MINOR PROJECT REPORT-1 (BBA114)

On

FINANCIAL STATEMENT ANALYSIS OF RELIANCE INDUSTRIES

LIMITED {REFINERIES}

Submitted in partial fulfillment of the requirement of Bachelors of Business

Administration(BBA)

Guru Gobind Singh Indraprastha University, Delhi

Session 2021-22

Under the guidance of: Submitted By:

Ms. Megha Laroia Harsh

(Associate Professor) BBA - II SEM

Enrollment No.:

00828001721

JIMS ENGINEERING MANAGEMENT TECHNICAL CAMPUS

48/4, Knowledge Park III, Greater Noida-201306 (U.P.)

 DECLARATION

I hereby declare that this Minor Project Report Financial Statement Analysis Of Reliance
Industries Limited submitted by me to JEMTEC, Greater Noida is a bonafide work
undertaken by me and has not been submitted to any other University or Institution for the
award of any degree diploma/certificate or published any time before.

(Signature of the Student)

Name: Harsh

Enrolment. No.: 00828001721

1
CERTIFICATE

2
 ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to JEMTEC, Greater Noida for imparting us
very valuable professional training in BBA.

I pay my gratitude and sincere regards to Ms Megha Laroia , my project Guide, for giving me
the cream of his knowledge. I am thankful to her as she has been a constant source of advice,
motivation and inspiration. I am also thankful to her for giving his suggestions and
encouragement throughout the project work.

I take the opportunity to express my gratitude and thanks to our computer Lab staff and
library staff for providing me the opportunity to utilize their resources for the completion of
the project.

I am also thankful to my family and friends for constantly motivating me to complete the
project and providing me an environment, which enhanced my knowledge.

Date:27 May 2023

Name: Harsh

Enrolment. No.:00828001721

Course: BBA (II-Sem)

(Signature of the Student)

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 EXECUTIVE SUMMARY

Reliance Industries Limited (RIL) is world’s leading and India’s fastest revenue generating
company. RIL group is a highly diversified group and is in to multiproduct business like oil
and gas exploration, retail of petroleum and consumer products and manufacturing of petro
chemical and refining and textile products. They are also operating in the infrastructure and
transportation sectors. The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is
India's largest private sector enterprise, with businesses in the energy and materials value
chain. Group's annual revenues are in excess of US$ 44 billion. Reliance Industries Limited is
a Fortune Global 500company and is the largest private sector company in India. Backward
vertical integration hasbeen the cornerstone of the evolution and growth of Reliance. Starting
with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration
- in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas
exploration and production - to be fully integrated along the materials and energy value chain.
The Group's activities span exploration and production of oil and gas, petroleum refining and
marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles,
retail and special economic zones. Reliance enjoys global leadership in its businesses, being
the largest polyester yarn and fibre producer in the world and among the top five to ten
producers in the world in major petrochemical products. This paper will focus on the
marketing and promotion activities practiced in Reliance industries in general and it will also
examine the effectiveness of polyester’s selling and distribution of Reliance Industries ltd

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 Content Table

S.No. Topic Page No.

1 Declaration i

2 Certificate ii

3 Acknowledgement iii

4 Executive Summary iv

5 Chapter-1: 1-4
Introduction…

6 Chapter-2: Company 05-11

profile…

7 Chapter-3-: literature 12-13

review…

8 Chapter-4: Research 14-19

Methodology

9 Chapter-5: Data 20-30

analysis

10 Chapter-6: Findings 31-32

11 Recommendations 33-34

12 Chapter - 35-36
7:Conclusion

13 References / 37-38
bibliography
14 Annexure 39-44
 CHAPTER 1

INTRODUCTION

1
What Is Financial Statement Analysis?
Financial statement analysis is the process of analysing a company's financial statements for
decision-making purposes. External stakeholders use it to understand the overall health of an
organization as well as to evaluate financial performance and business value. Internal
constituents use it as a monitoring tool for managing the finances.
How to Analyse Financial Statements
The financial statements of a company record important financial data on every aspect of a
business’s activities. As such, they can be evaluated on the basis of past, current, and
projected performance.

In general, financial statements are centred around generally accepted accounting

principles (GAAP) in the U.S. These principles require a company to create and maintain
three main financial statements: the balance sheet, the income statement, and the cash flow
statement. Public companies have stricter standards for financial statement reporting. Public
companies must follow GAAP, which requires accrual accounting. Private companies have
greater flexibility in their financial statement preparation and also have the option to use
either accrual or cash accounting.

