Submitted by

A STUDY ON FINANCIAL STATEMENT ANALYSIS OF RELIANCE INDUSTRIES
Project report to be submitted to Bharathiar University

In Partial Fulfilment of the Requirements for the Award of
the Degree of
B.Com (Accounting & Finance)
Submitted by
ABISHEK. A. MENON
19BAF001
Under Guidance and Supervision of
Dr. KAVITHA.S, M.BA, M.Phil, Ph.D
G R D School of Commerce and International Business

Dr.G.R.DAMODARAN COLLEGE OF SCIENCE
(Autonomous and affiliated to Bharathiar University; recognised by the UGC) Re-accredited at the
‘A’ Grade level by the NAAC and ISO 9001:2008 Certified Institution Coimbatore - 641 014.
APRIL 2022
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G R D School of Commerce and International Business
Dr.G.R.DAMODARAN COLLEGE OF SCIENCE
(Autonomous and affiliated to Bharathiar University; recognised by the UGC) Re-accredited at the
‘A’ Grade level by the NAAC and ISO 9001:2008 Certified Institution Coimbatore - 641 014.
CERTIFICATE
This is to certify that the project work entitled “A Study on Financial statement analysis of Reliance
Industries” submitted to the Bharathiar University, in partial fulfilment of the requirement for the
award of the Degree of Bachelor of Commerce with Accounting and Finance is a record of original
research work done by ABISHEK.A. MENON (19BAF001), in School of Commerce and
International Business at Dr. G R Damodaran College of Science, Coimbatore, affiliated to Bharathiar
University, under my supervision and guidance and the project work has not formed the basis for the
award of any Degree, Diploma, Associateship, Fellowship or any other similar title of any candidate of
any University.
_______________________ ___________________
CO-ORDINATOR GUIDE
_______________________ ___________________
HEAD OF THE DEPARTMENT DIRECTOR
Submitted for the Viva-Voce Examination held on-----------------------------
___________________ ___________________
INTERNAL EXAMINAR EXTERNAL EXAMINAR
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DECLARATION
I ABISHEK.A . MENON (19BAF001) hereby declare that the project work entitled “A Study On
Financial statement analysis of Reliance Industries” submitted to GRD School of Commerce and
International Business, in partial fulfillment of the requirement for Degree of Bachelor of Commerce
with Accounting and Finance in the Bharathiar University, is a record of original work done by me
under the supervision of Dr. KAVITHA, ASSOCIATE PROFESSOR, School of Commerce and
International Business, Dr. G R Damodaran College of Science, and it has not formed the basis for the
award of any Degree, Diploma, Associateship, Fellowship or any other similar title of any candidate of
any University.
PLACE : Coimbatore
DATE : SIGNATURE OF THE CANDIDATE
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ACKNOWLEDGEMENT
First of all, let me pay obeisance to God almighty for giving me the self-confidence, courage and
patience to complete this valuable project.
I am grateful to Dr. D PADMANABAN, B.Com., MBA., Ph.D (Mgt)., FCMI (UK),. Mem.AMA
(USA)., MIMA, Chariman and Correspondent, Dr. G R Damodaran College of Science and Dr. T
Santha, M.Sc., PGDCA., M.Phil (Maths)., M.Phil (CS)., Ph.D., Principal, of our college for
providing me an opportunity to undergo the research work in this esteemed institution.
I also wish to express my deep sense of gratitude to our Respected Director Dr.K.K.Ramachandran,
M.Com.,MBA.,MFT.,M.Phil., PGDCA., Ph.D. (Commerce)., Ph.D.(Management)., for his
unfaltering faith in his students and providing us with new ways to excel in the field of commerce.
My thanks to my guide the faculty “Dr. KAVITHA, ASSOCIATE PROFESSOR”, school of

Commerce and International Business, Dr. G R Damodaran College of Science for her valuable
guidance, enthusiastic effort and timely help towards the completion of the report.
I would like to extend my sincere thanks to Head of the Department, Coordinator, Tutor and all faculty
members of B.Com (A&F) of Dr. G R Damodaran College of Science for their support, continuous
help, and inspiration for the completion of the Institutional training report.
I also extend a huge thanks to my parents, friends and the almighty for having supported me in doing
this project.
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TABLE OF CONTENTS:
S.No Particulars Page No.
CHAPTER – I
1.1 Introduction to the study 1

1.2 Statement of Problem 6
1.3 Objectives of the study 6
1.4 Scope of the Study 6
1.5 Research Methodology 7
1.6 Limitations of the Study 21
1.7 Chapter Scheme 21
CHAPTER – II
2 REVIEW OF LITERATURE 22
CHAPTER – III
3 Introduction about the company 32
CHAPTER – IV
4 DATA ANALYSIS AND 40

INTERPRETATION
CHAPTER – V
5 FINDINGS, SUGGESTIONS, & 81

CONCLUSIONS
5.1 FINDINGS 82
5.2 SUGGESTIONS 83
5.3 CONCLUSIONS 84
BIBLIOGRAPHY
APPENDIX
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LIST OF TABLES:
S.no PARTICULARS Page

4.1 Current Ratio 40
4.2 Quick Ratio 42
4.3 Working capital turnover ratio 44
4.4 Gross profit 46
4.5 Net Profit 48
4.6 Operating profit 50
4.7 Inventory Turnover 54
4.8 Debtors turnover ratio 56
4.9 Debt Collection Period 58
4.10 Debt ratio 60
4.11 Debt Equity Ratio 62
4.12 Capital employed Network 64
4.13 Comparative balance sheet 2017-2018 67
4.17 Common size statement 71
4.18 Cash ratio 74
4.19 Creditors Turnover ratio 76
4.20 Cash to Current asset ratio 78
4.21 Cash turnover ratio 80
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CHAPTER 1
INTRODUCTION
1.1 INTRODUCTION ABOUT THE STUDY
Financial analysis is the process of identifying the financial strengths and weaknesses
of the firm by property establishing relationships between the item of the balance sheet and
the profit and loss account. There are many users of a company‟s financial statement like
Trade creditors, lender, Investor and management. They analyse the financial statement
according to their need. The first task of the financial analyst is to select the relevant
information to the decision under consideration from the total information contained in
financial statement. The second step is to arrange the information in a way to highlight
significant relationship. The final step is to interpretation and drawing of inferences and
conclusions.
In brief, financial analysis is the process of selection, relation and evaluation. The
financial statement provides a summarised view of financial position and operation of a firm.
Therefore, much can be learnt about a firm from a careful study of its financial statements.
The analysis of financial statements is an important aid to financial analysis. The analysis of
financial statements is a process of evaluating the relationship between component pats of
financial statements to obtain a better understanding of the firm‟s position and performance.
The traditional financial statements comprising the balance sheet and profit and loss account
is that they do not give all the information related to the financial operation of a firm.
Nevertheless, they provide some extremely useful information to the extent that the balance
sheet mirrors the financial position on a particulars date in terms of the structure of assets,
liabilities and owner‟s equity, and so on profit and loss account show the result of operations
during a certain period of time in terms of the revenue obtained and the cost incurred during
the year.
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Financial statements are the main and often the only source of information to the
lenders and the outside investors regarding a business‟s financial performance and condition.
In addition to reading through the financial statements, they use certain ratios calculated from
the figures in the financial
Statement to evaluate the profit performance and financial position of the business.
These key ratios are very important to managers as well, to say the least. The ratios are part
of the language of business. It would be embarrassing to a manager to display his or her
ignorance of any of these financial specifications for a business.
FINANCIAL STATEMENT ANALYSIS
A Financial statements paint a picture of the transactions that flow through a business.
Each transaction or exchange - for example, the sale of a product or the use of a rented a
building block - contributes to the whole picture. Let's approach the financial statements by
following a flow of cash-based transactions. In the illustration below, we have numbered four
major steps:
Financial statement is an organised collection of data. Its purpose is to convey an
understanding of various financial aspects of business firm. It may show a position at a
moment as in the case of activities over a given period of time in the of an income statements.
DEFINITION OF FINANCE
Finance is defined in numerous ways by different groups of people. Though it is

difficult to give a perfect definition of Finance following selected statements will help you
deduce its broad meaning.
In General sense,
"Finance is the management of money and other valuables, which can be easily
converted into cash."
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According to Experts,
"Finance is a simple task of providing the necessary funds (money) required by the
business of entities like companies, firms, individuals and others on the terms that are most
favourable to achieve their economic objectives."
According to Entrepreneurs,
"Finance is concerned with cash. It is so, since, every business transaction involves
cash directly or indirectly."
According to Academicians,
"Finance is the procurement (to get, obtain) of funds and effective (properly planned)
utilisation of funds. It also deals with profits that adequately compensate for the cost and risks
borne by the business."
FEATURES OF FINANCE
 Investment opportunities
 Profitable opportunities
 Optimal mix of funds
 System of internal controls
 Future decision making
FINANCIAL STATEMENT ANALYSIS
Financial statement analysis (or financial analysis) is the process of reviewing and
analyzing a company's financial statements, these statements include the Income Statement,
Balance Sheet, and Statement of Cash Flows. Financial statement analysis is a valuable tool
for gauging the financial stability and health of a company. Financial statement analysis is a
popular tool for investors, stakeholders and the key decision makers within the organization.
Two very popular methods of financial statement analysis are: horizontal and vertical
analysis and the use of financial ratios.
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HORIZONTAL AND VERTICAL ANALYSIS
Horizontal analysis compares financial information over a series of time, typically

from past quarters or years. Horizontal analysis is performed by comparing financial data
from a past statement, such as the income statement. When comparing this past information
one will want to look for variations such as higher/lower earnings. Vertical analysis is a
proportional analysis of financial statements. Each line item listed in the financial statement
is listed as the percentage of another line item. For example, on an income statement each
line item will be listed as a percentage of gross sales.
FINANCIAL RATIO ANALYSIS
Financial ratios are very powerful tools to perform some quick analysis of financial
statements. There are four main categories of ratios: liquidity ratios, profitability ratios,
activity ratios and leverage ratios. Liquidity ratios are used to determine how quickly a
company can turn it's assets into cash if it experiences financial difficulties or
companyruptcy. It essentially is a measure of a company's ability to remain in business;
therefore these ratios are very important. A few common liquidity ratios are: the current ratio
and liquidity index. The current ratio is current assets/current liabilities and measures how
much liquidity is available to pay for liabilities. The liquidity index shows how quickly a
company can turn assets into cash and is calculated by: (Trade receivables x Days to
liquidate) + (Inventory x Days to liquidate)/Trade Receivables + Inventory. Profitability
ratios are ratios that demonstrate how profitable a company is. A few popular profitability
ratios are the breakeven point and gross profit ratio. The breakeven point calculates how
much cash a company must generate to break even with their start up costs.
The gross profit ratio is equal to revenues minus the cost of goods sold. This ratio
shows a quick snapshot of expected revenue. Activity ratios are meant to show how well
management is managing the company's resources. Two common activity ratios are accounts
payable turnover and accounts receivable turnover. These ratios demonstrate how long it
takes for a company to pay off it's debts and how long it takes for a company to receive
payments, respectively. The fourth ratio category is leverage ratios, which depict how much a
company relies upon it's debt to fund operations. A very common leverage ratio used for
financial statement analysis is the debt-to-equity ratio.
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The ratio shows the extent to which management is willing to use debt in order to
fund operations. This ratio is calculated by Long-term debt + Short-term debt +
Leases/equity. Financial management overlaps with the financial function of the Accounting
profession. However, financial accounting is the reporting of historical financial information,
while financial management is concerned with the allocation of capital resources to increase a
firm's value to the shareholders. Financial risk management, an element of corporate finance,
is the practice of creating and protecting economic value in a firm by using financial
instruments to manage exposure to risk, particularly credit risk and market risk.
Other risk types include Foreign exchange, Shape, Volatility, Sector, liquidity,
Inflation risks, etc. It focuses on when and how to hedge using financial instruments; in this
sense it overlaps with financial engineering. Similar to general risk management, financial
risk management requires identifying its sources, measuring it, and formulating plans to
address these, and can be qualitative and quantitative. In the companying sector worldwide,
the Basel Accords are generally adopted by internationally active companys for tracking,
reporting and exposing operational, credit and market risks.
Finance is an important function of any business, as money is required to meet the

various activities of it. It has given birth to “Financial Management” as a separate subject.
The subject is of recent origin. It draws heavily on “Economics” for its theoretical concepts.
In the early half of the 20th century the job of financial management was largely confined to
the acquisition of funds. But as business firms continued to expand their markets and became
larger and more diversified, greater control of financial operation became highly essential.
Thus the scope of financial management is very wide and it is not merely restricted to raising
of capital.
It also covers other aspects of financing such as assessing the needs of capital, raising
sufficient amount of funds, cost of financing, budgeting, maintaining liquidity, lending and
borrowing policies, dividend policy, and so on. Financial management occupies a significant
place because it has an impact on all the activities of a firm. Its primary responsibility is to
discharge the finance function successfully. Thus financial management is an appendage of
the finance function. No one can think of any business activity in isolation from its financial
implications.
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1.2 STATEMENT OF PROBLEM
Analyzing financial performance is the process of evaluating the common

parts of financial statements to obtain a better understanding of firm‟s position
and performance. Financial performance analysis enables the investors and
creditors evaluate past and current performance and financial position, and to
predict future performance.
Financial statement is used to judge the profitability and financial soundness

of a firm. In this study, an attempt is made to identify the financial strength and
weakness of the firm by properly establishing relationship between the items in
the balance sheet and profit and loss account of Reliance Industries Limited.
1.3 OBJECTIVES OF THE STUDY
 To know the financial position of the concern through balance sheet.
 To analyze the efficiency of the firm through ratios.
 To analyze way & means to improve the present conciliation.
 To examine the overall performance of the company.
 To identify the strength, weakness, opportunities and threats of the Reliance with
the help of comparing the balance sheet.
1.4 SCOPE OF THE STUDY
 The project throws light on the need for financial management.

