Media reports have recently highlighted worsening of financial health of Oil and Natural Gas Corporation (ONGC), India’s state-owned hydrocarbon explorer that alone contributes 61 per cent of the country’s crude oil output.
Three different indicators – record low cash reserves, debt of Rs 25,000 crore and negative working capital – were used to argue the company’s finances are in the red. The arguments seem partially misplaced, a detailed ETEnergyworld analysis of key data trends and a survey of expert opinion shows.
Simply put, cash reserves are funds that companies set aside from net profit for unexpected or unplanned costs. ONGC’s cash reserve has come crashing down to Rs 170 crore at the end of September 2018 as compared to Rs 13,646 crore in September 2017 and Rs 1,000 crore in March 2018. Read More
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