Financial Statements

CHAPTER-I
INTRODUCTION
1
Financial statements are prepared primarily for decision making. They play a dominant
role in setting the framework of managerial decisions. But the information provided in the
financial statements is not an end in itself as no meaningful conclusions can be drawn from these
statements alone. However, the information provided in the financial statements is of immense
use in making decisions through analysis and interpretation of financial statements. Financial
analysis the process of identifying the financial strengths and weaknesses of the firm by
properly establishing relationship between the items of the balance sheet and the profit and loss
account. There are various methods or techniques used in analyzing financial statements
financial statements are an important source of information for evaluating the performance and
prospects of firm, if properly analyzed and interpreted these statements can provide valuable
insights into firms performance. Analysis of financial statements is if interest to lenders,
investors, security analyst, manager and others.
Financial statements analysis may be done for a variety of purposes, which may
range from simple analysis of short term liquidity position of the form to a
comprehensive assessment of the strengths and weakness of the firm in various areas, it is
helpful in assessing corporate excellence , judging credit worthiness forecasting bond rating,
evaluating intrinsic value of equity shares predicting bankruptcy and assessing market risk.
Financial statements:
Managers, shareholders, creditors and other interested groups seek answer to the
following question about firm:
What is the financial position of the firm at a given point of time?
How has the firm performed financially over a given period of time?
What have been the sources and uses of cash over a given period?
To answer these questions, accountant prepares two principle statements, the

Balance sheet and the profit and loss account, ancillary statement, the Cash Flow statement.
2
Analysis of financial statement
Analysis refers to the process of critical examination of the financial information

contained in the financial statement in order to understand and make decisions regarding the
operations of the firm. The analysis is basically study of the relationship among various
financial facts and figure as given in a set of financial statements. Complex figures as
given in this statements are dissected\broken up into simple and variable elements
and significant relationship are established between the elements of the same statements are
different financial statements.
This process of dissection, establishing and identifying the financial weaknesses and
strengths of the firm. It is indicative of two aspects of a firm i.e. The profitability and the
financial position and it are what are known as the objectives of the analysis.
Types of Financial Analysis
on the basis on the basis

of material of modus
used operandi
I. On the basis of material used:- According to material used,
Financial analysis can be of two types:
1. External analysis:-
This analysis is done by outsiders who do not have access to the detailed internal
accounting records of the business firm. These outsiders include investors, potential
investors, creditors, potential creditors, government agencies, credit agencies and the
general public.
3
2. Internal Analysis:-
The analysis conducted by persons who have access to the internal accounting
records of a business firm is known as internal analysis. Such an analysis can, therefore,
be performed by executives and employees of the organization as well as government
agencies which have statutory powers vested in them.
II. On the basis of modus operandi:-

According to the method of operation followed in the analysis, financial analysis can also be of
1. Horizontal analysis:-
Horizontal analysis refers to the comparison of financial data of a company for

several years. The figures for this types of analysis are presented horizontally over a
number of columns. The figures of the various year are compared with standard or base
year. This type of analysis is also Dynamic analysis as it is based on the data from year
to year rather than on
2. Vertical Analysis:-
Vertical analysis refers to the study of relationship of the various items in the
financial statements of one accounting period. In the types of analysis is the figures from
financial statement of a year are compared with a base selected from the same years
statement. It is also known as Static analyses.
4
Procedure of Financial Statements Analysis
Broadly speaking there are three steps involved in the analysis of financial statements.
There are:
i) Selection,
ii) Classification,
iii) Interpretation.
The first step involves selection of information (data). The second step involved is the
methodical classification of the data and the third step includes drawing of internees and
conclusions.
The following procedure is adopted for the analysis and Interpretation of financial statements:
1) The analyst should acquaint himself with the principles and postulates of accounting.
2) The extent of analysis should be determined so that the sphere of work may be decided.
3) The financial data given in the statements should be re-organized and re-arranged.
4) A relationship is established among financial statements with the help of tools and
techniques of analysis such as ratios, trends, common size, funds flow etc.,
5) The information is interpreted in a simple and understandable way. The significance and
utility of financial data is explained for helping decision-taking.
6) The conclusions drawn from interpretation are presented to the management in the form
of reports.
5
OBJECTIVES OF FINANCIAL STATEMENTS
Broadly the objective of the Analysis of Financial statement is to understand the
information contained in the financial statement with a view to the weakness and
strengths of the firm and to make forecast about the future prospects of the firm and their
by enabling the financial analyst to take different decision regarding the operation of
the firm. The objectives of the analysis can be identified as:
a. To assess the present profitability and operating efficiency of the firm as a whole as well
as for its different departments
b. To find out the relative importance of different components of the financial position of
the firm.
c. To identify the reasons for change in the profitability\financial position of the firm.
d. To assess the short-term as well as the long-term liquidity position of the firm.
e. To examine the solvency of the firm.
f. To find out the ability of the firm to meet its current obligations.
6
SCOPE OF THE STUDY
Analysis of financial statement can be undertaken by different persons and for

different purposes, therefore, the scope of the AFS may be varying from one situation
to another.
However, the following are some the techniques of the AFS:
a) Comparative financial statements.
b) Common-size financial statements.
c) Trend percentage analysis.
d) Statement of changes in financial position.
e) Cost-volume-profit relations, and
f) Ratio analysis and others.
The last technique i.e. the ratio analysis is the most common, comprehensive and
powerful tool of the AFS. The importance of ratio analysis lies in the fact that it
presents facts on a comparative basis. As such, this study focuses only on this (ratio)
analysis.
7
NEED FOR STUDY
Need of financial statement analysis study to diagnose the information contain in
financial statement. So as to judge the profitability and financial position of the firm
Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.).
Financial analyst analyses the financial statements with various tools of analysis before
commanding upon the financial health of the firm.
Essential to bring out the history of Hero MotoCorp Ltd. (Formerly Hero Honda Motors
Ltd.).
Significance and meaning of the financial statements.
Objectives of the study
The main objective of the project is to analyze the financial statements of the company
using the financial statements viz, comparative and ratio analysis for this purpose of analysis. It
has been utilized the secondary data of the company Hero MotoCorp Ltd. (Formerly Hero Honda
Motors Ltd.)i.e., annual reports from 2007-2008 to 2010-2011 this will help in evaluating the
companys liquidity conditions profitability long term solving and operational efficiency.
8
The following are main objectives of the study.
To determine the financial statements and weakness of the firm.
To determine the short term solving of the firm
To diagnose the information contained to financial statements so as to judge the

profitability and fondness of the firm.
To establish relationship between various figures or the income statement and balance
sheet.
RESEARCH METHODOLOGY
RESEARCH DESIGN
This is a systematic way to solve the research problem and it is important component for
the study without which researches may not be able to obtain the format. A research design is the
arrangement of conditions for collection and analysis of data in a manager that aims to combine
for collection and analysis of data relevance to the research purpose with economy in procedure.
MEANING OF RESEARCH DESIGN
The formidable problem that follows the task of defining the research problem is the
preparation of design of the research project, popularly known as the research design, decision
regarding what, where, when, how much, by what means concerning an inquiry of a research
study constitute a research design. A research design is the arrangement of conditions for
9
collection and analysis of data in a manager that aims to combine for collection and analysis of
data relevance to the research purpose with economy in procedure.
SOURCES OF DATA
Data we collected based on two sources.

Primary data.
Secondary data.
Primary data:
The Primary data are those informations, which are collected afresh and for the first
time, and thus happen to be original in character.
Secondary Data:
The Secondary data are those which have already been collected by some other agency
and which have already been processed. The sources of Secondary data are Annual Reports,
browsing Internet, through magazines.
1. It includes data gathered from the annual reports of Hero MotoCorp Ltd
2. Articles are collected from official website of Hero MotoCorp Ltd.
Limitations of Financial Statements
It is only a study of interim reports.
Financial analysis is based upon only monetary information and non monetary factors are
ignored.
Different people may interpret the same analysis in different ways.
10
It does not consider the changes in prices level.
Changes in accounting procedure by firm may often make financial analysis misleading.
CHAPTER-II
INDUSTRIAL PROFILE
&
COMPANY PROFILE
11
Automobile industry in India
The automobile industry in India is the ninth largest in the world with an annual production of
over 2.3 million units in 2008 In 2009, India emerged as Asia's fourth largest exporter of
automobiles, behind Japan, South Korea and Thailand.
Following economic liberalization in India in 1991, the Indian automotive industry has
demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions.
Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and
Mahindra, expanded their domestic and international operations. India's robust economic growth
led to the further expansion of its domestic automobile market which attracted significant India-
specific investment by multinational automobile manufacturers. In February 2009, monthly sales
of passenger cars in India exceeded 100,000 units.
bryonic automotive industry emerged in India in the 1940s. Following the independence, in
1947, the Government of India and the private sector launched efforts to create an automotive
component manufacturing industry to supply to the automobile industry. However, the growth
was relatively slow in the 1950s and 1960s due to nationalization and the license raj which
hampered the Indian private sector. After 1970, the automotive industry started to grow, but the
growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major
luxury. Japanese manufacturers entered the Indian market ultimately leading to the establishment
of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies.
12
In the 1980s, a number of Japanese manufacturers launched joint-ventures for building
motorcycles and light commercial-vehicles. It was at this time that the Indian government chose
Suzuki for its joint-venture to manufacture small cars. Following the economic liberalization in
1991 and the gradual weakening of the license raj, a number of Indian and multi-national car
companies launched operations. Since then, automotive component and automobile
manufacturing growth has accelerated to meet domestic and export demands.
HISTORY OF THE TWO WHEELERS:
The Britannica Encyclopedia a motorcycle as a bike or tricycle propelled by an internal

