WORKING CAPITAL

GROUP 6
Largest 3 wheeler market in the world
Second largest 2 wheeler market in the world
Fourth largest Passenger Vehicle Market in Asia
Fourth largest Tractor Market in the world
Fifth largest Vehicle Market in the World
Contributes to 9% of Indias GDP
TATA Motors
Mahindra and Mahindra
Maruti Suzuki
Indias largest automobile company, with consolidated
revenues of Rs.1,23,133 crores (USD 27 billion) in
2010-11.
Leader in commercial vehicles, and among the top
three in passenger vehicles with winning products in
the compact, midsize car and utility vehicle segments.
The world's fourth largest truck manufacturer, and the
world's third largest bus manufacturer.
First company from India's engineering sector to be
listed in the New York Stock Exchange.
Particulars Rs Rs
CA

Inventories 2935.59

Sundry Debtors 2391.92

Cash & Bank Balance 1753.26

Interest Earned on Investments 0.11

Loans & Advance 4457.1


11537.98
CL

Current Liabilities 14609.16

Provisions 2763.43


17372.59
Net Working Capital Required

-5834.61

Particulars Rs Rs
CA

Inventories 3891.39

Sundry Debtors 2602.88

Cash & Bank Balance 2428.92

Interest Earned on Investments 0.08

Loans & Advance 5167.34


14090.61
CL

Current Liabilities 13032.53

Provisions 3222.71


16255.24
Net Working Capital Recuired

-2164.63

Working Capital increased from Rs. -5834.61 to Rs. -
2164.63 crores
Inventories have gone up from Rs. 2935.59 crores to
Rs. 3891.39 crores
Debtors of the company are more or less the same
Cash balances of the company have increased from Rs.
1753.26 to Rs. 2428.92 crores
Current liabilities of the company have decreased
slightly from Rs.14609.16 crores to Rs. 13032.53 crores
Year 2009-10 2010-11
Current assets (Rs in crores) 11537.98 14090.61
Current liabilities (Rs in crores) 17372.59 16255.24
Current ratio (Rs in crores) 0.66 0.86

Current Ratio = Current Assets/ Current Liabilities
From 2009-10 to 2010-11:
increase from 0.66 to 0.86

It shows the company is able to finance itself on the credit
given by the suppliers. And hence the liabilities are less
than the assets.
Quick Ratio = Quick Assets / Current liabilities
Quick Assets = Current Assets- Inventories

Year
Sept 2010 Sept 2009
Current assets (Rs in crores)
11537.98 14090.61
Less: Inventory 2935.59 3891.39
Quick Assets
8602.39 10199.22
Current liabilities (Rs in crores)
17372.59 16255.24
Quick ratio 0.49 0.62

Quick ratio is less than 1.
It signifies that their liabilities are generally higher than
their assets.
India's largest passenger car company, accounting
for majority of the domestic car market.
In fiscal 2009-10 Maruti Suzuki became the only
Indian company to manufacture and sell One
Million cars in a year.
The company has a sales network of 802 centres in
555 towns and cities
It provides service support to customers at 2,740
workshops in over 1,335 towns and cities.
Particulars Rs Rs
CA

Inventories 12088

Sundry Debtors 8099

Cash & Bank Balance 982

other CA 848

Loans & Advance 15707


37724
CL

Current Liabilities 29394

Provisions 6284


35678
Net Working Capital Recuired

2046

Particulars Rs Rs
CA

Inventories 14150

Sundry Debtors 8933

Cash & Bank Balance 25085

other CA 1673

Loans & Advance 13722


63563
CL

Current Liabilities 35540

Provisions 5258


40798
Net Working Capital Recuired

22765

Working Capital of the company has drastically
increased from Rs. 2046 crores to Rs. 22765 crores
Inventories of maruti suzuki have increased from Rs.
12088 crores to Rs. 14150 crores
Debtors of the company have increased from Rs. 8099
crores to Rs. 8933 crores
Cash Balance of the company has risen almost
astronomically, from Rs. 982 crores to Rs. 25085 crores
Current Liabilities have also increased from Rs.
29394 crores to Rs. 35540 crores
Current Ratio = Current Assets/ Current Liabilities
Year
2009-10 2010-11
Current assets (Rs in crores)
37724 63563
Current liabilities (Rs in crores)
35678 40798
Current ratio (Rs in crores)
1.05
1.55

From 2009-10 to 2010-11:
Increase from 1.05 to 1.55.

