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INDEX TABLE

SL.NO CONTENTS
PAGE NO. 2 TO 6

1  2   3 

PART – I
EXECUTIVE SUMMARY

PART – II
INTRODUCTION TO THE STUDY INDUSTRY PROFILE

7 TO 14

PART - III
INTRODUCTION OF COMPANY

1 TO 3

4

PART - IV
  RESEARCH METHDOLOGY OB!ECTIVES OF THE STUDY

36 TO 3"

6  7  &    "

PART - V
#OR$ING CAPITAL MANAGEMENT

4% TO 66

PART - VI
DATA ANALYSIS AND INTERPRETATION

67 TO &

PART – VII
FINDINGS SUGGESTIONS ' CONCLUSIONS.

&6 TO &"

ANNEXURE
"% TO "2

 FINANCIAL STATEMENT.  BIBILOGROPHY.

PART - I
EXECUTIVE EXECUTIVESUMMARY SUMMARY
INDUSTRY PROFILE. INDUSTRY PROFILE. COMPANY PROFILE. COMPANY PROFILE. NEED FOR THE STUDY. NEED FOR THE STUDY. OB!ECTIVES OF THE STUDY. OB!ECTIVES OF THE STUDY. SCOPE OF THE STUDY. SCOPE OF THE STUDY. LIMITATIONS OF THE STUDY. LIMITATIONS OF THE STUDY. METHODOLOGY. METHODOLOGY. FINDINGS. FINDINGS. SUGGESTIONS. SUGGESTIONS. CONCLUSION. CONCLUSION.

EXECUTIVE SUMMARY

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As a part of curriculum, every student studying MBA has to undertake a project on a particular subject assigned to him/her. Accordingly I have been assigned the project work on the study of working capital management in Bahety "andeli. "ecisions relating to working capital # urrent assets$ urrent liabilities% and short term financing are known as working capital management. It involves the relationship between a firm&s short$term assets and its short term liabilities. 'he goal of working capital management is to ensure that the firm is able to continue its operation and that it has sufficient cash flow to satisfy both maturing short term debt and upcoming operational e(penses. )orking capital is used in B M private ltd., for the following purpose*$ +aw material, work in progress, finished goods, inventories, sundry debtors, and day to day cash re,uirements. 'he B M private ltd., keep certain funds which is automatically available to finance the current assets re,uirements. 'he various information regarding -)orking apital Management. such as classification, determinants, sources have been discussed relating to B M private ltd., +atio Analysis has been arried out using /inancial Information for last five accounting years i.e. from 0112 to 0131 +atios like )orking capital 'urnover +atio, 4uick +atio, urrent +atio, Inventory 'urnover +atio, "ebtor 'urnover +atio, reditors turnover rario have also been analy5ed. A 6tatement of analy5ed. At B M private ltd., the working capital management has shown increase in the period of study. 'his shows working capital is managed effectively and all the other departments are working in perfect co$ordination to ensure the progress of B M private ltd., but I have given some 6uggestions ! onclusions on the basis of my 7roject 6tudy. INDUSTRIAL PROFILE hanges in )orking apital has also been hemicals ! Minerals pvt ltd

 'o study the li.uidity position through various working capital related ratios.'he chemical industry is one of the oldest domestic industries in India. 'he chemical industry currently produces nearly :1. drugs and pharmaceuticals. dyes and pigments. labors and good environment and materials. Its main product is Aluminium 6ulphate.  'o make suggestions based on the finding of the study. SCOPE OF THE STUDY . 'he industry covers a large spectrum of categories including inorganic and organic chemicals. =n the outskirts of "andeli city which is enjoying all the re.imited is a small$scale industry. NEED FOR THE STUDY • 'he study has been conducted for gaining practical knowledge about )orking apital Management ! activities of Bahety hemicals ! Minerals pvt ltd. • 'he study is undertaken as a part of the MBA curriculum from 13 >une 0131 to <3st >uly 0131 in the form of summer in plant training for the fulfillment of the re. COMPANY PROFILE Bahety chemicals and Minerals #7vt% . OB!ECTIVES OF THE STUDY  'o study the sources and uses of the working capital. 'he company purchased and constructed building in the year 388<. Ambewadi. transport. plastics and petrochemicals..uirement of MBA degree. ash management. power. It started production in the year 3882. contributing significantly to both the industrial and economic growth of the country since it achieved independence in 389:. Inventory management.111 commercial products.uired facilities like water. It is a private company situated in the Industrial estate. fine and specialty chemicals. pesticides and agrochemicals and fertili5ers.  'o study the working capital components such as receivables accounts.

S+:.'he scope of the study is identified after and during the study is conducted.).ast five years financial statements. P6(=.imited interaction with the concerned heads due to their busy schedule.). ♦ 'he findings of the study are based on the information retrieved by the selected unit. . profit and loss account of ? year period from 0112$0131 ! some more information collected from internet and te(t sources. Mahesh @adkarni and other staff members. 6ampling unit 6ampling 6i5e * /inancial 6tatements.e. * . Mr.3 'he major source of data for this project was collected through annual reports. /urther the study is based on last ? years Annual +eports of Bahety hemicals ! minerals pvt ltd.*/ U/+13 M6$A(cel has been used for calculations.. 'he study of working capital is based on tools like +atio Analysis. METHDOLOGY In preparing of this project the information collected from the following sources.62 1. SAMPLING DESIGN 1 3 0 T. LIMITATIONS OF THE STUDY ♦ 'he study duration #summer in plant% is short. ♦ 'he analysis is limited to just five years of data study #from year 0112 to year 0131% for financial analysis.81. 6tatement of changes in working capital. ♦ .62 1..3 'he 7rimary data has been collected from 7ersonal Interaction with /inance manager i. 'he main scope of the study was to put into practical the theoretical aspect of the study into real life work e(perience.

It has to maintain it further. to analy5e the financial position of the company. 6o the )orking capital management. In the last year the inventory turnover has increased. Bahety hemicals ! Minerals 7vt . is good.uick ratios are i. CONCLUSION3 'he study on working capital management conducted in Bahety hemicals ! Minerals 7vt .FINDINGS3  )orking capital of the Bahety hemicals ! Minerals 7vt . . the company is moving forward with e(cellent management.td. 'he financial status of Bahety hemicals ! Minerals 7vt .. 7rofit also increasing every year this is good sign for the company. 0. It shows that it is able to meet its current obligations.uick ratios are almost up to the standard re. is satisfactory and it has to maintain it further.<1 respectively.td.td.  'he Bahety hemicals ! Minerals 7vt .td.td has higher current and . 'he company&s financial position is analy5ed by using the tool of annual reports from 011?$12 to 0118$ 31.B: and 0. 6o the company&s li.e. to run the business long term. =n the whole.uidity position is good.uirement. SUGGESTIONS  )orking capital of the company has increasing every year. was increasing and showing positive working capital per year.  'he urrent and . this is good sign for the company.

PART .II INTRODUCTION INTRODUCTIONTO TOTHE THESTUDY STUDY INDUSTRY INDUSTRYPROFILE PROFILE .

in IMPORTANCE OF THE STUDY 'here are numerous aspects of working capital management that makes it an important topic for the study.INTRODUCTION TO THE STUDY BAC$GROUND OF STUDY C ash is the lifeblood of businessC is an often repeated ma(im amongst financial managers. loans and advances. however. 'he management of assets in any organi5ation is an essential part of overall management. the management gives more importance to managing working capital. in the overall day$to$day financial management. )orking capital management refers to the management of current or short$term assets and short$term liabilities. debtors. A healthy working capital position is the sine$ . Dowever. after the initial investment. 'his is reflected in ade. since short$term liabilities arise in the conte(t of short$term assets. omponents of short$term assets include inventories. LTD apital Management. . trade advances. 'he major emphasis is. investments and cash and bank balances.uate inventories. etc. 6hort$ term liabilities include creditors. If we look at any financial statement it will be evident that the investment in fi(ed assets remains more or less static but the working capital is constantly changing. thus the study of working capital management occupies an important place in financial management. 'he enterprise. on short$term assets. lowest level of debtors.ua$non of a successful business. as a part of investment decision$making. STATEMENT OF THE PROBLEM 'his project deals with the study about -)orking BAHETY CHEMICALS AND MINERALS PVT. It is important that companies minimi5e risk by prudent working capital management. minimum utili5ation of bank facilities for working capital. borrowings and provisions. at the time of formation attaches great importance to fi(ed assets management.

INDUSTRIAL PROFILE HISTORY 'he chemical industry is one of the oldest domestic industries in India. Among these are the Indian hemical Manufacturers Association.? percent of the countryFs total industrial production and 32. and pharmaceutical industries are some of the fastest growing sectors in the economy. 7olicy.111 commercial products. the Indian government actively promotes the advancement of the domestic chemical industry. 6everal organi5ations in the private sector are working towards growth of the industry and the e(port of Indian chemicals. and fertili5ers. including inorganic and organic #commodity% chemicals. drugs and pharmaceuticals. fine and specialty chemicals. Daving a strong focus on moderni5ation.0 percent of the total e(ports from the Indian manufacturing sector. )ith an estimated worth of E0B billion. . and in terms of volume. it accounts for 30. the hemicals and 7etrochemicals Manufacturers Association. 'he Indian pesticide industry has advanced significantly in recent years. and regulation of the industry is all coordinated by the "epartment of hemicals and 7etro$ chemicals. petrochemical. 'he Indian agrochemical.111 tons of pesticides annually. ranging from cosmetics and toiletries. contributing significantly to both the industrial and economic growth of the country since it achieved independence in 389:. pesticides and agrochemicals. 'he wide and diverse spectrum of products can be broken down into a number of categories. India is the 3<th largest e(porter of pesticides and disinfectants in the world. 'he chemical industry currently produces nearly :1. dyes and pigments. which has been part of the Ministry of hemicals and /ertili5ers since 3883. to plastics and pesticides. development. producing more than 3. planning. is the 30th largest producer of chemicals. plastics and petrochemicals. and the 7esticides Manufacturers and /ormulators Association of India.

fine hemicals and pharmaceuticals. 7resence of many multinational companies also. . .. Its si5e is estimated at around G6E <? billion appro(.arge players in bulk chemicals. In terms of volume.uivalent to about <H of IndiaFs I"7. which is e. per capita consumption of products of chemical industry in India is about 3/31th of the world average. It is highly science based and provides valuable chemicals for various end products such as te(tiles. )estern India accounts for 9?$?1H of total Indian chemical Industry. hemical Industry is an important constituent of the Indian economy. urrently. G6E 21 billion and total employment generated is about 3 million.INDIAN CHEMICAL INDUSTRY SCENARIO hemical Industry is one of the oldest industries in India. it is 30th largest in the world and <rd largest in Asia. which are re. =ver the last decade. 'he Indian hemical Market 6egment wise is as under* $ SEGMENT Basic hemicals 6pecialty hemicals Digh And / Jnowledge 6egment TOTAL MAR$ET VALUE ?BILLION US @A 01 8 2 <? CHEMICAL INDUSTRY STRUCTURE • • • • Dighly fragmented and widely dispersed. leather etc. which contributes significantly towards industrial and economic growth of the nation. 'he Indian hemical sector accounts for 3<$39H of total e(ports and B$8H of total imports of the country.uired in almost all walks of life. )ith investments in +!". paper. 'he Indian hemical Industry forms the backbone of the industrial and agricultural development of India and provides building blocks for downstream industries. paints and varnishes. the industry is registering 6ignificant growth in the knowledge sector comprising of specialty chemicals.. the Indian hemical industry has evolved from being a basic chemical producer to becoming an innovative industry. 'he total investment in Indian hemical 6ector is appro(. Both large and small players in /ine and 6pecialty hemicals.

<1 crores and showing a massive growth of 09H over the preceding yearFs figure of +s 2. hemical @ews etc.91<.. which has been achieved by competing with big multinational corporations of the world. 111 crores.6) 1(1 +B:++1(89*2 5+**.819.91<./(: C. 6uch information will enable you to properly assess the usage of different chemicals in safe ! secure manner.91 crores against the target of +s 9. hemical Industry. 'he voluminous knowledge about chemical related issues can be easily and instantly obtained from this website. A(ports by the basic chemical sector in 388?$82 surpassed the target of +s 2.+=(:. 'he website carries detailed information regarding different varieties of chemical and terminology of chemical such as 'echnology. but has now become a net e(porter due to reduction in Imports because of implementation of many large scale petrochemical plants like +eliance etc. 'he drugs and pharmaceuticals and the organic/inorganic/agro$chemicals contributed as much as 2<H of total e(ports. pesticides. 'urnover for the year ended 388B$88 is close to +s.. "uring 3889$8? e(ports totaled +s 2. .8:8.?B9. hemical Association.?19. hemical 7rocessing.3?. B. 'his has been a herculean task.21 crores. dyes and intermediates. hemical hemical Angineering. and also because of tremendous growth of e(ports in sectors like bulk drugs and pharma.:90 crore by reaching a figure of +s :.FOREIGN TRADE India was a net importer of chemicals in early 3881s.11 crore.*/ EB<.81 crores. while in the preceding year shipments reached +s 9.81 crores against the target of +s ?.

