Financial Statement Analysis Through Common Size at Nexteer Company

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INTRODUCTION TO THE SUBJECT STUDY

FINANCIAL ANALYSIS
Financial analysis (also referred to as financial statement analysis or accounting analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability of a business, sub-business or project.
Definition of 'Financial Analysis'

According to John N. Myer The financial statements provides a summary of the accounts of a business enterprise, the balance sheet reflecting the assets and liabilities and the income statement showing the results of operations during a certain period The process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company's past performance into an estimate of the company's future performance. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions.

Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital; Make decisions regarding investing or lending capital;
Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.
NEXTEER AUTOMOTIV NATURE OF FINANCIAL STATEMENTS

Financial Statements are prepared for the purpose of presenting a periodical review or report by the management and deal with the state of investment in the business and results achieved during the period under review. They reflect a combination of recorded facts, accounting conversations and personal judgments.
OBJECTIVES
To provide reliable financial information about economic resources and obligations of a business enterprise. To provide reliable information about the net resources of an enterprise that results from its activities. To provide financial information that assist in estimating the earning potentials of a business. To provide other needed information about changes in economic resources or obligations. To disclose, to the extent possible, other information related to the financial statements that is relevant to the needs of the users of these statements. To know the present and future earning capacity or profitability of the concern. The possibility of developments in the future by making forecast and preparing budgets. To have a comparative study in regard to one firm with another firm. To know the financial stability of the business concern.
GOALS
Financial analysts often assess the following elements of a firm: 1. Profitability - its ability to earn income and sustain growth in both the short- and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations; 2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term
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3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations; Both solvency and liquidity are based on the company's balance sheet, which indicates the financial condition of a business as of a given point in time. 4. Stability - the firm's ability to remain in business in the long run, without having to sustain significant losses in the conduct of its business. Assessing a company's stability requires the use of both the income statement and the balance sheet, as well as other financial and non-financial indicators. ETC
METHODS
Financial analysts often compare financial ratios (of solvency, profitability, growth, etc.):
Past Performance - Across historical time periods for the same firm (the last 5 years for example),
Future Performance - Using historical figures and certain mathematical and statistical techniques, including present and future values, this extrapolation method is the main source of errors in financial analysis as past statistics can be poor predictors of future prospects.
Comparative Performance - Comparison between similar firms.
These ratios are calculated by dividing a (group of) account balance(s), taken from the balance sheet and / or the income statement, by another, for example : Net income / equity = return on equity (ROE) Net income / total assets = return on assets (ROA) Stock price / earnings per share = P/E ratio Comparing financial ratios is merely one way of conducting financial analysis. Financial ratios face several theoretical challenges:
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They say little about the firm's prospects in an absolute sense. Their insights about relative performance require a reference point from other time periods or similar firms.
One ratio holds little meaning. As indicators, ratios can be logically interpreted in at least two ways. One can partially overcome this problem by combining several related ratios to paint a more comprehensive picture of the firm's performance.
Seasonal factors may prevent year-end values from being representative. A ratio's values may be distorted as account balances change from the beginning to the end of an accounting period. Use average values for such accounts whenever possible.
Financial ratios are no more objective than the accounting methods employed. Changes in accounting policies or choices can yield drastically different ratio values.
(fundamental analysis) Financial analysts can also use percentage analysis which involves reducing a series of
figures as a percentage of some base amount. For example, a group of items can be expressed as a percentage of net income. When proportionate changes in the same figure over a given time period expressed as a percentage is known as horizontal analysis. Vertical or common-size analysis reduces all items on a statement to a common size as a percentage of some base value which assists in comparability with other companies of different sizes. As a result, all Income Statement items are divided by Sales, and all Balance Sheet items are divided by Total Assets. Another method is comparative analysis. This provides a better way to determine trends. Comparative analysis presents the same information for two or more time periods and is presented side-by-side to allow for easy analysis.
TOOLS OR TECHNIQUES OF ANALYSING AND INTERPRETATION

1. Comparative financial statement analysis: It can be prepared for both income statement as well as position statement. Such statement shows the operating results for number of accounting periods and different dates can be used for comparing assets and liabilities and to find out any increase or decrease in the items.
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2. Common size or measurement statement analysis: Are those in which figures reported are converted to same common base. Vertical analysis is required for an interpretation of underlying causes of changes over a period of time. It is used for balance sheet as well as income statements.
3. Trend analysis: This analysis is an important tool of horizontal financial analysis. It enables to know the changes in the financial functions and operating efficiency between the time period chosen. Trend percentages are calculated for each item of the financial statements taking the figures of the base year as 100.
4. Fund flow statement or analysis: FFS is prepared to indicate in summary form, changes occurring in items of financial position between two different balance sheet dates.
5. Cash flow statement or analysis: Cash flow means inflow and outflow of cash. An inflow that is source of cash increase, the total cash available at the disposal of the firm while an outflow that is use of cash decrease it.
6. Ratio analysis: It is one of the powerful tools of the financial sanalysis; a ratio can be defined as, the indicated quotient of two mathematical expressions and as the relationship between two or more things. A ratio can be used as yard stick for evaluating the financial position and performance of a concern.
7. Working capital analysis: This statement is prepared to know the net changes in working capital of the between two specified dates. It is prepared from current assets and current liabilities to show the net increase or decrease in working capital.
8. DuPont analysis: This analysis shows the performance of the company in the form of chart. The return on investment which are comprises of earning before and after tax and the capital employed is clearly depicted in the chart.
NEXTEER AUTOMOTIV ATTRIBUTES OF FINANCIAL STATEMENTS

i. Relevance: Financial statements prepared should be relevant for the purpose they are supposed to serve. As far as possible, relevant and material information should be disclosed properly but confusing and irrelevant disclosures should be avoided.
ii.
Accuracy: Financial statements should be prepared accurately so that these may convey a full and correct idea about the progress, position and prospects of an enterprise.
iii.
Comparability: It is the foundation of financial analysis as it increases the utility of financial statements.
iv.
Analytical presentation: Financial statements should be presented in analytical and classical form so that a better and meaning analysis can be made.
v.
Promptness: Financial statements should be prepared after the end of the accounting period without any delay may present difficulty in tracing the cause of the results as disclosed by these statements.
vi.
Generally accepted principal: Financial statements must be prepared in accordance with the generally accepted accounting principles to have wider acceptability and understandability by the clients.
vii.
Consistency: Financial statements must be prepared on consistent basis following the same rules, procedures and principles in successive periods, unless the situation demands otherwise. It also affects the comparability of these statements.
viii.
Authenticity: Financial statements prepared must be authenticated by an independent and capable person (called auditor) in order to make them more reliable and acceptable by the users.
ix.
Compliance with law: Financial statements must meet the requirements of law, if any, in matter of form, contents and disclosures, procedures and methods.
NEXTEER AUTOMOTIV IMPORTANCE OF FINANCIAL STATEMENTS

Owners-provides funds for the business operations Creditors-suppliers of goods and services on credit, bankers and other lenders of money Investors-Prospective investors, analyze financial statements of that firm to know how safe proposed investment will be. Employee-They serve particularly when payment of bonus depends upon the size of the profits earned. Government-Financial statements reflect the earnings for a particularly period for the purpose of taxation. Research Scholars-who wants to make a study into financial operations of a particular firm. Consumers-Interested in establishment of good accounting control so that cost of Production may be reduced. Managers-Financial statements serve the manager is appraising the performance of the subordinates.
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1. INDUSTRY PROFILE OF NEXTEER COMPANY

