Report on Financial Statements an

ements and financial position of Reliance Industri

Prepared by :

Batch:

Industries Ltd.

Prepared by : Sumeet Baid

Jonny Paul
Samyak Jain
Pranav Garg
PGP Mumbai
2014-2016

55
22
43
40

Company >> Finance >> Balance Sheet

Reliance Industries Ltd
Industry :Refineries
(Rs in Crs)
Year
SOURCES OF FUNDS :
Share Capital
Reserves Total
Equity Share Warrants
Equity Application Money
Total Shareholders Funds
Secured Loans
Unsecured Loans
Total Debt
Other Liabilities
Total Liabilities
APPLICATION OF FUNDS :
Gross Block
Less : Accumulated Depreciation
Less:Impairment of Assets
Net Block
Lease Adjustment
Capital Work in Progress
Investments
Current Assets, Loans & Advances
Inventories
Sundry Debtors
Cash and Bank
Loans and Advances
Total Current Assets
Less : Current Liabilities and Provisions
Current Liabilities
Provisions
Total Current Liabilities
Net Current Assets
Miscellaneous Expenses not written off
Deferred Tax Assets
Deferred Tax Liability
Net Deferred Tax
Other Assets
Total Assets
Contingent Liabilities

Mar 14
3,232.00
193,842.00
0
17
197,091.00
11,203.00
78,765.00
89,968.00
0
287,059.00
287,059.00
222,565.00
113,159.00
0
109,406.00
0
41,716.00
86,062.00
42,932.00
10,664.00
36,624.00
11,743.00
101,963.00
64,142.00
4,167.00
68,309.00
33,654.00
0
161
12,376.00
-12,215.00
28,436.00
287,059.00
50,645.00

Mar 13
1.13
3,229.00
67.53 176,766.00
0.00
0
0.01
25
68.66 180,020.00
3.90
6,626.00
27.44
65,801.00
31.34 72,427.00
0.00
0
100.00 252,447.00
77.53 213,154.00
39.42 103,406.00
0.00
0
38.11 109,748.00
0.00
0
14.53
19,116.00
29.98
52,509.00
0.00
14.96
42,729.00
3.71
11,880.00
12.76
49,547.00
4.09
11,454.00
35.52 115,610.00
0.00
22.34
49,523.00
1.45
4,348.00
23.80 53,871.00
11.72
61,739.00
0.00
0
0.06
100
4.31
12,293.00
-4.26 -12,193.00
9.91
21,528.00
100.00 252,447.00
17.64
47,403.00

http://www.capitaline.com

Mar 12

Mar 11

Mar 10

1.28
3,271.00
70.02 162,825.00
0.00
0
0.01
1
71.31 166,097.00
2.62
10,013.00
26.07
58,434.00
28.69 68,447.00
0.00
0
100.00 234,544.00

1.39
3,273.00
69.42 148,267.00
0.00
0
0.00
10
70.82 151,550.00
4.27
10,104.00
24.91
57,499.00
29.18 67,603.00
0.00
0
100.00 219,153.00

1.49
3,270.37
67.65 133,900.24
0.00
0
0.00
1.36
69.15 137,171.97
4.61
11,670.50
26.24
50,824.19
30.85 62,494.69
0.00
0
100.00 199,666.66

84.44 205,493.00
40.96
91,770.00
0.00
0
43.47 113,723.00
0.00
0
7.57
7,754.00
20.80
54,008.00
0.00
16.93
35,955.00
4.71
18,424.00
19.63
39,598.00
4.54
11,338.00
45.80 105,315.00
0.00
19.62
44,216.00
1.72
4,258.00
21.34 48,474.00
24.46
56,841.00
0.00
0
0.04
85
4.87
12,207.00
-4.83 -12,122.00
8.53
14,340.00
100.00 234,544.00
18.78
45,104.00

