PROJECT SYNOPSISONRATIO ANALYSIS FOR TATA POWER COMPANY LIMITED.

COMPANY PROFILE:TATA POWER: Lighting up Lives!Tata Power is India's largest integrated power company with a significant international presence. The Company has an installed generation capacity of 8613 MW in India and a presence in all the segments of the power sector viz Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading. It has successful public-private partner ships in Generation, Transmission and Distribution in India namely "Tata Power Delhi Distribution Limited" with Delhi Vidyut Board for distribution in North Delhi, 'Powerlinks Transmission Ltd.' with Power Grid Corporation of India Ltd. for evacuation of Power from Tala hydro plant in Bhutan to Delhi and 'Maithon Power Ltd.' with Damodar Valley Corporation for a 1050 MW Mega Power Project at Jharkhand. It is one of the largest renewable energy players in India and is developing country's first 4000 MW Ultra Mega Power Project at Mundra (Gujarat) based on super-critical technology. Recently, Tata Power has been selected to work as a Distribution Franchisee (DF) in Jamshedpur Circle of Jharkhand State Electricity Board (JSEB).Its international presence includes strategic investments in Indonesia through 30% stake in coal mines and a geothermal project; in Singapore through Trust Energy Resources to securitise coal supply and the shipping of coal for its thermal power generation operations; in South Africa through a joint venture called Cennergi' to develop projects in 16 different countries in Africa; in Australia through investments in enhanced geothermal and clean coal technologies and in Bhutan through a hydro project in partnership with The Royal Government of Bhutan. With its track record of technology leadership, project execution excellence, world class safety processes, customer care and driving green initiatives, Tata Power is poised for a multi-fold growth and committed to 'lighting up lives' for generations to come.Apart from being pioneers in Power production in the private sector, Tata Power has many firsts to its credit: First to bring UMPP in India (at Mundra, Gujarat) based on super- critical technology and unit size of 800 MW each. First 150 MW thermal unit in the country First 500 MW thermal unit in the country. First to Commission Gas Insulated Switchgear 220 KV and 110 KV. Touch screen-based Distributed Digital Control and Energy Management Systems. Computerised Grid Control and Energy Management Systems. 220 kV Transmission Lines in Four-Circuit Towers. 220 kV Cable Transmission Network. Flue Gas De-sulphurisation Plant using sea water. First 275 meter tall chimney for Unit No. 6. 500 MW power plant. First Operational Pumped Storage Unit in the country of 150 MW capacity. First to install Fly Ash Aggregate Plant to convert waste product (fly ash) into a useful building material. Training Simulators for 150 MW, 500 MW Thermal Power Plants and High Voltage Switchyard Operations. First to introduce SCADA and Fibre Optic Ground Wire Communication. Tata Power's Load Despatch Center is the First ever Load Despatch Center in India to havegotten ISO Certification (11 August 2004). Leading Renewable playerHarnessing Hydro Power: The Company has an installed hydro capacity of 447 MW in Maharashtra. Tata Power and Norway-based SN Power entered into an exclusive partnership to develop hydro power projects in India and Nepal. The consortium is developing the "236 MW Dugar Hydro Electric Project" in Chenab Valley in Himachal Pradesh, India. Tata Power through a JV with the Royal Government of Bhutan is implementing the 126 MW Dagachhu Hydro Project. The Company is prospecting further opportunities to bid and acquire hydro projects.Harnessing Solar Energy: Tata Power has a strong portfolio of 50+ MW of solar generation capacity. It commissioned its solar power project of 25 MW in Mithapur, Gujarat in January 2012 and a 29 MW solar powered project in Pallaswadi, Maharashtra in May 2014. It has also executed a 3 MW solar photo-voltaic plant at Mulshi, one of the largest grid-connected solar projects in the State of Maharashtra. The Company had set up its first solar power plant of 110 kW, way back in 1996 at Walwhan in Lonavla. A 60.48 kWp solar power plant has been installed on the rooftop of one of the Company's offices in Mumbai and the power generated by these solar panels is expected to take the lighting load of the entire building.Innovations: Floating Solar Plant: The Company has partnered with the Australian company, Sunengy Pty. Ltd. to build the first floating solar plant in India.Harnessing Wind Energy: Tata Power has an installed capacity of 461 MW and plants spread across five states of Maharashtra, Gujarat, Tamil Nadu, Karnataka and Rajasthan, the leading states in promoting wind power generation in India. Another 180 MW of wind projects are under construction in the states of Rajasthan (Dalot 100.5) and Maharashtra (Pethshivpur 49.5, Visapur 32 MW).Exploring Geothermal Power : 240 MW Sorik Marapi Geothermal Project: A consortium led by Tata Power (47.5%) along with Origin Energy Ltd., Australia (47.5%) and PT Supraco, Indonesia (5%) won the Sorik Marapi geothermal project in Northern Sumatra, Indonesia. The Sorik Marapi project is estimated to support the development of approximately 240 MW of geothermal generation capacity The project currently is in exploration development phase.Waste Gas Generation: Tata Power has set up various plants at Haldia and in Jamshedpur (Power 6) based on the blast furnace and coke oven gases which are waste gases from steel making process which help in reducing greenhouse gas emission significantly. It's looking at other similar projects with Tata Steel.OTHER BUSINESSES:Tata Power Trading Company Limited (TPTCL), a wholly owned subsidiary, is the first company to have been awarded a power trading licence by the Central Electricity Regulatory Commission enabling it to carry out transactions all over India.The Strategic Engineering Division (SED), It has been in operation for over 30 years and has been pursuing development and production activities for the Indian defence sector. Over 90% of the company's strategic electronic efforts are executed for the defence sector. The division has long-standing relationships with the Armed Forces and DRDO. The Division has developed specialised equipment for Air Defence and Naval Combat Systems.It is also developing a program to modernize the Airfield Infrastructure for the Indian Air Force.Tata Power Solar, It is a 100% subsidiary of Tata Power, and is a market leader in Solar Photovoltaic technology in India. Nearly 75% of sales is achieved from exports to Europe and USA.

