1. INTRODUCTION:

Profit has no relevance to compare the efficiency of a business organization. A very high profit does not always indicate sound organizational efficiency and low profitability is not always a sign of organizational sickness. Therefore, it can be said that profit is not the prime variable on the basis of which the operational efficiency and financial efficiency of an organization can be compared. To measure the productivity of capital employed and to measure operational efficiency, profitability analysis is considered as one of the best techniques. The word ‘Performance’ means ‘the performing of an activity, keeping, in view the achievement made by it’.

In other words, ‘Performance’ means ‘the role Played by an arrangement keeping in view the achievement made by it’. In the context of the Information Technology, it takes into account the way of their progress. Nathwani et al (2004) performance’ is described as the efforts extended to achieve the targets efficiently and effectively, the achievement of targets involves the integrated use of human, financial and natural resources. Financial performance is the process of measuring the results of an organization policies and operations in terms of monetary value. These results are reflected in the firm's profitability, liquidity or leverage. Evaluating the financial performance of a business allows decision-makers to judge the results of business strategies and activities in objective monetary terms. Normally the ratios are used to determine the financial performance of an organization. A well designed and implemented financial management is expected to contribute positively to the creation of a firm’s value Padachi (2006). Ultimate goal of profitability of a firm can be achieved by efficient use of resources. It is concerned with maximization of shareholders or owners wealth Panwala (2009). financial performance evaluation is traditionally based on the analysis of financial ratios such return on equity (ROE), return on assets (ROA), net interest margin (NIM), capital asset ratio, growth rate of total revenue, cost/income ratio. Hanson, Parsons, Musser, and Power (1998) evaluated a financial management outreach program through the use of a survey. The survey asked participants the average value of the impact of the workshop tools to their farm budgeting and planning.

2. OBJECTIVES AND METHODOLOGY:

2.1 We have set following objectives

· To evaluate the return on equity with the help of return on assets and return on sales.

· To test the relationship among Indian Information Technology companies.

2.2 Data and methodology:

This study was based on three Indian Information Technology Companies viz Prism informatics, Frontier Info and STG Life care listed in BSE India. Study has been taken for the period 2010-2015. Return on Equity (ROE) is a financial ratio that refers to how much profit a company earned compared to the total amount of shareholder equity invested. ROE is what the shareholders look in return for their investment. Khrawish (2011) said that ROE is the ratio of Net Income after Taxes divided by Total Equity Capital. ROE is an internal performance measure of shareholder value, and it is by far the most popular measure of performance, since: (i) it proposes a direct assessment of the financial return of a shareholder’s investment; (ii) it is easily available for analysts, only relying upon public information; and (iii) it allows for comparison between different companies or different sectors of the economy. ROE is sometimes decomposed into separate drivers: this is called the “DuPont analysis”, where ROE=(result/turnover)*(turnover/total assets)*(totalassets/equity).

ROE shows whether management is growing the company's value at an acceptable rate. Also, it measures the rate of return that the firm earns on stockholder’s equity. ROE is helpful for investors to identify the nature of Indian Information technology companies and will also help to take decision regarding investment. Return on Sales (ROS) measures how profitable a firm’s sales are after all expenses, including taxes and interest, have been deducted. Return on assets (ROA) offers a different take on management effectiveness and reveals how much profit a company earns for every amount of its assets. To identify the relationship between the ROS, ROA and ROE the correlation coefficient CORREL has been calculated. As the value approaches 1 the connection is very strong; as the value approaches 0 it is the weakest link.

3. RESULTS AND ANALYSIS:

Table 1 shows DuPont Analysis of Prism informatics. Return on Equity (ROE) of the Prism informatics in the year 2010 is 0.02. From the year 2013 ROE of the company is gradually decreasing. In the year 2011 ROE is 0.16 which is slightly good as compared with other financial year during the study period. ROA is gradually decreases during the study period and ROS is gradually increases during the study period.

Table 2 shows DuPont Analysis of Frontier Info. ROE of the company in the year 2010 is-0.94. In the year 2012 ROE is 2.08 which is slightly good as compared with other financial year during the study period for the company. In the year 2012 ROA is 3.15 and it gradually decreases in the following year during the study period. In the year 2011 ROS is 1.45 and it gradually decreases in the following year during the study period.

Table 3 shows DuPont Analysis of STG Lifecare. ROE of the company in the year 2010 is-0.01. In the year 2012 ROE is 0.02 which is slightly good as compared with other financial year during the study period for the company STG Lifecare. In the year 2011 ROA is 0.01 and it gradually decreases in the following year during the study period. In the year 2011 ROS is 0.27 and it gradually decreases in the following year during the study period.

Table 4 shows Correlation testing of Prism informatics with Frontier Info and STG Life care. It has been observed that between Prism informatics ROE and Frontier info ROE there is a strong relationship but Prism informatics ROS and STG Life care ROS there is a weak relationship.

Table 5 shows Correlation testing of Frontier Info with Prism informatics and STG Life care. It has been observed that between Prism informatics ROS and Frontier info ROE there is a strong relationship but Frontier info ROE and STG Life care ROE there is a weak relationship.

Table 6 shows Correlation testing of STG Life care with Prism informatics and Frontier Info it has been observed that between Prism informatics ROE and STG life care ROE there is a strong relationship but Prism informatics ROS and STG Life care ROE there is a weak relationship.

