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CAPITAL BUDGETING ON IOCL

BY LANKA VIKAS BHARATH

INDEX
INDIAN ECONOMY & ITS GROWTH ROLE OF OIL INDUSTRY IN INDIAN ECONOMY INDUSTRY PROFILE COMPANY PROFILE VISION & MISSION

OBJECTIVES OF IOCL
SUBJECTIVE LITERATURE DATA ANALYSIS INFERENCES ADVANTAGES & LIMITATIONS OF STUDY IMPORTANCE OF THE STUDY CONCLUSION

INDIAN ECONOMY & ITS GROWTH


The economy of India is the ninth-largest in the world by nominal GDP and the third-largest by purchasing power parity (PPP). On a per-capita-income basis, India ranked 141st by nominal GDP and 130th by GDP (PPP) in 2012. India is the 19th-largest exporter and the 10th-largest importer in the world.

ROLE OF OIL INDUSTRY IN INDIAN ECONOMY


The Indian oil sector is one of the six core industries in India and has very significant forward linkages with the entire economy. The Indian oil sector is of strategic importance and plays a predominantly pivotal role in influencing decisions in all other spheres of the economy.

Indian Oil and its subsidiaries today accounts for 49% petroleum products market share in India.

OBJECTIVES OF CAPITAL BUDGETING


To ensure the effective control of capital expenditure in order to achieve by forecasting the long-term financial requirements. To ensure maximization of profit by allocating the available investible. To identify the risk involved in capital budgeting. To analyze and understand the Capital Budgeting process in Indian Oil Corporation

INDUSTRY PROFILE
Government of India declared the Oil industry in India as the core sector industry under the Industrial Policy Resolution bill in the year 1954 Some of the major companies in the Oil Industry in India are: Indian Oil Corporation Ltd. Reliance industries Bharat Petroleum Corporation Limited Hindustan Petroleum

COMPANY PROFILE
IOC (Indian Oil Corporation) was formed in 1964 as the result of merger of Indian Oil Company Ltd. and Indian Refineries Ltd. Indian Oil Corporation Ltd. is the highest ranked Indian company in the prestigious Fortune Global 500, ranked at 98th position this year.

It is the 20th largest petroleum company in the world.

VISION & MISSION


Vision: A major diversified, trans-national, integrated energy company, with national leadership and a strong environment conscience, playing a national role in oil security & public distribution. Mission: To achieve international standards of excellence in all aspects of energy and diversified business with focus on customer delight through value of products and services, and cost reduction. To maximize creation of wealth, value and satisfaction for the stakeholders.

To provide technology and services through sustained Research and Development.

OBJECTIVES OF IOCL
To earn a reasonable rate of return on investment. To maximize utilization of the existing facilities for improving efficiency and increasing productivity. The Project study is undertaken to analyze and understand the Capital Budgeting process in Indian Oil Corporation To know about the companys operation of using various Capital Budgeting techniques. To get an exposure of the actual working environment within a multi-national.

SUBJECTIVE LITERATURE
Meaning: Capital budgeting consists in planning development of available capital for the purpose of maximizing the long term profitability of the concern Lynch. Methods of capital budgeting Traditional methods Payback period Accounting rate of return method Discounted cash flow methods Net present value method Profitability index method Internal rate of return

DATA ANALYSIS

Income Statement

Balance Sheet

ADVANTAGES & LIMITATIONS OF STUDY


Advantages: Multiple budgeting methods Risk Assessment Predict Potential Return Long-Term Planning Limitations: Inadequate investment makes it difficult for the company to increase its budget and the capital. Capital budgeting involves large number of funds so the decision has to be taken carefully. Decisions in capital budgeting are not modifiable as it is hard to locate the market for capital goods.

IMPORTANCE OF THE STUDY


Develop and formulate long-term strategic goals Seek out new investment projects Estimate and forecast future cash flows Facilitate the transfer of information

Monitoring and Control of Expenditures

MARKET SHARE

CONCLUSION

Thank You