CHAPTER I

1.1 INTRODUCTION
ACCOUNTING STANDARD-1
Accounting is the art of recording transactions in the best manner possible, so as to
enable the reader to arrive at judgments/come to conclusions, and in this regard it is
utmost necessary that there are set guidelines. These guidelines are generally called
accounting policies. The intricacies of accounting policies permitted Companies to alter
their accounting principles for their benefit. This made it impossible to make
comparisons. In order to avoid the above and to have a harmonised accounting principle,
Standards needed to be set by recognised accounting bodies.
This paved the way for Accounting Standards to come into existence. Accounting
Standards in India are issued By the Institute of Chartered Accountants of India (ICAI).
At present there are 30 Accounting Standards issued by ICAI.
1.2 OBJECTIVE OF ACCOUNTING STANDARDS
Objective of Accounting Standards is to standardize the diverse accounting policies and
practices with a view to eliminate to the extent possible the non-comparability of
financial statements and the reliability to the financial statements.
Accounting Standards are formulated with a view to harmonise different accounting
policies and practices in use in a country. The objective of Accounting Standards is,
therefore, to reduce the accounting alternatives in the preparation of financial statements
within the bounds of rationality, thereby ensuring comparability of financial statements of
different enterprises with a view to provide meaningful information to various users of
financial statements to enable them to make informed economic decisions.
The Companies Act, 1956, as well as many other statutes in India require that the
financial statements of an enterprise should give a true and fair view of its financial
position and working results. This requirement is implicit even in the absence of a
specific statutory provision to this effect. The Accounting Standards are issued with a
view to describe the accounting principles and the methods of applying these principles
in the preparation and presentation of financial statements so that they give a true and fair
view. The Accounting Standards not only prescribe appropriate accounting treatment of

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complex business transactions but also foster greater transparency and market discipline.
Accounting Standards also helps the regulatory agencies in benchmarking the accounting
accuracy.
1.3 NATURE OF ACCOUNTING POLICIES
1. The accounting policies refer to the specific accounting principles and the methods of
applying those principles adopted by the enterprise in the preparation and presentation of
financial statements.
2. There is no single list of accounting policies which are applicable to all circumstances.
The differing circumstances in which enterprises operate in a situation of diverse and
complex economic activity make alternative accounting principles and methods of
applying those principles acceptable. The choice of the appropriate accounting principles
and the methods of applying those principles in the specific circumstances of each
enterprise calls for considerable judgement by the management of the enterprise.
3. The various statements of the Institute of Chartered Accountants of India combined
with the efforts of government and other regulatory agencies and progressive
managements have reduced in recent years the number of acceptable alternatives
particularly in the case of corporate enterprises. While continuing efforts in this regard in
future are likely to reduce the number still further, the availability of alternative
accounting principles and methods of applying those principles is not likely to be
eliminated altogether in view of the differing circumstances faced by the enterprises.
1.4 ACCOUNTING STANDARDS-SETTING IN INDIA
The institute of Chartered Accountants of India, recognizing the need to harmonize the
diverse accounting policies and practices, constituted at Accounting Standard Board
(ASB) on 21st April, 1977.
The Institute of Chartered Accountants of India (ICAI) being a member body of the
IASC, constituted the Accounting Standards Board (ASB) on 21st April, 1977, with a
view to harmonise the diverse accounting policies and practices in use in India. After the
avowed adoption of liberalization and globalisation as the corner stones of Indian
economic policies in early ‘90s, and the growing concern about the need of effective
corporate governance of late, the Accounting Standards have increasingly assumed

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importance. While formulating accounting standards, the ASB takes into consideration
the applicable laws, customs, usages and business environment prevailing in the country.
The ASB also gives due consideration to International Financial Reporting Standards
(IFRSs)/ International Accounting Standards (IASs) issued by IASB and tries to integrate
them, to the extent possible, in the light of conditions and practices prevailing in India.
1.5 AS- 6: DEPRECIATION
THE SCOPE AND OBJECTIVE OF AS-6 & DEPRECIABLE ASSETS
Depreciation is a measure of the wearing out, consumption or other loss of value of a
depreciable asset arising from use, efflux of time or obsolescence through technology and
market changes. Depreciation includes amortization of assets whose useful life is pre-
determined. Different accounting policies for depreciation are adopted by different
enterprises. Disclosure of accounting policies for depreciation followed by enterprise is
necessary to appreciate the view presented in the financial statements of the enterprise.
Depreciation has a significant in determining and presenting the financial position and
result of operation of an enterprise. Depreciable assets are assets which
 Are Expected To Be Used More Than One Accounting Period
 Have a limited useful life, and
 Are held by an enterprise for use in the production or supply of goods and
services for rental and others, or for administrative purpose and not for the
purpose of sale in the ordinary course of business. To qualify as a depreciable
asset all there conditions are required to be fulfilled. Even if a single condition is
not fulfilled the same will not qualify as a depreciable asset. For e.g. though land
will fulfill two of the above conditions, it does not fulfill the condition of a limited
useful life and therefore is not a depreciable asset AS-6 deals with depreciable
accounting and applies to all depreciable assets except the following items to
which special consideration apply:
 Forest plantation and similar regenerative natural resources
 Wasting asset including expenditure on the exploration for an extraction of
minerals, oil, natural gases and similar non-regenerative resources.
 Expenditure on research and development

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  Goodwill
 Livestock
As already stated AS-6 does not apply to Land unless it has a limited useful life for the
Enterprise. Land and Buildings are separable assets and are dealt with separately for
accounting purposes, even when they are acquired together. Land normally has an
unlimited life and therefore is not depreciated. Building has a limited life and therefore is
depreciable asset. An increase in the value of land on which the building stands does not
affect the determination of the useful life of the building.
1.7 AS-10: ACCOUNTING FOR FIXED ASSETS

OBJECTIVE AND SCOPE OF AS-10

Fixed Assets often comprise a significant portion of the total assets of an enterprise, and
therefore are important in the presentation of financial position. Furthermore, the
determination of whether expenditure represents an assets or an expense can have a
material effect on an enterprise’s reported results of operations. This standard is
mandatory in nature. The provisions relating to borrowing costs, intangible assets and
leases that were originally contained in this standard were withdrawn once new
accounting standards were developed in these areas. This statement does not deal with
accounting for the following items to which special consideration apply;
 Forests, plantations and similar regenerative natural resources;
 Wasting assets including mineral rights, expenditure on exploration for and
extraction of minerals, oil, natural gas and similar non-regenerative resources;
 Expenditure on real estate development; and
 Livestock
Expenditure on individual items of fixed assets used to develop or maintain the activities
covered in (i) to (iv) above, but separable from those activities, are to be accounted for in
accordance with this statement.
WHAT ARE FIXED ASSETS?

Fixed asset is an asset held with the intention of being used for the purpose of producing
or providing goods or services and is not held for sale in the normal course of business.

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This statement deals with accounting for fixed assets such as land, buildings, plant and
machinery, vehicles, furniture and fittings, goodwill, patens, trademarks and designs.
This statement however does not deal with specialised aspects of accounting for fixed
assets that arise under a comprehensive system reflecting the effects of changing prices
but applies to financial statements prepared on historical cost bases. It may be appropriate
to aggregate individually insignificant items, such as moulds, tools and dies, and to apply
the criteria to the aggregate value.
1.6 AS-12 : GOVERNMENT GRANTS
Accounting for Government Grants
 Capital Approach versus Income Approach
 Recognition of Government Grants
 Non-monetary Government Grants
 Presentation of Grants Related to Specific Fixed Assets
 Presentation of Grants Related to Revenue
 Presentation of Grants of the nature of Promoters’ contribution
 Refund of Government Grants
 Disclosure
Statements of Accounting Standards
The following is the text of the Accounting Standard (AS) 12 issued by the Council of the
Institute of Chartered Accountants of India on ‘Accounting for Government Grants’.
The Standard comes into effect in respect of accounting periods commencing on or after
1.4.1992 and will be recommendatory in nature for an initial period of two years.
Accordingly, the Guidance Note on ‘Accounting for Capital Based Grants’ issued by the
Institute in 1981 shall stand with drawn from this date. This Standard will become
mandatory in respect of accounts for periods commencing on or after 1.4.1994.2
1.7 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

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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&DServices, 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)
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.

