CHAPTER – I

INTRODUCTION ON FINANCIAL ANALYSIS OF SELECTED OIL

COMPANIES

1.1 INTRODUCTION

The oil and gas industry is considered to be the biggest sector in the world in terms of
dollar value, the oil and gas industry is a global powerhouse employing hundreds of
thousands of workers worldwide as well as generating hundreds of billions of dollars globally
each year. In regions which house the major NOCs, these oil and gas companies are so vital
they often contribute a significant amount towards national GDP.

In recent years there has been a growing negative sentiment towards the oil and gas
industry and "big energy". Major environmental disasters such as the Deepwater Horizon
Gulf Of Mexico Oil Spill in 2013 have cast a negative spotlight upon the industry. The trend
towards Renewable and Alternative energy is also another threat to traditional oil and gas
companies. Coupled with the rise in pro-eco legislation and governmental pressure has meant
the oil and gas industry is even worse, the price collapse in 2014 had left the industry in a
sluggish state. This crash occurred for a number of reasons, but the chief among them is
supply and demand. Developing nations such as China, Brazil and Russia demonstrated an
unending thirst for oil in the first decade of the new millennium, however, in 2010 the
upward trajectory of their economies began to stall, leaving a large gap on global oil
consumption. Meanwhile, the U.S. was producing 3.5 million barrels of shale oil a day, and
this compounded with the shift in demand resulted in massive fluctuations in oil prices.

More recently, there has been a resurgence of confidence in the industry as it enters its
second year of recovery. Growth is increasing at a remarkable rate, as increased upstream
production continues to have a positive knock-on effect for midstream businesses. The price
of crude has also stabilized - steadying at around $50 per barrel. In addition, 100,000 jobs are
expected to be created in 2018 and the number of active drilling rigs in the U.S. has increased
to 780+ compared to 591 from a year ago.

The UK continental shelf also appears to be back, with the potential to unlock dozens
of undeveloped discoveries with new wells to be drilled on the horizon.
It's estimated that 30billions barrels are consumed globally each year - primarily by

1
developed nations. Oil also accounts for a significant percentage of energy consumption
regionally from 32% for Europe and Asia, 40% for North America, 41% for Africa, 44% for
South and 53% for the Middle East.

The oil and gas industry can be broken down into three key areas: Upstream, midstream
and downstream.

What is upstream?

The upstream component is also referred to as the E&P (exploration and exploration). This
involves the search for underwater and underground natural gas fields or crude oil fields and
the drilling of exploration wells and drilling into established wells to recover oil and gas.

What is midstream?

Midstream entails the transportation, storage and processing of oil and gas. Once resources
are recovered, it has to be transported to a refinery, which is often in a completely different
geographic region compared to the oil and gas reserves. Transportation can include anything
from tanker ships to pipelines and trucking fleets.

What is downstream?

Downstream refers to the filtering of the raw materials obtained during the upstream
phase. This means refining crude oil and purifying natural gas. The marketing and
commercial distribution of these products to consumers and end users in a number of forms
including natural gas, diesel oil, petrol, gasoline, lubricants, kerosene, jet fuel, asphalt,
heating oil, LPG (liquefied petroleum gas) as well as a number of other types of
petrochemicals.

What are the largest volume products?

The largest volumes of products of the oil and gas industry are fuel oil and gasoline
(petrol). Petroleum is the primary material for a multitude of chemical products, including
pharmaceuticals, fertilizers, solvents and plastics. Petroleum is therefore integral to
many industries, and is of critical importance to many nations as the foundation of their
industries.

2
1.2 OBJECTIVES

 To study the financial soundness of selected Oil & Gas industry i.e. Bharat
Petroleum Corporation limited, Hindustan Petroleum Corporation Limited,
Indian Oil Corporation Limited.
 To analyze the changes in financial position of the select Oil & Gas companies over a
period of last five years.
 To compare the financial position of the select Oil & Gas companies.

1.3 NEED AND SCOPE OF THE STUDY

The scope of the study is necessary for all professionals who deals with financial
reports and need to understand how the data can be analysed to accurately assess their
organisation‟s financial strength. It would help the companies to know its financial status and
helps to make financial decision.

1.4 PERIOD OF THE STUDY

The present study is based on the data collected from the audited annual reports and
some relevant documents for the period commencing from 2013-2014 to 2017-18.

1.5 METHODOLOGY

 The study is based on secondary data. Therefore, the requisite data are collected from
company‟s Audited Annual accounts, Company‟s website, Websites of Government,
Newspapers, Magazines and reference books etc.
 Only last five years audited financial statements is considered for this study of
selected Oil & Gas industry i.e. Bharat Petroleum Corporation limited, Hindustan
Petroleum Corporation Limited, Indian Oil Corporation Limited.
 The financial tool is used for analysing the financial datas of Oil & Gas companies are
Ratio analysis and Comparative analysis.
 Literature is collected from relevant websites, books, journals and magazines. Etc.

3
  Based on collected data from relevant companies websites conclusions, findings and
suggestions are drawn.

1.6 LIMITATIONS

 The present study is largely based on ratio analysis which has its own
limitations.
 The study is based on select Oil & Gas industry i.e. Bharat Petroleum Corporation
limited, Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited.
 The study period is restricted to last five years of financial statements.
 The study is based on secondary data obtained from the published annual reports and
as such its finding depends entirely on the accuracy of such data.

4
 CHAPTER – II
INDUSTRY & COMPANY PROFILE

2.1 INDUSTRY PROFILE-- OIL & GAS INDUSTRY IN INDIA

INTRODUCTION:

The oil and gas sector is among the eight core industries in India and plays a major
role in influencing decision making for all the other important sections of the economy.
India‟s economic growth is closely related to energy demand; therefore the need for oil and
gas is projected to grow more, thereby making the sector quite conducive for investment.
The Government of India has adopted several policies to fulfil the increasing demand. The
government has allowed 100 per cent Foreign Direct Investment (FDI) in many segments of
the sector, including natural gas, petroleum products, and refineries, among others. Today, it
attracts both domestic and foreign investment, as attested by the presence of Reliance
Industries Ltd (RIL) and Cairn India.

Market Size

India is expected to be one of the largest contributors to non-OECD petroleum

consumption growth globally. Oil imports rose sharply to US$ 87.37 billion in 2017-18 from
US$ 70.72 billion in 2016-17. India retained its spot as the third largest consumer of oil in the
world in 2017 with consumption of 4.69 mbpd of oil in 2017, compared to 4.56 mbpd in
2016. India was the fourth-largest Liquefied Natural Gas (LNG) importer in 2017 after Japan,
South Korea and China. LNG imports increased to 26.11 bcm in 2017-18 from 24.48 bcm in
2016-17.Gas pipeline infrastructure in the country stood at 16,771 km at the beginning of
September 2018.

Investments

According to data released by the Department of Industrial Policy and Promotion

(DIPP), the petroleum and natural gas sector attracted FDI worth US$ 7.00 billion between
April 2000 and June 2018.

5
Following are some of the major investments and developments in the oil and gas sector:

 In September 2018, the Government of Gujarat selected Energy Infrastructure

Limited (EIL), a subsidiary of the Netherlands-based Energy Infrastructure Butano
(Asia) BV, to set up a Liquefied Petroleum Gas (LPG) terminal at Okha with an
investment of Rs 700 crore (US$ 104.42 million).
 World's largest oil exporter Saudi Aramco is planning to invest in refineries and
petrochemicals in India as it looks to enter into a strategic partnership with the
country.
 Foreign investors will have opportunities to invest in projects worth US$ 300 billion
in India, as the country looks to cut reliance on oil imports by 10 per cent by 2022,
according to Mr Dharmendra Pradhan, Minister of Petroleum and Natural Gas,
Government of India.
 Oil and Natural Gas Corporation (ONGC) is going to invest Rs 17,615 crore (US$
2.73 billion) on drilling oil and gas wells in 2018-19.

Government Initiatives

Some of the major initiatives taken by the Government of India to promote oil and gas
sector are:

 The Government of India is planning to set up around 5,000 compressed bio gas
(CBG) plants by 2023.
 Government of India is planning to invest Rs 70,000 crore (US$ 9.97 billion) to
expand the gas pipeline network across the country.
 In September 2018, Government of India approved fiscal incentives to attract
investments and technology to improve recovery from oil fields which is expected to
lead to hydrocarbon production worth Rs 50 lakh crore (US$ 745.82 billion) in the
next twenty years.
 State-run oil firms are planning investments worth Rs 723 crore (US$ 111.30 million)
in Uttar Pradesh to improve the liquefied petroleum gas (LPG) infrastructure in a bid
to promote clean energy and generate employment, according to Mr Dharmendra
Pradhan, Minister of Petroleum and Natural Gas, Government of India.

6
  A gas exchange is planned in order to bring market-driven pricing in the energy
market of India and the proposal for the same is ready to be taken to the Union
Cabinet, according to Mr Dharmendra Pradhan, Minister of Petroleum and Natural
Gas, Government of India.
 The Oil Ministry plans to set up bio-CNG (compressed natural gas) plants and allied
infrastructure at a cost of Rs 7,000 crore (US$ 1.10 billion) to promote the use of
clean fuel.

Achievements

Following are the achievements of the government during 2018:

 Construction of around 13,500 km long gas pipeline is under way, at the end of 2018.
 Under City Gas Distribution (CGD) network, 86 Geographical Areas constituting 174
districts in 22 States/ Union Territories are covered
 As of December 5, 2018 more than 58.3 million connections have been released under
Pradhan Mantri Ujjwala Yojana (PMUY).

7
 2.2 COMPANY PROFILE OF SELECTED OIL COMPANIES

Those companies which are selected for the study are as mentioned below:
 Bharat Petroleum Corporation Limited
 Hindustan Petroleum Corporation Limited
 Indian Oil Corporation Limited

BHARAT PETROLEUM CORPORATION LIMITED

Bharat Petroleum Corporation Ltd (BPCL) operates in the petroleum industry in

India. The company operates in a single segment - Refinery and marketing activities, which
includes Downstream petroleum sector. They are also engaged in the Exploration and
Production of Hydrocarbons (E&P). BPCL on a regular basis imports their LPG requirements
mainly from the Middle East. Occasional there are import requirements of Gasoil, Kerosene,
Gasoline and Base Oil. The company refineries consist of Mumbai Refinery, Kochi Refinery,
Numaligarh Refinery and Bina Refinery. BPCL exports Fuel Oil and Naphtha and Base Oil
(GroupII).

BPCL is a public sector undertaking with the Government of India holding 54.93%
stake as on 30 September 2017. On 11 September 2017, Government of India conferred
BPCL with Maharatna status.

Bharat Petroleum Corporation Ltd was incorporated on November 3, 1952 as a

private limited company with the name Burmah Shell Refineries Ltd. The company began
their work on the marshland of Trombay at Bombay. The refinery on 454 acres of land at
village Mahul went on-stream on 30th January 1955, one year ahead of schedule. In January
24, 1976, Burmah Shell Group of Companies was taken over by the Government of India to
form Bharat Refineries Ltd. In August 1, 1977, the company was renamed as Bharat
Petroleum Corporation Ltd. The company was also the first refinery to
process newly found indigenous crude (Bombay High), in the country.

In 2013, Petrobras completes formation test in Farfan area in Sergipe-Alagoas Basin, Brazil.
BPRL announces new natural gas discovery in offshore Mozambique. Bharat gas introduces
IVRS to book gas refill services. BPCL begins IVRS refill booking system in Kerala.

8
In 2014, Bharat Petroleum - BPRL announces Increase in Recoverable Natural Gas
Resources in Mozambique. Gas Discovery in Cauvery Basin, India by ONGC - BPRL
Consortium.

In 2015, Bharat Petroleum Corporation Limited (BPCL) received approval from Environment
Ministry for Rs 4,588 crore expansions at its refinery facility. BPCL, along with GAIL Gas, a
100% subsidiary of GAIL India will jointly develop the City Gas Distribution Network (CGD
Network) in Haridwar district. BPCL also commissions a new art Crude Distillation Unit
(CDU) in Mumbai.

On 29 May 2015, BPCL announced that it had acquired additional 1.99 crore equity shares of
Petronet CCK Limited (PCCKL) constituting 19.97% of the paid-up capital of PCCKL from
a financial investor of PCCKL. Post the acquisition of additional shares, BPCL's holding in
PCCKL went up to 68.97%.

In November 2015, a consortium of Bharat Petroleum Corporation Ltd (BPCL) and GAIL
Gas Ltd was awarded the authorization for laying, building, operating and expanding of a
City Gas Distribution Network (CGD Network) in the Geographical Area of Haridwar district
by the Petroleum and Natural Gas Regulatory Board established under the PNGRB Act,
2006.

