DSML A 6 Muhammad Rashid Nawaz (HM)

DSML(A)
Muhammad Rashid Nawaz F2019314012
Using Accounting Analystics to Make an Investment

Decision
Group No:
Sr. Name Roll Number Effort Signature Marks
Muhmmad Rashid Nawaz F2019314012
Marks Allotment
Sr Criteria Marks Marks
1 Timely Submission Date of Submission (Days) 15
2 Complete Submission (No. of Incomplete Pages) 15
Ratio Analysis 5
Ratio Comparision 5
Beneish M Score 5
Benford Law 3
Instructions 2
3 Correct Submission (Final) (Random x pages) 20
4 Printing Quality Instructions fulfilled 20
Print Tiles
Formula Sheets
Header
Footer
Cover Page
Spell Check
5 One Page Writeup Questions Answered 20
5 Originality(Final) (Random x pages) 10

Total Marks 100
Cover Page 639869560.xlsx 180

DSMAL(A)
Muhammad Rashid Nawaz F2019314012
Using Accounting Analystics to Make an Investment Decision

Section Name
1 The Case
2 Case Data
Exhibit 1: TCS Consolidated Income Statement (INR Million)
Exhibit 2: TCS Consolidated Balance Sheet (INR Million)
Exhibit 3: TCS Consolidated Cashflow Statement (INR Million)
Exhibit 7: INFOSYS Consolidated Income Statement (INR Million)
Exhibit 8: INFOSYS Consolidated Balance Sheet (INR Million)
3 Ratio Analysis
4 Ratio Comparision
5 Beneish M Score
6 Benford Law
7 Instructions
8 Cover Page
Index 639869560.xlsx 180

Contemporary Issues in Fintech Prepared by: Muhammad Mobeen Ajmal Lecturer
Notes:
1) If plagiarism is found then two submission will get zero marks. One of the person doing the
plagiarism and the other of the person facilitating plagiarism.
2) If a book is lost, you will not get marks for previous timely submissions.
3) Please attach the attachments in order so that I do not miss any of your attachment. Name the
attachment from the names given in the above list.
4) If four or more people have the same attachment, the attachments mark will be halved. I
don’t care how the attachment reached other people when you found it and only shared it with one
of your friends.
5) Select a different Balance Sheet for each attachment task. Thus, to get all six Balance Sheet
associated Marks, you should have Balance Sheet of three companies.
6) Select a different Balance Sheet for each attachment task. Thus, to get all six Balance Sheet
associated Marks, you should have Balance Sheet of three companies.
7) The homework will only be checked in the first fifteen minutes from the start of the class.
8) For those who submit the work late, you will not only loose the timely submission marks but
also get 70% of the correctness marks and 70% of completeness marks to be fair with those who
solved and submitted before I shared the solution. I will share the solution in each class.
9) For homework, an incomplete page is a page in which a question is unanswered. All the tasks
with missing information must be answered. If you don’t understand the question, ask and write
clear "??" on the question.
639869560.xlsx 3 of
Case: Using Accounting Analytics to Make an Investment Decision
639869560.xlsx 4 of
639869560.xlsx 5 of
639869560.xlsx 6 of
639869560.xlsx 7 of
639869560.xlsx 8 of
639869560.xlsx 9 of
639869560.xlsx 10 of
639869560.xlsx 11 of
639869560.xlsx 12 of
639869560.xlsx 13 of
639869560.xlsx 14 of
639869560.xlsx 15 of
639869560.xlsx 16 of
639869560.xlsx 17 of
639869560.xlsx 18 of
639869560.xlsx 19 of
639869560.xlsx 20 of
639869560.xlsx 21 of
639869560.xlsx 22 of
639869560.xlsx 23 of
639869560.xlsx 24 of
639869560.xlsx 25 of
639869560.xlsx 26 of
639869560.xlsx 27 of
639869560.xlsx 28 of
639869560.xlsx 29 of
639869560.xlsx 30 of
639869560.xlsx 31 of
639869560.xlsx 32 of
639869560.xlsx 33 of
639869560.xlsx 34 of
639869560.xlsx 35 of
639869560.xlsx 36 of
639869560.xlsx 37 of
639869560.xlsx 38 of
639869560.xlsx 39 of
639869560.xlsx 40 of
639869560.xlsx 41 of
639869560.xlsx 42 of
639869560.xlsx 43 of
639869560.xlsx 44 of
639869560.xlsx 45 of
639869560.xlsx 46 of
639869560.xlsx 47 of
639869560.xlsx 48 of
639869560.xlsx 49 of
639869560.xlsx 50 of
639869560.xlsx 51 of
639869560.xlsx 52 of
639869560.xlsx 53 of
639869560.xlsx 54 of
639869560.xlsx 55 of
639869560.xlsx 56 of
639869560.xlsx 57 of
639869560.xlsx 58 of
639869560.xlsx 59 of
639869560.xlsx 60 of
639869560.xlsx 61 of
639869560.xlsx 62 of
639869560.xlsx 63 of
639869560.xlsx 64 of
639869560.xlsx 65 of
639869560.xlsx 66 of
639869560.xlsx 67 of
639869560.xlsx 68 of
639869560.xlsx 69 of
639869560.xlsx 70 of
639869560.xlsx 71 of
544444444
7
639869560.xlsx 72 of
639869560.xlsx 73 of
639869560.xlsx 74 of
639869560.xlsx 75 of
639869560.xlsx 76 of
639869560.xlsx 77 of
639869560.xlsx 78 of
639869560.xlsx 79 of
639869560.xlsx 80 of
639869560.xlsx 81 of
639869560.xlsx 82 of
639869560.xlsx 83 of
639869560.xlsx 84 of
639869560.xlsx 85 of
639869560.xlsx 86 of
639869560.xlsx 87 of
639869560.xlsx 88 of
639869560.xlsx 89 of
639869560.xlsx 90 of
639869560.xlsx 91 of
639869560.xlsx 92 of
639869560.xlsx 93 of
639869560.xlsx 94 of
639869560.xlsx 95 of
639869560.xlsx 96 of
639869560.xlsx 97 of
639869560.xlsx 98 of
639869560.xlsx 99 of
639869560.xlsx 100 of
639869560.xlsx 101 of
639869560.xlsx 102 of
639869560.xlsx 103 of
639869560.xlsx 104 of
639869560.xlsx 105 of
639869560.xlsx 106 of
639869560.xlsx 107 of
639869560.xlsx 108 of
639869560.xlsx 109 of
639869560.xlsx 110 of
639869560.xlsx 111 of
639869560.xlsx 112 of
639869560.xlsx 113 of
639869560.xlsx 114 of
639869560.xlsx 115 of
639869560.xlsx 116 of
639869560.xlsx 117 of
639869560.xlsx 118 of
639869560.xlsx 119 of
639869560.xlsx 120 of
639869560.xlsx 121 of
639869560.xlsx 122 of
639869560.xlsx 123 of
639869560.xlsx 124 of
639869560.xlsx 125 of
639869560.xlsx 126 of
639869560.xlsx 127 of
639869560.xlsx 128 of
639869560.xlsx 129 of
639869560.xlsx 130 of
639869560.xlsx 131 of
639869560.xlsx 132 of
639869560.xlsx 133 of
639869560.xlsx 134 of
639869560.xlsx 135 of
639869560.xlsx 136 of
639869560.xlsx 137 of
639869560.xlsx 138 of
639869560.xlsx 139 of
639869560.xlsx 140 of
639869560.xlsx 141 of
639869560.xlsx 142 of
Exhibit 1: TCS Consolidated Income Statement (INR Million)
Income Statement
Income Statement FY 10-11 FY 11-12
Revenue from operations 488,938.30
Other income 4,281.70
Information technology and consultancy services 360,461.30
Sale of equipment and software licences 12,783.80
Other income (net) 6,040.00
EXPENDITURE
Employee costs 137,261.00 185,718.80
Operation and other expenses 124,200.50 158,866.40
Interest 264.80 222.30
Depreciation and amortization 7,352.60 9,179.40
PROFIT BEFORE TAXES 110,206.20 139,233.10
PROVISION FOR TAXES
(a) Current tax 20,659.50 38,860.90
(b) Deferred tax expense/(benefit) 171.50 (313.00)
(c) Fringe benefit tax (0.30) 1.30
(d) MAT FOR
PROFIT creditTHE
entitlement
YEAR BEFORE MINORITY (2,522.40) (4,550.60)
INTEREST AND SHARE of loss of associates 91,897.90 105,234.50
Minority interest 1,214.50 1,099.60
Share of loss of associates 3.00 -
NET PROFIT FOR THE YEAR 90,680.40 104,134.90
Exhibit 2: TCS Consolidated Balance Sheet (INR Million)