Several techniques are commonly used as part of financial statement analysis. Three of the
most important techniques include horizontal analysis, vertical analysis, and ratio analysis.
Horizontal analysis compares data horizontally, by analysing values of line items across two
or more years. Vertical analysis looks at the vertical effects line items have on other parts of
the business and also the business’s proportions. Ratio analysis uses important ratio metrics to
calculate statistical relationships.

Types of Financial Statements

Companies use the balance sheet, income statement, and cash flow statement to manage the
operations of their business and also to provide transparency to their stakeholders. All three
statements are interconnected and create different views of a company’s activities and
performance.

Balance Sheet
The balance sheet is a report of a company's financial worth in terms of book value. It is
broken into three parts to include a company’s assets, liabilities, and shareholders' equity.
Short-term assets such as cash and accounts receivable can tell a lot about a company’s

2
operational efficiency; liabilities include the company's expense arrangements and the debt
capital it is paying off; and shareholder’s equity includes details on equity capital investments
and retained earnings from periodic net income. The balance sheet must balance assets and
liabilities to equal shareholder’s equity. This figure is considered a company’s book value and
serves as an important performance metric that increases or decreases with the financial
activities of a company.

Income Statement
The income statement breaks down the revenue a company earns against the expenses
involved in its business to provide a bottom line, meaning the net profit or loss. The income
statement is broken into three parts that help to analyse business efficiency at three different
points. It begins with revenue and the direct costs associated with revenue to identify gross
profit. It then moves to operating profit, which subtracts indirect expenses such as marketing
costs, general costs, and depreciation. Finally, after deducting interest and taxes, the net
income is reached.

Cash Flow Statement

The cash flow statement provides an overview of the company's cash flows from operating
activities, investing activities, and financing activities. Net income is carried over to the cash
flow statement where it is included as the top line item for operating activities. Like its title,
investing activities include cash flows involved with firmwide investments. The financing
activities section includes cash flow from both debt and equity financing. The bottom line
shows how much cash a company has available.

Financial Performance
Financial statements are maintained by companies daily and used internally for business
management. In general, both internal and external stakeholders use the same corporate
finance methodologies for maintaining business activities and evaluating overall financial
performance.

When doing comprehensive financial statement analysis, analysts typically use multiple years
of data to facilitate horizontal analysis. Each financial statement is also analysed with vertical
analysis to understand how different categories of the statement are influencing results.
Finally, ratio analysis can be used to isolate some performance metrics in each statement and
also bring together data points across statements collectively.

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What Are the Advantages of Financial Statement Analysis?
Financial statement analysis evaluates a company’s performance or value through a
company’s balance sheet, income statement, or statement of cash flows. By using a number of
techniques such as horizontal, vertical, or ratio analysis, investors may develop a more
nuanced picture of a company’s financial profile.

What Are the Different Types of Financial Statement Analysis?

Most often, analysts will use three main techniques for analysing a company's financial
statements. First, horizontal analysis involves comparing historical data. Usually, the purpose
of horizontal analysis is to detect growth trends across different time periods. Second, vertical
analysis compares items on a financial statement in relation to each other. For instance, an
expense item could be expressed as a percentage of company sales. Finally, ratio analysis, a
central part of fundamental equity analysis, compares line-item data. P/E ratios, earnings per
share, or dividend yield are examples of ratio analysis.

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 CHAPTER 2
COMPANY PROFILE

5
OVERVIEW OF INDUSTRY AS A WHOLE

The Reliance group, founded by Dhirubhai H Ambani (1932-2002), is India’s largest private
sector enterprise, with businesses in the energy and material value chain. The flagship
company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest
private sector company in India. The chairman of the company is Mukesh Ambani.
The company is India’s largest petrochemical firm and among the country’s largest companies
(along with the likes of Indian Oil and Tata Group). Oil refining and the manufacture of
polylines account for nearly all of Reliance’s sales. It also makes textiles and explores for oil
and gas, though those businesses are relatively small. In 2009 the company merged with its oil
and gas refining subsidiary (Reliance Petroleum) in order to boost the operational and
financial synergies of Reliance as a major refining company.

