A Project Report on

“A STUDY ON FINANCIAL RISK MANAGEMENT WITH

REFERENCE OF BHARTI AIRTEL PVT LTD”

By

MOHD RAZA AHMED

Hall-Ticket No: 1401-22-672-105
Submitted in partial fulfillment for the award of the Degree of
MASTER OF BUSINESS ADMINISTRATION

Offered by

Osmania University, Hyderabad -500007

Under the guidance of

MD RUKUNUDDIN SIDDIQUI
(Associate Professor)

AL-QURMOSHI INSTITUTE OF BUSINESS MANAGEMENT

Affiliated to Osmania University, Hyderabad -500005
2022-2024
 DECLARATION

I hereby declare that this Project Report titled “A STUDY ON

FINANCIAL RISK MANAGEMENT WITH REFERENCE OF

BHARTI AIRTEL PVT LTD”Submitted by me to the Department of

Business Management, O.U., Hyderabad, is a bonafide work

undertaken by me and it is not submitted to any other University or

Institution for the award of any degree diploma / certificate or

published any time before.

MOHD RAZA AHMED

Hall-ticket No: 1401-22-672-105

Place: Hyderabad.
 CERTIFICATE

This is to certify that the Project Report title “A STUDY ON

FINANCIAL RISK MANAGEMENT WITH REFERENCE OF
BHARTI AIRTEL PVT LTD” Submitted in partial fulfillment for the
award of MBA Programme of Department of Business Management,
O.U. Hyderabad, was carried out by MOHD RAZA AHMED under
my guidance. This has not been submitted to any other University or
Institution for the award of any degree/diploma/certificate.

Principal

Guide External Examiner

Managed by: Al-Qurmoshi Educational Society

# 18-11-26/7 Jamal Banda, Barkas, Hyderabad-500 005 Phone +91 (40) 24442443 +91
(40) 24443422 Website: [Link]
ABSTRACT:
Financial risk management plays a pivotal role in safeguarding organizational
stability and enhancing strategic decision-making amidst volatile economic
landscapes. This literature review explores the fundamental principles, strategies,
and empirical studies concerning financial risk management practices across
various industries. Beginning with an overview of different types of financial risks
—including market, credit, liquidity, and operational risks—the review delves into
theoretical frameworks such as Modern Portfolio Theory and Value at Risk (VaR),
elucidating their application in risk assessment and mitigation. Strategies like
hedging, derivatives, and diversification are examined through case studies,
highlighting their effectiveness in different organizational contexts. The review
also identifies industry-specific challenges and regulatory influences shaping
financial risk management practices. Moreover, it discusses emerging trends such
as the integration of AI and big data analytics, emphasizing their potential to
transform risk management frameworks. By synthesizing current literature, this
review offers insights into best practices, challenges, and future directions in
financial risk management, providing a foundation for further research and
practical application.

ACKNOWLEDGEMENT
A successful and satisfactory completion of my project is the
outcome of invaluable and aggregate contribution of personal
skill in the radical direction and the guidance of the concerned
Authorities. Even the best efforts are wasted without a proper
guidance and advice. The success of any project is the result of
hard work, dedication and the support of the well wishers. It is
our proud privilege to express our sincere gratitude to all those
who helped us directly or indirectly in completion of this project
report. We are greatly indebted to Associate Professor for his
support, guidance and valuable suggestions by which this work
has been completed effectively and efficiently. These all
contributions are of immense value.

Last but not least, we are indebted to those people who indirectly
contributed and without them this work would not have been
possible. Endeavour has been made to make the project error free
yet, we apologize for the mistakes.

(MOHD RAZA AHMED)

Table of Contents
CONTENTS PAGENUMBERS

List of Figures and Tables……………………………………………….i

List of Abbreviation & Glossary………………………….…………….ii

1. INTRODUCTION ………………………….………………….….1-18

2. REVIEW OF LITERATURE………………………………….…19-25

3. RESEARCH METHODOLOGY…………………………………26-33

4. DATA ANALYSIS AND FINDING…………………………….34-69

5. CONCLUSIONS, SUGGESTIONS AND RECOMMENDATIONS...

……………………………………………………………………….70-75

ANNEXURE ………………………………………………………..76-81

Bibliography……………………………………………………………82

References………………………………………………………………83

Questionnaire…………………………………………………………84-88
 CHAPTER-I
INTRODUCTION

1
Introduction
Financial Statement Analysis is the structural and logical way to present overall
financial performance of a financial institution. It also helps to evaluate and decision
making for business operation. It is used to analyze whether an entity is stable, solvent,
liquid or profitable enough to be invested in.
Financial Statement Analysis is a method used by interested parties such as investors,
creditors, and management to evaluate the past, current, and projected conditions and
performance of the firm. Ratio analysis is the most common form of financial analysis.
It provides relative measures of the firm's conditions and performance. Common Size
Financial Statement discloses the internal structure of the firm. It indicates the existing
relationship between sales and each income statement account. It shows the mix of
assets that produce income and the mix of the sources of capital, whether by current or
long-term debt or by equity funding. When using the financial ratios, a financial analyst
makes two types of comparisons.
Financial ratio analysis is an important topic and is covered in all mainstream corporate
finance textbooks. It is also a popular agenda item in investment club meetings. It is
widely used to summarize the information in a company's financial statements in
assessing its financial health. In today's information technology world, real time
financial data are readily available via the Internet. Performing financial ratio analysis
using publications, such as Robert Morris Associates’ Annual Statement Studies, Dun
& Bradstreet’s Key Business Ratios, Moody’s Manuals, Standard & Poor’s Corporation
Records, Value Line Investment Survey, etc., is no longer efficient. Since students and
investors now have easy access to on-line databases, the assignments on financial ratio
analysis can be modified accordingly to enhance learning.
In the current scenario where, financial instability is rife and financial intuitions are
becoming popular, when it comes to investing, the sound analysis of financial
statements is one of the most important elements in the fundamental analysis process.
At the same time, the massive amount of numbers in a company's financial statements
can be bewildering and intimidating to many investors. However, through financial
ratio analysis, we shall be able to work with these numbers in an organized fashion and
present them in a concise form easily understandable to both the management and
interested investors.

2
 BUSINESS PROCESS OF THE INDUSTRY

Telecommunication industry has been witnessing significant changes over the years with
evolving technology, demanding customers, continuous service improvement, mergers &
acquisitions (M&A) and many other challenges that affect their day-to-day operations.
Organizations must continuously and ways to optimize their business processes to
become more efficient and effective while keeping customers satisfied. Business Process
Optimization provides guidance on What, When and How to improve & eliminate
process inefficiencies, enhance operational performance and increase overall profit
margins. With the right partner, organizations can augment their existing business
processes and ensure those process changes will provide improvements to operations and
implement them effectively with minimal cost.

Indian mobile telephony market is increasing day by day and there is more to happen
with technological up gradations occurring nearly every day and the ever-increasing
demand for easier and faster connectivity, the mobile telephony market is expected to
race ahead…India has a fast-growing mobile services market with excellent potential for
the future. With almost five million subscribers amassed in less than two years of
operation, India's growth tempo has far exceeded that of numerous other markets, such as
China and Thailand, which have taken more than five years to reach the figures India
currently holds. +According to recent strategic research by Frost & Sullivan, Indian
Cellular Services Market, such growth rates can be greatly attributed to the drastically
falling price of mobile handsets, with price playing a fundamental role in Indian
subscriber requirements. Subscribers in certain regions can acquire the handset at almost
no cost, thanks to the mass-market stage these technologies have reached internationally.
The Indian consumer can buy a handset for $50 or less. This should lead to increased
subscribership. This market is growing at an extremely fast pace and so is the
competition between the mobile service providers. With the presence of a number of
mobile telephony services providers including market leaders like Airtel, Reliance, Idea
Cellular, Tata Indicom, Spice Communications etc who are providing either of the two
network technologies such as Global System for Mobile Communications (GSM) and
Code Division Multiple Access (CDMA). In cellular service there are two main
competing network technologies: Global System for Mobile Communications (GSM) and
Code Division Multiple Access (CDMA). Understanding the difference between GSM

3
and CDMA will allow the user to choose the preferable network technology for his
needs. Global System for Mobile Communications (GSM) is a new digital technology
developed by the European community to create a common mobile standard around the
world. It helps you achieve higher sell capacity and better speech quality and one can
enjoy crystal clear reception on one’s mobile phone. It automatically solves the problem
of eavesdropping on one’s calls.
Code Division Multiple Access (CDMA) describes a communication channel access
principle that employs spread spectrum technology and a special coding scheme (where
each transmitter is assigned a code). It is a spread spectrum signalling, since the
modulated coded signal has a much higher bandwidth than the data being communicated.
CDMA is the current name for mobile technology and is characterized by high capacity
and small cell radius. It has been used in many communication and navigation systems,
including the Global Positioning System and the Omnitracs satellite system for
transportation logistics. The Company’s wireless network runs on a GSM technology.
The mobile telephony services providers Airtel, Vodafone (Formerly Hutch), have been
competing aggressively for their market share with MTNL, Tata Indicom, Reliance and
Idea Cellular entering into the foray, this tussle has only become tougher. With major
market share in the hands of the likes of Reliance, Airtel, Vodafone (Formerly Hutch),
Idea Cellular the others have been finding it difficult to compete in the market.
The Telecom Regulatory Authority of India (TRAI) has been playing an important role in
keeping a watch on these existing players and bringing new environment as well as
policies and reforms for these Mobile Telephony Service Providers and permitting them
to provide mobile telephony services including permission to carry its own long-distance
traffic within their service area without seeking an additional license.

TRAI’s mission is to create and nurture conditions for the growth of telecommunications
including broadcasting and cable services in the country in a manner and at a pace which
will enable India to play a leading role in the emerging global information society. The
service providers are free to provide, in its service area of operation, all types of mobile
services including voice and non-voice messages, data services and PCO’s. The
Operators would be required to pay a one-time entry fee.

4
India is currently the world’s second-largest telecommunications market with a
subscriber base of 1.20 billion and has registered strong growth in the past decade and
half. The Indian mobile economy is growing rapidly and will contribute substantially to
India’s Gross Domestic Product (GDP), according to report prepared by GSM
Association (GSMA) in collaboration

With the Boston Consulting Group (BCG). The country is the fourth largest app economy
in the world.

The liberal and reformist policies of the Government of India have been instrumental
along with strong consumer demand in the rapid growth in the Indian telecom sector. The
government has enabled easy market access to telecom equipment and a fair and
proactive regulatory framework that has ensured availability of telecom services to
consumer at affordable prices. The deregulation of Foreign Direct Investment (FDI)
norms has made the sector one of the fastest growing and a top five employment
opportunity generator in the country.

MARKET DEMAND AND SUPPLY

India is currently the world’s second-largest telecommunications market with a

subscriber base of 1.20 billion and has registered strong growth in the last decade and a
half. The Indian mobile economy is growing rapidly and will contribute substantially to
India’s Gross Domestic Product (GDP) according to a report prepared by GSM
Association (GSMA) in collaboration with Boston Consulting Group (BCG). In 2019,
India surpassed the US to become the second- largest market in terms of the number of
app downloads.

India ranks as the world’s second largest market in terms of total internet users. The
number of internet subscribers in the country increased at a CAGR of 21.36% from FY16
to FY20 to reach 743.19 million in FY20. Total wireless data usage in India grew 11.01%
quarterly to reach 25,369,679 TB in Q1FY21.

India is also the world’s second-largest telecommunications market. The total subscriber
base in the country stood at 1,168.66 million with a tele-density of 86.22%, as of
September 30, 2020.
Gross revenue of the telecom sector stood at Rs. 66,858 crore (US$ 9.09 billion) in the

5
first quarter of FY21.

With daily increasing subscriber base, there have been a lot of investment and
development in the sector. FDI inflow into the telecom sector during April 2000 –
September 2020 totalled US$ 37.27 billion according to the data released by Department
for Promotion of Industry and Internal Trade (DPIIT).

Some of the developments in the recent past are:

 In December 2020, BSNL, in partnership with Skylotech India, announced

a breakthrough in satellite-based NB-IoT (Narrowband-Internet of Things)
for fishermen, farmers, construction, mining and logistics enterprises.
 In the first quarter of FY21, customer spending on telecom services
increased 16.6% y- o-y, with over three-fourths spent on data services. This
spike in consumer spending came despite of the COVID-19 disruption and
lack of access of offline recharges for a few weeks.
 India had over 500 million active internet users (accessed Internet in the last
one month) as of May 2020.

