A Study On Working Capital Management in Strides Shasun Limited at Cuddalore

A STUDY ON WORKING CAPITAL MANAGEMENT IN STRIDES
SHASUN LIMITED AT CUDDALORE
PROJECT REPORT
Submitted by
S.VINOTH KUMAR
REGISTER NO : 16MBA108
UNDER THE GUIDANCE OF

Mrs. M. JANAKIRAMA M.B.A., M.Phil.,
Assistant professor, Department of Management Studies
In partial fulfillment for the award of the degree

of
MASTER OF BUSINESS ADMINISTRATION
DEPARTMENT OF MANAGEMENT STUDIES

SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE
PONDICHERRY UNIVERSITY
PUDUCHERRY
JULY-2017
SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE
MADAGADIPET PUDUCHERRY
DEPARTMENT OF MANAGEMENT STUDIES
BONAFIDE CERTIFICATE
This is to certify that the project work entitled “A STUDY ON WORKING CAPITAL
MANAGEMENT IN STRIDES SHASUN LIMITED” is a bonafide work done by
S.VINOTH KUMAR [REGISTER NO:16MBA108] in partial fulfillment of the requirement
for the award of Master of Business Administration by Pondicherry University during the
academic year 2017– 2018.
INTERNAL GUIDE HEAD OF THE DEPARTMENT
Submitted for Viva-Voice Examination held on ___________
EXTERNAL EXAMINER
1.
2.
ACKNOWLEGEMENT
First and foremost, I would like to acknowledge my sincere thanks to

Shri.M.DHANASEKARAN, Chairman & Managing Director and Shri.S.V.SUGUMARAN,
Vice Chairman, Dr. K. NARAYANASWAMY, Secretary, Sri Manakula Vinayagar
Engineering College, Puducherry.
I take immense pleasure in conveying my sincere thanks to my beloved Director cum Principal
Dr. V.S.K VENKATACHALAPATHY, Sri Manakula Vinayagar Engineering College for
having permitted me to undertake this project.
I convey my heartiest thanks to Dr. N.S.N. CAILASSAME, Associate professor,

Department of Management Studies, for his encouragement, support and guidance to complete
this project work successfully.
I would like to convey my great thanks to my internal guide Mrs.

M. JANAKIRAMA, Assistant Professor, Department of Management Studies, Sri Manakula
Vinayagar Engineering College, for her dedicated support and encouragement to complete this
project.
I express my sincere thanks to Mr. S. BALAJI, Finance and Accounts Manager,

Strides Shasun Limited Cuddalore, for guiding me in all the ways to do the project.
Finally, I express my sincere thanks and deep sense of gratitude to my parents and
friends for giving timely advice in all the ways and in all aspects for doing the project.
LIST OF CONTENT
CHAPTERS TITLE PAGE
NO.
INTRODUCTION & RESEARCH DESIGN 1-20
1.1 WORKING CAPITAL 1
1.2 OBJECTIVES OF THE STUDY 11
1.3 SCOPE OF THE STUDY 12
1.4 LIMITATION OF THE STUDY 13
1.5RESEARCH METHODOLOGY 14
1.5.1 RESEARCH DESIGN 14

I
1.5.2 SOURCES OF DATA SOURCES 14
1.6 TOOLS USED 15
1.6.1 RATIO ANALYSIS 15
1.6.2.SCHEDULE OF CHANGES IN WORKING

19
CAPITAL
1.6.3.GROSS WORKING CAPIAL 20
II REVIEW OF LITERATURE 21-25
CONCEPTUAL FRAMEWORK OF THE INDUSTRY 26-42
III 3.1 INDUSTRIAL PROFILE 26
3.2. COMPANY PROFILE 33
IV DATA ANALYSIS AND INTERPRETATION 43-58
V FINDINGS, SUGGESTIONS AND CONCLUSIONS 59-62
VI BIBLIOGRAPHY 63
LIST OF TABLES
TABLE PAGE
NAME OF THE TABLE
NO. NO.
4.1 Schedule of changes in working capital of the year 2012-2013 44
4.5 Current ratio 48
4.6 Liquidity ratio 49
4.7 Cash position ratio 50
4.8 Stock turnover ratio 51
4.9 Creditor turnover ratio 52
4.10 Debtors turnover ratio 53
4.11 Working capital turnover ratio 54
4.12 Gross profit ratio 55
4.13 Net profit ratio 56
4.14 Return on Investment 57
4.15 Composition of Gross Working Capital 58

LIST OF CHARTS
CHART PAGE
NAME OF THE CHARTS
NO. NO.
4.5 Current ratio 48
4.6 Liquidity ratio 49
4.7 Cash position ratio 50
4.8 Stock turnover ratio 51
4.9 Creditors turnover ratio 52
4.10 Debtors turnover ratio 53
4.11 Working capital turnover ratio 54
4.12 Gross profit ratio 55
4.13 Net profit ratio 56
4.15 Return on Investment 57

ABSTRACT
This study focuses on the working capital management at Strides Shasun Limited in
Cuddalore. Working capital management means working capital is the amount of capital that
a business has available to meet the day-to-day cash requirement of its operations.
For a success of working of a business organization management of working capital is

essential. To analyze schedule of changes in working capital of the Strides Shasun Limited. So
tools such as Components of Gross Working Capital, Schedule of Changes in working Capital,
Ratio Analysis, for analyzing of working capital management in Strides Shasun Limited
Cuddalore. The inventory is increasing trend from 2013-2014 to 2015-2016, debtors has up
and down in the company, cash is increasing trend in the year 2013-2014. The company should
take necessary measure to maintain its working capital at the desired level so as to finance it
operating activities. The current ratio of the firm as almost reached the standard norm (2:1).
The company shall try to maintain the level. The working capital last 5 years of this study of
working capital is optimistic level. Net profit of the company is gradually increasing and gross
profit of the last 3 years is also decreasing trend. So the company should work out to reach the
optimum level of working capital, which gives a balance between the risk, return and
profitability.
CHAPTER - I
INTRODUCTION
&
RESEARCH DESIGN
CHAPTER - II
REVIEW OF LITERATURE
CHAPTER - III
CONCEPTUAL FRAMEWORK
OF THE
INDUSTRY
CHAPTER - IV
DATA ANALYSIS
AND
INTERPRETATION
CHAPTER - V
FINDINGS, SUGGESTIONS
AND
CONCLUSION
BIBLIOGRAPHY
CHAPTER I
INTRODUCTION AND RESEACH DESIGN
1.1 WORKING CAPITAL:

Capital required for a business can be divided into two categories i.e. Fixed capital
and working capital. Fixed capital is the part of total capital which is used for purchasing
permanent a fixed asset like land, Buildings, Plant and machinery, furniture and fixtures,
vehicles, etc. This capital is invested by organization in the beginning of running the business.
In addition to fixed capital an organization requires additional capital for financing day to
day activities like purchase of Raw materials, payment of direct and indirect expenses,
carrying out production, investment in stocks and stores, receivables and assets to be
maintained in the form of cash is generally known as working capital (fluctuating capital). In
other words, this capital refers to the investment in current assets such as cash inventory,
receivables, etc. All such assets are likely to be convertible into cash within one a year.
MEANING OF WORKING CAPITAL:
The capital used for performing day to day activities i.e. purchases of Raw material,
making payment of direct and indirect expenses, carrying out of production of goods and
services, investment in stocks, stores, etc is called as working capital. All assets consisting
of working capital revolve around cash. Firstly, cash is used to purchase of raw materials,
which when certain expenses are in carried on it gets itself converted into semi finished goods
and finally into inventory of finished products. Inventory (finished goods), after adding
certain profit margin to it, is sold to the customers, which may take the form of cash or
receivables or debtors. Receivables or debtors when realized again take the form of cash and
the cycle goes on. The revolving nature of current assets consisting of working capital has
been cleared with the help of following chart:
Receivables Sales
Cash
Finished goods
Raw materials Work in progress

iniipppppprogress
pro proprogress
Because of this revolving nature of the assets consisting working capital, later is also
known as 'fluctuating' or 'floating' or ' circulating' capital.
DEFINITIONS OF WORKING CAPITAL:
J.M. Mill: - "The sum of the current assets is the working capital of the business"
Shubin: - "Working capital is the amount of funds necessary to cover cost of operating the
enterprise."
Hoaglandi: - "Working capital is descriptive of that capital which is not fixed. But the more
common use of the working capital is to consider it as the difference between the block value
of the current assets and current liabilities."
Gerestenberg: - "Circulating capital wears current assets of a company that are changed in
the ordinary course of business from one to another, as for example, from cash to inventories,
inventories to receivables, and receivables to cash."
The accounting principles of board of American institute of Certified Public

Accountants has defined the working capital as under: "Working capital is represented by the
excess of current assets or current liabilities and identifies the relatively liquid portion of the
total enterprise capital which constitutes a margin or buffer for maturing obligations within the
ordinary operating cycle of the business."
Backer and Malett-

“Working capital means sum of current assets only”
Thus working capital means investment made by a business organization in short-term

current assets like cash, debtors, etc. one also conclude that working capital is that part of
capital which need for financing the current need of the business.
TYPES OF WORKING CAPITAL:
Gross working capital: Gross working capital means the total current assets without deducting
current liabilities. This equal to the cash balance and the amount blocked in debtors stocks, etc.
Net working capital: Net working capital means total current assets minus total current
liabilities. It means net current assets. This capital indicates the amount available to meet short
term liabilities or debt of the business organizations.
Permanent of fixed working capital: This capital represents the value of the current assets
required on continuing basis over the entire year and for several years. Permanent working
capital is the minimum amount of current assets which is needed to conduct business even
during the dullest season of the year. Thus, the minimum level of current assets is called
permanent or fixed working capital is the part of capital permanently blocked in current assets.
This amount changes from year to year depending on growth of the company and the stage of
the business cycle in which it operates. It is used to produce goods necessary to satisfy the
customer's demand.
It has the following characteristics

a) It is classified on the basis of time.
b) It constantly changes from one asset to another and continuously remains in the
business.
c) Size of this capital increases with the growth of business operations.
Temporary or variable working capital This component represents a certain amount of

