INTRODUCTION

Financialstatementsarerecordsthatprovideanindicationoftheorganizationsfinancialstatus. Itquantitatively describesthefinancialhealthofthecompany.Ithelpsintheevaluationofcompanysprospectsandrisksfort hepurposeofmakingbusinessdecisions.Theobjectiveof financialstatementsistoprovideinformationabout thefinancialposition,performanceandchangesinfinancialpositionofanenterprisethatisusefultoawidera ngeofusersinmakingeconomic relevant,reliable comparable.Theygiveanaccuratepictureofacompanysconditionandoperatingresultsina condensedform.Reportedassets,liabilitiesandequityaredirectlyrelatedtoanorganization's financialpositionwhereasreportedincomeandexpensesaredirectly relatedtoanorganization's decisions.Financial statements should be understandable, and

financialperformance.Analysisandinterpretationoffinancialstatementshelpsindetermining theliquidityposition,longtermsolvency,financial viability,profitabilityandsoundnessofa

firm.Therearefourbasictypesoffinancialstatements:balancesheet,incomestatements,cashflowstatements,andstatements ofretainedearnings. Miningindustriesarecapitalintensive.Hencealotcapitalisinvestedinit. Unfortunatelyvery

limitedworkhasbeendoneonanalysisandinterpretationoffinancialstatementsofIndianforminingcompa nies.Anattempthasbeencarriedoutinthisprojecttoanalyzeandinterpretthe fivecoal andnon-coal miningcompanies. OBJECTIVES To understand, analyze and interpret the basic concept of financial statements of different mining companies. Interpretation of financial ratios and their significance. financialstatements of

FINANCIAL STATEMENTS
Financial statements (orfinancialreports)are formal records of the financial activities of a business,person, orotherentity.

Financialstatementsprovideanoverviewofabusinessorperson'sfinancialconditioninbothshort andlongterm.Alltherelevantfinancialinformationofabusiness enterprise,presented

inastructuredmannerandinaformeasytounderstandiscalledthefinancialstatements.There arefourbasic financialstatements: 1.Balancesheet:It is alsoreferred to asstatement offinancialpositionorcondition,reportsona company'sassets, liabilities,andOwnershipequityasofagivenpointintime. 2.Incomestatement:ItisalsoreferredtoasProfitandLossstatement(or"P&L"),reportsona company'sincome,expenses,andprofitsoveraperiodoftime.Profit&Lossaccountprovideinfo rmationontheoperation oftheenterprise.Theseincludesaleandthevariousexpenses

incurredduringtheprocessingstate. 3.StatementofRetainedEarnings:Itexplainsthechangesinacompany'sretainedearningsover thereportingperiod. 4.Cash Flow Statement: It reports on a company's cash flow activities, particularly itsoperating, investingandfinancingactivities.

Industry overview: Indian steel sector

India has emerged as the fourth largest steel producing nation in the world, as per the recent figures release by World Steel Association in April 2011. In 2010, India was the 5th largest producer, after China, Japan, USA and Russia had recorded a growth of 11.3% in steel production as compared to 2009. Overall domestic crude steel production grew at a compounded annual growth rate of 8.4% during 2005-06 to 2009-10. The Indian steel industry accounted for around 5% of the worlds total production in 2010. Total crude steel production in India for 2010-11 was around 69 million tonnes and its expected that the crude steel production in capacity in the country will increase to nearly 110 million tonne by 2012-13. Further, if the proposed expansion plans are implemented as per schedule, India may become the second largest crude steel producer in the world by 2015-16. The demand for steel in the country is currently growing at the rate of over 8% and it is expected that the demand would grow over by 10% in the next five years. However, the steel intensity in the country remains well below the world levels. Our per capita consumption of steel is around 110 pounds as compared to 330 Pounds for the global average. This indicates that there is a lot of potential for increasing the steel consumption in India.

Immense growth potential in Indian Steel Sector

Domestic crude steel production grew at a compounded annual growth rate of 8.4% in the last few years.

Crude steel production capacity of the country is projected to be around 110 million tonne by 201213. 222 Memorandum of Understandings (MOU) have been signed with various states for planned capacity of around 276 million tonnes by 2019-20.

Investments at stake are to the tune of $187 billion in the Steel sector. Increase in the demand of steel in India is expected to be 14% against the global average of 5-6% due to its strong domestic economy, massive infrastructure needs and expansion of industrial production.

