Question
In: Accounting
Choose two companies in the same industry whose financial statements are available online. Complete several financial...
Choose two companies in the same industry whose financial statements are available online. Complete several financial ratios for each company and compare them. What did your analysis tell you about these companies? What sorts of decisions would this analysis help you make; such as buying stocks, considering accepting an employment offer, etc.?
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Expert Solution
| Reliance Industries ltd | Hindustan Petroleum Corporation | ||||
| Investment Valuation Ratios | Mar-19 | Investment Valuation Ratios | Mar-19 | ||
| Face Value | 10 | Face Value | 10 | ||
| Dividend Per Share | 6.5 | Dividend Per Share | 15.9 | ||
| Operating Profit Per Share (Rs) | 91.91 | Operating Profit Per Share (Rs) | 75.09 | ||
| Net Operating Profit Per Share (Rs) | 585.32 | Net Operating Profit Per Share (Rs) | 1,805.97 | ||
| Free Reserves Per Share (Rs) | -- | Free Reserves Per Share (Rs) | -- | ||
| Bonus in Equity Capital | 81.85 | Bonus in Equity Capital | 95.1 | ||
| Profitability Ratios | Profitability Ratios | ||||
| Operating Profit Margin(%) | 15.7 | Operating Profit Margin(%) | 4.15 | ||
| Profit Before Interest And Tax Margin(%) | 12.53 |
|
3.04 | ||
| Gross Profit Margin(%) | 12.85 | Gross Profit Margin(%) | 3.06 | ||
| Cash Profit Margin(%) | 12.01 |
|
3.26 | ||
| Adjusted Cash Margin(%) | 12.01 | Adjusted Cash Margin(%) | 3.26 | ||
| Net Profit Margin(%) | 9.47 | Net Profit Margin(%) | 2.19 | ||
| Adjusted Net Profit Margin(%) | 9.24 | Adjusted Net Profit Margin(%) | 2.17 | ||
| Return On Capital Employed(%) | 10.15 | Return On Capital Employed(%) | 18.88 | ||
| Return On Net Worth(%) | 8.67 | Return On Net Worth(%) | 21.39 | ||
| Adjusted Return on Net Worth(%) | 8.67 | Adjusted Return on Net Worth(%) | 21.39 | ||
| Return on Assets Excluding Revaluations | 639.44 | Return on Assets Excluding Revaluations | 184.9 | ||
| Return on Assets Including Revaluations | 639.44 | Return on Assets Including Revaluations | 184.9 | ||
| Return on Long Term Funds(%) | 10.91 | Return on Long Term Funds(%) | 25.48 | ||
| Liquidity And Solvency Ratios | Liquidity And Solvency Ratios | ||||
| Current Ratio | 0.44 | Current Ratio | 0.53 | ||
| Quick Ratio | 0.4 | Quick Ratio | 0.42 | ||
| Debt Equity Ratio | 0.39 | Debt Equity Ratio | 0.89 | ||
| Long Term Debt Equity Ratio | 0.29 | Long Term Debt Equity Ratio | 0.4 | ||
| Debt Coverage Ratios | Debt Coverage Ratios | ||||
| Interest Cover | 5.86 | Interest Cover | 13.86 | ||
| Total Debt to Owners Fund | 0.39 | Total Debt to Owners Fund | 0.89 | ||
| Financial Charges Coverage Ratio | 6.94 |
|
18.01 | ||
| Financial Charges Coverage Ratio Post Tax | 5.69 | Financial Charges Coverage Ratio Post Tax | 13.45 | ||
| Management Efficiency Ratios | Management Efficiency Ratios | ||||
| Inventory Turnover Ratio | 9.08 | Inventory Turnover Ratio | 14.7 | ||
| Debtors Turnover Ratio | 32.88 | Debtors Turnover Ratio | 49.03 | ||
| Investments Turnover Ratio | 9.08 | Investments Turnover Ratio | 14.7 | ||
| Fixed Assets Turnover Ratio | 1.9 | Fixed Assets Turnover Ratio | 5.4 | ||
| Total Assets Turnover Ratio | 0.67 | Total Assets Turnover Ratio | 5.21 | ||
| Asset Turnover Ratio | 0.76 | Asset Turnover Ratio | 5.68 | ||
| Average Raw Material Holding | -- | Average Raw Material Holding | -- | ||
| Average Finished Goods Held | -- | Average Finished Goods Held | -- | ||
| Number of Days In Working Capital | -68.07 | Number of Days In Working Capital | -20.22 | ||
| Profit & Loss Account Ratios | Profit & Loss Account Ratios | ||||
| Material Cost Composition | 75.44 | Material Cost Composition | 90.97 | ||
| Imported Composition of Raw Materials Consumed | -- | Imported Composition of Raw Materials Consumed | -- | ||
| Selling Distribution Cost Composition | -- | Selling Distribution Cost Composition | 0.07 | ||
| Expenses as Composition of Total Sales | 57.76 | Expenses as Composition of Total Sales | 1.92 | ||
| Cash Flow Indicator Ratios | Cash Flow Indicator Ratios | ||||
| Dividend Payout Ratio Net Profit | 10.1 | Dividend Payout Ratio Net Profit | 22.74 | ||
| Dividend Payout Ratio Cash Profit | 7.77 | Dividend Payout Ratio Cash Profit | 15.16 | ||
| Earning Retention Ratio | 89.9 | Earning Retention Ratio | 77.26 | ||
| Cash Earning Retention Ratio | 92.23 | Cash Earning Retention Ratio | 84.84 | ||
| AdjustedCash Flow Times | 3.44 | AdjustedCash Flow Times |
2.78 |
||
eliance Industries Limited (RIL) operates in multiple business segments namely petrochemicals, refining and marketing, textiles, exploration and production etc. The petrochemicals segment includes production and marketing operations of petrochemical products.
Hindustan Petroleum Corporation Limited (HPCL) is the third largest oil refining and marketing company in India. Apart from the 14 MMTPA (million tonnes per annum) of refining capacity, it has strong retail presence with over 9,127 retail outlets spread across the country. Further, the company has nearly 29 m customers in the fast growing LPG business. The company has stakes in HPCL-Mittal Energy (49%), MRPL (17%), Bhagyanagar Gas (25%) and Aavantika Gas (25%).
Short decision
Buying - reliance
Accepting an job offer - Hindustan petro
ekkarill92 answered 1 year agoRelated Solutions
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Data from the current year-end balance
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