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A

Project Report

On

Financial Analysis

Of

Presented to

Prof. Nikunj Patel

Faculty Member
S.V. Institute of Management.Kadi
North Gujarat University Patan
On
December 23rd , 2008

In the partial fulfillment of the requirements for


Managerial Accounting-I Course in the Master of Business Administration
Programme

By:
Ashwin Chaudhary (Roll No.12)
Priyanka Maheta (Roll No.17)
MBA-1 (A)
Preface

As a part of our syllabus of MBA programme in Semester-I, we are assigned some


practical and theoretical project work. In partial fulfillment of the Managerial
Accounting-I, course we have prepared a comprehensive project report in Financial
Analysis of the company.
Study of management will be immaterial if it is not coupled with study of financial aspect
of the business. It gives the student an opportunity to learn the connection between
comparison & execution to test & verify application of theories & help in the comparison
of management theories and practice. The study gives a chance to know about the
profitability and financial position of the firm.
We have chosen Wipro Limited which is a $3.5 Billion Global company in Information
Technology Services ,R&D Services, Business Process Outsourcing.
This report contains the analysis of the 5 years data of the company. The Financial
statements of the report are analyzed in three different ways such as
 Trend Analysis
 Horizontal Analysis
 Ratio Analysis
 Cashflow Analysis
The ratio analysis of the company has been derived for 23 ratios which help to determine
the company’s performance. In the Scenario Analysis of the company we have included
the company’s industrial GDP, its Market Share, Market Capitalization, Market Growth
etc.

Date: 20th December ,2008 Ashwin Chaudhary (Roll No.5)


Place: Kadi Priyanka Mehata (Roll No.)
Acknowledgement
With a sense of gratitude and respect, we would like to extend our heartiest thanks
to all of those who provided help and guidance to make this project a big success. No
Project is ever the outcome of single individual’s talent or effort. This work is no
exception. This project would not have been possible without the whole hearted
encouragement, support and co-operation of our guide, friends and well-wishers.
Although it is not possible for us to name and thank them all individually, we must make
special mention of some of the personalities and acknowledge our sincere indebtness to
them.
The successful completion of this project rests on the shoulder of many persons who have
helped us directly or indirectly. We wish to take this opportunity to express to all
those, without whose help, completion of this project would have been difficult.
We are indebted and thankful to all the individuals who have guided, advised,
inspired and supported us in making this project a success.

Our gratitude to our honorable guide Prof. Nikunj Patel for giving us the
opportunity for developing the project and his able guidance, inestimable motivation and
constant encouragement throughout our project. Without his help this project would
never have been realized in its entirety.

We are especially thankful to our Head Of Department Prof. Bhavin Pandya for
his valuable support in providing us the facilities and his valuable guidance for the
development of this project.
Date: 20th December ,2008 Ashwin Chaudhary (Roll No.5)
Place: Kadi Priyanka Mehata (Roll No.)
Executive Summary

It is Summarize tin of all report in one or two pages so as to provide an overview of the
company. it is also called synopsis or Abstract. As a partials fulfillment of the
requirement for the Managerial Accounting Cource.We have completed a project report
on financial Analysis of Wipro Ltd.
 Sales Figure is increasing at a handsome rate. it is at Rs. 58400.23 Million. in
2003-04 and it is increased to Rs. 141395.8 Million. So Sales is increased 75.05%
because of aggressive Selling Policy.
 Profit after Tax is also increasing as compare to 2003-04 it is increasing 22514
Million at Rs 3408, 8747, 4388.6, 5970.4, respectivaly last four year. This is
because company has increased it sales and doing good cost management
 Net worth of the company is increased in this year because of increase in Reserve
& Surplus
 Current Ratio of Wipro limited is showing good position. It is 1.26 Times in
2003-04 then it is increased to 2.13 Times in 2007-08 this shows Company has
achieved standard Ratio.
 The returns on the investment is some what decline in current year.
 The EPS of Share is increased Rs. 7.43 to Rs 20.62 in 2007-08 So Share holder
are benefited.
 Company’s Total Assets are increased and it trying to expand its business on the
other hand debt are also increased it shows that company trying to Trading on
Equity.
 After analyzing all aspect Company’s performance is good.
CONTENT
Preface
Acknowledgement
Executive Summary

1. INTRODUCTION
1.1 Introduction to company
1.2 Group of companies
1.3 History
1.4 Company Profile
1.5 Registered office address
1.6 Board of director
1.7 Auditor

2. ANALYSIS OF BALANCE SHEET


2.1 Trend analysis of Balance sheet
2.1.1 Trend analysis of fixed assets
2.1.2 Trend analysis of total current assets
2.1.3 Trend analysis of share holders equity
2.1.4 Trend analysis of total current assets
2.1.5 Share holder’s fund
2.1.6 Sources of fund
2.1.7 Investment
2.1.8 Application of funds
2.2 Horizontal analysis of Balance sheet
2.2.1 Sources of fund 2008
2.2.2 Application of fund 2008
2.2.3 Sources of fund for five years
2.2.4 Application of fund for five years

3. ANALYSIS OF P & L ACCOUNT


3.1 Trend analysis of P & L
3.1.1 Trend analysis of total income
3.1.2 Profit after tax
3.1.3 Transfer to general reserve
3.1.4 Net sales and services
3.2 Horizontal analysis of P & L
3.2.1 Comparison of PBT and Income with expenditure
4. CASH FLOW ANALYSIS
4.1 Introduction
4.2 Cash flow statement
4.3 Interpretation of Cash flow statement

5. RATIO ANALYSIS
5.1 Introduction of the ratio analysis
5.2 Liquidity ratio
5.2.1 Current ratio
5.2.2 Quick ratio
5.2.3 Net working capital
5.3 Profitability ratio
5.3.1 Gross profit
5.3.2 Operating ratio
5.3.3 Net profit ratio
5.3.4 Return on investment
5.3.5 Return on equity
5.4 Assets turnover ratio
5.4.1 total asset turn over ratio
5.4.2 net fixed asset turn over
5.4.3 inventory turn over ratio
5.4.4 average age of inventories
5.4.5 debtor turn over ratio
5.5 Finance structure ratio
5.5.1 debt ratio
5.5.2 debt equity
5.5.3 interest coverage ratio
5.6 Valuation ratio
5.6.1 earning per share
5.6.2 divident pay out ratio
5.6.3 P/E ratio
5.6.4 Profit margin ratio
5.7 Du-Pont chart

6. SCENARIO ANALYSIS
6.1 business unit performance
6.2 company analysis
6.2.1 Share holding pattern
6.2.2 Market capitalization

7 ANNEXURES
8 BIBLIOGRAPHY
Chapter 1.
Introduction

♦ Introduction to company
♦ Group Companies
♦ History
♦ Company Profile
♦ Registered Office Address
♦ Board of Directors
♦ Auditors
1. INTRODUCTION

1.1. Introduction of company


Wipro Limited (Wipro), together with its subsidiaries and associates (collectively, the
company or the group) is a leading India based provider of IT Services and Products,
including Business Process Outsourcing (BPO) Services, globally. Further,Wipro has
other business such as India and AsiaPac IT Services and products and Consumer
Care and Lighting. Wipro is headquartered in Bangalore, India.Wipro Technologies is
a global services provider delivering technology-driven business solutions that meet
the strategic objectives clients. Wipro has 40+ ‘Centers of Excellence’ that create
solutions around specific needs of industries. Wipro delivers unmatched business
value to customers through a combination of process excellence, quality frameworks
and service delivery innovation. Wipro is the World's first CMMi Level 5 certified
software services company and the first outside USA to receive the IEEE Software
Process Award.
Wipro is a $3.5 billion Global company in Information Technology Services, R&D
Services, Business process outsourcing. Team wipro is 75,000 Strong from 40
nationalities and growing. Wipro is present across 29 counries,36 Development
canters, Investors across 24 countries.

 Largest third party R&D Service provider in the world.


 Largest Indian Technology Infrastructure management service provider.
 A vendor of choice in the middle east
 Among the top 3 Indian BPO Service provider by Revenue (* Nasscom)
 Among the top 2 Domestic IT Services companies in India (*IDC India)

1.2. Group Companies


 Wipro Infrastructure Engineering Ltd.
 Wipro Inc.
 cMango Pte Ltd.
 Wipro Japan KK
 Wipro Shanghai Ltd.
 Wipro Trademarks Holding Ltd.
 Wipro Travel Services Ltd.
 Wipro Cyprus Private Ltd.
 Wipro Consumer Care Ltd.
 Wipro Health Care Ltd.
 Wipro Chandrika Ltd.(a)
 Wipro Holdings (Mauritius) Ltd.
 Wipro Australia pty Ltd.
 WMNETSERV Ltd.(a)
 Quantech Global Service Ltd.
 3D Network Pte Ltd.
 Planet PSG Pte Ltd.
 Spectramind Inc.

1.3. History
Wipro started in 1945 with the setting up of an oil factory in Amalner a small town in
Maharashtra in Jalgaon District. The product Sunflower Vanaspati and 787 laundry
soap (largely made from a bi-product of Vanaspati operations) was sold primarily in
Maharashtra and MP. The company was aptly named Western India Products
Limited.
The Birth of the name Wipro - As the organization grew and diversified into
operations of Hydraulic Cylinders and Infotech, the name of the organization did not
adequately reflect its operations. Azim Premji himself in 1979 selected the name
"Wipro" largely an acronym of Western India Products. Thus was born the Brand
Wipro. The name Wipro was unique and gave the feel of an 'International" company.
So much so that some dealers even sent their cheques favouring Wipro (India)
Limited. Fortunately, the banks accepted them!!By the early 90s, Wipro had grown
into various products and services. The Wipro product basket had soaps called Wipro
Shikakai, Baby products under Wipro Baby Soft, Hydraulic Cylinders branded
Wipro, PCs under the brand name Wipro, a joint venture company with GE named
Wipro GE and software services branded Wipro. The Wipro logo was a 'W", but it
was not consistently used in the products.It was clearly felt that the organization was
not leveraging its brand name across the various businesses. The main issue remained
whether a diverse organization such as Wipro could be branded under a uniform look
and feel and could there be consistent communication about Wipro as an
organization.

