Financial Analysis of Infosys Technologies Ltd.
Table of Contents
IT Industry at a glance – Sector Analysis 4
Rise of Services as a whole: 4
IT Services: A major part of the services sector 5
Infosys Technologies Ltd – Financial Ratio Analysis 7
Liquidity Ratio: 7
Quick Ratio: 7
Current Ratio: 8
Leverage Ratio: 9
Debt-Equity Ratio: 9
Interest Coverage Ratio: 10
Profitability Ratio: 11
Return on Equity: ROE 12
Return on Capital Employed: ROCE 12
Valuation Ratio: 13
Dividend Yield: 14
Operating Income Growth (%): 15
Summary: 17
The Competitors 18
Per Share Ratios 18
Cash Earnings Per Share - Cash EPS 18
Book Value 18
Dividend per share (DPS) 18
Operating profit per share 18
Profitability Ratios 18
Operating Profit Margin 19
Net Profit Margin 19
Liquidity ratios 19
Turn Over Ratios 19
Sales/Assets Ratio: 19
Sales to Fixed Assets Ratio 20
Infosys vis-à-vis its competitors 26
LIQUIDITY RATIOS 27
• CURRENT RATIOS 27
• QUICK RATIOS 27
LEVERAGE RATIO: 28
• DEBT-EQUITY RATIO: 28
• INTEREST COVERAGE RATIO: 29
PROFITABILITY RATIOS: 29
• RETURN ON EQUITY: 29
Measures for evaluating the current market price of common stock: 30
Conclusion & Recommendations 31
Annexure 33
The Income Statement of Infosys for 6 yrs is given below. 33
Cash Flow statement of Infosys for the last 6 yrs 35
Balance Sheet for the last 5 yrs of Infosys 38
IT Industry at a glance – Sector Analysis
Rise of Services as a whole:
Since the early 1990s, the world has witnessed the spectacular growth of the economy of India (at the average annual rate of 6.2 per cent during the period 1992-2005 respectively). Associated with this growth is the dramatic development of the service sector in the country. The graphs below clearly indicate the changing percentage share of different sectors in the GDP of the country between 1990 and 2006.
Source: http://www.economywatch.com
We can also see the year on year rise in the graph below:
IT Services: A major part of the services sector
The IT Services sector is considered to be an important area for its
IT Industry at a glance – Sector Analysis 4
Rise of Services as a whole: 4
IT Services: A major part of the services sector 5
Infosys Technologies Ltd – Financial Ratio Analysis 7
Liquidity Ratio: 7
Quick Ratio: 7
Current Ratio: 8
Leverage Ratio: 9
Debt-Equity Ratio: 9
Interest Coverage Ratio: 10
Profitability Ratio: 11
Return on Equity: ROE 12
Return on Capital Employed: ROCE 12
Valuation Ratio: 13
Dividend Yield: 14
Operating Income Growth (%): 15
Summary: 17
The Competitors 18
Per Share Ratios 18
Cash Earnings Per Share - Cash EPS 18
Book Value 18
Dividend per share (DPS) 18
Operating profit per share 18
Profitability Ratios 18
Operating Profit Margin 19
Net Profit Margin 19
Liquidity ratios 19
Turn Over Ratios 19
Sales/Assets Ratio: 19
Sales to Fixed Assets Ratio 20
Infosys vis-à-vis its competitors 26
LIQUIDITY RATIOS 27
• CURRENT RATIOS 27
• QUICK RATIOS 27
LEVERAGE RATIO: 28
• DEBT-EQUITY RATIO: 28
• INTEREST COVERAGE RATIO: 29
PROFITABILITY RATIOS: 29
• RETURN ON EQUITY: 29
Measures for evaluating the current market price of common stock: 30
Conclusion & Recommendations 31
Annexure 33
The Income Statement of Infosys for 6 yrs is given below. 33
Cash Flow statement of Infosys for the last 6 yrs 35
Balance Sheet for the last 5 yrs of Infosys 38
IT Industry at a glance – Sector Analysis
Rise of Services as a whole:
Since the early 1990s, the world has witnessed the spectacular growth of the economy of India (at the average annual rate of 6.2 per cent during the period 1992-2005 respectively). Associated with this growth is the dramatic development of the service sector in the country. The graphs below clearly indicate the changing percentage share of different sectors in the GDP of the country between 1990 and 2006.
Source: http://www.economywatch.com
We can also see the year on year rise in the graph below:
IT Services: A major part of the services sector
The IT Services sector is considered to be an important area for its