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INTERPRETATION
The above table 5.1 showed the financial performance of L&T ssssfor the year
2012 and 2013 is not at good sign. The sales decreased by 15.53% but the operating
profit decreased by 108.70% because of a low decrease in the cost of goods sold
i.e,16.17%.The operating expenses increases from 16.44% to 52.85% i.e, operating
expenses increases 2012 to 2013The net profit is decreases by 108.70% because it is
affected due to the decrease of non operatingincomes.Overall the profitability of the
business is totally decreases in the year 2013
COMPARATIVE BALANCE SHEET (2012-2013)
(Rs in crores)
Table: 5.2
FIXED ASSETS:
CURRENT
ASSETS:
SHAREHOLDERS
FUNDS:
(-)OPERATING
EXPENSES:
FIXED ASSETS:
CURRENT
ASSETS:
SHAREHOLDERS
FUNDS:
The above table 5.4 showed the financial performance of L&T ltd for the there is a
decrease in working capital by Rs.46,89,12,968.
The fixed assets for the year 2013-2014 were decreased by Rs.3,37,14,810 and
share holder’s funds are decreased by Rs.4,10,99,505 . It means that fixed
assets were not fully financed out of long-term finances. And part of the
working capital is not financed out of long-term finances which are not atgood
sign.
If we observe the long-term finances the company has raised money from the
public by the issue of shares and debentures and repaid its institutional loans.
This means the company is enjoying the investors’ confidence.
Ofthe current assets debtors increased by 13.92%. It means the company is
unusable to collect the money from its debtors promptly.
The liquidity position improved substantially the same can be witnessed in the
cash and bank balances
COMPARATIVE INCOME STATEMENT (2014– 2015)
(Rs in crores)
Table: 5.5
(-)OPERATING
EXPENSES:
FIXED ASSETS:
CURRENT ASSETS:
SHAREHOLDERS
FUNDS:
The above table 5.6 showed the financial performance of the L&T Ltd that there
is an decrease in working capital by Rs. 39,53,11,575.
The fixed assets for the year 2014-2015 were decreased by Rs.2,19,93,825 and
the long-term debt and share holder’s funds decreased by Rs.4,98,95,974 and
Rs.1,19,52,110 respectively. It means that fixed assets were not fully financed out of
long-term finances. And part of the working capital is not financed out of long-term
finances which are at good sign.
If we observe the long-term finances the company has raised money from the
public by the issue of shares and debentures and repaid its institutional loans. This
means the company is enjoying the investors’ confidence.
(-)OPERATING
EXPENSES:
The above table 5.7 showed the financial performance of L&T ltd for the year
2015 and 2016 is at good sign because there is a increase in sales by
Rs.1,11,58,78,001 and the profits are increased by Rs2,22,27,533. The causes for such
changes can be seen in the related figures.
The sales increased by 116.04% and the cost of sales is increased by 79.92%
.On account of this the gross profit is also increased by 174.78%.This change shows
the company position is at good sign.
The operating expenses like personnel cost and finance charges increased
by28.60 % and 40.44%.
The results are evident to say that L&T ltd performance for the year 2015-
2016 is at good sign.
COMPARATIVE BALANCE SHEET (2015-2016)
(Rs in crores)
Table: 5.8
FIXED ASSETS:
CURRENT ASSETS:
SHAREHOLDERS
FUNDS:
The above table 5.8 showed the financial performance of the L&T Ltd.In case of
L&T Ltd there is an increase in working capital by Rs.7,53,78,16,652.
The fixed assets for the year 2015-2016 were decreased by Rs.1,23,19,270 and
the long-term debt and share holder’s funds increased by Rs.17,68,66,981 and
Rs.2,48,81,843 respectively. It means that fixed assets were fully financed out of
long-term finances. And part of the working capital is also financed out of long-term
finances which are atgood sign.
If we observe the long-term finances the company has raised money from the
public by the issue of shares and debentures and repaid its institutional loans. This
means the company is enjoying the investors’ confidence.
Of thecurrent assets debtors increase by 157.56%. It means the company is
unable to collect the money from its debtors promptly.
The liquidity position improved substantially the same can be witnessed in the
cash and bank balances.
There is an increase in the general reserve by 100.00%. It means the
company’s profits increased in the year 2015-2016
COMPARATIVE INCOME STATEMENT (2016– 2017)
(Rs in crores)
Table: 5.9
FIXED ASSETS:
CURRENT ASSETS:
SHAREHOLDERS
FUNDS:
The above table 5.10 showed the financial performance of the L&T Ltd there is
an increase in working capital by Rs.57,64,82,000.