fluctuations in current assets during a short period. These fluctuations are increases or
decreases in current assets. Generally these are in cyclical nature. This is called as additional
capital required at different times during the operating year. This capital is used to meet
seasonal needs of a firm or organization is called seasonal or variable working capital.
Additional funds or capital specifically used to meet extraordinary needs or contingencies
arising due to strikes, fire, unexpected competition, rising price tendencies launching of
advertisement campaigns.
Features:
a) It is not always gainfully employed, though it may change from one asset to another, as
permanent working capital does.
b) It is particularly suited to business of a seasonal or cyclical nature.
c) It is arranged from temporary source i.e. short term loan, deposits, bank over drafts etc.
Balance sheet working capital: Usually this capital is determined on the basis of current assets
and current liabilities shown in closing balance sheet of the concern. It means the net current
assets as on last date of the balance sheet.
Cash working capital: This capital is the net current assets if realized at its book value. The
cash realized from current appearing is really less than the book value because i) Debtors
includes profit margin ii) Depreciation included in over valuation of stock of finished goods.
The concept of this capital makes proper adjustment in balance sheet working capital for the
items to arrival at cash working capital. The cash working capital indicated the working capital
at cost because stocks and debtors are at cost.
Positive working capital: When a net current asset is in positive figure. Therefore it is called
positive working capital. This working capital shows favorable liquidity solvency position of
the company.
Negative working capital: In this case, difference between current assets and current liabilities
is negative figure. Therefore, it is called are negative working capital. It means current
liabilities are more than the current assets. This capital indicates lack of liquidity and adverse
solvency position of the company.
IMPORTANCE OR ADVANTAGES OF ADEQUATE WORKING CAPITAL:
Working capital is like the heart of business. If it becomes weak, the business hardly
can proper or survive. But no business can run successfully without an adequate amount of
working capital. Following are the few advantages give importance of adequate working capital
in the business.
1. Cash discount: Adequate amount of working capital enables the firm to avail cash discount
facilities offered by suppliers. The amount of cash discount reduces cost of purchases.
2. Creation of goodwill: Adequate amount of working capital enables the firm to make
prompt payment of short-term liabilities is the base to create and maintain goodwill.
3. Ability to face crisis: Amount of adequate working capital facilitates to meet situations of
crisis and emergencies. It makes able to withstand periods of depression smoothly.
4. Credit-worthiness: It enables the firm to run its business more efficiently because there is
no delay in getting loan from bank and other financial institutions on easy and favorable terms
and conditions.
5. Regular supply of Raw materials: Adequate amount of working capital permits the
carrying of inventories of a level that would enable a business to serve satisfactorily the need
of its customers. Thus it ensures regular supply of raw materials for continuing productions in
future.
6. Expansion of market: A firm having adequate working capital can create favorable market
condition. It is possible to purchases required material at lower rate and holds its inventories
for higher rate. Thus it helps to maximize profits.
7. Increase in productivity: Fixed assets of the firm cannot work without sufficient amount
of working capital. Because large scale investment in various fixed assets is largely depending
on the manner in which its current assets are managed.
8. Research programme: It is not possible to undertake research programme, innovations and

technical developments without having sufficient amount of working capital in the
organizations.
9. High morale: Maintaining of sufficient amount of working capital makes us possible to

create environment of security, confidence, high morale among the staff and it helps in creating
overall efficiency of the business.
10. Liquidity and solvency: A sound position of working capital enables a firm to make
payment of dividends to its investors regularly. This helps in gaining confidence in the mind
of investors and also helps in creating favorable market environment to raise additional funds
in the near future.
11. Contented labour force: A firm having enough amount of working capital will be in a
position to pay its workers well and in advance. This way contented labour force contributes
to increased production of quality goods.
DANGER OF INADEQUATE WORKING CAPITAL:
When a firm had inadequate amount of working capital, it faces the following problems.
a) It may not be able to take advantages of cash discount.
b) It cannot buy its requirements in bulk and unable to utilize production facilities fully.
c) It may not be able to take advantages of profitable business opportunities.
d) It may not be able to pay its dividends because of non- availability of funds.
e) It shows low liquidity leads low profitability. Low profitability results in low liquidity.
f) It is not possible to pay short terms liabilities due to inadequate working capital. This leads
to borrow loan or funds at high rate of interest.
g) Credit worthiness of a firm may be damaged due to lack of liquidity. It will lose its
reputation. Thus firm may not be able to get credit liabilities.
h) Low liquidity position may lead to liquidate the firm because it cannot be able to meet its
debts at the date of maturity.
DANGER OF EXCESS WORKING CAPITAL:
When a firm has excess working capital arise the following problems.
a) A firm may be tempted to over trade and lose heavily.
b) A firm may purchase more inventories unnecessarily which leads the problem of theft,
waste, losses, etc.
c) It created imbalance between liquidity and profitability.
d) Excess working capital means idle funds means not earning of profits. In this case rate of
return on investments falls.
E) It may make greater production which may not have matching demand. Fund will be blocked
only. No possibility of profits.
F) It may lead carelessness about cost of production. It means there will be high cost of
production and it leads to less profit.
FACTORS DETERMINING WORKING CAPITAL REQUIREMENT:
a) Nature of business: - Working capital requirements of an enterprise are basically related to

conduct of the business. Public utility undertakings like electricity, water supply, Railways, etc
need very limited working capital because they offer cash sales only and supply services, not
products, and as such no funds are tied up in inventories and receivables. But at the same time,
trading firm need large amount of working capital in current assets like inventories, cash,
receivables etc but they have less investment in fixed assets.
b) Terms of purchases and sales: - Credit terms granted by the concerns to its customers as
well as credit terms granted by its supplier also affect the working capital. It credit terms of
purchases are more favorable and those sales less liberal, less cash will be invested in the
inventory. Working capital requirement can be reduced it terms of credit are more. The ratio
of credit and cost purchases or sales affect the level of working capital. If firms purchases on
credit and sales cash then requires less working capital and if firm purchases on cash and sales
on credit, then it requires large working capital. This means funds are tied up in debtors and
bills receivables.
c) Manufacturing cycle: - The quantum of work capital needed is influenced by the length of
manufacturing cycle. The manufacturing process always involves time lag between the time
when raw materials are fed into the production line and finished products are finally turned out
by it. The length of period of manufacture in turn needs on the nature of product as well as
production technology used by a concern.
d) Size of business unit: - Amount of working capital requirement is depending on the scale
of operation of the business organization. Large business organization performs large business
activities which require huge working capital than small scale organization.
e) Turnover of inventories: - A business organization having low turnover of inventory

would need more working capital where as high turnover of inventory need small or limited
working capital.
f) Turnover of circulating capital: - The speed with which circulating capital completes its
cycle if conversion of cash into inventory of raw material, raw material into finished goods,
finished goods into debts and debts into cash, which decides need of working capital in the
organization. Slow movement of working capital cycle necessitates large provision of working
capital.
g) Seasonal variations production: - In case of seasonal production in the industries like

sugar, oil, mills, etc need more working capital during peak seasons as well as slack seasons.
h) Degree of mechanization: - In highly mechanized concerns having low degree of

independence, on labour, requirement of working capital reduced. Conversely, in labour
intensive industries greater sum of working shall be required to pay wages and related facilities.
i) Growth and expansion: - Every firm wants to grow over a period of time and with the
increase in its size, the working capital requirements are bound to increase. The growing
company would need, therefore, larger amount of working capital.
j) Policy regarding dividend: - Dividend policy of a firm will also influence the working
capital position. The company which declares large amount of dividends in the form of cash
requires large working capital to pay off such dividends. But sometimes, companies issues
bonus shares by way of dividend in such cases working capital requirements will be
comparatively less. This is depending on Psychology of shareholders i.e. whether they prefer
cash income or capital appreciation.
k) Inflation: - A business concern requires more working capital during the inflation period.
This factor may be compensated to some extent by rise in selling price of inventory.
l) Changes in technology: - Changes in production technology have an impact on the need

of more working capital.
m) Depreciation policy: - Charges of depreciation on assets do not involve any cash outflows.
Depreciation affects tax liability and retention profits. It is allowable expenditure while
calculating net profits. Higher depreciation will mean lower disposal of profit and therefore
dividend will be paid in smaller amount. Thus cash will be preserved.
PROJECTION OF WORKING CAPITAL REQUIREMENTS:
The businessman mainly faces the problem of determination of working capital

requirements for financing particular level of activity. The finance manager has to perform the
activities of forecasting working capital requirements. This process involves the following
aspects.
1) Level of activity: - Estimation of working capital begins with the level of activity.
Therefore the finance manager has to ascertain the required quantum of production in
advance on the basis of past experience, installed and utilized capacity of the factory and
demand.
2) Raw materials: - The finance manager has to estimate the quantity and cost of raw
materials. Lengths of time of raw materials remain in the store before issue for production
is considered longer period of stay of raw material need greater working capital. This must
be valued at cost.
3) Labour and overheads: - Expenses incurred on wages and overheads are considered
while ascertaining raw materials.
4) Work-in-progress: - While ascertaining work-in-progress the period of processing or

'period of production cycle' has to be considered. Longer the production cycle, greater the
working capital requirement. Therefore, the finance manager has to consider the amount
required for raw materials, wages and overheads while estimating volume of production.
5) Finished Goods: - The period of storing finished goods before sale has to be taken into
consideration. This is depending on season, sales forecasting, etc. If the sales are
seasonable and production is throughout the year, then working capital requirement would
be the higher during the slack seasons.
6) Sundry Debtors: - While calculating amount of sundry debtors, period credit allowed to
customers is to be taken into consideration. This period is known as "time lag in payment
by debtors". If this period is longer, required working capital will be higher in the absence
of similar time lag in payment to creditors. The sundry debtors are value at sales price
while calculating working capital.
7) Cash and bank balance: - As per past experience every businessman is suppose to know
the amount cash float or bank balance necessary to pay day is day payments. This amount
is given in the information and added in the amount of working capital required.
8) Prepaid Expenses: - There may be some expenses i.e. insurance, sales promotion would
be paid in advance and in this case working capital requirement would be higher is that
extent.
9) Sundry Creditors: - The period of credit allowed by supplier has to be taken in to

consideration while estimating required amount of working capital. It longer the period
credit from suppliers, lower will be the working capital requirements.
10) Creditors for expenses: - Time lag in payment of wages and overheads also should be
considered while deciding amount of working capital requirements. If there is no time lag in
payment of wages and overheads, more working capital will be required and there will be less
requirement of working capital when there is time-lag in payment of wages and overheads.
11) Advance from customers: - If and when advance required from customers then there will
be lower working capital requirements.
12) Contingencies: - After calculating the amount of working capital as discussed above, a
provision for contingencies may be made to make allowances for likely variations. This is
the sort of cushion against uncertainties involved in estimating working capital.
1.2 OBJECTIVES OF THE STUDY:
 To make item wise analysis of each component of gross working capital using
percentages.
 To analyze schedule of changes in working capital of the Strides Shasun Limited.
 To determine the amount of the working capital employed by Strides Shasun Limited.
 To offer suggestions based on the study of the Strides Shasun Limited.

