JNTU Project Swapna

CHAPTER - I
INTRODUCTION
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FINANCIAL STATEMENT ANALYSIS
Introduction
Financial management as an academic discipline has undergone fundamental
changes as regards to its scope and coverage. In the early years of it was treated
synonymously with the raising of funds. In addition to procurement of funds, efficient
use of resources is universally recognized. Similarly the academic thinking is also
characterized by a change over the years.
Finance is the lifeblood and nerve center of a business, just as circulation of blood
is essential in the human body for maintaining life, finance is a very essential to smooth
running of the business. It has been rightly termed as universal lubricant which keeps the
enterprise dynamic. This because the modern money oriented economy, finance is one of
the basic foundations of all kinds of economic activities. It has rightly said that business
needs money to make more only, when it is properly managed.
Hence, the efficient management of every business enterprise is closely linked

with efficient management of its finances. Finance may be defined as the provision of
money at the time it is waned. However, as a management function it has special
meaning, finance function may be defined as the procurement of funds and their effective
utilization.
Thus, it involves decision relation to these aspects. All these areas are interrelated.
The decision to acquire n asset where as financing and management past effect the
decision of investment. All mixed decisions determine the value o the firm to its
shareholders.
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Importance of Finance:
Finance is regarded as lifeblood of financial enterprise. This is because in the modern money
oriented economy, finance is one of the basic foundations of all kinds of economic activities. It is
the master key, which provides access to all sources for being employed in manufacturing and
merchandising. It has rightly been said that business needs money to make more money.
Meaning of Financial Management:

Financial management means the entire gamut of managerial efforts devoted to the
management of finance with both its sources and uses of enterprise. According to Solomon
“financial management is concerned with efficient use of important economic resources”.
Financial management is concerned with managerial decisions that result in the acquisition
and financing of long term and short term credits of the firm. As such it deals with situations
that require selection of specific liability as well as problem of size and growth of an enterprise.
Thus financial management is mainly concerned with proper management of funds.
Meaning and Concept of Financial Analysis:
The term “Financial Analysis” also known as analysis and interpretation of ‘Financial
Statements’ refers to the process of determining financial strengths and weakness of the firm by
establishing strategic relationship between the items of balance sheet, profit and loss account and
operative data.
According to Myers ‘financial statement analysis is largely a study of relationship among the
various financial factors in a business as disclosed by a single set of statements and the trend of
these factors as shown in the series of statements’.
The purpose of financial analysis is to diagnose the information contained in financial

statements so as to judge the profitability and financial soundness of the firm.
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Definition of Financial Analysis:
Financial analysis is the process of identifying the Financial Strengths and weaknesses of
the firm by properly establishing relationships between the items of financial systems. viz,
Balance sheets. Profit S Loss Account, Financial Analysis can to undertaken by management of
the firm (or) parties outside the firm’s viz. Owners Creditors, Investors and Others.
Nature of Financial Analysis:

'The Nature of analysis will differ depending on the purpose analysis and bankers For
example Trade Creditors and hankers are interested in knowing whether he firm can payback
their debt in time.
Their analysis will, therefore confine to the evaluation of the firm liquidity position. The
suppliers of long term debt. on the other hand are interested in the firms profitability over time,
its ability to generate cash to be able to pay interest and return their claims and relationships
between various sources of funds (Capital structure relationship). Long-term creditors to not
only analyze the historical financial statements to make analysis about the firm’s future solvency
and profitability.
The term financial analysis also known as “analysis and interpretation” of financial
statements refers to the process of determining financial strengths and weaknesses of the firm
by establishing strategic relation between the items of the balance sheet, profit and loss
account.
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Importance of Financial Analysis
To evaluate the financial condition and performance of a firm. The Financial analyst
needs certain yardsticks. The yardstick frequently used is a ratio, or index, releasing two pieces
of financial data to each other. Analysis and interpretation of various ratios should give
experienced, skilled analysts a better understanding of the financial condition and performance
of the firm than they would obtain from analysis of the financial data alone.
Financial Statements mainly concern with the management's interest on future of the
organization. It is mainly concerned with Planning & Controlling, preparation of various
budgets such as Sales Budget Cash Budge), Capital expenditure budget etc.. Controlling is the
function of seeing that the program lard down in various budgets are being actually achieve that
actual performance compared with the Budgeted Performance enabling the management to
exercise control in case of weak performance In fact, development in the field of Cost
Accountancy is so quick and fields covered by it.
Investors in a company's common stock are concerned principally with present and
expected future earnings and the stability of this earnings about a Trend, as well as they
covariance with the earnings of other companies. As a result, investors might concentrate their
analysis on the Profitability of firm. They would be concerned with its financial condition.
In so far as its affects the ability of the Company to pay the Dividend and to avoid
bankrupt. In order to bargain more effectively for outside funds, the management of a firm
should be interested in all aspects of financial analysis that outside suppliers of capital
use in evaluating the from Management also employs Financial Analysis for the purpose
of internal control.
In particular, it is concerned with the profitability on investment in the various assets of

the company and in the firm issues various government regulators may use Financial Analysis.
In particular, regulatory agencies concerned with the Rate of Return of a Company earns on its
Assets, as well as with the proportion of non-equity funds employed in the business Thus, this
type of financial undertaking varies according to the specific interest of the analysts Financial
statement analysis is a part of larger information processing system of which informed decisions
can be base.
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Types of Financial Analysis:
We can classify various types of financial analysis into different categories depending upon
1. The material used and
2. The method of operation followed in the analysis of the modus operandi

of analysis
On the basis of material used:
Access to material used, financial analysis is two types
 External analysis
 Internal analysis
On the basis of Modus operandi:
According to the method of operation followed in analysis, financial analysis can be done in
two forms
Vertical analysis
Horizontal analysis
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Vertical Analysis:
It is analysis of relationship between different individual components and in the analysis
between these components and their totals for d given period of time. Such analysis examines
only the relationship as between different components for a given point of time and does not
shed light on changing the behavior of the above relationships.
It is also regarded as Static Analysis, comparison of current assets to current liabilities

