A STUDY ON THE FINANCIAL ANALYSIS OF THOMAS COOK

(INDIA) LTD.

(Pre-COVID & Post-COVID)

Submitted as a part of MBA II year course requirement

By

K. LAKSHMI PRIYA

RA2252001040191

Under the guidance of

Dr. KARTHIKEYAN

(Assistant Professor)

1
 SRM INSTITUTE OF SCIENCE AND TECHNOLOGY

VADAPALANI, CHENNAI

FACULTY OF MANAGEMENT

MAY 2024

BONAFIDE CERTIFICATE

This is to certify that K LAKSHMI PRIYA (RA2252001040191) is a Bonafide Student of

Faculty of Management, SRM Institute of Science and Technology, Vadapalani, Chennai.
She is in the II year of Master's Degree Program in Business Administration (MBA). She has
done this project under my guidance and supervision towards part fulfilment of II-year MBA
course requirement.

Project Guide: MBA Program Coordinator:

Date:

Place: CHENNAI

Signature of Internal Examiner Signature of External Examiner

2
 DEPARTMENT SEAL

DECLARATION

I K LAKSHMI PRIYA (RA2252001040191) studying in II year MBA program at Faculty

of Management, SRM Institute of Science and Technology, Vadapalani, Chennai, hereby
declare that this project is an original work of mine and I have not verbatim copied /
duplicated any material from sources like internet or from print media, excepting some vital
company information / statistics and data that is provided by the company itself.

Signature of the Student:

Date:

Place: Chennai

3
 ACKNLOWDEGEMENT

To everyone who helped to finish this research study on the financial analysis of Thomas
Cook India Limited, my sincere gratitude is extended.

First and foremost, I would like to express my sincere gratitude to Thomas Cook India
Limited's management and employees for their assistance and collaboration during the
research process. Their readiness to grant access to financial information and insights has
been crucial to carrying out a thorough investigation.

I am so appreciative of my supervisor, Dr. KARTHIKEYAN, for all their help, support, and
knowledge. Their insightful comments and helpful criticism have been extremely helpful in
determining the course of this study and improving its caliber.

Additionally, I would like to thank Mr.Chinna (Regional Manager of TCIL) for their
participation, as their insightful opinions have enhanced the study's discussions and
conclusions.

I also want to express my gratitude to my classmates and colleagues for their encouragement
and support during this research project. Their cooperation and sharing of ideas have been
crucial to improving the approach and doing a thorough analysis of the data.

Lastly, I would want to express my sincere gratitude to my family and friends for their
steadfast support and inspiration along this trip. The above mentioned people and
organizations' assistance and contributions were essential to the success of this research
project. I genuinely appreciate all their help and support.

Sincerely,

K. LAKSHMI PRIYA

4
 ABSTRACT

This study examines Thomas Cook (India) Limited, one of the top travel and tourist
businesses in India, in detail from a financial stand point. This study intends to assess
Thomas Cook India Limited's financial performance, stability, and growth potential over a
given period using a combination of quantitative and qualitative research approaches.

The company's financial health and operational effectiveness are evaluated by the research
using a variety of financial statistics, such as liquidity, profitability, solvency, and efficiency
ratios. Qualitative elements that are considered in the analysis include market rivalry,
industry developments, regulatory environment, and the company's strategic ambitions. The
study's conclusions identify potential hazards and opportunities for improvement while
offering insights into Thomas Cook India Limited's financial strengths and shortcomings. To
assure sustainable growth and profitability, the report also provides recommendations for
improving financial performance, maximizing resource use, and reducing risks.

All things considered, this study adds to the body of knowledge already available on financial
analysis and offers insightful information to stakeholders, investors, and management experts
who are curious about the financial dynamics of Thomas Cook India Limited and other
businesses in the travel and tourism industry

5
 TABLE OF CONTENT

CONTENTS TITLE PAGE NO.

Title Page 1
Bonafide Certificate 2
Declaration 3
Acknowledgement 4
Abstract 5
Internship Completion Certificate 6
Chapter – 1 1.1 Introduction 9
1.2 Industry Profile 12
1.3 Company Profile 19
1.4 Statement of the problem 21
1.5 Objective of the study 21
1.6 Needs & Scope of the Study 22
1.7 Limitations of the study 23
1.8 Chapter Scheme 24
Chapter - 2 Review of Literature 26
Chapter – 3 Research Methodology 36
Chapter – 4 Data analysis and Interpretation 39
Chapter – 5 Findings, suggestions and Conclusion
5.1 Findings 68
5.2 Suggestions 69
5.3 Recommendations 69
5.4 Conclusion 70
Bibliography 71

6
 LIST OF TABLES AND FIGURES

TABLE NO. TITLE PAGE NO.

BASIC DETAILS 19

4.1.1 CURRENT ASSET RATIO 42

4.1.2 ABSOLUTE LIQUIDITY RATIO 46

4.1.3 WORKING CAPITAL TURNOVER RATIO 48

4.1.4 DEBTOR TURNOVER RATIOS 50

4.1.5 CREDITOR TURNOVER RATIO 52

4.1.6 INVENTORY TURNOVER RATIO 54

4.1.7 FIXED ASSET TURONVER RATIO 55

4.2.1 TREND ANALYSIS OF WORKING CAPITAL 57

4.2.2 TREND ANALYSIS OF CURRENT ASSESTS 58

4.2.3 TREND ANALYSIS OF CURRENT LIABILITIES 59

PROFIT & LOSS STATEMENT (2016-17) 60

PROFIT & LOSS STATEMENT (2017-18) 61

PROFIT & LOSS STATEMENT (2018-19) 62

PROFIT & LOSS STATEMENT (2019-20) 63

PROFIT & LOSS STATEMENT (2020-21) 64

7
CHAPTER – 1
INTRODUCTION

8
The name Thomas Cook can refer to two things: the man who revolutionized travel, and the
travel company he founded. Thomas Cook, the person, pioneered the concept of modern
tourism in the 19th century by organizing the first packaged tours, complete with
transportation and accommodation. His company, Thomas Cook and Son, grew into a global
travel giant offering various services. However, the original Thomas Cook Company
collapsed in 2019.

There is, however, an independent Indian travel company called Thomas Cook (India)
Limited, established in 1881. This separate entity continues to operate successfully, providing
a wide range of travel services in India and beyond. While the original Thomas Cook
company did not survive the pandemic, Thomas Cook (India) Limited adapted to navigate the
challenges of COVID – 19. Major strategies used by Thomas Cook to overcome pandemic
were;

• Focusing on domestic tourism: With the international travel restricted, they catered to rise
in domestic travel by offering staycation, workcations, and tours to off-the-beaten-path
destinations within India.

• Embracing digitalization: They streamlined booking processes and offered contactless

services to cater to traveller's safety concerns and the shift towards online booking.

9
• Prioritizing customer safety: They launched programs like “Assured Safe Travel” which
emphasized health and hygiene protocols throughout the travel journey.

• Cost optimization: By implementing automation and focusing on financial management,

they reduced operational costs to weather the financial strain.

These adaptations helped Thomas Cook (India) Limited stay afloat during the pandemic and
even achieve some level of recovery.

Forex services, short for foreign exchange services, represent a critical component of the
global financial ecosystem. The forex market, where these services are predominantly
offered, is a vast and dynamic marketplace where currencies from around the world are
traded, making it the largest and most liquid financial market globally. Forex services play a
pivotal role in enabling international trade, investment, and financial transactions by
providing the infrastructure and mechanisms necessary for the exchange of one currency for
another. One of the fundamental aspects of forex services is the concept of currency pairs. In
forex trading, currencies are traded in pairs, with one currency being exchanged for another.
These pairs are classified into three categories: major, minor, and exotic, based on their
liquidity and trading volume. The most traded currency pair is the EUR/USD, representing
the euro against the US dollar. Understanding these pairs is essential for market participants,
as they form the basis for all forex transactions. The participants in the forex market are
diverse, ranging from large financial institutions and central banks to multinational
corporations, individual traders, and speculators. Each group brings its unique objectives and
strategies to the market, contributing to its constant flux and vibrant nature.

Central banks, for instance, may participate to stabilize their domestic currency or influence
their nation's economic conditions, while individual traders often aim to profit from short-
term price movements. Forex services encompass a broad spectrum of financial activities and
offerings. These services include currency exchange, where physical currency notes are
exchanged for another currency, typically utilized for international travel. Additionally, forex
services involve spot and forward transactions, options and futures trading, as well as
currency hedging and risk management solutions for businesses exposed to foreign exchange
fluctuations. The intricate and interconnected nature of these services makes them
indispensable in the global economy, supporting cross-border commerce and investment by
providing the means to manage currency exposure and conduct international financial

10
transactions efficiently. Forex services, also known as foreign exchange services, serve a
multitude of crucial functions in the modern global economy.

When individuals or companies engage in international commerce or travel, they often need
to convert their domestic currency into the currency of the destination country. Forex services
provide a platform for these conversions, ensuring that the exchange rates are fair and
transparent. Moreover, forex services play a pivotal role in risk management. Businesses
exposed to fluctuations in currency values, such as multinational corporations, rely on forex
services to hedge their currency risk. Through derivatives like forward contracts and options,
these entities can lock in exchange rates for future transactions, safeguarding their profit
margins and financial stability in the face of currency volatility. Investors and speculators
also heavily utilize forex services to capitalize on currency price movements. They engage in
currency trading, attempting to profit from fluctuations in exchange rates. This speculative
aspect of forex services adds liquidity and depth to the market, contributing to its dynamic
nature. Additionally, governments and central banks employ forex services to manage their
foreign exchange reserves and influence their domestic economies. By buying or selling their
own currency in the forex market, they can stabilize exchange rates, combat inflation, or
stimulate exports. In essence, forex services are the backbone of global finance, supporting
international trade, mitigating currency risk, and providing opportunities for investment and
speculation. Their importance extends beyond the financial sector, impacting the broader
economic landscape and influencing exchange rates that, in turn, affect the prices of goods
and services in markets worldwide.

