PROJECT REPORT

Submitted for the Degree of B.Com Honours in Accounting and

Finance under the University of Calcutta

Title of the Project

Financial Statement Analysis of an IT Company in current Pandemic Situation – A
Case study of Wipro Ltd

Submitted By

Name of the Student : Umay Kulsum

Roll Number : 221126-11-0144

Registration Number : 126-1211-1283-

22 College Roll Number : 330

Supervised By : Dr. Shahnaz Parveen

Name of the College : Umeschandra College

Month & Year of Submission : June, 2025

 ACKNOWLEDGEMENT
I would like to express my heartfelt gratitude to the University of
Calcutta for granting me the invaluable opportunity to work on this
project. The completion and success of this project would not have
been possible without the unwavering support, constant guidance,
and insightful suggestions provided throughout the journey.
I am deeply indebted to my esteemed supervisor, Dr. Shahnaz
Parveen, whose expertise, encouragement, and meticulous
supervision have been instrumental in shaping the final outcome of
this project. Her invaluable advice and constructive feedback greatly
enhanced the quality and depth of my work, adding significant
value to the project.
I feel profoundly privileged and honored to have received her
guidance, which enabled me to complete my project within the
stipulated time frame. Her patience, kindness, and dedication have
been a source of motivation and inspiration for me throughout
this endeavor.
Once again, I extend my sincere gratitude to the University of
Calcutta, my supervisor, and all those who have supported and
guided me during this journey, making this project a fruitful
and enriching experience.

Signature
 Annexure - IA

Supervisor’s Certificate

This is to certify that Miss Umay Kulsum, student of B.Com

(Honors) in Accounting & Finance of Umeschandra College under
University of Calcutta has worked under my supervision & Guidance
for her project work and Prepared a Project report with the title
“Financial Statement analysis of an IT company in current pandemic
situation – A case study of Wipro Ltd”, which she is submitting, is her
genuine and original work to the best of my knowledge.

Signature
Place: Kolkata Name: Dr. Shahnaz Parveen
Date:- Designation: SACT - I
Name of the College:
Umeschandra College
 Annexure - IB

Student’s Certificate

I hereby declare that the project work with the title

“FINANCIAL STATEMENT ANALYSIS OF AN IT
COMPANT IN CURRENT PANDEMIC SITUATION – A
CASE STUDY OF WIPRO LTD” submitted by me for the
partial fulfilment of the degree of B.Com (Honours) in
Accounting & Finance in Umeschandra College under the
University of Calcutta is my original work and has not
been submitted earlier to any other University /Institution
for the fulfillment of the requirement for any course of
study.
I also declare that no chapter of this manuscript in whole or in
part has been incorporated in this report from any earlier work
done by others or by me. However, extracts of any literature
which has been used for this report has been duly acknowledged
providing details of such literature in the references.

Signature
Place:-
Name:- Umay Kulsum
Date:-
Address:- 30C, Road, Hatiara
Kolkata:-700157
Registration No:-
126-1211-1283-22
 Table of Contents

Serial No. Contents Page No.

1 Introduction
1.1 Background of the study 5
1.2 Objective of the study 6

2 Conceptual Framework
2.1 Concept 7
2.2 Scenarios 7
2.3 Company profile 8

3 Data Analysis and Findings

3.1 Research Design 10
3.2 Research methodology 11
3.3 Analysis & Findings 12

4 Conclusion and Recommendations 21

4
 FINANCAL STATEMENT ANALYSIS

1. INTRODUCTION

1.1 BACKGROUNG OF THE STUDY

Financial statements are prepared primarily for decision making. But the data reported in the
financial statements are not directly usable in decision making. They need to be analyzed and
interpreted.

Financial statement analysis is the process of identifying the strength and the weakness of the
firm by properly establishing the relationships between the items of financial statements. It helps
users make an understanding of past performance of the firm based on which they make
prediction about future performance and risk of the firm.

Modern financial statement analysis is not however, restricted to only financial statements. It
also covers the study of the environment both internal and external, in which the company or
firm operates. Thus, financial statement analysis means the analysis of relevant financial data
extracted from financial statements along with non-financial factors affecting the firm such as
competitive and regulatory environment, customer relation, risk involved, employee morale etc.

The relevance of financial statement analysis are as follows:

 To evaluate the financial health of the business.

 To assess the financial risk and business risk associated with the business.
 To judge the existing earning capacity of the business and to provide the basis for
making predictions about future earning prospect.
 To evaluate the solvency position of the firm and thereby its long term debt
paying capacity.