6uch information will enable you to properly assess the usage of different chemicals in safe ! secure manner. In a chemical compound atoms of its constituent elements are bonded together in molecules. Millions of chemical compounds can be made by combining the roughly 301 chemicals. 'he voluminous knowledge about chemical related issues can be easily and instantly obtained from this website.td AB+ =rganics Aimco 7esticides Alkyl Amines hemicals . hemical 7rocessing. hemical Association. 'he ratio of each element in a chemical compound is generally e(pressed by chemical formula like.td Allied +esins ! hemicals . hemical hemical Angineering.td s Alpanil Industries hemplast 6anmar Iala(y 6urfactants Iulshan 7olyols Dindustan Insecticides . 'he ratio determining the composition of chemical compound remains fi(ed.imited Indo Ierman arbons >ainco Inks ! hemicals >yoti hemical CHEMICAL INFORMATION 'he website carries detailed information regarding different varieties of chemical and terminology of chemical such as 'echnology. hemical @ews etc. . hemical Industry. CHEMICAL COMPOUNDS hemical compound is formed by combination of two or more elements into one substance form.LISTS OF CHEMICAL INDUSTRIES • • • • • • • • • • • • • 01 Microns .

hemical industry occupies an important place in the country&s economy. plastics an petrochemicals. gases. 'alking about property of chemical compounds. Dowever. banks and financial institutions. 'he industry is e(pected to grow at a AI+ of over 31H for the ne(t < years. 'he report also profiles the major 3:companies in the Indian industry #33 Indian companies and 2 M@ s%. 'hose chemical compounds which are based on carbon and hydrogen atoms are called organic compounds and other chemical compounds which are based on elements other than carbon and hydrogen are called inorganic compounds. dyes and pigments. critical success factors.? billion the post )'= era.?8 billion. hemical compounds are further divided into subcategories. various segments.uids. Avery known chemical compound decompose when heat is applied. 6ome chemical compounds may also e(ist as li. pesticides and agrochemicals and fertili5ers. investors. fine and specialty chemicals.80 billion and e(ports of E8. 'he report covers overall industry scenario in the conte(t of global chemicals industry. Indian chemical industry is undergoing a massive e(pansion. with imports of G6E:. a chemical compound may have several possible phases. consultants. "uring 011?$12 contributed about <H of I"7 and 3:. India continued to be a net importer in 011?$12. issues and challenges and future outlook for the industry. drugs and pharmaceuticals. hemical compounds in which components share electrons are known as covalent compounds whereas compounds consisting of oppositely charged ions are known as iconic chemical.Indian chemicals industry during 011?$12 was G6E<1. 'he wide and diverse spectrum of chemical products can be broken down into number of categories $ inorganic and organic #commodity% chemicals. a growth of 31.2H of the manufacturing sector. Another form of chemical compound which contain bond between carbon and metal are called organ metallic compound. and even plasmas. brand building and increased global reach. At low enough temperatures all compounds can e(ist as solids. in line with the growth of manufacturing industry.0<Hover the previous year and a AI+ of B. .2BH during the last < years. corporate engaged directly or indirectly in the chemicals industry and international readers who want to keep abreast of the Indian manufacturing sectors.water which is represented by chemical formula D0= is a chemical compound consisting of two hydrogen.'he report is useful for industry analysts. 'his report covers all the segments e(cept petrochemicals. drugs and pharmaceuticals. growth drivers.

As in the case of most of the other chemical sectors. but is now shifting over to the globally accepted petrochemical route. dyes and dye intermediates. applications and operating conditions.3 billion and has emerged as a key player in the Asia 7acific region.? billion #3888$11%. Main specialty chemicals are rubber chemicals. 'hese chemicals are mainly based on organic chemicals. 'he oil crisis of the 38:1s saw a shift to process$oriented research in the global economies. specialty pigments etc. polymer additives. It is one of the most important sectors of the chemical industry.111 manufacturing units in total. there being more than 31. the last decade of the century has rekindled interest in the industry and has seen the emergence of Asia as a power to reckon in the industry. SPECIALITY CHEMICALS 6pecialty chemicals are those that are customi5ed to perform specific functions. providing the basic feedstock for a variety of other industrial sectors such as drugs and pharmaceuticals. 'he industry is valued at around G6E 9.imited #Docl%.imited #@ocil% and Dindustan =rganic hemicals . with the pioneers in the field being the @ational =rganic hemical Industries .?H. leather chemicals.ORGANIC CHEMICALS =rganic chemicals are compounds that are formed from the two basic building blocks of carbon and hydrogen. the capacity of speciality chemical is ?0:0 'housand M's and production is appro(.e. which was sustained in the last decade. In India. 6peciality hemicals are high priced. with the alignment of petrochemical feedstock prices with the international levels. Ilobally the contribution of specialty chemicals is up to 0?H of the chemical sector i. 'he average annual growth Is e(pected to be :. lubricating additives. . 'he industry is highly fragmented. <281 thousand M's. it is appro(imately worth G6E 9?< billion. 'he industry is today valued at G6E 3. 'he Indian industry however saw a spurt in growth in the 38B1s. water treatment chemicals. paints and pesticides. A few large companies with a wide range of products dominate the industry. the domestic industry is a late starter. After a fall in the 38B1s. low volume chemicals used for specific applications by various industries. 'he Indian industry has traditionally used the alcohol route for the manufacture of many organic chemicals.

PVT.LTD. ORGANICATION STRUCTURE.LTD. OB!ECTIVES OF BCM.PVT. PRODUCT PROFILE OF BCM.LTD.LTD ORGANICATION STRUCTURE. DEPARTMENTAL STUDIES.PVT. . S#OT ANALYSIS OF BCM. VISION AND MISSION. EXPANSION AND DIVERSIFICATION. BOARD OF DIRECORS.III INTRODUCTION INTRODUCTIONOF OFCOMPANY COMPANY COMPANY PROFILE.PVT. VISION AND MISSION. EXPANSION AND DIVERSIFICATION.PVT.PVT. DEPARTMENTAL STUDIES. OB!ECTIVES OF BCM.LTD S#OT ANALYSIS OF BCM.LTD. COMPANY PROFILE.PART . PRODUCT PROFILE OF BCM. BOARD OF DIRECORS.

transport. 'he company has been receiving good response from customers and e(pected to achieve better sales in coming years . 38?2. It started production in the year 3882.INTRODUCTION OF THE COMPANY COMPANY PROFILE HISTORY OF THE COMPANY Bahety chemicals and Minerals #7vt% .uired facilities like water. 'he company has not accepted any deposits from public as per the provisions of section ?BA of the company Act.imited is a small$scale industry. Ambewadi. labors and good environment and materials. It is a private company situated in the Industrial estate. 'he company purchased and constructed building in the year 388<. . =n the outskirts of "andeli city which is enjoying all the re. 'he company is achieving its sales target with some ups and downs. power.'he ompany has its nature of business.

LTD .PROFILE OF BAHETY CHEMICALS AND MINERALS PVT.

3111 Metric '=@. Belgaum.).8 T2<+ .LTDD DANDELI – &132 . 388<..10:)(. Dubli.2++/ 30: N0=E+6 .imited..8 :.. 2 L6i(M "epartments.67(89 1.6) <*.+ :. Ioa. Industrial Astate.2/ 2 days in a week.1+<.:+/ 7roduction and 6ale of Alumina 6ulphate #Alum%.=<. N.82 A6+. "harwad.td.)06+ . N. P6.<. Bahety 7rivate . "andeli.:()2 S).. Ambewadi.k %.E*(/.(6=. "ist* Jarwar # u..6 .. Darihar. 'el*$1B0B9 $ 0<0<90.<.=+8) C.. Jarnataka 6tate..=<.8 BAHETY CHEMICALS AND MINERALS PVT. . Dyderbad..B0/(8+// EB<.+=<*. "andeli K ?B3<0?.9+ C..:()2 B11 M' of Aluminium sulphate #Alum% per month as per the 0118$0131 report. 6hri handrashekhar.N..6)=+8)/ N0=E+6 . @agpur.6. . >.)(.+/). .:.5.<+6. Banglore..82 Y+. Bahety hemicals and Minerals #7vt% .=+ . K 3.

'he taken unsecured loans from its joint associate 6hri.A . 31.11. 0.8 0138032. TABLE SHO#ING THE LONG TERM LOANS TA$EN BY BCM.uity shares of +s.111 31.6 011? $0112 0112 $ 011: 011: $ 011B 011B $ 0118 0118 $ 0131 S+:06+1 L..CO.111 e.8 Y+.111 31.CO.NO F(B+1 A//+)/ T. BORRO#ED FUND*$ 'he ompany has taken long term loans from orporation Bank "andeli.311 each.11 0?:92:0. It has also hemicals.8 ?28:<9.11 00<BB9?. 6ubscribed/ paid$up share capital +s.LTD L. 31.11 0229111.11 33?111.111 e.11 <198380.uity shares of +s .11 <:90<21. Authori5ed capital +s.* I8F+/)=+8) ?R/.11 <2?3?88.).11 02?39:3. +aghavendra company has also received government subsidy of 0?H on capital investments.LTD SHARE CAPITAL33.CAPITAL STRUCTURE OF BCM. 311 each...11 U8/+:06+1 L.11 INVESTMENT IN FIXED ASSETS IS SO#N BELO# SL.11.

<.11 30. 2.11. 4uality product. 4MISSION> 3.11 3?. 'o provide employment. 'o develop the establishing the organi5ation in the city.and and Building Machinery Adjacent Building <1.11.LTD 4VISION> -'o fulfill the growing demand of Alum and increasing the production. 'o ensure enterprise growth.3 0 < .11 VISION AND MISSION OF BCM .11.111.CO. COMPANY O#NERSHIP  SHARE HOLDERS . 0. ?. 9.111. Ma(imum satisfaction to customers. 'o create clean and healthy environment.111.

'o moderni5e the organi5ation by using the hi$tech machines in the production process.. @adkarni Mr. 6hri handrashekhar.LTD • • • • • 'o e(pand their market into other states.  6hri >awaharlal.)+3 Marketing "epartment is handled by M". OB!ECTIVES OF BCM. Mahalkar Mr. 'o increase the productivity.  6hri 7ritvipal Bahety. Bahety  6hri >awaharlal Bahety.  BOARD OF DIRECTORS  6hri handrashekhar Bahety. +ajendra.  MANAGING DIRECTOR  6hri handrashekhar Bahety. 'o know the customer attitude towards alum hemical. 7atil "A6II@A'I=@ /inance Manager Administrative Manager 7roduction Manager 7urchase Manager . 'o produce chemical into different area.CO.  STAFF @AMA6 Mr.a(mi Bahety.N. @eil Mr. Bahety. Mahesh. >.  6mt.  6hri Badal Jumar Bahety.+. PRODUCT PROFILE3'he B M ompany is engaged in the production of Alum #Aluminium sulphate% . "eshpande Mr.aboratory In$charge N. >.

A*0=(8(0=-S0*<.Alum is used in water treatment as mordant in dyeing. 6oda alum or aluminium sulphate is used in some baking powders. 7aper si5ing.  7otable and process water treatment olor and turbidity removal.uid alum.  Ni5 ferric li.  7ulp and paper mills.  larification and phosphorus removal. oil well operators. 7harmaceutically.  @on K ferric alum. .. which is soluble in water but insoluble in alcohol. MA!OR PRODUCTS OF THE COMPANY  Ni5 ferric alum. Manufacture of glycerin from soap lyes 6wimming pools. Aluminium sulphate mainly used in paper si5ing and in water treatment. Aluminium sulphate is known more as alum.)+ F+66(:-A*0= USES3  Industrial wastewater treatment. It is a colourless solid.  Municipal wastewater treatment. it is employed in dilute solution as a mild astringent and antiseptic for the skin. 6oap manufacturers.

A*0= USE3 "yeing and purification...)+ F+66(: .*(G0(1 .8-F+66(:-A*0= USES3  Gsed for dyeing and purification.  Gsed in )ater and )aste water 'reatment 7lants. . A*0=(8(0=-S0*<.)+ N.  Gsed in the pulp ! paper industry. )ater treatment.A*0=(8(0=-S0*<.

1.. 'he estimated investment re.LTD3 #ELFARE FACILITIES3 'he workers in Bahety hemicals and Minerals are given some facilities for their. 'he company is also planning to diversify.uired for e(pansion is borrowed from bank through term loans. INFRASTRUCTURE FACILITIES PROVIDED BY BCM. 2. #ASHING RESTING FACILITIES3 /acility for washing. drying materials.< . A(pansion of the company is likely to give 31 K 30 employment opportunities. Astimated investment in e(pansion process is +s 0: .uired starting up producing crystal alum is +s . It is planning to manufacture crystal alum for which the market is better 6wimming pools are one of the markets for crystal alum. CANTEEN3 anteen is also provided to the workers.CO. . ?1H of the diversification process is already developed. resting first aid facilities have been provided inside the factory for the benefits of workers on duty. 4.uid alum.EXPANSION AND DIVERSIFICATION A(pansion of the company is under progress. there is a proper facility to park them and unload them. SHELTER AND LUNCHROOM3 After the working hours to take rest rooms have been made by the company and to have food in lunchtime.acks. 'here are drinking taps and coolers placed in every department. DRIN$ING #ATER3 'he company has made provision of clean. 'he funds re. PAR$ING FACILITIES3 As the raw materials are brought in . . storing. drinking water providing to the workers during the working hours. 'he company is planning to produce alum ferric solid through conventional process. It runs on -no profit and no loss basis. Boiler evaporation of water from li.acks. 3. Betterment and comfort.orries.

