“A Study on Financial Performance”

Bharti Airtel Ltd.

Submitted in partial fulfillment of the requirements

For the award of the degree of

Bachelor of Commerce (Honours)

BCOM (H)

To
Guru Gobind Singh Indraprastha University, Delhi

Guide: Submitted by: Fareha Khan

Ms. Sejal Billa Roll No: 01724488820
(Assistant Professor)

Institute of Innovation in Technology & Management

New Delhi – 110058

Batch (2020-2023)

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 Certificate

I, Mr./Ms. Fareha Khan Roll No. 01724488820 certify that the Project Report/Dissertation BCOM
(H) / Code 309 entitled “The Study on Financial Performance of Bharti Airtel Ltd.” is done by
me and it is an authentic work carried out by me “Bharti Airtel Ltd.” The matter embodied in this
project work has not been submitted earlier for the award of any degree or diploma to the best of my
knowledge and belief.

Signature of the Student

Date:

Certified that the Project Report/Dissertation of BCOM (H) entitled ________________

______________________________________________________________________”

Done by Mr./Ms._______________________________, Roll No. ________________, is

completed under my guidance.

Signature of the Guide

Name of the Guide:
Designation:
Date
Countersigned
(Director / Project Coordinator)

2
3
 Acknowledgement

I take this opportunity to express my profound gratitude and deep regards to my guide “Ms.
Sejal Billa” for her exemplary guidance, monitoring and constant encouragement throughout
the course of this project. The blessing, help and guidance given by her time to time shall carry
me a long way in the journey of life on which I am about to embark.

Last but not least, my sincere thanks to my parents and friends for their whole hearted support
and encouragement.

FAREHA KHAN
BCOM (H) V SEMESTER

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 CONTENTS

S No Topic Page No
1 Certificate (s) 2
2 Acknowledgements 5
3 List of Tables 6
4 List of Symbols 6
5 List of Abbreviations 7
6 Chapter-1: Introduction 8-14
7 Chapter-2: Research Methodology 15-25
8 Chapter-3: Data Analysis & Interpretation 26-47
9 Chapter-4: Summary and Conclusions 48-50
10 References/Bibliography 51

5
 LIST OF TABLES/FIGURES/ SYMBOLS/ABBREVIATIONS

LIST OF TABLES

Table No Title Page No

1 Board of Directors of the Company 13
2 Balance Sheet of Airtel 26
3 Income Statement (Profit $ Loss Account) 31
4 Current Ratio 33
5 Quick Ratio 34
6 Working Capital Ratio 34
7 Debt Ratio 35
8 Debt to Equity Ratio 35
9 Current Worth Ratio 35
10 Total Capitalization Ratio 36
11 Interest Coverage Ratio 36
12 Net Profit Margin 37
13 Operating Profit Margin 38
14 Return on Assets 38
15 Return on Net Worth 39
16 Asset Turnover Ratio 39
17 Working Capital Turnover Ratio 40
18 Earnings per Share 40
19 Price Earnings Ratio 41
20 Dividend Payout Ratio 41
21 Comparative Balance Sheet 42
22 Comparative Income Statement 43
23 Common Size Balance Sheet 44
24 Common Size Income Statement 47

LIST OF FIGURES

Figure No Title Page No

1 Logo of the Airtel 10

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 LIST OF ABBREVIATIONS

S No Abbreviated Name Full Name

1 EBITDA Earnings before Interest, Tax, Depreciation
& Amortization
2 EBIT Earnings before Interest & Tax
3 EBT Earnings before Tax
4 PAT Profit After Tax
5 EPS Earnings per Share
6 TIE Time Interest Earned
7 ROA Return On Assets
8 SMS Short Message Service
9 NYLIF New York Life Insurance
10 BSNL Bharat Sanchar Nigam Limited
11 VSAT Very Small Aperture Terminal
12 B2B Business to Business
13 WPP Wire & Plastic Product
14 JWT JSON Web Tokens
15 FOB Free On Board

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 Chapter-1
Introduction
1.1 Bharti Airtel Pvt. Ltd.
Bharti Airtel Limited, also known as Airtel, is an Indian multinational telecommunication
services company based in New Delhi. It operates in 18 countries across South Asia and Africa,
as well as the Channel Islands. Airtel is India’s largest and world’s third largest cellular network
provider.

Headquartered in New Delhi India Bharti Airtel ranks amongst the top 3 mobile service
providers globally in terms of subscribers. Airtel provides 2G, 3G, 4G, 4G+, 5G mobile
services, fixed-line broadband, and voice services depending upon the country of operation.
Airtel had also rolled out its VOLTE technology across all Indian telecom circles. It is
the second largest mobile network operator in India and the second largest mobile network
operator in the world. Airtel was named India's 2nd most valuable brand in the first ever Brands
ranking by Mill ward Brown and WPP plc.

Bharti Airtel not only provides B2C services, they also accelerated B2B services under wireless
and fixed line technology, national and international long-distance connectivity, broadband,
digital TV services, and complete integrated telecommunication solutions to our enterprise
customers.

• Bundled plans with truly unlimited voice packs.

• First to launch 4G in India Prepaid & Postpaid plans.

• An Industry First Exclusive Rewards Program: Airtel Thanks.

• Industry first voice over Wi-Fi service Redefined International Roaming and rates as the
network with India’s best video experience and fastest download speed by open signal.

1.2 History

Bharti Tele-Ventures was incorporated on July 7, 1995 as a company with limited liability
under the Companies Act, for promoting telecommunications services. Bharti Tele-Ventures
received certificate for commencement of business on January 18, 1996. The Company was
initially formed as a wholly-owned subsidiary of Bharti Telecom Limited

1.21 1996

8
 • STET International Netherlands NV, or STET, a company promoted by Telecom
Italia, Italy acquired a 20% equity interest in Bharti Tele-Ventures.
• Bharti Tele net launched cellular services in Himachal Pradesh.

1.22 1997

• British Telecom acquired a 21.05% equity interest in Bharti Cellular.

• Bharti Tele net obtained a license for providing fixed-line services in Madhya Pradesh
circle.
• Bharti Telecom and British Telecom formed a 51% - 49% joint venture, Bharti BT,
for providing VSAT services.

1.23 1998
• Bharti Telecom and British Telecom formed a 51% - 49% joint venture, Bharti BT
Internet for providing Internet services.
• First Indian private fixed-line services launched in Indore in the Madhya Pradesh
circle on June 4, 1998 by Bharti Tele net thereby ending fixed-line services monopoly
of DoT (now BSNL).

1.24 1999-2000
• Warburg Pincus (through its investment company Brentwood Investment Holdings
Limited) acquired a 19.05% equity interest in Bharti Tele-Ventures.
• Bharti Tele-Ventures (by acquiring a 63.45% equity interest in SC Cellular Holdings)
acquired an effective 32.36% equity interest in Bharti Mobile (formerly JT Mobiles),
the cellular services provider in Karnataka and Andhra Pradesh circles.
• New York Life Insurance Fund, or NYLIF, acquired a 3% equity interest in Bharti
Cellular.
1.25 2001-2002
• Bharti Tele-Ventures acquired NYLIF's 3% equity interest in Bharti Cellular.
• Launched national long distance services under the brand name of "India One".
• Launched fixed line services in Haryana under the brand name of "Touch Tel".

