Analysis for Reliance Ind

2003- 2009
Contents of the spreadsheet
Balance Sheet
Profit and loss account
Yearly and trend analysis
Ratio analysis
Comments

nce Industries Limited

003- 2009
Submitted to:
Dr. Karamjeet Singh
Submitted by:
Name

Rajat Singla

Roll No.

21

Class

MBA GEN -A
IInd Semester

Date of Submission:
08.03.2010

Reliance Industries Limited
Balance Sheet
Year Ending

Mar '03

Mar '04

Mar '05

Mar '06

Mar '07

1,395.92
1,395.92
0
0
26,242.68
2,735.81
30,374.41
11,776.86
7,981.45
19,758.31
###

1,395.95
1,395.95
0
0
30,322.97
2,733.53
34,452.45
11,451.14
9,493.52
20,944.66
###

1,393.09
1,393.09
0
0
36,280.35
2,729.88
40,403.32
7,972.90
10,811.69
18,784.59
###

1,393.17
1,393.17
0
0
43,760.90
4,650.19
49,804.26
7,664.90
14,200.71
21,865.61
###

1,393.21
1,393.21
60.14
0
59,861.81
2,651.97
63,967.13
9,569.12
18,256.61
27,825.73
###

Mar '03

Mar '04

Mar '05

Mar '06

Mar '07

Application Of Funds
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets

50,552.99
18,461.16
32,091.83
1,994.44
6,722.72
7,510.41
2,975.49
136.53
10,622.43
12,566.03
10.68
23,199.14
0
12,446.83
1,475.73
13,922.56
9,276.58
47.15
###

53,502.91
21,713.74
31,789.17
3,356.81
13,971.40
7,231.22
3,189.93
208.77
10,629.92
12,400.97
15.47
23,046.36
0
14,095.88
2,670.75
16,766.63
6,279.73
0
###

55,125.82
24,872.83
30,252.99
4,829.29
17,051.46
7,412.88
3,927.81
384.51
11,725.20
13,869.67
3,224.28
28,819.15
0
17,917.41
3,847.57
21,764.98
7,054.17
0
###

84,970.13
29,253.38
55,716.75
6,957.79
5,846.18
10,119.82
4,163.62
239.31
14,522.75
8,266.55
1,906.85
24,696.15
0
17,656.02
3,890.98
21,547.00
3,149.15
0
###

99,532.77
35,872.31
63,660.46
7,528.13
16,251.34
12,136.51
3,732.42
308.35
16,177.28
12,506.71
1,527.00
30,210.99
0
24,145.19
1,712.87
25,858.06
4,352.93
0
###

Contingent Liabilities
Book Value (Rs)

12,802.00
197.93

8,559.77
227.15

Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Year Ending

6,579.47 24,897.66 46,767.18
270.35
324.03
439.57

All in Rs. Cr.
Mar '08

Mar '09

1,453.39
1,573.53
1,453.39
1,573.53
1,682.40
69.25
0
0
77,441.55
112,945.44
871.26
11,784.75
81,448.60
126,372.97
6,600.17
10,697.92
29,879.51
63,206.56
36,479.68
73,904.48
### 200,277.45
Mar '08

Mar '09

104,229.10
149,628.70
42,345.47
49,285.64
61,883.63
100,343.06
23,005.84
69,043.83
20,516.11
20,268.18
14,247.54
14,836.72
6,227.58
4,571.38
217.79
500.13
20,692.91
19,908.23
18,441.20
13,375.15
5,609.75
23,014.71
44,743.86
56,298.09
0
0
29,228.54
42,664.81
2,992.62
3,010.90
32,221.16
45,675.71
12,522.70
10,622.38
0
0
### 200,277.45
37,157.61
542.74

36,432.69
727.66

Reliance Industries Limited
Profit & Loss account
Year Ending
Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Preoperative Exp Capitalised
Total Expenses

Mar '03

Mar '04

Mar '05

Mar '06

50,095.81 56,247.03 73,164.10 89,124.46
4,391.62 4,397.40 7,245.27 8,246.67
45,704.19 51,849.63 65,918.83 80,877.79
1,135.76 1,384.61 1,573.70
546.96
2,435.49
-605.41
-524.35 2,131.19
49,275.44 52,628.83 66,968.18 83,555.94
35,413.02 35,984.76 47,418.04 59,739.29
719.4
725.15
907.94 1,146.26
651.73
804.75
846.4
978.45
252.36
323.4
303.97
668.31
2,584.82 3,406.76 3,000.27 5,872.33
251.7
411.88
217.3
300.74
-4
-26.43
-9.6
-155.14
###
###
###
###

