A

PROJECT REPORT ON

WORKING CAPITAL MANAGEMENT OF THE L & T.

UNDER SUPERVISION OF:

-------------------SUBMITTED BY
NAME ENROLLMENT NO STUDY CENTER CODE REGIONAL CENTER : : : : MRS. A.R. RAJALAKSHMI

Su !"##$% "& '()#"(* +u*+"**!$&# ,+ #-$ )$.u")$!$&#/ +,) .u(*"+0"&1

M(/#$) ,+ Bu/"&$// A%!"&"/#)(#",& 2FINANCE3

4566
1

WORKING CAPITAL MANAGEMENT OF THE L & T.

Under Supervision of
Submitted By: Name Programme Code Enrollment No. Name of t e Study Centre Study Centre Code : : : : MBA (FINANCE)

CERTIFICATE OF ORIGINALITY

" i# i# to $ertify t at t e %ro&e$t re%ort entitled W,)7"&1 C('"#(* M(&(1$!$&# ,+ #-$ L&T. #ubmitted to I&%")( G(&%-" N(#",&(* O'$& U&"8$)/"#0 in %artial fulfillment of t e re'uirement for t e a(ard of t e )egree of M(/#$) ,+ Bu/"&$//

A%!"&"/#)(#",& i# an aut enti$ and original (or* $arried out by +A.R.

RAJALAKSHMI (it 999999999. Enrolment No. 999999. under t e guidan$e of

" e matter embodied in t i# %ro&e$t i# genuine (or* done by t e #tudent and a# not been #ubmitted ( et er to t i# ,ni-er#ity or to any ot er ,ni-er#ity . In#titute for t e fulfillment of t e re'uirement of any $our#e of #tudy.

/////////.

...////////.

Signature of t e Student: )ate:.//////..

Signature of t e 0uide )ate:///////

ACKNOWLEDGEMENT
2it Candor and Plea#ure I ta*e o%%ortunity to e3%re## my #in$ere t an*# and

obligation to my e#teemed guide///. It i# be$au#e of i# able and mature guidan$e and $o4o%eration (it out ( i$ it (ould not a-e been %o##ible for me to $om%lete my %ro&e$t.

It i# my %lea#ant duty to t an* all t e #taff member of t e $om%uter $enter ( o ne-er e#itated me from time during t e %ro&e$t.

Finally5 I gratefully a$*no(ledge t e #u%%ort5 en$ouragement 6 %atien$e of my family5 and a# al(ay#5 not ing in my life (ould be %o##ible (it out 0od5 " an* 7ou8

2A.R. RAJALAKSHMI3

DECLARATION
I ereby de$lare t at t i# %ro&e$t (or* titled W,)7"&1 C('"#(* M(&(1$!$&# ,+ #-$ L&T. i# my original (or* and no %art of it a# been #ubmitted for any ot er degree %ur%o#e or %ubli# ed in any ot er from till date.

(A.R. RAJALAKSHMI)

WORKING CAPITAL MANAGEMENT OF THE L & T.

TABLE OF CONTENTS
S. NO.
1.

CONTENTS

PAGE NO.

"itle of t e Pro&e$t//////////.//////.//..; Introdu$tion //..////////////////..../..< =e-ie( of >iterature /../////////////..//.1: ?b&e$ti-e# of t e Study///////////////./.9< =e#ear$ Met odology.///////////////.....9@ )ata Analy#i#////////.. /////////./.....:B Con$lu#ion and Ma&or Find#/.///////././/.//..<! =e$ommendation and >imitation ////////////.<9 Bibliogra% y////////...////////////<:

!. 1. 9. :. A. ;. <. @.

CHAPTER : 6
INTRODUCTION

COMPANY PROFILE:

>ar#en 6 "oubro >imited (>6") i# a te$ nology5 engineering5 $on#tru$tion and manufa$turing $om%any. It i# one of t e large#t and mo#t re#%e$ted $om%anie# in IndiaC# %ri-ate #e$tor. Se-en de$ade# of a #trong5 $u#tomer4fo$u#ed a%%roa$ and t e $ontinuou# 'ue#t for (orld4$la## 'uality a-e enabled it to attain and #u#tain a# #een o-er#ea# leader# i% in all it# ma&or line# of bu#ine##. >6" a# an international %re#en$e5 (it a global #%read of offi$e#. A t ru#t on international bu#ine## earning# gro( #ignifi$antly. It $ontinue# to gro( it# o-er#ea# manufa$turing foot%rint5 (it fa$ilitie# in C ina and t e 0ulf region. " e $om%anyC# bu#ine##e# are #u%%orted by a (ide mar*eting and di#tribution net(or*5 and a-e e#tabli# ed a re%utation for #trong $u#tomer #u%%ort. >6" belie-e# t at %rogre## mu#t be a$ ie-ed in armony (it t e en-ironment. A $ommitment to $ommunity (elfare and en-ironmental %rote$tion are an integral %art of t e $or%orate -i#ion. M.# >ar#en 6 "oubro >td. ECC )i-i#ion i# %re#tigiou# organiDation a-ing bu#ine## (orld(ide5 it# ECC )i-i#ion underta*e engineering $ontra$t# of -ariou# $on#tru$tion in t e field of Ele$tri$al5 Me$ ani$al 6 Ci-il Engineering. " e Com%any a-ing it# ead'uarter at C ennai5 and ( ole India i# di#tributed in region# a-ing re#%e$ti-e regional ead'uarter#5 -iD. Mumbai5 A madabad5 Eol*ata5 )el i5 Fyderabad5 C andigar et$. ( i$ $oordinate all a$ti-itie# of #ite# (it in t eir region.

<

C atti#gar #tate a-e ri$ natural re#our$e#5 $oal i# found in abundan$e t u# -ariou# t ermal %o(er %lant are e#tabli# ed at -ariou# %la$e#5 Si%at Su%er " ermal Po(er Plant i# one of t e bigge#t " ermal Po(er Plant5 ( erein our $om%any e3e$ute $on#tru$tion of Boiler Ere$tion 6 Ele$tri$al Cabling (or*# and #ome ot er mi#$. (or*#. ?ur Prin$i%al em%loyer i# M.# National " ermal Po(er Cor%oration >td. " e (or*for$e# $on#i#t of !:BB (or*men and Engineer# and #taff in -ariou# $adre5 t e (or*for$e $on#i#t of em%loyee# from all o-er India.

O'$)(#"&1 D"8"/",&/:

Engineering 6 Con#tru$tion Pro&e$t# (E6C) Fea-y Engineering (FE)) Con#tru$tion Po(er Ele$tri$al 6 Ele$troni$# (EB0) Ma$ inery 6 Indu#trial Produ$t# (MIP)) I" 6 "e$ nology Ser-i$e# Finan$ial Ser-i$e# =ail(ay Pro&e$t

L&T;/ S"1&(#u)$ ,+ E<=$**$&=$ "/ $8"%$&# ,&:

Fydro$arbon %ro&e$t# e3e$uted in India5 t e Middle Ea#t and Sout Ea#t A#ia. Po(er %ro&e$t# e3e$uted in India5 t e 0ulf and Sri >an*a. " e (orldC# large#t $oal ga#ifier made in India and e3%orted to C ina " e (orldG# bigge#t E? rea$tor for a %etro$ emi$al $om%le3 in t e 0ulf " e (orldG# large#t FCC regenerator for a refinery A#iaG# ig e#t -iadu$t " e (orldG# longe#t lime#tone $on-eyor >6" %layed a $riti$al role in building IndiaG# fir#t nu$lear %o(ered #ubmarine >6" %layed a ma&or role in IndiaC# maiden moon mi##ion @

HISTORY OF CONCERN
" e e-olution of >6" into t e $ountryC# large#t engineering and $on#tru$tion organiDation i# among t e mo#t remar*able #u$$e## #torie# in Indian indu#try. >6" (a# founded in Bombay (Mumbai) in 6>?@ by t(o )ani# engineer#5 Fenning Fol$*4>ar#en and Soren Eri#tian "oubro. Bot of t em (ere #trongly $ommitted to de-elo%ing IndiaC# engineering $a%abilitie# to meet t e demand# of indu#try.

Fenning Fol$*4>ar#en (9.;.1@B; 4 !;.;.!BB1)

Soren Eri#tian "oubro (!;.B!.1@BA 9.1.1@<!) Beginning (it t e im%ort of ma$ inery from Euro%e5 >6" ra%idly too* on

engineering and $on#tru$tion a##ignment# of in$rea#ing #o% i#ti$ation. "oday5 t e $om%any #et# global engineering ben$ mar*# in term# of #$ale and $om%le3ity.

1B

EARLY DAYS
Fenning Fol$*4>ar#en and Soren Eri#tian "oubro5 #$ ool4mate# in )enmar*5 (ould

THE JOURNEY

not a-e dreamt5 a# t ey (ere learning about India in i#tory $la##e# t at t ey (ould5 one day5 $reate i#tory in t at land. In 6>AA5 ECC (a# in$or%orated. Around t en5 >6" de$ided to build a %ortfolio of In 6>?@5 $ollaboration#. t e t(o friend#By de$ided forgo t e $omfort# of (or*ing Euro%e5 andof foreign 6>AB5 to t e Com%any re%re#ented Briti# in manufa$turer# #tarted t eir u#ed o(n to o%eration in India. All t#u$ ey a# ad (a# a dream. And t e $ourage e'ui%ment manufa$ture %rodu$t# ydrogenated oil#5 bi#$uit#5 #oa%# to and dare. gla##. " In eir 6>AB fir#t 5 offi$e Mumbai (Bombay) (it (a# #o #mall t at only one of t e %artner# >6" in #igned an agreement Cater%illar "ra$tor Com%any5 ,SA5 for $ould u#e t e eart offi$e at a time8 mar*eting mo-ing e'ui%ment. At t e end of t e (ar5 large number# of (ar4 #ur%lu# e'ui%ment (ere a-ailable at attra$ti-e %ri$e#5 but t e In t e earlyCater%illar year#5 t ey re%re#ented )ani# manufa$turer# of dairy e'ui%ment re'uired (ereBut beyond e #tart $a%a$ity ofSe$ond t e %artner#. " i# in %rom%ted t em mode#t retainer. (it tt e of t e 2orld 2ar 6>?>5 im%ort# finan$e# for a to rai#e (ere

additional e'uity $a%ital5 and on ;t February 6>AC 5 >ar#en 6 "oubro >imited re#tri$ted5 $om%elling t em to #tart a #mall (or*4# o% to underta*e &ob# Pri-ate and %ro-ide (a# born. #er-i$e fa$ilitie#. Inde%enden$e andof t )enmar* e #ub#e'uent demand for te$ nology e3%erti#e offered >6" 0ermanyC# in-a#ion in 6>A5 #to%%ed #u%%lie# ofand )ani# %rodu$t#. " i# t e for$ed o%%ortunity to $on#olidate andon e3%and. (ere #et u% in Eol*ata $ri#i# t e %artner# to #tand t eir ?ffi$e# o(n feet and inno-ate. " ey (Cal$utta)5 #tarted C ennai (Madra#) and Ne( )el i. In 6>A@5" fifty4fi-e a$re# %ro-ed of unde-elo%ed mar# and manufa$turing dairy e'ui%ment indigenou#ly. e#e %rodu$t# to be a #u$$e##5 (a# a$'uired in Po(ai. Po(ai #tand# a# a ig tribute to t e -i#ion of t e and&ungle >6" $ame to be re$ogni#ed a# "oday5 a reliable fabri$ator (it #tandard#. men ( o tran#formed t i# unin abitable #(am% into a manufa$turing landmar*. " e (ar4time need to re%air and refit # i%# offered >6" an o%%ortunity5 and led to t e formation of a ne( $om%any5 Filda >td.5 to andle t e#e o%eration#. >6" al#o #tarted t(oPUBLIC re%air and fabri$ation # o%# 4 t e Com%any ad begun to e3%and. LIMITED COMPANY: Again5 t e #udden internment of 0erman engineer# (be$au#e of ta e 2ar) ($a%ital o (ere to=#.! In )e$ember 6>B5 5 >6" be$ame a Publi$ Com%any (it %aid4u% of %utmillion. u% a #oda %lant for t e "ata#5 >6" a $ an$e to enter t e field of " a# e #ale# turno-er in t at ga-e year (a# =#.1B.@ million. in#tallation 4 anorder# area (e3e$uted ere t eir by $a%ability be$ameduring (ell re#%e$ted. Pre#tigiou# t e Com%any t i# %eriod in$luded t e Amul )airy at Anand and Bla#t Furna$e# at =our*ela Steel Plant. 2it t e #u$$e##ful $om%letion of t e#e &ob#5 >6" emerged a# t e large#t ere$tion $ontra$tor in t e $ountry. In 6>BC5 a ma&or %art of t e $om%anyC# Bombay offi$e mo-ed to ICI Fou#e in Ballard E#tate. A de$ade later t i# im%o#ing grey4#tone building (a# %ur$ a#ed by >6"5 and renamed a# >6" Fou#e 4 it# Cor%orate ?ffi$e. 11

" e #i3tie# #a( a #ignifi$ant $ ange at >6" 4 S. E. "oubro retired from a$ti-e management in 6>C4. " e #i3tie# (ere al#o a de$ade of ra%id gro(t for t e $om%any5 and (itne##ed t e formation of many ne( -enture#: ,"MA> (#et u% in 6>C5)5 Aud$o India >imited (6>C6)5 Eute$ti$ 2elding Alloy# (6>C4) and "EN0> (6>C?).

EDPANDING HORIEONS:

By 6>CA5 >6" ad (idened it# $a%abilitie# to in$lude #ome of t e be#t te$ nologie# in t e (orld. In t e de$ade t at follo(ed5 t e $om%any gre( ra%idly5 and by 6>F? ad be$ome one of t e "o%4!: Indian $om%anie#. In 6>FC5 Fol$*4>ar#en (a# a(arded t e Mag#ay#ay A(ard for International ,nder#tanding in re$ognition of i# $ontribution to IndiaC# indu#trial de-elo%ment. Fe retired a# C airman in 6>F@. In t e de$ade# t at follo(ed5 t e $om%any gre( into an engineering ma&or under t e guidan$e of leader# li*e N. M. )e#ai5 S.=. Subramaniam5 ,. H. =ao5 S. ). Eul*arni and A. M. Nai*. "oday5 >6" i# one of IndiaC# bigge#t and be#t *no(n indu#trial organi#ation# (it a re%utation for te$ nologi$al e3$ellen$e5 ig 'uality of %rodu$t# and #er-i$e#5 and #trong $u#tomer orientation. It i# al#o ta*ing #te%# to gro( it# international %re#en$e. For an in#titution t at a# gro(n to legendary %ro%ortion#5 t ere $annot and mu#t not be an CendC. ,nli*e ot er #torie#5 t e >6" #aga $ontinue#...

1!

VISION
" e >6" -i#ion refle$t# t e $olle$ti-e goal of t e $om%any. It (a# drafted t roug a large #$ale intera$ti-e %ro$e## ( i$ engaged em%loyee# at e-ery le-el5 (orld(ide.

11

AWARDS & RECOGNITIONS:

M(G,) AH()%/ R$=$"8$% 0 L&T "& 4566L&T CMD R(&7/ (!,&1 T,' N$H/ M(7$)/ "& I&%"(& (&% G*, (* M$%"( Mr. A.M. Nai*5 C airman 6 Managing )ire$tor5 >6"5 a# emerged a# among t e mo#t ig %rofile of IndiaG# $or%orate leader# in t e Indian and t e global media. A re$ent #ur-ey of %re## $itation# #a( Mr. Nai*G# ran*ing# #oar among t e $ountryG# ne(# ma*er#. Fe (a# ran*ed Number 1B in t e Indian media5 a-ing #een a ri#e of 1:; %er $ent. In t e #ur-ey of global media5 Mr. Nai* i# ran*ed 1!t . L&T CMD H,&,u)$% H"#- CHEMTECH H(** ,+ F(!$ AH()% In re$ognition of >6"G# CM)5 Mr. A.M. Nai*G# #tellar $ontribution# to t e indu#try and nation5 t e Mumbai ba#ed CFEM"ECF Foundation a# $onferred on im it# %re#tigiou# Fall of Fame 4 >eader# i% 6 E3$ellen$e A(ard !B11. (February !95 !B11) L&T (1/ II&%"( S-"&"&1 S#() AH()%I +,) Ou#/#(&%"&1 CSR >6" bagged t e GIndia S ining Star CS= A(ardG5 in#tituted by t e 2o$* ardt Foundation5 for ?ut#tanding CS= in t e #e$tor for $om%anie# engaged in engineering. (February 1@5 !B11) L&T H"&/ AH()% +,) IC,!'(&0 H"#- B$/# CSR & Su/#("&( "*"#0 P)(=#"=$/-4566I >6"G# CS= initiati-e# (ere again in t e limelig t a# it bagged t e a(ard for GCom%any (it t e Be#t CS= and Su#tainability Pra$ti$e#G by t e A#ian Centre for Cor%orate 0o-ernan$e and Su#tainability. " e a(ard (a# %re#ented at t e 11t International Conferen$e of t e Centre in Mumbai on February 115 !B11. L&T H"&/ T,' H,&,u)/ "& Bu/"&$//H,)*%I/ IM,/# R$/'$=#$% C,!'(&0 - 4566I R(&7"&1/ >eading bu#ine## magaDine5 Bu#ine##(orldG# ran*ing# of GMo#t =e#%e$ted Com%anie#G #a( #tellar onour# for >6". In t e #e$tor4(i#e #ur-ey5 >6" (a# ran*ed 19 ea-y

GIndiaG# Mo#t =e#%e$ted Com%anyG in t e Infra#tru$ture $ategory. In t e o-erall ran*ing#5 >6" emerged #e$ond. ICAI B$/#,H/ T,' H,&,u) ,& M). Y.M. D$,/#-(*$$J CFOJ L&T " e In#titute of C artered A$$ountant# of India (ICAI) I t e $ountryG# a%e3 body of C artered A$$ountant# I a# be#to(ed it# ig e#t onour5 JBu#ine## A$ ie-er I Cor%orateG for t e year !B1B on Mr. 7.M. )eo#t alee5 CF?5 >6"5 for i# out#tanding $ontribution to bu#ine## leader# i% a# a finan$e %rofe##ional. " e in#titute #aluted i# role in %ro-iding #trategi$ dire$tion to t e bu#ine## of finan$ial #er-i$e#5 de-elo%ment %ro&e$t# and Information "e$ nology of t e >6" 0rou%. (Kanuary 1B5 !B11) F"&(&=$ M"&"/#$) P)$/$&#/ C,8$#$% ET C,!'(&0 ,+ #-$ Y$() AH()% #, M). A.M. N("7