combustion engine (or, less often by an electric engine). The automobile was the reply to the 19 th
century reams of self-propelling the horse-drawn bikeriage. Similarly, the invention of the
motorcycle created the self propelling bicycle. The first commercial design was three-wheeler
built by Edward Butler in Great Britain in 1884. This employed a horizontal single-cylinder
gasoline engine mounted between two steer able front wheels and connected by a drive chain to
the rear wheel. The 1900s saw the conversion of many bicycles or pedal cycles by adding small,
centrally mounted spark ignition engine engines. There was then felt the need for reliable
constructions. This led to road trial tests and competition between manufacturers. Tourist
Trophy (TT) races were held on the Isle of main in 1907 as reliability or endurance races. Such
were the proving ground for many new ideas from early two-stroke-cycle designs to
supercharged multivalent engines mounted on aerodynamic, bikebon fiber reinforced bodywork.
INVENTION OF TWO WHEELERS:
The invention of two wheelers is a much-debated issue. Who invented the first
motorcycle? May seem like a simple question, safety, bicycle, i.e., bicycle with front and
rear wheels of the same size, with a pedal crank mechanism to drive the rear wheel. Those
bicycles in turn described from high-wheel bicycles. The high wheelers descended from an
early type of pushbike, without pedals, propelled by the riders feet pushing against the ground.
13
These appeared around 1800, used iron banded wagon wheels, and were called bone-crushers,
both for their jarring ride, and their tendency to toss their riders. Gottiieb Daimler (who credited
with the building the first motorcycle in 1885, one wheel in the front and one in the back,
although it had a smaller spring-loaded outrigger wheel on each side. It was constructed mostly
of wood, the wheels were of the iron-banded wooden-spooked wagon-type and it definitely had a
bone-crusher chassis!
FURTHER DEVELOPMENTS:
Most of the developments during the early phase concentrated on three and four-wheeled
design since it was complex enough to get the machines running with out having to worry about
them falling over. The next notable two-wheeler though was the Hildebrand & Wolf Mueller,
patented in Munich in 1894. In 1895, the French firm of DeDion-button built and engine that
was to make the mass production and common use of motorcycle possible. The first motorcycle
with electric start and a fully modem electrical system; the Hence special from the Indian
Motorcycle Company astounded the industry in 1931. Before World War 1, IMC was the largest
motorcycle manufacturer in the world producing over 20000 bikes per year.
INCREASING POPULARITY:
The popularity of the vehicle grew especially after 1910, in 1916; the Indian motorcycle
company introduced the model H racer, and placed it on sale. During World War 1, all branches
of the armed forces in Europe used motorcycles principally for dispatching. After the war, it
enjoyed a sport vogue until the Great Depression began in motorcycles lasted into the late 20 th
century; weight the vehicle being used for high-speed touring and sport competitions. The more
sophisticated of a 125cc model. Since then, an increasing number of powerful bikes have blazed
the roads.
14
HISTORICAL INDUSTRY DEVELOPMENTS:
Indian is the second largest manufacturer and producer to two wheelers in the World. It
stands next only to Japan and China in terms of the number of V produced and domestic sales
respectively. This destination was achieved due to variety of reason like restrictive policy
followed by the government of India towards the passenger bike industry, rising demand for
personal transport, inefficiency in the public transportation system etc. The Indian two-wheelers
industry made a small beginning in the early 50s when Automobile products of India (API)
started manufacturing scooters in the country. Until 1958, API and Enfield were the sole
producers.
The two wheelers market was opened were opened to foreign competition in the mid-
80s. And the then market leaders-Escorts and Enfield were caught unaware by the onslaught of
the 100cc bikes of the four Indo- Japanese joint ventures. With the availability of fuel-efficiency
low power bikes, demand swelled, resulting in Hero Honda then the only producer of four
stroke bikes (100cc category), gaining a top slot.
The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and
Hero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively.
These two players initially started with assembly of CKD Kits, and later on progressed to
indigenous manufacturing.
The industry had a smooth ride in the 50s, 60s and 70s when government prohibited new
entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80s.
The industry witnessed a steady of 14% leading to a peak volume of 1.9 mn vehicles in 1990.
In 1990 the entire automobile industry saw a drastic fall in demand. This resulted in a
decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles.
Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94. Hero
Honda showed a marginal decline in 1992.
The reason for recession in the sector were the incessant rise in fuel prices, high input costs
and reduced purchasing power due to significant like increased production in 1992, due to new
entrants coupled with recession in the industry resulted in companies either reporting losses or a
fall in profits.
15
CONCLUSION:
The two-wheelers market has had a perceptible shift from a buyers market to a sellers
market with a variety of choice, players will have compete on various fronts viz. pricing,
technology product design, productivity after sale service, marketing and distribution. In the
short term, market shares of individual manufacturers are going to be sensitive to capacity,
product acceptance, pricing and competitive pressures from other manufacturers.
As incomes grow and people grow and people feel the need to own a private means of
transport, sales of two-wheelers will rise. Penetration is expected to increase to approximately to
more than 25% by 2005.
The motorcycle segment will continue to lead the demand for two-wheelers in the
coming years. Motorcycle sale is expected to increase by 20% yoy as compared to 1% growth in
the scooter market and 3% by moped sales respectively for the next two years.
The four-stroke scooters will add new dimension to the two-wheeler segment in the coming
future.
The Asian continent is that largest user of the two-wheelers in the world. This is due to poor
road infrastructure and low per capita income, restrictive policy on bike industry. This is due to
oligopoly between top five players in the segment, compared to thirsty manufacturers in the bike
industry.
Hero Honda motors LTd., is one of the leading companies in the two-wheeler industry.
At present it is the market leader in the motorcycle segment with around 47% the market share
during FY 2000 01. During the year, company posted a 41.15% yoy rise in turnover to Rs.31,
686.5mn in motorcycles which driven by a 35.17% yoy rise in Motorcycle sales volumes. The
company has emerged as one of the most successful players, much ahead of its competitions an
account of its superior and reliable product quality complemented with excellent marketing
techniques. The company has been consistently addressing the growing demand for motorcycles
and has been cumulative customer base of over 4 million customers, which is expected to reach
5min mark with rural and semi-urban segment being the new class of consumers.
16
COMPANY PROFILE
17
CORPORATE PROFILE
Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of
two - wheelers, based in India.
In 2001, the company achieved the coveted position of being the largest two-wheeler
manufacturing company in India and also, the 'World No.1' two-wheeler company in terms of
unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position till
date.
Today, every second motorcycle sold in the country is a Hero Honda bike. Every 30 seconds,
someone in India buys Hero Honda's top-selling motorcycle Splendor.
Vision
The Hero Honda story began with a simple vision the vision of a mobile and an empowered
India, powered by Hero Honda. This vision was driven by Hero Hondas commitment to
customer, quality and excellence, and while doing so, maintaining the highest standards of ethics
and societal responsibilities. Hero Honda believes that the fastest way to turn that dream into a
reality is by remaining focused on that vision.
Strategy
Hero Hondas key strategy has been driven by innovation in every sphere of activity building a
robust product portfolio across categories, exploring new markets, aggressively expanding the
18
network and continuing to invest in brand building activities.
Manufacturing
Hero Honda bikes are manufactured across three globally benchmarked manufacturing facilities.
Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in
northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state
of Uttrakhand.
Technology
In the 1980s Hero Honda pioneered the introduction of fuel-efficient, environment friendly four-
stroke motorcycles in the country. Today, Hero Honda continues to be technology pioneer. It
became the first company to launch the Fuel Injection (FI) technology in Indian motorcycles,
with the launch of the Glamour FI in June 2006.
Products
Hero Honda's product range includes variety of motorcycles that have set the industry standards
across all the market segments. The company also started manufacturing scooter in 2006. Hero
Honda offers large no. of products and caters to wide variety of requirements across all the
segments.
Distribution
The company's growth in the two wheeler market in India is the result of an intrinsic ability to
increase reach in new geographies and growth markets. Hero Honda's extensive sales and service
network now spans close to 4500 customer touch points. These comprise a mix of authorized
dealerships, Service & Spare Parts outlets, and dealer-appointed outlets across the country.
Brand
The company has been continuously investing in brand building utilizing not only the new
product launch and new campaign launch opportunities but also through innovative marketing
initiatives revolving around cricket, entertainment and ground- level activation.
19
Hero Honda has been actively promoting various sports such as hockey, cricket and golf. Hero
Honda was the title sponsor of the Hero Honda FIH Hockey World Cup that was played in Delhi
during Feb-March 2010. Hero Honda also partners the Commonwealth Games Delhi 2010.
2010-11 Performance
Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per cent

Total net operating income of Rs. 19401.15 Crores, growth of 22.32 per cent
Net profit after tax at Rs. 1927.90 Crores
Total dividend of 5250% or Rs. 105 per share including Interin Dividend of Rs. 70 per share on
face value of each share of Rs. 2 each
EBIDTA margin for the year 13.49 per cent
EPS of Rs. 96.54
2009-10 Performance
Total unit sales of 46,00,130 two-wheelers, growth of 23.6 per cent

