History and turnover of Wipro India

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Wipro is a major business establishment in India. It deals primarily in software products and related services. It is ranked as 1102 company in 2008 Forbes Global 2000 list. It is regarded as a leading provider of integrated business process and technological solutions. Wipro Technologies has been operating on a global basis. It has been rated as largest independent provider of research and development services. It earns more than half a billion dollars through research and development services. It is also counted as being one among three leading offshore BPO services provider. Headquarters of Wipro is located at Bangalore, India.

History:

Wipro was established in 1947. It was a vegetable oil company to start with and was created from an oil mill established by father of Azim Premji, present Chairman and CEO of Wipro. It later ventured into consumer goods in 1966 under Azim Premji's leadership as Wipro Ltd. In 1975 Wipro Fluid Power was set up to make pneumatic cylinders and hydraulic cylinders.

Head office:

The corporate office and head office is located in Bangalore, India.

Branches (In India)

Bangalore

Mysore

Kolkata

Chennai

Secunderabad

New Delhi

Bhopal

Jaipur

Chandigarh

Lucknow

Pondicherry

Cochin

Mumbai

Pune

Branches (In other countries)

Egypt

Taiwan

UAE (Dubai, Sharjah)

Hong Kong

Australia (Sydney, Melbourne)

Singapore

Malaysia

(Kuala Lumpur)

Saudi Arabia (Al Khobar,Riyadh)

Overall number of employees :

Wipro had 67,818 employees as of March 31, 2007 on its rolls including 50,354 employees in IT Services business and 17,464 employees in BPO business. This represents a net addition of 14,076 people comprised of 12,699 in IT Services business and 1,377 people in BPO business for the year.

Turnover :

Wipro Ltd has announced the standalone Results for the quarter ended on 30-JUN- 2009. The Net Sales was at Rs. 528790 lacs for quarter ending on 30-JUN-2009 against Rs. 529890 lacs for the quarter ending on 31-MAR-2009. The Net Profit / (Loss) were at Rs. 119790 lacs for the quarter ending on 30-JUN-2009 against Rs. 84210 lacs for the quarter ending on 31-MAR-2009. The Consolidated Net Sales was at Rs. 628910 lacs for quarter ending on 30-JUN- 2009 against Rs. 648210 lacs for the quarter ending on 31-MAR-2009. The Consolidated Net Profit / (Loss) were at Rs. 101550 lacs for the quarter ending on

30-JUN-2009 against Rs. 101000 lacs for the quarter ending on 31-MAR-2009. The stock closed the day at Rs.458.70, down by Rs.1.20 or 0.26%. The stock hit an intraday high of Rs.470.80 and low of Rs.455.

The total traded quantity was 1959514 at an average price of Rs 462.30 resulting In a turnover of Rs 9058.83 lakhs.

What are Financial Statements?

A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity.

For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a management discussion and analysis:[1]

Balance sheet: also referred to as statement of financial position or condition, reports on a company's assets, liabilities, and Ownership equity at a given point in time.

Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time. Profit & Loss account provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state.

Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period.

Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities.

Balance sheet of the company:

Balance Sheet of Wipro

in Rs. Cr.

 

Mar '09

Mar '10

 

12 mths

12 mths

 

 

 

Sources Of Funds

 

Total Share Capital

293

293.6

Equity Share Capital

293

293.6

Share Application Money

1.5

1.8

Preference Share Capital

0

0

Reserves

12,220.50

17,396.80

Revaluation Reserves

0

0

Networth

12,515.00

17,692.20

Secured Loans

0

0

Unsecured Loans

5,013.90

5,530.20

Total Debt

5,013.90

5,530.20

Total Liabilities

17,528.90

23,222.40

 

Mar '09

Mar '10

 

 

 

 

12 mths

12 mths

 

 

 

Application Of Funds

 

