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INTERNATIONAL SCHOOL OF BUSINESS AND

MEDIA; NANDE, PUNE

A

Project Report on

FINANCIAL STATEMENT ANALYSIS OF
WIPRO
In fulfilment of curriculum of

Business Reporting Presentation

SUBMITTED TO:
PROF. SANGEETA SOMAN
{FACULTY- B.R.P}

SUBMITTED BY:
MANISH KUMAR SHAW
{SEC-C; ROLL NO: 18230}

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INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA
NANDE, PUNE

DECLARATION

I Mr. Manish Kumar Shaw, Roll No. 18230 of International School of Business And
Media, Nande, Pune (Trimester II) for Business Reporting Presentation has completed project
on “FINANCIAL STATEMENT ANALYSIS OF WIPRO”in the academic year 2017-
18. This information submitted is true and original to the best of my knowledge.

Date: Signature of student
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INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA
NANDE, PUNE

CERTIFICATAE

Ms. Sangeeta Soman hereby certifies that Mr. Manish Kumar Shaw a student of
International School of Business And Media, Nande, Pune of P.G.D.M (Trimester II) Roll no.
18230, has completed Project on in the Academic Year 2017-18. This information submitted
is true and Original to the FINANCIAL STATEMENT ANALYSIS OF WIPRO best of
my Knowledge.

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ACKNOWLEDGEMENT I would like to thank my college for giving me this opportunity for taking such a challenging project. Sangeeta Soman for consistent guidance and mentoring for my research project I am also grateful to my friends for giving support in my project. Lastly. I would like to thank my Project Guide of PGDM course Prof. I would like to thank each and every person who helped me in completing the project especially my parents. “NO ENDEAVOUR ACHIEVES SUCCESS WITHOUT THE ADVICE & COOPERATION OF OTHER” 4 . which has enhanced my knowledge about “FINANCIAL STATEMENT ANALYSIS OF WIPRO”.

26 8 Findings 27-27 9 Conclusion 28-28 10 Bibliography 29-29 11 Annexure 30.37 5 .21 7 Data Analysis and Interpretation 22. 1 Cover page 01-01 2 Declaration 02-02 3 Student's Certificate 03-03 4 Acknowledgement 04-04 5 Introduction 06-13 6 Review of Literature and Methodology 14. No. INDEX Sl. Particulars Page No.

and interpretation without analysis is difficult or even impossible. These two are complimentary to each other. Analysis is useless without interpretation. the analysis and interpretation of financial statements is very essential to measure the efficiency. Analysis of financial statements is an attempt to assess the efficiency and performance of an enterprise. Analysis means establishing a meaningful relationship between various items of the two financial statements with each other in such a way that a conclusion is drawn. They are the indicators of profitability and financial soundness of the business concern. The term ‘financial analysis’ includes both ‘analysis and interpretation’. and the interpretation thereof to gain an insight into the profitability and operational efficiency of the firm to assess its financial health and future prospects. The term financial analysis is also known as analysis and interpretation of financial statements. It determines financial strength and weaknesses of the firm. INTRODUCTION The process of critical evaluation of the financial information contained in the financial statements in order to understand and make decisions regarding the operations of the firm is called ‘Financial Statement Analysis’. profitability. financial soundness and future prospects of the business units. It refers to the establishing meaningful relationship between various items of the two financial statements i. Objectives of financial analysis- a) Measuring the profitability b) Indicating the trend of achievements c) Assessing the growth potential of the business d) Comparative position in relation to other firms 6 . Thus.e. By financial statements we mean two statements : (i) Profit and loss Account or Income Statement (ii) Balance Sheet or Position Statement These are prepared at the end of a given period of time. Income statement and position statement. It is basically a study of relationship among various financial facts and figures as given in a set of financial statements.

(iv) Lenders : Lenders to the business like debenture holders. As a result of which they can demand better remuneration and congenial working environment. They like to know the earning capacity of the business and its prospects of future growth. 7 . (vii) Researchers : They are interested in financial statements in undertaking research work in business affairs and practices. (ix) Government and their agencies : Government and their agencies need financial information to regulate the activities of the enterprises/industries and determine taxation policy. It helps them in preparing budgets and assessing the performance of various departmental heads. the ability of the company to meet the debts as and when they fall due. The various parties interested in the analysis of financial statements are : (i) Investors : Shareholders or proprietors of the business are interested in the well being of the business. They suggest measures to formulate policies and regulations. (iii) Trade unions : They are interested in financial statements for negotiating the wages or salaries or bonus agreement with the management. suppliers of loans and lease are interested to know short term as well as long term solvency position of the entity. (viii) Employees : They are interested to know the growth of profit. (ii) Management : The management is interested in the financial position and performance of the enterprise as a whole and of its various divisions.e. (x) Stock exchange :The stock exchange members take interest in financial statements for the purpose of analysis because they provide useful financial information about companies. (vi) Tax authorities : Tax authorities are interested in financial statements for determining the tax liability.e) Assess overall financial strength f) Assess solvency of the firm Parties Interested in financial statement analysis- Analysis of financial statements has become very significant due to widespread interest of various parties in the financial results of a business unit. (v) Suppliers and trade creditors : The suppliers and other creditors are interested to know about the solvency of the business i.

the information derived from such statements may not be effective in corporate planning. 3. b) Company managers can compare sources with other sources and ascertain the results. therefore. the information obtained from their analysis will also be wrong which may mislead the user in making decisions. However. 8 .Comparison not possible The financial statements are based on historical data. customer's satisfaction. 4. management's skills and so on which are also equally important for decision making. Similarly. biased attitude of the analyst may also lead to wrong judgment and conclusion. Merits of financial statement analysis- a) This statement is useful to the management as guidance. Mislead the user The accuracy of financial information largely depends on how accurately financial statements are prepared. it fails to provide qualitative information such as management labor relation. If the style of change is not observed. Not useful for planning Since financial statements are prepared by using historical financial data.Demerits of financial statement analysis- 1. 2. as it explains always the funds movement in the organization. If their preparation is wrong.Wrong judgment The skills used in the analysis without adequate knowledge of the subject matter may lead to negative direction . Qualitative aspects Then financial statement analysis provides only quantitative information about the company's financial affairs. it may lead to financial problems. if the previous situation does not prevail. Therefore comparative analysis of financial statements of different years cannot be done as inflation distorts the view presented by the statements of different years. 5.

