astudy on financial performance analysis of brodridge financial solutions ltd-5

7/29/2019 Astudy on Financial Performance Analysis of Brodridge Financial Solutions Ltd-5

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A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF

BROADRIDGE FINANCIAL SOLUTIONS LTD.

CHAPTER-I

INTRODUCTION :-

Financial Management is that managerial activity which is concerned with the planning and

controlling of the firms financial resources. Though it was a branch of economics till1890 as a

separate or discipline it is of recent origin. Financial Management is concerned with the duties of

the finance manager in a business firm. He performs such varied tasks as budgeting, financial

forecasting, cash management, credit administration, investment analysis and funds

procurement. The recent trend towards globalization of business activity has created new

demands and opportunities in managerial finance.

Financial statements are prepared and presented for the external users of accounting information.

As these statements are used by investors and financial analysts to examine the firms

performance in order to make investment decisions, they should be prepared very carefully and

contain as much investment decisions; they should be prepared very carefully and contain as

much information as possible. Preparation of the financial statement is the responsibility of top

management. The financial statements are generally prepared from the accounting records

maintained by the firm.

Ratio analysis is an important aspect which influences the long term stability, profitability and

liquidity of an organization. Usually, financial ratios are said to be the parameters of the

financial performance. The Evaluation of financial performance had been taken up for the study

with Broadridge financial solution ltd as the project. Analysis of Financial performances is of

greater assistance in locating the weak spots at the Broadridge financial solution Ltd even

though the overall performance may be satisfactory.

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NEED FOR THE STUDY :-

Ratio analysis is the process of identifying the financial strength and weakness of the firm by

properly establishing relationship between the items of the balance sheet and profit and loss

accounts. Financial analysis can be undertaken by management of firm or by parties of outside

the firm, viz own as creditors, investors, and others. The nature of analysis will differ depending

on the purpose of analysis.

OBJECTIVES OF THE STUDY :-

To Analysis the financial position of the Broadridge financial solutions.

To know the liquidity position of the Broadridge financial solutions through Liquidity ratios.

To study the Earning capacity of the Broadridge financial solutions through Efficiency ratios.

To know the profitability performance of the Broadridge financial solutions through

profitability ratios.

To know the capability of payment of interest & dividends.

RESEARCH METHODOLOGY :-

Methods of Data Collection :-

Primary data:

Primary data is the first hand information that is collected during the period of research. Primary

data has been collected through discussions held with the staffs in the accounts department.

Some types of information were gathered through oral conversations with the cashier, taxation

officer etc.

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Secondary data:

Secondary data studies whole company records and companys balance sheet and profit and loss

account statements in which the project work has been done. In addition, a number of reference

books, journals and reports were also used to formulate the theoretical model for the study. And

some information was also drawn from the websites.

SCOPE OF THE STUDY :-

The study Ratio Analysis of Broadridge financial solutions mainly focuses on profitability

performance and capacity of payment of interest and dividends and also liquidity and solvency

position of the Broadridge financial solutions. The study is based on Balance sheet and Profit

and Loss Statements and cash flow statement.

LIMITATIONS OF TE STUDY :-

Time was an important limiting factor .

The study takes into consideration only past 5 years.

Further, the study is based on secondary data.

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CHAPTERISATION :-

OBJECTIVES OF FINANCIAL MANAGEMENT :-

Financial management is concerned with procurement and use of funds. Its main aim is to use

business funds in such a way that the firms value/earnings are maximized. There are various

alternatives available for using business funds. Each alternative course has to be evaluated in

detail.

The pros and cons of various decisions have to look into before making a final selection. The

decisions will have take into consideration the commercial strategy of the business. Financial

management provides a framework for selecting a proper course of action and deciding a viable

commercial strategy. The main objective of a business is to maximize the owners economic

welfare. This objective can be achieved by:

1. Profit Maximization

2. Wealth maximization

1. Profit maximization :

Profit earning is the main aim of every economic activity. A business being an economic

institution must earn profit to cover its costs and provide funds for growth. No business can

service without earning profit. Profits are a measure of efficiency of a business enterprise. Profits

also serve as a protection against risks which cannot be ensured. The accumulated profits enable

a business to face risks like fall in prices, competition from other units, adverse government

policies etc. Thus, profit maximization is considered as the main objective of business:

(i) When profit earning is the aim of business then profit maximization should be the obviousobjective.

(ii) Profitability is a barometer for measuring efficiency and economic prosperity of a business

enterprise, thus, profit maximization is justified on the grounds of rationality.

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(iii) Economic and business conditions do not remain same at all the times. There may be

adverse business conditions like recession, depression, severe competition etc. A business will

be able to service under unfavorable situation only if it has some past earnings to rely upon.

Therefore a business should try to earn more and more when situation is favorable.

(iv) Profits are the main sources of finance for the growth of a business. So, a business should

aim at maximization of profits for enabling its growth and development.

(v) Profitability is essential for fulfilling social goals also. A firm by pursuing the objective of

profit maximization also maximizes socio- economic welfare.

2. Wealth maximization :

Wealth maximization is the appropriate objective of an enterprise financial theory asserts that

wealth maximization is the single substitute for stockholders utility. When the firm maximizes

the stockholders wealth, the individual stockholder can use this wealth to maximize his

individual utility. It means that by maximizing stockholders wealth firm is operating

consistently towards maximizing stockholders utility.

About Financial Management :-

Financial management may refer to Managerial finance, a branch of finance that concernsitself with the managerial significance of finance techniques.

Corporate finance, a type of finance dealing with monetary decisions that business

enterprises make and the tools and analysis used to make these decisions.

Financial management for IT services, financial management of IT assets and resources

Methods of Financial Analysis :

The analysis and interpretation of financial statements is used to determine the financial position

and results of operations as well. A number of methods or devices are used to study the

relationship between different statements. An effort is made to use those devices which clearly

analyze the position of the enterprise. The following are the methods of analysis are generally

used:

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1. Comparative statements;

2. Common-size statements;

3. Funds flow analysis;

4. Ratio analysis;

1. Comparative Statements :

The Comparative financial statements are statements of financial position at different periods; of

time. The elements of financial position are shown in comparative form so as to give an idea of

financial position at two or more periods. Any statement prepared in comparative form will be

converted into comparative statements. From practical point of view, generally, two financial

statements (balance sheet and income statement) are prepared in comparative form for financial

analysis purpose. Not only the comparison of the figures of two periods but also be relationship

between balance sheet and income statement enables an in depth study of financial position and

operative results.

i) Comparative Income Statement:

The income statement gives the results of the operations of business. The comparative income

statement gives an idea of the progress of a business over a period of time. The changes in

absolute data in money values and percentage can be determined to analyze the profitability of

the business.

ii) Comparative Balance Sheet:

The comparative balance sheet analysis is the study of the trend of the same items, group of

items and computed items in two or more balance sheets of the same business enterprise on

different dates. The changes in periodic balance sheet items reflect the conduct of a business.

The changes can be observed by comparison of the balance sheet at the beginning and at the end

of a period and these changes can help in forming an opinion about the progress of an enterprise.

2. Common-size Statements :

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The common-size statements, balance sheet and income statement are shown analytical

percentages. The figures are shown as percentages of total assets, total liabilities and total sales.

The total assets are taken as 100 and different assets are expressed as percentage of the total.

Similarly, various liabilities are taken as part of total liabilities, these statements also known as

component percentage because every individual item is stated as percentage of the total 100.The

short comings in comparative statements and trend percentages where changes in items could not

be compared with the totals have been covered up. The analyst is able to assess the figures in

relation to total values.

i) Common-size Income Statement:

The items in income statement can be shown as percentages of sales to show the relation of each

item to sales. A significant relationship can be established between items of income statement

and volume of sales. The increase in sales will certainly increase selling expenses and not

administrative and financial expenses. In case the volume of sales increases to considerable

extent, administrative and financial expenses may go up. In case total sales are declining, the

selling expenses should be reduced at once. So, a relationship is established between sales and

other items in income statement and this relationship is helpful in evaluating operational

activities of the enterprise.

ii) Common-size Balance Sheet:

A statement in which balance sheet items are expressed as the ratio of each asset to total assets

and the ratio of each liability is expressed as a ratio of total liabilities is called common size

balance sheet. The common size balance sheet can be used to compare companies of different

size. The comparison of figures in different periods is not useful because total figures may be

affected by a number of factors. It is not possible to establish standard norms for various assets.

