SUMMER TRAINING REPORT

ON
WORKING CAPITAL MANAGEMENT

IN



MAHARSHI DAYANAND UNIVERSITY, ROHTAK
SESSION 2012-2013


Under the Guidance of: SUBMITTED BY:
MISS __________ Abhishek Dixit
(Lecturer BBA Department) BBA 5
th
SEM.
ROLL NO: - .









DAV CENTENARY COLLEGE
NH-3, NIT FARIDABAD-121001
(AFFILIATED TO M.D.UNIVERSITY, ROHTAK)


PREFACE


A summer Training is an integral part of our academic curriculum pursuing the training a student
get an opportunity to see the practical aspect of theory, Training makes the concept more clear.
The training report is the outcome of the summer Training I have undergone YMI Pvt. Ltd.
(1916) Mathura Road Faridabad (HARYANA) in the month 1
st
June 2013 to 31
th
July 2013 for
the partial fulfillment of B.B.A(CAM).
The project fundamentally was screening of prospective Preferences of the target retailers or
dealer and consumer Behavior with an eye on media planning. It explored my Creativity and
learning and leads me to the mental multiplication in the field of marketing under this project are
directed to me for my research work was NOIDA due to the short span of time. I analyze a
proper number of consumer and Retailers to get the attitude and behavior regarding the bikes
which are prevailing in the present market and collect all the required data by the help of
Questionnaire and conducting interviews and dealing.
I hereby present my detailed training report




ACKNOWLEDGEMENT

After completing the project at Yamaha Motors Ltd., it is a great pleasure for me to thank all
those who have helped me during the course of completion of my project.
I express my sincere thanks to Ms. Swati Mishra (Finance Manager) of Yamaha Motors India
Pvt. Ltd. for giving me a unique opportunity to do project in their esteemed organization.
Last but not the least I would like to place a word of appreciation on record for a all those who
directly or indirectly supported me.











Index
1. Company profile
2. Review of Literature
3. Research Methodology
(a) Objective of study
(b) Scope of study
(c) Method of data collection
(d) Limitation of the study
4. Data Analysis and Interpretation
5. Conclusion
6. Recommendations and Suggestion
7. Bibliography
8. Annexure





COMPANYS
PROFILE






ABOUT LOGOMARK






The YAMAHA brand has its roots in the name of our founder, Torakusu Yamaha. Familiar with
western science and technology from his youth, Yamaha initially found employment repairing
medical equipment. This led to a request to repair a organ, a project that resulted in the birth of
the Yamaha brand. Confident of the potential of his business, Yamaha struggled against great
odds to establish Yamaha Organ Works. Entrepreneurial spirit, far-sightedness, and
determination to overcome difficulties fueled his passion to succeed. This same spirit formed the
foundation of the Yamaha brand, and is a vital legacy of Yamaha Corporation today.




YAHAMA: Profile, Structure& Environment



Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50:50 joint
venture with the Escorts Group in 1996. However, in August 2001, Yamaha acquired its
remaining stake as well, bringing the Indian operations under its complete control as a 100%
subsidiary of Yamaha Motor Co., Ltd, Japan.
India Yamaha Motor operates from its state-of-the-art-manufacturing units at Faridabad in
Haryana and Surajpur in Uttar Pradesh and produces motorcycles both for domestic and export
markets. With a strong workforce of 3000 employees, India Yamaha Motor is highly customer-
driven and has a countrywide network of over 400 dealers.





About the Director of YMI
YUKIMINE TSUJI appointed Yamaha Motor India's director sales and marketing
news.
New Delhi: Yamaha Motor India, the 100 per cent subsidiary of
Yamaha Motor Co Ltd, Japan, has announced the appointment of Y. Tsuji as the director, sales
and marketing.
Tsuji brings with him over 20 years of experience with Yamaha globally and will play a key role
in implementing Yamahas evolving growth strategy for India.

He will co-ordinate the sales, marketing and engineering functions to develop a strong product
line for the Indian market.





What is Kando?

Kando is a Japanese word for the simultaneous feeling of deep satisfaction and intense
excitement that people experience when they encounter something of exceptional value.
At Yamaha Motor we believe that Kando can be generalized by the products and services that
surpass customers expectations.
Yet for all the emotional evaluation Kando provides, the feeling can be short lived, and people
may be touched only for a moment. Therefore, our challenge is to make sure that all our products
and services genuinely thrill, impress and touch customers heart at the first time and every time.
We strive to achieve our corporate mission by adhering to these principles.
expectations. We can as we will earn a fair profits by putting forth a superior efforts to satisfy
our customers.












