LARSEN & TOUBRO
PRESENTED BY : • ROHIT VERMA 111268 • SHUBHI JAIN 111338 • SHUBHAM DWIVEDEE 111339
COMPANY PROFILE
Larsen & Toubro Limited (L&T is amon!st one o" t#e India$s %ar!est te&#no%o!'( en!ineerin! &onstru&tion and manu"a&turin! &on!%omerate) • L&T is &onsidered to be t#e *be%%+et#er o" India,s en!ineerin! se&tor-( and +as re&o!ni.ed as t#e &om/an' o" t#e 'ear in 2010) • L&T$s business stru&ture #as a dominant /resen&e in India,s in"rastru&ture( /o+er( #'dro&arbon( ma&#iner'( s#i/bui%din! and rai%+a' se&tors) • L&T #as an internationa% /resen&e) T#e &om/an',s businesses are su//orted b' a +ide mar1etin! and distribution net+or1( and #a2e estab%is#ed a re/utation "or stron! &ustomer su//ort) • 3it# more t#an a se2en de&ades o" dedi&ated &ustomer4"o&used ser2i&e and &ontinuous 5uest "or +or%d &%ass 5ua%it' #a2e estab%is#ed t#em as t#e %eader o" t#e E&C se&tor in India)
7I8TORY
T#e e2o%ution o" L&T into t#e &ountr',s %ar!est en!ineerin! and &onstru&tion or!ani.ation is amon! t#e most remar1ab%e su&&ess stories in Indian industr') • L&T +as "ounded in 9omba' (Mumbai in:1938:b' t+o ;anis# en!ineers( 7ennin! 7o%&14Larsen and 8oren RRENT RATIO
It is a measure o" t#e "irm$s short term solvency i)e)( it indi&ates t#e a2ai%abi%it' o" &urrent assets in ru/ees "or e2er' one ru/ee o" &urrent %iabi%it') It re/resents a mar!in o" sa"et' "or t#e &reditors o" t#e "irm)
!R
1)6 1)2 1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011
!R "#$%& '( 1)10
CR
YEAR
200B 200C 200D 200= 2010 2011
10
1)03 0)=2 1)18 1)02 1)02
E>IC< RATIO
Eui&1 Ratio a)1)a) A&id4Test Ratio estab%is#es re%ations#i/ bet+een 5ui&1 assets and &urrent %iabi%ities( +#ere 5ui&1 assets re"er to t#ose assets +#i&# &an be &on2erted into &as# immediate%' or reasonab%' soon +it#out %oss o" 2a%ue)
*R
1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011 ER
*R "#$%& '( 0)C= 0)C1 0)B1 0)86 0)B= 0)B0
YEAR
200B 200C 200D 200= 2010 2011
11
ANALYSIS: "LI*UDITY RATIOS(
Li5uidit' re"ers to t#e readiness o" assets to be &on2erted to &as#) T#e' !i2e a !enera% idea o" t#e "irm,s abi%it' to /a' its s#ort4term debts) Idea%%' t#e &urrent ratio s#ou%d be !reater t#an 1)@) T#ou!# t#ere &an be eG&e/tions( some !ood &om/anies &an #a2e %ess t#an 1 or e2en a ne!ati2e &urrent ratio +#en t#e' re&ei2e mone' "aster "rom t#eir &ustomers t#an t#e' #a2e to /a' to t#eir 2endors) 8o( +e &an sa' t#at L&T +i%% not be ab%e to meet its &urrent ob%i!ations as %on! as t#e' do not use t#eir in2entories e""i&ient%' as its in2entories "orm a %ar!e /art o" t#eir &urrent assets)
LEHERAAE RATIO8
3#at debt4 e5uit' miG do t#e' /re"er FF
;E9T RATIO
It te%%s us about t#e /ro/ortion o" t#e interest4bearin! debt in t#e &a/ita% stru&ture o" t#e "irm) Tota% debt +i%% in&%ude s#ort & %on!4term borro+in!s "rom "inan&ia% institutions( debenturesIbonds( de"erred /a'ment arran!ements ( ban1 borro+in!s( /ub%i& de/osits( et&)
DR
30 2@ 20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 ;R
DR "#$%& '( 1@)DD 1C)=1 22)B3 2 )6+ 23)@3 1=)33
YEAR
200B 200C 200D 200= 2010 2011
16 16
;E9T4EE>ITY RATIO
T#is ratio des&ribes t#e %ender$s &ontribution "or ea&# ru/ee o" t#e o+ner$s &ontribution)
DER
0)B 0)@ 0)6 0)3 0)2 0)1 0 200B 200C 200D 200= 2010 2011 ;ER
DER "#$%& '( 0)32 0)3B 0)3D 0) 3 0)3C 0)33
YEAR
200B 200C 200D 200= 2010 2011
1@ 1@
;E9T4A88ET RATIO
It measures t#e eGtent to +#i&# borro+ed "unds i)e)( debt su//ort t#e "irm$s assets) It indi&ates t#e /ro/ortion o" debt in2ested in !ettin! assets "or t#e "irm)
DAR
20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 ;AR
DAR "#$%& '( 10)D3 11)C= 13)0B 1+)40 16)0B 12)0@
YEAR
200B 200C 200D 200= 2010 2011
1B
ANALYSIS: ",INAN!IAL LEVERA-ES( Finan&ia% %e2era!e indi&ates t#e re%iabi%it' o" a business on its debts in
order to o/erate) Lo+er 2a%ue o" debt ratio is "a2orab%e and a #i!#er 2a%ue indi&ates t#at #i!#er /ortion o" &om/an',s assets are &%aimed b' it &reditors +#i&# means #i!#er ris1 in o/eration) In &ase debt ratio is %ess t#an 0)@)T#is indi&ates t#at &om/an'$s assets are "inan&ed t#rou!# e5uit' and %ess o" debt( %o+er 2a%ues o" debt4to4 e5uit' ratio are "a2orab%e indi&atin! %ess ris1) T#us( t#e &om/an' is %ess ris1ier) L&T #as %o+ /ro/ortion o" debt in its &a/ita% stru&ture and t#us t#e assets su//orted b' t#em and &ost o" debt a!ainst a ru/ee o" e5uit' s#o+ a simi%ar trend)
INTERE8T COHERAAE RATIO
ICR a)1)a) times4interest4earned is used to test t#e "irm$s debt ser2i&in! &a/a&it') It s#o+s t#e number o" times t#e interest &#ar!es are &o2ered b' "unds t#at are ordinari%' a2ai%ab%e "or t#eir /a'ment)
I!R
3@ 30 2@ 20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011
I!R "#$%& '( 12)6C
ICR
YEAR
200B 200C 200D 200= 2010 2011
1D
26)2= 28)63 12)=6 13)6C 10)=0
ANALYSIS: "!OVERA-E RATIOS(
T#e #i!#er t#e &o2era!e ratios t#e %ess a &om/an' is burdened b' debt) I" a &om/an' #as no debt or t#e %oan interest is bein! /aid b' interest in&ome "rom in2estments or ot#er a&ti2ities t#e ratio is .ero +#i&# o" &ourse is eG&e%%ent) A ne!ati2e ratio te%%s us t#at t#e &om/an' &annot e2en /a' its interest on %oans "rom its o/eratin! in&ome( sta' "ar a+a' "rom su&# &om/anies) In &ase o" L&T t#e ratios are &om/arati2e%' moderate)
3#at do t#e turno2ers de/i&tFF
T>RNOHER RATIO8
• ;a's o" In2entor' 7o%din!