Availability of raw materials. <.  STRENTHS 3. 9. Antry of competitors.  OPPORTUNITIES 3. Deavy transport charges. Market e(pansion.LTD.  THREATS 3. 0. 0. =nline ordering process. 7roduct substitution. 0.uality product. .uality. 9. Major consumption in paper industries but limited paper industries in Jarnataka. Availability of manpower.S#OT ANALYSIS OF BAHETY CHEMICALS ' MINERALS PVT.ow price high . . 0. 'echnological up gradation. /oreign market e(pansion. 7roduct e(pansion. <. ?.  #EA$NESS 3. Digh .

aboratory In$charge 7+="G 'I=@ "A7' Manager Manager Manager .ORGANISATION STRUCTURE MA@AII@I "I+A '=+ 7G+ DA6A "A7' .AB=+A'=+O "A7' A"MI@I6'+A'I= @ "A7' /I@A@ A "A7' MA+JA'I@I "A7' Manager .

CO.DEPARTMENTAL STUDIES OF BCM.  PURCHASE DEPARTMENT3 'he purchase officers and assistance head the purchase department. .  PRODUCTION DEPARTMENT.uired materials from the best seller available in the market.  ADMINISTRATION DEPARTMENT.  7urchase only and re.  LABORATORY DEPARTMENT.uisition from various departments and forward to the purchase offices and then the purchase officer arranges to the purchase re.  FINANCE DEPARTMENT.LTD  PURCHASE DEPARTMENT.uired materials. 'he clearly take the re. FUNCTIONS  7urchase the good .  MAR$ETING DEPARTMENT. 'he purchase department plays a very important role in the company where the dealing made between the purchase officers and sellers is convenient then it can be help in reduction of the price of the materials and their by which will also result in increase of profit.  Dave a better dealing at present and future with the supplier.uality materials.

6 BA+A' DAMI A.DA7G+ 6 7 & " 1% 11 12 13 BA.IAGM 6A'A+A IG>+A' 6A@I. = I@"G6'+IA6 A I" 7. '+A"A+6 /A+MA+ B+='DA+6  LABORATORY DEPARTMENT3 .IAGM BA@IA.IMI'A" AG+A=.G6 A"NA@ A 6G+/A 'A@ A I@"IA .NO 1 2 3 4 SUPPLIERS ABDI'A> I@"G6'+IA6 DI@"A.IAGM MI@A+A.aboratory is also one of the important department here because this department is used for testing the raw materials and the finished goods for their .DA7G+ BA.I "DA+)A" I DA. A+B=+A@"AM G@INA+6A.=+A J=.=+A MA@IA. .JA+A@>I J=.uality.DA7G+ BA. 'here is a lab incharge that looks after all the functions of the laboratory.=+A BA@IA.A>I I@"G6'+IA6 BA. .ab incharge has certain other workers under him who help him in e(ecuting his functions.'" DAMA D =+7=+A'I=@ "AA7AJ @I'+A'A AP A.A DAMI A.THE IMPORTANT SUPPLIERS OF BAHETY CHEMICALS ' MINERALS PVT.LTD.  PRODUCTION DEPARTMENT3 . LOCATION J=. TABLE SHO#ING SUPPLIERS RA# MATERIALS. SL.

Ni5 ferric alum. It is the department that produces the product on which the company is established. #.GMI@A =+ A.  )A'A+. After about an hour time viscous /erric Alum Is ready in the reactor. )hen the complete raw materials are together. <. PRODUCTS PRODUCED3 'he company is engaged in the production of three types of Alum they are 3.'he 7roduction department is one of the important department in the company.uantity of Alumina sludge and water is slowly added into the reactor.7DG+I A I".  BAGPI'A. @on K ferric alum PRODUCTION PROCESS OF FERRIC ALUM 6pent 6ulphuric Acid is led into +eactor through service tank Measured .GMI@A 6. 6pecial care is taken in this department on production. 0.GMI@A DO"+A'A.G"IA.ot of steam and heat is evolved in the process%.  A.7DG+I A I"  67A@' 6G.uid ferric alum. Ni5 li. RA# MATERIALS USED3  A. . . e(othermic reaction takes place.ist of critical raw materials presently in the production of Alum.  6G.

'he viscous /erric Alum is discharged through the outlet of the reactor through hose pipe into M6 moulds and it is left for 3 to 0 hour&s time for solidification.uantity of Bo(ite and water is slowly added into the reactor.uirement of the customers. ALUMINA SLUDGE #ATER SERVICE TAN$. REACTOR. e(othermic reaction takes place. A(othermic reaction Avolvement of heat and 6team FERRIC ALUM PRODUCTION PROCESS OF LIHUID FERRIC ALUM 6pent 6ulphuric Acid is led into +eactor through service tank Measured .i.uid /erric Alum Is ready in the reactor. #OR$FLO# MODEL3- SPENT SULPHURIC ACID STORAGE TAN$. . After about an hour time viscous .ot of steam and heat is evolved in the process%. )hen the complete raw materials are together. /erric Alum is either sold in blocks form or broken into pieces and bagged as per re. #.

. REACTOR.i. #.uid /erric Alum is discharged through the outlet of the reactor through hose pipe into tank.uantity of Alumina hydrate and water is slowly added into the reactor.ot of steam and heat is evolved in the process%.i. . )hen the complete raw materials are together. #OR$FLO# MODEL3- SPENT SUPHURIC ACID STORAGE TAN$.uid /erric Alum is sold in tank form to the customers. After about an hour time viscous @on$ferric Alum Is ready in the reactor. A(othermic reaction Avolvement of heat and 6team LIHUID FERRIC ALUM PRODUCTION PROCESS OF NON-FERRIC ALUM 6ulphuric Acid is led into +eactor through service tank Measured . BAUXITE #ATER SERVICE TAN$.'he viscous . e(othermic reaction takes place.

#OR$FLO# MODEL3- SULPHURIC ACID STORAGE TAN$. REACTOR.'he viscous @on$ferric Alum is discharged through the outlet of the reactor through hose pipe into Aluminium moulds and it is left for 3 to 0 hour&s time for solidification. 7ersonal Manager is concerned . ALUMINA HYDRATE #ATER SERVICE TAN$.uirement of the customers. 'he personal manager heads the department and personal managers is responsible for the man power in the whole factory. A(othermic reaction Avolvement of heat and 6team NON-FERRIC ALUM  ADMINISTRATION DEPARTMENT3 Administration "epartment takes care of the whole activities happening in and around the company. @on$ferric Alum is either sold in blocks form or broken into pieces and bagged as per re.

6ince B M is the small scale industry it maintains very good accounting system.  ollecting and presenting the data in the form of useful information from the records..  Insuring smooth running of the office files by interacting with e(ternal agendas as re. controlling.uity 6hares% 0.  Maintenance of time management in the company.with the most efficient use of people to achieve organi5ation and individual goals. 'he whole financial matter is mainly dealt by the separate dept called finance dept. organi5ing. wages records.  Jeeping all the records of all the departments. 'his dept. is concerned with day$to$day activities like purchases. 6hares # A.uired.oan from corporation banks. 3. Administration department also takes care of the planning.  Maintenance of salary. directing. It is the way of managing people at work so that they give the best to the organi5ation. procuring and developing and integrating of the company and human resources to the end. records etc. . sales salary etc. FUNCTIONS3  Maintenance of files.  Iood relation between the employer and employee. and proper management and maintenance of accounts of concerned year.  FINANCE DEPARTMENT3 /inance is an essential component of the business to maintain its operations effectively.  Iood relations with supplier and customers. . It also looks after the financial matters of the company.  Maintaining the financial matters of the company. FUNCTIONS3  +ecording day to day transactions in a systematic manner. 'he Major sources of finance are.

 7aying the interest on loans at right time.D ARE3- .  Maintaining profit ! loss A/c and 7reparing the Balance sheet of B M systematically. Marketing department also take care of the time given to it by the buyer to produce the product. 'his department is important because it gives a clear picture of how much to produceQ )hich will also help in the investment to he made and to purchase department to purchase raw materials.e.. 'he marketing department has a procedure.  Maintain ! paying the ta(&s ! insurance.  MAR$ETING DEPARTMENT3 Marketing "epartment is also a one of the important department in the company. by which it is done i. If there is any default in the order such as product not as per order or not at time or minimum product supplied the party will send back the sample to the organi5ation and the organi5ation gives certain percentage of discount for the default but no replacement is made THE SOME OF THE IMPORTANT CUSTOMERS OF THE BAHETY CHEMICALS AND MINERALS PVT. LTD.uidity of assets properly to earn the ma(imum profit. Maintaining proper accounts of purchases and sales. fit receives the order from the buyers and forwards the order to the production department and as per the order production department produces the re.uired production and it makes the packing of materials and sends it to the buyers as per the order.  Maintain li.  Make use of available finance resources properly.

.I "DA+)A" BA@I.I DA+IDA+ I=A DO"A+BA" DGB.'" RGA+I I@"G6'+IA6 . METHDOLOGY..NO 1 2 3 4 CUSTOMERS )A6' =A6' 7A7A+ MI.6 . PART .IAGM 6 7 & " 1% 11 12 JI' .IMI'A" I+A6IM I@"G6'+IA6 .TABLE SHO#ING CUSROMERS SL.AA+ 7=)A+ =+7=+A'I=@ 6AMA+ DAMI A.6 @G . SCOPE OF THE STUDY.J+I6D@A DA+IJ+I6D@A JA+)A JA+ANAA+A BA"D+A '+A"A+6 LOCATION "A@"A. . OB!ECTIVES OF THE STUDY.APMI I@"G6'+IA6 RESEARCH RESEARCHMETHDOLOGY. METHDOLOGY.AB=+A'=+IA6 6D+I . METHDOLOGY.I @AI7G+ BA.IV OB!ECTIVES OF THE STUDY. SCOPE OF THE STUDY.=+A "A@"A.6 NI = .6 6D+AOA6 7A7A+ MI.AB MADA@"+A DAMI A.=+A JAIIA BA@I.'" BA.

/urther the study is based on last ? years Annual +eports of Bahety hemicals ! minerals pvt ltd. 'he main scope of the study was to put into practical the theoretical aspect of the study into real life work e(perience. 'he study of working capital is based on tools like +atio Analysis. 6tatement of changes in working capital. .SCOPE OF THE STUDY 'he scope of the study is identified after and during the study is conducted.

ash management. . It May be understood as a science of studying now research is done systematically. RESEARCH METHDOLOGY INTRODUCTION3 +esearch methodology is a way to systematically solve the research problem. Inventory management.. In that various steps.OB!ECTIVES OF THE STUDY ♦ 'o study the sources and uses of the working capital. e(plaining and predicting phenomenon are called methodology. those are generally adopted by a researcher in studying his problem along with the logic behind them. ♦ 'o make suggestions based on the finding of the study. ♦ 'o study the working capital components such as receivables accounts. ♦ 'o study the li. -'he procedures by which researcher go about their work of describing.uidity position through various working capital related ratios.

SOURCE OF RESEARCH DATA3 'here are mainly two through which the data re. and analy5e these to make a critical evaluation of the facts. and for first time which is original in nature. It will save the time.)+ L)1> is considered as an analytical research. In this study the 7rimary data has been collected from 7ersonal Interaction with /inance manager i..B. SECONDARY DATA3 'he secondary data are those which have already collected and stored.8.9+=+8) . .8 #. figures. Mahesh @adkarni.e.67(89 C.+=(:.*/ P6(F. researcher has to use facts or information already available. 6econdary data easily get those secondary data from records. money and efforts to collect the data. annual reports of the company etc. data or material. Analytical +esearch is defined as the research in which..<().* M.+)2 :.uired for the research is collected.*/ ' =(8+6. Mr. and other staff members..TYPE OF RESEARCH3 'his project 4A S)012 . PRIMARY DATA3 'he primary data is that data which is collected fresh or first hand.

♦ 6tatement of changes in working capital. ♦ 'he findings of the study are based on the information retrieved by the selected unit.'he major source of data for this project was collected through annual reports. SAMPLING DESIGN 6ampling unit 6ampling 6i5e * /inancial 6tatements. ♦ 'he analysis is limited to just five years of data study #from year 0112 to year 0131% for financial analysis. ♦ .ast five years financial statements. TOOLS USED FOR ANALYSIS OF DATA 'he data were analy5ed using the following financial tools. profit and loss account of ? year period from 0112$0131 ! some more information collected from internet and te(t sources. * . LIMITATIONS OF THE STUDY ♦ 'he study duration #summer in plant% is short.imited interaction with the concerned heads due to their busy schedule. . 'ool Gsed for calculations* $ M6$A(cel. 'hey are ♦ +atio analysis.

