Infosys

Infosys Limited is a global consulting, technology, and outsourcing solutions provider. Infosys,
founded in 1981 by a group of Indian entrepreneurs, has evolved to become one of the world's
largest IT services firms, with a presence in over 50 countries and a staff of over 250,000
individuals.

Infosys, head quartered in Bangalore, India, provides a wide range of services to clients in a
variety of industries, including banking and finance, healthcare, retail, and manufacturing.
Application development and maintenance, infrastructure management, cloud computing,
cybersecurity, data analytics, and digital transformation are among its offerings.

Infosys is well-known for its creative approach to tackling complicated business problems. With
over 200 research projects now under way, the organisation places a major emphasis on research
and development. Its research teams are committed to producing cutting-edge technologies and
solutions that will assist its clients in staying ahead of the competition.

Infosys is devoted to sustainability and social responsibility in addition to its IT services. The
corporation is committed to decreasing its environmental impact and has set ambitious goals for
lowering its carbon footprint. Infosys is also heavily committed in charitable endeavours, with a
particular emphasis on education and healthcare. The Infosys Foundation, a non-profit
organisation formed by the company's founders, funds educational, healthcare, and rural
development programmes throughout India.

For its contribution in the IT services business, Infosys has garnered various awards and medals.
Various industry journals have named it among the top ten IT services firms in the world, and it
has been recognised for excellence in areas such as innovation, client satisfaction, and
sustainability.

Infosys is noted for its dedication to innovation, sustainability, and social responsibility. Its
emphasis on R&D, along with its significant expertise in IT services, has enabled it to assist
clients in navigating complex business challenges and staying ahead of the competition. Infosys
is a corporation dedicated to creating a positive effect on the world, with a strong commitment to
sustainability and social responsibility.
Framework for analysis

To thoroughly review a company's financial performance, the Income Statement, Balance Sheet,
and Cash Flow Statement must all be examined. The Income Statement gives information on the
company's revenue, costs, and net income, while revenue and expense segmentation allows for a
more in-depth understanding of each business unit's contributions. The Balance Sheet illustrates
the company's assets, liabilities, and equity, which are important components in assessing the
company's financial status and risks. Furthermore, assessing the mix of assets and liabilities is
critical in acquiring a thorough knowledge of the company's financial status. The Cash Flow
Statement displays cash inflows and outflows, and tracking the changes in cash and cash
equivalents over time is critical.financial ratio analysis is an important instrument for assessing a
company's performance, profitability, liquidity, solvency, and efficiency. Calculating various
financial ratios, such as those for liquidity, profitability, solvency, and efficiency, is required to
assess the company's financial status and ability to satisfy its financial responsibilities. As a
result, combining these methodologies will provide a thorough framework for analysing a
company's financial performance.

Balance Sheet

Standalone Balance Sheet ------------------- in Rs. Cr. ----------------

Mar 23 22-Mar
12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 2,074.00 2,103.00
Total Share Capital 2,074.00 2,103.00
Reserves and Surplus 65,671.00 66,597.00
Total Reserves and Surplus 65,671.00 66,597.00
Employees Stock Options 0 606
Total Shareholders Funds 67,745.00 69,306.00
NON-CURRENT LIABILITIES
Deferred Tax Liabilities [Net] 866 841
Other Long Term Liabilities 5,284.00 4,264.00
Total Non-Current Liabilities 6,150.00 5,105.00
CURRENT LIABILITIES
Trade Payables 2,426.00 2,669.00
Other Current Liabilities 23,853.00 21,387.00
Short Term Provisions 1,163.00 920
Total Current Liabilities 27,442.00 24,976.00
Total Capital And Liabilities 101,337.00 99,387.00
ASSETS
NON-CURRENT ASSETS
Tangible Assets 15,706.00 14,695.00
Intangible Assets 0 243
Capital Work-In-Progress 0 411
Fixed Assets 15,706.00 15,349.00
Non-Current Investments 23,686.00 22,869.00
Deferred Tax Assets [Net] 779 970
Long Term Loans And Advances 39 34
Other Non-Current Assets 9,045.00 7,728.00
Total Non-Current Assets 49,255.00 46,950.00
CURRENT ASSETS
Current Investments 4,476.00 5,467.00
Trade Receivables 20,773.00 18,966.00
Cash And Cash Equivalents 6,534.00 12,270.00
Short Term Loans And Advances 291 219
Other Current Assets 20,008.00 15,515.00
Total Current Assets 52,082.00 52,437.00
Total Assets 101,337.00 99,387.00
The given balance sheet shows the financial position of Infosys for the financial year 2023 and
2022.

Comparing the two years, the company's total shareholders' funds have decreased from Rs.
69,306 crore in 22 to Rs. 67,745 crore in 23. The total reserves and surplus of the company have
also decreased from Rs. 66,597 crore in 22 to Rs. 65,671 crore in 23.

The non-current liabilities have increased from Rs. 5,105 crore in 22 to Rs. 6,150 crore in 23,
with an increase in other long-term liabilities. Current liabilities have also increased from Rs.
24,976 crore in 22 to Rs. 27,442 crore in 23, with an increase in other current liabilities.
The company's total assets remained the same at Rs. 101,337 crore in both years. However, there
were changes in the composition of the assets. The non-current assets increased from Rs. 46,950
crore in 22 to Rs. 49,255 crore in 23, mainly due to an increase in non-current investments and
other non-current assets. On the other hand, the current assets decreased from Rs. 52,437 crore in
22 to Rs. 52,082 crore in 23, primarily due to a decrease in cash and cash equivalents.

The balance sheet also provides additional information such as contingent liabilities, bonus
details, and investments. The company had no contingent liabilities in 23, while it had Rs. 5,348
crore in 22. The bonus equity share capital was Rs. 2,017.09 crore in 22. The company had non-
current investments worth Rs. 12,552 crore and Rs. 15,134 crore in quoted and unquoted market
value, respectively, in 22. The current investments in 22 were Rs. 1,003 crore in quoted market
value and Rs. 1,337 crore in unquoted book value.

The company's financial position seems stable, although there have been some changes in the
composition of the assets and liabilities from the previous year.

Profit and Loss Statement

Standalone Profit & Loss account ----------------- in Rs. Cr. --------------

Mar 23 22-Mar
12 mths 12 mths
INCOME
Revenue From Operations [Gross] 124,014.00 103,940.00
Revenue From Operations [Net] 124,014.00 103,940.00
Total Operating Revenues 124,014.00 103,940.00
Other Income 3,859.00 3,224.00
Total Revenue 127,873.00 107,164.00
EXPENSES
Operating And Direct Expenses 0 21,958.00
Employee Benefit Expenses 62,764.00 51,664.00
Finance Costs 157 128
Depreciation And Amortisation Expenses 2,753.00 2,429.00
Other Expenses 30,556.00 2,490.00
Total Expenses 96,230.00 78,669.00
Profit/Loss Before Tax 31,643.00 28,495.00
Tax Expenses-Continued Operations
Current Tax 8,375.00 6,960.00
Deferred Tax 0 300
Total Tax Expenses 8,375.00 7,260.00
Net Profit/Loss For The Period 23,268.00 21,235.00

The above Profit & Loss account shows the financial performance of Infosys for the years 2023
and 2022. A brief summary of this Profit & Loss account is given below:

 Revenue from operations increased from Rs. 103,940 crore in FY22 to Rs. 124,014 crore
in FY23.