INTRODUCTION TO TOPIC

RATIO ANALYSISRatio Analysis is the most popular technique of financial analysis indicating the relationship that exists between two variables & is expressed as a percentage or number. Another defines a ratio as a quotient obtained by dividing one variable by another. A financial analyst can use a ratio as a ratio as a bench mark to evaluate the financial position & performance of a firm. Comparison & interpretation of various ratios obtained from financial statements can help in having a better understanding of the financial position & performance of an enterprise. Therefore it is a more meaningful & effective tool of analysis.

Ratio analysis offers many benefits. It helps in establishing relationship between various financial items of financial statements. These ratios provide important information, which serves as a basis for decision-making.

An inventors in interested regarding the exact financial position of the business , its earning capacity and the present position with regards to profitability and future possibility of the company. He has only the published accounted of the company before him. This would enable him to take any decision with respect to investing his money. Them published accounts are, Profit &loss accounts, balance sheet, Directors reports and auditor reports and chairman speech. The directors report and chair man speech would assist him in foreseeing the future prospect of the company. Let us see at this classifying in our study of analysis of accounts. Financial statement gives the current position of the business Company which is being its facts data are comparable with other company in the field and also comparable with whole industry facts.

Importance of Ratio Analysis: The Important of the Ratio Analysis can be stated as follows: 1. Liquid Position: A firm can be said to have the ability to meet its short term liabilities if it has sufficient liquid funds to pay the interest on its short maturing debt usually within a year as well the principal. This ability is reflected in the liquidity ratios of a firm.

2. Long term Solvency: The long-term solvency is measured by the leverage/capital structure & profitability ratios, which focus on earning power & operating. 3. Operating activity: Ratio Analysis throws light on the degree of efficiency in the management & utilization of its assets. It would be recalled that the various activity ratios measure this kind of operational efficiency.

