Introduction:

Indian oil began operations in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was formed in 1964; with the merger of Indian Refineries Ltd. Indian Oil is biggest oil producer and marketers in India. Indian Oil Corporation Limited or Indian Oil is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India. The company is the worlds 83 rd largest public corporation, according to the Fortune Global 500 list, and largest public corporation in India. Following table shows other information about company: Type : Public Industry: Oil and Gas Owner: Government of India Founded in : 1964 Head Quarter: Mumbai , Maharashtra, India Chairman of IOCL.: Shri R.S Bhutola Products: Fuel ,Lubricants, Petrochemicals Trade as :BSE:530965, NSE:IOC

Production:
Indian oils products range covers Indane gas ,Natural gas, Auto gas, Petrol/Gasoline ,Diesel/Gas oil, Crude oil ,Jet fuel ,Kerosene, Bitumen, Petrochemical. Special product includes SARVO lubricants & greases.

Services:
Indian Oil Corporation is concern with refining, marketing, research and development, training activities.

Joint Venture with: Company

AVI Oil Pvt. Ltd. Delhi Aviation Fuel Facility Pvt. Ltd. Green Gas Ltd. Indo Cat Pvt. Ltd. IOT Infrastructure & Energy services Ltd. Indian Oil Skytanking Limited Petronet Ltd. NPCIL- Indianoil Nuclear Power Corporation Ltd.

Date of Incorporation
04.11.1993 28.03.2010 07.10.2005 01.06.2006 28.08.1996 21.08.2006 02.04.1998 06.04.2011

Balance sheet data for the year march-2012 and March-2011: Particulars
Net Worth Total Liabilities Net Block Total Current Assets Total Current Liabilities Net Current Assets Total Assets

Mar-12
57,876.70 128,200.63 60,119.33 117,627.19 81,659.12 35,968.07 128,200.63

Mar-11
55,332.32 108,066.19 58,187.40 84,903.08 67,204.64 17,698.44 108,066.19

Profit and loss related data for the year march-2012 and March-2011:
Particulars Revenue From Operations(Net) Total Revenue Total Expenses: Profit Before Prior Period ,Exceptional Items And Tax Profit Before Exceptional Items And Tax Profit Befor Tax Profit Mar-12 408924 412111. 2 400678. 3 11432.8 9 11162.6 4 3454.82 3685.48 Mar-11 309797 313245 303060 10184.9 10255.7 10255.7 7972.48

Common Size Statement of Balance Sheet: Particulars

Liabilities Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans Total Liabilities Assets Gross Block (-) Acc. Depreciation Net Block Capital Work In Progress. Investments. Inventories Sundry Debtors Cash And Bank Loans And Advances Total Current Assets Current Liabilities Provisions Total Current Liabilities Net Current Assets

Mar-12 Percentage
2427.95

Mar-11 Percentage
2,427.95 52,904.37
55,332.32 2.246725 48.95552 51.20225 18.85849 29.93926 100 85.7777 31.93348 53.84422 11.67844 18.08592 45.60586 8.207609 1.197803 23.55454 78.56581 55.92978 6.258627 62.18841 16.37741

55,448.75
57,876.70

13,045.97 57,277.96
128,200.6 3

1.893867 43.25154 45.14541 10.17621 44.67838 100 77.57798 30.68326 46.89472 10.47949 14.56971 44.32833 12.09266 0.239476 35.09196 91.75243 51.88007 11.81628 63.69635 28.05608

20,379.65 32,354.22
108,066.1 9

99,455.46 39,336.13
60,119.33

92,696.69 34,509.29
58,187.40

13,434.77 18,678.46 56,829.20 15,502.87 307.01 44,988.11

117,627.1 9

12,620.44 19,544.76 49,284.52 8,869.65 1,294.42 25,454.49

84,903.08

66,510.58 15,148.54
81,659.12 35,968.07

60,441.18 6,763.46
67,204.64 17,698.44

Misc. Expenses Total Assets

128,200.6 3

0 100

15.15
108,066.1 9

0.014019 100

Common Size Statement Of Profit And Loss Account: Particulars

Revenue From Operations(Gross) Less: Excise Duty Revenue From Operations(Net) Other Income Total Revenue Expenses: Cost Of Material Consumed Purchase Of Stock-In-Trade Change In Inventory Employee Benefit Expenses Financial Cost Depreciation And Amortization Other Expenses Total Expenses: Profit Before Prior Period ,Exceptional Items And Tax Income/(Expenses) Pertaining To Prior Years(Net) Profit Before Exceptional Items And Tax Exceptional Items Profit Before Tax Tax Expenses Profit For The Period

