Financial performance of selected automobile companies

The present paper measures the financial performance of major selected automobile companies for the period of 5 years from 2013-2017 by using ratio analysis.
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Financial performance of selected automobile companiesInternational Journal of Management (IJM)Volume 9, Issue 4, July–August 2018, pp. 14–23, Article ID: IJM_09_04_003Available online athttp://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=9&IType=4Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.comISSN Print: 0976-6502 and ISSN Online: 0976-6510© IAEME Publication FINANCIAL PERFORMANCE OF SELECTED AUTOMOBILE COMPANIES Dr. G. Kanagavalli Assistant Professor, Department of Commerce, Alagappa University, Karaikudi, Tamilnadu, India R. Saroja Devi Ph.D Research Scholar, Department of Commerce, Alagappa University, Karaikudi, Tamilnadu, India ABSTRACT The Indian auto industry became the fourth largest in the world with sales increasing 9.5 per cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th largest manufacturer of commercial vehicles in 2017. The Two Wheelers segment dominates the market in terms of volume 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. Overall automobile exports from India grew at 6.86 per cent CAGR between FY13-18. The present paper measures the financial performance of major selected automobile companies for the period of 5 years from 2013-2017 by using ratio analysis. The purpose of the study is to evaluate and compare the financial performance of selected three companies to rate their financial performances. The aim of the study is to analyze by comparing the risk of different companies, on their strengths and weaknesses. Key words: Financial performance, Automobile Industry, Ratios. Cite this Article: Dr. G. Kanagavalli and R. Saroja Devi, Financial Performance of Selected Automobile Companies. International Journal of Management, 9 (4), 2018, pp. 14–23. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=9&IType=41. INTRODUCTIONThe automobile sector today is one of the key sectors of the country contributing majorly tothe economy of India. It directly and indirectly provides employment to over 1.5 millionpeople in the country. A stable government framework, increased purchasing power, largedomestic market, and an ever increasing development in infrastructure have made India afavorable destination for investment[1]. It is one of the largest sectors in the world, both interms of sales volume and production. The Indian automobile industry has a well establishedname globally being the second largest two wheeler market in the world, fourth largest http://www.iaeme.com/IJM/index.asp 14 editor@iaeme.com Financial Performance of Selected Automobile Companiescommercial vehicle market in the world, and eleventh largest passenger car market in theworld and expected to become the third largest automobile market in the world only behindUSA and China. The automobile sector facilitates the improvement in various infrastructures like power,rail and road transport. Due to its deep forward and backward linkages with several keysegments of the economy, the automobile industry is having a strong multiplier effect on thegrowth of a country and hence is capable of being the driver of economic growth. It plays amajor catalytic role in developing transport sector in one hand and help industrial sector onthe other to grow faster and thereby generate a significant employment opportunities. In India,automobile is one of the largest industries showing impressive growth over the years and hasbeen significantly making increasing contribution to overall industrial development in thecountry. The norms for foreign investment and import of technology have also beenliberalized over the years for manufacture of vehicles. At present, 100% foreign directinvestment is permissible under the automatic route in this sector, including passenger carsegment. The Indian automobile industry proved to be in good shape in the last year even after theeconomic downturn. This was majorly due to the fact of renewed interest shown by globalautomobile players like Nissan Motors which consider India to be a potential market. Theindustry accounts for 7.1 per cent of the countrys Gross Domestic Product. The TwoWheelers segment with 80 per cent market share is the leader of the Indian Automobilemarket owing to a growing middle class and a young population. Moreover, the growinginterest of the companies in exploring the rural markets further aided the growth of the sector.The o ...