Reliance Industries Limited (NSE: RELIANCE) is India's largest private sector conglomerate
(by market value) , with an annual turnover of US $ 35.9 billion and profit of US$ 4.85 billion
for the fiscal year ending in March 2008 making it one of India's private sector Fortune Global
500 companies, being ranked at 206th position (2008). It was founded by the Indian
industrialist DhirubhaiAmbani in 1966. Ambani has been a pioneer in introducing financial
instruments like fully convertible debentures to the Indian stock markets. Ambani was one of
the first entrepreneurs to draw retail investors to the stock markets. Critics allege that the rise
of Reliance Industries to the
top slot in terms of market capitalization is largely due to Dhirubhai's ability to manipulate the
levers of a controlled economy to his advantage. Though the company's oil-related operations
form the core of its business, it has diversified its operations in recent years. After severe
differences between the founder's two sons, Mukesh Ambani and Anil Ambani, the group was
divided between them in 2006. In September 2008, Reliance Industries was the only Indian
firm featured in the Forbes's list of "world's 100 most respected companies

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 Stock

According to the company website "1 out of every 4 investors in India is a Reliance
shareholder.”. Reliance has more than 3 million shareholders, making it one of the world's
most widely held stocks. Reliance Industries Ltd, subsequent to its split in January 2006 has
continued to grow. Reliance companies have been among the best performing in the Indian
stock market.

Products

Reliance Industries Limited has a wide range of products from petroleum products,
petrochemicals, to garments (under the brand name of Vimal), Reliance Retail has entered
into the fresh foods market as Reliance Fresh and launched a new chain called Delight
Reliance Retail and NOVA Chemicals have signed a letter of intent to make energy-efficient
structures. The primary business of the company is petroleum refining and petrochemicals. It
operates a 33 million tone refinery at Jamnagar in the Indian state of Gujarat. Reliance has
also completed a second refinery of 29 million tons at the same site which started operations
in December 2008. The company is also involved in oil & gas exploration and production. In
2002, it struck a major find on India's eastern coast in the Krishna Godavari basin. Gas
production from this find was started on April 2, 2009. As of the end of 3rd quarter of 2009-
2010, gas production from the KG D6 ramped up to 60 MMSCMD.

Subsidiaries

Major Subsidiaries & Associates

● Reliance Petroleum Limited (RPL) was a subsidiary of Reliance Industries Limited (RIL)
and was created to exploit the emerging opportunities, creating value in the refining sector
worldwide. Currently, RPL stands amalgamated with RIL.

● Reliance Life Sciences is a research-driven, biotechnology-led, life sciences organization that

participates in medical, plant and industrial biotechnology opportunities. Specifically, these
relate to Biopharmaceuticals, Pharmaceuticals, Clinical Research Services, Regenerative
Medicine, Molecular Medicine, Novel Therapeutics, Bio-fuels, Plant Biotechnology and
Industrial Biotechnology.

● Reliance Industrial Infrastructure Limited (RIIL) is engaged in the business of setting up /

operating Industrial Infrastructure that also involves leasing and providing services connected
with computer software and data processing.
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● Reliance Institute of Life Sciences (Rils) established by DhirubhaiAmbani Foundation, is an
institution of higher education in various fields of life sciences and related technologies.

● Reliance Logistics (P) Limited is a single window solutions provider for transportation,
distribution, warehousing, logistics, and supply chain needs, supported by in house state of art
telemetric and telemetry solutions.

● Reliance Clinical Research Services (RCRS), a contract research organization (CRO) and
wholly owned subsidiary of Reliance Life Sciences have been set up to provide clinical
research services to pharmaceutical, biotechnology, and medical device companies.

● Reliance Solar, The solar energy initiative of Reliance aims to bring solar energy systems and
solutions primarily to remote and rural areas and bring about a transformation in the quality of
life.

● Relicord is the first and one of the most dependable stem-cell banking services of South East
Asia offered by Mukesh Ambani-controlled Reliance Industries.

Reliance's Oil & Gas find

Andhra Pradesh near Vishakhapatnam. It was the largest discovery of natural gas in world in
financial year 2002-2003. On 2 April 2009, Reliance Industries (RIL) commenced natural gas
production from its D-6 block in the Krishna-Godavari (KG)

The gas reserve is 7 trillion cubic feet in size. Equivalent to 1.2 billion barrels (165 mil in
2002, Reliance found natural gas in the Krishna Godavari basin off the coast of lion tonnes) of
crude oil, but only 5 trillion cubic feet are extractable.

