A STUDY ON FINANCIAL PERFORMANCE OF TATA CONSULTANCY

SERVICES

(Lab on Project)

Submitted in partial fulfilment of the requirements for the award of the degree of

BACHELOR OF COMMERCE FINANCE

BY
MAGUDEESWARAN C (211FI019)
MONISHA M (211FI022)
PRISCILLA (211FI028)
THARUN PRAKASH B (211FI041)
Under the guidance of
Dr. C. KANDASAMY M. Com (CA)., MBA., M.Phil., Ph.D.

Associate Professor
DEPARTMENT OF COMMERCE FINANCE

Dr. N.G.P. ARTS AND SCIENCE COLLEGE

(An Autonomous Institution, Affiliated to Bharathiar University, Coimbatore)
Approved by Government of Tamil Nadu & Accredited by NAAC with A++ Grade (3rd Cycle -3.64 CGPA)

Dr. N.G.P.-Kalapatti Road, Coimbatore-641 048, Tamil Nadu, India.

Website: www.drngpasc.ac.in | Email: info@drngpasc.ac.in. | Phone: +91-422-2369100

OCTOBER-2023
 CERTIFICATE

This is to certify that the Lab on project, entitled “A STUDY ON FINANCIAL

PERFORMANCE OF TATA CONSULTANCY SERVICES” submitted to Bharathiar
University, Coimbtore-46 in partial fulfilment of the requirement for the award of degree of
Bachelor of Commerce Finance is a record of original Lab on project work done by
MAGUDEESWARAN C, MONISHA M, PRICSILLA, THARUN PRAKASH B, during
the period of their study in Department of Commerce Finance, Dr. N.G.P. Arts and Science
College, Coimbatore-48 under my supervision and guidance, and the project has not formed
the basis for the award of any Degree/ Diploma/ Associateship/ Fellowship or other similar
title to any candidate of any university.

(Dr. C. KANDASAMY) (Dr. S. ARUNPRIYA)

Name of the Guide Professor and Head (i/c)

Place: Coimbatore
Date:

Viva-voce Examination held on……………….

Internal Examiner
 DECLARATION

We MAGUDEESWARAN C (211FI019), MONISHA M (211FI022), PRISCILLA

(211FI028), THARUN PRAKASH B (211FI041), hereby declare that the Lab on project on
“A STUDY ON FINANCIAL PERFORMANCE OF TATA CONSULTANCY
SERVICES” submitted to Bharathiar University in partial fulfilment of the requirement for
the award of the degree of Bachelor of Commerce Finance, is a record of original Lab on
project work done during the period of study under the supervision and guidance of
Dr. C. Kandasamy M.Com (CA)., MBA., M.Phil., Ph.D. Associate Professor, Department
of Commerce Finance, Dr. N.G.P. Arts and Science College, Coimbatore - 48, and it has not
formed on the basis of award of any Degree/ Diploma/ Associates/ Fellowship or other similar
title to any candidate of any university.

MAGUDEESWARAN C
(211FI019)
MONISHA M
(211FI022)
PRISCILLA
(211FI028)
THARUN PRAKASH B
(211FI041)