 The project was developed based on the annual balance sheet.
 The study will be helpful for the management to improve the financial
performance.
 This study would be a base for the students and financial advisors who are
carrying analysis for the same.
 The study also helps the concern for the further enhancement for their financial
ratios.
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1.5 RESEARCH METHODOLGY
The data that has been collected from various sources and presented in the form of
materialistic information is known as research methodology. Research methodology is a
systematic way to solve any research problem. It may be understood as a science of studying
how research is done scientifically.
Research in common parlance to search for knowledge. One can also define research
as a scientific and systematic research for prominent information on a specific topic.
The quality of the project work depends on the methodology adopted for the study.
Methodology, in turn, depends on the nature of the project work. The use of the proper
methodology is an essential part of any research. In order to conduct the study scientifically,
suitable methods and measures are to be followed.
1.5.1 NATURE OF THE STUDY
Research design is the arrangement of activities for the collection and analysis of the
data in a manner that aims to combine relevance to the purpose with economy in procedure.
The study carried out here is Analytical Research.
1.5.2 DATA COLLECTION
The source of data for the study is collected from secondary sources i.e, the annual
reports and balance sheet of Reliance Industries for last five financial years.
 Collection of data through company annual report, company manuals and other
relevant documents.
 By websites, text books and journals.
1.5.3 PERIOD OF STUDY
 The period of study covers only for 6 months from December 2021- June 2022.
 The period of study undertaken in the project is only 6 years.
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1.5.4 TOOLS APPLIED
 Ratios.
o Current ratio
o Quick ratio
o Absolute liquid ratio
o Proprietor‟s ratio
o Debt equity ratio
o Inventory turnover ratio
o Debtor‟s turnover ratio
o Working capital turnover ratio
o Net profit ratio
o Operating profit ratio
 Comparative Statement
 Common Size Statement
RATIO ANALYSIS
A ratio is the process of determining and presenting the relationship of items and
groups of items in the financial statements.
DATA SOURCE
Data collection was through literature survey and expert opinion. Literature survey
includes the collection of data from various sources like company agreement and statement,
handbooks as well as study material. A part of data` s was collected from primary data and
other was collected from the secondary data.
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Primary sources
Information gathered by interview and discussions with the head and employees of
various departments and my project guide.
Secondary sources
 Company annual report.
 Published information on finance.
 Internal circulation booklets.
 Company Websites
RATIO ANALYSIS AND INTERPRETATION
Ratio Analysis is a powerful tool o financial analysis. Alexander Hall first presented it
in 1991 in Federal Reserve Bulletin. Ratio Analysis is a process of comparison of one figure
against other, which makes a ratio and the appraisal of the ratios of the ratios to make proper
analysis about the strengths and weakness of the firm‟s operations. The term ratio refers to
the numerical or quantitative relationship between two accounting figures. Ratio analysis of
financial statements stands for the process of determining and presenting the relationship of
items and group of items in the statements.
Ratio analysis can be used both in trend analysis and static analysis. A creditor would
like to know the ability of the company, to meet its current obligation and therefore would
think of current and liquidity ratio and trend of receivable. Major tool of financial are thus
ratio analysis and Funds Flow analysis. Financial analysis is the process of identifying the
financial strength and weakness of the firm by properly establishing relationship between the
items of the balance sheet and the profit account.
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The financial analyst may use ratio in two ways. First he may compare a present ratio
with the ratio of the past few years and project ratio of the next year or so. This will indicate
the trend in relation that particular financial aspect of the enterprise. Another method of using
ratios for financial analysis is to compare a financial ratio for the company with for industry
as a whole, or for other, the firm‟s ability to meet its current obligation. It measures the
firm‟s liquidity. The greater the ratio, the greater the firms liquidity and vice-versa. A ratio
can be defined as a numerical relationship between two numbers expressed in terms of
 Proportion
 Rate
 Percentage.
It is also define as a financial tool to determine an interpret numerical relationship
based on financial statement yardstick that provides a measure of relationship between two
variable or figures.
Meaning and Importance
Ratio analysis is concerned to be one of the important financial tools for appraisal of
financial condition, efficiency and profitability of business. Here ratio analysis id useful from
following objects.
 Short term and long term planning
 Measurement and evaluation of financial performance
 Stud of financial trends
 Decision making for investment and operations
 Diagnosis of financial ills
 Providing valuable insight into firms financial position or picture
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ADVANTAGES OF RATIO ANALYSIS
Advantages
The following are the main advantages derived of ratio analysis, which are obtained
from the financial statement via Profit & Loss Account and Balance Sheet.
 The analysis helps to grasp the relationship between various items in the financial
statements.
 They are useful in pointing out the trends in important items and thus help the
management to forecast
 With the help of ratios, inter firm comparison made to evolve future market
strategies.
 Out of ratio analysis standard ratios are computed and comparison of actual with
standards reveals the variances. This helps the management to take corrective
action.
 The communication of that has happened between two accounting the dates are
revealed effective Action.
 Simple assessments of liquidity, solvency profitability efficiency of the firm are
indicted by ratio analysis. Ratios meet comparisons much more valid.
Ratios are simple to understand and easy to calculate. The analyst should not take
decision should not take decision on a single ratio. He has to take several ratios into
consideration.
STANDARDS OF COMPARISION
 Ratios calculated from the past financial statements of the same firm.
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 Ratio developed using the projected or performs financial statement of the same
firm
 Ratios of some selected firm especially the most progressive and successful, at the
same point of time.
 Ratios of the industry to which the firm belongs.
IMPORTANCE OF RATIO ANALYSIS
In the preceding discussion in the form, we have illustrated the compulsion and
implication of important ratios that can be calculated from the Balance Sheet and Profit &
Loss account of a firm. As a tool of financial management, they are of crucial significance.
The importance of ratio analysis lies in the fact and enables the drawing of inferences
regarding the performance of a firm. Ration analysis is a relevant in assessing the
performance of a firm in respect of the following aspect.
CAUTION IN USING RATIOS
 It is difficult to decide on the proper bases of comparison.
 The comparison rendered difficult because of difference in situation of two
companies or of one-company for different years.
 The price level change make the interpretation of ratios invalid
 The difference in the definition of items in the balance sheet and Profit & Loss
statement make the interpretation of ratios difficult.
 The ratios calculated at a point of time are less informative and defective as they
suffer from sort term changes.
 The ratios are generally calculated from the past financial statement and thus are
no indicators of future.
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The study undertaken mainly focused on gain in depth knowledge about the financial
position. The collected information were classified and tabulated to facilitate analysis using
statistical tools to achieve the objectives of the study undertaken.
RATIO ANALYSIS
Ratio analysis is a useful management tool that will improve your understanding of
financial results and trends over time, and provide key indicators of organizational
performance. Managers will use ratio analysis to pinpoint strengths and weaknesses from
which strategies and initiatives can be formed. Funders may use ratio analysis to measure
your results against other organizations or make judgments concerning management
effectiveness and mission impact. Ratio analysis is used to evaluate relationships among
financial statement items. The ratios are used to identify trends over time for one company or
to compare two or more companies at one point in time. Financial statement ratio analysis
focuses on three key aspects of a business: liquidity, profitability, and solvency.
Ratio analysis is a widely used tool of financial analysis. It is defined as the
systematic use of ratio to interpret the financial statements so that the strength and
weaknesses of a firm as well as its historical performance and current financial condition can
be determined. The term ratio refers to the numerical or quantitative relationship between two
variables. It refers to the systematic use of ratios to interpret the financial statements in terms
of the operating performance and financial position of a firm. It involves comparison for a
meaningful interpretation of the financial statements.
STEPS IN RATIO ANALYSIS
1. Selection of relevant various Accounting Data from the Financial Statements.
2. Computation of related Accounting Ratios using those selected Accounting
Data.
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3. Analysis and interpretation of those Accounting Ratios in a very significant,
logical and useful manner with an objective to obtain some conclusive financial
information of the enterprise.
4. Computed Ratios are generally compared with some predetermined standards to
make any comment as regards to the financial position of the enterprise.
IMPORTANCE OF RATIO ANALYSIS
 It helps in evaluating the firm‟s performance.
 It helps in inter-firm comparison.
 It simplifies financial statement.
 It is helpful in budgeting and forecasting.
 Liquidity position.
 Long term solvency.
 Operating efficiency.
CLASSIFICATION OF RATIOS
In view of the needs of various uses of ratios the ratios, which can be calculated from
the accounting data are classified into the following broad categories
A. Liquidity Ratio
B. Turnover Ratio
C. Solvency or Leverage ratios
D. Profitability ratios
1. CURRENT RATIO
Current ratio is also known as short-term solvency ratio or working capital ratio.
Current ratio is used to assess the short-term financial position of the business.
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Current assets are cash and those cash equivalent of a business which can be
converted into cash within a short period of time not exceeding a year. Cash in hand, cash at
company, bills receivables, sundry debtors, accrued incomes, prepaid expenses, inventory,
short term loans provided, advance given etc are the examples of current assets. The current
ratio or the working capital ratio measures the short term solvency i.e. the firm‟s ability to
meet short term obligations in a sound business a current ratio of 2:1 considered as ideal.
Current liabilities are those obligations of a business, which are to be paid within in a
short period of time not exceeding a year. Bills payable ,sundry creditors, short term loan
taken, income tax payable, dividend payable, advance incomes, accrued expenses are the
examples of current liabilities. In other words, it is an indicator of the firm's ability to meet its
short-term obligations. Current ratio is calculated by using following formula:
Current ratio = Current assets
Current liabilities
2. QUICK RATIO
Quick ratio is another measure of a company's liquidity. Quick ratio is also known as
liquid ratio or acid test ratio.
This ratio is used to assess the firm‟s short term liquidity. The relationship of liquid
asset to current liabilities is known as quick ratio. It is otherwise called as liquid ratio or acid
test ratio.
However, although it is used to test the short-term solvency or liquidity position of the
firm, it is a more stringent measure of liquidity than the current ratio.
Quick Ratio = Liquid assets

