This document analyzes various solvency ratios for Infosys, including debt-equity ratio, total assets to debt ratio, and proprietary ratio for 2013 and 2014. The debt-equity ratio was low for both years, implying more equity financing. The total assets to debt ratio was high for both years, representing higher security for lenders. The proprietary ratio was high but declined slightly, indicating adequate safety for creditors. The document concludes the ratios show Infosys has a strong financial position and safety margins.

1. Submitted By :- Submitted To :-
Pulkit Bordia Mrs. Divya Agarwal
Rahul Sharma
Arpit Sharma
Narayan Singh
Sandeep Kumar

2. Long-Term Solvency Ratio;
Infosys

3. Ratio Analysis @ Glance
“Ratio analysis is a study of relationship among
various financial factors in a business.”
Classification of Ratios :
• Liquidity Ratios
• Solvency Ratios
• Activity or Turnover Ratios
• Profitability or Income Ratios

4. Solvency Ratio
“Solvency Ratios convey an enterprise’s ability to
meet its long-term obligations.”
• Debt-Equity Ratio = Debt/Equity
• Total assets to Debt Ratio = Total Assets/ Debt
• Proprietary Ratio = Equity/Total Assets

5. Debt-Equity Ratio (2013)
Debt-Equity Ratio = Debt/Equity
Debt= 238
Equity= (Share capital + Reserves and Surplus)
= 286 + 37,708
=37,994
Debt- Equity ratio= 238/37,994 = 0.0063:1
All fig. are in crores

6. Debt-Equity Ratio (2014)
Debt-Equity Ratio = Debt/Equity
Debt= 405
Equity= (Share capital + Reserves and Surplus)
= 286 +44,244
= 44,530
Debt- Equity ratio= 405/44,530 = 0.0091:1
All fig. are in crores

7. Total Assets to Debt Ratio (2013)
Total assets to Debt Ratio = Total Assets/ Debt
Total Debt = 238
Total Assets = 46,331
Total assets to Debt Ratio = 46,331/238 = 194.66:1
All fig. are in crores

8. Total Assets to Debt Ratio (2014)
Total assets to Debt Ratio = Total Assets/ Debt
Total Debt = 405
Total Assets = 56,966
Total assets to Debt Ratio = 56,966/405 = 140.66:1
All fig. are in crores

9. Proprietary Ratio (2013)
Proprietary Ratio = Equity/Total Assets
Equity = ( Share capital + Reserves & surplus)
= 286 +37,708
= 37,994
Total Assets = 46,331
Proprietary Ratio = 37,994/46,331 = 0.82 or 82%
All fig. are in crores

10. Proprietary Ratio (2014)
Proprietary Ratio = Equity/Total Assets
Equity= (Share capital + Reserves and Surplus)
= 286 +44,244
= 44,530
Total Assets = 56,966
Proprietary Ratio = 44,530/56,966 = 0.78 or 78%
All fig. are in crores

12. Year Debt- Equity Ratio
2013 0.0063:1
2014 0.0091:1
• Low Debt-Equity Ratio implies the use of more
equity than debt which means a larger safety margin
for creditors since owner’s equity is considered as a
margin of safety by creditors and vice versa.

13. Year Total Assets to Debt Ratio
2013 194.66:1
2014 140.66:1
• A Higher Total Assets to Debt Ratio represents
higher securities to lenders for extending long-term
loans to the business.

14. Year Proprietary Ratio
2013 0.82 or 82%
2014 0.78 or 78%
• A High Proprietary Ratio indicates adequate safety
for creditors. But a very high ratio indicates improper
mix of proprietor’s funds results in lower return on
investment.