Financial performance analysis

A STUDY ON
FINANCIAL PREFORMANCE ANALYSIS OF
THULASI PHARMACISS INDIA PVT LTD
0

ACKNOWLEDGEMENT
I would like to express my gratitude and appreciation to all those who gave me the
possibility to complete this report. A special thanks to Mr.Senthil (Cluster
Accounts Manager) and Mr.V.Nagarajan (Deputy Manager Accounts-Water,
smart world and Communication IC) in Larsen & Toubro whose help,
stimulating suggestions and encouragement, helped me to coordinate my project
especially in writing this report.
I would also like to acknowledge with much appreciation the crucial role of the
staff of Larsen & Toubro Limited who helped me in collecting all required
information to complete the project report.
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TABLE OF CONTENTS
SL.NO CONTENT PAGE
NO.
1 Introduction to the Company 3-15
2 Literature Analysis 16-20
3 TheoreticalFramework 21-34
4 Data Analysis And Interpretation 35-75
5 Findings, SuggestionsAnd Conclusion 76-85
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CHAPTER-1
INTRODUCTION TO THE
COMPANY
3

Company Profile
Thulasi Pharmacies was started in the year 2001 by 2 leading pharma distributors with
the objective of providing a world class pharmacy at the lowest possible price. Thulasi has many
firsts to its credit:
buy medicines.
stored below 25°.
int full time pharmacists to man the pharmacies.
Thulasi now has 54 branches in 18 cities with an annual turnover of more than RS.130.00 crores.
Thulasi has more than 6 lakh regular customers.
We, at Thulasi strongly believe in maintaining high ethical standards in business. We also have a
strong sense of serving the community at large thru' various social service activities.
We, at Thulasi have channelized more 2500 blood donations in the past 4 years through our
Thulasi blood donors association. We have planted more than 3000 trees in various places. We
have been continuously conducting medical and health awareness camps.
We also support various organizations in conducting health, medical camps. We have been
annually conducting a handwriting competition for school children in which more than one lakh
children participated last year.
Mission Statement
 To provide world class pharmacy services to the ailing.
 To provide quality medicines at affordable prices.

 To prevent abuse of Medicines.
 To educate patients on safe use of medicines.
 Ensure availability of Medicines.
 To be a responsible corporate citizen.
Vision Statement
 To become a 100 crores company by 2010 -2011.
 To become the No.1 pharmacy in South India by 2015.
 To Become a Nationwide Pharmacy chain by 2020.
Services
Free Home Delivery
All our Branches will deliver medicines at home to customers free of cost(Minimum purchase
value Rs 200)
This facility is available only for cash bill.
Money will be collected by our Sales personnel during door delivery.
Please call concerned branch for home delivery servicies.
Door delivery is provided within 5 Kms only.
Free Health Checkup
T his service is free to all customers visiting our branches.
Blood pressure, Pulse, Height, Weight, BMI Ratio will be measured/maintained by our counselor
at our branches
Blood glucose monitoring at reasonable charge.
Blood grouping test also available in some selected outlets.
Blood Donors Database
For your emergency blood transfusion. Please contact your nearest Thulasi outlet.
Please register your name and get blood donors card from our branches
Free Drug Counseling

Our counselor will answer all your drug related questions.
Please feel free to ask any drug related questions to our counselors.
Some health related free pamplets are availabe from our counselor.
Counselor will explain all your questions related to various drug delivery equipments such
neublizer,insulin pen or glucometer etc
Camp Activities
We at Thulasi Pharmacy have been continuously conducting various free medical camps at many
locations throughout Tamilnadu. Through our camps we strive to create medical awareness
among various sections of our society. We have conducted many awareness camps for school
and college students. Our camps have received good response and we are planning to increase
the frequency of conducting such camps and also to newer locations.
Below are the types of tests carried out at our free medical camps.
 Blood Sugar
 Blood Pressure
 Body Mass Index
 Bone Mineral Density
 Asthma Test
 Eye Test
 Dental Test
 Hb %
 Cancer Awareness Programme
15

CHAPTER 2
LITERATURE ANALYSIS
16

Noel Capon, John U. Farley, Scott Hoenig, Determinants of Financial
Performance: A Meta-Analysis
A meta-analysis of results from 320 published studies relates environmental,
strategic and organizational factors to financial performance. Some factors (e.g.,
concentration and growth) have been studied widely and have a relatively
consistent positive impact on performance. Other widely-studied factors (e.g., size)
have few consistent effects. Many factors (particularly organizational variables)
are understudied.
William L. Megginson, RobertC. Nash And Matthias Van Randenborgh.The
Financial and Operating Performance of Newly Privatized Firms: An International
Empirical Analysis
This study compares the pre- and post-privatization financial and operating
performance of 61 companies from 18 countries and 32 industries that experience
full or partial privatization through public share offerings during the period 1961
to 1990
Amalendu Bhunia, Sri Somnath Mukhuti and Sri Gautam Roy, Financial
Performance analysis – A case study
The Pressent study aims to identify the financial strength of the public sector
pharmaceutical enterprises by properly establishing relationships between the
items of the balance sheet and the profit and loss account. The study two public
sector drug and pharmaceutical enterprises listed on BSE. The study has been
undertaken for a period of twelve years from 1997-98 to 2010-09 and the necessary
data have been obtained from CMIE database.
17

Brian K. Boyd, Strategic planning and financial performance: A meta-analysis
Review
After two decades of research, the effect of strategic planning on a firms
performance is still unclear. While some studies have found significant benefits
from planning others have found no relationship, or even small negative effects.
Interpretation of these is confounded by the act that many of these studies base
their findings on a small number of firms.
Juliet D’Souza and William L. Megginson, The financial operating performance
of privatized firms during the 1990‟s
This study compares the pre and the post-privatization financial and operating
performance of 85 companies from 28 industrialized countries that are privatized
through public share offerings between 1990 and 1996. We document significant
increases in profitability, output, operating efficiency and dividend payments and
there is a significant decrease in leverage ratios for our full sample of firms after
privatization and for most subsamples examined.
According to Rajiv and Mishra, Balance Sheet, P&L a/c and cash flow statement
contain a lot of numbers that can be used to draw some meaningful inferences,
these inferences can further be used as the inputs for planning, decision making.
The numbers contained in the financial statements carry a host of information that
can be put to use in making judgments‟ regarding financial strength and weakness
of the firm, efficiency and past policies and remedial measures or corrective action
to be taken. Financial management, Rajiv Srivastava, Anil Mishra, Oxford
university press, Pg No: 25Accounting for Management T.Vijaya Kumar McGraw
Hill Publications Pg No: 23.1
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According to Slhler, A comprehensive analysis, presenting data in meaningful
terms is a significant aid to understanding the profitability and financial strength of
a company. When properly prepared, financial evaluations can be used in
performance appraisal and to highlight
similarities and differences among unit of the same organization.
According to Van Horne, Wachowicz, Financial analysis involves the use of
various financial statements. The Balance Sheet summarizes the assets, Liabilities
and owner‟s equity of a business at the moment in time, usually the end of the year
or the quarter. Financial statement analysis is the art of transforming data from
financial statements into information that is useful for informed decision making.
Financial management: Theory and Practice, Slhler Crawford Davis, Jaico
Publication, Pg No: 47. Fundamentals of financial management, James C. Van
Horne, John M.Wachowicz, PHI publications 13th
edition, Pg: 128.
According to Prasanna Chandra, Analysis of Financial Statement s is of internet
to lenders, investors, security analyst, managers, corporate boards, regulators and
others. Financial statement analysis may be done for a variety of purposes, which
may be range from simple analysis of the short term liquidity position of a firm to
a comprehensive assessment of the strength and weakness of the firm in various
areas. It is helpful in accessing corporate excellence, judging creditworthiness,
forecasting bond ratings; predict bankruptcy, and accessing market risk.
Amir (1993) was the first to use the term “value relevance” in the context of
information content of accounting figures. An accounting figure/ratio value
relevant is it has the significantly strong predicted association with the stock prices
and stock market indicators such, price-earnings (P/E) or price to book (P/B)
ratios. Misund et al. in their study on the value of relevance of accounting figures
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in the international oil and gas industry concluded that all accounting figures are
value relevant, be it cash or accrual based.
According to Ohlson(1995) depicted in his work that the value of a firm can be
expressed as a linear function of book value, earnings and other value relevant
information. Financial management theory and practice Prasanna Chandra 7th
edition 2010 TATA McGraw Hill Pg No: 69
Amir, E.Harris, T.S & Venuti, E.K (1993) “A comparison of the value
relevance of U.S.P-632 Ohlson (1995) depicted in his work that the value of the
firm can be expressed. Pg No-454
Mingyi Hung (2000) in his paper on “accounting standards and the value
relevance of financial statements: An international Analysis” concluded that the
use of accrual accounting (versus the cash accounting) negatively affects the value
relevance of financial statements in countries with weak shareholder protection.
According to Liu, Nissim and Thomas (2004), we found that multiples based on
reported earnings outperform multiples based on a variety of reported operating
cash flow measures. EPS forecasts represented substantially better summary
measures of value than did operating cash forecasts in all five countries examined,
and this relative superiority was absorbed in most of the industries. Hardly any
studies have been done in the area of investing value relevance of financial
statements based on Indian Accounting Standards. This may be probably because
it‟s just ten years that due to a number of reforms, Indian economy has divulged
into a market-oriented economy. Further, most of the accounting standards have
been developed during last six years by the ICAI. Prior to this, due concerns were
not involved in improving the quality and integrity of financial reporting
20