•
Tota% Assets Turno2er Ratio
INHENTORY T>RNOHER RATIO
It indi&ates t#e e""i&ien&' o" t#e "irm in /rodu&in! and se%%in! its /rodu&t) It s#o+s #o+ ra/id%' t#e in2entor' is turnin! into re&ei2ab%es t#rou!# sa%es)
ITR
D C B @ 6 3 2 1 0 200B 200C 200D 200= 2010 2011
ITR "#$%& '( B)D0
ITR
YEAR
200B 200C 200D 200= 2010 2011
21
@)== )88 @)=2 6)D6 3)@6
;a's o" In2entor' 7o%din!
It !i2es us an idea o" t#e sto&1 mana!ement o" t#e &om/an')
DIH
D0 C0 B0 @0 60 30 20 10 0 200B 200C 200D 200= 2010 2011
DIH "./0'( @3 B0
;I7
YEAR 200B 200C 200D 200= 2010 2011
22
B1 B1 +4 102
;E9TOR8 T>RNOHER RATIO
T#e debtors turno2er ratio is t#e is t#e re%ations#i/ bet+een net sa%es and a2era!e debtors) It is a%so &a%%ed a&&ount re&ei2ab%e turno2er ratio be&ause +e debtor and bi%% re&ei2ab%es, tota% is used "or &a%&u%ation)
DTR
3)@ 3 2)@ 2 1)@ 1 0)@ 0 200B 200C 200D 200= 2010 2011
DTR "#$%& '( 2)98 2)B1 1)=B 1)11 1)0@ 0)=3
YEAR
200B 200C 200D 200= 2010 2011
23
;TR
AHERAAE COLLECTION PERIO;
T#e a2era!e &o%%e&tion /eriod is t#e ratio o" t#e number o" da's in a /eriod and t#e in2entor' turno2er ratio)
A!P
16 12 10 D B 6 2 0 200B 200C 200D 200= 2010 2011
A!P YEA "%12#3 R '( 6)02 200B
ACP
6)@= B)11 10)D6 11)3D 12)91
200C 200D 200= 2010 2011
26
A88ET T>RNOHER RATIO
T#e asset turno2er ratio is t#e measure o" t#e abi%it' o" a &om/an' or a "irm to use its assets e""i&ient%' in order to !enerate sa%es)
ATR
1)2 1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011 ATR
ATR "#$%& '( 1)12 0)D@ 0)@@ 0)60 0)31 0)2@
YEAR
200B 200C 200D 200= 2010 2011
2@
ANALYSIS: "TURNOVER RATIOS(
:A %o+ turno2er im/%ies /oor sa%es and( t#ere"ore( eG&ess in2entor') A #i!# ratio im/%ies eit#er stron! sa%es or ine""e&ti2e bu'in!) From t#e 'ear 200B to 200D t#e ratio is #i!# but "or t#e %atter /art t#e ratio is %o+) ;ebtors turno2er :indi&ates t#e 2e%o&it' o" debt &o%%e&tion o" a "irm) Lo+er debtor turno2er ratio is bad be&ause it means( s%o+%'( mone' is bein! &o%%e&ted and %i5uidit' /osition +i%% be&ome +ea1) Com/anies +it# %o+ /ro"it mar!ins tend to #a2e #i!# asset turno2er( +#i%e t#ose +it# #i!# /ro"it mar!ins #a2e %o+ asset turno2er): T#us( t#e &om/an' #as #i!# /ro"it mar!ins)
7o+ are t#e /ro"its s#a/in! u/F
PROFITA9ILITY RATIO8
• O/eratin! EG/enses Ratio
ARO88 PROFIT MARAIN RATIO
T#e !ross /ro"it mar!in re"%e&ts t#e e""i&ien&' +it# +#i&# mana!ement /rodu&es ea&# unit o" /rodu&t) It im/%ies #o+ &ost e""i&ient%' a "irm &an /rodu&e its !oods)
-PM
20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 APM
-PM "4( =)20 11)1@ 12)@B 13)@B 1 )+6 13)13
YEAR 200B 200C 200D 200= 2010 2011
2D
NET PROFIT MARAIN RATIO
It estab%is#es a re%ations#i/ bet+een net /ro"it and sa%es and indi&ates t#e "irms e""i&ien&' in manu"a&turin!( administerin! and se%%in! its /rodu&ts)
NPM
16 12 10 D B 6 2 0 200B 200C 200D 200= 2010 2011
NPM "4( B)C3 C)D0
NPM
YEAR 200B 200C 200D 200= 2010 2011
2=
D)@= 10)13 11)+0 D)=3
OPERATINA EJPEN8E8 RATIO
It indi&ates t#e o/eratin! eG/enses in&urred b' t#e &om/an' in its /rodu&tion and +or1in!)