BOARD OF DIRECTORS:
D")$=#,) N(!$ A M Nai* S N "al(ar M M C itale S =a&go%al Subod B argaK S Bindra H E Maga%u 7 M )eo#t alee M H Eot(al K P Naya* E H =anga#(ami E Hen*ataramanan =a-i ,%%al N Mo an =a& A E Kain D$/"1&(#",& C airman 6 Managing )ire$tor Non E3e$uti-e )ire$tor Non E3e$uti-e )ire$tor Non E3e$uti-e )ire$tor Non E3e$uti-e )ire$tor Non E3e$uti-e )ire$tor 2 ole4time )ire$tor 6 Senior E3e$uti-e Hi$e Pre#ident 4 I" 6 "e$ nology Ser-i$e# 2 ole4time )ire$tor 6 CF? 2 ole4time )ire$tor 6 Senior E3e$uti-e Hi$e Pre#ident 4 Fea-y Engineering 2 ole4time )ire$tor 6 Pre#ident 4 Ma$ iney 6 Indu#trial Produ$t# 2 ole "ime )ire$tor 6 Pre#ident 2 ole4time )ire$tor 6 Pre#ident 4 Engineering 6 Con#trution Pro&e$t# 2 ole4time )ire$tor Nominee of >IC Nominee 1:

B agyam =amani " oma# Mat e( " N Fari aran

Nominee Nominee of >IC Com%any Se$retary

1A

THEORY OF WORKING CAPITAL

WORKING CAPITAL MANAGEMENT
2or*ing Ca%ital i# t e amount of $a%ital t at a bu#ine## a# a-ailable to meet t e day to day $a# re'uirement# of it# o%eration#. It i# $on$erned (it t e %roblem ari#e in attem%ting to manage t e $urrent a##et#5 t e $urrent liabilitie# and t e inter relation# i% t at e3i#t bet(een t em. 2or*ing Ca%ital i# t e differen$e bet(een re#our$e# in $a# or readily $on-ertible into $a# and organiDational $ommitment# for ( i$ $a# (ill #oon be re'uired or (it in one year (it out undergoing a diminution in -alue and (it out di#ru%ting t e o%eration of t e firm. It al#o refer# to t e amount of $urrent A##et# t at e3$eed# $urrent >iabilitie#. 2or*ing Ca%ital refer# to t at %art of t e firm $a%ital5 ( i$ i# re'uired for finan$ing S ort4"erm or Current A##et# #u$ S ort "erm Ca%ital. " e goal of (or*ing $a%ital management i# to manage t e firmG# $urrent a##et# and $urrent liabilitie# in #u$ (ay t at t e #ati#fa$tory le-el of (or*ing $a%ital i# mentioned. " e $urrent # ould be large enoug to $o-er it# $urrent liabilitie# in order to en#ure a rea#onable margin of t e #afety. Ca%ital re'uired for a bu#ine## $an be $la##ifie# under t(o main $ategorie#: Fi3ed Ca%ital 2or*ing Ca%ital a# Ca# 5 Mar*etable Se$uritie#5 )ebtor# and In-entorie#. 2or*ing Ca%ital i# al#o *no(n a# =e-ol-ing or Cir$ulating Ca%ital or

E-ery bu#ine## need# fund# for t(o %ur%o#e# for it# e#tabli# ment# and to $arry out day to day o%eration#. >ong term fund# are re'uired to $reate %rodu$tion fa$ilitie# t roug %ur$ a#e of fi3ed a##et# #u$ a# %lant and ma$ inery5 land and building5 furniture et$. In-e#tment# in t e#e a##et# are re%re#enting t at %art of firmG# $a%ital ( i$ i# blo$*ed on a %ermanent or fi3ed ba#i# and i# $alled fi3ed $a%ital. Fund# are 1;

al#o needed for # ort term %ur%o#e# for t e %ur$ a#ing of ra( material#5 %ayment# of (age# and ot er day to day e3%en#e# et$. " e#e fund# are *no(n a# (or*ing $a%ital. In #im%le (ord#5 2or*ing $a%ital refer# to t at %art of t e firmG# $a%ital ( i$ i# re'uired for finan$ing # ort term or $urrent a##et# #u$ a# $a# 5 mar*etable #e$uritie#5 debtor# and in-entorie#.

CONCEPTS OF WORKING CAPITAL:

" ere are t(o $on$e%t# of (or*ing $a%ital: Balan$e S eet $on$e%t# ?%erating Cy$le or $ir$ular flo( $on$e%t

BALANCE SHEET CONCEPT:

" ere are t(o inter%retation of (or*ing $a%ital under t e balan$e # eet $on$e%t: 0ro## 2or*ing Ca%ital Net 2or*ing Ca%ital

" e term (or*ing $a%ital refer# to t e 0ro## (or*ing $a%ital and re%re#ent# t e amount of fund# in-e#ted in $urrent a##et#. " u#5 t e gro## (or*ing $a%ital i# t e $a%ital in-e#ted in total $urrent a##et# of t e enter%ri#e#. Current a##et# are t o#e a##et# ( i$ are $on-erted into $a# (it in # ort %eriod# of normally one a$$ounting year. E3am%le of $urrent a##et# i#: Con#tituent# of Current A##et#: Ca# in and and Ban* balan$e Bill# =e$ei-able Sundry )ebtor# S ort term >oan# and Ad-an$e# In-entorie# of Sto$* a#: =a( Material# 2or* in Pro$e## Store# and S%a$e# 1<

Fini# ed 0ood# "em%orary In-e#tment# of Sur%lu# Fund# Pre%aid E3%en#e# A$$rued In$ome#

" e term (or*ing $a%ital refer# to t e net (or*ing $a%ital. Net (or*ing $a%ital i# t e e3$e## of $urrent a##et# o-er $urrent liabilitie# or #ay:

N$# W,)7"&1 C('"#(* K Cu))$&# A//$#/ : Cu))$&# L"( "*"#"$/.

NET WORKING CAPITAL MAY BE NEGATIVE OR POSITIVE:

2 en t e $urrent a##et# e3$eed t e $urrent liabilitie#5 t e (or*ing $a%ital i# %o#iti-e and t e negati-e (or*ing $a%ital re#ult# ( en t e $urrent liabilitie# are more t an t e $urrent a##et#. Current liabilitie# are t o#e liabilitie# ( i$ are intended to be %aid in t e ordinary $our#e of bu#ine## (it in a # ort %eriod of normally one a$$ounting year of t e $urrent a##et# or t e in$ome of t e bu#ine##. E3am%le# of $urrent liabilitie# are:

CONSTITUENTS OF CURRENT LIBILITIES:

Bill# Payable Sundry Creditor# or A$$ount Payable A$$rued or ?ut#tanding E3%en#e# S ort term >oan#5 Ad-an$e# and )e%o#it# )i-idend# Payable Ban* ?-erdraft Pro-i#ion for "a3ation5 If doe# not amount to a%%ro%riation of %rofit#.

" e gro## (or*ing $a%ital $on$e%t i# finan$ial or going $on$ern $on$e%t ( erea# net (or*ing $a%ital i# an a$$ounting $on$e%t of (or*ing $a%ital.

1@

OPERATING CYCLE OR CIRCULATING CASH FORMAT:

2or*ing Ca%ital refer# to t at %art of firmG# $a%ital ( i$ i# re'uired for finan$ing # ort term or $urrent a##et# #u$ a# $a# 5 mar*etable #e$uritie#5 debtor# and

in-entorie#. Fund# t u# in-e#ted in $urrent a##et# *ee% re-ol-ing fa#t and being $on#tantly $on-erted into $a# and t e#e $a# flo(# out again in e3$ ange for ot er $urrent a##et#. Fen$e it i# al#o *no(n a# re-ol-ing or $ir$ulating $a%ital. " e $ir$ular flo( $on$e%t of (or*ing $a%ital i# ba#ed u%on t i# o%erating or (or*ing $a%ital $y$le of a firm. " e $y$le #tart# (it t e %ur$ a#e of ra( material and ot er re#our$e#

And end# (it t e realiDation of $a# from t e #ale# of fini# ed good#. It in-ol-e# %ur$ a#e of ra( material and #tore#5 it# $on-er#ion into #to$*# of fini# ed good# t roug (or* in %rogre## (it %rogre##i-e in$rement of labor and #er-i$e $o#t5

$on-er#ion of fini# ed #to$*# into #ale#5 debtor# and re$ei-able# and ultimately realiDation of $a# and t i# $y$le $ontinuou# again from $a# to %ur$ a#e of ra( material# and #o on. " e #%eed. time of duration re'uired to $om%lete one $y$le determine# t e re'uirement# of (or*ing $a%ital longer t e %eriod of $y$le5 larger i# t e re'uirement of (or*ing $a%ital.

!B

=e$ei-able $on-er#ion %eriod #torage (=CP) Ca# re$ei-ed form )ebtor# and %aid to #u%%lier# ?f ra( material#

=a( material $on-er#ion %eriod (=MSCP)

Sale# of fini# ed 0ood# Fini# ed 0ood# Produ$ed Fini# ed good# $on-er#ion Period (F0CP) %eriod

=a( material# introdu$ed into %ro$e##

2or* in %ro$e## Con-er#ion (2IPCP)

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" e gro## o%erating $y$le of a firm i# e'ual to t e lengt of t e in-entorie# and re$ei-able# $on-er#ion %eriod#. " u#5

G),// O'$)(#"&1 C0=*$ K RMCP L WIPCP L FGCP L RCP

2 ere5 =MCP L =a( Material Con-er#ion Period 2IPCP L 2or* Iin4 Pro$e## Con-er#ion Period F0CP L Fini# ed 0ood# Con-er#ion Period =CP L =e$ei-able# Con-er#ion Period Fo(e-er5 a firm may a$'uire #ome re#our$e# on $redit and t u# defer %ayment# for $ertain %eriod. In t at $a#e5 net o%erating $y$le %eriod $an be $al$ulated a# belo(:

N$# O'$)(#"&1 C0=*$ P$)",% K G),// O'$)(#"&1 C0=*$ P$)",% : P(0( *$ D$+$))(* '$)",%
Furt er5 follo(ing formula $an be u#ed to determine t e $on-er#ion %eriod#. R(H M(#$)"(* C,&8$)/",& P$)",%

A-erage Sto$* of =a( Material. =a( Material Con#um%tion %er day

W,)7 "& '),=$// C,&8$)/",& P$)",% L A-erage Sto$* of 2or*4in4Progre##

"otal Co#t of Produ$tion %er day

F"&"/-$% G,,%/ C,&8$)/",& P$)",% L

A-erage Sto$* of Fini# ed 0ood# "otal Co#t of 0ood# #old %er day

R$=$"8( *$/ C,&8$)/",& P$)",%

A-erage A$$ount# =e$ei-able# Net Credit Sale# %er day

P(0( *$ D$+$))(* P$)",%

A-erage Payable Net Credit Pur$ a#e %er day

!!

CLASSIFICATION OR KIND OF WORKING CAPITAL:

2or*ing $a%ital may be $la##ified in t(o (ay#: ?n t e ba#i# of $on$e%t ?n t e ba#i# of time

?n t e ba#i# of $on$e%t5 (or*ing $a%ital i# $la##ified a# gro## (or*ing $a%ital and net (or*ing $a%ital. " e $la##ifi$ation i# im%ortant from t e %oint of -ie( of t e finan$ial manager. ?n t e ba#i# of time5 (or*ing $a%ital may be $la##ified a#: Permanent or Fi3ed (or*ing $a%ital "em%orary or Hariable (or*ing $a%ital.

K"&%/ ,+ W,)7"&1 C('"#(*

O& #-$ (/"/ ,+ =,&=$'#

O& #-$ (/"/ ,+ #"!$

G),// W,)7"&1 C('"#(*

N$# W,)7"&1 C('"#(*

P$)!(&$&# ,) F"<$% W,)7"&1 C('"#(*

T$!',)()0 ,) V()"( *$ W,)7"&1 C('"#(*

R$1u*() W,)7"&1 C('"#(*

R$/$)8$ W,)7"&1 C('"#(* !1 S$(/,&(* W,)7"&1 C('"#(*

S'$="(* W,)7"&1 C('"#(*

6. PERMANENT OR FIDED WORKING CAPITAL: Permanent or fi3ed (or*ing $a%ital i# t e minimum amount ( i$ i# re'uired to en#ure effe$ti-e utiliDation of fi3ed fa$ilitie# and for maintaining t e $ir$ulation of $urrent a##et#. " ere i# al(ay# a minimum le-el of $urrent a##et# ( i$ $ontinuou#ly re'uired by t e enter%ri#e# to $arry out it# normal bu#ine## o%eration#. 4. TEMPRORAY OR VARIABLE WORKING CAPITAL: "em%orary or -ariable (or*ing $a%ital i# t e amount of (or*ing $a%ital ( i$ i# re'uired to meet t e #ea#onal demand# and #ome #%e$ial e3igen$ie#.Harible# (or*ing $a%ital $an be furt er $la##ified a# #e$ond (or*ing $a%ital and #%e$ial (or*ing $a%ital. " e $a%ital re'uired to meet t e #ea#onal need# of t e enter%ri#e# i# $alled t e #ea#onal (or*ing $a%ital. "em%orary (or*ing $a%ital differ# from %ermanent (or*ing $a%ital in t e #en#e t at i# re'uired for # ort %eriod# and $annot be %ermanently em%loyed gainfully in t e bu#ine## i#

IMPORATNCE OR ADVANTAGE OF ADEMUATE WORKING CAPITAL:

2or*ing $a%ital i# t e life blood and ner-e $entre of a bu#ine##. Ku#t a $ir$ulation of a blood i# e##ential in t e uman body for maintaining life5 (or*ing $a%ital i# -ery e##ential to maintain t e #moot running of a bu#ine##. No bu#ine## $an run #u$$e##fully (it out an ade'uate amount of (or*ing $a%ital. " e main ad-antage# of maintaining ade'uate amount of (or*ing $a%ital are a# follo(#: Sol-en$y of t e Bu#ine## 0ood(ill Ea#y >oan# Ca# di#$ount# =egular #u%%ly of =a( Material# !9

=egular %ayment# of #alarie#5 (age# 6 ot er day to day $ommitment#. E3%loitation of fa-orable mar*et $ondition# Ability of $ri#i# Mui$* and regular return on in-e#tment# Fig moral#

THE NEED OR OBJECTS OF WORKING CAPITAL:

" e need for (or*ing $a%ital $annot be em% a#iDed. E-ery bu#ine## need# #ome amount of (or*ing $a%ital. " e need of (or*ing $a%ital ari#e# due to t e time ga% bet(een %rodu$tion and realiDation of $a# from #ale#. " ere i# an o%erating $y$le in-ol-ed in t e #ale# and realiDation of $a# . " ere are time ga%# in %ur$ a#e of ra( material# and %rodu$tion5 %rodu$tion and #ale#5 And #ale#5 and realiDation of $a# 5 t u#5 (or*ing $a%ital i# needed for t e follo(ing %ur%o#e#: For t e %ur$ a#e of ra( material# 5 $om%onent# and #%a$e#. "o %ay (age# and #alarie#. "o in$ur day to day e3%en#e# and o-er ead $o#t# #u$ a# fuel5 %o(er and offi$e e3%en#e# et$. "o meet t e #elling $o#t# a# %a$*ing5 ad-erti#ing et$. "o %ro-ide $redit fa$ilitie# to t e $u#tomer#. "o maintain t e in-entorie# of ra( material#5 (or* Iin4 %rogre##5 #tore# and #%are# and fini# ed #to$*.

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FACTORS DETERMING THE WORKING CAPITAL REMUIRMENT:

" e (or*ing $a%ital re'uirement# of a $on$ern de%end u%on a large number of fa$tor# #u$ a# nature and #iDe of t e bu#ine##5 t e $ ara$teri#ti$# of t eir o%eration#5 t e lengt of %rodu$tion $y$le5 t e rate of #to$* turno-er and t e #tate of e$onomi$ #ituation. Fo(e-er t e follo(ing are t e im%ortant fa$tor# generally influen$ing t e (or*ing $a%ital re'uirement#. NATURE OR CHARACTERSTICS OF A BUSINESS:

" e nature and t e (or*ing $a%ital re'uirement of enter%ri#e# are interlin*ed. 2 ile a manufa$turing indu#try a# a long $y$le of o%eration of t e (or*ing $a%ital5 t e #ame (ould be # ort in an enter%ri#e# in-ol-e in %ro-iding #er-i$e#. " e amount re'uired al#o -arie# a# %er t e nature5 an enter%ri#e# in-ol-ed in %rodu$tion (ould re'uired more (or*ing $a%ital t en a #er-i$e #e$tor enter%ri#e. MANAFACTURE PRODUCTION POLICY:

Ea$ enter%ri#e# in t e manufa$turing #e$tor a# it# o(n %rodu$tion %oli$y5 #ome follo( t e %oli$y of uniform %rodu$tion e-en if t e demand -arie# from time to time and ot er may follo( t e %rin$i%le# of demand ba#ed %rodu$tion in ( i$ %rodu$tion i# ba#ed on t e demand during t e %arti$ular % a#e of time. A$$ordingly t e (or*ing $a%ital re'uirement# -ary for bot of t em. OPERATIONS:

" e re'uirement of (or*ing $a%ital flu$tuate# for #ea#onal bu#ine##. " e (or*ing $a%ital need# of #u$ bu#ine## may in$rea#e $on#iderably during t e bu#y.

MARKET CONDITION:

If t ere i# a ig $om%etition in t e $ o#en %ro&e$t $ategory t en one # all need to offer #o%# li*e $redit5 immediate deli-ery of good# et$ for ( i$ t e (or*ing $a%ital re'uirement (ill be ig . ?t er(i#e if t ere i# no $om%etition or le## $om%etition in t e mar*et t en t e (or*ing $a%ital re'uirement# (ill be lo(.