1.3 SCOPE OF THE STUDY:
 The study is confined to Strides Shasun limited and analysis of its financial statements.
 The function of the project is analyzing the change in working capital.
 This study will be useful to the future researcher.
 The process of working capital management helps the company to identify and profitability
and balance the risk and returns.
1.4 LIMITATION OF THE STUDY:
 The study is limited for a period of 5 years.
 The period of study is limited, it is possible to make only the inter firm comparison.
 Auditor reports may be subjected to manipulation.
 The project study is mainly based on the secondary data given in Annual report of Strides
Shasun limited.
1.5 RESEARCH METHODOLOGY:
This study was undertaken by visiting the Plant location of Strides Shasun Limited,
Cuddalore Unit, and spanned over a period of one month. The information was collected by
interacting and interviewing with the concerned personnel of various functional departments.
1.5.1 RESEARCH DESIGN:
“A Research design is the arrangement of conditions for collection and analysis of data in
a manner that aims to combine relevance to the research purpose with economy in procedure” The
research design followed to study the working capital management in Strides Shasun limited is
Analytical Research Design.
1.5.2 SOURCES OF DATA COLLECTION:
1. Secondary data
Primary Data:
Primary sources of data included interactions with Unit Head, Managers & Executives.
Secondary Data:
The major sources of secondary data were the document collected annual reports, business
journals, existing records and also from the website of the company
1.6 TOOLS USED:
 Ratio analysis
 Schedule of changes in working capital.
 Gross working capital.
1.6.1 RATIO ANALYSIS:
Ratio analysis is the powerful tool of financial statements analysis. A ratio is define as
“the indicated quotient of two mathematical expressions” and as “the relationship between two or
more things”. The absolute figures reported in the financial statement do not provide meaningful
understanding of the performance and financial position of the firm. Ratio helps to summaries
large quantities of financial data and to make qualitative judgment of the firm’s financial
performance.
ROLE OF RATIO ANALYSIS

Ratio analysis helps to appraise the firms in the term of there profitability and efficiency
of performance, either individually or in relation to other firms in same industry. Ratio analysis is
one of the best possible techniques available to management to impart the basic functions like
planning and control. As future is closely related to the immediately past, ratio calculated on the
basis historical financial data may be of good assistance to predict the future. E.g. On the basis of
inventory turnover ratio or debtor’s turnover ratio in the past, the level of inventory and debtors
can be easily ascertained for any given amount of sales. Similarly, the ratio analysis may be able
to locate the point out the various arias which need the management attention in order to improve
the situation. E.g. Current ratio which shows a constant decline trend may be indicate the need for
further introduction of long term finance in order to increase the liquidity position. As the ratio
analysis is concerned with all the aspect of the firm’s financial analysis liquidity, solvency,
activity, profitability and overall performance, it enables the interested persons to know the
financial and operational characteristics of an organization and take suitable decisions.
I. LIQUDITY RATIO:
Liquidity refers to ability of a concern to meet its current obligations as and when these become
due. The short-term obligations are met by realizing amounts from current, floating or circulating
asset. The current asset either be liquid or near liquidity. These should be convertible into cash for
paying obligation of short-term nature. To measure the liquidity of a firm, following ratios can be
calculated:
a) CURRENT RATIO:
Current assets include cash and those assets which can be converted in to cash within a year,
such marketable securities, debtors and inventories. All obligations within a year are include in
current liabilities. Current liabilities include creditors, bills payable accrued expenses, short term
bank loan income tax liabilities and long term debt maturing in the current year. Current ratio
indicates the availability of current assets in rupees for every rupee of current liability.
CURRENT RATIO = CURRENT ASSET/ CURRENT LIABILITIES
b) LIQUID RATIO OR ACID TEST RATIO:

Quick ratios establish the relationship between quick or liquid assets and liabilities. An asset is
liquid if it can be converting in to cash immediately or reasonably soon without a loss of value.
Cash is the most liquid asset .other assets which are consider to be relatively liquid and include in
quick assets are debtors and bills receivable and marketable securities. Inventories are considered
as less liquid. Inventory normally required some time for realizing into cash. Their value also be
tendency to fluctuate. The quick ratio is found out by dividing quick assets by current liabilities.
LIQUID RATIO =Total Liquid Asset / Total Current Liabilities

c) CASH POSITION RATIO:
This ratio is also called Absolute Liquidity ratio or Super Quick ratio. This ratio measures
liquidity in terms of cash and near cash items and short term current liabilities.
Cash Position Ratio=Cash and Bank Balances+ Marketable Securities/Current Liabilities
II.EFFICIENCY RATIO:
Funds are invested in various assets in business to make sales and earn profits. The
efficiency with which assets are managed directly affects the volume of sale. Activity ratios
measure the efficiency and effectiveness with which a firm manages its resources or assets.
These ratios are also called turnover ratios.
a) DEBTORS TURNOVER RATIO:

Receivable turnover ratio provides relationship between credit sales and receivables of a
firm. It indicates how quickly receivables are converted into sales.
DEBTORS TURNOVER RATIO = Sales / Average Account Receivables

AVERAGE A/C RECEIVABLES = Opening Trade Debtor+ Closing Trade Debtor / 2
AVERAGE COLLECTION PERIOD = (365/DTR) Days
or RECEIVABLES * 365 / Sale
b) WORKING CAPITAL TURNOVER RATIO:

It signifies that for an amount of sales, a relative amount of working capital is needed. If
any increase in sales contemplated working capital should be adequate and thus this ratio helps
management to maintain the adequate level of working capital. The ratio measures the
efficiency with which the working capital is being used by a firm. It may thus compute net
working capital turnover by dividing sales by net working capital.
Working Capital turnover Ratio =cost of sales / net working capital
c) STOCK TURNOVER RATIO:

This ratio is also called Stock Velocity ratio. It is calculated to ascertain the efficiency of
inventory management in terms of capital investment. It shows the relation between the cost
of goods sold and the amount of average inventory.
STOCK TURNOVER RATIO = Cost of Goods Sold/Average Inventory.
d) CREDITORS TURNOVER RATIO:
Creditor’s turnover ratio is also called as Account Payable or creditor’s velocity. A firm
indicates the number of times the payable rotate in a year. The account payable includes sundry
creditors and bills payable.
Creditors Turnover Ratio = Net Credit Purchase / Average a/c Payable

Creditors collection period= Month or Day / Creditors Turnover Ratio
III.PROFITABILITY RATIO:
Profit making is the main objective of business. Aim of every business concern is to earn maximum
profits in absolute terms and also in relative terms i.e., profit is to be maximum in terms of risk
undertaken and capital employed. Ability to make maximum profit from optimum utilization of
resources by a business concern is termed as profitability.
a) GROSS PROFIT RATIO :
A ratio of financial performance calculated by expressing the gross profit as a percentage of

sale. With retailing companies in particular, it is regarded as a prime measure of their trading
success. The only ways in which a company can improve its gross margin ratio are to increase
selling prices and or reduce its cost of sale.
GROSS PROFIT RATIO = GROSS PROFIT / SALE*100

b) NET PROFIT RATIO :
A ratio of financial performance calculated by expressing the net profit as a percentage
of sale revenue. It is shown before and after taxation in the profit and loss account.
NET PROFIT RATIO=NETPROFIT/SALE*100
IV.RETURN ON INVESTMENT:
Performance measure used to evaluate the efficiency of investment. It compares the magnitude
and timing of gains from investment directly to the magnitude and timing of investment costs. It
is one of most commonly used approaches for evaluating the financial consequences of business
investments, decisions, or action.
Return on Investment = Net profit / Capital Employed
1.6.2 SCHEDULE OF CHANGES IN WORKING CAPITAL:
The excess of current assets over current liabilities is referred to as the company’s working
capital. The difference between the working capital for two given reporting periods is called the
schedule of changes in working capital.
A change in Working Capital is the net change in current assets and current liabilities.
Formula:
Increase in current assets, increase in current liabilities.
Decrease in current assets, decrease in current liabilities.
Increase in current liabilities, decrease in current assets.
Decrease in current liabilities, increase in current assets.

1.6.3 Gross working capital :
Gross working capital is the sum of all of a company’s current assets. Gross working
capital includes assets such as cash, checking and savings account balances, account receivable,
short- term investment, inventory and marketable securities. This is called as” gross working
capital”.
Formula:
GROSS WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES
CHAPTER II
REVIEW OF LITERATURE
The purpose of this chapter is to present a review of literature relating to the working
capital management. The following are the literature review by different authors and different
research scholars.
1. IMPACT OF WORKING CAPITAL MANAGEMENT ON FIRM’S PROFITABILITY

& LIQUIDITY
Jisha joseph(2014)
Every organization whether public or private, profit oriented or not, irrespective of its
size and nature of business, needs adequate amount of working capital. The efficient working
capital management is most crucial factor in maintaining survival, liquidity, solvency and
profitability of the any business organization. Keeping in view the significance of working
capital management as a gray area of corporate finance function, an attempt has been made to
examine the working capital trends and practices of Ashok Leyland. Efficient management of
working capital helps to avoid financial crisis, thereby, increasing the profitability and
enhances the firms value. By observation of this it can be seen that both the liquidity
position and the profitability position of Ashok Leyland is not up to the desired level.
The year under review saw a slowdown in the Indian economy with a consequent adverse impact
on the commercial vehicle industry. Whilst the overall volume declined by 2% year over year, the
medium & heavy duty segment clocked a 25% drop. It caused a great impact on the profitability
of the company during the past years. The short term solvency position of the firm must be
strengthened so that it is able to meet its obligations timely.
2. MANAGEMENT OF FLOATING CAPITAL IN BANKING SECTOR: ACASE STUDY

OF PUBLIC AND PRIVATE SECTOR BANKS IN INDIA
Pramod bhargava (2013)
In the present era of globalization, liberalization and privatization, management of working

capital is of utmost importance. Shifting from conservative approach to aggressive approach is
both the need and necessity of modern business. It has been seen that company reduces its
working capital to take a greater risk for bigger profits and losses conversely if it is interested
in improving its liquidity; it increases the level of its working capital. In order to get an
adequate working capital a company should maintain an equilibrium balance between
liquidity and profitability. In this paper an effort has been made to analyze the working
capital of public and private sector banks of India for the period of 2006-07 to 2010-11. The
working capital of banks under study are analyze through certain ratios and the inter comparison
of working capital policies has been examined by applying the ANOVA test.Very business
requires funds for its establishment and to carry out its day to day operations. Funds required
meeting the day to day operations or short term needs are known as working capital.
Working capital is the amount of funds necessary to cover the cost of operating the
enterprise. It represents the liquid reserves for meeting current obligations.
3. A STUDY ON WORKING CAPITAL MANAGEMENT THROUGH