Total net operating income of Rs. 15860.51 Crores, growth of 28.1 per cent
Net profit after tax at Rs. 2231.83 Crores, growth of 74.1 per cent
Final dividend of 1500% or Rs. 30 per share on face value of each share of Rs. 2
EBIDTA margin for the year 17.4 per cent
EPS of Rs. 111.77, growth of 74.1 per cent
HERO HONDA'S MISSION
Hero Hondas mission is to strive for synergy between technology, systems and human resources,
to produce products and services that meet the quality, performance and price aspirations of its
customers. At the same time maintain the highest standards of ethics and social responsibilities.
This mission is what drives Hero Honda to new heights in excellence and helps the organization
forge a unique and mutually beneficial relationship with all its stake holders.
HERO HONDA'S MANDATE
20
Hero Honda is a world leader because of its excellent manpower, proven management, extensive
dealer network, efficient supply chain and world-class products with cutting edge technology
from Honda Motor Company, Japan. The teamwork and commitment are manifested in the
highest level of customer satisfaction, and this goes a long way towards reinforcing its leadership
status
BOARD OF DIRECTORS
No. Name of the Directors Designation

1 Mr. Brijmohan Lall Munjal Chairman & Whole-time Director
2 Mr. Pawan Munjal Managing Director & C.E.O.
3 Mr. Toshiaki Nakagawa Joint Managing Director
4 Mr. Sumihisa Fukuda Technical Director
5 Mr. Sunil Kant Munjal Non-Executive Director
6 Mr. Suman Kant Munjal Non-Executive Director
7 Mr. Takashi Nagai Non-Executive Director
8 Mr. Yuji Shiga Non-Executive Director
9 Mr. Pradeep Dinodia Non-executive & Independent Director
10 Gen. (Retd.) V. P. Malik Non-executive & Independent Director
11 Mr. Analjit Singh Non-executive & Independent Director
12 Dr. Pritam Singh Non-executive & Independent Director
13 Ms. Shobhana Bhartia Non-executive & Independent Director
14. Mr. M. Damodaran Non-executive & Independent Director
15. Mr. Ravi Nath Non-executive & Independent Director
16. Dr. Anand C. Burman Non-executive & Independent Director
BRIEF PROFILE OF DIRECTORS
MR. BRIJMOHAN LALL MUNJAL
21
Mr. Brijmohan Lall Munjal is the founder Director and Chairman of the Company and
the $ 3.2 billion Hero Group. He is the Past President of Confederation of Indian Industry (CII),
Society of Indian Automobile Manufacturers (SIAM) and was a Member of the Board of the
Country's Central Bank (Reserve Bank of India). In recognition of his contribution to industry,
Mr. Munjal was conferred the Padma Bhushan Award by the Union Government.
Mr. Brijmohan Lall Munjal is currently on the board of the following companies:
No. Name of Company Nature of Office
1 Hero Honda Motors Limited Chairman and Whole-time Director
2 Hero Honda Finlease Limited Chairman and Director
3 Munjal Showa Limited Chairman and Director
4 Easy Bill Limited Director
5 Rockman Industries Limited Director
6 Shivam Autotech Limited Director
KEY MILESTONES OF HERO HONDA

Year Event
1983 Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed
1984 Hero Honda Motors Ltd. incorporated
1985 First motorcycle "CD 100" rolled out
1987 100,000th motorcycle produced
1989 New motorcycle model - "Sleek" introduced
1991 New motorcycle model - "CD 100 SS" introduced
500,000th motorcycle produced
1992 Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder Managing Director,
Mr. Raman Kant Munjal
1994 New motorcycle model - "Splendor" introduced
1,000,000th motorcycle produced
1997 New motorcycle model - "Street" introduced
Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated
1998 2,000,000th motorcycle produced
1999 New motorcycle model - "CBZ" introduced
22
Environment Management System of Dharuhera Plant certified with ISO-14001 by DNV Holland
Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of founder Managing
Director, Mr. Raman Kant Munjal
2000 4,000,000th motorcycle produced
Environment Management System of Gurgaon Plant certified ISO-14001 by DNV Holland
Splendor declared 'World No. 1' - largest selling single two-wheeler model
"Hero Honda Passport Programme" - CRM Programme launched
2001 New motorcycle model - "Passion" introduced
One million production in one single year
New motorcycle model - "Joy" introduced
5,000,000th motorcycle produced
2002 New motorcycle model - "Dawn" introduced
New motorcycle model - "Ambition" introduced
Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and Zaheer Khan as
Brand Ambassadors
2003 Becomes the first Indian Company to cross the cumulative 7 million sales mark
Splendor has emerged as the World's largest selling model for the third calendar year in a row (2000,
2001, 2002)
New motorcycle model - "CD Dawn" introduced
New motorcycle model - "Splendor +" introduced
New motorcycle model - "Passion Plus" introduced
New motorcycle model - "Karizma" introduced
2004 New motorcycle model - "Ambition 135" introduced
Hero Honda became the World No. 1 Company for the third consecutive year.
Crossed sales of over 2 million units in a single year, a global record.
Splendor - World's largest selling motorcycle crossed the 5 million mark
New motorcycle model - "CBZ*" introduced
Joint Technical Agreement renewed
Total sales crossed a record of 10 million motorcycles
23
2005 Hero Honda is the World No. 1 for the 4th year in a row
New motorcycle model - "Super Splendor" introduced
New motorcycle model - "CD Deluxe" introduced
New motorcycle model - "Glamour" introduced
New motorcycle model - "Achiever" introduced
First Scooter model from Hero Honda - "Pleasure" introduced
15 million production milestone achieved

New 'Splendor NXG' launched
New 'CD Deluxe' launched
New 'Passion Plus' launched
New motorcycle model 'Hunk' launched
2008 Hero Honda Haridwar Plant inauguration

New 'Pleasure' launched
Splendor NXG lauched with power start feature
New motorcycle model 'Passion Pro' launched
New 'CBZ Xtreme' launched
CD Deluxe lauched with power start feature
New 'Glamour' launched
2009 Hunk' (Limited Edition) launched
Splendor completed 11 million production landmark
New motorcycle model 'Karizma - ZMR' launched
2010 Silver jubilee celebrations
New model Splendor Pro launched
2011 Launch of new Super Splendor and New Hunk
New licensing arrangement signed between Hero and Honda
24
Launch of new refreshed versions of Glamour, Glamour FI, CBZ Xtreme, Karizma
Crosses the landmark figure of 5 million cumulative sales in a single year
PROMINENT AWARDS TO THE COMPANY

Year Awards & Recognitions
Two-wheeler Manufacturer of the Year award by Bike India magazine.

2011
Adjudged the "Bike Manufacturer of the Year" at the Economic Times ZigWheels Car and Bike
Awards.
- CNBC Awaaz - Storyboard special commendation for "Effective rebranding of a new
corporate entity" by CNBC Awaaz Consumer Awards
- "Most Recommended Two-Wheeler Brand of the Year" award by CNBC Awaaz Consumer
Awards
- Colloquy Loyalty Awards "Innovation in Loyalty Marketing International 2011" for Hero
GoodLife
- "Best Activity Generating Short or Long-Term Brand Loyalty" by the Promotion
Marketing Award of Asia Order of Merit for Hero GoodLife
2010 - Ranked No 1 brand in the Auto (Two-Wheelers) category in the Brand Equity "Most Trusted
Brand" 2011 survey
Company of the Year awarded by Economic Times Awards for Corporate Excellence 2008-09.
CNBC TV18 Overdrive Awards 2010 'Hall of Fame' to Splendor
NDTV Profit Car & Bike Awards 2010 -

Two-wheeler Manufacturer of the Year
CnB Viewers' Choice Two-wheeler of the Year (Karizma ZMR)
Bike Maker of the Year by ET-ZigWheels Car & Bike of the Year Awards 2009
2009 'Two-wheeler Manufacturer of the Year' by NDTV Profit Car & Bike Awards 2009 and Passion
Pro adjudged as CNB Viewers' Choice two-wheeler
Top Indian Company under the 'Automobile - Two-wheelers' sector by the Dun & Bradstreet-
Rolta Corporate Awards
Won Gold in the Reader's Digest Trusted Brand 2009 in the 'Motorcycles' category
25
NDTV Profit Business Leadership Awards 2009 - two-wheeler category
2008 NDTV Profit Business Leadership Award 2008 - Hero Honda Wins the Coveted "NDTV Profit
Business Leadership Award 2008"
TopGear Design Awards 2008 - Hunk Bike of the Year Award
NDTV Profit Car India & Bike India Awards - NDTV Viewers Choice Award to Hunk in
Bike category
IndiaTimes Mindscape and Savile Row ( A Forbes Group Venture ) Loyalty Awards -
Customer and Brand Loyalty Award in Automobile (two-wheeler) sector
Asian Retail Congress Award for Retail Excellence (Strategies and Solutions of business
innovation and transformation) - Best Customer Loyalty Program in Automobile category
NDTV Profit Car India & Bike India Awards - Bike Manufacturer of the year
Overdrive Magazine - Bike Manufacturer of the year

TNS Voice of the Customer Awards:
No.1 executive motorcycle Splendor NXG
No.1 standard motorcycle CD Deluxe
No. premium motorcycle CBZ Xtreme

2007 The NDTV Profit Car India & Bike India Awards 2007 in the following category:
Overall "Bike of the Year" - CBZ X-treme
"Bike of the Year" - CBZ X-treme (up to 150 cc category)
"Bike Technology of the Year" - Glamout PGM FI

"Auto Tech of the Year" - Glamout PGM FI by Overdrive Magazine.
"Bike of the Year" - CBZ X-treme by Overdrive Magazine.
Ranked CBZ X-treme "Bike of the Year" - by B S Motoring Magazine
Most Trusted Company , by TNS Voice of the Customer Awards 2006.
CD Deluxe rated as "No 1 standard motorcycle" by TNS Voice of the Customer Awards 2006.
2006 Adjudged 7th Top Indian Company by Wallstreet Journal Asia (Top Indian Two Wheeler
26
Company).
One of the 8 Indian companies to enter the Forbes top 200 list of worlds most reputed
companies.
No. 1 in automobile industry by TNS Corporate Social Responsibility Award.
Best in its class awards for each category by TNS Total Customer Satisfaction Awards 2006:
Splendor Plus (Executive)
CD Deluxe (Entry)
Pleasure (Gearless Scooters)