On 31 December 2015, BPCL announced that it had entered into a binding Gas Sale and
Purchase Agreement (GSPA) with Petronet LNG Limited (PLL) for the procurement of an
additional 0.1 MMTPA of RLNG with effect from January 2016.

On 18 February 2016, BPCL announced that it had purchased 50% of financial institutions'
holding in Sabarmati Gas (SGL), thereby raising its stake in SGL to 49.9%. SGL is a city gas
distribution company involved in the supply of CNG to the transport segment and PNG to
consumers in the domestic, commercial and industrial segments.

On 26 May 2016, the Board of Directors of BPCL recommended the issue of bonus shares in
the ratio of 1:1.

On 29 July 2016, BPCL announced that it had entered into an agreement for acquiring 21%
stake in the share capital of FINO PayTech Limited for a consideration of Rs 251 crore in an
all cash deal. FINO PayTech is a payments technology solutions provider to banks, financial
institutions and MFIs.

9
Bharat Petro Resources Limited (BPRL), a 100% subsidiary of Bharat Petroleum Corporation
Limited (BPCL), and its exploration and production arm, along with Oil India Limited and
Indian Oil Corporation Limited, acting jointly as the Indian Consortium, through a joint
venture company formed by their wholly owned subsidiaries in Singapore, completed on 5
October 2016 two transactions, viz. acquisition of 23.9% shares of the charter capital of JSC
Vankorneft, a company organised under the laws of the Russian Federation, which is the
owner of Vankor and North Vankor Field licenses, from Rosneft Oil Company (Rosneft), a
National Oil Company of Russia; and acquisition of 29.9% of the participatory share in
charter capital of LLC Taas Yuryakh Neftegazodobycha (TYNGD), from LLC RN Razvedka
I Dobycha, a wholly owned subsidiary of Rosneft. TYNGD which has onshore fields in East
Siberia is currently producing about 20,000 bopd which is expected to be ramped up to about
100,000 bopd by 2021.

In November 2016, a consortium of Bharat Petroleum Corporation Ltd (BPCL) and GAIL
Gas Ltd was awarded the authorization for laying, building, operating and expanding of a
City Gas Distribution Network (CGD Network) in the Geographical Area of North Goa in the
state of Goa by the Petroleum and Natural Gas Regulatory Board established under the
PNGRB Act, 2006. Bharat Petroleum Corporation Limited, Indian Oil Corporation Limited
and Hindustan Petroleum Corporation Limited signed a Consortium Agreement on 7
December 2016 to carry out pre-project activities for setting up of a West Coast Refinery &
Petrochemical project of approximately 60 MMTPA capacity in Maharashtra through a Joint
Venture Company.

On 16 January 2017, the Board of Directors of BPCL gave in-principle approval for the
merger of Petronet CCK Ltd. (PCCKL), a wholly owned subsidiary of BPCL, with BPCL.
PCCKL owns and operates 292 Km long multi product Kochi-Coimbatore-Karur pipeline
with a through put capacity of 3.3 MMTPA which is used for evacuation of BPCL's Kochi
Refinery products.

HINDUSTAN PETROLEUM CORPORATION LIMITED

Hindustan Petroleum Corporation Limited is a holding company. The Company is engaged in

the business of refining of crude oil and marketing of petroleum products. It operates through
two segments: Downstream, and Exploration and Production of Hydrocarbons. The

10
Downstream segment engages in refining, marketing and transportation of petroleum
products. It offers motor spirit, high-speed diesel and liquefied petroleum gas (LPG). Its
products and services include aviation turbine fuel; bulk fuels and petroleum products that are
marketed to industrial consumers; LPG (HP Gas); Lubes (HP Lubes), and product pipelines.
It has refineries at Mumbai and Vishakhapatnam, LPG bottling plants and Lube blending
plants. Its refineries upgrade the crude petroleum into various products and over 300 grades
of lubricants, specialties and greases. The Company's marketing infrastructure includes a
network of installations, depots, retail outlets, aviation service stations and LPG distributors.

Hindustan Petroleum Corporation Limited (HPCL) is an Indian oil and natural

gas company with its headquarters at Mumbai, Maharashtra. It has about 25% market-share
in India among public-sector companies (PSUs) and a strong marketing infrastructure. Oil
and Natural Gas Corporation, also the promoter of the company, owns 51.11% shares in
HPCL and others are distributed amongst financial institutes, public and other investors .The
company is ranked 367th on the Fortune Global 500 list of the world's biggest corporations as
of 2016.

Merger and Acquisition:

On 19 July 2017, the Government of India announced the acquisition of Hindustan Petroleum
Corporation by Oil and Natural Gas Corporation on 1 November 2017, the Union Cabinet
approved ONGC for acquiring majority 51.11% stake in HPCL (Hindustan Petroleum
Corporation Limited). On 30 January 2018, Oil & Natural Gas Corporation acquired the
entire 51.11% stake of Hindustan Petroleum Corporation, thus becoming the promoter of the
company .Although ONGC Holds 51.1% in the Company, HPCL denies to identify it as
promoter. The reason given for it is that the majority of Board Of Directors are from
Government of India and not ONGC.

HPCL operates two major refineries producing a wide variety of petroleum fuels and
specialties, one in Mumbai (West Coast) of 7.5 million metric tonnes per annum (MMTPA)
capacity and the other in Visakhapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL
holds an equity stake of 16.95% in Mangalore Refinery and Petrochemicals Limited (MRPL),
a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. Another refinery of 9
MMTPA (set up in Bathinda, Punjab by HMEL, a joint venture with Mittal Energy
Investments Pvt. Ltd). HPCL has signed a memorandum of understanding with the

11
Government of Rajasthan for setting up a refinery near Barmer. It would be operated under
a joint venture company (JVC) called HPCL-Rajasthan Refinery Limited.

HPCL also owns and operates the largest lubricant refinery in India producing lube base oils
of international standards, with a capacity of 335 TMT. This refinery accounts for over 40%
of India's total lube base oil production. Presently HPCL produces over 300+ grades of lubes,
specialities and greases.

The marketing network of HPCL consists of 21 zonal offices in major cities and 128 regional
offices facilitated by a supply and distribution infrastructure comprising terminals, aviation
service facilities, liquefied petroleum gas (LPG) bottling plants, lube filling plants, inland
relay depots, retail outlets (petrol pumps) and LPG and lube distributorships.

HPCL has state-of-the-art information technology infrastructure to support its core business.
The data centre is at Hi-tech city in Hyderabad.

International rankings

 HPCL is a Fortune Global 500 company as per the ranking of 2013 and was ranked at
position 259. HPCL has been ranked at position 367 as per the latest ranking of 2016.
 HPCL was featured on the Forbes Global 2000 list for 2013 at position 1217.
 It was the 10th most valuable brand in India according to an annual survey conducted
by Brand Finance and The Economic Times in 2010.

Joint Ventures & Subsidiaries

Refining and Marketing of Petroleum product is the core business of the Corporation.
Opportunities have been explored to access new revenue streams, and augment downstream
businesses. Accordingly, HPCL has formed subsidiaries and joint venture companies for
refining, bitumen emulsion, pipeline, city gas distribution (CGD), LPG cavern, natural gas
pipelines, LNG terminal and bio fuels.

12
INDIAN OIL CORPORATION

Indian Oil Corporation Ltd (IOCL) is India's flagship national oil company with business
interests straddling the entire hydrocarbon value chain - from refining, pipeline transportation
and marketing of petroleum products to exploration & production of crude oil & gas,
marketing of natural gas and petrochemicals. The company is the leading Indian corporate in
the Fortune 'Global 500' listing, ranked at the 168th position for the year 2017. IOCL is a
public sector undertaking. Government of India held 56.98% stake in IOCL as on 31
December 2017.

The company's operations include refineries, pipelines and marketing. Their portfolio of
brands includes Indane LPG as, SERVO lubricants, XTRAPREMIUM petrol and
XTRAMILE diesel and Propel Petrochemicals. In exploration and production, Indian Oil's
domestic portfolio includes 11 oil and gas blocks and two coal bed methane blocks while the
overseas portfolio consists of 10 blocks spread across Libya, Iran, Gabon, Nigeria, Timor-
Leste, Yemen and Venezuela.

Indian Oil Corporation Ltd was established in the year 1959 as Indian Oil Company Ltd. In
the year 1964, Indian Refineries Ltd merged with Indian Oil Corporation Ltd. Indian Oil
Blending Ltd a wholly owned subsidiary was merged with Indian Oil on May 2006. The
company transferred their entire equity holding in Indian Strategic Petroleum Reserves Ltd
(ISPRL) to the Oil Industry Development Board, a government body functioning under the
Ministry of Petroleum & Natural Gas. Consequently, ISPRL ceased to be a wholly owned
subsidiary in May 2006.

The company formed one subsidiary company, namely IOC Middle East FZE, in Jebel Ali
Free Trade Zone Dubai, with the objective of marketing lubricants and other petroleum
products in Middle East, Africa and CIS regions. In June 2006, they incorporated a joint
venture company namely, Indo-Cat Pvt. Ltd with Intercat.Inc of USA for manufacture and
marketing of FCC catalysts and additives.

In the year 2007, the company received plenty of awards, Oil Industry Safety Directorate
Awards, 'Most Admired Retailer of the Year' award, 'CIO 100 Award 2007', SAP ACE -
Awards for Customer Excellence and the only petroleum company as 'The Most Trusted

13
Brand' in ET's Brand Equity's annual survey. The SERVO acquires prestigious MAN Global
approvals, Indian Oil's R&D Centre gets special recognition for Bioremediation and also
SERVO secures entry into NSF White Book - H1 Category during the period. The company
won Retailer of the Year - Rural Impact Award and their Xtra Power won Loyalty Summit
Award during the year 2008.

14
 CHAPTER -III

REVIEW OF LITERATURE

Sugandharaj Kulkarni (2017) in his study on “FUNDAMENTAL ANALYSIS OF

ONGC” describes Fundamentals are associated with the economic health of a company. The
fundamentals tell you about a company. We can say a company is having healthy
fundamentals if it is growing at a nice pace, generating a profit, has limited debts and
abundant cash. The analysis of a company's fundamentals involves getting deep into its
financials, rather than day-to-day movement in its share price. Equity researchers
normally do fundamental analysis in order to calculate the intrinsic value of a company's
stock. If a company's stock is trading above the intrinsic value or fair value, then the stock is
overvalued. If a company's stock is trading below the intrinsic value, then the stock is
undervalued. However, if you watch the stock markets very closely, the share price of most
companies never matches the fair value. Often, day traders and investors who would prefer
short term investment options invest in those stocks, regardless of the companies' long term
growth prospects. However, long term investors generally prefer to invest in companies with
robust fundamentals and ignore near-term share price movements

Spring (SEP 2014): This paper determines the relationship between the crude oil
price and the financial performance of International Oil Companies (IOCs) of the Eurozone
during the last decade (from 2004 to 2013). This study is conducted around a multiple
regression model with panel data with the financial performance ratios (ROA, ROE, Profit
Margin) as dependent variables and the crude oil price as independent variables. A
knowledge gap is visible since the crude oil price was never used as an independent variable
in relation to the financial performance ratios of IOCs. In addition, the IOCs in the Eurozone
have not been studied since most studies focuses on the United States and Asia. Moreover
these studies focus on stock returns rather than financial performance. The research follows
a quantitative approach by assessing the relationship of the crude oil price with financial
performance of IOCS during the 10-year period (from 2004 to 2013) for 11 companies from
10 countries. The purpose of the study is to determine the effect of the crude oil prices on

15
the financial performance of oil producer companies on a 10-year period using a multiple
regression model with panel data.

Rohit Bansal, Sanjay Kar, Saroj Mishra (2016): In their study of Indian and Global
Oil Companies, The Oil sector is considered to be one of the important areas of concern in
today‟s world scenario. Most financial statement analyses focus on firms belonging to
industries that either contribute significantly to economic figures or posit in a highly
competitive business environment. The objective of this paper is to analyze comparative
financial performance of Indian oil companies like Indian Oil Corporation Ltd., Bharat
Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., and Cairn India with
some of the leading global companies like British Petroleum and Royal Dutch Shell Plc.
during 2010-2014. Various ratios like liquidity ratios, activity ratios, leverage ratios,
profitability ratios and market value ratios have been used to measure financial performance
of selected oil companies

According to Drake (2010), financial statement analysis is the selection, evaluation,

and interpretation of financial data, along with other pertinent information, to assist in
investment and financial decision-making. Moreover, it is also the process of identifying
financial strengths and weaknesses of the firm by properly establishing relationship between
the items of the balance sheet and the profit and loss account. According to Brigham and
Houston (2009), financial analysis involves comparing the firm‟s performance to that of other
firms in the same industry and evaluating trends in the firm‟s financial position over time.