Mar-12 Percentage
438023.8 29099.73 408924 3187.13 412111.2 207632 157250.8 -3470.95 5300.09 5894.65 5309.26 22762.43 400678.3 11432.89 270.25 11162.64 -7707.82 3454.82 -269.95 3724.77 100 6.6434 93.3565 0.7276 94.0842 47.4019 35.9000 -0.7924 1.2100 1.3457 1.2120 5.1966 91.4740 2.6101 0.0616 2.5484 -1.7596 0.7887 -0.0616 0.8503

Mar-11 Percentage
340658 30861 309797 3447.69 313245 150042 127654 -5613.8 6734.24 2985.7 4932.62 16325.4 303060 10184.9 -70.88 10255.7 10255.7 2028.36 8227.38 100 9.0592 90.9408 1.0120 91.9528 44.0447 37.4728 -1.6479 1.9768 0.8764 1.4479 4.7923 88.9631 2.9897 -0.0208 3.0105 3.0105 0.5954 2.4151

Less: Share Of Maturity Profit

39.29 3685.48

0.0089 0.8413

254.9 7972.48

0.0748 2.3403

Calculation of Various Ratios:

1. EPS = PAT/ No. of equity shares

2012 EPS=4265.27/242.795 = 17.55 Interpretation:

2011 EPS=8085.62/242.795 =33.30

Earnings per Share is decreased by 47.30% in 2012.It is not good condition for share holders. It also shows that company was not performing well in financial year 2011-2012.

2. Book Value=Net worth/No. of equity shares

2012 Book Value=62310.62/242.795 =256.22 Interpretation:

2011 Book Value=63232.88/242.795 =260.44

Book value per share is Rs.260.44 in financial year 2010-2011 which is goes down at Rs. 256.22. In 2011-2012.It reduce by 1.62 %.

3. Net working capital=Current Assets-Current Liabilities

2012 Net working capital=125977.44-132518.95 = (6541.51) Interpretation:

2011 Net working capital=102286.67-100024.18 =2262.49

In financial year 2011-12, Net Working Capital is having negative figures which reveal that company is facing financial crises for the short term operations. This figure is admirable in 2010-11.

4. Current Ratio=Current assets/Current Liabilities

2012 Current Ratio=125977.44/132518.95 =0.951

2011 Current Ratio=102286.67/100024.18 =1.023

Interpretation: Current ratio is 0.951 in 2011-12, which is 1.023 in financial year 2010-11.The current Ratio is not up to the mark in financial year 2011-12.

5. Acid test ratio=(Current Assets-Stock)/Current Liabilities

2012

2011

Acid test ratio =(125997.44-63851.04)/132518.95 =0.4688 Interpretation:

Acid test ratio =(102286.67-54906.02)/100024.18 =0.4737

This ratio shows liquidity condition of the firm. In the financial year 2011-12, the ratio is 0.4688.it shows that if there are Rs.100 liabilities then only Rs.46.88 is available to fulfill it. This condition is somewhat same as financial year 2010-11.

6. Cash Ratio=(Cash in bank+ marketable securities)/Current Liabilities

2012 Cash Ratio=(821.95+13774.83)/132518.95 =0.1101 Interpretation:

2011 Cash Ratio=(1537.83+15003.53)/100024.18 =0.1653

This ratio shows availability if cash to pay the current liabilities. This ratio is also not acceptable in both the financial years. Cash ratio is quite higher in the year 2010-11 as compare to 2011-12.

7. Debt Equity Ratio=( Long term Debt+ Deferred tax liabilities )/Equity

2012 Debt Equity Ratio=24991.17/62210.62 = 0.4 Interpretation:

2011 Debt Equity Ratio=25009.47/63232.88 =0.3955

This ratio is not varies highly in the year 2011-12 with respect to 2010-11.We can say that it is stable in both the years. We can say that when equity is Rs.100, the debt is Rs.40. It shows that company doesnt borrowed higher fund for their operations.

