Prince Final Project PDF

A
Project Report
On
A STUDY OF RATIO ANALYSIS AT

LARSEN & TOUBRO LIMITED
Submitted for
Partial fulfillment of the requirement for the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION
Submitted to
Pratap University, Jaipur

2014-2015
Supervised By: Miss Priyanka Meharia

Asst. Professor
Department of Management
Pratap University
Jaipur
Submitted By:Prince Kumar

BBA (5thsem)
Enroll no:-PU317013
Roll no: - BB130019
CERTIFICATE FROM GUIDE
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.
Miss Priyanka Meharia

Asst. Professor
Department of management
Pratap University, Jaipur
BONAFIDE AND FORWARDING CERTIFICATE
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.
(Dr. Jayashish Sethi)

HOD
Department of Management
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.
Chapter 1 Introduction of Project

1.1
1.2
1.3
1.4
2.
Introduction
Objective of study
Limitations of study
Introduction of Industry
12
13
14
15-17
Chapter 2 Company Profile

2.1 Introduction
2.2 Vision
19
20
2.3 Corporate HR Policy

2.4 Corporate Health Policy
21
22
2.5 Award & Recognition
23
2.6 Technology Hub & Partnerships
24-25
2.7 Facilities
26-27
2.8 Competitors
28
2.9 L&T Business
29-33
2.10 Company Management

2.11
3.
4.
5.
Page No.
34
Product & Services
35-36
2.12 Company Clients
37
2.13 Organization Structure
38
2.14 SWOT Analysis
39
Chapter - 3 Introduction Of Ratio

4.1 Introduction
41-42
4.2 Classification of Ratio
43-52
Chapter - 4 Research Methodology
53-55
Chapter 5 Data Analysis & Interpretation

Liquidity Ratio
5.1 Current Ratio
5.2 Quick Ratio
5.3 Cash Ratio
57
58
59
9
5.4 Leverage Ratio

5.5 Debt Ratio
5.6 Debt Equity Ratio
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
Earnings Per Share
69
6.
Chapter 6 Fact & Finding

6.1 Finding
6.2
6.3
6.4
6.5
71
Data & Chart

Recommendations
Conclusion
Bibliography
72-74
75
76-77
78
6.6 Table of list

6.7 Graph of list
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
OBJECTIVES OF THE STUDY
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.
1. To study the growth and development of the company.

2. To study the behavior of liquidity and profitability of the companies.
3. To analyze the factors determining the liquidity and profitability.
4. To comparative study of selected companies on the basis of selected ratios.
5. To Knowing financial position of company in the market.
13
LIMITATIONS OF THE STUDY

Ratio analysis is very important in revealing the financial position and soundness of the business. But,
in spite of its advantages, it has some limitations which restrict its use. These limitations should be
kept in mind while making use of ratio analysis for interpreting the financial the financial statements.
The following are the main limitations of ratio analysis:
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
Machinery & Industrial Product
Heavy Engineering
Metallurgical Material Handling
Power
Infrastructure
Others
Total Segment wise Order Inflow - 94108 Crores
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
L&T shall be a professionally managed

Indian multinational
Committed to total customer satisfaction
and enhacing shareholder value.
L&T- ies shall be an innovative,
Entrepreneurial and empowered team
Constantly creating value
And attaining global benchmarks.
L&T shall foster a culture of caring,
Trust and continuous learning
While meeting expectitions of
Employees, stakeholders and society.
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.
Incorporate EHS considerations in all business processes.

Ensure compliance with statutory and other applicable requirements.
Prevent adverse environmental impacts and occupational health and safety risks.
Conserve natural resources, minimize waste generation and environmental emissions.
Impart structured training and augment resources for effective EHS performance.
Encourage communication, consultation and collaboration with all stakeholders.
22
AWARDS & RECOGNITION

Corporate
2015
L&T Wins Award for Excellence in Power Project Execution
2014
F&S India Manufacturing Excellence Award for MFF-Hazira

L&T Wins Golden Peacock Award for Excellence in Corporate Governance
L&T Technology Services Wins Frost & Sullivan Excellence Award
L&T Wins Most Attractive Employer In Infrastructure Industry from Randstad
L&T Electrical & Automation's AU-Series Wins Best Product Award at ELECRAMA 2014
2013
L&T Wins D&B Top Infrastructure Company Award