1.26 2003

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 • Airtel provides SMS facilities to hearing impaired in Chennai.
• Goa, Maharashtra gets 'voice portal' services by Bharti Cellular.
• Launches free additional connection to its new subscribers in New Delhi.

1.27 2004
• Got 14th place among 25 Cos in India.

1.28 2005-2013

• Company has changed its name from Bharti Tele-Ventures Ltd. to Bharti Airtel Ltd.
Bharti Airtel on Feb 11, has been awarded QCI-DL Shah National Award on
Economics of Quality.
• Bharti Airtel submitted its bid for 3G spectrum, the auction for which starts from
April 9.
• Airtel launches 3G services in Mumbai.
• Bharti and Qualcomm announce partnership for 4G.

1.29 2014-2018

• Airtel and Apple launch India Â’s first 4G on mobile.

• Airtel 3G services now available in Punjab -Airtel 4G comes to Nagpur.
• Bharti Airtel crosses 300 million customers milestone.

1.30 2019-2021
• Airtel becomes the first operator to launch 4G services in the Andaman and Nicobar.
• Bharti Airtel has successfully conducted India's first cloud gaming session in a 5G
environment.

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 1.3 The Meaning of Logo and Making of the Name

AIRTEL
Airtel believes in enthusiasm, strength and cheerfulness and so their logo is called
'The Wave' and was created by creative agency JWT. The curliness of the shape and
the highlights of the red color make it warm and inviting. Moreover the name Airtel
includes alive, inclusive and respectful and of course it is in terms of their service in
the telecom industry. The logo and the color itself reflect how much the company is
dedicated to serve the customers with their utmost eagerness and enthusiasm. Since
red is the color of life and eagerness the entire strategy of being service oriented and
lively altogether help targeting the youth with their most attracting marketing
activities and such a meaningful logo.

•
•
•
•
•
•
• fff
•
•
•
•
•
•
•
•
•

AIRTEL
•
•
•
•

ALIVE RESPECTFUL

INCLUSIVE
FIGURE 1

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 1.4 Mission and Vision

1.41 Mission of Bharti Airtel

Hungers to win Customers for life.

1.42 Our Vision of Bharti Airtel

Our vision is to enrich the lives of our customers. Our obsession is to win customers for life
through an exceptional experience.

1.5 Values

1.51 Values of Bharti Airtel

ALIVE

We are alive to the needs of our customers. We act with passion, energy and a can-do attitude
to help our customers realize their dreams. Innovation and an entrepreneurial spirit drive us -
if it can’t be done, we’ll find a way.

INCLUSIVE

Airtel is for everyone - we champion diversity, recognising the breadth and depth of the
communities we serve. We work with them, anticipating, adapting and delivering solutions
that enrich their lives. We do this by having an open mind and embracing change

RESPECTFUL

We live the same lives as our customers, sharing the same joys and the same pains. We never
forget that they are why we exist. We act with due humility, always open and honest, to
achieve mutual respect.

1.6 Product and Services of Bharti Airtel

1.61 Wireless Service

We offer postpaid, prepaid, international roaming, data connectivity and other value added
services to our customers.

1.62 Airtel Business

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We are one of India’s leading and most trusted provider of ICT services with a diverse
portfolio of services to enterprises, governments, carriers and small and medium businesses.
Along with voice, data and video, our services also include network integration, data centers,
managed services, enterprise mobility applications and digital media

1.63 Home Service

We provide fixed-line telephone and broadband services for homes across India. The product
offerings include high-speed broadband on copper and fiber and voice connectivity.

1.64 Tower Infrastructure

We own and operate more than 42,053 telecom towers under our subsidiary Bharti Infratel
Limited (on a standalone basis) with presence across all 22 telecom circles

1.65 Digital TV Services

Our Direct-To-Home (DTH) platform offers both standard and high definition (HD) digital
TV services with Dolby surround sound.

1.66 Payments Banks

India’s first payments bank with active operations across all 28 states in India.

1.7 BOARD OF DIRECTORS

Chairman: Sunil B Mittal
Director : Chua Sock Koong
Independent Director : Manish Kejriwal
Managing Director : Gopal Vittal
Independent Director : V K Viswanathan
Independent Director : Dinesh Kumar Mittal
Independent Director : Shishir Priyadarshi
Director : Rakesh Bharti Mittal
Company Secretary : Pankaj Tiwari
Additional Independent Director : Kimsuka Narasimhan
Additional Director : Tao Yih Arthur Lang

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 Additional Director : NISABA ADI GODREJ
Additional Director : Pradeep Kumar Sinha
Additional Director : Shyamal Mukherjee
AUDITOR : Deloitte Haskins & Sells LLP
IND NAME : Telecommunications - Service Provider
HOUSE NAME : Bharti
Table No. 1

1.8 Objectives of the Study

• To study the growth and the progress of Bharti Airtel Ltd.

• To study the profit level of the company.
• To study the liquidity position of the company.

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 Chapter -2

2.1 Research Methodology

Research methodology is a careful investigation for inquiring in a systematic method and
finding solution of a problem. It comprises the defining and redefining of problem formulating
hypothesis, collection and evaluating data, making detection and reaching conclusion.

2.2 Source of Data

2.21 Secondary Data
Secondary data is Secondary data is data collected by someone other than the actual user. It
means that the information is already available, and someone analyses it. The secondary data
includes magazines, newspapers, books, journals, etc.

• This study is based on secondary data obtained from the annual reports containing the
Balance Sheet, Income Statement, and Profit and Loss account.
• In addition to this supportive data is collected from various websites, journals and
newspapers.

2.22 Statement of the Problem

Telecommunication sector plays a vital role in today’s economy. The present study focuses on
the Bharti Airtel Company’s financial performance and the profitability level of the company
for a period of five years using various tools.

2.23 Scope of the study

The main aim of the study is to analyze the financial position of the company using financial
tool like ratio analysis. This is mainly done in order to find the financial soundness of the
company. In general the study focuses on the financial position of the company.

2.3 Tools used in study

2.31 Ratio Analysis

Ratio analysis is the calculation and comparison of ratios which are derived from the
information in a company’s financial statements. Financial ratios are usually expressed as a
percent or as times per period. Ratio analysis is a widely used tool of financial analysis. It is

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defines as the systematic use of ratio to interpret the financial statements so that the strength
and weaknesses of a firm as well as its historical performance and current financial condition
can be determined.

With the help of ratio analysis conclusion can be drawn regarding several aspects such as
financial health, profitability and operational efficiency of the undertaking.

Ratio analysis helps in inter-firm comparison by providing necessary data. Various activity
ratios are measured are mentioned below:

• Liquidity Ratios
• Solvency Ratios
• Profitability Ratios
• Activity Ratios

1) Liquidity Ratios
Liquidity ratios are a measure of the ability of a company to pay off its short-term
liabilities. Liquidity ratios determine how quickly a company can convert the assets and
use them for meeting the dues that arise. The higher the ratio, the easier is the ability to
clear the debts and avoid defaulting on payments.
1.1 Current Ratio:

The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables.