RATIOANALYSIS WITH SPECIAL REFERENCE TO RAJASTHAN DRUGS &
PHARMACEUTICALS LTD.
Yogesh kumawat (2014)
Working capital is an important metric for all businesses, regardless of their size.
Working Capital is a signal of a company's operating liquidity. Having enough Working Capital
means that the company should be able to pay for all of its short-term expenses and
liabilities. Large companies pay attention to Working Capital for the same reason as small
ones do: Working Capital is a measure of liquidity, and thus is measure of their future credit-
worthiness. On the other hand, too much working capital means that some assets are not being
invested for the long-term, so they are not being put to good use in helping the company grow as
much as possible. Commercial paper (a market of large, short-term loans for big
companies) will find it more expensive if they do not have enough Working Capital. If
they are a public company, their stock price may fall if the market doesn't believe they have
adequate Working Capital. So in this perspective present study is undertaken to study working
capital management through ratio analysis at Rajasthan Drugs & Pharmaceuticals limited, Jaipur.
From the present study it is found that company financial position was seeing to be sound because
the company tries to increase its production and also net profit. To consider statistically significant
relationships between firm profitability and the components of cash conversion cycle at length, a
sample consisting of Istanbul Stock Exchange (ISE) listed
4. A STUDY TO MEASURE EFFECTIVENESS AND PROFITABILITY OF WORKING

CAPITAL MANAGEMENT IN PHARMASUTICLE INDUSTRY IN INDIA
Asha sharma (2011)
Working Capital Management has its impact on liquidity as well profitability. I have tried
to find the impact on effectiveness and profitability of working capital change in fixed assets,
current assets and sales. The effectiveness of working capital is measured on certain
parameter Current Assets to Total Assets, Current Assets to Fixed Assets, working
capital to sales. To know about the income generation capacity of a company, gross profit ratio
is not sufficient. To ensure solvency, the firm should be very liquid, which means larger current
assets holdings. A liquid firm has very less risk of insolvency; it will hardly experience a cash
shortage or stock-out situation. However, there is a cost associated with maintaining a sound
liquidity position.. If working capital is not managed properly, company can reach to crucial
financial situation. So working capital should be managed in a systematic ratio with fixed
assets, total assets and sales, so that income generation capacity can be increased. We find
that there is a significant negative relationship between liquidity and profitability. In this paper
efforts are made to know is these ratios remained unchanged for any industry or varies from one
industry to another.
5. WORKING CAPITAL MANAGEMENT AND PROFITABILITY – A CASE STUDY

OF ANDHRA PRADESH POWER GENERATION CORPORATION
Syed azhar (2011)
The funds required either to pay for expenses or to meet obligations for goods or services
Purchased by the firm are known as working capital. According to shubin “working capital is the
amount of funds necessary for the cost of operating the enterprise. “Managers can create profits
for their companies by handling optimal level of cash conversion cycle and keeping each
different component (accounts receivables, accounts payables, inventory) to an optimum
level. According to Deloof “the way that working capital is managed has a significant impact
on profitability of firms”. This result indicates that there is a certain level of working capital
requirements which potentially maximizes returns. Gill & et al, found that the management of
working capital may have both negative and positive impact of the firm’s profitability, which
in turn, has negative and positive impact on the shareholders’ wealth. Therefore there is a
negative Relationship between profitability of a firm and cash conversion cycle, thus it is possible
to increase firm’s profitability through more efficiency of working capital management. In case
of the process of an asset-liability mismatch may occur which may increase firm’s
profitability in the short-run but at a risk of its insolvency.
6. THE IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY

AND LIQUIDITY
Rekha raheja (2012)
Working Capital is the life blood and nerve center of a business. Just as circulation of blood
is essential in the human body for maintaining life, working Capital is very essential to maintain
the smooth running of a business. No business can run successfully without an adequate amount
of working Capital. Working Capital management is an important aspect of financial management.
Every business needs funds for two purposes- for its establishment and to carry out its day
to day operations. Long term funds are required to create production facilities through
purchase of fixed assets such as plant & machinery, land & building, furniture etc.
Investments in these assets represent that part of firm’s capital which is blocked on a permanent
or fixed basis and is called fixed capital. Funds are also needed for short term or current assets
such as cash, marketable securities, debtors and inventories. The investment in current assets
keep revolving fast and are being constantly converted into cash and this cash flow out again
in exchange for other current assets. Hence it is also known as revolving or circulating capital
or short term capital. Net working Capital is the excess of current assets over current liabilities.
Excessive working capital means idle funds which earn no profits for the business and hence the
business cannot earn a proper rate of return on its investment and it may lead to unnecessary
purchasing and accumulation of inventories causing more chances of theft, waste and losses. It
may result into overall inefficiency in the organization.
7. IMPACT OF WORKING CAPITAL MANAGEMENT ON CORPORATE

PERFORMANCE: A STUDY BASED ON SELECTED BANKS IN NIGERIA
Aliyu sani shawai (2016)
Every business firm requires two types of capital to run its business operations. i.e fixed
capital and working capital. Fixed capital is that part of total capital which is used for purchase of
fixed assets, diversification and expansion of business, renovation/modernization of plant &
machinery. It is so called because; the assets in which it is invested are fixed in the sense that
they are not meant to be removed from the business. Likewise, working capital is the portion
of firm’s total capital that is used for short term purposes i.e. to meet the financial
requirement of the current operations. Working capital plays the same role in the business as
the role of heart in the human body, just like heart gets blood and circulates the same in the body,
in the same way, in working capital funds are generated and then circulated in the business. As
and when this circulation stops, the business becomes lifeless. Thus prudent management of
working capital is essential for the success of a business. The management of working capital
includes the management of the level of current assets as well as the management of total
working capital. Working capital refers to the capital that is required for day-to-day working
in a business firm such as for purchasing raw-materials for meeting day-to-day expenditures
on salaries, wages, rents, rates advertising etc. According to ICAI Working capital means the
funds available for day-to-day operations of an enterprise. The term working capital is also known
as revolving or circulating capital or fluctuating capital or short term capital.
CHAPTER III
CONCEPTUAL FRAMEWORK OF THE INDUSTRY

3.1 INDUSTRIAL PROFILE:
INTRODUCTION
The first Indian pharmaceutical company, Bengal Chemicals and Pharmaceutical Works,
which still exists today as one of 5 government-owned drug manufacturers, appeared in Calcutta
in 1930. These five public sector drug-manufacturing units under the Ministry of Chemicals and
Fertilizers are: Indian Drugs and Pharmaceutical Limited (IDPL), Hindustan Antibiotics Limited
(HAL), Bengal Immunity Limited (BIL), Bengal Chemicals and Pharmaceutical Limited (BCPL)
and Smith Stanistreet Pharmaceutical Limited (SSPL). In addition, there are a number of
pharmaceutical manufacturing units under the control of state governments such as Goa
Antibiotics Ltd. and Karnataka Antibiotics Ltd. For the next 60 years, most of the drugs in India
were imported by multinationals either in fully-formulated or bulk form. There are 24,000 licensed
pharmaceutical companies. Of the 465 bulk drugs used in India, approximately 425 are
manufactured here. India has more drug manufacturing facilities that have been approved by the
U.S. Food and Drug Administration than any country other than the US. Indian generics companies
supply 84% of the AIDS drugs that Doctors without Borders uses to treat 60,000 patients in more
than 30 countries.
The Indian pharmaceutical industry currently tops the chart amongst India's science-based
industries with wide ranging capabilities in the complex field of drug manufacture and technology.
A highly organized sector, the Indian pharmaceutical industry is estimated to be worth $ 6 billion,
growing at about 10 percent annually. It ranks very high amongst all the third world countries, in
terms of technology, quality and the vast range of medicines that are manufactured. It ranges from
simple headache pills to sophisticated antibiotics and complex cardiac compounds; almost every
type of medicine is now made in the Indian pharmaceutical industry.
The Indian pharmaceutical sector has expanded drastically in the last two decades. The
Pharmaceutical industry in India is an extremely fragmented market with severe price competition
and government price control. The Pharmaceutical industry in India meets around 90% of the
country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals,
tablets, capsules, orals and injectables. There are approximately 300 big and medium scale
Pharmaceutical companies and about 8000 Small scale units, which form the core of the
pharmaceutical industry in India.
POPULATION GROWTH AND PHARMACEUTICAL BUSINESS IN INDIA
India’s pharmaceutical sector is receiving a major boost from population growth.

According to UN estimates, the population total looks set to rise from 1.1 bn at present to 1.4 bn
in 2020. Up until 2020, India will see as many children being born as there are people living in
Germany, France, the UK and Italy together. By 2025, India will probably have overtaken China
as the world's most populous Country. Its population growth results, not least from higher life
expectancy. This is attributable, among other things, to improved preventive healthcare. Of course,
though, average life expectancy in India is still markedly lower than in western countries. While
the figure is 64 years for men and 66 years for women in India, life expectancy in Germany is 76
years for men and 82 years for women.
The ageing of the population in India offers considerable market opportunities. According
to a UN estimate, the share of people over the age of 65 in the total population will rise from 5%
currently to 8% in 2025. This would mean roughly 55 million more people aged 65 and over, than
today. As a result, typical age-related illnesses such as cancer, diabetes and cardiovascular diseases
will be more wide-spread. The pharmaceutical sector will also receive a boost from the gradual
spreading of civilization diseases such as obesity and diabetes. According to
PricewaterhouseCoopers (PwC), the number of Indians with diabetes will reach approx. 74 m in
2025 (currently 34 m); this is roughly the population of Turkey today. In the developing countries
as a whole, there could be just fewer than 230 m. diabetes patients. This development should
benefit India’s generics manufacturers.
Marketing Activities of Pharmaceutical Companies in Rural Areas Rural marketing

