Assignment-1 Ratio Analysis on BAJAJ Motors Prof:Seema dogra

Introduction
The Hero Honda story began with a simple vision the vision of a mobile and an empowered India, powered by Hero Honda. This vision was driven by Hero Hondas commitment to customer, quality and excellence, and while doing so, maintains the highest standards of ethics and societal responsibilities. Twenty five years and 25 million two wheelers later, Hero Honda is closer to fulfilling this dream. This vision is the driving force behind everything that we do at Hero Honda. We understood that the fastest way to turn that dream into a reality is by remaining focused on that vision. There were many unknowns but we kept faith, and today, Hero Honda has been the largest two wheeler company in the world for eight consecutive years. Our growth has kept compounding. The company crossed the ten million unit milestone over a 19-year span. In the new millennium, Hero Honda has scaled this to 15 million units in just five

years! In fact, during the year in review, Hero Honda sold more two wheelers than the second, third and fourth placed Two-wheeler Company put together. With Hero Honda, the domestic two wheeler market was able to show positive growth during the year in review. Without Hero Honda, the domestic market would have actually shrunk. Over the course of two and a half decades, and three successive joint venture agreements later, both partners have fine-tuned and perfected their roles as joint venture partners. What the two partners did was something quite basic. They simply stuck to their respective strengths. As one of the world's technology leaders in the automotive sector, Honda has been able to consistently provide technical know-how, design specifications and R&D innovations. This has led to the development of world class, value - for- money motorcycles and scooters for the Indian market. On its part, the Hero Group has taken on the singular and onerous responsibility of creating world-class manufacturing facilities with robust processes, building the supply chain, setting up an extensive distribution networks and providing insights into the mind of the Indian customer. Since both partners continue to focus on their respective strengths, they have been able to complement each other. In the process, Hero Honda is recognized today as one of the most successful joint ventures in the world. It is therefore no surprise that there are more Hero Honda bikes on this country's roads than the total population of some European countries put together!

HERO HONDA'S MISSION

Hero Hondas mission is to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities. This mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique and mutually beneficial relationship with all its stake holders.

HERO HONDA'S MANDATE

Hero Honda is a world leader because of its excellent manpower, proven management, extensive dealer network, efficient supply chain and worldclass products with cutting edge technology from Honda Motor Company, Japan. The teamwork and commitment are manifested in the highest level of customer satisfaction, and this goes a long way towards reinforcing its leadership status.

BOARD OF DIRECTORS

No Name of the Directors . 1 Mr. Brijmohan Lall Munjal 2 3 4 5 6 7 8 Mr. Pawan Munjal Mr. Toshiaki Nakagawa Mr. Sumihisa Fukuda Mr. Om Prakash Munjal Mr. Sunil Kant Munjal Mr. Masahiro Takedagawa Mr. Satoshi Matsuzawa (Alternate Director to Mr. Takashi Nagai) Mr. Pradeep Dinodia

Designation Chairman & Whole-time Director Managing Director & CEO Joint Managing Director Technical Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director

10 Gen.(Retd.) V. P. Malik 11 Mr. Analjit Singh 12 Dr. Pritam Singh 13 Ms. Shobhana Bhartia 14. Mr. Meleveetil Damodaran Mr. Ravi Nath

Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director

& Independent & Independent & Independent & Independent & Independent & Independent & Independent

Balance sheet of Hero Honda ( Rs. in crores)

Mar '07 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 34.80 34.80 0.00 0.00 2,330.15 0.00 2,364.95 0.00 157.20 157.20 2,522.23 Mar '07 12 mths 1,800.63 635.10 1,165.53 189.92 1,973.87 275.58 335.25 35.26 646.09 268.04 Mar '08 12 mths 34.80 34.80 0.00 0.00 2,784.22 0.00 2,819.02 0.00 127.01 127.01 2,946.03 Mar '08 12 mths 1,938.78 782.52 1,156.26 408.49 2,566.82 317.10 297.44 130.58 745.12 196.37 Mar '09 12 mths 34.80 34.80 0.00 0.00 3,379.29 0.00 3,414.09 0.00 88.69 88.69 3,502.78 Mar '09 12 mths 2,516.27 942.56 1,573.71 120.54 3,368.75 326.83 149.94 217.49 694.26 325.80

