CHAPTER -IV

DATA ANALYSIS
AND
INTERPRETATION

Table of Content
SL. NO CONTENTS
4.1 INTRODUCTION
4.2 RATIO ANALYSIS
4.2.1 LIQUIDITY RATIOS
A CURRENT RATIO
B LIQUID RATIO
C ABSOLUTE LIQUID RATIO
D SOLVENCY RATIO
E NET WORKING CAPITAL RATIO
4.2.2 SOLVENCY RATIO
A FIXED ASSETS RATIO
B DEBT-EQUITY RATIO
C PROPRIETORY RATIO
D INTEREST COVERAGE RATIO
E CAPITAL GEARING RATIO
F DEBT RATIO
G TOTAL DEBT TO TOTAL ASSET RATIO
4.2.3 ACTIVITY RATIO
A CAPITAL TURNOVER RATIO
B FIXED ASSETS TURNOVER RATIO
C CURRENT ASSETS TURNOVER RATIO
D TOTAL ASSETS TURNOVER RATIO
E WORKING CAPITAL TURNOVER RATIO
F INVENTORY TURNOVER RATIO
G DEBTORS TURNOVER RATIO
4.2.4 PROFITABILITY RATIOS (SALES BASED)
A NET PROFIT RATIO
B OPERATING PROFIT RATIO
4.2.5 PROFITABILITY RATIO (INVESTMENT
BASED)
A RETURN ON INVESTMENT RATIO
B RETURN ON NET WORTH RATIO
C RETURN ON ASSETS RATIO
D DIVIDEND YEILD RATIO
4.3 TREND ANALYSIS
A TREND ANALYSIS OF SALES
B TREND ANALYSIS OF TOTAL ASSETS
C TREND ANALYSIS OF NET PROFIT
D TREDN ANALYSIS OF EARNINGS PER SHARE
E TREND ANALYSIS OF RETURN ON
INVESTMENT
4.4 COMPARISON STUDY
A COMPARISON OF NET PROFIT
B COMPARISON OF FIXED ASSETS
C COMPARISON OF TOTAL ASSETS
D COMPARISON OF TOTAL LIABILITIES
E COMPARISON OF NET SALES
4.5 LEVERAGE ANALYSIS
A OPERATING LEVERAGE
B FINANCIAL LEVERAGE
C COMBINED LEVERAGE
4.6 COEFFICIENT OF CORRELATION
A BETWEEN CURRENT ASSETS & CURRENT
LIABILITIES
B BETWEEN PROFIT & SALES
4.7 CHI-SQUARE DISTRIBUTION
A CHI-SQUARE TEST FOR CURRENT ASSETS
B CHI-SQUARE TEST FOR CURRENT
LIABILTIES
C CHI-SQUARE TEST FOR WORKING CAPITAL
4.8 ANOVA
A TO TEST THE DIFFERNCES BETWEEN THE
VARIANCES OF VATIOUS ASSETS

CHAPTER-IV
 DATA ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION:

The definition of financial statement analysis and interpretation is "the process of

evaluating the relationship between the component parts of the financial statements to obtain

a better understanding of a firm's position and performance." The following are some of the

tools that were utilised to analyse and analyse the data:

 Ratio analysis

 Trend Analysis

 Comparison Study

 Karl Pearson’s co-efficient of correlation

 Chi-Square test

 ANOVA (Analysis of Variance)

4.2 RATIO ANALYSIS:

In financial analysis, ration analysis is a crucial method. It serves as a tool for

assessing the company's financial stability. The following is a taxonomy of ratios based on

purpose:

 Liquidity Ratios

 Solvency Ratios

 Activity Ratios

 Profitability Ratios

 Profitability Ratios (Sales based)

 Profitability Ratios (Investment based)

4.2.1 LIQUIDITY RATIOS:

A. CURRENT RATIO:

Current ratio refers to the ratio of current assets to current liabilities. It is necessary to

compare current assets and current liabilities in order to assess a company's short-term

liquidity. It shows a company's capacity to pay its bills on time and fulfil its present

commitments.

CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITIES

TABLE: 4.1

(RUPPES IN CRORES)

YEAR CURRENT CURRNET RATIO

ASSETS LIABILTIES

2022-23 2,65,932 2,37,276 1.12

2021-22 2,22,398 2,00,982 1.11

2020-21 2,10,719 2,01,787 1.04

2019-20 1,66,597 3,10,183 0.54

2018-19 1,52,927 2,02,021 0.76

2017-18 1,23,912 1,90,647 0.65

2016-17 1,06,281 1,52,826 0.70

2015-16 90,564 1,25,022 0.72

2014-15 1,16,152 91,301 1.27

2013-14 1,35,333 95,566 1.42

SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE LIMITED

INTERPRETATION:

If the ratio is less than 1.00, the company's assets, which include cash and
other short-term assets that are anticipated to be converted to cash within a year
or less, are less than its obligations that are due in that time. Although several
circumstances might adversely influence the current ratio of a stable
organisation, a current ratio of less than 1.00 may sound concerning.

Current Ratio
1.60
1.42
1.40
1.27
1.20 1.12 1.11
1.04
1.00

0.80 0.76 0.72

0.70
0.65
0.60 0.54

0.40

0.20

0.00
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014

OBSERVATION:
 A 12755:9007 ratio is considered positive as it indicates that the company
has twice as many current assets as liabilities to pay down its obligations. In FY
2013–14, the company had its highest current ratio of 1.42. From the fiscal
years 2014–15 to 2020–21, the company's current ratio decreased.

B. QUICK RATIO

This ratio serves as a gauge for the company's liquidity and debt-to-
income ratio. You may calculate the quick ratio, also known as the acid-test
ratio, by deducting inventory from current assets and dividing the result by
current liabilities. It is said to indicate the strength or weakness of the
company's finances.
QUICK RATIO = QUICK ASSETS

CURRENT LIABILTIES
Table:4.2

(RUPEES IN CRORES)
YEAR LIQUID CURRENT RATIO
ASSETS LIABILITIES
2022-23 217006 2,37,276 0.91
2021-22 176475 2,00,982 0.88
2020-21 173282 2,01,787 0.86
2019-20 127795 3,10,183 0.41
2018-19 108783 2,02,021 0.54
2017-18 84344 1,90,647 0.44
2016-17 72263 1,52,826 0.47
2015-16 62530 1,25,022 0.50
2014-15 79601 91,301 0.87
2013-14 92401 95,566 0.97
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:

The fast ratio, often known as the acid test, determines whether a
business can generate enough cash to cover its short-term debt and other urgent
commitments. In most cases, the acid-test ratio ought to be higher than 1.0.
Companies should be handled carefully if their ratio is less than 1.0 since it
indicates that they do not have enough liquid assets to cover their present
liabilities. An indication that a company's current assets are heavily reliant on
inventories is an acid-test ratio that is significantly lower than the current ratio.
Conversely, an excessively high ratio might mean that money has accumulated
and is not being reinvested, distributed to shareholders, or used in a productive
way.
 Quick Ratio
1.20

1.00 0.97
0.91
0.88 0.86 0.87

0.80

0.60 0.54
0.47 0.50
0.44
0.41
0.40

0.20

0.00
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014

OBSERVATION:
A 1:1 liquid ratio is optimal. The company has a very strong liquid ratio; it was
able to maintain high ratios of 0.97 and 0.91 in the fiscal years 2013–14 and
2022–2023 and low ratios of 0.41 in the fiscal year 2011–20.

