Professional Documents
Culture Documents
OF
ACCOUNTING
SUBMITT
ED BY
Anah
mahajan
Roll no-
rr1002a10
INDEX
1. INTRODUCTION OF
COMPANY
2. BACKGROUND OF
COMPANY
3. INTRODUCTION OF BALACCE
SHEET AND PROFIT &LOSS
4. COMPARATIVE STATEMENT
OF BALANCE SHEET AND
P&L
5. COMMON SIZE STATEMENT
OF BALANCE SHEET AND P &
L
6. RATIOS
7. FUND FLOW STATEMENT
8. CASH FLOW STATEMENT
9. INTERPRETATION
10. CONCLUSION
Patni Computer Systems Ltd., is a provider of Information Technology
services and business solutions. The company employs over 15000
people, and has 23 international offices across the Americas, Europe, and
Asia-Pacific, as well as offshore development centres in 8 cities in India.
Patni's clients include more than 400 Fortune 1000 companies.[
History
India born, Narendra K. Patni first came to the US in 1964 on an MIT fellowship and in the
early 1970s, he was appointed the president of Forrester Consulting Group, which advised
companies and government agencies on technology issues.
While there, he became aware of the benefits of outsourcing during a project involving advance
level typesetting. “The best way to do it is where the labor is cheaper”, he said and so was born
the first outsourcing companies in India.
The Beginning
The name of the company was initially Data Conversion Inc in 1972. Narendra Patni and his
wife Poonam started this experiment in their house, naming one room as ‘US’ and the other as
‘India’. In one room, they wrote instructions to convert data from paper documents to computers.
In another room, a group of MIT students typed out the data into a Flexowriter machine that spat
out paper tape, which was then a very labor intensive and multi-step data conversion process. A
ground rule was that there would be no conversation only written notes, because at that time
phone connections between US and India were still spotty.
The husband-wife duo who started operations from the third floor of their apartment in US,
began with 20 people in back office operations in Pune (now have grown to over 14000
employees worldwide). In the Pune office, employees typed out court documents for LexisNexis,
movie summaries for American Film Institute and catalogs for American Mathematical Society.
Each week boxes of paper tapes were flown to US for processing through readers and conversion
into magnetic tapes that was fed into computers. This experiment has mushroomed into a
business empire and a global phenomenon that is fuelling productivity.
This was Patni's first step into the realm of software services. By late 1970s the company had
garnered enough foreign exchange to take the next step forward. Patni came up with the idea of
importing multi user server systems and selling computer time. Eventually, an agreement with
US based computer manufacturer Data General to supply computer systems through satellite
links helped create Patni Computer Systems in 1978. The company was incorporated in India on
10 February 1978 under the Indian Companies Act, 1956.
Around the same time Naren Patni had the idea of software development opportunities from Data
General to be delivered from India. And they got the projects! Mr. Patni’s dream of leveraging
India as a high quality and low cost delivery base became a reality when in 1986 India’s first
ODC (Offshore Delivery Centre) for Data General was set up. This was the start as Patni
successfully initiated and developed the outsourcing business model – which flourished into one
of the largest industries worldwide, connecting the world in ways that was unimaginable some
time ago.
During the early 1990s the company was too focused on its hardware market and couldn’t
leverage the growth of software opportunities. It was then that Naren Patni roped in consulting
group McKinsey to recommend how to scale up their business. The firm recommended massive
restructuring of the organization into strategic business units based on market segments and
technological expertise supported by horizontal groups. From an 80 crore company in 1996, the
company’s revenues have grown to 656 million USD till 2009
Christened, Patni Knowledge Centre, this facility is designed and constructed as per the
guidelines of LEED (Leadership in Energy and Environmental Design) India Green Building
Rating System for New Construction
Patni US,
Patni Chennai,
Patni UK,
1.COMPARATIVE STATEMENT OF
BALANCE SHEET-
INTRODUCTION-
The comparative balance sheet
analysis is the study of trend of the same items, groups of items and
computed items in two or more balance sheet of the same business
enterprise on different dates. The changes in periodic balance sheet
item reflect the conduct of business. The changes can be observed by
comparison of 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. The comparative balance sheet has two
columns for the data of original balance sheets. The third column is used
to show increases in figures. The fourth column may be added for giving
percentages of increases and decreases
SOURCES OF FUNDS :
APPLICATION OF FUNDS :
- -
2,537.7 2,356.1 48.1
Gross Block 7 4,893.89 2 4
5,276.2 2,950.0 126.
