“A STUDY ON FINANCIAL PERFORMANCE ANALISYIS

OF RELIANCE JIO LTD”

Project Report submitted to

CHRIST COLLEGE (AUTONOMOUS), IRINJALAKUDA

In partial fulfillment of the requirement for the award of the degree of

BACHELOR OF COMMERCE

Submitted by

ANTONY JOY
(CCATBCM151)

Under the supervision of

Ms. SMITHA ANTONY M

(Asst.Professor)

DEPARTMENT OF COMMERCE

CHRIST COLLEGE (AUTONOMOUS), IRINJALAKUDA

UNIVERSITY OF CALICUT

MARCH 2022
 CHRIST COLLEGE (AUTONOMOUS), IRINJALAKUDA

CALICUT UNIVERSITY

DEPARTMENT OF COMMERCE

CERTIFICATE

This is to certify that the project report entitled “A STUDY ON FINANCIAL

PERFORMANCE ANALISYIS OF RELIANCE JIO LTD ” is a
bonafide record of project done by ANTONY JOY, Reg. No. CCATBCM151,
under my guidance and supervision in partial fulfillment of the requirement for
the award of the degree of BACHELOR OF COMMERCE and it has not
previously formed the basis for any Degree, Diploma and Associateship or
Fellowship.

Prof. K.J.JOSEPH Ms. SMITHA ANTONY M

Co-ordinator Project Guide
 DECLARATION

I, ANTONY JOY, hereby declare that the project work entitled “A

STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF RELIANCE’S
JIO LTD” is a record of independent and bonafide project work carried out by
me under the supervision and guidance of Ms. Smitha Antony M, Assistant
Professor, Department of Commerce, Christ College, Irinjalakuda.

The information and data given in the report is authentic to the best of my
knowledge. The report has not been previously submitted for the award of any
Degree, Diploma, Associateship or other similar title of any other university or
institute.

Place: Irinjalakuda ANTONY JOY

Date: CCATBCM151
 ACKNOWLEDGEMENT

I would like to take the opportunity to express my sincere gratitude to all people
who have helped me with sound advice and able guidance.

Above all, I express my eternal gratitude to the Lord Almighty under whose
divine guidance; I have been able to complete this work successfully.

I would like to express my sincere obligation to Rev.Dr Jolly Andrews, Principal- in-
Charge, Christ college Irinjalakuda for providing various facilities.

I am thankful to Prof. K.J Joseph, Co-ordinator of B.Com (Finance), for

providing proper help and encouragement in the preparation of this report.

I am thankful to Ms. Smitha Antony M, Class teacher for her cordial support,
valuable information and guidance, which helped me in completing this task
through various stages.

I express my sincere gratitude to Ms. Smitha Antony M, Assistant Professor,

whose guidance and support throughout the training period helped me to
complete thiswork successfully.

I would like to express my gratitude to all the faculties of the Department for
their interest and cooperation in this regard.

I extend my hearty gratitude to the librarian and other library staffs of my college
for their wholehearted cooperation.

I express my sincere thanks to my friends and family for their support in

completing this report successfully.
 SL.NO CONTENTS PAGE NO:

LIST OF TABLES

LIST OF FIGURES

CHAPTER 1 INTRODUCTION 1-5

CHAPTER 2 REVIEW OF LITERATURE 6-13

COMPANY AND INDUSTRY 14-24

CHAPTER 3
PROFILE

DATA ANALYSIS AND 25-37

CHAPTER 4
INTERPRETATION

FINDINGS, SUGGESTIONS 38-41

CHAPTER 5
& CONCLUSION

BIBLIOGRAPHY

ANNEXURE
 LIST OF TABLES

TABLE TITLE PAGE

NO: NO:

4.1 Table showing Current Ratio 26

4.2 Table showing Liquidity ratio 27

4.3 Table showing Absolute liquid Ratio 28

4.4 Table showing Debt Equity Ratio 29

4.5 Table showing Operating Ratio 30

4.6 Table showing Proprietary Ratio 31

4.7 Table showing Fixed Assets Ratio 32

4.8 Table showing Fixed Asset Turnover Ratio 33

4.9 Table showing Gross Profit Ratio 34

4.10 Table showing Net Profit Ratio 35

4.11 Table showing Solvency Ratio 36

4.12 Table showing Divident Payout Ratio 37

 LIST OF FIGURES

TABLE TITLE PAGE

NO: NO:

4.1 Figure showing Current Ratio 26

4.2 Figure showing Liquidity ratio 27

4.3 Figure showing Absolute liquid Ratio 28

4.4 Figure showing Debt Equity Ratio 29

4.5 Figure showing Operating Ratio 30

4.6 Figure showing Proprietary Ratio 31

4.7 Figure showing Fixed Assets Ratio 32

4.8 Figure showing Fixed Asset Turnover Ratio 33

4.9 Figure showing Gross Profit Ratio 34

4.10 Figure showing Net Profit Ratio 35

4.11 Figure showing Solvency Ratio 36

4.12 Figure showing Divident Payout Ratio 37

 CHAPTER I
INTRODUCTION

1
1.1 Introduction

Finance is the soul and blood of any business - The study of financial statement is prepared
for the purpose of presenting a periodical review. Finance is defined as the management of
money and it includes activities such as investing, borrowing, lending, budgeting, Saving
and forecasting. Finance is the most dominant factor in a business.

Financial Performance analysis is process of identifying the financial the strengths and
weaknesses of the firm. It can be undertaken either by the management of the company or
by outside parties. The analysis is for finding the current position of the company. This
analysis is being used by creditors, shareholders and the board. The nature of analysis
defers depending upon the purpose of the analysis. The analyst is able to say how well the
company could utilize the resource of the society in generating goods and services.
Turnover Ratios are the best tools in deciding these aspects

Reliance Jio Infocomm Limited is an Indian telecommunications company. an underlying

venture of around 150000 crore, Mr. Mukesh Ambani established the framework stones
and began laying foundation essential for his marketable strategy's execution.

