Arijit Mukherjee

Krunal Chedda
Hyder Hussain
Chintan Patel
Priya Joseph
Rutu Doshi
InfosysTechnologies Limited
Founded on July 2, 1981 by Narayan Murthy
Founded as ‘Infosys Consultants Pvt. Ltd.’
Second largest IT Company in India
22 Development Centers in India and Abroad
Went public in 1993
109882 Employees from 73 countries
100% Debt Free Company
Accounting Ratios
Definition by R. N. Anthony –
A ratio is simply one number expressed in terms of
another. It is found by dividing one number into
the other”
ADVANTAGES:
o Helpful in analysis of financial statements
o Simplification of accounting data
o Helpful in locating the week spots of the business
o Effective control
Current Ratio
Also known as Cash Asset Ratio & Working Capital Ratio
Explains relationship between current assets and current
liabilities
Higher the ratio, better for the company

If less than 2:1, indicates lack of liquidity

If higher than 2:1, indicates poor investment policies
Current Ratio
2006-06 2007-08 2008-09
Infosys 4.96 3.3 4.71
TCS 1.93 1.98 1.83
Current Ratio
6

5 4.96
4.71

3.3
3 Infosys
TCS

2 1.93 1.98 1.83

0
2006-06 2007-08 2008-09
Quick Ratio
Also know as Liquid Ratio
Quick Ratio indicates whether the firm is in a position to
pay its current liabilities within a month or immediately

Higher the ratio, better for the company

Generally, ratio should be 1:1
If more, considered to be better
Quick Ratio
2006-06 2007-08 2008-09
Infosys 4.91 3.28 4.67
TCS 1.98 1.97 1.83
Quick Ratio
6

5 4.91
4.67

3.28
3 Infosys
TCS

2 1.98 1.97 1.83

0
2006-06 2007-08 2008-09
Quick ratio is more rigorous test of
liquidity than current ratio and when
used together with current ratio, it gives
a better picture of short term financial
position of the firm
Debt Equity Ratio
This ratio expresses the relationship between long term
debts and shareholders’ funds
It is calculated by =
Long Term Loans
Shareholders’ Funds
Generally D/E Ratio of 2:1 is considered safe
If more, shows risky financial position
If lower, sufficient protection to long term lenders
D/E Ratio
2006-06 2007-08 2008-09
Infosys 0 0 0
TCS 0.01 0.01 0.01
D/E Ratio
0.01

0.01 0.01 0.01 0.01

0.01

0.01 Infosys
TCS

0 0 0 0
2006-06 2007-08 2008-09
Profitability Ratio
Relationship between net income and sales.
It indicates the profit margin of the company.
Higher the ratio higher is the profit margin of the firm
Formula :
Profit After Tax X 100
Sales
Profitability Ratio
2006-06 2007-08 2008-09
Infosys 28.05 27.37 27.52
TCS 25 24.11 20.74
Profitability Ratio
30
28.05 27.37 27.52
25 25
24.11

20 20.74

15 Infosys
TCS

10

0
2006-06 2007-08 2008-09
Price Earning Ratio
Also known as "price multiple" or "earnings multiple"
A valuation ratio of a company's current share price
compared to its per-share earnings
Basic formula for calculating

Generally, a high ratio indicates that investors are

expecting higher earnings growth
However, P/E does always show the full situation
Price Earning Ratio
As on 28th March 2009

Infosys 26.83
TCS 30.58
Conclusion
Current Ratio 4.71
Quick Ratio 4.67
Debt Equity NIL
Ratio
Price Earnings 26.83
Ratio