Cross Sectional Financial Statement Analysis of TCS, Infosys and Wipro For 5 Years I.E. (2015-2019)

Cross Sectional Financial Statement analysis of TCS, Infosys and
Wipro for 5 years i.e. (2015-2019)

Summary
IT sector has been playing a very seminal role in strengthening the Indian
economy. In order to compare and set benchmark, a financial statement
analysis of three leading IT sector companies has been done. The information
derived from these financial statements were summarized and used to compute
financial ratios for the five-year period. A graphical representation is provided
in order to compare the financial ratios of one industry against the others for
the same period.
Based on factors like current ratio, return on shareholder’s equity, earnings per
share, debtor turnover ratio and most importantly debt equity ratio, it is
concluded that TCS is the most sought-after company for investors. Along
similar lines Infosys Who’s working capital turnover, total asset turnover and
DuPont analysis returns show encouraging signs for shareholders who have
profits as their prime point of consideration?
Objectives
The objective of this report is to collect, analyse and interpret the financial
performance of 3 Indian IT companies like TCS, Wipro, Infosys for the period
2005-2019, using comparative financial ratios. We started with Annual reports
of three listed companies from their websites.
The financial information necessary for financial ratios was derived from
these financial statements. The information was then summarized and
processed to come up with comparative financial ratios that were used in the
analysis. In this study, financial ratios were grouped into five categories, i.e.,
liquidity, profitability, solvency, market-based, and leverage ratios. The study
seeks to answer the research question – What are the norms, industry figures,
and peculiarities in the IT sector of the Indian market? – using liquidity,
activity, leverage, profitability, and market value ratios. Thus, the study
specifically aims to meet the following objectives: 1. the financial ratio
analysis to judge the earning capacity, financial soundness and operating
efficiency of a business organization. 2. The use of ratio in accounting and
financial management analysis helping the management to know the
profitability, financial position and operating efficiency of an enterprise. 3. Its
usefulness in business planning, forecasting and locating the weak spots in the
business even though the overall performance may be quite good.
4. Its usefulness as a measure of inter-firm and intra-firm comparison.
Selected IT Companies
1. Tata Consultancy Services (TCS): TCS is a multinational information
company founded in 1968 and is a subsidiary of Tata conglomerate. It is
listed in both Bombay Stock Exchange (BSE) and National Stock
Exchange (NSE) of India. It is the leader in global marketplace and is
among the top 10 technology firms in the world. TCS is the largest Indian
company in terms of market capitalization. It is headquartered in
Maharashtra, India. TCS is dealing with various kind of products and
services, such as assurance services, BI and performance management,
business process services, consulting, digital enterprise, eco-sustainability
services, engineering and industrial services, enterprise security and risk
management, enterprise solutions, iON small and medium business, IT
infrastructure services, IT services, platform solutions, and supply chain
management
Wipro: Wipro Limited is a leading global information technology, consulting and business
process services company. It is headquartered in Bangalore, India. Wipro harness the power
of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging
technologies to help clients adapt to the digital world and make them successful. A company
recognized globally for its comprehensive portfolio of services, strong commitment to
sustainability and good corporate citizenship. Wipro has over 175,000 dedicated employees
serving clients across six continents. With Wipro Consumer Care and Lighting (WCCLG), it
has also ventured into FMCG market and is rapidly increasing its presence in the market.
Wipro Infrastructure Engineering (WIN) is the largest independent hydraulic cylinder
manufacturer in the world. Wipro’s service offerings include Data, Analytics & AI,
Applications, Cloud & Infrastructure Services, Consulting, Digital Operations and Platforms,
Product Engineering. Industry wise their services extend to Aerospace & Défense,
Automotive Banking, Communications Consumer, Electronics Consumer, Packaged Goods
Engineering & Construction, Healthcare Insurance, Medical Devices Natural Resources New
Age Markets New Age, Media & Education, Network Equipment Providers, Oil & Gas,
Pharmaceutical & Life Sciences
2.
Infosys: Infosys (formerly known as Infosys Technologies Private Limited) is an Indian

multinational corporation founded in 1981. Infosys has a global presence with more than
160,000 employees it is headquartered in Karnataka, India. Infosys is dealing with various
kinds of services such as Aikido: Next-Generation Services, Ki: Knowledge-based
management and evolution of landscapes, Do: Design thinking and design-led initiatives, Ai:
Platforms and platform as a service, business services, business applications, business
intelligence, Digital Infosys Consulting, Oracle, SAP, technology services, application
management, cloud, infrastructure and security engineering services, enterprise mobility,
testing, outsourcing services, application outsourcing, business process outsourcing, customer
service, finance and accounting, human resources, and sourcing and procurement. It is also
dealing with several product categories such as banking suite, big data, cloud, customer
service, digital commerce, digital marketing, distributive trade, micro-commerce, sourcing
and procurement, Edge-Verve, Assist-Edge – customer service experience, Brand-Edge –
digital marketing, Credit Finance Edge – micro-commerce, Interact Edge – digital commerce,
Procure Edge – sourcing and procurement, Trade Edge – distributive trade, Infosys Finacle,
core banking, CRM, digital commerce, direct banking, e-Banking consumer, e-Banking
corporate inclusion, Islamic banking, mobile banking, payments, treasury, and wealth
management.

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Cross Sectional Financial Statement analysis of TCS, Infosys and

Wipro for 5 years i.e. (2015-2019)

Infosys: Infosys (formerly known as Infosys Technologies Private Limited) is an Indian

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