=M7=@A@'6 =/ -) M>. CLASSIFICATION OF #OR$ING CAPITAL. MEANIG OF CAPITAL. MEANIG OF CAPITAL. NEED OF #OR$ING CAPITAL. MEANING OF #OR$ING CAPITAL. OPERATING CYCLE OF #OR$ING CAPITAL. CLASSIFICATION OF #OR$ING CAPITAL. MEANING OF #OR$ING CAPITAL. DETERMINANTS OF 4#C> REHUIREMENTS.10:)(.V V #OR$ING #OR$INGCAPITAL CAPITALMANAGEMENT. CAPITAL I8)6. INTRODUCTION. INTRODUCTION. MANAGEMENT. ESTIMATION OF 4#C> REHIUREMENTS ESTIMATION OF 4#C> REHIUREMENTS OPERATING CYCLE OF #OR$ING CAPITAL. FINANCING OF #OR$ING CAPITAL. NEED OF #OR$ING CAPITAL. FINANCING OF #OR$ING CAPITAL. =M7=@A@'6 =/ -) M>.PART PART -. DETERMINANTS OF 4#C> REHUIREMENTS.83 .

apital is a mobile.8(89 . and. 9. apital is a scarce. 0. and it has the potential of generating more wealth. apital is a passive factor. M+.)06+/ . apital is a perishable.apital is the keynote of economic development. the level of economic development is determined by the proportion of capital available.*3 In the ordinary sense of the word apital means initial investment invested by businessman or owner at the time of commencing the business. so it in itself is a type of wealth.C. as such. :. apital is a human control possible. INTRODUCTION OF #OR$ING CAPITAL3 . ?. 2. provide its owner with more wealth. apital is a human sacrifice. has many different definitions and classifications. 3. F+. potentially. apital is a man made.<().C.. <.. apital #economics%. D+-(8()(. It is an abstract economic concept. changeable value attached to it that could.83 Capital is a factor of production with a specific.*3 apital has the following features. a factor of production that is not wanted for itself but for its ability to help in producing other goods.<(). In this modern age. but the unifying feature of capital is that it has a certain value.

inventories. working capital is very essential to maintain the smooth running of a business.)orking capital is the life blood and nerve centre of a business.uirement of long term success. >ust as circulation of blood is essential in the human body for maintaining life.uired to support given volume of production. inventory. 'he importance of working capital management is indisputableS Business liability relies on its ability to effective management of receivables. MEANING OF #OR$ING CAPITAL . current assets which is known as funds also employed to the business process from the gross working capital urrent asset comprises cash receivables. and payables. )orking capital management as usually concerned with administration of the current assets as well as current liabilities. marketable securities held as short term investment and other items nearer to cash or e. inventories. By minimi5ing the amount of funds tied up in current assets. It can be stated without e(aggeration that effective working capital management is the short re.uantum of working capital is determined by the level of production which depends upon the management attitude towards risk and the factors which influence the amount of cash. @o business can run successfully without an ade.uivalent to cash. )orking capital comes into business operation when actual operation takes place generally the re. 'here is operative aspects of working capital i.e. Many managerial efforts are put into bringing non$optimal level of current assets and liabilities back towards their optimal levels. receivables and other current assets re.uate amount of working capital. 'he area includes the re.uirement of .uirement of funds from various resources and to utili5e them in all result oriented manner. /irms are able to reduce financing costs or increase the funds available for e(pansion.

S working% of an enterprise. In Accounting* DEFINITIONS3 Many scholars& gives many definitions regarding term working capital some of these are given below..S capital% available and used for day to day operations #i. According to Weston & Brigham -)orking capital refers to a firm&s investment in short$term assets cash.. It refers to funds which are used during an accounting period to generate a current income of a type which is consistent with major purpose of a firm e(istence. accounts receivables and inventories. short term securities. Mead Mallott & Field -)orking capital means current assets. Bonnerille -Any ac.e. It consists broadly of that portion of assets of a business which are used in or related to its current operations.uisition of funds which increases the current assets increases working capital for they are one and the same.)orking capital means the funds #i.e. .

@egative working capital means that a company currently is unable to meet its short$term liabilities with its current assets.uidity. :. 'o minimi5e the risk of business.uidity of the firms. 2. B.uate li. <. 'o discharge current liabilities. . 'o maintain sufficient current assets.7ositive working capital means that the company is able to pay off its short$term liabilities companies that have a lot of working capital will be more successful since they can e(pand and improve their operations. ?.uate li. ompanies with negative working capital may lack the funds necessary for growth OB!ECTIVES OF #OR$ING CAPITAL MANAGEMENT Affective management of working capital is means of accomplishing the firm&s goal of ade. 'o ensure ade. 0. It protects the solvency of the firm. It has the main following objectives$ 3. 9. 'o increase the value of the firm. 'o help in timely payment of bills. It is concerned with the administration of current assets and current liabilities. 'o ma(imi5e profit of the firm. THE NEED FOR THE #OR$ING CAPITAL .

3. =++) ./+ 6. )orking capital is re. 6tock represents current asset.uired to meet recurring over head e(penses such as cost of fuel.uired to pay selling ! distribution e(penses.uantities can operate successfully. .uires working capital. work in progress ! spares in re.6+ <.5 =.6)/ +):. #OR$ING CAPITAL MANAGEMENT . office e(penses and other manufacturing e(penses.81 /<. power. salaries and other charges. )orking capital is must for every business for purchasing raw$materials. A firm that can afford to maintain stock of re. 7.81 .*1 -(8(/.uires less working capital. It is helpful in maintain uncertainties involved in business field.+. )orking capital is re. T. It includes cost of packing. 6o for that ade.F+6 .+6 :.2 /+**(89 ' 1(/)6(E0)(.'he need for working capital arises due to the time gap between production and reali5ation of cash from sales.). 2.uired. )orking capital is re. )orking capital is re.uired for repairs ! maintenance both machinery as well as factory buildings.*/D /<.)+6(.6+ <. T. 6.=<..+1 .uired finished goods. .6)/ . T. 4.1 +B<+8/+/. 'rading concern re. A manufacturing firm needs raw$materials and other components parts for the purpose of converting them in to final products. commission etc. 1.uantity of working capital is re. for this purpose it re. <06:. <..uate . semi finished goods.uired . T.uired to pay wages.8 +B<+8/+/.8+8). stores ! spares etc and the following purposes.

'o be sure.uickly to change in sales. )orking apital Management is a significant fact of financial management.* . O8 T.)orking apital Management refers to management of current assets and current .<().'his Is understandable because current liabilities arise in the conte(t of current assets.8:+<)/ 1A G6. Dowever. fi(ed asset investment and long term financing are responsive to variation in sales. this relationship is not as close and direct as it is in the case of working capital components./(/ . Its Importance stems from two reasons*$ • • Investment in current assets represents a substantial portion of total investment..iabilities. Investment in current assets and the level of current liabilities have to be geared .67(89 C.+ B.C. CLASSIFICATION OF #OR$ING CAPITAL #OR$ING CAPITAL =n 'he Basis of oncepts =n 'he Basis of 'ime Iross )orking apital @et )orking apital 7ermanent / /i(ed )orking apital 'emporary / /luctuating )orking apital Initial )orking apital +egular )orking apital 6easonal )orking apital 6pecial )orking apital I.// #. 'he major thrust of course is on the management of current assets .

+ B. bills payable and outstanding e(penses. Bills receivables. urrent assets are those assets which are easily / immediately converted urrent assets includes into cash within a short period of time say. O8 T. 'he finance manager should be aware of such needs and finance them . As sales grow. iv..* 'his is the difference between current assets and current liabilities. Inventories. ii. an accounting year.Iross working capital is the amount of funds invested in various components of current assets. It helps in the fi(ation of various areas of financial responsibility. Iross working capital provides the correct amount of working capital at the right time.uickly.<(). ash in hand and cash at bank. 'he working capital needs increase as the firm grows. )orking apital Management is no doubt significant for all firms. /inancial managers are profoundly concerned with the current assets. iii.8:+<)/ . short term loans and advances.C./(/ . the firm needs to invest more in debtors and inventories. gross working capital has become a more acceptable concept in financial management. 6undry debtors. urrent liabilities are those that are e(pected to mature within an accounting year and include II. 2A N+) #.67(89 C. A small firm has more investment in current assets than fi(ed assets and therefore current assets should be efficiently managed. but its significance is enhanced in cases of small firms. /or these advantages. creditors. v. It enables a firm to plan and control funds and to ma(imi5e the return on investment. 'his concept has the following advantages*$ i. It enables a firm to reali5e the greatest return on its investment.

uirements of working capital also increases due to increase in current assets.* 5.<(). As the business grow the re.uirements. work$ in$process. finished goods and cash balance. IMPORTANCE OF #OR$ING CAPITAL .* +egular working capital refers to the minimum amount of li.67(89 :. . 'he capital re.6. are also known as special )orking apital. Avery firm has to maintain a minimum level of raw material.<().* 'here are many lines of business where the volume of operations are different and hence the amount of working capital vary with the seasons. 'his minimum level of current assts is called permanent or fi(ed working capital as this part of working is permanently blocked in current assets.6 5.8+8) I F(B+1 #.* 7ermanent or fi(ed working capital is minimum amount which is re.uired to keep up the circulation of the capital from the cash inventories to accounts receivable and from account receivables to back again cash.8.uid capital re.uired to ensure effective utili5ation of fi(ed facilities and for maintaining the circulation of current assets. 2A T+=<.<(). 'he need for initial working capital is for every company to consolidate its position.uired to meet the seasonal needs of the enterprise is known as seasonal )orking capital.<().1A P+6=.A I8()(. EA S<+:(.* #.uate stock of raw materials and finished goods and amount of receivables.uate cash balance on hand and at bank.uired to meet any special operations such as e(periments with new products or new techni.67(89 C. It consists of ade. .* At its inception and during the formative period of its operations a company must have enough cash fund to meet its obligations.A S+.<().67(89 :.62 I F*0:)0.* 'he apital re. It may be divided into two types. EA R+90*./.<().67(89 C.ues of production and making interior advertising campaign etc.* #.67(89 C.67(89 C.)(89 #. ade.* 'emporary / /luctuating working capital is the working capital needed to meet seasonal as well as unforeseen re.

8/3 If a firm is having ade. E. <.(). B..*+3 Ade.)+6(. 1.81 .+ E0/(8+//3 Ade.. ADEHUACY OF #OR$ING CAPITAL3 . confidence. =.uate working capital helps in maintaining the solvency of the business by providing uninterrupted of production. R+90*.*F+8:2 .F.2=+8) ./2 *.6 <. 31.6(+/D 5. AE(*()2 ). EB<*. F.2 ).uirements in bulk when the prices are lower and holdings its inventories for higher prices.-.6.81()(.uate working capital brings an environment of securities.. 8. H0(:7 . C. increases their efficiency. R+90*.uate working capital also enables a concern to avail cash discounts on the purchases and hence reduces cost.uate working capital then it can e(ploit the favorable market conditions such as purchasing its re.uick and regular of dividends to its investors and gains confidence of the investors and can raise more funds in future.8 (8F+/)=+8)/3 6ufficient working capital enables a concern to pay .. 2.5 M.8/3 Ade.08)/3 Ade. :.6 6+)068 .9+/ .6 S0<<*2 .==()=+8)/ 3 It leads to the satisfaction of the employees and raises the morale of its employees.67+) :.*. reduces wastage and costs and enhances production and profits. 9. 0.:+ C6(/+/* A concern can face the situation during the depression.R.81 6+90*.+6 1..E*+ =.uate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms./. H(9. G. ?.15(** 3 6ufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill. S.)(.3.8 ./.2 :.6.).).*3 6ufficient working capital ensures regular supply of raw material and continuous production. 1(/:. high morale which results in overall efficiency in a business..

)orking capital should be ade,uate so as to protect a business from the adverse effects of shrinkage in the values of current assets. It ensures to a greater e(tent the maintenance of a company&s credit standing and provides for such emergencies as strikes, floods, fire etc. It permits the carrying of inventories at a level that would enable a business to serve satisfactorily the needs of its customers. It enables a company to operate its business more efficiently because there is no delay in obtaining materials etcS because of credit difficulties. INADEHUATE OF #OR$ING CAPITAL3
)hen working capital is inade,uate, a company faces many problems. It stagnates the growth and it becomes difficult for the firm to undertake profitable projects for non$ availability of working capital funds. "ifficulty in implementing operating plans and achieving the firm&s profit targets. =perating inefficiencies creep in when it becomes difficult even to meet day$to$day commitments. /i(ed assets are not utili5ed efficiently thus the firm&s profitability would deteriorate. 7aucity of working capital funds renders the firm unable to avail attractive credit opportunities. 'he firm loses its reputation when it is not in a position to honor it short$term obligations thereby leading to tight credit terms.

DANGERS OF EXCESSIVE #OR$ING CAPITAL3
'oo much working capital is as dangerous as too little of it. A(cessive working capital raises problems. 3. It results in unnecessary accumulation of inventories. 'hus chances of inventory mishandling, waste, theft and losses increase. 0. Indication of defective credit policy and slack collection period. results in higher incidence of bad debts, adversely affecting profits, <. Makes the management complacent which degenerates in to managerial inefficiency. 9. 'he tendencies of accumulating inventories to make a speculative profit, which tends to liberali5e the dividend policy, make it difficult for the concern to cope in the future when it is not able to make speculative profits. onse,uently, it

ESTIMATION OF #OR$ING CAPITAL REHIUREMENTS
Managing the working capital is a matter of balance. 'he firms must have sufficient funds on hand to meet its immediate needs. 'he Bahety chemicals ! minerals #pvt% ;imited is manufacturing oriented organi5ation.

