Financial Performance Analysis of Steel Authority of India Limited (Sail)

FINANCIAL PERFORMANCE ANALYSIS OF
STEEL AUTHORITY OF INDIA LIMITED (SAIL)
Thesis submitted to the

BHARATHIDASAN UNIVERSITY, TIRUCHIRAPALLI
for the award of the degree of
DOCTOR OF PHILOSOPHY IN COMMERCE
Submitted by
K.PATTABIRAMAN, M.Com., M.Phil.,
Under the Guidance of

Dr.K.KUMAR, M.Com., M.Phil.,., Ph.D.,
POST GRADUATE AND RESEARCH DEPARTMENT OF COMMERCE

NATIONAL COLLEGE (AUTONOMOUS)
(Nationally Re-Accredited with “A” Grade by NAAC)
Recognised as a COLLEGE WITH POTENTIAL FOR EXCELLENCE BY UGC
TIRUCHIRAPALLI 620 001
JULY 2015
Dr.K.KUMAR, M.Com., M.Phil., Ph.D.,
Research Advisor & Associate Professor
Post Graduate & Research Department of Commerce
National College (Autonomous)
Tiruchirapalli 620 001
CERTIFICATE
This is to certify that the thesis entitled, FINANCIAL
PERFORMANCE ANALYSIS OF STEEL AUTHORITY OF INDIA
LIMITED (SAIL), submitted by K.PATTABIRAMAN, M.Com.,
M.Phil., for the award of Degree of Doctor of Philosophy in Commerce has
been carried out by her independently under my guidance and supervision.
The above thesis has not been submitted to any university for any degree or
diploma, fellowship or associateship or any other similar title previously.
(K.KUMAR)
K.PATTABIRAMAN, M.Com., M.Phil.,
Research Scholar
Post Graduate and Research Department of Commerce
National College (Autonomous)
Tiruchirapalli 620 001
DECLARATION
I hereby declare that the thesis entitled, FINANCIAL
PERFORMANCE ANALYSIS OF STEEL AUTHORITY OF INDIA
LIMITED (SAIL) embodies the results of my research work carried out under
the guidance and supervision of Dr.K.KUMAR, M.Com., M.Phil., Ph.D.,
Research Advisor and that I have not submitted the above thesis to any university
for any degree, diploma, associateship, fellowship or any other similar title
previously.
(K.PATTABIRAMAN)
ACKNOWLEDGEMENT
I sincerely wish to express my deep sense of gratitude to my esteemed
Research Advisor Dr.K.Kumar,M.Com., M.Phil., Ph.D., Associate
Professor, Post Graduate and Research Department of Commerce, National
College (Autonomous), Tiruchirapalli offering me valuable guidance, inputs
and constructive suggestion and above all his interest in the successful
completion of the Research work on Financial Performance Analysis of
Steel Authority of India Limited (SAIL).
I am immensely thankful to Shri.K.Raghunathan, Secretary,
National College (Autonomous), Tiruchirapalli for the constant support and
motivation to undertake the Doctoral Study.
I express my sincere thanks to Dr.K.Anbarasu, M.Sc., M.Phil.,Ph.D.,
Principal, National College (Autonomous), Tiruchirapalli for their kind help
in the accomplishment of my project work.
I deeply thankful to Mrs.Kumar and their family members for their
continuous help to complete the research work successful.
I am thankful to Dr.R.Narayanaswamy, M.Com., M.Phil., M.B.A.,
Ph.D, Head, Department of Commerce, National College (Autonomous),
Tiruchirapalli, Dr.T.Jayaprakasam and Dr.S.Raju, Doctoral Committee
members and other staff members of Commerce Department National

College (Autonomous), Tiruchirapalli, for their continuous encouragement
to complete the thesis successfully.
I find no words to thank Dr.K.Meena, Former Vice Chancellor,
Bharathidasan University and Shri.S.Kunjithapatham, Secretary of
Srimathi Indira Gandhi College, Tiruchirapalli who has been constantly
encouraging me for successfully completing the dissertation.
I take this opportunity to extend my sincere thanks to my Parent,
Brother, Sister and my wife for the encouragement shown in collections
and eliciting information for their continuous encouragement to complete the
thesis successfully.
I thank Mr.K.Srinivasan, M.A., M/S.Sai Typing Centre,
Tiruchirapalli for rendering the valuable support for the research work.
Above all with the grace of Almighty on me to complete the thesis.
K .PATTABIRAMAN
CONTENTS
CHAPTER NO. PAGE NO.
I INTRODUCTION 1
II CONCEPTS AND
REVIEW OF LITERATURE 20
III PROFILE OF THE STEEL AUTHORITY

