Financial Analysis

Of

ITC Limited A

Project Report

Presented to

Dr. Ashwin Modi

Faculty Member

S.K School of Business Management,

Hemachandracharya North Gujarat University

On

September, 2014

In partial fulfillment of the requirement for the Managerial

Accouting-1 Course in the Master of Business

Administration Program

By: 1).BAROT RAVI .B 2).PRAJAPATI KULDIP.J

(Roll No.2) (Roll No.42)

1

EXECUTIVE SUMMERYOur Financial Analysis project is on “ITC Limited” Main Object of this project is to know the financial strengths and weaknesses of ITC Limited. For that we had references the five conclusive year’s annual reports from 2010 to 2014. In addition to these annual report of ITC Ltd. I had also used books and various web based information to cover the current trends of the company and its competitors, as well as whole industry. To analyze the firm, we have used various calculation based ratios and also study some other statements like Balance Sheet, P &L Account, DU Pont chart etc.We are analyzing the annual report of “ITC Limited” For last five years. The project presents the details of financial position of company. We are required to prepare this project report to develop the financial analysis and interpretation skill. The project enables us interact with the Real Corporation, real economy and real word’s problem. Mere a study of annual report doesn’t provide full information of firm. Comprehensive study of various financial aspects requires covering other statement also. The purpose of annual report is to shareholders, investors and creditors only. It doesn’t focus on internal accounting and situation business.A prospective manager’s work is to get data, pit them in to logical order, analyze and derive correct decision from the data. So a potential manager must have an ability to analyze, interpret and derived optimal solution of the problem. To prepare various statements do not mean we are on path but the task is to decision making and forward.

2

PREFACE

We had decided to prepare the project report on “ITC Limited” Under the subject of “managerial Accounting.”By preparing the project report we can understand the original scenario. Generally we have prepared this project report purely based on annual report of company.The following report by our sincere effort including all the possible aspect of TLC Limited Company, we invite helpful recommendations or suggestions that well further enrich our knowledge regarding the subject.

S.K SHOOL OF BUSINESS MANAGEMENT,Hemchandracharya North Gujarat University,Patan.

Date: September 30,2014Place: Patan

3

AKNOWLEDGEMENT

“Quality is never as Accident ...........” At this moment of us substantial enhancemant, we hardly inough words to express our gratitude towards those who were constantly involve with us during this project. With a sence who provid halp and guidance to make thi project successfuly.First of all, our heartfelt thank to Dr.Ashawin Modi, who helped us in every possible manner .He ensured a proper environment to work in. He allowed complete freedon to complete our work. He also ensured that we meet all those people who could make us understand the systen. We also thanks to all the members for their selfless co-operation and help for complete this project. The opportunity to study and work here added a lot of knowledge, experience and confidence.From bottom of our heart we thank to all faculty members of S.K. School of Business Management, Patan for providing guidance and help to complete this project. We thank for their active involvement in the project. They always with us when we needed any type of guidance. Their guidance and inspiration changed this project into a fruitful and meaning exercise.At the last but not least,our special thanks also to all those whose names have noted appeared here but whose contrivutions have noted gone unnoticed.

4

CONTENTSCh.No Sub.Point Contents Page No.

Executive SummaryPrefaceAcknowledgement

1 introduction of company 11.1 History 21.2 Nature of Business 71.3 Product Profile 81.4 Background 81.5 Registrar's Directors 101.6 Board of Directors 111.7 Auditors 121.8 Share pattern 13

2 Analysis of Balance Sheet 152.1 Balance Sheet 162.2 Trend Analysis of Balance Sheet 172.3 Vertical Analysis of Balance Sheet 232.4 Horizontal Analysis of Balance Sheet 28

3 Analysis of Profit & Loss Account 303.1 Profit & Loss Account 313.2 Trend Analysis of Profit & Loss A/c 333.3 Vertical Analysis of Profit & Loss A/c 373.4 Horizontal Analysis of P&L A/c 40

4 Analysis of Cash Flow Statement 414.1 Cash Flow Statement 42

5 Ratio Analysis 455.1 Liquidity Ratio 475.2 Profitability Ratio 515.3 Assets Turn Over Ratio 575.4 Financial Struchar Ratios 65

5

5.5 Valuation Ration 706 Du Point Analysis 75

6.1 Du Point Chart 767 Recommendations & Suggestions 798 Technical Analysis 90

6

LIST OF TABLESr.No Graps No. Graphs Page No.1 1.8 share Holding Pattern 14

2 2.1 Statement of balance Sheet 16

3 2.2 Tread Statement of Balance Sheet 17

4 2.3 Vertical Statement of Balance Sheet 23

5 2.4 Horizontal Analysis 28

6 3.1 Statement of Profit & loss Account 31

7 3.2 Tread Statement of Profit & Loss Account 33

8 3.3 Vertical Statement of Profit & loss Account 37

9 3.4 Horizontal Statement of Profit & loss Account 40

10 4.1 Cash flow statement 42

11 5.1.1 Current Ratio 47

12 5.1.2 Quick Ratio 49

13 5.1.3 Net Working Capital 50

14 5.2.1 Gross Profit ratio 51

15 5.2.2 Operating Profit Ratio 52

16 5.2.3 Net Profit Ratio 53

17 5.2.4 Rate of Return On Investment 54

18 5.2.5 Rate of Return On Equity 56

19 5.3.1 Total Assets Turn Over Ratio 58

20 5.3.2 Net Fixed Assets Turn Over 59

21 5.3.3 Inventory turn over 60

22 5.3.4 Average Age of Inventories 60

23 5.3.5 Debtors Turn Over 62

24 5.3.5 Average Age Of Debtors 63

25 5.4.1 Equity Ratio 66

26 5.4.2 Debt Ratio 67

27 5.4.3 Dept Equity Ratio 67

28 5.4.4 Interest Coverage Ratio 69

29 5.5.1 Earning Per Share(EPC) 71

30 5.5.2 Dividend Pay Out Ratio 71

31 5.5.3 Dividend Yield ratio 73

32 5.5.4 P/E ratio 74

33 6.1 Du Point Chart 76

7

LIST OF GRAPH AND DIAGRAMSSr.No. Graph No. Graph Name Page No.1 1.8 Share holding pattern 142 2.1 Balance sheet 163 2.2 Trend Analysis of Balance sheet 174 2.2.1 Share capital 185 2.2.2 Total reserve 186 2.2.3 Secure loan 197 2.2.4 Unsecure loan 208 2.2.6 Investment 229 2.3 Vertical Analysis of Balance sheet 2310 2.4 Horizontal balance sheet analysis 2811 3.1 P & L statement 3112 3.2 Trend analysis of p & l statement 3313 3.2.1 Income 3314 3.2.2 Total expenditure 3415 3.2.3 Profit before tax 3516 3.2.4 Profit after tax 3617 3.3 Vertical analysis of p & l statement 3718 3.3.1 Total revenue 3719 3.3.2 Total expenditure 3820 3.3.3 Profit before tax 3821 3.3.4 Profit available for Appropriation 3922 3.4 Horizontal Analysis 4023 4.1 Cash flow statement 4224 5.1 Liquidity ratio 4725 5.1.1 Current ratio 4726 5.1.2 Quick Ratio 4927 5.1.3 Net working capital 5028 5.2.1 Gross profit ratio 5129 5.2.2 Operating profit ratio 5230 5.2.3 Net profit ratio 5331 5.2.4 Rate of return on investment (ROI) 5432 5.2.5 Rate of return on equity (ROE) 5633 5.3.1 Total assets turn over ratio 5834 5.3.2 Net fixed assets turn over ratio 5935 5.3.3 Debtors turnover ratio 6236 5.4.1 Equity ratio 6637 5.4.2 Debt ratio 6738 5.4.3 Debt-Equity ratio 6739 5.4.4 Interest coverage ratio 6940 5.5.1 Earnings per share 71

8

41 5.5.2 Dividend per share 7142 5.5.3 Dividend Yield ratio 7343 5.5.4 P/E Ratio 7444 6.1 Du-Point Chart 76

9

CHAPTER: 1.

Introduction of Company

1.1 History

1.1.1 General Information

1.1.2 Milestone

1.2 Nature of Business

1.3 Product Profile

1.4 Background

1.5 Registrar Details

1.6 Board of Directors

1.7 Auditors

1.8 Share Pattern

10

1.1 HISTORY

1.1.1 General information

ITC Ltd (ITC) was incorporated on August 24, 1910, under the name Imperial Tobacco Company of India Ltd. to make cigarettes and tobacco. In 1975, the company entered the hospitality business with the acquisition of ITC-Welcome group Hotel Chula. the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'.ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 14 billion and a turnover of over $ 5 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week.ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented.ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners ( $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively

11

create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach.ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides IT services and solutions to leading global customers. ITC Infotech has carved a niche for itself by addressing customer challenges through innovative IT solutions.Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'.Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company.ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house.In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chula'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. ITC chose the hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India.ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose,

12

Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Inizio, the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme). Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008.