On 2008 Oct 8, Anil Ambani's Reliance Natural Resources took Reliance Industries to the
Bombay High Court to uphold a memorandum of understanding that said RIL will supply the
natural gas at $2.34 per million British thermal units to Anil Ambani.

Reliance Retail

Reliance Retail is the retail business wing of the Reliance business. Many brands like
Reliance Fresh, Reliance Footprint, Reliance Time Out, Reliance Digital, Reliance Wellness,
Reliance Trends, Reliance AutoZone, Reliance Super, Reliance Mart, Reliance iStore,
Reliance Home Kitchens, and Reliance Jewel come under the Reliance Retail brand. Reliance
saw opportunity in retailing chicken, mutton and other meat products (halal and non-halal)
through one of its retail arms called "Delight Non Veg." One of the Delight outlets has been

8
 shut down due to protest by anti-animal cruelty activists at Gandhi Nagar, Delhi who want
Reliance to close its non-veg food marketing.

Environmental record
Reliance Industry is the world’s largest polyester producer and as a result one of the largest
producers of polyester waste in the world. In order to deal with this large amount of waste
they had to create a way to recycle the waste. They operate the largest polyester recycling
center that uses the polyester waste as a filling and stuffing. They use this process to develop a
strong recycling process which won them a reward in the Team Excellence competition.

Reliance Industries backed a conference on environmental awareness in New Delhi in 2006.

The conference was run by the Asia Pacific Jurist Association in partnership with the Ministry
of Environment & Forests, Govt. of India and the Maharashtra Pollution Control Board. The
conference was to help bring about new ideas and articles on various aspects of environmental
protection in the region. Maharashtra Pollution Control Board invited various industries
complied with the pollution control norms to take active part in the conference and to support
as a sponsor. The conference proved effective as a way to promote environmental concern in
the area.

Awards & Recognition

● International Refiner of the Year in 2005 at the 23rd Annual Hart's World Refining and Fuels
Conference.

Awards for managers

● Mukesh D. Ambani received the United States of America-India Business Council (USIBC)
leadership award for "Global Vision" 2007 in Washington in July 2007.

● Mukesh D. Ambani was conferred the Asia Society Leadership Award by the Asia Society,
Washington, USA, May 2004.

● Mukesh D. Ambani ranked 13th in Asia's Power 25 list of The Most Powerful People in
Business published by Fortune magazine, August 2004.

● Mukesh D. Ambani is Economic Times Business Leader of the Year.

Current composition of the Board and

Category of Directors are as Follows:
9
"Between my past, the present and the future, there is one common Factor: Relationship and
Trust. This is the foundation of our growth."

Shri Dhirubhai H. Ambani

Chairman Reliance Group
December 28, 1932 - July 6, 2002
Board of Directors of Reliance Industries Limited

Shri Mukesh D Ambani

Chairman & Managing
Director

Shri Nikhil R. Meswani Shri Hital R. Meswani Shri .S.Kohli

Executive Director Executive Director Executive Director

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 Shri PMS Prasad Shri R. Ravimohan
Executive Director Executive Director

Shri M. P. Modi Prof. Ashok Misra Prof. Dipak C Jain

MISSION & VISION

“Continuously innovate to remain Partners in human progress by Harnessing science &

technology in the petrochemicals domain”

OUR MISSION

“Be a globally preferred Business associate with responsible Concern for ecology, society,
and stakeholder’s value”.

VALUES & QUALITY POLICY YOUR VALUES

“Integrity, Respect for People, Unity of Purpose, Outside-in Focus, Agility and Innovation”.

QUALITY POLICY

“Bare committed to meet customers’ requirements through continual improvement of our

11
quality management systems. We shall sustain organizational excellence through visionary
leadership and innovative efforts”.

