GROUP 13

CA-II

GROUP PRESENTATION
ON – RATIO ANALYSIS

SUBMITTED TO : DR. SUMITA SHROFF MA’AM

SUBMITTED BY : ASHI MAHESHWARI (IC201213)

SAMYAK MODI (IC201273)
YASH PATEL (IC201288)
 INFORMATION ON RATIOS

 • Short term debt/Total assets : A company's debt-to-assets ratio can reveal information about its capital
structure and offer a window into the company's leverage.
 • Short term debt/ Net worth: First, you need to calculate your total debt, which is simply the amount of
money that you owe. Then, you need to calculate the total value of all of your assets From this number,
subtract your total debt to get your net worth.
 • Long Term Debt / Net Worth: The debt to net worth ratio is a metric used to compare the level of debt
of a company to its net worth. A ratio below 100% means that a company can settle its liabilities using its
assets
 • Long Term Debt / (Net Worth + Long Term Debt): Long Term Debt is classified as a non-current
liability on the balance sheet, which simply means it is due in more than 12 months’ time.
 • Long Term Borrowings / Short Term Borrowings : Short-term debt is contrasted with long-term debt,
which refers to debt obligations that are due more than 12 months in the future
 • Total Debt / Total Assets: Total-debt-to-total-assets is a measure of the company's assets that are
financed by debt rather than equity. When calculated over a number of years, this leverage ratio shows how
a company has grown and acquired its assets as a function of time
 • Total liabilities / Total Assets: debt/asset ratio shows the proportion of a company's assets which are
financed through debt. If the ratio is less than 0.5, most of the company's assets are financed through
equity. If the ratio is greater than 0.5, most of the company's assets are financed through debt.
 • Total Debt / Net worth: The debt to net worth ratio is used to gauge how much of a company's
assets are financed by debt. The higher the ratio, the higher the percentage financing by debt.
 Total Liabilities / Net worth: It is said that the higher the ratio, the higher the percentage financing by
debt. this ratio to be lower than 1.0, and a good ratio should be lower than 0.4.
 • Operating Profit Margin Ratio: This ratio measures the efficiency with which the firm sells its
goods and services. It is a useful measure of efficiency of operations based on sales
 • Net Profit Margin Ratio: Expressed in percentage terms, this ratio establishes the relationship
between net profit after tax with sales and signifies management’s efficiency in manufacturing,
administering and selling the products.
 • Return on total Asset: This ratio indicates the basic earning power of the firm’s total assets before
interest and tax and financial leverage (interest). It is a useful measure of business performance and
profitability when analysis is done to compare firms and industries.
 • Earnings after Tax to Total Assets: This ratio measures the overall efficiency of the management in
generating profits on the investments in total asset. This measure relates the profit to the size of the firm
(which is measured in terms of total assets). This ratio measures the efficiency of utilization of total
assets in generating revenues.
 • Return on Net Worth: This ratio examines the profitability from the perspective of the equity
investors by relating the profits available to equity shareholders with the book value of the equity
investment. Preference dividends, if any, are deducted from the net profit to determine equity earnings.
Net Worth includes paid up equity share capital including reserves and surplus net of losses and
miscellaneous expenditures, if any. Thus, the total equity is synonymous to ‘net worth’ and
‘shareholders’ funds. This ratio measures the returns that a company earns on its net worth.
OVERALL INTRA FIRM ANALYSIS
 Short term Debt to Total Asset

Short term Debt to total Mar- Mar- Mar- Mar- Mar-

assets 21 20 19 18 17

Hindustan Petroleum 0.47 0.50 0.55 0.55 0.58

Corporation ltd

ONGC 0.12 0.14 0.15 0.17 0.08

Indian oil 0.45 0.49 0.48 0.48 0.49

It is a ratio which compares a company's debt obligations to company's total

assets. The ratio over Five years of all company has been good. But Hindustan
petroleum have been comparatively poor among other companies. It is a risk that
the business will not generate enough cash flow to service its debt. the ratio in
remaining years of all companies are also good as they have been around 0.4
 Short term Debt to Net Worth

