UNIVERSITY OF CALCUTTA

ANNEXURE-I
SUPERVISOR’S CERTIFICATE

This is to certify that Mr. Somit Koley who is a student of B.Com

Honours in Accounting & Finance (under CBCS) of Nabagram
Hiralal Paul College under the University of Calcutta, CU ROLL: -
181612-21-0090, CU REG: - 612-1111-0702-18 has worked under
my supervision and guidance for his project work and prepared a
project report with the title “FINANCIAL STATEMENT ANALYSIS
OF TATA STEEL”.
The project report which he is submitting is his genuine and
original work to the best of my knowledge.

Date- SIGNATURE
Place- Name: - Prabir Dutta

Designation: - Associate professor of commerce

Department

2
 ANNEXURE-II
STUDENT’S DECLARATION

I hereby declare that the project work with the title “FINANCIAL
STATEMENT ANALYSIS OF TATA STEEL” submitted by me for the
partial fulfilment of the degree of B.Com Honours in Accounting &
Finance (under CBCS) under University of Calcutta is my original
work & has not been submitted earlier to any other University /
Institution for the fulfilment of the requirement for any course of
study.
I also declare that no chapter of this manuscript in whole or in
part has been incorporated in this report from any earlier work
done by others or by me.
However, extracts of any literature which has been used for this
report has been used for this report has been duly acknowledged
providing details of such literature in the references.

Date- SIGNATURE
Place- Somit Koley

3
 ACKNOWLEDGEMENT
I am thankful to and fortunate enough to get constant
encouragement, support and aspiring guidance from my teacher
Mr. Prabir Dutta who helped me in successfully completing my
project work. And I would like to extend my sincere lovable
friends for their timely support. Many friends have made their
valuable comments & suggestions on this project which gave me
an inspiration to improve my project work. I would like to thank
my teacher and my friends for their help directly and indirectly to
complete my project. I am thankful to my parents for their
constant moral support and Inspiration. The success and final
outcome of this project required a lots of guidance and assistance
from many people & I’m extremely privileged to have got this all.
The Project get a success for my teacher guidance and valuable
suggestions during this project work.

4
 CONTENTS
CHAPTER SUBJECT PAGE NO
1 INTRODUCTION 6-8
- Introduction
- History of Tata Steel
- Products

2 CONCEPTUAL FRAMEWORK 9-18

- Discuss of Financial Ratio
-Classification of Accounting Ratio
- Research Methodology

3 DATA ANALYSIS & INTERPRETATION 19-27

- Gross Profit Ratio
- Operation Profit Ratio
- Net Profit Ratio
- Return on Capital Employed
- Return on Long Term Fund

4 CONCLUSION 28

BIBLIOGRAPHY 29

5
 INTRODUCTION
India was the world’s third-largest steel producer in 2016. The growth in
the Indian steel sector has been driven by domestic availability of raw
materials such as iron ore and cost-effective labour. Consequently, the
steel sector has been a major contributor to India’s manufacturing output.
The Indian steel industry is very modern with state-of-the-art steel mills. It
has always strived for continuous modernisation and up gradation of older
plants and higher energy efficiency levels. Indian steel industries are
classified into three categories such as major producers, main producers
and secondary producers.
India’s crude steel output grew 5.87 per cent year-on-year to 101.227
million tonnes (MT) in CY 2017. Crude steel production during April
December 2017 grew by 4.6 per cent year-on-year to 75.498 MT. India’s
finished steel exports rose 102.1 per cent to 8.24 MT, while imports fell by
36.6 per cent to 7.42 MT in 2016-17. Finished steel exports rose 52.9 per
cent in April-December 2017 to 7.606 MT, while imports increased 10.9
per cent to 6.096 MT during the same period. Total consumption of
finished steel grew by 5.2 per cent year-on-year at 64.867 MT during April-
December 2017.
Tata steel was established in India as Asia’s first integrated private steel
company in 1907.Tata Steel Limited (formerly Tata Iron and Steel
Company Limited (TISCO)) is an Indian multinational steel-making
company headquartered in Mumbai, Maharashtra, India, and a subsidiary
of the Tata Group. It is one of the top steel producing companies globally
with annual crude steel deliveries of 27.5 million tonnes (in FY17), and the
second largest steel company in India (measured by domestic production)
with an annual capacity of 13 million tonnes after SAIL. Tata Steel has
manufacturing operations in 26 countries, including Australia, China, India,
the Netherlands, Singapore, Thailand and the United Kingdom, and
employs around 80,500 people. Its largest plant located in Jamshedpur,
Jharkhand. In 2007 Tata Steel acquired the UK-based steel maker Corus.

