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"A STUDY ON FINANCIAL ANALYSIS AND PERFORMANCE OF COAL INDIA

LIMITED (CIL)

Article · January 2019

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 Project

On

“A STUDY ON FINANCIAL ANALYSIS AND

PERFORMANCE OF COAL INDIA LIMITED (CIL)
(2019-2020)”

Submitted To

RashtrasantTukadoji Maharaj Nagpur University, Nagpur

Submitted in partial fulfillment of the requirement for the Award of the

Degree of Bachelor of Business Administration

Submitted By

Mr. Kosh Rohin Kumar

Under The Guidance of

Dr (Mrs.) Jigisha Naidu

Ms. Elisha Joseph

Department of Commerce, Management & Computers

2020-2021

Hislop College, Nagpur

 CERTIFICATE

I hereby declare that, the project report entitled “A Study On Financial Analysis And

Performance Of Coal India Limited (CIL) (2019-2020)” submitted by Mr. Kosh

Rohin Kumar to Rashtrasant Tukdoji Maharaj Nagpur University, Nagpur for the

award of Bachelor Of Business Administration Degree in the faculty of commerce is a

bonafide and original research work carried out under my guidance and supervision. The

research is sufficiently high standard to warrant its submission to the university of the

said degree.

No part of this project has been submitted for any degree or diploma, or published in any

other form. The assistance and the help to the researchers during the course of the

investigation in the form of basic source material and information have been duly

acknowledged.

Place: - Nagpur

Date: -

Dr (Mrs.) Jigisha Naidu Dr (Mrs.) Jigisha Naidu & Ms. Elisha Joseph

Director Guide

Internal Examiner External Examiner

 DECLARATION

I hereby declare that “A Study On Financial Analysis And Performance Of Coal

India Limited (CIL) (2019-2020)” submitted by Mr. Kosh Rohin Kumar is a result of

my ownresearch work under the guidance of for the partial fulfillment Ms. Elisha

Joseph & Dr (Mrs.) Jigisha Naidu Bachelor of Business Administration and that the

same has not been previously submitted to any degree/diploma.

Place: - Nagpur Mr. Kosh Rohin Kumar

Date: -
 ACKNOWLEDGEMENT

The project work has been undertaken as a part of curriculum of final year degree in

Bachelor of Business Administration. The purpose of doing this is to impart integrated

approach to our education. It gives us an opportunity to apply our concepts vis-à-vis the

subject we undertake to study.

It is said that success is the symbol of diligence, inspiration and innovation. Success

only smiles on those who strive hard for it. So I would like to ascribe my success to the

hard work of my guide Dr (Mrs.) Jigisha Naidu & Ms. Elisha Joseph whose endeavor

for perfection, personal attention, enthusiasm and foresight has contributed in a big way

in completing this project with considerable ease within the stipulated time.

At last my sincere thanks to the members of Department Of Commerce,

Management & Computers, friends and all those who helped me directly or indirectly in

the completion of this project work for all my inspiration and strength in completing this

work

Mr. Kosh Rohin Kumar

 INDEX

Serial No. Particular Page Number

1. Chapter 1-Executive Summary 1

2. Chapter 2-Introduction
 2.1 Introduction of the Topic 2

 2.2 Introduction of the Company 19

3. Chapter 3- Research Methodology

25
 3.1 Research Design
26
3.1.1 Objectives of the Study
27
3.1.2 Hypothesis
28
3.1.3 Scope of the Study
29
3.1.4 Geographical are to be covered
29
3.1.5 Period of the Study

29
3.2 Sampling Design
29
3.2.1 Population
29
3.2.2 Sample
29
3.2.3 Sampling Method
30
3.2.4 Methods of Data collection :
Primary Data or Secondary Data

4. Chapter 4- Analysis and Findings of the study 32

5. Chapter 5- Limitation of The Study 39

6. Chapter 6- Conclusions and Suggestions of the study 40

7. Chapter 7- Bibliography 42

8. Chapter 8- Appendices 43
 CHAPTER - 1
EXECUTIVE SUMMARY
 CHAPTER - 1
EXECUTIVE SUMMARY

To study and understand about Financial Analysis and Performance of Coal India Limited
(CIL) (2019-2020), A statement of financial performance is an accounting summary that
details a business organization's revenues, expenses and net income. Three financial
statements comprise the statement of financial performance: income statement, balance
sheet and cash flow statement.
Ratio analysis isn't just comparing different numbers from the balance sheet, income
statement, and cash flow statement. It's comparing the number against previous years,
other companies, the industry, or even the economy in general. Ratios look at the
relationships between individual values and relate them to how a company has performed
in the past, and might perform in the future.
 To learn about the various ratios that are used for financial analysis and
performance.
 To know about the financial position of Coal India Limited (CIL).
 To know the various financial indications through changing values of various
ratios.
 To learn the calculation of various ratios.

 H1- There is positive relationship between financial analysis indicators and the
financial performance determinants in Coal India Limited (CIL).

 For the organization to minimize cost and to maximize return.

 The ability to meet its operating activities
 To overcome undue risk.
 The accuracy of Financial Performance information largely depends on how
accurately financial statements are prepared.

Data collected from financial statements of the company;

 Financial Ratios of Coal India Limited (CIL).
 Profit & Loss A/c- Balance Sheet, Annual Report of Coal India Limited (CIL).

Page No. 1
 CHAPTER - 2

INTRODUCTION
 2.1 Introduction of the Topic
 2.2 Introduction of the Company
 CHAPTER - 2

INTRODUCTION

Introduction of Financial Management

According to Dr. S. N. Maheshwari,

"Financial management is concerned with raising financial resources and their

effective utilisation towards achieving the organisational goals."

According to Richard A. Brealey,

"Financial management is the process of putting the available funds to the best
advantage from the long term point of view of business objectives."

Financial Management means planning, organizing, directing and controlling the financial
activities such as procurement and utilization of funds of the enterprise. It means applying
general management principles to financial resources of the enterprise.

Finance is the lifeline of any business. However, finances, like most other resources, are always
limited. On the other hand, wants are always unlimited. Therefore, it is important for a business to
manage its finances efficiently. As an introduction to financial management, in this article, we
will look at the nature, scope, and significance of financial management, along with
financial decisions and planning.

Sees the objective of teaching financial management to be to help managers and potential
managers to make sensible investment and financing decisions. Acknowledges that
financial theory teaches that investment and financing decisions should be based on cash
flow and risk

Page No. 2
INTRODUCTION OF THE TOPIC
Financial Analysis and Performance includes analysis and interpretation of financial
statements in such a way that it undertakes full diagnosis of the profitability and financial
soundness of the business. The financial analyst program provides vital methodologies of
financial analysis.

Financial performance analysis is the process of determining the operating and financial
characteristics of a firm from accounting and financial statements. The goal of such
analysis is to determine the efficiency and performance of firm‘s management, as reflected
in the financial records and reports. The analyst attempts to measure the firm‘s liquidity,
profitability and other indicators that the business is conducted in a rational and normal
way; ensuring enough returns to the shareholders to maintain at least its market value.

Purpose of Financial Analysis And Performance

 To know the earning capacity or profitability.
 To know the solvency.
 To know the financial strengths.
 To know the capability of payment of interest & dividends.
 To make comparative study with other firms.
 To know the trend of business.
 To know the efficiency of mgt.
 To provide useful information to mgt

Financial Management means planning, organizing, directing and controlling the

financial activities such as procurement and utilization of funds of the enterprise. It means
applying general management principles to financial resources of the enterprise.

Finance is the lifeline of any business. However, finances, like most other resources, are
always limited. On the other hand, wants are always unlimited. Therefore, it is important
for a business to manage its finances efficiently. As an introduction to financial
management, in this article, we will look at the nature, scope, and significance of financial
management, along with financial decisions and planning.