Place: Coimbatore

Date:
 ACKNOWLEDGEMENT

This project was the most significant accomplishment in our life and it would not
have been possible without the blessing of God almighty and those who supported and believed
in my Caliber.
We record our deep sense of gratitude to Dr. NALLA. G. PALANISWAMI, M.D,
AB (USA), Chairman, Dr. NGP Research and Educational Trust and Madam Secretary,
Dr. THAVAMANI. D. PALANISWAMI, M.D, AB (USA), Dr. N.G.P. Arts and Science
College, Coimbatore for providing us an infrastructure facility to carry out project work
successfully.
We record our sincere thanks to Principal Prof. Dr. K. RAMAMURTHI M.Com.,
BL., M.B.A., Ph.D. Dr. N.G.P. Arts and Science College, Coimbatore, for every help he
rendered during the project.
We express our sincere thanks to my Head (i/c), Dr. S. ARUNPRIYA M. Com., M.
Phil., M.B.A., PGDCA., SET., Ph.D. Department of Commerce Finance, Dr. N.G.P. Arts
and Science College, Coimbatore for showing sustained interest and providing help throughout
the period of our work.
We express our sincere thanks to our Guide Dr. C. KANDASAMY M.Com (CA).,
MBA., M.Phil., Ph.D. Associate Professor, Department of Commerce Finance, Dr. N.G.P.
Arts and Science College, Coimbatore we sincerely thank for his exemplary guidance and
encouragement.
We take this opportunity to acknowledge our sincere thanks to all the Staff Members
of the Department of Commerce Finance for their constant inspiration, assistance and
resourceful guidance for the completion of this project successfully.
We express our sincere thanks to our family and friends for their encouragement,
love, prayer, moral support, advice and sacrifice without which we would not have been able
to pursue the course of our study.
MAGUDEESWARAN C

MONISHA M

PRISCILLA

THARUN PRAKASH B
 INDEX

S. NO TITLE PAGE NO
Chapter-1 INTRODUCTION AND TITLE OF THE STUDY 1
1.1 Introduction 1
1.2 Statement of the problem 2
1.3 Objectives of the study 3
1.4 Scope of the study 4
1.5 Research methodology 5
1.5.1 Source of data 5
1.5.2 Period of the study 5
1.5.3 Tools used for the study 5
1.6 Limitations of the study 6

Chapter-2 COMPANY PROFILE 7

2.1 Company profile 7

Chapter-3 DATA ANALYSIS AND INTERPRETATION 8

3.1 Liquidity ratio 9
3.1.1 Current ratio 9
3.1.2 Quick ratio 10
3.1.3 Net working capital ratio 11
3.2 Long term solvency ratio 12
3.2.1 Debt ratio 12
3.2.2 Interest coverage ratio 13
3.3 Turnover ratios 14
3.3.1 Inventory turnover ratio 14
3.3.2 Fixed asset turnover ratio 15
3.3.3 Capital employed turnover ratio 16
3.4 Profitability ratio 17
3.4.1 Gross profit ratio 17
3.4.2 Net profit ratio 18
Chapter-4 FINDINGS, SUGGESTIONS & CONCLUSION 20
4.1 Findings 20
4.2 Suggestions 21
4.3 Conclusion 22

ANNEXURE 23
Balance sheet for the years 2018-2019, 2019-2020, 2020-2021, 23
2021-2022, 2022-2023
Statement of profit & loss for the year 2018-2019, 2019-2020, 24
2020-2021, 2021-2022, 2022-2023.
 LIST OF TABLES

S. No Table No Title of Table Page No

1 3.1.1 Current ratio 9
2 3.1.2 Quick ratio 10
3 3.1.3 Net working ratio 11
4 3.2.1 Debt ratio 12
5 3.2.2 Interest coverage ratio 13
6 3.3.1 Inventory turnover ratio 14
7 3.3.2 Fixed asset turnover ratio 15
8 3.3.3 Capital employed turnover ratio 16
9 3.4.1 Gross profit ratio 17
10 3.4.2 Net profit ratio 18
 LIST OF GRAPHS

S. No Graph No Title of Graphs Page No

1 3.1.1 Current ratio 9
2 3.1.2 Quick ratio 10
3 3.1.3 Net working ratio 11
4 3.2.1 Debt ratio 13
5 3.2.2 Interest coverage ratio 14
6 3.3.1 Inventory turnover ratio 15
7 3.3.2 Fixed asset turnover ratio 16
8 3.3.3 Capital employed turnover ratio 17
9 3.4.1 Net profit ratio 18
10 3.4.2 Gross profit ratio 19
CHAPTER 01

