LG Balakrishnan&Bros Key Ratios

The declining ROE from 24.43% in 2022 to 17.12% in 2025 highlights that profitability has seen some strain, despite improvements in PAT margin, particularly at the end of the period, suggesting a focus on stabilizing net profit rates.Asset turnover decreased consistently, indicating a potential issue in effectively utilizing assets to generate sales, which could signal inefficiencies in production or inventory management.Leverage has also reduced slightly, meaning the company is using less debt relative to equity over the years, which might enhance financial stability but also contributes to a lower ROE. This suggests that while the company’s risk profile improves, the return on equity diminishes.

Inventory days peaked in 2023 and have since shown improvement, indicating more efficient inventory management in recent years despite a temporary increase, which bodes well for reducing carrying costs.Receivable days have remained relatively stable, but a gradual decline signifies improved collection practices, enhancing cash flow.However, payable days initially decreased but later spiked in 2025, possibly reflecting cash flow management challenges; collectively, this results in a deteriorating cash conversion cycle overall, especially highlighted by a significant rise in 2023.

Both ROE and ROCE have decreased over the observed period, indicating that both equity and capital efficiency are under pressure, reflecting a broader issue with profitability.ROA also shows a declining trend, emphasizing that the company is not generating sufficient returns on its total assets, which could indicate poor asset utilization or declining margins.Overall, the metrics suggest that while the level of equity and debt used has moderated, the returns generated from both sides are weakening, necessitating a review of operational efficiencies and profitability strategies.