Revenue from the telecom equipment sector is expected to grow to US$ 26.38
billion by 2020. The number of internet subscribers in the country is expected to
double by 2021 to 829 million and overall IP traffic is expected to grow four-fold at
a CAGR of 30% by 2021. The Indian Government is planning to develop 100 smart
city projects, and IoT will play a vital role in developing these cities. The National
Digital Communications Policy 2018 envisaged attracting investment worth US$
100 billion in the telecommunications sector by 2022. App downloads in India is
expected to increase to 18.11 billion in 2018F and 37.21 billion in 2022F.

LEVEL AND TYPE OF COMPETITION

Early days of the telecom sector didn’t have many players because the government
was just nurturing and preparing the telecommunication ground for other players to
operate within the limits set by the authorities. Summing up, the economy
witnessed only a few players in the sector during its early days. While there was
not much of the competition, Indians were also slowly moving towards fixed-line
connections to broadband and mobile phone connections.

6
When India had Airtel, Vodafone, Idea, BSNL, MTNL, and others that offered a
range of services that was a bit costly (especially internet services), Reliance JIO
entered the telecom sector in India and was a massive disruptor. Users of Reliance
JIO not only enjoyed free unlimited calls (to any network), but they also surfed the
internet without being concerned about data limits. Internet was made free,
calling/texting was made free. The telecom sector in India witnessed a revolution.
While other players charged hefty amounts on recharges, Reliance JIO was the
most affordable of all.

Initially, telecom giants didn’t care much about it but slowly and gradually
problems emerged. Almost every telecom company started to lose its market share
to Reliance JIO. Telenor (formally known as Uninor) and others after realizing that
they will not be able to survive much, they exited the market.

Another major disruption happened when Vodafone and Idea both merged their
businesses in India. After losing their market share, and increasing debts, the 2 of
them joined hands and instead of competing against one another, they decided to
compete against Airtel and JIO.

After a series of disruptions, mergers and a number of telecom players exiting the
market, India now has 3 major players in the telecom sector, Vodafone Idea, Bharti
Airtel and Reliance JIO. Once the sector had more than 10 players is now operating
with just 3 players. In fact, Vodafone has expressed its concerns about repaying the
debts and clearly announced that after paying the outstanding amount against
Vodafone, it might not be able to operate and might exit the Indian market.
Vodafone, Idea and Bharti Airtel once reported recording-breaking user base has
now shrunk like a crushed paper ball and it seems impossible for them to compete
against Reliance JIO. After Vodafone being vulnerable, the risk of a duopoly in the
sector is higher than before according to analysts. In all, as many as 15 entities owe
the government INR 1.47 lakh crores in unpaid license fee and another INR 55,054
crore in outstanding spectrum usage charges.

7
Firms Operating in the Industry:

 JIO

 AIRTEL

 VODAFONE IDEA(VI)

 BSNL

Major Global Telecom Companies:

 AT&T

 VERIZON COMMUNICATIONS

 Nippon Telegraph and Telephone

 Deutsche Telekom

 Telefónica

PRICING STRATEGIES IN THE INDUSTRY

The major change in pricing strategy took place when Jio entered the Indian
telecom market. Jio entered the market offering free unlimited voice calls, messages
and data. They successfully penetrated the market within a year. However, their
zero-pricing strategy was declared predatory and anti-competitive. They were on
thin ice, where a single characterization of dominance demarcated them from being
penalized for anti-competitive behavior. This portrays the beginning of a new era
for Indian competition law, where a revolutionary pricing strategy was applied
which provided the consumers utopian incentives. TRAI amended the predatory
pricing rule which caused a disruption in the market, especially for the rivals of Jio.
It permitted Jio to continue with its low pricing but barred its rivals to reduce their
current prices to tackle competition. It reasoned that the rivals’ existing position
would cause abuse, whereas, Jio being a new entrant was inept to abuse (predation).
It also scrapped traffic volume as a parameter for establishing market power, which

8
gave absolute immunity to Jio, as it was experiencing huge growth in terms of
traffic volume. However, these changes were nullified by the sectoral appellate
tribunal, when the rivals challenged them on the merits of intent and capability of
Jio.

So earlier, the companies in the telecom industry were charging a very high price
for call and data services but with the entry of Jio, the pricing strategy of the
telecom industries in India changed. This was done so that they can hold on to the
existing customer base and also for getting new customers. As of now, almost all
the parties in the telecom industry provide a similar type of pricing. Players have
also been pricing their products very carefully due to the price sensitive nature of
customers and high competition in the sector.

PROSPECTS AND CHALLENGES OF THE INDUSTRY

The telecommunication industry is going through a transformational phase of

development – to acclimatize itself per the new technological and cloud trends. At
the very outset, the focus was on the Communication Technology (CT) which
marked the first wave of the information era. The second phase was the internet
phase which started approximately around the year 2000. The industry realigned
itself around horizontal solutions during this phase. It was the time of e-commerce
and portals. After 2006, the cloud began taking shape and this marked the

Third phase of transformation in the telecommunication industry. Right now, we

are in the midst of the era of cloud, where a new world of opportunities has opened
up for the carriers. It is quite evident that this era is unstoppable and there is no
escape.

In addition to opportunities, the telecom companies around the world are facing a
lot of challenges in this era. New technologies like the Internet of Things (IoT),
augmented reality (AR), virtual reality (VR), micro services and more necessitate
that telecom providers realign their business strategies and restructure themselves
as per the cloud era, in terms of operations, architecture and networks as well.
Moreover, in order to gain a competitive edge, they need to focus on providing
customized solutions to their customers and focus on developing long-term

9
relationships with them.

Rising income and growing rural market fuels demand for telecom services:

 Incomes have risen at a brisk pace in India and will continue rising given the
country’s strong economic growth prospects.

 GDP per capita of India is expected to grow at a CAGR of 7.47% from US$
1,481.56 in 2012 to US$ 3,273.85 in 2023.

 Increasing income has been a key determinant of demand growth in the

telecommunication sector in India.

 The emergence of an affluent middle class is triggering demand for the

mobile and internet segments.

 A young growing population is aiding this trend (especially the demand for
smart phones).

CHALLENGES IN THE INDUSTRY

Just like every other sector in the newly digitized world, telecoms are in the
midst of a significant transformation. The way that we communicate is
evolving to suit an environment that demands more agility, opportunity, and
flexibility.

In 2020, the first year of a new decade, the environment is rife with disruption,
and changes in the telecoms industry are everywhere.

Artificial intelligence (AI) is now a standard of everyday communications,

supplementing and enhancing the discussions between customers and brands.

5G technology is growing, paving the way to richer mobile experiences. There

has also been an unprecedented rise in demand for new network services
thanks to substantial growth in these unique markets.

According to the EY Digital Transformation (2020 and beyond) report,

disruptive competition from vendors in the technology, service management,
and other spaces, is the biggest challenge facing Telco companies.
Some of the other significant challenges are:

10
1. Demand for Traditional Services Is Decreasing:

While Internet of Things (IoT) and 5G have started to fuel more diversity in
vendor product offerings, businesses using legacy tools have struggled to stay
ahead of the curve. Vendors in all environments need to expand their offerings,
going beyond the basics of voice, to deliver everything from SMS to video.
The way that people are communicating is changing. Internet messaging, VoIP
and other cloud-based technology is taking over the industry. Even smart
phone traffic is moving to WIFI. This means that businesses of all sizes need
to consider how they’re going to evolve their service packages to suit the new
cloud-focused community. Not only do companies need to deliver the next
generation of call and contact centre offerings to stay ahead of the game, but
they need to ensure that these new services are reliable and practical too.
Customers are increasingly less accepting of drops in quality and performance.
The ability to monitor data in real time and check the quality of call traffic will
be critical if communication companies are going to thrive. Communication
services need to be faster, more agile, and more dependable than ever.

2. Security and the Risk of Data Breaches:

Monitoring call and communication quality is crucial to ensuring that

customers get the kind of telecom experience that they deserve. However,
tracking and understanding your communication life cycle will be essential to
telecoms companies for another reason, too – data and privacy. It has become
increasingly important for telecommunications companies to make data
security and privacy a key priority. The Digital Media Trends Survey from
Deloitte shows that customers are still terrified by the idea of identity theft and
financial loss. The result is that customers are demanding the same level of
control over their personal data that they get when it comes to placing
passwords on their bank accounts and email addresses.

Telecommunications firms will need to work harder to create environments

where people can feel as safe as possible.

11
3. 2020- The Year of 5G Adoption:

The 5G action plan created by the European Union already includes access to
uninterrupted 5G coverage by 2025 in the new vision of the future. As well as
being able to support a considerable increase (hundredfold) in connected
devices, 5G will also offer things like improved data rates, better network
slicing, and ultra-low latency. This opens the gateways for new services,
network operation, customer experience, and more. 5G has the potential to truly
change the role of telecoms companies. These businesses will evolve from
being distributors of technology to full-service providers too. This could mean
that telecoms companies are engaging more regularly with enterprise customers,
governments, and other groups. It may also mean working with other
technology companies to build more effective communication apps in the 5G
landscape. While 5G may just be in the build phase for now, as people come to
understand its potential, we will begin to see a new wave of business built on
this strategy.

4. Gearing Up for More New Technology:

Everywhere we look, the demand for new and disruptive technology is growing.
Artificial intelligence has officially changed the way that we interact on a
fundamental level. We have entered a time when many of us use voice
commands instead of text to interact with machines. At the same time,
businesses are embracing remote working and video-first cultures to reduce
costs and improve work/life balance. The integration of IoT into our everyday
world is looming ever closer, with billions of connected devices already in the
marketplace. Platforms that support high levels of connectivity will be essential
in this new environment. What’s more, telecoms companies will need to think
more carefully about how they can deliver end customers the flexibility and
extensibility that they need. Even concepts like robotic process automation and
computing at the edge could deliver their share of challenges and opportunities.
On the one hand, things like robotic process automation will reduce the
frequency of mundane processes, allowing employees to concentrate more of
their efforts on creative challenges. On the other hand, these kinds of tech mean

12
more monitoring for IT teams and more planning when it comes to things like
data protection too.

5. Preparing for the Future:

It’s difficult to know for sure what the future might look like in the communication
landscape. What we do know is that the environment is becoming more sophisticated
and advanced by the day. This means that if businesses want to stay ahead of the curve
and deliver the results that their customers and shareholders expect, they need the right
plan. It’s not enough to simply jump on the latest trends as soon as they arrive.
Business leaders need to assess the current gaps and issues in their communication
strategy and look for ways to fix existing problems. Those who are ready to embrace
opportunities from the new environment, like 5G and AI, will need a plan for
monitoring the performance of their tools and ensuring that they’re not swapping
reliability for innovation.

KEY DRIVERS OF THE INDUSTRY

Major growth driver of Indian Paint Industry are elucidated as under: 1. 5G:
Higher speeds and lower latency mean that 5G supports use cases like
immersive content (augmented reality, virtual reality) and high-resolution
video, helping CSPs deliver an unmatched customer experience to gain a
competitive edge. As 5G progresses towards large- scale commercial viability,
service providers have begun trials of new use cases, and the results are
encouraging them to readily adopt the next-gen technology. As more devices
and use cases become viable, the revenue potential continues to grow along
with the need for flexible IT systems to support them.
2. Cloud Computing:
Cloud computing in the telecom sector relies heavily on the adoption of data
and logic separation principles, SDN/NFV, DevOps, microservices, and more.
It gives telcos the flexibility to acquire the corresponding services –
Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as
a Service (SaaS), which extensively increases scalability, standardization, self-
service automation, and reduces operational costs. Telecom players should
adapt their IT processes and prepare for related security implications such as

13
identity theft, unauthorized access, relinquished governance and compliance
policies, data security and breach of privacy, as well as inconsistency across on-
premise and cloud platforms. A recent [Link] report predicts that 5G
will mean wide-scale adoption of edge computing. The market is quickly
evolving from a centralized to a distributed cloud, and it is expected that this
year, 75% of enterprise-generated data will be processed outside of centralized
data centres.

3. Secure and Reliable Services:

Modern telecom environment offers a rich set of services that need reliable and
secure authentication. The number of smart phones equipped with biometric
fingerprint readers is increasing. This technology is also being used by retailers,
financial institutions, government, and even schools, to verify identities.

Other biometric mechanisms like facial or retinal recognition, are also telecom
trends and are likely to pick up steam in the coming years. An increasingly
large number of telecom companies are adopting biometric SIM cards for
curbing crimes related to mobile phones and terrorist attacks as well.