(2) Generally Accepted Accounting Principles. it becomes burden on capital structure. f)The most important benefit if financial statement analysis is that it provides an idea to the investors about deciding on investing their funds in a particular company. e) It is useful to forecast funds flow. It is useful to the management as a good tool to understand the funds movement in the organization very easily. (3) Personal Judgments. (4) Accounting Conventions. accounting conventions and personal judgments and conventions applied which affect them materially. d) The funds flow statement shows ways for this purpose. working capital of the organization can be increased by reducing other liquid assets. "Financial Statement reflects a combination of recorded facts. nature and accuracy of the data included in the financial statements which are influenced by the following factors: (1) Recorded Facts. According to the American Institute of Certified Public Accountants. Recording the transactions in the books of primary entry supported by document proofs such as Vouchers. It provides reasonable time to ascertain future funds requirements and make suitable arrangements to get the same. Tools of financial statement analysis- The tools or techniques which are commonly used for analyzing and interpreting financial statements are as follows- a) Comparative financial statements 9 . and Trial Balance. Invoice Note etc. Nature of financial statements- Financial Statements are prepared on the basis of business transactions recorded in the books of Original Entry or Subsidiary Books. It can also be used to know the working capital requirements." It is therefore.c) If the company depends on external sources for additional funds. Ledger.

In brief. comparative study of financial statements is the comparison of the financial statements of the business with the previous year’s financial statements. The study of increase or decrease in profit will help the interpreter to observe whether the profitability has improved or not. Like comparative balance sheet. The fourth column may be added for giving percentages of increase or decrease. (ii) For studying the long-term financial position of the concern. two financial statements (BALANCE SHEET and INCOME STATEMENT) are prepared in comparative form for analysis purposes: 1. cost of goods sold. It enables identification of weak points and applying corrective measures. 2. The first two columns are shown figures of various 10 . income statement also has four columns. Comparative Balance Sheet The comparative balance sheet shows the different assets and liabilities of the firm on different dates to make comparison of balances from one date to another. Working capital is the excess of current assets over current liabilities. The changes in money value and percentage can be determined to analyse the profitability of the business. (iii) The next aspect to be studied in a comparative balance sheet is the profitability of the concern. While interpreting comparative Balance sheet the interpreter is expected to study the following aspects : (i) Current financial position and Liquidity position (ii) Long-term financial position (iii) Profitability of the concern (i) For studying current financial position or liquidity position of a concern one should examine the working capital in both the years. The figures of the above components are matched with their corresponding figures of previous years individually and changes are noted. selling expenses. A third column is used to show change(increase/decrease) in figures. The comparative income statement gives an idea of the progress of a business over a period of time. one should examine the changes in fixed assets. office expenses etc. This statement traditionally is known as trading and profit and loss A/c. The comparative balance sheet has two columns for the data of original balance sheets. Important components of income statement are net sales. Comparative Income statement The income statement provides the results of the operations of a business. long-term liabilities and capital. Practically.

e. The total assets are taken as 100 and different assets are expressed as a percentage of the total. The difference between the inflow and outflow of cash is the net cash flow. – To study the operating profits – The increase or decrease in net profit is calculated that will give an idea about the overall profitability of the concern. The figures of these statements are shown as percentages of total assets. total liabilities and total sales respectively. b) Common Size Statements- The common size statements (BALANCE SHEET and INCOME STATEMENT) are shown in analytical percentages. 100 and different liabilities are calculated in relation to total liabilities. Thus the common size statement may be prepared in the following way. The analysis and interpretation of income statement will involve the following : – The increase or decrease in sales should be compared with the increase or decrease in cost of goods sold.items for two years. Similarly. – The total assets or liabilities are taken as 100 – The individual assets are expressed as a percentage of total assets i. The flow of cash into the business is called as cash inflow or positive cash flow and the flow of cash out of the firm is called as cash outflow or a negative cash flow. Take the example of Balance Sheet. various liabilities are taken as a part of total liabilities. 2) Common size income statement The items in income statement can be shown as percentages of sales to show the relations of each item to sales. Third and fourth columns are used to show increase or decrease in figures in absolute amount and percentages respectively. 1) Common size balance sheet A statement where balance sheet items are expressed in the ratio of each asset to total assets and the ratio of each liability is expressed in the ratio of total liabilities is called common size balance sheet. Cash flow statement is prepared to project the manner 11 . c) Cash flow statements- It refers to the analysis of actual movement of cash into and out of an organization.