Demand of steel in the major industries like infrastructure, construction, housing, automotive, steel tubes and pipes, consumer durables, packaging and ground transportation. Target for $ 1 trillion of investments in infrastructure during the 12th Five Year Plan. Infrastructure projects (like Golden Quadrilateral and Dedicated Freight Corridor) will give boost to the demand in the steel sector in near future. Projected New Greenfield & up-gradation of existing Airport shall keep the momentum up. Increased demand of specialized steel in hi-tech engineering industries such as power generation, automotive petrochemicals, fertilizers etc.

ANALYSIS
Jindal Stainless Ltd.
Table:Balance Sheet of Jindal Stainless Ltd.as at31stMar-2012 Liabilities ShareCapital Reserves &Surplus NetWorth(1) Secured Loans(2) UnsecuredLoans(3) Total Liabilities(1+2+3 Assets Gross Block (-)Acc.Depreciation Net Block (A) CapitalWorkin Prgs. (B) Investments(C) Inventories SundryDebtors CashAnd Bank LoansAnd Advances (i) CurrentLiabilities Provisions (ii) NetCurr.Assets (i -ii) (D) Misc. Expenses(E) TotalAssets (A+B+C+D+E) March-2012 (Rs in millions) 154.70 53,998.50 54,153.20 21,054.90 28,571.60 103,779.70 March-2012 73,629.00 16,170.00 57,459.00 23,180.10 12,334.00 12,099.60 3,914.60 3,089.60 32,789.00 51,892.80 31,258.30 9,858.10 41,116.40 10,776.40 30.20 103,779.70 March-2011 (Rs in millions) 154.00 37,409.80 37,563.80 17,833.90 20,799.60 76,197.30 March-2011 59,189.40 11,831.10 47,358.30 6,604.80 10,361.90 9,805.60 2,873.80 5,779.10 14,537.20 32,995.70 15,335.40 5,819.40 21,154.80 11,840.90 31.40 76,197.30 March-2010 (Rs in millions) 154.00 24,813.30 24,967.30 21,156.10 13,921.10 60,044.50 March-2010 49,290.30 7,817.50 41,472.80 9,378.40 7,098.20 6,424.40 3,203.10 529.70 7,859.40 18,016.60 12,099.10 3,854.80 15,953.90 2,062.70 32.40 60,044.50

Table: Profit & Loss Statement of Jindal Stainless Ltd. March-2012 (Rs in millions) 76,778.30 Sales 1,994.60 OtherIncome 78,772.90 TotalIncome RawMaterial 34,194.20 Cost 7,559.80 Excise Other 8,645.70 Expenses Operating 26,378.60 Profit Interest 2,678.90 Name 23,699.70 GrossProfit 4,330.30 Depreciation ProfitBef. 21,362.00 Tax 4,654.00 Tax 16,708.00 Net Profit OtherNon-1,343.20 Recurring Income Reported 15,364.80 Profit Equity Dividend 853.30 March-2011 (Rs in millions) 53,681.40 573.10 54,254.50 17,274.00 7,634.90 5,813.40 22,959.10 2,430.20 20,528.90 4,515.10 16,584.20 2,655.50 13,928.70 -1,559.10 12,369.60 620.20 March-2010 (Rs in millions) 35,230.80 360.80 35,591.60 10,685.00 3,967.10 6,480.60 14,098.10 1,731.90 12,366.20 3,364.70 9,359.60 2,418.50 6,941.10 88.80 7,029.90 554.30

Ratio Analysis for 2012 Table: Analysis of Financial Ratios for 2012 Sl. No. 01. Ratios Particulars (Rsin millions) Current Assets =51892.80 Current Liabilities =41116.40 Values Remarks

Net Working Capital = Current assets- Current liabilities

10776.4

Liquidity position is good.

Current Ratio = 02. Current Assets Current Liabilities Acidtest or Quick ratio= 03. Quick Assets Current Liabilities Debt-EquityRatio= 04. Long term debt Shareholders Equity Interest Coverage= 05. Operating Profit Interest Operating Profit margin= 06. Operating Profit*100 Sales

Current Assets =51892.80 Current Liabilities =41116.40

1.26

It is not safe.

Quick Assets =39793.2 Current Liabilities =41116.40

0.96

It is safe.

Total debt =49626.5 Shareholder Equity =54153.20

0.91

It is good.

Operating Profit =26378.60 Interest =2678.90

9.84

It is not safe.

Operating Profit =26378.60 Sales =76778.30

34%

It is safe.

Sl. No 07.

