Professional Documents
Culture Documents
ON
STUDENT DECLARATION
I do hereby declare that this the project report entitled A DEEP INSIGHT
INTO WORKING CAPITAL MANAGEMENT for partial fulfillment of the
requirements for the award of the degree of MASTER IN BUSINESSS
ADMINISTRATION is a record of original work done by me under the
supervision and guidance of Prof. NEETU CHADHA, Delhi Institute Of
Advanced Studies .This project work is my own and has neither been submitted
nor published elsewhere.
Date:
HIMANSHU SHARMA
Enroll No. 04212303915
ACKNOWLEDGEMENT
A work is never a work without the assistance of NEETU CHADHA. I owe a sense of
gratitude and helpfulness of those of my Teachers, Mentor , company who had been so easy
to let me understand what I needed from time to time for completion of this exclusive
project.I am greatly indebted to my guides Prof. NEETU CHADHA ,faculty guide for
Finance (summer internship), DELHI INSTITUTE OF ADVANCED STUDIES & Mr.
HARSH AZAD , HEAD , Finance Department ,corporate office ,ZILLIOUS , DELHI for
their constant guidance ,advice and help which enabled me to finish this project report
properly in time .
I am also grateful to Prof. N.MALTI, PRINCIPAL and Mr. S N MAHESHWARI,
ACADEMIC ADVISOR, DELHI INSTITUTE OF ADVANCED STUDIES, for permitting
me to undertake this study. Last but not the least, I would like to forward my gratitude to my
friends & other faculty members who always endured me and stood with me and without
whom I could not have completed the project.
HIMANSHU SHARMA
TABLE OF CONTENTS
S. No.
Topic
Page No.
2.
Declaration
4.
Acknowledgement
5.
Abstract
6.
Chapter 1
1.1
1.2
7.
Industry Profile
Company Profile
3
6
Chapter 2. Introduction
2.1 About the topic
13
2.2 Objective
24
24
25
26
8.
27
9.
Chapter 4. Analysis
30
47
10.
49
11.
53
12.
References
55
13.
Annexure
57
EXECUTIVE SUMMERY
To start any corporate house, We with all capability we need finance and the success of that
business entirely depends on the correct management of day-to-day financial instruments and
the management of this short-term capital or finance of the business is called Working
capital Management.
Working Capital is the currency used to pay for the day to day trading activities carried out by
the business - stationery needs, staff salaries and wages, rent, energy bills, payments for
supplies and so on.
The major objective of the study is to proper understanding the working capital of ZILLIOUS
& to suggest measures to overcome the shortfalls if any.
Funds needed for short term needs for the purpose like raw materials, payment of Salary and
other day to day expenses are known as working capital. Decisions relating to working
capital (Current assets-Current liabilities) and short term financing are known as working
capital management. It involves the relationship between a firms short-term assets and its
short term liabilities. By definition, working capital management entails short-term
definitions, generally relating to the next one year period.
The goal of working capital management is to ensure that the firm is able to continue its
operation and that it has sufficient cash flow to satisfy both maturing short term debt and
upcoming operational expenses.
Working capital is primarily concerned with inventories management, Receivable
management, cash management & Payable management.
Chapter 1
COMPANY OVERVIEW
Indian Economy
In the beginning of the year 2008 the economy was on a higher growth path with the macroeconomic fundamentals inspiring confidence and a general optimism about the medium to
long term prospects of the economy. The economy was expected to slow down marginally
from the three years of 9% plus growth in real GDP reflecting a cyclical downturn in the
global economy and expectations were that the growth would be around 8.5%. High oil prices
and domestic inflation and worsening of international financial crisis which had surfaced in
2007 have been definite areas of concern. But the global situation deteriorated massively after
mid-September 2008 following collapse of series of investment banks in the US. This
resulted in choking of credit and global crash in stock markets. Crisis of this magnitude in
industrialized countries has impact around the world especially in the emerging market
countries like India. The Indian economy which started with a strong economic performance
lost the momentum once the ripple effects of the gloom in the global economy set in. Sensex
in January 2008 was all time high at 21206, came down to around 9000 towards the end. The
high cost of crude oil around US$ 150 per barrel in August, 2008 added to the countrys woes
in terms of higher import bill. Rupee weakened against dollar sliding down from Rs.39 in the
beginning of the year to Rs.48 towards the end.