3. Funds flow analysis :

Funds flow statement shows the movement of funds and is a report of the financial operations of

the business undertaking. It indicates various means by which funds were obtained during a

particular period and the ways in which these funds were employed. The flow of funds occur

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when a transaction changes on the one hand and non-current account and on the other a current

account & vice- versa.

4. Ratio analysis :

Ratio analysis is a powerful tool of financial analysis. It is used as benchmark for calculating the

financial position and performance of a firm. The absolute accounting figure reported in the

financial statements does not provide the meaningful performance of financial position in the

firm, ratio helps to summarize the large quantity of data to make qualitative judgment about the

firms performance.

Importance and Advantages of Ratio Analysis :-

Importance And Advantages of Ratio Analysis Ratio analysis is an important tool for analyzing

the company's financial performance. The following are the important advantages of the

accounting ratios.

RATIO ANALYSIS :-

Introduction :

Ratio analysis is the universally used technique for analysis of financial statements. Ratio

analysis is a very powerful analytical tool useful for measuring performance of an organization.

A ratio is a statistical yardstick that provides a measure of relationship between the variables or

figures.

Ratio analysis is a widely used too of financial analysis. It is defined as the systematic use ratio

to interpret the financial statements so that the strengths and weaknesses if a firm as well as its

historical performance and current financial condition can be determined. The term ratio refers to

the numerical or quantitative relationship between two items/variables.

The ratio analysis helps the management to analyze the past performance of the firm and to make

further projections. Ratio analysis allows interested parties like shareholders, investors, creditors,

Government and analysis to make an evaluation certain aspects of a firms performance.

Definitions of Ratio Analysis :

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1) A Ratio is defined as: -

The indicated quotient of the mathematical expression and the relationship between two or

more things.

In financial analysis, a ratio is used as an index of yardstick for evaluating position and

performance of a firm.

2) A Ratio is defined, as: -

Ratio analysis is a process of analysis of the ratios in such a manner, so that management can

take actions on of Standard performances.

Importance of Ratio Analysis :

The importance of the ratio analysis lines in the fact that it presents facts on a comparative basis

and enables the drawing of inferences regarding the performance of a firm. Ratio analysis is

relevant in assessing the performance of a firm in respect of the following

1. Liquidity Position:

With the help of the ratio analysis conclusions can be drawn regarding the liquidity position of

affirm. The liquidity position of a firm would be satisfactory if it is able to meet its current

obligations when they become due. The liquidity ratios are particularly in credit analysis banks

and other suppliers of short-loans.

2. Long- term solvency: -

Ratio analysis is equally useful for assessing the long-term solvency is measured by the leverage

capital structure and profitability ratio, which focus on earning power and operating efficiency.

Ratio analysis reveals the strength and weakness of a firm in this respect.

3. Operating Efficiency:-

Ratio analysis throws light on the degree of efficiency in the management and utilized of assets.

Various activity ratios measure this kind of operational efficiency. The solvency of a firm

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depends upon the sales revenues generated by the use of its assets total as well as its

components.

4. Overall Profitability: -

The management constantly concerned about the overall profitability of the enterprise that is

they are concern about the ability of firm to meet its short term as well as long-term obligations

to its creditors to ensure a reasonable return to its owner and secure optimum utilization of the

asset of the firm.

5) Inter firm Comparison: -

Ratio analysis is one of the popular technique uses to compare ratio of firm with the industrial

average. A single figure related to some standards an inter firm comparison. Would demonstrate

the relative position vis--vis competitors. If any variance is found the firm can identify the

probable results and in that light, it takes remedial measures.

6) Trend Analysis:-

Ratio analysis enables a firm to take the time dimension in to account that is it reveals whether

the financial position of affirm is made possible by the use of trend analysis. The firms

movement may be favorable.

Types of Ratios :

The various group of purpose are as follows.

a) Short Term Solvency Ratios.

b) Long Term Solvency Ratios.

c) Profitability Ratios.

d) Turnover Ratios.

e) Expenses Ratios.

A) Short term solvency Ratios / Liquidity Ratios:-

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Liquidity ratios measures short-term liquidity of firm. Management can employ these ratios to

ascertain how efficiently they are managing working capital. The Liquidity Ratios measures the

ability of a firm to meet its short-term obligations and reflect the short-term financial solvency of

a firm.

1. Current Ratio.

2. Quick Ratio or Acid Test Ratio.

1. Current Ratio:-

Current ratio is defined as the ratio of current assets to current liabilities current liability.

Current ratio means those assents convertible or expected to be converted into cash within a

year. Current liabilities are those liabilities, which are to be paid of within the same period.

Current assets include cash in hand and at bank, marketable securities, debtors, prepaid expenses

etc. Current liabilities include outstand or accrued expenses, Sundry creditors, Bills payable,

Provisions for taxation etc.

Thus, current ratio is an index of firms financial stability. The logic behind current ratio is that

cash need not be available to meet all current liabilities on particular date. But there should be

good prospects for an adequate inflow of cash indicated by the amount of individual component

current assets.

A high current ratio is an assurance that the firm will have adequate funds to pay current

liability.

Current Ratios = Current Assets / Current Liability

2. Quick Ratio / Acid Test:-

Quick ratio is the ratio of quick assets to current liability. Quick assets are those, which can be

converted into cash without diminution in their value. Which assets include cash, bank and

sundry debtors. Quick Ratio is more rigorous test of liquidity than current ratio since; it

eliminate. Inventories and prepaid expenses as a part of current assets. A high quick ratio

compared to current ratio indicates under stocking. While a low quick ratio may indicate

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overstocking. A quick ratio of 1:1 is assumed as standard in theory. But this may very season to

seasons and also from Business to Business.

Quick Ratio = Quick Assets / Quick liability

B) Long term Solvency Ratio or Leverage Ratio:-

Solvency ratio are those ratio calculated to determine the firms ability to meet its long term

obligations. The long term obligations include the claims of debentures holders and other

financial institutions which have offered long term and medium term loans to the firm. The

solvency position of a firm can be determined with the help of following ratio:

1. Debt Equity Ratio:-

2. Shareholder Equity Ratio:-

3. Interest Coverage Ratio

4. Fixed Assets to long term fund

5. Capital Gearing Ratio

1) Debt Equity Ratio:-

Debts equity ratio is those calculated to know the extent of outsider fund and shareholder funds

used in acquiring the assets for a firm in other words, it is calculated to measure the relative

claim of outsiders and share holder against the assets of a firm. It is also called as external

internal equity ratio or debt to net worth ratio.

Debt or outsider fund: An outsider fund refers to long term liabilities. Some writer are of the

opinion that preference share should be considered as outsiders funds for the reason that

dividend payable on these shares is fixed and the amount of these shares may be redeemed after

expiry a stipulated period. Similarly, there is a controversy regarding current liabilities also.

Some writers are of the opinion that current liabilities should be considered as outsiders funds

for the reason that they represent the firm obligations to outsiders. However we are of the

opinion that debt equity ratio may be calculated excluding current liabilities because they are

repayable with in a very short period and these liabilities widely fluctuate during a year.

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Shareholder funds: Equity share capital + preference share capital + all accumulated profits (i.e.

both revenue and capital reserves) less accumulated losses.

A low debt equity ratio indicates that the interests of outsiders are safe and guarded and a firm

need not worry about their payment. On the other hand, a high debt equity ratio indicates that the

claims of outsiders are more than the shareholders, their interests are not safe and they (outsider)

have to bear the probable future losses.

