# Tata Steel Ratio Analysis

In:

Submitted By hasnain
Words 1551
Pages 7
Ratio Analysis of TATA Steel Ltd for the Financial Year ending 2009-2010
Balance Sheet Analysis (Base Year Taken 2008-2009) * Ratios Testing Solvency or Financial Strength (A) Short Term Solvency (1) CURRENT RATIO = Current Assets/Current Liabilities
The Ratio tests the short term financial strength of a Company. It tests the Company’s ability to pay its Current Liabilities. Standard Ratio should be 2:1 i.e. Current Assets should be double the Current Liabilities. Higher the Current Ratio better for the Company.
Analysis in case of TATA Steel Ltd. Year | Total C.A. | Total C.L. | Current Ratio | 2009-2010 | 13425.27 | 12003.02 | 1.2:1 | 2008-2009 | 11591.66 | 11899.95 | 0.97:1 |

Interpretation of the above Ratio: As stated earlier that the Standard Current Ratio should be 2:1, which is not in the above case for both the years hence it can be said that the Company might not be having a good short term Financial Position. Low Current Ratio is not good for a Companys reputation as it states that the company is not in a position to even repay its Current Liabilities. It is a widely used Ratio for Analysing a Companys short term Financial Position.
From the above comparison it can be stated that the Company had a good short term Financial position in the year 2009-2010 as compared to the year 2008-2009.

(2) QUICK RATIO = Quick Assets/Quick Liabilities
Where Quick Assets = C.A. Less Closing Stock Less Prepaid Expenses
Where Quick Liabilities = C.L. Less Bank Overdraft
It is a more strict Test of evaluating the short term Financial Position of the Company. Standard Quick Ratio is 1:1. Year | Total Q.A. | Total Q.L. | Quick Ratio | 2009-2010 | 10347.52 | 12003.02 | 0.86:1 | 2008-2009 | 8111.19 | 11899.95 | 0.68:1 |

Interpretation of the above Ratio: As stated earlier that, Standard Ratio is 1:1, The Company has Quick Ratio which is

### Similar Documents

#### Term Paper

...ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 Under the guidance of Prof. D.P.TRIPATHY DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 National Institute of Technology Rourkela CERTIFICATE This is to certify that the thesis entitled “ANALYSIS AND INTERPRETATION FINANCIAL STATEMENTS: CASE STUDIES” submitted by Sri Sudip Das, Roll No: 10605038 in partial fulfillment of the requirements for the award of Bachelor of Technology degree in Mining Engineering at the National Institute of Technology, Rourkela (Deemed University) is an authentic work carried out by him under my supervision and guidance. To the best of my knowledge, the matter embodied in the thesis has not been submitted to any other University/Institute for the award of any Degree or Diploma. Date: (Prof. D.P. TRIPATHY) Dept. of Mining Engineering National Institute of Technology Rourkela-769008 ACKNOWLEDGEMENT I wish to express my deep sense of gratitude and indebtedness...

Words: 21095 - Pages: 85

#### Case

...ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 Under the guidance of Prof. D.P.TRIPATHY DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 National Institute of Technology Rourkela CERTIFICATE This is to certify that the thesis entitled “ANALYSIS AND INTERPRETATION FINANCIAL STATEMENTS: CASE STUDIES” submitted by Sri Sudip Das, Roll No: 10605038 in partial fulfillment of the requirements for the award of Bachelor of Technology degree in Mining Engineering at the National Institute of Technology, Rourkela (Deemed University) is an authentic work carried out by him under my supervision and guidance. To the best of my knowledge, the matter embodied in the thesis has not been submitted to any other University/Institute for the award of any Degree or Diploma. Date: (Prof. D.P. TRIPATHY) Dept. of Mining Engineering National Institute of Technology Rourkela-769008 ACKNOWLEDGEMENT I wish to express my deep sense of gratitude and indebtedness to Dr. D.P.Tripathy, Department of...