Pandey (2010) sees financial analysis as a process of identifying the financial

strengths and weaknesses of the firm by properly establishing relationships between the firm
by properly establishing relationships between the items of the balance sheet and the profit
and loss account. He adds that ratio analysis is a powerful tool of financial analysis. A ratio is
used as a benchmark for evaluating the financial position and performance of a firm. So the
relationship between two accounting figures, expressed mathematically, is known as a
financial ratio (or simply as a ratio). In this study, we confine our analysis to the traditional
financial ratios to measure performance and efficiency mainly because of ready availability
of data there on

16
 Kawaguchi (2016) expressed that oil and gas part liquidity levels were not very
extremely influenced and until as of late have stayed adequate. In any case, the current
extended decrease in natural costs has had a significantly more injurious impact on oil and
gas segment liquidity, so that there is presently a need to execute best liquidity practices.
External sources of liquidity are additionally ending up less promptly available as the
decrease in the oil cost has hit oil and gas organization FICO scores

Snorre Myhre (2016) How a company determines its capital structure and how
specific events in time (booms/recessions) effects that structure, has in earlier academic work
been thoroughly researched for multiple industries but has yet to be done for the oil & gas
industry. By looking at how the leverage ratio of multiple oil & gas companies, change
through a time span of 17 years, this thesis aims to give an insight into what are the major
determinants to those changes. By using both firm specific- and macroeconomic factors in a
panel data regression model, the thesis tries to find which of the three corporate finance
theories, trade-off theory, pecking order theory and market timing theory dominates when
companies choose a capital structure. The results indicate that firm size and tangibility are the
most prominent firm specific factors, with GDP growth rate and lagged term spread as the
most influential macroeconomic factors.

Deepika S and Dhivya B (2017) Abstract Finance is considered as life blood of

business enterprise. The success and survival of any organization depends upon how
efficiently it is able to raise funds as and when needed and their proper utilization. The object
of the present study is to know the profitability and solvency and the future value of the
business concern during the period of five years from 2012-2016. For this purpose to fulfil
the objectives Ratio Analysis and Correlation has been used for the calculation of the
company. Finally the suggestions are offered to control the fluctuating in price changes

Gopinath (2009) has presented that the financial ratios analysis can spot better
investment options for investors as the ratio analysis measures various aspects of the
performance and analyses fundamentals of a company or an institution.

17
 Adolphus J. Toby (2007) in his study financial management modelling of the
performance of Nigerian quoted small and medium-sized Enterprises. It is conceptualized
that sustained growth, adequate liquidity and requisite profitability in the SME sector is
significantly related to their investment and financing decisions. The empirical results show a
significantly inverse relationship between current ratio and the gross profit margin, holding
the working capital gap constant. The quoted SMES current assets ratio are significantly
sensitive to commercial Banks liquidity ratio, cash reserve requirements, and loan-to-deposit
ratio. Overall, over model results confirm that the SME sector in Nigeria is still limited by the
liquidity-profitability dilemma, efficiency constraints, Pecking order reversals, stringent
monetary policy regimes and a risk-over banking system.

SantimoyPatra (2005) the impact of liquidity on profitability is analysed in his

study considering the case Tata Iron & Steel Company Limited. The study of the impact of
liquidity ratios on profitability showed both negative and positive association. Out of seven
liquidity ratios selected for this study, four ratios namely current ratio, acid test ratio, current
assets to total assets ratio and inventory turnover ratio showed negative correlation with
profitability ratio. However, these correlation co-efficient were not statistically significant.
The remaining three ratios namely working capital turnover ratio, receivable turnover ratio
and cash turnover ratio have shown positive association with the profitability ratio, all of
which are statistically significant at 5% level of significance. The result of all the correlation
coefficient is as desirable except correlation co-efficient between inventory turnover ratio and
ROI. However this undesirable sign between ITR and ROI is not supported by the multiple
regression analysis, which shows the positive association between these two variables. There
is increasing profitability which depends upon many factors including liquidity.

PetiaTopalova (2004) in his study uses firm level data to examine the performance
of India‟s non-financial corporate sector since 1989 and evaluate its financial vulnerabilities.
The study shows promising trends in liquidity, profitability and leverage of the sector
emerged in the early 1990‟s they experienced a reversal after 1996. Nevertheless, most
indicators were still at comfortable levels, and there is evidence of improvement in 2002. The
study also reveals that a number of firms still face problems servicing their debt obligations,
posing a risk to lenders. The study of aggregate interest coverage of the corporate sector

18
indicates that potential non-performing loans of the corporate sector remain high. This
underscores the need of the corporate sector remain high. This underscores the need for close
monitoring of the corporate sector in the future.

Harrision (2003) conducted study and argued that financial ratio analyses are very
useful. During his study he found that financial ratios analysis are also effective in
automobile industry, it guide governing body to determine effective and efficient strategies
and identify the weak areas which need attention.

Vijayakumar (2002) in his study “Financial appraisal of Salem Cooperative Sugar

Mills Ltd., Mohanur” analysed the various aspects of the working of Salem Co-operative
Sugar Mills Ltd, Mohanur. Financial appraisal has been studied with respect to profitability,
capital structure, fixed assets and working capital. The researcher's main finding is about the
Mill‟s over reliance on external funds which results in interest burden. It is certain that the
Mill will have better scope to function in an efficient manner if the owner's funds are
increased and the borrowings are reduced.

I.M.Pandey (2002) suggested that (RONA or ROCE) (Return on Net Assets or

Return on Capital Employed) is the measure of an organization‟s earning power. It is a
product of the Assets Turnover, Gross Profit Margin and Operating Leverage.

Zopounidis (2000) in his study proposed methodological framework based on

financial ratios analyses for estimating small and medium size enterprise performance.

Pillai and Bagavathi (2001) suggested that, the overall Profitability can be
measured in terms of relationship between net profit and assets. This ratio is also known as
profit to assets ratio. It measures the profitability of Investment. To examine the efficiency
and profitability use of these resources certain ratios are being used and they are collectively
called as Activity Ratios or performance ratios.

19
 According to S.P. Gupta (2001), the return on capital employed is used to study the
operational efficiency of the business. It shows the overall earning capacity of the capital
employed. As such, it may be used to examine the managerial efficiency. Again, the impact
of changes in sales, costs and capital employed on the return may be examined through this
technique.

Agarwal (1999) studied the profitability and growth in Indian Automobile

manufacturing Industry. The objective of this study is to examine if firms have been making
super normal profits since 1975 when price controls were removed. It also evaluates the
impact of policy changes since1981-82 on profitability and growth of firms in the industry
using Tobin‟s square as a measure of profitability. The study finds no evidence to show that
firms have made super normal profits. Profitability is found to be explained mainly by the age
of the firms, vertical integration, diversification and industry policy dummy variable.
Important determinants of the growth of firms are found as diversification, industry policy
dummy variables, gross retained profits and expansion of capacities. Results also reveal
differences in performance between car and non-car sectors as well as within the sectors of
the industry.

SrinivasaRao.G and IndrasenaReddy.P (1995), in their study, analyzed the

financial strength of paper industry had been improving from year to year. The company‟s
performance in relation to generating internal funds in the form of reserves and surplus was
excellent and also the company was doing well in mobilizing outsider‟s funds. The liquidity
position of the company was sound as revealed by current ratio and quick ratio which were
above the standard. The solvency ratio showed that the company had been following the
policy of low capital gearing from 1990-91 as these ratios had been decreasing from this year.
The performance of the company in relation to its profitability was not up to the expected
level. The company‟s ability to utilize assets for generation of sales had not been improved
much during the period of study period as revealed by its turnover ratios.

In RBI study (1995) an attempt was made to study the financial performance of
private corporate business sector during the period 1994-95. Of the 1030 companies covered

20
in this study, 925 are non-financial companies and 105 are financial companies. The results
of the non-financial and financial companies are also analyzed size-wise apart from the
analysis of the consolidated results for the entire sector. The good corporate performance
during 1994-95 reflected in major profitability ratios registering distinct improvement in the
year under review as compared to previous year.

Jagan Mohan Rao (1993) in Financial appraisal of Indian Automotive Tyre

Industry‟ studied the financial appraisal of Indian automotive tyre industry. The study was
intended to probe into the financial condition-financial strength and weakness-of the Indian
tyre industry. To this end a modest attempt has been made to measure and evaluate the
financial performance through inter-company and inter-sector analysis over a given period of
time (1981-1988). The main findings are that fixed assets utilisation in many of the tyre
undertakings was not as productive as expected and inventory was managed fairly well. The
tyre industry's overall profit performance was subjected to inconsistency and ineffective.

Andrew and Schmidgall (1993) in their study classified financial ratios into five
categories “liquidity ratios, solvency ratios, activity ratios, profitability ratios, and operating
ratios”. They indicated that financial ratios themselves do not provide valuable information
about a firm‟s performance, Andrew (1993) in his study conducted on automobile industry
investigated the leverage ratio of companies and suggested that a value-maximizing capital
structure.

Dr. Dinesh A. patel (1992) has analyzed financial analysis- A study of Cement
Industry of India for the period of 1979-80 to 1988-89. He can analysed the profitability of
cement industry, to examine the short term financial strength of the cement industry through
the analysis of working capital management and to analyze the long term financial strength
through the analysis of capital structure.

Virtanen and Yli-Olli (1989) in their study tested the temporal behaviour of
financial ratio distributions and found that business cycle affects the cross sectional financial

21
ratio distributions, Tippett (1990) in his study examined models financial ratio in terms of
stochastic processes and revelled that in general inference normality will be exception rather
than the rule.

Preethi Singh (1986) disclosed the basic rules for selecting the company to invest in.
She opined that understanding and measuring return based on risk is fundamental to the
investment Process. According to her, most investors are risk averse. To have a higher return
the investor has to face greater risks.

Sokoloff (1983) found that most of the firms invested bulk of their investment in
working capital and most manufacturing industries had made modest investments in fixed
assets. Working capital practices change significantly within industries over time. Most of
the financial managers‟ time and effort was allocated in bringing non-optimal levels of
current assets and current liabilities back toward optimal levels.

Nagarajrao B.S and Chandra K (1980) analyzed the financial efficiency of the
cement companies for the selected period of the study 1970-71 to 1977-78. It can be analyzed
profitability of selected cement companies has been found downward trend from 1970-71 to
1974-75 because the reason of inflation, rising of manufacturing cost, continuous fall in
capacity utilization due to many reasons.

Bhatia and Singh (1978) carried out a study of dividend policy of Indian
Companies taking into a consideration of 50 companies during the period 1966-68. The study
concluded that the company should aim at regular dividends and maintain a stable dividend
rate over the years. It was observed that there was no relationship between factors like
dividend, profit and Market price of shares.

Chakraborty (1976) evaluated the association between working capital, turnover

and profitability in Indian cement, sugar and fertilizer Industries and found a positive
relationship between them.

22
 CHAPTER - IV
RESEARCH METHODOLOGY

4.1 INTRODUCTION

Financial Statements present a summary of the accounts of the business enterprise to

convey an understanding of financial results and position of a business enterprise. According
to Hampton John J “A financial statement is an organised collection of data according to
logical and consistent accounting procedures. Its purpose is to convey an understanding of
some financial aspects of a business firm. It may show a position at a moment of time as in
case of a balance sheet or may reveal a series of activities over a given period of time as in
case of an income statement.” American Institute of Certified Public Accountants (AICPA)
state that „Financial Statements are prepared for the purpose of presenting a periodical review
or report on the progress by the management and deals with (a) status of investments in
business and (b) results achieved during the period under review. The term financial
statements generally refer to the combination of Balance Sheet (also termed as Position
Statement) and Income Statement (also termed Profit and Loss Account).

4.2 IMPORTANCE OF ANALYSIS OF FINANCIAL STATEMENT

The analysis refers to methodical arrangement of data where in the figures contained
in the financial statements are regrouped and the relationship is studied between the
component parts of financial statements. For the purpose of analysis, the data is sometimes
rearranged; the meaningful relationships are established by comparing the figures of current
year with that of the previous years; or calculating certain ratios, etc. Thus the complex and
heterogeneous information contained in financial statements is broken up into simple and
valuable information and significant relationships are established between the elements of
these financial statements. Analysis simplifies the heterogeneous data, regroups the figures
contained in financial statements, but the meaning and significance of these simplified figures
is explained by interpretation. It is the process of drawing inferences/conclusions and
explaining the purpose and the result of analysis. Though, both the analysis and interpretation
are related to different aspects, it is difficult to draw a definite line of difference between

23
them. Both are complementary to each other and are interrelated. Analysis is useless without
interpretation and the interpretation is not possible without analysis. Most of the authors have
used the „Analysis‟ to imply both the analysis and interpretation. As put by Myers,
“Financial Statement analysis is largely a study of relationship among the various financial
factors in a business as disclosed by a single set of statements and a study of trend of these
factors as shown in a series of statements.”

