PROJECT REPORT IN bpcl Bharat Petroleum Corporation Ltd.

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ACKNOWLEDGEMENT

Every project requires a great deal of creativity and co-operation on the part of the group members in order to achieve the desired objectives. This Financial Management project gave us an opportunity to work as a team and also helped us to gain insights into various financial tools and techniques that are used by managers which help them to make effective and efficient decisions. It also helped us to put into practice the concept learnt in class and in learning their applicability. We would like to take this opportunity to thank Dr. Ravi Kumar Jain, for providing us with his valuable advice and guidance at every step of this project. We would also like to thank our classmates for their cooperation and support.

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Serial no. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Introduction Capital Structure Theory Trend Analysis Fund Flow Analysis Dividend Policy Leverage Du-Pont Analysis External Fund Requirement Comparative Statements Common Size Statements

CONTENTS

Page no. 4 8 14 31 34 37 39 42 46 47 52 57

Working Capital Management Anexures & Bibliography
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The planned investments span across the oil and gas. Industry Overview: Oil and gas sector is one of the key catalysts in fuelling the growth of Indian economy. while satisfying 11. The share of oil and natural gas in India's total primary energy demand is 40 percent. The petroleum and natural gas industry in India has attracted foreign direct investment (FDI) worth US$ 3.INTRODUCTION As a part of our curriculum.4 per cent of Asia Pacific regional oil demand by 2015.2 per cent of the supply.280. The Analysis has been done on the front of financial concepts. In addition. India exported 50 million tonnes (MT) of refined petroleum products during 2010-11. accounting for 4 per cent of the world's refining capacity. warranting a robust demand for oil and natural gas in the country.       India has emerged as the 5th largest refining country in the world. 4 . India is also the world's fourth largest importer of oil.2 billion population and an economy that has consistently at approximately 8 per cent annually. we are doing a project which is basically an Analysis of Bharat Petroleum Corporation Ltd. The Department further recorded US$ 144 million during April–September 2011-12. India will account for 12. making India one of the world's major exporters of petroleum products. With our refining capacity increasing further. this figure is likely to touch about 70 MT by 2014. in the industry.72 million from April 2000 to September 2011. With a 1. India's energy needs are increasing fast. according to the data provided by Department of Industrial Policy and Promotion (DIPP). We have taken into consideration the data of last 5 years (2006-07 to 2010-11) from the financial statements of the companies. (BPCL).

An important player in the South Asian market then was the Burmah Oil Company. To market a deodorised variant. People found it useful as illuminating oil and the demand for it steadily increased. at a depth of 69. Samuel Kier.oil) first came up in wells drilled for salt. in North Western Pennsylvania.  From Nothing to Gold The 1860s saw vast industrial development. Though incorporated in Scotland in 1886. 'Colonel' Edwin Drake and 'Uncle' Billy Smith drilled a well with the specific objective of finding oil. he designed the first primitive refinery in 1852. and on 27th August 1859. USA. connected to a metal tank. a Pittsburgh druggist. A lot of petroleum refineries also came up. 5 . as we take you back in time to the evolution of Bharat Petroleum Corporation Limited. A new chapter in the history of Indian industry. Petroleum (derived from Latin Petra . the company grew out of the enterprises of the Rangoon Oil Company.BPCL: Vision         We are a leading energy company with global presence through sustained aggressive growth and high profitability We are the first choice of customers. which was a huge improvised kettle. always We exploit profitability growth opportunity outside energy We are the most environment friendly company We are a great organisation to work for We are a learning organisation We are a model corporate entity with social responsibility Early History .rock and oleum . they 'struck oil' at Titusvale.Dawn of a New Era Do take some time off for a brief interlude with the past. which had been formed in 1871 to refine crude oil produced from primitive hand dug wells in Upper Burma.5 ft. bottled and marketed Petroleum as medicinal cure.

Burmah Shell Marketing A pioneer in more ways than one. This was imported in bulk and transported in 4 gallon and 1 gallon tins through rail. road and country craft all over India. It provided free technical services to industrial customers . John D Rockefeller together with his business associates acquired control over numerous refineries and pipelines to later form the giant Standard Oil Trust. training road engineers. This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited. The development and promotion of efficient kerosene-burning appliances for lighting and cooking was an important part of kerosene selling activity. came canned Petrol. As a true pioneer would. Burmah Shell also fuelled flying boats. After the war Burmah Shell established efficient and up-to-date service and filling stations to give the customers the highest possible standard of service facilities. Burmah Shell again had the privilege to fuel JRD Tata's re-enactment of the original flight. service stations began to appear and became accepted as a part of road development.The search for oil in India began in 1886.came together to form a single organisation: Asiatic Petroleum to market petroleum products in South Asia. the company pioneered desert road construction. Besides selling Bitumen. followed by service stations.an active producer. which carried airmail at slightly higher rates than sea transport. In 1889. Tata's historic solo flight in a single engined de Havillian Puss Moth from Karachi to Bombay (Juhu) via Ahmedabad. And all along.  The Pioneering Spirit . retail sales points were built with driveways set back from the road.Royal Dutch.D. to educate the customer. In the 1930s. In 1928.big and small . 6 . at several locations. The company took up the challenge of reaching out to the people even in the remote villages to ensure every home had its supply of kerosene. particularly in Indian and Burmese markets. refiner and distributor of petroleum products. The largest rivals of Standard Oil . it went beyond selling petroleum.R. Goodenough of McKillop Stewart Company drilled a well near Jaypore in upper Assam and struck oil. Rothschilds .e. when Mr. when civil aviation arrived in India. i. Thirty years later. While discoveries were made and industries expanded. the company had the honour of fuelling J. the Assam Railway and Trading Company (ARTC) struck oil at Digboi marking the beginning of oil production in India. Shell. Asiatic Petroleum (India) joined hands with Burmah Oil Company .and it became a part of the company's culture. With motor cars. the company introduced LPG as a cooking fuel to the Indian home in the mid-1950s. in 1962. Burmah Shell began its operations with import and marketing of Kerosene. On 15th October 1932.

and soon the swamps gave way to towers and tanks of steel. Radakrishnan. It was also the first refinery to process newly found indigenous crude (Bombay High). 27 7 . Dr. and miles of pipeline. S. On 1st August 1977. the Burmah Shell Group of Companies was taken over by the Government of India to form Bharat Refineries Limited. Bombay was signed between the Burmah Shell group of companies and the Government of India on 15th December 1951. one year ahead of schedule.2 MMTPA (Million Metric Tonnes Per Annum) Refinery open on 17th March 1955. Vice President of India. With this infrastructure. It was then the largest refinery in India then. The refinery on 454 acres of land at village Mahul went on-stream on 30th January 1955. free India moved one step closer to self-reliance.  From Burmah Shell to Bharat Petroleum On 24th January 1976. On Stream . Man and machine worked relentlessly. declared the 2. it was renamed Bharat Petroleum Corporation Limited. in the country. Burmah Shell Refineries Limited was incorporated as a private limited company under the Indian Companies Act on 3rd November 1952. and work began on the marshland of Trombay at Bombay.The Burmah Shell Refinery An agreement to build a modern refinery at Trombay.