Ratios

Particulars (Rs in millions) Gross Profit =23699.70 Sales =76778.30

Values

Remarks

Gross Profit margin= Gross Profit*100 Sales

30.86%

It is good.

Net Profit margin= 08. Net Profit*100 Sales

Net Profit =15364.80 Sales =76778.30

20.01%

It is not desirable.

Return on Assets = 09. Operating Profit*100 Average Assets

Operating Profit =26378.60 Average Assets =132045.9

19.97%

It is not satisfactory

Return on Investments= 10. Net Profit before Tax*100 Net Worth

Profit Before Tax =21362 Net Worth =54153.20

It is satisfactory 39.44%

11.

Return on Net Worth= Net Profit*100 Average Net Worth

Net profit =16,708.00 Average Net Worth =45858.5

36.4%

It is satisfactory

Sl. No

Ratios

Particulars (Rsin millions) Operating Profit =26378.60 Avg.Capital Employed =152228.9

Values

Remarks

Return on Capital Employed= 12. Operating Profit*100 Average Capital Employed

17.32%

It is not good.

Cost of Goods Sold Ratio= 13. Cost of Goods Sold Sales

Cost of goods sold =34,194.20 Sales =76778.30

0.45

It is not satisfactory.

Operating Ratio= 14. CostofGoodssold+otherExpenses Sales

Other Expenses =8,645.70

0.55

It is not satisfactory.

15.

Fixed Assets turnover=

Fixed Assets

Sales

Fixed Assets =92973.1 Sales =76778.30

0.82

It is good.

Ratio Analys is for 2011 Table: Analysis of Financial Ratios for 2011 Sl. No 01. Ratios Particulars (Rsin millions) Current Assets =32,995.70 Current Liabilities =21,154.80 Values Remarks

Net Working Capital = Current assets-Current liabilities

11840.9

Liquidity position is good.

Current Ratio = 02. Current Assets Current Liabilities Acidtest or Quickratio= 03. QuickAssets CurrentLiabilities Debt-EquityRatio= 04. Long termdebt Shareholders Equity Interest Coverage= 05. OperatingProfit Interest Operating Profi tmargin= 06. Operating Profit*100 Sales

Current Assets =32,995.70 Current Liabilities =21,154.80

1.5

It is not safe.

Quick Assets =23190.1 Current Liabilities =21,154.80

1.0

It is safe.

Total debt =38633.5 Shareholder Equity =37,563.80

1.0

It is good.

Operating Profit =22,959.10 Interest =2,430.20

9.44

It is not safe.

Operating Profit =22,959.10 Sales =53,681.40

42%

It is safe.

Sl. No 07.

Ratios

Particulars (Rs in millions) Gross Profit =20,528.90 Sales =53,681.40

Values

Remarks

Gross Profit margin= Gross Profit*100 Sales

38.24%

It is good.

Net Profit margin= 08. Net Profit*100/ Sales

Net Profit =12369.60 Sales =53,681.40

23.04%

It is not good.

Return on Assets = 09. Operating Profit*100/ Average Assets

Operating Profit =22,959.10 Average Assets =86643.35

26.49%

It is not good.

Return on Investments= 10. Net Profit before Tax*100/ NetWorth

Profit Before Tax =16584.20 Net Worth =37563.80

44.14%

It is satisfactory

11.

Returnon NetWorth= Net Profit *100/ Average Net worth

Net profit =13928.70 Average Net Worth =31265.55

44.54%

It is satisfactory

Sl. No

Ratios

Particulars (Rsin millions) Operating Profit =22,959.10 Avg.Capital Employed =105197.7

Values

Remarks

ReturnonCapitalEmployed= 12. OperatingProfit*100/ Average CapitalEmployed

21.8%

It is not good

Costof GoodsSoldRatio= 13. CostofGoodsSold Sales

Cost of goods sold =17,274.00 Sales =53,681.40

0.32

It is not satisfactory.

Operating Ratio= 14. CostofGoodssold+otherExpenses Sales

Other Expenses =5813.40

0.43

It is not satisfactory.

15.

Fixed Assets turnover=

Fixed Assets Sales

Fixed Assets =64325 Sales =53,681.40

0.83

It is good.

Ratio Analysis for2010 Table: Analysis of Financial Ratios for 2010 Sl. No 01. Ratios Particulars (Rs in millions) Current Assets =18,016.60 Current Liabilities =15,953.90 Values Remarks

Net Working Capital = Current assets-Current liabilities

2062.7

Liquidity position is good.