INTRODUCTION AND TITLE OF THE STUDY

1.1 INTRODUCTION OF THE COMPANY

Tata Consultancy Services is a global leader in IT services, consulting & business

solutions with a large network of innovation & delivery centers. ATA Consultancy Services
Limited (TCS) is an Indian multinational information technology (IT) services and consulting
company with its headquarters in Mumbai, Maharashtra. It is a part of the Tata Group and
operates in 150 locations across 46 countries. In July 2022, it was reported that TCS had over
600,000 employees worldwide. TCS is the second largest Indian company by market
capitalization and is among the most valuable IT service brands worldwide, and is the top Big
Tech (India) company. In 2015, TCS was ranked 64th overall in the Forbes "World's Most
Innovative Companies" ranking, making it one of the highest-ranked IT services companies
and a top Indian company. As of June 2023, it is the world's 2nd largest IT employer. It provides
a wide range of services including technology, business process outsourcing BPO,
infrastructure, and engineering. The company operates in Americas, Europe, Middle East and
Asia Pacific, Th company in headquartered in Mumbai, India. The company is a part of one of
India’s most respected business conglomerates the Tata Group. Tata Consultancy Services is
an IT services, consulting and business solution organization. They have over 227,000
employees. Operating in 44 countries and they are part of the ‘‘Tata group’’. IT is first and the
largest Software Research & Development Centre in India and Software Exporter in India. It
is 1st Company in the world to be assessed at Level 5 for integrated enterprise-wide CMMI and
PCMM. Its Group consolidated revenue: Rs 48893 crores (march 2012) and Group profit after
tax: Rs. 10414 crores (march 2012).

1
1.2 STATEMENT OF THE PROBLEM

TCS is one of the companies which could survive during the past decade with extending
its operations worldwide. The economic slow- down in the recent past has many sectors, for
which IT sector is not an exception. It has also faced a lot of challenges – downsizing the
employees, minimizing the operations, etc. with a view to cut the costs. Even through the IT
companies charge a huge amount for soft- ware development, the pay and perquisites provided
to the employees are considerably high. Under these circumstances, an appraisal of the
financial performance of Tata Consultancy Services is felt necessary.

2
1.3 OBJECTIVES OF THE STUDY

• To analyze the Financial Performance of Tata Consultancy Services for the period of
2019-2023.
• To interpret the liquidity ratio of the company.
• To provide suggestions for the better performance of the company.

3
1.4 SCOPE OF THE STUDY

This study is aimed to calculate the financial data of ‘‘TATA CONSULTANCY

SERVICES’’ for a period of five years from the financial year of 01.04.2019 to 31.03.2023
with financial tools.

4
1.5 RESEARCH METHODOLOGY

Research methodology is a way of explaining how a researcher intends to carry intends

to carry out his research. It’s a logical, systematic plan to resolve a research problem. A
methodology details a researcher’s approach to the research to ensure reliable and valid results
that address his aim and objectives. A research methodology gives research legitimacy and
provides scientifically sound findings. It allows the reader to understand the approach and
methods used to reach conclusions.

1.5.1 SOURCES OF DATA

The secondary data that has been used for this study is collected from various journals,
websites and annual report of the Tata Consultancy Services company.

1.5.2 PERIOD OF THE STUDY

A period of five years 2019 to 2023 has been considered for the study.

1.5.3 TOOLS USED FOR THE STUDY

• Curent ratio
• Quick ratio
• Net working capital ratio
• Debt ratio
• Interest coverage ratio
• Inventory turnover ratio
• Fixed asset turnover ratio
• Capital employed turnover ratio
• Gross profit ratio
• Net profit ratio

5
1.6 LIMITATIONS OF THE STUDY

• The study covers the period of 2019 to 2023. Therefore, the changes took place before
and after this period were not taken into consideration.
• As the study is based on the secondary data, the reliability of the study depends on the
information provided in the annual report of the company.
• The comparison is made only within the company’s financial year.

