Maruti Suzuki Key Ratios

The increase in ROE from 7.2% in 2022 to 16.8% in 2024 is primarily driven by a significant improvement in PAT margin, indicating higher profitability from net sales.Asset turnover showed variability but overall contributed positively, suggesting that the company effectively utilized its assets to generate revenue, particularly peaking in 2023.Leverage remained stable with a minor increase, indicating that debt levels are consistent and not significantly impacting ROE, hence the enhanced ROE is mainly a result of profitability.

Inventory days showed a slight increase, suggesting the company is holding more stock, potentially indicating a slower inventory turnover which could lead to cash flow issues.Receivable days have significantly increased, reaching almost 12.74 days by 2025, indicating the company may face challenges in collecting payments promptly, negatively impacting cash flow.Payable days have also increased, suggesting Maruti is taking longer to settle its obligations, which while beneficial for cash flow, raises concerns over supplier relationships.

ROE increased significantly over the four years, reflecting strong equity efficiency, driven primarily by improved profitability.ROCE also demonstrated robust growth, surpassing ROE in the recent years, showing effective utilization of both equity and debt, which is essential for capital investment.ROA trends upward but less aggressively than ROE and ROCE, indicating that while asset efficiency is improving, it is not the primary driver of overall returns.