Submitted in partial fulfillment of the award of degree Of MASTER’S OF BUSINESS ADMINISTRATION Session (2008-2010)
SUBMITTED TO: Kurukshetra University, Kurukshetra

SUBMITTED BY: Palvi Sharma M.B.A 3rd Semester (Finance\ Marketing) College Roll No. 8558 University Roll No.

(Approved By AICTE, Affiliated To Kurukshetra University, Kurukshetra)

I, Palvi Sharma, student of MBA III Semester, studying at Doon Valley Institute of Engineering and Technology, Karnal, hereby declare that the summer training report on “Inventory Management And Its Analysis” submitted to Kurukshetra University, Kurkshetra in partial fulfillment of Degree of Master’s of Business Administration is the original work conducted by me. The information and data given in the report is authentic to the best of my knowledge. THIS SUMMER TRAINING REPORT IS NOT BEING SUBMITTED TO ANY OTHER UNIVERSITY FOR AWARD OF ANY OTHER DEGREE, DIPLOMA AND FELLOWSHIP. (PALVI SHARMA)


“Gratitude is not a thing of expression; it is more a matter of feeling.” It is my pleasure to be indebted to various people, who directly or indirectly contributed in the development of this work and who influenced my thinking, behavior, and acts during the course of study. I express my sincere gratitude to Dr. Harish Abhichandani, worthy Principal for providing me an opportunity to undergo summer training at Liberty Shoes Ltd., Libertypuram, Kutail. I am thankful to Mr. Rakesh Chauhan, HOD(Finance) working in LIBERTY SHOES,KUTAIL who provided me his expert advice, inspiration & moral support in spite of his busy schedule & assignments, and lastly Lecturers MBA who has mainly provided me understanding of this project. I also extend my sincere appreciation to Mrs. Manisha Singh, H.O.D of M.B.A Department who provided her valuable suggestions and precious time in accomplishing my project report. Lastly, I would like to thank the almighty and my parents for their moral support and my friends with whom I shared my day-to-day experience and received lots of suggestions that improved my quality of work. (Palvi Sharma)


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Title Page Acknowledgement Preface Executive Summary Introduction to the Company Introduction to the Topic Research Methodology Analysis and Interpretation Conclusion Bibliography Annexure

I studied annual reports of different years of Liberty shoes Ltd. manual. But still the company is in stronger position because the profits have increased with sales. With the help of Ratio Analysis. In this. . This report is all about study of Inventory Management of Liberty shoes Ltd. The study contains certain limitations because enough data was not available but all the efforts have been made to collect the relevant information through the source available. which bring in inflexibility in company’s operation.PREFACE LIBERTY shoes Ltd. Is the only Indian company that is among the top five manufacturers of leather footwear in the world with a turnover exceeding US $100 million. Data is collected from annual reports of different years of Liberty shoes Ltd. My objective is to study Inventory Management of Liberty shoes Ltd. For this report.. The Company is highly dependent on external debt. In this. research design used is exploratory research design. I define clearly what I want to measure and employ adequate method for measuring it. Exploratory research design main purpose is to formulate a problem for more precise investigation. websites and books.


This project is a small attempt to study the Inventory management LIBERTY SHOES LIMITED. For calculating various ratios 300 days have been taken as number of working days after deducting Sundays and holidays except for 2006-07. therefore balance sheet figures for 2007-08 comprises of 15 months. The project can be divided into two sections. Reason being the company has changed its financial year from 2006-07. Thus Inventory Management is of prime importance. Ratios have been discussed to compare inventory management performance over the years and to comment and not the absolute values. To analyze the performance. Ratio analysis has been done on the basis of three years data. .EXECUTIVE SUMMARY If development capital is what establishes a business Inventory Management is what keeps it going. 2007-08 where 375 days have been taken. Apart from liquidity and activity ratios cash and loans & advances has been discussed separately as these two appears to be crucial in Liberty inventory management analysis. First is the analysis of inventory management position of the company using ratio analysis and second is the study Inventory management techniques. but the cash flows – that is when money has to be paid out in relation to the stream of income arriving in. This project report is based on financial data up to 2007-08 only. published balance sheets of LIBERTY SHOES LIMITED have been used. Therefore figures have not been converted into 12 months in this report. What is important is not just the size of operating costs. One of the most common downfalls of business is unexpectedly high running cost.

So they innovate shoes for the protection of their feet. standing. When the human being came into existence. and Addidas etc. But in the past one decade the situation has completely changed because new generation of professionals did not adopt this line as shoemaker and preferred to join white-collar jobs. Professional cobblers were responsible for production of every type of shoes. Up to eighties. cold dampness. The importance of footwear is highly recognized in western and other advanced countries. the bulk of shoe industry was in cottage sector. dust and roughness of ground while walking.INTRODUCTION TO FOOTWEAR INDUSTRY Footwear is a man made outer covering of foot. It is genially made out of leather but the same can be made with synthetic material. Gucci. surplus manpower and resource of raw material. whatever the reason being. or even running. Bata was the main source of supply of footwear to the cites and towns with higher standard of living. Reebok. so the footwear industry grew in full swing that originated big companies like Nike. But the scenario in India is somewhat different and regretfully as the industry could not develop itself despite the fact that India being second largest populated country in the world. But taking into consideration the . Till the mid of 20th century. It resulted in the diversification from schedule caste to other class of people as industrial workers. they were needed to protect themselves from heat.

and Banglore etc. many new footwear companies came into light like Liberty. Kolkatta. Action. Delhi.growing standard of living and demand. Madras.Corona. Karnal. Mumbai. Faridabad. Lakhani etc. Production of footwear at this movement is mainly at Agra. . Kanpur.

Availability of raw material and manpower is not a problem. Depending upon the styles. So the small sector has to play a vital role in industry development. . type and purpose. Boot & shoe or closed type footwear covering most part of the feet.Footwear industry in India can never be a heavy industry in general and small entrepreneurs with small investments in machinery and capital could remain for all purposes the backbone of industry. Sandal or strap attached footwear. the footwear can be broadly classified into three groups: • • • Chappal or open type footwear. It is the ideal industry for entrepreneurs without much of investment in the industry assuring growing demand and profits.


COMPANY INFORMATION Board of Directors • • • • • • • • • • • Adesh gupta CEO & Executive Director Shammi bansal Executive Director Adarsh Gupta Executive Director Harish Kumar goel Director(Law & Taxation) Sunil bansal Director Amitabh Taneja Independent Director Prem Chand Garg Independent Director Raghu Goel Independent Director Siddharth Sanghi Independent Director Surendra Kumar Arya Independent Director Vivek Bansal Independent Director Audit committee • • • • Sunil Bansal Prem Chand Garg Raghu Dayal Vivek Bansal Share transfer committee • • • Adarsh Gupta Sunil Bansal Prem Chand Garg Remuneration/Selection Committee • • Raghu Dayal Prem Chand Garg .

Membership & certificate • • • • • • • Confederation of India industry (CII) Federation of India chambers of commerce & industry (FICCI) PHD chamber of commerce and industry (PHDCCI) The associated chambers of commerce and industry of India (ASSOCHAM) Federation of Indian export organization (FIEO) Council for leather export (CLE) ISO 9001 Company secretary & Vice President • Munish kakra .

Jammu. 13th Mile Stone. GURGAON (Haryana) • BRANCHES Ahmedabad. • BANKERS ABN AMRO Bank N. DLF Building No. Central Bank of India Corporation Bank HDFC Bank Hong Kong & Shanghai Banking Corporation Limited .Agra.Kolkata.V. (91)-124-4616222 E-Mail: mail@libertyshoes.Karnal-132001 (Haryana) Tel. (91)-1748-251100 E-mail: • CORPORATE OFFICE 2nd Floor.T Karnal Road.BASTRA.Hyderabad. (91)-124-4616200 Fax.Jaipur. P.LIBERTY OFFICES • REGISTERED OFFICE Liberty puram.Delhi. Distt.Rajpura and Saharanpur. Phase II.Bangalore.Mumbai. (91)-1748-251111-14 Fax. G.O.Chennai.8 DLF Cyber Citi. Kutail. Tower-B.