1.4.Company Profile
Business-Description
Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT
Services Company globally. Wipro provides comprehensive IT solutions and
services, including systems integration, Information Systems outsourcing, package
implementation, software application development and maintenance, and research
and development services to corporations globally.
The Group's principal activity is to offer information technology services. The
services include integrated business, technology and process solutions including
systems integration, package implementation, software application development and
maintenance and transaction processing. These services also comprise of information
technology consulting, personal computing and enterprise products, information
technology infrastructure management and systems integration services. The Group
also offers products related to personal care, baby care and wellness products. The
operations of the Group are conducted in India, the United States of America and
Other countries. During fiscal 2007, the Group acquired Wipro Cyprus Pvt Ltd,
Retailbox Bv, Enabler Informatica SA, Enabler France SAS, Enabler Uk Ltd, Enabler
Brazil Ltd, Enabler and Retail Consult GmbH, Cmango Inc, Cmango (India) Pvt Ltd,
Saraware Oy, Quantech Global Services and Hydroauto Group AB

Global IT Services and Products


The Company's Global IT Services and Products segment provides IT services to
customers in the Americas, Europe and Japan. The range of its services includes IT
consulting, custom application design, development, re-engineering and maintenance,
systems integration, package implementation, technology infrastructure outsourcing,
BPO services and research and development services in the areas of hardware and
software design. Its service offerings in BPO services include customer interaction
services, finance and accounting services and process improvement services for
repetitive processes.

The Global IT Services and Products segment accounted for 74% of the Company's
revenues and 89% of its operating income for the year ended March 31, 2007 (fiscal
2007). Of these percentages, the IT Services and Products segment accounted for
68% of its revenue, and the BPO Services segment accounted for 6% of its revenue
during fiscal 2007.
Customized IT solutions
Wipro provides its clients customized IT solutions in the areas of enterprise IT
services, technology infrastructure support services, and research and development
services. The Company provides a range of enterprise solutions primarily to Fortune
1000 and Global 500 companies. Its services extend from enterprise application
services to e-Business solutions. Its enterprise solutions have served clients from a
range of industries, including energy and utilities, finance, telecom, and media and
entertainment. The enterprise solutions division accounted for 63% of its IT Services
and Products revenues for the fiscal 2007.
Technology Infrastructure Service
Wipro offers technology infrastructure support services, such as help desk
management, systems management and migration, network management and
messaging services. The Company provides its IT Services and Products clients with
around-the-clock support services. The technology infrastructure support services
division accounted for 11% of Wipro's IT Services and Products revenues in fiscal
2007.
Research and Development Services
Wipro's research and development services are organized into three areas of focus:
telecommunications and inter-networking, embedded systems and Internet access
devices, and telecommunications and service providers.The Company provides
software and hardware design, development and implementation services in areas,
such as fiber optics communication networks, wireless networks, data networks,
voice switching networks and networking protocols. Wipro's software solution for
embedded systems and Internet access devices is programmed into the hardware
integrated circuit (IC) or application-specific integrated circuit (ASIC) to eliminate
the need for running the software through an external source. The technology is
particularly important to portable computers, hand-held devices, consumer
electronics, computer peripherals, automotive electronics and mobile phones, as well
as other machines, such as process-controlled equipment. The Company provides
software application integration, network integration and maintenance services to
telecommunications service providers, Internet service providers, application service
providers and Internet data centers.
Business Process Outsourcing Service
Wipro BPO's service offerings include customer interaction services, such as IT-
enabled customer services, marketing services, technical support services and IT
helpdesks; finance and accounting services, such as accounts payable and accounts
receivable processing, and process improvement services for repetitive processes,
such as claims processing, mortgage processing and document management. For BPO
projects, the Company has a defined framework to manage the complete BPO process
migration and transition. The Company competes with Accenture, EDS, IBM Global
Services, Cognizant, Infosys, Satyam and Tata Consultancy Services.India and
AsiaPac IT Services and Products
The Company's India and AsiaPac IT Services and Products business segment, which
is referred to as Wipro Infotech, is focused on the Indian, Asia-Pacific and Middle-
East markets, and provides enterprise clients with IT solutions. The India and AsiaPac
IT Services and Products segment accounted for 16% of Wipro's revenue in fiscal
2007. The Company's suite of services and products consists of technology products;
technology integration, IT management and infrastructure outsourcing services;
custom application development, application integration, package implementation
and maintenance, and consulting

Wipro's system integration services


Include integration of computing platforms, networks, storage, data center and
enterprise management software. These services are typically bundled with sales of
the Company's technology products. Wipro's infrastructure management and total
outsourcing services include management and operations of customer's IT
infrastructure on a day-to-day basis. The Company's technology support services
include upgrades, system migrations, messaging, network audits and new system
implementation. Wipro designs, develops and implements enterprise applications for
corporate customers. The Company's solutions include custom application
development, package implementation, sustenance of enterprise applications,
including industry-specific applications, and enterprise application integration. Wipro
also provides consulting services in the areas of business continuity and risk
management, technology, process and strategy.
Consumer Care and Lighting
Wipro's Consumer Care and Lighting business segment accounted for 5% of its
revenue in fiscal 2007. The Company's product lines include hydrogenated cooking
oil, soaps and toiletries, wellness products, light bulbs and fluorescent tubes, and
lighting accessories. Its product lines include soaps and toiletries, as well as baby
products, using ethnic ingredients. Brands include Santoor, Chandrika and Wipro
Active. The Wipro Baby Soft line of infant and child care products includes soap,
talcum powder, oil, diapers and feeding bottles and Wipro Sanjeevani line of wellness
products.
The Company's product line includes incandescent light bulbs, compact fluorescent
lamps and luminaries. It operates both in commercial and retail markets. The
Company has also developed commercial lighting solutions for pharmaceutical
production centers, retail stores, software development centers and other industries.
Its product line consists of hydrogenated cooking oils, a cooking medium used in
homes, and bulk consumption points like bakeries and restaurants. It sells this product
under the brand name Wipro Sunflower.
1.5. Registered Office Address
WIPRO LIMITED
Doddakannelli, Sarjapur Road,
Bangalore – 560 035, India.
Tel : +91-80-28440011
Fax : +91-80-2844054

1.6. Board of Directors


• Azim H . Premji Chairman
• Dr Ashok S Ganguly Former Chief Ex.Officer Nortel
• B .C. Prabhakar Practitioner of Law
• Dr. Jagdish N. Sheth Professor Of Marketing-Emory Uni.Usa.
• N.Vagual Chairman-ICICI Bank Ltd
• Bill Owens
Former Chief Ex.Officer,Nortel
• P. M. Sinba
Former Chairman Pepsico India Holdings

Azim Premji
Chairmen & Managing Director
1.7. Auditors
• KPMG
• BSR & Co.
Audit committee
N Vaghul - Chairman
P M Sinha - Member
B C Prabhakar - Member
Board Governance and Compensation Committee
Ashok S Ganguly - Chairman
N Vaghul - Member
P M Sinha - Member
Shareholders’ Grievance and Administrative Committee
B C Prabhakar - Chairman
Azim H Premji - Member
Chapter 2.
Analysis of Balance
Sheet

♦ Trend Analysis of Balance Sheet


♦ Horizontal Analysis of Balance Sheet
2. ANALYSIS OF BALANCE SHEET
2.1.Trend Analysis of Balance Sheet
Trend Analysis of Balance Sheet involves calculation of percentage changes in the
Balance Sheet items for a no. of successive years. This is carried out by taking the
items of the past financial year used as base year and items of other years are
expressed as percentage of the base year. Here 2003-04 is taken as base year

2003 2004- 2005- 2006- 2007-


Perticular -04 05 06 07 08
SOURCES OF FUNDS
Share Holder's Funds
302.2 202.6
Share Capital 100 7 8 207.37 100.171
Share application money pending 622.4 290.45
allotment 100 1 6 114.286
138.6 122.9
Reserves & Surplus 100 2 4 180.99 122.516
140.6 125.1 181.71
Share holder's Equity 100 8 8 8 121.833
Loan Funds 100
22.78
Secured 100 6 208.9 689.7 139.154
382.5 75.79 577.24
Unsecured 100 4 6 1 1829.68
58.94 122.0 616.34
Total Loan Funds 100 7 8 3 1171.94
161.9
Minority Interest 100 4 - 10.929 400
138.5 124.5 149.28
Total Sources of Funds 100 5 3 3 162.162
APPLICATION OF FUNDS
Fixed assets
107.8 62.29 268.62
Goodwill 100 2 7 2 445.384
133.9 118.7 142.19
Gross Block 100 1 4 5 159.492
Less:
130.9 129.7 147.10
Accumulated Depreciation 100 5 4 7 147.775
136.7 108.7 153.66
Net Block 100 2 5 7 154.22
182.4 240.0 163.05
Capital work in progress and advances 100 3 3 6 131.194
130.8 112.8 175.07
Total Fixed Assets 100 3 4 7 220.726
123.3 131.0 107.90
Investments 100 3 9 9 48.1879
101.7 99.326
Deferred Tax Assets(Net) 100 9 120 6 89.661
Current Assets, Loans & Advances
135.2 118.1 200.96
Inventories 100 3 9 9 160.578
130.7 137.0 138.16
Sundry Debtors 100 8 8 8 137.637
155.0 223.77
Cash & Bank Balances 100 176.2 3 5 198.113
97.87 230.4 127.84
Loan & Advances 100 2 2 4 180.692
129.2 157.7 154.95
Total Current Assets 100 4 1 5 166.304
Less:
Current Liabilities & Provisions
143.2 181.71
Current Liabilities 100 6 145.4 9 118.484
61.25 63.311
Provisions 100 7 239.3 8 180.879
102.8 172.9
Total Liabilities 100 2 9 133.59 130.504
231.5 131.4
Net Current Assets 100 2 4 203.29 219.526
138.5 124.5 149.28
Total Application of Funds 100 5 3 3 162.162

