TABLE OF CONTENTS

Sr. No. PARTICULARS Page No.

1. INTRODUCTION OF TOPIC

2. COMPANY PROFILE

3. OBJECTIVES OF THE STUDY

4. SCOPE OF THE STUDY

5. HYPOTHESIS

6. RESEARCH METHODOLOGY

7. DATA ANALYSIS AND NTERPRETATION

8. LIMITATION OF THE STUDY

9. CONCLUSION

10. SUGGESTIONS

11. ANNEXURE

 BIBLIOGRAPHY

Page No. 1
 CHAPTER-1

INTRODUCTION OF TOPIC

Page No. 2
 CHAPTER-1
INTRODUCTION OF TOPIC

Financial statement analysis allows analysts to identify trends by comparing ratios

across multiple time periods and statement types. These statements allow analysts to
measure liquidity, profitability, company-wide efficiency and cash flow. There are
three main types of financial statements: the balance sheet, income statement and cash
flow statement. The balance sheet is a snapshot in time of the company's assets,
liabilities and shareholders' equity. Analysts use the balance sheet to analyze trends in
assets and debts. The income statement begins with sales and ends with net income. It
also provides analysts with gross profit, operating profit and net profit. Each of these
is divided by sales to determine gross profit margin, operating profit margin and net
profit margin. The cash flow statement provides an overview of the company's cash
flows from operating activities, investing activities and financing activities.

Financial statement analysis is the process of reviewing and evaluating a company's

financial statements (such as the balance sheet or profit and loss statement), thereby
gaining an understanding of the financial health of the company and enabling more
effective decision making. Financial statements record financial data; however, this
information must be evaluated through financial statement analysis to become more
useful to investors, shareholders, managers and other interested parties.

The first task of financial analysis is to select the information relevant to the decision
under consideration to the total information contained in the financial statement. The
second step is to arrange the information in a way to highlight significant relationship.
The final step is interpretation and drawing of inference and conclusions. Financial
statement is the process of selection, relation and evaluation.

Page No. 3
Financial Analysis is the process of identifying the financial strengths and weaknesses of the
firm by property-establishing relationship between the items of the Balance Sheet and the
Profit and Loss account. There are various methods or techniques are used in analyzing
financial schedule of change in working capital flow, cost volume Profit Analysis and Ratio
Analysis.

MEANING OF FINANCIAL ANALYSIS:-

The first task of financial analysis is to select the information relevant to the decision under
consideration to the total information contained in the financial statement. The second step is
to arrange the information in a way to highlight significant relationship. The final step is
interpretation and drawing of inference and conclusions. Financial statement is the process of
selection, relation and evaluation.

The meaning of Financial Analysis is also known as analysis refers to the process of
determining according to Meta fund tutored is a process of evaluating the relationship
between components parts of a financial statements to obtain a better understanding of a
firm's position and performance. In the word of Myers" Financial statements analysis is
largely a study of relationship among the various financial factors in a series of statements".
The purpose of financial statements is so as to judge the profitability and financial soundness
of the firm.

Financial Analysis can be undertaken by management of the firm or by parties outside the
firm Owners, Creditors, Investors and Others. The structure of Assets, Liabilities and
Owner's equity and so on and the Profit & Loss account shows the results of operation during
a certain period of times in terms of the revenue obtained during a certain period of times in
terms of the revenue obtained and the cost incurred during the year. Thus, the financial
position and operational statement provides a summarized view of the financial position and
operation of the firm.

Page No. 4
The Financial Analysis statements are thus an important aid to Financial Analysis.

The first task of the Financial Analyst is to select the information relevant to the decisions
under consideration from the total information contained in the financial statements. In the
brief Financial Analysis are the process of selection, relation and Evaluation.

Purpose of Analysis of financial statements

 To know the earning capacity or profitability.

 To know the solvency.
 To know the financial strengths.
 To know the capability of payment of interest & dividends.
 To make comparative study with other firms.
 To know the trend of business.
 To know the efficiency of mgt.
 To provide useful information to mgt

Tools of Financial Statement Analysis

Various tools are used to evaluate the significance of financial statement data. Three
commonly used tools are these:

 Ratio Analysis
 Funds Flow Analysis
 Cash Flow Analysis

Ratio Analysis:

Fundamental Analysis has a very broad scope. One aspect looks at the general (qualitative)
factors of a company. The other side considers tangible and measurable factors (quantitative).
This means crunching and analyzing numbers from the financial statements. If used in
conjunction with other methods, quantitative analysis can produce excellent results.
Ratio analysis isn't just comparing different numbers from the balance sheet, income
statement, and cash flow statement. It's comparing the number against previous years, other
companies, the industry, or even the economy in general. Ratios look at the relationships

Page No. 5
between individual values and relate them to how a company has performed in the past, and
might perform in the future.

Meaning of Ratio:
A ratio is one figure express in terms of another figure. It is a mathematical yardstick that
measures the relationship two figures, which are related to each other and mutually
interdependent. Ratio is express by dividing one figure by the other related figure. Thus a
ratio is an expression relating one number to another. It is simply the quotient of two
numbers. It can be expressed as a fraction or as a decimal or as a pure ratio or in absolute
figures as “so many times”. As accounting ratio is an expression relating two figures or
accounts or two sets of account heads or group contain in the financial statements.

Meaning of Ratio Analysis:

Ratio analysis is the method or process by which the relationship of items or group of items
in the financial statement are computed, determined and presented.
Ratio analysis is an attempt to derive quantitative measure or guides concerning the financial
health and profitability of business enterprises. Ratio analysis can be used both in trend and
static analysis. There are several ratios at the disposal of an analyst but their group of ratio he
would prefer depends on the purpose and the objective of analysis.

