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INTRODUCTION

Financial statements are records that provide an indication of the organization’s financial status. It quantitatively describes the financial health of the company. It helps in the evaluation of company’s prospects and risks for the purpose of making business decisions. The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. Financial statements should be understandable, relevant, reliable and comparable. They give an accurate picture of a company’s condition and operating results in a condensed form. Reported assets, liabilities and equity are directly related to an organization's financial position whereas reported income and expenses are directly related to an organization's financial performance. Analysis and interpretation of financial statements helps in determining the liquidity position, long term solvency, financial viability, profitability and soundness of a firm. There are four basic types of financial statements: balance sheet, income statements, cashflow statements, and statements of retained earnings. Mining industries are capital intensive. Hence a lot capital is invested in it. Unfortunately very limited work has been done on analysis and interpretation of financial statements of Indian for mining companies. An attempt has been carried out in this project to analyze and interpret the financial statements of five coal and non- coal mining companies. OBJECTIVES To understand, analyze and interpret the basic concepts of financial statements of different mining companies. Interpretation of financial ratios and their significance.

FINANCIAL STATEMENTS
Financial statements (or financial reports) are activities of a business, person, formal records of the financial or other entity. Financial statements provide an

overview of a business or person's financial condition in both short and long term. All the relevant financial information of a business enterprise, presented in a structured manner and in a form easy to understand is called the financial statements. There are four basic financial statements: 1. Balance sheet: It is also referred to as statement of financial position or condition, reports on a company's assets, liabilities, and Ownership equity as of a given point in time. 2. Income statement: It is also referred to as Profit and Loss statement (or "P&L"), reports on a company's income, expenses, and profits over a period of time. Profit & Loss account provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. 3. Statement of Retained Earnings: It explains the changes in a company's retained earnings over the reporting period. 4. Cash Flow Statement: It reports on a company's cash flow activities, particularly its operating, investing and financing activities.

Industry overview: Indian steel sector
India has emerged as the fourth largest steel producing nation in the world, as per the recent figures release by World Steel Association in April 2011. In 2010, India was the 5th largest producer, after China, Japan, USA and Russia had recorded a growth of 11.3% in steel production as compared to 2009. Overall domestic crude steel production grew at a compounded annual growth rate of 8.4% during 2005-06 to 2009-10. The Indian steel industry accounted for around 5% of the world’s total production in 2010. Total crude steel production in India for 2010-11 was around 69 million tonnes and it’s expected that the crude steel production in capacity in the country will increase to nearly 110 million tonne by 2012-13. Further, if the proposed expansion plans are implemented as per schedule, India may become the second largest crude steel producer in the world by 2015-16. The demand for steel in the country is currently growing at the rate of over 8% and it is expected that the demand would grow over by 10% in the next five years. However, the steel intensity in the country remains well below the world levels. Our per capita consumption of steel is around 110 pounds as compared to 330 Pounds for the global average. This indicates that there is a lot of potential for increasing the steel consumption in India.

Immense growth potential in Indian Steel Sector

Domestic crude steel production grew at a compounded annual growth rate of 8.4% in the last few years. Crude steel production capacity of the country is projected to be around 110 million tonne by 201213. 222 Memorandum of Understandings (MOU) have been signed with various states for planned capacity of around 276 million tonnes by 2019-20. Investments at stake are to the tune of $187 billion in the Steel sector. Increase in the demand of steel in India is expected to be 14% against the global average of 5-6% due to its strong domestic economy, massive infrastructure needs and expansion of industrial production.

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Demand of steel in the major industries like infrastructure, construction, housing, automotive, steel tubes and pipes, consumer durables, packaging and ground transportation. Target for $ 1 trillion of investments in infrastructure during the 12th Five Year Plan. Infrastructure projects (like Golden Quadrilateral and Dedicated Freight Corridor) will give boost to the demand in the steel sector in near future. Projected New Greenfield & up-gradation of existing Airport shall keep the momentum up. Increased demand of specialized steel in hi-tech engineering industries such as power generation, automotive petrochemicals, fertilizers etc.