Year Ending

Mar '03

Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax

8,270.65 9,613.95 12,710.16 14,458.74
9,406.41 10,998.56 14,283.86 15,005.70
1,570.96 1,443.40 1,486.54
893.61
7,835.45 9,555.16 12,797.32 14,112.09
3,452.79 3,331.39 3,784.57 3,400.91
0
0
0
0
4,382.66 6,223.77 9,012.75 10,711.18
0
-13.03
-1.31
0.88
4,382.66 6,210.74 9,011.44 10,712.06
875.9 1,148.00 1,505.00 1,642.72
4,104.31 5,160.14 7,571.68 9,069.34
4,456.01 5,645.51 5,266.28 8,810.95
20.08
0
0
0
698.19
733.1 1,045.13 1,393.51
89.46
91.64
146.58
195.44

Per share data (annualised)
Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)

Mar '04

Mar '05

Mar '06

13,963.78 13,963.78 13,935.08 13,935.08
29.25
36.95
54.34
65.08
50
52.5
75
100

Book Value (Rs)

197.93

227.15

270.35

324.03

es Limited
All in Rs. Cr.
Mar '07

Mar '08

Mar '09

118,353.71 139,269.46
6,654.68
5,463.68
111,699.03 133,805.78
236.89
6,595.66
654.6
-1,867.16
112,590.52 138,534.28

146,328.07
4,369.07
141,959.00
1,264.03
427.56
143,650.59

80,791.65
2,261.69
2,094.09
1,112.17
5,478.10
321.23
-111.21
91,947.72

98,832.14
109,284.34
2,052.84
3,355.98
2,119.33
2,397.50
715.19
1,162.98
5,549.40
4,736.60
412.66
562.42
-175.46
-3,265.65
### 118,234.17

Mar '07

Mar '08

Mar '09

20,405.91
20,642.80
1,298.90
19,343.90
4,815.15
0
14,528.75
0.51
14,529.26
2,585.35
11,943.40
11,156.07
0
1,440.44
202.02

22,432.52
29,028.18
1,162.90
27,865.28
4,847.14
0
23,018.14
48.1
23,066.24
3,559.85
19,458.29
10,673.96
0
1,631.24
277.23

24,152.39
25,416.42
1,774.47
23,641.95
5,195.29
0
18,446.66
0
18,446.66
3,137.34
15,309.32
8,949.83
0
1,897.05
322.4

13,935.08
85.71
110

14,536.49
133.86
130

15,737.98
97.28
130

439.57

542.74

727.66

YEAR
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

Current
Current Asset
22357.12
22040.05
28452.51
24574.45
29913.35
42885.84
54712.27

Ratio
Current Liabilities
10395.72
12285.5
17131.52
16454.48
18578.4
24038.09
35701.9

YEAR
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

Quick
Quick Asset
14846.71
14808.83
21039.63
14454.63
17776.84
28638.3
39875.55

Ratio
Current Liabilities
10395.72
12285.5
17131.52
16454.48
18578.4
24038.09
35701.9

Absolute
Cash

Ratio
Marketable Securities

YEAR

2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

YEAR
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

147.21
224.24
3608.79
2146.16
1835.35
4280.05
22176.53

536.19
536.11
3469.03
523.58
6813.14
9316.85
2678.84

Debtors Turnover Ratio & Average Collection Period
Opening Debtors
Closing Debtors
2722.46
2998.11
2998.11
3046.38
3046.38
3927.81
3927.81
4163.62
4163.62
3732.42
3732.42
6227.58
6227.58
4571.38

Creditors Turnover Ratio & Average Payment Period
Year
Opening Creditors
Closing Creditors
2002-03
6,472.29
9,490.89
2003-04
9,490.89
11,312.32
2004-05
11,312.32
13,659.72
2005-06
13,659.72
12,563.50
2006-07
12,563.50
16,865.53

