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8/3/2019 Jagjit Singh MBA GLOBAL Roll No. 5756
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Assignment on Financial Analysis of
ICICI
(Industrial Credit and Investment Corporation of India )
Submitted to: Submitted By:
Dr. Gurdip Batra Jagjit Singh
MBA GLOBAL 3rd
SEM
Roll No. 5756
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1.ICICI Bank
Vision and Mission of ICICI Bank Ltd.
Vision of ICICI Bank
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Mission
We will leverage our people, technology, speed and financial capital to:
Be the banker of first choice for our customers by delivering high
quality, world-class products and services.
Expand the frontiers of our business globally.
Play a proactive role in the full realization of Indias potential.
Maintain a healthy financial profile and diversify our earnings across
businesses and geographies.
Maintain high standards of governance and ethics.
Contribute positively to the various countries and markets in which
we operate.
Create value for our stakeholders.
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ICICI BANK
ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion
(US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$
1,155 million) for the year ended March 31, 2011. The Bank has a network of
2,533 branches and 6,810 ATMs in India, and has a presence in 19 countries,
including India.
ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through
its specialised subsidiaries in the areas of investment banking, life and non-life
insurance, venture capital and asset management.
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada,
branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and
Dubai International Finance Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our
UK subsidiary has established branches in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE).
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Corporate Profile
ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion
(US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$
1,155 million) for the year ended March 31, 2011. The Bank has a network of
2,533 branches and about 6,810 ATMs in India, and has a presence in 19 countries,
including India. ICICI Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels
and through its specialised subsidiaries in the areas of investment banking, life and
non-life insurance, venture capital and asset management.
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada,
branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and
Dubai International Finance Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our
UK subsidiary has established branches in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE).
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Board of Directors
Board Members
Mr. K. V. Kamath, Chairman
Mr. Sridar Iyengar
Mr. Homi R. Khusrokhan
Mr. Arvind Kumar
Mr. M.S. Ramachandran
Dr. Tushaar Shah
Mr. V. Sridar
Ms. Chanda Kochhar,
Managing Director & CEO
Mr. N. S. Kannan,
Executive Director & CFO
Mr. K. Ramkumar,
Executive Director
Mr. Rajiv Sabharwal,
Executive Director
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Services Provided by ICICI
Online Services
ICICI Bankprovides money transfer services under different names ofe - Transfer,Cheque
Transfer,Power Transfer, Net Express and Card Transfer. Each of these services vary
according to the procedure to be followed and the transfer period. These services are designed
according to convenience of different group of customers. There are also similarities in some of
the features of various services. The table given below explains some of the common features of
different services.
e-Transfer - With e-Transfer, debit in yourlocal bank accountin USA and withdraw from a
bank account in over 30 banks in India as aDemand Draft.
Cheque Transfer - Money transfer with this methods is faster compared to that of
traditionalmailing mode to India. You have to post a printed form from ICICI website along
with cheque to a local P.O. Box. Money will be transferred within 1-7 days on the receipts of
cheque by the bank. All the advantages of online money transfer is available with this method
such as online tracking, free money transfer to ICICI Bank account, best exchange
rates etc.
Power Transfer - Money transfer is possible with this method with in 48-96 hrs. This is awire
transferfacility with options for multiple currency debit.
Net Express - You can transfer money to India from your internet bank account. This facility
is available in U.K., Singapore, France and Germany.
Card Transfer - In this methods you can debit using yourCredit Card. (Master Card). Money
is transferred within 3 working days. This mode also has the advantage of using the credit
period. A benefit offered by the card issuer.
