Tcs Full PJ 2023

“A STUDY ON FINANCIAL PERFORMANCE OF TCS LTD”
A Project Report submitted to Srimad Andavan Arts & Science College (Autonomous),
Affiliated to BHARATHIDASAN UNIVERSITY in partial
fulfillment of the requirement for the award of the Degree of
BACHELOR OF COMMERCE
Submitted By
M.MURGANANDHAM (U20CO0202)
U.NANTHAKUMAR (U20CO0211)
T.PRASANTH (U20CO0248)
C.RAGUL (U20CO0263)
N.RAGUL (U20CO0264)
S. RAJAMANICKAM (U20CO0267)
K.RAMKUMAR (U20CO0272)
Under the Guidance of
Ms.B.Pushya M.Com, M.Phil Assistant professor.
PG & RESEARCH DEPARTMENT OF COMMERCE

Srimad Andavan Arts & Science College (Autonomous)
(Affiliated to Bharathidasan University)
Nationally Re -accredited With ‘A’ Grade by NAAC
An ISO 9001:2015 Certified Institution
No 7, Nelson Road, Tiruvanaikoil,
Tiruchirappalli - 620 005
APRIL - 2023
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Srimad Andavan Arts & Science College (Autonomous)
(Affiliated to Bharathidasan University)
Nationally Re -accredited With ‘A’ Grade by NAAC
An ISO 9001:2015 Certified Institution
No 7, Nelson Road, Tiruvanaikoil,
Tiruchirappalli - 620 005.
________________________________________________________
Ms.B.Pushya
Assistant Professor Department of Commerce
CERTIFICATE
This is to certify that the Project Report appellation entitled “A STUDY ON FINANCIAL
PERFORMANCE ANALYSIS OF TCS LTD” submitted to Srimad Andavan Arts &
Science College (Autonomous), Tiruchirappalli, Affiliated to Bharathidasan University,
Tiruchirappalli in partial fulfillment of the requirement for the award of the degree of
Bachelor of Commerce for the academic Year 2020-2023, is a bonafide record of the
project work done by N.RAGUL(U20CO0264)
,S.RAJAMANIKAM(U20CO0267),C.RAGUL(U20CO0263),K.RAMKUMAR
(U20CO0272),M.MURUGANANDHAM(U20CO0202),T.PRASANTH(U20CO0248 )
under my guidance and supervision. The dissertation has not previously formed the basis
for the award of any degree or fellowship to the candidate.
Comments:
________________________________________________________________
SIGNATURE OF THE GUIDE SIGNATURE OF THE HOD
SIGNATURE OF THE EXAMINER
Date:
2
DECLARATION
We declare that the project work entitled “A STUDY ON FINANCIAL

PERFORMANCE ANALYSIS OF TCS LTD” submitted to, Srimad Andavan Arts and
Science College (Autonomous), Tiruchirappalli affiliated to Bharathidasan University,
Tiruchirappalli in partial fulfillment of the requirement for the award of the degree of
Bachelor of Commerce for the academic year 2020-2023, is the result of the original work
carried out by us under the guidance and supervision of Ms.B.Pushya (M.Com, M.Phil
Assistant Professor) Department of Commerce, Srimad Andavan Arts and Science
College (Autonomous), Tiruchirappalli.
Date :
Place : Tiruchirappalli
Signature of Candidates
M.MURGANANDHAM
U.NANTHAKUMAR
T.PRASANTH
C.RAGUL
N.RAGUL
S. RAJAMANICKAM
K.RAMKUMAR
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ACKNOWLEDGEMENT
We express our sincere and deep sense of gratitude to our Principal Dr. M.
PITCHAIMANI, (M.Com., M.Phil., MBA., SLET., Ph. D(Com), SET(Com&Mgt.)
(ph.DMgt).) Srimad Andavan Arts and Science College, Tiruchirapalli-5 for having
promoted strict discipline and hard work during the period of may study in this college.
We express our sincere and deep sense of gratitude to our Vice-Principal Dr.
SATHYANARAYANAN.(M.B.A.,M.COM., M.A.,(Eco)., M.Sc. (Psy)., M.Phil.,
Ph.D., PGDHE.)Srimad Andavan Arts and Science College, Tiruchirappalli-5 for his
constant encouragement for giving us all the assistance to complete this project.
We take this opportunity to express our deep sense of gratitude and respect to our beloved
guideMs.B.Pushya (M.Com, M.Phil Assistant professor)Department of Commerce,
Srimad Andavan Arts and Science College, Tiruchirappalli-5 for her support to do our
project and without her valuable guidance it is impossible to us to complete this project
report successfully.
We also thank all the Staff Members of our department who help us in various
ways while completing this project work.
Place: Tiruchirapalli Signature of candidates
M.MURGANANDHAM
U.NANTHAKUMAR
T.PRASANTH
C.RAGUL
N.RAGUL
S. RAJAMANICKAM
K.RAMKUMAR
4
TABLES OF CONTENTS
CHAPTER NO. CONTENTS PAGE NO:
LIST OF TABLES
LIST OF FIGURES
CHAPTER 1 INTRODUCTION 8-10
CHAPTER 2 REVIEW OF LITERATURE 11-23
CHAPTER 3 INDUSTRY AND 23-28

COMPANY PROFILE
CHAPTER 4 DATA ANALYSIS AND 28-43

INTERPRETATION
CHAPTER 5 FINDINGS, SUGGESTIONS 44-45

& CONCLUSION
BIBLIOGRAPHY
ANNEXURE
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LIST OF TABLES
TABLE TITLE PAGE NO:

NO:
4.1 Table showing current ratio 29
4.2 Table showing quick ratio 31
4.3 Table showing absolute liquidity ratio 33
4.4 Table showing proprietary ratio 34
4.5 Table showing return on shareholders fund 35
4.6 Table showing return on investment 36
4.7 Table showing net profit ratio 37
4.8 Table showing comparative balance sheet of the 39

financial year 2017 and 2018




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LIST OF CHARTS
FIGURE TITLE PAGE NO:

