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 on Wipro Ltd.

Submitted by
Name of the Candidate: Asmita Das
C.U. Registration No: 544-1211-0851-18
Name Of The College:Vivekananda College, Thakurpukur

C.U. Roll No: 181544-11-0022

Supervised by
Name of the Supervisor: Prof. Sumi Karmakar

Name of the College: Vivekananda College, Thakurpukur

July, 2021

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 Student’s Declaration
I hereby declare that the Project Work with the title Financial
Statement Analysis on Wipro Ltd. Submitted by me for the partial
fulfillment of the degree of B.Com(Honours) in Accounting and
Finance 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 incorporate 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:KOLKATA Name: ASMITA DAS
Address: 224/16 A,UB Road,Behala
Date: Parnasree Flying Club

Kolkata 700060
C.U. Regn. No:- 544-1211-0851-18
C.U. Roll No.: 181544-11-0022

College Roll: 213

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 Supervisor’s Certificate
This is to certify that Ms. ASMITA DAS, a student of
B.Com(Honours) in Accounting and Finance of Vivekananda College,
Thakurpukur under the University Of Calcutta has worked under my
supervision and guidance for his Project Work and prepared a Project
Report with the title Financial Statement Analysis on Reliance Industries
Ltd.
The project report, which he is submitting, is his genuine and original
work to the best of my knowledge.

Signature:
Place: KOLKATA Name: Prof. Sumi Karmakar
Name of the College:
Date:
VIVEKANANDA COLLEGE,
Thakurpukur, Kolkata-700063

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 ACKNOWLEDGEMENT

I convey my heartfelt appreciation to Prof. Sumi Karmakar without

whose cordial and active supervision the project could not have come to
light. I also extend my thanks to all other teachers of my college for their
commendable efforts to bring out this project in a very short span of
time.

Again I am thankful to Prof. Sumi Karmakar for reposing confidence

on me to write on this dynamic subject and share his vast knowledge for
the completion of this project.
Moreover, I am also thankful to all other learned members of my college
for valuable suggestions regarding the project.

My sincere thanks to Dr. Tapan Kumar Poddar, Principal of

Vivekananda College for giving me this opportunity to carry out this
project.

Date:

(Signature of the Student)

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 CONTENTS

1. Introduction
1.1. Background of the Study
1.2. History of the Company
1.3. The birth of the name WIPRO
1.4. Name of GROUP COMPANIES
1.5. Company profile
1.6. Strengths of the Company
2. Objectives and Methods
2.1. Objectives
2.2. Methods of Analysis
2.3. Type of Data Collection
2.4. Nature of Ratio Analysis
2.5. Types OF Ratio
3. DATA ANALYSIS AND INTERPRETETION
3.1. Product profile
3.2. Financial Trends
3.3. Liquidity Ratio
3.4. Profitability Ratio
3.5. Solvency Ratio
4. FINDINDS AND CONCLUSION
4.1. Findings
4.2. Benefits of the Study
4.3. Limitations
4.4. Conclusion
5. BIBLIOGRAPHY

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CHAPTER 1 : INTRODUCTION

1.1 Background of the Study:

The project Financial Statement Analysis of WIPRO is prepared for fulfilling the course
requirement of C.U. academic structure. As we do not have the proper imagination of real business
situation so I think it is an opportunity for the student to know about the real situation of a company
and to understand the financial position of a company, especially it is very useful for students from
commerce field to make this report.

Financial Statement Analysis is the process of examining a company’s performance in the

context of its industry and economic environment in order to arrive at a decision. It is the process of
identifying the financial strengths and weakness of the firm. It is done by establishing relationships
between the items of financial statements, balance sheet and profit and loss account and ratio
analysis etc. Financial analysis can be undertaken by management of the firm, owners, creditors,
investors and others. The study provides knowledge about how the theoretical aspects are put in
the organization.

