ALL INDIA SENIOR SECONDARY SCHOOL EXAMINATIONS

CLASS- ……………

ACCOUNTANCY
PROJECT WORK
2022 - 2023
Name : ………………………………………
Class : ………………………………………
Reg.No. : ………………………………………

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 Acknowledgement
I would like to express my special
thanks of gratitude to my Accountancy
Teacher Miss.Sheeba Mam for their
able guidance and support in
completing my project.
I would also like to extend my gratitude
to Principal Miss.Bessy Thomas and
Vice Principal Miss, Susan Chacko for
providing me with all facility which was
required.

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Si.No Particulars Date Page.No Initial of
Teacher

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Financial Statement
Analysis

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 FINANCIAL STATEMENT
ANALYSIS
MEANING
The term ‘financial statement 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 the
balance sheet, profit and loss account and other operative data.
According to Richard Metcalf and Pierre Titard, ‘Analysing
financial statement is a process of evaluating the relationship
between component parts of a financial statement to obtain a
better understanding of a firm’s position and performance.
FEATURES OF FINANCIAL STATEMENT ANALYSIS
➢ To assess the earning capacity or profitability of the firm.
➢ To assess the operational efficiency and managerial effectiveness.
➢ To assess the short term as well as long term solvency position of the
firm.
➢ To identify the reasons for change in profitability and financial position
of the firm.
➢ To make inter-firm comparison.
➢ To make forecasts about future prospects of the firm.

LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS

➢ It is only a study of interim reports.
➢ Financial analysis is based upon only monetary information and non-
monetary factors are ignored.
➢ It does not consider changes in price levels.
➢ As the financial statements are prepared on the basis of a going
concern, it does not give exact position. Thus accounting concepts
and conventions cause a serious limitation to financial analysis.
➢ Changes in accounting procedure by a firm may often make financial
analysing misleading.

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Segment
Analysis

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 Reliance Industries
Reliance Industries Limited is an Indian
multinational conglomerate company,
headquartered in Mumbai. It has diverse
businesses including energy, petrochemicals,
natural gas, retail, telecommunications, mass
media, and textiles.

THREE SEGMENTS
• Reliance Communications Limited:- Reliance Communications
Limited (RCOM) was an Indian mobile network provider
headquartered in Navi Mumbai that offered voice and 2G and 3G and
4G data services. In February 2019, the company filed for bankruptcy
as it was unable to sell assets to repay its debt.
• Reliance Power Limited:- Reliance Power Limited (R-Power),
formerly Reliance Energy Generation Limited (REGL) is a part of the
Reliance Anil Dhirubhai Ambani Group. It was established to develop,
construct, operate and maintain power projects in the Indian and
international markets. Reliance Infrastructure, an Indian private sector
power utility company and the Reliance ADA Group promote Reliance
Power.
• Reliance Textiles Limited:- manufacturing division at Naroda
houses one of the largest and most modern textile complexes in the
world, an achievement recognised by The World Bank. Through
Vimal, we brought in a new era in fabrics. Vimal became not only a
flagship brand of Reliance, but also one of the most trusted in brands
the country. It is also the first major retail chain in the country.

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 COMMON SIZE STATEMENT
SHOWING PERCENTAGE OF
SEGMENT’S REVENUE
% of revenue = (Revenue of Reliance Power/Total Revenue)*100 =
(43,188.34 crs/100,533.53 crs)*100 = 42.96%
% of revenue = (Revenue of Reliance Communications/Total
Revenue)*100 = (14,644.19 crs/100,533.53 crs)*100 = 14.57%
% of revenue = (Revenue of Reliance Textiles/Total Revenue)*100 =
(42,701 crs/100,533.53 crs)*100 = 42.47%

Segments % of Segments
Revenue
Reliance Power 42.96%
Reliance Communications 14.57%
Reliance Textiles 42.47%

COMMON SIZE STATEMENT

SHOWING DEGREE OF
STATEMENT’S REVENUE
° of revenue = (Revenue of Reliance Power)/Total Revenue)*360 =
(43,188.34 crs/100,533.53 crs)*360 = 154.65°
° of revenue = (Revenue of Reliance Comunications)/Total
Revenue)*360 = (14,644.19 crs/100,533.53 crs)*360 = 52.44°
° of revenue = (Revenue of Reliance Textiles)/Total Revenue)*360 =
(42,701 crs/100,533.53 crs)*360 = 152.91°