 Other income also increased from Rs. 3,224 crore in FY22 to Rs. 3,859 crore in FY23.

 Total revenue increased from Rs. 107,164 crore in FY22 to Rs. 127,873 crore in FY23.

 Operating and direct expenses were zero in FY23, compared to Rs. 21,958 crore in FY22.

 Employee benefit expenses increased from Rs. 51,664 crore in FY22 to Rs. 62,764 crore
in FY23.

 Finance costs were minimal at Rs. 157 crore in FY23 and Rs. 128 crore in FY22.

 Depreciation and amortisation expenses increased from Rs. 2,429 crore in FY22 to Rs.
2,753 crore in FY23.

 Other expenses increased significantly from Rs. 2,490 crore in FY22 to Rs. 30,556 crore
in FY23.

 Profit before exceptional and extraordinary items and tax increased from Rs. 28,495 crore
in FY22 to Rs. 31,643 crore in FY23.

 Profit before tax increased from Rs. 28,495 crore in FY22 to Rs. 31,643 crore in FY23.

 Current tax expenses increased from Rs. 6,960 crore in FY22 to Rs. 8,375 crore in FY23.

 Deferred tax expenses were zero in FY23, compared to Rs. 300 crore in FY22.

 Total tax expenses increased from Rs. 7,260 crore in FY22 to Rs. 8,375 crore in FY23.

 Profit after tax and before exceptional and extraordinary items increased from Rs. 21,235
crore in FY22 to Rs. 23,268 crore in FY23.
  Profit from continuing operations increased from Rs. 21,235 crore in FY22 to Rs. 23,268
crore in FY23.

 Profit for the period increased from Rs. 21,235 crore in FY22 to Rs. 23,268 crore in
FY23.

Analysis of financial Statements of Infosys

Financial Ratios: Financial ratios are quantitative indicators used to evaluate a company's
financial health and performance. These ratios are computed using information from a company's
financial statements, which include the income statement, balance sheet, and cash flow
statement.

1. Liquidity ratios: Liquidity ratios are a type of financial measurement that assesses a
company's capacity to meet short-term obligations. These ratios evaluate a company's
ability to earn cash quickly enough to cover its current liabilities. Liquidity ratios are
useful because they assist investors and analysts in determining a company's capacity to
manage its working capital and satisfy its financial obligations in the short term.
a. Current Ratio: The current ratio is a financial metric that measures a company's
ability to pay its short-term debts with its current assets.
Current Ratio = Current assets / Current liabilities
Current Ratio for March 31, 2023 = 52,082.00/27,442.00
= 1.90
Current Ratio for March 31, 2022 = 52,437.00/24,976.00
= 2.10

b. Liquid Ratio: The liquid ratio, also known as the acid test ratio, is a financial metric
that measures a company's ability to pay off its current liabilities with its quick assets,
which include cash, cash equivalents, and accounts receivable.
Liquid Ratio = (Cash and cash equivalents + accounts receivable) / Current liabilities
Liquid Ratio for March 31, 2023 = (6,534.00+20,773.00)/27,442.00
= 0.99
Liquid Ratio for March 31, 2022 = (12,270.00+18,966.00)/24,976.00
= 1.25
 c. Absolute Liquid Ratio: The absolute liquid ratio is a financial metric that measures a
company's ability to meet its short-term financial obligations using its most liquid
assets, such as cash and cash equivalents.
Absolute Liquid Ratio = Cash and cash equivalents / Current liabilities
Absolute Liquid Ratio for March 31, 2023 = 6,534.00/27,442.00
= 0.24
Absolute Liquid Ratio for March 31, 2022 = 12,270.00/24,976.00
= 0.49

2. Profitability Ratios: These ratios evaluate a company's profitability by comparing

revenues and expenses over time. Profitability ratios are significant because they assist
investors and analysts in determining a company's ability to generate long-term profits
and develop shareholder value.
a. Gross Profit Ratio: The gross profit ratio is a financial metric that measures a
company's profitability by evaluating the amount of gross profit earned relative to its
total sales or revenue.
Gross Profit Ratio = (Gross profit / Net sales) * 100
Gross Profit for March 31, 2023 = (31,643.00/124,014.00) * 100
= 25.52%
Gross Profit for March 31, 2022 = (28,495.00/103,940.00) * 100
= 27.41%

b. Operating Ratio: The operating ratio is a financial metric that measures a company's
operating expenses as a percentage of its net sales or revenue.
Operating Ratio = (Operating Expenses / Net sales) * 100
Operating Ratio for March 31, 2023 = (62,764.00/124,014.00) * 100
= 50.61%
Operating Ratio for March 31, 2022 = (73,622.00/103,940.00) * 100
= 70.83%
 c. Operating Profit Ratio: The operating profit ratio, also known as the operating
margin, is a financial metric that measures the operating profit of a company as a
percentage of its revenue.
Operating Profit Ratio = (Operating profit / Net sales) * 100
Operating Profit Ratio for March 31, 2023 = (29,607.00/124,014.00) * 100
= 23.87%
Operating Profit Ratio for March 31, 2022 = (30,318.00/103,940.00) * 100
= 29.17%
d. Net Profit Ratio:
Net Profit Ratio = Net profit after tax / Net sales
Net Profit Ratio for March 31, 2023 = 23,268.00/124,014.00
= 0.19
Net Profit Ratio for March 31, 2022 = 21,235.00/103,940.00
= 0.21

Causes of variances in Infosys

 In comparison to FY22, Infosys' financial performance improved significantly in FY23.
From Rs. 103,940 crore in FY22 to Rs. 124,014 crore in FY23, revenue from operations
increased by roughly 19%.
 Other income increased by about 20%, rising from Rs. 3,224 crore in FY22 to Rs. 3,859
crore in FY23. As a result, total income climbed by around 19%, rising from Rs. 107,164
crore in FY22 to Rs. 127,873 crore in FY23.
 The company's other costs, which went from Rs. 2,490 crore in FY22 to Rs. 30,556 crore in
FY23, however, also increased significantly, which resulted in a fall in the net profit margin.
From Rs. 21,235 crore in FY22 to Rs. 23,268 crore in FY23, the net profit after tax climbed
by about 9%, but the net profit margin fell from 19.8% in FY22 to 18.2% in FY23.
 The company's liquidity ratios have likewise decreased in FY23 compared to FY22. In order
to pay off its short-term loans with its current assets, the company's current ratio fell from
2.10 in FY22 to 1.90 in FY23. Along with declining from 1.25 in FY22 to 0.99 in FY23 and
from 0.49 in FY22 to 0.24 in FY23, the liquid ratio and absolute liquid ratio both showed a
fall in the company's capacity to settle its current liabilities with its quick assets.
Financial performance comparison and analysis

1. Income statement analysis-

Revenue: The company's revenue from operations, both gross and net, increased in the fiscal
year 2022-23 compared to the prior year 2021-22. Gross operating revenue increased by
19.3%, from Rs. 103,940.00 Cr. to Rs. 124,014.00 Cr. Net operating revenue increased by
19.3%, from Rs. 103,940.00 Cr. to Rs. 124,014.00 Cr.

