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    Cost and Management Accounting Topic-Ratio Analysis and Cash Flow Statement of Reliance Industries Ltd. 2019 - 2020

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    sarans goel
    The document analyzes key financial ratios and cash flow statements for Reliance Industries Ltd. for fiscal years 2019 and 2020. It shows that the company's current ratio, interest coverage ratio, return on equity, return on capital employed, and return on assets all declined from 2019 to 2020. Cash flow from operating activities increased significantly by 131.6% from 2019 to 2020, while cash flow from investing and financing activities decreased. Overall, the company's net cash flow increased substantially from 2019 to 2020.

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    Cost and Management Accounting Topic-Ratio Analysis and Cash Flow Statement of Reliance Industries Ltd. 2019 - 2020

    Uploaded by

    sarans goel
    39 views8 pages
    The document analyzes key financial ratios and cash flow statements for Reliance Industries Ltd. for fiscal years 2019 and 2020. It shows that the company's current ratio, interest coverage ratio, return on equity, return on capital employed, and return on assets all declined from 2019 to 2020. Cash flow from operating activities increased significantly by 131.6% from 2019 to 2020, while cash flow from investing and financing activities decreased. Overall, the company's net cash flow increased substantially from 2019 to 2020.

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    The document analyzes key financial ratios and cash flow statements for Reliance Industries Ltd. for fiscal years 2019 and 2020. It shows that the company's current ratio, interest coverage ratio, return on equity, return on capital employed, and return on assets all declined from 2019 to 2020. Cash flow from operating activities increased significantly by 131.6% from 2019 to 2020, while cash flow from investing and financing activities decreased. Overall, the company's net cash flow increased substantially from 2019 to 2020.

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    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    39 views8 pages

    Cost and Management Accounting Topic-Ratio Analysis and Cash Flow Statement of Reliance Industries Ltd. 2019 - 2020

    Uploaded by

    sarans goel
    The document analyzes key financial ratios and cash flow statements for Reliance Industries Ltd. for fiscal years 2019 and 2020. It shows that the company's current ratio, interest coverage ratio, return on equity, return on capital employed, and return on assets all declined from 2019 to 2020. Cash flow from operating activities increased significantly by 131.6% from 2019 to 2020, while cash flow from investing and financing activities decreased. Overall, the company's net cash flow increased substantially from 2019 to 2020.

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    of 8

    COST AND MANAGEMENT

    ACCOUNTING
    TOPIC- RATIO ANALYSIS AND
    CASH FLOW STATEMENT OF
    RELIANCE INDUSTRIES LTD.
    2019- 2020
    SUBMITTED BY - SUBMITTED TO -
    SARANSH GOYAL DR.NAVLEEN KAUR MAM
    BBA(IB) SEC- C
    Ratio Analysis for
    RELIANCE INDUSTRIES
    ◦ 1.Solvency Ratios

    ◦ 1.1 Current Ratio: The company's


    current ratio deteriorated and stood at
    0.6x during FY20, from 0.7x during
    FY19. The current ratio measures the
    Click to add text company's ability to pay short-term
    and long-term obligations
    ◦.
    1.2.Interest Coverage Ratio:
    ◦ The company's interest coverage ratio
    deteriorated and stood at 3.6x during FY20,
    from 4.3x during FY19. The interest
    coverage ratio of a company states how
    easily a company can pay its interest
    expense on outstanding debt. A higher
    ratio is preferable.
    2.PROFITABILITY RATIOS INDUSTRIES

    2.1RETURN ON EQUITY (ROE): THE ROE FOR THE COMPANY


    DECLINED AND DOWN AT 8.8% DURING FY20, FROM 10.3%
    DURING FY20. THE ROE MEASURES THE ABILITY OF A FIRM TO
    GENERATE PROFITS FROM ITS SHAREHOLDERS CAPITAL IN THE
    COMPANY.
    2.2RETURN ON CAPITAL EMPLOYED (ROCE): THE ROCE FOR THE
    COMPANY DECLINED AND DOWN AT 11.6% DURING FY20, FROM
    12.1% DURING FY19. THE ROCE MEASURES THE ABILITY OF A FIRM
    TO GENERATE PROFITS FROM ITS TOTAL CAPITAL (SHAREHOLDER
    CAPITAL PLUS DEBT CAPITAL) EMPLOYED IN THE COMPANY.

    2.3RETURN ON ASSETS (ROA): THE ROA OF THE COMPANY


    DECLINED AND DOWN AT 5.3% DURING FY20, FROM 5.6% DURING
    FY19. THE ROA MEASURES HOW EFFICIENTLY THE COMPANY USES
    ITS ASSETS TO GENERATE EARNINGS.
    No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
    Current ratio x 0.7 0.6
    Debtors’ Days Days 19 12
    ◦Key Interest coverage x 4.3 3.6

    Ratio Debt to equity ratio x 0.5 0.4

    Analysis Return on assets % 5.6 5.3


    Return on equity % 10.3 8.8
    Return on capital
    % 12.1 11.6
    employed
    RELIANCE INDUSTRIES
    CASH FLOW STATEMENT
    ANALYSIS
    RELIANCE INDUSTRIES Cash Flow Statement 2019-
    20
    No. of months 12 12
    Particulars % Change
    Year Ending Mar-19 Mar-20
    Cash Flow from
    Operating Rs m 423,460 980,740 131.6%
    Activities
    Cash Flow from
    Rs m -951,280 -757,170 -
    Investing Activities
    Cash Flow from
    Financing Rs m 559,060 -25,410 -
    Activities
    Net Cash Flow Rs m 37,450 198,390 429.7%
    CASH FLOW STATEMENT ANALYSIS
    • RELIANCE IND.'S CASH FLOW FROM OPERATING ACTIVITIES (CFO) DURING
    FY20 STOOD AT RS 981 BILLION, AN IMPROVEMENT OF 131.6% ON A YOY
    BASIS.
    • CASH FLOW FROM INVESTING ACTIVITIES (CFI) DURING FY20 STOOD AT RS
    -757 BILLION ON A YOY BASIS.
    • CASH FLOW FROM FINANCIAL ACTIVITIES (CFF) DURING FY20 STOOD AT
    RS -25 BILLION ON A YOY BASIS.
    • OVERALL, NET CASH FLOWS FOR THE COMPANY DURING FY20 STOOD AT
    RS 198 BILLION FROM THE RS 37 BILLION NET CASH FLOWS SEEN DURING
    FY19.
    THANKYOU

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