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A PROJECT REPORT ON
MANAGEMENT OF WORKING CAPITAL AND EXPENSE ANALYSIS AT
PAM PAC MACHINES PVT. LTD.
SUBMITTED TO THE UNIVERSITY OF PUNE IN PARTIAL FULFILLMENT OF MASTERS IN BUSINESS ADMINISTRATION
NEETA K WADHWANI MBA II
BANSILAL RASMNATH AGARWAL CHARITABLE TRUST S (BRACT) VISHWAKARMA INSTITUTE OF MANAGEMENT, PUNE (2004- 2006)
Management of Working Capital & Expense Analysis
No significant achievement can be a solo performance, especially when it comes to preparing a project of this nature. This project has by no means an exception. I believe that if it were not for the support, confidence and encouragement of many people, this report would look much different than it does today.
I present sincere thank to Mr.D.P.Saxena (Vice-President, Pam-Pac) for giving us an opportunity to carry out a project in Pam-Pac. I would like to give sincere thanks to Mr.Manoj Jain (DGM Finance) for his continuous support and guidance during the project. The practical and learning inputs, which he provided me during whole program, will always add a great learning experience in my career and personal life. I would also like to thank Mr.S.R.Shende, Mr.N.R.Desai, Mr. M.L.Aphle, Mr.R.R.Raut, Mr.Nilesh and Mr. Sanjay of Pam-pac, Pune for providing us consistent support by sparing their valuable time and guidance and co-operation to complete our work successfully.
With immense pleasure, I would like to express my thanks to Prof. Mahesh Halale, project guide for having given me this privilege of working under him and completing this study.
I would be failing in my duty if I do not acknowledge the gratitude to Dr. Sharad Joshi, director, V.I.M for his keen interest and valuable suggestions that went all the way in successful completion of this work.
At the end, I take this opportunity to express my deepest gratitude to all those people without whose consistent support, co-operation, guidance, encouragement and understanding, this project would never have been successfully completed.
(NEETA K WADHWANI)
Management of Working Capital & Expense Analysis
Introduction Company Profile Mission ACG Worldwide Group Companies Organization Structure Other Information Finance Department Management of Working capital Objectives Scope Introduction Analysis of Debtors Analysis of Creditors Analysis of Inventory Ratio Analysis Expense Analysis Objectives Scope Introduction Analysis Methodology Suggestions & Recommendation Limitations Bibliography Eat .. .. . .. .. . . . . . .. . . . . . . . . . . . ..
.4-19 .5-8 9 .10 ..11-15 ..16-17 ..18 ...19 .20-53 ..21 .22 ..23-32 .33-39 ...40-45 ..46-49 .50-53 ..54-79 55 ...56 .57 ..58-79 80-81 ...82-83 ..84-85 ..86-87
Management of Working Capital & Expense Analysis
Its range of products includes automatic blister packaging machines and highly sophisticated cartooning machines. Ltd. Pam-Pac ranges of Blister Packing & Cartooning machines have been specially developed to add value to the product with respect to packaging innovation and to optimize the investment in machine and its change-parts. 4 . Pam Pac Pharma packaging can handle tablets capsule of any size. a joint venture company between Associated Capsules Group. multi-line packaging. India and IWK Verpackungstechnik. It was established in 1989 and started operating in 1990. The Pam-Pac Pharma packing solution is one of the most reliable cost-effective solutions. small batch quantities. With a high output to price ratio. A Range of semi-automatic and fully automatic cartooning machines. Germany has a wide range of machinery products for packaging solutions for Pharmaceutical and FMCG Industries. High speed. level of automation and flexibility. the Blister packing range of machines are reliable and upgradeable to enhance output and level of automation. bottles. tubes and combination packs of syringes & ampoules. Pam-Pac machines offer you the best combination of features. with continuous motion are suitable for a wide range of products including non-rigid products. Pam-Pac Machines Private Limited. products that are difficult to pack and unit packs.Management of Working Capital & Expense Analysis MBA (Finance) Pam-Pac Machines Pvt. prefilled syringes. ampoule vials. which is Pharma standard compliant. and other wide range of products. versatile machines for PVC and Alu/Alu blisters also form a part of the range of blister packing machines.
