SUBMITTED BY RINSHA FIROZ & GROUP

SUBMITTED TO PROF. WASEEM AHMAD

SUBMISSION DATE: DECEMBER 6TH 2022

GROUP MEMBERS:
MANEESHA MOHANAN
SHAHNA JABIN
ABDULLA UMAR
RUHIM RAFFEEK
RINSHA FIROZ

1
 INDEX PAGE
NO.
COMPANY 3
PROFILE
FINANCIAL 4-7
STATEMENT OF
RELIANCE INDUSTRIES
LIMITED
PROFITABILITY RATIO 8-11
AND ITS
IMPLICATIONS

LIQUIDITY RATIO 11-12

AND ITS
IMPLICATIONS

EFFICIENCY RATIO 13-14

AND ITS
IMPLICATIONS

GEARING RATIO 15
AND ITS
IMPLICATIONS

CONCLUSION 16

REFERENCE 17

2
 COMPANY PROFILE
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. Reliance is
one of the most profitable companies in India, the largest publicly traded company in India by
market capitalization, and the largest company in India as measured by revenue. It is also the
tenth largest employer in India with over 236,000 employees. RIL has a market capitalization of
US$243 billion as of March 31, 2022.
The company is ranked 155th on the Fortune Global 500 list of the world's biggest corporations
as of 2021 Reliance continues to be India's largest exporter, accounting for 8% of India's total
merchandise exports and access to markets in over 100 countries. Reliance is responsible for
almost 5% of the government of India's total revenues from customs and excise duty. It is also
the highest income taxpayer in the private sector in India. The company has negative free cash
flows. Reliance Industries became the first Indian company to cross 100Bn$ in revenues.
Some of the subsidiary companies of reliance industries Reliance Retail
Reliance Industry Infrastructure Renewable Energy Corporation Reliance Life Science
Reliance Industrial Investment and Holding Limited Reliance New Energy Solar System

3
 FINANCIAL STATEMENT OF RELIANCE
INDUSTRIES
.Statement of Profit and Loss
A financial statement known as a profit and loss (P&L) statement is one that provides a summary
of the revenues, costs, and expenses incurred during a specific time period, typically a quarter or
fiscal year. These records show whether or not a company can make a profit by either increasing
revenue or cutting costs, or both. Cash or accrual methods are frequently used to present P&L
statements. P&L statements are used by company managers and investors to evaluate a
company's financial health.
Standalone Profit & Loss account
Mar 21 Mar 20
INCOME
Revenue From Operations [Gross] 278,940.00 366,177.00
Less: Excise/Sevice Tax/Other Levies 33,273.00 29,224.00
Revenue From Operations [Net] 245,667.00 336,953.00
Total Operating Revenues 245,667.00 336,953.00
Other Income 14,818.00 13,566.00
Total Revenue 260,485.00 350,519.00
EXPENSES
Cost Of Materials Consumed 168,262.00 237,342.00
Purchase Of Stock-In Trade 7,301.00 7,292.00
Operating And Direct Expenses 18,375.00 21,424.00
Changes In Inventories Of FG,WIP And Stock-In Trade
610.00 77.00

Employee Benefit Expenses 5,024.00 6,067.00

Finance Costs 16,211.00 12,105.00
Depreciation And Amortisation Expenses 9,199.00 9,728.00
Other Expenses 13,565.00 14,306.00
Less: Transfer to / From Investment / Fixed Assets / Others
970.00 2,383.00

Less: Amounts Transfer To Capital Accounts

0.00 0.00
Total Expenses 237,577.00 305,958.00
Mar 21 Mar 20

Profit/Loss Before Interest And Tax 22,908.00 44,561.00

Interest 4,304.00 -4,245.00

Profit/Loss Before Tax 27,212.00 40,316.00

Current Tax 0.00 7,200.00

Deferred Tax -4,732.00 2,213.00
Total Tax Expenses -4,732.00 9,413.00
Profit After Tax ( PAT ) 31,944.00 30,903.00