(or) Comparison of debt to equity for one point of time of time (or) concrete examples of
vertical analysis.
Horizontal Analysis
It is the analysis of change in different components of the financial statements over the
different periods with the help of a series of statements. Such an analysis makes it possible to
study periodic fluctuations in different components of the financial statements.
Use of Financial Tools:
Financial tools are of immense use to a Finance Manager in as such as they help him in
carrying out his planning and controlling functions while preparing financial plan for the
company finance manager must know the impact of financial decisions on financial condition
and profitability of the business enterprise.
The Tool of financial analysis serve as handmade to the management in determining the
impact of his decisions. These tools are equally useful in thy sphere of financial control and as
much as they enable? The Finance Manager to undertake constant review of the actual financial
operations of the company. As a whole and of various divisions of the company against the pro-
forma balance sheet and profit and loss account and to analyze the cause of major deviations as
to take corrective action before ft is tool. Thus with the help of financial tools the Financial
Manager can rationalize the decisions and reach the business goal easily. The utility of the
financial tools is not limited to the Finance Manager They are equally helpful to top
management creditors, investors and laborers.
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Methods or Devices of Financial Analysis:
The analysis and interpretation of financial statements is used to determine the financial
position and results of operations as well. A number of methods or devices are used to study the
relationship between different statements. The following methods of analysis are generally used.
1. Comparative Financial Statements:
Comparative Financial Statements are an important method of financial analysis. The
changes in financial date over a period of time can be measured if the statements are placed side
by side in adjustment columns. These statements are called "Comparative Statements". These
statements can prepared for both types of financial statements namely comparative balance sheet
and comparative income statement.
a) Comparative Balance Sheet:
A Comparative Balance Sheet shows the assets, liabilities and owner’s equity of business
for two or more dates with increase or decrease in the absolute data in terms of rupees and
percentages. The changes contained in the statement are very significant as they indicate the
direction to which the financial characteristics are developing.
b) Comparative Income Statement:
The comparative income statements show the net profit or net loss for a specific period.
The statement shows the operating results of the firm for two or more years. The change in the
data will be represented in terms of rupees and percentages. The analysis of change in financial
statements will give the management a considerable insight into the levels and areas of strength
or weakness.
2. Common-Size Financial Statements:
In common-size financial statement analysis, the items in the balance sheet are stated as
percentages of total assets and the items of in the Income Statement are expressed as percentages
of total sales. These statements are called common-size financial statements. Since all items in
the balance sheet and items in the income statements are converted to hundred percentages, these
statements are also called as hundred percentages financial statement analysis formed the key
factor for this analysis. The common-size balance sheet and common-size income statement.
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A) Common-size Balance Sheet:
This statement expresses the relationship of cash asset to total assets and cash liability to
total abilities and capital for this purpose the common balance sheet is converted to common-size
balance sheet by dividing each item of balance sheet by total assets and arriving at a percentage
figure. The comparison of those percentage figures over a period of time will be useful to the
management to identify the areas of strengths and weaknesses.
B) Common-size Income Statement:

For the analysis purpose, the items of common profit and loss account are converted to
common-size income statement by dividing each item of the account by total sales. This
comparison reveals some changes in the figures of profit and loss account.
9
CHAPTER - II
COMPANY PROFILE
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COMPANY PROFILE
Indian Oil Corporation Limited:
Indian Oil Corporation Ltd. (Indian Oil) is the largest commercial enterprise in India, and the
only Indian presence in the Fortune magazine’s “global 500” listing of the world’s largest
corporations, with a ranking of 226 for fiscal 2001. In the ‘Forbes International 500’ list of the
largest companies outside US, Indian Oil is ranked 112 and tops the four Indian companies in the
listing. In addition to being the largest national oil company in the Asia Pacific region, Indian Oil
has also been ranked ‘First’ in Petroleum Trading among the 15 national oil companies in the
region in the 2001 Industry Perception Survey conducted by Applied Trading Systems,
Singapore. Indian Refineries Ltd. And Indian Oil Company Ltd., were set up in 1958 and 1959
respectively, to build national competence in the oil refining and marketing business. On 1st
September 1964, these two companies were merged to form Indian Oil Corporation Ltd. Indian
Oil owns and operates seven of the country’s 18 refineries, at Digboi, Panipat, with a combined
capacity of 38.15 million metric tons per annum (MMTPA). A new MMTPA grassroots refinery
is being set up at Paradip in Orissa. In addition, Indian Oil has two subsidiary companies,
Chennai Petroleum Corporation Ltd. And Bongaigaon Refinery and Petrochemicals Ltd., with a
combined refining capacity of 9.35 MMTPA, thereby raising its total refining capacity to 47.50
MMTPA, the highest in the country today. Indian Oil has the country’s largest network to crude
and product pipelines, with a combined length of 6,523 km and a capacity of 43.45 MMTPA.
With sales of 47.17 million metric tons in 2001-02, Indian Oil holds over 53% of the petroleum
products market share in India.
Its extensive network of over 22,000 sales points is backed for supplies by 182 bulk storage
points and 78 Indane bottling plants. 92 Aviation Fuel Stations cater to the Aviation Industry,
defense as well as civil.
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IBP Co. Limited, a stand-alone marketing company and a subsidiary of Indian Oil, has a
nationwide network of over 1,550 retail outlets.
Indian Oil’s Research and Development Centre has been engaged in world-class research in
tribology (lubricants formulation), refinery processes and pipeline transportation. The Centre has
developed over 2000 lubricant and grease formulations, and obtained approvals of original
equipment manufacturers in India and abroad.
A wholly owned subsidiary, Indian Oil blending Ltd., manufactures over 450 grades of the
country is leading our brand of lubricants and greases. In pursuit of its Vision of becoming a
major, diversified, transnational, integrated energy company, with national leadership and a
strong environment conscience, playing a national role in oil security and public distribution.
Indian Oil is proactively identifying and developing business opportunities in Exploration &
Production (E&P), Gas and Gas-to-Liquid, Petrochemicals, Power, Information Technology &
Communications, Collaborative R&D, Exports, Shipping, Training & Consultancy, Engineering
& Construction, and Transnational Operations. Twelve joint Ventures are now operational in
partnership with some of the leading international and Indian companies;