Gross Block

5,743.30

6,761.30

Less: Accum. Depreciation

2,563.70

3,105.00

Net Block

3,179.60

3,656.30

Capital Work in Progress

1,311.80

991.1

Investments

6,895.30

8,966.50

Inventories

459.6

606.9

Sundry Debtors

4,446.40

4,754.70

Cash and Bank Balance

1,902.10

1,938.30

Total Current Assets

6,808.10

7,299.90

Loans and Advances

4,202.00

5,519.40

Fixed Deposits

2,507.10

3,726.00

Total CA, Loans & Advances

13,517.20

16,545.30

Deffered Credit

0

0

Current Liabilities

5,564.30

4,706.00

Provisions

1,810.70

2,230.80

Total CL & Provisions

7,375.00

6,936.80

Net Current Assets

6,142.20

9,608.50

Miscellaneous Expenses

0

0

Total Assets

17,528.90

23,222.40

 

 

 

Contingent Liabilities

1,045.40

778

Book Value (Rs)

85.42

120.49

.--------------------------------------------------------------------------------------------------------------------------------------------------

Profit and Loss account of the company:

Profit & Loss account of Wipro

in Rs. Cr.

 

Mar '09

Mar '10

 

 

12 mths

12 mths

 

Income

 

Sales Turnover

21,612.80

23,006.30

Excise Duty

105.5

84.3

Net Sales

21,507.30

22,922.00

Other Income

-480.4

875.3

Stock Adjustments

-3.8

111

Total Income

21,023.10

23,908.30

Expenditure

 

Raw Materials

3,438.80

4,140.40

Power & Fuel Cost

154

141.4

Employee Cost

9,249.80

9,062.80

Other Manufacturing Expenses

1,687.80

2,071.80

Selling and Admin Expenses

1,523.00

1,475.10

Miscellaneous Expenses

691.4

640

Preoperative Exp Capitalised

0

0

Total Expenses

16,744.80

17,531.50

 

Mar '09

Mar '10

 

 

12 mths

12 mths

 

Operating Profit

4,758.70

5,501.50

PBDIT

4,278.30

6,376.80

Interest

196.8

108.4

PBDT

4,081.50

6,268.40

Depreciation

533.6

579.6

Other Written Off

0

0

Profit Before Tax

3,547.90

5,688.80

Extra-ordinary items

0

0

PBT (Post Extra-ord Items)

3,547.90

5,688.80

Tax

574.1

790.8

Reported Net Profit

2,973.80

4,898.00

Total Value Addition

13,306.00

13,391.10

Preference Dividend

0

0

Equity Dividend

586

880.9

Corporate Dividend Tax

99.6

128.3

Per share data (annualised)

 

Shares in issue (lakhs)

14,649.81

14,682.11

Earning Per Share (Rs)

20.3

33.36

Equity Dividend (%)

200

300

Book Value (Rs)

85.42

120.49

What is Comparative Analysis ?

It is Item by item comparison of two or more comparable (see comparability analysis) alternatives, processes, products, qualifications, sets of data, systems, etc. In accounting, for example, changes in a financial statement's items over several accounting periods may be presented together to detect the emerging trends in the firm's operations and results.

Comparative income statement or comparative comparative statement of profit and loss can be calculated by the following formula:

Percentage change = absolute change/figures of previous year *100

Comparative Balance Sheet:

Comparative Balance sheet

in Rs. Cr.

change in

% change in

 

Mar '2009

Mar '2010

2010-09

2010-09

 

12 mths

12 mths

 

 

 

Sources Of Funds

 

Total Share Capital

293

293.6

0.6

0.20%

Equity Share Capital

293

293.6

0.6

0.20%

Share Application Money

1.5

1.8

0.3

20.00%

Preference Share Capital

0

0

0

0.00%

Reserves

12,220.50

17,396.80

5176.3

42.36%

Revaluation Reserves

0

0

0

0.00%

Networth

12,515.00

17,692.20

5177.2

41.37%

Secured Loans

0

0

0

0.00%

Unsecured Loans

5,013.90

5,530.20

516.3

10.30%

Total Debt

5,013.90

5,530.20

516.3

10.30%

Total Liabilities

17,528.90

23,222.40

5693.5

32.48%

 

Mar '09

Mar '10

 

 

 

 

12 mths

12 mths

 

 

 

Application Of Funds

 

