A

PROJECT REPORT
ON

Submitted by:

Yamini

ENROLLMENT NO.:00520601709 COURSE : BBA (General)

ACKNOWLEDGEMENT I wish to acknowledge a deep sense of gratitude to all those who have made a major contribution and helped me a lot in the preparation of this project. First, of all I acknowledge with a deep sense of gratitude towards my guide Mr. Sandeep Shrivastav who has guided me a lot right from the beginning towards the end of the project report.

INDEX
CHAPTER 1 1.1 Object of Project 1.2 Selection of the topic 07 1.3 Objectives of the study 1.4Methodology of the study 1.5Limitations of the project 1.6 Utility of the study 11 CHAPTER 2 INTRODUCTION TO THE ORGANISATION 13 14 08 09 10 INTRODUCTION PAGE NO. 06

2.1 Introduction to the Organization 2.2 Organizational Structure 2.3 General Information about the Organization 15 CHAPTER 3 INTRODUCTION TO THE TOPIC

3.1 Meaning & Definition 18 3.2 Introduction to Ratio Analysis 3.3 Analysis of Data & Its Presentation CHAPTER 4 Conclusion CHAPTER 5 RECOMMENDATIONS & SUGGESTIONS 58 CONCLUSION 56
19

29

Recommendations & Suggestions APPENDEX a) Bibliography 59

1.1

OBJECT OF THE PROJECT

As per mandatory requirement of GGSIPU, I have

undertaken this project as a minor project of Bachelor of Business Administration Each management student learns a lot during his 3 years of BBA program, but the perfection in his learning cant be even imagined until & unless there is a practical training. The project provides required practical training to student

1.2 SELECTION OF THE TOPIC FOR STUDY

Topic selection is the one of the most or one of the important aspects of our project. As it decides the course of action, to be followed. The topic selected should be such that it helps in understanding the ratio concepts clearly, as was given the topic by the company itself.

The topic given by my project guide was RATIO ANALYSIS AS PER THE FINACIAL STATEMENT OF INFOSYS This covers all the things related to the Ratio Analysis provided by the company.

OBJECTIVE OF THE STUDY

While going through any advertisement for recruitment it is realized that any organization call for candidates with the main condition of work experience. It is clear-cut mentioned in such advertisement that preference would be given to candidates with experience. This point out that practical exposure is extremely important. So, right the GGSIPU has taken right step by making it mandatory for the students to do the project work in an organization. This would help the student to get practical knowledge along with the theoretical knowledge. The objectives of the minor project are as follows:
To be able to apply the theoretical knowledge obtained at

the institute in a practical manner in the actual business environment.

To get the knowledge about organizational problems,

perceptions and challenges.

To get an opportunity of real life business experience.

To interact with the managers of the company and gain

knowledge through their real life experience.

1.3 METHODOLOGY OF THE STUDY

The data collected for the project was in the form of written as well as verbal information regarding ratio analysis of the company. 1) Primary data: The information about the Company is gathered from the discussion with the employees/staff and from the web site of the Company.

2) Secondary data:The secondary data collected The balance sheets as on the date of 31st march for the years2008-2009 2009-2010
The methodology of this study has been adopted on the following basis: Study of various Journals, Notes & Books. Study through web-sites Collection of Primary & Secondary data records of the organization. Analysis of the collected data for its application.

1.5 LIMITATION OF THE STUDY

Generally company does not allow outsiders to conduct any study or research work in company. Therefore, get the project done in company itself was very difficult. Due to confidentiality some important information, which are

important for the project, could not be collected. Some of the information is lack of accuracy, due to which

approximately values were used for the analysis. Hence, the results also reveal approximate values. The project is based on theoretical guidelines and as per

situations prevalent at the time of practical training. Hence, it may not be apply to different situations.
The time span for the project was very short which was of 2

months, which itself acts as a major constraint. Moreover, studying the guidelines and applied it practically within such short time span was a task of great pressure.