1.1.2 Mile Stone

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'

In 1975 through its acquisition of a hotel in Chennai , the company launched its hotel business by the name 'ITC-Welcomgroup Hotel Chula'.

In 1979 it entered into manufacturing paperboards, packaging & printing business.

In 1985 it set up Surya Tobacco Co. in Nepal, now a subsidiary of ITC.

In 1990 ITC set up the Agri Business Division for export of agri-commodities based on partnership with farmers, for revolutionizing the rural agricultural sector.

In 2000, ITC launched a line of greeting cards under the brand name ‘Expressions’. There has been further extension in productline with introduction of gift wrappers, autograph books slam books and stationery.

13

In 2000, it entered in lifestyle retailing business with the Wills Sport, a range of international quality wear for men and women.

ITC InfoTech India was set up in 2000 to provide outsourcing solutions to manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and media & entertainment.

ITC entered food business in 2001, its product line in this segment consist of brands 'Kitchens of India', ‘Aashirvaad atta’, ‘Candyman’, ‘Sunfeast’ & ‘Bingo!’.

In 2002 it entered in marketing of matches, ITC now markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro.

In 2003 ITC's forayed into the marketing of Agarbattis (incense sticks), creating brands like Mangaldeep, Spriha, Aim Metro and so on.

ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005.

The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008.

In 2013- ITC Hotels tied up with RP Group Hotels & Resorts to manage 5 hotels in India and Dubai, under ITC Hotels’ 5-star ‘WelcomHotel’ brand and the group’s mid-market to upscale ‘Fortune’ brand.

Chairman Mr. Y C Deveshwar was presented the Lakshmipat Singhania-IIM Lucknow National Leadership Award by Shri M Hamid Ansari, Hon'ble Vice President of India.

ITC’s Chief Financial Officer, Mr Rajiv Tandon, was ranked the ‘Best Overall CFO’ at the ‘Business Today-Yes Bank Best CFO Awards 2013’. He was also declared the winner in the category of ‘Sustained Wealth Creation (large companies)’.

ITC was ranked 3rd in Corporate Reputation among 40 leading companies in the Nielsen Corporate Image Monitor 2013-14. ITC was also perceived to be the ‘Company most active in CSR' for the third year in a row.

14

1.1.3 Future Prospects

As a Company deeply rooted in India's soil, ITC is inspired by the opportunity to serve a larger national purpose and create enduring value for its stakeholders. This abiding vision has spurred innovation, creativity and vitality to ensure a substantial and growing contribution to the Indian Economy, whilst simultaneously contributing significantly to enhancing environmental capital and sustainable livelihoods.

ITC’s unique and multi-faceted enterprise strengths including deep consumer insights, brand building capability, cutting-edge Research & Development, globally benchmarked manufacturing infrastructure, agri-sourcing advantages and extensive rural linkages, trade marketing & distribution network, committedand competent human resources, constitute a robust and formidable foundation that has enabled the Company to create multiple drivers of growth in itschosen portfolio of businesses that spans FMCG, Hotels, Paperboards and Packaging, Agri-Business and Information Technology. These enterprise strengths coupled with the opportunities arising out of rising disposable incomes, urbanization, a favorable demographic dividend and growth in rural areas provide competitiveness to ITC’s strategy of creating enduring value for its stakeholders and the nation. ITC continues to blend its diverse competenciesresiding in various businesses to enhance the competitive power of the portfolio and position each business to attain leadership on the strength ofworld-class standards in quality and costs. The Company has also crafted an effective strategy of organization and governance processes to not onlyenable focus on each business but also harness the diversity of its portfolio to create unique sources of competitive advantage. ITC’s Foods business, for example, gains competitive advantage from enterprise synergies existing in ITCe-Chou pal’s agri-sourcing capabilities, cuisine expertise of its Hotels business, brand building capabilities, in-house packaging competencies as wellas an unmatched distribution network

1.2 Nature Of BusinessAs a Company deeply rooted in India's soil, ITC is inspired by the opportunity to serve a larger nationalpurpose and create enduring value for its stakeholders. This abiding vision has spurred innovation,creativity and vitality to ensure a substantial

15

and growing contribution to the Indian Economy, whilstsimultaneously contributing significantly to enhancing environmental capital and sustainable livelihoods.The Company’s strategic intent to create enduring value by investing in new engines of growth is powered by itsstrong and competitive capabilities in R&D, innovation and technology and an array of institutional strengths includingdeep consumer insights, brand building capability, trade marketing and distribution infrastructure, focus on qualityand world-class manufacturing practices, strong rural linkages and outstanding human resources.ITC endeavours to embed the principles of sustainability, as far as practicable, into the various stages of product or service life-cycle, including procurement of raw material/service, manufacturing of product or delivery of service, transportation of raw materials and finished goods, and disposal by consumers. The Board approved policy on “Life-cycle Sustainability” details the Company’s approach in this respect. Further details on this Policy can be accessed from the ITC portal – www.itcportal.com and will be available in the ITC Sustainability Report 2014. Delivering best-in-class quality of goods and services forms the bedrock of ITC’s pursuit of sustainable value creation. This commitment to excellence in quality is manifest in its portfolio of world-class brands, and is driven by unwavering attention to efficiency of design, processes, sourcing and distribution in order to provide superior and differentiated offerings to customers.

1.3 Product ProfileBusinesses Products / Services

FMCG: Branded Packaged Foods Businesses (Bakery and Confectionery Foods; Snack Foods; Staples, Spices and Ready to Eat Foods); Apparel; Education and Stationery

16

Products; Personal Care Products; Safety Matches and Agarbattis; Cigarettes, Cigars, Smoking Mixtures etc.

Hotels: Hoteliering.

Paperboards, Paper & Packaging: Paperboards, Paper including Specialty Papers & Packaging including Flexibles.

Agri Business: Agri-commodities such as soya, spices, coffee and leaf tobacco.

Locations where business activities The Company’s businesses and operations are spreadare undertaken by the Company: across the country. Details of plant locations, hotels owned / operated by the Company, stores etc. are provided in the section, ‘Report on Corporate Governance’, in the Report and Accounts.

Markets served by the Company: ITC’s products and services have a national presence and many products are exported to a numb countries.

1.4 Background

LISTING DETAILS

Corporate Identity Number (CIN) L16005WB1910PLC001985

of the Company:

Name of the Company: ITC Limited

Address of the Registered Office: Virginia House, 37 J L Nehru

Road, Kolkata 700 071

Website: www.itcportal.com

17

E-mail id: ccd@itc.

BSE Code 500875

NSE Symbol ITC

ISIN NO INE154A01025

Face Value 1

Listing BSE,NSE,Kolkata

BSE Group A

Indices SENSEX, BSE100, BSE200, BSE500,

BSEFMC, GREENEX, CARBONEX ,

NIFTY, CNX500, CNX100,CNXFMCG,

CNXCONSUMP, CNXDIVOPPT,

CNXLOWVOL, NI15

Contact detailsAddress Virginia House,37 Jawaharlal Nehru

Road, Kolkata,West Bengal-700071 .

Phone No 91-033-22889371/22886426

/22880034 (Phone)

Fax 91-033-22882358 (Fax)

Email ID isc@itc.in

Website www.itcportal.com

18

1.5 Register’s Details

Registrar ITC Ltd.

Registrar's Office Virginia House,37 Jawaharlal Nehru

Road, ,Kolkata 700071

Registrar Phone 033-2288 9371 / 2288 6426 / 2288

0034 (Phone)

Registrar Fax 033-2288 2358 (Fax)

Registrar Email Id isc@itc.in

Registrar Website www.itcportal.com

1.6 Board of Directors

Chairman:Yogesh Chander DeveshwarNakul Anand

19

Pradeep Vasant DhobaleKurush Noshir Grant

Executive Directors:Anil BaijalAngara Venkata Girija KumarSerajul Haq KhanRobert Earl LerwillSuryakant Balkrishna MainakSunil Behari MathurPillappakkam Bahukutumbi RamanujamSahibzada Syed Habib-ur-RehmanAnthony RuysMeera ShankarKrishnamoorthy Vaidyanath

Non-Executive Directors:Corporate ManagementCommittee

Executive Directors:Y C Deveshwar ChairmanN Anand MemberP V Dhobale MemberK N Grant MemberExecutivesA Nayak MemberT V Ramaswamy MemberS Sivakumar MemberK S Suresh MemberR Tandon MemberB B Chatterjee Member & Secretary

Chief Financial Officer:Rajiv Tandon

Executive Vice President & Company Secretary:20

Biswa Behari Chatterjee

General Counsel:Kannadiputhur Sundararaman Suresh

1.7 Auditors

M/s. Deloittee Haskins & Sells, Chartered Accountant, the Statutory Auditors of the company retire at the ensuring Annual General Meeting and ate eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 224(1B) of the company Act,1956. Observations Made in the Auditors Report are self-explanatory and therefore, do not call for any further comment.

