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

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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. Although it is not possible for us to name and thank them all individually, we must make special mention of some of the personalities and acknowledge our sincere indebtness to them.

The successful completion of this project rests on the shoulder of many persons who have helped us directly or indirectly. We wish to take this opportunity to express to all those, without whose help, completion of this project would have been difficult. We are indebted and thankful to all the individuals who have guided, advised, inspired and supported us in making this project a success.

Our gratitude to our honorable guide Prof. Nikunj Patel for giving us the opportunity for developing the project and his able guidance, inestimable motivation and constant encouragement throughout our project. Without his help this project would never have been realized in its entirety.

We are especially thankful to our Head Of Department Prof. Bhavin Pandya for his valuable support in providing us the facilities and his valuable guidance for the development of this project.                      

Date: 23th December ,2010                                            Rajdeep Laha  (Roll No.11)

Place: Kolkata                                                                    


Executive Summary

It is Summarize tin of all report in one or two pages so as to provide an overview of the company. it is also called synopsis or Abstract. As a partials fulfillment of the requirement for the Managerial Accounting Cource.We have completed a project report on financial Analysis of Wipro Ltd.

  • Sales Figure is increasing at a handsome rate. it is at Rs. 58400.23 Million. in 2003-04 and it is increased to Rs. 141395.8 Million. So Sales is increased 75.05% because of aggressive Selling Policy.
  • Profit after Tax is also increasing as compare to 2003-04 it is increasing 22514 Million at Rs 3408, 8747, 4388.6, 5970.4, respectivaly last four year. This is because company has increased it sales and doing good cost management
  • Net worth of the company is increased in this year because of increase in Reserve & Surplus
  • Current Ratio of Wipro limited is showing good position. It is 1.26 Times in 2003-04 then it is increased to 2.13 Times in 2007-08 this shows Company has achieved standard Ratio.
  • The returns on the investment is some what decline in current year.
  • The EPS of Share is increased Rs. 7.43 to Rs 20.62 in 2007-08 So Share holder are benefited.
  • Company’s Total Assets are increased and it trying to expand its business on the other hand debt are also increased it shows that company trying to Trading on Equity.
  • After analyzing all aspect Company’s performance is good.

CONTENT

Preface

Acknowledgement

Executive Summary

  1. INTRODUCTION

1.1 Introduction to company

        1.2 Group of companies

        1.3 History

        1.4 Company Profile

        1.5 Registered office address

        1.6 Board of director        

        1.7 Auditor

     

  1. ANALYSIS OF BALANCE SHEET

2.1 Trend analysis of Balance sheet

2.1.1 Trend analysis of fixed assets

2.1.2 Trend analysis of total current assets

2.1.3 Trend analysis of share holders equity

2.1.4 Trend analysis of total current assets

2.1.5 Share holder’s fund

2.1.6 Sources of fund

2.1.7 Investment

2.1.8 Application of funds

2.2 Horizontal analysis of Balance sheet

         2.2.1 Sources of fund 2008

         2.2.2 Application of fund 2008

         2.2.3 Sources of fund for five years

         2.2.4 Application of fund for five years

  1. ANALYSIS OF P & L ACCOUNT
  1. Trend analysis of  P & L

  3.1.1 Trend analysis of total income

                3.1.2 Profit after tax

              3.1.3 Transfer to general reserve

              3.1.4 Net sales and services

      3.2 Horizontal analysis of  P & L

              3.2.1 Comparison of PBT and Income with expenditure

  1. CASH FLOW ANALYSIS
  1. Introduction
  2. Cash flow statement
  3. Interpretation of Cash flow statement

  1. RATIO ANALYSIS
  1.  Introduction of the ratio analysis
  2.  Liquidity ratio
  1.  Current ratio
  2.  Quick ratio
  3.  Net working capital
  1.  Profitability ratio
  1. Gross profit
  2. Operating ratio
  3. Net profit ratio
  4. Return on investment
  5. Return on equity
  1.  Assets turnover ratio
  1. total asset turn over ratio        
  2. net fixed asset turn over
  3. inventory turn over ratio
  4. average age of inventories
  5. debtor turn over ratio
  1.  Finance structure ratio
  1. debt ratio
  2. debt equity
  3. interest coverage ratio
  1.  Valuation ratio
  1. earning per share
  2. divident pay out ratio
  3. P/E ratio
  4. Profit margin ratio
  1.  Du-Pont chart

