IRA-International Journal of Management & Social Sciences
Introduction:
The Indian auto industry is one of the largest in the world. The industry accounts for
7.1 per cent of the country's Gross Domestic Product (GDP). As of Financial Year 2014-
2015, around 31 per cent of small cars sold globally were manufactured in India. The Two
Wheelers segment with 81 per cent market share is the leader of the Indian Automobile
market owing to a growing middle class and a young population.
Moreover, the growing interest of the companies in exploring the rural markets
further aided the growth of the sector. India is also a prominent auto exporter and has strong
export growth expectations for the near future. In April-January 2016, exports of Commercial
Vehicles registered a growth of 18.36 per cent over April-January 2015. In addition, several
initiatives by the Government of India and the major automobile players in the Indian market
were expected to make India a leader in the Two Wheeler (2W) and Four Wheeler (4W) market
in the world by 2020.
India’s second largest commercial vehicle maker Ashok Leyland has shown a
declining trend in the total sales during August 2016 by 6 per cent due to lower growth in
Medium and Heavy Vehicle segment. The company sold ten thousand eight hundred and
ninety-seven (10,897) vehicles in the month gone by, compared with 11,544 units sold in the
same month last year. Medium & Heavy commercial vehicle sales during the month declined
8 percent to 8201 units while light commercial vehicle sales grew by 2 percent to 2696 units
on yearly basis. The contribution of Ashok Leyland in the growth of the automobile industry
is very high. Hence an attempt is made to analyse the financial statement of Ashok Leyland.
Statement of the Problem
The role of financial reporting by companies is to provide information about their
performance, financial position and changes in the financial position that is useful to a wide range
of users in making economic decisions. The role of financial statement analysis is to take financial
reports prepared by companies, combined with other information, to evaluate the past, current and
prospective performance and financial position of a company for the purpose of making
investment, credit and other economic decisions. As several initiatives is taken by the government
of India towards automobile industry major automobile players are expected to make India as
leader in Commercial vehicles. As Ashok Leyland is one the major player in the Automobile
industry in India, conducting financial statement analysis for Ashok Leyland Limited is found
importance at this juncture.
Objective of the Study
The following were the objectives framed by the researcher to analyze the financial statement
of Ashok Leyland:
To analyze the Working Capital Position of Ashok Leyland.
To study the Cash position of Ashok Leyland
To find out the Profitability Position of Ashok Leyland
To measure the Returns of Ashok Leyland.
To study the Efficiency of Ashok Leyland in managing its assets
To scrutinize the Liquidity position of Ashok Leyland.
Period of the Study
A period of five years is taken for the analysis purpose from 2011-2012 to 2015-2016