Current Liabilities
Liquid assets = Total current asset - stock - prepaid expenses
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3. ABSOLUTE LIQUID RATIO
Absolute liquid ratio is computed by dividing the absolute liquid assets by current
liabilities. Absolute liquid assets are equal to liquid assets minus accounts receivables
(including bills receivables).
It is modified form of liquid ratio. The relationship of absolute liquid asset to current
liabilities is known as absolute liquid ratio. This ratio is also called as super quick ratio. Some
examples of absolute liquid assets are cash, company balance and marketable securities etc.
Absolute liquid ratio = Absolute liquid assets
Current liabilities
4. PROPRIETOR’S RATIO
Proprietary ratio (also known as Equity Ratio or Net worth to total assets or
shareholder equity to total equity). Establishes relationship between proprietor's funds to total
resources of the unit. Where proprietor's funds refer to Equity share capital and Reserves,
surpluses and Tot resources refer to total assets.
Proprietary ratio relates the shareholders funds to total assets. It is a variant of the debt
equity ratio.
Proprietary ratio = Proprietor's funds
Total assets
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5. DEBT EQUITY RATIO
Debt Equity ratio is the ratio of total liabilities of a business to its shareholders'
equity. It is a leverage ratio and it measures the degree to which the assets of the business are
financed by the debts and the shareholders' equity of a business.
The financing total assets of a business concerns is done by owner‟s equity as well as
outside debts. How much fund has been provided by the owner‟s and how much by outsiders
in the acquisition of total assets is a very significant factor affecting the long-term solvency
position of a concern.
Total Liabilities
Debt Equity Ratio =
Shareholder’s Equity
6. INVENTORY TURNOVER RATIO
Inventory turnover is the ratio of cost of goods sold by a business to its average
inventory during a given accounting period. It is an activity ratio measuring the number of
times per period, a business sells and replaces its entire batch of inventory again.
This ratio is otherwise called as stock turnover ratio. It indicates whether stock has
been efficiently used or not. It establishes the relationship between the cost of goods sold
during a particular period and the average amount of stock in the concern.
Cost of Goods Sold

Inventory Turnover =
Average Inventory
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7. DEBTORS TURNOVER RATIO
Debtor‟s turnover ratio or accounts receivable turnover ratio indicates the velocity of
debt collection of a firm. In simple words it indicates the number of times average debtors
(receivable) are turned over during a year.
This is also called as “Debtors Velocity” or “Receivable turnover ratio”. A firm sells
goods on credit and cash basis. When the extends credits to its customers, book debts are
created in the firm‟s account. It is most essential that a reasonable quantitative relationship
between outstanding receivables and sales should always be maintained.
To solve the difficulty arising out of the non-availability of the information in respect
of credit sales and average debtors the alternative method is to calculate the debtor‟s turnover
in terms of relationship between total sales and closing balance of debtors.
Net Credit Sales
Debtors Turnover Ratio =
Average Trade Debtors
8. WORKING CAPITAL TURNOVER RATIO
The working capital turnover ratio measures how well a company is utilizing
its working capital to support a given level of sales. Working capital is current assets minus
current liabilities. A high turnover ratio indicates that management is being extremely
efficient in using a firm's short-term assets and liabilities to support sales.
A measurement comparing the depletion of working capital to the generation of sales
over a given period is the working capital ratio. This provides some useful information as to
how effectively a company is using its working capital to generate sales.
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The working capital turnover ratio measures the company‟s net sales from the
working capital generate. Note another ratio exists, the sales to interchange the usual
components of working capital.
Sales
Working Capital turnover =
Working Capital
9. NET PROFIT RATIO
Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as
percentage. The net profits are obtained after deducting income-tax and, generally, non
operating expenses and incomes are excluded from the net profits for calculating this ratio.
This ratio determines the overall efficiency of the business. The relationship of net
profit to sales is known as net profit ratio.
Net profit
Net Profit Ratio = × 100
Net sales
10. OPERATING PROFIT RATIO
Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales.
It is generally expressed in percentage. Operating ratio measures the cost of operations per
dollar of sales. This is closely related to the ratio of operating profit to net sales.
This ratio determines the operating efficiency of the business concern. Operating ratio
measure the amount of expenditure incurred in production, sales and distribution of output.
The relationship between operating cost to sales is known as operating ratio.
Cost of goods sold + operating expenses
Operating Ratio = × 100
Net sales
19
COMPARATIVE STATEMENT ANALYSIS
Comparative balance sheet as on two or more different dates can be used for
comparing assets and liabilities and findings out any increase or decrease in the items. Thus
while in single balance sheet the emphasis is on present position, it is on change in the
comparative balance sheet.
COMMON SIZE STATEMENT ANALYSIS
Common size statements indicate the relationship of various items with some
common items. In the income statements, the sales figure is taken as basis and all other
figures are expressed as percentage of sales. Similarly, in the balance sheet the total assets
and liabilities is taken as base and all other figures are expressed as percentage of this total.
20
1.6 LIMITATIONS OF THE STUDY
The limitations of the study are as follows:
 Only five years profit and losses are compared
 True financial position cannot be ascertain with five years comparison
 Certain ratios cannot be calculated every year
 The study is based on the secondary source of data
 Standard ratio cannot be ascertained properly.
1.7 CHAPTER SCHEME
This project is classified into five chapters as follows
CHAPTER 1
This chapter discussed about the introduction, objectives, research design,
methodology used under limitation of the study.
CHAPTER 2
This chapter gives the review of similar research conducted earlier
CHAPTER 3
This chapter provides company profile details.
CHAPTER 4
This chapter describes the comparison of profits for various years, analysis and
interpretation
CHAPTER 5
This chapter describes the findings, suggestions and conclusion of the study.
21
CHAPTER II
REVIEW OF LITERATURE
This part briefly reviews the studies conducted in India in respect of financial
performance management in Indian industries.
Chittenden (2021) states that financial performance management is particular

importance to the small business, with limited access to the long term capital markets, these
firms tend to rely more heavily on owner financing, trade credit and short-term company
loans to finance their needed investment in cash, accounts receivable and inventory.
Peel.M.J, Wilson.N.Howrth.C.A (2021) in their study revealed that small firms tend
to have a relatively high proportion of current assets, less liquidity exhibit volatile cash flows
and high reliance on short-term debt.
Dulta.J (2020) in his study he observed that the various components of working
capital, horticulture produce Marketing Corporation had not been used efficiently and net
financial performance position had worsened continuously during the period of study.
Prasad (2020) conducted a research study on the paper industry. He found that the
chief executives properly recognised the role of efficient use of financial performance in
liquidity and profitability, but in practice they could not achieve it he also identified that 50%
of the executives followed budgetary method in planning financial performance and financial
performance management was efficient due to sub-optimum utilization of working capital.
Abdul Raheman and Mohamed Nasr (2019)notes that Financial performance

Management has its effect on liquidity as well on Profitability of the firm. In this research, we
have selected a sample of 94 Pakistani firms listed on Karachi Stock Exchange for a period of
6 years from 1999 – 2019, we have studied the effect of different variables of financial
performance management including the Average collection period, Inventory turnover in
days, Average payment period, Cash conversion cycle and Current ratio on the Net operating
profitability of Pakistani firms. Debt ratio, size of the firm (measured in terms of natural
logarithm of sales) and financial assets to total assets ratio have been used as Control
variables.
22
Pearson‟s correlation, and regression analysis (Pooled least square and general least
square with cross section weight models) are used for analysis. The results show that there is
a strong negative relationship between variables of the financial performance management
and profitability of the firm. It means that as the cash conversion cycle Increases it will lead
to decreasing profitability of the firm, and managers can create a positive value for the
shareholders by reducing the cash conversion cycle to a possible minimum level. We find
that there is a significant negative relationship between liquidity and profitability. There is
also a significant negative relationship between debt used by the firm and its profitability.
Santanu.K.R.Ghosh and Santi.G.M (2019) examined the efficiency of financial

performance management of Indian cement companies from 1992-1993 to 2020-2018, three
index values representing the average performance of the components of current asset, the
degree of utilization of the total current asset in relation to sales and the efficiency in
managing the working capital, have been computed for the selected firms over the ten years
study period. They concluded that the Indian cement industry did not perform remarkably
during the period.
Parasuraman.N.R (2019) studied the financial performance practices in leading

pharmaceutical companies a view of the credit policy and profitability. The companies have
been ranked in the descending order of their sales turnover and the top 50 companies have
been taken up for his study. Further in order to check for relationship between credit period
given by the companies and their actual performance in terms of sales and profitability the
top ten companies have been taken up separately. He concluded that the financial
performance management practices are seen to be quite difference for top ten companies
compared to others.
Singh and Shishire (2018) attempted to study the financial performance components
and the impacts of on profitability of hindalco industries limited. They made an attempt to
study the correlation between liquidity profitability and profit before tax of hindalco.
Reddy.Y.V and Parker. S.B (2019) studied the size and its components and liquidity
management in factoring companies. They also studied the correlation between liquidity and
profitability of factoring companies. They concluded that the standard deviation and amount
to creditors are the major components of current asset and current liability respectively in
determining the size of the working capital.
23
Kessaven padachi (2018) notes that a well designed and implemented financial
performance management is expected to contribute positively to the creation of a firm‟s
value. The purpose of this paper is to examine the trends in financial performance
management and its impact on firm‟s performance. The trend in financial performance needs
and profitability of firm‟s are examined to identify the cause for any significant difference
between the industries.
The dependent variable, return on total asset in used as a measure of profitability and
the relation between financial performance management and corporate profitability is
investigated for a sample of 58 small manufacturing firms using panel data analysis for the
period 2020-2003. The regression results show that high investment in inventories and
receivables is associated with lower profitability.
Sahu.R.K (2018) in his study he investigated the usefulness of current and quick
ratios and builds a model involving those ratios to determine whether liquidity management
process in Indian paper industry is effective or not. He concluded that most of the paper
producing companies in India has been caught in a vicious down cycle facing a threat to their
viability.
Chakraborthy.P.K (2019) stated that the conventional method of measuring liquidity

would not be sufficient to cover analysis of amount and trend to internal , which is better
proposition to focus on a firms liquidity position than those based on financial ratios. He
discussed about the theory of corporate liquidity and flexibility by net liquid balance of
Shulman and Cox concluded that this is definitely a better approach to measure liquidity over
the conventional method of ratio analysis.
Grey Filback and Thomas M.Krueger(2017) highlighted the importance of efficient

financial performance management by analyzing the financial performance management
policies of 32 non- financial companies in U.S.A. they found that financial performance
practices were significantly difference over time. The key variables used in the analysis are
inventories days, accounts receivables days, accounts payables days, and cash conversion
cycle. A strong significant relationship between financial performance management and
profitability has been found in previous empirical work. The findings also reveal an
increasing trend in the short-term component of financial performance financing.
24
Bardia (2018) presented a comparative study on liquidity trends of sail and tisco. The
statistical methods such as index number, time series analysis, regression and Chi-Square test
had been employed in this study to examine the liquidity position of both companies. He
analyzed financial performance and sales relationship based of financial performance
turnover ratio using regression.
Teruel and Solano (2017) studied the effects of financial performance management on
the profitability of a sample of a small and medium sized Spanish firms the tested the effects
of financial performance management on the profitability. The concluded that the
profitability of firms will be improved by reducing inventories by decreasing the collection
period and shortening the cash conversion cycle.
Pradeep Singh (2016) argued that a firm which neglected the management of
inventories would have to face serious problems relating to long-term profitability and may
fail to survive with the help of better inventory management a firm could reduce the levels of
inventories to a considerable degree without any adverse effect on production and sales. He
evaluated turnover ratio and financial performance turn over ratios.
Jana (2014) in his article titled the product patent and its impact on financial
performance management of Ranbaxy laboratories limited, for the period of 2020-2017. The
researcher has taken the Ranbaxy laboratories limited as a sample company. He analyzed the
data through liquidity, operational and profitability indices using the ratios. Factor analysis
and simple regression. The study concludes that all the financial parameters were found to
have been increased during the new product patent period than during the earlier period.
Jasmine (2012) in his article titled financial performance management in Indian tyre
industry, for the period of 8 years from 1999-2017. The sample size is 4 companies. He
analyzed data through ratio, cash flow, common size and trend analysis. The study revealed
that there should be proper and efficient financial performance management does affect
positively or the profitability levels of the sample companies.
Huynhphuong Dong (2012) in his article titled the relationship between financial
performance management and profitability for the period of 2 years. The sample size is 130
firms. He analyzed data through mean, standard deviation, correlation, multiple regression
analysis. The result from the research found out that there is negative relationship between
number of day‟s inventories and profitability.
25
Amarjit (2012) in their article titled the relationship between financial performance
management and profitability evidence from the united state, a sample of 58 American firms
listed on new York stock exchange for a period of 3 years from 2017-2017 was selected. The
analyzed data through mean, standard deviation, Pearson bivariate correlation analysis,
weighted least square regression. The study found out that slow collection of accounts
receivables is correlated with low profitability.
Ranjith (2012) investigate the impact of firms capital expenditure on their financial
performance management of listed companies in Thailand stock exchange, for the period of
five years from 2020-2017. Statistical tools used in this study are regression analysis and
ANOVA. The study reveals that the capital expenditure has a significantly negative
relationship with financial performance requirements of the firms.
Thappa Sankar (2013) focuses on the importance of proper financial performance