India Yamaha Motor Pvt. Ltd. (IYM)

Head Office:
A-3 Surajpur Industrial Area, Noida-Dadri Road, Surajpur - 201306, Distt. Gautam Budh Nagar,
U.P., India
Foundation:
Oct. 17, 2007
Start of operation:
April 1, 2008
Headed by:
Mr. Tsutomu Mabuchi, Managing Director and Chief Executive Officer
Capital:
1.5 billion rupee (as of Mar. 5, 2008), with plans to eventually increase capital to 5.6 billion
rupee (approx. 16 billion yen)
Capital ratio:
70% by Yamaha Motor Co., Ltd.
30% by Mitsui & Co., Ltd.
Number of employees:
2000 (approx.)
Areas of business:
Development, manufacture and sales of motorcycles, spare parts and accessories. Export of
locally assembled motorcycles and parts
Scale of operations:
First year (nine months beginning Apr. 2008) projected sales of 10 billion rupee (approx. 30
billion yen)


Introduction
The Two-Wheeler Market Globally

Globally, the Two-wheeler Industry is concentrated in the developing world, especially China
and India, Which together account for over half the total worldwide sales of Two-wheelers.
The Japanese Manufacturers, Honda, Yamaha, Suzuki and Kawasaki, dominate the Two-
Wheeler Industry globally currently, all major two wheeler market, except India are dominated
either by Japanese firms or their joint ventures. However, in the leading markets, such as China
and India and South-Asia, a host of local players exists.
Globally, four-Stroke engines are fast replacing the Two-Stroke variants with stricter
emission norms being imposed and vehicles powered by two-stroke being banned, four-stroke
powered two-wheeler have found increasing favour.
Powered Two-Wheeler Popular in Asian Countries such as China and India where
Motorcycle dominate the PTW market. Outside India, presence of Scooters is limited. Scooters
are far more popular in Europe than in the US. Europe has very High fuel prices, congested city
streets with limited parking space, and a long history of accepting scooters as a respectable mode
of transportation, all leading to a considerable interest in scooters.

Two-wheeler Industries: The Indian scenario
The Indian two-wheeler industry can be divided into three broad categories: scooters,
motorcycles and mopeds. Each of these categories can be further segmented on the basis of
several variables, like price, engine power, type of ignition and engine capacity.
The two-wheeler industry has come a long way since its inception in the early 1950s when
scooters were first produced in the country. Today, India is the second largest producer and
consumer of two-wheeler in the world; the Indian two-wheeler industry has grown rapidly over
the past 15 years. The demand for two-wheelers increased at a FY2013.

The Indian two-wheeler industry has undergone a significant change over the past 10 years with
the practical changing from mopeds to scooters and more recently, from scooters to motorcycles.
Scooters, which were considered the family vehicle for middle class Indians, are increasingly
losing their position as a cheap mode of personal transportation. With the reduction in the price
differential between scooters and motorcycles, there has been a perceptible shift towards
motorcycle motorcycles because of their better styling, higher fuel efficiency, and higher load
carrying capacity. Further, the decline in excise duty on scooters and motorcycles has reduced
their price differential in comparison with mopeds. The change in customer preferences, better
fuel efficiency and increased affordability of motorcycles has titled the demand in favour of
motorcycles. The share of scooters sales in two-wheeler sales has been reducing steadily since
FY2012 when scooters accounted for more than half of all two-wheelers sold in the country.
Till FY2010, scooters formed the largest segment accounting for 41% of total industry sales,
while motorcycles and mopeds accounted for 37% and 21% of all two-wheelers sales
respectively. However, during FY2011, for the first time, the sales of motorcycle outperformed
scooter sales.
The shares of scooters, motorcycles and mopeds inFY2011 were 33%, 48%, and 19%,
respectively. Although, the shares of scooters and mopeds declined in FY2005 and FY2013,
the shares of motorcycles increased to 60% and 69% respectively in these years.











Mission of Yamaha Motor India Private Limited

Our corporate mission is same as the mission of Yamaha Motor Company, Japan.
We create kando Touching peoples hearts.

Kando is a Japanese word for expressing Feelings Of Excitement And Deep Satisfaction.

The Yamaha Motor Company that creates Kando.Yamaha Motor India Private Limited

Registered Office
Allianz house, 2
nd
Floor,
273, Capt. Gaur Marg.
Sriniwas Puri
New Delhi

Faridabad Plant
19/6, Mathura
Faridabad

Surajpur Plant
A-3, Surajpur Industri
Noida-Dadri Road
Surajpur
YAMAHA MOTOR COMPANY JAPAN

1. Landmarks

1. General & commercial information

1. Hierarchical structure

1. Welfare activities


Ever since its founding as a motorcycle manufacturer on July 1, 1955, Yamaha Motor Company
has worked to build its products which stands among the very best in the world through its
constant pursuit of quality; and at the same time, through these products it has sought to
contribute to the quality of life of people all over the world. Following are the success of our
motorcycle, Yamaha being manufacturing Powerboats and outboards Motors in 1960, since then,
Engine and FRP Technology were used as a base to actively diversify and Globalize the area of
business. Today, our field of influence extends from the land to the sea and even into skies as our
business divisions have grown motorcycle operations to include Automotive Operations, Power
Product Operations, and Intelligent machinery Operations and PAS Operations.