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335.805.70 15. Expenses (E) Total Assets (A+B+C+D+E) March.60 12.50 41.914.361.054.459.571.80 9.921.40 18.334.2009 (Rs in millions) 154.30 March.60 2. Table : Balance Sheet of Jindal Steel & Power Ltd.40 11.00 37.2007 (Rs in millions) 154.044.00 16.378.40 10.90 20.60 3.10 14.10 12.819.30 24.00 57.50 March.00 12.50 .537.00 24.20 6.967.10 60.10 3.563.099.30 21.00 51.098.358.629.197.840.409.00 23.80 31.2007 49.116.799.813.189.776.ANALYSIS Jindal Steel & Power Ltd. Depreciation Net Block (A) Capital Work in Prgs.60 3.2008 (Rs in millions) 154.779. (B) Investments (C) Inventories Sundry Debtors Cash And Bank Loans And Advances (i) Current Liabilities Provisions (ii) Net Curr.30 9.892.80 5.062.180.70 7.90 2.50 54.472.10 47.831.30 7.953.10 41.30 6.258.20 103.90 31.170.859.089.70 March.40 5.854.40 30.424. as at 31st Mar-2009 Liabilities Share Capital Reserves & Surplus Net Worth (1) Secured Loans (2) Unsecured Loans (3) Total Liabilities(1+2+3 Assets Gross Block (-) Acc.80 17.40 76.60 32.60 103.016.203.779.80 10.833.70 32.40 21.70 53.60 76.290.197.90 28.30 March.156.90 9.099.2009 73.10 529.80 37.10 13.044.995.20 21. Assets (i ii) (D) Misc.604.2008 59.153.80 11.20 32.70 March.789.40 3.40 60.998.817.858.873.40 7.80 15.154.779.

30 Depreciation Profit Bef.50 13.60 Profit Interest 2.681.70 Gross Profit 4.928.10 16.959.10 12.274.029.60 620.20 Cost 7.559.20 20.685.80 Excise Other 8.Table : Profit & Loss Statement of Jindal Steel & Power Ltd.678.50 17.2008 (Rs in millions) 53.50 6.584.20 2.90 Name 23.00 3.30 March .90 12.359. March .699.00 Net Profit Other Non-1.60 Other Income 78.364.941.098.60 10.645.430.30 Sales 1.00 Tax 16.559.40 573.364. 21.528.369.2007 (Rs in millions) 35.30 .655.10 6.20 March .634.654.90 554.330.70 Expenses Operating 26.254.40 22.80 360.343.967.731.362.80 7.00 7.80 Profit Equity Dividend 853.515.778.90 4.366.60 2.10 54.994.60 14.230.70 9.591.20 3.90 Total Income Raw Material 34.70 -1.10 88.80 35.480.708.00 Tax 4.813.2009 (Rs in millions) 76.20 Recurring Income Reported 15.418.10 2.194.772.10 1.90 5.378.

20 Values 10776.84 It is not safe.2 Current Liabilities = 41116. No. Ratios Net Working Capital = Current assets-Current liabilities Current Ratio = 02.60 Sales = 76778.Ratio Analysis for 2009 Table : Analysis of Financial Ratios for 2009 Sl. 34% It is safe. 0.30 9.60 Interest = 2678. Long term debt Shareholder s Equity Particulars (Rs in millions) Current Assets = 51892.40 Current Assets = 51892.90 Operating Profit = 26378.40 Quick Assets =39793. . 0.80 Current Liabilities = 41116. 1.80 Current Liabilities = 41116. Current Assets Current Liabilities Acid test or Quick ratio = 03. 01.40 Total debt = 49626.96 It is safe.26 It is not safe. Operating Pro&it ∗ 100 Sales Operating Profit = 26378.5 Shareholder Equity = 54153.4 Remarks Liquidity position is good. Operating Pro&it Interest Operating Profit margin = 06. Quick Assets Current Liabilities Debt-Equity Ratio = 04. Interest Coverage = 05.91 It is good.

97% It is not satisfactory Return on Investments = 10. 36. Net Pro&it ∗ 100 Sales Return on Assets = 20.01 % It is not desirable.86 % It is good. Net Pro&it before Tax ∗ 100 Net Worth Return on Net Worth = Net Pro&it ∗ 100 Average Net Worth Profit Before Tax = 21362 Net Worth = 54153.30 Net Profit = 15364. Operating Pro&it ∗ 100 Average Assets 19.20 Net profit = 16. No 07.9 Values Remarks 30.708.00 Average Net Worth = 45858.60 Average Assets = 132045. 09. Ratios Gross Profit margin = Gross Pro&it ∗ 100 Sales Net Profit margin = Particulars (Rs in millions) Gross Profit = 23699.Sl. 08.30 Operating Profit = 26378.4% It is satisfactory .80 Sales = 76778.5 It is satisfactory 39.70 Sales = 76778.44% 11.