The significance of financial statements is related to provide information about the financial
position, and financial performance of the firm to its different stakeholders. The necessity of
financial analysis can be discussed as follows:

1. Investment decision of owners and lenders: Financial statement analysis helps to assess
the risk of return on equity investment, the solvency of the firm.

5
2. Liquidity assessment: Liquidity, i.e., the short term debt paying capacity of the firm gets
special significance, both from the view point of supplier and management.
3. Assessment of profitability: By means of various techniques, e.g., Ratio analysis, EVA
analysis, Comparative analysis etc., makes assessment of the profitability to determine whether
profit earned by the firm is sufficient as compared with the benchmark figure.
4. Performance evaluation: Financial statement analysis ascertains the competitiveness of the
firm by regrouping and analyzing the figures contained financial statements. Its pinpoints the
strength and weakness of the business.
5. Forecasting: It is the financial statement analysis which makes accounting data amenable to
forecasting of future profitability and cash flows. Its searches leading indicators in the
historical data that provide insight into future.

1.2 OBJECTIVE OF THE STUDY

The primary objective of the study is is to understand and diagnose the information contained in
the financial statements (i.e., Income statement, Balance sheet & Cash flow) with a view to
judge the profitability and financial soundness of the firm, and to make forecast about future
prospects of the firm.

The following purposes may bring out through the financial statement analysis:

 To evaluate the financial health of the business.

 To assess the financial risk and business risk associated with the business.
 To judge the existing earning capacity of the business and to provide the basis for
making predictions about future earning prospect.
 To evaluate the solvency position of the firm and thereby its long term debt
paying capacity.
 To assess the extent of efficiency with which various resources of the firm are
being utilized.
 To compare the financial performance of the firm with that of similar other firms.

6
 2. Conceptual Understanding

2.1 CONCEPT

2.1.1 Definition

Financial Statement Analysis refers to the analysis of accounting data reported in the financial
statements along with various non- financial factors affecting the firm with the help of various
statistical tools and techniques that have been developed and tested within the well- defined
framework of decision theory.

2.1.2 Features of Financial Statement Analysis

1. Scope: It is not only confined to only information from conventional financial

statements. It also considers various non-financial information such as competitive
environment, regulatory environment, customer relation, risk with the firm,
employee morale etc.
2. Focus: the main thrust of financial statement analysis is on future. It processes both
past and present information for making prediction about the future of the firm. Thus, it
is forward looking.
3. Tools of Analysis: the analysis resorts to sophisticated statistical and mathematical
tools such ratios, percentages etc.
4. Approaches to Analysis: Decision rules are made both in normative way and
empirical verification.
5. Parties Concerned: It caters to the information needs of multiple stakeholders. Thus,
it has broader concept in order to serve the interest of lenders.
6. Vision: It emphasizes on profitability and financial position of the firm both from
short term and long term point of view.

2.2 Scenarios of Information Technology Industries

2.2.1 National Scenario of Information Technology Industries

Information Technology in India is an industry consisting of two major components: IT services

7
and Business Process Outsourcing (BPO). The sector has increased its contribution to India’s
GDP from1`2% in 1998 to 7`7% in 2017. According to NASSCOM, the sector aggregated
revenues US $ 180 Billion in 2019 with export revenue of standing at US $ 99 Billion and
domestic revenue at US $ at 48 Billion, growing by over 13%. As of 2020, India’s IT workforce
accounts for 4.36 million employees.

India’s IT services was born in Mumbai in 1967 with a creation of Tata Consultancy
Services (TCS). In the Contemporary world economy, India is the largest exporter of IT.
The Technologically-inclined services sector in India accounts for 40% of the country’s
GDP and 30% of export earnings as of 2006, while employing only 25% of its workforce,
according to Sharma (2006). The Top five Indian IT services providers are Tata Consultancy
Services, Infosys, Wipro, Tech Mahindra and HCL Technologies.

2.2.2 International Scenario of Information Technology Industries

The global IT market is expected to grow from $7850.57 billion in 2020 to $8370.95 billion in
2021 at a compound annual growth rate of 6.6%. The growth is mainly due to the companies
rearranging their operations and recovering from the COVID-19 impact, which had earlier led to
restrictive containment measures involving social distancing, remote working, and the closure of
commercial activities that resulted in operational challenges. The market is expected to reach
$11866.34 billion in 2025 at a CAGR of 9%.