management of Sun Pharmaceutical Company. The paper throws light on the concepts of
financial performance, financial performance policy, components of financial performance
and factors affecting financial performance in the Sun Pharma Industries Ltd during the last
seven years, and identifies certain factors which are responsible for the improvement of
financial performance of the company.
Ganesan Vedavinayagam (2013) studies the impact of financial performance

management on profitability through ANOVA test where the financial statements of 349
telecom units or enterprises are analyzed. The relationship between financial performance
management efficiency and profitability and the impact of financial performance
management on the same has been tested. At the end of the study the author has minutely
observed that the financial performance management efficiency in telecommunication
industry is poor. And he suggests that the telecommunication industry should improve
financial performance management efficiency.
Appuhami Ranjith B. A. (2012) investigates the impact of firms‟ capital expenditure

on their financial performance management. The data used in this article was collected from
listed companies in the Thailand Stock Exchange. In this work the writer has used Shulman
and Cox‟s (2009) net liquidity balance and financial performance requirement as a proxy for
financial performance measurement and developed multiple regression models.
26
At the end it is derived that the firms‟ capital expenditure has a significant impact on
financial performance management, and that the firms operating cash flow which was
recognized as a control variable, has a significant relationship with financial performance
management.
Samiloglu F. and Demirgunes K. (2012) intend to analyse the effect of financial

performance management on firm‟s profitability. To consider statistically significant
relationship between the firm‟s profitability and the components of cash conversion cycle at
length,va sample consisting of Istanbul Stock Exchange (ISE) listed manufacturing firms for
the period from 1989 to 2013 has been analysed under a multiple regression model. Empirical
findings of the study show that accounts receivable period, inventory period and leverage
affect firm‟s profitability negatively, while growth (in sales) affects firm‟s profitability
positively.
Virani Varsha (2012) has conducted a comparative analysis of CADILA healthcare

with the following objectives:
 To evaluate the financial performance

 To examine the profitability trend
 To ascertain the assets utilization pattern and evaluate liquidity position of the
company.
The author has used two sophisticated analytical tools for the analysis i.e. ratio analysis
and correlation analysis. The correlation between various ratios is depicted in the study. It is
observed that in most of the cases, correlation coefficient is near to 1. Hence, it can be said
that there is a high degree of positive and negative correlation between most of the ratios.
Ramudu Janaki P. and Rao Durga S. (2012) attempt to analyze both concept and research
based studies. Financial performance may be regarded as the lifeblood of any business unit.
Its effective management can do much more to the success of the business while its
ineffective management will undoubtedly lead to failure of the business. It is in this context
that the management of financial performance assumes paramount importance. In the present
scenario of competition, the business does not have any other option than reducing the cost of
its operations in order to survive and continue to be financially healthy. It is in this
connection effective management of financial performance forms an absolute part of cost
reduction.
27
In the present scenario of competition, the business does not have any other option than
reducing the cost of its operations in order to survive and continue to be financially healthy. It
is in this connection effective management of financial performance forms an absolute part of
cost reduction. As it is quite vivid and evident in many researches in any manufacturing unit,
barring knowledge industry.minimize the cost of production it has to tackle the cost of raw
material first.
Dinesh M. (2012) explicates the concepts of financial performance, the different

challenges being faced by the business firms in managing financial performance and the
strategies to be adopted for its prudent management. The author concludes with the view that
most of the businesses failed not for want of profit but for lack of cash. The fast growth in
production and sales may cause the business to utilize all of the financial resources seeking
growth and making assets such as inventories, accounts receivable and other assets as more
illiquid.
Narender Vunyale, Menon Shrijit and Shwetha V. (2012) examine the determinants of
financial performance management in cement industry in India. In this article, net liquid
balance and financial performance requirements were used by the authors as measures of
investing financial performance management of the industry. The factors like size, business
indicator, firm performance, growth of the firm, debt-equity ratio and operating cash flow are
taken into consideration. Overall, the paper concludes with the observation that only size of
firm affects both net liquid balance and financial performance ratio in a company‟s financial
performance management. The results suggest that there is a lack of consistent evidence of
the factors influencing financial performance management in the cement industry.
Dr.Khatik S. K. and Jain Rashmi (2011) state that the management of financial
performance is one of the most important and key resources of an organization for its day-to-
day operations. Financial performance can be taken as funding resources for routine activities
of business. It is the most vital and important part of fund management and profitability for
business. The writer has analyzed the financial performance position of MPSEB (Madhya
Pradesh State Electricity Board) by ratio analysis technique and it was found that the position
of current ratio, quick ratio, acid-test ratio, financial performance ratio, inventory turnover
ratio are not up to the standard benchmark.
28
REFERENCES
1. Chittenden.F 2021 “financial management and financial performance practices in

UKSMEs” Manchester, Manchester business school.
2. Peel.M.J Wilson‟s and Howorth.C.A (2021) “late payment and credit management in
the small firm sector Some Empirical Evidence”, International small business journal,
vol 18(2), pp 52-68.
3. Dulta.J (2020), “financial performance management of horticulture industry in HP – a
case study of HPMC”, finances India, vol. XV no.2, (June), pp.644.657.
4. Prasad.R (2020) “financial performance management in paper industry”, Finance
India, vol XV, no 1 (March) pp 185-188.
5. Abdul Raheman and Mohamed Nasr March 2017 “international review of business
research papers” vol 3 no 1 pp 279-300.
6. Santanu K.R, Ghosh and Santi Gopal Maji (2019) “financial performance
management efficiency A study on the Indian Cement Industry, The Management
Accountant, vol.39, no.5, pp 363-372.
7. Parasuraman .N.R (2019) “financial performance practices in leading pharmaceutical
companies, a view of the credit policy and profitability”, the management accountant,
vol 39, no 2, pp 998-1005.
8. Singh J.P and Shishire pandey (2018) “impact of financial performance management
in the profitability of hidalgo industries limited”, ICFAI University. Journal of
financial economics vol VI (4) pp 62-72.
9. Reddy. Y.V and Pakkar S.B (2019) “financial performance and liquidity management
in factoring a comparative study on SBI factors”, The Management Accountant,
vol.39, no.5, pp 373-378.
10. Kessaven padachi (2018) school of public sector policy and management, university
of technology, international review of business research papers” vol 2, No 2, Oct
2018, pp 45-58.
11. Sahu R.K (2018), “A simplified model for liquidity analysis of paper companies”,
The Management Accountant, vol.37, no.11, pp 805-808.
12. Chakraborthy.P.K (2019) “managing corporate liquidity and financial flexibility
approach”, the management accountant, vol.39, no.8, pp658-665.
29
13. Grey Filback, Thomas M Krueger (2017) “An analysis of financial performance
management. Result across industries”, American Journal of Business, vol 20(2), pp
11-18.
14. Bardia S.C (2018) “liquidity trends in Indian iron and steel industry. A comparative
study of sail and tisco”, ICFAI university, journal of financial economics vol.IV (1)
pp 45-53.
15. Teruel and solano (2017)”inventory and financial performance management”, an
empirical analysis ICFAI university journal of accounting research vol VI (3) pp 62-
68.
16. Pradeep Singh (2016) “inventory and financial performance management” an
empirical analysis ICFAI university, journal of accounting researchers, vol VII (2) pp
53-73.
17. Kajalbaran Jana (2014) the product patent and its impact on financial performance
management of Ranbaxy Laboratories limited. Indian Journal of Finance, aug-2014.
Vol 3(2).
18. Jasmine Kaur (2012), “financial performance management in Indian tyre industry”
international research journal of finance and economics ISSN 1450-2885 Issue 46
(2012).
19. Huynh Phuong dong (2012) “the relationship between financial performance
management and profitability, international research journal of financial and
economics, ISSUE 49 (2012).
20. Amarjit Gill, Nahum Bigar (2012) “the relationship between financial performance
management and profitability Evidence from the United State” Business and
Economics Journal, vol 3 (2012), BEJ -10.
21. Ranjith Appuhami B.A (2012) “the Impact of firms capital Expenditure on financial
performance management”, an empirical Study across Industries in Thailand,
International Management Review, Vol 4(1) pp 8-21.
22. Thappa Sankar, (2013), Financial performance Management in Sun Pharmaceutical
Industries Ltd. – A Case Study, Tecnia Journal of Management Studies, Vol. 2, No. 1,
pp. 45-52
23. Ganesan Vedavinayagam, (2013), An Analysis of Financial performance
Management Efficiency in Telecommunication Equipment Industry, Rivier Academic
Journal, Vol. 3, No. 2, pp. 1-10
30
24. Appuhami, Ranjith B. A., (2012), The Impact of Firms‟ Capital Expenditure on
Financial performance Management: An Empirical Study across Industries in
Thailand, International Management Review, Vol.4, No.1, pp. 8-21
25. Samiloglu, F. and Demirgunes, K., (2012), The Effects of Financial performance
Management on Firm Profitability: Evidence from Turkey, The International Journal
of Applied Economics and Finance, Vol. 2, No. 1, pp. 44-50
26. Virani, Varsha, (2012), CADILA Healthcare: A Comparative Analysis, The
Accounting World, ICFAI University Press, March 2012, pp. 37-48
27. Ramudu, Janaki P. and Rao, Durga S., (2012), Financial performance Management- A
Review of Research, Finance India, Vol. XXII, No. 1, pp.163-179
28. Dinesh, M., (2012), Financial performance Management: Challenges and Strategies,
The Accounting World, ICFAI University Press, April 2012, pp. 37-40
29. Narender Vunyale, Menon Shrijit and Shwetha V., (2012), Factors Determining
Financial performance Management in Cement Industry, South Asian Journal of
Management, Vol. 15, No. 4, pp. 64-78
31
CHAPTER III
3.1 ABOUT THE COMPANY
The Reliance group, founded by Dhirubhai H Ambani (1932-2002), is India‟s

largest private sector enterprise, with businesses in the energy and material value chain. The
flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the
largest private sector company in India. The chairman of the company is Mukesh Ambani.
The company is India‟s largest petrochemical firm and among the country‟s largest
companies (along with the likes of Indian Oil and Tata Group). Oil refining and the
manufacture of polyfines account for nearly all of Reliance‟s sales. It also makes textiles and
explores for oil and gas, though those businesses are relatively small. In 2009 the company
merged with its oil and gas refining subsidiary (Reliance Petroleum) in order to boost the
operational and financial synergies of Reliance as a major refining company.
Reliance Industries Limited (NSE: RELIANCE) is India's largest private sector

conglomerate (by market value) , with an annual turnover of US $ 35.9 billion and profit of
US$ 4.85 billion for the fiscal year ending in March 2008 making it one of India's private
sector Fortune Global 500 companies, being ranked at 206th position (2008). It was founded
by the Indian industrialist Dhirubhai Ambani in 1966. Ambani has been a pioneer in
introducing financial instruments like fully convertible debentures to the Indian stock
markets. Ambani was one of the first entrepreneurs to draw retail investors to the stock
markets. Critics allege that the rise of Reliance Industries to the top slot in terms of market
capitalization is largely due to Dhirubhai's ability to manipulate the levers of a controlled
economy to his advantage. Though the company's oil-related operations form the core of its
business, it has diversified its operations in recent years. After severe differences between the
founder's two sons, Mukesh Ambani and Anil Ambani, the group was divided between them
in 2006.
32
In September 2008, Reliance Industries was the only Indian firm featured in the
Forbes's list of "world's 100 most respected companies
Stock
According to the company website "1 out of every 4 investors in India is a Reliance
shareholder.”. Reliance has more than 3 million shareholders, making it one of the world's
most widely held stocks. Reliance Industries Ltd, subsequent to its split in January 2006 has
continued to grow. Reliance companies have been among the best performing in the Indian
stock market.
Products
Reliance Industries Limited has a wide range of products from petroleum products,
petrochemicals, to garments (under the brand name of Vimal), Reliance Retail has entered
into the fresh foods market as Reliance Fresh and launched a new chain called Delight
Reliance Retail and NOVA Chemicals have signed a letter of intent to make energy-efficient
structures. The primary business of the company is petroleum refining and petrochemicals. It
operates a 33 million tone refinery at Jamnagar in the Indian state of Gujarat. Reliance has
also completed a second refinery of 29 million tons at the same site which started operations
in December 2008. The company is also involved in oil & gas exploration and production. In
2002, it struck a major find on India's eastern coast in the Krishna Godavari basin. Gas
production from this find was started on April 2, 2009. As of the end of 3rd quarter of 2009-
2010, gas production from the KG D6 ramped up to 60 MMSCMD.
Subsidiaries
Major Subsidiaries & Associates
 Reliance Petroleum Limited (RPL) was a subsidiary of Reliance Industries Limited

