Liquidity and Profitably ratios of Infosys

1. Infosys
Ratio Analysis
MMS-1
Saumya-09
Abhay-20
Jagdeep -21
Kruti-28
Tushar-39
Afshan-50

2. 15
10
5
0
Liquidity Ratios
Current ratio Cash ratio
2013 2012 2011
The current ratio indicates a company ability to meet short term debt obligations current ratio
measures whether or not a firm has enough resources to pay its debt over next 12 months
higher the ratio the more liquid the company is 2 ,its comfortable financial position for most of
the enterprises comparing the current ratio for last 3 years though it has decreased in 2013 but
it is much higher than the commonly acceptable ,it indicates company might not be using CA or
its short term finances efficiently ,this may also indicate problem in working capital
management .All other things equal ,creditors consider a a high current ratio to be better than
low current ratio as it means company can meet its liabilities
cash ratio is the ratio of company’s cash and cash equivalent assets to its total liabilities
Though the cash ratio decreased but it is much higher than the commonly accepted ratio which
is 0.2.This shows poor asset utilization for a company holding large amounts of cash on its
balance sheet

3. 3500
3000
2500
2000
1500
1000
500
0
Profitability Ratios
EPS ROE
2013 2012 2011
• Earning per share EPS: this is one of the most important measures of expressing corporate earnings. This ratio is of interest
to an individual shareholder as the earning on per share basis. This measure is computed by dividing (net income by the number
of equity or ordinary shares outstanding)
 Net income for equity shareholder/ no. of equity shares.
 In this case EPS shows a constant increase starting from 2011 at 2244.95 to 2012 at 2951.22 and at 2013 at 3176.31
signifying an increase in the individual shareholders wealth which is an healthy beginning of any undertaking.
• ROE measures the overall performance of the company utilisation for management of the total resources or funds available
in the company. Year2013indicates a higher ratio whichsignifying that the firm is using financial leverage that is use of fixed
cost fund or debt financing in the capital structure of the firm – it increase its ROE.

4. 27.5
27
26.5
26
25.5
25
24.5
24
23.5
Net Profit ratio
Profitability Ratios
2013 2012 2011
Profitability rati.os are calculated either in relation to the sale or investments. Profitability ratios measures the
profit making capability of the business undertaking.
The net profit ratio establishes the ratio between net profit and net sales and indicates the efficiency of the
management in manufacturing, selling, administrative and other activities of the firm. This ratio gives an measure of
the firm profitability-> non operating incomes and expenses are excluded from the net profit for calculating this
ratio. This ratio is very useful because if the profit is not sufficient the firm shall not be able to achieve satisfactory
returns. This ratio indicates the firms capacity to face adverse economic conditions such as price competition, low
demand, etc. higher the ratio the better the profitability.
We see that in this case the net profit ratio is satisfactory placed at 25.381 in 211, 27.101 in 2012, 24.795 in 2013.
Higher the ratio, better the profitability thus a higher percentage of the ratio is aimed at.