1.8 Share PatternTabal1.8No. of %

S

21

(A)Institutional Shareholding No. of Shares held %

Financial Institutions, Insurance Companies, Mutual Funds and Banks

2,75,77,23,494 34.68

Foreign Institutional Investors 1,53,21,06,319 19.26Sub-Total (A) 4,28,98,29,813 53.94(B)Non-Institutional ShareholdingForeign Companies 2,41,35,09,216 30.35NRIs, Foreign Nationals and Qualified Foreign Investment

4,24,31,363 0.53

Bodies Corporate 35,40,95,975 4.45Public and Others 83,25,34,963 10.47Sub-Total (B) 3,64,25,71,517 45.80Public Shareholding (A+ B) 7,93,24,01,330 99.74Shares underlying Global Depository Receipts

2,07,81,620 0.26

Total 7,95,31,82,950 100.00

1.8 Share holding pattern

22

Institutional Shareholding:- 53.94

Non-Institutional Shareholding:- 45.80

Shares underlying Global Depository Receipts:- 0.26

Interpretation: As we can see, total Institutional Shareholding has 53.94% shares out of the company’s total share capital and Non-Institutional Shareholding has a 45.80% share and a Shares underlying Global Depository Receipts has a 0.26% share. And we can says that company is controlling by the their well educated and specialist management so company giving good dividend on share.

23

Chapter:2

Analysis of Balance Sheet

2.1 Balance Sheet 2.2 Trend Analysis 2.3 Vertical Analysis 2.4 Horizontal Analysis

2.1 Balance Sheet24

Balance Sheet of Torrent Power Limited From March-2010 toMarch-2014.Table 2.1

Year End 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014SOURCE OF FUNDShareholder’s FundsShare capital 381.82 773.81 781.84 790.18 795.32Total Reserve 13682.56 15179.46 18010.05 21497.67 25466.70

14064.38 15953.27 18791.89 22287.85 26262.02Loan FundSecured Loan - 1.94 77.32 66.40 51.00Unsecured Loan 107.71 97.26 1.77 - 0.14Deferred Tax-Net 785.01 801.85 872.72 1203.72 1296.96

14957.10 16854.32 19743.07 23557.97 27610.12APPLICATION OF FUNDSFixed AssetsGross Block 11967.86 12765.82 16072.58 18061.18 20448.54Less Depreciation 3825.46 4420.75 4819.66 5469.83 6226.91Net Block 8142.40 8345.07 11252.92 9529.83 14221.63Capital Work in Process 1008.99 1333.40 2269.26 1472.80 2272.94

9151.39 9678.47 13522.18 11002.63 16494.57Investment 5726.87 5554.66 6316.59 7060.29 8823.43Current Assets, Loan and AdvancesInventories 4549.07 5267.53 5637.83 6600.20 7359.54Sundry Debtors(Debtors) 858.80 907.62 986.02 1163.34 2165.36Cash and Bank 1126.28 2243.24 2818.93 3615.00 3289.37Other Current Assets 288.39 347.49 136.89 641.36 1019.69Loans and Advances 1304.54 1418.09 1694.02 2240.11 2263.53

8127.08 10183.97 11273.69 14260.01 16097.49Less: Current Liabilities and ProvisionsCurrent Liabilities 3498.30 4457.94 3386.79 3531.73 3636.97Provisions 4549.94 4104.84 4411.07 5258.75 5994.71

8048.24 8562.78 7797.86 8790.48 9631.68Net Current Assets 78.84 1621.19 3475.83 5469.53 6465.81

14957.10 16854.32 19743.07 23557.97 27610.12

2.2 TREND ANALYSIS OF BALANCE SHEETTable 2.2

25

Year End 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014SOURCE OF FUND

Shareholder’s FundsShare capital 100.00 202.66 101.04 101.07 100.65Total Reserve 100.00 110.94 118.65 119.36 118.46

113.43 117.79 118.60 117.83Loan FundSecured Loan 100.00 - 3985.57 85.88 76.81Unsecured Loan 100.00 90.30 1.82 - 0.13Deferred Tax-Net 100.00 102.15 108.84 137.92 107.74

112.68 117.14 119.32 177.20APPLICATION OF FUNDSFixed AssetsGross Block 100.00 106.67 125.90 112.37 113.22Less Depreciation 100.00 115.56 109.02 113.49 113.84Net Block 100.00 102.50 134.85 84.69 149.23Capital Work in Process 100.00 132.15 170.19 64.90 154.33

105.76 139.71 81.37 149.91Investment 100.00 96.99 113.72 111.77 124.97Current Assets, Loan and AdvancesInventories 100.00 115.79 107.03 117.07 111.51Sundry Debtors(Debtors) 100.00 105.68 108.63 117.98 186.13Cash and Bank 100.00 199.17 125.66 128.24 90.99Other Current Assets 100.00 120.49 39.40 456.52 158.99Loans and Advances 100.00 108.70 119.46 132.23 101.05

125.30 110.70 126.49 112.86Less: Current Liabilities and ProvisionsCurrent Liabilities 100.00 127.43 75.97 104.28 102.98Provisions 100.00 90.22 107.46 119.22 113.99

106.39 91.07 112.73 109.57Net Current Assets 100.00 2056.30 214.40 157.36 118.22

Tootle

2.2.1 Share Capital

26

Interpretation:share capital contribution to the total fund has constant same from last three year. In only 2011 not same.company not issuing any more shares to increase share capital from last three year.So we can say that company should maintain it in a good position to meet its future requirements.

2.2.2 Total Reserve

27

Interpretation:Total Reserve contribution to the total fund has to be constant increasing from 2009-10 To 2012-13 but 2013-14 decreasing.company is good in position to expand their business and Come out company’s debts.WE can see, company has good reserve for surviving in future situation .

2.2.3 Secured Loan

28

Interpretation:Secured loan have been increasing in year 2011-12 and then after it is more decreasing.It shown to be company used it more in the recession time to recovers its profit and position.

2.2.4 Unsecured Loan

Interpretation:Hear we can see that from 2009-10 company was decreasing their Unsecured Loan. And it shown decreasing more in two year. It shown to be good that the company has decreasing their debts.But in the current year company decreasing. It is sing not good credit and financial position but for long run it will good for company.

29

2.2.5 Capital Work in Process

Interpretation: Capital work in Process is increasing or after decreasing and remain in current year at good level Capital in process is more it good for company decrease their capital in compare last four years

30

2.2.6 Investment

Interpretation: By seeing in the above graph it is Proved to be that the company invests high in years 2013-14 compared to the all previous years because of recession time the company need to recover its profit by outside income .interest achieving it by investing more in the profitability areas.

31

2.3 Vertical Anal Isis Of Balance-SheetTable 2.3

Year End 2009-2010 2010- 2011-2012 2012-2013 2013-2014SOURCE OF FUNDShareholder’s FundsShare capital 2.55276758

24.591167131

3.960073079

3.354193931

2.880538006Total Reserve 91.4786957

490.06272576

91.22213516

91.25433983

92.23683294.03146332

94.65389289

95.18220824

94.60853376

95.11737001Loan Fund

Secured Loan 0 0.011510402

0.391631089

0.281857902

0.18471488Unsecured Loan 0.72012622

80.577062735

0.008965171

0 0.00050706Deferred Tax-Net 5.24841045

44.757533973

4.420386495

5.109608341

4.697408052100 100 100 100 100

APPLICATION OF FUNDSFixed Assets 80.0145750

275.74212427

81.40871708

76.66696239

74.06175707Gross Block 25.5762146

426.22918041

24.41190757

23.21859651

22.55299868Less Depreciation 54.4383603

849.51294386

56.99680951

40.45267907

51.50875838Net Block 6.74589325

57.911324812

11.49395712

6.251812019

8.232271356Capital Work in Process 61.1842536

357.42426867

68.49076663

46.70449109

59.7410297438.2886388

432.95689176

31.99396041

29.96985733

31.95723162Investment

Current Assets, Loan and Advances 30.41411771

31.25329292

28.55599458

28.01684525

26.65522642Inventories 5.74175475

25.385088215

4.994258745

4.938201382

7.842631615Sundry Debtors(Debtors) 7.53006933

213.30958472

14.27807327

15.34512524

11.91363891Cash and Bank 1.92811440

72.061726608

0.693357213

2.722475663

3.693174821Other Current Assets 8.72187790

48.413807261

8.580327173

9.508926278

8.198189649Loans and Advances 54.3359341 60.423499

7357.10201098

60.53157382

58.30286141

Less: Current Liabilities and Provisions 23.38889223

26.44983601

17.15432301

14.99165675

13.17259758Current Liabilities 30.4199343

524.35482416

22.34237127

22.32259401

21.7120027Provisions 53.8088265

850.80466017

39.49669428

37.31425076

34.884600280.52710752

89.618839562

17.6053167 23.21732305

23.41826113Net Current Assets 100 100 100 100 100

32

2.3.1 Share Capital

Interpretation: share capital contribution to the total fund has to be increased in year 2011 to compare 2010.But after year 2011 Share capital decreased to year 2014.The company should maintain it in a good poison to meet its future requirements and also to recover its loser in the current depression situation.