Capital Structure Theory
The value of a firm depends upon its expected earnings stream and the rate used to discount the stream. The capital structure of a firm can affect this value by changing either expected earnings or cost of capital or both. But the effect of leverage on the value of the firm is not very clear.

NET INCOME APPROACH: (Kd < Ko < Ke) According to this approach, the cost of equity (Ke) and the cost of Debt (Kd) are assumed to remain unchanged and they are independent of the Capital Structure. But the Average Cost of Capital (Ko) changes with the change in the leverage (Debt-Equity ratio).

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Actual (In Crs.) 2011 Net Operating Income Interest on Debt Equity Earnings Cost Of Equity (Ke) Cost Of Debt (Kd) Market Value Of Equity (E) Market Value Of Debt (D) Total Value Of Firm (V) 28516.18 32054.38 12695.69 29035.58 27103.15 18971.87 22195.2 21171.41 15022.38 10829.24 9544.31 9859.18 -8475.72 14013.20 16273.91 2411.15 1,100.78 1310.37 13.73% 6% 2010 2364.55 1,010.95 1353.60 13.73% 5% 2009 1002.71 2,166.37 -1163.66 13.73% 10% 2008 2596.39 672.47 1923.92 13.73% 4% 2007 2766.99 532.69 2234.30 13.73% 5%

Cost Of Capital (Ko)

8.46%

7.38%

7.90%

8.94%

10.21%

Total Debt

18971.87

22195.20

21171.41

15022.38

10829.24

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If no Debt had been used 2011 Net Operating Income Interest on Debt Equity Earnings Cost Of Equity (Ke) Cost Of Debt (Kd) Market Value Of Equity (E) Market Value Of Debt (D) Total Value Of Firm (V) 17562.03 17222.61 7303.41 18911.25 20153.85 0 0 0 0 0 17562.03 17222.61 7303.41 18911.25 20153.85 2,411.15 0.00 2411.15 13.73% 6% 2010 2,364.55 0.00 2364.55 13.73% 5% 2009 1,002.71 0.00 1002.71 13.73% 10% 2008 2,596.39 0.00 2596.39 13.73% 4% 2007 2,766.99 0.00 2766.99 13.73% 5%

Cost Of Capital (Ko)

13.73%

13.73%

13.73%

13.73%

13.73%

Total Debt

0.00

0.00

0.00

0.00

0.00

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keeping other things constant. which is the ultimate objective of any company.73% . The rationale behind this theory is that if the companies increase the debt proportion in their capital structure. Now. 11 .46%. NET OPERATING INCOME APPROACH: According to this approach. it had used a very small portion of debt but the effect was that the company’s Ko was reduced.Analysis: BPCL have Debt in their Capital structure. Same thing is seen for the earlier years also. we can analyze that if BPCL does not use debt then its Ko (for 2011) is 13. So. from our calculations. we can conclude that NI approach holds true for all three our companies and given the company’s policies. they should try to minimize their cost of capital. whereas if it had used debt (like the actual scenario) then its Ko is 8. This is done to show that the company having no debt in their capital structure will have a higher average cost of capital in contrast to the firm having some amount of debt. the overall capitalization rate (Ko) and the cost of debt (Kd) remain constant for all degree of leverage. we will now consider a hypothetical situation in which the company has all equity financed. Conclusion: So.. then this risk will be compensated by the increase in the required rate of return of the equity shareholders (Ke). So.

30 8.69 2.73% 13.73% 13.95 5% 22195.73% 13.71 2008 2596.010.24 2411.73% 13.18 1353.20 21171.100.78 6% 18971.38% 32054.37 9859.41 15022.37 10% 21171.66 14013.90% 12695.91 2234.20 1923.94% 29035.99 Cost Of Equity (Ke) 13.21% 27103.15 2010 2364.166.20 7.69 5% 10829.47 4% 15022.38 10829.38 10.87 22195.58 672.72 -1163.41 8.31 1310.Actual (In Crs.73% Total Debt 18971.38 1.92 16273.55 2009 1002.39 2007 2766.87 7.46% 28516.60 -8475.) 2011 Net Operating Income Overall Capitalization Rate (Ko) Total Value Of Firm (V) Interest on Debt Cost Of Debt (Kd) Market Value Of Debt (D) Market Value Of Equity (E) Equity Earnings 9544.15 532.24 12 .18 1.

the Ke of the company increases from 13..54 2166.02% 14.15 7904. 13 .90% 12695.46% 28516.15% 14. we can analyze that if BPCL uses more debt i.00 6% 20681.15 2010 2364.54% Analysis: Keeping other things constant.10 -1097.92% 12197.61 2411. we have our actual company data and we have taken a hypothetical situation wherein the amount of debt used by the company has increased. Conclusion: So we can conclude that NOI approach holds true for our companies and the risk will be adjusted by increase in Ke. This will show us how the Ke increases.71 2008 2596.94% 29035.46% (for 2011).18 1200.e.58 700 4.55 -7827.92 7. from our calculations.10 1264.38% 32054.39 14905. if we go on increasing the debt portion. then Ko.23% 20522. Kd remaining constant.55 2009 1002.39 2007 2766.27 7.21% 27103.79 8.99 8.76 crores to 1200.21 1896.48% 15637.69 2100 10.00% 14.46% 16.99 Cost Of Equity (Ke) 15.29 13398.00 crores.73% to 15. Now.38 1100.15 600 4.00 5% 24150.38 10.Suppose debt interest increase 2011 Net Operating Income Overall Capitalization Rate (Ko) Total Value Of Firm (V) Interest on Debt Cost Of Debt (Kd) Market Value Of Debt (D) Market Value Of Equity (E) Equity Earnings 7834. the interest amount increase from 110.26 1211.

Current Ratio: .2 1.351636 1.05 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 BPCL 14 .25 1.37) and in 2011 it declined to 1.Here over the last 5 years we see that current ratio is more than 1. which is considered as healthy for business.A current ratio greater than 1 indicates company is in a good position to get rid of its short-term liabilities immediately.1 1. However the highest ratio was obtained in the year 2010 (1.35 1.25.376669 1.191493 1.257192 1.15 1.  BPCL.209076 1.TREND ANALYSIS 1.4 1.3 1. Current Ratio Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 1.