Expenses: The total expenses of the company increased by 22.3% from Rs. 78,669.00 Cr. to
Rs. 96,230.00 Cr. The rise in expenses is mostly attributable to a 21.5% increase in
employee benefit expenses from Rs. 51,664.00 Cr. to Rs. 62,764.00 Cr. Other expenses
increased by 1128.6% from Rs. 2,490.00 crore to Rs. 30,556.00 crore.
Profit/Loss: From Rs. 28,495.00 Cr. to Rs. 31,643.00 Cr., the profit/loss before tax
increased by 11.1%. The period's net profit/loss increased by 9.6%, from Rs. 21,235.00 Cr.
to Rs. 23,268.00 Cr.

Tax charges: The company's tax charges increased by 15.4%, from Rs. 7,260.00 Cr. to Rs.
8,375.00 Cr. Current tax expenses grew by 20.4%, rising from Rs. 6,960.00 Cr to Rs.
8,375.00 Cr.
In general, Infosys Company's financial performance has improved, with both revenue and
profit increasing. However, there has been an increase in costs, mostly because employee
benefit costs and other costs have gone up. Another worrying development is the rise in tax
expenses. In order to improve profitability, the corporation must continuously monitor and
manage its expenses.
2. Balance sheet Analysis
The company's total assets increased by 1.96% from Rs. 99,387 crore on March 22 to Rs.
101,337 crore on March 23.

The company's shareholder funds declined from Rs. 69,306 crore to Rs. 67,745 crore, owing
principally to a decrease in equity share capital. Total reserves and surplus for the company
fell by Rs. 926 crore, from Rs. 66,597 crore to Rs. 65,671 crore.
 Non-current liabilities of Infosys grew from Rs. 5,105 crore to Rs. 6,150 crore, owing
mostly to an increase in other long-term obligations. The company's current liabilities, on
the other hand, climbed by 10.19%, from Rs. 24,976 crore to Rs. 27,442 crore, owing
mostly to an increase in other current liabilities.
Non-current assets increased from Rs. 46,950 crore to Rs. 49,255 crore, owing mostly to an
increase in non-current investments. Fixed assets climbed by Rs. 15,349 crore to Rs. 15,706
crore, while non-current assets increased by Rs. 7,728 crore to Rs. 9,045 crore.
Current assets remained nearly unchanged, with a little decline from Rs. 52,437 crore to
Rs. 52,082 crore, owing mostly to a decrease in cash and cash equivalents.
The company's financial position is robust, with non-current assets and liabilities increasing.
However, the loss in shareholder funds, reserves, and surplus, as well as the growth in
current liabilities, are areas to keep an eye on in the approaching fiscal periods.

Some general possible solutions based on the income statement and balance sheet of
Infosys:
 Increase revenue by entering new areas or stepping up marketing initiatives to draw in new
customers.
 Reduce costs by putting cost-cutting strategies into practise, such as eliminating wasteful
spending, renegotiating contracts with suppliers, or outsourcing specific tasks.
 Boost productivity through streamlining processes, enhancing operations, or utilising
technology to automate work.
 By eliminating low-margin offers and concentrating on higher-margin goods and services,
profitability can be increased.
 Increase cash reserves, bargain better terms of payment with vendors, or step up
receivables collection activities to increase liquidity.
 Reduce debt by repaying existing debts or raising money by issuing fresh stock.
Increase return on investment through funding high-yield ventures or selling off under
performing assets.
 Increase shareholder value through raising dividends, buying back shares, or taking other
actions to drive up the stock price.
 Strengthen the balance sheet by lowering liabilities, such as by paying off debt or securing
more advantageous terms from lenders.
 Implement strategic alliances or mergers and acquisitions to increase profitability, get access
to new markets, or expand capabilities.

Implication of such solutions

 Revenue growth: Infosys can boost its revenue by boosting sales and enhancing operational
effectiveness, which will boost profitability and shareholder value.
 Better cash management can assist the business in paying off debt, investing in business
expansion prospects, and strengthening its liquidity position, all of which contribute to
greater financial stability.
 Increased profitability: Infosys may raise its profitability by cutting costs, enhancing
productivity, and growing sales, which would draw in more investors and increase its market
value.
 Reduced risk can be achieved by diversifying the company's revenue sources and lessening
its reliance on a certain client or geographic market.
 Enhance brand value: Infosys may boost its brand value and increase its market share by
increasing customer happiness, funding employee training and development, and
implementing sustainable business practises.
 Attract and retain talent: By providing competitive compensation, investing in employee
development, and creating a positive work environment, Infosys can attract and keep top
talent, resulting in increased productivity and financial success.
 Improved shareholder value: Infosys may build value for its shareholders and improve its
long-term financial performance by implementing sustainable growth plans, enhancing
operational efficiency, and increasing profitability.
Comparative Balance Sheet

