Professional Documents
Culture Documents
Project Report
On
Submitted for
Partial fulfillment of the requirement for the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION
Submitted to
Date:-
CERTIFICATE
Certified that the Project work titled A STUDY OF RATIO ANALYSIS AT LARSEN &
TOUBRO LIMITED is a bonafide work done by Prince Kumar under my guidance in partial
fulfillment of Bachelor of Business Administration Programme of Pratap University, Jaipur. This
report has been checked by me on the basis of the rough draft submitted and the views expressed in
the report is only that of researcher, and not of the Department of Management/University.
DEPARTMENT OF MANAGEMENT
Certified that the Prince Kumar is a bonafide student of Pratap University with Roll no. BB130019
& Enrollment no. PU317013. Based on the written consent of the faculty guide Miss Priyanka
Meharia, we are forwarding his project report titled A STUDY OF RATIO ANALYSIS AT
LAREN & TOUBRO LIMITED for further evaluation to The Controller of Examination, Pratap
University, Jaipur.
STUDENT DECLARATION
I do hereby declare that the dissertation title A STUDY OF RATIO ANALYSIS AT LARSEN &
TOUBRO LIMITED is a record of bonafide work done by me under the supervision of Miss Priyanka
Meharia, Asst. Professor, Department of Management, Pratap University and submitted to Pratap University
in partial fulfillment of the requirements for the award of degree of Bachelor of Business Administration.
PRINCE KUMAR
PREFACE
This project has been prepared in the fulfillment of the degree of Bachelor of Business Administration
(Pratap University, Jaipur). I have tried my best to present the best for my project title A STUDY
OF RATIO ANALYSIS AT LARSEN & TOUBRO LIMITED under the guidance of Miss
Priyanka Meharia, Asst. Professor, Department of Management, Pratap University, Jaipur (Raj.)
PRINCE KUMAR
ACKNOWLEDGEMENT
I express my sincere thanks to my project guide, Miss Priyanka Meharia (Assistant Professor,
Department of Management, Pratap University), for guiding me right from the inception till the
successful completion of the project. I sincerely acknowledge them for extending their valuable
guidance, support for literature, critical reviews of project and the report and above all the moral
support she had provided me with all stages of this project. I would never succeed in finishing it
without the cooperation, encouragement and help provided to me.
PRINCE KUMAR
(Signature of Student)
EXECUTIVE SUMMARY
Larsen & Toubro is a major technology, engineering, construction, manufacturing and financial
services conglomerate, with global operations. L&T addresses critical needs in key sectors Hydrocarbon, Infrastructure, Power, Process Industries and Defense - for customers in over 30
countries around the world.
The major purpose of the study is to analyze the Ratio Analysis of L&T by considering the annual
report of few years. The financial statement explains the trend analyzes and the ratio analyzes along
with the comparative Ratio.
The analysis of the financial statements and interpretations of financial results of a particular period
of operations with the help of 'ratio' is termed as "ratio analysis." Ratio analysis used to determine the
Financial soundness of a business concern. Ratio analysis is a form of financial statement analysis
that is used to obtain a quick indication of a firms financial performance in several key areas. The
ratio are categorized as short term solvency ratio, debt management ratio, assets management ratio,
profitability ratio and market value ratio.
(1) It facilitates the accounting information to be summarized and simplified in a required form.
(2) It highlights the inter-relationship between the facts and figures of various segments of
Business.
(3) Ratio analysis helps to remove all type of wastages and inefficiencies.
(4) It provides necessary information to the management to take prompt decision relating to
business.
(5) It helps to the management for effectively discharge its functions such as planning, organizing,
Controlling, directing and forecasting.
(6) Ratio analysis reveals profitable and unprofitable activities. Thus, the management is able to
Concentrate on unprofitable activities and consider to improve the efficiency.
(7) Ratio analysis is used as a measuring rod for effective control of performance of business
Activities.
It is used as a device to analyze and interpret the financial health of enterprise. Ratio analysis stands
for the process of determining and presenting the relationship of items and groups of items in the
financial statements. It is an important technique of the financial analysis. It is the way by which
financial stability and health of the concern can be judged. The computation of ratios facilities the
comparison of firms which differ in size, ratios can be used to compare a firms financial performance
with Industry averages.
The study involved few personal interviews with the financial heads of the company and through
observation methods. Company annual reports were being evaluated and Ratio Analysis was being
analyzed from it. For the purpose of the study convenience sampling technique has been used.
7
REVIEW OF LITERATURE
The method of gathering industry data and calculates averages were called Scientific ratio analysis.
The word scientific in this title was not entirely correct because no evidence had been found that
the hypothesis formulation and hypothesis testing actually carried out.
Justin argued (1924)
Ratios analysis has come into existence since early ages and the main reason of the development of
ratio analysis was its use in the analysis of the properties of ratios in 300 B.C. in recent time it is used
as a standard tool for the analysis of financial statement. In nineteenth century main reasons of using
ratio analysis are power of financial institutions and shifting of management to professional managers.
Ratio analysis used for two purposes that are credit and managerial. In managerial approach
profitability and in credit approach capacity of firm to pay debts is the main point of focus. Generally,
ratio analysis is used credit analysis.
Horrigan (1968)
Basic relationship within the business is indicated by the ratios and developed complete model based
on the ratios. The purpose model was not mature but inspired others to start working on this theory.
Bliss (1923)
Different critics of ratio analysis also appeared. Has following concerns on ratio analysis
(1) Ratios are bond with time and changed as time passed so cannot be interpreted
(2) Ratios are not natural measure for judging the performance companies manipulated them
(3) Ratios easily affect the mind of viewers and hide the actual position and
(4) Ratios swing widely that also affect the dependability.
Gilman (1925)
Create and promoted own set of financial ratios successfully. This set of financial ratios was printed
and promptly known as important and prominent group of ratios.
Foulke (1931)
The help of thirteen different type of ratios analysis 120 failed firms and found that three out of
thirteen ratios predict the failure of firms with precise accuracy while other ratios also shown some
prediction power.
TABLE OF CONTENTS
S. No.
Contents
1.
2.
Introduction
Objective of study
Limitations of study
Introduction of Industry
12
13
14
15-17
19
20
21
22
23
24-25
2.7 Facilities
26-27
2.8 Competitors
28
29-33
3.
4.
5.
Page No.
34
35-36
37
38
39
41-42
43-52
53-55
57
58
59
9
60
61
Coverage Ratio
5.7 Interest Coverage Ratio
62
5.8
5.9
5.10
5.11
Activity Ratio
Inventory Turnover Ratio
Fixed Assets Turnover Ratio
Current Assets Turnover Ratio
Total Assets Turnover Ratio
63
64
65
66
5.12
5.13
Profitability Ratio
Net Profit Ratio
Return On Investment
67
68
5.14
69
6.
71
72-74
75
76-77
78
79
80
10
CHAPTER 1
INTRODUCTION OF PROJECT
11
INTRODUCTION OF PROJECT
Ratio analysis is a powerful tool of financial analysis. A ratio is defined as the indicated quotient of
two mathematical expressions and the relationship between two or more things. In financial
analysis, a ratio is used as a benchmark for evaluation the financial position and performance of a
firm. The absolute accounting figures reported in the financial statements do not provide a meaningful
understanding of the performance and financial position of a firm. An accounting figure conveys
meaning when it is related to some other relevant information. For example, an Rs.5 core net profit
may look impressive, but the firms performance can be said to be good or bad only when the net
profit figure is related to the firms Investment.