87.61 221,253.00
39.13
78,546.00
0.00
0
48.49 142,707.00
0.00
0
3.31
12,228.00
23.03
37,652.00
0.00
15.33
29,825.00
7.86
17,442.00
16.88
27,135.00
4.83
7,032.00
44.90 81,434.00
0.00
18.85
49,403.00
1.82
4,601.00
20.67 54,004.00
24.23
27,430.00
0.00
0
0.04
181
5.20
11,743.00
-5.17 -11,562.00
6.11
10,698.00
100.00 219,153.00
19.23
48,700.68

100.96 215,864.71
35.84
62,604.82
0.00
0
65.12 153,259.89
0.00
0
5.58
12,138.82
17.18
23,228.62
0.00
13.61
26,981.62
7.96
11,660.21
12.38
13,462.65
3.21
10,274.62
37.16 62,379.10
0.00
22.54
36,848.04
2.10
3,565.43
24.64 40,413.47
12.52
21,965.63
0.00
0
0.08
242.95
5.36
11,169.25
-5.28 -10,926.30
4.88
0
100.00 199,666.66
22.22
17,650.06

Mar 09

Mar 08

Mar 07

1.64
1,642.78
67.06 124,730.19
0.00
0
0.00
1.42
68.70 126,374.39
5.84
10,697.92
25.45
63,206.56
31.30 73,904.48
0.00
0
100.00 200,278.87

0.82
1,453.39
62.28
78,312.81
0.00
1,682.40
0.00
0
63.10 81,448.60
5.34
6,600.17
31.56
29,879.51
36.90 36,479.68
0.00
0
100.00 117,928.28

1.23 1,453.35
66.41 62,513.78
1.43
0
0.00
0
69.07
###
5.60 9,569.12
25.34 18,256.61
30.93
###
0.00
0
100.00
###

1.58
68.10
0.00
0.00
69.69
10.42
19.89
30.31
0.00
100.00

108.11 149,628.70
31.35
49,285.64
0.00
0
76.76 100,343.06
0.00
0
6.08
69,043.83
11.63
21,606.49
0.00
13.51
14,836.72
5.84
4,571.38
6.74
22,176.53
5.15
13,127.64
31.24 54,712.27
0.00
18.45
32,689.58
1.79
3,010.90
20.24 35,700.48
11.00
19,011.79
0.00
0
0.12
247.51
5.59
9,973.81
-5.47
-9,726.30
0.00
0
100.00 200,278.87
8.84
19,278.00

74.71 104,229.10
24.61
42,345.47
0.00
0
50.10
61,883.63
0.00
0
34.47
23,005.84
10.79
22,063.60
0.00
7.41
14,247.54
2.28
6,227.58
11.07
4,280.05
6.55
18,130.67
27.32 42,885.84
0.00
16.32
21,045.47
1.50
2,992.62
17.83 24,038.09
9.49
18,847.75
0.00
0
0.12
310.53
4.98
8,183.07
-4.86
-7,872.54
0.00
0
100.00 117,928.28
9.63
24,308.69

88.38
35.91
0.00
52.48
0.00
19.51
18.71
0.00
12.08
5.28
3.63
15.37
36.37
0.00
17.85
2.54
20.38
15.98
0.00
0.26
6.94
-6.68
0.00
100.00
20.61

108.43
39.08
0.00
69.35
0.00
8.20
17.70
0.00
13.22
4.07
2.00
13.30
32.59
0.00
18.37
1.87
20.24
12.35
0.00
0.32
7.93
-7.61
0.00
100.00
30.89

99,532.77
35,872.31
0
63,660.46
0
7,528.13
16,251.34
12,136.51
3,732.42
1,835.35
12,209.07
###
16,865.53
1,712.87
###
11,334.95
0
297.64
7,279.66
-6,982.02
0
###
28,356.90

Mar 06

Mar 05

1,393.17
48,411.09
0
0
###
7,664.90
14,200.71
###
0
###

1.94 1,393.09
67.55 39,010.23
0.00
0
0.00
0
69.49
###
10.69 7,972.90
19.81 10,811.69
30.51
###
0.00
0
100.00
###