32% It is not good. Fixed Assets turnover = 6789: .Sl.30 0.55 It is not satisfactory.60 Avg. 15. Cost of Goods Sold Ratio = 13. Cost of Goods sold + otherExpenses Sales 0.20 Sales =76778. Cost of Goods Sold Sales Cost of goods sold = 34.<=9> 7::9?: Fixed Assets = 92973.30 Other Expenses = 8.70 0. No 12. Capital Employed = 152228. Operating Ratio = 14. .82 It is good. Ratios Return on Capital Employed = Operating Pro&it ∗ 100 Average Capital Employed Particulars (Rs in millions) Operating Profit = 26378.194.9 Values Remarks 17.645.45 It is not satisfactory.1 Sales =76778.

9 Remarks Liquidity position is good. Long term debt Shareholder s Equity Particulars (Rs in millions) Current Assets = 32. Quick Assets Current Liabilities Debt-Equity Ratio = 04.80 Total debt = 38633.154.0 It is good.563.20 Operating Profit = 22.5 Shareholder Equity = 37. Ratios Net Working Capital = Current assets-Current liabilities Current Ratio = 02.70 Current Liabilities = 21. 1.80 Current Assets = 32. Operating Pro&it Interest Operating Profit margin = 06.995.Ratio Analysis for 2008 Table: Analysis of Financial Ratios for 2008 Sl. Operating Pro&it ∗ 100 Sales Operating Profit = 22.154.959.154.5 It is not safe.70 Current Liabilities = 21.10 Interest = 2. 1.80 Values 11840. 42% It is safe.1 Current Liabilities = 21.959.10 Sales = 53. No 01.995.44 It is not safe.40 9. 1.0 It is safe.681. Interest Coverage = 05.80 Quick Assets = 23190. . Current Assets Current Liabilities Acid test or Quick ratio = 03.430.

04% It is not good.70 Average Net Worth = 31265. Return on Investments = 10. Net Pro&it ∗ 100 Sales Return on Assets = 23.14% It is satisfactory 11. No 07.959.10 Average Assets = 86643. Ratios Gross Profit margin = Gross Pro&it ∗ 100 Sales Net Profit margin = Particulars (Rs in millions) Gross Profit = 20.54% It is satisfactory .55 44.20 Net Worth = 37563. 09. 44. Net Pro&it before Tax ∗ 100 Net Worth Return on Net Worth = Net Pro&it ∗ 100 Average Net worth Profit Before Tax =16584.24% It is good.40 Operating Profit = 22.528.681.49% It is not good.90 Sales = 53.681. Operating Pro&it ∗ 100 Average Assets 26.60 Sales = 53.40 Net Profit = 12369.Sl.80 Net profit = 13928.35 Values Remarks 38. 08.

<=9> 7::9?: Fixed Assets = 64325 Sales = 53. No 12.Sl. Cost of Goods sold + otherExpenses Sales 0.681.8% It is not good Cost of Goods Sold Ratio = 13.83 It is good.40 0.274.959. Operating Ratio = 14.7 Values Remarks 21.00 Sales = 53. .40 Other Expenses = 5813. Ratios Return on Capital Employed = Operating Pro&it ∗ 100 Average Capital Employed Particulars ( Rs in millions) Operating Profit = 22. Fixed Assets turnover = 6789: .40 0.10 Avg. Cost of Goods Sold Sales Cost of goods sold = 17.32 It is not satisfactory.681.43 It is not satisfactory. 15. Capital Employed = 105197.

12 It is not satisfactory.90 Current Assets = 18.90 Quick Assets = 11592.10 Sales = 35.40 It is good.967.10 Interest = 1.016.14 It is not safe.953. Quick Assets Current Liabilities Debt-Equity Ratio = 04.72 1.953.098.60 Current Liabilities =15. No 01.90 Total debt = 35077.098. Current Assets Current Liabilities Acid test or Quick ratio = 03.731.953. Long term debt Shareholder s Equity Particulars (Rs in millions) Current Assets = 18.016. 1. Ratios Net Working Capital = Current assets-Current liabilities Current Ratio = 02.60 Current Liabilities =15. Operating Pro&it ∗ 100 Sales Operating Profit = 14. . It is not satisfactory. Operating Pro&it Interest Operating Profit margin = 06.230. Interest Coverage = 05.30 Values Remarks 2062. 0.Ratio Analysis for 2007 Table: Analysis of Financial Ratios for 2007 Sl.2 Current Liabilities =15.2 Shareholder Equity = 24.80 8.90 Operating Profit = 14. 40 % It is satisfactory.7 Liquidity position is good.