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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.
1.8 SERVICES OFFERED BY WIPRO LTD. IT services
 Application Development & Maintenance
 Architecture Consulting
 Business-t0-employee(B2E) solution
 Business intelligence &data warehousing
 Business Process Management (BPM)
 Content Management
 Customer relationship management (CRM)
 E-Business
 Enterprise resource planning (ERP)
 E-procurement & b2b Marketplaces
 Enterprise security
 Package selection and implementation
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  System integration
 Supply chain management
 Enterprise application integration
 Technology infrastructure services
1.9 MEANING OF FINANCIAL STATEMENT:-
Financial statement refers to such statement which contains financial
information about an enterprise. It gives report of profitability and the
financial position of the business at the end of accounting period. The
term financial statement includes at least two statements which the
accountant prepares at the end of an accounting period.
The two statements are:-
a) Balance Sheet
b) Profit and Loss Account

They provide some extremely useful information to the extent that

balance sheet mirror the financial position on a particular date in
terms of the structure of assets, liabilities and owners equity and the
profit and loss account shows the results of operations during a certain
period of time in terms of the revenues obtained and the cost incurred
during the year. Thus the financial statement provides a summarized
view of financial positions and operations of a firm.
1.10 MEANING OF FINANCIAL ANALYSIS:-
The term financial analysis is also known as “Analysis and
interpretation of financial statement”.It refers to the process of
determining financial strength and weakness of the firm by
establishing strategic relationship between the items of the balance
sheet, profit and loss account and other operative data.The first task of

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financial analysis is to select the information relevant to the decision
under consideration to the total information contained in the financial
statement.
The second step is to arrange the information in a way to highlight
significant relationship.The final step is interpretation and drawing of
inference and conclusion. Financial statement is the process of
selection, relation and evaluation.
1.11 FEATURES OF FINANCIAL ANALYSIS
The main Features of Financial Analysisare the following:-
To present a complex data contained in the financial statement in
simple andunderstandable form.
To classify the items contained in the financial statement in
convenient andrational groups.
To make comparison between various groups to draw various
conclusions.
PURPOSE OF FINANCIAL ANALYSIS
The main purposes of financial analysis are the following:-
 To know the earning capacity or profitability.
 To know the solvency.
 To know the financial strengths.
 To know the capability of payment of interest &
dividends.
 To make comparative study with other firms.
 To know the trend of business.
 To know the efficiency of mgt.
 To provide useful information to mgt.
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1.12 PROCEDURE OF FINANCIAL STATEMENT ANALYSIS
The following procedure is adopted for the analysis and interpretation
of financial statements:-The analyst should acquaint himself with
principles and postulated of accounting.He should know the plans and
policies of the management so that he may be ableto find out whether
these plans are properly executed or not.
The extent of analysis should be determined so that the sphere of work
may bedecided. If the aim is find out. Earning capacity of the
enterprise then analysis of income statement will be undertaken. On
the other hand, if financial position is to be studied then balance sheet
analysis will be necessary.
The financial data be given in statement should be recognized and
rearranged. Itwill involve the grouping similar data under same heads.
TOOLS OF FINANCIAL ANALYSIS
The tools and techniques of financial analysis are following:-
(a) Horizontal and vertical analysis
(b) Ratio analysis
(a) Horizontal and vertical analysis:-

 Horizontal Analysis or Trend Analysis:

Comparison of two or more year’s financial data is known as
horizontal analysis, or trend analysis. Horizontal analysis is facilitated
by showing changes between years in both Rupees/Dollars and
percentage form. Graphical Representation of Horizontal and Trend
Analysis:
RATIO ANALYSIS
It refers to the systematic use of ratios to interpret the financial statements
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in terms of the operating performance and financial position of a firm. It
involves comparison for a meaningful interpretation of the financial
statements.
TYPE OF RATIO ANALYSIS:-
In view of the needs of various uses of ratios the ratios, which can be
calculated from the accounting data are classified into the following broad
categories:-
a) Liquidity Ratio
b) Turnover Ratio
c) Solvency or Leverage ratios
d) Profitability ratios
LIQUIDITY RATIO:-
It measures the ability of the firm to meet its short-term obligations that is
capacity of the firm to pay its current liabilities as and when they fall due.
Thus these ratios reflect the short-term financial solvency of a firm. A firm
should ensure that it does not suffer from lack of liquidity. The failure to
meet obligations on due time may result in bad credit image, loss of
creditors confidence, and even in legal proceedings against the firm on the
other hand very high degree of liquidity is also not desirable since it would
imply that funds are idle and earn nothing. So therefore it is necessary to
strike a proper balance between liquidity and lack of liquidity.The various
ratios that explains about the liquidity of the firm are:-
1. Current Ratio
Current Ratio =Current Asset
Current Liabilities
2. Acid Test Ratio / quick ratio
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Acid Test Ratio = Quick Assets
Current liabilities
3. Absolute liquid ration / cash ratio

Absolute liquid ratio= Absolute liquid assets

Current liabilities
Turnover ratios:-
Turnover ratios are also known as activity ratios or efficiency ratios
with which a firm manages its current assets. The following turnover
ratios can be calculated to judge the effectiveness of asset use.
1. Inventory Turnover Ratio
Inventory Turnover Ratio = Cost of goods sold
Average Inventory
2. Debtor Turnover Ratio
Debtor Turnover Ratio = Net Credit Sales
Average Trade Debtors
3. Creditor Turnover Ratio
Creditor Turnover Ratio = Net Credit Purchases
Average Trade Credito
4. Assets Turnover Ratio
a) Total asset turnover
Total asset turnover = Total Sales
Total Assets
b) Net asset turnover
Net asset turnover = Total Sales
Net Assets
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 c) Fixed asset turnover
Fixed asset turnover = Total Sales
Net Fixed Assets
d) Current asset turnover
Current asset turnover = Total Sales
Current Assets
e) Net working capital turnover ratio
Net working capital turnover ratio = Total Sales
A. SOLVENCY OR LRVERAGE RATIOS
The solvency or leverage ratios throws light on the long term solvency
of a firm reflecting it’s ability to assure the long term creditors with
regard to periodic payment of interest during the period and loan
repayment of principal on maturity or in predetermined installments at
due dates. There are thus two aspects of the long-term solvency of a
firm.
a. Ability to repay the principal amount when due
b. Regular payment of the interest.
The ratio is based on the relationship between borrowed funds and
owner’s capital it is computed from the balance sheet, the second type
are calculated from the profit and loss a/c. The various solvency
ratios are:-
1. Debt equity ratio
Debt equity ratio = Outsider Funds (Total Debts)
Shareholder Funds or Equity
2. Debt to total capital ratio
Debt to total capital ratio = Total Debts
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 Total Assets
3. Proprietary (Equity) ratio
Proprietary (equity) ratio = Shareholder funds
Total assets
4. Fixed assets to net worth ratio
Fixed assets to net worth ratio = Fixed Assets X 100
Net Worth
5. Fixed assets to long term funds ratio
Fixed assets to long term funds ratio= Fixed Assets X 100
Long-term Funds
6. Debt service (Interest coverage) ratio
Debt Service Ratio=Earnings before interest and tax (EBIT)
Interest Charges
B. PROFITABILITY RATIOS
The profitability ratio of the firm can be measured by calculating
various profitability ratios. General two groups of profitability ratios
are calculated.
a. Profitability in relation to sales.
b. Profitability in relation to investments.
a. Profitability in relation to sales:-
1. Gross profit margin or ratio
Gross profit margin or ratio = Gross profit X 100
Net sales
2. Net profit margin or ratio
Net profit margin or ratio = Earnings after tax X 100
Net Sales
3. Operating profit margin or ratio
Operating profit = Operating Profit X 100
Margin or ratio Net sales
4. Operating Ratio
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 Operating ratio = Operating expenses X 100
Net sales
5. Expenses Ratio
Cost of goods sold = Cost of goods sold X 100
Net Sales
Administrative = Administrative Expenses X 100
Expenses Ratio Net sales
Selling and distribution
Expenses ratio = Selling and distribution expenses X 100
Net sales
b. Profitability in relation to investments:-
1. Return on gross capital employed
Return on gross =Earnings After Tax (EAT) X 100
Capital employed Gross capital employed
2. Return on net capital employed
Return on = Earnings Before Interest & Tax (EBIT) X 100
Net capital Net capital employed
Employed
3. Return on shareholder’s capital employed.
Return on = Earnings after tax (EAT) X 100
Share capital Shareholder capital employed
Employed
4. Return on equity shareholder capital employed.
Return on = Earnings after tax (EAT),
Equity share preferencedividends X 100
Capital employed Equity share capital employed
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 5. EARNINGS PER SHARE

Earnings =Earnings after tax – Preferred dividends (if any)

Per share Equity shares outstanding
6. DIVIDEND PER SHARE

Dividend = Earnings paid to the ordinary shareholders

Per share Number of ordinary shares outstanding
7. DIVIDENDS PAY OUT RATIO (PAY OUT RATIO)

Dividend pay =Total dividend paid to equity share holders

Out ratio Total earnings available to
Equity share holders
Or
=Dividend per share
Earnings per share
8. DIVIDEND AND EARNINGS YIELD

Dividend Yield = Dividend Per share

Market value of ordinary share
Earnings yield = Earnings per share
Market value of ordinary share
9. PRICE EARNING RATIO

Price earnings (P/E) ratio = Market price of share

Earnings per share

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 CHAPTER II
RESARCH METHODOLOGY

2.1 Objectives of the financial analysis

Analysis of financial statements may be made for a particular purpose in view:

 To find out the financial stability and soundness of the business enterprise.