http://www.sendmoneyindia.org/best-way-to-send-money-online.phphttp://www.sendmoneyindia.org/best-way-to-send-money-online.phphttp://www.sendmoneyindia.org/http://www.sendmoneyindia.org/http://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_ach.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_ach.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_ach.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webcheque.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webcheque.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webcheque.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webcheque.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webwire.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webwire.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webwire.htmhttp://www.sendmoneyindia.org/how-to-open-bank-account.phphttp://www.sendmoneyindia.org/how-to-open-bank-account.phphttp://www.sendmoneyindia.org/how-to-open-bank-account.phphttp://www.sendmoneyindia.org/demand-draft.phphttp://www.sendmoneyindia.org/demand-draft.phphttp://www.sendmoneyindia.org/demand-draft.phphttp://www.sendmoneyindia.org/sending-money-through-mail.phphttp://www.sendmoneyindia.org/sending-money-through-mail.phphttp://www.sendmoneyindia.org/sending-money-through-mail.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/what-is-web-banking.phphttp://www.sendmoneyindia.org/what-is-web-banking.phphttp://www.sendmoneyindia.org/what-is-web-banking.phphttp://www.sendmoneyindia.org/credit-cards.phphttp://www.sendmoneyindia.org/credit-cards.phphttp://www.sendmoneyindia.org/credit-cards.phphttp://www.sendmoneyindia.org/credit-cards.phphttp://www.sendmoneyindia.org/what-is-web-banking.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/sending-money-through-mail.phphttp://www.sendmoneyindia.org/demand-draft.phphttp://www.sendmoneyindia.org/how-to-open-bank-account.phphttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webwire.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webcheque.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_webcheque.htmhttp://www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion/moneytransfers_USA_ach.htmhttp://www.sendmoneyindia.org/http://www.sendmoneyindia.org/best-way-to-send-money-online.php8/3/2019 Jagjit Singh MBA GLOBAL Roll No. 5756
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Me-NRI, NRI-Direct - Those are specially designedonline money transfer servicesoffered
to Gulf NRIs.ICICI Bankin alliance withMe-Bank in UAE (Me-NRI) and with Commercial
Bank in Qatar (NRI-Direct) offers specialized money transfer services to residents ofUAE &
Qatar respectively.
ICICI Bank Remittance Card : In 2007 ICICI Bank introduced standaloneremittance
cardbased transfer system. NRIs can charge these card at thier own ease using bank accounts
and credit cards. Beneficiary can use the card over ICICI bank affiliated ATMs to withdraw
amounts upto 50000 at a time. The card is re-usable and faster than other methods.
Features Services
Completely online - no paper work required. e-Transfer, Net Express,Card Transfer
Free money transfer in to ICICI bank accountsacross India.
e-Transfer, Net Express, Cheque Transfer,Power Transfer.
Money transfers above $1000 or equivalent into
30 other banks in India are free; for lesser
amounts nominal fee is charged.
For all the online money transfer services.
Online tracking of transactions. For all the online money transfer services.
Best Exchange Rate For all the online money transfer services.
Issuing DD for non-ICICI bank beneficiariesaround 1750 locations in India.
e- Transfer, Power Transfer
Money transfer period of these services vary as follows
e-Transfer - within 5-7 working days
Cheque Transfer - 1-7working days
Power Transfer - 48-96hrs.Card Transfer - 3working days
Offline Services
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Branch Remittance -Money transfer to Indiacan be made through ICICI Bank overseas
brancheslocated in Canada, Britain and U. K.. Instant money transfer can be done through
these branches for the customers and non customers of ICICI Bank at these regions.
ICICI - Well Fargo Services - ICICI Bank and Wells Fargo USA offer this money transfer
service after an alliance agreement.Money can be sent to India from a Well FragoBranch or
ATM centre in USA. Transfer occurs in 24hrs.
Insta Transfer - This service is made available in Gulf Countries by ICICI Bank. Your ICICI
bank account can be credited instantly approaching the partnering exchange houses or banks.
Speed Transfer - This is a fast money transfer service with turnaround time of 24 hrs. through
partner exchange banks in different countries.
Demand Draft- An instant DD across the counter in INR available at the partner exchange
banks of ICICI Bank which is payable in different locations of ICICI bank.
Home Point - This service is available only in Canada. You can transfer within 2hrs from any
of the partner banks in Canada.
Cheques- Foreign Currency Cheques can be deposited in ICICI Bank and credit is usually
available with in 8 days.
Wire Transfer- Here you can remit money from your local bank to anyICICI bank
account by giving themwire transfer instructions. Money usually transferred within 24-48
hrs.