OER
=2 =0 DD DB D6 D2 200B 200C 200D 200= 2010 2011 OER
"4( =0)66 D=)=D 91)21 DC)DD D@)@C DC)C0
OER
YEAR 200B 200C 200D 200= 2010 2011
30
ANALYSIS: "PRO,IT MAR-IN RATIOS(
8in&e t#e /ro"itabi%it' ratios are #i!#( it indi&ates t#at t#e &om/an' #as an e""i&ient mana!ement) It a%so indi&ates t#at t#e &ost o" !oods so%d remains &onstant and t#ere is an in&rease in t#e /ro/ortionate 2o%ume o" #i!#er mar!in items) T#e &om/an' #as in&reasin! /ro"its ti%% t#e 'ear 2010 a"ter +#i&# t#ere is a s%i!#t de/re&iation +#i&# &an be a resu%t o" t#e !%oba% e&onomi& s%o+do+n)
Return on In2estment
Return on Tota% Assets
ROTA te%%s us about t#e #o+ e""e&ti2e%' t#e in2estment in t#e "irm i)e)( /oo% o" "unds su//%ied b' s#are#o%ders and %enders is bein! used in terms o" tota% assets)
ROTA
10 D B 6 2 0 200B 200C 200D 200= 2010 2011 ROTA
ROTA "4( C)@6 C)=@ C)=2 9)24 =)06 B)BB
YEAR 200B 200C 200D 200= 2010 2011
33
Return on Net Assets
RONA te%%s us about t#e #o+ e""e&ti2e%' t#e in2estment in t#e "irm i)e)( /oo% o" "unds su//%ied b' s#are#o%ders and %enders is bein! used in terms o" net assets)
RONA
D0 B0 RONA 60 20 0 200B 200C 200D 200= 2010 2011
RONA "4( CB)C3 C=)=C C6)@3 84)62 C=)BC @=)@B
YEAR 200B 200C 200D 200= 2010 2011
36
Return on E5uit'
ROE indi&ates #o+ +e%% t#e "irm #as used t#e resour&es o" o+ners) It is &a%&u%ated to see t#e /ro"itabi%it' o" o+ner$s in2estment in t#e "irm)
ROE
30 2@ 20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 ROE
ROE "4( 22)06 26)6C 22)D1 28)00 23)=2 1D)13
YEAR 200B 200C 200D 200= 2010 2011
3@
ANALYSIS: "ROTA5 RONA5 ROE(
ROTA47i!#er 2a%ues o" return on assets s#o+ t#at business is more /ro"itab%e) RONA4 ) An im/ro2in! trend in t#is ratio indi&ates t#at t#e institution is in&reasin! its net assets and is %i1e%' to be ab%e to set aside "inan&ia% resour&es to stren!t#en its "uture "inan&ia% "%eGibi%it') ROE47i!#er 2a%ues are !enera%%' "a2orab%e meanin! t#at t#e &om/an' is e""i&ient in !eneratin! in&ome on ne+ in2estment) T#e &om/an' "o%%o+s a "a2orab%e out&ome as 2a%ues are !enera%%' in&reasin! ti%% 2010) O2era%%( t#e &om/an'$s return on in2estment and e5uit' is &onsiderab%' !ood ti%% t#e 'ear 200=)A"ter t#at t#e &om/an'$s /osition deteriorates to a %itt%e eGtent)
Earnin!s Per 8#are
T#is is t#e amount o" in&ome t#at t#e &ommon sto&1#o%ders are entit%ed to re&ei2e (/er s#are o" sto&1 o+ned ): T#is in&ome ma' be /aid out in t#e "orm o" di2idends( retained and rein2ested b' t#e &om/an'( or a &ombination o" bot#)
EPS
D C B @ 6 3 2 1 0 200B 200C 200D 200= 2010 2011
EPS "R')( C)3B 6)=@
EP8
YEAR 200B 200C 200D 200= 2010 2011
3C
+)43 @)=6 C)2C B)@0
;i2idend Per 8#are
;i2idend /er s#are (;P8 is t#e tota% di2idends /aid out o2er an entire 'ear (in&%udin! interim di2idends but not in&%udin! s/e&ia% di2idends di2ided b' t#e number o" outstandin! ordinar' s#ares issued)
DPS
1)6 1)2 1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011 ;P8
DPS "R')( 1)1+ 0)BB 0)B3 0)@C 0)B6 0)B@
YEAR 200B 200C 200D 200= 2010 2011
3D
;i2idend4Pa'out Ratio
T#e /er&enta!e o" earnin!s /aid to s#are#o%ders in di2idends)
DPR
0)2 0)1@ 0)1 0)0@ 0 200B 200C 200D 200= 2010 2011 ;PR
DPR 0)1B 0)13 0)0= 0)10 0)0= 0)19
YEAR 200B 200C 200D 200= 2010 2011
3=
ANALYSIS: "EPS5 DPS5 D6P(
7a2in! a !ro+in! in t#e di2idend /er s#are &an be a si!n t#at t#e &om/an',s mana!ement be%ie2es t#at t#e !ro+t# &an be sustained) More mature &om/anies tend to #a2e a #i!#er /a'out ratio) A stab%e di2idend /a'out ratio indi&ates a so%id di2idend /o%i&' b' t#e &om/an',s board o" dire&tors) T#us( t#e &om/an' is stab%e)
HAL>ATION RATIO8
Is t#e 2a%ue o" s#ares risin!F
Pri&e4Earnin!s Ratio
T#e PIE ratio re"%e&ts t#e /ri&e &urrent%' bein! /aid b' t#e mar1et "or ea&# ru/ee o" &urrent%' re/orted EP8) It is +ide%' used b' t#e se&urit' ana%'sts to ana%'.e t#e "irm$s /er"orman&e as eG/e&ted b' t#e in2estors)
PER
B @ 6 3 2 1 0 200B 200C 200D 200= 2010 2011 PER
PER "#$%& '( 6)@6 6)0= 6)3= 3)@C 6)1D ) 1
YEAR
200B 200C 200D 200= 2010 2011
62
ANALYSIS: "VALUATION RATIOS(
Ha%uation ratio measures di""erent +a's o" %oo1in! at t#e re%ati2e 2a%ue o" a &om/an',s sto&1) A #i!# PIE ratio ma' si!ni"' t#at t#e &om/an' is o2er2a%ued( +#i&# means t#at e2entua%%' mar1et "or&es +i%% dri2e t#e /ri&e do+n) On t#e ot#er #and( a #i!# PIE &ou%d indi&ate !reat earnin! /o+er and t#e /ossibi%it' t#at /ro"itabi%it' +i%% in&rease o2er time( Kusti"'in! t#e #i!#er /ri&e) T#us( t#e &om/an' #as #i!# earnin! /o+er)
INDE7 ANALYSIS
IN;EJ ANALY8I8
T#e ana%'sis o" a &om/an',s "inan&ia% statements b' &om/arin! &urrent data +it# t#at o" a /re2ious 'ear( or base 'ear) 9ase4'ear ana%'sis a%%o+s "or &om/arison bet+een &urrent /er"orman&e and #istori&a% /er"orman&e)
9ALANCE 87EET L A88ET8
YEAR Net FiGed Assets 2006 100 200+ 2008 2009 2010 2011 03)9 4 808)4 8 132)== 221)1D 312)0@ 61B)@1
In2estments
100