6
 HERITAGE
Jamsetji Nusserwanji Tata (1839 – 1904)
The foundation of what would grow to become
the Tata group was laid in 1868 by Jamsetji
Nusserwanji Tata – then a 29-year-old who had
learned the ropes of business while working in his
father’s banking firm – when he established a
trading company in Bombay. A visionary
entrepreneur, an avowed nationalist and a
committed philanthropist, Jamsetji Tata helped pave the path to
industrialisation in India by seeding pioneering businesses in sectors such
as steel, energy, textiles and hospitality.
Ratan Tata (1937)
The beginning of the 1990s ushered in plenty of
change in Indian business. Economic reforms
opened up many sectors, signalling increased
competition and the arrival of foreign companies.
JRD Tata’s death, in 1993, symbolised the end of
an era in more ways than one. Ratan Tata, who
took over as chairman in 1991, guided the Tata
group in a fast-changing business environment where old rules did not
apply and new realities were taking hold. Mr Tata retired as Chairman of
Tata Sons on December 28, 2012.
Natarajan Chandrasekaran (1963)
Natarajan Chandrasekaran (53) is Chairman of the board of Tata Sons, the
holding company and promoter of more than 100 Tata operating
companies with aggregate annual revenues of more than US $100 billion.

7
He joined the board of Tata Sons in October
2016 and was appointed Chairman in January
2017. Chandra also chairs the boards of several
group operating companies, including Tata
Steel, Tata Motors, Tata Power, Indian Hotels
and Tata Consultancy Services (TCS) — of which
he was chief executive from 2009-17. His
appointment as chairman followed a 30-year
business career at TCS, which he joined from university. Chandra rose
through the ranks at TCS to become CEO and managing director of the
leading global IT solutions and consulting firm.
PRODUCTS
Tata Steel’s products include hot and cold rolled coils and sheets,
galvanised sheets, tubes, wire rods, constructions re-bars, rings and
bearings. The products are targeted at automobiles, white goods,
construction and infrastructure markets. In an effort to de-commoditise
steel, the company has introduced brands like
• Tata Iron (wire rods for farming and fencing segment)
• Tata Steelium (cold rolled steel for auto
ancillaries and the general engineering segments)
• Tata Shaktee (corrugated galvanised sheets for
rural house builder segments),
• Tata Tiscon (re-bars for individual house-builder
semi-urban segment)
• Tata Pipes (pipes for individual house builder and
farming segments)
• Tata Bearings (bearings for Original equipment
manufacturer and replacement market)
• Tata Agrico (agricultural equipment for farming
and construction segment).

8
 CONCEPTUAL FRAMEWORK

Finance is life blood of the business. The financial management is the

study about the process of procuring and judicious use of financial
resources is a view to maximize the value of the firm. There by the value of
the owners i.e. the example of equity shareholders in a company is
maximized. The traditional view of financial management looks into the
following function that a finance manager of a business firm will perform.
1. Arrangement of short-term and long-term funds from the financial
institutions.
2. Mobilization of funds through financial instruments like equity
shares, bond Preference shares, debentures etc.
3. Orientation of finance with the accounting function and compliance
of legal provisions relating to funds procurement, use and
distribution. With increase in complexity of modern business
situation, the role of the financial manager is not just confirmed to
procurement of funds, but his area of functioning is extended to
judicious and efficient use of funds available to the firm, keeping in
view the objectives of the firm and expectations of providers of
funds.
DEFINATION
Financial Management has been defined differently by different scholars.
• HAWARD AND UPTON: - “Financial Management is the application
of the planning and control function to the finance functions”

RATIO
A ratio is a number expressed in terms of another. It is a fraction whose
numerator is the antecedent and denominator is the consequent. A ratio