8. Debt Assets Ratio=Total Debt /Total Asset

2012 Debt Assets Ratio=157510.12/219827.22 =0.7165 Interpretation:

2011 Debt Assets Ratio=125033.65/184601.89 =0.6773

Debt Assets ratio is 0.6773 in financial year 2010-11 which is rise by 5.79%.But the total debt is not match to the total Asset.

9. Interest Coverage Ratio = EBIT/Interest

2012 Interest Coverage Ratio=17327.54/5894.65 = 2.9395 Interpretation:

2011 Interest Coverage Ratio=13170.56/2985.7 =4.4112

This ratio shows in the year 2010-11,EBIT is 4.4112 times higher than the interest but in the year 2011-12 it is only 2.9395 time higher than the interest which is not good for company.

10.Inventory Turnover Ratio= Cost Of Goods Sold/Average Inventory

2012 Inventory Turnover Ratio =238519.18/59378.53 = 4 Times Interpretation:

2011 Inventory Turnover Ratio =183047.67/47996.79 =4 Times Appx.

Inventory turnover ratio is 4 times in a year and it is same for both the above financial years. So we can say that the company may suffer from high carrying cost.

11.Debtors Turnover Ratio=Net Credit Sales/Average Debtors

2012 Debtors Turnover Ratio =408924.03/9618.21 =43 Times Appx.

2011 Debtors Turnover Ratio =309797.02/6630.39 =47 Times Appx.

Interpretation: Debtors turnover ratio is 43 times approximately for the year 2011-12 and 47 Times approximately for the year 2010-11.Thr debtors turnover ratio is decrease so it good for the firm.

12.Fixed Assets Turnover Ratio=Net Sales/Average Fixed Assets

2012 Fixed Assets Turnover Ratio =408924.03/76777.28 =5 Times Interpretation:

2011 Fixed Assets Turnover Ratio =309797.02/53254.84 =6 Times

This Ratio shows that Net sales is 5 times higher in the year 2011-12 which is not good as compare to the year 2010-11 which is having 6 times more Net sales than the Fixed assets in that year.

13.Gross Profit Margin= (Gross Profit/ Net Sales)*100

2012 Gross Profit Margin=11703.14/408924.03 = 2.86 % Interpretation:

2011 Gross Profit Margin=10113.98/309797.02 =3.20 %

Gross profit margin is very less in both the years. The gross profit margin is 3.2% in 2010-11 which is decrease by 10.63% in 2011-12.It shows operating inefficiency of the firm.

14.Net Profit Margin= (Net Profit/ Net Sales)*100

2012 Net Profit Margin=4265.27/408924.03 = 1.04 % Interpretation:

2011 Net profit Margin = 8085.62/309797.02 =2.61 %

Net profit margin is also very less in both the years.Net profit margin ins 2.61% in 201011 which is become 1.04% in 2.11-12.It is not good for the company as well as for the stack holder of the company.

15.Return on Assets =(PAT/ Average Total Assets)*100

2012 Return on Assets = (4265.27/161056.945)*100 =2.65 % Interpretation:

2011 Return on Assets =(8085.62/116792.49)*100 =6.92%

Return on Assets is 6.92% in the year 2010-11 which is reduced in 2011-12 by 62% .It shows inefficiency of the firm.

16.Return on Capital Employed=PBIT(1-T)/Average Total Assets

2012 Return on Capital Employed =17327.54(1-0.35)/161056.945 =0.0699 Interpretation:

2011 Return on Capital Employed =13170.56(1-0.35)/116792.49 =0.0739

Return on capital employed is 7.39% in The year 2010-11 which is slightly decrease in the year 2011-12 by 5.41%.

17.Return on Equity= (PAT-preference shares dividend) /Net worth

2012 Return on Equity=4265.27/62210.62 =0.0685 Interpretation:

2011 Return on Equity=8085.62/63232.88 =0.1279

Return on equity is 0.1279 in the year 2010-11 which is reduced by 46.44% in financial year 2011-12. This may not be acceptable from the side of investors and it is also not good for the firm.