The fixed assets for the year 2016-2017 were increased by Rs.18,13,78,143 and
the long-term debt decreased by Rs.74,44,603 and share holder’s funds increased by
Rs.25,32,86,120 . It means that fixed assets were fully financed out of long-term
finances. And part of the working capital is also financed out of long-term finances
which are at good sign.
If we observe the long-term finances the company has raised money from the
public by the issue of shares and debentures and repaid its institutional loans. This
means the company is enjoying the investors’ confidence.
Of the current assets debtors decrease by 32.61%. It means the company is able
to collect the money from its debtors promptly.
The liquidity position improved substantially the same can be witnessed in the
cash and bank balances.
There is an increase in the general reserve by 900.00%. It means the
company’s profits increased in the year 2016-2017.
COMMON SIZE INCOME STATEMENT (2012 – 2013)
(Rs in crores)
Table: 5.11
(-)OPERATING
EXPENSES:
Table: 5.12
FIXED ASSETS:
CURRENT ASSETS:
SHAREHOLDERS
FUNDS:
In the above table 5.12 showed the financial performance of the L&T Ltd the
current assets in 2012 is Rs.72,82,83,202 and in 2012 is Rs.58,14,46,028 and current
liabilities in 2013is Rs.11,96,96,666 and in 2013 is Rs.8,26,55,027.It means the
working capital position and liquidity position are favorable.
The fixed assets in L&T Ltd are in 2012 is Rs.36,82,09,241& in 2013 is
Rs.33,42,59,762 and the aggregate of long-term debt and share holder’s in 2012 is
Rs.1,19,37,89,065 and 2012 is 1,04,60,86,746. It means of the fixed assets are fully
financed out of short-term funds which is a healthy sign.
It means the working capital is financed out of long-term funds which is a
good practice the overall financial position of the L&T Ltd is at good sign.
COMMON SIZE INCOME STATEMENT (2013– 2014)
(Rs in crores)
Table: 5.13
(-)OPERATING
EXPENSES:
INTERPRETATION
The above table 5.13 showed the financial performance of L & T ltd for the
year 2013 looks better than 2014.In case of 2012 the cost of goods sold is more than
2014 by 25.46%.The operating expenses in the year 2014 is more than that of 2013 by
10.11% The overall efficiency of L & T ltd during the year 2013-2014 is at good sign.
COMMOM SIZE BALANCE SHEET (2013-2014)
(Rs in crores)
Table: 5.14
FIXED ASSETS:
CURRENT ASSETS:
0.05
Interest accrued 21,09,235 0.17 5,79,248 17.18
Inventories 26,69,71,442 22.15 20,38,32,378 7.58
Cash & bank balance 3,97,50,706 3.30 8,99,41,460 13.0
Sundry debtors 13,53,64,375 11.23 15,42,11,506 11.80
Loans & advances 13,72,50,270 11.39 13,99,64,270
49.61
Total 58,14,46,028 48.24 5,88,528,862
100
Total assets 1,20,53,69,760 100 1,18,63,22,932
SHAREHOLDERS
FUNDS:
In the above table 5.14 showed the financial performance of the L&T Ltd the
current assets in 2013 is Rs.5,81,44,60,28 and in 2014 is Rs.58,85,28,862 and current
liabilities in 2013 is Rs.8,26,55,027 and in 2014 is Rs.11,96,15,894.It means the
working capital position and liquidity position are favorable.
The fixed assets in L&T Ltd are in 2013 is Rs.33,42,59,762& in 2014
isRs.30,05,44,952 and the aggregate of long-term debt and share holder’s in 2013 is
Rs.1,04,60,86,746and in 2014 is Rs.1,00,77,44,743. It means of the fixed assets are
fully financed out of short-term funds which is a healthy sign.
It means the working capital is financed out of long-term funds which is a
good practice the overall financial position of the L&T Ltd is at good sign.
COMMON SIZE INCOME STATEMENT (2014– 2015)
(Rs in crores)
Table: 5.15
(-)OPERATING
EXPENSES:
INTERPRETATION
The above table 5.15 showed the financial performance of L&T ltd for the year
2015 looks better than 2014.In case of 2014 the cost of goods sold is less than that of
2015 by 37.68%.The operating expenses in the year 2014 is more than that of 2015 by
31.14%The overall efficiency of L&T ltd during the year 2014-2015is at good sign.