CHAPTER: 3
THEORETICAL FRAMEWORK
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2.1 FINANCIAL PERFORMANCE ANALYSIS
2.1.1 MEANING AND DEFINITION
The word „Performance is derived from the word „parfourmen‟, which means „to
do‟, „to carry out‟ or „to render‟. It refers the act of performing; execution,
accomplishment, fulfillment, etc. In border sense, performance refers to the
accomplishment of a given task measured against preset standards of accuracy,
completeness, cost, and speed. In other words, it refers to the degree to which an
achievement is being or has been accomplished. In the words of Frich Kohlar “The
performance is a general term applied to a part or to all the conducts of activities of
an organization over a period of time often with reference to past or projected cost
efficiency, management responsibility or accountability or the like. Thus, not just
the presentation, but the quality of results achieved refers to the performance.
Performance is used to indicate firm‟s success, conditions, and compliance.
Financial performance refers to the act of performing financial activity. In broader
sense, financial performance refers to the degree to which financial objectives
being or has been accomplished. It is the process of measuring the results of a
firm's policies and operations in monetary terms. It is used to measure firm's
overall financial health over a given period of time and can also be used to
compare similar firms across the same industry or to compare industries or sectors
in aggregation.
Financial performance analysis is the process of identifying the financial strengths
and weaknesses of the firm by properly establishing the relationship between the
items of the balance sheet and profit & loss account. It also helps in short term and
long term forecasting. Growth of the company can also be identified with the help
of financial performance analysis. The dictionary meaning of analysis is to resolve
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or separate a thing into its element or components part for tracing their relation to
the things as whole and to each other. The analysis of financial statement is a
process of evaluating the relationship between the component parts of financial
statement to obtain a better understanding of the firm‟s position and performance.
This analysis can be undertaken by management of the firm or by parties outside.
In short, the firm itself as well as various interested groups such as managers,
shareholders, creditors, tax authorities, and others seeks answers to the following
important questions:
1. What is the financial position of the firm at a given point of time?
2. How is the Financial Performance of the firm over a given period of time?
These questions can be answered with the help of financial analysis of a firm.
Financial analysis involves the use of financial statements. A financial statement is
an organized collection of data according to logical and Conceptual Framework 50
consistent accounting procedures. Its purpose is to convey an understanding of
some financial aspects of a business firm. It may show a position at a moment of
time as in the case of a Balance Sheet, or may reveal a series of activities over a
given period of time, as in the case of an Income Statement. Thus, the term
„financial statements‟ generally refers to two basic statements: the Balance Sheet
and the Income Statement. The Balance Sheet shows the financial position of the
firm at a given point of time. It provides a snapshot and may be regarded as a static
picture.
“Balance sheet is a summary of a firm‟s financial position on a given date that
shows Total assets = Total liabilities + Owner‟s equity.” The income statement
(referred to in India as the profit and loss statement) reflects the performance of the
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firm over a period of time. “Income statement is a summary of a firm‟s revenues
and expenses over a specified period, ending with net income or loss for the
period.” However, financial statements do not reveal all the information related to
the financial operations of a firm, but they furnish some extremely useful
information, which highlights two important factors profitability and financial
soundness. Thus analysis of financial statements is an important aid to financial
performance analysis.
Financial performance analysis includes analysis and interpretation of financial
statements in such a way that it undertakes full diagnosis of the profitability and
financial soundness of the business. The analysis of financial statements is a
process of evaluating the relationship between component parts of financial
statements to obtain a better understanding of the firm‟s position and performance.
The financial performance analysis identifies the financial strengths and
weaknesses of the firm by properly establishing relationships between the items of
the balance sheet and profit and loss account. The first task is to select the
information relevant to the decision under consideration from the total information
contained in the financial statements. The second is to arrange the information in a
way to highlight significant relationships. The final is interpretation and drawing of
inferences and conclusions. In short, “financial performance analysis is the process
of selection, relation, and evaluation.”
2.1.2 SIGNIFICANCEOF FINANCIAL PERFORMANCEANALYSIS
Interest of various related groups is affected by the financial performance of a firm.
Therefore, these groups analyze the financial performance of the firm. The type of
analysis varies according to the specific interest of the party involved. The
following are some of the parties interested in financial performance analysis.
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 Trade creditors: Trade creditors interested in the liquidity of the firm

(appraisal of firm‟s liquidity)

 Bond holders: Bond holders interested in the cash-flow ability of the firm.

 Investors: Investors interested in present and expected future earnings as
well as stability of these earnings

 Management: Management interested in internal control, better financial
condition and better performance (appraisal of firm‟s present financial
condition, evaluation of opportunities in relation to this current position,
return on investment provided by various assets of the company, etc.)
2.1.3 TYPES OF FINANCIAL PERFORMANCEANALYSIS:
Financial performance analysis can be classified into different categories on the
basis of material used and modes operandi as under:
1. Material used
On the basis of material used financial performance can be analyzed in following
two ways:
a. External analysis: This analysis is undertaken by the outsiders of the business
namely investors, credit agencies, government agencies, and other creditors
who have no access to the internal records of the company. They mainly use
published financial statements for the analysis and as it serves limited purposes.
b. Internal analysis: This analysis is undertaken by the persons namely executives
and employees of the organization or by the officers appointed by government
or court who have access to the books of account and other information related
to the business.
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2. Modus operandi
On the basis of modus operandi financial performance can be analyze in the
following two ways:
a. Horizontal Analysis: In this type of analysis financial statements for a number of
years are reviewed and analyzed. The current year‟s figures are compared with the
standard or base year and changes are shown usually in the form of percentage.
This analysis helps the management to have an insight into levels and areas of
strength and weaknesses. This analysis is also called Dynamic Analysis as it based
on data from various years.
b. Vertical Analysis: In this type of Analysis study is made of quantitative
relationship of the various items of financial statements on a particular date. This
analysis is useful in comparing the performance of several companies in the same
group, or divisions or departments in the same company. This analysis is not much
helpful in proper analysis of firm‟s financial position because it depends on the
data for one period. This analysis is also called Static Analysis as it based on data
from one date or for one accounting period.
2.1.4 TECHNIQUES OR TOOLS OF FINANCIAL PERFORMANCE
ANALYSIS
An analysis of financial performance can be possible through the use of one or
more tools / techniques of financial analysis:
2.1.4.1 Ratio Analysis
Ratio analysis is an important and age-old technique. It is a powerful tool of
financial Analysis. It is defined as “The indicated quotient of two mathematical
expressions” and as “the relationship between two or more things” .Systematic use
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of ratio is to interpret the financial statement so that the strength and weakness of a
firm as well as its historical performance and current financial condition can be
determined. A ratio is only comparison of the numerator with the denominator
.The term ratio refers to the numerical or quantitative relationship between two
figures. Thus, ratio is the relationship between two figures and obtained by
dividing a former by the latter. Ratios are designed show how one number is
related to another. The data given in the financial statements are in absolute form
and are dumb and are unable to communicate anything. Ratios are relative form of
financial data and are very useful technique to check upon the efficiency of a firm.
Some ratios indicate the trend or progress or downfall of the firm. In the view of
the requirements of the various users of ratio, it is divided in to the following
important categories.
 Liquidity ratios

