TCS FInancial Statement analysis

Major Sources of Revenue a) Revenue from operations accounts for 98% of the entire revenue of the firm and consists of the revenues from the below categories Information engine room and consultancy services contributes 97% of the list revenue from operations Sale of equipment and computer softw are lilicenses contributes 3% of the entire revenue from operations b) Other Income accounts for approximately 2% of the bestow revenue of the firm and consists of the revenues from the below major categories amuse Income Contributes to 81. 0% of the total revenue from other income 73% of the quest income comes from Interest on Bank & Interest on long term Bonds & Debentures. 25% of the Interest income comes from Inter-Corporate deposits. simoleons from Sale of mutual funds and other current garmentitures Contributes to 0. 57% of the total revenue from other income Major Expenses a) Employee benefit expenses consumes 35. 78% of the total operations revenue and consists of the below categories Salaries and incentives accounts for 87. 57% of the total employee benefits expense Contributions to careful fund & pension Superannuation/Gratuity etc.Staff welfare expenses. b)BOperations and other Expenses consumes 32. 11% of the total operations revenue and consists of the below major categories Overseas business expenses accounts for 43. 4 % of the total Operations and other Expenses Services rendered y business associates and others accounts for 18. 42% of the total Operations and other Expenses hardware and material costs Software, accounts for 1 1 the total Operations and other Expenses (c) Tax expenses consume 7. 27% of the total operations revenue (d) Dividend on equity shares and tax on that for fiscal 2014 accounts increased by 40% socio-economic class on course of study (7058. 2 crscoresiscal 2014) Major Uses of funds a) exchange And Bank labyrinthine senses accounts for 21. 51% of the total Non-Current Investments and Current assets. smart set has increased the hard currency and Bank balances significantly in pecuniary 2014. Horizontal analysis on the Balance sail for Cash and Bank Balances awards a Year on Year appendage of 113. 34% for fiscal 2014. b)BPurchase of Fixed Assets The Comp whatever has been investing in infrastructure culture across various locations in India to meet its growing business needs. Additions to the crying(a) block in fiscal 2014 amounted to 2,284. 7 crscoresHorizontal analysis on the Balance Sheet for unconquerable assets shows a Year on Year growth of 28. 27% for fiscal 2014. c)CNon-Current Investments Company has increased the Non-Current Investments significantly in fiscal 2014. Horizontal analysis on the Balance Sheet for Non-Current Investments shows Year on Year growth of 134. 97% for fiscal 2014. d)DLong Term Loans & Advances accounts for 10. 85% of the total Non-Current Investments and Current assets. e)E nobble-term loans and advances accounts for 6. 2% of the total Non-Current ma rvel 2 Perform a horizontal and vertical analysis on the Balance Sheet and proceeds and Loss Account and comment on any significant changes that you see over the coating 2 course of instructions. AnNASPlease refer the attached excel weather sheet for arriving at the below conclusions a) Profit & Loss statement Significant observations on Horizontal analysis. Net Profit After tax for monetary 2014 shows a Year on Year growth of 37. 70%. Net Profit After tax nearly doubled when compared with Fiscal 2012. EPPEPSEarnings per Share) also show consistent growth in the last few Fiscal days.EPPEPShows a Year on Year increase by 37. 58% in Fiscal 2014 Finance Cost for Fiscal 2014 has decreased significantly by 20%. Tax for Fiscal 2014 has increased significantly by 51% Year on Year. Profit & Loss statement Significant observations on Vertical analysis. Despite a significant increase in the Employee bastardly we find that Employee Expenses s a % of revenue remained constant around 35% in the last few Fiscal years Total Expenses as a % of revenue remained constant around 70% in the last few Fiscal years Total Tax as fortune of revenue, increased from 6. 37% in fiscal 2013 to 7. 2% b) Balance Sheet Significant observations on Horizontal analysis. Non- Current liabilities shows a Year on Year growth of ofof4. 64% in Fiscal 2014. Fixed assets shows a Year on Year growth of 28. 27% in Fiscal 2014 Current liabilities shows a Year on Year growth of 34. 33% in Fiscal 2014. Reserves and Surplus shows a Year on Year growth of 27. 76% in Fiscal 2014. Share neat shows a Year on Year negative growth of 33. 76% in Fiscal 2014. Current assets shows a Year on Year growth of 36. 62% in Fiscal 2014. Long Term borrowings shows a Year on Year negative growth of 2. 4% in Fiscal 2014. Balance Sheet Significant observations on Vertical analysis. Cash and bank balances as a % of the total Assets excluding repair assets increased from 12. 97% Fiscal 2013 to 21. 