(RIL) and was created to exploit the emerging opportunities, creating value in the
refining sector worldwide. Currently, RPL stands amalgamated with RIL.
 Reliance Life Sciences is a research-driven, biotechnology-led, life sciences

organization that participates in medical, plant and industrial biotechnology
opportunities. Specifically, these relate to Biopharmaceuticals, Pharmaceuticals,
Clinical Research Services, Regenerative Medicine, Molecular Medicine, Novel
Therapeutics, Bio-fuels, Plant Biotechnology and Industrial Biotechnology.
33
 Reliance Industrial Infrastructure Limited (RIIL) is engaged in the business of
setting up / operating Industrial Infrastructure that also involves leasing and providing
services connected with computer software and data processing.
 Reliance Institute of Life Sciences (Rils) established by Dhirubhai Ambani

Foundation, is an institution of higher education in various fields of life sciences and
related technologies.
 Reliance Logistics (P) Limited is a single window solutions provider for

transportation, distribution, warehousing, logistics, and supply chain needs, supported
by in house state of art telemetric and telemetry solutions.
 Reliance Clinical Research Services (RCRS), a contract research organization

(CRO) and wholly owned subsidiary of Reliance Life Sciences, has been set up to
provide clinical research services to pharmaceutical, biotechnology and medical
device companies.
 Reliance Solar, The solar energy initiative of Reliance aims to bring solar energy
systems and solutions primarily to remote and rural areas and bring about a
34
transformation in the quality of life.
 Relicord is the first and one of the most dependable stem-cell companying services of
South East Asia offered by Mukesh Ambani controlled Reliance Industries.
Reliance's Oil & Gas find
Andhra Pradesh near Vishakhapatnam. It was the largest discovery of natural gas in
world in financial year 2002-2003. On 2 April 2009, Reliance Industries (RIL) commenced
natural gas production from its D-6 block in the Krishna-Godavari (KG) The gas reserve is 7
trillion cubic feet in size. Equivalent to 1.2 billion barrels (165 mil in 2002, Reliance found
natural gas in the Krishna Godavari basin off the coast of lion tonnes) of crude oil, but only 5
trillion cubic feet are extractable. On 2008 Oct 8, Anil Ambani's Reliance Natural Resources
took Reliance Industries to the Bombay High Court to uphold a memorandum of
understanding that said RIL will supply the natural gas at $2.34 per million British thermal
units to Anil Ambani.
Reliance Retail
Reliance Retail is the retail business wing of the Reliance business. Many brands like
Reliance Fresh, Reliance Footprint, Reliance Time Out, Reliance Digital, Reliance Wellness,
Reliance Trends, Reliance AutoZone, Reliance Super, Reliance Mart, Reliance iStore,
35
Reliance Home Kitchens, and Reliance Jewel come under the Reliance Retail brand. Reliance
saw opportunity in retailing chicken, mutton and other meat products (halal and non-halal)
through one of its retail arms called "Delight Non Veg." One of the Delight outlets has been
shut down due to protest by anti-animal cruelty activists at Gandhi Nagar, Delhi who want
Reliance to close its non-veg food marketing.
Environmental record
Reliance Industry is the world‟s largest polyester producer and as a result one of the
largest producers of polyester waste in the world. In order to deal with this large amount of
waste they had to create a way to recycle the waste. They operate the largest polyester
recycling center that uses the polyester waste as a filling and stuffing. They use this process
to develop a strong recycling process which won them a reward in the Team Excellence
competition.
Reliance Industries backed a conference on environmental awareness in New Delhi in

2006. The conference was run by the Asia Pacific Jurist Association in partnership with the
Ministry of Environment & Forests, Govt. of India and the Maharashtra Pollution Control
Board. The conference was to help bring about new ideas and articles on various aspects of
environmental protection in the region. Maharashtra Pollution Control Board invited various
industries complied with the pollution control norms to take active part in the conference and
to support as a sponsor. The conference proved effective as a way to promote environmental
concern in the area.
Awards & Recognition
 International Refiner of the Year in 2005 at the 23rd Annual Hart's World Refining
and Fuels Conference.
Awards for managers
 Mukesh D. Ambani received the United States of America-India Business Council

(USIBC) leadership award for "Global Vision" 2007 in Washington in July 2007.
 Mukesh D. Ambani was conferred the Asia Society Leadership Award by the Asia
Society, Washington, USA, May 2004.
 Mukesh D. Ambani ranked 13th in Asia's Power 25 list of The Most Powerful People
in Business published by Fortune magazine, August 2004.
36
 Mukesh D. Ambani is Economic Times Business Leader of the Year.
Current composition of the Board and

Category of Directors are as Follows:
"Between my past, the present and the future, there is one common Factor: Relationship and
Trust. This is the foundation of our growth."
Shri Dhirubhai H. Ambani

Chairman Reliance Group
December 28, 1932 - July 6, 2002
Board of Directors of Reliance Industries Limited
Shri Mukesh D Ambani

Chairman & Managing
Director
37
Shri Nikhil R. Meswani Shri Hital R. Meswani Shri .S.Kohli
Executive Director Executive Director Executive Director
Shri PMS Prasad Shri R. Ravimohan Shri Ramniklal H.

Executive Director Executive Director Ambani
Shri Mansingh L. Shri Yogendra P. Trivedi Dr. D. V. Kapur

Bhakta
Shri M. P. Modi Prof. Ashok Misra Prof. Dipak C Jain
38
MISSION & VISION
“Continuously innovate to remain Partners in human progress by Harnessing science

& technology in the petrochemicals domain”
MISSION
“Be a globally preferred Business associate with responsible Concern for ecology,
society, and stakeholder‟s value”.
VALUES & QUALITY POLICY YOUR VALUES
“Integrity, Respect for People, Unity of Purpose, Outside-in Focus, Agility and
Innovation”.
QUALITY POLICY
“Bare committed to meet customers‟ requirements through continual improvement of

our quality management systems. We shall sustain organizational excellence through
visionary leadership and innovative efforts”.
39
CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
LIQUIDITY RATIOS
CURRENT RATIO
Current ratio is also known as short-term solvency ratio or working capital ratio.
Current ratio is used to assess the short-term financial position of the business.
Current assets
Current ratio
Current liabilities
=
TABLE NO 4.1
CURRENT RATIO
Year Current Asset Current Liability Ratio

(in Rs) (in Rs) %
2017-2018 30.34 155.81 0.19
2018-2019 11.28 183.93 0.06
2019-2020 24.06 219.09 0.10
2020-2021 35.75 265.38 0.13
2021-2022 38.37 341.61 0.11
Source: Secondary data
INTERPRETATION
The above table reveals the current ratio in Reliance . Current ratio in the year 2017-
2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 0.19, 0.06, 0.10, 0.13 and 0.11.
When comparing previous year (2020-2021) and current year (2021-2022) the value of
current ratio decreased from 0.13 to 0.11.
40
CHART NO 4.1
CURRENT RATIO
0.19%
0.20%
0.18%
0.16%
0.13%
0.14%
0.11%
0.12% 0.10%
0.10%
0.08% 0.06%
0.06%
0.04%
0.02%
0.00%
2017-20182018-20192019-20202020-20212021-2022
RATIO
41
QUICK RATIO
Quick ratio is another measure of a company's liquidity. Quick ratio is also known
as liquid ratio or acid test ratio. This ratio is used to assess the firm‟s short term liquidity.
The relationship of liquid asset to current liabilities is known as quick ratio. Liquid
assets = Total current asset - stock - prepaid expenses
Liquid assets
Quick Ratio =
Current Liabilities
TABLE NO 4.2
QUICK RATIO
Year Quick Asset Current Liability Ratio

(in Rs) (in Rs) %
2017-2018 19.69 155.81 0.12

2018-2019 18.79 183.93 0.10
2019-2020 73.01 219.09 0.33
2020-2021 32.63 265.38 0.12
2021-2022 36.2 341.61 0.11
INTERPRETATION
The above table reveals the Quick ratio in Reliance . Quick ratio in the year 2017-
2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 0.12,0.10,0.33,0.12 and 0.11.
When comparing previous year (2020-2021) and current year (2021-2022) the value of Quick
ratio decreased from 0.12 to 0.11.
42
CHART NO 4.2
QUICK RATIO
0.35% 0.33%
0.30%
0.25%
0.20%
Ratio
0.15% 0.12% 0.12% 0.11%

0.10%
0.10%
0.05%
0.00%
2017-20182018-2019 2019-2020 2020-20212021-2022
Year
43
NET WORKING CAPITAL RATIO
The net working capital ratio measures how well a company is utilizing its working
capital to support a given level of sales. Working capital is current assets minus current
liabilities.
Sales
Net Working Capital
Working Capital
=
TABLE NO 4.3
WOKING CAPITAL TURNOVER RATIO
Year Net Sales Net Working Times

(in Rs) Capital (in Rs) %
2017-2018 1,355.73 71.8 18.9

2018-2019 1,603.54 23.92 69.69
2019-2020 2,165.02 35.38 61.85
2020-2021 2,493.54 43.47 57.97
2021-2022 2,933.08 46.88 63.80
INTERPRETATION
The above table reveals the working capital turnover ratio in Reliance . Working
capital turnover ratio in the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-
2022 is 18.9, 69.69, 61.85, 57.97 and 63.80. When comparing previous year (2020-2021) and
current year (2021-2022) the value of working capital turnover ratio increased from 57.97 to
63.80.
44
CHART NO 4.3
EXHIBIT SHOWING NET WORKING CAPITAL RATIO
69.69%
63.80%
70.00% 61.85%
57.97%
60.00%
50.00%
40.00%
Ratio
30.00%
18.90%
20.00%
10.00%
0.00%
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Year
45
PROFITABILITY RATIOS
GROSS PROFIT RATIO
Gross profit margin shows the company can return income at the gross level. This
ratio helps to control inventory usage and production performance and fixing unit price of
goods. This ratio determines the overall efficiency of the business. The relationship of gross
profit to sales is known as net profit ratio.
Gross profit
Gross Profit Ratio = × 100
Net sales
TABLE NO 4.4
GROSS PROFIT RATIO
Gross Profit
Year Net Sales Times
(Profit before tax)
(in Rs) %
(in Rs)
2017-2018 499.29 1,355.73 36.82
2018-2019 547.33 1,603.54 34.12
2019-2020 618.16 2,165.02 28.54
2020-2021 790.30 2,493.54 31.68
2021-2022 1,006.83 2,933.08 34.29
INTERPRETATION
The above table reveals the gross profit ratio in Reliance . Net profit ratio shows in
the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is
36.82,34.12,28.54,31.68 and 34.29 When comparing previous year (2020-2021) and current
year (2021-2022) the value of gross profit ratio increased from 31.68 to 34.29.
46
CHART NO 4.4
GROSS PROFIT RATIO
36.82% 34.29%
40.00% 34.12%
31.68%
35.00% 28.54%
30.00%
25.00%
Ratio
20.00%
15.00%
10.00%
5.00%
0.00% 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Year
47
NET PROFIT RATIO
Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as
percentage. The net profits are obtained after deducting income-tax and, generally, non
operating expenses and incomes are excluded from the net profits for calculating this ratio.
This ratio determines the overall efficiency of the business. The relationship of net profit to
sales is known as net profit ratio.
Net profit
Net Profit Ratio = × 100
Net sales
TABLE NO 4.5
NET PROFIT RATIO
Year Net Profit Net Sales Times

(in Rs) (in Rs) %
2017-2018 348.67 1,355.73 25

2018-2019 361.19 1,603.54 22
2019-2020 319.763 2,165.02 14
2020-2021 503.67 2,493.54 20
2021-2022 632.25 2,933.08 21
INTERPRETATION
The above table reveals the net profit ratio in Reliance . Net profit ratio in the year
2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 25,22,14,20 and 21. When
comparing previous year (2020-2021) and current year (2021-2022) the value of net profit
ratio increased from 20 to 21.
48
CHART NO 4.5
NET PROFIT RATIO
25.00%
25.00% 22.00% 21.00%

20.00%
20.00%
14.00%
15.00%
Ratio
10.00%
5.00%
0.00%
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Year
49
OPERATING PROFIT RATIO
Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales.
It is generally expressed in percentage. Operating ratio measures the cost of operations per
dollar of sales.
Cost of goods sold + Operating expenses

Operating Ratio = × 100
Net sales
TABLE NO 4.6
Year Operating Profit Net Sales Ratio

(in Rs) (in Rs) %
2017-2018 94.58 1,355.73 6.9

2018-2019 109.14 1,603.54 6.7
2019-2020 147.79 2,165.02 6.8
2020-2021 177.76 2,493.54 7
2021-2022 198.31 2,933.08 6.7
INTERPRETATION
The above table reveals the operating profit ratio in Reliance . Operating profit ratio
in the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 6.9,6.7,6.8,7 and
6.7. When comparing previous year (2020-2021) and current year (2021-2022) the value of
operating profit ratio decreased from 7 to 6.7.
50
CHART NO 4.6
7.0%
7.0%
7.0% 6.9%
6.9%
6.8%
6.9%
6.8%
Ratio
6.7%
6.8% 6.7%
6.7%
6.7%
6.6%
6.6%
2017-20182018-20192019-20202020-20212021-2022
Year
51
ACTIVITY RATIOS
Receivables constitute a significant portion of the total assets of the business. When a
firm seller goods or services on credit, the payments are postponed to future dates and
receivables are created. If they sell for cash no receivables created.
Meaning
Receivable are asset accounts representing amounts owed to the firm as a result of
sale of goods or services in the ordinary course of business.
Purpose of receivables
Accounts receivables are created because of credit sales. The purpose of receivables is
directly connected with the objectives of making credit sales. The objectives of credit sales
are as follows-
 Achieving growth in sales.