According to the estimates released by Central Statistical Organization (CSO) the real GDP
growth was 7.6% in the second quarter of 2016-17 as compared to 7.9% of the corresponding
quarter of 20016-17, reflecting deceleration in growth of industry and services. The
agricultural production was below the estimate. Indias balance of payments position
witnessed widening of trade deficit. The crisis in global financial markets deepened since mid
September, 2015 exerting pressure on financial markets and crashing of equity markets
leading to wide spread volatility. The global turmoil in the financial markets spilled over the
emerging markets. This has finally affected the manufacturing sector. As a result, authorities
in several countries embarked upon an unprecedented way of policy initiatives to contain
systematic risk, arrest the plunge in asset prices and shore of the confidence in the
international banking system. This has brought about some level of stability. The Indian
Government has not lagged behind. It has been successful in bringing down inflation from
Market Size
The services sector is the key driver of Indias economic growth. The sector contributed
around 66.1 per cent of its Gross Value Added growth in 2015-16, thereby becoming an
important net foreign exchange earner and the most attractive sector for FDI (Foreign Direct
Investment) inflows.
According to a report by leading research firm Market Research Store, the Indian
telecommunication services market is expected to grow by 10.3 per cent year-on-year to
reach US$ 103.9 billion by 2020.
The Indian digital classifieds industry is expected to grow three-fold to reach US$ 1.2 billion
by 2020, driven by growth in horizontal classifieds like online services, real estate and
automobiles.#
Out of overall services sector, the sub-sector comprising financial services, real estate and
professional services contributed US$ 305.8 billion or 20.5 per cent to the GDP. The subsector of community, social and personal services contributed US$ 188.2 billion or 12.6 per
cent to the GDP.
Investments
The Indian services sector has attracted the highest amount of FDI equity inflows in the
period April 2000-March 2016, amounting to about US$ 50.79 billion which is about 17.6 per
cent of the total foreign inflows, according to the Department of Industrial Policy and
Promotion (DIPP).
Some of the developments and major investments by companies in the services sector in the
recent past are as follows:
Gadget wood, an on-demand repair services & refurbishment company, has raised US$ 6
million from private equity fund Carpediem Capital, which will be used for expanding its
presence to other geographies, starting with the metros and moving to set up a presence
across 10 cities by 2017, and broaden the scope of its repairs capabilities to include, laptops,
wearable tech and LEDTVs.
Online food ordering and delivery service firm Swiggy, owned by Bundl Technologies
Private Limited, has raised US$ 15 million in a fresh funding round led by Bessemer Venture
Partners along with existing investors SAIF Partners, Norwest Venture Partners, Accel
Partners, and Apoletto Asia.
Fact set, a US-based financial data and analytics firm, plans set up its largest global office at
Divyasree Orion Special Economic Zone (SEZ) in Gachibowli, Hyderabad.
LogixHealth Private Limited, a wholly-owned subsidiary of LogixHealthInc, USA, plans to
invest around US$ 15 million and hire 1,000 people for its upcoming facility in Coimbatore.
Meru Cab Company Pvt Ltd, the Mumbai-based radio cab service, has raised Rs 150 crore
(US$ 22.37 million) from Brand Capital, the investment arm of Bennett Coleman and Co,
which will be used to fund advertising and provide user incentives including discounts and
loyalty schemes.
SSG Capital Management Group, a Hong Kong based Private Equity (PE) investor, has
acquired a 40 per cent stake in the logistics company Future Supply Chain Solutions (FSC),
for Rs 580 crore (US$ 86.5 million) from existing shareholders including Future Retail (FRL)
and Fung Group, promoted by billionaire Victor Fung.
Vistra Group Ltd, a Hong Kong-based professional services provider, has acquired IL&FS
Trust Company Ltd, Indias largest independent corporate trust services provider, which will
enable Vistra to expand the platform to provide a broader suite of corporate and fiduciary
services and thereby gain a foothold in the Indian corporate services market.
Pink Blue Supply Solutions Pvt. Ltd, a clinical supplies provider, has raised Rs 1.5 crore
(US$ 0.22 million) in a seed round of funding from TermSheet.io, a transaction-focused
service provider for start-ups and investors, which will be used to ramp up technology,
improve customer experience and operational capabilities, put in place smart supply chain
management across hospitals and clinics, and hire larger teams.
IcertisInc, a contract management software maker for enterprises based out of Pune and
Mumbai in India, has raised US$ 15 million in series B round of funding from Ignition
Partners and Eight Roads Ventures, which will be used to invest in marketing and expand its
global operations.