Pursuing the Ultimate in Personal Vehicle

Ever since the founding Yamaha Motor Company has been a company that continues to develop
its expertise in the field of small Engines and Fiber Glass Reinforced Plastic (FRP)
Manufacturing as well as Electronic Control Technologies Yamaha Pursues the ideals of
building products of High Quality and High Performance.

Environment friendly and People friendly

In product building and promotional efforts Yamaha takes as one of the fundamental ideals the
concept that products, which are people friendly, should be Environment Friendly and products
that are environment friendly should also be people friendly. This concept is born of our
awareness that It is the Earth and Possible. Yamaha Motor Company Supplies the Power
that moves people and helps them to live to their fullest as human beings. Yamaha vehicles have
the practical advantage of using the minimum of energy for human transport that means less
negative impact on the Environment.

Technological Advantages

At the hearts of the efforts of environmental preservation are the environmental management
system designed and implemented under the ISO 14001 international standard. Under the slogan
Absolute Quality Control. Yamaha was the early adopter of comprehensive Quality Control
System and quick to put in a place or Total Productive Management.





Producing means to an active Life

At Yamaha business and leisure are treated as insuperable parts of life that is a reason of striving
to help bring people around the world a more active life.



Landmarks of Yamaha Motor India Private Limited

1960: Secured License under Technical Collaboration with CEKOP, Poland.
1961: Obtained 23 acres of land for separate factory.
1962 : Assembly And Partial Manufacturing stored in plant I. Introduction to motorcycles with
Technical Collaboration with M\S CEKOP, Poland.
1964 : Machinery was installed in new building.
1965 : Manufacturing activities shifted from plant I to the present Building Of Yamaha Motor
Limited, Faridabad.
1970 : Introduction to scooters.
1972 : GTS a small Motorcycle was introduced.
1979 : Entered into a technical Collaboration with Yamaha Motor Company of Japan for
manufacturing of 350 cc Motorcycles.
1982 : Research and Development Section shifted to 19/2 Mathura Road, Faridabad.
1983 : Letter of intent obtained for manufacturing of 100cc Motorcycles Launched 350 cc
Motorcycles in market all over the India. Setting up of CNC Cell in an organization.
1997 : Launched of RXZ and 175 cc Escorts ACE.
1998 : YBX 4-Stroke Bi-wheeler was launched.
2000 : The share of Yamaha Motor has increased to Yamaha 74% and Escorts 26%.
YD125, 4 stroke Bi-wheeler was launched.




2001 : Yamaha Motor Escorts Limited become a subsidiary of Yamaha Motor Company and its
name changed from Yamaha Motor Escorts Limited to Yamaha Motor India Private Limited.
2002 : Launched Enticer 125cc and Libero 106 cc (4-Stroke) Motorcycles.
2004 : Launched Of FAZER 125 cc (4-Stroke).
2006 : Launched 125cc Bikes with 5 Gears Gladiator.
2007: Launched 125cc Bikes with CRUX.
2008: Launched 100cc Bikes with CRUX R.
2009: Launched 125cc Bikes with YBX.
2010: Launched 125cc Bikes with YBR.
2011: Launched 125cc Bikes with FZ.
2012: Launched 125cc Bikes with FZ S.
2013: Launched 125cc scooter.


General Information: Yamaha Motor India Private Limited

Total Area : 116640 Sq. Mtrs.

Total Covered Area : 41350 Sq. Mtrs.

Date Of Starting : Jan 1, 1963

Production achieved in 2008-09 : Motorcycle : 75,582

Production achieved in 2009-10 : Motorcycle : 8,782
Yamaha : 1,10,684

Production achieved in 2010-11 YBR : 91,013
FZ : 1,550
FZS : 1,070
R15 : 1,58,806

Production achieved in 2011-12 : Rajdoot : 67,260
RX : 358
RX 135 : 20,890

Production achieved in 2012-13 : YBR : 66,660
FZ : 1,115
FZS : 26,290
R15 : 1000

Commercial Information (As per 2013)

Total Investment : Rs 1400.25 Crores

Regular Supplier : 1000

Sales Outlet : Rs. 1250.15 Crores

Projected Purchase : Rs. 1200.12 Crores

Nos. Of Vehicle Sold (2004-05) :

Faridabad 105919

Surajpur 188519

Projected Growth 40%

YMIL Turnover Forecast : $ 80 MIllion


Indegenious Contents

Faridabad : 100%

Surajpur : 80%

FACTORY HOURS

The factory operates in three shifts as per the following details:

IST : 8:00 AM To 5:00 PM

IINd : 5:00 PM To 2:00 AM

IIIRD : 2:00 AM To 8:00 PM













WELFARE ACTIVITIES

MEDICAL FACILITIES
For providing domiciliary treatment to the employees and their dependents, a dispensary and a
full time doctor available in the plant.