 Increasing profits.
 Meeting competition.
Factors affecting the size of Receivables
The main factors that affect the size of the receivables are-
 Level of sales.
 Credit period.
 Cash discount.
Costs of maintaining receivables
The costs with respect to maintenance of receivables are as follows.
Capital costs
This is because there is a time lag between the sale of goods to customers and the
payment by them. The firm has, therefore to arrange for additional funds to meet its
obligations.
52
Administrative costs
Firm incur this cost for manufacturing accounts receivables in the form of salaries to
the staff kept for maintaining accounting records relating to customers.
Collection costs
The firm has to incur costs for collecting the payments from its credit customers.
Defaulting costs
The firm may not able to recover the over dues because of the inability of customers.
Such debts treated as bad debts.
Receivables management
Receivables are direct result of credit sale. The main objective of receivables
management is to promote sales and profits until that point is reached where the ROI in
further funding of receivables is less than the cost of funds raised to finance that additional
credit (i.e.; cost of capital). Increase in receivables also increases chances of bad debts. Thus,
creation of receivables is beneficial as well as dangerous.
Finally management of accounts receivable means as the process of making decisions

relating to investment of funds in this asset which result in maximizing the overall return on
the investment of the firm.
INVENTORY TURNOVER RATIO
Inventory turnover is the ratio of cost of goods sold by a business to its average
inventory during a given accounting period. It is an activity ratio measuring the number of
times per period, a business sells and replaces its entire batch of inventory again.
Cost of Goods Sold

Inventory Turnover Ratio
Average Inventory
=
53
TABLE NO 4.7
Year Net Sales Inventories Times

(in Rs) (in Rs) %
2017-2018 1,355.73 64.32 21.18
2018-2019 1,603.54 141.22 11.37
2019-2020 2,165.02 110.70 19.69
2020-2021 2,493.54 88.56 28.33
2021-2022 2,933.08 258.53 11.37
INTERPRETATION
The above table reveals the inventory turnover ratio in Reliance . Inventory turnover
ratio in the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 21.18,
11.37, 19.69, 28.33 and 11.37. When comparing previous year (2020-2021) and current year
(2021-2022) the value of inventory turnover ratio decreased from 28.33 to 11.37.
54
CHART NO 4.7
30.00% 28.33%
25.00%
21.18%
19.69%
20.00%
Ratio
15.00% 11.37%
11.37%
10.00%
5.00%
0.00%
2017-20182018-2019 2019-2020 2020-20212021-2022
Year
55
DEBTORS TURNOVER RATIO
Debtor‟s turnover ratio or accounts receivable turnover ratio indicates the velocity of
debt collection of a firm. In simple words it indicates the number of times average debtors
(receivable) are turned over during a year. This is also called as “Debtors Velocity” or
“Receivable turnover ratio”.
Net Credit Sales

Debtors Turnover Ratio =
Average Trade Debtors
TABLE NO 4.8
Year Total Sales Debtors Times

(in Rs) (in Rs) %
2017-2018 1,355.73 9.67 141.14

2018-2019 1,603.54 8.62 186.4
2019-2020 2,165.02 42.78 50.70
2020-2021 2,493.54 21.90 113.83
2021-2022 2,937.67 12.63 233.1
INTERPRETATION
The above table reveals the debtors turnover ratio in Reliance . Debtor‟s turnover
ratio in the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 141.14,
186.4,
50.70, 113.83 and 233.1. When comparing previous year (2020-2021) and current year
(2021-2022) the value of debtors turnover ratio increased from 113.83 to 233.1.
56
CHART NO 4.8
233.1%
250.0%
186.4%
200.0%
141.1%
150.0%
113.8%
Ratio
100.0%
50.7%
50.0%
0.0%
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Year
57
DEBT COLLECTION PERIOD
Debtor‟s collection period is nothing but the period required to collect the money
from the customers after the credit sales. A speed collection reduces the length of operating
cycle and vice versa. The more quickly the customers pay, the less risk from bad debts, the
lower the expenses of collection and more liquid the nature of this asset. It indicates the speed
with which debts are collected.
Days/months in a year
Debt collection period =
Debtor’s turnover ratio
TABLE NO 4.9
Year Debt collection

Days Debt turnover ratio
period
2017-2018 365 141.14 2.58

2018-2019 365 186.4 1.95
2019-2020 365 50.70 7.19
2020-2021 365 113.83 3.20
2021-2022 365 233.1 1.56

INTERPRETATION
The debt collection period of Reliance is worst. It is taking more than a year for
collecting debts. Standard Debt Collection Period of a firm is less than 90 days. The firm is
maintaining good debt collection period. The debt collection period gradually decreases.
During 2020-2021 the debt collection period is 11.5 days. Debts can be collected within 12
days by the firm.
58
CHART NO 4.9
7.19%
8.00%
7.00%
6.00%
5.00%
Ratio
4.00% 3.20%
2.58%
3.00% 1.95% 1.56%
2.00%
1.00%
0.00%
2017-20182018-20192019-20202020-20212021-2022
Year
59
LEVERAGE RATIOS
DEBT RATIO
A company may raise debt in various ways. It may be in the form of debenture or loan
borrowed from financial or public institutions for a certain period of time at a specific rate of
interest. The debenture or bond may be issued at par, discount or premium. If forms the basis
for calculating cost of debt.
Formula
Interest
Debt ratio = × 100
Total debt
TABLE NO 4.10
DEBT RATIO
Interest Total debt Cost of debt

Year
( in Rs) ( in Rs) ( in % )
2017-2018 35.86 235.77 15.14
2018-2019 38.45 273.24 14.08
2019-2020 43.98 331.72 13.23
2020-2021 39.83 395.61 10.06
2021-2022 62.94 473.33 13.28
INTERPRETATION
The above table reveals the debt ratio in Reliance . Debt equity ratio in the year 2017-
2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 15.14, 14.08, 13.23, 10.06 and
debt equity ratio increased from 10.06 to 13.28.
60
CHART NO 4.10
DEBT RATIO
16.00% 15.14%
14.08%
13.28%
13.23%
14.00%
12.00%
10.06%
10.00%
Ratio
8.00%
6.00%
4.00%
2.00%
0.00%
2017-20182018-2019 2019-2020 2020-20212021-2022
Year
61
DEBT EQUITY RATIO
Debt Equity ratio is the ratio of total liabilities of a business to its shareholders'
equity. It is a leverage ratio and it measures the degree to which the assets of the business are
financed by the debts and the shareholders' equity of a business. The financing total assets of
a business concerns is done by owner‟s equity as well as outside debts. How much fund has
been provided by the owner‟s and how much by outsiders in the acquisition of total assets is
a very significant factor affecting the long-term solvency position of a concern.
Total Liabilities
Debt Equity Ratio =
Shareholder’s Equity
TABLE NO 4.11
DEBT EQUITY RATIO
Year Long Term Debt Share Fund Ratio

(in Rs) (in Rs) %
2017-2018 235.77 7.18 33.57

2018-2019 273.24 10.7 27.3
2019-2020 331.72 10.7 31
2020-2021 395.61 10.77 36.67
2021-2022 473.33 10.87 43.8
INTERPRETATION:
The above table reveals the debt equity ratio in Reliance . Debt equity ratio in the year
2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 33.57, 27.3, 31, 36.67 and
debt equity ratio increased from 36.67 to 43.8.
62
CHART NO 4.11
DEBT EQUITY RATIO
43.80%
45.00%
36.67%
40.00%
33.57%
31.00%
35.00%
27.30%
30.00%
25.00%
Ratio
20.00%
15.00%
10.00%
5.00%
0.00%
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Year
63
CAPITAL EMPLOYED NETWORTH
Capital employed is presented as deducting the current liabilities from the current
assets. It can be defined as equity plus loans which are subject to interest. To define it
properly, capital employed can be expressed as the total amount of capital that has been
utilized for acquisition of profits. It also refers to the value of all assets (fixed as well as
working capital) employed in a business.
Formula for Capital Employed
The general formula used for computing capital employed is:
Capital employed Net worth = Total Assets – Current Liabilities
TABLE NO 4.12
Year Total assets Current liabilities Capital employed

(in Rs) (in Rs) net worth ratio
%
2017-2018 328.56 155.81 172.75

2018-2019 380.96 183.93 197.03
2019-2020 461.28 219.09 242.19
2020-2021 575.03 265.38 309.65
2021-2022 694.80 341.61 353.19
INTERPRETATION:
The above table reveals the Capital Employed Net worth in Reliance . Debt equity
ratio shows in the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is
172.75, 197.03, 242.19, 309.65 and 353.19.
64
CHART NO 4.12
353.19%
400.00%
350.00% 309.65%
300.00% 242.19%
250.00% 197.03%
172.75%
Ratio
200.00%
150.00%
100.00%
50.00%
0.00%
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Year
65
COMPARATIVE STATEMENT
The excess of current assets over current liabilities is referred to as the company‟s
working capital. The difference between the working capital for two given reporting periods
is called the change in working capital. Changes in working capital is included in cash flow
from operations because companies typically increase and decrease their current assets and
current liabilities to fund their ongoing operations. When a company increases its current
assets, it‟s a cash outflow.
The company has to sell out money to buy the extra assets. Likewise, when a
company increases its current liabilities, it‟s a cash inflow. The impact of working capital
changes are reflected in a firm‟s cash flow statement. Specifically, the operating cash flow
section of the cash flow statement details changes in its shorter-term working capital needs. A
positive working capital figure (current assets are greater than current liabilities) means a
cash inflow for the period measured.
In contrast, a negative working capital position means the firm has spent more cash
out than it brought in managing its working capital, or commitments, within a year.
Analyzing changes in working capital can be important for any business, but is especially
important for firms with seasonal or erratic cash flow needs. Most of the time, a company‟s
working capital is simply a core part of its daily operations. But it can indicate financial
problems, especially when working capital runs in the negative for an extended period of
time.
66
TABLE NO 4.13
COMPARATIVE BALANCE SHEET FOR THE YEAR ENDED 2017-2018
Particulars 2017 2018 Increase/ Increase/

Decrease Decrease
%
Liabilities
Capital A/c 7.18 10.77 3.59 50
TMB bank CC A/c 85.61 96.94 11.33 13.23
Secured Loans & Creditors 185.03 180.76 -4.27 -2.30
Other current liabilities 50.74 92.48 41.74 82.26
Total Liabilities 328.56 380.95 52.39 108.19
Assets
Fixed Assets 201.64 182.37 -19.27 -9.55
Loans and Advances 42.91 38.58 -4.33 -10.09
Investments 0.00 0.00 - -
Closing stock 64.32 141.22 76.9 119.55
Sundry Debtors 9.67 8.62 -1.05 -10.85
Cash in hand and Bank 10.02 10.17 0.15 1.49
Total Assets 328.56 380.96 52.4 90.55
INTERPRETATION
The above table reveals the comparative analysis shows total liabilities increases in
the year increase in the year 2017-2018.
67
TABLE NO 4.14