Cash Flow Statement is prepared according to the Accounting Standard-3 (Revised) on Cash Flow Statement. Cash Flows from Financing Activities. solvency and efficiency of an enterprise through the technique of ratio analysis . It also depicts the net change in Cash and Cash Equivalents being the difference between receipts and payments under the three activities between the dates of two balance sheet. investing and financing activities by the enterprise. These are essentially long-term in nature. d) Ratio analysis- It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm. The ability of the business to pay the amount due to stakeholders as and when it is due is known as liquidity. 2.To ascertain the sources (receipts) of Cash and Cash Equivalents under operating. These are essentially short-term in nature. and the ratios calculated to measure solvency position are known as ‘Solvency Ratios’. business needs liquid funds. particularly towards external stakeholders. Cash Flows from Investing Activities.in which the cash has been received and has been utilized during an accounting year as it shows the sources of cash receipts and also the purposes for which payments are made. accounting ratios measure the comparative significance of the individual items of the income and position statements. and the ratios calculated to measure it are known as ‘Liquidity Ratios’. Thus. 12 . 2) Solvency ratios Solvency of business is determined by its ability to meet its contractual obligations towards stakeholders. The standard requires the Cash Flow Statement to be prepared showing cash flow under three parameters. and 3. As a technique of financial analysis. 1) Liquidity ratios To meet its commitments. it summarizes the causes for the changes in cash position of a business enterprise between dates of two balance sheets. It is possible to assess the profitability. Cash Flows from Operating Activities. which are :- 1. Purpose:.

Hence. the differences between the current assets and current liabilities. these are also known as ‘Efficiency Ratios’. with its long run view. By looking at a trend in a particular ratio. rising or remaining relatively constant. Contrary to the earlier. Trend analysis is important because. the fund means working capital i. Using the previous years’ data of a business enterprise. in which each item of different years bear to the same item in the base year. 13 . In a narrow sense the term fund means cash and the fund flow statement depicts the cash receipts and cash disbursements/ payments.e. The trend percentage is the percentage relationship. it may point to basic changes in the nature of the business. From this observation. trend analysis can be done to observe the percentage changes over time in the selected data. f) Fund flow analysis A report on the movement of funds or working capital. 4) Profitability ratios It refers to the analysis of profits in relation to revenue from operations or funds (or assets) employed in the business and the ratios calculated to meet this objective are known as ‘Profitability Ratios’ e) Trend analysis It is a technique of studying the operational results and financial position over a series of years.. one may find whether the ratio is falling. It highlights the changes in the cash receipts and payments as a cash flow statement in addition to the cash balances i.3) Turnover ratios This refers to the ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources. a problem is detected or the sign of good or poor management is detected. opening cash balance and closing cash balance..e.

Given that there are nine signals the maximum L-score is nine. He studied the “Risk adjusted Performance” of the international firms. If the signal is bad then the contribution is zero. He concluded that even though some of the funds have outperformed there was no consistency in performance.g. Uchimahali in her study on “ Performance Analysis of Lakshmi Engineering Works . These financial signals measure three areas of the company‟s financial position. Miss. namely profitability. Thus. H. Rehana Praveen in her study on “ Performance Evaluation of Ponnambalam Finance . If the signal is good it contributes a value of one to the overall L-score. P. depending on the signal‟s implication for future share returns and profitability. Miss. the financial signals we use to establish the strength of loser firms are his nine factorsii. Therefore the lowest L-score is zero. rise or fall in return on capital employed last year compared with the previous year) is classified as either „good‟ or „bad‟. There suggestion was that improved measures of firm’s performance for any period could be obtained by adjusting earlier measures depending on the degree of risk. financial gearing/liquidity and operating efficiency. REVIEW OF LITERATURE This part provides a review of some notable. A binary approach is taken in which a signal (e. Kovilpatti ”analyzed and suggested that the company must take efforts to reduce the stock level and utilize investments in fixed and current assets to strengthen the position of the company. from 0 to 9 14 . Coimbatore” mainly suggested that for improving the performance of the Finance the firm must recovered all its bad debts within time. Thus we have 10 levels of aggregate financial signal strength. Carlson (1970). Piotroski (2000) shows that the combined use of nine selected accounting variables has greater power to discriminate between stronger and weaker firms in terms of their future returns than alternative fundamental based factors . Friends and Blume (1970) commented on the “Risk adjustment performance of measures of sharpe and Treynor” . theoratical and empirical research worksdone by various institutions and authors in evaluating the financial performance.

Tracy warned that cash flows only show part of the picture and give no information about the business' profit or financial condition. 15 . Accountants and other financial advisors can use software to quickly perform somewhat complex analysis and generate reports for their clients. Without cash it is difficult for a business to function and it increases the likelihood that a business may fail." For those businesses with large inventories or client databases. or those that choose not to entrust data to the cloud. Since cash flows only show part of the picture. and Sage 50 Complete Accounting 2013 are good options. Arar (2012) wrote that small businesses operating in the 2010s have "more accounting software options than ever. Intuit QuickBooks 2013.Tracy (1999) called cash the "lubricant" of business. other types of financial reports are needed. including Web-based subscriptions. But. O'Bannon (2005) cautioned business owners against being lulled to sleep by the power of current accounting software products. O'Bannon felt that one of the primary benefits of the newer software is that it allows owners and financial advisors to speak the same language and lets business owners provide easy to use documentation to their accountant. which cannot replace the knowledge gained by using professional financial advice. however. such desktop tools as Acclivity Account Edge Pro 2012.

