Finance Major Project

ACADEMIC YEAR 2021-22
SHRI BALAJI COLLEGE OF ARTS COMMERCE AND

SCIENCE
NAME OF PROJECT : RATIO ANALYSIS OF VARIOUS

COMPANIES OF TECHNOLOGY SECTOR
UNDER THE GUIDANCE OF :

MRS NEHA SHRIVASTAV
SAVITRIBAI PHULE UNIVERSITY, PUNE

IN PARTIAL FULFILMENT OF BACHELOR’S OF BUSINESS
ADMINISTRATION
SUBMITTED BY: KHUSHI JAISWAL

SYBBA
ROLL NO: BBA20034
ACKNOWLEDGEMENT
I EXPRESS MY DEEP SENSE OF GRATITUDE TO MRS. NEHA

SHRIVASTAV, SENIOR SUPERVISOR FOR HER VALUABLE
SUGGESSIONS , CONSISTENT HELP AND PERSONAL INTREST
DURING MY PROJECT WORK.
I WOULD ALSO LIKE TO THANK MY PRINCIPAL Dr.G.Y SHITOLE .

I AM VERY PLEASED TO EXPRESS MY DEEP SENSE OF
GRATITUDE TO PROFESSOR MRS. NEHA SHRIVASTAV
FOR HER CONSISTENT ENCOURAGEMENT.
I SHALL FOREVER CHERISH MY ASSOCIATION WITH HER FOR

HER EXUBERANT
ENCOURAGEMENT, PERENNIAL APPROACHABILITY ABSOLUTE
FREEDOM OF
THOUGHT AND ACTION I HAVE ENJOYED DURING THE COURSE
OF THE PROJECT.
DECLARATION
I hereby declare that the practical report titled “RATIO ANALYSIS OF

VARIOUS COMPANIES OF TECHNOLOGY SECTOR” is a genuine
research work undertaken by me under the guidance of Mrs. NEHA
SHRIVASTAV, this information has been collected from genuine
authentic sources.
This report is being is submitted in partial fulfillment of the requirement

of
BACHERLOR OF BUSINESS ADMINISTRATION from BALAJI
COLLEGE OF ARTS, COMMERCE & SCIENCE .
INDEX
Companies:
1. Tech Mahindra
2. HCL Technologies
3. Infosys
4. Mindtree
5. TCS
6. Wipro
TECH MAHINDRA
Tech Mahindra [NSE: TECHM] is a leading provider of consulting-led integrated portfolio
services to customers which are Telecom Equipment Manufacturers, Telecom Service
Providers and IT Infrastructure Service Providers, Business Process Outsourcing Service
Providers as well as Enterprise Solutions Services (BFSI, Retail & Logistics, Manufacturing,
Energy and Utility (E&U), and Healthcare, Life Sciences, etc.) of Information Technology (IT)
and IT-enabled services delivered through a network of multiple locations around the globe.
It also provides a comprehensive range of IT services, including IT enabled services,

application development and maintenance, consulting and enterprise business solutions,
extended engineering solutions and infrastructure management services to a diversified base of
corporate customers in a wide range of industries including insurance, banking and financial
services, manufacturing, telecommunications, transportation and engineering services.
LIQUIDITY RATIO
Current Ratio
FY21 – 3.16
FY20 – 3.36
● The company’s current ratio increased from 3.16 and percentage increase is 6.3% from
the previous consecutive year.
● The company’s current ratio increased slightly from 3.13 and percentage increase
remains at 0.9% from the previous year.
● Overall the total current ratio for FY-21 and FY-20 stood at 3.36 and 3.16 respectively
thereby rising steadily over the years indicating it has high liquidity and hence can pay
it’s short-term obligations in 1 year.
● The values indicate that even with around two-thirds shrinkage in the value of its assets,
it will be able to meet its obligations in full for both years.
Quick Ratio
FY21 – 3.30
FY20 – 3.18
● The company’s quick ratio increased slightly and percentage increase remains at 4%
from the previous year.
● The company’s quick ratio increased marginally from 2.8 and percentage increase
remains at 13% from the previous year.
● It indicates that the company is fully equipped with enough assets to be instantly
liquidated to pay off its current liabilities in the short term.
● The company has ₹3.18 of liquid assets available to cover each ₹1 of its current
liabilities.
● It is a signal of competence and sound business performance that leads to sustainable
growth.
SOLVENCY RATIO
Debt- Equity Ratio
FY21 – 0.05
FY20 – 0.05
● The company has maintained a stable debt to equity ratio from the 2 previous
consecutive years which is 0.05. (Simplifying to fraction - 1: 20)
● Generally, a good D/E ratio is considered to be a value lower than 1.
● Looking at the value 0.05 (ie. 1:20) this indicates that for every rupee of outside liability
the company has 20 rupees of owner’s capital. Tech Mahindra thus has an excellent
D/E ratio.
Proprietary Ratio
FY21 –0.75
FY20 – 0.73
● The company’s Proprietary ratio has increased from FY20 - 0.73 to FY21 -0.75.
● Expressed in % - 60% to 75% is considered a fairly good position.
● The 2.74% increase in the ratio indicates that the amount contributed by shareholders
towards total assets of the business has increased.
● It means 75% funds of the business are financed by the proprietors for FY21 and that
the business is in a strong position and provides relief to creditors.
Interest coverage ratio
FY21 - 80.94
FY20 – 88.45
● The company’s interest coverage ratio has decreased from FY20 - 0.73 to FY21 -0.75.
● So, we can see a decrease in companies’ ability to repay the interest on its outstanding
debt.
● a declining in interest coverage ratio is often something for investors to be worry of ,
as it indicates that a company may be unable to pay its debt in future
Interpretation:
Looking at the D/E Ratio, Proprietary Ratio, Interest coverage ratio it is quite evident that the
company has enough funds to meet its long term debts and obligations. There's a consistency
in the measures compared to previous years measures thus the company has an excellent
position in terms of solvency
PROFITABILITY RATIO
Return on Assets
FY21 – 12.70%
FY20 – 14.95%
● The company’s ROA has decreased from FY20 - 14.95% to FY21 - 12.70%.
● Generally a ROA of 5% is typically considered good while 20% and above is
considered great.
● Over these 2 years the company in general has maintained fairly good ROA.
● Considering the 15.05% decrease from FY20 - FY21, the company’s efficiency to
generate profits (from its assets) has declined.
Return on Equity
FY21 – 16.95%
FY20 – 20.36%
● The company’s ROE has decreased from FY20 - 20.36% to FY21 - 16.95%.
● Generally ROEs within 15% - 20% are considered good.
● This decrease in ROE from FY20 to FY21 suggests that the company was not able to
generate profits without needing as much capital. This means that the management was
very well able to deploy the shareholder’s capital in FY20 than 2021.
● The decrease of 16.74% in ROE from FY20 to FY21 indicates a less efficient use of
equity capital by the company.
Return On Capital Employed