GROUP ACCIDENT INSURANCE SCHEME
Employees not covered under ESI are automatically under the Companys Group Accident
Insurance Scheme.

PROVISION OF LOANS
Members for purpose such as Marriages, Purchase Of Land, Construction Of House, Long Term
Medical Treatment, and Natural Calamities can obtain loans.

BENEVOLENT FUND
For providing financial help as a responsible co-operative Citizen, Rs. 2,00,000 are given to the
family of a deceased person.
SERVICES AWARDS
In appreciation on the long association, the company gives services awards as a mark of Honors
to the employees.

SCHOLARSHIPS
It is offered to the children of all employees.

TRAINING ACTIVITIES
There are three training center all over the India. The company is concerned with the
personnel growth and development of employees and sponsors them for various training and
development programs.










REVIEW
OF
LITERATURE


REVIEW OF LITERATURE OF WORKING CAPITAL MANAGEMENT

INTRODUCTION:

Working capital typically means the firms holdings of current, or short-term, assets such as
cash, receivables, inventory, and marketable securities. Much academic literature is directed
toward gross working capital, i.e., total current or circulating assets. These items are referred to
as circulating assets because of their cyclical nature. In a retail establishment, cash is initially
employed to purchase inventory which is in turn sold on credit and result in accounts receivable

Corporate executives devote a considerable amount of attention to the management of working
capital. Net working capital (current assets minus current liabilities) provides an accurate
assessment of the liquidity position of the firm. With the liquidity- profitability dilemma solidly
authenticated in the financial scheme of management, concerted efforts are made to ensure the
ability of the firm to meet those obligations which mature within a twelve month period.
Management must always ensure the solvency and viability of the firm.

An examination of the components of working capital is helpful at this point because of the
preoccupation of management with the proper combination of assets and acquired funds. First,
short-term, or current, liabilities constitute the portion of funds which have been planned for and
raised.








CONCEPT OF WORKING CAPITAL

There are to possible interpretations of working capital concept:

(a) Balance Sheet Concept
(b) Operating Cycle Concept

It goes without saying that the pattern of management will be very largely influenced by
the approach taken in defining it. Therefore the two concepts are discussed separately in a
nutshell.

(A) BALANCE SHEET CONCEPT
There are two interpretations of working capital under
the balance sheet concept. It is represented by the excess of current assets over current
liabilities and is the amount normally available to finance current operations. But, some-
times working capital is also used as a synonym for gross or total current assets. In that case,
the excess of current assets over current liabilities is called the net current assets. Institute of
Chartered Accountants of India, while suggesting a vertical form of balance sheet, also
endorsed the former view of working capital when id described net current assets as the
difference between current assets liabilities.
The conventional definition of working capital in terms of the difference between the current
assets and the current liabilities somewhat confusing. Working capital is really what a part of
long- term finance is locked in and used for supporting current activities. Consequently, the
larger the amount of working capital so derived, greater the proportion of long-term capital
sources siphoned off to short- term activities. It is difficult to say whether this is right or
wrong. Apparently, when firms are warned about tight working capital situation, the logic of
the above definition would perhaps indicate diversion of long- term finances for short-term
purposes. For, if short-term bank loan were procured to bring in cash, under the conventional
method, working capital would evidently remainunchanged.

Liquidation of debtors and inventory into cash would also keep the level of working capital
according to this definition may produce a false sense of security at a time when cash resources
may be negligible.

A. OPERATING CYCLE CONCEPT
A companys operating cycle typically consists of
three primary activities: purchasing resources, producing the product, and distributing
(selling) the product. These activities create fund flows that are both unsynchronized and
uncertain. They are unsynchronized because cash disbursements (for example, payments for
resource purchases) usually take place before cash receipts (for example, collection of
receivables. They are uncertain because future sales and costs, which generate the respective
receipts and disbursements, cant be forecasted with complete accuracy. If the firm is to
maintain liquidity and function properly, it has to invest funds in various short-term assets
(working capital) during this cycle. It has to maintain a cash balance to pay the bills as they
come due. In addition, the company must invest in inventories to fill customer order
promptly. And, finally, the company invests in accounts receivable to extend credit to its
customers.

Operating Cycle = Inventory conversion period + Receivables conversion period

The inventory conversion period is the length of time required to produce and sell the
product. It is defined as follows:

Average inventory
Inventory conversion period =
Cost of sales / 365
The receivables conversion period, or average collection period, represents the length of time
required to collect the sales receipts. It is calculated as follows:




Accounts receivables
Receivables conversion period = Annual credit sales / 365

3. OPTIMAL LEVEL OF WORKING CAPITAL INVESTMENT
The optimal level of
working capital investment is the level expected to maximize shareholder wealth. It is a function
of several factors, including the variability of sales and cash flows and the degree of operating
and financial leverage employed by the firm. Therefore no single whirling capital investment
policy is necessarily optimal for all firms.