4. Internet of Things:

Although mentioned above as part of challenges faced by telecom industry due

to the huge amount of data that connected devices generate, but this is one
major trend that will provide telcos with more opportunities in the coming
years. Becoming an IoT connectivity service provider and offering Machine to
Machine (M2M) devices can open up new streams of revenue for the telcos.
Gartner predicts that there will be nearly 20 billion devices connected to the IoT
by 2020 and that IoT product and service suppliers will amount to a business of
$300 billion in revenue.

5. Mergers & Acquisitions:

With cut-throat competition, new technological innovations disrupting the

existing customer base, the year doesn’t seem to be very easy for the
telecommunication sector. That’s why a number of companies are looking to
partner with media and content firms, like Vodafone and Idea.

14
6. Economic Cycles:

Economic cycles affect all industries and they are major drivers of the
telecommunications industry on an international scale. The impact of Economic
Cycles can be both positive and negative for any industry. Due to its large scale
of operation and increasing cross-border presence, the telecommunications
industry is a bit more sensitive to these cycles. Through its
History, the telecommunications sector has often demonstrated its robustness in
downturns and periods of market uncertainty. The recent past has been no
exception. The sector is riding out the economic storms relatively well. Against
this generally improving outlook, there are conflicting perspectives on how the
sector will evolve. Investors are also concerned about the massive capital that
will be needed to support this growth, and the need to secure new revenue
streams.

NEED OF THE STUDY

The study on financial risk management with reference to Bharti Airtel Pvt Ltd
is imperative for several reasons:

1. Dynamic Telecom Industry:

The telecom industry is characterized by rapid technological advancements,

regulatory changes, and intense competition. Understanding how a leading
player like Bharti Airtel manages financial risks is crucial for maintaining
stability and fostering growth in such a volatile environment.

2. Financial Stability:

Financial risks, if not managed properly, can significantly impact a company’s

financial health. By studying Bharti Airtel’s risk management strategies,
insights can be gained into how the company safeguards its financial stability
against market fluctuations, credit risks, and operational challenges.

3. Benchmarking Best Practices:

15
Analyzing Bharti Airtel’s financial risk management practices can serve as a
benchmark for other telecom companies. It provides a model for best practices
that can be adopted to enhance their own risk management frameworks.

4. Stakeholder Confidence:

Effective financial risk management is vital for maintaining the confidence of

stakeholders, including investors, creditors, and regulators. This study
highlights the measures taken by Bharti Airtel to manage risks, thereby
showcasing its commitment to transparency and financial prudence.

5. Regulatory Compliance:

The telecom sector is subject to stringent regulatory requirements.

Understanding how Bharti Airtel complies with these regulations while
managing financial risks can provide valuable insights for ensuring compliance
without compromising on financial performance.

OBJECTIVE OF THE STUDY

 Identify Financial Risks

 Analyze Risk Management Strategies

 Evaluate Effectiveness

 Benchmark against Industry Standards

 Impact on Financial Performance

 Regulatory Compliance

 Stakeholder Perception

 Future Preparedness

16
LIMITATION OF THE STUDY

 Data Availability:

 Limited access to complete and up-to-date financial data and risk

management reports from Bharti Airtel may affect the thoroughness of the
analysis.

 Confidentiality Issues:

 Certain risk management strategies and practices may be confidential,

restricting the level of detail that can be publicly analyzed.

 Scope of Generalization:

 The focus on Bharti Airtel means findings may not be broadly applicable to
other telecom companies or industries, limiting the study's generalizability.

 External Factors:

 Rapid changes in economic conditions, regulatory environments, and market

dynamics may not be fully accounted for, impacting the study's relevance
over time.

 Comparative Analysis Constraints:

 Difficulty in obtaining detailed and comparable data from other telecom

companies can limit the depth of comparative analysis.

17
 SCOPE OF THE STUDY

 Industry Focus:

 The study focuses on the telecom industry, with a specific emphasis on

Bharti Airtel Pvt Ltd. It explores the unique financial risks and
management practices within this sector.

 Types of Financial Risks:

 The study covers various types of financial risks faced by Bharti Airtel,
including market risk, credit risk, and operational risk.

 Risk Management Practices:

 Examination of the specific strategies and tools Bharti Airtel uses to

manage and mitigate financial risks, such as the use of financial
derivatives, credit assessment methods, and internal controls.

 Comparative Analysis:

 Comparison of Bharti Airtel’s risk management practices with industry

standards and best practices. This includes benchmarking against other
leading telecom companies.

 Time Frame:

 The study analyzes data from recent years to provide a current perspective
on Bharti Airtel’s financial risk management. The exact time frame
depends on the availability of data.

 Geographical Focus:

 While Bharti Airtel operates globally, the study may primarily focus on its
operations in key markets, such as India and Africa, where it faces
significant financial risks.

18
 CHAPTER-2
REVIEW OF LITERATURE

19
Choudhary Himanshu Tripathi Gaurav (2012) states that to assess the
operational efficiency of the companies in the Indian organized retail industry in
terms of inventory turnover and also to investigate the impact of inventory turnover
on financial performance. A thorough analysis of the inventory management
practices adopted at these companies suggests that each retailer plans its inventory
level keeping in view its positioning in minds of its customers and, of course, the
sales forecasting. The inventory level is based on forecasting which plays a crucial
role in the performance of the company.

Asia Pulse (2011) has published about the sudden hike in export duty on crude
palm oil by Indonesia from 15 percent to 16.5 percent. The sudden hike in export
duty of crude palm oil will badly affect the Indian industry and to reduce the export
duty India has agreed towards the export of 5000 tons of non-basmati rice for crude
palm oil.

A K Phophalia, SarithaSbarma and G R Basotia (2008) indicates that ratio

analysis is the process of determining and presenting the relationship of the items in
financial statements. It is the numerical relationship between two items of financial
statements. He also points out that the advantage of working with ratio analysis is
that, it enables the organization to properly judge the performance and financial
position of the enterprise which automatically helps the organization in their
decision-making process, dragonizing the organizations financial ills and studies
about the financial trends that is happening in the organization.

Taylor, R k (2006) in his study mentions that financial statements as the aid
towards financial analysis. He indicates that the financial statements help the
business organization in having some extremely useful information in the form of
balance sheet which mirrors the financial position on a particular date in terms of
the structure of assets, liabilities and owner's equity and the profit and loss account
which shows the result of operations during a certain period of time, in terms of the
revenue obtained and the cost incurred during the year. Thus, the financial
statements provide a summarized view of the financial position and operations of a

20
 firm.

S Sreedharna (2010) mentions about the importance of ratio analysis which helps in
the analysis of the financial performance of the company. He indicates that the
situation of the two companies is not the same. Similarly, the factors influencing the
performance of the company in one year may change in another year. It is also helpful
in analyzing the profit of the company which enables the company's survival and
growth over a long period of time. Therefore, the analysis of the ratio is very much
important in order to assess and examine the financial performance of the company.

Lina Warrad and [Link] AI Omari(2015) studies about the impact of the activity
ratios on the financial performance analysis. He says that most professional analysts
and investors tend to focus on Return on Asset (ROA) as their primary measure of
firm performance. He also indicates that ROA is a better metric of financial
performance than income statement profitability measures like return on sales (ROS).
Return on asset explicitly takes into account the assets used to support business
activities. It determines whether the company is able to generate an adequate profit on
its assets rather than simply showing return on sales (ROS).

N Gupta (2006) states that financial statements provide a summary of the accounts of
a business enterprise, the balance sheet reflecting the assets and liabilities and the
income statement showing the result of operations during a certain period. He
mentions that the financial statement analysis emphasizes more importance to balance
sheet and profit and loss account but ignores the importance of other financial
statements like cash flow statement, fund flow statement and also retained earnings.

Lambrix and Singhvi (2006) states that ratio analysis is a widely used tool for
financial performance analysis. He says that ratio analysis is a major tool in order to
interpret financial statements so that strengths and weaknesses of the firm. He also
mentions that ratios are relative figures reflecting the relationship between related
variables.

RobuSorin-Adrian (2013) in their journal describes about the importance of

accounting for business enterprise. They mention that the main concerns in all

21
business areas have been and still remain the continuous growth in performance.
Business field is not accepted, for which reason, over time, it has developed its own
models and techniques to ensure the achievement of their organizational goals. The
authors points out that, for the successful running of the enterprise, continuous
performance, for taking timely accurate decisions, to ensure solvency of the business
enterprise and also for having a sound financial structure, the business enterprise
needs information which are provided by accounting, mainly through the profit and
loss account and balance sheet which justifies in the "pivot" role of accounting in the
improvement of business performance.

JhaSuvita, Hui Xiaofeng (2012) mentions that to analyse the financial performance of
different ownership structured commercial banks in Nepal based on their financial
characteristics and identify the determinants of performance of the banks with help of
financial ratios. The performance evaluation of banks is important for all parties
including depositors, investors, bank managers and regulators. The evolution of a firm's
performance usually employs the financial ratio method, because it provides a simple
description about the firm's financial performance in comparison with previous periods
and helps to improve its performance of management. The study reveals the result that
the public sector banks where significantly less efficient when compared to their
counterpart private banks mainly because of the funds available and also the customer
dealings by the public sector banks.

India Business Insight (2015) has mentioned in an article about the biggest threat the
palm oil industry is facing in the form of production of oleo-chemicals which are used
mainly by household sectors. It has led to declining crude oil prices. the demand for oleo-
chemicals is growing widespread with Malaysia and Indonesia account for about 66% of
its production.

Dhankar (1998) has studied about the criteria of performance measurement for business
enterprises in India study of public sector undertakings. The author gives a new model for
measuring the performance of a business enterprise in India, wherein, the basis is to
compare its actual rate of return with its expected risk and controversy of adjusted rate of
return. Realizing the importance public sector in India, an attempt was made to measure
the performance of all public 1983. It is shocking, which were started up to 1964 and
were in operation until shocking to know that half of them on an average want to tail of
making excess, have not been able to earn equal to their cost of capital.

22
Michael White and Glipsy Escobar (2008) states that recruitment and selection process
have become critical issues for police department around the world. This paper identifies
seven issues related to recruitment, selection and training. As we believe that they are
critical for finding, hiring and training effectively police officers in the future.
Ongori Henry and Temtime Z (2009) suggest strategies to improve.

Sonal Sisodia and Nimit Chowdhary (2012) state that illustration in recruitment
advertisement of Service Company that creates tangible presentation and challenge
application to presume the intended significance of the illustrative appeal. Service
employers should use visual communication to develop relationship with employees.

Theoretical Framework and Concepts

Recent Studies (2020-2023):

Recent literature continues to define financial risk management as essential for

identifying, assessing, and mitigating risks affecting telecom companies' financial
stability. Concepts like Value at Risk (VaR), Risk-Adjusted Return on Capital
(RAROC), and the use of derivatives for hedging remain fundamental (Sources: Recent
academic texts and journals).

Industry-Specific Financial Risks

Recent Insights (2020-2023):

Market Risk: Studies emphasize the impact of global economic volatility, interest rate
fluctuations, and geopolitical tensions on telecom companies' market risk exposure. The
focus is on adaptive strategies to manage these uncertainties effectively (Sources:
Recent industry reports and academic studies).

Recent Insights (2020-2023):

Credit Risk: Recent research highlights the challenges posed by credit risk in the
telecom sector, particularly in customer creditworthiness assessment and managing
exposures to counterparties. Studies explore innovative approaches to credit risk
mitigation (Sources: Recent academic literature and industry analyses).

Recent Insights (2020-2023):

Operational Risk: Cyber security threats, regulatory compliance, and operational

23
failures continue to be critical operational risks for telecom companies. Recent studies
emphasize the integration of advanced risk management technologies and robust internal
controls (Sources: Recent academic research and industry reviews).

Recent Studies on Financial Risk Management in Telecom

Recent Case Studies (2020-2023):

Leading Telecom Companies: Case studies on global telecom leaders provide insights
into their financial risk management strategies. These studies analyze the effectiveness
of derivatives usage, asset-liability management, and risk assessment frameworks in
mitigating financial risks (Sources: Recent case studies published in academic journals).

Recent Comparative Analyses (2020-2023):

Comparative analyses across telecom companies highlight regional variations in risk

management practices and regulatory impacts. Recent studies focus on benchmarking
best practices and identifying opportunities for improvement (Sources: Recent
comparative analyses in academic literature).

Recent Impact Studies (2020-2023):

Recent research continues to demonstrate the positive correlation between effective

financial risk management and enhanced financial performance in the telecom sector.
Studies emphasize the role of risk management in improving profitability, liquidity, and
overall resilience (Sources: Recent academic studies and industry reports).