 To assess and evaluate the earning capacity of the business

 To estimate and evaluate the fixed assets, stock etc., of the concern.

 To estimate and determine the possibilities of future growth of business.

 To assess and evaluate the firm’s capacity and ability to repay short and long term
loans.
2.2 RESEARCH METHODOLOGY:-
This project is prepared by using secondary data obtained from various websites. During
my project , I collected data through various sources secondary
2.3 Data Collection

Secondary data includes :

Secondary data means data that are already available i.e. they refer to the data which have
already been collected and analyzed by someone else. Usually published data are
available in various publication of company in the official site .in this project secondary
data has been collected as follows:

 Company Annual Report

 Books

 Internet source

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 2.4 LIMITATIONS OF STUDY

• The study was limited to only FIVE years Financial Data.

•The study is purely based on secondary data which were taken primarily
from Published annual reports of WIPRO.

•The ratio is calculated from past financial statements and these are not indicators of
future.

•The study is based on only on the past records.

• Non availability of required data to analysis the performance.
•The short span of the time provided also one of limitations.
Fundamental analysis has some limitation involved in it. This limitation can be
explained as under:
 Time Constrain:

Fundamental analysis may offer excellent insights, but it can be extraordinarily time-
consuming. Time-consuming models often produce valuations that are contradictory to the
current price prevailing on the exchange.
 Company Specific:

Valuation techniques vary depending on the industry group and specifics of each
company. For this reason, a different technique and model is required for different
industries and different companies. This can be quite time-consuming process, which can
limit the amount of research that can be performed. The sales and inventory ratio may be
very important for the cement sector company but these ratios are not very useful for the IT
sector.
 Inadequacies of Data:

While making analysis one has to often wrestle with inadequate data. While deliberate
falsification of data may be rare, subtle misrepresentation and concealment are common.
 Future Uncertainties:

Future changes are largely unpredictable; more so when the economic and business
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environment is buffeted by frequent winds of change. In an environment characterized by
discontinuities, the past record is a poor guide to future performance.
 Irrational Market Behavior:

The market itself presents a major obstacle while making analysis on account of neglect
or prejudice, undervaluation may persist for extended periods; likewise, overvaluations
arising from unsatisfied optimism and misplaced enthusiasm may endure for unreasonable
lengths of time.
2.5 SCOPE OF THE STUDY:
The study basically makes fundamental analysis of WIPRO and contains economic,
company and industry analysis in IT sector and tries to identify the intrinsic value of the
company by using the published financial details of the company. The study is restricted
to one particular company in the sector. The study also includes testing the intrinsic value
of the company.

2.6 METHODOLOGY OF STUDY:

TITLE OF STUDY

The research has been based on secondary data analysis. The study has been exploratory
as it aims at examining the secondary data for analyzing the previous researches that have
been done in the area of technical and fundamental analysis of stocks. The knowledge
thus gained from this preliminary study forms the basis for the further detailed
Descriptive research. In the exploratory study, the various technical indicators that are
important for analyzing stock were actually identified and important ones short listed.

SAMPLE DESIGN

The sample of the stocks for the purpose of collecting secondary data has been selected
on the basis of Random Sampling. The stocks are chosen in an unbiased manner and
each stock is chosen independent of the other stocks chosen.
SAMPLE SIZE
The sample size for the number of stocks is taken as 10 for technical analysis and
4 for fundamental analysis of stocks as fundamental analysis is very exhaustive
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and requires detailed study.
CHAPTER III

REVIEW OF LITERATURE

3.1 Review of Literature

 A study was conducted by Raman (1995) examined the importance of equity

research. While making a decision related to investment in shares, one should
do fundamental analysis and equity research. To support this statement he also
focused on margin of safety i.e. investor should focus on the value with a
margin of safety in relation to the price. The gap between price and value is
known as margin of safety, hence he opined the investors that if investor needs
good and positive returns, they should also consider margin of safety. In his
study he also revealed that there is absence of qualitative communication,
unchecked price rigging and free flow of information which makes the Indian
stock market inefficient. Therefore, he concluded that only quality equity
research can improve the investment returns in the Indian stock market.

 Saji T.G. et al.’s (2013)5 the Global Financial Crisis and Performance of the
Indian Corporate sector: A firm level analysis‟ involves the impact of financial
crisis on some selected corporate sectors e.g. Banking, Reality and
Infrastructure Sector, Automobile, FMCG, Pharmaceuticals & Information
Technology. The selected four large groups of companies were Infosys, Wipro,
TCS and Tech Mahindra .This study includes financial performances like sales
growth, earning growth, profit margin, return on equity, solvency ratio, earning
per share, dividend yield and net worth of return from the period of 2006-07
to 2008-09 The study was mainly based on pre and post crisis of the six sectors
that were analyzed on the basis of secondary data collection. The results of the
study showed that the growth of banking sector during the period of crisis was
up securing all financial performances whereas, in this study of IT sector, the
sales and earning profile were considerably improved in the study period.
Wherein, Automobile companies in India slightly showed a steep decline in
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 their earnings. FMCG (Fast moving consumer goods) were seemed to be not
much affected by crisis while the pharmaceutical selected companies‟ growth
showed negative trends in case of EPS, Dividend yield, return on net worth and
came to the conclusion that the degree of global crisis did not shock the same
of the Indian corporate sector. Some sectors were hit by global crisis and some
remained unaffected.
 Verma, Shweta (2012)12 discussed how the market of domestic IT services
declined due to certain factors like uncertain market conditions, continuous
global economic recession and a weakened investment climate in the country
and how this down turn came up with different opportunities to the domestic IT
services to expand in the market. The core of the IT services used to cater
various verticals like telecom, IT/ITeS, manufacturing, and BFSI. But after
economic slowdown, service providers ventured in to other sectors such as
retail, education, healthcare and energy & utilities. On the other sides new
areas like IT infrastructure management, IT outsourcing, and cloud based
services seemed more profitable in terms of growth so, the sector needs to part
with its traditional networking and co-location services. It was also the time
when small and medium businesses looked forward for IT services for their
better integration and the industry saw a number of smaller deals coming from
the SMBs segment. Therefore, unlike the previous years the market had a
call from small medium businesses rather than larger contracts of multi
million of multi years. In case of Tier I players, such as IBM, Wipro, TCS, and
HCL kept on dominating in the market contributing about 40% to the total
market share with their developmental strategies like Wipro begged some large
projects from government for three different states . Wipro InfoTech company
therefore revenue were affected by above mention government to slow decision
making and delay in projects. Only TCS (giant) has promote healthy growth in
2011 for cloud based plant launched for small and medium business. HCL Info
system and IBM‟s growth was stalled by market slowdown. IT is a good time
to re-look new strategies for IT service providers to change as changing these

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 market dynamics. Some new areas of IT sector are infrastructure services,
cloud, mobility and business analytics.
 Dhawan (1999) presents the preview of the concept of Knowledge Corporation
and how half a dozen pioneering CEOs in India are already building them.
Discussing “Knowledge Corporation” as a company where knowledge of every
individual is systematically transferred to a common pool for the benefit of
entire organization, she cites Anderson consulting undoubtedly as one of the
largest knowledge corporations in the world. Over the past two decades
Anderson Consulting has overhauled their loose networking to create a formal
structure for flow of knowledge within the organization. Its knowledge
exchange seeks to capture, store and spread the learning generated internally
and externally by its 3300 consultants across 47 countries. The article further
makes indicative reference to tasks of building a knowledge corporation
initiated by Indian Organizations such as Wipro Infotech, Sun Pharmaceuticals,
Informix, Aptech, Arvind Mills, Hughes Software Systems, Armtrex
Appliances etc.