The main objectives of analysis of financial statement are:

a) To assess the operating Performance (profitability and efficiency) of the business as-a
whole and for different departments and units.

b) To find out the relative importance and meaning of different elements of financial
statements.

c) To assess the short-term (liquidity) and long-term financial (solvency) position of the firm.

d) To facilitate relative comparison of various departments and branches of the same firm and
various firms engaged in the same line of business.

e) To identify the causes and effects of unfavourable changes in various operating and
financial aspects and thereby taking remedial measures for improvement.

4.3 TYPES OF FINANCIAL STATEMENT ANALYSIS

The analysis of financial statements can be undertaken in a number of ways.The type of

analysis and interpretation depends on the number of years, typesof persons involved and
purpose for which the analysis is carried out. Man Mohan and Goyal has identified two
common bases for classification.

(i) On the basis of Modus Operandi:

Modus Operandi basis of classification of financial analysis is related to the number

of years involved in the analysis. It may be classified into two types as described below:

24
 (a) Vertical Analysis
(b) Horizontal Analysis

(a) Vertical Analysis

It is also known as „Static Analysis‟. It refers to the study of relationships ofvarious

items of financial statements of one accounting period only. It incorporates the study of only
one set of financial statements. Common size financial statements and financial ratios are two
important tools used in vertical analysis.

(b) Horizontal Analysis

It covers a period of more than one accounting periods, therefore also termed as
“Dynamic Analysis”. It is an analysis of financial statements of an organization of two or
more years. This type of analysis is quite useful for identifying the long-term trends in
various indicators of performance. Comparative Statements and Trend Percentages are the
important tools employed in this analysis.

(ii) On the basis of Material Used:

According to materials used, it can be classified into following two parts:

(a) External Analysis

(b) Internal Analysis

(a) External Analysis

External Analysis is done by the persons who do not have an access to the detailed
basic accounting records of the business firm. These outsiders include investors, creditors,
government agencies and the general public. The external analysis is based on the published
financial statements and data, thus serves only a limited purpose.

(b) Internal Analysis

It is the analysis of financial statements of an enterprise by the persons who are

internal to the firm and has an access to the detailed accounting records of the business. It is

25
conducted either by the employees of the firm or an outside agency may be employed to
undertake analysis for measuring the operating and managerial efficiency for the different
sub-units of an organization.

4.4 RATIO ANALYSIS

A ratio analysis is a quantitative analysis of information contained in a company‟s

financial statements. Ratio analysis is used to evaluate various aspects of a company‟s
operating and financial performance such as its efficiency, liquidity, profitability and
solvency.

4.5 CLASSIFICATION OF RATIO ANALYSIS

In ratio analysis the ratios may be classified into the four categories as follows;

(I) Liquidity Ratios

(II) Profitability Ratios
(III) Activity Ratios
(IV) Solvency Ratios

(I) Liquidity Ratio

"Liquidity" refers to the ability of the firm to meet its current liabilities. The liquidity
ratios, therefore, are also called 'Short-term Solvency Ratios.' These ratios are used to assess
the short-term financial position of the concern. They indicate the firm's ability to meet its
current obligations out of current resources.

In the words of Salomon J. Flink, "Liquidity is the ability of the firm to meet its
current obligations as they fall due.

Liquidity ratios include two ratios: -

1. Current Ratio

2. Quick Ratio

26
(II) Profitability Ratios

The main object of all the business concerns is to earn profit. Profit is the
measurement of the efficiency of the business. Equity shareholders of the company are
mainly interested in the profitability of the company.

Profitability ratios include the following: -

1. Gross Profit Margin Ratio

2. Operating Profit Margin Ratio

3. Net Profit Margin Ratio

4. Return on Capital Employed Ratio

5. Return on Net worth Ratio

6. Earnings per Share Ratio

(III) Activity Ratios

These ratios are calculated on the basis of 'cost of sales' or „sales‟; therefore, these
ratios are also called as 'Turnover Ratios'. Turnover indicates the speed or number of times
the capital employed has been rotated in the process of doing business. In other words, these
ratios indicate how efficiently the capital is being used to obtain sales; how efficiently the
fixed assets are being used to obtain sales; and how efficiently the working capital and stock
is being used to obtain sales. Higher turnover ratios indicate the better use of capital or
resources and in turn lead to higher profitability.

Turnover ratios include the following

1. Inventory Turnover Ratio

2. Debtors Turnover Ratio

3. Fixed Assets Turnover Ratio

4. Investment Turnover Ratio

27
(IV) Solvency Ratios

These ratios are calculated to assess the ability of the firms to meet its long-term
liabilities as and when they become due. Long term creditors including debenture holders are
primarily interested to know whether the company has ability to pay regularly interest due to
them and to repay the principal amount when it becomes due. Solvency ratios disclose the
firm‟s ability to meet the interest costs regularly and long term indebtedness at maturity.

Solvency ratios include the following ratios; -

1. Debt-Equity Ratio

2. Interest Coverage Ratio

4.6 TECHNIQUES OF FINANCIAL ANALYSIS

A variety of tools and techniques are available to the financial analyst. Financial
analyst chooses the techniques to suit the requirements of different enterprises under different
situations. The following are some of the common techniques of financial analysis:

1. Comparative Financial Statements

2. Common Size Financial Statements

3. Trend Analysis

4. Funds Flow Analysis

5. Cash Flow Analysis

6. Cost Volume Profit (CVP) Analysis

7. Ratio Analysis

28
1. Comparative Financial Statements

In Comparative Financial Statements, two or more balance sheet and/or the income
statement are shown simultaneously, in columnar or form to facilities comparison. It is a
horizontal analysis of the firm in which figures for more than one year are shown side by side
to study the trend of different items. It is a technique which is being followed while preparing
most of the published annual report. The comparative financial statements are prepared to
show:

a) The absolute figures for different items for two or more periods.

b) The amount of absolute changes from one period to another.

c) The changes in terms of percentages.

It can be prepared for both balance sheet and income statement. It is useful for identifying the
direction of changes and to study the trend in different indicators of performance of an
enterprise. Such type of comparison is useful for identifying the areas in which the firm has
improved its performance and the areas in which the performance as a firm has deteriorated.

2. Common Size Financial Statements

In Common Size Financial Statements, the relationship of different items of financial

statement is established with some common base. In the Common Size Income Statement, the
sales figure is assumed to be 100 and all Figures are expressed as a percentage of total sales.
In the Common Size Balance Sheet, each item of the balance sheet is slated as a percentage
of the total of assets side or total of the capital and liabilities side. The percentages so
calculated can be compared with the corresponding percentages in some other period. For this
purpose, it is necessary that both the companies should be following the uniform accounting
policies and procedures.

3. Trend Analysis

It is useful for studying financial statements for several years. In this method, the
profit and account and the balance sheet of an accounting year are taken as the base year. Any

29
year may be taken as the base year, it may be the earliest year involved or any intervening
year. Base should normally be the earliest year in the study period is taken as the base year.
Each item in the base year's financial statement is taken as 100. All the corresponding figures
in the financial statements of other years are expressed as a percentage of their value in the
financial statements of the base year.

4. Funds Flow Analysis

Funds Flow Statement is also known as „Statement of Sources and Applications of

Funds‟. The funds flow statement summarises the flow of funds during the year. It describes
the sources of funds and applications of funds between two balance sheet dates. This
statement is a historical record of where the funds came and how these were utilized during
the accounting period. The sources from which the funds comes in the firm are Funds from
operations, issue of shares and debentures, sale of fixed assets and long term investments,
decreases in working capital, raising a loan etc.

The uses to which funds are applied are funds lost in operations, repayment of long
term loans, redemption of preference shares and debentures, increase in working capital,
purchase of fixed assets or long term investments etc. This statement explains the liquidity
position of the business enterprise and the factors which causes changes in working capital of
the firm. It guides the management about the allocation of scarce resources and helps in
assessing the overall credit worthiness of the firm. It helps to know whether the internal and
external sources of funds are adequate according to the requirements of the funds. It helps the
management to plan for the sources of repayment of long-term debt, redemption of
preference share capital and other liabilities.

5. Cash Flow Analysis

Cash Flow Statement analyses the movement of funds in terms of cash, i.e., cash
transactions where in cash moved in and out of the firm. The movement of cash into the firm
is called cash inflow and the movement of cash out of the firm is called cash outflow. It is
prepared to study the impact of various transactions on the cash position of the firm. It may
be defined as, summary of receipts and disbursements during the period , reconciling the

30
opening balance of cash with the closing balance of information gathered from balance sheet
and profit and loss account. It explains reasons for changes in the cash position of the firm.
Transactions which results in an increase in cash are described as cash inflows and
transactions which results in decrease in cash are termed as cash outflows.

Cash flow is prepared to know the changes in cash position from one period to
another. It is a statement which shows the sources and applications of cash during the period.
The cash may be generated from sources, like, cash operating profit, sale of fixed assets,
issue of share capital for cash, issue of other securities for cash, etc. The application of cash
may be cash operating loss, purchase of fixed assets, payment of tax, dividend, redemption of
debentures, repayment of the borrowings, etc.

6. Cost Volume Profit (CVP) Analysis

Cost–volume-profit analysis is a planning tool that analyses the relationship between

price, cost structure, volume and profit. It is an examination of cost and revenue behavioural
patterns and their relationships with profit. The analysis separates costs into fixed and
variable components and determines the level of activity where costs and revenues are in
equilibrium.

Cost –volume profit analysis is an analytical technique which uses the degree of cost
variability for measuring the effect of changes in volume on resulting profits. Such analyses
assumes that the plant assets of the firm will remain the same in the short- run, therefore, the
established level of fixed cost will also remain unchanged during the period being studied.
This analysis provides information for managerial decision-making regarding cost of
production at various levels of operation, volume or level of production required, profits
expected and variation between cost of production and sales revenue

7. Ratio Analysis

Ratio analysis is an important and powerful technique or method, generally, used for
analysis of Financial Statements. Ratios are used as a yardstick for evaluating the financial
condition and performance of a firm. Analysis and interpretation of various accounting ratios
gives a better understanding of financial condition and performance of the firm in a better

31
manner than the perusal of financial statements. A ratio or financial ratio is a relationship
between two accounting figures, expressed mathematically. Ratio Analysis helps to ascertain
the financial condition of the firm. In financial analysis, a ratio is compared against a
benchmark for evaluating the financial position and performance of a firm. Financial ratios
help to summarise large quantities of financial data to make qualitative judgment about the
firm‟s financial performance.

32
 CHAPTER – V
DATA ANALYSIS AND INTERPRETATION

This study aims at analysing the financial performance of the oil and gas companies
such as Bharat petroleum corporation Limited, Hindustan Petroleum Corporation limited and
Indian Oil Corporation limited. This type of analysis of companies is done through ratio
analysis and comparative analysis. The financial statements of the companies were compared
for the different years to know the financial performance of the companies in the study
period.

5.1 RATIO ANALYSIS

Ratio analysis is an important and powerful technique or method, generally, used for
analysis of Financial Statements. Ratios are used as a yardstick for evaluating the financial
condition and performance of a firm. Analysis and interpretation of various accounting ratios
gives a better understanding of financial condition and performance of the firm in a better
manner than the perusal of financial statements. A ratio or financial ratio is a relationship
between two accounting figures, expressed mathematically. Ratio Analysis helps to ascertain
the financial condition of the firm.

5.1.1 RATIO USED FOR THE STUDY

The following are the ratios used to analysis the financial performance of the
companies.

 Current Ratio
 Liquid Ratio
 Operating Income Ratio
 Earnings Per Share
 Net Profit Ratio
 Dividend Payout Ratio
 Total Assets Turnover Ratio
 Return On Capital Employed
 Debt – Equity Ratio

33
  CURRENT RATIO

Current ratio is defined as the relationship between current assets and current liabilities.
It refers to the measurement of the firm‟s ability to meet its short-term obligations. It
establishes the relationship between the current assets and the current liabilities. Current
assets normally mean such assets which are converted into cash within a year‟s time or
during the normal operating cycle of the business. Current liabilities represent the liabilities
which are payable within a year‟s time during the normal operating cycle of the business.

CURRENT RATIO= CURRENT ASSET/CURRENT LIABILITIES

 LIQUID RATIO

Liquid ratio establishes the relationship between liquid assets and current
liabilities. Liquid assets are those that can be converted into cash, quickly, without
loss of value. Current liabilities represent the liabilities which are payable within a
year‟s time during the normal operating cycle of the business.

LIQUID RATIO=QUICK ASSET/CURRENT LIABILITIES

 OPERATING INCOME RATIO

This ratio measures the relationship between the operating profit and net sales.

The operating profit is also termed as the earnings before interest and taxes. The
operating profit refers to the profit generated by the firm from operating activities.

