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TCS Assignment

TCS is an Indian multinational IT services company and subsidiary of Tata Group. It operates in 46 countries with 199 branches worldwide. TCS provides various IT services such as application development, business process outsourcing, consulting, and enterprise software. In FY2012-13, TCS reported $11.57 billion in revenue, $3.12 billion in operating income, and $2.59 billion in net profit. TCS forecasts sales using factors like past growth rates, expected growth rates, and economic recovery. It computes additional fund requirements using ratios for assets to sales, liabilities to sales, profit margin, and retention ratio.

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Supriya Gunthey Ranade
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989 views

TCS Assignment

TCS is an Indian multinational IT services company and subsidiary of Tata Group. It operates in 46 countries with 199 branches worldwide. TCS provides various IT services such as application development, business process outsourcing, consulting, and enterprise software. In FY2012-13, TCS reported $11.57 billion in revenue, $3.12 billion in operating income, and $2.59 billion in net profit. TCS forecasts sales using factors like past growth rates, expected growth rates, and economic recovery. It computes additional fund requirements using ratios for assets to sales, liabilities to sales, profit margin, and retention ratio.

Uploaded by

Supriya Gunthey Ranade
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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TCS

(QUANTITATIVE TECHNIQUES - ASSIGNMENT)

Roll No 86 94 102

Name Arun Anantha Raman Suraj Chheda Supriya Gunthey

TATA CONSULTANCY SERVICES LTD

TCS is an Indian multinational information technology (IT) services, business solutions and consulting company headquartered in Mumbai. It is a subsidiary of the Tata Group TCS operates in 46 countries and has 199 branches across the world. TCS is the largest Indian company by market capitalization and is the largest India-based IT services company by 2013 revenues.

TATA CONSULTANCY SERVICES LTD


TCS provide a range of information technology-related products and services : Application Development Business Process Outsourcing Capacity Planning Consulting Enterprise Software Hardware Sizing Payment Processing Software Management Technology Education Services

TCS - FINANCIAL HIGHLIGHTS

Revenue: US$ 11.57 billion (FY 2012-13) Operating Income: US$ 3.12 billion (FY 2012-13) Net Profit: US$ 2.59 billion (FY 2012-13) Total Assets: US$ 9.58 billion (31-Mar-2013) Total Equity: US$ 7.66 billion (31-Mar-2013)

STEPS IN FINANCIAL FORECASTING


1.
2. 3. 4. 5. 6.

Forecast sales Project the assets needed to support sales Project internally generated funds Project outside funds needed Decide how to raise funds See effects of plan on ratios and stock price

SALES FORECASTING
Logest Growth rate in the past 5 years: 21.43% Expected growth rate in 2014 is 16% Growth rate is expected to increase to 18% and 20% in 2015 and 2016 respectively Factors aiding sales growth: Spends have increased on digital initiatives like Big Data, Cloud, Analytics, Front office transformation etc. More customer acquisition expected in next two fiscals Recovery of Economic Growth in US followed by Europe The scale up in existing customers is also happening and is adequately reflected in the higher number of accounts in bulge brackets The traction is across verticals and services and the deal signings / order book have improved with strong deal pipeline

ADDITIONAL FUND REQUIREMENT (AFN)

A*/S0: assets required to support sales; called capital intensity ratio. S: increase in sales. L*/S0: spontaneous liabilities ratio M: profit margin (Net income/sales) RR: retention ratio; percent of net income not paid as dividend.

AFN COMPUTATION

Computation of AFN of Tata Consultancy Services for the period from 2008 to 2013 using forecasted data for 2014:
2008 2009 2010 2011 2012 2013 2014 (Exp) 2015 (Exp) 2016 (Exp)

Computation of AFN

Assets % of Sales Sales Liabilities

11023.06 59.48% 18533.72 18.25

13486.62 60.20% 22401.92 40.37

15152.36 19620.61 24952.86 32725.37 37961.43 65.75% 67.02% 64.21% 67.58% 69.33%

44794.49 67.58% 66285.70 282.45

53753.38 67.58% 79542.84 406.72

23044.45 29275.41 38858.54 48426.14 56174.32 35.74 41.12 96.23 163.12 208.14

% of Sales
Profit Margin Retention ratio AFN

0.10%
24% 62%

0.18%
21% 71%

0.16%
24% 19%

0.14%
25% 58%

0.25%
26% 48%

0.34%
25% 61%

0.37%
24% 53%

0.43%
24% 53%

0.51%
24% 53%

-1077.24 -2995.29673 2719.037 700.8245 -28.7822 -2096.43 -477.7545 319.859069

20 March 2014

THANK YOU

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