Page No. 3
Sees the objective of teaching financial management to be to help managers and potential
managers to make sensible investment and financing decisions. Acknowledges that
financial theory teaches that investment and financing decisions should be based on cash
flow and risk..

Financial performance is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues. This term is also used as a general
measure of a firm's overall financial health over a given period of time, and can be used to
compare similar firms across the same industry or to compare industries or sectors in
aggregation.

A statement of financial performance is an accounting summary that details a business

organization's revenues, expenses and net income. Three financial statements comprise the
statement of financial performance: income statement, balance sheet and cash flow
statement..

Financial Performance
Earning a profit is likely high on the list of things you want your business to accomplish.
To determine if you are actually earning a profit requires knowing a lot more than just
how much money you brought in that month. Determining profit means looking at things
like the company‘s assets, expenses, income and equity on a regular basis. These should
all be reflected on your company‘s statement of financial performance, which documents
all areas related to finances so you get the big-picture view of where your company stands.

Ratio Analysis:

Fundamental Analysis has a very broad scope. One aspect looks at the general
(qualitative) factors of a company. The other side considers tangible and measurable
factors (quantitative). This means crunching and analyzing numbers from the financial
statements. If used in conjunction with other methods, quantitative analysis can produce
excellent results.
Ratio analysis isn't just comparing different numbers from the balance sheet, income
statement, and cash flow statement. It's comparing the number against previous years,
other companies, the industry, or even the economy in general. Ratios look at the

Page No. 4
relationships between individual values and relate them to how a company has performed
in the past, and might perform in the future.

Definition
Result of one number or quantity divided by another. Ratios are the simplest mathematical
(statistical) tools that reveal significant relationships hidden in mass of data, and allow
meaningful comparisons. Some ratios are expressed as fractions or decimals, and some as
percentages. Major types of business ratios include (1) Efficiency, (2) Liquidity,
(3) Profitability, and (4) Solvency ratios.

Meaning of Ratio:
A ratio is one figure express in terms of another figure. It is a mathematical yardstick that
measures the relationship two figures, which are related to each other and mutually
interdependent. Ratio is express by dividing one figure by the other related figure. Thus a
ratio is an expression relating one number to another. It is simply the quotient of two
numbers. It can be expressed as a fraction or as a decimal or as a pure ratio or in absolute
figures as ―so many times‖. As accounting ratio is an expression relating two figures or
accounts or two sets of account heads or group contain in the financial statements.

Meaning of Ratio Analysis:

Ratio analysis is the method or process by which the relationship of items or group of
items in the financial statement are computed, determined and presented.
Ratio analysis is an attempt to derive quantitative measure or guides concerning the
financial health and profitability of business enterprises. Ratio analysis can be used both in
trend and static analysis. There are several ratios at the disposal of an analyst but their
group of ratio he would prefer depends on the purpose and the objective of analysis.

While a detailed explanation of ratio analysis is beyond the scope of this section, we will
focus on a technique, which is easy to use. It can provide you with a valuable investment
analysis tool.

This technique is called cross-sectional analysis. Cross-sectional analysis compares

financial ratios of several companies from the same industry. Ratio analysis can provide
valuable information about a company's financial health. A financial ratio measures a
company's performance in a specific area. For example, you could use a ratio of a

Page No. 5
company's debt to its equity to measure a company's leverage. By comparing the leverage
ratios of two companies, you can determine which company uses greater debt in the
conduct of its business. A company whose leverage ratio is higher than a competitor's has
more debt per equity. You can use this information to make a judgment as to which
company is a better investment risk.

However, you must be careful not to place too much importance on one ratio. You obtain
a better indication of the direction in which a company is moving when several ratios are
taken as a group.

Classification of Ratio:
CLASSIFICATION OF RATIO

BASED ON FINANCIAL BASED ON FUNCTION BASED ON USER

STATEMENT

1] BALANCE SHEET 1] LIQUIDITY RATIO 1] RATIOS FOR

RATIO 2] LEVERAGE RATIO SHORT TERM

2] REVENUE 3] ACTIVITY RATIO CREDITORS

STATEMENT 4] PROFITABILITY 2] RATIO FOR
RATIO RATIO SHAREHOLDER

3] COMPOSITE 5] COVERAGE 3] RATIOS FOR

RATIO RATIO MANAGEMENT
4] RATIO FOR
LONG TERM
CREDITORS

Page No. 6
What Is a Statement of Financial Performance?
A statement of financial performance is an accounting summary that details a business
organization's revenues, expenses and net income. Three financial statements comprise the
statement of financial performance: income statement, balance sheet and cash flow
statement.

Income statement: The income statement reflects a company‘s revenues and expenses. It
shows the company‘s bottom line so you can see how profitable your company is during a
certain period of time, such as quarterly or annually. The statement of financial
performance takes into account sales revenue, cost of goods sold and other operating
expenses and income.

Balance sheet: The balance sheet reflects where your business stands financially at a
certain point in time. This statement of financial performance takes into account assets,
liabilities and shareholder equity to make sure assets are equal to the other two factors.
The balance sheet incorporates the net income determined on your income statement.

Cash flow statement: The cash flow statement looks at how money moves through your
business. It shows increases and decreases in cash from operations, investing and
financing during a period of time. This statement of financial performance shows the net
change in cash balance using numbers from both the income statement and the balance
sheet.
These statements are prepared monthly, quarterly or annually, and give businesses a big
picture of there they stand financially. A corporation's accounting department may prepare
a statement of financial performance at any given point in time or throughout the year,
depending on business requirements. For example, you may ask your accounting manager
to prepare a statement of financial performance for the last two weeks of July and the first
three weeks of November to understand what factors affect sales and whether sales are
seasonal.

Page No. 7
Financial Performance Factors for a Business
Preparing a statement of financial performance means knowing a lot of important
information about how money comes into your business and how it goes out. These
financial performance factors for a business should be tracked regularly:

Assets: An asset is anything your business owns or has that will be of value in the future.
This includes tangible assets such as products, buildings and equipment. It also includes
intangible assets such as contracts, marketing and consumer mailing lists. These are all
things that can be sold in the future that would add value to your company.

Liabilities: A liability is anything you might owe in the future and is often based on a
contract. For example, if one of your employees crashes the company car, you may be
liable for paying the car‘s insurance deductible since you contract with the insurance
company.

Equity: Equity is the value of your business that remains after deducting liabilities from
assets. In corporations, this value is known as the shareholder‘s equity.

Owner investment: Business owners typically invest their own cash and resources into
the business. This is known as the owner investment, which establishes equity in the
business. If future business partners want equity in your business, how much they invest
determines their equity share. For example, a limited liability corporation, or LLC, with
two equal partners who contributed 50 percent has an owner investment of 50 percent of
the business.

Owner distribution: If those partners later sell their shares, they would receive an owner
distribution. This results in decreased equity in the business.

Revenue: Revenue represents income that a company earns during a certain period. It
includes sales, interest income and gains on short-term investments. Revenue may be a
short-term item if it is earned in a year or less or a long-term item if it is earned after a
year. For example, a business‘ short-term revenues include sales and interest income,
while long-term revenues can include interest income, such as from a corporate savings
account, that is earned in two years.

Page No. 8
Expenses: Expenses represent costs that a company incurs during a certain period. They
include the cost of sales, interest expense, production or delivery costs, as well as losses
on short-term investments.

Gains and losses: These are increases and decreases in equity that result from transactions
incidental to your business. For example, if your primary business is book printing and
distribution, you likely have machinery needed to bind books. If you sell a book binder
used to manufacture books, you would sell it either for more than you paid for it (a gain)
or less (a loss).
A statement of financial performance can also include comprehensive income, asset use,
market share and other factors that affect your business.