!A

AVABILITY OF RAW MATERIAL:

If ra( material i# readily a-ailable t en one need not maintain a large #to$* of t e #ame t ereby redu$ing t e (or*ing $a%ital in-e#tment in t e ra( material #to$* . ?n ot er and if ra( material i# not readily a-ailable t en a large in-entory #to$*# need to be maintained5 t ere by $alling for #ub#tantial in-e#tment in t e #ame. GROWTH AND EDAPNSION: and E3%an#ion# in t e -olume of bu#ine## re#ult in en an$ement of t e and e3%and# it need# a larger

0ro(t

(or*ing $a%ital re'uirement#. A# bu#ine## gro(t fund# %ro$e##ed gro(t in bu#ine## a$ti-itie#.

amount of t e (or*ing $a%ital. Normally t e need# for in$rea#ed (or*ing $a%ital

PRICE LEVEL CHANGES :

0enerally rai#ing %ri$e le-el re'uire# a ig er in-e#tment in t e (or*ing $a%ital. 2it in$rea#ing %ri$e#5 t e #ame le-el# of $urrent a##et# need# en an$ed in-e#tment#. MANAFACTURING CYCLE:

" e manufa$turing $y$le #tart# (it t e %ur$ a#e of ra( material and i# $om%leted (it t e %rodu$tion of fini# ed good#. If t e manufa$turing $y$le in-ol-e# a longer %eriod t e need for (or*ing $a%ital (ould be more. At time bu#ine## need# to e#timate t e re'uirement of (or*ing $a%ital in ad-an$e for %ro%er $ontrol and management. " e fa$tor# di#$u##ed abo-e influen$e t e 'uantum of (or*ing $a%ital in t e bu#ine##. " e a##e##ment of t e (or*ing $a%ital re'uirement i# made *ee%ing t i# fa$tor in -ie(. Ea$ $on#tituent# of t e (or*ing $a%ital retain# it form for a $ertain %eriod and t at olding %eriod i# determined by t e fa$tor# di#$u##ed abo-e. So for $orre$t a##e##ment of t e (or*ing $a%ital re'uirement t e duration at -ariou# #tage# of t e (or*ing $a%ital $y$le i# e#timated. " ereafter %ro%er -alue i# a##igned to t e re#%e$ti-e $urrent a##et#5 de%ending on it# le-el of $om%letion. " e ba#i# for a##igning -alue to ea$ $om%onent i# gi-en belo(:

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COMPONENTS OF WORKING CAPITAL Stock of Raw Material Stock of Work -in- Process Stock of finished Goods Debtors Cash

BASIS OF VALUATION Purchase of Raw Material At cost of Market value which is lower Cost of Production Cost of Sales or Sales Value Working !"enses

Ea$ $on#tituent of t e (or*ing $a%ital i# -alued on t e ba#i# of -aluation Enumerated abo-e for t e olding %eriod e#timated. " e total of all #u$ -aluation be$ome# t e total e#timated (or*ing $a%ital re'uirement. " e a##e##ment of t e (or*ing $a%ital # ould be a$$urate e-en in t e $a#e of #mall and mi$ro enter%ri#e# ( ere bu#ine## o%eration i# not -ery large. 2e *no( t at (or*ing $a%ital a# a -ery $lo#e relation# i% (it day4to4day o%eration# of a bu#ine##. Negligen$e in %ro%er a##e##ment of t e (or*ing $a%ital5 t erefore5 $an affe$t t e day4to4day o%eration# #e-erely. It may lead to $a# $ri#i# and ultimately to li'uidation. An ina$$urate a##e##ment of t e (or*ing $a%ital may $au#e eit er under4a##e##ment or o-er4a##e##ment of t e (or*ing $a%ital and bot of t em are dangerou#.

PRINCIPLES OF WORKING CAPITAL MANAGEMENT POLICY:

" e follo(ing are t e general %rin$i%le# of a #ound (or*ing $a%ital management %oli$y: PRINCIPLES OF WORKING CAPITAL MANAGEMNT POLICY

PRINCIPLES OF RISK VARIATIONS

PRINCIPLES OF COST OF CAPITAL

PRINCIPLES OF EMUITY PRINCIPLES

PRINCIPLES OF MATURITY OF PAYMENTS

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6. PRINCIPLE OF RISK VARAITAION 2CURRENT ASSETS POLICY3:

=i#* ere refer# to t e inability of a firm to meet it# obligation# a# and ( en t ey be$ome due for %ayment. >arger in-e#tment in $urrent A##et# (it le## de%enden$e on # ort term borro(ing#5 in$rea#e li'uidity5 redu$e# ri#* and t ereby de$rea#e# t e o%%ortunity for gain or lo##. ?n t e ot er and le## in-e#tment# in $urrent a##et# (it greater de%enden$e on # ort term borro(ing#5 redu$e# li'uidity and in$rea#e %rofitability. In ot er (ord# t ere i# a definite in-er#e relation# i% bet(een t e degree of ri#* and %rofitability. In ot er (ord#5 t ere i# a definite in-er#e relation# i% bet(een t e ri#* and %rofitability. A $on#er-ati-e management %refer# to minimiDe ri#* by maintaining a ig er le-el of $urrent a##et# or (or*ing $a%ital ( ile a liberal management a##ume# greater ri#* by redu$ing (or*ing $a%ital. Fo(e-er5 t e goal of management # ould be to e#tabli# a #uitable tradeoff bet(een %rofitability and ri#*. !. PRINCIPLES OF COST OF CAPITAL: " e -ariou# #our$e of rai#ing (or*ing $a%ital finan$e a-e different $o#t of $a%ital and t e degree of ri#* in-ol-ed. 0enerally5 ig er and ri#* o(e-er t e ri#* lo(er i# t e $o#t and lo(er t e ri#* ig er i# t e $o#t. A #ound (or*ing $a%ital management # ould al(ay# try to a$ ie-e a %ro%er balan$e bet(een t e#e t(o.

?. PRINCIPLE OF EMUITY POSITION:

" e %rin$i%le i# $on$erned (it %lanning t e total in-e#tment# in $urrent a##et#. A$$ording to t i# %rin$i%le5 t e amount of (or*ing $a%ital in-e#ted in ea$ $om%onent # ould be ade'uately &u#tified by a firmG# e'uity %o#ition. E-ery ru%ee in-e#ted in $urrent a##et# # ould $ontribute to t e net (ort of t e firm. " e le-el of $urrent a##et# may be mea#ured (it t e el% of t(o ratio#: 1. Current a##et# a# a %er$entage of total a##et# and !. Current a##et# a# a %er$entage of total #ale# 2 ile de$iding about t e $om%o#ition of $urrent a##et#5 t e finan$ial manager may $on#ider t e rele-ant indu#trial a-erage#.

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A. PRINCIPLES OF MATURITY OF PAYMENT:

" e %rin$i%le i# $on$erned (it %lanning t e #our$e of finan$e for (or*ing $a%ital. A$$ording to t e %rin$i%le#5 a firm # ould ma*e e-ery effort to relate maturitie# of %ayment to it# flo( of internally generated fund#. Maturity %attern of -ariou# $urrent obligation# i# an im%ortant fa$tor in ri#* a##um%tion# and ri#* a##e##ment#. 0enerally # orter t e maturity #$ edule of $urrent liabilitie# in relation to e3%e$ted $a# inflo(#5 t e greater t e inability to meet it# obligation# in time.

CONSEMUENCES OF UNDER ASSESMENT OF WORKING CAPITAL:

0ro(t may be #tunted. It may be$ome diffi$ult for t e enter%ri#e# to underta*e %rofitable %ro&e$t# due to non a-ailability of (or*ing $a%ital. Im%lementation# of o%erating %lan# may brome diffi$ult and $on#e'uently t e %rofit goal# may not be a$ ie-ed. Ca# $ri#i# may emerge due to %au$ity of (or*ing fund#. ?%timum $a%a$ity utiliDation of fi3ed a##et# may not be a$ ie-ed due to non a-ailability of t e (or*ing $a%ital. " e bu#ine## may fail to onour it# $ommitment in time t ereby ad-er#ely affe$ting it# $reditability. " i# #ituation may lead to bu#ine## $lo#ure. " e bu#ine## may be $om%elled to by ra( material# on $redit and #ell fini# ed good# on $a# . In t e %ro$e## it may end u% (it in$rea#ing $o#t of %ur$ a#e and redu$ing #elling %ri$e by offering di#$ount#. Bot ad-er#ely. No( a-aibility of #to$*# due to non a-ailability of fund# may re#ult in %rodu$tion #to%%age. 2 ile undera##e##ment of (or*ing $a%ital a# di#a#trou# im%li$ation# on bu#ine## o-era##e#ment# of (or*ing $a%ital al#o a# it# o(n dangerou#. t e #ituation (ould affe$t %rofitable

1B

CONSEMUENCES OF OUR OWN ASSESMNET OF WORKING CAPITAL:

E3$e## of (or*ing $a%ital may re#ult in un ne$e##ary a$$umulation of in-entorie#. It may lead to offer too liberal $redit term# to buyer# and -ery %oor re$o-ery #y#tem 6 $a# management. It may ma*e management $om%la$ent leading to it# ineffi$ien$y. ?-er in-e#tment in (or*ing $a%ital ma*e# $a%ital le## %rodu$ti-e and may redu$e return on in-e#tment. 2or*ing Ca%ital i# -ery e##ential for #u$$e## of bu#ine## 6 t erefore need# effi$ient management and $ontrol. Ea$ of t e $om%onent# of (or*ing $a%ital need# %ro%er management to o%timiDe %rofit.

INVENTORY MANAGEMNT:
In-entory in$lude# all ty%e of #to$*#. For effe$ti-e (or*ing $a%ital management5 in-entory need# to be managed effe$ti-ely. " e le-el of in-entory # ould be #u$ t at t e total $o#t of ordering and olding in-entory i# t e lea#t. Simultaneou#ly #to$* out $o#t# # ould be minimiDed. Bu#ine## t erefore # ould fi3 t e minimum #afety #to$* le-el reorder le-el of ordering 'uantity #o t at t e in-entory $o#t# i# redu$ed and out# management be$ome effi$ient.

I&8$&#,) 0
M(&(1$!$& #

11

RECEIVABLE MANAGEMENT:
0i-en a $ oi$e5 e-ery bu#ine## (ould %refer #elling it# %rodu$e on $a# ba#i#.

Fo(e-er5 due to fa$tor# li*e trade %oli$ie#5 %re-ailing mar*et $ondition# et$. Bu#ine## are $om%elled to #ell# t eir good# on $redit. In $ertain $ir$um#tan$e# a bu#ine## may deliberately e3tend $redit a# a #trategy of in$rea#ing #ale#. E3tending $redit mean# $reating $urrent a##et# in t e form of debtor# or a$$ount re$ei-able#. In-e#tment in t e ty%e of $urrent a##et# need# %ro%er and effe$ti-e management a#5 it gi-e# ri#e to $o#t# #u$ a#: Co#t of $arrying re$ei-able# Co#t of bad debt# lo##e# " u# t e ob&e$ti-e of any management %oli$y %ertaining to a$$ount# re$ei-able# (ould be to en#ure t e benefit# ari#ing due to t e re$ei-able# are more t an t e $o#t# in$urred for t e re$ei-able# and t e ga% bet(een benefit and $o#t# in$rea#ed re#ulting in in$rea#e %rofit#. An effe$ti-e $ontrol of re$ei-able# el% a great deal in %ro%erly managing it. Ea$ bu#ine## # ould t erefore try to find out $o-erage $redit e3tend# to it# $lient# u#ing t e belo( gi-en formula:

A8$)(1$ C)$%"# K 2E<#$&% "& %(0/3

T,#(* (!,u&# ,+ )$=$"8( *$ A8$)(1$ =)$%"# /(*$ '$) %(0

Ea$ bu#ine## # ould %ro&e$t e3%e$ted #ale# and e3%e$ted in-e#tment# in re$ei-able ba#ed on -ariou# fa$tor5 ( i$ influen$e t e (or*ing $a%ital re'uirement. From t i# it (ould be %o##ible to find out t e a-erage $redit day# u#ing t e abo-e gi-en formula. A bu#ine## # ould $ontinuou#ly try to monitor t e $redit day# and #ee t at t e a-erage. Credit offer to $lient# i# not $ro##ing t e budgeted %eriod ot er(i#e t e re'uirement of in-e#tment in t e (or*ing $a%ital (ould in$rea#e and a# a re#ult5 a$ti-itie# may get #'ueeDed. " i# may lead to $a# $ri#i#.

1!

CASH BUDGET:
Ca# budget ba#i$ally in$or%orate# e#timate# of future inflo( and outflo(# of $a# $o-er a %ro&e$ted # ort %eriod of time ( i$ may u#ually be a year5 a alf or a 'uarter year. Effe$ti-e $a# management i# fa$ilitie# if t e $a# budget i# furt er bro*en do(n into mont #5 (ee*# or e-en a daily ba#i#. " ere are t(o $om%onent# of $a# budget are: 1. Ca# inflo(# !. Ca# outflo(# " e main #our$e# for t e#e flo(# are gi-en ere under: 1. Ca# Sale# !. Ca# re$ei-ed from debtor# 1. Ca# re$ei-ed from >oan#5 de%o#it# et$. 9. Ca# re$ei%t# ot er re-enue in$ome :. Ca# re$ei-ed from #ale of in-e#tment or a##et#.

CASH OUTFLOWS:
1. Ca# Pur$ a#e !. Ca# %ayment# to Creditor# 1. Ca# %ayment for ot er re-enue e3%enditure 9. Ca# %ayment for a##et# $reation :. Ca# %ayment# for (it dra(al#5 ta3e#. A. =e%ayment# of >oan et$. A #ugge#ti-e for5 at for $a# budget i# gi-en belo(:
MONTHS JANUARY

PARTICULARS Estimat ! "as# i$%&'(s )))))))))))) )))))))))))))* I* T'ta& "as# i$%&'(s Estimat ! "as# '+t%&'(s )))))))))))** ))))))))))** II* T'ta& "as# '+t%&'(s III* O, $i$- "as# .a&a$" s IV* A!!/! !+"t s+0,&+s/! %&i"t!+0i$- t# m'$t# ( I1 II) V* C&'si$- "as# .a&a$" s (III 1IV) VI* Mi$im+m & 2 & '% "as# .a&a$" VII* Estimat ! 3" ss '0 s#'0t %a&& '% "as# (V1VI)

FERBUARY

MARCH

11

CHAPTER : 4
REVIEW OF LITERATURE
E-ery bu#ine## need# fund# for t(o %ur%o#e# ba#i$allyN t ey are for e#tabli# ment and to $arry day4to4day o%eration#. >ong term fund# are re'uired for e#tabli# ment of t e organiDation5 it i# re'uired for %rodu$tion fa$ility t roug %ur$ a#e of fi3ed a##et# and it need# fi3ed $a%ital and t e fund# ( i$ are needed for # ort term %ur%o#e# for t e %ur$ a#e of ra( material#5 %ayment of (age#5 %ayment of day to day e3%en#e# et$5 t e fund# re'uired for t e#e are *no(n a# 2?=EIN0 CAPI"A>. 2or*ing $a%ital refer# to t at %art of t e firmC# $a%ital ( i$ i# re'uired for

finan$ing # ort term or $urrent a##et# #u$ a# $a# 5 mar*etable #e$uritie#5 debtor# and in-entorie#. Fund#5 t u#5 in-e#ted in $urrent a##et# *ee% re-ol-ing fa#t and are being $on#tantly $on-erted into $a# and t i# $a# flo( out in e3$ ange for ot er $urrent a##et#. Fen$e it i# al#o *no(n a# CI=C,>A"IN0 CAPI"A> or =EH?>HIN0 CAPI"A> or SF?=" "E=M CAPI"A>.

A==,)%"&1 #, GENESTENBERG:OCir$ulating $a%ital mean# $urrent a##et# of a $om%any t at are $ anged in t e ordinary $our#e of bu#ine## from one form to anot er5 a# for e3am%le5 from $a# to in-entorie#5 in-entorie# to re$ei-able# into $a# .O Need for (or*ing $a%ital $annot be o-er em% a#iDed. E-ery bu#ine## need# #ome amount of (or*ing $a%ital. " e need of (or*ing $a%ital ari#e# due to t e time ga% bet(een %rodu$tion and realiDation of $a# from #ale#. " u#5 t e (or*ing $a%ital i# needed for t e follo(ing %ur%o#e#:4 a) For t e %ur$ a#e of ra( material#5 $om%onent# and #%are#. b) "o %ay (age# and #alarie#. $) "o in$ur day4to4day e3%en#e# and o-er ead $o#t# #u$ a# fuel5 %o(er and offi$e e3%en#e# et$. d) "o met t e #elling $o#t# a# %a$*ing5 ad-erti#ing et$. 19

e) "o %ro-ide $redit fa$ility to $u#tomer#. f) "o maintain t e in-entorie# of ra( material5 (or*4in4%rogre##5 #tore# and #%are# and fini# ed #to$*. For #tudying t e need of (or*ing $a%ital in a bu#ine##5 one a# to #tudy t e bu#ine## under -arying $ir$um#tan$e# #u$ a# a ne( $on$ern5 a# a going $on$ern and a# one ( i$ a# attained maturity.

