Case Study on Financial Ration Analysis in Mining

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ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES

THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

Bachelor of Technology in Mining Engineering By

SUDIP DAS Roll: 10605038

DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA

2010

ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES

THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

Bachelor of Technology in Mining Engineering By

SUDIP DAS Roll: 10605038 Under the guidance of Prof. D.P.TRIPATHY

DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA

2010

National Institute of Technology Rourkela CERTIFICATE
This is to certify that the thesis entitled “ANALYSIS AND INTERPRETATION FINANCIAL STATEMENTS: CASE STUDIES” submitted by Sri Sudip Das, Roll No: 10605038 in partial fulfillment of the requirements for the award of Bachelor of Technology degree in Mining Engineering at the National Institute of Technology, Rourkela (Deemed University) is an authentic work carried out by him under my supervision and guidance. To the best of my knowledge, the matter embodied in the thesis has not been submitted to any other University/Institute for the award of any Degree or Diploma.

Date:

(Prof. D.P. TRIPATHY)

Dept. of Mining Engineering National Institute of Technology Rourkela-769008

ACKNOWLEDGEMENT

I wish to express my deep sense of gratitude and indebtedness to Dr. D.P.Tripathy, Department of Mining Engineering, N.I.T, Rourkela for introducing the present topic and for his inspiring guidance, constructive criticism and valuable suggestions throughout the project work. I am also thankful to all staff members of Department of Mining Engineering, NIT, Rourkela. Lastly, I would like to thank and express my gratitude towards my friends who at various stages had lent a helping hand.

Date:

(Sudip Das)

ABSTRACT
Financial statements are formal records of the financial activities of a business, person, or other entity and provide an overview of a business or person's financial condition in both short and long term. They give an accurate picture of a company’s condition and operating results in a condensed form. Financial statements are used as a management tool primarily by company executives and investor’s in assessing the overall position and operating results of the company. Analysis and interpretation of financial statements help in determining the liquidity position, long term solvency, financial viability and profitability of a firm. Ratio analysis shows whether the company is improving or deteriorating in past years. Moreover, Comparison of different aspects of all the firms can be done effectively with this. 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. Mining industries are capital intensive; hence a lot of money is invested in it. So before investing in such companies one has to carefully study its financial condition and worthiness. Unfortunately very limited work has been done on analysis and interpretation of financial statements of Indian for mining companies. An attempt has been carried out in this project to analyze and interpret the financial statements of five coal and non- coal mining companies. OBJECTIVES • • • • To understand, analyze and interpret the basic concepts of financial statements of different mining companies. Interpretation of financial ratios and their significance. Development of programs in C++ for calculation of different financial statements and financial ratios. Use of Tally 9.0 package for the analysis and interpretation of financial statements of mining companies.

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This project mainly focuses in detail the basic types of financial statements of different companies and calculation of financial ratios. Ratio analysis of five companies viz. ACC Ltd, Tata Steel, Jindal...
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