Capital Work in Progress 9 2,326.29 0 80
COMMPARATI
VE
STATEMENT
OF PROFIT&
LOSS
(Rs in
Crs)
Change
Year 10-Mar 9-Mar s %
INCOME :
20,156. 14,513.8 5643.0
Sales Turnover 92 7 5 38.9
1,807.3
Excise Duty 0 1,587.05 220.25 13.9
18,349. 12,926.8 5,422.8
Net Sales 62 2 0 42
EXPENDITURE
:
12,356. 3238.6
Raw Materials 61 9,117.94 7 35.51
Power & Fuel
Cost 120.97 98.69 22.28 22.57
1,190.4
Employee Cost 2 1,018.41 172.01 16.9
Intere
st 156.85 134.12 22.73 17
3,217.5 1858.8
Gross Profit 3 1,358.71 2 136.81
Preference Dividend 0 0 0 0
Equity
Dividend % 190 100 90 90
Earnings Per Share-
Unit Curr 35.58 30.6 4.98 16.3
Earnings Per Share(Adj)-Unit
Curr
INTERPRETATION OF COMMPARATIVE
STATEMENT OF BALANCESHEET AND
PROFIT AND LOSS
1.Current Financial Position
The current asset of the company will increase by 19% as compare to
current liabilities of 8.5% . This show that the financial position of the
company is good and it has suffient amount to bear its liabilities.
The stock of the company will increase by 12.1% in 2010 as
compare to 2009 .Now the company has sufficient amount of stock to
use
2.Solvency Position-
Solvency position of the company is depend upon
their long term liabilities and fixed asset of the company.
3. Profitability Position-
The profitability position of company is depend upon the
profits of company. If profit of company is increase then position of
company is good otherwise it is not and it suffer from loses
The sales company is increase by 40% but company also show
that it is on credit basis so it not good for company
1.COMMON-SIZE STATEMENT OF
BALANCE SHEET
INTODUCTION-
A statement in which balance sheet
items are expressed as the ratio of each assets and the ratio of each
liability is expressed as a ratio of total liabilities is 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 not possible to establish standard norms for
various assets. The trends of figures from year to year may not be
studied and even they may not give proper results.
(Rs in (Rs in
Crs) Crs)
Mar
Year Mar 10 % 09 %
SOURCES OF FUNDS :
APPLICATION OF FUNDS :
5,276.2 4,893.
Gross Block 9 49.30 89 52.50
2,537.7 2326.2
Less : Accumulated Depreciation 7 23.7 9 24.98
Less:Impairment of Assets 0 0 0 0
2,738.5 2,567.
Net Block 2 25.60 60 27.60
Lease Adjustment 0 0
Capital Work in Progress 964.2 9.00 646.73 6.94
6,398.0 5,786.
Investments 2 59.80 41 62.12
Current Assets, Loans &
Advances
1,188.7 1060.6
Inventories 8 11.1 7 11.34
1,258.0 1043.6
Sundry Debtors 8 11.75 5 11.2
1,743.2 1,574.
Cash and Bank 3 16.3 43 16.9
1,852.3 1,402.
Loans and Advances 0 17.3 29 15.05
6,042.3 5,081.
Total Current Assets 9 56.4 04 54.6
Less : Current Liabilities and Provisions
3,403.4 3,520.
Current Liabilities 6 31.8 20 37.8
1,796.5 1,277.
Provisions 4 16.8 56 13.7
5,200.0 4,797.
Total Current Liabilities 0 48.6 76 51.51
Net Current Assets 842.39 7.9 283.28 3.04
Miscellaneous Expenses not written off 4.12 0.04 12.55 0.13
Deferred Tax Assets 182.17 1.7 411.65 4.42
Deferred Tax Liability 422.5 3.95 393.38 4.22
Net Deferred Tax -240.33 -2.24 18.27 0.2
10,706 9,314.
Total Assets .92 100 84 100
INTERPRETATION OF COMMONSIZE
STATEMENT OF BALANCESHEET AND
PROFIT &LOSS
1. The shareholder fund in 2010 is 73% more than in year 2009 was 56.5%
.Generally if shareholders investment are 50% of total investments even
then it is considered to be a safe financial planning . But in 2009 less
shareholder funds are relied on outsider for other funds as compare to
2010 so, the financial structure of 2010 is more safe as compare to
2009
2. The company has have followed the policy of financing fixed assets
from long term funds. In 2010 investment in fixed assets are 25.5%
while long term funds are 73% , and in 2009 are 27.6% and 56.5%.
this show that both the year have financed working capital from long
term funds also. In comparison ,2010 was more fund for working
capital because it is increasing
6. The analysis of various figure shows that the company have satisfactory
long term and short term financial position. In comparison 2010 has
better financial position than that of 2009.
TREND ANALYSIS
INTRODUCTION-
The financial statements may be
analysed by computing trends of series of information. This method
determine the direction upwards and downwards and involves the
computation of the percentage relationship that each statement item
bear to the item in base year. The information for a number of year is
taken up and one year, generally the first is taken as a base year. The
figures of base year are taken as 100 and trend ratios for other years
are calculated on the basis of base year. The analyst is able to see
the trend of figures, whether upward or downward.