Why You Need a Statement of Financial Performance

There are many reasons why businesses need a statement of financial performance.
Generally, a statement of financial performance is important to understanding if your
business is profitable and, if not, where to make needed changes. It shows the current
financial status of your business, how cash is used and where the unnecessary costs are.
A statement of financial performance allows a company's top management to identify
major revenue and expense items that affect the company's bottom line, or net income. For
example, you can review your company‘s statement of financial performance for the
months of June, September and November to understand and compare sales revenue levels
and which expense items increase based on seasonal business demands.

The statement of financial performance also helps management see which business
segments or products are worth investing more money in and which the company may
need to stop putting money into. If you're investing a lot of money in a product that
historically costs more to produce than it earns profit, you can make the best decision for
your company based on information learned from the statement of financial performance.

A statement of financial performance also provides significant insight into an

organization's overall profitability. It helps investors, lenders or regulators gauge a
corporation's economic standing. This comes into play in such situations as seeking a bank
loan. The bank's credit officer may review your statement of financial performance over a

Page No. 9
five-year period to gauge profitability levels or sales trends and ensure that you will have
available cash to repay the loan.
Potential investors look at your statement of financial performance to help them decide if
they want to invest in your company. Likewise, someone wanting to purchase or acquire
the business will use the statement of financial performance to help determine a purchase
price. When done properly, the statement of financial performance tells future investors or
purchasers everything they need to know about your company.
While only publicly traded companies are required to maintain statements of financial
performance, keeping track of your company‘s finances will help you when it comes time
to file tax returns.

How to Improve Financial Performance

After all of the calculations are in, you may find that the statement of financial
performance isn‘t showing the profits you expected. This can be disheartening to anyone
who invests a lot of time, energy and money into their business enterprise, but there are
ways to improve the financial performance of your company:

 Maintain ongoing financial statements. One of the best ways to improve

financial performance is to regularly review how your business is doing. Instead of
preparing the statement of financial performance annually, you may want to do it
quarterly, or even monthly, to see where improvements can be made. What you
don‘t want to do is make rash decisions based on one bad month, so be sure to look
at financials month-to-month, quarter-to-quarter or year-to-year to make the most
informed decisions.

 Be proactive. With regular financial performance statements, you can see if things
are operating as efficiently as they should. With ongoing financial statements, you
can get a sense of what is currently happening in your company, what is going to
happen, and if any changes need to be made. Being proactive can save you a lot of
money and positively impact your bottom line.

 Have a realistic budget. One of the quickest ways to improve financial

performance is to have a realistic budget. Don‘t spend a lot of money in areas that
don‘t make sense, since it will negatively affect your bottom line. Make sure you

Page No. 10
 have a budget that is realistic and in line with company goals. When you work
within that budget, you may see the financials move in the direction you want.

 Price your products correctly. Know how much your products are actually worth
on the market by doing competitor research. If you can increase the price of your
product or service, you may be able to see immediate improvements in the
company‘s financial performance, especially if costs stay the same.

 Set achievable goals. In addition to a realistic budget, make sure your goals are
achievable. Don‘t try to provide services you don‘t have the resources for. Don‘t
try to double your profits within one month. What you want to do is strategically
plan where to invest resources and money, and then set goals that the company can
actually achieve. Meeting smaller goals helps improve financial performance in the
short-term, while ultimately meeting your long-term financial goals.

 Get everyone on board. Make sure your entire team is onboard with the budget.
This ensures they abide by how much to spend and when to cut their losses. It also
ensures that your team is engaged and committed to your company‘s goals and
bottom line. Satisfied employees can boost your financial goals since they are more
likely to do what it takes to help your company succeed and stick around for the
long-term.

 Make sure your systems are current. Your company is only as efficient as the
people and technology you employ. Outdated technology and systems can slow
things down so much that you waste both money and time. Periodically check in
with your staff to make sure they are making effective use of their time and
efficiently processing anything related to your company‘s finances, such as
invoices and collecting overdue payments. Keeping the computers and software up
to date will also keep things operating more smoothly. Utilizing financial
performance apps and newer computer programs is key in today's fast-changing
world.

Page No. 11
Measure your financial performance

Measurement of financial performance is an important part of running a growing

business. Many businesses fail because of poor financial management or planning.
Your business' success can depend on developing and implementing sound financial and
management systems. Updating your original business plan is a good place to start.
See prepare a business plan for growth and balance sheets.

Financial performance review

Financial performance review can help you examine your business goals and plan
effectively for improving the business. When carrying out a financial review of your
business, you might want to consider:

 Cashflow - this is the balance of all of the money flowing in and out of your business.
You should regularly review and update your forecast. See cashflow management.

 Working capital - have your requirements changed? If so, try to determine why and
assess how this compares to the industry standard. See how to use your business plan
to get funding.

 Cost base - keep your costs under constant review. Make sure that your costs are
covered in your sale price - but don't expect your customers to pay for any business
inefficiencies. See price your product or service.

 Borrowing - what is the position of any overdrafts or loans? Are there more
appropriate or cheaper forms of finance you could use? See borrowing finance for
your business.

 Growth - do you have plans in place to adapt your financing to accommodate your
business' changing needs and growth? Find out more about financing growth.

Financial performance measures

One of the most important areas of your finances you should review is your profitability.
This is your capacity to make a profit, ie generate revenue that exceeds your overall

Page No. 12
expenditure (all costs, taxes and expenses). Most growing businesses ultimately target
increased profits, so it's important to know how to analyse your profitability ratios.
Profitability ratios typically fall under two broad categories: margins and returns. Most
common profitability ratios are:
 Gross profit margin - how much money is made after direct costs of sales have been
taken into account, or the contribution as it is also known.
 Operating expenses margin - this lies between the gross and net measures of
profitability. Overheads are taken into account, but interest and tax payments are not.
For this reason, it is also known as the EBIT (earnings before interest and taxes)
margin.
 Net profit margin - this is a much narrower measure of profits, as it takes all costs
into account, not just direct ones. All overheads, as well as interest and tax payments,
are included in the profit calculation.
 Return on capital employed - this calculates net profit as a percentage of the total
capital employed in a business. This allows you to see how well the money invested in
your business is performing compared with other investments you could make with it,
like putting it in the bank.

Accounting ratios to measure performance

As well as measuring profit, you should consider other standard financial ratios to help
you to analyse your business' performance. These ratios look at:
 liquidity - assessing your ability to meet your short-term financial obligations
 solvency - measuring your long-term debt against your assets and equity to
determine your financial stability
 efficiency - measuring things like stock turnover to determine how well you
are using your business assets
 Measuring these ratios against industry averages, previous years and
competitors can help you to identify problems and issues within your business.
See how to use accounting ratios to assess business performance.

Financial Performance Indicators You Should Be Tracking

Your business's Key Performance Indicators (KPIs) are your tools for measuring and
tracking progress in essential areas of company performance. Your KPIs provide you with

Page No. 13
a general picture of the overall health of your business. Acquiring insights afforded by
your KPIs allows you to be proactive in making necessary changes in under-performing
areas, preventing potentially serious losses. The KPI quantification then allows you to
measure the effectiveness of your efforts. This process ensures the long-term sustainability
of your company's operating model, and helps increase your business's value as an
investment.
The first priority is to identify and understand the overall impact that the various financial
realities represented by your KPI numbers have on your business. Then, use the insights
you acquire from these invaluable financial management performance indicators to
identify and implement changes that correct problems with policies, processes, personnel,
or products that are impacting one or more of your KPI values.
Primary KPIs that you're undoubtedly already using include revenue, expense, gross
profit, and net profit. Here are other key indicators that should be tracked, analyzed, and
acted upon as needed.

1. Operating Cash Flow

Monitoring and analyzing your Operating Cash Flow is an essential for understanding
your ability to pay for deliveries and routine operating expenses. This KPI is also used in
comparison with total capital you have in use—an analysis that reveals whether or not
your operations are generating sufficient cash for support of capital investments you are
making to advance your business.

The analysis of your ratio of operating cash flow compared to your total capital employed
gives you deeper insight into your business's financial health, allowing you to look beyond
just profits, when making capital investment decisions.