Splendor & Passion - Top two models in two wheeler category by ET Brand Equity Survey 2006.
Adjudged 7th Top Indian Company by Wallstreet Journal Asia (Top Indian Two Wheeler
Company).
Top Indian company in the Automobile - Two Wheeler sector by Dun & Bradstreet - American
Express Corporate Awards 2006.
Hero Honda Splendor rated as India's most preferred two-wheeler brand at the Awaaz Consumer
Awards 2006.
Certificate of Export Excellence for outstanding export performance during 2003-04 for two-
wheeler & three- wheelers - Complete (Non SSI) by Engineering Export Promotion Council.
The NDTV Profit Car India & Bike India Awards 2006 in the following category:
Bike Maker of the Year
Bike of the Year - Achiever

Bike of the Year - Achiever (up to 150 cc category)
Bike of the Year - Glamour (up to 125 cc category)
NDTV Viewers' Choice Award to Glamour in the bike category
27
CORPORATE SOCIAL RESPONSIBILITY (CSR)
STAKEHOLDER TIES AT THE GRASSROOTS
Hero Honda Motors takes considerable pride in its stakeholder relationships, especially ones
developed at the grassroots. The Company believes it has managed to bring an economically and
socially backward region in Dharuhera, Haryana, into the national economic mainstream.
An Integrated Rural Development Centre has been set up on 40 acres of land along the Delhi-
Jaipur Highway. The Centre-complete with wide approach roads, clean water, and education
facilities for both adults and children-now nurtures a vibrant, educated and healthy community.
The Foundation has adopted various villages located within vicinity of the Hero Honda factory at
Dharuhera for integrated rural development. This includes:
Installation of deep bore hand pumps to provide clean drinking water.

Constructing metalled roads and connecting these villages to the National Highway (NH
-8).
Renovating primary school buildings and providing hygienic water and toilet facilities.
Ensuring a proper drainage system at each of these villages to prevent water-logging.
Promoting non-conventional sources of energy by providing a 50 per cent subsidy on
biogas plants.
The Raman Munjal Vidya Mandir began with three classes (up to class II) and 55 students
from nearby areas. It has now grown into a modern Senior Secondary, CBSE affiliated co-
educational school with over 1200 students and 61 teachers. The school has a spacious
playground, an ultra-modern laboratory, a well-equipped audio visual room, an activity room, a
well-stocked library and a computer centre.
The Raman Munjal Sports Complex has basketball courts, volleyball courts, and hockey and
football grounds are used by the local villagers. In the near future, sports academies are planned
for volley ball and basket ball, in collaboration with National Sports Authority of India.
28
Vocational Training Centre
In order to help local rural people, especially women, Hero Honda has set up a Vocational
Training Centre. So far 26 batches comprising of nearly 625 women have been trained in
tailoring, embroidery and knitting. The Company has helped women trained at this centre to set
up a production unit to stitch uniforms for Hero Honda employees. Interestingly, most of the
women are now self-employed.
Adult Literacy Mission

This Scheme was launched on 21st September, 1999, covering the nearby villages of Malpura,
Kapriwas and Sidhrawali. The project started with a modest enrolment of 36 adults. Hero Honda
is now in the process of imparting Adult Literacy Capsules to another 100 adults by getting
village heads and other prominent villagers to motivate illiterate adults.
Marriages of underprivileged girls
Marriages are organized from time to time, particularly for girls from backward classes, by the
Foundation by providing financial help and other support to the families.
Rural Health Care

Besides setting up a modern hospital, the Foundation also regularly provides doorstep health care
services to the local community. Free health care and medical camps are now a regular feature in
the Hero Group's community outreach program
KEY POLICIES AN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANY
At Hero Honda, our goal is not only to sell you a bike, but also to help you every step of the way
in making your world a better place to live in. Besides its will to provide a high-quality service to
all of its customers, Hero Honda takes a stand as a socially responsible enterprise respectful of its
environment and respectful of the important issues.
Hero Honda has been strongly committed not only to environmental conservation programmers
but also expresses the increasingly inseparable balance between the economic concerns and the
environmental and social issues faced by a business. A business must not grow at the expense of
mankind and man's future but rather must serve mankind.
29
"We must do something for the community from whose land we generate our wealth."
A famous quote from our Worthy Chairman Mr.Brijmohan Lall Munjal.
Environment Policy
We at Hero Honda are committed to demonstrate excellence in our environmental
performance on a continual basis, as an intrinsic element of our corporate philosophy.
To achieve this we commit ourselves to:
Integrate environmental attributes and cleaner production in all our business processes
and practices with specific consideration to substitution of hazardous chemicals, where
viable and strengthen the greening of supply chain.
Continue product innovations to improve environmental compatibility.
Comply with all applicable environmental legislation and also controlling our
environmental discharges through the principles of "alara" (as low as reasonably
achievable).
Institutionalise resource conservation, in particular, in the areas of oil, water, electrical
energy, paints and chemicals.
Enhance environmental awareness of our employees and dealers / vendors, while
promoting their involvement in ensuring sound environmental management.
Quality Policy
Excellence in quality is the core value of Hero Honda's philosophy.
We are committed at all levels to achieve high quality in whatever we do, particularly in our
products and services which will meet and exceed customer's growing aspirations through:
Innovation in products, processes and services.

Continuous improvement in our total quality management systems.
Teamwork and responsibility.
Safety Policy
Hero Honda is committed to safety and health of its employees and other persons who may
be affected by its operations. We believe that the safe work practices lead to better business
30
performance, motivated workforce and higher productivity.
We shall create a safety culture in the organization by:
Integrating safety and health matters in all our activities.
Ensuring compliance with all applicable legislative requirements.
Empowering employees to ensure safety in their respective work places.
Promoting safety and health awareness amongst employees, suppliers and contractors.
Continuous improvements in safety performance through precautions besides
participation and training of employees.
INTRODUCTION ABOUT PHOENIX DEALER PROFILE (PHOENIX MOTORS)
PHOENIX MOTORS PVT LTD is dealership type of business. PHOENIX MOTORS
PVT LTD. is established on 21 st march 2003. The business is running by only one man.
The owner name is CH. Madhu mathi the firm is located at Habsiguda in Hyderabad.
Generally the sale will be either on cash basis or on institutional basis. Bank like ICICI,
HDFC and CENTURION are providing loans to customers.
Advertising strategy of phoenix motors:
They are giving the ads through newspapers, wall paintings, hoardings and field staff.
They are upgrading sales by introducing the schemes, group bookings, institutional sales and
customer door-to-door activities.
31
Categorization of Staff members:
Staff members are categorized for technicians, 25 members are allotted for field staff, 5
members are recruited for sales for persons, 5 persons are placed for evaluating for spare parts, 5
members are allotted for managerial accounts and another 3 persons for cash transaction and
other members are allotted for remaining work.
Customer relationship:
They entertain the showroom providing a customers huge having pool game, internet
facility and television with home there system. They provide bile maintenance programs on
every week.
According to other dealers PHOENIX motors in first in sales and best in service. They treat
customer, is the very important person at PHOENIX motors customer satisfaction is their motto,
why because, they will satisfied customer is the best advertisement. They provide better value for
the customers and as well as employees also. At PHOENIX motors the customer is the boss.
SALES STRATEGY OF PHOENIX MOTORS:
Average they are selling 25 vehicles per day. PHOENIX motors PVT L.T.D is the A.P s
NO.1 dealership in sales and other activities? It is a QLAD (qualify leader through quality
dealer). At PHOENIX motor they gave the quality service to the customers why because the
cost is long forgotten but the quality is remembered for ever. They treat quality has a...
Q Quest for excellence
U Understanding customers needs
32
A Action to achieve customers appreciation.
L Leadership determined to be a leader
I involving all the people
T Team spirit to work for a common goal
Y Yard sticks to measure programs.
WARRANTY ON PROPRIETARY ITEMS:
Warranty on proprietary items like Tyros, Tubes and Battery etc, will be directly handled
by the respective original manufactures (OEMs) except AMCO for batteries and Dunlop and
Falcon tires and Tubes. In case of any defect in proprietary items, other than the above two
mentioned OEMS the dealers must approach the Brach office dealer of the respective
manufacture. For AMCO batteries and Dunlop and falcon tires, tubes claims will be accepted at
our authorized dealerships per the mutually agreed terms and conditions between HERO
HONDA and of these two OEMs in case the claim is not accepted for invalid reasons. Then the
claim along with the refusal note form the OEM can be sent to the warranty section at gorgon
plan after due to recommendation of the area service engineer. If any other six services or
subsequent paid services is not availed as per the recommended schedule given in the owners
manual. If HERO HONDA recommended engine oil is not used. To normal wear & tear
components like bulbs, electric wiring, filters, spark plug, clutch plates, braded shoes, fasteners,
shim washers, oil seals, gaskets, rubber parts (other than tyre and tube) plastic components,
chain$ sprockets and in case of wheel rim misalignment or bend.
If there is any damage due o modification or fittings of accessories other than ones recommended
by HERO HONDA. If the motor has been used in any competitive events like tracking races or
rallies. If there is any damage to the painted surface due to industrial pollution or other
33
extraneous factors. For clams made for any consequential damage due to any previous
malfunction. For normal phenomenon like noise, vibration, oil seepage, which do not affect the
performance of the motorcycles.
SOCIAL SERVICE ACTIVITIES
PHOENIX motors participate and conduct social service activities. Recently the phoenix
motors organized a BLOOD DONATION CAMP for the trust on 21 st January 2006.they
motivated on the consumers to participated in this camp and also provide certificate for the
customers
THE MARKETED BIKES OF PHOENIX (All Hero Moto Corp.)
34
35
36
37
CUSTOMER RELATIONSHIP:
To entertain the customers the showroom providing a customers huge having pool game,
Internet facility and television with home theatre system. They provide bike maintenance
programs on every week. According to other dealers PHOENIX motors in first in sales and best
in service. They treat customer, is the very important person at PHOENIX motors customer
satisfaction is their motto, why because, the well satisfied customer is the best advertisement.
They provide better value for the customers and as well as employees also. At PHONIX motors
the customer is the boss.
SOCIAL SERVICE ACTIVITIES
38
PHOENIX Motors participates in social service activities. The Phoenix motors organize
a BLOOD DONATION CAMP for the trust in every year. They motivated on the customers to
participated in this camp and also provide Certificate for the customers.
39
CHAPTER-III
REVIEW OF LITERATURE
Financial Statement Analysis
Introduction:-
The term financial analysis also known as analysis and interpretation of financial
statements , refers to the process of determining financial strength and weaknesses of the firm
by establishing strategic relationship between the items of the balance sheet , profit and loss
account and other operative data.
40
Analyzing financial statements by Metcalf and Titard
Financial analysis is a process of evaluating the relationship between component parts of

