Girish B V, Final Project M.com (GB)

“A STUDY ON FINANCIAL POSTION AND OPERTIONAL
EFFICIENCY AT SRI SHARADA ENTERPRISES “

Dissertation submitted in partial fulfillment of the
requirements for the award of the Degree of
MASTER OF COMMERCE
of
BANGALORE UNIVERSITY
By
GIRISH B V
Reg. No. 20SLCOM007
Under the guidance of
Dr. M. Surekha
Professor
THE OXFORD COLLEGE OF BUSINESS MANAGEMENT

Bangalore University
2020-2022
College Letter Head
DEPARTMENT OF COMMERCE
Certificate
This is to Certify that, Mr. GIRISH B V bearing Reg.No 20SLCOM007 has Successfully
completed the Project entitled “A STUDY ON FINANCIAL POSTION AND
OPERTIONAL EFFICIENCY AT SRI SHARADA ENTERPRISES” under the guidance
of Dr. M. Surekha as the partial fulfilment of the requirements for the award of Master of
Commerce under Bangalore University for the Academic year 2021-2022.
Dr. M. Surekha
InternalGuide/ProgrammeManager HOD/Coordinator/Principal
DECLARATION
I hereby declare that “A STUDY ON FINANCIAL POSTION AND OPERTIONAL

EFFICIENCY AT SRI SHARADA ENTERPRISES” is the result of the project work
carried out by me under the guidance of Dr, Priyanka in partial fulfillment for the award of
Master’s Degree in Commerce by Bangalore University.
I also declare that this project is the outcome of my own efforts and that it has not been
submitted to any other university or Institute for the award of any other degree or Diploma or
Certificate.
Place: GIRISH B V
(STUDENT)
Date: Register Number: 20SLCOM007

CERTIFICATE
This is to certify that the dissertation titled “A STUDY ON FINANCIAL POSTION AND
OPERTIONAL EFFICIENCY AT SRI SHARADA ENTERPRISES” is an original work
of Mr. GIRISH B V bearing University Register Number 20SLCOM007 and is being
submitted in partial fulfillment for the award of the Master’s Degree in Commerce of
Bangalore University. The report has not been submitted earlier either to this University
/Institution for the fulfillment of the requirement of a course of study
DATE: Dr. M. Surekha
(GUIDE)
:
ACKNOWLEDGEMENT
The successful completion of any task would be incomplete without mentioning the people
who made it possible and whose constant guidance and encouragement secured us our
success.
I heart fully thank my guide, Dr. M. Surekha The Oxford College of Business Management,
who spared her valuable time and gave me practical suggestions and guidance throughout this
study.
I extend my gratitude to our Principal Dr. NIKITHA ALUR, The Oxford College of Business
Management for her kind of support and help for the study.
I would like to acknowledge my sincere gratitude for the constructive guidance and
encouragement I received from "The Oxford College of Business Management", affiliated
to Bangalore University throughout the completion of my study.
I again extend my gratitude to all my faculty members for their support throughout the
completion of the project.
GIRISH B V
REG NO. 20SLCOM007

TABLE OF CONTENTS
CHAPTER TITLE PAGE

NO.
Ⅰ INTRODUCTION 1-6
Ⅱ REVIEW OF LITERATURE 7-15
Ⅲ RESEARCH DESIGN 16-20
Ⅳ COMPANY PROFILE 21-51
Ⅴ DATA ANALYSIS 52-82
INTERPRETATION
Ⅵ FINDINGS, CONCLUSION AND 83-86
SUGGESTIONS
BIBLIOGRAPHY 87
LIST OF TABLES
Table TITLE OF CHARTS Page No.

No.
4.5.1 Retailing Outlets Of Petroleum In India As On 2022 28
5.1 Current Ratio Calculation 53
5.2 Liquid Ratio Calculation 55
5.3 Cash Ratio Calculation 57
5.4 Debt Equity Ratio Calculation 59
5.5 Proprietary Ratio Calculation 61
5.6 Net Profit Ratio Calculation 63
5.7 Net Operating Ratio Calculation 65
5.8 Return On Capital Employed Calculation 67
5.9 Return On Total Assets Calculation 69
5.10 Stock Turnover Ratio Calculation 71
5.11 Receivable Turnover Ratio Calculation 73
5.12 Fixed Assets Turnover Ratio Calculation 75
5.13 Working Capital Turnover Ratio Calculation 77
5.14 Balance Sheet Of IOCL 79-82

LIST OF GRAPHS
Graph TITLE OF GRAPHS Page no.

No.
4.5.1 Market Share Of Petroleum Public Sector Units As On 27
2022
4.5.2 Retailing Outlets Of Petroleum In India As On 2022 28
4.6.1 Pipelines Throughput 31
5.1 Current Ratio Chart 54
5.2 Liquid Ratio Chart 56
5.3 Cash Ratio Chart 58
5.4 Debt Equity Ratio Chart 60
5.5 Proprietary Ratio Chart 62
5.6 Net Profit Ratio Chart 64
5.7 Net Operating Ratio Chart 66
5.8 Return On Capital Employed Chart 68
5.9 Return On Total Assets Chart 70
5.10 Stock Turnover Ratio Chart 72
5.11 Receivable Turnover Ratio Chart 74
5.12 Fixed Assets Turnover Ratio Chart 76
5.13 Working Capital Turnover Ratio Chart 78

A STUDY ON FINANCIAL POSTION AND OPERTIONAL EFFICIENCY AT SRI SHARADA ENTERPRISES
CHAPTER 1
INTRODUCTION
THE OXFORD COLLEGE OF BUSINESS MANAGEMENT Page 1

1.1 INTRODUCTION OF THE STUDY.
Financial analysis is the art and science of examining and drawing inferences from the
financial statements. Financial analysis is also known as analysis and interpretation of
financial statements. It refers to the process of determining financial strengths and
weaknesses of the firm by studying the relationship between the items of balance sheet, profit
& loss account and the other operative data. Financial analysis is largely a study of
relationship among the various financial factors in a business as disclosed by a single set of
statements and a study of these factors as shown in a series of statements.
The financial analyst needs certain tools to be applied on various financial aspects. One of the
powerful and widely used tools is ratio. Ratios express the numerical relationship between
two or more related values. This relationship can be expressed as percentages, times or
proportion of numbers. Accounting ratios are used to describe significant relationships, which
exist between figures shown in a balance sheet, in a profit and loss account, in a budgetary
control system or in any other part of the accounting organization. Ratio analysis plays an
important role in determining the financial strengths and weaknesses of a company relative to
that of other companies in the same industry. The analysis also reveals whether the company’s
position has been improving or deteriorating over.

1.2 MEANING OF FINANCIAL POSITION AND OPERATIONAL

EFFICIENCY.
FINANCIAL POSITION:
Financial position is the current balances of the recorded assets, liabilities, and equity of an
organization. This information is recorded in the balance sheet, which is one of the financial
statements. The purpose of the statement of financial position is to present true information
about the company’s assets, liabilities, and equity. It helps to reveal the financial position of
the company as at a particular date.
OPERATIONAL EFFICIENCY:
Operational efficiency is a measurement of resource allocation and can be defined as the ratio
between an output gained from the business and an input to run a business operation. When
improving operational efficiency, the output to input ratio improves.
Operational efficiency is the ability of an organization to reduce waste in time, effort and
materials as much as possible, while still producing a high-quality service or product.
Financially, operational efficiency can be defined as the ratio between the input required to
keep the organization going and the output it provides. Input refers to what is put into a
business to operate properly, such as costs, employees and time while output refers to what is
put out or gained, such as rapid development times, quality, revenue, customer acquisition
and customer retention.

1.3 FEATURES OF FINANCIAL POSITION AND OPERATIONAL

EFFICIENCY.
FINANCIAL POSITION:
 They should convey full and accurate information about the performance, position,
progress and prospects of an enterprise.
 They should be prepared in a classified form so that a better and meaningful analysis could
be made.
 They should be easily comparable with previous statements or with those of similar
concerns or industry.
 The financial statements must have general acceptability and understanding.
 The financial statements should be prepared and presented at the right time.
 Optimal Resource Utilization.

 Improving Production Results.
 The Best Distribution Channels.
 Improving Inventory Management.
 Trade Channel Involvement.

1.4 ADVANTAGES OF FINANCIAL POSTION AND OPERATIONAL

EFFICIENCY.
FINANCIAL POSITION:
 Review of cash flow.

 Review of liability.
 Review of inventory and its movement.
 Identification of Trends.
 Preparation of budget.
 Retaining customers in a digital world means that servicing operations must be
streamlined and responsive to their digital interactions.
 Decrease the risk of noncompliance with an easy-to-access repository of rules that are
shared with all authorized personnel.
 Low-risk, high-volume decisions are often the first to be automated via straight-through
processing, removing the cost of manual interception and freeing workers for sales and
advisory services.
 Keeping business operation policies, processes, and procedures up to date with
regulations, technology advancements, and customer and market changes requires
adaptable systems.
 Creating efficiency in servicing lowers the associated product costs. This includes
streamlining operational processing with automation, as well as running digital services
in lower-cost cloud computing environments.

1.5 DISADVANTAGES OF FINANCIAL POSITION AND OPERATION

EFFICIENCCY .
FINANCIAL POSITION:
 Financial Statements Are Derived from Historical Costs.
 Financial Statements Are Not Adjusted for Inflation If the inflation.
 Financial Statements Do Not Contain Some Intangible Assets.
 Financial Statements Only Cover a Specific Period of Time.
 Financial Statements May Not Be Comparable.
 Financial Statements Could be Wrong Due to Fraud.
 Financial Statements Do Not Cover Non-Financial Issues.
 Financial Statements May Not Have Been Verified.
 Financial Statements Have No Predictive Value.
OPERATIONAL EFFICIENCY.
 Heavy reliance on efficient management processes is completely understandable.
 Managers should see big data and advanced analytics as tools that can make them not only
more efficient, but also more agile.
 Efficient supply chains risk leaving little room to react to unexpected variations in
consumer demand, resulting in stock-outs.
 Efficiency leads to a routinization of processes and necessitates a focus on constant, but
incremental, improvements in operations.
 Most importantly, too much of it can lower operational flexibility for organizations.