•To offer suggestions based on research finding. In view of the objects of the study listed above an exploratory research design has been adopted. The study used Descriptive research design for the purpose of getting an insight over the issue. •To know the credit worthiness of the company. This research is based on "RATIO ANALYSIS" and interpretation of financial statement. 16 . gathering recording and analysis of data about problem relating to any particular field. and internal company management understand how well a business is performing and areas of needing improvement. Descriptive research is used when the objective is to provide systematic description that is as factual and accurate as possible.Through the internet and published data. Research Methodology  Research is designed as a systematic. It is to provide an accurate picture of some aspects of market environment. identify financial weakness of the firm and to suggest remedial. creditors. 1. A research project has to be conducted making sure that the data is collected adequately and economically. These relationships between the financial statement accounts help investors. Method of data collection: Secondary data . Financial ratios are mathematical comparisons of financial statement accounts or categories. Research Design: Research design pertains to the great research approach or strategy adopted for a particular project. •To know the financial status of the company.  It determines strength reliability and accuracy of the project. to know the financial position of the company . Exploratory research is one which is largely interprets and already available information and it lays particular emphasis on analysis and interpretation of the existing and available information.

Some of the liquidity ratios are- a) Current ratio- The current ratio is a liquidity and efficiency ratio that measures a firm's ability to pay off its short-term liabilities with its current assets. Ratios are just a raw computation of financial position and performance. In a sense. Cash. these ratios show the cash levels of a company and the ability to turn other assets into cash to pay off liabilities and other current obligations. cash equivalents. CR= Current assets / Current liabilities b) Liquid ratio/ Quick ratio - The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a company to pay its current liabilities when they come due with only quick assets. big and small companies can be use ratios to compare their financial information. Quick assets are current assets that can be converted to cash within 90 days or in the short-term. They can also be used to compare different companies in different industries. 17 . Ratios allow us to compare companies across industries. Since a ratio is simply a mathematically comparison based on proportions. They are divided into 4 main categories- 1) Liquidity ratios- Liquidity ratios analyze the ability of a company to pay off both its current liabilities as they become due as well as their long-term liabilities as they become current. big and small. The current ratio is an important measure of liquidity because short-term liabilities are due within the next year. financial ratios don't take into consideration the size of a company or the industry. In other words. to identify their strengths and weaknesses. Ratios are easy to understand and simple to compute.Financial ratios are the most common and widespread tools used to analyze a business' financial standing.

In other words. Efficiency ratios often look at the time it takes companies to collect cash from customer or the time it takes companies to convert inventory into cash—in other words. and current accounts receivable are considered quick assets. ITR= Cost of goods sold / Average inventory b) Receivables turnover ratio- Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business can turn its accounts receivable into cash during a period. It takes into account only the most liquid assets like cash and marketable securities. LR= Current assets . it measures how many times a company sold its total average inventory dollar amount during the year.short-term investments or marketable securities. the 18 . make sales. Some of the turnover ratios are- a) Inventory turnover ratio- The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period. SQR= Cash and Bank + Marketable securities / Total current liabilities 2) Turnover ratios- Efficiency ratios also called activity ratios measure how well companies utilize their assets to generate income. These ratios are used by management to help improve the company as well as outside investors and creditors looking at the operations of profitability of the company. In other words. This measures how many times average inventory is "turned" or sold during a period.Inventories / Current liabilities c) Super quick ratio- This ratio is a further improvement over the quick ratio.

solvency ratios identify going concern issues and a firm's ability to pay its bills in the long term. also called the current ratio. is a liquidity ratio that measures a firm's ability to pay off its current liabilities with current assets. RTR= Net credit sales / Average receivables c) Working Capital turnover ratio- The working capital ratio.accounts receivable turnover ratio measures how many times a business can collect its average accounts receivable during the year. also called leverage ratios. assets. DER= Debt / Shareholder's fund (net worth) 19 . In other words. The debt to equity ratio shows the percentage of company financing that comes from creditors and investors. solvency ratios focus more on the long-term sustainability of a company instead of the current liability payments. WCTR= Annual net sales / Average working capital 3) Solvency ratios / Leverage ratios- Solvency ratios. A higher debt to equity ratio indicates that more creditor financing (bank loans) is used than investor financing (shareholders). and earnings. Although they both measure the ability of a company to pay off its obligations. liquidity ratio that compares a company's total debt to total equity. Many people confuse solvency ratios with liquidity ratios. measure a company's ability to sustain operations indefinitely by comparing debt levels with equity. The working capital ratio is important to creditors because it shows the liquidity of the company. Some of the solvency ratios are- a) Debt -Equity ratios- The debt to equity ratio is a financial.

In a sense. ER= Total equity / Total assets c) Debt ratio- Debt ratio is a solvency ratio that measures a firm's total liabilities as a percentage of its total assets. It is used to examine the ability of a business to create sellable products in a cost-effective manner. Profitability ratios focus on a company's return on investment in inventory and other assets. These ratios basically show how well companies can achieve profits from their operations. DR= Total liabilities / Total assets 4) Profitability ratios- Profitability ratios compare income statement accounts and categories to show a company's ability to generate profits from its operations. to see if a business can continue to provide products to the marketplace for which customers are willing to pay a reasonable price.b) Equity ratio- The equity ratio is an investment leverage or solvency ratio that measures the amount of assets that are financed by owners' investments by comparing the total equity in the company to the total assets. In other words. GPR= Gross profit / Net sales *100 20 . the debt ratio shows a company's ability to pay off its liabilities with its assets. Some of the profitability ratios are- a) Gross profit ratio- The gross profit ratio shows the proportion of profits generated by the sale of products or services. before selling and administrative expenses. especially when tracked on a trend line. this shows how many assets the company must sell in order to pay off all of its liabilities. The ratio is of some importance.