NO:
4.1 Chart showing current ratio 29
4.2 Chart showing quick ratio 31
4.3 Chart showing absolute liquidity ratio 33
4.4 Chart showing proprietary ratio 34
4.5 Chart showing return on shareholders fund 35
4.6 Chart showing return on investment 36
4.7 Chart showing net profit ratio 37
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1.1 Introduction
Finance is defined as the provision of the money when it is required. Every

enterprise needs finance to start and carry out its operation. Finance is the life blood
of an organization, so finance should be managed effectively. Financial statements
are prepared primarily for decision making. With unlimited wants and limited
financial resources, the finance is concerned with what it is produced, requirement
of funds, allocation of funds, selection of development priorities, determination of
gestation periods, proper monitoring of accounts to avoid cash flow problems and
to ensure the profitability of an enterprise.
The main objective of financial performance analysis is to judge the financial health
and to judge the earning performance of the organization and to provide the
company with appraise for investment opportunity or potentiality.
Financial performance is done to evaluate capability, stability and profitability of

the company. Financial analysis helps investors to appraise whether they should
invest in a particular company or not. The main objective of this research includes
knowing the financial performance of the company. It is analyzed based on
secondary data that is balance sheet and profit and loss account.
Profitability is the primary goal of all business ventures. Without profitability, the
business will not survive in the long run. So meaning current and past profitability
and projecting future profitability is very important. Profitability is measured with
an income statement. This is essentially a listing of income and expense during a
period of time for the entire business. The research mainly aims at measuring the
financial performance and profitability position of the company.
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1.2 Statement of the problem
The statement of the problem is finance based and it aims to analyse the financial
performance of the Tata Consultancy Services Ltd, for the past 5 years. Financial
performance means ensuring the results of a firm’s policies and operations in
monetary terms. Comparative financial analysis provides information to assess the
direction of change in the business at particular date and particular period of time.
The balance sheet indicates the operating and non-operating results for a given
period.
1.3 Objective of the study
• To examine the liquidity position of the company

• To examine the solvency position of the company
• To examine the profitability position of the company
1.4 Research Design
1.4.1 Nature of the study
Study is analytical in nature.
1.4.2 Nature of Data
The data used is secondary in nature.
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1.4.3 Sources of data
Secondary data had been collected from annual report published by the company.
These annual reports had been downloaded from the official website of the
company.
1.4.4 Period of Study
The study on financial performance of Tata Consultancy Services Ltd is confined to

a period of five years from 2017-2018 to 2021-2022. It took 3 weeks to collect the
data and come to a conclusion on the study.
1.5 Sample Design
Sample used in this study is Tata Consultancy Services Ltd. Company is randomly
choosed.
1.6 Tools for analysis
• Ratio analysis
• Comparative Balance sheet
1.7 Chapterization
Chapter 1 Introduction
Chapter 2 Review of Literature
Chapter 3 Industry profile and company profile
Chapter 4 Data analysis and interpretation
Chapter 5 Findings, Suggestions and Conclusion
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2.1 Introduction
This chapter deals with review of literature. This chapter includes conceptual
literature and empirical literature. Conceptual literature includes different concepts
used in the study. Empirical literature includes studies done by different authors.
2.2 Conceptual Literature

2.2.1 Meaning of finance
Business concern needs finance to meet their requirements in the economic world.
Any kind of business activity depends on finance. Hence, it is called as lifeblood of
business organization. Whether the business concerns are small or big, they need
finance to fulfill their business activities. In the modern world, all the activities are
concerned with economic activities and very particular to earning profit through any
venture or activities. The entire business activities are directly related with making
profit. Abusiness concern needs finance to meet all the requirements. Hence finance
may be called as capital, investment, fund etc, but each item is having different
meanings and unique characters. Increasing the profit is the main aim of any kind
of economic activity.
2.2.2 Financial performance
“Financial performance is scientific evaluation of profitability and financial strength

of any business concern” according to Kennedy and Macmillan financial statement
analysis attempt to unveil the meaning and significance of the items composed in
profit and loss account and balance sheet. The assists are the management in the
formation of sound operating and financial policies. According to accounting point
of view financial statements are prepared by a business enterprise at the end of every
financial year. “Financial statements are end products of financial accounting”.
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They are capsulated periodical reports of financial and operating data accumulated
by a firm in its books of accounts-the General Ledger. One of the most fundamental
facts about businesses is that the operating performance of the firm shapes its
financial structure. It is also true that the financial situation of the firm can also
determine its operating performance. The financial statements are therefore
important diagnostic tools for the informed manager.
2.2.3 Financial Efficiency

Financial efficiency is the measure of the organization’s ability to translate its
financial resources into mission related activities. Financial Efficiency is desirablein
all organizations regardless of individual machine or structure. It measures the
intensity with which a business uses its assets to generate gross revenues and the
effectiveness of producing, purchasing, pricing, financing and marketing decisions.
At the micro level, Financial Efficiency refers to the efficiency with which resources
are correctly allocated among competing uses at a point of time. Financial
Efficiency is a measure of how well an organization has managed certain trade-offs
in the use of its financial resources. Financial Efficiency is regarded efficiency and
is a management guide to greater efficiency the extent of profitability, productivity,
liquidity and capital strength can be taken as a final proof of financial efficiency. It
is interesting to note that sometimes even sufficient profits can mark inefficiency
and conversely, a good degree financial efficiency could be dressed with the
absence and profit.
2.2.4 Financial Performance analysis

In short, the firm itself as well as various interested groups such as managers,
shareholders, creditors, tax authorities, and others seeks answers to the following
important questions: (1) what is the financial position of the firm at a given point of
time? (2) How is the financial performance of the firm over a given period of time?
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These questions can be answered with the help of financial analysis of a firm.
Financial analysis involves the use of financial statements. Thus, the term “financial
statements” generally refers to two basic statements: The Balance Sheet shows the
financial position of the firm at a given point of time. The income statement referred
to in India as the profit and loss statement reflects the performance of the firm over
a period of time. However, the financial statements do not reveal all the information
related to the financial operations of a firm. The financial performance analysis
identifies the financial strengths and weaknesses of the firm by properly establishing
relationship between the items of the balance sheet and profit and loss account. The
first task is to select the information relevant to the decisions under consideration
from the total information contained in the financial statements. The second is to
arrange the information in away to highlight significant relationships. The final is
interpretation and drawing of inferences and conclusions. In short, “Financial
Performance analysis is the process of selection, relation, evaluation”.
2.2.5 Ratio Analysis