Comparative Balance ------------------- in Rs. Cr. ----------------

Sheet

Mar 23 22-Mar Increase or Percentage of

Decrease in Increase or
2023 Decrease in
2023
12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 2,074.00 2,103.00 -29.00 -1.38%
Total Share Capital 2,074.00 2,103.00 -29.00 -1.38%
Reserves and Surplus 65,671.00 66,597.00 -926.00 -1.39%
Total Reserves and 65,671.00 66,597.00 -926.00 -1.39%
Surplus
Employees Stock 0 606 -606.00 -100.00%
Options
Total Shareholders 67,745.00 69,306.00 -1,561.00 -2.25%
Funds
NON-CURRENT
LIABILITIES
Deferred Tax 866 841 25.00 2.97%
Liabilities [Net]
Other Long Term 5,284.00 4,264.00 1,020.00 23.92%
Liabilities
Total Non-Current 6,150.00 5,105.00 1,045.00 20.47%
Liabilities
CURRENT
LIABILITIES
Trade Payables 2,426.00 2,669.00 -243.00 -9.10%
Other Current 23,853.00 21,387.00 2,466.00 11.53%
Liabilities
Short Term 1,163.00 920 243.00 26.41%
Provisions
Total Current 27,442.00 24,976.00 2,466.00 9.87%
Liabilities
Total Capital And 101,337.00 99,387.00 1,950.00 1.96%
Liabilities
ASSETS
NON-CURRENT
ASSETS
Tangible Assets 15,706.00 14,695.00 1,011.00 6.88%
Intangible Assets 0 243 -243.00 -100.00%
Capital Work-In- 0 411 -411.00 -100.00%
Progress
Fixed Assets 15,706.00 15,349.00 357.00 2.33%
Non-Current 23,686.00 22,869.00 817.00 3.57%
Investments
Deferred Tax Assets 779 970 -191.00 -19.69%
[Net]
Long Term Loans And 39 34 5.00 14.71%
Advances
Other Non-Current 9,045.00 7,728.00 1,317.00 17.04%
Assets
Total Non-Current 49,255.00 46,950.00 2,305.00 4.91%
Assets
CURRENT ASSETS
Current Investments 4,476.00 5,467.00 -991.00 -18.13%
Trade Receivables 20,773.00 18,966.00 1,807.00 9.53%
Cash And Cash 6,534.00 12,270.00 -5,736.00 -46.75%
Equivalents
Short Term Loans 291 219 72.00 32.88%
And Advances
Other Current Assets 20,008.00 15,515.00 4,493.00 28.96%
Total Current Assets 52,082.00 52,437.00 -355.00 -0.68%
Total Assets 101,337.00 99,387.00 1,950.00 1.96%
Comparative Profit & Loss Statement

Comparative Profit ----------------- in Rs. Cr. --------------

& Loss account

Mar 23 22-Mar Increase or Percentage

Decrease in Increase or
2023 Decrease in
2023
12 mths 12 mths
INCOME
Revenue From 124,014.00 103,940.00 124,014.00 119.31%
Operations [Gross]
Revenue From 124,014.00 103,940.00 20,074.00 19.31%
Operations [Net]
Total Operating 124,014.00 103,940.00 20,074.00 19.31%
Revenues
Other Income 3,859.00 3,224.00 635.00 19.70%
Total Revenue 127,873.00 107,164.00 20,709.00 19.32%
EXPENSES
Operating And 0 21,958.00 -21,958.00 -100.00%
Direct Expenses
Employee Benefit 62,764.00 51,664.00 11,100.00 21.48%
Expenses
Finance Costs 157 128 29.00 22.66%
Depreciation And 2,753.00 2,429.00 324.00 13.34%
Amortisation
Expenses
Other Expenses 30,556.00 2,490.00 28,066.00 1127.15%
Total Expenses 96,230.00 78,669.00 17,561.00 22.32%
Profit/Loss Before 31,643.00 28,495.00 3,148.00 11.05%
Tax
Tax Expenses-
Continued
Operations
Current Tax 8,375.00 6,960.00 1,415.00 20.33%
Deferred Tax 0 300 -300.00 -100.00%
Total Tax Expenses 8,375.00 7,260.00 1,115.00 15.36%
Net Profit/Loss For 23,268.00 21,235.00 2,033.00 9.57%
The Period
Common Size Balance Sheet

Common Size ------------------- in Rs. Cr. ----------------

Balance Sheet
Mar 23 Percentage (%) 22-Mar Percentage (%)
12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 2,074.00 2.05% 2,103.00 2.12%
Total Share Capital 2,074.00 2.05% 2,103.00 2.12%
Reserves and Surplus 65,671.00 64.80% 66,597.00 67.01%
Total Reserves and 65,671.00 64.80% 66,597.00 67.01%
Surplus
Employees Stock 0 0.00% 606 0.61%
Options
Total Shareholders 67,745.00 66.85% 69,306.00 69.73%
Funds
NON-CURRENT
LIABILITIES
Deferred Tax 866 0.85% 841 0.85%
Liabilities [Net]
Other Long Term 5,284.00 5.21% 4,264.00 4.29%
Liabilities
Total Non-Current 6,150.00 6.07% 5,105.00 5.14%
Liabilities
CURRENT
LIABILITIES
Trade Payables 2,426.00 2.39% 2,669.00 2.69%
Other Current 23,853.00 23.54% 21,387.00 21.52%
Liabilities
Short Term 1,163.00 1.15% 920 0.93%
Provisions
Total Current 27,442.00 27.08% 24,976.00 25.13%
Liabilities
Total Capital And 101,337.00 100.00% 99,387.00 100.00%
Liabilities
ASSETS
NON-CURRENT
ASSETS
Tangible Assets 15,706.00 15.50% 14,695.00 14.79%
Intangible Assets 0 0.00% 243 0.24%
Capital Work-In- 0 0.00% 411 0.41%
Progress
Fixed Assets 15,706.00 15.50% 15,349.00 15.44%
Non-Current 23,686.00 23.37% 22,869.00 23.01%
Investments
Deferred Tax Assets 779 0.77% 970 0.98%
[Net]
Long Term Loans 39 0.04% 34 0.03%
And Advances
Other Non-Current 9,045.00 8.93% 7,728.00 7.78%
Assets
Total Non-Current 49,255.00 48.61% 46,950.00 47.24%
Assets
CURRENT ASSETS 0.00% 0.00%
Current Investments 4,476.00 4.42% 5,467.00 5.50%
Trade Receivables 20,773.00 20.50% 18,966.00 19.08%
Cash And Cash 6,534.00 6.45% 12,270.00 12.35%
Equivalents
Short Term Loans 291 0.29% 219 0.22%
And Advances
OtherCurrentAssets 20,008.00 19.74% 15,515.00 15.61%
Total Current Assets 52,082.00 51.39% 52,437.00 52.76%
Total Assets 101,337.00 100.00% 99,387.00 100.00%
Common Size Profit & Loss

Standalone Profit & ----------------- in Rs. Cr. --------------

Loss account
Mar 23 Percentage (%) 22-Mar Percentage (%)

12 mths 12 mths
INCOME
Revenue From 124,014.00 96.98% 103,940.00 96.99%
Operations [Gross]
Revenue From 124,014.00 96.98% 103,940.00 96.99%
Operations [Net]
Total Operating 124,014.00 96.98% 103,940.00 96.99%
Revenues
Other Income 3,859.00 3.02% 3,224.00 3.01%
Total Revenue 127,873.00 100.00% 107,164.00 100.00%
EXPENSES
Operating And Direct 0 0.00% 21,958.00 27.91%
Expenses
Employee Benefit 62,764.00 65.22% 51,664.00 65.67%
Expenses
Finance Costs 157 0.16% 128 0.16%
Depreciation And 2,753.00 2.86% 2,429.00 3.09%
Amortisation Expenses
Other Expenses 30,556.00 31.75% 2,490.00 3.17%
Total Expenses 96,230.00 100.00% 78,669.00 100.00%
Profit/Loss Before Tax 31,643.00 28,495.00
Tax Expenses-
Continued Operations
Current Tax 8,375.00 100.00% 6,960.00 95.87%
Deferred Tax 0 0.00% 300 4.13%
Total Tax Expenses 8,375.00 100.00% 7,260.00 100.00%
Net Profit/Loss For The 23,268.00 21,235.00
Period
 Wipro
Wipro Limited is a multinational corporation head quartered in Bangalore, India. Established in
1945 as Western India. Wipro Limited has a long and successful history, beginning in the
vegetable oil sector and progressing to its current position as a global provider of cutting-edge
technological services. The company has made strategic investments in research and
development throughout the years, helping it to stay ahead of the curve in technical innovation.