Consolidated Balance Sheet
SOURCES OF FUNDS: FY 10-11 FY 11-12
SHAREHOLDERS’ FUNDS
(a) Share Capital 2,957 2,957
(b) Reserves and Surplus 242,091 292,835
MINORITY INTEREST 4,582 5,588
LOAN FUNDS
(a) Secured Loans 384 1,154
(b) Unsecured Loans 364
DEFERRED TAX LIABILITIES (NET) 1,095 1,734
Other long term liabilities 2,850
Long term provisions 2,177
Current Liabilities
Short term borrowings 9
Trade payables 32,479
Other current liabilities 24,222
Short term provisions 47,941
Total 413,945
TOTAL FUNDS EMPLOYED 251,473
APPLICATION OF FUNDS:
FIXED ASSETS
Tangible assets 48,207
Intangible assets 2,979
(a) Gross Block 77,922
(b) Less :- Accumulated Depreciation and Amortisation 35,452
(c) Net Block 42,471
(d) Capital Work-in-Progress 14,692 14,464
GOODWILL (ON CONSOLIDATION) 32,320 35,435
long term loans & advances 45,176
other non-current assets 26,597
INVESTMENTS 17,627 5,777
DEFERRED TAX ASSETS (NET) 1,602 2,560
CURRENT ASSETS, LOANS AND ADVANCES
(a) Interest Accrued on Investments 740 7,727
(b) Inventories 228 178
(c) Unbilled Revenues 13,489 22,478
(d) Sundry Debtors 81,988 115,204
(e) Cash and Bank Balances 73,781 60,035
other non-current assets 4,579
(f) Loans and Advances 48,582 22,552
CURRENT LIABILITIES AND PROVISIONS
(a) Current Liabilities 46,981
(b) Provisions 29,065
NET CURRENT ASSETS 142,762
TOTAL ASSETS (NET) 251,473 413,945
Exhibit 3: TCS Consolidated Cashflow Statement (INR Million)