4 0. Quick Ratio: .7 0.67 in 2010 to 0.2 0.Clearly for all the 5 years the quick ratio is less than 1.659675 0. There has been a decline in ratio from 0.  BPCL.2.3 0.556998 0.44081 0.624368 0.8 0.6 0. Quick Ratio 2011 2010 2009 2008 2007 0.1 0 2011 2010 2009 2008 2007 BPCL 15 . A ratio greater than 1 shows the ability of the company to immediately meet the current liabilities when required.674506 0.55 in 2011.Quick ratio does not involve available inventories and hence a more appropriate measure of company’s ability to meet its current liability. It uses the immediate liquid assets available to the company.5 0.

Debt-equity ratio: .03 0.05 0.Here for all the 5 years we see that the ratio is less than 0.34).5(50%) is considered good enough because it even eliminates accounts receivables.01 0 2011 2010 2009 2008 2007 BPCL 4.09 0.5 thus it shows that less availability of cash.076635 0.04 0.034412 0.  BPCL.It clearly shows that ratio is greater in 2009(1.02 0.06 0.017304 0.07 0.3.065951 0.08 0.It shows what proportion of debt and equity the company is using to finance its assets. It shows the company relied heavily in financing its fund through debt in 2009 compared to that in 2010 and 2011.69) and 2011(1. 16 .An absolute quick ratio greater than 0. Absolute Quick Ratio: .74) than 2010(1.  BPCL. Absolute Ratio 2011 2010 2009 2008 2007 0. bank and marketable securities.019985 0.

8 0.4 1.4 0.2 1 0.696011 2009 1.2 0 2011 2010 2009 2008 2007 BPCL 17 .Debt-Equity Ratio 2011 1.05409 2 1.6 1.349579 2010 1.745648 2008 1.286512 2007 1.8 1.6 0.

25105 0.1 0.30).25 0.15 0.35 0.273072 0.5.304319 0.Highest ratio was obtained in the year 2007(0.2 0.256029 0. .05 0 BPCL 2011 2010 2009 2008 2007 18 .245657 0.3 0. Proprietary Ratio: .Proprietary ratio highlights the financial position of the company and therefore Proprietary ratio can be interpreted as good if it is high because a higher proprietary ratio would imply that company has enough capital to repay its creditors whenever the creditors make any such demand.  BPCL. Proprietory Ratio 2011 2010 2009 2008 2007 0.

Here except for 2009(1.  BPCl. Interest Coverage Ratio: .190401 3.860975 6.5 or lower.it shows how easily a company can pay interest on outstanding debt. Interest Coverage Ratio 2011 2010 2009 2008 2007 3.338939 1.6. An interest coverage ratio below 1 indicates the company is not generating sufficient revenues to satisfy interest expenses. When a company's interest coverage ratio is 1.462853 4.194372 7 6 5 4 3 2 1 0 2011 2010 2009 2008 2007 BPCL 19 .46) in all other years the ratio is more than 3. its ability to meet interest expenses may be questionable.

Similarly.03) compared to other years.67464 12.A ratio showing how many times a company's inventory is sold and replaced over a period. Inventory Ratio 2011 2010 2009 2008 2007 10.7.85444 21.  BPCL.Here we see a high ratio in the year 2007(21. Inventory Ratio: . low debtors turnover ratio implies inefficient 20 . The higher the value of debtors’ turnover the more efficient is the management of debtors or more liquid the debtors are.0349 25 20 15 BPCL 10 5 0 2011 2010 2009 2008 2007 8.74447 14.57726 10. Debtor Turnover Ratio: .Debtors’ turnover ratio indicates the number of times the debtors are turned over a year.

Here in the year 2007(127. Accounts payable include both sundry creditors and bills payable.15) the highest ratio has been obtained as compared to other years.It signifies the credit period enjoyed by the firm in paying creditors. This situation enhances the credit worthiness of the company.65403 59.1547 140 120 100 80 60 40 20 0 2011 2010 2009 2008 2007 BPCL 9.48043 127. A high creditors turnover ratio or a lower credit period ratio signifies that the creditors are being paid promptly.56668 88. 21 .management of debtors or less liquid debtors.  BPCL.36557 70. Debtor Turnover Ratio 2011 2010 2009 2008 2007 56. Creditor Turnover Ratio: .

676383 8. Fixed Asset Turnover Ratio: . Creditor Turnover Ratio 2011 2010 2009 2008 2007 7.205802 7. This ratio measures the efficiency and profit earning capacity of the concern.887069 7.71) we observe a high ratio than other years. greater is the intensive utilization of fixed assets.Here in 2007(15.858434 15. Higher the ratio. 22 .Fixed assets turnover ratio is also known as sales to fixed assets ratio. BPCL. Lower ratio means under-utilization of fixed assets.71678 18 16 14 12 10 8 6 4 BPCL 2 0 2011 2010 2009 2008 2007 10.

Gross Profit Ratio: . BPCL.870489 7.573688 8. 23 .A higher gross profit ratio represents higher gross profit to net sales.038) the ratio is highest and then it gradually declines over the next 4 years.026).Clearly it states that in 2007(0. Fixed Assets Turnover Ratio 2011 2010 2009 2008 2007 8.Comparatively to the other years 2009() has a high ratio thus denoting intensive utilization than other years.  BPCL. As compared to 2010(0.52233 9.653698 8.029) there is a decline in ratio in 2011(0.159695 12 10 8 6 4 BPCL 2 0 2011 2010 2009 2008 2007 11.

04 0.015502 0.  BPCL.03 0.026948 0.Gross Profit Ratio 2011 2010 2009 2008 2007 0.029622 0.03802 0.015 0.01 BPCl 0.If the net profit is high. Clearly it states that in 2007(0.02 0.005).Higher the ratio higher is the profitability.035 0.033524 0. 24 . the firm will be able to achieve a satisfactory return on its investment.005 0 2011 2010 2009 2008 2007 12.025 0.018) is the highest and the lowest in 5 years has been observed in the year 2009(0. Net Profit Ratio: .

Lower operating ratio shows higher operating profit and vice versa.014 0.018 0. Operating Profit Ratio: .004 0.012628 0.02 0.002 0 2011 2010 2009 2008 2007 BPCl 13.01 0.01025 0.014342 0.Operating ratio shows the operational efficiency of the business.008 0.012 0. 25 .016 0.005489 0.006 0. An operating ratio ranging between 75% and 80% is generally considered as standard for manufacturing concerns.018699 0.Net Profit Ratio 2011 2010 2009 2008 2007 0.