Reliance Group is India’s largest Private sector company. It has business across the energy
and materials Value chain and a strong presence in the rapidly expanding retail and
telecommunication Sector. It operates LTE ( Long Term Evolution network with coverage
across all 22 telecom circles. It does not offer 2G or 3G service , and instead users only
voice one LTE to provide service on its 4G network.

The financial performance analysis of the company is done for the Period of five years.
The objective of this study is to evaluate the financial Position of the company. And also
to know whether the business is making Profit or not, is maintaining liquidity Position and
to know the divident growth of the company.

2
1.2 Statement of the problem.

Telecommunication scenario in India has changed after the implementations of

liberalization and privatisation policies in the sector, then the telecommunications Sector
have been transformed into a Competative environment. The Telecom (JIO) Sector plays
an important role for the growth of the economy. It is necessary to measure the financial
Performance and growth of this sector with helped in the development of various other
sectors of the economy.

The proposed study, "A Financial Performance of Reliance Jio Ltd in India" throws light
on the financial condition and financial performance of an Indian telecom Sector over a
given period of time.

1.3 Scope of Study.

The study covers almost the entire area of Financial operations covered by "Reliance
Industries Ltd”. The study has been Conducted with the help of the data obtained from
audited financial records. The audited financial records are the company annual reports of
past 5 years and the audited financial records are obtained from the company's annual
report. The researcher tries to measure the performance of the organisation. The main aim
of the study is to understand the financial Position of Reliance Jio Ltd.

1.4 Objective of the Study.

1.4.1 Main Objective

To understand the financial position of Reliance JIO Ltd in India.

3
1.4.2 Sub Objective
• To evaluate the financial position of JIO Ltd from the year 2016-17 to 2020-21 In terms
of Liquidity, Solvency, profitability and to analyze the financial changes over period of
five years.

1.5 Research Design.

1.5.1 Nature of Study : The study is analytical in nature.
1.5.2 Nature of Data : secondary data is used in the study. It include accounting
informations such as yearly net profits, earnings per share etc...
1.5.3 Sources of Data : The study is based on Secondary data, which is collected from
company’s annual reports and their websites. The data collected are compared with
the help of ratios, graphs, tables etc...
1.5.4 Period of Study : The study is conducted over a period of 5 years (2016-17 - 2020- 21)

1.6 Tools for Analysis.

The tool applied is Ratio analysis. The analysis and interpretations of financial statements
is to determine the financial position. Ratio analysis is used to study liquidity, Profitability
and solvency position of the company. The following tool used for analyzing the financial
position of the Company like profitability, Activity, solvency, liquidity ratios and also
comments on them.

1.7 Limitations of the Study.

• The study is restricted for a period of five years.

4
• Secondary data’s drawback also reflects on the data

• Since the study relates only to the financial performance of Reliance Jio, the findings and
Suggestions cannot be generalised.

1.8 Chapterization.

Chapter 1 : Introduction

Chapter 2 : Review of literature

Chapter 3 : Industry profile and company profile

Chapter 4 : Analysis and Interpretation of data

Chapter 5 : Findings, suggestion and conclusion

5
 CHAPTER II
REVIEW OF LITERATURE

6
2.1. Introduction
Telecommunication industry is one of the most developing Venture. Jio in the
telecommunication company owned by Reliance Ltd. It emerges one of the fastest growing
telecom operator in India. JIO focused in generating huge revenue by providing quality
service at cheaper rate using the latest technology. In Indian market, it is the first mover
advantage for JIO with a biggest 4G network coverage infrastructure all across 22 telecom
circles in India. Researchers attracted with the tough Competitive atmosphere and have
undertaken Various research studies towards measuring and analyzing these elements.
Various studies have been undertaken to measure and analyze the telecom Sector in the
light of economic role, performance, development, competition and financial soundness of
the telecom sector with respect to this, an attempt has been made at a review of such
relevant studies

2.2. Conceptual Review

The firms financial analysis means the analysis and interpretation of financial statements.
Financial statement refer to such statements which contain financial information about an
enterprise. They report profitability and the financial Position of the business at the end of
the accounting Period. The financial statement generally refers to two statement :

(a) The position statement or Balance sheet.

(b) The income statement or profit and loss account.

7
2.2.1. Ratio Analysis

Ratio Analysis is widely used technique for analysing financial statements. Ratio Analysis
is the method by which the relationship or group of items in the financial statement are
computed, determined and presented. It is the systematic use of accounting ratios in order
to weight and evaluate the operating Performance of a firm. One number expressed in terms of
another number is the ratio analysis. It refers to the numerical relationship between two
figures.

(A) Current Ratio.

Current ratio is defined as the relationship between current assets and current liabilities.
This ratio is also called Working capital ratio, is a measure firms short term solvency, that
is the firm's ability to meet short term obligations. In the sound of business, a current ratio
of 2:1 is considered as an ideal one.

current Ratio = current Asset /current Liabilities

(B) Liquidity Ratio/Quick Ratio

Liquidity ratio is the ratio of liquid assets to current liabilities. liquid ratio compares the
quick assets with the quick liabilities. It is also known as acid test ratio. An acid test ratio
is considered to be satisfactory as a firm can easily meet all its current liabilities.

Liquid ratio = Liquid assets/current Liabilities

8
(C) Absolute Liquid Ratio/Cash Ratio

This is also called super quick ratio.. It shows the relationship between cash and current
liabilities. This ratio considers only the absolute liquidity available with the company.
Absolute Land assets include Cash in hand and cash at bank and marketable securities The
acceptable norms for this ratio is 0.75:1

Absolute liquid ratio = (cash and bank + short term securities) / current liabilities

(D) Debt Equity Ratio

This ratio shows the relationship between total debt and owned debt. This ratio indicates
the relative proportion of debt and equity in financing the assets of the company.

Debt Equity

(E) Operating Ratio

It expresses the relationship between operating costs and sales. The overall efficiency of
operations in the business can be indicated by this ratio.