OfBusiness, an online marketplace for business-to-business (B2B) commerce, has raised US$
5 million in series A funding round led by Matrix Partners India, which will be used to
expand the team and build a technology platform for small and medium enterprises (SMEs).
Credit Analysis and Research (CARE Ratings) has signed Memorandum of Understanding
(MoU) with Japan Credit Rating Agency, Ltd (JCR) to collaborate with each other as
strategic business partners.
Shuttle, an Indian bus aggregator platform headquartered in Gurgaon, has raised US$ 20
million in Series a funding from Light speed, Sequoia India and Times Internet Ltd.
Indian logistics platform Rovigo has raised US$ 30 million in debt and equity in Series B
financing round, led by SAIF Partners. The firm aims to use the raised funds to achieve its
target of scaling 10 times in the next 12 months.
Taxi service aggregator Ola plans to double operations to 200 cities in current fiscal year. The
company, which is looking at small towns for growth, also plans to invest in driver ecosystem, such as training centers and technology upgrade, besides adding 1,500 to 2,000
women drivers as part of its pink cab service by women for women.
Zillious is a technology solution provider & business process consulting firm for the travel
industry. We provide innovative technology products and services for travel suppliers, travel
agencies and tour operators.
At Zillious, we are always striving to achieve value for our customers. Our cost efficient
approach coupled with early adoption of leading edge yet effective technologies help us
deliver quick-to-market solutions that drive up the bottom-line of our customers. Our
collaborative style of working encourages active involvement of client at every stage of the
product life cycle through its inception, design and development to implementation.
Specialties
Indias leading Travel Technology solutions provider, Service 6 out of the top 10 Travel
Management Companies in the Country today, Young and energetic team, Direct Client
Interaction, Work on cutting-edge Technologies, Empowerment and Accountability
Zillious is Indias leading Travel Technology solution provider. Our innovative technology
products for Travel Management companies have enabled us to get many satisfied customers.
Our cost efficient approach & adoption of cutting edge technologies help us deliver quick-tomarket solutions that drive up the bottom-line of our customers.
Zillious Solutions Private Limited is a Private incorporated on 11 December 2008. It is
classified as Non-govt Company and is registered at Registrar of Companies, Delhi. Its
authorized share capital is Rs. 100,000 and its paid up capital is Rs. 100,000.It is inolved in
Software publishing, consultancy and supply [Software publishing includes production,
supply and documentation of ready-made (non-customized) software, operating systems
software, business & other applications software, computer games software for all platforms.
Consultancy includes providing the best solution in the form of custom software after
analyzing the users needs and problems. Custom software also includes made-to-order
software based on orders from specific users. Also, included are writing of software of any
kind following directives of the users; software maintenance, web-page design].
Zillious Solutions Private Limited's Annual General Meeting (AGM) was last held on 29
September 2015 and as per records from Ministry of Corporate Affairs (MCA), its balance
sheet was last filed on 31 March 2015.
Directors of Zillious Solutions Private Limited are Rohit Gaddi, Mohan Kumar, Ashok Azad
and Harsh Azad.
Zillious Solutions Private Limited's Corporate Identification Number is (CIN)
U72200DL2008PTC185688 and its registration number is 185688.Its Email address is
vjainca@rediffmail.com and its registered address is 35 Godavari Apartments Alaknanda
Delhi DL 110019 IN , - , .
ZILLIOUS is a small scale service company involved in providing solutions for travel
arrangement... Booking interfaces for Back office Consultants, Implants, and Self Booking
Tool Clients & APIs. All these with unified client-wise policy and compliance configurations.
Powerful Reporting
Captures more than 100 unique & custom reporting parameters per transaction. Custom Dashboard,
Instant download & auto scheduled MIS Reports.
Multi Device
Responsive & modern website with customizable UI. Mobile Website & Mobile Applications
with push alerts, so that the users can transact anytime & anywhere.
Multichannel
Booking interfaces for Back office Consultants, Implants, Self Booking Tool Clients & APIs.
All these with unified client-wise policy and compliance configurations.
Powerful Reporting
Captures more than 100 unique & custom reporting parameters per transaction.
Custom Dashboard, Instant download & auto scheduled MIS Reports.
Multi Device
Responsive & modern website with customizable UI. Mobile Website & Mobile Applications
with push alerts, so that the users can transact anytime & anywhere.