a financial statement to obtain a better understanding of a firms position and performance by
Myers
The purpose of financial analysis is to diagnose the information contained in financial

statements so as to Jude the profitability and financial soundness of the firm. Just like a doctor
examines his patient by recording his body temperature, blood pressure , ect. Before making his
conclusion regarding the illness and before giving his treatment, a financial analyst analysis the
financial statements with various tools of analysis before commenting upon the financial health
or weaknesses of an enterprise .
The analysis and interpretation of financial statements is essential to bring out the
mystery behind the figures in financial statements. Financial statements analysis is an attempt to
determine the significance and meaning of the financial statement data so that forecast may be
made of the future earnings, ability to pay interest and debt maturities (both current and long
term) and profitability of a sound divided policy.
Types of financial analysis:-
Financial analysis into different categories depending upon
(1) The material used and

(2) The method of operation followed in the analysis or the modus operandi of analysis
Types of Financial Analysis
41
on the basis on the basis
of material of modus
used operandi
III. On the basis of material used:- According to material used,
Financial analysis can be of two types:
3. External analysis:-
This analysis is done by outsiders who do not have access to the detailed internal
accounting records of the business firm. These outsiders include investors, potential
investors, creditors, potential creditors, government agencies, credit agencies and the
general public.
4. Internal Analysis:-
The analysis conducted by persons who have access to the internal accounting
records of a business firm is known as internal analysis. Such an analysis can, therefore,
be performed by executives and employees of the organization as well as government
agencies which have statutory powers vested in them.
IV. On the basis of modus operandi:-
According to the method of operation followed in the analysis, financial analysis can
also be of
3. Horizontal analysis:-
Horizontal analysis refers to the comparison of financial data of a company for

several years. The figures for this types of analysis are presented horizontally over a
42
number of columns. The figures of the various year are compared with standard or base
year. This type of analysis is also Dynamic analysis as it is based on the data from year
to year rather than on
4. Vertical Analysis:-
Vertical analysis refers to the study of relationship of the various items in the
financial statements of one accounting period. In the types of analysis is the figures from
financial statement of a year are compared with a base selected from the same years
statement. It is also known as Static analyses.
Methods of financial analysis:-
The following methods of analysis are generally used:-
1. Comparative Statements.
2. Trend Analysis.
3. Common-Size Statements.
4. Funds flow Analysis .
5. Cash Analysis
6. Ratio Analysis
7. Cost-volume-Profit Analysis
Comparative statements:-
The comparative financial statements are statements of the financial position at

different periods of time the elements of financial position are show in a Comparative
Statement provides an idea of financial position at two or more periods. Generally two
financial statements (balance sheet and income statement) are prepared in comparative
form for financial analysis.
43
THE COMPARATIVE STATEMENT MAY SHOW:-
1. Absolute figures (rupee amounts)

2. Changes in absolute figures i.e increase or decrease in absolute figures.
3. Absolute data in terms of percentages.
4. Increase or decrease in terms of percentages.
THE TWO COMPARATIVE STATEMENTS ARE:-

1. Comparative balance sheet, and
2. Income statement.
(1) Comparative balance sheet:- The comparative balance sheet analysis is the
study of the trend of the same items, group of items and computed items in two or
more balance sheets of the same business enterprise on different dates. The
change in periodic balance sheet items reflect the conduct of a business the
change can be observed by comparison of the balance sheet at the beginning and
at the end of a period and these changes can help in forming an opinion about the
progress of an enterprise.
44
GUIDE LINES FOR INTERPRETATION OF COMPARATIVE BALANCE SHEET:-
While interpreting comparative balance sheet the interpreter is expected to study the
following aspects:-
1. Current financial position and liquidity position
2. Long-term financial position
3. Profitability of the concern.
COMMON SIZE STATEMENT:-
The common-size statements, balance sheet and income statement are show in analytical
percentages. The figures are shown as percentages of total assets, total liabilities and total sales.
The total assets are taken as 100 and different assets are expressed as a percentage of the total
similarly, various liabilities are taken as a part of total liabilities.
COMMON SIZE BALANCE SHEET:-
A statement in which balance sheet items are expressed as the ratio of each asset to total
assets and the ratio of each liability is expressed as a ratio of total liabilities is called common
size balance. The common size balance sheet can be used to compare companies of differing
size. The comparison of figures in different periods is not useful because total figures may be
affected by a number of factors. It is not possible to establish standard norms for various assets.
The trends of figures from year to year may not be studied and even they may not give proper
results.
TREND ANALYSIS OF BALANCE SHEET:-
Trend analysis is Very important tool of horizontal financial analysis. This analysis
enables to known the change in the financial function and operating efficiency in between the
45
time period chosen. By studding the trend analysis of each item we can known the direction of
changes and based upon the direction of changes, the options can be changed.
Trend =Absolute Value of item in the statement understudy *100
Absolute Value of same item in the base statement
RATIO ANALYSIS
INTRODUCTION:
Ratio analysis is one of the techniques of financial analysis where ratios are used as a
yardstick for evaluating the financial condition and performance of a firm. Analysis and
interpretation of various accounting ratios gives skilled and experienced analysis, a better
understanding of the financial condition and performance of the firm than what he could have
obtained only through a perusal of financial statements.
MEANING OF RATIOS:
Ratios are relationships expressed in mathematical terms between figures which are
connected with each other in some manner. Obviously, no purpose will be served by comparing
two sets of figures which are not at all connected with each other. Moreover, absolute figures are
also unfit for comparison.
There are various techniques or models for analyzing information contained in the
financial statements viz. Comparative statements, common size statements, trend percentages,
funds flow analysis, cash flow analysis and ratio analysis. Financial analysis is undertaken by
the management of the firm or by parties outside to it viz. owners, creditors, investors, etc.
Ratio analysis is most widely used and powerful tool or technique of financial analysis.
The term ratio refers to the numerical quantitative relationship between two variables. It shows
arithmetical relationship between two figures, which can be expressed in three ways.
Percentage
Fraction
Proportion
46
A study of the trend of strategic ratios helps the management in planning, forecasting and
decision making. It helps in identifying specific work areas. In short, though the technique
of ratio analysis, the firms solvency, efficiency and profitability can be assessed.
IMPORTANCE OF RATIO ANALYSIS

Ratio analysis helps in simplifying the financial statement for easy understanding.
It helps in drawing out meaningful conclusion from the information provided in the
financial statements which is useful for decision making and framing sound policies for
business in future.
It helps in assessing the financial strength and weakness of the firm and this enhances the
value of the financial statements.
Comparative study of the ratios between the competing firms helps to know the
efficiency of the firm.
It helps the investor to assess the financial position of the concern in which he is going to
invest.
Ratio analysis helps the employees interested in wage increase and fringe benefits that
are related the volume of profits earned by the concern.
Ratio analysis provides data for inter-firm comparison. Ratios highlight the factors
associated with successful and unsuccessful firms. They also reveal strong firms and
weak firms, over valued and under valued firms.
Ratio analysis helps in planning and forecasting. Over a period of time a firm or industry
develops certain norms that may include future success or failure. If relationship changes
in firms data over different time periods, the ratios may provide clues on trends and
future problems.
Ratio analysis also makes possible comparison of the performance of the different
divisions of the firm. The ratios are helpful in deciding about their efficiency or
otherwise in the past and likely performance in the future.
Thus, ratios can assist management in its basic function of forecasting, planning,
coordination, control and communication.
LIMITATIONS OF RATIO ANALYSIS
47
Ratios are of limited use and thus single ratio may not be useful. Better interpretation is
possible with the calculation of number of ratios, which may lead to confusion to the
analyst in making any meaningful conclusion.
Ratios are calculated on the basis of past results, which may not necessarily true
indicators of the future, if the business policies are constantly changing.
Change in accounting procedure may be misleading for ratio analysis. For example,
change in inventory valuation methods from LIFO to FIFO may also influence in the
analysis.
Ratio analysis considers only quantitative aspects, but not qualitative factors.
Ratio analysis may give misleading results If the effects of price level changes are not
considered.
Ratio analysis when interpreted by different people in different way may encounter with
the personal bias or prejudice of the analyst.
Ratios are classified as:

1. LIQUIDITY RATIOS
2. LEVERAGE RATIOS
3. COVERAGE RATIOS
4. ACTIVITY RATIOS (OR) TURNOVER RATIOS
5. PROFITABILTY RATIOS
1. LIQUIDITY RATIOS :
Liquidity ratios is also known as short-term solvency. These ratios are used to measure
the firms ability to meet short term obligations. They compare short-term obligation to short
term (or current) resources available to meet these obligations. From these ratios, much insight
can be obtained into the present cash solvency of the firm and firms ability to remain solvent in
the event of adversity. The creditors of the firm are primarily interested in the short term
solvency of the firm. A firms liquidity should be neither too high nor too low but adequate.
Low liquidity implies the firms inability to meet its maturing obligations. This will
result in bad credit rating, loss of creditors confidence or even technical insolvency, ultimately
leading to the closure of the firm.
48
A very high liquidity position is also bad. It means that the firms current assets are too
high in proportion to maturing obligations. Idle assets earn nothing to the firm. The firms funds
will be unnecessarily locked up in current assets, which if, released can be used to generate
profits to the firm.
The ratios, which measure, and indicate the extent of a firms liquidity, are known as
liquidity ratios or short-term solvency ratios. Commonly used liquidity ratios include.
CURRENT RATIO (OR) WORKING CAPITAL RATIO

QUICK RATIO (OR) ACID TEST RATIO
CASH POSITION RATIO (OR) SUPER STOCK QUICK RATIO
2. LEVERAGE RATIO :
These ratios are also known as capital structure ratios or solvency ratios or capital gearing
ratios. The long-term creditors are more concerned with the firms long-term financial position.
They judge the financial soundness of the firm in the firm in term of the ability to pay interest
promptly as well as making repayment of the principal. The long-term solvency of the firm can
be examined with the help of leverage ratios. They measure the funds supplied by owners as
compared with the financial provided only a small proportion of total financing, the risks of the
business are borne mainly by the creditors.
Firm with low leverage have less risk of loss, but they also have lower expected returns.
Conversely, firm with high leverage ratios have the risk of large losses but also have a chance of
earning huge profits. Therefore, before deciding whether a firm should have debt, it must
balance higher expected returns against increased risks. The most commonly examined leverage:
ratios are
DEBT EQUITY RATIO
PROPRIETORY RATIO
DEBT TO CAPITAL RATIO
GROSS FIXED ASSETS TO SHAREHOLDERS FUNDS
FIXED ASSETS RATIO
3. COVERAGE RATIOS :
49
These ratios indicate the extent to which the interest of the persons entitled to get a fixed
return (i.e. interest or dividend) or a scheduled repayment as per agreed terms are safe.
The higher the cover the better it is. Under this category the following ratios are
calculated.
FIXED INTEREST COVERAGE RATIO
FIXED DIVIDENT COVERAGE RATIO
DEBT SERVICE COVERAGE RATIO
4. ACTIVITY RATIO (OR) TURNOVER RATIO :
The finances obtained by the firm from its owners and creditors will be inverted
in assets, which the firm uses to generate sales and profits. The amount of sales
generated and the profit earned depend on the effective and efficient management of
these assets by the firm. Activity ratios measure the efficiency with which the firm
manages and uses its assets. That is why activity ratios are known as efficiency ratios,
because these ratios are converted or turned over in to sales.
Thus the turnover or activity ratios measure the relationship between sales on one
side and various assets on the other side. Higher the turnover ratio, the better the
profitability and use of capital.
Many activity ratios can be calculated to measure the efficiency of assets utilization.
Following are some of the important activity ratios.
TOTAL ASSETS TURNOVER RATIO

CAPTAIL EMPLOYED TURNOVER RATIO
FIXED ASSETS TURNOVER RATIO
CURRENT ASSETS TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO
STOCK TURNOVER RATIO
DEBTORS TURNOVER RATIO
CREDITORS TURNOVER RATIO
5. PROFITABILITY RATIOS :
50
Profitability is the ability to make profits. Every firm should earn adequate profits in
order to survive in the immediate present and grow in future. In fact, profit is what makes the
business run. Profitability is the net results of large number of policies and decisions.
Profitability ratios give final answers about how efficiency the firm is managed. The
profitability ratios relates profits earned by a firm by its parameters like sales, capital employed
and net worth. But while making ratio analysis relating to profits, it should be remembered that
there are different concepts of profit such as concepts of profit such as contribution, gross profits,
net profits, EBIT, operating profits, profits before depreciation and before tax etc. Profitability
ratios are important for a concern.
These ratios are calculated to enlighten the end results of business activities, which is the
sole criterion of the overall efficiency of a business concern. The following are the important
profitability ratio, which are based on.
1. Sales
2. Investment
GROSS PROFIT RATIO

OPERATING RATIO
OPERATING PROFIT RATIO
NET PROFIT RATIO
RETRUN ON CAPITAL EMPLOYED
RETURN ON SHAREHOLDERS EQUITY
RETURN ON TOTAL ASSETS
EARNING PER SHARE
DIVIDENT PAY OUT RATIO
51
CHAPTER-IV
DATA ANALYSIS AND INTERPRETATION
Comparative Statement Analysis 2011 Of Hero Motocorp Ltd
ABSOLUTE CHANGE
INCREASE/ IN %
March 2011 March 2010 DECREAES
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
SHARE CAPITAL 39.94 39.94 0 0
RESERVES AND SURPLUS 2,916.12 3,425.08 -508.96 -14.86
2,956.06 3,465.02 -508.96 -14.689
LOAN FUNDS
UNSECURED 32.71 66.03 -33.32 -50.462
DEFERRED PAYMENT 1458.45
CREDITS (REFER NOTE 15) 1,458.45
DEFERRED TAX 92.09 57.3305
LIABILITIES 252.72 160.63
TOTAL 4,699.94 3,691.68 1008.26 27.3117
APPLICATION OF FUNDS
FIXED ASSETS
52
GROSS BLOCK 5,538.46 2,750.98 2787.48 101.327
LESS: DEPRECIATION 1,458.18 1,092.20 365.98 33.5085
NET BLOCK 4,699.94 1,658.78 3041.16 183.337
CAPITAL WORK IN 77 159.95
PROGRESS 125.14 48.14
4,205.42 1,706.92 2498.5 146.375
INVESTMENTS 5,128.75 392,571 -387442 -98.694
DEFERRED TAX ASSETS 5.95 7.88 -1.93 -24.492
CURRENT ASSETS, LOANS
AND ADVANCES
INVENTORIES 524.93 436.40 88.53 20.2864
SUNDRY DEBTORS 130.59 108.39 22.2 20.4816
CASH AND -1835.7 -96.25
BANKBALANCES 71.52 1,907.21
OTHER CURRENT ASSETS 48.87 24.82 24.05 96.8977
LOANS AND ADVANCES 728.66 405.76 322.9 79.5791
1,504.57 288,258 -286753 -99.478
LESS: CURRENT
LIABILITIES AND
PROVISIONS7
CURRENT LIABILITIES 5,063.68 3,805.06 1258.62 33.0775
PROVISIONS 1,505 2,882.58 -1377.6 -47.79
6,144.75 4,831.41 1313.34 27.1834
Net current assets 4,640.18 1,948.83 2691.35 138.101
TOTAL 4,699.94 1,948.83 2751.11 141.167
53
INTERPRETATION:
The current assets are in this inventories are increased other current assets are 1504.57
increased and sundry debtors are decreased and cash and bank balances are decreased and loans
and advances are increased by 5063.68.
The current liabilities are in this year increased and provisions are increased in the
working capital net increased for the company.
54
ABSOLUTE CHANGE IN %
March March 31, INCREASE/
31,2010 2009 DECREAES
SOURCES OF FUNDS
SHAREHOLDERS'
FUNDS
RESERVES AND -335.73 -8.927066244
SURPLUS 3,425.08 3,760.81
3,465.02 3,800.75 -335.73 -8.833256594
0
LOAN FUNDS
UNSECURED 66.3 78.49 -12.19 -15.53064085
DEFERRED TAX 7.55 4.932061667
TOTAL 3,691.68 4032.32 -340.64 -8.447742243
APPLICATION OF 0
FUNDS
FIXED ASSETS 0
GROSS BLOCK 2.750.98 2516.27 234.71 9.327695359
LESS: DEPRECIATION 1,092.20 942.56 149.64 15.87591241
NET BLOCK 1,658.78 1573.71 85.07 5.405697365
CAPITAL WORK IN -72.4 -60.06304961
PROGRESS 48.14 120.54
1,706.92 1694.25 12.67 0.747823521
INVESTMENTS 3,925.71 3368.75 556.96 16.53313544
DEFERRED TAX -0.77 -8.901734104
ASSETS 7.88 8.65
CURRENT ASSETS, 0
LOANS AND
ADVANCES
INVENTORIES 436.40 326.83 109.57 33.5250742
SUNDRY DEBTORS 108.39 149.94 -41.55 -27.71108443
CASH AND 1687.64 768.6113768
BANKBALANCES 1,907.21 219.57
55
OTHER CURRENT 18.93 321.3921902
ASSETS 24.82 5.89
LOANS AND 94.5 30.36047035
ADVANCES 405.76 311.26
1,504.57 288,258 -286753.43 -99.47804744
LESS: CURRENT 0
LIABILITIES AND
PROVISIONS7
CURRENT 2279.21 149.3731363
LIABILITIES 3,805.06 1525.85
PROVISIONS 1,026.35 526.97 499.38 94.76440784
4,831.41 2052.82 2778.59 135.3547803
Net current assets 1,948.83 1,039.33 909.5 87.50829862
TOTAL 3.691.68 4032.32 -340.64 -8.447742243
INTERPRETATION:
and advances are increased is 3805.06.
56
ABSOLUTE
March March 31, CHANGE IN
INCREASE/
31,2009 2008 %
DECREAES
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
RESERVES AND SURPLUS 3,760.81 2.946.30 814.51 27.64518
3,80075 2,986.24 377088.76 12627.54
LOAN FUNDS 0
UNSECURED 78.49 132.00 -53.51 -40.5379
DEFERRED TAX 22.49 17.22184

