Steel Authority of India Limited (SAIL) and Tata Steel Limited are the two largest steel producers in

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Steel Authority of India Limited (SAIL) and Tata Steel Limited are the two largest steel producers in India. The former is a public sector giant set up in the year 1973 with over 85% of the capital currently owned by the government of India, the latter is the premier company of TATA Group, set up in the year 1907. Both the companies follow financial year as the accounting period.

The comparative profit and loss statements for Tata Steel and SAIL for the year ended 31st March 2017 are given as follows:

Particulars 1. Revenue from operations II. Other income III. Total income (I + II) IV. Expenses: Cost of


 Questions for Discussion

Both the companies have almost similar revenue from operations. However, TISCO has reported a profit whereas SAIL has reported a loss for the year 2016–17. Using appropriate profitability and expense ratios identify the reasons for the same.

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