North America was the largest region in the global information technology market, accounting
for 34% of the market in 2020. Asia Pacific was the second largest region accounting for 32% of
the global market. Africa was the smallest region in the global information technology market.

Major companies in the market include AT&T, Apple, Verizon communications Inc., China
Mobile ltd., Microsoft. The countries covered in the global information technology market are
Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK,
USA.

2.3 Company Profile

Wipro Limited is an Indian multinational corporation that provides information technology,

including systems integration, consulting and business process services, IT enabled services and

8
R&D services. It is headquartered in Bangalore, Karnataka, India. In 2013, Wipro separated its
non IT businesses and formed the privately owned Wipro Enterprises. Wipro has shifted to work
from anywhere model since March 2020 so employees can work from anywhere in the world
except Wipro office premises due to COVID-19 pandemic.

SOURCE – Wikipedia en.wikipedia.org

2.3.1 History

The company was incorporated on 29 th December 1945, in Amalner, Maharashtra by Mohamed

Premji as “Western India Palm Refined Oil Limited”, Later abbreviated to “WIPRO”. It was
initially set up as a manufacturer of vegetables and refined oils in Amalner, Maharashtra, British
India, under the trade names of Kisan, Sunflower and Camel.

In 1966, after Mohamed Premji’s death, his son Azim Premji took over WIPRO as its chairman
at the age of 21.

During the 1970s and 1980, the company shifted its focus to new opportunities in the IT and
computing industry. In 1977 the name of company changed from Western India Palm Refined
Oil Limited to WIPRO Products Limited. In 1982 the name was changed again, from WIPRO
Products Limited to WIPRO Limited. WIPRO continued to expand the consumer products
domain.

Between 1986 -1992, In 1988 WIPRO added mobile hydraulic cylinders and heavy-duty
industrial cylinders to its line of product. In 1989 WIPRO GE Medical systems Pvt. Ltd was set
up in a joint

9
venture company with US which manufacture, sales, and service of diagnostic and imaging
products. In 1991, tipping systems and Eaton hydraulic products were launched. In 1992, it
offers standard hydraulic cylinders for construction equipment and truck tipping systems. In
1990 WIPRO comes with the variety of range of baby toiletries.

Between 1994 -2000, In 1995 WIPRO set up overseas design center for overseas clients. WIPRO
Infotech and WIPRO systems were amalgamated with WIPRO in April 1995. Meanwhile in
1994- 95 WIPRO’s manufacturing and development facilities secured ISO’s Certification. In
1999 WIPRO acquired WIPRO Acer and released new products. WIPRO got US- based National
Software Testing Laboratory (NSTL) certification. Meanwhile WIPRO joined KPN (Royal
Dutch Telecom) to form a joint venture company “WIPRO Net Ltd.” To provide internet
services in India. In 2000 WIPRO was listed on New York Stock Exchange.

Between 2001-2011, In February, 2002 WIPRO became first software technology and service
company in India to be ISO 14001 Certification. WIPRO Consumer care and lighting group
enters the market. As the company grew, a study revealed that WIPRO was the fastest wealth
creator for 5 years (1997-20002). It set up wholly owned subsidiary for consumer care and
lighting products. In 2004 WIPRO joined billion dollar club. In this way it rapidly increases its
business line. In 2008 the firm entered the clean energy business with WIPRO Eco Energy. In
April, 2011 it acquires Global Oil and gas Technology practice.

Between2012-2018, WIPRO demerged its non-IT businesses into a separate company called
WIPRO Enterprises. In 2018 the company began building software to help with general data
protection regulation (GDPR) in Europe.

Further in due course of action in March, 2021 WIPRO acquired CAPCO, a twenty two year old
British consultancy firm. The deal was completed in April 2021.

3. DATA ANALYSIS AND FINDINGS

3.1 Research design

The research design is explanatory till identification of findings of the Ratios Analysis of
Financial Statements. Later it becomes descriptive when it comes to interpreting the effects of
the Ratios Analysis. Descriptive research, also known as statistical research, describes data and

10
characteristics about the phenomenon being studied. Descriptive research answers the questions
what, where, when and how. Although the data description is actual, accurate, and systematic,
the research cannot describe what caused a situation. Thus, descriptive research cannot be used
to create a causal relationship, where one variable affects another. In other words, descriptive
research can be said to have a low requirement for internal validity. The description is used for
frequencies, averages and other statistical calculations. Often the best approach, prior to writing
descriptive research, is to conduct a survey investigation. Qualitative research often has the aim
of description and researchers may follow up with examinations of why the observations exist
and what the implication of the findings are.