Current Ratio = 02. Current Assets Current Liabilities AcidtestorQuickratio= 03. QuickAssets CurrentLiabilities Debt-EquityRatio= 04. Longtermdebt ShareholdersEquity InterestCoverage= 05. Operating Profit Interest Operating Profitmargin= 06. OperatingProfit*100 Sales

Current Assets =18,016.60 Current Liabilities =15,953.90

1.12

It is not satisfactory.

Quick Assets =11592.2 Current Liabilities =15,953.90

It is not satisfactory. 0.72

Totaldebt =35077.2 ShareholderEquity =24,967.30

1.40

It is good.

Operating Profit =14,098.10 Interest =1,731.90

8.14

It is not safe.

OperatingProfit =14,098.10 Sales =35,230.80

40%

It is satisfactory.

Sl. No 07.

Ratios

Particulars (Rsin millions) Gross Profit =12,366.20 Sales =35,230.80

Values

Remarks

Gross Profit margin= GrossProfit*100 Sales Net Profit margin=

35%

It is satisfactory

08.

NetProfit*100 Sales Return on Assets =

Net Profit =7,029.90 Sales =35,230.80

19.9%

It is not satisfactory.

09.

Operating Profit*100 Average Assets Return on Investments=

Operating Profit =14,098.10 Average Assets =66821.95

21.09%

It is not satisfactory

10.

NetProfit beforeTax*100 Net Worth

Profit BeforeTax =9,359.60 NetWorth =24,967.30

37.48%

It is safe.

11.

Returnon NetWorth= NetProfit*100 Average Networth

Net profit =6,941.10 Average Net Worth =21707.2

31.9%

It is good.

Sl. No

Ratios

Particulars (Rs in millions) OperatingProfit =14,098.10 Avg.Capital Employed =80691.15

Values

Remarks

Returnon Capital Employed= 12. OperatingProfit*100 Average Capital Employed

17.47%

It is not safe.

Costof GoodsSoldRatio= 13. Cost of Goods Sold sales

Cost of goods sold =10,685.00 Sales =35,230.80

0.30

It is not satisfactory.

Operating Ratio= 14. Cost of Goods sold+other Expenses Sales FixedAssets turnover= 15.
Fixed assets sales

Other Expenses =6,480.60

0.48

It is not satisfactory

Fixed Assets =57949.4 Sales =35,230.80

0.61

It is not good.

Summary for Balance Sheet and Profit&Loss Statement

Table: Summaryof BalanceSheet 2010 (Rs in millions) Current Assets 18016.60 2011 (Rs in millions) 32995.7 2012 (Rs in millions) 51892.80 Remarks Current asset Position has increased. Liquidity position is very good. Fixed Assets have Increased due to increase in gross block. Current Liabilities Have increased marginally. Debts have Increased dueto more investment.

Fixed Assets

57949.4

64325

92973.1

Current Liabilities

3854.80

5819.40

9858.10

Long term Liabilities

35077.2

38633.5

49626.5

Table: Summary of Profit&Loss Statement 2010 (Rs in millions) 35,230.80 2011 (Rs in millions) 53,681.40 2012 (Rs in millions) 76,778.30 Remarks Sales position has doubled. Purchase of raw Material has increased. Operating profit has increased. PBT has increased. Net profit has increased140.7%

Sales

Raw Material Cost

10,685.00

17,274.00

34,194.20

Operating Profit

14,098.10

22,959.10

26,378.60

Profit Bef.Tax (PBT) Netprofit

9,359.60

16,584.20

21,362.00

6,941.10

13,928.70

16,708.00

Tata Steel
Table: Balance Sheet of TataSteel as at 31stmar-2012 Liabilities Share Capital Reserves & Surplus Net Worth(1) Secured Loans(2) Unsecured Loans(3) Total Liabilities(1+2+3) Assets Gross Block (-)Acc.Depreciation Net Block (A) Capital Workin Prgs. (B) Investments(C) Inventories Sundry Debtors Cash And Bank Loans And Advances (i) Current Liabilities Provisions (ii) Net Curr. Assets (i -ii) (D) Misc. Expenses(E) Total Assets (A+B+C+D+E) March-2012 March-20011 March-2010 (Rs in millions) (Rs in millions) (Rs in millions) 62,034.50 62,033.00 7,277.30 235,011.50 297,046.00 39,130.50 230,331.30 566,507.80 March-2012 200,570.10 90,624.70 109,945.40 34,876.80 423,717.80 34,804.70 6,359.80 15,906.00 58,846.10 115,916.60 89,657.60 29,341.90 118,999.50 -3,082.90 1,050.70 566,507.80 210,974.30 273,007.30 35,205.80 145,011.10 453,224.20 March-2011 164,795.90 82,234.80 82,561.10 43,674.50 41,031.90 26,049.80 5,434.80 4,650.40 345,828.40 381,963.40 68,422.60 29,135.20 97,557.80 284,405.60 1,551.10 453,224.20 133,684.20 140,961.50 37,589.20 58,864.10 237,414.80 March-2010 160,294.90 74,863.70 85,431.20 24,974.40 61,061.80 23,329.80 6,316.30 76,813.50 40,259.50 146,719.10 63,492.40 19,304.60 82,797.00 63,922.10 2,025.30 237,414.80

