CHAPTER 1:

INTRODUCTION
OBJECTIVES OF THE PROJECT.
METHODS USE FOR THE PREPARATION OF PROJECT.
LIMITATIONS OF THE PROJECT.

CHAPTER 2: THEORATICAL ASPECT OF STUDY..

CHAPTER 3: COMPAIRATIVE STATEMENT& ITS INTERPRETATION.
COMMONSIZE STATEMENT& ITS INTERPRETATION.
CASHFLOW STATEMENT & ITS INTERPRETATION.
CHAPTER 4: CONCLUSION
BIBLIOGRAPHY

 INTRODUCTION
OBJECTIVES
METHODS
LIMITATIONS

INTRODUCTION
Financial statement is a collection of data organized according to logical
& consistent accounting procedures. Its purpose is to convey an understanding
of some financial aspects of a business firm. The term financial analysis, also
known as analysis and interpretation of financial statements refers to the process
of determining financial strength & weakness of the firm by establishing
strategic relationship between the items of the balance sheet, profit & loss
account and other operative data.
Infosys Established in 1981, Infosys is a NASDAQ listed global
consulting and IT services company with more than 145,000 employees. From a
capital of US$ 250, we have grown to become a US$ 6.825 billion (LTM Q3FY12 revenues) company with a market capitalization of approximately US$ 30
billion.
In our journey of over 29 years, we have catalyzed some of the major changes
that have led to India's emergence as the global destination for software services
talent. We pioneered the Global Delivery Model and became the first IT company
from India to be listed on NASDAQ. Our employee stock options program created
some of India's first salaried millionaires.

OBJECTIVES
To study the financial results of INFOSYS.
To know the financial solvency of the company.
To make comparative study with other year.
To know the capacity of payment of dividend &interest.
To know the managerial capacity.
To know the financial strengths &weakness of the company.
To know the profitability of the company in the form of ratios.

LIMITATIONS
It is only a study of interim reports.
Financial analysis is based upon only monetary information
& non-monetary factors are ignored.
It doesnt consider changes in price levels.
As the financial statements are prepared on the basis of
going concern concept, it doesnt give exact position.
Changes in accounting procedures by a firm may often make
financial analysis misleading.
Analysis is only a means & not an end in itself.

METHODS TO BE USED
The datas should be derived from the secondary source due to lack of time.
The figures given in financial statement are not of much use to the decision
maker. These figures are to be analyzed over a period of time or in relation to
other figures, so that significant conclusions could be drawn regarding the
strengths and witness of a business enterprise. The tools of financial analysis
help in this regard. The analysis and interpretation of financial statement is used
to determine the financial position & results of operation as well. The numbers
of devices or tools are used to study the relationship between different
statements. An effort is made to use the devices to which clearly analyze the
position of the enterprise. The tools or devices are:
1) Comparative statement.

6)Fund flow statement

2) Common size statement.

7)Cost volume profit analysis

3) Ratio analysis.
4) Trend analysis.
5) Cash flow statement.

THEORATICAL ASPECT OF STUDY

COMPARATIVE STAEMENT
COMMONSIZE STATEMENT
RATIO ANALYSIS
CASHFLOW STATEMENT

THEORATICAL ASPECT OF STUDY

INTRODUCTION
Financial statement is a collection of data organized according to
logical & consistent accounting procedures. Its purpose is to convey an
understanding of some financial aspects of a business firm.
Financial analysis is the process of identifying the financial strengths &
weaknesses of the firm by properly establishing relationship between the items
of the balance sheet & the profit & loss account. There are various methods or
techniques used in analyzing financial statements, such as comparative
statements, trend analysis, common-size statements, schedule of changes in
working capital, funds flow and cash flow analysis, cost-volume profit analysis
& ratio analysis.
The term financial analysis, also known as analysis and interpretation of
financial statements refers to the process of determining financial strength &
weakness of the firm by establishing strategic relationship between the items of
the balance sheet, profit & loss account and other operative data.In this project
we show or discuss:
A. Comparative statement.
B. Common size statement.
C. Ratio analysis.
D. Cash flow statement.
A. COMPARATIVE STATEMENT
The comparative financial statement shows the financial position at
different periods of times. The elements of financial position are shown in a
comparative form so as to give an idea of financial position at two or more
periods. Any statement prepared in a comparative form will be covered in
comparative statement. From practical point of view, generally, two financial
statements (balance sheet & income statement) are prepared in comparative
form for financial analysis purpose. Not only the comparison of the figures of
two periods but also the relationship between balance sheet & income statement

enables an depth study of financial position & operating results. The

comparative statements are of 2 types, such as;
a)