Debt Equity Ratio = Long Term / Equity Capital.

2) Shareholder Equity Ratio:-

The Shareholders Equity Ratio is the ratio of Shareholders Equity & Total Capital employed. It

is calculated by dividing the Shareholders Equity & Total Capital employed.

This is an important ratio for determining the long - term solvency of a company. In general the

higher the share of owned capital, proprietors in the total capital of the company, the less is the

like hood of insolvency in future, given normally efficient management. The general principle is

that more stable the earnings of the business, lower will be the equity ratio which would be

considered acceptable and safe.

Shareholder equity ratio= Shareholder Equity/Total Capital Employed

3) Interest Coverage Ratio:-

It is also known as time interest-earned ratio. this ratio measures the debt servicing capacity

of a firm in so far as fixed interest on long-term loan is concerned. It is determined by dividing

the operating profits or earnings before interest and taxes (EBIT) by the fixed interest charges on

loans. Thus,

Interest coverage = EBIT / Interest

It should be noted that this ratio uses the concept of net profits before taxed because interest is

tax-deductible so that tax is calculated after paying interest on long term loan. This ratio, as the

name suggests, indicates the extent to which a fall in EBIT is tolerable in that the ability of the

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firm to service its interest payments would not be adversely affected. For instance, an interest

coverage of 10 times would imply that even if the firms EBIT were to decline to one-tenth of

the present level, the operating profits available for servicing the interest on loan would still be

equivalent to the claims of the lenders. On the other hand, coverage of five times would indicate

that a fall in operating earnings only to up to one-fifth level can be tolerated. From the point of

view of the lenders, the larger the coverage, the greater is the ability of the firm to handle fixed-

charges liabilities and the more assured is the payment of interest to them. However, too high a

ratio may imply unused debt capacity. In contrast, a low ratio is a danger signal that the firm is

using excessive debt and does not have the ability to offer assured payment of interest to the

lenders.

4) Fixed Assets to long term fund:-

It reflects the security of fixed obligation. It indicates, to some extent, whether or not additional

creditor funds may be obtained by using the same security.

Fixed Assets to long term fund = Fixed Assets/ Long Term Fund

5) Capital Gearing Ratio:-

Capital Gearing indicates the relationship between equity

Shareholders funds and fixed interest bearing debentures / loans. If the fixed interest bearing

debentures exceeds equity shareholders funds, it is called Highly geared it is called Low

geared capital and if both are equal, it is called Evenly geared capital.

Capital Gearing Ratio = Equity shareholder funds / long term + unsecured loans.

C) Profitability Ratios:-

The purpose of study and analysis of profitability ratio to help assessing the adequacy of profits

earned by the company and also to discover whether profitability is increasing of declining. The

profitability of the firm is the net result of a large number of policies and decisions. The

profitability ratios show the combined effects of liquidity, asset management and debt

management on operating results. Profitability ratios are measured with reference to sales,

capital employed, total assets employed, shareholders funds etc.

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1. Returns on Capital Employed or Return on Investment.

2. Cash Profit Ratio.

3. Return on Shareholders Fund Ratio.

4. Gross Profit Ratio.

5. Net Profit Ratio.

1. Returns on Capital Employed or Return on Investment:-

A return on Capital Employed is determined by divining Net Profit by Capital Employed.

ROI = EAT + Interest / Total Capital Employed *100

The strategic aim of a business enterprise is to earn a return on capital. If in any particular case,

the return in long run is not satisfactory, then the deficiency should be corrected or the activity is

abandoned for a more favorable one.

2. Cash Profit Ratio:-

Cash Profit Ratio is computed using cash flow business operation as the numerator. This vale is

determined by adding non-cash expenses, such as depreciation and amortization to net profits

available to equity owners. The ratio indicates the cash generating ability (per equity share) of

the firm. Like EPS, cash EPS should be used with caution. It is beset with all the limitation

associated with EPS measure.

Cash Profit Ratio = Net profits + Deprecation / Net sales*100

3. Return on Shareholders Fund Ratio:-

According to this ratio, profitability is measured by dividing the net profits after taxes (but

before preference dividend) by the average total shareholders equity. The term shareholders

equity includes (i) preference share capital; (ii) ordinary shareholders equity consisting of (a)

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equity share capital, (b) share premium, and (c) reserves and surplus less accumulated losses.

The ordinary shareholders equity is also referred to as net worth. Thus,

Return on total shareholders equity = Net profit / shareholders equity*100

The ratio reveals how profitably the owners funds have been utilized by the firm. A comparison

of this ratio with that of similar firms as also with the industry average will throw light on the

relative performance and strength of the firm.

4. Gross Profit Ratio:-

The ratio measures the gross profit margin on the total net sales made by the company. The gross

profit represents the excess of sales proceeds during the period under observation over their cost,

before taking into account administration, selling and distribution and financing charges. The

ratio measures the efficiency of the companys operations and this can also be compared with the

previous years results to ascertain the efficiency partners with respect to the precious year.

Gross Profit Ratio = GP / Sales *100

5. Net Profit Ratio:-

The net profit ratio measures the relationship between net profit and Income from Sales in

percentage.

Net Profit Ratio = Net Profit / Sales *100

The ratio of net profit to income from sales expresses the cost price effectiveness of the

operation. A high net profit ratio would ensure adequate return on investment. A low net profit

ratio has the opposite implications.

D) Turnover Ratio:-

The efficiency or activity ratio are those ratio calculated to measure the operational efficiency of

a business concern. The operational efficiency a firm is judged based on its profits earning

capacity and the optimum utilization of its available resources in accordance with financial

policies related to its operation.

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These ratios are also called as Turnover Ratio, Performance Ratio or Current Assets

Movement Ratio because they measure the speed with which the assets are converted into sales.

All the ratios coming under this category are calculated with reference to sales or cost of sales

and expressed in number of times say, 6 times, etc. A number of turnover ratios can be

calculated, such as,

1) Inventory Turnover Ratio (In Times).

2) Debtors Turnover Ratio - Average Collection Period.

3) Fixed Assets Turnover Ratio.

1) Inventory Turnover Ratio (In Times):-

The inventory turnover, or stock turnover, measures how fast the inventory is moving through

the firm and generating sales. The inventory turnover reflects the efficiency of inventory

management. The higher the ratio, the more efficient the management of inventory turnover may

be caused by a low level of inventory which may result in frequent stock outs and loss of sales

and customer goodwill.

Notice that as inventories tend to change over that year, we use the average of the inventories at

the beginning and end of the year. In general, average may be used when a flow figure is related

to a stock figure.

Inventory Turnover Ratio = Cost of goods sold / Average total stock.

2) Debtors Turnover Ratio and Average Collection Period :-

A firm may sell goods on cash as well as on credit. When the goods are sold on credit, the parties

to whom the goods have been sold, are called as debtors or book-debts in accounting

terminology. There must be proper credit collection policy to ensure proper collection of debts

without which there is every possibility of outstanding debt becoming bad. Therefore, Debtors

turnover ratio is calculated to measure the efficiency of credit promotion policy and credit

collection policy. Debtors turnover ratio indicates the speed with which the debtors are turnover

during a year. It is expressed in number of times the debtors are turned over.

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Higher Debtors Turnover Ratio indicates more efficient collection of debts and signifies the

more liquidity of debts and lowers Debtors Turnover Ratio, more in efficient collection of debts

and signifies the less liquidity of debts.

Debtors turnover = Total credit sales/Average sundry debtors.

The quality of debtors can be evaluated by ascertaining average collection period also. This is

calculated to know how many days credit is outstanding. Average collection period serves as

check on collection of Outstanding balances from customers. A high average collection period

indicates inefficient collection of debts and it affects liquidity position of a firm, whereas a low

average collection period indicates better quality of debts and sound liquidity position of a firm.