22 | P a g e
 CHAPTER IV
4.1 RATIO ANALYSIS
  Mar ' 17 Mar ' 18 Mar ' 19 Mar ' 20 Mar ' 21
 Capital  0.00  11.57  11.08s  12.66  11.21
Adequacy
Ratio 
 EARNINGS          
RATIOS 
 Income from  0.00  49.48  42.51  42.56  36.28
Fund Advances
as a % of Op
Income 
 Operating    14.81  16.10  14.73  22.59
Income as a %
of Working
Funds 
 Fund based  100.00  85.58  86.07  85.28  91.28
income as a %
of Op Income 
 Fee based  0.00  14.41  13.92  14.71  8.71
income as a %
of Op Income 
 PROFITABLI          
TY RATIOS 
 Yield on Fund    7.32  6.84  6.27  8.19
Advances 
 Break-Even    8.11  8.11  7.64  10.90
Yield Ratio 
 Cost of Funds  4.73  4.67  4.23  3.56  4.75
Ratio 

23 | P a g e
  Net Profit  12.17  12.01  13.47  14.33  13.14
Margin 
 Adjusted  12.21  19.50  16.94  13.54  24.01
Return On Net
Worth 
 Reported  12.21  19.42  16.88  13.89  24.49
Return On Net
Worth 
 BORROWIN          
G RATIOS 
 Borrowings  0.00  0.00  0.00  0.00  0.00
from RBI as %
to Total
Borrowings 
 Borrowings  0.00  11.54  32.37  9.55  18.61
from other
banks as a % to
Total
Borrowings 
 Borrowings  100.00  23.17  45.64  63.42  57.36
from others as
a % to Total
Borrowings 
 Borrowings  100.00  34.71  78.02  72.98  75.97
within India as
a % to Total
Borrowings 
 Borrowings  0.00  65.28  21.97  27.01  24.02
from outside
India as a % to

24 | P a g e
 Total
Borrowings 
 DEPOSIT          
RATIOS 
 Demand  100.00  19.22  19.86  22.56  25.74
Deposit of
Total Deposits 
 Saving  0.00  20.62  20.10  15.42  12.33
Deposit of
Total Deposits 
 Time Deposit  0.00  60.14  60.02  62.01  61.92
of Total
Deposits 
 Deposits    99.63  100.00  100.00  100.00
within India as
% to Total
Deposits 
 Deposits    0.36  0.00  0.00  0.00
Outside India
as % to Total
Deposits 
 PER          
BRANCH
RATIOS 
 Operating    9.74  7.99  6.78  8.39
Income Per
Branch 
 Operating    2.13  2.11  1.82  1.96
Profit Per
Branch 

25 | P a g e
  Net Profit Per    1.18  1.08  0.96  1.08
Branch 
 Personnel    0.68  0.53  0.52  0.48
Expenses Per
Branch 
 Administrative    1.54  1.28  0.89  1.86
Expenses Per
Branch 
 Financial    5.34  4.02  3.52  4.05
Expenses Per
Branch 
 Borrowings    9.26  5.96  5.25  2.09
Per Branch 
 Deposits Per    104.79  89.14  93.55  83.15
Branch 
 PER          
EMPLOYEE
RATIOS  
 (Rs. in Units)           
 Operating    5,472,542  5,485,206.7  4,829,294.0  6,137,279.6
Income Per .38 8 6 6
Employee 
 Operating    1,195,476  1,451,095.0  1,293,245.9  1,430,794.8
Profit Per .65 7 6 9
Employee 
 Net Profit Per    663,264.9  742,839.77  685,089.48  791,634.17
Employee  3
 Personnel    382,110.3  366,552.42  371,465.66  351,755.15
Expenses Per 2
Employee  

26 | P a g e
  Deposits Per    58,903,40  61,213,995.  66,607,855.  60,788,809.
Employee  7.92 57 70 11
 Fund    36,950,38  34,051,931.  32,772,362.  27,162,590.
Advances Per 3.97 02 74 66
Employee 

4.2 BALANCE SHEET OF WIPRO

Balance Sheet ------------------- in Rs. Cr. -------------------

  Mar '21 Mar '20 Mar '19 Mar '18 Mar '17

  12 months 12 months 12 months 12 months 12 months

Capital and Liabilities:
Total Share 339.18 316.81 315.30 315.30 315.30
Capital
Equity Share 339.18 316.81 315.30 315.30 315.30
Capital
Share 0.00 0.00 0.00 0.00 0.00
Application
Money
Preference 0.00 0.00 0.00 0.00 0.00
Share Capital
Reserves 26,028.37 19,720.99 15,915.63 12,824.59 10,467.35
Revaluation 1,449.53 1,470.76 1,491.99 1,513.74 1,535.70
Reserves
Net Worth 27,817.08 21,508.56 17,722.92 14,653.63 12,318.35
Deposits 379,588.4 312,898.73 249,329.80 209,760.50 166,457.23
8
Borrowings 37,264.27 31,589.69 19,262.37 4,374.36 5,446.56
Total Debt 416,852.7 344,488.42 268,592.17 214,134.86 171,903.79

27 | P a g e
 5
Other 13,524.18 12,328.27 10,317.69 18,130.13 14,798.23
Liabilities &
Provisions
Total 458,194.0 378,325.25 296,632.78 246,918.62 199,020.37
Liabilities 1

  Mar '21 Mar '20 Mar '19 Mar '18 Mar '17
  12 months 12 months 12 months 12 months 12 months
Assets
Cash & Balances 18,492.90 23,776.90 18,327.58 17,058.25 15,258.15
with RBI
Balance with 10,335.14 5,914.32 5,145.99 4,354.89 3,572.57
Banks, Money at
Call
Advances 293,774.76 242,106.67 186,601.21 154,702.99 119,501.57
Investments 122,629.47 95,162.35 77,724.47 63,385.18 53,991.71
Gross Block 5,265.08 4,981.60 4,215.21 3,930.36 3,699.64
Accumulated 2,096.22 1,876.01 1,701.74 1,533.25 1,384.12
Depreciation
Net Block 3,168.86 3,105.59 2,513.47 2,397.11 2,315.52
Capital Work In 0.00 0.00 0.00 0.00 0.00
Progress
Other Assets 9,792.88 8,259.42 6,320.07 5,020.20 4,380.84
Total Assets 458,194.01 378,325.25 296,632.79 246,918.62 199,020.36
Contingent 173,768.84 101,465.73 68,124.47 79,270.65 80,606.88
Liabilities
Bills for collection 50,981.22 37,449.53 33,215.78 31,941.43 23,448.99
Book Value (Rs) 777.39 632.48 514.77 416.74 341.98

28 | P a g e
29 | P a g e
4.3 PROFIT AND LOSS ACCOUNT
Profit & Loss account ------------------- in Rs. Cr. -------------------

  Mar '21 Mar '20 Mar '19 Mar '18 Mar '17

  12 12 12 12 months 12 months
months months months
Income
Interest Earned 36,428.0 26,986.4 21,466.9 19,326.16 14,265.02
3 8 1
Other Income 4,202.60 3,612.58 3,565.31 2,919.69 1,997.56
Total Income 40,630.6 30,599.0 25,032.2 22,245.85 16,262.58
3 6 2
Expenditure
Interest expended 23,013.5 15,179.1 12,944.0 12,295.30 8,730.86
9 4 2
Employee Cost 4,723.48 4,461.10 3,121.14 2,924.38 2,461.54
Selling and Admin 3,353.59 2,813.45 1,701.46 1,406.42 884.19
Expenses
Depreciation 292.26 255.85 222.83 191.06 170.23
Miscellaneous 4,363.51 3,456.02 3,137.42 2,337.80 1,966.98
Expenses
Preoperative Exp 0.00 0.00 0.00 0.00 0.00
Capitalized
Operating Expenses 9,405.85 8,367.96 5,761.36 5,026.81 3,902.55
Provisions & 3,326.99 2,618.46 2,421.49 1,832.85 1,580.39
Contingencies
Total Expenses 35,746.4 26,165.5 21,126.8 19,154.96 14,213.80
3 6 7

30 | P a g e
  Mar '21 Mar '20 Mar '19 Mar '18 Mar '17

  12 12 12 12 12
months months months months months
Net Profit for the Year 4,884.20 4,433.50 3,905.36 3,090.88 2,048.76