2.35
65.91
0.00
0.00
68.26
13.47
18.27
31.74
0.00
100.00

84,970.13
29,253.38
0
55,716.75
0
6,957.79
5,846.18

118.56
40.82
0.00
77.74
0.00
9.71
8.16
0.00
14.12
5.81
2.99
11.36
34.29
0.00
17.53
5.43
22.96
11.33
0.00
0.17
7.11
-6.94
0.00
100.00
25.59

93.14
42.02
0.00
51.11
0.00
8.16
28.81
0.00
12.52
6.64
6.10
22.81
48.07
0.00
23.08
5.87
28.94
19.13
0.00
0.62
7.83
-7.21
0.00
100.00
15.47

10,119.82
4,163.62
2,146.16
8,144.85
###
12,563.50
3,890.98
###
8,119.97
0
121.7
5,092.52
-4,970.82
0
###
18,339.06

55,125.82
24,872.83
0
30,252.99
0
4,829.29
17,051.46
7,412.88
3,927.81
3,608.79
13,503.03
###
13,659.72
3,471.80
###
11,320.99
0
366.64
4,633.46
-4,266.82
0
###
9,153.89

Company >> Finance >> Profit & Loss

Reliance Industries Ltd
Industry :Refineries
(Rs in Crs)
Year
INCOME :
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Administration Expenses
Miscellaneous Expenses
Less: Pre-operative Expenses Capitalised
Total Expenditure
Operating Profit
Interest
Gross Profit
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
Adjst. below Net Profit
P & L Balance brought forward
Statutory Appropriations
Appropriations
P & L Balance carried down
Dividend
Preference Dividend
Equity Dividend %
Earnings Per Share-Unit Curr
Earnings Per Share(Adj)-Unit Curr

Mar 14(12)

Mar 13(12)

401,302.00
11,185.00
390,117.00
8,936.00
-412
398,641.00

100.67 371,119.00
2.81
10,822.00
97.86 360,297.00
2.24
7,998.00
-0.10
3,317.00
100.00 371,612.00

329,837.00
10,153.00
3,370.00
6,778.00
8,548.00
857
715
358,828.00
39,813.00
3,206.00
36,607.00
8,789.00
27,818.00
5,812.00
0
22
21,984.00
1,810.53
20,173.47
0
8,610.00
0
21,268.00
9,326.00
2,793.00
0
95
66.55

91.92 306,629.00
2.83
7,166.00
0.94
3,354.00
1.89
6,359.00
2.38
8,755.00
0.24
662
0.20
98
100.00 332,827.00
11.10
38,785.00
0.89
3,036.00
10.20
35,749.00
2.45
9,465.00
7.75
26,284.00
1.62
5,244.00
0.00
0
0.01
37
6.13
21,003.00
0.50
1,286.52
5.62
19,716.48
0.00
1,116.00
2.40
7,609.00
0.00
0
5.93
21,118.00
2.60
8,610.00
0.78
2,628.00
0.00
0
0.03
90
0.02
63.66
0.00

 Book Value-Unit Curr

http://www.capitaline.com

609.76

0.17

554.17

Mar 12(12)
99.87 339,792.00
2.91
9,888.00
96.96 329,904.00
2.15
6,192.00
0.89
872
100.00 336,968.00
0.00
82.51 276,255.00
1.93
4,094.00
0.90
2,862.00
1.71
6,309.00
2.36
6,925.00
0.18
749
0.03
37
89.56 297,157.00
10.44
39,811.00
0.82
2,667.00
9.62
37,144.00
2.55
11,394.00
7.07
25,750.00
1.41
5,150.00
0.00
0
0.01
560
5.65
20,040.00
0.35
1,233.53
5.31
18,806.47
0.30
0
2.05
6,514.00
0.00
0
5.68
18,945.00
2.32
7,609.00
0.71
2,531.00
0.00
0
0.02
85
0.02
60.01
0.00