  1. SCENARIO ANALYSIS
  1. business unit performance
  2. company analysis
  1. Share holding pattern
  2. Market capitalization

  1. ANNEXURES
  2. BIBLIOGRAPHY

                   

  • Introduction to company
  • Group Companies
  • History
  • Company Profile
  • Registered Office Address
  • Board of Directors
  • Auditors

  1. INTRODUCTION


  1. Introduction of company

Wipro Limited (Wipro), together with its subsidiaries and associates (collectively, the company or the group) is a leading India based provider of IT Services and Products, including Business Process Outsourcing (BPO) Services, globally. Further,Wipro has other business such as India and AsiaPac IT Services and products and Consumer Care and Lighting. Wipro is headquartered in Bangalore, India.Wipro Technologies is a global services provider delivering technology-driven business solutions that meet the strategic objectives clients. Wipro has 40+ ‘Centers of Excellence’ that create solutions around specific needs of industries. Wipro delivers unmatched business value to customers through a combination of process excellence, quality frameworks and service delivery innovation. Wipro is the World's first CMMi Level 5 certified software services company and the first outside USA to receive the IEEE Software Process Award.

      Wipro is a $3.5 billion Global company in Information Technology Services, R&D

Services, Business process outsourcing. Team wipro is 75,000 Strong from 40             nationalities and growing. Wipro is present across 29 counries,36 Development canters, Investors across 24 countries.

  • Largest third party R&D Service provider in the world.
  • Largest Indian Technology Infrastructure management service provider.
  • A vendor of choice in the middle east
  • Among the top 3 Indian BPO Service provider by Revenue (* Nasscom)
  • Among the top 2 Domestic IT Services companies in India (*IDC India)

  1.  Group Companies
  • Wipro Infrastructure Engineering Ltd.
  • Wipro Inc.
  • cMango Pte Ltd.
  • Wipro Japan KK
  • Wipro Shanghai Ltd.
  • Wipro Trademarks Holding Ltd.
  • Wipro Travel Services Ltd.
  • Wipro Cyprus Private Ltd.
  • Wipro Consumer Care Ltd.
  • Wipro Health Care Ltd.
  • Wipro Chandrika Ltd.(a)
  • Wipro Holdings (Mauritius) Ltd.
  • Wipro Australia pty Ltd.
  • WMNETSERV Ltd.(a)
  • Quantech Global Service Ltd.
  • 3D Network Pte Ltd.
  • Planet PSG Pte Ltd.
  • Spectramind Inc.

  1.  History

Wipro started in 1945 with the setting up of an oil factory in Amalner a small town in Maharashtra in Jalgaon District. The product Sunflower Vanaspati and 787 laundry soap (largely made from a bi-product of Vanaspati operations) was sold primarily in Maharashtra and MP. The company was aptly named Western India Products Limited.
The Birth of the name Wipro - As the organization grew and diversified into operations of Hydraulic Cylinders and Infotech, the name of the organization did not  adequately reflect its operations. Azim Premji himself in 1979 selected the name "Wipro" largely an acronym of Western India Products. Thus was born the Brand Wipro. The name Wipro was unique and gave the feel of an 'International" company. So much so that some dealers even sent their cheques favouring Wipro (India) Limited. Fortunately, the banks accepted them!!By the early 90s, Wipro had grown into various products and services. The Wipro product basket had soaps called Wipro Shikakai, Baby products under Wipro Baby Soft, Hydraulic Cylinders branded Wipro, PCs under the brand name Wipro, a joint venture company with GE named Wipro GE and software services branded Wipro. The Wipro logo was a 'W", but it was not consistently used in the products.It was clearly felt that the organization was not leveraging its brand name across the various businesses. The main issue remained whether a diverse organization such as Wipro could be branded under a uniform look and feel and could there be consistent communication about Wipro as an organization.