FY21 – 21.35 %
FY20 – 23.09 %
● ROCE saw an increase by 8.14% in FY21 from the previous year.
● A ROCE of 9.3% globally was the average across the Technology Industry. So the
current values show that ROCE is very good which indicates good performance.
Earnings per share (in Rs.)

FY21 - 43.76
FY20 – 46.89
● EPS saw an increase by 7.15% in FY21 from the previous year.
● EPS indicates how much money a company makes for each share of its stock.
● Higher EPS suggests growth and stock price increases.
● If one company consistently outperforms the other when it comes to profitability, you
could use its EPS as a benchmark for what is a good EPS.
Dividend per share (in Rs.)

FY21 - 45
FY20 – 15
● DPS saw a whopping 200% increase.
Market per Share (in Rs.)

FY21 – 985.68
FY20 – 565.54
● MPS saw a 74.29% increase.
Price Earnings ratio
FY21 - 22.52
FY20 – 12.06
● The company’s P/E ratio has increased from 12.06 (FY20) to 22.52 (FY21).
● P/E shows that the Market price of the company is 22.52 times the earnings of the
company in FY 21 and 12.06 times in the FY20. i.e we can say that investors are willing
to pay 22.52 times of earnings per share because of growth expectations in the future
high growth potential of the company.
● This indicates higher earnings growth, positive performance in the future and investors
are usually willing to pay more for this company’s shares.
Dividend yield ratio (%)
FY21 - 4.57%
FY20 – 2.65%
● The company’s ratio has increased from 2.65 (FY20) to 4.57 (FY21).
● It indicates an investor would earn 4.57 % on his investments in the form of dividends
if he / she buys companies stock at current mkt price.
Gross Profit Ratio

FY21 -21.57
FY20 - 22.66
● The company’s Gross profit margin has decreased from FY20 - 22.66% to FY21 -
21.66% which is a percentage decrease of 4.77%.
● This decrease in gross profit margin from FY20 to FY21 suggests that the company
was not able to make a reasonable profit on sales as it slightly drifted from keeping its
overhead costs in control.
● Lower the ratio indicates higher costs of goods sold, hence this is a telltale sign that the
company will have future problems with the bottom line.
Operating Ratio
FY21 -84.25
FY20 - 89.62
● The company’s operating ratio has decreased from FY20 - 89.62% to FY21 - 84.25%
which is a percentage decrease of 6.37%.
● The ideal operating ratio should be between 60-80% however the lower the percentage
the better.
● A declining low operating ratio is a good sign as it indicates more operating profit is
generated over the years and hence becoming a smaller percentage of net sales.
Operating Profit Ratio

FY21 -18.86
FY20 - 18.47
● The company’s operating profit ratio has increased from FY20 - 18.47% to FY21 -
18.86% which is a percentage increase of 2.11%.
● This means that for every 1 unit of net sales the company earns 18.86% as operating
profit.
● An operating profit ratio of more than 15% is generally considered good, hence
indicates higher operating efficiency leading to higher operating profits.
Net Profit Ratio

