Financial analysis of Ril & competitors

Financial analysis of Ril & competitors

1. Financial Analysis of Reliance and its competitors

2. Reliance Industries Founded by Dhirubhai Ambani Largest private sector conglomerate company headquartered at Mumbai, India. Products – Oil and Gas,Petroleum Petrochemicals Polyester, Textiles, Retail, Insurance, SEZ, Telecom Largest by annual turnover of $58.5 billion and market capitalization of $76.9 billion (2010-11) Ranked at 126th position in the Forbes Global 2000 list (2010)

3. RIL vs Industry: Current Ratio

4. RIL vs Industry: Quick Ratio

5. RIL vs Industry: Cash Ratio

6. RIL vs Industry: MARKET CAPITALISATION

7. Competitors ESSAR OIL Indian fully integrated oil & gas company of international scale Strong presence across the hydrocarbon value chain - Exploration, Production and Retail Revenue Rs 47,249 crore (2010-11) BPCL Indian state-controlled oil refining and marketing company. Fortune Global 500 ranked at 272 (2011) Products : Petrol , Diesel fuel, Petrochemicals , Lubricant Revenue Rs 154,475.36 crores (2010-11)

8. Competitors (Contd.) HPCL Indian state-owned oil company Fortune 500 company, ranked at 336 (2011) Revenue Rs 139,315.86 crores (2010-11) IOCL  Indian state-owned oil and gas company Fortune 500 company, ranked at 98 (2011) Accounts for a 47% share in the petroleum products market, 34.8% share in refining capacity and 67% downstream sector pipelines capacity in India. Revenue Rs 310,625.37 crores (2010-11)

9. Comparative Financial Analysis with Competitors Ratio Analysis Profitability Ratios Profit Margin Ratio Asset Turnover Ratio Return on Assets Earning per share Solvency Ratios Debt - Equity Ratio Liquidity Ratios Current Ratio Quick Ratio Debtor Turnover Ratio Inventory Turnover Ratio Trend Analysis

10. Profit Margin Ratio Measures amount of profit earned per rupee of revenue. Inferences Reliance has best control over its cost Essar – abrupt behavior IOCL, HPCL, BPCL - consistent but low

11. Asset Turnover Ratio Measure of firm’s efficiency in utilizing its assets. Inferences Reliance – most consistent Essar – abrupt behavior IOCL, HPCL, BPCL – high ‘Asset Turnover’ and low ‘Profit Margin’

12. Return on Assets Indicator of how profitable a company is relative to its total assets.  Gives an idea as to how efficient management is at using its assets to generate earnings . Net Income Total Assets

13. Earnings per Share The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability. Calculated as: Net income Weighted average Common Shares

14. Debt to equity ratio Debt to equity ratio = (Secured loans + Unsecured loans)/Share holder’s Equity The long term solvency of a business is affected by the extent of debt used to finance the assets of the company Debt – Equity Ratio

15. Current Ratio Current ratio= Current assets / current liabilities It’s a indicator of a company’s ability to pay its debt in the short runl Current Ratio

16. Quick Ratio Quick Ratio = Quick assets / current liabilities A large current ratio by itself is not a satisfactory measure of liquidity Quick Ratio

17. Debtor Turnover Ratio Measures the efficacy of a firm’s credit policy & collection mechanism and shows the number of times each year the debtors turn into cash. Reliance-stable, others- fluctuating

18. Inventory Turn Over Ratio Shows the number of times a company’s inventory is turned into cash Essar -inefficient Reliance-good &rest are comparatively better than Essar

19. Thanks We are open to questions.