Current Ratio = Current Assets / Current Liabilities

1.2 Quick Ratio:

The quick ratio also known as the acid-test ratio, is a liquidity ratio that further refines the
current ratio by measuring the level of the most liquid current assets available to cover current
liabilities. The quick ratio is more conservative than the current ratio because it excludes
inventory and other current assets, which generally are more difficult to turn into cash. A higher
quick ratio means a more liquid current position.

Quick asset/ Current Liability

(Quick Asset = Current Asset-Inventory)

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1.3 Working Capital:

A measure of both company’s efficiency and its short term financial health. Positive working
capital means that the company is able to pay off its short term liabilities. Negative working
capital means that the company currently is unable to meet its short term liabilities with its
current assets (cash, accounts, receivable and inventory). Also known as “net working capital”.

Working Capital= Current Assets- Current Liabilities

2) Solvency Ratios
By using a combination of assets, debt, equity and interest payments, solvency ratios
are used to understand a company’s ability to meet it long term financial obligations.
Solvency ratios measure the degree of protection of suppliers of long term funds. The
level of solvency depends on a lot of factors such as availability of collateral, strength
of operating cash flow and tax treatments. Thus investors should be very careful about
comparing financial solvency between companies from different industries.

2.1 Debt Ratio:

The ratio of total debt to total assets, generally called the debt ratio, measures the percentage
of funds provided by the creditors. The proportion of a firm’s total assets that are being financed
with borrowed funds. The debt ratio is calculated by dividing total long term and short term
liabilities by total assets. The higher the ratio, the more leverage the company is using and the
more risk it is assuming. Assets and liabilities are found on a company’s balance sheet.

Debt Ratio =Total Debt/ Total Assets

2.2 Debt to Equity Ratio:

Debt to Equity Ratio = Debt/ Shareholder’s Equity

The debt to equity ratio is the most popular leverage ratio and it provides detail around the
amount of leverage (liabilities assumed) that a company has in relation to the monies provided
by shareholders. The debt to equity ratio gives the proportion of a company (or person’s) assets
that are financed by debt versus equity. A high debt to equity ratio implies that the company
has been aggressively financing its activities through debt and therefore must pay interest on
this financing.

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2.3 Current Worth to Net Worth Ratio= Current Worth/ Net worth Ratio

We can calculate current worth and net worth by using following formulas:

Current Worth= Total Current Assets- Total Current Liabilities

Net Worth= Total Assets- Total Liabilities

2.4 Total Capitalization Ratio:

The capitalization ratio measures the debt component of a company’s capital structure, or
capitalization to support a company’s operations and growth. Long term debt is divided by the
sum of long term debt and shareholder’s equity. This ratio is considered to be one of the more
meaningful of the “debt” ratios- it delivers the key insight into a company’s use of leverage.

Total Capitalization Ratio= Long term debt/ Long term debt+ Shareholder’s equity

2.5 Time Interest Earned:

The interest coverage ratio tells us how easily a company is able to pay interest expenses
associated to the debt they current have. The ratio is designed to understand the amount of
interest due as a function of company’s earnings before interest and taxes (EBIT). This ratio
measures the extent to which operating income can decline before the firm is unable to meet
its annual interest cost.

TIE Ratio= EBIT/ Interest Charges

3) Profitability Ratios

Profitability is the ability to earn profit from all the activities of an enterprise. It indicates how
well management of an enterprise generates earnings by using the resources at its disposal.

Profitability ratios show the combines effects of liquidity, asset management and debt on
operating results. These ratios examine the profit made by the firm and compare these figures
with the size of the firm, the assets employed by the firm or its level of sales.

There are four important profitability ratios that I am going to analyze are given below:

3.1 Net Profit Margin

Net Profit Margin gives us the net profit that the business is earning per dollar of sales. This
margin indicates the profit after all the costs have been incurred it shows that what % of

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turnover is represented by the net profit. An increase in the ratios indicates that a firm is
producing higher net profit of sales than before.

Net Profit Margin= Net Profit/ Sales * 100

3.2 Operating Profit Margin

The operating profit margin ratio indicates how much profit a company makes after paying for
variable costs of production such as wages, raw materials, etc. It is also expressed as a
percentage of sales and then shows the efficiency of a company controlling the costs and
expenses associated with business operations.

Operating Profit= Operating Profit *100 / Net Sales

3.3 Return on Assets

It measures a company’s profitability, equal to a fiscal year’s earnings divided by its total
assets, expressed as a percentage. This is an important ratio for companies deciding whether or
not to initiate a new project. The basis of this ratio is that if a company is going to start a project
they expect to earn a return on it, ROA is the return they would receive. Simply put, if ROA is
above the rate that the company borrows at then the project should be accepted, if not then it is
rejected.

Return on Assets (ROA) = Profit after Tax/ Total Assets * 100

3.4 Return on Net Worth

Return on Net worth measures the amount of Net Income earned by shareholders. By this, we
can find out how much the shareholders are going to get for their shares. This ratio indicates
how profitable a company is by comparing its net income to its average shareholder’s equity.
It measures how much the shareholders earned for their investment in the company. The higher
the ratio percentage, the more efficient management is in utilizing its equity base and the better
return is to investors.

Return on Net Worth= Profit after Tax/ Net Worth * 100

4) Activity Ratios
Activity ratio are sometimes called efficiency ratios. Activity ratios are concerned
with how efficiency the assets of the firm are managed. These ratios express

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 relationship between level of sales and the investment in various in various assets
inventories, receivables, fixed assets etc.

4.1 Asset Turnover Ratio

It measures a firm’s efficiency at using its assets in generating sales or revenue- the higher the
number the better. It also indicates pricing strategy: company with low profit tend to have high
asset turnover, while those with high profit margins have low asset turnover.

Total Asset turnover = Total Sales/ Total Assets

4.2 Working Capital Turnover Ratio:

Working capital turnover is a ratio that measures how efficiently a company is using
its working capital to support sales and growth. A higher working capital turnover ratio is
better, and indicates that a company is able to generate a larger amount of sales. However, if
working capital turnover rises too high, it could suggest that a company needs to raise
additional capital to support future growth.

Working Capital Turnover Ratio = Revenue from Operations/ Working Capital

5) Market Ratios
Market Value Ratios relate an observable market value, the stock price, to book values
obtained from the firm’s financial statements.

5.1 Earnings per Share- EPS

The portion of company’s profit allocated share of common stock. EPS serve as an indicator
of a company’s profitability. Earnings per share are generally considered to be the single most
important variable in determining a share price. It is also a major component used to calculate
the price- to earning valuation ratio.

Earnings per share = Profit after tax/ Number of shares outstanding

5.2 Price / Earnings Ratio:

The Price- Earnings ratio is calculated by dividing the current market price per share of the
stock by earning per share (EPS). (Earnings per share are calculated by dividing net income by
the no. of shares outstanding.)

Price/Earnings Ratio = Stock Price per Share/ Earnings per Shares

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5.3 Dividend Payout Ratio

The dividend payout ratio is the amount of dividends paid to stockholders relative to the amount
of total net income of a company. The amount that is not paid out in dividends to stockholders
is held by the company for growth.