CHAPTER 2
REVIEW OF LITERATURE

REVIEW OF LITERATURE :
Using financial statements to communicate financial information about a company is One of
the most effective methods of communicating financial information. Accounting information
systems must thus record and summarize financial data. However, no matter how
professionally produced and presented, financial statements Must be studied and understood
in order to uncover the realities concealed within Them and to improve decision-making
capabilities. In an unusual twist, ratios and Comparisons may be used to perform this type of
evaluation and interpretation. This Section will examine expert opinions on the role of ratio
analysis, working capital Management in business decisions, with specific emphasis on
financial statement Analysis.
“Financial analysis relies substantially on informed judgement,” Hermanson (1992:846).
Percentages and ratios help compare and identify possible strengths and Shortcomings.
Finance should investigate the fundamental causes of changes and Established trends. C.
Gohil (2006) has attempted to study the financial Performance of two major entities in the
petroleum industry namely IOCL and BPCL By trying to analyze the assets and liabilities.
Burange and Shruti Yamini (2009) Analyzed the performance of Indian Cement Industry
and also the experience of the Boom on the account of overall growth of Indian Economy by
the cement industry Considering the expansion of investment and industrial activity in the
cement sector.
Robert O. Edmister (2009) : conducted a research on “An Empirical Test of Financial Ratio
analysis for Small Business Failure”. This study developed and empirically tested a number
of methods for analyzing financial ratios to predict the failure of small business.
Prasanta Paul (2011): stated on the financial performance evaluation considering some of
the selected NBFCs. In the study, five of the listed NBFCs are considered for the analyzation
of comparative financial performance. Different type of statistical tools like standard
deviation, arithmetic mean, correlation etc. are used extensively.

Amalendu Bhunia (2010): conducted a financial performance study of a pharmaceutical firm

in order to understand how the management of finance plays a critical role in the success of
the organization. The research was carried out over a twelve-year period, beginning in 1997-
98 and concluding in 2008-09. Sheela Christina (2011) reported on “Financial Performance
of Wheels India Ltd”. Secondary data collection method is used for the analytical type of
research design. Before conducting the study, validity and reliability is checked for the past
five years.
Ghosh Santanu Kumar and Mondal Amitava (2009): conducted a study on the link
between intellectual capital and financial performance in 70 Indian banks during a ten-year
period from 1999 to 2008. The return on equity, return on assets, and assets turnover ratio of
Indian banks were the financial performance metrics that were employed in this research.
There was a big research on corporate planning in the Fortune 500 manufacturing businesses
that was omitted from a meta-analysis published by Noel Capon et al (1994) on the influence
of strategic planning on financial results. Finally, the findings revealed that there is a slight
but significant positive association between strategic planning and performance, as
demonstrated by the data.
Hemant Saikia (2012): made an attempt that efficient performance is the most important
requirement for the development of an industry which can boost industrial growth in an
economy. He stated that financial performance is considered for the application of a
technology. He concluded his study by stating that a policy regime that corrects the structural
imbalance in Assam can create a better environment for the development of small-scale
industries in Assam.
Robinson et al., (2015): stated that deficit in liquidity may lead to a decline in the company’s
energy thereby affecting the profitability. Thus, a high current ratio is always good indicating
adequate liquidity and safety for assets financed by short-term debts.

Sinha, (2012): expressed that a high quick ratio reflects high liquidity of the company since
this ratio considers only most liquid assets by excluding prepaid expenses and inventories
from total current assets.
According to Shin (2007), in a tumultuous economic environment, liquidity position is critical
since any changes will result in changes in the banking network. The Basel Committee (2008)
said that the liquidity level of commercial banks is critical to their long-term viability, and
that the bank's main internal mission is to assure cash flow stability.
Morar,Adrian (2009): highlighted that Banks require liquidity to compensate for anticipated
or unanticipated balance sheet variations and to provide the required assets for development.
Liquidity refers to a bank's ability to deal effectively with deposit withdrawals and other due
obligations, as well as the additional funding required for loans and investment portfolios.
When a bank can access the required cash quickly and at a fair price (by raising debts,
bonding, or selling assets), it has appropriate liquidity potential. The price of liquidity is
determined by market conditions and market perceptions of the debtor's risk level.
Batrancea and Loan (2009): Liquidity management is one of the issues that have arisen
since the start of the financial crisis. That is why we feel it is critical for each organization to
have its own liquidity analysis methods with the goal of avoiding insolvency at any time. The
research that we give is a guide to analyzing the liquidity status and preventing liquidity risk.
We discuss the following topics: the idea of liquidity, liquidity administration, liquidity risk
management, liquidity indicators, and techniques for assessing liquidity risk.
Hiadlovský et al., (2016): investigated the use of liquidity analysis in the financial
management of tourist enterprises in Slovakia. The findings show a weak to moderate
association between chosen liquidity and profitability parameters from 2011 to 2014. The
appropriate management of liquidity, which reflects one aspect of business success, may help
firms attain greatness.

Billah et al. (2015): studied the liquidity of Malaysian listed businesses. This research
compared the application of cash flow measures to traditional liquidity ratios. Between these
two ratios, there was a statistically significant difference. Cash flow ratios supplemented
standard ratios in this study. Thus, it is advised to employ both types of ratios simultaneously
when assessing a firm's financial health. "Liquidity" is defined as a company's capacity to
satisfy its financial commitments when they become due, according to Dansby (2000:826).
Needles (1996:787), on the other hand, defines liquidity as "a company's capacity to pay
payments on time and satisfy unforeseen financial demands."
M Kumbirai, R Webb (2010): conducted a financial ratio study of the performance of

commercial banks in South Africa. This report examined the performance of the commercial
banking industry in South Africa over the five-year period 2005-2009. Financial ratios are
used to assess the liquidity, profitability, and credit quality of South Africa's five largest
commercial banks.
Lartey, et al, (2013): conducted an investigation on the relationship between liquidity ratios
and financial performance. The results showed a reduction in the liquidity and profitability
ratios of publicly traded banks, it also demonstrated that there is only a modest positive
association between liquidity and profitability in the banking industry.
(Durrah et al., 2016): found that the liquidity rate in food industrial enterprises listed on the
Amman stock exchange varies from year to year (2012-2014). In a same vein, the profitability
rate of food industrial enterprises listed on the Amman stock exchange increases from year to
year (2012-2014). All liquidity ratios (current ratio, quick ratio, cash ratio, and defensive
interval ratio) and gross profit margin were shown to have no association, according to the
findings of the study. While there is a mild positive association between the current ratio and
each operational profit margin and net profit margin, there is a strong positive relationship
between the current ratio and net profit margin.

Angamuthu & Sivanandam (2012): they evaluate the long- and short-term solvency of
cement companies between 2000-01 and 2009-10. The investigation shows that most cement
production companies are not at risk of insolvency in meeting long-term commitments. A
considerable reduction in short-term solvency level is observed for the majority of the firms
as well as for all chosen enterprises when pooled together. Overall, this analysis predicts
strong long-term solvency and enhanced short-term solvency for cement firms.
Puriboriboon (2020): examines the relationship between working capital (Cash Conversion
Cycle and Quick ratio) and profitability as measured by Return on Assets (ROA) and Return
on Equity (ROE), as well as the relationship between working capital and market value as
measured by Price Earnings ratio (P/E) and Price per Book Value ratio (P/BV). The fast ratio
has a large positive association with ROA, indicating that a firm with a high working capital
requirement is also highly liquid. CCC also has a big impact on ROE, which means that the
business has a short CCC, which will make the company more profitable. CCC also has a
negative relationship with P/BV and P/E, which means that when a business has a shorter
CCC, it makes the P/BV go up, which makes the P/E go down. In the same way that sales
growth makes P/E go up, so does P/E.
Mabandla and Makoni (2019): studied the association between working capital
management and firm financial performance using a sample of 12 of the 18 food and beverage
companies listed on the Johannesburg Stock Exchange (JSE) in South Africa from 2007 to
2016. The dependent variable in their study was return on assets (ROA), whereas the
independent variables were inventory conversion period (ICP), average collection period
(ACP), and average payment period (APP), with the company's size, the current ratio (CAR),
and the GDP serving as control variables. The output indicates a positive association between
return on assets (ROA) and inventory conversion period (ICP), implying that the firms' assets
and goods are sold at a high rate. Furthermore, the average payment period (APP) has a high
positive return on assets (ROA), showing that the longer it takes for businesses to pay their
obligations, the more lucrative they are. The average collection period (ACP) and return on
assets (ROA) have a negative connection, meaning that firms have a limited time to recover
cash from clients.

Toan, Nhan, Anh, and Man (2017): chose 34 of the 53 construction businesses listed on the
Vietnam Stock Exchange to study the relationship between Working Capital Management
and Profitability: Evidence in Vietnam. They chose among 306 financial reports that were
made public between December 31, 2015 and January 1, 2007. Accounts receivable period
(ARP), accounts inventory period (AIP), accounts payable period (APP), and cash conversion
cycle (CCC) all have considerable negative effects on profitability, according to the research.
Financial debt ratios (FD) on the other hand, have a large positive relationship with a
company's profitability, which implies that as a company's leverage increases, so does its
profit. Furthermore, the sales growth coefficient (Growth) is highly positive. To put it another
way, as an organization's income grows, so does its profit. There is a lot of research about the
relationship between Working Capital Management and Profitability.
Iqbal, Ahmad, and Riaz (2014) examined the link between Working Capital Management
and Profitability by examining 50 financial reports of businesses listed on the Karachi Stock
Exchange (KSE) from 1 January 2009 to 31 December 2009. They utilised gross operating
profit as the dependent variable and days accounts receivable, days accounts payable, days
inventory, Cash Conversion Cycle (CCC), debt ratio, and fixed financial assets ratio as the
independent variables. Iqbal, Ahmad, and Riaz discovered a substantial negative association
between net operational profitability and days of accounts receivable, days of accounts
payable, days of inventory, and CCC in a sample of Pakistani listed firms on the KSE. So,
they came to the conclusion that WCM has a big impact on the profitability of the sample
businesses on the KSE and is critical for shareholder value creation.
Ghodrati and Ghanbari (2014): looked at the link between working capital and profitability
for 68 Tehran Stock Exchange companies whose financial results were picked from 2008 to
2013. The relationship between the independent and dependent variables was investigated
using linear regression. They utilised operational profit (NOP) as the dependent variable for
the model study, while the independent variables were receivable accounts period (ACP),
inventory flow (ITID), operation cycle (CCC), and debit payment period (APP). NOP is
incompatible with ACP, ITID, and CCC, according to the findings of this study. In other
words, increasing ACP, ITID, and CCC lowers NOP.