Comparative balance sheet.

b)

Comparative income statement.

a) Comparative balance sheet:

The comparative balance sheet analysis is the study of the trend of the same
items, group of items & computed items in two or more balance sheets of the
same business enterprise on different dates. The changes in periodic balance
sheet items reflect the conduct of a business. The changes can observed by
comparison of the balance sheet at the beginning and at the end of the period &
these changes can help in forming an opinion about the progress of an
enterprise. The comparative balance sheet has two columns for the data of
original balance sheet. A third column is used to show increase or decrease in
figures. The fourth column may be added for giving percentages of increase or
decrease.

b) Comparative Income Statement:

The comparative income statement gives the result of the operations of a
business. The comparative income statement gives the idea of the progress of a
business over a period of time. The change in absolute data in money values &
percentages can be determined to analyze the profitability of the business. Like
of a business over a period of time. Like comparative balance sheet, income
statement also has four columns. First two columns give figures of various items
for two years. Third &fourth columns are used to show increase or decrease in
figures in absolute amounts &percentages respectively.

B. COMMONSIZE STATEMENT
The common size statements, balance sheet & income statements are
shown in analytical percentages. The figures are shown as percentages of total
assets, total liabilities &total sales. The total assets are taken as 100 & different
assets are expressed as a percentage of the total, similarly various liabilities are
taken as a part of total liabilities. These installments are also known as
component percentage or 100 percent statements because every individuals
item is stated as a percentage of total 100. The short comings in comparative
statements &trend percentages where changes in items could not be compared
with the totals have been covered up. The common size statement is up two
types such as:a. Common size balance sheet.
b. Common size income statement.

a)

Common size Balance Sheet:

A statement in which balance sheet items are expressed as the ratio of
each expressed as the ration of each asset to total assets & ratio of each liability
is expressed as a ratio of total liabilities is called common size statement.

b) Common size Income Statement:

The items in income statement can be shown as percentages of sales to
show the relation of each item to sales. A significant relationship can be
established between items of income statement & volume of sales. The increase
in sales suddenly increases selling expenses & not administrative or financial
expenses. In case the volume of the sales increase to a considerable extent,
administrative & financial expense may go up. In case the sales are declining,
the selling expense should be reduced at once. So a relationship establishes
between sales & other items in income statement & this relationship is helpful in
evaluating operational activities of the enterprise.

C. RATIO ANALYSIS
Ratio analysis is a technique of analysis & interpretation of financial
statements. It is the process of establishment & interpreting various ratios for
helping in making certain decisions. However, ratio analysis is not an end in
itself. It is only a means of better understandings of financial strength &
weakness of a firm calculation of mere ratios does not serve any purpose, unless
several appropriate ratios are analyzed & interpreted. There are a number of
ratios which can be calculated from the information given in the financial
statement of INFOSYS BPO.

D. CASH FLOW STATEMENT

Cash flow statement is a statement which describes the cash
inflows & outflows of cash & various cash equivalents in an enterprise during a
specified period of time. Such statements enumerate net effects of various
business transactions on cash & its equivalents & take into account receipt &
disbursements of cash. Cash flow statement summaries the causes of changes in
cash position of a business enterprise between dates of two balance sheets.
According to AS-3 an enterprise is bound to prepare & submit cash flow
statement.