'he following aspects have to be taken into consideration while estimating the working capital re,uirements. 'hey are* 3. 0. 'otal costs incurred on material, wages and overheads. 'he length of time for which raw material are to remain in stores before they are issued for production. <. 'he length of the production cycle or work$in$process, i.e., the time taken for conversion of raw material into finished goods. 9. 'he length of sales cycle during which finished goods to be kept waiting for sales. ?. 'he average period of credit allowed to customers. 2. 'he amount of cash re,uired paying day$today e(penses of the business. :. 'he average amount of cash re,uired to make advance payments. B. 'he average credit period e(pected to be allowed by suppliers. 8. 'ime lag in the payment of wages and other e(penses.

OPERATING CYCLE OF #OR$ING CAPITAL3
'he working capital cycle reserves to the length of time between the firm paying cash for materials etc., this working capital also known as operating cycle. )orking capital cycle or operating cycle indicates the length or time between companies paying for materials entering into stock and receiving the cash from sales of finished goods. 'he operating cycle #)orking apital% consists of the following events. )hich continues throughout the life of businessQ

CASH

DEBTORS

RA# MATERIALS

FINISHED STOC$

#OR$-IN-PROGRESS

    

onversion of cash into raw materials. onversion of raw materials into work in progress. onversion of work in progress into finished stock. onversion of finished stock into accounts receivables#"ebtors%through sale and onversion of account receivables into cash.

6o that suppliers send the goods to the firm for the payment to be received in future as per the agreement or sales invoice. BAN$ CREDIT3 ommercial banks play an important role in financing the trade ! industry Bank provides short$term. 3. it was financing the working capital from the following four common sources. 'hey are. 'he firm has a good relationship with the trade creditors. 2.uity shares for raising the funds. medium term ! long term finance to an industrialist or a business man.FINANCING OF #OR$ING CAPITAL I8)6. . a firm has to decide how it is to be financed. TRADE CREDIT3 'he trade credit refer to the credit e(tended by the suppliers of goods in the normal course of business. SHARES3 'he B M has issued the e. In that B M. In this way. 1.83 After determining the level of working capital. the firm generates the short$term finances from the trade creditors.uity shares do not have any fi(ed commitment charges and the dividend on these shares is to be paid subject to the availability of sufficient funds. It is an easy and convenient method to finance and it is informal and spontaneous source of finance for the firm. 'hese funds have been injected from the company&s own personal resources and from the members. 'he A.10:)(.

1. L,;8/3 'he B M #7N'% ;'"., has taken loan from the commercial bank for working capital re,uirement for a certain period at certain interest rate.

2. C;/. C6+1() I OF+616;-)/3 Gnder cash credit/overdraft from/arrangement of bank finance, the bank specifies a determined borrowings/credit limit. 'he borrower can draw/borrow up to the stipulated credit/overdraft limit. )ithin the specified limit/ line of credit, any number of drawals/drawings are possible to the e(tent of his re,uirement periodically. 'his form of financing of working capital is highly attractive to the borrowers because, firstly, it is fle(ible in that although borrowed funds are repayable on demand, banks usually do not recall cash advances/roll them over and, secondly, the borrower has the freedom to draw the amount actually outstanding. Dowever, cash credit/overdraft is inconvenient to the banks and hampers credit planning.

4. CUSTOMER ADVANCES3 'he B M #pvt% ;imited follow the practice of collecting advance money from the customers as soon as orders are placed and before the actual delivery of the goods. 6uch an advance received from the customers constitutes one of the short$term sources of finance.

ertain H of the price of the goods to be sold to the customers is collected in the of an advance. 6eller can utili5e the advance money so collected for meeting these urgent financial obligations.

DETERMINANTS OF #OR$ING CAPITAL REHUIREMENTS
In order to determine the amount of working capital needed by the firm a number of factors have to be considered by finance manager. 'hese factors are e(plained below.

1. N;)06+ ,- B0/(8+//3 'he @ature of the business effects the working capital re,uirements to a great e(tent. /or instance public utilities like railways, electric very little working capital because they need companies, etc. need

not hold large inventories and

their operations are mostly on cash basis, but in case of manufacturing firms and trading firms, the re,uirement of working capital is sufficiently large as they

have to invest substantially in inventories and accounts receivables . B M is a production firm, there for working capital re,uired is more in period of production as compared to other period. 2. P6,10:)(,8 P,*(:(+/3 'he production policies also determine the )orking capital re,uirement. 'hrough the production schedule i.e. the plan for production, production process etc. 'he B M has small production process. 3. C6+1() P,*(:23 'he credit policy relating to sales and affects the working capital. 'he credit policy influence the re,uirement of working capital in two ways* 3. 'hrough credit terms granted by the firm to its customers/buyers. 0. redit terms available to the firm from its creditors.

'he credit terms granted to customers have a bearing on the Magnitude of )orking capital by determining the level of book debts. 'he credit sales results is higher book debts #re available% higher book debt means more )orking capital.

=n the other hand, if liberal credit terms are available from the suppliers of goods L'rade creditorsM, the need for working capital is less. 'he working capital re,uirements of business are, thus, affected by the terms of purchase and sale, and the role given to credit by a company in its dealings with reditors and "ebtors. In B M company raw materials are purchased with a credit or cash and finished goods are sold on cash basis and also credit basis. 4. C.;89+/ (8 T+:.8,*,923 'echnology used in manufacturing process is mainly determined need of working capital. Moderni5e technology needs low working capital, where as old and traditional technology needs greater working capital. . S(J+ ,- ).+ B0/(8+// U8()3 'he si5e of the business unit is also important factor in influencing the working capital needs of a firm. ;arge 6cale Industries re,uires huge amount of working capital compared to 6mall scale Industries. 6. G6,5). ;81 EB<;8/(,83 'he growth in volume and growth in working capital go hand in hand, however, the change may not be proportionate and the increased need for working capital is felt right from the initial stages of growth.

7. D(F(1+81 P,*(:23 Another appropriation of profits which has a bearing on working capital is dividend payment. 7ayment of dividend utili5es cash while retaining profits acts as a source as working capital 'hus working capital gets affected by dividend policies. 'he B M follows liberal dividend policy will re,uire more working capital than company that follows a strict dividend policy.

cause a shift in the working capital position.uirements as a concern higher profit margin results in higher generation of internal funds and more contributing to working capital. but demand for the product is high. the firm will have to obtain raw material when it is available. the firm can afford to have a smaller inventory and would conse.8/3 If supply of raw material and spares is timely and ade. =therwise. 11. particularly for temporary working capital the variations in the business conditions may be in two directions* 3.&. ". M. )hen competition is high. the firm can get by with a comparatively low inventory level. It thus has greater working capital needs.uently re.uire lesser working capital. "ownswing phase when economic activity is marked by a decline. 1%. If supply is scarce and unpredictable or available during particular seasons. But this factor has not applied in these technological and competitive days.8/3 'he level of competition e(isting in the market also influences working capital re.uirements are also determined by the nature of the business cycle.67+) C. Gpward phase when boom condition prevail.81()(. P6. customers are highly likely to switch over to competitor&s products. It is essential to keep larger stocks increasing working capital re. in turn. .uirement.81()(. the company should have enough inventories of finished goods to meet a certain level of demand.uate.-() L+F+*3 7rofit level also affects the working capital re. B0/(8+// C2:*+3 'he working capital re. Business fluctuations lead to cyclical and seasonal changes which. S0<<*2 C. 0. )hen competition is low.uirements.

62* 'he relevant cost of determine work in process inventory are the proportionate share of cost of raw material and conversion costs # labors and Manufacturing over Dead cost e(cluding depreciation% In case. i. F(8(/.5 M.. Budgeted 7roduction # In units % Astimated work$ Average 'ime 6pan ( in$progress cost per unit ( of work$in$progress inventory #months/days% 30 months / ?0 weeks / <2?days 3. #.67-(8-<6.uivalent to ?1H of total cost of production.62* 'he Investment in +aw Material can be computed with the help of the following formula*$ Budgeted 7roduction # In units % ost of +aw Average Inventory ( Material#s% per unit ( Dolding 7eriod #months/days% 30 months / ?0 weeks / <2?days 2.)+6(.96+// ?#IPA I8F+8). R.623 )orking capital re. 'hroughout the production ycle..1/ I8F+8).uired to finance the finished goods inventory is given by factors summed up as follows*$ Budgeted 7roduction # in units % ost of Ioods 7roduced /inished Ioods ( per unit #e(cluding depreciation% ( Dolding 7eriod #months/days% 30 months / ?0 weeks / <2?days . 6ymbolically. cost of full unit T ?1H of conversion cost compared to the raw material re.uirement.ESTIMATION OF CURRENT ASSETS 1.* I8F+8).uired in the beginning the unit cost of work is process would be higher. working process is normally e.+1 G. full until of raw material is re.e.

attitude of management towards risk.*. T6. 'his would primarily be based on the motives of holding cash balances of the business firm. 'he Important reditors. ESTIMATION OF CURRENT LIABILITIES 'he )orking apital needs of business firms are lower to the e(tent that such urrent . the access to the borrowing sources in times of need and past e(perience.6/3 'he working capital tied up in debtor should be estimated in relation to total cost price # e(cluding depreciation % symbolically.iabilities in this conte(t are 'rade$ 'he /unding of )orking apital from 'rade reditors can be computed with the help of the following formula*$ Budgeted Oearly 7roduction # In units % +aw Material redit 7eriod ( ost per unit ( Allowed by creditors #months/days% 30 months / ?0 weeks / <2?days N.87 B.7roportional adjustment should be made to cash purchases of +aw Materials.6/3 urrent . It is difficult to lay down the e(act procedure of determining such an amount.iabilities#other than Bank redit% arising in the needs are met through the ordinary course of business. ./. )ages and =verheads*$ 1. D+E).81 B. /irms also find it useful to have such minimum cash Balances with them.)+3. C.4.8:+/3 Apart from )orking apital needs for /inancing Inventories and "ebtors.1+ C6+1(). Budgeted 7roduction # In units % ost of 6ales per Average "ebt ( unit e(cluding depreciation ( ollection 7eriod #months/days% 30 months / ?0 weeks / <2?days . .

)(.'he average redit 7eriod for the payment of wages appro(imates to half$a$month in the case of monthly wage payment.9+/3 'he /unding of )orking help of the following formula*$ apital from "irect )ages can be computed with the Budgeted Oearly 7roduction # In units % "irect .8 D+<6+:(. D(6+:) #.'he amount of =verheads may be separately calculated for different types of =verheads. paid on the <1th day.+. 'he first days monthly wages are paid on the <1 th of the month.8A3 'he /unding of )orking apital from =verheads can be computed with the help of the following formula*$ Budgeted Oearly 7roduction # In units % =verhead Average 'ime$lag in ( ost per unit ( 7ayment of overheads #months/days% 30 months / ?0 weeks / <2?days N.6)(J.2.)(.8 .)+3. OF+6. e(tending credit for 08 days. the second day&s wages are.abor Average 'ime$lag in ( ost per unit ( 7ayment of wages #months/days% 30 months / ?0 weeks / <2?dayss N.). Average credit period appro(imates to half$a$month. e(tending credit for 0B days.+6 ).1/ ?. and so on.)+3. In the case of 6elling =verheads. the relevant item would be sales volume instead of 7roduction Nolume.81 A=.. 3. . again .

NO PARTICULARS A6'IMA'I=@ =/ CURRENT ASSETS 1A Minimum desired cash and Bank balances. 2A Inventories +aw material )ork$in$progress /inished stock 3A "ebtors 'otal urrent Assets ((( ((( ((( ((( ((( AMOUNT 1 XXX 2 A6'IMA'I=@ =/ CURRENT LIABILITIES 1A reditors ((( ((( ((( 2A )ages 3A =verheads 'otal current liabilities XXX XXX XX XXXX NET #OR$ING CAPITAL #'otal urrent assets K 'otal urrent liabilities% Add * Margin for contingency net )orking capital re.FORMAT FOR DETERMINATION OF #OR$ING CAPITAL3 SL.uirement COMPONENTS OF #OR$ING CAPITAL .

creditors may present bills earlier than e(pected or the debtors may make payments earlier than warranted.uired.)(F+ M.8 M.0)(. redit purchases and 6ales%. 'he term cash includes coins.:)(. P6+:.g. ash is the Basic input needed to keep the business running in the continuous basis. /or this purpose companies generally maintain some amount in the form of ash. employees may go on a strike. 'he firm should keep sufficient cash neither more nor less.8. currency and che. 'he company has to be prepared to meet these contingencies to minimi5e the losses. NEED FOR HOLDING CASH 'he need for holding ash arises from a variety of reasons which are. )hile some of these transactions may not result in an immediate inflow/outflow of cash #A. 3. 6o firms keep a certain amount of cash so as to deal with routine transactions where immediate cash payment is re.)(F+* ontingencies have a habit of cropping up when least e(pected.ues held by the firm and balances in its bank account.)(F+3 A company is always entering into transactions with other entities. S<+:0*. other transactions cause immediate inflows and outflows. 2. A sudden fire may break out.)(F+3 .'he components of working capital are*  CASH MANAGEMENT  RECEIVABLES MANAGEMENT  INVENTORY MANAGEMENT  CASH MANAGEMENT3 ash is the important current asset for the operation of the business. accidents may happen.8/. ash is the money. 'hus a major function of the financial manager is to maintain a sound cash position. T6.62 M. it is also the ultimate output e(pected to be reali5ed by selling or product manufactured by the firm. 1. which a firm can disburse immediately without any restriction. ash shortage will disrupt the firm&s manufacturing operations while e(cessive cash will simply remain ideal without contributing anything towards the firm&s profitability.