Gross Block

5,743.30

6,761.30

1,018.00

17.73%

Less: Accum. Depreciation

2,563.70

3,105.00

541.30

21.11%

Net Block

3,179.60

3,656.30

476.70

14.99%

Capital Work in Progress

1,311.80

991.1

-320.70

-24.45%

Investments

6,895.30

8,966.50

2,071.20

30.04%

Inventories

459.6

606.9

147.30

32.05%

Sundry Debtors

4,446.40

4,754.70

308.30

6.93%

Cash and Bank Balance

1,902.10

1,938.30

36.20

1.90%

Total Current Assets

6,808.10

7,299.90

491.80

7.22%

Loans and Advances

4,202.00

5,519.40

1,317.40

31.35%

Fixed Deposits

2,507.10

3,726.00

1,218.90

48.62%

Total CA, Loans & Advances

13,517.20

16,545.30

3,028.10

22.40%

Deffered Credit

0

0

0.00

0.00%

Current Liabilities

5,564.30

4,706.00

-858.30

-15.43%

Provisions

1,810.70

2,230.80

420.10

23.20%

Total CL & Provisions

7,375.00

6,936.80

-438.20

-5.94%

Net Current Assets

6,142.20

9,608.50

3,466.30

56.43%

Miscellaneous Expenses

0

0

0.00

0.00%

Total Assets

17,528.90

23,222.40

5,693.50

32.48%

 

 

 

Comparative Balance Sheet Analysis :

The comparative balance sheet analysis show that the equity share capital of the company is increase by 0.20% in 2010.that is good health for the company .

Share application money is increase by 20% in 2010 this is good for the company. Reserve and surplus of the company is increase this is the good health for the company because whenever the company have require the capital then company can use it.

The investment of the company is increase by 30 % in the year 2010 this is good for the company and by this company can increase his capital .

The total net current assets of the company is increase by 56% this is good health for the company.

Share and Bank balance is decrease that is not good for the company because by this the worth and goodwill of the company is decreases.

Comparative Analysis of Profit & Loss Account:

Profit & Loss account of Wipro

in Rs. Cr.

Change in

% change in

 

Mar '09

Mar '10

2010-09

2010-09

 

 

12 mths

12 mths

 

Income

 

Sales Turnover

21,612.80

23,006.30

1,393.50

6.45%

Excise Duty

105.5

84.3

-21.20

-20.09%

Net Sales

21,507.30

22,922.00

1,414.70

6.58%

Other Income

-480.4

875.3

1,355.70

-282.20%

Stock Adjustments

-3.8

111

114.80

-3021.05%

Total Income

21,023.10

23,908.30

2,885.20

13.72%

Expenditure

 

Raw Materials

3,438.80

4,140.40

701.60

20.40%

Power & Fuel Cost

154

141.4

-12.60

-8.18%

Employee Cost

9,249.80

9,062.80

-187.00

-2.02%

Other Manufacturing Expenses

1,687.80

2,071.80

384.00

22.75%

Selling and Admin Expenses

1,523.00

1,475.10

-47.90

-3.15%

Miscellaneous Expenses

691.4

640

-51.40

-7.43%

Preoperative Exp Capitalised

0

0

0.00

0.00%

Total Expenses

16,744.80

17,531.50

786.70

4.70%

 

Mar '09

Mar '10

 

 

12 mths

12 mths

 

Operating Profit

4,758.70

5,501.50

742.80

15.61%

PBDIT

4,278.30

6,376.80

2,098.50

49.05%

Interest

196.8

108.4

-88.40

-44.92%

PBDT

4,081.50

6,268.40

2,186.90

53.58%

Depreciation

533.6

579.6

46.00

8.62%

Other Written Off

0

0

0.00

0.00%

Profit Before Tax

3,547.90

5,688.80

2,140.90

60.34%

Extra-ordinary items

0

0

0.00

0.00%

PBT (Post Extra-ord Items)