activities of many pharmaceutical companies have been traditionally restricted to markets with
stocks of the concerned product; and stocking them with the chemists or dispensing doctors. Not
much emphasis was given to employing novel marketing strategies to woo the rural Indian doctors
and patients.
The pharmaceutical industry as such needs a lot of facilities and experts. As these facilities
and experts are available only in the urban areas, our market comprises predominantly of urban
areas (70 percent of the total market) and hardly 30 percent in rural areas.
About 70 percent of India resides in villages, which (according to various sources) comes
approximately to 74, 26,17,747 of the whopping 1.1 billion of the total Indian population. In India,
only 30 percent of the population has access to quality medicines and the treatment gap in almost
every chronic disease segment is more than 65 percent. Therefore, the opportunity is huge.
The best and the largest of pharmaceutical companies used to reach only Class 1 and II
towns. Still in many pharmaceutical companies, marketing in the villages possibly includes some
unplanned taxi tours or they leave it to the stockiest network to make the goods available without
any doctor promotion in the rural areas. Hence, the villages present a huge untapped market.
The rural market is indeed very large and is growing. There is an estimated 20 million
middle class households spread across 6, 00,000 villages in rural India, which is equal to the
number of middle class households in urban India. In addition, the disposable income in rural India
is much more as compared to urban areas. Food, shelter and primary education are virtually free
in rural areas, whereas a substantial chunk of the income in urban areas is spent on these. As a
consequence, the spend on healthcare in rural India is also increasing.
THE RURAL MARKET AREA
Given the potential of the rural markets, these days, companies are more open to reaching
the rural consumer than even before. However, most of the products that are being advertised and
marketed aggressively are the low risk-low involvement products like pain balms, lozenges, cough
and cold syrups.
The high risk-high involvement products like cardiac or cancer products are not advertised
or marketed through media as regulations prevent this. However, companies have often taken the
community-welfare route to educate the rural consumers about a particular disease segment and
make them aware of the treatments available. Companies are conducting healthcare workshops in
the rural areas by tapping the doctors there. Such programmes offer mutual advantages to both the
parties concerned. The doctors benefit through the increased footfall of prospective patients and
companies benefit through the brand awareness and possibility of increased prescriptions.
For instance, Sorento Healthcare Communications has been associated with Piramal Health
Care (PIL) for over the last two years for an Epilepsy outreach programme launched under the
banner 'Reach More, Teach More'. With an 85 percent treatment gap in epilepsy management in
India, PIL was keen to make the most of the opportunity by spreading its reach to towns beyond
their current coverage.
Strepsils lozenges has chosen to build brand awareness in the villages through traditional
means like billboards at bus stands, branding buses, hoardings, promotions at jatras and melas.
They have also done rural road shows in the interiors of Maharashtra in a traditional lawani
set up. The objective was to generate sufficient word-of-mouth so that the brand remains on tip of
the tongue when the consumers actually decide to make the purchase.
As far as Pinkoo Gripe Water, the flagship brand from the Ajanta Pharmaceutical stable,
is concerned, the product was a rural product from the very beginning. The promotion too was
rural oriented, ranging from stalls at fairs to showing slides in cinema halls. They also have vans
that move across regions. They also educate tertiary health workers, who work in smaller villages.
They train and brief them so that they can try to promote the products. For Pinkoo Gripe Water,
the entire promotion strategy is executed in local languages.
High fund as of metro marketing do not work in rural markets and companies should focus
more on what the rural customer/consumer understands and what he likes. One of the strategies
implemented by the company is by organizing a 'healthy baby' contest.
A good example of rural promotion of healthcare products is the Goli Ke Humjoli

Campaign, which helped trigger the sales of a whole range of oral contraceptive brands. The entire
market grew by a good 22 percent and created an excellent platform for low-priced contraceptives
in India.
THE SPEED BREAKERS
Despite of 70% population staying in rural India, thought comes to mind then what was
stopping the pharmaceutical companies from exploiting the full potential of rural markets? Many
companies try to make sense of the rural opportunity, but they often give up due to lack of skill
sets, expertise and experience to reach these unexplored territories. This is because most of the
companies evaluate this opportunity in a knee-jerk manner and give up when it becomes
logistically unmanageable.
Few examples of companies like P & G and Reckitt, with their OTC offerings try to reach
the rural markets, more through their FMCG expertise and network. The biggest problem that
marketers face today is the cost of reaching the rural consumer. Rural markets tend to be far more
spread out in contrast to the urban markets that are very concentrated and in compact geographies.
Absence of Regional Brands As far as prescription products are concerned, there is always
a trickledown effect with companies contacting the city-based specialists first, when promoting a
new prescription product. After the product satisfies him, it is prescribed by the layer of General
Practitioners (GP) under them. Slowly and steadily, this product then finds flavour with the GPs
at the grass root level and that is how a product reaches the doctors in the class II cities and villages.
The pharmaceutical industry may be the only industry in India that cannot boast of rural or
regional brands. The pharmaceutical industry is fraught with various social and regulatory issues,
in addition to various business issues. This is because human life is at stake here. With various
norms in place for quality of the product, pricing, packaging and huge investments that are needed
for pharmaceutical R & D and manufacturing, it is not possible for a small regional or a rural
player to come up with a standardized product for the rural as well as urban markets. Also, in these
areas, chemist is the biggest influencer and plays a significant role in the purchase process as he
often recommends products to consumers.
Thus, it will always be an urban to rural flow and not other way round. However, it can so
happen that regional players offer products in nutraceutical or ayurvedic segment to the consumers.
Yet, there will never be a situation, where a rural brand will present a threat to an MNC
brand. Not sure of this situation in Rx business, but surely in the OTC business one sees many
local brands doing very well. There are many examples in Kerala where one finds a good number
of ayurvedic brands advertised on satellite local channel very well especially in the cough, cold
and supplements areas.
JOB OPPORTUNITIES
The pharmaceutical -sales field, often called "recession-proof," is popular because it offers
excellent salary potential, great benefits, flexibility, and opportunity for growth. An aging
population, the shift away from clinical treatment of illnesses in hospitals, and the fact that people
seek a good quality of life as life expectancies continue to increase, these are some of the factors
spurring the growth of the pharmaceutical sector. The pharmaceutical industry is among the
largest, most stable, and fastest growing businesses in the entire world. The industry has grown
300 percent in the last decade, according to the Hay Group, a global organizational and human-
resources consulting firm.
The pharmaceutical salesman’s job is also seen as somewhat prestigious. "A
pharmaceutical sales representative sells a technologically advanced product to highly intelligent
physicians in a very professional environment," writes pharmaceutical sales recruiter Pat Riley,
summing up the field's appeal. Riley is author of several e-books on how to break into
pharmaceutical sales.
Pharmaceutical employers frequently seek those with at least two years of sales experience,
preferably business-to-business sales. Previous jobs that offered strong sales-training programs
also are viewed favorably. A record of promotions can be a big plus. Of those with no sales
experience, candidates with a healthcare or clinical background may have an edge. A strong record
of accomplishments is also important.
Other traits mentioned by experts as helpful in landing a job in this field are being
organized, goal-driven, creative, polished, persuasive, motivated, energetic, trustworthy, willing
to learn, aggressive, smart, ethical, confident, ambitious, positive, self-starting, patient, persistent,
a problem solver, a team player who also performs well independently, a good time manager and
prioritize, and a great communicator. Additional desirable traits include good listening skills,
integrity, negotiation skills, and presentation skills. It's generally OK to be money-motivated. You
should have good physical stamina for the long hours and all the driving you will likely to do, as
well as carrying hefty sample and promotional cases. You may be required to travel and relocate.
For example Pfizer, which states on its sales careers page that the company seeks "college
graduates, experienced salespeople, junior military officers and anyone else with the intellect,
experience and stamina to take on the challenges of a fast-track career." The company further seeks
those with "the technical knowledge and business competencies we're looking for," as well as those
who are creative self-starters with an interest in medicine or science, and strong interpersonal
skills.
3.2 COMPANY PROFILE
Shasun Pharmaceutical ltd. merged with Strides Acrolab on November 19th 2015 consequent
to receipt of statutory/ regulatory approvals of the merger, the name of Strides Acrolab limited
also changed to Strides Shasun ltd.
Vision of the company is to have “To be the leading Indian pharma MNC with a reputation
for the highest quality and integrity”.
Mission is that, “With a differentiated B2C portfolio focused on attaining leadership, we will
provide an unparalleled growth opportunity for our people and value creation opportunity
for our stakeholders”.
Name : Strides Shasun ltd.
Address: Strides Shasun limited
A1/B, SIPCOT industrial complex
Kudikadu,
Cuddalore, 607005
Phone: 04142-285400
Email/ website: www.stridesshasun.com
Industry type: Chemical and Drugs
Sector: Pharmaceutical and Drugs
Incorporation: Before merger- 21st March 1990
After merger- 19th November 2015
Accreditation: US, FDA, MHRA, ANVISA, Health Canada and WHO
No of employees: 846
Strides Shasun Limited is situated in SIPCOT, Cuddalore. It is one of the leading,
integrated global manufacturer and exporter of branded and generic finished pharmaceutical
products and dosage forms. The company offers pharmaceuticals formulations in various dosage
forms, intermediates, API (Active Pharmaceutical Ingredients) to the Pharmaceutical Industry. Its
ultimate goal is to become the preferred partner and provider of services to the customers. They
take pride on their ability to offer flexible, tailored solutions to their clients and unparalleled
expertise and commitment to their customers; they ensure that there is 100% quality and excellence
in their projects.
Shasun Pharmaceuticals Limited (formerly known as Shasun Chemicals and Drugs
Limited) was incorporated in 1976 and had its headquarters at Chennai, India. On November 19th
2015 an amalgamation was carried out between the Strides Acrolab and Shasun Pharmaceuticals
consequent to receipt of statutory/ regulatory approvals of the merger, the name of Strides Acrolab
limited was changed to Strides Shasun ltd. The motive of the merger was to fasten the growth and
to design a better strategy to develop the company’s mission. Shasun Company is majorly located
in India and United Kingdom. They offer the integrated service and benefits to the worldwide
countries like North America, Europe, Asia, Latin America etc.
The products and services provided by the company are:

 Contract, Research and Manufacturing Services (CRAMS),
 API (Active Pharmaceutical Ingredient) Products Manufacturing,
 Excellent Intermediates,
 Enteric Coating Excipients,
 Strong Presence in Key Generic Products. (i.e.) Shasun is one of the largest producers of
Ibuprofen in worldwide.
MULTI PRODUCT UNIT:

 The site is spread over about an area of 64,000 sq. meters.
 They offer the packing and dying equipments with the range and it is maintained in the
clean room suites.
 The plant possesses 95% efficiency for a solvent recovery system and hydrogenation
 The plant is equipped with an integrated effluent treatment plant is approved by local
regulatory authorities in addition to being ISO 9001:2000 certified by BVQI (BUREAU
VERITAS QUALITY INTERNATIONAL).
 They are equipped with various reactors which are capable to handle pilot to commercial
volumes with flexible containment facilities.
 The Class 100,000 (ISO 8) Clean room suites with crystallizers and dryers, high flexibility
with respect to material of constructions are available.
 Controlled area (designed for Class 10,000 (ISO7)) clean-room suites with crystallizers,
dryers, milling, sieving and packing are provided.
 The facilities include the addition control, distillation (high vacuum with columns of
different sizes), heating and cooling control, data logging, and clean room control with
Building Management System.
 The facility has a separate hydrogenation block and a utility support unit comprising of a
wide vacuum and temperature (-90° to +200°C) capabilities.
STRENGTH OF THE COMPANY:

Shasun offers services right from the discovery stage to formulations. The following list
shows some of its key strengths:
 Tailored solutions for its customers, speed delivering of services and products of fine
quality and value
 World class technologies and facilities to help manufacturing at every scale across the
whole drug development lifecycle
 Ability to move on from proof of concept to commercial manufacture on one site
 Ability to manage complexity with the help of project management expertise
 Ability to handle the most hazardous chemical processes safely
 Infusing proprietary technology to bring value to its customers
 Serving the pharmaceutical industry over 35 years
STRATEGY OF MERGER BETWEEN SHASUN AND STRIDES:

 The combination significantly enhances Finished Dosages portfolio and Complex Domains
with a pipeline of over 100 products and accelerates product filings with a combined R&D
strength of over 400 personnel.
 Helps to reduce risk of operations with the combined entity having 12 manufacturing
facilities including 3 USFDA approved Finished Dosage manufacturing facilities, 2
USFDA approved API manufacturing facilities, 1 USFDA approved CRAMS facility and
6 manufacturing facilities catering to the emerging markets.
 Merged entity to leverage Shasun's best in class API manufacturing capacities and shift
focus towards niche API's aligned with Finished Dosages portfolio and pipeline.
 Creates a top 15 listed Indian pharma companies, on the basis of revenue with increased
scale and visibility to drive future growth of the group.
DEPARTMENT FUNCTIONS:
There are various departments in Strides Shasun Limited. Some of them are,
1. Production Department
2. Quality Department
3. Purchase Department
4. Marketing Department
5. Advertising Department
6. Finance Department
7. Human Resources Department
8. Research & Development Team
ABOUT STRIDES SHASUN LIMITED - OVERVIEW
Strides Shasun Limited is an Indian pharmaceutical company headquartered in

Bengaluru, Karnataka, India. It was formed in 2015 after the merger of two companies, Shasun
Pharmaceuticals and Strides Arcolab. The company manufactures and sells active pharmaceutical
ingredients (APIs), pharma and branded generics, nutraceuticals and bio-generic products in 85+
countries, including India, USA, Europe and Africa.
As per Strides Shasun’s Annual Report for the FY 2015-16, it had:
 14 manufacturing facilities (5 in India; 7 in Africa, 1 in Italy and 1 in UK), comprising:

o 6 US FDA approved facilities
o 8 facilities for emerging markets
 3 R&D facilities employing 400+ scientists
 Invested approx. 2.38% of its 2015-16 sales turnover on Research & Development
Strides Shasun Limited is listed on the National Stock Exchange of India (NSE) and the
Bombay Stock Exchange (BSE).
STRIDES SHASUN LIMITED AT-A-GLANCE* (AS OF 31ST MARCH 2016)
 Employees 5500+
Approvals
 Turnover (31 March, 2016) ~USD 479+ million
(? 31,776 million) US FDA
 International Footprint 85+ countries
 Major Markets USA, Europe, Africa, India MHRA
 Manufacturing Facilities 14
 R&D Centers 3 TGA
 ANDAs Filed (2015-16) 52
ANVISA
 ANDAs Pending Approval 29
WHO
PMDA
EU
Health Canada
AIFA
*Source:
Annual Report 2015-16
HISTORY
Strides Shasun Limited was formed after the merger of Shasun Pharmaceuticals with
Strides Arcolab on 19th November, 2015. Prior to the 2015 merger:
 Strides Arcolab (incorporated in 1990) was headquartered in Bengaluru, India with a key
focus on the development of niche generics and bio-pharmaceuticals.
 Shasun Pharmaceuticals Limited (incorporated in 1976) was headquartered in Chennai, and
developed and manufactured intermediates, APIs (Active Pharmaceutical Ingredients) and
Formulations.
MILESTONES
 1976-77 – Shasun Pharmaceuticals is incorporated in Chennai, and its first production

facility is setup for Analgin
 1986 – Shasun Pharmaceuticals sets up second manufacturing facility at Pondicherry for
Ibuprofen
 1990 – Strides Pharmaceuticals is established in Vashi, New Bombay
 1991 – Shasun Pharmaceuticals sets up third manufacturing facility in Cuddalore for
manufacturing Ranitidine HCl
 1992 – Strides Pharmaceuticals starts exporting to Nigeria
 1992 – Shasun Pharmaceuticals establishes US subsidiary
 1994 – Shasun Pharmaceuticals raises approx?6 crore via initial public offering (IPO)
 1994 – Strides Pharmaceuticals receives venture capital funding from Schroders
 1995 – Strides Pharmaceuticals:
o sets up new sterile manufacturing facility in Bengaluru
o establishes soft gelatin capsule plant
 1996 – Strides Pharmaceuticals:
o changes its name to Strides Arcolab Limited
o acquires a bulk drug facility in Mangalore (Plama Laboratories Limited)
 1999 – Strides Arcolab:
o enters LATAM market via investments in Infabra, Brazil
o acquires Remed Laboratories
o acquires Global Remedies Limited (Hosur, Tamil Nadu)
o Merges Plama Laboratories and Remed Laboratories with Strides Arcolab
o is listed on the National Stock Exchange (NSE)
o acquires soft gelatin facility in the US
 2001 – Strides Arcolab acquires Bombay Drugs & Pharmas Limited (with manufacturing
facilities in Tarapur, Maharashtra and Panoli, Gujarat)
o is listed on the Bombay Stock Exchange
o acquires a stake in Solara, Mexico
o sets up manufacturing plants in Brazil and Mexico
 2003 – Strides Arcolab commences development and manufacture of drugs against AIDS,
TB and Malaria
 2004 – Strides Arcolab enters a joint venture with Akorn Inc. to penetrate the US hospital
market for sterile products
 2005 – Strides Arcolab inaugurates the global research and development centre, Star
Technology and Research (STAR) in Bengaluru
 2005 – Shasun Pharmaceuticals commissions new Research Centre and Formulations facility
o enters an alliance with the Clinton Foundation for supplying AIDS drugs
 acquires ICN Valeant Sterile's manufacturing unit in Poland

 acquires a controlling stake in Beltapharm SpA in Italy
 acquires Drug Houses of Australia (Asia) Pte Limited, Singapore
 enters a joint venture with Invent Farma in Spain (for Spanish and Portuguese markets)
 2006 – Shasun Pharmaceuticals successfully completes acquisition of Rhodia Pharma

Solutions
 forms a joint venture with Sagent Pharmaceuticals for specialty products in USA
 acquires Grandix (a leading brand marketing company) to enter the domestic Indian market
 buys 100% ownership of Farma Plus AS in Norway
 cedes 50% ownership in LATAM operations to Aspen Group
 forms a joint venture with Aspen Group to set up an Oncology facility in India
 enters a licensing deal with GlaxoSmithKline Pharmaceuticals for distribution in over 95

countries
 acquires controlling stake in Ascent PharmaHealth, an AXS listed company and a major
generics player in Australia
 launches Ray of Life, a critical care division with a portfolio of specialty products
 launches Starflu to treat H1N1
 2009 – Shasun Pharmaceuticals launches recombinant streptokinase in India

 collaborates with Pfizer to license and supply 40 off–patent products for the US market
 buys Campos facility in Brazil from Aspen
 extends Pfizer transaction to cover Canada, Australia, European Union, Japan, New Zealand
and Korea
 rebrands Specialty Division as Agila Specialties Private Limited
 acquires biotechnology company (Inbiopro Solutions) to enter the biologics space
 2010 – Shasun Pharmaceuticals’ finished dosages sales grow by 100% to reach ?50 crores
 2011 – Strides Arcolab files 31 ANDAs during the year and receives 27 approvals, taking
total ANDA filings to 183 and total approvals to 79
 2011 – Shasun Pharmaceuticals:
 forms 50:50 JV NBI LLC (USA) with Nanoparticle Biochem

 expands Formulations facility to 5 billion OSD
 sells off generic pharmaceuticals operations in Australia and SE Asia (Ascent) to Watson
Pharmaceuticals for AUD 375 million
 acquires a USFDA approved sterile formulations facility in Hosur, Tamilnadu, India from
Star Drugs for ?1250 million via Agila
 enters Canadian sterile space via marketing joint venture with Canadian generic drug
company, Jamp Pharma
 collaborates with GILEAD Sciences, Inc. to promote access to high-quality, low-cost generic
versions of their HIV medicines in developing markets
 records a milestone turnover of ?1000 crores

 expands formulation capacity to USD 5 billion

 enters agreement with Mylan Inc to sell off Agila Specialties division for USD 1.6 billion
plus USD 250 million
 consolidates stake in Inbiopro Solutions Pvt. Ltd. from 70% to 100% to become a 100%
subsidiary of Strides
 enters a JV with Pfenex Inc. CA, USA (via Agila Biotech) to develop, manufacture and
commercialize an initial pipeline of 6 bio-similars
 2013 – Shasun Pharmaceuticals receives:
 2012 NEPIC UK Award for innovation

 Silver Award from Pharmaexil for highest export in the large-scale category
 forms a Joint Venture with Alivira Animal Health Ltd

 acquires global rights of Nuprina brand
 undergoes successful completion of US FDA, Brazilian ANVISA and MHRA EU inspection
at SPSL, UK
BOARD OF DIRECTORS
 Chairman Deepak Vaidya

 Executive Vice Chairman & Managing Director Arun Kumar
 Executive Director Abhaya Kumar
 Independent Directors S Sridhar, AK Nair, PM Thampi, Sangita Reddy, Bharat Shah Non-
Executive Director MR Umarji.
CHAPTER IV

 DATA ANALYSIS & INTERPRETATION



 DATA ANALYSIS
 Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal
of discovering useful information, suggesting conclusions, and supporting decision making. Data
analysis has multiple facets and approaches, encompassing diverse techniques under a variety of
names, in different business, science, and social science domains.

 DATA INTERPRETATION
 Data interpretation is the study of scientific measurements and observations to develop evidence
for responding to a query. The common tools used for data interpretation are electronic
spreadsheets which are capable of sorting, graphing and searching data.

 DATA ANALYSIS AND INTERPRETATION

 Data analysis and interpretation is the process of assigning meaning to the collected information
and determining the conclusions, significance, and implications of the findings. The steps involved
in data analysis are a function of the type of information collected; however, returning to the
purpose of the assessment and the assessment questions willprovide a structure for the
organization of the data and a focus for the analysis.