4. Overall Profitability: The management is constantly concerned about the overall profitability of the enterprise. I.e. they are concerned about the ability of the firm to meet its short term as well as long-term obligations to its creditors, to ensure a reasonable return to its owners & square optimum utilization of the assets of the firm. This is possible if an integrated view is taken & all the ratios are considered together.5. Trend Analysis: Ratio Analysis enables a firm to consider the time dimension. In other words, whether the financial position of. The firm is improving or deteriorating over the year. Trend analysis shows the direction of movement i.e. whether the movement is favorable or unfavorable.

TYPES OF RATIO To evaluate the financial condition & performance of a firm meaningfully, financial analysis need to compute a number of financial ratios from the accounting date presented in the financial statement of the firm. There are different ratios are as follows. A. Liquidity Ratios B. Leverage Ratio C. Turnover Ratio D. Profitability Ratio

A. Liquidity Ratios:- As the name suggests liquidity ratios are used to evaluate the firm's ability to honor its short-term or current obligations & judge, the present cash solvency of the firm. This indicates the relationships between current assets i.e. the resources available with the firm to meet current obligations & current liabilities. Some important liquidity ratios are: a) Current Ratio b) Acid-test ratio c) Cash Ratio

B. Leverage Ratios:- The short-term creditors who are interested in the current financial position would use the liquidity ratios. The leverage or capital structure ratio may be defined as the financial ratio which throws light on the long- term solvency of a firm reflected in its ability to- 1) Periodic payment of interest during the periods of the loan & advances.2) Repayment of principal on maturity or in pre-determined Installments at due-date. There are thus, two aspects of the long-term solvency of the firm. First ratio, which is based on the relationship between borrowed funds & owner's capital. These ratios are computed from the balance sheet & have many variations such as; 1. Debt-equity ratio2. Debt- assets ratio 3. Owner's ratio The second type of Capital structure ratio popularly called coverage ratios, are calculated from the Profit & loss account include the following. Interest coverage ratio, Dividend Coverage ratio, Total fixed changes coverage ratio, Cash flow Coverage ratio, Debt service coverage ratio.

C. Turnover Ratios:- Turnover ratios, also known as activity ratios, are based on relationships between turnover or level of activity & various assets, namely net assets, fixed assets, net working capital, inventories etc. Turnover means sales revenue or total sales receipts during a period, i.e. a firm's gross trading income for a period. Thus, turnover ratios are obtained by dividing sales by various assets. They indicates how efficiently various assets have been employed. So these ratios are also called "asset management ratios." Some important turnover ratios are:1) Inventory turnover Ratio 2) Debtors turnover Ratio 3) Average collection period 4) Creditors turnover Ratio 5) Fixed Assets Ratio 6) Total Assets Ratio

D. Profitability Ratios: - In order to evaluate the results of business operations we need to know the profitability of the firm. Profitability is essential not only for a firm's survival but for its growth also. Profitability relationship or ratios are generally of two types profitability. As related to sales (profit margin ratio) & profitability as related to investment (rate of return ratios). These ratios reflect the firm's operational efficient

INTRODUCTION ABOUT THE RESEARCH METHODOLOGYAs traditionally defined, modern research work has been concerned with gathering data that can help us answer question about various aspects industrial economy, trade and commerce and this can enable as to understand present problem. Research in common parlance reference to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic.

OBJECTIVES OF THE STUDY : To know about the ratios analysis for years 2009-2013 of the Tata power company limited. To study the financial performance and other facts related to Financial Management so as to find out the strengths and weaknesses of Tata power company limited. To study the past and present status of Tata power company limited. To know about the trend in the financial performance of the Tata power company limited. over last few years. To study and analyze the financial performance of the company by using ratios as a tool to know the position of the company through the studyRESEARCH METHODOLOGY RESEARCH: Research study has its own specific purpose but the research design of the project on Tata power company limited is exploratory in nature as the objective is the development of the hypothesis rather than their testing.

METHODOLOGY: Research Methodology comprises of defining & redefining problem, collecting, organizing & evaluating data, making deductions & researching to conclusion.