While a detailed explanation of ratio analysis is beyond the scope of this section, we will
focus on a technique, which is easy to use. It can provide you with a valuable investment
analysis tool.

This technique is called cross-sectional analysis. Cross-sectional analysis compares financial

ratios of several companies from the same industry. Ratio analysis can provide valuable
information about a company's financial health. A financial ratio measures a company's
performance in a specific area. For example, you could use a ratio of a company's debt to its
equity to measure a company's leverage. By comparing the leverage ratios of two companies,
you can determine which company uses greater debt in the conduct of its business. A
company whose leverage ratio is higher than a competitor's has more debt per equity. You
can use this information to make a judgment as to which company is a better investment risk.

However, you must be careful not to place too much importance on one ratio. You obtain a
better indication of the direction in which a company is moving when several ratios are taken
as a group.
Page No. 6
Classification of Ratio:

CLASSIFICATION OF RATIO

BASED ON FINANCIAL BASED ON FUNCTION BASED ON USER

STATEMENT

1] BALANCE SHEET 1] LIQUIDITY RATIO 1] RATIOS FOR

RATIO 2] LEVERAGE RATIO SHORT TERM
2] REVENUE 3] ACTIVITY RATIO CREDITORS
STATEMENT 4] PROFITABILITY 2] RATIO FOR
RATIO RATIO SHAREHOLDER

3] COMPOSITE 5] COVERAGE 3] RATIOS FOR

RATIO RATIO MANAGEMENT

4] RATIO FOR
LONG TERM
CREDITORS

Page No. 7
Based on Financial Statement
Accounting ratios express the relationship between figures taken from financial statements.
Figures may be taken from Balance Sheet, P& P A/C, or both. One-way of classification of
ratios is based upon the sources from which are taken.

1] Balance sheet ratio:

If the ratios are based on the figures of balance sheet, they are called Balance Sheet Ratios.
E.g. Ratio of current assets to current liabilities or Debt to equity ratio. While calculating
these ratios, there is no need to refer to the Revenue statement. These ratios study the
relationship between the assets & the liabilities, of the concern. These ratios help to judge the
liquidity, solvency & capital structure of the concern. Balance sheet ratios are Current ratio,
Liquid ratio, and Proprietary ratio, Capital gearing ratio, Debt equity ratio, and Stock working
capital ratio.

2] Revenue ratio:
Ratio based on the figures from the revenue statement is called revenue statement ratios.
These ratios study the relationship between the profitability & the sales of the concern.
Revenue ratios are Gross profit ratio, Operating ratio, Expense ratio, Net profit ratio, Net
operating profit ratio, Stock turnover ratio.

3] Composite ratio:
These ratios indicate the relationship between two items, of which one is found in the balance
sheet & other in revenue statement.
There are two types of composite ratios-
a) Some composite ratios study the relationship between the profits & the investments of the
concern. E.g. return on capital employed, return on proprietors fund, return on equity capital
etc.
b) Other composite ratios e.g. debtors turnover ratios, creditors turnover ratios, dividend
payout ratios, & debt service ratios

Based on Function:
Accounting ratios can also be classified according to their functions in to liquidity ratios,
leverage ratios, activity ratios, profitability ratios & turnover ratios.

Page No. 8
1] Liquidity ratios:
It shows the relationship between the current assets & current liabilities of the concern e.g.
liquid ratios & current ratios.

2] Leverage ratios:
It shows the relationship between proprietors funds & debts used in financing the assets of
the concern e.g. capital gearing ratios, debt equity ratios, & Proprietary ratios.

3] Activity ratios:
It shows relationship between the sales & the assets. It is also known as Turnover ratios &
productivity ratios e.g. stock turnover ratios, debtors’ turnover ratios.

4] Profitability ratios:
a) It shows the relationship between profits & sales e.g. operating ratios, gross profit ratios,
operating net profit ratios, expenses ratios
b) It shows the relationship between profit & investment e.g. return on investment, return on
equity capital.

5] Coverage ratios:
It shows the relationship between the profit on the one hand & the claims of the outsiders to
be paid out of such profit e.g. dividend payout ratios & debt service ratios.

Based on User:
1] Ratios for short-term creditors:
Current ratios, liquid ratios, stock working capital ratios

2] Ratios for the shareholders:

Return on proprietors fund, return on equity capital

3] Ratios for management:

Return on capital employed, turnover ratios, operating ratios, expenses ratios

Page No. 9
4] Ratios for long-term creditors:
Debt equity ratios, return on capital employed, proprietor ratios.

Liquidity Ratio: -
Liquidity refers to the ability of a firm to meet its short-term (usually up to 1 year)
obligations. The ratios, which indicate the liquidity of a company, are Current ratio,
Quick/Acid-Test ratio, and Cash ratio. These ratios are discussed below

Page No. 10
Return on Capital Employed:-

Meaning:

The profitability of the firm can also be analyzed from the point of view of the total funds
employed in the firm. The term fund employed or the capital employed refers to the total
long-term source of funds. It means that the capital employed comprises of shareholder funds
plus long-term debts. Alternatively it can also be defined as fixed assets plus net working
capital.

Capital employed refers to the long-term funds invested by the creditors and the owners of a
firm. It is the sum of long-term liabilities and owner's equity. ROCE indicates the efficiency
with which the long-term funds of a firm are utilized.