3,547.90

5,688.80

2,140.90

60.34%

Tax

574.1

790.8

216.70

37.75%

Reported Net Profit

2,973.80

4,898.00

1,924.20

64.71%

Total Value Addition

13,306.00

13,391.10

85.10

0.64%

Preference Dividend

0

0

0.00

0.00%

Equity Dividend

586

880.9

294.90

50.32%

Corporate Dividend Tax

99.6

128.3

28.70

28.82%

Per share data (annualised)

 

Shares in issue (lakhs)

14,649.81

14,682.11

32.30

0.22%

Earning Per Share (Rs)

20.3

33.36

13.06

64.33%

Equity Dividend (%)

200

300

100.00

50.00%

Book Value (Rs)

85.42

120.49

35.07

41.06%

Interpretation of Comparative Analysis of Profit & Loss Account:

In this comparative analysis of profit and loss account shows that the sales turnover in increase it show positive means it is good for the company. Employee cost is decrease and expenses are the increase ,and miscellaneous expenses are also decreases and net sale of the company is increases .

WHAT IS COMMON SIZE ANALYSIS?

An income statement in which each account is expressed as a percentage of the value of sales. This type of financial statement can be used to allow for easy analysis between companies or between time periods of a company. Common size income statement analysis allows an analyst to determine how the various components of the income statement affect a company's profit.

Following are the formulae used to calculate common size:

Formula based on common size income statement:

Common size income statement = individual items*100

Formula based on common size balance sheet:

Common size balance sheet = individual assets/liabilities*100

Common Size Balance Sheet Analysis:

Common size Balance sheet

in Rs. Cr.

 

Mar '2009

Mar '2010

2009

2010

 

12 mths

12 mths

 

 

 

Sources Of Funds

 

Total Share Capital

293

293.6

1.67%

1.26%

Equity Share Capital

293

293.6

1.67%

1.26%

Share Application Money

1.5

1.8

0.01%

0.01%

Preference Share Capital

0

0

0%

0.00%

Reserves

12,220.50

17,396.80

69.72%

74.91%

Revaluation Reserves

0

0

0%

0.00%

Networth

12,515.00

17,692.20

71.40%

76.19%

Secured Loans

0

0

0%

0.00%

Unsecured Loans

5,013.90

5,530.20

28.60%

23.81%

Total Debt

5,013.90

5,530.20

28.60%

23.81%

Total Liabilities

17,528.90

23,222.40

100%

100.00%

 

Mar '09

Mar '10

 

 

 

 

12 mths

12 mths

 

 

 

Application Of Funds

 

Gross Block

5,743.30

6,761.30

32.76%

29.12%

Less: Accum. Depreciation

2,563.70

3,105.00

14.63%

13.37%

Net Block

3,179.60

3,656.30

18.14%

15.74%

Capital Work in Progress

1,311.80

991.1

7.48%

4.27%

Investments

6,895.30

8,966.50

39.34%

38.61%

Inventories

459.6

606.9

2.62%

2.61%

Sundry Debtors

4,446.40

4,754.70

25.37%

20.47%

Cash and Bank Balance

1,902.10

1,938.30

10.85%

8.35%

Total Current Assets

6,808.10

7,299.90

38.84%

31.43%

Loans and Advances

4,202.00

5,519.40

23.97%

23.77%

Fixed Deposits

2,507.10

3,726.00

14.30%

16.04%

Total CA, Loans & Advances

13,517.20

16,545.30

77.11%

71.25%

Deffered Credit

0

0

0.00%

0.00%

Current Liabilities

5,564.30

4,706.00

31.74%

20.26%

Provisions

1,810.70

2,230.80

10.33%

9.61%

Total CL & Provisions

7,375.00

6,936.80

42.07%

29.87%

Net Current Assets

6,142.20

9,608.50

35.04%

41.38%

Miscellaneous Expenses

0

0

0.00%

0.00%

Total Assets

17,528.90

23,222.40

100%

100%

 

 

 

Common Size Balance Sheet Analysis:

According to the Common size Balance sheet of WIPRO company, the equity share capital and share application money and preference share capital are increase that is the good for the company. Because they are shown good position of the company for the investors and customers.

Unsecured loans are increase from 2009 to 2010 this is not satisfactory for the company because when burden of loans are increase then the company's liability will be increase.