Extraordinary Items 7.88 0.00 0.00 0.00 0.00

Profit brought forward 0.00 0.00 7.64 0.00 15.52

Total 4,892.08 4,433.50 3,913.00 3,090.88 2,064.28

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 746.19 696.99 693.67 630.61 409.89

Corporate Dividend Tax 121.05 113.07 116.43 107.17 69.66

Per share data (annualized)

Earnings Per Share (Rs) 144.00 139.94 123.86 98.03 64.98

Equity Dividend (%) 220.00 220.00 220.00 200.00 130.00

Book Value (Rs) 777.39 632.48 514.77 416.74 341.98

Appropriations

Transfer to Statutory Reserves 1,390.32 1,258.39 1,532.46 1,155.46 596.14

Transfer to Other Reserves 2,634.53 2,365.05 1,570.44 1,190.00 988.59

Proposed Dividend/Transfer to 867.24 810.06 810.10 737.78 479.55

Govt.
Balance c/f to Balance Sheet 0.00 0.00 0.00 7.64 0.00

Total 4,892.09 4,433.50 3,913.00 3,090.88 2,064.28

31 | P a g e
32 | P a g e
4.4 FINANCIAL RATIOS
Key Financial Ratios

  Mar '21 Mar '20 Mar '19 Mar '18 Mar '17

Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share 22.00 22.00 22.00 20.00 13.00

Operating Profit Per Share (Rs) 223.61 205.58 191.63 151.48 109.81

Net Operating Profit Per Share 1,170.8 940.76 777.82 694.81 505.09
(Rs) 1
Free Reserves Per Share (Rs) 130.21 69.25 63.79 64.04 63.79

Bonus in Equity Capital -- -- -- -- --

Profitability Ratios

Interest Spread 4.51 4.67 4.46 4.18 4.18

Adjusted Cash Margin(%) 12.80 15.39 16.52 14.60 13.72

Net Profit Margin 12.09 14.56 15.64 13.76 12.68

Return on Long Term Fund(%) 113.95 108.49 116.11 129.83 111.52

Return on Net Worth(%) 18.52 22.12 24.06 23.52 19.00

Adjusted Return on Net Worth 18.50 22.11 24.04 23.50 18.99

(%)
Return on Assets Excluding 777.39 632.48 514.77 416.74 341.98
Revaluations
Return on Assets Including 820.13 678.91 562.09 464.75 390.68
Revaluations
Management Efficiency Ratios
Interest Income / Total Funds 9.53 8.87 9.07 9.89 8.86

33 | P a g e
Net Interest Income / Total Funds 4.01 4.35 4.28 4.34 4.00
Non Interest Income / Total Funds 0.16 0.19 0.16 0.25 0.13
Interest Expended / Total Funds 5.52 4.52 4.79 5.55 4.86
Operating Expense / Total Funds 2.19 2.41 2.05 2.18 2.08
Profit Before Provisions / Total 1.91 2.05 2.31 2.32 1.96
Funds
Net Profit / Total Funds 1.17 1.32 1.45 1.40 1.14
Loans Turnover 0.15 0.14 0.14 0.16 0.15
Total Income / Capital Employed 9.69 9.06 9.24 10.14 8.99
(%)
Interest Expended / Capital 5.52 4.52 4.79 5.55 4.86
Employed (%)
Total Assets Turnover Ratios 0.10 0.09 0.09 0.10 0.09
Asset Turnover Ratio 0.10 0.09 0.10 0.11 4.35
Profit And Loss Account Ratios
Interest Expended / Interest Earned 63.18 56.25 60.30 63.62 61.20
Other Income / Total Income 1.68 2.12 1.75 2.46 1.43
Operating Expense / Total Income 22.56 26.64 22.19 21.53 23.10
Selling Distribution Cost 0.09 0.13 0.16 0.14 0.14
Composition
Balance Sheet Ratios
Capital Adequacy Ratio 12.63 12.42 14.16 14.03 13.46
Advances / Loans Funds (%) 77.17 78.98 77.31 80.15 76.19

Debt 7Coverage Ratios

Credit Deposit Ratio 77.39 76.25 74.34 72.88 70.55

Investment Deposit Ratio 31.45 30.75 30.74 31.20 32.38

34 | P a g e
Cash Deposit Ratio 6.10 7.49 7.71 8.59 9.02

Total Debt to Owners Fund 14.40 15.62 15.36 15.96 15.44

Financial Charges Coverage Ratio 0.36 0.47 0.50 0.43 0.42

Financial Charges Coverage Ratio 1.22 1.31 1.32 1.27 1.25

Post Tax
Leverage Ratios

Current Ratio 0.02 0.03 0.02 0.02 0.02

Quick Ratio 23.81 22.24 20.47 9.75 9.40

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 17.75 18.27 20.74 23.86 23.40

Dividend Payout Ratio Cash Profit 16.75 17.27 19.62 22.47 21.61

Earning Retention Ratio 82.23 81.72 79.25 76.12 76.59

Cash Earning Retention Ratio 83.24 82.72 80.37 77.51 78.38

Adjusted Cash Flow Times 73.39 66.77 60.43 63.95 75.05

  Mar '16 Mar '15 Mar Mar Mar

'14 '13 '12
Earnings Per Share 144.00 139.94 123.86 98.03 64.98

Book Value 777.39 632.48 514.77 416.74 341.98

35 | P a g e
4.5 CAPITAL STRUCTURE OF WIPRO
WIPRO

Capital Structure

Period Instrument --- CAPITAL (Rs. cr) --- -PAIDUP-

Fro To Authorized Issued Shares Face Capita

m (nos) Value l
202 202 Equity 3000 339.18 339178683 10 339.1
0 1 Share 8
201 202 Equity 3000 316.81 316812157 10 316.8
9 0 Share 1
201 201 Equity 3000 315.3 315302500 10 315.3
8 9 Share
201 201 Equity 1500 315.3 315302500 10 315.3
7 8 Share
201 201 Equity 1500 315.3 315302500 10 315.3
6 7 Share
201 201 Equity 1500 315.3 315302500 10 315.3
5 6 Share
201 201 Equity 1500 315.3 315302500 10 315.3
4 5 Share
201 201 Equity 1500 315.3 315302500 10 315.3
3 4 Share
201 201 Equity 1500 265.3 265302500 10 265.3
2 3 Share
201 201 Equity 1500 265.3 265302500 10 265.3
1 2 Share
201 201 Equity 1500 265.3 212241300 10 212.2
0 1 Share 4

36 | P a g e
RATIO ANALYSISI

1) Current Ratio
The current ratio is a financial ratio that shows the proportion of a company's
current assets to its current liabilities. The current ratio is often classified as a
liquidity ratio and a larger current ratio is better than a smaller one. However, a
company's liquidity is dependent on converting the current assets to cash in time to
pay its obligations.
Current Ratio = Current Assets
Curent Liabilities
Table 1
Current Ratio
Year 2021 2020 2019 2018 2017
Current Assets 4736.95 3937.39 3278.99 2479.61 1963.67
Current Liabilities 1854.95 1492.71 1632.70 1457.73 1355.45
Ratios 2.55 2.64 2.01 1.68 1.46

GRAPH 1

2.5

1.5 2.55 2.64

2.01
1 1.68
1.46

0.5

0
2021 2020 2019 2018 2017
37 | P a g e
Current Ratio
Interpretation
 Current ratio is always 2:1 it means the current assets two time of current
liability.
 After observing the figure the current ratio is fluctuating.
 In the year 2019 ratio is showing good shine.
 Company’s current ratio has increased in 2019, but has reduced in 2017;
this signifies a diminishing short term solvency.
 Current Ratio can be improved by having more current assets or by
reducing current liabilities.

38 | P a g e
 2) Quick Ratio
The quick ratio is an indicator of a company’s short-term liquidity position and
measures a company’s ability to meet its short-term obligations with its most
liquid assets. Since it indicates the company’s ability to instantly use its near-cash
assets (that is, assets that can be converted quickly to cash) to pay down its current
liabilities, it is also called as the acid test ratio. An acid test is a quick test designed
to produce instant results—hence, the name.
Quick Ratio = Quick Assets
Qucik Liabilities
Table 2
    Quick Ratio    
Year 2021 2020 2019 2018 2017
Quick Assets 3771.4 3034.92 2335.81 1658.8 1119.57
Quick Liabilities 1854.95 1492.71 1632.70 1475.73 1355.45
Ratios 2.03 2.03 1.43 1.12 0.83

Graph 2

2.5

1.5

2.03 2.03
1
1.43
1.12
0.83000000000000
0.5 1

0
2021 2020 2019 2018 2017

Quick Ratio

39 | P a g e
Interpretation
 Standard Ratio is 1:1
 Company’s Quick liabilities is more than Quick assets for all these 5 years.
 The company do not have the immediate solvency as the ratios of the
company are below standard ratio that is 1:1.
 This indicates the funds are locked-up in inventories, it is suggested to
reduce the inventory level to increase the immediate solvency and ratio of
the company.
 The quick ratio was at its peak in year 2020 and 2021, while it was lowest
in year 2017.

