Analysis for Reliance Indus

Limited
2003- 2009

Contents of the spreadsheet

Balance Sheet
Profit and loss account
Yearly and trend analysis
Ratio analysis
Comments
 ance Industries
ited
2009
Submitted to:
Dr. Karamjeet Singh

Submitted by:
Name Rajat Singla
Roll No. 21
Class MBA GEN -A
IInd Semester
Date of Submission:
08.03.2010
 Reliance Industries Limited
Balance Sheet All in Rs. Cr.

Year Ending Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Sources Of Funds
Total Share Capital 1,395.92 1,395.95 1,393.09 1,393.17 1,393.21 1,453.39 1,573.53
Equity Share Capital 1,395.92 1,395.95 1,393.09 1,393.17 1,393.21 1,453.39 1,573.53
Share Application Money 0 0 0 0 60.14 1,682.40 69.25
Preference Share Capital 0 0 0 0 0 0 0
Reserves 26,242.68 30,322.97 36,280.35 43,760.90 59,861.81 77,441.55 112,945.44
Revaluation Reserves 2,735.81 2,733.53 2,729.88 4,650.19 2,651.97 871.26 11,784.75
Networth 30,374.41 34,452.45 40,403.32 49,804.26 63,967.13 81,448.60 126,372.97
Secured Loans 11,776.86 11,451.14 7,972.90 7,664.90 9,569.12 6,600.17 10,697.92
Unsecured Loans 7,981.45 9,493.52 10,811.69 14,200.71 18,256.61 29,879.51 63,206.56
Total Debt 19,758.31 20,944.66 18,784.59 21,865.61 27,825.73 36,479.68 73,904.48
Total Liabilities 50,132.72 55,397.11 59,187.91 71,669.87 91,792.86 117,928.28 200,277.45

Year Ending Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Application Of Funds
Gross Block 50,552.99 53,502.91 55,125.82 84,970.13 99,532.77 104,229.10 149,628.70
Less: Accum. Depreciation 18,461.16 21,713.74 24,872.83 29,253.38 35,872.31 42,345.47 49,285.64
Net Block 32,091.83 31,789.17 30,252.99 55,716.75 63,660.46 61,883.63 100,343.06
Capital Work in Progress 1,994.44 3,356.81 4,829.29 6,957.79 7,528.13 23,005.84 69,043.83
Investments 6,722.72 13,971.40 17,051.46 5,846.18 16,251.34 20,516.11 20,268.18
Inventories 7,510.41 7,231.22 7,412.88 10,119.82 12,136.51 14,247.54 14,836.72
Sundry Debtors 2,975.49 3,189.93 3,927.81 4,163.62 3,732.42 6,227.58 4,571.38
Cash and Bank Balance 136.53 208.77 384.51 239.31 308.35 217.79 500.13
Total Current Assets 10,622.43 10,629.92 11,725.20 14,522.75 16,177.28 20,692.91 19,908.23
Loans and Advances 12,566.03 12,400.97 13,869.67 8,266.55 12,506.71 18,441.20 13,375.15
Fixed Deposits 10.68 15.47 3,224.28 1,906.85 1,527.00 5,609.75 23,014.71
Total CA, Loans & Advances 23,199.14 23,046.36 28,819.15 24,696.15 30,210.99 44,743.86 56,298.09
Deffered Credit 0 0 0 0 0 0 0
Current Liabilities 12,446.83 14,095.88 17,917.41 17,656.02 24,145.19 29,228.54 42,664.81
Provisions 1,475.73 2,670.75 3,847.57 3,890.98 1,712.87 2,992.62 3,010.90
Total CL & Provisions 13,922.56 16,766.63 21,764.98 21,547.00 25,858.06 32,221.16 45,675.71
Net Current Assets 9,276.58 6,279.73 7,054.17 3,149.15 4,352.93 12,522.70 10,622.38
Miscellaneous Expenses 47.15 0 0 0 0 0 0
Total Assets 50,132.72 55,397.11 59,187.91 71,669.87 91,792.86 117,928.28 200,277.45

Contingent Liabilities 12,802.00 8,559.77 6,579.47 24,897.66 46,767.18 37,157.61 36,432.69

Book Value (Rs) 197.93 227.15 270.35 324.03 439.57 542.74 727.66
 Reliance Industries Limited
Profit & Loss account

