Accenture presentation

transcript

High Performance delivered

Harpreet Singh (051089)

Karan Chawla (051065)

Vipin Mittal (051087)

Gaurav Ahuja(051076)

Apratim Tiwari (051073)

Name of the Instructor: Mr. Himanshu Joshi

Department of Professional DevelopmentJAYPEE UNIVERSITY OF INFORMATION TECHNOLOGY

WAKNAGHAT, SOLAN, HIMACHAL PRADESH, INDIA - 173215

We hereby acknowledge the kind support and guidance extended by our reverend teacher Mr. Himanshu Joshi and all my colleagues for their constant encouragement without whom this project on “Financial analysis of ACCENTURE” could not have been completed.

Acknowledgement

Company Description

Founded1989

Headquarters Hamilton, Bermuda110 offices in 48 countries

Key people William (Bill) D. Green (CEO)

Industry Management consulting services

Revenue $17.094 billion (2005)1-Year Revenue Growth 11.6% (2005)

Market Capitalization $21.69 billion (2005)

Net income $940.5 Million (2005)1-Year Net Income Growth 26.5%

Employees about 140,0001-Year Employee Growth 13.8%

Slogan High Performance. Delivered.

Accenture is a global management consulting, technology services and outsourcing company, with net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments.

Our "high performance business" strategy builds on our expertise in consulting, technology and outsourcing to help clients perform at the highest levels so they can create sustainable value for their customers and shareholders. Using our industry knowledge, service-offering expertise and technology capabilities, we identify new business and technology trends and develop solutions to help clients around the world:

• Enter new markets. • Increase revenues in existing markets. • Improve operational performance. • Deliver their products and services more effectively and efficiently.

We have extensive relationships with the world's leading companies and governments and work with organizations of all sizes—including 91 of the Fortune Global 100 and two-thirds of the Fortune Global 500. Our commitment to client satisfaction strengthens and extends our relationships. For example, 97 of our top 100 clients in fiscal year 2006, based on revenue, have been clients for at least five years, and 77 have been clients for at least 10 years.

Who we are and What we do

High Performance delivered

Executive Leadership

William (Bill) D. Green

William D. Green is the chairman & CEO of Accenture. In addition to chairing the board of directors, he is responsible for managing the company, formulating and executing long-term strategies, and for all interactions with clients, employees, investors and other stakeholders. Mr. Green is Accenture's primary decision maker and policy maker, setting the tone for the company's values, ethics and culture. He has served on Accenture's board of directors since its inception in 2001.

Chairman & CEO of Accenture

Stephen (Steve) J. Rohleder

As Accenture’s chief operating officer, Steve Rohleder leads all of the company’s business and geographic operations globally and is responsible for executing Accenture’s business strategy and ensuring operational excellence company-wide. Prior to assuming his current role in September 2004, Mr. Rohleder was group chief executive of Accenture’s global Government operating group. Under his leadership, the Government operating group achieved annual revenue growth of approximately 30 percent, due in part to innovative deal structures and offerings.

Chief Operating Officer

Pamela J. Craig

Pamela J. Craig is Accenture's chief financial officer, responsible for leading Accenture's Finance organization, which includes the Corporate Controllership, Treasury, Tax, Investor Relations, Corporate Transaction Services, Client & Corporate Finance, Finance Operations and Strategic Planning & Analysis functions. She is also a member of Accenture's Executive Leadership Team.From March 2004 until October 2006, Ms. Craig was senior vice president–Finance, with global responsibility for Accenture's client deal structuring, client finance, country controllership and group finance activities.

Chief Financial Officer

History

Continuous innovation and rapid transformation have been themes throughout Accenture's history. Established in 1989 primarily as a technology consultant and systems integrator, Accenture soon began offering a new breed of business integration solutions to clients—solutions that aligned organizations' technologies, processes and people with their strategies. Throughout its history, Accenture has expanded its offerings and capitalized on evolving management trends and technologies to benefit its clients. The company pioneered systems integration and business integration; led the deployment of enterprise resource planning, customer relationship management and electronic services; and has established itself as a leader in today's global marketplace.

Joe W. Forehand, a partner with 30 years of experience, was named CEO in November 1999 and chairman of Accenture's board of directors in February 2001. Under Forehand's leadership, Accenture became a public company in July 2001 when it listed on the New York Stock Exchange. After nearly five years as CEO, Mr. Forehand stepped down from that position on Sep. 1, 2004, retaining the position of chairman. He was succeeded as CEO by William D. Green, a partner with more than 26 years of experience at Accenture, who had previously served as chief operating officer—Client Services.Today Accenture is a global management consulting, technology services and outsourcing company, with net revenues of US$16.65 billion for the fiscal year ended August 31, 2006.