6
CHAPTER 02
COMPANY PROFILE

2.1 COMPANY PROFILE

Type Public
Industry Information Technology Consulting
Outsourcing
Founded 1968
Founder J. R. D. Tata
Headquarters India
Key people Natrajan Chandrasekaran (Chairman)
K. Krithivasan (CEO and MD)
Revenue Rs. 228,907 crores
Paid up capital 365.91 crores
Turnover ratio 158.12
No of employees 614,795
Competitors Amazon, Accenture, Wipro Ltd, Infosys.
Auditors B S R & Co. LLP
Bankers
Parent Tata Group
Registered office 9th Floor, Nirmal Building, Nariman Point,
Mumbai-400021Maharashtra-
India Phone: 67789595
Corporate Identification Number L22210MH1995PLC084781
Website www.tcs.com

7
CHAPTER 03
DATA ANALYSIS AND INTERPRETATION

Data is analyzed and interpreted from Tata Consultancy Services five financial year
Balance sheet (2019 to 2023).

RATIO ANALYSIS

Ratio analysis is an accounting method that uses financial statements, like balance
sheets and income statements, to gain insights into a company's financial health. Ratio analysis
will help determine various aspects of an organization including profitability, liquidity and
market value. Ratio analysis is a helpful tool to determine from the outside what is going on
inside of a business because the financial statements required to perform ratio analysis are
available to the general public. Company insiders typically do not use ratio analysis because
they already have access to much more detailed information that will give them a better view
of the company's financial status.

TOOLS USED ANALYSE FINANCIAL STATEMENT

Liquidity ratio

1) Current ratio
2) Quick ratio
3) Net working capital ratio

Long term solvency ratio

4) Debt ratio
5) Interest coverage ratio

Turnover ratio

6) Inventory turnover ratio

7) Fixed asset turnover ratio
8) Capital employed turnover ratio

Profitability ratio

9) Gross profit ratio

10) Net profit ratio

8
3.1 LIQUIDITY RATIOS

Liquidity ratios help to assess the ability of a business concern to meet its short-term
financial obligations. It is also called as short-term solvency ratios. It has two types as follows:

1) Current ratio
2) Quick ratio
3) Net working capital ratio

3.1.1 CURRENT RATIO

Current ratio gives the proportion of current assets to current liabilities of a business
concern. It indicates the ability of an entity to meet its current liabilities as and when they are
due for payment. It is calculated as follows:

Formula: Current ratio = Current Asset / Current Liability

Table 3.1.1 Current ratio

Year Current Asset Current Liabilities Current ratio

2018-2019 79,032 18,896 4.182
2019-2020 79,194 24,026 3.296
2020-2021 83,160 28,525 2.915
2021-2022 94,192 37,901 2.485
2022-2023 92,784 39,324 3.359

Graph 3.1.1 Current ratio

Current ratio
6
4
2
0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

9
Interpretation:

The above graph represents the current ratio of 2019-2023 4.182, 3.296, 2.915, 2.485,
3.359. The current ratio for 2019-2023 is good as it is above 2 and meets its current liabilities
easily.

3.1.2 QUICK RATIO

Quick ratio gives the proportion of quick assets to current liabilities. It indicates
whether the business concern is in a position to pay its current liabilities as and when they
become due, out of its quick assets. Quick assets are current assets excluding inventories and
prepaid expenses. It is also called as liquid ratio or acid test ratio. It is calculated as follows:

Formula: Quick ratio = Quick Assets / Current Liabilities

Table 3.1.2 Quick ratio

Year Quick Assets Current Liabilities Quick ratio

2018-2019 79,022 18,896 4.181
2019-2020 79,189 24,026 3.295
2020-2021 83,153 28,525 2.915
2021-2022 94,173 37,901 2.484
2022-2023 92,757 39,324 2.358

Graph 3.1.2 Quick ratio

Quick ratio
5

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

10
Interpretation

The above graph represents the Quick ratio, where the quick ratio is decreased in 2019-
2020 to 2022-2023. The graph shows the company’s Quick or Liquid Ratio. According to the
above data company is not capable to pay its debts through liquid assets. Quick ratios of all the
years (2019 to 2023) showing below the standard. From 2018-2019 company’s Quick Ratio
was in above standard. but in 2018-2019 it the Quick Ratio got some improvement.