I. PROPORTIONS OF SHORT- TERM AND LONG-TERM FINANCING

Not only does a firm have to be concerned about the level of current assets; it also has to
determine the proportions of short- and long- term debt to use in financing these assets. This
decision also involves tradeoffs between profitability and risk.

Source of debt financing are classified according to their maturities. Specifically, they can be
categorized as being either short- term or long- term, with short-term sources having
maturities of 1 year or less and long-term sources having maturities of greater than 1 year.

I. COST OF SHORT TERM VERSUS LONG TERM DEBT

Historically long-term interest rates normally exceed short-term rates because of the reduced
flexibility of long-term borrowing relative to short-term borrowing. Infact, the effective cost of
long-term debt may be higher than the cost of short- term debt, even when short-term interest
rates are equal to or greater than long-term rates. With long-term debt, a firm incurs the interest
expenses even during times when it has no immediate need for the funds, such as during seasonal
or cyclical downturns. Therefore, the cost of long-term debt generally is higher than the cost of
short-term debt.

(III) RISK OF LONG-TERM VERSUS SHORT-TERM DEBT
Borrowing companies have different
attitudes toward the relative risk of long-term versus short-term debt than lenders. Whereas
lenders normally feel that risk increases with maturity, borrowers feel that there is more risk
associated with shot-term debt. The reasons for this are two fold.

First, there is always the chance that a firm will not be able to refund its short-term debt. When a
firms debt matures, it either pays off the debt as part of a dept reduction programmed or
arranges new financing. At the time of maturity however the firm could be faced with financial
problems resulting from such events as strikes, natural disasters, or recessions that cause sales
and cash inflows to decline. Under these circumstances the firm may find it difficult or even
impossible to obtain the needed funds.

4. OVERALL WORKING CAPITAL STRATEGIES
Until now this chapter has
analyzed the working capital investment and financing decision independent of one another in
order to examine the profitability risk tradeoff associated with each, assuming that all other
factors are held constant. Effective working capital policy however also requires the
consideration of the joint impact of these decisions on the firms profitability and risk.














RERSEACH
METHODOLOGY























OBJECTIVE OF THE STUDY




The basic purpose of the study is to get a feel of practically of Accounts Deptt In


Yamaha Motors India Pvt.Ltd. The other objectives are as:



(1)To understand the basic organization hierarchy.



(2)To understand the working culture of accounts department.



(3)To analyze accounting system and terminology used for booking of accounts Transactions.




(4)To analyze basics of management information system













SCOPE OF THE STUDY
1. It helps in estimating the future cash requirement of the organization.

2. Helpful in selection of proper source of finance.

3. Helps in taking the investment decision of surplus cash.

4. Helpful in getting cash discount.

5. Helps in planning for purchase of asset.

6. Helps in determining the proper dividend policy.

7. Helps in reducing the over spending of money.

8. `Effective control on cash.







METHOD OF DATA COLLECTION

The data can be selected in two ways:
. Primary
. Secondary


PRIMARY SOURCES OF DATA COLLECTIONS:

The primary sources of data are collected by the personal interviews with the senior officers
and colleagues in the organization


SECONDARY SOURCES OF DATA COLLECTION

The secondary data is collected by the detailed study and analysis of the various records of
the company.


HYPOTHESIS OF THE STUDY

The cash and their control has become an essential tool of the management for controlling costs
and maximizing profits.
The cash and its administration are one of the principal means of meeting its end.


.



RELEVANCE OF THE STUDY

The study is done on the topic of CASH MANAGEMENT in the Escort limited. This topic
includes the planning and control of Cash and expenditure.
It helps in deciding whether or not to commit resources to a particular long-term as well as short
term projects whose benefits to be realized during the year or more than one year.

LIMITATIONS
Although every effort has been in to collect the relevant information through the sources
available, still some relevant information could not be gathered.

A Busy Schedule of Concerned Executives: The concerned executives were having very busy
schedule because of which they were reluctant to give appointment.

Time: The time duration could not provide ample opportunity to study every detail of working
capital management of the company.

Unawareness: Executives were unaware of many terms related to working capital study while
asking to them.

Confidential Information: As the company on account of confidential report has not disclosed
some figures. Moreover, in some cases separate accounts of division are not separately
maintained thereby, leading to restrictions in study.


DATA ANALYSIS
&
INTERPRETATION










USE OF CELEBRITY HELPS IN SELLING THE PRODUCT


Sr. No. Opinion
No. of
Respondents Percentage(%)
1 Yes 90 75.00%
2 No 30 25.00%




ANALYSIS


75% of the respondents considers that use of celebrity helps in selling the product.
25% of the respondents does not considers use of celebrity helps in selling the product.