Table 2.1.1 Trend Analysis of Balance Sheet


2.1.1 Trend Analysis of Fixed assets

Year 2003-04 2004-05 2005-06 2006-07 2007-08


Total Fixed Assets 100 130.827 112.844 175.077 220.726

Table 2.1.2 Trend Analysis of Fixed assets

Figure 2.1.1 Trend Analysis of total fixed assets


Interpretation
 The fixed assets are increase in current year is good for the company.
 Hear fixed assets are increasing as a increasing rate it means the company has
expand it’s business.
 Fixed Assets are continuously increasing year by year.
 It seems that the company has good future plans and they want to expand their
business so they have invested more and more funds in fixed assets.
 Fixed assets are efficiently utilized by the company due to which the profit of
the company is increasing every year.
 In 2006-07and 2007-08 Company has huge increase its land, patents, trade
marks and rights.

2.1.2 Trend Analysis of total current assets


Table 2.1.3 Trend Analysis of total current assets

Year 2003-04 2004-05 2005-06 2006-07 2007-08


Total Current Assets 100 129.242 157.708 154.955 166.304
Figure 2.1.2 Trend Analysis of total current assets

Interpretation
 The current assets is shows the cash liquidity of the company.
 Hear it is increase it year by year it means the company has sufficient liquidity for
generating the business.

2.1.2 Trend Analysis of total current assets

Table 2.1.4 Trend Analysis of total Liabilities

Year 2003-04 2004-05 2005-06 2006-07 2007-08


Total Liabilities 100 102.817 172.991 133.59 130.504

Figure 2.1.3 Trend Analysis of total Liabilities


Interpretation
 The total liabilities is highest in 2005-06.
 Liabilities is incressing rate it mean company has to developed business. And
purchase raw material on credit basis.

2.1.3 Trend Analysis of share holder’s equity.

Table 2.1.5 Trend Analysis of share holder’s equity.

Year 2003-04 2004-05 2005-06 2006-07 2007-08


Share holder's Equity 100 140.684 125.181 181.718 121.833
Figure 2. 4 Trend Analysis of share holder’s equity.

Interpretation
 Share holder equity is increase high in 2006-07 because the company has allocated
new share.
 Share holder equity is showing high fluctuation.

2.1.4 Trend Analysis of total loan fund.

Table 2.1.6 Trend Analysis of total loan fund.

Year 2003-04 2004-05 2005-06 2006-07 2007-08


Total Loan Funds 100 58.9472 122.076 616.343 1171.94

Figure 2.1.5 Trend Analysis of total loan funds


Interpretation
 The total trend line is slowly increase up to 2005-06. And after that it is increase at
a high rate.
 From 2006-07 onward the loan fund is increase because the company has expanse
its business.
 The company has been able to raise its secured loan without shortage of funds.
 Increase in secured loan shows that company has very good prestige in
Financial market.
 Company increasing loan funds because company want to increase its trading
on equity.

2.1.5 Share Holder’s Funds

Share Holder's Funds


Year 2003-04 2004-05 2005-06 2006-07 2007-08
share capital 100 302.273 202.68 207.37 100.171
Share application money
pending allotment 100 622.406 290.456 114.286
Reserves and Surplus 100 138.625 122.944 180.99 122.516
Total 100 140.684 125.181 181.718 121.833

Table 2.1.7 Trend Analysis of Share Holder's Funds


Figure 2.1.6 Trend Analysis of Share Holder's Funds

Interpretation
 There is increase in share capital more than two times in 2005-06 and 2006-07 and
it increase three time in 2004-05 compare to base year 2003-04.In 2007-08 there is
not big increase in share capital compare to 2005-06.
 There is highest share capital in 2004-05.
 The company has issued new shares in the 2005-06.
 As a result no. of shares is increased and these funds are implemented for future
plans of the company.

 Reserves & surplus shows a remarkable increase in 2004-05, 2005-06 and 2006-07
and it slowly decrease in 2008. respectively with respect to the base year, this
shows the company has future vision and it would like to expand its business.
 Increase in Reserve & surplus shows because of increase in profit every year.
 Has a hole we can say that the company is target oriented and its sticking to its
policies as a result share holder’s funds is increasing year by year.
2.1.6 Source of Funds

Source Of Funds
Year 2003-04 2004-05 2005-06 2006-07 2007-08
140.684
Share holder's Equity 100 5 125.181 181.718 121.833
161.944
Minority Interest 100 6 - 10.929 400
58.9471
Total Loan Funds 100 7 122.076 616.343 1171.94
138.553
Total Sources of Funds 100 4 124.52769 149.283 162.162

Table 2.1.8 Trend Analysis of Source Of Funds


Figure 2.1.7 Trend Analysis of Sources of Funds

Interpretation
 The loan fund is increases six and twelve time in year 2007, 2008 respectively
compare to 2003-04.
 The company has observed an increase in loan funds as compared to the base year
which indicates its growing reputation in the financial market.
 Hence the overall sources of funds have shown big increase with respect to the
base year

2.1.7 Investment

Investment
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Investments 100 123.3283 131.087 107.909 48.1879

Table 2.1.9 Trend Analysis of Investment


Figure 2.1.8 Trend Analysis of Investment

Interpretation
 Investment figure shows healthy progress of the company.
 Investment has increased in 2005, 2006 and after that it has strated decrease in
2007, 2008 which shows not good growth compared to base year.
 As they have invested most of their funds in Indian money market mutual
funds.
 Shows that the company has not take risk but the company has invested
money for developed it’s own business.

2.1.8 Application Of Funds

Application of funds
Year 2003-04 2004-05 2005-06 2006-07 2007-08
130.826
Total Fixed Assets 100 7 112.844 175.077 220.726
123.328
Investments 100 3 131.087 107.909 48.1879
Deferred Tax Assets(Net) 100 101.789 120 99.3266 89.661
231.519
Net Current Assets 100 7 131.437 203.29 219.526

Table 2. 10 Trend Analysis of Application Of Funds

Figure 2.1.9 Trend Analysis of Application Of Funds

Interpretation
 Graph shows that in 2007-08 Company invested more fund in fixed Assets.
 Company has enough cash in hand so that in any condition company can take
Any Financial decision easily.

2.2 Horizontal Analysis of Balance Sheet


Financial Statement present information for the last five year. Horizontal analysis of
Balance Sheet deals with the amount changes and the percentage changes of the items
of the Balance Sheet.
Financial Statement present comparative information for the current year and the
previous year. Horizontal analysis of Balance Sheet deals with the amount changes
and the percentage changes of the items of the Balance Sheet.
YEAR 2007-08 2006-07 2005--06 2004-05 2003-04
SOURCES OF FUNDS
Share Capital 1.35 2.06 2.91 1.96 0.83
Share application money pending
allotment 0.02 0.02 0.08 0.02 0.00
Reserves & Surplus 52.69 65.73 64.42 71.64 65.85
Secured 0.96 1.05 0.46 0.30 1.68
Unsecured 19.77 1.65 0.31 0.56 0.19
Minority Interest 0.05 0.02 0.37 0.29
Current Liabilities 18.44 23.78 18.89 17.76 15.79
Provisions 6.72 5.67 12.93 7.39 15.37
TOTAL 100 100.00 100.00 100.00 100.00
APPLICATION OF FUNDS
Total Fixed Assets 38.73 26.82 22.10 26.78 26.08
Investments 7.41 23.49 31.41 32.76 33.84
Deferred Tax Assets(Net) 0.24 0.42 0.61 0.69 0.86
Current Assets, Loans & Advances 0.00 0.00 0.00 0.00 0.00
Inventories 3.08 2.93 2.10 2.43 2.29
Sundry Debtors 18.70 20.76 21.68 21.63 21.07
Cash & Bank Balances 18.15 14.00 9.03 7.96 5.76
Loan & Advances 13.69 11.58 13.07 7.75 10.09
TOTAL 100 100 100 100 100

Table 2.2.1 Horizontal Analysis of Balance Sheet

2.2.1 analysis of sources of funds 2008


Share Capital 1.35
Share application money pending
allotment 0.02
Reserves & Surplus 52.69
Secured 0.96
Unsecured 19.77
Minority Interest 0.05
Current Liabilities 18.44
Provisions 6.72

Table 2.2.2 Horizontal Analysis of


sources of funds

Figure: 2.2.1 Horizontal analysis Sources of funds


Interpretation
 Graph shows that in 2007-08 unseured loan is 19.77% it means that company has
more taken short term borrowings for expantion of business.
 In this graph revenue is more then 50% compare to other source so it is good for
company.