Formula:

NPAT

Return on capital employed = *100

Capital employed

Financial

These ratios determine how quickly certain current assets can be converted into cash. They
are also called efficiency ratios or asset utilization ratios as they measure the efficiency of a
firm in managing assets. These ratios are based on the relationship between the level of
activity represented by sales or cost of goods sold and levels of investment in various assets.
The important turnover ratios are debtors turnover ratio, average collection period,
inventory/stock turnover ratio, fixed assets turnover ratio, and total assets turnover ratio.
These are described below:

Page No. 11
Advantages of Ratio Analysis

Financial ratios are essentially concerned with the identification of significant accounting
data relationships, which give the decision-maker insights into the financial performance of a
company. The advantages of ratio analysis can be summarized as follows:

 Ratios facilitate conducting trend analysis, which is important for decision making and
forecasting.
 Ratio analysis helps in the assessment of the liquidity, operating efficiency, profitability
and solvency of a firm.
 Ratio analysis provides a basis for both intra-firm as well as inter-firm comparisons.
 The comparison of actual ratios with base year ratios or standard ratios helps the
management analyze the financial performance of the firm.

Limitations of Ratio Analysis

Ratio analysis has its limitations. These limitations are described below:

1] Information problems
 Ratios require quantitative information for analysis but it is not decisive about
analytical output.
 The figures in a set of accounts are likely to be at least several months out of date, and
so might not give a proper indication of the company’s current financial position.
 Where historical cost convention is used, asset valuations in the balance sheet could
be misleading. Ratios based on this information will not be very useful for decision-
making.

2] Comparison of performance over time

 When comparing performance over time, there is need to consider the changes in
price. The movement in performance should be in line with the changes in price.
 When comparing performance over time, there is need to consider the changes in
technology. The movement in performance should be in line with the changes in
technology.

Page No. 12
  Changes in accounting policy may affect the comparison of results between different
accounting years as misleading.

3] Inter-firm comparison

 Companies may have different capital structures and to make comparison of

performance when one is all equity financed and another is a geared company it may
not be a good analysis.
 Selective application of government incentives to various companies may also distort
intercompany comparison. Comparing the performance of two enterprises may be
misleading.
 Inter-firm comparison may not be useful unless the firms compared are of the same
size and age, and employ similar production methods and accounting practices.
 Even within a company, comparisons can be distorted by changes in the price level.
 Ratios provide only quantitative information, not qualitative information.
 Ratios are calculated on the basis of past financial statements. They do not indicate
future trends and they do not consider economic conditions.

Purpose of Ratio Analysis:

1] To identify aspects of a business’s performance to aid decision making

2] Quantitative process – may need to be supplemented by qualitative factors to get a

complete picture.

3] 5 main areas-

 Liquidity – the ability of the firm to pay its way

 Investment/shareholders – information to enable decisions to be made on the
extent of the risk and the earning potential of a business investment
 Gearing – information on the relationship between the exposure of the business to
loans as opposed to share capital
 Profitability – how effective the firm is at generating profits given sales and or its
capital assets
 Financial – the rate at which the company sells its stock and the efficiency with
which it uses its assets

Page No. 13
Role of Ratio Analysis:

It is true that the technique of ratio analysis is not a creative technique in the sense that it uses
the same figure & information, which is already appearing in the financial statement. At the
same time, it is true that what can be achieved by the technique of ratio analysis cannot be
achieved by the mere preparation of financial statement.

Ratio analysis helps to appraise the firm in terms of their profitability & efficiency of
performance, either individually or in relation to those of other firms in the same industry.
The process of this appraisal is not complete until the ratio so computed can be compared
with something, as the ratio all by them do not mean anything. This comparison may be in
the form of intra firm comparison, inter firm comparison or comparison with standard ratios.

Thus proper comparison of ratios may reveal where a firm is placed as compared with earlier
period or in comparison with the other firms in the same industry.

Ratio analysis is one of the best possible techniques available to the management to impart
the basic functions like planning & control. As the future is closely related to the immediate
past, ratio calculated on the basis of historical financial statements may be of good assistance
to predict the future. Ratio analysis also helps to locate & point out the various areas, which
need the management attention in order to improve the situation.

As the ratio analysis is concerned with all the aspect of a firms financial analysis i.e.
liquidity, solvency, activity, profitability & overall performance, it enables the interested
persons to know the financial & operational characteristics of an organisation & take the
suitable decision.

Page No. 14
 CHAPTER-2

COMPANY PROFILE

Page No. 15
 CHAPTER-2
COMPANY PROFILE

Reliance Jio Infocomm Limited (RJIL), a subsidiary

of Reliance Industries Limited (RIL), India’s largest
private sector company, is the first telecom operator
to hold pan India Unified License. This license
authorises RJIL to provide all telecommunication services except Global Mobile Personal
Communication by Satellite Service.

Reliance Jio promises to shape the future of India by providing end-to-end digital
solutions for businesses, institutions and households and seamlessly bridging the rural-
urban divide.

Home to the world’s second largest population of 1.2 billion, India is a young nation with
63% of its population under the age of 35 years. It has a fast growing digital audience with
800 million mobile connections and over 200 million internet users. Reliance thoroughly
believes in India’s potential to lead the world with its capabilities in innovation. Towards that
end, Reliance envisages creation of a digital revolution in India.

Reliance Jio aims to enable this transformation by creating not just a cutting-edge voice and
broadband network, but also a powerful ecosystem on which a range of rich digital services
will be enabled – a unique green-field opportunity.

Page No. 16
The three-pronged focus on broadband networks, affordable smartphones and the availability
of rich content and applications has enabled Jio to create an integrated business strategy from
the very beginning, and today, Jio is capable of offering a unique combination of telecom,
high speed data, digital commerce, media and payment services.

A Vision That Touches All

Reliance’s vision for India is that broadband and digital services will no longer be a luxury
item. Rather, Reliance envisions an India where these are basic necessities to be consumed in
abundance by consumers and small businesses alike, as much in far-flung villages as in our
largest cities. The initiatives are truly aligned with the Government of India's ‘Digital India’
vision for our nation.