 Avi-Oil (India) Pvt. Ltd. With NYCOSA, France, and Balmer Lawrie & Co. for
manufacturing and marketing Defense and civil aviation lubricants and specialties.
 The cover depicts a bird, symbolizing Indian Oil, breaking through barriers to seek new
horizons.
 It is a quest marked by immense possibilities a quest for progress through pursuit of new
opportunities.
 The colour blue signifies the vast expanse of a new world, and is a tangible expression of
widening horizons.
 Indian Oil tanking Ltd., with Oil tanking (India) GmbH, Germany, for infrastructure
development and terminal ling services.
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 Petro net India Ltd. (PIL), a consortium of oil companies and financial institutions, for
petroleum product pipeline projects.
 Petro net Vadinar-Kandla Ltd., as a subsidiary of PIL, for Vadinar-Kandla product
pipeline.
 Petro net Chennai-Trichy-Madurai Ltd., also as a subsidiary of PIL, for Chennai-Trichy-
Madurai product pipeline.
Indian Oil is marketing diesel fuel additives for automobiles in collaboration with Elf Antar,
France.
Indian Oil Air BP are collaborating in aviation fueling business.
Indian Oil’s investments in creation of assets will exceed Rs. 40,000/- Crore over the decade
beginning 1997. These investments, substantially funded from internal resources, will result in
expansion and modernization of existing capacities, as well as creation of state-of-the-art
facilities.
Indian Oil is an “academy” company with 18training centers. The Indian Oil Institute of
Petroleum Management (IIPM), Gurgaon, serves as an apex training and consultancy institute
and conducts management development programmers in association with reputed national and
international institutes.
Indian Oil Management Centre for Learning (IMCL) recently set up in Mumbai will facilitate in
upgrading the functional knowledge and skills of the employees and also impart behavioral
training.
For the past two decades, Indian Oil has been lending its expertise to several countries in areas of
refining, marketing, transportation, training and R&D. These include Sri Lanka, Kuwait,
Bahrain, Iraq, Abu Dhabi, Tanzania, Ethiopias, Algeria, Nigeria, Nepal, Bhutan, Maldives,
Malaysia and Zambia.
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Indian Oil’s commitment to quality, safety, health and environment is reflected in the series of
national and international certifications and awards earned over the years.
The 17th largest petroleum company in the world, Indian Oil, is now emerging as a transnational
energy conglomerate. From the icy slopes of Leah in the Himalayas to Kanyakumari where the
Bays of Bengal and the Arabian Sea join the Indian Ocean, and from the Single Buoy Mooring at
Salaya in the West to the Monasteries at Tawang in the East, Indian Oil lives in every heart and
ineverypartofIndia.
Global Ranking
Indian Oil Corporation maintained its position as the sole Indian presence in the Fortune ‘Global
500’ listing of the world’s largest corporations for the eighth year in succession. In the latest
ranking released by the Fortune magazine for the year 2001, Indian Oil Corporation is ranked
226 against the ranking of 209 last year. The lower ranking is mainly due to the diminished value
of Rupee as compared to the US $ by 5.65% for the period under review. As per the Fortune
listing, amongst the 269 largest petroleum-refining companies in the world, Indian Oil is ranked
17, a step above last year’s position of 18.
In the list of “Forbes International 500 Companies’ outside the US, Indian Oil retains its last year
ranking of 112, and tops the list among the four Indian corporate appearing in the listing.
In addition to the Fortune and Forbes rankings, Indian Oil Corporation has been ranked ‘First’ in
Petroleum Trading among the 15 National Oil Companies in the Asia Pacific Region in the 2001
Industry Perception Survey conducted by Applied Trading Systems, Singapore.
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Financial Review
Turnover
The turnover of Indian Oil Corporation for the year ended 31.03.2002 was Rs. 114,864 Crore as
compared to Rs. 117,371 Crore in the previous year. The reduction in turnover is mainly on
account of reduced sale of crude and product to other Oil Marketing Companies.
Further, the inland sales volume reduced by 0.63 million metric tons, from 47.80 million metric
tons in 2000-01 to 47.17 million metric tons during 2001-02, registering a decline of 1.32%. The
reduction in sales is mainly due to lower off-take of HSD, SKO and Naptha consequent to slow
down of economy.
Profit before Tax
The Corporation recorded the highest ever Profit Before Tax of Rs. 4,599 Crore during the
current year as against Rs. 2,962 Crore in 2000-01, registering a growth of 55%. The increase in
Profit before Tax is mainly on account of settlement of Pool claims pertaining to previous year.
Provision for Taxation

a) Current Tax
An amount of Rs. 977 Crore has been provided towards Current Tax considering the applicable
Income Tax rates, as against Rs. 242 Crore provided during 2000-01. The effective tax rate for
the current financial year works out to 21.68% as against 8.18% in 2000-01. The increase in
effective tax rate is due to provision of tax during the current year at normal rates of tax due to
higher profits as compared to provision at MAT (Minimum Alternative Tax) rate in the previous
year.
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b) Deferred Tax
In compliance of Accounting Standard-22 on “Accounting for Taxes on Income” issued by The

Institute of Chartered Accountants of India, the Corporation has
(i) Provided accumulated Deferred Tax Liability as on 01.04.2001 amounting to Rs. 2,688 Crore
with a corresponding charge to General Reserve having no impact on current year profits.
(ii) Provided Deferred Tax Liability for financial year ended 31.03.2002 amounting to Rs. 717
Crore and accordingly Profit has been reduced by the same amount.
Profit after Tax
Profit after Tax has improved from Rs. 2,720 Crore in 2000-01 to Rs. 2,885 Crore during current
financial year, registering a growth of 6%.
Depreciation
Consequent to increased capitalization of fixed assets, deprecation for the year 2001-02 was Rs.
1,392 Crore as against Rs. 1,224 Crore for the year 2001-02.
Interest (Net)
Interest Expenditure (net) decreased from Rs. 1,174 Crore during 2000-01 to Rs. 882 Crore for
the current year. The decrease is mainly due to reduction in short term loans and decrease in
overall cost of borrowings.
Borrowings
The borrowings of the Indian Oil Corporation have also reduced from Rs. 20,636 Crore as on
31.03.2001 to Rs. 19,070 Crore as on 31.03.2002. The Total Debt to Equity ratio as on
31.03.2002 works out to 1.25:1 as against 1.29:1 as on 31.03.2001 and long Term Debt to Equity
ratio stands at 0048:1 as on 31.03.2002 as against.0.40:1 as on 31.03.2001.
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Export Earning
During the year, Indian Oil Corporation earned Rs. 2,078 Crore through experts as against Rs.
2,206 Crore in 2000-01. The exports include exports of R lubricants to Nepal, Sri Lanka,
Indonesia, Bangladesh, Bahrain and Mauritius, and sale of ATF to international airlines.
Pipelines
Indian Oil Corporation owns and operates the largest network of crude and product pipelines in
the country with a total length of 6,523 km and overall capacity 43.45 MMT. The pipeline
network transported 40.36 MMT of crude and petroleum products during 2001-02 against the
previous year’s throughput of 39.44 MMT.
Marketing
During the year, Indian Oil’s Marketing Division performed well in all key areas despite
increased competition and unpredictable market conditions. New initiatives in the form of
products and services were taken to achieve ‘Customer Delight’.
Sales
During 2001-02, Indian Oil Corporation sold 47.17 MMT of petroleum products as compared to
47.80 MMT in the previous year. The actual demand for petroleum products in the country
during the year was much below the projections. This had an adverse impact on Indian Oil
Corporation’s sales. Despite the sluggish demand and severe competitions, IOCL increased its
market share in products like MS (Retail) and HSD (Retail). Indian Oil Corporation
commissioned 350 Retail Outlets and 19 SKO / LDO Dealerships during the year, raising their
total number to 7,870 and 3,455 respectively. This includes 80 jubilee Retail Outlets.
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Customer Service
In Indian Oil Corporation’s pursuit to provide better services, IVSR based complaint tracking
and redressal system for customers was launched in 33 Indane Area Offices. Further, in order to
provide value added services to monitoring public, Indian Oil Corporation, in association with
State Bank of India, launched the SBI-Indian Oil Co-branded pre-paid card called “Smart Gold”
for customers to avail of products and services at Indian Oil retail outlets. Indian Oil Corporation
introduced 35 ATMs at retail outlets during the year in various parts of the country, thereby
bringing the total number of ATM’s installed to 57. The Indian Oil-Citibank co-branded credit
card has reached a membership of 1.48 lakh as on 31.03.2002.
Indian Oil Corporation, in association with Chennai based Sundaram Finance ltd., also launched
“Power Plus Fleet Card” for transport fleet operators.
Indane Cooking Gas
During the year, Indian Oil Corporation enrolled 26 lakh Indane customers, and the cumulative
Indane consumer population reached 322 lakh.
The number of Indane distributorships commissioned during the year was 457 raising the total
number of distributors to 3,881. During the year, seven new Indane Bottling Plants were
commissioned, thus raising the total number of Indane Bottling Plants to 78 and the total bottling
capacity to 32.21 metric tons per annum.
Aviation
Indian Oil Corporation continued to be market leader in Aviation Fuel supply business with a
market share of 67.9%. The entire Aviation Fuel requirements of Indian Navy and Indian Army,
and over 87% requirement of Indian Air Force was met by IOCL. The major requirements of
other market segments like Indian Airlines were catered to by Indian Oil Corporation. IOCL
commissioned a state-of-the-art Hydrant Refueling System at Netaji Subhas Chandra Bose
Airport in Kolkata during the year for use of Industry. As part of customer service initiatives
Indian Oil Corporation has developed a user-friendly Indian Oil Aviation web page on Internet,
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providing information on ruling prices, service network, aviation highlights, and information on
products available location-wise.
Indian Oil Corporation organized the 11th International Aviation Conference at Hyderabad,
which was attended by representative of major international airlines, IATA, aviation equipment
manufactures and Government
Lubricants
Indian Oil Corporation produced 3.96 lakh metric tons of lubes and 0.13 lakh tone of grease
during the year. In spite of depressed market conditions, Indian Oil Corporation improved its
market share in finished lubricants. 36 R bazaar-on-wheels were added to penetrate the bazaar
trade. 24 R stockiest (auto) and 11 R stockiest (industrial) were commissioned during the year to
give a thrust to lubricant sales. During the year, R lubricants were launched in Bangladesh and
Sri Lanka.
Specialties
Indian Oil Corporation introduced four new products, viz., Needle Coke (Guwahati Refinery),
Microcrystalline Wax (Haldia Refinery), and Polymer Grade Hexane and Butene-2 (Gujarat
Refinery) in the market as import substitutes.
Shipping
149 product import tankers, 11 product tankers and 444 crude import tankers were handled
during the year.
Quality Assurance
IOCL consistently accorded top priority on Quality Assurance for its products and services.
Indian Oil continues to be the market leader for testing petroleum’s products by providing the
largest network of testing facilities. More than 2 lakh samples were tested in its 37 laboratories
located across the country. During the year, a mobile laboratory was added at Patna, taking the
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number of mobile laboratories to 23. Laboratory Information Management System was
successfully commissioned in a few Indian Oil laboratories with the Laboratory Documentation
and Management System software developed by the Quality Control Department of Marketing
Division.
International Trade
Indian Oil Corporation arranged import of crude oil, petroleum products and lubricants for
meeting the country’s requirements through a carefully selected diversified mix of supply
sources and also exported petroleum products during 2001-02 as detailed hereunder:

Quantity(MMT) Value (Rs. Crore)

Imports
Crude Oil - 47.98 38,910.15
Petroleum Products, including for
2,506.80
Nepal Oil Corporation 2.28
Lube Base Oils / Lubricants / Additives 0.02 51.30
Exports
Petroleum Products 0.21 203.41
Lubricants 1,382 MT 4.28
Bitumen 2,574 MT 2.09

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CHAPTER - III
RESEARCH METHODOLOGY
Research & Development
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During 2001-02, Indian Oil Corporation’s R&D Centre focused on commercializations of
already developed technologies, development of innovative and cost-effective technologies with
reduced gestation period, and specialized technical services to operating divisions of the
Corporation. During 2001-02, Indian Oil’s R&D Centre developed 80 formulations, which
include 42 new product formulations: 32 product formulations got approval from various
national and international original equipment manufacturers and 14 products got American
Petroleum Institute (API) certification while field trials on 12 new products were conducted.
Intellectual Property Rights activities of the R&D Centre led to grant of 19 patents, including 10
Indian, seven US, One Canadian and one European. 11 new patents were field, which include
four in India, three in US and one each in Europe, China and Brazil.
The efforts of the R&D Centre in proprietary additive development resulted in the synthesis of
an EP Additive and Friction Modifier and its production on commercial scale at Taloja Additive
Complex in Maharashtra. The Oilivorous-S Technology developed jointly with Tata Energy
Research Institute for safe disposal of oil sludge has been put on field trial at Barauni and
Mathura refineries.
A multi-functional additive for MS was developed for improving the quality of fuel. Another
breakthrough was the development of a process to improve deodorization and dry point of MTO
at Panipat Refinery. As further advancement in Bitumen technology, a high performance binder
known as Crumb Rubber Modified Bitumen was developed and commercialized.
In refining technology, technologies developed earlier have moved up on the commercialization