Wipro now provides a diverse range of services to clients in a variety of industries. Application
development and maintenance, infrastructure management, cloud services, cybersecurity, and
data analytics are among its IT services. In addition, the company offers consulting and business
process services, assisting clients in improving their operations, increasing efficiency, and
lowering costs.

Wipro has a genuinely worldwide presence, with offices in over 50 countries. Its clients include
some of the world's largest and most successful corporations, as well as smaller enterprises
seeking to capitalise on the most recent technical breakthroughs.

Wipro's focus on innovation is one of the keys to its success. The organisation includes a
specialised innovation centre staffed by approximately 150 academics and scientists tasked with
generating new technologies and solutions. Furthermore, Wipro is committed to sustainability
and has been recognised for its efforts to reduce its carbon footprint and influence on the
environment.

Wipro offers more than simply IT support. The business is also steadfastly committed to
supporting the areas where it does business. Wipro has contributed to the improvement of
healthcare and education in disadvantaged regions all around the world through its varied
charitable endeavours. Additionally, the business places a high priority on diversity and inclusion
and is committed to fostering an environment at work that is inviting and inclusive of all staff
members.
 Framework for
analysis

Several critical financial parameters will be reviewed in order to undertake a thorough analysis
of Wipro. These measures will include profitability, debt levels, liquidity, and cash flow for the
company, as well as a comparison to its industry counterparts. We may learn about Wipro's
profitability by looking at its net income, gross profit, and operational profit margins.
Furthermore, we may examine the Company's leverage and debt levels by examining Wipro's
debt-to-equity ratio and interest coverage ratio. Wipro's liquidity will be assessed by examining
its current ratio, quick ratio, and cash conversion cycle, which will aid in determining its capacity
to satisfy its immediate obligations. The cash flow statement will also be scrutinised in order to
evaluate the Company's operating, investing, and financing operations.

We can better comprehend the competitive position and relative financial health of the Company
by comparing Wipro's financial performance to those of its peers in the infrastructure business.

Balance Sheet

Standalone Balance Sheet ------------------- in Rs. Cr. -------------------

Mar 22 21-Mar
12 mths 12 mths
EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 1,096.40 1,095.80

Total Share Capital 1,096.40 1,095.80

Reserves and Surplus 53,254.30 44,145.80

Total Reserves and Surplus 53,254.30 44,145.80

Total Shareholders Funds 54,350.70 45,241.60

NON-CURRENT LIABILITIES

Long Term Borrowings 5.7 14.1

Deferred Tax Liabilities [Net] 0 130.5

Other Long Term Liabilities 2,788.60 2,129.20

Long Term Provisions 64.1 88.5

Total Non-Current Liabilities 2,858.40 2,362.30
CURRENT LIABILITIES

Short Term Borrowings 7,673.40 5,791.20

Trade Payables 4,685.10 4,348.50

Other Current Liabilities 9,446.90 6,705.30

Short Term Provisions 1,368.30 1,287.40

Total Current Liabilities 23,173.70 18,132.40

Total Capital And Liabilities 80,382.80 65,736.30

ASSETS
NON-CURRENT ASSETS

Tangible Assets 7,386.60 6,578.70

Intangible Assets 651.1 709.4
Capital Work-In-Progress 1,584.50 1,848.00
Fixed Assets 9,622.20 9,136.10
Non-Current Investments 16,557.20 8,206.70
Deferred Tax Assets [Net] 53.3 47.4
Other Non-Current Assets 2,377.90 2,966.60

Total Non-Current Assets 28,610.60 20,356.80

CURRENT ASSETS
Current Investments 24,073.70 17,495.20
Inventories 87.5 91
Trade Receivables 9,295.40 8,046.20
Cash And Cash Equivalents 4,898.10 9,783.20
Short Term Loans And 1,913.00 4,201.50
Advances
OtherCurrentAssets 11,504.50 5,762.40
Total Current Assets 51,772.20 45,379.50

Total Assets 80,382.80 65,736.30

Financial performance comparison and analysis

We can evaluate Wipro's financial performance during the last two years (March 21 to March
22) in terms of assets, liabilities, and equity using the provided Standalone Balance Sheet.

Shareholders Funds: Wipro's shareholder's funds climbed from Rs. 45,241.60 Cr in

March 21 to Rs. 54,350.70 Cr in March 22, indicating a significant increase in the
company's equity capital base.

Non-Current Liabilities: The increase in Wipro's non-current liabilities from Rs. 2,362.30
Cr. in March 21 to Rs. 2,858.40 Cr. in March 22 shows that the company has taken on
more long-term debt.

Current Liabilities: According to Wipro's current liabilities, which climbed from Rs.
18,132.40 Cr. in March 21 to Rs. 23,173.70 Cr. on March 22, the company has incurred
more short-term loans and other current liabilities.

Non-Current Assets: According to Wipro, its non-current assets have increased from Rs.
20,356.80 Cr. in March 21 to Rs. 28,610.60 Cr. in March 22, indicating that the business
has made more investments in fixed and non-current assets.

Current Assets: According to Wipro's current assets, which climbed from Rs. 45,379.50
Cr. on March 21 to Rs. 51,772.20 Cr. in March 22, the company has higher inventories
and liquid assets.
 Wipro's equity capital, non-current assets, and current assets are showing favourable
trends according to the company's balance sheet analysis. But the business has also
accumulated additional debt, both long-term and short-term, which can have an effect on
its long-term financial success.

