A Study and interpretation of balance sheet of 5 IT company

Project Synopsis Submitted to Management Department, ITM University, Gwalior

Submitted To

Submitted By(Taylor section)

Ms.Twesha chharia Assistant Professor ITM University Gwalior

Priya Murmu Rana Pratap Farad Khan Pranay Aginhotri Richa Manthakar
YOUNIS ZAHID

Institute: Management Department ITM University

IT SECTOR COMPANY

TCS is the largest software company in Asia,

having a wide range of offerings.

Ranked amongst the worlds top 20 IT consulting

organizations.

Added 35 clients in the third quarter of the current

fiscal.

During the quarter TCS wins an Rs 850 million

three-year deal for implementing smart card-based financial Inclusion Solution (FIS) for Indian Bank.

During the quarter Hilton Worldwide Signs MultiYear Agreement with TCS.

During the quarter company had won a contract for

establishing and managing the State Data Center (SDC) for the state of Uttar Pradesh.

During the quarter TCS signed a multi- year contract

with Telenor Norway to modernise its IT.

Total head count of the company as on Dec. 31,

2010 stood at 186,914 with utilization rate at 83.8%.

Revenue from the top 10 clients contributed

30.1% in FY11.
Named Indias Most Respected Company in the Business world 2006 survey for the fourth consecutive time Adjudged Indias Best Managed Company in a study conducted by Business Today and A.T. Kearney Forbes: Infosys is a role model for companies everywhere in financial transparency. Dream company to work for in India and amongst the 100 best places to work for in IT in the US Amongst the first companies in world to be certified at CMMI Level 5 Business Week: Amongst the top 3 IT Services companies in the world Wired rated Infosys among its top 40 companies that have reshaped the global economy.

 With over 2.5 million man-hours of consulting work across the entire spectrum of Indian business. Wipro has evolved into a leading global IT company, a company which has pioneered many an innovation in the IT services, BPO and R&D services space. Headquartered at Bangalore, India, we at Wipro implement the philosophy of 'Applying Thought', thereby helping clients to "Do Business Better". Wipro's Global IT business caters to more than 150 global Fortune 500 clients across financial services, retail, transportation, manufacturing, healthcare services, energy and utilities, technology, telecom and media. Employ over 120,000 people from over 70 nationalities and 72 plus global delivery centers across 5 continents. Wipro, one of the world's most trusted brands, is a name with a long history that powers itself into new ventures.

HCL is a leading global Technology and IT Enterprise with annual revenues of US$ 4.9 billion. The HCL Enterprise comprises two companies listed in India, HCL Technologies and HCL Infosystems. The 3 decade old enterprise, founded in 1976, is one of India's original IT garage start ups. Its range of offerings span R&D and Technology Services, Enterprise and Applications Consulting, Remote Infrastructure Management, BPO services, IT Hardware, Systems Integration and Distribution of Technology and Telecom products in India. The HCL team comprises 55,000 professionals of diverse nationalities, operating across 18 countries including 360 points of presence in India. HCL has global partnerships with several leading Fortune 1000,including several IT and Technology majors.

The Tech Mahindra Foundation (TMF) works

across the themes/verticals of

Education and child development Womens empowerment Vocational Training and Empowering the disabled with a niche in the area of our support to the visually challenged

The above themes are implemented in

partnership with 60 NGOs across Delhi/ Noida , Pune, Mumbai and Bangalore.

A distribution of projects/programmes across

regions is as follows

Pune - 20 partners and 23 projects Mumbai - 10 partners; 10 projects Delhi/Noida - 21 partners; 26 projects Bangalore - 9 partners; 11 projects

The Foundation believes in reaching out to

communities, finding outstanding individuals & organisations and partnering them to bring about positive change in society.