9
indicates the quantitative relationship between two figures. It may be
expressed in different forms like –
1. Pure Ratio
2. Rates
3. Percentage
FINANCIAL RATIO
It is a ratio between two accounting figures or data expressing the
relationship between the two. The Financial statements of a business
comprise of (1) the Revenue Statement or the Profit & Loss Account and
(2) The Balance Sheet. These include a mass of figures which make it
difficult to deduce any inference or decision. An accounting ratio is used to
gauge the financial solvency and profitability of the business. It is
computed from the basic financial statements periodically published by
the business and it highlights in arithmetical terms, the relationships that
exist between various items from the financial statements.
FINANCIAL RATIO ANALYSIS
It is an analytical tool used for financial analysis. It is a process of
determination and interpretation of the numerical relationships between
the financial data published by business in periodical statement. It aims at
facilitating comparisons with the positions of other business firms as well
as of the same business firm over a number of financial periods.
1. The Management – which, for internal use, wants to ascertain the
profitability and solvency of the business. The extended areas over
which the Management becomes interested are over or under-
trading, over or under-investments, over or under-capitalisation and
useful credit policy.
2. The outsiders who are interested in the solvency, liquidity and
profitability of a business. Outsiders include creditors, debenture
holders, employees, Government and useful credit policy.

10
 3. Others like Distress Analysts, Credit Rating Agencies and Auditors
also used as financial ratios.
IMPORTANCE OF FINANCIAL RATIO ANALYSIS
1. It helps the management to gauge the efficiency of performance and
assess the financial health of the business.
2. It is an essential tool for checking the efficiency with which the
working capital is being used and managed.
3. Comparative ratio analysis injects trend analysis. The improvement
or deterioration of a business is clearly disclosed by ratio analysis.
4. It helps to make financial forecasts.
5. It is an integral part of introduction of standard costing and
budgetary control.
LIMITATIONS OF RATIO/RATIO ANALYSIS
1. The result expressed by the application of a ratio may be misleading.
Accounting data may remain over or understated in financial
statements.
2. The ratio becomes misleading where inconsistent methods are
applied for valuations of stock, etc.
3. It is difficult to set up any standard or Ideal Ratio as the basis of
comparison.
4. The same ratio may bear different interpretations for two separate
business or even, for the same business, in separate years.
5. Ratio analysis is mainly based on past performances. So, its
application for the future may lead to erroneous decisions

CLASSIFICATION OF ACCOUNTING RATIOS

Accounting Ratios may be classified or grouped in different ways
depending on the results or information expected. But the widely used
classifications are made as –

11
 1. Classification on the basis of source; and
2. Classification on the basis of purposes or economic aspects or
operations of the firm.
Source wise classification refers to the sources from which the accounting
figures used in the ratio have been derived. Such classification may be
made as –
• Balance Sheet Ratios: - [between accounting figures taken from the
Balance sheet]
• Revenue Statement: - (Profit & Loss Account) Ratios [between
accounting figures taken from the Profit & Loss Account]
• Mixed Ratios: - [between accounting figures taken both Profit & Loss
Account and Balance Sheet]
Purpose or aspect wise classification refers to the purpose of computing a
ratio. It generally involves information about particular economic aspects
of the operations of a firm. Such classification may be made to know –
1. Short-term solvency.
2. Long-run solvency.
3. Efficiency / turnovers.
4. Profitability. This classification may also be called as – ‘on the basis
of uses.’

BALANCE SHEET RATIOS

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
1. 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐑𝐚𝐭𝐢𝐨 = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
To be noted that:
(a) This ratio measures the ability of an enterprise to meet its short-term
liabilities.

12
(b) The Standard Ratio is considered as 2:1. It means perfect ability of the
business is existing after keeping funds to meet day to day expenses.
𝑄𝑢𝑖𝑐𝑘 𝑜𝑟 𝐿𝑖𝑞𝑢𝑖𝑑 𝐴𝑠𝑠𝑒𝑡𝑠
2. Quick ratio or Liquid Ratio or Acid Ratio = 𝑄𝑢𝑖𝑐𝑘 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑛𝑡𝑠−𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦−𝑃𝑟𝑒𝑝𝑎𝑖𝑑 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠
Or 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠−𝐵𝑎𝑛𝑘 𝑂𝑣𝑒𝑟𝑑𝑟𝑎𝑓𝑡

To be noted that:
(a) Quick Ratio is used to ascertain the immediate solving of a firm.
(b) The minimum desired ratio is 1:1. A firm must have at least one rupee
to pay one rupee of its quick liabilities.

𝐶𝑎𝑠ℎ+𝐵𝑎𝑛𝑘+𝑀𝑎𝑟𝑘𝑒𝑡𝑎𝑏𝑙𝑒 𝑆𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠
3. Super Quick Ratio = 𝑄𝑢𝑖𝑐𝑘 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

To be noted that:
(a) It measures the very immediate ability of a firm to meet its quick
liabilities.
(b) It comes to use in banks and other financial institutions.

𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡𝑠[𝐸𝑥𝑡𝑒𝑟𝑛𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦]

4. Debt Equity Ratio = 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠 𝐹𝑢𝑛𝑑𝑠[𝐸𝑞𝑢𝑖𝑡𝑦]

To be noted that:
(a) This ratio is used to ascertain the respective claims of the outsiders and
the owners like Equity Shareholders within the assets of a firm.
(b) If this ratio is high that may indicate – (I) Too much dependence on
outside funds; (ii) Greater financial risks in payment of interests and
repayment of the loans taken in due time; (iii) Reduced margin of safety of
creditors.

13
 5. Fixed Asset-proprietorship Ratio
𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡𝑠
Or = 𝑃𝑟𝑜𝑝𝑟𝑖𝑒𝑡𝑜𝑟 ′ 𝑠 𝐹𝑢𝑛𝑑𝑠
Net Block to Proprietorship Ratio
To be noted that:
(a) This ratio indicates how much of the proprietor’s funds has been
blocked by fixed assets.
(b) The result should be less than 1.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
6. Current Assets Proprietorship Ratio = 𝑃𝑟𝑜𝑝𝑟𝑖𝑒𝑡𝑜𝑟 ′ 𝑠 𝐹𝑢𝑛𝑑𝑠

To be noted that:
(a) This ratio indicates how much of the proprietor’s funds have been
used for current-trading of the concern.

𝑆𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝐵𝑒𝑎𝑟𝑖𝑛𝑔 𝐹𝑖𝑥𝑒𝑑 𝐶ℎ𝑎𝑟𝑔𝑒𝑠

7. Capital Gearing Ratio = 𝐸𝑞𝑢𝑖𝑡𝑦 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠 𝐹𝑢𝑛𝑑𝑠

To be noted that:
(a) Securities bearing fixed charges = Preference Share Capital + Debenture
+ Long-term Debts; AND
(b) Equity Shareholder’s Funds = Equity Share Capital + Reserves & Surplus
– Fictitious assets.

𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
8. Total Assets to Debt Ratio = 𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝐷𝑒𝑏𝑡𝑠

To be noted that:

14
(a) Total Assets means Non-Current Assets + Current Assets. But fictitious
assets and Deferred Tax Assets (Advance Payment of Tax) should not be
included within total Assets.
(b) Long-term Debts should be including – (i) Long-term borrowings (like
Debenture and Bank Loan); (ii) Other Non-Current Liabilities; and (iii) Long-
term Provisions.

𝐶𝑎𝑠ℎ + 𝐶𝑎𝑠ℎ 𝐸𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡

9. Cash Position Ratio = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
Where cash equivalent = Bank Balance + Marketable Securities readily
convertible into known amount of cash.
To be noted that:
(a) It indicates how much (portion) of the total assets is represented by
cash and cash equivalent.
(b) If the ratio is high, that indicates availability of sufficient cash to meet
the dues in time.

10. Cash to Current Liabilities Ratio

Cash + Cash Equivalent
Or Current Liabilities

Absolute Cash Ratio

To be noted that:
(a) This ratio shows how much liquid funds are available for paying each
rupee of current liabilities. So, it is a measure of available cash to
discharge current liabilities.

15
11. Cash Interval /Cash Defensive Interval=
𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑 𝐷𝑎𝑖𝑙𝑦 𝐶𝑎𝑠ℎ 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠

Where
(a) Quick Assets = Cash + Bank + Marketable Securities + Receivables; AND
𝐴𝑛𝑛𝑢𝑎𝑙 𝑐𝑎𝑠ℎ 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠
(b) Projected Daily Cash Expense =
365
To be noted:
(a) Here ‘Interval’ denotes the time gap during which further cash may not
be generated.
(b) The ratio shows how long the normal activities of a concern can be
carried on with the available quick assets, even if cash is not generated.

Projected Capital Expenditure For Start up

12. Cash Burn Ratio =365 days × Cash Raised from Initial Investors
Cash Raised from Initial Investors
Or 365 days ×
Projected Start up Capital Expenditure

To be noted that:
(a) At the initial or formative stage of a company, its management should
know how long the business can run with the limited amount of money it
has been able to raise from the initial public offer. In other words, they
must know the length of the period till which the company resumes
normal earning. This ratio confirms such period of waiting.
(b) Its correct calculation can help to avoid disturbances in normal function
or shutdown of the business due to dearth of funds.

