Indian Oil Corporation limited owns and operates a network of crude oil and petroleum product pipeline in India. The company is mainly controlled by the Government of India which owns approx. 79% shares in the company. It has two divisions: Refineries Division and Marketing division. The main objective of this analysis is to determine the firm’s liquidity, solvency and financial position of the firm by using the tools like ratio analysis and common size balance sheet. Various ratios like current ratio, liquid ratio, absolute liquid ratio, turnover ratios have been used to measure the financial performance of the company. The data used in this analysis were collected from various magazines, audited reports and from websites. For better understanding of the analysis, the findings are interpreted in tables, charts and diagrams. As the shareholders invest in a company by knowing its financial performance, this analysis will be greatly helpful. This analysis also helps to make correct financial decisions, planning more efficiently and economically. This analysis consists of findings and interpretations to assists the company to improve its performance.