40 | P a g e
 3) Cash Ratio
The cash ratio is the ratio of a company's total cash and cash equivalents to its
current liabilities. The metric calculates a company's ability to repay its short-term
debt with readily-liquidated cash resources. This information is useful to parties
such as creditors when they decide how much debt, if any, they would be willing
to extend to the asking party. The cash ratio is generally a more conservative look
at a company's ability to cover its liabilities than many other liquidity ratios
because other assets, including accounts receivable, are left out of the equation.
Cash Ratio = Cash & Bank Balance
Current Liabilities
Table 3
Cash Ratio
Year 2021 2020 2019 2018 2017
Cash and Bank
Balance 1610.06 1457.42 880.00 499.55 445.82
Current Liabilities 1854.96 1492.71 1632.70 1475.73 1355.45
Ratios 0.86 0.97 0.53 0.33 0.32
Graph 3

1
0.9
0.8
0.7
0.6
0.97000000000000
0.5 0.86000000000000 1
1
0.4
0.3 0.53
0.33000000000000
0.32000000000000
0.2 1 1
0.1
0
2021 2020 2019 2018 2017

Cash Ratios

41 | P a g e
Interpretation
 If a company's cash ratio is less than 1, there are more current liabilities
than cash and cash equivalents.
 The cash ratio of the company is less than 1 that means there is insufficient
cash to pay off the current liabilities.
 The cash ratio was at peak in 2020, while it was lowest in year 2017.

42 | P a g e
 4) Interest Coverage Ratio
The interest coverage ratio is a debt ratio and profitability ratio used to determine
how easily a company can pay interest on its outstanding debt. The ICR is
commonly used by lenders, creditors, and investors to determine the riskiness of
lending capital to a company. The interest coverage ratio is also called the “times
interest earned” ratio.
Interest Coverage Ratio = EBIT
INTEREST
TABLE 4

Interest Coverage
    Ratio    
Year 2021 2020 2019 2018 2017
EBIT 2540.9 1840.48 1445.05 816.92 1788.58
INTEREST 111.95 91.90 3.51 3.29 14.23
Ratios 22.69 20.02 411.69 248.30 125.69
GRAPH 4

450

400

350

300

250
411.69
200

150 248.3

100
125.69
50
22.69 20.02
0
2021 2020 2019 2018 2017

Interest Coverage Ratios

43 | P a g e
Interpretation
 After observing the graph the ratio is increasing in the year 2019 but in the
year of 2020 the ratio is decreasing.
 The ratio is at peak in the year 2019.
 This shows the company is better equipped to meet its obligation and even
in times of recession it will be able to pay what it owes to the lender.

44 | P a g e
 5) Proprietary Ratio
Proprietary ratio (also known as Equity Ratio or Net worth to total assets or
shareholder equity to total equity). Establishes relationship between proprietor's
funds to total resources of the unit. Where proprietor's funds refer to Equity share
capital and Reserves, surpluses and Tot resources refer to total assets.
Proprietary Ratio = Proprietary Fund
Total Assets
TABLE 5
    Proprietary Ratio    
Year 2021 2020 2019 2018 2017
Proprietary Fund 3673.74 3420.59 3013.70 2817.84 2837.21
Total Assets 7242.77 6647.73 6196.62 5608.25 5385.09
Ratios 0.50 0.51 0.48 0.50 0.52
GRPAH 5

0.52

0.51

0.5

0.49 0.52
0.51
0.48 0.5 0.5

0.47 0.48

0.46

0.45
2021 2020 2019 2018 2017

Proprietary Ratio

45 | P a g e
Interpretation
 The ideal ratio is 0.75
 By observing the ratios the company shows high financial involvement of
the owners and therefore low financial leverage and risk.
 In the year of the 2021 the ratio is 0.50 but in the year of 2017 it was 0.52.
It is decreased 0.02 as compared to 2017.

46 | P a g e
Profitability Ratios
A company should earn profits to survive and grow over a long period of time. It
would be wrong to assume that every action initiated by management of company
should be aimed at maximizing profits, irrespective of social as well as economic
consequences. It is a fact that sufficient must be earned to sustain the operation of
the business to be able to obtain funds from investors for expansion and growth
and to contribute towards the responsibility for the welfare of the society in
business environment and globalization. The profitability ratios are calculated to
measure the operating efficiency of the company.
The following Profitability Ratios are calculated for the company.
• Gross Profit Ratio
• Operating Profit Ratio
• Net Profit Ratio
• Rate of Return on Investment
• Rate of Return on Equity

47 | P a g e
 6) Net profit ratio
Net profit ratio (NP ratio) is a popular profitability ratio that shows relationship
between net profit after tax and net sales. It is computed by dividing the net profit
(after tax) by net sales.
The relationship between net profit and net sales may also be expressed in
percentage form. When it is shown in percentage form, it is known as net profit
margin. The formula of net profit margin is written as follows:
Net Profit Ratio = Net profit x 100
Net sales
TABLE 6
Net Profit Ratio
Year 2021 2020 2019 2018 2017
Net Profit 1606.93 1225.19 926.54 563.27 1184.69
Net Sales 11292.27 10009.60 9223.80 8175.31 9854.84
Ratios 14.23 12.24 10.04 6.88 12.02
GRAPH 6

16

14

12

10

8 14.23
12.24 12.02
6 10.04

4 6.88

0
2021 2020 2019 2018 2017

Net Profit Ratios

48 | P a g e
Interpretation
 After observing the figure the ratio is fluctuating.
 Though the company’s sale is continuously rising but the net profit is not so
much increased.
 Ratio is decreased in year 2018 after this period it is increasing in every
year.
 The overall ratio is showing good position of the company.
 The ratio can be improved by increasing sales and controlling the cost of
goods sold and operating expenses.

49 | P a g e
 7) Operating Profit Ratio
Operating profit ratio establishes a relationship between operating Profit earned
and net revenue generated from operations (net sales). Operating profit ratio is a
type of profitability ratio which is expressed as a percentage.Net sales include both
Cash and Credit Sales, on the other hand, Operating Profit is the net operating
profit i.e. the Operating Profit before interest and taxes. Operating Profit ratio
helps to find out Operating Profit earned in comparison to revenue earned from
operations
Operating Profit Ratio = Operating profit x 100
Net sales
TABLE 7
Operating Profit
Year 2021 2020 2019 2018 2017
Operating Profit 2617.65 2096.53 1711.42 1554.93 2031.80
Net sales 11292.27 10009.60 9223.80 8175.31 9854.84
Ratios 23.18 20.94 18.55 19.019 20.61
GRAPH 7

25

20

15
23.18
20.94 19.19 20.61
18.55
10

0
2021 2020 2019 2018 2017

OperatingRatios

50 | P a g e
Interpretation
 After observing the figure the ratio is fluctuating.
 The ratio is lowest in the year 2019 and it is at peak in year 2021.
 This indicate better management of resources i.e. a higher operational
efficiency leading to higher operating profits in the company.

