International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395-0056
Volume: 12 Issue: 04 | Apr 2025
p-ISSN: 2395-0072
www.irjet.net
A Study on the Role of Financial Ratios in the Valuation of Reliance Ltd. Manya Agarwal, Dr. M S Suganthiya, Dr. Bhawna Sharma Student, Amity Business School, Amity University Mumbai Assistance Professor, Amity Business School, Amity University Mumbai Director, International Affairs and Programs, Officiating HOI, Amity Business School ,Amity University Mumbai ---------------------------------------------------------------------***---------------------------------------------------------------------
Abstract - This study examines the impact of financial ratio
behaviour, support valuation models and provide insight into the health of the company. In other words, it is essential for the analysis of diverse conglomerates such as the Reliance Industry.
analysis on corporate valuation, using Reliance Industries Ltd. as a case study. Financial ratios provide critical insights into a firm's profitability, solvency, liquidity, and market performance, serving as essential tools for investors and analysts. This study analyzes major financial coefficients for five years, emphasizes their role in understanding complex and diversified company evaluation, investment decisions, and strategic financial management of complex and diversified companies such as Reliance Industries LTD.
3 RESEARCH METHODOLOGY 3.1 Area of Study This study focuses on Reliance Industries Ltd. and analyzes h ow your financial situation reflects the impact of your perfor mance and valuation. It bridges internal financial metrics with external investor perception, emphasizing the relevance of ratio analysis in a complex corporate structure.
Key Words: Financial Ratios, Corporate Valuation, Reliance Industries, Liquidity, Profitability, Solvency, P/E Ratio, EPS, ROE
3.2 Sample of Study
1.INTRODUCTION
The sample was Reliance Industries Ltd., which was chosen because of its diverse structure and its relevance with the sample. The study was extended for over five years from 19 to 2022 to 23, documenting the impact of important economic events on performance.
Analysis of the financial ratio is the cornerstone of the modern evaluation method and provides a clear picture of the company's financial health. This research focuses on Reliance Industries Ltd., one of India’s largest conglomerates, and investigates how financial ratios reflect intrinsic value and guide investment decisions. This study shows the strategic importance of corporate fiscal analysis while studying profitability, liquidity, payment ability and market coefficients.
3.3 Type of Study This study is descriptive and analytical. This analytically interprets five-year ratio data to explain the rationale and importance of financial rates and to identify trends and impacts on valuations.
1.1 Research Objectives
3.4 Tools for Data Collection
1. To analyze the significance of financial ratios in valuing Reliance Industries Ltd. 2. To evaluate the role of key ratios in assessing the company's financial health. 3. To examine how financial ratios impact investment decisions and valuation.
Secondary data from trusted sources such as management reports, financial websites (money controls, screeners), and market management were used. The terms collected include profitability, liquidity, solvency, efficiency, and market valuation metrics.
2 LITERATURE REVIEW
3.5 Method of Analysis
Financial ratios have long been determined as an important tool when evaluating our performance and ratings. Scientists such as Penman (2013) and Damodaran (2012) highlight the role of profitability and market-based conditions in estimating internal value. Altman's Z-score and Beaver's research shows prioritization of economic difficulties. In India, researchers emphasize the need to adapt traditional ratio analysis to complex companies such as trust. Overall, it has been shown that financial situations influence investor
Analyses included trend analysis, descriptive statistics, and correlation tests. Graphical representations (lines and bar diagrams) were used to interpret the financial situation individually and how the financial situation existed along with valuation and inventory performance.
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