COST AND MANAGEMENT

ACCOUNTING
TOPIC- RATIO ANALYSIS AND
CASH FLOW STATEMENT OF
RELIANCE INDUSTRIES LTD.
2019- 2020
SUBMITTED BY - SUBMITTED TO -
SARANSH GOYAL DR.NAVLEEN KAUR MAM
BBA(IB) SEC- C
 Ratio Analysis for
RELIANCE INDUSTRIES
◦ 1.Solvency Ratios

◦ 1.1 Current Ratio: The company's

current ratio deteriorated and stood at
0.6x during FY20, from 0.7x during
FY19. The current ratio measures the
Click to add text company's ability to pay short-term
and long-term obligations
◦.
1.2.Interest Coverage Ratio:
◦ The company's interest coverage ratio
deteriorated and stood at 3.6x during FY20,
from 4.3x during FY19. The interest
coverage ratio of a company states how
easily a company can pay its interest
expense on outstanding debt. A higher
ratio is preferable.
 2.PROFITABILITY RATIOS INDUSTRIES

2.1RETURN ON EQUITY (ROE): THE ROE FOR THE COMPANY

DECLINED AND DOWN AT 8.8% DURING FY20, FROM 10.3%
DURING FY20. THE ROE MEASURES THE ABILITY OF A FIRM TO
GENERATE PROFITS FROM ITS SHAREHOLDERS CAPITAL IN THE
COMPANY.
2.2RETURN ON CAPITAL EMPLOYED (ROCE): THE ROCE FOR THE
COMPANY DECLINED AND DOWN AT 11.6% DURING FY20, FROM
12.1% DURING FY19. THE ROCE MEASURES THE ABILITY OF A FIRM
TO GENERATE PROFITS FROM ITS TOTAL CAPITAL (SHAREHOLDER
CAPITAL PLUS DEBT CAPITAL) EMPLOYED IN THE COMPANY.

2.3RETURN ON ASSETS (ROA): THE ROA OF THE COMPANY

DECLINED AND DOWN AT 5.3% DURING FY20, FROM 5.6% DURING
FY19. THE ROA MEASURES HOW EFFICIENTLY THE COMPANY USES
ITS ASSETS TO GENERATE EARNINGS.
 No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 0.7 0.6
Debtors’ Days Days 19 12
◦Key Interest coverage x 4.3 3.6

Ratio Debt to equity ratio x 0.5 0.4

Analysis Return on assets % 5.6 5.3

Return on equity % 10.3 8.8
Return on capital
% 12.1 11.6
employed
 RELIANCE INDUSTRIES
CASH FLOW STATEMENT
ANALYSIS
RELIANCE INDUSTRIES Cash Flow Statement 2019-
20
No. of months 12 12
Particulars % Change
Year Ending Mar-19 Mar-20
Cash Flow from
Operating Rs m 423,460 980,740 131.6%
Activities
Cash Flow from
Rs m -951,280 -757,170 -
Investing Activities
Cash Flow from
Financing Rs m 559,060 -25,410 -
Activities
Net Cash Flow Rs m 37,450 198,390 429.7%
 CASH FLOW STATEMENT ANALYSIS
• RELIANCE IND.'S CASH FLOW FROM OPERATING ACTIVITIES (CFO) DURING
FY20 STOOD AT RS 981 BILLION, AN IMPROVEMENT OF 131.6% ON A YOY
BASIS.
• CASH FLOW FROM INVESTING ACTIVITIES (CFI) DURING FY20 STOOD AT RS
-757 BILLION ON A YOY BASIS.
• CASH FLOW FROM FINANCIAL ACTIVITIES (CFF) DURING FY20 STOOD AT
RS -25 BILLION ON A YOY BASIS.
• OVERALL, NET CASH FLOWS FOR THE COMPANY DURING FY20 STOOD AT
RS 198 BILLION FROM THE RS 37 BILLION NET CASH FLOWS SEEN DURING
FY19.
THANKYOU