Many re#ear$ er# a-e #tudied (or*ing $a%ital from different -ie(# and in different en-ironment#. " e follo(ing one# (ere -ery intere#ting and u#eful for our re#ear$ A==,)%"&1 #, E*G$**0J "& 455A:Elu$idated t at effi$ient li'uidity management in-ol-e# %lanning and $ontrolling $urrent a##et# and $urrent liabilitie# in #u$ a manner t at eliminate# t e ri#* of inability to meet due # ort4term obligation# and a-oid# e3$e##i-e in-e#tment in t e#e a##et#. " e relation bet(een %rofitability and li'uidity (a# e3amined5 a# mea#ured by $urrent ratio and $a# ga% ($a# $on-er#ion $y$le) on a #am%le of &oint #to$* $om%anie# in Saudi Arabia u#ing $orrelation and regre##ion analy#i#. " e #tudy found t at t e $a# $on-er#ion $y$le (a# of more im%ortan$e a# a mea#ure of li'uidity t an t e $urrent ratio t at affe$t# %rofitability. " e #iDe -ariable (a# found to a-e #ignifi$ant effe$t on %rofitability at t e indu#try le-el. " e re#ult# (ere #table and ad im%ortant im%li$ation# for li'uidity management in -ariou# Saudi $om%anie#. Fir#t5 it (a# $lear t at t ere (a# a negati-e relation# i% bet(een %rofitability and li'uidity indi$ator# #u$ a# $urrent ratio and $a# ga% in t e Saudi #am%le e3amined. Se$ond5 t e #tudy al#o re-ealed t at t ere (a# great -ariation among indu#trie# (it re#%e$t to t e #ignifi$ant mea#ure of li'uidity. A==,)%"&1 #, D$*,,+J "& 455?:)i#$u##ed t at mo#t firm# ad a large amount of $a# in-e#ted in (or*ing $a%ital. It $an t erefore be e3%e$ted t at t e (ay in ( i$ (or*ing $a%ital i# managed (ill a-e a #ignifi$ant im%a$t on %rofitability of t o#e firm#. ,#ing $orrelation and regre##ion te#t# e found a #ignifi$ant negati-e relation# i% bet(een gro## o%erating in$ome and t e number of day# a$$ount# re$ei-able5 in-entorie# and a$$ount# %ayable of Belgian 1:

firm#. ?n ba#i# of t e#e re#ult# e #ugge#ted t at manager# $ould $reate -alue for t eir # are older# by redu$ing t e number of day# a$$ount# re$ei-able and in-entorie# to a rea#onable minimum. " e negati-e relation# i% bet(een a$$ount# %ayable and %rofitability i# $on#i#tent (it t e -ie( t at le## %rofitable firm# (ait longer to %ay t eir bill#. A==,)%"&1 #, G-,/- (&% M(G"J "& 455?:In t i# %a%er made an attem%t to e3amine t e effi$ien$y of (or*ing $a%ital management of t e Indian $ement $om%anie# during 1@@! I 1@@1 to !BB1 I !BB!. For mea#uring t e effi$ien$y of (or*ing $a%ital management5 %erforman$e5 utiliDation5 and o-erall effi$ien$y indi$e# (ere $al$ulated in#tead of u#ing #ome $ommon (or*ing $a%ital management ratio#. Setting indu#try norm# a# target4effi$ien$y le-el# of t e indi-idual firm#5 t i# %a%er al#o te#ted t e #%eed of a$ ie-ing t at target le-el of effi$ien$y by an indi-idual firm during t e %eriod of #tudy. Finding# of t e #tudy indi$ated t at t e Indian Cement Indu#try a# a ( ole did not %erform remar*ably (ell during t i# %eriod. A==,)%"&1 #, S-"& (&% S,$&$&J "& 6>>@:ig lig ted t at effi$ient 2or*ing Ca%ital Management (2CM) (a# -ery im%ortant for $reating -alue for t e # are older#. " e (ay (or*ing $a%ital (a# managed ad a #ignifi$ant im%a$t on bot %rofitability and li'uidity. " e relation# i% bet(een t e lengt # of Net "rading Cy$le5 $or%orate %rofitability and ri#* ad&u#ted #to$* return (a# e3amined u#ing $orrelation and regre##ion analy#i#5 by indu#try and $a%ital inten#ity. " ey found a #trong negati-e relation# i% bet(een lengt # of t e firmG# net trading Cy$le and it# %rofitability. In addition5 # orter net trade $y$le# (ere a##o$iated (it ig er ri#* ad&u#ted #to$* return#.

T-$ E++$=# ,+ W,)7"&1 C('"#(* M(&(1$!$&# ,& F")! P),+"#( "*"#0: E8"%$&=$ +),! Tu)7$0 F. S(!"*,1*u (&% K. D$!")1u&$/ 2455@3 " e aim of t i# #tudy i# to analyDe t e effe$t of (or*ing $a%ital management on firm

1A

%rofitability. In a$$ordan$e (it relation# i%#

t i# aim5 to $on#ider #tati#ti$ally #ignifi$ant

bet(een firm %rofitability and t e $om%onent# of $a# $on-er#ion $y$le at lengt 5 a #am%le $on#i#ting of I#tanbul Sto$* E3$ ange (ISE) li#ted manufa$turing firm# for t e %eriod of 1@@<4!BB; a# been analyDed under a multi%le regre##ion model. Em%iri$al finding# of t e #tudy # o( t at a$$ount# re$ei-able# %eriod5 in-entory %eriod and le-erage affe$t firm %rofitability negati-ely5 ( ile gro(t %rofitability %o#iti-ely. All t e abo-e #tudie# %ro-ide u# a #olid ba#e and gi-e u# idea regarding (or*ing $a%ital management and it# $om%onent#. " ey al#o gi-e u# t e re#ult# and $on$lu#ion# of t o#e re#ear$ e# already $ondu$ted on t e #ame area for different $ountrie# and en-ironment from different a#%e$t#. ?n ba#i# of t e#e re#ear$ e# done in different $ountrie#5 (e a-e de-elo%ed our o(n met odology for re#ear$ . A==,)%"&1 #, S!"#- (&% B$1$!(&& 6>>F:Em% a#iDed t at t o#e ( o %romoted (or*ing $a%ital t eory # ared t at %rofitability and li'uidity $om%ri#ed t e #alient goal# of (or*ing $a%ital management. " e %roblem aro#e be$au#e t e ma3imiDation of t e firmC# return# $ould #eriou#ly t reaten it# li'uidity5 and t e %ur#uit of li'uidity ad a tenden$y to dilute return#. " i# arti$le e-aluated t e a##o$iation bet(een traditional and alternati-e (or*ing $a%ital mea#ure# and return on in-e#tment (=?I)5 #%e$ifi$ally in indu#trial firm# li#ted on t e Ko anne#burg Sto$* E3$ ange (KSE). " e %roblem under in-e#tigation (a# to e#tabli# ( et er t e more re$ently de-elo%ed alternati-e (or*ing $a%ital $on$e%t# # o(ed im%ro-ed a##o$iation (it return on in-e#tment to t at of traditional (or*ing $a%ital ratio# or not. =e#ult# indi$ated t at t ere (ere no #ignifi$ant differen$e# among#t t e year# (it re#%e$t to t e inde%endent -ariable#. " e re#ult# of t eir #te%(i#e regre##ion $orroborated t at total $urrent liabilitie# di-ided by fund# flo( a$$ounted for mo#t of t e -ariability in =eturn on In-e#tment (=?I). " e #tati#ti$al te#t re#ult# # o(ed t at a traditional (or*ing $a%ital le-erage ratio5 $urrent liabilitie# di-ided by fund# flo(5 di#%layed t e greate#t a##o$iation# (it return on in-e#tment. 2ell*no(n li'uidity $on$e%t# #u$ a# t e $urrent and 'ui$* ratio# regi#tered 1; (in #ale#) affe$t# firm

in#ignifi$ant a##o$iation# ( il#t only one of t e ne(er (or*ing $a%ital $on$e%t#5 t e $om%re en#i-e li'uidity inde35 indi$ated #ignifi$ant a##o$iation# (it return on in-e#tment. All t e abo-e #tudie# %ro-ide u# a #olid ba#e and gi-e u# idea regarding (or*ing $a%ital management and it# $om%onent#. " ey al#o gi-e u# t e re#ult# and $on$lu#ion# of t o#e re#ear$ e# already $ondu$ted on t e #ame area for different $ountrie# and en-ironment from different a#%e$t#. ?n ba#i# of t e#e re#ear$ e# done in different $ountrie#5 (e a-e de-elo%ed our o(n met odology for re#ear$ . A==,)%"&1 #, M()= D$*,,+ 4B#- A')"* 455?:" e relation bet(een (or*ing $a%ital management and $or%orate %rofitablity i# in-e#tigated for a #am%le of 15BB@ large Belgian non4finan$ial firm# for t e 1@@!41@@A %eriod. "rade $redit %oli$y and in-entory %oli$y are mea#ured by number of day# a$$ount# re$ei-able5 a$$ount# %ayable and in-entorie#5 and t e $a# $on-er#ion $y$le i# u#ed a# a $om%re en#i$e mea#ure of (or*ing $a%ital management. " e re#ult# #ugge#t t at manager# $an in$rea#e $or%orate %rofitablity by redu$ing t e number of day# a$$ount# re$ei-able and in-entorie#. >e## %rofitable firm# (ait longer to %ay t eir bill#.

M. A.J E()"0(H(#" (J M. N.J A&&u() U&"8$)"/#" Pu#)( M(*(0/"(J M(*(0/"(.

(&% A.S.J A %u* R(-"! = ( J

& =

2or*ing $a%ital management i# im%ortant %art in firm finan$ial management de$i#ion. An o%timal (or*ing $a%ital management i# e3%e$ted to $ontribute %o#iti-ely to t e $reation of firm -alue. "o rea$ o%timal (or*ing $a%ital management firm manager # ould $ontrol t e trade off bet(een %rofitability and li'uidity a$$urately. " e %ur%o#e of t i# #tudy i# to in-e#tigate t e relation# i% bet(een (or*ing $a%ital management and firm %rofitability. Ca# $on-er#ion $y$le i# u#ed a# mea#ure of (or*ing $a%ital management. " i# #tudy i# u#ed %anel data of 1A!< firm4year for t e %eriod of 1@@A4 !BBA t at $on#i#t of #i3 different e$onomi$ #e$tor# ( i$ are li#ted in Bur#a Malay#ia. " e $oeffi$ient re#ult# of Pooled ?>S regre##ion analy#i# %ro-ide a #trong negati-e #ignifi$ant relation# i% bet(een

1<

A! $) C,**"&/ U&"8$)/"#0 ,+ P-,$&"<:2or*ing Ca%ital Management Con$e%t# 2or*# eet Con$e%t A%%li$ation of Con$e%t in t e Simulation =eferen$e to Con$e%t in =eading )e#$ribe t e firmC# $a# $on-er#ion $y$le: Ca# inflo( OMo#t firm# *ee% tra$* of t e a-erage time it ta*e# $u#tomer# to %ay t eir bill#. From t i# t ey $an fore$a#t ( at %ro%ortion of a 'uarterC# #ale# i# li*ely to be $on-erted into $a# in t at 'uarter and ( at %ro%ortion i# li*ely to be $arried o-er to t e ne3t 'uarter a# a$$ount# re$ei-ableO (Allen5 Brealey5 6 Myer# !BB:). >a(ren$e a-ing a %o#iti-e $a# balan$e (ould a-e el% in t e e-ent of flo( $ome# from emergen$ie# a# (ell a# un%lanned outflo( of money. Ca#

$olle$tion# on a$$ount# re$ei-able (Allen5 Brealey5 6 Myer# !BB:). E3amine t e effe$t# of $redit %oli$y on $a# $on-er#ion $y$le and re-enue: Commitment >a(ren$e ad a $ommitment to t e ban*5 Mayo5 Murray5 and 0artner. A==,)%"&1 #, C(),*$ H,H,)#- (&% P(u* W$/#-$(% M()=- 455?:2or*ing $a%ital management routine# of a large random #am%le of #mall $om%anie# in t e ,E are e3amined. Con#iderable -ariability in t e ta*e4u% of 11 (or*ing $a%ital management routine# (a# dete$ted. Prin$i%al $om%onent# analy#i# and $lu#ter analy#i# $onfirm t e identifi$ation of four di#tin$t Jty%e#G of $om%anie# (it regard to %attern# of (or*ing $a%ital management. " e fir#t t ree Jty%e#G of $om%anie# fo$u#ed u%on $a# management5 #to$* or debtor# routine# re#%e$ti-ely5 ( il#t t e fourt Jty%eG (ere le## li*ely to ta*e4u% any (or*ing $a%ital management routine#. Influen$e# on t e amount and fo$u# of (or*ing $a%ital management are di#$u##ed. Multinomial logi#ti$ regre##ion analy#i# #ugge#t# t at t e #ele$ted inde%endent -ariable# #u$$e##fully di#$riminated bet(een t e four Jty%e#G of $om%anie#. " e re#ult# #ugge#t t at #mall $om%anie# fo$u# only on area# of (or*ing $a%ital management ( ere t ey e3%e$t to im%ro-e marginal return#. " e diffi$ultie# of e#tabli# ing $au#ality are ig lig ted and im%li$ation# for a$ademi$#5 %oli$y4ma*er# and %ra$titioner# are re%orted. A==,)%"&1 #, M(0&()% E. R(+u/$J 26>>C3:Argue# t at attem%t# to im%ro-e (or*ing $a%ital by delaying %ayment to $reditor# i# $ounter4%rodu$ti-e to indi-idual# and to t e e$onomy a# a ( ole. Claim# t at altering debtor and $reditor le-el# for indi-idual tier# (it in a -alue #y#tem (ill rarely %rodu$e any net benefit. Pro%o#e# t at #to$* redu$tion generate# #y#tem4(ide finan$ial 1@

im%ro-ement# and ot er im%ortant benefit#. ,rge# t o#e organiDation# #ee*ing $on$entrated (or*ing $a%ital redu$tion #trategie# to fo$u# on #to$* management #trategie# ba#ed on +lean #u%%ly4$ ainP te$ ni'ue#. A==,)%"&1 #, J(!$/ A. G$&#)0J D"*$$' R. M$-#(:2or*ing $a%ital literature i# rat er limited and t e %ro$e## of managing # ortterm re#our$e# i# not under#tood (ell by a$ademi$ian#. In $ontra#t5 $or%orate manager# are $ontinuou#ly in-ol-ed in t e (or*ing $a%ital de$i#ion4ma*ing %ro$e##5 but t eir %er#%e$ti-e i# limited to t e %ra$ti$e# (it in t eir firm. In order to fill t i# ga% in t e (or*ing $a%ital literature5 a #tudy of management %er$e%tion# of t e (or*ing $a%ital %ro$e## (a# underta*en. A #ur-ey (a# u#ed to $olle$t information from a #am%le of mar*eting5 %rodu$tion5 and finan$ial e3e$uti-e# in large $or%oration# in Belgium5 Fran$e5 India5 and t e ,nited State#. " e #tudy inter%ret# management ran*ing of (or*ing $a%ital ob&e$ti-e# and indi$ate# t e need to im%ro-e finan$ial %lanning model# to in$lude e3%li$itly # ort4run ob&e$ti-e#N furt er5 %redi$tability of $a# inflo(# and outflo(# i# e3amined and t e %otential fa$tor# affe$ting %redi$tability are e-aluated. Finally5 t i# #tudy e3amine# management %er$e%tion# of long4range ob&e$ti-e# in order to %ro-ide a %ro%er %er#%e$ti-e to t e # ortrun finan$ial %lanning. A==,)%"&1 #, M.K. K,*(0:" e arti$le analy#e# t e +%ro#P and +$on#P of different #trategie# to be ado%ted to manage and a-oid (or*ing $a%ital $ri#i# #ituation# in any organi#ation. " e (or*ing $a%ital %o#ition de%end# on many organi#ational %arameter# ( i$ are interrelated and interde%endent5 and al#o -ary o-er time. In #u$ a #ituation5 t e u#e of a #y#tem dynami$# a%%roa$ #trategie#. A==,)%"&1 #, W(&1 E-u.u(& $# (* 455F:2or*ing $a%ital management i# t e main $ontent# of $or%orate finan$e5 #o t e #tudy in t i# field # ould gain mu$ attention. Com%ared (it t e ra%idly de-elo%ment of t e %ra$ti$e5 t e de-elo%ment of t e t eory a# been lagged ob-iou#ly #in$e 1@@BC#.2e 9B a# been ad-o$ated to refle$t t e rele-ant dynami$ $au#e4and4 effe$t relation# i%# for t e de-elo%ment of a%%ro%riate long4term and # ort4term

#ugge#t t at t e #tudy # ould begin from t e re$la##ifi$ation of (or*ing $a%ital5 and t en5 t e ne( frame(or* of t e t eory # ould be #et u%5 ( i$ i# ba#ed on t e #u%%ly4 $ ain management5 t e $ annel management and t e $u#tomer relation# i% management. Mean( ile5 (e # ould laun$ on t e #ur-ey of (or*ing $a%ital management of C ine#e $om%anie# and %romulgate t e re#ult#5 ( i$ $an offer t e data for t e #tudy and e-aluation of (or*ing $a%ital management.