Thus the company can pay off its debts from its own
assets without depending on any other source.
Quick Ratio = Quick Assets / Current liabilities
Quick Assets = Current Assets- Inventories

Year
Sept 2010 Sept 2009
Current assets (Rs in crores)
37724 63563
Less: Inventory 12088 14150
Quick Assets
25636 49413
Current liabilities (Rs in crores)
35678 40798
Quick ratio 0.71 1.21

Quick Ratio has increased from 0.71 to 1.21.

Thus, there is enough liquidity in the company to fund
its day-to-day needs.
Mahindra & Mahindra is a major automobile
manufacturer of utility vehicles, passenger cars,
pickups, commercial vehicles, and two wheelers.
Its tractors are sold on six continents.
In 1947, Mahindra and Mahindra
introduced India to the utility vehicle.
Mahindra offers cars, pickups, and commercial
vehicles that are rugged, reliable, environmentally
friendly, and fuel-efficient.

Particulars Rs Rs
CA

Inventories 1188.78

Sundry Debtors 1258.08

Cash & Bank Balance 1743.23

Other CA's 50.87

Loans & Advance 1801.43


6042.39
CL

Current Liabilities 3400

Provisions 1796.54


5196.54
Net Working Capital Required

845.85

Particulars Rs Rs
CA

Inventories 1694.21

Sundry Debtors 1354.72

Cash & Bank Balance 614.64

Other CA's 106.74

Loans & Advance 2373.17


6143.48
CL

Current Liabilities 4761.68

Provisions 2005.88


6767.56
Net Working Capital Required

-624.08

Working capital has decreased by rs. 1469.93 crore
Inventories have risen from rs 1188.78 crore in 2009-
2010 to rs 1694.21 crore in 2010-2011
The cash and bank balance decreased from rs
1743.23 crore in 2009-10 to rs 614.64 crore in 2010-11
Debtors amount has increased from rs. 1258.08 crore
in 2009-10 to rs. 1354.72 crore in 2010-11
The Liabilities have increased from rs 3400 crore last
year to rs 4761.68 crore this year
Current Ratio = Current Assets/ Current Liabilities
Year
Mar 2011 Mar 2010
Current assets (Rs in crores)
6143.48 6042.39
Current liabilities (Rs in crores)
6767.56 5196.54
Current ratio (Rs in crores)
0.91
1.16

Current Ratio of Mahindra and Mahindra is
decreasing from the year 2009-10 to 2010-11.

This is a very good sign of performance.
Quick Ratio = Quick Assets / Current liabilities
Quick Assets = Current Assets- Inventories

Year
Mar 2011 Mar 2010
Current assets (Rs in crores)
6143.48 6042.39
Less: Inventories
1694.21 1188.78
Current liabilities (Rs in crores)
6767.56 5196.54
Quick ratio
0.66 0.71

Quick ratio is less than 1.

Signifies delay in availability or convertibility into cash
and hence liquidity of the company is very
unsatisfactory.

CURRENT ASSETS Mahindra and
Mahindra
Tata Motors
Maruti
suzuki
1. Inventories
1694.21 3891.39 14150
2. Sundry Debtors
1354.72 2602.88 8933
3. Cash and Bank balances
614.64 2428.92 25085
4. Other CA
106.74 0.08 1673
5. Loans and Advances
2373.17 5167.34 13722
6. TOTAL CURRENT ASSETS


6143.48

14090.61 63563
CURRENT LIABILITIES

7. Liabilities
4761.68 13032.53 35540
8. Provisions
2005.88 3222.71 5258
9. TOTAL CURRENT LIABILITIES
6767.56 16255.24 40798
WORKING CAPITAL
-624.08
-2164.63 22765
While Tata Motors and M&M sustain on negative working capital,
Maruti is extremely opposite, it not only has a positive working
capital but also a very huge one.
The cash balance of Maruti is the highest.
In both current assets and liabilities Maruti Suzuki is the highest,
followed by Tata Motors and then Mahindra and Mahindra
Thus, we come to know that each component of the working
capital forms an important part of it.
However, since Maruti Suzuki has high sales it has huge debts,
inventories and cash locked up and thereby the highest working
capital amongst the three companies.


THANK YOU
GROUP 6