The NOP and payable accounts period, on the other hand, have a positive association. The
operating profit will rise if the payable accounts period is lengthened.
Deloof (2003): examined the relationship between WCM and corporate profitability in a
sample of 1,009 large Belgian non-financial companies, between 1992 and 1996. The
correlation and regression analysis approaches are used in the research. The results
highlighted that there is a considerable negative association between the Belgian company's
total operating income and accounts receivable, accounts payable, and inventory turnover
days. As a result, the corporation must minimize the number of days it takes to collect
accounts receivable and inventory to a manageable quantity. Moreover, accounts payable and
earnings have an inverse connection.
Ponsian, Chrispina, Tago, and Mkiibi (2014): studied the influence of working capital
management (WCM) on profitability in 30 manufacturing businesses listed on the Dar es
Salaam Stock Exchange (DSE) from 2002 to 2012. The link and magnitude of the influence
of WCM factors on profitability are investigated using regression analysis, specifically
Ordinary Least Squares (OLS). The regression results show that the ACP coefficient and the
company's profitability are negative when the gross operating profitability (GOP) is the
dependent variable and the average collection period (ACP), inventory turnover days (ITD),
average payment period (APP), and cash conversion cycle (CCC) are the independent
variables. The average payment cycle is favorably connected with the firm's profitability since
APP's company profit coefficient is positive. The company's profitability has improved as the
payment time has been extended. Furthermore, regression shows that CCC and operating
profitability are positively connected, but ITD is adversely correlated with profitability.

Viral & Viswanath (2011): indicating that as a result of risk shifting and limited debt rollover
capacity, financial corporations raise short-term debt to fund asset acquisitions. Leveraged
businesses sell assets to less leveraged enterprises to deleverage. Furthermore, asset–market
liquidity is endogenous to the system-wide distribution of leverage. Less expensive short-term
finance encourages more leveraged enterprises to enter. Deleveraging and rapid market and
financing liquidity drying up are the results of unfavorable asset shocks in good times. This
is because profitability ratios show a firm's capacity to make money based on sales, assets, or
equity (capital) invested. They are usually expressed as %. It reveals management's capacity
to handle revenue, cost, and expense issues (Lasher 1997:76).

CHAPTER 3
RESEARCH DESIGN

3.1 TITLE OF THE STUDY:

“A STUDY ON FINANCIAL POSITION AND OPERATIONAL EFFICIENCY AT SRI
SHARADA ENTERPRISES”
3.2 STATEMENT OF THE PROBLEM.

Financial performance analysis is the process of determining the operation and financial
characteristics of an Indian Oil Corporation Limited from accounting and financial
statements. The study is to determine the efficiency and performance of firm’s management,
as reflected in the financial records. The study has undertaken to analyze the financial
performance of Indian Oil Corporation limited with a view to understand how management
of finance plays a crucial role in the growth.
3.3 OBJECTIVES OF THE STUDY.

The main objectives of the present work are to make a study on the overall financial
performance of selected public sector drug &pharmaceutical enterprises in India. More
specifically, it seeks to dwell upon mainly
 To study the profitability performance of Indian oil corporation limited

 To analyse the short term and long financial position of Indian oil corporation limited
 To evaluate the operational efficiency of Indian oil corporation limited in terms of
efficiency ratios.

3.4 SCOPE OF THE STUDY:

 The scope of the study is limited to Sri Sharada Enterprises (IOCL) only.
 The study is limited for 4 years i.e., 2018-2022.
 The analysis is based on the data is provided by the company annual reports & all so
available external source.
3.5 METHODOLOGY:
The time period of the present research work will be limited to Four years only starting from
2018-19 to 2021-22. Indian Oil Corporation Limited was considered for the Present research
work
SAMPLE METHOD: For the purpose of the study, researcher has selected top performing
oil and Gas companies of India. i.e INDIAN OIL CORPORATION LIMITED.
DATA COLLECTION:
A. primary data
Data that has been generated by the researcher himself , that The data collection form the
following sources are:
 Financial institutions
 Articles
 Case study
 Financial records
 Annual reports

B. Secondary data .
It means the data is already available i.e. the data which have been already collected and
analyzed by someone else .
 Company website
 Internet portals.
Plan of Analysis:
Since the project work is done in the area of finance, most of the applied are tools of financial
analysis. Statistical tools such as regression, trend line graphs and charts are also used for
analysis. The tools of financial analysis such as.
 Ratio analysis.
3.6 OPERATIONAL DEFINATIONS OF THE CONCEPTS:
FINANCIAL POSITION: Financial position is the current balances of the recorded assets,
liabilities, and equity of an organization. This information is recorded in the balance sheet,
which is one of the financial statements.
OPERATIONAL EFFICIENCY: Operational efficiency measures the proportion of costs

incurred during an economic or financial activity, where lower costs equate with greater
efficiency.

3.7 LIMITATIONS OF THE STUDY :

 The study can also not be generalized for public & private companies in the country.
 The study is conducted only on Indian oil corporation limited shares.
 Financial performance is based on chronological( historical) data.
 The phase of the study is leased for 10 weeks it constraint.
3.8 CHAPTER SCHEME:
Chapter -1: Introduction.

Chapter -2: Review of literature.
Chapter -3: Research design. This chapter includes a brief introduction to the subject,
statement of the problem, Scope of the study, objectives of the study, operational definition
of the concepts, Methodology, tools and techniques used for data collection, plan of analysis,
Limitations and an overview of chapter scheme.
Chapter -4: Company Profile. This chapter includes a history of India oil corporation
limited and their vision, mission, and Values.
Chapter -5 : Data Analysis and interpretation. Deals with analysis of the Short-term and
long-term solvency position of Indian Oil Corporation limited.
Chapter -6 : Findings, Conclusion and suggestions. Deals with findings and suggestions
that will allow us to understand the Real financial position of both firms and will assist both
companies in filling up the Gaps, as needed.
Bibliography.

CHAPTER 4
COMPANY PROFILE

4.1 HISTORICAL BACKGROUND:

Indian Oil Corporation Limited (IOCL), sometimes known as Indian Oil, is a Government-
owned corporation in India. It is owned by the Ministry of Petroleum and Natural Gas of the
Government of India, and is based in New Delhi. Indian Oil Corporation Ltd. (Indian Oil)
was created in 1964 when Indian Oil Company Ltd.
(Estd. 1959) and Indian Refineries Ltd. Merged to become Indian Oil Corporation Ltd.
(Indian Oil) (Estd.1958). As of 2021, the government firm is placed 212nd on Fortune’s
Global 500 list of the world’s largest enterprises. With a net profit of $6.1 Billion for the fiscal
year 2020-21, it is the country’s largest government-owned oil Firm. Indian Oil has 31,648
employees as of March 31, 2021, with 17,762 executives And 13,876 non-executives, and
2,775 women, accounting for 8.77 percent of the overall workforce. Indian Oil controls over
half of the Indian petroleum products market, 35 percent of national refining capacity (via its
subsidiary Chennai Petroleum Corporation Ltd., or CPCL), and 71 percent of downstream
sector pipeline capacity. The Indian Oil Group owns and runs 11 of India's 23 refineries,
totaling 80.7 million tones per year of refining capacity.
Petroleum is one of the versatile energy sources available in the world. The petroleum
Industry in India is considered to be the wheel of the economy as it is inevitably linked with
All the other industrial sectors. Petroleum is importer for industry, infrastructure and the
Economy as a whole. The Indian Petroleum industry is one of the largest sources of energy
for the Indian Industry and public in general .The production, availability and prices of petro-
products tend To impact many aspects of the economy. One of the major Maharatna enterprise
in PSU’s is Indian Oil Corporation Limited (IOCL) which is the largest commercial enterprise
of India and the top ranked Indian Company in Fortune ‘Global 500’ list. The corporation is
ranked 137th in the Fortune Global 500’ listings for 2018. Indian Oil, with its 33,125
multitalented and dedicated Indian Oil people, strong team is taking the lead to meet India’s
energy demands efficiently And effectively, since last five decades, and an enterprise that
fulfils India’s energy demand For inclusive development.

Indian Oil’s business interests extend across the entire hydrocarbon value chain – from
Exploration & production, refining, pipeline transportation to marketing of petroleum and
Petrochemical products besides foraying into alternate energy. Indian Oil is headquartered in
New Delhi and works relentlessly with its subsidiaries. Indian Oil is pursuing diverse
Business interests with its 15 joint ventures with reputed business partners from India and
Fulfilling global aspirations through its subsidiaries in Sri Lanka, Mauritius, the UAE,
Sweden, the USA, Singapore and the Netherlands.
The corporation has also opened New overseas offices in Yangon, Myanmar and Dhaka,
Bangladesh towards expanding Marketing of finished petroleum products, Petrochemicals,
Lubricants etc. in the neighboring Countries as well as development of infrastructure Indian
Oil Corporation Limited (IOC) is a national oil company with an 82 per cent Government
holding. Its operations range from refining of crude oil and LPG distribution to Marketing of
petrol-products. It is also the biggest company in the oil and gas sector in terms Of revenues.
IOC has 41 per cent of the national refining capacity. It has nine refineries Including two
subsidiary refineries – Bongaigaon Refineries and Petrochemicals Limited and Chennai
Petroleum Corporation Limited. The IOC Group refineries achieved a record crude Oil
throughput of 43.39 million metric tones during 2002-03.
The company’s total pipeline network stands at 7,170 km accounting for 76 percent market
Share with a combined capacity of 43.45 million metric tones per annum. It has an Extensive
marketing infrastructure with over 22,000 selling points, around 8,100 retail fuel Pumps,
3,900 LPG distributors, 3,500 kerosene distributors, and 95 aviation fuel stations. Indian Oil’s
activities are backed by its “Research and Development Centre”, the first Such center
established in India. Indian Oil also has four overseas offices in Kuwait, Kualalumpur, Dubai
and Mauritius. As the premier National Oil Company, the company’s Endeavor is to serve the
national economy and the people of India. IOC has a “vision beyond Tomorrow” – of
becoming an integrated and diversified “Global Energy Corporation”.