1@3)20 366)B6 3CB)0B C@6)1B
;e"erred TaG Assets Current Assets
100
126)2D 13D)0C
291)8 2
23@)=B 21B)06
100
12@)C6 1B6)=B 2C3)6@ 2=D)DB
388)0 6
Loans & Ad2an&es
100
12B)23
204)+ 8
1B=)1= 1B@)=0 2C2)3=
Tota% Assets
100
131)3@ 206)3D 2D0)C0 3B0)3D
442)8
9ALANCE 87EET L LIA9ILITIE8
YEAR Net 3ort# 2006 100 200+ 126)D D 162)= 6 2008 20C)@ = 26B)@ B 2009 2C0)= D 6@1)0 3 2010 3=D)@ 6 6BC)D C 2011 4+ ) 9 492)6 6
9orro+in!s
100
Current Liabi%ities & Pro2isions ;e"erred TaG Liabi%it' Tota% Liabi%ities
100
136)@ B =C)BB
1=C)3 @ 11B)6 B 206)3 D
2@B)0 2 20C)6 3 2D0)C 0
321)2 @ 1D@)@ @ 3B0)3 D
419)8 6 262)0 4 442)8 9
100
100
131)3 @
INCOME 8TATEMENT
YEAR 8a%es 2006 100 200+ 11D)@ 6 13D)C B 166)B @ 166)= 2 13D)B 2 2008 1BB)3 3 21@)C 6 22B)3 B 22=)= @ 216)D 6 2009 232)B @ 330)6 3 331)6 D 33B)D = 366)1 C 2010 2@2)= @ 61D)0 6 620)C 6 426)1 3 432) 0 2011 293)3 9 433)4 8 428)0 3 620)@ B 3=1)1 =
E9;ITA
100
E9;TA
100
E9T
100
PAT
100
,INDIN-S:
:IndeG ana%'sis o" a &om/an',s "inan&ia% statements is im/ortant to be ab%e to determine +#et#er a &om/an' is !ro+in! or s#rin1in!) T#e /ositi2e inter4annua% trends in t#e in&ome statement &om/onents( bot# in&ome and eG/ense( #a2e %i"ted t#e &om/an',s:/ro"it mar!ins) In t#e &ase o" L&T( it eG/erien&ed a maKor in&rease in sa%es "or t#e /eriod re2ie+ed and +as a%so ab%e to &ontro% t#e eG/ense side o" its business) T#at,s a si!n o" a 2er' e""i&ient mana!ement)
!OMMON SI8E STATEMENT ANALYSIS
COMMON 8IME ANALY8I8
Finan&ia%:statement:ana%'sis dis/%a's:a%%:items:as:/er&enta!es
" a &ommon:base:"i!ure): T#is t'/e":"inan&ia%:statement:a%%o+s:"or:eas':ana%'sis bet+een &om/aniesr bet+een:time:/eriods o" a &om/an')
9ALANCE 87EET L A88ET8
YEAR Net FiGed Assets 2006 =)D2 200+ =)=6 2008 10)B3 2009 10)=1 2010 11)3 2011 11)1C
In2estments ;e"erred TaG Assets Current Assets Loans & Ad2an&es Tota% Assets
1@)10 0)=D
1C)B2 0)=3
2@)6C 0)BB
20)23 1)02
31)61 0)B6
2C)@C 0)6D
8)36 13)62 100
@@)DB 12)=0 100
6C)10 13)4 100
@B)D@ D)0= 100
6D)3= B)1D 100
@1)13 D)2@ 100
9ALANCE 87EET L LIA9ILITIE8
YEAR Net 3ort# 2006 36)1= 200+ 32)@0 2008 36)C3 2009 33)00 2010 3+)81 2011 3B)C1
9orro+in!s Current Liabi%ities & Pro2isions ;e"erred TaG Liabi%it'
10)D3
11)C=
13)0B
1+)40
16)0B
12)0@
@3)06
4)33
@1)21
6D)3C
6C)2D
@0)2D
1) 6
1)1B
0)D=
1)1@
0)D0
0)=2
Tota% Liabi%ities
100
100
100
100
100
100
INCOME 8TATEMENT
YEAR 2006 200+ 2008 2009 2010 2011 8a%es 100 100 100 100 100 100
E9;ITA E9;TA E9T PAT EP8
10)3= =)@@ D)D2 B)6B 0)0@
12)1B 11)BB 10)C= C)@@ 0)03
13)6D 13)01 12)21 D)36 0)03
16)C@ 13)B1 12)CD =)@@ 0)02
1+)1+ 1 )89 14)8+ 11)04 0)02
1@)3@ 13)=6 12)B@ D)B1 0)01
,INDIN-S:
Formattin! "inan&ia% statements in t#is +a' redu&es t#e bias t#at &an o&&ur +#en ana%'.in! &om/anies o" di""erin! si.es) :It a%so a%%o+s "or t#e ana%'sis o" a &om/an' o2er 2arious time /eriods( re2ea%in!( "or eGam/%e( +#at /er&enta!e o" sa%es is &ost o" !oods so%d and #o+ t#at 2a%ue #as &#an!ed o2er time) In t#is &ase( t#e sa%es #ad been &onsiderab%' !ood ti%% 2010 and t#en "rom t#e 'ear 2010 to 2011 t#e in&ome or t#e earnin!s o" t#e &om/an' de&reased)
SWOT ANALYSIS
STREN-THS
• L&T has successfully outperformed its rival companies (HCC, NCC, Punj Lloyd) due to superior product performance. • n a!esome "rand ima#e, "ein# $ndia%s lar#est &&C company. • L&T has #reat infrastructure spendin# plans that "uild a stron# "usiness prospect. • Lo!er response time !ith effective and efficient service that ensures a hi#h de#ree of customer satisfaction. • L&T has a dedicated !or'force of over ()*** employees, aimin# at ma'in# a lon#+term career in the company.
WEAKNESSES
• $n spite of L&T%s #lo"al presence, it is not very popular in the international mar'et. • The customer service staff still needs trainin# specially in the delivery and help des' areas, that threaten invitin# ne! clients. • ,ectoral #ro!th is constrained due to lo! unemployment levels and competition for staff. • There are some #aps in ran#e for certain sectors li'e #lo"al delivery mana#ement, processes and systems, that someho! have mana#ement issues.
OPPORTUNITIE • -emand of its services S in .iddle &ast, &urope
and ,outh+&ast sia. • L&T is #ood at convertin# adversities into opportunities and continue it%s march of pro#ress . • The end+users respond positively to ne! ideas, so there e/ists a #reat possi"ility that L&T could e/tend to overseas "roadly. • .ainframe mana#ement capa"ilities !ill #ive opportunity to L&T+$tes to #o for lar#e infrastructure deals and hostin# "i0.
THREATS
• Le#islation could ma'e an impact over L&T%s "usiness proceedin#s. • $n spite of "ein# amon# the most dominant con#lomerate in the country, L&T may "e vulnera"le to reactive attac' "y its major competitors. • Lac' of infrastructure in rural areas could constrain investment. • The hi#h volume1lo! cost mar'et is intensely competitive.
