin, Gross profit margin or Gross Profit Rate can be defined as the amount of
contribution to the business enterprise, after paying for direct-fixed and direct-variable
unit costs, required to cover overheads (fixed commitments) and provide a buffer for
unknown items. It expresses the relationship between gross profit and sales revenue.
The ratio shows the relationship between gross profit and sales.

Gross Profit
Gross Profit Ratio =

* 100
Net Sales

Net Sales = Sales Sales Return

GPR

2005-06

2006-07

2007-08

14

12.86

15.70

Significance: This ratio measures the margin of profit available in on sales. No ideal
standard is fixed for this ratio, but it should be adequate enough to meet not only
operating expenses but also to provide for depreciation, interest on loans, dividends and
creation of reserve.
Comment:- As the figure constitute that the Gross profit of the company is continuously
increases which is very significant result but still company have to find out new way to
increase there profit

Net Profit Ratio:

Profit margin, net margin, net profit margin or net profit ratio all refer to a measure of
profitability. It is calculated by finding the net profit as a percentage of the revenue.
Net Profit
(a) Net Profit Ratio =

* 100
Net Sales

NPR

2005-06
1.08

2006-07
-0.31

2007-08
0.60

Significance:- The profit margin is mostly used for internal comparison. It is difficult to
accurately compare the net profit ratio for different entities. A low profit margin indicates
a low margin of safety: higher risk that a decline in sales will erase profits and result in a
net loss.
Comment:-Escorts net profit is negative in 2006-07 but in 2007-08 it is .60.The ratio in
the current year is quite significance

OPERATING PROFIT RATIO:

In business, operating margin, operating income margin, operating profit margin or return
on sales (ROS) is the ratio of operating income divided by net sales, usually presented in
percent
Operating Net Profit
Operating Profit Ratio =

*100
Net Sales

Operating net profit = net profit+ non operating expenses-non operating income

OPR

2005-06
3.51

2006-07
0.007

2007-08
1.57

RETURN ON EQUITY (ROE):

Equity shareholders of a company are more interested in knowing the earning capacity of
their funds in the business. As such, this ratio measures the profitability of the funds
belonging to the equity shareholders. Since the profit available to equity shareholders will
be the profit left after payment of interest, taxes and dividend on preference share capital.
Net profit after interest, tax an Preference dividend
Return on Equity Shareholders Funds
=

*100
Equity Shareholders Fund

For e.g.: Net worth =1crore

Loan @10%=30 lacks
Tax rate =30%
Share =1 lacks
Profit =10 lacks (before interest and tax)

Profit after interest but before tax =10 lacks- 3 lacks=7 lacks
Profit after tax =7lacks- 2.10lacks=4.9lacks
Return on equity = 4.9-2=2.9 lacks

Equity Shareholders Funds = Equity Share Capital + All Reserves + P/L a/c balance fictitious assets - debit balance of the P/L a/c

ROESFR

2005-06
1.87

2006-07
-0.58

2007-08
0.99

Significance: This ratio measures how efficiently the equity shareholders funds are
being used in the business. It is true measure of the efficiency of the management since it
shows what the earning capacity of the equity shareholders funds. The higher the ratio,
the better it is, because in such a case equity shareholders may be given a higher
dividend..
Comment:-Escorts Equity shareholder fund is increase in current year in compare to
previous year so it is good because the earning of share holder is increase . But the graph
is fluctuating; this shows that the shareholders are not getting constant return on their
investments. So company have to stable there Equity shareholder fund ratio

Rate of return:
In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit
or sometimes just return, is the ratio of money gained or lost (whether realized or
unrealized) on an investment relative to the amount of money invested. The amount of
money gained or lost may be referred to as interest, profit/loss, gain/loss, or net
income/loss. The money invested may be referred to as the asset, capital, principal, or the
cost basis of the investment. ROI is usually expressed as a percentage rather than a
fraction

Profit before tax, interest and dividends on investment

= *100

Net Worth

Profit before interest, tax and dividend = Profit after interest but before tax + interest paid
- interest income

ROR

2005-06
11.72

2006-07
4.61

2007-08
6.82

Significance: This ratio helps in taking decisions regarding capital investment in the new
projects. The new projects will be commenced only if the rate of return on capital
employed/ net worth in such projects is expected to be more than the rate of borrowings.
Comment: The rate of return of Escorts is increase current year in compare to previous
year which is significance.