OPERATING INCOME RATIO=OPERATING PROFIT/NET SALES*100

34
  EARNINGS PER SHARE

The profitability of the shareholder‟s investment can be assessed by calculating the

earnings per share.

EARNINGS PER SHARE=PROFIT AFTER TAX & PREFRENCE

DIVIDEND/NUMBER OF EQUITY SHARES

 NET PROFIT RATIO

The net profit ratio establishes the relationship between the net profit (after tax)of the
firm and net sales. Net profit is obtained, after deducting operating expenses, interest and
taxes from gross profit

NET PROFIT RATIO= NET PROFIT/NET SALES*100

 DIVIDEND PAYOUT RATIO

Dividend Payout Ratio refers to the proportion of the earnings which has been
distributed to the shareholders as dividend. The company does not distribute all of its
earnings to equity shareholder The earnings not distributed are retained back in the business
and meant to be invested for the future growth prospects of the firm.

DIVIDEND PAYOUT RATIO=EQUITY DIVIDEND/PROFIT AFTER TAX&

PREFRENCE DIVIDEND*100

 TOTAL ASSETS TURNOVER RATIO

It measures the efficiency in the use of total assets. It shows the ratio between the total
assets and net sales of the company. From this ratio one can understand how the assets are
performing and being utilised in achieving the objectives of the company.

35
 TOTAL ASSETS TURNOVER RATIO=TOTAL ASSETS/NET SALES

 RETURN ON CAPITAL EMPLOYED

It is also known as “Return on investment” or “Rate of Return”. The return on

capital employed (ROCE) measures the proportion of adjusted earnings to the amount
of capital and debt required for a business to function. The return on capital employed is
a better measurement than return on equity, because ROCE shows how well a company
is using both its equity and debt to generate a return.

RETURN ON CAPITAL EMPLOYED=EARNINGS BEFORE

INTEREST AND TAX/CAPITAL EMPLOYED

 DEBT – EQUITY RATIO

The debt-equity (D/E) ratio is another tool of financial analysis. The debt equity-ratio
reflects the relative contribution of creditors and owners of business in the capital structure of
the firm. It is also called “External-Internal Equity „Ratio.

DEBT-EQUITY RATIO=TOTAL LIABILITIES/EQUITY

36
 5.1.2 ANALYSIS OF BHARAT PETROLEUM CORPORATION LIMITED

CURRENT RATIO

The below table and chart shows the current ratio of Bharat Petroleum Corporation
limited for past five years.

TABLE: 1 CURRENT RATIO OF BHARAT PETROLEUM CORPORATION FOR

PAST FIVE YEARS

Year Current asset Current liabilities Current Ratio

13-14 39651.90 38581.34 1.03
14-15 30285.46 32637.50 0.93
15-16 28075.57 31698.56 0.89
16-17 34258.12 43544.79 0.79
17-18 36881.48 44792.11 0.82

CHART: 1 CURRENT RATIO OF BHARAT PETROLEUM CORPORATION FOR

PAST FIVE YEARS

Current Ratio

1.20

1.00

0.80

0.60

0.40

0.20

0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Current ratio indicates the overall liquidity of the business.From the above table and
chart it is inferred that the current ratio is high in the year 2014 when compared to the
succeeding years.

37
LIQUID RATIO

The below table and chart shows the liquid ratio of Bharat Petroleum Corporation
limited for past five years.

TABLE: 2 LIQUID RATIO OF BHARAT PETROLEUM CORPORATION LIMITED

FOR PAST FIVE YEARS

Year Liquid Assets Current Liabilities Liquid Ratio

13-14 20580.77 38581.34 0.53
14-15 15827.61 32637.50 0.48
15-16 14379.29 31698.56 0.45
16-17 14170.13 43544.79 0.33
17-18 15695.79 44792.11 0.35

CHART: 2 LIQUID RATIO OF BHARAT PETROLEUM CORPORATION LIMITED

FOR PAST FIVE YEARS

Liquid Ratio

0.60

0.50

0.40

0.30

0.20

0.10

0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Quick ratio indicates the quick liabilities of the business. From the above table and chart it is
inferred that the current ratio is high in the year 2014 when compared with other years.

38
OPERATING MARGIN RATIO

The below table and chart shows the operating margin ratio of Bharat Petroleum
Corporation limited for past five years.

TABLE: 3 OPERATING MARGIN RATIO OF BHARAT PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Year Operating Profit Net Sales Operating Profit Ratio

13-14 5948.98 260060.53 0.02
14-15 7415.51 238086.90 0.03
15-16 10651.18 189303.33 0.06
16-17 11042.79 242047.82 0.05
17-18 11198.01 277162.23 0.04

CHART: 3 OPERATING MARGIN RATIO OF BHARAT PETROLEUM

CORPORATION FOR PAST FIVE YEARS

Operating Profit Ratio

0.06

0.05

0.04

0.03

0.02

0.01

0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

The operating profit margin ratio indicates how much profit a company makes after paying
for variable costs of production. From the above table and chart it is inferred that the
operating profit margin ratio is high in the year 2016 when compared with other years.

39
NET PROFIT RATIO

The below table and chart shows net profit ratio of Bharat Petroleum Corporation
limited for past five years.

TABLE: 4 NET PROFIT RATIO OF BHARAT PETROLEUM CORPORATION FOR

PAST FIVE YEARS

Year Net Profit After Tax Net Sales Net Profit Ratio
13-14 4060.88 260060.53 0.02
14-15 5084.51 238086.90 0.02
15-16 7431.88 189303.33 0.04
16-17 8039.30 242047.82 0.03
17-18 7919.34 277162.23 0.03

CHART: 4 NET PROFIT RATIO OF BHARAT PETROLEUM CORPORATION

FOR PAST FIVE YEARS

Net Profit Ratio

0.040
0.035
0.030
0.025
0.020
0.015
0.010
0.005
0.000
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Net profit ratio indicates the profitability position of business. From the above table
and chart it is inferred that the Net profit ratio is high in the year 2016 when compared with
other years

40
TOTAL ASSET TURNOVER RATIO

The below table and chart shows Total Asset Turnover Ratioof Bharat Petroleum
Corporation limited for past Five years.

TABLE: 5 TOTAL ASSET TURNOVER RATIO OF BHARAT PETROLEUM

CORPORATION FOR PAST FIVE YEARS

Year Total Assets Net Sales Total Asset Turnover Ratio

13-14 72427.41 260060.53 0.28
14-15 69728.88 238086.90 0.29
15-16 75989.41 189303.33 0.40
16-17 91989.63 242047.82 0.38
17-18 100222.54 277162.23 0.36

CHART: 5 TOTAL ASSET TURNOVER RATIO OF BHARAT PETROLEUM

CORPORATION FOR PAST FIVE YEARS

Total Asset Turnover Ratio

0.50
0.40
0.30
0.20
0.10
0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Total assets turnover ratio indicates the utilization of resources of the business. From
the above table and chart it is inferred that the Dividend payout ratio is high in the year 2016
when compared with other years.

41
 RETURN ON CAPITAL EMPLOYED

The below table and chart shows the return on capital employed of Bharat Petroleum
Corporation limited for past five years.

TABLE: 6 RETURN ON CAPITAL EMPLOYED OF BHARAT PETROLEUM

CORPORATION FOR PAST FIVE YEARS

Year Profit before Interest & Tax Capital employed Return on capital employed
13-14 5948.98 23175.17 0.26
14-15 7415.51 25628.70 0.29
15-16 10651.18 32462.73 0.33
16-17 11042.79 33773.19 0.33
17-18 11198.01 39474.80 0.28

CHART: 6 RETURN ON CAPITAL EMPLOYED OF BHARAT PETROLEUM

CORPORATION FOR PAST FIVE YEARS

Return on capital employed

0.40
0.30
0.20
0.10
0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Return on capital employed is used to study the operational efficiency of the business.
It helps to assess the overall earning capacity of the capital employed. From the above table
and chart it is inferred that the Return on capital employed is higher in the years 2016 and
2017 when compared with other years

42
DEBT-EQUITY RATIO

The below table and chart shows Debt-Equity Ratio of Bharat Petroleum Corporation
limited for past five years.

TABLE: 7 DEBT- EQUITY RATIO OF BHARAT PETROLEUM CORPORATION

FOR PAST FIVE YEARS

Year Total Liabilities Total Equity Debt -Equity Ratio

13-14 52968.65 19458.76 2.72
14-15 47261.40 22467.48 2.10
15-16 48830.72 27158.69 1.80
16-17 62321.25 29668.38 2.10
17-18 66070.54 34152.00 1.93

CHART: 7 DEBT- EQUITY RATIO OF BHARAT PETROLEUM CORPORATION

FOR PAST FIVE YEARS

Debt -Equity Ratio

3.00

2.00

1.00

0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Debt equity-ratio reflects the relative contribution of creditors and shareholders of

business in the capital structure of the firm. From the above table and chart it is inferred that
the Debt equity-ratio is high in the year 2014 when compared with other years.

43
EARNING PER SHARE

The below table and chart shows Earning Per Share of Bharat Petroleum Corporation
limited for past five years.

TABLE: 8 EARNING PER SHAREOF BHARAT PETROLEUM CORPORATION

FOR PAST FIVE YEARS

No. of
Year Profit after tax & preference dividend Equity Earning Per Share
Shares
13-14 4060.88 72.31 56.16
14-15 5084.51 72.31 70.32
15-16 7431.88 72.31 102.78
16-17 8039.30 144.62 55.59
17-18 7919.34 216.93 36.51

CHART: 8 EARNING PER SHAREOF BHARAT PETROLEUM CORPORATION

FOR PAST FIVE YEARS

Earning Per Share

120.00

100.00

80.00

60.00

40.00

20.00

0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Earnings per share indicate the market value of equity shares of the company. From
the above table and chart it is inferred that the Earnings per share is high in the year 2016
when compared with other years.

44
DIVIDEND PAYOUT RATIO

The below table and chart shows Dividend Payout Ratio of Bharat Petroleum
Corporation limited for past five years.

TABLE: 9 DIVIDEND PAYOUT RATIO OF BHARAT PETROLEUM

CORPORATION FOR PAST FIVE YEARS

Earning Per
Year Dividend Per Equity Share Dividend Payout Ratio
Equity Share
13-14 17.00 56.16 0.30
14-15 22.50 70.32 0.32
15-16 15.00 102.78 0.15
16-17 1.00 55.59 0.02
17-18 7.00 36.51 0.19

CHART: 9 DIVIDEND PAYOUT RATIO OF BHARAT PETROLEUM

CORPORATION FOR PAST FIVE YEARS

Dividend Payout Ratio

0.40

0.30

0.20
0.10
0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Dividend pay-out ratio indicates the dividend policy of business. From the above table
and chart it is inferred that the Dividend payout ratio is high in the year 2015 when compared
with other years.

45
 5.1.3 ANALYSIS OF HINDUSTAN PETROLEUM CORPORATION LIMITED

CURRENT RATIO

The below table and chart shows current Ratio of Hindustan Petroleum Corporation
limited for past five years.

TABLE: 10 CURRENT RATIO OF HINDUSTAN PETROLEUM CORPORATION

FOR PAST FIVE YEARS

Year Current Asset Current Liabilities Current Ratio

13-14 39736.78 35307.26 1.13
14-15 27599.48 23695.30 1.16
15-16 27488.73 26789.04 1.03
16-17 32911.85 34755.50 0.95
17-18 36873.71 47377.35 0.78

CHART: 10 CURRENT RATIO OF HINDUSTAN PETROLEUM CORPORATION

FOR PAST FIVE YEARS

Current Ratio

1.20
1.00
0.80
0.60
0.40
0.20
0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Current ratio indicates the overall liquidity of the business. From the above table and
chart it is inferred that the current ratio is high in the year 2015 when compared to the
succeeding years.

46
LIQUID RATIO

The below table and chart shows Liquid Ratio of Hindustan Petroleum Corp limited
for the past five years.

TABLE: 11 LIQUID RATIO OF HINDUSTAN PETROLEUM CORPORATION

LIMITED FOR PAST FIVE YEARS

Year Liquid Assets Current Liabilities Liquid Ratio

13-14 20961.37 35307.26 0.59
14-15 14627.22 23695.30 0.62
15-16 14779.61 26789.04 0.55
16-17 14201.52 34755.5 0.41
17-18 18292.93 47377.35 0.39

CHART: 11 LIQUID RATIO OF HINDUSTAN PETROLEUM CORPORATION

LIMITED FOR PAST FIVE YEARS

Liquid Ratio

0.80
0.60
0.40
0.20
0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Quick ratio indicates the quick liabilities of the business. From the above table
and chart it is inferred that the liquid ratio is high in the year 2015 when compared with other
years.