*Liquidity Ratios: The term liquidity refers to the speed with which an asset can be converted into cash without large discounts to its value or we can say that easily convertible in cash. a) Current Ratio =Current Assets Current Liabilities b) Quick Ratio =Current Assets - Inventories Current Liabilities *Efficiency Ratios:-As the name defines efficiency,this ratio is used to calculate the efficiency of two companies.
a) Inventory Turnover Ratio= Cost of Goods Sold Inventory b) Accounts ReceivableTurnover Ratio=

Credit Sales Accounts Receivable c) Average Collection Period= Accounts Receivable Annual Credit Sales 360 d) Fixed Asset Turnover= Sales

Net Fixed Assets

e) Total Asset Turnover =Sales Total Assets

*Leverage Ratios:- In this, leverage refers to a multiplication of changes in profitability measures.

a) Long-Term Debt Ratio= Long-Term Debt Total Assets

b) Debt to Equity =Total Debt Total Equity c) Long-Term Debt to Equity = LTD Preferred Equity + Common Equity

*Coverage Ratios:-It is like leverage ratio, and defines the company having sufficient fund to cover it or not.
a) Times Interest Earned =EBIT Interest Expense

b) Cash Coverage Ratio= EBIT + Non-Cash Expenses Interest Expense

*Profitability Ratios:-Its easily made the comparision between present and previous period of profit.
a) Gross Profit Margin= Gross Profit Sales

b) Operating Profit Margin = Net Operating Income Sales c) Net Profit Margin =Net Income Sales

d) Return on Total Assets =Net Income Total Assets

e) Return on Equity =Net Income Total Equity

f) Return on Common Equity= Net Income Available to Common Common Equity

CALCULATION OF RATIOS OF TCS:

Mar '11 1.Current Ratio 2.Quick Ratio 3.Inventory Turnover Ratio 4.Assets ratio 5.Long-Term Debt Ratio Mar '10 Mar '09 Mar '08 Mar '07 2.303324441 1.06114104 1.164309219 1.458472576 1.507735 2.30195886 1.05911881 1.159606346 1.451666165 1.500845

204.3798883 187.025074 71.88259587 57.67481094 63.43947 1.492074405 1.52087464 1.661201991 1.681615631 1.842489 0.002095755 0.00235871 0.002993337 0.00165562 0.006257

6.Debt to Equity

0.210096056 0.18260781 0.412528101 0.186490905 0.518496

7.Long-Term Debt to Equity

0.139050453 0.12085757 0.204033155 0.092236935 0.518496

8.Times Interest Earned

435.804098

667.289308 677.9596774 1453.146199 1216.187

9.Cash Coverage Ratio 476.862069 727.150943 762.4637097 1638.01462 1353.808

10.Gross Profit Margin

0.962510517 0.94497553 0.945616408 0.946514858 0.948797

11.Operating Profit Margin

0.016288826 0.03155374 0.034032481 0.088366747 0.090604

12.Net Profit Margin

0.258578445 0.24380772 0.209614801 0.243236201 0.251457

CALCULATION OF RATIOS OF INFOSYS:

Mar '11
1.Current Ratio 2.Quick Ratio 3.Inventory Turnover Ratio

Mar '10

Mar '09 0.2355551 0.24 -0.15

1.137851648

Mar '08 0.2779837 0.28 -0.14

1.159970348

Mar '07 0.266261 0.27 -0.10

1.17801469

0.19807355 0.1893719 0.20 #DIV/0!

1.03608016

0.19 -0.27
0.959339263

4.Assets ratio
5.Long-Term Debt Ratio

6.Debt to Equity

7.Long-Term Debt to Equity

8.Times Interest Earned

8822

3761

3358

5101

4136

9.Cash Coverage Ratio

8786

3553.5

3272

4969

3979.53

10.Gross Profit Margin

0.92775261 0.9530747

0.9325405

0.9224182

0.920106

11.Operating Profit Margin

0.33149498 0.3482498

0.3409001

0.317229

0.321393

12.Net Profit Margin

0.25381131 0.2745033

0.2871595

0.2856595

0.287702

CALCULATION OF RATIOS OF WIPRO:

Mar '11
1.Current Ratio 2.Quick Ratio
3.Inventory Turnover Ratio

Mar '10 1.971297854 1.846785113 2.457406492 0.99069433 0.238140761

Mar'09 1.103858527

Mar '08 2.1762851

Mar '07 0.858414752

1.968147448 1.831115312 2.349703407 1.012898523 0.182010359

1.021260536 2.04298548 0.778252026 3.313751088 1.24481143 0.114808652 1.232980963 1.14417065 1.439414546 0.286036203 0.24767545 0.024899565

4.Assets ratio 5.Long-Term Debt Ratio

6.Debt to Equity

9.66605542

18.83583106

17.11228669 13.0769757 0.815627142

7.Long-Term Debt to Equity

9.66605542

18.83583106

17.11228669 13.0769757 0.815627142

8.Times Interest Earned

112.0699659

64.9258517

20.94512195 33.1857877 487.5416667

9.Cash Coverage Ratio

131.609215

74.16232465

24.45833333 55.0864726

852

10.Gross Profit Margin

0.935483993

0.935174278

0.929532499

0.9684111

0.997993967

11.Operating Profit Margin 0.218205991 0.239130151 0.220179708 0.21041901 0.236544681

12.Net Profit Margin

0.183465146

0.212898206

0.137594389 0.17347846 0.206570484

CALCULATION OF RATIOS OF HCL:

Jun '11 1.Current Ratio 2.Quick Ratio 3.Inventory Turnover Ratio 4.Assets ratio 5.Long-Term Debt Ratio Jun '10 Jun '09 Jun '08 Jun '07 0.804166 0.606796 0.485828 0.604765 0.488208 0.503409 0.223954 0.018276 0.056771 -0.07898

0.581458 0.347738 0.304415 0.284259 0.248936 4.380586 4.959226 9.076456 9.249581 10.93169 0.228767 0.209659 0.166898 0.259515 0.218194

6.Debt to Equity

12.95514 11.68225 6.625292 10.30266 6.972805

7.Long-Term Debt to Equity

#DIV/0!

28.85852

#DIV/0!

#DIV/0!

#DIV/0!

8.Times Interest Earned

3.617464 7.946119 7.592279 8.383923 14.61159

9.Cash Coverage Ratio

4.105339 8.689525 8.376873 8.918593 15.76037

10.Gross Profit Margin

0.969177 0.975916 0.978082 0.979683 0.983323

11.Operating Profit Margin

0.024919 0.031911 0.035765 0.036765 0.035108

12.Net Profit Margin

0.016026 0.021684 0.021111 0.024245 0.026895

CALCULATION OF RATIOS OF TECH MAHINDRA:

Mar '11 1.Current Ratio 2.Quick Ratio 3.Inventory Turnover Ratio 4.Assets ratio 5.Long-Term Debt Ratio Mar '10 Mar '09 Mar '08 Mar '07 2.295611 1.6937674 1.16564965 0.938821 0.6933887 8.726753 8.7050836 661 0.95667 2.7974401 2.086723 1.8658889 #DIV/0! #DIV/0!

310.42857 387.230769

0.8964731 2.31686958 2.723817 2.9579707 0 0.071785 0.0565655

0.348027 0.4268434

6.Debt to Equity

14.33651 17.456255

0.782537 0.4343343

7.Long-Term Debt to Equity

14.33651 17.456255

0.782537 0.4343343

8.Times Interest Earned

7.568867

6.088475

437.2

15.5265

6.7208971

9.Cash Coverage Ratio

9.512632 7.1420256

524.52

21.87633 13.356355

10.Gross Profit Margin

0.920129 0.9030733

0.884483

0.824202 0.8435105

11.Operating Profit Margin

0.191461

0.243878

0.28691083 0.232863 0.2618316

12.Net Profit Margin

0.140308 0.1656631 0.22639864 0.090354 0.0236923