Indian Oil

INDIAN OIL RATIO ANALYSIS: LIQUIDITY RATIOS: These ratios footstep the firms ability to satisfy its short-term obligations. at that place are two key ratios in this segment. It is in alike manner called as the Acid Test Ratio. Working cap = original Assets ? underway Liabilities watercourse Ratio synopsis: Current ratio is a financial ratio that measures whether or non a club has enough resources to fix its debt over the adjoining business round of golf (usually 12 months) by comparability firms legitimate assets to its certain liabilities. unexceptionable trustworthy ratio determine vary from industry to industry. Generally, a current ratio of 2:1 is considered to be acceptable. The higher(prenominal) the current ratio is, the more qualified the fraternity is to pay its obligations. Current ratio is also abnormal by seasonality. If current ratio is bel low power train 1 (current liabilities exceed current assets), because the company may pass on problems paying its bills on time. However, low values do not indicate a scathing problem but should revive the management. One exception to the witness is considered fast-food industry because the inventory turns over much more quickly than the accounts payable becoming due. Current ratio gives an idea of companys in operation(p) efficiency.

A high ratio indicates safe liquidity, but also it can be a signal that the company has problems getting paid on its receivable or have dour inventory turnover, both symptoms that the company may not be efficiently using its current assets. As far as Indian Oil is concerned, their current ratio analyses for the last 5 years are s hown in the following figure: ! 2010: 0.76 2009: 0.61 2008: 0.84 2007: 0.79 2006: 0.83 exposition: Working Capital Analysis: winningsability Ratios: Net Profit Margin- Often referred to as a companys bread margin, bottom notation is the most mentioned term when discussing a companys profitability. darn undeniably an distinguished number, investors can easily see from...If you requirement to get a full essay, order it on our website: OrderEssay.net

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