Starting its journey from the day when the first car rolled on the streets of Mumbai in 1898, the Indian automobile industry has demonstrated a phenomenal growth to this day. Today, the Indian automobile industry presents a galaxy of varieties and models meeting all possible expectations and globally established industry standards. Some of the leading names echoing in the Indian automobile industry include Maruti Suzuki, Tata Motors, Mahindra and Mahindra, Hyundai Motors, Hero Honda and Hindustan Motors in addition to a number of others. The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 11 million vehicles (including 2 wheeled and 4 wheeled) and exports about 1.5 million every year. It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2010. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 2.6 million units in 2010. In 2010, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea and Thailand. As of 2010, India is home to 40 million passenger vehicles and more than 2.6 million cars were sold in India in 2010 (an increase of 26%), making the country the second fastest growing automo bile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. A chunk of India's car manufacturing industry is based in and around the city of Chennai, also known as the "Detroit of India", with the Indian city accounting for 60 per cent of the country's automotive exports. Gurgaon and Manesar near New Delhi are hubs where all of the Maruti Suzuki cars in India are manufactured. The Chakan corridor near Pune, Maharashtra is another vehicular production hub with General Motors, Volkswagen/Skoda, Mahindra and Mahindra in the process of setting up or al ready set up facilities. Ahmedabad with Tata Motors Nano plant and Halol with General Motors in Gujarat, Aurangabad in Maharashtra, Kolkata in West Bengal are some of the other automotive manufacturing regions around the country.
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India has emerged as one of the world's largest manufacturers of small carsAccording to New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors, Nissan. Toyota, Volkswagen and Suzuki In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011. Similarly, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011. According to Bloomberg L P, in 2009 India surpassed China as Asia's fourth largest exporter of cars. In recent years, India has emerged as a leading center for the manufacture of small cars. Hyundai, the biggest exporter from the country, now ships more than 250,000 cars annually from India. Apart from shipments to its parent Suzuki, Maruti Suzuki also manufactures small cars for Nissan, which sells them in Europe. Nissan will also export small cars from its new Indian assembly line. Tata Motors exports its passenger vehicles to Asian and African markets, and is in preparation to launch electric vehicles in Europe in 2010. The firm is also planning to launch an electric version of its low-cost car Nano in Europe and the U.S. Mahindra & Mahindra is preparing to introduce its pickup trucks and small SUV models in the U.S. market. Bajaj Auto is designing a low-cost car for the Nissan-Renault alliance, which will market the product worldwide. Nissan Renault may also join domestic commercial vehicle manufacturer Ashok Leyland in another small car project. While the possibilities are impressive, there are challenges that could thwart future growth of the Indian automobile industry. Since the demand for automobiles in recent years is directly linked to overall economic expansion and rising personal incomes, industry growth will slow if the economy weakens. In September 2009, Ford Motors announced its plans to setup a plant in India with an annual capacity of 250,000 cars for US$500 million. The cars will be manufactured both for the Indian market and for export. The company said that the plant was a part of its plan to make India the hub for its global production business. Fiat Motors also announced that it would source more than US$1 billion worth auto components from India.
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COMPANY PROFILE:
Opens New Channels for Growth in China Largest Chinese Investment in a U.S. Based Automotive Supplier SAGINAW, Mich. PCM, an entity formed by PCAS and Beijing E-Town International Investment & Development Co., Ltd. (E-Town) an affiliate of the Beijing Municipal Government, today announced the completion of its acquisition of Nexteer Automotive, a global leading supplier in advanced steering and driveline systems, from General Motors. The transaction marks the single largest Chinese investment in the global automotive supplier industry. The transaction is effective on Tuesday, November 30. Saginaw will remain the worldwide headquarters for Nexteer and the key center for engineering, research and development. The current management team will remain in place under the leadership of Robert J. Remenar, CEO. According to Moelis & Company, the investment banker of PCM, the Nexteer business includes global steering and half shaft operations in 22 manufacturing facilities, six engineering facilities and 14 customer support centers in North and South America, Europe and Asia. Under the terms of the agreement, PCM will support the recently approved 5-year labor agreement with the UAW. We are committed to building on the hard work and success of the management team and everyone at Nexteer, said Mr. Zhao Guangyi, Chairman of the Board of E-Town and PCM. As the new ownership, PCM is proud to provide access to continued capital investment that will allow Nexteer to continue its global growth in technology and manufacturing, particularly in the China market.
With a well-capitalized owner committed to growing the business, we can focus all of our resources on our industry-leading engineering and product development, said Robert J. Remenar. This sale was an important move for us to strengthen a diverse, global customer base and build on our current growth trajectory. While we will continue to build in high growth regions around the world, our owner's relationships will open new channels to the dynamic and rapidly growing Chinese automotive market, particularly among Asia-Pacific OEMs and manufacturers globally.
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Nexteer Automotive customers include GM, Fiat, Ford, Toyota, Chrysler, and PSA Peugeot Citroen, as well as automakers in India, China and South America. The Chinese automotive industry is expected to grow at an annual rate of 10 percent, creating tremendous opportunity for parts manufacturers. While the global market for steering is currently largely hydraulic, the industry is fast moving to EPS systems. Nexteer anticipates that EPS will be standard on more than half of the worlds vehicles by 2020. Nexteers product lineup is devoted to the development and commercialization of electric power steering, hydraulic power steering, driveline and columns. In the last 11 years, Nexteer has put 14 million EPS systems on the road globally, saving nearly 800 million gallons of fuel. This transaction represents the culmination of 10 months of analysis and negotiations by PCM with Nexteer, General Motors and the United Auto Workers of America. PCM previously announced the signing of this transaction on July 7, 2010.
ABOUT NEXTEER AUTOMOTIVE

Nexteer Automotive is a multi-billion dollar global steering and driveline business solely dedicated to electric and hydraulic steering systems, steering columns and driveline products for original equipment manufacturers. Its 8,300 employees serve more than 60 customers in every major region of the world. The company has 22 manufacturing plants, six engineering centers and 14 customer service centers strategically located in North and South America, Europe and Asia. Nexteer Automotives customers include GM, Fiat, Ford, Toyota, Chrysler and PSA Peugeot Citroen, as well as automakers in India, China and South America.
ABOUT PCM
PCM is a joint entity formed by Beijing E-Town International Investment & Development Co., Ltd. (E-Town) as the major investor with limited investment from PCAS. E-Town is a state-owned enterprise under Beijing Economic- Technological Development Area (BDA). Serving as the financing and investing arm of the Beijing Municipal Government, E-Town plays an active role in funding investments of strategic importance with high levels of technology. E-Town has been granted over US$15 billion in the form of credit facilities provided by various banks and financial institutions in China for the purpose of financing acquisitions.
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NEXTEER AUTOMOTIVE IN INDIA (BANGALORE)PROFILE

Established Business Type Capital in Dollars Export Business Import Business : 1906 (In India it was established on 1996) : Automotive : $ 2.4 Million : : 20 % 80 % 2 (Bangalore & Gurgaon) in India. Mr. Madhav S Kulkarni $50 Millions 580 Nexteer Automotive Half Shaft, Intermediate Shafts Columns & Pumps Plot No. 98 A, phase 2nd, KIADB, Jigani Industrial area, Anekal, Bangalore- 560105 Website : www.nexteer.com
No. of Production Units : Director & CEO Annual Turnover Employees Brand Products Address : : : : : :
NEXTEER AUTOMOTIV A.BACKGROUND AND INCEPTION OF THE COMPANY:
HISTORY OF NEXTEER AUTOMOTIVE

Nexteer Automotive is formerly known as DELPHI Steering Division.
NEXTEER AUTOMOTIVE OVERVIEW:
World leader in vehicle electronic and transportation components, integrated vehicle sub-systems and modules. 63rd in the 2005 Fortune 500 company list Global manufacturing footprint. Able to follow the customer anywhere in the world. Leader in technology and electronics integration Customer differentiating products. Electronic Systems Integration.
THE EVOLUTION OF DELPHI:

1988: ACG Worldwide Group Structure create 1994: ACG Worldwide established as separate business sector. 1995: ACG Worldwide became Delphi Automotive Systems. 1998: Delphi incorporated as a subsidiary. 1999: Delphi initial Public offering; DPH on NYSE 1999: Delphi becomes a totally independent company. 2002: Delphi Automotive Systems becomes DELPHI. 2009: Delphi Global Steering Business sold to General Motors Corporation.
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Steering Division announces Nexteer Automotive brand in the Automotive Industry.
NATURE OF THE BUSINESS CARRIED:

NEXTEER FOCUS ON: A diverse customer base and a market position as a leader in advanced steering technology. Focus on Electric Power steering, a green technology that offers automakers increased fuel economy and reduced emissions. GLOBAL HEADQUARTERS- Saginaw, USA Manufacturing Plants: 15 Plants (Worldwide) Regional Engineering Centers 6 Local Customer Support centers 14 GLOBAL CUSTOMERS: 60+
REVENUE: US $ 2.1 billion (Year 2008) CUSTOMER FOCUS : Respected and trusted for delivering on promises. INNOVATIVE AGILE PROACTIVE EXPERIENCED : Expert at meeting challenges on design, cost and Quality. : Able to respond quickly with, low-cost Solutions. : Dedicated to solving problems and creating Customer enthusiasm. : Known for providing demonstrated high performance In vehicle-matched systems. GLOBAL : Committed to exceeding customer and Vehicle needs Every time, everywhere.
NEXTEER AUTOMOTIV VISION, MISSION & QUALITY POLICY:

VISION: Be recognized by our customers as their best supplier. MISSION: To be the goal leader in automotive systems and related product lines We must work together with employees suppliers and stake holders to profitably provide high value solutions to our customers.
GROWTH MISSIONS:
Saginaw Manufacturing: Pillar of Strength and Stability
Mexico: Benchmark of Manufacturing Excellence
Europe: EPS Powerhouse
China Nexteer Steering: Premium Technology @ Value Prices
China Driveline: Empowered Growth
India, Brazil & Australia: Entrepreneurial Growth
Saginaw Engineering: Global Technology & Innovation Center
Corp Headquarters: Agile and Global
NEXTEER AUTOMOTIV QUALITY POLICY
We are committed to achieving customer delight by providing innovative products of superior quality at competitive prices through the following initiatives.
Establishing, maintaining and continually improving the effective of our quality management system
Working with our suppliers as partners to continually enhance their capabilities in quality, cost and delivery in order to achieve our objectives.
Developing, motivating and involving employees to create quality culture in the organization.
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PRODUCT PROFILE:
1.HALF SHAFTS:
Half shaft is an assembly of one or two constant velocity universal joints connected to a solid or tubular shaft member. Half shaft(Drive shaft)transmit engine torque to independently suspended wheels. Half shaft are required in front wheel drive cars, four wheel drive vehicles, as well as some rear wheel drive cars with independent rear suspension. These vehicle configurations require that a drive shaft transmits torque to the wheels, move with the suspension and also allows for steering of the front wheels. A Half shaft is a component that satisfies these requirements.
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2. STEERING COLUMN:
Column assembly will be transmitting steering function to wheel from steering. Steering columns are the primary driver-to-vehicle interface. They fill the pivotal role of mechanically connecting the steering wheel and the steering gear. More importantly though, a steering column provides feedback from the road to the driver and influences the vehicles safety, handling, control, comfort, convenience and even styling. As the market moves toward modules and systems with an increased use of electronics, Nexteer Automotive is leading the way.
STEERING COLUMNS STRENGTHS:

Full Product Portfolio featuring all types of Adjustable Columns Leader in Crashworthiness/Safety Leader in Electrical Systems Integration to provide Safety, Comfort & Convenience Features Strong Global Footprint and Diverse Customer Base
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3. HYDRAULIC STEERING PUMP:
Nexteer Automotives pumps are designed for most car and light-duty truck applications. We can supply the complete steering pump module, including brackets, reservoirs and pulleys. Nexteer Automotive pumps can be driven by the accessory belt or directly by the engine. A patented high flow capability allows hydraulic power once considered loss to be directed at other hydraulic systems such as hydraulic engine cooling or anti-roll systems.
NEXTEER AUTOMOTIV 4. IDS (INTERMEDIATE DRIVE SHAFT):
Nexteer Automotive designs and manufactures intermediate drive shafts (IDS) to work in conjunction with the half shaft to improve vehicle handling, and eliminate driveline disturbance issues on front-wheel-drive vehicles with offset transmissions and higher torque and running angles. Use of the IDS on the long side allows the half shafts to be equal length. The resulting equal joint angles between right-hand and left-hand half shafts reduce torque steering vehicles with this architecture, thus improving the overall comfort of the customer.
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STEERING PRODUCTS:
STEERING SYSTEMS:
Active steering Hydraulic Power steering Torque overlay solutions Electric Power Steering (EPS) Column Assist (EPS) EPS Intermediate Shafts Pinion Assist (PEPS) Rack Assist (REPS) Premium EPS Rack & Pinion Gears
DRIVELINE PRODUCTS:
Front-Wheel-Drive Half shaft Rear-Wheel-Drive Half shaft Intermediate Drive Shafts Propeller Shaft Joints
Advanced Technology
STEERING COMPONENTS:
Electronics, Modules, Sub Assemblies
Intermediate Shafts Columns
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STEERING &DRIVELINE CAPABILITIS:
E. AREA OF OPERATION GLOBAL:

During the past 100 years, Nexteer Automotive has grown from being a dedicated supplier to General Motors, primarily in North America and Europe, to serving more than 60 vehicle manufacturers worldwide. Today, Nexteer Automotive has expanded into Eastern Europe, South America and Asia. Headquartered in Saginaw, Mich., Nexteer Automotive employs more than 8,300 people and operates 20 manufacturing plants, 14 customer support centers and six regional engineering centers worldwide. Nexteer Automotives operations are composed of dedicated management teams, globally coordinated engineering resources and a committed production workforce. Working within a High-Performance Culture, employees are focused on exceeding customer expectations through flawless execution, zerodefect quality, on-time delivery and competitive costs.
NEXTEER AUTOMOTIV F. OWNERSHIP PATTERN:

PCM Completes Acquisition of Nexteer Automotive,Opens New Channels for Growth in China Largest Chinese Investment in a U.S. Based Automotive Supplier SAGINAW, Mich. PCM, an entity formed by PCAS and Beijing E-Town International Investment & Development About Nexteer Automotive Nexteer Automotive is a multi-billion dollar global steering and driveline business solely dedicated to electric and hydraulic steering systems, steering columns and driveline products for original equipment manufacturers. Its8,300 employees serve more than 60 customers in every major region of the world. The company has manufacturing plants, six engineering centers and 14 customer service centers strategically located in North and South America, Europe and Asia. Nexteer Automotives customers include GM, Fiat, Ford, Toyota, Chrysler and PSA Peugeot Citroen, as well as automakers in India, China and South America. PCM is a joint entity formed by Beijing E-Town International Investment & Development Co., Ltd. (E-Town) as the major investor with limited investment from PCAS. E-Town is a state-owned enterprise under Beijing Economic-Technological Development Area (BDA). Serving as the financing and investing arm of the Beijing Municipal Government, E-Town plays an active role in funding investments of strategic importance with high levels of technology. E-Town has been granted over US$15 billion in the form of credit facilities provided by various banks and financial institutions in China for the purpose of financing acquisitions.
NEXTEER AUTOMOTIV G.Competitors Information:

Top Nexteer Automotive, LLP Competitors
Companies DENSO CORPORATION Magna International Inc. Robert Bosch
Location Kariya, Aichi Aurora, ON Stuttgart, Germany
Competitive Landscape for Nexteer Automotive, LLP

Demand for auto parts is driven by new car sales, which are strongly affected by interest rates, and by the replacement market. Company profitability depends partly on the difficulty of manufacturing products and partly on demand volume, since many costs are fixed. Small companies can compete successfully by focusing on a small number of products or some highly technical ones. The industry is capital-intensive: average annual revenue per employee is more than $450,000. The structure of the industry is complex, with most smaller companies (referred to as " tier 2" and "tier 3" suppliers) selling parts to larger suppliers (referred to as "tier 1" suppliers), which in turn sell component assemblies or modules to car and truck assemblers such as GM and Ford - collectively called OEMs.
NEXTEER AUTOMOTIV KEY CUSTOMERS:

FIAT MARUTHI SUZUKI FORD TATA NISSAN TOYOTA MAHINDRA HYUNDAI RENAULT
H. INFRASTRUCTURAL FACILITIES:
Infrastructure is the basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function. The nexteer automotive company having several infrastructural facilities those are; Transport facilities. Hospital facilities. Canteen facilities. Parking facilities. Road facilities. Good building and machinery facilities. R &D facilities. Other amenities facilities.
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I.ACHIEVEMENTS/ AWARDS:
The first award, "2003 Silver-Supplier of the Year", was presented to Plant 81 for achieving performance excellence and meeting all of Toyota Kirloskar Motor Pvt. Ltd. (TKML) targets in quality, cost and delivery on supply of half shafts for the Corolla. ISO 14001:2004 Environmental management system registration has been done. QCFI - CCQC -2007 AND CCQC-2009 Awards are received. Excellent award in performance in chapter convention.
World famous HR practice winner Global communication process 2008 Bangalore. Distinguished achievement trust walk reward the rock stars 2009 Bangalore. Stealing shamelessly world famous thought of the day 2010 Bangalore. Additionally, the Bangalore plant was awarded the "Zero PPM Supplier of the Year" award for 2003 as well as certificates for meeting each of their metrics on quality, delivery and cost. "Toyota is well known in the automotive industry for its focus on quality," said Robert J. Remenar, president of Delphi Steering. "Having earned Toyota's recognition for quality is an achievement that the Bangalore enterprise and the entire division can be proud of." While accepting the awards, Khanna remarked, "Being honored by Toyota with this prestigious award recognizes our commitment to competitively deliver quality products to our customers. It is a matter of great pride to be associated with Toyota in India at the beginning of their journey to Excellence." "We appreciate and thank all members of the Bangalore team for their efforts in keeping Zero PPM throughout the year," said Toyota Kirloskar Motor's managing director, A. Toyoshima, in a congratulatory letter to Delphi Bangalore. "We are sure quality assurance will go a long way in building a competitive and strong business."
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J. WORK FLOW MODEL:

Identification of Product Idea/concept Generation Select the best concept Detail design Proto tune modeling Redesign Production Activity Quality check Finished Products Sub Assembly Stage Completion Main Assembly Running Test Quality Assurance Packing & Forwarding
NEXTEER AUTOMOTIV K. FUTURE GROWTH AND PROSPECTS:

In order to position the company in a comfortable financial position, management has initiated major restructuring exercises in expenses front especially in administrative and manpower area which is expected to result in reducing the prices of the standard product. Marketing and sales effects of the company has been reinforced to increase the order book position. Company is working towards a monthly order book target of Rs.50 lakhs a month and a dispatch target of Rs.45 lakhs. We are working towards some major orders in the utility services for sales, supply and services of the products to increase the divisions contribution in sales and profitability of the company. In order to increase the product range, company has taken the stock of products already designed by it in the past either for its own use or for some clients. The products which have a reasonable market scope are under design validation/modification. The products are mostly relating to motor. The introduction of the new products shall increase its top and bottom line of business in short and medium term. Their renewed effort on the new product addition and attention on the existing business will improve the turn over and the profitability of the company and support us in achieving the increased sale and the profitability. The company planning for assembles full steering system and the management planning to expand the plant and new warehouse. The company design their products, process and services for continuous environmental improvement.
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MCKINNEYS 7S FRAME WORK:
The famous U.S. consultant McKinneys and the company developed a holistic approach towards the end of 1970 for diagnosing the cause of the organizational problems and formulated the project for the improvement of the physical and fiscal health of the company. The 7s model is a tool for managerial analysis and action that provides a structure with which the whole of the organization can be considered so that organizational problem can be diagnosed and a strategy may be developed and implemented. The 7s model is a framework for analyzing the organization and their effectiveness as a whole. The 7s diagram illustrate the multiplicity, interconnectedness of the elements that design an organization ability to change. The theory helps to change the managerial thinking about the companies can be improved.
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The 7s framework first appeared in the art of Japanese management by Richard Pascal and anthos in 1981. They had been looking at how Japanese industry had been so successful, at round the same time that tom peters and Robert waterman were exploring what made a company excellent. the 7s model was born at a meeting of the four authors in 1978.It went on to appear in in search of excellence by peters and walterman, and was taken up as a basic tool by the global management consultancy McKinneys its sometimes known as the McKinneys 7s model.
STRUCTURE:
Organizational structure refers to the basic hierarchical procedure in which the organization carries out their business and accompanying baggage that shows whose tasks are divided and integrated. Pascal and athos in their book the art of Japanese management says that organization structure emphasizes that the quality of management depends on the goodness of which amongst all those key managerial dimensions.
ORGANIZATION STRUCTURE:
Nexteer India has ILT Team (India leadership Team) which is led by Mr.MadhavKulkarni, Director & COO Indian Operations and Team consists of all functional Heads. This Team sets Business Objectives & drive entire team to achieve business objectives.
NEXTEER AUTOMOTIV ORGANIZATIONAL STRUCTURE OF NEXTEER AUTOMOTIVES

DIRECTOR
FINANCE
HR / L&D ADMIN & SECURITY IT
PURCHASE PRODUCTION
SUPPLYCHAIN MANAGEMENT
FACILITY
NPD OPERATION EXELLENCE
QUALITY
Mfg Tech & SUBCON OPERATION
TESTING
PLATFORM ENGINEERING
OEM SUPPLY CHAIN
Organizational structure refers to the basic hierarchical procedure in which the organization carries out their business and accompanying baggage that shows whose tasks are divided and integrated. Pascal and athos in their book the art of Japanese management says that organization structure emphasizes that the quality of management depends on the goodness of which amongst all those key managerial dimensions.
NEXTEER AUTOMOTIV
Functional Departments of Nexteer Automotive:

The functional departments of Nexteer Automotive are as follows:
1. HUMAN RESOURCE 2. QUALITY ASSURANCE 3. PURCHASE 4. PRODUCTION & OPERATION
STRATEGY:
Strategies are the actions a company plans in response to or anticipation of changes in its external environment. It also includes purposes, mission, objectives, goals and major action plans & policies.
Grow the Business: Profitable growth is how we all win

Develop and flawlessly execute affordable and compelling technology Sell win-win solutions to our customers Create the best value / most capable supply chain Relentless manufacturing execution Deliver programs, products & services at benchmark quality
Build the Brand: Our brand is the embodiment of how we do business

Live the High Performance Culture Build strong relationships with all stakeholders; Create effective solutions
Focus on Cash: Cash flow is the lifeblood of our business

Meet or exceed unit/functional business plan commitments Optimize cash generation Provide superior returns on investment
Transform the Organization: Our environment is changing & so must we

Become an agile, lean and globally focused company Make Saginaw a sustainable, long-term manufacturing site Ensure that all product lines and sites grow and generate earnings
NEXTEER AUTOMOTIV SKILLS:

The term skill include those characteristics which are developed over a period of time and a results of the interaction of number of factors, performing certain of people in the organization, the top management style, the organization structure etc.
Technical skill:A technical skill refers to the ability and knowledge in using the equipment, technique and procedures involved in performing specific tasks. At Nexteer Automotive Bangalore employees, both supervisor and workers, working in all the production related department posses the technical skill such as engineering skills, computer skills, etc. which are needed to handle work, related tools, machines and equipments.
Human skills:
Human skills consists of the ability to work effectively with other people both as individual and as a member of a group, at Nexteer Automotive Bangalore employees and staff are expected to have human skills so that they can work cooperatively with one other and build effective teams. Spirit, which in turn helps in achieving the organizational goals.
STAFF:
Staffing is the process of acquiring human resources for the organization and assuring that they have the potential to contribute to the achievement of the organizational goals. In the McKinneys 7s framework, the term staff has a specific connotation. The term staff refers to the way organization introduce young recruits into the mainstream of their activities and the manner in which they manage their careers as the new entrants develop into future managers.
NEXTEER AUTOMOTIV The employees demographic are as follows: Major duties and responsibilities of technical staff are as follows:
To maintain safe working condition. Following statutory norms like factories act. Operation and maintenance of equipment. Man Power allotment. Shop floor discipline. Trouble shooting and Problem solving. Decision Making.
Major duties and responsibility of clerical staff are as follows:
To Update and maintain the records. Prepare MIS To maintain proper accounts of organization. Handling day to day activities. Execution of polices
STYLE:
The style if an organization, according to McKinneys framework refers to the reporting relationship between the superiors and the subordinates. It conveys the flow of communication between them. Referring to the organization structure of Nexteer Automotive, it can be said that the company is following the type of Team Work organization. Reporting relationship at Nexteer Automotive follows a formal channel. The communication flows the routes formally laid down in the Organization structure and deliberately associates with the status or the position of the sender and receiver. Both upward and downward communication follows the path of formal channel.
NEXTEER AUTOMOTIV SYSTEMS:

Systems in the 7s framework refer to all the rules, regulations and procedures both format and informal that complement the organization structure. It includes all the processes and information flows that link the organization flows that link the organization together, consisting of management information system, production planning and control systems, cost accounting procedures, capital budgeting systems recruitment, training & development systems, planning & budgeting systems, performance evaluation systems. Management information system at Nexteer Automotive has a welldefined information network. They have fully equipped technical information department, which is called as information system group. The most essential function of this department is to make the strategic & operational level information at all times.
SHARED VALUES:
Shared value called super ordinate goals when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and general work ethic. The value goes beyond, but might well include simple goal statement in determining corporate destiny. To fit the concept, these values must be shared by people in organization. Nexteer Automotive is a company that insist the following some core values, most of these can be found in the companys vision statement as well as quality policy.
SWOT ANALSIS:
The SWOT analysis is a business tool available in the tool box of any business owner. However, running a business forces you to focus on the issues and fires burning today, not tomorrow. A SWOT analysis may sound like a form of mission planning for James Bond. A SWOT simply stands for: Strengths, Weaknesses, Opportunities, and Threats. Each area forms a box on a grid and you fill in each section to help formulate a marketing strategy.
NEXTEER AUTOMOTIVE SWOT ANALYSIS:

The essential need of a corporate is to analyze the Porters SWOT analysis to develop the Effective and efficient strategies. Johnson (2005) pointed that, A SWOT analysis summaries the key issues from the business environment and the strategic capability of an organization that the most likely to impact on strategy development. Most of the organizational strategies are based upon the SWOT analysis where the companies analyze their strengths, weakness, new opportunities and threats. Once it is defined the company requires eliminating the weakness by converting them into strengths, to explore the new Opportunities and reduce the threats.
NEXTEER AUTOMOTIV
The primary strategies of the company changed with respect to the SWOT analysis in order to fulfill the corporate vision. Tatas vision Improving the quality of life is also influenced by the strategies developed to due Over come the weakness and grabs the opportunities. However, the present author tried to explain that the group recent strategies are founded on the analysis, afterward the group tried to go abroad to explore the new markets. The main strengths of the Tata Group are resources and capabilities (People and Raw Material), vast experience and the business model. The opportunities are the new markets, Exports and acquisitions. The group requires overcoming the weakness; such as distribution, value chain innovation and macro environment, in order to serve the global markets with high quality and low price. Within the home country the threats are developing due to the Indias recent mergers of global markets and in global markets threats are already exist. However, as per the theory, to do so and compete in the market place the group required a strong strategic intent and there is a need to configure the operations, resources and capabilities to attain the essential goals.
STRENGTHS
2nd leading automotive supplier globally in revenue Globally manufacturing units High-performance culture values & competencies Leading automotive company in manufacturing of in vehicle electronic and transportation components, integrated vehicle sub-systems and modules Market leader in steering technology Expert at meeting challenges on design, cost and quality. Leader in management practices. Continues improvement of environment through designing the products & services ISO 9000 &140001 company Company as globally scheduling & logistics
Company as global network & as leading automobile industries as their all time customer Sophisticated manufacturing facilities
NEXTEER AUTOMOTIV WEAKNESS Lack of promotion of company products Sub-scale Lack management
OPPORTUNITIES
It has potential to increase its existing market share by carrying out detailed market research for prospective customers. Company has a long time experience, so it can very well know the consumer behaviour and can serve fluently than others. Addition of new features to existing products. R&D trying to built new products with high technology. New market can be created and captured through innovative products.
THREATS
New and stronger competitors entering the Market. Growing bargaining power of customers or supplier.
NEXTEER AUTOMOTIV
3. RESEARCH DESING:
TITLE OF THE STUDY:
Financial Statement Analysis through common size at Nexteer Automotives Bangalore
STATEMENT OF THE PROBLEM:

Nexteer Automotives Bangalore is a leading automobiles Industry, which consists a range of products for a diverse customer base. It has well established factory premises and motivated workforce. The company has taken decision to analyse its financial statement or financial performance for the purpose of effective work environment.
OBJECTIVES OF THE STUDY:

To measure the financial implications in the company. To find out the necessary changes in the existing strategies. To strengthen the manufacturing unit of the company. To evaluate and analyse the competitors. To provide the best to the customers in the market.
SCOPE OF THE STUDY:

1. 2. 3. 4. 5. This study is conducted at, Bangalore The study evaluates the companys financial analysis and implications. This study considers the performance at different levels in the organization. This study gives the recommendations and suggestions to the management. This study finds out the necessary changes in the existing system.
LIMITATIONS OF THE STUDY:

1. The study is restricted to growth schemes. 2. The data and facts collected might be different from the management point of view. 3. The data might not be sufficient for the future growth.
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DATA COLLECTION:
I. PRIMARY DATA
Discussions with the organization guide. Observations in both office and work floor of the organizations
II.
SECONDARY DATA
Companys manuals Help files provided in the software Internet Journals and Magazines
NEXTEER AUTOMOTIV
4. DATA ANALYSIS AND INTERPRETION
Common size statement for the year 20011-2012 Particulars Dec.31, 2012 Percentage change (%)
(In millions of Euros)
Dec.31, 2011
Percentage change (%)
ASSETS
Non-current assets 12,773 4,704 2,573 7,277 489 296 261 557 1,444 22,540 35.48 13.10 7.16 20.27 1.36 0.82 0.72 1.55 4.02 62.81 10,213 4,258 2,337 6,595 447 410 144 554 1,023 18,832 32.89 13.71 7.52 21.23 1.43 1.32 0.46 1.78 3.29 60.64
Goodwill, net Intangible assets, net Property, plant and equipment, net Total tangible and intangible assets Investment in associates Available-for-sale financial assets Other non-current financial assets Non-current financial assets Deferred tax assets Total non-current assets Current Assets Inventories and work in progress Trade accounts receivable Other receivables and prepaid expenses Current financial assets Current and cash equivalents Total current assets
3,349 5,484 1,638 104 2,771 13,346
9.33 15.28 4.56 0.28 7.72 37.18
3,139 4,441 1,212 38 3,389 12,219
10.10 14.30 3.90 0.12 10.91 39.35
Total assets
35,886
100
31,051
100
NEXTEER AUTOMOTIV
Common size statement for the year 20011-2012 Particulars Dec.31, 2012
Dec.31, 2011
LIABILITIES
Equity Share capital Additional paid-in-capital Retained earnings Translation reserve Equity attributable to owners of the parent Non-controlling interests Total equity Total long-term provisions Pensions and other post-employment benefit obligations Other long-term provisions Total long-term provisions Non-current financial liabilities Bonds Other long-term debt Non-current financial liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Current liabilities Trade account payable Accrued taxes and payroll costs Short-term provisions Other current liabilities Short-term debt Total current liabilities 2,196 6,690 6,864 148 15,898 192 16,090 6.11 18.64 19.12 0.41 44.30 0.53 44.83 2,176 6,495 6,133 (19) 14,785 204 14,989 7.00 20.91 19.75 0.06 47.61 0.65 48.27
1,723 680 2,403
4.80 1.89 6.69
1,504 588 2,092
4.84 1.89 6.73
5,540 1,387 6,927 944 235 10,509
15.43 3.86 19.30 2.63 0.65 29.28
3,845 1,165 5,010 957 128 8,187
12.38 3.75 16.13 3.08 0.41 26.36
4,094 2,320 960 803 1,110 9,287
11.40 6.46 2.67 2.23 3.09 25.87
3,432 1,760 876 692 1,115 7,875
11.05 5.66 2.82 2.22 3.59 25.36
Total equity and liabilities
35,886
100
31,051
100
NEXTEER AUTOMOTIV
Dec.31, 2010
ASSETS
Non-current assets Goodwill, net Intangible assets, net Property, plant and equipment, net Total tangible and intangible assets Investment in associates Available-for-sale financial assets Other non-current financial assets Non-current financial assets Deferred tax assets Total non-current assets Current Assets Inventories and work in progress Trade accounts receivable Other receivables and prepaid expenses Current financial assets Current and cash equivalents Total current assets 10,213 4,258 2,337 6,595 447 410 144 554 1,023 18,832 32.89 13.71 7.52 21.23 1.43 1.32 0.46 1.78 3.29 60.64 8,611 3,919 1,965 5,884 75 245 102 347 1,010 15,927 33.59 15.28 7.65 22.95 0.29 0.95 0.39 1.35 3.94 62.13
3,139 4,441 1,212 38 3,389 12,219
10.10 14.30 3.90 0.12 10.91 39.35
2,174 3,071 871 77 3,512 9,705
8.48 11.98 3.39 0.30 13.70 37.86
Total assets
31,051
100
25,632
100
NEXTEER AUTOMOTIV
Common size statement for the year 2011-2010 Particulars LIABILITIES Equity Share capital Additional paid-in-capital Retained earnings Translation reserve Equity attributable to owners of the parent Non-controlling interests Total equity Total long-term provisions Pensions and other post-employment benefit obligations Other long-term provisions Total long-term provisions Non-current financial liabilities Bonds Other long-term debt Non-current financial liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Current liabilities Trade account payable Accrued taxes and payroll costs Short-term provisions Other current liabilities Short-term debt Total current liabilities Dec.31, 2011 Percentage change (%)
Dec.31, 2010
2,176 6,495 6,133 (19) 14,785 204 14,989
7.00 20.91 19.75 0.06 47.61 0.65 48.27
2,102 5,934 4,645 (952) 11,729 131 11,860
8.20 23.15 18.12 3.71 45.75 0.51 46.27
1,504 588 2,092
4.84 1.89 6.73
1,378 375 1,753
5.37 1.46 6.83
3,845 1,165 5,010 957 128 8,187
12.38 3.75 16.13 3.08 0.41 26.36
3,608 1,305 4,913 927 17 7,610
14.07 5.09 19.16 3.61 0.06 29.68
3,432 1,760 876 692 1,115 7,875
11.05 5.66 2.82 2.22 3.59 25.36
2,203 1,266 773 509 1,411 6162
8.59 4.93 3.01 1.98 5.50 24.04
Total equity and liabilities
31,051
100
25,632
100
NEXTEER AUTOMOTIV
Common size statement for the year 2010-2009 Particulars ASSETS Non-current assets Goodwill, net Intangible assets, net Property, plant and equipment, net Total tangible and intangible assets Investment in associates Available-for-sale financial assets Other non-current financial assets Non-current financial assets Deferred tax assets Total non-current assets Current Assets Inventories and work in progress Trade accounts receivable Other receivables and prepaid expenses Asset held for cash Current financial assets Current and cash equivalents Total current assets 245 102 347 1,001 15,918 0.95 0.39 1.35 3.90 62.06 200 113 313 932 16,029 0.80 0.45 1.26 3.75 64.61 8,611 3,919 1,965 5,884 75 33.57 15.27 7.66 22.94 0.29 8,542 3,991 1,970 5,961 281 34.43 16.08 7.94 24.02 1.13 Dec.31, 2010 Percentage change (%)
Dec.31, 2009
2,174 3,071 871 77 3,512 9,731
8.47 11.97 3.49 0.30 13.69 37.93
2,584 3,537 925 2 78 1652 8,778
10.41 14.25 3.72 0.00 0.31 6.65 35.38
Total assets
25,649
100
24,807
100
NEXTEER AUTOMOTIV
Dec.31, 2009
LIABILITIES Equity Share capital Share premium account Retained earnings Translation reserve Equity attributable to owners of the parent Non-controlling interests Total equity Total long-term provisions Pensions and other post-employment benefit obligations Other long-term provisions Total long-term provisions Non-current financial liabilities Bonds Other long-term debt Non-current financial liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Current liabilities Trade account payable Accrued taxes and payroll costs Short-term provisions Other current liabilities Short-term debt Total current liabilities Total equity and liabilities
2,102 5,934 4,673 (952) 11,757 131 11,888
8.19 23.13 18.21 3.71 45.83 0.51 46.34
1,979 5,378 4,503 (954) 11,051 145 11,051
7.97 21.67 18.15 3.84 43.96 0.58 44.54
1,378 375 1,753
5.37 1.46 6.83
1,463 302 1,765
5.89 1.21 7.11
3,608 1,305 4,913 916 17 7,599
14.06 5.08 19.15 3.57 0.06 29.62
3,367 1,272 4,639 888 20 7,312
13.57 5.12 18.70 3.57 0.08 29.47
2,203 1,266 773 509 1,411 6162 25,649
8.58 4.93 3.01 1.98 5.501 24.02 100
2,312 1,320 538 708 1,566 6,444 24,807
9.31 5.32 2.16 2.85 6.31 25.97 100
NEXTEER AUTOMOTIV 1. Chart showing total tangible and intangible assets for 2011-12
Particulars Total tangible and intangible assets
2011(value) 6,595
Percentage change 21.23%
2012(value) 7,277
21.50% 21.00% 20.50% 20.00% 19.50%
21.23%
20.27%
2011 2012
Total tangible and intangible assets
ANALYSIS:
The above chart shows the total tangible and intangible assets of the Nexteer Automotives has decreased from the year 2011-2012 because of reduction of 0.61% in the values of Intangible assets and 0.36% in property, plant and equipment.
INTERPRETATION:
The chart interprets that though the good will of the company increased the other assets decreased so the company needs to increase the value of its tangible and intangible assets in order to meet the liabilities.
NEXTEER AUTOMOTIV 2. Chart showing Total non-current assets for 2011-12
Particulars Total NonCurrent assets
2011(value) 18,832
2012(value) 22,540
62.81% 63.00% 62.50% 62.00% 61.50% 61.00% 60.50% 60.00% 59.50% 2011 2012 Total Non-Current assets 60.64%
ANALYSIS:
The above chart indicates that the total non-current assets have increased to 2.17% from the year 2011-2012 because of decrease in investments in associates at 0.07%, non-current financial assets at 0.23% and financial assets available for sale at 0.5, increase in deferred tax assets at 0.73%.
INTERPRETATION:
The above chart interprets the company is having good non-current assets positions and has increased its total non-current assets to 2.17% this may lead to reduction in their liabilities further.
NEXTEER AUTOMOTIV 3. Chart showing total current assets for 2011-12
Particulars Total current assets
2011(value) Percentage 2012(value) Percentage change change 12,219 39.35% 13,346 37.18%
40.00% 39.00% 38.00% 37.00% 36.00% 2011
39.35%
37.18%
2012
Total current assets
ANALYSIS:
The above graphs shows that the total current assets have reduced by 2.17% for the year 2011-2012 due to reduction in inventories and work-in-progress and cash and cash equivalents though there is an increase in trade account receivables at 0.77% and other receivables and prepaid expenses at 0.66%.
INTERPRETATION:
The Companys current assets reduced by 2.17% due to variations in inventories and work-in-progress and cash and cash equivalents so the company need to improve its asset structure in order to meet the working capital requirement.
NEXTEER AUTOMOTIV 4. Chart showing total equity for 2011-2012
Particulars Total equity
Total equity
2012 48%
2011 52%
ANALYSIS:
The Companys equity structure has reduced by 3.44% from the year 2011 -2012 because of decrease in share capital at 0.89%, additional paid-in capital at 2.27%, retained earnings at 0.63 and increase in translation reserves 0.35%.
INTERPRETATION:
The companys equity structure has come down, if the company needs to be in a good position then it should maintain good equity position and avoid the variations in share capital, additional paid-in capital, retained earnings, translation reserves etc.
NEXTEER AUTOMOTIV 4. Chart showing total non-current liabilities for 2011-2012 Particulars Total noncurrent liabilities 2011(value) 8,187 Percentage change 26.36% 2012(value) 10,509 Percentage change 29.28%
Total non-current liabilities
26.36% 29.28% 2011 2012
ANALYSIS:
The Companys noncurrent liabilities have gone up to 2.92% from the year 2011-2012 due to the changes in bonds 3.05%, other long term debt 0.11%, deferred tax liabilities 0.11% and other non-current liabilities 0.24%.
INTERPRETATION:
The Companys fixed liabilities have gone up because of increase in the value of bonds and other non-current liabilities, the company think of reducing the non-current liabilities.
NEXTEER AUTOMOTIV 6.Chart showing total current liabilities for 2011-2012.
Particulars Total current liabilities
2011(value) 7,875
2012(value) 9,287
Total current liabilities