Table: Profit&Loss Statement of Tata Steel March-2012 (Rsin millions) Sales Other Income Total Income Raw Material Cost Excise Other Expenses Operating Profit Interest Name Gross Profit Depreciation Profit Bef.Tax Tax Net Profit Other NonRecurring Income Reported Profit Equity Dividend 243,483.20 3,053.60 246,536.80 82,794.40 24,952.10 43,972.30 91,764.40 14,895.00 76,869.40 9,734.00 70,189.00 21,148.70 49,040.30 2,977.10 52,017.40 11,689.50 March-2011 (Rsin millions) 196,544.10 3,472.80 200,016.90 60,248.00 25,370.20 28,480.50 82,445.40 9,290.30 73,155.10 8,346.10 68,281.80 23,802.80 44,479.00 2,391.30 46,870.30 11,689.30 March-2010 (Rsin millions) 174,526.60 4,851.40 179,378.00 56,799.50 23,041.80 25,547.80 69,137.50 2,512.50 66,625.00 8,192.90 63,283.50 20,404.70 42,878.80 -657.30 42,221.50 9,439.10

Ratio Analysis for 2012 Table Analysis of Financial Ratios for 2012 Sl. No. 01. Ratios Particulars (Rs in millions) Current Assets =115,916.60 Current Liabilities =118,999.50 Values Remarks

Net Working Capital = Current assets- Current liabilities

-3082.9

Liquidity available is less.

Current Ratio = 02. CurrentAssets CurrentLiabilities Acidtest or Quick ratio= 03. QuickAssets CurrentLiabilities Debt-EquityRatio= 04. Longterm debt Shareholders Equity Interest Coverage= 05. Operating Profit Interest Operating Profit margin= 06. Operating Profit*100 Sales

Current Assets =115,916.60 Current Liabilities =118,999.50

0.97

It is not safe.

Quick Assets =81111.9 Current Liabilities =118,999.50

0.68

It is not safe.

Total debt =269461.8 Shareholder Equity =297,046.00

0.91

It is good.

Operating Profit =91,764.40 Interest =14,895.00

6.16

It is not safe.

Operating Profit =91,764.40 Sales =243,483.20

37%

It is good.

Sl. No. 07.

Ratios

Particulars (Rs in millions) Gross Profit =76,869.40 Sales =243,483.20

Values

Remarks

Gross Profit margin= Gross Profit*100 Sales Net Profit margin=

31.57%

It is good.

08.

Net Profit*100 Sales Return on Assets =

Net Profit =52,017.40 Sales =243,483.20

21.36%

It is not good.

09.

Operating Profit*100 Average Assets ReturnonInvestments=

Operating Profit =91,764.40 Average Assets =616843.75

14.87%

It is not good.

10.

Profit BeforeTax*100 Networth

Profit BeforeTax =70189 Net Worth =297046

23.62%

It is not satisfactory

11.

Return on NetWorth= NetProfit*100 Average Networth

Net profit =49040.30 Average Net Worth =285026.65

17.20%

It is not good.

Sl. No

Ratios

Particulars (Rs in millions) Operating Profit =91,764.40 Avg.Capital Employed =725122.4

Values

Remarks

Return on Capital Employed= 12. Operating Profit*100 Average Capital Employed

12.65% It is not good.

Cost of Goods Sold Ratio= 13. Cost of Goods Sold Sales

Cost of goods sold =82,794.40 Sales =243,483.20

0.34

It is not satisfactory

Operating Ratio= 14. Cost of Goods sold+other Expenses Sales Fixed Assets turnover= 15.
Fixed assets
Sales

Other Expenses =43,972.30

0.52

It is not satisfactory

Fixed Assets =568540 Sales =243,483.20

0.42

It is satisfactory

Ratio Analysis for2011 Table: Analysis of Financial Ratios for 2011 Sl. No. 01. Ratios Particulars (Rs in millions) Current Assets =381963.40 Current Liabilities =97557.80 Current Assets =381963.40 Current Liabilities =97557.80 Values Remarks

Net Working Capital = Current assets-Current liabilities

284405.6

Liquidity position is good.

