Ratio Analysis of Hcl Tech Essay

It provides softw ar-led IT solutions, hostile infrastructure c atomic number 18 and BPO services, foc apply mainly on transformational outsourcing. The company leverages its extensive offshore infrastructure and orbicular network of offices in 31 countries to deliver solutions across selected verticals including monetary services, retail and consumer, life sciences, aerospace, automotive, semiconductors, telecom, media publishing and entertainment. HCL takes haughtiness in its philosophy of Employees First, Customers Second which empowers their 84,403 employees to create a real value for the customers.HCL Technologies, along with its subsidiaries, had consolidated revenues of US$ 4. 5 billion, as on 31st March 2013. HCL Leadership team 2. Objectives of Study Development of industries depends on several factors such as fiscal, personnel, technology, quality of product and marketing. Financial cheeks assume a significant parting in determining the growth of industries. All the companys ope balancens virtually affect its motivating for cash. Most of these data covering ope proportionalityns area are however outside the direct debt instrument of the financial executives.The firm whose present ope dimensionns are inherently difficult should try to traces its financial outline to enable its management to stay on top of its working position. In this context I am undertaking financial ratio analysis of HCL Technologies to examine and understand financial performance of the company. Using ratio analysis this project will provide the insights of * The growth and development of HCL Technologies for last 5 years (FY 08-12) * The doings of liquidity and profitability of HCL Technologies * The factors determining the liquidity and profitability of HCL TechnologiesScope The scope of the study is limited to financial data published in the annual reports of the company every year. The analysis is done to suggest attainable solutions for financial growth of the o rganization. This study is carried out for 5 years (2008-2012). Also data provided by extraneous agencies are used for analysis of future predication. 3. Concept of Financial Statement & Ratio summary 2 3. 2 Financial StatementTo understand the cultivation contained in financial statements with a compute to know the specialisation or weaknesses of the organization, to make forecast about future prospects and thereby enabling the management and external parties to take different decisions regarding the operations. Fundamental analysis has a very broad scope. One aspect looks at the general (qualitative) factors of the company. The other side considers tangible and measurable factors (quantitative). This means crunching and analyzing numbers from the financial statements if used in conjunction with other methods, quantitative analysis can produce excellent results.Ratio abstract Ratio analysis is the method or process by which relationship/group of items in the financial state ment are computed, determined and presented. Ratio analysis is an attempt to derive quantitative measure or guides concerning the financial health and profitability of business enterprises. Ratio analysis can be used both in trend and static analysis. Purpose of several ratios depends on the objective of analysis. A financial ratio measures a companys performance in a specific area. For example, you could use a ratio of a companys debt to its equity to measure a companys gearing.By comparison the gearing ratios of two companies, you can determine which company uses greater debt per equity. You can use this information to make a judgment as to which company is better investment risk. However, you must be careful non to place too much importance on one ratio. You obtain better indication of the guardianship in which a company is moving when several ratios are taken as a group. Ratios are worked out to analyze the following aspects of an enterprise a. Solvency i. Long term ii. Short term iii. Immediate b. favorableness c. Operational Efficiency d. Credit standing e.Effective utilization of resources f. Investment Analysis 3. 4 consequence of Ratio Analysis in Financial Statement Ratio analysis is very important in revealing the financial position and soundness of the business so used by various parties * perplexity The group that has the most interest in financial statement analysis is management. Management needs to bring out cursorily any area of mismanagement so that corrective action can be quickly taken. It mainly helps in * Decision making Ratio analysis helps in making decision from the information provided in these financial Statements.Financial forecasting and planning Planning is looking ahead and the ratios calculated for a number of years a work as a guide for the future. * Communicating The financial strength and weakness of a firm are communicated in a more easy and understandable mien using ratios. * Co-ordination Better communication of ef ficiency and weakness of an enterprise result in better co-ordination in the enterprise * Control The weaknesses are otherwise, if any, come to the knowledge of the managerial, which helps, in effective control of the business. * Investors or ShareholdersInvestors are interested in financial statements to evaluate current earnings and to predict future earnings. Financial statements beguile greatly the price at which stock is bought and sold. * Lenders Bankers before granting loans usually require that financial statements be submitted. Whether or not a loan is do depends heavily on a companys financial condition and its prospects for the future. * Employees Employees are mainly concerned about the profitability. Their salaries and increments are dependent on the profit made by the company. * Government