Research DesignProblem Identification @ Find out Ratios of Tata power company limited and compare with other industry in same line of Business.@ Find deviation of calculated ratios from standard or Norms @ Calculating the working capital requirement of Tata power company limited.

Information needed@ Information about firms assets, liabilities, revenue, expenditure, bankers, investment etc.@ Information about firms loan, security, stock level & other financial information.

SOURCES OF Data Collection1. Primary data2. Secondary dataPrimary Data:Data that has been collected from first-hand-experience is known as primary data. Primary data has not been published yet and is more reliable, authentic and objective. Primary data has not been changed or altered by human beings, therefore its validity is greater than secondary data.Sources of Primary Data:Sources for primary data are limited and at times it becomes difficult to obtain data from primary source because of either scarcity of population or lack of cooperation. Regardless of any difficulty one can face in collecting primary data; it is the most authentic and reliable data source. Following are some of the sources of primary data. Eg, Experiments, SurveySecondary data

Data collected from a source that has already been published in any form is called as secondary data. The review of literature in nay research is based on secondary data. Mostly from books, journals and periodicals.Sources of Secondary Data:Secondary data is often readily available. After the expense of electronic media and internet the availability of secondary data has become much easierPublished Printed Sources, Published Electronic Sources, Unpublished Personal RecordsGovernment Records, Public Sector Records etc.

Data sources used in this Project: In this project the source of data will secondary data that will be collected through external resources through like Business Magazines, Generals, Internet, Websites and Research Papers etc. The main sources will be there in company. Entire information and data will be gathered from the respective annual report of the company. All the information will be taken from their balance sheet and the internal documents.In this project My data collection source will be secondary i.e.@ Annual reports of companies@ Balance sheet@ Profit & Loss Accounts

BOOKS:

Donald R. Cooper Pamela S Schindler business research methods .

Phillip Kotler Marketing Management .

K.Ashwathppa for production and operation management.

I M Pandey for financial management

BROCHURES:

Last 5 years of data of the Tata power company limited.

Balance Sheet of Tata Power Company------------------- in Rs. Cr. -------------------