1.6 UTILITY OF THE STUDY

Management students are known for their presentation skills and practical touch to the theoretical knowledge and are counted in the professionals. A profession is source of livelihood based on substantial body of knowledge & its formal acquisition through practical training & its test of success is the services rendered & not the profit earned thereon. It reveals that the canon of any profession is placed on the ground of theoretical knowledge as well as practical training. Thus it becomes evident that the efforts to prepare this project report are certainly going to be proved as a concrete foundation for our future career. Another aspect of this study is to get acquainted with ground reality in the application of theoretical knowledge & to find out a way to tackle with the situations.

10

11

2.1 INTRODUCTION TO THE ORGANISATION Infosys Technologies Limited ("Infosys" or "the Company") is a publicly held company providing information technology ("IT") solutions principally to Fortune 1000 and emerging new economy companies. Infosys' range of services includes IT consulting, IT architecture, application development, ecommerce and Internet consulting, and software maintenance. In addition, the Company develops and markets certain software products. Headquartered in Bangalore, India, Infosys has 17 state-of-theart offshore software development facilities located throughout India that enables it to provide high quality, cost-effective services to clients in a resource-constrained environment. The Company also maintains offices in North America, Europe and Asia.

12

2.2 ORGANIZATIONAL STRUCTURE

Chairman

M.D.

G.M. HR Deputy G.M.

G.M. Marketing Deputy G.M.

G.M. Finance Deputy G.M.

G.M. Production Deputy G.M. Superintendent

Officer

Officer

Officer

Staff

Staff

Staff

Superviso r Worker

13

2.3

GENERAL

INFORMATION

ABOUT

THE

ORGANIZATION
HISTORY Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981 by seven people with US$ 250. Today, we are a global leader in the "next generation" of IT and consulting with revenues of over US$ 4.8 billion (FY 10). Infosys defines, designs and delivers technology-enabled business solutions that help Global 2000 companies win in a Flat World. Infosys also provides a complete range of services by leveraging our domain and business expertise and strategic alliances with leading technology providers. Our offerings span business and technology consulting, application services, systems integration, product engineering, engineering, independent, IT infrastructure services and business process outsourcing. Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is based on the principle of taking work to the location where the best talent is available, where it makes the best economic sense, with the least amount of acceptable risk. Infosys has a global footprint with 63 offices and development centers in India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan. Infosys and its subsidiaries have 114,822 employees as on June 30, 2010.

14

Infosys takes pride in building strategic long-term client relationships. Over 97% of our revenues come from existing customers (FY 10).

Mission and Vision Statement

MISSION STATEMENT:To achieve companys objective in an environment of fairness, honesty, and courtesy towards their clients, employees, vendors and society at large This statement includes the major element such as corporate characters, stakeholders as well as its social responsibilities. VISION STATEMENT:The vision statement of Infosys is to be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered by best-in-class people

RANGES OF PRODUCTS AND SERVICES

Infosys SCM practice delivers value to multiple domains across functional areas by providing service offerings ranging from consulting to product maintenance and support to drive business competitiveness.
Supply Chain Solutions for Strategic Differentiation and Operational Superiority

15

"Traditional forms of competitive advantage are eroding, but there's also opportunity in the 'flat world'." - John Hagel III Today's global business scenario is no longer limited to competing enterprises rather it is about competing supply chains. Global marketplaces, increasing product variety, shorter product lifecycles, channel proliferation, stringent compliance requirements and global scale of operational linkages are all adding complexity to the supply chain. Organizations need to predict and manage disruption risks while effectively managing customer demand. At the same time they have to cope with ever increasing competitive pressures to lower costs and have to derive the greatest value from sources and resources. Infosys provides end-to-end Supply Chain Management (SCM) offerings that cover the spectrum of extended organization - Supply Chain Planning, Sourcing & Procurement Supply Chain Execution and Enterprise Asset Management - to the world's leading organizations. Our experience in managing complex supply chains combined with leading-edge technology provides customers with cost-effective solutions for streamlined operations. Infosys offers differentiating solutions for your supply chain to address specific business needs across industries We also work with clients in retail, manufacturing and logistics offering innovative RFID technology-based solutions for Warehouse Management, Inventory Optimization and Manufacturing Processes. Infosys has strategic alliance partnerships with leading vendors including SAP, Oracle, Sterling Commerce, Comergent, also having expertise in providing services on packaged supply chain applications including SAP APO, SAP SRM, Oracle APS, Oracle Retail (Retek), Sterling
16

Commerce Suite (Yantra), i2, Manugistics, Ariba and MAXIMO apart from developing industry specific custom applications.