Profit & Loss

Standalone Profit & Loss account ------------------- in Rs. Cr. -------------------

Mar 22 21-Mar
12 mths 12 mths
INCOME
Revenue From Operations [Gross] 59,574.40 50,299.40

Revenue From Operations [Net] 59,574.40 50,299.40

Other Operating Revenues 0 0

Total Operating Revenues 59,574.40 50,299.40

Other Income 4,706.10 2,382.90

Total Revenue 64,280.50 52,682.30
EXPENSES
Purchase Of Stock-In Trade 488.8 587.9

Operating And Direct Expenses 14,109.60 10,675.40

Changes In Inventories Of FG,WIP -6.4 34.5

And Stock-In Trade
Employee Benefit Expenses 31,542.40 26,467.30

Finance Costs 367.4 402.6

Depreciation And Amortisation 1,485.70 1,349.30
Expenses
Other Expenses 1,028.80 480.5
Total Expenses 49,016.30 39,997.50
Profit/Loss Before Tax 15,264.20 12,684.80

Tax Expenses-Continued Operations

Current Tax 3,194.10 2,243.00

Deferred Tax -65.2 380.9
Total Tax Expenses 3,128.90 2,623.90
Profit/Loss For The Period 12,135.30 10,060.90

According to Wipro's profit and loss statement, the company's revenue from operations (gross
and net) increased from INR 50,299.40 Cr in 2021 to INR 59,574.40 Cr in 2022, representing an
18.5% growth. Another improvement for the business is that the other income rose from INR
2,382.90 Cr to INR 4,706.10 Cr.

Employee benefit costs have climbed from INR 26,467.30 Cr to INR 31,542.40 Cr on the
expenses side, showing that the business has put money into its human resources. The other
expenses have also gone up from INR 480.5 Cr to INR 1,028.80 Cr, which may be the result of
rising marketing or R&D costs.

The company declared a profit before tax of INR 15,264.20 Cr in 2022 compared to INR
12,684.80 Cr in 2021, which is an encouraging trend despite the rise in expenses. Additionally,
the company reported a larger profit after tax in 2022, coming in at INR 12,135.30 Cr versus
INR 10,060.90 Cr in 2021.

According to the profit and loss statement, Wipro had a successful year overall in 2022, as
evidenced by a rise in revenue and profit. Nevertheless, it will be crucial to keep an eye on the
company's costs and other elements that can have an impact on its performance in the future.
Analysis of financial Statements of Wipro

Financial Ratios:

1. Liquidity ratios
a. Current Ratio: The current ratio is a financial metric that measures a company's
ability to pay its short-term debts with its current assets.
Current Ratio = Current assets / Current liabilities
Current Ratio for March 31, 2022 = 51,772.20/23,173.70
= 2.23
Current Ratio for March 31, 2021 = 45,379.50/18,132.40
= 2.50

b. Liquid Ratio: The liquid ratio, also known as the acid test ratio, is a financial metric
that measures a company's ability to pay off its current liabilities with its quick assets,
which include cash, cash equivalents, and accounts receivable.
Liquid Ratio = (Cash and cash equivalents + accounts receivable) / Current liabilities
Liquid Ratio for March 31, 2022 = (4,898.10+9,295.40)/23,173.70
= 0.61
Liquid Ratio for March 31, 2021 = (9,783.20+8,046.20)/18,132.40
= 0.98

c. Absolute Liquid Ratio: The absolute liquid ratio is a financial metric that measures a
company's ability to meet its short-term financial obligations using its most liquid
assets, such as cash and cash equivalents.
Absolute Liquid Ratio = Cash and cash equivalents / Current liabilities
Absolute Liquid Ratio for March 31, 2022 = 4,898.10/23,173.70
= 0.21
Absolute Liquid Ratio for March 31, 2021 = 9,783.20/18,132.40
= 0.54
2. Profitability Ratios
a. Gross Profit Ratio: The gross profit ratio is a financial metric that measures a
company's profitability by evaluating the amount of gross profit earned relative to its
total sales or revenue.
Gross Profit Ratio = (Gross profit / Net sales) * 100
Gross Profit for March 31, 2022 = (15,264.20/59,574.40) * 100
= 25.62%
Gross Profit for March 31, 2021 = (12,684.80/50,299.40) * 100
= 25.22%

b. Operating Ratio: The operating ratio is a financial metric that measures a company's
operating expenses as a percentage of its net sales or revenue.
Operating Ratio = (Operating Expenses / Net sales) * 100
Operating Ratio for March 31, 2022 = (14,109.60/59,574.40) * 100
= 23.68%
Operating Ratio for March 31, 2021 = (10,675.40/50,299.40) * 100
= 21.22%

c. Operating Profit Ratio: The operating profit ratio, also known as the operating
margin, is a financial metric that measures the operating profit of a company as a
percentage of its revenue.
Operating Profit Ratio = (Operating profit / Net sales) * 100
Operating Profit Ratio for March 31, 2022 = (45,464.80/59,574.40) * 100
= 76.32%
Operating Profit Ratio for March 31, 2021 = (39,624.00/50,299.40) * 100
= 78.78%
d. Net Profit Ratio:
Net Profit Ratio = Net profit after tax / Net sales
Net Profit Ratio for March 31, 2022 = 12,135.30/59,574.40
= 0.20
Net Profit Ratio for March 31, 2021 = 10,060.90/50,299.40
= 0.20
Comparative Balance sheet

Comparative Balance ------------------- in Rs. Cr. -------------------

Sheet
Mar 22 21-Mar Increase or Percentage of
Decrease in Increase or
2022 Rs. Decrease in 2022
12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 1,096.40 1,095.80 0.60 0.05%

Total Share Capital 1,096.40 1,095.80 0.60 0.05%

Reserves and Surplus 53,254.30 44,145.80 9,108.50 20.63%
Total Reserves and 53,254.30 44,145.80 9,108.50 20.63%
Surplus
Total Shareholders 54,350.70 45,241.60 9,109.10 20.13%
Funds
NON-CURRENT
LIABILITIES
Long Term 5.7 14.1 -8.40 -59.57%
Borrowings
Deferred Tax 0 130.5 -130.50 -100.00%
Liabilities [Net]
Other Long Term 2,788.60 2,129.20 659.40 30.97%
Liabilities
Long Term Provisions 64.1 88.5 -24.40 -27.57%
Total Non-Current 2,858.40 2,362.30 496.10 21.00%
Liabilities
CURRENT
LIABILITIES
Short Term 7,673.40 5,791.20 1,882.20 32.50%
Borrowings
Trade Payables 4,685.10 4,348.50 336.60 7.74%
Other Current 9,446.90 6,705.30 2,741.60 40.89%
Liabilities
Short Term Provisions 1,368.30 1,287.40 80.90 6.28%
Total Current Liabilities 23,173.70 18,132.40 5,041.30 27.80%
Total Capital And 80,382.80 65,736.30 14,646.50 22.28%
Liabilities
ASSETS
NON-CURRENT
ASSETS
Tangible Assets 7,386.60 6,578.70 807.90 12.28%
Intangible Assets 651.1 709.4 -58.30 -8.22%
Capital Work-In- 1,584.50 1,848.00 -263.50 -14.26%
Progress
Fixed Assets 9,622.20 9,136.10 486.10 5.32%
Non-Current 16,557.20 8,206.70 8,350.50 101.75%
Investments
Deferred Tax Assets 53.3 47.4 5.90 12.45%
[Net]
Other Non-Current 2,377.90 2,966.60 -588.70 -19.84%
Assets
Total Non-Current 28,610.60 20,356.80 8,253.80 40.55%
Assets
CURRENT ASSETS
Current Investments 24,073.70 17,495.20 6,578.50 37.60%
Inventories 87.5 91 -3.50 -3.85%
Trade Receivables 9,295.40 8,046.20 1,249.20 15.53%
Cash And Cash 4,898.10 9,783.20 -4,885.10 -49.93%
Equivalents
Short Term Loans 1,913.00 4,201.50 -2,288.50 -54.47%
And Advances
Other Current Assets 11,504.50 5,762.40 5,742.10 99.65%
Total Current Assets 51,772.20 45,379.50 6,392.70 14.09%
Total Assets 80,382.80 65,736.30 14,646.50 22.28%
Comparative Profit & Loss

Standalone Profit & ------------------- in Rs. Cr.