9% It is good.366.80 Operating Profit = 14. .359.941.80 Net Profit = 7.098.029.90 Sales = 35. Net Pro&it before Tax ∗ 100 Net Worth Return on Net Worth = Net Pro&it ∗ 100 Average Net worth Profit Before Tax = 9.20 Sales = 35. Net Pro&it ∗ 100 Sales Return on Assets = 19.48% It is safe.95 Values Remarks 35% It is satisfactory 08. Operating Pro&it ∗ 100 Average Assets 21. No 07.09% It is not satisfactory Return on Investments = 10. 31.60 Net Worth = 24.Sl.230. 09.967. Ratios Gross Profit margin = Gross Pro&it ∗ 100 Sales Net Profit margin = Particulars (Rs in millions) Gross Profit = 12. 11.10 Average Net Worth = 21707.9% It is not satisfactory.2 37.10 Average Assets = 66821.230.30 Net profit = 6.

00 Sales = 35.Sl.48 It is not satisfactory Fixed Assets = 57949.10 Avg. Cost of Goods Sold Ratio = 13.098.685. . Operating Ratio = 14. Capital Employed = 80691.60 Sales Fixed Assets turnover = 15.<=9> 7::9?: 0.80 0.15 Values Remarks 17.30 It is not satisfactory.61 It is not good. Other Expenses Cost of Goods sold + otherExpenses = 6. No 12.230. Ratios Return on Capital Employed = Operating Pro&it ∗ 100 Average Capital Employed Particulars (Rs in millions) Operating Profit = 14.47% It is not safe.80 0. 6789: .480.4 Sales = 35. Cost of Goods Sold Sales Cost of goods sold = 10.230.

20 13.40 17. Net profit has increased 140.60 2008 ( Rs in millions) 32995. PBT has increased.230.194.2 38633.30 34.Summary for Balance Sheet and Profit & Loss Statement Table : Summary of Balance Sheet 2007 (Rs in millions) Current Assets 18016.60 6.00 14.7% Sales Raw Material Cost Operating Profit Profit Bef.1 Current Liabilities Long term Liabilities 3854.098.5 49626.274.362.10 2008 (Rs in millions) 53. Purchase of raw material has increased.7 2009 (Rs in millions) 51892.10 9.70 2009 (Rs in millions) 76.80 Remarks Current asset position has increased.685. Fixed Assets have increased due to increase in gross block. Current Liabilities have increased marginally.40 9858.00 22.20 26. Debts have increased due to more investment.10 35077.584. Liquidity position is very good.60 21.681.10 16.00 16.4 64325 92973. Fixed Assets 57949.778.359.928.941. Operating profit has increased.00 Remarks Sales position has doubled. Tax (PBT) Net profit .378.5 Table : Summary of Profit & Loss Statement 2007 (Rs in millions) 35.80 10.708.80 5819.959.

80 23.10 453.30 273.30 566.60 1.60 82.846.80 15.316.00 63.557.974. Depreciation Net Block (A) Capital Work in Prgs.329.205.234.050.570.795.049.50 230.ii) (D) Misc.033.011.20 March.80 .40 68.2008 164. (B) Investments (C) Inventories Sundry Debtors Cash And Bank Loans And Advances (i) Current Liabilities Provisions (ii) Net Curr.90 1.2008 March.10 237.405.50 62.60 29.359.277.50 41.80 5.906.60 89.80 6.684.294.2007 160.Tata Steel Table :Balance Sheet of Tata Steel as at 31st mar-2009 Liabilities Share Capital Reserves & Surplus Net Worth (1) Secured Loans (2) Unsecured Loans (3) Total Liabilities(1+2+3) Assets Gross Block (-) Acc.492.804.945.922.2007 (Rs in millions) (Rs in millions) (Rs in millions) 62.224.20 24.719.40 61.20 58.999.331.864.828.10 115.674.414.70 85.30 237.341.624.046.30 235.80 March.034.50 37.011.50 -3.916.80 145.259.10 43.031.80 34.80 4.90 82.20 97.60 29.30 35.431.50 297.813.589.90 26.80 March.40 345.40 34.70 566.90 74.974.224.082.20 133.20 140.80 423.70 109.434.10 2.2009 March.507.863.40 381.40 19.90 118.10 63.551.422.717.414.00 39.876.00 7.80 82.50 40.135.70 6.561. Expenses (E) Total Assets (A+B+C+D+E) March.061.304.657.2009 200.10 90. Assets (i .130.30 76.10 453.650.50 146.007.00 58.025.963.961.507.797.80 284.80 210.