Our Offerings include:

1. 2. 3.

1. 2.

Services: Consulting Package Services Product Maintenance and Support Functional Areas: Supply Chain Planning Sourcing & Procurement
17

3. 4.

Supply Chain Execution Enterprise Asset Management

Consulting Infosys offers services addressing strategic and supply chain issues. The strategic consulting services are enabled by Infosys Consulting. The domain and technology focused supply chain practice at Infosys Technologies partners with clients to address the operational issues through services: Process consulting Supply chain design/ Diagnostics Package evaluation/selection Package/Process readiness Process consulting is provided by leveraging InFluxT , Infosys' trademarked methodology for approaching IT initiatives from a business process perspective

Benefits Aligning IT with business by seamlessly deriving IT requirements from new business requirements Reduces time-to-value for IT projects Package evaluation methodology: assists clients in selecting the right package meeting the business needs and aligning with IT strategy. This process is initiated by understanding business requirements. It includes definition of business scenarios and evaluation criteria, preparation of vendor RFP and demonstration of the package. Package Services Infosys understands the business complexities and market dynamics that affect supply chains. Our SCM industry packages include i2, Manugistics, Yantra, Oracle and SAP. Other methodologies like Intune and Global

18

Delivery Model (GDM) help clients manage end-to-end package implementation services. Infosys' InTrak methodology is an innovative way to streamline implementation of enterprise-wide information systems. It provides a clear path for planning, executing, testing, and supporting the implementation process. InTrak's modular and flexible approach covers all stages of an end-to-end implementation and is based on a deep understanding of business requirements, continuous user training and implementation support. InTrak divides the entire implementation cycle into strategic-level and project-level initiatives. Both these levels consist of different phases, which in turn consist of different sets of activities. To guide the implementation team, each activity is split into tasks and detailed documentation is provided for all activities. Infosys has developed a Global Delivery Model to deliver and sustain value to customers. The model addresses areas of project planning and monitoring, intelligent work breakdown, status review deliverables, and communication infrastructure for global connectivity.Package evaluation methodology: assists clients in selecting the right package meeting the business needs and aligning with IT strategy. This process is initiated by understanding business requirements. It includes definition of business scenarios and evaluation criteria, preparation of vendor RFP and demonstration of the package.

Product Maintenance and Support Infosys SCM service capabilities provide a comprehensive framework for effectively managing the maintenance and production support activities of applications. Our offshore

19

development and support model delivers cost benefits by providing maintenance and support services. Production support services include: 24x7 production support All request resolutions are driven by pre-agreed SLAs, ensuring world-class quality and predictability The service lines that comprise the product maintenance service offering are

Steady State Maintenance Production Support Help Desk Management Keep-It-Running Services

20

21

3.1 MEANING & DEFINITION

Ratio is simply one number expressed in terms of another; e.g. the current assets and current liabilities of one company are Rs. 50000 and Rs. 30000 respectively. So the current assets to current liability ratio will be 5:3. Thus, ratio is numerical presentation of two relevant items. Ratio analysis involves the use of various methods for calculating and interpreting financial ratios to assess the performance and status of the business unit. It is a tool of financial analysis, which studies the numerical or quantitative relationship between two variables or items. Definition:A ratio analysis is a technique of ascertaining and interpreting the numerical relationship of the two relevant items presented in the financial statement.

