MAR U T I S U Z U K I I N D IA LT D .

AFM
ASSIGNMENT

Presented to: PROF. JEEVITA R

Prepared by: K SAIESH

231173
 CURRENT RATIO :-
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within
one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its
current debt and other payables.

current ra o
1.2
0.9
0.6
0.3
0
2023 2022 2021 2020 2019

Liquidity Mar 2023 Mar 2022 Mar 2021 Mar 2020 Mar 2019
ratio
Current ratio 0.58
YearBasic 0.99 1.15 EPS (Rs.):
EPS (Rs.)1271.82212Basic 0.75 0.87
Interpretation :-
The current ratio describes the relationship between the company's assests and the liabilities. So
higher ratio means the company has more assets than liabilities. The ideal current ratio is
considered to be 2:1. As you can see, the current ratio of Maruti Suzuki has been declining over the
past 5 years. The current ratio in 2022 is 0.87, which is below the industry average of 1.5. This
indicates that Maruti Suzuki is less liquid than other companies in the same industry. There are a
few reasons why the current ratio of Maruti Suzuki has been declining. One reason is that the
company has been investing heavily in new plants and equipment. This has increased its current
liabilities, such as accounts payable and accrued expenses. Another reason is that the company has
been facing increasing competition from other automakers. This has led to lower sales and pro its,
which has also reduced its current assets.2

4
t
ti
f
DEBT/ EQUITY RATIO :-
The debt-to-equity ratio (D/E ratio) shows how much debt a company has compared to
its assets. It is found by dividing a company's total debt by total shareholder equity. A
higher D/E ratio means the company may have a harder time covering its liabilities.

Debt/Equity ra o

0.02

0.015

0.01

0.005

0
2023 2022 2021 2020 2019

2023 2022 2021 2020 2019

Debt/equity 0.02 0.01 0.01 0.0 0.0
ratio

INTERPRETATION
The debt-to-equity ratio shows how much debt a company has compared to its assets. As
you can see, the total debt-to-equity ratio of Maruti Suzuki has been very low over the
past 5 years. The total debt-to-equity ratio in 2023 is 0.02, which is very low and
indicates that the company is not very leveraged.A low total debt-to-equity ratio is
generally considered to be a good sign. It means that the company is not relying too
much on debt to finance its operations. This gives the company more financial flexibility
and makes it less risky for investors.
ti
 NET PROFIT RATIO :-
The net profit margin is a profitability ratio that measures the percentage of net income
a company retains after paying its expenses and taxes. It is calculated by dividing the net
income by the revenue.
A higher net profit margin indicates that a company is more profitable. A lower net
profit margin indicates that the company is less profitable.

Net pro t margin (%)

9
6.75
4.5
2.25
0
2023 2022 2021 2020 2019

Mar 2023 Mar 2022 Mar 2021 Mar 2020 Mar 2019
Net Profit 6.83 4.20 5.99 7.34 8.70
margin

Interpretation
As we can seethe net profit margin of Maruti Suzuki has been declining over the past 5
years the net profit margin in 2023 is 6.83%,which is less. This indicates that Maruti
Suzuki is less profitable than other companies in the same industry. However company
is generating better profits then last years. Overall ,the net profit of Maruti Suzuki is
cause for concern.
fi
 Operating margin
The operating margin is a profitability ratio that measures the percentage of operating
income a company retains after paying its operating expenses. It is calculated by
dividing the operating income by the revenue.
A higher operating margin indicates that a company is more profitable. A lower
operating margin indicates that the company is less profitable.

opera ng margin (%)

13

9.75

6.5

3.25

0
2023 2022 2021 2020 2019

Mar 2023 Mar 2022 Mar 2021 Mar 2020 Mar 2019
Operating 8.78 5.27 7.46 9.40 12.25
margin(%)

Interpretation
As we can see, the operating margin of Maruti Suzuki has been fluctuating over the past
5 years. The operating margin in 2023 is 8.78%,which is above the industry average of
6%. This indicates that Maruti Suzuki is more profitable than other companies in the
same industry. There are a few reasons why the operating margin of Maruti Suzuki has
been fluctuating. One reason is that the company has been facing competition from other
automakers like new players are entering in the market E-cars.
ti
 Return on Networth/Equity (%)