OCE should always be higher than the rate at which the company borrows.037924 0.045 0.04 0.03 0.02 0.025 0.031661 0. 26 . Return on Capital Employed: . otherwise any increase in borrowing will reduce shareholders' earnings.015 0.Here highest ROCE has been observed in the year 2007(0.039626 0.035 0.155) amongst all the years.005 0 2011 2010 2009 2008 2007 BPCL 14.  BPCL.034243 0.043537 0.05 0.01 0.Operating Profit Ratio 2011 2010 2009 2008 2007 0.

Return on Net worth Capital: .18 0.1 0.04 0.03) 27 .095169 0.06 0.095672 0.A measure of how effectively a company uses the money (borrowed or owned) invested in its operations.106327 0.02 0 2011 2010 2009 2008 2007 BPCL 15.Return on Capital Employed 2011 2010 2009 2008 2007 0.16 0.08 0.12 0.Here we see that almost a steady return with less fluctuation has been observed except the year 2009(2.14 0.156362 0.122433 0.  BPCL.

Returns between 15-20 % are considered satisfactory.Return on Net Worth Capital 2011 2010 2009 2008 2007 4.Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.278033 4. Return On Equity: .993832 6 5 4 3 2 1 0 2011 2010 2009 2008 2007 BPCL 16. 28 .371743 4.252973 2.035459 4.

17574 0.110024 0.135359 0.02 0 2011 2010 2009 2008 2007 BPCl 29 .08 0.It is obtained in the year 2007(17%) where as a dissatisfactory result has been viewed in the year 2009(6%) Return on Equity 2011 2010 2009 2008 2007 0.04 0.1 0.06 0.060677 0.18 0.12 0. BPCL.2 0.117495 0.14 0.16 0.

28936 12.504) which means people were expecting a greater return in the future. P/E Ratio: . P/E Ratio 2011 2010 2009 2008 2007 14.A valuation ratio of a company's current share price compared to its per-share earnings.17.50453 9.  BPCL.Here we see highest ratio has been obtained in the year 2009(18.052502 20 18 16 14 12 10 BPCL 8 6 4 2 0 2011 2010 2009 2008 2007 30 . a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E ratio. In general.14922 18.407058 6.

ANALYSIS OF FUNDS FLOW STATEMENT Funds flow statement is useful for long term analysis. there is a net decrease in the working capital from 2010 to 2011. The funds flow statement prepared in advance gives a clear cut direction to the management in this regard. Why is the concern financially solid in spite of losses? 2. or else drastically reducing its current liabilities. creditors. brokers etc. 3. The funds flow statement analysis helps the management to test whether the working capital has been effectively used or not and whether the working capital has been effectively used or not and whether the working capital level is adequate or inadequate for the requirement of business. 31 . shareholders. the company is investing heavily in its current assets. Where have the profit gone? b. The optimal utilization of available funds is necessary for the overall growth of the company. 1. But. there has been a greater proportion of increase in the current liabilities . Why there is an imbalance existing between liquidity position and profitability position of the company? c.  In case of BPCL we can observe that there is an increase in the current assets from 2010 to 2011 and this led to an increase in the working capital. The fund flow statement helps in answering the following question: a. A projected funds flow statement can be prepared and resources can be properly allocated after an analysis of the present state of affairs.Therefore.  The net decrease in the working capital means i.e. Such an analysis is of great help to management. when changes in working capital is negative.

32 2.08 12.605.27 32 .42 379.36 8.9 2011 2010 change Current Liabilities Provisions Total Current Liabilities 18.68 342.73 -589.22 1.580.15 -4237.375.788.028. It also indicates the credit worthiness of a company which helps the lenders to decide whether to lend money to the company or not.83 2.59 17131.93 3346.550.186.86 2. It helps management to take policy decisions and to decide about the financing policies and capital expenditure programmed for future.33 4021.17 0 Increase/Decrease in working capital -805.56 3.4.550.29 14.74 37. The funds flow statement analysis helps the investors to decide whether the company has managed funds properly.664.170. Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Current Liabilities 15.662.03 21958.97 9.44 -4827.03 23583. Statement of change in working Capital Particulars Current Assets.36 27.61 636.

77 Column1 506.84 Dividend paid 3187.24 131.27 Extraordinary item 3921.71 131.44 33 .84 Fund flows Application of Sources of funds Amount funds secured loans Investments Funds from operations Unsecued loans Capital WIP change in working cap 2123.8 Amount 6410.16 148.91 1591.52 gross block 805.44 TOTAL 10970.16 TOTAL 10970.8 3348.73 506.37 3348.44 1505.Funds from Operations Particulars Amount Reserves total add:depreciation div paid deferred tax Extraordinary item TOTAL 970.

34 . as the shareholders can expect higher share prices based on higher RoI of the company. can invest their money somewhere else. This is done for two reasons. It assumes that the investors are rational and riskaverse. if the company is not confident of generating more than market returns. it implies that the company does not have good investments and opportunities are not there to earn higher returns than available in the market. instead. The shareholders. various models have been developed that establish the relationship between dividends and stock prices. ANALYSIS OF THE GORDON MODEL This model supports the view that the dividend policy of a company has a bearing on its share valuation. ANALYSIS OF THE WALTER MODEL Every firm faces a situation where it has to decide whether to plough back profits and re-invest or distribute them to shareholders in the form of dividends. The optimal payout ratio of BPCL is increasing because as the rate of return is lesser than the cost of capital. the shareholders prefer early receipt of cash (liquidity preference theory) and second. Same thing is seen for previous years also. Over the years. It is not beneficial for the company as well as its shareholders to invest in new projects. the shareholders can invest this cash to generate more returns (since market returns are expected to be higher than returns generated by the company). it should pay out more dividends (or 100% dividends). One.DIVIDEND POLICY Essence of Dividend Policy: If the company is confident of generating more than market returns then only it should retain higher profits and pay less as dividends (or pay no dividends at all). However.

19% 13.73% 8.15 310.55 681. Walter Model Year 2011 Dividend Per Share 140.52948 20.73% 6. 8.79 35 .00 2008 40..78008 42. we can see that .19% < 13.00 2010 140. Conclusion: From our calculations and analysis.71717 49.BPCL(r<k i.73% 11.73%) is a Declining Firm.73% Market Price of share 597.00 2009 70.00 EPS Internal rate of return (r ) Cost Of equity(Ke) 42.55% 13. The optimal payout ratio of BPCL is increasing. So. it can be observed that when the return on investment is greater than the cost of capital.00 2007 160.73% 9.98 507.e.95% 13. then it makes sense to have a low retention ratio.93803 8. The reason being that the price of the share is arrived at by discounting the dividend income and if the future dividends are at stake for the investors as r<k. then there is an inverse relation between the value of a share and the pay-out ratio. the share price will be low but the investors are getting compensated through current income. Thus the investors will discount the income with a large factor and they will opt for the time value of money.35447 43.Based on the models assumptions.12 275.91% 13.26% 13.