2007-08
2008-09

16,865.53
21,045.47

Inventory Turnover Ratio & Inventory Period
YEAR
Opening Stock
Closing Stock
2002-03
4974.07
2003-04
7501.41
2004-05
7231.22
2005-06
7412.88
2006-07
10119.82
2007-08
12136.51
2008-09
14247.54

ASSET TURNOVER RATIO
YEAR
Total Asset
Sales
2002-03
63,166.11
2003-04
71,157.43
2004-05
80,586.25
2005-06
93,095.17
2006-07
117,353.28
2007-08
149,838.91
2008-09
245705.65

21,045.47
32,691.00

7501.41
7231.22
7412.88
10119.82
12136.51
14247.54
14,836.72

45,897.79
51,801.53
66,051.30
81,211.33
111,692.72
133,443.00
141,847.47

WORKING CAPITAL TURNOVER RATIO
YEAR
Net Working Capital Sales
2002-03
11961.4
2003-04
9754.55
2004-05
11320.99
2005-06
8119.97
2006-07
11334.95
2007-08
18847.75
2008-09
19010.37

2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

LIQUIDITY RATIOS - CONSOLIDATED
YEAR
Current Ratio
Quick Ratio
2.15
1.79
1.66
1.49
1.61
1.78
1.53

DEBT TO EQUITY RATIO
YEAR
Debt

Equity

45,897.79
51,801.53
66,051.30
81,211.33
111,692.72
133,443.00
141,847.47

1.43
1.21
1.23
0.88
0.96
1.19
1.12

2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

19758.31
20944.66
18784.59
21865.61
27825.73
36,479.68
73,904.48

INTEREST COVERAGE RATIO
YEAR
Interest
PBIT
2002-03
1555.16
2003-04
1434.72
2004-05
1468.66
2005-06
877.04
2006-07
1188.89
2007-08
1077.36
2008-09
1,745.23

30374.41
34452.45
40403.32
49804.26
63967.13
81,448.60
126372.97

6529.37
7735.86
10537.34
11581.1
15709.36
24087.5
20178.46

CAPITAL STRUCTURE RATIOS - CONSOLIDATED
Year
Debt to Equity Ratio Interest Coverage Ratio
2002-03
0.65
4.20
2003-04
0.61
5.39
2004-05
0.46
7.17
2005-06
0.44
13.20
2006-07
0.44
13.21
2007-08
0.45
22.36
2008-09
0.58
11.56

GROSS PROFIT RATIO
YEAR
Gross Profit
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

NET PROFIT RATIO
YEAR
Net Profit
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

PROFIT MARGIN
YEAR
PAT
2002-03
2003-04
2004-05
2005-06

Sales
9366.46
10982.88
14260.84
14982.01
20524.51
28935.87
25373.75

45,897.79
51,801.53
66,051.30
81,211.33
111,692.72
133,443.00
141,847.47

Sales
4974.21
6301.14
9068.68
10704.06
14520.47
23010.14
18,433.23

45,897.79
51,801.53
66,051.30
81,211.33
111,692.72
133,443.00
141,847.47

Sales
4104.31
5160.14
7571.68
9069.34

45,897.79
51,801.53
66,051.30
81,211.33

2006-07
2007-08
2008-09

RETURN ON EQUITY
YEAR
PAT
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

11943.4
19458.29
15,309.32

111,692.72
133,443.00
141,847.47

Equity
4104.31
5160.14
7571.68
9069.34
11943.4
19458.29
15,309.32

RETURN ON CAPITAL EMPLOYED
YEAR
PBIT
Capital Exp
2002-03
6529.37
2003-04
7735.86
2004-05
10537.34
2005-06
11581.1
2006-07
15709.36
2007-08
24087.5
2008-09
20178.46

30374.41
34452.45
40403.32
49804.26
63967.13
81448.6
126,372.97

63737.01
71827.15
80586.25
93095.17
117353.28
149838.91
156638.65

PROFITABILITY RATIO - CONSOLIDATED
YEAR
GROSS PROFIT
NET PROFIT
2002-03
20.41
2003-04
21.20
2004-05
21.59
2005-06
18.45
2006-07
18.38
2007-08
21.68
2008-09
17.89

Earning Per Share
Year
PAT
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

10.84
12.16
13.73
13.18
13.00
17.24
13.00

No. Of Shares
4104.31
1,396,377,536
5160.14
1,396,377,536
7571.68
1,393,508,041
9069.34
1,393,508,041
11943.4
1,393,508,041
19458.29
1,453,648,601
15,309.32
1,573,798,233