47
OPERATING PROFIT RATIO

The below table and chart shows Operating Profit Ratio of Hindustan Petroleum Corp
limited for past Five years.

TABLE: 12 OPERATING PROFIT RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Year Operating Profit Net Sales Operating Profit Ratio

13-14 2673.88 223036.67 0.012

14-15 4149.65 206380.37 0.020

0.032
15-16 5743.61 179281.07

16-17 9020.84 213802.99 0.042

17-18 9201.93 244085.12 0.038

CHART: 12 OPERATING PROFIT RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Operating Profit Ratio

0.060

0.040

0.020

0.000
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

The operating profit margin ratio indicates how much profit a company makes after
paying for variable costs of production. From the above table and chart it is inferred that the
operating profit margin ratio is high in the year 2017 when compared with other years.

48
NET PROFIT RATIO

The below table and chart shows Net Profit Ratio of Hindustan Petroleum Corporation
limited for past five years.

TABLE: 13 NET PROFIT RATIO OF HINDUSTAN PETROLEUM CORPORATION

LIMITED FOR PAST FIVE YEARS

Year Net Profit After Tax Net Sales Net Profit Ratio
13-14 1733.77 223036.67 0.008
14-15 2733.26 206380.37 0.013
15-16 3862.74 179281.07 0.022
16-17 6208.80 213802.99 0.029
17-18 6357.07 244085.12 0.026

CHART: 13 NET PROFIT RATIO OF HINDUSTAN PETROLEUM CORPORATION

LIMITED FOR PAST FIVE YEARS

Net Profit Ratio

0.030

0.020

0.010

0.000
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Net profit ratio indicates the profitability position of the business. From the above
table and chart it is inferred that the Net Profit ratio is same in the year 2017 when compared
to the other years.

49
TOTAL ASSET TURNOVER RATIO

The below table and chart shows Total Asset Turnover Ratio of Hindustan Petroleum
Corporation limited for past five years.

TABLE: 14 TOTAL ASSET TURNOVER RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Year Total Assets Net Sales Total Asset Turnover Ratio

13-14 77578.09 223036.67 0.35
14-15 67550.64 206380.37 0.33
15-16 70470.93 179281.07 0.39
16-17 78463.91 213802.99 0.37
17-18 86807.22 244085.12 0.36

CHART: 14 TOTAL ASSET TURNOVER RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Total Asset Turnover Ratio

0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Total assets turnover ratio indicates the utilization of resources of the business. From
the above table and chart it is inferred that the Dividend payout ratio is high in the year 2016
when compared with other years.

50
RETURN ON CAPITAL EMPLOYED

The below table and chart shows there turn on capital employed of Hindustan
petroleum corporation limited for past five years.

TABLE: 15 RETURN ON CAPITAL EMPLOYED OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Profit before Interest & Capital Return on Capital

Year
Tax Employed Employed
13-
2615.51 34927.32 0.07
14
14-
4154.12 36441.41 0.11
15
15-
5738.07 36022.4 0.16
16
16-
9020.84 36098.71 0.25
17
17-
9201.93 31453.46 0.29
18

CHART:15 RETURN ON CAPITAL EMPLOYED OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Return on Capital Employed

0.30

0.20

0.10

0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Return on capital employed is used to study the operational efficiency of the

business.. It helps assess the overall earning of the capacity of the capital employed. From the
above table and chart it is inferred that the return on capital employed is Low in the year 2014
when compared to the other years.

51
DEBT-EQUITY RATIO

The below table and chart shows Debt-Equity Ratio of Hindustan petroleum
corporation limited for past five years.

TABLE: 16 DEBT- EQUITY RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Year Total Liabilities Total Assets Debt-Equity Ratio

13-14 77578.09 15012.16 5.17
14-15 67550.64 16022.09 4.22
15-16 70470.93 18356.10 3.84
16-17 78463.91 20347.41 3.86
17-18 86807.22 23948.22 3.62

CHART: 16 DEBT- EQUITY RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Debt-Equity Ratio

6.00

5.00

4.00

3.00

2.00

1.00

0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Debt equity-ratio reflects the relative contribution of creditors and shareholders of

business in the capital structure of the firm. From the above table and chart it is inferred that
the Debt equity-ratio is high in the year 2014 when compared to the other years.

52
EARNING PER SHARE

The below table and chart shows the Earning per share of Hindustan Petroleum
corporation limited for past five years.

TABLE: 17 EARNING PER SHARE OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Profit After Tax & Preference No. of equity Earnings Per

Year
Dividend share Share
13-14 1733.77 33.8627 51.199
14-15 2733.26 33.8627 80.716
15-16 3862.74 33.8627 114.071
16-17 6208.8 101.5881 61.117
17-18 6357.07 152.3822 41.719

CHART: 17 EARNING PER SHARE OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Earnings Per Share

150

100

50

0
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Earnings per share indicate the market value of equity shares of the company. From
the above table and chart it is inferred that the Earnings per share is high in the year 2016
when compared with other years.

53
DIVIDEND PAYOUT RATIO

The below table and chart shows Dividend Payout Ratio of Hindustan Petroleum
Corporation limited for past five years.

TABLE: 18 DIVIDEND PAYOUT RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Year Dividend Per Share Earning Per Share Dividend payout ratio
13-14 15.50 51.199 0.30
14-15 24.50 80.716 0.30
15-16 16.00 114.071 0.14
16-17 1.10 61.117 0.02
17-18 2.50 41.719 0.06

CHART: 18 DIVIDEND PAYOUT RATIO OF HINDUSTAN PETROLEUM

CORPORATION LIMITED FOR PAST FIVE YEARS

Dividend payout ratio

0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Dividend pay-out ratio indicates the dividend policy of business. From the above table
and chart it is inferred that the Dividend payout ratio is high in the year 2014&2015 when
compared with other years.

54
 5.1.4 ANALYSIS OF INDIAN OIL CORPORATION LIMITED

CURRENT RATIO

The below table and chart shows Current Ratio of Indian oil Corporation limited for
past Five years.

TABLE: 19 CURRENT RATIO OF INDIAN OIL CORPORATION FOR PAST FIVE

YEARS

Year Current Assets Current Liabilities Current Ratio

13-14 134577.77 135320.24 0.99
14-15 95931.02 96801.35 0.99
15-16 89349.74 98208.65 0.91
16-17 92728.35 108522.78 0.85
17-18 102893.29 135882.28 0.76

CHART: 19 CURRENT RATIO OF INDIAN OIL CORPORATION FOR PAST FIVE

YEARS

Current Ratio

1.00

0.80

0.60

0.40

0.20

0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Current ratio indicates the overall liquidity of the business. From the above table and
chart it is inferred that the current ratio is high in the year 2014 and 2015 when compared to
the succeeding years.

55
LIQUID RATIO

The below table and chart shows Liquid Ratio of Indian oil Corporation limited for
past Five years.

TABLE: 20 LIQUID RATIO OF INDIAN OIL CORPORATION LIMITED FOR

PAST FIVE YEARS

Year Liquid Assets Current Liabilities Liquid Ratio

13-14 69880.40 135320.24 0.52
14-15 50387.17 96801.35 0.52
15-16 51067.34 98208.65 0.52
16-17 29138.05 108522.78 0.27
17-18 36249.32 135882.28 0.27

CHART: 20 LIQUID RATIO OF INDIAN OIL CORPORATION LIMITED FOR

PAST FIVE YEARS

Liquid Ratio

0.60

0.40

0.20

0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Quick ratio indicates the quick liabilities of the business. From the above table
and chart it is inferred that the liquid ratio is high in the year 2014, 2015 & 2016 when
compared with other years

56
OPERATING PROFIT RATIO

The below table and chart shows Operating Profit Ratio of Indian Oil Corporation
limited for past Five years.

TABLE: 21 OPERATING PROFIT RATIO OF INDIAN OIL CORPORATION

LIMITED FOR PAST FIVE YEARS

Year Operating Profit Net Sales Operating Profit Ratio

13-14 8275.01 473210.09 0.017
14-15 6334.76 437526.13 0.014
15-16 15879.18 355926.62 0.045
16-17 26321.24 445372.92 0.059
17-18 32564.28 506427.59 0.064

CHART: 21 OPERATING PROFIT RATIO OF INDIAN OIL CORPORATION

LIMITED FOR PAST FIVE YEARS

Operating Profit Ratio

0.080
0.060
0.040
0.020
0.000
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

The operating profit margin ratio indicates how much profit a company makes after
paying for variable costs of production. From the above table and chart it is inferred that the
operating profit margin ratio is high in the year 2018 when compared with other years.

57
NET PROFIT RATIO

The below table and chart shows Net Profit Ratio of Indian Oil Corporation limited
For past Five years.

TABLE 22 NET PROFIT RATIO OF INDIAN OIL CORPORATION LIMITED FOR

PAST FIVE YEARS

Year Net Profit After Ratio Net Sales Net Profit Ratio
13-14 7019.09 473210.09 0.015
14-15 5273.63 437526.13 0.012
15-16 11605.72 355926.62 0.033
16-17 19106.40 445372.92 0.043
17-18 21346.12 506427.59 0.042

CHART: 22 NET PROFIT RATIO OF INDIAN OIL CORPORATION LIMITED

FOR PAST FIVE YEARS

Net Profit Ratio

0.050

0.040

0.030

0.020

0.010

0.000
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Net profit ratio indicates the profitability position of the business. From the above
table and chart it is inferred that the Net Profit ratio is same in the year 2017 when compared
to the previous year.

58
TOTAL ASSET TURNOVER RATIO

The below table and chart shows Total Asset Turnover Ratioof Indian Oil Corporation
limited for past Five years.

TABLE: 23 TOTAL ASSET TURNOVER RATIO OF INDIAN OIL CORPORATION

LIMITED FOR PAST FIVE YEARS

Total Asset Turnover

Year Total Asset Net Sales Ratio
13-14 252413.78 473210.09 0.533
14-15 219849.47 437526.13 0.502
15-16 242024.27 355926.62 0.680
16-17 259213.27 445372.92 0.582
17-18 280739.91 506427.59 0.554

CHART:23 TOTAL ASSET TURNOVER RATIO OF INDIAN OIL CORPORATION

LIMITED FOR PAST FIVE YEARS

Total Asset Turnover Ratio

0.800

0.600

0.400
0.200
0.000
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Total Asset Turnoverratio indicates the utilization of resources position of the

business. From the above table and chart it is inferred that the Net Profit ratio Lower in the
year 2016 when compared to the previous year.

59
RETURN ON CAPITAL EMPLOYED

The below table and chart shows the return on capital employed of Indian Oil
Corporation limited For past Five years.

TABLE: 24 RETURN ON CAPITAL EMPLOYEDOF INDIAN OIL CORPORATION

LIMITED FOR PAST FIVE YEARS

Profit Before Interest & Return on Capital

Year Tax Capital Employed Employed
13-14 9925.51 96085.55 0.103
14-15 7995.29 101704.64 0.079
15-16 17258.55 119575.24 0.144
16-17 26321.24 102822.91 0.256
17-18 32564.28 95286.75 0.342

CHART: 24 RETURN ON CAPITAL EMPLOYED OF INDIAN OIL

CORPORATION LIMITED FOR PAST FIVE YEARS

Return on Capital Employed

0.350
0.300
0.250
0.200
0.150
0.100
0.050
0.000
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Return on capital employed is used to study the operational efficiency of the business.
It helps to assess the overall earning capacity of the capital employed. From the above table
and chart it is inferred that the Return on capital employed is higher in the years 2016 and
2018 when compared with other years.

60
DEPT-EQUITY RATIO

The below table and chart shows Debt-Equity Ratio of Indian Oil Corporation limited
for past five years.

TABLE: 25 DEBT- EQUITY RATIO OF INDIAN OIL CORPORATION LIMITED

FOR PAST FIVE YEARS

Year Total Liability Total Equity Debt-Equity Ratio

13-14 252413.78 65992.08 3.825
14-15 219849.47 67969.97 3.235
15-16 242024.27 75993.96 3.185
16-17 259213.27 99728.72 2.599
17-18 280739.91 110171.02 2.548

CHART: 25 DEBT- EQUITYRATIO OF INDIAN OIL CORPORATION LIMITED

FOR PAST FIVE YEARS

Debt-Equity Ratio

4.000
3.000
2.000
1.000
0.000
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Debt equity-ratio reflects the relative contribution of creditors and shareholders of

business in the capital structure of the firm. From the above table and chart it is inferred that
the Debt equity-ratio is high in the year 2014 when compared with other years.

61
EARNING PER SHARE

The below table and chart shows Earning per share of Indian Oil Corporation limited for past
Five years.