70 49.10 3.016.2009 (Rs in millions) Sales Other Income Total Income Raw Material Cost Excise Other Expenses Operating Profit Interest Name Gross Profit Depreciation Profit Bef.689.346.221.155.10 68.480.248.870.794.50 2.053.479.50 23.483.00 2.2007 (Rs in millions) 174.80 82.20 3.30 42.2008 (Rs in millions) 196.544.30 91.977.40 11.391.00 76.189.80 25.80 23.80 -657.10 .10 8.90 60.00 70.851.30 2.50 66.017.040.290.40 179.40 14.00 25.547.00 56.283.20 28.50 82.895.370.799.378.30 73.472.439.40 9.80 200.00 21.40 9.10 52.148.625.60 246.90 63.869.50 20.50 9.60 4.30 46.972.734.30 11.Table: Profit & Loss Statement Tata Steel March .689.445. Tax Tax Net Profit Other NonRecurring Income Reported Profit Equity Dividend 243.70 42.192.281.526.40 24.404.30 March .041.80 69.802.512.137.952.764.536.10 43.878.50 March .80 44.00 8.

00 Operating Profit = 91.50 Total debt = 269461.895. . 0.764. 0.8 Shareholder Equity = 297.3082.91 It is good.16 It is not safe.916. Operating Pro&it ∗ 100 Sales Operating Profit = 91.9 Remarks Liquidity available is less. 37 % It is good. Operating Pro&it Interest Operating Profit margin = 06. Current Assets Current Liabilities Acid test or Quick ratio = 03.999. Ratios Net Working Capital = Current assets-Current liabilities Current Ratio = 02. No.9 Current Liabilities =118.916.046. Long term debt Shareholder s Equity Particulars (Rs in millions) Current Assets = 115.999.50 Current Assets = 115.483.999. Quick Assets Current Liabilities Debt-Equity Ratio = 04.60 Current Liabilities = 118. Interest Coverage = 05.764. 0.50 Quick Assets = 81111.40 Interest = 14.00 Values .Ratio Analysis for 2009 Table Analysis of Financial Ratios for 2009 Sl.68 It is not safe.60 Current Liabilities =118.40 Sales = 243.20 6.97 It is not safe. 01.

09.87% It is not good.62% It is not satisfactory 11. Return on Investments = 10. No.Sl. 17.75 Values Remarks 31. Ratios Gross Profit margin = Gross Pro&it ∗ 100 Sales Net Profit margin = Particulars (Rs in millions) Gross Profit = 76.57 % It is good.20% It is not good. Net Pro&it ∗ 100 Sales Return on Assets = 21. 08.36% It is not good.40 Sales =243.20 Net Profit = 52.20 Operating Profit = 91. Operating Pro&it ∗ 100 Average Assets 14.017.483.65 23.764. Pro&it Before Tax ∗ 100 Net worth Return on Net Worth = Net Pro&it ∗ 100 Average Net worth Profit Before Tax = 70189 Net Worth = 297046 Net profit = 49040.869.483. .40 Sales = 243.40 Average Assets = 616843. 07.30 Average Net Worth = 285026.

4 Values Remarks 12.972.40 Sales = 243.483. Cost of Goods Sold Ratio = 13. Ratios Return on Capital Employed = Operating Pro&it ∗ 100 Average Capital Employed Particulars ( Rs in millions) Operating Profit = 91.<=9> A::9?: 0.40 Avg.794.483.20 0. Other Expenses Cost of Goods sold + otherExpenses = 43. Cost of Goods Sold Sales Cost of goods sold = 82. Capital Employed = 725122.42 It is satisfactory .65% It is not good.Sl.30 Sales Fixed Assets turnover = 15.20 0.52 It is not satisfactory Fixed Assets = 568540 Sales = 243. No 12.764.34 It is not satisfactory Operating Ratio = 14. 6789: .