C. ABSOLUTE LIQUID RATIO:

It is a variation on the liquid ratio. Absolute liquid ratio refers to the

connection between absolute liquid assets and absolute liquid liabilities. This
ratio is also known as the "Cash Position Ratio" or the "Super Quick Ratio."

ABSOLUTE LIQUID RATIO = ABSOLUTE LIQUID ASSETS

ABSOLUTE LIQUID LIABILITIES
TABLE: 4.3

(RUPEES IN CRORES)
YEAR ABSOLUTE ABSOLUTE RATIO
LIQUID ASSETS LIQUID
LIABILITIES
2022-23 1,42,885 2,37,276 0.60
2021-22 1,00,018 2,00,982 0.50
2020-21 1,00,238 2,01,787 0.50
2019-20 78,473 3,10,183 0.25
2018-19 63,324 2,02,021 0.31
2017-18 56,008 1,90,647 0.29
2016-17 53,660 1,52,826 0.35
2015-16 46,321 1,25,022 0.37
2014-15 62,086 91,301 0.68
2013-14 69,994 95,566 0.73
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
This ratio evaluates instantaneous liquidity. It emphasises:

I. Exclusivity in Liquidity: It presents a rigorous definition of liquidity by concentrating

on the most liquid assets.

II. Receivables on the Sidelines: Unlike the quick ratio, which emphasises absolute
liquidity, the ALR leaves out accounts receivable.
 A LR
0.80
0.73
0.70 0.68

0.60
0.60
0.50 0.50
0.50

0.40 0.37
0.35
0.31
0.29
0.30 0.25

0.20

0.10

0.00
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014

OBSERVATION:

While there is no perfect ratio, it is generally preferable to have a ratio of

at least 0.5 to 1. The most cautious information is offered by this ratio because it
only includes cash and cash equivalents. The company's greatest ratio, 0.97, was
recorded in FY 2013–14; this indicates that for every Rs. 1 crore in liabilities,
there are Rs. 0.97 crores in current assets.

D. SOLVENCY RATIO:
One performance statistic that aids in assessing the financial health of a corporation is
the solvency ratio. It allows us to ascertain, among other things, if the business can eventually
pay its debt.

SOLVENCY RATIO = AFTER TAX NET PROFIT + DEPRECIATION

TOTAL LIABILITIES
 TABLE: 4.4

(RUPEES IN CRORES)
YEAR AFTER N.P. + TOTAL RATIO
DEPRECIATION LIABILITIES
2022-23 54,323 4,11,471 0.13
2021-22 49,360 4,07,147 0.12
2020-21 41,143 3,99,190 0.10
2019-20 40,631 5,44,328 0.07
2018-19 45,721 3,70,423 0.12
2017-18 43,192 3,02,878 0.14
2016-17 39,890 2,58,433 0.15
2015-16 36,983 2,17,536 0.17
2014-15 31,207 1,81,609 0.17
2013-14 30,773 1,70,492 0.18
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:

solvency rati o
0.20
0.18
0.18 0.17 0.17

0.16 0.15
0.14
0.14 0.13
0.12 0.12
0.12
0.10
0.10

0.08 0.07

0.06

0.04

0.02

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
OBSERVATION:
Although solvency ratios vary depending on the industry, a solvency ratio
of 0.2 is generally seen as a desirable value. The company's solvency ratio is
acceptable; in the fiscal year 2013–14, it reached a maximum of 0.18.

E. NET WORKING CAPITAL RATIO:

The total of all the components of working capital is the net working capital.
Its purpose is to disclose if a company has enough net cash on hand to cover its
operating expenses in the near future.

(Net Assets = Total Assets (-) Total Liabilities)

NET WORKING CAPITAL RATIO = WORKING CAPITAL

NET ASSETS
 TABLE: 4.5

(RUPEES IN CRORES)
YEAR WORKING NET ASSETS RATIO
CAPITAL
2022-23 28,656 4,79,094 0.06
2021-22 21,416 4,71,527 0.05
2020-21 8,932 4,74,483 0.02
2019-20 -1,43,586 4,24,584 -0.34
2018-19 -49,094 4,05,322 -0.12
2017-18 -66,735 3,14,647 -0.21
2016-17 -46,545 2,88,313 -0.16
2015-16 -34,458 2,40,184 -0.14
2014-15 24,851 2,16,176 0.11
2013-14 39,767 1,97,091 0.20
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
In general, a working capital ratio of less than one is seen as a sign of
possible future liquidity issues, but a ratio between 1.5 and 2 is seen as a sign
that a business is doing well financially in terms of liquidity. It's not always
thought that a ratio that rises over two is superior.
 Net- Working Capital Ratio
0.30

0.20
0.20
0.11
0.10 0.06 0.05
0.02
0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

-0.10
-0.12
-0.14
-0.20 -0.16
-0.21
-0.30

-0.34
-0.40

OBSERVATION:

In FY 2013–14, the company's highest ratio was 0.20. Since a decent net
working capital ratio is between 1 and 2, this probably means that the firm
needs to improve even more in-order to have adequate short-term assets to fully
secure its immediate debt.

4.2.2 SOLVENCY RATIO:

A. FIXED ASSET RATIO:

By dividing a company's total fixed assets (net) by its long-term funds,

one may calculate the fixed assets ratio, a form of solvency ratio known as long-
term solvency. The chart displays the total amount of long-term funding
allocated to financing fixed assets.
FIXED ASSET RATIO = NET FIXED ASSET

LONG TERM FUND

TABLE: 4.6

(RUPEES IN CRORES)
YEAR NET FIXED LONG TERM RATIO
ASSET FUND
2022-23 2,94,079 1,74,195 1.69
2021-22 2,74,288 2,06,165 1.33
2020-21 3,39,668 1,97,403 1.72
2019-20 3,34,436 2,34,145 1.43
2018-19 3,14,745 1,68,402 1.87
2017-18 3,00,447 1,12,231 2.68
2016-17 2,87,319 1,05,607 2.72
2015-16 2,38,289 92,514 2.58
2014-15 1,90,316 90,308 2.11
2013-14 1,51,122 74,926 2.02
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 F ix e d A sse t Rati o
3.00
2.68 2.72
2.58
2.50
2.11
2.02
2.00 1.87
1.69 1.72

1.50 1.43
1.33

1.00

0.50

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:
The fixed asset ratio grew from 2013-14 to 2017-18, then progressively
fell beginning in 2018-19. The highest Fixed Asset Ratio of 2.72% occurred in
the fiscal year 2016-17.