Operating Ratio = (cost of goods sold + operating expenses) / net sales

(F) Proprietary Ratio

Proprietary ratio determine the long term Solvency of the company. This establishes the
relationship between shareholders or proprietors fund and total assets. Proprietary ratio
compares the proprietor fund with total liabilities. It is expressed in the form of Percentage.
It is also known as Equity Ratio / Worth ratio

Proprietary Ratio = Shareholders Fund / Total Assets

9
(G) Solvency Ratio

Solvency ratio expresses the relationship between total liabilities to total assets of a
business. It measures the solvency of the business and is usually expressed as a Proportion.

Solvency Ratio = Total Liabilities / Total Assets

(H) Fixed Asset Ratio

It is the ratio of fixed assets to shareholders fund.

Fixed Assets Ratio = Fixed Assets (after depreciation) / Shareholders Fund

(I) Fixed Assets Turn Over Ratio

This ratio measures the efficiency with which fixed assets are employed. It established the
relationship between Net sales and Fixed Assets. A high ratio indicates a high degree of
efficiency in asset utilization while low ratio reflects an inefficient use of assets.

Fixed Assets Turnover Ratio = Net Sales / Net Fixed Assets

(J) Net Profit Ratio

Net Profit Ratio indicates the relationship between the net profit and the sales. It is usually
expressed in the form of a percentage. It measures overall profitability.

Net Profit Ratio = Net Profit / Net Sales * 100

(K) Gross Profit Ratio

This measures the relationship between gross profit and sales. It is defined as the excess of
net sales over cost of goods sold or excess of revenue over cost

Gross Profit Ratio = Gross Profit / Net Sales * 100

10
 (L) Divident Payout Ratio

This ratio measures the relationship between the divident Paid to equity shareholders and
the earnings belonging to them. It is expressed as follows:

Divident Payout ratio = divident Paid to Equity shareholders / Net Profit Belonging to
Equity shareholders

or

Divident Per Share / Eps

2.3 Empirical Literature

Ajmera Tushar R. (2020) conducted the study to measure profitability of selected companies of
telecommunication sector in India. The study was also focused on identifying: liquidity and
solvency of the selected telecommunication companies, and how these indicators determine their
management efficiency. The study period was from 2013-14 to 2017-18. Three companies were
selected whose market capitalization was highest, i.e. Bharti Airtel. Tata Communication and Tata
Communication. The ratio analysis was used as accounting tool and One-way Anova technique is
used as statistical tool for the identification of difference between the sample means.

Dr. V. Devaki (2020) conducted the study to provide an overview of the capital structure of three
private telecom service provider companies. Airtel, Vodafone and Tata Teleservices were
considered for the study on the basis of some selection parameters. The study provides us an insight
into the financing pattern. profitability, indebtedness and the components of capital structure of the
selected telecom companies. The study focused on equity share capital parameter of the companies
and the data was analysed using average mean statistical tool.

Dr. R Parma (2019) in their study Financial Performance of Selected Indian Food Products
11
Industry Drug Posting- Reform Period' analyzed the financial performance of selected Indian food
products industry from 1991 1992 to 2015-2016. They observed that maximum growth rate was
found in operating leverage ratio at 1.39% and minimum growth rate was found in financial analysis
at turnover ratio at 12%, They concluded that industry's ability to honor debt payment was
satisfactory.

Dr. R. Malini (2019) made their analysis on The Financial Performance Analysis of Indian
Tobacco Corporation Limited. The study on financial performance analysis of Indian Tobacco
Corporation limited aims to analyze liquidity, profitability, efficiency and solvency of the firm. The
study covers a period of 5 years (1.4.201331.3.2017). They suggested that the firm needs to
minimize operating expenses to get higher net profit and the firm should take steps to utilize
maximum of resources and inventory. They concluded that the overall financial performance of the
firm is better.

Atashi Bedi (2018) conducted the study to evaluate the disparity between pre-&post acquisition
fiscal performance of concerned telecommunication companies in terms of profitability, liquidity
and solvency. Five year data has been taken for study of which two years are of before merger, two
years after merger and year in which merger happened were considered. The analysis was based on
various accounting ratios. The statistical tool used for analysis is sample t-Test.

Saad M &Zhengge, (2016) studied the linkages between organizational factors, including
liquidity, leverage, asset utilization, market share position and firm size on financial performance
in service finus and concluded: There is a strong need for the formulation of the specific model that
addresses the relationship between organizational linkages and fum performance.
Hajek, P., & Olej, V. (2014) found that this paper develops a methodology to extract concepts
containing qualitative information from corporate annual reports. The methodology makes it
possible to easily compare the concepts with future financial performance. The results suggest that
annual reports differ in terms of the concepts emphasized reflecting future financial performance.

12
Neha Verma and Rahul Sharma (2013) conducted the study to observe the impact of different
form of mergers on the financial performance of companies before and after merger took place, in
Indian Telecom Sector. A total of 39 mergers were considered for the study which were from time
period between 2001-2002 to 2007-2008. The comparison was made between three type of mergers
which are, horizontal, vertical and conglomerate merger. The data is secondary and include fiscal
performance ratios which are collected from PROWESS. a CMIE database. 3 years pre & post
fiscal ratios were taken in consideration for each merger.

Dr Sanjay Pandey and Vijay Verma (2013) has conducted the study to analyse the fiscal
soundness of telecommunication companies. They have considered certain important fiscal factors
like asset utilization, turnover, profit and the other variables which are found in P&L account,
balance sheet of a company. By using these variables one can analysis fiscal soundness in terms of
viability, liquidity, sustainability, profitability. They focused on an empirical approach to measure
fiscal soundness and to identify important fiscal aspects and their effect on telecom companies.

R. Ananthi and R. Sriram (2012) conducted the study for performance assessment of selected
telecommunication companies. They applied numerical taxonomic approach for doing this. This is
a type of rating method which ranks selected subject by using a sum of ratios or indices. Here they
considered fiscal ratios as a tool for measuring the performance. The study was based on secondary
information collected from the financial documents of the telecom companies. The observation
duration was of five years, starting from 2004-2005 to 2008-2009.