 TABLE NO-4.1
 SCHEDULE OF CHANGES IN WORKING CAPITAL OF STRIDES SHASUN LTD IN THE YEAR 2011-
2012 (Rs. In cr)
 Source: secondary data
YEAR 2011-2012 2012-2013 INCREASE DECREASE
Current Asset:
Current investment 0.00 0.04 0.04
Inventories 130.32 104.35 25.97
Sundry debtors 264.28 193.10 71.18
Cash 81.46 29.33 52.13
short term loan 1052.03 234.32 817.71
Other current assets 32.90 14.24 18.66
Total Current Asset (A) 1560.99 575.35
Current Liabilities:
Short term borrowing 414.23 293.58 120.65
Sundry creditors 209.61 142.94 66.67
Other Current Liabilities 768.42 110.43 657.99
Provision 83.38 37.34 46.04
Total Current liabilities (B) 1475.64 584.28
Net Working Capital (A-B) 85.35 -8.93
Decrease Working Capital 94.26 94.26
85.33 85.33 985.65 985.65

 INTERPRETATION:
 The above table infers that, decreasing trend of net working capital worth Rs.94.26 (cr) in
the year 2012-2013.
 TABLE NO-4.2
2013 (Rs In cr)

Current Asset:
Inventories 104.35 136.80 32.45
Sundry debtors 193.10 273.29 80.19
Cash 29.33 174.96 145.63
Short term loan 234.32 227.80 6.52
Current Liabilities:
Short term borrowings 293.58 193.71 99.87
Provisions 37.34 65.72 28.38
Total Current liabilities (B) 584.28 785.13
Net Working Capital (A-B) -8.91 427.89
Increase Working Capital 436.8 436.8
427.89 427.89 745.21 745.21

 INTERPREATION:
 The above table infers that, increasing trend of net working capital worth Rs.436.8 (cr) in
the year 2013-2014.
 TABLE NO-4.3
2014 (Rs In cr)
Current Asset:
Inventories 136.80 155.40 18.6
Sundry debtors 273.29 256.01 17.28
Cash 174.96 74.30 100.66
Short term loan 227.80 102.12 125.68
Current Liabilities
Short term borrowings 193.71 162.66 31.05
Provisions 65.72 41.01 24.71
Total Current Liabilities (B) 785.13 495.68
Net Working Capital (A-B) 427.89 719.69
719.69 719.69 535.42 535.42

 INTERPRETATION:
 The above table infers that, the company has increasing trend of net working capital
worth Rs.291.8 (cr) in the year 2014-2015.

 TABLE NO-4.4
2015(Rs In cr)
Current Asset:
Inventories 155.40 379.23 223.83
Sundry debtors 256.01 702.30 446.29
Cash 74.30 94.34 20.04
Short term loan 102.12 326.16 224.04
Current Liabilities
Short term borrowing 162.66 544.41 381.75
Provisions 41.01 51.87 10.86
Total Current Liabilities (B) 495.68 1289.13
Net Working Capital (A-B) 719.69 1369.87
1369.87 1369.87 1485.86 1485.86

 INTERPRETATION:
 The above table infers that, increasing trend of net working capital worth Rs.650.18 (cr) in
the year 2015-2016.
 RATIO ANALYSIS
 TABLE NO-4.5
 STATEMENT SHOWING CURRENT RATIO OF STRIDES SHASUN LTD
 (Rs. In cr)
CURRENT
YEAR CURRENT ASSET CURRENT RATIO
LIABILITIES
2011-2012 1560.99 1475.64 1.05:1
2012-2013 575.35 584.28 0.98:1
2013-2014 1213.02 785.13 1.54:1
2014-2015 1215.37 495.68 2.45:1
2015-2016 2659.01 1289.13 2.06:1
CURRENT RATIO = CURRENT ASSET / CURRENT LIABILITIES 



3
CURRENT RATIO 
2.5 
2 
1.5

2.45 
1 2.06
1.54 
0.5 1.05 0.98
0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Current ratio
 INTERPRETATION:
 The above table infers that, the current ratio position was not good condition because
the range of ratio was 0.98:1 to 2.45:1 but current ratio norm 2:1 the company try to maintain
the norm.

TABLE NO-4.6
 STATEMENT SHOWING LIQUID RATIO OF STRIDES SHASUN LTD
 (Rs In cr)
LIQUID
YEAR LIQUID ASSET LIQUID RATIO
LIABILITIES
2011-2012 1430.67 1475.64 0.96:1
2012-2013 471 584.28 0.80:1
2013-2014 1076.22 785.13 1.37:1
2014-2015 1059.97 495.68 2.13:1

2015-2016 2279.78 1289.13 1.76:1
LIQUID RATIO=LIQUID ASSET/CURRENT LIABILITES


LIQUID RATIO
2.5
1.5
1 2.13
1.76
1.37
0.5 0.96 0.8
0
2012 2013 2014 2015 2016
LIQUID RATIO


 INTERPRETATION:
 The above table infers that, the liquidity position of the company was not in expected level
because the idle ratio of liquidity ratio is 1:1.The Company’s maximum level was 2.13:1 in the year
2014-2015. They try to maintain the assets based on norm.
 TABLE NO-4.7
 STATEMENT SHOWING CASH POSITION RATIO OF STRIDES SHASUN LTD
(Rs In cr)
CURRENT CASH POSITION

YEAR CASH
LIABILITIES RATIO
2011-2012 81.46 1475.64 0.05:1
2012-2013 29.33 584.28 0.05:1
2013-2014 174.96 785.13 0.22:1

2014-2015 74.30 495.68 0.14:1
2015-2016 94.34 1289.13 0.07:1
CASH POSITION RATIO= CASH/CURRENT LIABILITES


CASH POSITION RATIO
0.25
0.2
0.15
0.22
0.1
0.14
0.05
0.07
0.05 0.05
0
2012 2013 2014 2015 2016
Cash position ratio


 INTERPRETATION:
 The above table infers that, the highest cash position ratio in the year 2013-2014, lowest cash
position ratio in the year 2011-2012 and 2012-2013.
 TABLE NO-4.8
 STATEMENT SHOWING STOCK TURNOVER RATIO OF STRIDES SHASUN LTD
(Rs In cr)
COST OF
AVERAGE TURNOVER TURNOVER
YEAR GOODS D/MONTH
INVENTORY RATIO PERIOD
SOLD
2011-2012 317.84 235.63 1.34 12 8.95
2012-2013 281.54 194.96 1.44 12 8.33
2013-2014 511.83 333.61 1.53 12 7.84
2014-2015 473.28 367.12 1.28 12 9.37
2015-2016 1159.43 913.53 1.26 12 9.52
STOCK TURNOVER RATIO = Cost Of Goods Sold / Average Inventory

STOCK TURNOVER RATIO
10 9.37 9.52
8.95
9 8.33
7.84
8
7
6
5
4
3
2 1.34 1.44 1.53 1.28 1.26
1
0
2012 2013 2014 2015 2016
TURNOVER RATIO TURNOVER PERIOD

 INTERPRETATION:
 The above table infers that, stock turnover ratio was fluctuating nature. In the year 2013-2014
the ratio was high. In the year 2015-2016 the ratio was low.

TABLE NO-4.9
 STATEMENT SHOWING CREDITOR TURNOVER RATIO OF STRIDES SHASUN LTD (Rs In cr)
NET
AVG.A/C COLLECTION
YEAR CREDIT CTR D/MONTH
PAYABLE PERIOD
PURCHASE
2011-2012 107.21 209.61 0.51 12 23.52
2012-2013 100.31 142.94 0.70 12 17.14
2013-2014 118.21 217.08 0.54 12 22.22
2014-2015 49.83 188.62 0.26 12 46.15
2015-2016 90.82 497.17 0.18 12 66.66
Creditors Turnover Ratio = Net Credit Purchase / Average a/c payable

Creditors collection period=Month or Day / Creditors Turnover Ratio

CREDITOR TURNOVER RATIO
70 66.66
60
50 46.15
40 TURN OVER
COLLECTION PERIOD
30 23.52 22.22
20 17.14
10
0.51 0.7 0.54 0.26 0.18
0
2012 2013 2014 2015 2016

 INTERPRETATION:
 The above table infers that, the creditors turnover ratio was fluctuating nature. In the year
2012-2013 the ratio was high that is 0.70, but in the year 2015-2016 the ratio was 0.18.
 TABLE NO-4.10
 STATEMENT SHOWING DEBTOR TURNOVER RATIO OF STRIDES SHASUN LTD
(Rs In cr)
NET
COLLECTION
YEAR CREDIT AVG.RECEIVABLES DTR D/MONTH
PERIOD
SALES
2011-2012 749.62 264.28 2.83 12 4.24
2012-2013 712.01 193.10 3.68 12 3.26
2013-2014 1063.85 273.29 3.89 12 3.08
2014-2015 929.41 256.01 3.63 12 3.30
2015-2016 2203.49 3.13 12 3.83

702.30
Debtor Turnover ratio = Net Credit sales / Average receivable

Debt collection period = Months or Days / Debtors Turnover

4.5 4.24 DEBTOR TURNOVER RATIO

3.89 3.83
4 3.68 3.63
3.5 3.26 3.3
3.08 3.13
2.83
3
2.5 DEBTOR TURNOVER
2 DEBTOR COLLECTION PERIOD
1.5
1
0.5
0
2012 2013 2014 2015 2016
 INTERPRETATION:
 The above table infers that the debtor turnover ratio was fluctuating every year, except in
the year 2011-2012. The average receivable very low in the year 2012-2013 that is Rs.193.10 cr.
 TABLE NO-4.11
 STATEMENT SHOWING WORKING CAPITAL TURNOVER RATIO OF STRIDES SHASUN LTD (Rs In
cr)
NET WORKING
YEAR SALES WCTR
CAPITAL
2011-2012 749.62 85.35 8.78
2012-2013 712.01 -8.91 -7.96
2013-2014 1063.85 427.89 2.48
2014-2015 929.41 719.69 1.29
2015-2016 2203.49 1369.87 1.60
Working capital Turnover Ratio = Net Sales/Net working capital

WORKING CAPITAL TURNOVER RATIO
10
8
6
4 8.78
2
2.48 1.29 1.6 WORKING CAPITAL
0
TURN OVER
-2 2012 2013 2014 2015 2016
-4 -7.96
-6
-8
-10

 INTERPRETATION:
 The above table infers that, the working capital turnover ratio is suddenly decreasing from 8.78
to -7.96. But in the year, 2013-14, the working capital turnover ratio is suddenly increased to
high that is 2.48. Working capital turnover ratio is highly fluctuating.

TABLE NO-4.12
 STATEMENT SHOWING GROSS PROFIT RATIO OF STRIDES SHASUN LTD
 (Rs In cr)
GROSS PROFIT
YEAR GROSS PROFIT SALES
RATIO
2011-2012 749.62 57.59%
431.78
2012-2013 712.01 60.45%
430.47
2013-2014 1063.85 51.88%
552.02
2014-2015 929.41 49.07%
456.13
2015-2016 2203.49 47.38%
1044.06
GROSS PROFIT=GROSS PROFIT/SALE*100


GROSS PROFIT RATIO
70.00%
60.00%
50.00%
40.00%
GROSS PROFIT
30.00% 57.59% 60.45%
51.88% 49.07% 47.38%
20.00%
10.00%
0.00%
2012 2013 2014 2015 2016

 INTERPRETATION:
 The above table infers that, increase the gross profit ratio in the year 2011-2012 and 2012-
2013.Then the gross profit ratio is 51.88% in the year 2013-2014. Then it will reduce in the year
2014-2015 and 2015-2016.