The term accounting ratios is used to describe significant relationship between
figures shown on balance sheet, in a profit and loss account, in a budgetary control
system or in any, other part of the accounting organization. Ratio simply refers to
one number expressed in terms of another number. Ratio analysis is a technique of
analysis and interpretation of financial statement. It is the process of establishing
and interpreting the various ratios for helping in making certain decision. However,
ratio analysis is not an end to itself. It is only a means of better understanding of
financial strength, weakness of a firm. Calculation of mere accounting ratios does
not serve any purpose unless several appropriate ratios are analyzed and interpreted.
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Objectives of Ratio Analysis
• To study the short term solvency of a firm.
• To study the long term solvency of a firm.
• To determine the profitability of a firm.
• To measure the performance of a firm.
• To facilitate the process of financial forecasting.
• To communicate the strength and weakness of a firm.
• To enable managerial decision making.
2.2.6 Liquidity Ratio

The term liquidity refers to the firm’s ability to meet its current liabilities. Liquidity
ratios are used to measure the liquidity position or short term financial position of a
firm. These ratios are used to assess the short term debt paying ability of a firm,
important liquidity ratios are current ratio and quick ratio.
Current Ratio
Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio is also known as working capital ratio. It is a measure of general
liquidity and is the most widely used to make the analysis of short term financial or
liquidity of a firm. It is calculated by dividing the total current assets by total current
liabilities and the ideal current ratio is 2:1. It is calculated as follows
Current Ratio=Current asset
Current liabilities
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The higher the current ratio, the greater the firm’s ability to meet the short term
debts. A very high current ratio indicates too much of money is blocked in current
assets etc. In short a very high current ratio indicates that the firm will find it difficult
to pay off its debts.
Quick Ratio
The term liquidity ratio refers to the ability of a firm to pay off its short term
obligations as and when they become due. Cash in hand and cash at bank are the
most liquid asset. The other assets included in the liquid assets are bills receivables,
sundry debtors, marketable and short term or temporary investments.
The Ideal liquid or quick ratio is 1:1. The liquid ratio can be calculated as follows
Quick ratio = Liquid assets
Current liabilities
Quick Assets = Current Assets - (stock + prepaid expenses)
Liquid ratio is considered to be superior to current ratio in testing the liquidity

position of a firm. If the current ratio is 2:1 and quick ratio is 1:1; the liquidity
position may be considered satisfactory. If the current ratio is higher than 2:1, but
quick ratio is less than 1:1, it indicates excessive inventory.
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Absolute Liquid Ratio or Cash Ratio
This ratio establishes the relationship between super quick assets and quick
liabilities. And it is taken as a ratio of absolute liquid assets or absolute quick assets
includes cash in hand, cash at bank and marketable securities or short term
investments. It is also known as cash ratio. And ideal absolute liquid ratio is 0.5:1.
Absolute Liquid Ratio = Absolute Liquid Assets
Current Liabilities
2.2.7 Solvency Ratio
Solvency ratio is one of the various ratios used to measure the ability of a company
to meet its long term debts. Solvency ratio is also called leverage ratio. It focuses
on the long term sustainability of a company instead of the current liability
payments.
Proprietary Ratio
Proprietary ratio establishes the relationship between shareholders or proprietors
fund and total assets. This ratio shows how much funds have been contributed by
shareholders in the total assets of the firm. Proprietary ratio is also known as equity
ratio or net worth ratio. It is computed as follows:
Proprietary Ratio = Shareholders fund
Total assets
This ratio shows financial health of the firm. A high ratio indicates safety to the
creditors and low ratio shows greater risk to the creditors. The ideal ratio is 0.5:1or
above.
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2.2.8 Profitability Ratios
The ultimate aim of any business enterprise is to earn maximum profit. To the
management, profit is the measure of efficiency and control. Profitability ratio
measures the ability of the firm to earn an adequate return on sales, total assets and
invested capital. There are two types of profitability ratios. First, profitability based
on sales and it includes gross profit ratio, operating ratio, operating profit ratio and
net profit ratio. Second, profitability ratio based on investment and it includes return
on investment, return on shareholders fund ratio, return on equity ratio and return
on total assets. Profit is important for everyone associated with the company
including creditors and owners.
Return on shareholder’s fund

This is the ratio of net profit to shareholder’s fund or net worth. It measures
the profitability from shareholders point of view. This ratio is called the ‘mother of
all the ratio’. This is perhaps the most important ratio because it measures the return
that is earned on the owner’s capital. It is calculated as follows:
Return on shareholders fund = Net profit after interest and tax
Shareholder’s fund
Return in Investment (ROI)

When a firm invest money in a business, it naturally expects adequate return on its
investment. Therefore, the firm wants to know how much profit is earning on its
investment. For this, ROI is computed. It establishes the relationship between return
and investment. It is also called accounting rate of return.
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ROI = profit before interest and tax
*100
Capital employed
Capital employed may be gross capital employed or net capital employed. Gross
capital employed means total assets minus current liabilities. Alternatively, it refers
to total of share capital, revenue reserves, debenture and other long term loans.
Profit before interest and tax is calculated as gross profit minus operating expenses.
The ideal return on investment ratio is 15%. The higher the return on investment,
greater is the overall profitability and more is the efficient use of capital employed.
Net Profit Ratio

Net profit ratio is the ratio of net profits to revenues for accompany or business
segment. It measures the overall profitability.Net profit and net sales are the two
components of net profit ratio. Net profit is the final profit after adjusting all
expenses and all incomes. The main objectives of the ratio is to measure the overall
profitability. This ratio indicates how much of the sales are left after meeting
expenses. The ideal net profit ratio is 5% - 10%.
Net profit ratio = Net Profit *100