Year Ending Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

Income
Sales Turnover 50,095.81 56,247.03 73,164.10 89,124.46 118,353.71 139,269.46
Excise Duty 4,391.62 4,397.40 7,245.27 8,246.67 6,654.68 5,463.68
Net Sales 45,704.19 51,849.63 65,918.83 80,877.79 111,699.03 133,805.78
Other Income 1,135.76 1,384.61 1,573.70 546.96 236.89 6,595.66
Stock Adjustments 2,435.49 -605.41 -524.35 2,131.19 654.6 -1,867.16
Total Income 49,275.44 52,628.83 66,968.18 83,555.94 112,590.52 138,534.28
Expenditure
Raw Materials 35,413.02 35,984.76 47,418.04 59,739.29 80,791.65 98,832.14
Power & Fuel Cost 719.4 725.15 907.94 1,146.26 2,261.69 2,052.84
Employee Cost 651.73 804.75 846.4 978.45 2,094.09 2,119.33
Other Manufacturing Expenses 252.36 323.4 303.97 668.31 1,112.17 715.19
Selling and Admin Expenses 2,584.82 3,406.76 3,000.27 5,872.33 5,478.10 5,549.40
Miscellaneous Expenses 251.7 411.88 217.3 300.74 321.23 412.66
Preoperative Exp Capitalised -4 -26.43 -9.6 -155.14 -111.21 -175.46
Total Expenses 39,869.03 41,630.27 52,684.32 68,550.24 91,947.72 109,506.10

Year Ending Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

Operating Profit 8,270.65 9,613.95 12,710.16 14,458.74 20,405.91 22,432.52

PBDIT 9,406.41 10,998.56 14,283.86 15,005.70 20,642.80 29,028.18
Interest 1,570.96 1,443.40 1,486.54 893.61 1,298.90 1,162.90
PBDT 7,835.45 9,555.16 12,797.32 14,112.09 19,343.90 27,865.28
Depreciation 3,452.79 3,331.39 3,784.57 3,400.91 4,815.15 4,847.14
Other Written Off 0 0 0 0 0 0
Profit Before Tax 4,382.66 6,223.77 9,012.75 10,711.18 14,528.75 23,018.14
Extra-ordinary items 0 -13.03 -1.31 0.88 0.51 48.1
PBT (Post Extra-ord Items) 4,382.66 6,210.74 9,011.44 10,712.06 14,529.26 23,066.24
Tax 875.9 1,148.00 1,505.00 1,642.72 2,585.35 3,559.85
Reported Net Profit 4,104.31 5,160.14 7,571.68 9,069.34 11,943.40 19,458.29
Total Value Addition 4,456.01 5,645.51 5,266.28 8,810.95 11,156.07 10,673.96
Preference Dividend 20.08 0 0 0 0 0
Equity Dividend 698.19 733.1 1,045.13 1,393.51 1,440.44 1,631.24
Corporate Dividend Tax 89.46 91.64 146.58 195.44 202.02 277.23

Per share data (annualised)

Shares in issue (lakhs) 13,963.78 13,963.78 13,935.08 13,935.08 13,935.08 14,536.49
Earning Per Share (Rs) 29.25 36.95 54.34 65.08 85.71 133.86
Equity Dividend (%) 50 52.5 75 100 110 130
Book Value (Rs) 197.93 227.15 270.35 324.03 439.57 542.74
All in Rs. Cr.

Mar '09

146,328.07
4,369.07
141,959.00
1,264.03
427.56
143,650.59

109,284.34
3,355.98
2,397.50
1,162.98
4,736.60
562.42
-3,265.65
118,234.17

Mar '09

24,152.39
25,416.42
1,774.47
23,641.95
5,195.29
0
18,446.66
0
18,446.66
3,137.34
15,309.32
8,949.83
0
1,897.05
322.4

15,737.98
97.28
130
727.66
 Reliance Industries Limited

RATIOS ARE CALCULATED FOR 7 YEARS

Current Ratio
YEAR Current Asset Current Liabilities Current Ratio
2002-03 22357.12 10395.72 2.15
2003-04 22040.05 12285.5 1.79
2004-05 28452.51 17131.52 1.66
2005-06 24574.45 16454.48 1.49
2006-07 29913.35 18578.4 1.61
2007-08 42885.84 24038.09 1.78
2008-09 54712.27 35701.9 1.53

Quick Ratio
YEAR Quick Asset Current Liabilities Quick Ratio
2002-03 14846.71 10395.72 1.43
2003-04 14808.83 12285.5 1.21
2004-05 21039.63 17131.52 1.23
2005-06 14454.63 16454.48 0.88
2006-07 17776.84 18578.4 0.96
2007-08 28638.3 24038.09 1.19
2008-09 39875.55 35701.9 1.12