AWARENESS ABOUT CELEBRITY BY YAMAHA & HERO
Sr. No. Opinion No. of Percentage(%)
Respondents
1 Yes 102 85.00%
2 No 18 15.00%





ANALYSIS

85% of the respondents are aware about the celebrity associated with YAMAHA
15% of the respondents are unaware about the celebrity associated with HERO.





ACCOUNTS RECEIVABLE MANAGEMENT

INTRODUCTION: -
Trade credit arises when a firm sells its products or services on credit
and does not receive cash immediately. It is an essential marketing tool, acting as a bridge for the
movement of goods through production and distribution stages to customers. A firm grants trade
credit to protect its sales from the competitors and to attract the potential customers to buy its
products at favorable terms. Trade credit creates receivable or book debts which the firm is
expected to collect in the near future. The book debts or receivable arising out of credit has tree
characteristics:
1. First, it involves an element of risk which should be carefully analyzed. Cash sales are
totally risk less, but not the credit sales as the cash payment is yet to be received.
2. Second, it is based on economic value to be received later on.
3. Third, it implies futurity. The cash payment for goods or services received is the buyer
will be made by him in a future period. The customer from whom receivable or book
debts have to be collected in the future are called trade debtors or simply as debtors and
represent the firms claims or assets.
Receivable constitutes a substantial portion of current assets of
several firms. For example in India, trade debtors, after inventories, are the major
components of current assets. They form about one-third of current assets in India. Granting
credit and creating debtors amount to the blocking of the firms funds. The interval between
the date of sale and the date of payment has to be financed out of working capital. This
necessitates the firm to get funds from banks or other sources. Thus, trade debtors represent
investment. AS substantial amounts are tied-up in trade debtors, it needs careful analysis and
proper management.





CREDIT POLICY: NATURE AND GOALS

A firms investment in accounts receivable depends on:
(a) The volume of credit sales.
(b) The collection period.
For example, if a firms credit sales are Rs. 30 Lack per day and customers, on an average, take
45 days to make payment, then the firms average investment in accounts receivable is:
Daily credit sales x Average collection period
Rs. 30 lacks x 45 = Rs. 1350 Lacks
The Investment in receivable may be expressed in terms of costs instead of sales value.

The volume of credit sales is a function of the firms total sales and the % of credit sales to total
sales. Total sales depend on market size, firms share, product quality, intensity of competition,
economic condition etc. The financial manager hardly has any control over these variables. The
percentage of credit sales to total sales is mostly influenced by the nature of business and
industry norms. For example, car manufacturer in India, until recently, were not selling cars on
credit. They required the customers to make payment at the time of delivery; some of them even
asked for the payment to be made in advance.

There is one way in which the financial manager can affect the volume of credit sales and
collection period and consequently, investment in accounts receivables. That is through the
changes in credit policy. The term credit policy is used to refer to the combination of three
decision variables:

i) Credit standards
ii) Credit terms
iii) Collection efforts

Which the financial manager has influence:
Credit standards are criteria to decide the types of customers to whom goods could be sold on
increase. The firm will also be exposed to higher risk of default.
Credit terms specify duration of credit and terms of payment by customers. Investment in
accounts receivables will be high if customers are allowed extended time period for making
payments.
Collection efforts determine the actual collection period. The lower the collection period, the
lower the investment in accounts receivable and vice-versa

GOALS OF CREDIT POLICY:
A firm may follow a stringent credit policy. The firm following a
lenient credit policy tends to sell on credit to customers on very liberal terms and standards;
credits are granted for longer periods even to those customers whose credit worthiness is not
fully known or whose financial position is doubtful. In contrast, a firm following a stringent
credit policy sells on credit on a highly selective basis only to those customers who have proven
creditworthiness and who are financially strong. In practice, firms follow credit policies ranging
between stringent to lenient.

MARKETING TOOL:
Why at all do firm sell on credit? Firms use policy as a marketing tool for
expanding sales. In a declining market, it may be used to maintain the market share. Credit
policy helps to retain old customers and create new customers by weaning them away from
competitors. In a growing market, it is used to increase the firms market share. Under a highly
competitive situation or reversionary economic conditions, a firm may loosen its credit policy to
maintain sales or to minimize erosion of sales.





Why do companies in India grant credit?

Companies in practice feel the necessity of granting credit for several reasons:

1. Competition Generally the higher the degree of competition, the more the credit granted by a
firm. However, there are exceptions such as firms in the electronics industry in India.
2. Companys bargaining power If a company has a higher bargaining power via-a- vis its
buyers, it may grant no or less credit. The company will have a strong bargaining power if it has
strong product, monopoly poor, Brand image, Large size or strong financial position.
3. Buyers requirements In a number of business sectors buyer/dealers are not able to operate
without extended credit. This is particularly so in the case of industrial products.
4. Buyers status Large buyers demand easy credit terms because of bulk purchases and higher
bargaining power. Some companies follow a policy of not giving much credit to small retailers
since it is quite difficult to collect dues from them.
5. Relationship with dealers Companies sometimes extend credit to dealers to build long-term
relationship with them or to reward them for their loyalty.
6. Marketing tool Credit is used as a marketing tool, particularly when a new product is
launched or when a company wants to push its weak product.
7. Industry Practice Small companies have been found guided by industry practice or norm
more than the large companies. Sometimes companies continue giving credit because of the
past practice rather than industry practice.
8. Transit delays This is the forced reason for extended credit in the case of a number of
companies in India. Most companies have evolved system to minimize the impact of such
delays. Some of them take the help of banks to control cash flows in such situation.