2.2.2 analysis of application of funds 2008

Total Fixed Assets 38.73


Investments 7.41
Deferred Tax Assets(Net) 0.24
Current Assets, Loans &
Advances 0.00
Inventories 3.08
Sundry Debtors 18.70
Cash & Bank Balances 18.15
Loan & Advances 13.69

Table 2.2.3 Analysis of application of funds in 2008

Figure: 2.2.2 analysis of application of funds


Interpretation
 Graph shows that in 2007-08 the current assets loan is increase
 Sondory debtors is 13.69 so company has to recover it.
2.2.3 Sources of Funds
Sources of Funds
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Share holder's Equity 97% 98% 99% 96% 72%
Total Loan Funds 3% 1% 1% 4% 28%
Total Sources of Funds 100% 100% 100% 100% 100%

Table 2.2.4 Horizontal Analysis of Sources of Funds

Figure 2.2.3 Horizontal Analyses of Sources of Funds

Interpretation
 Company has raised Share Capital during 2003-04 to 2006-07 and after that it
was reduced at 24% this step has been taken in order to promote expansion of their
business.
 Company strive enhancement of share holder’s value through sound business
decision, prudent financial management and high standard of ethics through the
organizations. Reserves and surplus has been retained for future expansion of the
business.
 In the base year 2003-04 total loan funds is normally up to 2006 and after that
it was increase up to 25%, so it means that company has expand the business.
2.2.4 Application of funds
Application of Funds
2003- 2004- 2005- 2006- 2007-
Year 04 05 06 07 08
Total Fixed Assets 38% 36% 32% 38% 52%
Investments 49% 44% 46% 33% 10%
Deferred Tax Assets(Net) 1% 1% 1% 1% 0%
Net Current Assets 12% 20% 21% 28% 38%
Total Application of Funds 100% 100% 100% 100% 100%

Table 2.2.5 Horizontal Analysis of Application of Funds

Figure 2.2.4 Horizontal Analysis of Application of Funds

Interpretation
 The total fixed assets are 38% in 2004 and after that it was decrease up to 4%
in 2006 and after that it was increase 10% so it means the company has bought the
assets for expansion of business.
 The investment is decline slowly and gradually.
 The net current assets are increase at increasing rate so that company has a
good liquidity.
 The company’s future plans for expansion seem clear due to increased
investment in Fixed Assets .Efficient use of these Assets has enabled the
company to observe an increased profit.
Chapter 3.
Analysis of Profit &
Loss Account

♦ Trend Analysis of Profit & Loss Account


♦ Horizontal Analysis of Profit & Loss Account
3. ANALYSIS OF PROFIT & LOSS ACCOUNT
3.1.Trend Analysis of Profit & Loss Account
Trend Analysis of Profit & Loss Account involves calculation of percentage changes
in the P & L Account items for a no. of successive years. This is carried out by taking
the items of the past financial year used as base year and items of other years are
expressed as percentage of the base year. Here 2004-05 is taken as base year
2003 2004- 2005- 2006 2007-
-04 05 06 -07 08
Income
139.1 129.7
Gross Sales and Services 100 6 3 142 133.12
106.9
Less: Excise Duty 100 95.25 4 174 122.77
139.7 129.9
Net Sales and Services 100 4 3 141 133.21
162.5
Other Income 100 71.79 8 193 140.87
138.2
Total Income 100 4 130.3 142 133.36
Expenditure
138.1 132.1
Cost of Sales and Services 100 4 8 143 136.91
104.3 124.2
Selling and marketing expenses 100 8 1 136 148.91
General and administrative expenses 100 1.812 62.37 354 8669.4
109.1 137.5
Interest 100 2 8 149 21.48
133.3 131.7
Total Expenditure 100 8 4 143 139.13
157.4
PROFIT BEFORE TAXATION 100 8 125.5 139 112.37
163.6 123.3
Provision for taxation including FBT 100 1 3 114 117.63
PROFIT BEFORE MINORITY
INTEREST /SHARE IN EARNING 156.4 125.8
OF ASSOCIATES 100 9 7 143 111.68
Minority interest 100 -148.9 -1.13 -600 -400
764.9 164.2
Share in earning of Associates 100 7 6 102 112.88
157.8 126.9
PROFIT FOR THE PERIOD 100 8 5 142 111.58
Appropriations
Interim dividend 100 40.33
373.6 204.9
Proposed dividend 100 5 2 20 400.69
202.6
Tax on dividend 100 57.05 8 127 117.43
TRANSFERTO GENERAL 456.0 101.8
RESERVE 100 2 8 155 116.03
EARNINGS PER SHARE-EPS
Equity shares of par value Rs.2/- each
125.6
Basic (in Rs.) 100 78.68 4 140 109.70
124.8
Diluted (in Rs.) 100 78.11 3 141 110.29
Number of Shares for calculating EPS 100
200.5 101.0
Basic (in Rs.) 100 5 7 101 101.69
202.1 101.6
Diluted (in Rs.) 100 9 8 101 101.69

Table 3.1.1 Trend Analysis of Profit & Loss Account

3.1.1 Trend Analysis of Total Income and Total Expenditure

Table 3.1.2 Trend Analysis of Total Income and Total Expenditure

Trend analysis of total income & expenditure


2003-04 2004-05 2005-06 2006-07 2007-08
Total Income 100 138.238 130.304 142 133.36
Total Expenditure 100 133.382 131.735 143 139.13
160
140
120
100
80 Total Income
60
Total Expenditure
40
20
0
2003- 2004- 2005- 2006- 2007-
04 05 06 07 08

Figure 3.1.1 Trend Analysis of Total Income and Total Expenditure

Interpretation
 Though the sales has been continuously increased from past 3 years but the
proportionate expenditure is also rising so overall not making any huge effect on net
profit of this company.
 In 2006-07 Income from mutual fund dividend increased by 93.57 % and Interest
on debt instrument 567 % increased in 2005-06 compare to previous year.
 Percentage Expenditures increasing year by year little more than Income
increased, so that Profit margin Decrease year by year.

3.1.2 Profit After Tax


Profit after tax
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Profit after tax 100 157.481 125.497 139 112.37

Table 3.1.3Trend Analysis of Profit After Tax


Figure 3.1.2 Trend Analysis of Profit After Tax
`
Interpretation
 PAT has been rising over the years when we compare with the expenditure
which has been incurred to earn this profit is also rising
 PAT has been increased all the years because of increasing in sales.

3.1.3 Trend Analysis of Profit trancfer to genral resrve

Year 2003-04 2004-05 2005-06 2006-07 2007-08


TRANSFERTO GENERAL
RESERVE 100 456.022 101.883 155 116.03

Table 3.1.4 Trend Analysis of Profit trancfer to genral resrve


Figure 3.1.3 Trend Analysis of Profit trancfer to genral resrve

Interpretation
 The graph is showing that in year 2004-05 the company has transferred big
portion of net profit to genral reserve.
 Hear the in 2005 company has reinvest profit for business expansion it is good
shine for the company.

3.1.4 Trend Analysis of net sales and services

Year 2003-04 2004-05 2005-06 2006-07 2007-08


Net Sales and
Services 100 139.735 129.93 141 133.21

Table 3.1.5 Trend Analysis of net sales and services


Figure 3.1.4 Trend Analysis of net sales and services

Interpretation
 Net sales and services are incresing from 2004 to 2005.
 From 2005 onward the net sales incresing at a stret line so hear company
should tray to increse net sales.

3.2.Horizontal Analysis of Profit & Loss Account


Financial Statement present comparison or every year what portion the rest of
particular is having compare to the total income. Hear we assume that the total
income is 100 then what is the of particular compare to total income. Horizontal
analysis of Profit & Loss Account deals with the amount changes and the percentage
changes of the items of the Profit & Loss Account in every year individually.
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Income
Gross Sales and Services 99.07% 99.73% 99.29% 98.94% 98.77%
Less: Excise Duty 1.27% 0.88% 0.72% 0.88% 0.81%
Net Sales and Services 97.80% 98.86% 98.57% 98.06% 97.95%
Other Income 2.20% 1.14% 1.43% 1.94% 2.05%
Total Income 100.00% 100.00% 100.00% 100.00% 100.00%
Expenditure
Cost of Sales and Services 65.56% 65.51% 85.32% 66.97% 68.75%
Selling and marketing
expenses 9.05% 6.83% 6.51% 6.24% 6.97%
General and administrative
expenses 5.19% 0.07% 0.03% 0.08% 5.27%
Interest 0.06% 4.64% 4.89% 5.14% 0.83%
Total Expenditure 79.85% 77.05% 77.89% 78.43% 81.83%
PROFIT BEFORE TAXATION 20.15% 22.95% 22.11% 21.57% 18.17%
Provision for taxation
including FBT 2.81% 3.33% 3.15% 2.53% 2.23%
PROFIT BEFORE MINORITY
INTEREST /SHARE IN
EARNING OF ASSOCIATES 17.33% 19.62% 18.95% 19.04% 15.94%
Minority interest -0.10% 0.11% 0.00% 0.00% -0.01%
Share in earning of Associates 0.04% 0.21% 0.27% 0.19% 0.16%
PROFIT FOR THE
PERIOD 17.27% 19.73% 19.22% 19.24% 16.10%
Appropriations
Interim dividend 9.74% 4.73% 1.43%
Proposed dividend 1.56% 4.21% 6.63% 0.95% 2.87%
Tax on dividend 1.45% 0.60% 0.93% 0.83% 0.73%
TRANSFERTO GENERAL
RESERVE 4.52% 14.92% 11.66% 12.72% 11.07%
Table 3.2.1 Horizontal Analysis of Profit & Loss Account

3.2.1 Comparition of PBT and Expenduture with total income

Year 2003-04 2004-05 2005-06 2006-07 2007-08


Total Income 100.00% 100.00% 100.00% 100.00% 100.00%
Total Expenditure 79.85% 77.05% 77.89% 78.43% 81.83%
PROFIT BEFORE
TAXATION 20.15% 22.95% 22.11% 21.57% 18.17%

Table 3.2.2 Comparition of PBT and Expenduture with total income


Figure 3.1.1 Comparition of PBT and Expenduture with total income

Interpretation
 The total expenditure is near by 80% of total income in every year.
 Every year PBT is near by 20% of total income.