POSB in Singapore - This facility is offered by ICICI Bank association with DBS Bank
Singapore. You can directly give money transfer instructions at any of the POSB centers in
Singapore.
http://www.sendmoneyindia.org/http://www.sendmoneyindia.org/http://www.sendmoneyindia.org/http://www.sendmoneyindia.org/wells-fargo-services.phphttp://www.sendmoneyindia.org/wells-fargo-services.phphttp://www.sendmoneyindia.org/wells-fargo-services.phphttp://www.sendmoneyindia.org/demand-draft.phphttp://www.sendmoneyindia.org/demand-draft.phphttp://www.sendmoneyindia.org/cheques.phphttp://www.sendmoneyindia.org/cheques.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/how-wiretransfer-works.phphttp://www.sendmoneyindia.org/how-wiretransfer-works.phphttp://www.sendmoneyindia.org/how-wiretransfer-works.phphttp://www.sendmoneyindia.org/how-wiretransfer-works.phphttp://www.sendmoneyindia.org/wire-transfer.phphttp://www.sendmoneyindia.org/cheques.phphttp://www.sendmoneyindia.org/demand-draft.phphttp://www.sendmoneyindia.org/wells-fargo-services.phphttp://www.sendmoneyindia.org/8/3/2019 Jagjit Singh MBA GLOBAL Roll No. 5756
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ICICI Bank
Profit & Loss account ------------------- in Rs. Cr. -------------------
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Interest Earned 25,974.05 25,706.93 31,092.55 30,788.34 22,994.29
Other Income 7,108.91 7,292.43 8,117.76 8,878.85 6,962.95
Total Income 33,082.96 32,999.36 39,210.31 39,667.19 29,957.24
Expenditure
Interest expended 16,957.15 17,592.57 22,725.93 23,484.24 16,358.50
Employee Cost 2,816.93 1,925.79 1,971.70 2,078.90 1,616.75
Selling and Admin Expenses 3,785.13 6,056.48 5,977.72 5,834.95 4,900.67
Depreciation 562.44 619.50 678.60 578.35 544.78
Miscellaneous Expenses 3,809.93 2,780.03 4,098.22 3,533.03 3,426.32
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Operating Expenses 8,594.16 10,221.99 10,795.14 10,855.18 8,849.86
Provisions & Contingencies 2,380.27 1,159.81 1,931.10 1,170.05 1,638.66Total Expenses 27,931.58 28,974.37 35,452.17 35,509.47 26,847.02
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit for the Year 5,151.38 4,024.98 3,758.13 4,157.73 3,110.22
Extraordionary Items -2.17 0.00 -0.58 0.00 0.00
Profit brought forward 3,464.38 2,809.65 2,436.32 998.27 293.44
Total 8,613.59 6,834.63 6,193.87 5,156.00 3,403.66
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 1,612.58 1,337.95 1,224.58 1,227.70 901.17Corporate Dividend Tax 202.28 164.04 151.21 149.67 153.10
Per share data (annualised)
Earning Per Share (Rs) 44.73 36.10 33.76 37.37 34.59
Equity Dividend (%) 140.00 120.00 110.00 110.00 100.00
Book Value (Rs) 478.31 463.01 444.94 417.64 270.37
Appropriations
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Transfer to Statutory Reserves 1,780.29 1,867.22 2,008.42 1,342.31 1,351.12
Transfer to Other Reserves 0.26 1.04 0.01 0.01 0.00
Proposed Dividend/Transfer toGovt
1,814.86 1,501.99 1,375.79 1,377.37 1,054.27
Balance c/f to Balance Sheet 5,018.18 3,464.38 2,809.65 2,436.32 998.27
Total 8,613.59 6,834.63 6,193.87 5,156.01 3,403.66
Ratios
Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07
Per share ratios
Adjusted EPS (Rs) 44.37 34.90 33.60 36.78 33.30
Adjusted cash EPS (Rs) 49.25 40.45 39.70 41.97 39.36
Reported EPS (Rs) 44.73 36.10 33.76 37.37 34.59
Reported cash EPS (Rs) 49.61 41.66 39.85 42.56 40.64
Dividend per share 14.00 12.00 11.00 11.00 10.00
Operating profit per share (Rs) 64.08 49.80 48.58 51.29 42.19
Book value (excl rev res) per share (Rs) 478.31 463.01 444.94 417.64 270.37
Book value (incl rev res) per share (Rs.) 478.31 463.01 444.94 417.64 270.37
Net operating income per share (Rs) 281.04 293.74 343.59 354.71 316.45
Free reserves per share (Rs) 358.12 356.94 351.04 346.21 199.52
Profitability ratios
Operating margin (%) 22.80 16.95 14.13 14.45 13.33
Gross profit margin (%) 21.06 15.06 12.36 12.99 11.41
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Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07