Affordable Devices: Jio has worked with all the leading device manufacturers of the world to
ensure availability of 4G LTE smartphones across all price points – from ultra-premium
models on one hand, to entry level models on the other.

Digital Communication: The application Jio4GVoice brings the 4G communication suite to

all smartphones. With its RCS (Rich Communication Services) features like Enriched calling,
Chat, File share and Unified Messaging, it redefines the calling and messaging experience. It
also enables Jio’s cutting edge voice and video call service on non-VoLTE smartphones.

Digital Currency: Jio envisions a new India which will use digital currency instead of paper
money for a more secure and convenient way to transact. Jio Money, Jio’s digital currency
and digital payments business, will play a crucial role in this by offering a platform for
ubiquitous, affordable and secure digital payments.

Jio Drive: Micro and small businesses will soon have access to cutting-edge cloud storage
technologies which were once affordable to big companies only, giving them a new edge to
compete on a global landscape. Jio Drive is an application that brings powerful cloud
capabilities to every smartphone. Using Jio Drive, anyone can store, sync and share any
content between their own devices and also with their friends.

Page No. 17
Digital Education: Teachers and students from far flung areas can connect with each other,
crowd-source knowledge and adapt new age learning techniques and thus lift the level of
education to a completely different plane.

Digital Healthcare: Expert medical advice would be available anytime, anywhere - with
medical practitioners able to grow their practice without constraint, and provide quality of life
to the crores that make up our country.

Digital Entertainment and social connectivity: Jio Chat is a powerful communication

application that integrates chat, voice, video calling, conferencing, file sharing, photo sharing
and much more. Jio Play enables users to watch HD TV anytime, anywhere on any device,
from hundreds of channels, across categories and languages. Jio Beats is a premier digital
music streaming service that gives instant access to millions of songs and curated playlists.
Jio Mags and Jio News provide access to the most popular collection of magazines and news
from leading publishing houses across multiple languages.

Digital Entrepreneurship: Jio is building is a powerful platform on which a range of rich

digital products and services can be enabled - digital currency, digital commerce, digital
education, digital healthcare, e-governance, Smart Cities, M2M and the Internet of Things. It
does not matter whether these services are created by Jio itself, its ecosystem partners or
anyone globally. Reliance is committed to the principles of Net Neutrality.

Laying the Foundation for the Future

Reliance Jio is creating the most extensive and future-proof network in India, and perhaps, in
the world. It will provide next generation legacy-free digital services over an end-to-end all-
IP network, which can be seamlessly upgraded even to 5G and beyond. In addition to the
existing pan India 2300 MHz spectrum and 1800 MHz in 14 circles, Jio invested over Rs
10,000 crore during this year's auction to acquire 800 MHz spectrum in 10 circles and 1800
MHz spectrum in 6 circles. This brings the cumulative investment in spectrum assets to
nearly Rs 34,000 crores. Jio now has the largest footprint of liberalized spectrum in the
country, acquired in an extremely cost effective manner.

Reliance Jio has laid more than 2.5 lakh kilometres of fibre-optic cables, covering 18,000
cities and over one lakh villages, with the aim of covering 100% of the nation’s population by
2018. It has an initial end-to-end capacity to serve in excess of 100 million wireless

Page No. 18
broadband and 20 million Fibre-to-Home customers. Reliance Jio has also built nearly half-a-
million square feet of cloud data centres and a multi-Terabit capacity international network.

The infrastructure is being built in partnership with some of the world’s most technologically
advanced companies.

Our motto “Growth is Life” aptly captures the ever-evolving spirit of Reliance. Our activities
span hydrocarbon exploration and production, petroleum refining and marketing,
petrochemicals, retail and telecommunications. In each of these areas, we are committed to
innovation-led, exponential growth. Our vision has pushed us to achieve global leadership in
many of our businesses – including our position as the largest polyester yarn and fibre
producer in the world. Reliance Industries Limited is a Fortune 500 company and the largest
private sector corporation in India.

In This Section

 About

 Leadership
 Manufacturing Excellence
 R&D
 Products & Brands
 Corporate Social Responsibility

As Reliance sets sights on even more ambitious goals, we remain inspired and guided by the
story and philosophy of our founder chairman Dhirubhai Ambani. Hailing from modest
means, he followed his dream to create India's largest company. Reliance as an organisation
has adopted this ethos of converting adversity into opportunity and making the impossible
possible by challenging conventional wisdom.

Our ultimate aim has always been – and will always be – to touch the lives of people in a
positive way.

Page No. 19
Corporate Awards

2016

Winner of the Confederation of Indian Industries’ ‘Sustainable Plus Platinum Award’

2015

Winner of the Platts Global Energy Award for Corporate Social Responsibility

2013

Ranked 107th. on the Fortune Global 500 list

2013

Ranked 25th. on ICIS Top 100 Chemical Companies list

2012

Certified as 'Responsible Care Company' by the American Chemistry Council

2012

Jamnagar Refinery listed among the world’s top five manufacturing units by Discovery
Channel

2010

Ranked second amongst BCG’s ten top global ‘Sustainable Value Creators’

2010

Reliance E&P's KG-D6 won Marico Innovation Foundation’s Innovation for India Award
for combined synthesis of advanced technologies, extreme engineering, innovative
execution, yielding unprecedented results and impact on India's energy security

Page No. 20
 CHAPTER-3
OBJECTIVES OF THE STUDY

Page No. 21
 CHAPTER- 3

OBJECTIVES OF THE STUDY

• To learn about the various ratios that are used for financial analysis

• To know about the financial position of Reliance Jio Infocomm Limited (RJIL).

• To know the various financial indications through changing values of various

ratios.