01.80 Current Assets = 381963. Ratios Net Working Capital = Current assets-Current liabilities Current Ratio = 02.80 Total debt = 180216.40 Interest = 9290.80 Quick Assets = 355913.66 It is not safe Interest Coverage = 05.40 Sales = 196544.87 It is not satisfactory 41% It is satisfactory . Long term debt Shareholder s Equity Particulars (Rs in millions) Current Assets = 381963. No. Operating Pro&it Interest Operating Profit margin = 06.40 Current Liabilities = 97557.64 It is satisfactory 0.9 Shareholder Equity = 273007.Ratio Analysis for 2008 Table: Analysis of Financial Ratios for 2008 Sl.6 Current Liabilities = 97557.6 Remarks Liquidity position is good.92 It is safe 3. Operating Pro&it ∗ 100 Sales Operating Profit = 82445. 3.40 Current Liabilities = 97557.30 Operating Profit = 82445. Current Assets Current Liabilities Acid test or Quick ratio = 03.30 Values 284405.10 8. Quick Assets Current Liabilities Debt-Equity Ratio = 04.

Net Pro&it ∗ 100 Sales Return on Assets = 23.4 25. Ratios Gross Profit margin = Gross Pro&it ∗ 100 Sales Net Profit margin = Particulars (Rs in millions) Gross Profit = 73155. 07.22% It is good.80 Net Worth = 273007.30 Sales =196544.30 Net profit = 44479 Average Net Worth = 206984. 09.10 Net Profit = 46870. 21. Operating Pro&it ∗ 100 Average Assets 19 % It is not safe. No.10 Sales = 196544. Return on Investments = 10. 08.Sl.8% It is not satisfactory.40 Average Assets = 433708.48% It is not satisfactory .01% It is not good. 11.7 Values Remarks 37.10 Operating Profit = 82445. Pro&it before Tax ∗ 100 Net worth Return on Net Worth = Net Pro&it ∗ 100 Average Net worth Profit Before Tax = 68281.

<=9> A::9?: 0.10 Other Expenses = 28480. 12.50 0.40 Avg.17 It is not safe . Ratios Return on Capital Employed = Operating Pro&it ∗ 100 Average Capital Employed Particulars ( Rs in millions) Operating Profit = 82445. No.30 It is not satisfactory Operating Ratio = 14.5 Sales = 196544.73% It is not safe Cost of Goods Sold Ratio = 13.1 Values Remarks 15. Cost of Goods sold + otherExpenses Sales Fixed Assets turnover = 15. Capital Employed = 523886.45 It is not satisfactory Fixed Assets = 167267. 6789: . Cost of Goods Sold Sales Cost of goods sold = 60248 Sales = 196544.Sl.10 1.

Long term debt Shareholder s Equity Particulars (Rs in millions) Current Assets = 146.00 Total debt = 96453.526.77 It is not satisfactory.Ratio Analysis for 2007 Table: Analysis of Financial Ratios for 2007 Sl.49 It is safe. Ratios Net Working Capital = Current assets-Current liabilities Current Ratio = 02. 39. No.50 Interest = 2.3 Shareholder Equity = 140. 01.10 Current Liabilities = 82.512.1 Liquidity position is good.51 It is not satisfactory.961.50 Sales = 174.68 It is not safe.797.10 Current Liabilities = 82.797.6% It is good.50 Operating Profit = 69. Current Assets Current Liabilities Acid test or Quick ratio = 03. Interest Coverage = 05.3 Current Liabilities = 82. 0.00 Quick Assets = 123389.797.50 Values Remarks 63922. Operating Pro&it Interest Operating Profit margin = 06.719. 1.137. Quick Assets Current Liabilities Debt-Equity Ratio = 04.00 Current Assets = 146.137.60 27.719. Operating Pro&it ∗ 100 Sales Operating Profit = 69. 1. .