uirements. ash budgeting indicates probably cash receipts and cash payments for an under consideration. 'o ensure effective utili5ation of available cash resources. CASH BUDGETING ash budgeting is an important tool for controlling the cash. <. 3.uidity and profitability. 2. /ollowing are some of the objectives of cash management. 'o minimi5e operational cost of cash management. 'o provide for une(pected payments. In order to protect the solvency of the firm and also to ma(imi5e the profitability. 'hese transactions are purely of speculative nature for which the firms need cash. /or e(ample. 0. It gives information about the amount of cash e(pected to be received and the amount of cash e(pected to be paid out by a firm for a given period. ash budget is a statement of estimated cash inflows and outflows relating to a future period. 'o protect the solvency of the firm and build up image. there may be a sudden decrease in the price of +aw Materials which is not e(pected to last long or the firm may want to invest in securities of other companies when the price is just right. 'o meet day to day cash re. 'o ma(imi5e profits on available investment opportunities.  RECEIVABLES MANAGEMENT3 ./irms also maintain cash balances in order to take advantage of opportunities that do not take place in the course of routine business activities.uired. OB!ECTIVES OF CASH MANAGEMENT 7rimary object of the cash management is to maintain a proper balance between li. 9. It is a statement of budgeted cash receipts and cash payment resulting in either positive or negative cash or for a week or for a year and so on. It is prepared for future period to know the estimated amount of cash that may be re. ?.

the economic value in goods or services passes immediately at the time of sale. 'rade credit creates receivables or book debts that the company is accepted to collect in the near future. 'o the buyer.uivalent value to be received later on. acting as a bridge for the moment of goods through production and distribution stages to customers. 'he customers from who receivables have to be collected are called as -'rade "ebtors. they are selling the goods on cash basis and also on credit basis. 0% It is based on economic value. 'he receivables include three characteristics 3% It involve element of risk which should be carefully analysis.. It is an essential marketing tool. receivables constitute a substantial position of current assets. Iranting credit and crediting debtors. 'he interval between the date of sale and the date of payment has to be financed out of working capital as substantial amounts are tied up in trade debtors. It needs careful analysis and proper management.+eceivables or debtors are the one of the most important parts of the current Assets which is created if the company sells the finished goods to the customer but not receive the cash for the same immediately . while seller e(pects an e. In B M ltd. 'he cash payment for goods or serves received by the buyer will be made by him in a future period. <% It implies futurity. A company gives trade credit to protect its sales from the competitors and to attract the potential customers to buy its products at favorable terms.  INVENTORY MANAGEMENT3 . amounts to the blocking of the company&s funds. 'rade credit arises when a company sales its products or services on credit and does not receive cash immediately.

uality of goods at reasonable prices.uantity so that work is not disrupted for want of inventory. ♦ 'o ensure right . semi finished goods. cash or inventories. finished products. lear cut . which help the firm in obtaining the desired level of sales. ♦ 'o ensure perpetual inventory control so that materials shown in stock ledgers should be actually lying in the stores. ♦ 'o maintain investments in inventories at the optimum level as re. Again inade. 'he main objectives of inventory management are operational and financial. spares and finished goods. Afficient management of inventory should ultimately result in wealth ma(imi5ation of owner&s wealth. it should at the same time ensure sufficient inventories to satisfy production and sales demand. wastages and damages. 'he financial objective means that investments in inventories should not remain ideal and minimum working capital should be locked in it. ♦ 'o minimi5e losses through deterioration.uate disrupts production and causes losses in sales. pilferage. 'he operational mean that means that the materials and spares should be available in sufficient .uickly as possible. It implies that while the management should try to pursue financial objective of turning inventory as . ♦ 'o avoid both over and under stocking of inventory.Inventories are goods held for eventual sale by a firm. whether it is plant. account ability should be fi(ed at various levels of the organi5ation. In company there should be an optimum level of investment for any asset.uired by the operational and sale activities. Inventories are thus one of the major elements. ♦ 'o design proper organi5ation for inventory control so that management. Inventories includes raw materials. 'he following are the objectives of inventory management*$ ♦ 'o ensure continuous supply of materials. ♦ 'o keep material cost under control so that they contribute in reducing cost of production and overall purchases.

0. 9.uate inventories is very beneficial to every firm.=(: O61+6 H0.4 U K 0A= Dere. . =rder cost <. 'he company is always tried to keep an eye on the level of safety stock and the lead$time associated with the orders made. +educing orders cost. <. Material cost 0. 6poilage In the B M. 3. It enables the firm to avoid scarcity of goods meant for either production o sale. 'o avoid loss. Insurance ?.uantity is determined where these two costs are e.8)()2 ?EOHA3 'his refers to the optimal ordering .uantity discount. 6torage cost 9. +isks of holding inventories can be put as follows.8. 'he benefits or advantages of holding inventories area as follows. A. =bsolescence 2. AU Annual consumption. . ontinuous production. Availing .ue. 3. U arrying cost per unit. COST OF HOLDING INVENTORIES3 Dolding of inventory e(poses the firm to a number of risks and costs.uantity that will incur the minimum total cost #order cost and carrying cost% for an item of inventory.BENEFITS OF HOLDING INVENORIES3 Dolding of large and ade.=. =U =rdering cost per order. 'hat is* E:. )ith the increase in the order si5e. ?. the ordering cost decreases but the carrying cost increases and the optimal order.ual. each of the above mentioned costs have to be controlled through efficient inventory management techni.

PART . . INTERPRETATION.VI DATA DATAANANLYSIS ANANLYSISAND ANDINTERPRETATION.

011:$1B the company has 209B?<B.11 ?:33BB3.).td has always more ! sufficient working capital available to pay off its current liabilities.).11 @. In the year 0112$1: huge increase in the @.11 @.11 3311<90B.).11 <BB8B88. 'he following table provides the data relating to the net working capital of B M.11 urrent . in the year 0118$31 the company has ::B311:.11 33892222.11 :33<?08.11 and in the year in the year 011B$18 the company has of the company is increasing compared to the previous years..uidity 7osition of the Bahety chemicals ! minerals 7vt .11 8?88292.11 @.11 209B?<B.5(89 N#C "%%%%%% &%%%%%% 7%%%%%% 6%%%%%% N#C %%%%%% 4%%%%%% 3%%%%%% 2%%%%%% 1%%%%%% % 2%% -%6 2%%6-%7 2%%7-%& 2%%&-%" 2%%"-1% N#C Y+. . NET #OR$ING CAPITAL M CURRENT ASSETS-CURRENT LIABILITIS Oears 011?$12 0112$1: 011:$1B 011B$18 0118$31 urrent Asset 9?2<188.6) /.).11 0B081:8. BL RATIO ANALYSIS .). this means the company in a positive position ! @.11 ::B311:.11 @) 0?03??2.).11 81::23:..AL NET #OR$ING CAPITAL An analysis of the net working capital will be very help full for knowing the operational efficiency of the company. the @.).11 @.iabilities 0193?9<.6 INTERPRETATION3'he above chart shows that during the year 011?$12 the company has 0?03??2.11 932?2?8. :33<?08.11 <BB::2?. is ?:33BB3.11 C. has improved vary fast as compared to the previous years which show li.

)orking apital 'urnover +atio.)(.6(./ 0/+1 E2 =+ . +atio analysis of financial statements stands for the process of determining and presenting the relationship of items and group of items in the statements. which makes a ratio and the appraisal of the ratios of the ratios to make proper analysis about the strengths and weakness of the firm&s operations. "ebtors/ Accounts receivables 'urnover +atio.uantitative relationship between two accounting figures.5/3 1. LIHUIDITY RATIOS3 . TURNOVERIACTIVITY RATIOS3 'hese are the ratios which indicate the speed with which assets are converted or turned over into sales. V. floating or circulating assets. 'he term ratio refers to the numerical or . 'he short$term obligations are met by reali5ing amounts from current. /or this. 3.<().uidity +atio Absolute li.uidity refers to the ability of a firm to meet its current obligations as and when these become due.* 6. 2.i. Ale(ander Dall first presented it in 3883 in /ederal +eserve Bulletin. +atio Analysis is a process of comparison of one figure against other. I used some of the ratios to get the re.**.uired output. 4.INTRODUCTION3 +atio Analysis is a powerful tool of financial analysis. /ollowing are the ratios which can help to assess the ability of a firm to meet its current liabilities. reditors/Accounts 7ayables 'urnover +atio. 1.i. urrent ratio Acid 'est +atio / 4uick +atio / . Inventory 'urnover +atio.67(89 :. N./ -. 1.)+* I have used the ratio analysis in this project in order to substantiate the managing of working capital. 1. CURRENT RATIO3- . 3.uid ratio 2.0/ 5.6+ . 2.

during the year 0112$1: it was 0. It measures the firm&s ability to meet its current liabilities.B< 0. which e(press the relationship between the total current Assets and current liabilities.B: C.11 8?88292.11 81::23:. 0*3. A standard ratio between them is 0*3.9: <. It measures the firms& capacity to pay off current obligations immediately.9: and in the year 011:$1B it was <. Y+.iabilities 0193?9<.e.6) /.11 3311<90B. It indicates the availability of current assets in rupees for every one rupee of current liabilities.03 0. 1 %. 2. In the year 0118$31 the current ratio has increases 0.5(89 C066+8) R.td to meet its current liabilities.. C066+8) R.It is a ratio..)(.uid assets and current liabilities.B:. % 2%% -%6 2%%6-%7 2%%7-%& 2%%&-%" 2%%"-1% C066+8) R.11 932?2?8. ACID TEST RATIO I HUIC$ RATIO I LIHUIDITY RATIO3'his ratio establishes a relationship between . Dence it can be said that there is enough current assets in Bahety chemicals ! minerals 7vt .6 INTERPRETATION3It is seen from the above chart that during the year 011?$12 the current ratio was 0.11 urrent +atio 0. 2. 'he current ratio is above the standard ratio i.11 <BB::2?.11 33892222. An .)(..0< 0.B< due to increase in current liabilities.11 urrent .E(*()(+/ Oear 011?$12 0112$1: 011:$1B 011B$18 0118$31 urrent Assets 9?2<188. 3.11 0B081:8.)(.11 <BB8B88. 3 C066+88) R.3 C066+8) A//+)/ C066+8) L(.03. 2 1.0<. A ratio of greater than one means that the firm has more current assets than current liabilities claims against them. 'his shows the current ratio increases every year but in the year 011B$18 the current ratio was dropped to 0.)(.uickIli.

asset is li. in the year 0112$1: it increases to 3. Dence it shows that the li.6) /. M H0(:7 A//+)/ ?:066+8) .83 0B081:8. Because inventories normally re.11 3.5(89 H0(:7 R.uid assets include cash in hand and cash at bank. in the year 0118$31 it increases 0.uid if it can be converted in to cash immediately without a loss of valueS Inventories are considered to be less li.11 81::23:.)(.11 urrent .11 03231:3.uick ratio is above the standard ratio i.uick ratio.1<. 3. Absolute li.11 0.6 2%%&-%" 2%%"-1% INTERPRETATION3"uring the year 011?$12 the .11 33892222. 2 H0(:7 R.I8F+8). .)(.11 ?:933B:.uick ratio is 3*3. due to increase in .1< <BB8B88.11 :9<B?:?.uick ratio was 3.11 B<B1?0:.11 0<21233.11 3311<90B.e. 1.)(.uid ratio may be defined as the relationship between Absolute li.3? 932?2?8. H0(:7 R.11 0.11 8?B21??.?* 3.9B.62A C066+8) L(. 'he standard .<1. H0(:7 R.uid.11 4uick Assets <1<1299.3?. in the year 011B$18 it increases 0.11 3. 'he standard ratio is 1.<1 C..83 'his shows the company maintains satisfactory .)(. in the year 011:$1B the .11 <<<29<1.uick ratio increases to 0. Is considered satisfactory. 'he . 2. 'his ratio is also known as acid$test ratio.11 8?88292. 3*3. ABSOLUTE LIHUID RATIO3Absolute li.iabilities 4uick +atio 0193?9<.uate.uid assets and current liabilities. % 2%% -%6 2%%6-%7 2%%7-%& Y+ .uick assets.//+)/ .uire some time for reali5ing into cash.E(*()(+/ Oear 011?$12 0112$1: 011:$1B 011B$18 0118$31 urrent Assets 9?2<188..uidity position of the company is ade.11 0200813.. 1 %.9B <BB::2?.11 0.11 Inventories 3?<09??.

fast stock turnover and a low stock level.e.3 %.<3 1.11 31<<3?0. I8F+8).)(.)(.uidity position of the company is satisfactory. 1. M C.09 1.5(89 AE/.1 %.6 INTERPRETATION3 "uring the year 011?$12 the Absolute li. A low stock turnover ratio means the business is slowing down or with a high stock level.9:. sold during the year.*0)+ L(G0(1()2 R.AE/.. %.)(. 'his measures the efficiency of the sales and stock levels of a company.2 %./.3 %.E(*()(+/ Oears 011?$12 0112$1: 011:$1B 011B$18 0118$31 ash ! Bank Balance 98<:90.11 <BB8B88.)(.uidity ratio increases every year but it is below the standard ratio. ' B.uidity ratio has increases 1. %.F+6 R.62 T068. Dence it shows that the li.<3 and in the year 011:$1B it was 1.iabilities 0193?9<.1 %. In the year 0118$31 the Absolute li.<2.11 0B081:8.99 1.*0)+ L(G0(1()2 R.uidity ratio was 1. Y+.% % 2%% -%6 2%%6-%7 2%%7-%& 2%%&-%" 2%%"-1% AE/.11 301?221.uidity +atio 1.*0)+ L(G0(1()2 R.8:+ C066+8) L(.11 Absolute . M N+) S.*.*+/ .2 %.11 932?2?8. A high ratio means high sales..*0)+ L(G0(1()2 R.4 %.99 'his shows the Absolute li.11 <BB::2?.4 AE/. during the year 0112$1: it was 1.11 38:B8<B.11 3:01B3?.9: C. INVENTORY TURNOVER RATIO3Inventory turnover ratio is the ratio. in the year 011B$18 it was 1.6) /. %.87 B.. which indicates the number of times the stock is turned over i.)(.09.11 urrent .<2 1.i.