B. DEBT-EQUITY RATIO:
 It describes the relationship between borrowed cash and owner's capital.
The debt-equity ratio is used to assess the long-term financial health of a
company.

DEBT-EQUITY RATIO = TOTAL LONG-TERM DEBTS

SHARE HOLDER’S FUND

TABLE: 4.6

(RUPEES IN CRORES)
YEAR TOTAL SHAREHOLDER’S RATIO
LONG-TERM FUND
DEBTS
2022-23 2,15,823 4,79,094 0.45
2021-22 1,94,563 4,71,527 0.41
2020-21 1,93,750 4,74,483 0.41
2019-20 2,30,027 4,24,584 0.54
2018-19 1,57,195 4,05,322 0.39
2017-18 96,835 3,14,647 0.31
2016-17 1,01,303 2,88,313 0.35
2015-16 92,356 2,40,176 0.38
2014-15 89,141 2,16,159 0.41
2013-14 85,481 1,97,074 0.43
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 For large enterprises in heavy sectors with fixed assets, the appropriate
ratio is 2. The debt-to-equity ratio increased steadily between 2018–19 and
2022–2023; it peaked in 2019–20 at 0.54, although not at a worrying rate. It
demonstrates that the business receives the same amount of capital funding
from debt and equity.

Debt - Equity Ratio

0.60
0.54

0.50
0.45
0.43
0.41 0.41 0.41
0.40 0.39 0.38
0.35
0.31
0.30

0.20

0.10

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

For large enterprises in heavy sectors with fixed assets, the appropriate
ratio is 2. The debt-to-equity ratio increased steadily between 2018–19 and
2022–2023; it peaked in 2019–20 at 0.54, although not at a worrying rate. It
demonstrates that the business receives the same amount of capital funding
from debt and equity.

C. PROPRIETARY RATIO:
 The link between net worth and total assets is expressed. It indicates how
much of the shareholder's money has been allocated to assets. Strong financial
standing of a company is indicated by a high proprietary ratio. It would be
preferable the larger the ratio.
PROPRIETORY RATIO = PROPRIETORY FUNDS

TOTAL ASSETS

TABLE: 4.8

(RUPEES IN CRORES)
YEAR PROPRIETARY TOTAL RATIO
FUNDS ASSETS
2022-23 4,79,094 8,90,565 0.54
2021-22 4,71,527 8,78,674 0.54
2020-21 4,74,483 8,73,673 0.54
2019-20 4,24,584 9,68,912 0.44
2018-19 4,05,322 7,75,745 0.52
2017-18 3,14,647 6,17,525 0.51
2016-17 2,88,313 5,46,746 0.53
2015-16 2,40,176 4,57,720 0.52
2014-15 2,16,159 3,97,785 0.54
2013-14 1,97,074 3,67,583 0.54
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
A ratio value that is less than 50% or 0.5 suggests that the company uses
highly leveraged financing. This might mean that the business has a lot of debt,
which could hurt its profitability. Such investments could also be seen as riskier
by creditors and investors, which would make it harder to get money or
investors. As such, the company's financial soundness may not necessarily be
indicated by a low proprietary ratio.

Proprie tory Rati o

0.60
0.54 0.54 0.54 0.54 0.54
0.52 0.53 0.52
0.51
0.50
0.44

0.40

0.30

0.20

0.10

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

D. INTEREST COVERAGE RATIO:

 The interest coverage ratio displays the number of times available money for
interest payments are used to cover interest costs. This ratio assesses a
company's ability to service debt with fixed interest on long-term loans.

INTEREST COVERAGE RATIO = EBIT

INTEREST

TABLE: 4.9

(RUPEES IN CRORES)
YEAR EBIT INTEREST RATIO
2022-23 66,759 12,626 5.29
2021-22 55,909 9,123 6.13
2020-21 43,423 16,211 2.68
2019-20 52,421 12,105 4.33
2018-19 57,118 9,751 5.86
2017-18 50,381 4,656 10.82
2016-17 43,500 2,723 15.98
2015-16 38,155 2,454 15.55
2014-15 31,835 2,367 13.45
2013-14 31,024 3,206 9.68
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
A business is more likely to face bankruptcy if it has a low interest
coverage ratio since it will be harder for it to pay off its debt. There is not
enough profit to pay the debt's interest costs when the interest coverage ratio is
low. Additionally, in an environment where interest rates are rising and the firm
has variable-rate debt, interest expenses will increase.

A high ratio suggests that there are sufficient earnings to pay off the debt. It can
also indicate that the business is not making the best use of its debt. For
instance, a business may not be investing in new goods and technology to keep
ahead of the competition over the long run if it is not borrowing enough.

Interest Coverage Rati o

18.00
15.98
16.00 15.55

14.00 13.45

12.00
10.82
10.00 9.68

8.00
6.13 5.86
6.00 5.29
4.33
4.00
2.68
2.00

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:
A ratio greater than one is optimal. There is more than one interest
coverage for the firm. The interest coverage ratio drops to 5.29 in 2022–2023
after reaching its maximum of 15.98 in 2016–17. It reveals that in 2022–2023,
the business would be paying interest later than expected.

E. CAPITAL GEARING RATIO:

 It is a really significant ratio. The company's gearing should be
maintained to enable it to pay out dividends at a consistent pace. A high gearing
ratio is detrimental to a startup or a business with unclear profits in the future.

CAPITAL-GEARING = FIXED INCOME BEARING

EQUITY SHAREHOLDERS FUND

TABLE: 4.10

(RUPEES IN CRORES)
YEAR FIXED INCOME EQUITY RATIO
BEARING FUNDS SAHREHOLDERS
FUNDS
2022-23 1,35,561 4,79,094 0.28
2021-22 1,67,231 4,71,527 0.35
2020-21 1,60,598 4,74,483 0.34
2019-20 1,78,751 4,24,584 0.42
2018-19 1,18,098 4,05,322 0.29
2017-18 81,596 3,14,647 0.26
2016-17 78,723 2,88,313 0.27
2015-16 77,866 2,40,176 0.32
2014-15 76,227 2,16,159 0.35
2013-14 62,711 1,97,074 0.32
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 The best gearing ratio is mostly decided by each firm in relation to other
businesses in the same sector. The following fundamental rules apply to both
good and bad gearing ratios:

1. Greater Than 50%: A gear ratio is usually regarded as being

extremely levered or geared when it is within this range. Because it
would be more vulnerable to loan default and bankruptcy during
periods of lower profitability and higher interest rates, the firm
would be at more financial risk as a result.
2. Between 25% and 50%: For well-established businesses, a gearing
ratio in this range is usually regarded as ideal or average.
3. Less Than 25%: Lenders and investors alike often see gearing
ratios below this threshold as low-risk.