COMMOM SIZE BALANCE SHEET (2014-2015)
(Rs in crores)
Table: 5.16
2014 Change 2015 Change
Particulars
(Rs.) (%) (Rs.) (%)
FIXED ASSETS:
Net block 30,05,44,952 25.33 27,85,51,127 24.09
Investments 28,49,84,147 24.02 32,33,06,400 27.96
deferred tax asset 1,22,64,971 1.03 2,30,66,573 1.99
CURRENT ASSETS:
Interest accrued 5,79,248 0.05 12,88,435 0.11
Inventories 20,38,32,378 17.18 27,27,48,568 23.59
Cash & bank balance 8,99,41,460 7.58 3,40,77,378 2.95
Sundry debtors 15,42,11,506 13.0 8,93,27,212 7.73
Loans & advances 13,99,64,270 11.80 13,39,46,267 11.58
SHAREHOLDERS FUNDS:
Share capital 8,00,00,000 6.74 8,00,00,000 6.92
Reserves & surplus 61,95,55,147 52.22 60,76,03,037 52.55
Secured loans 30,81,89,596 25.98 25,82,93,622 22.34
Unsecured loans 5,89,62,295 4.97 7,43,39,016 6.43
Deferred tax liability 0 0 0 0
Current liabilities 11,96,15,894 10.08 13,60,76,285 11.77
(-)OPERATING
EXPENSES:
INTERPRETATION
The above table 5.17 showed the financial performance of L&T ltd for the year 2016
looks better than 2015 In case of 2015 the cost of goods sold is less than that of
2016by 16.33%.The operating expenses in the year 2015 is more than that of 2016 by
4.60%.The overall efficiency of L&T ltd during the year 2015-2016is at good sign.
COMMOM SIZE BALANCE SHEET (2015-2016)
(Rs in crores)
Table: 5.18
2015 Change 2016 Change
Particulars
(Rs.) (%) (Rs.) (%)
FIXED ASSETS:
Net block 24.09
27,85,51,127 26,62,31,857 18.36
Investments 27.96
32,33,06,400 39,48,29,790 27.23
deferred tax asset 1.99
2,30,66,573 1,31,75,707 0.91
Total 54.04
62,49,24,100 67,42,37,354 46.50
CURRENT ASSETS:
Interest accrued 0.11
Inventories 12,88,435 18,02,086 0.12
27,27,48,568 23.59 3,90,50,092 2.69
Cash & bank balance 2.95
Sundry debtors 3,40,77,378 4,10,00,686 2.83
8,93,27,212 7.73 23,00,77,235 15.87
Loans & advances 11.58
13,39,46,267 11,22,50,699 7.74
Total 45.96
53,13,87,860 77,56,31,627 53.50
Total assets 100 14,49,86,898
1,15,63,11,960 100
SHAREHOLDERS
FUNDS:
Share capital 8,00,00,000 6.92 8,00,00,000
Reserves & surplus 5.52
60,76,03,037 52.55 63,24,84,880
Secured loans 43.62
25,82,93,622 22.34 43,51,60,603
Unsecured loans 30.01
7,43,39,016 6.43 8,37,28,523
Current liabilities 5.77
13,60,76,285 11.77 21,84,94,975 15.07
Total 1,15,63,11,960 100 1,44,98,68,981 100
INTERPRETATION
In the above table 5.18 showed the financial performance of the L&T Ltd the
current assets in 2015 is Rs.53,13,87,860 and in 2016 is Rs.77,56,31,627and current
liabilities in 2015 is Rs.13,60,76,285 and in 2016 is Rs.21,84,94,975.It means the
working capital position and liquidity position are favorable. The fixed assets in L&T
Ltd are in 2015 is Rs.27,85,51,127& in 2016 is Rs.26,62,31,857 and the aggregate of
long-term debt and share holder’s in 2015 is Rs.94,58,96,659 and 2016 is
Rs.1,14,76,45,483. It means of the fixed assets are fully financed out of short-term
funds which is a healthy sign. It means the working capital is financed out of long-
term funds which is a good practice the overall financial position of the L&T Ltd is at
good sign.