2.3.2 Total Reserve

33

Interpretation:As per the above details we can see here that the reserves are decreased in year 2011 to compare 2010. Constantly increased in 2012 to 2014.The Company should maintain it because it will helps to the company to carry on its business in recession time also.

2.3.3 Secured Loan

Interpretation:Secured loan is increased very more in year 2012 to compare last 2 year. And 2013-14 decreased to compare 2012.It shows that the company not uses it on the basis of changes occurred in the market like current position of the market is being a recession period so, they have to increased its loan by securing or mortgaging the items.

34

2.3.4 Unsecured Loan

Interpretation:As shown above chart unsecured loan who high in the year 2010 and after decreging year by year constantly it shows company better position company should reduce their debts or short turn loans and create more cash show company in good position to decrease the unsecured loan

2.3.5 Investment

35

Interpretation:As seen above Graph an investment who high in 2011 and after decreasing constantly to 2014 it’s create bed reputation in market and company have not more investment so in emergency company loss his business and it not good sign

for the company.

2.4 Horizontal Analysis Of Balance Sheet.

36

Table 2.4Year End 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

SOURCE OF FUND

Shareholder’s FundsShare capital 100 102.66 1.03 1.06 0.65Total Reserve 100 10.94 18.64 19.36 18.46

100 13.43 17.79 18.6 17.83

Loan FundSecured Loan 100 0 38.85 -14.12 -23.19Unsecured Loan 100 -9.7 -98.18 0 0Deferred Tax-Net 100 2.14 8.83 37.92 7.74

100 12.68 17.13 19.32 17.2

Interpretation:

Total reserve contribution to the total fund has to be decreasing in 2013-14 but not decreasing more as compare to last year We can see, company has good reserve for surviving in future situation.

Secured loan have been decreased for successive years it shown to be that company used its capital to recover its profit and potion.

2.4 Horizontal Analysis Of Balance sheet37

Table 2.4.2Year End 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

APPLICATION OF FUNDS

Fixed AssetsGross Block 100 6.66 25.9 12.37 13.21Less Depreciation 100 15.56 9.02 13.48 13.84Net Block 100 2.48 34.84 -15.31 49.23Capital Work in Process 100 32.15 70.18 -35.09 54.32

100 5.75 39.71 -18.63 49.91Investment 100 -3 13.71 11.77 24.97

Current Assets, Loan and AdvancesInventories 100 15.79 7.02 17.06 11.5Sundry Debtors(Debtors) 100 5.68 8.63 17.98 86.13Cash and Bank 100 99.17 25.66 28.24 -0.9Other Current Assets 100 20.49 -60.6 36.85 58.98Loans and Advances 100 8.7 19.45 32.23 1.04

100 25.3 10.7 26.48 12.88

Less: Current Liabilities and ProvisionsCurrent Liabilities 100 27.43 -24.02 4.27 2.97Provisions 100 -9.78 7.46 19.21 13.99

100 6.39 -8.93 12.72 9.56Net Current Assets 100 19.56 114.39 57.35 18.21

100 12.68 17.13 19.32 17.2

Interpretation:

Here we can see that in compare of year 2010-11 company’s assets increasing more as compare to last five year. Its means company is performing well to increasing their assets in currents yearCompany investment decreasing in current year as compare to last year

38

Chapter: 3

PROFIT AND LOSS STATEMENT

3.1 PROFIT AND LOSS STATEMENT

3.2 TREND ANALYSIS

3.3 VERTICAL ANALYSIS

3.4 HORIZONTAL ANALYSIS

3.1 Profit & Loss Statement39

P & L Statement of ITC Limited from March-2010 to March-2014.

Table 3.1

2010 2011 2012 2013 2014Gross Income 26862.98 31423.23 36072.59 43044.21 48175.8

Net IncomeGross Sales 26259.6 30604.39 34871.86 41809.82 46712.62Lees:excise Duties and Taxes on Sales of Services

8106.41 9436.81 10073.43 12204.24 13830.06

Net Sales 18153.19 21167.58 24798.43 29605.58 32882.56Other Income 603.38 818.84 1174.37 1234.39 1463.18

18756.57 21986.42 25972.8 30839.97 34345.74Expenditure

Raw Materials etc. 6971.4 8126.5 7660.91 8936.21 10263.28change in inventories of finished goods,Work-in-capital

270.55 65.59 246.35 128.41

Employ benefits Expense 1140.02 1265.41 1387.01 1608.37Finance costs 68.38 77.92 86.47 2.95Depreciation 608.71 655.99 655.99 795.56 899.92Other Expenses 4745.52 5427.26 5820.97 6019.05Manufacturing,Selling etc.Expenses

5161.15 5935.77 2037.21 3375.92 3021.47

12741.26 14718.26 17101.63 20155.79 21686.63ProfitProfit Before Taxation 6015.31 7268.16 8897.53 10684.18 12659.11Provision for Taxation 1954.31 2280.55 2679.66 2989.06 3873.9Profit after Taxation 4061 4987.61 6217.87 7695.12 8785.21Profit Brought Forward 858.14 61.31 70.87 331 82.77Available for appropriation 4919.14 5048.92 6288.74 8026.12 8867.98

AppropriationsGeneral Reserve 406.1 498.76 1651.62 2143.24 3340.76Proposed Dividend Ordinary Dividend 1718.18 2166.68 3518.29 4148.46 4771.91Income Tax on Proposed Dividend Current Year 634.15 558.62 570.75 705.03 810.99Earlier Year's proposed Dividend -0.6 -0.6 (0.59 (0.61 28.68Profit Carried Forward 61.31 548.67 548.67 430.07

4919.14 5048.92 6288.74 8026.12 8867.98Earnings Per Share (Face Value Re.1.00 each)

40

Basic Rs.10.73 Rs.6.49 Rs7.93 Rs9.45 Rs11.09 Diluted Rs.10.62 Rs.6.41 Rs7.84 Rs9.33 Rs11.96

3.2 Trend Analysis of P & L Statement41

Table 3.2

Particulars 2010 2011 2012 2013 2014

Total revenue 100 117.2198328 118.1311009 118.739489 15.62209764

Total expenses 100 115.9276241 115.6027769 136.4584744 146.822548

Profit before tax 100 120.827688 122.417916 146.9997909 174.1721426

Profit after tax 100 122.8172864 123.5535657 148.7363687 175.5993352

Profit available for appropriation

100 102.638266 124.5561427 158.9670662 175.6411272

3.2.1 Total revenue

Interpretation:

42

Total revenue was increased in year 2011 to year 2014 to compare base year. But in present year 2014 Total Revue is decreased very. So, we can see company is performing not well.

3.2.2 Total Expenses

Interpretation:

Hear we can see that Total expenses is increasing constantly from the 2009-2010 to the 2013-2014.

Company is performing successively decreasing their expenses and earning not

good profit constantly. It is not good for the company.

3.2.3 Profit Before Tax

43

Interpretation:

Profit before Tax has increased in the current year that in compare to base year, because optimum utilization of assets in generating sales revenue reduction in total cost, increase in market size of the company, etc. so it is good condition of the company.

3.2.4 Profit after tax

44

Interpretation:

Profit After Tax has intended to increase throughout analyzes. In the presently financial year increase in compare of the base year.

We can see that company is performing well and its Profit After Tax become a more than in compare of base years.

3.3 Vertical Analysis of P & L Statement

45

Table 3.3

Particulars 2014 2013 2012 2011 2010

Total revenue 15.62 118.73 118.13 117.21 100

Total expenses 146.82 136.45 115.60 115.92 100

Profit before tax 174.17 146.99 122.41 120.82 100

Profit after tax 175.59 148.73 123.55 122.81 100

Profit available for appropriation 175.64 158.96 124.55 10ase 2.63

100

3.3.1 Total Revenue

Interpretation:

Hear we can see that Total Revenue is increased after year 2010 but in year 2014 Total Revenue is decrease.

Company is performing is good but not very well.

3.3.2 Total Expenses

46

Interpretation:-

Hear we can see that Total expenses is decreasing constantly from the 2009-2010 to the 2013-2014.Company is performing successively decreasing their expenses

and earning good profit constantly. It is good for the company.

3.3.3 Profit before tax

Interpretation:

47

Here during the analyzing the data we can see, in compare to total income, profit before tax is decreasing constantly in compare of base year.