4.2 COMPANY OVERVIEW OF IOCL:

4.3 MARKET SIZE :

India is expected to be one of the largest contributors to non-OECD petroleum consumption
growth globally. Total Oil imports declined by 10 percent year-on year in February 2017.
Fuel consumption in India increased by 10.7 percent to a 16-year high of 196.48 million tones
(MT) in 2016. 1 India is the fourth largest Liquefied Natural Gas (LNG) importer after Japan,
South Korea and China, and accounts for 5.8 percent of the total global trade.
3 Domestic LNG demand is expected to grow at a CAGR of 16.89 percent to 306.54

MMSCMD by 2021 from 64 MMSCMD in 2015. The country’s Gas production is expected
to touch 90 Billion Cubic Meters (BCM) in 2040 from 23.09 BCM in FY 2019-20 (till
December 2016). Gas pipeline infrastructure in the country stood at 15,808 km in December
2015.
State owned Oil and Natural Gas Corporation (ONGC) dominates the upstream segment
(exploration and production), producing around 25.93 MT of crude Oil, which is
approximately 60.5 percent of the country’s 36.95 MT Oil output, as of March 2016.
4.4 INVESTMENT:
According to data released by the Department of Industrial Policy and Promotion (DIPP), the
petroleum and natural Gas sector attracted FDI worth US$6.8 billion between April 2000 and
December 2016.
Following are some of the major investments and developments in the Oil and Gas sector:
Indian Oil Corporation (IOC) plans to invest around R$40,000 crore (US$5.9 billion) to set
up a 15 million tone (MT) refinery at Nagapattinam in Tamil Nadu.

ONGC has signed an agreement with the Government of Andhra Pradesh to Invest around
Rs78,000 crore (US$11.7 billion) in the Krishna Godavari basin For producing hydrocarbons
by FY 2021-22.Honeywell International Includes, the US-based technology firm, plans to
double The Headcount at its Indian petroleum and polymer arm, Honeywell UOP, to 700, In
order to tap opportunities from India’s massive refinery up gradation Programme and
petrochemical capacity expansion.
Investments in India’s Oil and Gas sector will likely touch Rs2.5-3 trillion (US $37.5-45
billion) over the next few years, which will help raise the share of Gas in the country’s primary
energy mix to15 percent by 2030, as per British multinational Oil and Gas company BP
Group. ONGC has launched a start-up fund of Rs 100 crore (US $15 million) on its Diamond
Jubilee year to encourage and promote new ideas related to Oil and Gas sector, thereby giving
a fillip to Government’s Start-up India initiative.
Yara International ASA, a Norwegian chemical company, plans to acquire Tata Chemicals
Limited’s Babrala urea plant and distribution business in Uttar Pradesh for about Rs2,670
crore (US $400.5 million), on a debt and cash free basis. One of the world’s largest recyclers
of reforming catalyst, has opened a new facility at Udaipur which will allow companies to
benefit from less transport costs, easier file processing, faster recycling times, better
transparency and over all improved costing for catalyst recycling in the country. State-run
Indian Oil Corporation Ltd (IOCL) plans to invest Rs34,000 crore (US $5.1 billion) on a
petrochemical complex at Paradeep in the state of Odisha, which is expected to be
commissioned by 2021.

4.5 MARKET SHARE.

State-owned oil companies dominate the marketing of petroleum products in India
today. Their market share as on 31st March 2018for Indian Oil Corporation is 42 %, Bharat
Petroleum Corporation 19%, Hindustan Petroleum Corporation 19%, Reliance Industries 14
% and Essar Oil 6% approximately on total petroleum products basis.
Graph 4.5.1 : Market Share of Petro Public Sector Units as on 2022.
45
40
35
30
25
20
15
10
0
IOCL BPCL HPCL RIL ESSAR OIL
MARKET SHARE
Coming to the petro retail outlets India had 58,617 petrol pumps as of January. IOCL
operates the maximum 26,752 pumps, HPCL has 14,853 and BPCL 14,293 pumps

Table 4.5.1 : Retailing outlets of Petroleum companies in India as on 2022
Name of the No of Retail Percentage

Company Outlets
IOCL 26,752 45.63
BPCL 14,293 24.38
HPCL 14,583 24.87
Reliance 1429 2.43

Industries
Essar Oil 1391 2.37
Shell 94 0.16
Others 75 0.12
Total 58617 100.00
Graph 4.5.2: Retailing Outlets of Petroleum Companies as on 2022.
PERCENTAGE
0%
3% 2%
25%
46%
24%
IOCL BPCL HPCL RELIANCE INDUSTRIES ESSAR OIL SHELL OTHERS

4.6 PIPELINES
There are two main categories of pipelines used to transport energy products worldwidei.e.
i. Petroleum Pipelines – They transport crude or natural gas liquids, and there are three main
types of petroleum pipelines involved in this process: gathering systems, crude oil pipelines,
and refined products pipelines systems. The gathering pipeline systems to a refinery. Once
the petroleum is refined into product such as gasoline or kerosene,it is transported via the
refined products pipeline systems to storage or distribution stations.
ii. Natural Gas Pipelines – These Natural gas pipelines transport natural gas from stationary
facilities such as gas wells or import/export facilities, and deliver to a
variety of locations, such as homes or directly to other export facilities. This processalso
involves three different types of pipelines: gathering systems, transmission systems, and
distribution systems. Similar to the petroleum gathering systems, the
natural gas gathering pipeline system gathers the raw material from production wells.It is
then transported with large lines of transmission pipelines that move natural gas from
facilities to ports, refiners, and cities across the country. Lastly, the distribution systems
consist of a network that distributes the product to homes and businesses.
The two types of distribution systems are the main distribution line, which are largerlines
that move products close to cities, and the service distribution lines, which are smaller lines
that connect main lines into homes and businesses.
Indian Oil spearheaded the operations of multi-product petroleum pipeline in India and
continues to be the leader in the downstream sector. The year 2020-21 has been an
eventful year for Pipelines Division with remarkable achievements in operations, projects
and overall business profitability. Indian Oil pipeline network stood at 13,391km with a
throughput capacity of 94.79 MMTPA of liquid pipeline network and 9.5 MMSCMD of gas
pipeline network as on 31st march 2018. During 2020-21, pipeline network has achieved the
highest ever throughput of 85.68 Million Metric Tonne (MMT), which is around 4% more
than the previous highest achieved in 2019-20.

Growth of Pipeline Network (Length in km)
13,391
2021-22
12,848
2020-21
11,746
2019-20

Graph 4.6.1 Pipelines Throughput (MMT)
85.68
82.49
79.82
2019-20 2020-21 2021-22
4.7 ECONOMIC PERFORMANCE.

Indian Oil accounts for nearly half of India's petroleum products market share. Over 35%
national refining capacity and 71% downstream sector pipelines throughput capacity are
with Indian Oil.
Indian Oil reported a sales turnover of 5, 06,428 Crore and, net profit of 21,346 Crore during
2020-21 making it the India’s most profitable Public Sector Undertaking. A contribution of
1, 90,670 Crore was made towards the government exchequer. Indian Oil received a grant of
6,757.73 Crore from the Government of India during the year 2020-21.

4.8 BUSINESS DIVISIONS:

There are 7 major Business Divisions in the organization:
 Refineries Division.
 Pipelines Division.
 Marketing Division.
 R&D Division.
 Petrochemicals Division.
 Exploration & Production (E&P) Division.
 Explosives and Cryogenics Division.
4.9 OPERATING STRUCTURE OF IOCL :
Figure 4.9.1 operating structure of IOCL.

4.10 PRODUCTS :
Indian Oil produces variety of lubricants which includes Automotive, Industrial and many
other Specialty products. Here, we shall concentrate on Automotive Lubricating Oils. A list
of such automotive grades of Servo Lubricants is given below:
DIESEL ENGINE OIL:

 SERVO PRIDE TC 15W-40 SERVO PRIDE XL 15W-40.
 SERVO PRIDE SERIES.
 SERVO SUPER PLUS 20W-40.
 SERVO PRIDE ALT 15W-40.
 SERVO CKD SKODA GENUINE DG SET OIL.
 SERVO SKODA GENUINE OIL HD.
 SERVO SKODA GENUINE OIL XHD SERVO ULTRA 40RR.
 SERVO ULTRA 10W.
 SERVO ULTRA KB 10.
 HYUNDAI SERVO CRDI ENGINE OIL SERVO PREMIUM 20W-4.
 SERVO PREMIUM CF-4 15W-40).
 SERVO PREMIUM XHP 15W-40.
 SERVO PREMMIUM (N) 15W-40.
 SERVO PRIDE XL 15W-40.
 SERVO PRIDE SUPREME 15W-40
 SERVO PRIDE SUPREME PLUS.
 SERVO PRIDE MAX.