L&T bags NDTV Profit Business Leadership Award
L&T Power Wins Golden Peacock National Quality Award
2012
L&T Voted Champion of Champions at the ABCI 52nd Annual Awards

L&T 9th in Global Ranking of Worlds Most Innovative Companies
L&T Top Engineering Company in Business Today Listing of Best Companies to Work For
FICCI Awards for Excellence in Quality Systems
L&T Ranks Among Top 10 in S&P ESG India Index
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
Mr. K. Venkataramanan Conferred BP Godrej Lifetime Achievement Award
2013
Mr. R. Shankar Raman is CFO of the Year - CNBC TV18
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
L&T Wins ICICI Foundation-CNBC TV 18 Inclusive India Award

L&T Ranks in Top 10 Companies for CSR The Economic Times
L&T Bags Best Sustainability Report Award 2014
L&T Power Wins National Energy Conservation Award
2013
L&T Wins ICC Corporate Governance & Sustainability Vision Award

L&T Heavy Engineering Bags CIIITC Sustainability Award
L&T Wins Corporate Citizen of 2013 - The Economic Times
National Good Design Award for L&Ts Solar Lantern
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 & PARTNERSHIPS

L&T's technology strength constitutes a strategic mix of in-house Research & Development and the
expertise of its joint venture partners. With a continuous focus on innovation, design and
development, the future is taking shape in L&T's Technology and Innovation centers around the
world.
This technology expertise is deployed across all businesses of L&T, ensuring added value to our
customers.
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
L&T Knowledge City, Gujarat
Vadodara Switchgear Works, Gujarat
Coimbatore, Tamil Nadu
Kansbahal Works, Odisha
Chennai, Tamil Nadu
Ahmednagar, Maharashtra
Mysore, Karnataka
26
Navi Mumbai, Maharashtra
Kattupalli, Tamil Nadu
Hazira, Gujarat
Mena
Jebel Ali, Dubai
Dammam, Saudi Arabia
Far East
Kuala Lumpur, Malaysia
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.
Metallurgical & Material Handling

The business undertakes EPC projects for ferrous and nonferrous metal industries, as well as bulk metal and ash handling
systems in the power, port, and steel and mining sectors.
Heavy Engineering
L&T Heavy Engineering operates at the upper end of the
technology spectrum. It manufactures and supplies custom
designed equipment to critical process industries such as
fertilizer, chemical, refinery etc., as well as to sectors such as
nuclear power, aerospace and defence.
29
Shipbuilding Defence & Merchant

L&Ts shipbuilding arm offers total solutions from concept to
design for new builds as well as repair and retrofit
for defense and commercial vessels.
Electrical & Automation

L&T Electrical & Automation offers a wide range of products
and solutions for electricity distribution and control, across
various sectors: industries, utilities, buildings, residences, marine
vessels and agriculture
Construction & Mining Machinery

L&Ts construction equipment business manufactures,
distributes and provides after-sales support for construction and
mining equipment.
L&T Valves
L&T Valves is a leader in flow-control solutions for critical
services. The business has a marketing network that spans the
globe and is reinforced through strategic alliances with
international distributors.
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 Technology Services

L&T Technology Services offers design and development
solutions through the entire development chain in multiple
industries. The Company has design and delivery locations in
six centers in India, as well as two delivery centers in the US.
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
Buildings and Factories

Heavy Civil Infrastructure
Transportation Infrastructure
Geo-Structure
Water & Effluent Treatment
Infrastructure - Concessions
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
Coal & Gas Power Plants

Nuclear Power Plants
Renewable Energy
Power Transmission & Distribution
Power Development - Projects
Turbines
Boilers
Plant Equipment
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
Process Plant Equipment

Valves
Special Steels & Forgings
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
Products, Systems & Equipment

A wide range of innovative products, equipment & systems
for various industries.
o
o
o
o
Electrical & Automation

Valves
Construction & Mining Equipment
Welding Alloys
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 &
PRODUCTS AND SERVICES