Absolute Ratio
YEAR Cash Marketable Securities Current Liabilities
2002-03 147.21 536.19 10395.72
2003-04 224.24 536.11 12285.5
2004-05 3608.79 3469.03 17131.52
2005-06 2146.16 523.58 16454.48
2006-07 1835.35 6813.14 18578.4
2007-08 4280.05 9316.85 24038.09
2008-09 22176.53 2678.84 35701.9

Debtors Turnover Ratio & Average Collection Period

YEAR Opening Debtors Closing Debtors Sales
2002-03 2722.46 2998.11 45,897.79
2003-04 2998.11 3046.38 51,801.53
2004-05 3046.38 3927.81 66,051.30
2005-06 3927.81 4163.62 81,211.33
2006-07 4163.62 3732.42 111,692.72
2007-08 3732.42 6227.58 133,443.00
2008-09 6227.58 4571.38 141,847.47

Creditors Turnover Ratio & Average Payment Period

Year Opening Creditors Closing Creditors Purchases
2002-03 6,472.29 9,490.89 3420.75
2003-04 9,490.89 11,312.32 2218.28
2004-05 11,312.32 13,659.72 2356.55
2005-06 13,659.72 12,563.50 2516.13
2006-07 12,563.50 16,865.53 1821.28
2007-08 16,865.53 21,045.47 6,007.71
2008-09 21,045.47 32,691.00 2,205.27

Inventory Turnover Ratio & Inventory Period

YEAR Opening Stock Closing Stock Net Sales
2002-03 4974.07 7501.41 45,897.79
2003-04 7501.41 7231.22 51,801.53
2004-05 7231.22 7412.88 66,051.30
2005-06 7412.88 10119.82 81,211.33
2006-07 10119.82 12136.51 111,692.72
2007-08 12136.51 14247.54 133,443.00
2008-09 14247.54 14,836.72 141,847.47

ASSET TURNOVER RATIO

YEAR Total Asset Sales Asset Turnover Ratio
2002-03 63,166.11 45,897.79 0.73
2003-04 71,157.43 51,801.53 0.73
2004-05 80,586.25 66,051.30 0.82
2005-06 93,095.17 81,211.33 0.87
2006-07 117,353.28 111,692.72 0.95
2007-08 149,838.91 133,443.00 0.89
2008-09 245705.65 141,847.47 0.58
WORKING CAPITAL TURNOVER RATIO
YEAR Net Working Capital Sales Working Capital TR
2002-03 11961.4 45,897.79 3.84
2003-04 9754.55 51,801.53 5.31
2004-05 11320.99 66,051.30 5.83
2005-06 8119.97 81,211.33 10.00
2006-07 11334.95 111,692.72 9.85
2007-08 18847.75 133,443.00 7.08
2008-09 19010.37 141,847.47 7.46

LIQUIDITY RATIOS - CONSOLIDATED

YEAR Current Ratio Quick Ratio Absolute Ratio
2002-03 2.15 1.43 0.07
2003-04 1.79 1.21 0.06
2004-05 1.66 1.23 0.41
2005-06 1.49 0.88 0.16
2006-07 1.61 0.96 0.47
2007-08 1.78 1.19 0.57
2008-09 1.53 1.12 0.70

DEBT TO EQUITY RATIO

YEAR Debt Equity DE Ratio
2002-03 19758.31 30374.41 0.65
2003-04 20944.66 34452.45 0.61
2004-05 18784.59 40403.32 0.46
2005-06 21865.61 49804.26 0.44
2006-07 27825.73 63967.13 0.44
2007-08 36,479.68 81,448.60 0.45
2008-09 73,904.48 126372.97 0.58

INTEREST COVERAGE RATIO

YEAR Interest PBIT IC Ratio
2002-03 1555.16 6529.37 4.20
2003-04 1434.72 7735.86 5.39
2004-05 1468.66 10537.34 7.17
2005-06 877.04 11581.1 13.20
2006-07 1188.89 15709.36 13.21
2007-08 1077.36 24087.5 22.36
2008-09 1,745.23 20178.46 11.56