Cashflow Statement
Cash Flow Statement
FY 2010/11 FY 2011/12
1 CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxes 110,206 139,233
Adjustments for:
Depreciation and amortisation 7,353 9,179
Write back of provision for doubtful debts (257)
Bad debts written off 442
Provision for doubtful debts (1,023)
Provision for doubtful advances 41 74
Provision for diminution in value of investment 6 (11)
Write off / Impairment of goodwill 7 212
Interest expense 265 222
Loss on sale of fixed assets (net) 18 4
Dividend
Profit income
on redemption / sale of mutual fund and other current (160) (64)
investments (net) (819) (318)
Interest income
Exchange difference on translation of foreign currency cash (4,972) (7,652)
and cash equivalents (303) (1,191)
Unrealised exchange (gain) / loss (191) 1,523
Operating profit before working capital changes 110,428 141,397
Inventories (50) 51
Unbilled revenues (1,444) (8,989)
Sundry debtors (22,077) (33,428)
Loans and advances (3,628) (5,615)
Current liabilities and provisions 5,807 13,398
Adjustment of translation differences on working capital 116 3,954
Cash generated from operations 89,151 110,768
Taxes paid (22,770) (40,684)
Net cash provided by operating activities 66,381 70,084
2 CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (18,503) (20,071)
Proceeds from sale of fixed assets 181 197
Adjustment of purchase consideration 273 -
Purchase of trade investments (190)
Proceeds from sale / transfer of long term investments - 173,852
Commercial papers matured 1,500 -
Commercial papers purchased (1,460) -
Purchase of mutual fund and other investments (496,670) (169,380)
Advance towards investment (2)
Sale of mutual funds and other investments 516,877
Inter-corporate deposits placed (2,860) (16,762)
Inter-corporate
Fixed deposit withdeposits
banksmatured
having original maturity over 3,260 9,928
three months placed
Fixed deposit with banks having original maturity over (61,096) (42,516)
three months matured 39,682 35,514
Purchase of of
Acquisition shares from minority
subsidiaries shareholders
net of cash (including additional (66) (2,292)
consideration) 72 -
Sale of subsidiaries -
Dividends received 160 64
Interest received 3,988 4,193
Net cash used in investing activities (14,853) (27,275)
3 CASH FLOWS FROM FINANCING ACTIVITIES
Net short term borrowings - (329)
Proceeds from issue of borrowings 375 -
Repayment of borrowings (619) (13)
Repayment of other borrowings
Dividend paid, including dividend tax (45,844) (38,798)
Dividend tax on dividend paid by subsidiary (83) (114)
Dividend paid to minority shareholders of a subsidiary (160) (171)
Redemption of preference shares
Proceeds from issue of shares to minority shareholders 7 97
Interest paid (265) (224)
Repayment of inter-corporate deposits
Net cash used in financing activities (46,589) (39,551)
Net increase/(decrease) in cash and cash equivalents 4,939 3,258
Cash and cash
Exchange equivalents
difference at beginning
on translation of the currency
of foreign year cash 10,244 15,486
and cash equivalents 303 1,191
Cash and cash equivalents at end of the year 15,486 19,935
Deposits with original maturity over three months 58,034 39,942
Restricted cash 261 158
Cash and bank balance at the end of the year 73,781 60,035
Exhibit 7: INFOSYS Consolidated Income Statement (INR Million)

Income Statement
INCOME Statement 2011.00 2012.00
Revenue from Operations 488938.30
Other Income 4281.70
1 Information Technology and Consultancy Services 360461.30
2 Sale of Equipment and Software Licences 12783.80
Total Revenue 373245.10
3 Other Income (net) 6040.00
EXPENDITURE
4 Employee Costs 137261.00 185718.80
5 Operation and Other Expenses 124200.50 158866.40
6 Interest 264.80 222.30
7 Depreciation and Amortisation 7352.60 9179.40
PROFIT BEFORE TAXES 110206.20 139233.10
8 PROVISION FOR TAXES
(a) Current Tax 20659.50 38860.90
(b) Deferred Tax Expense / (Benefit) 171.50 -313.00
(c) Fringe Benefit Tax -0.30 1.30
(d) MAT Credit Entitlement
PROFIT FOR THE YEAR BEFORE MINORITY -2522.40 -4550.60
INTEREST AND SHARE of loss of associates 91897.90 105234.50
9 Minority Interest 1214.50 1099.60
10 Share of Loss of Associates 3.00 0.00
NET PROFIT FOR THE YEAR 90680.40 104134.90
Effective Tax Rate 0.17 0.24
COGS 268814.10 353764.60
Operating Income 104431.00 139455.40
Operating Income before Depreciation 111783.60 148634.80
Exhibit 8: INFOSYS Consolidated Balance Sheet (INR Million)

Consolidated Balance Sheet
1 SHAREHOLDERS’ FUNDS
(a) Share Capital 2957.20 2957.20
(b) Reserves and Surplus 242090.90 292835.10
Total Equity 245048.10 295792.30
2 MINORITY INTEREST 4581.70 5587.70
3 LOAN FUNDS
(a) Secured Loans 384.40 1153.70
(b) Unsecured Loans 363.60
4 DEFERRED TAX LIABILITIES (NET) 1094.90 1734.45
Other Long-Term Liabilities 2850.10
Total Long-Term Debt 1842.90 5738.25
Long-Term Provisions 2176.50
Current Liabilities
Short-Term Borrowings 8.90
Trade Payables 33544.90 32478.70
Other Current Liabilities 24222.00
Short-Term Provisions 47940.50
Total Current Liabilities 104650.10
Total 286860.50 413944.85
Total Liabilities 118152.55
5 TOTAL FUNDS EMPLOYED 496520.80