In the year 2013-2014 Profit Before Tax is decreased, its not

3.3.4 Profit available for appropriation

Interpretation:

Hear during the analyzing the data we can see, in compare to total income, Available profit for appropriation in decreasing in year 2013 and year 2014 to compare last Three year.

It is not good for the company and their investors.

3.4 Horizontal Analysis48

Particular's 2010 2011 2012 2013 2014

Gross Income 100 16.97 14.79 19.32 11.92

Total Expenses 100 15.51 16.19 17.85 7.59

Profit Before Taxation 100 20.82 22.41 20.08 18.48

Profit after Taxation 100 22.81 24.66 23.75 14.16

Available for appropriation 100 2.63 24.55 27.62 10.48

Proposed Dividend 100 26.1 62.38 17.91 15.03

Interpretation:

Here we can see that total expenditure is decreasing on base of total income.

Expenses are decreasing more from last 4 year.

So, Company have good potion in financial year.

Here during the analyzing the data we can see , in compare to total income available profit for appropriation in decreasing in 2009-10 in compare of base year and also in current year.

49

Chapter:4

Analysis of Cash Flow Statement

4.1 Cash Flow Statement

4.1 Cash Flow Statement

Cash Flow Statement for the year 2010 to 2014.

50

Table 4.1

PARTICULARS 2010 2011 2012 2013 2014

A. Cash Flow from Operating ActivitiesPROFIT BEFORE TAX 6015.31 7268.16 8897.53 10684.18 12659.11 ADJUSTMENTS FOR :Depreciation and Amortisation Expense 608.71 655.99 77.92 795.56 899.92 Finance costs 68.38 (309.41) 86.47 2.95Interest Income (65.93) (168.58) (100.51) (355.48) (412.77)Dividend Income from Long Term Investments (77.65) (83.75) (198.40) (123.96) (217.27) Dividend Income from Current Investments (135.68) (155.53) 11.62 (186.54) (140.15) Loss on Sale of Fixed Assets – Net 30.88 24.44 (76.04) 23.73 12.95Net gain on sale of Current Investments (11.24) (54.92) (137.25) (146.02) (329.44)Gain on sale of Long Term Investments (31.70) (63.01) 9.63 (121.62) -Doubtful and Bad Debts 12.50 2.28 2.46 7.49 11.17Doubtful and Bad Advances, Loans and Deposits 11.28 2.93 5.74 0.30 0.11Excess of Carrying Cost over Fair Value of Current Investments - Net

(0.27) - - - 3.31Excess of Cost of Current Investments over Fair Value, reversed – Net

(36.93) (2.57) (12.42) (25.80) -Foreign Currency translations and transactions - Net 9.95 (10.21) (1.48) 7.36 1.76OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

6329.23 7454.78 8820.35 10645.67 12491.65ADJUSTMENTS FOR :Trade Receivables, Loans and Advances and Other Assets

(290.89) (124.96) (399.19) (421.14) (1404.10)Inventories 50.65 (720.10) (368.66) (962.37) (759.34)Trade Payables, Other Liabilities and Provisions 531.46 918.71 28106 334.08 431.29 CASH GENERATED FROM OPERATIONS 6620.45 7528.43 8333.56 9596.24 10759.50 Income Tax Paid (1989.80) (2195.74) (2317.97) (2886.35) (3797.20)NET CASH FROM OPERATING ACTIVITIES 4630.65 5332.69 6015.59 6709.89 6962.30B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets (1094.47) (1349.91) (2303.56) (2097.66) (2593.47) Sale of Fixed Assets 2.86 8.06 55.93 7.73 20.83Purchase of Current Investments (57866.98

)(68486.95) (49434.60) (69881.72

)(82231.94) Sale/Redemption of Current Investments 55449.27 68939.54 49150.72 69376.31 81327.47

Purchase of Long Term Investments from Subsidiary (387.31) - (297.16) (9.97) (1.96) Investment in Joint Ventures (147.00) (176.59) (37.88) - (1.24)Investment in Subsidiaries 66.47 (45.47) (82.30) (50.43) (85.42)Sale of Long Term Investments 77.65 (25.00) 164.61 134.44 -Dividend Income from Long Term Investments Received 133.80 103.58 100.51 123.96 217.27 Dividend Income from Current Investments Received 83.75 198.40 186.54 140.15 Interest Received 140.26 155.53 283.72 263.89 387.33

Investment in bank deposits- 141.00 698.51 (3397.39) (2817.80)

51

Redemption / Maturity of bank deposits - - - 2513.02 3125.96

Investment in deposits with financial institutions - - - (425.00) (750.00)Redemption / Maturity of bank depositswith financial institutions

- - - - 425.00 Loans Given (811.33) (239.61) (410.73) (1179.20) -Loans Realised 905.22 207.40 402.15 854.70 14.26NET CASH USED IN INVESTING ACTIVITIES (3531.56) (684.67) 2210.19 (3580.78) (2823.29)C. Cash Flow from Financing ActivitiesProceeds from issue of Share Capital 720.73 903.82 764.99 922.31 691.08 Proceeds from Long Term Borrowings 1.85 1.40 0.77 0.35 - Repayment of Long Term Borrowings (10.06) (11.85) (10.68) (10.03) (11.27)Net increase / (decrease) in Cash / Export Credit Facilities

(61.63) 1.94 (0.17) (1.77) 0.14 Interest Paid (33.52) (15.80) (16.79) (70.14) (46.35)Net increase in Statutory Restricted Accounts Balances 6.04 20.58 16.83 15.16 17.36Dividend Paid (1396.53) (3818.18) (3443.47) (3518.29) (4148.46)Income Tax on Dividend Paid (236.74) (633.55) 558.03 (570.14) (676.35)NET CASH USED IN FINANCING ACTIVITIES (1009.86) (3551.64) (3246.55) (3232.55) (4173.85)NET INCREASE IN CASH AND CASH EQUIVALENTS OPENING CASH AND CASH EQUIVALENTS

89.23 1096.38 558.85 (103.44) (34.84)OPENING CASH AND CASH EQUIVALENTS 993.70 1082.54 2178.92 259.34 155.90CLOSING CASH AND CASH EQUIVALENTS 1082.93 2178.92 2737.77 155.90 121.06

Interpretation:

: As above detail we see that the net cash from operating activity is increasing year-by-year so company’s cash increase its good shine for the company. cash from operating activity is increasing because of a profit before tax is increasing.

: In investing activity increased in 2012 and then decreased it’s create increment in cash. Inventory is decreased so the cash flow is increased and it

52

makes good shine for company. And an interest income is raised so the cash is increased.

: in the financing activity the long term borrowings is decreased so in cash increment we see. But in income tax or repayment of borrowings increased so the cash flow is decreased and it’s not good shine for the company.

53

Chapter: 5

RATIO ANALYSIS

5.1 Liquidity Ratios

5.2 Profitability Ratios

5.3 Assets Turnover Ratio

5.4 Finance Structure Ratios

5.5 Valuation Ratio

INTRODUCTION:

54

Ratio Analysis is a widely – used tool of Financial Analysis. It is defined as the

systematic Use of Ratio to interpret the financial statement so that the strength

and weakness of a firm as well as its historical performance and current financial

condition can be determined. The Ratio refers to the numerical or quantitative

relationship between two variables\items. Ratio analysis presents the financial

statement into various functional areas which highlight various aspects of the

business like inequality, Profitability, assets turn over, financial structure etc., all

these ratios are important to both categories of the suppliers of funds owners,

and outsiders. Whose interest is reflected in various valuations rations?

Thus, the integrated relationship of various functional ratios can be presented as under:

5.1 Liquidity Ratios

5.2 Profitability Ratios

5.3 Assets Turnover Ratio

5.4 Finance Structure Ratios

5.5 Valuation Ratio

55

5.1 Liquidity Ratios:

The importance of adequate Liquidity in the sense of the ability of a firm

to meet the current or short-term obligation when they become due for

payment can hardly be overstressed. In fact Liquidity is a perquisite for the very

survival of the firm. The Liquidity ratio measures the ability of the firm to meet

its short term obligation and reflect the short-term financial strength\solvency

of a firm. This ratio indicates the ability of the company to discharge the

liabilities as and when they mature.

1. Current Ratio

2. Quick Ratio

3. Net Working Capital

5.1.1 Current Ratio

Current ratio is the indication of the firm commitment to meet its short-

term liabilities. It is widely used indicator of a company’s ability to pay its debts in

short-term. The Current Ratio is the ratio of total current assets to total current

liabilities it can be calculated, by dividing current assets by current liabilities.

Current Ratio = Total Current Assets Total Current Liabilities

Where,56

The current assets of the firm represent those assets which can be in the ordinary course of business, converted in to cash within a short period of time, normally not exceeding one year. The current liabilities defined as liabilities which are short maturing obligation.