4
 Profit and Loss a/c
400,000.00 366,177.00
336,953.00 350,519.00
350,000.00
305,958.00
300,000.00 278,940.00
260,485.00
245,667.00 237,577.00
250,000.00
200,000.00
150,000.00
100,000.00
50,000.00 31,944.00
30,903.00
0.00
Revenue From Total Operating Total Revenue Total Expenses Profit After Tax ( PAT
Operations Revenues )
[Gross]
Mar-21 Mar-20

Statement of Financial Position

A financial statement that details a company's assets, liabilities, and shareholder equity at a given
time is referred to as a balance sheet. The basis for calculating investor returns and assessing a
company's capital structure can be found in balance sheets. In short, the balance sheet is a
financial statement that shows what a company owns and owes and how much shareholders have
invested. When performing fundamental analysis or calculating financial ratios, balance sheets
can be combined with other significant financial statements.
Mar 21 Mar 20
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 6,445.00 6,339.00
Total Share Capital 6,445.00 6,339.00
Reserves and Surplus 468,038.00 384,875.00
Total Reserves and Surplus 468,038.00 384,875.00
Total Shareholders Funds 474,483.00 391,214.00
Equity Share Application Money 0.00 1.00
NON-CURRENT LIABILITIES
Long Term Borrowings 160,598.00 194,402.00
Deferred Tax Liabilities [Net] 30,788.00 50,556.00
Other Long Term Liabilities 4,518.00 3,434.00
Long Term Provisions 1,499.00 1,410.00
Total Non-Current Liabilities 197,403.00 249,802.00
CURRENT LIABILITIES
Short Term Borrowings 33,152.00 59,899.00
Trade Payables 86,999.00 71,048.00
Other Current Liabilities 80,735.00 198,662.00
Short Term Provisions 901.00 1,073.00
Total Current Liabilities 201,787.00 330,682.00

5
Total Capital And Liabilities 873,673.00 971,699.00
ASSETS
NON-CURRENT ASSETS
Tangible Assets 292,092.00 297,854.00
Intangible Assets 14,741.00 8,624.00
Capital Work-In-Progress 20,765.00 15,638.00
Intangible Assets Under Development 12,070.00 12,327.00
Fixed Assets 339,668.00 334,443.00
Non-Current Investments 252,620.00 421,793.00
Long Term Loans And Advances 65,698.00 44,348.00
Other Non-Current Assets 4,968.00 4,461.00
Total Non-Current Assets 662,954.00 805,045.00
Current Investments 94,665.00 70,030.00
Inventories 37,437.00 38,802.00
Trade Receivables 4,159.00 7,483.00
Cash And Cash Equivalents 5,573.00 8,485.00
Short Term Loans And Advances 993.00 15,028.00
Other Current Assets 67,892.00 26,826.00
Total Current Assets 210,719.00 166,654.00
Total Assets 873,673.00 971,699.00

Balance Sheet
1,200,000.00
971,699.00 971,699.00
1,000,000.00 805,045.00
800,000.00
600,000.00
400,000.00 330,682.00
249,802.00
166,654.00
200,000.00
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Series1 Series2

6
 Statement of Cash Flow
The term cash flow refers to the net amount of cash and cash equivalents being transferred in
and out of a company. Cash received represents inflows, while money spent represents
outflows.
Mar 21 Mar 20
12 mths 12 mths
Net Profit/Loss Before Extraordinary Items And Tax
27,212.00 40,316.00

Net Cash Flow From Operating Activities -512.00 77,533.00

Net Cash Used In Investing Activities 74,257.00 -143,625.00
Net Cash Used From Financing Activities -76,657.00 70,767.00
Adjustments on Amalgamation / Merger / Demerger / Others
0.00 42.00
Net Inc/Dec In Cash And Cash
Equivalents -2,912.00 4,717.00
Cash And Cash Equivalents Begin of Year 8,485.00 3,768.00
Cash And Cash Equivalents End Of Year 5,573.00 8,485.00

Cash Flow
100000

50000

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Ac
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Mar-21 Mar-20