Current Focus on Bharti Airtel and Emerging Trends

Recent Studies (2020-2023):

Bharti Airtel’s Practices: Recent analyses of Bharti Airtel's financial risk management
strategies focus on its operations in diverse markets like India and Africa. Studies
highlight specific approaches to managing market, credit, and operational risks (Sources:
Recent company disclosures and academic research).

Emerging Trends and Future Directions

Current Discussions (2020-2023):

Technological Integration: Emerging research explores the integration of AI, machine

learning, and blockchain in enhancing financial risk management capabilities. Studies

24
discuss the potential of these technologies to improve risk assessment accuracy and
decision-making (Sources: Recent academic discussions and emerging trends).

Current Research (2020-2023):

Longitudinal Studies: There is a growing interest in longitudinal studies tracking the

evolution of financial risk management practices over time. These studies aim to assess
the long-term impact of risk management strategies on telecom companies' financial
performance and resilience (Sources: Recent academic research agendas and industry
feedback).

UNIQUENESS OF THE STUDY

 Data is collected from reliable sources.

Tools which are used for analysis are updated and have advanced techniques

25
 CHAPTER -3
RESEARCH METHODOLOGY

26
RESEARCH APPROACH AND DESIGN

Research methodology is a scientific and systematic way to solve research

problems. Research can be defined as the search of knowledge or any
systematic investigation to establish fact. It deals with research methods and
takes into consideration the logic behind the method. The research is analytical
in nature. According to Clifford Woody research comprises of “define and
redefining problem, formulating hypothesis or suggested solution, collecting,
organizing and evaluating data; making deduction and reaching conclusion:
and at last, carefully testing the conclusion to determine whether they fit the
formulating hypothesis”.
The research approach is a plan and procedure that consist of the steps of broad
assumptions to detailed method of data collection, analysis, and interpretation.
It is therefore, based on the nature of the research problem being addressed.
The two basic research approaches are quantitative and qualitative research.
Both types have different purposes. Quantitative research is statistics based. It
involves questions that can best be answered in numbers. Qualitative research
is descriptive in nature, because it generally deals with non-numerical and
unquantifiable things.
Quantitative research is much more numbers-driven. The emphasis is on the
collection of numerical data. The conclusion then makes inferences based on
that data.
A research design is a broad plan that states objectives of research project and
provides the guidelines what is to be done to realize those objectives. It is, in
other words, a master plan for executing a research project.
The study has been conducted with reference to the data related to Bharti
Airtel Ltd. The study examines the financial performance of some variables
and compares the performance of a period of five years.

27
 SOURCES OF ONLINE DATA

Data’s have been obtained from online sites. Data’s like the annual reports of
the company, balance sheets, and profit and loss account, booklets, records
such as files, reports maintained

by the company has been obtained from the published reports. Mainly the
annual report consists of two parts;
1. Profit and Loss Account
2. Balance Sheet

The Profit and Loss (P&L) statement is a financial statement that summarizes
the revenues, costs, and expenses incurred during a specified period, usually a
fiscal quarter or year. The Profit and Loss statement is synonymous with the
income statement.
A balance sheet is a financial statement that reports a company's assets,
liabilities and shareholders' equity at a specific point in time, and provides a
basis for computing rates of return and evaluating its capital structure.

SAMPLING DESING

Sampling design is a mathematical function that gives you the probability of

any given sample being drawn. Since sampling is the foundation of nearly
every research project, the study of sampling design is a crucial part of
statistics, and is often a one or two semester course. It involves not only
learning how to derive the probability functions which describe a given
sampling method but also understanding how to design a best-fit sampling
method for a real- life situation.
The study has been taken during the period from 2016 to 2020 (Five years).To
know the financial performance of the banks by using Ratio analysis, Trend

28
analysis, Dupont analysis, Correlation analysis and Common Size Balance
Sheet. Financial performance of banks can be analysis through their financial
reports

DATA ANALYSIS TOOLS

TOOLS OF FINANCIAL PERFORMANCE ANALYSIS

An analysis of financial performance can be possible through the use of one or

more tools of financial analysis.
A. ACCOUNTING TECHNIQUES

It also known as financial techniques. Various accounting techniques such as

Comparative Financial Analysis, Common-size Financial Analysis, Trend
Analysis, Fund Flow Analysis, Cash Flow Analysis, CVP Analysis, Ratio
Analysis, Value Added Analysis etc. may be used for the purpose of financial
analysis. Some of the important techniques which are suitable for the financial
analysis are discussed here under.
The main analysis used here are:

 Ratio Analysis

 Trend Analysis

 Correlation Analysis

 Common size Statement Analysis

 DuPont Analysis

RATIO ANALYSIS

Ratio analysis is a quantitative procedure of obtaining a look into a firm’s

functional efficiency, liquidity, revenues, and profitability by analyzing its

29
financial records and statements. Ratio analysis is a very important factor that
will help in doing an analysis of the fundamentals of equity. Ratios can be
classified into four groups, on the basic of items used:

 LIQUIDITY RATIO
 SOLVENCY RATIO
 ACTIVITY RATIO
 PROFITABILITY RATIO

LIQUIDITY RATIOS

Liquidity ratios are the ratios that measure the ability of a company to meet its
short-term debt obligations. These ratios measure the ability of a company to
pay off its short-term liabilities when they fall due.
The following are the ratios used in analysis:

 Current Ratio
 Quick Ratio
 Absolute Liquid Ratio

SOLVENCY RATIO
A solvency ratio is a key metric used to measure an enterprise’s ability to meet
its long-term debt obligations and is used often by prospective business
lenders. A solvency ratio indicates whether a company’s cash flow is sufficient
to meet its long-term liabilities and thus is a measure of its financial health.
The following are the leverage ratios used in the financial analysis:

a) Current Assets to Net worth Ratio

b) Current Liability to Net worth Ratio
c) Debt-Equity Ratio
d) Fixed Asset to Net worth Ratio
e) Proprietor Ratio

30
ACTIVITY RATIOS/TURNOVER RATIOS

The turnover ratio or turnover rate is the percentage of a mutual fund or other
portfolio's holdings that have been replaced in a given year.

a) Working Capital Turnover Ratio

b) Current Assets Turnover Ratio
c) Fixed Assets Turnover Ratio
d) Total Assets Turnover Ratio
e) Debtors Turnover Ratio
f) Creditors Turnover Ratio
g) Inventory Turnover Ratio

PROFITABILITY RATIOS

The profitability ratios of a business concern can be measured by the

profitability ratios. These highlight the end result of business activities by
which alone the overall efficiency of a business unit can be judged.
The following are the profitability ratios used in this analysis:

a) Net Profit Ratio

b) Return on Total Assets Ratio
c) Operating Profit Ratio
d) Gross Profit Ratio
e) Return on Capital Employed Ratio
f) Return on Equity Ratio

31
TREND ANALYSIS

Trend analysis is the widespread practice of collecting information and

attempting to spot a pattern. In some fields of study, the term "trend analysis"
has more formally defined meanings. Although trend analysis is often used to
predict future events, it could be used to estimate uncertain events in the past.
In project management trend analysis is a mathematical technique that uses
historical results to predict future outcome. This is achieved by tracking
variance in cost and schedule performance. In the context, it is a project
management quality control tool.
Trend Analysis involves the collection of information from multiple time
periods and plotting the information on a horizontal line for future review.

CORRELATION ANALYSIS

Correlation Analysis is statistical method that is used to discover if there is a

relationship between two variables/datasets, and how strong that relationship
may be.
In terms of market research this means that, correlation analysis is used to
analyze quantitative data gathered from research methods such as surveys and
polls, to identify whether there is any significant connections, patterns, or
trends between the two.

COMMON SIZE STATEMENT ANALYSIS

Common size analysis, also referred as vertical analysis, is a tool that financial
managers use to analyse financial statements. It evaluates financial statements
by expressing each line item as a percentage of the base amount for that
period.

32
DUPONT ANALYSIS

The DuPont analysis (also known as the DuPont identity or DuPont model) is a
framework for analyzing fundamental performance popularized by the DuPont
Corporation. DuPont analysis is a useful technique used to decompose the
different drivers of return on equity (ROE). The decomposition of ROE allows
investors to focus on the key metrics of financial performance individually to
identify strengths and weaknesses.

LIMITATIONS OF THE STUDY

 The data were collected mainly on the basis of secondary data. So, the
limitations of secondary data are applicable, so the suggestions will be
irrelevant.
 The study was conducted with the following limitations:

 As the study was mainly based on secondary information, the

inherent limitations of the secondary data might have affected the
findings of the study.
 This study is a partial analysis based on secondary data.
 Accuracy of the result with the accuracy of secondary data.
 The data collected for the study was historic in nature.

33
 CHAPTER-4
DATA ANALYSIS
AND

FINDINGS

34
 1. LIQUIDITY RATIOS

CURRENT RATIO

CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITIES

TABLE NO; 4.1.1 SHOWING CURRENT RATIO

YEAR CURRENT CURRENT CURRENT

ASSET LIABILITY RATIO
2015-2016 11421.00 27846.80 0.41

2016-2017 15310.10 35816.40 0.42

2017-2018 21495.90 43640.40 0.49

2018-2019 19514.90 60701.20 0.32

2019-2020 58781.30 93211.20 0.63

(SOURCE - SECONDARY DATA)

FIGURE NO; 4.1.1 SHOWING CURRENT RATIO

35
 Current Ratio
0.7
0.63
0.6

0.49
0.5
0.41 0.42
0.4 Current Ratio
0.32
0.3

0.2

0.1

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

The current ratio of Bharti Airtel was 0.63 in 2019-2020 which is the highest
compared to the past 5 years, and current ratio is lowest in 2018-2019 at [Link] is
lowest in 2018-2019 because the current liability increased but the current asset
decreased causing the decline in current ratio. All those three years current ratio of
the company is not satisfactory because it is below the rule of thumb that is 2:1.

QUICK RATIO

QUICK RATIO = QUICK ASSETS

CURRENT LIABILITIES

TABLE NO; 4.1.2 SHOWING QUICK RATIO

YEAR QUICK ASSET CURRENT LIABILITY LIQUID RATIO

36
 2015-2016 11414.7 27846.80 0.40

2016-2017 15306.2 35816.40 0.42

2017-2018 21489.6 43640.40 0.49

2018-2019 19513.9 60701.20 0.32

2019-2020 58778.2 93211.20 0.63

(SOURCE- SECONDARY DATA)

FIGURE NO; 4.1.2 SHOWING QUICK RATIO

LIQUID RATIO
LIQUID RATIO

0.7

0.6

0.5

0.4 0.63
0.3
0.49
0.4 0.42
0.2 0.32
0.1

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

The desirable standard of super quick ratio is 0.5:1. This ratio is not much in use
because maintaining 50% of the value of the current liabilities in cash and bank
balance is not advisable.

37
From the above table and graph, it is understood that the ratio is not up to the
standard. The company’s financial data shows that absolute liquid position is weak.
Here the liquid ratios from 2015-2016 to 2018-2019 are below the standard which
shows that the company is having a weak liquidity by changing the policy of credit
sales and advance payments. It can be seen that the ratio increases during the year
2020, this increase was caused by the immense growth in quick asset when
compared to the previous years, which indicates the company tries to improve its
liquidity position.

2. LEVERAGE RATIOS

SOLVENCY RATIO

SOLVENCY RATIO = TOTAL ASSETS

TOTAL DEBT

TABLE NO; 4.2.1 SHOWING SOLVENCY RATIO

YEAR TOTAL ASSETS TOTAL DEBT SOLVENCY RATIO

2015-2016 185028 42156.9 4.38

2016-2017 191637.60 60094.7 3.18

2017-2018 204937.30 65415.8 3.13

2018-2019 222907.50 83752.5 2.66

2019-2020 300372.80 82363.2 3.64

FIGURE NO; 4.2.1 SHOWING SOLVENCY RATIO

38
SOLVENCY RATIO
SOLVENCY RATIO
 INTERPRETATION:

Solvency ratio measure the ability of a firm to pay the outside liabilities out of
total assets. A higher solvency ratio indicates that the solvency and financial
position are strong and vice- versa. If the ratio is more than one, the lenders
can breathe a free air as their investment is secured.
From the above table and graph, it is understood that the company is solvent
because the assets of the firm is sufficiently more than its liabilities. Also, we
can see that solvency ratio of each year is greater than one, thus the financial
position of the firm is very strong and investments made in this firm is secured.
The ratio is highest during the year 2015-2016 and lowest during 2018-2019.
The decrease in the ratio during 2018-2019 was because the total debt
increased by a huge margin when compared to the total asset of that particular
year, but this seems to have improved in the following year.