A==,)%"&1 #, J(!$/ A. G$&#)0J P(u* N$H ,*%J D(8"% T. W-"#+,)%J 26>@A3 " e ob&e$ti-e# of t i# #tudy are to offer $a# ba#ed fund# flo( $om%onent# a# an alternati-e to finan$ial ratio# for $la##ifying t e finan$ial %erforman$e of $om%anie#N to te#t em%iri$ally t e ability of fund# flo( $om%onent# to di#tingui# bet(een failed and no failed $om%anie# (it #%e$ial em% a#i# on (or*ing $a%ital $om%onent#N to analyDe t e em%iri$al re#ult# and ma*e re$ommendation# for future #tudy. A==,)%"&1 #, J$++)$0 A/-$ 4555:2or*ing Ca%ital i# t e ,nited State#C large#t %eer4grou% lending %rogram. " i# arti$le re-ie(# ( at 2or*ing Ca%ital a# learned about t e mar*et5 it# $u#tomer#5 %rogram im%a$t5 and #er-i$e deli-ery o-er it# ten year under#tanding i#tory. It %re#ent# a model for o( %arti$i%ating in %eer lending grou%# de-elo%# +#o$ial and

e$onomi$ $a%italP in %oor $ommunitie#. " e arti$le t en di#$u##e# o( %arti$i%ant# &udge t e grou% model a# t ey identify t e $ ara$teri#ti$# of #u$$e##ful grou%# and t e im%a$t of t e grou% on t eir bu#ine##e#5 on t em#el-e# %er#onally5 and on t e larger $ommunity. " e re#t of t e arti$le di#$u##e# o( 2or*ing Ca%ital e-ol-ed from a #tart4u% o%eration in a #ingle to(n into a multi#tate %rogram and e3%lore# t e ad-antage# and limitation# of ra%id e3%an#ion. A $ e$*li#t for $ oo#ing affiliate %artner# i# %re#ented5 along (it a li#t of t e le##on# learned about deli-ering #er-i$e# t oug affiliate#. A==,)%"&1 #, A*(& P. H(!*"&J D(8"% F. H$(#-+"$*% 4555:2or*ing $a%ital i# a ne$e##ary in%ut to t e %rodu$tion %ro$e## and yet i# ignored in mo#t e$onomi$ model# of %rodu$tion. " e im%li$ation# of modeling t e time dimen#ion of %rodu$tion5 and en$e t e (or*ing $a%ital re'uirement# of firm#5 are

91

e3%lored5 (it %arti$ular #tre## %la$ed on t e $om%etiti-e ad-antage gained by firm# t at retain fle3ibility in t e time #tru$ture of t eir %rodu$tion. A==,)%"&1 #, VELLANKI S.S. KUMARJ AWAD S. HANNAJ TERESA ADAMSJ 245553:" e #y#temati$ a##e##ment of (or*ing $a%ital re'uirement in $on#tru$tion %ro&e$t# deal# (it t e analy#i# of -ariou# 'uantitati-e and 'ualitati-e fa$tor# in ( i$ to e-aluate t e im%a$t of 'ualitati-e fa$tor# for t e information i# #ub&e$ti-e and ba#ed on un$ertainty. " ere e3i#t# an in erent diffi$ulty in t e $la##i$al a%%roa$ a##e##ment of (or*ing $a%ital re'uirement. " i# %a%er %re#ent# a met odology to in$or%orate lingui#ti$ -ariable# into (or*able mat emati$al %ro%o#ition# for t e a##e##ment of (or*ing $a%ital u#ing fuDDy #et t eory. " i# arti$le ta*e# into $on#ideration t e un$ertainty a##o$iated (it many of t e %ro&e$t re#our$e -ariable# and t e#e are refle$ted #ati#fa$torily in t e (or*ing $a%ital $om%utation#. A $a#e #tudy illu#trate# t e a%%li$ation of t e fuDDy #et a%%roa$ . " e re#ult# of t e $a#e #tudy demon#trate t e #u%eriority of t e fuDDy #et a%%roa$ to $la##i$al met od# in t e a##e##ment of reali#ti$ (or*ing $a%ital re'uirement# for $on#tru$tion %ro&e$t#. A==,)%"&1 #, R"=-()% P$##0J J(!$/ Gu#-)"$J 245553:" e ri#e of t e +ne( e$onomyP5 one %rin$i%ally dri-en by information and *no(ledge5 i# attributed to t e in$rea#ed %rominen$e of intelle$tual $a%ital (IC) a# a bu#ine## and re#ear$ to%i$. Intelle$tual $a%ital i# im%li$ated in re$ent e$onomi$5 managerial5 te$ nologi$al5 and #o$iologi$al de-elo%ment# in a manner %re-iou#ly un*no(n and largely unfore#een. 2 et er t e#e de-elo%ment# are -ie(ed t roug t e filter of t e information #o$iety5 t e *no(ledge4ba#ed e$onomy5 t e net(or* #o$iety5 or inno-ation5 t ere i# mu$ to #u%%ort t e a##ertion t at IC i# in#trumental in t e determination of enter%ri#e -alue and national e$onomi$ %erforman$e. Fir#t5 (e #ee* to re-ie( #ome of t e mo#t #ignifi$ant e3tant literature on intelle$tual $a%ital and it# de-elo%ed %at . " e em% a#i# i# on im%ortant t eoreti$al and em%iri$al $ontribution# relating to t e mea#urement and re%orting of intelle$tual $a%ital. " e #e$ond %art of t i# %a%er identifie# %o##ible future re#ear$ i##ue# into t e nature5 im%a$t and -alue of intelle$tual management and re%orting.

9!

A==,)%"&1 #, Su/-!( V"/-&(&"J FCAJ (&% F"&(&=$ F(=u*#0:It i# felt t at t ere i# t e need to #tudy t e role of (or*ing $a%ital management %oli$ie# on %rofitability of a $om%any. Con-entionally5 it a# been #een t at if a $om%any de#ire# to ta*e a greater ri#* for bigger %rofit# and lo##e#5 it redu$e# t e #iDe of it# (or*ing $a%ital in relation to it# #ale#. If it i# intere#ted in im%ro-ing it# li'uidity5 it in$rea#e# t e le-el of it# (or*ing $a%ital. Fo(e-er5 t i# %oli$y i# li*ely to re#ult in a redu$tion of t e #ale# -olume5 t erefore of %rofitability. Fen$e5 a $om%any # ould #tri*e a balan$e bet(een li'uidity and %rofitability. In t i# %a%er an effort a# been made to ma*e an em%iri$al #tudy of Indian Con#umer Ele$troni$# Indu#try for a##e##ing t e im%a$t of (or*ing $a%ital %oli$ie# 6 %ra$ti$e# on %rofitability during t e %eriod 1@@9I@: to !BB9IB:. " e im%a$t of (or*ing $a%ital %oli$ie# on %rofitability a# been e3amined by $om%uting $oeffi$ient of $orrelation and regre##ion analy#i# bet(een %rofitability ratio and #ome *ey (or*ing $a%ital %oli$y indi$ator ratio#.

A==,)%"&1 #, C-()*$/ O. E1 uJ 2455A3:Inno-ation i# -ie(ed a# a ma&or #our$e of $om%etiti-e ad-antage and i# %er$ei-ed to be a %re4re'ui#ite for organiDational #u$$e## and #ur-i-al. " e ability to inno-ate de%end# largely on t e (ay in ( i$ an organi#ation u#e# and e3%loit# t e re#our$e# a-ailable to it. " e %a%er e3%lore# t e im%ortan$e of *no(ledge management (EM) and intelle$tual $a%ital (IC) in organi#ation#. It al#o $on#ider# t e $riti$al fa$tor# t at lead to #u$$e##ful inno-ation# and t e role of EM and IC in t i# regard. " e %a%er argue# t at effe$ti-e management of *no(ledge a##et# in-ol-e# a oli#ti$ a%%roa$ to a o#t of fa$tor#. It i# al#o #ugge#ted t at t ere are a o#t of fa$tor# t at $ombine in different (ay# to %rodu$e #u$$e##ful organiDational inno-ation#. It re$ommend# t at more i# needed on t e edu$ation and training of $on#tru$tion %er#onnel and t at t e#e edu$ation and training %rogramme# # ould refle$t t e nature of inno-ation and EM dimen#ion# a# -ery $om%le3 #o$ial %ro$e##e#. A==,)%"&1 #, K$&&$#- A. F),,# (&% J$)$!0 C. S#$"& "& 6>>@:2e de-elo% a frame(or* for analyDing t e $a%ital allo$ation and $a%ital #tru$ture de$i#ion# fa$ing finan$ial in#titution#. ?ur model in$or%orate# t(o *ey feature#: (i) -alue4ma3imiDing ban*# a-e a (ell4founded $on$ern (it ri#* managementN and (ii) 91

not all t e ri#*# t ey fa$e $an be fri$tionle##ly edged in t e $a%ital mar*et. " i# a%%roa$ allo(# u# to # o( o( ban*4le-el ri#* management $on#ideration# # ould fa$tor into t e %ri$ing of t o#e ri#*# t at $annot be ea#ily edged. 2e e3amine #e-eral a%%li$ation#5 in$luding: t e e-aluation of %ro%rietary trading o%eration#5 and t e %ri$ing of un edgeable deri-ati-e# %o#ition#. 2e al#o $om%are our a%%roa$ to t e RAROC met odology t at a# been ado%ted by a number of ban*#. A==,)%"&1 #, P)(%$$' S"&1- 2455@3:Em%iri$ally analy#ed t at a firmG# (or*ing $a%ital $on#i#t# of it# in-e#tment# in $urrent a##et#5 ( i$ in$lude# # ort4term a##et#Q$a# and ban* balan$e5 in-entorie#5 re$ei-able and mar*etable #e$uritie#. " erefore5 t e (or*ing $a%ital management refer# to t e management of t e le-el# of all t e#e indi-idual $urrent a##et#. ?n t e ot er and5 in-entory5 ( i$ i# one of t e im%ortant element# of $urrent a##et#5 refle$t# t e in-e#tment of a firmG# fund. Fen$e5 it i# ne$e##ary to effi$iently manage in-entorie# in order to a-oid unne$e##ary in-e#tment#. A firm5 ( i$ negle$t# t e management of in-entorie#5 (ill a-e to fa$e #eriou# %roblem# relating to long4term %rofitability and may fail to #ur-i-e. 2it t e el% of better in-entory management5 a firm $an redu$e t e le-el# of in-entorie# to a $on#iderable degree. J" i# %a%er trie# to e-aluate t e effe$t of t e #iDe of in-entory and t e im%a$t on (or*ing $a%ital t roug in-entory ratio#5 (or*ing $a%ital ratio#5 trend#5 $om%utation of in-entory and (or*ing $a%ital5 and li'uidity ran*ing. Finally5 it (a# found t at t e #iDe of in-entory dire$tly affe$t# (or*ing $a%ital and itC# management. SiDe of t e in-entory and (or*ing $a%ital of Indian Farmer# FertiliDer Coo%erati-e >imited (IFFC?) i# %ro%erly managed and $ontrolled $om%ared to National FertiliDer >td. (NF>). A==,)%"&1 #, P$%), Ju(& G()=NO(-T$)u$* (&% P$%), M()#NO&$P-S,*(&, 2455F3:Condu$ted re#ear$ for t e ob&e$t of t e re#ear$ %re#ented in t i# %a%er i# to %ro-ide em%iri$al e-iden$e on t e effe$t# of (or*ing $a%ital management on t e %rofitability of a #am%le of #mall and medium4#iDed S%ani# firm#. " e re#ult#5 ( i$ are robu#t to t e %re#en$e of endogeneity5 demon#trate t at manager# $an $reate -alue by redu$ing t eir in-entorie# and t e number of day# for ( i$ t eir a$$ount# are out#tanding. Moreo-er5 # ortening t e $a# $on-er#ion $y$le al#o im%ro-e# t e firmG# %rofitability.

99

" e aim i# to en#ure t at t e relation# i%# found in t e analy#i# $arried out are due to t e effe$t# of t e $a# $on-er#ion $y$le on $or%orate %rofitability and not -i$e -er#a. A==,)%"&1 #, N("*( I. (* 245563:E3amined t at for in$rea#ing # are olderC# (ealt a firm a# to analyDe t e effe$t of fi3ed a##et# and $urrent a##et# on it# return and ri#*. 2or*ing Ca%ital Management i# related (it t e Management of $urrent a##et#. " e Management of $urrent a##et# i# different from fi3ed a##et# on t e ba#i# of t e follo(ing %oint# i.e Current a##et# are for # ort %eriod ( ile fi3ed a##et# are for more t an one 7ear." e large olding# of $urrent a##et#5 e#%e$ially $a# 5 #trengt en# >i'uidity %o#ition but al#o redu$e# o-erall %rofitability5 and to maintain an o%timum le-el of li'uidity and %rofitability5 ri#* return trade off i# in-ol-ed olding Current a##et#.?nly Current A##et# $an be el%# ad&u#ted (it #ale# flu$tuating in t e # ort run. " u#5 t e firm a# greater degree of fle3ibility in managing $urrent A##et#. " e management of Current A##et# $ondition. A==,)%"&1 #, V$**(&7" S. Ku!()J AH(% S.H(&&(J T$)$/( A%(!/ 245553:Condu$ted re#ear$ and e3amined t at t e #y#temati$ a##e##ment of (or*ing $a%ital re'uirement in $on#tru$tion %ro&e$t# deal# (it t e analy#i# of -ariou# 'uantitati-e and 'ualitati-e fa$tor# in ( i$ information i# #ub&e$ti-e and ba#ed on un$ertainty. " ere e3i#t# an in erent diffi$ulty in t e $la##i$al a%%roa$ to e-aluate t e im%a$t of 'ualitati-e fa$tor# for t e a##e##ment of (or*ing $a%ital re'uirement. " i# %a%er %re#ent# a met odology to in$or%orate lingui#ti$ -ariable# into (or*able mat emati$al %ro%o#ition# for t e a##e##ment of (or*ing $a%ital u#ing fuDDy #et t eory. " i# arti$le ta*e# into $on#ideration t e un$ertainty a##o$iated (it many of t e %ro&e$t re#our$e -ariable# and t e#e are refle$ted #ati#fa$torily in t e (or*ing $a%ital $om%utation#. A $a#e #tudy illu#trate# t e a%%li$ation of t e fuDDy #et a%%roa$ . " e re#ult# of t e $a#e #tudy demon#trate t e #u%eriority of t e fuDDy #et a%%roa$ to $la##i$al met od# in t e a##e##ment of reali#ti$ (or*ing $a%ital re'uirement# for $on#tru$tion %ro&e$t#. affirm in building a good mar*et re%utation regarding it# bu#ine## and e$onomi$

9:

A==,)%"&1 #, M(0&()% E. R(+u/$ 26>>C3:4 Argue# t at attem%t# to im%ro-e (or*ing $a%ital by delaying %ayment to $reditor# i# $ounter4%rodu$ti-e to indi-idual# and to t e e$onomy a# a ( ole. Claim# t at altering debtor and $reditor le-el# for indi-idual tier# (it in a -alue #y#tem (ill rarely %rodu$e any net benefit. Pro%o#e# t at #to$* redu$tion generate# #y#tem (ide finan$ial im%ro-ement# and ot er im%ortant benefit#. ,rge# t o#e organiDation# #ee*ing $on$entrated (or*ing $a%ital redu$tion #trategie# to fo$u# on #to$* management #trategie# ba#ed on +lean #u%%ly4$ ainP te$ ni'ue#.

9A

CHAPTER : ?
OBJECTIVES OF THE STUDY

Fi3ing t e ob&e$ti-e i# li*e identifying t e #tar. " e ob&e$ti-e de$ide# ( ere (e (ant to go5 ( at (e (ant to a$ ie-e and ( at i# our goal or de#tination. E-ery #tudy i# $arried out for t e a$ ie-ement of $ertain ob&e$ti-e#.

i. ii. iii.

"o analyDe t e -ariou# $om%onent# of (or*ing $a%ital of >6". "o #tudy t e finan$ing of (or*ing $a%ital of >6". "o #tudy and analyDe t e o%erating $y$le of >6".

9;

CHAPTER : A
RESEARCH METHODOLOGY

DATA COLLECTION METHODS:

" e data (ill be $olle$ted u#ing bot by %rimary data $olle$tion met od# a# (ell a# #e$ondary #our$e#. PRIMARY DATA: Mo#t of t e information (ill be gat ered t roug %rimary

#our$e#. " e met od# t at (ill be u#ed to $olle$t %rimary data are:

a) Mue#tionnaire b) Inter-ie( SECONDARY DATA: Se$ondary data t at (ill be u#ed are (eb #ite# and

%ubli# ed material# related to (or*ing $a%ital management a# (ell a# any rele-ant information on $a%ital of t e $om%any at Fe#ton Eu(ait.

SAMPLE SIEE : :B4;:

9<

CHAPTER : B
DATA ANALYSIS

Ba&a$" S# t '% La0s $ a$! T'+.0'

Mar CBA 1! mt # Sour$e# ?f Fund# "otal S are Ca%ital E'uity S are Ca%ital S are A%%li$ation Money Preferen$e S are Ca%ital =e#er-e# =e-aluation =e#er-e# Net(ort Se$ured >oan# ,n#e$ured >oan# "otal )ebt "otal >iabilitie#

1111111111111111111 i$ Rs* C0* 1111111111111111111

Mar CB; 1! mt #

Mar CB< 1! mt #

Mar CB@ Mar C1B 1! mt # 1! mt #

!;.9< !;.9< B.BB B.BB 95:<1.1 ! !@.1; 95A9B.1 ; 9A:.;@ @<;.;< 159:1.: ; A5B@1.; 9 Mar CBA 1! mt #

:A.A: :A.A: B.BB B.BB :5A<1.<: !;.@1 :5;A<.91 !9:.9B 15<1!.1: !5B;;.;: ;5<9A.1< Mar CB; 1! mt #

:<.9; :<.9; B.BB B.BB @59;B.;1 !:.@B @5:::.B< 1B<.:1 15!;:.9A 15:<1.@@ 11511@.B; Mar CB< 1! mt #

11;.19 11;.19 B.BB B.BB 1!511;.@A !9.:@ 1!59:@.A@ 151B!.1< :59:1.A:

1!B.99 1!B.99 !:.B@ B.BB 1<519!.< ! !1.!@ 1<5111.A 9 @::.;1 :5<9:.1B

A5::A.B1 A5<BB.<1 1@5B1:.;! !:511!.9 ; Mar CB@ Mar C1B

1! mt # 1! mt #

A%%li$ation ?f Fund# 0ro## Blo$* >e##: A$$um. )e%re$iation Net Blo$* Ca%ital 2or* in Progre## In-e#tment# In-entorie# !51BB.A < @<!.!! 1511<.9 A !<A.BA 15@1@.: ! !5!1B.! ; 9@ !5<;A.1B 151!!.<1 15;:1.9; 9;1.!! 151B9.99 15BB1.19 951<<.@1 15!9!.9; !5@9A.99 A@@.BB A5@!!.!A 951B:.@1 :5:;:.BB ;5!1:.;< 159!1.1@ 15;!;.A< 951:1.A1 :5:B<.1B 15B9B.@@ <:;.AA 115;B:.1 <5!A1.;! : :5<B:.B: 1591:.1;

Sundry )ebtor# Ca# and Ban* Balan$e "otal Current A##et# >oan# and Ad-an$e# Fi3ed )e%o#it# "otal CA5 >oan# 6 Ad-an$e# )effered Credit Current >iabilitie# Pro-i#ion# "otal C> 6 Pro-i#ion# Net Current A##et# Mi#$ellaneou# E3%en#e# "otal A##et# Contingent >iabilitie# Boo* Halue (=#)

95<19.1 A 1@<.;1 ;59!1.1 9 !5BA1.: B 1<9.9@ @5AA@.1 1 B.BB A51BA.B 9 15B1:.1 ; ;51!1.9 1 !5:9;.; ! !1.@< A5B@1.; 9 1B:.:@ 11:.A1

:5:B9.A9 @@1.A< @59@@.9A !599@.19 1BB.;: 1!5B9@.1: B.BB <51A!.B1 151<B.11 @5:9!.19 !5:B;.!1 @.<9 ;5<9A.1< !;B.!! !B!.A:

;51A:.B1 ;;@.<A 1!59:B.;< 15<A1.1B 1<9.AB 1A59@A.9< B.BB 115<@!.;: !5B1:.9! 115@!<.1; !5:A<.11 1.BA 11511@.B; 15B11.:1 1!:.@<

1B5B::.:! A@1.11 1A5::1.;B ;51@<.<: <!.1A !15<19.;1 B.BB 1:5!11.B9

1151A1.; B 151B9.<@ 115A<1.@ A 1!5AA!.: : 1!A.@< !A5A;1.9 @ B.BB 1@5991.; ; !15A1!.1 1

15BAA.:1 !51<<.1A 1<5!;;.:;