• To learn the calculation of various ratios.

Page No. 22
 CHAPTER-4
SCOPE OF STUDY

Page No. 23
 CHAPTER-4

SCOPE OF STUDY

As is apparent from the above discussion about the meaning of financial management
the scope of financial management is very wide. The scope extends over the following
three dimensions.

 For the organization to minimize cost and to maximize return.

 The ability to meet its operating activities

 To overcome undue risk.

Page No. 24
CHAPTER-5

HYPOTHESIS

Page No. 25
 CHAPTER-5

HYPOTHESIS

Null Hypothesis (HO)

 Financial Analysis does not help the business concern in maintaining the
goodwill.
 Financial Analysis does not create an environment of security, confidence, and
overall efficiency in a business.
Alternative Hypothesis
 Financial Analysis helps the business concern in maintaining the goodwill.
 Financial Analysis creates an environment of security, confidence, and overall
efficiency in a business.

Page No. 26
 CHAPTER - 6
RESEARCH METHODOLOGY

Page No. 27
 CHAPTER-6

RESEARCH AND METHODLOGY

Research Methodology is a way to systematically solve the research problem. It may be

understood as Science of studying how research is done, Scientifically in it we study the
various steps that generally adopted by a researcher in studying his research problem along
with the logic behind them. “Accuracy of the study depends on the systematic application of
the method.” The researcher has to decide the method to be used that helps him to get a
desired direction in a systematic way.

The significance of Financial Analysis lies in the fact that it presents facts on a comparative

basis and enables the drawing of inferences regarding the performance of a firm. The use is

not confined the finance managers alone. They are different parties interested in the Financial

Analysis for knowing the financial position of a firm for different purpose. The suppliers of

goods on credit, banks, financial institutions, investors, shareholders and the management all

make use of Financial Analysis as a tool of evaluating the financial position and the

performance of a firm.

Data collection is important step in any project and success of any project will be largely
depend upon now much accurate you will be able to collect and how much time, money and
effort will be required to collect that necessary data, this is also important step.

There are mainly two types of data:

 Primary data:
The primary data is that data which is collected fresh or first hand, and for first time
which is original in nature. Primary data can collect through personal interview,
questionnaire etc. to support the secondary data.

Page No. 28
Secondary data:

Secondary data means data that already available i.e. they refers to the data which have
already been collected & analyzed by some else. When the researcher utilizes secondary
data he has to look in to various sources from where he can obtain them.

Secondary data:

Data collected from financial statements of the company;

 Profit & Loss A/c of Reliance Jio Infocomm Limited (RJIL).

 Balance Sheet of Reliance Jio Infocomm Limited (RJIL).
 Annual Report, etc.

Page No. 29
 CHAPTER - 7

DATA ANALYSIS

AND

INTERPRETATION

Page No. 30
 CHAPTER - 7
DATA ANALYSIS AND INTERPRETATION
CURRENT RATIO :-
Current ratio = current assets
Current liabilities
YEAR RATIOS

Year - 2015 .97

Year - 2016 1.07

Year - 2017 1.10

CURRENT RATIO
1.2

1 1.07 1.1
0.97
0.8
2016-2017
0.6
2015-2016
0.4 2014-2015

0.2

0
2015 2016 2017

INTERPRETATION:
The standard norm for current ratio is 1. It is evident that in the year 2016-2017 current ratio
1.07 is satisfactory. In remaining year 2015 current ratio is less than 1 which is not
satisfactory. Therefore it can be calculated that the liquidity performance of company is good.

Page No. 31
 QUICK RATIO:
𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐚𝐬𝐬𝐞𝐭𝐬 – (𝐬𝐭𝐨𝐜𝐤 𝐚𝐧𝐝 𝐩𝐫𝐞𝐩𝐚𝐢𝐝 𝐞𝐱𝐩𝐞𝐧𝐬𝐞𝐬)
Quick Ratio =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬 – 𝐁𝐚𝐧𝐤 𝐨𝐯𝐞𝐫𝐝𝐫𝐚𝐟𝐭

YEAR RATIOS

Year - 2015 .40

Year - 2016 .60

Year - 2017 .50

QUICK RATIO
0.7

0.6
0.6
0.5
0.5
0.4 2016-2017
0.4
0.3 2015-2016
2014-2015
0.2

0.1

0
2015 2016 2017

INTERPRETATION:

It is more test of liquidity than the current ratio. Generally a quick ratio is 0:50. It is considered to
represent a satisfactory current financial condition. The quick ratio has never exceeded the standard
ratio. The quick ratio has been increased from .40 to .60 in 2016 to 2017. Therefore it can be
concluded the liquidity performance of the company is good.

Page No. 32
NET PROFIT RATIO:

𝐍𝐞𝐭 𝐏𝐫𝐨𝐟𝐢𝐭
Net Profit Ratio = x 100
𝐒𝐚𝐥𝐞𝐬

YEAR RATIOS

Year - 2015 7.21

Year - 2016 9.79

Year - 2017 8.98

NET PROFIT RATIO

12

10
9.79
8 8.98
2016-2017
6 7.21
2015-2016
4 2014-2015

0
2015 2016 2017

INTERPRETATION:

In this the net profit ratio is increased in 2015-2016 as 9.79. So in the year 2015-2016 utilized the net
profit effectually.

Page No. 33
RETURN ON ASSETS

Return on assets = Net profit x 100

Total assets

YEAR RATIOS

Year - 2015 10.53

Year - 2016 12.40

Year - 2017 8.12

RETURN ON ASSETS
14

12
12.4
10
10.53
8 2016-2017
8.12
6 2015-2016
2014-2015
4

0
2014-2015 2015-2016 2016-2017

INTERPRETATION:

In the year 2015-2016 got the higher return on assets as 12.4 on the other hand lower ratio got in the
year 2016-2017. Therefore it indicates ideal capacity of assets.