TOTAL DEBT EQUITY RATIO

TOTAL DEBT EQUITY RATIO= TOTAL DEBT

TOTAL EQUTY

TABLE NO; 4.2.2 SHOWING TOTAL DEBT EQUITY RATIO

YEAR TOTAL DEBT TOTAL EQUITY TOTAL DEBT EQUITY

RATIO
2015-2016 42156.9 111729.10 0.37

2016-2017 60094.7 101207.30 0.59

2017-2018 65415.8 102860.90 0.63

2018-2019 83752.5 98305.90 0.85

2019-2020 82363.2 101075.00 0.81

(SOURCES- SECONDARY DATA)

39
 FIGURE NO; 4.2.2 SHOWING TOTAL DEBT EQUITY RATIO

TOTAL DEBT EQUITY RATIO

0.9
0.8
0.7
0.6
0.5
0.4

0.85
0.81
0.63
0.3 0.59
0.2 0.37
0.1
0

2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

TOTAL DEBT EQUITY RATIO

INTERPRETATION

The debt equity ratio measures the relative proportion of debt and equity in
financing the assets of a firm. The ideal debt equity ratio is 1:1 that the funds
provided by outsiders and shareholders must be equal. Debt equity ratio indicates
the degree of protection the creditors have. A high ratio indicates higher
proportion of debt content in the capital structure.
It can be seen that the ratio is increasing, which means that the company is being
financed by creditors rather than from its own financial sources which may be a
dangerous trend. Lenders and investors usually prefer low debt-to-equity ratios because
their interests are better protected in the event of a business decline.

FIXED ASSET TO SHAREHOLDERS FUND RATIO

40
 FIXED ASSET TO LONG TERM FUNDS RATIO= FIXED ASSETS
SHAREHOLDERS FUNDS

TABLE NO; 4.2.3 SHOWING FIXED ASSET TO SHAREHOLDERS FUND

RATIO

YEAR FIXED ASSET LONG TERM FIXED ASSET TO SHARE

FUND HOLDERS FUND RATIO

2015-2016 95755.80 111729.10 0.85

2016-2017 121123.00 101207.30 1.19

2017-2018 128152.10 102860.90 1.24

2018-2019 139448.40 98305.90 1.41

2019-2020 162938.00 101075.00 1.61

(SOURCE- SECONDARY DATA)

41
FIGURE NO; 4.2.3 SHOWING FIXED ASSET TO SHAREHOLDERS FUND RATIO

FIXED ASSET RATIO

FIXED ASSET TO SHAREHOLDERS FUND RATIO

1.8
1.61
1.6
1.4 1.41
1.2
1 1.24
1.19
0.8
0.6
0.4 0.85
0.2
0

2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

The fixed asset to Shareholder’s fund ratio is calculated for the purpose of knowing
the extent of shareholder’s fund in fixed asset. If the ratio is less than 1, it means
that all fixed assets are purchased out of shareholders fund and a part of
shareholders fund is invested in working capital. If the ratio is greater than1, it
means that outsiders fund has been used to acquire a part of fixed assets.
The above graph shows a fluctuating trend. But we can see that the fixed asset to
shareholders fund ratio during each year is increasing each year. After 2015-2016 it can be
seen that the value is more than 1 it means that the stockholders’ equity is less than the
fixed assets and the company is using debts to finance a portion of fixed assets. The Fixed
asset ratio was lowest at 2015-2016 and then kept on increasing and is the highest at 2019-
2020 this shows that the Fixed Asset was growing more when compared to the Long Term
Fund of the particular year.

PROPRIETARY RATIO

42
 PROPRIETARY FUND = SHAREHOLDERS FUND
TOTAL ASSET

TABLE NO; 4.2.4 SHOWING PROPRIETARY RATIO

YEAR SHAREHOLDERS TOTAL ASSET PROPRIETARY

FUND RATIO
2015-2016 111729.10 185028.00 0.60

2016-2017 101207.30 191637.60 0.52

2017-2018 102860.90 204937.30 0.50

2018-2019 98305.90 222907.50 0.44

2019-2020 101075.00 300372.80 0.33

(SOURCE- SECONDARY DATA)

FIGURE NO; 4.2.4 SHOWING PROPRIETARY RATIO

PROPRIETARY RATIO

2019-2020 0.33

2018-2019 0.44

2017-2018 0.5

2016-2017 0.52

2015-2016 0.6

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7

PROPRIETARY RATIO

INTERPRETATION:

43
Proprietary ratio shows how much funds have been contributed by the shareholders in
the total assets of the firm. Generally, a ratio of 0.5:1 or more is considered ideal. It
indicates the long- term financial position of the firm and in turn, indicates the financial
health of the firm. Higher proprietary ratio indicates that the firm is less dependent on
creditors for its working capital.
In the above table and graph, proprietary ratio is high during the year 2016 and then
keeps on decreasing till 2020. The ratio kept on decreasing because the shareholders
fund remained almost the same during the 5 years studied but the Total Asset kept on
increasing. We can conclude that the proprietary ratio shows a decreasing trend which
indicates that the company is more depends on creditors for its working capital.

FIXED ASSET RATIO

FIXED ASSET RATIO= FIXED ASSET

CAPITAL EMPLOYED

TABLE NO; 4.2.5 SHOWING FIXED ASSET RATIO

YEAR FIXED ASSET CAPITAL FIXED ASSET

EMPLOYED RATIO
2015-2016 95755.80 157181.2 0.60
2016-2017 121123.00 155821.2 0.77

2017-2018 128152.10 161296.9 0.79

2018-2019 139448.40 162206.3 0.85

2019-2020 162938.00 207160.8 0.78
(SOURCE- SECONDARY DATA)

FIGURE NO; 4.2.5 SHOWING FIXED ASSET RATIO

44
 FIXED ASSET RATIO

2019-2020 0.78

2018-2019 0.85

2017-2018 0.79

2016-2017 0.77

2015-2016 0.6

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9

FIXED ASSET RATIO

INTERPRETATION:

Fixed asset ratio is calculated to know whether the fundamental principle of sound
financial policy that all fixed assets must be financed out of capital employed is followed
or not. The ratio helps in ascertaining the proportion of long-term funds invested in fixed
assets. A higher ratio indicates that the financial position is not sound where as a lower
ratio indicates a better financial position.
From the graph we can see that the fixed asset ratio 0.6 during the year 2015-2016 and
this keeps on increasing till 2018-2019, as it is increasing so we can understand that the
ratio indicates a poorer financial position and all its fixed assets using its own long-term
funds. During the year 2018-2019 shows the higher ratio this shows that the company is
not sound, this was because the capital employed was at a much higher rate when
compared to the fixed asset, but in 2019-2020 we can see that the company is recovering
and improving.

ACTIVITY RATIO

45
INVENTORY TURNOVER RATIO

INVENTORY TURNOVER RATIO= SALES

AVERAGE INVENTORY

TABLE NO; 4.3.1 TABLE SHOWING INVENTORY TURNOVER RATIO

YEAR SALES AVERAGE INVENTORY INVENTORY

TURNOVER RATIO
2015-2016 60300.30 7.35
8204.12

2016-2017 62276.30 4.6 13538.3

2017-2018 53663.00 5.1 10522.2

2018-2019 49606.00 3.65 13590.7

2019-2020 54317.10 2.05 26496.1

(SOURCE- SECONDARY DATA)

FIGURE NO; 4.3.1 SHOWING INVENTORY TURNOVER RATIO

46
2019-2020 26496.1

2018-2019 13590.7

2017-2018 10522.2
Series 1

2016-2017 13538.3

2015-2016 8204.12

0 5000 10000 15000 20000 25000 30000

INTERPRETATION:

Inventory turnover ratio is a measure of liquid inventory. This ratio measure how quickly
inventory is sold. It helps in calculating how efficiently the stock or inventory is used. it
can be used to measure the efficiency in inventory management. This ratio is also an index
of profitability because a high ratio indicates that inventory is sold quickly which in turn
results in more profit.
From the above table and graph, it is clear that the inventory turnover ratio was increased
from 2016 to 2017 but in 2018 decreased the ratio. The highest ratio was during the year
2020 that means inventory is sold quickly but now decreased the sale of inventory slightly.
The ratio was highest in 2019-2020 because when compared to the previous years the
average inventory became low but the sales increased, causing the increase in the
Inventory Turnover Ratio.

INVENTORY HOLDING PERIOD

47
 INVENTORY HOLDING PERIOD = 365

INVENTORY TURNOVER RATIO

TABLE NO; 4.3.2 TABLE SHOWING INVENTORY HOLDING PERIOD

YEAR INVENTORY TURNOVER INVENTORY HOLDING

RATIO PERIOD
2015-2016 8204.12 0.044
2016-2017 13538.3 0.026
2017-2018 10522.2 0.034

2018-2019 13590.7 0.026

2019-2020 26496.1 0.013

(SOURCE – SECONDARY DATA)

FIGURE NO; 4.3.2 SHOWING INVENTORY HOLDING PERIOD

INVENTORY HOLDING PERIOD

0.05
0.045 0.044
0.04
0.035
0.03 0.034

0.026 0.026
0.025
0.02
0.015
0.013

0.01
0.005
0

2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INVENTORY HOLDING PERIOD

INTERPRETATION:

48
A short inventory holding period indicates a good inventory management where a long
inventory holding period shows a poor management of inventory.
The above graph shows a shorter inventory period during the year 2020 which indicates
that the inventories during the year were sold very quickly and management of
inventories were satisfactory. During the year 2016 the inventory holding period was
high which results in poor inventory management and sales.

DEBTORS TURNOVER RATIO

DEBTORS TURNOVER RATIO= NETCREDIT SALES

AVERAGE TRADE RECEIVABLES

TABLE NO;4.3.3 TABLE SHOWING DEBTORS TURNOVER RATIO

YEAR NET CREDIT SALES AVERAGE TRADE DEBTORS TURNOVER

RECEIVABLES RATIO
2015-2016 60300.30 3241.7 18.60
2016-2017 62276.30 3192.1 19.50

2017-2018 53663.00 3765.7 14.25

2018-2019 49606.00 4079.95 12.15

2019-2020 54317.10 3825.15 14.20

(SOURCE - SECONDARY DATA)

FIGURE NO;4.3.3 GRAPF SHOWING DEBTOR’S TURNOVER RATO

49

DEBTORS TURNOVER RATIO

20
18
16
14
12

10 18.6 19.5
8 14.25 14.2
6 12.15
4
2
0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

Debtors’ turnover ratio shows how quickly debtors are realized or converted into cash.
It indicates how efficiently the firm collects cash from debtors. This ratio indicates the
liquidity or quality of debtors. It helps in evaluating the credit collection or credit
policy of a firm. It helps to measure the efficiency in management of debtors. A higher
turnover ratio shows the efficiency in collection from debtors and vice versa.
From the graph it is understood that the debtor’s turnover ratio increases only in the
year 2016- 2017. So now the company efficiency is very low in collection from
debtors. The lowest ratio is 12.15 during the year 2018-2019, this was because during
the year 2018-2019 the average trade receivables increased from the previous year and
the net credit sales decreased compared to the previous years.

AVERAGE COLLECTION PERIOD

AVERAGE COLLECTION PERIOD= 365

50
 DEBTORS TURNOVER RATIO

TABLE NO; 4.3.4 TABLE SHOWING AVERAGE COLLECTION PERIOD

YEAR DEBTORS TURNOVER RATIO AVERAGE COLLECTION

PERIOD
2015-2016 18.60 20
2016-2017 19.50 19

2017-2018 14.25 26

2018-2019 12.15 30
2019-2020 14.20 26

(SOURCE – SECONDARY DATA)

FIGURE NO; 4.3.4 GRAPH SHOWING AVERAGE COLLECTION PERIOD

AVERAGE COLLECTION PERIOD

35
30
30
26 26
25
20
20 19 Series 1

15

10

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

Average collection period is related with and dependent upon debtor’s turnover ratio.

51
A shorter collection period indicates that debtors are collected more promptly and vice versa.
From the graph, it is seen that average collection period is high during the 2018 and 2019
years indicating that the company faced delays in payment by debtors. The graph shows a
fluctuating trend from 2016 to 2020. As of 2020 the companies have tried to overcome the
inefficiency of collecting from debtors which can be seen from the data.