The relationship between two accounting figures expressed mathematically, is known as a financial
ratio (or simply as a ratio). Ratios help to summarize large quantities of financial data and to make
qualitative judgment about the firms financial performance. For example, consider current ratio. It
is calculated by dividing current assets by current liabilities; the ratio indicates a relationship- a
quantified relationship between current assets and current liabilities. This relationship is an index or
yardstick, which permits a quantitative judgment to be formed about the firms liquidity and vice
versa. The point to note is that a ratio reflecting a quantitative relationship helps to form a qualitative
judgment. Such is the nature of all financial ratios.
Standards of comparison:
The ration analysis involves comparison for a useful interpretation of the financial statements. A
single ratio in itself does not indicate favorable or unfavorable condition. It should be compared with
some standard. Standards of comparison may consist of:
1. Past ratios, i.e. ratios calculated form the past financial statements of the same firm;
2. Competitors ratios, i.e., of some selected firms, especially the most progressive and
successful competitor, at the same pint in time;
3. Industry ratios, i.e. ratios of the industry to which the firm belongs; and
4. Protected ratios, i.e., developed using the protected or Performa, financial statements of the
same firm.
In this project calculating the past financial statements of the same firm does ratio analysis.
12
A study of Ratio analysis is very importance because ratio analysis is a powerful tool of financial
analysis. A ratio is defined as the indicated quotient of two mathematical expressions and the
relationship between two or more things. In financial analysis, a ratio is used as a benchmark for
evaluation the financial position and performance of a firm. The absolute accounting figures reported
in the financial statements do not provide a meaningful understanding of the performance and
financial position of a firm.
13
1. False results:Ratios are based upon the financial statement. In case financial statement are incorrect or the data of
on which ratios are based is incorrect, ratios calculated will also false and defective. The accounting
system itself suffers from many inherent weaknesses the ratios based upon it cannot be said to be
always reliable.
2. Limited comparability:The ratio of the one firm cannot always be compare with the performance of other firm, if uniform
accounting policies are not adopted by them. The difference in the methods of calculation of stock or
the methods used to record the deprecation on assets will not provide identical data, so they cannot be
compared.
3. Absence of standard universally accepted terminology:Different meanings are given to a particular term, egg. Some firms take profit before interest and tax;
others may take profit after interest and tax. A bank overdraft is taken as current liability but some
firms may take it as non-current liability. The ratios can be comparable only when all the firms adapt
uniform terminology.
4. Price level changes affect ratios:The comparability of ratios suffers, if the prices of the commodities in two different years are not the
same. Change in price effect the cost of production, sale and also the value of assets. It means that the
ratio will be meaningful for comparison, if the prices do not change.
5. Ignoring qualitative factors:Ratio analysis is the quantitative measurement of the performance of the business. It ignores
qualitative aspect of the firm, how so ever important it may be. It shoes that ratio is only a one sided
approach to measure the efficiency of the business.
6. Personal bias:Ratios are only means of financial analysis and an end in itself. The ratio has to be interpreted and
different people may interpret the same ratio in different ways.
14
INTRODUCTION OF INDUSTRY
Engineering and construction Sector
Construction in India is currently the second largest sector in the country, contributing 11 per cent of
the total GDP and employing about 35 million people. According to figures shared by Deloitte in a
fact sheet on the sector, it was estimated at a size of $126 million in 2013-14.
It is also responsible for the most FDI inflows into the country, second only to services a
consolidated chunk of 11% of total FDI inflows into the nation were from this sector, between April
2000 to October 2013.
As a developing nation, India has a vast scope for growth in construction there is an overencompassing need for construction for infrastructure as well as for developing industry and
residential needs. Let us first examine the need for new and constant up gradation work in
infrastructure for the nation.
Infrastructural demands for India still falls under investments made by the public sector, which is the
government for transport, urban infrastructure, rural area ancillary support as well as upkeep in
the form of solid waste management.
Developing transport - road networks and highways, airport and port development, railway
connectivity, becomes key for national development. Currently, roads account for 80% of passenger
and 65% of freight traffic in India. Better road density and overall qualitative road development, from
highways to arterial roads, is an area requiring constant investment and upkeep. There are more
Indians who are opting for air transport in the last 20 years, though there are only 454 airports to
service them. This means a sharp rise in demand for new air corridors for Tier II cities as well as up
gradation of current facilities.
Indian railways are the fourth largest in the world, already spread over a route of 65,000 kilometers
and covering 7,500 stations. To match current demand, this sector requires an estimated investment
of $86.5 million, over the next five years, largely for modernization, port connectivity projects and
the development of city-specific metro networks. For seaport connectivity, the scope of development
is underlined by the fact that the nation is blessed with 7,500 kms of coastline. By weight, Indias 13
major and 180 non-major ports handle more the 90% of the countrys domestic and foreign trade.
This means that transport provides ample scope of work for the construction sector there is road
connectivity and upkeep for national and state highways, PWD roads, arterial roads and rural roads.
Maintenance, repair and overhaul, in the matter of airports, require as much construction and services
support as development of new airports and air corridors. Improvement in cargo handling and off take
facilities of the present road and rail networks is also required for port development. Apart from this,
ports require deepening of channels, construction of jetties, berths and container terminals.
The need for urban infrastructure visa construction can be highlighted by this though only 30% of
the countrys population currently resides in urban areas, the growth estimated for the region has been
a sharp 38% over the last 20 years. The current urban infrastructure is simply not at par to deal with
this level of growth. Developing water management, increasing electrification as well as solid waste
management are the major areas of concern.
These were infrastructural needs from the construction sector. Now, we come to the demands from
industrial and real estate sectors. Over the last 60 years, while agriculture and services support have
flourished in the nation, the same cannot be said about its industrial growth.
15
Now, with the inputs from private sector and foreign investment, the picture has begun to change over
the last 20 years.
Real estate demand is currently at a stand-still, with most developers waiting for either a spike in
demand or for approvals to begin work on fresh projects. Traditionally, they employ contractors for
constructions. However, now many large contractors are stepping into the sector as real estate
developers.
Currently, construction as a sector is severely fragmented, with only about 250 firms that have an
employee strength of more than 500 people. The sector also faces the following concerns:
Liquidity concerns, due to increasing cost of inputs, problems of financing and tighter funding
norms.
Shortage of skilled manpower
Constant technological up gradation to stay at par with increasing competition
Complexity of structures
Procurement of approvals due to tightening regulatory measures
Still, career options in the sector are bright. According to the Global Construction Perspectives, a
report on the worldwide trends in Construction up to 2025, India is on the cusp of becoming the third
largest construction market by that year. Further, real estate is currently open for 100% foreign direct
investment, allowing foreign developers to set base. The demand for private housing is also on upward
incline, which is not likely to slow down anytime soon.
Construction and engineering are fields which heavily complement each other. Engineers provide
both skilled manpower and trained, talented human resources to the construction sector. They also
develop several raw materials and provide technological inputs that further spark innovation in the
same.
According to the Corporate Catalyst India report of June 2011, the sector provides direct and indirect
employment to over 4 million skilled and non-skilled workers. The industry can be divided into two
categories:
Heavy engineering segment High value production like heavy electrical products, innovation
and services; machine tools, automotive parts
Light engineering segment Medium to low technology products like casting and forging
components; medical and surgical equipments; industrial fasteners; raw products/
components for heavy engineering segment.