Average collection period = total days in a year / Debtors turnover Ratio

3) Fixed Assets Turnover Ratio:-

This ratio is calculated to measure the adequacy or otherwise of investment in fixed assets. This

ratio is very significant for the manufacturing concerns. High ratio indicates efficiency in work

performance where as low ratio means inadequate investment in fixed assets.

Fixed Assets Turnover Ratio = Sales / Fixed Assets.

E) Expenses Ratios:-

Another profitability ratio related to sales is the Expenses Ratio. It is computed by dividing

expenses by sales. The term expenses includes

1) cost of goods sold,

2) administrative expenses,

3) selling and distribution expenses,

4) financial expenses but excludes taxes, dividends and extraordinary losses due to theft of

goods, good destroyed by fire and so on.

There are different variants of expense ratios. That is listed below

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1) Cost of goods sold ratio:-

The cost of goods sold ratio shows what percentage share of sales is consumed by cost of goods

and, conversely, what proportion is available for meeting expenses such as selling general

distribution expenses as well as financial expenses consisting of taxes, interest and dividend, and

so on.

The expenses ratio is, therefore, very important for analyzing the profitability of a firm. It should

be compared over a period of time with the industry average as well as firms of similar type. As

a working proposition, a low ratio is favorable, while a high is unfavorable.

Cost of goods sold Ratio = Cost of goods sold / Net sales *100

2) Operating expenses ratio:-

The ratio is test of the operational efficiency with which the business is being carried. It indicates

the managerial ability to control the operating expenses. Operating expenses Ratio indicate

company ability to general profits out of its available resources with control of management

therefore low operation ratio is better.

Operating expenses Ratio = Administrative expenses + Selling Expenses / Net sales *100.

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CHAPTER-II

COMPANY PROFILE :-

About Broadridge :-

Broadridge is a technology Services Company focused on global capital markets. Broadridge is

the market leader enabling secure and accurate processing of information for communications

and securities transactions among issuers, investors and financial intermediaries. Broadridge

builds the infrastructure that underpins proxy services for over 90% of public companies and

mutual funds in North America; processes more than $3 trillion in fixed-income and equity

trades per day; and saves companies billions annually through its technology solutions.

History :-

Broadridge is the former Brokerage Services division of ADP. On March 30th, 2007, we spun

off from ADP and began operating as an independent public company. Our company has more

than 40 years of history of providing innovative solutions to the financial services industry and

publicly held companies. In 1962, the Brokerage Services division of ADP opened for business

with one client, processing an average of 300 trades per night. In 1979, we expanded our U.S.-

based securities processing solutions to process Canadian securities.

We made significant additions to our Securities Processing Solutions business through two key

acquisitions in the mid-1990s. In 1995, we acquired a London-based provider of multi-currency

clearance and settlement services, in order to become a global supplier of transaction processing

services. In 1996, we acquired a provider of institutional fixed income transaction processing

systems. In fiscal year 2008, we processed on average approximately $3 trillion daily in fixed

income trades.

We began offering our proxy services in 1989. The proxy services business, which developed

into our Investor Communication Solutions business, leveraged the information processing

systems and infrastructure of our Securities Processing Solutions business. Our proxy services

offering attracted 31 major clients in its first year of operations. In 1992, we acquired The

Independent Election Corporation of America, further increasing our proxy services capabilities.

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By 1999, we were handling over 90% of the investor communication distributions for all

securities held on record by banks and broker-dealers in the U.S.from proxy statements to

annual reports. During the 1990s, we expanded our proxy services business to serve security

owners of Canadian and United Kingdom issuers and we began offering a complete outsourced

solution for international proxies.

In 1998, having previously provided print and distribution services as an accommodation to our

securities processing and proxy clients, we decided to focus on account statement and reporting

services. In 2001, we developed and released Post Edge to meet the need for electronic

distribution and archiving of all investor communications.

In 2004, we entered the securities clearing business by purchasing Bank of America

Corporations U.S. Clearing and Broker Dealer Services businesses. The following year we

commenced offering our unique business process outsourcing service to self-clearing U.S.

broker-dealers.

In 2007, we became the new independent company Broadridge Financial Solutions, Inc.

Headquartered in Lake Success, New York, our international presence spans regional and local

centers across the United States, Canada, Europe, Asia and Australia. In 2008, Broadridges first

full year as an independent public company, we grew revenues, pre-tax earnings, and sales

despite a challenging market environment. The foundation of our optimism about the future in

the face of the current challenges to our industry is our companys culture of engaged,

trustworthy, motivated associates. They have demonstrated throughout our history their

resilience and capacity to adapt to change and their commitment to our shared goals.

Lines of Business :-

Broadridge is a leading global provider of technology-based outsourcing solutions to the

financial services industry. Our systems and services include investor communication solutions,securities processing solutions, and securities clearing and operations outsourcing solutions. In

short, we provide the infrastructure that helps make the financial services industry work. With

more than 40 years of experience, we provide financial services firms with advanced,

dependable, scalable and cost-effective integrated systems. Our systems help reduce the need for

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clients to make significant capital investments in operations infrastructure, thereby allowing

them to increase their focus on core business activities.

Our clients include thousands of financial services firms and public companieswe not only

help them conduct business, we also help them communicate with their shareholders.

Broadridge delivers a wide range of cost-effective technology-based solutions to our clients, in

support of all steps in the investment lifecycle. Whether a client is a huge multinational

corporation or a smaller firm, we provide affordable, reliable solutions to perform their back-

office operations so they can focus on growing their businesses, and better serving their clients.

In our 2008 fiscal year, we:

Distributed over one billion investor communications, including proxy materials, investor

account statements, trade confirmations, tax statements and prospectuses;

Provided components of our securities processing solutions to eight of the top 10 United States

broker-dealers, as ranked by Securities Industry and Financial Markets Association; and

Served over 100 correspondents through our securities clearing services. Our business is divided

into two units: Investor Communication Solutions and Security Processing Solutions.

Investor Communication Solutions :-

This is our largest business. A large portion of our Investor Communication Solutions business

involves the processing and distribution of proxy materials to investors in equity securities and

mutual funds, as well as the facilitation of related vote processing. ProxyEdge our innovative

electronic proxy delivery and voting solution for institutional investors, helps ensure the

participation of the largest shareholders of many companies. We also provide the distribution of

regulatory reports and corporate action/reorganization event information, as well as tax reporting

solutions that help our clients meet their regulatory compliance needs. In addition, we provide

financial information distribution and transaction reporting services to both financial institutions

and securities issuers. These services include the processing and distribution of account

statements and trade confirmations, traditional and personalized document fulfillment and

content management services, marketing communications, and imaging, archival and workflow

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solutions that enable and enhance our clients communications with investors. All of these

communications are delivered in paper or electronic form.

Securities Processing Solutions :-

We offer a suite of advanced computerized real-time transaction processing services that

automate the securities transaction lifecycle, from desktop productivity tools and portfolio

management to order capture and execution, trade confirmation, settlement, and accounting. Our

services help financial institutions efficiently and cost-effectively consolidate their books and

records, focus on their core businesses, and manage risk. With multi-currency capabilities, our

Global Processing Solution supports real-time global trading of equity, option, mutual fund, and

fixed income securities in established and emerging markets.

Why Broadridge :-

We know that the energy, expertise and teamwork of our associates create a wonderful work

environment and make Broadridge an unparalleled leader in our industry. While each associate

plays an important role in the progress of our company, true success at Broadridge comes from

our ability to come together as a team. A team where all associates are respected engaged and

where diverse perspectives are valued. We recognize our success as being aligned with our

values, and encourage repetition of behaviors that lead to our success. It also encourages

engagement among our associates, which has direct impact on client satisfaction. Our associates

make the difference.

Vision :-

We enable the financial services industry to achieve superior levels of performance through our

passion to deliver extraordinary value to our clients, shareholders, and associates.

Values

Trustworthy

Respectful

Engaged

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Accountable

Client Centric

Company Culture

At Broadridge we believe in celebrating as a team, and thanking at an individual level.