. Libertypuram. Dehradun & Roorkee in Uttarakhand.GROUP DATA AT A GLANCE Year of Establishment Employment Business Investment Status of Business Present Activities 1954 More than 5000 employees US $ 100 Million Flagship company of the Group. Pounta Sahib in Himachal Pradesh supported by strong Marketing Network having • 14 Branch offices • 02 Overseas offices • 300 Liberty Exclusive Distributors • 350 Liberty Exclusive Retail Stores • 20 Overseas showrooms All over the world. Second largest footwear manufacturer in the country having fully integrated plants to manufacture various kind of footwear with Annual Production of over 10 million pairs. Gharaunda in Haryana. Over US$ 125 Million Mother Brand LIBERTY is ranked among Top 100 brands in the country. a public limited company listed in all major stock exchanges of India. • Cemented Construction • Direct PVC Injection • Direct PU Injection • Direct EVA Injection • Direct TPU Injection Annual Turnover Brand Equity Infrastructure Export Markets Technology . mainly with Europe in • Germany • United Kingdom • France • Spain • Hungary Liberty’s patented technology “HUMANTECH” is a combination of human craftsmanship and technological excellence with following technologies available in the world for Footwear Industry. Liberty Shoes Ltd. Other 10 Successful National brands. known for its respective segment of footwear Various plants spread over 200 acres of land in and around Karnal.

come a long way since it began its operations a little over 50 years ago in the cityof Karnal. Haryana. . Liberty Leathers.500 Crores approximately. The emphasis since the very beginning has been to offer “great products at value for money / affordable prices”. namely Liberty Footwear Company. It manufactures footwear both for export and domestic markets. HISTORY: Liberty Group started operation in 1954 and today comprises of five firms. Liberty Group marketing Division and Liberty Shoes Limited. The company has carved a name for itself in the international market and is India’s largest exporter of footwear to Germany. set various benchmarks in Footwear Manufacturing within the Group’s Production facilities and also to Industry. The group has an annual turnover of Rs.INTRODUCTION Liberty Group. The company has state of the art production facilities at Libertypuram to manufacturer high quality footwear and its contribution in Liberty Group’s total sale is over 30% and it’s rising steadily. Liberty Shoes Limited. This led to the development of Liberty Patented “HUMANTECH” approach which synergise traditional workmanship with state of the art technology to provide the best quality at the most competitive price. Liberty group companies. Liberty has its own studio for design and development of footwear. Liberty Enterprises. the public company of the group started commercial production in 1993 and is the country’s leading footwear manufactures today.

CORPORATE PHILOSPHY: Steeped in a philosophy that has at its core innovation. beliefs and aspirations of people while maintaining the sanctity of certain traditions like workmanship and good value. global. CORPORATE SAGA: With people as its leitmotif. value for money seeking buyer to the trendy. Using the patented 'Humantech' approach that combines the best of talent with the latest in technology. That which projects itself in the expectancy and excitement with which one greets the arrival of the new combined with a sincere and deep regard for the old. Liberty is today consolidating and expanding its following which extends from the fashion alleys to the sidewalks with styles that compliment the newest most happening trends and also by turning footwear selling into a byword for personalized service in an ambience and shoe stations in India and abroad. pride ourselves over and above everything else on our healthy and heart-felt respect for the human ethos. From the price-conscious. technology and advancement. . That which is appreciative of and adopts at every stage the unique balance between modernization and tradition. we. at Liberty. priceindifferent customer.” Liberty as a brand is constantly evolving to keep pace with the changing trends. styles. Liberty has for over 50 years always stayed in touch with the aspirations of every successive generation even as it developed the largest range in the industry catering to every income bracket and age segment. from the with it all attitude teenager to the conservative seen it all adult just about everybody today finds a good reason for being in Liberty.

3 Machines for EVA Injection. to work for.Liberty fits in effortlessly. six lines for cement lasted injection and one machine for the latest TPU Injection. Be it formal or casual. 3 PU Injection units for unit sole. covers the entire domain of industrial safety and health footwear requirements. 15 Machines for PVC Direct Injection.THE CREDO: • • • • • To ensure that the method we use is the latest technology world-over. MANUFACTURING: What gives Liberty the edge is vertically integrated manufacturing infrastructure on technology basis with completely in-house state of the art production facilities which includes 8 DESMA machines for PU Direct Injection. at office or at the beach. LIBERTY RANGE: The family brand style personified with something for every need. . provides a complete range of family footwear of all seasons and occasions. to know that: “We Are About People”. a conference or a soiree . Above production facilities are maintained with focus on environment cleanliness ISES 2000 norms. To remain a true cosmopolitan to the spirit. To walk that extra miles to ensure customer satisfaction worldwide. To follow the highest standard of honest workmanship in whatever we make. To remain a great corporation to associate with.

Himachal Pradesh (Approx 225 K. from Delhi) Dehradun. Italy . at fashion centres across India. from Delhi) Karnal. 150 K. It’s a concept that has opened new frontiers in retail selling . 350 exclusive showrooms and over 6000 multi-brand outlets. from Delhi) Libertypuram. Himachal Pradesh (Approx 229 K. Products are marketed across the globe through 150 distributors. Liberty has production facilities at the following locations: • • • • • • • Gharaunda. from Delhi) Roorkee.M. the company behind the Revolutions store is a 100% subsidiary of Liberty Shoes Limited The company is producing more than 50. from Delhi) Batamandi.102 K. Paunta Sahib. Management System.124 from Delhi) Satiwala.M. Uttranchal (Approx.M. Haryana (Approx. Setting new benchmarks in the retail business in India Liberty Retail Revolutions caters to the aspirations of the style-driven in India with an exclusive chain of upmarket showrooms. Uttranchal (Approx. and Germany. quality-obsessed nations like France . (Approx.000 pairs of footwear a day covering virtually every age group and income category.Liberty also has the ISO: 9001-2000 certification for its Quality. Revolutions Concept Stores. from Delhi) GROUP COMPANIES: Liberty Retail Revolutions Limited Liberty Retail Revolutions Limited.M.never seen before .M.95 K. Pounta Sahib. Liberty is a technology driven company ‘HUMANTECH’ – Liberty’s patented technology is combination of human craftsmanship and technological excellence.M. Haryana. (Approx. Haryana. and sold in thousands every day in more than 25 countries including fashiondriven. 300 K. a testimony to all the system and procedures in place.

FOOTFUN Something for those little feet as they learn to walk. Where beauty and functionality achieve perfect harmony. Form compliments hubs. at office or at the beach.50 crore state-ofthe-art plant at Neemrana Industrial Area of Rajasthan the Beach range of fine bathroom products and accessories including WCs. washbasins. They’re hap and they’re happening. Be it formal or casual. But why limit the pleasure to summers?! Here’s one brand of sandals that stays cosy and comfy all year round. A happening range of sports shoes in far out colors that provides the perfect footnote to a head-turning presence. BRANDS This family brand is style personified with something for every need. In fairy-tale colors and designs. . a conference or a soiree Liberty fits in effortlessly. the style and ease that forces the world to take notice. Airy. When the sun blisters and the heat strokes. bidets. catering to individual styles and looks. comprising five distinctive collections each with its own definitive character and style. And tradition blends seamlessly into innovation. Produced at a Rs. Perfect for those hot summer days. COOLERS They’re cool and they’re hot. Liberty Whiteware Limited The newest member of the Liberty Group introduced a range of ceramic sanitary ware and accessories of European design that’s inspired by a lifestyle of sheer elegance. FORCE-10 The flair. light and comfortable with lycra uppers and no laces. they keep the feet cool and comfortable. and shower trays. in an ambience as magical and exciting as the products lined up – a world class range in footwear fashion and accessories.