 COMPARATIVE STAEMENT & ITS

INTERPRETATION
COMMONSIZE STATEMENT & ITS
INTERPRETATION
CASHFLOW STATEMENT & ITS INTERPRETATION

COMPARATIVE BALANCE SHEET OF INFOSYS

For the year ended 31st march 2010 & 2011

Particulars

LIABILITIES:SHARE HOLDERS
FUND
RESERVE & SURPLUS
TOTAL LIABILITIES
ASSETS:FIXED ASSET
ORIGINAL COST
LESS: ACCUMULATED
DEPRICIATION
NET BOOK VALUE

Year ending 31st

march
2010
2011
(In
(In
crores)
crores)

Increase/
decrease
(In crores)

Increase/
decrease
(In %)

338277510

338277510

NIL

NIL

9019268645

110676293
47
11405906
857

2048360702

22.71%

204836070
2

21.88%

405902975
4
225959241
0
179943734
4
247140056
204657740
0
340855887
8
236494783

161663600

4.15%

450872569

24.93%

-289208969

-13.84%

242421449
46787520

5137.56%
2.23%

1896043028
70018320

-35.74%

215541978
7
533533664
6
270912538
2
10199881
816

325813411

17.81%

3237604676

154.34%

768879296

39.63%

433229738
3

73.83%

416627700
9

315107516

8.18%

935754615
5
3897366154
1808719841
2088646313

CAPITAL W-I-P
TOTAL FIXED ASSET

4718607
2093364920

INVESTMENTS

5304601906

DEFFERED TAX
ASSETS
CURRENT
ASSETS,LOANS &
ADVANCES:SUNDRY DEBTRORS

166476463

CASH & BANK

BALANCE
LOANS & ADVANCES

2097731970

TOTAL CURREENT
ASSETS &
LIABILITIES
LESS :-CURRENT
LIABILITIES &
PROVISIONS
CURRENT LIABILITIES

586758443
3

1829606376

1940246087

3851169493

42.06%

PROVISIONS
NET CURRNT
ASSET
TOTAL ASSET

223312074
179310286
6
935754615
5

319329011
57142757
96
11405906
857

96016937
392117293
0
204836070
2

42.99%
218.685
%
21.88%

Interpretation 1:-

a) 1.The comparative balance sheet of the company reveals that during 2011
there has been an increase in fixed assets of Rs.161663600crores
i.e.4.15%,& equity are capital has remained same in both the years. The
company has not taken any loans, advances, secured loans from outside. The
fact depicts that the fixed assets disposed off during the year were not
substantial, & therefore, do not affecting the going concern concept.
b) The current assets have increased by Rs.3921172930 i.e.218.68% & cash as
increased by Rs.3237604676crores. This further confirms that the company
has raised long term finances even for the current assets resulting into an
improvement in the liquidity position of the company.
c) Reserve & surpluses have increased from Rs.9,10,92,68,645crores
to11,06,76,29,347crores i.e.22.71% which shows that the INFOSYS
company has utilized reserve & surpluses for the payment of dividends to
shareholders either in cash or by issue of bonus shares.
d) The overall financial position of the Infosys Company is satisfactory.

COMPARATIVE INCOME STATEMENT OF INFOSYS

For the year ended 31st march 2010 & 2011
PARTI CULARS

NET SALES

Year ending 31st

march
2010
2011
(In crores)
112663702
26

(In crores)
112911479
09

Increase/

Increase/

decrease

decrease

(In crores)

(In %)

24777683

0.22%

LESS:
COST OF GOODS SOLD

601574734
4
525062288
2

66774860
31
46136618
78

66173865 11.00%
9
-12.13%
63696100
4

784259246

955864706

125446278
0
321190085
6

138796978
0
226982802
2

DEPRITIATION
OPERATING PROFIT AFTER
DEPRITIATION

538679767
267322108
9

507455954
176237206
8

OTHER INCOME

258145382

444593206

IMPAIRMENT FOR INVESTEES

PROFIT BEFORE TAX

NIL
62166191
293136647 21447990
1
83

PROVISION FOR TAXATION

NET PROFIT

193234404
96438381
273813206 20483607
7
02

17160548
0
13350700
0
94207283
4
-31223813
91084902
1
18644782
4
NIL
78656738
8
-96796023
68977136
5

GROSS PROFIT

LESS: OPERATING EXP.

