Paper Contents
Abstract
This study examines the profitability, asset utilization, and financial leverage of select automobile companies by analyzing key ratios such as return on equity (ROE), return on assets (ROA), and financial leverage ratios. The analysis covers the period from 2020 to 2024, utilizing secondary data sourced from balance sheets and profit and loss accounts.The findings indicate that Maruti Suzuki demonstrates excellent profitability, efficient asset utilization, and appropriate financial leverage, resulting in higher returns reflected in both ROE and ROA. In contrast, Tata Motors and Apollo Tyres show weaknesses in asset efficiency and capital utilization, leading to lower returns.The study reveals a correlation among net profit margin (NPM), asset turnover ratio (ATR), financial margin (FM), ROE, ROA, and return on capital employed (ROCE). These factors are interrelated and significantly impact the financial performance of these companies. In conclusion, the researcher asserts that Maruti Suzuki outperforms its competitors in terms of profitability and shareholder returns. However, there is substantial potential for Tata Motors and Apollo Tyres to enhance their asset utilization and capital efficiency. The results suggest that employing DuPont analysis can effectively highlight the financial strengths and weaknesses within the automobile industry
Copyright
Copyright © 2024 R .PADMAVATHI. This is an open access article distributed under the Creative Commons Attribution License.