1. Construction
o
o
o
o
o
o
Buildings & Factories

Transportation Infrastructure
Heavy Civil Infrastructure
Water & Effluent Treatment
Renewable Energy
Power Transmission & Distribution
2. Construction & Mining Machinery

o
Construction & Mining Equipment
3. Electrical & Automation

o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
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
7. Metallurgical & Material Handling

o
35
8. Power
o
o
Coal Based Power Plants

Gas Based Power Plants
9. Power Development Limited

o
o
Thermal Power Projects

Hydro Power Projects
10.Rubber Processing Machinery

o
o
o
o
o
o
o
Mechanical Tyre Curing Presses

Hydraulic Tyre Curing Presses
Tyre Building Machines
Auxiliary Equipment
Spares
Tube Curing Presses
Bladder Curing Presses
11.Shipbuilding
o
o
o
New Construction - Defence Shipbuilding

New Construction - Commercial Shipbuilding
Ship Repairs, Refits & Conversions
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
(Heavy Engineering)
MR. S. N.
SUBRAHMANYAN
(Cons. & Infra)
38
MR. R. SHANKAR
RAMAN
Director & CFO
(Cons. & Infra)
MR. SHAILENDRA
ROY
(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
INTRODUCTION OF RATIO ANALYSIS
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
- short-term financial strength
Leverage ratios
- long-term financial strength
Profitability ratios
- long term earning power
Activity ratios
- term of investment utilization
Liquidity ratios measure the firms ability to meet current obligations;

Leverage ratios show the proportions of debt and equity in financing the firms assets;
Activity ratios reflect the firms efficiency in utilizing its assets; and
Profitability ratios measure overall performance and effectiveness of the firm
(A) LIQUIDITY RATIOS:

It is extremely essential for a firm to be able to meet the obligations as they become due. Liquidity
ratios measure the ability of the firm to meet its current obligations (liabilities). The liquidity
ratios reflect the short-term financial strength and solvency of a firm. In fact, analysis of liquidity
needs the preparation of cash budgets and cash and funds flow statements; but liquidity ratios, by
establishing a relationship between cash and other current assets to current obligations, provide a
quick measure of liquidity. A firm should ensure that it does not suffer from lack of liquidity, and
also that it does not have excess liquidity. The failure of a company to meet its obligations due to
lack of sufficient liquidity, will result in a poor credit worthiness, loss of credit worthiness, loss
of creditors confidence, or even in legal tangles resulting in the closure of the company. A very
high degree of liquidity is also bad; idle assets earn nothing.
The firms funds will be
unnecessarily tied up in current assets. Therefore, it is necessary to strike a proper balance

between high liquidity and lack of liquidity.
The most common ratios which indicate the extent of liquidity are lack of it, are:
(i) Current ratio
(ii) Quick ratio.
(iii)Cash ratio and
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.
(Quick Assets=Current Assets=Inventories)

Quick Assets
Quick Ratio=
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+
+ included in the computation of cash ratio:
Cash + Marketable Securities

Cash Ratio=
Current Liabilities
(B) LEVERAGE RATIO:

The short-term creditors, like bankers and suppliers of raw materials, are more concerned with the
firms current debt-paying ability. On other hand, ling-term creditors like debenture holders, financial
institutions etc. are more concerned with the firms long-term financial strength. In fact a firm should
have a strong short as well as long-term financial strength. In fact a firm should have a strong shortas well as long-term financial position. To judge the long-term financial position of the firm, financial
leverage, or capital structure ratios are calculated. These ratios indicate mix of funds provided by
owners and lenders. As a general rule there should be an appropriate mix of debt and owners equity
in financing the firms assets.
Leverage ratios may be calculated from the balance sheet items to determine the proportion of debt in
total financing.
1. DEBT RATIO:
Several debt ratios may be used to analyze the long term solvency of the firm the firm may be
interested in knowing the proportion of the interest bearing debt (also called as funded debt) in the
capital structure. It may, therefore, compute debt ratio by dividing total debt by capital employed or
net assets. Capital employed will include total debt and net worth
Total debt (TD)

Debt ratio =
Total debt (TD) + Net worth (NW)
Total debt (TD)

Debt Ratio=
Capital employed (CE)
45
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:
Debt - equity ratio =
Total debt (TD)

----------------------------------Net worth (NW)
(C) PROFITABILITY RATIOS:

A company should earn profits to survive and grow over a long period of time. Profits are essential,
but it world be wrong to assume that every action initiated by management of a company should be
aimed at maximizing profits, irrespective of concerns for customers, employees, suppliers or social
consequences. It is unfortunate that the word profit is looked upon as a term of abuse since some
firms always want to maximize profits ate the cost of employees, customers and society. Except such
infrequent cases, it is a fact that sufficient profits must be able to obtain funds from investors for
expansion and growth and to contribute towards the social overheads for welfare of the society.
Profit is the difference between revenues and expenses over a period of time (usually one year). Profit
is the ultimate output of a company, and it will have no future if it fails to make sufficient profits.
Therefore, the financial manager should continuously evaluate the efficiency of the company in terms
of profit. The profitability ratios are calculated to measure the operating efficiency of the company.
Besides management of the company, creditors and owners are also interested in the profitability of
the firm. Creditors want to get interest and repayment of principal regularly. Owners want to get a
required rate of return on their investment. This is possible only when the company earns enough
profits.
Generally, two major types of profitability ratios are calculated:
Profitability in relation to sales.
Profitability in relation to investment.
46
1. Net Profit Margin

Net profit is obtained when operating expenses; interest and taxes are subtracted from the gross profit
margin ratio is measured by dividing profit after tax by sales:
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.
2. Return on Investment (ROI)

The term investment may refer to total assets or net assets. The funds employed in net assets in known
as capital employed. Net assets equal net fixed assets plus current assets minus current liabilities
excluding bank loans. Alternatively, capital employed is equal to net worth plus total debt.
The conventional approach of calculating return of investment (ROI) is to divide PAT by investments.
Investment represents pool of funds supplied by shareholders and lenders.
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
3. Earnings per Share (EPS)

The profitability of the shareholders investments can also be measured in many other ways. One such
measure is to calculate the earnings per share. The earnings per share (EPS) are calculated by dividing
the profit after taxes by the total number of ordinary shares outstanding.
Profit after tax
EPS =
Number of share outstanding
4. Dividends per Share (DPS or DIV)

The net profits after taxes belong to shareholders. But the income, which they will receive, is the
amount of earnings distributed as cash dividends. Therefore, a large number of present and potential
investors may be interested in DPS, rather than EPS. DPS is the earnings distributed to ordinary
shareholders dividend by the number of ordinary shares outstanding.
Earnings paid to shareholders (dividends)

DPS=
Number of ordinary shares outstanding
(D) ACTIVITY RATIOS:

Funds of creditors and owners are interested in various assets to generate sales and profits. The better
the management of assets, the larger the amount of sales. Activity ratios are employed to evaluate the
efficiency with which the firm manages and utilizes its assets. These ratios are also called turnover
ratios because they indicate the speed with which assets are being converted or turned over into sales.
Activity ratios, thus, involves a relationship between sales and assets. A proper balance between sales
and assets generally reflects that assets are managed well. Several activity ratios are calculated to
judge the effectiveness of asset utilization.
48
1. Inventory Turnover Ratio:

Inventory turnover indicates the efficiency of the firm in producing and selling its product. It is
calculated by dividing the cost of goods sold by the average inventory:
Cost of goods sold

Inventory turnover Ratio =
Average inventory
(OR)
Net sales
Inventory
The average inventory is the average of opening and closing balances of inventory. The cost of goods
Sold may not be available so we can compute inventory turnover as sales divided by inventory
In a manufacturing company inventory of finished goods is used to calculate inventory turnover. This
inventory turnover ratio indicates whether investment in inventory is efficiently utilized or not. It,
therefore, explains whether investment in inventory in within proper limits or not.
2. Total Assets Turnover:

Some analysts like to compute the total assets turnover in addition to or instead of the net assets
turnover. This ratio shows the firms ability in generating sales from all financial resources committed
to total assets.
Thus:
Sales
Total Assets Turnover =
Total assets
Total Assets (TA) include net fixed Assets (NFA) and current assets (CA) (TA=NFA+CA)
3. Current Assets Turnover
A firm may also like to relate current assets (or networking gap) to sales. It may thus complete
networking capital turnover by dividing sales by net working capital.
Sales
Current assets turnover =
Current assets
49
4. Fixed Assets Turnover:

The firm to know its efficiency of utilizing fixed assets separately. This ratio measures sales in rupee
of investment in fixed assets. A high ratio indicates a high degree of utilization in assets and low ratio
reflects the inefficient use of assets
Sales
Fixed Assets Turnover =
Fixed Assets
(E) COVERAGE RATIO:

Interest Coverage Ratio:
Debt ratios described above are static in nature, and fail to indicate the firms ability to meet interest
(and other fixed charges) obligations. The interest coverage ratio or the times interest-earned is
used to test the firms debt-servicing capacity. The interest coverage ratio is computed by dividing
earnings before interest and taxes (EBIT) by interest charges:
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
Scope of the study:

The scope of the study is limited to collecting financial data published in the annual reports of the
company every year. The analysis is done to suggest the possible solutions. The study is carried out
for 4 years (2011-14).
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:
The study is based on only secondary data.
The period of study was 2011-14 financial years only.
53
Chapter 5
Data Analysis & Interpretation
54
DATA ANALYSIS & INTERPRETATION

There are so many methods for analysis of financial statements used in companies. Here the following
techniques are being used to analysis the Ratio analysis of L&T.
Financial statements have two major uses in financial analysis .first, they are used to present a
historical recover of the firms financial development. Second, they are used for a course of action for
the firm.
A performance financial statement is prepared for a future period. It is the financial managers
estimate of the firms future performance.
The operation and performance of a business depends on many individuals are collective decisions
that are continually made by its management team. Every one of these decisions ultimately causes a
financial impact, for better or works on the condition and the periodic results of the business. In
essence, the process of managing involves a series of economic choices that activates moments of
financial resources connected with the business.
Some of the decisions made by management one will be the major, such as investment in a new
facility, raising large amounts of debts or adding a new line of products or services. Most other
decisions are part of the day to day process in which every functional area of the business is managed.
The combine of effect of all decisions can be observed periodically when the performance of the
business is judged through various financial statements and special analysis.
Liquidity and Profitability:

Liquidity and profitability are two important demanders in determining the soundness of an enterprise.
Liquidity means ability of a firm to meet its current obligations when they become due for payment.
It has two aspects quantitative and qualitative. Qualitative aspect implies the quantum of current
assets a firm possesses irrespective of making any difference b/w various types of current assets such
as inventories, cash and so on. Qualitative aspect reforms the quality of current in terms of their
realization in to cash considering time dimension involved in maturing different components of
current assets.
Profitability is the capacity of earning profits and due most important measure of performance of
affirms. It is generally assumed that there is negative relationship b/w liquidity and profitability i.e.
higher liquidity results in lower profitability and vice-versa.
55
Cash Flow Statement

Cash flow statements are the statements of changes in the financial position prepared on the basis of
funds defined in cash or cash equivalents. In short cash flow statement summaries the cash inflows
and outflows of the firm during a particular period of time.
Benefits for the company To prepare the cash budget
To compare the cash budgets
To show the position of the cash and cash equivalents.
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
(Source: Annual Reports)
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
2. DEBT EQUITY RATIO:
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.
INTEREST COVERAGE RATIO:
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
Intrest Coverage ratio

18
16.62
16
13.52
14
12
11.01
10.67
2012
2013
10
8
6
4
2
0
2011
2014
Intrest Coverage ratio
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.
1. INVENTORY TURNOVER RATIO:

Cost of goods sold
Inventory turnover =
Average inventory
(Or)
Net sales
Inventory turnover =
Inventory
Year
Net sales
inventory
Ratio
2011
53737
1577
34.07
2012
44296
1776
24.94
2013
52195
2064
25.28
2014
57163
1982
28.84
Inveotory Turnover Ratio

40
35
34.07
30
25
24.94
25.28
2012
2013
28.84
20
15
10
5
0
2011
2014
Inventory turnover ratio
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
2. FIXED ASSETS TURNOVER RATIO:
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

3.5
3
2.96
2.5
2.25
2.04
2.1
1.5
1
0.5
0
2011
2012
2013
2014
FIXED ASSETS TURNOVER RATIO
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
3. CURRENT ASSETS TURNOVER RATIO:

Sales
Current assets turnover =
Current assets
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

1.11
1.53
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
4. TOTAL ASSETS TURNOVER RATIO:
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

1
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.
1. NET PROFIT RATIO
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
Net Profit Ratio

12
10.05
10
8
9.6
8.39
7.36
6
4
2
0
2011
2012
2013
2014
NET PROFIT RATIO
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
2. RETURN ON INVESTMENT RATIO:
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
Return on Investment Ratio
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
3. EARNINGS PER SHARE RATIO:
Profit after tax

