40088980 Project Report on Escort Tractors

FSTlHATl0t 0F FltAtClAl STRFt6TH 0FFSC0RTS. 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 Sco¡c 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 E×isii3g Liicraiurc < $&# lttµ:// 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..!!! 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