Management of Working Capital & Expense Analysis MBA (Finance) PAMPAC Advantage: Compact flat blisters with reduced curvature and matched cavities that save packing material. Blisters packing machines 2. Low power consumption. Cartooning machines. 3. The company has a market share of 55-60%. No need to choose between single and twin track machines .simply select the forming width based on your output Quick changeover Fewer change parts result in cost saving Superior dots sealing makes the blisters elegant and flatter. There are total nine machines center in the company out of which4 are Japanese Machines 2 are Indian Machines 3 are German Machines There are two types of Machine sectorsHorizontal Machine sectors Vertical Machine sectors The company is mainly in three types of packing machines: 1. Spares parts. Advanced blister-packing machine with online NFD & collator. which comes from 45% of exports and 55% of domestic business. Line assembly machines. Change parts. Customized level of automation. 5 . The company is basically in three lines of business: Basic machines.
The main materials used for packing are PVC. plastics etc. which is used to make blisters along with to pack them in the cartons. 3.High Speed Cartooning Machine . 2. Aluminum and Aluminum & PVC coils. There are various types of cartooning machines: Hi Cart machines. It is a multi purpose machine.) Line Assembly: This machine is a total solution for many industries.) Cartooning machines: The cartooning machines are made up of stainless steel and are coated by a clad (made up of Aluminum.). BP 2000 and BP 450AD are on move.Hi-Cart: CP 120 & CP 150. rubber.Fully Automatic Horizontal Cartooning machine VCP 40 VP 120 In these machines VP are doing cartooning on vertical level whereas CP is doing it on horizontal level.Management of Working Capital & Expense Analysis MBA (Finance) 1) Blisters packing machines: These machines are used to manufacture the blisters through different machines which are as follows: BP 102 CARTO BLIS BQS TROPAC BP 302 BP 450 AD MAGNA BLISS BP 602 BP 2000 In new innovations. 6 .
Management of Working Capital & Expense Analysis MBA (Finance) Types of Packing done by the machines-: ALU/ALU Blister Packing (Climate control) PVC/ALU Blister Packing PVDC/ALU Blister Packing OTHER ACTIVITIES i) They also manufacture the change part for the machine and supply the spare part needed by the customer. maintenance and repairing of the product for the old and existing customer. ii) Pam Pac provides service. iii) Technical Support/ Training. 7 .
8 . They would always like To be identified with Quality. Their internal values are reflected in the image they portray. Service and Fairness . They will use our technical expertise to create wealth in other parts of the world by becoming a Transnational Company .Management of Working Capital & Expense Analysis MBA (Finance) MISSION It is their intention to become a global market leader in capsules and related machinery and to concentrate on the health care business as their core area for growth.
capsule-filling machines. Their products are exported to over 40 countries. 9 . from empty capsules to granulation and coating.Management of Working Capital & Expense Analysis MBA (Finance) ASSOCIATED CAPSULES GROUP Associated Capsules Group (ACG) has been serving the pharmaceutical industry for four decades. R & D Center in the heart of Mumbai is a government recognized research institution. ACG's world-class technology provides the complete package of solutions. pharmaceutical engineering. They are one of the largest manufacturers of hard gelatin capsules in the world comprising of ten group companies including subsidiaries in USA and Indonesia. packaging machines and also packaginghfilms. veterinary and agricultural research. ACG is committed to Research and Development for continuous delivery of innovative solutions. SciTech Center. As one of the few groups in the world to provide end-to-end solutions in solid dosage delivery system. Synergy in their product line isn't enough. They set high standards of quality. Their research teams continuously strive to develop innovative technology to give their customers the competitive edge. ACG hasmmanpowersstrengthoofoovero1200. Over the last 25 years.000-sq. The endgame is for customer who began it all. packaging films blister packing and carton packing. the group's 50. to capsule filling. with most of their group companies acquiring major international quality certifications. Forty years ago ACG began manufacturing empty hard gelatin capsules and became one of the largest in the world. Precision engineering isn't the ultimate goal. and particularly delivery systems. Today their group companies manufacture world class formulation processing machines. it has been actively engaged in research in the areas of dosage form development including controlled release. ft. they must try even harder to expand their base of integrated solutions. They have installed over 12.000 machines worldwide.