Words: 21095 - Pages: 85

#### Tata Steel Finace Statement

...TATA STEEL 2009 FINANCIAL RATIO ANALYSIS ABHIJIT SAMANTA I N T E R N A T I O N A L S C H O O L O F B U S I N E S S & M E D I A ; K O L K A T A P a g e | 2 FINANCIAL RATIO ANALYSIS OF TATA STEEL 1. Liquidity Ratios:- Liquidity Ratios measures the ability of the firm to meet its short term obligations. They also reflect the firm’s ability to meet financial contingencies that might arise. (A) Current Ratio: - This ratio indicates the firm’s ability to meet its current liabilities. This ratio is of very high importance to the suppliers of short term funds like the bankers and trade creditors. It is measured by: - Current Ratio = Current Assets / Current Liabilities. As per Balance Sheet 31st March 2008 & 2009. (All figures are in crore.) Year Current Asset Current Liabilities Current Ratio 2008 3,613.70 3,855.26 0.94 2009 5,707.05 6,039.86 0.94 Analysis: - The industry norm value of current ratio is 2:1. However it does not mean so that higher current ratio means good company profile. It may signify higher unused cash, inventory which again may result in inventory carrying cost. In both the years the Current ratio for Tata Steel is same. However it does not mean any increase or decrease in current ratio of any company gives the growth profile of the company. P a g e | 3 (B) Quick Ratio:- ...

Words: 2161 - Pages: 9

#### Final Internship

...Project Report On ANALYSIS OF FINANCIAL ACTIVITIES IN TATA STEEL, WEST BOKARO UNDERTAKEN AT TATA STEEL LTD., WEST BOKARO DIVISION, RAMGARH, JHARKHAND Under the guidance of “Mr. M.R.S.S. Srinivas (Manager Accounts) & Mr. Kumar Sunil (Accounts Head)” Submitted as a part of academic curriculum for the award of The degree of Post Graduate Program in Management Indian Institute of Management Rohtak By: Ashish Priyadarshi PGP05.114 AUTHENTICATION CERTIFICATE “To Whom It May Concern” This is to certify that the Internship Dissertation, titled “ANALYSIS OF FINANCIAL ACTIVITIES IN TATA STEEL, WEST BOKARO”, is a bonafide work carried out by me at Tata Steel Ltd. It is the record of an original & independent study carried out by me, under the able supervision of Mr M.R.S.S. Srinivas (Manager Accounts). Signature of the Intern Ashish Priyadarshi Date:- Place:- Company guide’s certificate “To Whom It May Concern” This is to certify that the Internship Dissertation, titled “Analysis of Financial Activities in Tata Steel, West Bokaro” submitted by Mr. ASHISH PRIYADARSHI is a bonafide work carried out by him at TATA STEEL LTD. under my guidance. The matter embodies in this dissertation has not been submitted earlier for award of any degree or diloma to the best of my knowledge and belief. I recommend its submission for evaluation. Signature of company guide 1. MR...

Words: 9454 - Pages: 38

#### Iron and Steel Industry

...Analysis of Indian Iron and Steel Industry Table of Contents 1Introduction.......................................................................................................... 3 1.1Varieties of Steel................................................................................ ...............5 1.2Production Technology .....................................................................................6 1.3Components of the cost of production..............................................................7 2The Global Steel Industry.....................................................................................9 3The Structure of Indian Steel Industry...............................................................10 3.1Factors that attribute to the Revival of the Indian Steel Industry....................11 3.2Consumption of Steel in India.........................................................................16 3.2.1Top Five Companies.....................................................................................16 3.2.2Bottom Five Companies..............................................................................25 4Quantitative Analysis.........................................................................................32 4.1Ratio Analysis................................................................................................. .32 5Qualitative Analysis.........................................................................................

Words: 15829 - Pages: 64

#### Tata Group

...Tata Group is following policy of growth strategy based on Mergers & Acquisitions. So, Corus takeover is a part of a whole series of mega acquisitions in diverse areas since 2000. Tata Steel's acquisition of Corus of the UK clearly reinforces the strategic logic dictating `consolidation' in the highly fragmented steel industry. The historic merger of Arcelor and Mittal Steel laid the foundation for this deal. For Tata Steel, which has been pursuing inorganic growth in the Asian region for a while, the move into Europe appears to go well with its strategy of global growth. Tata steel chose the equity mode to enter the European market. Equity mode or Foreign Direct Investment is the principle way in which firms enter and compete in the modern global economy. Acquisition is the part of FDI. The acquirer inherits the company’s strategic assets (managerial, technological, and marketing resources), without having to build them from scratch, as would be the case when setting up overseas operations through Greenfield investment. Increasingly, acquiring strategic assets have become a motivation for OFDI from emerging economies Tata have chosen Acquisition for many reasons. Some of these reasons can be explained by theory, while others not. Now we will discuss the prime motives that encourage Tata to adopt aggressive Acquisition policy while entering European Steel Market. The main advantages to Tata by choosing Acquisition are as follows: Economy of scale: This acquisition...

