Financial analysis of Ril & competitors
Upcoming SlideShare
Loading in...5
×
 

Financial analysis of Ril & competitors

on

  • 2,882 views

Financial analysis of Ril & competitors

Financial analysis of Ril & competitors

Statistics

Views

Total Views
2,882
Views on SlideShare
2,880
Embed Views
2

Actions

Likes
2
Downloads
97
Comments
0

1 Embed 2

http://www.linkedin.com 2

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Looking at the earnings of a company often doesn't tell the entire story.This ratio is not useful for companies losing money, since they have no profit.

Financial analysis of Ril & competitors Financial analysis of Ril & competitors Presentation Transcript

  • Financial Analysis of Reliance andits competitors
  • Reliance Industries Founded by DhirubhaiAmbani 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)
  • RIL vs Industry: Current Ratio1.81.61.41.2 1 RIL0.8 Industry0.60.40.2 0 2010 2009 2008 2007 2006
  • RIL vs Industry: Quick Ratio0.90.80.70.60.5 Quick Ratio of company0.4 Quick Ratio of industry0.30.20.1 0 2009 2008 2007 2006 2005 2004 2003 2002 2001
  • RIL vs Industry: Cash Ratio0.80.70.60.50.4 Cash Ratio of company Cash Ratio of0.3 industry0.20.1 0 2009 2008 2007 2006 2005 2004 2003 2002 2001
  • RIL vs Industry: MARKET400000 CAPITALISATION350000300000250000 RIL200000 BPCL HPCL IOCL150000100000 50000 0 2006 2007 2008 2009 2010
  • 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)
  • 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)
  • 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
  • Profit Margin Ratio 20 Profit Margin 15 10 5Percentage Reliance Essar 0 IOCL 2002 3 4 5 6 7 8 9 10 11 HPCL -5 BPCL -10 -15 -20 YearMeasures 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
  • Asset Turnover Ratio 7 Asset Turnover 6 5Percentage 4 Reliance Essar 3 IOL HPCL 2 BPCL 1 0 1 2 3 4 5 6 7 8 9 10 YearMeasure 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’
  • 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 togenerate earnings.Net Income 800.00 Total Assets Return on Assets 700.00 600.00 500.00 Reliance 400.00 Essar IOC 300.00 HPCL BPCL 200.00 100.00 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -100.00
  • Earnings per Share The portion of a companys profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a companys profitability. Calculated as: Net income Weighted average Common Shares160 Earnings per Share140120100 Reliance 80 Essar IOC 60 HPCL BPCL 40 20 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-20
  • Debt – Equity Ratio Debt to Equity Ratio 4 3.5 3 2.5 RelianceRatios Essar 2 IOL 1.5 HPCL BPCL 1 0.5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 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
  • Current Ratio Current Ratio 2 1.8 1.6 1.4 1.2 RelianceRatios Essar 1 IOL 0.8 HPCL BPCL 0.6 0.4 0.2 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 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
  • Quick Ratio Quick Ratio 1.6 1.4 1.2 1 RelianceRatios Essar 0.8 IOL HPCL 0.6 BPCL 0.4 0.2 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Quick Ratio • Quick Ratio = Quick assets / current liabilities • A large current ratio by itself is not a satisfactory measure of liquidity
  • Debtor Turnover Ratio 100 Debtor Turnover Ratio 90 80 70 60 Reliance 50 Essar 40 IOCL HPCL 30 BPCL 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 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
  • Inventory Turn Over Ratio 25 Inventory TurnOver Ratio 20 15 Reliance Essar 10 IOCL HPCL BPCL 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Shows the number of times a company’s inventory is turned into cash Essar-inefficient Reliance-good &rest are comparatively better than Essar
  • ThanksWe are open to questions.