Reliance Industries Limited (RIL) is one of the largest companies of India by market capitalization. The business has interests in petrochemicals, oil and gas exploration, textiles, retail. Reliance Industries has been a very dominant force in Indian industry circles. In March 2012, RIL did a sales of Rs. 3,58,501 crores, a growth of 34% over last year. RIL has Operating Margins of 11%. RoCE for RIL is 16.50%.
Despite such huge size and in engineering sector, RIL has excellent Operating Cash Flows. RIL gets its money from its customers within 17 days. RIL consumes its Inventories within 52 days. RIL pays its suppliers after 46 days. Overall, RIL is able to converts its money within 22 days, which most of the engineering goods companies in India will be jealous of. Debt/Equity for this company is at 0.48. This is possible because of the quick cash conversion by RIL as it provides liquidity at their hands.
RIL is sustaining and still growing stronger, despite its huge size, because of the quick cash conversion cycle. Its because of the positive Operating Cash Flows. Any company, big or small, will suffer down the line if they fumble with their Operating Cash Flows. Thus, investors must pay dear attention to Operating Cash Flows.
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