Price Earning ratio
Year
Year end Avg Market EPS
Price
2002-03
287.65
2003-04
552.63
2004-05
569.95
2005-06
755.05
2006-07
1316
2007-08
2274.2

29.39
36.95
54.34
65.08
85.71
133.86

2008-09

1349.35

Price to Book ratio
Year
Market Price
Book Value
2002-03
287.65
2003-04
552.63
2004-05
569.95
2005-06
755.05
2006-07
1316
2007-08
2274.2
2008-09
1349.35

CAPITAL MARKET RATIOS – CONSOLIDATED
YEAR
EPS
PE RATIO
2002-03
29.39
2003-04
36.95
2004-05
54.34
2005-06
65.08
2006-07
85.71
2007-08
133.86
2008-09
97.28

97.28

217.52
246.73
289.94
357.4
440
560.3
802.98

9.79
14.96
10.49
11.60
15.35
16.99
13.87

Reliance Industries Limited
RATIOS ARE CALCULATED FOR 7 YEARS

Cur

Current Ratio
2.15
1.79
1.66
1.49
1.61
1.78
1.53

2.50
2.00
1.50
1.00
0.50
0.00
2002-03

2003-04

2004-05

Q

Quick Ratio
1.43
1.21
1.23
0.88
0.96
1.19
1.12

1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2002-03

Current Liabilities

2003-04

Absolute Ratio
0.80
0.70
0.60

2004-05

10395.72
12285.5
17131.52
16454.48
18578.4
24038.09
35701.9

0.07
0.06
0.41
0.16
0.47
0.57
0.70

0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
2002-03

over Ratio & Average Collection Period
Sales
DTR
45,897.79
51,801.53
66,051.30
81,211.33
111,692.72
133,443.00
141,847.47

2003-04

30.00

Collection Period
16.05
22.75
17.14
21.30
18.94
19.27
20.07
18.18
28.29
12.90
26.80
13.62
26.27
13.89

25.00
20.00
15.00
10.00
5.00
0.00
2002-03

Purchases

CTR
3420.75
2218.28
2356.55
2516.13
1821.28

Payment Period
0.43
851.65
0.21
1711.50
0.19
1933.93
0.19
1902.02
0.12
2948.91

6,007.71
2,205.27

Net Sales

0.32
0.08

ITR
45,897.79
51,801.53
66,051.30
81,211.33
111,692.72
133,443.00
141,847.47

1151.65
4447.03

Inventory Period
7.36
49.61
7.03
51.90
9.02
40.46
9.26
39.40
10.04
36.37
10.12
36.08
9.75
37.42