Page No. 34
ETURN ON EQUITY

Return on equity = Net profit x 100

Shareholders fund

YEAR RATIOS

Year - 2015 19.74

Year - 2016 21.34

Year - 2017 15.05

RETURN ON EQUITY
25

20 21.34
19.74
15 2016-2017
15.05
2015-2016
10
2014-2015
5

0
2014-2015 2015-2016 2016-2017

INTERPRETATION:

In this the return on equity first increased from 19.74 in the year 2014- 2015. So the higher ratio 21.34
in the year 2015 - 2016 is only recorded.

Page No. 35
FIXED ASSET TURNOVER RATIO

Fixed asset turnover ratio = Net sales

Fixed asset

YEAR RATIOS

Year - 2015 146.00

Year - 2016 126.58

Year - 2017 90.41

FIXED ASSET TURNOVER RATIO

160
140
146
120
126.58
100
2016-2017
80 90.41
2015-2016
60
2014-2015
40
20
0
2014-2015 2015-2016 2016-2017

INTERPRETATION:

The ratio measures the efficiency of the assets use. The high ratio is better performance. On the other
hand, a low ratio indicates that fixed assets are not being effectively utilized. Only in the years 2014-
2015 and 2015-2016 utilized the fixed assets effectively.

Page No. 36
CAPITAL TURNOVER RATIO

Capital turnover ratio = Sales

Capital

YEAR RATIOS

Year - 2015 16.00

Year - 2016 18.24

Year - 2017 11.50

CAPITAL TURNOVER RATIO

20
18
18.24
16
14 16
12 2016-2017
10 11.5
2015-2016
8
6 2014-2015
4
2
0
2014-2015 2015-2016 2016-2017

INTERPRETATION:

The high capital turnover ratio it indicates greater profit on the other hand when it is low it indicates
sufficient sales are not being made and profits and lower. The actual capital turnover ratio has
increased in year 2015-2016 as 18.24 and then decreased in 2016-2017. Finally the capital turnover
ratio is not satisfactory.

Page No. 37
CURRENT ASSET TO WORKING CAPITAL RATIO

Current asset to working capital ratio = current asset

Working capital

YEAR RATIOS

Year - 2015 3.22

Year - 2016 2.47

Year - 2017 1.99

CURRENT ASSET TO WORKING CAPITAL RATIO

3.5

3 3.22
2.5
2.47
2 2016-2017
1.99
1.5 2015-2016
2014-2015
1

0.5

0
2014-2015 2015-2016 2016-2017

INTERPRETATION:

In the year 2014-2015 got the higher current asset to working capital ratio as 3.22 on the other hand
lower ratio got in the year 2016-2017 of 1.99. Therefore only in the year 2014-2015 the higher ratio is
recorded and used effectively.

Page No. 38
 CHAPTER - 8
LIMITATIONS OF STUDY

Page No. 39
 CHAPTER - 8

LIMITATIONS OF THE STUDY

This study is based on the secondary data collected form the Reliance Jio Infocomm Limited
(RJIL)

 The accuracy of financial information largely depends on how accurately financial

statements are prepared.

 Since financial statements are prepared by using historical financial data, therefore,
the information derived from such statements may not be effective in corporate
planning, if the previous situation does not prevail.

 Then financial statement analysis provides only quantitative information about the
company's financial affairs.

Page No. 40
CHAPTER-9
CONCLUSION

Page No. 41
 CHAPTER-9

CONCLUSION

 The company’s liquidity position is satisfactory but not ideal, as the current assets and
the current liabilities have being considerably decreased when compared to previous
year in order to meet its current obligations.

 The overall financial position of the Reliance Jio Infocomm Limited (RJIL) is
satisfactory. The company needs to improve its profitable position which is ideal, but
less when compared to other years, in order to earn return on the resources committed
to business.

 The activity ratio of the company is i.e current asset turnover ratio needs to be
improved. In the rest of the ratios gives satisfactory result.

 On the whole, the company’s overall position is satisfactory, and has the name, fame
and trust of people. It is listed in one among top 25 of India & has potential to survive.

 Increased demand of products helps the company remain strong. The changing
lifestyle and concepts of Indians have contributing much to the growth of the
company.

Page No. 42
CHAPTER- 10

SUGGESTIONS

Page No. 43
 CHAPTER- 10
SUGGESTIONS

On the basis of the above conclusion the researcher is suggesting the following:-

 New and advanced concept must be introduced in inventory control management.

 Adequate planning is required for procurement of store items.

 A detail of the essence of effective working Financial management is proper cash

flow forecasting. This should take into account the impact of unforeseen events,
market cycles, loss of a prime customer and actions by competitors. So the effect of
unforeseen demands of Financial capital should be factored in Nestle India Co. Ltd.

 Advance payments should be avoided. If at all advance payments are required, it

should be against securities like banks guarantee etc.

Page No. 44
CHAPTER - 11

ANNEXURE

Page No. 45
 BIBILIOGRAPHY

BOOK’S

o I. M. Pandey - Financial Management - Vikas Publishing House Pvt. Ltd. -

Ninth Edition 2006
o M.Y. Khan and P.K. Jain, Financial management – Vikas Publishing house ltd.,
New Delhi.
o S.K. Gupta and R.K. Sharma, Financial Management – Kalyani Publishers
o Kothari C.R., “Research Methodology-methods and Techniques”, K.K Gupta
for New Age International private ltd, 2006.