Capital Gearing Rati o

0.45
0.42
0.40
0.35 0.35
0.35 0.34
0.32 0.32
0.30 0.28 0.29
0.27
0.26
0.25

0.20

0.15

0.10

0.05

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

The capital gearing ratio began rising in FY 2017–18 and reaches its
maximum of 0.42 in FY 2019–20. The data indicates a progressive decline in
the company from 2019–20 to 0.28 in 2022–2023 after that.
F. DEBT RATIO:

It displays the percentage of total assets that are funded by debt. The
following formula is used to compute it:

DEBT RATIO = DEBT

TOTAL ASSETS

TABLE: 4.11

(RUPEES IN CRORES)
YEAR DEBT TOTAL ASSETS RATIO
2022-23 4,11,471 8,90,565 0.46
2021-22 4,07,147 8,78,674 0.46
2020-21 3,99,190 8,73,673 0.46
2019-20 5,44,328 9,68,912 0.56
2018-19 3,70,423 7,75,745 0.48
2017-18 3,02,878 6,17,525 0.49
2016-17 2,58,433 5,46,746 0.47
2015-16 2,17,536 4,57,720 0.48
2014-15 1,81,609 3,97,785 0.46
2013-14 1,70,492 3,67,583 0.46
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTERPRETATION:

A corporation has more debt than assets if the ratio is greater than 1. The
corporation has more assets than debt if the ratio is less than 1. In general, ratios
of 40% (0.4) or less are regarded as low, while those of 60% (0.6) or above are
considered high.

Debt Rati o
0.60
0.56

0.50 0.48 0.49

0.46 0.46 0.47 0.48 0.46
0.46 0.46

0.40

0.30

0.20

0.10

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

When the ratio is less than 0.5, the majority of the company's assets
are financed by equity rather than debt, and vice versa. The debt ratio of RIL
rises between 2014 and 2015, reaching a maximum of 0.56 in 2019–20.
Following 2019–20, the ratio falls to 0.46 between 2020–21 and 2022–23,
indicating that the company's assets are currently financed by equity rather than
debt.
G. TOTAL DEBT TO TOTAL ASSET RATIO:

Another name for the liabilities to asset ratio is the debt to asset ratio. The
percentage of assets financed by debt is shown by the liabilities to assets ratio.
The firm is exposed to more financial risk the higher the ratio.

TOTAL DEBT TO
TOTAL ASSET RATIO = TOTAL LIABILITY TO OUTSIDERS

TOTAL ASSETS

TABLE 4.12

(RUPEES IN CRORES)
YEAR TOTAL LIABILITY TOTAL ASSETS RATIO
TO OUTSIDERS
2022-23 4,11,471 8,90,565 46.20
2021-22 4,07,147 8,78,674 46.34
2020-21 3,99,190 8,73,673 45.69
2019-20 5,44,328 9,68,912 56.18
2018-19 3,70,423 7,75,745 47.75
2017-18 3,02,878 6,17,525 49.05
2016-17 2,58,433 5,46,746 47.27
2015-16 2,17,536 4,57,720 47.53
2014-15 1,81,609 3,97,785 45.66
2013-14 1,70,492 3,67,583 46.38
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 The corporation is technically insolvent if the computation produces a
result larger than 1, as its obligations exceed its total assets. A score of 0.5, or
50%, indicates that debt is used to finance 50% of the company's assets (equity
financing accounting for the remaining 50%).

Solvency Ratio
60.00 56.18

47.75 49.05
50.00 46.20 46.34 47.27 47.53 46.38
45.69 45.66

40.00

30.00

20.00

10.00

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

From FY 2014–15 to FY 2019–20, the company's total liability to total

asset ratio grew; however, from FY 2020–21 to FY 2022–23, it fell. 53.8% of
the company's assets are funded by shareholders in the current fiscal year, while
46.20 percent are financed by creditors.

4.2.3 ACITIVITY (TURNOVER) RATIOS:

A. CAPITAL TURNOVER RATIO:

This ratio displays the number of capital rotations that have occurred
throughout business operations. A more profitable outcome would result from
the efficient use of money. Equity share capital plus reserve and surplus equals
capital.

CAPITAL TURNOVER RATIO = SALES

CAPITAL EMPLOYED

TABLE: 4.13

(RUPEES IN CRORES)
YEAR SALES CAPITAL RATIO
EMPLOYED
2022-23 5,62,234 6,14,655 0.91
2021-22 4,63,067 6,38,758 0.72
2020-21 2,76,181 6,35,081 0.43
2019-20 3,62,869 6,03,335 0.60
2018-19 4,00,139 5,23,420 0.76
2017-18 3,14,917 3,96,243 0.79
2016-17 2,64,909 3,67,036 0.72
2015-16 2,51,100 3,18,042 0.79
2014-15 3,40,727 2,92,386 1.17
2013-14 4,01,200 2,59,785 1.54
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 One way to assess a company's operational effectiveness and assess its
growth potential is to look at its capital turnover ratio.

Increased capital turnover ratios often translate into increased potential

for profitability and revenue growth (and vice versa for lower ratios).
1. Greater Turnover of Capital → Growth in Earnings and Profits

2. Reduced Capital Turnover => Growth in Earnings and Profits

Capital Turnover Rati o

1.80

1.60 1.54

1.40

1.20 1.17

1.00 0.91
0.76 0.79 0.79
0.80 0.72 0.72
0.60
0.60
0.43
0.40

0.20

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

The capital turnover ratio gradually decreased from FY 2014–15 to FY

2021–22, and it then began to rise in FY 2022–23. It peaked in the fiscal year
2013–14, when the business rotated 1.54 times the capital.

B. FIXED ASSET TURNOVER RATIO:

 This demonstrates how well the company's fixed assets are being used.
An organisation that has successfully exploited investments in fixed assets to
drive sales is indicated by a greater fixed asset turnover ratio.

FIXED ASSET TURNOVER RATIO = NET SALES

NET FIXED ASSETS

TABLE: 4.14

(RUPEES IN CRORES)
YEAR FIXED ASSET SALES RATIO
2022-23 2,94,079 5,62,234 1.91
2021-22 2,74,288 4,63,067 1.69
2020-21 3,39,668 2,76,181 0.81
2019-20 3,34,436 3,62,869 1.09
2018-19 3,14,745 4,00,139 1.27
2017-18 3,00,447 3,14,917 1.05
2016-17 2,87,319 2,64,909 0.92
2015-16 2,38,289 2,51,100 1.05
2014-15 1,90,316 3,40,727 1.79
2013-14 1,51,122 4,01,200 2.65
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 Generally speaking, a greater fixed asset turnover ratio is preferable since
it suggests that the business is making more money for every dollar of long-
term assets it owns.

High Fixed Asset Turnover → It is assumed that the business is making

effective long-term asset purchases.
Low Fixed Asset Turnover: The company's long-term assets are not yielding
enough value, or income, for it.

Fixed Asset Turnover Ratio

3.00
2.65
2.50

2.00 1.91
1.79
1.69

1.50
1.27
1.09 1.05 1.05
1.00 0.92
0.81

0.50

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:
For the past 10 fiscal years, the company's fixed asset turnover ratio has
been at a respectable pace. The greatest ratio was 2.65 in the fiscal years 2013–
14 and 0.91 in the fiscal years 2016–17.