Current assets, loan. & advances is increase of the company that is show that the worth of the company is increase. Reserve and surplus of the company is increase this is the good health for the company because whenever the company have require the capital then company can use it.

Gross block is increase in 2010 from 2009. The capital work in progress is decrease from 2009 to 2010 that is not satisfactory for the company. Share and Bank balance is decrease that is not good for the company.

Common Size Profit & Loss account :

Profit & Loss account of Wipro

in Rs. Cr.

 

Mar '2009

Mar '2010

2009

2010

 

 

12 mths

12 mths

 

Income

 

Sales Turnover

21,612.80

23,006.30

100.49%

100.37%

Excise Duty

105.5

84.3

0.49%

0.37%

Net Sales

21,507.30

22,922.00

100.00%

100.00%

Other Income

-480.4

875.3

-2.23%

3.82%

Stock Adjustments

-3.8

111

-0.02%

0.48%

Total Income

21,023.10

23,908.30

97.75%

104.30%

Expenditure

 

Raw Materials

3,438.80

4,140.40

15.99%

18.06%

Power & Fuel Cost

154

141.4

0.72%

0.62%

Employee Cost

9,249.80

9,062.80

43.01%

39.54%

Other Manufacturing Expenses

1,687.80

2,071.80

7.85%

9.04%

Selling and Admin Expenses

1,523.00

1,475.10

7.08%

6.44%

Miscellaneous Expenses

691.4

640

3.21%

2.79%

Preoperative Exp Capitalised

0

0

0.00%

0.00%

Total Expenses

16,744.80

17,531.50

77.86%

76.48%

 

Mar '09

Mar '10

 

 

12 mths

12 mths

 

Operating Profit

4,758.70

5,501.50

22.13%

24.00%

PBDIT

4,278.30

6,376.80

19.89%

27.82%

Interest

196.8

108.4

0.92%

0.47%

PBDT

4,081.50

6,268.40

18.98%

27.35%

Depreciation

533.6

579.6

2.48%

2.53%

Other Written Off

0

0

0.00%

0.00%

Profit Before Tax

3,547.90

5,688.80

16.50%

24.82%

Extra-ordinary items

0

0

0.00%

0.00%

PBT (Post Extra-ord Items)

3,547.90

5,688.80

16.50%

24.82%

Tax

574.1

790.8

2.67%

3.45%

Reported Net Profit

2,973.80

4,898.00

13.83%

21.37%

Total Value Addition

13,306.00

13,391.10

61.87%

58.42%

Preference Dividend

0

0

0.00%

0.00%

Equity Dividend

586

880.9

2.72%

3.84%

Corporate Dividend Tax

99.6

128.3

0.46%

0.56%

Per share data (annualised)

 

Shares in issue (lakhs)

14,649.81

14,682.11

68.12%

64.05%

Earning Per Share (Rs)

20.3

33.36

0.09%

0.15%

Equity Dividend (%)

200

300

0.93%

1.31%

Book Value (Rs)

85.42

120.49

0.40%

0.53%

Interpretation of Common Size Profit & Loss account :

In the comparative Analysis of Profit & loss Account shows that net sale of the company is increase and total income of the company is also increase that is shown that the company is in the good condition .The some expenses like Power and fuel cost is decrease that's why the cost of the production is less. Profit before tax is increase and corporate dividend tax in also increase.

WHAT IS TREND ANALYSIS?

Trend analysis calculates the percentage change for one account over a period of time of two years or more.

An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. 

The following formula is used to calculate trend analysis:

Trend ratio = current year amount / base year amount*100

Trend Analysis of Balance Sheet:

TREND ANALYSIS

in Rs. Cr.

