A PROJECT REPORT

ON

“FINANCIAL STATEMENT ANALYSIS OF

BHARTI AIRTEL LIMITED”

Submitted By

Rudranarayan Padhi

(6th Semester , +3 Commerce Hons.)

In Partial Fulfillment Of +3 Commerce(Hons.) – 2022

Under The Guidance

Of

Dr. Sarthak Kumar Jena

Asst. Prof. Of Commerce

Bhadrak Autonomous College

University Regd. No. / Roll No. – 8119B003

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 DECLARATION

I , Rudranarayan Padhi continuing +3 Commerce , B.Com at department of

commerce Bhadrak Autonomous College, Bhadrak , hereby declare that the

project work entitled “Financial Statement Analysis of Bharti Airtel Ltd.” is

an authentic work developed by me for the fulfilment of the award for the degree

of Bachelor of Commerce.

Rudranarayan Padhi
Exam Roll Number – 8119B003
6TH Semester , B.COM

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 CERTIFICATE

This is to certify that Rudranarayan Padhi a student of Bachelor of

Arts/Commerce of Department of Commerce Bhadrak Autonomous College,

Bhadrak has successfully completed his/her final semester project entitled as a

Partial fulfilment of academic curriculum.

Signature of the Guide

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 ACKNOWLEDGMENT
I sincerely thank to Honorable’ Dr. Sarthak Kumar Jena , Asst. Prof. Of
Commerce , BDK (Auto) College without whom we would not have completed
this project report. It’s my proud privilege to express deep gratitude to Co-
ordinate of Honorable’ sirs and other faculty members of our department .for their
useful suggestion, encouragement, and support, which helped me accomplish
project.

And above all, I am thankful to my friends who had helped me for the
completion of this project report

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 Table Of Contents

Chapters Page No.

Chapter-I Introduction 6-7

Chapter-II Review Of Literature 8-11

2.1 Objective Of The Study

Chapter-III Research Methodology 12-13

3.1. Data And Sample

3.2. Tools And Techniques

3.3 Analysis And Interpretataion

Chapter-IV Result And Discussion 14-16

Chapter-V Summary And Conclusion 17

Reference 18

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 CHAPTER-1

1.INTRODUCTION

Financial statement analysis means the process of determining financial strengths and
weakness of the firm by establishing strategic relationship between the items of the balance
sheet, profit and loss account and other operative. The process of critical evaluation of the
financial information contained in the financial statements in order to understand and make
decisions regarding the operations of the firm is called financial statement analysis. Financial
statement analysis is the process of reviewing and analysing a company’s financial statements
to make better economic decisions to earn income in future. Financial statements analysis is an
attempt to determine the significance and meaning of the financial statement data so that
forecast may be made of the future earnings, ability to pay interest and debt maturities and
profitability of sound dividend policy. The term financial analysis, also known as analysis and
interpretation of financial statements. The analysis and interpretation of financial statements is
essential to bring out the mystery behind the figure in financial statement. The term analysis
means simplification of financial data by methodical classification given in the financial
statement.

The objective of the study is to provide theoretical framework analysis the financial
performance of identified units of Bharti Airtel Ltd. And to understand the financial soundness
of the company. The main purpose of this research study to determine profitability and liquidity
position of company and to study the average collection period of company.

The study is mainly based on the data collected from secondary source which is gathered from
the annual reports of Bharti Airtel Ltd. And published materials in the form of books and
reports, articles from journals and from the website. The analysis is conducted on three
financial ratios selected from different segment like liquidity, activity and profitability such as
current ratio, net profit ratio, debtor turnover ratio and for the period of ranging for thee year
from 2018-19 to 2020-21.

Now the liquidity position is not that much good. But activity position and profitability position
was relatively good. There was significant difference in financial performance of Bharti Airtel
Ltd. With regard liquidity ,activity, profitability position.

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In section 2, review of literature is discussed. In Section 3, discusses the research methodology.
In section 4, data analysis and interpretation is done. In section 5, discussed summary and
conclusion.

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 CHAPTER-II

2.REVIEW OF LITERATURE

Literature review is done by referring previously published materials in the from of

books and reports, articles from journals and from the websites. I have obtained those journals
or articles through google scholar. There are various studies were conducted relating to
operational performance of the company from which most relevant literatures were reviewed.
The studies made upon to know the financial soundness of business. There are so many articles,
but I have taken only 5 articles due to time constraints. I have taken current ratio, net profit
ratio, debtor turnover ratio to study liquidity and profitability position of firm period of 2018-
2021. The study is helpful to make the data theoretically and practically give clear cut data and
also a attractive data.

