Tata Corporation Case Study

Tata chemicals is one of the biggest chemical companies in India that has been in the market for more than 75 years which means that it is truly an Indian organization that has flourished in the Indian market and others entering can make it an example of how to be successful in the market with the correct sort of capital mix and financial structure. The consolidated turnover has seen an increase to 15735 in the year 2014 which continues the pattern of steady growth that has been witnessed by the organization throughout its history. Earnings per share have been in negative while the net worth has increased. The share price and the market capitalization has also gone down. The reported loss was mainly because of exceptional items like impairment

Long term loans have n=increased for the company mainly due to advance taxes short term loans however decreased due to option premium receivables. The operating cash increased due to lower investments and higher receivables Net sales increased by 8% due to higher volumes being traded in the Indian market which also signifies the huge potential in the local market. The reduction on interest rates also means that borrowing is being encourages and for the company it means lower debt repayments Current asset ratio of 1.3 also signifies the ability to repay its short term debts which in turn means that the supply chain which in=s the back bone of any organization has minimum implications on it in terms of any financial distress as the businesses financial position is healthy. The debt to equity ratio is also favorable despite having low interest rates this shows the type of structural balance that the company has maintained despite continuous expansion. Amongst the Indian market the structure of Tata seems more favorable because of the know-how of the local market and adjustment made with due

It is involved in the manufacturing of Chemicals that are used in the manufacturing if rubbers paints and etc. The company finances its day to day operations through internal cash flows and the available banking facilities. The company’s debt to equity ratio was calculated at 93.14, which means that the company’s liabilities are very high and the financing very much dependent on debt financing. The current ratio is 0.62 which also shows that company’s financial health is not good. And the quick ratio is even lower further signifying the critical condition that the company is in. Interest coverage is also in -0.51. As compared to the industry that is averaging at 35.28% gross margin it stands at a mere 6.42 which shows that this structure is not feasible at all. However, the Local government is also supportive of a competitive environment and together with the growth potential South Korea can be dubbed a good market