Universal Capsules Indonesia Universal Capsules L. ACL Pvt. Ltd 10 . Ltd.C Universal Capsules Pvt. Ltd Pt. Ltd Pam-Pac Machines Pvt.L. Ltd Packaging films Divisions Pam Pharmaceuticals Machines Pvt. Ltd.Management of Working Capital & Expense Analysis MBA (Finance) GROUP COMPANIES ACG Associated capsules Pvt. Pam Glatt Technologies Pvt.
the company's two plants at Mumbai and Shirwal. Continuous quality improvement is pursued through a Quality Assurance Program. including special capabilities such as twocolor printing. reinforced by rigorous statistical techniques and analysis. service about 1000 customers worldwide. Universal Capsules Limited has grown to become Asia's largest manufacturer of empty hard gelatin capsules. intensive inprocess controls. India's single largest manufacturing facility spread over 22 acres with infrastructure for regular. Associated Capsules Ltd. along with Universal Capsules is one of the world's largest producers of empty hard gelatin capsules. uniformity and conformance to specifications. which ensures consistency. DMF and WHO standards. UCL has a client base consisting of multinational companies worldwide and all major Indian pharmaceutical companies. Service personnel are technically trained to provide interactive and consultative services based on client specifications and delivery schedules. The company is known for precision in manufacturing. The entire range of capsule sizes is provided. 11 . producing over 30 million capsules a day. Close to the international airport & the seaport. UCL is ISO Certified and its products and procedures comply with IP.. UNIVERSAL CAPSULES PVT LTD In a little over a decade.Management of Working Capital & Expense Analysis MBA (Finance) ASSOCIATED CAPSULES PVT LTD With forty years of experience. USP and BP regulatoryrrequirements. The company has its plant at Dahanu. large volume supply. All systems comply with ISO 9001-2000.
continuous improvement in quality and productivity. food and feed industries. PAM GLATT PHARMA TECNOLOGIES PAM-Glatt was set up as a joint venture between ACG Worldwide and Glatt GmbH. agglomeration of powder products. chemical. filling. top spray film coating and batch drying of moist substances. semi-automatic and manually operated machines to meet different production and commercial requirements. 12 . a history of innovation and strong customer support has provided a technological edge over competitors and has guaranteed success with over 12. with over two decades of international experience. The plant at Mumbai conforms to all GMP and safety standards worldwide. pioneers of fluid bed technology.Management of Working Capital & Expense Analysis MBA (Finance) PAM PHARMACEUTICAL The flagship engineering company of ACG Worldwide. The FBE fluid bed processors provide cost-effective solutions for standard applications in the pharmaceutical. Manufacturing the entire gamut of machines for capsule filling operations for a total solution makes it the only one of its kind in the world. A quick action stop valve has been introduced to guarantee optimum protection of people. polishing. Conforming to ISO 9001 standards. for the manufacture of world class FBE fluid bed processors in India. including that specific to dust explosion. equipment and the working environment. inspection. It is versatile over a wide range of processes including batch granulation. PAM Pharmaceutical manufactures the world's widest range of capsule sorting. handling and de-blistering machines. the product range includes automatic.000 machines installed worldwide. Germany. A sophisticated plant at Mumbai with a dedicated R&D team.
Capable of responding to all the segments of capsule users across the US These five fully climate-controlled warehouses can meet large requirements on an urgent basis 13 . from capsule-filling machines to packaging films and blister packing machines. Strategically located. which manufactures rigid substrate PVC films as well as moisture barrier PVDC coatings and laminations on the film.New Jersey & Florida on the East Coast & California. USA UC. Aluminum Cold Forming Blister Foil and pinhole-free lidding foil is also marketed in collaboration with VAW. the Associated Capsule limited . UC. USA.L. PVC/ACLAR films are laminated in collaboration with world leader Honeywell. From empty gelatin capsules to natural vegetarian capsules. Utah & Arizona on the West Coast.Management of Working Capital & Expense Analysis MBA (Finance) ACL PACKAGING FILMS DIVISION A pioneer in introducing PVDC coated PVC films in India. a W&H laminator manufactures Triplex PVC/PE/PVDC films. As the American Subsidiary of ACG Worldwide. UC. It is the only unit in India.C. Aluminum Cold Forming Blister Foil is also marketed in collaboration with VAW. Wherever customer are located in the US. Germany.LLC offers access to the group s finest and latest technologies & products.LLC is an active member and US subsidiary of ACG Worldwide.LLC is geared to deliver end-to-end solutions.. and whatever their need. Germany. For extremely hygroscopic formulations.Packaging Films Division provides the complete range of high quality barrier packaging films for blister packing. ensuring total control on quality. UNIVERSAL CAPSULES L. They are one of the few organizations in the world to offer end-to-end solutions in solid dosage systems.
