Summer training report

1. A STUDY ON FINANCIAL PERFORMANCE OF
ITC LIMITED
 SUBMITTED BY: MEHAK GOEL
 ENROLLMENT NO. : 12614803921
 COURSE: MBA 3rd Sem

2.  OBJECTIVES
The specific objectives of the study are as following:
 To understand the liquidity and solvency position of the company during the period
2017-18 to 2021-22.
 To assess the profitability position of the company from 2017-18 to 2021-22
 To analyze the financial Position and performance of ITC Ltd
 d. To suggest measures to improve the performance of the company based on findings
of the study

3.  RESEARCH
METHODOLOGY
An Analytical study is conducted.
The study is based on Secondary data.
.
The details related to the study are collected from the
published financial statements of the Company website of
the company, books, journals and internet
The study pertains a period of 5years from 2017-18 to
2021-22 .
The tools of analysis used are
Ratio analysis ,Common Size Statements

4.  ANALYSIS
 Current Ratio CR= Current Asset /Current Liability




Year Current
Asset
Current
Liabilities
Current
Ratio
2017-18 25811.20 14945.09 1.73:1
2018-19 26269.10 7121.01 3.6:1
2019-20 26393.62 9250.15 2.85:1
2020-21 31747.27 10011.99 3.17:1
2021-22 39505.35 9559.77 4.13:1
Interpretation
The ideal current ratio is 2:1. From the above table it is clear that financial year’s except 2017-18 has attained the ideal
current ratio. This indicates that company is able to pay off its short term obligations in the financial years 2017 to 2022 .

5.  Quick Ratio QR= Quick Asset /Current Liability
Year Quick
Asset
Current
Liability
Quick
Ratio
2017-18 16654.74 14945.09 1.11:1
2018-19 18153.00 7121.01 2.54:1
2019-20 18898.53 9250.15 2.04:1
2020-21 23887.71 10011.99 2.38:1
2021-22 30626.02 9559.77 3.20:1
Interpretation
The ideal quick ratio is 1:1. From the above table it is clear that the company has attained the
ideal quick ratio. The ratio is increasing year by year. This indicates that the short term
solvency position of the company is good

6.  Debt Equity Ratio DER= Total Debt / Equity.
Year Total Debt Equity Debt-
equity
Ratio
2017-18 17037.04 34226.74 0.49:1
2018-19 9235.6 46707.67 0.19:1
2019-20 11444.28 52844.58 0.21:1
2020-21 12314.07 59484.34 0.20:1
2021-22 11716.31 65273.26 0.17:1
Interpretation
The Standard debt equity ratio is 1:1. From the above table it is clear that the company has not attained the ideal debt equity
ratio. It shows that the company tends to use more of the owners fund than the borrowers fund.

7.  Leverage Ratio LR= Total Asset / Total Debt
Year Total
Asset
Total
Debt
Leverage
Ratio
2017-18 51263.78 17037.04 3.00:1
2018-19 55943.27 9235.6 6.05:1
2019-20 64288.86 11444.28 5.61:1
2020-21 71798.41 12314.07 5.83:1
2021-22 77367.04 11716.31 6.60:1
Interpretation
The ideal leverage ratio is 1:1. The above table shows that the company has attained the ideal leverage ratio. This means
there is higher degree of solvency.

8.  Net Profit Ratio NPR = Net Profit /Net Sales x 100
Year Net Profit Net Sales NetProfit
Ratio
2017-18 9911.61 39066.85 25.37
2018-19 10477.23 58704.52 17.84
2019-20 11492.68 47688.55 24.09
2020-21 12835.90 49862.11 25.74
2021-22 15592.78 51393.47 30.34
Interpretation
The ideal net profit ratio is 5% to 10%. From the above table it is clear that company has attained the ideal net profit ratio
and the ratio is increasing year by year.

9.  FINDINGS
 The company was able to attain the ideal current ratio for the previous 5
years i.e. from 2017-18 to 2021-22.
 The company attained the ideal quick asset ratio during the time period in
which the study was undertaken and it also shows a positive trend.
 ITC limited has a fair liquidity position.
 The company has not attained the ideal debt equity ratio which means that
the company tends to use more of the owners fund than the borrowers fund.
 The solvency position of ITC Limited is considerably high.
 The net profit ratio of the ITC Limited is more than the ideal ratio which
means that the company was able to obtain a fair amount as profit after the
deduction of tax and other expenses.

10.  CONCLUSION
The project entitled “study on the financial performance of ITC limited” helps to get a
critical analyses of the overall financial health of a firm over a given period of time and
comparison between financial health of similar firms. The study reveals that the financial
performance of ITC limited is satisfactory and the company has a fair Liquidity, solvency
and profitability position. The financial statement is analyzed and interpreted with the
help of Balance sheet and Profit and loss account of the last 5 years. The financial
performance of ITC limited proves that the company has a bright future

11. THANKYOU