39 889.64 31.26% 13.99 923.96 65.73% 8.73% Market Price of share 126.95% 13.766.78 2.04% 68% EPS Internal rate of return (r ) Cost Of equity(Ke) 42.596.00 34% 66% 2008 40.00 9.09 Profit Before Tax Tax Interest Internal rate of return ( r 2.065479 0.411.73% 6.18 1.73% 11.112622 36 .15% 91% 2007 160.00 33% 67% 2009 70.19% 13.089115 0.69 0.00 32.130.69 120.52948 20.166.081852 0.364.23 1.55 1.100.73% 9.93803 8.04 532.73 672.35447 43.71 495.GORDAN MODEL Year 2011 Dividend Per Share dividend pay out ratio Retention Ratio 140.7800773 42.21 158.91% 13.37 2.95 1.00 33% 67% 2010 140.47 2.099541 0.71717 49.002.55% 13.15 716.69 2.010.

71 145392.72 9735.47 889.A.30 110.37 495.A.94 121684.51 -2.78 716.53 3169.A.73 -11.A.A.A.68 49.75 EBIT EPS 3511.73 15.04 11. N.07 11329.71 16.25 -242.24 1537.85 Net Profit Interest Tax Fringe Benefit tax Deferred Tax 1546.50 42.13 134062.18 0.27 10895.95 1130.07 13. .00 148.86 43. Degree of Operating Leverage Degree of Financial Leverage Degree of Total Leverage 0.17 0.13 1580.78 3375.69 923.36 150900.Leverages Year 11-Mar 10-Mar 09-Mar 08-Mar 07-Mar Sales Turnover Excise Duty Net Sales 163218.88 -0.42 96556.08 20. N.73 26.69 13.13 107452.94 % change in EBIT % change in sales % change in EPS 4% 24% 1% 7% -9% 109% -3% 22% -53% -1% 14% -12% N. N.14 17.02 -0.47 37 -0.56 672.88 N.25 735.34 -0.35 3268.90 2166.62 1010.93 42.72 3299.85 131499.47 532.23 0.68 1100.00 -303.15 0.07 11475.21 12317. N.80 1805.94 110208.01 121764.

DOL is positive in rest of the years i. DFL A leverage ratio summarizing the affect a particular amount of financial leverage has on a company's earnings per share (EPS). means small fluctuations in output will produce large fluctuations in operating income. A large or positive DOL means increase in level of output will increase the level of operating income. all other things remaining the same. DOL is negative from 2008 to 2010. this means that it is less than its operating breakeven point. DTL By combining the degree of operating leverage with the degree of financial leverage we obtain the degree of total leverage (DTL). DFL is undefined at financial breakeven point. after measuring DOL at various levels of output. a small change in sales will lead to a large variability in EPS or we can say that it is the percentage change in net income that is associated with a given percentage change in sales. For BPCL. Financial leverage involves using fixed costs to finance the firm. all other things remaining the same. However. is greater than operating breakeven point.e. Each level of EBIT has a different DFL.DOL A type of leverage ratio summarizing the effect a particular amount of operating leverage has on a company's earnings before interest and taxes (EBIT). The higher the degree of operating leverage. (This does not imply that an increase in Q (sales) will lead to a decrease in EBIT). Operating leverage involves using a large proportion of fixed costs to variable costs in the operations of the firm. The higher the degree of financial leverage. BPCL is in good position. If a firm has a high amount of operating leverage and financial leverage. Investing in BPCL is a good option 38 . the more volatile the EBIT figure will be relative to a given change in sales. and will include higher expenses before interest and taxes (EBIT). where theoretically DOL is undefined at operating breakeven point. the more volatile EPS will be..

Earnings & efficiency in earnings. ROE represents the profitability of funds invested by the owners of the firm. Ability of your assets to be turned into profits.LEVERAGE This analysis technique is called the "DuPont Formula".TURNINGS 3. The DuPont Formula shows the interrelationship between key financial ratios.Du Pont Analysis The system identifies profitability as being impacted by three different levels: 1. Furthermore. 39 . Asset turnover ratio measures the efficiency with which a company deploys its assets to generate the sales. Profit After Tax / Profit Before Tax (tax burden) Profit Before Tax / Profit Before Interest Tax (interest burden) Profit Before Interest Tax / Sales (operating efficiency) Sales Assets / Assets (Asset t/o) / Equity (leverage) By using the DuPont equation. Operating efficiency says that efficiency of the company controlling the cost and expenses associated with the business.     Interest burden is high than we have to check the Debt is proper utilized in a company. Financial leverage. an analyst can easily determine what processes the company does well and what processes can be improved.EARNINGS 2.

1 13086.71 735.838563 0.99 1.39 11676.034173 8.244.159695 1.546.37 1002.023638748 9.79 0 904.86 672.39 1.511.090653885 1.62 16187.653697809 8.90 14003.794279963 0.110024314 0.65028018 0.95 2364.08 2166.23691134 0.151832 0.68 532.40 3.83 10273.117494771 0.21 3.242.69 2766.50 1010.27 12128.641469838 0.652503 0.029660788 0.54 PAT/PBT(taxburden) PBT/PBIT(int burden) PBIT/Sales(ope eff) Sales/Assets(aseet t/o) Assets/Equity(leverage) Return On Equity (ROE) 0.580.71 134062.203.805.33 0 1.169.62 121764.17574 40 .367.655.31640413 0.55 1.07 0 1.53 3.522330127 1.098.167.78 2411.94 4.686559812 0.11 110208.11 3.13 96556.573688146 1.075.027721497 8.299.85 5.733911101 0.32 3.56 4.82 0 1.154612714 0.617.68 17011.268.06067722 0.71 4.15 1.608752922 0.135358655 0.93 1100.56 14057.47 2596.537.Particulars \ Year 2011 2010 2009 2008 2007 Net Sales PBDIT Other Written Off Depreciation PBIT Interest PBT Reported Net Profit Average Assets Equity 150900.870488656 7.85 4.023273096 0.61 0 1.700503629 0.38 11833.375.47 12735.210130876 1.

794279963 2007 0.31640413 2008 0.838563133 41 .733911101 0.68655981 2010 0.PAT/PBT 2011 0.652503262 0.608752922 PBT/PBIT 2011 0.65028018 2009 2008 2007 0.70050363 2009 0.64146984 2010 0.

