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INTRODUCTION

Set up in 1976 as one of India's one of a kind IT garage new


organizations, today the HCL Group has reached out to four
associations in India - HCL Infosystems, HCL Technologies, HCL
Healthcare and HCL Talent Care. The social event makes yearly
livelihoods of over US$ 6.5 billion with more than 105,000
specialists from 100 nationalities working more than 31 countries,
including more than 500 reasons of region in India. A pioneer of
current enlisting, HCL has various firsts amazingly including the
presentation of the 8-bit microchip based PC in 1978 well before its
overall partners.

HCL's development courses of action cover the entire cluster of


organizations that fuse structure organization, application
progression, BPO and advancement scattering. Another hopeful in
social protection, HCL hopes to give innovative helpful
organizations, things and planning to deal with the creating interest
for quality therapeutic administrations in India. HCL Avitas,
regarding Johns Hopkins Medicine International, is the human
administrations movement arm of HCL Healthcare. HCL Talent Care
is envisioned as a consolidated capacity game plans association
keeping an eye all in all scope of employability needs in India.

HCL (Hindustan Computers Limited) Technologies Limited is an


Indian overall IT organizations association headquartered in Noida,
Uttar Pradesh. It offers organizations including programming
directing, endeavor change, remote establishment organization,
building and R&D organizations, and business strategy outsourcing
(BPO).

HCL has working environments in 31 countries to give advantages


across over industry verticals, including avionics & shield,
essentialness & utilities, independent programming traders,
creating, capable organizations, servers & limit, auto, cash related
organizations, mechanical amassing, media & preoccupation, retail
& buyer, telecom, customer devices, government, life sciences &
human administrations, remedial devices, semiconductors, and
travel, transportation & logistics.

OBJECTIVE

The objective of this project is simple. We aim at finding out the ratios of past three years. The ratio
includes of Profitability ratios, Liquidity ratios, Capital structure analysis ratio, Activity analysis
ratio, and so on. Once all these ratios are found out for all the three years. We compare them with each
other. By doing this we can tell whether the company is in profit or loss. We can make statements whether
the company is doing good or not. We can answer all such question i.e. is the company growing, Do
we need to make any amendments. It helps the customers, stakeholders, investors. All these people can
see whether the company is in profit or loss. This helps them in taking any decision in reference to the
company. Every companys financial report should be disclosed. And if we compare them with the
previous years, its more appropriate. It even helps the company as the comparison can be helpful for
them. They can judge whether they have to make any changes. This is the main objective of this study.
That is to find out all the ratios and compare them with the previous year. This is important because it
gives a clear picture of what is the companys financial position is. And according to that the
company takes further decisions. It is easy and more convenient for all, i.e. the customers, the
stakeholders, and the shareholders. So, this is the main objective. We can state our aim according to the
financial statements and the comparison. Our aim should be appropriate. It is very necessary for a
company to compare its financial positions. Our aim is to provide the customers and the stakeholders with
the comparison for them to take decision accordingly. It helps to know the areas which need more
attention, areas that need improvement, to provide deeper analysis of profitability, liquidity, solvency and
efficiency of business. If properly done, improves the users understanding with which the business is
being conducted.

FINANCIAL TOOLS AND TECHNIQUES

Many financial ratios are being used to evaluate the companys financial
statements. All the ratios help us in analyzing the companys current profit and
losses, sales, purchases as well as past profit and losses, sales and purchases. The
following ratios are being used here.
(1)LIQUIDITY RATIO:
Liquidity ratio is calculated to measure the liquidity of the business. It means
the solvency of the business. They are analyzed by the current assets and
liabilities in the balance sheet. This ratio includes another two ratios. These are
as follows:
(a.) Current ratio- Current ratio is the proportion of current assets to the current
liabilities. It is shown as,
Current assets
----------------------Current liabilities
Current assets includes short term investments, cash, cash equivalents, stock, trade
receivables etc and current liabilities includes short term borrowings, trade

payables etc. The excess of current assets over current liabilities provide a safety
margin.
(b) Quick ratio-It is the ratio of liquid assets to current liabilities. It is calculated
as,
Quick Assets
---------------------Current liabilities

Quick assets are those assets which can be converted into cash very easily. This
ratio concentrates upon the capacity of the business to meet its short term
obligations without any flaws. The ideal ratio is 1:1. Lower ratio is risky and
higher ratio is unnecessary deployment of resources.