22

3.2 INTRODUCTION TO RATIO ANALYSIS

CLASSIFICATION OF RATIOS Generally ratios are classified on the following basis. Functional classification. Now, Functional Classification is discussed brief

FUNCTIONAL CLASSIFICATION:The functional classification of ratios considers the basic aspects of business activity as under: a) Liquidity Ratio b) Profitability Ratio c) Activity Ratio or Turnover Ratio d) Leverage Ratio or Solvency Ratio

23

Liquidity: Its ability to maintain positive cash flow, while satisfying immediate obligations. Profitability:Its ability to earn income and sustain growth in both short term and long term. A companys degree of profitability is usually based on the income statement, which reports on the companys result of operations. Activity Ratio or Turnover Ratio:Which measure the efficient utilization of fixed and current assets. Leverage Ratio or Solvency Ratio:Its ability to maintain positive cash flow, while satisfying immediate obligations.

24

Each group is discussed in detail as under:A) Liquidity Ratio:As noted above, these ratios measure the liquidity position of the company, in liquidity ratio there are two types:a) Current Ratio b) Liquid Ratio or Acid Test Ratio a) Current Ratio :Current ratio measures the inter-relationship between current assets the current liabilities. It is also known as working capital ratio. It is ascertained as under:Current Ratio = Current assets / Current liabilities

b) Liquid Ratio:The quick ratio is sometimes called the acid-test ratio and is one of the best measures of liquidity. It is figured as shown below: Quick Ratio = Current Asset - Inventory --------------------------------------Current liabilities

25

The quick ratio is a much more exacting measure than the current ratio. By excluding inventories, it concentrates on the really liquid assets, with value that is fairly certain. It helps answer the question. An acid test of 1:1 is considered satisfactory unless the majority of your quick ratios are in accounts receivable, and the pattern of accounts receivable collection lags behind the schedule for paying current liabilities. Acid-test ratio is ascertained as under:Acid-test ratio = Liquid assets / Liquid liabilities

B) Profitability ratio:Profitability ratios are important because that touch the basic objective of business activity. Generally following profit ratios are ascertained for the purpose of interpretation of financial statements.

1. Gross profit ratio: - This is popularly known as G.P ratio, is ascertained as under:G.P. ratio = Gross profit ------------------- x 100 Sale G.P. = Sales - Cost of goods sold.

26

2. Net profit ratio: - Popularly known as N.P. ratio, considers the net profits to sales as under: N.P. ratio = Net profits ------------------ X 100 Sales Net profit = Sales operating expenses.

As this is profitability ratio, higher the N.P. ratio better will be the profitability on sales.

3. Return capital employed: - It is also called as rate of return. It is ascertained as under: Rate on capital employed = Net profit Preference dividend ----------------------------------------X100 Equity capital

27

C) Activity Ratio or Turnover Ratio:Activity ratios are the productivity ratio which measure the relationship of output (i.e. sales) and Inputs (i.e. individual assets). The following are the important turnover ratio:

a) Inventory turnover ratio:It is also known as stock turnover ratio. This ratio is measure the average investments in inventory in relation to cost of goods sold. It is ascertained as under: Inventory turnover ratio = Cost of goods sold -------------------------------Average inventory Cost of good sold = sales - Gross profits

Average inventory =

Opening inventory + closing inventory ------------------------------------------------------2

28

b)Assets turnover ratio: This ratio indicates the efficient utilization of all assets; i.e. fixed assets and current assets. It is also called as Capital turnover ratio. It is ascertained ad under: Asset turnover = Sales/ Total assets. Total assets =Fixed assets + Current assets. c) Fixed asset turnover ratio: Among the total capital employed in the form of total assets, this ratio measures the contribution of fixed assets in sales and the resultant profitability. It is ascertained as under:Fixed asset turnover ratio = Sales / Total fixed assets. D) Leverage ratio:Leverage ratio measures the use of fixed-interest-bearing securities in magnifying the return on equity capital. It is also called as financial leverage on trading in equity or debt-equity ratio or capital-gearing ratio. It is ascertained as under:Debt- Equity ratio = Long term debt/ Equity (net worth) Thus net worth = Equity capital + Reserves. Proprietary ratio: This ratio measures the proportionate contribution of proprietor in the total assets. 29

It is ascertained as under:Proprietary ratio = Proprietors fund/ Total assets.