While large scale production in the segment is organized, the sector in India is also home to a vast,
unorganized, mid-scale operations setup, which feeds this large scale production. The major players
in the segment include Bharat Heavy Electrical Ltd., Engineers India Ltd., Hindustan Aeronautics
Ltd., Crompton Greaves, Elgi Equipments, HMT, Kirloskar Oil Engines Ltd. (KOEL), Larsen &
Toubro Ltd. (L&T), Thermax Ltd., Cummins India Ltd., Alfa Laval (India) Ltd., Asea Brown Boveri
Ltd (ABB), and Siemens Ltd.
16
Industry Overview
According Order Inflows, which are the mainstay of any company engaged predominantly in
Engineering & Construction business, clocked in at 94,108 Cr., representing a robust 15% growth
over the previous year. The unexecuted Order Book at the year-end stands at 162,952 Cr., thus
providing a healthy revenue and margin visibility over the next few years. Despite severe execution
challenges in the domestic market, your Company managed to keep project execution largely on track,
and helped by robust growth in overseas revenues, registered a 10% growth in Gross Revenues at
57,164 Cr. Profit after Tax registered 5,493 Cr which translates to a growth of 25% over the previous
year on a like-to-like basis. At the Group level, Gross Revenues displayed a growth of 14% and stood
at 85,889 Cr for the year under review.
Electrical &
Automotion
4%
Others
2%
Machinery &
Industrial Product
2%
Heavy Engineering
4%
Metallurgical Material
Handling
3%
Power
4%
Infrastructure
81%
Electrical & Automotion
Heavy Engineering
Power
Infrastructure
Others
PAT, at 4,902 Cr represents a decline of 6% over the previous year, caused by capacity
underutilization in two new subsidiaries, viz.L&T Shipbuilding Ltd. and L&T Special Steels & Heavy
Forgings Pvt. Ltd, as well as execution challenges faced in the Hydrocarbon business. It gives me
pleasure to announce that your Company has recommended dividend of 14.25 per equity share on a
face value of 2 per share for the year. The corresponding dividend during the previous fiscal was at
12.33 per equity share.
17
CHAPTER - 2
COMPANY PROFILE
18
COMPANY PROFILE
INTRODUCTION
Larsen & Toubro is a major technology, engineering, construction, manufacturing and financial
services conglomerate, with global operations. L&T addresses critical needs in key sectors Hydrocarbon, Infrastructure, Power, Process Industries and Defense - for customers in over 30
countries around the world.
L&T is engaged in core, high impact sectors of the economy and our integrated capabilities span the
entire spectrum of design to deliver. With over 7 decades of a strong, customer focused approach
and a continuous quest for world-class quality, we have unmatched expertise across Technology,
Engineering, Construction, Infrastructure Projects and Manufacturing, and maintain a leadership in
all our major lines of business.
Every aspect of L&T's businesses is characterized by professionalism and high standards of corporate
governance. Sustainability is embedded into our long-term strategy for growth.
The Companys manufacturing footprint extends across eight countries in addition to India. L&T has
several international offices and a supply chain that extends around the globe.
L&T is India's largest engineering and construction company. Considered to be the "bellwether of
India's engineering & construction sector", L&T was recognized as the Company of the Year in
Economic Times 2010 awards.
19
VISION
20
POLICY
Corporate
Human Resource Policy
We believe that people are our most valuable resource and play a pivotal role in helping us realize our
vision.
We are committed to:
1. Acquiring, developing and retaining a pool of high caliber talent.
2. Enabling and empowering our employees to be creative and innovative.
3. Establishing systems and practices for maintaining transparency, fairness and equity.
4. Creating a culture of continuous learning, competitiveness and excellence through
change management, respecting ethics, values and good governance
We will protect our environment and uphold in letter and spirit the United Nations universal
declaration of Human rights and the fundamental Human Rights conventions of the International
Labour Organization.
21
Corporate Environment
Health & Safety (EHS) Policy
As an integral part of our business philosophy, we are committed to covering the environment and
providing a safe and healthy workplace to our employee and stakeholders. To achieve this, we shall:
1.
2.
3.
4.
5.
6.
22
2014
2013
2012
Individual
2015
Mr. A.M. Naik conferred Business Indias Businessman of the Year recognition
HM Queen of Denmark Confers Order of Dannenberg - First Class on Mr. A.M. Naik
2014
2013
2012
Mr. A.M. Naik Ranked 32nd Best Performing CEO In The World
Mr. A.M. Naik Honored With ICC Lifetime Achievement Award
Mr. A.M. Naik Inducted to the Hall of Fame in Manufacturing Today's Power List.
Sustainability
2014
2013
2012
L&T wins ICC Corporate Governance and Sustainability Vision Award 2012
Newsweek Ranks L&T 4th Globally in List of Greenest Industrial Companies
23
Technology Hubs
Technology Alliances
Technology Hubs
L&Ts Engineering Centers at Mumbai, Vadodara and Delhi carry out process design and simulation,
analysis of computational fluid dynamics, mechanical design, failure analysis and trouble shooting.
Engineering Design & Research Centers
Located at Chennai & Kolkata, EDRC offers expertise in the field of plant structures for cement, steel,
coal handling, zinc & copper beneficiation, petrochemicals, refineries, switchyard structures, largespan roofing in structural steel for special-purpose buildings, such as clinker storage and boiler
support structures in concrete for power stations.
Hydrocarbon - Research & Development Centre
L&T Hydrocarbon Engineerings R&D Centre located in Mumbai, symbolizes our state-of-the art
capabilities in the areas of advanced engineering, analysis and technology. It offers high-end
technology support to the entire spectrum of our Hydrocarbon EPC business, covering the oil & gas
sector (the entire Hydrocarbon value chain from Upstream to Mid & Downstream.
Upstream Technology Centre
The Upstream Technology Centre identifies and develops technology for the upstream Oil and Gas
sector. It is engaged in a continuing quest to engineer value and provides support in critical areas for
all offshore structures - from fixed offshore platforms and modules to drilling rigs, floaters and subsea
systems.
L&T Hydrocarbon Engineering Centers
Engineering Centers, based at Faridabad, Mumbai, Vadodara, Bengaluru and Chennai, have been
developed as Centers of Excellence in a particular segment, and together provide technical support
for the comprehensive EPC services.
Our Engineering Centers integrate our in-house strength in engineering, fabrication, modularization
and construction to provide engineered solutions that are construction friendly, meeting the highest
standards of quality and safety, and in line with international standards.
24
Technology Alliances
Our Technology Alliances enable us to provide best-in-class services to our customers. These
Alliances span diverse sectors, including Power, Hydrocarbon and Construction.
L&T-Gulf
A joint venture with GULF Interstate Engineering, Houston offers engineering and consultancy
services for onshore hydrocarbon pipeline projects and onshore oil & gas field development projects
covering design and engineering services including feasibility studies, basic engineering, FEED,
detailed engineering, project management services, procurement assistance and related services.
It also carries out engineering studies in specialized areas like seismic studies, river migration studies,
upheaval buckling analysis, sand migration studies, etc., in addition to carrying out steady-state and
transient / dynamic simulation for single / multiphase fluid transportation.
L&T Chiyoda
Our Joint Venture Engineering Company - L&T-Chiyoda Limited, with Chiyoda Corporation of
Japan was established in 1994. With its engineering offices located in Vadodara & Mumbai. L&T Chiyoda acts as a resource center both for Chiyoda Corporation and L&T Hydrocarbon Engineering,
offering engineering services in the Mid & Downstream Hydrocarbon business.