C. CURRENT ASSETS TURNOVER RATIO:

 The capacity of a business to generate sales from its current assets—cash,
inventory, accounts receivable, etc.—is gauged by the current asset turnover
ratio. It displays the number of spins that the enterprise's present assets have
made.

CURRENT ASSET TURNOVER RATIO = NET SALES

AVERAGE CURRENT ASSET

TABLE: 4.15

(RUPEES IN CRORES)
YEAR NET SALES AVERAGE CURRENT RATIO
ASSET
2022-23 5,62,234 2,65,932 2.11
2021-22 4,63,067 2,22,398 2.08
2020-21 2,76,181 2,10,719 1.31
2019-20 3,62,869 1,66,597 2.18
2018-19 4,00,139 1,52,927 2.62
2017-18 3,14,917 1,23,912 2.54
2016-17 2,64,909 1,06,281 2.49
2015-16 2,51,100 90,564 2.77
2014-15 3,40,727 1,16,152 2.93
2013-14 4,01,200 1,35,333 2.96
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:

A ratio of over one for assets to turnover is always seen as positive. A

high ratio indicates that the business is making the most of its resources and
generating more money. This suggests that the business is using its own
resources to produce adequate net sales income. A lower ratio suggests that the
resources are not being used effectively to produce income. This might be an
indication of subpar output, inadequate inventory control, or poor management.

Current Asset Turnover Rati o

3.50

2.93 2.96
3.00
2.77
2.62 2.54 2.49
2.50
2.11 2.18
2.08
2.00

1.50 1.31

1.00

0.50

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

A high current assets turnover ratio shows that the company can
maximise revenues while requiring the least amount of current asset investment.
Over the past 10 years, the firm has had an excellent current assets turnover
ratio; in the fiscal year 2013–14, it reached a maximum of 2.96.

D. TOTAL ASSET TURNOVER RATIO:

 The asset turnover ratio calculates the revenue or sales value of a business
in relation to its assets. An indication of how effectively a business uses its
assets to create income is the asset turnover ratio.

FORMULA:

TOTAL ASSET TURNOVER RATIO = NET SALES

AVERAGE TOTAL ASSETS

TABLE: 4.16

(RUPEES IN CRORES)
YEAR NET SALES AVERAGE RATIO
TOTAL ASSETS
2022-23 5,62,234 884619.5 0.64
2021-22 4,63,067 876173.5 0.53
2020-21 2,76,181 921292.5 0.30
2019-20 3,62,869 872328.5 0.42
2018-19 4,00,139 696635 0.57
2017-18 3,14,917 582135.5 0.54
2016-17 2,64,909 502233 0.53
2015-16 2,51,100 427752.5 0.59
2014-15 3,40,727 382684 0.89
2013-14 4,01,200 343047 1.17
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 A total asset turnover ratio over one is universally seen as favourable. A
high ratio indicates that the business is making the most of its resources and
generating more money. This suggests that the business is using its own
resources to produce adequate net sales income. A lower ratio suggests that the
resources are not being used effectively to produce income. This might be an
indication of subpar output, inadequate inventory control, or poor management.

Total Assets Turnover Rati o

1.40

1.20 1.17

1.00
0.89

0.80
0.64
0.57 0.59
0.60 0.53 0.54 0.53
0.42
0.40
0.30

0.20

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

Based on the data and chart above, it can be observed that the
undertaking's total assets turnover ratio peaked in 2013–14 and fell in FY 2020–
21.
E. WORKING CAPITAL TURNOVER RATIO:

The most popular method for assessing a company's overall operations

and financial performance is the working capital turnover ratio. It may also be
used to determine if a business will be able to pay off debt within a given time
frame and prevent cash flow problems due to higher production requirements.
Current Assets (-) Current Liabilities equals working capital.

FORMULA:

WORKING CAPITAL TURNOVE RATIO = NET SALES

WORKING CAPITAL
TABLE: 4.17

(RUPEES IN CRORES)
YEAR NET SALES WORKING RATIO
CAPITAL
2022-23 5,62,234 28,656 19.62
2021-22 4,63,067 21,416 21.62
2020-21 2,76,181 8,932 30.92
2019-20 3,62,869 -1,43,586 -2.53
2018-19 4,00,139 -49,094 -8.15
2017-18 3,14,917 -66,735 -4.72
2016-17 2,64,909 -46,545 -5.69
2015-16 2,51,100 -34,458 -7.29
2014-15 3,40,727 24,851 13.71
2013-14 4,01,200 39,767 10.09
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 A high turnover ratio indicates that management is using the short-term
assets and liabilities of the organisation to boost sales with exceptional
efficiency.

A low ratio, on the other hand, might mean that a company is investing in too
much inventory and accounts receivable to cover its sales, which could result in
an excessive number of bad debts or outdated inventory.

Working Capital Turnover Ratio

35.00
30.92
30.00

25.00 21.62
19.62
20.00

15.00 13.71
10.09
10.00

5.00

0.00 -2.53
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18
-4.72 2016-17 2015-16 2014-15 2013-14
-5.69
-5.00 -8.15 -7.29

-10.00

-15.00

OBSERVATION:

While a ratio of 1.2 to 2.0 is optimal, a working capital of (-ve) is

indicated by anything less than 1. Anything over 2, however, suggests that the
business is not making unnecessary asset investments. It indicates that from FY
2020–21 to FY 2022–23, the corporation did not invest in surplus assets.
F. INVENTORY TURNOVER RATIO:

The inventory turnover ratio shows if stock has been used efficiently or
not. The average quantity of shares in the company was shown to be correlated
with the cost of products sold (and occasionally net sales) over a certain time
period. The calculation of this ratio is as

FORMULA:

STOCK TURNOVER RATIO = NET SALES

AVERAGE STOCK

TABLE: 4.18

(RUPEES IN CRORES)
YEAR NET SALES AVERAGE RATIO
STOCK
2022-23 5,62,234 47424.5 11.86
2021-22 4,63,067 41680 11.11
2020-21 2,76,181 38119.5 7.25
2019-20 3,62,869 41473 8.75
2018-19 4,00,139 41856 9.56
2017-18 3,14,917 36793 8.56
2016-17 2,64,909 31026 8.54
2015-16 2,51,100 32292.5 7.78
2014-15 3,40,727 39741.5 8.57
2013-14 4,01,200 42830.5 9.37
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 The ratio of an organization's inventory replacement frequency to its cost
of sales is known as inventory turnover. In general, a larger ratio is preferable.

A low inventory turnover ratio might indicate overstocking, or an

overabundance of goods, or poor sales.

Inventory Turnover Rati o

14.00

11.86
12.00
11.11

10.00 9.56 9.37

8.75 8.56 8.54 8.57
8.00 7.78
7.25

6.00

4.00

2.00

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

From the above date, it shows that the company has a good inventory
turnover ratio for the past ten years. The maximum and minimum ratio is 11.86
and 7.25 in FY 2022-23 and 2020-21. It indicate understocking or an
underabundance of goods, or great sales.
F. DEBTORS TURNOVER RATIO:

The association between average accounts receivable and credit sales is

established by this ratio. The debtor turnover ratio shows how effectively a firm
is able to collect money owed from debtors.