TOTAL 4,032.32 3248.83 783.49 24.11607
APPLICATION OF FUNDS 0
FIXED ASSETS 0
GROSS BLOCK 2,516.27 1938.78 577.49 29.78626
LESS: DEPRECIATION 942.56 782.52 160.04 20.45187
NET BLOCK 1,573.71 1156.26 417.45 36.10347
57
CAPITAL WORK IN -271.9 -69.2845
PROGRESS 120.54 392.44
1,694.25 1548.70 145.55 9.398205
PRE OPERATIVE -16.05 -100

EXPENSES (PENDING
ALLOCATION) - 16.05
INVESTMENTS 3,368.75 2566.82 801.93 31.24216
DEFERRED TAX ASSETS 8065 5.22 8059.78 154401.9
CURRENT ASSETS, 0
LOANS AND ADVANCES
INVENTORIES 326.83 317.10 9.73 3.068433
SUNDRY DEBTORS 149.94 297.44 -147.5 -49.5898
CASH AND 88.48 67.49561

BANKBALANCES 219.57 131.09
OTHER CURRENT 0.2 3.514938

ASSETS 5.89 5.69
1,013.49 936.78 76.71 8.188689
LESS: CURRENT 0
LIABILITIES AND
PROVISIONS7
CURRENT LIABILITIES 1,525.85 1324.98 200.87 15.16023
PROVISIONS 526.97 499.76 27.21 5.444613
2,052.82 1824.74 228.08 12.49931
Net current assets 1,039.33 887.96 151.37 17.04694
TOTAL 4,032.32 3248.83 783.49 24.11607
58
INTERPRETATION:
and advances are increased in 3248.83.
59
ABSOLUTE CHANGE
March 31, INCREASE/ IN %
March 31,2008 2007 DECREAES
SOURCES OF FUNDS
SHAREHOLDERS'
FUNDS
RESERVES AND 516.18 21.24092637
SURPLUS 2,946.30 2,430.12
2,986.24 2,470.06 516.18 20.89746808
LOAN FUNDS 0
-33.17 -
UNSECURED 132.00 165.17 20.08233941
DEFERRED TAX 1.01 0.779441272
TOTAL 3,248.83 2764.81 484.02 17.5064471
APPLICATION OF 0
FUNDS
FIXED ASSETS 0
GROSS BLOCK 1,938.78 1800.63 138.15 7.67231469
-9.27 -
NET BLOCK 1,156.26 1165.53 0.795346323
CAPITAL WORK IN 202.52 106.6343724
PROGRESS 392.44 189.92
1,548.70 1355.45 193.25 14.25725774
PRE OPERATIVE 16.05
EXPENSES (PENDING
ALLOCATION) 16.05 -
INVESTMENTS 2,566.82 1973.87 592.95 30.03997224
DEFERRED TAX 3.84 278.2608696
ASSETS 5.22 1.38
CURRENT ASSETS, 0
LOANS AND
ADVANCES
INVENTORIES 317.10 275.58 41.52 15.0664054
SUNDRY DEBTORS 297.44 335.25 -37.81 -
60
11.27815063
CASH AND 95.31 266.3778647
OTHER CURRENT 2.09 58.05555556
ASSETS 5.69 3.60
LOANS AND -77.6 -
ADVANCES 185.46 263.06 29.49897362
936.78 913.27 23.51 2.574266099
LESS: CURRENT 0
LIABILITIES AND
PROVISIONS7
CURRENT 283.06 27.16715295
LIABILITIES 1,324.98 1041.92
-979.4 -
PROVISIONS 499.76 1479.16 66.21325617
1,824.74 1479.16 345.58 23.36326023
Net current assets 887.96 585.89 302.07 51.55745959
TOTAL 3,248.83 2764.81 484.02 17.5064471
INTERPRETATION:
and advances are increased in 15253.85.
61
March 2011 Change in % March 2010 Change in %

SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
SHARE CAPITAL 39.94 0.84979808 39.94 1.08190691
RESERVES AND SURPLUS 2,916.12 62.0458985 3,425.08 92.7796123
2,956.06 62.8956965 3,465.02 93.8615192
LOAN FUNDS
UNSECURED 32.71 0.69596633 66.03 1.78864079
DEFERRED PAYMENT 31.0312472
CREDITS (REFER NOTE 15) 1,458.45
DEFERRED TAX 5.37708992 4.35119446
TOTAL 4,699.94 100 3,691.68 100.001354
APPLICATION OF FUNDS
FIXED ASSETS
GROSS BLOCK 5,538.46 117.841079 2,750.98 74.5193857
LESS: DEPRECIATION 1,458.18 31.0255025 1,092.20 29.5858469
NET BLOCK 4,699.94 100 1,658.78 44.9335388
CAPITAL WORK IN 2.66258718 1.30403101
PROGRESS 125.14 48.14
4,205.42 89.4781636 1,706.92 46.2375699
62
INVESTMENTS 5,128.75 109.123733 392,571 10634.083
DEFERRED TAX ASSETS 5.95 0.12659736 7.88 0.21345584
CURRENT ASSETS, LOANS
AND ADVANCES
INVENTORIES 524.93 11.168866 436.40 11.8213364
SUNDRY DEBTORS 130.59 2.77854611 108.39 2.9361014
CASH AND 1.52172155 51.6630865
BANKBALANCES 71.52 1,907.21
OTHER CURRENT ASSETS 48.87 1.03980051 24.82 0.67233173
1,504.57 32.0125363 288,258 7808.42067
LESS: CURRENT
LIABILITIES AND
PROVISIONS7
CURRENT LIABILITIES 5,063.68 107.739248 3,805.06 103.072626
PROVISIONS 1,505 32.0216854 2,882.58 78.0842067
6,144.75 130.741031 4,831.41 130.874708
Net current assets 4,640.18 98.7284944 1,948.83 52.7905018
TOTAL 4,699.94 100 1,948.83 52.7905018
Common Size Statement Analysis For Hero Moto Corp.
INTERPRETATIOIN:
63
By Analyzing the Trends of the company from 2010-2011 is in the fluaxative Position and
The result of which both the assets and liabilities is given i.e. In the assets the Fixed assets
was Gradually Decreased and in the year 2011 is was increased to more than 56.38% and in
same case of liabilities also in the year2011 it has a change of more than 48.37%in the long
term liabilities
Hence the company is planning for the short term funding and long term liabilities for the
Stability of the industry year by year
Common Size Statement Analysis Hero Moto Corp.
Change in % Change in %
March 31,2010 March 31, 2009
SOURCES OF FUNDS
SHAREHOLDERS'
FUNDS
SHARE CAPITAL 39.94 1.08189226 39.94 0.99049679
RESERVES AND 92.7783557 93.2666554
SURPLUS 3,425.08 3,760.81
3,465.02 93.8602479 3,800.75 94.2571522
0 0
LOAN FUNDS
UNSECURED 66.3 1.79593031 78.49 1.9465221
DEFERRED TAX 4.35113553 3.79632569
TOTAL 3,691.68 100 4032.32 100
APPLICATION OF 0 0
FUNDS
64
FIXED ASSETS 0 0
GROSS BLOCK 2.750.98 #VALUE! 2516.27 62.4025375
LESS: DEPRECIATION 1,092.20 29.5854462 942.56 23.375129
NET BLOCK 1,658.78 44.9329303 1573.71 39.0274085
CAPITAL WORK IN 1.30401335 2.98934608
PROGRESS 48.14 120.54
1,706.92 46.2369436 1694.25 42.0167546
INVESTMENTS 3,925.71 106.33939 3368.75 83.5437168
DEFERRED TAX ASSETS 7.88 0.21345295 8.65 0.21451671
CURRENT ASSETS, 0 0
LOANS AND ADVANCES
INVENTORIES 436.40 11.8211763 326.83 8.1052595
SUNDRY DEBTORS 108.39 2.93606163 149.94 3.71845488
CASH AND 51.6623868 5.44525236
BANKBALANCES 1,907.21 219.57
OTHER CURRENT 0.67232263 0.14606976
ASSETS 24.82 5.89
1,504.57 40.7556993 288,258 7148.6886
LESS: CURRENT 0 0
LIABILITIES AND
PROVISIONS7
PROVISIONS 1,026.35 27.8017055 526.97 13.0686553
4,831.41 130.872936 2052.82 50.909154
Net current assets 1,948.83 52.7897868 1,039.33 25.7749881
TOTAL 3.691.68 100 4032.32 100
65
INTERPRETATIOIN:
term liabilities
66
Common size statement of Hero Moto corp.
March Change in % March 31, Change in %