84 12.08 0 0 361.54 361.15 2.77 15701.57 12.41 22.54 15339.96 2.54 361.033.External Fund Requirement Balance Sheet (Rs in Crs) Year SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Minority Interest Secured Loans Unsecured Loans Total Debt Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 361.912.022.54 361.54 11.33 10.11 13.38 21.057.725.086.696.87 8.766.593.00 11.971.509.315.17 17.20 18.60 10.10 14.938.17 0 0 0 0 0 0 0 0 10.195.292.54 361.661.171.87 21248.71 14.829.28 12.751.730.273.62 0 0 0 0 0 4.30 11.676.128.49 42 .21 3.443.81 11.24 15.235.61 9.54 13.

4546 32854. Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances 21.64 0 29.49 36949.33 8.96 0.550.09 2984.55 342.334.75 2024.186.34 14935.90 0 1.012.84 6.26 10.299.23 13.93 22.823.32 6.664.58 12743.457.029.25 766.294.334.82 0 852.97 9.375.03 43 .22 33.92 12.661.102.533.36 17220.32 8.64 19.57 10288.61 1.72 2.318.501.33 25.08 1.54 11.38 13.21 18.699.532.83 0 0 646.078.52 35.037.90 6.476.09 17919.53 9.97 961.412.Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets.52 8.91 33.26 10.15 425.028.90 10.48 2.743.498.17 0 371.91 0 0 499.608.34 0 420.518.281.603.78 26.59 441.67 2.86 15.70 0 1.522.586.73 1.597.556.662.425.517.71 2.23 11.377.500.28 8.68 863.36 2.42 379.58 21.

59 21.452.580.647.78 2.007.81 3.48 -1.44 1.775.128.78 26.44 63605.680.94 15.44 2.96 -1128.32 3.20 -1.49 9.630.36 15.26 1.346.78 14.24 -859.699.67 63964.052.605.452.711.299.37 12.566.543.138.785.073.810.170.35 5.239.082.03 24593.18 1.831.288.87 623.583.86 19.78 5.75 2774.10 3.51 298.52 35.580.75 19.044.862.57 1.21 33.59 -1.16 303.66 2.24 1.74 25.43 28143.80 8.63 14.102.075.31 17.42 23.83 30918.712.51 6.15 1.16 986.53 11.060.481.281.457.707.78 12.81 1.903.131.93 27.647.273.3 21.Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities ToatlAssets Total Liabilities EFR 13.958.37 -1.382.95 -359.11 6.91 2.28 44 .029.54 33.75 1.32 3550.

If the company continues with its present debt with interest rate of 14. In forecasting the next year sales. JSW Steel reputation is high in the market and can draw cash at low cost (ke). One of the reason that company should go for the equity route because the company have 16474. the share capital is kept constant.e.Total EFR for BPCL is approx.28cr. a growth of 12% is considered here. As the company is already having high debt and raising the further debt would cost more i.30%. therefore. As the total sales expectation for the year 2012 is resulting it to be negative.64cr of debt and further debt would increase the cost of raising it. kd would be high because investor loses confidence in the company. The company should go for the equity route as further debt would increase the company’s liability and would need more cash in order to serve that debt’s interest. 45 . Rs -359.

42 11965.57 44418.05356147 17.41 361.983968685 14550.08 51817.33 0 43605.47 11118.28 4021.26008705 14.79 0 958.07 54.17 49832.98 0 6351.9 2329.62983913 3.2 361.28 15288. The financial statement Balance Sheet indicates the financial position as at the end of an accounting period .93 13669. In analyzing this way. figures of current year have to be compared with those of the previous years.18882539 Assets Current Assets Net Fixed Assets Other Assets Total 27605.47 4237.COMPARATIVE STATEMENTS Comparative Balance Sheet 2011 Liabilities and Capital Current Liabilities Long-term liabilities Share Capital Reserves Total 18788.56 0 9999.31 29.91 1985.88 17. Financial statements are presented as on a particular date for a particular period.86365791 4.04528745 0 17.16 23583.93 13669.52264454 0 7.08 30.79 0 27254.33 0 970.87 361. For this purpose.54 13696.78 2010 Change Per Cent Change 2010 2009 Change PerCent Change 14550.146809138 12.54 12725.21 8295.56 22195. But financial managers and top management are also interested in knowing whether the business is moving in a favourable or an unfavourable direction.54 11766.6 5414.39 3431.51 1703.83 15999.12417117 -14.54 12725.29 18971.56 22195.05052548 23583.2 361. comparative financial statements are prepared.17 49832.68816671 Comparative Financial Statement analysis provides information to assess the direction of change in the business.73 -3223.35 0 37253.835719492 0 8.69 1023. 46 .35 0 37253.87 21171.23692042 0 36.

00% 87.72 9735.70% 2.85 1754.45% 1.89 2800. This kind of analysis helps in identifying the major improvements and weaknesses.38 154649.01 121764.45 127777.71 2240. In this we can see that there has been a negative change in long term liabilities in year 2010-11 whereas.Comparative Financial Statement Analysis is also called as Horizontal analysis. which implies that company has taken less debt and hence is less leveraged. Also reserves are less in current year which shows that the reserves have been used either in paying off more dividend or other financing options available for the company.72% (in crores) 131499.63 100% 7. The Comparative Financial Statement provides information about two or more years' figures as well as any increase or decrease from the previous year's figure and it's percentage of increase or decrease. COMMON-SIZE STATEMENT Profit & Loss Account Mar '11 12 mths % as sales turnover Mar '10 12 mths % as sales turnover (in crores) Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost 163218.12 2139.00% 86. which means that accounts receivables are collected more and the company is more liquid in the current situation. it was positive in year 2009-10. Also current assets are reduced drastically from 54% to 17%.5 475.55% 92.40% 92.87% 97.18% 1.66 237.17% 0.45% 0.60% 1.75% 0.49 100% 7.08% 1.4 115001.29% 0.63% 47 .97 1993.2 140835.29% 1.21 12317 150900.22% 94.24 3772.

83 0.26 1130.00% 3.94% 1.35 0 149481.79% 0.30% 1.81 140 388.18 1537.87 0.00% 0.95% 0.11 3025.15 -131.01% 1.71 2478.23 1546.24% 4617.00% 0.87 1242.28% 48 .80% -0.97% 0.16 0 40.88% 0.32 2364.68 506.4 2411.95 716.09% 0.33 1281.8 2542.16 0 40.46% 0.00% 91.58 0.09% 1.67% 2.03% 0.Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Mar '11 12 mths Operating Profit Interest PBDT Depreciation Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Dividend Preference Dividend Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 870.31 3218.78 4066.49% 1.83 0 123159.51% 0.52 140 361.11% 0.66% 5167.33 1100.86% 1.08% 1.74% 0.58% Mar '10 12 mths 838.17% 0.97 0.03% 0.38% 0.82 1010.23 1917.77% 2.56% 0.31% 0.53% 1.00% 93.00% 3.55 1655.48% -0.55 -113.64% 2.17% 0.44% 0.95 3606.62 506.