Net sales
Net profits can be taken as profit before tax and profits after tax. Higher the ratio,
better is the profitability.
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2.2.9 Comparative Balance sheet
A comparative balance sheet shows the assets, liabilities and owner’s equity of a
business enterprise at the beginning and at the end of the accounting period with
increases and decreases in the absolute data in terms of rupees and percentages. A
single balance sheet focuses on the financial status of the firm as on a particular
date, while a comparative balance sheet, focuses on the changes that have taken
place in one accounting period.
2.3 Empirical Literature
FatemaUmmaJohura (2011) undertook a study to analyse Financial Performance

of GPIT based on financial ratios and compared the result with other Indian firms,
namely, Satyam, Infosys, TCS and Wipro for the period of one year (2010). The
researcher used Ratio analysis like Profitability Ratio, Debt utilization, Asset
utilization ratio, Liquidity ratio. The study evidence was that, although GPIT is one
of the known IT companies of Bangladesh, it still has a long way to go to reach to
the position where other Indian IT companies are in, in fact GPIT has the potentiality
to reach to the peak.
Puja ArchanaSahu and Padma Charan (2013) made a financial study to

understand the impact of financial ratios in the IT sector of TCS Company for the
study period of two years from 2012 to 2013. The researchers used ratios and
comparative statement analysis for the study. The study evidence was that in this
comparative scenario the company was very successfully fulfilling its main
objective because of the proper and systematic financial management.
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Selvakumar and Paneerselvam S (2014) made a study to analyse financial
performance of three software companies in India for the period of eight years from
2005-2006 to 2012-2013. They selected Tata Consultancy Services, WIPRO and
Infosys Technologies Ltd. as samples of the study. The researchers used Ratio
analysis, mean, standard deviation and ANOVA as financial and statistical tools.
The study evidenced that, the overall financial performance of TCS was
comparatively good and the performance of Infosys was somewhat satisfactory.
Kumbhaj and Kumbhaj (2014) study focused on comparative financial analysis

of IT companies with special reference to TCS and Wipro. The study was an
analytical study. It analysis the Financial Performance of the companies and data
was collected from secondary sources. The study made Profitability and Liquidity
Ratio analysis of two IT companies. The study broadly concluded that the current
and future financial health of TCS was better than that of Wipro. Employees and
job-seekers had a good future and opportunities for growth and development with
TCS.
Daga and Parikh (2014) analyzed the financial performance of three IT giants of
India-Tata Consultancy Services Limited (TCS), Wipro Limited and Infosys
Technologies Pvt. Ltd and understanding its foreign market exposure risk.
Understanding the exposure risk of the Indian IT sector becomes all the more
important, with the depreciation of Indian currency (depreciated to almost 60%
since the global economic crisis 2008). The study is based on secondary data
covering the period from 2003-2004 to 2012-2013. For analyzing the financial
performance of all the three companies, growth analysis, and ratio analysis are
calculated. To understand the foreign market exposure risk for companies for two
different periods 2003-2008 and 2008-2013 are calculated and compared.
RupeshKumbhaj and YuvrajKumbhaj (2014) studied to analyse the financial

position of TCS and Wipro with respect to ratio analysis for a study period of five
years from 2008 to 2012. The researchers used ratio analysis like, profitability
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analysis, liquidity analysis and potential analysis. The study evidence was that the
current and future health of TCS was better than that of Wipro and ratio analysis
was a useful tool for users of financial statements as it highlighted important
information in a simple form quickly.
Dr. A. S. Hema (2014), studied on “An Appraisal of Financial Performance of Tata

Consultancy Services Limited (TCS)”, examined in the digital era, the need for
software development companies has increased to a greater extent. As a result, the
IT sector has evicted a mushroom growth of software development and consultancy
companies in the recent past. These companies develop both readymade software
and tailor-made software according to the needs of their clients. They recruit
employees mainly through campus interviews conducted in educational institutions
like Engineering Colleges, Arts & Science Colleges and Polytechnics. They provide
attractive packages to their employees. The recent economic slowdown has rocked
the industry very much, following which many companies have downsized their
employees with a view to cutting costs. In this context, the present study appraises
the financial performance of one of the leading companies in the IT sector, Tata
Consultancy Services Ltd Researcher found that both the short term and long term
liquidity position of Tata Consultancy Services have been found to be good which
is a positive note for the creditors and lenders that there is a security for their funds.
The company has been found to have efficiently managed its net worth and total
assets for maximizing the profits. The growth of the company in terms of working
capital and total assets has been found to be satisfactory.
Shenbagam&Kannappan (2015), undertake their analysis of “A Study on

Financial Position and Performance Analysis with Special Reference to Tata
Consultancy Services” the present study covers financial position and performance
analysis of Tata Consultancy Services. According to the author financial analysis is
an aspect of the overall business finance function that involves examining historical
data to get information about the current and future financial health of a company.
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IT has great potential of becoming an engine of accelerated economic growth,
efficiency, improvement for all sectors of the economy, developing India‟s position
in the export market, improving trade insufficiency and means of efficient
governance. It enhances information, protects consumers, provides access to
government services, makes skill creation and training more effective, improves
liberation of health services, and promotes simplicity. The present study found that
the “A study on financial position and performance analysis with special reference
to Tata Consultancy Services” for a period of five years from 2010 -2011 to 2014 -
2015. The data was collected from the company‟s annual reports and other related
information was gathered on the journals and books. To know the financial ratio in
the IT sector the researchers have taken Tata Consultancy Services for their study.
In this research paper the data has been analyzed with the help of different
accounting and statistical techniques used to know the financial soundness of “Tata
Consultancy Services”. They concluded, the information technology (IT) industry
has become one of the healthiest industries in the world. IT, more than any other
industry or economic side, has an improved productivity, particularly in the
developed world, and therefore is a key in importance of global economic growth.
The study concludes that “Tata Consultancy Services'' liquidity and solvency
position are considered satisfactory.
Vineet Singh (2016) undertook a study to analyse Return on Equity (ROE) and
Return on Investment (ROI) offered by two leading IT Companies of India i.e. Tata
Consultancy services (TCS) and WIPRO within a span of 10 years from March 2007
to March 2016. The researcher used a) Return on Equity and b) Return on
Investment. The research evidence that Return on Equity of TCS was better than
Return on Equity of Wipro, also Return on Investment of TCS was better than
Return on Investment of Wipro. The result also shows that there was a significant
difference between ROE and ROI of TCS and ROE and ROI of Wipro.
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MahendraMaisuria and IdrishAllad (2016) undertook a study to examine the
differences in the profitability of five IT companies such as, TCS, Infosys, Wipro,
Tech Mahindra and Oracle Financial Services for a study period of five years from
April 2011 to March 2015. The tools of analysis used by the researchers were, a)
Statistical Tool: One Way ANOVA for testing Return on Capital Employed and
EPS. The research found that the financial performance of Oracle Fin Services was
very satisfactory in terms of Net Profit ratio and EPS but its Net worth Ratio and
return on Capital Employed were not so sound. Net worth ratio and Capital
Employed of selected Indian IT Companies were analyzed, it is clear that TCS was
the highest among the other companies and Tech Mahindra had the lowest
performance. If EPS was considered, then Infosys pays the highest EPS of Rs
139.49 and Wipro pays the lowest EPS of Rs 20.58.
3.1 Introduction
This chapter deals with industry profile and company profile. Industry profile
includes history of information technology. Company profile includes vision,
mission, value of TCS.
3.2 Industry Profile
Information Technology in India is an industry consisting of two major components,