Chapter 2
INTRODUCTION
Working Capital
Every business needs investment to procure fixed assets, which remain in use for a longer
period. Money invested in these assets is called Long term Funds or Fixed Capital.
Business also needs funds for short-term purposes to finance current operations. Investment
in short term assets like cash, inventories, debtors etc., is called Short-term Funds or
Working Capital. The Working Capital can be categorized, as funds needed for carrying
out day-to-day operations of the business smoothly. The management of the working capital
is equally important as the management of long-term financial investment.
PAYMENT
TO
SUPPLIERS
EASY LOAN
FROM
BANKS
SIGNIFICAN
--CE OF
WORKING
CAPITAL
INCREASE
EFFECIENY
INCREASE
IN FIX
ASSETS
DIVIDEND
DISTRIBUTION
INCREASE
DEBT
CAPACITY
But short-term financing is more risky than long-term financing. Following table will
summarize our discussion of short-term versus long-term financing
Maintaining a policy of short term financing for short term or temporary assets needs (Box
1) and long- term financing for long term or permanent assets needs (Box 3) would
comprise a set of moderate risk profitability strategies
The need for current assets tends to shift over time. Some of these changes reflect permanent
changes in the firm as is the case when the inventory and receivables increases as the firm
grows and the sales become higher and higher. Other changes are seasonal, as is the case with
increased inventory required for a particular festival season. Still others are random reflecting
the uncertainty associated with growth in sales due to firm's specific or general economic
factors.
The permanent level is constant while the temporary working capital is fluctuating increasing
and decreasing in accordance with seasonal demands as shown in the figure. In the case of an
expanding firm, the permanent working capital line may not be horizontal. This is because the
demand for permanent current assets might be increasing (or decreasing) to support a rising
level of activity. In that case line would be rising.
There are many factors that determine working capital needs of an enterprise. Some of these factors are
explained below:
Zillious has the following banks available for the fulfillment of its working capital requirements in order
to carry on its operations smoothly:
Banks:
These include the following banks
o Indian Bank
o Syndicate Bank
FUND BASED
NON-FUND BASED
HDFC BANK
300
250
ICICI BANK
200
100
TOTAL
500
350
CASH
DEBTORS &
BILLS
RECEIVABLES
RAW
MATERIAL
OPERATING CYCLE
WORK IN
PROGRESS
SALES
FINISH
GOODS
Each of the areas- Stock (raw materials, WIP, and finished goods), trade debtors, cash (positive
or negative) and trade creditors can be viewed as tanks into and from which funds flow.
Working capital is clearly not the only aspect of a business that affects the amount of cash.
The business will have to make payments to government for taxation.
Fixed assets will be purchased and sold
Lessors of fixed assets will be paid their rent
Shareholders (existing or new) may provide new funds in the form of cash
Some shares may be redeemed for cash
Dividends may be paid
Long-term loan creditors (existing or new) may provide loan finance, loans will need to be
repaid from time-to-time, and
Interest obligations will have to be met by the business
Unlike, movements in the working capital items, most of these non-working capital cash
transactions are not every day events. Some of them are annual events (e.g. tax payments, lease
payments, dividends, interest and, possibly, fixed asset purchases and sales). Others (e.g. new
equity and loan finance and redemption of old equity and loan finance) would typically be rarer
events.
Every running business needs working capital. Even a business which is fully equipped with all
types of fixed assets required is bound to collapse without
o adequate supply of raw materials for processing;
Funds thus invested in current assets keep revolving fast and are being constantly converted in to
cash and this cash flows out again in exchange for other current assets. Thus it is known as
revolving or circulating capital or short term capital.
Gross working capital is the total of all current assets. Net working capital is the difference
between current assets and current liabilities. Though the later concept of working capital is
commonly used it is an accounting concept with little sense to say that a firm manages its net
working capital. What a firm really does is to take decisions with respect to various current assets
and current liabilities. The constituents of current assets and current liabilities are shown in table
A.
Inventories Raw materials and components, Work in progress, Finished goods, other.
Trade Debtors.
Investments.
Current Liabilities
Sundry Creditors.
Trade Advances.
Borrowings.
Provisions.
The working capital needs of a business are influenced by numerous factors. The important ones
are discussed in brief as given below:
Nature of Enterprise
The nature and the working capital requirements of an enterprise are interlinked. While a
manufacturing industry has a long cycle of operation of the working capital, the same would be
short in an enterprise involved in providing services. The amount required also varies as per the
nature; an enterprise involved in production would require more working capital than a service
sector enterprise.