Chapter 4.
Analysis of Cash Flow
Statement

♦ Introduction
♦ Cash Flow statement
♦ Interpretation of Cash Flow Statement

4. ANALYSIS OF CASHFLOW STATEMENT


4.1.Introduction
• Cash flow statement [CFS] provides information about the historical changes in
cash by classifying cash flows during the period from operating activities, financial
activities and investing activities of a concern. It shows the summary of cash flow
on account of these activities.
• Operating activities as the principal revenue-production activities of the enterprise
These activities determines the net profit or loss of a concern. Operating Activities
refer to the operations of a business of purchasing, sales etc. Sales generate cash;
purchase and expense use up the cash. Net profit leads to net increase in cash.Net
increase in cash from operating activities is the main source of cash inflow.
• Investing activities as the acquisition and disposal of long tern assets and
investments. Acquiring and selling of a subsidiary or other concerns should be
shown as Investing Activity. Investing Activities of acquisition of fixed assets, long
term investing reduces the cash and indicate cash outflow. Investing activities of
disposal of fixed assets etc increase the cash inflow.
• Financial activities as the activities resulting in the changes in the size and
composition of the owner’s capital and borrowing of the enterprise. Owner’s capital
includes preference capital in case of a company. Financial Activities such as issue
of shares, taking a loan from Bank, sale of fixed assets etc. increase the amount of
cash available and form the source of cash inflow. Financial activities such as
repayment of preference capital or repayment of loan reduce the amount of cash and
indicates cash outflow.

4.2 Cash Flow Statement


Year ended March 31, (Ra. In Million)

Table 4. 1 Cash Flow Statement


2008 2007 2006 2005 2004
A. Cash Flow from Operating Activities
Adjustments for :
Depreciation and amortizations 5359 3,978 3,096 2,456.24 1971.85
Amortizations of stock compensation 1166 1,078 688 342.62
Unrealized foreign exchange Net -595 457 65 92.45 -132.77
Interest on borrowings 1690 125 35 56.12
Dividend/interest – Net -2802 -2,118 -1,069 715.15 -762.41
(Profit)/Loss on sale of investments -771 -588 -238 35.59
Gain on sale of fixed assets -174 -10 -8 109.8 -107
Working Capital Changes :
Trade and other receivable -11885 -7,633 -6,991 4,433.69 -3670.41
Loans and advances -5157 -299 -1,033 311.74 -359.89
Inventories -1565 -1,120 -317 455.23 -281.5
Trade and other payables 6182 5,445 6,150 4,180.42 2748.13
20,456.0
Net cash generated from operations 28518 32,303 24,102 0 -594
Direct taxes paid -5459 -4,252 -4,543 2,354.70 -1568.36
18,101.3
Net cash generated by operating activities 23059 28,051 19,559 0 -2162.36
B. Cash flows from investing activities:
Acquisition of property, fixed assets
Plant and equipment(Inc. advances) -14226 -13,005 -7927 6,465.43 -4100.97
Proceeds from sale of fixed assets 479 149 113 168.98 121.86
-
- 123,57 - 70,145.1
Purchase of investments 231684 9 59,047 1 -10706.5
Proceeds on sale/from maturities on 66,383.5
Investments 250013 122042 52,043 4 48.06
Inter-corporate depo sit 150 -650 - 285.3
Net payment for acquisition of Business -32790 -6608 -2,777 617.99 -465.27
Dividend/interest income received 2490 2,118 923 254.15 777.85
Net cash generated by/(used in) Investing -25568 -19533 -16672 144035.2 -14039.7
C. Cash flows from financing activities:
Proceeds from exercise of Employee Stock
Option 541 9,458 4,704 2,576.58 238.6
Share application money pending allotment 40 35 63 12.05
Interest paid on borrowings -1690 -125 -35 56.12
Dividends paid (including distribution tax -12632 -8,875 -3,998 7,575.76 -262.36
Proceeds/(repayment) of long term -74970 142 -268 - 463.02
Proceeds/(repayment) of short term 110641 1825 -200 432.43
Proceeds from issuance of shares by Subsidery 55 35 266.19 147.53
Net cash generated by financing Activities 21985 2495 266 -5209 -12954.5
Net increase in cash and cash equivalents
During the period 19476 11013 3154 2469.95 -958.77
Cash and cash equivalents at the Beginning of
the period 19822 8858 5714 3242.7 4210.08
Effect of translation of cash balance -28 -49 -10 0.92 -8.61
Cash and cash equivalents at the end of Period * 39270 19822 8858 5713.57 3242.7
*includes Rs. 7,278 Million in a restricted designated bank account for payment of
interim dividend

4.2.Interpretation of Cash Flow Statement


Overall Cash flow Statement shows that cash has been generated through Operating
activity is Rs 23059 , 28051 , 19559, 18101, -2162.36 and in the years 2007-08, 2006-
07, 2005-06, 2004-05 and 2003-04 respectively. So major part of cash inflowing is
Operating department. Investment Activity Shows Cash Outflow and borrowing activities
takes a little part in increasing cash.

 Operating Activities : Profit before tax is increased by Rs. 25038.17 Million


and Net Cash generated by Operating activity is increased by Rs. 25221.36
Million because,
 Depreciation and amortizations are increased by Rs. 3387.15 Million in
between four year.
 Trade and other receivable are also increased by Rs. 8214.59 Million in
between four year.
 Investing Activities : Net Cash outflow from investing activities is Rs. 11528
Million because,
 Company has increased its plan and equipment worth Rs.10625 Million in
between four year.
 Investment is also increase worth Rs. 220977 Million in between four year.
 From this inference that these investments has been met out of the cash
from Operations or borrowings.
 Investments in Fixed Assets could be part of Company’s plan of expansion
or modernization.
 Financial Activities : From the section on cash flow from Financial Activities
company think to proceeds in both short term and long term borrowings with
proceeds from exercise of employee stock option.
Chapter 5.
Ratio Analysis
♦ Introduction To The Ratio Analysis
♦ Liquidity Ratios
♦ Profitability Ratios
♦ Finance Structure Ratios
♦ Valuation Ratios
♦ The Du-Pont Chart

5. RATIO ANALYSIS
5.1. Introduction Of The Ratio Analysis
Ratio analysis involves establishing a comparative relationship between the
components of financial statements. It presents the financial statements into various
functional areas, which highlight various aspects of the business like liquidity,
profitability and assets turnover, financial structure. It is a powerful tool of financial
analysis, which recognizes a company’s strengths as well as its potential trouble
spots.
It can be further classified as in different categories of Ratio.
• Liquidity Ratios
• Profitability Ratios
• Asset Turnover Ratios
• Finance Structure Ratios
• Valuation Ratios

5.2. Liquidity Ratio


Liquidity refers to the existence of the assets in the cash or near cash form. This ratio
indicates the ability of the company to discharge the liabilities as and when they
mature. The financial resources contributed by owners or supplemented by outside
debt primarily come in the cash form as under in the balance sheet form.
The following Liquidity Ratios are calculated for the company.
• Current Ratio
• Quick Ratio
• Net Working Capital
5.2.1. Current Ratio
This ratio shows the proportion of Current Assets to Current Liabilities. It is also
known as “Working Capital Ratio” as it is a measure of working capital available at a
particular time. It’s a measure of short term financial strength of the business. The
ideal current ratio is 2:1 i.e. Current Assets should be equal to Current Liabilities.
Current Ratio = Current Assets
Current Liabilities

Current Ratio
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Ratios 1.26 1.58 1.44 1.67 2.13

Table 5. 1 Current Ratio Analysis

Figure 5. 1 Current Ratio Analysis

Interpretation
 Current ratio is always 2:1 it means the current assets two time of current liability.
 After observing the figure the current ratio is fluctuating.
 In the year 2008 ratio is showing good shine.
 Hear ratio is increase as a increasing rate from 2004 to 2008.
 Company is no where near the ideal ratio in every year but every company can not
achieve this ratio.
 Current ratio is increased in 2007-08 as compared to 2003-04 because of increase in
Inventories 100.96% and 123.77 % increased in Cash and Bank balance.
 Current ratio is decreased in 2005-06 as compared to the last year because of
increase in liabilities by 45.39% and 93.19% in increasing in Provision.
5.2.2 Quick Ratio
This ratio is designed to show the amount of cash available to meet immediate
payments. It is obtained by dividing the quick assets by quick liabilities. Quick Assets
are obtained by deducting stocks from current assets. Quick liabilities are obtained by
deducting bank over draft from current liabilities.
Quick Ratio = Quick Assets
Current Liabilities
Quick Ratio
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Ratios 1.2 1.5 1.4 1.6 2.0

Table 5. 2 Quick Ratio Analysis

Figure 5. 2 Quick Ratio Analysis

Interpretation
 Standard Ratio is 1:1
 Company’s Quick Assets is more than Quick Liabilities for all these 5 years.
 In 2007-08 the ratio is increasing because of increase in bank and cash balance.
 So all the years has quick ratio exceeding 1, the firm is in position to meet its
immediate obligation in all the years.
 In 2005-06 quick ratio is decreased because the increase in quick assets is less
proportionate to the increased quick liabilities.
 The Quick ratio was at its peak in 2007-08, while was lowest in the 2004-05.
5.2.3 Networking Captial