TABLE NO-4.13
 STATEMENT SHOWING NET PROFIT RATIO OF STRIDES SHASUN LTD
 (Rs In cr)
NET PROFIT
YEAR NET PROFIT SALES
RATIO
2011-2012 117.93 749.62 15.73%
2012-2013 55.99 712.01 7.86%
2013-2014 351.29 1063.85 33.02%
2014-2015 532.32 929.41 57.27%
2014-2016 161.07 2203.49 7.30%
NETPROFIT=NETPROFIT/SALES*100

NET PROFIT RATIO
70.00%
60.00%
50.00%
40.00%
NET PROFIT
30.00% 57.27%
20.00%
33.02%
10.00%
15.73%
7.86% 7.30%
0.00%
2012 2013 2014 2015 2016

 INTERPRETATION:
 The above table infers that, the net profit ratio is increase in the year 2013-2014 to 2014-2015,
that is 33.02% to 57.27%. But in the year 2015-2016 is suddenly decreased from 57.27% to 7.30%.
 TABLE NO-4.14
 STATEMENT SHOWING RETURN ON INVESTMENT OF STRIDES SHASUN LTD
(Rs In cr)
CAPITAL
YEAR NET PROFIT EMPLOYED ROI
2011-2012 117.93 1723.16 0.06
2012-2013 55.99 1656.07 0.03
2013-2014 3512.93 1631.28 2.15
2014-2015 532.32 1638.68 0.32
2015-2016 161.07 4016.11 0.04


RETURN ON INVESTMENT=NETPROFIT/CAPITAL EMPLOYED

ROI RATIO
2.5
1.5
ROI
1 2.15
0.5
0.06 0.32
0 0.03 0.04
2012 2013 2014 2015 2016

 INTERPRETATION:
 The above table infers that, return on investment is the measure of the profitability of the
company is been expressing by its net profit and its percentage of its capital employed. The high
return was in the year 2013-2014 as 2.15. The low return was in the year 2012-2013 as 0.03.
 TABLE NO-4.15
 COMPOSITION OF GROSS WORKING CAPITAL
 (Rs In cr)
YEAR CURRENT INVENTORIES DEBTORS CASH LOAN OTHER TOTAL

INVESTMENT C.A
2011-2012 0.00 130.32 264.28 81.46 1052.03 32.90 1560.99

(0%) (8.34%) (16.93%) (5.21%) (67.39%) (2.10%) (100%)
2012-2013 0.04 104.35 193.10 29.33 234.32 14.24 575.38

(0.03%) (18.13%) (33.56%) (5.09%) (40.72%) (2.47%) (100%)
2013-2014 387.11 136.50 273.29 174.96 227.80 13.07 1212.73

(31.92%) (11.25%) (22.53%) (14.42%) (18.78%) (1.07%) (100%)
2014-2015 561.29 155.40 256.01 74.30 102.12 66.25 1215.37

(46.18%) (12.78%) (21.06%) (6.11%) (8.40%) (5.45%) (100%)
2015-2016 1132.95 379.23 702.30 94.34 24.03 2659.01

(42.60%) (14.26%) (26.41%) (3.54%) 326.16 (0.90%) (100%)
(12.26%)
TOTAL 2081.39 905.8 1688.98 454.39 1942.43 150.49 7223.48
(28.81%) (12.53%) (23.38%) (6.29%) (26.89 %) (2.08%) (100%)


 INTERPRETATION:
 The above table infers that, components of current assets were expressed in percentages. The
inventory is increasing trend from the year 2013-2014 to 2015-2016, except in the year 2012-
2013. Debtors had up and down in the company. The gross working capital is taken as 100%.
CHAPTER V
FINDINGS
The working capital is an important factor for their day to day operation is to identify the
efficient way of managing the working capital components of current assets and current liabilities.
The management should workout the optimum level of working capital which gives a balance
between the risk, return and profitability. The following are finding from the study conducted
in STRIDES SHASUN LTD.
The inventory is increasing trend from2013-2014 to 2015-2016. Debtors had ups and
down in the company. Cash is increasing trend in the year 2013-2014. The gross working capital
is taken as 100%.
The company has decreasing trend of net working capital worth Rs.94.26 (cr), In the year
2012-2013 the net working capital increasing trend worth Rs.436.8 (cr). In the year 2013-2014
the net working capital increasing trend worth Rs.291.8 (cr) In the year 2014-2015 there is
increasing trend of Scheduled of the Working Capital worth Rs.650.18 (cr).
Current ratio position was not good condition because the range of ratio was 0.98:1 to
2.45:1. But current ratio norm 2:1.The Company try to maintain the norm. Liquidity position of
the company was not in expected level because the idle ratio of liquidity ratio is 1:1. The lowest
cash position in the year 2011-2012 and 2012-2013. Stock turnover ratio is increase in the year
2013-2014 and in the year 2015-2016 the ratio was low. Creditor turnover ratio is increase in the
year 2012-2013 is 0.70 and the lowest ratio is 0.18 in the year 2015-2016.
Debtor turnover ratio was fluctuating every year. The average receivable very low in the
year 2012-2013 that is Rs.193.10 (cr). Working capital ratio is gradually increased in the year
2013-2014. Then suddenly it decreased in the year 2012-2013.
Gross profit ratio is increasing in the year 2012-2013 that is 60.45%.Then it reduce in the
year 2014-2015 and 2015-2016. Net profit ratio is increase in the year 2013-2014 to 2014-2015
that is 33.02% to 57.27%. But in the year 2015-2016 suddenly decreased from 57.27% to7.30%.
Return on investment ratio is high return was in the year 2013-2014 as 2.15%.The low return was
in the year 2012-2013 as 0.03%.
SUGGESTIONS
The current ratio of the firm as almost reached the standard norm (2:1). The company shall
try to maintain the level. The concern’s gross profit margin is maintain at a better level. The
business entity shall try either to balance at this level or can improve beyond this point in the fore
coming years. The firm has adequate amount of liquid assets which enhances its liquidity positions.
Therefore, it can be suggested to maintain the liquid assets at the optimum level. The firm’s
working capital has under gone major fluctuation throughout the 5 years period, company should
take necessary measure to maintain its working capital at the desired level so as to finance it
operating activities. The firm’s net profit major has reduced drastically in the last year, it is
advisable to reduce the operating expenses to the lowest possible levels to record growth in profit.
CONCLUSION
The focus of the study is to analyze the effective utilization of the working capital in the
Strides Shasun Ltd. The working capital management contributes much in overall management
of the organization affairs. The working capital is an important factor in the manufacturing concern
for the day to day operation.
Working capital of this company is highly fluctuating trend. Cash position is not in good
condition, the company tries to attain the norms. The working capital last 5 years of this study of
working capital is optimistic level. Net profit of the company is gradually increasing and Gross
profit of the last 3 years is also decreasing trend.
So the company should work out to reach the optimum level of working capital, which
gives a balance between the risk, return and profitability.
BIBLIOGRAPHY
BOOK:
 T.S.Reddy and Y.Hari Prasad reddy - First Edition 2001 “Financial & Management
Accounting Management of Margham Publications, Chennai-600017.
 I.M. Pandey – Eighth Edition, 2003 “Financial Management” of vikas publishing house
private limited, New Delhi.
 Prassana Chandra Financial Management. (Fifth Edition).
.
JOURNALS AND ARTICLES:
 Gupta MC and RJ Huefner (1972), A Cluster Analysis Study of Financial Ratios and
Industry Characteristics. Journal of Accounting Research 10(1): 77-95.
 Relationship between working capital management and profitability—Amarjeet
Gill,Nahum Biger,Neil Mathur (2010)
 An analysis of working capital management - V. Ganeshan (2007)
WEBSITE:
www.brandindiapharma.in
www.finance.org
www.wikipedia.org
www.ijrcm.com
www.stridesarco.com

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A STUDY ON WORKING CAPITAL MANAGEMENT IN STRIDES

SHASUN LIMITED AT CUDDALORE

UNDER THE GUIDANCE OF

In partial fulfillment for the award of the degree

DEPARTMENT OF MANAGEMENT STUDIES

DEPARTMENT OF MANAGEMENT STUDIES

INTERNAL GUIDE HEAD OF THE DEPARTMENT

Submitted for Viva-Voice Examination held on ___________

First and foremost, I would like to acknowledge my sincere thanks to

I convey my heartiest thanks to Dr. N.S.N. CAILASSAME, Associate professor,

I would like to convey my great thanks to my internal guide Mrs.

I express my sincere thanks to Mr. S. BALAJI, Finance and Accounts Manager,

1.1 WORKING CAPITAL 1

1.2 OBJECTIVES OF THE STUDY 11

1.3 SCOPE OF THE STUDY 12

1.4 LIMITATION OF THE STUDY 13

1.5.1 RESEARCH DESIGN 14

1.6 TOOLS USED 15

1.6.1 RATIO ANALYSIS 15

1.6.2.SCHEDULE OF CHANGES IN WORKING

II REVIEW OF LITERATURE 21-25

CONCEPTUAL FRAMEWORK OF THE INDUSTRY 26-42

III 3.1 INDUSTRIAL PROFILE 26

3.2. COMPANY PROFILE 33

IV DATA ANALYSIS AND INTERPRETATION 43-58

V FINDINGS, SUGGESTIONS AND CONCLUSIONS 59-62

4.1 Schedule of changes in working capital of the year 2012-2013 44

4.2 Schedule of changes in working capital of the year 2013-2014 45

4.3 Schedule of changes in working capital of the year 2014-2015 46

4.4 Schedule of changes in working capital of the year 2015-2016 47

4.5 Current ratio 48

4.6 Liquidity ratio 49

4.7 Cash position ratio 50

4.8 Stock turnover ratio 51

4.9 Creditor turnover ratio 52

4.10 Debtors turnover ratio 53

4.11 Working capital turnover ratio 54

4.12 Gross profit ratio 55

4.13 Net profit ratio 56

4.14 Return on Investment 57

4.15 Composition of Gross Working Capital 58

4.5 Current ratio 48

4.6 Liquidity ratio 49

4.7 Cash position ratio 50

4.8 Stock turnover ratio 51

4.9 Creditors turnover ratio 52

4.10 Debtors turnover ratio 53

4.11 Working capital turnover ratio 54

4.12 Gross profit ratio 55

4.13 Net profit ratio 56

4.15 Return on Investment 57

For a success of working of a business organization management of working capital is

INTRODUCTION AND RESEACH DESIGN

1.1 WORKING CAPITAL:

MEANING OF WORKING CAPITAL:

Raw materials Work in progress

DEFINITIONS OF WORKING CAPITAL:

The accounting principles of board of American institute of Certified Public

Backer and Malett-

Thus working capital means investment made by a business organization in short-term

TYPES OF WORKING CAPITAL:

It has the following characteristics

Temporary or variable working capital This component represents a certain amount of