Celebrating is important, as recognizes successes aligned with our values, and encourages

repetition of behaviors that lead to success. It also encourages engagement among our associates,

which has direct impact on client satisfaction. Company celebrations that keep our associates

engaged include:

World Class Service Day - associates are provided with a free lunch or dinner served bysenior level management. If goals have been reached, the associates are also given a

monetary reward.

Annual picnics and barbecues for associates and their families.

Annual holiday party.

Competitive and Fair Salaries

Our Vision Statement says Broadridge has a "passion to deliver extraordinary value" to not just

our clients and shareholders, but also to our Associates. We aim to accomplish this by providing

a mix of rewards that attract and retain the best possible Associates, and motivate them to

achieve superior individual, team, and Company-wide performance.

Merit Increases That Reflect Our Culture :-

The Merit Budget provides guidelines to management for determining appropriate compensation

increases for associates. Payment of merit increases is based on the assessment of each

associates behavior. We look not only at whether or not an associate achieved set goals, but

whether the associates behavior fully reflects our values and our efforts to create a high

engagement culture. Starting in 2010, merit increases will also recognize progress with

individual development goals.

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Bonuses Defined by Shared Goals :-

We provide two bonus plansthe MBO Bonus Plan and the World Class Service Bonus Plan.

Associates are very involved in writing their objectives and defining their goals.

World Class Service Bonus :-

Associates not eligible for the MBO Bonus Plan participate in our unique World Class Service

Bonus. This program is ten years old and guarantees that all our associates know they can earn a

bonus, no matter their position. This dissolves the barrier between bonus eligible and non-

bonus eligible employees that exists at some companies. Our associates feel invested in our

companys success and know they are contributing to it directly.

Equity as Compensation :-

We are optimistic about the future because we have committed associates. Many of our

associates are even more closely linked to our companys future success because they are also

shareholders. Broadridge equity, in the form of restricted stock units, is a component of total

compensation for about one-third of our associates. Additionally, all our corporate officers are

subject to share ownership guidelines designed to increase their share ownership to further align

their interests with those of our shareholders.

Retirement Plan :-

We sponsor a very generous defined contribution retirement plan with matches above

benchmark. We offer both non elective contributions and matching contributions. Our 401(K) is

our strongest plan and is very popular because it offers such rich benefits.

Broadridge an organization that you can trust :-

Spun off from ADP in 2007, Broadridge continues to extend the strong global heritage of service

excellence upon which our market leadership is founded.

We maintain the dedicated staffing resources, intellectual capital, uncompromising ethics,

financial staying power and vision to focus entirely on what we do best helping financial

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services institutions and public companies around the world become more efficient and more

focused on better serving their customers.

Principal businesses :-

Broad solutions portfolio includes mission-critical products and services for securities

processing, clearing and outsourcing and investor communication.

Broadridge offers complete brokerage processing services, from the industrys most widely

trusted and deployed processing platform to our robust wealth management solutions.

We offer a complete range of execution, clearing and custody services as well as technology

and operations outsourcing solutions for both retail and institutional firms.

Leveraging the latest technologies, Broadridge offers comprehensive investor

communications, document management and proxy processing services to companies around

the globe each day. Our services help clients streamline their business processing and reduce

costs.

Outsourcing leadership

Through our unique breadth of best-in-class outsourcing solutions and our highly scalable

processing model we process an average of nearly two million trades per day, and we process

and distribute more than one billion shareowner communications annually through our

industry-leading data centres.

Mission :-

We are fully committed and highly focused on enabling our clients' growth. Our mission is to

drive the industry we serve to higher levels of efficiency and compliance; to partner with

financial institutions and public companies to enable their growth; and to provide innovative

outsourcing solutions for mission-critical activities, Global presence, local expertise.

Broadridge is strategically aligned to the way its clients conduct their business. We service our

clients by providing solutions and services that meet global, regional and local requirements,

backed by comprehensive and in-depth market expertise.

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Headquartered in New York, our international market presence spans regional and local

centers across the Americas, Europe, Asia and Australia.

World leading services, world leading people

With over 4,000 dedicated professionals, including our well-established and highly

experienced management team, Broadridge associates are committed to consistently attaining

the highest standards of service excellence at every level across our global organization.

Broadridge clients :-

Broadridge delivers optimized solutions and a consistent, best-in-class experience to all of our

clients. We offer global banks, retail, institutional and discount brokerage firms, correspondent

clearing firms, mutual and hedge funds, investment firms, public corporations and other

institutions a wide range of cost-effective and scalable multi-currency processing solutions.

Whether a client is large or small, we help each one seize opportunities to grow their business.

Work/Life Balance :-

One of our values is respect, which we define as respecting the ideas and work-life balance of

all of our associates. Below are several examples of initiatives that support the work-life

balance of our associates.

Childcare Back-up Program :-

As previously mentioned, we survey our associates frequently to uncover what they might need.

In response to their feedback we created our Childcare Back-up Program.Associates can bring

their children to one of Bright Horizons 250+ registered daycare centers or 1,000 network

centers any day when a childs school is closed or the regular caregiver is out sick or on

vacation. In addition, this program also offers in-home care for those associates who dont live

or work near one of the centers or who need someone to watch a sick child.Broadridge has also

teamed up with the Learning Care Group, which operates 1,100+ U.S. child daycare centers, to

provide associates with a 10% discount off the standard tuition rate for children between the ages

of 2 and 12. In addition, the Dependent Care FSA allows associates to contribute between

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$500 and $5,000 pre-tax dollars to cover the costs of dependent care. Broadridge also offers

associates adoption assistance.

Compsych :-

Compsych Broadridges work/family vendor is a resource available to our associates and their

household members at no cost to help them balance their daily responsibilities and life events.

Associates may access Compsych online for referrals to comprehensive services including:

Confidential consultation on personal issues

Legal information and resources

Information, referrals and resources for work-life needs

Financial information, resources and tools

Online information, resources and tools

Flex Work

We believe we only encourage commitment from our associates when we help them to balance

life and work. For this reason based on department flexibility we offer flexible work

solutions, such as:

Telecommuting

Alternative work schedules

Flexible and/or compressed work schedules

Flexible summer hours

Job sharing

All of our associates can take advantage of personal days and our vacation flex plan which

enables all full- and part-time associates to choose an additional one week of vacation time in

lieu of one weeks pay.

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Benefits :-

At Broadridge your particular benefits package will depend on your work location, position and

years with the company. No matter which global location you are located, our benefits offer

plenty of flexibility for you and your family. Here is a preview of what you might be eligible for:

Comprehensive Healthcare Coverage

Flexible Spending Accounts

Survivor Benefits

Basic Life/AD&D

Group Universal Life

Personal/Business

Travel Accident Insurance

Disability Benefits

401K Above market plan

Paid Vacations and Holidays

Wellness Programs

Employee Assistance Program

On Site Medical Offices

Balancing Work & Life

Transit Program

Child Back-up programs

Child Day Care

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Center Discounts

Com Psych

On Site Cafs

Tuition Reimbursement

Associate Recognition Programs

Additional Discount Programs

Social Investment, One Solution at a Time

Our passion to deliver extraordinary service to our clients, shareholders and associates has

contributed to the success of the financial services industry.. This passion, which begins with our

core values of being trustworthy, respectful, engaged and accountable, has grown to include a

wider circle of stakeholders: our communities and our planet. We take our responsibility as a

leader in our industry and a citizen of the global community as a serious commitment.

In March 2009, we launched our Corporate Social Responsibility (CSR) program and established

the Broadridge Foundation. Since then, we have actively participated in a broad spectrum of

CSR initiatives that embody our core values. The Foundation has played an important role in

supporting As a company, we actively participate in Earth Hour and other green initiatives as

well as Adopt-a-Family, Read Across America, Take a Classroom to Work, Habitat for

Humanity, and Cells for Soldiers, to name just a few. Individually, our associates volunteer

countless hours of their time, energy and passion to local programs that enrich their lives and the

communities in which they live.