7
 PROFITABILITY RATIO
Gross Profit Ratio
Gross profit margin is a metric analysts used for assessing a company's financial health
by calculating the companies of money left over from product sales after subtracting
the cost of goods sold (COGS). It is also referred to as the gross margin ratio; gross
profit margin is frequently expressed as a percentage of sales.
Formula:
Gross profit margin ratio = Gross Profit * 100
Net sales

YEAR RATIO

2020 32.2%
2021 35.4 %

32.20%
35.40%

2020 2021

Comments
In the year 2020, the gross profit ratio was 32.2%. It has increased to 35.4% in the year
2021 due to increase in sales with corresponding less increase in cost of goods sold.
It is continuously declined from 2005-2006 to 2008-2009 due to low cost of purchases
& overheads. Although the gross profit ratio shows a rise while comparing both year,
2020 and 2021. The net sales were showing a decline due to the pandemic hit.

Operating Profit Ratio (OPR)

Operating Profit Ratio is a profitability or performance ratio that reflects the percentage
of profit a company produces from its operations before subtracting taxes and interest
charges. OPR is calculated by dividing the operating profit by total revenue and

8
expressing it as a percentage. OPR margin is also known as EBIT Margin.
Formula:
Operating Profit Ratio = Operating Profit *100
Net sales
YEAR RATIO
15%
17%
2020 15%
2021 17%

Comments 2020 2021

The operating ratio of the company has increased over the past year. This is due to
decrease in the cost of goods sold. Though the cost has increased in 2006-2007 as
compared to 2005- 2006, it is reducing continuously over the next two years, indicate
upward trend in cost but downward / negative trend in operational performance.

Net Profit Ratio

The net profit margin helps to measures how much net income or profit is generated as
a percentage of sales. Net Profit Ratio is the ratio of net profits to revenues for a
company or business. Net profit margin is mainly expressed as a percentage but can
also be represented in decimal form. The net profit margin shows how much of each
dollar in revenue collected by a company turns into profit.
Formula:
Net profit ratio = Net Income * 100
Net sales 8.7

RATIO 12.71

2020 12.71%
2021 8.79%

2020 2021

Comments
Profitability ratio of company shows considerable decrease in the net profit ratio.
Company’s sales have decreased in the last year, mainly at the same time company has

9
been successful in controlling the expenses i.e., manufacturing & other expenses. It is
considered as a clear index of cost control, managerial efficiency & sales promotion.

RETURN ON ASSETS (ROA)

Rate of Return on Assets measures presume that a certain amount of investment
generates economic profits. A simple example of ROA interest earned on a savings
account. The rate of Return measures a firm’s success in using assets to generate
earnings independent of the financing of those assets. The measure in terms of
relationship between net profit after tax and total assets is known as profitability.
Formula:
ROA = Net profit after tax *100
Total Assets

YEAR ROA
2020 3.18 3.18
3.65
2021 3.65

2020 2021

Comments
Company’s ROA has increased from 3.18 in 2020 to 3.65% in 2021 because its
increase in net profit after tax is faster than total assets. Since the pandemic was hit, the
total asset of the company was also decreased from 971,699 crores to 873,673 crores.
Which resulted in increase in ROA.

Return on Capital Employed (ROCE)

Return on Capital Employed (ROCE) measures the return to common shareholders
after subtracting from revenues not only operating expenses (like cost of goods sold,
selling and administration expenses, and income taxes), but also the costs of financing
debt and preferred stock that are senior to the most stock.

10
 Formula:
ROCE= (PBIT) or Net Operating Income *100
Average Common Shareholders’ Equity or (capital
employed)

Capital employed = Share capital + Reserve and surplus + Long

term loans - Non operating assets - Fictitious assets
5.82

Year ROCE (%)

8.84
8.84
2021 5.82

2020 2021
Comments
Since there is a decrease in ROCE, which leads to decrease in share price because of
inefficiency of capital (employed on various projects) management which affects
investors’ perception. RCAP price was on high of whole time in 2020 which has
decreased continuously in 2021 which is not good for company’s health and decreasing
the market capitalization of the company but some improvement in net profit has
improved the situation and company’s share price has been doubled or less than it.