CHAPTER 3

Literature Review: Published studies &

review of similar studies

12
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,
commercialization and ownership form on the reported financial performance of three
entities.
Wei, Sun. (2010) found that this paper discusses some theories of the system of performance
evaluation, analyses merit and disadvantage of these theories. this paper brings forward the
system of performance evaluation with method of fuzzy mathematics. This paper validates the
correctness of the system of performance evaluation with the example.
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.
Rungi, M., Stulova, V. (2013) states that the current study investigates the impact of
absorptive capacity on financial performance in the context of corporate acquisitions. A
quantitative research was carried out based on European ICT companies that were subject to
acquisition in 2008. The results demonstrate that absorptive capacity entails a direct effect on
financial performance.
Bhargava (2017) concludes that due to the increased contribution of the telecoms industry to
different economies the financial health of the industry is important to the whole economy.
Therefore, there is need for measurement of this constantly to monitor the economic
performance of the whole industry.
Kofi-Akrofi (2013) carried out a similar study but he, however, used multiple regression to
look at the profitability of Telecommunications in Ghana for a period of four years. In his
research, the main objective was to establish the relationship between the two main
statements, hence, he treated them as independent from each other.

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 CHAPTER 4
RESEARCH METHODOLOGY

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4.1-OVERVIEW

Research methodology is the systematic and theoretical analysis of the methods applied to a
field of study. It involves qualitative and quantitative techniques. It is a process used to collect
information and data for the purpose of making business decisions.

4.2-RESEARCH DESIGN

Research design is defined as a framework of methods and techniques chosen by a researcher

to combine various components of research in a reasonably logical manner so that the
research problem is efficiently handled. It provides insights about “how” to conduct research
using a particular methodology.

For the survey, I used Descriptive Research Design, since I am solely done with the
interpretation through gathering and presenting the collected data,as In a descriptive research
design,a re searcher is solely interested in describing the situation or case under his/her
research study. It is a theory- based research design which is created by gathering, analyzing
and presenting collected data. By implementing an in-depth research design such as this, a
researcher can provide insights into the why and how of Research.

The primary data as well as secondary sources were used for collection of data.

● Primary data - Questionnaire and Interview

● Secondary data – Books, Journals and Internet

Primary Data involves the collection of data that does not already exist. This can be through
numerous forms, including questionnaires and telephone interviews amongst others.
Secondary Data involves the summary, collection and/or synthesis of existing research rather

than primary research, where data are collected from, for example, research subjects or

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Experiments.

4.3 -COLLECTION OF DATA

Secondary data is used and collected in financial statement analysis.
What is Secondary Data? 
Secondary data is the data that has already been collected through primary sources and made
readily available for researchers to use for their own research. It is a type of data that has
already been collected in the past.
A researcher may have collected the data for a particular project, then made it available to be
used by another researcher. The data may also have been collected for general use with no
specific research purpose like in the case of the national census.
Data classified as secondary for particular research may be said to be primary for another
research. This is the case when data is being reused, making it primary data for the first
research and secondary data for the second research it is being used for.
Sources of Secondary Data
Sources of secondary data include books, personal sources, journals, newspapers, websites,
government records etc. Secondary data are known to be readily available compared to that of
primary data. It requires very little research and needs for manpower to use these
sources.With the advent of electronic media and the internet, secondary data sources have
become more easily accessible. Some of these sources are highlighted below.
Secondary research includes research material published in research reports and similar
documents. These documents can be made available by public libraries, websites, data
obtained from already filled in surveys etc. Some government and non-government agencies
also store data, that can be used for research purposes and can be retrieved from them.
Secondary research is much more cost-effective than primary research, as it makes use of
already existing data, unlike primary research where data is collected first hand by
organizations or businesses or they can employ a third party to collect data on their behalf.
Published Sources
There are a variety of published sources available for different research topics. The
authenticity of the data generated from these sources depends majorly on the writer and

16
publishing company. 
Published sources may be printed or electronic as the case may be. They may be paid or free
depending on the writer and publishing company's decision.
Also, journals are usually more specific when it comes to research. For example, we can have
a journal on, "Secondary data collection for quantitative data" while a book will simply be
titled, "Secondary data collection".

Websites
The information shared on websites is mostly not regulated and as such may not be trusted
compared to other sources. However, there are some regulated websites that only share
authentic data and can be trusted by researchers.
Most of these websites are usually government websites or private organizations that are paid,
data collectors.
Websites from which I have collected the data are as follows:

1. www.moneycontrol.com( Balance Sheet , Profit And Loss Statements of years

2018-2022)

2. www.ril.com (Cash Flow Statements of years 2018-2022)

Blogs
Blogs are one of the most common online sources for data and may even be less authentic
than websites. These days, practically everyone owns a blog, and a lot of people use these
blogs to drive traffic to their website or make money through paid ads.
Therefore, they cannot always be trusted. For example, a blogger may write good things about
a product because he or she was paid to do so by the manufacturer even though these things
are not true.