Current Ratio = 02. Current Assets Current Liabilities Acid testor Quick ratio= 03. Quick Assets Current Liabilities Debt-EquityRatio= 04. Longterm debt Shareholder s Equity Interest Coverage= 05. OperatingProfit Interest Operating Profit margin= 06. Operating Profit*100 Sales

3.92

It is safe

Quick Assets =355913.6 Current Liabilities =97557.80

3.64

It is satisfactory

Total debt =180216.9 Shareholder Equity =273007.30

0.66 It is not safe

Operating Profit =82445.40 Interest =9290.30

8.87

It is not satisfactory

Operating Profit =82445.40 Sales =196544.10

41%

It is satisfactory

Sl. No. 07.

Ratios

Particulars (Rsin millions) Gross Profit =73155.10 Sales =196544.10

Values

Remarks

Gross Profit margin= Gross Profit*100 Sales Net Profit margin=

37.22%

It is good.

08.

Net Profit * 100 Sales Return on Assets =

Net Profit =46870.30 Sales =196544.10

23.8%

It is not satisfactory.

09.

Operating Profit*100 Average Assets Return on Investments=

Operating Profit =82445.40 Average Assets =433708.7

19%

It is not safe.

10.

Profit before Tax*100 Net worth

Profit BeforeTax =68281.80 Net Worth =273007.30

25.01%

It is not good.

11.

Return on NetWorth= Net Profit*100 Average Net worth

Net profit =44479 Average Net Worth =206984.4

21.48%

It is not satisfactory

Sl. No.

Ratios

Particulars (Rs in millions) Operating Profit =82445.40 Avg.Capital Employed =523886.1

Values

Remarks

Return on Capital Employed= 12. Operating Profit*100 Average Capital Employed

15.73%

It is not safe

Costof Goods Sold Ratio= 13. Cost of Goods Sold Sales

Cost of goods sold =60248 Sales =196544.10

0.30

It is not satisfactory

Operating Ratio= 14. Cost of Goods sold + otherExpenses Sales Fixed Assets turnover= 15.
Fixed assets sales

Other Expenses =28480.50

0.45

It is not satisfactory

Fixed Assets =167267.5 Sales =196544.10

1.17

It is not safe

Ratio Analysis for2010 Table: Analysis of Financial Ratios for 2010 Sl. No. 01. Ratios Particulars (Rs in millions) Current Assets =146,719.10 Current Liabilities =82,797.00 Current Assets =146,719.10 Current Liabilities =82,797.00 Values Remarks

Net Working Capital = Current assets-Current liabilities

63922.1

Liquidity position is good.

Current Ratio = 02. Current Assets Current Liabilities Acid test or Quick ratio= 03. Quick Assets Current Liabilities Debt-Equity Ratio= 04. Long term debt Shareholder s Equity Interest Coverage= 05. Operating Profit Interest Operating Profit margin= 06. Operating Profit *100 Sales

1.77

It is not satisfactory.

Quick Assets =123389.3 Current Liabilities =82,797.00

1.49

It is safe.

Total debt =96453.3 Shareholder Equity =140,961.50

0.68

It is not safe.

Operating Profit =69,137.50 Interest =2,512.50

27.51

It is not satisfactory.

Operating Profit =69,137.50 Sales =174,526.60

39.6%

It is good.

Sl. No. 07.

Ratios

Particulars (Rs in millions) Gross Profit =66,625.00 Sales =174,526.60

Values

Remarks

Gross Profit margin= Gross Profit *100 Sales

38.17%

It is satisfactory.

Net Profit margin= 08. Net Profit*100 Sales

Net Profit =42,221.50 Sales =174,526.60

24.19%

It is not satisfactory.

Returnon Assets = 09. Operating Profit Average Assets

Operating Profit =69,137.50 Average Assets =253753.3

27.24%

It is not good.

Return on Investments= 10. Profit Before Tax*100 Net Worth

Profit Before Tax =63,283.50 Net Worth =140,961.50

44.89%

It is safe.

11.

Return on Net Worth= Net Profit * 100 Average Net worth

Net profit =42,878.80 Average Net Worth =119257.25

35.95%

It is good.