FORMULA:

DEBTORS TURNOVER RATIO = NET SALES

TRADE RECEIVABLES

TABLE: 4.19

(RUPEES IN CRORES)
YEAR NET SALES TRADE RATIO
RECEIVALBLES
2022-23 5,62,234 16,898 33.27
2021-22 4,63,067 14,394 32.17
2020-21 2,76,181 4,159 66.41
2019-20 3,62,869 7,483 48.49
2018-19 4,00,139 12,110 33.04
2017-18 3,14,917 10,460 30.11
2016-17 2,64,909 5,472 48.41
2015-16 2,51,100 3,495 71.85
2014-15 3,40,727 4,661 73.10
2013-14 4,01,200 10,664 37.62
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 Higher turnover ratios for accounts receivable are generally
advantageous, and businesses should aim for ratios of at least 1.0 to guarantee
that they collect the whole amount of their accounts receivable at least once in a
given quarter.

Debtors Turnover Rati o

80.00
71.85 73.10
70.00 66.41

60.00

50.00 48.49 48.41

40.00 37.62
33.27 32.17 33.04
30.11
30.00

20.00

10.00

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

In FY 204–15, the company's debtor turnover ratio reached its highest

figure of 73.10. It indicates that, on average, debtors purchase and repay debt
73.10 times year, or once every sixteen days, the credit sales are transformed
into cash starting on the day of the transaction.

4.2.4 PROFITABILITY RATIOS (SALES BASED):

A. NET PROFIT RATIO:

A financial metric known as the net profit ratio is used to compare a

company's net profit to its net revenue after subtracting income taxes, financing
charges, and manufacturing costs. It facilitates comparison with rivals by
assisting in the determination of a business's overall performance and financial
worth.

FORMULA:

NET PROFIT RATIO = NET PROFIT

X 100
SALES
TABLE: 4.20

(RUPEES IN CRORES)
YEAR NET PROFIT SALES RATIO
2022-23 44,205 5,62,234 7.86
2021-22 39,084 4,63,067 8.44
2020-21 31,944 2,76,181 11.57
2019-20 30,903 3,62,869 8.52
2018-19 35,163 4,00,139 8.79
2017-18 33,612 3,14,917 10.67
2016-17 31,425 2,64,909 11.86
2015-16 27,417 2,51,100 10.92
2014-15 22,719 3,40,727 6.67
2013-14 21,984 4,01,200 5.48
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 A net profit ratio of 10% to 20% is often seen as favourable. 10% is seen
as an average net profit ratio, whereas 20% is thought to be a high ratio.

Net Profit Ratio

14.00

11.57 11.86
12.00
10.67 10.92

10.00
8.52 8.79
8.44
7.86
8.00
6.67

6.00 5.48

4.00

2.00

0.00
2023-22 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:
Over the last three years, there has been a decline in the net profit ratio. In
the fiscal year 2016–17, the company's Net Profit was the highest at 11.86%.
When the net profit margin exceeds 10%, it is deemed normal, and when it
exceeds 20%, it is deemed good.

B. OPERATING PROFIT RATIO:

 This ratio serves as a gauge for the management's operational
effectiveness. It establishes the connection between sales and operating profit.
FORMULA:
OPERATING PROFIT RATIO = OPERATING PROFIT
X 100
SALES

TABLE: 4.21
(RUPEES IN CRORES)
YEAR OPERATING SALES RATIO
PROFIT
2022-23
2021-22
2020-21
2019-20
2018-19
2017-18
2016-17
2015-16
2014-15
2013-14
4.2.5 PROFITABILITY RATIOS (INVESTMENT BASED):

A. RETURN ON INVESTMENT RATIO:

A performance metric called return on investment (ROI) is used to

compare the effectiveness of several distinct investments or assess how efficient
an investment is. The outcome is given as a ratio or a percentage.

FORMULA:

RETURN ON INVESTMENT = EBIT

X 100
CAPITAL EMPLOYED

TABLE:4.22

(RUPEES IN CRORES)
YEAR EBIT CAPITAL RATIO
EMPLOYED
2022-23 66,759 6,24,633 10.69
2021-22 55,909 6,56,276 8.52
2020-21 43,423 6,62,954 6.55
2019-20 52,421 8,02,315 6.53
2018-19 57,118 6,22,818 9.17
2017-18 50,381 4,93,613 10.21
2016-17 43,500 4,40,465 9.88
2015-16 38,155 3,67,156 10.39
2014-15 31,835 2,81,633 11.30
2013-14 31,024 2,32,250 13.36
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTERPRETATION:

A positive result from ROI calculations indicates that net returns are
positive (i.e., total returns exceed total expenses). However, when ROI
calculations provide a negative number, it indicates that total expenses exceed
total returns, which puts the net return in the red.

Return on Investment Ratio

16.00

14.00 13.36

12.00 11.30
10.69 10.39
10.21 9.88
10.00 9.17
8.52
8.00
6.55 6.53
6.00

4.00

2.00

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

In 2013–14, there was a rise in the return on investment. Between 2019–

20 and 2020–21, the proportion remained constant. The better a corporation
uses its asset base to drive sales, the greater the return on investment ratio.
B. RETURN ON NETWORTH RATIO:

The percentage known as return on net worth was calculated with

investors, not the company in mind. The investor may determine how much
return he would receive and if the net profit was transferred to him by looking at
this. It clarifies how the capital of the shareholders is used to produce profit
efficiently.

FORMULA:

RETURN ON NETWORTH = NET PROFIT AFTER TAX

X 100
NET WORTH
TABLE: 4.23

(RUPEES IN CRORES)
YEAR NET PROFIT NET WORTH RATIO
AFTER TAX
2022-23 44,205 4,79,094 9.23
2021-22 39,084 4,71,527 8.29
2020-21 31,944 4,74,483 6.73
2019-20 30,903 4,24,584 7.28
2018-19 35,163 4,05,322 8.68
2017-18 33,612 3,14,647 10.68
2016-17 31,425 2,88,313 10.90
2015-16 27,417 2,40,184 11.41
2014-15 22,719 2,16,176 10.51
2013-14 21,984 1,97,091 11.15
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTERPRETATION:

It suggests that the company has great management in place to boost

returns to shareholders. This demonstrates how well an enterprise can use its
investments to increase productivity and earnings. It also shows that the
company can generate more assets to balance off its obligations. It is therefore
without a doubt a safe investment choice.

On the other hand, a declining return on net worth indicates that the
company is mishandling its equity and that its efficiency in managing equity is
very low. As a result, a business that has a low return on net worth will also be
heavily indebted and unsuitable for investors.

Return on Net Worth Ratio

12.00 11.41 11.15
10.68 10.90
10.51
10.00 9.23
8.68
8.29
8.00 7.28
6.73

6.00

4.00

2.00

0.00
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

OBSERVATION:

A least 15% Return on Net Worth often denotes a higher valuation. The
company's percentages are as follows: 11.41% for FY 2015–16, the highest, and
6.73% for FY 2020–21.
C. RETURN ON ASSETS RATIO:

A manager, investor, or analyst can use return on assets (ROA), which is

expressed as a percentage, to gauge how profitable a company is in relation to
its total assets. It also provides insight into how well a firm's management uses
its assets to create earnings.