TABLE: 26 EARNING PER SHAREOF INDIAN OIL CORPORATION LIMITED

FOR PAST FIVE YEARS

Profit after tax & preference

Year dividend No. of Equity Share Earning Per Share
13-14 7019.09 242.795 28.91
14-15 5273.63 242.795 21.72
15-16 11605.72 242.795 47.80
16-17 19106.40 485.590 39.35
17-18 21346.12 971.181 21.98

CHART: 26 EARNING PER SHAREOF INDIAN OIL CORPORATION LIMITED

FOR PAST FIVE YEARS

Earning Per Share

50.00

40.00

30.00

20.00

10.00

0.00
13-14 14-15 15-16 16-17 17-18

INTERPRETATION

Earnings per share indicate the market value of equity shares of the company. From
the above table and chart it is inferred that the Earnings per share is high in the year 2016
when compared with other years.

62
DIVIDENT PAYOUT RATIO

The below table and chart shows Dividend Payout Ratio of Indian Oil Corporation
limited for past five years.

TABLE: 27 DIVIDEND PAYOUT RATIO OF INDIAN OIL CORPORATION

LIMITED FOR PAST FIVE YEARS

Year Dividend Per Share Earning Per Share Dividend Payout Ratio
13-14 8.70 28.91 0.30
14-15 6.60 21.72 0.30
15-16 8.50 47.80 0.18
16-17 1.00 39.35 0.03
17-18 2.00 21.98 0.09

CHART: 27 DIVIDEND PAYOUT RATIO OF INDIAN OIL CORPORATION

LIMITED FOR PAST FIVE YEARS

Dividend Payout Ratio

0.40
0.30
0.20
0.10
0.00
13-14
14-15
15-16
16-17
17-18

INTERPRETATION

Dividend pay-out ratio indicates the dividend policy of business. From the above table
and chart it is inferred that the Dividend payout ratio is high in the year 2015 when compared
with other years.

63
5.2 COMPARATIVE ANALYSIS
The below table shows the five years average ratios of each company and the
comparison made.

TABLE: 28 FIVE YEARS AVERAGE RATIOS OF BHARAT PETROLEUM CORP

LTD., HINDUSTAN PETROLEUM CORP LTD & INDIAN OIL CORP LTD.

BHARAT HINDUSTAN
COMPANIES/ INDIAN OIL
PETROLEUM PETROLEUM
RATIO CORPORATION
CORPORATION CORPORATION
CURRENT
0.89 1.01 0.90
RATIO

LIQUID RATIO 0.43 0.51 0.42

OPERATING
0.04 0.03 0.04
PROFIT RATIO

NET PROFIT
0.03 0.02 0.03
RATIO
TOTAL ASSET
TURNOVER 0.34 0.36 0.57
RATIO
RETURN ON
CAPITAL 0.30 0.18 0.19
EMPLOYED
DEBT-EQUITY
2.13 4.14 3.08
RATIO

EARNING PER
64.27 69.76 31.95
SHARE

DIVIDEND
0.20 0.16 0.18
PAYOUT RATIO

64
 CHART: 28 FIVE YEARS AVERAGE RATIOS OF BHARAT PETROLEUM CORP
LTD, HINDUSTAN CORP LTD & INDIAN OIL CORP LTD.

80.00
70.00
60.00
50.00
40.00
30.00 BHARAT PETROLEUM
20.00 CORPORATION
10.00 HINDUSTAN PETROLEUM
CORPORATION
0.00
INDIAN OIL
CORPORATION

INTERPRETATION:

From the above table and chart it is inferred that, the liquidity position of Hindustan
petroleum Corp is high when compared to other companies. The quick ratio of Hindustan
Petroleum Corp is high when compared with other companies. The Operating profit of Indian
Oil Corp is high when compared with other companies. The profitability position of Indian
Oil Corp is high when compared with other companies. The total asset turnover ratio of
Indian Oil Corp is high when compared with other companies. The return on capital
employed of Bharat Petroleum Corp is high when compared with other companies. The debt-
equity ratio of Hindustan Petroleum Corp is high when compared with other companies. The
market value of Hindustan Petroleum Corp is high when compared with other companies.
The pay-out ratio of Bharat petroleum Corp is high when compared with other companies.

65
 CHAPTER - VI
FINDINGS AND CONCLUSIONS

6.1 FINDINGS

A study of various annual reports of three oil companies for the past five years 2014-2018
and analysis of ratios and comparative analysis have been done in previous chapter. The
findings and conclusion of the study are as under:

FINDINGS OF RATIO ANALYSIS:

BHARAT PETROLEUM CORPORATION LIMITED:

 The liquidity position of the company decision over a period and further started
increasing.
 The quick ratio of the company is recovering over a study period but it is declining in
the current year so it not satisfying.
 The operating profit generated by the company is stable over a period of last 4years of
the study period but it is declined in the current year so it not satisfactory.
 The profitability position of the company is recovering after a huge loss in the year
2014. Current profitability position is negatively better compared with other year.
 The Total Asset Turnover Ratio of the company remains constant with loss changes
during the study period and it is found that the company utilized its resources in
efficient manner.
 Return on Capital Employed of the company is steady in preceding 4years of the
current year of the study. It is declined in the current year so it not satisfactory.
 Debt Equity Ratio of the company is fluctuating over a period of the study and its
leveraged capital structure is at a satisfactory level.
 The market value of the company is in the bad position and the earning per share of
the company is negative over a period of last 3years.
 The pay-out ratio of the company is declined in the trend over the study period

66
FINDINGDS OF HINDUSTAN PERTOLEUM CORPORATION LIMITED:

 The liquidity position is stable over a period of last 3years but it is declined in the
current year so it is not satisfactory.
 The quick ratio of the company is recovering over a study period but it is declined in
the current year so it is not satisfactory.
 The operating profit generated by the company is stable over a period of last 5years
and it is satisfactory.
 The profitability position of the company is stable over the period of the study.
 Current year profitability trend is decreasing and it is not satisfactory.
 The total asset turnover ratio of the company is fluctuating during the study period
and it is found that decreasing in last 2 years.
 Return on capital employed of the company is at increasing trend and it is satisfactory.
 Debt equity ratio of the company decline in the trend over a period and its leverage
capital is slightly decreasing in the current year.
 The market value of the company is in good position and earnings per share are in
positive trend over a period of last 5 years.
 The pay-out ratio of the company is fluctuating during the study period.

67
FINDINGS OF INDIAN OIL CORPORATION LIMITED:

 The liquidity position of the company is at decreasing trend and it makes use of the
less resources. It should increase it in future.
 The quick ratio of the company is decreasing steeply over a study period and it
should gradually increase.
 The operating profit generated by the company is increasing steeply over a period of
last 5years and it is satisfactory.
 The profitability position of the company is in increasing trend over a period of the
study. Profitability trend is increasing and it is satisfactory.
 The total asset turnover ratio of the company is fluctuating during the study period.
 Return on capital employed of the company is increasing in trend over the period of
the study. It is satisfactory that there is optimum utilization of capital employed.
 Debt equity ratio of the company is at decreasing trend and it is at its maximum in the
year 2014.
 Profitability position of the company is increasing over the period of the study and it
started declined over last 2 years and is not satisfactory.
 The pay-out ratio of the company is fluctuating during the study period and it is
declined in the last two years.

68
FINDINGS OF COMPARITIVE ANALYSIS:

 The liquidity position of Hindustan petroleum Corp is high when compared to other
companies.
 The quick ratio of Hindustan Petroleum Corp is high when compared with other
companies.
 The Operating profit of Indian Oil Corp is high when compared with other companies.
 The profitability position of Indian Oil Corp is high when compared with other
companies.
 The total asset turnover ratio of Indian Oil Corp is high when compared with other
companies.
 The return on capital employed of Bharat Petroleum Corp is high when compared
with other companies.
 The debt-equity ratio of Hindustan Petroleum Corp is high when compared with other
companies.
 The market value of Hindustan Petroleum Corp is high when compared with other
companies.
 The pay-out ratio of Bharat petroleum Corp is high when compared with other
companies.

69
 6.2 CONCLUSIONS

The above study aims at analysing the financial performance of selected oil
companies namely Bharat Petroleum Corp Limited, Hindustan Petroleum Corp Limited,
Indian Oil Corp Limited. During the study period there is fluctuation in sales of selected oil
companies and there is an increase in trend of profit of selected oil companies. Thus
companies have good future in foreseeable future.

The study found that there is fluctuating trend in overall performance of the selected
oil companies during the study period. It has been found that there is an optimum utilisation
of leveraged capital and they can further improve in future period if they concentrate in
obtaining short term resources. After analysing all the aspects, concerned with this study it is
found that the market value of Hindustan Petroleum Corp ltd is high when compared with
other companies. Apart from market value Bharat Petroleum Corp Ltd is performing well
when compared to other companies.

70
 BIBLIOGRAPHY

BOOKS REFERRED

S.N. Maheshwari – Management Accounting

M.Y. Khan & P.K. Jain – Financial Management

T.S. Reddy and Y. Hari Prasad Reddy – Management Accounting

M.C. Shukla, T.S. Grewals & S.C. Gupta – Advanced Accounts

WEBSITES

www.bharatpetroleum.com

www.hindustanpetroleum.com

www.indianoilcorp.com

www.investopedia.com

71
 ANNEXURE
BALANCE SHEET OF BPCL

RS. IN. CRORES

PARTICULARS Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
Source of Funds
Total Share Capital 1,966.88 1,311.25 723.08 723.08 723.08
Equity Share Capital 1,966.88 1,311.25 723.08 723.08 723.08
Reserves 32,185.12 28,357.13 26,435.61 21,744.40 18,735.68
Networth 34,152.00 29,668.38 27,158.69 22,467.48 19,458.76
Secured Loans 3,215.09 3,345.34 1,448.83 1,647.77 3,525.16
Unsecured Loans 19,636.14 17,658.46 12,260.82 10,129.51 16,466.90
Total Debt 22,851.23 21,003.80 13,709.65 11,777.28 19,992.06
Total Liabilities 57,003.23 50,672.18 40,868.34 34,244.76 39,450.82
Application Of Funds
Gross Block 49,053.97 35,101.80 46,382.34 41,677.68 38,048.55
Less: Accum.
Depreciation 6,076.34 3,664.89 22,914.55 21,362.62 19,009.04
Net Block 42,977.63 31,436.91 23,467.79 20,315.06 19,039.51
Capital Work in
Progress 4,407.80 11,622.92 12,617.93 7,665.68 3,065.10
Investments 15,820.58 14,601.45 12,973.69 12,391.14 11,846.89
Inventories 20,873.75 19,798.01 13,696.28 14,457.85 19,071.13
Sundry Debtors 5,152.60 4,758.18 2,165.02 2,607.67 4,080.16

Cash and Bank Balance 88.07 64.69 2,067.35 1,360.20 203.76

Total Current Assets 26,114.42 24,620.88 17,928.65 18,425.72 23,355.05
Loans and Advances 10,902.11 9,707.47 9,001.35 10,931.28 15,120.86
Total CA, Loans &
Advances 37,016.53 34,328.35 26,930.00 29,357.00 38,475.91
Current Liabilities 40,337.96 38,148.73 30,938.39 30,799.91 29,150.69
Provisions 2,881.35 3,168.72 4,182.68 4,684.21 3,825.90
Total CL & Provisions 43,219.31 41,317.45 35,121.07 35,484.12 32,976.59
Net Current Assets -6,202.78 -6,989.10 -8,191.07 -6,127.12 5,499.32
Total Assets 57,003.23 50,672.18 40,868.34 34,244.76 39,450.82

72
 STATEMENT OF PROFIT AND LOSS OF BPCL

RS. IN CRORES

PARTICULARS Mar-18 Mar-17 Mar-16 Mar-15 Mar-14

INCOME
Revenue From Operations 2,76,400.89 2,41,859.48 2,17,805.81 2,53,073.22 2,70,910.31
Less: Excise/Sevice Tax/Other
Levies 40,849.13 39,837.25 28,707.71 15,167.96 10,976.82
Revenue From Operations [Net] 2,35,551.76 2,02,022.23 1,89,098.10 2,37,905.26 2,59,933.49
Other Operating Revenues 761.34 188.34 205.23 181.64 127.04
Total Operating Revenues 2,36,313.10 2,02,210.57 1,89,303.33 2,38,086.90 2,60,060.53
Other Income 3,010.88 2,600.68 2,012.16 2,199.96 1,468.66
Total Revenue 2,39,323.98 2,04,811.25 1,91,315.49 2,40,286.86 2,61,529.19
EXPENSES
Cost Of Materials Consumed 81,467.45 67,710.71 61,032.44 94,424.39 1,09,197.43
Purchase Of Stock-In Trade 1,25,462.73 1,14,220.09 1,00,732.00 1,17,051.71 1,30,897.87
Changes In Inventories Of FG,WIP
And Stock-In Trade 320.6 -5,577.61 724.42 4,513.32 -2,030.30
Employee Benefit Expenses 3,430.98 3,429.46 2,879.05 2,085.60 2,896.35
Finance Costs 833.25 495.87 562.94 583.1 1,359.08
Depreciation And Amortisation
Expenses 2,648.48 1,891.32 1,854.30 2,516.02 2,246.82
Other Expenses 13,962.48 11,598.62 12,879.16 11,697.21 11,012.96
Total Expenses 2,28,125.97 1,93,768.46 1,80,664.31 2,32,871.35 2,55,580.21