E) Valuation ratio:It is also called as pricing ratio. The following are the important valuation ratio:

Earning per share (EPS): EPS is nothing but return on equity as measured in terms of each share. It is ascertained as under:-

EPS

Net profits - Preference dividend -----------------------------------------------Number of equity shares

30

Concept

1)

Gross Profit

: Gross Profit is net of Depreciation but before interest.

2)

Net Profit (Profit after Tax) Current Assets Current Liabilities Capital Employed Net Worth

: Operating Profit minus provision for Tax. Inventories + Debtors + B.R. + Advances + Cash & : Bank Balances Current Liabilities & Provisions + Bank borrowing for : working capital. Net Fixed Assets + Current Assets - Current : Liabilities. Share Capital + Reserve & Surplus - Pre-operative : Expenses

3) 4) 5) 6)

7) 8) 9)

Turnover Debt/Equity Ratio Proprietary Ratio

: Sales/Assets. The ratio of debentures & long term borrowings to Net : Worth. : Total Assets/Shareholders fund.

31

3.3 Analysis of data and its Presentation

Balance sheet

Mar ' 10 Equity share capital Share application money Preference share capital Reserves & surplus Secured loans Unsecured loans Total Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity shares outstanding (Lacs) 287.00 21,749.00 22,036.00 3,779.00 3,779.00 409.00 4,636.00 17,242.00 4,030.00 13,212.00 22,036.00 4,636.00 295.00 5728.30

Mar ' 09 286.00 17,523.00 17,809.00 5,986.00 2,187.00 3,799.00 615.00 1,005.00 15,732.00 3,342.00 12,390.00 17,809.00 1,005.00 347.00 5728.30

Mar ' 08 286.00 13,204.00 13,490.00 4,508.00 1,837.00 2,671.00 1,260.00 964.00 12,326.00 3,731.00 8,595.00 13,490.00 964.00 603.00 5719.96

32

Financial Performance
PROFIT AND LOSS ACCOUNT
Mar ' 10 Mar ' 09 Mar ' 08

Income
Operating income 21,140.00 20,264.00 15,648.00

Expenses
Material consumed Manufacturing expenses Personnel expenses Selling expenses Administrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit Earnings before appropriation Equity dividend Preference dividend Dividend tax Retained earnings 2,317.00 10,356.00 215.00 883.00 13,771.00 7,369.00 910.00 8,279.00 807.00 7,472.00 1,717.00 5,755.00 48.00 5,803.00 5,803.00 1,434.00 240.00 4,129.00 20.00 1,822.00 9,975.00 83.00 1,456.00 13,356.00 6,908.00 874.00 7,782.00 2.00 694.00 7,086.00 895.00 6,191.00 -372.00 -1.00 5,818.00 12,460.00 1,345.00 228.00 10,887.00 18.00 1,549.00 7,771.00 89.00 1,257.00 10,684.00 4,964.00 678.00 5,642.00 1.00 546.00 5,095.00 630.00 4,465.00 5.00 4,470.00 9,314.00 1,902.00 323.00 7,089.00

33

LIQUIDITY RATIO 1) Current ratio 2) Quick ratio CURRENT RATIO The current ratio is another test of a companys financial strength. The current ratio by dividing the total current assets by the total current liabilities.

Current Ratio =

Current assets / Current liabilities

Calculation of ratios:-

2008 2009 2010

= = = = = =

12326/3431 3.30 15732/3342 4.71 17242/4030 4.28

Reporting of Ratios:Particulars Current Ratio 2008 3.30 2009 4.71 2010 4.28

34

Comment:1) In current scenario Infosys has Rs.4.28 to pay Rs.1 i.e. it has 32.8% more capacity to repay its short term liabilities. 2) This depicts sound financial health of the company as far as repaying short term obligations are concerned. 3) Current ratio has increased from year 2008 to year 2009.

