Tata Motors on 8th February
reported a loss of about 26,961 crores. This is the highest ever loss by Tata
Motors in any quarters. This is also the highest by any company listed on the
Dalal Streets.
This loss
was largely caused by one time exceptional non-cash charge for asset impairment
of 3.1 Billion (2,20,99,59,00,000.00 Indian
Rupee) at its subsidiary JLR.
What
is Non-Cash Charge?
A company will take a non-cash charge against
non-cash items on the
balance sheet, such as depreciation, amortization, and depletion. These charges are typically
made when something unusual happens, often outside the control of the company.
What happened in case of JLR?
JLR that has a lion share is affected due
to Brexit and poor sales in the Chinese Market. The company’s forecast suggests
that if the trend continues then the revenue in the fourth quarter will be very
poor compared to the previous year revenue.
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