:5::;.19 :5B91.1A B.BB !:511!.9 1@5B1:.;! ; 151;1.<A 15;1@.1@ !1!.1! 1B1.!< B.!A

PROFIT AND LOSS ACCOUNTS:

L()/$& (&% T,u ),

P),+"# & L,// (==,u&#
M() ;5C 1! mt # I&=,!$ Sale# "urno-er E3$i#e )uty Net Sale# ?t er In$ome Sto$* Ad&u#tment# T,#(* I&=,!$ E<'$&%"#u)$ =a( Material#
1111111111111111111 i$ Rs* C0* 1111111111111111111

M() ;5F 1! mt #

M() ;5@ 1! mt #

M() ;5> 1! mt #

M() ;65 1! mt #

1:5B1B.<1 1;5@<1.1; !:5!<B.9@ 195!9@.<: 1;51<;.:B !:1.<A 11<.B< 119.1< 1@1.11 11;.11 195;;A.@: 1;5A9:.!@ !95@9A.11 115<:A.:9 1A5<;B.1@ :!;.:! 9:@.<B A1A.A@ 15A1!.:< !51!1.A; 41B1.!9 1!1.;A ;9A.1; 1B:.11 49!!.@@ 6BJ456.4? 6@J44C.@B 4CJ?5@.>F ?BJBFA.4? ?@JFC@.@F 95:1B.;< :51!B.@< :B <5!:A.9A @511A.1< @5:@1.:1

Po(er 6 Fuel Co#t !!1.:B 1B<.11 1A:.!: 9:A.1@ 119.B< Em%loyee Co#t <@B.B1 15!:<.!1 15:1:.99 15@@<.B! !51;@.19 ?t er Manufa$turing A5A9;.;B ;59:1.B; 1B5A1!.<1 1:5A:@.1; 1A5@11.11 E3%en#e# Selling and Admin E3%en#e# @@A.:@ 15!!!.<B 151@1.<B 15<99.<1 15<:9.!1 Mi#$ellaneou# E3%en#e# 1!:.BB 1AA.1: !<B.A@ :A@.1! 1!:.:< Preo%erati-e E3% Ca%itali#ed 41.<@ 41.1B 411.9! 4!9.9< 41A.!: "otal E3%en#e# 1151<@.;1 1:5;!9.B9 !!59:1.B: !@5<1@.A1 1151A1.A! M() ;5C M() ;5F M() ;5@ M() ;5> M() ;65 1! mt # O'$)(#"&1 P),+"# PB)I" Intere#t PB)" )e%re$iation ?t er 2ritten ?ff Profit Before "a3 E3tra4ordinary item# PB" (Po#t E3tra4ord Item#) "a3 R$',)#$% N$# P),+"# "otal Halue Addition Preferen$e )i-idend E'uity )i-idend Cor%orate )i-idend "a3 P$) /-()$ %(#( 2(&&u(*"/$%3 S are# in i##ue (la* #) E()&"&1/ P$) S-()$ 2R/3 E'uity )i-idend (S) Boo* Halue (=#) 1! mt # 1! mt # 1! mt # 1! mt # 6J4@A.55 4J5A?.56 ?J4?>.4? AJ6A4.54 BJ5@?.B@ 15<11.:! !5:B!.<1 15<::.@! :5;:9.AB ;59B:.!: 1!1.19 111.9A :B1.<1 ;;B.BB @@:.1; 159@B.1< !51;1.1: 151:9.B@ 95@<9.AB A59B@.<< 1B;.1! 1AB.11 1@:.@9 !<9.<1 1<1.A: B.BB B.BB 1:.AA !1.1A 1B.@: 151<1.BA !5B11.!! 1519!.9@ 95A;<.A1 :5@@:.!< 41.<: 4:.19 1!.!1 4!1.B@ 49:.11 151<1.!1 !5BB:.<< 151:9.;B 95A:;.:! :5@:B.1: 1AA.1! AB1.<; @<!.B: 151;A.1@ 15:;;.B! 6J564.6A 6JA5?.54 4J6F?.A4 ?JA@6.CC AJ?FB.B4 <5<;<.@1 1B59B1.BA 1951@A.:@ !B5:B1.!: !15;;B.B@ B.BB B.BB B.BB B.BB B.BB 1B!.!: 1A<.!: 9@:.1! A19.@; ;:!.;: 9!.1@ :1.19 ;A.!A 1B1.<1 11B.!: 151;1.<A F?.CF 151BB.BB 11:.A1 !5<1!.;1 A>.B? A:B.BB !B!.A: !5@!1.!; FA.?B <:B.BB 1!:.@< :5<:A.<< B>.AB :!:.BB !1!.1! A5B!1.@: F4.CC A!:.BB 1B1.!<

:1

CASH FLOW:
L()/$& (&% T,u ), C(/- F*,H

------------------- "& R/. C). ------------------M() ;5C 1! mt # M() ;5F 1! mt # 455A.@> !11B.9: M() ;5@ 1! mt # ?6BB.AF 1@9:.!9 M() ;5> 1! mt # ?>A5.A6 19;<.:; M() ;65 1! mt # B@@5.CF :9<!.;:

N$# P),+"# B$+,)$ T(< Net Ca# From ?%erating A$ti-itie# Net Ca# (u#ed in).from In-e#ting A$ti-itie# Net Ca# (u#ed in).from Finan$ing A$ti-itie# N$# 2%$=)$(/$3Q"&=)$(/$ I& C(/- (&% C(/- E.u"8(*$&#/ ?%ening Ca# 6 Ca# E'ui-alent# Clo#ing Ca# 6 Ca# E'ui-alent#

6?@?.A5 11A@.!:

411!A.1B 41:<<.1; 4:!91.<@ 411B<.:1 4AB;1.;1 4!<;.;; -4AA.@4 <!<.B! :<1.!B 411.B: B66.4? :<1.!B 1B@9.91 11AA.A< -64>.>F 1B@9.91 @A9.9A 1A9B.;@ -6@>.6F @A9.9A ;;:.!@ 1!9:.:A CBC.B@ ;;:.!@ 1911.<;

MUARTERLY RESULTS:
L()/$& (&% T,u ), Mu()#$)*0 R$/u*#/

------------------- "& R/. C). ------------------M() ;65 Ju& ;65 FJ@@B.?6 !!A.;A @J664.5F CJ@F@.4C 6J55F.5B 44 44 44 44 44 :! S$' ;65 D$= ;65 M() ;66

S(*$/ Tu)&,8$) ?t er In$ome T,#(* I&=,!$ T,#(* E<'$&/$/ O'$)(#"&1 P),+"# Profit ?n Sale ?f A##et# Profit ?n Sale ?f In-e#tment# 0ain.>o## ?n Foreign E3$ ange H=S Ad&u#tment ?t er E3traordinary In$ome.E3%en#e#

6?JB@B.65 1!@.<9 6?J>6A.>A 66JB?A.?A 4J5B5.FC 44 44 44 44 44

>J??5.FC 66JA6?.5@ 6BJ?@A.46 1<!.1@ !9;.1< 1A@.<! >JF64.>B 66JCC5.4C 6BJFBA.5? @J?4B.5@ 65J6FB.6> 6?J5A4.?B 6J55B.C@ 6J4?F.@> 4J?A6.@C 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44

"otal E3traordinary In$ome.E3%en#e# "a3 ?n E3traordinary Item# Net E3tra ?rdinary In$ome.E3%en#e# G),// P),+"# Intere#t PB)" )e%re$iation )e%re$iation ?n =e-aluation ?f A##et# PB" "a3 N$# P),+"# Prior 7ear# In$ome.E3%en#e# )e%re$iation for Pre-iou# 7ear# 2ritten Ba$*. Pro-ided )i-idend )i-idend "a3 D"8"%$&% 2R3 E()&"&1/ P$) S-()$ Boo* Halue E'uity =e#er-e# Fa$e Halue

1BB.A@ 44 44

44 44 44

;B.<9 44 44

1:.1B 44 44 6JA@B.5F 1;:.;1 15199.AA 1!<.B@ 44 15!1A.:; 1;A.B9 @A5.B? 44 44 44 44 -6?.@? 44 1!1.:A 44 !.BB

!!:.;; 44 44 4JF66.C@ 11A.1; !5<B1.!< !1:.;; 44 !5:A:.:1 <;@.1B 6JC@C.46 44 44 44 44 -4F.C> 44 1!1.;; 44 !.BB

4J?@5.C5 6J4??.@6 6J?@F.@F 11:.:A 19!.19 1@1.1: !519:.;1 15B@1.9; 15!A:.:A 11A.!! 119.1: 1!1.!1 44 !5!!@.:1 ;@1.91 6JA?@.65 44 44 44 44 -4?.@@ 44 1!B.99 44 !.BB 44 44

@;;.1! 15199.1: 111.1: 1;@.1; CCC.6F FCA.>@ 44 44 44 44 -66.5A 44 1!B.A1 44 !.BB 44 44 44 44 -64.CB 44 1!B.@@ 44 !.BB

:1

HALF YEARLY RESULTS:

L()/$& (&% T,u ), H(*+ Y$()*0 R$/u*#/ ------------------- "& R/. C). ------------------S$' ;5@ S$' ;5> M() ;65 S$' ;65 M() ;66 C !#-/ C !#-/ C !#-/ C !#-/ C !#-/

S(*$/ Tu)&,8$) 6AJB>6.4A 6BJ?4F.6? 46JF5F.CF 6FJ464.44 4CJF>F.4> ?t er In$ome 11A.:; 99B.19 9A@.@1 :@;.!@ A1;.BB T,#(* I&=,!$ 6AJ>4F.@6 6BJFCF.AF 44J6FF.B@ 6FJ@5>.B6 4FJA6A.4> T,#(* E<'$&/$/ 6?J4?B.@@ 6?JCB@.56 6@JBC6.4A 6BJ6@F.@? 4?J46F.BA O'$)(#"&1 P),+"# 6J?BB.?C 6JCC>.64 ?J6AC.A? 4J54A.?> ?JBF>.FB Profit ?n Sale ?f A##et# 44 44 44 44 44 Profit ?n Sale ?f 44 44 44 44 44 In-e#tment# 0ain.>o## ?n Foreign 44 44 44 44 44 E3$ ange H=S Ad&u#tment 44 44 44 44 44 ?t er E3traordinary 44 44 44 44 44 In$ome.E3%en#e# "otal E3traordinary 44 15B9;.!A 1A1.!9 ;B.<9 !A1.B; In$ome.E3%en#e# "a3 ?n E3traordinary Item# 44 44 44 44 44 Net E3tra ?rdinary 44 44 44 44 44 In$ome.E3%en#e# G),// P),+"# 6JC>6.>? 4J65>.AC ?JC6C.?A 4JC46.C@ AJ6>C.FB Intere#t 1B;.!9 !9B.:: !A9.;A 11:.9@ 111.<< PB)" 1:<9.A@ !@1A.1; 1:19.<! !1:;.B1 919:.@9 )e%re$iation 11<.@1 1@1.<A !!B.;9 !1:.1A 1A1.<A )e%re$iation ?n =e-aluation 44 44 44 44 44 ?f A##et# PB" 199:.;A !;!!.11 1!@9.B< !1!1.A; 1;<!.B< "a3 9<1.BA :91.;1 15B@;.1A A@B.:! 15!::.19 N$# P),+"# >C4.F5 4J6F@.C5 4J6>C.>4 6JA?6.6B 4JB4C.FA Prior 7ear In$ome.E3%en#e# 44 44 44 44 44 )e%re$iation for Pre-iou# 7ear# 2ritten Ba$*. 44 44 44 44 44 Pro-ided )i-idend 44 44 44 44 44 )i-idend "a3 44 44 44 44 44 D"8"%$&% 2R3 -----E()&"&1/ P$) S-()$2R/3 ?4.>5 ?F.5F ?C.A@ 4?.CC A6.B5 :9

Boo* Halue(=#) E'uity =e#er-e# Fa$e Halue(=#)

44 :<.:! 44 !.BB

44 44 11;.:1 1!B.99 44 1<519!.<! !.BB !.BB

44 44 1!B.@@ 1!1.;; 44 !15;B!.1A !.BB !.BB

NINE MONTHLY RESULT:

L()/$& (&% T,u ), N"&$ M,&#-/ ------------------- "& R/. C). ------------------D$= ;5C D$= ;5F D$= ;5@ D$= ;5> D$= ;65

S(*$/ Tu)&,8$) 66J??5.C5 6CJ?@F.@? 4?J45@.5? 4?JAA@.4@ 4@JC6F.B? ?t er In$ome !:<.1: 11:.A; A1@.@@ AA1.B; <9B.:1 T,#(* I&=,!$ 66JB@@.FB 6CJF4?.B5 4?J@A@.54 4AJ65>.?B 4>JAB@.5C T,#(* E<'$&/$/ 65J?>?.>5 6AJC@@.6@ 46J5C>.5C 45JFCA.6B 4BJ?B6.?6 O'$)(#"&1 P),+"# >?C.F5 6JC>>.CB 4J6?@.>F 4JC@A.6? ?J4CC.44 Profit ?n Sale ?f A##et# 44 44 44 44 44 Profit ?n Sale ?f 44 44 44 44 44 In-e#tment# 0ain.>o## ?n Foreign 44 44 44 44 44 E3$ ange H=S Ad&u#tment 44 44 44 44 44 ?t er E3traordinary 44 44 44 44 44 In$ome.E3%en#e# "otal E3traordinary 44 44 @1A.11 151B@.<1 1BA.19 In$ome.E3%en#e# "a3 ?n E3traordinary Item# 44 44 44 44 44 Net E3tra ?rdinary 44 44 44 44 44 In$ome.E3%en#e# G),// P),+"# 6J6>A.@B 4J5?B.?4 4JFF@.>C ?J?AB.45 AJ65C.FB Intere#t !;.AB ;!.<B !B9.;; 1A@.;: :11.!B PB)" 151A;.!: 15@A!.:! 159@B.:! 95B<:.!A 15;B1.A@ )e%re$iation 1BB.!B 191.91 !1;.B: !@<.1< 1A1.9: )e%re$iation ?n =e-aluation 44 44 44 44 44 ?f A##et# PB" 15BA;.B: 15<1@.B@ 15!;1.9; 15;<A.<< 1511<.!9 "a3 1A9.<B A1!.91 ;@B.11 <9@.9A 15BAA.:A N$# P),+"# F54.4B 6J45C.CC 4JA@?.6A 4J>?F.A4 4J4F6.C@ Prior 7ear# In$ome.E3%en#e# 44 44 44 44 44 )e%re$iation for Pre-iou# 44 44 44 44 44 ::

7ear# 2ritten Ba$*. Pro-ided )i-idend )i-idend "a3 D"8"%$&% 2R3 E()&"&1/ P$) S-()$ Boo* Halue E'uity =e#er-e# Fa$e Halue

44 44 -4B.5? 44 :A.11 44 !.BB

44 44 -A6.?B 44 :<.1; 44 !.BB

44 44 -A4.A4 44 11;.B; 44 !.BB

44 44 -A@.>A 44 1!B.B: 44 !.BB

44 44 -?F.?@ 44 1!1.:A 44 !.BB

YEARLY RESULTS:
L()/$& (&% T,u ), Y$()*0 R$/u*#/ ------------------- "& R/. C). -------------------

M() ;5F S(*$/ Tu)&,8$) ?t er In$ome T,#(* I&=,!$ T,#(* E<'$&/$/ O'$)(#"&1 P),+"# Profit ?n Sale ?f A##et# Profit ?n Sale ?f In-e#tment# 0ain.>o## ?n Foreign E3$ ange H=S Ad&u#tment ?t er E3traordinary In$ome.E3%en#e# "otal E3traordinary In$ome.E3%en#e# "a3 ?n E3traordinary Item# Net E3tra ?rdinary In$ome.E3%en#e# G),// P),+"# Intere#t PB)"

M() ;5@

M() ;5>

M() ;65

M() ;66

6FJBF@.@A 4AJ@BA.F5 ??J>4C.?F ?FJ5?A.@5 A?J>5A.>6 9A!.!@ :<;.<; ;1@.;< @1B.!: 151@9.<: 6@J5A6.6? 4BJAA4.BF ?AJCCC.6B ?FJ>AB.5B ABJ5>>.FC 6BJ@?4.?5 44J5A5.5F ?5J5C>.B? ?4J46>.4B ?@J4@4.?? 6JFAC.BA 4J@6A.C? ?J@BC.@A AJ@6B.BB BJC44.B@ 44 44 44 44 44 44 44 44 44 44 44 44 4J45@.@? 11.@1 !51;9.@B 44 44 44 44 <;.!1 44 44 ?JA54.B5 1!!.AA 151A;.B; :A 44 44 44 44 ;;!.9A 44 44 AJB>C.C4 1:B.!! :5B1<.<A 44 44 44 44 15!1B.:B 44 44 BJF4B.@5 :B:.11 A591B.@@ 44 44 44 44 11!.@1 44 44 CJ@6F.A? A9;.1; A5:B!.@;

)e%re$iation )e%re$iation ?n =e-aluation ?f A##et# PB" "a3 N$# P),+"# Prior 7ear# In$ome.E3%en#e# )e%re$iation for Pre-iou# 7ear# 2ritten Ba$*. Pro-ided )i-idend )i-idend "a3 D"8"%$&% 2R3 E()&"&1/ P$) S-()$ Boo* Halue E'uity =e#er-e# Fa$e Halue

1;B.B1 44 !5BB9.<@ AB1.<; 6JA5?.54 44 44 44 44 -A>.B? 44 :A.A: :5A<1.<: !.BB

!11.AB 44 151::.9; @<!.B: 4J6F?.A4 44 44

1B:.@@ 44 95;1!.<; 15!11.!1 ?JA@6.CC 44 44

919.AB 44 A5B1A.1@ 15A9B.<; AJ?FB.B4 44 44

:@@.!! 44 :5@B1.;: 15@9:.<A ?J>BF.@> 44 44

44 44 44 44 44 44 44 44 ----FA.?A B>.AA F4.CC CB.56 44 44 44 44 :<.9; 11;.19 1!B.99 1!1.;; @59;B.;1 1!511;.@A 1<519!.<! !15;B!.1A !.BB !.BB !.BB !.BB

CAPITAL STRUCTURE:
L()/$& (&% T,u ), C('"#(* S#)u=#u)$ P$)",% I&/#)u!$&# F),! T, !BB@ !B1B E'uity S are !BB< !BB@ E'uity S are !BB; !BB< E'uity S are

--- CAPITAL 2R/. =)3 ---PAIDUPAu#-,)"/$% I//u$% S-()$/ 2&,/3 F(=$ V(*u$ C('"#(* !19.;: 1!B.99 AB!1@:9B< ! 1!B.99 !19.;: 11;.19 :<:A<;<A! ! 11;.19 !19.;: :<.9; !@!1!;1@B ! :<.9; :;

!BBA !BB: !BB9 !BB1 !BB! !BB1 !BBB 1@@@ 1@@< 1@@; 1@@A 1@@: 1@@9 1@@1 1@@! 1@@1 1@@B 1@<@ 1@<; 1@<A 1@<: 1@<9 1@<! 1@<1 1@;@ 1@;< 1@;: 1@;1 1@;! 1@A@ 1@A; 1@A9 1@A! 1@AB 1@:@ 1@:< 1@:; 1@:A 1@:: 1@:9 1@:B

!BB; !BBA !BB: !BB9 !BB1 !BB! !BB1 !BBB 1@@@ 1@@< 1@@; 1@@A 1@@: 1@@9 1@@1 1@@! 1@@1 1@@B 1@<@ 1@<; 1@<A 1@<: 1@<9 1@<! 1@<1 1@;@ 1@;< 1@;: 1@;1 1@;! 1@A@ 1@A; 1@A9 1@A! 1@AB 1@:@ 1@:< 1@:; 1@:A 1@:: 1@:9

E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S E'uity S

are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are are

!19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: 11: <B ;9.@< ;9.@< ;9.@< 1<.<1 1<.<1 !<.<1 1<.<1 11.<1 <.: <.: <.: 9.< 9.< !.< 1.< 1.< 1.< B.< B.< B.< B.< B.< B.< :<

:A.A: !;.9< !:.@< !9.<< !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !11.!9 !11.!9 1!@.A1 ;:.9! A<.B< AB.;: :1.@@ :1.@@ 1!.: !9.B! !1.B; 19.9! 11.:1 ;.9: :.@A 9.:! 1.@@ 1.A1 !.A9 1.A: 1.1 B.< B.A B.: B.:: B.9 B.1: B.1!