low rejection levels. PT Indopharma. PT Pharos.Management of Working Capital & Expense Analysis MBA (Finance) Trained manpower available for consultation and trouble-shooting. the company has established itself in the region as one of the leading suppliers of solid dosage delivery formulations. The company has had a long-term relationship with local ethical pharmaceutical manufacturers as well as herbal manufacturers (JAMU) and even provides for Apotek and pharmacies. PT Zenith and many others form a part of the company's vast clientele. Strong local technical backup available. Leading pharmaceutical giants including PT Sanbe. PT Medion. Malaysia and the ISO 9002 Certification. the company is expecting the Indonesian MUI Certification as well. and blister packaging machines. PT Soho. pharmaceutical grade PVC and PVDC coated PVC films. PT. Known for its reliable supplies of high quality capsules. Universal Capsules Indonesia represents ACG Worldwide in Indonesia and surrounding countries. to market their entire range of empty hard gelatin capsules. capsule filling and sorting machines. guaranteed machine performance and its unswerving dedication to fight spurious drug manufacturers. Besides having received certificates of approval from HALAL. 14 . Universal Capsules Indonesia PT.
Patil 5. Spares & Change Parts Manager Mr.Management of Working Capital & Expense Analysis MBA (Finance) ORGANIZATIONAL STRUCTURE Vice-President - Mr. Pillai Mr.S.A. Engineer Mr. S.K. Saxena Department wise Organization 1. Suryavanshi Mr. Gadre 15 . Gandhi 4. B. Manager Engineer Engineer Engineer Mr. N. R. Quality Assurance Manager Engineer Engineer Mr.R.E.J. Mrunalini Mr. D. Ramchandra 2. Manager Sr.H. V. Sakhalkar Vacant (Purchase) 3. M.P.T Mr. Shah Mr. Harish S.C.A. Uday Kalkundre Mr. Stores Asst.S. M. Navindgikar Mr.V. Vendor Development Manager Manager Asst. Electronics & Maintenance Manager Engineer G. Rangnath Mr.M.A. A. P. S. Varade Mr. Lagu Mr.
Kurdukar 10. Limaye Mr.K. Amit 16 . G. Kulkarni 8. Milind S.V.G. S. P. Torgal Mr. Manoj Jain Mr. Manager Mr. Navall Dhyaani 9. Production Manager Engineer Mr. HR & Administration Manager Executive Supervisor 11. Finance & Accounts DGM 4 Accounts Officers Mr.G.M. Manager Asst. Singh Mr. Hegede 7. Service Manager 15 Service Engineers Mr. Manager Manager 5 Design Engineers Mr.M. S.Management of Working Capital & Expense Analysis MBA (Finance) 6. Assembly Sr. Designing Sr. Gokhale Mr. S. C. Patki Mr.
HLL 2. Cipla pharmaceuticals ltd. Intas Pharmaceuticals Pvt.Enterprises Main clients of Pam Pac for Blister packing Machines are: 1. Unicem pharmaceuticals ltd.Gear Sharayu Engineering S. 7. Dr. Ltd. 5. 4. 6. 9. Ltd. Reddy s Lab Main client for Cartoning is: 1.R. 8. 2. Ltd. Torrent Pharmaceuticals ltd. Ranbaxy India Ltd. Aventis Pvt. Novartis Pvt.M. FUJI 3. MUMBAI. 3.Management of Working Capital & Expense Analysis MBA (Finance) Other Information Top Five Vendors of Pune Gurudatta Enineering Works Gurukrupa Engineering Works New A. Cadila Pharmaceuticals ltd. 17 . ADAMS Main competitor: PRECISION MACHINES TOOLS.