PASSENGER CAR MOTOR OIL:

 SERVO SUPER MG 5W-301
 SERVO SUPERIOR 10W-30 SERVO SUPERIOR 10W-40
 SERVO SUPERIOR 20W-40
 SERVO SUPERIOR 20W-50
 MARUTI GENUINE OIL
 SERVO SUPERIOR XEE 10W-30
 HYUNDAI SERVO ENGINE OIL
 SERVO XEE SJ 10W-30
 SERVO XEE SJ LOW-40
 SERVO SYNTH SJ 5W-40
 LANCER ENGINE OIL
 SERVO FUTURA P 10W-30
UNIVERSAL TRACTOR OIL :

 SERVO TRACTOR OIL 20W-40

SUPER TRACTOR OIL UNIVERSAL (STOU) :

 SERVO UNITRAC 30
 SERVO UNITRAC 15W-30
UNIVERSAL TRACTOR TRANSMISSION OIL (UTTO) :

 SERVO TRANSTRAC 30
BOAT ENGINE OIL :

 SERVO BOAT ENGINE OIL 20W-40
FOUR STROKE 2/3 WHEELER OILS :

 SERVO 4T 20W-40
 SERVO 4T 20W-50
 SERVO 4T ZOOM
TWO STROKE 2/3 WHEELER OILS :

 SERVO 2T SUPREME
 KINETIC ULTRA 2T OIL
 SERVO LML 2T OIL
 SERVO 2W GEAR OIL
GAS ENGINE OIL :

 SERVO SPECIAL NG 40
 SERVO NG 40
 SERVO NG 15W-40
 SEERVO GAS ENGINE OIL
 SERVO PRIDE GEO 15W-40
 SERVO PRIDE GEO 20W-50

PRESERVATIVE-CUM-RUNNING-IN OILS :
 SERVO REO 30
 SERVO REO 40
 SERVO PRESERVE 30
 SERVO GUARD 30
GEAR OIL:
 SERVO GEAR HP 8OW
 SERVO GEAR HP 80W-90
 SERVO GEAR HP 90
 SERVO GEAR HP 140
 SERVO GEAR HP 80W (T)
 SERVO GEAR HP 90 (T)
 SERVO GEAR HP 140(T)
 SERVO GEAR HP ALFA 80W-90
 HYUNDAI SERVO GEAR OIL
 SERVO TRANSUNO 80W-90
 SERVO GEAR SUPER SOW
 SERVO GEAR SUPER 80W-90
 SERVO GEAR SUPER 90
 SERVO GEAR SUPER 1401
 SERVO GEAR SUPER 90(T)
 SERVO GEAR SUPER 140T)
 SERVO GEAR SUPER LS 90

 SERVO GEAR SUPER 80W-90(T)

 SERVO GEAR SUPER 85W-140(T)
 SERVO GEAR AXLE 85W-140
 SERVO SYNCHRO 80W-90
AUTOMATIC TRANSMISSION FLUIDS :

 SERVO TRANSFLUID A
 SERVO TRANSMISSION FLUID 10
 SERVO TRANSDEX II
 SERVO TRANSDEX III
 HYUNDAI SERVO STEERING OIL
 SERVO TRANSMISSION C4 SAE 10W
 SERVO TRANSMISSION C4 SAE 30
 SERVO TRANSCLEAN C4 SAE 30
 SERVO TRANSMISSION C4-TO 4
 SERVO TRANSMISSION T 20
 SERVO TRANSMISSION T 30
 SERVO TORQUE 10
BRAKE FLUID:
 SERVO BRAKE FLUID SUPER HD
 SERVO BREAK FLUID DOT 3 PLUS
 SERVO BREAK FLUID DOT 4 PLUS
 HYUNDAI SERVO BRAKE OIL
 LANCER BRAKE OIL

RADIATOR COOLANT :
 SERVOKOOL PLUS
 SERVOKOOL BLUE
 HYUNDAI SERVO COOLANT
 LANCER COOLANT
 SERVOKOOL ST
 SERVO KOOL READY
SHOCK ABSORBER OIL :

 SERVO SHOCSTAL SERVO SHOCARM
 SERVO SHOCAB
 SERVO SHOCAB LIGHT
 SERVO TELESHOCAB
 SERVO SHOCAB ES
 SERVO SHOCAB KB
 SERVO SHOCSHOWA
 SERVO SHOCSHOWAR
CALIBRATION FLUID:
 SERVO CALIB 2
 SERVO CALIB 5
RAIL ROAD OIL :

 SERVO RR 407 SERVO RR 408
 SERVO RR 606 MG
 SERVO RR 501 MG
 SERVO RR 520 MG

RAIL FLANGE LUBRICANT :

 SERVO FLANGE 250
 SERVO GREASE C SERVO GREASE WB
 SERVO GREASE MP
 SERVO GREASE MP3
 SERVO GREASE MOLEX SERVO CVJ
 SERVO GEM RR 3
 SERVO GREASE RR 1
 SERVO RR 3M
 SERVOPLEX TM 3
 SERVOPLEX 3M
 SERVOGREASE GRAPHITED 4080
4.11 OBJECTIVES OF THE IOCL :

IOCL is required to fulfill financial and economical Objectives by a Public
Enterprise. Various important objectives are as follows:-
 To serve the national interests in oil and related sectors ·in accordance and Consistent with
Government policies.
 To ensure maintenance of continuous and smooth supplies of petroleum Products by way
of crude oil refining, transportation and marketing activities And to provide appropriate
assistance to consumers to conserve and use Petroleum products efficiently.
 To enhance the country’s self-sufficiency in crude oil refining and build Expertise in lying
of crude oil and petroleum product pipelines.
 To further enhance marketing infrastructure and reseller network for Providing assured
service to customers throughout the country.
 To create a strong research & development base in refinery processes, Product
formulations, pipeline transportation and alternative fuels with a View to
minimizing/eliminating imports and to have next generation Products.

 To optimize utilization of refining capacity and maximize distillate yield And gross
refining margin.
 To maximize utilization of the existing facilities for improving efficiency And increasing
productivity.
 To minimize fuel consumption and hydrocarbon loss in refineries and Stock loss in
marketing operations to effect energy conservation.
 To earn a reasonable rate of return on investment.
 To avail of all viable opportunities, both national and global, arising out Of the
Government of India’s policy of liberalization and reforms.
 To achieve higher growth through mergers, acquisitions, integration and Diversification
by harnessing new business opportunities in oil exploration & Production, petrochemicals,
natural gas and downstream opportunities Overseas.
 To inculcate strong ‘core values’ among the employees and continuously update skill sets
for full exploitation of the new business opportunities.

4.12 VISION AND MISSION OF IOCL :
VISION:

Indian Oil’s ‘Vision with Values’ encompasses the Corporation’s new aspirations – to
broaden its horizons, to expand across new vistas, and to infuse new-age dynamism among
its employees. Adopted in the company’s Golden Jubilee year (2009), as a ‘shared vision’ of
Indian Oil People and other stakeholders, it is a matrix of six cornerstones that would together
facilitate the Corporation’s endeavours to be ‘The Energy of India’ and to become ‘A globally
admired company.’
More importantly, the Vision is infused with the core values of Care, Innovation, Passion and
Trust, which embody the collective conscience of the company and its people, and have
helped it to grow and achieve new heights of success year after year.
MISSION:
IOCL has the following mission:
 To achieve international standards of excellence in all aspects of energy and diversified

business with focus on customer delight through value of products and services and cost
reduction.
 To maximize creation of wealth, value and satisfaction for the stakeholders
 To attain leadership in developing, adopting and assimilating state-of-the-art technology
for competitive advantage.
 To provide technology and services through sustained Research and Development
 To foster a culture of participation and innovation for employee growth and contribution.
 To cultivate high standards of business ethics and Total Quality Management for a strong
corporate identity and brand equity.
 To help enrich the quality of life of the community and preserve ecological balance and
heritage through a strong environment conscience

4.13 THE PATH OF GROWTH:
 1958
Indian Refineries Ltd, was formed with Mr. Feroze Gandhi as Chairman.
 1959
Indian Oil Company Ltd. Was established on 30th June 1959 with Mr. S. Nijalingappa as
the first Chairman.
 1960
Agreement for supply of SKO and HSD was signed with the then USSR. M.V:
“Uzhgorod” carrying the first parcel of 11,390 tones of HSD docked at Pir Pau Jetty in
Mumbai on 17th August 1960.
 1962
Guwahati Refinery was inaugurated by Pt. Jawaharlal Nehru. Construction of Barauni
Refinery commenced.
 1963
Foundation was laid for Gujarat Refinery Indian Oil Blending Ltd. (a 50:50 Joint Venture
between IndianOil and Mobil) was formed.
 1964
Indian Oil Corporation Ltd. Was born on 1st September, 1964 with the merger of Indian
Refineries Ltd. With Indian Oil Company Ltd. Barauni Refinery was commissioned. The
first petroleum product pipeline from Guwahati to Siliguri (GSPL) was commissioned.

 1965
Gujarat Refinery was inaugurated by Dr. S.Radhakrishnan, the then President Of India.
Barauni-Kanpur Pipeline (BKPL) and Koyali- Ahmedabad product Pipeline (KAPL)
commissioned Indian Oil People maintained the vital supply Of Petroleum products to
Defense in 1965 War.
 1966
The first long-term agreement was signed for harmonious employee relations.
 1967
Haldia Baraurii Pipeline (HBPL) was commissioned. Bitumen and Marine Bunker
business began
 1968
Techno-economic studies for Haldia-Calcutta, Bombay-Pune and Bombay Manmad
Pipelines submitted to the Government.
 1969
IndianOil undertook the marketing of Madras Refinery products
 1970
IndianOil acquired 60% majority shares of IBP. The same was offloaded in favour of the
President of India under a Directive in 1972.
 1971
Dealership/reservation was extended to war widows, disabled Defence personnel,
Freedom Fighters, etc. after 1971 War.

 1972
R&D Centre was established at Faridabad. SERVO, the first indigenous lubricant was
launched.
 1973
Foundation-stone of Mathura Refinery was laid by Mrs. Indira Gandhi, the then Prime
Minister of India.
 1974
Indian Oil Blending Ltd. (IOBL) became the wholly owned subsidiary of IndianOil.
Marketing Division attained a new watershed with a market participation of 64.2%.
 1975
Haldia Refinery was commissioned. Multipurpose Distribution Centres were Introduced
at 132 Retail Outlets pioneering rural convenience.
 1976
Private petroleum companies nationalized. Burmah Shell became BPC.
 1977
R&D Centre launched Nutan wick stove.
 1978
Phase-wise commissioning of Salaya-Mathura Crude Oil Pipeline (SMPL) Began.
 1979
Barauni Refinery and Bongaigaon Refinery and Petrochemicals Ltd. (BRPL) affected by
Assam agitation.