 

Mar '09

Mar '10

2009

2010

 

12 mths

12 mths

Sources Of Funds

 

Total Share Capital

293

293.6

100%

100.20%

Equity Share Capital

293

293.6

100%

100.20%

Share Application Money

1.5

1.8

100%

120.00%

Preference Share Capital

0

0

100%

0.00%

Reserves

12,220.50

17,396.80

100%

142.36%

Revaluation Reserves

0

0

100%

0.00%

Networth

12,515.00

17,692.20

100%

141.37%

Secured Loans

0

0

100%

0.00%

Unsecured Loans

5,013.90

5,530.20

100%

110.30%

Total Debt

5,013.90

5,530.20

100%

110.30%

Total Liabilities

17,528.90

23,222.40

100%

132.48%

 

Mar '09

Mar '10

0.00%

 

 

 

0.00%

 

12 mths

12 mths

100%

0.00%

 

 

 

0.00%

Application Of Funds

 

0.00%

Gross Block

5,743.30

6,761.30

100%

117.73%

Less: Accum. Depreciation

2,563.70

3,105.00

100%

121.11%

Net Block

3,179.60

3,656.30

100%

114.99%

Capital Work in Progress

1,311.80

991.1

100%

75.55%

Investments

6,895.30

8,966.50

100%

130.04%

Inventories

459.6

606.9

100%

132.05%

Sundry Debtors

4,446.40

4,754.70

100%

106.93%

Cash and Bank Balance

1,902.10

1,938.30

100%

101.90%

Total Current Assets

6,808.10

7,299.90

100%

107.22%

Loans and Advances

4,202.00

5,519.40

100%

131.35%

Fixed Deposits

2,507.10

3,726.00

100%

148.62%

Total CA, Loans & Advances

13,517.20

16,545.30

100%

122.40%

Deffered Credit

0

0

100%

0.00%

Current Liabilities

5,564.30

4,706.00

100%

84.57%

Provisions

1,810.70

2,230.80

100%

123.20%

Total CL & Provisions

7,375.00

6,936.80

100%

94.06%

Net Current Assets

6,142.20

9,608.50

100%

156.43%

Miscellaneous Expenses

0

0

100%

0.00%

Total Assets

17,528.90

23,222.40

100%

132.48%

 

 

 

Interpretation of Trend Analysis of Balance Sheet:

The sources of fund of the company has increased in the current year in comparison to the previous year. The current assets of the company has increased while the loans and advances given by the company has also increased. Current liabilities of the company have also increased.

Trend Analysis of Profit & Loss Account:

Profit & Loss account of Wipro

in Rs. Cr.

in %

in %

 

Mar '09

Mar '10

2009

2010

 

 

12 mths

12 mths

 

Income

 

Sales Turnover

21,612.80

23,006.30

100%

106.45%

Excise Duty

105.5

84.3

100%

79.91%

Net Sales

21,507.30

22,922.00

100%

106.58%

Other Income

-480.4

875.3

100%

-182.20%

Stock Adjustments

-3.8

111

100%

-2921.05%

Total Income

21,023.10

23,908.30

100%

113.72%

Expenditure

 

Raw Materials

3,438.80

4,140.40

100%

120.40%

Power & Fuel Cost

154

141.4

100%

91.82%

Employee Cost

9,249.80

9,062.80

100%

97.98%

Other Manufacturing Expenses

1,687.80

2,071.80

100%

122.75%

Selling and Admin Expenses

1,523.00

1,475.10

100%

96.85%

Miscellaneous Expenses

691.4

640

100%

92.57%

Preoperative Exp Capitalised

0

0

100%

0.00%

Total Expenses

16,744.80

17,531.50

100%

104.70%

 

Mar '09

Mar '10

 

 

12 mths

12 mths

 

Operating Profit

4,758.70

5,501.50

100%

115.61%

PBDIT

4,278.30

6,376.80

100%

149.05%

Interest

196.8

108.4

100%

55.08%

PBDT

4,081.50

6,268.40

100%

153.58%

Depreciation

533.6

579.6

100%

108.62%

Other Written Off

0

0

100%

0.00%

Profit Before Tax

3,547.90

5,688.80

100%

160.34%

Extra-ordinary items

0

0

100%

0.00%

PBT (Post Extra-ord Items)