EPS =
Number of share outstanding
Year
PAT
No of Equity shares Ratio%
2011
3957890000
608852126
6.85
2012
4456500000
612398899
7.27
2013
4384490000
615385981
7.12
2014
5493130000
926912658
5.92
Earnings Per Share Ratio

8
7
6.85
7.27
7.12
5.92
6
5
4
3
2
1
0
2011
2012
2013
2014
Earing per share ratio
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
FACT & FINDING

On the overall evaluation at each and every aspect, the following findings are found.
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
DATA & CHART

MAIN SEGMENT WISE REVENUE
The details of Revenue in different sessions in the store during the month of April March 2013-14.
Others Electrical & Machinery

Automotion& Industrial
Product
4%
7%
3%
Heavy Engineering
8%
Metallurgical Material
Handling
9%
Power
9%
Infrastructure
60%
Electrical & Automotion
Heavy Engineering
Metallurgical Material Handling
Power
Infrastructure
Others
Total Segment wise revenue - 57163 Crores
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
Metallurgical Material handling
= 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
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
Current assets
Current investments
Inventories
Trade receivables
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.
5. Company adopts proper inventory control techniques to properly management inventory.
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.
LARSEN & TOUBRO LTD.

Year/ Ratio
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
Net Profit On PAT
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
Annual reports of Larson & Turbo.

2013-14
2012-13
2011-12
2010-11
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
Interest Coverage Ratio
Activity Ratio
7
8
9
10

63
64
65
66
Profitability Ratio
11
12
Net Profit Margin Ratio

Return On Investment Ratio
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
Interest Coverage Ratio
Activity Ratio
7
8
9
10

63
64
65
66
Profitability Ratio
11
12
Net Profit Ratio

Return On Investment Ratio
67
68
13
69
80

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A

A STUDY OF RATIO ANALYSIS AT

Pratap University, Jaipur

Supervised By: Miss Priyanka Meharia

Submitted By:Prince Kumar

CERTIFICATE FROM GUIDE

Miss Priyanka Meharia

BONAFIDE AND FORWARDING CERTIFICATE

(Dr. Jayashish Sethi)

Chapter 1 Introduction of Project

Chapter 2 Company Profile

2.3 Corporate HR Policy

2.5 Award & Recognition

2.6 Technology Hub & Partnerships

2.9 L&T Business

2.10 Company Management

Product & Services

2.12 Company Clients

2.13 Organization Structure

2.14 SWOT Analysis

Chapter - 3 Introduction Of Ratio

4.2 Classification of Ratio

Chapter - 4 Research Methodology

Chapter 5 Data Analysis & Interpretation

5.4 Leverage Ratio

Earnings Per Share

Chapter 6 Fact & Finding

Data & Chart

6.6 Table of list

OBJECTIVES OF THE STUDY

1. To study the growth and development of the company.

LIMITATIONS OF THE STUDY

Machinery & Industrial Product

Metallurgical Material Handling

Total Segment wise Order Inflow - 94108 Crores

L&T shall be a professionally managed

Incorporate EHS considerations in all business processes.

AWARDS & RECOGNITION

L&T Wins Award for Excellence in Power Project Execution

F&S India Manufacturing Excellence Award for MFF-Hazira

L&T Wins D&B Top Infrastructure Company Award

L&T Voted Champion of Champions at the ABCI 52nd Annual Awards

Mr. K. Venkataramanan Conferred BP Godrej Lifetime Achievement Award

Mr. R. Shankar Raman is CFO of the Year - CNBC TV18

L&T Wins ICICI Foundation-CNBC TV 18 Inclusive India Award

L&T Wins ICC Corporate Governance & Sustainability Vision Award

TECHNOLOGY HUBS & PARTNERSHIPS

L&T Knowledge City, Gujarat

Vadodara Switchgear Works, Gujarat

Coimbatore, Tamil Nadu

Kansbahal Works, Odisha

Chennai, Tamil Nadu

Navi Mumbai, Maharashtra

Kattupalli, Tamil Nadu

Jebel Ali, Dubai

Dammam, Saudi Arabia

Kuala Lumpur, Malaysia

Metallurgical & Material Handling

Shipbuilding Defence & Merchant

Electrical & Automation

Construction & Mining Machinery

L&T Technology Services

Buildings and Factories