6 FIXED ASSETS
Tangible Assets 48207.30
Intangible Assets 2978.70
(a) Gross Block 77922.40
(b) Less :- Accumulated Depreciation and Amortisation 35451.50
(c) Net Block 42470.90
(d) Capital Work-in-Progress 14691.80 14463.70
7 GOODWILL (ON CONSOLIDATION) 32320.00 35434.60
Long Term Loans & Advances 45176.30
Other Non-current Assets 26596.50
8 INVESTMENTS 17626.70 5776.50
9 DEFERRED TAX ASSETS (NET) 1601.80 2560.40
10 CURRENT ASSETS, LOANS, AND ADVANCES
(a) Interest Accrued on Investments 739.70 7726.80
(b) Inventories 228.20 177.70
(c) Unbilled Revenues 13488.50 22477.60
(d) Sundry Debtors 81988.40 115203.50
(e) Cash and Bank Balances 73780.90 60034.70
Other Non-current Assets 4578.70
(f) Loans and Advances 48581.60 22551.90
Total Current Assets 218807.30 232750.90
11 CURRENT LIABILITIES AND PROVISIONS
(a) Current Liabilities 46980.90
(b) Provisions 29064.90
12 NET CURRENT ASSETS 142761.50
13 TOTAL ASSETS (NET) 251472.70 413944.90
ion) Index
FY 12- 13 FY 13-14
629,894.80 818,093.60
11,782.30 16,367.40
240,399.60 298,600.10
209,096.10 267,965.60
484.90 385.20
10,799.20 13,491.50
180,897.30 254,018.60
43,693.00 61,482.60
129.90 (271.40)
3.30 1.30
(3,685.80) (512.60)
140,756.90 193,318.70
1,583.80 1,680.00
- -
139,173.10 191,638.70
R Million)
FY 12- 13 FY 13-14
2,957 1,959
383,500 489,989
6,953 7,080
1,310 1,273
2,355 3,088
3,680 7,431
3,489 3,856
800 1,271
44,478 55,360
30,815 36,212
42,335 63,860
522,672 671,378
59,917 70,348
2,548 2,407
18,954 31,685
35,815 22,688
52,341 72,866
24,546 15,453
9,683 22,753
3,102 4,201
9,290 11,585
212 152
31,601 40,056
140,766 182,304
67,692 144,418
7,992 7,354
58,214 43,108
522,672 671,378
(INR Million)
FY 2012/13 FY 2013/14
180,897 254,019
10,799 13,492
62 (1)
425 (57)
43 910
28 102
(2) -
-
485 385
(2) (46)
(65) (93)
(414) (1,731)
(10,397) (13,400)
167 (437)
6 (685)
182,033 252,458
(34) 59
(9,122) (8,116)
(26,037) (40,158)
(5,781) (2,960)
23,308 16,667
164,368 217,950
(48,218) (70,436)
116,150 147,514
(26,378) (31,262)
53 138
(287,385) (826,134)
282,184 813,266
(35,991) (26,650)
8,478 35,398
(47,210) (127,741)
38,967 57,068
-
(1,626) (4,524)
65 93
7,988 13,677
(60,857) (96,671)
798 84
21 1,177
(34) (12)
(1,400)
(57,032) (54,801)
(125)
(215) (400)
(1,000)
-
(480) (381)
(230) -
(57,295) (56,732)
(2,002) (5,889)
19,935 18,414
481 2,154
18,414 14,679
49,115 129,484
163 256
67,692 144,418
t (INR Million)
2013.00 2014.00
629894.80 818093.60
11782.30 16367.40
240399.60 298600.10
209096.10 267965.60
484.90 385.20
10799.20 13491.50
180897.30 254018.60
43693.00 61482.60
129.90 -271.40
3.30 1.30
-3685.80 -512.60
140756.90 193318.70
1583.80 1680.00
0.00 0.00
139173.10 191638.70
0.22 0.24
460294.90 580057.20
181382.20 254403.80
192181.40 267895.30
INR Million)
2957.20 1958.70
383500.10 489988.90
386457.30 491947.60
6953.10 7079.90
1309.80 1272.60
2354.80 3088.00
3679.90 7430.70
7344.50 11791.30
3489.20 3855.90
800.20 1270.90
44478.10 55360.20
30815.20 36212.40
42334.60 63859.60
118428.10 156703.10
522672.20 671377.80
136214.90 179430.20
59917.10 70348.10
2548.00 2407.40
18953.60 31684.80
35815.00 22687.80
52341.30 72866.20
24546.40 15453.30
9683.00 22752.70
3102.20 4200.60
9290.40 11584.70
211.50 152.10
31600.50 40056.10
140765.60 182304.00
67691.60 144418.40
7992.40 7353.60
58213.60 43108.00
315765.60 428976.90
522672.20 671377.80
TCS Ratios
Ratios FY 2011/12 FY2012/13 FY 2013/14
De-Levered Net
104303 139550 191932
Income
Shareholders's Equity 295792 386457 491948
Average shareholders
270420 341125 439202
Equity
Return on Equity 0.39 0.41 0.44
Average Total Assets 332708.80 468308.55 597025.00
Return on Assets 0.31 0.30 0.32
Financial Leverage 1.23 1.37 1.36
Return on Sales 0.21 0.22 0.23
Asset Turnover 1.47 1.35 1.37
Gross Margin 0.28 0.27 0.29
SG&A as % of Sales 0.32 0.33 0.33
Operating Margin 0.28 0.29 0.31

Interest Expense as %
0.00 0.00 0.00
of Sales
Average Inventory 202.95 194.60 181.80
Inventory Turnover 2409.16 3236.87 4499.96
Average Account
98595.95 127984.55 161534.80
Receivable
Accounts Receivable
4.96 4.92 5.06
Turnover
Average Accounts
32478.70 38478.40 49919.15
Payable
Accounts Payable
10.90 11.98 11.63
Turnover
Fixed Asset Turnover 10.14 11.65 12.56
Days Receivables 73.60 74.16 72.07

TCS Ratios
Ratios FY 2011/12 FY2012/13 FY 2013/14
Days Inventory 0.15 0.11 0.08
Days Payables 33.49 30.48 31.39
Net Trade Cycle 40.27 43.79 40.76
Current Ratio 2.22 2.67 2.74
Quick Ratio 1.67 1.76 2.08