3,547.90

5,688.80

100%

160.34%

Tax

574.1

790.8

100%

137.75%

Reported Net Profit

2,973.80

4,898.00

100%

164.71%

Total Value Addition

13,306.00

13,391.10

100%

100.64%

Preference Dividend

0

0

100%

0.00%

Equity Dividend

586

880.9

100%

150.32%

Corporate Dividend Tax

99.6

128.3

100%

128.82%

Per share data (annualised)

 

Shares in issue (lakhs)

14,649.81

14,682.11

100%

100.22%

Earning Per Share (Rs)

20.3

33.36

100%

164.33%

Equity Dividend (%)

200

300

100%

150.00%

Book Value (Rs)

85.42

120.49

100%

141.06%

Interpretation of Trend Analysis of Profit & Loss Account:

The sales of the company has increased over the last year as well as other incomes have also increased. The expenditure on raw material and

Power & fuel have also decreased, selling and administrative expenses have increased. The profit of the company have also increased. The equity dividend have also increased.

WHAT IS RATIO ANALYSIS:

A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis.

Different Kind of Ratios:

Liquidity Ratios:

Liquidity means the ability of the firm to pay its current liabilities. These ratios are used to assess the short term financial position of the firm. These ratios indicate the firm's ability to meet its current obligations. These are of two types:-

Current Ratios:

The current ratio is an indication of a firm's market liquidity and ability to meet creditor's demands. If a company's current ratio is in this range, then it is generally considered to have good short-term financial strength. If current liabilities exceed current assets (the current ratio is below 1), then the company may have problems meeting its short-term obligations. If the current ratio is too high, then the company may not be efficiently using its current assets or its short-term financing facilities. This may also indicate problems in working capital. The rule of thumb is 2:1.

FORMULA: CURRENT ASSETS/CURRENT LIABILITIES

Quick Ratio:

 The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company. The rule of thumb is 1:1.

QUICK RATIO = CURRENT ASSETS-INVENTORIES/CURRENT LIABILITIES

Leverage Ratios:

These ratios are acertain the ability of the firm to pay its long-term liabilities in time. It measures the relationship between external equities and internal equities. It ensures long-term financial stability of the business.

These are of following three types:

Total debt ratio-

This ratio shows the relationship between total assets and total long term debts of the business. It determine the extent to which debt is being covered by assets. The rule of thumb is 2:1.

TOTAL DEBT RATIO= TOTAL ASSETS/CAPITAL EMPLOYED

Debt Equity Ratio:

This ratio shows the relationship between long term debt and shareholders funds. This ratio indicates the proportion of funds which are acquired by long term borrowings comparision to shareholders funds. The rule of thumb is 2:1.

DEBT-EQUITY= DEBT/EQUITY

Proprietary Ratios-

This ratio establishess the relationship between shareholders funds to total assets of the firm. It determines long term solvency of the firm. The rule of thumb is 1:1.

PROPRIETARY RATIO= EQUITY/TOTAL ASSETS

Activity Ratios:

These ratios are calculated on the basis of cost of goods sold or sales. Sales have direct relationship with the performance of business as higher sales means higher performance. These ratios indicate how efficiently the total capital, working capital, fixed assets and stock of the business are profitably used.

Inventory turnover ratio-

This ratio helps us to calculate the total annual sales or the cost of goods sold divided by the cost of inventory.

Inventory turnover ratio = total sales or cost of goods sold / inventory

Asset turnover ratio-

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= SALES/ NET ASSETS

Profitability Ratios:

These ratios helps in calculating the profit margin of the firm. These are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. Some of the profitability ratios are profit margin, return on assets and return on equity,net margin etc.

Objectives:

To understand the customer expectation.

To get a deep knowledge of the concerned organization

Wipro company provide highest quantity products .

in quickly delivery cycles and lower costs.

To study the financial statements of organization

Critically analyzing the financial statements of the organization

Interpretation of financial data and taking conclusion out of it

Research methodology :

We use the research methodology to find out the hidden truth and research the problems. I have chosen secondary data for this term paper.

Secondary Data:

Secondary data was collected through various publications of books and journals, websites.

CONCLUSION:

Study of the financial statements of the company will help in knowing the finance position of the company as well as its growth or decline over the past few years. In short it will determine the overall position of the company.

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