process chain during the year. These include INDALIN Process for conversion of olefinic
petroleum fractions into LPG and aromatics, LOTUS-24, which is under field trial at Mathura
Refinery, and IMAX Additive for maximization of LPG yield, plant trial for which has been
completed at Gujarat Refinery. Other breakthroughs include development of LPG-MAX, a new
process for LPG maximization and continuous film contractor based process for removal of
Mercaptan from LPG.
The Instrumented Pig developed jointly by R&D Centre and Bhaba Atomic Research Centre,
Mumbai, has completed field trials and is ready for commercialization.
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Information Systems
Indian Oil Corporation aims at maintaining its leadership in the Indian hydrocarbon industry by
assimilation of emerging Information Technology and web-enabled business solutions for
integrating and optimizing the Corporation’s hydrocarbon supply chain. Indian Oil Corporation
is focusing on total customer delight through value-added IT solutions, with emphasis on
centralized control and decentralized response.
Project Manthan
As part of the on-going ERP (Enterprise Resource Planning) implementation across the
corporation under Project Manthan, 12 units have gone live on the latest, state-of-the-art SAP r/3
software system on New Year Day (01.01.2002) and three more on 01.07.2002, without any
disruption in operations at any of the units. Earlier, Indian Oil Corporation’s R&D Centre at
Faridabad became the maiden unit to Golive on SAP in August 2001, followed by Indian Oil
Institute of Petroleum Management (IIPM) at Gurgaon in October 2001.
The laboratory Information Management System package was also implemented at Panipat
Refinery in March 2001 and at R&D Centre in August 2001.
A-30 A-31 Construction of the Data Communication Centre, the electronic and communication
hub of the project, at IIPM campus is in progress. It will not only host SAP Production System
(including Database Servers, Application Servers and Storage Libraries) but also form the
nucleus of a wide Area Network linking all locations of Indian Oil Corporation through an
extensive and robust communication network using V-SATs, leased lines, ISDN / PSTN dial-up
lines, radio / wireless links and the Optical Fibre Cable communication system of Pipelines
Division.
Human Resources
Employee Profile
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The human resources in Indian Oil Corporation was 31,675 strong as on 31.03.2002, of which
9,728 are in the Officers cadre and 21,947 are in the Staff cadre. There are 5,672 employees from
SC category and 2,097 from ST category. The SC and ST employees constitute 24.53% of the
total employees’ strength. There are 2,387 women employees, out of whom 692 are in the
Officers carde and 1,695 in Staff cadre. The women employees constitute 7.54% of total
employees’ strength.
Welfare of Employees
Indian Oil Corporation continued its endeavor to upgrade facilities and promote the welfare of
employees. With a view to promote employees’ welfare, Indian Oil Corporation brought about
improvements in policies concerning medical facilities, allowances at remote locations,
Productivity Incentive Scheme and post-retirement medical facilities.
Welfare of Weaker Sections
Indian Oil Corporation has been diligently following the Presidential Directives and various
instructions / guidelines issued by the Government of India regarding reservation in Services for
SCs / STs/ OBCs/ Physically Handicapped/ Ex-servicemen, etc. Sincere efforts have been made
to recruit reserved category candidates as per the Government’s instructions. It has been the
endeavor of your Corporation to utilise 25% of Community Development Funds towards Special
Component Plan (SCP) and Tribal Sub Plan (TSP) for meeting the needs of weaker sections.
Status on Implementation of Disabilities Act, 1995 before the enactment of the Act, Indian Oil
Corporation had been extending reservation for physically handicapped persons in recruitment to
the posts in Group ‘C’ & ‘D’. With the enactment of the act, w.e.f. 07.02.1996, the reservation
for physically handicapped persons has been extended to the posts in Group ‘A’ & ‘B’ as well.
Indian Oil Corporation has been implementing the provision of 3% reservations for physically
handicapped and disabled persons in letter and spirit. Besides, various concessions and
relaxations are being extended to physically handicapped persons in recruitment. Presidential
Directives regarding Representation of SC’s and ST’s Officials dealing with the subject are
given training as required so as to enable them to update their knowledge on the subject and
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perform their job effectively. Liaison Officers have been appointed at various locations/ units/
installations all over the country to ensure implementation of Government Directives.
In accordance with para-29 of the Draft Presidential Directives, a note about the Corporation’s
activities having direct relevance to advancement of SC / ST category of employees along with
statistics relating to presentation of SCs / STs, in the prescribed proformae – Appendices VII(A)
and VII(B) – is placed as Annexure-2. In accordance with the revised instructions of the
Government of India.
The Indian Oil Foundation
As part of the Corporate Mission ‘to help enrich the quality of life of the community and
preserve ecological balance and heritage…’, Indian Oil Corporation has set up The Indian Oil
Foundation as a non-profit Trust to protect, preserve and promote our national heritage and
culture, in collaboration with the Archaeological Survey of India and the National Culture Fund
of the Ministry of Culture.
The Indian Oil Foundation will adopt at least one heritage site in every State and Union
Territory. Archaeological works will be funded by the Indian Oil Foundation to the
Archaeological Survey of India through the National Culture Fund. Five prestigious sites have
been identified, viz., Qutb Minar, Delhi; Khajuraho, Madhya Pradesh; Hampi, Karnataka;
Kanheri Caves, Maharashtra; and Konarak, Orissa. The Indian Oil Foundation will develop
world-class facilities and conveniences for visitors. Indian Oil Corporation will provide refueling
facilities for travelers and also undertake community development in the neighborhood.
Community Development
As a responsible corporate citizen, Indian Oil Corporation has made substantive contribution
during the year to national causes, social welfare and community development programmes
throughout the country, particularly in the vicinity of its major units ‘to improve the quality of
life of the people.’ Indian Oil Corporation constructed 800 temporary shelters for earthquake
victims at Bachau Gujarat. Besides, IOCL contributed Rs. 23 Lakh during the year to Shri Vedic
Mission Trust, Rajkot towards reconstruction of 100 houses at Kharoda village in Kutch district
25
of Gujarat. The employees of Indian Oil Corporation also contributed Rs. 91 Lakh to the Gujarat
Chief Minister’s Relief Fund for earthquake Victims.
Corporate Communications
Indian Oil Corporation continues to project a positive image to the media, the public and the
stakeholders through various campaigns. During the year a number of press conferences were
organized by IOCL in Delhi, Mumbai, Kolkata and Chennai. The R umbrella campaign on
Television titled ‘Best Friends for Life’ was well received and adjudged the Most Recalled
Advertising Commercial on Television, winning the Indian Express Award for Excellence.
Indian Oil Day was celebrated on 01.09.2001 by the employees of Indian Oil Corporation to
reinforce the resolve of the Indian Oil People to strive for excellence.
Indian Oil Blending Ltd.
The Annual Accounts and Directors’ Report of Indian Oil Blending Ltd. (IOBL), a wholly
owned subsidiary of the Corporation, are annexed.
IOBL earned a Net Profit of Rs. 6.86 Crore and declared a Dividend of 30% for the year 2001-
02. The production for the year 2001-02 was 226 TMT, attaining a capacity utilization of 95%.
Chennai Petroleum Corpn. Ltd.
The annual Accounts and Directors’ Report of Chennai Petroleum Corporation Ltd. (CPCL), a
subsidiary of the Corporation, are annexed. CPCL earned a Net Profit of Rs. 63.71 Crore on a
Turnover of Rs. 6,175 Crore and declared a Dividend of 20% for the year 2001-02.
Bongaigaon Refinery & Petrochem
26
The Annual Accounts and Inrectors’ Report of Bongaigaon Refinery & Petrochemicals Ltd.
(BRPL), a subsidiary of the Corporation, are annexed. BRPL incurred a loss of Rs. 198.61 Crore
on a Turnover of Rs. 1,195 Crore during the year 2001-02.
Interpretation is a process of drawing references and stating what the figure in the
Financial Statements really means. Interpretation is dependent on interpreter himself. Interpreter
must have experience, understanding and intelligence to draw correct conclusions from the
analyzed data.
Importance of Financial Analysis
To evaluate the financial condition and performance of a firm. The Financial analyst needs
certain yardsticks. The yardstick frequently used is a ratio, or index, releasing two pieces of
financial data to each other. Analysis and interpretation of various ratios should give experienced
skilled analysts a better understanding of the financial condition and performance of the firm
than they would obtain from analysis of the financial data alone.
Financial statements mainly concern with the management’s interest on future of the
organization. It is mainly concerned with Planning & Controlling, preparation of various budgets
such as Sales Budget Cash Budget, Capital expenditure budget etc.. Controlling is the function of
seeing that the program lard down in various budgets are being actually achieve that accrual
performance compared with the Budgeted Performance enabling the management to exercise
control in case of weak performance in fact, development in the field of Cost Accountancy is so
quick and fields covered by it..
Investors in a company’s common stock are concerned principally with present and
expected future earnings and the stability of this earnings about a Trend, as well as they
covariance with the earnings of other companies. As a result, investors might concentrate their
analysis on the Profitability of firm. They would be concerned with its financial condition.
In so far as its affects the ability of the Company to pay the Dividend and to avoid
bankrupt. In order to bargain more effectively for outside funds, the management of a firm
should be interested in all aspects of financial analysis that outside suppliers of capital use in
27
evaluating the from Management also employs Financial Analysis for the purpose of internal
control.
In particular, it is concerned with the profitability on investment in the various assets of