Mar '14Mar '13Mar '12Mar '11Mar '10

Sources Of Funds

Total Share Capital237.33237.33237.33237.33237.33221.44

Equity Share Capital237.33237.33237.33237.33237.33221.44

Share Application Money0.000.000.000.000.000.00

Preference Share Capital0.000.000.000.000.000.00

Reserves12,890.0312,023.5211,519.6610,938.2510,295.038,422.06

Networth13,127.3612,260.8511,756.9911,175.5810,532.368,643.50

Secured Loans6,689.617,043.024,951.274,753.914,105.383,931.71

Unsecured Loans3,565.914,081.704,245.862,299.781,858.041,315.35

Total Debt10,255.5211,124.729,197.137,053.695,963.425,247.06

Total Liabilities23,382.8823,385.5720,954.1218,229.2716,495.7813,890.56

Application Of Funds

Gross Block14,813.6413,414.7012,497.4510,518.9210,010.808,985.86

Less: Revaluation Reserves0.000.000.000.000.000.00

Less: Accum. Depreciation6,215.015,640.185,299.754,735.984,258.063,795.32

Net Block8,598.637,774.527,197.705,782.945,752.745,190.54

Capital Work in Progress775.09714.80833.131,469.50476.21761.16

Investments12,362.4511,118.249,792.687,939.916,688.625,443.47

Inventories710.67761.09854.47629.57589.36644.14

Sundry Debtors1,320.100.001,003.371,974.321,976.311,587.97

Cash and Bank Balance67.86413.1759.26235.1166.9745.50

Total Current Assets2,098.631,174.261,917.102,839.002,632.642,277.61

Loans and Advances6,704.236,010.984,313.882,690.142,205.442,493.82

Fixed Deposits0.000.001,028.09602.181,210.670.00

Total CA, Loans & Advances8,802.867,185.247,259.076,131.326,048.754,771.43

Deferred Credit0.000.000.000.000.000.00

Current Liabilities6,330.912,127.453,261.802,391.911,767.971,624.05

Provisions825.24850.80866.66702.49702.57651.99

Total CL & Provisions7,156.152,978.254,128.463,094.402,470.542,276.04

Net Current Assets1,646.714,206.993,130.613,036.923,578.212,495.39

Miscellaneous Expenses0.000.000.000.000.000.00

Total Assets23,382.8823,814.5520,954.1218,229.2716,495.7813,890.56

Contingent Liabilities21,759.26929.30825.971,229.25849.43978.44

Book Value (Rs)55.3251.6749.54470.93443.83390.36

Key Financial Ratios of Tata Power Company

Mar '14Mar '13Mar '12Mar '11Mar '10

Investment Valuation Ratios

Face Value1.001.001.0010.0010.0010.00

Dividend Per Share1.251.151.2512.5012.0011.50

Operating Profit Per Share (Rs)9.658.537.5563.9878.3750.79

Net Operating Profit Per Share (Rs)36.3540.3236.11290.82299.37327.74

Free Reserves Per Share (Rs)----41.74399.41372.15308.95

Bonus in Equity Capital0.470.470.470.470.470.51

Profitability Ratios

Operating Profit Margin(%)26.5521.1520.9022.0026.1715.49

Profit Before Interest And Tax Margin(%)18.3516.1312.9913.6818.7810.63

Gross Profit Margin(%)19.7417.3514.2514.6019.4410.96

Cash Profit Margin(%)16.6013.4916.9818.1018.6310.88

Adjusted Cash Margin(%)16.6013.4916.9818.1018.6310.88

Net Profit Margin(%)10.279.9512.4412.7812.8812.32

Adjusted Net Profit Margin(%)10.279.9512.4412.7812.8812.32

Return On Capital Employed(%)10.0910.189.798.079.907.32

Return On Net Worth(%)7.268.359.948.428.9910.66

Adjusted Return on Net Worth(%)7.268.358.727.368.475.56

Return on Assets Excluding Revaluations55.3251.6749.54470.93443.83390.36

Return on Assets Including Revaluations55.3251.6749.54470.93443.83390.36

Return on Long Term Funds(%)10.8210.7210.168.399.947.67

Liquidity And Solvency Ratios

Current Ratio0.971.301.481.552.391.64

Quick Ratio1.131.641.531.742.171.77

Debt Equity Ratio0.780.910.780.630.570.61

Long Term Debt Equity Ratio0.660.810.710.560.550.53

Debt Coverage Ratios

Interest Cover2.723.514.163.534.023.33

Total Debt to Owners Fund0.780.910.780.630.570.61

Financial Charges Coverage Ratio3.394.055.104.315.024.15

Financial Charges Coverage Ratio Post Tax2.783.054.384.164.394.86

Management Efficiency Ratios

Inventory Turnover Ratio12.1412.5714.5017.7918.9815.49

Debtors Turnover Ratio6.5919.075.763.493.994.83

Investments Turnover Ratio12.1412.5714.5017.7918.9815.49

Fixed Assets Turnover Ratio0.580.710.690.660.710.81

Total Assets Turnover Ratio0.370.400.410.380.430.52

Asset Turnover Ratio0.370.430.440.400.470.58

Average Raw Material Holding------------

Average Finished Goods Held------------

Number of Days In Working Capital-17.0865.52151.18171.99181.32123.79

Profit & Loss Account Ratios

Material Cost Composition0.141.7463.7263.1861.2873.86

Imported Composition of Raw Materials Consumed------------

Selling Distribution Cost Composition----0.780.880.740.67

Expenses as Composition of Total Sales3.893.767.371.700.784.47

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit35.4726.6525.3831.5330.0727.75

Dividend Payout Ratio Cash Profit21.9519.6617.0620.4519.9920.38

Earning Retention Ratio64.5373.3571.0763.9568.0846.76

Cash Earning Retention Ratio78.0580.3481.4177.7479.2168.58

AdjustedCash Flow Times6.658.015.765.294.356.44

Earnings Per Share4.024.324.9339.6739.9341.65

Book Value55.3251.6749.54470.93443.83390.36