CAPITAL STRUCTURE RATIOS - CONSOLIDATED

Year Debt to Equity Ratio Interest Coverage Ratio
2002-03 0.65 4.20
2003-04 0.61 5.39
2004-05 0.46 7.17
2005-06 0.44 13.20
2006-07 0.44 13.21
2007-08 0.45 22.36
2008-09 0.58 11.56
GROSS PROFIT RATIO
YEAR Gross Profit Sales GP Ratio
2002-03 9366.46 45,897.79 20.41
2003-04 10982.88 51,801.53 21.20
2004-05 14260.84 66,051.30 21.59
2005-06 14982.01 81,211.33 18.45
2006-07 20524.51 111,692.72 18.38
2007-08 28935.87 133,443.00 21.68
2008-09 25373.75 141,847.47 17.89

NET PROFIT RATIO

YEAR Net Profit Sales NP Ratio
2002-03 4974.21 45,897.79 10.84
2003-04 6301.14 51,801.53 12.16
2004-05 9068.68 66,051.30 13.73
2005-06 10704.06 81,211.33 13.18
2006-07 14520.47 111,692.72 13.00
2007-08 23010.14 133,443.00 17.24
2008-09 18,433.23 141,847.47 13.00

PROFIT MARGIN
YEAR PAT Sales Profit Margin
2002-03 4104.31 45,897.79 8.94
2003-04 5160.14 51,801.53 9.96
2004-05 7571.68 66,051.30 11.46
2005-06 9069.34 81,211.33 11.17
2006-07 11943.4 111,692.72 10.69
2007-08 19458.29 133,443.00 14.58
2008-09 15,309.32 141,847.47 10.79

RETURN ON EQUITY
YEAR PAT Equity ROE
2002-03 4104.31 30374.41 13.51
2003-04 5160.14 34452.45 14.98
2004-05 7571.68 40403.32 18.74
2005-06 9069.34 49804.26 18.21
2006-07 11943.4 63967.13 18.67
2007-08 19458.29 81448.6 23.89
2008-09 15,309.32 126,372.97 12.11

RETURN ON CAPITAL EMPLOYED

YEAR PBIT Capital Exp ROCE
2002-03 6529.37 63737.01 10.24
2003-04 7735.86 71827.15 10.77
2004-05 10537.34 80586.25 13.08
2005-06 11581.1 93095.17 12.44
2006-07 15709.36 117353.28 13.39
2007-08 24087.5 149838.91 16.08
2008-09 20178.46 156638.65 12.88
PROFITABILITY RATIO - CONSOLIDATED
YEAR GROSS PROFIT NET PROFIT PROFIT MARGIN
2002-03 20.41 10.84 8.94
2003-04 21.20 12.16 9.96
2004-05 21.59 13.73 11.46
2005-06 18.45 13.18 11.17
2006-07 18.38 13.00 10.69
2007-08 21.68 17.24 14.58
2008-09 17.89 13.00 10.79

Earning Per Share

Year PAT No. Of Shares EPS
2002-03 4104.31 1,396,377,536 29.39
2003-04 5160.14 1,396,377,536 36.95
2004-05 7571.68 1,393,508,041 54.34
2005-06 9069.34 1,393,508,041 65.08
2006-07 11943.4 1,393,508,041 85.71
2007-08 19458.29 1,453,648,601 133.86
2008-09 15,309.32 1,573,798,233 97.28

Price Earning ratio

Year Year end Avg Market PrEPS P/E Ratio
2002-03 287.65 29.39 9.79
2003-04 552.63 36.95 14.96
2004-05 569.95 54.34 10.49
2005-06 755.05 65.08 11.60
2006-07 1316 85.71 15.35
2007-08 2274.2 133.86 16.99
2008-09 1349.35 97.28 13.87

Price to Book ratio

Year Market Price Book Value Price/Book Ratio
2002-03 287.65 217.52 1.32
2003-04 552.63 246.73 2.24
2004-05 569.95 289.94 1.97
2005-06 755.05 357.4 2.11
2006-07 1316 440 2.99
2007-08 2274.2 560.3 4.06
2008-09 1349.35 802.98 1.68

CAPITAL MARKET RATIOS – CONSOLIDATED

YEAR EPS PE RATIO PRICE TO BOOK RATIO
2002-03 29.39 9.79 1.32
2003-04 36.95 14.96 2.24
2004-05 54.34 10.49 1.97
2005-06 65.08 11.60 2.11
2006-07 85.71 15.35 2.99
2007-08 133.86 16.99 4.06
2008-09 97.28 13.87 1.68
e Industries Limited