2.32 Comparative Statement Analysis

Comparative study of financial statements is the comparison of the financial statements of the
business with the previous year’s financial Statements. It enables identification of weak points
and applying corrective measures. Practically, two financial statements (balance sheet and
income statement) are prepared in comparative form for analysis purposes.

➢ Comparative Balance Sheet

The comparative balance sheet shows the different assets and liabilities of the firm on different
dates to make comparison of balances from one date to another. The comparative balance sheet
has two columns for the data of original balance sheets. A third column is used to show change
(increase/decrease) in figures. The fourth column may be added for giving percentages of
increase or decrease.

While interpreting comparative balance sheet the interpreter is expected to study the following
aspects:

• Current financial position and Liquidity position

• Long term financial position
• Profitability of the concern
i. For studying current financial position or liquidity position of a concern one
should examine the working capital for both the years.
ii. For studying the long term financial position of the concern one should examine
the changes in fixed assets, long term liabilities and capital.
iii. The next aspect to be studied in a comparative balance sheet is the profitability
of the concern. The study of increase or decrease in profit will help the
interpreter to observe whether the profitability has improved or not.

➢ Comparative Income Statement

The income statement provides the results of the operations of a business. This statement
traditionally is known as trading and profit loss A/c. Important components of income

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statement are net sales. Cost of goods sold, selling expenses, office expenses etc. The figures
of the above components are matched with their corresponding figures of previous years
individually and changes are noted. The comparative income statement gives an idea of the
progress of a business over a period of time. The changes in money value and percentage can
be determined to analyze the profitability of the business. Like comparative balance sheet,
income statement also four columns. The first two columns are shown figures of various item
for two years. Third and fourth columns are used to show increase or decrease in figures in
absolute amount and percentages respectively. The analysis and interpretation of income
statement will involve the following:
i. The increase or decrease in sales should be compared with increase or decrease in cost
of goods sold.
ii. To study the operating profits.
iii. The increase or decrease in net profit is calculated that will give an idea about the
overall profitability concern.

2.33 Common Size Statement Analysis

The common size statements (Balance Sheet and Income Statement) are shown in
analytical percentages. The figures of these statements are shown as percentages of total
assets, total liabilities and total sales respectively.

➢ Common Size Balance Sheet

A statement where balance sheet items are expressed in the ratio of each assets to total assets
and the ratio of each liability is expresses in the ratio of total liabilities is called common size
balance sheet.

Thus the common size statement may be prepared in the following way. The total assets or
liabilities are taken as 100 – The individual assets are expressed as a percentage of total assets
i.e. 100 and different liabilities are calculated in relation to total liabilities. For example, if total
assets are Rs.10 lakhs and value of inventory is Rs.100, 000, then inventory will be 10% of
total assets (10000*100/1000000)

➢ Common Size Income Statement

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Common size Income Statement is the vertical analysis of Income Statement in which value of
Revenue from Operations is taken as 100 and values of other items of Statement of Profit and
Loss are expressed as percentage of Revenue from Operations.

Objectives

• To analyze change in individual items of Statement of Profit and Loss.

• To study the trend in different items of Revenues and Expenses.
• To assess the efficiency.

2.4 Balance Sheet

The term balance sheet refers to a financial statement that reports a company's assets,
liabilities, and shareholder equity at a specific point in time. Balance sheets provide
the basis for computing rates of return for investors and evaluating a company's capital
structure.

The balance sheet adheres to the following accounting equation, with assets on one side, and
liabilities plus shareholder equity on the other, balance out:

Assets=Liabilities + Shareholders’ Equity

This formula is intuitive. That's because a company has to pay for all the things it owns
(assets) by either borrowing money (taking on liabilities) or taking it from investors (issuing
shareholder equity).

2.41 Components of Balance Sheet

1) Assets
An asset is an item that the company owns, with the expectation that it will yield
future financial benefit. This benefit may be achieved through enhanced purchasing
power.
2) Liability
A liability is any money that a company owes to outside parties, from bills it has
to pay to suppliers to interest on bonds issued to creditors to rent, utilities and
salaries. Current liabilities are due within one year and are listed in order of their
due date. Long-term liabilities, on the other hand, are due at any point after one
year.

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 3) Shareholder Equity
Shareholder equity is the money attributable to the owners of a business or its
shareholders. It is also known as net assets since it is equivalent to the total assets
of a company minus its liabilities or the debt it owes to non-shareholders.

2.5 Income Statement of Profit & Loss

An income statement is used for reporting a company’s financial performance over a specific
accounting period. The income statement focuses on the revenue, expenses, gains, and losses
of a company during a particular period. Also known as the profit and loss (P&L) statement.

An income statement provides valuable insights into a company’s operations, the efficiency
of its management, underperforming sectors, and its performance relative to industry peers.

2.51 Revenue and Gains

➢ Operating Revenue: Revenue realized through primary activities is often referred to

as operating revenue. For a company manufacturing a product, or for a wholesaler,
distributor, or retailer involved in the business of selling that product, the revenue
from primary activities refers to revenue achieved from the sale of the product.
➢ Non-Operating Revenue : Revenue realized through secondary, noncore
business activities is often referred to as non- operating, recurring revenue. This
revenue is sourced from the earnings that are outside the purchase and sale of goods
and services and may include income from interest earned on business capital parked
in the bank, rental income from business property, income from strategic
partnerships like royalty payment receipts, or income from an advertisement display
placed on business property.
➢ Gains: Gains indicate the net money made from other activities, like the sale of
long-term assets. These include the net income realized from one-time nonbusiness
activities, such as a company selling its old transportation van, unused land, or a
subsidiary company.
2.52 Expenses and Losses

➢ A business's necessary cost to continue operating and turning a profit is known as an

expense. Losses are unplanned and often unexpected.

24
 ➢ Expenses are something that a business has to budget for and plan for, while losses are
often unforeseen and can throw a wrench in even the best-laid plans.

2.53 Income Statement Structure

Net Income = (Revenue + Gains) - (Expenses +Losses)

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 Chapter -3
Data Analysis and Interpretation
3.1 Balance Sheet of Bharti Airtel Ltd.

BALANCE SHEET MAR 22 MAR 21 MAR 20 MAR 19 MAR

OF BHARTI 18
AIRTEL (in Rs. Cr.)

EQUITIES AND
LIABILITIES

SHAREHOLDER'S
FUNDS

Equity Share Capital 2,795.00 2,746.00 2,727.80 1,998.70 1,998.7

0

TOTAL SHARE 2,795.00 2,746.00 2,727.80 1,998.70 1,998.7

CAPITAL 0

Reserves and Surplus 76,134.80 74,614.10 98,347.20 96,307.20 100,86

2.20

TOTAL RESERVES 76,134.80 74,614.10 98,347.20 96,307.20 100,86

AND SURPLUS 2.20

TOTAL 78,929.80 77,360.10 101,075.00 98,305.90 102,86

SHAREHOLDERS 0.90
FUNDS

NON-CURRENT
LIABILITIES

26
Long Term 94,325.80 89,908.80 70,471.20 58,612.00 54,468.
Borrowings 10

Deferred Tax 0.00 0.00 0.00 0.00 0.00

Liabilities [Net]

Other Long Term 36,884.30 38,818.30 35,069.30 5,095.70 3,784.9

Liabilities 0

Long Term Provisions 230.40 220.50 191.90 192.70 183.00

TOTAL NON- 131,440.50 128,947.6 105,732.40 63,900.40 58,436.

