Ratio Analysis of Hcl Tech

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Module Name: Financial Analysis & Management
(NOTE: Word count 3714 excluding Appendix and References)

Contents
1.About HCL Technologies4
2.Objectives of Study6
2.1Scope6
3.Concept of Financial Statement & Ratio Analysis7
3.1Financial Statement7
3.2Ratio Analysis7
3.3Significance of Ratio Analysis in Financial Statement8
3.4Limitations of Ratio Analysis9
4.Data Analysis11
4.1Liquidity Ratio11
4.1.1Current Ratio12
4.1.2Quick Ratio13
4.1.3Net Working Capital Ratio14
4.2Leverage Ratio16
4.2.1Debt Ratio16
4.2.2Debt Equity Ratio17
4.2.3Interest Coverage Ratio19
4.3Activity Ratio20
4.3.1Inventory turnover Ratio20
4.3.2Inventory Conversion period22
4.3.3Total Assets Turnover Ratio24
4.4Profitability Ratio25
4.4.1Net Profit Ratio25
4.4.2Net Profit Based On No PAT26
4.4.3Return on Investment Ratio28
4.4.4Return on Equity Ratio29
5.Findings (SWOT Analysis)31
6.Recommendations34
7.Appendix35
Appendix 1: Balance Sheet35
Appendix 2: Profit & Loss Account36
Appendix 3: Projections for Financial Year 2013, 2014, 201537 8.Reference40

1. About HCL Technologies
HCL Tech is India’s fourth-largest IT services company. It provides software-led IT solutions, remote infrastructure management and BPO services, focused mainly on transformational outsourcing. The company leverages its extensive offshore infrastructure and global network of offices in 31 countries to deliver solutions across selected verticals including financial services, retail and consumer, life sciences, aerospace, automotive, semiconductors, telecom, media publishing and entertainment. HCL takes pride in its philosophy of “Employees First, Customers Second” which empowers their 84,403 employees to create a real value for the customers. HCL Technologies, along with its subsidiaries, had consolidated revenues of US$ 4.5 billion, as on 31st March 2013.

HCL Leadership team

2. Objectives of Study
Development of industries depends on several factors such as financial, personnel, technology, quality of product and marketing. Financial aspects assume a significant role in determining the growth of industries. All the company’s operations virtually affect its need for cash. Most of these data covering operations area are however outside the direct responsibility of the financial executives. The firm whose present operations are inherently difficult should try to makes its financial analysis to enable its management to stay on top of its working position. In this context I am undertaking financial ratio analysis of HCL Technologies to examine and understand financial performance of the company. Using ratio analysis this project will provide the insights of – * The growth and development of HCL Technologies for last 5 years (FY 08-12) * The behavior of liquidity and profitability of HCL Technologies * The factors determining the liquidity and profitability of HCL Technologies

2.1 Scope
The scope of the study is limited to financial data published in the annual reports of the company every year. The analysis is done to suggest possible solutions for financial growth of the organization. This study is carried out for 5 years (2008-2012). Also data provided by external agencies are used for analysis of future predication.

3. Concept of Financial Statement & Ratio Analysis
2
3.2 Financial Statement
To understand the information contained in financial statements with a view to know the strength or weaknesses of the organization, to make forecast about future prospects and thereby enabling the management and external parties to take different decisions regarding the operations. Fundamental analysis has a very broad scope. One aspect looks at the general (qualitative) factors of the company. The other side considers tangible and measurable factors (quantitative). This means crunching and analyzing...
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