LEVERAGE RATIOS

Long term creditors like the debentures holders; financial institutions etc. are interested in
the firms long-term financial strength. These ratios are calculated to assess the ability of
the firm to meet its long-term liability as and when they become due.
To judge the financial position of the firm, financial leverage, or capital structure ratio
are calculated. These ratios indicate mix of funds provided by owners and lenders.
Leverage ratio for find the long term liability of Escorts are:
Debt Equity Ratio
Debt to total fund ratio
Proprietary ratio

DEBT EUITY
RATIO

LEVERAGE
RATIO

DEBT TO TOTAL
FUND RATIO
PROPRIETARY
RATIO

DEBT-EQUITY RATIO:
Several debt ratios may be used to analyse the long term solvency of the firm. The firm
may be interested in knowing the portion of the interest-bearing debt (also called funding
debt) in the capital structure. It indicates the proportion of funds which are acquired by
long term borrowing in comparison to shareholders funds.
Debt
Debt Equity Ratio =

Long Term Loan

OR

Equity

Shareholders Funds

Long-term Loans: - Debentures + Mortgage Loans + Bank Loan+ Loan from Financial
Institutions and Public Deposits.
Shareholders Funds: - Equity Share Capital + Preference Share Capital + Share Premium
+ General Reserves + Capital Reserves + Credit Balance of Profit and Loss Accounts and
Accumulated Losses and Fictitious Assets are deducted.
Year
Debt Equity Ratio

2005-06
0.60

2006-07
0.42

2007-08
0.39

Significance: The normally accepted debt equity ratio is 2:1. If this ratio is higher than
2:1, it means that long term borrowing is more than twice in comparison to funds to
provide by owners and it will indicate a risky financial position.
Comment:-As we can see that the firm debt-equity ratio is continuously decrease so we
can say that the firm financial position is good to ay its long term debt

DEBT TO TOTAL FUNDS RATIO

This ratio expresses the relationship between long term debt and shareholders fund. It
indicates the proportion of funds which are acquired by long term borrowings in
comparison to shareholders funds. This ratio is calculated to assess the ability of the firm
to meet its long term liabilities
Debt

Long term loans

Or

Debt to total funds Ratio =

Debt + Equity

Long term loans + Shareholders Fund

Long Term Loans = Debentures + Mortgage Loans + Bank Loans + Loan from
Financial Institutions + Public Deposits.
Shareholders fund = Equity Share Capital + Preference Share Capital + Share Premium
+ General Reserve + Capital Reserve + Other Reserves + Credit Balance of P/L account Accumulated Losses -Fictitious Assets - Debit balance of P/L account.
FOR E.G.= long term loan= 1 lack
Share holder fund=2 lack
Debt Equity ratio= .33
Or

Long term loan = 2 lack

Share holder fund = 1 lack
Debt equity ratio= .666
Year
Debt

To

Total

2005-06

2006-07

2007-08

0.65

0.74

0.76

Fund Ratio

Significance: - Debt to total funds ratios of 0.67:1 (or 67%) is considered satisfactory. A
higher ratio than this is generally considered as the indicator of risk. Because it means
that the firm depends too much on outsides loans for the existence. Any withdrawal of
funds by the lenders will put the company in difficulties.
Comment: Debt-Equity ratio of Escorts is going to increase which is not satisfactory.
From the above example we can say that the debt equity ratio is less than in compare to
previous year .this graph shows that the long term loan is greater than the share holder
fund which is not good for the company.

PROPRIETORY RATIO:
This ratio indicates the proportion of total funds provided by owners or shareholders.
Equity

Shareholders Funds

Proprietary Ratio =

or
Debt + Equity

Year
Proprietary Ratio

Shareholders Funds + Long-Term loans

2005-06

2006-07

2007-08

0.40

0.42

0.29

Significance: - The ratio should be 33% or more that that. A higher proprietary ratio is
generally treated as an indicator of sound financial position from long term point of view.
Because it means that firm is less dependent on external sources of finance. On the other

hand lower the ratio, the less secured are the long term loans and the face the risk of
losing their money.