16
13. Other Ratios
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡𝑠
a) Debts to Capital Employed = 𝑇𝑜𝑡𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑

➢ Owners prefer high debts ratio, but creditors like low debt ratio.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
b) Current Assets to Fixed Assets = 𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡𝑠

➢ Helps to locate position of storage of stock, trend of collection

from debtors, etc.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
c) Inventory to Working Capital = 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙

➢ It shows the portion of working blocked within working capital

and the nature of movement of stock.

17
 RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research
problem. It may be understood as a science of studying how research is
done scientifically. So, the research methodology not only talks about the
research methods but also considers the logic behind the method used in
the context of the research study.
1. Research Design
Descriptive research is used in this study because it will ensure the
minimization of bias and maximization of reliability of data collected. The
researcher had to use fact and information already available through
financial statements of earlier years and analyse these to make critical
evaluation of the available material. Hence by making the type of the
research conducted to be both Descriptive and Analytical in nature. From
the study, the type of data to be collected and the procedure to be used
for this purpose were decided.
2. Data Collection
The required data for the study are basically secondary in nature and the
data are collected from the audited reports of the company. a) Primary
Data: Primary data are those data, which is originally collected afresh. In
this project, Websites and Books has been used for gathering required
information. b) Sources of Data: The sources of data are from the annual
reports of the company from the year 2013-2014 to 2016-2017.
3. Methods of Data Analysis
The study employs the following analytical tools:
• Graph
• Trend Percentage
• Ratio Analysis

18
 DATA ANALYSIS AND INTERPRETATION
A FINANCIAL STATEMENT ANALYSIS OF TATA STEEL BY MEANS OF RATIOS.
𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡
1) Gross Profit Ratio = × 100
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
Gross profit = Sales – Material Consumed – Manufacturing Expense

YEAR 2021 2020 2019 2018 2017

GROSS
PROFIT 51000.4 43028.94 50770.42 42739.19 35496.24
NET SALES 64,869.00 60,435.97 70,610.71 59,616.82 47,993.02
GROSS
PROFIT RATIO 78.62% 71.20% 71.90% 71.69% 73.96%
GROSS PROFIT RATIO
80.00%

78.00%

76.00%

74.00%

72.00%

70.00%

68.00%

66.00%
Gross Profit Ratio

2021 2020 2019 2018 2017

Change in Gross Profit Ratio

YEAR 2017 & 2017 & 2017 & 2017 &
2018 2019 2020 2021
TATA STEEL -3.07% -2.79% -3.73% 6.30%
(Decrease) (Decrease) (Decrease) (Increase)
INTERPRETATION
The above chart shows that in Tata steel, gross profit ratio is continuously
decrease from 2017 and it is increase in 2021.

19
 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑃𝑟𝑜𝑓𝑖𝑡
2) Operation Profit Ratio = × 100
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠

YEAR 2021 2020 2019 2018 2017

OPERATING
21,765.35 14,861.57 20,562.94 15,778.96 11,875.95
PROFIT
NET SALES 64,869.00 60,435.97 70,610.71 59,616.82 47,993.02
OPERATING
PROFIT RATIO 33.55% 24.59% 29.12% 26.47% 24.75%
OPEARTING PROFIT RATIO
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Operating Profit Ratio

2021 2020 2019 2018 2017

Changes in Operating Profit Ratio

YEAR 2017 & 2017 & 2017 & 2017 &
2018 2019 2020 2021
TATA STEEL 6.95% 17.66% -0.65% 35.56%
(Increase) (Increase) (Decrease) (Increase)

INTERPRETATION
The above chart shows that in Tata steel, operating profit ratio is
continuously increase from 2017-2019 and then in 2020 decrease. In 2021
it is a huge increase.
Profit After Tax
3) Net Profit Ratio = × 100
Net Sales

20
 YEAR 2021 2020 2019 2018 2017
PROFIT
13,606.62 6,743.80 10,533.19 4,169.55 3,444.55
AFTER TAX
NET SALES 64,869.00 60,435.97 70,610.71 59,616.82 47,993.02
NET PROFIT
RATIO 20.98% 11.16% 14.92% 6.99% 7.18%

NET PROFIT RATIO

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
Net Profit Ratio

2021 2020 2019 2018 2017

Change in Net Profit Ratio

YEAR 2017 & 2017 & 2017 & 2017 &
2018 2019 2020 2021
TATA STEEL -2.65% 107.80% 55.43% 192.20%
(Decrease) (increase) (increase) (Increase)
INTERPRETATION