L&T MHPS
Mitsubishi Hitachi Power Systems (MHPS), Japan has over five decades of experience in
manufacturing supercritical boilers and turbine-generators and is a global leader with a world market
share of 28 per cent for large turbine generators.
Its unrestricted, exclusive Technology Transfer Agreement enables L&T Power to design,
manufacture, erect and commission supercritical boilers, turbine-generators (up to-1000 MW) and
pulverizes.
L&T Sargent & Lundy
Sargent & Lundy provides complete consulting, engineering and project development services for all
types of fossil fuel power generation and power delivery projects. Its record of accomplishments
includes the design of close to 1000 power plants totaling over 122000 MW for clients worldwide.
Globally available and locally accessible, S&L has had an association spanning 25 years with L&T.
The JV, L&T-S&L has a team of experienced engineers who deploy advanced technology to engineer
customized solutions for power projects around the world.
L&T Valdel
LTV focuses on the Upstream Oil & Gas Sector, and is a Comprehensive Engineering and
Outsourcing Centre offering Design Engineering Services covering Conceptualization, Front - End
Engineering Design, Basic Engineering, Detailed Engineering, Procurement Engineering and Project
Management services for Oil & Gas Projects Globally.
25
FACILITIES
India
Powai, Maharashtra
Ahmednagar, Maharashtra
Mysore, Karnataka
26
Hazira, Gujarat
Mena
Far East
Selangor, Malaysia
Europe
Essex, UK
27
Sohar, Oman
COMPETITORS
Larsen & Toubro is a 14 billion USD company. Also, it is India's largest construction company.
Considering only its engineering and construction wing, the competitors of L&T are:
1.
2.
3.
4.
5.
6.
7.
Punj Lloyd
Shapoorji Pallonji Company
HCC Limited
Lanco infra
NCC
IVRCL
Afcons
28
L&T BUSINESSES
L&T leads in nearly every sphere of business it operates in. Serving customers in more than 30
countries, acros
s various industries. Explore our offerings by Industry or by Business.
Business
Industry
Business
Construction
L&T Construction is among the worlds Top 30 contractors.
The business encompasses multiple business - Buildings &
Factories, Transport Infrastructure, Heavy Civil Infrastructure,
Water & Renewable Energy and Power Transmission &
Distribution.
Hydrocarbon Engineering
L&T Hydrocarbon Engineering, a wholly owned subsidiary of
L&T, is dedicated to serving the oil and gas sector around the
world. It delivers turnkey engineering and construction
solutions across the hydrocarbon spectrum - Upstream, Mid and
Downstream and Pipelines.
Power
L&T provides integrated concept - to - commissioning
solutions for supercritical thermal power plants. We also offer
comprehensive services for gas-based power plants.
29
EWAC Alloys
A market leader in maintenance and repair welding, EWAC
Alloys offers consumables, specification-grade electronics and
flux-cored welding wires.
L&T InfoTech
A wholly owned subsidiary of L&T, and one of the fastest
growing IT Services Company. With nine delivery centres and a
diversified work force worldwide, the business is expanding into
new geographies even as it consolidates its client facing
organization in North America and Europe.
30
L&T IDPL
L&T Infrastructure Development Projects Ltd (L&T IDPL) is
Indias premier infrastructure developer. A leading player in
Public-Private-Partnership projects, it has business interests
in Roads & Bridges, Ports, Metro Rail and Power
Transmission.
L&T Metro Rail
The Hyderabad Metro Rail is one of the worlds largest
projects of its kind involving public-private partnership in the
mass transport sector. It will cover 72 km across three
corridors, transforming Hyderabad, triggering robust
economic activity around the city.
L&T Finance
L&T Finance Holdings offers a diverse set of financial
products and services, covering mutual funds, infra finance,
home loans and more.
L&T Realty
The real estate arm of L&T extends the Companys values of
trust, professionalism and commitment to the domain of
commercial and residential properties. All properties of L&T
Realty embody a sustainable design philosophy and focus on
fostering integrated communities.
31
INDUSTRY
Infrastructure
Turnkey Design and Build solutions backed by experience
and capabilities across multiple sectors.
o
o
o
o
o
o
Power
Integrated solutions, systems and equipment for the entire
Power value chain. Design & engineering for power plant
equipment.
o
o
o
o
o
o
o
o
Hydrocarbon
L&Ts Hydrocarbon Engineering Business serves the Oil &
Gas sector across multiple geographies.
o
o
o
o
Upstream
Mid & Downstream
Construction & Pipelines
Plant & Equipment
Process Industry
Custom designed equipment and systems for critical process
industries, delivered to customers around the world.
o
o
o
o
32
Defence
Solutions and systems for the defence sector, backed by a
strong focus on R&D.
o
o
o
Shipbuilding
Defence Systems
Aerospace
Information Technology
IT Solutions and services offered worldwide, through a
network of offices.
o
o
L&T InfoTech
L&T Technology Services
Finance
Financial services offered though L&Ts subsidiary
companies, L&T Finance Holdings and L&T Insurance.
o
o
o
o
o
L&T Finance
Mutual funds
Insurance
Infrastructure Finance
Housing Finance
Real Estate
Real estate offerings for the commercial & residential
sectors.
L&T Realty
33
MANAGEMENT
Board of Directors
A. M. Naik
Group Executive Chairman
K. Venkataramanan
CEO & Managing Director
S. N. Subrahmanyan
Director& Sr. EVP
(Construction & Infrastructure)
Metals)
R. Shankar Raman
Director& CFO
Non-Executive Directors
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
M.M. Chitale
Subodh Bhargava
M.Damodaran
Vikram Singh Mehta
Sushobhan Sarker
Adil Zainulbhai
Akhilesh Krishna Gupta
Bahram N. Vakil
Swapan Dasgupta
Sunita Sharma
Thomas Mathew T.
34
M. V. Kotwal
Director & President
(Heavy Engineering)
Shailendra Roy
Director& Sr. EVP
(Power, Minerals &
Relays
Meters
Automation Products & Systems
Low Voltage Products
Medium Voltage Products
Control & Automation
Marine Switchboards & Control Systems
Control & Automation
Low Voltage Systems
Medium Voltage Systems
Meters
Relays
Marine Solutions
Automation Products & Systems
Low Voltage Products
4. Heavy Engineering
o
o
o
Process Plant
Nuclear Power Plant
Defence & Aerospace
5. Hydraulics
o
o
o
o
o
Hydraulic Cylinders
Swivel / Rotary Joints
High Torque Low Speed Motors
Radial Piston Pumps
Customized Hydraulic Systems
6. Hydrocarbon
o
o
o
Upstream
Mid & Downstream
Construction & Pipelines (HCP) Projects
35
8. Power
o
o
11.Shipbuilding
o
o
o
12.Technology Services
o
o
o
o
o
o
o
o
o
o
o
o
o
Industrial Products
Medical Devices
Polymer
Process Industry
Telecom & Hi-tech
Transportation
Embedded System and Applications
Engineering Process Services
Mechanical Engineering
Product Lifecycle Management (PLM)
Engineering Analytics
Internet of Things and Machine to Machine
Power Electronics
36
COMPANY CLIENTS
37
ORGANISATION STRUCTURE
MR. A. M. NAIK
(Group Executive) Chairmen
MR. K. VENKATARAMANAN
(CEO & Managing Director)
MR. M. V. KOTWAL
Director & President
(Heavy Engineering)
MR. S. N.