FY21 -14.30
FY20 - 15.52
● The company’s net profit ratio has decreased from FY20 - 15.52% to FY21 - 14.30%
which is a percentage decrease of 7.8%
● The net profit ratio is higher, which means that the current business practices allows
them to sell their products at a higher price than the cost it takes to manufacture and
distribute the products.
Interpretation
● The profit margins (gross, operating and net) has decreased over the years from (2020-
2021) of Tech Mahindra such that gross profit margins have declined to 21.66%,
operating margins have declined significantly to 84.25% with a percentage decrease of
6.37%. and net profit margins to 14.30% a decrease of 7.8% (from 2020-21).
● The respective decrease in the ratios has slightly drifted away as reasonable profit on
sales is low which indicates higher cost of goods sold and having a declining net profit
ratio is a good sign since the current business activities allows them to sell products at
a higher price than it cost to manufacture and distribute the products. Also operating
profit ratio has increased by 2.11% which indicates higher operating efficiency leading
to higher operating profits this means that for every 1 unit of net sales the company
earns 18.86% as operating profit.
● It is also significant to note that there has been a significant increase in other ratios. For
instance, Price to Earnings ratio, dividend yield ratio, market per share and dividend
per share indicating higher earnings growth.
● It can be clearly observed that profitability has increased over the years and thus
investors have more confidence in buying shares of the company.
TURNOVER RATIO/EFFICIENCY RATIO
Debtor turnover ratio

FY21 - 3.50
FY20 – 3.30
Average Collection period

FY21 - 9.35
FY20 – 9.14
Creditors turnover ratio
FY21 - 9.56
FY20 – 9.22
Average creditors period:

FY21 - 38.16
FY20 – 39.57
Asset turnover ratio

FY21 - 9.35
FY20 – 9.14
Interpretation
● With a Debtor turnover ratio of 3.5 in FY21, its average time to collect on an invoice is
around 104 days which is a 6% increase from the previous year.
● Creditors Turnover ratio is 3 times higher than the debtors turnover ratio with the
average collection period of 38-40 days in the year 2020-2021. The Creditor payment
cycle is 2.75 times the debtor payment period; this gap is not favorable for the company.
● Fixed Asset turnover ratio has also seen a slight increase from the previous year. The
ratio implies that the assets management and the utilization of the assets are efficient.
● Movements in the above ratios are not greater than 25%, hence not material except for
Interest Coverage Ratio. It is higher in FY 2020-21 due to higher EBIT & lower interest
expense compared to FY 2019-20.
HCL Technologies
HCL Technologies [NSE :HCLTECH]is a next-generation global technology company that
helps enterprises reimagine their businesses for the digital age. The technology products,
services, and engineering are built on four decades of innovation, with a world-renowned
management philosophy, a strong culture of invention and risk-taking, and a relentless focus
on customer relationships.
The Company offers an integrated portfolio of products, solutions, services, and IP through
their Mode 1-2-3 strategy, built around Digital, IoT, Cloud, Automation, Cybersecurity,
Analytics, Infrastructure Management, and Engineering Services, amongst others. With a
worldwide network of R&D, innovation labs and delivery centres, and 176,499 ‘Idea Preneurs’
working in 50 countries, HCL serves leading enterprises across key industries, including 250
of the Fortune 500 and 650 of the Global 2000.
LIQUIDITY RATIO
Current Ratio
FY21 -2.77
FY20 - 1.69
● The company’s current ratio increased from 1.69 and percentage increase is 63.9% from
thereby rising heavily over the year indicating it has high liquidity and hence can pay
its short-term obligations in 1 year.
● The values indicate that it will be able to meet its obligations in full for both years.
Quick Ratio
FY21 -2.74
FY20 - 1.67
● The company has ₹ 2.74 of liquid assets available to cover each ₹1 of its current
liabilities.
growth.
SOLVENCY RATIO
Debt- Equity Ratio
FY21 -0.04
FY20 - 0.06
● The company’s debt to equity ratio has decreased to 0.04 (FY21) from 0.06 (FY20).
the company has 25 rupees of owner’s capital. HCL thus has an excellent D/E ratio.
Proprietary Ratio
FY21 - 0.79
FY20 - 0.70
● The company’s Proprietary ratio has increased from 0.70 (FY20) to 0.79 (FY21).
● The 12.88% increase in the ratio indicates that the amount contributed by shareholders

FY21 - 28.6
FY20 – 20.6
● The company’s interest coverage ratio has increased from FY20 - 20.6 to FY21 28.6.
● So we can see an increase in companies’ ability to repay the interest on its outstanding
debt. It indicates good solvency of the company.
Interpretation:
company has enough funds to meet its long term debts and obligations. There's a consistent
increase in the measures compared to previous years measures thus the company has an
excellent position in terms of solvency.
PROFITABILITY RATIO
Return on Assets
FY21 - 15.79%
FY20 - 16.34%
considered great.
generate profits (from its assets) has declined a bit.
Return on Equity
FY21 - 20.33%
FY20 - 23.79%
● This decrease in ROE from FY20 to FY21 suggests that the company was not able to
generate profits without needing as much capital. This means that the management was
very well able to deploy the shareholder’s capital in FY20 than 2021.
● The decrease of 14.55% in ROE from FY20 to FY21 indicates a less efficient use of
Return On Capital Employed

FY21 – 29.12 %
FY20 – 33.97 %
● ROCE saw a decrease by 14.27% in FY21.
● The current values show that ROCE is very good not only when compared to the global
average but also when compared to market leaders.
● It indicates good performance.
Earning per share (in Rs.)

FY21 – 32.22
FY20 – 33.06
● EPS saw a decrease of 2.54% in FY21 from the previous year.