Yunus, N.M., Malik, S.A. (2012) states that the use of financial model is to predict the performance
of a company. The theoretical analysis in the development of model is done using the matrix
solution of the Matlab software. The model is then validated with the actual company's business
performance to determine the predicting accuracy.

Hooks, Jill. (2007) found that this research examines the financial performance of three entities
over a fifteen year period. The aim is to determine the influence of corporatization,

13
commercialization and ownership form on the reported financial performance of three entities.

14
 CHAPTER III

INDUSTRY PROFILE AND COMPANY

PROFILE

15
3.1 Introduction
A well developed telecom sector has a significant impact on the growth of an economy.
Telecom sector in India has changed entirely since liberalization took place and the public
sectors' monopolies have been replaced with the competitive regime. 146.64 Mobile
cellular telephone subscription (in millions). The telecommunication services have been
recognized globally as an essential tool for economic development of a country. It is
considered as one of the prime support services required for the speedy growth and
development of various sectors of the economy. Indian telecom sector has undergone a
major process of telecom revolution through major policy reforms. Guided by various
policy initiatives, the Indian telecommunication sector witnessed an absolute
transformation in the last decade. It has achieved extraordinary growth during the past few
years and is poised to take big steps in the future days. Telecom equipment manufacturing
was de-licensed in 1991 and value added services were declared open to the private sector
in 1992, following which radio paging, cellular mobile and other value added services were
opened gradually to the private sector. This has resulted in a large number of manufacturing
units being set up in the country. As a result most of the equipment used in the telecom
sector is being manufactured within the country. The Indian telecommunication sector is
recognized as the second largest in the world in terms of the number of subscriber's base.
The sector has observed high growth over the past few years which was mostly due to the
factors like low tariffs, wider service coverage and availability, roll out of new facilities
and other services such as Mobile Number Portability, 3G and 4G network service, growing
consumption patterns of consumers, and favorable regulatory environment. Indian
telecommunication has been considered as the worlds' most competitive and fastest
growing telecommunication markets. The telecom 6 TRAI Annual Report 2017-18 8
Industry has developed over twenty times in just ten years, from less than 38 million
consumers in the year 2001 to more than 845 million subscribers by the year 2011. Now
India is the world's second-largest telecom market with a cellular phone user base with
more than 1200 million users and world's second-largest Internet market with a subscriber
base of more than 490 million as of march 2018. Telecommunication sector has supported
16
the socioeconomic development of an economy and it has played a significant role to
decrease the rural-urban digital divide to some level. It has also supported increasing
transparency in governance with the beginning of an e-governance system in the country.
The government has sensibly used the new telecommunication facilities and services to
deliver mass education programmes for the rural area of India.

3.1.1 Importances of Telecommunication in Various Sectors: Telecommunication

connects different parts of the world through different modes like telephone, radio,
television, satellite and internet. Telecom Industry is now considered as an essential sector
for the overall development of the country as it is contributing towards "immense growth,
quick expansion and up gradation of different sectors" of the country.

In recent scenarios communication plays a very important role in human life. Nowadays
information is considered to be one of the very important factors for the efficient growth
of an economy. Effective and efficient controlling systems can be implemented only
through improved communication and with better use of telecommunication equipment.

Infrastructure:

Infrastructure is the physical and organizational structures needed for the operation of a
society or enterprise or the services and facilities necessary for an economy to efficiently
function. The term typically refers to the technical structures that support a society, such
as roads, water supply, electrical grids, telecommunications, etc. Viewedfunctionally,
infrastructure facilitates the production of goods and services; for example,roads enable the
transportation of raw materials to a factory. and also for the distribution of finished products
to markets and basic social services such as schools and hospitals. It has been observed that
transport infrastructure is extremely important for economic development ofany country
which includes roads, bridges, and tunnels, and for safe traffic various
telecommunication equipment are very important for the smooth traffic in the entire
transportation sector i.e. road, rail, air and water. Use of telecommunication devices and

17
technology in various modes of transportation is increasing day by day as it is needed for
smooth functioning.

Agriculture:

This is the most essential sector in the Indian economy as our country is mostly depending
on the agriculture for its economic development. Few years ago farmers were not in a good
condition because of lack of proper information with respect to the weather prediction,
price of their commodity, proper advice from the agro expert,market condition etc. Hence,
Middlemen were exploiting the farmers as farmers were not able to communicate with their
counterparts in different parts of the country and abroad to know about the prices and
demand of their crops. But now due to the revolution in the telecommunication sector the
farmers even from rural areas, they can take advantage of the various telecom devices and
technology. Now with the help of telecom technology farmers can discuss their problems
with the expert and can take their advice regarding farming by using different types of
telecommunication devices.

Education:

The literacy rate in India is 70.04% as per the latest census survey. Though it is improving
fast but still it is behind the world literacy rate i.e. 84%. In the rural area of the country, the
condition of education is still very poor. But due to the latest technology in the
telecommunication sector one can run a school without being physically present there. With
the use of internet technology a professor can give a lecture from a distant place to the entire
classroom and even the students can ask the questions and can clear their queries. With the use
of multimedia technology students can understand the subject very well as they practically
see the things happening. they can also appear for various online examinations by using
internet facilities and can make use of the internet for their study and research work.
Distance learning, which provides an educational structure for studentsnot in face-to-face
contact with a teacher, is an example of the dramatic changes in education and learning
activity resulting from tele-structure and tele-process. Compared to

18
traditional learning, tele processed distance learning allows many different combinations
of audio-video, and data exchange and interaction which, makes learning effective and
efficient.

