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Financial analysis of Wipro ltd. The ratio analysis of the company has been derived for 23 ratios which help to determine the companys performance. In the Scenario Analysis of the company we have included the companys industrial GDP, its Market Shar

Extracts from this document...

Introduction

A Project Report On Financial Analysis Of Presented to Prof. Kumar Mitra Dutta Faculty Member Calcutta Business School On December 23rd , 2010 In the partial fulfillment of the requirements for Management Accounting Course in the PGDM 2010-12 By: Rajdeep Laha (Roll No.11) Preface As a part of our syllabus of MBA programme in Semester-I, we are assigned some practical and theoretical project work. In partial fulfillment of the Managerial Accounting-I, course we have prepared a comprehensive project report in Financial Analysis of the company. Study of management will be immaterial if it is not coupled with study of financial aspect of the business. It gives the student an opportunity to learn the connection between comparison & execution to test & verify application of theories & help in the comparison of management theories and practice. The study gives a chance to know about the profitability and financial position of the firm. We have chosen Wipro Limited which is a $3.5 Billion Global company in Information Technology Services ,R&D Services, Business Process Outsourcing. This report contains the analysis of the 5 years data of the company. The Financial statements of the report are analyzed in three different ways such as * Trend Analysis * Horizontal Analysis * Ratio Analysis * Cashflow Analysis The ratio analysis of the company has been derived for 23 ratios which help to determine the company's performance. In the Scenario Analysis of the company we have included the company's industrial GDP, its Market Share, Market Capitalization, Market Growth etc. Date: 23th December ,2010 Rajdeep Laha (RollNo.11) Place: Kolkata Acknowledgement With a sense of gratitude and respect, we would like to extend our heartiest thanks to all of those who provided help and guidance to make this project a big success. No Project is ever the outcome of single individual's talent or effort. This work is no exception. This project would not have been possible without the whole hearted encouragement, support and co-operation of our guide, friends and well-wishers. ...read more.

Middle

Hear we assume that the total income is 100 then what is the of particular compare to total income. Horizontal analysis of Profit & Loss Account deals with the amount changes and the percentage changes of the items of the Profit & Loss Account in every year individually. Year 2003-04 2004-05 2005-06 2006-07 2007-08 Income Gross Sales and Services 99.07% 99.73% 99.29% 98.94% 98.77% Less: Excise Duty 1.27% 0.88% 0.72% 0.88% 0.81% Net Sales and Services 97.80% 98.86% 98.57% 98.06% 97.95% Other Income 2.20% 1.14% 1.43% 1.94% 2.05% Total Income 100.00% 100.00% 100.00% 100.00% 100.00% Expenditure Cost of Sales and Services 65.56% 65.51% 85.32% 66.97% 68.75% Selling and marketing expenses 9.05% 6.83% 6.51% 6.24% 6.97% General and administrative expenses 5.19% 0.07% 0.03% 0.08% 5.27% Interest 0.06% 4.64% 4.89% 5.14% 0.83% Total Expenditure 79.85% 77.05% 77.89% 78.43% 81.83% PROFIT BEFORE TAXATION 20.15% 22.95% 22.11% 21.57% 18.17% Provision for taxation including FBT 2.81% 3.33% 3.15% 2.53% 2.23% PROFIT BEFORE MINORITY INTEREST /SHARE IN EARNING OF ASSOCIATES 17.33% 19.62% 18.95% 19.04% 15.94% Minority interest -0.10% 0.11% 0.00% 0.00% -0.01% Share in earning of Associates 0.04% 0.21% 0.27% 0.19% 0.16% PROFIT FOR THE PERIOD 17.27% 19.73% 19.22% 19.24% 16.10% Appropriations Interim dividend 9.74% 4.73% 1.43% Proposed dividend 1.56% 4.21% 6.63% 0.95% 2.87% Tax on dividend 1.45% 0.60% 0.93% 0.83% 0.73% TRANSFERTO GENERAL RESERVE 4.52% 14.92% 11.66% 12.72% 11.07% Table 3.2.1 Horizontal Analysis of Profit & Loss Account 3.2.1 Comparition of PBT and Expenduture with total income Year 2003-04 2004-05 2005-06 2006-07 2007-08 Total Income 100.00% 100.00% 100.00% 100.00% 100.00% Total Expenditure 79.85% 77.05% 77.89% 78.43% 81.83% PROFIT BEFORE TAXATION 20.15% 22.95% 22.11% 21.57% 18.17% Table 3.2.2 Comparition of PBT and Expenduture with total income Figure 3.1.1 Comparition of PBT and Expenduture with total income Interpretation * The total expenditure is near by 80% of total income in every year. * Every year PBT is near by 20% of total income. ...read more.

Conclusion

exchange Net -595 457 65 92.45 -132.77 Interest on borrowings 1690 125 35 56.12 Dividend/interest - Net -2802 -2,118 -1,069 715.15 -762.41 (Profit)/Loss on sale of investments -771 -588 -238 35.59 Gain on sale of fixed assets -174 -10 -8 109.8 -107 Working Capital Changes : Trade and other receivable -11885 -7,633 -6,991 4,433.69 -3670.41 Loans and advances -5157 -299 -1,033 311.74 -359.89 Inventories -1565 -1,120 -317 455.23 -281.5 Trade and other payables 6182 5,445 6,150 4,180.42 2748.13 Net cash generated from operations 28518 32,303 24,102 20,456.00 -594 Direct taxes paid -5459 -4,252 -4,543 2,354.70 -1568.36 Net cash generated by operating activities 23059 28,051 19,559 18,101.30 -2162.36 B. Cash flows from investing activities: Acquisition of property, fixed assets Plant and equipment(Inc. advances) -14226 -13,005 -7927 6,465.43 -4100.97 Proceeds from sale of fixed assets 479 149 113 168.98 121.86 Purchase of investments -231684 -123,579 -59,047 70,145.11 -10706.51 Proceeds on sale/from maturities on Investments 250013 122042 52,043 66,383.54 48.06 Inter-corporate depo sit 150 -650 - 285.3 Net payment for acquisition of Business -32790 -6608 -2,777 617.99 -465.27 Dividend/interest income received 2490 2,118 923 254.15 777.85 Net cash generated by/(used in) Investing -25568 -19533 -16672 144035.2 -14039.68 C. Cash flows from financing activities: Proceeds from exercise of Employee Stock Option 541 9,458 4,704 2,576.58 238.6 Share application money pending allotment 40 35 63 12.05 Interest paid on borrowings -1690 -125 -35 56.12 Dividends paid (including distribution tax -12632 -8,875 -3,998 7,575.76 -262.36 Proceeds/(repayment) of long term -74970 142 -268 - 463.02 Proceeds/(repayment) of short term 110641 1825 -200 432.43 Proceeds from issuance of shares by Subsidery 55 35 266.19 147.53 Net cash generated by financing Activities 21985 2495 266 -5209 -12954.48 Net increase in cash and cash equivalents During the period 19476 11013 3154 2469.95 -958.77 Cash and cash equivalents at the Beginning of the period 19822 8858 5714 3242.7 4210.08 Effect of translation of cash balance -28 -49 -10 0.92 -8.61 Cash and cash equivalents at the end of Period * 39270 19822 8858 5713.57 3242. ...read more.

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