Analysis Tata Communications is a leading global provider of a new world of communications.

With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. Liquidity Ratios: Tata Communications have been able to maintained good liquidity ratio which is very close to industry average.
Liquidity Ratios Current Ratios Quick Ratios Net Working Capital Ratio Current liabilities to inventory Ratio Cash Ratio Operating Ratio 2008 1.88 1.87 0.27 403.7 0.04 0.81 2009 1.72 1.71 0.23 1839.1 0.13 0.77 2010 2.3 2.29 0.29 1667.74 0.05 0.77 2011 2.33 2.32 0.28 367.4 0.22 0.76

Current Ratios of Tata Communications for the year 2011 (2.33) is very high as compared to other years. It indicates that it has excess of current assets over current liabilities & the firm is said to be liquid. This shows these companies have good short term solvency position however ratios are slightly on higher side in the year 2011 but it is acceptable in Telecom industry. As we can see the cash ratio is too low, we can understand that the company is utilizing the cash to the optimum but as compared to industry average the company should keep more amount of cash in the reserves. The quick ratio indicates the ability of converting the assets quickly into cash as the ration is on the higher sides it indicates the company is more liquid. Asset Ratio: Tata Communication is a service oriented organization. The ability to generate revenues and earn profits on assets can be measured through ratio analysis.
Asset Ratio Inventory Turnover Ratio Fixed Assets Turnover Ratio Total Assets Ratio Asset to Equity Ratio 2008 602.44 1.1 0.46 25.01 2009 1847.01 0.91 0.42 31.66 2010 1352.72 0.75 0.39 32.91 2011 1352.72 0.75 0.39 32.91

As the company indulge in installing tower for network solutions which required a huge capital but the return on capital is low. The turnover ratio of inventory is very high which indicates that there is low inventory, but as its a telecom industry the industry doesnt produce anything. The

fixed turnover ratio is low as there is constant increase in fixed assets but the sales is not constantly increased. Profitability Ratio: The company have sold many of their towers which have decreased their assets in result the income have been decreased due to which return on assets ratio is very low. As the profitability ratio is low this will not encourage more investors to invest in the company. The political issues have impacted a lot on the telecom sector as well as to the organization, which shows very low profitability ratios. Debt Ratios: The company