I have made this project on Western India Product (WIPRO), I wanted to work on this
project report because financial statement analysis is used to identify the trends and relationship
between financial statement items and financial statement need to evaluate the organization’s
profitability, liquidity and solvency and I wanted to evaluate these financial statement items to
know the company’s profitability, liquidity, solvency and etc.

1.2 History of the company:

Wipro limited is an Indian multinational corporation that provides information technology

services, consulting and business process outsourcing, network integrations, software solutions etc.
The company was incorporated on 29 December 1945 in Amalner, Maharashtra founded by
Mohamed Premji as "Western India Products", later abbreviated to "Wipro". It was initially set up
as a manufacturer of vegetable and refined oils in Amalner, Maharashtra, British India, under the
trade names of Kisan, Sunflower and camel .During the 1970s and 1980s, the company shifted its
focus to new opportunities in the IT and computing industry, which was at a nascent stage in India
at the time.

1.3 The birth of the name WIPRO:

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

Premji as "Western India Products", later abbreviated to "Wipro". ... On 7 June 1977, the name of
the company changed from Western India Vegetable Products Limited, to Wipro Products Limited.
In 1982, the name was changed again, from Wipro Products Limited to Wipro Limited.

1.4 GROUP COMPANIES:

● Wipro Infrastructure Engineering Ltd

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● Wipro Inc.

● Wipro Japan KK

● Wipro Shanghai Ltd.

● Wipro Trademarks Holding Ltd.

● Wipro Travel Services Ltd.

● Wipro Cyprus Private Ltd.

● Wipro Consumer Care Ltd.

● Wipro Health Care Ltd.

● Wipro Chandrika Ltd.(a)

● Wipro Holdings (Mauritius) Ltd.

● Wipro Australia Ltd.

● Quantech Global Service Ltd.

● Planet PSG Pvt. Ltd.

1.5 Company profile :

Wipro continued to expand in the consumer products domain with the launch of "Ralak" a
Tulsi based family soap and "Wipro Jasmine", toilet soap. In 1988, Wipro added mobile hydraulic
cylinders and heavy-duty industrial cylinders to its line of products. A joint venture company with
the United States' General Electric in the name of Wipro GE Medical Systems Pvt. Ltd. was set up
in 1989 for the manufacture, sales, and service of diagnostic and imaging products. The "Santoor"
talcum powder and "Wipro Baby Soft" range of baby toiletries were launched in 1990. In 1999,
Wipro. In 1999, Wipro released new products such as the Wipro SuperGenius personal computers.
In 1999, it was the one Indian PC range to obtain US-based National Software Testing Laboratory
certification for the Year 2000 compliance in hardware for all models. Wipro joined with KPN
(Royal Dutch telecom) to form a joint venture company "Wipro Net Limited" to provide internet
services in India. In 2000 Wipro launched Wipro OSS Smart and Wipro WAP Smart. In the same
year, Wipro was listed on the New York Stock Exchange. In February 2002, Wipro became the
first software technology and services company in India. As the company grew, a study revealed
that Wipro was the fastest wealth creator for 5 years (1997–2002). It set up a wholly owned
subsidiary company (Wipro Consumer Care Limited) to manufacture consumer care and lighting
products. In 2004 Wipro joined the billion dollar club. It also partnered with Intel for i-shiksha . In
2006, Wipro acquired a US-based technology infrastructure consulting firm and a Europe-based
retail provider. In 2008, the firm entered the clean energy business with Wipro Eco Energy. In
April 2011, the firm signed an agreement with Science Applications International Corporation

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(SAIC) for the acquisition of their global oil and gas information technology practice. In 2012,
Wipro employed more than 70,000 temporary workers in the United States. In 2017, the firm won a
five-year IT infrastructure and applications managed services engagement with Grameenphone
(GP), a major telecom operator in Bangladesh. By this way, Wipro increasing their wealth and
continuing their business as a successful company in India.

