TCS FInancial Statement analysis

Major Sources of valuate tax a) Revenue from operations accounts for 98% of the full(a) receipts of the firm and consists of the tax tax incomes from the at a lower place categories Information technology and consultancy services contributes 97% of the organic taxation from operations Sale of equipment and software lilicenses contributes 3% of the number revenue from operations b) different Income accounts for approximately 2% of the total revenue of the firm and consists of the revenues from the beneath study categories engagement Income Contributes to 81. 0% of the total revenue from new(prenominal) income 73% of the have-to doe with income comes from Interest on Bank & Interest on eagle-eyed term Bonds & Debentures. 25% of the Interest income comes from Inter-Corporate deposits. gather from Sale of mutual currency and new(prenominal) current Investments Contributes to 0. 57% of the total revenue from different income Major Expenses a) Employee benefit expen ses consumes 35. 78% of the total operations revenue and consists of the below categories Salaries and incentives accounts for 87. 57% of the total employee benefits expense Contributions to long fund & pension Superannuation/Gratuity etc.Staff public assistance expenses. b)B trading operations and other(a) Expenses consumes 32. 11% of the total operations revenue and consists of the below major categories foreign c equal to(p) expenses accounts for 43. 4 % of the total Operations and other Expenses Services rendered y business associates and others accounts for 18. 42% of the total Operations and other Expenses hardware and material costs Software, accounts for 1 1 the total Operations and other Expenses (c) taxation expenses consume 7. 27% of the total operations revenue (d) Dividend on honor shares and tax thereon for pecuniary 2014 accounts improver by 40% course of study on division (7058. 2 crscoresiscal 2014) Major Uses of funds a) hard currency And Bank sense of equilibriums accounts for 21. 51% of the total Non-Current Investments and Current assets. partnership has increased the gold and Bank balances significantly in pecuniary 2014. Horizontal compend on the poise carpenters plane for dandy and Bank Balances shows a course of study on division exploitation of 113. 34% for financial 2014. b)BPurchase of resolute Assets The connection has been fit outing in infrastructure nurture across various locations in India to spiel its growing business needs. Additions to the gross shove in financial 2014 amounted to 2,284. 7 crscoresHorizontal analysis on the Balance Sheet for quick-frozen assets shows a Year on Year produce of 28. 27% for financial 2014. c)CNon-Current Investments Comp any(prenominal) has increased the Non-Current Investments significantly in mo mesh topologyary 2014. Horizontal analysis on the Balance Sheet for Non-Current Investments shows Year on Year maturement of 134. 97% for fiscal 2014. d)D r ecollective terminal figure Loans & Advances accounts for 10. 85% of the total Non-Current Investments and Current assets. e)E short-run loans and advances accounts for 6. 2% of the total Non-Current read/write head 2 execute a horizontal and vertical analysis on the Balance Sheet and pull in and Loss Account and comment on any significant changes that you observe wholly over the last 2 old age. AnNASPlease refer the connected excel sheet for arriving at the below conclusions a) profit & Loss statement substantial observations on Horizontal analysis. crystalize Profit by and by tax for fiscal 2014 shows a Year on Year crop of 37. 70%. Net Profit After tax nearly doubled when compared with monetary 2012. EPPEPSEarnings per fortune) also show consistent ontogeny in the last few fiscal geezerhood.EPPEPShows a Year on Year increase by 37. 58% in financial 2014 Finance Cost for pecuniary 2014 has change magnitude significantly by 20%. Tax for Fiscal 2014 has increased s ignificantly by 51% Year on Year. Profit & Loss statement of import observations on Vertical analysis. Despite a significant increase in the Employee radical we find that Employee Expenses s a % of revenue remained constant around 35% in the last few Fiscal forms Total Expenses as a % of revenue remained constant around 70% in the last few Fiscal grades Total Tax as dower of revenue, increased from 6. 37% in fiscal 2013 to 7. 2% b) Balance Sheet meaningful observations on Horizontal analysis. Non- Current liabilities shows a Year on Year increment of ofof4. 64% in Fiscal 2014. Fixed assets shows a Year on Year ontogenesis of 28. 27% in Fiscal 2014 Current liabilities shows a Year on Year growth of 34. 33% in Fiscal 2014. Reserves and Surplus shows a Year on Year growth of 27. 76% in Fiscal 2014. Share Capital shows a Year on Year negative growth of 33. 76% in Fiscal 2014. Current assets shows a Year on Year growth of 36. 62% in Fiscal 2014. Long Term borrowings shows a Year on Year negative growth of 2. 4% in Fiscal 2014. Balance Sheet Significant observations on Vertical analysis. Cash and believe balances as a % of the total Assets excluding flash-frozen assets increased from 12. 