Interest Coverage
667.62 395.33 694.47
Ratio
Debt to Equity 0.40 0.35 0.36
Long-Term Debt to
0.01 0.01 0.02
Equity
Long-Term Debt to
0.01 0.01 0.02
Tangible Assets
Sales Growth #DIV/0! 0.29 0.30

TCS Ratios
Comment on the trend of the ratio
Increasing beacause business is doing good
ROE is also increasing as business is in good position
Business avergae total assets are increasing eventually ROA increases
Company is gaining debt so solvency concern increases
Overall revenue is increaing
TCS in unable to use its assets efficentaly to prduce sales
higher the gross margin, the more capital a company retains
SG&A expenses are in control
Operating margin is increased slightly
Interest exp has no impact on sales
Increasing(Ratio shows how many times a company turned over its

inventory relative to its cost of goods sold ( COGS ) in a given period)
Company is doing good in collecting credit form debtors.
Company is paying A/P timely (increasing)
Company is using its Fixed Assets efficiently

ratio showing the average time to collect cash from a customer after
making credit sale(mixed status)
TCS Ratios
Comment on the trend of the ratio
Company is holding its inventories for more shoter period
average time for a company to pay its bills(decreasing)

This indicates how many dollars are tied up in each day in each category
whether accounts receivable, inventory, or accounts payable.(mixed status)
Company is paying its short term debts efficiently
Company is paying its short term debts efficiently with cash and A/R
Interest coverage ratio is an indicator of company's financial health and
well-being (variable status)
degree to which a company is financing its operations with debt rather than
its own resources( decreasing by time)
ratio measuring the amount of long-term debt compared to

stockholders(slightly increasing)
percentage of assets that a business would need to liquidate to pay off its
long-term debt(slight increase)
Sales growth remaining same

TCS Ratios
Formulas
Delevered Income = Net Income + Interest (1–(Sum Tax /EBT))
Return on Equity = Net Income / Avg. Stockholders' Equity
Return on Assets = De-Levered Net Income / Avg. Total Assets
Financial Leverage = Avg. Total Assets / Avg. Stockholders’ Equity
Return on Sales = De-Levered Net Income / Sales
Asset Turnover = Sales / Avg. Total Assets
Gross Margin = (Sales - Cost of Goods Sold) / Sales
SG&A as a % of Sales = SG&A Expense / Sales
Operating Margin = Operating Income / Sales
Interest Expense as % of Sales = Interest Expense / Sales
Inventory Turnover = Sales/ Average Inventory
Accounts Receivables Turnover = Sales / Avg. Accounts Receivable
Accounts Payable Turnover = Cost of Goods Sold/ Avg. Accounts Payable
Fixed Asset Turnover = Sales / Avg. Net Property, Plant and Equipment
Days Receivables = 365 * (Avg. Accounts Receivable / Sales)

TCS Ratios
Formulas
Days Inventory = 365 / Inventory turnover
Days Payable = 365 / Accounts Payable Turnover
Net Trade Cycle = Days Receivable + Days Inventory – Days Payable
Current Ratio = Current Assets / Current Liabilities
Quick Ratio = (Cash + Accts Rec) / Current Liabilities
Interest Coverage = Operating Income before Depreciation / Interest Expense
Debt to Equity = Total Liabilities / Total Stockholders’ Equity
Long-Term-Debt to Equity = Total Long-Term Debt / Total Stockholders’ Equity
Long-Term Debt to Tangible Assets = Total Long-Term Debt / (Total Assets - Intangible Assets)
Sales Growth = Change in Sales / Prior Year Sales

Ratio TCS Ltd Infosys Ltd
FY 2011/12 FY2012/13 FY 2013/14 FY 2011/12 FY2012/13 FY 2013/14
Delevered Net
105402.52 141134.20 193611.85
Income
Return on Equity 0.39 0.41 0.44 0.27 0.26 0.24
Return on Assets 0.32 0.30 0.32 0.24 0.22 0.21
Return on Sales 0.22 0.22 0.24 0.25 0.23 0.21
Asset Turnover 1.47 1.35 1.37 0.97 0.95 0.97
Gross Margin 0.46 0.46 0.47 0.41 0.37 0.36
Operating Profit
0.28 0.27 0.29 0.29 0.26 0.24
Margins
SG& A as % to
0.18 0.19 0.19 0.12 0.12 0.12
Sales
Interest Expense as
0.00 0.00 0.00
% of Sales
Inventory Turnover 2409.16 3236.87 4499.96
Accounts
Receivable 4.96 4.92 5.06 6.40 6.22 6.50
Turnover
Accounts Payable
10.72 11.96 11.62 475.10 186.87 139.67
Turnover
Fixed Asset
11.81 11.65 12.56 6.58 6.79 6.98
Turnover
Days Receivables 73.60 74.16 72.07 56.99 58.64 56.18
Days Inventory 0.15 0.11 0.08
Days Payables 34.06 30.51 31.41 0.77 1.95 2.61
Net Trade Cycle 39.69 43.76 40.74 56.23 56.68 53.57
Current Ratio 2.22 2.67 2.74 6.35 5.62 4.71
Quick Ratio 1.10 1.19 1.16 5.55 4.60 3.75
Interest Coverage
627.33 374.06 660.45
Ratio
Debt to Equity 0.40 0.35 0.36 0.15 0.16 0.20
Long-Term Debt to
0.02 0.02 0.02
Equity
Long-Term Debt to
0.01 0.01 0.02
Tangible Assets
Sales Growth 0.31 0.29 0.30 0.23 0.20 0.24