Mar 11(12)
100.84 258,651.00
2.93
10,481.00
97.90 248,170.00
1.84
3,052.00
0.26
3,243.00
100.00 254,465.00
0.00
81.98 194,698.00
1.21
2,255.00
0.85
2,624.00
1.87
6,600.00
2.06
6,807.00
0.22
333
0.01
30
88.19 213,287.00
11.81
41,178.00
0.79
2,328.00
11.02
38,850.00
3.38
13,608.00
7.64
25,242.00
1.53
4,320.00
0.00
0
0.17
636
5.95
20,286.00
0.37
224.22
5.58
20,061.78
0.00
0.55
1.93
4,999.45
0.00
0
5.62
18,772.00
2.26
6,514.00
0.75
2,385.00
0.00
0
0.03
80
0.02
60.8
0.00

Mar 10(12)
101.65 200,399.79
4.12
7,938.77
97.53 192,461.02
1.20
2,460.32
1.27
3,947.89
100.00 198,869.23
0.00
76.51 150,915.03
0.89
2,706.71
1.03
2,307.73
2.59
5,578.24
2.68
5,549.74
0.13
-11.48
0.01
1,217.92
83.82 165,828.05
16.18
33,041.18
0.91
1,997.21
15.27
31,043.97
5.35
10,496.53
9.92
20,547.44
1.70
3,111.77
0.00
0
0.25
1,200.00
7.97
16,235.67
0.09
187.8
7.88
16,047.87
0.00
0
1.96
5,384.19
0.00
0
7.38
16,620.41
2.56
4,999.45
0.94
2,084.67
0.00
0
0.03
70
0.02
48.59
0.00

0.15

498.22

0.15

446.3

0.18

392.51

Mar 09(12)
100.77 146,328.07
3.99
4,369.07
96.78 141,959.00
1.24
2,148.40
1.99
427.56
100.00 144,534.96
0.00
75.89 107,010.32
1.36
3,355.98
1.16
2,357.40
2.80
3,704.00
2.79
4,619.24
-0.01
1,379.92
0.61
3,265.65
83.39 119,161.21
16.61
25,373.75
1.00
1,745.23
15.61
23,628.52
5.28
5,195.29
10.33
18,433.23
1.56
1,206.50
0.00
56.87
0.60
1,860.54
8.16
15,309.32
0.09
40.61
8.07
15,268.71
0.00
0
2.71
4,363.29
0.00
0
8.36
14,288.42
2.51
5,384.19
1.05
1,897.05
0.00
0
0.04
130
0.02
95.24
0.00

Mar 08(12)
101.24 139,269.46
3.02
5,463.68
98.22 133,805.78
1.49
6,615.62
0.30
-1,867.16
100.00 138,554.24
0.00
74.04
96,311.56
2.32
2,052.84
1.63
2,049.95
2.56
3,951.40
3.20
4,882.01
0.95
547.3
2.26
175.46
82.44 109,619.60
17.56
28,934.64
1.21
1,077.36
16.35
27,857.28
3.59
4,847.14
12.75
23,010.14
0.83
2,604.96
0.04
47
1.29
899.89
10.59
19,458.29
0.03
4,111.75
10.56
15,346.54
0.00
48.1
3.02
2,765.37
0.00
0
9.89
17,908.47
3.73
4,363.29
1.31
1,631.24
0.00
0
0.09
130
0.07
131.97
0.00

Mar 07(12)
100.52 118,353.71
3.94
6,654.68
96.57 111,699.03
4.77
478.28
-1.35
654.6
100.00 112,831.91
0.00
69.51
78,692.94
1.48
2,261.69
1.48
2,045.95
2.85
3,486.87
3.52
5,342.31
0.40
588.85
0.13
111.21
79.12 92,307.40
20.88
20,524.51
0.78
1,188.89
20.11
19,335.62
3.50
4,815.15
16.61
14,520.47
1.88
1,617.10
0.03
40.34
0.65
919.63
14.04
11,943.40
2.97
-312.17
11.08
12,255.57
0.03
0.51
2.00
3,029.09
0.00
0
12.93
12,207.63
3.15
2,765.37
1.18
1,440.44
0.00
0
0.09
110
0.10
84.28
0.00