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 8) Return on investment
Return on investment (ROI) measures the gain or loss generated on an investment
relative to the amount of money invested. ROI is usually expressed as a percentage
and is typically used for personal financial decisions, to compare a company's
profitability or to compare the efficiency of different investments.
Return on Investment = EBIT x 100
Total Assets
TABLE 8

Return on
Investment
Year 2021 2020 2019 2018 2017
EBIT 2540.90 1840.48 14475.05 816.92 1788.58
Total Assets 8088.08 7362.59 6805.97 6080.46 5819.50
Ratios 31.41 24.99 21.23 13.43 30.73
GRAPH 8:

35

30

25

20
31.41 30.73
15 24.99
21.23
10
13.43
5

0
2021 2020 2019 2018 2017

Return on Investment

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Interpretation
 From the above observation it can be seen that ratio is fluctuating.
 In the year 2021 Rate of Return on Investment at peak as compared to all
years.
 Ratio is increasing after 2019 at increased rate because of assets increased
compared to sales

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 9) Return on equity
ROE is considered a measure of how effectively management is using a
company’s assets to create profits. ROE is expressed as a percentage and can be
calculated for any company if net income and equity are both positive numbers.
Net income is calculated before dividends paid to common shareholders and after
dividends to preferred shareholders and interest to lenders.
Return on Equity = Profit after Tax x 100
Share Holder Funds
TABLE 9
    Return on Equity    
Year 2021 2020 2019 2018 2017
PAT 1606.93 1225.19 926.54 563.27 1184.69
SHF 3673.74 3420.59 3013.70 2817.84 2837.21
Ratios 43% 35% 30% 19% 41%
GRAPH 9

45%

40%

35%

30%

25% 43% 41%

20% 35%
30%
15%
19%
10%

5%

0%
2021 2020 2019 2018 2017

Return on Equity Ratios

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Interpretation:
 Return of equity is at its peak in the year 2021.
 The returns on equity are decreasing after 2017, and increases in the year
2021.
 It shows that the business was able to successfully utilize the resources
provided by its equity investors and the company’s accumulated profits in
generating income

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Asset Turnover Ratios
Asset Turnover Ratio are basically productivity ratios which measure the output
produced from the given input deployed. This relationship is shown as under
Productivity = Output
Input
Assets are inputs which are deployed to generate production (or sales). The same
set of assets when used intensively produces more output or sales. If the asset
turnover is high, it shows efficient or productive use of input.
The following Assets Turnover Ratios are calculated for the company.
 Net Fixed Assets Turnover
 Net Working Capital Turnover
 Net Worth Turnover
 Capital Turnover Ratio

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 10)Fixed Assets Turnover
The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure
operating performance. This efficiency ratio compares net sales (income
statement) to fixed assets (balance sheet) and measures a company’s ability to
generate net sales from its fixed-asset investments, namely property, plant, and
equipment (PP&E).
Fixed Assets Turnover Ratio = Net Sales
Fixed Assets
Table 10
Fixed Assets Turnover
Ratio
Year 2021 2020 2019 2018 2017
Net Sales 11292.27 10009.06 9223.80 8175.31 9854.84
Fixed Assets 2505.82 2710.34 2917.63 3128.64 3421.42
Ratios 4.50 3.69 3.16 2.61 2.88
GRAPH 10

4.5

3.5

2.5 4.5

2 3.69
3.16
2.88
1.5 2.61

0.5

0
2021 2020 2019 2018 2017

Fixed Assets Turnover

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Interpretation:-
 The graph indicates that the ratios are fluctuating.
 The ratio is at its peak in the year 2021.
 The ratio is increasing every year from 2017 to 2021.

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 11)Working capital turnover
Working capital turnover is a ratio that measures how efficiently a company is
using its working capital to support a given level of sales. Also referred to as net
sales to working capital, work capital turnover shows the relationship between the
funds used to finance a company's operations and the revenues a company
generates as a result.
Working Capital Turnover Ratio = Net Sales
Working Capital
TABLE 11
Working Capital
Turnover Ratio
Year 2021 2020 2019 2018 2017
Net Sales 11292.27 10009.60 9223.80 8175.31 9854.84
Working Capital 2882 2444.68 1646.29 1003.88 608.22
Ratios 3.91 4.09 5.60 8.14 16.20

GRAPH 11

18

16

14

12

10
16.2
8

6
8.14
4 5.6
3.91 4.09
2

0
2021 2020 2019 2018 2017

Working Capital Ratios

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Interpretation
 The ratios of the company are declining every year.
 The ratio is at its peak in the year 2017 and lowest in the year 2021.
 The efficiency of the company is low.
 The management is being very efficient in using a company’s short-term
assets and liabilities for supporting sales.

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Valuation Ratios
Valuation ratios are the result of the management of above four categories of the
functional ratios. Valuation ratios are generally presented on a per share basis and
thus are more useful to the equity investors. The following Valuation Ratios are
calculated for the company.
 Earnings Per Share
 Dividend Per Share
 Dividend pay-out Ratio
 Book Value

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 12)EPS
Earnings per share (EPS) is the portion of a company's profit allocated to each
share of common stock. Earnings per share serve as an indicator of a company's
profitability. It is common for a company to report EPS that is adjusted for
extraordinary items and potential share dilution.
EPS = Earning Available for equity share holders
Number of Equity Share
TABLE 12
EPS
Year 2021 2020 2019 2018 2017
Earnings available
for equity shares
holders 160693.572 122520.894 92659.62 56328.564 118471.254
Number of Equity 964.20 964.20 964.20 964.20 964.20
shares
Ratios 166.66 127.07 96.10 58.42 122.87
GRAPH 12

180

160

140

120

100
166.66
80
127.07 122.87
60 96.1
40 58.42
20

0
2021 2020 2019 2018 2017

EPS Ratios
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Interpretation
 Earning per share is fluctuating.
 The earnings are at peak in the year 2021 and lowest in the year 2018.
 It indicates a sign of better earnings, strong financial position and therefore
a reliable company to invest in.
 The earnings in 2021 indicates the growth of the company.
 After 2019 it was increasing every year.

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 13)DPS
Dividend per share (DPS) is the sum of declared dividends issued by a company
for every ordinary share outstanding. The figure is calculated by dividing the total
dividends paid out by a business, including interim dividends, over a period of
time by the number of outstanding ordinary shares issued. A company's DPS is
often derived using the dividend paid in the most recent quarter, which is also used
to calculate the dividend yield.
DPS = Equity Dividend
Number of Equity Share
TABLE 13
DPS Ratio
Year 2021 2020 2019 2018 2017
Equity Dividend 0.00 829.18 607.42 467.62 607.42
No of Equtiy 96.42 96.42 96.42 96.42 96.42
Shares
Ratios 0.00 8.599 6.299 4.849 6.299

GRAPH 13

5 8.599
4
6.299 6.299
3 4.849
2

1
0
0
2021 2020 2019 2018 2017

DPS Ratios

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Interpretation
 In the year 2021, no dividend has been declared.
 The ratio are fluctuating.
 The ratio is nil in 2021 and lowest in 2018.
 The company indicates growth as the dividend is more in the year 2014.

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 14)Dividend Payout Ratio
The dividend payout ratio is the ratio of the total amount of dividends paid out to
shareholders relative to the net income of the company. It is the percentage of
earnings paid to shareholders in dividends. The amount that is not paid to
shareholders is retained by the company to pay off debt or to reinvest in core
operations. It is sometimes simply referred to as the 'payout ratio.'
DPR = DPS X 100
EPS
TABLE 14
    Dividend Payout Ratio    
Year 2021 2020 2019 2018 2017
DPS 0.00 8.599 6.299 4.849 6.299
EPS 166.66 127.02 96.10 58.42 122.87
Ratios - 6.166 6.55 8.30 5.126
GRAPH 14

5
8.3
4 6.55
6.16599999999998
3 5.12599999999998

1
0
0
2021 2020 2019 2018 2017

Dividend Pay Out Ratios

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Interpretation
 In the year 2021, no dividend has been declared, so no ratio is calculated.
 The ratio are fluctuating.
 The ratio is highest in 2020 and lowest in 2018.
 Growth share will have low payout ratio as company will reinsert most of
the profit in new project.
 The ratio is constant in the year 2019 and 2017

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 15)Book Value
Book value represents a company's assets minus its liabilities and sometimes is
referred to as stockholders' equity, owners' equity, shareholders' equity, or simply
equity. The book value per share formula is used to calculate the per share value of
a company based on its equity available to common shareholders.
BOOK VALUE = Equity Shares + Réserves and Surplus
Number of Equity Share
TABLE 15
Book Value
Year 2021 2020 2019 2018 2017
Equity + Reserve 3673.74 3420.59 3013.70 2817.84 2837.21
Number of Equity 96.42 96.42 96.42 96.42 96.42
Ratios 38.10 35.47 31.25 29.22 29.42
GRAPH 15

40

35

30

25
38.1
20 35.47
31.25 29.22 29.42
15

10

0
2021 2020 2019 2018 2017

Book Value Ratios

Interpretation
 The ratios of the company are increasing every year.
 The ratio indicates high reserves of the company.
 As per the analysis the company have high net worth and the book value.
 The ratio is at the peak in the year 2021.
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 16)Debt-Equity Ratio
This ratio is only another form proprietary ratio and establishes relation between
the outside long term liabilities and owner funds. It shows the proportion of long
term external equity & internal Equities.
Debt Equity Ratio = Debt
Equity
TABLE NO 16
  Debt Equity    
Year 2021 2020 2019 2018 2017
Debt 35.14 35.14 33.15 16.79 15.46
Equity 96.42 96.42 96.42 96.42 96.42
Ratios 0.36 0.36 0.34 0.17 0.16
GRAPH 16

0.4
0.35
0.3
0.25
0.2 0.36 0.36 0.34
0.15
0.17 0.16
0.1
0.05
0
2021 2020 2019 2018 2017

Debt Equtiy Ratio

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Interpretation
 It shows companies accumulated more equity than required company has to
refocus to its strategic policies and plans and try to accumulate more debt
funds in future so as to make the balance between debt and equity.
 There is only current year ratio is somewhat sufficient.
 The ratio is constant from last two years.