By way of caution, the researcher, before using secondary data, must see that they possess
following characteristics:

Reliability of data: The reliability can be tested by finding out such things about the said
data:
(a) Who collected the data?
(b) What were the sources of data?

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(c) Were they collected by using proper methods
(d) At what time were they collected?
(e) Was there any bias of the compiler?
(f) What level of accuracy was desired? Was it achieved?
Suitability of data: The data that are suitable for one enquiry may not necessarily be found
suitable in another enquiry. Hence, if the available data are found to be unsuitable, they
should not be used by the researcher. In this context, the researcher must very carefully
scrutinise the definition of various terms and units of collection used at the time of collecting
the data from the primary source originally. Similarly, the object, scope and nature of the
original enquiry must also be studied. If the researcher finds differences in these, the data will
remain unsuitable for the present enquiry and should not be used.
Adequacy of data: If the level of accuracy achieved in data is found inadequate for the
purpose of the present enquiry, they will be considered as inadequate and should not be used
by the researcher. The data will also be considered inadequate, if they are related to an area
which may be either narrower or wider than the area of the present enquiry.
From all this we can say that it is very risky to use the already available data. The already
available data should be used by the researcher only when he finds them reliable, suitable and
adequate. But he should not blindly discard the use of such data if they are readily available
from authentic sources and are also suitable and adequate for in that case it will not be
economical to spend time and energy in field surveys for collecting information. At times,
there may be wealth of usable information in the already available data which must be used
by an intelligent researcher but with due precaution.

4.4 Sampling design/methods

● Comparative Statements: These are the statements depicting the financial position

and profitability of an enterprise for the distinct timeframe in a comparative form to
give a notion about the position of 2 or more periods. It usually applies to the 2
important financial statements, namely, statement of profit and loss and balance sheet
outlined in a comparative form. Comparative figures signify the direction and trend of
financial position and operating outcomes. This type of analysis is also referred to as
‘horizontal analyses.An organization’s financial statements for different periods are
called Comparative Financial Statements. And, to know about the comparative
statement users need to use the tools or techniques of financial statement analysis.

18
 Various items of financial statements are presented in a comparative form which may
be a table. It enables one to have a comparative view of multiple parameters for two or
more periods at a glance. Comparative statement is important in the sense of financial
tools and techniques.

● Common Size Statements: Common size statements are the statements which signify
the association of distinct items of a financial statement with a generally known item
by depicting each item as a % of that common item. Such statements allow an analyst
to compare the financing and operating attributes of 2 enterprises of distinct sizes in a
similar industry. This analysis is also referred to as ‘Vertical analyses.A common-size
statement plays an essential role in the tools and techniques of financial statement
Analysis. Its direct impact on the company’s financial statements displays all items as
a percentage of a common base figure. It is known as the Common-Size Statements. It
facilitates comparative analysis between two or more companies or between two or
more periods of a company.

● Cash Flow Analysis: It refers to the analysis of the actual movement of cash into and
out of an establishment. The flow of cash into the trading concern is called cash inflow
or positive cash flow and the flow of cash out of the enterprise is known as negative
cash flow or cash outflow. The difference between the outflow and inflow of cash is
the net cash flow. Hence, it compiles the reasons for the changes in the cash position
of a trading concern between dates of 2 balance sheets

4.4-RESEARCH OBJECTIVES

The main objective of the financial statement analysis for any company is to provide the
necessary information required by the financial statement users for informative decision
making, assessing the current and past performance of the company, predicting the success or
failure of the business, etc.
The main objective of this study is to:

● To study the financial position of Reliance Ltd {refineries sector} over a period of

5 year that is 2018-2022.

● To analyse opreational results of the company over a period of 5 years of that is 2018-

2022.
19
● To assess the changes in major components of financial Statements of the company

over a period of 5 year that is 2018-2022.