Net profit margin (%) 15.91 12.17 9.74 10.51 10.81
Adjusted cash margin (%) 17.52 13.64 11.45 11.81 12.30
Adjusted return on net worth (%) 9.27 7.53 7.55 8.80 12.31
Reported return on net worth (%) 9.35 7.79 7.58 8.94 12.79
Return on long term funds (%) 42.97 44.72 56.72 62.34 82.46
Leverage ratios
Long term debt / Equity - - 0.01 0.01 0.01
Total debt/equity 4.10 3.91 4.42 5.27 9.50
Owners fund as % of total source 19.62 20.35 18.46 15.95 9.52
Fixed assets turnover ratio 3.55 4.60 5.14 5.61 4.52
Liquidity ratios
Current ratio 1.73 1.94 0.78 0.72 0.61
Current ratio (inc. st loans) 0.11 0.13 0.13 0.10 0.08
Quick ratio 15.86 14.70 5.94 6.42 6.04
Inventory turnover ratio - - - - -
Payout ratios
Dividend payout ratio (net profit) 35.23 37.31 36.60 33.12 33.89
Dividend payout ratio (cash profit) 31.76 32.33 31.00 29.08 28.84
Earning retention ratio 64.49 61.40 63.23 66.35 64.80
Cash earnings retention ratio 68.01 66.70 68.87 70.51 70.22
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Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07
Coverage ratios
Adjusted cash flow time total debt 39.77 44.79 49.41 52.34 65.12
Financial charges coverage ratio 0.43 0.33 0.25 1.25 1.25
Fin. charges cov.ratio (post tax) 1.34 1.26 1.20 1.20 1.22
Component ratios
Material cost component (% earnings) - - - - -
Selling cost Component 0.94 0.72 1.74 4.43 6.12
Exports as percent of total sales - - - - -
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.83 0.80 0.75 0.78 0.80
Bonus component in equity capital (%) - - - - -
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FINANCIAL ANALYSIS
Financial analysis enables us to understand and assess the financial position of a
business organization. Ratio analysis is one of the most important techniques used
for effective financial analysis. A Ratio is used as a yard stick for evaluating the
financial performance.
According to Webster a ratio shows the relationship between two or more things.
The relationship between two accounting figures, expressed mathematically is
known as financial ratio. A ratio is used as an index or yardstick for evaluating
financial position and performance of an enterprise.
The following types of ratios are used
Liquidity Ratios
Leverage RatiosActivity Ratios
Profitability Ratios
1.LIQUIDITY RATIOS
A class of financial metrics that is used to determine a companys ability to pay off
its shirt-terms debts obligations. Generally, the higher the value of the ratio, the
larger the margin of safety that he company possesses to cover short- term debts.
Common liquidity ratios include the current ratio, the quick ratio and operating
cash flow ratio. Different analysts will calculate only the sum of the cash and
equivalents divided by current liabilities because they feel that they are the most
liquid assets, and would be the most likely to be used to cover short- term debts is
of utmost importance when creditors are seeking payment.
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Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to
determine whether the company will be able to continue as going concern.
CURRENT RATIO
Meaning:
This ratio compares the current assests with the current liabilities. It is also
known as working capital ratio or solvency ratio. It is expressed in the form
of pure ratio.
E.g. 2:1
Formula:
Current Ratio = Current Assets / Current Liabilities
=3212.96/15501.18
=.020
Significance:
0.51
0.62
0.610.72
0.78
Current Ratio
2005 2006 2007
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The current assests of a firm represents those assets which can be, in the
ordinary course of business, converted into cash within a short period time,
normally not exceeding one year. The current liabilities defined as liabilities
which are short term maturing obligations to be met, as originally
contemplated, with in a year. Current ratio (CR) is the ratio of total currentassets (CA) to total current liabilities (CL).