!ON!LUSION
O2era%%( t#e &om/an' is in a "air%' !ood /osition ti%% t#e 'ear 2010)A%t#ou!# 2010 to 2011 /eriod sa+ a do+n"a%% in t#e /er"orman&e but t#is &an be due to !%oba% e&onomi& s%o+do+n) T#e &om/an'$s /ro"it ratios indi&ate t#at is #as #i!# /ro"it mar!ins and t#us it is sa"e to in2est in t#is &om/an') Ot#er ana%'sis te&#ni5ues a%so re2ea% t#at sa%es o" t#e &om/an' #a2e been &onsiderab%' !ood) T#us( t#e &om/an' is +ort# o" t#e a//re&iation it #as re&ei2ed)
Re"erren&es
• • • • • 3i1i/edia +++)%arsentoubro)&om +++)mone'&ontro%)&om +++)&nb&)&om Finan&ia% Mana!ement b' I M Pande'
THANK
so mu&# "or bearin! us "or t#e /ast 20 minutes))
YOU
doc_629283166.pptx
PRESENTED BY : • ROHIT VERMA 111268 • SHUBHI JAIN 111338 • SHUBHAM DWIVEDEE 111339
COMPANY PROFILE
Larsen & Toubro Limited (L&T is amon!st one o" t#e India$s %ar!est te&#no%o!'( en!ineerin! &onstru&tion and manu"a&turin! &on!%omerate) • L&T is &onsidered to be t#e *be%%+et#er o" India,s en!ineerin! se&tor-( and +as re&o!ni.ed as t#e &om/an' o" t#e 'ear in 2010) • L&T$s business stru&ture #as a dominant /resen&e in India,s in"rastru&ture( /o+er( #'dro&arbon( ma&#iner'( s#i/bui%din! and rai%+a' se&tors) • L&T #as an internationa% /resen&e) T#e &om/an',s businesses are su//orted b' a +ide mar1etin! and distribution net+or1( and #a2e estab%is#ed a re/utation "or stron! &ustomer su//ort) • 3it# more t#an a se2en de&ades o" dedi&ated &ustomer4"o&used ser2i&e and &ontinuous 5uest "or +or%d &%ass 5ua%it' #a2e estab%is#ed t#em as t#e %eader o" t#e E&C se&tor in India)
7I8TORY
T#e e2o%ution o" L&T into t#e &ountr',s %ar!est en!ineerin! and &onstru&tion or!ani.ation is amon! t#e most remar1ab%e su&&ess stories in Indian industr') • L&T +as "ounded in 9omba' (Mumbai in:1938:b' t+o ;anis# en!ineers( 7ennin! 7o%&14Larsen and 8oren RRENT RATIO
It is a measure o" t#e "irm$s short term solvency i)e)( it indi&ates t#e a2ai%abi%it' o" &urrent assets in ru/ees "or e2er' one ru/ee o" &urrent %iabi%it') It re/resents a mar!in o" sa"et' "or t#e &reditors o" t#e "irm)
!R
1)6 1)2 1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011
!R "#$%& '( 1)10
CR
YEAR
200B 200C 200D 200= 2010 2011
10
1)03 0)=2 1)18 1)02 1)02
E>IC< RATIO
Eui&1 Ratio a)1)a) A&id4Test Ratio estab%is#es re%ations#i/ bet+een 5ui&1 assets and &urrent %iabi%ities( +#ere 5ui&1 assets re"er to t#ose assets +#i&# &an be &on2erted into &as# immediate%' or reasonab%' soon +it#out %oss o" 2a%ue)
*R
1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011 ER
*R "#$%& '( 0)C= 0)C1 0)B1 0)86 0)B= 0)B0
YEAR
200B 200C 200D 200= 2010 2011
11
ANALYSIS: "LI*UDITY RATIOS(
Li5uidit' re"ers to t#e readiness o" assets to be &on2erted to &as#) T#e' !i2e a !enera% idea o" t#e "irm,s abi%it' to /a' its s#ort4term debts) Idea%%' t#e &urrent ratio s#ou%d be !reater t#an 1)@) T#ou!# t#ere &an be eG&e/tions( some !ood &om/anies &an #a2e %ess t#an 1 or e2en a ne!ati2e &urrent ratio +#en t#e' re&ei2e mone' "aster "rom t#eir &ustomers t#an t#e' #a2e to /a' to t#eir 2endors) 8o( +e &an sa' t#at L&T +i%% not be ab%e to meet its &urrent ob%i!ations as %on! as t#e' do not use t#eir in2entories e""i&ient%' as its in2entories "orm a %ar!e /art o" t#eir &urrent assets)
LEHERAAE RATIO8
3#at debt4 e5uit' miG do t#e' /re"er FF
;E9T RATIO
It te%%s us about t#e /ro/ortion o" t#e interest4bearin! debt in t#e &a/ita% stru&ture o" t#e "irm) Tota% debt +i%% in&%ude s#ort & %on!4term borro+in!s "rom "inan&ia% institutions( debenturesIbonds( de"erred /a'ment arran!ements ( ban1 borro+in!s( /ub%i& de/osits( et&)
DR
30 2@ 20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 ;R
DR "#$%& '( 1@)DD 1C)=1 22)B3 2 )6+ 23)@3 1=)33
YEAR
200B 200C 200D 200= 2010 2011
16 16
;E9T4EE>ITY RATIO
T#is ratio des&ribes t#e %ender$s &ontribution "or ea&# ru/ee o" t#e o+ner$s &ontribution)
DER
0)B 0)@ 0)6 0)3 0)2 0)1 0 200B 200C 200D 200= 2010 2011 ;ER
DER "#$%& '( 0)32 0)3B 0)3D 0) 3 0)3C 0)33
YEAR
200B 200C 200D 200= 2010 2011
1@ 1@
;E9T4A88ET RATIO
It measures t#e eGtent to +#i&# borro+ed "unds i)e)( debt su//ort t#e "irm$s assets) It indi&ates t#e /ro/ortion o" debt in2ested in !ettin! assets "or t#e "irm)
DAR
20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 ;AR
DAR "#$%& '( 10)D3 11)C= 13)0B 1+)40 16)0B 12)0@
YEAR
200B 200C 200D 200= 2010 2011
1B
ANALYSIS: ",INAN!IAL LEVERA-ES( Finan&ia% %e2era!e indi&ates t#e re%iabi%it' o" a business on its debts in
order to o/erate) Lo+er 2a%ue o" debt ratio is "a2orab%e and a #i!#er 2a%ue indi&ates t#at #i!#er /ortion o" &om/an',s assets are &%aimed b' it &reditors +#i&# means #i!#er ris1 in o/eration) In &ase debt ratio is %ess t#an 0)@)T#is indi&ates t#at &om/an'$s assets are "inan&ed t#rou!# e5uit' and %ess o" debt( %o+er 2a%ues o" debt4to4 e5uit' ratio are "a2orab%e indi&atin! %ess ris1) T#us( t#e &om/an' is %ess ris1ier) L&T #as %o+ /ro/ortion o" debt in its &a/ita% stru&ture and t#us t#e assets su//orted b' t#em and &ost o" debt a!ainst a ru/ee o" e5uit' s#o+ a simi%ar trend)
INTERE8T COHERAAE RATIO
ICR a)1)a) times4interest4earned is used to test t#e "irm$s debt ser2i&in! &a/a&it') It s#o+s t#e number o" times t#e interest &#ar!es are &o2ered b' "unds t#at are ordinari%' a2ai%ab%e "or t#eir /a'ment)
I!R
3@ 30 2@ 20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011
I!R "#$%& '( 12)6C
ICR
YEAR
200B 200C 200D 200= 2010 2011
1D
26)2= 28)63 12)=6 13)6C 10)=0
ANALYSIS: "!OVERA-E RATIOS(
T#e #i!#er t#e &o2era!e ratios t#e %ess a &om/an' is burdened b' debt) I" a &om/an' #as no debt or t#e %oan interest is bein! /aid b' interest in&ome "rom in2estments or ot#er a&ti2ities t#e ratio is .ero +#i&# o" &ourse is eG&e%%ent) A ne!ati2e ratio te%%s us t#at t#e &om/an' &annot e2en /a' its interest on %oans "rom its o/eratin! in&ome( sta' "ar a+a' "rom su&# &om/anies) In &ase o" L&T t#e ratios are &om/arati2e%' moderate)
3#at do t#e turno2ers de/i&tFF
T>RNOHER RATIO8
• ;a's o" In2entor' 7o%din!