Short term debt to net Mar- Mar- Mar- Mar- Mar-

worth 21 20 19 18 17

Hindustan petroleum 1.71 1.97 2.02 1.98 2.25

corporation ltd

ONGC 0.18 0.21 0.23 0.26 0.10

Indian oil 1.36 1.63 1.40 1.20 0.52

It measures the extent to which the company is using creditor funds

versus their own investment to finance the business. In these
companies ONGC is using less creditors fund compared to other.
 Long term Debt to Net Worth

Long term debt to net Mar- Mar- Mar- Mar- Mar-

worth 21 20 19 18 17

Hindustan petroleum 0.91 0.97 0.66 0.65 0.61

corporation ltd

ONGC 0.38 0.32 0.26 0.25 0.23

Indian oil 2.02 2.10 1.70 1.60 0.67

It is the most accepted measure of long-term financial solvency of a company and

expresses relationship between borrowed funds and owner’s capital. This ratio shows
the relative proportion of debt funds verses equity funds that make up the Capital
Structure of a company. In ONGC and Hindustan petroleum the ratios have been very
less as they have less of long term debt and more of owners capital. and in Indian oil
has comparatively more borrowed funds.
 Long term Debt to Long term Debt + Net Worth

Long term debt to net Mar- Mar- Mar- Mar- Mar-

worth +long term debt 21 20 19 18 17

Hindustan petroleum 0.48 0.49 0.40 0.39 0.38

corporation ltd

ONGC 0.27 0.24 0.21 0.20 0.19

Indian oil 0.47 0.49 0.48 0.38 0.39

Here the borrowed funds are related to total capitalization (capital employed) of a
company. This ratio indicates what proportion of capital employed of the company is
made up of Long Term Debt. The Indian oil has more borrowed funds related to total
capitalization (capital employed) of a company.
 Long term Borrowings to Short Term Borrowings

Long term borrowings to Mar-21 Mar-20 Mar-19 Mar-18 Mar-

short term borrowings 17

Hindustan petroleum 0.53 0.49 0.33 0.33 0.27

corporation ltd

ONGC 0.73 0.19 0.00 0.00 0.00

Indian oil 1.30 0.77 0.71 0.50 0.67

This ratio will indicate change in the composition of debt if any over the period of
study and the profile of debt financing used by Indian companies. where Hindustan
petroleum and Indian oil have more short term borrowings compared to long term.
 Total Debt to Total Assets

Total debt To total assets Mar-21 Mar-20 Mar-19 Mar-18 Mar-17

Hindustan petroleum 0.36 0.39 0.31 0.30 0.30

corporation ltd

ONGC 0.35 0.34 0.32 0.33 0.24

Indian oil 0.34 0.41 0.32 0.28 0.23

Total-debt-to-total-assets is a measure of the company's assets that are financed by

debt rather than equity. The good ratio for company is 0.4 or less, which has been
followed by all companies over the years. They all have been efficient.
 Total Liabilities to Total Assets

Total liabilities to total Mar- Mar- Mar- Mar- Mar-

assets 21 20 19 18 17

Hindustan petroleum 0.72 0.75 0.73 0.72 0.74

corporation ltd

ONGC 0.36 0.34 0.33 0.34 0.25

Indian oil 0.66 0.69 0.65 0.60 0.50

It shows the proportion of company’s assets which are financed through debt. As the ratio of the
company ONGC and Indian oil over five years have been near to 0.5 ratio which means the assets
have been completely balanced and financed through debt and equity equally.
 Total Debt to Total Net Worth

