Project on Ace Ltd

Estimation of Financial Strength of Escorts.

Presented to:

Mr. Sunil Buddhiraja,Presentation Incharge

Presented by:

Narender Dagar,Reg. No. 10904044RS1903A23

Objective Of The StudyTo assess the long-term and short-term financial soundness of the company. To make a comparison of Escorts performance with its competitors. To evaluate current performance of the company and comparing it with its past performances To find out various reasons which are responsible for the differences in the performance of Escorts and its competitors.

Introduction to the Project

financial position of the company on the basis of ratio analysis.the financial position of the company is measured by making comparison with its competitorsTwo methods are adopted to estimated the strength of escortsCont.

Introduction to Escorts In 1960, Escorts set up the strategic Agri Machinery Group (AMG) to venture into tractors. In 1965, the company rolled out its first batch of tractors under the brand name of Escort.In 1969, a separate company Escorts Tractors Ltd. was established 1996, Escorts Tractors Ltd. formally merged with the parent company Escorts Ltd.

Escorts AMG has three recognized and well accepted tractor brands

Scope of the studyThe ability of the firm to meet current obligationThe extent to which firm has used its long term solvency by borrowing funds.The efficiency to which firm is utilizing its assets in generating sales revenue.

Firm utilizing the overall operating efficiency and performance of the firm.

Research MethodologyResearch Design Exploratory+DescriptiveMethods ofData collection Primary Data Secondary Data

observations newspaper Journals websites

Research Methodology cont.SampleSize 4 CompaniesPresentationBar- diagramPie chartsGraphs

Review Of Existing Literature

SOURCE 1 http:// www.escorts.com

Balance Sheet of different years

Internal data of the company Annul Reports of the escorts

Ratio AnalysisA ratio is defined as the indicated quotient of two mathematical expressions and as the relationship between two or more things Ratio analysis involves comparison for a useful interpretation of the financial statements

Types of Ratio:-

RATIO ANALYSIS OF ESCORTSCURRENT AND QUICK RATIO:-

Projected ratios for year 2010 and 2011 by using method of Least Square. Equations for regression line or trend line using time series: Current ratio : Y = 1.09 + 0.011 X (where X=3, 4 for 2010 & 2011 respectively in all cases) Quick ratio : Y = 0.83 + 0.004 X

Debtor turnover ratio : Y = 5.74 0.5 X Creditors turnover ratio : Y = 3.99 0.15 X

CURRENT RATIO:-COMPARATIVE ANALYSIS OF ESCORTS WITH ITS COMPETITORS

COMPARISON OF GROSS PROFIT RATIOS OF DIFFERENT COMPANIES WITH ESCORTS

COMPARISON OF NET PROFIT RATIOS OF DIFFERENT COMPANIES WITH ESCORTS

Limitation of the studyExcessive carriage of inventory over the normal levelsWorking capital problems will arise when there is a slow down in collection of debtors.Sometimes capital goods will be purchased from the funds available for working capitalUnplanned production schedules will cause excessive stocksDependence in short term sources of finance

Recommendations

Investments: The Company has invested in various fields which is good as it has diversed its risk.

Market share: The Companys main motive should be to increase their market share.

Collection period: Escorts should have to reduce its credit period

Proper training: The personnel must be given training for proper use of equipments and materials so as to avoid damages

Payment policies: Payment policies followed by Escorts should be reviewed time to time.

CONCLUSION

The company has improved its performance very well as compared to its previous years ratios.

Escorts is still in backward position if compared it with Mahindra & Mahindra and VST Tillers.

continuous improvement of Escorts is also giving them a tougher competition and will definitely acquire a better position in the future.

Time To Ask Questions.!!!