that is IT services and business process outsourcing (BPO). The sector has increased
its contribution to India’s GDP from 1.2% in 1998 to 7.7% in 2017. According to
NASSCOM, the sector aggregated revenues of US$180billionin2019, with export
revenue standing at US$99billion and domestic revenue US$48 billion, growing by
over 13%. As of 2020, India’s IT workforce accounts for 4.36 million employees.
The United States accounts for two-thirds of India’s IT services exports.
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India’s IT services industry was born in Mumbai in 1967with the creation of Tata
consultancy services who in 1977 partnered with Burroughs which began India’s
export of IT services. The first software export zone, SEEPZ-the precursor to the
modern –day IT part - was established in Mumbai in 1973.More than 80 percent of
the country’s software exports were from SEEPZ in 1980s.
Application of new rules of IFRS may result in significant changes to the profile of
revenue and in some cases, cost recognition. Applying the new approach to software
license, for example, it will first be necessary for entities to consider whether any
subsequent services, such as consulting services for customization /installation,
customer support or upgrades, represent distinct elements to which revenue should
be separately allocated. Where it is concluded that certain elements should be
accounted for separately, entities will then typically look to the standalone selling
price to apportion the relevant amount of transaction price to each distinct element
in the contract.
The information technology and information technology enabled services sector is
a field which is undergoing rapid evolution and is changing the shape of Indian
business standards .This sector includes software development, consultancies,
software management, online services and business process outsourcing (BPO).
India’s it industry is expected to grow at a rate of 12-14% during 2016-2017 as per

a report by India’s software industry body National Association of Software and
Services Companies (NASSCOM).This clearly shows that information technology
is a sector which will likely be one of the emerging markets in the days to come as
India’s economy requires more hardware, software and other IT services.
The IT industry is heavily influenced by factors like the global market and
sustenance of its rate of growth. The recession in the United States also impacted
the IT community in India negatively. This segment is promising and has vast
potential, but there are concerns regarding the demand-supply gap, which is
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widening. Some challenges which the industry is facing are inadequate
infrastructure, tax issues and limited preferential access for local firms.
One of the biggest benefits that the computer and IT industry provides in India is
the employment it can generate. Other benefits are exports and Foreign Direct
Investments (FDI). New markets have opened up in the Middle East, Africa, Eastern
Europe, and South and South East Asia. India is now a major destination for IT
outsourcing.
The IT industry is one which is not limited to software development alone.

Technology can be applied in libraries, hospitals, banks, shops, prisons, hotels,
airports, train stations and many other places through database management
systems, or through custom-made software as seen fit.
Among other sectors, the IT sector in India has been driving growth for the last
decade and more, and has the potential to continue doing so for the next couple of
years if shortcomings are met and challenges are faced.
3.3 Company Profile
Tata Consultancy Services Limited (TCS) is an Indian multinational information

technology (IT) services and consulting company headquartered in Mumbai,
Maharashtra, India. It is a subsidiary of Tata group and operates in 149 locations
across 46 countries.TCS is the second largest Indian company by market
capitalization .Tata Consultancy services is now placed among the most valuable
IT services brands worldwide. In 2015, TCS was ranked 64th overall in Forbes
World’s most innovative companies ranking, making it both the highest ranked IT
services companies and the top Indian company. It is the world’s largest IT services
provider. As of 2018, it is ranked the eleventh on the Fortune India 500 list. In April
2018, TCS became the first Indian IT company to reach $100 billion in market
25
capitalization, and second Indian company ever after its market capitalization stood
at 6,79,332.81crore rupees Bombay Stock Exchange.
Tata consultancy Services Limited, initially started as “Tata Computed Systems”

was founded in 1968 by division of Tata Sons Limited. Its early contracts included
punched card services to sister company TISCO, working on an Inter-Branch
reconciliation system for central Bank of India, and providing bureau services to
Unit Trust of India.
On 25th August 2004, TCS became the first Indian based IT services company to
enter the bioinformatics market. In2006, it is designed an ERP system for the Indian
Railway Catering and Tourism Corporation. By 2008, its e-business activities were
generating over US$500 million in annual revenues.
TCS entered the small and medium enterprises market for the first time in 2011,
with cloud-based offerings. On the last trading day of 2011, it overtook RIL to
achieve annual revenues of over 1100crore rupees to provide services to the Indian
Department of Posts. In 2013, the firm moved from the 13th position to 10th position
in the league of top 10 global IT services companies and in July 2014,it became the
first Indian company with over 5 lakh crore market capitalization.
On 8 October 2020, TCS surpassed Accenture in market capitalization to become

world’s most valuable IT company with a market capitalization of $144.73billion.
TCS and its 67 subsidiaries provides a wide range of information technology-related
products and services including application development, business process
outsourcing, capacity planning, consulting, enterprise software, hardware sizing,
payment processing , software management and technology education services. The
firm’s established software products are TCS BANCS and TCS Master Craft.
26
Mission and Vision :
To help customers achieve their business objectives by providing innovative, best