 Activity ratios

 Profitability ratios

 Earnings ratios
2.1.4.2Comparative balance sheet:
The comparative balance sheet is helpful in analyzing and evaluating the financial
position of the firm over a period of years. The comparative balance sheet analysis
is the study of the trend of the same items, group of items, and computed items in
two or more balance sheet of the same business enterprise on different dates.
The changes in periodic balance sheet items reflect the conduct of a business. The
changes can be observed by comparison of the balance sheet at the beginning and
at the end of the period and these changes can help in forming an opinion about the
progress of an enterprise
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2.1.4.4Commonsize balance sheet:
Financial statements when read in absolute figure are not easily understandable.
They are even misleading. Each items of asset is converted in to percentage to total
asset and each item of capital and liabilities is expressed to total liability and
capital fund. Thus the whole balance sheet is converted in to percentage form i.e.,
every individual item stated as a percentage of total 100.such converted balance
sheet is known as common size balance sheet. The percentage so calculated can be
easily compared with the corresponding percentages in some other period.
2.1.4.5Trend analysis:
The „trend‟ signifies a tendency and as such the review and appraisal of tendency
in accounting variables are nothing but the trend analysis. Trend analysis is carried
out by calculating trend ratio. Trend analysis is significant for forecasting and
budgeting. Trend analysis discloses the change in financial and the operating data
between specific periods.
2.1.5 CASHFLOW STATEMENT
In financial accounting, a cash flow statement, also known as statement of cash
flows, is a financial statement that shows how changes in balance sheet accounts
and income affect cash and cash equivalents, and breaks the analysis down to
operating, investing and financing activities. Essentially, the cash flow statement is
concerned with the flow of cash in and out of the business. The statement captures
both the current operating results and the accompanying changes in the balance
sheet. As an analytical tool, the statement of cash flows is useful in determining the
short-term viability of a company, particularly its ability to pay bills. International
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Accounting Standard 7 (IAS 7), is the International Accounting Standard that deals
with cash flow statements.
The cash flow statement is partitioned into three segments, namely:
1. cash flow resulting from operating activities;
2. cash flow resulting from investing activities;
3. cash flow resulting from financing activities.
2.1.6 W0RKING CAPITAL MANAGEMENT
DEFINITION:
A managerial accounting strategy focusing on maintaining efficient levels of both
components of working capital, current assets and current liabilities, in respect to
each other. Working capital management ensures a company has sufficient cash
flow in order to meet its short-term debt obligations and operating expenses.
Working capital = current asset – current liabilities
There are three main components associated with working capital management:
accounts receivable, accounts payable and inventory.
The efficient management of working capital is essential for the profitability and
overall financial health of any company. Working capital is the cash that
companies use to operate and conduct their businesses. The components, or
aspects, of working capital that investors and analysts assess to evaluate a company
are the key elements for a company's cash flow – money coming in, money going
out and management of inventory.
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ACCOUNTS RECEIVABLE
Accounts receivable are revenues due – what is owed to a company by its
customers for sales made. Timely, efficient collection of accounts receivable is
essential to a company's smooth financial operation. Accounts receivable are listed
as assets on a company's balance sheet, but they are not actually assets until they
are collected. A common metric analysts use to assess a company's handling of
accounts receivable is days sales outstanding, which reveals the average number of
days a company takes to collect sales revenues.
ACCOUNTS PAYABLE:
Accounts payable, the money that a company is obligated to pay out over
the short term, is also a key component of working capital management.
Companies seek to strike a balance between maintaining maximum cash flow by
delaying payments as long as is reasonably possible and the need to maintain
positive credit ratings and good relationships with suppliers and creditors. Ideally,
a company's average time to collect receivables is significantly shorter than its
average time to settle payables.
INVENTORY
Inventory is a company's primary asset that it converts into sales revenues.
The rate at which a company sells and replenishes its inventory is an important
measure of its success. Investors consider the inventory turnover rate to be an
indication of the strength of sales and as a measure of how efficient the company is
in its purchasing and manufacturing process. Inventory that is too low puts the
company in danger of losing out on sales, but excessively high inventory
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How does working capital managementaffectcorporate earnings?
A company that does not manage working capital effectively is less
profitable and could potentially face financial insolvency. Working capital is
the money used by a business to fund its daily operations. It can be looked at
as essentially the financing for the transformation of basic materials into
finishedgoods.
Three key components of working capital are inventory, accounts payable
and accounts receivable. Each of these elements is examined by analysts for
indications of a company's financial soundness and operational efficiency.
The longer it takes a company to turn raw materials into sales revenues, the
longer the company‟s working capital is tied up and cannot be utilized for
growing its business and increasing profits. If a company‟s working capital
is tied up for an extended period of time, it may have to take on additional
financing to bridge the gap in cash flow. Efficient working capital
management thus helps keep a company's total debt level down.
 Companies do not all face the same situations in terms of operational cash
flow. For example, hospitals receive co-pays from patients at the time of
delivery of services and then receive the remainder some time later from
insurance companies. Timely collection of accounts receivables is of
paramount importance. Large retail companies do not face such accounts
receivable issues since customers pay for goods immediately. The issue for
these kinds of businesses is more in the area of inventory management.

 Evaluating the working capital management of a company is important for
investors as it is indicative of how efficiently a company is handling cash,

31

how likely it is to be profitable
Adequately managing working
survival of a company.
and how much potential it has for growth.
capital is critical for the basic financial
Objectives of the Study
Primary Objectives
To study the profitability at L&T Constructions
SecondaryObjectives
To study all the financial statements for the past five years to identify the changes
in various items present in them.
To examine the impact of the changes in the financial statement on the financial
position and the profitability of the organisation
Preparation of the common size statements to understand the composition of
various assets and liabilities in the balance sheet
32

To find future trend of selected items for next 5 years
Calculation of liquidity ratios, profitability ratios and operational ratios in order to
ascertain the financial significance of the figure contained in the financial
statements by establishing relationships between them
To examine the relationship that exists between sales and inventories by using Karl
Pearson‟s Correlation co-efficient.
Scope of the Study
The study, which is done at the L&T construction, aims at forecasting profitability.
Profitability analysis is a process of understanding the financial strength and
weakness between the various items of balance sheet and profit and loss account,
profitability analysis is therefore very important and crucial aspect of every
company has to undertake as it is starting for making plans and has to be done
using any sophisticated forecasting and procedures. The above study will help the
organization to identify the adverse condition and would help in taking necessary
steps.
NeedFor the Study
Forecasting profitability is one of the tools for controlling costs and maximizing
profits. It is useful management tool for comparing the performance with pre
planned performance with a view to attain equilibrium between ends and meanings
outputs and efforts. It corrects the deviation from pre-planned path through the
media observation, research planning, control and decision making and thus helps
in performance of future activities in an orderly way. It uncovers uneconomic in
operations, weaknesses in organization structure and minimizes wasteful spending.
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Prediction helps the firm to control expenses and attains its objective in a profitable
manner
METHODOLOGY
The research method used is analytical research. In this type of research the
researcher uses the facts and information already available and analyses them
to make a critical of the material.
ResearchDesign
The research is designed in such a way to mainly concentrate on data
collected through secondarymode.
Sources and Collectionof Data
For the purposeof this study only secondarydata have been used to a large extent.
Source of Data
The main sourceof data of the study was the annual reports of L&T
constructions, internet sources, books and articles.
Tools
1. Schedule changes in working capital
2. Common size balance Sheet
3. Ratio analysis
4. Trend Analysis
5. Comparative balance sheet analysis
34