Manufacturing/Production Policy
Each enterprise in the manufacturing sector has its own production policy, some follow the
policy of uniform production even if the demand varies from time to time, and others may follow
the principle of 'demand-based production' in which production is based on the demand during
that particular phase of time. Accordingly, the working capital requirements vary for both of
them.
Operations
The requirement of working capital fluctuates for seasonal business. The working capital needs
of such businesses may increase considerably during the busy season and decrease during the
slack season. Ice creams and cold drinks have a great demand during summers, while in winters
the sales are negligible.
Market Condition
If there is high competition in the chosen product category, then one shall need to offer sops like
credit, immediate delivery of goods etc. for which the working capital requirement will be high.
0Otherwise, if there is no competition or less competition in the market then the working capital
requirements will be low.
Credit Policy
The credit policy is concerned in its dealings with debtors and creditors influence considerably
the requirements of the working capital. A concern that purchases its requirements on credit and
sells its products/services on cash requires lesser amount of working capital. On the other hand a
concern buying its requirements for cash and allowing credit to its customers, shall need larger
amount of funds are bound to be tied up in debtors or bills receivables.
Business Cycle
Business Cycle refers to alternate expansion and contraction in general business activities. In a
period of born i.e. when the business is prosperous there is a need for larger amount of working
capital due to increase in sales, rise in prices, optimistic expansion of business etc. On the
country at he time of depression i.e. when there is a down swing of the cycle, business contracts,
sales decline, difficulties are faced in collections from debtors and firms may have a large
amount of working capital lying ideal
Availability of Raw Material
If raw material is readily available then one need not maintain a large stock of the same, thereby
reducing the working capital investment in raw material stock. On the other hand, if raw material
is not readily available then a large inventory/stock needs to be maintained, thereby calling for
substantial investment in the same.
I. Suppliers Credit
At times, business gets raw material on credit from the suppliers. The cost of raw material is paid
after some time, i.e. upon completion of the credit period. Thus, without having an outflow of
cash the business is in a position to use raw material and continue the activities. The credit given
by the suppliers of raw materials is for a short period and is considered current liabilities. These
funds should be used for creating current assets like stock of raw material, work in process,
finished goods, etc.
Debtors
Banks give -term loans against these assets, keeping some security margin.
The advances given by banks against current assets are short-term in nature and banks have the
right to ask for immediate repayment if they consider doing so. Thus bank loans for creation of
current assets are also current liabilities.
Management of Inventory
Inventories constitute the most significant part of current assets of a large majority of companies
in India. On an average, inventories are approximately 60 % of current assets in public limited
companies in India.
Because of the large size of inventories maintained by firms maintained by firms, a considerable
amount of funds is required to be committed to them. It is, therefore very necessary to manage
inventories efficiently and effectively in order to avoid unnecessary investments. A firm
neglecting a firm the management of inventories will be jeopardizing its long run profitability
and may fail ultimately.
The purpose of inventory management is to ensure availability of materials in sufficient quantity
as and when required and also to minimize investment in inventories at considerable degrees,
without any adverse effect on production and sales, by using simple inventory planning and
control techniques.
Needs to hold inventories:There are three general motives for holding inventories:
Speculative motive influences the decision to increases or reduce inventory levels to take
advantage of price fluctuations and also for saving in re-ordering costs and quantity
discounts etc.
Objective of Inventory Management:The main objectives of inventory management are operational and financial. The operational
mean that means that the materials and spares should be available in sufficient quantity so that
work is not disrupted for want of inventory. The financial objective means that investments in
inventories should not remain ideal and minimum working capital should be locked in it.
The following are the objectives of inventory management:o To ensure continuous supply of materials, spares and finished goods.
o To avoid both over-stocking of inventory.
o To maintain investments in inventories at the optimum level as required by the
operational and sale activities.
o To keep material cost under control so that they contribute in reducing cost of production
and overall purchases.
o -To eliminate duplication in ordering or replenishing stocks. This is possible with the help
of centralizing purchases.
o To minimize losses through deterioration, pilferage, wastages and damages.
o To design proper organization for inventory control so that management. Clear cut
account ability should be fixed at various levels of the organization.
o To ensure perpetual inventory control so that materials shown in stock ledgers should be
actually lying in the stores.
o To ensure right quality of goods at reasonable prices.
o To facilitate furnishing of data for short-term and long term planning and control of
inventory
Management of cash
Cash is the important current asset for the operation of the business. Cash is the basic input
needed to keep the business running in the continuous basis, it is also the ultimate output
expected to be realized by selling or product manufactured by the firm.