Performance of the company: As on 31st March 2004-05 3423 1613 5036 556. It is key department in any organization and plays major role in company s success and failure.48 18 . but any asset or liability in the company is a part of finance as the money is invested in all these and the profitability of the company is measured after considering all the factors. The finance department makes the resources available to different departments and at the end of the year it analyze the results received from utilization of those available resources. lacs ) Particulars Domestic Sales Export Sales Total sales Profits after tax 2003-04 2400 1022 3422 471. All other departments whether HR.Management of Working Capital & Expense Analysis MBA (Finance) Finance Department The Finance department deals in the best utilization of the available financial resources irrespective of the constraints. It also analysis the opportunities to make best utilization of resources to increase the profitability of the company by maintaining the liquidity and at the minimum risk. Finance doesn t only means currency notes or money.16 (Rs. Marketing or Production revolves around the Finance dept only.
Management of Working Capital & Expense Analysis MBA (Finance) MANAGEMENT OF WORKING CAPITAL 19 .
liquidity and risk by considering company s objectives. Optimization of the amount of sales and investment in receivables.Management of Working Capital & Expense Analysis MBA (Finance) OBJECTIVES The objectives of project on Management of working capital are as follows-: To determine policy regarding profitability. To determine the quantum and structure of current assets. Determining the relationship between the current assets and current liabilities and hence liquidity is determined. Analysis of Financial Statements 20 .
21 . which doesn t cause any obstacles in production process. If the firm makes payment to it creditors for raw material in time. Adequate working capital increases paying capacity of the business but the excess working capital causes more inventory. current liabilities are paid in time. By managing the working capital. the management of working capital helps to manage all the factors affecting the working capital in the most profitable manner. The goodwill of the firm is also adversely affected due to the inability to pay current liabilities in time. On the other hand. absence of adequate working capital leads to decrease in return on investment. It also helps to maintain proper balance between profitability. increases the possibility of delay in realization of debts. risk and liquidity of the business significantly. it can have the availability of raw material regularly.Management of Working Capital & Expense Analysis MBA (Finance) SCOPE The management of working capital helps us to maintain the working capital at a satisfactory level by managing the current assets and current liabilities. Hence.
and outstanding expenses. bill receivables. Fixed assets 2. Working Capital = Current Assets Current Liabilities In business two types of assets are used: 1. bank. stock. Current Assets Fixed Assets are used in business for a long period and they are not purchased for the purpose of selling them to earn profit. debtors. 22 . If current assets are equal to current liabilities then working capital will be zero and in case current liabilities are more than current assets. one year or within normal operating cycle. Current assets include cash. which are to be paid in short period i. Current Assets are used for day-to-day operation of business. Hence in any business there should be proper balance between fixed capital and Working capital for efficient operation of business. The working capital emphasis on how much current assets have been financed out of long term funds. short-term loans. bank overdraft.Management of Working Capital & Expense Analysis MBA (Finance) INTRODUCTION Working Capital: Working capital is the excess of current assets over current liabilities. The capital employed in these assets is called working capital. Current Liabilities are those liabilities. the working capital will be called negative working capital. These include creditors. marketable securities etc.e. bills payable.
There is the advantage of favorable opportunities. 23 . current liabilities and the inter-relationship that exists between them. There is an increase in Debt capacity and Goodwill.Management of Working Capital & Expense Analysis MBA (Finance) Working capital management is concerned with the problems that arise in attempting to manage the current assets. the main objective of working capital management is to manage current assets and current liabilities so that: - There should be full utilization of fixed assets. The needs & problems for every business are different but generally the following factors must be considered while determining the requirement of working capital: - Nature of business Business fluctuations Production policy Credit policy Availability of raw material and bank credit Turnover of inventories Operating efficiency So.