Loss account ------------------
Mar 22 21-Mar Increase or Percentage
Decrease in Increase or
2022 Rs. Decrease in 2022
12 mths 12 mths
INCOME
Revenue From 59,574.40 50,299.40 9,275.00 18.44%
Operations [Gross]
Revenue From 59,574.40 50,299.40 9,275.00 18.44%
Operations [Net]
Other Operating 0 0 0.00
Revenues
Total Operating 59,574.40 50,299.40 9,275.00 18.44%
Revenues
Other Income 4,706.10 2,382.90 2,323.20 97.49%
Total Revenue 64,280.50 52,682.30 11,598.20 22.02%
EXPENSES
Purchase Of Stock-In 488.8 587.9 -99.10 -16.86%
Trade
Operating And Direct 14,109.60 10,675.40 3,434.20 32.17%
Expenses
Changes In Inventories -6.4 34.5 -40.90 -118.55%
Of FG,WIP And
Stock-In Trade
Employee Benefit 31,542.40 26,467.30 5,075.10 19.17%
Expenses
Finance Costs 367.4 402.6 -35.20 -8.74%
Depreciation And 1,485.70 1,349.30 136.40 10.11%
Amortisation Expenses
Other Expenses 1,028.80 480.5 548.30 114.11%
Total Expenses 49,016.30 39,997.50 9,018.80 22.55%
Profit/Loss Before Tax 15,264.20 12,684.80 2,579.40 20.33%
Tax Expenses-
Continued Operations
Current Tax 3,194.10 2,243.00 951.10 42.40%
Deferred Tax -65.2 380.9 -446.10 -117.12%
Total Tax Expenses 3,128.90 2,623.90 505.00 19.25%
Profit/Loss For The 12,135.30 10,060.90 2,074.40 20.62%
Period

Common Size Balance Sheet

Common Size Balance ------------------- in Rs. Cr. -------------------

Sheet
Mar 22 Percentage (%) 21-Mar Percentage (%)
12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 1,096.40 1.36% 1,095.80 1.67%
Total Share Capital 1,096.40 1.36% 1,095.80 1.67%
Reserves and Surplus 53,254.30 66.25% 44,145.80 67.16%
Total Reserves and 53,254.30 66.25% 44,145.80 67.16%
Surplus
Total Shareholders Funds 54,350.70 67.61% 45,241.60 68.82%
NON-CURRENT
LIABILITIES
Long Term Borrowings 5.7 0.01% 14.1 0.02%
Deferred Tax Liabilities 0 0.00% 130.5 0.20%
[Net]
Other Long Term 2,788.60 3.47% 2,129.20 3.24%
Liabilities
Long Term Provisions 64.1 0.08% 88.5 0.13%
Total Non-Current 2,858.40 3.56% 2,362.30 3.59%
Liabilities
CURRENT
LIABILITIES
Short Term Borrowings 7,673.40 9.55% 5,791.20 8.81%
Trade Payables 4,685.10 5.83% 4,348.50 6.62%
Other Current 9,446.90 11.75% 6,705.30 10.20%
Liabilities
Short Term Provisions 1,368.30 1.70% 1,287.40 1.96%
Total Current Liabilities 23,173.70 28.83% 18,132.40 27.58%
Total Capital And 80,382.80 100.00% 65,736.30 100.00%
Liabilities
ASSETS
NON-CURRENT
ASSETS
Tangible Assets 7,386.60 9.19% 6,578.70 10.01%
Intangible Assets 651.1 0.81% 709.4 1.08%
Capital Work-In- 1,584.50 1.97% 1,848.00 2.81%
Progress
Fixed Assets 9,622.20 11.97% 9,136.10 13.90%
Non-Current 16,557.20 20.60% 8,206.70 12.48%
Investments
Deferred Tax Assets 53.3 0.07% 47.4 0.07%
[Net]
Other Non-Current 2,377.90 2.96% 2,966.60 4.51%
Assets
Total Non-Current Assets 28,610.60 35.59% 20,356.80 30.97%
CURRENT ASSETS
Current Investments 24,073.70 29.95% 17,495.20 26.61%
Inventories 87.5 0.11% 91 0.14%
Trade Receivables 9,295.40 11.56% 8,046.20 12.24%
Cash And Cash 4,898.10 6.09% 9,783.20 14.88%
Equivalents
Short Term Loans And 1,913.00 2.38% 4,201.50 6.39%
Advances
OtherCurrentAssets 11,504.50 14.31% 5,762.40 8.77%
Total Current Assets 51,772.20 64.41% 45,379.50 69.03%
Total Assets 80,382.80 100.00% 65,736.30 100.00%
Common Size Profit Loss

Common Size Profit & ------------------- in Rs. Cr. -------------------

Loss account
Mar 22 Percentage 21-Mar Percentage
(%) (%)
12 mths 12 mths
INCOME
Revenue From Operations 59,574.40 92.68% 50,299.40 95.48%
[Gross]
Revenue From Operations 59,574.40 92.68% 50,299.40 95.48%
[Net]
Other Operating Revenues 0 0.00% 0 0.00%
Total Operating Revenues 59,574.40 92.68% 50,299.40 95.48%
Other Income 4,706.10 7.32% 2,382.90 4.52%
Total Revenue 64,280.50 100.00% 52,682.30 100.00%
EXPENSES
Purchase Of Stock-In 488.8 1.00% 587.9 1.47%
Trade
Operating And Direct 14,109.60 28.79% 10,675.40 26.69%
Expenses
Changes In Inventories Of -6.4 -0.01% 34.5 0.09%
FG,WIP And Stock-In
Trade
Employee Benefit 31,542.40 64.35% 26,467.30 66.17%
Expenses
Finance Costs 367.4 0.75% 402.6 1.01%
Depreciation And 1,485.70 3.03% 1,349.30 3.37%
Amortisation Expenses
Other Expenses 1,028.80 2.10% 480.5 1.20%
Total Expenses 49,016.30 100.00% 39,997.50 100.00%
Profit/Loss Before Tax 15,264.20 12,684.80
Tax Expenses-Continued
Operations
Current Tax 3,194.10 102.08% 2,243.00 85.48%
Deferred Tax -65.2 -2.08% 380.9 14.52%
Total Tax Expenses 3,128.90 100.00% 2,623.90 100.00%
Profit/Loss For The Period 12,135.30 10,060.90

Causes of variance in the financials of Wipro

Changes in revenue: A major rise or drop in revenue can have an impact on the company's
overall financials. For example, if Wipro's income falls as a result of increasing competition or
an economic downturn, profitability will fall and the balance sheet will suffer.

currency rate variations: Wipro works in numerous geographies, and currency rate fluctuations
can have a substantial influence on its financials. If the value of the Indian rupee declines
against major currencies such as the US dollar or the Euro, Wipro's sales and profits may rise.