Networking capital = Current Assets – Current Liabilities

Net working capital


Year 2003-04 2004-05 2005-06 2006-07 2007-08
Trend 4534.3 10497.8 13798.0 28050.0 61577.0

Table 5.3 Networking Capital

Figure 5.3 Networking capital


Interpretation
 This ratio represents that part of the long term funds represented by the net
worth and long term debt, which are permanently blocked in the current
assets.
 It is Increasing Double than year by year because of assets increasing fast than
liabilities.
5.3 Profitability Ratios
A company should earn profits to survive and grow over a long period of time. It
would be wrong to assume that every action initiated by management of company
should be aimed at maximizing profits, irrespective of social as well as economical
consequences. It is a fact that sufficient must be earned to sustain the operation of the
business to be able to obtain funds from investors for expansion and growth and to
contribute towards the responsibility for the welfare of the society in business
environment and globalization.
The profitability ratios are calculated to measure the operating efficiency of the
company.
The following Profitability Ratios are calculated for the company.
• Gross Profit Ratio
• Operating Profit Ratio
• Net Profit Ratio
• Rate Of Return On Investment
• Rate Of Return On Equity
5.3.1 Gross Profit Ratio
This is the ratio expressing relationship between gross profit earned to net sales. It is a
useful indication of the profitability of business. This ratio is usually expressed as
percentage. The ratio shows whether the mark-up obtained on cost of production is
sufficient however it must cover its operating expenses.
Gross Profit Ratio = Gross Profit X 100
Sales
Gross profit ratio analysis
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Trend 29.8 31.7 32.6 33.7 33.0

Table 5.4 Gross Profit Ratio Analysis

Figure 5.4 Gross Profit Ratio Analysis

Interpretation
 GP Ratio shows how much efficient company is in Production.
 GP is decreasing 2007-08 due to higher production cost.
 Gross sales and services are increasing year by year so in effect Gross profit ratio is
icreasing year by year up to 2007.
5.3.2 Operating Profit Ratio
This ratio shows the relation between Cost of Goods Sold + Operating Expenses and
Net Sales. It shows the efficiency of the company in managing the operating costs
base with respect to Sales. The higher the ratio, the less will be the margin available
to proprietors.
Operating Profit Ratio = COGS+Operating expences X 100
Sales
Operating ratio
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Trend 83.5 80.0 79.0 77.9 81.7

Table 5.5 Operating Profit Ratio Analysis

Figure 5.5 Operating Profit Ratio Analysis

Interpretation
 Operating ratio is lowest during current 2007.
 This shows that the expenses incurred to earn profit were less compared to the
previous two years.
 Operating ratio is decreses feom 2004 to anward decreasing rate.
 From the graph conclusion is made that company is not on the right track by
efficiently cutting down manufacturing, administrative and selling distribution
expenses.
5.3.3 Net Profit Ratio
= Net profit x 100
Net sales
Net profit ratio
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Trend 16.3 19.4 19.2 19.8 17.7

Table 5.6 Net Profit Ratio Analysis

Figure 5.6 Net Profit Ratio Analysis


Interpretation
 After observing the figure the ratio is fluctuating.
 Company has rise in its net profit in 2006-07 as compared to the previous year
because the company has increased its sales 41.45% .
 Though the company’s sale is continuously rising but the net profit is not so much
increased so management should take some steps to decrease its expenses.
 Sales is decrease in 2008 compare to 2007
 The overall ratio is showing good position of the company.
5.3.4 Return On Investment
Rate of Return on Investment indicates the profitability of business and is very much
in use among financial analysts.
ROI= EBIT X 100
Total Assets

Return On Investment
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Trend 32.7 39.7 35.7 30.6 18.6

Table 5.7 Rate of Return on Investment Ratio Analysis

Figure 5.7 Rate of Return on Investment Ratio Analysis

Interpretation
 From the above observation it can be seen that ratio is fluctuating.
 In the year 2005-06 Rate of Return on Investment is slightly increase as compared
to previous year
 Ratio is decreasing after 2005 at adecreasing rate because of asseets increase
compare to sales.
 The company’s Total Assets is increased to 86.51%, so ROI is decreased so
conclusion made that company is not utilizing its assets and investment efficiently.
5.3.5 Rate of Return on Equity
Rate of Return on Equity shows what percentage of profit is earned on the capital
invested by ordinary share holders.
Rate of Return on Equity = Profit for the Equity
Net worth
Rate of return on
equoty
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Trend % 22.2 11.5 7.1 10.0 5.5

Table 5.8 Rate of Return on Equity Ratio Analysis

Figure 5.8 Rate of Return on Equity Analysis

Interpretation
 ROE is remaining almost same Between 2005 to 2007, but it is decrease in2008
because the the company has increase share capital but profit not getting that much
increase.
 Company is getting same return on equity.
 As a result the share holders are getting higher return every year and investment
portfolio scheme selection was a judicious decision taken by the company.
 This happens because Profit and Share Capital both increasing same way.
5.4 Asset Turnover Ratios
Asset Turnover Ratio are basically productivity ratios which measure the output
produced from the given input deployed. This relationship is shown as under
Productivity = Output
Input
Assets are inputs which are deployed to generate production (or sales). The same set
of assets when used intensively produces more output or sales. If the asset turnover is
high, it shows efficient or productive use of input.
The following Assets Turnover Ratios are calculated for the company.
• Total Assets Turnover
• Net Fixed Assets Turnover
• Net Working Capital Turnover
• Inventory Turnover Ratio
• Debtor Turnover (in times)
5.4.1 Total Asset Turnover Ratio
The amounts invested in business are invested in all assets jointly and sales are
affected through them to earn profits. Thus it is the ratio of Sales to Total Assets. .It is
the ratio which measures the efficiency with which assets were turned over a period.
Total Asset Turnover Ratio = Sales
Total Assets
Total assets turnover ratio
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Trend 1.5 1.5 1.6 1.5 1.2

Table 5.9 Total Asset Turnover Ratio Analysis

Figure 5.9 Total Asset Turnover Ratio Analysis

Interpretation
 The total assets turnover ratio is almost same in all years.
 The Assets turnover Ratio is near by 1.5 in all 5 years which shows effective
utilization of assets from the company’s view point.
 In the year 2005-06 ratio is increased because of company’s total assets is
increased by 24.52%, but sales is increased by 29.92%.So the ratio is increased but
in current year it is decreased because sale increasing by 41.45% and Assets
increasing by 49.28%.

5.4.2 Net Fixed Assets Turnover


To ascertain the efficiency & profitability of business the total fixed assets are compared
to sales. The more the sales in relation to the amount invested in fixed assets, the more
efficient is the use of fixed assets. It indicates higher efficiency. If the sales are less as
compared to investment in fixed assets it means that fixed assets are not adequately
utilized in business. Of course excessive sale is an indication of over trading and is
dangerous.
Net Fixed Assets Turnover Ratio = Sales
Net Fixed Assets
Total fixed assets turnover ratio
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Time 4.0 4.2 4.9 4.0 2.4

Table 5.10 Net Fixed Asset Turnover Ratio Analysis

Figure 5.10 Net Fixed Assets Turnover Ratio Analysis

Interpretation
 Here the ratio of Net Fixed Asset Turnover is continuously increasing up to 2006
and after that it has strated decline.Because sales as wellas assets boths are equally
increase.
 Net Fixed Assets Turnover Ratio is increasing year by year because of Sale is
increasing continuously.
 It indicates that the company maximizes the use of its fixed assets to earn profit in
the business so that whatever amount is invested by company in fixed asset, gives
maximum productivity which helps to increase sales as well as profit.
5.4.3 Inventory Turnover Ratio
Inventory Turnover Ratio: The no. of times the average stock is turned over during the
year is known as stock turnover ratio.
Inventory Turnover Ratio = COGS
Average stock
Total Inventory turnover ratio
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Time 30.3 22.6 24.3 19.8 16.0

Table 5. 11 Inventory Turnover Ratio Analysis

Figure 5. 11 Inventory Turnover Ratio Analysis

Interpretation
 From the above calculation we can say that the ratio is decreasing. It mens
inventory is not spdly convert in to sales. So that it is bad for the company.
 In 2003-04 ratio is increased as compared to after that all year so management
should take care about good efficiency of stock management.
 But in 2006 onward ratio is decreasing because of increase in COGS. So company
should devise a systematic operational plan for inventory control.

5.4.4 Average age of Inventories


This ratio indicates the waiting period of the investments in inventories and is measured
in days, weeks or months. Inventory turnover and average age of inventories are
inversely related.
Average age of Inventories Ratio = 360 days
Inventory Turnover
Average age of Inventories
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Days 11.9 15.9 14.8 18.2 22.4

Table 5. 12 Average age of Inventories Ratio Analysis

Figure 5. 12 Average age of Inventories Ratio Analysis

Interpretation
 This graph shows that inventory convert into cash in short time period.
 Inventory turnover ratio is low in 2003-04 So In this year inventory is converted in
cash 11.9 days.
 The inventory conversation in to cash time duration is increases from 2004 to every
year so the management should tray to efficient inventory conversation,so it will It
shows that company effectiveness utilizing its Inventories in quickly.