Balance Sheet Mar '11 12 mths as % of total liabilities Mar '10 12 mths as % of total liabilities (in crores) Sources Of Funds Equity Share Capital Share Application Money Preference Share Capital Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Mar '11 12 mths Application Of Funds Gross Block Less: Accum.02% 0.23% 57.17 13669.21% 45.69% 66.00% 41.81% 40.07% 37.77 18971.45% 46.91 Mar '10 12 mths 1.00% 0.96 15375.33 22195.44% 100% (in crores) 361.00% 0.37% 48.91% 100% 29334.9 15999.15% 83.47% 42.36 23583.68 242. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets 361.23 13334.42 379.58% 25412.1 14938.09% 7.87 11751.62 4033.31% 62.23 11377.09% 29.33 1012.06% 34.97 27605.83 88.44% 3.86 2662.33 12028.54 0 0 12725.2 35281.54 0 0 13696.87 33029.60% 33.55% 8.56% 12.74% 7.09% 0.35 2517.28% 38.08 14057.07% 1.55% 0.52 11743.14% 38.27% 34.17 13086.84% 49 .71 10443.93 72.49 1.00% 36.75 13501.03% 33.08 2664.

82” to “5167.59 17131.60% 66.03 32133.31% 48.Loans and Advances Total CA.67% 8550. ability to meet short term obligation and liquidity position of the enterprise.88% 9. This reveals the efficiency of the firm in generating revenue which leads to profitability.15 6452.51 0 33029.23% 91.00% 27.56 2580. when other costs & expenses are reduced from sales figure of 100.00% 100. Thus from our common size income statement we can interpret that although our operating profit has been increased from “ 4617.29 3170. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets 9186.48 14550. Common size Balance Sheet: Common size balance sheet reveals the proportion of fixed assets to current assets.91 24.48% 17. the balance in figure is taken as net profit.96 1903.24% 56.29% 0.51%” to “3.36 36792.08% 5.10% 0.24% 7.78 0 35281.19 2060.44 Common Size Income Statement: In common size statements the sales figure is taken as 100 and all other figures of cost & expenses are expressed as percentage to sales.03 21958.81% 111.32 5647.91% Contingent Liabilities 9138.40% 41.96 8082. composition of fixed assets and current assets.00% 0.00% 22.2 18788.17%”. It highlights the long term health and solvency . proportion of long term funds to current liabilities and provisions . This reveals that the firm is not efficient in generation the revenues.39% 6.00% 0.56% 18.00% 100. 50 . composition of current liabilities etc.33” but the profit profit margin has decreased from “3.49 27.

The company return on equity has decreased from “0. 51 .117” to ” 0.110”.Production has increased because of increase in investment in fixed Assets and Raw material which has increased the overall productivity thus increases the overall profit from “4617.33” Company has improved its financial position since it has maintained the same equity level and reduced the total debt.82” to “5167.

2 90788.99 1519.9 101645.18 116747.92 2 252 479 2 3 Finished Goods conversion period Cost of goods sold 143318.2 112995.18 2 352 485.4 101166.47 10 9 4 14 6 2 Work-in-process conversion period Cost of production Cost of production per day Work-in-process inventory work in process inventory holding days 145066.33 2745.52 1 281 565.63 3757.3 388 316 124043 99286.88 1457.58 52 .96 345 276 248 2010 2009 2008 2007 4009.16 113775.6 90598.5 126849.WORKING CAPITAL 2011 1 Raw material conversion period Raw material consumption Raw material consumption per day Raw material inventory Raw material inventory holding days 139572.3 128344.25 3 324 728.44 403 1031.15 89147.

4 93659.77 391 319 338 282 246 10939.68 1425.61 1518.88 117938.7 101586.73 6 8 4 6 6 5 Creditors Deferral Period Credit purchases Purchases per day Creditors Creditors outstanding days 140835.71 28 26 18 31 24 53 .49 25 27 4631.Cost of goods sold per day Finished goods inventory Finished goods inventory holding day 398 314 357 282 252 10131.817.67 1608.4 133605.7 121804.47.78 6606.35 5958.47 8359.6 88593.42 2662.8 105061.3 6126.74 411 328 371 292 260 2664.47 8383.19 13 22 26 4 Collection Period Credit sales Sales per day Debtors Debtors outstanding days 1.5 115001.58 8651.97 6214.

this means that the company was able to manage its total cost in maintaining the inventory. of 4 days as compared to other years.Gross Operating Cycle 1 Inventory Conversion Period raw material work-in -process finished goods 38 2 Debtors collection period 3 Gross Operating Cycle 4 Creditors Payment Period 5 Net Operating cycle 6 44 28 16 38 8 46 26 20 19 4 23 18 5 37 6 43 31 12 34 6 40 24 16 Raw material Conversion Raw material conversion period was lowest in the year 2009. 54 . ordering cost. which includes carrying cost. it was of 14 days. i. the company could easily manage ita raw material conversion period. and the cost occurred due to obscolecense and we can easily say that. Whereas in 2008.e.

i.adding in capacity.e.e. In 2010. i.of days are in the year 2011. From this we can conclude that that the company have enough liquidity with it as it will easily receive its account receivables and can use it somewhere else. i.e. 18 days and max. the debtor collection period was of 4 days. large collection period is preferable as we have to pay after long period of time and we can have the liquidity for larger period. In 2008 . i. Debtor collection In 2009. which is lowest as compared to the other 4 years. Finished goods The conversion period was lowest in the year 2009. so the company needs to look after the following issues like techonological revamping increase investment . of 31 days.27 days it means 2009 was best as Fixed Goods were easily converted into sales which shows that the company was efficient in forecasting its projected demand and to have adequate inventory with them so as not to loose customers to competitors.e. i. etc. One reason could be a conscious policy decision to avoid stock out situation and carrying more finished good inventory to expand sales. 13 days and maximum in the year 2010. the highest no. This also shows that the inventory conversion period was also as company could easily generate sales. Inventory Conversion period 55 . cash was reliased a little later which can cause a problem in the working capital management of the company. For a company.Work-in-process The least work-in-process period was in year 2009 this means that the company ws very efficient in utilising its raw material in the manufacturing process. it was maximum of 8 days. Creditors Collection Period It was minimum in 2009.e. Since.

the more its good for the company as it saves costs on number of factors and we can see that in 2009.The lesser the inventory conversion period. This shows that company could easily manage its operation in 2010. 56 . Thus improvising their operations reducing cost of production and ultimately having a competitive edge. it was minimum of 19 days as compared to 31 days in 2011. Net Operating cycle Net Operating cycle was lowest in the year 2009 which means that the company was doing fairly well even by locking up of less inventory which is a good cost cutting measure.