11
1.2 INDUSTRY PROFILE

Tourism Industry International tourism is tourism that crosses national borders. Globalisation
has made tourism a popular global leisure activity. The World Tourism Organization defines
tourists as people "traveling to and staying in places outside their usual environment for not
more than one consecutive year for leisure, business and other purposes". The World Health
Organization (WHO) estimates that up to 500,000 people are in flight at any one time.

Modern aviation has made it possible to travel long distances quickly. In 2010, international
tourism reached US$919B, growing 6.5% over 2009, corresponding to an increase in real
terms of 4.7%. In 2010, there were over 940 million international tourist arrivals worldwide.
By 2016 that number had risen to 1,235 million, producing 1,220 billion USD in destination
spending. The COVID-19 crisis had significant negative effects on international tourism
significantly slowing the overall increasing trend.

International tourism has significant impacts on the environment, exacerbated in part by the
problems created by air travel but also by other issues, including wealthy tourists bringing
lifestyles that stress local infrastructure, water and trash systems among others.

In 1936, the League of Nations defined a foreign tourist as "someone traveling abroad for at
least twenty-four hours". Its successor, the United Nations, amended this definition in 1945,
by including a maximum stay of six months.

In 1941, Hunziker and Kraft defined tourism as "the sum of the phenomena and relationships
arising from the travel and stay of non-residents, insofar as they do not lead to permanent
residence and are not connected with any earning activity." In 1976, the Tourism Society of
England's definition was: "Tourism is the temporary, short-term movement of people to 29
destinations outside the places where they normally live and work and their activities during
the stay at each destination. It includes movements for all purposes". In 1981, the
International Association of Scientific Experts in Tourism defined tourism in terms of
particular activities chosen and undertaken outside the home.

Tourism is travel for pleasure or business; also, the theory and practice of touring, the
business of attracting, accommodating, and entertaining tourists, and the business of
operating tours. The World Tourism Organization defines tourism more generally, in terms
which go "beyond the common perception of tourism as being limited to holiday activity

12
only", as people "traveling to and staying in places outside their usual environment for not
more than one consecutive year for leisure and not less than 24 hours, business and other
purposes". Tourism can be domestic (within the traveller's own country) or international, and
international tourism has both incoming and outgoing implications on a country's balance of
payments. Tourism numbers declined as a result of a strong economic slowdown (the late-
2000s recession) between the second half of 2008 and the end of 2009, and in consequence of
the outbreak of the 2009 H1N1 influenza virus, but slowly recovered until the COVID-19
pandemic put an abrupt end to the growth. The United Nations World Tourism Organization
estimated that global international tourist arrivals might decrease by 58% to 78% in 2020,
leading to a potential loss of US$0.9–1.2 trillion in international tourism receipts.

Globally, international tourism receipts (the travel item in balance of payments) grew to
US$1.03 trillion (€740 billion) in 2005, corresponding to an increase in real terms of 3.8%
from 2010. International tourist arrivals surpassed the milestone of 1 billion tourists globally
for the first time in 2012, emerging source markets such as China, Russia, and Brazil had
significantly increased their spending over the previous decade.

Global tourism accounts for c. 8% of global greenhouse-gas emissions. Emissions as well as

other significant environmental and social impacts are not always beneficial to local
communities and their economies. For this reason, many tourist development organizations
have begun to focus on sustainable tourism in order to mitigate the negative effects caused by
the growing impact of tourism. The United Nations World Tourism Organization emphasized
these practices by promoting tourism as part of the Sustainable Development Goals, through
programs like the International Year for Sustainable Tourism for Development in 2017, and
programs like Tourism for SDGs focusing on how SDG 8, SDG 12 and SDG 14 implicate
tourism in creating a sustainable economy

13
Tourism in India

The tourism sector in India is an integral pillar of the Make in India programme. The tourism
industry in India plays a role of significant economic multiplier and becomes critical since
India has to grow at rapid rates and create jobs. India is estimated to contribute 250 Bn USD
GDP from Tourism, 137 mn jobs in the Tourism sector, 56 bn USD in Foreign Exchange
Earnings and 25 mn foreign arrivals are expected to be achieved by 2030. By 2028, Indian
tourism and hospitality is expected to earn $ 50.9 bn as visitor exports compared with $ 28.9
bn in 2018. International tourist arrivals are expected to reach 30.5 mn by 2028 The travel
market in India is projected to reach $ 125 bn by FY27 from an estimated $ 75 bn in FY20 31
In FY20, tourism sector in India accounted for 39 mn jobs, which was 8.0% of the total
employment in the country. By 2029, it is expected to account for about 53 mn jobs. It is
estimated that outbound trips from India will touch 29 mn by 2025 and cross the $24 bn mark
by 2024.

Domestic tourism continued to grow at a double-digit rate in 2012. The growth was driven by
rising numbers of people travelling across the country for pilgrimage, wildlife, sightseeing,
photography and adventure sports holidays. Figure 1 shows the total contribution of travel
and tourism to employment. Some of the other factors also include wider economic growth of
the country, rising disposable incomes, formal employment with leave entitlement etc.

Domestic tourism also witnessed growth due to increased marketing efforts through
television commercials, tour operators and agents of various states highlighting the best
tourism experiences on offer. Domestic tourism is expected to grow at a CAGR of 11% in the
forecast period in terms of number of trips. The number of holiday takers overall is expected
to increase at a CAGR of 5%, boosting domestic tourism. Additionally, disposable incomes
will rise, enabling locals to take more trips annually. Furthermore, the weakness of the Indian
rupee against the dollar and other currencies will encourage locals to take trips within the
country, where their purchasing power will be stronger.

(Over 30% Indian tourists are Gujarat‟s: Tourism ministry) Gujarat comes in ninth place
when it comes to attracting tourists from other Indian states and it is nowhere among the top
10 with regards to foreign tourist visits. However, the state takes the top slot when it comes to
travelling outside, be it within the country or to international locations, followed closely by
Maharashtra. Both, Gujarat and Maharashtra are front runners for offering tourists to

14
domestic and international circuits. Of the overall tourists from India visiting domestic as
well as international destinations, nearly 30-40 per cent are from Gujarat. Considering this
penchant of Guajarati‟s for travel, Gujarat Chief Minister 32 Narendra Modi had said during
his visit to West Bengal, “Gujarat was never a tourist destination, but Guajarati‟s are the best
tourists.”

Apart from Gujarat and Maharashtra, Delhi and West Bengal send the highest number of
tourists to various outside destinations. According to tourism ministry data, the number of
outbound tourists from India to international destinations increased by 6.7 per cent to 14.92
million in 2012 over the previous year. he ministry data also states that the total number of
domestic tourist visits in 2012 was 1.036 billion, that is to say over 1.036 billion domestic
tourists travelled to different parts of the country during 2012, up from 850 million travellers
in 2011.

Tourism is not only a growth engine but also an employment generator. According to the
Economic Survey 2011-12, the sector has the capacity to create large scale employment both
direct and indirect, for diverse sections in society, from the most specialized to unskilled
workforce. It provides 6-7 per cent of the world‟ s total jobs directly and millions more
indirectly through the multiplier effect as per the UN‟s World Tourism Organization
(UNWTO).

Completely skipping India because of so many incidents of rape and molestation that came to
light last year,” he said. he travels companies were hoping that because of the rupee
depreciation, inbound tourism would get a major boost in 2013. Figure 2 shows the
Plummeting growth of Foreign Tourist Travels. However, as challenges persist, most are now
pinning their hopes on 2014. “In the last one-year, inbound tourism has not grown to our
expectations due to sluggish economic climate in source markets. We believe this will change
and Indian tour operators will reap the benefits of this revival. Another factor that will help
India is the depreciation of the rupee by 12 per cent, which will boost inbound tourism in the
2014-15 seasons,” said Arup Sen, director (special projects), Cox & Kings.

15
Impacts of tourism on the economy

Tourism can bring many economic and social benefits, particularly in rural areas and
developing countries, but mass tourism is also associated with negative effects. Tourism can
only be sustainable if it is carefully managed so that potential negative effects on the host
community and the environment are not permitted to outweigh the financial benefits.
Tourism industry in India has several positive and negative impacts on the economy and
society. These impacts are highlighted below:

➢ Positive impacts:

1. Generating Income and Employment: Tourism in India has emerged as an instrument of

income and employment generation, poverty alleviation and sustainable human development.
It contributes 6.23% to the national GDP and 8.78% of the total employment in India. Almost
20 million people are now working in the India‟s tourism industry.

2. Source of Foreign Exchange Earnings: Tourism is an important source of foreign exchange

earnings in India. his has favourable impact on the balance of payment of the country. he
tourism industry in India generated about US$100 billion in 2008 and that is expected to
increase to US$275.5 billion by 2018 at a 9.4% annual growth rate.

3. Preservation of National Heritage and Environment: Tourism helps preserve several places
which are of historical importance by declaring them as heritage sites. 34 For instance, the
Taj Mahal, the Qutab Minar, Ajanta and Ellora temples, etc. would have been decayed and
destroyed had it not been for the efforts taken by Tourism Department to preserve them.
Likewise, tourism also helps in conserving the natural habitats of many endangered species.

4. Developing Infrastructure: Tourism tends to encourage the development of multiple use

infrastructure that benefits the host community, including various means of transports, health
care facilities, and sports centres, in addition to the hotels and high end restaurants that cater
to foreign visitors. he development of infrastructure has in turn induced the development of
other directly productive activities.

5. Promoting Peace and Stability: The tourism industry can also help promote peace and
stability in developing country like India by providing jobs, generating income, diversifying
the economy, protecting the environment, and promoting cross-cultural awareness. However,
key challenges like adoption of regulatory frameworks, mechanisms to reduce crime and

16
corruption, etc, must be addressed if peace-enhancing benefits from this industry are to be
realized.

➢ Negative impacts:

1. Undesirable Social and Cultural Change: Tourism sometimes led to the destruction of
the social fabric of a community. he more tourists coming into a place, the more the
perceived risk of that place losing its identity. A good example is Goa. From the late 60‟s to
the early 80‟s when the Hippy culture was at its height, Goa was a haven for such hippies.
Here they came in thousands and changed the whole culture of the state 35 leading to a rise in
the use of drugs, prostitution and human tracking. his had a ripple effect on the country.