31,2009 2008
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
SHARE CAPITAL 39.94 0.99049679 39.94 1.22936565
RESERVES AND SURPLUS 3,760.81 93.2666554 2.946.30 90.6880323
3,80075 9425.71522 2,986.24 91.917398
LOAN FUNDS 0 0
UNSECURED 78.49 1.9465221 132.00 4.06300114
DEFERRED TAX 3.79632569 4.0196009
TOTAL 4,032.32 100 3248.83 100
APPLICATION OF FUNDS 0 0
FIXED ASSETS 0 0
GROSS BLOCK 2,516.27 62.4025375 1938.78 59.6762527
NET BLOCK 1,573.71 39.0274085 1156.26 35.5900432
CAPITAL WORK IN 2.98934608 12.0794255
PROGRESS 120.54 392.44
1,694.25 42.0167546 1548.70 47.6694687
PRE OPERATIVE #VALUE! 0.494024
EXPENSES (PENDING
ALLOCATION) - 16.05
INVESTMENTS 3,368.75 83.5437168 2566.82 79.0075196
DEFERRED TAX ASSETS 8065 200.008928 5.22 0.16067323
CURRENT ASSETS, 0 0
LOANS AND ADVANCES
INVENTORIES 326.83 8.1052595 317.10 9.76043683
SUNDRY DEBTORS 149.94 3.71845488 297.44 9.15529591
CASH AND 5.44525236 4.03499106
OTHER CURRENT 0.14606976 0.17513997
ASSETS 5.89 5.69
67
1,013.49 25.1341659 936.78 28.8343804
LESS: CURRENT 0 0
LIABILITIES AND
PROVISIONS7
PROVISIONS 526.97 13.0686553 499.76 15.3827686
2,052.82 50.909154 1824.74 56.1660659
Net current assets 1,039.33 25.7749881 887.96 27.3316856
TOTAL 4,032.32 100 3248.83 100
INTERPRETATIOIN:
term liabilities
68
Change in % March 31, Change in %
March 31,2008 2007
SOURCES OF FUNDS
SHAREHOLDERS'
FUNDS
SHARE CAPITAL 39.94 1.22936565 39.94 1.4445839
RESERVES AND 90.6880323 87.8946474
SURPLUS 2,946.30 2,430.12
2,986.24 91.917398 2,470.06 89.3392313
LOAN FUNDS 0 0
UNSECURED 132.00 4.06300114 165.17 5.97400906
DEFERRED TAX 4.0196009 4.68675967
TOTAL 3,248.83 100 2764.81 100
APPLICATION OF 0 0
FUNDS
FIXED ASSETS 0 0
GROSS BLOCK 1,938.78 59.6762527 1800.63 65.1267176
NET BLOCK 1,156.26 35.5900432 1165.53 42.1558805
CAPITAL WORK IN 12.0794255 6.86918812
PROGRESS 392.44 189.92
1,548.70 47.6694687 1355.45 49.0250686
PRE OPERATIVE 0.494024 #VALUE!
EXPENSES (PENDING
ALLOCATION) 16.05 -
INVESTMENTS 2,566.82 79.0075196 1973.87 71.3926093
DEFERRED TAX 0.16067323 0.04991301
ASSETS 5.22 1.38
69
CURRENT ASSETS, 0 0
LOANS AND
ADVANCES
INVENTORIES 317.10 9.76043683 275.58 9.96741187
SUNDRY DEBTORS 297.44 9.15529591 335.25 12.1256072
CASH AND 4.03499106 1.29412148
OTHER CURRENT 0.17513997 0.13020786
ASSETS 5.69 3.60
LOANS AND 5.7085166 9.51457786
ADVANCES 185.46 263.06
936.78 28.8343804 913.27 33.0319262
LESS: CURRENT 0 0
LIABILITIES AND
PROVISIONS7
CURRENT 40.7832974 37.6850489
LIABILITIES 1,324.98 1041.92
PROVISIONS 499.76 15.3827686 1479.16 53.4995171
1,824.74 56.1660659 1479.16 53.4995171
Net current assets 887.96 27.3316856 585.89 21.1909679
TOTAL 3,248.83 100 2764.81 100
70
INTERPRETATIOIN:
was Gradually increased and in the year 2007 is was increased to more than 83% and in same
case of liabilities also in the year2008 it has a change of more than 98%in the long term
liabilities
Stability of the industry year by year.
CHAPTER-V
FINDINGS
SUGGESTIONS
CONCLUSION
BIBLIOGRAPHY
71
72
FINDINGS
1. Net working capital and negative for all the three years. So company should thoroughly
look into increase the current assets and decreases the current liabilities.
2. Gross profile 63.33% in 2007-08, 86.26% in 2008-09, 88.79% in 2009-10, 98.79% in
2010-11. So gross profit is constantly over years.
3. The current liabilities more than current assets the working capital is negative
4. A positive working capital means that the company is able to pay off their short-term
liabilities.
5. A negative working capital means that the company currently is unable to meet their
short-term liabilities with their current assets (cash account receivable, inventory).
6. The company has turned up with a minimum profit in the accordance years 2006-2010
and within the remaining financial years & Over all financial Position is satisfactory.
7. The comparative balance sheet of the co-reveals that during the year 2008, fixed assets
increased by RS. 2589.36 Crs. While long term liability from outsides (loans) has
increased by 5663.68 Crs and there is neither increase nor decrease in share capital. The
pattern of investment towards Fixed Assets reveals that long term sources of funds are
utilized for fixed assets.
8. The percentage of current assets to total assets was Increased in 2011. The percentage of
current liabilities to total liabilities has also decreased in 2008.Thus the proportion of
current assets has decreased by 27.82 % ,where as decrease in the current liabilities is
30.54 %in the years the company liquidity position is satisfactory
73
SUGGESTIONS
1. Company may look into increasing various forms of currents assets and decreasing
current liabilities to effective manage working capital requirement.
2. Company may maintain gross profit in and around 98% as seen in 2009-10 in the coming
financial years.
3. The company has to lookout new joint ventures and assignments.
4. To meet the short term requirements the company has to raise short term as well as long
term loans.
5. To attract to the new customers the company has to adapt new procedures and new
technology.
74
CONCLUSION
Even though company is utilizing its own funds there is very need that company should
improve its liquidity position, debtors collection period. Utilization of proper management of its
current assets and current liabilities.
The external debt of the company decreased gradually. This is mainly due to repayment of a
portion of term loans. The another reason for decrease in external debt is due to increase in
reserves and surplus.
The year was 356.24 Crs this indicates there is possible growth of the company in the market.
During 2010-2011 Hero MotoCorp ltd. has under taken research program, modernization and
technology up gradation, for the above said expansion programs it has made use of surplus funds
only and did not go for outsiders debts, which is one of the good long-term financial policy of
Hero MotoCorp ltd.
75
BIBLIOGRAPHY
1. Khan, M Y and P K Jain, Financial Management, Tata McGraw-Hill

Publishing Co., New Delhi, 2007.
2. I M Pandey, Essentials of Financial Management, Vikas Publishing

House Pvt Ltd, New Delhi, 1995.
3. Ramesh, S and A Gupta, Venture Capital and the Indian Financial

Sector, Oxford university press, New Delhi, 1995.
www.googlefinance.com
www.workingcapitalmanagement.com
www.herohonda.com
www.autoindia.com
76

Financial Statements

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Financial Statements

Hochgeladen von

Copyright:

Verfügbare Formate

CHAPTER-I

What is the financial position of the firm at a given point of time?

To answer these questions, accountant prepares two principle statements, the

Analysis refers to the process of critical examination of the financial information

Types of Financial Analysis

on the basis on the basis

I. On the basis of material used:- According to material used,

Financial analysis can be of two types:

II. On the basis of modus operandi:-

Horizontal analysis refers to the comparison of financial data of a company for

Broadly the objective of the Analysis of Financial statement is to understand the

the firm. The objectives of the analysis can be identified as:

e. To examine the solvency of the firm.

Analysis of financial statement can be undertaken by different persons and for

However, the following are some the techniques of the AFS:

a) Comparative financial statements.

b) Common-size financial statements.

c) Trend percentage analysis.

d) Statement of changes in financial position.

e) Cost-volume-profit relations, and

f) Ratio analysis and others.

Need of financial statement analysis study to diagnose the information contain in

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.).

commanding upon the financial health of the firm.

Significance and meaning of the financial statements.

Objectives of the study

To determine the financial statements and weakness of the firm.

To determine the short term solving of the firm

To diagnose the information contained to financial statements so as to judge the

MEANING OF RESEARCH DESIGN

Data we collected based on two sources.

Limitations of Financial Statements

It is only a study of interim reports.

Different people may interpret the same analysis in different ways.

HISTORY OF THE TWO WHEELERS:

The Britannica Encyclopedia a motorcycle as a bike or tricycle propelled by an internal

INVENTION OF TWO WHEELERS:

Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per cent

Total unit sales of 46,00,130 two-wheelers, growth of 23.6 per cent

HERO HONDA'S MISSION

HERO HONDA'S MANDATE

No. Name of the Directors Designation

BRIEF PROFILE OF DIRECTORS

MR. BRIJMOHAN LALL MUNJAL

KEY MILESTONES OF HERO HONDA

15 million production milestone achieved

2008 Hero Honda Haridwar Plant inauguration

New licensing arrangement signed between Hero and Honda

PROMINENT AWARDS TO THE COMPANY

Two-wheeler Manufacturer of the Year award by Bike India magazine.

CNBC TV18 Overdrive Awards 2010 'Hall of Fame' to Splendor

NDTV Profit Car & Bike Awards 2010 -

Overdrive Magazine - Bike Manufacturer of the year

No.1 standard motorcycle CD Deluxe

No. premium motorcycle CBZ Xtreme

"Bike of the Year" - CBZ X-treme (up to 150 cc category)

"Bike Technology of the Year" - Glamout PGM FI

"Bike of the Year" - CBZ X-treme by Overdrive Magazine.

Ranked CBZ X-treme "Bike of the Year" - by B S Motoring Magazine

Most Trusted Company , by TNS Voice of the Customer Awards 2006.

No. 1 in automobile industry by TNS Corporate Social Responsibility Award.

Pleasure (Gearless Scooters)

Bike of the Year - Achiever

NDTV Viewers' Choice Award to Glamour in the bike category