FORMULA:

RETURN ON ASSETS RATIO = NET PROFIT AFTER TAX

AVERAGE TOTAL ASSETS

TABLE: 4.24

(RUPEES IN CRORES)
YEAR NET PROFIT TOTAL RATIO
AFTER TAX ASSETS
2022-23 44,205 8,90,565 4.96
2021-22 39,084 8,78,674 4.45
2020-21 31,944 8,73,673 3.66
2019-20 30,903 9,68,912 3.19
2018-19 35,163 7,75,745 4.53
2017-18 33,612 6,17,525 5.44
2016-17 31,425 5,46,746 5.75
2015-16 27,417 4,57,720 5.99
2014-15 22,719 3,97,785 5.71
2013-14 21,984 3,67,583 5.98
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPRETATION:
 Generally speaking, a ROA of more than 5% is good and more over 20%
is exceptional. But companies in the same industry should constantly compare
their return on assets (ROAs).

Return on Asset Ratio

2013-14 5.98
2014-15 5.71
2015-16 5.99
2016-17 5.75
2017-18 5.44
Year

2018-19 4.53
2019-20 3.19
2020-21 3.66
2021-22 4.45
2022-23 4.96
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00
Return on asset ratio

OBSERVATION:

The company's ROA ratios range from 3.54 in the next FYs 2019–20 and
2020–21 to 6.41 in the FYs 2015–16 and 2013–14, which are also the lowest.
4.3 TREND ANALYSIS:

Trend analysis, which focuses on changes in particular line items within

the income statement and balance sheet, offers a way to examine firm data
across time. Rupees and percentages are commonly used to measure changes.
By dividing the current year by the base year, one may determine the trend %
and assess trends spanning many years.
 Trend Analysis of Sales
 Trend Analysis of Total Assets
 Trend Analysis of Net Profit
 Trend Analysis of Return on Investment
 A. TREND ANALYSIS OF SALES:
TABLE: 4.26
YEAR NET SALES TREND (%) DIFFERENCE (%)
(RUPEES IN
CRORES)

2013-14 4,01,200 100 0

2014-15 3,40,727 84.93 -15.07
2015-16 2,51,100 73.70 -26.30
2016-17 2,64,909 105.50 5.50
2017-18 3,14,917 118.88 18.88
2018-19 4,00,139 127.06 27.06
2019-20 3,62,869 90.69 -9.31
2020-21 2,76,181 76.11 -23.89
2021-22 4,63,067 167.67 67.67
2022-23 5,62,234 121.42 21.42
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPREATION:
It is evident from the accompanying table that the company's revenues
have grown appropriately over time. In the Financial Year 2021–2022, the
company's sales percentage of 67.67% was the highest.
 Trend Analysis of Sales
80
67.67

60

40
27.06
18.88 21.42
20
5.50
0.00
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 -9.31
2019-20 2020-21 2021-22 2022-23
-15.07
-20 -26.30 -23.89

-40

B. TREND ANALYSIS OF TOTAL ASSETS:

TABLE: 4.27
YEAR TOTAL ASSETS TREND (%) DIFFERENCE (%)
(RUPEES IN
CRORES

2013-14 3,18,511 100 0

2014-15 3,67,583 115 15
2015-16 3,97,785 125 25
2016-17 4,57,720 144 44
2017-18 5,46,746 172 72
2018-19 6,17,525 194 94
2019-20 7,75,745 244 144
2020-21 9,68,912 304 204
2021-22 8,73,673 274 174
2022-23 8,78,674 276 176
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPREATION:
 This table makes it clear that the company's total assets have grown at an
enormous rate over time. Comparing the FY 2022–2023 to the FY 2013–14,
their total assets have risen by 176%.

Trend Analysis of Total Assets

250

204
200
174 176

144
150

94
100
72

44
50
25
15
0
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

C.TREND ANALYSIS OF NET PROFIT:

TABLE:4.28

YEAR NET PROFIT TREND (%) DIFFERENCE (%)

(RUPEES IN
CRORES)
2013-14 44,205 100.00 0
2014-15 39,084 88.42 -12
2015-16 31,944 72.26 -28
2016-17 30,903 69.91 -30
2017-18 35,163 79.55 -20
2018-19 33,612 76.04 -24
2019-20 31,425 71.09 -29
2020-21 27,417 62.02 -38
2021-22 22,719 51.39 -49
2022-23 21,984 49.73 -50
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPREATION:
 In the fiscal years 2013–14 and 2022–2023 there was a reduction in net
profit. The company's net profit dropped to 21,984 crores in the fiscal year
2022–2023 and continued to decline in the subsequent year.

Trend Analysis of Net Profit

0
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

-10 -12

-20
-20 -24
-28 -29
-30
-30
-38
-40

-49
-50
-50

-60

D.TREND ANALYSIS OF RETURN ON INVESTMENT:

TABLE: 4.29
YEAR ROI TREND (%) DIFFERENCE
(RUPEES IN CRORES) (%)
2013-14 10.69 100 0.00
2014-15 8.52 79.71 -20.29
2015-16 6.55 61.28 -38.72
2016-17 6.53 61.13 -38.87
2017-18 9.17 85.81 -14.19
2018-19 10.21 95.50 -4.50
2019-20 9.88 92.40 -7.60
2020-21 10.39 97.23 -2.77
2021-22 11.30 105.76 5.76
2022-23 13.36 124.98 24.98
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED

INTERPREATION:
The Return on Investment (ROI) decreased from 2014-15 to 2020-21, but
started increasing in FY 2021-22 and gradually shifted upwards.
 Trend Analysis of ROI
30.00 24.98

20.00

10.00 5.76
0.00
0.00 -4.50 -2.77
2 0 1 3 - 1 4 2 0 1 4 - 1 5 2 0 1 5 - 1 6 2 0 1 6 - 1 7 2 0 1 7 - 1 8 2 0 1 8 - 1 9 2 0-7.60
1 9 -2 0 2 0 2 0 -2 1 2 0 2 1 -2 2 2 0 2 2 -2 3

-10.00 -14.19
-20.29
-20.00

-30.00
-38.72 -38.87
-40.00

-50.00
4.4 COMPARISON STUDY:

To compare a specific financial statement with earlier period statements,

a comparison study is employed. Investors can see patterns, follow a company's
development, and evaluate it against competitors in the industry by comparing
the most recent financial data with previous financial data displayed in side-by-
side columns.