2. Increase Tension and Hostility: Tourism can increase tension, hostility, and suspicion
between the tourists and the local communities when there is no respect and understanding
for each other‟s culture and way of life. his may further led to violence and other crimes
committed against the tourists. The recent crime committed against Russian tourist in Goa is
a case in point.

3. Creating a Sense of Antipathy: Tourism brought little benefit to the local community. In
most all-inclusive package tours, more than 80% of travellers‟ fees go to the airlines, hotels
and other international companies, not to local businessmen and workers. Moreover, large
hotel chain restaurants often import food to satisfy foreign visitors and rarely employ local
staff for senior management positions, preventing local farmers and workers from reaping the
benefit of their presence. his has often created a sense of antipathy towards the tourists and
the government.

4. Adverse Effects on Environment and Ecology: One of the most important adverse
effects of tourism on the environment is increased pressure on the carrying capacity of the
ecosystem in each tourist locality. Increased transport and construction activities led to large
scale deforestation and destabilization of natural landforms, while increased tourist low led to
increase in solid waste dumping as well as depletion of water and fuel resources. Flow of
tourists to ecologically sensitive areas resulted in destruction of rare and endangered species
due to trampling, killing, disturbance of breeding habitats. Noise pollution from vehicles and
public address systems, water pollution, vehicular emissions, untreated sewage, etc. also have
direct effects on bio-diversity, ambient environment and general profile of tourist spots.

17
Foreign Exchange Market

The Foreign exchange market is the market where in which currencies are bought and sold
against each other. It is the largest market in the world. It is to be distinguished from a
financial market where currencies are borrowed and lent. Foreign exchange market facilitates
the conversion of one currency to another for various purposes like trade, payment for
services, development projects, speculation etc. Since the number of participants in the
markets has increased over the years have become highly competitive and efficient. USD to
INR Chart With improvement in trade between countries, there was a pressing need to have
some mechanism to facilitate easy conversion of currencies. This has been made possible by
the foreign exchange markets. Considering international trade, a country would prefer to
import goods for which it does not have a competitive advantage, while exporting goods for
which it has a competitive advantage over others. Thus, trade between countries is important
for common good but nations are separated by distance, which that there is a lot of time
between placing an order and its actual delivery. No supplier would be willing to wait until
actual delivery for receiving payments. Hence, credit is very important at every stage of the
transaction. The much-needed credit servicing and conversion of the currency is facilitated by
the foreign exchange market. 37 Also, the exchange rates are subject to wide fluctuations.
There is therefore, a constant risk associated exchange markets cover the arising out of the
fluctuations in exchange rates through “hedging”. Forex market is not exactly a place and that
there is no physical meeting but meeting is affected by mail or over phone.

18
1.3 COMPANY PROFILE

Thomas Cook (India) Ltd. (TCIL) is the leading integrated travel services company in the
country offering a broad spectrum of services that include Foreign Exchange, Corporate
Travel, MICE, Leisure Travel, Value Added Services, Visa & Passport services and E-
Business. The company set up its first office in India in 1881.

The Thomas Cook India Group spanning 25 countries across 5 continents, a team of over
8388 and a combined revenue in excess of Rs. 6948.3 Cr. (over $ 0.93 Bn.) for the financial
year ended March 31, 2020, operates leading B2C and B2B brands including, Thomas Cook,
SOTC, TCI, SITA, Asian Trails, Allied T Pro, Australian Tours Management, Desert
Adventures, Luxe Asia, Kuoni Hong Kong, Sterling Holiday Resorts Limited, TC Forex,
Distant Frontiers, 39 TC Tours, TC Visa, Travel Circle International Limited, Ithaka,
Digiphoto Entertainment Imaging (DEI), Private Safaris East & South Africa. The Group is
today one of the largest travel service provider networks headquartered in the Asia-Pacific
region.

19
TCIL has been felicitated with The Best Travel Agency – India at TTG Travel Awards 2019,
The Best Outbound Tour Operator at the Times Travel Awards 2018 & 2019 and Leading
Company with Cutting Edge Travel Innovation at the Times, Silver award for Asia's Best
Integrated Report (First Time) category at the Asia Sustainability Reporting Awards, Best
Risk Management-Framework & Systems at the India Risk Management Awards 2019; Best
Cash Management Solution – India at the Asset Triple A Treasury, Trade, Supply Chain &
Risk Management Awards 2018, Best Outbound Tour Operator at the SATTE awards 2019,
Excellence in Domestic Tour Operations at the SATTE Awards 2018, The French
Ambassador‟s Award for Exemplary Achievements in Visa Issuance – 2015 to 2019 and the
Condé Nast Traveller – Readers‟ Travel Awards from 2011 to 2019.

History

Thomas Cook had many ventures including the invention of the world's package tour in 1841,
the first pre-paid hotel coupon in 1868, creation of the first holiday brochure in 1858, and
conceptualization of the first Travellers Cheques in 1874.

In 1881, Thomas Cook started its India operations in Bombay (later renamed Mumbai), and
in October 1978, saw it christened Thomas Cook (India) Ltd. The company made its first
public issue in February 1983, and commenced operations in Mauritius in 2000. In the same
year, they acquired the Sri Lanka business from Thomas Cook Overseas Ltd, UK.

In 2006, Thomas Cook India Limited acquired LKP Forex Limited and Travel Corporation
(India) Pvt. Ltd. (TCI).

In May 2012, Fair bridge Capital (Mauritius) Limited acquired Thomas Cook India, and
became a part of Fairfax Group, Canada.

In 2013, Thomas Cook India Limited acquired Quess Corp (formerly known as Ikya Group -
HR, IT Services, Facilities Management, Food Services, Skill Development), and Sterling
Holiday Resorts.

In 2015, Thomas Cook Lanka Pvt. Ltd. (a subsidiary of Thomas Cook India Limited)
acquired Luxe Asia Pvt. Ltd., Sri Lanka, a regional Destination Management Company
handling inbound tourists from globally generating markets to its destinations. In the same
year, TCIL announced the acquisition of Kuoni Travel (India) Private Limited, a travel
operator in India, and Kuoni Travel (China) Limited, a travel operator in Hong Kong.

20
In September 2017, Thomas Cook acquired Tata Capital's forex and travel business. In the
aftermath of the collapse of Thomas Cook in the UK, the Indian namesake was considering
rebranding itself to avoid the negative perception caused by the collapse of the UK travel
company.

1.4 STATEMENT OF THE PROBLEM

Thomas Cook is one of the prominent Company in india. From the financial
year 2018-2019 the company faced unstable growth patterns in their profit. In
2019 the profit pattern got stabilized quarter by quarter. When covid hit the
world in 2020, the patterns appeared again in the profit growth of the company.
As the world is expecting a recession anytime soon, it is 41 important to
understand the pre COVID financial performance of the company with the help
of ratio analysis.

With this background the present research intends to study the concept of
exposure to financial data with particular reference to Thomas Cook

1.5 OBJECTIVE OF THE STUDY:

 Evaluate the financial performance of Thomas Cook (India) Ltd. before and after the
COVID-19 pandemic.
 Assess the impact of COVID-19 on the financial metrics, such as revenue, profit
margins, and liquidity, of Thomas Cook (India) Ltd.
 Analyse the changes in key financial ratios, such as debt-to-equity ratio, current ratio,
and return on investment, during the pre-COVID and post-COVID periods.
 Identify any shifts in business strategies or operational efficiencies adopted by
Thomas Cook (India) Ltd. in response to the COVID-19 crisis.
 Provide insights into the resilience and adaptability of Thomas Cook (India) Ltd.'s
financial structure in the face of unexpected external disruptions like the COVID-19
pandemic.

21
1.6 NEEDS:
1. Understand the financial health and stability of Thomas Cook (India) Ltd. amidst the
COVID-19 pandemic, which severely impacted the travel and tourism industry.

2. Gain insights into the company's ability to navigate through the challenges posed by the
pandemic and its resilience in maintaining financial viability.

3. Assess the effectiveness of Thomas Cook (India) Ltd.'s strategies and management
decisions in mitigating the adverse effects of the COVID-19 crisis on its financial
performance.

4. Provide stakeholders, including investors, analysts, and policymakers, with valuable

information to make informed decisions regarding their involvement with Thomas Cook
(India) Ltd.

5. Enhance understanding of the broader implications of the pandemic on the financial

landscape of the travel and tourism sector in India, contributing to industry knowledge and
future preparedness.

SCOPE:
1. Conduct a comprehensive analysis of the financial statements of Thomas Cook (India) Ltd.
for the pre-COVID period, focusing on key financial metrics such as revenue, profitability,
liquidity, and solvency.

2. Extend the analysis to cover the post-COVID period, examining the impact of the
pandemic on the company's financial performance and identifying any significant changes or
trends.

3. Compare the financial performance indicators between the pre-COVID and post-COVID
periods to assess the extent of the impact of the pandemic on Thomas Cook (India) Ltd.

4. Investigate the strategies implemented by Thomas Cook (India) Ltd. to mitigate the
adverse effects of the COVID-19 crisis on its financial position, including cost-cutting
measures, revenue diversification, and liquidity management.

22
5. Explore the implications of the findings for stakeholders such as investors, creditors,
management, and regulatory authorities, providing insights into the company's resilience and
adaptability in response to external disruptions like the COVID-19 pandemic.

1.7 LIMITATIONS:

1. Availability and reliability of data: The study's accuracy may be influenced by the
availability and reliability of financial data, especially for the post-COVID period, which
might not be fully disclosed or may be subject to estimation due to the on-going nature of the
pandemic.

2. External factors: The analysis may be limited by external factors beyond the company's
control, such as changes in government policies, economic conditions, and global travel
restrictions, which could affect the comparability of financial data between the pre-COVID
and post-COVID periods.

3. Time frame: The study's time frame may not capture the full extent of the impact of the
COVID-19 pandemic on Thomas Cook (India) Ltd.'s financial performance, as the situation
continues to evolve, and the long-term effects may not be fully realized within the study
period.