(2) SOLVENCY RATIO:


Solvency ratio tells us the ability of the company to service its debt in long term.
The following ratio comes under solvency ratio.
- Debt Equity Ratio
- Interest Coverage Ratio
- Debt to Capital Employed Ratio
- Proprietary Ratio
- Total Assets to Debt Ratio

(a)Debt Equity Ratio-This ratio measures the relationship between the long term
debts and equity. The ratio is as follows.
Long term debts
----------------------Shareholders fund
Where,
*Shareholders fund = Share capital + reserve and surplus +
against share warrants

Money received

(b) Debt to Capital Employed-It is the ratio of long term debts to the total external
and internal funds. It is shown as follows:
Debt
-------------------------------Shareholders equity + debt

(c) Proprietary ratio-It shows the relationship of shareholders fund to net assets
and is calculated as:
Shareholders fund
--------------------------------------Net assets or capital employed

(d)Total Assets to Debt ratio-This ratio measures the extent of the coverage of long
term debts by assets. It is calculated as:
Total assets

-------------------Long term debts


(e) Interest Coverage ratio- It is the ratio which deals with the servicing of interest
of loan. It measures the interest paid on long term debts. It reveals the number of
times interest on long term debts is covered by the profit available. It is calculated
as follows:
Net profit before interest and tax
-------------------------------------------Interest on long term debts
(3) Activity Turnover Ratio-This ratio measures the speed at which, the activities
are being performed. This ratio tells us about the number of times the assets
employed are being turned into sales during an accounting period. Higher
turnover means that better utilization of assets and signifies improved efficiency
and profitability. There are four sub ratios in this.
-Inventory Turnover
-Trade Receivable Turnover
-Trade Payable Turnover
Net Assets Turnover

(a)Inventory Turnover ratio-It tells us on an average the number of times the


inventory is converted into revenue from operations during an accounting
period. It determines the number of times stock (inventory) is purchased during a
year. It is calculated as follows:
Cost from revenue from operations
-----------------------------------------------

Average inventory
(b)Trade receivable turnover ratio-It explains the relation between the credit
revenue from operations and trade receivables. This ratio has emphasis on the
number of times the receivables have turned over and converted into cash in an
accounting period. It is calculated as follows:
Net credit revenue from operations
----------------------------------------------Average trade receivables
where, Average trade receivables = Opening debtor + Closing debtors/2
(c)Trade payable turnover ratio-This ratio indicates the pattern of payment of
trade payables. This ratio is related to credit purchases and average trade
payables. Lower ratio means the credit allowed by the supplier is low.
Net purchases
-----------------------------Average trade payable
Average trade payable= Opening creditors + closing creditors /2

(d)Net Assets turnover ratio-It is associated with the revenue from operations and
net assets. Higher the ratio means higher profitability and better activity. It
basically means better utilization of resources
Revenue from operations
-------------------------------------Capital employed

(4) Profitability Ratio-The profitability is basically summarized in the profit and


loss account. It is calculated to know the earning capacity of the firm. Under
this, there are many more ratios which are used to analyse the profit and efficiency
of the business.
-Gross Profit Ratio
-Net Profit Ratio
-Operating Ratio
-Operating Profit Ratio
(a)Gross profit ratio-It tells us about the gross margin on the product sold. Low
ratio indicates unfavorable sales.
Gross profit*100
----------------------------------Net Revenue of operations

(B)Net Profit ratio-It is basically related to the concept of profit. It measures the
overall efficiency of the business.
Net profit*100
----------------------------------Revenue from operations

(c)Operating Ratio-It is the relationship between the cost of operation and revenue
from operations. It includes all the expenses like selling, administrative, office etc.
(Cost of revenue from operations + operating expenses)*100
-------------------------------------------------------------------------------------