5.4.5 Debtor Turnover Ratio


Debtor turnover ratio: The debtor turnovers suggest the no. of times the amount of
credit sale is collected during the year.
Debtor’s Turnover Ratio = Sales
Average Debtors
Debtors turn over in (times)
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Time 4.9 3.8 3.7 3.7 1.5

Table 5. 13 Debtor Turnover Ratio Analysis

Figure 5.13 Debtor Turnover Ratio Analysis

Interpretation
 Debtor turnover indicates how quickly the company can collect its credit sales
revenue.
 Here the ratio is continuously decreasing, so that the company’s collection of credit
sales is efficient management is improved its collection period every year so it
shows that the management have an ability to collect its money from his debtors. So
they can invest that money on Assets, HRD and other investments.

5.5 Finance Structure Ratios


Finance Structure Ratios indicate the relative mix or blending of owner’s funds and
outsiders’ debt funds in the total capital employed in the business. It should be noted that
equity funds are the prime fund which increase progressively through reinvestment of
profits, while outside debt funds are supplementary funds and are added at the discretion
of the management.
The following Finance Ratios are calculated for the company.
• Debt Ratio
• Debt-Equity Ratio
• Interest Coverage Ratio
5.5.1 Debt Ratio
Debt ratio indicates the long term debt out of the total capital employed.
Debt Ratio = Long Term Debt
Total Capital Employed

Table 5. 14 Debt Ratio Analysis

Debt Ratio
2003-04 2004-05 2005-06 2006-07 2007-08
0.028 0.384
Trend 4 0.0165 0.0114 0.0383
Debt Ratio

0.4

0.3

0.2
Trend
0.1

0
2003-04 2004-05 2005-06 2006-07 2007-08

Figure 5. 14 Debt Ratio Analysis

Interpretation
 From the above calculation it seems that the ratio is fluctuating.
 In 2007-08 the ratio is increased as compared to the previous year because the total
loan funds are increased by 661.56%.
 In 2005-06 Company has issued equity Share and also loan is decreased.
 Its means that now company trying to increasing Trading on equity.
5.5.2 Debt-Equity Ratio
This ratio is only another form proprietary ratio and establishes relation between the
outside long term liabilities and owner funds. It shows the proportion of long term
external equity & internal Equities.
Debt Equity Ratio = Total Long Term debt
Share holder equity
Table 5.15 Debt - Equity Ratio Analysis
Debt- Equity Ratio
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Trend 0.027 0.012 0.011 0.030 0.376

Debt equityratio

0.4 0.376

0.3

0.2
Trend
0.1
0.027 0.012 0.03
0.011
0
2003-04 2004-05 2005-06 2006-07 2007-08

Figure 5. 15 Debt-Equity Ratio Analysis

Interpretation
 It shows companies accumulated more equity than required company has to refocus
to its strategic policies and plans and try to accumulate more debt funds in future so
as to make the balance between debt and equity.
 There is only current year ratio is some what sufficient.
5.5.3 Interest Coverage Ratio
Interest Coverage Ratio: The ratio indicates as to how many times the profit covers
the payment of interest on debentures and other long term loans hence it is also
known as times interest earned ratio. It measures the debt service capacity of the firm
in respect of fixed interest on long term debts.
Interest Coverage Ratio = EBIT
Interest
Intrest coverage ratio
Year 2003-04 2004-05 2005--06 2006-07 2007-08
Trend 3.4 5.0 4.5 4.2 21.9

Table 5. 16 Interest Coverage Ratio Analysis

Figure 5. 16 Interest Coverage Ratio Analysis

Interpretation
 After observing the figure it shows that the ratio has mix trend up to 2006.
 In the year 2007-08 company has not much debt compare to EBIT so interest
coverage ratio is high but in 2007-08 company increasing its external debt so
company have pay more interest among its earnings so interest coverage ratio
falling down compare to previous year.
5.6 Valuation Ratios
Valuation ratios are the result of the management of above four categories of the
functional ratios. Valuation ratios are generally presented on a per share basis and
thus are more useful to the equity investors.
The following Valuation Ratios are calculated for the company.
• Earnings Per Share
• Dividend pay-out Ratio
• P/E Ratio
• Profit Margin
5.6.1 Earnings Per Share
This ratio measures profit available to equity share holders on per share basis. It is not
the actual amount paid to the share holders as dividend but is the maximum that can
be paid to them.
Earnings per Share = Net Profits for Equity Shares
No. of Equity Shares
Table 5.17 Earnings per Share

Earnings Per Share


Year 2003-04 2004-05 2005-06 2006-07 2007-08
Trend(Rs.) 7.43 11.70 14.70 20.62 22.62

Earningper share

25 22.62
20.62
20
14.7
15 11.7
Trend(Rs.)
10 7.43

5
0
2003-04 2004-05 2005-06 2006-07 2007-08

Figure 5.17 Earnings per Share Ratio Analysis

Interpretation
 Earninig per share is increasing as a increasing rate it is good for invester and share
holder.
 In 2007-08 Profit is increasing by 42.30% and No Equity share Holder increased by
2.03%, Due to that EPS Ratio is increasing in Current year.
5.6.2 Dividend Pay-out Ratio
This ratio indicate split of EPS between Cash Dividends and reinvestment of Profit. If
the Company has Profitable projects than it will prefer to keep dividend pay out ratio
lower.
Dividend pay-out Ratio = Dividend per Share in Rs.
Earnings per share in Rupees
Table 5. 18 Dividend Pay-out Ratio Analysis
Dividend pay-out Ratio
Year 2003-04 2004-05 2005-06 2006-07 2007-08
Trend(Rs.) 1.54 4.68 2.94 3.77 3.43

Dividendpayout ratio

5 4.68
4 3.77
3.43
3 2.94

2 Trend(Rs.)
1.54
1
0
2003-04 2004-05 2005-06 2006-07 2007-08

Figure 5. 18 Dividend Pay-out Ratio Analysis

Interpretation
 In all years there is fluctuation in ratio.
 If the company wants to prosper in future with flying colors then ideally more
amounts should be reinvested in the business rather than distributing as dividend.
 In 2005-06 company has reinvested in business for expansion.
5.6.3 P/E Ratio
P/E Ratio is computed by dividing the current market price of a share by earning per
share. This is Popular measure extensively used in Investment analysis.
P/E Ratio = Current Market Price of Share
Earnings per Share
Table 5. 19 P/E Ratio Analysis

P/E Ratio
Year 20003-04 2004-05 2005-06 2006-07 200708
Trend 31.36 19.91 15.85 11.30 10.30
PEratio

40
31.36
30
19.91
20
15.85 Trend
11.3 10.3
10

0
20003-04 2004-05 2005-06 2006-07 200708

Figure 5. 19 P/E Ratio Analysis

Interpretation
 In 2004-05 P/E Ratios is high means Share price of company is Stable and Share
holder are interested to invest in the company’s share.
 But in 2006-07 P/E Ratio is Falling down word So company share price is not as
stable as compare to previous year.
5.6.4 Profit margin ratio
Profit margin ratio= PAT/Sales*100

Year 2007-08 2006-07 2005-06 2004-05 2003-04


Net Sales and Services 199796 149982 106030 81605.6 58400.23
PAT 32829 29,421 20674 16285.4 10315
Ratio 16% 20% 19% 20% 18%

Table 5. 20 Profit margin ratio

Figure 5. 20 Profit margin ratio

Interpretation
 The ratio is shows equal for middle three year it means the company has maintain
the equal ratio for year 2005 to 2007.
 The ratio shows decline in current year it is bad sign for the company.
5.7 The Du-Pont Chart

ROA (IN %)

2007-08 30.88
2006-07 53
2005-06 63.08
2004-05 67.8
2003-04 75.6

Profit margin (in %) Assets turn over(in Rs.)

2007-08 0.16 2007-08 1.93

2006-07 0.20 2006-07 2.65


2005-06 0.19 2005-06 3.32
2004-05 0.20 2004-05 3.39
2003-04 0.18 2003-04 4.20

Profit after tax Sales Sales Asset

2007-08 32829 2007-08 199575 2007-08 199575 2007-08 103160

2006-07 29421 2006-07 149751 2006-07 149751 2006-07 56535


2005-06 20674 2005-06 106164 2005-06 106164 2005-06 31951
2004-05 16285 2004-05 81596 2004-05 81596 2004-05 24049
2003-04 10315 2003-04 58648 2003-04 58648 2003-04 13969

Table 5.20 Do-Pont chart

Figure 5. 24 The Du-Point Chart


Interpretation
• DuPont chart shows that how profitability is there in the business. When profit
margin is multiplied by total Assets turnover ratio that gives ROA. Profit Margin is
obtained by dividing PAT by Total sales. Total Asset Turnover is obtained by the
sales divided total assets.
• It is like a Tree having various braches connected to each other.
• It show company’s efficiency in making right decision of Investment
• Total Assets turnover is decreasing in current year because of huge increase in net
fix assets and net current asset which is more than double compare to previous year.
• The Chart shows the total assets turnover that indicate the company’s efficiency
in utilizing its assets.
• So overall it can be interpreted that the company’s ROA is good .
• Company should try its best to increase sales and profit.
• The Du point chart Shows the complete picture of company’s performance.
Chapter 6.
Scenario Analysis