the company and in the firm issues various government regulators may use Financial Analysis.
In particular, regulatory agencies concerned with the Rate of a Company earns on its Assets, as
well as with the proportion of non-equity funds employed in the business Thus, this type of
financial undertaking varies according to the specific interest of the analysis Financial statement
analysis is a part of large information processing system of with information decisions can be
based.
Financial statements are prepared primarily for decision-making. They play a dominant
role in setting the framework of managerial decisions. But the information provided in the
financial statements is not an end itself as no meaningful conclusions can be drawn from the
statements alone. However, the information provided in the financial statement is immense use
in making decisions through analysis and interpretation of financial statements. Financial
analysis is ‘The process of identifying the financial strengths and weakness of the firm by
properly establishing relationship between the items of the balance sheet and the profit and loss
account’.
There are various methods or techniques used in analyzing financial statements, such as
comparative statements, trend analysis, common-size statements, schedule of changes in working
capital, funds flow and cash flow analysis, cost-volume-profit analysis and ratio analysis.
Method of Procedure of Financial Analysis:
The analysis and interpretation of financial statement is used to determine the financial
position and results of operations as well. A number of methods or devices are used to study the
relationship between different statements. The following methods of analysis are generally used:
1. Comparative Statements
2. Common Size Statements
3. Ratio Analysis
28
4. Trend Analysis
Comparative Statements
The comparative financial statements are statements of the financial position at different
point of time. The elements of financial position are shown in a comparative form, so as to give
an idea of financial position at two or more periods. Any statements prepared in a comparative
form will be covered in comparative statements.
The financial data will be comparative only when some accounting principles are used in
preparing these statements. In case of any deviation the use of accounting principle, this fact
must be mentioned at the footnote of financial statements and analysis should be careful in using
these statements. The two comparative statements are balance sheet and income statement.
Common Size Statements
Common Size statement is financial tool of study in changes and trends in financial position
of a company. In common size statement each item is stated as a percentage of the total of which
the item is a path. Such as each item on the balance sheet as a percentage of total Assets or
Liabilities.
Research and Methodology:
Methodology is a systematic procedure of collecting information in order to analysis and

verifies a phenomenon. Research refers to the systematic method consisting of enunciating the
problem, formulating a hypothesis, collecting the facts or data, analyzing the facts and reaching
certain conclusions either in the form of solution towards the concerned problem or in certain
generalizations for some theoretical formulation
Objectives of the Study:

1) To examine the overall financial position of company during the study period.
29
2) To analysis and study the capital structure in order to determine the long term
position of company.
3) To evaluate the financial position of the company.
4) To evaluate the current achievement by comparing actual achievement with
expected achievement.
5) To assess the company’s profitability, utilization, liquidity, financing etc.
Scope of the Study:
 The scope of the study is limited to the quantitative data/information which is monetary
in nature.
 The Scope is limited to the available past or Historical information of financial
statements.
 The scope of the study is limited to the period of 45 days.
Limitations of the Study:

The limitations of the study are as follows.
 This study has been limited to five years.
 Price level changes are not taken into account in the financial statements over the year
 The overall judgment about the firm’s financial position cannot be viewed only
From the analysis besides that, the other techniques like cash analysis, funds flow
Analysis would also reflect financial position.
 As it is not the researcher direct observation but secondary sources as information
provided by the company.
 The analysis and interpretation of these statements from the following limitations.
Collection of Data
30
The task of data collection begins after a research problem has been defined and research
design/plan chalked out. While deciding about the method of data collection to be used for the
study, the researcher should keep in mind.
Data is divided into two types;
1) Primary data
2) Secondary data
Primary Data:
The primary data are those which are collected afresh and for the first time, and thus happen
to be original in character.
Primary data is collected from plant manager and Indian Oil staff.
 Members are generally chosen on the basis of their expertise in the topic on which
information is sought.
Secondary Data:
Secondary data is collected from Annual report of the company
There are several sources of secondary data, including books and periodicals, government
publications of economic indicatorsetc. Case studies and other archival records sources of
secondary data provide a lot of information for research and problem solving.
31
CHAPTER - IV
DATA ANALYSIS
&
INTERPRETATION
COMPARATIVE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

31ST MARCH 2014 TO 31ST MARCH 2015 (In Lakh)
32
PARTICULARS 31st March, 31st March, Change Change in
2014 2015 per cent
ASSET
(I) CURRENT ASSETS
a. Inventories 533.47 453.08 -80.39 -15.069
b. Sundry Debtors 392.61 330.89 -61.72 -15.720
c. Cash and Bank Balances 533.49 1399.46 865.97 162.32
d. Other Current Assets
e. Loans and Advances 356.59 325.45 -31.14 -8.733
Total C.A (A) 1816.16 2508.88 692.72 38.142
(II) FIXED ASSETS
a. Net Block of Assets 3975.69 3655.69 -320.00 -8.049
b. Capital WIP - - - -
c. Investments - - - -
Total F.A. (B) 3975.69 3655.69 -320.00 -8.049
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss 2043.83 1297.1 -746.73 -36.536
Differed Tax Assets 75.33 75.33
Total Miscellaneous Expenditure 2043.83 2047.43 3.60 0.176
(C)
Total Assets(A+B+C) 7835.68 8212.00 376.32 4.803
LIABILITIES
I. Share Holder’s Fund
a. Capital 6509.75 6509.75 - -
b. Reserves & Surplus 15 15 - -
Total Share Holder’s Fund (D) 6524.75 6524.75 - -
LONG TERM LIABILITIES
Loan Funds
a. Secured Loans 90.91 39.57 -51.34 -56.473
b. Unsecured Loans 414.5 350 -64.50 -15.561
Total Long Term Liabilities (E) 505.41 389.57 -115.84 -22.920
Current Liabilities & Provisions
a. Liabilities 271.59 297.53 25.94 9.551
b. Provisions 533.93 495.46 -38.47 -7.205
c. Differed Tax Liability 504.69 504.69
Total C.L (F) 805.52 1297.68 492.16 61.098
Total Liabilities (D+E+F) 7835.68 8212.00 376.32 4.803
Source: Indian oil company
33
Interpretation
1. The fixed assets have decreased by 8.049% due to resale of fixed assets.
2. The Current assets have decreased by 38.142% due to decrease to in cash in hand and
debtors.
3. Secured loans have increased by 8.733% due to loans taken from banks and other
companies.
4. The unsecured loans have increased by 15.561% due to others financial institutions.
5. The total miscellaneous expenditure have increased by 0.176% due to miscellaneous

expenditure.
6. Current liabilities and provisions increased by total liabilities by 4.803 due to long term
liabilities.


2015 2016 per cent
ASSET
(I) CURRENT ASSETS
a. Inventories 453.08 367.11 -85.97 -18.975
b. Sundry Debtors 330.89 137.23 -193.66 -58.527
d. Other Current Assets - - - -
e. Loans and Advances 325.45 305.52 -19.93 -6.124
Total C.A (A) 2508.88 4001.80 1492.92 59.505
(II) FIXED ASSETS
b. Capital WIP - - - -
Total F.A. (B) 3655.69 3420.04 -235.65 -6446
34
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss 1297.10 424.20 -872.90 -67.296
Differed Tax Assets 750.33 -750.33 -100.00
Total Miscellaneous Expenditure 2047.43 424.20 -1623.23 -79.281
(C)
Total Assets(A+B+C) 8212.00 7846.04 -365.96 -4.456
LIABILITIES
a. Capital 6509.75 6509.75 - -
Total Share Holder’s Fund (D) 6524.75 6527.75 - -
Loan Funds
a. Secured Loans 39.57 - -39.57 -100.00
b. Unsecured Loans 350 - -350.00 -100.00
Total Long Term Liabilities (E) 389.57 -389.57 -100.00
a. Liabilities 297.53 267.22 -30.31 -10.187
b. Provisions 495.46 709.85 214.39 43.271
c. Differed Tax Liability 504.69 344.22 -160.47
Total C.L (F) 1297.68 1321.29 23.61 1.819
Total Liabilities (D+E+F) 8212.00 7846.04 -365.96 -4.456
Source: Indian Oil Company
INTERPRETATION
1) The fixed assets have decreased by 6.446% due to repurchase of fixed assets.
2) The current assets have increased by 59.505% due to increase in cash in hand and
debtors.
3) The unsecured loans have decreased by 100.00% due to other financial institutions.
4) Miscellaneous expenditure have increased by profit & loss increased by 67.296% due to
in total assets.
5) Miscellaneous expenditure have differed tax assets increased by -100.00% due to in total
assets.
6) Current liabilities and provisions liabilities have increased by total liabilities -4.456%
financial institutions.
35