 1980
The second Oil Shock was witnessed as a result of Iranian Revolution. Crude Oil price
flared to a new high of $32 per barrel.
 1981
Digboi Refinery and Assam Oil Company’s (AOC) marketing operations were Vested in
IndianOil. It became Assam Oil Division (AOD) of IndianOil,
 1982
Mathura Refinery was commissioned. Mathura-Jalandhar Pipeline (MJPL.) was
commissioned.
 1983
Massive augmentation of LPG storage and distribution facilities were undertaken.
Proposal for the 6 MMTPA Refinery at Karnal was submitted at An estimated cost of Rs
1, 181 Crore.
 1998
The Company’s seventh refinery is commissioned at Panipath.
 2002
The Indian petroleum industry is deregulated.

4.14 BOARD OF DIRECTORS :
 Shri S. Behuria Chairman (w.e.f. 01.03.2005)

 Shri A.M. Uplenchwar Director (Pipelines)
 Shri N.K. Nayyar Director (Planning & Business Development)
 Shri Jaspal Singh Director (Refineries)
 Dr. N.G. Kannan Director (Marketing)
 Shri B.M. Bansal Director (Research & Development) (w.e.f. 01.03.2005)
 Shri S.V. Narasimhan Director (Finance) (w.e.f. 01.07.2005)
 Shri V.C. Agrawal Director (Human Resources) (w.e.f. 01.08.2005)
 Shri M.S. Ramachandran Chairman (up to 28.02.2005)
 Shri P. Sugavanam Director (Finance) (up to 30.06.2005)
 Shri P.K. Agarwal Director (Human Resources) (up to 31.07.2005)
 Shri N.R. Raje Director (Research & Development) (up to 28.02.2005)
 Shri M.S. Srinivasan Director
 Shri Prabh Das Director
 Shri P.K. Sinha Director (w.e.f. 22.12.2004)
 Prof. S.K. Barua Director
 Shri Vineet Nayyar Director
 Shri V.K. Aggarwal Director
 Shri V. Ranganathan Director
 Shri P.M. Sinha Director
 Shri R.S. Sharma Director
 Shri R. Narayanan ED & Company Secretary


4.15 AWARDS & ACCREDITATIONS:
 Indian Oil (Mauritius) Ltd. Wins 'Century International Quality Era Award" New Delhi,
March 26, 2007 Indian Oil Bags Top Honors For Women Development, New Delhi,
March 13, 2007 Indian Oil gets a top slot in ET500 listing. New Delhi, March 22, 2007
Indian Oil Bags Top Honors For Women Development. New Delhi, March 13, 2007.
 WIPS Best Enterprise Award for Indian Oil.
 AOD Bottling Plant bags Best Quality Management Award.
 Mathura-Jalandhar Pipeline receives Rajiv Gandhi National Quality Award, February 16,
2007.
 Indian Oil wins SCOPE Award for Excellence in Public sector Management, March 8,
2007 Western Region bags Golden Peacock National Training Award, Kolkata, January
16, 2007 Indian Oil bags nine ABCI Awards, Mumbai, January 15, 2007 .
 Mathura Refinery Bags National Energy Conservation Award, December 15, 2006.
4.16 COMPETITION:
Indian Oil Corporation has two major domestic competitors Bharat Petroleum and Hindustan
Petroleum and both are state-controlled, like Indian Oil Corporation. Major private
competitors include – Reliance Industries and Essar Oil.

4.17 SWOT ANALYSIS OF IOCL :
SWOT ANALYSIS OF INDIAN OIL CORPORATION.

Understanding the internal factors of the company will help you influence your ability to take
advantage of an opportunity. SWOT Analysis is a simple but useful framework for analyzing
your organization’s strengths, weaknesses, opportunities, and threats. Let’s dive right into it.

STRENGTHS OF INDIAN OIL:

 Strong brand name.
 Wide variety of products.
 Several refineries.
 Vast distribution network.
 Has acquired a large chunk of the market share.
 Over 3500 employees.
 Loyalty programs.
 Has one of the largest pipeline.
 Strong branding and marketing exercises.
 Good R&D.
WEAKNESSES OF INDIAN OIL :

 High competition = limited market share.
 Bureaucracy.
OPPORTUNITIES FOR INDIAN OIL :

 Industry growth.
 Increasing natural gas market.
 Global expansion.
 Acquisition of smaller companies.
THREATS TO INDIAN OIL :.

 High competition.
 NGOs and environment focused companies can act as an obstacle.
 Macro-economical Government regulations conditions.

CHAPTER 5
DATA ANALYSIS AND INTERPRETATION

5.1 RATIO ANALYSIS :
5.1.1 Short term Solvency.
1.Current Ratio:
The simplest measure of a firm’s ability to raise fund to meet short term obligation is the
current ratio. Current ratio is the ratio of the firm’s total current assets to its current liabilities.
Apparently the higher the current ratio shows the greater the short term solvency. A low ratio
an indication that a firm may not be able to pay its future bills on time.
(Current Ratio = Current Assets ÷ Current Liabilities)
Table: 5.1 current ratio calculation.
Year Current Current Ratios

assets liabilities
2018-19 121903.29 131923.05 0.92
2019-20 125252.07 123021.46 1.02
2020-21 134438.45 130408.06 1.03
2021-22 141165.96 141138.25 1.0

Graph 5.1 Current Ratio Chart.
current ratio
1.04
1.02
1
0.98
0.96
0.94
0.92
0.9
0.88
Ratios
0.86
2018-19 2019-20 2020-21 2021-22
Ratios
Interpretation:
The current ratio is an indication of a firm’s market liquidity and ability to meet creditor’s
demands. Acceptable current ratios vary from industry to industry. If a company’s current
assets are in the range of 2:1, then it is generally considered to have good short-term financial
strength. If current liabilities exceed current assets (the current ratio is below 1), then the
company may have problems meeting its short-term obligations. If the current ratio is too
high, then the company may not be efficiently using its current assets.

As a conventional rule a current ratio of 2 to 1 or more is considered satisfactory. This rule is

based on the logic that in a worse situation, even if the value of current assets becomes half,
the firm will be able to meet its obligation. However an arbitrary standard of 2 to 1 should not
be blindly followed. Firms with less than 2 to 1 current ratio may be doing well, while firms
with 2 to 1 or even higher current ratios may be struggling to meet their obligations. This is
because current ratio is a a measure of quantity and not quality.
2. Liquid Ratio:
Liquidity ratio, expresses a company’s ability to repay short-term creditors out of its
total cash. The liquidity ratio is the result of dividing the total cash by short-term borrowings.
It shows the number of times short-term liabilities are covered by cash. If the value is greater
than 1.00, it means fully covered.
(Liquid Ratio = Liquid Assets ÷ Current Liabilities)
Table 5.2 Liquid ratio calculation.
Year Liquid Liquid Ratios

assets liabilities
2018-19 57092.23 131923.05 0.43
2019-20 61401.03 123021.461 0.50
2020-21 67834.15 130408.06 0.52
2021-22 72093.48 141138.25 0.51

Graph 5.2 Liquid Ratio Chart.
Liquid Ratio Chart
29%
34%
3%
34%
2018-19 2019-20 2020-21 2021-22
Interpretation:
All current assets are not equally liquid. While cash is readily available to make payments to
suppliers and debtors can quickly convert in to cash, inventories are two steps away from
conversion into cash (sale & collection). Thus a larger current ratio by itself is not a
satisfactory measure of liquidity when inventories constitute a major part of the current assets.
Therefore the quick ratio, or acid test ratio, is computed as a supplement to the current ratio.
The ratio relates highly liquid current assets, usually current assets less inventories, to current
liabilities. A general rule of thumb states that the ratio should be 1 to 1 (or 1:1 or 1/1)

Liquid Ratio = (Current Assets (Inventories + Prepaid expenses)} / {Current Liabilities -Bank
Overdraft)
Generally, a quick ratio of 1to 1 is considered to represent a satisfactory financial condition.
However it should be remembered that all debtors may not be liquid and all the inventories
are not absolutely non- liquid. Thus a company with a high value of quick ratio can suffer
from the shortage of funds if it has slow paying, doubtful and long-duration outstanding
debtors. On the other hand, a company with a low value of quick ratio may really be
prospering and paying its current obligation in time if it has been turning over its inventories
effectively.
3. Cash Ratio / Absolute Liquid Ratio.
CASH RATIO = (CASH + MARKETABLE SECURITIES)/CURRENT

LIABILITIES.
Table 5.3 Cash ratio calculation.
Year C&B Current Ratios

Balance liabilities
2018-19 839.21 131923.05 0.01
2019-20 821.95 123021.46 0.01
2020-21 1219.80 130408.06 0.01
2021-22 3704.52 141138.25 0.03

Graph 5.3 Cash Ratio Chart.
Cash Ratio Chart
0.03
0.025
0.02
0.015
0.01
0.005
0
2018-19 2019-20 2020-21 2021-22
Cash Ratio Chart
Interpretation:
Since cash is the most liquid asset, a financial analyst may examine cash ratio and its
equivalent to current liabilities. Trade investment or marketable securities are equivalent of
cash; therefore, they may be included in the computation of cash ratio. Cash Ratio shows the
extent to which cash and marketable securities are able to meet the current liabilities. There58
is nothing to be worried about the lack of cash if the company has reserve borrowing power.
In India, firms have credit limits sanctioned from banks, and can easily draw cash.

