Description
This is a report about the financial analysis of infosys.
Ratio analysis of two IT industries
INFOSYS
TCS
Ratio Analysis
It’s a tool which enables the banker or lender to arrive at the following factors : ?Liquidity position ?Profitability ?Solvency ?Financial Stability ?Quality of the Management ?Safety & Security of the loans & advances to be or already been provided
How a Ratio is expressed?
? As Percentage - such as 25% or 50% . For example if net profit is
Rs.25,000/- and the sales is Rs.1,00,000/- then the net profit can be said to be 25% of the sales. ? As Proportion - The above figures may be expressed in terms of the relationship between net profit to sales as 1 : 4. ? As Pure Number /Times - The same can also be expressed in an alternatively way such as the sale is 4 times of the net profit or profit is 1/4th of the sales.
Classification of Ratios
Balance Sheet Ratio P&L Ratio or Income/Revenue Statement Ratio
Operating Ratio
Balance Sheet and Profit & Loss Ratio
Financial Ratio
Composite Ratio
Current Ratio Quick Asset Ratio Proprietary Ratio Debt Equity Ratio
Gross Profit Ratio Operating Ratio Expense Ratio Net profit Ratio Stock Turnover Ratio
Fixed Asset Turnover Ratio, Return on Total Resources Ratio, Return on Own Funds Ratio, Earning per Share Ratio, Debtors’ Turnover Ratio,
Current Ratio
It is the relationship between the current assets and current liabilities of a concern. Current Ratio = Current Assets Current Liabilities
TCS Current assets (in crores) Current Liabilities (in crores) Current Ratio 7876.91 3545.8 2.2:1 INFOSYS 5507 1162 4.7:1
Proprietory Ratio
This ratio indicates the extent to which Tangible Assets are financed by Owner’s Fund. Proprietary Ratio = Proprietors funds * 100 Total assets TCS
Proprietory Funds Total assets
INFOSYS 8388 8496 98.73%
8850.10 10788.5 82.8%
Proprietary Ratio
Gross Profit Ratio
By comparing Gross Profit percentage to Net Sales we can arrive at the Gross Profit Ratio which indicates the manufacturing efficiency as well as the pricing policy of the concern Gross Profit Ratio = Gross Profit * 100 Sales TCS INFOSYS
Gross Profit(in crores)
Net Sales(in crores) Gross Profit Ratio
5367.90
18914.26 28.38%
5871
13149 44.65%
Net Profit Ratio
It measures overall profitability. Net Profit Ratio= Net profit Net sales
* 100
TCS Net Profit (In crore) Net Sales (In crore) 4212.63 18914.26
INFOSYS 3783 13149
Net Profit Ratio
22.27%
28.77%
Operating Ratio
Higher the ratio indicates operational efficiency Operating Ratio = COGS + Operating Expenses Net Sales * 100
TCS
INFOSYS
Operating Expenses (in crore)
5803.03
2575
Net Sales (in crore)
Operating Ratio
18914.26
30.68%
5912
43.55%
Return On Shareholders Equity
Return On Shareholders Equity = Net Profit
* 100
Share-Holders fund
TCS Net Profit
Share -Holders Funds
Return On Shareholders Equity
4212.6 8850.10 47.59%
INFOSYS
3783 11162 33.89%
Return on Capital Employed
? Average Capital Employed is the average of the equity share capital and
long term funds provided by the owners and the creditors of the firm at the beginning and end of the accounting period.
? Return on capital employed =
EBIT * 100 capital employed
TCS EBIT
4918.28
9640.35
INFOSYS
5104.38
11162
Capital employed
Ratio
51.01%
45.73%
THANK –YOU
Niranjan S. Bapat Kaushal Achtani
doc_539964384.pptx
This is a report about the financial analysis of infosys.
Ratio analysis of two IT industries
INFOSYS
TCS
Ratio Analysis
It’s a tool which enables the banker or lender to arrive at the following factors : ?Liquidity position ?Profitability ?Solvency ?Financial Stability ?Quality of the Management ?Safety & Security of the loans & advances to be or already been provided
How a Ratio is expressed?
? As Percentage - such as 25% or 50% . For example if net profit is
Rs.25,000/- and the sales is Rs.1,00,000/- then the net profit can be said to be 25% of the sales. ? As Proportion - The above figures may be expressed in terms of the relationship between net profit to sales as 1 : 4. ? As Pure Number /Times - The same can also be expressed in an alternatively way such as the sale is 4 times of the net profit or profit is 1/4th of the sales.
Classification of Ratios
Balance Sheet Ratio P&L Ratio or Income/Revenue Statement Ratio
Operating Ratio
Balance Sheet and Profit & Loss Ratio
Financial Ratio
Composite Ratio
Current Ratio Quick Asset Ratio Proprietary Ratio Debt Equity Ratio
Gross Profit Ratio Operating Ratio Expense Ratio Net profit Ratio Stock Turnover Ratio
Fixed Asset Turnover Ratio, Return on Total Resources Ratio, Return on Own Funds Ratio, Earning per Share Ratio, Debtors’ Turnover Ratio,
Current Ratio
It is the relationship between the current assets and current liabilities of a concern. Current Ratio = Current Assets Current Liabilities
TCS Current assets (in crores) Current Liabilities (in crores) Current Ratio 7876.91 3545.8 2.2:1 INFOSYS 5507 1162 4.7:1
Proprietory Ratio
This ratio indicates the extent to which Tangible Assets are financed by Owner’s Fund. Proprietary Ratio = Proprietors funds * 100 Total assets TCS
Proprietory Funds Total assets
INFOSYS 8388 8496 98.73%
8850.10 10788.5 82.8%
Proprietary Ratio
Gross Profit Ratio
By comparing Gross Profit percentage to Net Sales we can arrive at the Gross Profit Ratio which indicates the manufacturing efficiency as well as the pricing policy of the concern Gross Profit Ratio = Gross Profit * 100 Sales TCS INFOSYS
Gross Profit(in crores)
Net Sales(in crores) Gross Profit Ratio
5367.90
18914.26 28.38%
5871
13149 44.65%
Net Profit Ratio
It measures overall profitability. Net Profit Ratio= Net profit Net sales
* 100
TCS Net Profit (In crore) Net Sales (In crore) 4212.63 18914.26
INFOSYS 3783 13149
Net Profit Ratio
22.27%
28.77%
Operating Ratio
Higher the ratio indicates operational efficiency Operating Ratio = COGS + Operating Expenses Net Sales * 100
TCS
INFOSYS
Operating Expenses (in crore)
5803.03
2575
Net Sales (in crore)
Operating Ratio
18914.26
30.68%
5912
43.55%
Return On Shareholders Equity
Return On Shareholders Equity = Net Profit
* 100
Share-Holders fund
TCS Net Profit
Share -Holders Funds
Return On Shareholders Equity
4212.6 8850.10 47.59%
INFOSYS
3783 11162 33.89%
Return on Capital Employed
? Average Capital Employed is the average of the equity share capital and
long term funds provided by the owners and the creditors of the firm at the beginning and end of the accounting period.
? Return on capital employed =
EBIT * 100 capital employed
TCS EBIT
4918.28
9640.35
INFOSYS
5104.38
11162
Capital employed
Ratio
51.01%
45.73%
THANK –YOU
Niranjan S. Bapat Kaushal Achtani
doc_539964384.pptx