Quick Ratio

Quick Ratio

Current Asset - Inventory --------------------------------------Current liabilities

35

Calculation of ratio:2008 2009 2010 = = = = = = Reporting of Ratios:Particulars Quick Ratio 2008 4.20 2009 4.67 2010 4.20 12326-0 4.20 15731-0 4.67 17242-0 4.20

Comment:-

36

1) Quick ratio measures your ability to access cash quickly to support immediate demands. Also known as the acid test, the quick ratio divides current assets excluding inventory by current liabilities. 2) In our case, we can see that the ratio is continuously growing and it is above one which shows high liquidity. LEVERAGE RATIOS 1) Debt Equity ratio 2) Proprietary ratio DEBT EQUITY RATIO:Debt- Equity ratio = Long term debt / Equity (net worth)

Calculation of ratio:-

2008 2009 2010

= = = = = =

NIL NIL NIL

Reporting of Ratios:37

Particulars Debt equity Ratio

2008 0

2009 0

2010 0

Comment:1) The debt equity ratio shows the relative contribution of creditors and owners. Lower the ratio higher is the degree of protection enjoyed by the creditors. 2) Thus we can see that the debt equity ratio of the organization is NIL, increasing the protection of creditors. PROPRIETARY RATIO Proprietary ratio = Proprietors fund / Total assets.

Calculation of ratio:2008 2009 2010 = 13204+286/13490 = 1 = 17523+286/17809 = 1 = 21749+287/22036 = 1

Reporting of Ratios:Particulars Proprietary ratio 2008 1 2009 1 2010 1 38

Comment:1) The proprietary ratio indicates the financial position of the company. 2) Higher the proprietary ratio stronger the financial position. 3) In our case, proprietary ratio not so stronger but constant, it means company is having sound financial position.

PROFITABILITY RATIOS:-

1) Gross profit margin 2) Net profit margin 3) Return on capital employed

GROSS PROFIT:G.P. ratio = Gross profit

39

-------------------- X 100 Sale

Calculation of ratio:2008 2009 2010 = = = = = = 5646/15648*100 36.08 7408/20264*100 36.55 8270/21140*100 39.12

Reporting of Ratios:Particulars Gross Profit 2008 36.08 2009 36.55 2010 39.12

Comment:1) The G.P. margin should be stable because it is directly with sales. 2) The ratio measure efficiency of the companies operation and this can also be compared with the previous years. 3) Here, by comparing the performance of G.P. ratio is better than previous year. It means, the efficiency of operations is increased.

40

Net profit ratio:-

N.P. ratio

Net profits --------------------- X 100 Sales

Net profit

Sales operating expenses.

Calculation of ratio:-

2008 2009 2010

= = = = = =

4470/15648*100 28.56 5819/20264*100 28.71 5803/21140*100 27.45

Reporting of Ratios:-

Particulars Net profit

2008 28.56

2009 28.71

2010 27.45

Comment:1) The ratio is design to focus attaintion on net profit margin arising from business operation.

41

2) The ratio could be compare with that of the previous year. 3) So here, we can observe the volatility in N.P. ratio which is low in 2010 than 2009

Return capital employed: Return on equity capital = Net profit ------------------------------- X 100 Equity Capital

Calculation of ratio:-

2008 2009 2010

= = = = = =

0 0 0

Reporting of Ratios:-

Particulars Return capital employed

2008 nil

2009 nil

2010 nil 42

Comment:1) The strategic aim of a company is to earn a return on capital 2) By analyzing the return on capital employed ratio of the year 08-09 and 10, we can say that the company has earned good amount of return on Investments.