Health:

Information and telecommunications technologies play a very crucial role to provide and
support health care when distance separates the participants. According to Dr. HamadounI
Toure, If we are going to be able to deliver health care for all this new century of
connectivity, it will be through cooperation and partnership between the technology and
healthcare sectors. Telecommunication is receiving increasing attention not only in remote
areas where health care access is troublesome but also in urban and suburban areas. Video
conference is very important when the doctors are not able to physically visit the patient's
place. Doctor can give advice to his counterpart with the help of video conferencing when
there are some complications in the health of a patient. Telecommunications can also
expand home health care service access through new attachments to home telephone
service, providing consultation and monitoring services as and when needed, especially to
the less mobile elderly population, while reducing the number of trips to health centers.
Care will be more cost effective when it is based on electronic access. Personal medical
records, extensive and current best medical practice information, and consultations
delivered by tele-conference to the most appropriate location, which might be located in
remote area from the healthcare professional is possible only because of development of
telecommunication technology.

Business Sector:

Today telecommunication is the lifeblood of all the business sector. We can't imagine any
organization without the use of telecommunication. In every sector of business, use of
telecommunication technology is a prerequisite for efficient functioning
Telecommunications, which is very essential for smooth business operations, is the
transmittal of data and information from one point or place to another Telephoning, faxing,

19
e-mail, the World Wide Web none of these essential services would be available without a
fast and reliable telecommunications system. The concept of electronic commerce would
be impossible without an efficient telecommunication system. Managers can use
telecommunication technology for better controlling and better administration of work.
Telecommunications technology can reduce geographical distance to an irrelevant factor.
E-mail, voice mail, file transfer, faxing, cellular telephony, and teleconferencing allow for
full communication, whether among managers, between managers and their staff, or among
different organizations. Telecommunications can also be used by a person to monitor
performance of another person in real time. Telecommunications is used to communicate
instructions and receive feedback without requiring people to coordinate their schedules to
hold a meeting. Use of e-mail has brought some secondary benefits to business
communications. Telecommunication makes the world a global village. The distances of
people from different countries get closer and are connected With the help of technology,
keeping in touch with other people becomes very easy and Uncomplicated

Government Sector:

Government agencies at all levels are introducing new applications of telecommunications

for their variety of operational functions, primarily to improve the quality of services to the
public, but also to reduce the cost of providing those services and to improve efficiency
and effectiveness. Some examples of the use of telecommunications have been in the area
of document handling systems, to make it easier for agencies to process the paperwork
related with issuing regulations, granting permits, recording transfers of properties,
improving the use of information to collect taxes or assessments, and processing claims for
benefits. Many of the applications of 20 telecommunications allow agencies to provide
services to clients in a matter of minutes rather than hours and by telephone rather than in
person. Telecommunication technology can be very useful during natural calamity in any
part of the country. At the time of earthquakes, floods and cyclones valuable lives can be
saved with the help of telecommunication technology.

20
3.2 Company Profile

History
The company was registered in Ambawadi, Ahmedabad, Gujarat on 15 February 2007 as
Infotel Broadband Services Limited (IBSL.). In June 2010,Reliance Industries (RIL)
bought a 95% stake in IBSL for 24,800 crore (US$670 million). Although unlisted, IBSL
was the only company that won broadband spectrum in all 22 circles in India in the 4G
auction that took place earlier that year. Later continuing as RIL's telecom subsidiary,
Infotel Broadband Services Limited was renamed as Reliance Jio Infocomm Limited
(RJIL) in January 2013.

In June 2015, Jio announced that it would start its operations throughout the country by the
end of 2015.However, four months later in October, the company postponed the launch to
the first quarter of the financial year 2016-2017.

Later, in July 2015, a PIL(Public Interest litigation) filed in the Supreme Court by an NGO
called the Centre for Public Interest Litigation, through Prashant Bhushan, challenged the
grant of a pan-India licence to Jio by the Government of India. The PIL also alleged that
the firm was being allowed to provide voice telephony along with its 4G data service, by
paying an additional fee of just 2165.8 crore (US$23 million) which was arbitrary and
unreasonable, and contributed to a loss of 22,284.2 crore (US$320 million) to the
exchequer. The Indian Department of Telecommunications (DoT), however, explained that
the rules for 3G and BWA spectrum didn't restrict BWA winners from providing voice
telephony. As a result, the PIL. was revoked, and the accusations were dismissed. The 4G
services were launched internally on 27 December 2015. The company commercially

21
launched its 4G services on 5 September 2016, offering free data and voice services till 31
December, which was later extended till 31 March 2017.Within the first month, Jio
announced that it had acquired 1.6 crore (16 million) subscribers Jio crossed 5 crore (50
million) subscriber mark in 83 days since its launch, subsequently crossing 100 million
subscribers on 22 February 2017. By October 2017 it had about 13 crore (130 million)
subscribers.

3.2.1 Products and services:

Mobile broadband:

The company launched its 4G broadband services throughout India in September 2016.It
was slated to release in December 2015 after some reports said that the company was
waiting to receive final permits from the government. Jio offers fourth-generation (4G)
data and voice services, along with peripheral services like instant messaging and
streaming movies and music.

Jio Fiber:

In August 2018, Jio began to test a new triple play fiber to the home service known
tentatively as Jio GigaFiber, including broadband internet with speeds ranging from 100 to
1000 Mbit/s, as well as television and landline telephone services.

In August 2019, it was announced that the service would officially launch on 5 September
2019 as JioFiber, in honour of the company's third anniversary. Jio also announced plans
to offer streaming of films still in theatres ("First Day First Show") to eligible JioFiber
subscribers.

The company has a network of more than 250,000 km of fiber optic cables in the country,
over which it will be partnering with local cable operators to get broader connectivity for
its broadband services.

22
JioPhone:
Jiophone is a line of feature phones marketed by Jio. The first model, released in August
2017 (with public pre-orders beginning 24 August 2017), was positioned as an "affordable"
LTE-compatible feature phone. It runs the KaiOS platform (derived from the defunct
Firefox OS), and includes a 2.4-inch display, a dual-core processor, 4 GB of internal
storage, near-field communication support, a suite of Jio-branded apps (including the voice
assistant Hellolio), and a lio-branded application store. It also supports a "TV cable
accessory for output to an external display.