0.20

727.78

0.50

542.83

0.39

439.67

Mar 06(12)
104.89
5.90
99.00
0.42
0.58
100.00
0.00
69.74
2.00
1.81
3.09
4.73
0.52
0.10
81.81
18.19
1.05
17.14
4.27
12.87
1.43
0.04
0.82
10.59
-0.28
10.86
0.00
2.68
0.00
10.82
2.45
1.28
0.00
0.10
0.07
0.00

89,124.46
8,246.67
80,877.79
682.92
2,131.19
83,691.90
58,342.31
1,146.26
932.09
2,217.72
5,765.46
461.19
155.14
68,709.89
14,982.01
877.04
14,104.97
3,400.91
10,704.06
900
30.72
704
9,069.34
74.91
8,994.43
0
8,967.86
0
15,008.11
3,029.09
1,393.51
0
100
63.7

Mar 05(12)
106.49
9.85
96.64
0.82
2.55
100.00
0.00
69.71
1.37
1.11
2.65
6.89
0.55
0.19
82.10
17.90
1.05
16.85
4.06
12.79
1.08
0.04
0.84
10.84
0.09
10.75
0.00
10.72
0.00
17.93
3.62
1.67
0.00
0.12
0.08
0.00

73,164.10
7,245.27
65,918.83
1,603.38
-524.35
66,997.86
45,931.87
907.94
791.21
1,937.13
2,826.38
352.09
9.6
52,737.02
14,260.84
1,468.66
12,792.18
3,723.50
9,068.68
705
0
792
7,571.68
31.94
7,539.74
-4.17
5,592.06
0
4,191.71
8,967.86
1,045.13
0
75
53.3

109.20364
10.814181
98.389456
2.3931809
-0.782637
100
0
68.55722
1.3551776
1.1809482
2.8913312
4.2186124
0.5255242
0.0143288
78.714484
21.285516
2.1920999
19.093416
5.5576402
13.535776
1.0522724
0
1.1821273
11.301376
0.0476732
11.253703
-0.006224
8.3466248
0
6.2564834
13.385293
1.5599453
0
0.1119439
0.0795548
0

0.39

324.11

0.39

270.43 0.4036398

Solvencyposition
Solvency position of a company is measured by the solvency ratios such as Interest
Coverage Ratio, Debt-Equity Ratio, Total Solvency position of a company is measured by the
solvency ratios such as Interest Coverage Ratio, Debt-Equity Ratio, Total Assets to Debt
Ratio etc. Theseratiosareusedbymoneylendersandinvestorstocheckwhether
thecompanywillbeabletorepaytheloanornot

InterestCoverageRatio
InterstCoverageRatio=EBIT/InterestExpenses
Comment
Interest Coverage Ratio measures the number of times a
company could make the interest payments on its debt
with its EBIT. It determines how easily a company can pay
interest expenses on outstanding debt. RIL has a good
Interest Coverage Ratio which means that it is solvent
enough to pay off its interest expenses on its outstanding
debtSince the current ratio of Reliance Industries Limited
is very close to Rs. 1.5, we can say that the company is in
a good position to pay off its short term liabilities

DebtequityRatio
DebtEquityRatio=LongtermDebt/Shareholders
funds
Comment
As the value of the acid-test ratio is less than but close to
1, the company is stable in paying off its short term
obligations in time
CapitalGearingRatio
Capitalgeraringratio=Longtermdebt+Preference
shareholders/EquityShareholdersFund
Comment
Since deployment of debt is cheaper than equity as interst
on debt is tax deductable, unlike dividend on equity shares
which attract corporate dividend tax. Deployment of debt
in the capital structure of the company incereases EPS.
RIL has don e the same thing by deploying more of debt
and thereby increasing EPS. It is visible in increse of
Capital Gearing Ratio from 0.24to0.32