CREDITORS TURNOVER RATIO

CREDITORS TURNOVER RATIO= NET CREDIT PURCHASE

AVERAGE CREDITORS

TABLE NO;4.3.5 TABLE SHOWING CREDITORS TURNOVER RATIO

YEAR NET CREDIT AVERAGE CREDITORS

PURCHASE CREDITORS TURNOVER RATIO
2015-2016 49538.90 9549.90 5.18
2016-2017 53699.30 13470.2 3.98

2017-2018 53975.70 16334.4 3.30

2018-2019 60287.50 18411.75 3.27

2019-2020 66038.70 19186.15 3.44

(SOURCE- SECONDARY DATA)

FIGURE NO; 4.3.5GRAPH SHOWING CREDITORS TURNOVER RATIO

52
 CREDITORS TURNOVER RATIO
6

4
CREDITORS TURNOVER RATIO
3
5.18
2 3.98
3.3 3.27 3.44

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

Creditors Turnover Ratio is to determine the period for which credit purchases
remain outstanding. It indicates the number of times creditors are paid in a year.
This ratio helps to know whether the firm is enjoying actually the credit period
promised by creditors or suppliers. A higher turnover ratio indicates early payment
to creditors and a lower ratio indicates delay in payment to creditors.

From the above graph it is clear that creditor’s turnover was high during 2015-2016
implying that the company was enjoying the credit period promised by creditors the
high turnover ratio shows during 2015-2016. But creditor’s turnover ratio kept on
decreasing after 2015-2016 which indicates delay in payment to creditors. The ratio
kept on decreasing because the average creditors kept on increasing when
compared to 2015-2016.

AVERAGE PAYMENT PERIOD

53
 AVERAGE PAYMENT PERIOD= 365
CREDITORS TURNOVER RATIO

TABLE NO; 4.3.6 TABLE SHOWING AVERAGE PAYMENT PERIOD

YEAR CREDITORS TURNOVER AVERAGE PAYMENT

RATIO PERIOD(DAYS)
2015-2016 5.18 70
2016-2017 3.98 92
2017-2018 3.30 111

2018-2019 3.27 112

2019-2020 3.44 70

(SOURCE – SECONDARY DATA)

FIGURE NO;4.3.6 GRAPH SHOWING AVERAGE PAYMENT PERIOD

AVERAGE PAYMENT PERIOD

120

100

80
Series 1
60
111 112
92
40
70 70

20

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

54
 Average payment period is related with and dependent upon Creditor's Turnover
Ratio.

It means the credit period enjoyed by the firm in paying creditors. A shorter payment
period indicates that the firm is not taking the full advantage of credit allowed by
creditors.

In the above graph, we can see that the firm enjoys shorter payment period during
2015- [Link] the other years showed an increase in payment period indicating
payments to the creditors were delayed.

CURRENT ASSET TURNOVER RATIO

CURRENT ASSET TURNOVER RATIO= NET SALES

CURRENT ASSETS

TABLE NO;4.3.7 TABLE SHOWING CURRENT ASSETS TURNOVER RATIO

YEAR NET SALES CURRENT ASSETS CURRENT ASSET

TURNOVER RATIO
2015-2016 60300.30 11421.00
5.27

2016-2017 62276.30 15310.10 4.06

2017-2018 53663.00 21495.90 2.49

2018-2019 49606.00 19514.90 2.54

2019-2020 54317.10 58781.30 0.92

(SOURCE – SECONDARY DATA)

FIGURE NO; 5.3.7 GRAPH SHOWING CURRENT ASSETS TURNOVER RATIO

55
 CURRENT ASSESTS TURNOVER RATIO
6
5.27
5

4.06
4
Series 1
3
2.49 2.54

0.92
1

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

Current assets turnover ratio indicates the ability of the company to realize the cash
from the debtors as well as less amount of money blocked in inventories. A high
current asset turnover ratio indicates the ability of the organization to achieve
maximum sales with minimum investment in current assets, higher the current ratio
better will be the situation.

In the above graph it is observed that current assets turnover ratio is decreasing
continuously. The year after 2015-2016 shows lower ratio. Year 2015-2016 shows
higher ratio that means the company is efficient in converting current assets into
sales but from 2016-2017 shows lower ratio which means the company is not as
efficient in converting current assets into sales. The ratio was the lowest in 2019-
2020 this was because the current asset increased by a huge margin while the net
sales only increase by a little when compared to the current asset of that year.

TOTAL ASSET TURNOVER RATIO

56
 TOTAL ASSET TURNOVER RATIO= NET SALES

TOTAL ASSETS

TABLE NO;4.3.8 TABLE SHOWING TOTAL ASSETS TURNOVER RATIO

YEAR NET SALES TOTAL ASSETS TOTAL ASSET

TURNOVER RATIO
2015-2016 60300.30 185028.00 0.32
2016-2017 62276.30 191637.60 0.32

2017-2018 53663.00 204937.30 0.26

2018-2019 49606.00 222907.50 0.22

2019-2020 54317.10 300372.80 0.18

(SOURCE – SECONDARY DATA)

FIGURE NO: 4.3.8 GRAPH SHOWING TOTAL ASSETS TURNOVER RATIO

TOTAL ASSETS TURNOVER RATIO

0.35

0.3

0.25

0.2 Series 1

0.32 0.32
0.15
0.26
0.22
0.1
0.18

0.05

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

57
Average collection period is related with and dependent upon debtor’s turnover ratio.
A shorter collection period indicates that debtors are collected more promptly and vice
versa.
From the graph, it is seen that average collection period is high during the 2018 and 2019
years indicating that the company faced delays in payment by debtors. The graph shows a
fluctuating trend from 2016 to 2020. As of 2020 the companies have tried to overcome the
inefficiency of collecting from debtors which can be seen from the data.

CREDITORS TURNOVER RATIO

CREDITORS TURNOVER RATIO= NET CREDIT PURCHASE

AVERAGE CREDITORS

TABLE NO; 4.3.5 TABLE SHOWING CREDITORS TURNOVER RATIO

YEAR NET CREDIT AVERAGE CREDITORS

PURCHASE CREDITORS TURNOVER RATIO
2015-2016 49538.90 9549.90 5.18
2016-2017 53699.30 13470.2 3.98

2017-2018 53975.70 16334.4 3.30

2018-2019 60287.50 18411.75 3.27

2019-2020 66038.70 19186.15 3.44

(SOURCE- SECONDARY DATA)

FIGURE NO;4.3.5GRAPH SHOWING CREDITORS TURNOVER RATIO

58
 CREDITORS TURNOVER RATIO
100%
90%
80%
70%
60%
Series 1
50% 5.18 3.98 3.3 3.27 3.44
40%
30%
20%
10%
0%
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INTERPRETATION:

Creditors Turnover Ratio is to determine the period for which credit purchases remain
outstanding. It indicates the number of times creditors are paid in a year. This ratio helps to
know whether the firm is enjoying actually the credit period promised by creditors or
suppliers. A higher turnover ratio indicates early payment to creditors and a lower ratio
indicates delay in payment to creditors.
From the above graph it is clear that creditors turnover was high during 2015-2016 implying
that the company was enjoying the credit period promised by creditors the high turnover ratio
shows during 2015-2016. But creditor’s turnover ratio kept on decreasing after 2015-2016
which indicates delay in payment to creditors. The ratio kept on decreasing because the
average creditors kept on increasing when compared to 2015-2016.

WORKING CAPITAL TURNOVER RATIO

59
 WORKING CAPITAL TURNOVER RATIO= COST OF GOODS SOLD

WORKING CAPITAL

TABLE NO;4.3.11 TABLE SHOWING WORKING CAPITAL TURNOVER RATIO

YEAR COST OF GOODS WORKING WORKING CAPITAL

SOLD CAPITAL TURNOVER RATIO
2015-2016 60300.30 -16425.80 -3.67

2016-2017 62276.30 -20506.3 -3.03

2017-2018 53663.00 -22144.50 -2.42

2018-2019 49606.00 -41186.30 -1.20

2019-2020 54317.10 -34429.90 -1.57

(SOURCE – SECONDARY DATA)

FIGURE NO;4.3.11 GRAPH SHOWING WORKING CAPITAL TURNOVER RATIO

60
 CAPITAL TURNOVER RATIO
0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
-0.5 -1.2
-1.57
-1
-2.42
-1.5 -3.03 Series 1
-3.67
-2

-2.5

-3

-3.5

-4

INTERPRETATION:

Working Capital Turnover Ratio is used to determine how efficiently the

working capital is utilized in the business. It indicates whether working capital
is effectively used in making sales. Generally higher the ratio the better is the
utilization of working capital and vice-versa.

As all the ratios are negative it can be understood that the company’s current
liabilities exceed its current assets. Although it was on its way to recover as
the values were increasing till 2019, the ratio again decreased to a -1.57 in
2020 showing that the current liabilities increased.

CORRELATION ANALYSIS

61
 HYPOTHESIS 1-FINDING THE SIGNIFICANCE BETWEEN SALES AND PROFIT

H0 - There is no significance between sales and profit.

YEAR NET SALES (X) NET PROFIT (Y)

2015-2016 60300.30 7780.30

2016-2017 62276.30 -9925.60

2017-2018 53663.00 79.20

2018-2019 49606.00 -1869.20

2019-2020 54317.10 -36088.20

TABLE NO;4.8.1 TABLE SHOWING CORRELATION BETWEEN SALES AND

PROFIT

X Y XY X2 Y2
60300.30 7780.30 469154424.09 3636126180.09 60533068.09

62276.30 -9925.60 -618129643.28 3878337541.69 98517535.36

53663.00 79.20 4250109.60 2879717569.00 6272.64

49606.00 -1869.20 -92723535.20 2460755236.00 3493908.64

54317.10 -36088.20 -1960206368.22 2950347352.41 1302358179

280162.7 -40024 -2197655013.01 15805283879.19 1464908963.97

r= 5*(-2197655013.01) – (280162.7) (-40024)

√5*15805283879.19 – (280162.7)2 * √5*1464908963.97 – (-40024)2

62
= -10988275065.1- (-11213231904.8)

√79026419395.9 - 78491138471.3 √7324544819.85 – 1601920576

= 224956839.7

√535280924.6 √5722624243.85

= 224956839.7

23136.138 * 75648.028

= 224956839.7

1750203215.24

= 0.13

H1 = There is a positive correlation between sales and profit.

INTERPRETATION:

Since the sales and profit is showing a positive correlation, so we can reject the H0 and
accept
H1.

63
HYPOTHESIS 2-FINDING THE SIGNIFICANCE BETWEEN CURRENT ASSETS
AND CURRENT LIABILITIES

H0 - There is no significance between current assets and current liabilities.

YEAR CURRENT ASSET (X) CURRENT LIABILITY (Y)

2015-2016 11421.00 27846.80

2016-2017 15310.10 35816.40

2017-2018 21495.90 43640.40

2018-2019 19514.90 60701.20

2019-2020 58781.30 93211.20

(SOURCE – SECONDARY DATA)

TABLE NO;4.8.2 TABLE SHOWING CORRELATION BETWEEN CURRENT

ASSETS AND CURRENT LIABILITIES

X Y XY X2 Y2

11421.00 27846.80 318038302.80 130439241.00 775444270.24

15310.10 35816.40 548352665.64 234399162.01 1282814508.96

21495.90 43640.40 938089674.36 462073716.81 1904484512.16

19514.90 60701.20 1184577847.88 380831322.01 3684635681.44

58781.30 93211.20 5479075510.56 3455241229.69 8688327805.44

126523.20 261216.00 8468134001.24 4662984671.52 16335706778.24

r= [5* 8468134001.24] – [126523.20* 261216.00]

64
 √5 * 4662984671.52 – (126523.20)2 √5 * 16335706778.24 – (261216.00)2

= 42340670006.2 - 33049884211.2

√23314923357.6 - 16008120138.2 √81678533891.2 – 68233798656

= 9290785795

√7306803219.4 √13444735235.2

= 9290785795

9911509684.17

= 0.94

H1= There is a significance relation between current assets and current liabilities.