26.00% 25.90% 25.80% 25.70% 25.60% 25.50% 25.40% 25.30% 25.20% 25.10% 2011 2012 25.36% Total current liabilities 25.87%
ANALYSIS:
The Companys current liabilities have increased to 0.51% from the year 2011-2012 due to the increase of trade account payable at 0.35%, accrued taxes and payroll costs at 0.8%.
INTERPRETATION:
The Company must reduce its current liabilities that are trade account payables and payroll costs in order to maintain level of liabilities as per the assets.
2010(value) Percentage 2011(value) Percentage change change Total tangible and 5,884 22.95% 6,595 21.23% intangible assets
Particulars
23.00% 22.50% 22.00% 21.50% 21.00% 20.50% 20.00%
22.95%
21.23%
2010
2011 Total tangible and intangible assets
ANALYSIS:
The Companys total tangible intangible assets have reduced by 1.72% from the year 2010-2011 because of decrease in goodwill at 0.7%, intangible assets at 1.57% and property, plant and equipment at 1.72%.
INTERPRETATION:
The chart interprets that the companys total tangible intangible assets have been reduced and there is a need to increase the value of its total tangible and intangible assets in order to meet the liabilities.
NEXTEER AUTOMOTIV 8. Chart showing non-currents assets for 2010-2011
Particulars Total Non-Current assets
2010(value) Percentage 2011(value) Percentage change change 15,927 62.13 18,832 60.64%
62.8 62.6 62.4 62.2 62 61.8 Total Non-Current assets 2010 2011 62.13 60.64%
ANALYSIS:
The above chart indicates that the total non-current assets have decreased by 1.49% from the year 2010-2011 due to decrease in deferred tax assets at 0.65% though there is an increase in investment in associates 1.14%, available for sale financial assets at 0.37%.
INTERPRETATION:
The chart interprets that the non-current assets have decreased but the company needs to increase the value of its total non-current assets in order to maintain a good asset structure.
NEXTEER AUTOMOTIV 9.Chart showing current assets for 2010-2011
39.50% 39.00% 38.50% 38.00% 37.50% 37.00% 2010 2011 37.86%
39.35%
ANALYSIS:
The above graphs shows that the total current assets have increased by 1.49% for the year 2010-2011 because of increase in inventories and work in progress at 1.62%, trade account receivables at 2.32% and other receivables and prepaid expenses at 0.51% though there is a decrease in current financial assets and cash and cash equivalents at 0.18% and 2.79%.
INTERPRETATION:
The Companys current assets increased by 1.49% due to trade account receivables and work in progress and other receivables and prepaid expenses so it can be said that company can has a good financial position.
2010(value) 11,860
2011(value) 14,989
Total equity
48.50% 48.00% 47.50% 47.00% 46.50% 2010, 46.27% 46.00% 45.50% 45.00% 2010 2011 2011, 48.27%
ANALYSIS:
The Companys equity structure has increased by 2% from the year 2010-2011 because of increase in retained earnings at 1.63% and non-controlling interest at 0.14%.
INTERPRETATION:
The Company has maintained its equity structure in 2011 which has increased to 2% from 2010 due to increase in retained earnings which leads the company in securing a favourable financial position.
NEXTEER AUTOMOTIV 11. Chart showing total non-current liabilities for 2010-2011
Particulars Total noncurrent liabilities
2010(value) 7,610
2011(value) 8,187

30.00% 29.00% 28.00% 27.00% 26.00% 25.00% 24.00% Total non-current liabilities 2010 29.68% 2011 26.36%
ANALYSIS:
The Companys non-current liabilities have reduced by 3.32% from the year 2010-2011 due to decrease in pensions and other post-employment benefits obligations at 0.53%, noncurrent financial liabilities at 3.03% and deferred tax liabilities at 0.53% and others.
INTERPRETATION:
The Companys non-current liabilities has been coming down due to reduction in pensions and other post-employment benefits obligations, non-current financial liabilities and deferred tax liabilities so the company can have a healthy financial position.
NEXTEER AUTOMOTIV 12. Chart showing total current liabilities for 2010-2011
2010(value) 6,162
2011(value) 7,875
Total current liabilities