FY21 - 10
FY20 – 10
● DPS remained consistent for both the years

FY21 – 969.70
FY20 – 478
Price Earning Ratio

FY21 - 30.10
FY20 – 14.46
company in FY 21 and 14.46 times in the FY20. i.e. we can say that investors are willing
Gross Profit Ratio

FY21 -48.21
FY20 - 48.58
● The company’s Gross profit margin has decreased from FY20 – 48.58% to FY21 –
● This decreasing trend is due to the undervaluation of stock price and unfavourable
mark-up policies.
Operating Ratio
FY21 -56.35
FY20 - 67.66
● The company’s operating ratio has decreased from FY20 – 67.66% to FY21 – 56.35%
● A decrease in operating ratio indicates that a company's expenses are less than that of
its revenue hence its operating efficiency is higher.

FY21 -35.44
FY20 -34.22
● The company’s operating profit ratio has increased from FY20 – 34.22% to FY21 –
● Increase in operating profit ratio indicates higher operating efficiency and hence having
sufficient revenue to be profitable.
Net Profit Ratio

FY21 -24.51
FY20 - 26.76
● The company’s net profit ratio has decreased from FY20 – 26.76% to FY21 – 24.51%
● This indicates that the company’s financial stability isn’t rising over the years because
its sales revenue is not generating profit.
Interpretation:
● The profit margins (gross and net) have decreased over the years from (2020-2021) of
HCL such that gross profit margins have declined to 0.76%, operating margins have
increased significantly to 46.35% with a percentage increase of 35.44%. and net profit
margins to 24.51% a decrease of 8.43% (from 2020-21).
● The ratio has increased by 2.11% which indicates higher operating efficiency leading
to higher operating profits this means that for every 1 unit of net sales the company
earns 18.86% as operating profit.
EFFICIENCY RATIO

FY21 - 5.60
FY20 – 4.70

FY21 - 65.18
FY20 – 77.66

FY21 - 7.81
FY20 – 7.50

FY21 - 46.75
FY20 – 48.64

FY21 - 1.06
FY20 – 0.83
Interpretation:
● The Debtor turnover ratio of 5.6 in FY21, which is 19.15% increase from FY20. It’s
average time to collect on an invoice reduced from 77 days to 65 days which is 16%
reduction from the previous year.
● Creditors Turnover ratio remains in the same gap with the average collection period of
46-48 days in the year 2020-2021. The Creditor and Debtor payment cycles’ gap is at
a satisfactory level which is favourable for the company.
● Fixed Asset turnover ratio had also seen an increase of 27% from the previous year.
The growth implies that the assets management and the utilization of the assets are
much more efficient compared to FY20.
INFOSYS
Infosys [NSE: INFY] is a global leader in next-generation digital services and consulting. The
Company enables clients in more than 50 countries to navigate their digital transformation.
With over three decades of experience in managing the systems and workings of global
enterprises, it expertly steer their clients through their digital journey. They do it by enabling
the enterprise with an AI-powered core that helps prioritize the execution of change.
The Company also empowers the business with agile digital at scale to deliver unprecedented
levels of performance and customer delight. Their always-on learning agenda drives their
continuous improvement through building and transferring digital skills, expertise, and ideas
from their innovation ecosystem.
LIQUIDITY RATIO
Current Ratio
FY21 -2.74
FY20 - 2.88
● The company’s current ratio decreased from 2.88 and percentage decrease is 5% from
thereby over the year indicating it has stable liquidity and hence can pay its short-
term obligations in 1 year.
● The values indicate that it will be able to meet its obligations in full for both years.
Quick Ratio
FY21 -2.74
FY20 - 2.88
● The company has ₹2.74 of liquid assets available to cover each ₹1 of its current
liabilities.
growth.
SOLVENCY RATIO
Debt- Equity Ratio
FY21 -0.067
FY20 - 0.057
● The company’s debt to equity ratio has increased to 0.067 (FY21) from 0.057 (FY20).
● Looking at the value 0.067 (ie. 1:15 ) this indicates that for every rupee of outside
liability the company has 15 rupees of owner’s capital for FY21 which has decreased
from 17.5 rupees for (FY20). For Infosys though the D/E ratio has increased but still
has a good ratio.
Proprietary Ratio
FY21 - 0.761
FY20 - 0.767
● The company’s Proprietary ratio has decreased from 0.767 (FY20) to 0.761 (FY21).
● The 0.78% decrease in the ratio indicates that the amount contributed by shareholders
towards total assets of the business has decreased a little.

FY21 - 175.68
FY20 – 156.94
● The company’s interest coverage ratio has increased from FY20 - 156.94 to FY21
175.68.
● We can see the company have strong financial strength as increased in that shows
company is more capable of repay the interest obligations
Interpretation:
company has enough funds to meet its long term debts and obligations. Though there's a
decrease in the measures compared to previous years measures but the interest coverage ratio
makes it meet the ends thus the company has a fairly good position in terms of solvency.
PROFITABILITY RATIO
Return on Assets
FY21 -19.21
FY20 - 19.17
● The company’s ROA has increased from FY20 - 19.17% to FY21 - 19.21%.
considered great.
● Considering the 0.20% increase from FY20 - FY21, the company’s efficiency to
generate profits (from its assets) has increased a little.
Return on Equity
FY21 -25.23
FY20 - 24.97
● The company’s ROE has increased from FY20 - 24.97% to FY21 - 25.23%.
● This increase in ROE from FY20 to FY21 suggests that the company is able to generate
profits without needing as much capital. This means that the management is very well
able to deploy the shareholder’s capital in FY21 than 2020.
● The increase of 1.04 % in ROE from FY20 to FY21 indicates an efficient use of equity
capital by the company.
Return on Capital Employed

FY21 – 29.01 %
FY20 – 27.18 %
● ROCE saw an increase by 6.7% in FY21.