Services

Aerospace and Defense Commercial Manufacturers, Defense Contractors

Airline National Carriers, International Carriers, Airports...

Automotive Original Equipment Makers (OEMs), Automotive Suppliers.

Chemicals Manufacturers, Suppliers, Customers…

Communications Wireline, Wireless, Cable, Satellite...

Freight and Logistics Parcel Delivery, Air Cargo, Trucking and Shipping Fleets…

Government Defense, Education, Health, Human Services, Immigration, Justice and Public Safety, Postal,

Revenue

Health and Life Sciences Government Health, Payers, Pharmaceuticals and Medical Products, Providers

Industrial Equipment Machinery, Automation, Power Generation, Construction...

Media and Entertainment Broadcast, Entertainment, Publishing, Printing and Portal

Metals and Mining Steel, Aluminum, Copper, Zinc, Precious Metals...

Consumer Goods and Services Consumer Packaged Goods, Cosmetics, Apparel…

Electronics and High Tech Aerospace, Consumer Electronics, Software…

Energy Upstream, Downstream

Financial Services Banking, Capital Markets, Insurance

Forest Products Lumber, Pulp, Papermaking...

Public Transportation

Integrated e-Ticketing, Fleet Management, Rail, Tolling Solutions

Retail Mass Merchants, Grocery Stores, Professional Service Firms...

Travel Hotels Chains, Car Rental Companies, Casinos...

Utilities Electric, Gas, Water...

Major Clients

US Airways: Spare Parts Management DuPont: Alliance/IT Outsourcing SAP: Human Resources Shared Services Siemens: Financial Reporting Solution Microsoft Xbox: Supply Chain Management Microsoft: Siebel Sales Force Transformation

And more then 200 client successes

Accenture EDS IBM Industry

Market Capitalization 21.68 14.52 141.54 195.4M

Gross Profit Margin 27.09% 12.64% 41.89% 37.86%

EBDIT 2.28 2.15 17.74 20.11M

Operating Margin 10.03% 3.84% 14.03% 6.10%

EPS 1.692 0.89 6.11 0.01

Net Income 1.04 0.499 9.42 1.01M

EDS = Electronic Data Systems Corp.

IBM = International Business Machines Corp.

Industry = Management Services

GRAPHICAL REPRESENTATION

5.00%10.00%

15.00%

20.00%

25.00%30.00%

35.00%

40.00%45.00%

Gross Profit Margin

Operating Margin

10.00%

12.00%

14.00%

16.00%

Operating Margin

21.68 14.52

141.54

Accenture EDS IBM

Market Capital

Accenture EDS IBM

Net Income

Particulars 2005 2004 2003Sales $17094 $15113 $13397

OPERATING EXPENSESCost of services 12002 10497 9087Sales and Marketing 1558 1488 1459General and administrative costs 1512 1340 1300 Total 15072 13326 11846

Depreciation 282 257 237Cost of good sold 11720 10240 8850

Operating income 2111 1759 1551Gain on investment 21 3 10Interest 84 38 20Other expenses (11) --- 32Equity in losses of affiliates --- (2) ---Income before Income taxes 2206 1799 1613Provision for Income Taxes 697 576 566Income before Minority Interest 1509 1223 1049Minority Interest (568) (532) (549)Net Income 941 691 500Earning per shareBasic $1.6 $1.25 $1.06Diluted $1.5 $1.22 $1.05

US Dollar amounts in millions, except share and per share data.

Particulars 2005 2004 2003

ASSETS

Current Assets

Cash and cash equivalents $2484 $2553 $2332

Short-term investments 463 285 ---

Restricted cash --- --- 83

Receivables 1753 1662 1419

Unbilled Services 1384 1050 829

Other current assets 631 589 377

Total current assets 6685 6139 5037

Non Current Assets

Investments 263 340 33

Property and equipment 694 644 650

Other non current assets 1315 890 739

Total non current assets 2272 1874 1422

Total Assets $8957 $8013 $6459

LIABILITIES AND SHARE HOLDER’S EQUITYCurrent LiabilitiesShort-term debt $31 $37 $46Accounts Payable 807 524 573Deferred revenues 1284 980 677Accrued payroll and related benefits 1431 1463 974Other accrued liabilities 1309 1389 1081Total current liabilities 4862 4393 3351

Non Current LiabilitiesLong-term debt 44 32 14Other non current liabilities 1373 1175 1416Total non current liabilities 1417 1207 1430

Minority interest 981 941 884Share holder’s equity 1697 1472 794 Total liabilities and share holder’s equity $8957 $8013 $6459

Ratio Analysis

Ratio 2003 2004 2005

Current Ratio 1.5 1.4 1.4

Quick Ratio 1.4 1.2 1.2

Debt-Equity Ratio 0.80 0.02 0.04 Leverage Ratio 8.1 5.4 5.3

Debtor Turnover Ratio 6.1 6.1 5.9 Asset Turnover Ratio 2.2 2.1 2.0

Ratio 2003 2004 2005

Average Collection Period 1.967 1.967 2.033(month)

