A Study on Capital Budgeting at TVS Motor Company, Hosur.Pdf
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Project Report (17MBA407) on “A STUDY ON CAPITAL BUDGETING AT TVS MOTOR COMPANY, HOSUR” BY T.Ravi Reddy 1AZ17MBA50 Submitted to VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELAGAVI In partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Under the guidance of INTERNAL GUIDE EXTERNAL GUIDE Mallika B K Mr. Prakashchandra Assistant Professor, Senior HR , Department of MBA,AIT TVS motor company Department of MBA Acharya Institute of Technology, Soldevanahalli, Hesaragatta Main Road, Bengaluru March 2019 TVS MOTOR COMPANY HosurKothagondapalli .>fl:._ Tamil Nadu-635126 TVS 16 /02 / 2019 Hosur CERTJFJCATE We hereby certify that Mr. T. Ravi Reddy (Reg No. 1AZ17MBA50) a studentoi MBA at A~haryalnstituteofTechnology. Bengaluru hasfinishedhis work in ourorgan isaiononan academic project en~~ed "'A study on Capital Budgeting at TVS Motor Comp,ny" and he has submitted a report to us on his learning. He was working on the project between 03 101/2019to16 / 02 12019.Hiscode andconductwerefoundtobesaUsfacto,,yduringhis !enurewith us . Hewas assigm,d to Mr. Prakash Chandra duoing his stay with us Yourssi=ly ForTVSMotorCornpany ACHARYA INSTITUTE OF TECHNOLOGY (Affi li ated to Visvesva raya Te chno log ica l Un ive rsity, Belagavi, App ro ved by AICTE, New Delhi and Acc red ited by NBA and NAAC) Date: 04/04/2019 CERTIFICATE This is to certify that Mr. T Ravi Reddy bearing USN 1AZ17MBA50 1s a bonafide student of Master of Business Administration course of the Institute 2017-19 batch, affiliated to Visvesvaraya Technological University, Belgaum. Project rep011 on "A Study on Capital Budgeting at TVS Motor Company, Hosur" is prepared by him under the guidance of Prof. Mallika BK, in partial fulfillment of the requirements for the award cf the degree of Master of Business Administration, Visvesvaraya Technological University, Belagavi, Karnataka. __J Signature of Internal Guide Signature of Principal/Dean Academics Dr. Devarajaiah R.M. , ,, ·~ ~ean-Academics ,·,Lr ;_;-i F{YA INSTl.,.,i.,..,- - -t'.'~·- . ,. l •• \. I! C: ! ~~ . ~: .. ; ... : '; ;:_<C)L(>:·y ::1,.... , .._ ..,_ ••• ,.;, l ~ ) Al" ! :..,; ,i • Acharya Dr. Sarvepa lli Rad hak ri shnan Road , So lc1devanaha lli, Acharya PO , Be nga luru 560 107, Karna taka , Ind ia vvww acharya ac in/ait • Ph +91 -80-225 555 55 Extn . • 2102 Fax +91-80 -237 002 42 E-ma il pri nc ipa lait@acharya .ac .in DECLARATION I, T.Ravi Reddy, hereby declare that the Project report entitled "A study on capital budgeting at TVS Motors" with reference to "TVS MOTORS, Hosur" prepared by me under the guidance of MALLIKA BK, faculty of M.B .A Depa1iment, Acharya • Institute of Technology and external assistance by PRAKESH CHANDRA, Senior Officer HR, at TVS Motors I also declare that this Project work is towards the partial fulfillment of the university Regulations for the award of degree of Master of Business Administration by Visvesvaraya Technological University, Belagavi. I have undergone a summer project for a period of Sixweeks. I further declare that this Project is based on the original study underiaken by me and has not been submitted for the award of any degree/diploma from any other University / Institution -,~;~ Place: Bangalore Signature of ffle sh1dent Date: 08/04/2019 ACKNOWLEDGEMENTS I wish to express my sincere thanks to our respected Principal, Dr. Prakash M R, beloved Dean-Academics, Dr. Devarajaiah R M, and deep sense of gratitude to Dr. M M Bagali, HOD, Acharya Institute of Technology, Bengaluru for their kind support and encouragement in completion of the Internship Report. I would like to thank MALLIKA B K, Professor, Department of MBA, Acharya Institute of Technology, Bengaluru and external guide Mr PRAKESH CHANDRA, Senior Officer HR TVS MOTORS ,Hosur who gave me golden opportunity to do this wonderful Project in the esteemed organization, which helped me to learn various concepts Finally, I express my sincere thanks to my Parents, Friends and all the Staff of MBA department of AIT for their valuable suggestions in completing this Project Report. Place: Bangalore T.RAVI REDDY Date: 08/04/2019 SN:1AZ17MBA50 TABLE OF CONTENTS CHAPTER TITLE PAGE NO. EXECUTIVE SUMMARY INTRODUCTION 1.1 Introduction about internship 3 1.2 Industry profile 3-6 1.3 Company profile 6-7 1.4 Promoters, Vision, Mission & Quality Policy 7 Chapter 1 1.5 Product/ Services profiles 7 1.6 Infrastructure facilities 8 1.7 Competitors information 9 1.8 SWOT analysis 9-10 1.9 Future growth and prospects 10-12 1.10 Financial statement 13-20 CONCEPTUAL BACKGROUND AND REVIEW OF LITERATURE Chapter 2 2.1 Theoretical background of the study 22-26 2.2 Review of literature 27-30 RESEARCH DESIGN 3.1 Statement of the problem 32 3.2 Need for the study 32 