Table 7 shows Correlation Coefficient of Prism informatics among ROS, ROA and ROE it has been observed that between ROE and ROA there is a strong relationship but ROS and ROE there is a weak relationship.

Table 8 and 9 shows that ROE and ROA there is a strong relationship but ROS and ROE there is a weak relationship for the company Frontier Info and STG Lifecare.

Table 1: Shows Financial analysis of Prism informatics with DuPont Ratio

Year	Net Profit Margin	Asset Turnover	Equity Multiplier	Return on Equity	Return on asset	Return on sales
2010	0.254335	0.090104	1.276596	0.029255	0.02	0.09
2011	0.230724	0.467424	1.491729	0.160877	0.10	0.46
2012	0.075074	0.528022	1.519585	0.060237	0.03	0.52
2013	-0.33291	0.383477	1.454352	-0.18567	-0.12	0.38
2014	-0.18316	0.402679	1.200244	-0.08852	-0.07	0.40
2015	-3.09952	1.143414	3.39418	-12.0291	-3.54	1.14

Note: We have calculated ROE using DuPont model as mention in the methodology in Table1. Similar explanations hold good for remaining Tables 2-3.

Table 2: Shows Financial analysis of Frontier Info with DuPont Ratio

Year	Net Profit Margin	Asset Turnover	Equity Multiplier	Return on Equity	Return on asset	Return on sales
2010	-2.11392	0.371765	1.200565	-0.9435	-0.79	0.37
2011	-1.34171	1.452555	1.574713	-3.06897	-1.95	1.45
2012	-4.77143	-0.66038	0.6625	2.0875	3.15	-0.66
2013	-0.15556	0.6	-0.86207	0.08046	-0.09	0.60
2014	-6.25	0.04878	-0.73214	0.223214	-0.30	0.04
2015	-5.2	0.079365	-0.45652	0.188406	-0.41	0.07

Table 3: Shows Financial analysis of STG Lifecare with DuPont Ratio

Year	Net Profit Margin	Asset Turnover	Equity Multiplier	Return on Equity	Return on asset	Return on sales
2010	-0.02301	0.324496	2.157937	-0.01612	-0.01	0.32
2011	0.037791	0.276194	2.140034	0.02233	0.01	0.27
2012	-2.09375	0.039522	2.335577	-0.19327	-0.08	0.03
2013	-0.84459	0.063519	2.549234	-0.13676	-0.05	0.06
2014	11.45455	-0.00511	2.736976	-0.1601	-0.06	-0.01
2015	-126	0.000452	3.204348	-0.18261	-0.06	0.01

Table 4: Correlation testing of Prism informatics with Frontier Info and STG Life care

Correlation Testing	Frontier Info ROE	STG Life care ROE	Frontier Info ROA	STG Life care ROA	Frontier Info ROS	STG Life care ROS
Prism informatics ROE	-0.13	0.39	0.09	0.17	0.27	0.36
Prism informatics ROA	-0.14	0.41	0.09	0.29	0.18	0.38
Prism informatics ROS	0.21	-0.52	0.08	-0.41	0.20	-0.56

Table 5: Correlation testing of Frontier Info with Prism informatics and STG Life care

Correlation Testing	Prism informatics ROE	STG Life care ROE	Prism informatics ROA	STG Life care ROA	Prism informatics ROS	STG Life care ROS
Frontier Info ROE	-0.13	-0.89	-0.14	-0.95	0.21	-0.73
Frontier Info ROA	0.09	-0.70	0.09	-0.79	0.08	-0.52
Frontier Info ROS	0.27	0.81	0.18	0.87	0.20	0.62

Table 6: Correlation testing of STG Life care with Prism informatics and Frontier Info

Correlation Testing	Prism informatics ROE	Frontier Info ROE	Prism informatics ROA	Frontier Info ROA	Prism informatics ROS	Frontier Info ROS
STG Life care ROE	0.39	-0.89	0.41	-0.70	-0.52	0.81
STG Life care ROA	0.17	-0.95	0.29	-0.79	-0.41	0.87
STG Life care ROS	0.36	-0.73	0.38	-0.52	-0.56	0.62

Table 7: Correlation Coefficient of Prism informatics among ROS, ROA and ROE

Correlation Testing	Prism informatics ROE	Prism informatics ROA	Prism informatics ROS
Prism informatics ROE	---------	0.99	-0.90
Prism informatics ROA	0.99	--------	-0.90
Prism informatics ROS	-0.90	-0.90	---------

Table 8: Correlation Coefficient of Frontier Info among ROS, ROA and ROE

Correlation Testing	Frontier Info ROE	Frontier Info ROA	Frontier Info ROS
Frontier Info ROE	---------	0.90	-0.95
Frontier Info ROA	0.99	--------	-0.86
Frontier Info ROS	-0.95	-0.86	------------

Table 9: Correlation Coefficient of STG Lifecare among ROS, ROA and ROE

Correlation Testing	STG Lifecare ROE	STG Lifecare ROA	STG Lifecare ROS
STG Lifecare ROE	---------	0.98	0.94
STG Lifecare ROA	0.98	--------	0.91
STG Lifecare ROS	0.94	0.91	---------