2. Working Capital

Cash that is immediately available is "working capital". Calculate your Working Capital
by subtracting your business's existing liabilities from its existing assets. Cash on hand,
accounts receivable, short-term investments are all included, as well as accounts payable,
accrued expenses, and loans are all part of this KPI equation.

Page No. 14
This especially meaningful KPI informs you of the condition of your business in terms of
its available operating funds, by showing the extent to which your available assets can
cover your short-term financial liabilities.

3. Current Ratio

While the Working Capital KPI discussed above subtracts liabilities from assets, the
Current Ratio KPI divides total assets by liabilities to give you an understanding the
solvency of your business—i.e., how well your company is positioned to meet its financial
obligations consistently on time and to maintain a level of credit rating that is required to
order to grow and expand your business.

4. Debt to Equity Ratio

Debt to Equity is a ratio calculated by looking at your business's total liabilities in contrast
to your shareholders' equity (net worth). This KPI indicates how well your business is
funding its growth and how well you are utilizing your shareholders' investments. The
number indicates how profitable the business is. It tells you and your shareholders how
much debt the business has accrued in effort to become profitable. A high debt-to-equity
ratio reveals a practice of paying for growth by accumulating debt. This critical KPI helps
you focus on your financial accountability.

5. LOB Revenue Vs. Target

This KPI compares your revenue for a line of business to your projected revenue for it.
Tracking and analyzing discrepancies between the actual revenues and your projections
helps you understand how well a particular department is performing financially. This is
one of the two primary factors in the calculation of the Budget Variance KPI—the
comparison between projected and actual operating budget totals, which is necessary in
order for you to budget more accurately for needs.

6. LOB Expenses Vs. Budget

Comparing actual expenses to the budgeted amount produces this KPI. The comparison
helps you understand where and how some budgeted spending went off track, so that you
can budget more effectively going forward. Expenses vs. Budget is the other primary

Page No. 15
factor of the Budget Variance KPI. Knowing the amount of variance between the total
assumed and total actual ratio of revenues to expenses helps you become an expert on the
relationship between your business's operations and finances.

7. Accounts Payable Turnover

The Accounts Payable Turnover KPI shows the rate at which your business pays off
suppliers. The ratio is the result of dividing the total costs of sales during a period (the
costs your company incurred while supplying its goods or services), by your average
accounts payable for that period.
This is a very informative ratio when compared over multiple periods. A declining
accounts payable turnover KPI may indicate that the length of time your company is
taking to pay off its suppliers is increasing and that action is required in order to keep your
good standing with your vendors, and to enable your business to take advantage of
significant time-driven discounts from vendors.

8. Accounts Receivable Turnover

The accounts receivable turnover KPI reflects the rate at which your business is
successfully collecting payments due from your customers. This KPI is calculated by
dividing your total sales for a period by your average accounts receivable for that period.
This number can serve as an alert that corrections need to be made in managing
receivables, in order to bring payment collections within appropriate timeframes.

9. Inventory Turnover

Inventory continuously flows in and out of your production and warehousing facilities. It
can be hard to visualize the amount of turnover that is actually taking place. The inventory
turnover KPI allows you to know how much of your average inventory your company has
sold in a period. This KPI is calculated by dividing sales within a given period by your
average inventory in the same period. The KPI gives you a picture of your company's sales
strength and production efficiency.

Page No. 16
10. Return on Equity

The Return on Equity (ROE) KPI measures your company's net income in contrast to each
unit of shareholder equity (net worth). By comparing your company's net income to its
overall wealth, your ROE indicates whether or not your net income is appropriate for your
company's size.
Regardless of how much your company is currently worth (its net worth), your current net
income will determine its probable worth in the future. Therefore, your business's ROE
ratio both informs you of the amount of your organization‘s profitability and quantifies its
general operational and financial management efficiency. An improving, or high ROE
clearly indicates to your shareholders that their investments are being optimized to grow
the business.

11. Quick Ratio

Your Quick Ratio KPI measures your organization's ability to utilize its highly liquid
assets to immediately meet your business's short-term financial responsibilities. This is the
measurement of your company‘s wealth and financial flexibility. It is understood as a
more conservative evaluation of a business's fiscal health than the Current Ratio, because
calculation of the Quick Ratio excludes inventories from assets.
This Quick Ratio KPI has the popular nickname of "Acid Test" (after the nitric acid test
used in detecting gold). Similarly, the Quick Ratio is a quick and easy way of assessing
the wealth and health of your company. If you‘ are a new adopter of KPIs, the Quick Ratio
KPI is a good approach to getting a quick view of your business‘s overall health.

Page No. 17
Purpose of Analysis of financial statements
 To know the earning capacity or profitability.
 To know the solvency.
 To know the financial strengths.
 To know the capability of payment of interest & dividends.
 To make comparative study with other firms.
 To know the trend of business.
 To know the efficiency of mgt.
 To provide useful information to mgt

Tools of Financial Statement Analysis

Various tools are used to evaluate the significance of financial statement data. Three
commonly used tools are these:
 Ratio Analysis
 Funds Flow Analysis
 Cash Flow Analysis

Page No. 18
2.2 Introduction of the Company

Coal India Limited is an Indian state-controlled coal mining company headquartered in

Kolkata, West Bengal, India and the largest coal-producing company in the world and a
Maharatna company. The company contributes to around 82% of the coal production in
India.

Coal India Limited (CIL) as an organized state owned coal mining corporate came into
being in November 1975 with the government taking over private coal mines. With a
modest production of 79 Million Tonnes (Mt) at the year of its inception CIL today is the
single largest coal producer in the world. Operating through 82 mining areas CIL is an
apex body with 7 wholly owned coal producing subsidiaries and 1 mine planning and
consultancy company spread over 8 provincial states of India. CIL also fully owns a
mining company in Mozambique christened as 'Coal India Africana Limitada'. CIL also
manages 200 other establishments like workshops, hospitals etc. Further, it also owns 26
technical & management training institutes and 102 Vocational Training Institutes
Centres. Indian Institute of Coal Management (IICM) as a state-of-the-art Management
Training 'Centre of Excellence' - the largest Corporate Training Institute in India -
operates under CIL and conducts multi-disciplinary management development
programmes.

CIL having fulfilled the financial and other prerequisites was granted the Maharatna
recognition in April 2011. It is a privileged status conferred by Government of India to
select state owned enterprises in order to empower them to expand their operations and
emerge as global giants. So far, the select club has only seven members out of290 Central
Public Sector Enterprises in the country (as on 31/03/2014, source-DPE).

Page No. 19
Coal India Limited (CIL) the state owned coal mining corporate came into being in
November 1975. With a modest production of 79 Million Tonnes (MTs) at the year of its
inception CIL today is the single largest coal producer in the world and one of the largest
corporate employer with manpower of 272445 (as on 1st April, 2020). CIL functions
through its subsidiaries in 84 mining areas spread over eight (8) states of India. Coal India
Limited has 352 mines (as on 1st April, 2020) of which 158 are underground, 174
opencast and 20 mixed mines. CIL further operates 12 coal washeries, (10 coking coal and
2 non-coking coal) and also manages other establishments like workshops, hospitals, and
so on. CIL has 26 training Institutes and 84 Vocational Training Centres. Indian Institute
of Coal Management (IICM) as a state-of-the-art Management Training ‗Centre of
Excellence‘ – the largest Corporate Training Institute in India - operates under CIL and
conducts multi -disciplinary programmes.

