2. FINANCIAL STATEMENT ANALYSIS OF RELIANCE INDUSTRIES
LTD..
SUBMITED TO;
• Dr. SUNIL VERMA
(faculty of commerce and management)
SGT University
SUBMITED BY:
• KUNDAN YADAV
BBA(G) 3rd semester
160604028
3. INTRODUCTION
It is the key to any in-depth understanding of an organization’s
performance.
The value of the analysis is depends on the value of the financial
statement.
Financial statement analysis is the method of reviewing and analyzing a
company’s accounting reports in order to gauge its past,present and
projected future performance.
4. TECHNIQUES OF ANALYSIS
1. HORIZONTAL ANALYSIS
* This method of analysis is simply grouping together all information ,
sorting them by time period :weeks ,months or years.
* This analysis is also called dynamic analysis or trend analysis.
2. VERTICAL ANALYSIS
* vertical analysis only requires financial statements for a single
reporting period.
* It is useful for inter-firm or inter-departmental .
* No matter the size of the business or department.
5. TOOLS OF FINANCIAL STATEMENTS
ANALYSIS
1. Comparative statements
2. Common size statement
3. Ratio analysis
4. Cash flow statement
7. PROFITABILITY RATIO
• GROSS PROFIT% =GROSS PROFIT/NET SALE*100
• NET PROFIT% =Net profit after tax/net sales*100
or
NET PROFIT% =Net profit before tax/net sale *100
• RETURN ON EQUITY =Net profit/average total Equity*100
8. FINANCIAL STRUCTURE OR
CAPITALISATION RATIO
DEBT/EQUITY RATIO=Debt/Equity
Debt/Total Assets Ratio=debt/TOTAL ASSET*100
EQUITY RATIO=Equity/ total assets*100