ROI= EBIT / Average total asset 21 . and income taxes recognized. In other words. the return on assets ratio or ROA measures how efficiently a company can manage its assets to produce profits duringa period.b)Net profit ratio- The net profit percentage is the ratio of after-tax profits to net sales. often called the return on total assets. It is also used to compare the results of a business with its competitors. administration. and financing have been deducted from sales. to judge performance over time. especially when combined with an evaluation of how well it is using its working capital. NPR= Profit after tax / Net sales* 100 c) Return on investments / Return on assets- The return on assets ratio. As such. It reveals the remaining profit after all costs of production. The measure is commonly reported on a trend line. is a profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets. it is one of the best measures of the overall results of a firm.

15 1.09 Asset Turnover Ratio 1.80 103.77 Profitability Ratios Operating Profit Margin(%) 22.52 Dividend Payout Ratio Cash Profit 33.60 32.50 Adjusted Cash Margin(%) 20.29 69.87 31.00 14. -.38 99.56 0.15 0.00 2.56 118.85 72.66 25.61 23.68 40.66 25.68 40.23 Return on Assets Excluding Revaluations 140.74 18.67 0.46 4.50 Debt Equity Ratio 0.93 84.75 16.53 2.15 134.50 Net Profit Margin(%) 19.91 157.71 30.93 28. -.60 18.03 -.15 24.14 Average Raw Material Holding -.51 Debtors Turnover Ratio 4.23 Adjusted Return on Net Worth(%) 23.04 4.02 2.38 16.22 Financial Charges Coverage Ratio 32.98 1.26 36.61 Investments Turnover Ratio 85.77 Total Debt to Owners Fund 0.21 88.00 Operating Profit Per Share (Rs) 37. -- Number of Days In Working Capital 176.86 19.52 20.71 Selling Distribution Cost Composition -.71 Cash Profit Margin(%) 20.25 1.17 0.17 0.71 72.16 23.51 Fixed Assets Turnover Ratio 4.78 Imported Composition of Raw Materials Consumed 76.03 16. -- Bonus in Equity Capital 96.26 20.04 Return On Net Worth(%) 23. -.91 128.38 16.45 10.59 96. -.39 97.73 18.47 68.24 28.11 24.00 Financial Charges Coverage Ratio Post Tax 25.15 27.58 Net Operating Profit Per Share (Rs) 166.48 68.16 Earning Retention Ratio 63.55 4.80 103.64 0.03 98.72 22.31 19.00 Dividend Per Share 12. -.31 19.32 23.16 1.23 Return On Capital Employed(%) 26.03 24.15 0.56 Liquidity And Solvency Ratios Current Ratio 2.47 96.16 1.97 Management Efficiency Ratios Inventory Turnover Ratio 85.09 26.97 75.94 Quick Ratio 2.17 26.29 27. -.68 19.55 1.17 0.83 73. 0.07 Profit Before Interest And Tax Margin(%) 19.72 22.49 33.96 6.00 2.04 Return on Long Term Funds(%) 30.17 0.86 Free Reserves Per Share (Rs) -.96 169.17 3.97 68. -- Average Finished Goods Held -. -.52 Cash Earning Retention Ratio 66.12 18.09 Debt Coverage Ratios Interest Cover 30.94 4.96 169.00 2.06 17.16 23.13 14.35 14.47 26.22 Long Term Debt Equity Ratio 0. Data Analysis and Interpretation- Key financial ratios of Wipro- Mar Mar '14 Mar '13 Mar '12 '15 Investment Valuation Ratios Face Value 2.22 119.59 4.64 21.57 73.97 22 .00 6.00 7.48 Dividend Payout Ratio Net Profit 36.88 19.78 Adjusted Net Profit Margin(%) 18.22 119.08 Profit & Loss Account Ratios Material Cost Composition 5.85 29.03 0.19 1.98 Cash Flow Indicator Ratios 31.37 96.84 Adjusted Cash Flow Times 0.03 98.12 18.29 16. -.44 127.38 99.95 2.81 Total Assets Turnover Ratio 1.02 9.44 12.52 20.03 1.50 20.57 8.04 Return on Assets Including Revaluations 140.09 Gross Profit Margin(%) 20.00 8.11 1.43 21. -- Expenses as Composition of Total Sales 89.

22 119.653 148.852 TOTAL EQUITY AND LIABILTIES 534.369 ASSETS Non-current assets Fixed assets Tangible assets 13 35.04 Balance Sheet of Wipro- Notes 2015 2014 EQUITY AND LIABILITIES Shareholders’ funds Share capital 3 4. Mar Mar '14 Mar '13 Mar '12 '15 Earnings Per Share 33.535 Capital work-in-progress 3.559 Share application money pending allotment(1) 5 – – Non-current liabilities Long term borrowings 6 10.530 131.042 Trade payables 10 57.95 22.487 Long term loans and advances 16 30.710 29.794 2.511 24.889 14.566 Other current liabilities 11 25.085 457.38 99.283 Trade receivables 20 81.968 Deferred tax assets 47(ii) 1.216 293.150 36.751 Non-current investments 16 55.215 Intangible assets and goodwill 14 4.03 98.05 Book Value 140.797 51.288 53.659 1.392 Inventories 19 4.627 346.196 173.981 Other non-current assets 17 3.216 14.509 23 .612 2.932 Reserves and surplus 4 341.736 2.442 85.279 288.704 35.048 Short term provisions 12 41.061 Deferred tax liabilities 47(ii) 567 1.18 29.958 Current liabilities Short term borrowings 9 49.368 5.327 Current assets Current investments 18 51.684 3.390 135.888 58.94 19.632 10.379 Other long term liabilities 7 281 629 Long term provisions 8 2.937 4.700 36.