RE CALCULATED FOR 7 YEARS

Current Ratio
2.50

2.00

1.50
C
R
1.00

0.50

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Quick Ratio
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Absolute Ratio Absolute Ratio

0.80

0.70

0.60
 Absolute Ratio
0.07 0.80
0.06
0.70
0.41
0.16 0.60
0.47
0.50
0.57
0.70 0.40

0.30

0.20

0.10

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008

ollection Period 30.00

DTR Collection Period
16.05 22.75 25.00
17.14 21.30
18.94 19.27 20.00
20.07 18.18
28.29 12.90 15.00
26.80 13.62
26.27 13.89
10.00

5.00

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-0

CTR Payment Period CTR

0.43 851.65 0.50
0.21 1711.50 0.45
0.19 1933.93 0.40
0.19 1902.02 0.35
0.12 2948.91 0.30
0.25
0.20
0.15
 0.45
0.40
0.35
0.30
0.32 1151.65
0.25
0.08 4447.03
0.20
0.15
0.10
0.05
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-0

ITR Inventory Period ITR

7.36 49.61 12.00
7.03 51.90
9.02 40.46 10.00
9.26 39.40
10.04 36.37 8.00
10.12 36.08
6.00
9.75 37.42
4.00

2.00

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Asset Turnover Ratio

1.00
0.90
0.80
0.70
0.60
0.50 Asset Turnover
Ratio
0.40
0.30
0.20
0.10
0.00
 0.60
0.50 Asset Turnover
Ratio
0.40
0.30
0.20
0.10
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

12.00 Working Capital TR

10.00

8.00

6.00 Working Capital

TR
4.00

2.00

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

DTR Collection Period CTR Payment Period ITR Inventory Period

16.05 22.75 0.43 851.65 7.36 49.61
17.14 21.30 0.21 1711.50 7.03 51.90
18.94 19.27 0.19 1933.93 9.02 40.46
20.07 18.18 0.19 1902.02 9.26 39.40
28.29 12.90 0.12 2948.91 10.04 36.37
26.80 13.62 0.32 1151.65 10.12 36.08
26.27 13.89 0.08 4447.03 9.75 37.42

DE Ratio
0.70

0.60

0.50
 DE Ratio
0.70

0.60

0.50

0.40
DE
0.30 Ratio

0.20

0.10

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

IC Ratio
25.00

20.00

15.00
IC
Ratio
10.00

5.00

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
 GP Ratio
25.00

20.00

15.00
GP
Ratio
10.00

5.00

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

NP Ratio
20.00
18.00
16.00
14.00
12.00
10.00 NP
Ratio
8.00
6.00
4.00
2.00
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Profit Margin
16.00
14.00
12.00
10.00
8.00 Profit Margin
6.00
16.00
14.00
12.00
10.00
8.00 Profit Margin
6.00
4.00
2.00
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

ROE
30.00

25.00

20.00

15.00 RO
E
10.00

5.00

0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

ROCE
18.00
16.00
14.00
12.00
10.00
ROC
8.00 E
6.00
4.00
2.00
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
 4.00
2.00
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

RETURN ON EQUITY RETURN ON CAPITAL

13.51 10.24
14.98 10.77
18.74 13.08
18.21 12.44
18.67 13.39
23.89 16.08
12.11 12.88

EPS
160.00
140.00
120.00
100.00
80.00 EP
S
60.00
40.00
20.00
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

P/E Ratio
18.00
16.00
14.00
12.00
10.00
P/E
8.00 Ratio

6.00
4.00
14.00
12.00
10.00
P/E
8.00 Ratio

6.00
4.00
2.00
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Price/Book Ratio
4.50
4.00
3.50
3.00
2.50
Price/Book
2.00 Ratio
1.50
1.00
0.50
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
 Current
Ratio

07-08 2008-09

Quick
Ratio

2007-08 2008-09

ute Ratio
ute Ratio

Absolute
Ratio

2006-07 2007-08 2008-09

DTR
Collection
Period

2005-06 2006-07 2007-08 2008-09

CTR 5000.00 Payment Period

4500.00
4000.00
3500.00
3000.00
CT
R 2500.00
2000.00
1500.00
 4000.00
3500.00
3000.00
CT
R 2500.00
2000.00
1500.00
1000.00
500.00
2005-06 2006-07 2007-08 2008-09
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-0

ITR Inventory Period

60.00

50.00

40.00

IT 30.00
R
20.00

10.00

0.00
005-06 2006-07 2007-08 2008-09 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-

Asset Turnover
Ratio
 Asset Turnover
Ratio

orking Capital

Asset Turnover Ratio Working Capital TR.