CURRENT 0 00
LIABILITIES

CURRENT
LIABILITIES

Short Term 9,082.30 4,498.90 11,892.00 25,140.50 8,068.0

Borrowings 0

Trade Payables 25,164.40 22,295.00 19,247.80 19,124.50 17,699.

00

Other Current 19,348.20 24,488.90 21,312.40 16,327.40 17,747.

Liabilities 20

Short Term Provisions 20,889.30 20,156.60 40,759.00 108.80 126.20

TOTAL CURRENT 74,484.20 71,439.40 93,211.20 60,701.20 43,640.

LIABILITIES 40

TOTAL CAPITAL 284,854.50 277,747.1 300,372.80 222,907.50 204,93

AND LIABILITIES 0 7.30

27
ASSETS

NON-CURRENT
ASSETS

Tangible Assets 91,983.80 90,404.50 89,331.40 57,009.90 47,691.

10

Intangible Assets 77,938.10 66,983.90 72,347.90 76,802.00 74,918.

30

Capital Work-In- 1,071.50 1,283.10 1,233.20 5,366.20 2,738.7

Progress 0

Other Assets 0.00 0.00 0.00 0.00 0.00

FIXED ASSETS 172,664.20 158,694.7 162,938.00 139,448.40 128,15

0 2.10

Non-Current 49,153.10 48,528.70 30,051.80 35,910.20 48,128.

Investments 20

Deferred Tax Assets 16,448.60 15,838.60 22,701.40 4,980.30 1,424.4

[Net] 0

Long Term Loans And 0.00 576.40 18,725.20 15,103.20 1,029.0

Advances 0

Other Non-Current 8,770.80 14,036.80 7,175.10 7,950.50 4,707.7

Assets 0

TOTAL NON- 247,036.70 237,675.2 241,591.50 203,392.60 183,44

CURRENT ASSETS 0 1.40

CURRENT ASSETS

28
Current Investments 790.40 3,744.30 8,675.00 1,669.60 0.00

Inventories 0.40 0.80 3.10 1.00 6.30

Trade Receivables 2,539.00 3,178.20 3,810.00 3,840.30 4,319.6

0

Cash And Cash 328.50 1,036.50 3,397.60 235.30 545.10

Equivalents

Short Term Loans And 4,971.00 1,566.90 758.00 1,081.50 7,249.6

Advances 0

Other Current Assets 29,188.50 30,545.20 42,137.60 12,687.20 9,375.3

0

TOTAL CURRENT 37,817.80 40,071.90 58,781.30 19,514.90 21,495.

ASSETS 90

TOTAL ASSETS 284,854.50 277,747.1 300,372.80 222,907.50 204,93

0 7.30

OTHER
ADDITIONAL
INFORMATION

CONTINGENT
LIABILITIES,
COMMITMENTS

Contingent Liabilities 18,344.10 27,558.80 12,840.40 19,352.70 31,187.

00

CIF VALUE OF
IMPORTS

29
Raw Materials 0.00 0.00 0.00 0.00 0.00

Stores, Spares And 0.00 0.00 0.00 0.00 0.00

Loose Tools

Trade/Other Goods 0.00 0.00 0.00 0.00 0.00

Capital Goods 0.00 0.00 0.00 0.00 0.00

EXPENDITURE IN
FOREIGN
EXCHANGE

Expenditure In 8,612.20 10,767.70 11,969.40 22,677.50 19,654.

Foreign Currency 00

REMITTANCES IN
FOREIGN
CURRENCIES FOR
DIVIDENDS

Dividend Remittance -- -- -- -- --
In Foreign Currency

EARNINGS IN
FOREIGN
EXCHANGE

FOB Value Of Goods -- -- -- -- --

Other Earnings 2,947.90 4,897.00 4,506.00 4,592.90 4,508.8

0

BONUS DETAILS

30
Bonus Equity Share 1,566.39 1,566.39 1,566.39 1,566.39 1,566.3
Capital 9

NON-CURRENT
INVESTMENTS

Non-Current 14,920.70 18,956.30 -- -- --

Investments Quoted
Market Value

Non-Current 31,737.20 20,198.10 5.20 6.30 6.30

Investments Unquoted
Book Value

CURRENT
INVESTMENTS

Current Investments 790.40 -- -- -- --

Quoted Market Value

Current Investments -- -- 26.40 -- --

Unquoted Book Value

TABLE NO.2

3.2 Income Statement

Profit & Loss Account Rs. (in Crores)

Particulars Mar'22 Mar'21 Mar'20 Mar'19 Mar'18

INCOME:

Sales Turnover 70641.90 64325.90 54317.10 49606.00 53663.00

Excise Duty .00 .00 .00 .00 .00

31
NET SALES 70641.90 64325.90 54317.10 49606.00 53663.00

Other Income 1422.8000 2387.9000 2242.5000 2632.7000 235.6000

TOTAL INCOME 72064.70 66713.80 56559.60 52238.70 53898.60

EXPENDITURE:

Manufacturing Expenses 28662.50 21910.40 27958.30 29321.40 27408.60

Material Consumed .00 .00 .00 .00 .00

Personal Expenses 1594.00 1664.50 1520.20 1471.00 1720.90

Selling Expenses 513.30 485.60 479.10 537.40 578.70

Administrative Expenses 4781.30 12281.30 4225.90 5989.80 6149.90

Expenses Capitalized .00 .00 .00 .00 .00

Provisions Made .00 .00 .00 .00 .00

TOTAL EXPENDITURE 35551.10 36341.80 34183.50 37319.60 35858.10

Operating Profit 35090.80 27984.10 20133.60 12286.40 17804.90

EBITDA 36513.60 30372.00 22376.10 14919.10 18040.50

Depreciation 24592.40 21997.50 20392.10 15120.20 13048.60

Other Write-offs .00 .00 .00 .00 .00

EBIT 11921.20 8374.50 1984.00 -201.10 4991.90

Interest 14145.80 11816.70 11463.10 7847.70 5069.00

EBT -2224.60 -3442.20 -9479.10 -8048.80 -77.10

32
Taxes -609.20 6732.40 -14932.70 -3374.70 -760.40

Profit and Loss for the Year -1615.40 -10174.60 5453.60 -4674.10 683.30

Non Recurring Items -2012.10 -15022.80 -41548.80 2814.50 -598.40

Other Non-Cash Adjustments .00 .00 .00 .00 .00

Other Adjustments 2.50 -.20 7.00 -9.60 -5.70

REPORTED PAT -3625.00 -25197.60 -36088.20 -1869.20 79.20

KEY ITEMS

Preference Dividend .00 .00 .00 .00 .00

Equity Dividend .00 1091.10 .00 1998.80 463.60

Equity Dividend (%) .00 39.73 .00 100.00 23.20

Shares in Issue (Lakhs) 58843.15 54920.27 54555.57 39974.00 39974.00

EPS - Annualized (Rs. -6.16 -45.88 -66.15 -4.68 .20

TABLE NO. 3

3.3 Ratio Analysis

3.31 Liquidity Ratios

➢ Current Ratio:
Current Ratio = Current Assets / Current Liabilities

Year 2022 2021 2020 2019 2018

Current
Assets 37817.20 40071.90 58781.30 19514.90 21495.90

33
 Current
Liabilities 74484.20 71439.40 93211.20 60701.20 43640.40
Current
Ratio 0.50 0.56 0.63 0.32 0.5
Table No. 4

The current ratio of Bharti Airtel was 0.5 in 2018 and it decreased to 0.3 in 2019 and in 2020,
2021 and 2022 it shows a slight increase between 0.5 and 0.6. All those five years current ratio
of the company is not satisfactory it is below the rule of thumb that is 2:1.

