Financial Statement Analysis

Mr. Amritpal Singh Randhawa

Abstract


This paper attempts to analyze the financial statements and measure the performance in terms of assets utilization, and profitability. In detail the research methodology used for the study. The study purely relies on secondary data, which were collected for a period of Mar 2012 to Mar 2017 from the audited annual reports of the Reliance industries ltd and maintained and made available by several organizations viz., Stock Exchange for the purpose of effective periodical analysis. In order to know the performance of the reliance Industries Ltd, that was evaluated with the help of five financial ratios. The paper used accounting ratios and financial report analysis, namely, profitability ratios and solvency ratio, which might affect the financial performance of the firm. Profit Margin (PM), Return on Assets (ROA), Return on Equity (ROE), EPS ratio and Debt equity ratio. This study reveals that financial strengths and weaknesses of the reliance industries, over the period there were gray areas took place, which resulted in decline of all the concerned profitability ratios and subsequently the performance of reliance industries has improved, during the last few years. In conclusion, ROE is the most comprehensive measure of profitability of a firm; it considers the operating and investing decisions made as well as the financing and tax related decisions.


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