wipro slides
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FINANCIAL RATIOS
A financial ratio is a relative magnitude of two selected
numerical values taken from an enterprise's financial
statements. Financial analysts use financial ratios to compare the
strengths and weaknesses in various companies.
Ratios can be expressed as a decimal value, such as 0.10, or
given as an equivalent percent value, such as 10%.
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Use of Financial ratios
They are relevant in assessing the performance in respect to:
Liquidity Position
Solvency Position
Operating Efficiency
Profitability
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Limitations of Financial Ratios
Calculated from financial statements which are themselves
subject to many limitations
For analysis, many ratios and factors are to be considered
Calculated ratios require comparison
Various terms are to be explained for inter-firm comparison
Price level to be considered while making comparison
Rational analysis is based on judgment of the analyst
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SOLVENCY RATIO
It is used to measure the ability of a company to meet its long
term debts.
Debt Equity Ratio
financial ratio indicating the relative proportion of entity's
equity and debt used to finance an entity's assets.
Interest Coverage RatioICR is a measure of a company's ability to meet its interest
payments.
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ACTIVITY RATIO
It used to measure the relative efficiency of a firm based on its
use of its assets, leverage or other such balance sheet items.
Debtors Turnover Ratio
Inventory Turnover Ratio
Fixed Asset Turnover Ratio
Total Assets Turnover Ratio
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PROFITABILITY RATIO
Profitability ratios measure a companys ability to generate
earnings relative to sales, assets and equity.
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Capital Employed
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IT Industry
Information Technology is one of the most important
industries in the Indian economy.
In the last ten years the Information Technology industry inIndia has grown at an average annual rate of 30%.
FY2012 is a landmark year
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Key Highlights during FY2012
Aggregate revenues cross the USD 100 billion mark, exports at
USD 69 billion
India was able to increase its market share from 51 per cent in2009, to 58 per cent in 2011.
Net employment generator
The industry exhibited resilience and adaptability in
continually reinventing itself to retain its appeal to clients
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Services and Solutions
Consulting
IT Services
BPO
IT Infrastructure Services
Engineering and Industrial Services
Product Based Solutions
Advertisements
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Financial Ratios of TCS
SL.NO FINANCIAL RATIOS 2011 2012
I) LIQUIDITY RATIO
(a) Current Ratio 2.45 2.41
(a) Quick Ratio 2.43 2.40
II) SOLVENCY/LEVERAGE RATIO
(a) Debt-Equity Ratio 0.01 0.01
(a) Interest Coverage 841.63 435.25
III) ACTIVITY/TURNOVER RATIO
(a) Stock/Inventory Ratio 9386.18 5451.71
(a) Debtors Turnover Ratio 5.59 7.19
(a) Fixed Assets Turnover Ratio 5.39 4.91
(a) Total Assets Turnover Ratio 1.56 1.50
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SL.NO. FINANCIAL RATIOS 2011 2012
IV) PROFITABILITY RATIO
(a) Gross Profit Margin 27.52 28.12
(a) Operating Profit Margin 29.30 29.96
(a) Net Profit Margin 26.15 25.44
(a) Return on Capital Employed 55.31 44.38
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WIPRO
It is a leading Information Technology, consulting and
outsourcing company.
Started in 1981
It has over 130,000 employees and clients across 54 countries
The company operates in four segments: IT products and
services, Consumer care and lighting, Healthcare and
Infrastructure engineering
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