97% Fiscal 2013 to 21. 51% Fiscal 2014. Non-Current Investments as a % of the total Assets excluding fixed assets has been increasing steady in the last few Fiscals. Short-term loans and advances as a % of the total Assets excluding fixed assets eccreasedrom 10. 81% in Fiscal 2013 to 6. 42% in Fiscal 2014. Goodwill as a % of the total Assets excluding fixed assets decreased from 6. 86% in Fiscal 2013 to 3. 7% Fiscal 2014. Question 3 inspect the Notes to Accounts and Statement on Significant account Policies and check for any deviations in method of accounting policy over the last division with heed to major items. AnNASThere were no deviations with respect to significant accounting policies. However TCTTSdopted a new hedge accounting precept under the below category. a)AForeign currency forward, alternative and futures contracts TCTTSnters into foreign currency forward, option and futures contracts to deal out its exposure to exchange rate fluctuations, in accordance with its insecurity management policies.With pitch from January 1, 2014, the Company has adopted hedge accounting principles in line with International monetary Reporting Standard 9 (referred to as IFFIRS), which align more closely with the Companys risk management policy. The change has resulted in a reduction of 4. 76 crscoresn profit in the lead tax in fiscal 2014. Question 4 Examine the Statement of Cash Flows for the last 2 years and stratum out the following ) Major sources and Uses of hard currency Sources -Operations Cash generated from operations, post adjustments to profit onwards tax, has gone up from 16,436. 77 crscoresn fiscal 2013 to 21,795. 4 crscoresn fiscal 2014, registering a growth of 32. 60% over the previous fiscal. -Income from Interest InInterestn f unds invested went up by 71. 22%, from 798. 80 crscoresn fiscal 2013 to 1367. 72 Uses crscoresn fiscal 2014. During fiscal 2014, the significant uses of bills were scholarship of French Company AlAlit. A. foFor52. 41 crscores stick outment of Dividend & dividend tax for 5,489. 54 CrScoresurchase of fixed assets Increase in inter-corporate deposits Investment in fixed deposit. Pay Taxes amounting to 7,043. 63 CrScoresover work Capital expenditures (b) Were the coin menstruums from operations greater than or less(prenominal) than net income?Explain in expand the major reason for the differences in these 2 figures. For Fiscal 2014, by referring to the unify financial statements we get the below fgfiguresNet Cash provided by from run activities = 14751. 41 CrScoreset Profit for the year = 19163. 87 crscoresnNASNet Cash provided by from operational activities is less the net income. Explanation Working Capital fgfiguresnder the categories below are the major reasons for reducing the Net Cash take account provided by from operating activities below the net income. ) Unbilled Revenue (811. 60) CrScores) Trade Receivables (4015. 80) CrScoresc) Was the firm able to generate enough hard currency from its operations to be able to pay for all its capital expenditures? For Fiscal 2014, by referring to the Consolidated financial statements we can arrive at the below table. Net Cash provided by/Used in Fiscal 2014 Fiscal 2013 Operating activities 14,751. 41 11,614. 96 drop activities (9,667. 08) (6,085. 66) Financing activities 5,673. 24) (5,729. 48) Exchange difference on translation of foreign currency 21 5. 41 48. 5 Net (decrease)/increase in cash and cash equivalents after translation (373. 50) (152. 13) Purchase of fixed assets accounted for (3126. 15) CrScoresf the Net Cash of (9,667. 08) crscoressed in place activities. From the supra table we can distinctly gain that the club generated enough cash from Operating activities to fund the capital expend itures on its own. (d) Did the cash flow from operations cover twain the capital expenditures and payment of dividend, if any? AnNASDividend paying(a) accounted for (5480. 7) CrScoresf the Net Cash of (5673. 24) crscoressed in backing activities.From the above table we can clearly infer that the company generated enough cash from Operating activities to fund both capital expenditures & payment of dividends on its own. (e) How did your firm invest its surfeit cash (if any)? Cash flow statement from Investing Activities indicate that the excess cash that remains after investing and financing is mamajoraintained in Short-term bank deposits. From the Cash Flow Statements we can look on that Short Term deposits increased from 4911. 46 crscoresn Fiscal 2013 to 12948. 9 CrScoresn Fiscal 2014. This accounts for a significant growth of 163%. g)GAre there any other unusual / extraordinary items of cash inflow / outflow? AnNASCash outflow ascribable to Taxes Cash Flow Statements indicate a significant increase in Taxes for Tax for Fiscal 2014. Taxes have increased significantly by 46% Year on Year. By referring to Management Discussion & psychoanalysis & Notes forming consolidated statements we can infer that company has paid (1) Additional tax of 2,129. 82 crscoresaid by TCTTStd on its higher income for the year and (2) 92. 00 crscoresf higher tax on dividend standard y TCTTStd from its overseas subsidiaries.