CHAPTER: 4
DATA ANALYSIS AND
INTERPRETATION
35

COMPARTIVE STATEMENT ANALYSIS OF L& T FOR THE YR 2015-16
PARTICULAR CY 2012 ( rs in crore ) BY 2011( rs in crore) INC / DEC ( RS ) INC/ DEC ( %)
NON CURRENT ASSETS
FIXED ASSET
tangibleassets 14113.7 10899.6 3214.2 29.5
intangibleassets 5287.0 4724.6 562.4 11.9
captial wip 7878.8 7392.9 485.9 6.6
goodwill on consolidation 0.0 0.0
intangibleassets under development 7033.9 4969.5 2064.5 41.5
NON CURRENT INVESTMENTS 1564.9 1503.3 61.5 4.1
LONG TERM LOANS AND ADVANCES 1900.8 2188.4 -287.6 -13.1
CASH AND BANK BALANCES 143.6 0.8 142.8 17845.0
OTHER NON CURRENT ASSETS 201.7 95.1 106.6 112.1
DEFERRED TAX ASSET ( NET) 129.0 20.7 108.4 523.7
LONG TERM LOANS AND ADVANCES TOWARDS FA 16605.9 10358.6 6247.3 60.3
CURRENT ASSETS
CURRENT INVESTMENT 7224.6 7712.4 -487.8 -6.3
INVENTORIES 4229.9 3040.3 1189.6 39.1
TRADE RECEIVABLES 20405.4 14119.5 6285.9 44.5
CASH AND BANK BALANCES 3378.6 3644.6 -266.1 -7.3
SHORT TERM LOANS AND ADV 5591.5 4184.3 1407.2 33.6
SHORT TERM LOANS AND ADV TOWARDS FA 8167.3 7352.1 815.2 11.1
OTHER CURRENT ASSETS 15137.9 12527.6 2610.3 20.8
TOTAL 118994.3 94734.1 24260.2 25.6
EQUITY AND LIABILITES
NON - CURRENT LIABILITES
LONG TERM BORROWINGS 36155.6 24841.1 11314.6 45.5
DEFERRED TAX LIABLITES( NET) 210.9 331.6 -120.7 -36.4
OTHER LONG TREM LIAB 1059.6 252.1 807.4 320.2
DEFFERED PAYMENT LIAB FOR ACQUISTION OF F.A 3953.6 4417.8 -464.2 -10.5
LONG TERM PROVISIONS 312.2 274.3 37.9 13.8
CURRENT LIABILITES
SHORT TERM BORROWINGS 5778.1 4036.8 1741.2 43.1
CURRENT MATURITIES OF LTB 5216.4 3920.4 1296.0 33.1
TRADE PAYABLES 16716.5 14687.7 2028.8 13.8
SHORT TERM PROVISONS 2343.1 2246.8 96.3 4.3
CURRENT MATURITIES OF DEFERRED PAY LIAB FOR ACQ OF F.A 464.1 93.9 370.2 394.2
OTHER CURRENT LIABILITES 15644.2 13555.2 2089.0 15.4
SHARE HOLDERS FUNDS
SHARE CAPTIAL 122.5 121.8 0.7 0.6
RESERVE AND CAPITAL 29264.3 24928.8 4335.5 17.4
MINORITY INTEREST 1753.5 1026.0 727.5 70.9
TOTAL EQUITY AND LIABILITES 118994.3 94734.1 24260.2 25.6
BY-Base Year , CY- Current Year
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COMPARTIVE B/S STATEMENT OF L&T FOR YR 2012-13
PARTICULAR
CY 2013 BY2012 ( INC./ INC./ DEC
(in crore ) in crore) DEC. ( RS ( %)
NON CURRENT ASSETS
FIXED ASSET
tangible assets 20816.2 14113.7 6702.4 47.5
intangible assets 7453.3 5287.0 2166.3 41.0
captial wip 4061.1 7878.8 -3817.7 -48.5
goodwill on consolidation 2119.8 0.0 2119.8 0.0
intangible assets under development 7289.4 7033.9 255.5 3.6
NON CURRENT INVESTMENTS 1224.2 1564.9 -340.7 -21.8
LONG TERM LOANS AND ADVANCES 2258.6 1900.8 357.9 18.8
OTHER NON CURRENT ASSETS 148.2 201.7 -53.5 -26.5
CURRENT ASSETS
CURRENT INVESTMENT 7543.3 7224.6 318.7 4.4
INVENTORIES 5169.5 4229.9 939.6 22.2
TRADE RECEIVABLES 23011.3 20405.4 2606.0 12.8
SHORT TERMLOANS AND ADV 6171.5 5591.5 580.1 10.4
SHORT TERMLOANS AND ADV TOWARDS FA 10160.1 8167.3 1992.8 24.4
TOTAL 143122.2 118994.3 24127.9 20.3
DEFERRED TAX LIABLITES(NET) 377.9 210.9 167.0 79.2
OTHER LONG TREMLIAB 1160.9 1059.6 101.3 9.6
DEFFERED PAYMENT LIAB FOR ACQUISTION OF F.A 3481.5 3953.6 -472.1 -11.9
CURRENT LIABILITES
SHORT TERMBORROWINGS 7965.8 5778.1 2187.7 37.9
CURRENT MATURITIESOF LTB 7313.7 5216.4 2097.4 40.2
TRADE PAYABLES 18053.7 16716.5 1337.1 8.0
SHORT TERMPROVISONS 2539.4 2343.1 196.4 8.4
CURRENT MATURITIES OF DEFERRED PAY LIAB FOR ACQUIS OF F.A 472.5 464.1 8.4 1.8
SHARE HOLDERS FUNDS
SHARE CAPTIAL 123.1 122.5 0.6 0.5
37

COMPARTIVE B/S ANALYSIS OF L & T FOR THE YEAR 2013 - 2014
CY 2014 ( rs BY 2013 (
INC/DEC (RS) INC/DEC (%)PARTICULAR in crore ) rs in crore)
NON CURRENT ASSETS
FIXED ASSET
intangible assets 9391.4 7453.3 1938.1 26.0
captial wip 4262.6 4061.1 201.5 5.0
goodwill on consolidation 2136.2 2119.8 16.4 0.8
intangible assets under development 10018.4 7289.4 2729.0 37.4
NON CURRENT INVESTMENTS 1432.8 1224.2 208.6 17.0
LONG TERM LOANS AND ADVANCES 2793.8 2258.6 535.2 23.7
OTHER NON CURRENT ASSETS 184.9 148.2 36.8 24.8
CURRENT ASSETS
CURRENT INVESTMENT 6676.2 7543.3 -867.1 -11.5
INVENTORIES 5527.5 5169.5 358.0 6.9
SHORT TERM LOANS AND ADV 7327.2 6171.5 1155.7 18.7
SHORT TERM LOANS AND ADV TOWARDS FA 10835.6 10160.1 675.5 6.6
TOTAL 170022.7 143122.2 26900.5 18.8
DEFERRED TAX LIABLITES( NET) 617.9 377.9 240.0 63.5
OTHER LONG TREM LIAB 980.0 1160.9 -180.9 -15.6
DEFFERE D PAYMENT LIAB FOR ACQUISTION OF F.A 2966.8 3481.5 -514.7 -14.8
CURRENT LIABILITES
SHORT TERM BORROWINGS 13678.7 7965.8 5712.9 71.7
CURRENT MATURITIES OF LTB 11027.0 7313.7 3713.2 50.8
TRADE PAYABLES 20870.6 18053.7 2816.9 15.6
SHORT TERM PROVISONS 2930.8 2539.4 391.4 15.4
CURRENT MATURITIES OF DEFERRED PAY LIAB FOR ACQOF F.A 515.1 472.5 42.6 9.0
SHARE HOLDERS FUNDS
SHARE CAPTIAL 185.4 123.1 62.3 50.6
38