in-class consulting, IT solutions and services. To make it joy for all stakeholders to
work with us.
TCS vision is to decouple business growth and ecological footprint from its
operations to address the environment bottom-line. The green approach is
embedded in their internal processes and service offerings.
Culture:
TCS was recognized for its culture of innovation that welcomes new ideas from
across the organization, resulting in an industry-leading portfolio of intellectual
property and a differentiated positioning as the preferred transformation partner to
leading enterprises across the world.
Value:
Talent and creativity, that is represented by human capital, is at the core of TCS’s
value creation engine.
TCS continually enhances its human capital by acquiring best talent available in
each of the market it operates in, providing a supportive and vibrant workplace to
engage that talent, investing in upskilling individuals with latest technology skills,
and giving them career paths matching their aspirations.
Customer centricity :
The companies industry aligned, customer centric organization structure has

resulted in each business unit acquiring tremendous domain depth, and the account
teams within those units building up immense customer specific contextual
27
knowledge. This domain expertise, contextual knowledge, project management
experience and technology expertise gained on job represents a conversion of
human capital into intellectual capital.
Introduction
Data analysis and interpretations is the main heart of the study. It is the process of
inspecting, cleansing and transforming and modelling data with the goal of
discovering useful information, suggestion, conclusion and supporting decision
making. For this purpose, secondary sources are mainly used in this study. The
collection of secondary data was done by examination of relevant information from
the companies already published sources. The main tool used for data analysis and
interpretation is ratio analysis.
Data analysis and interpretation is the process of assigning meaning to the collected
information and degerming the conclusions, significance and implications of the
findings. The steps involved in data analysis are function of the type of information
collected, however returning to the purpose of the assessment and the assessment
questions will provide a structure for the organisation of the data and a focus for the
analysis.
Data interpretation refers to the implementation of processes through which data is

reviewed for the purpose arriving at an informed conclusion. The interpretation of
data assigns a meaning to the information analysed and determines its signification
and implications. The importance of data interpretation is evident and this is why it
needs to be done properly. Data is very likely to arrive from multiple sources and
has a tendency to enter the analysis process.
28
4.1 Ratio Analysis
The ratio analysis is one of the most powerful tools of financial analysis. It is the
process of establishing and interpreting various ratios. The ratio analysis is used to
study the liquidity, profitability and solvency position of the company. It is with the
help of ratios that the financial statements can be analysed more clearly and decision
making can be made from such analysis.
4.1.1 Liquidity Ratios
(a) Current Ratio

Current Ratio = Current Asset (ideal ratio = 2:1)
Current Liability
Table 4.1. Table showing current ratio

Year Current’s assets Current Current ratio
Liability
2018 81224 17828 4.55:1

2019 92131 22084 4.17:1
2020 90237 27060 3.33:1
2021 99280 34155 2.90:1
2022 108310 42351 2.55:1
(Source: Annual reports) (Amount in crore)
29
Current ratio of the company shows a fluctuating trend during the last 5 years. The
ratio was highest in the year 2016-17 (5.54:1) due to the implementation of Ind AS.
Comparing with the last 5 years all the years ratio became more than the ideal ratio.
Hence it is not good for the company. The management should try to maintain the
idle ratio.
4.1 Figure showing current ratio
0
2018 2019 2020 2021 2022
30
(b) Quick Ratio (Ideal ratio=1:1)
Quick ratio = Liquid Assets

Current liabilities
Table 4.2 Table showing quick ratio

Year Liquid asset Current Liability Quick ratio
2018 81198 17828 4.55:1
2019 92121 22084 4.17:1
2020 90232 27060 3.33:1
2021 99272 34155 2.97:1
2022 108290 42351 2.49:1
The above figure shows that the quick ratio is higher in all the 5 years. It is highest
in the year 2016-2017 (5.54:1) and lowest in the year 2015-16 (2.86:1). Here the
quick ratio is more than 1:1, thus the financial position is said to be good. It indicates
that quick assets are sufficient to pay off the short-term obligations.
31
Figure 4.2 showing quick ratio
6
5
4
3
2
1
0 2018 2019 2021 2021 2022
32
(c) Absolute Liquidity Ratio (Ideal ratio= 0.5:1)
Absolute liquidity ratio = Cash + Bank +Short term securities
Current Liabilities
Table 4.3: Table showing absolute liquidity ratio
Year Absolute liquid Current Absolute liquid
asset Liability ratio
2018 7161 17828 0.40:1

2019 12848 22084 0.58:1
2020 9666 27060 0.35:1
2021 9329 34155 0.27:1
2022 18221 42351 0.43:1
The figure shows that the absolute liquidity ratio is higher in the year 2018-19
(0.58:1) and lowest in the year 2016 -17 (0.28:1). The company does meet the idle
ratio in the 2018-19 and maintains a satisfactory idle ratio but the absolute liquid
ratio of the company should be improved and the company needs to improve its
short-term financial position.
Figure 4.3 showing absolute liquidity ratio
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2018 2019 2020 2021 2022
33
4.1. Solvency Ratio
(a) Proprietary Ratio (ideal ratio = 0.5:1)
Proprietary ratio = Shareholders funds
Total Assets
Table 4.4: Table showing proprietary ratio

Year Shareholder’s Total assets Proprietary ratio
fund
2018 85128 106296 0.80:1
2019 89446 114943 0.77:1
2020 84126 120899 0.69:1
2021 86433 130759 0.66:1
2022 89139 141514 0.62:1
The figure shows that the company’s proprietary ratio is satisfactory. Here
there is a fluctuating trend in the ratio. A Higher ratio indicates that the
firm is very less dependent on creditors for its working capital. Hence here
the company’s proprietary ratio indicates a sound financial position.
Figure 4.4: showing proprietary ratio
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0 2022
2018 2019 2020 2021
34
4.1.3 Profitability Ratio
(a) Return on shareholder’s fund
Return on shareholders’ funds =Net Profit after interest and tax x 100
Shareholder’s fund
Table 4.5: Table showing return on shareholder’s fund
Year Net profit after Shareholders Return on

interest and tax fund shareholders
fund
2018 25880 85128 30.40%
2019 31562 89446 35.2%
2020 32447 84126 38.56%
2021 32562 86433 37.67%
2022 38449 89139 43.13%
The figure shows that the company is having sufficient return on shareholder’s
fund. From the year 2016-2020 the company’s return is above 30%.
35
Figure 4.5: showing return on shareholder’s fund
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2018 2019 2020 2021 2022
(b) Return on Investment
ROI = Profit before interest and tax X100
Capital Employed
Table 4.6: Table showing return on investment

