TABLE OF CONTENTS

TOPIC

Preface
Acknowledgment
Executive Summary

PAGE NO.

ii
iii
iv

Chapter 1 Company Profile

About Ashok Leyland
Product Range

1
1
3

Chapter 2 Concept of Financial Statement Analysis

Chapter 3 Traditional Performance Evaluation Techniques

3.1 Horizontal Analysis
3.2 Vertical Analysis
3.3 Trend Analysis

8
21
24

Chapter 4 Analysis of Profitability

4.1 Gross Profit Ratio
4.2 Net Profit Ratio
4.3 Asset Turnover
4.4 Return on Asset
4.5 Return on Equity

26

Chapter 5 Analysis of Solvency

5.1 Debt to Equity
5.2 Interest Coverage Ratio

29

Chapter 6 Analysis of Liquidity

6.1 Current Ratio
6.2 Quick Ratio
6.3 Debtor Turnover Ratio
6.4 Average Collection Period
6.5 Inventory Turnover

31

Chapter 7 Cash flow statement analysis

34

Chapter 8 Recommendations & Suggestion

40

CHAPTER-1
COMPANY PROFILE

About Ashok Leyland

Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India. It is the
second largest commercial vehicle company in India in the medium and heavy commercial vehicle
(M&HCV) segment with a market share of 28% (2007-08).Ashok Leyland is a market leader in the bus
segment.
The company was established in 1948 as Ashok Motors, with an aim to assemble Austin cars.
Manufacturing of commercial vehicles was started in 1955 with equity contribution from the British
company, Leyland Motors. Today the Company is the flagship of the Hinduja Group, a British-based
and Indian originated transnational conglomerate.
Ashok Leyland is a technology leader in the commercial vehicles sector of India. Its annual turnover
exceeded USD 2 billion in 2007-08. Selling close to around 83,000 medium and heavy vehicles in
2007-08, Ashok Leyland is India's largest exporter of medium and heavy duty trucks out of India. It is
also one of the largest Private Sector Employers in India - with about 12,000 employees working in 6
factories and offices spread over the length and breadth of India
Over the years, Ashok Leyland vehicles have built a reputation for reliability and ruggedness. This
was mainly due to the product design legacy carried over from British Leyland.
In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come
from Ashok Leyland. Some of them like the double-decker and vestibule buses are unique models
from Ashok Leyland, tailor-made for high-density routes.
In 1987, the overseas holding by Land Rover Leyland International Holdings Limited (LRLIH) was
taken over by a joint venture between the Hinduja Group, the Non-Resident Indian transnational
group and IVECO Fiat SpA, part of the Fiat Group and Europe's leading truck manufacturer. This
resulted in Ashok Leyland launching the "Cargo" range of trucks. These vehicles used Iveco engines
and for the first time AL vehicles had factory-fitted cabs. The Cargo trucks are no longer in production
and the use of Iveco engine was discontinued, but the Cargo cab continues to be used on the eComet
range of trucks.
Ashok Leyland also had a collaboration with Hino Motors, Japan from whom the technology for the Hseries engines was bought. Many indigenous versions of H-series engine was developed with 4 and 6
cylinder and also conforming to BS2 and BS3 emission norms in India. These engines proved to be
extremely popular with the customers primarily for their excellent fuel efficiency. Most current models
of Ashok Leyland come with H-series engines.
In the journey towards global standards of quality, Ashok Leyland reached a major milestone in 1993
when it became the first in India's automobile history to win the ISO 9002 certification. The more
comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998 and ISO 14001 certification for
all vehicle manufacturing units in 2002. In 2006, Ashok Leyland became the first automobile company
in India to receive the TS16949 Corporate Certification.

Branch office:
No. 1 Sardar Patel Road,
Guindy,
Chennai 600 032,
India.
Tel: 0091 44-2220 6000
Fax: 0091 44-2220 6000

Management Team
Ashok Leyland is currently headed by Mr R. Seshasayee who is the Managing Director since 1998.
Under his leadership, the company has expanded from a purely India-centric company to a company
with global focus. Mr. Seshasayee was also the President of CII (Confederation of Indian Industry),
the apex body representing Indian Industry for the year 2006-2007.
The following are the other functional heads at Ashok Leyland
1

Mr. Vinod Dasari - Chief Operating Officer.

Mr. K. Sridharan - Chief Financial Officer.

Mr. N. Mohanakrishnan - Executive Director - Internal Audit

Mr. Rajive Saharia - Executive Director - Marketing

Mr. Shekar Arora - Executive Director - Human Resources

Mr. B. M. Udayashankar - Executive Director - Manufacturing

Mr. Anup Bhat - Executive Director - Strategic Sourcing

Mr. Rajindar Malhan - Executive Director - International Operations

Mr. R.R.G.Menon - Executive Director - Product Development

10 Mr. A. K. Jain - Executive Director - Project Planning

Achievements

Eight out of ten metro state transport buses in India are from Ashok Leyland. At60 million
passengers a day, Ashok Leyland buses carry more people than the entire Indian rail network.

Ashok Leyland has a near 98.5% market share in the Marine Diesel Engines Markets in India.

In 2002, all the vehicle-manufacturing units of Ashok Leyland were ISO 14001 certified with
Environmental Management System.

In the 2006-07 financial year, the company sold a record 83,101 vehicles which is an all time
high for Ashok Leyland.

It is one of the leading suppliers of defense vehicles in the world and also the leading supplier
of logistics vehicles to the Indian Army.

Products

Luxura

i-Bus

Viking BS-I - city bus

Viking BS-II - city bus

Viking BS-III -city bus

Cheetah BS-I

Cheetah BS-II

Panther

12 M

Stag Mini

Stag CNG

222 CNG

Lynx

Double Decker

Vestibule

Airport Tarmac Coach

Olympian

Gensets

Goods segment