BALANCE SHEET OF TATA STEEL LTD.

Attribute

Mar'11
(Rs. In Crores)

Mar'10
(Rs. In Crores)

Sources of funds

Owner's fund:
Equity share capital Share application money Preference share capital Reserves & surplus
959.41 178.20 45,807.02 887.41 36,281.34

Loan funds:
Secured loans Unsecured loans Total
3,509.20 26,291.94 2,259.32 22,979.88

76,745.77

62,407.95

Uses of funds
Fixed assets: Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments
29,815.64 11,041.16 18,774.48 46,564.94 22,306.07 10,143.63 12,162.44 3,843.59 44,979.67

Net current assets:

Current assets, loans & advances
24,212.30 13,425.27

Attribute

Mar'11
(Rs. In Crores)
12,805.95 11,406.35 -

Mar'10
(Rs. In Crores)
12,003.02 1,422.25 -

Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total

76,745.77

62,407.95

Notes:
Book value of unquoted investments Market value of quoted investments Contingent liabilities
45,899.97 4,914.95 12,479.85 44,243.24 4,397.79 13,184.61

BALANCE SHEET OF BHUSHAN STEEL LTD.

Attribute Mar'11
(Rs. In Crores)

Mar'10
(Rs. In Crores)

Sources of funds

Owner's fund
Equity share capital Share application money Preference share capital Reserves & surplus
42.47 68.69 5,785.25 42.47 36.68 3,912.52

Loan funds

Attribute Secured loans

Mar'11
(Rs. In Crores)
12,391.85

Mar'10
(Rs. In Crores)
8,326.96

Unsecured loans

4,200.78

3,077.15

Total
Use of Funds: Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments

22,489.04

15,395.78

14,424.40 1,858.11 12,566.29 7,393.21 277.73

3,685.89 1,606.57 2,079.32 11,109.33 370.04

Net current assets

Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written
5,024.95 2,773.14 2,251.80 3,774.19 1,937.10 1,837.08

Total
Notes:
Book value of unquoted investments Market value of quoted investments

22,489.04

15,395.78

177.87 1.35

164.18 151.73

Attribute Contingent liabilities Number of equity sharesoutstanding (Lacs)

Mar'11
(Rs. In Crores)
6,147.69 2,123.28

Mar'10
(Rs. In Crores)
4,047.07 424.72

ANALYSIS OF BALANCE SHEET

Comparison with Competitors:
In year 2010 the balance sheet of Tata Steel Ltd shows a total liabilities of 62,407.95 crores where as balance sheet of Bhushan Ltd shows a balance of 15,395.78 crores only. There is a very wide difference between both the companies, every item has a very range in both the companies. The equity share capital of Tata ltd is 887.41 crores whereas in Bhushan ltd it is 42.47 crores only, which is very few. The brand value of Tata ltd is very higher then Bhushan ltd, therefore it equity share capital. Bhushan ltd has preference share capital which provides its a initial support but in Tata ltd there is no preference share capital. Reserve and surplus of Tata steel ltd is 36,281.24 crores and Bhushan ltd having 3,912.52 crores here also there is a very big difference. This difference beats the Bhushan limited. Like this the secured and unsecured loan of Tata Ltd is more than Bhushan ltd. Assets of Tata limited (62,407.95 crores) has also more than the assets of Bhushan limited (15,395.78). The Investment, fixed asset and current assets are more liable then Bhushan Ltd. But that not mean Bhushan ltd is bad company its current ratio, quick ratio, inventory ratios, stock turnover ratio are also very good, that competes the Tata ltd very hardly. In 2011 the liability of Tata ltd. was increased by rs.14,337.82 crores which is a very good improvement from the last year and Bhushan ltd. is increased by rs. 7,903.26 crores that was a very big improvement. This shows how a small firm can maximum utilise its resources in a good and better way. Like this the asset side of both the companies will also increased and Bhushan ltd shows how to work in a less capital, less investment and less labours but work done is more and the profit is more than its previous records. Naturally the profit of Tata ltd is more but the efficiency level of Bhushan ltd was more than that. The report of Bhushan ltd is more positive than Tata ltd. For any firm positive attitude is more important than more profit or in other words more rate of return is compulsory for a successful business.

ANALYSIS OF RATIOS

Comparison with its Previous Year Records:

1. Profitibility Ratio: A. Gross profit ratio= gross profit/sales*100 2010= 31.36% 2011= 35.09% The ratio of gross profit with more than the last year means the company increases its sales and reduces his cost of goods sold.

B. Net profit ratio= net profit/sales*100 2010= 19.96% 2011= 22.81% The net profit ratio will also increase means the company reduces its expenses and maximises its sales C. Return on capital employed= net profit before interest and tax/capital employed 2010= 13.45 2011= 14.68 The amount of return on capital employed will also be increased means net profit before interest and tax will also be increased and capital employed must be reduced. Then only it is good other wise there will be a big problem.

2. Liquidity Ratio: A. Current ratio= current assets/current liabilities 2010= 1.12 2011= 1.89 The rate of current ratio was also increased from the last year means current assets was increased and current liabilities was decreased.

B. Liquid ratio= liquid assets/current liabilities 2010= 0.76 2011= 1.58 This ratio was also increased means the liquidity in assets was increased, which is good for business and this ratio must be increased each year for running a good and successful business.

3. Efficiency ratio: A. Debtors turnover ratio= sales/average debtors 2010= 46.58 2011= 67.93 Debtors turnover ratio was increased from the last year and it is good but with in a limit, if it is increased so much then that is not good. Here 21% is increased so that is ok but company has to view his previous records and trying to reduce this. B. Average collection period= (365/12/52)/debtors turnover ratio 2010= 7.8 days 2011= 5.37 days Average collection period is calculated in days/months/weeks and it is calculating for counting the days of the receiving the money. It is less from last year which is a good news and it is very good for Tata steel limit. Money must be collected from time to time. C. Stock turnover ratio= cost of goods sold/average inventory 2010= 10.90 2011= 8.07 Stock turnover ratio helps in calculating the record of the goods sold with the average stock level and rotation of good is fast when rate is high. It is decreased from last year, at present it is fine but company needed to check this and maintain constantly. D. Days sales in inventory= 365/stock turnover ratio 2010= 33.48 days 2011= 45.22 days It calculates the rate of stock in whole year on the daily basis, weekly basis and monthly basis, Here it is increased means the rate of sale of good was increased from the last year and that was a good for the firm, its rate of inventory was increased.

E. Fixed asset turnover ratio= sales/fixed asset 2010= 1.12 2011= 0.98 Fixed assets turnover ratio will be reduced from the previous year and it is good news because the value of sale of the firm is increased and firm must trying to increase its sale from time to time.

4. Capital structure: A. Debt equity ratio= debt/equity 2010= 0.64 2011= 0.68 Debt equity ratio will provide the data of debt with division to equity and both the year it is constant, it is good for business. B. Gearing ratio= debt/debt+equity 2010= 0.52 2011= 0.47 As the name is gearing ratio it provides the gear to the capital of the business and it is less from the last year with some extent.

5. Investment ratio: A. Earnings per share= net profit after tax-preference dividend/number of shares 2010= 46.12 2011= 71.58 It is increased from the last year and it is good and necessary for the firm that the rate of its shares will rise and rise from time to time.

According to all of this ratios we said that the Tata Steel Ltd has in progress from the last year and its competitors and if it is maintaining its records like this then it covers the whole market rule everywhere.