In current assets the cash & bank balance has increased by 220%. With compare to working capital in 2004-05. 24 .44% and debtors by 17%. In the year 2002-03 there is also an increase in advances to employees for foreign travel in the month of March. There was also increase in the deposits in excise and other assets. The current assets are decreasing due to the decrease in inventory. In each year working capital decreases from October to November. But in the year 2004-05. which has been analyzed under Debtor analysis. In the year 2004-05 the current assets and current liabilities are increasing by 1. though there is an increase in the sundry debtors.1%.27% increase in current assets and 3% decrease in current liabilities.6% respectively.8% from 2002-03 and 19% from 200304 have increased the working capital requirement in 2004-05. cash & bank and other assets. inventories by 27. The sundry debtors are increasing due to the high sales in the month of March resulting to high average collection period.2% against increase in current liabilities by 17%. In 2002-03 the decrease is due to increase in current assets by 4.Management of Working Capital & Expense Analysis MBA (Finance) MANAGEMENT OF WOKING CAPITAL With reference to working capital table-1. The current liabilities are increasing due to the increase in creditors and provisions. The main reason for increase is high sales and more receivables in last month. in the year 2002-03 and 2003-04 the requirement of the working capital increases in the month of March. whereas under current liabilities the provisions has decreased by 73%. 53. the working capital has decreased in the month of March due to decrease in current assets by 0.3% and 7. This high increase 30% in working capital is due to the 14.86% and increase in current liabilities by 6. There was an increase of 30% in 2003-04 with compare to 2002-03. The reasons can be different but the trend is same.
82 2328.lacs) 2000 1500 1000 500 0 1 2 3 4 5 MONTHS 6 7 8 9 10 11 12 (Ref.14 822.17 2093.52 2107.Management of Working Capital & Expense Analysis MBA (Finance) Table-1 Working Capital (Rs.4) Graph-1 2002-03 2003-04 2004-05 WORKING CAPITAL 2500 WORKING CAPITAL (Rs. Table-1) 25 .71 646.86 (Ref. Lacs) 2002-03 APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH 891.49 690.04 532.7 492.42 1293.38 2200.41 1999.19 1271.73 2219.15 1238.17 2003-04 1205.08 1108.04 2261.79 2314.6 1988.51 1409.34 888.44 705.76 2004-05 1910.99 1238.05 1495.76 1259.15 1406.5 2134.64 1293. Table-2.8 665.27 2124. 3.71 1498.85 1677.91 561.7 525.
1293.38lacs. In 200203 variations are from Rs. 26 . But in 2004-05.Management of Working Capital & Expense Analysis MBA (Finance) As per graph-1 in 2002-03 and 2003-04.1108.64lacs to Rs. On the other hand variations are from Rs. graph-1 shows less variation and little stability because the requirement moves only from Rs.2328. there are major month-wise variations.05lacs to Rs1677.76lacs in 2003-04.17lacs.492.1910.41lacs to Rs.
Management of Working Capital & Expense Analysis MBA (Finance) Table-5 Working Capital and Sales As on 31st March 2002-03 Working Capital(Rs.56 79.76 1988.53 49. one of the Group Company.53% of sales but in the current year the working capital required has reduced to 40% of sales this reduction is the good sign of the increasing efficiency of the company.86 2559 3422 5036 %of Sales 50.Lacs) Working capital(Rs. The main reason is machines sent for exhibition through PAM.86 88.lacs) 1293.20 2004-05 1590. 1145. It resembles that the company is able to generate more sales in less amount of working capital. We must try to decrease it.94 79. Table-6 Debtors and Working Capital As on 31st March 2002-03 Debtors(Rs. Previously it was 50.lacs) As a % of W.27 2003-04 1341.47 1293. It s good but there can be more decrease as we see in the further analysis of the debtors that the average collection period for exports in the month of January is 6 months which is very high.Lacs) Sales(Rs.C.17 1677.03 39.97 The debtors are 88% of the working capital in the year 2002-03 but it has reduced to the 80% in next years. 27 .76 2004-05 1988.49 The working capital requirement as a percentage of sales is decreasing every year.17 2003-04 1677.