Perfect for conquering the neighbourhood in designs that are the latest rage the world over. trendy and with it. SENORITA Walk tall. A safety footwear for industrial use. Strappy styles and comfortable heels. A range of stunning brogues and smart lace ups that will be noticed and talked about every step of the way. offering customers with waterproof. GLIDERS Cool and comfortable. soles with steel toe caps and offering the widest range of styles in safety shoes. stylish professional gear crafted from leather uppers and direct injection P. Unmistakably a part of Generation You. WARRIOR Smart. To master the art of being confident and surefooted on slippery grounds and danger ones. TIPTOPP It’s what Mrs. fire retardant and shock free product in economic range. WINDSOR The premium is on lightness.FORTUNE Genuine leather uppers and extra light poly soles help complete the power dressing in men with élan and panache. And colors that become the envy of all and sundry. walk light and walk with amazing style. . style and comfort which makes it ideal for men who take every challenge effortlessly in their stride. FREEDOM A new introduction in the safety footwear segment in Nitrile PVC material. Rediscover the little girl that lurks not far behind in every woman.U. Junejas of the world love to be seen in. laughing and loving every moment of life.

Some call it Research & Development Wing some put a price to investments in the “Emotional Technology“ that it comes out as. 5. 4. 3. a name known for water proofing technology worldwide. Liberty is the only factory in India having water proofing technology approved by SYMPATEX. Liberty pioneered the PU (Polyurethane) technology in India in footwear industry in 1982 and today is the largest producers of footwear with this technology in Asia. 2. Liberty also very active in the area of Research & Development and has a number of “firsts” to its credit like: 1. Fusing technology with the sweat of sagacity. Liberty was the first company commissioning a latest CAD/ CAM System. Liberty has developed a high quality Eva Compound for beach footwear. 6.RESEARCH & DEVELOPMENT: Our 2-way channel partners dig their feed back deep and constantly. Hammering String of creative workman at the manufacturing center to produce not just faceless shows dancing down conveyor belts but shoes with character. Die Less Leather cutting machine which is directly attached with its Design & Development Section for speedy process of development of new models of footwear. Liberty has developed new material TPE (Thermo-Plastic-Elastomer) for high quality formal footwear. So the centers have poled 53 years of the research and continuous flow of emotions to redefine the R & D center at Libertypuram. We call the process HUMANTECH and it priceless. .

We are fast building new brands and products. On an average 4000 new styles are developed every year out of which roughly 1200 styles are selected and introduced in the market in two seasons i.7. For us the future plans are not something that can be termed as crystal gazing but neatly enclosed ideas idea and deliverables in continuum. winter. DESIGN & DEVELOPMENT: Liberty has well established state of the art design centers which are constantly engaged in designing and developing latest trend setting footwear for the young fashions conscious Indian consumers. DISTRIBUTION NETWORK: We have distribution network rivals the human arterial system. spring / summer and fall. Thanks to the vision and drive of our corporate think tank. An reticulate network of retailer showrooms.e. improving the all times favorites and expending our marketing infrastructure and honing to our skills to further the delight of the consumer. With an over all 25% boom planned each year for the next 5 year you could says that India is only true blue footwear manufacturing multinational is just peaking over the edge. FINANCIAL If you think a company that has helped 50 million people think on their feet in style is big stuff. Liberty Management is very thin in size comparing with a huge work force in front line operation. and exclusive outlets with a reach like blue – green marine octopus a structured 2-way feeder-feed back system that both gives and receives an organization of our size would have gone out-of-orbit without a firm support system. we now have a sales network that brings the breath-taking world of super footwear right at your feet within . you have seen very little yet.

with it and futuristic every time you visit us. The currently exports about 25% of footwear production to Germany. With a turnover of Rs. Each outlet is estimated to see an investment of Rs. if you will.5 million.seconds. We do not want retail presence for name shake.its exclusive footwear showroom. Kualampur. “as opposed to the earlier model of expending retail outlets we plan to bring down the number of retailer from 5000 to 4000. LIBERTY PLANS TO EXPANDS GLOBAL PRESENCE Liberty group has also establish manufacturing plant in Uttrakhand state and opening 25 exclusive outlets across the country as well as in 7 overseas centers.7 Crores towards expending “Revolution” . Liberty plans to open super premium at Singapore. A virtual room service at zero cost. France.7. the envy of competition. The company has expended its retail presence in over 100 stores across small and big cities. We understand that a shoe for you is an extension of your personality. Columbo and Dubai . This year company will add 10 more stores to take it to 25. Italy. The company will invest Rs. The company has also entered the manufacturing of white ware segment of sanitary and bathroom products.500 crores the company is emerging as an multinational brands with about 350 Exclusive distributors all over the world. the ideas to have real brand presence”. STRENGTH: At Liberty we upgrade and re-engineer our design every 6 months so that you have something new. MORE STORES FROM LIBERTY: Liberty group is expecting to add Rs. A marketing system that we have conceived and created. Liberty is looking at introducing new design this season too. Our shoes are much more than just B. it is understandably. Dhaka. And for one who keeps moving onto to stables of desire . Witching leather work. United States and the Middle East.70 crores from its footwear retail business.E.

1 main G. All the machines are imported from Italy and Germany. road in Libertypuram. The building is of RC framed structure. Production of shoes as well as quality of shoes has been increased and problems of pasting.T. BUILDING: It mainly consists of eight huge halls meant for manufacturing operation facility. Kutail. sole cracking have been reduced substantially by this technology. cutting sections. PU Sole Section. The site is 15KM from Karnal and is well connected with major cities and has all basis infrastructure facilities. the design and finishing of building is among the best. The total area of the building is 170 lacks sq. raw material and finished goods storage. The site is around 115 KM from Delhi on national highway between Chandigarh and Delhi. Recently one new computerized machine has been purchased for cutting leather. LIBERTY SHOES LIMITED “AN INNER VIEW” LOCATION: The company has entered into a lease agreement for 410 cannals and 17 marlas (248500sq. It has also been imported from Italy .loaded with exciting world fashions trends we craft the dreams with the help of Capital Fashion Technologists shut away not in dream bars but with their heart minds on the pules of future fashion. Administrative Block etc. district Karnal.feet (approx) and total cost of building is around 550 lacks. yards) of land on national highway no. MACHINARY: Five (new technology) injection-moulding machines are being used by the company for production purpose. PVC Sole Section.

Value streams are standardized for most of the regularly produced articles. Logistics & supply chain. DNV is the Certifying agency and auditors of the QMS 5. 2. 1. state of the art production facility in India with following management systems and tools. Wastage Identification. Now the Group is in the process of integrating Lean Concept with PP Module of SAP for controlling the flow. and shop floors of the organization. LEAN awareness is existing in all production floors of the organisation. handling and disposal are documented and monitored by frequent internal audits. The impact of 5 S implementation is visible in all dept. Group is having an appointed MR exclusively for monitoring the Quality System. ISO 9001:2000 CERTIFICATION is awarded to QMS of one of its units and Group is in the process of getting for other units. It is rare to see such clean. 4. . a unique ERP Solution implemented for the first time in India in a Footwear Industry with all modules related with Finance. We may even consider these units are the model units for any Footwear Industry 3. 5 S Concept is introduced and in practice since 2001 and presently in matured stage.INNOVATIVE APPROACHES: Entire production units of Liberty are interlinked by SAP. WASTE MANAGEMENT SYSTEM is established in one of their unit and it is a pilot project. KAIZEN is implemented since 2000 and in practice throughout the organization.

Water wastage is almost –nil. Health and Environmental Standards. Liberty Units have got lot of incentives / discounts from Haryana State Electricity Board for maintaining maximum Power Factor. The recently released IS: 15298:2000 for Safety shoes is followed by Liberty and it is the first in Shoe Industry have applied for Certification to use ISI Mark. 9. In 80’s when Soviet Market was invaded by Indian Exporters. 2. SALAMANDER. Middle East. East African. WATER MANAGEMENT SYSTEM is existing in the group. Liberty was the Market Leader in USSR. 8. Liberty’s major operations are mainly with Europe. Liberty has more than 25 years of experience in Export Business and enjoying Status Holder status as “Recognized Export House” of India. This standard is monitored by Indo German Export Promotion Council of India.and water is re-cycled in most of their operations. Liberty is the Committee member for setting the standard for Safety Shoes. ISES-2000 norms are followed to ensure the best Social. JELA. 3. 4. DEICHMANN.6. 9. Liberty is having its own office in Russia and Hungary for more than 2 decades. . ROMIKA and USA brands like TODDWELSH are selling only Liberty Shoes under their brand umbrella. ENGERGY MANAGEMENT SYSTEM of Liberty is unique in Footwear Industry. Major brands of Europe. INTERNATIONAL EXPERIENCE: 1. South African countries and USA.