● The current values show that ROCE is good.

FY21 – 42.37
FY20 – 36.34
● EPS saw an increase of 16.59% in FY21 from the previous year.

FY21 - 27
FY20 – 17.5
● DPS saw an increase by 54.28% for FY21.

FY21 – 1332.5
FY20 – 640
Price Earnings Ratio

FY21 - 31.45
FY20 – 17.61
Gross Profit Ratio

FY21 -35.35
FY20 - 33.18
● The company’s Gross profit margin has increased from FY20 – 33.18% to FY21 –
● Increase in gross profit ratio indicates more cash for indirect costs and also is able to
keep its overhead costs in control.
Operating Ratio
FY21 -9.59
FY20 - 10.55
● This indicates that those assets not contributing to operational performance are
eliminated, so that it operates in a more efficient manner.
FY21 -25.77
FY20 -22.63
● Marginally increase in this ratio indicates higher operating efficiency to generate
sufficient revenue to be profitable.
Net Profit Ratio

FY21 -21.01
FY20 - 19.66
● The company’s net profit ratio has increased from FY20 – 19.66% to FY21 – 21.01%
which is a percentage increase of 6.86%.
● Increased net profit means that the current business practices is more efficient in
generating profit by improving sales volume in generating profits.
Interpretation:
● The trailing twelve-month earnings per share (EPS) of the company stands at Rs
39.2, an improvement from the EPS of Rs 35.5 recorded last year. The price to
earnings (P/E) ratio, at the current price of Rs 956.5, stands at 24.0 times its trailing
twelve months earnings.
● ROCE for the company improved and stood at 33.9% during FY20, from 32.4%
during FY19. The ROCE measures the ability of a firm to generate profits from its
total capital. Therefore, it efficiently uses its assets to generate earnings.

EFFICIENCY RATIO

FY21 - 5.39
FY20 – 5.48

FY21 - 67.72
FY20 – 66.61

FY21 - 35.94
FY20 – 33.72

FY21 - 10.16
FY20 – 10.83

FY21 - 6.52
FY20 – 6.19
Interpretation
● The Debtor turnover ratio of 5.38 in FY21, which is in the similar band of FY20. Thus
Average time to collect on an invoice also remains in the same time period.
● Creditors Turnover ratio remains in the same gap with the average collection period of
6-7 days in the year 2020-2021 which is at an undesirable level. The Creditor and
Debtor payment cycles’ gap is very huge which is not favourable for the operations of
the company.
● Fixed Asset turnover ratio has reduced by 6%. The performance of the company is at
an unsatisfactory level.
MINDTREE
Mindtree [NSE: MINDTREE] is a global technology consulting and services company, helping
enterprises marry scale with agility to achieve competitive advantage.
“Born digital,” in 1999 and now a Larsen & Toubro Group Company, Mindtree applies its deep
domain knowledge to 260 enterprise client engagements to break down silos, make sense of
digital complexity and bring new initiatives to market faster.
The Company enables IT to move at the speed of business, leveraging emerging technologies
and the efficiencies of Continuous Delivery to spur business innovation. Operating in 24
countries across the world, they are consistently regarded as one of the best places to work,
embodied every day by our winning culture made up of over 27,000 entrepreneurial,
collaborative and dedicated “Mindtree Minds.”
LIQUIDITY RATIO
Current Ratio
FY21 - 2.87
FY20 - 2.46
● The company’s current ratio increased by 16.67% from the previous year.
● The total current ratio rose steadily over the years indicating it has high liquidity and
hence can pay it’s short-term obligations in 1 year.
● The values indicate that the company will be able to meet its obligations in full for both
years.
Quick Ratio
FY21 - 2.82
FY20 - 2.39
● The company’s quick ratio for FY21 increased by 17.99% from the previous year.
● For FY21, the company has ₹2.82 of liquid assets available to cover each ₹1 of its
current liabilities.
SOLVENCY RATIO
Debt- Equity Ratio

FY21 - 0.10
FY20 - 0.21
● The company’s debt to equity ratio has decreased to 0.10 (FY21) from 0.21(FY20).
● Looking at the value 0.10 (ie. 1:10 ) this indicates that for every rupee of outside liability
the company has 10 rupees of owner’s capital for FY21 which has increased from 5
rupees for (FY20). Mindtree thus has an excellent D/E ratio.
Proprietary Ratio
FY21 - 0.68
FY20 - 0.61
● The company’s Proprietary ratio has increased from 0.61 (FY20) to 0.68 (FY21).
● The 11% increase in the ratio indicates that the amount contributed by shareholders
Interest Coverage Ratio

FY21 - 30.73
FY20 – 16.67
● So, we can see an increase in companies’ ability to repay the interest on its outstanding
debt. It indicates a company's strong financial strength as it is more capable of meeting
interest obligations of Mindtree as the company presents less of risk to investors and
creditors in terms of solvency.
Interpretation
company has enough funds to meet its long term debts and obligations. There's a consistent
increase in the measures compared to previous years measures thus the company has an
excellent position in terms of solvency.
PROFITABILITY RATIO
Return on Assets
FY21 -17.46
FY20 - 12.23
considered great.
Return on Equity
FY21 -25.71
FY20 - 19.98
● The increase of 28.65 % in ROE from FY20 to FY21 indicates an efficient use of equity

FY21 – 32.48 %
FY20 – 23.00 %
● ROCE saw an increase by 41.2% in FY21.