72 Interpretation- Ideal ratio is 8 times so in this case company is covering under the ratio.085 457.549 Short term loans and advances 22 52.555 326.293 Other current assets 23 51. 2) Turnover ratio- a) Inventory turnover ratio = 473182 / 3538.29 Interpretation- Ideal ratio is 2:1 so in this case company is covering under the ratio.26 Interpretation- Ideal ratio is 1:1 so in this case company is not covering under the ratio.561 29.195 45. Cash and bank balances 21 156. High ratio indicates under trading and over capitalization. accumulation of stock and excessive quantities of 24 . High ratio indicates that the firm is liquid and has the ability to meet its current or liquid liabilities in time.675 105. b) Quick ratio = 398555 .016 398. Low ratio may reflect dull business .4794 / 173653 = 2. over investment in inventory.5 = 133.369 Significant accounting policies 2 Here is the ratio analysis of the company for the year 2015 based on the above Annual report of Wipro: 1) Liquidity ratio- a) Current ratio = 398555/ 173653 = 2.042 TOTAL ASSETS 534.

Low ratio may reflects low collection period of the sound management policy.5 = 5. c) Debt ratio = 173653 / 534085 = 0. 3) Solvency ratio- a) Debt Equity ratio = 10632 / 346216 = 0.32 Interpretation- Ideal ratio is 2:1 so in this case company is not covering under the ratio.certain inventory items in relation to immediate requirements.5:1 so in this case company iscovering under the ratio. b) Receivables turnover ratio = 473182 / 83475. Lower the ratio higher will be the debt which will create troubles for the company. if debt is more than 2 times the equity it is vice versa. Higher the ratio indicate the better long term solvency position of the company. 25 .66 Interpretation- Ideal ratio is 10-12 times so in this case company is not covering under the ratio . b) Equity ratio = 346216 / 534085 = 0. it means the creditors are relatively less and the financial structure is sound . If debt is less than 2 times the equity.03 Interpretation- Ideal ratio is 2:1 so in this case company is not covering under the ratio.64 Interpretation- Ideal ratio is 0. High ratio indicates that the firm is selling inventory relatively quickly.

greater is the capacity of the firm to withstand adverse economic conditions and vice versa. b) Net profit ratio = 9663. Higher the ratio higher will be the earning's from a company's total pool of capital.05/ 9843.54% Interpretation- A low ratio may indicate unfavorable purchasing while higher the gross profit ratio better the results.18 / 495727 = 6. 26 . c) Return on investment = 33.4) Profitability ratio- a) Gross profit ratio = 14326.20 *100 = 145.20 *100 = 98.69% Interpretation- ROI should be at or above a company's borrowing rate .17 / 9843.17% Interpretation- Higher the ratio .

this gives a lot of opportunity to company to raise debts for rapid expansion in future. Gross profit ratio. when it is high indicates that the company can make a reasonable profit. When it is low. the more effective the company is in converting revenue into actual profit. It implies a more stable business with the potential of longevity because a company with lower ratio also has a lower overall debt. a higher ROI means that investment gains compare favorably to investment costs while a lower ratio is unfavorable. Receivables ratio is low which implies that the company should re-assess its credit policies in order to ensure the timely collection of credit sales that is not earning interest for the firm. the inventory ratio is very more as compared to the ideal ratio so this means that company has improve its performance by doing high turnover. Having such low debts in the balance sheet also means that the cost of capital for the company is on the higher side. The higher the margin is. Debt ratio is also low which is favorable than a high ratio. a low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss. the firm is in a position to meet its immediate obligation in all the years. Equity ratio is high as compared to the ideal ratio which implies that the company is not more prone to losses for large portion of its earnings is spent in paying interests. Return on investment. As in case of turnover ratio. 27 . Findings As in case of liquidity ratio. the debt-equity ratio is very low as compared to its ideal ratio . Quick ratio is exceeding 1. as long as it keeps the overhead cost in control. Net profit ratio. the current ratio of the company is more than its ideal ratio so this implies that the company is prudently handling in current assets and liabilities. As in case of solvency ratio. As in case of profitability ratio. it indicates that the business is unable to control its production cost.

The long term solvency of the company is good. Fixed assets are efficiently utilized by the company due to which the profit of the company is increasing every year. Net fixed asset turnover ratio is increasing year by year because of sale is increasing continuously and as the company sale is continuously rising but the net profit is not so much increased so management should take some step to decrease its expenses. The company distributes dividend to its shareholders every year. Conclusion According to the research we find that the company’s overall position is good. The company maintains low liquidity to achieve high profitability. 28 . The company achieves sufficient profits in past 4 years. Inventory turnover is increased as compared to after all year so management should take care about good efficiency of stock management.

ac.com/financial-ratios  http://www.yourarticlelibrary.org/srsec320newE/320EL27. Pandey Financial Statement Analysis (Class 12) .P.BOOKS- Financial Management.com/Q/Vision_and_mission_statement_of_wipro_company  file:///C:/Users/lenovo/Desktop/Wipro%20Annual%20Report%20April%202015.org/wiki/Wipro  http://www. R.NCERT Publishers 29 .com/about-Wipro/  https://en.html .pdf  http://www.html  file:///C:/Users/lenovo/Desktop/Wipro%20Key%20Financial%20Ratios.com/financial-management/financial-statements- concept-objectives-advantages-and-other-details/29434/  http://download.I.com/doc/28985450/Marketing-Strategy-of-WIPRO-by- Srinivas#scribd  http://www.in/ncerts/l/leac204. Rustagi Financial Management.html  http://dosen.id/wp-content/uploads/2013/02/Chapter-6-Financial- Statements-Analysis-and-Interpretation.ncert.myaccountingcourse.blogspot. Theory Concepts and Problems .answers.pdf  www.in/2010/02/limitations-of-financial-statement.M.Dr.nos.pdf  http://www.narotama.nic.wipro.scribd.wikipedia.%20Wipro% 20Financial%20Statement%20%26%20Accounts.com/study- mm/Financial___Accounting/Financial%20&%20Accounting/Lesson-07.bitsvizagmba. Bibliography  http://accountlearning.pdf  http://www.