SUBRAHMANYAN
Director & President
(Cons. & Infra)
38
MR. R. SHANKAR
RAMAN
Director & CFO
(Cons. & Infra)
MR. SHAILENDRA
ROY
Director & President
(Power & Mineral)
SWOT ANALYSIS
Strengths
1. Market leadership providing competitive edge - The company can leverage its strong brand
name and market leadership position to gain competitive advantage and also expand into
international markets
2. Strong technical expertise reinforce leadership position - L&T has set up an engineering and
project management center in Abu Dhabi to undertake oil and gas related projects as well as
engineering and consultancy services
3. Diversified revenues providing resilience - In FY2011, the companys revenues were
distributed among business divisions as follows: engineering and construction, electrical and
electronics, machinery and industrial products, financial services, developmental projects and
others. This enables L&T to alleviate its business risk as fluctuations in a single offering have
lesser impact on diversified offerings and provide resilience to its revenues
4. Over 45,000 employees form a part of its workforce.
5. It has offerings like Construction, Heavy equipment, Electrical equipment, Power,
Shipbuilding, Financial services and IT Services
Weakness
1. Dependence on domestic operations for revenue generation - In FY2011, the company's
domestic (India) operations contributed more than 80% of the total revenues.
2. Increasing debt impacting financial flexibility - L&Ts interest and brokerage expenditure
over the period increased
Opportunities
1. Strategic joint ventures strengthening business - L&T has formed a strategic partnership with
Cyan Holdings plc. A UK-based integrated system design company. L&T and Cassidian
entered into a partnership in February 2011, to become an electronics house for defense and
security.
2. Strong project pipeline ensures revenue growth.
3. Growing Indian construction & engineering industry - In 2015, the Indian construction &
engineering industry is forecast to grow.
Threats
1. Rise in cost of construction may affect margins - The rise in crude prices, will increase the
cost of transportation.
2. Challenges in land acquisition likely to affect business - in 2011, Indian government
introduced The Land Acquisition, Rehabilitation and Resettlement Bill, 2011. As per the
bill, compensation for the owners of the acquired land shall be four times the market value in
rural areas and twice in urban areas.
3. Intense competition may reduce profitability few competitors have substantially greater
resources and superior capabilities than L&T.
39
CHAPTER - 3
INTRODUCTION OF RATIOA NANSLYSIS
40
The ratio is one of the most powerful tools of financial analysis. It is used as a device to analyze and
interpret the financial health of enterprise. Ratio analysis stands for the process of determining and
presenting the relationship of items and groups of items in the financial statements. It is an important
technique of the financial analysis. It is the way by which financial stability and health of the concern
can be judged. Thus ratios have wide applications and are of immense use today. The following are
the main points of importance of ratio analysis:
(A) Managerial uses of ratio analysis:1. Helps in decision making:Financial statements are prepared primarily for decision-making. Ratio analysis helps in
making decision from the information provided in these financial Statements.
2. Helps in financial forecasting and planning:Ratio analysis is of much help in financial forecasting and planning. Planning is looking ahead
and the ratios calculated for a number of years a work as a guide for the future. Thus, ratio analysis
helps in forecasting and planning.
3. Helps in communicating:The financial strength and weakness of a firm are communicated in a more easy and
understandable manner by the use of ratios. Thus, ratios help in communication and enhance the value
of the financial statements.
4. Helps in co-ordination:Ratios even help in co-ordination, which is of at most importance in effective business
management. Better communication of efficiency and weakness of an enterprise result in better coordination in the enterprise
5. Helps in control:Ratio analysis even helps in making effective control of business. The weaknesses are
otherwise, if any, come to the knowledge of the managerial, which helps, in effective control of the
business.
41
(B) Tax audit requirements:Sec44AB was inserted in the income tax act by financial act; 1984.Caluse 32 of the income
tax act requires that the following accounting ratios should be given:
1. Gross profit/turnover.
2. Net profit/turnover.
3. Stock in trade/turnover.
4. Material consumed/finished goods produced.
Further, it is advisable to compare the accounting ratios for the year under consideration with
the accounting ratios for earlier two years so that the auditor can make necessary enquiries, if there is
any major variation in the accounting ratios.
42
Classification of ratios
Several ratios, calculated from the accounting data can be grouped into various classes according to
financial activity or function to be evaluated. Management is interested in evaluating every aspect of
the firms performance. They have to protect the interests of all parties and see that the firm grows
profitably. In view of the requirement of the various users of ratios, ratios are classified into following
four important categories:
Liquidity ratios
Leverage ratios
Profitability ratios
Activity ratios
43
1. Current Ratio:
Current ratio is calculated by dividing current assets by current liabilities.
Current assets
Current Ratio =
Current Liabilities
Current assets include cash and other assets that can be converted into cash within in a year, such as
marketable securities, debtors and inventories. Prepaid expenses are also included in the current assets
as they represent the payments that will not be made by the firm in the future. All obligations maturing
within a year are included in the current liabilities. Current liabilities include creditors, bills payable,
accrued expenses, short-term bank loan, income tax, liability and long-term debt maturing in the
current year.
The current ratio is a measure of firms short-term solvency. It indicates the availability of current
assets in rupees for every one rupee of current liability. A ratio of greater than one means that the
firm has more current assets than current claims against them Current liabilities.
2. Quick Ratio:
Quick ratio also called Acid-test ratio, establishes a relationship between quick, or liquid, assets and
current liabilities. An asset is a liquid if it can be converted into cash immediately or reasonably soon
without a loss of value. Cash is the most liquid asset. Other assets that are considered to be relatively
liquid and included in quick assets are debtors and bills receivables and marketable securities
(temporary quoted investments). Inventories are considered to be less liquid. Inventories normally
require some time for realizing into cash; their value also has a tendency to fluctuate. The quick ratio
is found out by dividing quick assets by current liabilities.
44
3. Cash Ratio:
Since cash is the most liquid asset, it may be examined cash ratio and its equivalent to current
liabilities. Trade investment or marketable securities are equivalent of cash; therefore, they may be
1+
= 1+
2. Debt-Equity Ratio:
The relationship describing the lenders contribution for each rupee of the owners contribution is
called debt-equity (DE) ratio is directly computed by dividing total debt by net worth:
46
Net Profit
Net profit Ratio =
X 100
Sales
Net profit ratio establishes a relationship between net profit and sales and indicates and managements
in manufacturing, administrating and selling the products. This ratio is the overall measure of the
firms ability to turn each rupee sales into net profit. If the net margin is inadequate the firm will fail
to achieve satisfactory return on shareholders funds. This ratio also indicates the firms capacity to
withstand adverse economic conditions. A firm with high net margin ratio would be advantageous
position to survive in the face of falling prices, selling prices, cost of production.
Since taxes are not controllable by management, and since firms opportunities for availing tax
incentives differ, it may be more prudent to use before tax to measure ROI. Many companies use
EBITDA (Earnings before Depreciation, Interest, Tax and Amortization) instead of EBIT to calculate
ROI. Thus the ratio is:
EBIT
ROI=
Total Assets (TA)
47
48
49
Sales
Fixed Assets Turnover =
Fixed Assets
EBIT
Interest coverage ratio=
Interest
50
CHAPTER - 4
RESEARCH METHODOLOGY
51
RESEARCH
METHODOLOGY
The previous chapter discussed the objectives of this study and in this chapter I will discuss about the
research methodology which is followed to carry out this project i.e. the universe, locale of our study,
Sample selection, Data Collection, data analysis and field experience.
