Beruflich Dokumente
Kultur Dokumente
ASSIGNMENT ON
RATIO ANALYSIS
INFOSYS LTD.
Mr. K.V. Kamath is the chairman of the board and Mr. S.D. Shibulal is
the CEO and Managing director as per Annual Report 2011-12
Mar '09
Mar '08
12 mths
12 mths
12 mths
12 mths
12 mths
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Init. Contribution Settler
Preference Share Application Money
Employee Stock Opiton
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Minority Interest
Policy Holders Funds
Group Share in Joint Venture
Total Liabilities
286
286
0
0
0
0
0
31,046.00
0
31,332.00
0
0
0
0
0
0
31,332.00
286
286
0
0
0
0
0
25,690.00
0
25,976.00
0
0
0
0
0
0
25,976.00
286
286
0
0
0
0
0
22,763.00
0
23,049.00
0
0
0
0
0
0
23,049.00
286
286
0
0
0
0
0
17,968.00
0
18,254.00
0
0
0
0
0
0
18,254.00
286
286
0
0
0
0
0
13,509.00
0
13,795.00
0
0
0
0
0
0
13,795.00
Mar '12
Mar '09
Mar '08
9,194.00
3,639.00
5,555.00
1,034.00
372
0
5,882.00
20,591.00
26,473.00
5,193.00
0
31,666.00
0
3,475.00
3,820.00
7,295.00
24,371.00
0
0
0
31,332.00
8,501.00
3,266.00
5,235.00
525
144
0
4,653.00
777
5,430.00
5,817.00
14,318.00
25,565.00
0
2,853.00
2,640.00
5,493.00
20,072.00
0
0
0
25,976.00
7,839.00
2,893.00
4,946.00
409
3,712.00
0
3,494.00
1,128.00
4,622.00
4,619.00
9,428.00
18,669.00
0
2,575.00
2,112.00
4,687.00
13,982.00
0
0
0
23,049.00
7,093.00
2,416.00
4,677.00
677
0
0
3,672.00
912
4,584.00
3,442.00
8,783.00
16,809.00
0
2,041.00
1,868.00
3,909.00
12,900.00
0
0
0
18,254.00
5,439.00
1,986.00
3,453.00
1,324.00
72
0
3,297.00
884
4,181.00
2,890.00
6,066.00
13,137.00
0
1,912.00
2,279.00
4,191.00
8,946.00
0
0
0
13,795.00
1,116.00
545.64
1,085.00
452.42
329
401.67
376
318.66
667
241.17
Mar '10
Mar '09
Mar '08
Mar '07
5
-156.23
478.99
444.74
93.59
5
-137.03
396.32
394.93
93.59
5
-125.66
378.7
313.69
93.59
5
-91.59
291.82
235.68
93.59
5
-76.89
243.22
191.94
93.59
32.61
28.3
29.51
26.67
26.67
23.84
23.84
35.74
26.31
26.15
452.42
452.42
35.74
34.57
29.42
30.59
29.95
29.95
26.49
26.49
34.1
27.18
26.8
401.67
401.67
34.1
33.18
28.47
29.67
31.79
31.79
26.48
26.48
40.25
32.8
35.2
318.66
318.66
40.25
31.38
26.69
27.8
30.17
29.15
26.8
26.8
38.65
33.77
32.4
241.17
241.17
38.65
31.61
27.25
27.91
30.49
30.49
27.1
27.1
37.42
34.26
33.98
197.04
197.04
37.42
Profitability Ratios
Operating Profit Margin(%)
Profit Before Interest And Tax Margin(%)
Gross Profit Margin(%)
Cash Profit Margin(%)
Adjusted Cash Margin(%)
Net Profit Margin(%)
Adjusted Net Profit Margin(%)
Return On Capital Employed(%)
Return On Net Worth(%)
Adjusted Return on Net Worth(%)
Return on Assets Excluding Revaluations
Return on Assets Including Revaluations
Return on Long Term Funds(%)
4.65
4.56
---
3.98
3.89
---
4.3
4.26
---
3.13
3.11
---
4.47
4.43
---
--5,069.50
3,845.50
--4,383.50
3,586.50
--2,703.33
2,250.67
--5,931.00
5,258.00
--4,726.00
4,371.00
-6.75
-3.63
1.09
3.63
-6.35
-3.29
1.02
3.29
-6.23
-3.39
1.23
3.39
-5.82
-3.51
1.27
3.51
-6.87
-3.43
1.3
3.43
--262.75
--221.33
--214.08
--192.94
--193.38
0.1
-0.47
--
0.1
-0.19
--
0.12
-0.6
--
0.17
-1.51
--
26.71
23.34
72.91
76.37
--
26.26
23.3
75.53
78.12
--
47.75
42.32
50.23
56.1
--
19.47
17.18
80.37
82.7
--
58.71
52.19
40.93
47.53
--
GROSS PROFIT RATIO IS THE RATIO OF GROSS PROFIT TO NET SALES I.E. SALES LESS SALES RETURNS. THE RATIO
THUS REFLECTS THE MARGIN OF PROFIT THAT A CONCERN IS ABLE TO EARN ON ITS TRADING AND MANUFACTURING
ACTIVITY. IT IS THE MOST COMMONLY CALCULATED RATIO. IT IS EMPLOYED FOR INTER-FIRM AND INTER-FIRM
COMPARISON OF TRADING RESULTS.