CIL is a Maharatna company - a privileged status conferred by Government of India to

select state owned enterprises in order to empower them to expand their operations and
emerge as global giants. The select club has only ten members out of more than three
hundred Central Public Sector Enterprises in the country.
CIL has seven producing subsidiaries namely Eastern Coalfields Limited (ECL), Bharat

Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Western Coalfields
Limited (WCL), South Eastern Coalfields Limited (SECL), Northern Coalfields Limited
(NCL)and Mahanadi Coalfields Limited (MCL) and One mine planning and consultancy
company that is Central Mine Planning & Design Institute(CMPDI). In addition, CIL has a
foreign subsidiary in Mozambique namely Coal India Africana Limitada (CIAL). The
mines in Assam i.e. North Eastern Coalfields is managed directly by CIL.
 Mahanadi Coalfields Limited has four (4) subsidiaries which are i) MJSJ Coal
Limited ii) MNH Shakti Ltd, iii)Mahanadi Basin Power Ltd iv)Neelanchal Power
Transmition Company Private Ltd
 SECL has two subsidiaries i) M/s Chhattisgarh East Railway Ltd (CERL) ii)M/s
Chhattisgarh East- West Railway Ltd (CEWRL)
 CCL has one subsidiary – Jharkhand Central Railway Ltd

Page No. 20
Unmatched Strategic Relevance
Produces around 83% of India‘s overall coal production in India where approximately
57% of primary commercial energy is coal dependent, CIL alone meets to the tune of 40%
of primary commercial energy requirement. The share of coal is expected to remain high
at 48-54% till 2040 and accounts for 76% of total thermal power generating capacity of
the Utility sector. Supplies coal at prices discounted to international prices and insulates
Indian coal consumers against price volatility. Makes the end user industry globally
competitive and plays a key role in ―Make in India‖ and making India incorporate globally
competitive.

Production and Growth

During 2019-20, CIL produced 602.138 Million Tonnes (MTs) of coal under challenging
and adverse conditions achieving 91% of its target. CIL has breached the 600 Million
Tonne (MT) mark in coal production for the second time. On 30 March 2020, CIL set a
new record by producing 3.86 Mts, the highest ever production in a day since foundation.
Northern Coalfields Limited and Western Coalfields Limited exceeded their respective
annual production targets of 2019-20, achieving 102% and 103% of their respective
targets. While NCL produced 108.05 MTs for the fiscal, WCL‘s was 57.64 Mts. Raw coal
off-take for the Financial Year ending 31st March 2020 was 581.411 MT and Over Burden
Removal (OBR) was 1154.33 M Cum. Despatch of coal and coal products during 2019-20
was at 582.48 Mts and despatch to power utilities (including special forward e-Auction)
was 465.72 MTs. Overall coal stock at power houses was its highest in a decade at 45 .01
Mts (28 days) as on 31.3.2020.

Projects:
There are 107 ongoing Mining projects having annual capacity of 625.91 MT which have
contributed 295.37 MT in the year 2019-20. Other than this, there are 141 completed
mining projects having annual capacity of 300.12 MT. Forty-Nine (49) new future
projects, with a targeted capacity of 485.84 MTs have been identified in FY 2019-20 to
augment coal production of CIL to 1 billion tonnes by FY 2023-24

Clean Coal Technology: In pursuance to initiatives towards development of Clean Coal

Technology and alternate use of coal, CIL is exploring the possibilities to venture into the
Coal-to-Chemicals sector on stand-alone basis by setting up a Coal-to-Methanol plant at

Page No. 21
Dankuni Coal Complex (DCC). Coal sourced from Raniganj coalfields shall be gasified to
produce syngas which shall be subsequently converted into methanol.

Consumer Satisfaction: Consumer satisfaction is priority area for CIL and for enhanced
consumer satisfaction special emphasis has been given to Quality Management of Coal
from mine to dispatch point. All consumers of CIL have the option for quality assessment
through independent third party sampling agencies. A portal ‗UTTAM‘ has been launched
by CIL to so that information of coal quality will be accessible to both coal companies and
consumers.

Acquisition of Coal Assets abroad CIL is in the process of acquisition, development and
operation of coking coal assets in the Far East Region of Russia. A bilateral MOU was
executed between Coal India Limited and Far East Investment & Export Agency (FEIEA -
a Russian Govt. agency) on 4th September,2019 in the august presence of the Hon‘ble
Prime Minister of India and the Hon‘ble President of the Russian Federation, at
Vladivostok.

Touching Peoples’ lives at grass root level Unlike other parts of the world, coal reserves
in India mostly under the forest land or in tribal inhabited areas. Inevitably coal mining
displaces people. But, CIL has a well-structured Rehabilitation and Resettlement Policy
for Project Affected People. The company Pursues ‗Mining with a human face‘ through
socially sustainable inclusive model of growth by making Project Affected People
stakeholders in the decision making process for their livelihood.

Care for Environment/ Environmental Management Coal mining is usually associated

with degradation of natural resources and the environmental challenges from coal mining
are a known fact. Coal India being a responsible corporate follows a holistic approach to
mining and follows sustainable coal mining practices. A conceptual framework is in place
to minimize and mitigate the environmental effects. Concerted efforts are constantly made
to address the environmental issues.

CIL continuously reiterates its obligation to encourage synchronization with the

environment and pursue viable coal mining. Widespread tree plantation programmes are
undertaken every year by the Coal India on OB dumps, along haul road, around mines,

Page No. 22
residential colonies, and other available land. 99.6 million trees covering an area over
39842 hectares have been planted till March‘ 2020. During 2019-20, 1.98 million trees
have been planted covering an area of 812.98 Ha of land. In FY2020-21, CIL targets to
plant more than 1.8 million native/local species in around 740 Ha. CIL has also entered
into MoUs‘ with prominent Indian Scientific Institutions like ICFRE and NEERI. They are
involved in many scientific studies and also assist in development of Eco-restoration site
and three-tier plantation with native species
CIL HQ has obtained certification against ISO 9001, 14001 and 50001 (Quality
Management, Environment Management and Energy Management System) from Bureau
of India Standards (BIS). As on 31st March 2019, four of our Subsidiaries, ECL, CCL,
NCL and MCL are certified for Integrated Management System (ISO 9001, 14001 and
OHSAS 18001). CMPDI HQ and its seven RIs are certified for ISO 9001:2015.

Conservation of Energy Conservation of Energy is priority area for CIL and various
measures are taken towards reduction in specific energy consumption. High wattage
luminaries /conventional light fittings have been replaced with low power consuming
LEDs of appropriate wattage in majority of the places for street lighting, office and other
work places, townships The energy audit of the CIL office building and adjacent
residential complex was done by CMPDI in 2018-19 and in this process, the contract
demand of Office Building has been reduced from 1450 KVA to 1200 KVA and for
Residential complex it has been reduced from 500 KVA to 250 KVA. These modified
contract demands have been implemented in October 2019 and has led to reduction in the
electricity bill of office building and residential premises by 11% and 30 % respectively
Various steps have been taken for utilizing solar power as an alternative source of energy
such as in kilo-watt scale roof top solar plants are in successful operation. Subsidiary wise
total capacity of installed roof top are ECL -197 kWp, BCCL - 6 kWp , CCL - 872.5 kWp
, WCL - 1097 kWp , Coal India Office ,Kolkata -160 kWp , CMPDIL HQ and Regional
Institutes - 500 kWp . Total units generated from these plants in 2019-20 are 24.469 lakh
kWh.

Enterprise Resource Planning (ERP) CIL is on the path of design and implementation
of a strong state of the art Enterprise Resource Planning and Hospital Management system
in CIL and its subsidiaries. The effort is aimed to assimilate all aspects of business
operations into a single easy to use system which shall effectively plan, manage and

Page No. 23
optimize all the organisational resources through standardization of business processes and
best practices. The Phase-I of ‗Project Passion‘ is in realization stage and Coal India is
endeavouring for early SAP ERP implementation at ECL, BCCL, CCL, CMPDI, NCL and
SECL in Phase II.

System Improvement in Project Monitoring CIL had developed WEB Based Online
Monitoring System for monitoring implementation of coal projects. As of now, 82 coal
mining projects costing Rs. 150 Crores and have been monitored with server based MS
Project. CIL is also monitoring its ongoing projects through MDMS Portal.