Objectives, Scope & limitations of the study

OBJECTIVES

The objective of the project is to find out the perception of the single cylinder
tractor.
To known about the problems faced by the customers.
Is FARMTECH which is a double cylinder tractor is able to compete with the
single cylinder tractors.

SCOPE
The scope of this project is very important, as the company must know about the
customers perception, what are the implementations of a single cylinder tractor
according to the tractor owners. And what are the demand drivers and the factors which
are really influencing a buyers decision at the time of buying a single cylinder tractor.

RATINALE

The rationale behind working on this project is on interest to work in the field of market
research and to knowing the important process of launching the new product in the
market; improves my knowledge base as well as groom my skills. I have come to know
that knowing the Perception is a significant aspect of the new product development .

Research Methodology
1. OBJECTIVE OF THE RESEARCH

How the consumers perceive the brand Reebok vis--vis competitors.

Do the comparative analysis of Reebok

with competitive brands on

certain attributes.

To know the similarities and dissimilarities between the various brands

under consideration.

To make a multi-dimensional perceptual map for the brands under

consideration.

To

gauge

the

store

image

of

Reebok

vis-a-vis

competitors.

To know the effectiveness of Reebok advertising

2. LITERATURE SURVEY
An extensive literature survey is done to gather.

Information related to the brand through brochures, visiting the manufacturing

unit at Naurangpur.

Information on brand position

Information regarding various tools to be used to measure attitudes & analyse the
collected data

Information about our competitors\

RESEARCH DESIGN
Due care is taken to ensure minimum bias & maximum reliability.
Research
Research is a scientific and systematic study for pertinent information on a specific topic.
Research in common parlance refers to search for knowledge It is the pursuit of truth
with the help of study, observation, comparison and experiment. In short, search for
knowledge through objective and systematic method of finding solution of the problem is
research.
Research Methods
Research methods may be understood as all those methods/ techniques that are used for
conduction of research.

Research Methodology
Research Methodology is not only the application of the research methods but also the
comparison of the logic behind the methods that is being used in this context of research
study and explain why particulars methods or techniques are used and why others are not
being used. Research methodology is a way to systematically solve the research problem.
In this various steps that are generally adopted by a researcher in studying his research
problem along with the logic behind them are studied in order to have a clear view of the
study.

The present study is based upon the Descriptive cum Exploratory method of research to
investigate procedures at micro level. As the study is analyzing & probing in nature, thus,
it is almost entirely based on the primary data generated through questionnaires and
observations. To support further secondary data was also collectd from organizational
records & documents, company reports and books.

This chapter has been divided into five sections as follows :

Research Design

Collection of data

Universe and survey population

Sample

Analysis pattern

Research Design

Collection of Data

Universe and Survay

Population

Sample

Analysis Pattern

Research Design

A research design is the arrangement of condition for collection and analysis of data in
manner that aims to combine relevance to the research purpose with economy in
procedure. In fact, the research design is the conceptual structure within which research
is conducted . It constitutes the blueprint for the collection, measurement and analysis of
the data. Universe & survey population, sampling, analysis pattern all are the different
parts of this structure.
The present study is Descriptive as well as Exploratory study because the project is
based on the information collected from the study of dealers perception for the products
of the firm, which is further utilized for the analysis of the data. Then the comprehensive
analysis is done and efforts are being made to explore the new insights into the problem,
so that suggestions for the further improvement of the system can be suggested.

Data Collection:
Data collection is the most critical part of any Research Project. This is the process of
identifying the suitable and relevant sources of data and than collecting the data from
various selected sources, so that the collected data can be utilized for the further progress
of the study, because collected data is analyzed and interpreted in order to find out the
valuable findings.
In the present study both type of data- Primary as well as secondary are used. But a
massive part of the data was collected through primary data. The main sources from
which the data was selected can be outlined as follows:

Primary sources:

1 Observation: By observation method data is collected. While working on the project

related to Market Analysis were observed and this data was then further utilized for the
analysis and interpretation.
2 Questionnaire: Questionnaires were used to measure the system effectiveness by
getting them filled by the dealers of the products manufactured by the organization. The
questionnaire constituted questions. Dealers were asked to fill up the questionnaires
as per their experiences about products of company.