!<1!;B;9< 11;1<:;;; 1!@@!91<! 1!99B1;@A !9<AA<;:A !9<AAB19A !9<A:B19A !9<:9:B@< !9<:1A1@1 !9<:B!<<: !9<9<<1:: !9<9;!;B1 !!<;@<@1A !119<1A1B !B@@91!9; 1!@A11A:! ;:91@@A< A<B<99B< AB;9<<99 :1@@11:9 :1@@11:9 !;B;@A;: !9B1@;19 !1BA:199 1991:<9B 11:1!A;! ;9:11@: :@A!;1A 9:1;!B@ 1@@1BBB 1A1BBBB !A9BBBB 1A:BBBB 11BBBBB <BBBBB ABBBBB :BBBBB 9:BBBB 9BBBBB 1:BBBB 1!BBBB

! ! ! ! 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B 1B

:A.A: !;.9< !:.@< !9.<< !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !19.;: !11.9< !B@.@9 1!@.A1 ;:.9! A<.B< AB.;: :1.@@ :1.@@ !;.B< !9.B! !1.B; 19.9! 11.:1 ;.9: :.@A 9.:! 1.@@ 1.A1 !.A9 1.A: 1.1 B.< B.A B.: B.9: B.9 B.1: B.1!

1@9A 1@:B E'uity S are

B.<

B.1@

1<:BBB

1B

B.1@

FINANCIAL RATIOS:
L()/$& (&% T,u ), K$0 F"&(&="(* R(#",/ ------------------- "& R/. C). ------------------M() ;5C I&8$/#!$&# V(*u(#",& R(#",/ Fa$e Halue !.BB )i-idend Per S are !!.BB ?%erating Profit Per S are @!.@! (=#) Net ?%erating Profit Per 15B;:.:< S are (=#) Free =e#er-e# Per S are (=#) 1!9.9A Bonu# in E'uity Ca%ital 1!.9B P),+"#( "*"#0 R(#",/ ?%erating Profit Margin(S) <.A1 Profit Before Intere#t And ;.;1 "a3 Margin(S) 0ro## Profit Margin(S) @.<! Ca# Profit Margin(S) ;.9B Ad&u#ted Ca# Margin(S) A.19 Net Profit Margin(S) A.A@ Ad&u#ted Net Profit :.91 Margin(S) =eturn ?n Ca%ital !9.<< Em%loyed(S) =eturn ?n Net 2ort (S) !1.@: Ad&u#ted =eturn on Net 1;.@B 2ort (S) =eturn on A##et# E3$luding ;.AA =e-aluation# =eturn on A##et# In$luding ;.A< =e-aluation# =eturn on >ong "erm !A.1: Fund#(S) L".u"%"#0 A&% S,*8$&=0 R(#",/ Current =atio 1.!< Mui$* =atio 1.B1 )ebt E'uity =atio B.1! :@ M() ;5F !.BB 11.BB ;1.;; A!!.@1 1@;.1: ::.99 11.:! 1B.19 11.!9 <.A1 <.AB ;.;9 ;.;! !@.<! !9.99 !9.1@ !B!.1B !B1.!@ 1!.:@ 1.1A B.@1 B.1A M() ;5@ !.BB 1;.BB 11B.<1 <:1.1A 11@.B@ :1.;1 1!.@< 11.@; 1!.1@ <.;< <.;< <.:9 <.:9 !A.;! !!.<1 !1.!1 1!:.<; 1!A.;A !<.;1 1.B@ B.<A B.1< M() ;5> !.BB 1B.:B ;B.;! :;<.BA !B:.!1 ;A.;; 1!.!1 11.19 11.1@ <.:B <.:B 1B.BA 1B.BA !9.19 !;.@@ !1.!1 !1!.11 !1!.;1 !:.A! 1.!! B.@; B.:1 M() ;65 !.BB 1!.:B <9.9! A1!.!A !@9.;9 ;9.A; 11.;< 1!.91 1!.;9 @.!1 @.!1 11.:A 11.:A !!.9@ !1.@: 1A.<1 1B1.!< 1B1.AA !1.1@ 1.1@ 1.1: B.1;

>ong "erm )ebt E'uity =atio D$ # C,8$)(1$ R(#",/ Intere#t Co-er "otal )ebt to ?(ner# Fund Finan$ial C arge# Co-erage =atio Finan$ial C arge# Co-erage =atio Po#t "a3 M(&(1$!$&# E++"="$&=0 R(#",/ In-entory "urno-er =atio )ebtor# "urno-er =atio In-e#tment# "urno-er =atio Fi3ed A##et# "urno-er =atio "otal A##et# "urno-er =atio A##et "urno-er =atio A-erage =a( Material Folding A-erage Fini# ed 0ood# Feld Number of )ay# In 2or*ing Ca%ital P),+"# & L,// A==,u&# R(#",/ Material Co#t Com%o#ition Im%orted Com%o#ition of =a( Material# Con#umed Selling )i#tribution Co#t Com%o#ition E3%en#e# a# Com%o#ition of "otal Sale# C(/- F*,H I&%"=(#,) R(#",/ )i-idend Payout =atio Net Profit )i-idend Payout =atio Ca# Profit Earning =etention =atio Ca# Earning =etention =atio Ad&u#tedCa# Flo( "ime#

B.!: 11.:A B.1! :.B1 9.9< A.<9 1.1; A.@: 11.9: !.9: A.:B 11.A; 9.@1 A!.B; 1B.:! 9:.<1 1.BA !1.:B

B.!: !:.B; B.1A ;.:! :.;! A.B1 1.9! A.11 @.:! !.!; A.!1 19.B: :.:A :1.1: 1B.1: 9@.!< 1.11 !1.1A

B.!< !<.:; B.1< ;.91 :.;: A.BB 1.<< A.BB A.B@ 1.@! A.B@ 19.19 :.!1 1;.BA 11.B@ 1@.;< 1.!< !!.A;

B.99 11.B@ B.:1 A.1: :.@! A.B1 1.<@ A.B1 A.!1 1.<B A.!1 1<.11 9.B! :@.B@ !;.:1 99.19 B.@! !1.;B

B.11 11.1; B.1; A.B@ :.<1 !<.;1 1.9< !<.;1 :.!B 1.9< :.!B 1!.1! 1.:9 9@.!! !A.B1 :9.91 B.<1 1<.A!

19.B: 1B.;@ :<.B: A!.<@ 1.:; M() ;5C

1B.B9 !A.@; A@.<: ;!.@: 1.11 M() ;5F 9@.:1 AB

!A.!@ !1.@A ;1.;! ;9.9B 1.A1 M() ;5@ ;9.1:

!B.:< 1<.@! ;!.<9 ;:.AA !.!1 M() ;5> :@.9:

1@.;! 1<.B1 ;1.@1 ;:.!: 1.@: M() ;65 ;!.AA

Earning# Per S are

;1.A;

Boo* Halue

11:.A1

!B!.A:

1!:.@<

!1!.1!

1B1.!<

A1

MARKET CAPITALISATION:
C,!'(&0 N(!$ L()/$& BHEL SuP*,& E&$)10 BGR E&$)10 AIA E&1"&$$)"&1 A*+( L(8(* BEML P)(G I&%u/#)"$/ T$='), S0/#$!/ E*$=,& E&1 CMI FPE S-)")(! EPC S(&1-8" M,8$)/ W(*=-(&%&(1() TIL TRF A=#",& C,&/# D"/( I&%"( GuG()(# A',**, K( )( E<#)u/",& GMM P+(u%*$) E"!=, E*$=,& UB E&1"&$$)"&1 K"* u)& E&1 W"&%/,) I&# C,! u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

A!

NET SALES:
C,!'(&0 N(!$ L()/$& BHEL SuP*,& E&$)10 BGR E&$)10 BEML T$='), S0/#$!/ S-)")(! EPC E*$=,& E&1 A*+( L(8(* TIL AIA E&1"&$$)"&1 TRF P)(G I&%u/#)"$/ UB E&1"&$$)"&1 A=#",& C,&/# CMI FPE S(&1-8" M,8$)/ W"&%/,) GuG()(# A',**, K( )( E<#)u/",& E"!=, E*$=,& GMM P+(u%*$) D"/( I&%"( I&# C,! u/#",& K"* u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
2R/. =)3

1A5<;B.1@ 115!!A.!: 15:B9.19 15BA@.!: !5<::.<9 159:9.@1 15119.:; 15B9:.1B <1;.:: <1!.;1 <B1.@< A9@.@: AB!.!< :!A.<B 9!@.A9 1<;.@B 111.:1 !B@.1: !B1.A@ 1@9.<1 1A!.11 1:9.9< 1B;.<; @A.@@ <<.1A ;;.;@ !9.:B !!.AA 1<.:! ;.!:

A1

NET PROFIT:
C,!'(&0 N(!$ L()/$& BHEL BEML BGR E&$)10 AIA E&1"&$$)"&1 P)(G I&%u/#)"$/ T$='), S0/#$!/ A*+( L(8(* S(&1-8" M,8$)/ E*$=,& E&1 TRF TIL S-)")(! EPC UB E&1"&$$)"&1 CMI FPE GuG()(# A',**, A=#",& C,&/# K( )( E<#)u/",& D"/( I&%"( W"&%/,) E"!=, E*$=,& I&# C,! u/#",& GMM P+(u%*$) ATV P),G$=#/ J,/#/ E&1"&$$)/ K"* u)& E&1 S70*"&$ M"**()/ S#$)*"&1 S#)"'/ C)(&$< Su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
2R/. =)3

951;:.:! 9511B.A9 !!!.<: !B1.B! 1!!.:A 111.<@ 11B.B; 1B<.1! @B.9! AA.1< 9;.1< 9A.<A 99.AA 1B.A< !;.!@ !A.@1 !9.99 !1.9A 1:.1B 11.1A 1!.<B 11.@A 11.BA 9.;9 9.9B 9.11 9.!9 B.;! 4B.!@ 415919.B@

TOTAL ASSETS:
C,!'(&0 N(!$ L()/$& BHEL SuP*,& E&$)10 BEML BGR E&$)10 S-)")(! EPC S(&1-8" M,8$)/ E*$=,& E&1 AIA E&1"&$$)"&1 L(/# P)"=$ 15;!!.BB 15@11.!B :!.;: :@@.9B 9@1.B: 11A.BB 11<.:B A@.<: 1A<.:: R C-1 1.!; B.@1 1.B: 4B.!1 !.!< B.!! B.B9 B.:< B.@; A9 G),// N$# T,#(* CWIP B*,=7 B*,=7 A//$#/ ;5!1:.;< :5:B<.1B <:;.AA !:511!.9; A5:;@.;B !5919.@A 15::B.9@ 1A5B9:.11 151::.;9 @1;.1A 1B.1< 115B;!.19 ;@<.;1 !;1.<; 1!.!1 !5@1@.AA 1;B.91 11@.B@ 1B.1A 15A11.B! 1A1.!< 191.;B B.B1 15B:!.1! 151<A.B@ <;@.A@ 1.A1 @99.B@ :B@.9! 199.19 1;.<< <9;.A< !;<.<A !B9.@1 1B.!; ;9:.9:

T$='), S0/#$!/ P)(G I&%u/#)"$/ A*+( L(8(* TRF TIL ATV P),G$=#/ A=#",& C,&/# GuG()(# A',**, UB E&1"&$$)"&1 E"!=, E*$=,& CMI FPE K"* u)& E&1 K( )( E<#)u/",& GMM P+(u%*$) I&# C,! u/#",& D"/( I&%"( S70*"&$ M"**()/ C)(&$< J,/#/ E&1"&$$)/ S#$)*"&1 S#)"'/ W"&%/,)

!A9.1B ;9.BB 159<;.@: 1<<.;: 919.9: 1.<B 9A.B: 111.@B <B.B: !1;.BB 15!<A.<B A:.B: :9.9B 1BA.<B !:!.<B 15:11.;B A.B1 11.B@ 9::.BB ;.AB :!.<B

41.!@ 4B.!B !.!A 4B.9; 4B.1A B.BB 4B.!! 4B.:! B.BB !.1A 4B.!: 1.!: 41.!; A.<B 4B.1B B.11 1.;@ 41.9B 9.;< B.BB 4B.B@

11A.;1 1;1.;1 1<@.1< ::.<B 1@1.!@ 1@;.B; <<.:1 A!.@; 9<.1< @1.;B ;1.@! !B.:1 A!.11 A1.@! 9;.;1 1:.BB 1.;B 1.B1 1B.1; 1.@1 ;1.19

111.A1 11;.9! @A.9@ !;.9; 1B@.B1 !!<.:9 ;!.B@ :1.B@ 9<.1< 1B.:B !<.!1 1A.11 1@.!@ !<.B: 1@.B< 1!.1; 1.@B 1.!A 1.;A 1.91 11.11

11.B1 9;.@B 11.A: 1.;9 1@.:9 B.BB 1.@: ;.;< 1.<B B.!A B.B@ !.@; <.9@ B.;; B.11 1.B1 B.BB B.BB B.BB !.B1 B.BB

A11.!A :11.<< 9!!.!1 11:.A@ !@:.:9 !9B.A@ !B1.B@ 1<1.9@ 1A1.9< 19B.1B 1B;.<1 1B;.1B @:.:1 @1.@: ;9.1@ ::.:@ 19.1A 11.A1 @.9< 9.BB 41:.<:

A:

NET WORKING CAPITAL SIEE

N$# W,)7"&1 C('"#(* S"P$
Y$()/ Cu))$&# A//$#/ Cu))$&# L"( "*"#"$/ N$# H,)7"&1 =('"#(* CJ65C.5A ??F@.C @J?C4.56 ?B@C.B> 66J@>4.FB AA6>.6? 6BJ466.5A @BA6.B6 6>JAA?.FF C>54.FA 455B-5C >JA@A.CA 455C-5F 66J>A@.C5 455F-5@ 6CJ?66.@@ 2R/. I& =).3

455@-5> 4?JFB4.BB

455>-65 4CJ?AC.B6

O /$)8(#",&/:It (a# ob#er-ed t at ma&or #our$e of li'uidity %roblem i# not t e mi#mat$ bet(een $urrent %ayment# and $urrent re$ei%t# from t e Com%ari#on of fund# flo( #tatement# of AI> for fi-e year#. " i# $om%any net (or*ing $a%ital i# $ontinue in$rea#e and to t e %re#ent le-el i# good. " e gro(t in (or*ing $a%ital i# a $lear indi$ation t at t e $om%any doe# not utiliDing it# # ort term re#our$e# (it effi$ien$y. In year !BB:4BA AA

t e $om%any net (or*ing $a%ital (a# 11;<.A and after 1 year# it in$rea#ing and !BB@4 1B t e $om%any net (or*ing $a%ital (a# A@B!.;9

CURRENT ASSETS
"otal a##et# are ba#i$ally $la##ified in t(o %art# a# fi3ed a##et# and $urrent a##et#. Fi3ed a##et# are in t e nature of long term or life time for t e organiDation. Current a##et# $on-ert in t e $a# in t e %eriod of one year. It mean# t at $urrent a##et# are li'uid a##et# or a##et# ( i$ $an $on-ert in to $a# (it in a year.

Cu))$&# A//$#/ S"P$

P()#"=u*()/ I&8$&#,)"$/ Su&%)0 D$ #,)/ C(/- (&% B(&7 B(*(&=$ L,(&/ (&% A%8(&=$/ T,#(* C.A. I&%"=$/ 4J5C6.B5 >JA@A.CA 655 4JAA>.6A 66J>A@.C5 665 ?J@C6.65 6CJ?66.@@ 6?5 ?>@.F6 >>?.C@ FF>.@C AJ@6A.6C BJB5A.CA FJ?CB.56 455B-5C 4J465.4F 455C-5F ?J556.6A 455F-5@ AJ?5B.>6

2R/. I& C).3 455@-5> BJ@5B.5B 65J5BB.B4 455>-65 6JA6B.?F 66J6C?.F5

C>?.6?