Our safety shoes are meeting all DIN / EN standards in respective segments. Safety Shoes are brought to Indian Market for the first time and an exclusive brand WARRIOR was launched by Liberty in Industrial Segment shoes. Liberty is the First Footwear Manufacturing facility in India awarded with the latest ISO 9001:2000 Certification. having SAP ERP with all modules related to Inward/Outward supply chain. Liberty is the only company in India having recognition/approval of SYMPATEX on Waterproofing. 6. SYMPATEX is a patented technology on Water Proofing recognized world wide. BIS Standard IS: 15298: 2000. 4. 5. PU technology was introduced to Government Sector. 7 The first and only footwear Industry in India. 3. Liberty has pioneered in bringing PU Technology to India. 2. Finance and Costing . Liberty Enterprises is the model unit for above Standard and complete testing facility is available only with Liberty in India after FDDI. Liberty has given a presentation on Footwear foot prints for the future in Asia Pacific Customer Conference 2000 organized by Huntsman Polyurethane at Singapore on this technology.CONTRIBUTION TO INDUSTRY: 1. Materials. Liberty has set the standard as member of the BIS Committee. applicable for Safety shoes is the Standard on which Liberty is producing Safety shoes for more than one decade.

Liberty has pioneered blend of NITRILE Rubber with PVC in 1996 to make it more versatile for cold countries usage. Liberty is expanding its operation by manufacturing non woven hags which are environment clean. .8. 9. 10. This material has better properties than PVC or TPR conventionally used for formal. Liberty has developed new material TPE (Thermo Plastic Elastomer) for high quality formal footwear.

gives training and employment after graduation in FDDI. This standard is being monitored by Indo German Export Promotion Project in India. 3. Liberty Footwear Training Institute formed by our Directors is developing the local public as technicians of Footwear Industry. 2. 4. Management of Liberty Sponsors the children of Liberty Employees for higher studies. . Social and Environmental Standard ISES-2000 is in practice with Liberty.SOCIAL CONTRIBUTION: 1. The products being used by Liberty are Eco-friendly and providing latest technology to Industry when Indian Markets related with Environment & Safety are not even aware about the new standards and technology.

D. 98. Liberty will endeavor to keep highly qualified employees by appropriate training and thus raise their morale & competence. Belgium (1988). • Worldwide Prestige Award (WPA)-2001. Liberty will strive to remain or become the technological as well as market leaders in footwear industry and leather product industry. .. International Award for Good Quality. Brussels. India’s apex body of leather products exporters.Gupta on 5th Feb. Leather Export Award for Government of India (1991-92). European Awards. Jakarta (1982).P. Haryana Government Export Award (1978-79). conferred is highest award the “DOYEN OF INDUSTRY” upon Mr.NATIONAL AND INTERNATIONAL AWARDS • • • • • • • • • Leather Export Promotion Merit Award (1975). Council of Leather Export (CLE). National Award for best Export of Leather Garments (1987-88). Paris (1987). International Asian Award. till 1982. Liberty will try to practice management of highest standard of competence & professionalism. Liberty wants to attain & maintain good relations between its union & management. National Productivity Award from president (1997). CORPORATE GOALS • • • • • • Liberty wants to develop a spirit of cooperation between individuals & group within the company. during the international leather fair held at Chennai. Liberty wants to be known for the quality for its products & services.


Sub Objective The study on Inventory is very important for a firm. The objectives of this study are as follows: • • • • • To determine the changes in the Inventory position of the company. To determine the absolute figures for the last two years . To determine the increase or decrease in Inventory level. To determine the various ratios for analyzing the Inventory level of the company. To spot out strengths & weakness of business.OBJECTIVE OF THE STUDY Main Objective The project is designed to give an overview of Inventory Management.


are 1. A firm neglecting the management of Inventories will be jeopardizing its long run profitability and may fail ultimately. The reduction in “excessive” inventories carries a favorable impact on a company’s profitability.e. which firms store as inventory in anticipation of need. all the functional areas. Inventories are approximately 60% of current assets in public Ltd. companies in India. Raw material 2.INTRODUCTION Inventories constitute the most significant part of current assets of a company like in India. . Finished Goods Inventory. Thus. Inventory management like the management of other current assets. finance. but differs from other current assets. marketing. production & purchasing are involved. The job of the financial manager is to reconcile the conflicting view points of the various functional areas regarding the appropriate inventory level in 0order to fulfill the over all objective of maximizing the owner’s wealth. Inventory is composed of assets that will sell or used in future in the normal course of business operations. i. should be related to the over-all objective of the firm. Work in progress 3. is current assets. Because only financial managers are not involved rather. It is possible for a company for a company to reduce its level of Inventories to a considerable degree. On an average. The assets.

lead time and the opportunity cost of funds tied up in inventory. the greater the opportunity cost of funds invested in inventory. The major risk is that the market value of specific inventories will be less than the value at which they were acquired. whether it be in technology or in consumer tastes. the production department may be able to deliver finish goods faster by producing a smaller run. there is trade off between the added cost involved in reducing the . once an order is placed.The EOQ model also can be useful to the finance manager in planning for inventory financing. so that capital may be allocated efficiently. These risks must be considered in determining the appropriate level of inventory the firm should carry. The finance manager is also concerned with the risk involved in carrying inventory. the major risks involved in carrying inventory. . the purchasing department may try to find new vendor that promise quick delivery . all other things held constant. in either case. the investment of funds in inventory is an important aspect of financial management. the lower the average lead time . A change in style may cause a retailer to sell goods at substantially reduced prices. the lower is the optimal level of average inventory and also the lower the optimal order quantity.or it may pressure existing vendor to deliver faster. The principle risk is that of fluctuations in market price. The greater the opportunity cost of funds invested in inventory. consequently the finance manager must be familiar with ways to control inventory effectively. Certain types of inventory are subject to obsolescence. the finance manager may try to effect policies that will reduce the average lead time required to receive inventory.lower is the safety stock needed and lower is the total investment in inventory. When demand or usage of inventory is uncertain. A change in technology may make an electronic component worthless. the greater is the inventory to reduce this lead time. all other things held constant.INVENTORY AND FINANCE MANAGER Although inventory management usually is not the direct operating responsibility of finance manager. The finance manager is perhaps the best person to make an objective analysis of the risks associated with the firms investment in inventories.

They represent products that need more work before they become finished products for sale. Stock of raw materials and work in progress facilitates production while stock of finished goods is required for smooth marketing operations. 3. Raw Material inventories are those units. There are three main purposes or motive: 1. 2. Transactions motive: It emphasizes the need to maintain inventories to facilitate smooth production & sales operations. Finished goods: These are completely manufactured products which are ready for sale. Speculative motive: It influences the decisions to increase or reduce inventory levels to take advantage of price fluctuations . Raw Material: Raw Material is those basic inputs that are converts into finished goods through manufacturing process. PURPOSE OF HOLDING INVENTORY A firm also needs to maintain inventories to reduce costs and ordering costs and avail quantity discounts. The various forms in which inventories exist in a manufacturing company are: 1. Precautionary motive: It necessitates holding of inventories to guard against the unpredictable changes in demand & supply force & other factors. 3. Work in progress: Work in progress inventories are semi-manufactured products.NATURE OF INVENTORY Inventory are stock of the company is manufacturing for sale and components that make up the product. 2. which will purchase & stored for future production.