Since deployment of debt is cheaper than equity as interst

on debt is tax deductable, unlike dividend on equity shares
which attract corporate dividend tax. Deployment of debt
in the capital structure of the company incereases EPS.
RIL has don e the same thing by deploying more of debt
and thereby increasing EPS. It is visible in increse of
Capital Gearing Ratio from 0.24to0.32

InterestCoverageRatio
InterstCoverageRatio=EBIT/Interestexpense
Comment
It measures the number of times by which interest
expense of the company is covered by the earnings of the
company. In RIL, interst coverage ratio is 9.68 which
signifies that the earnings are 9.68 times the interest
obligatipn which in turn implieas that the company is
financially fit to serve its interest obligations.

as Interest
is measured by the
Assets to Debt
ocheckwhether

Year

Mar 14(12)

Debt Equity Ratio

0.32

Capital Gearing Ratio

Interest Coverage Ratio

0.32
9.68

Mar 13(12)
0.24
0.24
9.66

Liquidityposition
Liquidity ratios are the ratios that measure the ability of a company to meet its shortterm
debtobligations. These ratios measure the ability of a company to pay off its short-term
liabilities when they fall due. The liquidity ratios are a result of dividing cash and other liquid
assets by the short term borrowings and current liabilities. They show the number of times the
short term debt obligations are covered by the cash and liquid assets.Ifthevalueisgreater
than1,itmeanstheshorttermobligationsarefullycovered. Generally,thehigher
theliquidityratiosare,thehigherthemarginofsafetythatthecompanyposesto
meetitscurrentliabilities.Liquidityratiosgreaterthan1indicatethatthecompanyis
ingoodfinancialhealthanditislesslikelyfallintofinancialdifficulties.

QuickRatio
Acid-TestRatio=(CurrentAssets-Inventory)/CurrentLiabilities
Acid-TestRatio=

0.86

Comment
As the value of the acid-test ratio is less than but close to 1, the company
is stable in paying off its short term obligations in time

CurrentRatio
CurrentRatio=CurrentAssets/CurrentLiabilities
Comment
Ideally, Current ratio should be 2, while Current Ratio value of 1.5 is also
acceptable. It implies that to pay off a current liability of Re. 1, the
company has a current asset of Rs. 1.5. Since the current ratio of Reliance
Industries Limited is very close to Rs. 1.5, we can say that the company is
in a good position to pay off its short term liabilities

SuperQuickRatio
SuperQuickRatio=(CurrentAssets-Inventory-
Receivables)/CurrentLiabilities
Comment
While the super quick ratio has decreased from 1.13 to 0.71, so the ability
to pay off highly liquid assets for current liabilities has decreased which is
not a favourable sign.
CashRatio

CashRatio=Cash+MarketableSecurities/CurrentLiabilities
Comment
Since the Cash Ratio is applicable to very high liquid assets, the fall in its
value to almost half has been phenomenal and thus hampering cash flow
for the company.
AccountsRecievableurnover
AccountsRecievableTurnover=NetCreditSales/AverageDebtors
Comment
As the Accounts Receivable turnover has increased from 23.78 to 34.61
which shows that the debtors have paid more debt compared to last year
and is a positive sign for the company.
DaysSalesOutstanding
DaysSalesOutstanding=365/AccountsRecievableTurnover
Comment
As the Days Sales Outstanding has decreased from the past year, so it
shows that at the end of the day, the amount which remains to be sold has
decreased by almost one third;again a good sign for the company.

InventoryTurnover
InventoryTurnover=Netsales/AverageInventory
Comment
The inventory turnover is almost the same with a very slight decrease in it
value which is not very significant. A high Inventory Turnover is favourable
as it shows inventories are getting converted to sales faster.

DaysSalesInInventory
DaysSalesInInventory=365/InventoryTurnover
Comment
Likewise, the day sales in inventory doesnt show appreciable changes
apart from the fact that it shows a slight increase in the inventory that is
left at the end of the day. It is suppose to be as low as possible.

y to meet its shortterm

o pay off its short-term
ding cash and other liquid
ow the number of times the
ts.Ifthevalueisgreater
. Generally,thehigher
thecompanyposesto
dicatethatthecompanyis
difficulties.