The return on equity (ROE) is a profitability ratio that measures how much a company is earning on its
shareholders' equity. It is calculated by dividing the net income by the shareholder equity.
A higher ROE indicates that a company is more profitable. A lower ROE indicates that the company is
less profitable.
The return on equity for Maruti Suzuki is as follows:

ROE

17

12.75

8.5

4.25

0
2023 2022 2021 2020 2019

Year Return on Equity (%)

2023 13.28
2022 7.01
2021 8.36
2020 11.48
2019 16.24

Interpretation

As you can see, the return on equity of Maruti Suzuki has been declining over the past 5 years. The
return on equity in 2023 is 13.28%, which is above the industry average of 10%. However, it is lower
than the ROE of 16.24% in 2019. This indicates that Maruti Suzuki is less profitable than it was a few

In conclusion, while Maruti Suzuki has seen an improvement in its ROE from 2022 to 2023, the
metric has not yet reached the 2019 level. It's important to delve deeper into the company's
financial statements and factors affecting its profitability to gain a more comprehensive
understanding of its financial performance.
 Return on capital employed

Return on capital employed (ROCE) is a profitability ratio that measures how much a
company is earning on its capital employed. It is calculated by dividing the earnings before
interest and taxes (EBIT) by the capital employed.
A higher ROCE indicates that a company is more profitable. A lower ROCE indicates that the
company is less profitable.
The ROCE for Maruti Suzuki is as follows:

ROCE

22
16.5
11
5.5
0
2023 2022 2021 2020 2019

Year ROCE (%)

2023 16.02
2022 8.08
2021 9.52
2020 13.60
2019 21.16

Interpretation

As you can see, the ROCE of Maruti Suzuki has been declining over the past 5 years. The ROCE in
2023 is 16.02%, which is above the industry average of 12%. However, it is lower than the ROCE
of 21.16% in 2019. This indicates that Maruti Suzuki is less profitable than it was a few years
ago.There are a few reasons why the ROCE of Maruti Suzuki has been declining. One reason is
that the company has been facing increasing competition from other automakers. This has led to
lower sales and profits. Another reason is that the company has been increasing its spending on
research and development. This has also reduced its profits.
 Return On Assets (%)

Return on assets (ROA) is a profitability ratio that measures how much a company is earning on
its assets. It is calculated by dividing the net income by the total assets.
A higher ROA indicates that a company is more profitable. A lower ROA indicates that the
company is less profitable.
The ROA for Maruti Suzuki is as follows:

ROA(%)

12
9
6
3
0
2023 2022 2021 2020 2019

Year ROA (%)

2023 9.70
2022 5.19
2021 6.15
2020 8.92
2019 11.95

Interpretation

As you can see, the ROA of Maruti Suzuki has been fluctuating over the past 5 years. The ROA
in 2023 is 9.70%, which is above the industry average of 7%. However, it is lower than the
ROA of 11.95% in 2019. This indicates that Maruti Suzuki is less profitable than it was a few
years ago.
 Basic EPS (Rs.)

Earnings per share, or EPS, is a standard term used to assess a company's profitability. EPS is defined as
the value of earnings per outstanding share of a company's common stock. In other words, EPS measures
a company's profitability by revealing how much money it can make per share.A company with high
earnings per share ratio is capable of generating a significant dividend for investors, or it may plow the
funds back into its business for more growth; in either case, a high ratio indicates a potentially
worthwhile investment.

EPS(RS.)

280
210
140
70
0
2023 2022 2021 2020 2019

Year Basic EPS (Rs.)

2023 271.82
2022 128.43
2021 145.30
2020 187.95
2019 253.26

Interpretation

Certainly, here's a more succinct summary of Maruti Suzuki's Basic Earnings Per Share (EPS)
from 2019 to 2023.
• Maruti Suzuki's Basic EPS exhibited a fluctuating trend.
• The company saw its highest EPS in 2019 at Rs. 253.26, indicating strong profitability per
share.
• From 2019 to 2022, EPS declined significantly, possibly due to challenges in profitability.
• In 2023, there was a notable rebound with EPS reaching Rs. 271.82, suggesting improved
profitability.
Investors tend to favor higher EPS as it signifies better profitability on a per-share basis.