Current assets include cash and bank balances; inventory of raw materials,
semifinished and finished goods; marketable securities; debtors (net of
provision for bad and doubtful debts); bills receivable; and prepaid expenses.
Current liabilities consist of trade creditors, bills payable, bank credit,
provision for taxation, dividends payable and outstanding expenses. This ratio
measures the liquidity of the current assets and the ability of a company to
meet its short-term debt obligation. CR measures the ability of the company to
meet its CL, i.e., CA gets converted into cash in the operating cycle of the firm
and provides the funds needed to pay for CL. The higher the current ratio, the
greater the short-term solvency. This compares assets, which will become
liquid within approximately twelve months with liabilities, which will be due for
payment in the same period and is intended to indicate whether there are
sufficient short-term assets to meet the short- term liabilities. Recommended
current ratio is 2: 1. Any ratio below indicates that the entity may face liquidity
problem but also Ratio over 2: 1 as above indicates over trading, that is the
entity is under utilizing its current assets.
LIQUID RATIO:
Meaning:
Liquid ratio is also known as acid test ratio or quick ratio. Liquid ratio compare
the quick assets with the quick liabilities. It is expressed in the form of pure
ratio. E.g. 1:1. The term quick assets refer to current assets, which can be
converted into, cash immediately or at a short notice without diminution of
value.
Formula:
Liquid ratio = Quick Assets / Current Liabilities
= 181205.60+7114.12+38597.83/15501.18
=14.63
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Liquid ratio for 2010 is 14.63
Significance:
Quick Ratio (QR) is the ratio between quick current assets (QA) and CL. QA
refers to those current assets that can be converted into cash immediately
without any value strength. QA includes cash and bank balances, short-term
marketable securities, and sundry debtors. Inventory and prepaid expenses are
excluded since these cannot be
turned into cash as and when required. QR indicates the extent to which a
company can pay its current liabilities without relying
on the sale of inventory. This is a fairly stringent measure of liquidity because
it is based on those current assets, which are highly liquid. Inventories are
excluded from the numerator of this ratio because they are deemed the least
liquid component of current assets. Generally, a quick ratio of 1:1 is considered
good. One drawback of the quick ratio is that it ignores the timing of receipts
and payments.
4.98
6.646.04
6.42
5.94
Quick Ratio
2005 2006 2007
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EARNING PER SAHRE
Formula:
Earning per share = NPAT / Number of equity share
36.10
28.5534.5937.37
33.78
EPS
2005 2006 2007
2005 2006 2007 2008 2009 2010
NPAT 2,007.28 2,532.95 2,995.00 4,092.12 3,740.62 4024.98
No. of
Equityshare
73.67 88.98 89.93 111.27 111.27
111.72
Earning
per share27.22 28.55 34.59 37.37 33.78
36.10
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INTERPRETATION:-
This yield can be used by a Share holder while making decisions about
the investment on comparison to other alternative investments.
The E.P.S. when compared to the current market price of the share ,gives
measure of the rate of yield .
The E.P.S. of the company is currently decreasing because of the
decreasing in the net worth during recession.
The earning per share of the IDEA CELLULAR LIMITED is continuously
increased in the year from 2005-06 to 2006-07 because of highly
increased in the net profit.
Then it was also increased in the year 2007-08 because of the increased
in the net profit and relatively less percentage increase in the no.of equity
share.
The EPS is continuously increase which express that the company is
effectively uses its capital and also efficiently uses the loan funds instead
of the owners fund. It was good for the share holders of the company
and they get the satisfactory return.
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Return on capital employed
Return on capital employed = NPAT / Capital employed * 100
2005 2006 2007 2008 2009 2010
NPAT 2,007.28 2,532.95 2,995.00 4,092.12 3,740.62 4024.98
Capital
employed736.75 889.83 899.34 1,112.68 1,113.29
1114.89
Return
on
capital
employed
2.72 2.85 3.33 3.68 3.363.61
Return on capital employed (for 2010 is 22%)
Figure 1: Return on capital employed
Interpretation:
This is another ratio to judge the efficiency and effectiveness of the
company like profitability ratio.