➢ Quick Ratio:
Quick asset/ Current Liability
(Quick Asset = Current Asset-Inventory)
Year 2022 2021 2020 2019 2018
Quick Assets
37817.40 40071.10 58778.2 19513.9 21489.6
Current
Liabilities 74484.20 71439.40 93211.20 60701.20 43640.40

Quick Ratio 0.50 0.56 0.63 0.32 0.49

Table No. 5
➢ Working Capital:
Working Capital= Current Assets- Current Liabilities

Year 2022 2021 2020 2019 2018

Current
Assets 37817.20 40071.90 58781.30 19514.90 21495.90
Current
Liabilities 74484.20 71439.40 93211.20 60701.20 43640.40
Working
Capital -36667 -31367.5 34429.9 -41186.3 -22144.5
Table No. 6

It is very clear from the above calculations that the working capital of the company is not
increasing, so the company’s liquidity position is not good. Airtel current liability is more than
its current assets. This results in negative working capital over the years.

34
3.32 Solvency Ratios

➢ Debt Ratio:
Debt Ratio =Total Debt/ Total Assets

Year 2022 2021 2020 2019 2018

Total Debt 205924.7 200387 198943.6 124601.6 102076.4
Total
Assets 284,854.50 277,747.10 300,372.80 222,907.50 204,937.30
Debt Ratio 0.72 0.72 0.66 0.55 0.49
Table No.7

Calculating the debt ratio, we came to see that the company is highly leveraged one.

➢ Debt to Equity Ratio:

Debt to Equity Ratio = Debt/ Shareholder’s Equity

Year 2022 2021 2020 2019 2018

Debt 205924.7 200387 198943.6 124601.6 102076.4
Shareholder’s
Equity 78929.8 79360.1 101075 98305.9 102860.9
Debt to
Equity Ratio 2.60 2.52 1.96 1.26 0.99
Table No. 8

The debt equity ratio of Airtel in 2018 was 0.99 which increased to 2.60 in 2022. It shows the
company is using advantages of having debt.

➢ Current Worth to Net Worth Ratio= Current Worth/ Net worth Ratio
We can calculate current worth and net worth by using following formulas:

Current Worth= Total Current Assets- Total Current Liabilities

Net Worth= Total Assets- Total Liabilities

Year 2022 2021 2020 2019 2018

Current
Worth -36667.2 -31367.5 -34429.9 -41186.3 -22144.5

35
 Net worth
78929.80 77360.1 101429.4 98305.9 102860.9
CW/NW
ratio -0.46 -0.40 -0.33 -0.41 -0.21

Table No. 9

The current worth of the company shows a negative pattern over the years which results in
negative current to net worth ration. In 2018 it was -0.21 and -0.46 in 2022.

➢ Total Capitalization Ratio:

The capitalization ratio measures the debt component of a company’s capital structure, or
capitalization to support a company’s operations and growth. Long term debt is divided by the
sum of long term debt and shareholder’s equity. This ratio is considered to be one of the more
meaningful of the “debt” ratios- it delivers the key insight into a company’s use of leverage.

Total Capitalization Ratio= Long term debt/ Long term debt+ Shareholder’s equity

Year 2022 2021 2020 2019 2018

Long Term
Debt 131440.5 128947.6 105732.4 6390040 5843600
Long Term
Debt + 210370.3 208307.4 206807.4 6488345.9 5946460.9
Shareholder’s
equity
Total 0.62 0.61 0.51 0.98 0.98
Capitalization
Ration
Table No.10

Total capitalization ratio was 0.98 in 2018 which decreased to 0.51 in 2020 and then
shows a slight increase in 2022, 0.62. Here low debt and high equity indicates good
quality of investment.

➢ Time Interest Earned:

36
TIE Ratio= EBIT/ Interest Charges

Year 2022 2021 2020 2019 2018

EBIT 11921.20 8374.50 1984.00 -201.10 4991.90

Interest
Charges 14145.80 11816.70 11463.10 7847.70 5069.00

TIE Ratio 0.84 0.70 0.17 0.025 0.98

Table No. 11

We can see from this ratio analysis that, this company has covered their interest expenses 0.98
times in 2018, 0.025 times in 2019, 0.17 times in 2020, 0.70 times in 2021 and 0.84 times in
2022, it means they have performed different in every year. As in 2022 they issued a high
number of long term loans and their EBIT became high thus making TIE a little high as well.

3.33 Profitability Ratios

➢ Net Profit Margin

Net Profit Margin= Net Profit/ Sales * 100

Year 2022 2021 2020 2019 2018

Net Profit -1615 -10174.10 5453.60 -4674.10 683.30

Sales 70641.90 64325.90 54317.10 49606.00 53663.00

Net Profit
Margin -2.28 -15.81 10.04 -9.42 1.27
Table No. 12

From the above table it can be seen that the net profit of the year 2019 and 2021-22 was negative
because the company incurred losses. The profit of the company in the year 2020 and 2018
was 10.04% and 1.27% respectively. The decrease in the amount in these year was due to
increase in expenses, high finance cost and high amount of loan.

37
 ➢ Operating Profit Margin
Operating Profit= Operating Profit *100 / Net Sales

Year 2022 2021 2020 2019 2018

Operating
Profit 35090.80 27984.10 20133.60 12286.40 17804.90
Sales
70641.90 64325.90 54317.10 49606.00 53663.00
Operating
Profit 49.67 43.50 37.066 24.76 33.17
Margin
Table No.13

Operating profit margin shows actual performance of the company and evaluation of the
business is done by it. The table shows the operating profit ratio of Airtel from the period of
2018 to 2022. This table indicates the trend of operating profit ratios increasing from 33.17%
in 2018 to 49.67% in 2022. The reason of increasing operating profit margin can be decrease
in operating expenses of the company.

➢ Return on Assets
Return on Assets (ROA) = Profit after Tax/ Total Assets * 100

Year 2022 2021 2020 2019 2018

Net Profit -1615 -10174.10 5453.60 -4674.10 683.30

Total Assets 284,854.50 277,747.10 300,372.80 222,907.50 204,937.30

Return on -0.56 -3.66 1.81 -2.09 0.33

Asset
Table No. 14

The table above depicting the data regarding net profit to total assets of Airtel, which were
working in India during the period of 2018 to 2022. In 2020 net profit was the highest as
compared to the other years. But after 2020 it started decreasing. In 2021, it decreased by

38
156.2%. In 2022 return on asset was -6.28% which was negative due to loss incurred by the
company.