Changes in operating expenses: Any increase or decrease in operating expenses might

have an impact on Wipro's profitability. For example, a sudden increase in the cost of raw
materials or staff compensation might have a detrimental impact on the bottom line and
the balance sheet.

Interest rate changes: A change in interest rates can have an impact on Wipro's borrowing
expenses. A rise in interest rates can increase the cost of borrowing, which can have a
negative impact on the balance sheet.

Changes in tax rules: Any changes in tax laws or regulations can have an influence on
Wipro's financials. For example, a sudden increase in corporation tax rates might reduce
profits and have a negative impact on the balance sheet.

Changes in competition: Increased competition may result in a decrease in Wipro's

revenue and profitability. If competitors provide comparable services at a lower cost or of
higher quality, Wipro's financials may suffer.

Changes in economic conditions: Any changes in the broader economic conditions can
have an influence on Wipro's financials. For example, a recession can reduce revenue and
profits, whereas a booming economy might raise revenue and profits.
 Possible solutions

Increased Revenue: The business might look for ways to boost its operational revenue by
introducing new products and services and expanding into new areas.

Focus on Cost Optimisation: To increase its profitability, Wipro can concentrate on reducing its
operating and direct expenses, employee benefit costs, and other costs.

Improve Accounts Receivable Collection: To increase cash flow and decrease the quantity of
unpaid debt, the company should streamline its accounts receivable procedure.

Reduce Long-Term Borrowings: In order to lower its overall debt load and strengthen its
financial stability, Wipro can concentrate on reducing its long-term borrowings.

Invest in research and development: By spending money on research and development, Wipro
may create new goods and services that will increase sales and make it more competitive.

Expand Non-current Investments: To create higher returns and improve overall financial
performance, the corporation can look into expanding its non-current investment portfolio.

Wipro can strengthen its inventory management process to cut inventory holding costs and
optimise working capital.

boost Dividends: To boost shareholder value and attract more investors, the company can
increase its dividend payout to shareholders. This can be accomplished by increasing
profitability and cash flow generation.

Implications of such solutions

Increasing revenue from operations: Wipro can improve its financial performance and
profitability by focusing on increasing revenue from operations. This can be accomplished by
extending product offerings, exploring new markets, and enhancing sales and marketing
methods.

Reducing operational expenses: In order to boost profit margins, Wipro can investigate strategies
to reduce operating expenses such as employee benefit expenses and other expenses. This can be
accomplished through the use of cost-cutting initiatives, streamlining operations, and increasing
efficiency.

Increasing R&D investments: Investing in R&D can help Wipro remain competitive and drive
innovation. This might assist the organisation in developing new products and services.

Debt reduction: Wipro can focus on debt reduction by repaying long-term borrowings, which can
improve the company's financial health and lower finance expenses.

Improving working capital management: Wipro can optimise its cash flow and reduce the
requirement for short-term borrowings by improving working capital management. This can be
accomplished by better inventory management, lower trade receivables, and higher trade
payables.

Increasing capital expenditure: Wipro can raise capital expenditure by investing in new
technology and infrastructure, which will help the company enhance operational efficiency and
lower long-term costs.

Comparison on the basis of financial ratios

1.) Liquidity Ratios

 i. The current ratio is: Wipro's current ratio in FY21 was 2.09, while Infosys' was
4.18.

Infosys' current ratio is greater than Wipro's, indicating that it is better positioned to satisfy its
short-term obligations.

ii. Quick Calculation: Wipro's quick ratio in FY21 was 2.02, while Infosys' was 4.18.

Infosys has a greater quick ratio than Wipro, indicating that it can fulfil its short-term obligations
using its liquid assets better.

iii. Absolute Liquid Ratio (ALR): In FY21, Wipro's absolute liquid ratio was 0.57, while
Infosys' was 0.66.

Infosys has a greater absolute liquid ratio than Wipro, indicating that it can meet current
obligations with its most liquid assets.

2.a) The operating ratio is: Wipro's operating ratio in FY21 was 79.95%, whereas Infosys' was
73.47%.

Infosys' operational ratio is lower than Wipro's, showing that it is more efficient in regulating its
operating expenses.

b.) Operating Profitability Ratio:Wipro's operational profit ratio in FY21 was 21.05%,
whereas Infosys' was 26.53%.

Infosys has a larger operating profit ratio than Wipro, showing that it makes more money from
its operations in relation to its revenue.

c.) Net profit margin: Wipro's net profit ratio in FY21 was 17.66%, whereas Infosys' was
22.75%.

Infosys has a larger net profit ratio than Wipro, indicating that it makes more money after
deducting all expenses, including taxes and interest payments.

d.) Gross Profit Ratio: This ratio calculates a company's profitability after deducting the cost of
products sold from revenue. A bigger gross profit margin is generally preferable because it
implies that the company is profiting more from its sales.
Infosys has a greater gross profit margin than Wipro, implying that it makes more money from
its sales. Wipro's gross profit ratio is calculated as (revenue minus cost of goods sold) / revenue *
100 = 31.96%. Gross Profit Ratio at Infosys = (Revenue - Cost of Goods Sold) / Revenue * 100
= 43.09%

Conclusion

It is clear by comparing Wipro and Infosys' financial statements and measures that Infosys is in a
better financial situation. First off, Infosys' higher revenue and net profitability in FY21 point to
the company's improved revenue generation capabilities and improved expense control. Second,
Infosys had larger resources and higher total assets, equity, reserves, and surplus, indicating a
more solid financial foundation. Additionally, Infosys has stronger liquidity ratios, such as the
current ratio, quick ratio, and absolute liquid ratio, signifying a higher level of liquidity and a
better ability to satisfy short-term obligations.

Infosys had greater profitability ratios, including operating profit margin, net profit margin,
return on assets, and return on equity, demonstrating better efficiency in producing profits from
its operations as well as stronger returns on assets and equity. As a result, it is clear from this
thorough analysis that Infosys is in a stronger financial situation than Wipro.