♦ Company Analysis
♦ Share Holding Pattern
Chapter 6.
Scenario Analysis

♦ Company Analysis
♦ Share Holding Pattern
6. SCENARIO ANALYSIS

6.1.Business Unit Performance


6.2.Company Analysis
6.2.1. Share Holding Pattern
FIND
INGS
 Though the sales has been continuously increased from past 3 years but the
proportionate expenditure is also rising so overall not making any huge effect on net
profit of this company.
 Hear the in 2005 company has reinvest profit for business expansion it is good
shine for the company.
 The total expenditure is near by 80% of total income in every year.
 Every year PBT is near by 20% of total income.
 Fixed assets are efficiently utilized by the company due to which the profit of the
company is increasing every year.
 Liabilities is incressing rate it mean company has to developed business. And
purchase raw material on credit basis.
 Company has enough cash in hand so that in any condition company can take
Any Financial decision easily.
 All the years has quick ratio exceeding 1, the firm is in position to meet its
immediate obligation in all the years.
 GP Ratio shows how much efficient company is in Production.
SUG
GESTION
 The company’s future plans for expansion seem clear due to increased
investment in Fixed Assets .Efficient use of these Assets has enabled the
company to observe an increased profit.
 Though the company’s sale is continuously rising but the net profit is not so
much increased so management should take some steps to decrease its
expenses.
 Company should try its best to increase sales and profit.
 The profit margin ratio shows decline in current year so that company should
tray to increase profit after tax
 Current ratio is very good it is 2.13:1 so company has fully utilize cash
liquidity for business development.
Annexure
ANNEXURE-1
BALANCE SHEET Rs (In Million)

2007-08 2006-07 2005--06 2004-05 2003-04


SOURCES OF FUNDS
Share Holder's Funds
Share Capital 2923 2918 2852 1407.14 465.52
Share application money
pending a 40 35 75 12.05
Reserves & Surplus 113991 93042 63202 51407.1 37083.7
Share holder's Equity 116954 95995 66129 52826.3 37549.5
Loan Funds
Secured 2072 1489 451 215.89 947.47
Unsecured 42778 2338 307 405.03 105.88
Total Loan Funds 44850 3827 758 620.92 1053.35
Minority Interest 116 29 - 265.33 163.84
Total Sources of Funds 161920 99851 66887 53712.6 38766.7
APPLICATION OF FUNDS
Fixed assets
Goodwill 42209 9477 3528 5663.16 5252.36
Gross Block 56280 35287 24816 20899.6 15607.1
Less:
Accumulated Depreciation 28067 18993 12911 9951.77 7599.48
Net Block 28213 18294 11905 10947.9 8007.63
Capital work in progress and
advances 13370 10191 6250 2603.85 1427.28
Total Fixed Assets 83792 37962 21683 19214.9 14687.3
Investments 16022 33249 30812 23504.9 19058.8
Deferred Tax Assets(Net) 529 590 594 495 486.3
Current Assets, Loans & Advances
Inventories 6664 4150 2065 1747.25 1292.02
Sundry Debtors 40453 29391 21272 15518.3 11865.6
Cash & Bank Balances 39270 19822 8858 5713.57 3242.7
Loan & Advances 29610 16387 12818 5562.85 5683.78
Total Current Assets 115997 69750 45013 28542 22084.1
Less:
Current Liabilities & Provisions
Current Liabilities 39890 33667 18527 12742.1 8894.2
Provisions 14530 8033 12688 5302.14 8655.58
Total Liabilities 54420 41700 31215 18044.2 17549.8
Net Current Assets 61577 28050 13798 10497.8 4534.28
Total Application of Funds
ANNEXURE-2

PROFIT & LOSS ACCOUNT


RS. (In Million)

2007-08 2006-07 2005-06 2004-05 2003-04


Income
Gross Sales and Services 201451 151,330 106805 82330.3 59161.07
Less: Excise Duty 1655 1348 775 724.7 760.84
Net Sales and Services 199796 149982 106030 81605.6 58400.23
Other Income 4174 2963 1536 944.79 1315.99
Total Income 203970 152945 107566 82550.3 59716.22
Expenditure
Cost of Sales and Services 140224 102420 71484 54081.4 39150.23
Selling and marketing
expenses 14216 9547 7003 5638.13 5401.64
General and administrative
expenses 10750 124 35 56.12 3097.15
Interest 1690 7866 5265 3826.91 35.07
Total Expenditure 166900 119957 83787 63602.6 47684.39
PROFIT BEFORE TAXATION 37070 32988 23779 18947.8 12031.83
Provision for taxation including FBT 4550 3868 3391 2749.59 1680.56
PROFIT BEFORE MINORITY
INTEREST /SHARE IN
EARNING OF ASSOCIATES 32520 29120 20388 16198.2 10351.27
Minority interest -24 6 -1 88.12 -59.19
Share in earning of Associates 333 295 288 175.33 22.92
PROFIT FOR THE PERIOD
(PAT) 32829 29,421 20674 16285.4 10315
Appropriations
Interim dividend 2919 7238 5818.98
Proposed dividend 5846 1459 7129 3478.84 931.04
Tax on dividend 1489 1268 1000 493.38 864.85
TRANSFERTO GENERAL
RESERVE 22575 19456 12545 12313.2 2700.13
EARNINGS PER SHARE-EPS
Equity shares of par value Rs.2/- each
Basic (in Rs.) 22.62 20.62 14.7 11.7 14.87
Diluted (in Rs.) 22.51 20.41 14.48 11.6 14.85
Number of Shares for calculating EPS
1,451,127,71 1,426,966,31 1,406,505,97
Basic (in Rs.) 9 8 4 1,391,554,372 693,870,390
1,458,239,06 1,427,915,72 1,404,334,25
Diluted (in Rs.) 0 1441.469,952 4 6 694,545,321
ANNEXURE-3

CASH FLOW STATEMENT FOR THE YEAR ENDED ON MARCH 31


Rs(In Million)

2008 2007 2006 2005 2004


A. Cash Flow from Operating Activities
Adjustments for :
Depreciation and amortizations 5359 3,978 3,096 2,456.24 1971.85
Amortizations of stock compensation 1166 1,078 688 342.62
Unrealized foreign exchange Net -595 457 65 92.45 -132.77
Interest on borrowings 1690 125 35 56.12
Dividend/interest – Net -2802 -2,118 -1,069 715.15 -762.41
(Profit)/Loss on sale of investments -771 -588 -238 35.59
Gain on sale of fixed assets -174 -10 -8 109.8 -107
Working Capital Changes :
Trade and other receivable -11885 -7,633 -6,991 4,433.69 -3670.41
Loans and advances -5157 -299 -1,033 311.74 -359.89
Inventories -1565 -1,120 -317 455.23 -281.5
Trade and other payables 6182 5,445 6,150 4,180.42 2748.13
24,10 20,456.0
Net cash generated from operations 28518 32,303 2 0 -594
Direct taxes paid -5459 -4,252 -4,543 2,354.70 -1568.36
Net cash generated by operating 19,55 18,101.3
activities 23059 28,051 9 0 -2162.36
B. Cash flows from investing activities:
Acquisition of property, fixed assets
Plant and equipment(Inc. advances) -14226 -13,005 -7927 6,465.43 -4100.97
Proceeds from sale of fixed assets 479 149 113 168.98 121.86
- -
123,57 59,04 70,145.1 -
Purchase of investments -231684 9 7 1 10706.51
Proceeds on sale/from maturities on 52,04 66,383.5
Investments 250013 122042 3 4 48.06
Inter-corporate depo sit 150 -650 - 285.3
Net payment for acquisition of Business -32790 -6608 -2,777 617.99 -465.27
Dividend/interest income received 2490 2,118 923 254.15 777.85
Net cash generated by/(used in) - -
Investing -25568 -19533 16672 144035.2 14039.68
C. Cash flows from financing activities:
Proceeds from exercise of Employee
Stock Option 541 9,458 4,704 2,576.58 238.6
Share application money pending
allotment 40 35 63 12.05
Interest paid on borrowings -1690 -125 -35 56.12
Dividends paid (including distribution tax -12632 -8,875 -3,998 7,575.76 -262.36
Proceeds/(repayment) of long term -74970 142 -268 - 463.02
Proceeds/(repayment) of short term 110641 1825 -200 432.43
Proceeds from issuance of shares by
Subsidery 55 35 266.19 147.53
Net cash generated by financing -
Activities 21985 2495 266 -5209 12954.48
Net increase in cash and cash equivalents
During the period 19476 11013 3154 2469.95 -958.77
Cash and cash equivalents at the
Beginning of the period 19822 8858 5714 3242.7 4210.08
Effect of translation of cash balance -28 -49 -10 0.92 -8.61
Cash and cash equivalents at the end of
Period * 39270 19822 8858 5713.57 3242.7
Bibliography
BIBLIOGRAPHY

Books:
 Annual Report of Wipro Limited for Financial Year 2004-05, 2006-07,2007-08.
 Narayanaswamy R., (1998): “Financial Accounting”: A Managerial Perspective,
Prentice-Hall of India Private Ltd, New Delhi., Third Edition, Reprint 2003
 Khan M.Y. and Jain P.K., (1992):”Financial Management”, Tata McGraw-Hill
Publishing Co Ltd., New Delhi., Third Edition.
.

Websites
 http://www.wipro.com
 http://www.bseindia.com//shareholding/shareholding_new.asp
 http://www.cmie.com//indutries//gdp.asp
 http://www.wipro.com/investors/annual_reports.htm

 http://www.wipro.com/investors/pdf_files/AR07_08_first_book_final.pdf
 http://www.wipro.com/investors/pdf_files/AR07_08_second_book_final.pdf
 http://www.wipro.com/investors/pdf_files/Wipro_AR_2006_07_Part_1.pdf
 http://www.wipro.com/investors/pdf_files/Wipro_AR_2006_07_Part_2.pdf
 http://www.wipro.com/investors/pdf_files/Wipro_annual%20report_2005-06.pdf
 http://www.wipro.com/investors/pdf_files/Wipro_Annual_Report_2004_2005.pdf