4. Industry-specific challenges: The study may not account for industry-specific challenges
faced by the travel and tourism sector, such as seasonality, competition, and regulatory
changes, which could influence Thomas Cook (India) Ltd.'s financial performance
independently of the pandemic.

5. Methodological limitations: The analysis may be constrained by the chosen methodology

and financial analysis techniques, which may not fully capture the complexity of Thomas
Cook (India) Ltd.'s operations and financial position, leading to potential biases or oversights
in the findings.

23
1.8 CHAPTER SCHEME

Chapter – 1: This chapter is the introduction to the company and the research study. In this
chapter, we have discussed the industry profile and Company profile along with the
Objectives, Scope, Significance and Limitations of the study.

Chapter – 2: To give readers a thorough grasp of the state of the art, knowledge gaps, and
new perspectives in the field, the review of literature in this study includes a thorough
examination of academic papers, prior research, and other pertinent material.

Chapter – 3: To effectively address the research questions, the research methodology section
of this study outline the systematic approach, techniques, and procedures used to collect,
analyse, and interpret data. These procedures include quantitative surveys, qualitative
interviews, experimental designs, and statistical analyses.

Chapter – 4: To extract significant patterns, trends, and insights to address the research
objectives and add to the body of knowledge in the field, the data analysis and interpretation
phase of this study entails the careful examination, organization, and synthesis of the
collected data using statistical techniques, thematic coding, and theoretical frameworks.

Chapter – 5: The study's conclusions, recommendations, and findings provide a thorough

synthesis of the data that was analysed. They offer fresh perspectives, useful advice, and
implications for further research, furthering the field's understanding and directing future
interventions and policy implementations considering the study's findings.

24
CHAPTER – 2
REVIEW OF LITERATURE

25
1. Logue (1995) and Howe (1999) argue that operating exposure cannot be effectively
managed using financial hedges. Instead, they suggest that long-term strategy
adjustments (i.e., operational hedges) are the most effective way of managing long-
run operating exposure.
2. According to Copeland and Joshi (1996), foreign exchange risk management
programs may cause more harm than good. Their study of nearly two hundred large
companies has yielded enough evidence to cast serious doubt about the economic
benefits of foreign exchange hedging programs. Given scarce management time and
the substantial amount of capital currently devoted to hedging, it is clear that many
programs diminish value instead of creating it. Hedging theories assume a static world
in which all factors apart from foreign exchange rates stay exactly the same. In
addition, the relationships between these factors are shifting constantly. Hard enough
to understand in hindsight, they are virtually impossible to predict in advance.
3. Fok et al. (1997) have reported that although the primary purpose of hedging is to
reduce earnings volatility, it may also increase firm value. Their study shows that
hedging reduces the probability of financial distress, the agency costs of debt, and the
costs of equity. In addition, they suggested that corporate ownership structure might
affect the desirability of hedging. They also found that large firms had a stronger
tendency to hedge, firms with a larger percentage of value derived from growth
opportunities were more likely to hedge, and convertible debt served as a substitute
for corporate hedging.
4. The Foreign Exchange exposure of 171 Japanese multinationals was examined by He
and Ng (1998). They documented that 25 per cent of the firms‟ experienced
significant Foreign Exchange exposure. The extent to which a firm was exposed to
Foreign Exchange risk was linked to the firms export ratio. He and Ng also examined
the relationship between Foreign Exchange Exposure and variables that were assumed
to reflect derivatives usage. The results 47 showed that firms that were predicted to
hedge had lower Foreign Exchange exposure, on average, than comparable sample
firms.
5. Ammon (1998) discussed two competing approaches to corporate hedging: equity
value maximizing strategies and strategies determined by managerial risk aversion.
The first category suggested that the managers acted in the best interest of
shareholders. The second category considered that managers maximized their
personal utility rather than the market value of equity. He concluded that the total

26
 benefits of hedging were not the sum total across the various motives. Therefore, a
manager has to concentrate on a primary motive to implement an effective risk
management program.
6. Bodnar and Gebhardt (1998) carried out a comparative study of the responses to the
survey of derivative usage between the US and German nonfinancial firms. Their
study shows that German firms are more likely to use derivatives than US firms.
Apart from this higher overall usage, the general pattern of usage across industry and
size groupings is comparable across the two countries. In both countries, foreign
currency derivative usage is most common, followed closely by interest rate
derivatives, with commodity derivatives a distant third. In contrast to the similarities,
firms in the two countries differ notably on issues such as the primary goal of
hedging, their choice of instruments, and the influence of their market view when
taking derivative positions. These differences appear to be driven by the greater
importance of financial accounting statements in Germany than the US and stricter
German corporate policies of control over derivative activities within the firm.
7. Nydahl (1999) investigated 47 Swedish firms‟ Foreign Exchange exposures. The
evidence showed that exposure increased with the fraction of sales classified as
foreign. Further, using survey evidence on firms‟ hedging of foreign assets, Nydahl
examined the association between 48 translation exposure hedging and Foreign
Exchange exposure. The results indicate that translation hedging reduced the sample
firms‟ Foreign Exchange exposure.
8. Marshall (2000) empirically shows, furthermore, that contrary to the general view
found in the literature derivatives use doesn‟t always decrease the variability of the
firms value and that the degree of usage of certain techniques is even associated with
an increase in the variability of certain financial measures.
9. Wong (2000) investigated the Foreign Exchange exposure of manufacturing firms in
the U.S. to test for an association between Foreign Exchange exposure and derivative
disclosures required. He documented weak associations between derivative
disclosures and Foreign Exchange exposure and suggested that this can be due to
inability in controlling for firms inherent exposures and shortcomings of the
accounting disclosures.
10. The survey study of Yadav and Jain (2000) based on 44 corporate firms in India has
shown that the Indian companies involved in international operations are conscious of
the unique risks that arise as a result of doing business abroad. They report that

27
 companies are taking steps to manage political risk, exchange rate risk and interest
rate risk. They observe that companies are covering a good part of their exchange rate
risk and as many as 30 per cent of companies hedge their exposures in totality.
11. Loderer and Pichler (2000) have observed that firms believe that their exposure is
trivial and they fail to understand the importance of assessing their risk profiles.
12. Joseph (2000) has studied the relationship between the use of hedging techniques and
the characteristics of UK multinational enterprises. The study indicates that firms are
not very receptive to the newer and more complex types of derivatives.
13. Oosterhof (2001) has suggested that corporate risk management and hedging are
important activities within financial as well as non-financial corporations. The study
concluded that the major determinant of derivatives‟ use is firm size. The mixed
results indicate that corporate risk managers, willingly or unwillingly, do not behave
in an optimal way.
14. Hentschel and Kothari (2000) identify firms that use derivatives. They compare the
risk exposure of derivative users to that of nonusers. They find economically small
differences in equity return volatility between derivative users and nonusers. They
also find that currency hedging has little effect on the currency exposure of firms'
equity, even though derivatives use ranges from 0.6% to 64.2% of the firm's assets.
15. Allayanis and Ofek (2001) performed an analysis on a sample of S&P 500 non-
financial companies and calculated the companies‟ exchange-rate exposure. They also
tried isolating the impact of use of foreign currency derivatives (widely used for
purpose of foreign exchange risk management) on firms‟ foreign exchange exposures.
The results of their study found a significant association between the absolute value of
the exposures and the (absolute value) of the percentage use of foreign currency
derivatives and prove that the use of derivatives in fact reduce exposure.
16. Belk (2002) studied the organization of foreign exchange risk management among the
multinational corporations in the UK, the US and Germany. He concluded that
companies were generally risk-averse and the goals of currency risk management
were not clearly formulated.
17. Jesswein et al, (1995) in their study on use of derivatives by U.S. corporations,
categorizes foreign exchange risk management products under three generations:
Forward contracts belonging to the First Generation; Futures, Options, Futures-
Options, Warranties and Swaps belonging to the Second Generation; and Range,

28
 Compound Options, Synthetic Products and Foreign Exchange Agreements belong to
the Third Generation.
18. The findings of the Study 50 showed that the use of the third-generation products was
generally less than that of the second generation products, which was, in turn, less
than the use of the first-generation products. The use of these risk management
products was generally not significantly related to the size of the company, but was
significantly related to the company's degree of international involvement.
19. Dufey and Giddy (2003) state several reasons why many organizations do not
employ foreign exchange risk management techniques, such as lack of awareness
about the importance of foreign exchange risk management, belief that the company
does not need hedging, and the belief that company will be rewarded only when it
takes risk and hence, no requirement for risk management.
20. Bodnar et al. (2003) examined the influence of institutional differences on corporate
risk management practices in the US and the Netherlands. Their study shows that
institutional differences appear to have an important impact on risk management
practices and derivatives use across US firms and Dutch firms.
21. Abor (2005) suggested that foreign exchange risk can be managed by adjusting prices
to reflect changes in import prices resulting from currency fluctuation, and also by
buying and saving foreign currency in advance. The main problems that firms face are
the frequent appreciation of foreign currencies against the local currency and the
difficulty in retaining local customers because of the high prices of imported inputs,
which tend to affect the prices of their final products sold locally.
22. Bengt Pramborg, in his study, “Foreign Exchange Risk Management by Swedish
and Korean Non-Financial Firms: A Comparative Survey”, 2005, makes a comparison
of hedging practices of Swedish and Korean Firms. He suggests that Korean firms are
more concerned about fluctuations in their cash flows whereas Swedish firms focus
on accounting numbers. Derivatives usage is more popular for hedging among
Swedish firms as compared to Korean 51 firms. It may be a result of relative
immaturity of Korean derivative markets. In both of the countries, majority of firms
use a profit-based approach to evaluate any risk management strategy. The study
depicts that the decision to hedge foreign exchange exposure is driven by the level of
exposure and size of a firm.
23. Yazid and Muda (2006) studied the usage pattern of foreign exchange management
strategies in multinational corporations. They found that multinationals are involved

