A Study on the Financial Performance using Comparative Analysis and Ratio Analysis as a Tool with Reference to Maruti Suzuki India Limited

Automobiles have become an essential in today's world. The car, which was once considered less affordable or afforded by only the elite rich class, has now become a part of everyone's comfortable life. More than a prestige factor, it has become a part of the daily life, be it for an individual to travel to his workplace, or a small business owner to go to his business place, or even people travel from one place to another with comfort and ease. Though automobiles have led to increased traffic and pollution in the world, yet its uses have also increased immensely in this world and era of globalization. From cycles to planes, each of them has their own benefits to every person in a different way. In ancient times, bullock carts tied to oxen were used as vehicles to go from one place to another. As the world developed and industrial revolution took place, motors were invented. This led to the creation of two-wheeled vehicles, motor cars, and planes and today has led to the creation of electric bikes and cars. A comparative analysis is the study of the trend of those numbers which belong to the same group that have already been calculated and presented. This may include two or more income statements or balance sheets of the same company on different dates or different financial periods. The similarities or differences in the balance sheet or income statement that undergo comparison reflect the conduct of a business. The changes can be observed by comparing the financial statements of two different periods, or two different companies in the same industry (comparison with the performance of a competitor). These changes will help in concluding about the progress and performance of the business. (Source: www.xamidea.in). Ratio Analysis is a financial tool that helps in analyzing the performance and position of the company in terms of profitability, turnover, liquidity, etc. It is conducted as a further analysis after the financial statements are clearly analyzed and interpreted. It basically helps in giving a clear picture of the interaction of the company with its internal and external factors and environment. (Source: Financial Management- Indian Institute of Banking and finance-Macmillian). This study intends to analyze the earning capacity and profitability of Maruti Suzuki India Limited in terms of short term and long term solvency, financial stability and long-term liquidity.