LIQUIDITY RATIO
Liquidity ratios are an important class of financial metrics used to determine a debtor's
ability to pay off current debt obligations without raising external capital. Liquidity
ratios measure a company's ability to pay debt obligations and its margin of safety
through the calculation of metrics including the current ratio, quick ratio, and
cash ratio.

LIQUIDITY RATIO OF RELIANCE INDUSTRY

For the year ended 31 March 2021 and 2020

11
 TYPES OF FORMULA RATIO RATIO
LIQUIDIT (2021) (2020)
Y
RATIO
CURRENT CURRENT
RATIO ASSETS/ 1.04 0.50
CURRENT
LIABILITIES

QUICK RATIO CURRENT

ASSETES -
INVENTORY/ 0.86 0.39
CURRENT
LIABILITIES

COMMENTS:
CURRENT RATIO: If the company's current ratio is too high it may indicate that the
company is not efficiently using its current assets or its short-term financing facilities.
This is the case that has been seen on 31 March 2021 that the ratio of that year has been
higher and that shows they are not efficiently using its current assets. And if current
liabilities exceed current assets the current ratio will be less than 1, this is also the
same case on 31 March 2020 that the ratio of that year is less than 1.
QUICK RATIO: The higher the ratio result, the better a company's liquidity and
financial health; the lower the ratio, the more likely the company will struggle with
paying debts. On 31 March 2021 the table shows that the ratio of that year is higher
compared to the year ended 31 March 2020 and on 31 March 2021 the company’s
liquidity and financial health are better compared to 31 March 2020.

Liquidity Ratio
1.2
1.04
1
0.86
0.8

0.6 0.5
0.39
0.4

0.2

0
Current Ratio Quick Ratio

20212 2020 Column1

12
 EFFICIENCY RATIO
An organization's capacity to utilize its assets to generate revenue is measured by its
efficiency ratio. For instance, a productivity proportion frequently takes a gander at
different parts of the organization, for example, the time it takes to gather cash from
clients or how much time it takes to switch stock over completely to cash.

Types of Formula Ratio

Efficiency (2020)
Ratio
Receivable Receivables/ 123.51 123.84
Days Revenue
*365
Inventory Inventory/Cost 128.15 92.33
Days of Sales *365
Inventory Cost of Sales / 5.24 6.66
Turnover inventory
Payable Payables/Cost 108.3 104
Days of Sales *365
Comments:
Receivable Days: A high accounts receivables ratio indicates the company is
conservative about extending credit to customers and is efficient or aggressive with its
collection procedures. Reliance industry has an accounts receivable ratio of 123.51 in
2021 and 123.84 in 2020. There is not much difference in the AR ratio between 2020
and 2021. This means that the company is successful in collecting from its customers
and the customers are paying on time during both the years. The business is efficient,
and the business has high proportion of customers who are making their payments
quickly to write off their debts.
Payable Days : A higher accounts payable ratio indicates
that a company pays its bills in shorter amount of Inventory Turnover Ratio
time than those with a lower ration. Reliance company
has 128.15 of payable days in 2021 and 92.33 in 2020,
which means the company can pay its debts. Payable ratio
has increased by 1.28% in 2021. This means the company 5.24
pays its bills comparatively faster in 2021 than in 2020. 6.66

13

2021 2020
Inventory Turnover Ratio: A high inventory turnover ratio indicates the company can
sell its products quickly and there is considerable demand for the products. Reliance
company has a good inventory turnover ratio of 5.24% in 2021 and 6.66% in 2020.
This means the company is comparatively quick in selling its products in 2021 than in
2020.
Inventory Days: This ratio looks at the average time a company can turn its inventory
into sales. Reliance company has 108.3 days sales in inventory during 2021 and 104
days in 2020. The inventory turnover ratio is low, the days sales in inventory will be
high. Reliance has seen an increased number of days in inventory in 2021 than in 2020
only.