18.Net Profit margin=PAT/No. of shares

2012 Net Profit margin=4265.27/242.795 =17.567

2011 Net Profit margin=8085.62/242.795 =33.30

Interpretation: Net profit margin is Rs.33.30 per share in the year 2010-11.This margin is decrease by 47.26% in 2011-12. Decrease in profit margin is not good for the firm as well as for the investors.

19.Total Assets Turnover Ratio=Net sales/Average Total Asset

2012 Total Assets Turnover Ratio =408924.03/161056.945 =2.539 Times

2011 Total Assets Turnover =309797.02/116792.49 =2.65 Times

Interpretation: This Ratio shows that Net sales is 2.539 times higher than than the Total Fixed Assets in the year 2011-12 which is not good as compare to the year 2010-11 which is having 2.65 times more Net sales than the Total Fixed assets in that year.

20.Operating Leverage =Contribution/EBIT

2012 Operating Leverage =407417.41/17327.54 =23.5127 Interpretation:

2011 Operating Leverage =308576.57/13170.56 =23.4293

Operating Leverage shows ratio between contribution and EBIT. The operating leverage is somewhat same in both the financial year. As operating leverage is very high in both the financial year which shows high utilization of debt for operating activities of the firm.

21.Financial Leverage=EBIT/EBT

2012 Financial Leverage=17327.54/3995.32 =4.3370 Interpretation:

2011 Financial Leverage=13170.56/10113.98 =1.3022

Financial leverage is 1.3022 in the year 2010-11 which is increase in 2011-12 by more than 200% of previous year which shows that company is borrowing more funds for financing the business activities.

22.Combine leverage= Operating Leverage * Financial Leverage

2012 Combine leverage=23.5127*4.3370 =101.9746 Interpretation:

2011 Combine leverage=23.4293*1.3022 =30.5096

Combine leverage shows the overall debt used by the firm for it operating activities as well as financing activities. Combine leverage is very high in the year 2011-12 as compare to 2010-11.The combine leverage is increase in 2011-12 by more than 200% as compared to previous years. It may create problem for company in future.

23.Operating Cycle= Inventory period + Account receivable period

Inventory period=Average Inventory*365/COGS

2012 2011 Inventory period=59378.53*365/238519.18 Inventory period=47996.79*365/183047.67 =90 Days = 96 Days Account receivable period=Average Account receivable *365/Net Credit Sales

2012 Account receivable period =9618.21*365/408924.03 = 9 Days

2011 Account receivable period =6630.39*365/309797.02 = 9 Days

Operating Cycle: 2012 Operating Cycle=90 +9 = 99 Days Interpretation: Operating Cycle is 105 days in March-2011 which is reduced by 6 days in March-2012. It is occurs because of reduction in inventory period in the year 2011-12. 2011 Operating Cycle=96 + 9 =105 Days

24.Cash cycle=Operating cycle - Account payable period

Account payable period= Average Account Payable*365/Net credit purchase 2012 Account payable period =30783.185*365/212583.46 = 53 Days Cash Cycle: 2012 Cash Cycle =99 - 53 =46 Days 2011 Cash Cycle = 105 + 62 = 43 Days 2011 Account payable period = 44188.03*365/142930.445 = 62 Days

Interpretation: Company Collects is receivables in 43 Days in 2010-11. This period is increase by 3 days in 2011-12 at 46 days. It doesnt having major changes in operations of the firm in 2011-12 and 2010-11.

Conclusion:
The investors should take opportunity by investing in Oil and Gas sector because nowadays petrol products are necessary for us. It may result in good demand of such product in future. Investment in Indian Oil Corporation is risk as the records of the financial year 2011-12 is worse as compare to 2010-11. Earnings per share, book value per share is reduced in March 2012 as compare to preceding year.Net working capital is also shows negative figures which indicate financial crises for the short term period. Current ratio, acid test ratio and cash ratio are not up to the mark. It is also reveal the liquidity condition of the firm. Debt equity ratio is acceptable. Debtors turnover ratio is very high. Gross profit margin, Net profit margin is very low which is not good for the investors point of view. As operating leverage is very high in both the financial year which shows high utilization of debt for operating activities of the firm. Financial leverage is less as compare to operating leverage. Operating cycle is very long as compare to cash cycle because of long inventory storage period.