72 2003-04 666.84 The creditors contribution in the working capital is increasing showing that we are operating more on credit rather than cash purchases and our other overhead expenditures are also on credit.Lacs) As a % of W.86 41.Lacs) Working capital(Rs.11 1293.C. 28 .64 68.15 2004-05 1075.76 1988.42 39.70 54.47 1293.76 1988.Lacs) Working Capital(Rs. 522.20 2003-04 816. It is good but till our credit expenses like interest on these credits does not cross the cost of investing in working capital in cash purchases and expenses.86 40. Table-8 Inventories and Working capital As on 31st March 2002-03 Inventory(Rs.04 2004-05 1369.Lacs) As a % to W. The creditors also include advances paid by the customers.07 The inventory is the main component of the working capital and its contribution in the working capital is increasing.Management of Working Capital & Expense Analysis MBA (Finance) Table-7 Creditors and Working Capital As on 31st March 2002-03 Creditors(Rs. 531.08 48.17 1677.C. This must be controlled.17 1677.
of Days 200 150 100 50 0 Ju ly Au gu Se pt st em be r O ct ob N ov er em be D r ec em be r Ja nu a Fe r y br ua ry M ar ch ay M Ju ne Ap ril (Ref. Table-10A) Graph-6 A n a lys is o f d e b to rs (E x p o rts ) 2 0 0 2 -0 3 250 2 0 0 3 -0 4 2 0 0 4 -0 5 No.of DAYS (Ref. Table-10B) 29 . A Company always tries to have the lowest possible average collection period so that its cash does not get blocked and thus the working capital required will be low. Graph-5 A n a ly s is o f d e b to r s (D o m .) 160 140 120 100 80 60 40 20 0 Ju ly Au Se gus t pt em be r O ct ob N ov er em be D r ec em be r Ja nu a Fe ry br ua ry M ar ch M ay Ju ne Ap ril 2 0 0 2 -0 3 2 0 0 3 -0 4 2 0 0 4 -0 5 No.Management of Working Capital & Expense Analysis MBA (Finance) ANALYSIS OF SUNDRY DEBTORS The average collection period is the period within which our debtors make the payments to us.
27 2559 44. there are lots of variations. The average collection period lies between 135-140 days every year. There must be a constant average collection period during the year so that there can be the regular realization of debts and also the working capital blocked in these assets will be as low as possible.20 3422 39. 30 . The overall trend of the domestic average collection is more or less similar but if we see the average collection period of the exports. Table-9 Debtors and sales As on 31st March 2002-03 Debtors(Rs.Lacs) As a % of Sales 1145.75 2003-04 1341.Lacs) Sales(Rs. In the year 2004-05 the average collection period is lowest in the month of January and February.47 5036 31.58 If we analyze the debtors as compared to the net sales of the last 3 years the debtors of our company are continuously decreasing as a percentage of sales.Management of Working Capital & Expense Analysis MBA (Finance) In the graph-5 & 6 the trend of the average collection period can be clearly seen the average collection period in the second quarter of the year 2004-05 is highest. If we compare all the three years the average collection period is on decline every year showing that the company is realizing its debts faster than the previous year.19 2004-05 1590. which is a good sign that we are not blocking our capital. In year 2004-05 the longest average collection period is 191 days in January due to the machines sent for exhibitions through one of the group companies.
Management of Working Capital & Expense Analysis MBA (Finance) TABLE-11 EXPORT DEBTORS Average collection Period(months) 0-2 2-4 4-6 More than 6 Total 2002-03 31 18 6 13 68 Number of Debtors 2003-04 47 5 5 17 74 2004-05 58 20 7 12 97 The general policy of the company for the collection of money from its debtors is as follows 30% Advance 60% at the time of Dispatch 10% on the Installation & Commissioning of machine In exports the company also collects 100% advance payments from many customers 31 .
of Days 150 100 50 0 Ju ly Au gu Se pt st em be r O ct ob N ov er em be D r ec em be r Ja nu a Fe ry br ua ry M ar ch ay M Ju ne Ap ril (Ref. there were lots of variations in the average payment period in the first quarter of the year 2004-05. there is a very steep rise in the average payment period at the end of all years. As per table-13. Table-13) If we see graph-7. The last quarter (especially February &March) also contains lots of variations for both 2003-04 and 2004-05 (the difference is of more than 100 days). So such a policy of the payment should be adopted which will maintain the working capital as well as the credibility of the company.Management of Working Capital & Expense Analysis MBA (Finance) ANALYSIS OF CREDITORS The average period provided by the creditors or we can say that the period we take to make payments to our creditors is known as the average payment period. If the average payment period will be longer the working capital required will be low. The trend of the average payment period can be studied from the graphs given below and the attached workings. Graph-7 A v e r a g e p a y m e n t P e r io d 2 0 0 2 -0 3 2 0 0 3 -0 4 200 2 0 0 4 -0 5 No. The decrease in the average payment period in the year 2004-05shows the good credibility of the company in the market but on the other side it also points out that the working capital requirements of the company are increasing due to this trend. 32 .