Anbazhagan and ganesamoorthy (2019) examined the financial of the Bharti Airtel ltd. The
author has taken annual report of Bharti Airtel ltd. Of 12 years from 2004-2016 as source of
data which is secondary in nature. The relevant information in this regard has been collected
from articles, annual reports, journals etc. have also been applied, in order to give a meaningful
conclusion to the study. They have used various statistical tools and profitability in order to
carry out research work but I have taken only profitability ratio of my study purpose. The study
found that both total income and net profit of the company increased rapidly during the study
period. Mythili and visalatchi (2017) examined the financial position in order to forecast the
financial soundness of the company to build growth. The author has taken annual report of
Bharti Airtel Ltd. Of five years 2012-2016.in which the data taken from secondary sources.
They used various statistical tools and technique for determine profitability and liquidity
position of company but I will take liquidity ratio for my study purpose to make analysis and
interpretation. The study found that liquidity and profitability is played a vital role in our
economy. Khan and Choudhary (2020) examined the financial of the Bharti Airtel Ltd. The has
taken report of Bharti Airtel ltd. Of five years 2014-2019 as source 0f data which is purely
based on secondary data collected from annual reports and various websites. They used various
statistical tools and technique to main focus of the liquidity position of Bharti Airtel Ltd. And
examine the profitability during the study period. but I will take debtor turnover ratio for my
study purpose. The study reveals that debtors turnover ratio has high influence on profitability.
The liquidity position is not satisfactory study period except in 2019. Profitability position was
satisfactory till 2018 but huge downfall in 2019. Sharma and kaur (2016) examined the

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financial position in order to forecast the the financial soundness of the company to build
growth. The author has taken annual report of Bharti Airtel Ltd. Of 9 years 2007-2015 in which
the data taken form secondary sources. They used various statistical tools and technique to
main focus applying liquidity position in various ratio and relationship between profitability
and liquidity. I have taken only current ratio of my study purpose. The study found current ratio
of the company always remained below the standard norm of 2:1. The performance of the
company is not satisfactory in terms of current ratio during the study period. The relationship
between profitability and liquidity is negative. Khan and Safiuddin (2016) liquidity and
profitability are two very important and vital aspects of corporate business life. The author has
taken annual report of Bharti Airtel Ltd. Of 5 years 2011-2015 as source of data which is purely
based on secondary data collect from annual reports and websites. The main purpose to analyse
the liquidity and profitability performance Bharti Airtel Ltd. And Vodafone India. I have taken
only current ratio of my study purpose.to study found current ratio of Vodafone is better than
Bharti Airtel Ltd. Show that Vodafone is better in items in liquidity.

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 Table 1. summary of review of literature

Sl. Author’s Article Objective of the study Time Sample Tools & finding
no Name & name period frim techniques
year
1 Anbazhagan Profitability Study to profitability of 2004- Bharti Net profit Total income and net
And analysis of Bharti Airtel Ltd. 5 to Airtel ratio profit of the company
ganesamoor Bharti 2016- Ltd. analysis increased rapidly
thy Airtel Ltd- 17 during period
an
empirical
(2019)
study
2 Mythili and A study on Determine profitability 2012- Bharti Liquidity Liquidity and
visalatchi financial and liquidity position of 13 to airtel ratio profitability is played
(2017) performanc company 2016- Ltd. analysis vital role in our
e in Bharti 17 economic
Airtel Ltd.
3 Khan and Effect of main purpose see liquidity 2014- Bharti debtor Liquidity position is
Choudhary working position of Bharti Airtel 15 to Airtel turnover not satisfactory study
(2020) capital Ltd. And examine the 2019- Ltd. ratio period 2019.
managemen profitability during period 20 analysis Profitability position is
t on satisfactory till 2018
profitability but downfall in
of Bharti 2019.To revels that
Airtel Ltd. debtors turnover ratio
has high influence on
profitability
4 Sharma and Working Applying liquidity 2007- Bharti Current The current ratio of
kaur (2016) capital position in various ratio 8 to Airtel ratio company always
managemen and relationship between 2014- Ltd. analysis remained below
t and its profitability and liquidity 15 standard norm 2:1, then
impact on of company the performance of
profitability company is not
: a case satisfactory in terms of

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 study of current ratio during the
Bharti period. The
Airtel relationship between
telecom profitability and
company liquidity is negative.