Total debt to total net Mar- Mar- Mar- Mar- Mar-

worth 21 20 19 18 17

Hindustan petroleum 1.32 1.53 1.15 1.10 1.14

corporation ltd

ONGC 0.55 0.52 0.48 0.50 0.32

Indian oil 1.03 1.36 0.94 0.64 0.24

The debt to net worth ratio is used to gauge how much of a company's assets
are financed by debt. The higher the ratio, the higher the percentage
financing by debt. In these companies ONGC has been constant over the
years and are within the limit, which means the company has not put much
pressure on its cash flows .
 Total Debt to Total Debt + Net Worth

Total debt to total debt Mar- Mar- Mar- Mar- Mar-

+ net worth 21 20 19 18 17

Hindustan petroleum 0.58 0.62 0.55 0.55 0.56

corporation ltd

ONGC 0.35 0.34 0.32 0.33 0.24

Indian oil 0.62 0.52 0.58 0.56 0.60

This ratio helps in evaluating the financial health of a given company by

comparing the level of debt it has with its total net worth. From the above
graph we can say that the financial health of these companies are positive since
the assets of these companies are more than the liabilities. Hindustan
petroleum and Indian oil are being performing nearly same each year and
ONGC is below both the companies.
 Total Liabilities to Net Worth

Total liabilites to net Mar- Mar- Mar- Mar- Mar-

worth 21 20 19 18 17

Hindustan petroleum 2.63 2.94 2.68 2.62 2.86

corporation ltd

ONGC 0.56 0.53 0.49 0.50 0.33

Indian oil 2.02 2.31 1.90 1.54 0.53

It is said that the higher the ratio, the higher the percentage
financing by debt. this ratio to be lower than 1.0, and a good ratio
should be lower than 0.4. Hindustan petroleum performance is
decreasing and Indian oil performance is increasing over year.
ONGC is constant.
 Operating Profit Margin

Operatring profit margin Mar-21 Mar-20 Mar-19 Mar-18 Mar-17

Hindustan petroleum 6.14 0.59 3.41 4.21 4.83

corporation ltd

ONGC 19.97 24.70 34.11 31.12 29.34

Indian oil 3.24 0.69 2.81 3.66 2.45

This ratio measures the efficiency with which the firm sells its goods and
services. It is a useful measure of efficiency of operations based on sales.
ONGC perform better compare to Indian oil and Hindustan petroleum
 Net Profit Margin

Net profit margin Mar-21 Mar-20 Mar-19 Mar-18 Mar-17

Hindustan petroleum 4.60 0.99 2.20 2.91 3.33

corporation ltd

ONGC 16.51 13.98 24.37 23.47 23.03

Indian oil 2.60 0.67 2.24 2.88 2.03

Expressed in percentage terms, this ratio establishes the relationship

between net profit after tax with sales and signifies management’s
efficiency in manufacturing, administering and selling the products.
ONGC perform better compare to Indian oil and Hindustan petroleum.
 Earning before interest and Tax to Total Assets

Earning before interest Mar- Mar- Mar- Mar- Mar-

and tax to total assets 21 20 19 18 17

Hindustan petroleum 10.86 1.38 9.00 10.60 11.50

corporation ltd

ONGC 0.05 0.09 0.13 0.10 0.10

Indian oil 8.89 0.97 7.00 8.60 8.88

Investors can use this ratio to ascertain how effective a company is at using
assets to generate profits (ie. earnings before interest and taxes). This
measures the productivity of the firm’s assets, independent of any tax or
leverage factors. There was a decrease in all three companies In year 2020.
 Conclusion

After studying, analysis and interpretating the kinds of ratios we calculated and summed up, we got to
know a whole new method of gaining insight into a company's liquidity, operational efficiency, and
profitability by studying its financial statements such as the balance sheet and income statement.

We also studied the internal and external affairs of the respected companies "HINDUSTAN
PETROLEUM CORPORATION", "ONGC","INDIAN OIL". We also prepared its intra analysis as well
as inter analysis for comparing the stability of each company.

There are many difficulties faced by us, such as, selecting the company for appropriate data as
PETROLEUM INDUSTRY; communication gap due to online mode; finding and analysis the ratios
from the formulas; also variations caused from intra and inter analysis.