3.3 Objectives 32 Chapter 3 3.4 Scope of the study 32 3.5 Research methodology 32-33 3.6 Hypothesis 33 3.7 Limitations 34 3.8 Chapter scheme 35 ANALYSIS AND INTERPRETATION Chapter 4 4.1 Data analysis and interpretation 36-52 FINDIINGS, CONCLUSION AND SUGGESTIONS Chapter 5 5.1 Summary of findings 54 5.2 Suggestions/ Recommendation 55 5.3 Conclusion 55 Bibliography 56-57 Annexure 58-62 LIST OF TABLES Table No. Particulars Page No. 1.1 Table showing Balance sheet 13-15 1.2 Table showing Profit and loss 16-17 4.1 Table showing Net present value 37 4.2 Table showing Payback period 39 4.3 Table showing Account rate of return 40 4.4 Table showing Cash flow statement 41 4.5 Table showing Return on net worth 45 4.6 Table showing Return on capital and employed 46 4.7 Table showing Return on asset 47 4.8 Table showing Cash earnings rent ion ration 49 4.9 Table showing Valuation of ratio 50 4.10 Table showing Retention ratio 51 LIST OF FIGURES AND GRAPH Graph No. Particulars Page No. 1.1 Graph showing Noncurrent liabilities 17 1.2 Graph showing Current liabilities 18 1.3 Graph showing Total net current liabilities 19 1.4 Graph showing Current assets 20 4.1 Graph showing Net present value 38 4.2 Graph showing Pay back period 39 4.3 Graph showing accounting rate of return 40 4.4 Graph showing net cash flow from operating activities 41 4.5 Graph showing net used in investing activities 42 4.6 Graph showing net cash used in investing activities 43 4.7 Graph showing net used for financing activities 44 4.8 Graph showing return on net worth and equity 45 4.9 Graph showing return on capital and employed 47 4.10 Graph showing return on assets 48 4.11 Graph showing cash earning retention ratio 49 4.12 Graph showing valuation ratio 50 4.13 Graph showing retention ratio 52 Executive summary The summer project that do is to get an experience of how the corporate world function and how the theory is different from the practical aspects of the industry. For the same purpose got an opportunity for my project at TVS motors located at Hosur. The first chapter of the project report, the basic information regarding the industry like industry major players, industry competitiveness and their products The second chapter consist data regarding company profile, like vision, mission, quality policy and its products. Information collected from both primary and secondary sources. Third chapter tells about the conceptual background it comprises information regarding capital budgeting, and its various technique like NPV, ARR, PBP and IRR etc. and literature review. in while chapter four will give information about research design like type research methodology used, method used for data collection and also limitation. Chapter fourth comprises data analysis and interpretation in which financial statement of the company is analyzed by using various ratios. And last chapter will tells about findings ,suggestion and conclusion regarding the project. 1 CHAPTER-1 INTRODUCTION 2 CHAPTER 1 1.1INTRODUCTION TO PROJECT: The project report at TVS motor company, Hosur on the topic capital budgeting has been done for a period of six weeks. The report is first to have the theoretical insight about the techniques of capital budgeting and how practically these techniques can be applied to the manufacturing sector like TVS Motor company before making the investment in any proposals. Capital budgeting is a tool for maximizing a company's future profits since most companies are able to manage only a limited number of large projects at any one time. 1.2INDUSTRY PROFILE Capital planning is the apparatus for amplifying an organization future benefit since most of the organizations can oversee just a set no of vast activities at one time industry profile in 1991 by the Dr.Manmohan singh vehicle business is growing rapidly in India.As of now, India is the second biggest maker of bikes. Just China and Japan are in accordance with the clearance of two-wheeled vehicles and bikes. In 2005-2006, the yearly generation of bikes in India was 7600801 units. The pattern of responsibility for wheeled vehicles is in charge of India's novel decent variety. The most critical part of numerous pieces of India is poor open transport. Moreover, bicycles have a lot of adaptability and versatility for the Indian family. Bajaj Auto began exchanging the imported Vespa bike in 1948. In the interim, Automobile Products of India (APII) began delivering bikes in the nation in the mid 50s. Until 1958, the API and Enfield were the bike creator in India. Be that as it may, Bajaj marked a specialized organization with Piaggio in Italy during the 1960s to deliver bikes. The understanding finished in 1971. The state of bike makers was not extraordinary. Until the mid-80s, just three noteworthy bike producers in India were Rajdoot, Escorts, and Enfield.