Words: 860 - Pages: 4

#### Cash Flow

...year ( com) Specially Guided by Class Roll No :- 05DC018 Dr. N.K Swain Exam Roll No :-05C50023 Dept. of commerce, Balasore. DECLARATION I Nachiketa Sahu do here by declared that the project report entitled “A STUDY ON PROFITABILITY RATIO ANNALYSIS OF ORI PLAST ” submitted by me to FM (AUTO)COLLEGE ,BALASORE impartial fulfillment of the requirement for +3 3rd year (com) this project is original genuine. I also declared that the project report submitted by me is of my own and it is not submitted by any other institution including the university at any time before. Name:-Nachiketa Sahu Class:-+3 3rd year commerce Date :- Class Roll No :-05DC0018 Place:-Balasore Exam Roll No:- 05C5OO23 CERTIFICATE This is to certify that Nachiketa Sahu of +3rd year commerce bearing exam Roll No:-05C5OO23 for the session of 2007-08 has submitted this project entitled “profitability ratio analysis” .This report has not be submitted earlier any where for any purpose. It is forwarded to the controller of examination F.M (auto) college, Balasore after evaluation. Dr. N.K Swain ...

Words: 1439 - Pages: 6

#### Cost Analyis

...A PROJECT REPORT ON (“A STUDY ON COST COMPARISON ANALYSIS OF TATA STEEL AND ITS COMPETITORS”) SUBMITTED TO MAEER’s MIT SCHOOL OF BUSINESS BY (SOURAV GHOSH HAZRA) 322346 32ND Batch IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM) Finance APRIL-MAY 2015, MAEER’s MIT SCHOOL OF BUSINESS PUNE CONTENTS Chapter No. Title Page No. Declaration from the Student Certificate from the Organization iv Certificate from the Guide v Acknowledgement vi List of Tables vii List of Graphs viii List of Abbreviation ix Executive Summary I iii x INTRODUCTION 1 – 11 1.1 Company profile 1.2 Objectives of the Study 12 1.3 Limitations of the study 12 II RESEARCH METHODOLOGY 2.1 Primary data 13 2.2 Secondary data 13 2.3 Sample design 13 2.4 Sample Size 13 2.5 Method of Data Collection 14 III THEORETICAL BACKGROUND 3.1 Data analysis Techniques IV DATA PROCESSING AND ANALYSIS 25 – 45 V MANAGEMENT LESSONS 46 - 49 VI FINDINGS 50 VII RECOMMENDATIONS 51 VIII CONCLUSION 52 Bibliography Annexure/Appendices 15 – 24 24 DECLARATION I, Mr. SOURAV GHOSH HAZRA hereby declare that this project report is the record of authentic work carried out by me during the period from 7th April to 2th June and has not been submitted to any other University or Institute for the award...

Words: 11785 - Pages: 48

#### Tata Corus Valuation

...Manikandan Tata’s Corus Valuation Introduction: Tata Steel was established by an Indian, Jamshetji Nusserwanji Tata in 1907. Though he died in 1904, before the project came to light, he sowed the seeds for a company that can stand the test of times. A century later, they took over Corus to become the 5th largest steel producer in the world. On January 31st 2007, Tata Steel took over Corus for USD 12.11 Billion. It took 9 rounds of bidding against a Brazilian competitor, CSN to seal the deal. The deal between Tata and Corus was officially announced on April 2nd 2007 at a price of 608 pence per common share in cash. It was a 100% acquisition and a new entity was born, to be run by one of Tata’s subsidiary in London. When the acquisition process started off in 2005, the initial offer was 455 pence and finally ended with Tata paying 608 pence, which is 33.6% more than the initial offer. This raises many an eyebrows about the final price. What transpired between 2005 and 2007? Was 608 pence/share a fair price? Steel Industry Tata Steel has its own mines and manufacturing units for the production of all kinds of steel. Steel is an alloy consisting mostly of iron, with carbon content between 0.2% and 2.1% by weight depending on the grade. Iron, like most metals, is found in the Earth's crust only in the form of an ore, i.e. combined with other elements such as oxygen or sulfur. Iron imputed with carbon forms steel. Carbon is the most cost-effective alloying material for...