87 11.41 33.17 15.28 10.829.443.00 0.029.971.30 0.54 361.54 0.315.086. Cr.00 10.54 0.273.87 33.730.00 13.696.52 Mar '09 12 mths 57 ------------------.38 26.00 0.54 361.128.24 21.00 12.33 22.509.54 0.22 Mar '08 12 mths 361.281.699.938. ------------------Mar '08 Mar '07 12 months Mar '10 12 months Mar '09 12 months 12 months 361.49 Mar '11 12 mths 361.033.57 0.00 0.78 Mar '07 12 mths .62 4.00 12.in Rs.00 11.00 0.235.96 8.00 14.08 0.00 9.00 11.21 12.91 Mar '10 12 mths 361.54 361.77 18.299.54 0.60 17.00 13.725.912.766.022.195.292.00 0.ANNEXURS Balance Sheet of Bharat Petroleum Corporation Mar '11 12 months Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 361.057.00 11.171.54 361.102.54 361.11 3.17 0.10 14.751.00 0.84 2.593.81 21.20 35.676.54 0.661.71 10.54 2.

44 14.07 12.90 15.518.476.029.517.93 25.00 11.49 0.281.26 11.894.75 12.694.201.00 33.00 12.957.Application Of Funds Gross Block Less: Accum.97 361.661.21 8.96 15.23 13.556.999.26 1.43 15.84 1.662.043.04 3.63 6.05 11.82 25.12 0.981.032.53 10.76 3.608.49 9.32 12.076.06 0.33 1.54 11.522.664.44 1.49 3.52 11.67 440.018.71 9.412.239.365.841.42 8.03 24.639.91 14.01 10.382.334.83 0.97 22.51 4.690.712.97 19.58 8.48 16.418.173.881.04 0.669.699.743.584.00 15.61 335.95 0.44 0.425.823.91 9. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.580.61 960.00 16.971.603.86 2.862.18 0.037.00 35.715.15 16.42 379.35 2.92 1.797.08 2.943.93 17.94 388.19 6.02 0.275.62 284.928.67 766.45 21.965.62 8.68 341.94 28.299.67 13.454.358.97 0.39 0.102.53 10.33 10.658.12 2.581.73 863.36 986.68 1.797.30 0.00 33.22 0.457.16 58 .590.49 0.334.79 2.92 20.97 10.377.17 13.23 322.04 2.532.37 1.59 19.12 7.34 7.848.00 20.00 21.170.883.385.034.93 9.028.52 4.375.03 18.968.981.605.500.05 852. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 29.52 5.893.22 5.012.34 0.00 26.23 11.379.083.

141.26 107.575.056.42 131.802.07 11.75 1.33 0.64 1.54 2.57 823.43 -298. ------------------Mar '10 12 months Mar '09 12 months Mar '08 12 months Mar '07 12 months 163.05 154.17 1.64 134.335.09 2.99 205.218.318.00 88.208.684.392.81 11.989.321.45 97.08 1.81 121.88 347.003.397.04 2.72 3.63 -392.190.94 110.217.186.907.12 384.34 0.743.85 410.00 .10 3.03 145.29 113.499.073.03 475.21 229.70 243.745.07 11.Profit & Loss account of Bharat Petroleum Corporation Mar '11 12 months Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised 141.88 132.13 1.in Rs.870.85 550.19 66.73 120.452.29 67.884.028.42 96.00 59 ------------------.091.00 121.03 150.365.36 12.23 0.89 2.215.54 1.99 61.03 796.50 110.895.297.13 3.31 620.95 888.475.331.556.03 237.282.198.884.33 1.508.12 2.27 10. Cr.838.313.85 125.61 0.74 -1.43 2.380.00 101.46 0.991.

99 -2.97 997.075.150.242.540.90 5.098.010.00 253.42 49.59 672.242.570.590.537.674.100.28 Mar '10 12 mths 3.63 4.47 3.68 0.615.32 0.40 0.92 Mar '09 12 mths 4.00 2.89 2.33 1.00 506.77 Mar '11 12 mths 120.664.887.16 71.02 261.510.00 2.87 1.00 284.21 0.00 2.33 -126.35 3.67 Mar '08 12 mths 3.16 93.241.83 955.12 1.47 247.50 2.00 335.91 118.471.11 0.00 361.48 -60.791.730.35 70.97 3.87 Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 3.920.48 4.74 0.580.355.42 42.62 6.831.00 506.45 106.075.322.79 477.615.615.421.00 2.615.62 9.25 0.42 20.361.32 0.75 1.956.12 735.77 127.63 0.268.44 904.722.53 140.615.97 3.78 140.08 3.546.65 4.965.82 60 3.00 999.45 3.42 43.56 1.24 1.166.80 4.61 4.663.08 31.50 Mar '07 12 mths 3.760.838.010.484.37 2.52 1.95 3.075.00 1.96 4.42 42.299.78 3.68 8.47 91.00 322.80 1.53 0.16 72.75 1.92 776.00 388.00 578.45 2.72 40.56 4.65 1.00 144.044.11 2.16 .383.717.65 2.Total Expenses 149.94 160.655.37 823.805.

73 -11139.32 -5981.95 4646.11 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 2422.65 -1576.74 4206.40 Mar '08 12 mths 2471.43 652.00 -1817.57 6212. ------------------Mar '11 12 mths Mar '10 12 mths 2421.00 3016.34 -9908.48 -1515.95 -197.40 -16446.03 -13429.56 -7805.75 -2285.03 Mar '09 12 mths 1017.74 -3334.11 -11139.09 675.37 -17121.31 -16446.65 -5899.67 -17121.13 -3553.52 -7805.31 627.Cash Flow of Bharat Petroleum Corporation ------------------.59 -6228.67 Mar '07 12 mths 2887.60 -323.72 61 .15 1538.91 417.in Rs. Cr.

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com www.Wikipedia.Moneycontrol.oilrefiniries.com Corporate Finance by Ross Westerfield Jess 64 .BIBLIOGRAPHY       Annual Report of BPCL www.com http://www.capitaline.com www.