Safety Policy of CIL Safety is accorded prime importance in the operations of CIL as
exemplified in the mission statement of CIL. CIL has a well-defined Safety Policy for
ensuring safety in mines

First Mile Connectivity Coal India Limited will switch over to mechanized coal
transportation through piped conveyor belts in its large mines by 2023-24 replacing the
existing road transport of coal. The company has already started the process for the same.
Thirty five (35) coal projects each having production capacity of 4 Million Tonnes per
annum and above have been identified for the purpose. This move promotes environment
safety and prevents possible coal pilferage. It will also lead to mechanized loading of coal
which will have benefits like crushing, sizing of coal, quicker and quality pre weighed
coal loading.

Future Outlook CIL is committed to play a major role in achieving the Nation‘s energy
security. Based on the demand projection in ‗Vision 2024‘ for coal sector in the country
and subsequent demand projection on CIL, a roadmap has been prepared wherein CIL has
envisioned 1 Billion Tonne (Bt) production in the year 2023-24 to meet the coal demand
of the country. To achieve this target, CIL has identified major projects and assessed other
related issues

Page No. 24
 CHAPTER - 3

RESEARCH METHODOLOGY
 3.1 Research Design
3.1.1 Objectives of the Study
3.1.2 Hypothesis
3.1.3 Scope of the Study
3.1.4 Geographical are to be covered
3.1.5 Period of the Study

3.2 Sampling Design

3.2.1 Population
3.2.2 Sample
3.2.3 Sampling Method
3.2.4 Methods of Data collection :
Primary Data or Secondary Data
 CHAPTER - 3

RESEARCH METHODOLOGY

Research refers to a search for knowledge. It is a systematic method of collecting and

recording the facts in the form of numerical data relevant to the formulated problem and
arriving at certain conclusions over the problem based on collected data. According to
Clifford Woody, Research comprises defining and redefining problems, formulating
hypothesis or suggested solutions: collecting, organizing and evaluating data: making
deductions and reaching conclusions: and at last carefully testing the conclusions to
determine whether they fit the formulating hypothesis.

 3.1 Research Design

Research design refers to ―framework or plan for a study that guides the collection and
analysis of data‖. The aim of this study is to investigate whether Coal India Limited (CIL)
For financial analysis and performance is a process of determining and interpreting
relationships between the items of financial analysis. Its purpose is to provide a meaningful
understanding of the performance and financial position of an enterprise. Thus, it is a
technique for analyzing the financial analysis and performance by computing ratios.

Page No. 25
3.1.1 OBJECTIVES OF THE STUDY

Objectives of the study areas as below:

1. To examine the relationship between the analysis of financial performance

and decision making process of the coal mining company.

2. To study Financial Statement Using Ratio Analysis of Coal India Limited (CIL)
For The Period 2017-2020.

3. To learn about the various ratios that are used for financial analysis and
performance.

4. To know about the financial position of Coal India Limited (CIL).

5. To know the various financial indications through changing values of various

ratios.

6. To learn the calculation of various ratios.

Page No. 26
3.1.2 HYPOTHESIS

The hypothesis taken under consideration for the study is:

Hypothesis is considered as the most important instrument in research. A hypothesis is an
assumption or some assumption to be proved or disapproved.

Hypothesis can also be divided as (1) Null Hypothesis or (2) Alternative Hypothesis.
Null Hypothesis: is a statement that no difference exists between a population parameter
and a sample statistic

Alternative Hypothesis: When the null hypothesis is rejected, then, we are accepting the
alternative hypothesis. The alternative hypothesis is the logical opposite of the null
hypothesis.

In this study
In line with the problem of this study has following hypothesis.

 H1- There is positive relationship between financial analysis indicators and the
financial performance determinants in Coal India Limited (CIL).

 H0- There is no relationship between financial analysis indicators and the financial
performance determinants in Coal India Limited (CIL).

From the data analysis and interpretation, it is clear the financial analysis indicators and
financial performance determinants in Coal India Limited (CIL) were all positive which
shows that Hypothesis has been proved.

Page No. 27
3.1.3 SCOPE OF THE STUDY

The scope of financial statement analysis is to evaluate the past, current, and future
performance and financial position of the company for the purpose of making
investment, credit, and other economic decisions.

 For the organization to minimize cost and to maximize return.

 The ability to meet its operating activities
 To overcome undue risk.

Page No. 28
3.1.4 Geographical are to be covered
Coal India Limited (CIL) Only.

3.1.5 Period of the Study

 For the year of 2019-2020

 3.2 Sampling Design

Sample Design is types of Research selected for this project is Exploratory. In exploratory
research design we focused the objective of the study, method of data collection and then
select the sample. After collection the data we analyses and at last interoperate the final
result & finds the best solution of particular problem.

3.2.1 Population
Financial analysis and performance of Coal India Limited (CIL) for the year of (2019-
2020).

3.2.2 Sample
The study has descriptive and systematic in as secondary data where used, Variables
relating to performance of liquidity, influence and effectiveness were composed from the
balance sheet and profit and loss account of the Coal India Limited (CIL) for the year of
2019 to 2020.

3.2.3 Sampling Method

Sample Method for this study is the three most commonly practiced methods of financial
analysis are – horizontal analysis, vertical analysis, and ratio and trend analysis.
Horizontal Analysis: Performance of two or more periods are compared to understand
company's progress over a period.
 Percentage analysis
 Bars & charts
 Pie diagrams

Page No. 29
3.2.4 Methods of Data collection : Primary Data or Secondary Data

Data Collection Method

The data collection for research collection work is one the crucial ventures to be done. In
order to come out with the strengths & weakness of the market is by the way of data in
term of communication & observation.

In order to reach some accurate & reliable conclusion, we require some set of
information. This information is nothing but the systematically processed & relevant ideas.
So, in other words we can say that, ―Information is outcome of processed Data‖

Data Collection-
Data Collection was done in two ways they were-
1. Primary data collection
2. Secondary data Collection

(A)Primary Data: -

The primary data is that data which is collected fresh or first hand, and for first time which
is original in nature.

(B)Secondary Data:

The secondary data is collected from company brochures and websites of the company.

Secondary data:

Secondary data means data that already available i.e. they refers to the data which have
already been collected & analyzed by some else. When the researcher utilizes
secondary data he has to look in to various sources from where he can obtain them.

Page No. 30
 Secondary data:
This is the existing data, collected from known sources. Some of the secondary
means of data collection are:
 Magazines
 Internet
 Company data sources
 Newspapers

Data collected from financial statements of the company;

 Financial Ratios of Coal India Limited (CIL).
 Profit & Loss A/c, of Coal India Limited (CIL)
 Balance Sheet, of Coal India Limited (CIL)
 Annual Report, etc.

Sources of secondary data:

1. Most of the calculations are made on the financial statements of the company
provided statements.

2. Referring standard texts and referred books collected some of the information
regarding theoretical aspects.

3. Method- to assess the performance of the company method of observation of the

work in finance department in followed.

Page No. 31
 CHAPTER - 4
ANALYSIS AND FINDINGS OF THE STUDY
 CHAPTER - 4

ANALYSIS AND FINDINGS OF THE STUDY

ANALYSIS
CURRENT RATIO :-

Current Ratio = Current Assets

Current liabilities
Year - 2020
Current Investments 93.97
Inventories 14.98
Trade Receivables 7.97
Cash And Cash Equivalents 1,071.48
Short Term Loans And Advances 0.00
Other Current Assets 4,107.28
Current Asset 5,295.68
Short Term Borrowings 0.00
Trade Payables 170.93
Other Current Liabilities 380.02
Short Term Provisions 137.10
Current Liabilities 688.05
Current Ratios 7.696649953

INTERPRETATION:
The company current ratio is ideal. The standard norm for current ratio is 1. current
ratio is more than 1 is satisfactory. In the year 2020 Current Ratio was 7.69.
Therefore it can be calculated that the liquidity performance of company is good.