To design proper organization for inventory management. To meet the demand of the product by efficiently organizing the firm’s production and sale operations. 5. To minimize losses through deterioration. . wastages & damages. 2. 8. To avoid both over-stock and under-stock of inventory. To facilitate furnishing of data for short –term & long-term planning & control of inventory.OBJECTIVES OF INVENTORY MANAGEMENT Inventory Management consist various counter-balancing parts: 1. 7. 4. 6. To minimize the firm’s investment in inventory. To eliminate duplications in ordering or replenishing stocks. 3. To ensure right quality goods at reasonable prices. pilferage.

To safe guard public interest. The following material pricing methods are generally used:  First in First out  Last in First out  Average Price Method (FIFO) (LIFO) Simple average method Weighted average method    Base Stock Method Market Price Method Standard Price Method . the Government of India has instituted statutory controls to prevent frequent change of material valuation method for at least three years.VALUATION OF INVENTORY The price of materials and income of a concern is directly proportional to each other. So it is necessary that a method of pricing materials should be such that it gives a realistic value stocks.

Thus Inventory. Purchasing 2. the sales rate will be higher than the production rate during the part of the year (peak season) and lower during the off-season. i. Selling BENEFITS IN PURCHASING If the purchasing of raw material and other goods is not tied to production/sales. a firm can purchase larger quantities than is warranted by usage in production or the sales level.e. This will lead to a decline in the cost of production. serves as a hedge against price increases as well as shortages of raw materials. BENEFITS IN PRODUCTION Finished goods inventor serves to uncouple production and sale. The basic function of Inventory is to act as a buffer to decouple or uncouple the various activities of a firm so that all do not have to be pursued at exactly the same rate The key activities are: 1. This would be of special advantage to firms with a seasonal sales pattern. a firm can purchase. Production 3. In the first place. In the second. firms can purchase goods before anticipated or announced price increase.BENEFITS OF HOLDING INVENTORY The major benefits of holding Inventory are the basic functions which are of crucial important in firm’s production & marketing strategies. The choice before the firm is either to produce at a level to meet the actual demand. several advantages would become available. This is highly desirable inventory strategy. In their case. This enables production at a rate different from that sale. That is production can be carried on at a higher or lower than the sales rate. In .

There will be a lag depending upon the production process. the level of sales will depend upon the level of current production.brief. For one thing. if there are no inventories of finished goods. . BENEFITS IN SALES The maintenance of inventory also helps a firm to enhance its sales effort. If the firm has inventory. since inventory permits least cost production scheduling. actual sales will not have to depend on lengthy manufacturing process. Production can be carried on more efficiently. A firm will not be able to meet demand instantaneously.

Carrying costs . is has to decide lots in which it has to be purchased on each replenish. These problem. This increases the level of investment and makes the firm unprofitable. In managing inventories. Inefficient control results in unbalanced inventory and inflexibility – the firm may sometimes run out of the stock and sometimes may pile up unnecessary stocks. ECONOMIC ORDER QUANTITY One of the major inventory management problem is to be resolved is how much inventory should be added when inventory is replenished. the issue is how much production to schedule. Efficiently controlled inventories make the firm flexible. answers should be sought to the following two questions: 1. How much should be ordered? 2. and the task of the firm is to determine the optimum or economic order quantity. wealth maximization principle. To manage inventories efficiency. the firm’s objective should be in consonance with the shareholders. If the firm is planning a production run. When it should be ordered? The first questions. when to order arises because of uncertainty and is problem of determining the reorder point. how much to order relates to the problem of determining economic order quantity (EOQ). the firm should determine the optimum level inventory. If the firm is buying raw materials. are called order quantity problems. and is answered with an analysis of costs of maintaining certain level of inventories.INVENTORY CONTROL Effective inventory management requires an effective control system for the inventories. Ordering costs 2. The second question. Determining an optimum level of inventory level involves two types of costs: 1. To achieve this.

2AO EOQ = Where.(1) ORDERING COST This category of cost is associated with the acquisition or ordering of inventory. We can follow three approaches – the trail and error approach. The economic size of inventory would thus depend on trade-off between carrying costs and ordering costs. Firms have to place orders with suppliers to replenish inventory of raw material. This behavior is contrary to that of ordering costs which decline with increase in size of inventory.2 Receiving.1 Preparing a purchase order or requisition form 1. (2)CARRYING COST Costs incurred for maintaining a given level of inventory are called Carrying costs. Deterioration and Obsolescence. A is annual requirement. the higher the firm’s ordering costs. The optimum inventory size is commonly referred to as economic order quantity. C . It is that order size at which annual total costs of ordering and holding are the. On the other hand. And C is Carrying cost. Included in the ordering costs are involved in 1. O is Ordering cost. The expenses involved are referred to as ordering costs. Insurance. ordering costs decrease with increasing size of inventory. there will be few orders placed and Ordering costs will be relatively small. minimum. They include: Storage. if the firms maintain large inventory levels. Carrying costs vary with inventory size. the formula approach and the graphic approach – to determine the economic order quantity (EOQ). inspection and recording the goods received Ordering costs increase with the number of orders. thus more frequently inventory is acquired. Thus. taxes.

Lead time is the time normally taken in replenishing inventory after the order has been placed. (b) average usage. Similarly. To guard this problem. the firm can face a problem of stock-out which can prove to be costly for the firm. The demand for material may fluctuate from day to day or from week to week. That is: Re-order point= Lead Time* Average usage. If the actual usage increases or the delivery of inventory is delayed. This is a problem of determining the re-order point. the actual delivery time may be different from the normal lead time. we should know: (a) Lead time. yet the answer should be sought to the second problem. Under such a situation. how much to order is solved by determining the economic order quantity. SAFETY STOCK It is difficult to predict usage and lead time accurately. when to order. re-order point is simply that inventory level which will be maintain for consumption during the lead time.RE-ORDER POINT The problem. By certainty we mean that usage and lead time do not fluctuate. the firm may maintain a safetystock – some minimum or buffer inventory as cushion against expected increased usage and delay in delivery time. The re-order point is that inventory level at which an order should be placed to replenish the inventory. . and (c) economic order quantity. To determine the re-order point under certainty.

2. This analytical approach is called ABC analysis and tends to measure the significance of each item of inventories in terms of its value.SELECTIVE INVENTORY CONTROL ABC ANALYSIS Usually a firm has to maintain several types of inventories. The firm should pay maximum attention to those items whose value is the highest. B and C 6. 5. Determine the total value of each item by multiplying the expected units by its unit’s price. It is not desirable to keep the same degree of control on all of the items. this approach is also known as proportional value analysis (PVA). OF VALUE OF ITEMS . CLASS NO. The data in the following table illustrate the ABC analysis. ‘C items’ represent relatively least value and would be under simple control. The following steps are involved in implementing the ABC analysis: 1. The firm should. Combine items on the basis of their relative value to form three categories – A. Classify the items of inventories. The high value items are classified as ‘An item’ and would be under the tightest control. ‘B items’ fall in between these two categories and require reasonable attention of management. classify inventories to identify which items should receive the most effort in controlling. therefore. determining the expected use in units and the price per unit for each item. The ABC analysis concentrates on important items is also known as control by importance and exception (CIE). Compute the ratios of number of units of each item to total units of all items and the ration of total value of each item to total value of all items. As the items are classified in the importance of their relative. 3. Rank the items in accordance with the total value. 4. giving first rank to the item with highest total value and so on. The firm should be selective in its approach to control investment in various types of inventories.

A B C ITEMS% 15 30 55 % 70 20 10 .


in the sense that these items should not be kept idle because these items need lot of funds.There are three categories of items in abc analysis → category A: items of higher value and importance. MATERIAL MANAGEMENT DEPARTMENT AT LIBERTY.INVENTORY MANAGEMENT AT LIBERTY Every industry needs raw material search. LIBERTY also does this raw material search for finding cheaper source of raw material.They keep only that much stock which is required immediately and equal to that of lead time. LIBERTY always monitor A category items. LIBERTY does this to find → the nearest as footwear industry. LIBERTY works on ABC such analysis for fund management.they are very careful for A category item. . → category C: items of lesser value and importance. → category B: items of medium value and importance. → to reduce lead time.So.

