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Cash kitty to help IT companies tide over crisis
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Cash kitty to help IT companies tide over crisis
Cash kitty to help IT companies tide over crisis
Their balance sheets for FY09 show that the IT biggies are sitting on healthy reserves and surplus which can help them in times of crisis, say experts.
Reserves and surplus account of a company consists mainly of retained net profits over the years apart from share issue premium. Unlike manufacturing companies where the reserves and surplus prominently reflect fixed manufacturing assets, for IT companies liquid assets such as cash and equivalents, sundry debtors, and loans and advances constitute as much as two-third of the reserves and surplus.
“The reserves and surplus account of an IT company mainly represents liquid assets since the sector is not capital intensive unlike manufacturing companies. For IT companies, it means huge cash,” says investment advisor SP Tulsian.
The largest IT exporter TCS reported reserves and surplus of Rs 15,502 crore at the end of FY 09 up 28% from last year. For Infosys, which trails TCS in revenues, it was up by 33% to Rs 17,968 crore. Wipro, which is third in line, recorded a rise of nearly 20% in its reserves and surplus at Rs 13,630 crore.
Source:
http://economictimes.indiatimes.com/Infotech/Cash-kitty-to-help-IT-companies-tid
