LARSEN & TOUBRO

Financial Ratios
 LARSEN & TOUBRO

Larsen & Toubro Limited, commonly known as L & T, is an Indian

multinational technology, engineering, construction, manufacturing and
financial services conglomerate headquartered in Mumbai, Maharashtra,
India

L & t become a private limited company in 1946.it then become

a public limited company in 1950.

As at 31 March 2019, L & T Group comprises 110 subsidiaries, 8

associates, 27 joint venture companies and 31 joint
operations.

For the quarter ended 31 March 2020, the impact due to COVID 19
LARSEN & TOUBRO
Financial
Ratios
 CURRENT
RATIO 1.5

2019-20 2017-18 2018-2019

1

0.5
Current ratio becomes lower in 2020 which signifies ability to
paying debt is not in a good position and facing difficulty for
getting loan from bank.
0
2019-20 2017-18 2018-19
 QUICK RATIO
1.5

2019-20 2017-18 2018-2019 1

0.5
When a company has a quick ratio of 1, its quick
assets are equal to its current assets. This also
indicates that the company can pay off its current
debts without selling its long-term assets. If a company 0
has a quick ratio higher than 1, this means that it 2019-20 2017-18 2018-19
owns more quick assets than current liabilities
 DEBT-EQUITY RATIO
3

2
2019-20 2017-18 2018-2019

In 2020 company enters into debt so the

debt equity ratio increses then the profit also
decreases

0 2019-20 2017-18 2018-19

 RECEIVABLES
TURNOVER RATIO
2019-20 2018-19 2017-2018 10

A high receivables turnover ratio can indicate that a

company's collection of accounts receivable is efficient and
the company has a high proportion of quality customers that
pay their debts quickly. A high receivables turnover 0
ratio might also indicate that a company operates on a cash 2019-20 2018-19 2017-18
basis
 NET PROFIT RATIO 15%

2019-20 2017-18 2018-2019

10%

5%
Though the sales increases in 2020 but the
net profit ratio decreases due to high amount
of debt.
0%
2019-20 2017-18 2018-19
 EPS
60

53.4

50 47.58

40 38.44

30

20
EPS = PAT / No. of shareholders
10
Year PAT No. of shareholders
0
17-18 18-19 19-20

17-18 53,87,00,00,000 1,40,13,69,456

 The EPS ratio uses net profits for calculations and it tells investors at a
18-19 74,91,00,00,000 1,40,27,29,385 glance how much money a company makes per share of stock issued. In
theory, a higher EPS would suggest that a company is more valuable. In
19-20 66,79,00,00,000 1,40,38,92,022
FY-18, the EPS was 38.441 this shows L&T shareholder is making much
money on per share of stock issued. In FY-19, the EPS was 53.403 in
Year EPS comparison to FY-18 this shows that that company’s earnings have
increased with strong financial position and investors will find it reliable
17-18 38.441 to invest their money more. In FY-20, the EPS was 47.57 in comparison
18-19 53.403 to FY-19 this shows that that company’s earnings have decreased with
19-20 47.575 this financial position and investors will find it difficult to invest their
money more.
 35

P/E Ratio
30 28.79

25 23.83
22.39

20

15

10

Weighted Average 5

Year EPS
Share Price
0
17-18 18-19 19-20

17-18 38.441 1106.67  It shows the relationship between MP and EPS. Ratio shall be
compared with industry standard for better for better analysis.
18-19 53.403 1272.8
A high P/E ratio could mean that a company's stock is over-
19-20 47.575 1065.3 valued, or else that investors are expecting high growth rates
P/E Ratio = Weighted Average Share Price / EPS in the future.
 In FY-18, PE ratio is 28.7 this is a high ratio it indicates that
investors are expecting high growth rates in the future. In FY-
Year P/E Ratio 19, PE ratio is 23.8 this is also a high ratio that investors are
expecting high growth rates in the future. In FY-20, PE ratio is
17-18 28.789
22.3 this is also a high ratio that investors are expecting high
18-19 23.834
growth rates in the future.
19-20 22.392
 Dividend Payout Ratio 0.45
0.42
0.4
0.38

0.35 0.34

0.3

0.25

0.2

Year EPS DPS 0.15

0.1

17-18 38.441 16 0.05

18-19 53.403 18 0
17-18 18-19 19-20

19-20 47.575 18  It shows the ratio of dividend paid as compared to profits earned. Higher
Dividend Pay-out Ratio = Dividend per share / EPS the ratio better for investors. In FY-18 dividend pay-out ratio is 41% this
indicates that the company is reinvesting less money back into its business
while paying out relatively more of its earnings in the form of dividends. In
Year Dividend Pay-out FY-19 dividend pay-out ratio is 33% is relatively low in compare to FY-18 . It
Ratio
indicates that the company is reinvesting less money back into its business
while paying out relatively more of its earnings in the form of dividends.
17-18 0.416222597  In FY-20 dividend pay-out ratio is 37% is relatively high in compare to FY-
18-19 0.337059524 19. It indicates that the company is reinvesting more money back into its
19-20 0.378350897 business while paying out relatively less of its earnings in the form of
dividends.
Thank you