TURN OVER RATIO

1) Inventory turnover ratio 2) Assets turnover ratio 3) Fixed assets turnover ratio

INVENTORY TURNOVER RATIO:-

Inventory turnover ratio =

Cost of goods sold ---------------------------Average inventory

Cost of good sold Average inventory

= Sales - Gross profits = Opening inventory + closing inventory -------------------------------------------------------2 43

Calculation of ratio:-

2008 2009 2010

= = = = = =

Nil Nil Nil

Reporting of Ratios:-

Particulars Inventory turn over ratio

2008 -

2009 -

2010 -

Comment:1) Most of the capital is lock up in the inventory of manufacturing companies.

2) It is important to take at watch on inventory turnover ratio to ensure the level of the stock which is should be kept as low as possible.

3) In our case, we can see that day by the ratio is nil. Therefore it is good for the company.

44

ASSET TURNOVER RATIO:This ratio indicates the efficient utilization of all assets; i.e. fixed assets and current assets.

Asset turnover = Sales / Total assets. Total assets = Fixed assets + Current assets

Calculation of ratio:-

2008 2009 2010

= = = = = =

15648/13490 1.15 20264/17809 1.13 21140/22036 0.95

Reporting of Ratios:-

Particulars Assets turnover ratio

2008 1.15

2009 1.13

2010 0.95

Comment: -

45

1) This ratio indicate the efficient utilization of all assets; i.e. fixed assets and current assets. It is also called as Capital turnover ratio. 2) Higher the ratio indicates the over utilization of assets a medium ratio means an optimum utilization of assets and lower ratio indicates idle capacity. 3) In our case, the ratio is going down which means there may be fear of assets remaining idle, if proper utilization is not carried.

Fixed asset turnover ratio:-

Fixed asset turnover ratio = Sales / Total fixed assets.

Calculation of ratio:-

2008 2009 2010

= = = = = =

15648/1164 13.44 20264/11823 1.71 21140/4794 4.40

46

Reporting of Ratios:-

Particulars Fixed assets ratio

2008 13.44

2009 1.71

2010 4.40

Comment:1) Among the total capital employed in the form of total assets, this ratio measures the contribution of fixed assets in sales and the resultant profitability. 2) It is difficult to interpretate ratio as assets value based on historic cost. 3) Stable ratio can be taken, as a positive indicator in our case there is no much volatibility

VALUATION RATIO EARNING PER SHARE:-

EPS

Net profits - Preference dividend -------------------------------------------Number of equity shares

Calculation of ratio:-

47

2008 2009 2010

= = = = = =

4470-0/57.2 78.24 5818-0/57.2 101.65 5803-0/57.2 100.37

Reporting of Ratios:Particulars Earning per share 2008 78.24 2009 101.65 2010 100.37

Comment:1) Higher the EPS is makes the company more attractive. 2) In last year the company was having good EPS. It means, it can attract more funds from shareholders.

48

Conclusions:
In this project, I reviewed following areas of financial ratio analysis research: The functional form of the financial ratios, i.e. the proportionality discussion Classification of financial ratios.

49

It is obvious that the existing main research areas in financial ratio analysis are fairly separate from each other sometimes with traditions of their own. The research on the functional form of financial ratios has been characterized by theoretical discussions about the ratio format in financial ratio analysis and empirical testing of the ratio model. We conclude from the review that the proportionality assumption for financial ratios is stronger within an industry Moreover; proportionality varies from ratio to ratio, and between times, periods indicating problems in temporal stability.

50

51

RECOMMENDATIONS AND SUGGETIONS

Followings are the suggestions made on the basis of study made: 1) The current ratio is means to the near to the standard current ratio 2:1 but still main point management should consider is that there is very high amount blocked in debtors as well as the current liabilities and provisions are pending is high. 2) Management used to concentrate on the profitability of the company as gross profit ratio and net profit ratio indicates very low profitability.

3) Management also needs to concentrate on sales as indicated low with respect to turnover ratios.

52

APPENDIX

BIBLIOGRAPHY
ANNUAL REPORT 2008-2009,2009-2010
ECONOMIC TIMES

WWW.INFOSYS.COM
GOOGLE.COM

53