Decrease Decrease
%
Liabilities
Capital A/c 10.77 10.77 - -
TMB bank CC A/c 96.94 118.79 21.85 22.53
Secured Loans & Creditors 180.76 294.74 113.98 63.05
Other current liabilities 92.48 36.98 -55.5 -60.01
Assets
Fixed Assets 182.37 210.71 -28.34 15.53
Loans and Advances 38.58 66.18 27.6 71.53
Investments 0.00 0.68 se0.68 -
Closing stock 141.22 110.70 -30.52 -21.61
Sundry Debtors 8.62 42.78 34.16 396.28
Total Assets 380.96 461.28 23.64 658.97
INTERPRETATION
The above table reveals the comparative analysis shows total liability decreases and
asserts increases in the year 2018-2019.
68
TABLE NO 4.15

Decrease Decrease
%
Liabilities
Capital A/c 10.77 10.77 - -
TMB bank CC A/c 118.79 168.62 49.83 41.94
Other current liabilities 36.98 36.20 -0.78 -2.10
Assets
Fixed Assets 210.71 234.49 23.78 11.28
Loans and Advances 66.18 110.26 44.08 66.60
Investments 0.68 0.80 0.12 17.64
Closing stock 110.70 196.85 86.15 77.8
Sundry Debtors 42.78 21.90 -20.88 -48.8
Cash in hand and Bank 30.23 10.73 -19.5 -64.5
Total Assets 461.28 575.03 113.75 60.02
INTERPRETATION
The above table reveals the comparative analysis shows increase in liability and assert
decreased in the year 2019-2020.
69
TABLE NO 4.16

Decrease Decrease
%
Liabilities
Capital A/c 10.77 10.87 0.1 0.92
TMB bank CC A/c 168.62 210.59 41.97 24.89
Other current liabilities 36.20 75.01 38.81 107.2
Assets
Fixed Assets 234.49 294.73 60.24 25.68
Loans and Advances 110.26 104.50 -5.76 -5.22
Investments 0.80 0.80 - -
Closing stock 196.85 258.53 61.68 31.33
Sundry Debtors 21.90 12.63 -9.27 -42.32
Total Assets 575.03 694.76 119.73 129.13
INTERPRETATION
The above table reveals the comparative analysis for total assets and working capital
increase in the year 2020-2021.
70
TABLE NO 4.17
COMMON SIZE STATEMENT
Particulars 2021 2020 2019 2018 2017
Liabilities
Capital A/c 10.87 10.77 10.77 10.77 7.18
TMB bank CC A/c 210.59 168.62 118.79 96.94 85.61
Secured Loans & Creditors 398.32 359.41 294.74 180.76 185.03
Other current liabilities 75.01 36.20 36.98 92.48 50.74
Total Liabilities 694.79 575.00 461.28 380.95 328.56
Assets
Fixed Assets 294.73 234.49 210.71 182.37 201.64
Loans and Advances 104.50 110.26 66.18 38.58 42.91
Investments 0.80 0.80 0.68 0.00 0.00
Closing stock 258.53 196.85 110.70 141.22 64.32
Sundry Debtors 12.63 21.90 42.78 8.62 9.67
Cash in hand and Bank 23.57 10.73 30.23 10.17 10.02
Total Assets 694.76 575.03 461.28 380.96 328.56
71
TREND ANALYSIS
Cash and fund flow management is one of the key areas of working capital
management. Cash is the liquid current asset. The main duty of the finance manager is to
provide adequate cash to all segments of the organization. The important reason for
maintaining cash balances is the transaction motive. A firm enters into variety of transactions
to accomplish its objectives which have to be paid for in the form of cash.
Meaning of cash
The term “cash” with reference to cash management used in two senses. In a narrower
sense it includes coins, currency notes, cheques, bank drafts held by a firm. n a broader sense
it also includes “near-cash assets” such as marketable securities and time deposits with banks.
Objectives of cash management
There are two basic objectives of cash management. They are-
 To meet the cash disbursement needs as per the payment schedule.

 To minimize the amount locked up as cash balances.
Basic problems in Cash Management
Cash management involves the following four basic problems.
 Controlling level of cash

 Controlling inflows of cash
 Controlling outflows of cash and
 Optimum investment of surplus cash.
 Determining safety level for cash:
The finance manager has to take into account the minimum cash balance that the firm
must keep to avoid risk or cost of running out of funds. Such minimum level may be termed
as “safety level of cash”.
The finance manager determines the safety level of cash separately both for normal
periods and peak periods. Under both cases he decides about two basic factors.
72
Desired days of cash
It means the number of days for which cash balance should be sufficient to cover
payments.
Average daily cash flows
This means average amount of disbursements which will have to be made daily.
Criteria for investment of surplus cash
In most of the companies there are usually no formal written instructions for investing
the surplus cash. It is left to the discretion and judgment of the finance manager. While
exercising such judgment, he usually takes into consideration the following factors.
Security
This can be ensured by investing money in securities whose price remains more or
less stable.
Liquidity
This can be ensured by investing money in short term securities including short term
fixed deposits with banks.
Yield
Most corporate managers give less emphasis to yield as compared to security and
liquidity of investment. So they prefer short term government securities for investing surplus
cash.
Cash Management in Reliance
The cash management is carried out in seaways by CTM (Corporate Treasury

Management). CTM is a commonly followed procedure in most of the companies. Now we
see the cash ratio / quick ratio in Reliance
73
CASH RATIO
Cash
Cash ratio =
Current liabilities
TABLE NO 4.18
CASH RATIO
Year Ratio
Cash Current liabilities
%
2017-2018 10.02 155.81 0.06
2018-2019 10.17 183.93 0.05
2019-2020 30.23 219.09 0.13
2020-2021 10.73 265.38 0.04
2021-2022 23.57 341.61 0.07
INTERPRETATION
The Cash ratio of Reliance in the 2018-2019 was in fluctuation. In 2020-2021 it was
reduced to 0.04. More or less cash ratio is similar in last 5 years. The standard norms of
absolute quick ratio are 0.5:1. From the above table the firms not maintain the sufficient level
of quick assets because of the day-to-day expenses. It is fluctuating between the standard
norms. For this ratio 1:2 means for every 2 rupees of current Liabilities, Company must have
1 rupee of cash and bank balance and marketable securities.
74
CHART NO 4.13
CASH RATIO
0.13%
0.14%
0.12%
0.10%
0.07%
0.08%
Ratio
0.05%
0.06% 0.04%
0.04%
0.02%
0.00%
2018-2019 2019-2020 2020-2021 2021-2022
Year
75
CREDITORS TURNOVER RATIO
The ratio shows on an average the number of times creditors turned over during the
year.
Credit purchase
Creditors turnover ratio =
Average creditors
TABLE NO 4.19
Year Creditors turnover

Credit purchase Suppliers / creditors
ratio
2017-2018 365 55.00 6.63
2018-2019 365 110.00 3.31
2019-2020 365 170.00 2.14
2020-2021 365 250.00 1.46
2021-2022 365 180.00 2.02
INTERPRETATION
The above table reveals the debt creditors turnover ratio in Reliance . Creditor‟s
turnover ratio in the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is
6.63, 3.31, 2.14, 1.46 and 2.02. When comparing previous year (2020-2021) and current year
(2021-2022) the value of creditor‟s turnover ratio increased from 1.46 to 2.02.
76
CHART NO 4.14
6.630%
7.000%
6.000%
5.000%
4.000% 3.310%
Ratio
3.000% 2.140% 2.020%
1.460%
2.000%
1.000%
0.000%
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Year
77
CASH TO CURRENT ASSET RATIO
Cash is one of the liquid parts of gross working capital, which shows prompt liquidity
within firm. “In a comfort ability financial business, cash will probably run not less than 5%
to 10% of the current asset. Since current liabilities are not expected to exceed half of the
current asset, the cash percentage should run not under 10% to 20 % of the same.
Cash to current asset ratio = Cash/ Current assets
TABLE NO 4.20
Year Creditors turnover

Cash Current assets
ratio
2017-2018 10.02 30.34 0.33
2018-2019 10.17 11.28 0.90
2019-2020 30.23 24.06 1.25
2020-2021 10.73 35.75 0.30
2021-2022 23.57 38.37 0.61
INTERPRETATION
The above table reveals the cash to current asset ratio in Reliance . cash to current
asset ratio in the year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is
0.33,0.90,1.25,0.30 and 0.61. When comparing previous year (2020-2021) and current year
(2021-2022) the value of cash to current asset ratio increased from 0.30 to 0.61.
78
CHART NO 4.15
1.400% 1.250%
1.200%
0.900%
1.000%
0.800% 0.610%
Ratio
0.600%
0.330% 0.300%
0.400%
0.200%
0.000%
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Year
79
CASH TURNOVER RATIO
Cash is one of the liquid parts of gross working capital, which shows prompt liquidity
within firm. “In a comfortability financial business, cash will probably run not less than 5%
to 10% of the current asset. Since current liabilities are not expected to exceed half of the
current asset, the cash percentage should run not under 10% to 20 % of the same.
Cash turnover Ratio = Sales /Cash
TABLE NO 4.21
CASH TURNOVER RATIO
Year
Sales Cash Cash turnover ratio
2017-2018 1,355.73 10.02 135.22
2018-2019 1,603.54 10.17 157.65
2019-2020 2,165.02 30.23 71.61
2020-2021 2,493.54 10.73 232.38
2021-2022 2,933.08 23.57 124.44
INTERPRETATION
The above table reveals the cash turnover ratio in Reliance . Cash turnover ratio in the
year 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 is 135.22, 157.65, 71.61,
232.38 and 124.44. When comparing previous year (2020-2021) and current year (2021-
2022) the value of cash turnover ratio increased from 232.38to 124.44.
80
CHART NO 4.16
CASH TURNOVER RATIO
250.000% 232.380%
200.000%
157.650%
135.220%
150.000% 124.440%
100.000% 71.610%
50.000%
0.000%
2017-20182018-20192019-20202020-20212021-2022
RATIO
81
CHAPTER V
FINDINGS, SUGGESTIONS & CONCLUSION
5.1 FINDINGS
The following are the findings interpreted through financial performance analysis of
Reliance .
 Current ratio was high during 2020-2021 with 0.13% and low during 2018-2019
with 0.06%
 Quick ratio was high during 2019-2020 with 0.33 and low during 2018-2019 with
the value 0.10
 Working capital turnover ratio is low during 2017-2018 with the value 18.9 and
high during 2018-2019 with the value 69.69
 Gross profit ratio was high with value 36.82 in 2017-2018. Low ratio was shown
during 2019-2020 with the value 28.54.
 Net profit ratio was high during 2017-2018 with 25 and low during 2019-2020
with the value 14
 Operating profit ratio shows decreasing trend. The ratio was high during last
financial year 2020-2021 with 7 and low during 2018-2019 and 2021-2022 with
the value 6.7
 Inventory turnover ratio was high during 2020-2021 with the value 28.33 and low
during 2018-2019 and 2021-2022 with the value 11.37. Overall it shows
fluctuation trend.
 Debt collection period was high during 2019-2020 with 7.19% and low during
2021-2022 with 1.56%
 Debt ratio was high during 2017-2018 with the value 15.14 and low during 2020-
2021 with the value 10.06
 Debt equity ratio was high during 2021-2022 with the value 43.8 and low during
2018-2019 with the value 27.3
 Capital Employed Net worth was high during 2019-2020 with the value 0.13 and
low during 2020-2021 with the value 0.04
82
 Creditors turnover ratio was high during 2017-2018 with the value 6.63 and low
during 2020-2021 with the value 1.46
 Cash to current assets turnover ratio was high during 2019-2020 with the value
1.25 and low during 2020-2021 with the value 0.30
 Cash turnover ratio was high during 2020-2021 with the value 232.38 and low
during 2019-2020 with the value 71.61
5.2 SUGGESTIONS
The following are the suggestion made to the company for the development, they are
as follows
 Though the company is facing an increasing in the liquidity position, the firm has to
increase further more so that they can meet the current liability which increases over
the years.
 The profitability of the concern is showing a decreasing trend for the past couple of
the years and they should be increased for the development of the concern.
 The company should form new policies and procedures so that the resources are used
efficiently. The available resources are not used to the fullest extent which will reduce
the cost of production and increase the profit.
 The debtors can be collected soon as it can be used to discharge the creditors and
current liability to a certain extent.
83
5.3 CONCLUSION
The financial position of the company has provided a clear view on the activities of
the company. The use of the ratio analysis, trend analysis, cash flow statement and other
accounting and financial management helped in this study to find out the financial soundness
of the company. This project was very useful for the judgment of the financial status of the
company from the management point of view. This evaluation proved a great deal to the
management to make a decision on the regulation of the funds to increase the sales and bring
profit to the company.
The study is conducted to analyze the present performance and profitability position
of the organization. The present situation of the organization was taken for the study is
through analyzing the three years annual report which clearly depicts the Balance sheet in
which the sources of funds, application of funds, and current liabilities and provisions of the
company. The present situation of the organization was taken for the study is through
analyzing the five years annual report which clearly depicts the Balance sheet in which the
sources of funds, application of funds, and current liabilities and provisions of the company.
84
BIBLIOGRAPHY
REFERENCES
1. Adolphus.J.T, “Empirical Survey of Corporate Liquidity Management Practices of