Websites:

 http://www.managementstudyguide.com/financial-management.htm
 http://www.investopedia.com/terms/f/financial-analysis.asp
 http://www.businessdictionary.com/definition/financial-analysis.html
 http://www.myaccountingcourse.com/financial-ratios/

Company Websites

 http://www.jio.com/
 http://www.ril.com/OurCompany/About.aspx

Page No. 46
 ANNEXURE

Reliance Jio Infocomm Limited (RJIL)

Balance Sheet of Reliance Jio Infocomm Limited (RJIL)----------- in Rs. Cr. ------------

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 50.90 50.90 50.91 50.41 50.41

Total Share Capital 50.90 50.90 50.91 50.41 50.41

Revaluation Reserves 0.00 3.12 3.12 3.12 3.12

Reserves and Surplus 5,280.29 3,942.38 3,216.65 2,675.51 2,277.12

Total Reserves and Surplus 5,280.29 3,945.50 3,219.78 2,678.63 2,280.24

Money Received Against Share 0.00 0.00 0.00 10.78 10.78

Warrants

Total Shareholders Funds 5,331.19 3,996.41 3,270.69 2,739.82 2,341.42

NON-CURRENT LIABILITIES

Long Term Borrowings 834.03 212.59 333.94 713.73 1,338.37

Deferred Tax Liabilities [Net] 515.31 449.62 412.24 390.95 351.84

Other Long Term Liabilities 293.19 7.67 6.91 6.21 12.41

Long Term Provisions 5.73 6.96 7.84 6.76 0.00

Total Non-Current Liabilities 1,648.25 676.83 760.94 1,117.65 1,702.62

CURRENT LIABILITIES

Short Term Borrowings 784.00 373.72 462.66 180.67 539.42

Trade Payables 1,040.75 908.03 662.18 898.34 600.10

Other Current Liabilities 616.84 382.94 561.69 890.74 462.56

Short Term Provisions 459.34 536.05 403.25 284.78 191.09

Page No. 47
Total Current Liabilities 2,900.93 2,200.74 2,089.78 2,254.53 1,793.17

Total Capital And Liabilities 9,880.37 6,873.98 6,121.41 6,112.00 5,837.21

ASSETS

NON-CURRENT ASSETS

Tangible Assets 4,770.95 3,088.38 3,096.53 3,242.16 3,063.39

Intangible Assets 24.22 12.93 10.52 11.42 7.96

Capital Work-In-Progress 621.48 386.87 129.65 34.97 248.97

Fixed Assets 5,416.64 3,488.18 3,236.69 3,288.55 3,320.33

Non-Current Investments 1,004.86 672.11 651.92 651.46 612.70

Long Term Loans And Advances 84.12 363.30 178.03 123.04 168.99

Other Non-Current Assets 194.46 0.00 36.02 21.41 0.00

Total Non-Current Assets 6,700.09 4,523.59 4,102.66 4,084.47 4,102.02

CURRENT ASSETS

Current Investments 394.44 121.64 100.00 0.00 0.00

Inventories 1,729.40 1,022.90 1,185.19 1,283.69 1,120.83

Trade Receivables 386.49 292.76 320.01 240.55 273.14

Cash And Cash Equivalents 139.38 289.38 207.84 221.11 154.19

Short Term Loans And Advances 201.05 562.52 168.12 244.58 186.97

OtherCurrentAssets 329.52 61.20 37.60 37.61 0.07

Total Current Assets 3,180.29 2,350.39 2,018.75 2,027.53 1,735.19

Total Assets 9,880.37 6,873.98 6,121.41 6,112.00 5,837.21

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES,
COMMITMENTS

Contingent Liabilities 501.38 563.18 151.52 253.25 748.98

CIF VALUE OF IMPORTS

Page No. 48
Raw Materials 2,324.59 1,964.81 2,409.81 2,549.22 2,622.21

Stores, Spares And Loose Tools 5.64 6.22 6.45 6.51 6.55

Capital Goods 1,051.84 173.77 44.79 50.37 162.34

EXPENDITURE IN FOREIGN
EXCHANGE

Expenditure In Foreign Currency 317.89 269.07 190.62 195.32 116.54

REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS

Dividend Remittance In Foreign - - - - -

Currency

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods 806.96 739.29 922.23 814.23 809.17

Other Earnings 26.92 48.36 33.78 11.55 10.61

BONUS DETAILS

Bonus Equity Share Capital - - - - -

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted - 0.11 0.12 0.06 0.06

Market Value

Non-Current Investments 1,004.04 672.08 651.88 651.43 612.66

Unquoted Book Value

CURRENT INVESTMENTS

Current Investments Quoted - - - - -

Market Value

Current Investments Unquoted 394.44 121.64 100.00 - -

Book Value

Page No. 49
Profit & Loss account of Reliance Jio Infocomm Limited (RJIL)----------------- in Rs. Cr. ------------