Net revenue from operations


(d)Operating Profit ratio-It is calculated to reveal operating margin of the business.
It is very useful for inter firms and intra firms comparisons. Lower the ratio means
good and healthy firm.
Operating profit*100
-------------------------------Revenue from operations
Where,Operating profit = Revenue from operations Operating cost

(e) Return on Investment-This ratio tells us about the overall utilization of funds of
a firm. It measures the returns in the business. It examines the efficiency of the
business.
Profit before Interest and Tax*100
---------------------------------------------Capital Employed

RATIO ANALYSIS OF HCL TECHNOLOGIES (2011-2014)

LIQUIDITY RATIOS

CURRENT RATIO
Current Ratio = Current Assets / Current Liabilities
Current Assets= Current Investments + Inventories + Trade Receivables + Cash &
Cash Equivalents + Short term loans & advances + Other current assets
Current Liabilities=Short term borrowings + Trade Payables + Other Current
Liabilities + Short Term Provisions

YEARS

2012

2013

2014

Current Assets

4678.71

8633.76

14006.52

Current Liabilities

3231.99

4586.03

5343.08

Current Ratio

1.44:1

1.88:1

2.62:1

LIQUID RATIO / QUICK RATIO / ACID TEST RATIO

Liquid Ratio = Liquid or quick assets / Quick Liabilities


Liquid Assets = All current assets excluding inventories and prepaid expenses.
Liquid Liabilities = All current liabilities excluding bank overdraft.

YEARS

2012

2013

2014

Liquid Assets

4578.72

8551.92

13990.98

Liquid Liabilities

3231.99

4586.03

5343.08

Liquid Ratio

1.41:1

1.86:1

2.61:1

SOLVENCY RATIOS

DEBT EUITY RATIO


Debt Equity Ratio = Debt/ Equity OR Long Term Debts / Shareholders Fund
Debt = Long term borrowings + long term provisions
Equity = Share capital + Reserves & surplus

YEARS

2012

2013

2014

Debt

688.83

698.64

202.73

Equity

6603.81

10232.73

15745.61

Debt equity ratio

0.10:1

0.068:1

0.012:1

TOTAL ASSET TO DEBT RATIO

Total asset to debt ratio = Total asset / Debt


Total Asset = Current assets + Non current assets
Debt = Long term borrowings + long term provisions

YEARS

2012

2013

2014

Total assets

10877.03

15959.33

21814.50

Debt

688.83

698.64

202.73

Total assets to debt 15.7:1


ratio

22.8:1

107.6:1

PROPRIETARY RATIO

Proprietary ratio = Proprietors funds / Total assets


Proprietors funds = Shareholders funds ( Share capital + reserve & surplus)
Total assets =Current assets + non current assets

YEARS

2012

2013

2014

Proprietors funds

6603.81

10232.73

15745.61

Toatal assets

10877.03

15959.33

21314.5

Proprietary ratio

0.607:1

0.64:1

0.72:1

ACTIVITY OR TURNOVER RATIOS

TRADE RECEIVABLES TURNOVER RATIO


Trade receivables turnover ratio = Credit revenue from operations / Average trade
receivables
Credit revenue from operations = Revenue from operations
operations

Cash revenue from

Average trade receivables = Opening trade receivables + Closing trade


receivables /2

YEARS

2012

Credit revenue from 8907.22


operations

2013

2014

12517.82

16497.37

Average
receivables

trade 1824.84

Trade
receivables 4.88:1
turnover ratio

2350.81

2966.7

5.32:1

5.56:1

TRADE PAYABLES TURNOVER RATIO

Trade payables turnover ratio = Net Credit Purchases / Average Trade Payables
Trade payables = Trade creditors + Bills payables
Average trade payable = opening trade payables + closing trade payables / 2

YEARS

2012

2013

2014

Net credit purchases

8907.22

12517.82

16497.37

Average
payables

trade 1446.72

Trade
payables 6.15:1
turnover ratio

4047.73

8663.44

3.09:1

1.09:1

WORKING CAPITAL TURNOVER RATIO

Working capital turnover ratio = Revenue from operations / Working capital


Working capital = Current assets - Current liabilities

YEARS
Revenue
operations

Working capital

2012

2013

2014

from 329,103

345,518

403,684

121,486

122,602

177,190

Working
capital 2.70:1
turnover ratio

2.8:1

2.27:1

PROFITABILITY RATIOS

GROSS PROFIT RATIO


Gross Profit Ratio = (GrossProfit*100) / Revenue from operations
Gross profit = Revenue from operations Cost of revenue from operations