● The current values show that ROCE is good.

FY21 – 67.43
FY20 – 38.35

FY21 - 17.5
FY20 – 30
● DPS saw a decrease by 41.66% for FY21.

FY21 – 1878
FY20 – 828
● MPS saw an increase of 126.8%.
Price Earnings ratio

FY21 - 31.45
FY20 – 17.61
high growth potential of the company. This indicates higher earnings growth, positive
performance in the future and investors are usually willing to pay more for this
company’s shares.
Gross Profit Ratio

FY21 -37.73
FY20 - 35.24
● The company’s Gross profit margin has increased from FY20 – 35.24% to FY21 –
● A higher gross profit margin, means the company has more cash to pay for indirect and
other costs such as interest and one-time expenses.
● It helps to focus on products and services that are cheaper to produce so that prioritizing
aspects for the business and reinvesting for growth can take place.
Operating Ratio
FY21 - 82.47
FY20 - 89.62
● The company’s operating ratio has decreased from FY20 - 89.62% to FY21 - 82.47%
● This ratio is slightly above the ideal but is decreasing over the years indicating it is a
good sign as the company’s expenses are less than that of its revenue.

FY21 -19.44
FY20 -11.35
● A higher ratio indicates that expenses are more than the company’s ability to generate
sufficient revenue and may be considered inefficient.
Net Profit Ratio

FY21 -13.93
FY20 - 8.12
● The company’s net profit ratio has increased from FY20 – 8.12% to FY21 – 13.93%
● It has marginally increased from the previous year indicating that the company is more
efficient at converting sales into actual profit.
Interpretation
● ROA and ROE has increased as compared to FY 20 but ROA is less as compared to
industry ROA but return on equity is greater than average ROE of 6 companies.
● ROCE and EPS is also increased in FY 21 as compared to FY 20 with respect to average
ROCE and EPS
● The profit margins (gross and net) have increased over the years from (2020-2021) of
Mindtree also cash flow from operating activities has seen a good improvement.
● Company is almost debt free. Company has been maintaining a healthy dividend pay-
out and Company's median sales growth is 17.49% of the last 10 years.
EFFICIENCY RATIO

FY21 - 5.87
FY20 – 5.6

FY21 - 62.18
FY20 – 65.18

FY21 - 19.44
FY20 – 21.47

FY21 - 18.77
FY20 – 17.00

FY21 - 4.92
FY20 – 4.41
Interpretation
● With a Debtor turnover ratio of 5.87 in FY21, its average time to collect on an invoice
is around 63 days which is a 4.6% increase from the previous year.
● Creditors Turnover ratio is 3 times higher than the debtors turnover ratio with the
average collection period of 17-19 days in the year 2020-2021. The Creditor payment
cycle is 3.4 times the debtor payment period; this gap is not favourable for the company.
● Fixed Asset turnover ratio has also seen a slight increase from the previous year. The
ratio implies that the assets management and the utilization of the assets are efficient.
TCS
Tata Consultancy Services [ NSE: TCS] is a software and services provider in India. It is part
of the Tata Group, which oversees operations for over 100 companies in seven business sectors:
communications and information technology, engineering, materials, services, energy,
consumer products and chemicals.
Tata's full services portfolio combines traditional IT and Remote Infrastructure services with
knowledge-based services such as Consulting and Business Process Outsourcing. This enables
us to provide integrated solutions that help you recognize value quickly by reducing costs and
improving business agility. The efficiency and seamlessness of our engagements makes TCS
an excellent partner to companies looking for an integrated approach to managing all IT and
operational programs.
TCS was established in 1968 and became an independent entity in 1995. Within India, TCS is
well-known in eGovernance, banking and financial services, telecommunications, education
and healthcare markets.
LIQUIDITY RATIO
Current Ratio
FY21 - 2.92
FY20 - 3.30
● The company’s current ratio decreased by 13% from the previous year.
● The total current ratio declined steadily over the years indicating it has low liquidity
and still can pay its short-term obligations in 1 year.
● The values indicate that the company will be able to meet its obligations in full for both
years.
Quick Ratio
FY21 - 2.90
FY20 - 3.30
● The company’s quick ratio for FY21 decreased by 13.78% from the previous year.
● For FY21, the company has ₹2.90 of liquid assets available to cover each ₹1 of its
current liabilities.
SOLVENCY RATIO
Proprietary Ratio
FY21 -0.68
FY20 -0.71
towards total assets of the business has decreased.