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 17)Net Profit Ratio
Net Profit Ratio = Net profit x 100
Net sales
TABLE NO 17
Net Profit Ratio
Year 2021 2020 2019 2018 2017
NET Profit 1606.93 1225.19 926.54 563.27 1184.69
Net Sales 11292.27 10009.60 9223.80 8175.31 9854.84
Ratios 14.23 12.247 10.04 6.88 12.02
GRAPH 17

16

14

12

10

8 14.23
12.24 12.02
6 10.04

4 6.88

0
2021 2020 2019 2018 2017

Net Profit Ratios

Interprétation
 After observing the figure the ratio is fluctuating.
 Company has risen in its net profit from the year-2019 as compared to the
previous year i.e. 2018 because the company has increased its sales.
 Though the company’s sale is continuously rising but the net profit is not so
much increased so management should take some steps to decrease its
expenses.

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 18)Debtor Turnover Ratio
Debtor turnover ratio: The debtor turnovers suggest the no. of times the amount of
credit sale is collected during the year.
Debtor’s Turnover Ratio = Trade Receivable
Net Sales
Table 18
Debtor Turnover
Ratio
Year 2021 2020 2019 2018 2017
Trade Rec 124.59 88.97 97.93 78.42 99.10
Net Sales 11292.27 10009.60 9223.80 8175.31 9854.84
Ratios 0.01 0.01 0.01 0.01 0.01
GRAPH 18

0.01
0.009
0.008
0.007
0.006
0.01 0.01 0.01 0.01 0.01
0.005
0.004
0.003
0.002
0.001
0
2021 2020 2019 2018 2017

Debtor Turnover Ratios

Interpretation
 Debtor turnover indicates how quickly the company can collect its credit
sales revenue.
 Here the ratio is constant so it shows that the management have an ability to
collect its money from his debtors. So they can invest that money on Assets,
HRD and other investments.
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 19)Working Capital

Working capital, also known as net working capital (NWC), is the difference
between a company's current assets, such as cash, accounts receivable (customers'
unpaid bills) and inventories of raw materials and finished goods, and its current
liabilities, such as accounts payable.

Working capital = Current Asset - Current Liabilities

TABLE19
Working capital

Year 2021 2020 2019 2018 2017

Current Assets 4736.95 3937.39 3278.99 2479.61 1963.67

Current liabilities 1854.95 1492.71 1632.78 1475.73 1355.45

Ratios 2882 2444.68 1646.29 1003.88 608.22

Graph 19

3000

2500

2000

2882
1500
2444.68

1000 1646.29
1003.88
500 608.22

0
2021 2020 2019 2018 2017

Working Capital Ratios

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 Interpretation

 After observing the figure the ratio is fluctuating.

 Though the company’s Asset is continuously rising the working capital is
also increasing continuously
 Ratio is decreased in year 2017 compared to2018.
 The overall ratio is showing good position of the company.
 The ratio can be improved by increasing current assets and controlling the
current liabilities.
 In the year 2218 the working is at the peak level

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 20)Stock To Working Capital Ratio

Inventory to working capital ratio is defined as a method to show what

portion of a company’s inventories is financed from its available cash. This is

essential to businesses which hold inventory and survive on cash supplies. In
general, the lower the ratio, the higher the liquidity of a company is.
However, the value of inventory to working capital ratio varies from industry
and company. In conclusion, the better marks to compare with the industry
average.

Stock Working Capital Ratio =Closing Stock. X 100

Working capital
TABLE20
Stock to working capital

Year 2021 2020 2019 2018 2017

Closing stock 965.55 902.47 943.18 820.81 844.10

Working capital 2882 2444.68 1646.29 1003.88 608.22

Ratios 33.50 36.91 57.29 81.76 138

Graph 20

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 140

120

100

80 138

60
81.76
40 57.29
33.5 36.91
20

0
2021 2020 2019 2018 2017

Stock to Working Capital Ratios

Interpretation

 After observing the figure the ratio is fluctuating.

 Though the company’s rising working capital is increasing continuously
 Ratio is decreased in year 2021 compared to2017
 In the year 2017 the companies ratio at a peak level.
 The ratio is start decreasing from 2018 because the working is more as
compare to stock
 The companies current assets n current liabilities is increasing day by day

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 21)Debtor Velocity Ratio
Velocity Ratio or debtor's turnover ratio indicates the number of times the debtors
are turned over a year i.e. cash is collected by the debtors. The higher the value of
debtor's turnover the more efficient is the management of debtors or more liquid
the debtor

Debtor velocity Ratio = TradeReceivable.X365

Net Sales

Table 21
Debtor velocity Ratio

Year 2021 2020 2019 2018 2017

Trade Rec 124.59 88.97 97.93 78.42 99.10

Net Sales 11292.27 10009.60 9223.80 8175.31 9854.84

Ratios 4.02 3.24 3.87 3.50 3.67

Graph 21

4.5

3.5

2.5
4.02 3.87
2 3.5 3.67
3.24
1.5

0.5

0
2021 2020 2019 2018 2017

Debtor Velocity Ratios

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 Interpretation

 Debtor turnover indicates how quickly the company can collect its credit

sales revenue.
 Here the ratio is continuously increasing day by day.

 The company give more times to the debtor.

 The trade receivable is less then the net sales.

 In the year 2021 the ratio is at peak level.

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 CHAPTER V
CONCLUSION

According to this Research we find that The company's overall position is at a good
position. The company achieves sufficient profits in past five years. Fixed assets are
efficiently utilized by the company due to which the profit of the company is increasing
every year. The long term solvency of the company is good. The company maintains low
liquidity to achieve high profitability .The company distributes dividend every year to its
shareholders. Inventory tu rn ov er ratio is increased as compared to after
that all year so management should take care about good efficiency of stock
management.Net Fixed Assets Turnover Ratio is increasing year by year
because of Sale is increasing continuously and Though the company’s sale is
continuously rising but the net profit is not so much inc r e a s e d s o
ma nageme nt s ho u l d t a ke s o m e s t e ps t o de c r e a s e it s expenses.

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Findings:
 The company is mostly into manufacturing of solar panels
 In whole India they have only one plant and one ware house inMumbai
 The size of employees in the organization is very low when compared to their
range of activities and revenue
 The management of the organization is very friendly and they treat employees as
their own people
 They give first importance to safety of the employee
 Work environment is friendly
 Communication between employees is not good to some extend
 They follow all government rules according to the need and time
 They were mostly into export of solar modules
 They stand in 1st place in India in exporting of solar modules

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 Recommendations

 Day by day there is huge increase in demand for solar panels so there is necessity
to fully automatize the whole manufacturing
 In order to develop better communication between the employees they have to
conduct one brain storming activity

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 BIBLIOGRAPHY
Books:

 Annual Report of Wipro Limited for Financial Year 2004-05, 2006-07,2007- 08.

 Narayanaswamy R., (1998): “Financial Accounting”: A Managerial

Perspective,Prentice-Hall of India Private Ltd, New Delhi., Third Edition,
Reprint 2003

 Khan M.Y. and Jain P.K., (1992):”Financial Management”, Tata

McGraw-HillPublishing Co Ltd., New Delhi., Third Edition..

Websites

 http://www.wipro.com

 http://www.bseindia.com//shareholding/shareholding_new.asp

 http://www.cmie.com//indutries//gdp.asp

 http://www.wipro.com/investors/annual_reports.htm

 http://www.wipro.com/investors/pdf_files/AR07_08_first_book_final.pdf

 http://www.wipro.com/investors/pdf_files/AR07_08_second_book_final.pdf

 http://www.wipro.com/investors/pdf_files/Wipro_AR_2006_07_Part_1.pdf

 http://www.wipro.com/investors/pdf_files/Wipro_AR_2006_07_Part_2.pdf

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