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances

Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

0.52 914.65 0.00 1,171.50 437.24 1,608.74 -694.09 0.00 2,635.23 165.59 123.70

0.51 942.00 0.00 1,455.57 499.76 1,955.33 -1,013.33 0.00 3,118.24 56.37 149.55

2.08 1,022.14 0.00 1,678.93 526.97 2,205.90 -1,183.76 0.00 3,879.24 100.54 190.33

Profit & Loss account of Hero Honda Motors( Rs. in crores) Mar '07 Mar '08 Mar '09 12 mths 12 mths 12 mths Income Sales Turnover 11,553.47 12,048.30 13,553.23 Excise Duty 1,647.52 1,703.29 1,227.85 Net Sales 9,905.95 10,345.01 12,325.38 Other Income 197.68 216.30 222.14 Stock Adjustments 3.20 -14.14 22.09 Total Income 10,106.83 10,547.17 12,569.61 Expenditure Raw Materials 7,255.66 7,465.36 8,842.14 Power & Fuel Cost 52.45 56.55 73.70 Employee Cost 353.81 383.45 448.65 Other Manufacturing Expenses 280.17 304.11 354.08 Selling and Admin Expenses 558.99 563.27 669.34 Miscellaneous Expenses 206.11 190.36 206.54 Preoperative Exp Capitalised 0.00 0.00 0.00 Total Expenses 8,707.19 8,963.10 10,594.45 Mar '07 Operating Profit PBDIT Interest PBDT 12 mths 1,201.96 1,399.64 13.76 1,385.88 Mar '08 12 mths 1,367.77 1,584.07 13.47 1,570.60 Mar '09 12 mths 1,753.02 1,975.16 13.04 1,962.12

Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

139.78 0.00 1,246.10 0.00 1,246.10 388.21 857.89 1,451.53 0.00 339.47 57.69 1,996.88 42.96 850.00 123.70

160.32 0.00 1,410.28 0.00 1,410.28 442.40 967.88 1,497.74 0.00 379.41 64.48 1,996.88 48.47 950.00 149.55

180.66 0.00 1,781.46 0.00 1,781.46 499.70 1,281.76 1,752.31 0.00 399.38 67.87 1,996.88 64.19 1,000.00 190.33

Key Financial Ratios of Hero Honda Motors( Rs. in crores) Mar '07 Mar '08 Mar '09 Investment Valuation Ratios Face Value 2.00 2.00 2.00 Dividend Per Share 17.00 19.00 20.00 Operating Profit Per Share 60.19 68.50 87.79 (Rs) Net Operating Profit Per Share 496.07 518.06 617.23 (Rs) Free Reserves Per Share (Rs) 121.70 147.55 188.33 Bonus in Equity Capital 59.98 59.98 59.98 Profitability Ratios Operating Profit Margin(%) 12.13 13.22 14.22 Profit Before Interest And Tax 10.63 11.57 12.64 Margin(%) Gross Profit Margin(%) 12.85 11.67 12.75 Cash Profit Margin(%) 9.98 9.59 10.84 Adjusted Cash Margin(%) 8.84 9.59 10.84 Net Profit Margin(%) 8.58 9.27 10.30 Adjusted Net Profit Margin(%) 7.44 9.27 10.30

Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition

43.48 34.73 30.11 20.21 20.21 43.48

41.57 32.41 28.14 19.08 19.08 41.57

43.33 33.72 30.73 --43.33

0.57 0.40 0.07 0.07 711.75 0.07 93.44 73.51

0.48 0.32 0.04 0.04 648.15 0.04 108.14 84.76

0.46 0.31 0.02 0.02 664.40 0.02 142.76 113.15

36.25 40.11 47.48 9.54 3.99 6.01 8.46 2.49 -25.22

42.82 32.70 42.82 5.89 3.52 5.89 10.69 1.87 -35.26

47.53 55.10 47.53 5.34 3.36 5.34 8.27 2.16 -34.58

73.24

72.16

71.73

Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times Earnings Per Share Book Value

1.10 5.11 2.66

0.67 4.86 2.35

0.79 4.72 2.01

46.29 39.80 46.62 55.06 0.19 Mar '07 42.96 123.70

45.86 39.34 47.19 55.65 0.13 Mar '08 48.47 149.55

36.45 31.95 60.01 65.36 0.06 Mar '09 64.19 190.33