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 Segments Degree of segments of
revenue
Reliance Power 154.65°
Reliance Communications 52.44°
Tata Steel 152.91°

PIE DIAGRAM SHOWING

SEGMENTS REVENUE
Revenue

42% 42%

16%

Reliance Power Reliance Communications Reliance Textiles

COMMON SIZE STATEMENT

SHOWING PERCENTAGE OF
SEGMENT’S PROFIT
% of profit = (Profit of Reliance Power /Total Profit)*100 = (5342.07
crs/7240.07 crs)*100 = 73.79%
% of profit = (Profit of Reliance Communications/Total Profit)*100 = (905
crs/7240.07 crs)*100 = 12.50%

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% of profit = (Profit of Reliance Textiles/Total Profit)*100 = (993
crs/7240.07 crs)*100 = 13.71%

Segments % of Segments Profit

Reliance Power 73.79%
Reliance Communications 12.50%
Reliance Textiles 13.71%

COMMON SIZE STATEMENT

SHOWING DEGREE OF
SEGMENT’S PROFIT
° of profit = (Profit of Reliance Power/Total Profit)*360 = (5342.07 crs/7240.07
crs)*360 = 265.64°
° of profit = (Profit of Reliance Communications/Total Profit)*360 = (905
crs/7240.07 crs)*360 = 45°
° of profit = (Profit of Reliance Textiles/Total Profit)*360 = (993
crs/7240.07 crs)*360 = 49.36°
Segments % of Segments Profit
Reliance Power 265.64°
Reliance Communications 45°
Reliance Textiles 49.36°

PIE CHART SHOWING INTER

SEGMENT COMPARISON OF
PROFIT

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 Profit

14%

14%

72%

Reliance Power Reliance Communications Reliance Textiles

COMMON SIZE STATEMENT

SHOWING INTER-SEGMENT
COMPARISON OF CAPITAL
EMPLOYED
Reliance Power:-
% of C.E = (C.E of Reliance Power/Total C.E)*100 = (79,625.49
crs/166,706.87 crs)*100 = 47.7%
° of C.E = (C.E of Reliance Power/Total C.E)*360 = (79,625.49
crs/166,706.87 crs)*360 = 171.94
Reliance Communications:-
% of C.E = (C.E of Reliance Communications /Total C.E)*100 =
(41,009.38 crs/166,706.87 crs)*100 = 24.56%
° of C.E = (C.E of Reliance Communications /Total C.E)*360 =
(41,009.38 crs/166,706.87 crs)*360 = 88.56°

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 Reliance Textiles:-
% of C.E = (C.E of Reliance Textiles/Total C.E)*100 = (46,072
crs/166,706.87 crs)*100 = 27.74%
° of C.E = (C.E of Reliance Textiles/Total C.E)*360 = (46,072
crs/166,706.87 crs)*360 = 99.5 °

Segment Reliance Reliance Reliance Total

Power Communications Textiles
Capital 79,625.49 41,009.38 46,072 166,706.
Employed 87
% of Capital 47.70% 24.56% 27.74% 100%
Employed
Degree for 171.94o 88.56o 99.50o 360o
Pie Chart

PIE CHART SHOWING INTER

SEGMENT COMPARISON OF
CAPITAL EMPLOYED
Sales

28%

48%

24%

Reliance Power Reliance Communications Reliance Textiles

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 CALCULATION ON RETURN ON
INVESTMENT (ROI)
Reliance Power:-
ROI % = (Profit before interest and tax/Capital employed)*100=
(9,155.15 crs/79,625.49 crs)*100
=11.49%
Reliance Communications:-
ROI % = (Profit before interest and tax/Capital employed)*100= (1314.28
crs/41,009.38 crs)*100
= 3.20%
Reliance Textiles:-
ROI % = (Profit before interest and tax/Capital employed)*100= (3,057
crs/46,072 crs)*100
= 6.63%