➢ Return on Net Worth

Return on Net Worth= Profit after Tax/ Net Worth * 100

Year 2022 2021 2020 2019 2018

Net Profit -1615 -10174.10 5453.60 -4674.10 683.30

Net Worth 78929.80 77360.1 101429.4 98305.9 102860.9

Return on -2.04 -13.15 5.37 -4.75 0.66

Net Worth
Table No. 15

The table above showing returns on net worth of Airtel for the last five years. It is evident that
in the year 2018 it was 0.66% which means the company earning 0.66% on its shareholders
but it decreases suddenly to -4.75% in 2019. This is because of the increase in shareholders
fund was more than increase in net profit. Again it 2020 it started increasing to 5.37% due to
increase in net profit and shareholders fund. In 2021 and 2022 it was -13.15% and -2.04%
which is negative due to negative profit of the company.

3.34 Activity Ratios

➢ Asset Turnover Ratio

Total Asset turnover = Total Sales/ Total Assets

Year 2022 2021 2020 2019 2018

Sales 70641.90 64325.90 54317.10 49606.00 53663.00

Assets 284,854.50 277,747.10 300,372.80 222,907.50 204,937.30

Total Assets
Turnover 0.24 0.23 0.18 0.22 0.26
Table No. 16

39
Assets turnover ratio has been decreased all the years. It was 0.26% in 2018 and it reduced to
0.24% in 2022.

➢ Working Capital Turnover Ratio:

Working Capital Turnover Ratio = Revenue from Operations/ Working Capital

Year 2022 2021 2020 2019 2018

Revenue
from
Operations 70641.90 64325.90 54317.10 49606.00 53663.00
Working
Capital
-36667 -31367.5 34429.9 -41186.3 -22144.5
Working
Capital -1.92 -2.05 1.57 -1.20 -2.42
Turnover
Ratio
Table No. 17

As we can see from above calculate working capital turnover ratio of company is not good as
it continuously declining but only in 2020 with 1.57 it gives a slight rise but again decreased
in 2021 and 2022.

3.35 Market Ratios

➢ Earnings per Share- EPS

Earnings per share = Profit after tax/ Number of shares outstanding

Year 2022 2021 2020 2019 2018

Net Profit -1615 -10174.10 5453.60 -4674.10 683.30

No. of share 58.84 54.92 54.55 39.97 39.97

EPS -6.16 -45.88 -66.15 -4.68 0.20

40
 Table No. 18

From the above table it can be seen that earning per share of the company showing decreasing
trend. In the year 2018 the ratio was highest that is 0.20 but in 2019 it decreased to -4.68
because of decrease in net profit. Then again decreased to -66.15 in 2020, -45.88 in 2021 and
slightly increased to -6.16 in 2020 because of the negative profit.

➢ Price / Earnings Ratio:

Price/Earnings Ratio = Stock Price per Share/ Earnings per Shares

Year 2022 2021 2020 2019 2018

Market price
per share 709.05 709.05 709.05 709.05 709.05

EPS -6.16 -45.88 -66.15 -4.68 0.20

P/E Ratio -115.10 -15.46 -10.71 -151.50 3545.25

Table No.19

The P/E ratio has decreased drastically from 3545.25 in 2018 to -115.10 in 2022. As the firm
has negative earnings hence, this ratio is not meaningful.

➢ Dividend Payout Ratio

Year 2022 2021 2020 2019 2018
Dividend Per
equity share .00 39.73 .00 100.00 23.20

EPS -6.16 -45.88 -66.15 -4.68 .20

Dividend Pay
Out Ratio .00 -0.87 .00 -21.36 116
Table No. 20

41
 3.4 Comparative Statement Analysis

3.41 Comparative Balance Sheet

Particulars 2022 2021 Absolute Percentage

change Change
(%)

Fixed Assets 172,664.20 158,694.70 13969.5 8.09%

Current Assets 37,817.80 40,071.90 -2254.1 -5.96%

Current Liabilities 74,484.20 71,439.40 3044.8 4.08%

Capital Employed 210361.3 206307.7 4053.6 1.92%

Long Term Debt 131,440.50 128,947.60 2492.9 1.89%

Share Capital 2,795.00 2,746.00 49 1.75%

Reserve and Surplus 76,134.80 74,614.10 1520.7 1.99%

Shareholder’s Funds 78,929.80 77,360.10 1569.7 1.98%

Table No. 21

Interpretation:
The comparative balance sheet of the company reveals that during 2022 there has been increase
in fixed assets of 13969.5 i.e. 8.09%. Long term liabilities to outsiders have relatively increased
by Rs.2492.9 and shareholder’s funds has increased by Rs.1569.7. This fact indicates that the
policy of the company is to purchase fixed assets from the long- term sources of finance.
The current assets have decreased by -2254.1 i.e.-5.96%. The current liabilities have increased
by 3044.8 i.e. 4.08%. This further confirms that the company working capital position is not
good as its working capital comes in negative figures.

42
Reserve and surplus has been increased by 1.99% which can say that increase in retained
earnings could be a sign of increased dividends in the future, which may help the company to
increase its share price.

3.42 Comparative Income Statement

Particulars 2022 2021 Absolute Percentage
change Change
(%)
A) Income
Sales 70641.60 64325.90 6315.7 8.94%
Other Income 1422.8000 2387.9000 -965.1 -67.83%
Total Income 72064.70 66713.80 5350.9 7.42%

B) Expenses
Manufacturing 28662.50 21910.40 6752.1 23.55%
Expenses
Personal 1594.00 1664.50 -70.5 -4.422%
Expenses
Selling Expenses 513.30 485.60 27.7 5.39%
Administrative 4781.30 12281.30 -7500 -156.86%
Expenses
Total Expenses 35551.10 36341.80 -790.7 -2.22%

C) EBITDA 36513.60 30372.00 6141.6 16.82%

Depreciation 24592.40 21997.50 2594.9 10.55%
EBIT 11921.20 8374.50 3546.7 29.75%
Interest 14145.80 11816.70 2329.1 16.46%
EBT -2224.60 -3442.20 -1217.6 -54.73%
Taxes -609.20 6732.40 -7341.6 1205.12%

D) Net -1615.40 -10174.60 -8523.2 -5.276%

Profit
Table No.22

43
Interpretation:

The comparative income statement reveals that there has been decreases in total income of the
company by Rs.5350.9 i.e. 7.42%, although operating expenses have decreased merely by Rs.-
790.7 which is not good. While the net profit increased by Rs.-8523.2, the company needs to
reasons for negative profit and should take corrective actions.

