Financial Performance Analysis of Selected Iron and Steel Companies in India

Abstract

Financial Analysis is a process of identifying the financial strength and weakness of the firm by establishing relationships between the items, the balance sheet and profit and loss account. Financial analysis helps to assess the financial position and profitability of a concern. In this study to assess the selected firm’s financial status, ratio analysis has applied covering profitability, solvency and turnover ratios. This study evaluates and compares the performance of 10 steel companies (VISA, TATA, JSW, SAIL, ESSAR, JINDAL, UTTAM GALVA, SUNFLAG, FACOR, and NARAYANI STEELS). The period of the study is 5 years starting from 2014-15 to 2018-19. The research study has analyzed the performance of selected steel companies. The methodology of the present study includes sampling, data collection and data analysis tools used for the study. The present research study is based on purely secondary data. The data for this analysis is taken from Moneycontrol.com and other related information is taken from concerned steel company websites, books, and journals. In this research study, different statistical tools have been used like mean, Standard deviation, Coefficient of variation and Analysis of variance (ANOVA) applied for processing the data to give reliable conclusion. Comparing all the profitability ratios, it is inferred that Out of the 3 ratios, it is inferred that Tata steels have performed better in gross profit and net profit ratio, and ESSAR steels performed better in operating profit ratio and the other selected companies in the study have to improve its level better in the coming years to reach next level. Comparing short term liquidity ratios, it is inferred that out of 2 ratios, Sunflag and Narayani steels have performed better in current and quick ratio, and other selected companies in this study have to improve its level. Comparing the efficiency ratios, it is inferred that out of 3 ratios Narayani steels and Tata steels performed better and other selected companies have to improve its level.