20
 CHAPTER 5
Analysis / Study of topic

21
BALANCE SHEET

22
23
GRAPH 1{NON CURRENT AND CURRENT LIABILITY}
350,000

300,000

250,000

200,000 Non Current Liabilities

Current Liabilities
150,000

100,000

50,000
2019 2020 2021 2022

Interpretation = There Has been an increase in non-current liabilities from 2019

to 2020 and decreased from 2020 to 2021 . There has been a heavy increase in
current liabilities from 2019 to 2020 and also get heavy decrease from 2020 to
2021.

GRAPH 2{NON CURRENT AND CURRENT ASSETS}

900,000
800,000
700,000
600,000
500,000
Non Current Assets
400,000 Current Assets
300,000
200,000
100,000
0
2019 2020 2021 2022

Interpretation=There Has been an increase in non currentAssets from 2019 to

2020 and decreased from 2020 to 2021 . There has been a slight increase in
current Assetsfrom 2019 to 2020 and also has been slight increasefrom 2020 to
2021.

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GRAPH 3{TOTAL SHARE CAPITAL}

TOTAL SHARE CAPITAL

6800

6700

6600

6500 TOTAL SHARE CAPITAL

6400

6300

6200

6100
2019 2020 2021 2022

Interpretation= Total Share Capital is same in 2019 and 2020 and increased 2021
and also heavily raised up in 2022
GRAPH 4 {TOTAL RESERVE AND SURPLUS}

TOTAL RESERVE AND SURPLUS

500000
450000
400000
350000
300000
TOTAL RESERVE AND SURPLUS
250000
200000
150000
100000
50000
0
2019 2020 2021 2022

Interpretation = There has been a decrease in total reserve and surplus between 2019-20,
there was a slight increase in 2020-21 and 2021-22 there was a slight decrease.

25
PROFIT AND LOSS ACCOUNT

26
27
GRAPH 1{TOTAL REVENUE AND TOTAL EXPENSES}
500,000

450,000

400,000

350,000

300,000

250,000 Total Revenue

Total Expenses
200,000

150,000

100,000

50,000

0
2019 2020 2021 2022

Interpretation - There Has been an decrease in total revenue from 2019 to 2021
and heavily increased from 2021 to 2022 . There has been a decrease in total
expensesfrom 2019 to 2021 and also has been heavily increase from 2021 to
2022.
GRAPH 2{PROFIT FOR THE PERIOD}

Profit for the Period

45,000

40,000 39,084
35,000 35,163
30,903 31,944
30,000

25,000 Profit for the Period

20,000

15,000

10,000

5,000

0
2019 2020 2021 2022

Interpretation- Here the profit is getting decrease from 2019 to 2020 and start get
start increasing from 2020 to 2022.
28
GRAPH 3{EMPLOYEES BENEFIT EXPENES}

EMPLOYEES BENEFIT EXPENES

7000

6000

5000

4000 EMPLOYEES BENEFIT EXPENES

3000

2000

1000

0
2019 2020 2021 2022

Interpretation = There has slight increase from 2019-2020 and heavy decrease
from 2020-2021and again incraesed from 2021-2022

GRAPH 4 {REVENUE FROM OPREATIONS (NET)}

REVENUE FROM OPREATIONS

500000
450000
400000
350000
300000
REVENUE FROM OPREATIONS
250000
200000
150000
100000
50000
0
2019 2020 2021 2022

Interpretation = There was major decrease from 2019 to 2021 by 1,25,949 (in crores) and
heavily increased from 2021-2022 by 1,99,708 (in crores).

29
 CASH FLOW STATEMENT

GRAPH 1- {CASH AND CASH EQUIVALENT AT THE END OF YEAR}

Cash And Cash Equivalent At End Of Year

9000
8485
8000

7000

6000
5573 Cash And Cash Equivalent At
5000 End Of Year

4000 3768
3000

2000

1000

0
2019 2020 2021

30
Interpretation - Here the profit is getting decrease from 2019 to 2020 and start
get start increasing from 2020 to 2022.

GRAPH 2 {NET CASH FLOW OF LAST 3 YEARS FROM OPERATING

ACTIVITY }

NET CASH FLOW OF LAST 3 YEARS FROM

OPERATING ACTIVITY
90000
80000
70000
60000 NET CASH FLOW OF LAST 3
YEARS FROM OPERATING ACTIV-
50000 ITY
40000
30000
20000
10000
0
2019 2020 2021
-10000

Interpretation=cash flow of reliance has increased from 2019-2020 and

decreased disastrously as we can see in 2021 cash flow goes in negetive.

