Description
PPT ON RATIO ANALYSIS ON INFOSYS AND INFOTECH
RATIO ANALYSIS
Introduction Comparison of ratio between two consequent years of one company Comparison of ratio between two companies for the same year Conclusion
WHAT IS RATIO ANALYSIS?
It is NOT just comparing different numbers from the balance sheet, income statement, and cash flow statement.
It is about comparing the number against previous years, other companies, the industry, or even the economy in general. Ratios look at the relationships between individual values and relate them to how a company has performed in the past, and might perform in the future.
Profitability Ratios for
Mar’07 Mar’06
28.57
28.05 33.47
Ratio
Gross profit margin (%)
Net profit margin (%) Adjusted return on net worth(%) Return on long term funds (%)
Formula
Revenue – COGS x100 Revenue
Net profit x 100 Revenue
Net income x100 Avg. stockholder’s equity
28.58
26.17 36.21
EBIT x 100 Long term funds
36.64
40.62
Per Share Ratios for
Ratio
Adjusted EPS (Rs.) Dividend per share (Rs.) Operating profit per share (Rs.)
Formula
EBIT-Adjustments Total No. of Shares Total Dividend Total No. of Shares Operating profit Total No. of Shares
Mar’07 Mar’06
65.42 11.50 73.98 230.20 190.30 90.65 45.00 108.51 327.63 245.07
Net operating income Net Operating Income per share (Rs.) Total No. of Shares
Free reserves per share (Rs.)
Total free reserves Total No. of Shares
Leverage Ratios for
Ratio
Long term debt/ Equity Total debt/ equity Owners fund as % of total source Fixed assets turnover ratio
Formula
Long Term Debt Equity Total Debt Equity Equity *100 Total Funds Sales Fixed Assets
Mar’07 Mar’06
0 0 100 3.38 0 0 100 3.18
Liquidity Ratios for
Ratio
Current ratio Quick ratio
Formula
Current Assets
Current Liabilities
Current Assets-Inventories Current Liabilities
Mar’07 Mar’06
4.96 4.91 2.75 2.73
Payout Ratios for
Ratio
Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio
Mar’07
19.85 17.66 79.91 82.15
Mar’06
58.32 49.89 43.48 51.43
Per Share Ratio for the year 06-07
Ratio
Adjusted EPS
Dividend Per Share
65.42
11.5
6.68
2.00
Operating Profit per share
Net Operating income per share Free Reserves per share
73.98
230.20 190.30
12.91
59.04 54.23
Profitability Ratios for the year 06-07
Ratio
Operating Margin(%) 32.13 21.87 17.72 14.48
Gross Profit Margin(%) 28.57 Net Profit Margin(%) 28.05
Adjusted Return On Net worth(%)
Return on long term funds(%)
33.47
36.64
16.91
6.81
Leverage Ratios for the year 06-07
Ratio
Long Term Debt/Equity 0 1.75
Total Debt/Equity
Owners Fund as % of total source Fixed assets Turnover Ratio
0
100 3.38
1.79
35.88 2.96
Liquidity Ratios for the year 06-07
Ratio
Current Ratio 4.96 3.24
Quick Ratio
4.91
3.03
Payout Ratios for the year 06-07
Ratio
Dividend payout Ratio (net profit)
Formula
Dividends (yearly) /Net Income 19.85 32.63
Earning Retention Net IncomeDividends/ Ratio
Net Income
79.91
62.61
CONCLUSION
Ratio Analysis is the basic tool of financial analysis and Financial analysis itself is an important part of any business planning process as SWOT ,being basic tool of the strategic analysis plays a vital role in a business planning process and no SWOT analysis would be complete without an analysis of companies financial position. In this way Ratio Analysis is very important part of whole business strategic planning.
As Companies Dispatch their long annual report once a year, the financial ratio help us to profile a company easily.
doc_714968874.ppt
PPT ON RATIO ANALYSIS ON INFOSYS AND INFOTECH
RATIO ANALYSIS
Introduction Comparison of ratio between two consequent years of one company Comparison of ratio between two companies for the same year Conclusion
WHAT IS RATIO ANALYSIS?
It is NOT just comparing different numbers from the balance sheet, income statement, and cash flow statement.
It is about comparing the number against previous years, other companies, the industry, or even the economy in general. Ratios look at the relationships between individual values and relate them to how a company has performed in the past, and might perform in the future.
Profitability Ratios for
Mar’07 Mar’06
28.57
28.05 33.47
Ratio
Gross profit margin (%)
Net profit margin (%) Adjusted return on net worth(%) Return on long term funds (%)
Formula
Revenue – COGS x100 Revenue
Net profit x 100 Revenue
Net income x100 Avg. stockholder’s equity
28.58
26.17 36.21
EBIT x 100 Long term funds
36.64
40.62
Per Share Ratios for
Ratio
Adjusted EPS (Rs.) Dividend per share (Rs.) Operating profit per share (Rs.)
Formula
EBIT-Adjustments Total No. of Shares Total Dividend Total No. of Shares Operating profit Total No. of Shares
Mar’07 Mar’06
65.42 11.50 73.98 230.20 190.30 90.65 45.00 108.51 327.63 245.07
Net operating income Net Operating Income per share (Rs.) Total No. of Shares
Free reserves per share (Rs.)
Total free reserves Total No. of Shares
Leverage Ratios for
Ratio
Long term debt/ Equity Total debt/ equity Owners fund as % of total source Fixed assets turnover ratio
Formula
Long Term Debt Equity Total Debt Equity Equity *100 Total Funds Sales Fixed Assets
Mar’07 Mar’06
0 0 100 3.38 0 0 100 3.18
Liquidity Ratios for
Ratio
Current ratio Quick ratio
Formula
Current Assets
Current Liabilities
Current Assets-Inventories Current Liabilities
Mar’07 Mar’06
4.96 4.91 2.75 2.73
Payout Ratios for
Ratio
Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio
Mar’07
19.85 17.66 79.91 82.15
Mar’06
58.32 49.89 43.48 51.43
Per Share Ratio for the year 06-07
Ratio
Adjusted EPS
Dividend Per Share
65.42
11.5
6.68
2.00
Operating Profit per share
Net Operating income per share Free Reserves per share
73.98
230.20 190.30
12.91
59.04 54.23
Profitability Ratios for the year 06-07
Ratio
Operating Margin(%) 32.13 21.87 17.72 14.48
Gross Profit Margin(%) 28.57 Net Profit Margin(%) 28.05
Adjusted Return On Net worth(%)
Return on long term funds(%)
33.47
36.64
16.91
6.81
Leverage Ratios for the year 06-07
Ratio
Long Term Debt/Equity 0 1.75
Total Debt/Equity
Owners Fund as % of total source Fixed assets Turnover Ratio
0
100 3.38
1.79
35.88 2.96
Liquidity Ratios for the year 06-07
Ratio
Current Ratio 4.96 3.24
Quick Ratio
4.91
3.03
Payout Ratios for the year 06-07
Ratio
Dividend payout Ratio (net profit)
Formula
Dividends (yearly) /Net Income 19.85 32.63
Earning Retention Net IncomeDividends/ Ratio
Net Income
79.91
62.61
CONCLUSION
Ratio Analysis is the basic tool of financial analysis and Financial analysis itself is an important part of any business planning process as SWOT ,being basic tool of the strategic analysis plays a vital role in a business planning process and no SWOT analysis would be complete without an analysis of companies financial position. In this way Ratio Analysis is very important part of whole business strategic planning.
As Companies Dispatch their long annual report once a year, the financial ratio help us to profile a company easily.
doc_714968874.ppt