29
 in foreign exchange risk management primarily because they sought to minimize
operational overall cash flows, which are affected by currency volatility. Also, the
majority of multinationals centralizes their risk management activities and at the same
time imposes greater control by frequent reporting on derivative activities. This level
of caution could perhaps be because of huge financial losses related to derivative
trading in the past.
24. Sivakumar and Sarkar (2008) in their paper “Corporate Hedging for Foreign
Exchange Risk in India” evaluate the various alternatives available for Indian
companies to hedge the foreign exchange risks. The paper studies various companies
from various sectors and concludes that currency forwards and currency options are
the most highly preferred hedging techniques used by Indian companies for short term
hedging while swaps are preferred for long term hedging. They also discuss the
various factors that influence the decision of the companies to hedge. Their research
concluded that software companies in India have short term planning horizons when
compared with high capital-intensive organizations. In general, Indian firms choose
short-term measures for hedging. The paper concluded that there is a need for rupee
futures.
25. Dash et al (2008), compared the performance of different FOREX risk management
strategies for short-term foreign exchange cash flows. Their results indicated that, for
outflows, the currency options strategy yielded the highest mean returns in all periods,
irrespective of the movement in the exchange rate; while for inflows, the forwards
strategy yielded the highest 52 mean returns whenever there was a decreasing trend in
the exchange rate, and the cross currency strategy yielded the highest mean returns
whenever there was a cyclic fluctuation in the exchange rate, however, when there
was an increasing trend in the exchange rate, there was no single strategy yielding the
highest mean returns.
26. Chen, (2022)The foreign exchange market, commonly known as Forex or FX, has
demonstrated remarkable growth in recent decades. It serves as a platform for the
exchange of national currencies, whether for trading, commerce, or tourism purposes.
It has earned the distinction of being the world's largest and most liquid financial
market, primarily due to its global accessibility and involvement in international trade
and finance.
27. Kermanshahi, (2022) According to a report by the Bank for International Settlements
in 2013, the daily trading volume in the Forex market averaged a staggering $5

30
 trillion. This substantial trading activity has drawn numerous individuals to the Forex
market, as it is open to any trader who wishes to engage in trading by setting up an
account with a brokerage firm.
28. Hayes, (2021). In the financial markets, "trading" is defined as the process of
acquiring shares in the expectation of profiting from their subsequent sale when their
value appreciates.
29. Tailoren (2021), To put itsimply, trading involves buying an asset at one price and
later selling it at another. This practice adheresto the principles ofsupply and demand,
which plays a crucial role in determining the values of assets. When demand for
shares increases, their prices rise accordingly, and conversely, an increase in supply
leads to price decreases.
30. Floros (2020) conducted an investigation into the price discovery dynamics between
the futures and spot markets in South Africa from 2002 to 2006. His research focused
on the FTSE/JSE top 40 stock index futures and the spot markets. Floros found that
these markets were co-integrated, and the study revealed a robust price discovery
role.In this context, changes in FTSE/JSE top 40 futures prices influenced spot prices
and vice versa.
31. Rosenberg and Traub (2019) undertook a comparative analysis of price discovery
inthe foreign exchange futures and spot markets. They developed a measure based on
foreign exchange futures order flow, serving as a proxy for order flow observed by
Chicago Mercantile Exchange pit traders. Their findings indicated that the futures
market played a more substantial role in price discovery compared to the spot market.
32. Gupta and Belwinder (2018) examined the price discovery mechanism in the NSE
spot and futures market using daily closing values of index futures and PCNX Nifty
from June 2002 to February 2005. Their analysis, utilizing techniques such as
Johansen and VECM, revealed a stronger causal relationship from Nifty futures to
Nifty index, implying the influence of futures on spot prices.
33. Kenourgios (2017) investigated the relationship between price movements in the
FTSE/ASE three-month futures index and the underlying spot market in the Athens
Stock Exchange. This study, conducted using daily data from August 1999 to June
2002, uncovered a bi-directional causality between the stock index spot and futures
markets. The existence of this informational linkage suggested opportunities for
arbitrage and hedging.

31
34. Kavussanos and Nomikos (2016) explored the causal relationship between futures
andspot prices in the freight futures market. Their findings indicated that price
discovery typically initiated in the futures market and then transmitted to the
underlying cash market. Futures prices were also found to incorporate information
more rapidly than spot prices, making them valuable for forecasting spot prices.
35. Lin and Stevenson (2015) employed wavelet analysis to reconstruct data,
distinguishing between spot and futures indices' fundamentally related time series.
This analysis allowed for the identification of lead-lag relationships between the two
price series. The study found that this relationship persisted, particularly when using
more detailed information for price reconstruction, suggesting the importance of
short-term market imperfections in explaining non-contemporaneous relationships
between spot and futures indices.
36. Patnaik and Pauly (2014) developed a short-term model for exchange rates to shed
light on the behaviour of the Indian rupee in foreign exchange markets during the
1990s when India transitioned from a fixed to a floating exchange rate system. In their
model, they found that the real exchange rate could deviate from what's determined
by real interest parity due to factors like risk and intervention. These elements, in
addition to interest rate differentials and expected exchange rate movements,
collectively influenced the exchange rate at any given time. The expected exchange
rate was calculated as a combination of rates derived from predictive behavior and the
equilibrium exchange rate, which was determined using a version of the purchasing
power parity condition.
37. Sarno and Valente (2013) conducted an empirical examination of the dynamic
relationship between spot and futures prices in stock index futures markets. They
employed a class of nonlinear models called regime-switching vector equilibrium
correction models. Utilizing data from the S&P 500 and the FTSE-100 during the
period following the 1987 market crash, their analysis revealed the presence of a long-
term relationship between spot and futures prices.
38. Khuntia et al. (2012) conducted a study that empirically examines the evolving and
time varying efficiency of the Indian foreign exchange market using the framework of
the Adaptive Market Hypothesis (AMH). The primary objectives of this study are to
determine whether market efficiency is static or varies over time and to identify
potential events or factors 26 contributing to such variations. To achieve these
objectives,the study employs a set of robust methods with enhanced statistical power.

32
 Additionally, it adopts a fixed-length rolling window approach to explore the time-
varying nature of market efficiency while mitigating the potential bias associated with
data analysis.
39. Ankita Srivastava (2012) conducted research aimed at exploring the theoretical
aspects of currency futures pricing and examining the scope of existing pricing
models. The study's purpose was to investigate the body of literature concerning
currency futures pricing and gain insights into the empirical methods employed by
various researchers in this context. After a comprehensive review of the literature and
an analysis of futures data from exchanges like the National Stock Exchange, the
study concluded that in developing countries such as India and Athens, market
inefficiencies exist. Consequently, future or forward prices tend to converge with spot
prices at the time of expiry. Empirical evidence also suggests a stable relationship
between the foreign currency spot and futures markets in India, indicating their
interdependency.
40. King and Rime, (2012) The foreign exchange (FX) market is a crucial arena where
the relative values of global currencies are determined. It plays a vital role in
facilitating international trade in goods, services, and financial assets. Furthermore,
the FX marketis often considered an asset class in its own right. This market serves a
diverse range ofusers, including both financial institutions and non-financial entities
worldwide. The interactions and trading activities of these participants, along with
their engagement with market intermediaries, collectively influence the process of
determining exchangerates. This, in turn, has far-reaching effects on virtually all
international economic transactions. Consequently, the FX market stands as the
largest financial market globally, surpassing trading volumes in global equity markets
by a significant margin.
41. Lois Cheirer in (2012), a method and system are proposed that align with the
principles of the current invention. This method and system are designed to offer
foreign exchange risk management advisory solutions to a specific target market.
42. Lavend (2011) For each individual user, the system outlined in this paper generates a
customized exposure model. This model is tailored to match the user's unique risk
management policy. Additionally, the system makes budget and pricing
determinations based on the user's input and external pricing information.
43. Awrex (2011) Furthermore, the system has the capability to calculate an appropriate
measure of risk for each user. It also identifies suitable hedge alternatives in

33
 accordance with economic forecasts. The system can then facilitate the user's request
for a hedge instrument.
44. Reing (2011) the range of hedge instruments that can be analysed and obtained
through this system includes spot contracts, forward contracts, option contracts, and
money market 27 instruments. Additionally, the system offers a comprehensive set of
features related to training, compliance, and sales support.
45. Lois Cheirer's (2010) paper introduces a method and system for delivering foreign
exchange risk management advisory solutions that are highly customizable and
comprehensive. This system takes into account each user's risk management
preferences, provides pricing insights, and offers various hedge instruments while also
addressing training, compliance, and sales- related aspects.
46. Kathy King (2010) the focus is on exploring the dependence structure between the
equity market and the foreign exchange market, utilizing copula models. The study
specifically compares various copulas with different dependence structures to directly
model the underlying relationships between these two financial markets. The findings
reveal the presence of significant symmetric upper and lower tail dependence between
the two markets. This dependence structure remains noteworthy even though it
weakens somewhat after the introduction of the euro. These findings have
considerable implications, particularly for global investment risk management and
international asset pricing, as they take into consideration the concept of joint tail risk.
47. Lerhu (2010) Foreign exchange rate risk, in essence, pertains to unexpected
fluctuations in foreign exchange rates. The significance of effectively managing this
type of risk has amplified in light of the growing global economic and financial
integration. This heightened importance is intricately linked to the increased volume
of global trade, the liberalization of financial markets, and the removal of capital
controls.

The impact of foreign exchange rate exposure on the value of the firm has been the
subject of empirical literature for several decades. In recent times some empirical
literature has also emerged. This study reviews the studies that investigate the exposure to
currency risk of different economies.

34
CHAPTER – 3
RESEARCH METHODOLOGY

35
3.1 METHODOLOGY
The study uses secondary data sources and a qualitative research design. Because it is
systematic and offers a clear direction for gathering data, descriptive research is beneficial.
Following data collection, an empirical analysis is carried out in the form of different graphs,
charts, and tables. The income statements' total revenues are converted from US dollars to
Indian rupees. The companies' respective revenues are split 40:60.
The study's rates, which are calculated at the midpoint, or Rupees 41, are contrasted with the
lowest and highest exchange rates.