Secondary Data Sources:

1. Records: For the comprehensive data collection various records related to the subject
of study were used.
2. Books: Some useful books were also used in the study for the purpose of having a
perfect blend of relevant theoretical and practical aspects.
3. Websites: Websites related to the subject of the study were also referred for the further
data collection.

SAMPLE DESIGN
TARGET POPULATION : Males & Females above 16 yrs. Of age in Delhi region
during the month of Jan-Feb.2003
Sample Size : 75

Stratified random sampling is done to ensure reliability & minimize bias.

The population is stratified w.r.t. income.
Income strata
Less than Rs.15000
Lying between Rs.15000 to Rs.25000

Rs.25000 and above.

FORMULATING ATHE QUESTIOINNAIRE

Keeping in mind the objectives of the research various questions have been
formulated.

The questionnaire framed has been divided into two parts keeping into
consideration the lack of time available with the respondents at the market
places where the survey has been conducted, and the number of attributes to
be measured.

PREPARATION OF THE REPORT

DATA COLLECTION
METHODS :
1. Questionnaire method
2. Personal interview

SOURCES OF INFORMATION
1. primary sources
2. consumer survey
3. Secondary sources
4. Business India
5. Business today
6. Business world
7. Journals in the compan

FINDINGS OF THE STUDY

Single cylinder market is dominated by eicher 242 tractor.
Single cylinder tractors are mainly used for haulage purpose.
Single cylinder tractors are mostly used because of less price and higg mileage.

 Mahindra and Mahindra the leading tractor manufacturer has not find any place
in the single cylinder segment.
The other two leading companies i.e Taffy and Escorts have not yet launched
their tractor in this segment.
The sales of tractor are dependent mainly on the activeness of sales person.
Rural people are not much aware and bothered about brands.
People generally look at their close relative for buying.

CONCLUSION & SUGGESTIONS

The summer training has given me the opportunity to learn about the corporate world. It
has surely made a perfect balance between the theoretical and practicle aspect of this
course. It gave me an opportunity to work in the rural sctor which was not explored much
in the theories.
The job that was given to me the to conduct a market research on the growth opportunity
of the single cylinder tractor, which was successfully completed during the tenureof my
summer training.
This project also helped me to work for achieving the targets. This target which was
given to me during the summer training was achieved the period during my summer
training.

RECOMMENDATIONS

Creating awareness among the customer is must.

It should give more emphasis on the sales promotion.
Good financial scheme can also increase the sell.
Dealers should be given some advantage on selling of MPT
Fuel efficiency should be increased.
It should be converted into a single cylinder tractor.
It should make its existing customer satisfied.
Proper accessories should be provided to the customer.

QUESTIONNAIRE
Greetings. I am......... From .......... We meet tractor owners from time to time to
understand the issues faced by owners and how the betterment can be brought about. I
will appreciate if you could please cooperate me in replying following questions.

Q1. Did you own a tractor prior purchase to your present tractor?
1.Yes

2.No

Q2. Can you please tell me which was your earlier tractor model?
(a) Make

(b)Model

(c)HP

(d) Year

Q3.What did you do with your old model?

(a)Sold it (other than dealer)
(b) Trade-in
(c) Still posses the tractor
(d) Other.....

Q4. Can you please tell the agriculture implements?

Q5. What is the main difference between a single cylinder and a double cylinder tractor?
a)
b)
c)
d)

Single cylinder tractor less powerful

Single cylinder consume less fuel
Single cylinder tractor is less priced
Single cylinder are haulage tractor

Q6. Single cylinder tractor consumes

a) Low maintains cost of single cylinder
b) For less land holdings
c) Other reasons.............

BIBLIOGRAPHY

World Wide Web

www.escortsagri.com
www.mahindra.com
www.businessfinancemag.com
www.gtnews.com
www.investopedia.com
www.planware.com
www.icraindia.com
www.myiris.com/share/company
www.contentlinks.asiancerc.com/sbicap/market.asp
www.wikipedia.com

Articles other than Web

MIS reports of Escorts