Compare and Comment on the Ratios of the two countries
TCS Business is going good as its income is increasing
Parent company TCS returns on euity are higher than subsidary
Returns on assets are also higher of TCS
Overall revenue of TCS is increasing while Infosys Ltd is decreasing,Eventually

returns
TCS in unable to use its assets efficentaly to prduce sales while Infosys is using
its assets efficiently here
higher the gross margin, the more capital a company retains,TCS in doing good
here
TCS operating margins are constant here while Infosys are declining
Selling , General and Admin expenses of Infosys are lower here than TCS
Interest exp has no impact on sales
TCS inventory turnover is Increasing(Ratio shows how many times a company

turned over its inventory relative to its cost of goods sold ( COGS ) in a given
period)
Infosys Company is doing good in collecting credit form debtor than TCS
TCS Company is paying Account Payable timely. In doubt with Infosys ratio
here
TCS is using its fixed assets efficiently here

ratio showing the average time to collect cash from a customer after making
credit sale. Infosys is in lead here
Company is holding its inventories for more shoter period
Infosys is in better poition to pay its bill or dues in shorter duration
This indicates how many dollars are tied up in each day in each category whether
accounts receivable, inventory, or accounts payable.(mixed status)
Infosys Company is paying its short term debts efficiently because of increased
ratio
Infosys Company is paying its short term debts efficiently with cash and A/R
Interest coverage ratio is an indicator of company's financial health and well-
being (variable status)
Infosys company is financing its operations with less debt rather than its own
resources
ratio measuring the amount of long-term debt compared to stockholders(slightly

increasing)
percentage of assets that a business would need to liquidate to pay off its long-
term debt(slight increase)
TCS sales growth is better than Infosys Ltd.

Ratios FY 2011/12 FY2012/13 FY 2013/14
Days Receivables 73.60 74.16 72.07
Current Assets 225,024 306,475 417,392
PP&E Net 72,243 81,361 81,601
Total Assets 413,945 522,672 671,378
Current Liabilities 104,650 118,428 156,703
Long-Term Debt 5,027 7,169 11,287
Revenue 488,938.30 629,894.80 818,093.60
COGS 353,986.90 460,779.80 580,442.40
Gross Margin 0.28 0.27 0.29
SG&A 344,585.20 449,495.70 566,565.70
Depreciation Expense 9,179.40 10,799.20 13,491.50
Income before Minority Interest 148,634.80 192,181.40 267,895.30
Cash from Operations 70,084 116,150 147,514
Asset Quality 0.01 0.01 0.02
Depreciation Rate 7.870165806044 7.53401177865 6.048311900085
Leverage 667.62 395.33 694.47
DSRI 1.00759 0.97179
GMI 1.02804 0.92422
SGI 1.28829 1.29878
AQI 1.12691 1.22405
SGAI 1.01255 0.97049
TATA 0.14547 0.17930
IVGI 0.59215 1.75668
DEPI 1.04462 1.24564
Product of Variable and Model
Index Variable Value Model Parameter
Variable Parameter
2013 2014 2013 2014
Intercept -4.84
DSRI 1.00759 0.97179 0.92 0.92698 0.89405
GMI 1.02804 0.92422 0.53 0.54280 0.48799
SGI 1.28829 1.29878 0.89 1.14916 1.15851
AQI 1.12691 1.22405 0.40 0.45527 0.49452
SGAI 1.01255 0.97049 -0.17 -0.17416 -0.16692
TATA 0.14547 0.17930 4.68 0.68064 0.83897
IVGI 0.59215 1.75668 -0.33 -0.19363 -0.57443
DEPI 1.04462 1.24564 0.12 0.12013 0.14325
M-Score -1.33 -1.56 3.51 3.28
TVInterpretation: As both M-scores are grater than -1.78, There are more chances of
manipulation
Conclusion: Data is not reliable and cannot be used further

Leading Digit FY 2010/11 FY 2011/12 FY2012/13 FY 2013/14
Balance Sheet
(a) Share Capital

2 2 2 1
(b) Reserves and Surplus
2 2 3 4
2 MINORITY INTEREST
4 5 6 7
3 LOAN FUNDS
(a) Secured Loans

3 1 1 1
(b) Unsecured Loans
3
4 DEFERRED TAX LIABILITIES
(NET) 1 1 2 3
Other long term liabilities
2 3 7
Long term provisions
2 3 3
Current Liabilities
Short term borrowings

8 8 1
Trade payables
3 4 5
Other current liabilities
2 3 3
Short term provisions
4 4 6
Total
4 5 6
2
5 TOTAL FUNDS EMPLOYED
6 FIXED ASSETS
Tangible assets
4 5 7
Intangible assets
2 2 2
(a) Gross Block
7
(b) Less :- Accumulated Depreciation and
Amortisation 3
(c) Net Block
4
(d) Capital Work-in-Progress
1 1 1 3
7 GOODWILL (ON CONSOLIDATION)
3 3 3 2
long term loans & advances
4 5 7
other non-current assets
2 2 1
8 INVESTMENTS
1 5 9 2
9 DEFERRED TAX ASSETS (NET)
1 2 3 4
10 CURRENT ASSETS, LOANS AND
ADVANCES
(a) Interest Accrued on Investments
7 7 9 1
(b) Inventories
2 1 2 1
(c) Unbilled Revenues
1 2 3 4
(d) Sundry Debtors
8 1 1 1
(e) Cash and Bank Balances
7 6 6 1
other non-current assets
4 7 7
(f) Loans and Advances
4 2 5 4
11 CURRENT LIABILITIES AND
PROVISIONS
(a) Current Liabilities
4
(b) Provisions
2
12 NET CURRENT ASSETS
1
13 TOTAL ASSETS (NET)
2 4 5 6
INCOME Statement
Revenue from operations