The firm should keep sufficient cash neither more nor less. Cash shortage will disrupt the firms
manufacturing operations while excessive cash will simply remain ideal without contributing
anything towards the firms profitability. Thus a major function of the financial manager is to
maintain a sound cash position.
Cash is the money, which a firm can disburse immediately without any restriction. The term cash
includes coins, currency and cheques held by the firm and balances in its bank account.
Sometimes near cash items such as marketing securities or bank term deposits are also included
in cash. Generally when a firm has excess cash, it invests it is marketable securities. This kind of
investment contributes some profit to the firm.
3.) Stores and spares conversion period= Average stock of Stores and spares/ Average
consumption per day.
4.) Finished goods conversion period= Average stock of finished goods/Average cost of goods
sold per day.
5.) Debtors collection period=Average book debts/Average credit sales per day.
6.) Credit period availed=Average trade creditors/Average credit purchase per
day.
Management of Receivables
A sound managerial control requires proper management of liquid assets and inventory. These
assets are a part of working capital of the business. An efficient use of financial resources is
necessary to avoid financial distress. Receivables result from credit sales.
A concern is required to allow credit sales in order to expand its sales volume. It is not always
possible to sell goods on cash basis only. Sometimes other concern in that line might have
established a practice of selling goods on credit basis. Under these circumstances, it is not
possible to avoid credit sales without adversely affecting sales.
The increase in sales is also essential to increases profitability. After a certain level of sales the
increase in sales will not proportionately increase production costs. The increase in sales will
bring in more profits. Thus, receivables constitute a significant portion of current assets of a firm.
But for investment in receivables, a firm has to insure certain costs. Further, there is a risk of bad
debts also. It is therefore, very necessary to have a proper control and management of
receivables.
The following, easily calculated, ratios are important measures of working capital utilization.
Ratio
Formulae
Result
Interpretation
On average, you turn over the value of your entire
stock every x days. You may need to break this
Stock
Turnover
(in days)
Average Stock *
365/
Cost of Goods
Sold
management.
Obsolete stock, slow moving lines will extend
overall stock turnover days. Faster production,
fewer product lines, just in time ordering will
reduce average days.
It takes you on average x days to collect monies
Receivables
Ratio
(in days)
= x days
Payables
Creditors * 365/
Ratio
(in days)
Purchases)
Current Ratio
Total Current
=x
Assets/
times
Total Current
Liabilities
oncoming demands.
(Total Current
Assets Quick Ratio
Inventory)/
Total Current
=x
times
Liabilities
(Inventory +
Working
Receivables -
Capital Ratio
Payables)/
Sales
Once ratios have been established for your business, it is important to track them over time and
to compare them with ratios for other comparable businesses or industry sectors.
When planning the development of a business, it is critical that the impact of working capital be
fully assessed when making cash flow forecasts.
RESEARCH METHODLOGY
RESEARCH METHODLOGY
RESEARCH PROCEDURE:
DATA COLLECTION:
Primary and Secondary data- Primary data is that which is collected by the researcher for the
first time solely for the purpose of research problem in hand whereas secondary data is one
which is collected by somebody else and which has to be modified according to the problem
before using it.
The type of primary data used was questionnaires. This phase involved the design of the
questionnaire on the basis of the potential factors identified as influencing the best practices.
Research problems were listed and then the information needed was identified. The questions
were then prepared in order to fulfill the information requirements as identified earlier.
There were many approach was used for developing the questionnaire, which implies that in
initial stage of questionnaire there is very general question has been asked to the respondent and
then the specific questions had been asked by the respondent. In order to accomplish accuracy,
attention was paid on framing the questions right and placing the questions correctly in order to
form a logical and presentable questionnaire. Closed ended questions were framed. Close ended
questions limit respondents answers to the survey. The participants bare allowed to choose from
answer such as yes/no, true /false or ranking scale response options. The most common of the
ranking scale questions is called the likert scale question. This kind of question asks the
respondents to look at a statement and then rank this statement according to the statement to
which they strongly agree, agree, neither agree nor disagree, disagree and strongly disagree. The
type of secondary data used was mainly from encyclopedia, books journals and internet.
