Case Study on Tata Motors and Maruti Suzuki

Abstract

One of the major issues of managing an organization is the management of working capital. This article is about examining the issues like the large investment in the working capital and whether the working capital and its parts are used efficiently in various sectors of industry in India. Efforts have been taken to do a deep study on Working Capital Management in India. Working Capital is the money which is available to the companies to fund daily operations mainly which they have to work with. We will investigate if negative working capital is healthy for an organization. We will also take a look at the profitability of various operations and how it whether negative working capital has an effect on profitability. Also by analyzing their financial statements, we will determine the market position of the organizations and what changes they should incorporate in their strategies to increase profitability. DuPont Analysis is done and reason for possible loss is extracted. The comparison will be done between two automobile organizations, TATA Motors and Maruti Suzuki India Limited.

 Keywords: Working capital, current assets, current liabilities, current ratio, quick ratio, DuPont Analysis