In July 2018, the company unveiled the JioPhone 2, an updated model in a keyboard bar
form factor with a QWERTY keyboard and horizontal display. Jio also announced that
Facebook, WhatsApp, and YouTube apps would become available for the two phones.

Jionet Wi-Fi:

Prior to its pan-India launch of 4G data and telephony services, the firm has started
providing free Wi-Fi hotspot services in cities throughout India including Surat,
Ahmedabad in Gujarat, and Visakhapatnam in Andhra Pradesh, Indore, Jabalpur, Dewas
and Ujjain in Madhya Pradesh, select locations of Mumbai in Maharashtra, Kolkata in West
Bengal, Lucknow in Uttar Pradesh, Bhubaneswar in Odisha, Mussoorie in Uttarakhand,
Collectorate's Office in Meerut, and at MG Road in Vijayawada among others. In March
2016, Jio started providing free Wi-Fi internet to spectators at six cricket stadiums hosting
the 2016 ICC World Twenty20 matches.

JIO APPS:

In May 2016, Jio launched a bundle of multimedia apps on Google Play as part of its
upcoming 4G services. While the apps are available to download for everyone, a user will
require a Jio SIM card to use them. Additionally, most of the apps are in the beta phase
Notable apps include:

• JioPages - a web browser for Android devices

• JioChat - instant messaging app

23
• JioCinema - online HD video library. JioCloud-cloud-based backup tool

• JioHealth - health services app

• JioNews - e-reader for news • JioMeet-video-conferencing platform

• JioMoney - online payments/wallet app

• JioSaavn - for online and offline music streaming in English and Indian languages

• JioSecurity - security app

• JioTV - TV Channels streaming service JioVoice-VoLTE phone simulator

• MyJio - manage Jio account and digital services associated with it

Jio digital and television service:

Jio TV

Jio TV is an app based service enabling Jio customers to view TV channels & programmes
on their preferred digital devices.

Jio TV+

Jio TV is a service which provides customers access to various VoD and OTT services
from all over the world in one app.

JIO Vision and Mission:

Jio Platforms Limited (Jo) is creating a massive digital ecosystem for a billion Indians with
domain expertise across business verticals in the platform company. The platform company will not
just provide world-class fixed-mobile converged connectivity, but also digital solutions
across business verticals and the customer life cycle.

Jio has made investments in excess of USS50 billion since inception to create the largest
and most advanced digital and connectivity ecosystem in India, with a rich bouquet of

24
successful apps and platforms. Jio's services span across connectivity and cloud, media,
digital commerce, financial services, gaming, education, healthcare, agriculture,
Government to Citizen (G2C), smart cities and manufacturing.

Jio has created strong internal capabilities across the following key digital technologies:
Infrastructure as a Service (laaS), Platform as a Service (PaaS), Big Data, Augmented
Reality/Virtual Reality (AR/VR), Internet of Things (IoT). Blockchain, Artificial
Intelligence (AI), Machine Learning (ML), edge computing, speech/natural language,
supercomputing, computer vision, robotics and drones. These capabilities will power the
creation of reimagined solutions for various ecosystems.

Jio envisages a significant opportunity in building a digital society for the citizens of the
country, which besides catalysing productivity and overall economic growth would also
generate shareholder returns over the next several decades. Jio is geared up to touch the
lives of over a billion Indians!

Jio's vision is to transform India with the power of digital revolution - to connect everyone
and everything, everywhere-always at the highest quality and the most affordable price.

25
 CHAPTER IV
DATA ANALYSIS AND
INTREPRETATION

26
 Table 4.1: Table showing Current ratio
CURRENT CURRENT CURRENT RATIO
YEAR ASSETS LIABILITIES
B A/B
A
2016 146813.00 235315.00 0.62
2017 183786.00 313852.00 0.58
2018 232053.00 317322.00 0.73
2019 258260.00 412915.00 0.62
2020 373011.00 277568.00 1.34
(source: Secondary data )
From the above table it is clear that the current ratio of the company showed a decreasing
trend from the year 2017-2021. It had reached 0.73 at its peak. Generally 2:1 is the trend
as the ideal ratio. It means that the company after paying 2019 off current liabilities has
less sufficient working capital requirement. The consistent decrease in the value of current
assets will decrease the ability of the company to meet its obligations & therefore from the
point of view of creditors the company is more risky.

Figure 4.1 Figure showing current ratio

27
 Table 4.2 : Table showing Liquidity Ratio
YEAR CURRENT INVENTORY LIQUID CURRENT LIQUID
ASSETS ASSETS LIABILITIE RATIO
A B (C=A-B) S (E=C/D)
D
2017 146813.00 48951.00 97862.00 235315.00 0.41
2018 183786.00 60834.00 122949.00 313852.00 0.39
2019 232053.00 67561.00 164492.00 317322.00 0.51
2020 258260.00 73903.00 184357.00 412915.00 0.44
2021 373011.00 81672.00 291329.00 277568.00 1.04
(source: Secondary data )
Above table shows that the liquid ratio of the Company showed an inconsistent trend from
the year 2017-2021. The liquid ratio indicates the liquid financial position of an enterprise,
which shows that the company follow low liquidity position to achieve high profitability.
Generally 1:1 is Considered as the ideal ratio. The dependence on long term liabilities and
creditors are more and the company is following an aggressive working Capital policy. The
company lacks the instant debt paying capacity as the ratio is inconsistent.

Figure 4.2 Figure showing Liquid Ratio

28
 Table 4.3 : Table showing Absolute Liquid Ratio

YEAR CASH AND CASH CURRENT ABSOLUTE LIQUID

EQUALANTS LIABILITIES RATIO
A B C=A/B
2017 3023.00 235315.00 0.012
2018 4255.00 313852.00 0.013
2019 11081.00 317322.00 0.034
2020 30920.00 412915.00 0.074
2021 17397.00 277568.00 0.062
(source: Secondary data )

The ratio of 0.50:1 is recommended to ensure the liquidity positions of the company. It
reached its maximum in the year 2020. In the year 2017 it was 0.012 and increased in the
coming years. So company has relatively high liquidity profile.