Today India’s fourth largest IT firm Wipro has business across India and outside of India
and it named as Western India Palm Refined Oil Limited. It has IT services, consulting,
outsourcing, managed services business and it make and sale lighting products, personal care and
health care products , furniture etc across India . In May 2016, it was ranked 755th on the Forbes
Global 2000 list. In March 2017, Wipro was recognized as one of the world's most ethical
companies by US-based Ethisphere Institute for the sixth consecutive year. In 2018, Wipro
received ATD's Best of the BEST Award. According to Brand Finance India 100 2020 report
India's fourth-largest IT firm Wipro is ranked 11. Wipro wins “Global Breakthrough Partner of the
Year” from Pivotal Software in 2019. Wipro is the ninth largest employer in India with nearly
195,000 employees. In 2018, Wipro received ATD's Best of the BEST Award.

1.6 Strengths:-

❖ Largest third party R&D service provider in the world.

❖ Largest Indian Technology Infrastructure management service provider.
❖ A vendor of choice in the Middle East.
❖ Among the top 3 Indian BPO service provider by revenue.
❖ Among the top 2 domestic IT services company in India.

CHAPTER 2 : Objectives and Methods :

2.1 Objectives:-

• To analyze the profitability position of the company.

•To analysis the financial position and soundness of the business enterprise.

• To evaluate the earning capacity of the business.

• To estimate and determine the possibilities of future growth of business.

• To access the return on Investment.

• to compare between past and present results.

• To analyze the capital structure of the firm etc .

2.2 METHODS OF ANALYSIS:

A financial analyst can adopt the following tools for analysis of the financial statements.
These are also termed as methods of financial analysis.
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A. Comparative statement analysis

B. Common-size statement analysis

C. Trend analysis

D. Funds flow analysis

E. Ratio analysis

2.3 Type of Data Collection:

The collection method involved is Secondary Data i.e. the data which already exists and is
collected from the published sources. The source from which secondary data is collected is internet,
website of the company, money control site.

Scope of Research: The scope of the research is limited to one company sticking to 5 years
of data, only analyzing the financial statement of 5 financial years.

2.4 NATURE Of RATIO ANALYSIS

Ratio Analysis is a powerful tool of financial analysis. A ratio is defined as "the indicated quotient
of mathematical expression" and as "the relationship between two or more things". A ratio is used
as benchmark for evaluating the financial position and performance of the firm. The relationship
between two accounting figures, expressed mathematically, is known as a financial ratio.

2.5 TYPES OF RATIOS

Management is interested in evaluating every aspect of firm's Performance. In view of the

requirement of the various users of ratios,

we may classify them into following four important categories:

1. Liquidity Ratio: Current ratio, quick ratio, cash ratio

2. Leverage Ratio: Debt equity ratio, capital gearing ratio, interest coverage ratio, debt ratio,
proprietary ratio.

3. Activity Ratio: Total capital turnover ratio, fixed assets turnover ratio, stock turnover ratio,
working capital turnover ratio.

4. Profitability Ratio: Gross profit ratio, Operating profit ratio, Net profit ratio, Return on
investment, Earns per share, Operating expenses ratio etc.

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 CHAPTER :3 DATA ANALYSIS AND INTERPRETETION

3.1 Product profile: Wipro is a well-recognized global company that integrates technical know-
how, business knowledge, and industry expertise to design some of the best products and solutions
in IT industry. It is one of the largest conglomerates which has a varied and diversified product
portfolio that spreads over sectors like automotive, aerospace, energy, consumer goods, retail,
media, analytics, professional services, product engineering and several more. The company works
on technologies like Python, Agile, Dot Net, SAP, and Java. The product portfolio of Wipro
technologies include .

3.2 Financial Trends: Financial trend analysis is a technique used in technical analysis that
attempts to predict the future stock price movements based on recently observed trend data. Trend
analysis is based on the idea that what has happened in the past gives traders an idea of what will
happen in the future. A financial trend is the general direction the market is taking during a
specified period of time. Financial trend analysis is the process of trying to look at current financial
trends in order to predict future ones and is considered a form of comparative analysis.