Profit/Loss Before
Exceptional, ExtraOrdinary
Items And Tax 11,198.01 11,042.79 10,651.18 7,415.51 5,948.98
Profit/Loss Before Tax 11,198.01 11,042.79 10,651.18 7,415.51 5,948.98
Current Tax 2,110.00 2,210.00 2,684.00 2,010.00 2,275.00
Deferred Tax 1,434.66 904.73 520.64 347.36 -294.82
Tax For Earlier Years -265.99 -111.24 14.66 -26.36 -92.08
Total Tax Expenses 3,278.67 3,003.49 3,219.30 2,331.00 1,888.10
Profit/Loss After Tax And Before
ExtraOrdinary Items 7,919.34 8,039.30 7,431.88 5,084.51 4,060.88
Profit/Loss From Continuing
Operations 7,919.34 8,039.30 7,431.88 5,084.51 4,060.88
Profit/Loss For The Period 7,919.34 8,039.30 7,431.88 5,084.51 4,060.88

73
BALANCE SHEET OF HPCL

RS. IN CRORES

PARTICULARS Mar-17 Mar-16 Mar-15 Mar-14

Mar-18

EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 9,478.69 4,739.34 2,369.67 2,427.95 2,427.95
Total Share Capital 9,478.69 4,739.34 2,369.67 2,427.95 2,427.95
Reserves and Surplus 1,00,692.33 94,989.38 85,764.64 65,542.02 63,564.13
Total Reserves and
1,00,692.33 94,989.38 85,764.64 65,542.02 63,564.13
Surplus
Total Shareholders
1,10,171.02 99,728.72 88,134.31 67,969.97 65,992.08
Funds
NON-CURRENT LIABILITIES
Long Term
18,717.60 20,312.04 24,937.56 32,731.26 31,683.58
Borrowings
Deferred Tax
12,019.57 6,759.23 6,858.99 6,720.21 5,616.18
Liabilities [Net]
Other Long Term
1,926.12 1,173.96 18,156.92 15,216.48 13,411.58
Liabilities
Long Term Provisions 2,023.32 2,926.98 2,386.29 410.2 390.12
Total Non-Current
34,686.61 31,172.21 52,339.76 55,078.15 51,101.46
Liabilities
CURRENT LIABILITIES
Short Term
36,807.56 30,072.76 17,545.81 16,979.31 48,915.54
Borrowings
Trade Payables 33,106.05 30,134.29 22,331.82 29,199.77 35,697.29
Other Current
51,807.07 49,180.56 30,369.49 23,310.68 24,319.15
Liabilities
Short Term Provisions 14,161.60 18,924.73 9,782.98 27,311.59 26,388.26
Total Current
1,35,882.28 1,28,312.34 80,030.10 96,801.35 1,35,320.24
Liabilities
Total Capital And
2,80,739.91 2,59,213.27 2,20,504.17 2,19,849.47 2,52,413.78
Liabilities
ASSETS
NON-CURRENT ASSETS
Tangible Assets 1,12,887.65 1,06,900.73 90,594.59 65,624.77 62,256.62
Intangible Assets 1,039.67 978.76 752.38 626.7 692.17
Capital Work-In-
13,860.99 10,223.36 20,329.56 35,563.98 33,150.64
Progress
Intangible Assets
487.44 514.46 695.52 759.52 728.59
Under Development
Fixed Assets 1,28,275.75 1,18,617.31 1,12,372.05 1,02,574.97 96,828.02
Non-Current 39,088.94 40,109.19 30,085.66 16,628.58 16,311.49

74
Investments
Long Term Loans And
2,031.01 1,096.83 1,127.78 4,620.34 4,626.48
Advances
Other Non-Current
8,289.24 6,895.37 6,227.97 94.56 70.02
Assets
Total Non-Current
1,77,684.94 1,66,718.70 1,49,813.46 1,23,918.45 1,17,836.01
Assets
CURRENT ASSETS
Current Investments 8,399.32 7,195.41 7,095.74 7,270.91 7,282.70
Inventories 65,313.21 62,240.87 38,739.11 45,543.85 64,697.37
Trade Receivables 10,116.52 8,502.37 7,548.60 6,758.17 11,023.10
Cash And Cash
81.36 86.5 512.94 111.9 2,608.53
Equivalents
Short Term Loans And
467.51 1,747.93 732.86 31,451.69 41,574.33
Advances
OtherCurrentAssets 18,677.05 12,721.49 16,061.46 4,794.50 7,391.74
Total Current Assets 1,03,054.97 92,494.57 70,652.15 95,931.02 1,34,577.77
Total Assets 2,80,739.91 2,59,213.27 2,20,504.17 2,19,849.47 2,52,413.78

75
STATEMENT OF PROFIT AND LOSS OF HPCL

RS. IN CRORES

PARTICULARS Mar-18 Mar-17 Mar-16 Mar-15 Mar-14

INCOME
Revenue From
4,97,496.59 4,38,770.99 3,99,105.49 4,50,755.58 4,57,571.10
Operations
Less: Excise/Service
82,388.89 85,499.75 59,651.56 30,407.77 23,904.04
Tax/Other Levies
Revenue From
4,15,107.70 3,53,271.24 3,39,453.93 4,20,347.81 4,33,667.06
Operations [Net]
Other Operating
8,931.00 6,670.91 7,722.50 17,178.32 39,543.03
Revenues
Total Operating
4,24,038.70 3,59,942.15 3,47,176.43 4,37,526.13 4,73,210.09
Revenues
Other Income 3,414.62 4,200.62 2,322.16 4,144.05 3,417.29
Total Revenue 4,27,453.32 3,64,142.77 3,49,498.59 4,41,670.18 4,76,627.38
EXPENSES
Cost Of Materials
1,88,780.12 1,56,950.55 1,42,265.53 2,05,049.94 2,27,012.01
Consumed
Purchase Of Stock-In
1,52,117.55 1,41,925.49 1,43,628.81 1,77,533.90 1,96,237.15
Trade
Changes In
Inventories Of
2,327.50 -15,259.80 3,479.20 8,216.07 -1,153.00
FG,WIP And Stock-In
Trade
Employee Benefit
10,079.41 9,718.92 7,114.02 7,104.78 6,618.97
Expenses
Finance Costs 3,448.44 3,445.43 3,089.89 3,435.27 5,084.42
Depreciation And
Amortisation 7,074.97 6,227.65 4,818.57 4,528.66 5,760.09
Expenses
Other Expenses 31,683.37 35,744.77 29,640.28 29,466.80 28,792.73
Less: Inter Unit /
Segment / Division 622.32 931.48 0.00 0.00 0.00
Transfer
Total Expenses 3,94,889.04 3,37,821.53 3,34,036.30 4,35,335.42 4,68,352.37

Profit/Loss Before
Exceptional, 32,564.28 26,321.24 15,462.29 6,334.76 8,275.01
ExtraOrdinary
Items And Tax
Exceptional Items 0.00 0.00 1,364.25 1,668.09 1,746.80
Profit/Loss Before
32,564.28 26,321.24 16,826.54 8,002.85 10,021.81
Tax
Tax Expenses-
Continued

76
Operations
Current Tax 7,276.45 7,460.29 3,747.89 1,262.98 2,802.90
Deferred Tax 3,941.71 -245.45 1,836.42 1,597.39 103.52
Total Tax Expenses 11,218.16 7,214.84 5,584.31 2,722.26 2,906.42
Profit/Loss After Tax
And Before 21,346.12 19,106.40 11,242.23 5,280.59 7,115.39
ExtraOrdinary Items
Profit/Loss From
Continuing 21,346.12 19,106.40 11,242.23 5,273.03 7,019.09
Operations
Profit/Loss For The
21,346.12 19,106.40 11,242.23 5,273.03 7,019.09
Period

77
BALANCE SHEET OF INDIAL OIL CORP LTD

RS. IN CRORES

PARTICULARS Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

Sources Of Funds
Total Share Capital 1524.21 1016.27 339.01 339.01 339.01
Equity Share Capital 1524.21 1016.27 339.01 339.01 339.01
Reserves 22424.01 19331.14 18017.09 15683.08 14673.15
Networth 23948.22 20347.41 18356.1 16022.09 15012.16
Secured Loans 2719.83 410.84 5147.29 3398.31 4262.57
Unsecured Loans 16873.13 16759.72 9374.73 13657.33 27667.48
Total Debt 19592.96 17170.56 14522.02 17055.64 31930.05
Total Liabilities 43541.18 37517.97 32878.12 33077.73 46942.21

Application Of Funds
Gross Block 45594.98 41104.71 54825.1 47971.09 42287.19
Less: Accum. Depreciation 7623.27 4972.83 21379.33 18908.28 16374.95
Net Block 37971.71 36131.88 33445.77 29062.81 25912.24
Capital Work in Progress 3985.39 1810.48 0 3474.42 4585.56
Investments 11105.1 10918.6 10994.68 11241.48 10859.87
Inventories 18420.22 18576.28 12709.12 12972.26 18775.41
Sundry Debtors 5572.91 4064.21 4192.66 3603.05 5465.95
Cash and Bank Balance 1194.11 33.67 19.69 17.07 34.71
Total Current Assets 25187.24 22674.16 16921.47 16592.38 24276.07
Loans and Advances 8557.78 6934.73 7232.07 7179.55 11944.35
Total CA, Loans & Advances 33745.02 29608.89 24153.54 23771.93 36220.42
Current Liabilities 40680.57 38361.06 35436.02 31493.92 28306.24
Provisions 2585.47 2590.82 2156.79 2978.99 2329.64
Total CL & Provisions 43266.04 40951.88 37592.81 34472.91 30635.88
Net Current Assets -9521.02 -11342.99 -13439.27 -10700.98 5584.54
Total Assets 43541.18 37517.97 31001.18 33077.73 46942.21

78
 STATEMENT OF PROFIT AND LOSS OF INDIAN OIL CORP LTD

RS. IN CRORES

PARTICULARS Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

INCOME
Revenue From
243226.66 213488.95 197744.28 217061.11 232188.35
Operations [Gross]
Less: Excise/Sevice
24752.52 26779.28 18463.21 10680.74 9151.68
Tax/Other Levies
Revenue From
218474.14 186709.67 179281.07 206380.37 223036.67
Operations [Net]
Other Operating
858.46 380.87 290.12 245.81 234.66
Revenues
Total Operating
219332.6 187090.54 179571.19 206626.18 223271.33
Revenues
Other Income 1849.46 1448.08 1138.05 1168.41 974.45
Total Revenue 221182.06 188538.62 180709.24 207794.59 224245.78
EXPENSES
Cost Of Materials
51186.3 45137.66 40523.83 56158.44 61962.49
Consumed
Purchase Of Stock-In
142455.74 122731.74 115948.43 129278.36 145137.95
Trade
Operating And Direct
5871.09 5331.99 5675.83 5257.28 5056.48
Expenses
Changes In Inventories
Of FG,WIP And Stock- 804.54 -4454.06 1757.39 4788.8 -547.87
In Trade
Employee Benefit
2858.52 2946.08 2314.53 2414.66 2030.3
Expenses
Finance Costs 566.71 535.65 640.14 706.59 1336.36
Depreciation And
2752.75 2535.28 2659.44 1978.76 2201.94
Amortisation Expenses
Other Expenses 5484.48 4753.44 5446.04 3062.05 4394.25
Total Expenses 211980.13 179517.78 174965.63 203644.94 221571.9

Profit/Loss Before Exceptional,9201.93

ExtraOrdinary
9020.84
Items And 4149.65 2673.88
Tax 5743.61
Profit/Loss Before Tax 9201.93 9020.84 5743.61 4149.65 2673.88
Tax Expenses-Continued
Operations
Current Tax 2570.98 2236.24 1429.93 1015.56 744.17
Deferred Tax 419.56 628.28 0 0 0
Tax For Earlier Years -145.68 -52.48 565.78 432.77 117.75
Total Tax Expenses 2844.86 2812.04 -120.38 -27.47 19.82
Profit/Loss After Tax 6357.07 6208.8 1875.33 1420.86 881.74

79
And Before
ExtraOrdinary Items
Profit/Loss From
6357.07 6208.8 3868.28 2728.79 1792.14
Continuing Operations
Profit/Loss For The
6357.07 6208.8 3862.74 2733.26 1733.77
Period

80