3.2 SOURCE OF DATA

The study relies on secondary data that are collected from various resources. The data has
been collected from the financial statement of Thomas Cook. The data has been collected in
line with the objectives of the study. The presentation of study of the IT Company provides
an insight in knowing the foreign exchange risk policies adopted by them. This data has been
collected from the 2018-2019 annual reports of the companies. Conclusions have been drawn
after the detailed study of the risk management policies of the IT Company as to know what
are the most widely used hedging instruments for minimizing foreign exchange risk.
Research papers and journal articles were collected from free internet-based academic search
engines for academic publications and literature like Google Scholar, Science Direct,
Microsoft Academic, RefSeek, EBSCO, and BASE for literature review references.

3.3 RESEARCH DESIGN

The design of qualitative study focused on interpretation includes shaping a problem for the
study, selecting a sample, collecting and analysing data, and writing up the findings.
Qualitative research claims to describe life worlds „from the inside out‟, from the point of
view of the people who participate. By so doing it seeks to contribute to a better
understanding of social realities and to draw attention to processes, meaning patterns and
structural features.

36
The present study incorporated Data Source Triangulation as part of data triangulation
method. Multiple data gathering techniques are frequently used in qualitative studies. The
study incorporated content analysis qualitative research design for making inferences and
findings. Relevant contents are collected from free internet-based academic search engines
for academic publications and literature like Google Scholar, Science Direct, Microsoft
Academic, RefSeek, EBSCO, and BASE.

Tools for Data Analysis: The financial ratios were used for the data analysis which includes
current ratio, quick ratio, absolute liquid ratio, current asset turnover ratio.

37
 CHAPTER – 4
DATA ANALYSIS & INTERPRETATION

38
MEANING OF DATA ANALYSIS
The practice of closely analysing the detailed accounting data provided in the financial
statement is known as analysis. The process of analysing financial statements involves
assessing the relationships between their component elements in order to have a deeper
comprehension of the performance and position of the company.
Financial statement analysis, according to Myer, "is largely a study of trend of these factors
as shown in series of statements and a study of relationship among various financial factors in
business as disclosed by a single set of segments."
Thus, the term "analysis of financial statements" refers to the process of handling the data in
the financial statements in a way that makes it possible to fully diagnose the profitability and
financial standing of the relevant company.

MEANING OF INTERPRETATION OF DATA

Interpretation and analysis are intertwined. Analysis is necessary for interpretation, yet
analysis is useless without interpretation. Therefore, interpretation involves making
deductions and interpreting the true meaning of financial statement numbers. The
interpretation is up to the individual interpreter. For an interpreter to make conclusions based
on data analysis, they need to possess intelligence, experience, and understanding.
Classification helps to organize, condense, and make sense of the statistical data, while
tabulation facilitates analysis and interpretation. The process of organizing the data in a way
that combines them with the study's subject is called analysis. The result of the analysis in the
form of recommendations is called interpretation.

TOOLS USED FOR DATA ANALYSIS

1. Ratio Analysis
2. Trend Analysis
3. Schedule of changes in Working Capital.

39
I RATIO ANALYSIS
The analysis of the financial statements and interpretations of financial results particular
period of operations with the help of ratio' is termed as "ratio analysis." Ratio analysis used to
determine the financial soundness of a business concern. Alexander Wall designed a system
of ratio analysis and presented it in useful form in the year 1909 .The term ratio' refers to the
mathematical relationship between any two inter-related variables. In other words, it
establishes relationship between two items expressed in quantitative form.
According J. Batty, Ratio can be defined as the term accounting in is s and loss account in a
budgetary control system or management."

ADVANTAGES OF RATIO ANALYSIS

Ratio analysis is necessary to establish the relationship between two accounting figures to
highlight the significant information to the management or users who can analyse the
business situation and to monitor their performance in a meaningful way. The following are
the advantages of ratio analysis:
⮚ It facilitates the accounting information to be summarized and simplified in a required
form.
⮚ It highlights the inter-relationship between the facts and figures of various segments of
business.
⮚ Ratio analysis helps to remove all type of wastages and inefficiencies. ⮚ It provides
necessary information to the management to take prompt decision relating to business.
⮚ It helps to the management for effectively discharge its functions such as planning,
organizing, controlling, directing and forecasting
⮚ Ratio analysis reveals profitable and unprofitable activities. Thus, the management is able
to concentrate on unprofitable activities and consider to improve the efficiency.
⮚ Ratio analysis is used as a measuring rod for effective control of performance of business
activities.
⮚ Ratios are an effective means of communication and informing about financial soundness
made by the business concern to the proprietors, investors, creditors and other parties.
⮚ Ratio analysis is an effective tool which is used for measuring the operating results of the
enterprises.
⮚ It facilitates control over the operation as well as resources of the business.

40
⮚ Effective co-operation can be achieved through ratio analysis.
⮚ Ratio analysis provides all assistance to the management to fix responsibilities.
⮚ Ratio analysis helps to determine the performance of liquidity, profitability and solvency
position of the business concern.

LIMITATIONS OF RATIO ANALYSIS

Ratio analysis is one of the important techniques of determining the performance of financial
strength and weakness of a firm. Though ratio analysis is relevant and useful technique for
the business concern, the analysis is based on the information available in the financial
statements. There are some situations, where ratios are misused; it may lead the management
to wrong direction. The ratio analysis suffers from the following limitations:
 Ratio analysis is used on the basis of financial statements. Number of limitations of
financial statements may affect the accuracy or quality of ratio analysis.
 Ratio analysis heavily depends on quantitative facts and figures and it ignores
qualitative data. Therefore, this may limit accuracy.
 Ratio analysis is a poor measure of a firm's performance due to lack of adequate
standards laid for ideal ratios.
 It is not a substitute for analysis of financial statements. It is merely used as a tool for
measuring the performance of business activities.
 Ratio analysis clearly has some latitude for window dressing
 It makes comparison of ratios between companies which is questionable due to
differences in methods of accounting operation
 Ratio analysis does not consider the change in price level, as such, these ratios will
not help in drawing meaningful inferences

41
II TREND ANALYSIS
Trend simply means general tendency; analysis of these general tendencies is called trend
analysis. In the context of financial analysis, trend analysis means analysis means analysing
general tendencies in each item of the financial statement on the basis of the data of the base
year. In short, comparing the past data over a period of time with a base year is called trend
analysis. Under this technique, information for a number of years is taken up and one year
(usually the first year) is taken as the base year. Each item of the base year is taken as 100
and on that basis the percentage for other years is calculated. Trend analysis helps in
understanding the direction in which the organization is moving for other years is calculated.
The trend percentages are generally computed for major items in the statement.
The terms "bull market" and "bear market" describe upward and downward market trends,
respectively, and can be used to describe either the market as a whole or specific sectors and
securities. The terms come from London's Exchange Alley in the early 18th century, where
traders who engaged in naked short selling were called "bear-skin jobbers" because they sold
a bear's skin (the shares) before catching the bear. This was simplified to "bears," while
traders who bought shares on credit were called "bulls." The latter term might have originated
by analogy to bear-baiting and bull-baiting, two animal fighting sports of the time. Thomas
Mortimer recorded both terms in his 1761 book Every Man His Own Broker. He remarked
that bulls who bought in excess of present demand might be seen wandering among brokers'
offices moaning for a buyer, while bears rushed about devouring any shares they could find
to close their short positions. An unrelated folk etymology supposes that the terms refer to a
bear clawing downward to attack and a bull bucking upward with its horns.

OBJECTIVES OF TREND ANALYSIS

 To find the trend or direction of movement over a period of time.
 To make a comprehensive and comparative study of financial statements.
 To have a better understanding of financial and profitability position.

METHODS OF TREND ANALYSIS

1. Trend Percentages
2. Trend Ratios
3. Graphic Method

42
III SCHEDULE OF CHANGES IN WORKING CAPITAL
Schedule of changes in working capital is prepared to show the changes in working capital
between two balancing dates. The change in the amount of any current assets or current
liabilities in the balance sheet as compared to that of the previous balance sheet either result
in increase or decrease in working capital. The information relating to the changes in current
natured accounts between two periods of time presented in the form of a statement is what we
call the schedule/ statement of changes in working capital. Preparing the schedule/statement
of changes in working capital requires us to present the information relating to the current
area of the balance sheets pertaining to the two periods and presenting the changes within
them. Working capital means the excess of current asset over current liabilities. Statement of
changes 63 in working capital is prepared between the two balance sheet days. This statement
is prepared with the help of current assets and current liabilities derived from the two balance
sheets.

Working capital = current assets - current liabilities

 An increase in current assets increases working capital

 An increase in current liabilities decrease working capital
 A decrease in current liabilities increase in working capital.
 A decrease in current assets decreases working capital.

The changes in the amount of any current assets or current liability in the current balance
sheet either results in increase or decrease in working capital. The difference is recorded for
each individual current assets and current liabilities. The total increase of the total decreases
are compared and the difference shows the net increase or net decrease in working capital is
prepared only from current assets and current liabilities and the other information is not only
use for this statement

43
4.1 RATIO ANALYSIS – LIQUIDITY RATIOS

4.1.1 CURRENT RATIO

The current ratio of the firm measures its short term solvency, that its, ability to meet short
term obligations. As measures of short term/current financial liquidity, it indicates the rupee
of current assets available per rupee of current liability, the more is the firm's ability to meet
current obligation and greater is the safety of funds of short term creditors. The current ratio,
in a way, is a measure of margin of safety to creditors. A satisfactory current ratio would
enable 64 a firm to meets its obligation even when the value of the current assets declines. In
inter firm comparisons the firm with the higher ratio has better liquidity.

Although there is no hard and fast rule, a current ratio of 2:1 is considered satisfactory. The
logic underlying is that even with a drop out of 50% in the value of current assets, a firm can
meet its obligations. The current ratio is ratio of the total current assets to current liability. It
is calculated by dividing current assets by current liabilities.

CURRENT RATIO = CURRENT ASSETS/ CURRENT LIABILITY

TABLE 4.1.1 CURRENT RATIO

Source: Secondary Data

44
FIGURE 4.1.1 CURRENT RATIO

INTERPRETATION:

The above table shows the current ratio for the year 2016- 2021. In the year 2017 the current
ratio is 0.53:1. And later on in the consequent years it has increased. The year 2021 is having
current ratio of 0.64:1. It is high when compared with the ratio during the year 2016- 2017.