3.1.3 NET WORKING CAPITAL RATIO

Net working capital ratio measures a business's ability to pay off its current labilities
with its current assets. It can be found by subtracting current assets from current liabilities. It
is calculated as follows:

Formula: Net working capital ratio = Current assets - Current liabilities

Table 3.1.3 Net working ratio

Year Current Asset Current Liabilities Net working capital ratio

2018-2019 72,032 18,896 60,136
2019-2020 79,194 24,026 55,168
2020-2021 83,160 28,525 54,635
2021-2022 94,192 37,901 56,291
2022-2023 92,784 39,324 53,460

Graph 3.1.3 Net working capital ratio

Net working capital ratio

620
600
580
560
540
520
500
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

11
Interpretation

The above graph indicates Net working capital where in 2018-2019 (60,136) the net
working capital have increased, 2019-2020 (55,168) it has decreased, 2020-2021(54,635) it has
decreased, from 2021-2022 (56,291) it a has increased, in 2022-2023(53,460), it has decreased.
Comparing all the years the net working capital of 2018-2019 has increased. This shows that
all the years will have more significant asset to pay off its current liabilities.

LONG TERM SOLVENCY RATIOS

Long term solvency means the firm's ability to meet its liabilities in the long run. Long
term solvency ratios help to determine the ability of the business to repay its debts in the long
run. It has three types as follows:

4) Debt to equity ratio

5) Interest coverage ratio

3.2.1 DEBT RATIO

The term debt ratio is a metric that measures a company’s total debt, as a percentage of
its total asset. Ahigh debt ratio indicates that a company is highly leveraged and may as borrows
more money than it can easily stay back. It is computed as follows:

Formula: Debt ratio = Total liabilities / Total assets

Table 3.2.1 Debt ratio

Year Total Liabilities Total assets Debt ratio

2018-2019 99,500 99,500 1
2019-2020 104,975 104,975 1
2020-2021 109,381 109,381 1
2021-2022 121,263 121,263 1
2022-2023 119,827 119,827 1

12
 Graph 3.2.1 Debt ratio

Debt ratio
1.5
1
0.5
0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

Interpretation

The above graph represents the Debt ratio where the debt to net asset ratio, in all the years
it is one hence, the debt to net asset ratio has equal in all the year basis, but it is higher almost
90% of the assets value. Hence net asset is more. A high ratio indicates company’s inability to
balance its debt to asset.

3.2.2 INTEREST COVERAGE RATIO

The Interest coverage ratio (IC) is a measure of a company & ability to meet its interest
payments. Interest coverage ratio is equal to earnings before interest and taxes (EBIT) for a
time period, often one year, divided by interest expenses for the same time period. The interest
coverage ratio is a measure of the number of times a company could make the interest payments
on its debt with its EBIT. It determines how easily a company can pay interest expenses on
outstanding debt. Interest coverage ratio is also known as interest coverage, debt service ratio
or debt service coverage ratio.

Formula: Interest Coverage Ratio = Net Profit before interest tax / Interest charges

Table 3.2.2 Interest coverage ratio

Year Net profit before interest tax Interest charges Interest coverage ratio
2018-2019 40,705 170 239.441
2019-2020 41,991 743 56.515
2020-2021 40,902 537 76.167
2021-2022 49,723 486 102.310
2022-2023 51,690 695 74.374

13
Graph 3.2.2 Interest coverage ratio

Interest coverage ratio

300

200

100

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

Interpretation

The above graph represents the Interest coverage ratio for the year 2018-2019 (239.441)
has the ability to service the debts whereas since 2019-2020 (56.515) has greater chance that
the company won’t be able to service debts.

TURNOVER RATIOS

3.3.1 INVENTORY TURNOVER RATIO

It indicates the number of times inventory is turned over to make revenue form
operation during a particular accounting period. It is calculated as follows:

Formula: Inventory turnover ratio = Sales / Closing stock

Table 3.3.1 Inventory turnover ratio

Year Sales Closing stock Inventory turnover ratio

2018-2019 10 79,032 1.265
2019-2020 5 79,194 6.313
2020-2021 7 83,160 8.417
2021-2022 19 94,192 2.017
2022-2023 27 92,784 2.909

14
Graph 3.3.1 Inventory turnover ratio

Inventory turnover ratio

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

Interpretation

The above graph indicates Inventory turnover ratio for 2019-2020 (6.313) and 2020-
2021(8.417) is good as it is between the value 5-10 as it indicates that selling and restock
inventories every 1-2 months whereas below 5 2018-2019 (1.265), 2021-2021(2.017) and 2022
2023 (2.909) indicate the stock item are slow at moving through the business.