3.3 Liquidity Ratio: It measures the ability of the firm to meet its short-term obligations that is
capacity of the firm to pay its current liabilities as and when they fall due. Thus these ratios reflect
the short-term financial solvency of a firm. A firm should ensure that it does not suffer from lack of
liquidity. The failure to meet obligations on due time may result in bad credit image, loss of
creditors confidence, and even in legal proceedings against the firm on the other hand very high
degree of liquidity is also not desirable . So therefore it is necessary to strike a proper balance
between liquidity and lack of liquidity.

The various ratios that explains about the liquidity of the firm are:

1. Current Ratio

2. Acid Test Ratio / quick ratio

3. Absolute liquid ration / cash ratio

1. CURRENT RATIO: The current ratio measures the short-term solvency of the firm. It
establishes the relationship between current assets and current liabilities.

Current Ratio = Current Assets / Current Liabilities

CURRENT RATIOS

Year 2020 -21 2019 - 20 2018 -19 2017 – 18 2016 – 17

Ratios 2.50 2.78 2.96 2.86 3.52

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Interpretation:

• Current ratio is always 2:1 it means the current assets two times of current liabilities

• After observing the figure the current ratio is fluctuating.

• In the year 2020 ratio is showing good shine.

• Here ratio is increase as an increasing rate from 2016 to 2021.

• Company is nowhere near the ideal ratio in every year but every company cannot achieve.

2. ACID TEST RATIO / QUICK RATIO: It has been an important indicator of the firm’s liquidity
position and is used as a complementary ratio to the current ratio. It establishes the relationship
between quick assets and current liabilities.

Quick ratio = Quick Assets / current Liabilities

Here quick assets = current assets - stock – prepaid expenses.

QUICK RATIOS

Year 2016 - 17 2017 – 18 2018 – 19 2019 – 20 2020 – 21

Ratios 3.50 2.84 2.94 2.77 2.50

Interpretation

•Standard Ratio is 1:1

•Company’s Quick Assets is more than Quick Liabilities for all these 5 years.

• In 2007-08 the ratio is increasing because of increase in bank and cash balance.

• In the year 2019 – 20 the quick ratio is decreased because the increase in quick assets is less
proportionate to the increased quick liabilities.

• The Quick ratio was at its peak in 2016-17, while was lowest in 2016 – 17.

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 Net working Capital

Net working capital = Current Assets – Current Liabilities

NET WORKING CAPITAL

Year 2020 - 21 2019 – 20 2018-19 2017-18 2016-17
Ratios 26247.1 29269.5 31585.8 27931.4 2018-19

Interpretation: This ratio represents that part of the long term funds represented by the net worth
and long term debt, which are permanently blocked in the current assets.

3.4 Profitability Ratio: The profitability ratio of the firm can be measured by calculating various
profitability ratios. General two groups of profitability ratios are calculated.

a.Profitability in relation to sales.

b.Profitability in relation to investments.
The following Profitability Ratios are calculated for the company:-

Gross profit Ratio: It measures the relationship between gross profit and sales. It is calculated by
dividing gross profit by sales. It is a useful indication of the profitability of business.
Gross profit ratio = Gross profit * 100 / sales
GROSS PROFIT RATIO OR MARGIN (%)
Year 2020-21 2019-20 2018-19 2017-18 2016-17
Ratios 21.28 17.98 16.26 17.75 18.47

Interpretation:

GP Ratio shows how much efficient company is in Production.

GP is lowest in the year of 2018-19 and GP ratio is in peak in 2020-21.

OPERATING RATIO

This ratio shows the relation between Cost of Goods Sold + Operating Expenses and Net Sales.
It shows the efficiency of the company in managing the operating costs base with respect
to Sales. The higher the ratio, the less will be the margin available to proprietors.