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

INCOME

Revenue From Operations [Gross] 9,806.62 9,619.39 9,877.27 9,589.28 9,452.91

Less: Excise/Sevice Tax/Other 989.92 1,002.97 999.00 979.20 945.41

Levies

Revenue From Operations [Net] 8,816.70 8,616.41 8,878.27 8,610.08 8,507.49

Other Operating Revenues 117.07 85.23 59.55 101.65 0.00

Total Operating Revenues 8,933.77 8,701.64 8,937.82 8,711.73 8,507.49

Other Income 135.33 53.64 37.55 79.23 57.38

Total Revenue 9,069.10 8,755.29 8,975.36 8,790.96 8,564.87

EXPENSES

Cost Of Materials Consumed 5,313.23 4,641.13 5,400.71 5,724.31 5,867.36

Purchase Of Stock-In Trade 220.96 224.40 249.22 250.28 253.90

Changes In Inventories Of FG,WIP -318.15 126.62 19.73 -115.87 -7.37

And Stock-In Trade

Employee Benefit Expenses 590.73 566.49 545.13 486.67 426.85

Finance Costs 88.78 88.33 172.09 244.61 260.97

Depreciation And Amortisation 288.20 268.61 246.78 248.05 220.07

Expenses

Other Expenses 1,799.73 1,582.25 1,407.56 1,267.43 1,068.57

Total Expenses 7,983.47 7,497.84 8,041.22 8,105.47 8,090.35

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

Profit/Loss Before Exceptional, 1,085.63 1,257.45 934.14 685.49 474.52

ExtraOrdinary Items And Tax

Exceptional Items 0.00 0.00 0.00 -71.05 0.00

Page No. 50
Profit/Loss Before Tax 1,085.63 1,257.45 934.14 614.45 474.52

Tax Expenses-Continued Operations

Current Tax 231.03 365.38 254.47 132.72 106.01

Less: MAT Credit Entitlement 22.57 0.00 0.00 0.00 0.00

Deferred Tax 74.42 39.61 34.59 39.11 55.98

Total Tax Expenses 282.88 404.99 289.06 171.83 161.99

Profit/Loss After Tax And Before 802.76 852.46 645.08 442.62 312.53
ExtraOrdinary Items

Profit/Loss From Continuing 802.76 852.46 645.08 442.62 312.53

Operations

Profit/Loss For The Period 802.76 852.46 645.08 442.62 312.53

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 15.77 16.75 12.70 8.78 6.20

Diluted EPS (Rs.) 15.77 16.75 12.69 8.77 6.20

VALUE OF IMPORTED AND

INDIGENIOUS RAW MATERIALS

Imported Raw Materials 2,157.20 1,976.05 2,483.83 2,533.27 2,624.38

Indigenous Raw Materials 3,156.03 2,665.08 2,946.40 3,213.35 3,271.33

STORES, SPARES AND LOOSE TOOLS

Imported Stores And Spares 5.51 5.32 5.86 3.96 4.40

Indigenous Stores And Spares 70.88 59.36 54.73 49.93 48.85

DIVIDEND AND DIVIDEND

PERCENTAGE

Equity Share Dividend 101.81 101.81 101.81 37.80 25.20

Tax On Dividend 20.73 20.73 20.73 6.42 4.28

Page No. 51
Equity Dividend Rate (%) 300.00 200.00 200.00 75.00 50.00

Page No. 52
Key Financial Ratios of Reliance Jio Infocomm Limited (RJIL)------------ in Rs. Cr. -------

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

Per Share Ratios

Basic EPS (Rs.) 15.77 16.75 12.70 8.78 6.20

Diluted EPS (Rs.) 15.77 16.75 12.69 8.77 6.20

Cash EPS (Rs.) 21.43 22.02 17.52 13.70 10.57

Book Value 104.73 78.45 64.18 54.29 46.39

[ExclRevalReserve]/Share (Rs.)

Book Value 104.73 78.51 64.25 54.35 46.45

[InclRevalReserve]/Share (Rs.)

Dividend / Share(Rs.) 3.00 2.00 2.00 0.75 0.50

Revenue from Operations/Share 175.51 170.95 175.56 172.82 168.77

(Rs.)

PBDIT/Share (Rs.) 28.73 31.72 26.58 23.37 18.96

PBIT/Share (Rs.) 23.07 26.44 21.73 18.45 14.59

PBT/Share (Rs.) 21.33 24.70 18.35 12.19 9.41

Net Profit/Share (Rs.) 15.77 16.75 12.67 8.78 6.20

Profitability Ratios

PBDIT Margin (%) 16.37 18.55 15.13 13.52 11.23

PBIT Margin (%) 13.14 15.46 12.37 10.67 8.64

PBT Margin (%) 12.15 14.45 10.45 7.05 5.57

Net Profit Margin (%) 8.98 9.79 7.21 5.08 3.67

Return on Networth / Equity (%) 15.05 21.34 19.74 16.17 13.36

Return on Capital Employed (%) 11.50 18.24 16.00 11.47 7.72

Return on Assets (%) 8.12 12.40 10.53 7.24 5.35

Total Debt/Equity (X) 0.30 0.15 0.24 0.33 0.80

Asset Turnover Ratio (%) 90.41 126.58 146.00 142.53 145.74

Liquidity Ratios

Page No. 53
Current Ratio (X) 1.10 1.07 0.97 0.90 0.97

Quick Ratio (X) 0.50 0.60 0.40 0.33 0.34

Inventory Turnover Ratio (X) 5.17 8.51 7.54 6.79 7.59

Dividend Payout Ratio (NP) (%) 12.68 11.94 15.78 8.54 8.06

Dividend Payout Ratio (CP) (%) 9.33 9.08 11.41 5.47 4.73

Earnings Retention Ratio (%) 87.32 88.06 84.22 91.46 91.94

Cash Earnings Retention Ratio (%) 90.67 90.92 88.59 94.53 95.27

Valuation Ratios

Enterprise Value (Cr.) 12,099.35 9,204.77 9,154.20 8,703.45 5,927.70

EV/Net Operating Revenue (X) 1.35 1.06 1.02 1.00 0.70

EV/EBITDA (X) 8.27 5.70 6.77 7.39 6.20

MarketCap/Net Operating Revenue 1.19 1.02 0.96 0.92 0.49

(X)

Retention Ratios (%) 87.31 88.05 84.21 91.45 91.93

Price/BV (X) 1.99 2.23 2.62 2.93 1.80

Price/Net Operating Revenue 1.19 1.02 0.96 0.92 0.49

Earnings Yield 0.08 0.10 0.08 0.06 0.07

Page No. 54