5 Khan and Liquidity & To analysis liquidity and 2011- Bharti Current The current ratio of
sufiuddin profitability profitability performance 12 to Airtel ratio Vodafone is better than
(2016) performanc of Bharti Airtel Ltd. And 2015- Ltd. analysis Bharti Airtel Ltd. Show
e analysis of Vodafone India 16 And that Vodafone is better
selected Vodafo in terms of liquidity.
telecom n-e
companies India

2.1 objective of the study

The broad objective of this research paper is to analysis the financial performance of identified
units of Bharti Airtel Ltd. In India with regard to liquidity, activity, profitability and to give
suggested based findings to management and stakeholders of company and to analysis the
financial statements and measure the performance and profitability of company.

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 CHAPTER-III

3.RESEAERCH METHODOLOGY

3.1. Data and Sample

Sources of data this study heavily relies and is based on secondary data. The secondary
data comprised of annual reports of Bharti Airtel Ltd. And published materials in the from of
books and reports, articles from journals and from the websites. This study covers period of
three years from 2018-19 to 2020-21 this period is enough to cover both the short terms and
medium terms fluctuations and to set reliability. I have taken Bharti Airtel Ltd. As a sample
firm for the purpose of research. Bharti Airtel is among the top telecommunications service
company in the world. For the purpose of study I have taken income statement and balance
sheet of the head office of Bharti Airtel Ltd. Situated in New Delhi.

3.2. Tools and Techniques

The analysis is conducted on three financial ratios selected from different segment like
liquidity, activity and profitability. I have taken current ratio in order to evaluate liquidity
position. I have calculated debtors turnover ratio in order to find out the activity of the business.
And the profitability ratio will be studied with the help of net profit ratio. The analysis and
interpretation of financial statement is used to determine the financial position and result of
operational as well.

3.3.Analysis and interpretation

In order to find out financial performance of the company with regard to liquidity, activity
and profitability position. I have taken three financial ratios selected from different segment
like liquidity, activity and profitability such as current ratio for liquidity position, debtors
turnover ratio for activity position and net profit ratio for profitability position of the company.

Current ratio is an important tools to rest the liquidity and also the short term solvency.
The ratio of 2:1 is considered as standard of current ratio. Where,

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦

In the above ratio the current assets includes inventories , financial asset, etc and current lability
includes total current labilities given consolidated balance sheet of Bharti Airtel Ltd.

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This is the ratio of net profit to sales. The greater the ratio. The more profitable the business
will be. It helps in determining the overall efficiency of the business. It is a profitability ratio
hence, expressed in from of percentage. Where,

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒

In the above net profit ratio net profit includes profit it after tax and the net sales means the net
revenue from operations. Given in consolidated income statement of Bharti Airtel Ltd.

The debtors turnover ratio measures the efficiency with which a company is able to collect on
its receivables or the credit it extends to the customers. In general, higher debtors turnover
ratios imply that a company is managing its account receivables efficiently. Where

𝑁𝑒𝑡 𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑇𝑟𝑎𝑑𝑒 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠

In the above debtors turnover ratio the net credit sale includes the total revenue from operation
and average trade receivables means the trade receivables for the year

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 CHAPTER-IV

4. RESULT AND DISCUSSION

Table no.2- current ratio

year 2020-21 2019-20 2018-19

current asset 54,752.90 76,643.20 32,864.20
current liability 1,11,635.90 1,31,487.60 93,013.40
current ratio 0.49045961 0.58289299 0.3533276

chart no 1 -current ratio

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2020-21 2019-20 2018-19

Interpretation

The above table no 2 and chart no 1 will depicts the relationship between the current asset and
current liability . the company’s current ratio during the year 2018-19 was 0.35 , during the
year 2019-20 was increased to 0.58 and during the year 2020-21 the current ratio decreased to
0.49 . but during the study period the current ratio does more than the rule of thumb 1:1 . it
shows that the liquidity position of Bharati Airtel ltd. Is quite dissatisfactory

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 Table no-3 net profit ratio

year 2020-21 2019-20 2018-19

net profit -12,271.20 -31,316.60 1,331.90

net sale 1,00,615.80 87,539.00 80,780.20

net profit ratio -0.121961 -0.3577445 0.016488

chart no 2-net profit ratio

0.05

0
2020-21 2019-20 2018-19
-0.05

-0.1

-0.15

-0.2

-0.25

-0.3

-0.35

-0.4

Interpretation

The above table no 2 and chart no 3 depicts the relationship between the net sale and the net
profit which will be show net profit ratio, in the year 2018-19 it will be 0.016488 and during
the year 2019-20 and 2020-21 it will be decreasing trend -0.3577445 and -0.121961
respectively ,which will be relatively bad impact on the company s profitability position that
will make bad and very hazardious situation . the company suffer from loss during study
period. The company during co-vid period will suffer from various loss and expect it will be
profit from next some year.