Page No. 32
QUICK RATIO:

Quick Ratio = Current Assets -Inventory

Current Liabilities

Year - 2020
Current Investments 93.97
Inventories 14.98
Trade Receivables 7.97
Cash And Cash Equivalents 1,071.48
Short Term Loans And Advances 0.00
Other Current Assets 4,107.28
Current Assets -Inventory 5,295.68
Short Term Borrowings 0.00
Trade Payables 170.93
Other Current Liabilities 380.02
Short Term Provisions 137.10
Current Liabilities 688.05
Quick Ratio 7.696649953

INTERPRETATION:
It is more test of liquidity than the current ratio. Generally a quick ratio is 0:64. It is
considered to represent a satisfactory current financial condition. The quick ratio has
exceeded the standard ratio. The quick ratio has been 7.6 in 2020. Therefore it can be
concluded the liquidity performance of the company is good.

Page No. 33
NET PROFIT RATIO:

Net Profit Ratio = Net Profit x 100

Sales
Year - 2020
REVENUE FROM OPERATIONS [GROSS] 313.05
Less: Excise/Sevice Tax/Other Levies 81.47
REVENUE FROM OPERATIONS [NET] 231.58
TOTAL OPERATING REVENUES 845.16
Other Income 11,566.33
Net Profit 12,411.49
REVENUE FROM OPERATIONS [GROSS] 313.05
Less: Excise/Sevice Tax/Other Levies 81.47
REVENUE FROM OPERATIONS [NET] 231.58
TOTAL OPERATING REVENUES 845.16
Sales 11,566.33
Net Profit Ratios 107.3070715

INTERPRETATION:
In this the net profit ratio is in 2020 as 107.30. So in the year 2020 utilized the net profit
effectually.

Page No. 34
RETURN ON ASSETS
Return on assets = Net profit x 100
Total assets

Year - 2020
REVENUE FROM OPERATIONS [GROSS] 313.05
Less: Excise/Sevice Tax/Other Levies 81.47
REVENUE FROM OPERATIONS [NET] 231.58
TOTAL OPERATING REVENUES 845.16
Other Income 11,566.33
Net Profit 12,411.49
Current Investments 93.97
Inventories 14.98
Trade Receivables 7.97
Cash And Cash Equivalents 1,071.48
Short Term Loans And Advances 0.00
OtherCurrentAssets 4,107.28
TOTAL CURRENT ASSETS 5,295.68
Total assets 22,416.78
Return on Assets 55.36696171

INTERPRETATION:
In the year 2020 got the higher return on assets as 55.36. Therefore it indicates ideal
capacity of assets.

Page No. 35
RETURN ON EQUITY
Return on equity = Net profit x 100
Shareholders fund

Year - 2020
REVENUE FROM OPERATIONS [GROSS] 313.05
Less: Excise/Sevice Tax/Other Levies 81.47
REVENUE FROM OPERATIONS [NET] 231.58
TOTAL OPERATING REVENUES 845.16
Other Income 11,566.33
Net Profit 12,411.49
Equity Share Capital 6,162.73
TOTAL SHARE CAPITAL 6,162.73
Reserves and Surplus 10,650.57
TOTAL RESERVES AND SURPLUS 10,650.57
Shareholders fund 16,813.30
Return on Equity 73.81947625

INTERPRETATION:
In this the return on equity was in the year 2020 as 73.81.

Page No. 36
FIXED ASSET TURNOVER RATIO
Fixed asset turnover ratio = Net sales
Fixed asset

Year - 2020
REVENUE FROM OPERATIONS [GROSS] 313.05
Less: Excise/Sevice Tax/Other Levies 81.47
REVENUE FROM OPERATIONS [NET] 231.58
TOTAL OPERATING REVENUES 845.16
Net sales 12,411.49
Tangible Assets 302.39
Intangible Assets 0.20
Capital Work-In-Progress 128.33
Other Assets 8.32
Fixed asset 496.40
Fixed Asset Turnover Ratio 23.30042305

INTERPRETATION:
The ratio measures the efficiency of the assets use. The high ratio is better performance.
On the other hand, a low ratio indicates that fixed assets are not being effectively utilized.
Only in the years 2020 utilized the fixed assets effectively.

Page No. 37
 FINDINGS OF THE STUDY

 In the year 2020 Current Ratio was 7.69. Therefore it can be calculated that the

liquidity performance of company is good.

 The quick ratio has exceeded the standard ratio. The quick ratio has been 7.6 in

2020. Therefore it can be concluded the liquidity performance of the company is

good.

 In this the net profit ratio is in 2020 as 107.30. So in the year 2020 utilized the net

profit effectually.

 In the year 2020 got the higher return on assets as 55.36. Therefore it indicates

ideal capacity of assets.

 In this the return on equity was in the year 2020 as 73.81.

 The high ratio is better performance. On the other hand, a low ratio indicates that

fixed assets are not being effectively utilized. Only in the years 2020 utilized the

fixed assets effectively.

Page No. 38
 CHAPTER - 5

LIMITATION OF THE STUDY

 CHAPTER 5

LIMITATION OF THE STUDY

The study fully depends on financial data collected from the published financial statement
(Annual Report) of Coal India Limited (CIL). The data collected from above the sources
are not of detailed nature. Thus study incorporates all the limitations that are inherent in
the considered financial statement.

 The accuracy of Financial Performance information largely depends on how

accurately financial statements are prepared.

 Since Financial Performance are prepared by using historical financial data,

therefore, the information derived from such statements may not be effective in
corporate planning, if the previous situation does not prevail.

 Then Financial Performance provides only quantitative information about the

company's financial affairs.

Page No. 39
 CHAPTER - 6

CONCLUSIONS AND SUGGESTIONS OF THE STUDY

 CHAPTER 6

CONCLUSIONS AND SUGGESTIONS OF THE STUDY

CONCLUSIONS

 Over the last four years, Kotak Mahindra Bank has grown EPS by 17% per year.
That growth rate is fairly good, assuming the company can keep it up. While we
note Coal India Limited (CIL) EBIT margins were flat over the last year, revenue
grew

 The overall financial position of the Coal India Limited (CIL) Last Year is
satisfactory. The company needs to improve its profitable position which is ideal,
but less when compared to other years, in order to earn return on the resources
committed to business.

 The company‘s liquidity position is satisfactory but not ideal, as the current assets
and the current liabilities have being considerably decreased when compared to
previous year in order to meet its current obligations.

 The activity ratio of the company is i.e. current asset turnover ratio needs to be
improved. In the rest of the ratios gives satisfactory result.

 Increased demand of products helps the company remain strong. The changing
lifestyle and concepts of Indians have contributing much to the growth of the
company.

Page No. 40
 SUGGESTIONS OF THE STUDY

On the basis of the above conclusion the researcher is suggesting the following:-

 Coal India Limited (CIL) are playing crucial and significant role in the economy in
capital formation due to the inherent nature, therefore banks should be given more
attention than any other type of economic unit in an economy.

 Coal India Limited (CIL) should conduct survey from time to time, according to
which changes can be introduced in the organization to stay updated in the market.

 Coal India Limited (CIL) Employee should be trained according to the changing
standards of the organization.

 The spread of the Coal India Limited (CIL) should control otherwise the income of
the bank is eaten away by the interest expenses in the long-run.
 New and advanced concept must be introduced in inventory control management.

 Adequate planning is required for procurement of store items.

 A detail of the essence of effective working Financial management is proper cash

flow forecasting. This should take into account the impact of unforeseen events,
market cycles, loss of a prime customer and actions by competitors. So the effect
of unforeseen demands of Financial capital should be factored in Coal India
Limited (CIL) .

 Advance payments should be avoided. If at all advance payments are required, it

should be against securities like banks guarantee etc.