Analysis of changes in comparative balance sheet ofLarsen &Toubro from
2015-16 to 2013-14 (in %)
Figure 1
Percetage
Analysis of changes in comparitive balance sheet of Larsen &Toubro from
45
2015-16 to 2013-14 (in %)
2015-16 (%)
40 38.43
35
30
30.14
26.54
27.67
24.3525 22.98
19.77
21.97
20 17.9517.3 16.65
15.22 14.44 13.83
15
11.37
10
5
0
Total share holder's Total non current Total current Total non currentTotal current assets
fund liabilities liabilities assets
INTERPRETATION :
By analyzing the comparative balance sheet from the FY 2015-16 to 2013-14, we can see the
following results: The shareholders fund is increasing in at a decreasing rate of 5.93% which is
due to the issue of bonus shares. The total non-current liabilities have been increasing at a
decreasing rate of 23.99%.The current liabilities increased by 7.9%. The non-current assets
increased at a decreasing rate of 5.78%. The total current asset increased at a decreasing rate of
8.14%. This shows there is a considerable increase in the current assets with respect to current
liabilities. In this situation the organization can easily manage the requirement for working
capital to meet its day to day expenses.
39

COMMONSIZEBALANCESHEET OFLARSENANDTOUBRO
Common Sized Balance Sheet Of L & T (2012-13 To 2013-14)
Table 1
COMMON SIZED BALANCE SHEET OF L & T (2012-13 to 2013-14)
2013-14 2012-13 2013-14 2012-13 (in
Particulars (in crores) (in crores) (in %) %)
Equity and liability
Total shareholder‟s fund 37711.61 33859.69 22.18 23.66
Minority interest 3179.18 2652.87 1.87 1.85
Total non-current liabilities 60377.97 52758.98 35.51 36.86
Total current liabilities 68753.97 53850.69 40.44 37.63
Total liabilities 170022.73 143122.23 100 100
Assets
Total non-current assets 83905.49 67470.74 49.35 47.14
Total current assets 86117.24 75651.49 50.65 52.86
Total 170022.73 143122.23 100 100
Interpretation
The above table reveals the common size balance sheet of Larsen and Toubro Constructions for
the year 2013-2014. The company net current assets decreased from 52.86% to 50.65%
followed by 2013-2014. The Company‟s Fixed Asset shows a slight amount of deviation. The
company capital, surplus and reserves also didn‟t show much of deviation. Finally it can be
concluded that the company‟s financial position is satisfied.
40

Table 2
PARTICULARS
2012-13 2015-16 2012-13 2015-16
(in crores) (in crores) (in %) (in %)
Total shareholder‟s fund 33859.69 29386.78 23.66 24.7
Minority interest 2652.87 1753.46 1.85 1.47
Total liabilities 143122.2 118994.33 100 100
Assets
Total 143122.2 118994.33 100.00 100.00
Interpretation
followed by 2012-2013. The Company‟s Fixed Asset did not show much of deviation. The
41

Table 3
2015-16 2014-15 2015-16 2014-15
PARTICULARS (in crores) (in crores) (in %) (in %)
Total shareholder's fund 29386.78 25050.55 24.7 26.44
Minority interest 1753.46 1023 1.47 1.08
Total liabilities 118994.33 94731.12 100 100.00
Assets
Total 118994.33 94734.12 100 100.00
Interpretation
followed by 2011-2012. The Company‟s Fixed Asset shows a slight amount of deviation. The
42

Analysis of Equities &Liabilities in the Common Size Balance Sheet of L&T during the
FY 2015-16 to 2013-14
Figure 1
Analysis of Equities&Liabilities in the Common Size
Balance Sheet of L&T during the FY 2011 - 12 to 2013 - 14
PERCENTAGE
26.44
24.7
23.66
22.18
31.79
35.04
36.86
35.51
40.68
38.79
37.63
40.44
1.08
1.47
1.85
1.87
T o t a l s h a r e h o l d e r ' sm i n o r i t y i n t r e s t T o t a l n o n c u r r e n t T o t a l c u r r e n t
f u n d l i a b i l i t i e s l i a b i l i t i e s
Equities & Liabilities
Changes in 2011 (in % ) Changes in 2012 (in % )
Changes in 2013 (in % ) Changes in 2014 (in % )
43

PERCENTAGE
Figure 2
Analysis of Assets in the Common Size Balance Sheet of L&T
during the FY 2015-16 to 2013-14
60.00
55.50 53.90 52.86
50.65
47.14 49.3550.00 44.50 46.1
40.00
30.00
20.00
10.00
0.00
Total non current assets Total current assets
ASSETS
Changes in 2011 (in %) Changes in 2012 (in %)
Changes in 2013 (in %) Changes in 2014 (in %)
44

STATEMENT OF WORKING CAPITAL (2013-14)
Particulars 2013-14 2012-13 Increase Decrease
in crores in crores in crores in crores
Current assets
current investments 6676.17 7543.31 867.14
inventories 5527.46 5169.46 358
trade receivables 26384.55 23011.32 3373.23
cash and bank balances 4096.57 3566.14 530.43
short term loans and advances 7327.16 6171.5 1155.66
towards financing activities
other current assets 25269.73 20029.7 5240.03
Total current assets 86117.24 75651.49
Current liabilities
short term borrowings 13678.67 7965.76 5712.91
current maturities of deferred 515.13 472.53 42.6
payment liabilities for acquisition
of fixed asset
current maturities of long term 11026.97 7313.73 3713.24
borrowings
trade payables 20870.58 18053.65 2816.93
other current liabilities 19731.84 17505.6 2226.24
short term provisions 2930.78 2539.42 391.36
Total current liabilities 68753.97 53850.69
Working Capital ( CA-CL) 17363.27 21800.8
Decrease in WC 4437.53 4437.53
Net WC 21800.8 21800.8 15770.42 15770.42
45

Figure 1
Changes in Working Capital during the FY2012-13 to 2013-14
Amountsincrores
100000
90000 86117.24 2012-13 2013-14
80000 75651.49
70000
68753.97
60000 53850.69
50000
40000
30000
21800.8
17363.27
20000
10000
0
Total Current Asset Total Current liability Total Working capital
INTERPRETATION:
The current asset and the current liability shows an increasing trend during the FY
2012-13 to 2013-14. The total current asset increased by 13.83%. The total current
liabilities increased by 27.67%. It shows a decrease in the working capital by
20.35% in this FY.
46

Table 1
STATEMENT OF WORKING CAPITAL (2012-13) in crores
Current assets
inventories 5169.46 4229.87 939.59
Current liabilities
payment liabilities for acquisition
of fixed asset
borrowings
trade payables 18053.65 16716.53 1337.12
other current liabilities 17505.6 15644.15 1861.45
Increase in WC 3828.05 3828.05
Net WC 21800.8 21800.8 11516.46 11516.46
47

Figure 2
Changes in Working Capital during the FY 2015-16 to 2012-13
Amountsincrores
80000 75651.49
70000
64135.03 2011--12 2012-13
60000
53850.69
50000 46162.28
40000
30000
21800.8
20000 17972.75
10000
0
INTERPRETATION:
The current asset and the current liability shows an increasing trend during the FY 2012-13 to
2013-14. The total current asset increased by 17.95 %. The total current liabilities increased by
16.65 %. It shows an increase in the working capital by 21.29% in this FY.
48

Table 3
STATEMENT OF WORKING CAPITAL (2012-13) in crores
Current assets
inventories 4229.87 3040.27 1189.6
Current liabilities
payment liabilities for acquisition of
fixed asset
borrowings
trade payables 16716.53 14687.72 2028.81
other current liabilities 15644.15 13555.15 2089
Increase in WC 3932.79 3932.79
Net WC 17972.75 17972.75 12308.2 12308.2
49

