+ 44 20 8144 3706Introduction
Tata Motors is one of well known car and truck manufacturing company across globe. Currently, the firm is operating in multiple nations of the world. In the current piece of work, two improvements that have taken place in the international finance markets are explained. A source of finance and dividend policy followed by Tata Motors is given in research work. This report also includes ratio analysis and results are also been identified. In this manner, whole research has been take place.
Two recent developments in the International financial market:
It can be observed that in recent years economic conditions at global level change at a very fast pace. Since recession that commence at 2008 banks and other financial institutions are adopting a more cautious approach so that NPA can be lower down in the business. Now a day’s increasingly banks specially those operating at international level are making use of AI and machine learning algorithms to identify applicants those can be defaulted in the upcoming time period. This technology is also used to identify current debtors which may be defaulter in the upcoming year.
Thus, in this way these technologies assist banks to maintain low NPA in their business and earn more profit in the business (Components of international financial management., 202). This affects Tata Motors as its become hard for the firm to get a loan on the business that are unprofitable or are earning a moderate profit. The firm needs to finance its needs through consortium finance approach under which multiple banks altogether finance company requirements. ZestFinance is the company which developed AI based software solutions which assist banks to evaluate applicant profile and determine whether it will be able to pay it entire loan amount on time in the near future time period. Tata Motors in future time period will need to make more strong efforts to get loan from any international bank easily. If financial condition is not good of the company then in that case it will get loan at higher interest rate.
Many countries Central bank reduce interest rates and this is another major change that is seen in the world. This makes the loan cheaper and now due to this reason banks have to give low interest rate on bank loans. Thus, finance cost for banks reduced due to reduction in interest rate by the central banks. Thus, if Tata Motors will take loan from banks that are related to relevant central banks then in that case finance cost will be lower down in the company business.
Conclusion:
On the basis of the above discussion, it is concluded that there is significant importance of ratio analysis for the firms. Business firms must time to time use ratio analysis method and by using it must evaluate performance of the company. On the basis of Evaluation Company management must identify areas where improvement needs to be made in the business. It is also concluded that global financial environment is changing at a fast pace and it will heavily affect business firms. Tata Motors are using both equity and debt to finance entire business. However, the firm failed to perform up to the expected level. It needs to work on multiple areas to improve its performance.
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