Words: 3648 - Pages: 15

#### Tata Motors

...Tata Motors Case Jordan Jenkins Professor Watson University of Rio Grande 11/14/2013 Tata Motor case Economic characteristics Describe the economic characteristics of the global motor vehicle industry. The past five years were tumultuous for the Global Car and Automobile Manufacturing industry. The price for fuel and other growing concerns have shifted consumer’s preferences away from big pickup truck to more fuel efficient cars. Some automakers embraced the change by expanding their small-car portfolios and diversifying into the production of hybrid electric motor vehicles. Other automakers were more reluctant to shift their focus from big to small cars, expecting the price of fuel to contract eventually, bringing consumers back to the big-car fold. When fuel prices did fall during the second half of 2008, it was due to the US financial crisis ripping through the global economy. The meltdown began when a debt binge overwhelmed many US consumers and businesses. This had a domino effect throughout the developed and emerging worlds, with many Western nations following the United States into recession. The Global Car and Automobile Manufacturing industry is deemed to have a low level of market share concentration. There are several major automotive companies across the globe, each with a significant share of the market, but concentration has been declining over the past five years as firms in emerging economies ramp up production a good example would be Tata in India. ...

Words: 2196 - Pages: 9

#### Tata - Corus –a Case of Acquisition

...Tata - Corus –A case of Acquisition Submitted To: Dr.R.Sahu By : Jitesh Maharwal(2004 IPG 29 ) Nikhil Garg(2004 IPG 44) Harendra Singh(2004 IPG 83) Sunny Tyagi(2004 IPG 83) Contents TATA & CORUS: A Case of Acquisition .......................................................................... 3 Steel Industry Background .............................................................................................. 6 Tata and Indian Steel Industry ........................................................................................ 9 SWOT Analysis: ....................................................................................................... 11 Global Steel Industry .................................................................................................... 12 Competition: US, Europe and Emerging Markets ........................................................ 12 Corus and Steel Production in the U.K ......................................................................... 13 Restoring Success ..................................................................................................... 14 SWOT Analysis: ....................................................................................................... 14 The Deal ........................................................................................................................ 16 Structuring and Pricing a deal .............................................................................

Words: 12887 - Pages: 52

#### Understand Clogging in If Grade and Suggest Countermeasures to Minimize It

...Materials Engineering National Institute of Technology, Rourkela Under the Guidance of Mrs Shainu Suresh Sr. Manager, Steel Technology and Casting Flat Product Technology Group, Tata Steel Ltd. Jamshedpur i|Page DECLARATION I hereby declare that the project work entitled “Understand clogging in IF grade and suggest countermeasures to minimize it” is an authentic record of my own work carried out at Tata Steel Ltd., Jamshedpur as requirement of short term industrial/research experience for the award of degree of B.Tech Metallurgy, National Institute of Technology, Rourkela, under the guidance of Mrs Shainu Suresh during 14th May to 9th July, 2013 Place: Jamshedpur Date: 8th July,2013 Abhijeet Dash VT20132141 Certified that the above statement made by the student is correct to the best of my knowledge and belief. Mrs Shainu Suresh Sr.Manager, Steel Technology and Casting Flat Product Technology Group, Tata Steel Ltd. Jamshedpur. ii | P a g e iii | P a g e ACKNOWLEDGEMENT I would like to thank the Management of Tata Steel Ltd. for giving me this wonderful opportunity to work with highly knowledgeable people on a project of great importance. I owe my deepest gratitude to my guide Mrs. Shainu Suresh, Sr.Manager, Steel Making and Casting Technology, FPTG and my industry coordinator Dr. T.K. Roy, Head, Steel Technology, FPTG, whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding...