)(.11 losing inventory 3?<09??.11 03231:3.)(.:? times.1 M D.98 times.2/ (8 .<2 times . 'here was a subse. 'his shows the company has more sales. It is seen from the above chart that "uring the year 011?$12 the Inventory t/o ratio is 30.89 times respectively.6 I8F+8).C*.6) /. But in the year 011:$1B it decreased to B.F+6 R.<2 'imes 39.98 'imes B.uent increase in the year 011B$18 and 0118$ 31 to 39.F+6 6.6 .:? 'imes 39.11 <3<03008.5(89 I8F+8). 2% 1& 16 14 ITR 12 1% & 6 4 2 % 2%% -%6INTERPRETATION3 2%%6-%7 2%%7-%& 2%%&-%" 2%%"-1% I8F+ 8)./(89 I8F+8).62 )068 .11 90<9?2?3..11 <<<29<1.2B 'imes 3:. INVENTORY HOLDING PERIOD 3'his period measures the average time taken for clearing the stocks.11 0200813.11 Inventory 'urnover ratio 30..*1(89 P+6(. Y+ .11 <B982192.62 Oear 011?$12 0112$1: 011:$1B 011B$18 0118$31 @et 6ales 38?901B3. I8F+8).11 0:B890B?.F+6 R. 2. in the year 0112$1: it increased to 39.62 T068. It indicates that how many days& inventories take to convert from raw material to finished goods.62 H.2B times and 3:.62 T068.11 0<21233. 2+.89 'imes C.)(.

it increased to 9<.5(89 I8F+8).Oear 011?$12 0112$1: 011:$1B 011B$18 0118$31 "ays in a Oear <2? <2? <2? <2? <2? Inventory 'urnover +atio 30.38 days in the year 0112$1:. we have taken the total net sales instead of the credit sales.38 "ays 9<. M N+) S.6) /.22 days in the year 011:$1B..B2 days and 01.F+6 R.*+/ AF+6.B2 "ays 01.<9 days respectively.1 % 4 4% 3 3% 2 2% 1 1% % 2%% -%6 2%%6-%7 2%%7-%& Y+.6/ T068.2B 'imes 3:. 'his shows the company is minimi5ing these inventory$holding days thereby to increase the sales. because the credit sales information has not available for the calculation of "'+.2/ I8F+8).uent decrease in the year 011B$18 and 0118$31 to 09.1.62 H. DEBTORS I ACCOUNTS RECEIVABLES TURNOVER RATIO3"ebtor&s turnover ratio indicates the speed of debt collection of the firm.<2 'imes 39. It decreased to 0?..<9 "ays C..:? 'imes 39.2< "ays 0?.)(. D+E).22 "ays 09. It was 0B. 3. there was a subse.2< days in the year 011?$12.6/ N.6 N0=E+6 . 'his ratio computes the number of times debtors #receivables% has been turned over during the particular period. .9+ D+E).*1(89 P+6(.1 2%%&-%" 2%%"-1% INTERPRETATION3 Inventory holding period fluctuating over the years.*1(89 P+6(.62 H.98 'imes B.)+3 in B M.89 'imes Inventory Dolding 7eriod 0B.

.BB 'imes 2.)(.11 90<9?2?3.11 98?B?0:.11 9<??<2?. It reduces the chances of bad debts. DTR 1% & 6 4 2 % 2%% -%6 2%%6-%7 2%%7-%& Y+ .1 M D.5(89 D+E).F+6 R.32 times and 8. Y+.F+ 6 R.6/ T068.99 times in the year 011:$1B but it decreased to 31. 4.:0 'imes C..<0 times in the year 0112$1:.11 0:B890B?. A longer collection period implies too liberal and inefficient credit collection performance. 1& 16 14 12 D+ E).8 P+6(.**+:)(.)(. DEBTORS COLLECTION PERIOD 3"ebtors collection period measures the .11 "ebtors 'urnover +atio B. 'his shows the company is not collecting debt rapidly.11 <3<03008.6 D+E).6 2%%&-%" 2%%"-1% INTERPRETATION3 It is clear that debtor turnover ratio fluctuating over the years.6/ T068.uality of debtors since it measures the rapidity or the slowness with which money is collected from them a shorter collection period implies prompt payment by debtors.2/ (8 . It decreased to 2.6/ T068.:0 'imes in the year 011B$18 and 0118$31 respectively. It again increased to 3?.99 'imes 31.32 'imes 8.9+ C.BB times in the year 011?$12.<0 'imes 3?.11 3B1?89B. AF+6. It was B.11 Average "ebtors 0013<B3.Oear 011?$12 0112$1: 011:$1B 011B$18 0118$31 @et 6ales 38?901B3.11 <:B:0:9.11 <B982192.F+6 R.)(..6) /.

8 P+6(.8 P+6(.31 "ays ?:.32 'imes 8.BB 'imes 2. 'his ratio is calculated as follows.80 days and <:..1.:0 'imes "ebtors ollection 7eriod 93.**+:)(.5(89 D+E).6/ C.2/ % 4% 3% 2% 1% % 2%% -%6 2%%6-%7 2%%7-%& Y+.6/ C.F+6 R..31 days in the year 011?$12. 'here was a subse.6/ N.29 days.6 2%%&-%" 2%%"-1% D+E).:? days in the year 0112$1:. M N+) P06:.11 reditors 'urnover +atio 2. CREDITORSIACCOUNTS PAYABLES TURNOVER RATIO3reditor&s turnover ratio is the ratio. Oear 011?$12 @et 7urchases 33283181.. we have taken the total 7urchases instead of the credit purchases.9+ C6+1().6/ T068..?? "ays C. .)(. C6+1().**+:)(.29 "ays <?. It was 93.6) /.11 Average reditors 32:<?3?.Oear 011?$12 0112$1: 011:$1B 011B$18 0118$31 "ays in a Oear <2? <2? <2? <2? <2? "ebtors 'urnover +atio B. because the credit purchases information has not available for the calculations of '+.1 7% 6% N0=E+6 .99 'imes 31./+/ AF+6.uent increase in the year 011B$18 and 0118$ 31 to <?. It increased to ?:. but in the year 011:$1B it decreased to 0<.?? days respectively.8B 'imes .)+3 In the B M. which indicates the number of times the debts are paid in the year.80 "ays <:.1 INTERPRETATION3 "ebt collection period changing over the years. 'his shows the inefficient credit collection performance of the company.:? "ays 0<.<0 'imes 3?.

1% " & 7 CTR 6 4 3 2 1 % 2%% -%6 2%%6-%7 2%%7-%& Y+.1 C6+1().F+6 R.11 ?.11 <1?:B98..0112$1: 011:$1B 011B$18 0118$31 3:::B2:?.11 0<21?::<.6) /.BB 'imes B.5(89 C6+1().6/ T068.6/ T068.6 2%%&-%" 2%%"-1% .:3 "ays ?3.3< 'imes B..18 times in the year 0112$1:.6/ T068.F+6 R.18 'imes 4% :. 6.6 2%%&-%" 2%%"-1% C6+1().38 "ays 93.6/ P.11 0298:B3.1 M D.1 2%%7-%& Y+.)(.31 "ays N0=E+6 .6/ P.11 02?B888.31 "ays 93.11 <98030:.5(89 C6+1(). there was a subse.)(...08 "ays :3. It decreased to ?.F+6 R.BB times respectively.)(.2=+8) P+6(.1. It was 2.18 'imes :. Y+..BB 'imes C.2=+8) P+6(.2/ (8 .2/ C6+1().9+ P.8B 'imes % ?. &% 7% Oear 011?$12 0112$1: 011:$1B 011B$18 0118$31 "ays in a Oear <2? <2? <2? <2? <2? reditors 'urnover +atio 2.8B times in the year 011?$12.uent increase in the year 011:$1B and 011B$18 to :.11 3BB82B0B.BB 'imes 2% 6% 1% % 2%% -%6 2%%6-%7 Average 7ayment 7eriod ?0.3< times and B.6) /. AF+6. It shows that company has making prompt payment to the creditors.2=+8) P+6(.BB 'imes B.3< 'imes 3% B. In the year 0118$31 it is same as compared to 011B$18.11 0:3922<8. INTERPRETATION3 It is clear that creditor turnover ratio changing over the years.6 C. CREDITORS PAYMENT PERIOD3'he reditors 7ayment 7eriod represents the average number of days taken by the firm to pay the creditors and other bills payables.

31 days respectively. 'his ratio measures the efficiency with which the working capital is used by the firm.. #.11 209B?<B. A higher ratio indicates efficient utili5ation of working capital and a low ratio indicates otherwise.11 0:B890B?.9B 'imes 9. It increased to :3.67(89 C. 7.6) /.* T068.* C.11 ) '+ :. #CTR Oear & 011?$12 7 0112$1: 6 011:$1B 011B$18 0118$31 4 3 2 1 % " @et 6ales 38?901B3.99 'imes 2%% -%6 2%%6-%7 2%%7-%& 2%%&-%" 2%%"-1% Y+.:3 days in the year 0112$1:. #OR$ING CAPITAL TURNOVER RATIO3'his ratio indicates the number of times the working capital is turned over in the course of the year.INTERPRETATION3 Average payment period changing over the years.11 90<9?2?3. But a very high working capital turnover is not a good situation for any firm.5(89 #.* T068. It was ?0.11 ?:33BB3.11 <B982192.)(.38 days and 93..:? 'imes ?. In the year 0118$31 it is same as compared to 011B$18.11 <3<03008. It indicates that the company has taken the steps to prompt payment to the creditors.)(. But in the year 011:$1B and 011B$18 it decreased to ?3.6 .67(89 C.11 :33<?08.<().67(89 C.<().<().F+6 R.93 'imes #CTR ?.11 ::B311:.F+6 R.92 'imes ?. M N+) S.*+/ N+) #.11 @et )orking apital 0?03??2.08 days in the year 011?$12.

92 times. But it increases in the year 011B$18 and 0118$31 to ?. working capital also increases. CL FUND FLO# STATEMENTS 7rinciples of working capital for calculation purpose CURRENT ASSETS 1 3 If the current assets increase as a result of this.uent decrease in the year 0112$1: and 011:$1B to ?.:? timesS there was a subse.99 times respectively. :. .INTERPRETATION3 'he working capital t/o ratio is fluctuating year to year that was high in the year 011?$12.93 and ?. CURRENT LIABILITIES If the current liabilities increases as a result of this working capital decreases.9B times and 9. 'his shows the company is utili5ing working capital effectively. If the current assets decreases as a result of this working capital decreases. If the current liabilities decreases as a result of this working capital Increase.

C.* I8:6+.<().11 0013<B3..11 38<1B3./+ 92BB?1.11 39BB00.11 VV 2<B0.*3 'he purpose of preparing this statement is for finding out the increase or decrease in working capital and to make a comparison between two financial years.89+/ (8 #.<().11 VV 21177 6.* A/ ..%% 21 3471.).67(89 :.11 <2B10B.<().89+/ (8 #.)+=+8) ./+ (8 #.%% 6.11 VV 39<?<<.* E--+:) .* C066+8) L(.11 39<BB31.8 31-32%% 0113<1?.67(89 C.%%N "3%4&7.%% TOTAL .8 5.%% 2 21 VV 2 21 6.)+=+8) .%%N 2 21 6.11 3<9<29.* C066+8) A//+)/ CURRENT LIABILITIES 6undry creditors 7rovisions ?BAT.11 4 63%"".%% 32:<?3?.8 31-32%%6 3?<09??.11 VV 880?.11 A/ .6)(:0*.67(89 C.).%% 36&%& .E*+ 13 S).E(*()(+/ ?AA-?BA N+) #.%% 2%41 43. T./+ VV :20?:3.11 ?1<22:.S).+ Y+.67(89 C.11 ?33?23.* -.11 VV 399?B..C.6 ).11 98<:90.<().6/ CURRENT ASSETS Inventories 6undry debtors ash ! Bank balance =ther current assets .11 3B2288..%% VV "2% 62.11 I8:6+.11 2:<01.oans and Advances ?AAT.%% 321238?.6 2%% -2%%6 P.67(89 C.11 4271227.11 VV D+:6+.%% 36&%& .<().