Sl. No.

Ratios

Particulars (Rs in millions) Operating Profit =69,137.50 Avg.Capital Employed =329720.95

Values

Remarks

Return on Capital Employed= 12. Operating Profit*100 Average Capital Employed

20.96%

It is not satisfactory.

Cost of Goods Sold Ratio= 13. Cost of Goods Sold Sales

Cost of goods sold =56,799.50 Sales =174,526.60

0.32

It is not good.

Operating Ratio= 14. Cost of Goods sold+other Expenses Sales Fixed Assets turnover= 15.
Fixed assets sales

Other Expenses =25,547.80

0.47

It is not good.

Fixed Assets =171467.4 Sales =174,526.60

1.01

It is not safe.

Summary for Balance Sheet and Profit&Loss Statement Table: Summaryof BalanceSheet 2010 (Rs in millions) Current Assets 146719.10 2011 (Rs in millions) 381963.40 2012 (Rsin millions) 115916.60 Remarks Short term liquidity Available is very less.

Fixed Assets

171467.4

167267.5

568540

Fixed Assets have increased due to increase in investment. Substantial increase In liabilities. Liquidity position is not good. Debts have increased because of more investment.

Current Liabilities

82797

97557.80

118999.50

Long term Liabilities

96453.3

180216.9

269461.8

Table: Summary of Profit&Loss Statement 2010 (Rs in millions) 174,526.6 2011 (Rs in millions) 196,544.10 2012 (Rs in millions) 243,483.20 Remarks Sales have Increased by 39.5 % Expenses have increased.

Sales

Raw Material Cost

56,799.50

60,248.00

82,794.40

Operating Profit

69,137.50

82,445.40

91,764.40

Operating profit has increased. PBT has increased. Net profit has Increased marginally.

Profit Bef. Tax (PBT) Net profit

63,283.50

68,281.80

70,189.00

42,878.80

44,479.00

49,040.30

FINDINGS
Comparison of Current ratio of Tata Steel and Jindal Stainless Ltd. from 2007-12
Table: Comparison of Current ratio JSL Dec 2007-08 TATA STEEL 0.71 REMARKS JSL has a Better ratio JSL has a Better ratio Tata Steel has a Better ratio TATA STEEL has a better ratio JSL has a better Ratio

1.34

Dec 2008-09 Dec2009-10 Dec 2010-11 Dec2011-12

1.26

0.72

1.1

1.77

1.5

3.92

1.26

0.97

From the above table, it can be concluded that current ratio of JSL Ltd. Was always more than 1 from 2007-12. Short term liquidity of Jindal Stainless Ltd. Was good as current ratio was more than 1. Liquidity position of Tata steel was not satisfactory as the ratio varied from 0.71 to 0.97 in five years.

In the period of 5 years JSL has improved its liquidity position compared to TATA STEEL, while a position of Tata Steel has come down. Current ratio of Tata Steel decreased steeply from 2007 -09 due toitsdecrease in current assets position.

Comparison of Debt Equity ratio JSL and TATA STEEL Companies from 2007-12 Table: Comparison of DebtEquity ratio JSL TATA STEEL Remarks

Dec2007-08 Dec 2008-09 Dec2009-10 Dec2010-11 Dec2011-12

1.13

0.38

JSL has a better ratio

1.48

0.25

JSL has a better ratio

1.4

0.68

JSL has a better ratio

0.66

JSL has a better ratio JSL & Tata Steel has a Better ratio

0.91

0.91

From table it can be seen that Debt position of JSL was satisfactory as the ratio varied from 1.13 to 0.91 from 2007-12 because of increasing investment. However D-E ratio of Tata Steel remained less than 1 from 2007-12 as their debts were paid off. JSL has the highest debt equity ratio of 1.48 and 1.40 from 2008-09 compared to TATA STEEL.Tata Steel has improved its ratio from 0.38 to 0.91 in five years.Though owner s share in the company has decreased but more outsiders have started investing in the company and that has lead to desirable ratio.

Comparison of Net Profit margin of JSL and TATA STEEL companies from 2007-12 Table: Comparison of Net Profit Margin JSL TATA STEEL REMARKS

Dec2007-08

22.88%

23.97%

TATA STEEL has a better net profit margin. TATA STEEL has a better net profit margin. TATA STEEL has a better net profit margin. TATA STEEL has a better net profit margin. TATA STEEL has a better net profit margin.