COMMON SIZE INCOME STATEMENT (2016– 2017)
(Rs in crores)
Table: 5.19
(-)OPERATING
EXPENSES:
Table: 5.20
2016 Change 2017 Change
Particulars
(Rs.) (%) (Rs.) (%)
FIXED ASSETS:
Net block
Investments 26,62,31,857 18.36 44,76,10,000 24.36
deferred tax asset 39,48,29,790 27.23 45,76,16,000 24.90
1,31,75,707 0.91 0 0
Total
67,42,37,354 46.50 90,52,26,000 49.27
CURRENT ASSETS:
Interest accrued 18,02,086 0.12 0.12
Inventories 22,24,000
3,90,50,092 2.69 42,15,26,000 22.94
Cash & bank balance 4,10,00,686 2.83 11.99
Sundry debtors 22,04,23,000
23,00,77,235 15.87 15,50,51,000 8.44
Loans & advances 11,22,50,699 7.74 7.23
13,27,99,000
Total 77,56,31,627 53.50 50.72
93,20,23,000
Total assets 14,49,86,898 100 100
1,83,72,49,000
SHAREHOLDERS
FUNDS:
Share capital 8,00,00,000 5.52 9,08,30,000 4.95
Reserves & surplus 63,24,84,880 43.62 8,74,941,000 47.62
Secured loans 43,51,60,603 30.01 42,77,16,000 23.28
Unsecured loans 8,37,28,523 5.77 9,82,27,000 5.35
Current liabilities 21,84,94,975 15.07 35,55,41,000 19.35
Table-5.21
Year
Current Assets Current Liabilities Current Ratio
2012-2013 2,76,062 2,08,869 1.32
2013-2014 3,10,002 2,43,220 1.27
2014-2015 4,53,597 3,76,332 1.2
2015-2016 5,80,804 3,97,574 1.46
2016-2017 7,71,519 5,02,024 1.54
GRAPH 5.21
Current Ratio
1.6
1.4
1.2
1
0.8 1.46 1.54
1.32 1.27 1.2
0.6
0.4
0.2
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION
The above table 5.21 showed current ratio during the study period 2012-2013
to 2016-2017. The current ratio showed a fluctuation trend during the study period
from 2012 to2013 to2016-2017.The highest ratio showed during the year 2016-2017
is 1.54 and the lowest ratio showed during the year 2014 to 2015 is 1.2 .The idle
current ratio is 2:1
TABLE-5.22
NET WORKING CAPITAL
Net Working Capital= Net Working Capital / Capital Employed
NET WORKING CAPITALRS in crores
Net Working Capital Capital Employed Ratios(in
Year
(inRS) (in RS) proportion)
2012-2013 67,193 79,459 0.84
2013-2014 96,410 1,07,986 0.89
2014-2015 77,265 96,894 0.797
2015-2016 1,83,230 2,07,051 0.884
2016-2017 2,69,495 3,05,907 0.881
Source: Annual reports of L&T
Graph 5.22
TABLE -5.23
DEBT EQUITY RATIO
Debt Equity Ratio= Total Debt/Equity
Source:Table 5.23
Interpretation
The above table 5.21 showed current ratio during the study period 2012-2013
to 2016-2017. The current ratio showed a fluctuction trendduring the study period
from 2012 to2013 to2016-2017.The highestratioshowed during the year 2016-2017 is
1.54 and the lowest ratio showed during the year 2014 to 2015 is 1.2 .The average
ratio during the study period is ---- .The idle current ratio is 2:1
TABLE -5.24
FIXED ASSETS RATIO
Fixed Assets Ratio= Fixed Assets/Capital Employed
FIXED ASSETS RATIO
Capital
Fixed Assets Ratios(in
year employed (in
(in RS) proportion)
RS)
2012-2013 12,347 79,459 0.15
2013-2014 9,909 1,07,986 0.09
2014-2015 17,699 96,894 0.18
2015-2016 22,595 2,07,051 0.11
2016-2017 31,830 3,05,-907 0.1
Source: Annual Reports of L&T
GRAPH :5.24
Interpretation
The above table 5.21 showed current ratio during the study period 2012-2013 to 2016-
2017. The current ratio showed a fluctuction trendduring the study period from 2012
to2013 to2016-2017.The highestratioshowed during the year 2016-2017 is 1.54 and
the lowest ratio showed during the year 2014 to 2015 is 1.2 .The average ratio during
the study period is ---- .The idle current ratio is 2:1
CHAPTER-6
FINDINGS
1. The current ratio of L AND T was 1.32 in the year 2012 There was decrease
in the ratio up to the year 2016 The ratio is decreasing year by year. But the L
AND T is maintaining current ratio more than the standard norms of 2.