OF INDIA LIMITED (SAIL) 79
IV ANALYSIS AND INTERPRETATION 108
V FINDINGS, SUGGESTIONS AND

CONCLUSION 239
BIBLIOGRAPHY
LIST OF TABLES
TABLE NO. PAGE NO.
4.1 Current Ratio 109
4.2 Liquid ratio 111
4.3 Profit before tax ratio 113
4.4 Profit after tax ratio 115
4.5 Debtors velocity ratio 117
4.6 Gross profit ratio 118
4.7 Retained profit ratio 120
4.8 Net profit ratio 121
4.9 Debt equity ratio 122
4.10 Ratio return on shareholders funds 123
4.11 Net worth per share 124
4.12 Ratio of return on capital employed 125
4.13 Dividend per share 127
4.14 Earnings per share 129
4.15 Total assets turnover ratio 131
4.16 Fixed assets turnover ratio 132
4.17 Earnings margin 133
4.18 Interest coverage ratio 135
4.19 Dividend coverage ratio 136
4.20 Changes in the level of current assets and

Current liabilities 137
4.21 Changes in the level of profits before and
After tax 139
4.22 Relationship of networth and capital employed 140
4.23 Relationship of current assets, loans and

Advances to total assets 142
4.24 Relationship of current liabilities and provisions

To total liabilities 145
4.25 Trend analysis of profit before depreciation,

Interest and tax with depreciation 147
4.26 Trend analysis of profit before tax and after tax 150
4.27 Comparative income statement for the year 2004-2005 152
4.36 Comparative balance sheet of the year 2004-2005 171

4.45 Commonsize income statement for the year 2004-2005 192
4.54 Commonsize balance sheet for the year 2004-2005 211


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FINANCIAL PERFORMANCE ANALYSIS OF

STEEL AUTHORITY OF INDIA LIMITED (SAIL)

Thesis submitted to the

Under the Guidance of

POST GRADUATE AND RESEARCH DEPARTMENT OF COMMERCE

This is to certify that the thesis entitled, FINANCIAL

PERFORMANCE ANALYSIS OF STEEL AUTHORITY OF INDIA

LIMITED (SAIL), submitted by K.PATTABIRAMAN, M.Com.,

M.Phil., for the award of Degree of Doctor of Philosophy in Commerce has

been carried out by her independently under my guidance and supervision.

diploma, fellowship or associateship or any other similar title previously.

I hereby declare that the thesis entitled, FINANCIAL

PERFORMANCE ANALYSIS OF STEEL AUTHORITY OF INDIA

the guidance and supervision of Dr.K.KUMAR, M.Com., M.Phil., Ph.D.,

I sincerely wish to express my deep sense of gratitude to my esteemed

Research Advisor Dr.K.Kumar,M.Com., M.Phil., Ph.D., Associate

Professor, Post Graduate and Research Department of Commerce, National

College (Autonomous), Tiruchirapalli offering me valuable guidance, inputs

completion of the Research work on Financial Performance Analysis of

Steel Authority of India Limited (SAIL).

I am immensely thankful to Shri.K.Raghunathan, Secretary,

National College (Autonomous), Tiruchirapalli for the constant support and

motivation to undertake the Doctoral Study.

I express my sincere thanks to Dr.K.Anbarasu, M.Sc., M.Phil.,Ph.D.,

Principal, National College (Autonomous), Tiruchirapalli for their kind help

in the accomplishment of my project work.

I deeply thankful to Mrs.Kumar and their family members for their

continuous help to complete the research work successful.

I am thankful to Dr.R.Narayanaswamy, M.Com., M.Phil., M.B.A.,

Ph.D, Head, Department of Commerce, National College (Autonomous),

Tiruchirapalli, Dr.T.Jayaprakasam and Dr.S.Raju, Doctoral Committee

members and other staff members of Commerce Department National

to complete the thesis successfully.

I find no words to thank Dr.K.Meena, Former Vice Chancellor,

Bharathidasan University and Shri.S.Kunjithapatham, Secretary of

Srimathi Indira Gandhi College, Tiruchirapalli who has been constantly

encouraging me for successfully completing the dissertation.

I take this opportunity to extend my sincere thanks to my Parent,

Brother, Sister and my wife for the encouragement shown in collections

and eliciting information for their continuous encouragement to complete the

I thank Mr.K.Srinivasan, M.A., M/S.Sai Typing Centre,

Above all with the grace of Almighty on me to complete the thesis.

CHAPTER NO. PAGE NO.

III PROFILE OF THE STEEL AUTHORITY

IV ANALYSIS AND INTERPRETATION 108

V FINDINGS, SUGGESTIONS AND

4.1 Current Ratio 109

4.2 Liquid ratio 111

4.3 Profit before tax ratio 113

4.4 Profit after tax ratio 115

4.5 Debtors velocity ratio 117

4.6 Gross profit ratio 118

4.7 Retained profit ratio 120

4.8 Net profit ratio 121

4.9 Debt equity ratio 122

4.10 Ratio return on shareholders funds 123

4.11 Net worth per share 124

4.12 Ratio of return on capital employed 125

4.13 Dividend per share 127

4.14 Earnings per share 129

4.15 Total assets turnover ratio 131

4.16 Fixed assets turnover ratio 132