FY21 - 79.44
FY20 – 57.52
● The company’s interest coverage ratio has increased from FY20 - 57.52 to FY21 79.44
● So we can see an increase in companies ability to repay the interest on its outstanding
debt. And tcs have strong financial strength has tcs has constantly improving interest
coverage ratio
Interpretation:
Looking at the Proprietary Ratio and Interest Coverage Ratio it is quite evident that the
company has enough funds to meet its long term debts and obligations. Though there's a decline
in shareholders' funds from the previous year’s measures, the company’s ability to repay the
interests has increased so overall it holds a good position in terms of solvency.
PROFITABILITY RATIO
Return on Assets
FY21 -28.30
FY20 - 31.68
considered great.
generate profits (from its assets) has decreased.
Return on Equity
FY21 -41.39
FY20 - 44.72
● This decrease in ROE from FY20 to FY21 suggests that the company is unable to
generate profits without needing as much capital. This means that the management is
unable to deploy the shareholder’s capital efficiency in FY21 than 2020.
● The decrease of 7.44 % in ROE from FY20 to FY21 indicates an inefficient use of

FY21 – 51.26 %
FY20 – 52.79 %
● ROCE were comparatively same for both the years.

● The current values show that ROCE of TCS are very good and the best in the industry.
● It indicates that their equity shareholders are in the best position in the market since
returns are very high.

FY21 – 82.78
FY20 – 88.64
● EPS saw a decrease of 6.61% in FY21 from the previous year.

FY21 - 38
FY20 – 73
● DPS saw a decrease by 47.94% for FY21.

FY21 – 3051.03
FY20 – 1880.70
FY21 - 36.60
FY20 – 21.20
Gross Profit Ratio

FY21 -52.28
FY20 -55.51
● A decrease in gross profit ratio increase in cost of goods sold without any increase in
selling price.
Operating Ratio
FY21 -72.60
FY20 - 73.61
● This declining trend is due to markdown of prices and this operating ratio has decreased
due to investment in asset sales.
FY21 -31.37
FY20 - 32.55
● The company’s operating profit ratio has decreased from FY20 – 32.55% to FY21 –
● Decrease in this ratio indicates lower operating efficiency and hence having insufficient
revenue to be profitable.
Net Profit Ratio

FY21 -22.77
FY20 -25.33
● The company’s net profit ratio has decreased from FY20 – 25.33% to FY21 – 22.77%
● Decrease in net profit indicates decrease in sales for the financial year. The product mix
of selling the most product with the highest profit margin is not happening so the
product mix needs to be changed.
Interpretation:
● ROE for the company declined and down at 43.72% during FY21, from 41.39% during
FY21.
● Therefore the firm has the ability to generate profits from its shareholders' capital.
EFFICIENCY RATIO

FY21 - 5.05
FY20 – 4.98

FY21 - 72.28
FY20 – 73.29

FY21 - 8.42
FY20 – 8.10

FY21 - 43.36
FY20 – 45.08

FY21 - 5.07
FY20 – 4.68
Interpretation
● The Debtor turnover ratio of 5.05 in FY21. It’s average time to collect on an invoice
remains in the same band. Creditors Turnover ratio remains in the same gap with the
average collection period of 43-46 days in the year 2020-2021.
● The Creditor and Debtor payment cycles’ gap is at a manageable level. Fixed Asset
turnover ratio had an increase of 7.6% from the previous year. The growth implies that
the assets management and the utilization of the assets are more efficient compared to
FY20.
WIPRO
Wipro Limited [NSE: WIPRO] is a leading global information technology, consulting and
business process services company. They harness the power of cognitive computing, hyper-
automation, robotics, cloud, analytics and emerging technologies to help their clients adapt to
the digital world and make them successful. A company recognized globally for its
comprehensive portfolio of services, strong commitment to sustainability and good corporate
citizenship, they have over 200,000 dedicated employees serving clients across six continents.
They discover ideas and connect the dots to build a better and a bold new future.
LIQUIDITY RATIO
Current Ratio
FY21-2.50
FY20-2.78
● The total current ratio has declined over the years indicating it has low liquidity and
hence it’s difficult to pay its short-term obligations in 1 year.
Quick Ratio
FY21-2.48
FY20-2.78
● It indicates that the company is not fully equipped with enough assets to be instantly
SOLVENCY RATIO
Debt- Equity Ratio

FY21 - 0.20
FY20 - 0.10
● The company’s debt to equity ratio has increased from FY 20 to 21.

the company has 5 rupees of owner’s capital.
Proprietary Ratio
FY21 - 0.69
FY20 - 0.71
towards total assets of the business has decreased a little.

FY21 - 28.6
FY20 – 20.6
● So we can see an increase in companies’ ability to repay the interest on its outstanding
debt. It indicates a company's strong financial strength as it is more capable of meeting
interest obligations of Wipro as the company presents less of risk to investors and
creditors in terms of solvency.
Interpretation:
Looking at the D/E Ratio, Proprietary Ratio it is quite evident that the company has enough
funds to meet its long term debts and obligations. Though there's a decline from the previous
year’s measures the company still holds a good position in terms of solvency.
PROFITABILITY RATIO
Return on Assets
FY21 -15.30
FY20 - 13.29
considered great.
Return on Equity
FY21 -22.24
FY20 - 18.69
● The increase of 19 % in ROE from FY20 to FY21 indicates an efficient use of equity

FY21 – 27.33 %
FY20 – 23.18 %
● ROCE increases by 17.9%.

● The ROCE is good but comparatively lower when compared to market leaders.

FY21 – 17.81
FY20 – 14.88

FY21 - 1
FY20 – 1
● DPS remained the same for both years and was the lowest among all the three
companies that were compared.