Dec2008-09

22.33%

23.17%

Dec2009-10

19.9%

24.19%

Dec, 2010-11

23.04%

23.8%

Dec, 2011-12

20.01%

21.36%

From Table it can be seen that TATA STEEL has the highest profit margin in all the five years which is because of their increase in sales. Profit Margin of GMDC came down from 28.04% to 23.6% from 2007 -12 . Though sales of the company increased , their profit percentage decreased from 2007-12 due to their decrease in net profit.

Comparison of ROI of Different Companies from 2007-12 Table : Comparison of ROI JSL Tata Steel Remarks Tata steel has a better ratio TATA STEEL has a Better ratio TATA STEEL has a better ratio JSL has a Better ratio JSL has a Better ratio

Dec 2007-08

52.31%

74.57%

Dec 2008-09 Dec2009-10 Dec2010-11 Dec2011-12

39.64%

53.28%

37.48%

44.89%

44.14%

25.01%

39.44%

23.62%

From the above table it can be seen that ROI of Tata Steel was highest in 2004-05 with 74.57% and then it declined to 23.62%. Similarly ROI of JSPL decreased from 52.31 % to 39.41 % due to significant increase in its expenses.

CONCLUSION Analysis and interpretation of financial statements is an important tool in assessing companys performance. It reveals the strengths and weaknesses of a firm. It helps the clients to decide in which firm the risk is less or in which one they should invest so that maximum benefit can be earned. It is known that investing in any company involves also to risk.So before putting up money in any company one must have thorough knowledge about its past records and performances.Based on thedata available the trend of the company can be predicted in near future. This project mainly focuses on the basics of different types of financial statements. Balance Sheet and Profit & Loss statements of different coal and non coal mining companies have been studied. Short term liquidity position of JSL in 2010 was good. However, current ratio, quick ratio, net profit margin, return on assets, return on investments and return on capital employed were unsatisfactory. The ratios that are found to be desirable are debt-equity ratio, operating profit margin and gross profit margin. In 2011-12, networking capital available with the company was adequate. The ratios that were found to be satisfactory are quick ratio, debt-equity ratio, return on investments, return on net worth, operating profit margin and gross profit margin. Current ratio, return on capital employed, return on assets and net profit margin of the company were unacceptable. For Tata Steel in 2010, networking capital, quick ratio, return on investments, return on net worth, operating profit margin and gross profit margin of the company were satisfactory. However, debtequity ratio, current ratio, net profit margin, return on capital employed and Return on assets were undesirable. In 2011, only companys current ratio improved due to substantial increase in current assets position. In 2012, networking capital available was inadequate. Companys debt-equity ratio, operating profit margin and gross profit margin were desirable and current ratio, return on investments, return on net worth, return on capital employed and return on assets were found to be unsatisfactory.

In this project, comparison of different ratios viz. Current ratio, debt-equity ratio, net profit margin and return on investment of all the companies from 2007-12 has been done. It was observed Current ratio of Jindal Stainless Ltd. Was satisfactory as it remained more than 1 for all the five years. Liquidity position of Tata steel was not satisfactory as the ratio varied

marginally from 0.71 to 0.97 in five years. Debt position of JSL was satisfactory as the ratio varied from 1.13 to 0.91 from 2007-12. However D E ratio of Tata Steel was less than 1 in five years as their debts were paid off. Though sales of the company JSL and Tata Steel increased, their profit percentage decreased from 2007-12 due to their decrease in net profit. ROI of Tata Steel was highest in 2007-08 with 74.57% and then it declined to 23.62%. Similarly ROI of JSL decreased from 52.31% to 39.44%.

BIBLIOGRAPHY
Khan, M.Y. (1988). Financial Management, Tata Mc-Graw Hill , New Delhi, st 1 edition Bhattacharya, Asish..(2007).IntroductiontoFinancialStatementAnalysis,Elsevier,NewDelhi, 1st edition Wanless,R.M.(1983).FinanceForMineManagement,Chapman&HallLtd,NewYor k, 1st edition Khanna,O.P.(1999).IndustrialEngineeringAndmanagement,DhanpatRai,1 edition ,NewDelhi
st

Web References:
http://en.wikipedia.org/wiki/Financial_statements http://en.wikipedia.org/wiki/Balance_sheethttp://en.wikiped ia.org/wiki/Asset http://en.wikipedia.org/wiki/Financial_statementhttp://en.wi kipedia.org/wiki/Unsecured_loan http://en.wikipedia.org/wiki/Income_statementhttp://en.wiki pedia.org/wiki/Cash_flow_statement