Figure 3
Changes in Working Capital during the FY2014-15 to 2015-16
Amountsincrores
70000 64135.03
60000
52580.73
2010--11 2015-16
50000 46162.28
40000
38540.77
30000
20000
17972.75
14039.96
10000
0
INTERPRETATION:
The current asset and the current liability shows an increasing trend during the FY 2012-13 to
2013-14. The total current asset increased by 21.97 %. The total current liabilities increased by
19.77 %. It shows an increase in the working capital by 28.01% in this FY.
50

LIQUIDITY RATIO
1. CURRENT RATIO in Crores
Years Current Assets Current Liabilities Current Ratio
2014 86117.24 68753.97 1.252542071
2013 75651.49 53580.69 1.411917054
2012 64135.03 46162.28 1.389338438
2011 52580.73 38540.77 1.364288518
CURRENT RATIO
RATIO
1.45
1.41
1.4 1.38
1.36
1.35
1.3
1.25
1.25
1.2
1.15
2011 2012 2013 2014
YEARS
Interpretation
From the above graph it can be observed that there is fluctuating trend during the
study period. In the year 2011-2012 it increased from 1.36 to 1.38. It again
increased to 1.41 in the year 2013. In the year 2014 it decreased to 1.25. The
management should take remedial measures to improve the present position.
51

2. QUICK RATIO in Crores
Years Quick Assets Current Liabilities Quick Ratio
2014 80589.78 68753.97 1.172147296
2013 70482.03 53580.69 1.315437147
2012 59905.16 46162.28 1.297707999
2011 49540.46 38540.77 1.285404002
QUICK RATIO
RATIO
1.35
1.29
1.31
1.3 1.28
1.25
1.2 1.17
1.15
1.1
2011 2012 2013 2014
YEARS
Interpretation
increased to 1.31 in the year 2013. In the year 2014 it decreased to 1.17. The
management should take remedial measures to improve the present position
52

3. ABOSULTE LIQUID RATIO in Crores
Absolute Liquid
Year Assets Current Liabilities Absolute Liquid Ratio
2014 10772.74 68753.97 0.156685352
2013 11109.45 53580.69 0.207340555
2012 11357.08 46162.28 0.24602511
2011 10603.18 38540.77 0.275115936
LIQUID RATIO
0.3 0.27
RATIO
0.25
0.2
0.15
0.1
0.05
0
0.24
0.2
0.15
2011 2012 2013 2014
YEARS
Interpretation
decreased to 0.21 in the year 2013. In the year 2014 it further decreased to 0.15.
The management should take remedial measures to improve the present position
53

LEVERAGE RATIOS
4. PROPRIETARYRATIO in Crores
Total Tangible
Year Shareholders' Funds Assets Proprietary Ratio
2014 37711.61 64571.28 0.584030702
2013 33859.69 58899.01 0.574877065
2012 29386.78 49301.98 0.596056791
2011 25050.55 38183.38 0.656058997
PROPRIETORYRATIO
RATIO
0.66 0.65
0.64
0.62
0.6 0.59
0.58
0.58 0.57
0.56
0.54
0.52
2011 2012 2013 2014
YEARS
Interpretation
study period. In the year 2011-2012 it decreased from 0.65 to 0.59. It again
decreased to 0.57 in the year 2013. In the year 2014 it increased to 0.58. The
54

ACTIVITY RATIOS
5. WORKING CAPITAL TURNOVER RATIO in Crores
Year COGS Working Capital Working Capital Turnover Ratio
2014 48730.46 17363.27 2.806525499
2013 43462.44 22070.8 1.96922812
2012 38785.64 17972.75 2.158024788
2011 31220.89 14039.96 2.223716449
RATIO
Working Capital Turnover Ratio
3 2.8
2.5 2.22 2.15
2
1.96
1.5
1
0.5
0
2011 2012 2013 2014
YEARS
Interpretation
decreased to 1.96 in the year 2013. In the year 2014 it increased to 2.8.The
55

6. FIXED ASSETS TURNOVER RATIO in Crores
Year COGS Net Fixed Assets Fixed Asset Turnover Ratio
2014 48730.46 46575.98 1.04625732
2013 43462.44 41739.74 1.041272418
2012 38785.64 34313.51 1.130331464
2011 31220.89 27986.53 1.115568454
Fixed Asset Turnover Ratio
RATIO
1.14 1.13
1.12 1.11
1.1
1.08
1.06 1.04
1.05
1.04
1.02
1
0.98
2011 2012 2013 2014
YEARS
Interpretation
56

7. CAPITAL TURNOVER RATIO in Crores
Year COGS Capital Employed Capital Turnover Ratio
2014 48730.46 37711.61 1.292187207
2013 43462.44 33859.69 1.283604191
2012 38785.64 29386.78 1.319832932
2011 31220.89 25050.55 1.24631555
Capital Turnover Ratio
RATIO
1.32
1.3
1.28
1.26
1.24
1.22
1.2
1.31
1.29
1.28
1.24
2011 2012 2013 2014
YEARS
Interpretation
57

8. CURRENT ASSETSTO FIXED ASSETS RATIO in Crores
Current Assets to Fixed Assets
Year Current Assets Fixed Assets Ratio
2014 86117.24 46575.98 1.848962491
2013 75651.49 41739.74 1.812457145
1.8690897552012 64135.03 34313.51
2011 52580.73 27986.53 1.878787045
Current Asset to Fixed Asset Ratio
RATIO
1.88 1.87
1.87 1.86
1.86
1.85 1.84
1.84
1.83
1.82 1.81
1.81
1.8
1.79
1.78
2011 2012 2013 2014
YEARS
Interpretation
Current Assets are increased due to a increase in debtors and the next fixed assets
of the company are raised due to a rise in investment. It resulted in the rise in ratio
compared to the previous year.
58

PROFITABILITYRATIOS
GENERALPROFITABILITYRATIOS
9. NET PROFIT RATIO in Crores
Year Net Profit After Tax Net Sales Net Profit Ratio
2014 4875.4 85128.4 5.72%
2013 5252.38 74498 7.05%
2012 4690.96 64313.11 7.29%
2011 4455.15 52043.78 8.56%
Net Profit RATIO
9 8.56
8 7.29 7.05
RATIO
7
6
5
4
3
2
1
0
5.72
2011 2012 2013 2014
YEARS
Interpretation
From the above graph it can be observed that there is decreasing trend during the
The management should take immediate remedial measures to improve the present
position which is alarming.
59

10. OPERATING PROFIT in Crores
Year Operating Profit Net Sales Operating Profit Ratio
2014 28998.33 85128.4 0.340642253
2013 24145.65 74498 0.324111386
2012 20636.88 64313.11 0.320881388
2011 16967.01 52043.78 0.326014175
Operating Profit Ratio
RATIO
0.345
0.34
0.34
0.335
0.33
0.33
0.325
0.32 0.32
0.32
0.315
0.31
2011 2012 2013 2014
YEARS
Interpretation
From the above graph it can be observed that there is constant trend during the
increased to 0.324 in the year 2013. In the year 2014 it increased to 0.34. The
60

11. RETURN ON TOTAL ASSETS RATIO in Crores
Year Net Profit Total Assets Return on Total Assets
2014 4875.4 170022.73 2.867498951
2013 5252.38 143122.23 3.669856178
2012 4690.96 118994.33 3.942171026
2011 4455.15 94734.12 4.70279346
Return On Total Asset Ratio
rRATIO
5 4.7
4.5
3.94
4 3.66
3.5
2.86
3
2.5
2
1.5
1
0.5
0
2011 2012 2013 2014
YEARS
Interpretation
study period. In the year 2011-2012 it decreased from4.7 to 3.94. It again
61

