Professional Documents
Culture Documents
analysis of Infosys
Presentation by:
Pranav Tripathi
Roll No: NF161719
PGDM (Financial Market) 2016-17
Contents
Basic
overview of
Company
Charts-Trend
analysis
Calculation
Table
Growth of
working capital
Working capital
ratio
Return on
working capital
Findings
Observations
Conclusions
: IT services, IT consulting
Founded
: 2 July 1981
Headquarters
: Bangalore, India
CEO and MD
: Vishal Sikka
Area served
: Worldwide
Services
No of employees
: 197,050
Traded as
: 500209
: BSE
NSE
: INFY
NYSE
: INFY
2. Calculation table
Companies
Infosys
Particulars
2016
2015 2014
2013
2012
2011
Current Assets
Current Investments
2
749 3024
1739
368
140
Trade Receivables
9798
8627 8351
7083
5882
4653
Cash and Cash equivalents
29176
27722 25950 21832 20591 16666
Short Term Loans and
Advances
7121
5654 5753
4689
3420
2544
Total Current Assets
46097
42752 43078 35343 30261 24003
Current Liabialities
Trade Payables
623
124
173
189
23
44
Other Current Liabilities
6105
5546 5449
3941
3059
2540
Short Term Provisions
8809
8045 6409
3969
3820
2540
Total Current Liabilities
15537
13715 12031
8099
6902
5124
PAT
15786
12164 10656
9429
8332
6835
Working Capital
30560
29037 31047 27244 23359 18879
Growth in Working Capital
5%
-6%
14%
17%
24%
Working Capital Ratio
2.97
3.12
3.58
4.36
4.38
4.68
Return on Working Capital 0.516557
0.3432 0.3460 0.3566 0.3620
(In Rs.)
59 0.4189138
22
95
93
42
Return on Working Capital
(In %)
52%
42%
34%
35%
36%
36%
3. Charts-Trend analysis
It includes:
i.
Current Investments
Short Term Loans and Advances
Trade Receivables
Trade Payables
Short Term Provisions
Other Current Liabilities
2016 2015
Current Assets
2
749
7121 5654
9798 8627
Current Liabilities
623
124
8809 8045
6105 5546
2014
2013
2012
2011
3024
5753
8351
1739
4689
7083
368
3420
5882
140
2544
4653
173
6409
5449
189
3969
3941
23
3820
3059
44
2540
2540
2016
2015
2014
2013
2012
2011
8099
6902
5124
30560
29037
27244
23359
18879
2016
2015
2014
2013
2012
2011
4.38
2013
2012
3.58
2.97
2016
3.12
2015
2014
2011
52%
42%
34%
35%
36%
0%
2016
2015
2014
2013
2012
2011
4. Findings
On YoY basis, rate of increase of working capital has
declined.
From 2012 to 2013, the decrease is 7%
From 2013 to 2014, decrease is 3%.
In 2015, there is negative rate of increase of working
capital.
In 2016, there is optimism and working capital increase
by 5% from previous year.
5. Observations
There is increasing tendency of working capital in last 5 years.
Working capital ratios reduced from 4.68 to 2.97 in last 5 years. Ideal
ratio is assumed to be 2:1.
Current assets doubled
in last 5 years.
6. Conclusions
Since working capital ratio is reduced from 4.68 to 2.97,
it seems that company is trying correct its ratio to ideal
ratio of 2:1.
Excessive working capital ratio shows poor investment
policies, that is why company took corrective measures
and reduced current investments.
Company has also tripled short term provisions in last
5 years, which shows that there will be some significant
payment in future for which company is gearing up.