4.1.2 ABSOLUTE LIQUIDITY RATIO

One effect of the current ratio is that it fails to convey any information on the composition of
the current assets of a firm. A rupee of cash is considered equivalent to rupee of inventories
or receivables. But it is not so. A rupee of cash is more readily available to meet current ratio.
The acid test ratio is measure of a liquidity designed to liquidity to overcome this defect of
the current ratio. It is often referred to as quick ratio because it is measurement of a firms‟
ability to convert its current assets quickly in too cash in order to meet its current liabilities.
Thus, it is a measure of quick or acid or liquidity. The acid test ratio is the ratio is ratio
between quick current asset and current liabilities and is calculated by dividing the quick
assets by the current liabilities. The term quick assets refers to current assets which can be
converted in to cash Current Ratio 2016-2017, 2017-2017, 2018-2019, 2019-2020 & 2020-
2021 immediately or at a short notice without diminution of value. Current assets included in
this category are cash and bank balances, short term marketable securities and debtors/
receivable. Thus the current assets that are excluded are prepaid expenses are prepaid
expenses and inventory. The exclusion of inventory is based on the reasoning that it is not

45
easily and readily convertible in to cash. Prepaid expenses by their very nature are not
available to pay-off current debts. They merely reduce the amount of cash required in one
period because of payment in a prior period.

Generally speaking, an acid test ratio of 1:1 is considered satisfactory as a firm can easily
meet all current claims. The test ratio provides a check on liquidity position of firm as shown
by its current ratio. The quick ratio is a more rigorous and penetrating test of the liquidity
positions of a firm. Yet it is not a conclusive test. Both the current and quick ratios should be
considered in relation to the industry average to infer whether the firm's short term financial
position is satisfactory or not.

Quick Ratio = Quick Assets (Liquid Assets)/ Current Liabilities

Quick Assets= Current Assets- (Prepaid expense + Inventory)

Quick Liability= Current Liability- Bank Overdraft

ABSOLUTE LIQUIDITY RATIO= ABSLOUTE LIQUID ASSETS/ CURRENT

LIABILITY

ABSOLUTE LIQUID ASSETS = CASH AND BANK

TABLE 4.1.2: ABSOLUTE LIQUIDITY RATIO

Source: Secondary Data

46
FIGURE 4.1.2: ABSOLUTE LIQUIDITY RATIO

Source: Secondary Data

INTERPRETATION

The above figure shows the absolute liquidity ratio of Thomas Cook from 2016 to 2021.
During the year 2016- 2017, the absolute liquidity ratio is very low. It is only 0.005:1. The
accurate ratio is 1:1. The above figure indicates that the company does not have a sound
absolute liquidity ratio. But when compared with the year 2017, the ratio is higher for other
years. From 2018 – 2021 the company is having same ratio i.e. 0.04:1

TURNOVER RATIOS

4.1.3 WORKING CAPITAL TURNOVER RATIO

It measures how well a company is utilized its working capital to support given level of sales.
Working capital is the difference between the current assets and current liabilities.

WORKING CAPITAL TURNOVER RATIO= NET SALES/NET WORKING

CAPITAL

NET WORKING CAPITAL= CURRENT ASSETS-CURRENT LIABILITIES

47
TABLE 4.1.3 WORKING CAPITAL TURNOVER RATIO

Source: Secondary Data

FIGURE 4.1.3 WORKING CAPITAL TURNOVER RATIO

48
INTERPRETATION:

The above figure shows the working capital turnover ratio from 2016 to 2021.
In all the years the company is having a good working capital turnover ratio.
The working capital turnover ratio is higher during the year 2018-2019 that is
10.44 times and the ratio is lowest during 2016- 2017 that is 5.60 times. In
2019-2020 the ratio was 10.35 and in 2020-2021 it reduced to 7.14. But still it
indicates the company is having a sound position.

4.1.4 DEBTORS TURNOVER RATIO

Debtor's Turnover Ratio is also termed as Receivable Turnover Ratio or

Debtor's Velocity. Receivables and Debtors represent the uncollected portion of
credit sales. Debtor's Velocity indicates the number of times the receivables are
turned over in business during a particular period. In other words, it represents
how quickly the debtors are converted into cash. It is used to measure the
liquidity position of a concern. This ratio establishes the relationship between
receivables and sales. Two kinds of ratios can be used to judge a firm's liquidity
position on the basis of efficiency of credit collection and credit policy. They
are;

1. Debtor‟s Turnover Ratio

2. Debt Collection Period. These may be calculated as follows

DEBTOR'S TURNOVER RATIO =NET CREDIT SALES/AVERAGE

RECEIVABLE

NET CREDIT SALES = TOTAL SALES - (CASH SALES + SALES

RETURN)

AVERAGE RECEIVABLES = SUNDRY DEBTORS+ BILLS

RECEIVABLES

49
TABLE 4.1.4 DEBTORS TURNOVER RATIO

Source: Secondary Data

FIGURE 4.1.4: DEBTORS TURNOVER RATIO

50
INTERPRETATION

The above figure shows the debtors turnover ratio from 2016 to 2021. During 2016- 2017 the
debtor‟s turnover ratio is 18.07 times which is comparatively less than the ratio during
2021.Debtors turnover ratio shows the efficiency of management of debtors and less liquid
debtors. 2019-2020 is having the lowest ratio 16.96 times and later in 2020-2021 the ratio has
increased to 20.02 times which is good for the company.

4.1.5 CREDITORS TURNOVER RATIO

Turnover Ratio is also called as Payable Turnover Ratio or companies as Creditors to

Accounts Payable. The Term Accounts Payable or Trade Creditors include sundry creditors
and bills payable. This ratio establishes the relationship between the net credit purchases and
the average trade creditors Creditor's velocity ratio indicates the number of times with which
the payment is made to the supplier in respect of credit purchases. Two kinds of ratios can be
used for measuring the efficiency of payable of a business concern relating to credit
purchases. They are:

(1) Creditor's Turnover Ratio

(2) Creditor's Payment Period or Average Payment Period. The ratios can be calculated by
the following formulas:

CREDITORS TURNOVER RATIO = NET CREDIT PURCHASES/ AVERAGE

ACCOUNTS PAYABLE

NET CREDIT PURCHASES = TOTAL PURCHASES - CASH PURCHASES

AVERAGE ACCOUNTS PAYABLE= SUNDRY CREDITORS + BILLS PAYABLE

51
TABLE 4.1.5 CREDITORS TURNOVER RATIO

Source: Secondary Data

FIGURE 4.1.5 CREDITORS TURNOVER RATIO

52
INTERPRETATION

The above figure shows the creditor turnover ratio from 2016-2021. The creditor turnover
ratio is high during 2016-2017 i.e. 8.60 times and is very low during 2020-2021 i.e. 2.95
times. From 2018-2020 the ratio is showing almost a stable trend but is less when compared
with the ratio during 2016-2017.

4.1.6 INVENTORY TURNOVER RATIO

The Inventory Turnover and Days' Inventory Ratios measure the firm's
management of its Inventory. In general, a higher Inventory Turnover Ratio is
indicative of better performance since this indicates that the firm's inventories
are being sold more quickly. However, if the ratio is too high then the firm may
be losing sales to competitors due to inventory shortages. The Inventory
Turnover Ratio is calculated by dividing Cost of Goods Sold by Inventory.
When comparing one firms Inventory Turnover ratio with that of another firm it
is important to consider the inventory valuation method used by the firms. Some
firms use a FIFO (first-in-first-out) method; others use a LIFO (last-in-first- out)
method, while still others use a weighted average method.

INVENTORY TURNOVER RATIO = COST OF GOODS SOLD /

AVERAGE INVENTORY

53
TABLE 4.1.6 INVENTORY TURNOVER RATIO

Source: Secondary data

FIGURE 4.1.6 INVENTORY TURNOVER RATIO

54
INTERPRETATION:
The above figure shows the inventory turnover ratio of Thomas Cook from 2016-2021. The
ratio indicates the velocity with which the creditors are turned 7.19times over in relation to
purchase. From the above table we can find out there is an irregular fluctuation in the
creditor‟s velocity. The year 2019-2020 shows the highest ratio of 8.56 times and is reduced
to 8.02 in 2020-2021. In 2016-2017 the ratio is at the lowest 7.19. Higher the creditor‟s
velocity betters the favourable conditions.

4.1.7 FIXED ASSETS TURNOVER RATIO

Fixed Asset Turnover (FAT) is an efficiency ratio that indicates how well or efficiently a
business uses fixed assets to generate sales. This ratio divides net sales by net fixed assets,
calculated over an annual period. The net fixed assets include the amount of property, plant,
and equipment, less the accumulated depreciation. Generally, a higher fixed asset ratio
implies more effective utilization of investments in fixed assets to generate revenue. This
ratio is often analysed alongside leverage and profitability ratios. The fixed asset turnover
ratio (FAT) is, in general, used by analysts to measure operating performance.
FIXED ASSETS TURNOVER RATIO = NET SALES/ FIXED ASSETS.

TABLE 4.1.7 FIXED ASSETS TURNOVER RATIO

55
FIGURE 4.1.7 FIXED ASSETS TURNOVER RATIO

INTERPRETATION:
The above table represents fixed asset turnover for a period of 2016-2021. Highest ratio was
in 2018-2019 that is 5.09 and lowest ratio was in 2016-17 that is 4.49. An asset turnover ratio
of 2.5 or more could be considered good. So the company is having overall good fixed asset
turnover ratio.

4.2 TREND ANALYSIS

The trend analysis for working capital, current assets and current liabilities is calculated by
using the following formula.
Trend Value = 100x Corresponding year Value/Base Year Value

56
FIGURE 4.2.1 TREND ANALYSIS OF WORKING CAPITAL

TABLE 4.2.1 TREND ANALYSIS OF WORKING CAPITAL

INTERPRETATION:
The above table shows the trend analysis of working capital from 2016- 2021. Trend analysis
shows a fluctuating trend. The graph falls from 2017-18 till 2019-2020. From 2020 onwards
the graph starts to rise which is actually good for the company and it means that the firm is
having a positive sign of growth.

