ANALYSIS OF FINANCIAL STATEMENTS

Presented To:Prof. C.S. BALASUBRAMANIAM

Company Profile: Type Industry FoundedPublic Conglomerate Mumbai, India(1938)

Founder(s)- Henning Holck-Larsen

Soren Kristian Toubro Headquarters-Mumbai, India Area served- Worldwide

 Key people-A M Naik (Chairman & MD)

Products- Power generation Refineries Cement plants Ships

Switchgear
ServicesEngineering Services Turnkey Projects IT Services Shipbuilding

 Divisions -Engineering & Construction Projects (E&C) Heavy Engineering (HED) Engineering Construction & Contracts (ECC) Electrical & Automation (EBG) Machinery & Industrial Products (MIPD) Information Technology & Engineering services.(INFOTECH). Finance and Banking Solutions(BFS) Website- www.larsentoubro.com

Introduction: Larsen & Toubro Limited (L&T) is a technology, engineering, construction

and manufacturing company. It is one of the largest and most respected

companies in India's private sector Seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings grow significantly. It

continues to grow its overseas manufacturing footprint, with facilities in

China and the Gulf region

 The company's businesses are supported by a wide marketing and distribution network, and have established a reputation for strong customer support.

L&T believes that progress must be achieved in

harmony with the environment. A commitment to community welfare and environmental protection are an integral part of the corporate vision.

History: L&T was founded in Bombay (Mumbai) in 1938 by two Danish engineers,

Henning Holck-Larsen and Soren Kristian Toubro. Both of them were

strongly committed to developing India's engineering capabilities to meet the demands of industry. 1938-1950: Started with trading &making dairy equipment, fabrication services, war-time ship repair. Entered construction business Entered into switchgear business

1960-1980:Emerges as one of the largest & best erection construction

 Commenced Manufacturing earth-moving equipment. Entered into the cement business in early 1980s 1990-2005:Technology majors for engineering in power and hydrocarbon sectors Mid 90s: Entered into IT & Financial Services Emerges as Indias largest integrated E&C company.

2006-2009: JVs with MHI for super critical power plant

equipment.

 Foray into Railways sector Initiated capacity expansion Expanded Developmental projects business.

Step towards power generation

Ratio-Analysis:Profitability Ratios: Gross Profit Margin: - Gross profit X 100 Net sales 2011:5445.49 X 100 44855.76 = 12.14% 7105.68 X 100 53265.95 = 13.34%

2012:-

OPERATING RATIO: - Operating Income X 100 Net sales 2011:5878.57 X 100 43656.71 = 13.46% 7807.78 X 100 53265.95 = 14.65%

2012:-

 ACTIVITY RATIOS:-

2012:-

43656.71 29007.37 = 1.52

2012:-

53625.95 35118.79 = 1.52

Inventory Turnover:- Cost of goods sold Average inventory 2011:46888.67 1577.15 = 29.73

2012:-

56532.05 1776.62 = 31.82

DEBT/ASSET RATIO:Total debt to assets ratio = Total debt Total assets 2011:13696.33 35118.79 = 0.39 2012:9572.43 29007.37 = 0.33

INTEREST COVERAGE RATIO:- EBIT Interest Expense 2011:- 6478.40 1199.23 = 5.40 2012:8310.72 1683.31 = 4.94

CURRENT RATIO:Current ratio = Current assets Current liabilities 2011:- 35234.34 28372.99 = 1.24% 2012:- 43857.44 33084.62 = 1.33%

QUICK RATIO:Quick ratio = Current assets inventories Current liabilities 2011:33480.12 28372.99 = 1.18

2012:-

41686.62 33084.62 = 1.26

 DUPONT ANALYSIS

Future Plans: To design, engineer, manufacture and supply axial fans and air preheaters to Indian thermal power plants ranging between 100 MW to 1200 MW. These products form vital components of energy efficient thermal power plants. Larsen & Toubro (L&T) contract by the Ministry of Defense for the design and construction of 36 High Speed Interceptor Boats for the Indian Coast Guard. The contract is valued at Rs. 977 crore, and is among one of the main initiatives being taken by the government to strengthen coastal security.

 L&T is eyeing to participate in various upcoming projects in rail sector such as rolling stock manufacturing, station redevelopment, urban mass transit systems among others.

L&T is consolidating its presence in he Middle East ,Africa

and South East Asia by ramping up capabilities in EPC (ENGINEERING PROCUREMENT & CONSTRUCTION) , construction and manufacturing. EPC is concept of building solid fuel captive power plant.