Current Assets = Inventories + Debtors + Bill Receivables +

Marketable Securities + Bank & Cash Balance +

Prepaid Expenses.

Current liability = Creditors + Bill payables + Unpaid expenses +

Provision for tax + dividend Payable + Bank over

Draft.

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Total Current Assets 8127.08 10183.97 11273.69 14260.01 16097.49

Total Current Liabilities 8048.24 8562.78 7797.86 8790.48 9631.68

Current Ratio 1.00 1.18 1.44 1.62 1.67

Interpretation: Current Ratio should be 2:1.

It is measure of company’s Liquidity i.e. how quickly company can convert assets to cash.

Here, it is 2014-1.67 highest and lovest in 2010 it is constantaly increasing so it is good for the company.

Company has higher capacity to convert its assets into cash more than required.

57

5.1.2 Quick Ratio (Liquid Ratio / Acid Test Ratio)

All Current Assets are not equally liquid. While cash is readily available to

make payments to suppliers .Debtors can be quickly converted into cash,

Inventories are two steps away from conversion into cash (sales and collection).

The quick ratio or acid test ratio is computed as a supplement to current ratio.

Theratio relates highly liquid current assets usually current assets less inventories,

to current liability.

Acid – Test Ratio = Quick Assets Quick Liabilities

Where,

Quick Assets = Current Assets – Inventories

Quick Liabilities = Current Liabilities-bank overdraft.

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Quick Assets 3578.01 4916.44 5635.86 7659.81 8737.95

Quick Liabilities 8048.24 8562.78 7797.86 8790.48 9631.68

Quick Ratio 0.44 0.57 0.72 0.87 0.90

Interpretation:

58

If Inventories are as less as possible that is good for the company. It can be measured by Quick Ratio.

Quick Ratio has decreased from 0.44 to 0.90 that is not good for the company.

5.1.3 Net Working Capital:

Net Working Capital (NWC) represents the excess of current assets over current liabilities.

Net Working Capital = Total Current Assets – Total Current Liability

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Total Current Assets 8127.08 10183.97 11273.69 14260.01 16097.49

Total Current Liabilities 8048.24 8562.78 7797.86 8790.48 9631.68

Net Working Capital 78.84 1621.19 3475.83 5469.53 6465.81

Interpretation:

Here Working Capital has been increasing compared to the last years that is

good for the company.

5.2 Profitability Ratio:

59

Profitability is measure of earning ability of the business. Profitability ratios

are generally measured in percentage based on the calculation of absolute

profit figures. Profit is a positive difference between sales and the expenses.

5.2.1 Gross Profit Ratios

5.2.2 Operating Profit Ratios

5.2.3 Net Profit Ratios

5.2.4 Rate of Return on Investment (ROI)

5.2.5 Rate of Return on Equity (ROE)

5.2.1 Gross Profit Ratio:

This Ratio expresses the relationship between gross profit and net sales. It

is a degree to which the sales price of good per unit may decline without resulting

in losses from operations to the firms. It also helps in ascertaining whether the

average percentage of mark-up and the goods in maintained. It can be calculated

as follows:

Gross Profit = Gross Profit *100

Total Sales

Where,

Gross Profit = Sales – COGS

COGS = Raw material Consumed + Labor Costs + Factory Overheads.

Particulars Year

60

2009-10 2010-11 2011-12 2012-13 2013-14

Gross Profit 19288.2 21337.87 25945.54 31485.9 34840.17

Total Sales 26259.6 30604.39 34871.86 41809.82 46712.62

Gross Profit Ratio 73.45 69.72 74.40 75.31 74.59

Interpretation:

If the ratio is high it indicates Gross Profit is high or the purchasing is

efficient alternating and vice versa.

Here the ratio is increasing from year 2010 to 2013 and decreasing 0.72

from last yare.

The highest value of the ratio is 75.31% And the lowest value is

69.72% .This is good for the company

5.2.2 Operating Ratio.

Operating Ratio is a ratio of Total Cost of Goods Sold and Total Operating

Expenses which is divided by net sales. It is calculated as follows,

Operating Ratio = Sales- Operating Expenses * 100 Net Sales

Where,

Operating Expenses = Manufacturing Expenses + Administration &

Selling Expenses + Depreciation

61

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Operating Profit 20489.74 24012.63 32178.66 37638.34 42791.23

Total Sales 26259.6 30604.39 34871.86 41809.82 46712.62

Operating Profit Ratio 78.02 78.46 92.27 90.02 91.60 Interpretation:

This ratio shows that percentage of Operating profit over Sales.

Here there is an increase in cost of operating Expenses but also increase in

sales as well as increasing in profit ratio. It is good for the company

5.2.3 Net Profit Ratio:

It is the indicator of the net margin earned on sale of Rs 100. It helps in

determining the efficiency with which affairs the business are being managed. It

can be calculated as follows.

Net Profit Ratio = Net Profit * 100 Net Sales

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Net Profit 4061 4987.61 6217.87 7695.12 8785.21

Total Sales 26259.6 30604.39 34871.86 41809.82 46712.62

Net Profit Ratio 21.65 22.68 23.94 24.95 25.58

Interpretation:

62

It measure a collecting overall profitability of business and shows efficiency

otherwise a operating the expenses over a sell.

Value of the ratio is highest in year 2013-14 i.e. 25.58% because of

decrease in the value of Net Sale.

In year 2009-10, Net Profit is 21.65%.and after increase constantaly up to

25.58%

It is not good for the company.

5.2.4 Rate of Return on Investments:

Rate of Return on Investment is term as the profit of the firm

distributed

To its Investor.

Rate of Return on Total Assets = EBIT (Earnings Before Tax and Interest) Total Assets

Where,

EBIT = Net Profit + Interest + Tax.

Total Assets = Net Fixed Assets + Investments + Net Working Capital.

63

Instead of Total Assets, Total Capital Employed is also shown as

denominator.

Total Capital employed = Owner’s Fund (Capital + Reserves – Miscellaneous

Expenses) + Long term Debt.

It should be noted that the amount of total assets and total capital

employed would be same.

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

EBIT 6015.31 7268.16 8897.53 10684.18 12659.11

Total ASSETS 14878.26 15233.13 19838.77 18062.92 25318.00

ROI 40.43 47.71 44.85 59.15 50.00

Interpretation:

The ratio shows the total profit on total investments of the company.

This ratio is very important to the shareholder.

As per this table there is an Decrease then increase in the net profit before

interest and taxes but the main important point is company pays money to

its long term loan holders and company’s reserves are more so there is an

good point of the company and they have a retain earnings is more.

64

5.2.5 Rate of Return on Equity:

Return on Equity = Earnings Available to Equity Shareholder * 100 Net Worth

Where,

Profit for the Equity = Net Profit – Preference Dividend

Net Worth = Equity Capital + Reserves – Misc. Expenses

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Profit for Equity 4919.14 5048.92 6288.74 8026.12 88867.98

Net Worth 18938.52 21002.19 25080.63 30313.97 35130

ROE 25.97 24.04 25.07 26.48 25.24

Interpretation:

Through the above calculation we can say that the rate of return on equity

ratio decreased and then increased year to year it means shareholders

earnings will decline then incline.

The main cause to decrease the value of the ratio is the decrease in the

value of the net profit for equity. This is not good for the company.

5.3 Assets Turnover Ratio.

65

Assets Turn over Ratios is basically productivity ratio which measures the output

produced from the given input deployed. This relationship is shown as under:

An asset is “Input” which is deployed to generate production (or Sales). The

same set of assets when used intensively (i.e. use of machines for three shift

instead of a single shift), Produces more output or sales. If the assets turnover is

high, it shows efficient or productive use inputs, i.e. assets.

It should be noted that in the turn over ratios,” the numerator” is always

“sales” or its variant like total sales, credit sales, cost of goods sold etc, and

denominator is always, the assets like total assets, group of assets (fixed or

current) or individual assets like inventories or debtors.

5.3.1 Total Assets Turnover

5.3.2 Net Fixed Assets Turnover

5.3.3 Net Working Capital Turnover

5.3.4 (A) Inventory Turnover

(B) Average age of Inventories

5.3.5 (A) Debtors Turnover

(B) Average age of Debtors

5.3.1 Total Assets Turnover Ratio:

66

Total Assets Turnover Ratio is shows Turnover of the company is how much percentage of total investment. It is calculated as below,

Total Assets Turnover Ratio = Total Net Sales Total Assets

Where

Total asset = Net Fixed Assets, Investments and Net Working Capital (i.e. Current

assets less current liabilities)

Interpretation:

This is a measure of the efficiency how the assets are utilized it indicates

how many times the assets Were turned over in period.

The company turnover ratio has decreased in last year it saw not

performing well in 2010. Increased more in 2013 and then after decreased

in current year.