 Comparison of TOTAL ASSETS

 Comparison of TOTAL LIABILITIES
 Comparison of FIXED ASSETS
 Comparison of NET PROFIT
 Comparison of NET SALES
A.COMPARISON OF TOTAL ASSETS:

TABLE: 4.31

(RUPEES ON CRORES)
YEAR TOTAL INCREASE / DIFFERENCE
ASSETS DECREASE (%)
2013-14 3,67,583 0 0
2014-15 3,97,785 30,202 8.22
2015-16 4,57,720 59,935 15.07
2016-17 5,46,746 89,026 19.45
2017-18 6,17,525 70,779 12.95
2018-19 7,75,745 1,58,220 25.62
2019-20 9,68,912 1,93,167 24.90
2020-21 8,73,673 -95,239 -9.83
2021-22 8,78,674 5,001 0.57
2022-23 8,90,565 11,891 1.35
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTERPRETATION:

Between the fiscal years of 2013–14 and 2022–23, as well as between the
financial years of 2018–19 and 2019–20, the company's yearly total assets
expanded significantly. Its total assets reached a level of 9,68,912 crores in the
2019–20 fiscal year, representing a 164% increase over the base year.

COMPARISON OF TOTAL ASSETS

30
25.62 24.90
25
19.45
20
15.07
15 12.95

10 8.22

5
0.57 1.35
0.00
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
-5
-9.83
-10

-15
B. COMPARISON OF TOTAL LIABILITIES:

TABLE:4.32

(RUPEES IN CRORES)
YEAR TOTAL INCREASE / DIFFERENCE
LIABILITIES DECREASE
2013-14 1,70,492 0 0
2014-15 1,81,609 11,117 6.52
2015-16 2,17,536 35,927 19.78
2016-17 2,58,433 40,897 18.80
2017-18 3,02,878 44,445 17.20
2018-19 3,70,423 67,545 22.30
2019-20 5,44,328 1,73,905 46.95
2020-21 3,99,190 -1,45,138 -26.66
2021-22 4,07,147 7,957 1.99
2022-23 4,11,471 4,324 1.06
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTERPRETATION:

From the fiscal year 2013–14 to 2022–23, as well as from the financial
year 2018–19 and the subsequent fiscal year 2019–20, the company's yearly
total liabilities climbed significantly. In the fiscal year 2019–20, its total
liabilities reached their highest point of 5,44,328 crores, an increase of 46.95%
over the year before.

Comparison of Total Liabiliti es

60

50 46.95

40

30
22.30
19.78 18.80 17.20
20

10 6.52
0.00 1.99 1.06
0
2 0 1 3 -1 4 2 0 1 4 -1 5 2 0 1 5 -1 6 2 0 1 6 -1 7 2 0 1 7 -1 8 2 0 1 8 -1 9 2 0 1 9 -2 0 2 0 2 0 -2 1 2 0 2 1 -2 2 2 0 2 2 -2 3
-10

-20

-30
-26.66
-40
C.COMPARISON OF FIXED ASSETS:

TABLE: 4.33

(RUPEES IN CRORES)
YEAR FIXED INCREASE / DIFFERENCE
ASSETS DECREASE
2013-14 1,51,122 0 0
2014-15 1,90,316 39,194 25.94
2015-16 2,38,289 47,973 25.21
2016-17 2,87,319 49,030 20.58
2017-18 3,00,447 13,128 4.57
2018-19 3,14,745 14,298 4.76
2019-20 3,34,436 19,691 6.26
2020-21 3,39,668 5,232 1.56
2021-22 2,74,288 -65,380 -19.25
2022-23 2,94,079 19,791 7.22
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTERPRETATION:

The company's yearly Fixed Assets rose from the 2013–14 fiscal year to
2020–21, then abruptly decreased from the 2021–22 fiscal year to the
subsequent 2022–23 fiscal year. Its highest Fixed Assets for the 2020–21 fiscal
year were 3,39,668 crores, an increase of 1.56% over the prior year.

Comparison of Fixed Assets

30 25.94 25.21
20.58
20

10 6.26 7.22
4.57 4.76
1.56
0.00
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

-10

-20
-19.25

-30
D.COMPARISON OF NET PROFIT:

TABLE: 4.34

(RUPEES IN CRORES)
YEAR NET PROFIT INCREASE / DIFFERENCE
DECREASE
2013-14 21,984 0 0
2014-15 22,719 735 3.34
2015-16 27,417 4,698 20.68
2016-17 31,425 4,008 14.62
2017-18 33,612 2,187 6.96
2018-19 35,163 1,551 4.61
2019-20 30,903 -4,260 -12.12
2020-21 31,944 1,041 3.37
2021-22 39,084 7,140 22.35
2022-23 44,205 5,121 13.10
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTREPRETATION:

The company's yearly net profit fluctuated from 2013–14 to 2022–23,

abruptly declining from the 2019–20 fiscal year to a negative amount before
gradually increasing again. Its highest Fixed Assets for the fiscal year 2021–
2022 were 44,205 crores, or 13.10% of what company had the year before.

Comparison of Net Profit

25 22.35
20.68
20
14.62
15 13.10

10
6.96
4.61
5 3.34 3.37
0.00
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
-5

-10

-15 -12.12
E.COMPARISON OF NET SALES:

TABLE: 4.35

(RUPESS IN CRORES)
YEAR NET SALES INCREASE / DIFFRENCE
DECREASE
2013-14 4,01,200 0 0
2014-15 3,40,727 -60,473 -15.07
2015-16 2,51,100 -89,627 -26.30
2016-17 2,64,909 13,809 5.50
2017-18 3,14,917 50,008 18.88
2018-19 4,00,139 85,222 27.06
2019-20 3,62,869 -37,270 -9.31
2020-21 2,76,181 -86,688 -23.89
2021-22 4,63,067 1,86,886 67.67
2022-23 5,62,234 99,167 21.42
SOURCE: ANNUAL REPORT OF RELIANCE INDUTRIES PRIVATE
LIMITED
INTREPRETATION:

There are four negative differences in the company's yearly Net Sales
between the fiscal years 2014–15, 2015–16, 2019–20, and 2020–21. The
differences are unequal over all fiscal years. The financial year 2021–2022 had
the highest Net Sales Percentage in Difference, with Net Sales of 4,63,067
crores, an increase of 1,86,886 net sales from the year before, and a difference
of 67.67% from the year before.

Comparison of Net Sales

80
67.67

60

40
27.06
18.88
20
5.50 21.42
0.00
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

-20 -9.31
-15.07

-26.30 -23.89
-40
4.5 LEVERAGE:

Influence is what leverage is. Here, the term "leverage" refers to the
power of one component over another. Answers to these three questions will be
provided.

Question 1 How variations in output or sales revenue affect

"EBIT" (earnings before interest and tax).
Question 2 How is “Earnings Per Share (EPS)” influenced by
changes in “Earnings before Interest and Tax (EBIT).
Question 3 How is “Earnings Per Share (EPS)” influenced by
changes in output or sales revenue.

For example, sales revenue affects EBIT. This effect results in a sales
leverage effect on EBIT. Profit is heavily reliant on sales income.
Mathematically speaking, revenue is an independent variable while profit, or
EBIT, is a dependent variable. The leverage coefficient is the unit of
measurement for this connection. Here are the three categories of leverage
studies:

 Operating Leverage
 Investing Leverage
 Combined Leverage