Figure 4.3 Table showing Absoulte Liquid Ratio

29
Table 4.4 : Table showing Debt Equity Ratio

YEAR TOTAL EQUITY DEBT EQUITY

LIABILITIES RATIO
A B A/B
2017 445713.00 2959.00 1.50
2018 519303.00 5922.00 0.87
2019 607014.00 5926.00 1.02
2020 704567.00 6339.00 1.11
2021 521780.00 6445.00 0.80
(source: Secondary data )
The P/E ratio is used to evaluate a company's financial leverage. It is a measure of the
degree to which a company is financing its operations through debt versus wolly owned
funds. The debt equity ratio is 1:1. It is usually considered to be good and satisfactory. Here we
can see that the company in the year 2017 has achieved a higher leverage ratio. which
indicates a company or stock with higher risk to Shareholders.

Figure 4.4 : Figure showing Debt Equity Ratio

30
Table 4.5 : Table showing Operating Ratio

YEAR COGS + NET OPERATING

OPERATING SALES RATIO
EXPENSES
A B A/B
2017 39966.00 305382.00 0.13
2018 56742.00 391677.00 0.14
2019 145566.00 569209.00 0.25
2020 167480.00 596743.00 0.28
2021 114059.00 486326.00 0.23
(source: Secondary data )
The Operating ratio shows the relationship between cost of activities and net sales. A low
operating ratio means a high net profit ratio and Vice versa. The operating ratio over a
period of fine years, when compared, indicates the operational efficiency of a company.
Thus the company throws a high operating ratio, which is not favorable since it implies
there is a smaller margin of profit available for the pourpose of payment of dividend and
creation of reserve.

Figure 4.5 : Figure showing operating Ratio

31
Table 4.6 : Table showing Proprietary Ratio

YEAR SHAREHOLDERS TOTAL PROPRIETARY

FUND ASSETSB RATIO
A A/B
2017 263705.00 712339.00 0.37
2018 293491.00 816348.00 0.35
2019 387112.00 1002406.00 0.38
2020 449166.00 1165915.00 0.38
2021 700172.00 1321212.00 0.52
(source: Secondary data )
The ratio shows the general financial health of the firm generally, a ratio of 0.5:1 is
considered as ideal Ratio continued to be constant in the following years which is 0.3. The
proprietary ratio shows the contribution of the shareholders in total capital of the Company.
Therefore this indicates a strong financial Position of the company and greater security for
creditors.

Figure 4.6 : Figure showing Proprietary ratio

32
Table 4.7 : Table showing Fixed Asset Ratio

YEAR FIXED CAPITAL FIXED

ASSETS EMPLOYED ASSETS RATIO
A B A/B

2017 518471.00 477024.00 1.08

2018 585094.00 502496.00 1.16
2019 565840.00 685084.00 0.82
2020 631505.00 753000.00 0.83
2021 656999.00 277568.00 2.36
(source: Secondary data )
A fixed asset ratio of 0.67 : 1 is considered to be ideal. It measures how much proportion
of long term funds invested in fixed assets. In 2017 and 2018 it implies more effective
utilisation of investment on fixed assets to generate, revenue. In the year 2019 and 2020 it
reduced which is not satisfactory. And in the year 2021, increased, so high satisfaction.

Figure 4.7 : Figure showing Fixed Assets Ratio

33
Table 4.8 : Table showing Fixed Assets Turnover Ratio

YEAR NET SALES NET FIXED ASSETS

FIXED ASSETS TURN OVER
A B RATIO
A/B
2017 305382.00 518471.00 0.58
2018 391677.00 585094.00 0.66
2019 569209.00 565840.00 1.00
2020 596743.00 631505.00 0.94
2021 486326.00 656999.00 0.74
(source: Secondary data )

The fixed asset turnover ratio is a metric that measures how effectively a company generates sales
using its fixed assets. There is no ideal ratio that is considered as benchmark for all industries.
Instead investor should compare a company's FAT ratio than its Competitors, itshows the
company is using its fixed assets to generate Sales better than competitors

Figure 4.8 : Figure showing Fixed Asset Turnover Ratio

34
Table 4.9 : Table showing Gross Profit Ratio

YEAR GROSS NETSALES GROSS PROFIT

RATIO
PROFITA B
A/B
2017 290214.00 305382.00 0.95
2018 373989.00 391677.00 0.95
2019 508006.00 569209.00 0.89
2020 516672.00 596743.00 0.86
2021 445157.00 486326.00 0.91
(source: Secondary data
)

This table shows the gross profit ratio of Concern. The lowest gross Profit is in the year
2020 and highest is in the year 2017 and 2018.

Figure 4.9 : Figure showing Gross Profit Ratio

35
 Table 4.10 : Table showing Net Profit Ratio

YEAR NET PROFIT NET NET PROFIT

RATIO
A SALES
A/B
B
2017 29941.00 305382.00 0.09
2018 36021.00 391677.00 0.09
2019 39734.00 569209.00 0.06
2020 39773.00 596743.00 0.06
2021 53223.00 486326.00 0.10
(source: Secondary data )
Net Profit ratio is a useful tool to measure the overall profitability of the business A high ratio
indicates the efficient management of the affairs of the business. There is no norms to interrupt this
ratio. To see whether the business is constantly proving its profitability or not, the analyst should
compare the Ratio previous year's ratio. Above figures shows that the net profit of the company, in
2019, the decreased and then increased in the next years.

Figure 4. 10 : Figure showing Net Profit Ratio

36
 Table 4.11 : Table showing Solvency Ratio

YEAR TOTAL TOTAL SOLVENCY

LIABILITIES ASSETS RATIO
A B A/B
2017 445713.00 712399.00 0.62
2018 519303.00 816348.00 0.63
2019 607014.00 1002406.00 0.60
2020 704567.00 1165915.00 0.60
2021 521780.00 1321212.00 0.03
(source: Secondary data )
A solvency ratio indicate whether a company’s cash flow is sufficient to meet its long term
liabilities and this is a measure of its financial health. An unfavorable ratio can indicate some
likelihood that a will default on its debt obligations. Here Jio has a steady solvency rate but
as a general rule of thumb, a solvency ratio of greater than 20% is considered financially
healthy.