Gross Profit Margin Ratio 33.9 32.2 31.4

Net Profit Margin Ratio 3.7 4.6 5.5

Return on Stock Equity 62.7 46.9 55.4

Interest Coverage Ratio 51.6 58.4 69.3

Return on Total Asset 7.7 8.6 10.5

• Current Ratio has decreased from 1.5 in 2003 to 1.4 in 2005 implies that company has significantly – Decreased its liquidity

– Imbalance Condition

• Debt-Equity Ratio has kept high for the initial years signifies low protection suffered by the creditors then and now this ratio has decreased.

• Quick Ratio has decreased upon the years and the company will not be able to pay back the liabilities– Imbalance Condition

• Leverage Ratio has considerably decreased upon the years– Less risky– Less profitable

• Debtor Turnover Ratio has decreased from 6.1 in 2003 to 5.9 in 2005 showing that debtors are not able to pay back in time.

• Gross Profit Margin Ratio has decreased from 33.9 in 2003 to 31.4 in 2005 resulting in less payment as dividend to equity share holders and lesser retained earnings.

Particulars 2003 2004 2005ASSETSCurrent AssetsCash and cash equivalents $100 $109.4 $106.5Short-term investments ----- -------- --------Restricted cash ----- -------- --------Receivables 100 117.12 123.53Unbilled Services 100 126.65 166.94 Other current assets 100 156.23 167.37Total current assets 100 121.87 132.71

Non Current AssetsInvestments 100 1030.30 796.96 Property and equipment 100 99.07 106.76Other non current assets 100 120.43 177.94Total non current assets 100 131.78 159.77 Total Assets 100 124.05 138.67

INDEX ANALYSIS

COMMON BASE YEAR FINANCIAL STATEMENT BALANCE SHEET on December 31,2005

LIABILITIES AND SHARE HOLDER’S EQUITYCurrent LiabilitiesShort-term debt $100 80.43 67.39Accounts Payable 100 91.44 140.83Deferred revenues 100 131.02 189.66

Accrued payroll and related benefits 100 150.20 146.91Other accrued liabilities 100 128.49 121.09Total current liabilities 100 131.09 145.09

Non Current LiabilitiesLong-term debt 100 228.57 314.28Other non current liabilities 100 82.98 96.96Total non current liabilities 100 84.40 99.09

Minority interest 100 106.44 110.97Share holder’s equity 100 185.39 213.72 Total liabilities and share holder’s equity 100 124.05 138.67

• IT services provider Accenture Ltd. met net revenue expectations and topped earnings forecasts in its second fiscal quarter of 2003 thanks in part to strong growth in its outsourcing business,

• The company had earnings per share of $0.25, exceeding by one cent analysts‘ earnings expectations.

• BT Group PLC has extended an existing human resources (HR) outsourcing deal with Accenture Ltd. with a new 10-year contract valued at 306 million �(US$576 million). The deal will cover BT's HR functions in 38 countries for all of its 97,000 employees and 180,000 BT pensioners.

• Despite growth in its outsourcing business, weakness in its core consulting business is leading Accenture to cut about 750 employees, or about 1 percent of its 75,000 employees which is primarily affecting senior level executives in the U.S. and the U.K.

• The company's core business, consulting, continued to slide with a 15 percent net revenue drop to $2 billion, following the market's trend of depressed prices and low demand for consulting.

• Automotive Accenture Technology Labs is developing prototypes which enable two-way communications with vehicles, enhance customer service, accelerate product research and drive overall efficiencies.

• Airline During both turbulent and smooth times, successful airline companies continuously invest in safety, security and customer service enhancements. Accenture Technology Labs devises first class solutions that encompass every facet of the airline industry.

• Banking Accenture Technology Labs shows how retail banks can transform branches into proactive sales and service centers, switching costs from fixed to variable. Open, Web-based, fully integrated platforms will offer more robust customer insight capabilities that can provide a differentiating and profitable customer experience.

• Consumer Goods & Services Accenture Technology Labs is developing prototypes to help consumer products companies gain competitive advantage by staying tuned into customers' buying patterns and feedback, and by improving supply chain functions.

1). Top 5 business threats to profitability for senior executives.

•Business Threats % of respondents selecting issue •1. Inability to Retain Talent 40•2. Fluctuating Canadian Dollar 31 •3. Macroeconomic Forces and the Global Economy 30 •4. Poor Customer Care 29•5. Compliance with Government and other regulations 23

(Sarbanes Oxley)

2). Inability to retain talent.

3). Accenture is facing high challenges in Indian Market.

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Accenture presentation

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