Broadridge is committed to delivering efficient, innovative investor communications tools to the

industry another way we demonstrate responsibility in our area of expertise. We have

launched a new education website that provides retail shareholders with important information

about the proxy voting process. We look forward to sharing important milestones for our CSR

program and the Broadridge Foundation with you as our initiatives evolve. We invite you view

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our brochure, which showcases how our associates have contributed to making these initiatives

their own.

Awards and Recognition :-

Almost immediately, Broadridge began to be recognized for our culture and work environment,

as well as for outstanding service.In 2008, Broadridge also received the Stevie Award for Sales

Team of the Year for a 19.1% increase in sales.

Best Companies to Work For In New York :-

Broadridge has been selected as one of the 25 best large companies to work for in New York!

Our selection for 2011 marks our fourth consecutive year of being recognized by Best

Companies to Work for in New York. In 2010, we were named as the #1 Best Large Company to

work for in New York.

Gallup :-

Broadridge was awarded The 2010 Gallup Best Place to Work Award. The Award recognizes

the best-performing workforces in the world based on the most rigorous workplace research ever

conducted. To select the winners, a panel of workplace experts evaluates applicants based on

data from millions of work teams in more than 100 countries. Gallup awarded only 25

companies with this prestigious honor in 2010.

Outsourcing :-

Broadridge was ranked the Brokerage Process Outsourcing Provider for the second consecutive

year in the Black Book of Outsourcing, an annual report published by Brown-Wilson Group, a

Data monitor company. In addition to receiving the top overall honor in the Brokerage Process

Outsourcing survey, Broadridge also ranked 1 in 14 of the surveys 18 key performance areas.

Best Company awards in Canada for 2009 UK we were selected for the one to watch list for

the UK Best Companies. (2009).

The India HR Strategy Award :-

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In India, we received the 2008/2009 award for Global HR Strategy from the Employer Branding

Institute in Mumbai, and several HR awards in the Asia-Pacific region.

THEORETICAL FRAME WORK :-

In our present day economy, finance is defined as the provision of money at the time when it is

required. Every enterprise, whether big, medium of small, needs finance to carry its operations

and to achieve its targets. In fact, finance is so indispensable today that it is rightly said to be the

lifeblood of an enterprise. Without adequate finance, no enterprise can possibly accomplish its

objectives. Financial management is applicable to every type of organization, irrespective of its

size kind of nature. It is as useful to a small concern as to a big unit. A trading concern gets the

same utility from its application as a manufacturing unit may expect. This subject is important

and useful for all types of ownership organizations. Where there is a use of finance. Financial

management is helpful. Every management aims to utilize its funds in a best possible and

profitable way. So this subject is acquiring a universal applicability

It is indispensable in any organization as helps in:

Financial planning and successful promotion of an enterprise;

Acquisition of funds as and when required at the minimum possible cost;

Proper use and allocation of funds;

Taking sound financial decisions;

Improving the profitability through financial controls;

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Increasing the wealth of the investors and the nation; and

Promoting and mobilizing individual and corporate savings

CHAPTER III

DATA ANALYSIS AND INTERPRETATION :-

Balance Sheet of Broadridge Finance Solutions :-

Assets 2011 2010 2009 2008 2007

Cash & Short Term Investments 241.50M 412.60M 173.40M 232.00M 155.00M

Receivables 406.60M 354.30M 381.00M 1.785B 1.744B

Other Current Assets 103.30M 101.70M 83.20M 61.90M 61.10M

Total Current Assets 751.40M 992.40M 2.052B 2.079B 1.96B

Gross Property, Plant &

Equipment404.60M 383.40M 366.10M 352.70M 314.80M

Accumulated Depreciation 321.50M 296.00M 290.70M 270.10M 237.40M

Net Property, Plant & Equipment 83.10M 87.40M 75.40M 82.60M 77.40M

Long Term Investments

Goodwill & Intangibles 882.80M 555.60M 511.20M 514.40M 511.60M

Other Long Term Assets 186.70M 159.00M 136.30M 157.40M 129.20M

Total Long Term Assets 1.153B 802.00M 722.90M 754.40M 718.20M

Total Assets 1.904B 1.794B 2.775B 2.834B 2.678BLiabilities 2011 2010 2009 2008 2007

Current Portion of Long Term

Debt

Accounts Payable 119.00M 91.30M 72.00M 89.90M 91.50M

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Accrued Expenses 230.30M 261.20M 216.70M 252.60M 287.90M

Deferred Revenues 33.40M 34.80M 34.60M 25.50M 24.60M

Other Current Liabilities

Total Current Liabilities 782.70M 486.40M 1.430B 1.525B 1.429B

Total Long Term Debt 124.30M 324.10M 324.10M 447.90M 617.70M

Shareholder's Equity 2011 2010 2009 2008 2007

Deferred Income Tax 71.30M 56.20M 23.20M

Minority Interest

Other Long Term Liabilities 81.10M 72.80M 37.60M 53.60M 61.00M

Total Long Term Liabilities 324.00M 500.90M 435.80M 562.40M 718.50M

Total Liabilities 1.107B 987.30M 1.866B 2.088B 2.147B

Common Shares Outstanding 123.70M 129.20M 139.30M 140.40M 139.30M

Preferred Stock

Common Stock, Net 1.50M 1.50M 1.40M 1.40M 1.40M

Additional Paid-in Capital 667.40M 587.80M 505.90M 469.50M 412.90M

Retained Earnings 642.20M 546.90M 432.30M 248.20M 90.30M

Treasury Stock 529.90M 327.70M 37.50M 2.00M 0.10M

Other Shareholder's Equity

Shareholder's Equity 797.30M 807.10M 909.00M 745.80M 531.10M

Total Liabilities & Shareholder's

Equity1.904B 1.794B 2.775B 2.834B 2.678B

Profit and Loss Account of Broadridge Finance Solutions :-

Income 2011 2010 2009 2008 2007

Revenue 2.167B 2.209B 2.073B 2.131B 2.138B

Cost of Revenue 1.617B 1.616B 1.510B 1.548B 1.588B

Gross Profit 549.80M 592.80M 562.90M 583.00M 549.80M

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Selling, General, & Admin. Expense 270.00M 241.60M 212.90M 232.40M 216.70M

Operating Interest Expense

Other Operating Income (Expense) -10.10M -9.10M -4.00M -30.90M -12.30M

Total Operating Expenses 1.897B 1.867B 1.727B 1.811B 1.817B

Operating Income 269.70M 342.10M 346.00M 319.70M 320.80M

Non-Operating Income

Pretax Income 269.70M 342.10M 346.00M 319.70M 320.80M

Provision for Income Taxes 97.90M 117.00M 122.90M 131.30M 123.70M

Income after Tax 171.80M 225.10M 223.10M 188.40M 197.10M

Income Before Extraordinaries &

Disc. Operations

171.80M 225.10M 223.10M 188.40M 197.10M

Income from Discontinued Operations -2.20M -35.10M 0.20M 3.80M

Net Income 169.60M 190.00M 223.30M 192.20M 197.10M

Earnings Per Share Data 2011 2010 2009 2008 2007

Average Shares to compute diluted

EPS

128.3 139.1 141.6 141 139

Average Shares used to compute basic

EPS

124.8 135.9 140 139.6 138.8

EPS - Basic net 1.36 1.4 1.6 1.38 1.42

EPS - Diluted net 1.32 1.37 1.58 1.36 1.42

Cash Flow Statement of Broadridge Finance Solutions :-

Cash Flow - Operations 2011 2010 2009 2008 2007

Net Income 169.60M 190.00M 223.30M 192.20M 197.10M

Depreciation, Depletion,

Amortization

72.30M 57.00M 53.70M 48.40M 62.50M

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Other Non-Cash Items 42.90M 65.60M 24.90M 11.00M 30.40M