4. the material is sent to stores for Quality Control and the invoices are send to computer section of material management department. Then quality and quantity is being checked in the stores. ISSUE OF MATERIAL TO CONVEYER On receipt of material required slip from production planning and control department the stores issue and send the material to different conveyor as mention on the required slip . 2. 5. 3.they check their stock and adjust that in available stock and issue the purchase order of the balance requirement to the predetermined and predecided suppliers.1.the invoices are entered in DMR (daily material register) → From here. Now both the departments function primarily or side by side. On the basis of that requirement. On receipt of material from the supplier. The invoices are being recived in SAP. the quality reports are send to account department by quality control department for proper handling of bills. After quality control the material is given to the store keeper for proper storage and if there is any deviation either in quality or quantity of material than. Material management department at LIBERTY receives purchase requisition Production Planning and Control Department.

PROCESS CYCLE Manufacturing processs .

Stuck on / Lasting Process. laminated cloth/synthetic material is cut on the cutting machines according to required size of the uppers. 2. then these cut compound of the uppers undergo for stitching process where the required components are stitched together to make the upper. 3. In the process PVC granules are used as raw material for sole making which get stucked to the upper with the help of injecti . NON LEATHER SHOES:Non-Leather Shoe Uppers: In non leather upper making process. EVA Injection Moulding Process. Non-Leather Shoe-Soling / Injection Moulding:- The non-leather shoe upper undergo a process known as the “ PVC INJECTION MOULDING PROCESS ” under which upper is tied upon the last which is mounted on the machine according to the size roll.  Soling (complete shoe). PVC Injection Moulding Process.  Finishing & packing. The manufacturing process can be divided into the following: Making of shoe.The company has three kinds of production lines:1.

sandals represent the most advanced step in the technology for a market . Upper is lasted on the shoe last according to the size roll with the help of machines. FINISHING AND PACKING:Both Leather and Non-Leather shoe are given the required finished touches by putting insole. Thereafter sole according to the upper size is taken and they get stucked together with the help of pasting process.LEATHER SHOES:Leather Shoe Upper:In leather shoe upper making process leather is cut by hand or on the cutting machines according to the required size of uppers. Leather Shoe Soling / Stuck-On Process:In stuck on process .After skiving and folding these components are assembled together with the help of stitching machines as per the type of upper required. After completing the sole attachment . lasts are removed and then the shoe are finished with the help of trimming machines and stamping machines. TPR . EVA Injected range of slippers. Machines cutting process is based on dyes which are prepared separately for each model. padding. LEATHER etc. laces etc . are packed in boxes dispatch EVA INJECTION MOULDING PROCESS The raw material used for the process is EVA( ethyl vinyl acetate ) granules which are fed into the barrel with the help of hoppers ( suction device ). . a paste of the granules is formed by heating and then this paste is injected into the moulds as per shape and size of the required footwear . shoe is made by readymade sole which can be of PU . EVA . After entering into the barrel . Cutting by hand is on the basis of the pattern to be specified for each model of the uppers. . tissue paper etc… and after attaching tags.

T. Laminated cloth (EVA lycra) 17. Laminated cloth (mesh) 14. Toe puff sheet 7.P counter sheet 9. Laminated cloth (canvas) 16. Silicon spray 11. Leather lining 20. Goat skin 4. Heavy nylex black 10. Cloth strobe 2. Laminated cloth (RIB) 15. Laminated cloth PVC lining) 18. Cow Venus black 6. Rubber . Laminated cloth (skin fit) 13. Softy (cow leather) 5. Laminated cloth (rexine) 12. Fleece lining 22.U 8. Camarilla lining 21.RAW MATERIAL USED: CUTTING MATERIAL 1. Leather 19. Padded foam 3. Foam P.

Silica gel blue 7. Plastic heel 15. Label printed stock. Tape intake (eyelet tape) 4. Hologram genuine 14. Tissue paper white/poster paper 8.Closing material: 1. Eyelet brass 5. Carton 11. Adhesive rubber latex 10. Adhesive sticker pictogram 5. Adhesive rubber solution 7. Boxes 2. Tape cotton 11. Binding nylon 8. Shoe lift 3. Marketing bag corporate small/non woven 4. Hologram liberty footwear 6. Tag card 9. Carton label 12. Label 9. Piping polyester PACKING MATERIAL: 1. Thread 2. Tag pin 10. Tongue 3. Price stickers 13. glider black/red. Adhesive neufix 6. .

PVC Compound 2. EVA Compound 3. PVC Master batch 4. Sole INJECTION MATERIAL: 1.U 107 2. Adhesive nefix 3. EVA Master batch . Adhesive P.LASTING MATERIAL: 1. EVA Sole 4. EVA Sheet 5.

02 0.36 0 0.47 0.05 0.99 0.11 0.13 2.43 0.39 0 0.02 0.13 2.3 0.05 0 0.11 0.26 3.13 2.54 APRIL (crores) 0.13 2.04 0 0.24 3.04 0 0.11 0.1 0.14 3.14 2.29 0 0.28 0 0.58 0.19 0.7 JUNE (crores) 0.05 0 0.52 0 0.11 0.28 3.28 0 0.34 0.35 0.54 0 0.59 0.04 0 0.01 0.RAW MATERIAL AT LIBERTY JAN (crores) 0.27 3.11 0.82 MARCH (crores) 0.37 4.36 0.31 4.6 0.72 MAY (crores) 0.06 0.76 VALUATION CLASS Raw material & comp-IMP Raw material & comp-IND Mfd EVA soles Mfd PU soles Mfd PVC soles Trd PU soles-IND Trd PVC soles-IND Trd PU soles-IMP Packing materials-IMP Packing materials-IND TOTAL (RAW MATERIAL) WORK IN PROGRESS AT LIBERTY .04 0 0.91 FEB (crores) 0.


Research involves gathering new data for primary of first hand sources or using existing data for new purposes. Some of the characteristics of research methodology are as follows: 1. Research is more systematic activity directed towards the discovery and development of organized body of knowledge. Research strives to be objective and logical applying every possible test to validate the proceed are employed the data collection and conclusion research. It may attempt to answer a question or determine the relation between two or more variables.Research is an important pre-requisite for a dynamic organization to be précised. Research is directed towards a solution of problem. Research is based on observable experience or empirical evidence. STEPS OF METHODOLOGY . 2. 4. 3.


ORGANISING THE DATA The information / data collected during data process are organizing and presented in a comprehensible sequence to make the understandable. thus obtained is then edited. the researches then has to proceed towards conclusions by logical inferences. Secondary Method 2. tables. and diagrams etc. Primary Method The primary data were collected from asking many individuals. PRESENTATION OF DATA After organizing the data . employee of the company. These are presented in different modes like charts. The data. it is ready for presentation. need of working capital in Liberty Shoes Ltd. Primary Method Secondary Method The methodology followed in conducting the study is to collect data regarding footwear production. . the main objective of presentation is to put collected data into a easy reliable form. working capital and its management. ANALYSIS OF DATA After organizing and presenting the data.There are two methods of collection of data which are as follows:1. . classified and put in a tabulated form to make it understandable. They provide me relevant information for completing my study. The facts & data were taken from magazines and annual report of company.

Interpretation means to bring out meaning of data & to convert mere data into information. INTERPRETATION Interpretation is the last and main step of research methodology. Without interpretation research study cant be completed. After analysis the data. Applying analytical methods to manipulate the data so that their inter relationship and quantitative meaning become evident. various conclusion are found out on the basis of logical inferences. 2. By bringing raw data to measured data. Summarizing the data 3.The whole data is then analyzed: 1. .

38. 2.6 0.58.37. The current ratio has increased from 1.4 0.78 between the year 2004-2005 and 2005-2006.2 0 2005-2006 Current Assets Current Liabilities Current Ratio 2006-2007 2007-2008 INTERPRETATION 1 0.8 0.1 CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILTIES YEAR Current Assets Current Liabilities 2005-2006 1.6 1.20.788 1.154 1.4 1. Then it decreased to 1. IDEAL CURRENT RATIO IS 2: 75.438 1. 3.98. 1.8 AND INTERPRETATION 1.2 QUICK RATIO = QUICK ASSETS/CURRENT LIABILITIES .78.31 2007-2008 2006-2007 1.36 Current Ratio 2 1.LIQUIDITY RATIOS 1.193 1.47 to 1.81.36 in the year 2007-2008.152 1.59. This shows that the short term liquidity of the company is not good.31 in the year 2006-2007 and then increased 1.