  1. Company Profile

Business-Description

Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, package implementation, software application development and maintenance, and research and development services to corporations globally.

The Group's principal activity is to offer information technology services. The services include integrated business, technology and process solutions including systems integration, package implementation, software application development and maintenance and transaction processing. These services also comprise of information technology consulting, personal computing and enterprise products, information technology infrastructure management and systems integration services. The Group also offers products related to personal care, baby care and wellness products. The operations of the Group are conducted in India, the United States of America and Other countries. During fiscal 2007, the Group acquired Wipro Cyprus Pvt Ltd, Retailbox Bv, Enabler Informatica SA, Enabler France SAS, Enabler Uk Ltd, Enabler Brazil Ltd, Enabler and Retail Consult GmbH, Cmango Inc, Cmango (India) Pvt Ltd, Saraware Oy, Quantech Global Services and Hydroauto Group AB

Global IT Services and Products

The Company's Global IT Services and Products segment provides IT services to customers in the Americas, Europe and Japan. The range of its services includes IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, technology infrastructure outsourcing, BPO services and research and development services in the areas of hardware and software design. Its service offerings in BPO services include customer interaction

services, finance and accounting services and process improvement services for 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, 2007 (fiscal 2007). Of these percentages, the IT Services and Products segment accounted for 68% of its revenue, and the BPO Services segment accounted for 6% of its revenue during fiscal 2007.

Customized IT solutions

Wipro provides its clients customized IT solutions in the areas of enterprise IT services, technology infrastructure support services, and research and development services. The Company provides a range of enterprise solutions primarily to Fortune 1000 and Global 500 companies. Its services extend from enterprise application services to e-Business solutions. Its enterprise solutions have served clients from a range of industries, including energy and utilities, finance, telecom, and media and entertainment. The enterprise solutions division accounted for 63% of its IT Services and Products revenues for the fiscal 2007.

Technology Infrastructure Service

Wipro offers technology infrastructure support services, such as help desk management, systems management and migration, network management and messaging services. The Company provides its IT Services and Products clients with around-the-clock support services. The technology infrastructure support services division accounted for 11% of Wipro's IT Services and Products revenues in fiscal 2007.

Research and Development Services

Wipro's research and development services are organized into three areas of focus: telecommunications and inter-networking, embedded systems and Internet access devices, and telecommunications and service providers.The Company provides software and hardware design, development and implementation services in areas,

such as fiber optics communication networks, wireless networks, data networks, voice switching networks and networking protocols. Wipro's software solution for embedded systems and Internet access devices is programmed into the hardware integrated circuit (IC) or application-specific integrated circuit (ASIC) to eliminate the need for running the software through an external source. The technology is particularly important to portable computers, hand-held devices, consumer electronics, computer peripherals, automotive electronics and mobile phones, as well as other machines, such as process-controlled equipment. The Company provides software application integration, network integration and maintenance services to telecommunications service providers, Internet service providers, application service providers and Internet data centers.

      Business Process Outsourcing Service

Wipro BPO's service offerings include customer interaction services, such as IT-enabled customer services, marketing services, technical support services and IT helpdesks; finance and accounting services, such as accounts payable and accounts receivable processing, and process improvement services for repetitive processes, such as claims processing, mortgage processing and document management. For BPO projects, the Company has a defined framework to manage the complete BPO process migration and transition. The Company competes with Accenture, EDS, IBM Global Services, Cognizant, Infosys, Satyam and Tata Consultancy Services.India and AsiaPac IT Services and Products

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The Company's India and AsiaPac IT Services and Products business segment, which is referred to as Wipro Infotech, is focused on the Indian, Asia-Pacific and Middle-East markets, and provides enterprise clients with IT solutions. The India and AsiaPac IT Services and Products segment accounted for 16% of Wipro's revenue in fiscal 2007. The Company's suite of services and products consists of technology products; technology integration, IT management and infrastructure outsourcing services; custom application development, application integration, package implementation and maintenance, and consulting

     

      Wipro's system integration services 

 Include integration of computing platforms, networks, ...

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