FY21 – 42.11
FY20 – 19.67

FY21 - 21.70
FY20 –11.80
The company’s P/E ratio has increased from 17.61 (FY20) to 31.45 (FY21).
P/E shows that the Market price of the company is 31.45 times the earnings of the company in
FY 21 and 17.61 times in the FY20. i.e we can say that investors are willing to pay 31.45 times
of earnings per share because of growth expectations in the future high growth potential of the
company.
Gross Profit Ratio

FY21 - 50.88
FY20 - 51.11
● This slightly reducing trend indicates an unfavourable trend in the form of reduction in
selling prices not accompanied by proportionate decrease in cost of goods or increase
in cost of production.
● Unfavourable purchasing and inability of management to improve sales volume is the
primary reason for this declining trend.
Operating Ratio
FY21 -78.88
FY20 - 82.47
● The company’s operating ratio has decreased from FY20 - 82.47% to FY21 – 78.88%
● This falling operating ratio indicates operating expenses are decreasing, revenue and
sales are rising or a mix of the two, hence operational efficiency is high and profit
margins are increasing continuously.

FY21 -25.86
FY20 - 22.48
● A higher operating profit ratio indicates better able to pay their fixed costs and interest
on debts also better survive economic downturns.
Net Profit Ratio

FY21 -20.00
FY20 - 17.23
● The company’s net profit ratio has increased from FY20 – 17.23% to FY21 – 20%
● Increase in net profit margin indicates the company's rising financial stability.
● Hence making the company survive when a product line doesn’t meet expectations.
Interpretation
● The operating profit ratio has increased which indicates higher operating efficiency
leading to higher operating profits this means that for every 1 unit of net sales the
company earns profit.
● The respective decrease in the ratios has slightly drifted away as reasonable profit on
sales is low which indicates higher cost of goods sold.
EFFICIENCY RATIO

FY21 - 5.81
FY20 – 5.51

FY21 - 62.82
FY20 – 66.24

FY21 - 6.09
FY20 – 5.83

FY21 - 59.90
FY20 – 62.61

FY21 - 3.48
FY20 – 3.68
Interpretation
● The Debtor turnover ratio of 5.81 in FY21, that is an increase of 5% from FY20. It’s
average time period remains in the same band of 62-66 days.
● Creditors Turnover ratio remains in the same gap with a hike of 4% in the FY21 with
the average collection period of 59-63 days in the year 2020-2021. The Creditor and
Debtor payment cycles’ gap is at a satisfactory level which is favourable for the
company.
● Fixed Asset turnover ratio had a slight reduction of 5.7% from the previous year. The
Reduction implies that the assets management and the utilization of the assets are less
efficient compared to FY20.
LIQUIDITY RATIO
SOLVENCY RATIO
PROFITABILITY RATIO
ACTIVITY RATIOS

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ACADEMIC YEAR 2021-22

SHRI BALAJI COLLEGE OF ARTS COMMERCE AND

NAME OF PROJECT : RATIO ANALYSIS OF VARIOUS

UNDER THE GUIDANCE OF :

SAVITRIBAI PHULE UNIVERSITY, PUNE

SUBMITTED BY: KHUSHI JAISWAL

I EXPRESS MY DEEP SENSE OF GRATITUDE TO MRS. NEHA

I WOULD ALSO LIKE TO THANK MY PRINCIPAL Dr.G.Y SHITOLE .

I SHALL FOREVER CHERISH MY ASSOCIATION WITH HER FOR

I hereby declare that the practical report titled “RATIO ANALYSIS OF

This report is being is submitted in partial fulfillment of the requirement

It also provides a comprehensive range of IT services, including IT enabled services,

Interest coverage ratio

Return On Capital Employed

Earnings per share (in Rs.)

Dividend per share (in Rs.)

Market per Share (in Rs.)

Price Earnings ratio

Dividend yield ratio (%)

Gross Profit Ratio

Operating Profit Ratio

Net Profit Ratio

Debtor turnover ratio

Average Collection period

Creditors turnover ratio

Average creditors period:

Asset turnover ratio

Interest coverage ratio

Return On Capital Employed

Earning per share (in Rs.)

Dividend per share (in Rs.)

Market per Share (in Rs.)

Price Earning Ratio

Gross Profit Ratio

Operating Profit Ratio

Net Profit Ratio

Debtor turnover ratio

Average Collection period

Creditors turnover ratio

Average creditors period:

Asset turnover ratio

Interest coverage ratio

Return on Capital Employed

● ROCE saw an increase by 6.7% in FY21.

Earnings per share (in Rs.)

● EPS saw an increase of 16.59% in FY21 from the previous year.

● DPS saw an increase by 54.28% for FY21.

Market per Share (in Rs.)

● MPS saw a 108.2% increase.

Price Earnings Ratio

Gross Profit Ratio

Net Profit Ratio

total capital. Therefore, it efficiently uses its assets to generate earnings.

Debtor turnover ratio

Average Collection period

Creditors turnover ratio

Average creditors period:

Asset turnover ratio

Debt- Equity Ratio

Interest Coverage Ratio

Return on Capital Employed

● ROCE saw an increase by 41.2% in FY21.

Earnings per share (in Rs.)

● EPS saw an increase of 75.82% in FY21 from the previous year.