Page No. 41
 CHAPTER - 7

BIBLIOGRAPHY
 CHAPTER 7

BIBLIOGRAPHY

BOOK’S

 I. M. Pandey - Financial Management - Vikas Publishing House Pvt. Ltd. -

Ninth Edition 2006
 M.Y. Khan and P.K. Jain, Financial management – Vikas Publishing house
ltd., New Delhi.
 S.K. Gupta and R.K. Sharma, Financial Management – Kalyani Publishers
 Kothari C.R., ―Research Methodology-methods and Techniques‖, K.K
Gupta for New Age International private ltd, 2006.

Reports:
 Coal India Limited (CIL) Annual Reports (For one years, From 2019 to 2020)

Websites:-
 http://managementhelp.org/businessfinance/
 https://www.simplilearn.com/financial-performance-rar21-article
 https://www.investopedia.com/terms/f/financialperformance.asp
 https://www.inc.com/encyclopedia/financial-analysis.html
 https://www.moneycontrol.com/financials/coalindia/profit-lossVI/CI11#CI11
 https://www.moneycontrol.com/financials/coalindia/balance-sheetVI/CI11#CI11
 https://www.moneycontrol.com/financials/coalindia/ratiosVI/CI11#CI11

Company Websites:-
 https://www.coalindia.in/
 https://www.psuconnect.in/company/coal-india-limited/16

Page No. 42
CHAPTER - 8

APPENDICES
 CHAPTER 8

APPENDICES

PROFIT & LOSS ACCOUNT OF COAL INDIA (in Rs. Cr.) MAR 20

12 mths

INCOME

REVENUE FROM OPERATIONS [GROSS] 313.05

Less: Excise/Sevice Tax/Other Levies 81.47

REVENUE FROM OPERATIONS [NET] 231.58

TOTAL OPERATING REVENUES 845.16

Other Income 11,566.33

TOTAL REVENUE 12,411.49

EXPENSES

Cost Of Materials Consumed 15.17

Operating And Direct Expenses 73.07

Changes In Inventories Of FG,WIP And Stock-In Trade 15.68

Employee Benefit Expenses 545.25

Finance Costs 5.26

Depreciation And Amortisation Expenses 54.39

Other Expenses 401.14

Page No. 43
TOTAL EXPENSES 1,112.23

PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORDINARY 11,299.26

ITEMS AND TAX

Exceptional Items 0.00

PROFIT/LOSS BEFORE TAX 11,299.26

TAX EXPENSES-CONTINUED OPERATIONS

Current Tax 0.00

Less: MAT Credit Entitlement -138.28

Deferred Tax 0.00

Tax For Earlier Years -119.90

TOTAL TAX EXPENSES 18.38

PROFIT/LOSS AFTER TAX AND BEFORE EXTRAORDINARY 11,280.88

ITEMS

PROFIT/LOSS FROM CONTINUING OPERATIONS 11,280.88

PROFIT/LOSS FOR THE PERIOD 11,280.88

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 18.31

Diluted EPS (Rs.) 18.31

VALUE OF IMPORTED AND INDIGENIOUS RAW

MATERIALS STORES, SPARES AND LOOSE TOOLS

Imported Raw Materials 0.00

Page No. 44
Indigenous Raw Materials 0.00

STORES, SPARES AND LOOSE TOOLS

Imported Stores And Spares 0.00

Indigenous Stores And Spares 0.00

DIVIDEND AND DIVIDEND PERCENTAGE

Equity Share Dividend 7,395.27

Tax On Dividend 0.00

Equity Dividend Rate (%) 120.00

Page No. 45
 BALANCE SHEET OF COAL INDIA (in Rs. Cr.) MAR 20

12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 6,162.73

TOTAL SHARE CAPITAL 6,162.73

Reserves and Surplus 10,650.57

TOTAL RESERVES AND SURPLUS 10,650.57

TOTAL SHAREHOLDERS FUNDS 16,813.30

NON-CURRENT LIABILITIES

Long Term Borrowings 0.00

Deferred Tax Liabilities [Net] 0.00

Other Long Term Liabilities 4,617.77

Long Term Provisions 297.66

TOTAL NON-CURRENT LIABILITIES 4,915.43

CURRENT LIABILITIES

Short Term Borrowings 0.00

Trade Payables 170.93

Other Current Liabilities 380.02

Short Term Provisions 137.10

Page No. 46
TOTAL CURRENT LIABILITIES 688.05

TOTAL CAPITAL AND LIABILITIES 22,416.78

ASSETS

NON-CURRENT ASSETS

Tangible Assets 302.39

Intangible Assets 0.20

Capital Work-In-Progress 128.33

Other Assets 8.32

FIXED ASSETS 496.40

Non-Current Investments 12,232.59

Deferred Tax Assets [Net] 0.00

Long Term Loans And Advances 0.16

Other Non-Current Assets 4,391.95

TOTAL NON-CURRENT ASSETS 17,121.10

CURRENT ASSETS

Current Investments 93.97

Inventories 14.98

Trade Receivables 7.97

Cash And Cash Equivalents 1,071.48

Short Term Loans And Advances 0.00

OtherCurrentAssets 4,107.28

Page No. 47
TOTAL CURRENT ASSETS 5,295.68

TOTAL ASSETS 22,416.78

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 1,681.87

CIF VALUE OF IMPORTS

Raw Materials 0.00

Stores, Spares And Loose Tools 0.00

Trade/Other Goods 0.00

Capital Goods 0.00

EXPENDITURE IN FOREIGN EXCHANGE

Expenditure In Foreign Currency 1.21

REMITTANCES IN FOREIGN CURRENCIES FOR

DIVIDENDS

Dividend Remittance In Foreign Currency --

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods --

Other Earnings --

BONUS DETAILS

Bonus Equity Share Capital --

NON-CURRENT INVESTMENTS

Page No. 48
Non-Current Investments Quoted Market Value --

Non-Current Investments Unquoted Book Value 12,232.59

CURRENT INVESTMENTS

Current Investments Quoted Market Value 93.97

Current Investments Unquoted Book Value --

Page No. 49
KEY FINANCIAL RATIOS OF COAL INDIA (in Rs. Cr.) MAR 20

PER SHARE RATIOS

Basic EPS (Rs.) 18.31

Diluted EPS (Rs.) 18.31

Cash EPS (Rs.) 18.39

Book Value [ExclRevalReserve]/Share (Rs.) 27.28

Book Value [InclRevalReserve]/Share (Rs.) 27.28

Dividend / Share(Rs.) 12.00

Revenue from Operations/Share (Rs.) 1.37

PBDIT/Share (Rs.) 18.43

PBIT/Share (Rs.) 18.34

PBT/Share (Rs.) 18.33

Net Profit/Share (Rs.) 18.31

PROFITABILITY RATIOS

PBDIT Margin (%) 1,343.99

PBIT Margin (%) 1,337.55

PBT Margin (%) 1,336.93

Net Profit Margin (%) 1,334.76

Return on Networth / Equity (%) 67.09

Return on Capital Employed (%) 52.02

Page No. 50
 Return on Assets (%) 50.32

Total Debt/Equity (X) 0.00

Asset Turnover Ratio (%) 3.77

LIQUIDITY RATIOS

Current Ratio (X) 7.70

Quick Ratio (X) 7.67

Inventory Turnover Ratio (X) 56.42

Dividend Payout Ratio (NP) (%) 65.55

Dividend Payout Ratio (CP) (%) 65.24

Earnings Retention Ratio (%) 34.45

Cash Earnings Retention Ratio (%) 34.76

VALUATION RATIOS

Enterprise Value (Cr.) 85,206.74

EV/Net Operating Revenue (X) 100.82

EV/EBITDA (X) 7.50

MarketCap/Net Operating Revenue (X) 102.09

Retention Ratios (%) 34.44

Price/BV (X) 5.13

Price/Net Operating Revenue 102.12

Earnings Yield 0.13

Page No. 51

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