25.50% 25.36% 25.00%
24.50% 24.04% Total current liabilities
24.00%
23.50%
23.00% 2010 2011
ANALYSIS:
The Companys current liabilities have increased by 1.32% from the year 2010-2011 in accordance with the increase in trade account receivables at 2.46%, accrued taxes and payroll costs at 0.73% and other current liabilities at 0.24%.
INTERPRETATION:
The Companys current liabilities gone up due to rise in trade account receivables, %, accrued taxes and payroll costs and other even there is an decrease in short term provisions and short term debts so they must reduce its current liabilities to maintain the assets and liabilities equal.
Particulars Total tangible and intangible assets
2009(value) 5,961
2010(value) 5,884
24.50% 24.00% 23.50% 23.00% 22.50% 22.00% 2009 2010 22.94% Total tangible and intangible assets 24.02%
Total tangible and intangible assets
ANALYSIS:
The above chart shows the total tangible and intangible assets of the Nexteer Automotives has decreased to 1.08% from the year 2009-2010 due to decrease in goodwill at 0.86%, intangible assets at 0.86% and property, plant and equipment at 1.08%.
INTERPRETATION:
The Companys total tangible and intangible assets have been decreased but it can maintain the good position in the market if it increases the tangible and intangible assets value.
NEXTEER AUTOMOTIV 14. Chart showing total non-current assets for 2009-2010
Particulars Total noncurrent assets
2009(value) 16,029
2010(value) 15,918
62.06% 2010
2009
64.61%
60.00%
61.00%
62.00%
63.00%
64.00%
65.00%
Total non-current assets
ANALYSIS:
The above chart indicates that the total non-current assets have decreased by2.55% from the year 2009-2010 due to decrease in investments in associates at 0.16% and other financial assets at 0.06% though there is an increase in deferred tax assets.
INTERPRETATION:
The Companys total non-current assets decreased to 2.55% due to decrease in investments in associates and other financial assets therefore the company needs to improve its financial stability.
NEXTEER AUTOMOTIV 15. Chart showing total current assets for 2009-2010
2009(value) 8,778
2010(value) 9,731
2010
37.93%
2009
35.38%
0%
20%
40%
60%
80%
100%
ANALYSIS:
The above graphs shows that the total current assets have increased by 2.13% for the year 2009-2010 due to the increase in Cash and cash equivalents at 7.04% though there is a reduction in other current assets.
INTERPRETATION:
The Companys current assets increased to 2.13% due to the increase in Cash and cash equivalents and thus the company enjoys a steady financial position.
Total equity
2010 51%
2009 49%
ANALYSIS:
The Companys equity structure has increased by 1.8% from the year 2009 -2010 due to increase in share capital at 0.22%, share premium account at 1.46% and retained earnings at 0.06% though there is a decrease in translational reserves.
INTERPRETATION:
The Company has maintained its equity structure in 2010 which has increased to 1.8% from 2009 due to increase in share capital, share premium account and retained earnings.
NEXTEER AUTOMOTIV 17. Chart showing total non-current liabilities for 2009-2010
Particulars Total noncurrent liabilities
2009(value) 7,312
2010(value) 7,599
29.70% 29.60% 29.50% 29.40% 29.30% 2009 29.47%
29.68%
2010
ANALYSIS:
The Companys noncurrent liabilities have gone up by 0.21% from the year 2009 -2010 due to increase in ordinary and convertible bonds at 0.49%, and other non-current financial liabilities at 0.45%.
INTERPRETATION:
The Companys non-current liabilities have been gone up due to increase in ordinary and convertible bonds and other non-current financial liabilities.
NEXTEER AUTOMOTIV 18. Chart showing total current liabilities for 2009-2010
2009(value)
2010(value)
26.00% 25.50% 25.00% 24.50% 24.00% 23.50% 23.00% 2009 2010 Total current liabilities 24.02% 25.97%
ANALYSIS:
The Companys current liabilities have been reduced by 1.95% from the year 2009 -2010 due to reduction in trade account receivables at 0.73%, accrued taxes and payroll costs at 0.39%, other current liabilities at 0.87% and short term debt at 0.81% though there is an increase in short-term provisions at 0.94%
INTERPRETATION:
The Companys current liabilities have come down due to reduction in trade account receivables, accrued taxes and payroll costs and other current liabilities etc so the company is said to be financially stable.
NEXTEER AUTOMOTIV
6. FINDINGS OF THE STUDY:
Based on the analysis the company is having an increase in its assets structure from year to year except in some case. Although the company is increasing its assets meanwhile the liabilities of the company is also increasing. During the analysis the company is lacking behind in gaining tangible and intangible assets from the year 2008-11. The company is having sufficient non-current assets or fixed assets but doesnt have enough current assets in order to meet the working capital. The Finance department is more cautions & always keeps in touch with the higher authority. The organization has sufficient amount of share capital and retained earnings for management. Over all financial performance is high. The total tangible and intangible assets of the company decreased during 2011-2012 from 21.23%-20.27%. The non-current assets has been increased in 2011-2012 from 60.64%-62.81%. The current assets for the year 2011-2012 have been decreased from 39.35%-37.18%. The total equity for the year 2011-2012 has reduction from 48.27%-44.83%. The total non-current liabilities or fixed liabilities have been increased in 2011-2012 from 26.36%-29.28%. The total current liabilities of the company increased in the year 2011-2012 from 25.36%-25.87%. The total tangible and intangible assets of the company decreased during 2010-2011 from 22.95%-21.23%. The non-current assets have been decreased in 2010-2011 from 62.13%-60.64%. The current assets for the year 2010-2011 have been increased from 37.86%-39.35%. The total equity for the year 2010-2011 has increased from 46.27%-48.27%. The total non-current liabilities or fixed liabilities have been decreased in 2010-2011 from 29.68%-26.36%.
NEXTEER AUTOMOTIV
The total current liabilities of the company increased in the year 2010-2011 from 24.04%-25.36%. The total tangible and intangible assets of the company decreased during 2009-2010 from 24.02%-22.94%. The non-current assets have been decreased in 2009-2010 from 64.61%-62.06%. The current assets for the year 2009-2010 have been increased from 35.38%-37.93%.
NEXTEER AUTOMOTIV
CONCLUSIONS OF THE STUDY:
We suggest that the company needs to increase its goodwill and intangible assets in order to maintain the same level of equity in the market. Company is maintaining the same level of trade account receivables, accrued taxes and payroll costs and other current liabilities in every year. Company is trying to reduce it current liabilities and non-current liabilities year by year in order to maintain the balanced structure of assets and liabilities. Venders are related based on their performance with respect to the delivery, quality and price of the product. The entire department in the company is computerized. The management and administration is efficient and employees are also efficient in their work, so it is achieving great progress year by year. The overall financial data shows the company in sound. We suggest that the company can reduce the non-current liabilities like bonds, long term debts, deferred tax liabilities etc for the successful running of business. The company can reduce its current liabilities like trade account payable, accrued taxes and payroll costs and other liabilities in order to run the business smoothly. The company can make 2:1 ratio means; it Can follow double asset structure than liabilities.
NEXTEER AUTOMOTIV 6. SUGGESTIONS AND RECOMMENDATIONS OF THE STUDY: The company can conduct financial analysis or performance every 6months once so that it can come to know about the real picture of the financial statement. The company can implement good financial strategies for efficient utilization of funds. The company can motivate the labor force in each and every department to work loyal and increase the employee morale towards the company. The company is suggested to seek good reputation in the global market. Improve marketing of company product at the local market level. As the product produce Schneider Electric India 90% is experts and only 10% to local market. They should improve the local market needs and capture more market. The company can concentrate on innovative thinking to gain a good market share and should invest capital more on R&D.
There must be training programs have been organized to the employees in
order to increase turnover of the company. The company can make good reserve for retained earnings. The company can increase its equity in order to balance the liabilities. The company can increase its tangible and intangible assets like goodwill, patent and coy rights etc. The company can increase its current assets position in order to meet the daily expenditures. The company is suggested to reduce its debts in order to have a good working capital. The company can reduce the deferred tax liabilities to reduce the burden of liabilities.
NEXTEER AUTOMOTIV
BIBLOGRAPHY:
1. Company profile 2. Company manuals
1. Website www.nexteerautomotives.co.in www.scribd.com www.Yahoo.com www.bing.com www.google.com
2. Books Cost and Financial Analysis B.S.Raman Management Accounting B.S.Raman
NEXTEER AUTOMOTIV
CONSOLIDATED BALANCE SHEET FOR THE YEAR 2012-2011
Particulars
Dec.31, 2012
Dec.31, 2011
ASSETS
Non-current assets 12,773 4,704 2,573 7,277 489 296 261 557 1,444 22,540 10,213 4,258 2,337 6,595 447 410 144 554 1,023 18,832
Goodwill, net Intangible assets, net Property, plant and equipment, net Total tangible and intangible assets Investment in associates Available-for-sale financial assets Other non-current financial assets Non-current financial assets Deferred tax assets Total non-current assets Current Assets Inventories and work in progress Trade accounts receivable Other receivables and prepaid expenses Current financial assets Current and cash equivalents Total current assets
3,349 5,484 1,638 104 2,771 13,346
3,139 4,441 1,212 38 3,389 12,219
Total assets
35,886
31,051
The accompanying notes are an integral part of the consolidated financial statements.
NEXTEER AUTOMOTIV