As in organizations like Larson & Turbo, Ratio Analysis constitute a major portion of its resources,
a thorough study of its Ratio analysis has been done broadly covering.
Research :Research is common parlance refers to a search for Knowledge. It is a define as a scientific and
systematic search for Pertinent information on a specific topic.
Research comprises defining and redefining problems, formulating hypothesis or suggested solution.
Collecting, organizing evaluating data, making deduction and reaching conclusion and at last carefully
testing the conclusions to determine whether they fit the formulating hypothesis.
Type of Research : Descriptive research :It includes survey and fact finding enquiries of different kinds. The major purpose of descriptive
research is description of the state of affairs as it exists at present. The main characteristic of this
method is that the researcher has no control over the variables. He can only report what has happened
or what happening.
Analytical research :In that the researcher has to use facts or information already available, and analyze these to make a
critical evolution of the material
52
SOURCES OF INFORMATION
The study is based on secondary data. However the primary data is also collected to fill the gap in the
information.
Secondary Data
1. The secondary data used is collected from the new paper and web sites
2. Secondary data collected from annual reports and also existing manuals and like company
records balance sheet and necessary records.
Sampling Size
Accounts of 4 year
LIMITATIONS:
53
Chapter 5
Data Analysis & Interpretation
54
55
Ratio Analysis
Ratio analysis is the process of the determining and presenting the relationship of the items and group
of items in the statements. Ratio can assist management in its basic functions of forecasting, planning,
coordination, control and communication.
Benefits to the company Helpful in analysis of financial statements
Helpful in comparative study
Helpful in locating the weak spots of the company
Helpful in forecasting
Estimate about the trend of the business
56
LIQUIDITY RATIOS
A class of financial matrices that is used to determine a companys ability pay off its short term debts
obligations. Generally, Higher the value of the ratio, the larger the margin of safety that the company
possesses to cover the short term ratio.
1. CURRENT RATIO:
Current ratio is calculated by dividing current assets by current liabilities.
Current assets
Current Ratio=
Current Liabilities
Year
Current Assets
Current Liabilities
Current Ratio
2011
34951
27823
1.26
2012
46074
36355
1.27
2013
49003
34730
1.41
2014
51114
38361
1.33
Current Ratio
1.45
1.41
1.4
1.35
1.3
1.33
1.27
1.26
1.25
1.2
1.15
2011
2012
2013
2014
INFERANCE:
In above table shown the current ratio of four years (2011-2014). The Current Ratio of Larsen &
ToubroLtd Varied from 1.26 to 1.33 with an average of 1.31 during the study period. The solvency
position of Larsen & ToubroLtd In terms of current ratio was above the standard norm volume of 2:1
for the entire period. The current Ratio in the year 2011-2012 was 1.26. This came down to 1.33 in
the last 1 years. This shows utilization of idle funds in the company
57
2. QUICK RATIO:
(Quick Assets=Current Assets-Inventories)
Quick Assets
Quick Ratio=
Current Liabilities
Year
Quick Assets
Current
Quick Ratio
Liabilities
2011
33374
27823
1.19
2012
44298
36355
1.21
2013
46939
34730
1.35
2014
49132
38361
1.20
Quick Ratio
1.4
1.35
1.35
1.3
1.25
1.2
1.19
1.21
1.2
1.15
1.1
2011
2012
2013
2014
INFERANCE:
The Ideal Ratio is 1:1 except in the first year the firms has a good capacity to pay of current
obligations immediately and is a test of liquidity. The high Quick Ratio indicates that the firm has the
ability to meet its current liabilities. The above table shows the Quick Ratio of four years (2011-2014).
The Quick Ratio of Larsen & ToubroLtd varied from 1.19 to 1.20 with an average of 1.23. It was
above the standard norm of 1:1 for the entire period. It confirms that the liquidity position of this
Larsen & ToubroLtd in terms of quick ratio was more than the standard.
58
3. CASH RATIO:
Cash + Marketable Securities
Cash Ratio =
Current Liabilities
Year
Cash
&
Bank Current
Cash Ratio
Balances
Liabilities
2011
1730
27823
0.062
2012
1778
36355
0.048
2013
1455
34730
0.041
2014
1782
38361
0.046
Cash Ratio
0.07
0.062
0.06
0.048
0.05
0.041
0.04
0.046
0.03
0.02
0.01
0
2011
2012
2013
2014
Cash Ratio
INFERENCE:
This Cash Ratio indicates that the capacity of the company to realize current liabilities with its
liquidity position. In the above Table the Cash Position Ratio of Four Years (2011-2014). The Cash
Ratio of Larsen & ToubroLtd has undergone many fluctuations. It started with high ratio at first by
0.062 in the year 2011; it was decreased to 0.048 by next year it was decreased in next year i.e.2013
to 0.0.41and increased to 0.046 in the year 2014.
59
LEVERAGE RATIOS
A leverage ratio is any of several financial measurement that look at how much capital comes in
the form of debt, or assesses the ability of a company to meet financial obligations.
1. DEBT RATIO
Total Liabilities
Debt ratio =
Total Assets
year
Total Liabilities
Total Assets
Ratio
2011
35263
56927
0.62
2012
42469
67690
0.62
2013
43031
72172
0.59
2014
44642
78302
0.57
Debt Ratio
0.63
0.62
0.62
0.62
0.61
0.6
0.59
0.59
0.58
0.57
0.57
0.56
0.55
0.54
2011
2012
2013
2014
Debt Ratio
INFERENCE:
The Ratios indicates that the company was taken more debt in the first two years and they same their
debt taken for further years. Table shows the Debt Ratio of four years (2011-2014).The Debt Ratio of
Larsen & ToubroLtd is started with 0.62 in the year 2011 and it was slightly constant to 0.62 in the
next year and decreased during the year 2013 to 0.59 and reached 0.57 in 2014.
60
Total liabilities
Debt equity ratio =
Shareholder Equity
Year
Total Liabilities
Shareholder
ratio
Equity
2011
35263
21846
1.61
2012
42469
25223
1.68
2013
43031
29142
1.47
2014
44642
33661
1.32
Debt-equity Ratio
1.32
1.61
2011
2012
2013
2014
1.47
1.68
INFERENCE: The standard norm for the ratio is 2:1. The actual debt-equity ratio in the above table
shows, the first two years less than the stand ratio after the ratio has decreased from 1.61 in 2011 to
1.68 in 2012. After that the ratio starts declining trend from 1.47 in 2013 and again down to 1.32 in
2014. This indicates from the study that the firm tries to reduce the debt and reducing financial risk
of the firm when both ratios of the years 2011 and 2014 are compared.
61
COVERAGE RATIOS
A measure of a company ability to meet its financial obligations. The higher the coverage ratio, the
better the ability of the enterprises fulfill its obligations to its lenders.
EBIT
Interest Coverage Ratio =
Interest
Year
EBIT
Interest
ratio
2011
5568
335
16.62
2012
6255
568
11.01
2013
5677
532
10.67
2014
6679
494
13.52
16.62
16
13.52
14
12
11.01
10.67
2012
2013
10
8
6
4
2
0
2011
2014
INFERENCE:
Interest coverage ratio 10 to 12 percent is considered an ideal. .The interest coverage ratio is highly
increased during the study period from 16.62 in 2011 to 10.67 in 2013 and gone raise to 13.52 in
2014.But these figures is indicates very high.