COMMON SIZE STATEMENT

SHOWING INTER-SEGMENT
COMPARISON OF RETURN ON
INVESTMENT(ROI)
For the Year ended 31st March 2021 (all figures in crores)

Segment Reliance Reliance Reliance Total

Power Communications Textiles
PBIT 9,155.15 1,314.28 3,057 13,526.43
Capital 79,625.49 41,009.38 46,072 166,706.87
Employed
R.O.I% 11.49% 3.20% 6.63% 21.32%

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 BAR GRAPH SHOWING INTER-
SEGMENT COMPARISON OF
RETURN ON INVESTMENT(ROI)
Return On Investment (ROI)
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0
Category 1

Reliance Power Reliance Communications Reliance Textiles

COMBINED COMPARATIVE
STATEMENT
For the year Ended 31st March 2021 (all figures in Crores)

Segment Reliance Reliance Reliance Total

Power Communications Textiles

% of Total 42.96% 14.57% 42.47% 100.00%

Revenue

% of Total 73.79% 12.50% 13.71% 100.00%

Profit

% of C.E 47.70% 24.56% 27.74% 100.00%

R.O.I% 11.49% 3.20% 6.63% 21.32%

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 CONCLUSION
• Reliance Power. Has the highest ROI with 11.49% with
capital employed 47.40% and with revenue share of 42.96%
of the total revenue.

• Reliance Power Ltd. Generated PBIT of 73.79% of Total

Profit. Reliance Power Ltd. has a good ROI of 11.49%.

• Therefore, Reliance Power Ltd. Is the best performing

segments as compared to other segments.

BIBLIOGRAPHY
• https://www.rlltextiles.com/
• https://www.rllcommunications.com/
• https://www.rllpower.com/
• https://www.wikipedia.org/

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CASH FLOW
STATEMENT

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 CASH FLOW STATEMENT
A cash flow statement is a financial statement that provides aggregate data
regarding all cash inflows a company receives from its ongoing operations and
external investment sources. It also includes all cash outflows that pay for
business activities and investments during a given period.
A company's financial statements offer investors and analysts a portrait of all
the transactions that go through the business, where every transaction
contributes to its success.
The cash flow statement is believed to be the most intuitive of all the financial
statements because it follows the cash made by the business in three main
ways—through operations, investment, and financing. The sum of these three
segments is called net cash flow.

OBJECTIVES
The main objective of preparing cash flow statements for a particular
accounting period is to present information regarding the inflow and outflow of
cash.
Besides, It presents the investment and financial activities of a concern for a
particular period. It also fulfils the following objectives;
• Ensuring future positive cash flow of particular concern.
• Ensuring the capacity of an organization to pay a dividend.
• Identifying non-cash items ensures cash income and expenses of concern.
• Comparing various items of the current year with those of last year.
Knowing cash and cash equivalent and outsourcing inflow of a concern for a
particular period.

BENEFITS
• Cash Flow Statement helps in knowing the exact figure of cash inflows and
outflows from various operations of the business. It helps in comparing the
cash budgets of past assessments with the present to assess the future
requirements of the cash. It gives the accurate information about the cash-
based transactions in the business.

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• Cash flow statement majorly used in preparing the cash budget for future
needs and helps in knowing the periodical requirement of cash in the
business.
• It reveals the key changes required for the financial positioning of the
business and prioritizes important activities to the management.

LIMITATIONS
• Cash flow statement only confined to money made transaction leaving the
other fund transactions and long-term assets and liabilities.
• Even though it plays an important role in the business it has limited use when
compared with the profit and loss account.
• These statements don’t disclose the net income from the various operations
executed during the course of the business.