Operating profit margin or ratio = Operating expenses X 100

Net sales
Operating expenses includes cost of goods produced/sold, general and administrative expenses,
selling and distributive expenses .
OPARATING RATIOS (%)
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Year 2020-21 2019-20 2018-19 2017-18 2016-17
Ratios 23.96 20.24 18.02 20.02 20.75

Interpretation:

❖ Operating ratio is lowest in the year of 2018-19

❖ Operating ratio was decreasing up to 2018-19 then it started increasing.

NET PROFIT MARGIN OR RATIO :

It measures the relationship between net profit and sales of a firm. It indicates management’s
efficiency in manufacturing, administrating, and selling the products. It is calculated by dividing net
profit after tax by sales.

Net profit margin or ratio = Earnings after tax X 100

Net Sales

NET PROFIT RATIO (%)

YEAR 2020-21 2019-20 2018-19 2017-18 2016-17

Ratios 20.00 17.22 15.82 17.27 17.72

Interpretation:
Net profit ratio is decreased up to 2019-20
In the year of 2020-21 it has highest net profit ratio
Though the company’s sale is continuously rising but the net profit is not so increased so
management should take some steps to decrease its expenses.

The overall ratio is showing good position of the company.

RETURN ON CAPITAL EMPLOYED

YEAR 2020-2021 2019-2020 2018-19 2017-18 2016-17

RTIOS 27.49 23.60 20.44 23.87 23.61

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 INVENTORY TURNOVER RATIO

Inventory turnover ratio = cost of goods sold /average stock

YEAR 2020-2021 2020-2019 2019-2018 2018-2017 2017-2016

RATIOS 552.74 289.53 141.42 151.92 129.38

3.5 Solvency Ratio : The solvency or leverage ratios throws light on the long term solvency of
a firm reflecting its ability to assure the long term creditors with regard to periodic payment of
interest during the period and loan repayment of principal on maturity or in predetermined
installments at due dates. There are thus two aspects of the long-term solvency of a firm.

The ratio is based on the relationship between borrowed funds and owner’s capital it is computed
from the balance sheet, the second type are calculated from the profit and loss a/c. The
various solvency ratios are

Debt Ratio

Debt-Equity Ratio

Interest Coverage Ratio

TOTAL DEBT OR EQUITY

Year 2020-2021 2019-2020 2018-19 2017-18

Ratios 0.11 0.13. 0.17 0.11

CHAPTER 4 FINDINDS AND CONCLUSION

4.1 Findings : Though the sales has been c o n t i n u o u s l y increased from past 5 years but
the proportionate expenditure is also rising so overall not making any huge effect on net profit of
this company.

4.2 BENEFITS OF THE STUDY :

Through financial statement analysis we can determine and identify financial strengths, weaknesses
and relationships that exist in your company.

Keep Current on Debts

Determine Profit Margins of the company.

By preparing this project we can track Inventory .

Determine Debt To Equity

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See Improvement Over Time.

4.3 LIMITATIONS

• The study was limited to only FIVE years Financial Data.

•The study is purely based on secondary data which were taken primarily from Published
annual reports of WIPRO

•The ratio is calculated from past financial statements and these are not indicators of future.

•The study is based on only on the past records.

• Non availability of required data to analysis the performance.

•The short span of the time provided also one of limitations.

4.5 Conclusion: According to this Research we find that The Company’s overall position is at a
good position. The company achieves sufficient profits in past four years. Fixed assets are
efficiently utilized by the company due to which the profit of the company is increasing every
year. The company maintains low liquidity to achieve high profitability. The company distributes
dividend every year to its shareholders. Inventory turnover ratio is increased as compared to
after that all year so management should take care about good efficiency of stock
management. Though the sale is continuously rising but the net profit is increased so management
should take some steps to decrease its expenses.

5 BIBLIOGRAPHY

https://www.moneycontrol.com

https://www.slideshare.net

https://www.equitymaster.com

https://www.wipro.com

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