•
Tota% Assets Turno2er Ratio
INHENTORY T>RNOHER RATIO
It indi&ates t#e e""i&ien&' o" t#e "irm in /rodu&in! and se%%in! its /rodu&t) It s#o+s #o+ ra/id%' t#e in2entor' is turnin! into re&ei2ab%es t#rou!# sa%es)
ITR
D C B @ 6 3 2 1 0 200B 200C 200D 200= 2010 2011
ITR "#$%& '( B)D0
ITR
YEAR
200B 200C 200D 200= 2010 2011
21
@)== )88 @)=2 6)D6 3)@6
;a's o" In2entor' 7o%din!
It !i2es us an idea o" t#e sto&1 mana!ement o" t#e &om/an')
DIH
D0 C0 B0 @0 60 30 20 10 0 200B 200C 200D 200= 2010 2011
DIH "./0'( @3 B0
;I7
YEAR 200B 200C 200D 200= 2010 2011
22
B1 B1 +4 102
;E9TOR8 T>RNOHER RATIO
T#e debtors turno2er ratio is t#e is t#e re%ations#i/ bet+een net sa%es and a2era!e debtors) It is a%so &a%%ed a&&ount re&ei2ab%e turno2er ratio be&ause +e debtor and bi%% re&ei2ab%es, tota% is used "or &a%&u%ation)
DTR
3)@ 3 2)@ 2 1)@ 1 0)@ 0 200B 200C 200D 200= 2010 2011
DTR "#$%& '( 2)98 2)B1 1)=B 1)11 1)0@ 0)=3
YEAR
200B 200C 200D 200= 2010 2011
23
;TR
AHERAAE COLLECTION PERIO;
T#e a2era!e &o%%e&tion /eriod is t#e ratio o" t#e number o" da's in a /eriod and t#e in2entor' turno2er ratio)
A!P
16 12 10 D B 6 2 0 200B 200C 200D 200= 2010 2011
A!P YEA "%12#3 R '( 6)02 200B
ACP
6)@= B)11 10)D6 11)3D 12)91
200C 200D 200= 2010 2011
26
A88ET T>RNOHER RATIO
T#e asset turno2er ratio is t#e measure o" t#e abi%it' o" a &om/an' or a "irm to use its assets e""i&ient%' in order to !enerate sa%es)
ATR
1)2 1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011 ATR
ATR "#$%& '( 1)12 0)D@ 0)@@ 0)60 0)31 0)2@
YEAR
200B 200C 200D 200= 2010 2011
2@
ANALYSIS: "TURNOVER RATIOS(
:A %o+ turno2er im/%ies /oor sa%es and( t#ere"ore( eG&ess in2entor') A #i!# ratio im/%ies eit#er stron! sa%es or ine""e&ti2e bu'in!) From t#e 'ear 200B to 200D t#e ratio is #i!# but "or t#e %atter /art t#e ratio is %o+) ;ebtors turno2er :indi&ates t#e 2e%o&it' o" debt &o%%e&tion o" a "irm) Lo+er debtor turno2er ratio is bad be&ause it means( s%o+%'( mone' is bein! &o%%e&ted and %i5uidit' /osition +i%% be&ome +ea1) Com/anies +it# %o+ /ro"it mar!ins tend to #a2e #i!# asset turno2er( +#i%e t#ose +it# #i!# /ro"it mar!ins #a2e %o+ asset turno2er): T#us( t#e &om/an' #as #i!# /ro"it mar!ins)
7o+ are t#e /ro"its s#a/in! u/F
PROFITA9ILITY RATIO8
• O/eratin! EG/enses Ratio
ARO88 PROFIT MARAIN RATIO
T#e !ross /ro"it mar!in re"%e&ts t#e e""i&ien&' +it# +#i&# mana!ement /rodu&es ea&# unit o" /rodu&t) It im/%ies #o+ &ost e""i&ient%' a "irm &an /rodu&e its !oods)
-PM
20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 APM
-PM "4( =)20 11)1@ 12)@B 13)@B 1 )+6 13)13
YEAR 200B 200C 200D 200= 2010 2011
2D
NET PROFIT MARAIN RATIO
It estab%is#es a re%ations#i/ bet+een net /ro"it and sa%es and indi&ates t#e "irms e""i&ien&' in manu"a&turin!( administerin! and se%%in! its /rodu&ts)
NPM
16 12 10 D B 6 2 0 200B 200C 200D 200= 2010 2011
NPM "4( B)C3 C)D0
NPM
YEAR 200B 200C 200D 200= 2010 2011
2=
D)@= 10)13 11)+0 D)=3
OPERATINA EJPEN8E8 RATIO
It indi&ates t#e o/eratin! eG/enses in&urred b' t#e &om/an' in its /rodu&tion and +or1in!)