67

Particulars Year 2009-10 2010-11 2011-12 2012-13 2013-14

Sales 26259.6 30604.39 34871.86 41809.82 46712.62Total Assets 14878.26 15233.13 19838.77 18062.92 25318.00Total Assets Turn Over Ratio 1.76 2.00 1.75 2.31 1.84

This is not good for the company.

5.3.2 Net Fixed Assets Turnover Ratio:

Net Fixed Assets Turnover Ratio is shows Turnover of the company is how

much percentage of Net Fixed Assets. It is calculated as below,

Net fixed Turnover= Sales

Net fixed assets

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Sales 26259.6 30604.39 34871.86 41809.82 46712.62

Fixed Assets 9151.39 9678.47 13522.18 11002.63 16494.57Net Fixed Assets Turn Over Ratio 2.86 3.16 2.57 3.80 2.83

Interpretation:

A net fixed asset turnover is indicates that the company’s sales over the

total fixed assets.

The net fixed asset is high at 3.80 in the year 2012-13.

Assets are almost same but sales and hence ratio has increased that is good

for the company.68

5.3.3 Net Working Capital turnover

Networking Capital Turnover = Sales

Net Working Assets

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Sales 26259.6 30604.39 34871.86 41809.82 46712.62Net Working Assets 1008.99 1333.40 2269.26 1472.80 2272.94

Net Working Capital

Turnover Ratio

26.02 22.95 15.36 28.38 20.55

Interpretation:

A net Working Capital Ratio it saw the Working Capital Turnover in times.

The net working capital is high at 28.38 in the year 2012-13.

The ratio is decrease in current yare so it not good for company.

5.3.4 (A) Inventory Turnover Ratios:This Ratio indicates the number of times inventory is replaced during the

year. It measures the relationship between the costs of goods sold and

inventory level. The ratio can be calculated in that way,

Inventory Turnover Ratios = Cost of Goods Sold Average Inventory

69

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

COGS 6971.4 9266.52 8926.32 10323.92 11871.65

Average Inventories 4549.07 4908.3 5452.68 6119.01 6979.87

Inventory Turn Over 1.53 1.88 1.63 1.68 1.70

Interpretation:

The Inventory Turnover Ratio indicates the turnover of the stock in the

company.

The high turnover ratio is high profit of the company and the vice versa.

The ratio is increases for the two consecutive years from 1.63 to 1.70 times.

This is good for the company.

5.3.4 (B) Average Age of Inventories

An Average Age of Inventory is shows that after how much period of time

its inventory is replaced and it is calculated as follow,

Average Age of Inventories = No. of Days (360) Inventory Turnover Ratio

Particulars Year

70

2009-10 2010-11 2011-12 2012-13 2013-14

No. of Days 360 360 360 360 360

Inventory Turn Over 1.53 1.88 1.63 1.68 1.70

Days 235.29 191.48 220.85 214.28 211.76

Interpretation:

This ratio indicates the waiting period of the investments in inventories and

is measured in days, week or months.

If ratio is less, good for the company and vice versa.

No. days has been decreasing that is good for the company. But it is almost

increasing in 2010 compared to current year that is good for the company.

5.3.5 (A) Debtor’s Turnover Ratio:

Debtor’s Turn over

Where,

Average Debtors = (Beginning debtors + closing debtors)/2

71

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Credit Sales 26259.6 30604.39 34871.86 41809.82 46712.62

Average Debtor 858.80 883.21 946.82 1074.68 1664.35

Debtor’s Turn over 30.57 34.65 36.83 38.90 28.06

Interpretation: This ratio measures the efficiency of a company credit and the collection

policy. This ratio shows the number of times each year a company’s

debtor’s turn into cash.

Here the ratio increased and then decreased to 28.06.It less in current yare

so it is not good for the company.

5.3.5 (B) Average Age of Debtors:

Average Age of Debtors

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

No. of Days 360 360 360 360 360

Debtor’s Turn over 30.57 34.65 36.83 38.90 28.06

Days 11.77 10.38 9.77 9.25 12.83

72

Interpretation: High average age of debtors is not good because it indicates poor

collections procedure and idle fund blocking in debtors.

The average age of debtors is compared with the credit period allowed to

the customers.

Here, we can see that the Average age has decreased and then increased in

2013-14 year.

This is not good for the company. It should be less or equal to Average days

in 2012-13.

5.4 Finance Structure Ratios

Finance structure ratio indicates the relative mix or blending of owner’s

fund and outsider’s debt funds in the total capital employed in the business. It

should be noted that equity funds are the prime fund, which increases

progressively through reinvestment of profits, while outside debt funds are 73

supplementary funds and are added at the discretion of the management.

Management prefers to choose debt only when it helps in enhancing the earning

of equity. The debt funds are used to generate ROI greater than interest costs on

debts, the equity earning is enhanced, but if the interest costs are higher than

ROI, it adversely affects the earning of owner. This ratio is popularly described as

debt equity ratio. Higher debt ratio is (I) good if ROI is greater than interest on

debts and it is (II) bad if ROI is less than interest on debts. Thus, use of debts is

considered as a “Double- Edge” weapon. Some popular finance structure ratios

are as under:

5.4.1 Equity Ratios

5.4.2 Debt Ratios

5.4.3 Debt-Equity Ratios

5.4.4 Interest Coverage Ratios

5.4.1 Equity Ratios

Where,

Net Worth = Equity Capital + Reserves – Misc. Expenses.

74

Total Capital Employed = Net Worth + Long Term Debts.

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Net Worth 18938.52 21002.19 25080.63 30313.97 35130

Total Capital Employed 19797.32 21909.81 26066.65 31477.31 37295.36

Equity Ratio 0.95 0.95 0.96 0.96 0.94

Interpretation: This ratio suggests the proportion of the Net Worth to total capital

employed. Net Worth is share plus reserves and surplus. The higher the

ratio the higher the net worth in total capital employed and vice versa.

The ratio decreases year by year because of the capital the total capital

employed increased.

It was the highest value is 0.85 in the year 2008-07.

It is decreased by 0.74 in the year 2010-09.This is not good for company.

5.4.2 Debt Ratios:

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Long Term Debt 858.80 907.62 986.02 1163.34 1165.36

Total capital Employed 19797.32 21909.81 26066.65 31477.31 37295.30

Debt Ratio 0.043 0.041 0.037 0.037 0.058

75

Debt Ratios = Long Term Debt Total Capital Employed

Analysis:

This ratio suggests the proportion of long-term debt to Total Capital

Employed. Long-term debt is a debt, which is of more than five years

and includes interest thereon. The higher the long-term the higher the

total capital employed and vice-versa.

The ratio has increased and then decreased. This is good for the

company.

5.4.3 Debt Equity Ratio:

When debt funds are used to generate ROI greater than interest cost on

debt, the equity earning is enhanced, but if the interest cost is higher than the

ROI, adversely affect the earning owners. This ratio is popularly described as

Debt-Equity Ratio. Higher debt – equity ratio is (1) good if ROI is greater than

interest on debt. Thus, use of debt (or leverage) is considered as a “Double Aged”

weapon.

76

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Total Long Term Debt 858.80 907.62 986.02 1163.34 1165.36

Net Worth 18938.52 21002.19 25080.63 30313.97 35130

Debt-Equity Ratio 0.045 0.043 0.039 0.038 0.062

Interpretation:

Debt Equity Ratio is debt to Equity. Debt means long term fund having maturity of five years or more including interest thereon.

Equity is paid up share capital plus free reserves. The higher the debt fund used in capital structure, the greater is the financial risk. This is also known as leverage ratio.

We can see that the value is increasing and decreasing.

It should be 2:1 but industry ratio is 0.8:1. Still it is higher than company’s ratio. So, company should raise the debt.

5.4.4 Interest Coverage Ratios:

This Ratio indicates the use of interest becoming debt funds in generating higher

operating profits or EBIT. Higher is the Ratio better is the utilization of the debt

funds. Higher interest coverage ratio enhances the equity earning (i.e. EBIT –

interest) is passed over to the equity finance of the capitalization. It can be

concluded as follow:

77

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

EBIT 126569 10684.18 8897.53 7268.16 6015.31

Interest 412.17 355.48 309.41 58.67 54.54

Interest Coverage Ratio 110.29 123.88 28.75 30.05 30.71

Interpretation: A high ratio implies adequate safety for payment of interest.

It decreased but in the year 2010-09 the ratio increased.

It is clearly indicates by the above calculation that interest expenses

decreases and also PBIT increase and so it implies that the debt of the

company decreases.