3.2 Research Methodology

3.2.1 Sample

The sample is collected from WIPRO Ltd. financial statements i.e., Income statement and
Balance sheet of the company.

3.2.2 Data Type

The data which is used here is secondary data which was collected by referring to various
websites, journals, books & Company’s annual report.

3.2.3 Data Source

The data have been collected from various secondary sources. It was mainly gathered from
Money Control App and Company’s websites, whereas I have taken references of various
research articles, journals related to concerned area of study.

3.2.4 Period of study

The period of study is for six months. There are three phases in which the work has taken place.
The first phase has objective and literature review. Then followed by data analysis and
findings, and thus finally drafting of conclusion and recommendation.

3.2.5 Tools used

11
The tools used for the data interpretation is ratio analysis and it has been represented graphically
using bar diagram.

3.3 Analysis and Findings

From the study of the financial statements of WIPRO Ltd. by using ratio analysis as a technique
of analyzing financial statements of the company. I have analyzed about the trends of its ratios
and factors behind the changes in trend. After the above analysis finally, I found the financial
performance of the company as under:

Current ratio of WIPRO Ltd. was 2.96 in the Financial Year 2019, it reduces to 2.78 in the year
2020 and further it reduces to 2.50 in the year 2021.We can see a gradual fall in the Current
Ratio of the company over the past three years but still the ratio is above the industrial norms
which means that the company has good capacity of paying its short term liabilities.

QUICK RATIO
Quick Ratio=Quick Assets/Quick Liabilities
Table showing calculation of Quick ratio
Year Quick Asset Quick Liabilities Ratio
2021 45,288.50 18,132.40 2.50
2020 45,539.20 16,443.80 2.77
2019 47,390.10 16,144.60 2.94

Table:2

Quick ratio
3.00
2.90
2.80
2.70
Ratio

2.60
2.50
2.40
2.30
2.20
1 2 3
Years
12
 Fig:2
Source: Table
2
Quick ratio is the ratio of quick assets to quick liabilities. It is a measure for judging
immediate solvency position of a firm.
Acid test ratio or quick ratio is a refinement over current ratio. As it excludes inventory from
current assets, it can more effectively measure the short term debt paying ability. The industrial
benchmark o quick ratio is 1:1. The reason behind this is that each rupee of current liability
should be backed by quick assets of equal value.

The quick ratio of WIPRO Ltd. is 2.94 in the current financial year. It was 2.77 in the year 2020
and 2.50 in the year 2019. We can clearly see the increasing trend of Quick Ratio of the
company. By seeing this trend of the quick ratio we can say that the company is in a good
position to meet its short term liabilities.

DEBT-EQUITY RATIO
Debt-equity Ratio=Total debt/Shareholders Fund
Table showing calculation of Debt-equity ratio
YEAR Total Debt Equity Ratio
2021 5,881.41 45,241.60 0.13
2020 5,109.91 46,453.70 0.11
2019 4,939.20 49,392.00 0.10
Table:3

Debt-Equity Ratio
0.14
0.12
0.10
0.08
Ratio

0.06
0.04
0.02
-
1 2 3
Years
13
 Fig.3:
Source :Table 3
This ratio expresses the relationship between debt capital and shareholder’s fund of the
company. Debt-Equity Ratio basically tells us about the Long term solvency of the firm as it is
directly related to long term debt paying capacity of the firm.
Debt equity ratio indicates the respective claim of outsiders and owners in the assets of the firm.
So it reflects the financial soundness of the firm. A high D/E ratio indicates that dependence of

firm on outside fund is high. In this case the firm is exposed to greater financial risk. On the
other hand, a firm with low D/E ratio will provide a high margin of safety to outside suppliers
of capital. They become sure about return of their capital in time.

The debt-equity ratio of WIPRO Ltd. In 2019 was 0.10, in 2020 it was 0.11 and in 2021 it is
0.13. By looking at the data we can find debt-equity of the company is increasing but still it is
not a matter of worry as it is pretty low and the investors need not to worry about return of their
capital in time.