OER
=2 =0 DD DB D6 D2 200B 200C 200D 200= 2010 2011 OER
"4( =0)66 D=)=D 91)21 DC)DD D@)@C DC)C0
OER
YEAR 200B 200C 200D 200= 2010 2011
30
ANALYSIS: "PRO,IT MAR-IN RATIOS(
8in&e t#e /ro"itabi%it' ratios are #i!#( it indi&ates t#at t#e &om/an' #as an e""i&ient mana!ement) It a%so indi&ates t#at t#e &ost o" !oods so%d remains &onstant and t#ere is an in&rease in t#e /ro/ortionate 2o%ume o" #i!#er mar!in items) T#e &om/an' #as in&reasin! /ro"its ti%% t#e 'ear 2010 a"ter +#i&# t#ere is a s%i!#t de/re&iation +#i&# &an be a resu%t o" t#e !%oba% e&onomi& s%o+do+n)
Return on In2estment
Return on Tota% Assets
ROTA te%%s us about t#e #o+ e""e&ti2e%' t#e in2estment in t#e "irm i)e)( /oo% o" "unds su//%ied b' s#are#o%ders and %enders is bein! used in terms o" tota% assets)
ROTA
10 D B 6 2 0 200B 200C 200D 200= 2010 2011 ROTA
ROTA "4( C)@6 C)=@ C)=2 9)24 =)06 B)BB
YEAR 200B 200C 200D 200= 2010 2011
33
Return on Net Assets
RONA te%%s us about t#e #o+ e""e&ti2e%' t#e in2estment in t#e "irm i)e)( /oo% o" "unds su//%ied b' s#are#o%ders and %enders is bein! used in terms o" net assets)
RONA
D0 B0 RONA 60 20 0 200B 200C 200D 200= 2010 2011
RONA "4( CB)C3 C=)=C C6)@3 84)62 C=)BC @=)@B
YEAR 200B 200C 200D 200= 2010 2011
36
Return on E5uit'
ROE indi&ates #o+ +e%% t#e "irm #as used t#e resour&es o" o+ners) It is &a%&u%ated to see t#e /ro"itabi%it' o" o+ner$s in2estment in t#e "irm)
ROE
30 2@ 20 1@ 10 @ 0 200B 200C 200D 200= 2010 2011 ROE
ROE "4( 22)06 26)6C 22)D1 28)00 23)=2 1D)13
YEAR 200B 200C 200D 200= 2010 2011
3@
ANALYSIS: "ROTA5 RONA5 ROE(
ROTA47i!#er 2a%ues o" return on assets s#o+ t#at business is more /ro"itab%e) RONA4 ) An im/ro2in! trend in t#is ratio indi&ates t#at t#e institution is in&reasin! its net assets and is %i1e%' to be ab%e to set aside "inan&ia% resour&es to stren!t#en its "uture "inan&ia% "%eGibi%it') ROE47i!#er 2a%ues are !enera%%' "a2orab%e meanin! t#at t#e &om/an' is e""i&ient in !eneratin! in&ome on ne+ in2estment) T#e &om/an' "o%%o+s a "a2orab%e out&ome as 2a%ues are !enera%%' in&reasin! ti%% 2010) O2era%%( t#e &om/an'$s return on in2estment and e5uit' is &onsiderab%' !ood ti%% t#e 'ear 200=)A"ter t#at t#e &om/an'$s /osition deteriorates to a %itt%e eGtent)
Earnin!s Per 8#are
T#is is t#e amount o" in&ome t#at t#e &ommon sto&1#o%ders are entit%ed to re&ei2e (/er s#are o" sto&1 o+ned ): T#is in&ome ma' be /aid out in t#e "orm o" di2idends( retained and rein2ested b' t#e &om/an'( or a &ombination o" bot#)
EPS
D C B @ 6 3 2 1 0 200B 200C 200D 200= 2010 2011
EPS "R')( C)3B 6)=@
EP8
YEAR 200B 200C 200D 200= 2010 2011
3C
+)43 @)=6 C)2C B)@0
;i2idend Per 8#are
;i2idend /er s#are (;P8 is t#e tota% di2idends /aid out o2er an entire 'ear (in&%udin! interim di2idends but not in&%udin! s/e&ia% di2idends di2ided b' t#e number o" outstandin! ordinar' s#ares issued)
DPS
1)6 1)2 1 0)D 0)B 0)6 0)2 0 200B 200C 200D 200= 2010 2011 ;P8
DPS "R')( 1)1+ 0)BB 0)B3 0)@C 0)B6 0)B@
YEAR 200B 200C 200D 200= 2010 2011
3D
;i2idend4Pa'out Ratio
T#e /er&enta!e o" earnin!s /aid to s#are#o%ders in di2idends)
DPR
0)2 0)1@ 0)1 0)0@ 0 200B 200C 200D 200= 2010 2011 ;PR
DPR 0)1B 0)13 0)0= 0)10 0)0= 0)19
YEAR 200B 200C 200D 200= 2010 2011
3=
ANALYSIS: "EPS5 DPS5 D6P(
7a2in! a !ro+in! in t#e di2idend /er s#are &an be a si!n t#at t#e &om/an',s mana!ement be%ie2es t#at t#e !ro+t# &an be sustained) More mature &om/anies tend to #a2e a #i!#er /a'out ratio) A stab%e di2idend /a'out ratio indi&ates a so%id di2idend /o%i&' b' t#e &om/an',s board o" dire&tors) T#us( t#e &om/an' is stab%e)
HAL>ATION RATIO8
Is t#e 2a%ue o" s#ares risin!F
Pri&e4Earnin!s Ratio
T#e PIE ratio re"%e&ts t#e /ri&e &urrent%' bein! /aid b' t#e mar1et "or ea&# ru/ee o" &urrent%' re/orted EP8) It is +ide%' used b' t#e se&urit' ana%'sts to ana%'.e t#e "irm$s /er"orman&e as eG/e&ted b' t#e in2estors)
PER
B @ 6 3 2 1 0 200B 200C 200D 200= 2010 2011 PER
PER "#$%& '( 6)@6 6)0= 6)3= 3)@C 6)1D ) 1
YEAR
200B 200C 200D 200= 2010 2011
62
ANALYSIS: "VALUATION RATIOS(
Ha%uation ratio measures di""erent +a's o" %oo1in! at t#e re%ati2e 2a%ue o" a &om/an',s sto&1) A #i!# PIE ratio ma' si!ni"' t#at t#e &om/an' is o2er2a%ued( +#i&# means t#at e2entua%%' mar1et "or&es +i%% dri2e t#e /ri&e do+n) On t#e ot#er #and( a #i!# PIE &ou%d indi&ate !reat earnin! /o+er and t#e /ossibi%it' t#at /ro"itabi%it' +i%% in&rease o2er time( Kusti"'in! t#e #i!#er /ri&e) T#us( t#e &om/an' #as #i!# earnin! /o+er)
INDE7 ANALYSIS
IN;EJ ANALY8I8
T#e ana%'sis o" a &om/an',s "inan&ia% statements b' &om/arin! &urrent data +it# t#at o" a /re2ious 'ear( or base 'ear) 9ase4'ear ana%'sis a%%o+s "or &om/arison bet+een &urrent /er"orman&e and #istori&a% /er"orman&e)
9ALANCE 87EET L A88ET8
YEAR Net FiGed Assets 2006 100 200+ 2008 2009 2010 2011 03)9 4 808)4 8 132)== 221)1D 312)0@ 61B)@1
In2estments
100
1@3)20 366)B6 3CB)0B C@6)1B
;e"erred TaG Assets Current Assets
100
126)2D 13D)0C
291)8 2
23@)=B 21B)06
100
12@)C6 1B6)=B 2C3)6@ 2=D)DB
388)0 6
Loans & Ad2an&es
100
12B)23
204)+ 8
1B=)1= 1B@)=0 2C2)3=
Tota% Assets
100
131)3@ 206)3D 2D0)C0 3B0)3D
442)8
9ALANCE 87EET L LIA9ILITIE8
YEAR Net 3ort# 2006 100 200+ 126)D D 162)= 6 2008 20C)@ = 26B)@ B 2009 2C0)= D 6@1)0 3 2010 3=D)@ 6 6BC)D C 2011 4+ ) 9 492)6 6