17%
18%
21%23%
21%
Return on capital emplyed
2005 2006 2007
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The income from services is greaterly increased compared with the
previous year and the total capital employed includes capital and
reserves & surplus. Due to huge increase in the net profit the capital
employed is also increased along with income from services. Both areeffected in the increment of the ratio of current year.
Proprietary ratio
Formula :
Proprietary ratio = Proprietary fund / Total fund
Proprietary ratio
2005 2006 2007 2008 2009 2010
Proprietar
y fund
12,549.9
5
22,205.9
9
24,313.2
6
46,470.2
1
49,533.0
2
49883.2
3
Total fund17,460.8
9
24,577.1
6
42,258.7
3
60,507.3
0
51,920.3
9
52352.3
0
Proprietar
y ratio0.72 0.90 0.58 0.77 0.95
0.95
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Interpretation:
The proprietary ratio establishes the relationship between shareholders
funds to total assets. It determines the long-term solvency of the firm.
This ratio indicates the extent to which the assets of the company can be
lost without affecting the interest of the company.
The share holders funds include capital and reserves and surplus. The
reserves and surplus is increased due to the increase in balance in profit
and loss account, which is caused by the increase of income from
services.
Total assets, includes fixed and current assets. The fixed assets are
reduced because of the depreciation and there are no major increments
in the fixed assets. The current assets are increased compared with the
year 2007. Total assets are also increased than precious year, which
resulted an increase in the ratio than older.
0.72
0.9
0.58
0.77
0.95
Proprietary ratio
2005 2006 2007
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SOLVENCY RATIO
Solvency ratio=Total liabilities/Total assets
Interpretation:
Generally the best solvency ratio to any firm is 1:1 . For ICICI it is almost
exceeding from 1 every year.
GROSS PROFIT RATIO
Gross profit ratio= gross profit/net sales
Interpretation:
This gross profit reveals the operating efficiency of the company. Gross profit ratio
may be indicated to what extent the selling prices of goods per unit may be reducedwithout incurring losses on operations. It reflects efficiency with which a firm
produces its products. As the gross profit is found by deducting cost of goods sold
from net sales, higher the gross profit better it is. There is no standard GP ratio for
evaluation. It may vary from business to business The gross profit ratio for the year
2011 is 21.06 in crores. That means the bank is in a better position.
TOTAL DEBTS TO EQUITY RATIO
Total debts to assets ratio = total liabilities/ total assets
Interpretation:
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Provides information about the company's ability to absorb asset reductions arising
from losses without jeopardizing the interest of creditors.
In the year 20011 the ratio is 4.10
NET PROFIT RATIO
Net profit ratio = net profit/net sales *100
Interpretation:
NP ratio is used to measure the overall profitability and hence it is very useful to
proprietors.
The ratio is very useful as if the net profit is not sufficient, the firm shall not be
able to achieve a satisfactory return on its investment.
This ratio also indicates the firm's capacity to face adverse economic conditions
such as price competition, low demand, etc. Obviously, higher the ratio the better
is the profitability. But while interpreting the ratio it should be kept in mind thatthe performance of profits also be seen in relation to investments or capital of the
firm and not only in relation to sales. The net profit ratio is 15.81 % for the year
2011.
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Bibliography
1.www.icici.com2.www.moneycontrol.com
3.Analysis information retrieved from
http://faculty.philau.edu/lermackh/financial_analysis.htm#Financia
l%20Ratio%20Analysis%20%28Abridged%29
4.Stice & Stice
http://www.icici.com/http://www.icici.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://faculty.philau.edu/lermackh/financial_analysis.htm#Financial%20Ratio%20Analysis%20%28Abridged%29http://faculty.philau.edu/lermackh/financial_analysis.htm#Financial%20Ratio%20Analysis%20%28Abridged%29http://faculty.philau.edu/lermackh/financial_analysis.htm#Financial%20Ratio%20Analysis%20%28Abridged%29http://faculty.philau.edu/lermackh/financial_analysis.htm#Financial%20Ratio%20Analysis%20%28Abridged%29http://faculty.philau.edu/lermackh/financial_analysis.htm#Financial%20Ratio%20Analysis%20%28Abridged%29http://www.moneycontrol.com/http://www.icici.com/8/3/2019 Jagjit Singh MBA GLOBAL Roll No. 5756
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