A Major Project Report on

Comparative Analysis of Financial

Statements of SAIL With Other Steel
Companies in India

Submitted To: Submitted By:

Mr. Deepak Kr. Adhana Tanureema Deb
42196701715
What is Finance?
 Finance is one of the most primary requisites of a business
and the modern management obviously depends largely
on the efficient management of the finance.
 Financial statements are prepared primarily for decision
making.
 They play a dominant role in setting the framework of
managerial decision.
 The term financial analysis is also known as analysis and
interpretation of financial statements’ refers to the process
of determining financial strength and weakness of the firm
by establishing strategic relationship between the items of
the balance Sheet, Profit and Loss account and other
operative data.
Financial Statement Analysis
 Analysis and interpretation of financial statement
therefore, refers to such a treatment of the information
contained in the Income Statement and Balance Sheet so
as to afford full diagnosis of the profitability and financial
soundness of the business.
 I have used Balance Sheet, Income Statement, Cash Flow
Statement and Ratio Analysis in my project.
About SAIL
 Steel Authority of India Limited (SAIL) is one of the
largest state-owned steel making company based in New
Delhi, India and one of the top steel makers in world,
headed by Shri P K Singh. With an annual turnover of
Rs.44, 452.41 Crores (FY2016-17).
 Incorporated on 24 January 1973, SAIL has 78,333
employees (as of 01-Jan-2018).
 With an annual production of 13.9 million metric tons,
SAIL is the 24th largest steel producer in the world.
 SAIL operates and owns 5 integrated steel plants at Bhilai,
Rourkela, Durgapur, Bokaro and Burnpur(Asansol) and 3
special steel plants at Salem, Durgapur and Bhadravathi.
 SAIL traces its origin to the Hindustan Steel Limited
(HSL) which was set up on 19 January 1954.
 The Ministry of Steel and Mines drafted a policy
statement to evolve a new model for managing industry.
 On this basis the concept of creating a holding company to
manage inputs and outputs under one roof was mooted.
 This led to the formation of The Steel Authority of India
Ltd incorporated on 24 January 1973 with an authorized
capital of Rs. 2,000 crore
Objectives of the Study
 To study the financial position of SAIL
 To analyze the financial stability and overall performance
of SAIL in general
 To analyze and interpret the trends as revealed by various
financial indicators of the SAIL in particular
 To analyze the profitability and solvency position of the
unit with existing tools of financial analysis
Scope of the Study
 The main scope of the study is to comparing the financial
statements of SAIL and its other competitors during the
year 2015-16 and 2016-17.
 The financial statements contain Balance Sheet, Income
Statement, Cash Flow Statements and ratio analysis.
 These statements help the firm to compare and analyze its
financial position in the market with other competitors and
to take corrective measures to increase the financial
liquidation of company.
Research Methodology
 PRIMARY DATA: Primary data was collected from
various people and their opinion and information for the
specific purposes of study helped to run the analysis.
 SECONDARY DATA: To make primary data collection
more specific, secondary data will help to make it more
useful. It helps to improve the understanding of the
problem.
 My project is totally based on secondary data in which I
have collected information from the annual reports of
SAIL and its competitors (Tata Steel, Bhushan steel and
Jindal Steel).
 Descriptive research is also used in this study because it
will ensure the minimization of the biasness and
maximization of reliability of data collected.
 I have used fact information already available through
financial statements of earlier years and analyze the sale to
make critical evaluation of the available material.
 Therefore, the research conducted is of both Descriptive
and Analytical in nature.
Data Analysis & Interpretation
 SAIL got good liquidity position due to increase in current
assets but it may affect the profitability of the company.
 SAIL has sufficient control over its depreciation which
shows and increases of only 11.56% in March 2017 over
March 2016.
 The Final Cash Flow is not very good and in a negative
state.
 The liquid ratio denotes the concern had achieved less
than the ratio of 1:1 in the financial year ending March
2016 and March 2017.
Competitor Analysis of SAIL with Tata Steel

 The share Capital of SAIL is increased by 55.6% as

compare to Tata Steel.
 The Depreciation of SAIL is decreased as compared to
Tata Steel which shows that the company has no control
over the efficiency of depreciation.
 The final Net Cash Flow is both negative or decreased in
nature which is bad for both the companies.
 The Inventory turnover ratio of SAIL is lesser as compared
to Tata Steel which indicates inefficient management of
inventories.
Conclusion
 The inventory turnover ratio is 3.17 is lower for SAIL
compared to its competitors which indicates the inefficient
management of inventories.
 The current ratio for SAIL is more than other companies
which shows that it has enough liquidity in comparison to
other competitors.
 We have done competitive analysis between Tata Steel,
Bhushan Steel and Jindal Steel on the basis of different
financial aspects in which we saw that SAIL needs to
improve its financial management in some aspects.
Recommendation
 SAIL should always try to maintain an adequate quantum
of net current assets in relation of current liabilities as to
keep a good amount of liquidity throughout the year.
 Inventory turnover ratio is lesser in SAIL compared to
other competitors which indicates inefficient management
of inventories. So it is advisable to keep less inventories to
minimize costs and improve efficiency.
 The company is more traditionally financed with low debt
and more of equity financing, so in future debt should be
preferred for financial to bring the ratio close to the ideal
ratio of 1:1.
Limitations
 The analysis and interpretation are based on secondary
data contained in the published annual reports of SAIL for
the study period.
 Ratio itself will not completely show the company’s good
or bad financial position.
 Due to the limited time available at the disposable of the
researcher the study has been confined for a period of 2
years (2015-16 & 2016-17).