The quick ratio of the company has increased from 0.085 1 2007-2008 1.6 0.788 0.3 CASH RATIO = CASH AND BANK/CURRENT LIABILITIES YEAR 2005-2006 2006-2007 2007-2008 .07 2006-2007 1.58.2 0 2005-2006 Quick Assets Current Liabilities Quick Ratio 2006-2007 2007-2008 INTERPRETATION 1.99. Then decreased to 0. This means that the company cannot meet its short term obligations. between the year 2004-2005 and 2005-2006.8 0.94 to1.YEAR Quick Assets Current Liabilities 2005-2006 81.438 1.812 75.79 in the year 2006-2007 and 2007-2008.19. 3.76 and0.04.29. 1.32.837 1.98.154 0.79 Quick Ratio 1. THE IDEAL QUICK RATIO IS 1:1 2.4 0.

92.32.561 0.Cash Current Liabilities 2.98.40. The cash ratio has first increased from 0.037 4.03 Cash Current Liabilities Cash Ratio 2005-2006 2006-2007 2007-2008 INTERPRETATION 1.034 0.032 0.031 0. This reveals that the cash position of the company is not sound.033 0.58.034 Cash Ratio 0.036 0.777 4. 2.038 0.039 0. ACTIVITY RATIOS INVENTORY TURNOVER RATIO = NET SALES / INVENTORY .483 1.039 between the year 20042005 and 2005-2006 and then decreased in the year 2006-2007 and then increased by 0.035 0.78.438 0.788 0.62. 2.001 in 2007-2008.26.032 to 0.

1 DEBTORS TURNOVER RATIO = SALES/DEBTORS YEAR Sales Debtors 2005-2006 Net Sales Inventory 2005-2006 2.474 to 3.38 in 2007-2008.269 72.993 48.12 2006-2007 2.5 3 2.34.907 4 3.035 4.993 53.21.315 3.89.5 0 Net Sales Inventory Inventory Turnover Ratio 2005-2006 2006-2007 2007-2008 INTERPRETATION 1.56 Debtors .11.64. 2.5 1 0.97.48. This shows that the company is somehow efficient in generating the inventory into sales.73.12 2007-2008 2.57.57 2006-2007 2.34.817 4.21.5 2 72. The inventory turnover ratio has decreased from 4.29 2007-2008 2.38 Inventory Turnover Ratio 4.18.12 between the years 2004-2005 and 2006-2007and increased to 3.269 76.37. 2.983

The debtor turnover ratio has first increased from 4.12 to 4.Turnover Ratio 5 4 3 2 1 0 20052006 20062007 2007-2008 Sales Debtors Debtors Turnover Ratio INTERPRETATION 1.57 between the year 2004-2005 and 2005-2006 and then decreased in the year 2006-2007 and then increased in 2007-2008. AVERAGE COLLECTION PERIOD = NUMBER OF WORKING DAYS / DEBTORS TURNOVER RATIO YEAR Number of Working 2005-2006 365 2006-2007 365 2007-2008 365 . 2. This shows that the debtor management system is try to maintain their position. 2007-2008 2.907 47.Days Debtors Ratio Turnover 4.22.57 80 days 2006-2007 2. 2.97.269 43.37.56 102 days Average Collection Period INTERPRETATION WORKING CAPITAL TURNOVER RATIO = SALES / NET WORKING CAPITAL YEAR Sales Net Capital Working 2005-2006 2.17.29 110 days 3.97. The average collection period has decreased from 89 days to 80 days between the year 2004-2005 and 2005-2006 and then increased in the year 2006-2007 and again decreased in 2007-2008. More the average collection period less efficient is the debtor management system.993 59.765 .

79 Operating Profit .17 2007-2008 32. The working capital turnover ratio has first decreased from 5.48.24 2006-2007 13.62.54. 3.Working Capital Turnover Ratio 6 5 4 3 2 1 0 2005-2006 Sales Net Working Capital Working Capital Turnover Ratio 2006-2007 2007-2008 INTERPRETATION 1.48.73 between the year 2004-2005 and 2005-2006 and then increased to 5.50 5.993 14.37.163 2.907 12.73 5. PROFITABILITY RATIOS OPERATING PROFIT RATIO = OPERATING PROFIT X 100 SALES YEAR Operating Profit Sales 2005-2006 31.57.32 to 3.549 2.99.09 in the year 2007-2008.662 2.50 in the year 2006-2007 and then decreased by 0.11.

94.79% in the year 2006-2007 and 2007-2008. NET PROFIT RATIO = NET PROFIT AFTER TAX X 100 NET SALES YEAR Net Tax Profit After 2005-2006 18.49.555 2007-2008 16.514 2006-2007 17.5 13 12. This shows that the operating cost of the company has increased from 20042005 to 2007-2008.05.5 12 2005-2006 2006-2007 2007-2008 INTERPRETATION 1.28.611 .13.5 14 13.Ratio 14.01. 2.24% in the year 2005-2006 and then decreases to 13. The operating profit first increases to 14.17% and 12.

89.03 to 8.48.36 in the year 2004-2005 and 2005-2006 and then decreases to 7.16 2.11.21.Net Sales Net Profit Ratio 10 8 6 4 2 0 2005-2006 2.36 2.37. This reveals that the efficiency in manufacturing.269 7.907 6. The net profit ratio first increases from 5.34.57. 2.22 Net Profit After Tax Net Sales Net Profit Ratio 2006-2007 2007-2008 INTERPRETATION 1.97. LONG TERM SOLVENCY RATIOS DEBT EQUITY RATIO = OUTSIDER’S FUNDS/SHAREHOLDER’S FUNDS YEAR 2005-2006 2006-2007 2007-2008 .16 in the year 2006-2007 and too decreasing in 2007-2008.54.993 8. 4. administering and selling the products is decreasing. 0.4 0.80.285 3.396 0.73.35 0.25 0.70.054 2007-2008 24.15 0.32 38.752 .21.Outsider’s funds 4 Shareholder’s funds 25. INTEREST RATIO NET PROFIT BEFORE INTEREST AND TAXES FIXED INTEREST CHARGES COVERAGE = YEAR Net profit before interest taxes and 2005-2006 27.44.3 0.605 0.92.05 0 2005-2006 2006-2007 2007-2008 Outsider’s funds Shareholder’s funds Debt Equity Ratio INTERPRETATION 1.29 Debt Ratio Equity 2006-2007 0. This shows greater flexibility in the company’s operation.2 0. The debt equity ratio is decreasing which means that the company’s dependence on the external debt is decreasing.63.65.269 98.14.52 81.06. 2.39 1.57.96.

A low ratio indicates excessive use of debt.83 2005-2006 2006-2007 2007-2008 INTERPRETATION 1. The interest coverage ratio first increases between the year 2004-2005 and 2005-2006 and then decreases in the year 2006-2007 and in 2007-2008.18.74.Interest Interest Coverage Ratio 6 5 4 3 2 1 0 4.093 5. 2.867 8.945 1.56. .02 13.68.


should be clearly made by the company and followed in spirit of the world. 3. Quality control operations should be modernized effectively as people are more educated and give more preference to quality. In India as most of the population is under low-income group.SUGGESTIONS AND RECOMMENDATIONS FOR INDIAN FOOTWEAR INDUSTERY 1. 4. which should be available only in exclusive showrooms to attract the crowd there. 8. they wear unbranded or local brand shoes. So there should be policy for exclusive showroom. There should be some special brands. So the company which can capture this income group especially living in villages and small towns will be the winner. As the exclusive showroom play an important role in making and marking the image of company. 7. New trend of naming programs before the actual name of programs give more insertion in the minds of people as there was performance on Zee T. 9. So the big companies should try to internationalize their products and image and should give a psychological feeling of being a universal brand. 6. Television has become the most effective mode of advertising.V called LIBERTY PUBLIC DEMAND. their features as well as new policies. Regular meeting should be organized by the companies to educate the showroom owners regarding new innovation. . 5. 2. Showroom owners tend to heavily tend to heavily depend on the brand image rather than they’re own skills and knowledge regarding product. There should be no bargain with the quality of the product. Claim policy regarding replacement etc.