3.3.2 FIXED ASSET TURNOVER RATIO

It gives the number of times the fixed assets are turned over during the year in relation
to the revenue from operations. It is calculated as follows:

Formula: Fixed asset turnover ratio = Sales / Net fixed asset

Table 3.3.2 Fixed asset turnover ratio

Year Sales Net fixed asset Fixed asset turnover ratio

2018-2019 10 10,495 9.528
2019-2020 5 16,603 3.011
2020-2021 7 16,920 4.137
2021-2022 19 17,670 1.075
2022-2023 27 16,793 1.607

15
Graph 3.3.2 Fixed asset turnover ratio

Fixed Asset Turnover ratio

12

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

Interpretation

The above graph represents Fixed Asset turnover ratio when Fixed asset turnover ratio,
at value above 1 is considered as performing efficiency, whereas the ratio below the value 1
indicates less performing efficiency. At 2018-2019(9.528) the company is performing
efficiently whereas in 2021-2021 (1.075) the company is performing less efficiently.

3.3.3 CAPITAL EMPLOYED TURNOVER RATIO

The capital employed turnover ratio indicates the efficiency with which a company
utilize its capital employed with reference to sale. It is a financial matric used to determine the
amount of capital a company has used in its operation.

Formula: Capital Employed turnover ratio = Sales / Average capital employed

Table 3.3.3 Capital employed turnover ratio

Year Sales Average employed capital Capital employed turnover ratio

2018-2019 10 78,898 1.26
2019-2020 5 74,368 6.72
2020-2021 7 74,794 9.35
2021-2022 19 77,173 2.46
2022-2023 27 74,538 3.62

16
Graph 3.3.3 Capital employed turnover ratio

Capital Employed Turnover ratio

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

Interpretation

The above graph indicates Capital employed turnover ratio where higher the ratio, the
company utilizes the amount of capital invested efficiently. The ratio in 2919-2020 (6.72) and
2021-2022 (9.35) is high where the company has utilized the amount of capital invested
effectively, comparing to 2018-2019 (1.96) has not managed efficiently.

PROFITABILITY RATIO

3.4.1 GROSS PROFIT RATIO

Gross profit ratio is a financial ratio that measures the performance and efficiency of a
business by dividing its gross profit figure by the total net sales

Formula: Gross profit ratio= Gross profit / Net sales*100

Table 3.4.1 Gross profit

Year Gross profit Net sales Gross profit ratio

2018-2019 40,705 123,170 33.04
2019-2020 41,991 131,306 31.97
2020-2021 42,120 135,963 30.97
2021-2022 49,723 160,341 31.01
2022-2023 51,690 190,354 27.15

17
Graph 3.4.1 Gross profit ratio

Gross profit ratio

35
30
25
20
15
10
5
0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

Interpretation

The above graph represents Gross profit ratio, high gross profit ratio indicates an
increase in the profit margin. The gross profit has improved during the year 2019 (0.33) and
2022 (0.31) compared to the other years.

3.4.2 NET PROFIT RATIO

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been deducted
from sales, and income taxes recognized. As such, it is one of the best measures of the overall
results of a firm, especially when combined with an evaluation of how well it is using its
working capital. The measure is commonly reported on a trend line, to judge performance over
time. It is also used to compare the results of a business with its competitors.