12.00
10.00
8.00
6.00
4.00
2.00
0.00
2002-03

Asset Turnover Ratio
0.73
0.73
0.82
0.87
0.95
0.89
0.58

Asset Turnover
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
2002-03

2003-04

2004-05

2005-06

0.50
0.40
0.30
0.20
0.10
0.00
2002-03

2003-04

2004-05

2005-06

Working Capita

Working Capital TR

12.00

3.84
5.31
5.83
10.00
9.85
7.08
7.46

10.00
8.00
6.00
4.00
2.00
0.00
2002-03

Absolute Ratio

DTR
0.07
0.06
0.41
0.16
0.47
0.57
0.70

DE Ratio

16.05
17.14
18.94
20.07
28.29
26.80
26.27

2003-04

2004-05

Collection Period
CTR
22.75
21.30
19.27
18.18
12.90
13.62
13.89

2005-06

0.43
0.21
0.19
0.19
0.12
0.32
0.08

DE Rati
0.70
0.60
0.50

DE Rati
0.65
0.61
0.46
0.44
0.44
0.45
0.58

0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
2002-03

2003-04

2004-05

2005-06

IC Ratio

IC Ratio
4.20
5.39
7.17
13.20
13.21
22.36
11.56

25.00
20.00
15.00
10.00
5.00
0.00
2002-03

2003-04

2004-05

2005-06

GP Ratio

GP Ratio
20.41
21.20
21.59
18.45
18.38
21.68
17.89

25.00
20.00
15.00
10.00
5.00
0.00
2002-03

2003-04

2004-05

2005-06

NP Ratio

NP Ratio
10.84
12.16
13.73
13.18
13.00
17.24
13.00

20.00
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2002-03

2003-04

2004-05

2005-06

Profit Margin

Profit Margin
8.94
9.96
11.46
11.17

16.00
14.00
12.00
10.00
8.00
6.00

16.00
14.00
12.00

10.69
14.58
10.79

10.00
8.00
6.00
4.00
2.00
0.00
2002-03

2003-04

2004-05

2005-06

ROE

ROE
13.51
14.98
18.74
18.21
18.67
23.89
12.11

30.00
25.00
20.00
15.00
10.00
5.00
0.00
2002-03

2003-04

2004-05

2005-06

ROCE

ROCE
10.24
10.77
13.08
12.44
13.39
16.08
12.88

18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2002-03

2003-04

2004-05

2005-06

4.00
2.00
0.00
2002-03

PROFIT MARGIN

2003-04

2004-05

2005-06

RETURN ON EQUITY
RETURN ON CAPITAL
8.94
13.51
10.24
9.96
14.98
10.77
11.46
18.74
13.08
11.17
18.21
12.44
10.69
18.67
13.39
14.58
23.89
16.08
10.79
12.11
12.88

EPS

EPS
29.39
36.95
54.34
65.08
85.71
133.86
97.28

160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
0.00
2002-03

2003-04

2004-05

2005-06

P/E Rat

P/E Ratio
9.79
14.96
10.49
11.60
15.35
16.99

18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00

14.00
12.00
10.00

13.87

8.00
6.00
4.00
2.00
0.00
2002-03

2003-04

2004-05

2005-0

Price/Book R

Price/Book Ratio
1.32
2.24
1.97
2.11
2.99
4.06
1.68

4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2002-03

PRICE TO BOOK RATIO
1.32
2.24
1.97
2.11
2.99
4.06
1.68

2003-04

2004-05

2005-06

04

-04

0.80

0.70

0.60

Current Ratio

Current Ratio

2004-05

2005-06

2006-07

2007-08

2008-09

Quick Ratio

Quick Ratio

2004-05

2005-06

2006-07

2007-08

Absolute Ratio

2008-09

Absolute Ratio

0.80

0.70

0.60

0.50

0.40

Absolute Ratio

0.30

0.20

0.10

0.00
2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

30.00
25.00
20.00

DTR
Collection Perio

15.00
10.00
5.00
0.00
2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

CTR
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10

CTR

20

0.45
0.40
0.35
0.30
0.25

CTR

0.20
0.15
0.10
0.05
0.00
2002-03

2003-04

2004-05

2005-06

2007-08

2008-09

ITR
12.00
10.00
8.00
6.00

ITR

4.00
2.00
0.00
2002-03

2003-04

2004-05

2005-06

sset Turnover Ratio

04-05

2006-07

Asset Turnover Ratio

2005-06

2006-07

2007-08

2008-09

2006-07

2007-08

2008-09

04-05

Asset Turnover Ratio

2005-06

2006-07

2007-08

2008-09

Working Capital TR

004-05

Working Capital TR

2005-06

2006-07

2007-08

2008-09

Payment Period ITR
Inventory Period Asset Turnover Ratio
851.65
7.36
49.61
0.73
1711.50
7.03
51.90
0.73
1933.93
9.02
40.46
0.82
1902.02
9.26
39.40
0.87
2948.91
10.04
36.37
0.95
1151.65
10.12
36.08
0.89
4447.03
9.75
37.42
0.58