57
TABLE 4.2.2 TREND ANALYSIS OF CURRENT ASSETS

FIGURE 4.2.2 TREND ANALYSIS OF CURRENT ASSETS

INTERPRETATION:

The above graph shows the trend analysis of current assets from 2016- 2021. The trend
analysis shows a fluctuating trend. In 2017- 2018 the trend starts to rise and is highest during
2018- 2019. Then during 2019-2020 the trend falls. But later in 2020- 2021 the graph rises. It
shows that the company is having highly fluctuating trend of current assets.

58
TABLE 4.2.3 TREND ANALYSIS OF CURRENT LIABILITIES

FIGURE 4.2.3 TREND ANALYSIS OF CURRENT LIABILITIES

59
INTERPRETATION:

The above figure shows the trend analysis of current liabilities from 2016- 2021. The graph is
highly fluctuating. In 2017-18 the graph falls and in 2018-2019 the graph rises. But later in
2019-2020 the graph again falls. In 2020-2021 the graph rises. It means that the current
liabilities of the company are highly fluctuating and the company is able to meet their
operating expenses.

4.3 SCHEDULE OF CHANGES IN WORKING CAPITAL

4.3.1 STATEMENT OF SCHEDULE OF CHANGES IN WORKING

CAPITAL

During the year 2016 – 2017

60
4.3.2 STATEMENT OF SCHEDULE OF CHANGES IN WORKING
CAPITAL

During the year 2017 – 2018

61
4.3.3 STATEMENT OF SCHEDULE OF CHANGES IN WORKING
CAPITAL

During the year 2018 – 2019

62
4.3.4 STATEMENT OF SCHEDULE OF CHANGES IN WORKING
CAPITAL

During the year 2019 – 2020

63
4.3.5 STATEMENT OF SCHEDULE OF CHANGES IN WORKING
CAPITAL

During the year 2020 – 2021

64
The rupee-dollar Exchange rates since 1966

The rupee-dollar equation saw a 10x increase in the value of the dollar, but this was over 52
years, which means the average depreciation was a nice 5% a year (so far).

Indian currency began to be measured against the US dollar in 1947 after India gained its
independence. The value of 1 INR then could be taken as 1 USD, considering that the
national balance sheet was free from any credit or debit. However, the value of Indian
currency was derived from the British pound, which then was 1 £ equal to 13 INR. And
owing to the absence of a standard form of currency comparison until 1944, this valuation of
INR against the British pound remained dominant.

The value of 1 INR in 1947 was 4.76 (if a direct comparison is not made). This value
continued till 1966. But the Indian economy started witnessing a downfall starting from the
1950s. This was on account of the country‟s credit from the international market. The
situation was worsened by the 1962 war of India and China, followed by the 1965 war of
India and Pakistan, and the drought that had hit the nation in 1966. All these turned the
exchange rate of 1 Dollar to INR 7.50 by the year 1967. India‟s economy was going through
a tough time in the 1990s. 14 Interest payment accounted for 39% of the revenue that the
government collected at the time. Fiscal deficit was reduced to 7.8% of GDP, and India was
on the verge of being declared a defaulter in the international market.

65
This crisis called for a devaluation of the Indian currency. Devaluation is a process where
countries reduce the value of their currency in the international market while keeping their
internal value intact. India took a similar approach to make its export market cheaper and its
import market costlier.

The devaluation turned the exchange rate of 1 USD to 25.92 INR in the year 1992. The
Indian currency value began falling since then, with a current rate of 74.57 INR. Dollar price
in 2004 was 45.32 INR, and in the next ten years, it rose to 62.33. In 2016, February was the
month to witness Dollar to INR highest rate ever, amounting to 68.80 INR. The value of INR
is largely related to crude oil prices. As oil price increases, the value of Indian currency also
decreases, and vice versa. The withdrawal of foreign investors from the Indian market is
another contributing factor. Government debts can cause investors to lose interest in the
country‟s market, resulting in inflation. Factors like these may combine with several others to
cause further depreciation of the INR in the future.

66
 CHAPTER – 5
FINDINGS, SUGGESTIONS AND
CONCLUSION

67
5.1. Findings

 Thomas Cook Ltd has a strong base in meeting the identical financial ratio as well as
it has increased its profit from the past years.
 The company employees‟ forex fund instead of domestic fund and WC facilities. •
The sales position is very good at Thomas Cook.
 The excellent performance has contributed to good financial position and profitability
in the market.
 The current ratio of Thomas Cook indicates sound solvency position.
 The absolute liquidity ratio indicates the liquidity position is not satisfactory, and is
less likely to face financial hardships.
 The working capital turnover ratio shows a sound financial position.
 The debtor‟s velocity keeps on fluctuating from year to year.
 The creditor‟s turnover is rapidly decreasing.
 The schedule of changes in working capital shows that the capital need of Thomas
Cook have a decreasing trend.
 The working capital turnover measures the effectiveness of business at generating
sales for all rupees of working capital put to use.
 The inventory turnover ratio is satisfactory which tells that the company sell and
restock its inventory every 1 to 2 months.
 A bigger profit margin is always preferred because it indicates that the business
makes more money from its sales.
 Exchange rates fluctuate frequently due to supply and demand. The perceived value
of possessing a currency, either to pay for goods and services or as an investment,
determines whether it is more in demand than another.
 An effective hedging strategy lowers risk and earnings volatility and raises valuation.
 The trend analysis of working capital, current assets and current liabilities is highly
fluctuating and it indicates that the company is liquid and is in sound position.

68
5.2 SUGGESTIONS

 Assure thorough data collection for the pre-COVID and post-COVID periods from
reputable sources, such as annual reports, financial statements, and industry reports.
 Evaluate Thomas Cook (India) Ltd.'s financial performance using a variety of sound
financial analysis approaches, including trend analysis, comparison analysis, and ratio
analysis.
 Benchmark the company's performance and pinpoint its areas of strength and
weakness by conducting a comparison analysis with industry peers.
 Provide qualitative context to the quantitative examination of Thomas Cook (India)
Ltd.'s management tactics during the COVID-19 pandemic.
 To monitor the company's financial performance over time and gain insight into its
prospects for the future, think about performing a longitudinal analysis.
 Effectively convey the results to stakeholders through succinct and understandable
reports, and interact with them to support well-informed decision-making based on
the study's findings.

5.3 RECOMMENDATIONS
A company can adequately manage its foreign exchange risk by proper planning,
implementing, and employing different hedging techniques. This would require the below
usual steps:
1. The company must thoroughly analyse the operating cycle to identify where FX risk
exists.
2. Then it needs to do a proper calculation to analyse the exposure to the foreign
exchange risk.
3. Different techniques for hedging the FX risk need to be applied. • It is better to create
a policy for managing the FX risk and follow it.
4. Periodic review and monitoring of the complete process

69
5.4 CONCLUSION
 In the present-day economies are globalized and the stabilities of them is really at
stake, the only rescue for the software companies is to improve their responsiveness
to the changing scenarios.
 Companies have to develop their services to the bench mark level or global standards
so that they can have acceptance all over the world. The troubles of many exporters
are not a result of the volatility of the rupee but the unfavourably high-cost structure.
Exporters are viable only when foreign exchange earnings get converted into more
and more rupees.
 To improve rupee viability and preserve profits, exporters need to be efficient and
productive and bring down aggregate rupee cost.
 Poor viability will not be resolved by hedging. Considering an inefficient exporter, it
requires a breakeven exchange rate of Rs.45 dollar to show profit. It will dazzle at a
rate above Rs.45. It will fizzle at any exchange rate below Rs.45.
 In case of forward contract. The forward contract locks in the exporter conversion of
dollar revenues to rupee revenues at Rs.41, the market forward price per dollar. The
market will surely not buy the exporters dollars at Rs.41 will be wholly ineffective
exporters will be in serious trouble despite the perfect hedge.
 The problem of viability will be solved only when the exporters breakeven moves
down to Rs.41 per dollar. By contrast, an inefficient exporter that is viable at Rs.41
per dollar can take advantage of the hedge.
 The implicit dollar method will significantly preserve the dollar profitability
exporters. The employees and managers of exporting firms will be paid implicitly in
dollars. The cost to the company will be in dollars. But the pay-out will be in rupees
and at the prevailing exchange rates. If the dollar weakens, the dollar costs of
employees and 19 managers will be paid out in rupees at say, RS.39, if the dollar
strengthens the cost of employees and managers will be paid out in rupees at say,
Rs.43.
 To overcome these problems exporters should make good governance by making
available superior human, social and business infrastructure even if the tax rates are
high. Good governance lowers the costs of operations and lowers the aggregate costs
of doing business.

70
BIBLIOGRAPHY

1. Wood, R. C. (1992). "Thomas Cook: A biography". London: Quiller Press.

2. Wilson, O. (2007). "The Making of Thomas Cook: The Rise of the Travel Industry, 1841-
1928". London: Rutledge.
3. Cockerell, M. (2012). "Thomas Cook: 150 Years of Popular Tourism". London: Thomas
Cook Publishing.
4. Smith, A. (2015). "The Thomas Cook Archive: Archives and Special Collections at the
University of Reading". Journal of the Society of Archivists, 36(2), 252-255.
5. Richards, D. (2018). "Thomas Cook: The Man Who Popularised Tourism". New York:
Basic Books.
6. Cook, T. (1872). "Cook's Handbook for Tourists". London: Thomas Cook & Son.
7. McCabe, S. (2020). "Thomas Cook: From Celebrity Cook to Global Travel Agent".
London: Amberley Publishing.
8. Conlin, J. (2014). "The Influence of Thomas Cook and Son on Tourism in the Victorian
Era". Victorian Studies, 57(1), 90-109.
9. Forsyth, A. (2003). "Thomas Cook and the Idea of the Package Tour". Tourism
Management, 24(2), 227-237.
10. Beaman, J. (2009). "Thomas Cook and the Grand Tour". History Today, 59(8), 16-23.

71