Words: 13168 - Pages: 53

Free Essay

#### Tata Corus

...Case Study analysis TATA-CORUS:- Q.1. What are the benefits of the TATA-CORUS merger deal to the stakeholders of TATA Steel and the stakeholders of CORUS? Evaluate the post-merger security with the help of CAPM Model. A.1. On January 31st, 2007 India’s Tata Steel acquired Corus, the erstwhile British Steel Major at a price of 608 pence per Corus share totaling \$12.1 billion/ Rs 54,000 crore/ £6.1 bn, which was five pence per share higher than the offer of Brazil’s CSN (Companhia Siderugica Nacional). The deal is the largest Indian takeover of a foreign company, and creates the world's fifth-biggest steel company from the present 56th rank. Benefits of TATA-CORUS merger deal to the stakeholders of TATA Steel Short-Term Implications Investors with a one-to-two year perspective may find the Tata Steel stock unattractive at current price levels. While the potential downside to the stock may be limited, it may consolidate in a narrow range, as there appears to be no short-term triggers to drive up the stock. The formalities for completing the acquisition may take three to four months, before the integration committees get down to work on the deal. In our view, three elements are stacked against this deal in the short run: 1) Equity dilution: The financing of the acquisition is unlikely to pose a challenge for the Tata group, but the financial risks associated with high-cost debt may be quite high. Though the financing pattern is yet to be spelt out fully, initial...

Words: 3103 - Pages: 13

#### Never Give Up

...PUNJAB TECHNICAL UNIVERSITY KAPURTHALA Scheme& Syllabus of B. Tech. Mechanical Engineering [M.E.] 3rd & 4th Semester effective for Batch 2011 By Board of Studies Mechanical Engineering/ Production Engineering / Industrial Engineering Punjab Technical University B.Tech Mechanical Engineering (ME) Batch 2011 Approved on June 27, 2012 Third Semester Course Code BTME301 BTME302 BTME303 BTME304 BTME305 BTME306 BTME307 Course Name Load Allocation L 3 3 1 4 4 3 18 T 1 1 1 3 P 6 2 2 2 1 13 Contact Hours: 34 Hrs. Marks Distribution Internal 40 40 40 40 40 40 30 30 30 60 390 External 60 60 60 60 60 60 20 20 20 40 460 Total Marks 100 100 100 100 100 100 50 50 50 100 850 Credits Strength of Materials- I Theory of Machines-I Machine Drawing Applied Thermodynamics -I 4 4 4 5 4 3 1 1 2 1 29 Manufacturing Processes – I Engineering Materials & Metallurgy Engineering Materials & Metallurgy Lab BTME308 Strength of Materials Lab. BTME309 Applied Thermodynamics Lab Advisory Meeting BTME 310 Workshop Training* Total * Workshop Training will be imparted in the Institution at the end of 2 nd semester for Four (04) weeks duration (Minimum 36 hours per week). Industrial tour will also form part of this training. Fourth Semester Course Code BTME401 BTME402 BTME403 BTME404 BTME405 BTME406 BTME407 Course Name Strength of Materials – II Theory of Machines – II Fluid Mechanics Applied Thermodynamics - II Manufacturing Processes-II Fluid Mechanics Lab Manufacturing Processes...

Words: 7934 - Pages: 32

Free Essay

#### Contemporary Issues in Travel & Tourism

...| B.Tech(c.s.e) | 2006-10 | W.B.U.T | Dr.B.C.Roy Enginnering College,Durgapur | 7.46 | MBA(FINANCE) | 2010-12 | NATIONAL INSTITUTE OF TECHNOLOGY,DURGAPUR | DEPARTMENT OF MANAGEMENT STUDIES | 6.32 | TECHNICAL PROFILE: | Softwares:                   Microsoft Office, Tally 7.2 , Statistical Package:- SPSS ACADEMIC PROJECTS: | * “Determinants of Working Capital of “Oil and Gas INDUSTRIES” 4th Semester. In this study, it has been attempted to examine the factors affecting working capital - size of the firm (log of sales), Total Asset, Debt Equity Ratio, Net Worth, Proprietory Ratio, Return On Capital Employed, Working Capital of the oil & gas industry’s companies listed to National Stock Exchange Ltd and Bombay Stock Exchange Ltd. as on feb10, 2012. * “Merger & acquisition Project of “TATA STEEL & VISA STEEL” 4th Semester. The project theme was based on Merger and acquisition of any of the companies of your choice on the basis of company’s description, type of merger, motives,comparison, evaluation etc * “Fundamental and Technical...

Words: 536 - Pages: 3