On October 23rd, 2014, we updated our
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• I ndianOil is also t he highest r anked I ndian company in t he pr est igious For t une Global 500 list ing, having moved up 19 places t o t he 116t h posit ion in 2008. I t is also t he 18t h lar gest pet r oleum company in t he wor ld .
ANALYSIS• The cur r ent r at io f or t he last 6 year s is appox. 1.3:1 which is quit e unsat isf act or y accor ding t o t he st andar d nor ms, but in t his indust r y sect or it is f air enough.• The quick r at io is 0.6:1 which is again unsat isf act or y. I t implies t hat t he company may f ind it dif f icult t o pay it s cur r ent liabilit ies.
LEVERAGE RATIOS Debt Preference Debt Equity InterestEquity Ratio Dividend Asset Ratio Asset Ratio Coverage Ratio Coverage Ratio
ANALYSIS• Fr om t he debt -equit y, debt -asset and equit y-asset r at ios, we int er pr et t hat most of t he money involved is of owner ’s and it is saf e f or cr edit or s t o invest money in t his company.• Thus we can say t hat company can per f or m sat isf act or ily in long t er m.
TURNOVER RATIO TOTALINVENTORY DEBTORS AVERAGE ASSETTURNOVER TURNOVER COLLECTION TURNOVER RATIO RATIO PERIOD RATIO
ANALYSIS• The avg. I nvent or y t ur nover r at io f or t he last 6 yr s is appr ox 6 t imes per year ,which is sat isf act or y. I t implies t hat t he invent or ies have been sold f ast .• The avg. Debt or s t ur nover r at io is 15 t imes per year (indust r ial avg. is 7) which is quit e high and indicat es t hat t her e is a shor t t ime-lag bet ween sales and cash collect ion• The TATR is ar ound 1.8 (avg. of 6 yr s)
PROFITABILITY RATIOS Return Gross Operating Earning Net Profit on TotalProfit Margin Profit Ratio Power Ratio Assets Ratio Ratio
ANALYSIS• The Net Pr of it Mar gin (avg. of 6 yr s) is 3.25% which is a lit t le low. But since t he invent or y t ur nover r at io is high it can ear n a high r at e of r et ur n on invest ment s.• Ther e is a huge dr op in ROTA f r om 2004 t o 2009. I n 2004 t he analysis shows t hat t he f ir m
Pioneer ed by Du Pont Company of USA.I t analyses impor t ant int er -r elat ionshipsbased on inf or mat ion f ound in f inancialst at ement s.I t is def ined as-Net P itrof = Net P it rof ×Net SalesTotal assets Net salesTotal assets R OTA NP M TATR Such a decomposit ion helps in under st andinghow t he r et ur n on t ot al asset s is inf luenced
OVERALL ANALYSIS Thus, we see t hat t he shor t -t er mf inancial st at e of t he company isslight ly weak but it is sat isf act or yin t he long-t er m. The asset s ar eemployed ef f icient ly by t he f ir m.The use of capit al employed is alsodone ef f icient ly. But t her e is a huge dr op inROTA, in t he year 2010. I n f actt he net pr of it has also dr opped agr eat ext ent in t his year . One of