SELLING & MARKETING
EXPENSES
GENERAL & ADMINISTRATIVE
EXP
OPERATING PROFIT BEFORE
DEPRITIATION

21.88%
10.64%

-5.79%
-34.07%

72.25%
NIL
-26.83%

-50.09%
-25.19%

INTERPRETATION 2:a) The comparative income statement given above reveals that in net sales of

0.22% while the cost of goods sold has increased nearly by 11.00% but the
gross profit decreased of 12.13%.
b) Although the operating expenses have increased by 34.66% the increase in

gross profit is not sufficient to compensate for the increase in operating

expense &hence there has been an overall increase in operational profit
Rs.259.40 crores i.e.4.72% in spite of an decrease in financial expense of
Rs.49.80 million for interest for interest & income tax Rs.71 million.
c) There is an decrease in net profit after tax amounting to Rs.54.3 million i.e.

1.11%.
d) It may be included that there is a sufficient process in the INFOSYS

COMPANY and the overall profitability of the company is not very good
because the company is not incurred much profit as compared to 2009-10.

COMMON SIZE BALANCE SHEET OF INFOSYS

FOR THE YEAR ENDED 31ST MARCH 2010&2011

31st march 2010

Particulars

LIABILITIES:SHARE HOLDERS FUND

RESERVE & SURPLUS
TOTAL LIABILITIES
ASSETS:FIXED ASSET ORIGINAL
COST
LESS: ACCUMULATED
DEPRICIATION
NET BOOK VALUE
CAPITAL W-I-P
TOTAL FIXED ASSET
INVESTMENTS
DEFFERED TAX ASSETS
CURRENT ASSETS,LOANS
& ADVANCES:SUNDRY DEBTRORS
CASH & BANK BALANCE
LOANS & ADVANCES

LESS :-CURRENT
LIABILITIES &
PROVISIONS
CURRENT LIABILITIES
PROVISIONS
NET CURRNT ASSET
TOTAL ASSET

31st march 2011

Amount in
Million

Percentage
(%)

Amount in
Million

Percentage
(%)

33,82,77,51
0
9,01,92,68,
45
9,35,75,46
,155

3.62%

33,82,77,510

2.975%

96.38%

11,06,76,29,
347
11,40,59,06
,857

97.03%

3,89,73,66,
154
1,80,87,19,
841
2,08,86,46,
313
47,18,607
2,09,33,64
,920
5,30,46,01,
906
16,64,76,46
3

41.64%

4,05,90,29,7
54
2,25,95,92,4
10
1,79,94,37,3
44
24,71,40,056
2,04,65,77,
400
3,40,85,58,8
78
23,64,94,783

35.58%

1,82,96,06,
376
20,97,73,97
0
1,94,02,46,
087
5,86,75,84,
433

19.55%

2,15,54,19,7
87
5,33,53,36,6
46
27,09,12,53,
82
10,19,98,81,
816

18.89%

3,85,11,69,
493
22,33,12,07
4
1,79,31,02
,866
9,35,75,46
,155

41.15%

41,66,27,70,
09
31,93,29,011

36.53%

5,71,42,75,
796
11,40,59,06
,857

50.09%

100%

19.33%
22.32%
0.050%
22.37%
56.68%
1.77%

22.42%
20.73%
62.71%

2.38%
19.16%
100%

100%

19.81%
15.77%
2.16%
17.94%
29.88%
2.07%

46.77%
23.75%
89.43%

2.80%

100%

INTERPRETATION 3:-

a) Share holders of the company will decrease in percentage but the share
amount will remain same.
b) There was a increase in reserve & surplus of the company in 2011 as
compared to 2010 i.e. 96.38% to 97.03%
c) In 2010 out of total assets the percentage of current asset was 19.16% &
percentage of fixed assets is 22.37%. In 2011 out of total assets the
percentage of current asset was 50.09% & percentage of fixed assets is
17.34%. This implies the current assets has increase in 2011as compared to
2010 & also the percentage of fixed assets will decrease in 2011 as
compared to 2010.
d) In 2010 the current liabilities was 41.5% but in 2011 it has brought down to
36.53%. There was a slight increase in provisions of the company
i.e.2.38%in 2010 to 2.80% in 2011.