STATISTICAL TECHNIQUES:
SAMPLE SIZE: The sample size was 30.
RESEARCH METHOD: The method of research was Descriptive, i.e. through
questionnaire filled up by sales manager of the company.
ANALYSIS METHOD The analysis is done by using SPSS software and EXCEL. The data
collected by the questionnaire were feed in the SPSS software and analyzed using descriptive
statistics (pie charts). Some of the questions which have multiple answers were analyzed in
EXCEL.
REVIEW OF
LITERATURE
CHAPTER 4
DATA ANALYSIS
2015
2014
Current investments
50,113,253
28,000,200
Inventories
Trade receivables
23,175,613
9,264,633
term
loans
15,030,076
17,458,671
and 23,451,934
4,747,721
10,819,818
9,416,372
Total
122,590,694
68,887,597
2015
2014
Trade Payables
605,012
102,352
5,174,470
1,426,926
20,700,000
11,690,654
Total
7,849,482
13,219,932
advances
Current Liabilities
Liabilities
Short term borrowings
current liabilities
2015
125,90,694
78,49,482
2014
688,87,597
132,19,932
working capital
47,41,212
556,67,665
PBIT /
Capital
Return on Working
Capital:
Working
* 100
113.60%
2015 35132556/55667665*100
63.11%
Analysis:
There has been a decline in ROWC between the two years it declines up to 63.11% during
2015-16. This situation arises because of increase in current liabilities in past years as company
is having proposal of lots of investment due to which company is financing its project and there
is less tendency of free cash flow.
LIQUIDITY RATIOS:
Snapshot of Liquidity Ratios:
Table 3: Liquidity ratios
Basic Ratios
2014
2015
Current ratio
2.17
2.43
1.28
1.57
Cash ratio
0.01
0.30
Current Ratio:
The current ratio is also known as the working capital ratio and is normally presented as a real
ratio.
Table4: Current Ratio
2014 Current Asset: Current Liability 2.60:1
Cash Ratio:
Cash: Current
46.32/867.00
0.05:1
17.59/965.73
0.01:1
Liabilities
2015
Cash: Current
Liabilities
As cash is being the most liquid asset, quoted investment has been taken as marketable
securities. In our case the company is showing an increasing trend but still it is not a favorable
cash ratio. From the above calculation, companys cash ratio had remained very low. It is the
notable point for the company as its current liabilities are much higher than the cash in hand. It
can create problems in the future payments of current liabilities. Major portion of companys
current assets goes to inventory and debtors, which only increase the carrying cost. Company
need to reduce these assets to their optimum level.
Debtors Turnover:
Sales
Debtors Turnover =
Debtors
2014 6038/1167.56
5.17 times
2015 6400/1007.38
6.35 times
Analysis:
Firstly, the ratio seems to have change by going from 5.17 to 6.35 times in the two years; and it
means that, on average, the companys debtors are taking fewer days to pay their accounts.
Soundness of this ratio is more dependent on the business policy and the terms with the clients.
On the other side turnover is increasing over the years, which implies higher the turnover, shorter
the time between sales and collecting cash. It shows the companys debt-collecting machinery
has improved through years.
360
Debtor Turnover
360 / 5.17
69.61days
2010-11
360 / 6.35
56.69 days
Analysis:
The average collection period measures the quality of debtors since it indicates the speed of their
collection. The shorter the average collection period, the better the quality of debtors, as a short
collection period implies the prompt payment by debtors.
Creditors Turnover:
Creditors Turnover
Purchases
Creditors
1378/413.69
2.65
2015
1390.10/523.95
3.36
Analysis:
creditors turnover ratio increased from 2.65 to 3.36 times that shows company was having
improved credit paying ability through proper working capital management.
Chapter 5
LIMITATIONS
LIMITATIONS
Some of the limitations of the project are listed below:
The time period of just two months was the major limitation.
The sample size was too small; hence proper analysis was not done.
Due to time constraint other branches of company were not surveyed.
To convince the people for filling up the questionnaire was also a big daunting task.
REFERENCES
WEBSITES:
www.futuregenerali.in
http://en.wikipedia.org/wiki/motivation
http://en.wikipedia.org/wiki/insurance
www.irdaindia.org
BOOKS:
Approaches to Training and Development by D. Laird (2001), Indian
House of Publications, New Delhi, 5th Edition.
Human
Resource
Management
by
Ghanekar
A.(2007),Rajesh
ANNEXURE