PROPRIETARY RATIO
Proprietary Ratio=Shareholders' Fund/Total Assets*100
Table showing calculation of Proprietary ratio
Year Shareholders' Fund Total assets Ratio
2021 45,241.60 65,736.30 68.82
2020 46,453.70 65,306.40 71.13
2019 49,392.00 66,998.10 73.72
Table:4

Propritary ratio
74.00
73.00
72.00
71.00
Ratio

70.00
69.00
68.00
67.00 14
66.00
1 2 3
Years
 Fig.4:
Source :Table 4

Proprietary ratio is the ratio of proprietary fund to total assets and is generally expressed as
percentage.

Proprietary ratio indicates how much of the total assets have been procured with ownership fund.
It is the test of solvency position of the firm. Higher this ratio, lower is the dependence on
external fund and hence, greater is the solvency of the firm.

Proprietary Ratio of Wipro Ltd. was 73.72% in 2019, 71.13% in the year 2020 and it is 68.82%
in the year 2021. Proprietary ratio of the company is showing a decreasing trend over the few
years. Higher Proprietary ratio shows the lesser dependence on external funds, so by analyzing
the above trend we can say that the company is not showing conservatism in using debt capital.
Or we can say that the company may have started taking the benefit of trading on equity.

NET PROFIT RATIO

Net profit Ratio=Net profit/Sales*100
Table showing calculation of Net profit ratio
Year Net profit Sales Ratio
2021 10,060.90 50,299.40 20.00
2020 8,680.70 50,387.70 17.23
2019 7,614.00 48,029.80 15.85
Table:5

Net Profit
ratio
25.00

20.00

15.00
Ratio

10.00

5.00

-
1 2 3
Years

15
 Fig.5:
Source :Table 5

This is the ratio of net profit to sales and usually expressed in percentage. This ratio measures
the profit earning capacity of the firm.

This ratio indicates the efficiency of management in manufacturing, administering and selling
the product. This ratio is of special interest to the owners as it states how much sales is left for
them after meeting all expenses. A high net profit ratio enables the firm to withstand the
hardship in adverse situation like falling share price, increasing raw material cost or decline in
demand etc. so, higher this ratio, more is the return for shareholders.

The Net Profit Ratio of WIPRO Ltd shows an increasing trend in the past few years. As it was
15.85% in the year 2019, 17.23% in the year 2020 and 20% in the year 2021. The increasing
trend of the Net Profit ratio shows that the management is doing well in maintaining overheads
of the company. This may have various positive effects on the stakeholders of the company.

RETURN ON CAPITAL EMPLOYED

Return on capital employed=Profit before interest & tax/Capital employed
Table showing calculation of Return on capital employed
YEAR PBIT Capital employed Ratio
2021 12,684.8 45,241.60 0.28
2020 11,007.70 46,453.70 0.24
2019 9,870.50 49,392.00 0.20
Table:6

Return on Capital employed

0.30
0.25
0.20
Ratio

0.15
0.10
0.05
-
1 2 3
Years
16
 Fig.6:
Source :Table 6

This ratio measures overall efficiency with which the firm is being run by the management. It is
the barometer of overall performance of the firm.

Return on net capital employed indicates the earning capacity on net assets. If the rate of return
of the firm is poor, it would be very difficult to reward the investors for their investment. The
return on capital employed is actually the multiple of net profit margin and capital turnover
ratio.

The analysis of return on capital employed of the company shows that it has been increasing in
past years but still not increased enough. It was 0.20 in the year 2019, 0.24 in 2020 and 0.28 in
the year 2021. However, we need to analyze the industry average of ROCE before
commenting anything about the ratio.

RETURN ON SHAREHOLDERS' EQUITY

Return on shareholders' equity=Net profit after tax/Shareholders' Fund
Table showing calculation of Return on shareholders' equity
Year Net profit after tax Shareholders' Fund Ratio
2021 10,060.90 45,241.60 0.22
2020 8,680.70 46,453.70 0.19
2019 7,614.00 49,392.00 0.15
Table:7

Return on Shareholders' Equity

0.25
0.20

0.15
Ratio

0.10

0.05

-
1 2 3
Years 17
 Fig.7:
Source :Table 7

The return on shareholder’s equity indicates how efficiently the shareholder’s fund are being
managed in the firm. It is one of the objectives of management to maximize shareholder’s return.

This ratio indicates how far this objective is being fulfilled. Therefore, this ratio is of special
interest to the existing as well as prospective shareholders. To judge the adequacy of return on
equity, it should be compared with industry average.

The ROE of WIPRO Ltd. shows an increasing trend in the past three financial years as it was
initially 15% in the year 2019, 19% in 2020 and 22% in the financial year 2021. Looking at the
statistics it seems that the company is doing well in this area but again we need to check the
industry average before giving any comment for the ratio.

