ABSTRACT

This chapter focuses on working capital analysis of IT sector in India. Following IT companies are analyzed: Infosys Ltd and TCS Ltd. Liquidity trend of the units has been analyzed with the help of liquidity ratios. Receivables management is evaluated with regard to the collection efficiency. Infosys Ltd continues to be debt-free and maintains sufficient cash to meet its strategic objectives. In 2011, the company was sitting on huge cash balance of Rs 15,095 crore. These funds are deposited in banks, financial institutions and liquid mutual funds. Provisions are made for all debtors outstanding for more than 180 days depending on the management perceptions of the risk. TCS enough to meet the current liabilities when compared to the ratios of the Infosys. The receivable turnover ratio of the company has been approximately around 4.8 to 5.4 which is less as compared to the Infosys.