11 98?B?0:.).* C066+8) A//+)/ CURRENT LIABILITIES 6undry creditors 7rovisions ?BAT.67(89 :.11 and decrease in 7rovisions by +s 39<?<<.%% 711&&1.11 :B021.89+/ (8 #.. . other current assets by +s 399?B.%% 32:<?3?.%% TOTAL INTERPRETATION3 .* 4 63%"".C.%% <98030:.%% VV 711&&1.11 VV VV 3B3B230.11 3B2288.* C066+8) L(.11 301?221.6)(:0*./+ VV VV VV :1?20.67(89 C.11 39BB00.8 5.11.<(). ash ! Bank balance by +s 880?.E*+ 23 S).11 0:?:392.6 ).* -.11 0:231.67(89 C.8 31-32%%6 3?<09??.%% 3&&776 .11 A/ .11 0013<B3.11 <2B10B. Increase current assets such as 6undry debtors by +s :20?:3.). T.%% 2 21 6.)+=+8) ./+ (8 #.. 'his is because of 3. Increase in current liabilities such as in 6undry creditors by +s 2:<01.%%N 1%71%". it is seen that during the year 0119$1? and 011?$12 there was a net increase in working capital of +s <2B1B?.11.uate working capital in Bahety chemicals ! minerals pvt ltd.+ Y+.11 2%41 43.11 VV CURRENT ASSETS Inventories 6undry debtors ash ! Bank balance =ther current assets .<()./+ 20B232.%% VV 1%71%".8 31-32%%7 03231:3.oans and Advances ?AAT.11.<().oans and Advances by +s 2<B0.11 " ""646. It indicates an ade.11 <8?2<B.11 :3383B.INTERPRETATION3 In the above table.* I8:6+.E(*()(+/ ?AA-?BA N+) #.%% 31"%32 .67(89 C.11.11 I8:6+.%%N 711&&1.11 338230B.* P.%% 31"%32 .11 VV 3118908.6 2%%6-2%%7 E--+:) .11. And decrease in Inventories by +s 92BB?1..11 D+:6+.<(). 0.11 98<:90.6/ A/ .11.11.

).11 3B82B<.11 032<91.11 and decrease in 6undry debtors by +s <3?0?:8.* P.In the above table.)+=+8) .67(89 :. ash ! Bank balance by +s 33<23B.8 31-32%%& <<<29<1.oans and Advances by +s 3118908.6 ). And decrease in other current assets by +s :1?20.11 3:808B.oans and Advances by +s 3?320:2. ompare to 0119$1? and 011?$12. 'here is Increase in current assets such as Inventories by +s 20B232.11. 'here is Increase in current assets such as Inventories by +s 33:?<?8.11..11 "%77617.11..11 301?221.%% TOTAL INTERPRETATION3 In the above table.11 31<<3?0.8 31-32%%7 03231:3.* C066+8) A//+)/ CURRENT LIABILITIES 6undry creditors 7rovisions ?BAT.* C066+8) L(.<().11 98?B?0:.%% 366 7. other current assets by +s 33390<.11 <8?2<B. it is seen that during the year 0112$1: and 011:$1B there was also net increase in working capital by +s ?<22?:. 7rovisions by +s 0:231.11 As 'his is because 3.11 :B021. 0.%% 711&&1.11 0:30919.* I8:6+.11./+ 33:?<?8.11 3:0?1B.6/ A/ .E(*()(+/ ?AA-?BA N+) #.11 3?320:2.11 A/ . 6undry debtors by +s 0:?:392.11 338230B. T. ash ! Bank balance by +s :3383B.11.%% 2&2"%7".11 VV VV 33390<. 'here is Increase in current liabilities such as 6undry creditors by +s 3B3B230.67(89 C.11 3B1?89B.C.11.* -.67(89 C.%% 0298:B3.11. .89+/ (8 #.oans and Advances ?AAT.%%N 3&61744.%% <98030:.8 5.11.<().+ Y+.<()./+ (8 #.11 B90<92.%%N 624& 3&.6 2%%7-2%%& E--+:) .11. .%% 366 7.11 VV VV 3&&776 .6)(:0*.67(89 C.)./+ VV <3?0?:8.11 VV VV CURRENT ASSETS Inventories 6undry debtors ash ! Bank balance =ther current assets . 'his is because 3.%% VV 624& 3&.11 D+:6+.E*+ 33 S).<().11. As compare to 011?$12 and 0112$1:.%% 624& 3&.11. .11.* " ""646. it is seen that during the year 011?$12 and 0112$1: there was huge net increase in working capital by +s <381<0?.11 I8:6+.%% VV 3&61744.

oans and Advances ?AAT.89+/ (8 #..11 I8:6+.* C066+8) A//+)/ "%77617.). .11 012012.11.8 5.11 31<<3?0.* &64""1.11 and decrease in Inventories by +s :3<?08.%% ?AA-?BA N+) #.11 VV VV 803B.11 VV D+:6+. =ther current assets by +s 32?0<. 'here is Increase in current assets such as 6undry debtors by +s 38B3<02.C.<().11.0.11 02220<0.11.* -.8 31-32%%& <<<29<1.11 VV VV VV 923:0.%% TOTAL INTERPRETATION3 In the above table.67(89 C.<().%% I8:6+. 'here is "ecrease in current liabilities such as 6undry creditors by +s B90<92..* 624& 3&.% % CURRENT LIABILITIES 6undry creditors 7rovisions ?BAT.%% 3&&"&"".11 2B:22<.11./+ :3<?08.11.<().6)(:0*. .67(89 :.+ Y+.E(*()(+/ 0298:B3.6/ E--+:) . 'here is Increase in current liabilities such as 6undry creditors by +s 803B.11 3B1?89B.8 31-32%%" 0200813.67(89 C.11 30<1811.%% 11%%342&.oans and Advances by +s 923:0.6 2%%&-2%%" P.* A/ . 'his is because 3./+ VV 38B3<02.%%N 2667 12.).67(89 C.11 32?0<. 7rovisions by +s 31?3210.11 A/ .11 <:B:0:9.* C066+8) L(.%% VV 7113 2".11 3:808B.%% &64""1.11 31?3210.<().11 3B82B<.11.11 3:01B3?. 7rovisions by +s 032<91.)+=+8) .11.11 2&2"%7".11 02?B888.%% VV 2667 12. T.11 0:30919.%%N 7113 2"./+ (8 #.11 CURRENT ASSETS Inventories 6undry debtors ash ! Bank balance =ther current assets . 0. it is seen that during the year 011:$1B and 011B$18 there was also net increase in working capital by +s B29883.11. ash ! Bank balance by +s 2B:22<.6 ).%% 7113 2".11 As compare to 0112$1: and 011:$1B.E*+ 43 S).

/+ (8 #.11 VV <888<?.11 012012.%% 66747&.67(89 C. 'here is Increase in current assets such as 6undry debtors by +s ?2B183.11 VV VV 01203.6/ A/ .11.11 .11 D+:6+.%%N &27%"&1.11. .<().11 VV CURRENT ASSETS Inventories 6undry debtors ash ! Bank balance =ther current assets .%% 77&1%%7.)+=+8) .).8 31-32%1% 0<21233.11 02220<0.11 0?B30< .11 331:B31. 'his is because 3./+ 020081.%%N 134"23".. 0.11 VV 30<181.11 VV CURRENT LIABILITIES 6undry creditors 7rovisions ?BAT.% % <1?:B98.11 3B??B?.* I8:6+.11 <8BB?1.* P.C.6)(:0*.% % 11"46666.* -.11 <:B:0:9.89+/ (8 #.11 and decrease in Inventories by +s 020081.%% TOTAL INTERPRETATION3 In the above table.11 A/ .67(89 :.11 and decrease in 7rovisions by +s30<181.%% 7113 2".8 5.%% 416 6 ".11 30<1811.11 <12232:.11 38:B8<B.+ Y+.%% VV &27%"&1.11 I8:6+. it is seen that during the year 011B$18 and 0118$31 there was also net increase in working capital by +s 33?:9?0.67(89 C. other current assets by +s 01203./+ VV ?2B183.oans and Advances ?AAT.%% 66747&.6 ).<().* C066+8) L(.11 3:01B3?.T.).oans and Advances by +s <888<?.11 9<??<2?.6 2%%"-2%1% E--+:) .E*+ 3 S).<().E(*()(+/ ?AA-?BA N+) #. ash ! Bank balance by +s 0?B30<.11 3&&"&"".* 02?B888.* C066+8) A//+)/ 11%%342&.11 As compare to 011:$1B and 011B$18.%% VV 134"23".8 31-32%%" 0200813. 'here is Increase in current liabilities such as 6undry creditors by +s <8BB?1..<().11.11.67(89 C.

FINDINGS. FINDINGS.VII FINDINGS. CONCLUSIONS. SUGGESTIONS SUGGESTIONS' ' CONCLUSIONS. .PART .

<1 respectively. In the year 011B$18 it has decreased by ?. SUGGESTIONS.8? times as compared to 011:$1B and in the last year 0118$0131 it has again increased by 1. reditor&s turnover ratio has increased in the years of 011:$1B and 011B$18. )orking capital of the Bahety hemicals ! Minerals 7vt .99 times as compared to 011B$18.td.02 times as compared to 011B$18. Inventory turnover ratio is very low in the year 011:$1B.td has higher current and .  "ebtor&s turnover ratio is very high in the year 011:$1B.  'he Bahety hemicals ! Minerals 7vt . It is same  in the last year 0118$31 as compared to 011B$18.uick ratios are i.0B times as compared to 011:$1B and in the last year 0118$31 it has again decreased by 1.e.<0 times as compared to 011:$1B and in the last year 0118$31 it has again increased by <.1< times.  )orking capital turnover ratio is very low in the year 011:$1B.. In the year 011B$18 it has  increased by 2. was increasing and showing positive working capital per year. In the year 011B$18 it has increased by 1. . 0.B: and 0.

uirement.  'he company has sufficient working capital and has better li. is satisfactory and it has to maintain it further. 6o the )orking capital management. )orking capital of the company has increasing every year. reditor&s turnover ratio has increasing from 011:$1B to 011B$18 and in the last year 0118$0131 it is same as compared to 011B$18. By efficient utili5ing this short$term capital. By efficient utili5ing this short$term capital.uidity position. 'his is good sign for the company. 7rofit also increasing every year this is good sign for the company. ompany is making prompt payment to its creditors.  'he company should take precautionary measures for investing and collecting funds from receivables and to reduce the bad debts.  .uidity position. to run the business long term.uick ratios are almost up to the standard re.  'he company is utili5ing working capital effectively this is good for the company.  'he company has sufficient working capital and has better li. =n$time payment to suppliers will increase the credibility of the firm. It has to maintain it further. It has to maintain it further. Bahety hemicals ! Minerals 7vt . It has maintain it further to survive in the market. then it should increase the turnover.td. then it should increase the turnover.  'he urrent and .

CONCLUSIONS. which could otherwise be effectively utili5ed for some productive purpose. to analy5e the financial position of the company. is good. are should be taken by the company not to make further investments in current assets. the company is moving forward with e(cellent management.td. 'he study on working capital management conducted in Bahety hemicals ! Minerals 7vt . as it would block the funds. 'he company&s financial position is analy5ed by using the tool of annual reports from 011?$12 to 0118$ 31. .uidity position is very good )ith regard to the investments in current assets there are ade. 'he financial status of Bahety hemicals ! Minerals 7vt . this is good sign for the company. In the last year the inventory turnover has increased.td. 'he company&s li. =n the whole.uate funds invested in it.

 FINANCIAL STATEMENT.  BIBILOGROPHY. FINANCIAL STATEMENT 2%%"-2%1% .

8DT.oans Gnsecured .5 –H(** P0E*(/.11 AMOUNT ASSETS FIXED ASSETS Iross block .9+=+8) T+B)D P6.8.11 331:B31.11 <28<:29..11 B1318B.11 <198380.%% 0<21233.11 0?:92:0.(D 2%%7.82 L(=()+1D N+5 D+*.11 <12232:.PROVISIONAL BALANCE SHEET AS AT 31/) MARCHD 2%1% LIABILITY SOURCES OF FUNDS 6hare capital +eserves and surplus LOAN FUNDS 6ecured .=<.ess* "epreciation @et Block apital )I7 CURRENT ASSETS Inventories 6undry debtors ash ! bank balance =ther current assets .oans "eferred ta( liability CURRENT LIABILITIES 6undry creditors 7rovisions <1?:B98.11 3111111.(89 C.$.8 I P. M:G6.11 ?:::913.%% 3183<<21.oans and Advances TOTAL 21417&31.).11 8B0:031.11 38:B8<B.11 ?3<?8?8.(8D F(8./+/D TH E1()(.11 AMOUNT BIBLIOGRAPHY TEXT BOO$S  M.11 21417&31.11 3B??B?.$ !.11 9<??<2?.* M.E*+=O/ C.Y. .8:(.

69 555.:)(:+D TH E1()(.+=(:.+)2 C.81 P6.9.816.:..)6..= .5 –H(** P0E*(/.(89 C.8D T.  A880.*/ P6(F..62 ./.(D 2%%1.= 555.)+ L(=()+1. M:G6.D F(8.+.6) . P6.:.* R+<.5(7(<+1(.B..9*+.).* M.*/ ' M(8+6.9+=+8) T.8/)0)..88.82 L(=()+1D N+5 D+*. #EB SITE VISITED 555.8:(.6/.=<..8. C.