EARNING PER SHARE

Earnings per share=Profit after tax and preference dividend (PAT)/No. of Equity shares
Table showing calculation of Earnings Per Share
Year PAT No. of Equity shares Ratio
2021 10,060.90 565.00 17.81
2020 8,680.70 583.00 14.89
2019 7,614.00 601.00 12.67
Table:8

Earning per share

20.00

15.00
Ratio

10.00

5.00

-
1 2 3
Years

18
 Fig.8:

Source :Table 8

Earnings per share is the ratio of total earning available to equity shareholders to the total
number of equity shares.

This ratio indicates profitability per equity share basis and is widely used by the prospective
equity shareholders as guide to investment decision in the firm. The ratio should be compared
with industry average ratio before arriving at any conclusion regarding the profitability per
share.

EPS of WIPRO Ltd. shows an increasing trend as it is initially 12.67 in the year 2019, 14.89 in
the year 2020 and 17.81 in the year 2021. This trend shows that earnings available for equity
shareholders has been increased in the recent past which is good for the stakeholders and for the
prospective investors as well.

OPERATING RATIO
Operating Ratio = Operating Cost/ Sales*100
Table showing calculation of Operating Ratio
YEAR Operating Cost Sales Ratio
2021 10,675.40 50,299.40 21.22
2020 12,378.40 50,387.70 24.57
2019 12,505.10 48,029.80 26.04
Table:9

Operating Ratio
30.00

20.00
Ratio

10.00

-
1 2 3
Years

Fig9:
19
 Source :Table 9

This is the ratio of Operating cost to Sales and is expressed in percentage. Operating cost consist
of COGS, general and administrative overhead and selling and distribution overhead. Non-
operating expenses like interest, abnormal loss etc. are not considered.

The operating ratio is the yardstick of operating efficiency of the firm. It reveals how much of
the sales revenue has been eaten up by operating cost. So, higher this ratio, more is the strain to
be faced by the firm in meeting obligation towards lenders and owners. The trend of this ratio
helps us to find out whether the operating efficiency has improved or not.

The operating ratio of WIPRO Ltd. is decreasing in the past few years. The data shows that
it was 26.04% in the year 2019, 24.57% in the year 2020 and 21.22% in the year 2021. By
analyzing the above data it can be said that the company’s efficiency towards its operating
expenses has been improved in the current past.

DIVIDEND PAYOUT RATIO

Dividend payout ratio=Dividend per share/Earning per share
Table showing calculation of Dividend Payout Ratio
Year Dividend per share Earnings per share Ratio
2021 17.81 17.81 1.00
2020 14.88 14.88 1.00
2019 12.67 12.67 1.00
Table:10

Dividend payout ratio

1.00
0.80
0.60
Ratio

0.40
0.20
-
1 2 3
Year

Fig10:
20
 Source :Table 10

This is the ratio of dividend per share to earnings per share.

The ratio indicates how much the shareholders are getting back in the form of percentage returns
from the overall profit earned by the company. It is an important metric to determine how the
company is functioning or operating and whether it has enough growth potential.

The dividend payout ratio of WIPRO Ltd. has been constant for the few years. The ratio is
unitary in the last three financial years which shows a constant return to the shareholders in form
of percentage from the overall profit earned by the company.

CONCLUSION AND RECOMMENDATIONS

Financial Year 2018-19 2019-20 2020-21

Current Ratio 2.96 2.78 2.50
Quick Ratio 2.94 2.77 2.50
Debt Equity Ratio 0.10 0.11 0.13
Proprietary Ratio 73.72 71.13 68.82
Net Profit Ratio 15.25 17.23 20.00
ROCE 0.20 0.24 0.28
ROE 0.15 0.19 0.22
Earnings Per Share 12.67 14.89 17.81
Operating Ratio 26.04 24.57 21.22
Dividend Payout Ratio 1 1 1

After analyzing the project we can reach about the conclusion of the ratio analysis of the
financial statements of the company.

Liquidity Analysis: In order to analyze liquidity position, ratios used are (i) Current Ratio and
(ii) Quick Ratio which is computed on the basis of current assets, liquid assets and current
liabilities. The analysis of liquidity position shows that the company doesn’t hold much of
inventory or overdrafts as the difference between current and quick ratio is negligible.
Both
21
liquidity ratios of the company are quite high from the industrial benchmark, which means
company can use its liquid cash for some investments or it can keep some more inventories
with it only after considering inventory handling costs.