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 Table no-4 debtors turnover ratio

year 2020-21 2019-20 2018-19

1,00,615.80 87,539.00 80,780.20

net credit sales
3,637.70 4,605.80 4,300.60
average trade
receivables

debtors turnover ratio 27.6591803 19.00625 18.78347

average collection
period 2.304931688 1.5838544 1.5652893

chart no 3- debtor turnover ratio

30

25

20

15

10

0
2020-21 2019-20 2018-19

debtors turnover ratio average collection period

interpretation

the above table no-4 and chart-3 depicts the relationship between net credit sale and average
trade receivable ,the above ratio show information about the debtors turnover ratio and average
collection period .the debtors turnover ratio during the year 2018-19 is 1.5652893 and during
the year 2019-20 and 2020-21 it will be increasing trend 19.00625 and 27.6591803
respectively, a higher debtor turnover ratio and lower average collection period is better but in
this case both are increasing during study period ,except the average collection period overall
debtors turnover ratio is quite satisfied.

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 CHAPTER-V

5.SUMARRY AND CONCLUSION

As per the above analysis it can be concluded that, liquidity position of Bharti Airtel Ltd.
Measured in terms of current ratio. The ratio of 2:1 is considered as standard of current ratio.
From the analysis it can be concluded that current ratio of Bharti Airtel Ltd. Increased two
years 2019-20 and 2020-21 which shows the liquidity position of company was better.
Profitability of the company was measured in terms of net profit ratio. At this point of view it
can be concluded that Bharti Airtel Ltd. Was a constaintly profit making company.it shows
handsome profit through out of years. In during the year 2019-20 it will decreasing , which
will be relatively bad impact on the company s profitability position that will make bad and
very hazardious situation . the company suffer from loss during study period. The company
during co-vid period will suffer from various loss and expect it will be profit from next some
year. Activity ratio of company was measured in terms of receivables turnover ratio. Generally
speaking a higher receivable turnover ratio, and lower receivable collection period is better,
but in this case both are increasing during study period ,except the average collection period
overall debtors turnover ratio is quite satisfied. At this point of view it can be concluded that
Bharti Airtel Ltd. Was efficient with regards to collection of its receivables or the creditors.
The study mainly based on the data collected from secondary source which is gathered from
the annual reports of Bharti Airtel Ltd. And published materials in the from of books and
reports, articles from journals and websites. The study examines the liquidity, activity and
profitability position of the business which can be used by the management of the Bharti Airtel
Ltd. In order to necessary decision. The creditor can be use the study to analyse the liquidity
position and determine the safety level available to them, the investors will also use the research
paper in order to examine the profitability. The limitation of study is that study covers data
only 3 years period. (march 2019 – march 2021). The secondary data like annual reports of is
collected from the company website which will depends upon the accuracy of data provided
by the company. Various tools and techniques used in this study will have its own limitations.
Implications of the study is that the analysis of financial statements enables to draw meaningful
conclusions in future and research is giving more suitable idea to the management and
development the company in various ways. This research also can be used by the stake holders
of the company which helps him to know the liquidity and activity position.

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REFERENCE

• Anbazhagan and ganesamoorthy (2019), Profitability analysis of Bharti Airtel Ltd- an

empirical study, infokara research, volume-08, issue-12, page-217-225
• Mythili and visalatchi (2017), A study on financial performance in Bharti Airtel Ltd.,
emperor international journal of finance and management research, pp 28-32
• Khan and Choudhary (2020), Effect of working capital management on profitability of
Bharti Airtel Ltd., Asian journal of management, volume – 11 , issue 1 , pp 92-96
• Sharma and kaur (2016), Working capital management and its impact on profitability:
a case study of Bharti Airtel telecom company, imperial journal of interdisciplinary
research, volume-02, issue-03, page-265-271
• Khan and sufiuddin (2016), Liquidity & profitability performance analysis of selected
telecom companies, anveshana’s international journal of research in regional studies,
law, social science, journalism and management practices, volume-01, issue-08, page-
365-376

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