Nigerian –Quotes Manufacturing Enterprises”, Jou rnal of Financial Management
and Analysis, pp.41-55, Vol 18(2) 2021.
2. Agarwal and Akhilewsar Sharma (2020): “Return on Investment –A case study of
Drugs and Pharmaceutical companies”, Management Accountant, Vol 10-29, March
1994, pp.154-157.
3. Amalendu Bhunia (2007, “ Liquidity Management of Public Sector Iron and Steel
Enterprises in India,” Vidya Sagar University of Journal of Commerce, Vol.12
March 2007, pp. 85-98.
4. Arther S Leahy (2014), “The determinant of profitability in the liquor industry,
Briefing Notes in Economics, No.61, pp`1-6.
5. Babatosh Banerjee : “Corporate Liquidity and Profitability in India”,Research
bulletin, July 2013.
6. Barthwal, “The Determinants of Profitability in Indian Textile Industry”, Economica,
Vol.43, pp 267-274.
7. Beaumont Smith M and Begemann E (1997):“The Association between Working
Capital and Return on Investment”, South African Journal of business management,
March 1997, Vol.28, pp81-92.
8. Bairav H Desai, “Assessment of Liquidity –Inter Firm Comparison –A Case Study,
Udyog Pragathi, Oct 2017 pp. 7-20.
9. Bruinshood and Kool (2019), “Dutch Corporate Liquidity Management: New
Evidence on Aggregation “, Journal of Applied Econo mics, Vol VII, No.2, pp.195-
236, Nov 2019.
10. Carol Lancaster and Jerry Stevens, “Corporate liquidity and significant of earnings
verses cash flow: An examination of industry effects” Journal of Applied Business
Research, Sep 2011, pp43-54.
85
BOOKS
1. Brian Kline R. (2007), „Financial Statement‟, Atlantic publishing company, New

York, pp.1-50.
2. Kothari R. (2003), „Research methodology‟, Wilry Estern ltd., New Delhi.
3. Mukherjee S. & Hanif R. (2003), „Financial Accounting‟, Tata McGraw-Hill

Education, pp.33-76.
4. Pandey I.M. (1999), „Financial Management‟, Vikas publishing house, New

Delhi.
5. Pillai R.S.N. & Bagavathi V. (2000), „Statistics‟, S. Chand & Company ltd., New
Delhi, pp.1-120.
JOURNALS
1. ICFAI journal of Applied Economics

2. Thomson Reuters Journal Citation Reports
86
A STUDY ON FINANCIAL STATEMENT ANALYSIS OF RELIANCE INDUSTRIES
BALANCE SHEET IN RS.---------------- CR. --------
2021 2020 2019 2018 2017
Sources Of Funds
Total Share Capital 339.01 339.01 339.01 339.01 339.01
Equity Share Capital 339.01 339.01 339.01 339.01 339.01
Share Application Money 0.00 0.00 0.00 0.00 0.00
Reserves 15,683.08 14,673.15 13,387.39 12,783.51 12,206.80
Networth 16,022.09 15,012.16 13,726.40 13,122.52 12,545.81
Secured Loans 3,398.31 4,262.57 3,874.82 2,652.06 3,657.68
Unsecured Loans 13,657.33 27,667.48 28,583.45 24,827.19 19,971.41
Total Debt 17,055.64 31,930.05 32,458.27 27,479.25 23,629.09
Total Liabilities 33,077.73 46,942.21 46,184.67 40,601.77 36,174.90
Application Of Funds
Gross Block 47,971.09 42,287.19 36,849.52 33,329.40 18,644.53
Less: Accum. Depreciation 18,908.28 16,374.95 14,300.82 12,479.75 0.00
Net Block 29,062.81 25,912.24 22,548.70 20,849.65 18,644.53
Capital Work in Progress 3,474.42 4,585.56 5,172.87 4,444.47 3,696.00
Investments 11,241.48 10,859.87 10,626.93 10,370.50 11,335.02
Inventories 12,972.26 18,775.41 16,438.70 19,454.53 16,622.28
Sundry Debtors 3,603.05 5,465.95 4,935.04 3,565.16 3,076.86
Cash and Bank Balance 17.07 34.71 147.13 226.38 79.02
Total Current Assets 16,592.38 24,276.07 21,520.87 23,246.07 19,778.16
Loans and Advances 7,179.55 11,944.35 16,375.36 12,198.86 7,307.38
Liquid Assets 9412.83 12331.72 5145.51 11047.21 12470.78
Fixed Deposits 0.00 0.00 0.00 0.00 0.00
Total CA, Loans & 23,771.93 36,220.42 37,896.23 35,444.93 27,085.54
Advances
Deferred Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 31,493.92 28,306.24 27,760.56 28,524.19 22,687.45
Provisions 2,978.99 2,329.64 2,299.50 1,983.59 1,898.74
Total CL & Provisions 34,472.91 30,635.88 30,060.06 30,507.78 24,586.19
87
Net Current Assets -10,700.98 5,584.54 7,836.17 4,937.15 2,499.35
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 33,077.73 46,942.21 46,184.67 40,601.77 36,174.90
Contingent Liabilities 6,572.11 8,687.79 9,018.47 7,162.04 8,369.84
Book Value (Rs) 473.15 443.32 405.35 387.52 370.49
Goodwill 32604.58 46498.89 45779.32 40214.25 35804.41
PROFIT & LOSS ACCOUNT IN RS. CR. ---

2021 2020 2019 2018 2017
Income
Sales Turnover 217,306.92 232,423.01 206,731.26 178,335.82 133,671.82
Excise Duty 10,680.74 9,151.68 0.00 0.00 0.00
Net Sales 206,626.18 223,271.33 206,731.26 178,335.82 133,671.82
Other Income 1,168.41 974.45 1,102.36 1,025.59 1,170.66
Stock -4,788.80 547.87 -581.91 1,223.98 3,153.63
Adjustments
Total Income 203,005.79 224,793.65 207,251.71 180,585.39 137,996.11
Expenditure
Raw Materials 185,912.40 207,481.45 191,700.72 166,617.04 126,018.95
Power & Fuel 168.92 109.50 634.69 518.91 339.56
Cost
Employee Cost 2,414.66 2,030.30 2,525.56 1,583.10 1,981.84
Other 5,025.88 4,843.28 3,840.24 3,350.88 2,979.53
Manufacturing
Expenses
Selling and 0.00 0.00 0.00 0.00 0.00
Admin Expenses
Miscellaneous 2,648.93 4,116.94 3,186.48 3,358.53 2,024.25
Expenses
Preoperative 0.00 0.00 0.00 0.00 0.00
Exp Capitalised
Total Expenses 196,170.79 218,581.47 201,887.69 175,428.46 133,344.13
Operating Profit 5,666.59 5,237.73 4,261.66 4,131.34 3,481.32
88
PBDIT 6,835.00 6,212.18 5,364.02 5,156.93 4,651.98
Interest 706.59 1,336.36 2,019.33 2,224.27 892.06
PBDT 6,128.41 4,875.82 3,344.69 2,932.66 3,759.92
Depreciation 1,978.76 2,201.94 1,983.52 1,712.93 1,406.95
Other Written 0.00 0.00 0.00 0.00 0.00
Off
Profit Before 4,149.65 2,673.88 1,361.17 1,219.73 2,352.97
Tax
Extra-ordinary 4.47 -58.37 113.39 -0.49 -15.24
items
PBT (Post 4,154.12 2,615.51 1,474.56 1,219.24 2,337.73
Extra-ord Items)
Tax 1,420.86 881.74 569.85 307.81 798.72
Reported Net 2,733.26 1,733.77 904.71 911.43 1,539.01
Profit
2021 2020 2019 2018 2017
Total Value 10,258.39 11,100.02 10,186.97 8,811.42 7,325.18
Addition
Preference 0.00 0.00 0.00 0.00 0.00
Dividend
Equity Dividend 829.64 524.87 287.83 287.83 474.08
Corporate 168.89 89.20 48.92 46.70 76.91
Dividend Tax
Per share data (annualised)
Shares in issue 3,386.27 3,386.27 3,386.27 3,386.27 3,386.27
(lakhs)
Earning Per 80.72 51.20 26.72 26.92 45.45
Share (Rs)
Equity Dividend 245.00 155.00 85.00 85.00 140.00
(%)
Book Value (Rs) 473.15 443.32 405.35 387.52 370.49
89
CASH FLOW ---------- IN RS. CR. ---------
2021 2020 2019 2018 2017
Net Profit Before Tax 4154.12 2615.50 1474.56 1219.24 2346.14
Net Cash From Operating 17841.09 7730.08 1149.56 2226.26 1002.42
Activities
Net Cash (used in)/from -3291.33 -3774.83 -3370.57 -2863.56 -3381.80
Investing Activities
Net Cash (used in)/from -13759.01 -4605.97 1154.02 1060.28 1674.41
Financing Activities
Net (decrease)/increase In 790.75 -650.72 -1066.99 422.98 -704.97
Cash and Cash Equivalents
Opening Cash & Cash -1891.41 -1232.14 -165.69 -588.67 117.30
Equivalents
Closing Cash & Cash -1100.66 -1882.86 -1232.68 -165.69 -587.67
Equivalents
90

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A STUDY ON FINANCIAL STATEMENT ANALYSIS OF RELIANCE INDUSTRIES

Project report to be submitted to Bharathiar University

B.Com (Accounting & Finance)

G R D School of Commerce and International Business

Submitted for the Viva-Voce Examination held on-----------------------------

DATE : SIGNATURE OF THE CANDIDATE

My thanks to my guide the faculty “Dr. KAVITHA, ASSOCIATE PROFESSOR”, school of

1.1 Introduction to the study 1

3 Introduction about the company 32

4 DATA ANALYSIS AND 40

5 FINDINGS, SUGGESTIONS, & 81

S.no PARTICULARS Page

1.1 INTRODUCTION ABOUT THE STUDY

financial statements is a process of evaluating the relationship between component pats of

the figures in the financial

of the language of business. It would be embarrassing to a manager to display his or her

ignorance of any of these financial specifications for a business.

FINANCIAL STATEMENT ANALYSIS

Financial statement is an organised collection of data. Its purpose is to convey an

understanding of various financial aspects of business firm. It may show a position at a

Finance is defined in numerous ways by different groups of people. Though it is

FINANCIAL STATEMENT ANALYSIS

Horizontal analysis compares financial information over a series of time, typically

FINANCIAL RATIO ANALYSIS

Finance is an important function of any business, as money is required to meet the

Analyzing financial performance is the process of evaluating the common

Financial statement is used to judge the profitability and financial soundness

1.3 OBJECTIVES OF THE STUDY

 To know the financial position of the concern through balance sheet.

 To analyze the efficiency of the firm through ratios.

 To analyze way & means to improve the present conciliation.

 To examine the overall performance of the company.

1.4 SCOPE OF THE STUDY

 The project throws light on the need for financial management.

materialistic information is known as research methodology. Research methodology is a

how research is done scientifically.

as a scientific and systematic research for prominent information on a specific topic.

suitable methods and measures are to be followed.

1.5.1 NATURE OF THE STUDY

The study carried out here is Analytical Research.

1.5.2 DATA COLLECTION

 By websites, text books and journals.

1.5.3 PERIOD OF STUDY

 The period of study undertaken in the project is only 6 years.

o Absolute liquid ratio

o Debt equity ratio

o Inventory turnover ratio

o Debtor‟s turnover ratio

o Working capital turnover ratio

o Net profit ratio

o Operating profit ratio

 Common Size Statement

groups of items in the financial statements.

other was collected from the secondary data.

various departments and my project guide.

 Company annual report.

 Published information on finance.

 Internal circulation booklets.