GP RATIO =GROSS PROFIT / (NET SALES 100)
INTERPRETATION OF GROSS
PROFIT MARGIN
The gross profit margin of Infosys reduces in the year
2009 but it increase tremendously in the year 2009 &
2010 as compare to previous years. The reason
being the company is getting more efficient in
production because of increase in demand. But it
slightly decrease in the year 2011 reason could be
the company has to cut price to generate sales.
NET PROFIT MARGIN IS NET PROFIT DIVIDED BY SALES AND EXPRESSED AS A PERCENTAGE. NET PROFIT IS EQUAL
TO SALES MINUS THE COST OF GOODS SOLD, OPERATING EXPENSES, INTEREST AND TAXES. FINANCIAL RATIOS,
SUCH AS NET PROFIT MARGIN, EXPRESS RELATIONSHIPS BETWEEN FINANCIAL STATEMENT ITEMS. THESE RATIOS
ARE USEFUL FOR ASSESSING PERFORMANCE OVER TIME AND COMPARING THE FINANCIAL RESULTS OF COMPANIES
IN THE SAME INDUSTRY. HOWEVER, THEY ARE USUALLY NOT VERY MEANINGFUL AS STANDALONE NUMBERS.
GROSS PROFIT MARGIN = GROSS PROFIT TOTAL REVENUE
INTERPRETATION OF NET
PROFIT MARGIN
The net profit margin of Infosys decreased over
the period from 2007-2011 because sales has
been increasing but profit after tax is increasing
at much slower rate
INTERPRETATION OF
OPERATING PROFIT MARGIN
The operating profit margin increases from the year
2008 to 2010. This is due to sales are increasing
faster than costs, which is the optimal situation for the
company. But in the year 2011 operating profit
margin decreases which is not a good sign for a
company.
RETURN ON CAPITAL EMPLOYED (ROCE) IS THE RATIO OF NET OPERATING PROFIT OF A COMPANY TO
ITS CAPITAL EMPLOYED. IT MEASURES THE PROFITABILITY OF A COMPANY BY EXPRESSING ITS
OPERATING PROFIT AS A PERCENTAGE OF ITS CAPITAL EMPLOYED.
ROCE =NET OPERATING PROFIT/CAPITAL EMPLOYED
WHERE CAPITAL EMPLOYED IS THE SUM OF STOCKHOLDERS' EQUITY AND LONG-TERM FINANCE.
INTERPRETATION OF RETURN
OF CAPITAL EMPLOYED
The Return on Capital Employed of Infosys
increases smoothly from the year 2007 to 2009
which means company generates more
earnings per rupee of capital employed. It
decreases in the year 2010 which indicates
lower profitability. But in the year 2011 it again
increases reason could be the company
reduces its capital investment.
CURRENT RATIO:
IT IS USED TO APPRAISE THE ABILITY OF THE COMPANY TO SATISFY ITS CURRENTDEBTS
OUT OF THE CURRENT ASSETS. GENERALLY, 2 TO 1 CURRENT RATIO IS CONSIDERED.THE
SATISFACTORY MINIMUM CURRENT RATIO= CURRENT ASSETS/CURRENT LIABILITIES
INTERPRETATION OF
CURRENT RATIO
The current ratio of Infosys is almost increasing
over the years except for the year 2008
because the current liablities in 2008 grew
proportionally more in comparison to current
asset in the same year. But overall its current
ratio is healthy enough which shows
companys current assets to meet its obligation
is increasing
INTERPRETATION OF QUICK
RATIO
In all 5 years the Quick Ratio of Infosys is above 1
which is good. If the company's liquidity ratio has
increased that indicates that a company is
experiencing solid top-line growth, quickly converting
receivables into cash, and easily able to cover its
financial obligations. If increased that means the
company does not manage their asset that well or
probably has more short term obligations. However,
the company does not seem to face any financial
distress in the future years.
INTERPRETATION OF
DEBTORS TURNOVER RATIO
The debtors turnover ratio of Infosys decreased in the
year 2008, it is because the huge difference in increase of
sales and debtors. Debtors increase significantly compare
to sales. It is due to decrease in debtors collection
period. This has result in decrease in debtors turnover
ratio. Thereafter we can see an increasing trend from
year 2008 to 2011 which indicates that a short lapse of
time between sales and the collection of cash or its
extension of credit and collection of accounts receivable
are efficient .
ASSET TURNOVER MEASURES A FIRM'S EFFICIENCY AT USING ITS ASSETS IN GENERATING SALES
OR REVENUE - THE HIGHER THE NUMBER THE BETTER. IT ALSO INDICATES PRICING STRATEGY:
COMPANIES WITH LOW PROFIT MARGINS TEND TO HAVE HIGH ASSET TURNOVER, WHILE THOSE
WITH HIGH PROFIT MARGINS HAVE LOW ASSET TURNOVER.
ASSET TURNOVER= NET SALES/AVERAGE TOTAL ASSET
INTERPRETATION OF ASSET
TURNOVER RATIO
The asset turnover Ratio of Infosys decreases from
the year 2008-2010. It may appears that the company
has utilised its assets less effectively. But we can see
enormous increase in the year 2011 reason being it
has increased its assets which may help in increase
in companys future growth.