12. RESERVES & SURPLUS TO CAPITAL RATIO in Crores
Reserves And Reserves & Surplus to Capital
Year Surplus Capital Ratio
2014 37526.23 185.38
0.995084
2013 33736.61 123.08 0.996365
0.9958322012 29264.3 122.48
2011 24928.78 121.77 0.995139
Reserves & Surplus To Capital Ratio
RATIO
0.9962
0.996
0.9958
0.9956
0.9954
0.9952
0.995
0.9948
0.9946
0.9944
0.996
0.995 0.995 0.995
2011 2012 2013 2014
YEAR
Interpretation
From the above graph it can be observed that there is constant trend during the
study period. In the year 2011-2012 it remained constant in 0995. It again
increased to 0.996 in the year 2013. In the year 2014 it was 0.995 The present
position is satisfying.
62

OVERALL PROFITABILITY RATIOS
13. EARNINGS PER SHARE in Crores
Number of Equity
Year Net Profit Shares Earnings Per Share
2014 4875.4 925416187 52.59
2013 5252.38 920889827 57.03
76.762012 4690.96 611108916
2011 4455.15 605799369 73.54
EARNINGS PER SHARE
90
80 73.54 76.76
70
60
57.03
52.59
50
40
30
20
10
0
2011 2012 2013 2014
YEAR
Interpretation
The management should take remedial measures to improve the present position.
63

14. PRICE EARNINGS (P/E)RATIO in Crores
Yea Market Price Per
r Share Earnings Per Share Price-Earnings Ratio
2014 40.75 52.59 0.774862141
2013 36.77 57.03 0.644748378
2012 48.09 76.76 0.626498176
2011 41.35 73.54 0.562279032
PRICE PER EARNING RATIO
0.9
0.8
0.77
RATIO
0.7 0.62 0.64
0.6 0.56
0.5
0.4
0.3
0.2
0.1
0
2011 2012 2013 2014
YEAR
Interpretation
From the above graph it can be observed that there is increasing trend during the
increased to 0.64 in the year 2013. In the year 2014 it further increased to 0.77.
This shows a greater amount of satisfaction in the market.
64

15. RETURN ON INVESTMENT in Crores
Yea
r Net Profit Shareholders' Funds Return on Investm ent
2014 4875.4 37711.61 0.129281142
2013 5252.38 33859.69 0.155121916
2012 4690.96 29386.78 0.159628241
2011 4455.15 25050.55 0.177846395
Ratio
RETURN ONINVESTMENT
20
17.78
18
15.9 15.51
16
14 12.93
12
10
8
6
4
2
0
2011 2012 2013 2014
YEAR
Interpretation
decreased to 15.51 in the year 2013. In the year 2014 it further decreased to12.93.
The management should take remedial measures to improve the present position.
65

TREND ANALYSIS-1
Table Showing Trend Analysis of current assets
Years X Y X2
XY Trend Deviation
Value
2010 -2 42056.44 4 -84112.88 41869.71 186.73
2011 -1 52580.73 1 -52580.73 52988.95 -408.22
2012 0 64135.03 0 0 64108.19 26.84
2013 1 75651.49 1 75651.49 75227.43 424.06
2014 2 86117.24 4 172234.48 86346.67 -229.43
Total 320540.93 10 11119.24
Where Deviation = Y-Trend Value
Yc =A+Bx
Where A=∑y/n
B=∑xy /∑x2
A= ∑y/n
= 320540.93
5
A = 64108.19
B= ∑xy/∑x2
= 111192.36
10
B= 11119.24
66

Yc = A+Bx
= 64108.19+ 11119.24(-2)
= 41869.706
Yc =A+Bx
= 64108.19+ 11119.24(-1)
= 52988.95
Yc =A+Bx
= 64108.19+0
= 64108.19
Yc =A+Bx
= 64108.19+11119.24 (1)
= 75227.43
Yc =A+Bx
= 64108.19+11119.24 (2)
= 86346.67
67

Trend Analysis of Current Assets from 2010-2014
Trend Analysis of Current Assets
80000
70000
Values
60000
50000
Trend
40000
30000
20000
10000
0
2010 2011 2012 2013
Years
Trend
Deviation
Projected Trend Value of current assets for the forthcoming years (2015-2019)
Year Future Trend Value(Trend Value+B)
2014 86346.67 (Base Year)
2015 97465.91
2016 108585.15
2017 119704.39
2018 130823.63
2019 141942.87
Interpretation
The trend analysis for the above years shows a very good amount increase. This is mainly due to the
reason that these data‟s have been arrived in comparison with the last 5 years current assets value. There
was a phenomenal increase in growth in term of assets during 2014 and this is one of the major reasons
that the projections are showing a good increase. In reality if we assume that the same increase in trend
continues compared to 2014, the ratio for the above five years will be still higher.
68

Chart Showing Trend Analysis of Current Assets
In Crores
Future Trend Value
Years
2019
2018
2017
2016
2015
2014
141942.87
130823.63
119704.39
108585.15 Future Trend
97465.91
86346.67
0 20000 40000 60000 80000 100000 120000 140000 160000
Trend Values
69

TREND ANALYSIS-2
Table Showing Trend Analysis of Current Liabilities
Years X Y XY X2
Trend Deviation
Value
2010 -2 24277.33 -48554.66 4 26388.15 -2110.82
2011 -1 38540.77 -38540.77 1 35763.69 2777.08
2012 0 46162.28 0 0 45139.23 1023.05
2013 1 52580.73 52580.73 4 54514.77 -1934.04
2014 2 64135.03 128270.06 1 63889.23 245.78
Total 225696.14 93755.36 10
Where Deviation = Y-Trend Value
Yc =A+Bx
Where A=∑y/n
B=∑xy /∑x2
A= ∑y/n
=225696.14
5
A = 45139.23
B= ∑xy/∑x2
= 93755.36
10
B= 9375.54
70

Yc = A+Bx
= 45139.23+9375.54(-2)
= 26388.15
Yc =A+Bx
= 45139.23+ 9375.54(-1)
= 35763.69
Yc =A+Bx
= 45139.23+ 0
= 45139.23
Yc =A+Bx
=45139.23+9375.54 (1)
= 54514.77
Yc =A+Bx
= 45139.23+ 9375.54(2)
= 63889.23
71

Trend Analysis of Current Liabilities from 2010-2014 in Crores
Values
70000
64135.03
63889.23
60000 52580.73
46162.28 54514.77
50000
45139.2338540.77
40000
35763.69
24277.33 Trend
30000
26388.15 Deviation
20000
10000
0
2010 2011 2012 2013 2014
Years
Projected Trend Value of current Liabilities for the forthcoming years(2015-2019)
Year Future Trend Value(Trend Value+B)
2014 63889.23 ( Base Year)
2015 73264.77
2016 82640.31
2017 92015.85
2018 101391.39
2019 110766.93
Interpretation:
The trend analysis for the above years shows a marginal increase. This is mainly due to the reason that
these data‟s have been arrived in comparison with the last 5 years current liabilities value. There was no
phenomenal increase in growth in term of liabilities during 2014 and this is one of the major reasons that
the projections are showing a marginal increase. In reality if we assume that the same increase in trend
continues compared to 2014, the ratio for the above five years will be still higher.
72

Chart Showing Trend Analysis of Current liabilities(2015-2019)
In Crores
Future Trend Values
Years
2018
2017
2016
2015
2014
101391.39
92015.85
82640.31
Future Trend
73264.77
63889.23
0 20000 40000 60000 80000 100000 120000
Values
73

Consolidated Cash Flow Statement FY 2011-2014
In Crores
Cash Flow Mar'14 Mar'13 Mar'12 Mar'11
Profit Before Tax 6679.41 5677.94 6255.33 5568.56
Net Cash Flow Operating Activity 1047.24 1472.24 1081.58 3833.3
Net Cash Flow Investing Activity -1214.32 656.73 -1922.28 -2416.79
Net Cash Flow Financial Activity 504.5 -3316.23 1015.61 -1124.84
Net Inc/Dec In Cash And Cash Equivalent 336.97 -409.66 174.91 298.48
Cash And Cash Equivalent At The Beginning Of the Year 1457.15 1906.02 1730.35 1431.87
Cash And Cash Equivalent At The End Of the Year 1794.12 1496.36 1905.26 1730.35
74