5.1.2 Long-Term Solvency.
1.Debt Equity Ratio.

The debt to equity ratio (also called the risk ratio or leverage ratio) provides a quick tool to
financial analysts and prospective investors for determining the amount of financial leverage
a company is using, and thus its exposure to interest rate increases or insolvency. Knowing
how to analyze the debt to equity ratio can help you assess a company’s financial health before
investing.
(Debt Equity Ratio = Debt ÷ Equity)
Table 5.4 Calculation of Debt equity ratio.
Year Debt Equity Ratios
2018-19 32128.83 57710.44 0.55
2019-20 35031.92 60373.30 0.58
2020-21 42993.94 63037.95 0.68
2021-22 56436.79 67913.02 0.83

Graph 5.4 Debt Equity Ratio Chart.
Debt Equity Ratio

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2018-19 2019-20 2020-21 2021-22
Debt Eqity Ratio
Interpretation:
Since cash is the most liquid asset, a financial analyst may examine cash ratio and its
equivalent to current liabilities. Trade investment or marketable securities are equivalent of
cash; therefore, they may be included in the computation of cash ratio. Cash Ratio shows the
Extent to which cash and marketable securities are able to meet the current liabilities. There
Is nothing to be worried about the lack of cash if the company has reserve borrowing power.
In India, firms have credit limits sanctioned from banks, and can easily draw cash.

2.Proprietary Ratio :
Proprietary ratio (also known as Equity Ratio or Net worth to total assets or shareholder equity
to total equity). Establishes relationship between proprietor's funds to total resources of the
unit. Where proprietor's funds refer to Equity share capital and Reserves, surpluses and Total
resources refer to total assets.
(Proprietary Ratio = Proprietor's Fund ÷ Total Asset)
Table 5.5 Proprietary ratio calculation.
Year PF Total Assets Ratios
2018-19 60092.45 197489.34 0.30
2019-20 60373.30 219827.22 0.27
2020-21 63037.95 241724.98 0.26
2021-22 67913.02 266678.62 0.25

Graph 5.5 Proprietary Ratio Chart.
Proprietary Ratio Chart

0.31
0.3
0.29
0.28
0.27
0.26
0.25
0.24
0.23
0.22
2018-19 2019-20 2020-21 2021-22
Proprietary Ratio Chart
Interpretation:
This ratio shows that how the company face very low level of Net worth in the financial year
2018-19 And overall proprietary ration level is unbalanced when compared to Normal norms.

5.1.3 Profitability.
1. Net Profit Ratio.

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the remaining
profit after all costs of production, administration, and financing have been deducted from
sales, and income taxes recognized. It is also used to compare the results of a business with
its competitors.
(Net Profit Ratio = Net Profit ÷ Sales x 100)
Table 5.6 Net Profit ratio calculation.
Year Net Profit Sales Ratio
2018-19 2971.56 433871.39 0.68
2019-20 4173.23 408923.00 1.02
2020-21 3627.30 461779.51 0.79
2021-22 6966.58 488344.94 1.43

Graph 5.6 Net Profit Ratio Chart.
1.6
1.4
1.2
0.8
0.6
0.4
0.2
0
2018-19 2019-20 2020-21 2021-22
Net Profit Ratio Chart
Interpretation:
Net Profit Ratio establishes a relationship between Net Profit (After taxes) and Sales. This
ratio is the overall measure of firm’s profitability. Thus
Net Profit Ratio= Net Profit/Net Sales*100
This ratio also indicates the firm’s capacity to face adverse economic condition such as price
competition, low demand etc. Obviously, higher the ratio the better is the profitability. But
while interpreting the ratio, it should be kept in mind that the performances of profits must
also be seen in relation to investment of the firm and not only in relation to sales.

2. Net Operating Profit Ratio.

Net Operating Profit ratio is influenced by the methods of financing you utilize. Notice that
this ratio employs earnings before interest and taxes, not earnings after taxes. Profits are taken
after interest is paid to creditors. A fallacy of omission occurs when creditors support total
assets. It is used to find how the company earn the profit in their overall operations.
(Net Operating Profit Ratio = Net Operating Profit ÷ Sales x 100)
Table 5.7 Net Operating Profit Calculations .
Year Net Operating Sales Ratios

Profit
2018-19 6301.34 433871.39 1.45
2019-20 4914.18 408923.00 1.20
2020-21 4501.09 461779.51 0.97
2021-22 8315.02 488344.93 1.70

Graph 5.7 Net Operating Ratio.
Net Operating Ratio

1.8
1.6
1.4
1.2
0.8
0.6
0.4
0.2
0
2018-19 2019-20 2020-21 2021-22
Net Operating Ratio
Interpretation:
This ratio clearly shows that the company made average on operating expenditure in last three
years. And Net Operating Profit Ratio is fluctuating in past three years.

3. Return on Capital Employed :

The return on capital employed (ROCE) ratio, expressed as a percentage, complements the
return on equity (ROE) ratio by adding a company's debt liabilities, or funded debt, to equity
to reflect a company's total "capital employed". This measure narrows the focus to gain a
better understanding of a company's ability to generate returns from its available capital base.
(Return on Capital Employed = EBIT ÷ Capital Employed x 100 )
Table 5.8 Return On Capital Employed Calculation.
Year EBIT Capital Return on capital

Employed Employed
2018-19 10113.98 23496.78 43.04
2019-20 11703.17 20738.35 56.43
2020-21 4501.09 27215.46 16.54
2021-22 8315.02 38293.11 21.71

Graph 5.8 Return On Capital Employed.
Return On Capital Employed Ratio Chart
2021-22
2020-21
2019-20
2018-19
0 10 20 30 40 50 60
Return On Capital Employed Ratio Chart
Interpretation:
Here the chart shows that how the returns came for capital employed incurred in each year of
the period of the study. It shows clearly in 2020-21 the return on capital employed reached to
lowest in that year. After that the return is fluctuating.

4. Return on Total Asset :

Since income is derived from assets in use through the year, including new plant or machinery,
the value used in the calculation is an average. Return on assets, or ROA, tests management's
ability to earn a fair return on assets. The calculation of this ratio is as follows:
(Return on Total Asset = EBIT÷ Total Asset x 100)
Table 5.9 Return on total assets Calculation.
Year EBIT Total Assets Return on

total assets
2018-19 10113.98 18460189 5.48
2019-20 11703.38 219827 22 5.32
2020-21 4501.09 241724.98. 1.86
2021-22 8315.02 266678.62 3.12

Graph 5.9 Return On Total Assets .
RETURN ON TOTAL ASSETS

2018-19 2019-20 2020-21 2021-22
20%
35%
12%
33%
Interpretation:
Here the IOCL gets their returns on total asset in fully fluctuating level only.

5.1.4 Turnover Ratios.
1.Stock Turnover Ratio:

This next metric tells the analyst how well a company manages inventory. Once again,
this measure takes information from both the income statement and balance sheet.
Typically, higher values of inventory turnover are a positive sign,
(Stock Turnover Ratio = Cost of Goods sold ÷ Average stock)
Table 5.10 Stock turnover ratio calculation.
Year Cost of Average Stock

goods sold stock turnover
ratio
2018-19 303059.85 88171.59 3.44
2019-20 400678.27 91027.45 4.40
2020-21 460790.06 97152.17 4.74
2021-22 483472.29 102774.00 4.70

Graph 5.10 Stock Turn Over Ratio .
Stock Turnover Ratio Chart
0
2018-19 2019-20 2020-21 2021-22
Stock Turnover Ratio Chart
Interpretation:
It is observed from the chart that the stock turnover ratio shows lies 1 time throughout the
four years period of study. Hence IOCL has good inventory turnover ratio.

2.Receivable Turnover Ratio:

The convenience of credit, and relatively attractive repayment terms, results in the vast
majority of revenues starting out as accounts receivable. This brings us to the next measure
of efficiency: accounts receivable turnover. This measure tells the analyst how effective a
company is at managing the credit they're extending to customers.
(Receivable Turnover Ratio = Sales + Trade Receivables)
Table 5.11 Receivable turnover ratio calculation
Year Sales Trade Receivable

receivables turnover ratio
2018-19 488344.93 7684.62 63.55
2019-20 461779,51 11551.80 39.97
2020-21 412111.16 12502.05 32.96
2021-22 313244.71 12551.72 24.96

Graph 5.11 Receivable Turnover Ratio .
RECEIVABLE TURNOVER RATIO CHART

70
60
50
40
30
20
10
0
2018-19 2019-20 2020-21 2021-22
Receivable Turnover Ratio Chart
Interpretation:
Here the turnover ratio shows how the receivables is involved in total turnover. Form the
2021-22 the times of turnover lies high and gradually decreasing. IOCL must concentrate
deeply on it.

3.Fixed Asset Turnover ratio:

This ratio is a rough measure of the productivity of a company's fixed assets (property, plant
and equipment or PP&E) with respect to generating sales. For most companies, their
investment in fixed assets represents the single largest component of their total assets. This
annual turnover ratio is designed to reflect a company's efficiency in managing these
significant assets.
(Fixed Asset Turnover Ratio = Sales ÷ Fixed Asset)
Table 5.12 Fixed assets turnover ratio calculation.
Year Sales Fixed assets Fixed assets

turnover ratio
2018-19 488344.93 73524.00 6.64
2019-20 461779.51 80030.56 5.77
2020-21 412111.16 93926.88 4.39
2021-22 313244.71 110527.46 2.83

Graph 5.12 Fixed Assets Turnover Ratio .
Fixed Assets Turnover Ratio Chart
2021-22
2020-21
2019-20
2018-19
0 1 2 3 4 5 6 7
Fixed Assets Turnover Ratio Chart
Interpretation:
From the Chart it is known that the Fixed Asset turnover Ratio of IOCL is fluctuating for past
Four years. Generally higher the total assets turnover ratio betters the profit being. So total
assets turnover ratio of IOCL is satisfied.