Solvency Analysis: It is also known as Financial Structure or Capital Structure Ratio. It

indicates company’s ability to repay fixed interest charges and principal on long term debts on
regular basis. It is mainly studied by employing (i) Debt- Equity Ratio and (ii) Proprietary Ratio.
In the analysis of debt equity we can say that it is quite low. This shows that company is not
depending on long term loans and other outside debts for capital purpose. The company should
use debt capital in its capital structure as it is considered to cheapest way of raising finance. The
Proprietary Ratio of the company is very high whi external funds in order to procure ownership
funds. It shows the better solvency position of the company. But the company can reduce it a bit
if it wants to enjoy the benefits of Trading on Equity.

Profitability Analysis: It is used to denote whether concern is profitable or not. It study

whether company is able to meet its shareholders expectation with regards to return on their
investment. It is mainly studied by using important ratios such as (i) Return on Equity, (ii)
Return on Capital Employed (iii) Earnings per Share & (iv) Net Profit Ratio. The analysis of
Net Profit Ratio shows that it has increased from 15% to 20% in past three financial years,
which is good for the company and its stakeholders. The company has maintain this trend even
after the global crisis arisen as Covid-19 Pandemic. The company should maintain this trend in
future too. ROE and ROCE are also showing increasing trend. The company should keep an eye
about the increase in ROE as the net profit of the company shall also increase along with ROE
to meet
shareholders’ expectations. Earnings per Share shows an increasing trend which is quite well for
the future growth of the company, as its increasing trend builds confidence in the investors and
prospective investors too. In the end we can conclude that in profitability company is performing
well.

Performance Analysis: In this segment we analyze the company’s performance regarding its
operations mainly. For the study of this two ratios has been used (i) Operating Ratio and (ii)
Dividend Payout Ratio.
The analysis of operating profit shows that the company is doing well as the operating ratio is decreasing in
22
past three years. This trend shows that the company has reduced its operational

23
expenses such as COGS, general and administrative overhead and selling and distribution
overhead. This also narrates about the increased efficiency of the company as it is considered to
be the yard stick of operating efficiency of the firm.

The Dividend Payout Ratio is also useful for assessing a dividend's sustainability. Companies
are extremely reluctant to cut dividends since it can drive the stock price down and reflect
poorly on management's abilities. If a company's payout ratio is over 100%, it is returning more
money to shareholders than it is earning and will probably be forced to lower the dividend or
stop paying it altogether. That result is not inevitable, however. A company endures a bad year
without

ch means that company is not dependent on suspending payouts, and it is often in their interest
to do so. It is therefore important to consider future earnings expectations and calculate a
forward- looking payout ratio to contextualize the backward-looking one. The Payout ratio of
the company is unitary in all the three financial years which shows the maturity of the company
as its payout ratio can be termed as sustainable one.

24
 BIBLIOGRAPHY

Websites references

 https://www.moneycontrol.com/apps
 https://www.wipro.com/
 https://en.wikipedia.org/wiki/Wipro
 https://www.dionglobal.com/
 https://economictimes.indiatimes.com/

Book references

 Dr. Jayanta Ghosh August, 2019,Financial reporting & Financial Statement Analysis,
Tee Dee Publication (P) Ltd
 Amitabha Basu September,2019, Financial reporting & Financial Statement
Analysis, Tee Dee Publication(P) Ltd

Article references

 https://www.bartleby.com/essay/Literature-Review-Of-Financial-Statement-
PJ5X4ZQ9N6

25
ANNEXURES

Balance Sheet of WIPRO Ltd.

BALANCE SHEET OF WIPRO (in MAR 21 MAR 20 MAR

Rs. Cr.) 19

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 1,095.80 1,142.70 1,20

6
.
8
0
TOTAL SHARE CAPITAL 1,095.80 1,142.70 1,20
6
.
8
0
Reserves and Surplus 44,145.80 45,311.00 48,1
8
5
.
2
0
TOTAL RESERVES AND SURPLUS 44,145.80 45,311.00 48,1
8
5
.
2
0
TOTAL SHAREHOLDERS FUNDS 45,241.60 46,453.70 49,3
9
2
.
0
0