Formula: Net profit / Sales * 100

Table 3.4.2 Net profit ratio

Year Net Profit Sales Net profit ratio

2018-2019 30,065 10 300650
2019-2020 33,260 5 665,200
2020-2021 30,960 7 442285.71
2021-2022 38,187 19 200984.21
2022-2023 39,106 27 411,837.037

18
Graph 3.4.2 Net profit ratio

Net Profit ratio

800,000
600,000
400,000
200,000
0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Series 1

Interpretation

The above graph represents Net profit ratio where higher net profit indicates that the
company is more efficient at converting sales into actual profit. The ratio in 2019-2020
(665,200) is good comparing the ratio of 2018-2019 (300650), 2020-2021 (442285), 2021-
2022 (200984), 2022-2023 (411,837).

19
CHAPTER 04
FINDINGS, SUGGESTIONS & CONCLUSIONS
4.1 FINDINGS

1. The current ratio for 2019-2023 it is good as it is above 2 and it meets its current
liabilities easily.
2. From 2020 quick ratio was above standard but in 2019 quick ratio got improvement.
3. The working capital ratio compared to 2020 to 2023, ratio of 2019 has increased so the
year has more significant asset to pay off its current liabilities.
4. All the year debt ratio for the year 2019 to 2023 has highest of 90% of the assets.
5. Interest coverage ratio for the year 2018-2019 has highest ability to service the debts
whereas 2019-2020 has greater chance that the company won’t be able to service debts
comparing all the years from 2019-2023.
6. Inventory turnover ratio for 2019-2020 is good as it between value 5-10 which indicates
selling and restock inventories every month comparing other years.
7. Fixed asset turnover value is above 1 which is considered as performing efficiency, but
in 2020-2021 the company’s performance was less efficiently.
8. Capital employed turnover ratio is high during 2020-2021 where company has utilized
the amount of capital invested effectively, where 2018-2019 has not managed
efficiently.
9. The year 2019-2020 shows high net profit which indicates that the company is more
efficient at converting sales into actual profit comparing other years.

20
4.2 SUGGESTIONS

1. It's great that the current ratio for 2019-2023 is consistently above 2, indicating the
company's ability to meet its short-term liabilities.

2. It's essential to maintain a healthy net working capital to ensure financial stability. periodic
financial audits can help identify inefficiencies and opportunities for improvement in your
working capital management.

3. A consistently high debt to net asset ratio can indicate potential financial risks so
Maintaining a balanced debt to net asset ratio is crucial for financial stability and risk
management.

4. A declining interest coverage ratio indicates potential difficulties in servicing debt

obligations so it's essential to closely monitor the interest coverage ratio and take proactive
steps to ensure the company's ability to meet its debt obligations.

5. Consistently managing inventory turnover can help improve cash flow and overall business
performance.

6. Improving the fixed asset turnover ratio is essential for maximizing the efficiency of capital
investments. Regular monitoring and adjustment of asset management practices are key to
achieving higher performance in this aspect.

7. Efficient capital utilization is essential for sustainable growth and profitability regularly
review and adjust your capital allocation strategies based on changing circumstances.

8. maintaining and improving profitability is an ongoing process that requires a combination

of strategic planning, operational efficiency, and market awareness. Regular financial analysis
and adjustment of business strategies are key to achieving and sustaining higher
net profit margins.

21
4.3 CONCLUSION

It describes the firm’s financial position as the data indicates that the TCS is a
international services and has expanded its services on the offers the large range of product but
on the other side the financial statement it is clear that the financial position of TCS it is more
preferred by the customers and also internationally distributed it also has helps less risk some
time gained to maintain the same position in other hand company give high rate of returns
because it gain high profit all the company have the swot analysis. The financial performance
of a company could be assessed by examining its liquidity profitability and growth. Liquidity
is the ability of the firm to meet its liabilities. It helps the creditors, banks and other financial
institutions to make decisions on lending to the concerned firm profitability. The ability of the
firm in earning profits and its efficiency to utilize the assets towards maximizing the profits.
The study concludes that “TATA CONSULTANCY SERVICES” liquidity and solvency
position are considered satisfactory.

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ANNEXURE

BALANCE SHEET FOR THE FINANCIAL YEAR 2019-2023

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STATEMENT OF PROFIT & LOSS FOR FINANCIAL YEARS 2019-2023

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