4.Working Capital Turnover Ratio:

The Working Capital Turnover Ratio is used to measure the efficiency of the firm. This also
indicates whether or not working capital has been effectively utilized in making sales. It
measures the efficiency in working capital management. In case company can achieve higher
volume of sales with relatively small amount of working capital. It is an indication of the
operating efficiency of the company.
(Working Capital Turnover Ratio = Sales ÷ Working Capital)
Table 5.13 Working capital turnover ratio calculation.
Year Sales Working Working

capital capital
turnover ratio
2018-19 488344.93 -889.82 -548.81
2019-20 461779.51 2230.99 206.98
2020-21 412111.16 2950.75 139.66
2021-22 313244.71 27.71 11304.39

Graph 5.13 Working Capital Turnover Ratio .
Working Capital Turnover Ratio

12000
10000
8000
6000
4000
2000
0
2018-19 2019-20 2020-21 2021-22
-2000
Working Capital Turnover Ratio
Interpretation:
Working capital turnover indicates the efficiency of the firm in utilizing the working capital
in the business. It is observed from the table that the working capital turnover ratio of IOCL
show the negative value on 2018-19 and sudden increment in the 2021-22. It shows that the
company earns sufficient returns using working capital increases.

Table 5.14 BALANCESHEET OF ICOL.
Particulars 2018-19 2019-20 2020-21 2021-22

(in crs) (in crs) (in crs) (in crs)
EQUITY
AND
LIABILITIES
Issued capital 8612.65 11322.33 12643.46 14546.89
Share 8030.56 6295.90 3519.52 4392970
application
money
Reserves and 3030781 42756.65 46875.43 48975.21
surplus
share 6041.95 - - -
application
money
pending
allotment
Minority 4532.65 - - -
interest
57710.44 60373.30 63037.95 67913.02
Non-current
liabilities
Long-term 1567.08 14585.63 16333.79 18742.9
borrowings
Deferred tax 3451.45 21846.83 31945.18 39484.45
liability

Other non- 1687.63 - - -

current
liability
Long-term 1149.69 - - -
provisions
7855.85 36432.46 48278.97 57627.35
Current
liabilities
Short-term 11678.23 14427.0 8428.79 12265.18
borrowings
Trade payables 20541.19 17452.03 18645.76 20131.13
Other current 37245.58 32487.52 39143.47 41526.31
liabilities
Short-term 62458.04 58654.91 64190.04 67215.63
provisions
131923.05 123021.46 130408.06 141138.25
197489.34 219827.22 241724.98 266678.62
ASSETS
Fixed assets:
Tangible 8654.07 12685 20908 33931

assets
Intangible 30156.65 28721.58 25684.87 23789.66
assets
Capital WIP 27564.97 38624.14 47334.02 52807.90
Intangible 7150.0 - - -
assets under

development
73524.00 80030.56 93926.88 110527.46
Non-current
assets
Deferred tax 345.46 - - -

assets
Investments 1042.46 9424.43 9894.76 10345.14
Long-term 460.64 3015.46 2185.65 3245.86
loans and
advances
Other non- 218.46 2105.66 1281.85 1706.35
current assets
2062.05 14544.59 13360.06 14985.2
Current
assets
Inventories 47838.93 48345.86 51349.46 53191.16
Trade 7684.62 11551.80 12502.05 12551.72
receivables
Cash and 17346.46 19839.06 22846.91 25845.43
bank
balances
Short-term 43245.43 45517.64 47741.13 49578.43
loans and
advances
Other current 5790.34 - - -
assets
Miscellaneou
s expenditure
(not yet
written off)

121903.29 125252.07 134438.45 141165.96

197489.34 219827.22 241724.98 266678.62

CHAPTER 6
FINDINGS, CONCLUSION AND SUGGESTIONS

6.1 FINDINGS:
The ultimate aim of every business concern is to maximize its profit by enduring efficiency
and controlling costs. The management of Indian Oil Corporation Limited works hard to attain
this objective while to maintain a prestige and goodwill. The prestige and goodwill can be
protected only by maintaining better profitability, sufficient liquidity, and ensuring solvency.
The present study reveals the following aspects in relations to the Indian Oil Corporation
Limited for the last four years form 1” April 2018 to 31 March 2022.
 The current ratio of last 4 years in the period of the study. The current ratio of the Firm
has shown an upward trend.
 The quick ratio of IOCL is the highest in 2021-22; this means that Indian Oil Corporation
Limited is in a better position to pay its short term liabilities.
 The cash ratio of IOCL is the lowest in 2018-19, 2019-20, 2020-21,This may be due to
collection of receivables too slowly, paying bills too quickly, etc
 IOCL has the lowest debt-equity ratio of 0.83 and 0.68 in 2021-22 and 2020-21. This
Means that IOCL provides more security in meeting its obligation to the creditors.
 The inventory turnover ratio of IOCL is lowest in last four years. This is due to the
Maintenance of huge amount of stocks, which is required for the seven refineries.
 The fixed asset turnover ratio of IOCL is the lowest in 2021-22 as well as in 2020-21.
This means the Company is not utilizing its fixed assets efficiently to generate sales.
 All the turnover ratios are showing insufficient level of increasing in overall period of The
study.
 The company is having a good amount of free cash flows in most of the years under study
because the cash from operating activities is high.

6.2 SUGGESTIONS :
 The company must keep on making profit in the forthcoming years, which will also
enhance the share value of the company.
 They should increase the value of Net Margin and Asset turnover for influencing the high
rate of Return on equity.
 The company must concentrate on the improvement of Liquidity position by making
Balanced liabilities.
 The activity ratios tell that company operates efficiently but it needs to accelerate the
process of collection period form debtors. The fixed assets and inventory turnover must
Be maintained well in order to achieve efficiency in its operations.
 The company can invest in marketable securities to improve its cash ratio.
 The company’s working capital has been found to be low. It is advised that the company
should try to reduce its investment and try to make more profit so that the Ratio increases.
 The company should try to try to achieve maximum sales with minimum of capital
Employed.
 Try to increase the Debt equity ratio, by concentrate on controlling Debt issues.
 The company must try to control the operating expenses which give unexpected loss.
 The company should try to increase the profit before interest and tax so that the
Investments in the firm are attractive as the investors would like to invest only where the
return is higher
 The company has shown huge growth in terms of profitability in the year 2020-21 when
compared to recent years. So, it must now make a constant effort to achieve those heights
by its efficient way operating as the investors first see only the profit of the firm.
 The company must increase their research and development process for its own
Improvements. The company must switch over to new technology machines to enhance
their production capability.
 The company should regularly make use of ratio analysis and measure should be taken to
improve undesirable ratios at least as to the point of industry’s average.
 Operational efficiency should be increased by reducing cost and wastage that improves
operating and management performance. Supply of working capital should be adequate

6.3 CONCLUSION:
This project of Performance analysis in the production concern is not merely a work of the
project. But a brief knowledge and experience of that how to analyze the financial
performance of the firm. The study undertaken has brought in to the light of the following
conclusions. According to this project I came to know that from the analysis of financial
statements it is clear that Indian Oil Corporation Ltd have been doing a satisfactory job. But
the firm has certain areas to ponder upon like capital employment and management of working
capital. So the firm should focus on getting of profits in the coming years by taking care
internal as well as external factors. And with regard to resources, the firm is take utilization
of the assets properly.

BIBLIOGRAPHY
The major documents required this project was obtained from the following sources.
 Annual reports of indian oil corporation limited.
WEBSITES :
 https://iocl.com/
 https://www.accountingtools.com/articles/financial-position
 https://en.m.wikipedia.org/wiki/Operational_efficiency

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“A STUDY ON FINANCIAL POSTION AND OPERTIONAL

EFFICIENCY AT SRI SHARADA ENTERPRISES “

requirements for the award of the Degree of

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT

I hereby declare that “A STUDY ON FINANCIAL POSTION AND OPERTIONAL

Date: Register Number: 20SLCOM007

DATE: Dr. M. Surekha

REG NO. 20SLCOM007

CHAPTER TITLE PAGE

Ⅱ REVIEW OF LITERATURE 7-15

Ⅲ RESEARCH DESIGN 16-20

Ⅳ COMPANY PROFILE 21-51

Ⅴ DATA ANALYSIS 52-82

Ⅵ FINDINGS, CONCLUSION AND 83-86

Table TITLE OF CHARTS Page No.

5.1 Current Ratio Calculation 53

5.2 Liquid Ratio Calculation 55

5.3 Cash Ratio Calculation 57

5.4 Debt Equity Ratio Calculation 59

5.5 Proprietary Ratio Calculation 61

5.6 Net Profit Ratio Calculation 63

5.7 Net Operating Ratio Calculation 65

5.8 Return On Capital Employed Calculation 67

5.9 Return On Total Assets Calculation 69

5.10 Stock Turnover Ratio Calculation 71

5.11 Receivable Turnover Ratio Calculation 73

5.12 Fixed Assets Turnover Ratio Calculation 75

5.13 Working Capital Turnover Ratio Calculation 77

5.14 Balance Sheet Of IOCL 79-82

Graph TITLE OF GRAPHS Page no.

4.6.1 Pipelines Throughput 31

5.1 Current Ratio Chart 54

5.2 Liquid Ratio Chart 56

5.3 Cash Ratio Chart 58

5.4 Debt Equity Ratio Chart 60

5.5 Proprietary Ratio Chart 62

5.6 Net Profit Ratio Chart 64

5.7 Net Operating Ratio Chart 66

5.8 Return On Capital Employed Chart 68

5.9 Return On Total Assets Chart 70

5.10 Stock Turnover Ratio Chart 72

5.11 Receivable Turnover Ratio Chart 74

5.12 Fixed Assets Turnover Ratio Chart 76

5.13 Working Capital Turnover Ratio Chart 78

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT Page 1

1.1 INTRODUCTION OF THE STUDY.

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT Page 2

1.2 MEANING OF FINANCIAL POSITION AND OPERATIONAL

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT Page 3

1.3 FEATURES OF FINANCIAL POSITION AND OPERATIONAL

 Optimal Resource Utilization.

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT Page 4

1.4 ADVANTAGES OF FINANCIAL POSTION AND OPERATIONAL

 Review of cash flow.

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT Page 5

1.5 DISADVANTAGES OF FINANCIAL POSITION AND OPERATION

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT Page 6