TREND STATEMENT
(RS IN CR)
(RS IN CR) (RS IN CR)
YEAR MAR 10
MAR 09 MAR 08
SALES 18349.62
12926.82 11281.73
STOCK 1188.78
1060.67 1084.11
RATIO
INTRODUCTION-
Ratio analysis is a technique of analysis
and interpretation of financial statement. It is process of establishing
and interpreting various ratios for helping in making certain decisions.
However, ratio analysis is not an end in itself. It is only a mean of better
understanding of financial strengths and weaknesses of firm. Calculation
of mere ratios does not serve any purpose, unless several appropriate
ratios are analysed and interpreted. There are a number of ratios which can
be calculated from the information given in the financial statements, but the
analyst has to select the appropriate data and calculate only a few
appropriate ratios from the same keeping in mind the objective of analysis.
The ratio may be used as a symptom like blood pressure, the pulse rate or
the body temperature and their interpretation depends upon the caliber and
competence of the analyst. The following are the four steps involved in the
ratio analysis :
3. Comparison of the calculated ratios with the ratio of the same firm in
the past, or the ratios developed from projected financial statements
or the ratios of some other firm or the comparison with ratios of the
industry to which the firm belongs
RATIOS
YEAR MAR 10
MAR 09
1. LIQUIDITY RATIOS:
2. SOLVENCY RATIO:
PROPRIETORY RATIO 73
56.5
3. PROFITABILITY RATIO:
INTERPRETATION OF RATIOS
LQUIDITY RATIO
1. The current ratio of the company in 2010 is 1.08 and in 2009 is 1.05
.it shows that the company liquidity position is not very good
because their current ratio is low
2. The acid test ratio is an indication that the firm is liquid and has
ability to meet its current or liquid liabilities in time .but in this
case the company has acid test ratio is .58 in 2010 and in 2009 is
.55 it means the company is not able to meet its liabilities in
time
10. The fixed asset ratio of company is not very much increases in 2010
is 3.97 and in 2009 is 3.4 so that the company is not able to financed
the long term liabilities
This show that the higher ratio more safe the long term creditor
because even if earnings of firm fall, the firm shall be able to meets
it commitment of fixed interest charges
PROFITABILITY RATIO
13. The gross profit of company is increases in 2010 is 17.5 as
compare to 2009 is 10.51 this show that the company profit will
increases and their profitability position is also good
14. The net profit of the company is also increase in 2010 is 11.3 as
compare to 2009 is 6.3 which show that the company has enough
amount to use for future
20. In the analysis of all above ratio , it indicate that the profitability
position is good as compare to solvency position and liquidity position
FUND FLOW
STATEMENT
(Rs in Crs)
Year 10-Mar 9-Mar
Sources of funds
Application of funds
Cash loss 0 0
Decrease in networth 0 0
Decrease in loan funds 1172.61 0
Increase in gross block 699.87 1338.04
Increase in investments 611.61 1571.35
Increase in working capital 300.51 0
Dividend 549.52 278.83
Others 0.42 0.38
Total Outflow 3334.54 3188.6
2. The equity of the company is which become our source and help to
meet the liabilities of company
4.In 2009 the loan fund of company is increases but in 2010 it decreases so
it is benefit to company
2. Cash equivalent are short term, highly liquid investments that are
readily convertiable into known amount of cash and which are subject
to insignificant risk of changes in value. Cash equivalent are held for
the purpose of meeting short-term cash commitments rather than for
investment or other purposes.
3. Cash flows are inflow and outflows of cash and cash equivalent.
CLASSIFICATION OF CASH FLOWS-
Accord
ing to AS-3(revised), the cash flow statement should report cash flows
during the period classified by operating, investing and financing
activities. Thus , cash flows are classified into three main catagories:
CASH FLOW
STATEMENT
10-Mar 9-Mar
6. At the end after meeting all the transaction the company can
meet the transaction the cash will increases this indicate that company
inflow is more than outflow which is good for liquidity position of the
company
CONCLUSION
1. In above we discuss about the
introduction of the company ,
background and also discuss about
comparative and common size
statement of balance sheet
2. All these figures show the relative
position of the company
3. The ratios of the company is also
calculated which help us to know
about their liquidity position , solvency
position , profitability position
4. Fund flow statement help us to
calculating the changes in working
capital and also know about the
sources and applications of company
5. Cash flow statement help us to
about the operating activities,
investing activities, financing
activities. And also tell about the
inflows and outflows of the company.
6. The trend analysis of the sales ,
stock, profit is also prepared to know
their financial position of company