COMMON SIZE INCOME STATEMENT OF INFOSYS

FOR THE YEAR ENDED 31ST MARCH 2010&2011
31st march 2010
PARTICULARS

Amount
(in Crores)

NET SALES
LESS:
COST OF GOODS SOLD

11,26,63,70
,226
6,01,57,47,
344

Percentag
e
(%)
100%

53.39%

31st march 2011

Amount
(in Crores)
11,29,11,4
7,909
6,67,74,86,
031

Percentag
e
(%)
100%

59.14%

GROSS PROFIT

5,25,06,22,
882

46.61%

4,61,36,61,
878

40.86%

7,84,25,92,4
6
1,25,44,62,7
80

6.96%

95,58,64,70
6
1,38,79,69,7
80

8.46%

2,03,87,22,
046
3,21,19,00,
856
53,86,79,767

1.81%

20.78%

OPERATING PROFIT
AFTER DEPRITIATION
OTHER INCOME

2,67,32,21,
089
25,81,45,382

23.73%

IMPAIRMENT FOR
INVESTEES
PROFIT BEFORE TAX

NIL

NIL

2,34,38,34,
486
22,6,98,28,
022
50,74,55,95
4
1,76,23,72,
068
44,45,93,20
6
6,21,66,191

2,93,13,66,
471
19,32,34,404

26.02%

2,14,47,99,
083
9,64,38,381

18.99%

2,73,81,32,
067

24.30%

2,04,83,60,
702

18.14%

LESS: OPERATING EXP.

SELLING & MARKETING
EXPENSES
GENERAL &
ADMINISTRATIVE
EXPENSES
TOTAL OPERATING
EXPENSE
OPERATING PROFIT
BEFORE DEPRITIATION
DEPRITIATION

PROVISION FOR
TAXATION
NET PROFIT

11.13%

28.51%
4.78%

2.29%

1.72%

12.29%

20.10%
4.49%
15.60%
3.93%
0.55%

0.85%

INTERPRETATION 4:

a) The sales have increased but the gross profit has decreased in absolute figures
in2011 as compared to 2010. The percentage of the gross profit to sales has
also decreased from 46.61% to 40.86%.
b) The percentage of cost of sales has increased in 2010 as compared to 2011
i.e.53.39% to59.14%.
c) The non-operating expenses have remained about the same in both the years
but operating expense has increase in 2011 as compared to 2010.
d) A slight decrease in operating expense in 2011 causes decrease in profitability.

e) The overall profitability of INFOSYS has decreased in 2011 which is not a

good sign for the company.

CONCLUSION

 BIBLIOGRAPHY

CONCLUSION
In some, while the better shopper and retail understanding, break
through concepts, superior value & innovation, are helping the company win in the
market place at the first moment of truth.
We may feel what we are doing is just a drop in the ocean. But if that drop
was not in the ocean, the ocean will be less because of the missing drop
The company yet again sealed new peaks in the fiscal year 2009-2010 &
2010-2011. Total sales grew by 0.22% i.e.24777683crores. The gross profit has
decreased from 33.23% to 32.73% so the net profit also decreased from 21.36%
to18.42%. This signifies that the overall profitability of INFOSYS has decreased as
compare to previous year. The profit is not a good indication for the company. The
companys fixed assets also increased. The current ratio has increased as computed
to previous year & the solvency ratio of the company is very good, which is better
for the company, so for the long run of the company is concerned. The board of
directors taken good & better steps, so that the net profit of the company increased.
The prepare co-ordination between employee & employer increased the
profitability of the concern.
The general public is also take interest to join INFOSYS BPO as well as
invest their capital towards this company.

BIBLIOGRAPHY
NEWS PAPERS
The Economic Times
The Business Standard
The Times Of India

BOOKS
GUPTA SASHI K. & SHARMA R.K Management Accounting, Third
Edition -2008, KALYANI PUBLISHERS
GUPTA SASHI K. & ARUN MEHRA Financial statement Analysis &
Reporting, Third Edition-2008, KALYANI PUBLISHERS
GUPTA SASHI K. & SHARMA R.K Financial Management.

WEBSITES
www.google.com
www.INFOSYS.com