31
CHAPTER-6

Finding

32
FINDINGS

● There Has been an increase in non-current liabilities from 2019 to 2020

and decreased from 2020 to 2021 . There has been a heavy increase in
current liabilities from 2019 to 2020 and also get heavy decrease from
2020 to 2021.

● There Has been an increase in non currentAssets from 2019 to 2020 and

decreased from 2020 to 2021 . There has been a slight increase in current
Assetsfrom 2019 to 2020 and also has been slight increasefrom 2020 to
2021.

● Total Share Capital is same in 2019 and 2020 and increased 2021 and also

heavily raised up in 2022

● There has been a decrease in total reserve and surplus between 2019-20,

there was a slight increase in 2020-21 and 2021-22 there was a slight
decrease.

● There Has been an decrease in total revenue from 2019 to 2021 and

heavily increased from 2021 to 2022 . There has been a decrease in total
expensesfrom 2019 to 2021 and also has been heavily increase from 2021
to 2022.

● Here the profit is getting decrease from 2019 to 2020 and start get start

increasing from 2020 to 2022.

● There has slight increase from 2019-2020 and heavy decrease from 2020-

2021and again incraesed from 2021-2022

● There was major decrease from 2019 to 2021 by 1,25,949 (in crores) and

heavily increased from 2021-2022 by 1,99,708 (in crores).

33
● Here the profit is getting decrease from 2019 to 2020 and start get start

increasing from 2020 to 2022.

● cash flow of reliance has increased from 2019-2020 and decreased

disastrously as we can see in 2021 cash flow goes in negetive.

RECOMMENDATIONS

34
35
 RECOMMENDATIONS

• The company has to go for more debt component, because the company is using low debt
component and moreover it can develop further business activities with the help of more
funds.

• The company has to control over expenses, because the expenses is keep on increasing in all
the years, and it results in decreasing in profit available for shareholders.

• The company has to maintain adequate cash level to meet out its immediate requirement,
because the company maintains less cash availability

• The company inventories is keep on increasing from the beginning of the year, so it has to
take necessary steps like sales promotion, advertising to clear the stocks because it affects the
liquidity position.

36
CHAPTER 7
CONCLUSION

37
Financial analysis determines a company’s health and stability, providing an understanding of
how the company conducts its business. But it is important to know that financial statement
analysis has its limitations as well. Different accounting methods adopted by different firms’
changes the visible health and profit levels for either better or worse. Different analysts may
get different results from the same information. Hence, we must conclude that financial
statement analysis is only one of the tools (although a major one) while taking an investment
decision.

38
References

39
[1] Ali, H., & Ahmad, I., &Bahrudin, N,Z, (2011). Assessing the financial performance of
SMEs through Islamic financing schemes, IEEE International journal, PP. 975 – 980.

[2] Atan, R., & Raman, Abdul. &Suryani, &Sawiran, & Sahar, Mohamed. &Nafsiah.&Rasid.
(2010). Financial performance of Malaysian local authorities: A trend analysis, IEEE
International journal, PP. 271 – 276.

[3] Chien-Chuan Lin, & Chao-Lin Tuan, & Wei-Neng Yang, &Ke-Chung Peng. (2011). An
application of Entropy weight and Super-efficiency models on financial performance of
Taiwanese listed food companies, IEEE International journal, PP. 784 – 787.

[4] Hajek, P., &Olej, V. (2014). Comparing corporate financial performance and qualitative
information from annual reports using self-organizing maps, IEEE International journal, PP.
93 - 98.

[5] Ignatius, J., &Behzadian, M., &Malekan, H,S., &Lalitha, D. (2012). Financial
performance of Iran's Automotive sector based on PROMETHEE II, IEEE International
journal, PP 35 – 38

[6] Jiaming Ma, &Fei Huang, &Xincheng Lu. (2011). Vertical mergers and acquisitions of
listed coal company's financial performance evaluation, IEEE International journal, PP. 842 –
846

BIBLOGRAPHY:
1. www.moneycontrol.com
2. www.ril.com

40
 ANNEXURE:

FINANCIAL STATEMENTS

41
BALANCE SHEET:

42
43
PROFIT AND LOSS STATEMENT:

44
45
CASH FLOW STATEMENT

46