62
ACTIVITY RATIOS
Activity ratio are used to measure the relative efficiency of a firm based on its use of its assets, leverage
or other such balance items.
Net sales
inventory
Ratio
2011
53737
1577
34.07
2012
44296
1776
24.94
2013
52195
2064
25.28
2014
57163
1982
28.84
34.07
30
25
24.94
25.28
2012
2013
28.84
20
15
10
5
0
2011
2014
INFERENCE:
The Inventory Turnover Ratio increased and decreased on the buys of sales that sales increased. The
ratio increased because the year sales are increased. The ratio is decreased because the year sales are
decreased. In the above Table shows the Inventory Turnover Ratio of four years (2011-2014).The
inventory ratio of Larsen & ToubroLtd was started from 35.07 in the year 2011 and it was decreased
to 24.94 in the next year. It was increased to 25.28 in the year 2013, it increased slightly by next one
years.
63
Sales
Fixed Assets Turnover Ratio =
Fixed Assets
Year
sales
Fixed assets
ratio
2011
53757
18133
2.96
2012
44296
21616
2.04
2013
52195
23174
2.25
2014
57163
27188
2.10
2.96
2.5
2.25
2.04
2.1
1.5
1
0.5
0
2011
2012
2013
2014
INFERENCE:
Fixed assets turnover ratio was 2.96, 2.04, 2.25, 2.10 in respective years of 2011, 2012, 2013, and
2014 so the company achieved maximum fixed asset turnover ratio in 2011.
64
Year
sales
Current assets
ratio
2011
53757
34951
1.53
2012
44296
46074
0.96
2013
52195
49003
1.07
2014
57163
51114
1.11
1.07
0.96
2011
2012
2013
2014
INFERENCE:
In this chart it shows the current assets turnover ratio by which company is currently rotating the
assets for business purpose. It was highly purchased current assets by the end of the year 2014. The
Current Assets Turnover Ratio for the four years (2011-2014). Current assets turnover ratio was 1.53,
0.96, 1.07, 1.11in respective year of 2011, 2012, 2013, and 2014 so the company achieved maximum
Current assets turnover ratio in 2014.
65
Sales
Total Assets Turnover Ratio=
Total Assets
Year
Sales
Total assets
ratio
2011
53757
56927
0.94
2012
44296
67690
0.65
2013
52195
72172
0.72
2014
57163
78302
0.73
0.94
0.9
0.8
0.65
0.7
0.73
0.72
0.6
0.5
0.4
0.3
0.2
0.1
0
2011
2012
2013
2014
INFERENCE:
Total Assets Turnover Ratio of the company is rotating their assets into business purpose. It shows
that the company can able to rotate the total assets in the business. Above Table shows the Total
Assets Turnover Ratio for the period of four years (2011-2014). Total assets turnover ratio was 0.94
in 2011, 0.65 in 2012, 0.72 in 2013and 0.73in the year 2014.so this company earned last turnover ratio
in the year 2014.
66
PROFITABILITY RATIOS
Profitability ratios measure the companys use of its expenses to generate an acceptable rate of return.
Net Profit
Net profit Ratio =
X 100
Sales
Year
PAT
sales
Ratio
2011
3957
53757
7.36
2012
4456
44296
10.05
2013
4384
52195
8.39
2014
5493
57163
9.60
10
8
9.6
8.39
7.36
6
4
2
0
2011
2012
2013
2014
INFERENCE:
Net profit ratio was 7.36, 10.05, 8.39, and 9.60 in respective year of 2011, 2012, 2013 and 2014 so the
company achieved maximum Net profit ratio in 2012 and 2014.
67
EBIT
EBIT
ROI = ROTA =
=
Total assets
TA
Year
EBIT
Total assets
Ratio
Percentage%
2011
5568
56927
0.0974
9.74
2012
6255
67690
0.0925
9.25
2013
5677
72172
0.0786
7.86
2014
6679
78302
0.0852
8.52
8.52
9.74
7.86
9.25
2011
2012
2013
2014
INFERENCE:
Return on investment ratio was 9.74, 9.25, 7.86 and 8.52 in respective year of 2011, 2012, 2013 and
2014 so the company achieved maximum Return on investment ratio in 2012.
68
Year
PAT
2011
3957890000
608852126
6.85
2012
4456500000
612398899
7.27
2013
4384490000
615385981
7.12
2014
5493130000
926912658
5.92
6.85
7.27
7.12
5.92
6
5
4
3
2
1
0
2011
2012
2013
2014
INFERENCE:
Earnings per share ratio was 6.85, 7.27, 7.12 and 5.92 in respective year of 2011, 2012, 2013, and 2014.
So the company achieved maximum earning per share ratio in 2012.
69
CHAPTER 7
FACT & FINDING
70
Liquidity ratios have continuously gone under various fluctuations in the last four years. However the ratios
are more than the industry standard. This indicates excess cash is maintained in the organization.
1. Leverage ratios are as per the industry norm of 3:1 and it is more or less is maintained steadily
in 4 years.
2. Turnover ratios are also in line with the standards.
3. Although a net profit ratio has been maintained constantly in the last two years i.e. 2011, 2012
it has shown steady improvement in the last years.
4. Return on investments (ROI) and Return on equity (ROE) have declined drastically in 2013 and
slightly increased the last years.
71
Power
9%
Infrastructure
60%
Heavy Engineering
Power
Infrastructure
Others
The statistics of the apparels department shows that the company more revenue earned in
infrastructure sector.
The different Revenue Amount of each apparels areElectrical & Automation
= 3657 Crores
= 1897 Crores
Heavy Engineering
= 4291 Crores
= 5357 Crores
Power
= 5132 Crores
Infrastructure
= 34515 Crores
Others
= 2315 Crores
72
BALANCE SHEET
As at 31-3-2014
crore
crore
EQUITY AND LIABILITIES:
Shareholders Funds
Share capital A
Reserves and surplus
185.38
33476.45
As at 31-3-2013
crore
Crore
123.08
29019.64
33661.83
Non-current liabilities
Long term borrowings
Deferred tax liabilities (net)
Other long term liabilities
Long term provisions
5478.14
409.92
93.57
299.61
29142.72
7271.03
242.22
502.03
285.92
6281.24
Current liabilities
Short term borrowings
Current maturities of long term borrowings
Trade payables
Other current liabilities
Short term provisions
3876.04
2104.74
16345.45
13921.76
2113.52
8301.20
734.53
828.65
16932.65
14400.47
2083.81
38361.51
78304.58
TOTAL
ASSETS:
Non-current assets
Fixed Assets
Tangible assets
Intangible assets
Capital-work-in-progress
Intangible assets under development
7560.81
113.99
411.86
150.55
34980.11
72424.03
8218.75
86.39
491.05
105.79
8237.21
15168.41
3721.57
9.54
53.24
Non-current investments
Long term loans and advances
Cash and bank balances
Other non-current assets
Current assets
Current investments
Inventories
Trade receivables
Cash and bank balances
Short term loans and advances
Other current assets
4046.23
1982.53
21538.76
1782.86
6345.65
15418.58
5580.69
2064.18
22613.01
1455.66
5743.76
11790.66
51114.61
78304.58
TOTAL
73
8901.98
10522.70
3669.07
39.02
43.30
49247.96
72424.03
BALANCE SHEET
As at 31-3-2012
crore
crore
EQUITY AND LIABILITIES:
Shareholders Funds
Share capital
Reserves and surplus
122.48
25100.54
As at 31-3-2011
crore
crore
121.77
21724.49
25223.02
Non-current liabilities
Long-term borrowings
Deferred tax liabilities (net)
Other long term liabilities
Long-term provisions
5330.06
133.01
376.02
275.05
21846.26
5425.41
263.47
32.41
242.08
6114.14
Current liabilities
Short-term borrowings
Current maturities of long term borrowings
Trade payables
Other current liabilities
Short-term provisions
2936.72
1628.99
15752.81
13925.24
2112.04
5963.37
906.17
829.53
12853.42
12709.15
2002.10
36355.80
67692.96
TOTAL
Non-current assets
Fixed Assets
Tangible assets
Intangible assets
Capital work-in-progress
Intangible assets under development
29300.37
57110.00
7528.00
76.98
6569.06
75.13
697.53
61.15
748.20
23.14
8363.66
9084.71
4042.80
127.14
Non-current investments
Long-term loans and advances
Cash and bank balances
Current assets
Current investments
Inventories
Trade receivables
Cash and bank balances
Short term loans and advances
Other current assets
6787.19
1776.62
18729.84
1778.12
5085.24
11917.64
7283.98
1577.15
12427.61
1729.55
4908.23
11049.25
46074.65
67692.96
TOTAL
74
7415.53
7400.84
3317.06
0.80
38975.77
57110.00
RECOMMENDATIONS
1. The company has a good record of quality of goods in the market with best of my enquiry and
investigations.