Total Non-Cash Items 115.20M 122.60M 78.60M 59.40M 92.90M

Deferred Income Taxes

Total Changes in

Assets/Liabilities

-88.50M 46.40M -23.90M 48.90M -133.00M

Other Operating Activities -5.40M 1.10M -0.80M 7.40M 3.50M

Net Cash from Operating

Activities

190.90M 360.10M 277.20M 307.90M 160.50M

Cash Flow - Investing 2011 2010 2009 2008 2007

Capital Expenditures -29.20M -42.70M -26.80M -41.40M -31.80M

Acquisitions, Divestitures -293.50M -35.20M -60.80M -6.10M

Cash Flow - Financing 2011 2010 2009 2008 2007

Net Cash from Investing

Activities

-340.80M -88.30M -90.70M -52.60M -37.90M

Debt Issued 200.00M -114.40M -170.00M 631.90M

Equity Issued -174.30M -211.70M -28.50M 18.10M 4.30M

Dividends Paid -74.80M -66.60M -37.90M -33.60M

Other Financing Activities 3.80M 0.20M 0.40M 1.70M -720.20M

Net Cash from Financing

Activities

-45.30M -278.10M -180.40M -183.80M -84.00M

Foreign Exchange Effects 7.90M 0.10M 3.10M 0.70M -0.10M

Net Change in Cash & Cash

Equivalents

-171.10M 239.20M 118.70M -17.50M 38.50M

Cash at beginning of period 412.60M 173.40M 54.70M 72.20M 50.10M

Cash at end of period 241.50M 412.60M 173.40M 54.70M 88.60M

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CURRENT RATIO :-

Current ratio may be defined as the relationship between current assets and current liabilities.

This ratio is also known as "working capital ratio". It is a measure of general liquidity and is

most widely used to make the analysis for short term financial position or liquidity of a firm. It is

calculated by dividing the total of the current assets by total of the current liabilities.

Following formula is used to calculate current ratio:

Year 2007 2008 2009 2010 2011

current ratio 1.37 1.36 1.43 2.04 0.96

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Interpretation:

From the above graph current ratio was highest in the year 2010 is 2.04, that is equal to ideal

current ratio is 2:1, and the ratio was decreased to 0.96 in the year 2011 it represent the liquidity

position of the company is also decreased.

TOTAL DEBT TO ASSETS :-

The ratio used to measure a company's financial risk by determining how much of the company's

assets have been financed by debt. Calculated by adding short-term and long-term debt and then

dividing by the company's total assets.

Year 2007 2008 2009 2010 2011

Total debt to assets 0.8 0.73 0.6 5.5 0.58

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.

Interpretation:

From the above information total debt to assets ratio was decreasing from the year 2007 to 2009

is 0.8 to 0.6, the ratio was highest in the year 2010 is 5.5 again it was decreased to 0.58 in the

year 2011which shows that company debts are also decreased.

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DEBT EQUITY RATIO:

The debt-equity ratio is anotherleverage ratiothat compares a company's total liabilities to its

totalshareholders' equity. This is a measurement of how much suppliers, lenders, creditors and

obligors have committed to the company versus what the shareholders have committed.

To a large degree, the debt-equity ratio provides another vantage point on a company's leverage

position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets

in the debt ratio. Similar to the debt ratio, a lower the percentage means that a company is using

less leverage and has a stronger equity position.

Debt Equity ratio =

Year

2007 2008 2009 2010 2011

Debt equity ratio 0.4 0.27 0.2 1.22 0.13

Interpretation:

From the above graph Debt equity ratio was decreasing from the year 2007 to 2009 and it was

increasing in the year 2010 is 1.22 again it was decreased to 0.13 in the year 2011, it represents

the company is using high leverage and has a weaker equity position.

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RETURN ON EQUITY (%):

The amount of net income returned as a percentage of shareholders equity. Return on

equity measures a corporation's profitability by revealing how much profit a company

generates with the money shareholders have invested.

ROE is expressed as a percentage and calculated as:

Return on Equity =

Year 2007 2008 2009 2010 2011

Return on equity (%) 37.1 25.7 24.5 23.5 21.6

Interpretation:

From the above information the Return on equity ratio was decreased from the year 2007 to 2011

the ratio was highest in the year 2007 is 37.75% it indicates that the income generate onshareholders investment is also decreased.

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RETURN ON ASSETS (%):

Return on assets is a key profitability ratio which measures the amount of profit made per

dollar of assets that they own. It measures the companys ability to generate profits before

leverage with its own assets, rather than by using leverage in the form of shareholders' equity or

other debt liabilities. Generally speaking, the higher this number is the more effective the

company is in utilizing its assets. Return on assets is a key profitability measure which can be

used to measure relative efficiency of companies within the same industry who have a similar

product or service line.

Return on assets =

Year 2007 2008 2009 2010 2011

Return on Assets (%) 7.35 6.78 8.04 10.5 8.9

Interpretation:

Return on assets ratio was increasing from 2007 to 2010 it was highest in the year 2010 is 10.5 it

represents the company is more effective by utilizing the assets. And the ratio was decreased in

the year 2011 it indicates the company efficiency is also decreased.

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GROSS PROFIT MARGIN :

The gross profit margin is a measurement of a company's manufacturing and distribution

efficiency during the production process. The gross profit tells an investor the percentage of

revenue / sales left after subtracting the cost of goods sold. A company that boasts a higher gross

profit margin than its competitors and industry is more efficient. Investors tend to pay more for

businesses that have higher efficiency ratings than their competitors, as these businesses should

be able to make a decent profit as long as overhead costs are controlled (overhead refers to rent,

utilities, etc.)

Gross profit margin=

Year 2007 2008 2009 2010 2011

Gross profit margin 25.71 27.35 27.15 26.83 25.37

Interpretation:

The gross profit margin of the company was satisfactory in the years 2008 and 2009. However, it

decreased by 25.37 % in the year 2011It indicating the efficiency of companys financial

services also decreased.

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NET PROFIT MARGIN (%) :

Net profit margin is one of the profitability ratios and an important tool for financial analysis. It

is the final output; any business is looking out for. Net profit ratio is a ratio of net profits after

taxes to the net sales of a firm. All the efforts and decision making in the business is to achieve a

higher net profit margin with increase in net profits.Net profit margin shows the margin left for

the equity and preference shareholders i.e. the owners. Unlike the gross profit which measures

the operating efficiency of the business, net profit margin measures the overall efficiency of the

business. An adequate margin of net profits will be generated only when most of all the activities

are being done efficiently. The activities may be production, administration, selling, financing,

pricing or tax management.

Net Profit Margin or Ratio=

0

2

4

6

8

10

12

2007 2008 2009 2010 2011

Net profit margin

Interpretation: From the above fig; it is understood that the margin available for owners is

slightly decreased compared to previous years. The value is decreased nearly 1 % from the

previous margin that available for owners. The net profit ratio was high in the year 2009.

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Year 2007 2008 2009 2010 2011

Net profit margin 9.21 9.01 10.77 8.6 7.82


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OPERANG PROFIT MARGIN :

A ratio used to measure a company's pricing strategy and operating efficiency.

Calculated as:

Operating margin is a measurement of what proportion of a company's revenue is left over after

paying for variable costs of production such as wages, raw materials, etc. A healthy operating

margin is required for a company to be able to pay for its fixed costs, such as interest on debt.

Year 2007 2008 2009 2010 2011

Operating profit margin 15 15 16.69 15.48 12.44

0

5

10

15

20

2007 2008 2009 2010 2011

Operating profit margin

Interpretation:

From the above fig: it is understood that the operating profit margin was increasing and

decreasing trend from the year 2008 to 2011 and the ratio was high in the year 2009 and it was

decreased in 2011.

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PRICE EARNINGS RATIO:

Price earnings ratio (P/E ratio) is the ratio between market price per equity share and earnings

per share.

The ratio is calculated to make an estimate of appreciation in the value of a share of a company

and is widely used by investors to decide whether or not to buy shares in a particular company.