INTERPRETATION

Since the current assets and current liabilities are showing a highly positive
correlation, so we can reject the H0 and accept H1

COMMON SIZE BALANCESHEET 2019-2020 (TABLE 4.8.3)

65
 Particulars 2019 2020

Amount Amount Amount Percentage

Asset
Fixed asset 139448.40 62.56 162938.00 54.25
Non-current investment 35910.20 16.11 30051.80 10.00
Deferred tax Assets 4980.30 2.23 22701.40 7.56
Long term Loans 15103.20 6.78 18725.20 6.23
Other non-current
assets 7950.50 3.57 7175.10 2.39
Total Noncurrent
203392.60 91.25 241591.50 80.43
Assets
Current Investments 1669.60 0.75 8675.00 2.89
Inventories 1.00 0.00 3.10 0.00
Trade Receivables 3840.30 1.72 3810.00 1.27
Cash and Cash
235.30 0.11 3397.60 1.13
Equivalents
Short term loans 1081.50 0.49 758.00 0.25
Other current assets 12687.20 5.69 42137.60 14.03
Total Current Assets 19514.90 8.75 58781.30 19.57
Total Asset 222907.50 100.00 300372.80 100.00
Liabilities
Share capital 98305.90 44.10 101429.20 33.77
Non-Current Liabilities 63900.40 28.67 105732.40 35.20
Short term borrowings 25140.50 11.28 11892.00 3.96
Trade payables 19124.50 8.58 19247.80 6.41
Other current liability 16327.40 7.32 21342.40 7.11
Short term provisions 108.80 0.05 40759.00 13.57
Total Current
60701.20 27.23 93211.20 31.03
Liability
Total Liability 222907.50 100.00 300372.80 100.00
INTERPRETATION:

The common size balance sheet for 2019-2020 shows that the asset and liabilities
increased by a huge margin during the later year, and there are certain elements in
the balance sheet that increased by a lot compared to the previous year.

FINDINGS OF THE STUDY:

66
1. The current liabilities records an increasing trend during the period 2015-2016 to
2019- 2020. It increased from 100% in 2015-2016 to 334.72 % 2019-2020.

2. The current assets records an increasing trend during the period 2015-2016 to 2019-
2020. It increased from 100% in 2015-2016 to 514.677% in 2019-2020.

3. The Sales shows a decreasing trend during the period 2015-2016 to 2019-2020. It
increases from 100% in 2015-2016 to 90.07% in 2019-2020.

4. The Working capital shows a fluctuating trend. It increases during the period from
2015- 2016 to [Link] increases from 100% in 2015-2016 to 250.74 in 2018-2019,
then it shows a decreasing trend.

5. The fixed assets shows an increasing trend during the period 2015-2016 to 2019-
2020. It increases from 100% in 2015-2016 to 170.16 % in 2019-2020.

6. The Net Profit shows a fluctuating trend during the period 2015-2016 to [Link]
decreases from 100% in 2014-2015 to -127.57 in 2016-2017 and then increases a bit to
1.017% in 2017-2018 and then follows a decreasing trend and becomes -463.84% in
2019- 2020.

7. The ideal Current Ratio is 2:1 from the analysis it is concluded that the company's
liquidity position is not good. All those three years current ratio of the company is not
satisfactory because it is below the rule of thumb that is 2:1.

8. The ideal Liquid Ratio is 1:1. Here the liquid ratios from 2015-2016 to 2018-2019 are
below the standard which shows that the company is having a weak liquidity by
changing the policy of credit sales and advance payments. It can be seen that the ratio
increases during the year 2020, which indicates the company tries to improve its
liquidity position.

9. The Solvency Ratio seems to be satisfactory during the 2015-2016 to 2019-2020 as

the ratio for the respective five years is more than 1, indicating investments to the
company are secured.

10. The company shows an increasing trend in Proprietary Ratio, Proprietary ratio is
high during the year 2016 and then keeps on decreasing till 2020. We can conclude that
the proprietary ratio shows a decreasing trend which indicates that the company is more
depends on creditors for its working capital.

67
11. The fixed asset ratio is 0.78 during the last year which shows that the ratio indicates
a better financial position and all its fixed assets using its own long-term funds.

12. The Inventory Turnover Ratio shows a fluctuating trend during the period of the
study. The highest ratio shows in the year 2015-2016 that means inventory sold quickly
than other years.

13. The Debtors Turnover Ratio varies each year slightly. It is high in the year 2016-
2017. It is low in the year 2018-2019, decrease in debtor’s turnover ratio indicates that
the company is not efficient in promptly collecting debts.

14. The company’s creditors turnover was high during 2015-2016 implying that the
company was enjoying the credit period promised by creditors the high turnover ratio
shows during 2015-2016. But creditors turnover ratio kept on decreasing after 2015-
2016 which indicates delay in payment to creditors.

15. The capital turnover ratio shows a decrease trend not good for the company, it does
not achieve maximum sales with minimum amount of capital employed.

16. The fixed asset turnover ratio shows a decreasing trend during the period 2015-2016
to 2019-2020. This means that there is weaker utilization of fixed assets in generating
sales.

17. The working capital turnover ratio shows negative values in the years taken for
study that means utilization of working capital is below par.

18. The net profit is only up in the year 2015-2016 it means profit was available
during that time due to increase in sales. During the year 2016-2017 there was loss
and the value was -
15.93 but the next year the value increased a bit, but after that company again suffered
loss and during 2019-2020 the company is having a net loss ratio of -66.43.

19. The Operating profit ratio is observed that the profit goes decreasing from 2015-
2016 to 2017-2018, then increases during the year 2018-2019. The company enjoys
better operating profit during 2015-2016 and 2018-2019.

20. The ROI for the five years that, ROI is negative during the year 2015-2016 then
increased during 2016-2017 and then again decreased during 2017-2018 and increased
slowly after that and increased by a huge margin to 148.18 during 2019-2020. It shows

68
that the company profitability increased due to efficient utilization of capital employed.

21. The ROE is only high during the year 2015-2016 and lower during the rest of the
years and even negative in some years showing that the company does not generate
much profit due to the shareholders not invested money.

22. Using Du Pont Analysis it is being identified that profit margin, asset turnover and
leverage factors are the drivers of Return On Equity.

69
 CHAPTER - 5

CONCLUSIONS, SUGGESTIONS
AND
RECOMMENDATIONS

CONCLUSION:

70
Efficient and effective financial performance is very important for all organizations
to survive and to have better profitability. Financial performance analysis is very
important to check the profitability and to find the future threats of the company.
For financial performance analysis, I have conducted my study at Bharti Airtel Ltd.
The main objective of the study was to analyse the financial performance and to
secure practical knowledge regarding different aspects of the company. It helped
me to familiarize with a real-world organization system and to understand the
various levels in the organization. Data such as balance sheet and profit and loss
account were collected from MoneyControl website and all the other information
from different online sources and books. The various tools used for the analysis are
ratio analysis, trend analysis, correlation analysis and common size statement
analysis and DuPont analysis. This study comes to the conclusion that, the
company has to increase efficiency in maximum utilization of its resources
effectively.

Identification and Categorization of Risks:

Bharti Airtel faces significant market, credit, and operational risks due to its extensive
global operations. Market risks stem from economic fluctuations and technological
changes, while credit risks are managed through robust credit assessment processes.
Operational risks include cybersecurity threats and regulatory compliance challenges.
Analysis of Risk Management Strategies:
Bharti Airtel employs a variety of strategies to mitigate financial risks effectively.
These include the use of financial derivatives for hedging market exposures,
diversification of credit portfolios, and implementation of stringent operational
controls. The company's proactive approach to risk management contributes to its
overall resilience in a competitive market environment.
Evaluation of Effectiveness:
The effectiveness of Bharti Airtel’s risk management practices is evident in its ability to
maintain financial stability and profitability amidst industry volatility. The company's
strategies not only mitigate potential losses but also enhance its ability to capitalize on
market opportunities and sustain growth.

71
Comparative Analysis and Benchmarking:
Comparative analysis with industry peers highlights Bharti Airtel’s adherence to best
practices in financial risk management. The company’s strategies are aligned with
global standards, demonstrating its commitment to maintaining stakeholder trust and
operational excellence.
Challenges and Future Directions:
Despite effective risk management practices, Bharti Airtel faces ongoing challenges
such as evolving regulatory landscapes and technological disruptions. Future research
should focus on adapting risk management strategies to these challenges, integrating
emerging technologies like AI and blockchain, and conducting longitudinal studies to
assess the sustained impact of these strategies over time.
Implications for Stakeholders:
Stakeholders, including investors, creditors, and regulators, benefit from Bharti Airtel’s
transparent and proactive approach to risk management. Clear communication of risk
exposure and mitigation strategies enhances stakeholder confidence and supports
informed decision-making.

72
SUGGESTIONS
Enhance Technological Integration:
Explore further integration of advanced technologies such as artificial intelligence (AI)
and machine learning (ML) in risk management processes. These technologies can
improve risk assessment accuracy, predictive analytics, and decision-making
capabilities.
Expand Data Analytics Capabilities:
Strengthen data analytics capabilities to enhance real-time monitoring and proactive
management of financial risks. Utilize big data analytics to identify emerging risks and
opportunities more effectively.
Continuous Monitoring and Review:
Implement a robust framework for continuous monitoring and review of risk
management strategies. Regularly update risk assessments to reflect changing market
conditions, regulatory requirements, and technological advancements.
Scenario Planning and Stress Testing:
Conduct regular scenario planning and stress testing exercises to assess the resilience of
current risk management strategies. Simulate potential adverse scenarios to identify
vulnerabilities and refine mitigation plans accordingly.
Enhance Cross-functional Collaboration:
Foster greater collaboration between risk management, finance, operations, and
technology departments. Encourage cross-functional teams to work together in
identifying and addressing integrated risks.
Focus on Regulatory Compliance:
Stay updated with evolving regulatory requirements and proactively adapt risk
management frameworks to ensure compliance. Maintain strong relationships with
regulatory bodies to anticipate and address regulatory changes effectively.
Invest in Talent Development:
Invest in training and development programs to build a skilled workforce capable of
implementing advanced risk management techniques and leveraging technological
innovations effectively.
Benchmark against Industry Best Practices:
Continuously benchmark risk management practices against industry peers and global
standards. Participate in industry forums and collaborations to share best practices and
stay ahead of emerging trends.

73
Enhance Transparency and Communication:
Improve transparency in reporting risk exposures, mitigation strategies, and
performance metrics to stakeholders. Enhance communication channels to foster trust
and maintain stakeholder confidence.
Long-term Strategic Planning:
Integrate financial risk management into long-term strategic planning processes. Align
risk management objectives with business goals to support sustainable growth and
resilience in the face of uncertainties.
Implementing these suggestions can further strengthen Bharti Airtel's financial risk
management framework, enhance organizational agility, and position the company to
navigate complexities in the telecom industry effectively.

RECOMMENDATIONS
1. Enhance Diversification of Risk Mitigation Strategies:
Broaden the use of financial derivatives and hedging instruments to mitigate market
risks associated with fluctuating interest rates, exchange rates, and commodity
prices. Explore innovative hedging strategies tailored to different market conditions.
2. Strengthen Credit Risk Assessment and Management:
Implement advanced credit scoring models and data analytics to enhance the
accuracy of credit risk assessments. Improve monitoring of customer
creditworthiness and counterparties to proactively manage credit exposures.
3. Integrate Advanced Technologies in Risk Management:
Invest in AI, machine learning, and predictive analytics to improve risk
identification and decision-making processes. Leverage big data analytics to
anticipate market trends and potential risks more effectively.
4. Develop Robust Operational Risk Management Framework:
Enhance cybersecurity measures and operational controls to mitigate cyber threats
and ensure compliance with regulatory requirements. Conduct regular audits and
assessments to identify and address operational vulnerabilities.
5. Promote Cross-functional Collaboration:
Foster greater collaboration between risk management, finance, operations, and IT
departments. Establish integrated risk management teams to facilitate holistic risk
assessments and responses across the organization.

74
 6. Adopt Agile Risk Management Practices:
Embrace agile methodologies in risk management to quickly respond to changing
market dynamics and emerging risks. Implement scenario planning and stress
testing exercises to enhance resilience and preparedness.
7. Ensure Compliance with Regulatory Standards:
Stay updated with evolving regulatory requirements in all operational regions.
Proactively adapt policies and procedures to ensure compliance and mitigate
regulatory risks effectively.
8. Invest in Employee Training and Development:
Provide ongoing training programs for employees involved in risk management to
enhance their skills and knowledge. Foster a risk-aware culture throughout the
organization to encourage proactive risk identification and mitigation.
9. Regular Review and Improvement of Risk Management Framework:
Establish a continuous improvement process for the risk management framework.
Conduct regular reviews and assessments to identify areas for enhancement and
align risk management strategies with business objectives.
10. Enhance Stakeholder Communication and Transparency:
Improve transparency in reporting risk exposures, mitigation strategies, and
performance metrics to stakeholders. Strengthen communication channels to build
trust and maintain confidence among investors, creditors, and regulatory authorities.

