Financial Accounting Term -1

Final project

RATIO ANALYSIS /
PROJECTED FCFE IT
SECTOR LEADING CO.
BY JAYESH GOSWAMI / PARAMPREET SINGH ARORA / NITISH
MALHOTRA
WMG-24 2015-18

INDEX
Agenda
Importance of Ratio Analysis
Why Ratio Analysis is important
R.A
WIPRO Limited
Tata Consulting Services
Infosys

Projected FCFE
NPV FCFE
Stock NPV

AGENDA DISCUSSION ABOUT RATIO ANALYSIS

Ratio analysis is an invaluable tool to a business management to determine
the performance of a business entity and to take cost controlling measures as
and when necessary.
Ratio analysis provides a clear understanding about profitability, liquidity,
solvency and efficiency of business entity.

WHY RATIO ANALYSIS IS IMPORTANT

Ratio analysis is an important tool for analyzing the company's financial performance
Year-on-Year.
The following are the important advantages of the accounting ratios.
Analyzing Financial Statements
Judging Efficiency
Locating Weakness
Formulating Plans
Comparing Performance

INTRODUCTION - WIPRO LIMITED

WIPRO Established in 1945 as Western India Vegetable Products Limited in

Amalner, Maharashtra.

Azim H. Premji
Chairman

Entered IT services in the 1990s among the pioneers in developing the ODC

(Offshore Development Center) concept

Wipro Ltd (NYSE:WIT) is a global information technology, consulting and

outsourcing company with 160,000+ workforce serving clients in 175+ cities

across 6 continents.

The company posted revenues of $7.6 billion for the financial year ended Mar

31, 2015.

Wipro is globally recognized for its innovative approach towards delivering

business value and its commitment to sustainability.

INTRODUCTION - TCS
Tata Consultancy Services Limited (TCS) is an Indian Multinational Information Technology

(IT) Service, Consulting and business solutions company headquartered in Mumbai,

Maharashtra founded in 1968.

TCS is one of the largest Indian companies by market capitalization ($80 billion)

TCS is now placed among the Big 4 most valuable IT services brands worldwide.

In 2015, TCS is ranked 64th overall in the Forbes World's Most Innovative Companies

ranking, making it both the highest-ranked IT services company and the first Indian company.

It is the world's 10th largest IT services provider, measured by the revenues.

INTRODUCTION - INFOSYS

Mr.N. R Narayana
Murthy
Co-Founder Infosys

Established in 1981, Infosys is a NYSE listed global consulting and IT services

company with more than 179,000 employees.

From a capital of US$ 250, Infosys have grown to become a US$ 8.83 billion

(LTM Q1 FY16 revenues) company with a market capitalization of approximately

US$ 36.4 billion.

Infosys journey of over 30 years, have catalyzed some of the major changes

that have led to India's emergence as the global destination for software
services talent. Infosys pioneered the Global Delivery Model and became the
first IT company from India to be listed on NASDAQ. Infosys employee stock
options program created some of India's first salaried millionaires.

PROFITABILITY RATIO ANALYSIS

LAST THREE FINANCIAL YEARS

Profitability in last three

years is almost stable.
TCS performance
marginally lower than
2014 performance, but,
excellent compared to
nearest competition.
ROE is exceptionally good
YOY.

LIQUIDITY RATIO ANALYSIS

LAST THREE FINANCIAL YEARS

SOLVENCY RATIO ANALYSIS

LAST THREE FINANCIAL YEARS

FCFE PROJECTION
Free Cash Flow to Equity FCFE) This is a measure of much cash can be paid to the
equity shareholder of the company after all
Expenses , reinvestment and debt repayment.
FECF = Net income capital expenditure change in
net
Working capital + new debt debt repayments

Projection growth of TCS is much

lucrative.
Growth of all IT Giants all most same

FCFE NPV

NPV FCFE of TCS is much higher than

nearest competitors
Growth of all IT Giants all most same

STOCK- NPV

Microsoft Excel
Worksheet

Infosys / TCS

Microsoft Excel
Worksheet
Wipro

THANK YOU