0.73 3.84
0.73 5.31
0.82 5.83
0.87 10.00
0.95 9.85
0.89 7.08
0.58 7.46
 DE
Ratio

08-09

IC
Ratio
 GP
Ratio

NP
Ratio

Profit Margin
Profit Margin

RO
E

-09

ROC
E
 EP
S

08-09

P/E
Ratio
 P/E
Ratio

08-09

Price/Book
Ratio
yment Period

Payment
Period
 Payment
Period

05-06 2006-07 2007-08 2008-09

ventory Period

Inventory Period

5-06 2006-07 2007-08 2008-09

 Reliance Industries Lim

INTERPRETATION OF RATIOS
1) Current Ratio:
Formula = Current Assets/Current Liabilities
Current ratio in a business indicates that the availability of the current asset to meet it’s cu
But here it can be seen that it has always been more than 1.5. Though it is below the gene

2) Quick Ratio:
Formula = Quick Assets/Current Liabilities
Quick ratio is a better form of the CURRENT RATIO which excludes from current assets thin
has always been around 1. Thus, it is adequate and there is no need to panic.

3) Absolute Ratio:
Formula = Absolute Assets/Current Liabilities
This ratio is the acid test ratio, which tells how much current liabilities are covered by the m
satisfactory.

4) Debtors Turnover Ratio:

Formula = Avg. Debtors/Sales
Debtors turnover ratio represents the speed at which cash is realized from receivables. It a
beginning and now the company has increased this ratio to 26 which is excellent.

5) Collection Period:
Formula = 365/Debtor Turnover Ratio
This ratio represents the number of days required to realize cash from receivables. It is a be
decreased it to 13 days which is excellent. It means company is realizing its debts earlier th

6) Creditors Turnover Ratio:

Formula = Avg. Creditors/Sales
Creditors turnover ratio represents the speed at which business pays cash to its creditors. I
beginning and now the company has decreased this ratio to 0.08 which is excellent. This m

 
7) Collection Period:
Formula = 365/Creditor Turnover Ratio
This ratio represents the number of days in which company pays to its creditors. It is a bett
increased it to 4447 days which is excellent. It means company is paying its creditors later t
 
beginning and now the company has decreased this ratio to 0.08 which is excellent. This m

 
7) Collection Period:
Formula = 365/Creditor Turnover Ratio
This ratio represents the number of days in which company pays to its creditors. It is a bett
increased it to 4447 days which is excellent. It means company is paying its creditors later t
 

 8) Inventory Turnover:

Formula = Avg. Inventory/Net Sales
This ratio indicates that how fast inventories is used or sold. A high ratio is good from the v
satisfactory.
 

9) Inventory period:
Formula = 365/Inventory Turnover Ratio
It is a representation of the inventories turnover ratio in the number of days. Inventory tur
above 36 days with minimum in the year 2007-08 and highest of 52 days in the year 2003-0

10) Assets Turnover Ratio:

Formula = Net Sales/Assets
Fixed assets turnover ratio establishes a relationship between net sales and assets. This rati
Objective and Significance: This ratio expresses the number to times the fixed assets are be
employed. A high ratio means a high rate of efficiency of utilisation of fixed asset and low r
satisfactory.

11) Working Capital Turnover Ratio:

Formula = Net Sales(COGS)/Net Working Capital
Where Net Working Capital = Current Assets – Current Liabilities
Working capital turnover ratio establishes a relationship between net sales and working ca
Objective and Significance: This ratio indicates the number of times the utilisation of worki
in working capital and the greater are the profits. However, a very high turnover indicates a
ratio indicates that the working capital has not been used efficiently. The ratio for Reliance
 

12) DEBT EQUITY RATIO

Formula = Debt/Equity
This ratio indicates proportion of owner’s fund to total fund’s investments in the business.
utilization of the leverages is not done properly by the company. In case of Reliance, it’s de
the riskiness of the business in this years. But good returns has never made debt a worry fo

13) Interest Coverage Ratio:

Formula = Net Profit before Interest and Tax/Interest on Long-term Loans
Interest Coverage Ratio is a ratio between ‘net profit before interest and tax’ and ‘interest
Objective and Significance: This ratio expresses the satisfaction to the lenders of the conce
loans. This ratio indicates that how many times the profit covers the interest. It measures t
respect of periodical interest. Earlier, the ratio was very less for Reliance at 4 but now it ha
13) Interest Coverage Ratio:
Formula = Net Profit before Interest and Tax/Interest on Long-term Loans
Interest Coverage Ratio is a ratio between ‘net profit before interest and tax’ and ‘interest
Objective and Significance: This ratio expresses the satisfaction to the lenders of the conce
loans. This ratio indicates that how many times the profit covers the interest. It measures t
respect of periodical interest. Earlier, the ratio was very less for Reliance at 4 but now it ha

14) GROSS PROFIT RATIO:

Formula = Gross Profit/Net Sales
It indicates the firm’s capacity to face adverse economic conditions such as price competiti
the company has no reason to worry.
 

 
15) NET PROFIT RATIO:
Formula = Net Profit/Net Sales
It indicates the profitability over sales. In the earlier years , its value was 10 which was ver
previous years.

16) PROFIT MARGIN:

Formula = Profit After Tax(PAT)/Net Sales
It indicates the profitability margin of the company in terms of sales. It is an good ratio whi
was 9 which was very less . Over the years , the company has increased this ratio to 14 wh
down to 11.

17) RETURN ON EQUITY:

Formula = Profit After Tax(PAT)/Equity
This ratio is more meaningful to the equity shareholders who are interested to know profil
the better it is. The return on equity was 13 in the beginning which was very less but over t
. But due to recession, this ratio has again fallen down to 12.

 
18) RETURN ON CAPITAL EMPLOYED:
Formula = Profit Before Interest & Tax/Capital Employed
This ratio is the most important for measuring the overall efficiency of a firm. Higher the ra
increased to 16 % in the later years and in the latest year, it is 13 %. This is very good for th

19) Earnings Per Share – EPS:

Formula = Profit Available to Equity Shareholders/Number of Shares
The portion of a company's profit allocated to each outstanding share of common stock. Ea
generally considered to be the single most important variable in determining a share's pric
has been very good in creating wealth. The EPS was 29 in the beginning which was very le
previous years. . But due to recession, this has again fallen down to 97.

20) Price Earnings Ratio:

Formula = Market price/EPS
Formula = Profit Available to Equity Shareholders/Number of Shares
The portion of a company's profit allocated to each outstanding share of common stock. Ea
generally considered to be the single most important variable in determining a share's pric
has been very good in creating wealth. The EPS was 29 in the beginning which was very le
previous years. . But due to recession, this has again fallen down to 97.

20) Price Earnings Ratio:

Formula = Market price/EPS
This indicates the expectation of equity investors about the earnings of the firm. That is, ho
company's current share price compared to its per-share earnings. It's usually more useful
market in general or against the company's own historical P/E.The P/E Ratio was 10 in the b
is comfortable than the previous years. . But due to recession, this ratio has again fallen do
 
 
21) Price to Book Ratio:
Formula = Market Value/Book Value
A ratio used to compare a stock's market value to its book value. It is calculated by dividing
this value represents higher expectation of the shareholders. A lower P/B ratio could mean
wrong with the company. As with most ratios, be aware that this varies  by industry. This ra
company went bankrupt immediately. Price to Book ratio has been around 1.5 or 2 times, w
 ustries Limited

t asset to meet it’s current liabilities. Higher the ratio, better the coverage. Generally 2:1 ratio is generally acc
h it is below the generally accepted level, it is good enough to meet it’s liabilities. So, it is quite satisfactory.

m current assets things that cannot be converted into cash in short period, like inventories. It’s value for relia
o panic.

are covered by the most liquid assets. Its value was very less in the earlier years but now its value is 0.70 wh

from receivables. It affects the liquidity position of the company. The value of this ratio was 16 times in the
s excellent.

m receivables. It is a better representation of DTR. This value was 22 days in the beginning and now the compa
ng its debts earlier than before now.

cash to its creditors. It affects the liquidity position of the company. The value of this ratio was 0.43 times in t
ch is excellent. This means company is paying very late to its creditors.

s creditors. It is a better representation of CTR. This value was 851 days in the beginning and now the compan
ng its creditors later than before now which is a good sign.
ch is excellent. This means company is paying very late to its creditors.

s creditors. It is a better representation of CTR. This value was 851 days in the beginning and now the compan
ng its creditors later than before now which is a good sign.

tio is good from the view point of liquidity and vice versa. Here, the value of this ratio has been around 7-9. It

of days. Inventory turnover ratio with debtors turnover represents the total accounting cycle. It has always be
ays in the year 2003-04.