Particulars Dec.31, 2012 Dec.31, 2011
LIABILITIES
Equity Share capital Additional paid-in-capital Retained earnings Translation reserve Equity attributable to owners of the parent Non-controlling interests Total equity Total long-term provisions Pensions and other post-employment benefit obligations Other long-term provisions Total long-term provisions Non-current financial liabilities Bonds Other long-term debt Non-current financial liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Current liabilities Trade account payable Accrued taxes and payroll costs Short-term provisions Other current liabilities Short-term debt Total current liabilities Total equity and liabilities 2,196 6,690 6,864 148 15,898 192 16,090 2,176 6,495 6,133 (19) 14,785 204 14,989
1,723 680 2,403
1,504 588 2,092
5,540 1,387 6,927 944 235 10,509
3,845 1,165 5,010 957 128 8,187
4,094 2,320 960 803 1,110 9,287 35,886
3,432 1,760 876 692 1,115 7,875 31,051
NEXTEER AUTOMOTIV

Particulars Dec.31, 2011 Dec.31, 2010
ASSETS
Non-current assets Goodwill, net Intangible assets, net Property, plant and equipment, net Total tangible and intangible assets Investment in associates Available-for-sale financial assets Other non-current financial assets Non-current financial assets Deferred tax assets Total non-current assets Current Assets Inventories and work in progress Trade accounts receivable Other receivables and prepaid expenses Current financial assets Current and cash equivalents Total current assets 10,213 4,258 2,337 6,595 447 410 144 554 1,023 18,832 8,611 3,919 1,965 5,884 75 245 102 347 1,010 15,927
3,139 4,441 1,212 38 3,389 12,219
2,174 3,071 871 77 3,512 9,705
Total assets
31,051
25,632
NEXTEER AUTOMOTIV

Particulars LIABILITIES Equity Share capital Additional paid-in-capital Retained earnings Translation reserve Equity attributable to owners of the parent Non-controlling interests Total equity Total long-term provisions Pensions and other post-employment benefit obligations Other long-term provisions Total long-term provisions Non-current financial liabilities Bonds Other long-term debt Non-current financial liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Current liabilities Trade account payable Accrued taxes and payroll costs Short-term provisions Other current liabilities Short-term debt Total current liabilities Total equity and liabilities Dec.31, 2011 Dec.31, 2010
2,176 6,495 6,133 (19) 14,785 204 14,989
2,102 5,934 4,645 (952) 11,729 131 11,860
1,504 588 2,092
1,378 375 1,753
3,845 1,165 5,010 957 128 8,187
3,608 1,305 4,913 927 17 7,610
3,432 1,760 876 692 1,115 7,875 31,051
2,203 1,266 773 509 1,411 6162 25,632
NEXTEER AUTOMOTIV

Particulars ASSETS Non-current assets Goodwill, net Intangible assets, net Property, plant and equipment, net Total tangible and intangible assets Investment in associates Available-for-sale financial assets Other non-current financial assets Non-current financial assets Deferred tax assets Total non-current assets Current Assets Inventories and work in progress Trade accounts receivable Other receivables and prepaid expenses Asset held for cash Current financial assets Current and cash equivalents Total current assets 8,611 3,919 1,965 5,884 75 245 102 347 1,001 15,918 8,542 3,991 1,970 5,961 281 200 113 313 932 16,029 Dec.31, 2010 Dec.31, 2009
2,174 3,071 897 77 3,512 9,731
2,584 3,537 925 2 78 1652 8,778
Total assets
25,649
24,807
NEXTEER AUTOMOTIV

Particulars LIABILITIES Equity Share capital Share premium account Retained earnings Translation reserve Equity attributable to owners of the parent Non-controlling interests Total equity Total long-term provisions Pensions and other post-employment benefit obligations Other long-term provisions Total long-term provisions Non-current financial liabilities Bonds Other long-term debt Non-current financial liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Current liabilities Trade account payable Accrued taxes and payroll costs Short-term provisions Other current liabilities Short-term debt Total current liabilities Total equity and liabilities Dec.31, 2010 Dec.31, 2009
2,102 5,934 4,673 (952) 11,757 131 11,888
1,979 5,378 4,503 (954) 11,051 145 11,051
1,378 375 1,753
1,463 302 1,765
3,608 1,305 4,913 916 17 7,599
3,367 1,272 4,639 888 20 7,312
2,203 1,266 773 509 1,411 6,162 25,649
2,312 1,320 538 708 1,566 6,444 24,807

Financial Statement Analysis Through Common Size at Nexteer Company

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Financial Statement Analysis Through Common Size at Nexteer Company

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NEXTEER AUTOMOTIV

INTRODUCTION TO THE SUBJECT STUDY

Definition of 'Financial Analysis'

NEXTEER AUTOMOTIV NATURE OF FINANCIAL STATEMENTS

Comparative Performance - Comparison between similar firms.

TOOLS OR TECHNIQUES OF ANALYSING AND INTERPRETATION

NEXTEER AUTOMOTIV ATTRIBUTES OF FINANCIAL STATEMENTS

NEXTEER AUTOMOTIV IMPORTANCE OF FINANCIAL STATEMENTS

1. INDUSTRY PROFILE OF NEXTEER COMPANY

ABOUT NEXTEER AUTOMOTIVE

NEXTEER AUTOMOTIVE IN INDIA (BANGALORE)PROFILE

NEXTEER AUTOMOTIV A.BACKGROUND AND INCEPTION OF THE COMPANY:

HISTORY OF NEXTEER AUTOMOTIVE

NEXTEER AUTOMOTIVE OVERVIEW:

THE EVOLUTION OF DELPHI:

NATURE OF THE BUSINESS CARRIED:

NEXTEER AUTOMOTIV VISION, MISSION & QUALITY POLICY:

Mexico: Benchmark of Manufacturing Excellence

Europe: EPS Powerhouse

China Nexteer Steering: Premium Technology @ Value Prices

China Driveline: Empowered Growth

India, Brazil & Australia: Entrepreneurial Growth

Saginaw Engineering: Global Technology & Innovation Center

Corp Headquarters: Agile and Global

NEXTEER AUTOMOTIV QUALITY POLICY

STEERING COLUMNS STRENGTHS:

3. HYDRAULIC STEERING PUMP:

NEXTEER AUTOMOTIV 4. IDS (INTERMEDIATE DRIVE SHAFT):

Intermediate Shafts Columns

STEERING &DRIVELINE CAPABILITIS:

E. AREA OF OPERATION GLOBAL:

NEXTEER AUTOMOTIV F. OWNERSHIP PATTERN:

NEXTEER AUTOMOTIV G.Competitors Information:

Companies DENSO CORPORATION Magna International Inc. Robert Bosch

Location Kariya, Aichi Aurora, ON Stuttgart, Germany

Competitive Landscape for Nexteer Automotive, LLP

NEXTEER AUTOMOTIV KEY CUSTOMERS:

J. WORK FLOW MODEL:

NEXTEER AUTOMOTIV K. FUTURE GROWTH AND PROSPECTS:

MCKINNEYS 7S FRAME WORK:

NEXTEER AUTOMOTIV ORGANIZATIONAL STRUCTURE OF NEXTEER AUTOMOTIVES

HR / L&D ADMIN & SECURITY IT

NPD OPERATION EXELLENCE

Mfg Tech & SUBCON OPERATION

OEM SUPPLY CHAIN

Functional Departments of Nexteer Automotive:

1. HUMAN RESOURCE 2. QUALITY ASSURANCE 3. PURCHASE 4. PRODUCTION & OPERATION

Grow the Business: Profitable growth is how we all win

Build the Brand: Our brand is the embodiment of how we do business

Focus on Cash: Cash flow is the lifeblood of our business

Transform the Organization: Our environment is changing & so must we

NEXTEER AUTOMOTIV SKILLS:

Major duties and responsibility of clerical staff are as follows:

NEXTEER AUTOMOTIV SYSTEMS:

NEXTEER AUTOMOTIVE SWOT ANALYSIS:

STATEMENT OF THE PROBLEM:

OBJECTIVES OF THE STUDY:

SCOPE OF THE STUDY:

LIMITATIONS OF THE STUDY:

4. DATA ANALYSIS AND INTERPRETION

(In millions of Euros)

Percentage change (%)

3,349 5,484 1,638 104 2,771 13,346

9.33 15.28 4.56 0.28 7.72 37.18