1.

1 INTRODUCTION
Finance is regarded as the life blood of a business enterprise. In the modern oriented economy, finance is one of the basic foundations of all kinds of economics activities.

Finance statements are prepared primarily for decision-making. They play a dominant role in setting the frame work and managerial conclusion and can be drawn from these statements.

However, the information provided in the financial statement is of immense use in decision-making through analysis and interpretation of financial statements.

As said earlier finance is said to be life blood of any business. Every business under taking needs finance for its smooth working. It has to raise funds from the cheapest and risky source to utilize this in most eff ective manner. So every company will be interested in knowing its financial performance. The project entitled Ratio analysis of Ashok Leyland ltd throws light on overall financial performance of the company.

1.4 SCOPE OF THE STUDY:

The study covers the financial performance of the Ashok Leyland. The study is made by making comparison of five year of it operation. The study aims to reveal where the stands in respect to liquidity and an effective use of asset.

1.3 OBJECTIVES: PRIMARY OBJECTIVE:

A study on Ratio Analysis with reference to Ashok Leyland ltd.

SECONDARY OBJECTIVE:
To know the financial position of the Ashok Leyland. To know the Liquidity and Profitability position of the company. To know the financial strength and weakness of the company.

1.6 Limitation of the study:

The study is based on secondary data. The time span was limited only a period of five years. The study suffers all the limitation of ratio analysis, such as lack of adequate change in income, price level changes etc.

1.2 NEED OF THE STUDY:

Financial statements give a consolidated picture of the financial results and the factual accounts of physical operation in a financial firm. The various financial statem4ents, emanating from the dairy operations and accounts are balance sheet and income and expenditure statement. Management should be, particularly interested in knowing the financial strengths of the firm to make their best use and to spot out the financial weakness of the dairy to take suitable corrective action. Apart from the management there are others parties like owners, creditors, suppliers, investors, etc. restore confidence in those firms that show steady growth in earnings. As such they concentrated on the analysis of the dairys present and future profitability.

CHAPTER-1

1.5 METHODOLOGY:
The study is based on secondary data. Data pertaining behavior of liquidity, solvency and profitability are collected from the Balance sheet and Profit & Loss account of the Ashok Leyland.

SOURCE OF THE DATA:

The source of the data that the Researcher used in the research is Secondary Data.

SECONDARY DATA:
The researcher used only secondary data for his research study. The secondary data were already available data which was collected through different sources.

Tools and Techniques:

RATIO ANALYSIS
Liquid ratio. Activity ratio Solvency ratio. Profitability ratio.