DE Ratio

DE Ratio

DE Ratio

2004-05

004-05

2005-06

2006-07

2007-08

IC Ratio

IC Ratio

2005-06

2006-07

2007-08

2008-09

2008-09

GP Ratio

GP Ratio

2004-05

2005-06

2006-07

2007-08

2008-09

NP Ratio

NP Ratio

2004-05

2005-06

2006-07

2007-08

Profit Margin

Profit Margin

2008-09

04-05

2004-05

2004-05

Profit Margin

2005-06

2006-07

2007-08

2008-09

ROE

ROE

2005-06

2006-07

2007-08

2008-09

ROCE

ROCE

2005-06

2006-07

2007-08

2008-09

2004-05

2005-06

2006-07

2007-08

2008-09

EPS

EPS

2004-05

2005-06

2006-07

2007-08

2008-09

P/E Ratio

P/E Ratio

P/E Ratio

2004-05

2005-06

2006-07

2007-08

2008-09

Price/Book Ratio

Price/Book Ratio

2004-05

2005-06

2006-07

2007-08

2008-09

rent Ratio

2008-09

Quick Ratio

2008-09

Absolute Ratio

2007-08

2008-09

DTR
Collection Period

2006-07

2007-08

2008-09

Payment Period
5000.00
4500.00
4000.00
3500.00
3000.00
CTR

2500.00
2000.00
1500.00

7

4500.00
4000.00
3500.00
3000.00
CTR

2500.00
2000.00
1500.00
1000.00

2007-08

2008-09

500.00
0.00
2002-03

2003-04

2004-05

2005-06

2006-07

Inventory Period
60.00
50.00
40.00
ITR

30.00
20.00
10.00

2007-08

2008-09

0.00
2002-03

2003-04

2004-05

2005-06

2006-07

Working Capital TR.
3.84
5.31
5.83
10.00
9.85
7.08
7.46

ment Period

Payment Period

Payment Period

2005-06

2006-07

2007-08

2008-09

entory Period

Inventory Period

2005-06

2006-07

2007-08

2008-09

Reliance Ind
INTERPRETATION OF RATIOS
1) Current Ratio:
Formula = Current Assets/Current Liabilities
Current ratio in a business indicates that the availability of the current
But here it can be seen that it has always been more than 1.5. Though

2) Quick Ratio:

Formula = Quick Assets/Current Liabilities
Quick ratio is a better form of the CURRENT RATIO which excludes from
always been around 1. Thus, it is adequate and there is no need to pan

3) Absolute Ratio:

Formula = Absolute Assets/Current Liabilities
This ratio is the acid test ratio, which tells how much current liabilities a
satisfactory.

4) Debtors Turnover Ratio:

Formula = Avg. Debtors/Sales
Debtors turnover ratio represents the speed at which cash is realized fr
and now the company has increased this ratio to 26 which is excellent.

5) Collection Period:

Formula = 365/Debtor Turnover Ratio
This ratio represents the number of days required to realize cash from r
decreased it to 13 days which is excellent. It means company is realizin

6) Creditors Turnover Ratio:

Formula = Avg. Creditors/Sales
Creditors turnover ratio represents the speed at which business pays ca
beginning and now the company has decreased this ratio to 0.08 which

6) Creditors Turnover Ratio:

Formula = Avg. Creditors/Sales
Creditors turnover ratio represents the speed at which business pays ca
beginning and now the company has decreased this ratio to 0.08 which
 

7) Collection Period:

Formula = 365/Creditor Turnover Ratio
This ratio represents the number of days in which company pays to its
increased it to 4447 days which is excellent. It means company is payin
 

 8) Inventory Turnover:

Formula = Avg. Inventory/Net Sales
This ratio indicates that how fast inventories is used or sold. A high rati
satisfactory.
 

9) Inventory period:

Formula = 365/Inventory Turnover Ratio
It is a representation of the inventories turnover ratio in the number of
36 days with minimum in the year 2007-08 and highest of 52 days in th

10) Assets Turnover Ratio:

Formula = Net Sales/Assets
Fixed assets turnover ratio establishes a relationship between net sales
Objective and Significance: This ratio expresses the number to times th
employed. A high ratio means a high rate of efficiency of utilisation of f
satisfactory.

11) Working Capital Turnover Ratio:

Formula = Net Sales(COGS)/Net Working Capital
Where Net Working Capital = Current Assets – Current Liabilities
Working capital turnover ratio establishes a relationship between net sa
Objective and Significance: This ratio indicates the number of times the
working capital and the greater are the profits. However, a very high tu
indicates that the working capital has not been used efficiently. The rat
 

12) DEBT EQUITY RATIO
Formula = Debt/Equity

Objective and Significance: This ratio indicates the number of times the
working capital and the greater are the profits. However, a very high tu
indicates that the working capital has not been used efficiently. The rat
 

12) DEBT EQUITY RATIO

Formula = Debt/Equity
This ratio indicates proportion of owner’s fund to total fund’s investmen
utilization of the leverages is not done properly by the company. In cas
riskiness of the business in this years. But good returns has never mad

13) Interest Coverage Ratio:

Formula = Net Profit before Interest and Tax/Interest on Long-t
Interest Coverage Ratio is a ratio between ‘net profit before interest an
Objective and Significance: This ratio expresses the satisfaction to the
This ratio indicates that how many times the profit covers the interest.
periodical interest. Earlier, the ratio was very less for Reliance at 4 but

14) GROSS PROFIT RATIO:

Formula = Gross Profit/Net Sales
It indicates the firm’s capacity to face adverse economic conditions suc
the company has no reason to worry.
 