Figure 4.11 : Figure showing Solvency Ratio

37
Table 4.12 : Table showing Dividend Payout Ratio

YEAR DIVIDENT PER EARNINGS PER DIVIDENT

SHARE SHARE PAYOUT RATIO
A B A/B
2017 .00 101.00 0.00
2018 3255.00 61.00 53.36
2019 3554.00 67.00 53.04
2020 3852.00 63.00 61.42
2021 3921.00 76.00 51.59
(source: Secondary data )
The divident Payout ratio is the ratio of total amount of dividend paid out to shareholders
relative to the net income of the company. It is the percentage of earnings Paid to
shareholders in dividends. A range of 35 % to 55% is considered healthy and appropriate
from a dividend investor's Point of view. From the above table we can assume that the
company has declared more dividents to its shareholders. From this is one can say that the
company is more conservative for expansion.

Figure 4.12 : Figure showing Divident Payout Ratio

38
 CHAPTER V

FINDINGS, SUGGESTIONS AND

CONCLUSION

39
5.1 Findings

• Reliance's JIO current ratio is unsatisfactory; it is less than the ideal ratio. 2:1. In the year
2020-2021, it has only reached a peak of 1.34 which in turns that the company after paying
off current liabilities has less working capital requirement.

• Quick ratio of Reliance's JIO is 1.04,it is the highest in the year 2020 - 2021 . The ideal
quick is 1:1. In all financial years they keep the ratio below the ideal ratio. This means that
the company lacks instant debt paying capacity. They have to take necessary steps to
increase the quick ratio in order to meet high profitability.

• Debt equity ratio is high in the year 2017 and is 1.50 and the lowest is 0.8 in the year
2021. A high debt equity ratio indicates a higher proportion of debt content in the capital
structure. There is a possibility of increasing the rate of return or EPS to equity shareholders so long
as the cost of debt is lower than the rate of return on investment. A low debt equity ratio
indicates lesser claim of creditors and higher margin of safety.

• The operating ratio shows how efficient a company's management is at keeping costs low
while generating revenue or sales. The smaller the ratio, the more efficient the company is
at generating revenue vs. total expenses. Here company shows a constant which implies a
smaller margin of profit and creation of reserve.

• If the fixed asset to net worth ratio is less than 1, it will mean that all fixed assets
purchased out of the proprietors fund and a part of proprietors fund is invested in working
capital. If the ratio is more than 1, it will mean that outsider's fund have been used to acquire
a part of fixed assets.

• In fixed asset turnover ratio the higher ratio better utilisation of fixed assets. A low ratio
indicates underutilization of fixed assets in generating sales.

• Higher the net profit ratio is a sign of profitability. This means higher return to
shareholders. Here the company is showing a decreasing trend in the years 2017-2021.
They have taken measure to increase the net profit, so that it increase in the year 2021.

40
• A high gross profit ratio is a sign of efficient production or purchase. management. On
the other hand a lower G/P ratio is a danger signal. Here the G/P ratio is high and almost
stable every year.

• The solvency ratio indicates the degree of solvency of a business. A higher solvency ratio
indicates that the solvency and the financial position is strong. If the ratio is more than 1,
the lenders can breathe free air as their investment is secured. A lower than I solvency ratio
indicates that the solvency and the financial position are weak. In this every ratio is greater
than 1.

• Dividend payout ratio is the percentage of earnings paid to shareholders in dividends.

Here the company shareholders receive high earnings except for the year 2017.

5.2 Suggestions

• The company's current ratio clearly shows a decreasing trend from 2017-2021 except for
the year 2019 and also 2021 . It means the company after paying off current liabilities has
less amount for working capital requirement. The company should take measures to
increase and maintain a higher current ratio.

• Debt equity ratio is a fund which must be maintained by the company to clear debts off
with equity funds received. Here from the analysis clear that company should takemeasures
without fail to maintain a healthy debt-equity ratio.

• Gross profit ratio of the reliance's JIO seems to be almost stable from the period 2017-
2021. But in the case of net profit ratio there seems to be a decrease from the period 2017-
2021. Therefore the company must take necessary measures like cost minimization, control
unnecessary business expenses to increase the net profit ratio in the upcoming years.

41
5.3 Conclusion:

Proper financial performances is the lifeline of every industry or bank. Financial

performance refers to the act of performing activity abroad, financial performance refers to
the degree to which financial objectives have been accomplished. It is the process of
measuring the result of the firm's policies and operation in monetary terms. The study of
financial performance analysis of Reliance's JIO from the year 2017-2021 reveals that the
liquidity, solvency and profitability of the industry is not satisfactory. The operating ratio
of the firm is very standard which is not favorable as it implies a small margin of profit.
During the financial year 2017-2021, was a challenging year because economic uncertainty
prevails and slows down economic growth across India. These result in inverse impact of
customer demand for products and services. Anyhow the company has to increase
measures to increase profit from next year. The firm wants to take proper measures to
overcome this situation.

42
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Website:

• Jio.com, URL: https://www.jio.com/ www. Shodhgang.com

• www.Investopedia.com

• Reliance's JIO balance sheet, reliance's JIO financial statements and

accounts Moneycontrol.com.

https://www.moneycontrol.com/financials/reliancejio/balance-sheet VI/RI

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Secrets" Business Research. 2021.

https://businessresearch4you.blogspot.com/2020/05/Reliance-Jio-Top-Strategies-Facts-
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http://en.wikipedia.org:

http://en.wikipedia.org/wiki/Reliance Communications

• http://en.wikipedia.org/wiki/Telecommunications in India. (n.d.).

Retrieved from :http://en.wikipedia.org/wiki/Telecommunications in India:

ANNEXURE