the company or the group) is a leading India based provider of IT Services and Products. Wipro delivers unmatched business value to customers through a combination of process excellence. guiding the company through four decades of diversification and growth to emerge as one of the Indian leaders in the software industry. globally. Wipro has 40+ ‘Centres of Excellence’ that create solutions around specific needs of industries. making it one of India's largest publicly traded companies and seventh largest IT Services firm in the World. services company. its market capitalization was approximately $ 35 Billion. software solutions and research and development services in the areas of hardware and software design to companies worldwide. 36 Development centers. Team Wipro is 75. together with its subsidiaries and associates (collectively. B u s i n e s s process outsourcing. On 31 March 2015. Wipro Technologies is a global services provider delivering technology-driven business solutions that meet the strategic objectives clients. quality frame works and service delivery innovation. Wipro Limited demerged its non-IT businesses into a separate company named Wipro Enterprise Limited in 2013. including Business Process Outsourcing (BPO) Services. Wipro Limited (Wipro) is a global information technology (IT). 30 . Investors across 24 countries. Wipro is present across 29 countries. Annexure Company profile ( Wipro) - Wipro Limited (Western India Products Limited) is an Indian multinational digital strategy. Wipro is a $3. Azim Hashim Premji (born 24 July 1945) is an Indian business tycoon and philanthropist who is the chairman of Wipro Limited. India.000 Strong from 40nationalities and growing. IT Consulting and system integration services company headquartered in Bangalore. R&D S e r v i c e s . Further. Wipro has other business such as India and Asia IT Services and products and Consumer Care and Lighting. Wipro provides a range of IT services.664 employees servicing about 900 of the Fortune 1000 corporations and has operations in 67 countries. Wipro Limited (Wipro).5 billion Global company in Information Technology Services. As of December 2015. the company has 170. Wipro is the World's first CMM Level 5 certified software Services Company and the first outside USA to receive the IEEE Software Process Award.

 Wipro Japan KK  Wipro Shanghai Ltd. In today’s world.Wipro is globally recognized for its innovative approach towards delivering business value and its commitment to sustainability.  Wipro Trademarks Holding Ltd. Wipro is well positioned to be a partner and co- innovator to businesses in their transformation journey.  Wipro Consumer Care Ltd. 31 . Today we are a trusted partner of choice for global businesses looking to ‘differentiate at the front’ and ‘standardize at the core’ through technology interventions. organizations will have to rapidly reengineer themselves and be more responsive to changing customer needs. Wipro champions optimized utilization of natural resources.  Wipro Health Care Ltd.  Wipro Chandrika Ltd.  Wipro Travel Services Ltd. capital and talent.  Wipro Cyprus Private Ltd. identify new growth opportunities and facilitate their foray into new sectors and markets. Group Companies  Wipro Infrastructure Engineering Ltd  Wipro Inc.(a)  Wipro Holdings (Mauritius) Ltd.

Management of the company- Board of Directors 1. Dr Ashok S Ganguly Former Chief Ex. Vagual Chairman-ICICI Bank Ltd 6. Audit committee N Vaghul– Chairman P M Sinha .Member B C Prabhakar – Member Board Governance and Compensation Committee Ashok S Ganguly – Chairman N Vaghul . P.Usa. Dr. M.Premji Chairman 2.Member P M Sinha – Member Shareholders’ Grievance and Administrative Committee B C Prabhakar – Chairman AzimHPremji – Member 32 . B . Officer. Sinba Former Chairman PepsiCo India Holding Auditors KPMG BSR & Co. 5. Nortel 7. Sheth Professor Of Marketing-Emory Uni.C. AzimH . Officer Nortel 3. Prabhakar Practitioner of Law 4. Bill Owens Former Chief Ex.  Wipro Australia Ltd. N.

search engine promotion . . .Planning to aggressively develop the R & D services by focusing on high growth markets . -Marketing team relies on the prospect database to create carefully targeted lists based on incoming traffic . client profiles and ongoing web activity. .thought leadership content on leading IT portals and directories .Special offers and more than 400 case studies to get visitors to demonstrate and register their special interests. 33 . . targeting prospective clients while they are searching for relevant IT information. -Focused on new client acquisition in Europe and Asia.Wipro's own website is the fulcrum of the entire lead generation program. Mostly this mean web based marketing with four key components- . Marketing strategies adopted by Wipro Wipro focuses largely on "pull" marketing initiatives.website content Wipro's corporate strategies are .Wipro uses permission marketing to strengthen relationships and move prospects along the sales cycle.web seminars and events . .Consciously focused on increasing the revenue contribution from higher end service lines.Comprehensive web monitoring.