YEAR 2021 2020 2019 2018 2017

PBDIT 25,237.63 13,216.93 22,857.67 13,331.72 11,444.61
DEPRECIATION 3,987.32 3,920.12 3,802.96 3,727.46 3,541.55
CAPITAL 135722.67 119521.26 111904.71 99507.00 88409.08
EMPLOYED

21
 RETURN ON 15.66% 7.78% 17.03% 9.65% 8.94%
CAPITAL
EMPLOYED
The above chart shows that in Tata steel, net profit ratio is decrease in
2018 but from 2019-2021 it becomes increase.
PBDIT−Depreciation
4) Return on Capital Employed = × 100
Capital Employed

RETURN ON CAPITAL EMPLOYED

18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Return On Capital employed

2021 2020 2019 2018 2017

Change in Return on Capital Employed

YEAR 2017 & 2017 & 2017 & 2017 &
2018 2019 2020 2021
TATA STEEL 7.94% 90.49% -12.98% 75.17%
(Increase) (increase) (Decrease) (Increase)
INTERPRETATION
From the above chart it is show that Tata steel, return on capital employed
ratio is positive from 2017-2021.the ratio increase from 2017 to 2019 but
in the year it decrease no negative.in the next year it becomes again
increase.
PBDIT−Depreciation
5) Return on Long Term Fund = × 100
Secured Loan+Unsecured Loan

YEAR 2021 2020 2019 2018 2017

22
PBDIT 25,237.63 13,216.93 22,857.67 13,331.72 11,444.61
DEPRECIATION 3,987.32 3,920.12 3,802.96 3,727.46 3,541.55
SECURED LOAN 28,088.80 41,514.23 28,934.28 4,803.86 4,710.03
UNSECURED 0.00 0.00 0.00 22,709.97 25,499.01
LOAN
RETURN ON 75.65% 22.39% 65.86% 34.91% 26.16%
LONG TERM
FUND

RETURN ON LONG TERM FUND

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
Return on Capital Employed

2021 2020 2019 2018 2017

Change in Return on Term Fund

YEAR 2017 & 2017 & 2017 & 2017 &
2018 2019 2020 2021
TATA STEEL 33.45% 151.76% -14.41% 189.18%
(Increase) (increase) (Decrease) (Increase)
INTERPRETATION
From the above chart it is show that Tata steel, return on long term fund
ratio is positive from 2017-2021.the ratio increase from 2017 to 2019 but
in the year it decrease no negative.in the next year it becomes again
increase.

23
 BALANCE SHEET
Balance Sheet of Tata Steel …………..in Rs. Cr. ……………
Mar 21 Mar 20 Mar 19 Mar 18 Mar 17
12 Months 12 Months 12 months 12 months 12 months

EQUITY AND LIABILITIES

SHAREHOLDER’S FUND
Equity Share Capital 1,198.78 1,146.13 1,146.12 1,146.12 971.41
Total Share Capital 1,198.78 1,146.13 1,146.12 1,146.12 971.41
Reserves and Surplus 89,289.55 73,416.99 69,308.59 60,368.70 48,687.59
TOTAL RESERVE AND SURPLUS 89,289.55 73,416.99 69,308.59 60,368.70 48,687.59
TOTAL SHAREHOLDER’S FUNDS 90,488.33 74,563.12 70,454.71 61,514.82 49,659.00
NON-CURRENT LIABILITIES
Long Term Borrowings 27,313.80 31,381.96 26,651.19 24,568.95 24,694.37
Deferred Tax Liabilities [Net] 6,111.70 5,862.28 7,807.00 6,259.09 6,111.27
Other Long Term Liabilities 8,486.12 3,325.34 2,798.63 2,927.91 3,644.69
Long Term Provisions 2,543.94 2,113.56 1,918.18 1,961.21 2,024.74
TOTAL NON-CURRENT 44,455.56 42,683.14 39,175.00 35,717.16 36,475.07
LIABILITIES
CURRENT LIABILITIES
Short term borrowings 0.00 7,857.27 8.09 669.88 3,239.67
Trade Payable 10,638.59 10,600.96 10,969.56 11,242.75 10,717.44
Other Current Liabilities 17,600.30 11,749.21 13,837.77 12,959.43 8,398.62
Short Term Provision 1,074.43 663.86 778.23 735.28 700.60
TOTAL CURRENT LIABILITIES 29,313.32 30,871.30 25,593.65 25,607.34 23,056.33
TOTAL CAPITAL AND LIABILITIES 165,035.99 150,392.56 137,498.36 125,114.34 111,465.41
ASSETS
NON-CURRENT ASSETS
Tangible Assets 67,938.29 70,505.66 70,416.82 70,942.90 71,778.97
Intangible Assets 839.33 727.72 805.20 786.18 788.18
Capital Work-In-Progress 10,057.18 8,070.41 5,686.02 5,641.50 6,125.35
Other Assets 0.00 0.00 0.00 0.00 0.00
FIXED ASSET 79,243.59 79,480.43 77,018.31 77,402.35 78,731.11
Non-Current Investments 51,066.27 46,860.91 38,929.25 9,636.56 8,355.90
Long Term Loans And Advances 7,509.33 199.26 231.16 213.50 211.97