Efficiency Ratios
140

120

100

80

60

40

20

0
Receivable Days Inventory Days Payable Days

Series 1 Series 2 Column1

SOLVENCY RATIO
Prospective business lenders frequently make use of the crucial metric known as the
solvency ratio in order to gauge an organization's capacity to meet its long-term debt
obligations. A company's solvency ratio is a measure of its financial health and shows
whether its cash flow can meet its long-term obligations. A company's likelihood of
defaulting on its debt obligations can be gauged by looking at its unfavorable ratio.
Types of solvency Formula 2021 2020
ratios
Gearing Ratio Debt/equity 0.41 0.65

14
 Equity ratio Total 0.73 0.65
equity/total
asset

Comments:
Debt to equity ratio describes to what extent a company is financed by debt
relative to equity. Here the debt-to-equity ratio of 0.41 on 2021 and 0.65 on 2020.
Ratio has decreased during March 31, 2021, comparing to March 31, 2020.
Equity ratio: how much of a company’s asset have been generated by issuing equity
shares rather than by talking on debt. Here the equity ratio of 0.73 on 2021 and 0.65 on
2020. Here equity ratio has increased during March 31, 2021, comparing to March 31,
2020.

Solvency Ratio
0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
Gearing Ratio Equity Ratio

Series 1 Series 2 Column1

CONCLUSION
Reliance has strong governance practices with a level 3 rating, which means that while it appears
to have done well, but there is still scope for improvement in the level of corporate governance
standards and quality of disclosures to be practiced in the company . It is the 3rd most profitable
company in India having strong financial position. It is the 2nd largest company in India in terms
of revenue. Even though it is a big brand is exposed to several threats. They are facing intense
competitors and still they are the king of their market. Reliance industries are successful in
implementing different changes because the managers or the leaders are competent enough and

15
the employee’s individual goals are aligned with the organizational goals. Its superior
operational and financial performance reflects its global competitiveness, prudent business
strategies, and the ability to maintain profitability through business cycle. It is committed to a
conservative financial framework, and a consistent endeavour to maximize overall shareholder
value. Every day, we continue to create new paradigms as we strive passionately for a better
future. Agility and innovation are essential for staying successful in an unpredictably tough
world. Organizations that can lead and harness the digital revolution will have a bright future as
technology becomes a driving factor in all enterprises and aspects of society.

REFERENCE
https://stock-financials.valuestocks.in/en/reliance-ratio-analysis

https://www.investing.com/equities/reliance-industries-ratios

https://tradingeconomics.com/ril:in:cost-of-sales

https://www.moneycontrol.com/news/business/earnings/reliance-consolidated-
march- 2021-net-sales-at-rs-154896-00-crore-up-13-69-y-o-y-6854291.html/amp

16
https://www.google.com/url?q=https:/www.academia.edu/5462244/Financial_analysis_of
Reliance_Industries_Limited&usg=AOvVaw0TunYvEx7ilumVa8Geh0ND&hl=en_AE

https://www.google.com/url?q=https://pdfcoffee.com/project-report-on-financial-
analysis- of-reliance-industry-limited-pdf-
free.html&usg=AOvVaw3UkNBbcR0qLlGNv_yR6p_w&hl=en_AE

https://wap.business-standard.com/company/reliance-inds-476/financials-ratios

https://www.moneycontrol.com/news/business/earnings/reliance-consolidated-
march- 2021-net-sales-at-rs-154896-00-crore-up-13-69-y-o-y-6854291.html

https://www.google.com/search?q=total+shareholder+equity+
+of+reliance+in+2021&sxsrf=ALiCzsYdIuOUcBoyJXXMV04wX8XhDXlfsA
%3A1653502480631&ei=EHKOYpyZJpe9lwTOqqqYCQ&ved=0ahUKEwic4
fjfoPv3AhWX3oUKHU6VCpMQ4dUDCA4&uact=5&oq=total+shareholder
+equity+
+of+reliance+in+2021&gs_lcp=Cgdnd3Mtd2l6EAM6BwgAEEcQsAM6BAg
hEApKBAhBGABKBAhGGABQ2QJYo0pgwE9oAXABeACAAZoCiAGaJJIBBjA
uMTkuNJgBAKABAcgBBsABAQ &sclient=gws-wiz
https://ycharts.com/companies/RLNIY/shareholders_equity

17