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FINANCIAL RATIO ANALYSIS

Submitted By: Kinnar Majithia PGDBM 2010-12 Roll No: P1026

Sydenham Institute of Management Studies, Research and Entrepreneurship Education

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ACKNOWLEDGEMENT
I take the opportunity to thank Prof. Dharmendra Jain for giving me the opportunity to do a study of financial statements and also analyze them through this project on analysis of financial ratios of Tata Consultancy Services Ltd. I would also like to thank everyone else for helping me in carrying out this study.

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INDEX
About Tata Consultancy Services Ltd. ..................................................................................................... 4 Performance Highlights for 2009-10....................................................................................................... 5 Financial Statements for 2009-10 ........................................................................................................... 7 Financial Ratio Analysis ......................................................................................................................... 10 Bibliography .......................................................................................................................................... 22

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ABOUT TATA CONSULTANCY SERVICES LTD.
Tata Consultancy Services Limited (TCS) is the world-leading information technology consulting, services, and business process outsourcing organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value.

TCS commenced operations in 1968, when the IT services industry didn’t exist as it does today. Now, with a presence in 34 countries across 6 continents, & a comprehensive range of services across diverse industries, TCS is one of the world's leading Information Technology companies. Six of the Fortune top 10 companies are among their valued customers.

TCS is part of one of Asia's largest conglomerates - the TATA Group - which, with its interests in Energy, Telecommunications, Financial Services, Chemicals, Engineering & Materials, provides TCS with a grounded understanding of specific business challenges facing global companies.

VISION: To be one of the top 10 global companies by 2010 VALUES: Leading change, Integrity, Respect for Individual, Excellence, Learning and sharing

Services and Solutions

TCS is a leading IT services provider, with a wide breadth of services across the entire Information technology spectrum. TCS helps clients identify opportunities of improvement, build the roadmap to getting there & leverage technology to make it possible, by providing the following services & solutions:

      

Consulting. IT Services. BPO. IT Infrastructure Services. Engineering and Industrial Services. Product Based Solutions. Advertisements 4

PERFORMANCE HIGHLIGHTS (2009-10)

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FINANCIAL STATEMENTS
PERFORMANCE SUMMARY

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BALANCE SHEET (Consolidated)

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PROFIT AND LOSS ACCOUNT (Consolidated)

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FINANCIAL RATIOS
Use of Financial ratios: They are relevant in assessing the performance in respect to:     Liquidity Position: Solvency Position Operating Efficiency Profitability

Limitations of Financial Ratios:  Calculated from financial statements which are themselves subject to many limitations  For analysis, many ratios and factors are to be considered  Calculated ratios require comparison  Various terms are to be explained for inter-firm comparison  Price level to be considered while making comparison  Ratio analysis is based on judgment of the analyst

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LIQUIDITY RATIOS

 Current Ratio:

      

Also known as ‘Working Capital Ratio’, ‘Solvency Ratio’ or ‘2 to 1 ratio’ Ratio indicates the relationship between Current Assets and Current Liabilities. Current Assets are assets held for an accounting period and Current Liabilities Current...
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