2. INTRODUCTION Tech Mahindra is part of the US $7.1 billion Mahindra Group, in partnership with British Telecommunications plc (BT), one of the world’s leading communications service providers. Tech Mahindra was incorporated as a joint venture between Mahindra & Mahindra and British Telecom plc in 1986 under the name of ‘Mahindra British Telecom’.
11. Liquidity Ratios Current Ratio = Total Current Asset/Total Current Liabilities Current Ratio of 2:1 is considered satisfactory Decline in Cash & Bank Balance is negated by increase in Loans & Advances in 2010 Increase due to foreign exchange forward and currency option contracts
12. Quick Ratio = (Current Assets – Inventories – Prepaid Expense) / (Current Liabilities – Bank Overdraft) Quick Ratio of 1:1 is considered satisfactory Infosys 4:1
13. Turnover Ratios Total Asset Turnover Ratio = Net Sales / Total Asset Decline in 2009 due to increase in Cash & Bank Balance by approx 510% However, Sundry debtors decreased by 19% & Loans & Advances decreased by approx 18%
14. Working Capital Ratio = Net Sales / Working Capital Higher working capital reflects better utilization of the working capital of the firm Sales increased by approx. only 3% in the year 2009-10
15. Capital Turnover Ratio = Net Sales / Capital Employed The ratio has decreased due to uptake of debt in the year 2009-10 in the form of privately placed non-convertible debentures, commercial papers and loans from banks & other sources
16. Inventory Turnover Ratio = Cost of Goods Sold / Inventory Inventory is negligible for IT services company
17. Debtors Turnover Ratio = Sales / Debtors Increase in sales by approx by 21% with decrease in sundry debtors by 19% has lead to an increase in the ratio in 2009
18. Funding of Working Capital There is no major deviation in the funding of working capital other than an decrease in the cash and bank balance in 2009-10 with an increase in the loans & advances Investment in foreign exchange forward and currency option contracts