Year Profit before Capital Return on
interest and tax Employed investment (ROI)
2018 34144 88468 38.59%
2019 41761 92859 44.97%
2020 43172 93839 46.00%
2021 44978 96604 46.55%
2022 51687 99163 52.12%

Here the firm maintains a high return on investment from the year 2016-2020.
36
The profitability and the success of the company is high. The higher the ROI
greater is the overall profitability and more the efficient use of capital employed.
The company should try to maintain this satisfactory level of ROI.
Figure 4.6 showing return on investment

60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2018 2019 2020 2021 2022
(c) Net Profit Ratio
Net profit ratio = Net Profit X 100
Net Sales
Table 4.7: Table showing net profit ratio

Year Net Profit Net Sales Net profit ratio
2018 25880 123104 21.02%
2019 31562 146463 21.54%
2020 32447 156949 20.67%
2021 32562 164177 19.83%
2022 38449 191754 20.05%
37
Here the company has a very high net profit ratio and is above its idle ratio. Hence
this indicates there is high efficiency as well as profitability for the company and
they have to maintain this same satisfactory level as well.
Figure 4.7 showing net profit ratio
22.50%
22.00%
21.50%
21.00%
20.50%
20.00%
19.50%
2018 2019 2020 2021 2022
38
4.2 Comparative Balance Sheet
Table 4.8 : table showing comparative balance sheet of the financial

year 2017 and 2018
Particulars 31st 31st march Change in Percentage
march 2018 absolute
Increase
2017 figure or
(in crs)
decrease
(in crs) (in crs)
Asset
Non-current Asset 22936 25072 +2136 9.31%
Current Asset 80316 81224 +908 1.13%
Total Asset 103252 106296 +3044 2.94%
Equity & Liabilities
Shareholders fund 86214 85128 -1086 -1.25%
Non-Current 2160 2938 +778 36.01%

Liabilities
14512 17828 +3316 22.85%

Current Liabilities
Non-Controlling 366 402 +36 9.83%
interest
Total equity 103252 106296 +3044 2.94%

&Liability
During the financial year 2018 the non-current asset has only increased by
9.31% and current asset by only 1.13%. Shareholders fund has decreased by
1.25% current liability and non-current liability has increased by 22.85% and
36.01% respectively. Non-controlling interest has also increased by 9.83%.

39
year 2018 and 2019
march 2019 absolute
Increase
2018 figure or
(in crs)
decrease
(in crs) (in crs)
Asset
Non-current Asset 25072 22812 -2260 -9.01%
Current Asset 81224 92131 +10907 13.42%
Total Asset 106296 114943 +8647 8.13%
Shareholder’s fund 85128 89446 +4318 5.07%
Non-Current Liabilities 2938 2960 +22 0.74%
Current Liabilities 17828 22084 +4256 23.87%
Non-Controlling interest 402 453 +51 12.68%
Total equity &Liability 106296 114943 +8647 8.13%
During the financial year 2019, the current asset has increased by 13.42% and the
non-current asset has decreased by 9.01%. Shareholder’s fund and Noncontrolling
interest has increased by 5.07% and 12.68% respectively. Also, Non-current
liabilities and current labilities has increased by 0.74% and
23.87%
40
year 2019 and 2020
Particulars 31st march 31st march Change in Percentage
2019 2020 absolute
Increase
figure or
(in crs) (in crs)
decrease
(in crs)
Asset
Current Asset 92131 90237 -1894 -2.05%
Total Asset 114943 120899 +5956 5.18%
Shareholder’s fund 89446 84126 -5320 -5.94%
Non-Current 2960 9090 +6130 207.09%

Liabilities

interest
Total equity 114943 120899 +5956 5.18%

&Liability
During the financial year 2020, the non-current asset has increased by 34.41% and
the current asset has decreased by 2.05%. Shareholder’s fund has decreased by
5.94% and non-current liabilities and current liabilities has also increased.
41
year 2020and 2021
march 2021 absolute
Increase or
2020 figure decrease
(in crs)
(in crs) (in crs)
Asset
Non-current Asset 30662 31479 + 817 2.66%
Current Asset 90237 99280 +9043 10.02%
Total Asset 120899 130759 +9860 8.15%
Shareholders fund 84126 86433 +2307 2.74%
Non-Current Liabilities 9090 9496 +406 4.46%

interest
Total equity &Liability 120889 130759 +9860 8.14%
the current asset has increased by 10.02%. Shareholder’s fund has increased by
42
year 2021 and 2022
march 2022 absolute
Increase or
2021 figure decrease
(in crs)
(in crs) (in crs)
Asset
Current Asset 99280 108310 +9030 9.09%
Total Asset 130759 141514 +10755 8.22%
Shareholders fund 86433 89139 +2706 3.13%
Non-Current Liabilities 9496 9317 -179 -1.88%
Non-Controling 675 707 +32 4.74%

Interest
Total equity &Liability 130759 141514 10755 8.22
the current asset has increased by 9.09%. Shareholder’s fund has increased by
43
5.1 Findings
• The current ratio is above 2:1 in all the five years. Current ratio of the
company shows fluctuating trend during the last five years. Company shows
high current ratio. A very high current ratio indicates that too much of money
is blocked in current assets and the funds are not properly used in the business.
• The liquid ratio is fluctuating in past 5 years. Since the quick ratio of the
company is above 1:1 in all the past five years, the financial position of the
firm is said to be good.
• The absolute liquid ratio is showing an alternate increase and decrease, but
its low comparing to ideal ratio.
• The proprietary ratio shows that the financial position of the company is
satisfactory. It indicates safety to the creditors.
• The company is having sufficient return on shareholders fund.

