16 - Manju - Infosys Technolgy Ltd

8/8/2019 16 - Manju - Infosys Technolgy Ltd.

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Ratio Analysis for Infosys te

2005- 2009Balance SheetP&L accountCash FlowsRatios- DefinitionsRatios for Infosys- 2005- 2009Analysis


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hnologies

Submitted by:Name Manju ChandelClass MBA GeneralRoll No. 16


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Ratio

Liquidity Ratios

Current RatioQuick RatioCash Ratio

Solvency Ratios

Debt Equity Ratio Total assets to debt ratioInterest coverage ratioLong term debt to equity

Profitability RatiosGross profit marginOperating profit marginPre tax profit marginNet profit margin

Efficiency RatiosReturn on assetsReturn on equityInventory turnover ratio

Earnings Per Share


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Explanation

Current Assets/ Current liabilitiesCash& equivalents+short term investments+accounts receivables/Current liabilitiesCash & equivalents/ Current liabilities

Total Debt/ Total Equity Total assets/ DebtEarnings before interest and taxes/ Interest expenseLong term debt/ Net worth

Gross profit/ Net sales(Revenue)Operating profit/ Net Sales(Revenue)Profit before tax/ Net sales (Revenue)Net profit/ Net sales (Revenue)

Net income/Average total assetsNet income/Average shareholders equitySales/ Average Inventory

(Net income- dividends on preferred stock)/ Average outstanding shares

Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is done by comparing a company's most liquid assets (or, those that

can be easily converted to cash), its short-term liabilities.

These ratios give users a general idea of the company's overall debt load as well asits mix of equity and debt. Debt ratios can be used to determine the overall level of

financial risk a company and its shareholders face. In general, the greater theamount of debt held by a company the greater the financial risk of bankruptcy.

These ratios give users a good understanding of how well the company utilized itsresources in generating profit and shareholder value.

Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios can calculate the turnover of receivables,

the repayment of liabilities, the quantity and usage of equity and the general use of inventory and machinery.


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Ratio Mar '05 Mar '06 Mar '07 Mar '08

Liquidity Ratios

Current Ratio 2.80 2.75 4.96 3.30Quick Ratio 2.63 2.55 2.56 2.53Cash Ratio 0.46 0.67 0.59 0.44

Solvency Ratios

Debt Equity Ratio -- -- -- -- Total assets to debt ratio -- -- -- --Interest coverage ratio -- -- -- --Long term debt to equity -- -- -- --

Profitability RatiosGross profit margin 36.4% 34.7% 35.0% 36.1%Operating profit margin 33.9% 33.1% 32.1% 31.7%Pre tax profit margin 32.5% 30.2% 31.4% 32.6%Net profit margin 27.8% 26.8% 28.8% 28.6%

Efficiency Ratios

Return on assets 36.3% 35.1% 33.9% 33.1%Return on equity 14.08 17.54 13.23 15.63Inventory turnover ratio -- -- -- --

Earnings Per Share70.38 87.86 66.23 78.15


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Mar '09 Comments

4.712.720.52

--------

36.6%34.1%33.1%28.7%

32.7%20.35

-- Inventory is 0 for all the years

101.58

The optimal current ratio is 2:1 and that for quick ratio is 1:1.The trend indicates that the company is capable of properly

paying off its short term debt obligations. The short termassets have shown constant change whereas the most liquid

assets and cash ratio is almost same.

Debt on a company's balance sheet is crucial. No debt on thebalance sheet is a sign of prosperity. The company doesnt

have any debt.

This has almost the same ratio in 5 year period and isindicative that the company is doing well.

This ratio for Return on assets have decreased which indicatesthat the company is not able to use the assets and liabilities

in a fruitful manner internally. The return to equity is varyingbut is on upward trend for last two years. It indicates that thecompany is using shareholders money properly to gain profit.

EPS is on increasing trend showing the company is able togenerate wealth for the shareholders.


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Mar '05 Mar '06 Mar '07 Mar '08 Mar '090.00

1.00

2.00

3.00

4.00

5.00

6.00

2.80 2.75

4.96

3.30

4.71

2.63 2.55 2.56 2.53 2.72

0.46 0.67 0.59 0.44 0.52

Current Ratio Quick Ratio Cash Ratio

Mar '05 Mar '06 Mar '07 Mar '08 Mar '0920%

25%

30%

35%

40%

Profitability Ratios

Gross profitmargin

Operating profitmargin

Pre tax profitmargin

Net profit margin

Mar '05 Mar '06 Mar '07 Mar '08 Mar '0930.0%31.0%32.0%33.0%34.0%35.0%36.0%37.0%

Return on Assets

Return on assets

Mar '05 Mar '06 Mar '07 Mar '08 Mar '090.00

5.00

10.00

15.0020.00

25.00

14.0817.54

13.2315.63

20.