Vision Contribute for global e-society. where a wide range of information is being exchanged beyond time and space over global networks. which breaks down the boundaries among countries. Mission Our mission is to be a RF System Solution Provider. Continuous effort to enhance people's lifestyle and quality by means of developing new technology in wireless communication. allowing individuals to take part in various social activities in an impartial. Our Goals:  To support customers who rely on our ability as an advanced RF System Solution Provider  To build up core competencies through collaboration with technological partners  To contribute to the Ubiquitous Networking Society by providing chip level RF system solutions 34 . through its innovative research and design works for a new world of broadband wireless communications. secure way. regions and cultures.

finance and accounting services and process improvement services f o r repetitive processes! The Global IT Services and Products segment accounted for 74% of the Company’s revenues and 89% of its operating income for the year ended March 31. n e t w o r k m a n a g e m e n t a n d messaging services. Its enterprise solutions have served clients from arrange o f industries. The range of its services includes IT consulting. the IT Services and Products segment accounted for 68% of its revenue. Product lines  Global IT Services and Products The Company's Global IT Services and Products segment provides IT services to customers in the Americas. and research and development services. I t s s e r v i c e s e x t e n d f r o m e n t e r p r i s e a p p l i c a t i o n services to e-Business solutions. and the BPO Services segment accounted for 6% of its revenue during fiscal 2007. systems management and migration. The technology infrastructure support services division accounted for 11% of Wipro's IT Services and Products revenues in fiscal2007.  Technology Infrastructure Service Wipro offers technology infrastructure support services. Europe and Japan. technology infrastructure outsourcing. The enterprise solutions division accounted for 63% of its IT Services and Products revenues for the fiscal 2007. technology infrastructure support services. systems integration. re-engineering and maintenance. telecom. including energy and utilities. 35 . The Company provides its IT Services and Products clients with around-the-clock support services. BPO services and research and development services in the areas of hardware and software design. such as help desk management. and media and entertainment. 2007 (fiscal 2007). Its service offerings in BPO services include customer interaction s e r v i c e s . development. package implementation.  Customized IT solutions Wipro provides its clients customized IT solutions in the areas of e n t e r p r i s e I T services. finance. Of these percentages. custom application design. The Company provides a range of enterprise solutions primarily to Fortune1 0 0 0 a n d G l o b a l 5 0 0 c o m p a n i e s .

and provides enterprise clients with IT solutions. IBM Global S e r v i c e s .  Research and Development Services Wipro's research and development services are organized into three areas of focus: telecommunications and inter-networking. application service providers and Internet data centers. such as fiber optics communication networks. marketing services. is focused on the Indian. For BPO projects. and process improvement services for repetitive processes. The Company's suite of services and products consists of technology products. The Company provides software application integration. h a n d . C o g n i z a n t . as well as other machines. wireless networks. The technology is p a r t i c u l a r l y i m p o r t a n t t o p o r t a b l e c o m p u t e r s . The India and Asia Pac IT Services and Products segment accounted for 16% of Wipro's revenue in fiscal 2007. mortgage processing and document management. 36 . I n f o s y s .  Business Process Outsourcing Service Wipro BPO's service offerings include customer interaction services. T h e C o m p a n y p r o v i d e s software and hardware design. c o n s u m e r electronics. The Company competes with Accenture. which is referred to as Wipro InfoTech. Wipro's software solution for e m b e d d e d s ys t e m s a n d I n t e r n e t a c c e s s d e v i c e s i s p r o g r a m m e d i n t o t h e h a r d w a r e integrated circuit (IC) or application -specific integrated circuit (ASIC) to eliminate t h e n e e d f o r r u n n i n g t h e s o f t w a r e through an external source. data networks. automotive electronics and mobile phones. voice switching networks and networking protocols.h e l d d e v i c e s . Asia -Pacific and Middle- East markets. the Company has a defined framework to manage the complete BPO process migration and transition. such as accounts payable and accounts receivable processing. I n d i a a n d Asia Pac IT Services and Products The Company's India and Asia Pac IT Services and Products business segment. a n d t e l e c o m m u n i c a t i o n s a n d s e r v i c e p r o v i d e r s . computer peripherals. technical support services and IT helpdesks. S a t ya m a n d T a t a C o n s u l t a n c y S e r v i c e s . embedded systems and Internet access d e v i c e s . such as process-controlled equipment. EDS. network integration and maintenance services to telecommunications service providers. such as IT - enabled customer services. development and implementation services in areas. finance and accounting services. such as claims processing. Internet service providers.

network s. oil. using ethnic ingredients. s u s t e n a n c e o f e n t e r p r i s e a p p l i c a t i o n s . light bulbs and fluorescent tubes.  Wipro's system integration services Include integration of computing platforms. and enterprise application integration. a cooking medium used in homes.technology int egration. custom application development. IT management and inf rastructure outsourci ng s e r v i c e s . The Company's product line includes incandescent light bulbs. Brands include Santoor. data c e n t r e a n d enterprise management software. I t o p e r a t e s b o t h i n c o m m e r c i a l a n d r e t a i l m a r k e t s . package i m p l e m e n t a t i o n . develops and implements enterprise applications for c o r p o r a t e c u s t o m e r s . and consulting. diapers and feeding bottles and Wipro Sanjeevani line of wellness products. T h e C o m p a n y ' s solutions include custom application development. The Wipro Baby Soft line of infant and child care products includes soap. including industry- specific applications. It sells this product under the brand name Wipro Sunflower. technology. and bulk consumption points like bakeries and restaurants. package implementation and maintenance. These services are typically bundled with sales of the Company's technology products. wellness products. compact fluorescent l a m p s a n d l u m i n a r i e s . and lighting accessories. Wipro a l s o provides consulting services in the areas of business continuity and r i s k management. Wipro 'designs. Its product line consists of hydrogenated cooking oils. software development centres and other industries. talcum powder. as well as baby products. soaps and toiletries. The Company's product lines include hydrogenated cooking oil. Its product lines include soaps and toiletries.  Consumer Care and Lighting Wipro's Consumer Care and Lighting business segment accounted for 5% o f i t s revenue in fiscal 2007. application integration. storage. retail stores. 37 . Chandrika and Wipro Active. process and strategy. T h e Company has also developed commercial lighting sol utions for p h a r m a c e u t i c a l production centers.