es and assets. This ratio indicates how well the assets are being utilised.
he fixed assets are being turned over in a stated period. It measures the efficiency with which fixed assets are
fixed asset and low ratio means improper use of the assets. This ratio has been between 0.7-0.9 which is

sales and working capital. This ratio measures the efficiency of utilisation of working capital
he utilisation of working capital in the process of doing business. The higher is the ratio, the lower is the inves
h turnover indicates a sign of over-trading and puts the firm in financial difficulties. A low working capital turn
The ratio for Reliance has been varying between 3 and 10 and it is currently 7.

ents in the business. Here the high ratio indicates that the business is risky. Whereas a low ratio indicates tha
se of Reliance, it’s debt-equity ratio is very high. Specially for the initial years, where it is more than 0.6 , it sh
made debt a worry for Reliance.

Loans
nd tax’ and ‘interest on long-term loans’. This ratio is also termed as ‘Debt Service Ratio’.
lenders of the concern whether the business will be able to earn sufficient profits to pay interest on long-ter
nterest. It measures the margin of safety for the lenders. The higher the number, more secure the lender is in
ce at 4 but now it has increased to 22 and at present this ratio is 11 which is quite comfortable.
Loans
nd tax’ and ‘interest on long-term loans’. This ratio is also termed as ‘Debt Service Ratio’.
lenders of the concern whether the business will be able to earn sufficient profits to pay interest on long-ter
nterest. It measures the margin of safety for the lenders. The higher the number, more secure the lender is in
ce at 4 but now it has increased to 22 and at present this ratio is 11 which is quite comfortable.

ch as price competition. The ratio is between 18-20 throughout the years. Thus , this ratio is quite comfortab

as 10 which was very less but now the company has increased this ratio to 13 which is comfortable than the

t is an good ratio which tells how much profit the company is earning from its sales. In the earlier years, its va
ed this ratio to 14 which is comfortable. But due to recession, this ratio has again fallen

rested to know profile earned by the company and the profiles that can be made available. The higher the rati
as very less but over the years, company has increased this ratio to 24 which is comfortable than the previous

f a firm. Higher the ratio, the better it is for the company. It should be compared with those of the other firms
his is very good for the firm like Reliance.

of common stock. Earnings per share serves as an indicator of a company's profitability. Earnings per share is
rmining a share's price. It is also a major component used to calculate the price-to-earnings valuation ratio. R
ng which was very less but over the years, company has increased this to 134 which is comfortable than the
7.
 of common stock. Earnings per share serves as an indicator of a company's profitability. Earnings per share is
rmining a share's price. It is also a major component used to calculate the price-to-earnings valuation ratio. R
ng which was very less but over the years, company has increased this to 134 which is comfortable than the
7.

of the firm. That is, how many times of the actual earnings are they ready to pay for the share. A valuation rati
s usually more useful to compare the P/E ratios of one company to other companies in the same industry, to t
Ratio was 10 in the beginning which was very less but over the years, company has increased this ratio to 17
tio has again fallen down to 14.

calculated by dividing the current closing price of the stock by the latest quarter's book value per share.. High
P/B ratio could mean that the stock is undervalued. However, it could also mean that something is fundamen
es  by industry. This ratio also gives some idea of whether you're paying too much for what would be left if the
ound 1.5 or 2 times, which shows a reasonable amount of expectation by the shareholders.
 ratio is generally accepted.
quite satisfactory.

es. It’s value for reliance

w its value is 0.70 which is

was 16 times in the

g and now the company has

o was 0.43 times in the

and now the company has

and now the company has

s been around 7-9. It is

ycle. It has always been

which fixed assets are

n 0.7-0.9 which is

pital
he lower is the investment
w working capital turnover

ow ratio indicates that the

more than 0.6 , it shows

.
y interest on long-term
ecure the lender is in
ortable.
.
y interest on long-term
ecure the lender is in
ortable.

tio is quite comfortable and

comfortable than the

he earlier years, its value

le. The higher the ratio,

ble than the previous years.

ose of the other firms. It

Earnings per share is

ngs valuation ratio. Reliance
omfortable than the
 Earnings per share is
ngs valuation ratio. Reliance
omfortable than the

share. A valuation ratio of a

he same industry, to the
eased this ratio to 17 which

alue per share.. Higher of

mething is fundamentally
at would be left if the
ers.