FUNDAMENTAL

ANALYSIS OF ITC
LIMITED
 WHAT IS
FUNDAMENTAL
ANALYSIS?
In accounting and finance, fundamental analysis is a
method of assessing the intrinsic value of a security by
analyzing various macroeconomic and microeconomic
factors. The ultimate goal of fundamental analysis is to
quantify the intrinsic value of a security. The security’s
intrinsic value can then be compared to its current
market price to help with investment decisions.

20XX presentation title 2

ITC LIMITED
Established in 1910, ITC Limited is a diversified conglomerate with businesses
spanning Fast Moving Consumer Goods comprising Foods, Personal Care,
Cigarettes and Cigars, Branded Apparel, Education & Stationery Products, Revenue - Increase ₹62,504 crore (US$7.8
Incense Sticks and Safety Matches; Hotels, Paperboards and Packaging, Agri billion)
Business and Information Technology. The Company was incorporated on Operating income - Increase ₹20,722 crore
August 24, 1910, under the name Imperial Tobacco Company of India Limited. (US$2.6 billion)
As the Company’s ownership progressively Indianized, the name of the Company Net income - Increase ₹15,485 crore (US$1.9
was changed to India Tobacco Company Limited in 1970 and then to I.T.C. billion)
Limited in 1974. In recognition of the ITC's multi-business portfolio encompassing
Total assets - Increase ₹77,259 crore
a wide range of businesses, the full stops in the Company's name were removed
effective September 18, 2001. The Company now stands rechristened 'ITC (US$9.7 billion)
Limited,' where 'ITC' is today no longer an acronym or an initialized form. Total equity -Increase ₹62,455 crore (US$7.8
The Company's beginnings were humble. A leased office on Radha Bazar Lane, billion)
Kolkata was the center of the Company's existence. The Company celebrated its
16th birthday on August 24, 1926, by purchasing the plot of land situated at 37,
Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs
310,000. This decision of the Company was historic in more ways than one. It
was to mark the beginning of a long and eventful journey into India's future. The
Company’s headquarter building, 'Virginia House', which came up on that plot of
land two years later, would go on to become one of Kolkata's most venerated
landmarks.

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 CURRENT RATIO
Current
Current ratio establishes the relationship Year
Current Liabilities(C Current

between total current assets and total Asset(Cr) r) Ratio

current liabilities. Generally current ratio of 2019-20 25811.20 14945.09 1.73:1

2:1 is considered satisfactory or ideal. 2020-21 26269.10 7121.01 3.6:1

Current ratio = current asset/current liability

2021-22 26393.62 9250.15 2.85:1

The ideal current ratio is 2:1. From the above table it is clear that
financial years except 2019-20 have attained the ideal current
ratio. This indicates that the company is able to pay off its short-
term obligations in the financial years 2019 to 2022.

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 DEBT-EQUITY RATIO
This ratio indicates the relative proportion of Total
Debt(Cr) Equity
Debt-
equity
debt and equity in financing the asset of the Year
(Cr) Ratio

firm. In short, it expresses the relationship 2019-20 17037.04 34226.74 0.49:1

between external equity and internal equity
of a company. 2020-21 9235.6 46707.67 0.19:1

2021-22 11444.28 52844.58 0.21:1

Debt-equity ratio = debt/equity
The Standard debt-equity ratio is 1:1. From the above table it is
clear that the company has not attained the ideal debt-equity
ratio. It shows that the company tends to use more of the
owner’s fund than the borrower’s fund.

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 NET PROFIT RATIO
The net profit ratio is the ratio of net profit Year
Net
Profit(Cr)
Net
Sales(Cr)
Net Profit
Ratio

earned by the business and its net sales. It is 2015-16 9911.61

39066.85
25.37
a measure of overall profitability. The ideal 58704.52
net profit ratio is 5% to 10%. 2016-17 10477.23

47688.55
17.84

2017-18 11492.68 24.09

Net profit ratio = net profit/net sales *100
The ideal net profit ratio is 5% to 10%. From the above table it is
clear that company has attained the ideal net profit ratio and the
ratio is increasing year by year.

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 CASHFLOW ANALYSIS
YEAR/ACTIVITIES 2020-21 2021-22

OPERATING 11749.05 13806.18

INVESTING (5081.75) (5516.71)

FINANCING (6600.57) (7890.87)

From the cash flow analysis, we see that cash flows from operating activities have
decreased and improved in investing and financing activities.

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thank you