Gross Block (Fixed Assets) Definition

Happy Frog Imagining the Concept of Gross Block of Fixed Assets

In the financial statements fixed assets are depicted under three blocks or groups as under:

1.     Gross

2.     Depreciation

3.     Net

Each of these blocks are further classified into:

1.     Amount standing at the beginning of the year (Opening Balance)

2.     Additions during the year

3.     Deletions (sold or disposed off) during the year

4.     Amount standing at the end of the year (Closing Balance)

‘Gross Block’ represents the original cost of acquisition of assets without adjusting or deducting depreciation for wear-and-tear.

Formula:

Gross Block (Fixed Assets) Formula

In conclusion gross block of fixed assets is the original cost, unadjusted for depreciation charge.

Is Tanla Solutions Share a Good Investment Bet?

Tanla Solutions looks like a decent IT Enabled Services company. But like Warren Buffett I too do not understand technology companies too well. Please look at the market snapshot of Tanla share:

The price to earnings ratio of 43.3 is very high and the share looks very expensive to buy. Price to Book Value Ratio of 0.89 looks attractive. Dividend Yield of 0.35 is negligible and unacceptable. Market capitalisation of Rs.577.93 crores is too small.

Tanla Solutions Share's price movements graph of past five years

The five year price graph shows price continuously climbing and does not bestow any special market advantage for buying. 

Tanla Solutions Share's returns or price increase in the last five years

Five years return on the share of 852.50% shows steep appreciation, again not providing any special buying advantage.

The company started making profits only for the last two years and for at lest three years preceding them the company incurred losses.

I have not investigated the company/ share thoroughly as with this background I am not convinced about investing in the Tanla scrip and I shall not recommend you invest too.

If you are keen in investing in an technology company why don’t you consider Larsen and Tubro Infotech instead? You may:

1. Read the investment research report at: Larsen & Tubro Infotech Ltd. and
2. Download in PDF format at: L&T Infotech.pdf

L&T Infotech has a strong brand value, good parentage and is reasonably priced.