6J65A.@>

FJ6>@.@B 4?JFB4.BB 6B5

64JCC4.BB 4CJ?AC.B6 6F5

A;

TOTAL CURRENT ASSETS:

O /$)8(#",&/:It (a# ob#er-ed t at t e #iDe of $urrent a##et# i# in$rea#ing (it in$rea#e# in t e #ale#. " e e3$e## of $urrent a##et# i# # o(ing %o#iti-e li'uidity %o#ition of t e firm but it i# not al(ay# good be$au#e e3$e## $urrent a##et# t en re'uired5 it may ad-er#ely affe$t# A<

on %rofitability. Current a##et# in$lude #ome fund# in-e#tment# for ( i$ $om%any %ay intere#t.

CURRENT LIABILITIES
Current liabilitie# mean t e liabilitie# ( i$ a-e to %ay in $urrent year. It in$lude#

#undry $reditorG# mean# #u%%lier ( o#e %ayment i# due but not %aid yet5 t u# $reditor# $alled a# $urrent liabilitie#. Current liabilitie# al#o in$lude # ort term loan and %ro-i#ion a# ta3 %ro-i#ion. Current liabilitie# al#o in$lude# ban* o-erdraft. For #ome $urrent a##et# li*e ban* o-erdraft# and # ort term loan5 $om%any a# to %ay intere#t t u# t e management of $urrent liabilitie# a# im%ortan$e

N$# Cu))$&# L"( "*"#"$/ S"P$

P()#"=u*()/ Cu))$&# L"( "*"#"$/ P),8"/",&/ T,#(* ,+ B I&%"=$/ ,+ C.L. 455B-5C CJ65C.5A 6J56B.?F FJ646.A6 655 455C-5F @J?C4.56 6J6@5.6? >JBA4.6A 665 455F-5@ 66J@>4.FB 4J5?B.A4 6?J>4@.6F 64B

2R/. I& C).3

455@-5> 6BJ466.5A ?J5CC.B? 6@J4FF.BF 6?@

455>-65 6>JAA?.FF 4J6@@.?C 46JC?4.6? 6AB.B

A@

;B

O /$)8(#",&/:Current liabilitie# # o( $ontinue# gro(t ea$ year be$au#e $om%any $reate# t e $redit in t e mar*et by good tran#a$tion. "o get ma3imum $redit from #u%%lier ( i$ i# %rofitable to t e $om%any it redu$e# t e need of (or*ing $a%ital of firm. A# a $urrent liability in$rea#e in t e year !BB@41B by !15A1!.11. It in$rea#e# t e (or*ing $a%ital #iDe in t e #ame year. And $om%any en&oyed o-er $reditor# ( i$ may in$lude indire$t $o#t of $redit term#.

CHANGES IN WORKING CAPITAL

" ere are #o many rea#on# to $ ange# in (or*ing $a%ital a# follo( 6. C-(&1$/ "& /(*$/ (&% ,'$)(#"&1 $<'(&/$/ " e $ ange# in #ale# and o%erating e3%en#e# may be due to t ree rea#on# " ere may be long run trend of $ ange e.g. " e %ri$e of ro( material #ay oil may $on#tantly rai#e ne$e##ity t e olding of large in-entory. Cy$li$al $ ange# in e$onomy dealing to u%# and do(n# in bu#ine## a$ti-ity (ill influen$e t e le-el of (or*ing $a%ital bot %ermanent and tem%orary. C ange# in #ea#onality in #ale# a$ti-itie#

4. P,*"=0 =-(&1$/ " e #e$ond ma&or $a#e of $ ange# in t e le-el of (or*ing $a%ital i# be$au#e of %oli$y $ ange# initiated by management. " e term $urrent a##et# %oli$y may be defined a# t e relation# i% bet(een $urrent a##et# and #ale# -olume.

1. Technology changes

;1

" e t ird ma&or %oint if $ ange# in (or*ing our bu#ine## more (or*ing $a%ital i# re'uired A $ ange in o%erating e3%en#e# ri#e or full (ill a-e #imilar effe$t# on t e le-el# of (or*ing follo(ing (or*ing $a%ital #tatement i# %re%ared $a%ital are $ ange# in te$ nology be$au#e $ ange# in te$ nology to in#tall t at te$ nology in on t e ba#e of balan$e # eet of la#t t(o year

C-(&1$/ "& W,)7"&1 C('"#(*

2R/. I& C).3

S#(#$!$&# ,+ C-(&1$/ "& W,)7"&1 C('"#(*

P()#"=u*() A3Cu))$&# A//$#/ 455@-5> 455>-65 C-(&1$/ "& W.C

I&=)$(/$

D$=)$(/$

I&8$&#,)"$/ Su&%)0 D$ #,)/ C(/- (&% B(&7 B(*(&=$

BJ@5B.5B 65J5BB.B4 C>?.6?

6JA6B.?F 66J6C?.F5 6J65A.@> 64JCC4.BB 4CJ?AC.B6 6J65@.6@ A66.FC BJAC?.F5

AJ?@>.C@

L,(&/ (&% A%8(&=$/ T,#(* A B3Cu))$&# L"( "*"#"$/ Cu))$&# L"( "*"#"$/ P),8"/",&/

FJ6>@.@B 4?JFB4.BB

6BJ466.5A ?J5CC.B?

6>JAA?.FF 4J6@@.?C 46JC?4.6? AJF6A.?@ BJ>A@.B4

AJ4?4.F? @F@.6F

T,#(* ,+ B 6@J4FF.BF W.C 2A-B3 N$# "&=)$(/$ "& W.C T,#(* BJAFA.>@

BJ>A@.B4 66J46C.?F 66J46C.?F

;!

WORKING CAPITAL TURNOVER RATIO

It #ignifie# t at for an amount of #ale#5 a relati-e amount of (or*ing $a%ital i# needed. If any in$rea#e in #ale# $ontem%lated (or*ing $a%ital # ould be ade'uate and t u# t i# ratio el%# management to maintain t e ade'uate le-el of (or*ing $a%ital. " e ratio mea#ure# t e effi$ien$y (it ( i$ t e (or*ing $a%ital i# being u#ed by a firm. It may t u# $om%uter net (or*ing $a%ital turno-er by di-iding #ale# by (or*ing $a%ital. W,)7"&1 C('"#(* Tu)&,8$) R(#",K SSSSS(*$/SSS N$# W,)7"&1 C('"#(*

W,)7"&1 C('"#(* Tu)&,8$)

P()#"=u*() S(*$/ N$# H,)7"&1 =('"#(* W.C Tu)&,8$) R(#", 455B-5C 6AFFC.>B ??F@.C A.?F?C>54 455C-5F 6FCAB.4> ?B@C.B> A.>6>F>BC 455F-5@ 4A>AC.66 AA6>.6? B.CAB54FA

2R/. I& =).3

455@-5> ??@BC.BA @BA6.B6 ?.>C?FCB6

455>-65 ?C@F5.6> C>54.FA B.?A@AF4B

;1

O /$)8(#",&/:Fig (or*ing $a%ital ratio indi$ate# t e $a%ability of t e organiDation to a$ ie-e ma3imum #ale# (it t e minimum in-e#tment in (or*ing $a%ital. Com%any (or*ing $a%ital ratio # o(# mo#tly more t an 15 e3$e%t for t e year !BBA4B; In t e year !BB@4 1B t e ratio (a# around :.195 it indi$ate# t at t e $a%ability of t e $om%any to a$ ie-e ma3imum #ale# (it t e minimum in-e#tment in (or*ing $a%ital.

CURRENT ASSETS TURNOVER RATIO

Current a##et# turno-er ratio i# $al$ulate to *no( t e firm# effi$ien$y of utiliDing t e $urrent a##et# .$urrent a##et# in$lude# t e a##et# li*e in-entorie#5 #undry debtor#5 bill# re$ei-able5 $a# in and or ban*5 mar*etable #e$uritie#5 %re%aid e3%en#e# and # ort term loan# and ad-an$e#. " i# ratio in$lude# t e effi$ien$y (it ( i$ $urrent a##et# turn into #ale#. A ig er ratio im%lie# a more effi$ient u#e of fund# t u# ig turno-er ratio indi$ate to redu$ed t e lo$* u% of fund# in $urrent a##et#. An analy#i# of t i# ratio o-er a %eriod of time refle$t# (or*ing $a%ital management of a firm. Cu))$&# A//$#/ Tu)&,8$) R(#",K SSSSS(*$/SSSSS Cu))$&# A//$#/

C(*=u*(#",& ,+ Cu))$&# A//$#/ Tu)&,8$) R(#",

2R/. I& C).3
P()#"=u*() S(*$/ Cu))$&# A//$#/ Cu))$&# A//$#/ Tu)&,8$) R(#", 455B-5C 455C-5F 455F-5@ 455@-5> 455>-65

6AFFC.>B >JA@A.CA
6.BBF>@FAA6

6FCAB.4> 66J>A@.C5
6.AFCFCC?6C

4A>AC.66 6CJ?66.@@
6.B4>?46BF A

??@BC.BA 4?JFB4.BB
6.A4B?@BA@ B

?C@F5.6> 4CJ?AC.B6
6.?>>A??BA>

;9

Cu))$&# A//$#/ Tu)&,8$) R(#",

O /$)8(#",&/
It (a# ob#er-ed t at $urrent a##et# turno-er ratio doe# not indi$ate any trend o-er t e %eriod of time. "urno-er ratio (a# 1.:: in t e year !BBB4BA and de$rea#e to 1.9;A; in t e year !BBA4B;. Com%any in$rea#ed it# #ale# (it in$rea#ed in-e#tment in $urrent a##et#5 t u# $urrent a##et# turno-er ratio not in$rea#ed.

;:

CURRENT RATIO
" e $urrent i# $al$ulated by di-iding $urrent a##et# by $urrent liabilitie#: Cu))$&# R(#", K SSSCu))$&# (//$#/SS Cu))$&# *"( "*"#"$/

Current =atio L Current A##et# . Current >iabilitie# ?r Current A##et# : Current >iabilitie#

Current a##et# in$lude $a# and t o#e a##et# ( i$ $an be $on-erted in to $a# (it in a year5 #u$ mar*etable #e$uritie#5 debtor# and in-entorie#. All obligation# (it in a year are in$lude in $urrent liabilitie#. Current liabilitie# in$lude $reditor#5 bill# %ayable a$$rued e3%en#e#5 # ort term ban* loan in$ome ta3 liabilitie# and long term debt maturing in t e $urrent year. Current ratio indi$ate# t e a-ailability of $urrent a##et# in ru%ee# for e-ery ru%ee of $urrent liability.

Cu))$&# R(#",
2 R/. I& C).3

P()#"=u*()

455B-5C >JA@A.CA CJ65C.5A 6.B

455C-5F 66J>A@.C5 @J?C4.56 6.A4

455F-5@ 6CJ?66.@@ 66J@>4.FB 6.?F

455@-5> 4?JFB4.BB 6BJ466.5A 6.BC

455>-65 4CJ?AC.B6 6>JAA?.FF 6.?BB

Cu))$&# A//$#/
Cu))$&# L"( "*"#"$/ Cu))$&# R(#",

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O /$)8(#",&/:
" e $urrent ratio indi$ate# t e a-ailability of fund# to %ayment of $urrent liabilitie# in t e form of $urrent a##et#. A ig er ratio indi$ate# t at t ere (ere #uffi$ient a##et# a-ailable (it t e organiDation ( i$ $an be $on-erted in $a# 5 (it out any redu$tion in t e -alue. It i# -ery ig 1.:A in !BB<4B@5 but regularly de$rea#e#. In !BB@41B it $ome# at 1.1::.

;;

MUICK RATIO
Mui$* ratio i# al#o *no(n a# a$id te#t ratio or li'uid ratio# it i# more rigorou# te#t of li'uidity t an t e $urrent ratio. It e#tabli# e# relation# i% bet(een li'uid a##et# 6 $urrent liabilitie#. An a##et i# #aid to be li'uid if it $an be $on-erted into $a# (it in a # orter %eriod (it out lo## of -alue.

Mu"=7 )(#",

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455@-5> 65JFA@.CB 6BJ466.5A 5.F

455>-65 64J4C@.B> 6>JAA?.FF 5.C?

Mu"=7 A//$#/ Cu))$&# L"( "*"#"$/ Mu"=7 R(#",

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O /$)8(#",&/:Mui$* ratio indi$ate# t at t e $om%any a# #uffi$ient li'uid balan$e for t e %ayment of $urrent liabilitie#. " e li'uid ratio of 1:1 i# #u%%o#e to be #tandard or ideal but ere ratio i# more t an 1:1 o-er t e %eriod of time5 it indi$ate# t at t e firm maintain# t e o-er li'uid a##et# t an a$tual re'uirement of #u$ a##et#.
R

DEBT EMUITY RATIO

D$+"&"#",&: " e )ebt to E'uity =atio mea#ure# o( mu$ money a $om%any # ould #afely be able to borro( o-er long %eriod# of time. It doe# t i# by $om%aring t e $om%anyC# total debt (in$luding # ort term and long term obligation#) and di-iding it by t e amount of o(nerC# e'uity .For no(N you only need to *no( t at t e number $an be found at t e bottom of t e balan$e # eet. A$tually $al$ulate t e debt to e'uity ratio in #egment t(o ( en (e loo* at real balan$e # eet#.)

D$ # E.u"#0 R(#",

)EB" EM,I"7

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D$ # E.u"#0 R(#",

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O /$)8(#",&/:" e debt4e'uity ratio i# normally defined a# t e long term debt di-ided by # are older#C e'uity5 ( i$ i# t e #um of t e e'uity $a%ital5 any %referen$e $a%ital i##ued5 and free re#er-e# and #ur%lu# (it t e $om%any. A debt4e'uity ratio i# al#o im%ortant for bond in-e#tor#5 #in$e a ig ly le-eraged $om%any $ould fa$e %roblem# ma*ing intere#t %ayment#.

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CHAPTER : C
CONCLUSION AND MAJOR FINDS

C,&=*u/",&
2or*ing $a%ital management i# im%ortant a#%e$t of finan$ial management. " e #tudy of (or*ing $a%ital management of >6" a# re-ealed t at t e Net 2or*ing Ca%ital (a# im%ro-ing regularly from 11;<.A in !BB:4BA and A@B!.;9 in !BB@41B ( i$ i# a# %er #tandard indu#trial %ra$ti$e. " e $urrent A##et# of t e $om%any # o(ed an in$rea#ing =#. 1:!9.19 Cr. in year !BB:4BA from !BB@41B5 but in !BB@41B it #table at =#.A@B!.;9 $r. " e #tudy a# been $ondu$ted on (or*ing $a%ital ratio analy#i#5 el%ed t e $om%any $urrent ratio5 and C ange t e (or*ing $a%ital $om%onent# ( i$ to manage it# (or*ing $a%ital effi$ien$y and affe$ti-ely. 1. 2or*ing $a%ital of t e $om%any (a# in$rea#ing from year !B;.@@ $r. From !BB:4BA to !BBA4B;5 =#.91!!.1< $r. in$rea#e# form !BB;4B< to !BB<4B@. =#. A@B!.;9 $r. in !BB@41B it $ome# do(n to =#. 1A1<.;; $r. All

$al$ulation i# # o(ing %o#iti-e (or*ing $a%ital %er year. It # o(# good li'uidity %o#ition. !. Po#iti-e (or*ing $a%ital indi$ate# t at $om%any %ayment# of # ort term# liabilitie#. 1. 2or*ing $a%ital in$rea#ed be$au#e of in$rement in t e $urrent a##et#. Com%anyG# $urrent a##et# (ere al(ay# more t an re'uirement it affe$t on %rofitability of t e $om%any. a# t e ability of

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4. In t e year !BB<4B@ and !BB@41B (or*ing $a%ital de$rea#ed be$au#e in$rea#ed of e3%en#e# a# manufa$turing e3%en#e# and in$rea#e t e %ri$e of ra( material. 5. " e #iDe of t e $a# in t e $urrent a##et# of t e $om%any indi$ate# t e mi## $a# management of t e $om%any. " e $a# balan$e in t e year !BB@41B (a# e3tremely in$rea#ed. Com%any failed to %ro%er in-e#tment of a-ailable $a# .

Major Findings

S#(#$!$&# S-,H"&1 D"++$)$&=$ +),! P)$8",u/ 0$():-

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455F-5@

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In-e#tment# In-entorie# Sundry )ebtor# Ca# 6 Ban* Balan$e Current >iabilitie# =e#er-e

#$%#%&'( ($(#*&(. +$-#+&#, )%-&.# ,$#*,&*+ +$'-)&)(

)$#*+&++ )$**#&#+ '$'*+&,+ %%)&,-$),(&*# '$,-)&-'

,$%((&(, +$)*'&%# .$),'&*# ..%&-, ##$-%(&.' %$+.*&.#

-$(,)&.( '$-*'&*' #*$*''&'( ,%)&#) #'$(##&*+ #($)#.&%,

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<1

CHAPTER : F
RECOMMENDATION AND LIMITATION

L"!"#(#",&/:/

E-en t oug e-ery effort (ill be ta*en to minimiDe t e -ariation and %re#ent a fa$tual %i$ture (it t e el% of #tati#ti$al met od#5 but #till t ere are #ome

limitation#5 ( i$ are a# follo(#: " e %re%aration and inter%retation of data may not be 1BBS free from error# and may be affe$ted by t e =e#%ondent# ba#ed mind#et to #ome e3tent. Sam%ling #iDe of t e targeted em%loyee# of >6" i# #mall5 be$au#e non4 rea$ able due to t eir bu#y #$ edule. " e #tudy (ill be ba#ed on t e balan$e # eet of t e $om%any and de%end# dire$tly on balan$e # eet and annual re%ort# of t e $om%any.

R$=,!!$&%(#",&:=e$ommendation $an be u#e by t e firm for t e betterment in$rea#ed of t e firm after #tudy and analy#i# of %ro&e$t re%ort on #tudy and analy#i# of (or*ing $a%ital. I (ould li*e to re$ommend. 1. Com%any # ould in$rea#e t e in-entory olding %eriod. It i# t e ma&or %art of (or*ing $a%ital of $om%any. !. Com%any a# to ta*e $ontrol on $a# balan$e be$au#e $a# i# non earning a##et# and in$rea#e $o#t of fund#. 1. Com%any # ould rai#e it fund t roug # ort term #our$e# for # ort term re'uirement of fund#.

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1.

tt%:..(((.an#(er#.$om.to%i$.$a# 4management

2. (((.lar#entoubro.$om. 3. www.google.co.in 4. www.emarketer.com 5. www.marketreaserchworld.net 6. (((.money$ontrol.$om

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