 

15) NET PROFIT RATIO:

Formula = Net Profit/Net Sales
It indicates the profitability over sales. In the earlier years , its value wa
previous years.

16) PROFIT MARGIN:

Formula = Profit After Tax(PAT)/Net Sales
It indicates the profitability margin of the company in terms of sales. It
9 which was very less . Over the years , the company has increased th
down to 11.

17) RETURN ON EQUITY:

Formula = Profit After Tax(PAT)/Equity
This ratio is more meaningful to the equity shareholders who are intere

9 which was very less . Over the years , the company has increased th
down to 11.

17) RETURN ON EQUITY:

Formula = Profit After Tax(PAT)/Equity
This ratio is more meaningful to the equity shareholders who are intere
better it is. The return on equity was 13 in the beginning which was ver
due to recession, this ratio has again fallen down to 12.
 

18) RETURN ON CAPITAL EMPLOYED:

Formula = Profit Before Interest & Tax/Capital Employed
This ratio is the most important for measuring the overall efficiency of
increased to 16 % in the later years and in the latest year, it is 13 %. Th

19) Earnings Per Share – EPS:

Formula = Profit Available to Equity Shareholders/Number of Sh
The portion of a company's profit allocated to each outstanding share o
generally considered to be the single most important variable in determ
has been very good in creating wealth. The EPS was 29 in the beginnin
previous years. . But due to recession, this has again fallen down to 97

20) Price Earnings Ratio:
Formula = Market price/EPS

This indicates the expectation of equity investors about the earnings of
company's current share price compared to its per-share earnings. It's u
market in general or against the company's own historical P/E.The P/E R
is comfortable than the previous years. . But due to recession, this ratio
 
 

21) Price to Book Ratio:

Formula = Market Value/Book Value
A ratio used to compare a stock's market value to its book value. It is c
this value represents higher expectation of the shareholders. A lower P
wrong with the company. As with most ratios, be aware that this varies
company went bankrupt immediately. Price to Book ratio has been arou

ance Industries Limited

TIOS

y of the current asset to meet it’s current liabilities. Higher the ratio, better the coverag
han 1.5. Though it is below the generally accepted level, it is good enough to meet it’s l

ch excludes from current assets things that cannot be converted into cash in short perio
s no need to panic.

urrent liabilities are covered by the most liquid assets. Its value was very less in the ear

ash is realized from receivables. It affects the liquidity position of the company. The valu
hich is excellent.

ealize cash from receivables. It is a better representation of DTR. This value was 22 days
mpany is realizing its debts earlier than before now.

business pays cash to its creditors. It affects the liquidity position of the company. The v
tio to 0.08 which is excellent. This means company is paying very late to its creditors.

business pays cash to its creditors. It affects the liquidity position of the company. The v
tio to 0.08 which is excellent. This means company is paying very late to its creditors.

pany pays to its creditors. It is a better representation of CTR. This value was 851 days i
company is paying its creditors later than before now which is a good sign.

sold. A high ratio is good from the view point of liquidity and vice versa. Here, the value

n the number of days. Inventory turnover ratio with debtors turnover represents the tota
t of 52 days in the year 2003-04.

etween net sales and assets. This ratio indicates how well the assets are being utilised.
mber to times the fixed assets are being turned over in a stated period. It measures the
of utilisation of fixed asset and low ratio means improper use of the assets. This ratio ha

Liabilities
p between net sales and working capital. This ratio measures the efficiency of utilisation
mber of times the utilisation of working capital in the process of doing business. The high
er, a very high turnover indicates a sign of over-trading and puts the firm in financial dif
fficiently. The ratio for Reliance has been varying between 3 and 10 and it is currently 7.

mber of times the utilisation of working capital in the process of doing business. The high
er, a very high turnover indicates a sign of over-trading and puts the firm in financial dif
fficiently. The ratio for Reliance has been varying between 3 and 10 and it is currently 7.