Year

Mar 14(12)

Quick Ratio
Current Ratio

0.86
1.49

Super Quick Ratio

0.71

Cash Ratio
Accounts Recievable Turnover
Days Sales Outstanding
Inventory Turnover
Days Sales In Inventory

0.54
34.61
10.55
9.11
40.07

Mar 13(12)
1.35
2.15

1.13
0.92
23.78
15.35
9.16
39.86

Year
ROE
ROA(%)
Profit
Capital Employed
ROI(%)

Mar 14(12)
10.70
7.48
30795.00
287059.00
10.73

Mar 13(12)
11.39
8.10
30505.00
252447.00
12.08

ROI
ReturnonInvestment(ROI) is performane measure used to evaluate the efficiency of investment.
is one of the most commonly used appoaches for evaluating the feasibility and viability of investment
ROI=NetProfitafterInterestandTax/TotalInvestment

Comment
RIL has an ROI of 10.73%which means that on every 100 Rupees of investment, it is earning Rs.
10.73.But ROI has fallen from 12.08% in the previous year to 10.73% in the current year which sho
worse utilisation of invested funds

efficiency of investment. It
nd viability of investment.

estment

tment, it is earning Rs.

e current year which shows

ProfitabilityPosition
Profitability position of a company is measured by the profitability ratios such as Net Profit
Ratio, Return on Capital Employed etc.

NetProfitRatio

ReturnOnCapitalEmployed

NetProfitRatio=(Netprofit
aftertax*100/NetSales)

ReturnOnCapitalEmployed=(EBIT*
100/TotalCapital)

Comment

Comment

Net Profit Ratio of 5.03% is higher

than other firms in petrochemicals
industry which varies from 0.83% to
3.45%. It means that the company
is earning good profit as a
percentage of sales revenue

Net Profit Ratio of 5.03% is higher than

other firms in petrochemicals industry which
varies from 0.83% to 3.45%. It means that
the company is earning good profit as a
percentage of sales revenue

GrossProfitRatio

PriceEarningRatio

GrossProfitRatio=(GrossProfit
*100/NetSales)

PriceEarningRatio=Market
Price/EarningperShare

Comment
Net Profit Ratio of 5.03% is higher
than other firms in petrochemicals
industry which varies from 0.83% to
3.45%. It means that the company
is earning good profit as a
percentage of sales revenue

Comment
The P/E ratio is a valuation ratio of a
company's current price per share compared
to its earnings per share.A higher P/E ratio
means that the market is more willing to pay
for the earnings of the company which is the
case here.

OperatingProfitRatio

ReturnOnEquity(ROE)

OperatingProfitRatio=
EBIT*100/Sales

ROE=PAT/Shareholders'Equity

Comment
Operating Ratio indicates how much
profit a company makes after paying
for variable cost of production such
as wages, raw materials etc. Since it
has fallen as compared to the
previous year, it means the
profitability of the company has
come down

It measures the efficiency of utilisation of

shareholder's fund. There hasnt been a
significant change in it but it has decreased
slightly and a decrease in ROE is not
favourable s it shows that shareholder's
equity is not getting properly utilised.

ReturnOnTotalAssets
ReturnOnTotal
Assets=EBIT*100/TotalAssets

Return on Assets (ROA) is a financial

ratio that shows the percentage
ofprofit that a company earns in
relation to its overall resources. It
has decreased from last year.

tion

rofitability ratios such as Net Profit

ReturnOnCapitalEmployed

rnOnCapitalEmployed=(EBIT*
100/TotalCapital)
Comment

Profit Ratio of 5.03% is higher than

firms in petrochemicals industry which
from 0.83% to 3.45%. It means that
company is earning good profit as a
percentage of sales revenue

PriceEarningRatio
PriceEarningRatio=Market
Price/EarningperShare

Comment
e P/E ratio is a valuation ratio of a
ny's current price per share compared
earnings per share.A higher P/E ratio
that the market is more willing to pay
e earnings of the company which is the
case here.
ReturnOnEquity(ROE)

OE=PAT/Shareholders'Equity

easures the efficiency of utilisation of

reholder's fund. There hasnt been a
cant change in it but it has decreased
ghtly and a decrease in ROE is not
ourable s it shows that shareholder's
uity is not getting properly utilised.