YEARS

2012

2013

2014

Gross profit

10226.39

10627.51

15347.9

Revenue
operations

from 8907.22

Gross profit ratio

1.14:1

12517.82

16497.37

1.84:1

1.93:1

NET PROFIT RATIO

Net Profit Ratio = ( Net profit*100) / Revenue from operations


Net Profit = Gross profit + other incomes indirect expenses tax

YEARS

2012

2013

2014

Net profit

2360.74

4451.20

7397.66

Revenue
operations

Net profit ratio

from 8907.22

1.26:1

12517.82

16497.37

1.35:1

1.44:1

GRAPHICAL REPRESENTATION OF THE RATIOS

1. CURRENT RATIO

2.5

1.5
2012
2013
1

2014

0.5

0
Current ratio

2. QUICK RATIO / ACID TEST RATIO

2.5

1.5
2012
2013
1

2014

0.5

0
Quick Ratio

3) DEBT EQUITY RATIO

0.05
0.04
0.04
0.03
0.03

2012
2013

0.02

2014

0.02
0.01
0.01
0
Debt equity ratio

4) TOTAL ASSET TO DEBT RATIO

160
140
120
100
2012

80

2013
2014

60
40
20
0
Total asset to debt ratio

5) PROPRIETARY RATIO

0.8
0.7
0.6
0.5
2012

0.4

2013
2014

0.3
0.2
0.1
0
proprietary ratio

6) TRADE RECEIVABLES TURNOVER RATIO

5
4.5
4
3.5
3
2012

2.5

2013

2014

1.5
1
0.5
0
Trade receivables turnover ratio

7) TRADE PAYABLES TURNOVER RATIO

0.8
0.7
0.6
0.5
2012

0.4

2013
2014

0.3
0.2
0.1
0
Trade payables turnover ratio

8) WORKING CAPITAL TURNOVER RATIO

3
2.5
2
2012

1.5

2013
2014

1
0.5
0
Working capital turnover ratio

9) GROSS PROFIT RATIO

25

20

15
2012
2013
10

2014

0
Gross profit ratio

10) NET PROFIT RATIO

25

20

15
2012
2013
10

2014

0
Net profit ratio

CONCLUSION

The forward-looking announcements contained in this identify with HCL's feelings


regarding future events, a huge bit of which are by their slant, inherently
questionable and outside Wipro's control. Such clarifications consolidate, yet are
definitely not limited to, decrees regarding HCL's advancement prospects, its
future cash related working results, and its game plans, cravings and points. Wipro
alarms perusers that the forward-looking declarations contained in this manner are
subject to threats and insecurities that could achieve genuine results to fluctuate
physically from the results anticipated by such announcements. Such threats and
vulnerabilities join, however are not confined to, risks and dangers concerning in
our pay, pay and advantages, our ability to deliver and direct improvement,
phenomenal competition in IT advantages, our ability to keep up our cost good
position, pay augments in India, our ability to draw in and hold significantly skilled
specialists, time and cost attacks on settled worth, changed course of events
contracts, client center, restrictions on movement, our ability to manage our overall
operations, diminished enthusiasm for advancement in our key focus zones,
unsettling influences in telecom sorts out, our ability to successfully complete and
consolidate potential acquisitions, hazard for damages on our organization gets, the
accomplishment of the associations in which we make key theories, withdrawal of
money related authoritative propelling powers, political feebleness, war, true blue
controls on raising capital or picking up associations outside India, unapproved
usage of our ensured advancement, and general budgetary conditions affecting our
business and industry. Additional threats that could impact our future working
results are more totally delineated in our filings with the United States Securities
and Exchange Commission, including, however not confined to, Annual Reports
on Form 20-F.

REFERENCES

1) HCL Technologies.
2) S.N. Maheshwari
3) Wikipedia