2. The organization is able to maintain both current ratio and quick ratio above
the standard norms. i.e. the ideal current ratio for the concern is 2:1 and the
quick ratio is 1:1 but the cash ratio is fluctuating.
3. The quick ratio of the organization is in decreasing trend year by year.
4. Investment in current assets has been increasing.
5. The inventory turnover ratio of L AND T is fluctuating i.e., showing
decreasing trend during the years 2012 to 2016 But there onwards it has
slowly increased till the financial year.
SUGGESTIONS
The company has to exercise cost of control and cost of reduction techniques
to increase its profitability.
The DEBT EQUITY RATIO in2013 is 0.8. the ratio has decreased than
previous years except for 2012, which had 0.32. the decreasing ratio shows the
inefficient management. They should concentrate more on the collection of the
debts.
The investment in loans and advances should be minimized to possible extent.
Effective internal control system should be established. So that it can have
control over all aspects of the company.
CONCLUSION
The current ratio of L AND T is decreasing year by year . In the year 2011 it
was1.32 and during the year 2013 it has gone down to 1.2 later in the next financial
year 2014 it has gone up to 1.46, so the company should concentrate effectively on
the management of Current Assets and Current Liabilities.
1. The Net Working Capital of L AND T is good for almost in range for each and
every year. It is always in the ideal ratio for every organization.
2. The L AND T is using the moving average method in valuation of stock.
3. The debtors constitute nearly 50% of the Total Current Assets. For the
Company it is difficult to manage the accounts receivables. The company
should collect debts as quickly as possible.
BIBLIOGRAPHY
http://www.asianpaints.com/financial_information/index.php
http://www.studyfinance.com/lessons/workcap
www.bizsearchpapers.com
http://www.antiessays.com/free-essays/9076.html
http://www.L AND Thyderabad.com/L AND
T_hyderabad_unit.htm
http://en.wikipedia.org/wiki/Bharat_Heavy_Electricals_Limited
Financial Management –I M Pandey.
Accounting for Managers-Jelsy Joseph Kuppapally.
Financial statement analysis - GokulSinha.
Programme Educational Objectives (PEOs)
PEO
Programme Educational Objectives
No.
To provide strong foundation in Management Education and impart
I
fundamentals for necessary skills to the students.
To inculcate the habit of sense of ethical and professional attitude with
II
multidisciplinary approach for a strong pedagogical insight.
To provide a strong team spirit, analytical problem – solving approach to
III students through Department, Industry interaction and encourage the
Entrepreneurial, Research and Consultancy skills among the students.
Programme Outcomes
PO.
Programme Outcomes
No.
Apply knowledge of management theories and practices to solve business
I
problems.
Foster Analytical and critical thinking abilities for data-based decision
II
making.
Programme Outcomes
PO. No. Programme Outcomes Relevance
Students had applied their
Apply knowledge of management theories
I knowledge to solve the practical
and practices to solve business problems.
business problems.
Foster Analytical and critical thinking Students augmented with the critical
II
abilities for data-based decision making. thinking abilities
Ability to develop Value based Leadership Imbibed the leadership abilities
III
ability. through the observation.
Ability to understand, analyze and
Understood and analyze the various
IV communicate global, economic, legal, and
aspects of business
ethical aspects of business.
Ability to lead themselves and others in
the achievement of organizational goals,
V No
contributing effectively to a team
environment.
Ability to develop strong foundation in
Students understood how the
functional areas like Finance, Marketing,
VI functional departments are working
HR, Operations, Systems & Quantitative
in organization.
Techniques.
VII An ability to communicate effectively Students augment their presentation
both verbal and non-verbal and writing skills
An ability to keep abreast the latest
developments in the management
VIII education principles and practices for No
sustained vitality of the Industry and
enhance Entrepreneurial spirit skills.
Project helped the students for enhancing Students are enriched with creative
CO3
the students writing and presentation skills presentation.
Programme Outcomes – MBA Programme
No. Programme Outcomes Project
Apply knowledge of management theories and practices to solve business
1
problems
Foster Analytical and critical thinking abilities for data-based decision
2 -
making.
8 education principles and practices for sustained vitality of the Industry and -
enhance Entrepreneurial spirit skills.