INVENTORY MANAGEMENT

INTRODUCTION:-
Inventory constitutes the significant part of current assets of a large majority of
companies in India. On an average, inventories are approximately 60 % of current assets in
public limited companies in India. Because of the large size of inventories maintained by firms, a
considerable amount of fund is required to be committed to them. It is, therefore, absolutely
imperative to manage inventories efficiently and effectively in order to avoid unnecessary
investment. A firm neglecting the management of inventories will be jeopardizing its long run
profitability and may fail ultimately. It is possible for a company to reduce its levels of
inventories to a considerable degree, e.g., 10 to 20 %, without any adverse effect on production
and sales, by using simple inventory planning and control techniques. The reduction in
excessive inventories carries a favorable impact on a companys profitability.

NATURE OF INVENTORIES: -
Inventories are stock of the product a company is manufacturing for sale
and components that make up the product. The various forms in which inventories exist in a
manufacturing company are: raw materials, work-in-process and finished goods.
1. Raw materials are those basic inputs that are converted into finished product through
the manufacturing process. Raw materials inventories are those units which have been
purchased and stored for future productions.
2. Work-in-process inventories are semi-manufactured products. They represent
products that need more work before they become finished products for sale.
3. Finished goods inventories are those completely manufactured products which are
ready for sale. Stocks of raw materials and work-in-process facilitate production,
while stock of finished goods is required for smooth marketing operations. Thus,
Inventories serve as a link between the projection and consumption of goods.


The levels of three kinds of inventories for a firm depend on the nature of its business. A
manufacturing firm will have substantially high levels of all there kinds of inventories, while a
retail or wholesale firm will have a very high level of finished goods inventories and no raw
materials and work-in-process inventories. Within manufacturing firms there will be
differences. Large heavy engineering companies produce long production cycle products;
therefore, they carry large inventories. On the other hand. Inventories of a consumer product
company will not be large because of short production cycle and fast turnover.

A fourth kind of inventory, supplies is also maintained by firms. Supplies include office and
plant cleaning materials like soap, brooms, oil, fuel, light bulbs etc. These materials do not
directly enter production, what are necessary for production process usually, these supplies are
small part of the total inventory and do not involve significant investment. Therefore, a
sophisticated system of inventory control may not be maintained for them.

NEED TO HOLD INVENTORIES: -

The question of managing inventories arises only when the comp-any holds inventories.
Maintaining inventories involves typing up of the companys funds and incurrence of storage
and handling costs. If it is expensive to maintain inventories, why do companies hold
inventories? There are three general motives for holding inventories.
1. Transactions Motive emphasiss the need to maintain inventories to facilitate smooth
production and sales operations.
2. Precautionary Motive necessities holding of inventories to guard against the risk of
unpredictable changes in demand and supply forces and other factors.
3. Speculative Motive influences the decision to increase or reduce inventory levels to take
advantage of price fluctuations.







OBJECTIVE OF INVENTORY MANAGEMENT: -

In the context of inventory management, the firm is faced with the problem of meeting two
conflicting needs:

1. To maintain a large size of inventory for efficient and smooth production and sales
operations.
2. To maintain a minimum investment in inventories are not desirable. These are two danger
points within which the firm should operate. The objective of inventory management
should be to determine and maintain optimum level of inventory investment. The optimum
level of inventory will lie between the two danger points of excessive and inadequate
inventories.

The aim of inventory management, thus, should be to avoid excessive and inadequate levels of
inventories and to maintain sufficient inventory for the smooth production and sales operations.
Efforts should be made to place an order at the right time with the right source to acquire the
quantity at the right price and quality. An effective inventory management should.
1. Ensure a continuous supply of raw materials to facilitate uninterrupted production.
2. Maintain sufficient stocks of raw materials in periods of short supply and anticipate price
changes.
3. Maintain sufficient finished goods inventory for smooth sales operation, and efficient
customer service.
4. Minimize the carrying cost and time.
5. Control investment in inventories and keep it at an optimum level






INVENTORY MANAGEMENT TECHNIQUES: -

In managing inventories, the firms objective should be in consonance with the shareholders.
Wealth maximization principle. To achieve this, the firm should determine the optimum level of
inventory. Efficiently controlled inventories make the firm flexible. Inefficient inventory control
results in unbalanced inventory and inflexibility the firm may someti9mes run out of stock and
sometimes may pile up unnecessary stocks. This increases the level of investment and makes the
firm unprofitable.