Implementing these recommendations can further strengthen Bharti Airtel's resilience to

financial risks, enhance operational efficiency, and support sustainable growth in the
competitive telecom industry landscape.

75
 ANNEXURE
(BIBLIOGRAPHY/REFERENCES/
QUESTIONNAIRE)

76
ANNEXURE

77
 BALANCE SHEET AS OF 2016-2020

BALANCE SHEET OF MAR 20 MAR 19 MAR 18 MAR 17 MAR 16

BHARTI AIRTEL (in
Rs. Cr.)

12 months 12 months 12 months 12 months 12 months

EQUITIES AND
LIABILITIES

SHAREHOLDER'S
FUNDS

Equity Share Capital 2,727.80 1,998.70 1,998.70 1,998.70 1,998.70

TOTAL SHARE 2,727.80 1,998.70 1,998.70 1,998.70 1,998.70

CAPITAL

Reserves and Surplus 98,347.20 96,307.20 100,862.2 99,208.60 109,730.4

0 0

TOTAL RESERVES 98,347.20 96,307.20 100,862.20 99,208.60 109,730.40

AND SURPLUS

TOTAL 101,075.00 98,305.90 102,860.90 101,207.30 111,729.10

SHAREHOLDERS
FUNDS

NON-CURRENT
LIABILITIES

Long Term 70,471.20 58,612.00 54,468.10 50,342.10 41,457.00

Borrowings

Deferred Tax 0.00 0.00 0.00 0.00 1,698.40

Liabilities [Net]

Other Long 35,069.30 5,095.70 3,784.90 4,038.80 2,074.40

Term Liabilities

Long Term Provisions 191.90 192.70 183.00 233.00 222.30

TOTAL NON- 105,732.40 63,900.40 58,436.00 54,613.90 45,452.10

CURRENT
LIABILITIES

CURRENT
LIABILITIES

78
Short Term 11,892.00 25,140.50 8,068.00 6,547.80 699.90
Borrowings
Trade Payables 19,247.80 19,124.50 17,699.00 14,969.80 11,970.60

Other 21,312.40 16,327.40 17,747.20 14,169.70 15,057.40

Current
Liabilities

Short Term 40,759.00 108.80 126.20 129.10 118.90

Provisions

TOTAL CURRENT 93,211.20 60,701.20 43,640.40 35,816.40 27,846.80

LIABILITIES

TOTAL CAPITAL AND 300,372.80 222,907.50 204,937.30 191,637.60 185,028.00

LIABILITIES

ASSETS

NON-CURRENT
ASSETS

Tangible Assets 89,331.40 57,009.90 47,691.10 38,117.60 31,267.30

Intangible Assets 72,347.90 76,802.00 74,918.30 73,405.20 60,658.20

Capital Work- 1,233.20 5,366.20 2,738.70 1,181.80 2,858.80

In- Progress

Other Assets 0.00 0.00 0.00 0.00 0.00

FIXED ASSETS 162,938.00 139,448.40 128,152.10 121,123.00 95,755.80

Non- 30,051.80 35,910.20 48,128.20 45,959.00 69,896.50

Current
Investmen
ts

Deferred Tax 22,701.40 4,980.30 1,424.40 880.80 2,307.00

Assets [Net]

Long Term Loans 18,725.20 15,103.20 1,029.00 1,038.90 2,886.10

And Advances

Other Non- 7,175.10 7,950.50 4,707.70 5,952.90 2,761.60

Current Assets

TOTAL NON- 241,591.50 203,392.60 183,441.40 174,954.60 173,607.00

CURRENT ASSETS

CURRENT ASSETS

79
Current Investments 8,675.00 1,669.60 0.00 0.00 0.80

Inventories 3.10 1.00 6.30 3.90 5.30

Trade Receivables 3,810.00 3,840.30 4,319.60 3,211.80 3,172.40

Cash And 3,397.60 235.30 545.10 173.40 46.60

Cash
Equivalents

Short Term Loans 758.00 1,081.50 7,249.60 7,208.10 4,337.60

And Advances

OtherCurrentAssets 42,137.60 12,687.20 9,375.30 6,085.80 3,858.30

TOTAL CURRENT 58,781.30 19,514.90 21,495.90 16,683.00 11,421.00

ASSETS

TOTAL ASSETS 300,372.80 222,907.50 204,937.30 191,637.60 185,028.00

OTHER ADDITIONAL
INFORMATION

CONTINGENT
LIABILITIES,
COMMITMENTS

Contingent Liabilities 12,840.40 19,352.70 31,187.00 27,419.40 10,790.00

CIF VALUE OF
IMPORTS

Raw Materials 0.00 0.00 0.00 0.00 0.00

Stores, Spares 0.00 0.00 0.00 0.00 0.00

And Loose Tools

Trade/Other Goods 0.00 0.00 0.00 0.00 0.00

Capital Goods 0.00 0.00 0.00 0.00 0.00

EXPENDITURE IN
FOREIGN
EXCHANGE

Expenditure In 11,969.40 22,677.50 19,654.00 0.00 0.00

Foreign Currency

80
REMITTANCES IN
FOREIGN
CURRENCIES FOR
DIVIDENDS

Dividend -- -- -- -- --
Remittance In
Foreign Currency

EARNINGS IN
FOREIGN
EXCHANGE

FOB Value Of Goods -- -- -- -- --

Other Earnings 4,506.00 4,592.90 4,508.80 -- --

BONUS DETAILS

Bonus Equity 1,566.39 1,566.39 1,566.39 1,566.39 1,566.39

Share Capital

NON-CURRENT
INVESTMENTS

Non-Current -- -- -- -- 51,945.20
Investments
Quoted Market
Value

Non-Current 5.20 6.30 6.30 5.20 20,091.10

Investments
Unquoted Book
Value

CURRENT
INVESTMENTS

Current -- -- -- -- --
Investments
Quoted Market
Value

Current 26.40 -- -- -- --
Investments
Unquoted Book
Value

81
BIBLIOGRAPHY

BOOKS:

 Maheshwari, S. N. (2002). Financial management: Principles and practice for

[Link]., MBA, Ca and ICWA examination. Sultan Chand.
 Pandey I M, Financial Management 9th Edition Vikas Publications House Pvt
Ltd.
 Kothari C R- Research Methodology: Method and Techniques, New age
international publishers, 2nd revised edition, New Delhi,2008.
 K.G.C Nair “Management Accounting”, Chandbooks Publications,1st edition,
Trivandrum,2008.
 Gupta B L, Management of Liquidity and Profitability, Arihanth Publishing
House, Jaipur.

WEBSITES:

 [Link]
 [Link]
 [Link]
 [Link]
 [Link]
 [Link]

JOURNALS:

 MANISHA B, RATHOD (2012), Financial Performance Analysis. Global

Journal for Research Analysis
 Financial Planning & Analysis and Business Performance Management. (2018).
ANNUAL REPORTS:

82
Annual Financial Report of Bharti Airtel Ltd from the financial year 2015-2016 to 2019-
2020.

References

 Malz, Allan M. (2011). Financial Risk Management: Models, History, and

Institutions. John Wiley & Sons.
 Christoffersen, Peter (2012). Principles of Financial Risk Management. Academic
Press.
 Allen, Steve L. (2013). Financial Risk Management: A Practitioner's Guide to
Managing Market and Credit Risk. Wiley Finance.
 Alexander, Carol. (2008). Market Risk Analysis, Practical Financial Econometrics.
John Wiley & Sons.
 Crouhy, Michel, et al. (2000). The Essentials of Risk Management. McGraw-Hill.
 Dowd, Kevin. (2014). Measuring Market Risk. John Wiley & Sons.
 Mello, Antonio S., and John E. Parsons. (2000). Hedging and Coordinated Risk
Management. Journal of Risk and Insurance.
 Graham, John R., and Campbell R. Harvey. (2001). The Theory and Practice of
Corporate Finance: Evidence from the Field. Journal of Financial Economics.
 Rachev, Svetlozar T., et al. (2015). Financial Risk Management: Applications in
Market, Credit, Asset and Liability Management and Firmwide Risk. Springer.
 Bessis, Joel. (2002). Risk Management in Banking. John Wiley & Sons.
 Journal of Risk and Financial Management - Open Access Journal.
 Journal of Financial Risk Management - Open Access Journal.
 Risk Management: An International Journal - Published by Palgrave
Macmillan.
 Telecom Regulatory Authority of India (TRAI) Reports and Publications -
Available at: [Link]
 Global System for Mobile Communications (GSMA) Reports and Insights -
Available at: [Link]
 Financial reports and disclosures from Bharti Airtel Pvt Ltd - Available on their
investor relations website.
 McKinsey & Company Telecom Industry Insights and Publications - Available
at: [Link]

83
  Deloitte Insights and Reports on Telecom Sector Risk Management - Available
at: [Link]

QUESTIONNAIRE

1. Which of the following is NOT a type of financial risk faced by telecom companies
like Bharti Airtel?

A. Market risk
B. Operational risk
C. Political risk
D. Credit risk

2. What is the primary objective of financial risk management in telecom companies?

A. Maximizing revenue
B. Minimizing taxes
C. Protecting against potential losses
D. Expanding market share

3. Which financial instrument is commonly used by telecom companies to hedge against

currency fluctuations?

A. Stocks
B. Bonds
C. Futures contracts
D. Real estate

4. How does Bharti Airtel manage credit risk?

A. By avoiding all credit transactions

B. By conducting thorough credit assessments
C. By increasing debt levels
D. By ignoring credit ratings

84
5. What role does technology play in enhancing financial risk management practices?

A. It has no impact on risk management

B. It improves risk assessment accuracy
C. It complicates risk management efforts
D. It increases operational costs

6. Which regulatory aspect is crucial for telecom companies to consider in their risk
management strategies?

A. Environmental regulations
B. Labor laws
C. Telecommunications regulations
D. Healthcare regulations

7. What is a key challenge faced by Bharti Airtel in financial risk management?

A. Lack of skilled workforce

B. Excessive profitability
C. Stable market conditions
D. Transparent reporting

8. How does Bharti Airtel ensure transparency in its financial risk management
practices?

A. By not disclosing any information

B. By conducting regular audits
C. By ignoring stakeholder concerns
D. By avoiding communication

9. What is the benefit of effective financial risk management for telecom companies?

85
A. Increased financial losses
B. Improved stability and profitability
C. Reduced market share
D. Higher tax liabilities

10. How does Bharti Airtel compare its risk management practices with industry peers?
A. By not comparing at all
B. By participating in industry forums
C. By withholding information
D. By ignoring industry trends

11. What external factors contribute to market risk for telecom companies?

A. Technological advancements
B. Regulatory changes
C. Economic fluctuations
D. All of the above

12. Which financial ratio is commonly used to assess a telecom company’s liquidity
risk?

A. Debt-to-Equity Ratio
B. Current Ratio
C. Return on Investment (ROI)
D. Price-to-Earnings (P/E) Ratio

13. How does Bharti Airtel mitigate operational risks associated with cybersecurity?

A. By not using any cybersecurity measures

B. By outsourcing all IT operations
C. By implementing robust cybersecurity protocols
D. By ignoring cybersecurity threats

14. What impact can effective financial risk management have on shareholder value?

A. Decreased shareholder value

B. Increased shareholder value

86
C. No impact on shareholder value
D. Uncertain impact on shareholder value

15. What strategic approach does Bharti Airtel employ to manage interest rate risks?

A. Fixed interest rates

B. Variable interest rates
C. Interest rate swaps
D. No strategy in place

16. In which regions does Bharti Airtel primarily operate, influencing its exposure to
different regulatory environments?

A. North America and Europe

B. Asia-Pacific and Africa
C. Latin America and Middle East
D. All of the above

17. How does Bharti Airtel assess and manage supplier-related risks?

A. By relying on a single supplier

B. By diversifying its supplier base
C. By not assessing supplier risks
D. By outsourcing supplier management

18. What financial metric is used to evaluate a telecom company’s ability to meet short-
term financial obligations?

A. Return on Equity (ROE)

B. Debt Service Coverage Ratio (DSCR)
C. Quick Ratio
D. Inventory Turnover Ratio

19. Which department within Bharti Airtel is primarily responsible for overseeing
financial risk management?

87
A. Human Resources
B. Marketing
C. Finance
D. Operations

20. What role does the board of directors play in Bharti Airtel’s financial risk
management strategy?

A. No role
B. Provides oversight and guidance
C. Executes risk management decisions
D. Acts independently from risk management

88