The IUP Journal of Accounting Research and Audit Practices:
A Comparative Analysis of the Financial Ratios of Oil and Gas Companies

Article Details
Pub. Date : April, 2021
Product Name : The IUP Journal of Accounting Research and Audit Practices
Product Type : Article
Product Code : IJARAP20421
Author Name : Aditya Anand Lanjewar and Rohit Bansal
Availability : YES
Subject/Domain : Finance
Download Format : PDF Format
No. of Pages : 18

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Abstract

In today's world scenario, oil and gas sector is an important area. In a highly competitive business field, most financial statement analyses focus on industries. The paper shows a comparative financial performance of the Hindustan Oil Exploration Company, Jindal Exploration Industries Ltd., Selan Exploration Technologies, South West Pinnacle Exploration and SVOGL Oil and Gas Energy during 2015-2019. Ratios like liquidity ratio, profitability ratio, turnover ratio and leverage ratio have been used to measure the financial performance of the selected oil companies. On comparing the financial ratio, South West Pinnacle exploration shows highest current ratio, average turnover and return on assets having good financial strength of the company. Jindal Exploration Industries Ltd. shows highest profit earning ratio. Hindustan Oil Exploration Company shows highest inventory turnover ratio. SVOGL Oil and Gas Energy shows lowest debtor turnover ratio. Selan Exploration Technologies shows positive du-pont analysis.


Description

The financial ratio is used to determine the accountability and stability of a company. It gives an idea to the government, tax bodies, public, shareholders and stakeholders of the Company's financial performance. Financial analysis finds out the company's strengths and weaknesses in a proper manner from the data in the balance sheet and profit and loss account. It should be noted that ratio analysis is important for financial analysis to find out the financial position and performance of a firm. So, the term 'financial ratio' defines the relationship between accounting values, which is usually expressed mathematically.

The objective is to find out the financial ratio of Indian exploration companies. The paper is organized as follows: First, the paper presents a literature review and the chosen technique is used in the Indian exploration companies, followed by mathematical and theoretical concepts to find out the main financial ratio. Next, optimum results are obtained. Finally, the paper ends with conclusion.


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