3.5 Common Size Statement Analysis

3.51 Common Size Balance Sheet

Particulars Note no. Absolute Amount Percentage of Balance

Sheet Total (%)
2022 2021 2022 2021
I. EQUITY AND
LIABILITES
1)Shareholder’s
Funds
a) Share
capital 2795 2746 1.65% 1.14%
b) Reserves
and Surplus 76134.80 74614.10 45.03% 31.22%
2)Non-Current
Liabilities
a) Long term
borrowings 94325.80 89908.80 55.80% 37.62%
b) Long term
provisions 230.40 220.50 0.13% 0.092%
3) Current
Liabilities
a) Short term 9082.30 4498.90 5.37% 1.88%
borrowings
b) Trade 25164.40 22295.00 14.88% 9.33%
Payables

44
 c) Other 19348.20 24488.90 11.44 10.24
Current
Liabilities
d) Short Term 20889.30 20156.60 12.35 8.43
Provision
Total 169040.4 238928.8 100% 100%

II. ASSETS
1.Non-Current
Assets
a) Fixed Assets
i. Tangible
Assets 91983.80 90404.50 35.89 36.57
ii. Intangible
Assets 77938.10 66983.90 30.41 27.09
b) Non-Current
Investment 48528.70 49153.10 18.93 19.88
c) Long term loans
& advances 00 576.40 00 0.23
2.Current Assets
a) Current 790.40 3744.30 0.30 1.15
Investment
b) Inventories 0.40 0.80 0.0001 0.00032
c) Trade
Payables 2539.00 3178.20 0.99 1.28
d) Cash &
Cash 328.50 1036.50 0.12 0.41
Equivalents
e) Short term
loans & 4971.00 1566.90 1.93 0.63
advances

45
 f) Other
Current 29188.50 30545.20 11.38 12.35
Assets
Total 256268.8 247189.8 100% 100%
Table No. 23

Interpretation:

Common Size balance sheet shows that shareholder’s fund has been increased from 32.36% to
46.68% and total current liability has been increased from 29.88% to 44.04% which shows the
company has not paid some of its non-current liability.

Total current liability has been decreased from 20.11% to 18.93% and its current assets has
been decreased from 15.82% to 14.82% which shows the company has not much improve its
liquidity position.

3.52 Common Size Income Statement

Particulars Note Absolute Amount Percentage from Revenue

No. from Operation (%)

2022 2021 2022 2021

1)Revenue from
Operation 100.00 100.00
70641.90 64325.90
2)Other Income 98.02 96.42
1422.8000 2387.9000

3)Total Revenue 72064.7 66713.8 198.02 196.42

4) Expenses
Cost of Material 0.00 0.00 0.00 0.00
Consumed
Depreciation $
Amortization 24592.40 21997.50 34.81 34.19
Expense
Other Expenses 35551.10 36341.8 50.32 56.49
Total Expenses 60143.5 58339.3 85.13 90.68

46
5)Profit before 11921.2 8374.5 112.89 105.74
Tax
6)Less: Tax -609.20 6732.40 -0.86 10.46
7)Profit After Tax -12530.4 1642.1 113.75 95.28
TABLE NO. 24

47
 Chapter-4

4.1 Summary & Conclusions

The chapter is analytical in nature. This chapter gives a comprehensive summary of the
findings, suggestions for the improvement in Airtel’s performance and conclusion. The
analysis reveals the important facts about Airtel’s financial, profitability performance. The
calculation in liquidity, profitability and solvency position of Airtel is analyzed here.

4.11Summary

Financial Statement Analysis is a method used by interested parties such as investors, creditors,
and management to evaluate the past, current, and projected conditions and performance of the
firm. This report mainly deals with the insight information of Bharti Airtel Limited. In the
current picture where financial volatility is endemic and telecom industry is becoming popular,
when it comes to investing, the sound analysis of financial statements is one of the most
important elements in the fundamental analysis process.

It is required by law that all private and public limited companies must prepare the financial
statements like income statement, balance sheet and cash flow statement of the particular
accounting period. The management and financial analyst of the company analyze the financial
statement for making further financial and administrative decisions of betterment of the
company.

4.12 Findings

Analysis and interpretation of financial statements is an important tool in assessing company’s

performance. It reveals the strengths and weaknesses of a firm. It helps the clients to decide in
which firm the risk is less or in which one they should invest so that maximum benefit can be
earned. It is known that investing in any company involves a lot of risk. So before putting up
money in any company one must have thorough knowledge about its past records and
performance. Based on the data available the trend of the company can be predicted in near
future. This project of financial analysis & interpretation in the production concern is not
merely a work of the project but a brief knowledge and experience of that how to analyze the
financial performance of the firm. The study undertaken has brought in to the light of the
following conclusions. According to this project I came to know that from the analysis of
financial statements it is clear that Airtel have been incurring losses during 2022. So the firm

48
should focus on getting of profits in the comings coming years by taking internal as well as
external factors and with regard to resources, the firm is take utilization of the assets properly.
And also the firm has maintained low inventory.

This project mainly focuses on the basics of different types of financial statements. Balance
Sheet and Profit & Loss Statements of Airtel have been studied. From ratio analysis of Balance
Sheet and P & L statements of Airtel of 2018- 2022 it was concluded that liquidity position of
the company is good.

4.13 Limitations of the study

• The study is based on secondary data collected from websites

• The information is accessible on company’s websites.
• Very limited researches have been done due to the availability of data is limited

4.14 Suggestions

As from the analysis we come up with following suggestions :-

• The firm has very low current ratio, so it should increase its current asset as compared
to its current liability where it can meet its short term obligation smoothly.
• As the low values for the liquidity ratios indicates that a firm may have difficulty in
meeting current obligations. Thus it is better for them to increase their liquidity ratio by
using long term financing rather than cash on hand to acquire inventory or selling
unnecessary assets.
• A profitability ratio is a measure of profitability, which is a way to measure a company’s
performance. Profitability is simply the capacity to make a profit. The firms can
improve their profit by improving customers demand and minimizing costs help
increase in profitability ratios.
• The companies can make solvency ratios more secure either by paying off debt or
increasing the amount of earnings retained in the business until after balance sheet. As
the higher ratio indicates a possible overuse of leverage it may indicate potential
problems meeting the debt payments.
• The companies can increase Market Share Ratio through innovation, strengthening
customer relationships, smart hiring practices and acquiring competitors.
• The company should maintain its debt position
• Sales should be increased without addition of fixed assets.

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4.14 Conclusion

The study reveals that the financial performance is not so good. It should further can improve
if the company concentrates on its operating, administrative and selling expenses and by
reducing expenses. And it should improve its service quality to gain some new customers.

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 References/Bibliography

❖ https://en.wikipedia.org/wiki/Bharti_Airtel
❖ https://www.wsj.com/market-data/quotes/IN/532454/financials/annual/income-
statement
❖ http://www.eijfmr.com/2017/sep_2017/Sep-2017-05.pdf
❖ https://www.equitymaster.com/research-it/annual-results-analysis/BTVL/BHARTI-
AIRTEL-2020-21-Annual-Report-
Analysis/1164#:~:text=BHARTI%20AIRTEL%20Income%20Statement%20Analysis
&text=Operating%20profit%20margins%20witnessed%20a,year%20declined%20by
%2028.1%25%20YoY.
❖ http://publications.anveshanaindia.com/wp-content/uploads/2016/10/LIQUIDITY-
PROFITABILITY-PERFORMANCE-ANALYSIS-OF-SELECTED-TELECOM-
COMPANIES-1.pdf
❖ http://www.infokara.com/gallery/23-dec-3294.pdf

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