.95% It is good.25 44.17% It is satisfactory.221.00 Sales = 174. Ratios Gross Profit margin = Gross Pro&it ∗ 100 Sales Net Profit margin = Particulars (Rs in millions) Gross Profit = 66. Net Pro&it ∗ 100 Sales Return on Assets = 24.137. Return on Investments = 10.50 Net profit = 42.50 Sales = 174.19% It is not satisfactory.283.961. 09.50 Average Assets = 253753.60 Operating Profit = 69. 11.89% It is safe. Operating Pro&it Average Assets 27. 08.Sl. 07.60 Net Profit = 42.526. No.625.3 Values Remarks 38.24% It is not good.50 Net Worth = 140. Pro&it Before Tax ∗ 100 Net Worth Return on Net Worth = Net Pro&it ∗ 100 Average Net worth Profit Before Tax = 63. 35.526.80 Average Net Worth = 119257.878.

96% It is not satisfactory.32 It is not good.<=9> 7::9?: 0.95 Values Remarks 20.137.47 It is not good. 6789: .50 Sales = 174.80 Sales Fixed Assets turnover = 15.526. Cost of Goods Sold Ratio = 13.526. Other Expenses Cost of Goods sold + otherExpenses = 25. 12.01 It is not safe. Fixed Assets = 171467. Ratios Return on Capital Employed = Operating Pro&it ∗ 100 Average Capital Employed Particulars (Rs in millions) Operating Profit = 69. Cost of Goods Sold Sales Cost of goods sold = 56. Capital Employed = 329720. .Sl. No.50 Avg.60 0. Operating Ratio = 14.4 Sales = 174.60 1.799.547.

878.479.60 Remarks Short term liquidity available is very less.5 % Expenses have increased.189.80 44.544.6 2008 (Rs in millions) 196.50 Long term Liabilities 96453.40 63.00 49.794.10 2008 (Rs in millions) 381963.5 568540 Fixed Assets have increased due to increase in investment.3 180216.50 82.50 60.40 69. 171467.40 91.00 70. Current Liabilities 82797 97557.281.283.764.483.20 Remarks Sales have increased by 39. Sales Raw Material Cost Operating Profit Profit Bef.040. Net profit has increased marginally.799.40 2009 (Rs in millions) 115916.50 42.10 2009 (Rs in millions) 243. Operating profit has increased.137. Substantial increase in liabilities.30 . Tax (PBT) Net profit 56.8 Table : Summary of Profit & Loss Statement 2007 ( Rs in millions) 174.9 269461. Liquidity position is not good.Summary for Balance Sheet and Profit & Loss Statement Table : Summary of Balance Sheet 2007 (Rs in millions) Current Assets Fixed Assets 146719. Debts have increased because of more investment.00 82.526.4 167267.248.445. PBT has increased.80 118999.80 68.

Liquidity position of Tata steel was not satisfactory as the ratio varied from 0.26 0.5 1.72 1. while positions of Tata Steel has come down.97 From the above table.97 in five years.71 REMARKS JSPL has a better ratio JSPL has a better ratio Tata Steel has a better ratio TATA STEEL has a better ratio JSPL has a better ratio Dec .1 1. . 2005-06 Dec . was always more than 1 from 2004 -09. 2007-08 Dec .FINDINGS Comparison of Current ratio of Tata Steel and Jindal Steel and Power Ltd. Short term liquidity of Jindal Steel & Power Ltd. Current ratio of Tata Steel decreased steeply from 2007 -09 due to its decrease in current assets position.71 to 0.26 1. In the period of 5 years JSPL has improved its liquidity position compared to TATA STEEL. 2006-07 Dec .77 3. 2008-09 1. it can be concluded that current ratio of JSPL Ltd. 2004-05 1.34 TATA STEEL 0. from 2004-09 Table: Comparison of Current ratio JSPL Dec .92 0. was good as current ratio was more than 1.

2005-06 Dec . .equity ratio of 1.48 and 1. JSPL has the highest debt. Tata Steel has improved its ratio from 0.4 1 0.25 0.66 0. Though owner’s share in the company has decreased but more outsiders have started investing in the company and that has lead to desirable ratio. 2007-08 Dec . 2008-09 1.13 to 0.91 JSPL has a better ratio JSPL has a better ratio JSPL has a better ratio JSPL has a better ratio JSPL &Tata Steel has a better ratio From table it can be seen that Debt position of JSPL was satisfactory as the ratio varied from 1.91 from 2004-09 because of increasing investment.13 1.91 in five years.38 0.48 1.Comparison of Debt –Equity ratio JSPL and TATA STEEL Companies from 2004-09 Table : Comparison of Debt –Equity ratio JSPL TATA STEEL 0.91 Remarks Dec .40 from 2005-07 compared to TATA STEEL. 2004-05 Dec .38 to 0.68 0. However D-E ratio of Tata Steel remained less than 1 from 2004-09 as their debts were paid off. 2006-07 Dec .