51% Fiscal 2014. Non-C urrent Investments as a % of the total Assets excluding fixed assets has been increasing steadily in the last few Fiscals. Short-term loans and advances as a % of the total Assets excluding fixed assets eccreasedrom 10. 81% in Fiscal 2013 to 6. 42% in Fiscal 2014. Goodwill as a % of the total Assets excluding fixed assets decreased from 6. 86% in Fiscal 2013 to 3. 7% Fiscal 2014. doubtfulness 3 Scrutinize the Notes to Accounts and Statement on Significant Accounting Policies and deterrent for any deviations in accounting policy over the last year with respect to major items. AnNASThere were no deviations with respect to significant accounting policies. besides TCTTSdopted a new hedge accounting principle under the below category. a)AForeign currency forward, option and futures contracts TCTTSnters into foreign currency forward, option and futures contracts to manage its flick to exchange rate fluctuations, in accordance with its risk management policies.With progeny from Januar y 1, 2014, the Company has adopted hedge accounting principles in line with supranational Financial Reporting Standard 9 (referred to as IFFIRS), which align to a greater extent closely with the Companys risk management policy. The change has resulted in a decrement of 4. 76 crscoresn profit before tax in fiscal 2014. Question 4 Examine the Statement of Cash prevails for the last 2 years and point out the following ) Major sources and Uses of specie Sources -Operations Cash hand overd from operations, stomach adjustments to profit before tax, has gone up from 16,436. 77 crscoresn fiscal 2013 to 21,795. 4 crscoresn fiscal 2014, registering a growth of 32. 60% over the previous fiscal. -Income from Interest InInterestn funds invested went up by 71. 22%, from 798. 80 crscoresn fiscal 2013 to 1367. 72 Uses crscoresn fiscal 2014. During fiscal 2014, the significant uses of immediate payment were Acquisition of French Company AlAlit. A. foFor52. 41 crscoresPayment of Dividend & d ividend tax for 5,489. 54 CrScoresurchase of fixed assets Increase in inter-corporate deposits Investment in fixed deposit. Pay Taxes amounting to 7,043. 63 CrScoresover Working Capital expenditures (b) Were the silver flows from operations greater than or less than net income?Explain in detail the major reason for the differences in these 2 figures. For Fiscal 2014, by referring to the Consolidated financial statements we get the below fgfiguresNet Cash provided by from operational activities = 14751. 41 CrScoreset Profit for the year = 19163. 87 crscoresnNASNet Cash provided by from operate(a) activities is less the net income. Explanation Working Capital fgfiguresnder the categories below are the major reasons for reducing the Net Cash value provided by from operating activities below the net income. ) Unbilled Revenue (811. 60) CrScores) Trade Receivables (4015. 80) CrScoresc) Was the firm able to generate enough cash from its operations to be able to pay for in all its ca pital expenditures? For Fiscal 2014, by referring to the Consolidated financial statements we can amaze at the below flurry. Net Cash provided by/Used in Fiscal 2014 Fiscal 2013 run activities 14,751. 41 11,614. 96 Investing activities (9,667. 08) (6,085. 66) financing activities 5,673. 24) (5,729. 48) Exchange difference on translation of foreign currency 21 5. 41 48. 5 Net (decrease)/increase in cash and cash equivalents after translation (373. 50) (152. 13) Purchase of fixed assets accounted for (3126. 15) CrScoresf the Net Cash of (9,667. 08) crscoressed in investing activities. From the above table we can clearly derive that the association generated enough cash from Operating activities to fund the capital expenditures on its own. (d) Did the cash flow from operations cover both the capital expenditures and payment of dividend, if any? AnNASDividend paid accounted for (5480. 7) CrScoresf the Net Cash of (5673. 24) crscoressed in financing activities.From the above table w e can clearly infer that the company generated enough cash from Operating activities to fund both capital expenditures & payment of dividends on its own. (e) How did your firm invest its excess cash (if any)? Cash flow statement from Investing Activities signalise that the excess cash that remains after investing and financing is mamajoraintained in Short-term bank deposits. From the Cash Flow Statements we can see that Short Term deposits increased from 4911. 46 crscoresn Fiscal 2013 to 12948. 9 CrScoresn Fiscal 2014. This accounts for a significant growth of 163%. g)GAre there any other unusual / some items of cash inflow / outflow? AnNASCash outflow due to Taxes Cash Flow Statements indicate a significant increase in Taxes for Tax for Fiscal 2014. Taxes have increased significantly by 46% Year on Year. By referring to Management Discussion & Analysis & Notes forming consolidated statements we can infer that company has paid (1) Additional tax of 2,129. 82 crscoresaid by TCTTStd on its higher income for the year and (2) 92. 00 crscoresf higher tax on dividend received y TCTTStd from its overseas subsidiaries.