Return on equity

Return on equity


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Infosys TechnologiesBalance Sheet - in Rs. Cr. -

Mar '05 Mar '06 Mar '07 Mar '0812 mths 12 mths 12 mths 12 mths

Sources Of Funds Total Share Capital 135.29 138 286 286

Equity Share Capital 135.29 138 286 286Share Application Money 0 0 0 0Preference Share Capital 0 0 0 0Reserves 5,106.44 6,759.00 10,876.00 13,204.00Revaluation Reserves 0 0 0 0Networth 5,241.73 6,897.00 11,162.00 13,490.00Secured Loans 0 0 0 0Unsecured Loans 0 0 0 0

Total Debt 0 0 0 0 Total Liabilities 5,241.73 6,897.00 11,162.00 13,490.00

Mar '05 Mar '06 Mar '07 Mar '0812 mths 12 mths 12 mths 12 mthsApplication Of FundsGross Block 2,182.72 2,837.00 3,889.00 4,508.00Less: Accum. Depreciation 1,005.82 1,275.00 1,739.00 1,837.00Net Block 1,176.90 1,562.00 2,150.00 2,671.00Capital Work in Progress 317.52 571 957 1,260.00Investments 1,328.70 876 839 964Inventories 0 0 0 0Sundry Debtors 1,252.82 1,518.00 2,292.00 3,093.00Cash and Bank Balance 268.15 544 680 657

Total Current Assets 1,520.97 2,062.00 2,972.00 3,750.00Loans and Advances 1,030.29 1,308.00 1,241.00 2,804.00Fixed Deposits 1,213.39 2,735.00 4,827.00 5,772.00

Total CA, Loans & Advances 3,764.65 6,105.00 9,040.00 12,326.00Deffered Credit 0 0 0 0Current Liabilities 578.56 808 1,162.00 1,483.00Provisions 767.48 1,409.00 662 2,248.00

Total CL & Provisions 1,346.04 2,217.00 1,824.00 3,731.00Net Current Assets 2,418.61 3,888.00 7,216.00 8,595.00Miscellaneous Expenses 0 0 0 0

Total Assets 5,241.73 6,897.00 11,162.00 13,490.00Contingent Liabilities 289.87 523 670 603Book Value (Rs) 193.73 250.29 195.41 235.84


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Infosys TechnologiesProfit & Loss account - in Rs. Cr. -


IncomeSales Turnover 6,859.66 9,028.00 13,149.00 15,648.00

Excise Duty 0 0 0 0Net Sales 6,859.66 9,028.00 13,149.00 15,648.00Other Income 172.79 144 379 683Stock Adjustments 0 0 0 0

Total Income 7,032.45 9,172.00 13,528.00 16,331.00ExpenditureRaw Materials 13.55 16 22 18Power & Fuel Cost 40.2 62 88 106Employee Cost 3,183.25 4,274.00 6,316.00 7,771.00Other Manufacturing Expenses 563.47 792 1,290.00 1,443.00

Selling and Admin Expenses 697.15 773.49 1,050.53 1,214.00Miscellaneous Expenses 35.84 120.51 156.47 132Preoperative Exp Capitalised 0 0 0 0

Total Expenses 4,533.46 6,038.00 8,923.00 10,684.00Mar '05 Mar '06 Mar '07 Mar '08

12 mths 12 mths 12 mths 12 mthsOperating Profit 2,326.20 2,990.00 4,226.00 4,964.00PBDIT 2,498.99 3,134.00 4,605.00 5,647.00Interest 1.09 1 1 1PBDT 2,497.90 3,133.00 4,604.00 5,646.00Depreciation 268.22 409 469 546Other Written Off 0 0 0 0Profit Before Tax 2,229.68 2,724.00 4,135.00 5,100.00Extra-ordinary items -4.59 0 -5 0PBT (Post Extra-ord Items) 2,225.09 2,724.00 4,130.00 5,100.00

Tax 325.3 303 352 630Reported Net Profit 1,904.38 2,421.00 3,783.00 4,470.00

Total Value Addition 4,519.91 6,022.00 8,901.00 10,666.00Preference Dividend 0 0 0 0Equity Dividend 309.8 1,238.00 649 1,902.00Corporate Dividend Tax 42.17 174 102 323Per share data (annualised)Shares in issue (lakhs) 2,705.71 2,755.55 5,712.10 5,719.96Earning Per Share (Rs) 70.38 87.86 66.23 78.15Equity Dividend (%) 230 900 230 665Book Value (Rs) 193.73 250.29 195.41 235.84


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Mar '0912 mths

20,264.00

020,264.00

5020

20,766.00

20125

9,975.001,697.00

1,367.001720

13,356.00Mar '09

12 mths6,908.007,410.00

27,408.00

6940

6,714.00-1

6,713.00895

5,819.0013,336.00

01,345.00

228

5,728.30101.58

470310.9


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Infosys TechnologiesCash Flow - in Rs. Cr. -


Net Profit Before Tax 2184.49 2724 4129 5100

Net Cash From Operating Activities 1359.7 2237 3256 3816Net Cash (used in)/from

-939.88 -392 -1065 -978Investing Activities

-580.1 244 -316 -777

-156.32 2096 1871 2079

Opening Cash & Cash Equivalents 1839.4 1683 3779 5610

Closing Cash & Cash Equivalents 1683.08 3779 5650 7689

Net Cash (used in)/from FinancingActivitiesNet (decrease)/increase In Cashand Cash Equivalents


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Mar '0912 mths

6714

5152

-195

-2430

2600

7689

10289


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Analysis

1. The firm works on zero inventory and zero debt policy.2. The profitability of the company has remained the same over the years though theliquidity has increased.

3. The company can look at raising some debt to decrease the overall cost of capitaland increase the value of the firm.

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16 - Manju - Infosys Technolgy Ltd