26
NON-CURRENT LIABILITIES

Long Term Borrowings 14.10 25.10 22.0

0

Deferred Tax Liabilities [Net] 130.50 0.00 10.4

0

Other Long Term Liabilities 2,129.20 2,170.50 1,30

9
.
5
0
Long Term Provisions 88.50 213.30 119.
6
0

27
TOTAL NON-CURRENT LIABILITIES 2,362.30 2,408.90 1,461.50

CURRENT LIABILITIES

Short Term Borrowings 5,791.20 5,001.90 5,052.20

Trade Payables 4,348.50 4,542.60 4,765.50

Other Current Liabilities 6,705.30 5,769.10 5,397.90

Short Term Provisions 1,287.40 1,130.20 929.00

TOTAL CURRENT LIABILITIES 18,132.40 16,443.80 16,144.60

TOTAL CAPITAL AND 65,736.30 65,306.40 66,998.10

LIABILITIES

ASSETS

NON-CURRENT ASSETS

Tangible Assets 6,578.70 5,863.30 3,874.20

Intangible Assets 709.40 776.10 526.80

Capital Work-In-Progress 1,848.00 1,873.50 2,112.70

Other Assets 0.00 0.00 0.00

FIXED ASSETS 9,136.10 8,512.90 6,513.70

Non-Current Investments 8,206.70 7,735.00 8,250.30

28
Deferred Tax Assets [Net] 47.40 433.30 391.00

Long Term Loans And Advances 0.00 0.00 0.00

Other Non-Current Assets 2,966.60 2,911.90 4,112.70

TOTAL NON-CURRENT ASSETS 20,356.80 19,593.10 19,267.70

CURRENT ASSETS

Current Investments 17,495.20 18,963.50 21,998.80

Inventories 91.00 174.10 340.30

Trade Receivables 8,046.20 9,257.00 10,648.60

Cash And Cash Equivalents 9,783.20 10,444.00 10,390.20

Short Term Loans And Advances 4,201.50 947.20 0.00

Other Current Assets 5,762.40 5,927.50 4,352.50

TOTAL CURRENT ASSETS 45,379.50 45,713.30 47,730.40

TOTAL ASSETS 65,736.30 65,306.40 66,998.10

29
 Income statement of WIPRO Ltd.

ROFIT & LOSS ACCOUNT OF WIPRO (in Rs. Cr.) MAR 21 MAR MAR
20 19

INCOME

REVENUE FROM OPERATIONS [GROSS] 50,299.40 50,387.70 48,029.80

LESS: EXCISE/SEVICE TAX/OTHER LEVIES 0.00 0.00 0.00

REVENUE FROM OPERATIONS [NET] 50,299.40 50,387.70 48,029.80

TOTAL OPERATING REVENUES 50,299.40 50,407.00 48,123.80

OTHER INCOME 2,382.90 2,476.60 2,568.60

TOTAL REVENUE 52,682.30 52,883.60 50,692.40

EXPENSES

Cost Of Materials Consumed 0.00 0.00 0.00

Operating And Direct Expenses 10,675.40 12,378.40 12,505.10

Changes In Inventories Of FG,WIP And Stock-In Trade 34.50 159.90 -55.30

Employee Benefit Expenses 26,467.30 26,171.80 23,808.50

Finance Costs 402.60 535.20 524.90

30
Depreciation And Amortization Expenses 1,349.30 1,141.10 934.30

Other Expenses 480.50 691.20 1,962.40

TOTAL EXPENSES 39,997.50 41,875.90 40,821.90

PROFIT/LOSS BEFORE EXCEPTIONAL, 12,684.80 11,007.70 9,870.50

EXTRAORDINARY ITEMS AND TAX

Exceptional Items 0.00 0.00 0.00

PROFIT/LOSS BEFORE TAX 12,684.80 11,007.70 9,870.50

TAX EXPENSES-CONTINUED OPERATIONS

Current Tax 2,243.00 2,206.70 2,272.50

Less: MAT Credit Entitlement 0.00 0.00 0.00

Deferred Tax 380.90 120.30 -16.00

Tax For Earlier Years 0.00 0.00 0.00

TOTAL TAX EXPENSES 2,623.90 2,327.00 2,256.50

PROFIT/LOSS AFTER TAX AND 10,060.90 8,680.70 7,614.00

BEFORE EXTRAORDINARY ITEMS

PROFIT/LOSS FROM CONTINUING OPERATIONS 10,060.90 8,680.70 7,614.00

PROFIT/LOSS FOR THE PERIOD 10,060.90 8,680.70 7,614.00

31
32
OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 17.81 14.88 12.67

Diluted EPS (Rs.) 17.77 14.84 12.67

33