4 6 8
other income
4 1 1
1 Information technology and consultancy
services 3
2 Sale of equipment and software licenses
1
3 Other income, (net)
6
EXPENDITURE
4 Employee costs
1 1 2 2
5 Operation and other expenses
1 1 2 2
6 Interest
2 2 4 3
7 Depreciation and amortisation
7 9 1 1
PROFIT BEFORE TAXES
1 1 1 2
8 PROVISION FOR TAXES
(a) Current tax

2 3 4 6
(b) Deferred tax expense / (benefit)
1 3 1 2
(c) Fringe benefit tax
0 1 3 1
(d) MAT credit entitlement
2 4 3 5
PROFIT FOR THE YEAR BEFORE
MINORITY INTEREST AND SHARE 9 1 1 1
of loss of associates
9 Minority interest
1 1 1 1
10 Share of loss of associates
3 0 0 0
NET PROFIT FOR THE YEAR
9 1 1 1
Cash Flow Statement
1 CASH FLOWS FROM OPERATING

ACTIVITIES 1 1 1 2
Profit before taxes
Adjustments for:
7 9 1 1
Depreciation and amortisation
2 6 1
Write back of provision for doubtful debts
4 4 5
Bad debts written off
1 4 9
Provision for doubtful debts
4 7 2 1
Provision for doubtful advances
5 1 2 0
Provision for diminution in value of
investment 7 2 0
Write off / Impairment of goodwill
2 2 4 3
Interest expense
1 3 2 4
Loss on sale of fixed assets (net)
1 6 6 9
Dividend income
8 3 4 1
Profit on redemption / sale of mutual fund
and other current investments (net) 4 7 1 1
Interest income
3 1 1 4
Exchange difference on translation of
foreign currency cash and cash 1 1 6 6
equivalents
Unrealised exchange (gain) / loss
1 1 1 2
Operating profit before working capital
changes 5 5 3 5
Inventories
1 8 9 8
Unbilled revenues
2 3 2 4
Sundry debtors
3 5 5 2
Loans and advances
5 1 2 1
Current liabilities and provisions
1 3
Adjustment of translation differences on
working capital 8 1 1 2
Cash generated from operations
2 4 4 7
Taxes paid
6 7 1 1
Net cash provided by operating activities
2 CASH FLOWS FROM INVESTING

ACTIVITIES 1 2 2 3
Purchase of fixed assets
1 1 5 1
Proceeds from sale of fixed assets
2 0
Adjustment of purchase consideration
1
Purchase of trade investments
0 1
Proceeds from sale / transfer of long term
investments 1 0
Commercial papers matured
1 0
Commercial papers purchased
4 1 2 8
Purchase of mutual fund and other
investments 2
Advance towards investment
5 2 8
Sale of mutual funds and other
investments 2 1 3 2
Inter-corporate deposits placed
3 9 8 3
Inter-corporate deposits matured
6 4 4 1
Fixed deposit with banks having original
maturity over three months placed 3 3 3 5
Fixed deposit with banks having original
maturity over three months matured 6 2 0
Purchase of shares from minority
shareholders 7 0 1 4
Acquisition of subsidiaries net of cash
(including additional consideration) 0
Sale of subsidiaries
1 6 6 9
Dividends received
3 4 7 1
Interest received
1 2 6 9
Net cash used in investing activities
3 CASH FLOWS FROM FINANCING

ACTIVITIES 0 3 7 8
Net short term borrowings
3 0 2 1
Proceeds from issue of borrowings
6 1 3 1
Repayment of borrowings
1
Repayment of other borrowings
4 3 5 5
Dividend paid, including dividend tax
8 1 1
Dividend tax on dividend paid by
subsidiary 1 1 2 3
Dividend paid to minority shareholders of
a subsidiary 1
Redemption of preference shares
6 9 0
Proceeds from issue of shares to minority
shareholders 2 2 4 3
Interest paid
2 0
Repayment of inter corporate deposits
4 3 5 5
Net cash used in financing activities
4 3 2 5
Net increase/(decrease) in cash and cash
equivalents 1 1 1 1
Cash and cash equivalents at beginning of
the year 3 1 4 2
Exchange difference on translation of
foreign currency cash and cash 1 1 1 1
equivalents
Cash and cash equivalents at end of the
year 5 3 4 1
Deposits with original maturity over three
months 2 1 1 2
Restricted Cash
7 6 6 1
Cash and Bank balance at the end of the
year
Actual Expected Cumulative

Leading digit Count
Distribution Distribution difference
1 0 0% 30.10% 0.79%
2 0 0% 17.60% 47.70%
3 0 0% 12.50% 60.20%
4 0 0% 9.70% 69.90%
5 0 0% 7.90% 77.80%
6 0 0% 6.70% 84.50%
7 0 0% 5.80% 90.30%
8 0 0% 5.10% 95.40%
9 0 0% 4.60% 100.00%
Total Count P 369 100.00% 4.63%
Sqrt of total count 19.209372712
Cut-off 1.36/√P 7%
The KS is 4.63% while cut off for a 373 sample size dats is 7%. KS was less than 7%. Model
does not show manipulation
Conclusion: Data is reliable ann can be used further

Muhammad Rashid Nawaz F2019314012 DSML(A)
One Page Analysis:

1. What was the problem that the protagonist had.
Mr. Singh, portfolio investor was looking for investment opportunities.His past experience in this regard
was bad. The problem he was facing was fear of lossing his investment. Because he thought that
companies were manipulating revenues, expenses and asset valuations.
2. What was done.