97% REMARKS TATA STEEL has a better net profit margin. Though sales of the company JSPL increased.19% 23. 2006-07 Dec .9% 23. 2005-06 22. 2007-08 Dec .8% 21.33% 23. .6% from 2004-09. Profit Margin of GMDC came down from 28. TATA STEEL has a better net profit margin. 2004-05 22.36% From Table it can be seen that TATA STEEL has the highest profit margin in all the five years which is because of their increase in sales. Dec .04 % to 23. TATA STEEL has a better net profit margin. their profit percentage decreased from 2004-09 due to their decrease in net profit.17% Dec .Comparison of Net Profit margin of JSPL and TATA STEEL companies from 2004-09 Table : Comparison of Net Profit Margin JSPL TATA STEEL 23. TATA STEEL has a better net profit margin.04% 20.88% Dec .01% 24. 2008-09 19. TATA STEEL has a better net profit margin.

64% 37.Comparison of ROI of Different Companies from 2004-09 Table : Comparison of ROI JSPL Tata Steel Remarks Tata steel has a better ratio TATA STEEL has a better ratio TATA STEEL has a better ratio JSPL has a better ratio JSPL has a better ratio Dec .62% From the above table it can be seen that ROI of Tata Steel was highest in 2004-05 with 74.44% 53. .14% 39. 2006-07 Dec .62%.57% Dec . 2007-08 Dec . Similarly ROI of JSPL decreased from 52.41 % due to significant increase in its expenses. 2008-09 39.89% 25.57% and then it declined to 23.31 % to 39.48% 44. 2004-05 52. 2005-06 Dec .31% 74.01% 23.28% 44.

current ratio. For Tata Steel in 2007. It is known that investing in any company involves a lot of risk. operating profit margin and gross profit margin of the company were satisfactory. return on investments. quick ratio.CONCLUSION Analysis and interpretation of financial statements is an important tool in assessing company’s performance. It reveals the strengths and weaknesses of a firm. operating profit margin and gross profit margin. This project mainly focuses on the basics of different types of financial statements. current ratio. It helps the clients to decide in which firm the risk is less or in which one they should invest so that maximum benefit can be earned. return on capital employed and return on assets were found to be unsatisfactory. Based on the data available the trend of the company can be predicted in near future. return on assets and net profit margin of the company were unacceptable. In this project. However. quick ratio. debt-equity ratio. Balance Sheet and Profit & Loss statements of five different coal and non coal mining companies have been studied. current ratio. return on capital employed. return on investments and return on capital employed were unsatisfactory. operating profit margin and gross profit margin were desirable and current ratio. operating profit margin and gross profit margin. net . return on investments. debt-equity ratio. The ratios that are found to be desirable are debt-equity ratio. comparison of different ratios viz. net working capital. net working capital available with the company was adequate. In 2008. return on capital employed and return on assets were undesirable. return on investments. net profit margin. return on net worth. However. Current ratio. net profit margin. Short term liquidity position of JSPL in 2007 was good. net working capital available was inadequate. return on net worth. debt-equity ratio. return on assets. In 2009. The ratios that were found to be satisfactory are quick ratio. Company’s debt-equity ratio. only company’s current ratio improved due to substantial increase in current assets position. So before putting up money in any company one must have thorough knowledge about its past records and performances. return on net worth. In 2008-09.

their profit percentage decreased from 2004-09 due to their decrease in net profit.91 from 2004-09.62%.31% to 39. Debt position of JSPL was satisfactory as the ratio varied from 1. However D-E ratio of Tata Steel was less than 1 in five years as their debts were paid off. was satisfactory as it remained more than 1 for all the five years.57% and then it declined to 23.13 to 0. . Though sales of the company JSPL andTata Steel increased. It was observed Current ratio of Jindal Steel & Power Ltd. Similarly ROI of JSPL decreased from 52.97 in five years.71 to 0. ROI of Tata Steel was highest in 2004-05 with 74.44%.profit margin and return on investment of all the companies from 2004-09 has been done. Liquidity position of Tata steel was not satisfactory as the ratio varied marginally from 0.

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