Thus in general we can conclude that the growth of the company is very

good

5.5 Valuation Ratios:

Valuation ratios are the result of the management of the above four categories of

the functional ratios. Valuation ratios are generally presented on a per share basis

and thus are more useful to the equity investor. The per share valuation are

popularly presented as:78

5.5.1 Earnings Per Share (EPS)

5.5.2 Dividend Pay-out Ratios (DPS)

5.5.3 Dividend Yield

5.5.4 P/E Ratio

5.5.1 Earning Per Share:

If the company has issued preference share capital then net profit for equity

share = Net Profit - Preference Dividend. In absence of the preference share

capital net profit is taken in the numerator of the below formula.

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Net Profit 4061 4987.61 6217.87 7695.12 8785.21

No. of Equity Share 381.82 773.81 781.84 790.18 795.32

EPS 10.64 6.45 7.95 9.74 11.05

Interpretation:

79

It decreased in the year 200-11 to 6.45 this is because of the no.of

equity share increased.

This provides company’s future prices. It is increases gradually and

peaks in year 2013-14 at value 11.05 this is good for the company.

5.5.2 Dividend Pay Out Ratio:

This Ratio indicates the split of EPS between cash dividend and re-investment of

profit. If the company has profitable projects, then it will prefer to keep D/P Ratio

lower, it will re- invest higher proportion of the profit in the business.

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Dividend per Share 3.67 4.93 4.40 4.45 5.22

Earnings Per Share 10.62 6.41 7.84 9.33 11.96

Dividend payout Ratio. 0.35 0.77 0.56 0.48 0.44

80

Interpretation: This ratio indicates the splits of EPS between cash dividend and reinvest at

profit.

If the company has profitable project then it will keep D/P ratio lower it will

reinvest higher proportion of project in business.

Here the company’s ratio is first increased but decreased in 2011-12 to

2013-14 continuously. That means company is reinvesting their money.

So it is good for the long term investor but not good for the short term

investor. Company may provide higher profits after long-term. It is good to

invest for long term.

5.5.3 Dividend Yield Ratio:

The dividend yield represents the current cash return to shareholders. It is

computed by dividing the Dividend per Share by the current market price per

share. The investors also earn a return from a capital gain in shares.

81

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Dividend per Share 3.67 4.93 4.40 4.45 5.22

Average market price 222 168 133 159 245

Dividend yield Ratio. 2% 2.67% 3.07% 2.79% 2.13%

Interpretation: The lowest ratio is 2% in the year 2009-10 and it is high in the year in the

2009-08 and the value is 2.67%.

Higher ratio is good for the short term investor and lower ratio is good for

the long term investor. It is good in 2010-09 for long term investor.

5.5.4 P/E Ratios:

This ratio is a popular measure extensively used in investment analysis.

It is computed by dividing a Current Market Price of a share by the annual Earning

per Share. Many view the P/E Ratio as an indicator of a firm’s growth prospects. It

is used as a device to detect mix-priced stocks. A high Price Earnings Ratio

indicates the stock market’s confidence in the company’s future earning growth.

82

Particulars Year

2009-10 2010-11 2011-12 2012-13 2013-14

Current Market Price of Share 290.22 289.55 308.12 324.84 376.65

Earnings Per Share 10.64 6.45 7.95 9.74 11.05

P/E Ratio 27.27 41.17 38.75 33.35 34.08

Interpretation: This provides company’s future price earning.

From the given chart we can see that the lowest value was achieved in the

year 2009-10 It is

With P/E ratio we can determine the price of its share in future as below.

Chapter: 683

DU-PONT ANALYSIS

6.1 DU-PONT Chart:

84

Profit Margin (%)

2010:22.90

2011:23.74

2012:25.51

2013:22.55

2014:27.09

Total Assets Turnover

2010:1.76

2011:2.00

2012:1.75

2013:2.31

2014:1.84

ROI (in %)

2010:40.43%

2011:47.71%

2012:44.85%

2013:59.15%

2014:50.00%

¿

85

EBIT

2010:6015.31

2011:7268.16

2012:8897.53

2013:10684.18

2014:12659.11

Total Sales

2010:26259.6

2011:30604.39

2012:34871.86

2013:41809.82

2014:46712.62

Sales + Non-operating Expenses

2010:18756.57

2011:21986.42

2012:25972.8

2013:30839.97

2014:34345.74

Operating Expenses

2010:12741.26

2011:14718.26

2012:17101.63

2013:20155.79

2014:21686.63

Investments

2010:5726.87

2011:5554.66

2012:6316.59

2013:7060.29

2014:8823.43

Net Working Capital

2010:78.84

2011:4321.19

2012:3475.83

2013:5469.62

2014:6465.81

Net Fixed Assets

2010:5325.93

2011:5257.72

2012:8702.52

2013:5532.8

2014:10267.66

Interpretation:

The DU-Pont chart indicates the rate of return on investments in

percentage.

The chart shows the allocation of financial performance of the company.

In the chart profit margin percentage and total assets turnover in times

86

Total Fixed Assets

2010:9151.39

2011:9678.47

2012:13522.18

2013:11002.63

2014:16494.57

Accumulated Depreciation

2010:3825.46

2011:4420.75

2012:4819.66

2013:5469.83

2014:6226.91

Total Current Assets

2010:8127.08

2011:10183.97

2012:11273.69

2013:14260.01

2014:16097.49

Current Liability + Provision

2010:8048.24

2011:5862.78

2012:7797.86

2013:8790.48

2014:9631.68

is given. ROI is the multiplication of the profit margin and total assets

turnover.

We can say from the chart that profit margin decreased and then

increased. But in the last year it increased.

The reason behind the increment of profit margin is that the EBIT of the

company increases year-by-year. And the denominator, total sales also

increase Year-by-year.

The reason behind the increment or decreasing in the total Assets

Turnover ratio is that the minor differences of Net Working Capital and

Investment both are increase and decrease in simultaneously every

year.

Chapter: 7

Recommendations and Suggestions

By analyzing the annual report of the company we can conclude that,

87

From the Liquidity Ratio we can recommend that the Liquidity of the

company is Very Good.

The Current ratio increases every year. The Current Assets should be at

least twice the Current Liabilities for a comfortable liquid position. But here

it more than 2 to 3 times, which very good.

By the profitability ratio we can conclude that the profit of the company

decreased and then increased but it is slightly increment.

But the Operating profit of the company is decreasing, so company should

try to reduce its Operating Cost by controlling the expenses of Raw material

consumption as well as the selling, Distribution, and Administration and

other expenses.

Here we can see that interest to be paid has been cut very well, which is

good for the company in the future.

Here from the analysis we can say that the company is not going to spread

its business because not considerable increase in the investment has been

found

CHAPTER: 8

88

Technical Analysis

Of

ITC Limited

Technical Analysis and Charts of ITC Ltd

Sector Share Price

Price Change

Previous Close

Beta Average Volume

NSE Code

BSE Code BSE Index

NSE Index

Futures and options

Itc limited 364.10 -7.60 / -2.04%

371.70 0.46 5919.60 K ITC 500875 BSE 30 Nifty 50

Yes F&O list

89

Pivot Point - Intra-Day Support & Resistance

Pivot Point

Support1 Support2 Support3 Resistance1 Resistance2 Resistance3 What is Pivot Point

Pivot Point of other Stocks

366.28 360.37 356.63 350.72 370.02 375.93 379.67 Learn Pivot Point

Pivot Point List

90

91

Oscillators & Volume Indicators

Name Value

Stochastic D Fast 78.17

Stochastic K Fast 65.71

Stochastic D Slow 79.95

Relative Strength Index (RSI) (14 day) 63.31

Williams %R -34.29

Rate of Change 3.31

Price Volume Trend 12431200.00

Money Flow Index 61.85

Aroon Up 0.00

Aroon Down 44.00

Ultimate Oscillator 57.32

Average True Range 7.29

On Balance Volume 1089330000.00

Accumulation Distribution 200774000.00

92

Indicators For I T C Ltd.

Name Value

MACD (26d ,12d) 1.09

Signal Line -0.42

Macd Above Signal Line True

Macd/Signal Line trend days 4

Macd Above Zero Line True

Macd/Zero Line trend days 2

Bollinger Band Upper 368.56

Bollinger Band Middle 355.54

Bollinger Band Low 342.52

Average Directional Index 19.29

ADX +DI 26.14

ADX –DI 13.52

Chaikin Money Flow 0.07

Interpretation:

In technical analysis we should look price and volume of the company at which level we should hold the shares and which level we should sell the share.

In chart ware the price line shown and a volume line shown in which the current market price which helps us to decide future movement of share or company price as ware a price and volume line intersect in increase level we got profit when sell our shares. And when line intersects decrease level we should purchase share and hold the share.

93

Bibliography

Annual Reports of ITC LTD

1. 2009-10

2. 2010-11

3. 2011-12

4. 2012-13

5. 2013-14

Books

Managerial accounting and financial book by R. Narayanswamy

Web Sites

WWW.ITCPORTAL.IN

WWW.BSEINDIA.COM

WWW.GOOGLE.COM

Software

ACEANALYSER SOFTWARE

94