To manage inventories efficiency, answers should be sought to the following two questions: -
1. How much should be ordered?
2. When should it be ordered?

The first question, how much to order, relate to the problem pf determining economic order
quantity (EOQ), and is answered with an analysis of the costs of maintaining certain level of
inventories. The second question, when to order, arise because of uncertainty and is a problem of
determining the re order point.



























RECOMMENDATIONS

&

SUGGESTIONS








Recommendations


However the company implemented the change process effectively, but there were still some
weaknesses. So, I would recommend some ideas, which the company could have implemented
for a successful change process and I will also give some recommendations on future measures,
which the company can take to bring about effective change. These are as follows:

IYMPL went for the installation of new machinery to cope up with the technological
changes. Instead of installing the new machinery, they could have got the old machinery
upgraded. This would have saved a lot of extra cost incurred.

IYMPL must respond to changes in its environment quickly. When competitors introduce
new products or services, government agencies enact new laws, 52important sources of supply
go out of business, or similar environmental changes take place, YMIPL should respond quickly
and should make plans to implement changes so as to bring about an effective and a planned
change process. This type of a change process will ensure less resistance from the employees.

IYMPL must try to build good relations between employees in the organization, as the
people working in the organization are a mixture of Japanese and Indians, which are totally
different cultures. So maximum co-ordination between the Indians and the Japanese employees
should be forced so as to improve the overall efficiency of the employees.

To improve the working environment within the organization, IYM should organize
cultural programmers so as to get the Japanese and the Indian culture together. This would fill up
the cultural gaps between employees in the organization and they would respect each others
cultures, which in turn is good for a bright future of the company.
















CONCLUSIONS























CONCLUSIONS

The purpose of this project report was to provide an analytical overview of Working Capital
Management at YAMAHA MOTORS INDIA PVT. LTD.

To conclude the project I can say that management has been making constant efforts, with
reasonable success to attain efficiency in management of Working Capital.

The entire process of Working Capital Management at YAMAHA MOTORS INDIA PVT.
LTD. is backed up by a well-organized information system, which is used to make forecasts
with reasonable accuracy. Yamaha Motors enjoys a good rapport with its suppliers as well as
with its customers, enabling it to make payments for liabilities whenever they are due.

Its return on investments has not been very phenomenal. Though the figures show a good
return on investment but it is quite clear that return on Investment figure has been steadily
growing. In the future it is likely to earn more returns on investments.

Management also hopes to reduce the operating cycle, with further improvement in inventory
holding periods and better management in dealing with debtors. Through efficient inventory
management, inventory levels have been brought down.

The Marketing Department is in continuous touch with customers. Regular follow up of
payment being done. This is Infact reflected upon by the cycle time as shown by the
operation cycle.

Finance Department is working on a war footing to improve the financial health. It has
opened six Depots to increase its Turnover. They are really in an aggressive mood to increase
their market share, and are very hopeful for a better tomorrow.

BIBLIOGRAPHY



Bibliography

BOOKS
Financial Management- Gupta S.K
Management Accountancy _GOLE D.K
Cost and Management Accountancy Maheshwari S.L
Financial Management and Policy, C.VAN James Horne.

WORLD WIDE WEB
www.Yahama.com
www.economictimes.com
www.planware.com
www.icraindia.com

Other than Web
M.I.S of the company
Annual Reports





QUESTIONARE

Find the correct option

Q.persentage of investors with regard to age group
Ans. 20-25 25-35
above55

Q. Persentage of investors with regard to the
occupation
Ans. Service student
business other

Q. Persentage of investors with regard to the
income group
Ans. upto 10000 10000-20000
20000-40000 above40000

Q. Awarenass of people reagarding unicon mutual
fund
Ans. Yes no

Q. Invest in unicon mutual fund or not
Ans. Yes no

Q. Regularity of investment
Ans. Yes no

Q. Frequency of investmant in mutual fund
Ans. less than 3 month 6-9 month
9-12 month above 1 year

Q. Investors pref. Reagarding type of mutual fund
Ans. Equity debt hybrid

Q. Preference reagarding mode of investment
Ans. One time sip

Q. Performance in comparison with competitors
Ans. Outstanding good
acceptable poor
v.poor

Q. Satisfaction from returns/service
Ans. Highly satisfied satisfied
moderate dissatisfied
highly dissatisfied

Q. Satisfaction from information provided by
unicon mutual fund
Ans. Fully satisfied not fully
satisfied

Q. Satisfaction by time taken in dispatch of
redemtion request
Ans. Highly satisfied satisfied
moderate dissatisfied
highly dissatisfied

Q. Reinvestment unicon mutual fund
Ans. Very likely quite likely
possibly unlikely very unlikely