sem 2 afs - 1 ratio analysispptver 1.1
TRANSCRIPT
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Ratio AnalysisOfIT Sector
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Presented By:Suhas Patil 41
Anand Rajawat 42
Manish Rana 43
Priyanka Rane 44
Subodh Sakpal 45
Pushkaraj Save 46
Jay Savla 47
Hetal Shah 48
Ravish Shah 49
Vivek Shah 50
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IT industry: on a steady growth track
Total revenues for the Indian IT industry wereUS$ 71.7 billion in 2008-09.
The Indian IT industry has been growing at acompound annual growth rate (CAGR) of 27 %for the last five years.
Contribution of IT industry to Indias grossdomestic product (GDP) has grown from 1.2 percent in 1997-98 to an estimated 5.8 per cent in2008-09.
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The total revenues from export were around US$47.3 billion in 2008-09.
The total exports have been growing at a CAGR of28.7per cent over the last five years.
Domestic market revenues touched around US$24.3 billion in 2008-09.
Domestic market revenues have been growing at aCAGR of 24 per cent for the last five years.
CONT
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ScripCode
Company ClosePrice
Full Mkt.Cap.
500209 INFOSYS TECH 2,671.40 1,53,214.20
532540 .TCS LTD 807.75 1,58,094.53
507685 .WIPRO LTD 721.05 1,05,846.20
532281 HCL TECHNO 356.9 24,072.83
532466 ORACLE FIN 2,308.95 19,360.35
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=500209http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=500209http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532540http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532540http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=507685http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=507685http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532281http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532281http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532466http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532466http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532466http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532281http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=507685http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532540http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=500209 -
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ScripCode
Company ClosePrice
No.of Shares(normal)
Full Mkt.Cap.
500209 INFOSYS TECH2,671 57,35,35,233 1,53,214
532540 .TCS LTD 807 1,95,72,20,996 1,58,094
507685 .WIPRO LTD 721 1,46,79,45,361 1,05,846
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=500209http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=500209http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=500209http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532540http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532540http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=507685http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=507685http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=507685http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=532540http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=500209 -
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Short Term Solvency Ratios
Current Ratio Conventionally a current ratio of 2:1 is considered
satisfactory
=
Current AssetsCurrent Ratio
Current Liabilities
oTo ensure solvency the current ratiohas to exceed 1.0
n
Generally a value greater than 1.5 or2.0 is required for comfort
nAs always, compare to the industry
o
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Immediate Solvency Ratios
Quick Ratio (or Acid-Test Ratio)
Conventionally a quick ratio of 1:1 isconsidered satisfactory.
= Current Assets Stock Prepaid Exp..
Current Liabilities Bank Overdraft Advance Incomen
nMeasures liquidity without consideringinventory (the firms least liquid
current asset)
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Long Term Solvency Ratios
Debt-to-equity ratio
Generally, financial institutions favour aratio of 2:1.
= Loan Funds . Own Funds
nMany sources use long term debt instead
of total liabilities
nMeasures the mix of debt and equity
within the firms total capital
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Long Term Solvency Ratios
Interest Coverage Ratio
= EBIT
Interest
nInterest coverage ratio
oA high level of interest coverage
implies safety
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Financial Management Ratios
Debtors turnover ratioThis ratio is a test of the liquidity of the debtors of a
firm. It shows the relationship between credit sales anddebtors.
In general a high debtor turnover ratio and shortcollection period is preferable.
Debtors turnover ratio = Credit sales. Average
Debtors and bills receivables
A high turnover ratio and shorter collection periodindicate prompt payment by the debtor. On the contrary
low turnover ratio and longer collection period indicatesdela ed a ments b the debtor.
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Financial Management Ratios
Capital Gearing RatioThis ratio studies the proportion between capital
bearing fixed rate of return & capital not bearingfixed rate of return
Capital Gearing Ratio = Debentures + Pref. Sh. Capital
Equity Shareholders fund Pref. Sh.Capital
Capital gearing ratio is important to the company and theprospective investors. It must be carefully planned as itaffects the company's capacity to maintain a uniformdividend policy during difficult trading periods. It reveals the
suitability of company's capitalization.
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Proprietary Ratios
Proprietary Ratio = Proprietor'sFund
TotalAssets
nThis Ratio Explains us the Extent towhich total assets of the company are
financed by the proprietors i.e.shareholders of the company.
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Earning Per share
Earning Per Share
= NPAT Pref. Dividend No. of Equity Share
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Profitability Ratios
Return On Capital Employed
= EBIT x 100 CAPITAL EMPLOYED
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Profitability Ratios
Return on Net Worth (%)
= NPAT x 100 Proprietary Funds
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Tech GROWTH STORY MAY LOSE A BITOF ZIP
Global Valuation Comparison
Company PE EBITDA FY10 FY11 FY10 FY11Infosys 23.8 21.4 17.5 14.5TCS 22.3 18.6 17.3 14.9Wipro 21.6 20.2 15.1 13.1
HCL 19.3 15.0 9.5 8.2
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Very Important Reason
For I.T Company incurrent scenario
Further Rise in Rupee mayerode IT margin
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Thank You..