2016 2017 per cent
ASSET
(I) CURRENT ASSETS
a. Inventories 367.11 532.84 165.73 45.145
b. Sundry Debtors 137.23 387.17 249.94 182.132
e. Loans and Advances 305.52 371.36 65.84 21.550
Total C.A (A) 4001.80 5907.15 1905.35 47.612
(II) FIXED ASSETS
b. Capital WIP - 7.35 7.35 -
Total F.A. (B) 3420.04 2058.43 -1361.61 -39.813
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss 424.20 234.40 -189.80 -44.743
Differed Tax Assets - - - -
(C)
Total Assets(A+B+C) 7846.04 8199.98 353.94 4.511
LIABILITIES
a. Capital 6509.75 6509.75 - -
Total Share Holder’s Fund (D) 6524.75 6524.75
Loan Funds
a. Secured Loans - - - -
b. Unsecured Loans - - - -
Total Long Term Liabilities (E)
36
a. Liabilities 267.22 279.29 12.07 4.517
b. Provisions 709.85 557.06 -152.79 -21.524
c. Differed Tax Liability 344.22 838.88 494.66
Total C.L (F) 1321.29 1675.23 353.94 26.787
INTERPRETATION
1) The fixed assets have decrease by 39.81% due to repurchase of fixed assets.
2) The current assets have increased by 47.61% due to other financial institutions.
3) There no long-term liabilities.
4) Miscellaneous expenditures have increased by 44.73% of the total assets.
5) Current liabilities and provisions total liabilities increased by 4.511% of the total
financial institutions.


2017 2018 per cent
ASSET
(I) CURRENT ASSETS
a. Inventories 532.84 534.65 1.81 0.340
b. Sundry Debtors 387.17 386.24 -0.93 -0.240
37
Total C.A (A) 5907.15 6092.56 185.41 3.139
(II) FIXED ASSETS
b. Capital WIP 7.35 5.06 -2.29 -
Total F.A. (B) 2058.43 1977.99 -80.44 -3.908
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss 234.40 - -234.40 -100.00
Differed Tax Assets - -
(C)
Total Assets(A+B+C) 234.40 0.00 -234.40 -100.00
LIABILITIES 8199.98 8070.55 -129.43 -1.578
a. Capital 6509.75 6509.75 - -
b. Reserves & Surplus 15 24.43 9.43 62.867
Total Share Holder’s Fund (D) 6524.75 6534.18 9.43 0.145
Loan Funds
a. Liabilities 279.29 313.04 33.75 12.084
b. Provisions 557.06 394.54 -162.52 -29.175
c. Differed Tax Liability 838.88 828.79 -10.09 -1.203
Total C.L (F) 1675.23 1536.37 -138.86 -8.289
Total Liabilities (D+E+F) 8199.98 8070.55 -129.43 -1.578
INTERPRETATION
2) The current assets have increased by 3.139% due to increase in cash in hand and debtors.
3) The overall financial passions of the company is not satisfactory.
38
4) Misalliance expenditure assets have increased by 100.00% due to increases profit and
lose in total assets.
5) The total share holders funds have increased by 0.145% of the total share holders funds.
6) The current liabilities and provisions total liabilities increased by 1.578% of the financial
institutions.


2018 2019 per cent
ASSET
(I) CURRENT ASSETS
a. Inventories 534.65 656.51 121.86 22.79
b. Sundry Debtors 386.24 495.42 109.18 22.26
d. Other Current Assets
Total C.A (A) 6092.56 6605.63 513.07 8.42
(II) FIXED ASSETS
b. Capital WIP 5.06 0.00 -5.06 -100
c. Investments
Total F.A. (B) 1977.99 1872.38 -105.61 -5.339
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss
Differed Tax Assets
Total Miscellaneous Expenditure 0.00 0.00
(C)
39
Total Assets(A+B+C) 8070.55 8478.01 407.46 5.048
LIABILITIES
a. Capital 6509.75 6509.75
b. Reserves & Surplus 24.43 331.54 307.11 1257.10
Total Share Holder’s Fund (D) 6534.18 6841.29 307.95 4.70
Loan Funds
a. Liabilities 313.04 620.99 307.95 98.38
b. Provisions 394.54 219.49 -175.05 -44.36
c. Differed Tax Liability 828.79 796.24 -32.55 -3.92
Total C.L (F) 1536.37 1636.72 100.35 6.53
INTERPRETATION
2) The current assets have increased by 8.42% due to increase in cash in hand and debtors
The company might have changed its credit policy and list future liquidity position will
be dependent on credit management.
3) The overall financial position of the company appears to be satisfactory.
4) The total assets have increased by 5.048% due to increase in the assets.
5) The liabilities have share holders funds of reserves and surplice decreased by 127.10% of
the share holders funds.
6) The total liabilities have increased 5.04% of the total liabilities.
40
COMMON SIZE BALANCE SHEET OF IOCL FOR THE YEAR ENDING
31ST MARCH 2015 (In Lakh)
PARTICULARS 31st March, 2015 Change in

In(Rs) per cent
ASSET
(I) CURRENT ASSETS
a. Inventories 453.08 5.52
b. Sundry Debtors 330.89 4.03
c. Cash and Bank Balances 1399.49 17.04
d. Other Current Assets - -
e. Loans and Advances 325.45 3.96
Total C.A (A) 2508.88 30.55
(II) FIXED ASSETS
a. Net Block of Assets 3655.69 44.52
b. Capital WIP - -
c. Investments - -
Total F.A. (B) 3655.69 44.52
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss 1297.10 15.80
Differed Tax Assets 9.14
Total Miscellaneous Expenditure 750.33 24.93
(C)
Total Assets(A+B+C) 8212.00 100.00
LIABILITIES
a. Capital 6509.75 79.27
b. Reserves & Surplus 15 0.18
Loan Funds
a. Secured Loans 39.57 0.48
b. Unsecured Loans 350.00 4.26
Total Long Term Liabilities (E) 389.57 4.74
a. Liabilities 297.53 3.62
b. Provisions 495.46 6.03
Total C.L (F) 1297.68 15.80
Total Liabilities (D+E+F) 100.00 100.00
41
INTERPRETATION:
From the above table it is observed that.
1. Fixed assets are 44.52% of the total assets.
2. Current assets are 30.55% of the total assets.
3. Share capital is 79.45% of the total assets.
4. Unsecured loans are 4.74% of the total liabilities.
5. Deferred liabilities are 6.15% of the total liabilities.