fund’s investments in the business. Here the high ratio indicates that the business is ris
company. In case of Reliance, it’s debt-equity ratio is very high. Specially for the initial y
s has never made debt a worry for Reliance.

erest on Long-term Loans
efore interest and tax’ and ‘interest on long-term loans’. This ratio is also termed as ‘De
tisfaction to the lenders of the concern whether the business will be able to earn sufficie
ers the interest. It measures the margin of safety for the lenders. The higher the numbe
Reliance at 4 but now it has increased to 22 and at present this ratio is 11 which is quite

ic conditions such as price competition. The ratio is between 18-20 throughout the year

ars , its value was 10 which was very less but now the company has increased this rati

erms of sales. It is an good ratio which tells how much profit the company is earning fro
has increased this ratio to 14 which is comfortable. But due to recession, this ratio has a

rs who are interested to know profile earned by the company and the profiles that can b

has increased this ratio to 14 which is comfortable. But due to recession, this ratio has a

rs who are interested to know profile earned by the company and the profiles that can b
ng which was very less but over the years, company has increased this ratio to 24 which
.

mployed
rall efficiency of a firm. Higher the ratio, the better it is for the company. It should be com
ear, it is 13 %. This is very good for the firm like Reliance.

s/Number of Shares
standing share of common stock. Earnings per share serves as an indicator of a compan
variable in determining a share's price. It is also a major component used to calculate th
9 in the beginning which was very less but over the years, company has increased this
allen down to 97.

t the earnings of the firm. That is, how many times of the actual earnings are they read
re earnings. It's usually more useful to compare the P/E ratios of one company to other
ical P/E.The P/E Ratio was 10 in the beginning which was very less but over the years, c
cession, this ratio has again fallen down to 14.

ook value. It is calculated by dividing the current closing price of the stock by the latest
olders. A lower P/B ratio could mean that the stock is undervalued. However, it could als
e that this varies  by industry. This ratio also gives some idea of whether you're paying t
tio has been around 1.5 or 2 times, which shows a reasonable amount of expectation by

etter the coverage. Generally 2:1 ratio is generally accepted.
ugh to meet it’s liabilities. So, it is quite satisfactory.

ash in short period, like inventories. It’s value for reliance has

ry less in the earlier years but now its value is 0.70 which is

ompany. The value of this ratio was 16 times in the beginning

alue was 22 days in the beginning and now the company has

e company. The value of this ratio was 0.43 times in the
to its creditors.

e company. The value of this ratio was 0.43 times in the
to its creditors.

e was 851 days in the beginning and now the company has
gn.

a. Here, the value of this ratio has been around 7-9. It is

presents the total accounting cycle. It has always been above

e being utilised.
. It measures the efficiency with which fixed assets are
sets. This ratio has been between 0.7-0.9 which is

ency of utilisation of working capital
usiness. The higher is the ratio, the lower is the investment in
m in financial difficulties. A low working capital turnover ratio
d it is currently 7.

usiness. The higher is the ratio, the lower is the investment in
m in financial difficulties. A low working capital turnover ratio
d it is currently 7.

he business is risky. Whereas a low ratio indicates that the
ly for the initial years, where it is more than 0.6 , it shows the

so termed as ‘Debt Service Ratio’.
e to earn sufficient profits to pay interest on long-term loans.
igher the number, more secure the lender is in respect of
11 which is quite comfortable.

oughout the years. Thus , this ratio is quite comfortable and

creased this ratio to 13 which is comfortable than the

ny is earning from its sales. In the earlier years, its value was
n, this ratio has again fallen

rofiles that can be made available. The higher the ratio, the

n, this ratio has again fallen

rofiles that can be made available. The higher the ratio, the
ratio to 24 which is comfortable than the previous years. . But

y. It should be compared with those of the other firms. It

ator of a company's profitability. Earnings per share is
d to calculate the price-to-earnings valuation ratio. Reliance
s increased this to 134 which is comfortable than the

gs are they ready to pay for the share. A valuation ratio of a
mpany to other companies in the same industry, to the
over the years, company has increased this ratio to 17 which

ock by the latest quarter's book value per share.. Higher of
ever, it could also mean that something is fundamentally
r you're paying too much for what would be left if the
of expectation by the shareholders.

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