Following formula is used to calculate price earnings ratio:

Year 2007 2008 2009 2010 2011

Price Earnings Ratio 14.3 15.4 16.7 17.7 18.3

Interpretation:

The Price earnings ratio was increasing from the year 2007 to 2011 is 14.3 to 18.3. This shows

that that the investors are much attracted to invest in the company.

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DIVIDEND PER SHARE:

Dividend Per Share (DPS) ratio relates the dividends announced for the year to the number of

shares issued for that year. It is an indication of the cash return that shareholders receive from

holding shares in the listed company.

Year 2007 2008 2009 2010 2011

Dividend Per share 0.23 0.26 0.28 0.56 0.6

Interpretation:

From the graph, it is clear that the dividend per share in the year 2007 is 0.23 and it increased to

0.56 in 2010 and continued the same in 2011. The graph shows the increase in the amount of

dividend received by the shareholders for their shares.

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EARNINGS PER SHARE:

An earnings per share ratio (EPS Ratio) is a small variation of return on equity capital ratio

and is calculated by dividing the net profit after taxes and preference dividend by the total

number of equity shares.

The formula of earnings per share is:

Year 2007 2008 2009 2010 2011

Earnings per share 1.44 1.34 1.6 1.4 1.36

Interpretation:

From the above information Earning per share ratio was slightly increased and decreased from

the year 2007 to 2011 the ratio was highest in the year 2009 is 1.6 and it was decreased to 1.36 in

the year 2011 which shows that earning power of the company is decreased.

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DIVIDEND PAYOUT RATIO:

Dividend payout ratio is calculated to find the extent to which earnings per share have been used

for paying dividend and to know what portion of earnings has been retained in the business. It is

an important ratio because ploughing back of profits enables a company to grow and pay more

dividends in future.

Following formula is used for the calculation of dividend payout ratio

Year 2007 2008 2009 2010 2011

Dividend Payout ratio 0.15 0.19 0.17 0.4 0.44

Interpretation:

The dividend payout ratio of the company shows the earnings used by the companies to pay the

dividends. The ratio has increased from 0.15 in 2007 to 0.44 in 2011 which shows the

companys dividend is more compared to its earnings.

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DIVIDEND YIELD RATIO:

Dividend yield ratio is the relationship between dividends per share and the market value of the

shares.

Share holders are real owners of a company and they are interested in real sense in the earnings

distributed and paid to them as dividend. Therefore, dividend yield ratio is calculated to evaluate

the relationship between dividends per share paid and the market value of the shares.

Following formula is used for the calculation of dividend yield ratio:

Year 2007 2008 2009 2010 2011

Dividend Yield ratio 1.6 0.99 1.21 2.3 2.7

Interpretation:

From the above graph Dividend yield ratio was decreased in the year 2008 and it was increasing

from 2009 to 2011 is 1.21 to 2.7 which shows that the dividend paid to the shareholders is higher

than the market price compared to the previous years.

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CHAPTER IV

FINDINGS :-

current ratio was highest in the year 2010 is 2.04, that is equal to ideal current ratio is 2:1,and the ratio was decreased to 0.96 in the year 2011 it represent the liquidity position of the

company is also decreased.

Total debt to assets ratio was decreasing from the year 2007 to 2009 is 0.8 to 0.6, the ratio

was highest in the year 2010 is 5.5 again it was decreased to 0.58 in the year 2011which

shows that company debts are also decreased.

Return on equity ratio was decreased from the year 2007 to 2011 it indicates that the income

generate on shareholders investment is also decreased.

Return on assets ratio was increasing from 2007 to 2010 it was highest in the year 2010 is

10.5 it represents the company is more effective by utilizing the assets.

Net profit margin was increasing and decreasing trend from the year 2007 to 2011 and the

net profit ratio was high in the year 2009.

The Price earnings ratio was increasing from the year 2007 to 2011 is 14.3 to 18.3. Thisshows that that the investors are much attracted to invest in the company.

Dividend per share is increasing from the year 2007 to 2011. This shows the increase in the

amount of dividend received by the shareholders for their shares.

Earnings per share ratio was slightly increased and decreased from the year 2007 to 2011 it

was decreased in the year 2011 which shows that earning power of the company is

decreased.

Dividend payout ratio has increased from 0.15 in 2007 to 0.44 in 2011 which shows the

companys dividend is more compared to its earnings.

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Dividend yield ratio was increasing from 2009 to 2011 is 1.21 to 2.7 which shows that the

dividend paid to the shareholders is higher than the market price compared to the previous

years.

SUGGESTIONS :-

The dividend payout ratio is increased year on year. However it is not good and the investors

received a high portion of earnings per share in the form of dividends. So try to decreased the

paying the dividends to shareholders.

The Price earnings ratio was increasing from the year 2007 to 2011. This shows that that the

investors are much attracted to invest in the company. It is very favour to the company.

Earnings per share ratio is decreasing year by year it is unfavour to the company. So try to

increase their earning capacity on dividends.

Return on equity ratio is decreased which is not favourable to the company so try to increase

the returns on shareholders.

The debt equity ratio of the company is too low which is not favourable. The company

should increase the debt while reducing the other sources of capital.

Return on assets ratio was increasing from 2007 to 2010 it represents the company is more

effective by utilizing the assets. which is better to the company

Current ratio was highest in the year 2010 is 2.04, that is equal to ideal current ratio is 2:1,

which is favour to the company.

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CONCLUSION :-

The study Financial Performance analysis in Broadridge finance solutions was

undertaken with an objective of getting an insight into the analysis of financial

performance of Broadridge finance solutions.

The study attempts to determine the profitability performance of company. Further, the

study aims to determine the Financial Performance, Solvency position and capacity of

payment of interest and dividends and lending capacity of Broadridge finance solutions.

The study is done using the Balance sheet, Profit and Loss account and other financial

information of Broadridge finance solutions. The entire study is based on the secondary

data only. The analytical tools used for the study are ratio analysis. The study is done at

Hyderabad for a period of 60days. The study had few limitations which were taken care

of.

The financial information obtained was analyzed using the appropriate techniques and it

was found that the dividend payout ratio of the company has increased a lot which is

almost 6 times of that in 2007. The company also showed a high capital gearing ratio and

dividend per share. Further, it was found that the price earnings ratio is low.

The company is paying out good amount of the dividends to the shareholders which are

increased in the recent years. It is also higher compared to the market. So, the company is

suggested to maintain the same in the future in order to attract the investors.

The company should also improve its debt equity ratio which is currently unfavourable.The company is enjoying the high cash on return which increased by 80% in 2011. This

should be continued in the future.

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ANNEXURE

BIBLIOGRAPHY :

I.M. Pandey, Financial Management Ninth Edition, Vikas Publishing House Pvt Ltd, 10thedition, 2009

Prasanna chandhra, Financial Management,Tata McGraw-Hill Education, 7th edition, 2008.

Dr.R.K. Mittal, Management Accounting and Financial Management,V.K(india) Enterprises-

2010.

WEBILIOGRAPHY:

www.morevalue.com/i-reader/ftp/Ch17.PDF

www.freemba.in/articles.php?stcode=10&substcode=30

www.wikipedia.org

www.scrid.com

www.zainbooks.com
http://www.google.co.in/search?tbo=p&tbm=bks&q=inauthor:%22I.M.+Pandey%22&source=gbs_metadata_r&cad=3http://www.morevalue.com/i-reader/ftp/Ch17.PDFhttp://www.freemba.in/articles.php?stcode=10&substcode=30http://www.wikipedia.org/http://www.scrid.com/http://www.zainbooks.com/http://www.google.co.in/search?tbo=p&tbm=bks&q=inauthor:%22I.M.+Pandey%22&source=gbs_metadata_r&cad=3http://www.morevalue.com/i-reader/ftp/Ch17.PDFhttp://www.freemba.in/articles.php?stcode=10&substcode=30http://www.wikipedia.org/http://www.scrid.com/http://www.zainbooks.com/

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