24
Other Non-Current assets 3,460.50 3,842.77 4,284.06 3,218.02 4,056.03
TOTAL NON-CURRENT ASSETS 141,279.69 130,383.37 120,462.78 90,470.43 91,355.01
CURRENT ASSETS
Current Investments 6,404.46 3,235.16 477.47 14,640.37 5,309.81
Inventories 8,603.79 10,716.66 11,255.34 11,023.41 10,236.85
Trade Receivables 3,863.31 1,016.73 1,363.04 1,875.63 2,006.52
Cash And Cash Equivalents 1,671.71 1,226.87 718.11 4,696.74 970.31
Short Term Loans And Advances 1,555.95 1,607.32 55.92 74.13 27.14
Other Current Assets 1,657.08 2,206.45 3,165.70 2,333.63 1,559.77
TOTAL CURRENT ASSETS 23,756.30 20,009.19 17,035.58 34,643.91 20,110.40
TOTAL ASSETS 165,035.99 150,392.56 137,498.36 125,114.34 111,465.41
OTHER ADDITIONAL
INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS
Contingent Liabilities 33,058.37 32,650.32 34,622.43 28,359.61 25,991.16
CIF VALUE OF IMPORTS
Raw Materials 0.00 0.00 0.00 0.00 0.00
Stores, Spares And Loose Tools 8,902.53 12,381.28 14,519.26 13,355.43 10,298.00
Trade/other goods 8,902.53 12,381.28 14,519.26 13,355.43 10,298.00
EXPENDITURE IN FOREIGN
EXCHANGE
Expenditure In Foreign Currency 365.71 509.47 450.04 334.94 447.38
REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS
Dividend Remittance In Foreign -- -- -- -- --
Currency
EARNINGS IN FOREIGN
EXCHANGE
FOB Value Of Goods -- -- -- 5,898.19 3,996.55
Other Earnings 9,241.88 6,314.97 6,497.94 -- --
BONUS DETAILS
Bonus Equity Share Capital 252.97 252.97 252.97 252.97 252.97
NON-CURRENT INVESTMENTS
Non-Current Investments 537.85 204.31 448.61 497.21 4,422.17
Quoted Market Value
Non-Current Investments 27,950.42 20,078.19 34,042.88 5,473.11 535.90
Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted -- -- -- -- --
Market Value

25
Current Investments Unquoted 6,404.46 3,235.16 477.47 14,640.37 5,309.81
Book Value

PROFIT & LOSS ACCOUNT

PROFIT & LOSS ACCOUNT OF JINDAL STEEL ….in Rs Cr….
Mar 21 Mar 20 Mar 19 Mar 18 Mar 17
12 Months 12 Months 12 months 12 months 12 months