Year

Mar 14(12)

Mar 13(12)

Net Profit Ratio

ReturnOnCapitalEmployed
Gross profit Ratio
Price Earning Ratio
Operating Ratio

5.31
5.03
20.36
11.94
11.1117946667 11.141641479
7.9524860491

8.1377308165

Return on Equity
Return on Total Assets

10.2356119762
8.7301051305

10.952383069
9.5717522313

PricetoSalesRatio
PriceToSalesratio=MarketCapitalisation/
NetSales
Comment
This ratio implies the amount whiich investor has to
invest for unit of sales revenue. Aratio lower than 1
is cosidered one. Since RIL s Price to Sales ratio is .
64, the investor has to invest Rs. 64 per unit of
sales revenue

PricetoBookValue
PricetoBookValue=MarketPrice/BookValue
Price
Comment
This is the ratio between market value and intrinsic
value of a share.a ratio more than one implies that
investors are optimistic abut the growth of the
company in the future. Price to Book Value of RIL is
1.52, which shows the optimism of the investors
and positive sentiments in the market about the
company

PricetoEarnings
PricetoEarnings=MarketPriceper
share/Earningspershare
Comment
It is the ratio between market value of a share and
the earning per share. Hogher the PE ratio, better it
is. RILs PE ratio of 13.97 again signifies the positive
sentiment in the market.

Year
Price to sales

Price to Book Value

Price to Earning

Mar 14
0.64

1.52
13.97

No of shares in current year

No of shares in previous year
Book Value/Share
Market Price

609.83
929.50

Mar 13
0.70

1.40
12.22

3231901858
3228663382
557.57
778.15

Economic Value Added = NOPAT-Cost of Capital

NOPAT (Net Operating Profit After Tax)+ Profit After Tax + Finance Cost
Cost of Capital Assumed to be 12%
Capital employed = Shareholders Funds + Long term Borrowings
EVA

Mar-14

Mar-13

23,379.47

22,752.48

259,802.00
-7,796.77

242,731.00
-6,375.24

Market Value Added= Market Capitalisation-Book Value of Capital Employed

Mar-14
1033142777011

Mar-13
1218E+011

Comment on overall performance of the com

Solvency position of Reliance Industries Limited is good because of low share of debt funds in th
coverage ratio which in turn signifies that the company is financially stable to pay of its interest o
But as far as the liquidity is concerned, a quick ratio less than one impies that the liquid assets ar
liabilities. An analysis of debtors turnover ratio tells us that the average collection period has fall
year to 10.55 in the current year. Which means the company is now able to convert its debtors in
has fallen from 12.08% in the previous year to 10.73% in the current year which shows worse uti
Equity as well as Return on assets has fallen down significantly, which in turn shows the worse ut
sentiments are positive toward the company and investors are optimistic about the growth of th
price to book value ratio of 1.52 as well as price to earning ratio at 13.97. As the CFO of the comp
concentrate on the operational efficiency of the company by putting more efforts to increase the s
by pairing some indirect expenses.

ormance of the company

low share of debt funds in the capital structure and high interest
stable to pay of its interest obligation as and when they fall due.
mpies that the liquid assets are not sufficient to satisfy the current
age collection period has fallen down from 15.35 in the previous
able to convert its debtors into cash with a greater efficiency. ROI
t year which shows worse utilisation of invested funds. Return on
h in turn shows the worse utilisation of funds. But still the market
mistic about the growth of the company. It can be observed from
3.97. As the CFO of the company, I would advice the company to
more efforts to increase the sales revenue or increase profitability
direct expenses.