The company should allow at the most two exclusive showrooms in one city.STEPS TO BE TAKEN BY LIBERTY 1. as ladies every time demand something new. 3. 9. which is out of reach of common man. It is suggested that an economical range of footwear should also be introduced to capture the lowincome group people who account for most of the population in villages & small towns. That too should be atleast 2—3 K. Most of customers felt Liberty as a premium product company (which is true to much extent).M apart to attract customers from all the localities. . 6. Some special planning on appointment of dealers should be there to avoid the complications. 8. New designs and colours should be introduced in Ladies section. A Company persons should regularly visit exclusive showrooms and listen to the problems and find solution to them as is done by Bata Company. The placement of defected pairs should be paid more attention so as to remove dissatisfaction among the exclusive showroom owners. Companies should control. 4. review and improve their discount policy so as to improve company’s image. 7. 2. More attention should be paid to customer’s complaints and efforts should be made to remove them. 5. Trough inspection of stock should be done to avoid mixing of inferior quality stock with fresh stock. which is send to dealers.


There are restrictions not to visit some specific areas. 1. 3. The concered executives were having very busy schedule. . 4.LIMITATIONS Although every effort have been made to collect the relevant information through the source available. The company on account of confidential reports has not disclosed some figures 5. Estimates are based upon predictions. 2. The time duration could not provide ample opportunity to study every detail of management in the company. still some relevant information could not be gathered.


• KOthari.liberyshoes. New Delhi.R.libertyfreedom. Ed. New Age International (P) Limited.. • Gupta. Publishers. MANUAL • Annual Reports WEBSITES • • www. VIkas Publishing House Private www. “Management Accounting”.. New Delhi.. 2007. Ed. Ed.2007. Kalyani Publishers. “Financial Management”. I. C.M. Shashi K. New Delhi. “Research Methodology”..BIBLIOGRAPHY BOOKS • .2007.



BALANCE SHEET AS AT 31st MARCH,2006 PARTICULARS FUNDS EMPLOYED Shareholder's Funds Share Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Deferred Tax Laibility APPLICATIONS OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Add: Capital Work in Progress Investments CURRENT ASSETS,LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balance Loans and Advances Less: Current Liabilities Provisions Net Current Assets 53,64,96,035 48,33,85,817 2,94,45,561 30,01,48,434 1,34,94,75,847 22,26,20,721 7,36,57,317 1,05,31,97,809 1,61,15,10,286 79,70,30,417 31,21,63,209 48,48,67,208 91,82,688 49,40,49,896 6,42,62,581 7,62,83,137 1,61,15,10,286 48,81,18,223 23,03,68,701 71,84,86,924 17,04,00,000 64,63,40,225 81,67,40,225

PROFIT AND LOSS ACCOUNT For the year ended 31st March, 2006 (Amount in Rs.) PARTICULARS INCOME SALES less: Excise Duty Other Income Increase/ (Decrease) in Stocks EXPENDITURE Raw Material Consumed and Finished Goods Purchased Manufacturing Expenses Payments and Benefits to Employees Administration, Selling and Miscellaneous Expenses Interest & Financial Charges Excise Duty Depreciation Profit before tax Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax Profit before tax add/(less): Taxation adjustments of previous years(net) Earlier year adjustment Net Profit for the year Add: Opening balance Net Profit available for appropriations APPROPRIATIONS Tranfer to General Reserve Interim Dividend Tax on Dividend Balance carried over to Balance Sheet Earning Per Share of Rs.10/- each

2,21,11,97,993 16,23,68,219 2,04,88,29,774 1,11,11,202 6,49,73,637 96,67,26,712 19,95,13,409 19,91,55,747 43,20,32,918 4,74,18,093 15,12,462 3,99,98,538


1,88,63,57,879 23,85,56,734 4,88,26,320 35,05,000 12,96,900 18,49,28,514 42,01,294 54,964 18,91,84,772 1,69,31,283 20,61,16,055 6,00,00,000 2,53,50,000 35,55,338 11,72,10,717 12.88


PARTICULARS FUNDS EMPLOYED Shareholder's Funds Share Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Deferred Tax Laibility APPLICATIONS OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Add: Capital Work in Progress Investments CURRENT ASSETS,LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balance Loans and Advances Less: Current Liabilities Provisions Net Current Assets 76,17,38,315 72,08,94,474 4,62,40,483 28,31,64,880 1,81,20,38,152 43,53,53,212 5,20,13,500 1,32,46,71,440 2,34,11,55,623 1,10,55,30,324 35,54,78,429 75,00,51,895 8,14,32,312 83,14,84,207 18,49,99,976 7,30,34,307 2,34,11,55,623 1,04,03,01,231 23,92,47,480 1,27,95,48,711 17,04,00,000 81,81,72,605 98,85,72,605


For the year ended 31st March, 2007 (Amount in Rs.) PARTICULARS INCOME SALES less: Excise Duty Other Income Increase/ (Decrease) in Stocks EXPENDITURE Raw Material Consumed and Finished Goods Purchased Manufacturing Expenses Payments and Benefits to Employees Administration, Selling and Miscellaneous Expenses Interest & Financial Charges Excise Duty Depreciation Profit before tax Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax Profit after tax add/(less): Taxation adjustments of previous years(net) Earlier year adjustment Net Profit for the year Add: Opening balance Net Profit available for appropriations APPROPRIATIONS Tranfer to General Reserve Balance carried over to Balance Sheet Earning Per Share of Rs.10/- each 6,00,00,000 22,90,43,097 9.99 2,46,36,260 35,34,300 32,48,830 17,01,94,554 8,97,143 7,40,683 17,18,32,380 11,72,10,717 28,90,43,097 1,21,22,49,787 20,19,18,212 21,23,26,510 47,36,32,514 8,81,68,867 25,16,943 4,63,34,609 2,24,43,47,442 19,51,16,284 2,37,54,48,269 15,39,92,692 2,22,14,55,577 1,67,28,098 20,12,80,051 2,43,94,63,726


01.18.151 72.325 1.716 1.54.285 PROFIT AND LOSS ACCOUNT . 27.28.45.LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balance Loans and Advances Less: Current Liabilities Provisions Net Current Assets 4.PARTICULARS FUNDS EMPLOYED Shareholder's Funds Share Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Deferred Tax Laibility APPLICATIONS OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Add: Capital Work in Progress Investments CURRENT ASSETS.611 1.087 2.360 87.77.737 2.89.799 85.72.873 1.000 97.589 42.03.812 7.712 1.

For the year ended 31st March.each 9.000 328659777 4.42 6.00.00.) PARTICULARS INCOME SALES less: Excise Duty Other Income Increase/ (Decrease) in Stocks EXPENDITURE Raw Material Consumed and Finished Goods Purchased Manufacturing Expenses Payments and Benefits to Employees Administration.387.989 159616680 229043097 388659777 -18317902 3049250 -2158570 160513611 -5284920 18589712 1319594764 189559879 226092498 509261505 133456945 -4362344 63796894 2437400141 161676101 2578934907 100427026 2478507881 50711294 69857067 2599076242 .10/. 2008 (Amount in Rs. Selling and Miscellaneous Expenses Interest & Financial Charges Excise Duty Depreciation Profit before tax Provision for Taxation Current Tax MAT Credit Entitlement Fringe Benefit Tax Deferred Tax Profit after tax add/(less): Taxation adjustments of previous years(net) Earlier year adjustment Net Profit for the year Add: Opening balance Net Profit available for appropriations APPROPRIATIONS Tranfer to General Reserve Balance carried over to Balance Sheet Earning Per Share of Rs.

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