2. They should see that the debtors should be collected within a specified time by the company.
So, that they can discharge some of its creditors or current liabilities and avoid payment of
interest.
3. Ratio analysis are immensely helpful in making a comparative of the financial statement for
several years.
4. The company financial position is very secure. It is observed that most of the ratios are as per
the industry standard.
75
CONCLUSIONS
After doing the individual as well as comparative analysis, we now are in a stage to provide a clear
picture of how well or worse the company is doing individually as well as in comparison to other
players of the industry.
The following table provides us with information regarding the results in a tabulated manner.
1. Against the backdrop of this challenging environment, your Company has turned in a
commendable performance on most key performance parameters. Order Inflows, which are
the mainstay of any company engaged predominantly in Engineering & Construction business,
clocked in at 94,108 Cr., representing a robust 15% growth over the previous year.
2. Company Turnover performance is good. Sometime are fluctuate turnover in 2012 decrease
turnover 44296 but 2013 & 2014 increase turnover 52195, 57173.
3. According to PAT (Profit after Tax) company always become in profit. Every year increase
profit
4. The unexecuted Order Book at the year-end stands at 162,952 Cr., thus providing a healthy
revenue and margin visibility over the next few years.
5. Company managed to keep project execution largely on track, and helped by robust growth in
overseas revenues, registered a 10% growth in Gross Revenues at 57,164 Cr. Profit after Tax
registered 5,493 Cr which translates to a growth of 25% over the previous year on a like-tolike basis.
6. It gives me pleasure to announce that your Company has recommended dividend of 14.25 per
equity share on a face value of 2 per share for the year. The corresponding dividend during
the previous fiscal was at 12.33 per equity share.
2011
2012
2013
2014
TURNOVER
(in crores)
53737
(In Crores.)
3957
(In Crores)
44296
(In Crores.)
4456
(In Crores)
52195
(In Crores.)
4384
(In Crores)
57163
(In Crores)
5493
(In Crores)
1.26
1.19
0.26
1.27
1.21
0.27
1.41
1.35
0.41
1.33
1.20
0.33
0.062
0.048
0.041
0.046
Debt Ratio
0.62
0.62
0.59
0.57
Debt-Equity
Ratio
Capital-Equity
Ratio
1.61
1.68
1.47
1.32
1.33
1.43
1.28
1.18
PAT
(in crores)
LIQIUDITY RATIO
Current Ratio
Quick Ratio
Net Working
Capital Ratio
Cash Ratio
LEVERAGE RATIO
76
COVERAGE RATIO
Interest Coverage
Ratio
ACTIVITY RATIO
Inventory
Turnover Ratio
Inventory
Conversion Ratio
Debtors
Turnover Ratio
Debtors
Collection Ratio
Net Assets
Turnover Ratio
16.62
11.01
10.67
13.52
34.07
24.94
25.28
28.84
11
14
14
12
4.32
2.36
2.30
2.65
83
152
156
135
2.48
1.75
1.79
1.69
Fixed Assets
Turnover Ratio
Current Assets
Turnover Ratio
Total Assets
Turnover Ratio
Working Capital
Turnover Ratio
PROBILITY RATIO
Net Profit Ratio
2.96
2.04
2.25
2.10
1.53
0.96
1.07
1.11
0.94
0.65
0.72
0.73
8.82
6.53
8.51
7.90
7.36
10.05
8.39
9.60
1035
14.12
10.87
11.68
Return On
Investment Ratio
Return On Equity
Ratio (ROE)
Earnings Per Share
Ratio (EPS)
9.74
9.25
7.86
8.52
18.11
20.39
15.04
16.31
6.85
7.27
7.12
5.92
77
BIBLIOGRAPHY
COMPANY REPORTS
BOOKS REFERRED
1. Khan, M.Y. and Jain, P.K., Financial Management, Tata McGraw-Hill, New Delhi.
2. Sekaran, U. and Bougie, R., Research Methods for Business, New Delhi, Wiley-India
Edition, 5th edition.
3. 2. Kothari, C.R., Research Methodology- Methods and Techniques, New Delhi, Wiley
Eastern Limited.
4. I.M Pandey, 2007, Financial Management, 9th Edition, Vikas publishing House private
Limited, New Delhi.
5. Prasanna Chandra 2002, Financial Management, 5th Edition, TATA- McGraw HILL, New
Delhi.
6. Beaver, W. (1977), "Financial Statement Analysis", Handbook of Modern Accounting, eds
Davidson, S. and Weil, R., 2nd ed. McGraw-Hill.
7. Bernstein, L. (1989), Financial Statement Analysis: Theory, application, and interpretation.
Richard D. Irwin, 4th edition.
8. Brealey, R., and Myers, S. (1988). Principles of Corporate Finance. McGraw-Hill, 3rd
edition.
WEBLIOGRAPHY
1. http://www.Larson & Tourbo.com
2. http://www. Larsen & Toubro wikipedia.com
3. http://www.Larsen & Toubro business unit.com
4. http://www.ratio analysis.com
78
TABLE OF LIST
Table No.
1
2
3
Table Name
Liquidity Ratio
Page No.
Current Ratio
Quick Ratio
Cash Ratio
57
58
59
Leverage Ratio
4
5
Debt Ratio
Debt Equity Ratio
60
61
Coverage Ratio
6
62
Activity Ratio
7
8
9
10
63
64
65
66
Profitability Ratio
11
12
67
68
13
69
79
GRAF OF LIST
Graf No.
1
2
3
Graf Name
Liquidity Ratio
Page No.
Current Ratio
Quick Ratio
Cash Ratio
57
58
59
Leverage Ratio
4
5
Debt Ratio
Debt Equity Ratio
60
61
Coverage Ratio
6
62
Activity Ratio
7
8
9
10
63
64
65
66
Profitability Ratio
11
12
67
68
13
69
80