In Crores
CashFlow Analysis of L&T During the Fy2014-15To 2013-14
3
.
3
8
3
3
24.1047
5.504
97.336
15.1457
12.1794
24.1472
73.656
02.1906
36.1496
58.1081
61.1015
91.174
35.1730
26.1905
48.298
87.1431
35.1730
Mar'14 Mar'13
409-
.
1
2
1
4
-
66.
3
2
.3316-
2
3
Mar'12 Mar'11
28
.1
92
2-
.2416-
84.1124-
7
9
Net Cash FlowOperating Activity
Net Cash FlowInvestingActivity
Net Cash FlowFinancial Activity
Net Inc/Dec In Cash And Cash Equivalent
Cash And Cash EquivalentAt The BeginningOf the Year
Cash And Cash EquivalentAt The End Of the Year
75

CHAPTER 5
FINDINGS, SUGGESTIONS &
CONCLUSION
76

FINDINGS OF THE STUDY
 By analyzing the comparative balance sheet from the FY 2015-16 to 2013-
14, we can see the following results: The shareholders fund is increasing in
at a decreasing rate of 5.93% which is due to the issue of bonus shares. The
total non-current liabilities have been increasing at a decreasing rate of
23.99%.The current liabilities increased by 7.9%. The non-current assets
increased at a decreasing rate of 5.78%. The total current asset increased at a
decreasing rate of 8.14%. This shows there is a considerable increase in the
current assets with respect to current liabilities. In this situation the
organization can easily manage the requirement for working capital to meet
its day to day expenses.

 The above table reveals the common size balance sheet of Larsen and
Toubro Constructions for the year 2013-2014. The company net current
assets decreased from 52.86% to 50.65% followed by 2013-2014. The

Company‟s Fixed Asset shows a slight amount of deviation. The company
capital, surplus and reserves also didn‟t show much of deviation. Finally it
can be concluded that the company‟s financial position is satisfied.

Toubro Constructions for the year 2012-2013. The company net current
assets decreased from 53.90% to 52.86% followed by 2012-2013. The

Company‟s Fixed Asset did not show much of deviation. The company

Toubro Constructions for the year 2011-2012. The company net current
77

assets decreased from 55.50% to 53.90% followed by 2011-2012. The
Company‟s Fixed Asset shows a slight amount of deviation. The company
 The current asset and the current liability show an increasing trend during
the FY 2012-13 to 2013-14. The total current asset increased by 13.83%.
The total current liabilities increased by 27.67%. It shows a decrease in the
working capital by 20.35% in this FY.

 The current asset and the current liability shows an increasing trend during
the FY 2012-13 to 2013-14. The total current asset increased by 17.95 %.
The total current liabilities increased by 16.65 %. It shows a increase in the

 The current asset and the current liability shows an increasing trend during
the FY 2012-13 to 2013-14. The total current asset increased by 21.97 %.
The total current liabilities increased by 19.77 %. It shows a increase in the

 From the above graph it can be observed that there is fluctuating trend
during the study period. In the year 2011-2012 it increased from 1.36 to
1.39. It again increased to 1.41 in the year 2013. In the year 2014 it
decreased to 1.25. The management should take remedial measures to
improve the present position.

1.30. It again increased to 1.31 in the year 2013. In the year 2014 it
78

improve the present position
0.24. It again decreased to 0.21 in the year 2013. In the year 2014 it further
improve the present position

1.13. It again decreased to 1.04 in the year 2013. In the year 2014 it
increased to 1.05. The management should take remedial measures to

during the study period. In the year 2011-2012 it decreased from 2.22 to
increased to 2.81.The management should take remedial measures to


1.32. It again decreased to 1.28 in the year 2013. In the year 2014 it
79

improve the present position
 Current Assets are increased due to a increase in debtors and the next fixed
assets of the company are raised due to a rise in investment. It resulted in the
rise in ratio compared to the previous year

 From the above graph it can be observed that there is decreasing trend
7.29 . It again decreased to 7.05 in the year 2013. In the year 2014 it further
decreased to 5.73. The management should take immediate remedial
measures to improve the present position which is alarming.

 From the above graph it can be observed that there is constant trend during
the study period. In the year 2011-2012 it decreased from 0.33 to 0.321. It
again increased to 0.324 in the year 2013. In the year 2014 it increased to
0.34. The management should take remedial measures to improve the
present position.

during the study period. In the year 2011-2012 it decreased from4.7 to 3.94.
It again decreased to 3.67 in the year 2013. In the year 2014 it increased to
2.87. The management should take remedial measures to improve the
present position.

 From the above graph it can be observed that there is constant trend during
the study period. In the year 2011-2012 it remained constant in 0995. It
again increased to 0.996 in the year 2013. In the year 2014 it was 0.995 The
present position is satisfying.
80

further decreased to 52.59. The management should take remedial measures
to improve the present position.

 From the above graph it can be observed that there is increasing trend during
the study period. In the year 2011-2012 it increased from 0.56 to 0.63. It
again increased to 0.64 in the year 2013. In the year 2014 it further increased
to 0.77. This shows a greater amount of satisfaction in the market.

further decreased to12.93. The management should take remedial measures
to improve the present position.

 The trend analysis for the above years shows a very good amount increase.

This is mainly due to the reason that these data‟s have been arrived in
comparison with the last 5 years current assets value. There was a
phenomenal increase in growth in term of assets during 2014 and this is one
of the major reasons that the projections are showing a good increase. In
reality if we assume that the same increase in trend continues compared to
2014, the ratio for the above five years will be still higher.

 The trend analysis for the above years shows a marginal increase. This is
mainly due to the reason that these data‟s have been arrived in comparison
with the last 5 years current liabilities value. There was no phenomenal
increase in growth in term of liabilities during 2014 and this is one of the
81

major reasons that the projections are showing a marginal increase. In reality
if we assume that the same increase in trend continues compared to 2014,
the ratio for the above five years will be still higher.
82

Suggestions:
 After the analysis of financial statements, it is clear that the company‟s
status is not good, because the net working capital of the company has
decreased from last year‟s position.

 Company‟s Profits are huge in the current year, it‟s better to declare
dividend to shareholders.

 The Company is utilizing its fixed assets, which majorly help in the growth
of the organization. The Company should maintain that perfectly.

 The company‟s Investments are raised from the inception, it gives the other
income i.e., interest on investments.

 Steps have to be taken to increase the current assets position of the firm so as
to improve the liquidity position of the company.

 Percentage of Debt to equity can be reduced so as to reduce the financial
risk.

 Percentage of debt in capital can be reduced so as to reduce the financial
risk.

 Steps can be taken to reduce the current liability of the firm so as to have a
stable financial position.

 Steps can be taken to increase the net profit so as to increase the overall
financial performance.
83

Conclusion:
 The company‟s overall position is at a good position. Particularly the current
year‟s position is well due to a raise in the profit than the previous year.

 It‟s better for the organization to diversify the funds to different sectors in
the present market scenario.

 L&T construction is showing fluctuations in its profitability position in the
past few years, which is concluded with the financial statement analysis.

 The Assets were increased but the working capital is decreased which says
that the firm is not able to meet its current liabilities.

 The calculation of Current and Liquid Ratio will enable the creditors to
access the current financial position of the concern in relation to their debts.

 Preparation of financial statements enables the government to find out
whether the organization is following various rules and regulations or not.
These statements provide a base for regulation of the company.

 It is not only helpful to analyze the present financial position it also enables
to study the future prospects and the expansion plans of the concern.
84

Bibliography
www.larsentoubro.com
www.lntecc.com
http://www.larsentoubro.com/media/29758/fact-sheet-sep2014.pdf
https://ebstudies.wordpress.com/2012/11/06/financial-performance-analysis/
http://shodhganga.inflibnet.ac.in/bitstream/10603/705/11/12_chapter3.pdf
https://ebstudies.wordpress.com/2012/11/06/financial-performance-analysis/
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85

Financial performance analysis

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