9orro+in!s
100
Current Liabi%ities & Pro2isions ;e"erred TaG Liabi%it' Tota% Liabi%ities
100
136)@ B =C)BB
1=C)3 @ 11B)6 B 206)3 D
2@B)0 2 20C)6 3 2D0)C 0
321)2 @ 1D@)@ @ 3B0)3 D
419)8 6 262)0 4 442)8 9
100
100
131)3 @
INCOME 8TATEMENT
YEAR 8a%es 2006 100 200+ 11D)@ 6 13D)C B 166)B @ 166)= 2 13D)B 2 2008 1BB)3 3 21@)C 6 22B)3 B 22=)= @ 216)D 6 2009 232)B @ 330)6 3 331)6 D 33B)D = 366)1 C 2010 2@2)= @ 61D)0 6 620)C 6 426)1 3 432) 0 2011 293)3 9 433)4 8 428)0 3 620)@ B 3=1)1 =
E9;ITA
100
E9;TA
100
E9T
100
PAT
100
,INDIN-S:
:IndeG ana%'sis o" a &om/an',s "inan&ia% statements is im/ortant to be ab%e to determine +#et#er a &om/an' is !ro+in! or s#rin1in!) T#e /ositi2e inter4annua% trends in t#e in&ome statement &om/onents( bot# in&ome and eG/ense( #a2e %i"ted t#e &om/an',s:/ro"it mar!ins) In t#e &ase o" L&T( it eG/erien&ed a maKor in&rease in sa%es "or t#e /eriod re2ie+ed and +as a%so ab%e to &ontro% t#e eG/ense side o" its business) T#at,s a si!n o" a 2er' e""i&ient mana!ement)
!OMMON SI8E STATEMENT ANALYSIS
COMMON 8IME ANALY8I8
Finan&ia%:statement:ana%'sis dis/%a's:a%%:items:as:/er&enta!es
" a &ommon:base:"i!ure): T#is t'/e":"inan&ia%:statement:a%%o+s:"or:eas':ana%'sis bet+een &om/aniesr bet+een:time:/eriods o" a &om/an')9ALANCE 87EET L A88ET8
YEAR Net FiGed Assets 2006 =)D2 200+ =)=6 2008 10)B3 2009 10)=1 2010 11)3 2011 11)1C
In2estments ;e"erred TaG Assets Current Assets Loans & Ad2an&es Tota% Assets
1@)10 0)=D
1C)B2 0)=3
2@)6C 0)BB
20)23 1)02
31)61 0)B6
2C)@C 0)6D
8)36 13)62 100
@@)DB 12)=0 100
6C)10 13)4 100
@B)D@ D)0= 100
6D)3= B)1D 100
@1)13 D)2@ 100
9ALANCE 87EET L LIA9ILITIE8
YEAR Net 3ort# 2006 36)1= 200+ 32)@0 2008 36)C3 2009 33)00 2010 3+)81 2011 3B)C1
9orro+in!s Current Liabi%ities & Pro2isions ;e"erred TaG Liabi%it'
10)D3
11)C=
13)0B
1+)40
16)0B
12)0@
@3)06
4)33
@1)21
6D)3C
6C)2D
@0)2D
1) 6
1)1B
0)D=
1)1@
0)D0
0)=2
Tota% Liabi%ities
100
100
100
100
100
100
INCOME 8TATEMENT
YEAR 2006 200+ 2008 2009 2010 2011 8a%es 100 100 100 100 100 100
E9;ITA E9;TA E9T PAT EP8
10)3= =)@@ D)D2 B)6B 0)0@
12)1B 11)BB 10)C= C)@@ 0)03
13)6D 13)01 12)21 D)36 0)03
16)C@ 13)B1 12)CD =)@@ 0)02
1+)1+ 1 )89 14)8+ 11)04 0)02
1@)3@ 13)=6 12)B@ D)B1 0)01
,INDIN-S:
Formattin! "inan&ia% statements in t#is +a' redu&es t#e bias t#at &an o&&ur +#en ana%'.in! &om/anies o" di""erin! si.es) :It a%so a%%o+s "or t#e ana%'sis o" a &om/an' o2er 2arious time /eriods( re2ea%in!( "or eGam/%e( +#at /er&enta!e o" sa%es is &ost o" !oods so%d and #o+ t#at 2a%ue #as &#an!ed o2er time) In t#is &ase( t#e sa%es #ad been &onsiderab%' !ood ti%% 2010 and t#en "rom t#e 'ear 2010 to 2011 t#e in&ome or t#e earnin!s o" t#e &om/an' de&reased)
SWOT ANALYSIS
STREN-THS
• L&T has successfully outperformed its rival companies (HCC, NCC, Punj Lloyd) due to superior product performance. • n a!esome "rand ima#e, "ein# $ndia%s lar#est &&C company. • L&T has #reat infrastructure spendin# plans that "uild a stron# "usiness prospect. • Lo!er response time !ith effective and efficient service that ensures a hi#h de#ree of customer satisfaction. • L&T has a dedicated !or'force of over ()*** employees, aimin# at ma'in# a lon#+term career in the company.
WEAKNESSES
• $n spite of L&T%s #lo"al presence, it is not very popular in the international mar'et. • The customer service staff still needs trainin# specially in the delivery and help des' areas, that threaten invitin# ne! clients. • ,ectoral #ro!th is constrained due to lo! unemployment levels and competition for staff. • There are some #aps in ran#e for certain sectors li'e #lo"al delivery mana#ement, processes and systems, that someho! have mana#ement issues.
OPPORTUNITIE • -emand of its services S in .iddle &ast, &urope
and ,outh+&ast sia. • L&T is #ood at convertin# adversities into opportunities and continue it%s march of pro#ress . • The end+users respond positively to ne! ideas, so there e/ists a #reat possi"ility that L&T could e/tend to overseas "roadly. • .ainframe mana#ement capa"ilities !ill #ive opportunity to L&T+$tes to #o for lar#e infrastructure deals and hostin# "i0.
THREATS
• Le#islation could ma'e an impact over L&T%s "usiness proceedin#s. • $n spite of "ein# amon# the most dominant con#lomerate in the country, L&T may "e vulnera"le to reactive attac' "y its major competitors. • Lac' of infrastructure in rural areas could constrain investment. • The hi#h volume1lo! cost mar'et is intensely competitive.
!ON!LUSION
O2era%%( t#e &om/an' is in a "air%' !ood /osition ti%% t#e 'ear 2010)A%t#ou!# 2010 to 2011 /eriod sa+ a do+n"a%% in t#e /er"orman&e but t#is &an be due to !%oba% e&onomi& s%o+do+n) T#e &om/an'$s /ro"it ratios indi&ate t#at is #as #i!# /ro"it mar!ins and t#us it is sa"e to in2est in t#is &om/an') Ot#er ana%'sis te&#ni5ues a%so re2ea% t#at sa%es o" t#e &om/an' #a2e been &onsiderab%' !ood) T#us( t#e &om/an' is +ort# o" t#e a//re&iation it #as re&ei2ed)
Re"erren&es
• • • • • 3i1i/edia +++)%arsentoubro)&om +++)mone'&ontro%)&om +++)&nb&)&om Finan&ia% Mana!ement b' I M Pande'
THANK
so mu&# "or bearin! us "or t#e /ast 20 minutes))
YOU
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