In (Rs) per cent
ASSETS
(I) CURRENT ASSETS
d. Other Current Assets -
Total C.A (A) 4001.80 51.00
(II) FIXED ASSETS
42
b. Capital WIP -
c. Investments -
Total F.A. (B) 3042.04 43.59
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss 424.20 5.41
Differed Tax Assets
TotalMiscellaneous 424.20 5.41
Expenditure (C)
LIABILITIES
a. Capital 6509.75 82.97
LONGTERM LIABILITIES
Loan Funds
a. Secured Loans -
b. Unsecured Loans -
Total Long Term
Liabilities (E)
Current Liabilities&
Provisions
Total C.L (F) 1321.29 16.84
INTERPRETATION:
3. Share capital is 5.41% of the total assets.
4. Unsecured loans are 4.74% of the total liabilities.
5. Deferred liabilities are 4.39% of the total liabilities.
43
PARTICULARS 31st March,2017 Change in

In(Rs) per cent
ASSET
(I) CURRENT ASSETS
Total C.A (A) 5907.15 72.04
(II) FIXED ASSETS
b. Capital WIP 7.35 0.09
c. Investments - -
Total F.A. (B) 2058.43 25.10
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss 234.40 2.86
Differed Tax Assets
Total Miscellaneous 234.40 2.86
Expenditure (C)
LIABILITIES
a. Capital 6509.75 79.39
44
Loan Funds
a. Secured Loans - -
b. Unsecured Loans - -
Total Long Term Liabilities
(E)
Current Liabilities &
Provisions
Total C.L (F) 1675.23 20.43
INTERPRETATION:

3. Share capital is 80.66% of the total liabilities.
4. Current assets 11.68% of the total liabilities.

45
PARTICULARS 31st March,2018 Change in
In(Rs) Per cent
ASSET
(I) CURRENT ASSETS
Total C.A (A) 6092.56 75.49

(II) FIXED ASSETS
b. Capital WIP 5.06 0.06
c. Investments - -
Total F.A. (B) 1977.99 24.51
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss - -
TotalMiscellaneous
Expenditure (C)
LIABILITIES
a. Capital 6509.75 80.66
b. Reserves & Surplus 24.43 0.30
Loan Funds
Total Long Term
Liabilities (E)
Current Liabilities
& Provisions
Total C.L (F) 1536.37 19.04
46
INTERPRETATION:
4. Current assets 19.04% of the total liabilities

In (Rs) Per cent
ASSET
(I) CURRENT ASSETS
d. Other Current Assets 623.24 7.35
e. Loans and Advances - -
Total C.A (A) 6605.63 77.92
(II) FIXED ASSETS
b. Capital WIP - -
c. Investments - -
Total F.A. (B) 1872.38 22.08
47
(III)MISCELLANEOUS
EXPENDITURE
Profit & Loss - -
Total Miscellaneous
Expenditure (C)
Total Assets(A+B+C) 8477.63 100
LIABILITIES
a. Capital 6509.75 76.80
b. Reserves & Surplus 331.54 3.90
Loan Funds
Total C.L (F) 1636.72 19.30
INTERPRETATION:
4. Current assets 19.30% of the total liabilities
48
CHAPTER – V
CONCLUSIONS
&
SUGGESTIONS
49
CONCLUSIONS:
The following conclusions of the study
 The firm has not efficiently utilized the Fixed Assets during the
study period.
 Throughout the period of study it is observed that the management

of fixed assets is not properly planned.
 The effect of decrease in fixed assets has significantly reflected in

the companies profit earning capacity
 During the study period the trend in current assets was not good as
there is a no consistency in the management of current assets.
 Through out the period of study it is observed that the secured

loans have been decreased because of decrease in term loans and
working capital.
50
 Operating expenses are very high during the study period because
of these expenses the firm does not have profitability position.
SUGGESTIONS
 The company should stabilize fixed assets for a long period.
 The company should replace new fixed assets in order to increase
production. And sales by this the company can increase their
profitability.
 The company should maintain a good inventories and cash by this the
company current assets can be developed and it also effects the
company’s profit.
 The company should maintain loans by this the company can increase its
efficiency.
 The company should increase their investments for its future use.
 The company should concentrate on each and every aspect by which the
customer can get benefits and as well as the company.
51
BIBLIOGRAPHY
52
BIBLIOGRAPHY:
1. Maheshwari, Financial Management Principles & practice, Tata

McGraw Hill Publishing company ltd.,
2. I.M.PANDEY (1999), “Financial Management” Vikas Publishing House

Pvt.Ltd. New Delhi.
3. M Y KHAN & P K JAIN, “Management Accounting”. Tata MC Graw

Hill Publishing Company Limited, New Delhi.
4. R.K.SHARMA & SHASHIK GUPTA, “Management Accounting”

Kalyani Publishing
www.indianoil.co.in
53
JOURNALS:
1. Financial theory and practise:
2. Reserve bank of India bulletin capital market
3. Geetham journal of management
54

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CHAPTER - I

Hence, the efficient management of every business enterprise is closely linked

Meaning of Financial Management:

Meaning and Concept of Financial Analysis:

The purpose of financial analysis is to diagnose the information contained in financial

Nature of Financial Analysis:

In particular, it is concerned with the profitability on investment in the various assets of

1. The material used and

2. The method of operation followed in the analysis of the modus operandi

On the basis of material used:

Access to material used, financial analysis is two types

On the basis of Modus operandi:

It is also regarded as Static Analysis, comparison of current assets to current liabilities

Use of Financial Tools:

B) Common-size Income Statement:

Indian Oil Corporation Limited:

Profit before Tax

Provision for Taxation

In compliance of Accounting Standard-22 on “Accounting for Taxes on Income” issued by The

Indane Cooking Gas

Quantity(MMT) Value (Rs. Crore)

Research & Development

In refining technology, technologies developed earlier have moved up on the commercialization

Welfare of Weaker Sections

The Indian Oil Foundation

Indian Oil Blending Ltd.

Chennai Petroleum Corpn. Ltd.

Bongaigaon Refinery & Petrochem

Importance of Financial Analysis

In particular, it is concerned with the profitability on investment in the various assets of

Method of Procedure of Financial Analysis:

2. Common Size Statements

Common Size Statements

Research and Methodology:

Methodology is a systematic procedure of collecting information in order to analysis and

Objectives of the Study:

3) To evaluate the financial position of the company.

4) To evaluate the current achievement by comparing actual achievement with

5) To assess the company’s profitability, utilization, liquidity, financing etc.

Scope of the Study:

 The Scope is limited to the available past or Historical information of financial

 The scope of the study is limited to the period of 45 days.

Limitations of the Study:

COMPARATIVE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

5. The total miscellaneous expenditure have increased by 0.176% due to miscellaneous

COMPARATIVE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

PARTICULARS 31st March, 31st March, Change Change in

PARTICULARS 31st March, 31st March, Change Change in

COMPARATIVE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

PARTICULARS 31st March, 31st March, Change Change in

COMPARATIVE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

PARTICULARS 31st March, 31st March, Change Change in

PARTICULARS 31st March, 2015 Change in

COMMON SIZE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

PARTICULARS 31st March,2017 Change in

From the above table it is observed that.

COMMON SIZE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

Total C.A (A) 6092.56 75.49

COMMON SIZE BALANCE SHEET OF IOCL FOR THE YEAR ENDING

Source: Indian Oil Company

The following conclusions of the study

 Throughout the period of study it is observed that the management

 The effect of decrease in fixed assets has significantly reflected in

 Through out the period of study it is observed that the secured