Mr. Singh was concerned with the stock price of TCS. The stock loked overpriced for the last two
years. Mr. Naik suggested him to still invest but he thought that analysis would go beyond multiple
prices. He did not invest and wanted to be sure that analysis would reflect the thruthfulness of
financial statements.
3. What were the key findings

The key findings were:
A steady increase in TCS revenue
Sales growth was 29 to 31 percent all the years
Revenue on the basis of location was consistant.
Number of customers were increasing.
TCS stock was doing well against its competitor Infosys.
Both companies had more or less same ratio. TCS was at little edge for last two years.
TCS stock price more or less matched EBITDA multiple price and
Stock looked overpriced for last two years.
Mr. Naik told Mr. Singh that in relative valuation using multiples if competitor firm
underperformed, the multiples would be low. He thought that TCS was good stock to invest in
quoted price.
4. What should the Protagonist do.
Protagnist should go through a deep analysis of Finacial statements. He should use Beenish and
Benford law to check wheter if there any manipulation occurs or there any chances of fraud.It
would made him able to reach at a better solution/decision.
One Page Analysis 639869560.xlsx 177

DSML(A)
Muhammad Rashid Nawz F2019314012
Instructions
1) Answer all questions on Excel
2) Spell Check your work
3) While Printing ensure the lead row or lead column titles are on each page
1. Click the sheet.
2. On the Page Layout tab, in the Page Setup group, click Page Setup.
3. Under Print Titles, click in Rows to repeat at top or Columns to repeat at left and select the
column or row that contains the titles you want to repeat.
4. Click OK.
5. On the File menu, click Print.
4) Print Benfords Law, Ratio and Beneish M Score page with Formula as well as Normal View
Go to the formulas tab on the top bar. Click, "show formulas," click, "file," and then click, "print."
5) Write a one Page Analysis of Case

1. What was the problem that the protagonist had.
2. What was done.
3. What were the key findings
4. What should the Protagonist do.
6) Ensure the Cover Page is the first Page of the submission
7) Ensure that your Header and Footer is on each Page
1. Header should include your Name, rollnumber, Course, Section
2. Footer should include the Sheet Name, the File name, the Page number of the total number of
pages of that sheet.
Instructions 639869560.xlsx 180

1 2 3 4 5 6 7 8 9
2 4 6 8 10 12 14 16 18
3 6 9 12 15 18 21 24 27
Relative reference Absolute reference

Sum of all numbers 90 90 90 90 90 Sum of 2 numbers 3 5
75 90 90 90 90 Sum of 1 and last 3 4
75 90 90 90 90 Sum of two numbers 3 5
45 90 90 90 90 last
0 90 90 90 90 Sum of all numbers 3 6
0 90 90 90 90 till last
7 9 11 13 15 17
5 6 7 8 9 10
7 9 11 13 15 17
10 15 21 28 36 45

DSML A 6 Muhammad Rashid Nawaz (HM)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

DSML A 6 Muhammad Rashid Nawaz (HM)

Uploaded by

Copyright:

Available Formats

DSML(A)

Muhammad Rashid Nawaz F2019314012

Using Accounting Analystics to Make an Investment

5 One Page Writeup Questions Answered 20

5 Originality(Final) (Random x pages) 10

Cover Page 639869560.xlsx 180

Using Accounting Analystics to Make an Investment Decision

Index 639869560.xlsx 180

Case: Using Accounting Analytics to Make an Investment Decision

Exhibit 2: TCS Consolidated Balance Sheet (INR Million)

Exhibit 3: TCS Consolidated Cashflow Statement (INR Million)

Exhibit 7: INFOSYS Consolidated Income Statement (INR Million)

Exhibit 8: INFOSYS Consolidated Balance Sheet (INR Million)

5 TOTAL FUNDS EMPLOYED 496520.80

Average Total Assets 332708.80 468308.55 597025.00

Return on Assets 0.31 0.30 0.32

Financial Leverage 1.23 1.37 1.36

Return on Sales 0.21 0.22 0.23

Asset Turnover 1.47 1.35 1.37

Gross Margin 0.28 0.27 0.29

SG&A as % of Sales 0.32 0.33 0.33

Operating Margin 0.28 0.29 0.31

Average Inventory 202.95 194.60 181.80

Inventory Turnover 2409.16 3236.87 4499.96

Days Receivables 73.60 74.16 72.07

Days Inventory 0.15 0.11 0.08

Days Payables 33.49 30.48 31.39

Net Trade Cycle 40.27 43.79 40.76

Current Ratio 2.22 2.67 2.74

Quick Ratio 1.67 1.76 2.08

Debt to Equity 0.40 0.35 0.36

Sales Growth #DIV/0! 0.29 0.30

Increasing beacause business is doing good

ROE is also increasing as business is in good position

Business avergae total assets are increasing eventually ROA increases

Company is gaining debt so solvency concern increases

Overall revenue is increaing

TCS in unable to use its assets efficentaly to prduce sales

higher the gross margin, the more capital a company retains

SG&A expenses are in control

Operating margin is increased slightly

Interest exp has no impact on sales

Increasing(Ratio shows how many times a company turned over its

Company is doing good in collecting credit form debtors.

Company is paying A/P timely (increasing)

Company is using its Fixed Assets efficiently

Company is holding its inventories for more shoter period

average time for a company to pay its bills(decreasing)

Company is paying its short term debts efficiently

ratio measuring the amount of long-term debt compared to

Sales growth remaining same

Delevered Income = Net Income + Interest (1–(Sum Tax /EBT))

Return on Equity = Net Income / Avg. Stockholders' Equity

Return on Assets = De-Levered Net Income / Avg. Total Assets

Financial Leverage = Avg. Total Assets / Avg. Stockholders’ Equity

Return on Sales = De-Levered Net Income / Sales

Asset Turnover = Sales / Avg. Total Assets

Gross Margin = (Sales - Cost of Goods Sold) / Sales

SG&A as a % of Sales = SG&A Expense / Sales

Operating Margin = Operating Income / Sales

Interest Expense as % of Sales = Interest Expense / Sales

Inventory Turnover = Sales/ Average Inventory