2. • I ndianOil is also t he highest
r anked I ndian company in t he
pr est igious For t une ' Global
500' list ing, having moved up
19 places t o t he 116t h
posit ion in 2008. I t is also
t he 18t h lar gest pet r oleum
company in t he wor ld .
9. ANALYSIS
• The cur r ent r at io f or t he last 6
year s is appox. 1.3:1 which is quit e
unsat isf act or y accor ding t o t he
st andar d nor ms, but in t his indust r y
sect or it is f air enough.
• The quick r at io is 0.6:1 which is
again unsat isf act or y. I t implies t hat
t he company may f ind it dif f icult t o
pay it s cur r ent liabilit ies.
10. LEVERAGE
RATIOS
Debt Preference Debt Equity Interest
Equity Ratio Dividend Asset Ratio Asset Ratio Coverage Ratio
Coverage Ratio
13. ANALYSIS
• Fr om t he debt -equit y, debt -asset and
equit y-asset r at ios, we int er pr et t hat
most of t he money involved is of owner ’s
and it is saf e f or cr edit or s t o invest
money in t his company.
• Thus we can say t hat company can
per f or m sat isf act or ily in long t er m.
14. TURNOVER
RATIO
TOTAL
INVENTORY DEBTORS AVERAGE
ASSET
TURNOVER TURNOVER COLLECTION
TURNOVER
RATIO RATIO PERIOD
RATIO
18. ANALYSIS
• The avg. I nvent or y t ur nover r at io f or
t he last 6 yr s is appr ox 6 t imes per
year ,which is sat isf act or y. I t implies
t hat t he invent or ies have been sold
f ast .
• The avg. Debt or s t ur nover r at io is 15
t imes per year (indust r ial avg. is 7)
which is quit e high and indicat es t hat
t her e is a shor t t ime-lag bet ween sales
and cash collect ion
• The TATR is ar ound 1.8 (avg. of 6 yr s)
19. PROFITABILITY
RATIOS
Return
Gross Operating Earning
Net Profit on Total
Profit Margin Profit Ratio Power
Ratio Assets
Ratio Ratio
23. ANALYSIS
• The Net Pr of it Mar gin (avg. of
6 yr s) is 3.25% which is a lit t le
low. But since t he invent or y
t ur nover r at io is high it can
ear n a high r at e of r et ur n on
invest ment s.
• Ther e is a huge dr op in ROTA
f r om 2004 t o 2009. I n 2004
t he analysis shows t hat t he f ir m
25. Pioneer ed by Du Pont Company of USA.
I t analyses impor t ant int er -r elat ionships
based on inf or mat ion f ound in f inancial
st at ement s.
I t is def ined as-
Net P itrof = Net P it rof ×
Net Sales
Total assets Net sales
Total assets
R OTA NP M
TATR
Such a decomposit ion helps in under st anding
how t he r et ur n on t ot al asset s is inf luenced
27. OVERALL ANALYSIS
Thus, we see t hat t he shor t -t er m
f inancial st at e of t he company is
slight ly weak but it is sat isf act or y
in t he long-t er m. The asset s ar e
employed ef f icient ly by t he f ir m.
The use of capit al employed is also
done ef f icient ly.
But t her e is a huge dr op in
ROTA, in t he year 2010. I n f act
t he net pr of it has also dr opped a
gr eat ext ent in t his year . One of