CLASSIFICATIONS
1.CASH FROM OPERATING ACTIVITY:- Cash from operating activities is the
aggregate amount of cash flow reported in the operating activities section of
the statement of cash flows of a business. This statement is part of the
organization’s financial statements. Operating activities refer to the primary
revenue-generating activities of an entity, such as cash received from the sale
of goods or services, royalties on the use of company-owned intellectual
property, commissions for sales on behalf of other entities, and cash paid to
suppliers.
The operating activities category does not include investing activities, which
are comprised of cash inflows from the liquidation of investments, or cash
outflows for the purchase of new investment instruments. The operating
activities category also does not include financing activities, which relate to
cash flows from the issuance or repurchase of a company's own shares, the
issuance of its own debt instruments, or the pay-out of dividends. Items
included in cash flows from operations are:
• Cash receipts from sales
• Cash received from earnings on investments
• Payments to suppliers and employees
• Payments for interest and taxes

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• Increases or decreases in accounts receivable, inventory and prepaid
expenses
• Increases or decreases in accounts payable
2.CASH FROM INVESTING ACTIVITY:- Cash flow from investing activities
refers to cash inflow and outflow of cash from investing in assets (including
intangibles), purchasing of assets like property, plant and equipment, shares,
debt and from sale proceeds of assets or disposal of shares/debt or
redemption of investments like collection from loans advanced or debt issued.
It provides information on cash inflow and outflow related to purchases and
sales of assets (Property, Plant & Equipment, etc.), loans made to suppliers or
the ones received from the customer, and any payments related to merger &
acquisitions. These items are found in the non-current portion of the balance
sheet
• Purchase of property, plant, and equipment (cash outflow)
• Sales of property, plant, and equipment (cash inflow)
• Investment in joint ventures and affiliates (cash outflow)
• Payments for business acquired (cash outflow)
• Proceeds from sales of assets (cash inflow)
• Investments in marketable securities (cash outflow)

3.CASH FROM FINANCING ACTIVITY:- Cash flows from financing activities

is a line item in the statement of cash flows. This statement is one of the
documents comprising a company's financial statements. The line item
contains the sum total of the changes that a company experienced during a
designated reporting period that were caused by transactions with owners or
lenders to either:
• Provide long-term funds to the company; or
• Return those funds to the owners or lenders. Items that may be included in
the financing activities line item are:
• Sale of stock (positive cash flow)
• Repurchase of company stock (negative cash flow)
• Issuance of debt, such as bonds (positive cash flow)
• Repayment of debt (negative cash flow)
• Payment of dividends (negative cash flow) • Donor contributions restricted to
long-term use (positive cash flow)

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 CASH FLOW
STATEMENT(Reliance ltd.)

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 GRAPHICAL REPRESENTATION

Operating Activites Investing Activities Financing Activities

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 CONCLUSION
According to Prof. WH Kipatric ‘A project is a wholehearted, purposeful activity
proceeding in a social environment.
A project, from the point of view of students, can be purposeful learning
activity involving practical problems, planned and carried out in a real life
manner to achieve specific goals. In other words project work refers to a
successful completion of a study.
This project work has been helpful in understanding the meaning techniques
and objectives of a financial statements in a better manner.
Analysis of financial statement is the process of understanding the risk and
profitability of a firm through analysis of reported financial information.
The project had been helpful in understanding the objectives of financial
analysis which are as follows:
1)Judging the earning capacity or profitability : On the basis of financial
analysis, the earning capacity of the business concern maybe computed
2)Judging the managerial efficiency : The financial statement analysis helps to
pinpoint the areas where in the managers have shown efficiency and areas of
inefficiency
3)Judging the short-term and Long term Solvency of the Enterprise : On the
basis of financial analysis, long term as well as short term solvency of the
concern maybe judged.
4)Intra-firm comparison: Intra-firm comparison becomes easy with the help of
financial analysis. It helps in assessing own performance as well as that of
others, if mergers and acquisitions are to be considered.
5)Making forecasts and preparing budgets: Past financial statement analysis
helps a great deal in assessing developments in the future, specially the next
year
6)Understandable: Financial analysis helps the users of financial statements
to understand the complicated matter in simplified manner. Data can be made
more attractive by charts, diagrams, which can be understood easily.
The project work also enabled me to understand about the parties interested
in financial statements analysis; they are as follows:
1)Shareholders or investors or owners
2)Management

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3)Employees and trade unions
4)Suppliers or creditors
5)Bankers and Lenders
6)Government and Agencies
7)Researchers

Thus this project was of immense benefit for me.

BIBLIOGRAPHY
• https://www.ril.com/ar2020-
21/pdf/Consolidated%20Cash%20Flow%20Statement.pdf
• https://www.reliancedigital.in/
• Teachers
• Parents

THANK YOU

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