INCOME
Revenue from operations 63,743.40 58,815.57 68,923.36 59,453.23 52,564.93
[gross]
Less: Excise/Service Tax/Other 0.00 0.00 0.21 902.55 5,267.94
Levies
Revenue From Operations 63,743.40 58,815.57 68,923.15 58,550.68 47,296.99
[Net]
Other Operating Revenues 1,125.60 1,620.40 1,687.56 1,066.14 696.03
Total Operating Revenues 64,869.00 60,435.97 70,610.71 59,616.82 47,993.02
Other Income 637.89 404.12 2,405.08 763.66 414.46
Total Revenue 65,506.89 60,840.09 73,015.79 60,380.48 48,407.48
EXPENSES
Cost Of Materials Consumed 13,868.60 17,407.03 19,840.29 16,877.63 12,496.78
Purchase Of Stock-In Trade 0.00 0.00 0.00 0.00 0.00
Changes In Inventories Of 1,464.12 -564.40 -554.33 545.36 -1,329.65
FG,WIP And Stock-In Trade
Employee Benefit Expenses 5,198.82 5,036.62 5,131.06 4,828.85 4,605.13
Finance Costs 3,393.84 3,031.01 2,823.58 2,810.62 2,688.55
Depreciation And Amortisation 3,987.32 3,920.12 3,802.96 3,727.46 3,541.55
Expenses
Other Expenses 22,747.30 23,803.18 24,622.60 21,275.47 19,681.15
Total Expenses 50,484.81 52,525.53 56,674.31 50,375.94 42,347.17
Profit/Loss Before Exceptional, 15,022.08 8,314.56 16,341.48 10,004.54 6,060.31
Extra Ordinary Items And Tax
Exceptional Items 2,773.05 -1,703.58 -114.23 -3,366.29 -703.38
Profit/Loss Before Tax 17,795.13 6,610.98 16,227.25 6,638.25 5,356.93
Tax Expenses-Continued
Operations
Current Tax 3,949.05 1,787.95 6,297.11 1,586.78 1,400.54

26
Less: MAT Credit 0.00 0.00 0.00 0.00 0.00
Entitlement
Deferred Tax 239.46 -1,920.77 -603.05 881.92 511.84
Tax For Earlier Years 0.00 0.00 0.00 0.00 0.00
Total Tax Expenses 4,188.51 -132.82 5,694.06 2,468.70 1,912.38
Profit/Loss After Tax And 13,606.62 6,743.80 10,533.19 4,169.55 3,444.55
Before Extra-Ordinary Items
Profit/Loss From Continuing 13,606.62 6,743.80 10,533.19 4,169.55 3,444.55
Operations
Profit/Loss For The Period 13,606.62 6,743.80 10,533.19 4,169.55 3,444.55
OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 117.04 57.11 90.41 38.57 31.74
Diluted EPS (Rs.) 117.03 57.11 90.40 38.56 31.74
VALUE OF IMPORTED AND
INDIGENIOUS RAW
MATERIALS STORES, SPARES
AND LOOSE TOOLS
Imported Raw Materials 0.00 0.00 0.00 0.00 0.00
Indigenous Raw Materials 0.00 0.00 0.00 0.00 0.00
STORES, SPARES AND LOOSE
TOOLS
Imported Stores And Spares 0.00 0.00 0.00 0.00 0.00
Indigenous Stores And 0.00 0.00 0.00 0.00 0.00
Spares
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 1,145.93 1,489.67 1,145.92 1,237.35 1,043.07
Tax On Dividend 242.34 297.71 224.86 95.71 55.65
Equity Dividend Rate (%) 250.00 100.00 130.00 100.00 100.00

27
 CONCLUSION
In this project a modest attempt has being made to analyse how the
profitability is being managed by the TATA STEEL during last 5 years from
2017 to 2021. The study is based on secondary data collected from
websites resources. Our study aim to understand how efficiency of
profitability of the company is being managed, judge the short solvency
position of the company, analysed the related aspect of profitability
management. The study is based on secondary data collected from
websites resources.
In this project we understand that
• This company’s Gross Profit Ratio is becomes up down. But its good
side it is in positive (+) and also in 2021 it is positive.
• Operating ratio is also up down as gross profit ratio. In 2020 it is little
decrease but in positive (+) and in 2021 it is positive.
• The net profit ratio at first decrease in 2018, then 2019 it is
increase.in 2020 it is again decrease and next year 2021 increase. But
good side that between 5 years from 2017-2021 it is in positive (+)
result.
• From Return on capital employed Ratio is as same as operating ratio.
In 2017-2019 it is increase, decrease in 2020 and next year in 2021 it
again increase. But good side that between 5 years from 2017-2021
it is in positive (+) result.
• From Return on long Term Fund Ratio is up down also operating
ratio.
• This company’s net sales is very good between 5 years. In this
company some expenses like cost of materials consumed, Employee
Benefit Expenses, finance cost are becomes increase.so they need to
improve.

28
 bibliography
Following websites are referred:-

1. https://www.ibef.org/industry/steel.aspx
2. http://www.tatasteel.com/
3. https://www.wikipedia.org/
4. http://www.moneycontrol.com
5. http://www.capitalmarket.com

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