• The return on investment of the company is very high. Therefore overall
profitability of the company is high and more is the efficient use of capital
employed.
• Net profit ratio of the company is very high and it indicates better
profitability.
44
5.2 Suggestions
• Company should use its current assets and maintain its current ratio.
• Funds must be properly used in the business.
• Absolute liquidity ratio should be improved.
5.3 Conclusion
After a detailed comparative study of five years, it is found that the financial
performance of the company is satisfactory. It has made a mark in present scenario.
The profitability position of company is also satisfactory. The company has high
solvency position which makes the company successful in the industry. The
financial strength is also fair for the company. The financial performance of each
succeeding year had improved. The company does not use its funds properly. But
the company is so efficient in terms of its profitability.
Tata Consultancy Services Ltd is one of the top IT servicing company in India. Tata
Consultancy Services is now placed among the most valuable IT services brands
worldwide. This project helps us to understand the various aspects of the financial
side of TCS ltd which includes liquidity position, solvency position and profitability
side of this corporate giant. Through the five-year financial data, a detailed financial
analysis became possible. The study was conducted with the main object of
analyzing the overall performance of the company. This project helps me to acquire
a good experience in this field.
45
Bibliography
Books
● Gupta,S.K. Sharma RK Management accounting kalyanipublishers.New
Delhi 110,2
● Brigham, E.F.,&Ehrhardt, M.C. (2013). Financial management: Theory &

practice. Cengage Learning.
Websites
● www.tcs.com
● www.moneycontrol.com
Journals
1. FatemaUmmaJohura. (2011) Comparative Study of Financial Performance
between GPIT and Indian IT Companies (Wipro, Infosys, Satyam and TCS),
Project Report, BRAC Business School, BRAC University, Dhaka
2. Puja ArchanaSahu and Padma Charan. (2013) Ratio Analysis is an

Instrument for Decision Making-A Study, Asia Pacific Journal of Research
(APJR), Vol.1, No.8, pp.36-41.
3. Daga, A. and Parikh, A. (2013) Financial Performance Analysis of Forex

Exposure of Indian IT Sector with Special Reference to Tata consultancy
Services Limited, Infosys Technologies Pvt. Ltd. and Wipro Limited,
Paripex- Indian Journal of Research, 3
46
4. Selvakumar K and Paneerselvam S.(2014) A study on strategic financial
performance in software industry, International Journal of Financial
management(IJFM), Vol.3, No.2, pp.7-14.
5. Hema, A.S. (2014) An Appraisal of Financial Performance of Tata

Consultancy Services Limited (TCS), Global Journal for Research Analysis,
3 (12),13-14.
6. Kumbhaj, R. Kumbhaj, Y. (2014) Financial Analysis of TCS and Wipro

with respect to Ratio Analysis, Altivs, Shodh Journal of Management &
Commerce.
7. RupeshKumbhaj and YuvrajKumbhaj (2014) Financial Analysis of TCS

and Wipro with Respect to ratio Analysis, AltiusShodh Journal of
Management and Commerce, Vol.1, No.2, pp.1-12.
8. Shenbagam, K. and Kannappan (2015) A Study on Financial Position and

Performance Analysis with Special Reference to Tata Consultancy Services,
Research Paper Commerce, 4(7).
47
9. Vineet Singh. (2016) Analysing Profitability of Indian IT Giants: A Case
Study of TCS and WIPRO, International Journal of Advanced Research in
Management (IJARM), Vol.7, No.3, pp.63-70.
10. MahendraMaisuria and IdrishAllad. (2016). Profitability Ratio Analysis

of Selected Indian IT Companies: A Comparative Study, International
Multidisciplinary E-Journal, Vol.5, No.2, pp.207- 220
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“A STUDY ON FINANCIAL PERFORMANCE OF TCS LTD”

Under the Guidance of

Ms.B.Pushya M.Com, M.Phil Assistant professor.

PG & RESEARCH DEPARTMENT OF COMMERCE

SIGNATURE OF THE GUIDE SIGNATURE OF THE HOD

SIGNATURE OF THE EXAMINER

We declare that the project work entitled “A STUDY ON FINANCIAL

Place: Tiruchirapalli Signature of candidates

CHAPTER NO. CONTENTS PAGE NO:

CHAPTER 1 INTRODUCTION 8-10

CHAPTER 2 REVIEW OF LITERATURE 11-23

CHAPTER 3 INDUSTRY AND 23-28

CHAPTER 4 DATA ANALYSIS AND 28-43

CHAPTER 5 FINDINGS, SUGGESTIONS 44-45

TABLE TITLE PAGE NO:

4.1 Table showing current ratio 29

4.2 Table showing quick ratio 31

4.3 Table showing absolute liquidity ratio 33

4.4 Table showing proprietary ratio 34

4.5 Table showing return on shareholders fund 35

4.6 Table showing return on investment 36

4.7 Table showing net profit ratio 37

4.8 Table showing comparative balance sheet of the 39

4.9 Table showing comparative balance sheet of the 40

4.10 Table showing comparative balance sheet of the 41

4.11 Table showing comparative balance sheet of the 42

4.12 Table showing comparative balance sheet of the 43

FIGURE TITLE PAGE NO:

4.1 Chart showing current ratio 29

4.2 Chart showing quick ratio 31

4.3 Chart showing absolute liquidity ratio 33

4.4 Chart showing proprietary ratio 34

4.5 Chart showing return on shareholders fund 35

4.6 Chart showing return on investment 36

4.7 Chart showing net profit ratio 37

Finance is defined as the provision of the money when it is required. Every

Financial performance is done to evaluate capability, stability and profitability of

1.3 Objective of the study

• To examine the liquidity position of the company

1.4 Research Design

1.4.1 Nature of the study

Study is analytical in nature.

1.4.2 Nature of Data

The data used is secondary in nature.

1.4.4 Period of Study

The study on financial performance of Tata Consultancy Services Ltd is confined to

1.6 Tools for analysis

Chapter 2 Review of Literature

Chapter 3 Industry profile and company profile

Chapter 4 Data analysis and interpretation

Chapter 5 Findings, Suggestions and Conclusion

2.2 Conceptual Literature

2.2.2 Financial performance

“Financial performance is scientific evaluation of profitability and financial strength

2.2.3 Financial Efficiency

2.2.4 Financial Performance analysis

2.2.5 Ratio Analysis

2.2.6 Liquidity Ratio

Current Ratio=Current asset