Management of Working Capital & Expense Analysis MBA (Finance) Creditors and Sales 2002-03 Creditors(Rs.77 2004-05 1201. If more sales are there from credit then the working capital required will be less. 33 .04 2003-04 915.23 2559 14.Lacs) Sales(Rs. Other payments relating to tax.28 5036 23. We should try to increase this percentage so that more sales will not require more working capital.Lacs) as a % of Sales 359. outstanding expenses or any other liability are not taken under it.85 The creditors as a percentage of sales show the sales we are generating are from credit purchases up to what extent. NOTE: In the figures of creditors only the creditors relating to purchases are taken. In the above table the creditors as a percentage of sales have increased in the year 2003-04 but again it come down in the year 2004-05. as the raw material can be availed on credit.97 3422 26.
86 523.1. 14. to WC WIP & F.2.05 1293.86 34. The raw material stock has started increasing from January 2005 due to the changed policy of keeping more stock.70% 54.21% 18.76 21.77 2004-05 689. 34 .94% 310.G Total Inventory Working Capital RM & St.42% 40.Lacs) 2002-03 Raw-Material & Stores WIP & F.19 2003-04 355.51% 19.07% (Ref.28 1075. Another reason for this is the stock of 5270 parts costing Rs.18 257.17 20.46 1988.49% 386. The yearly trend of inventory for 3 years has been analyzed in the attached pages.G to WC Total Inventory to WC 265. 14.Management of Working Capital & Expense Analysis MBA (Finance) Analysis of Inventory Table-14 Inventory As on 31st March (Rs.65% 19. Table-14.55lacs which has not been moved from the previous one year are included in stock.15 1677.45% 39.38 666.101.3) The inventory as a percentage of working capital is increasing due to the reason that the company has purchased the raw material for the sales of April & May 2005 in the month of March 2005.
Management of Working Capital & Expense Analysis MBA (Finance) EXPENSE ANALYSIS 35 .
Management of Working Capital & Expense Analysis MBA (Finance) OBJECTIVE The objective of the Expense Analysis is as follows: - To analyze the different expenses of the company To search reasons of increase in the expenses To find out measures to control the expenses 36 .
The efficiency of the company is not only judged by the increasing sales. These gaps are filled by proper managerial actions. If we want to know a company better.Management of Working Capital & Expense Analysis MBA (Finance) SCOPE The expense analysis helps us to identify the deviations of different expenses incurred during the year from those incurred in the last year. We have to search out the gaps and weak points due to which the expenses are increasing. If the expenses are reducing irrespective of increasing sales. to maintain the contribution and profits of the company. we must analyze the expenses as compared to sales. These expenses are analyzed in comparison to sales because as the sales increases there will be definitely an increase in expenses but the ratio of increase in expenses to sales must not increase. 37 . Thus expense analysis is very important for a company at different levels in the lifetime of the company to control its expenses. it resembles the increasing operational efficiency of the company.
Management of Working Capital & Expense Analysis MBA (Finance) INTRODUCTION The expenses of a company can be classified into three categories: - Material Expenses Labour Expenses Overhead Expenses Material expenses are those expenses. Labour charges. which contribute to the material cost of the company. These include salaries and wages. freight and octroi charges. warranty expenses. insurance. recruitment and training expenses. travelling expenses and many more. power and fuel and any other cost which is directly related to the material consumption for the purpose of production of finished goods. The administration overhead includes the expenses related to the office like rent. Labour Expenses include the expenses related to the manpower of the company. and other staff welfare expenses. 38 . taxes. These include the cost of raw material. printing and stationary and many more. Overhead Expenses can be further divide into administration overhead and selling & distribution overheads. The selling & distribution expenses include commission on sales.
2 and table-2 we can see that as a percentage to sales.1. on the other hand the labour cost is decreasing. The profits are also decreasing due to the increase in material and overhead cost.2) From the graph.1 (Ref. 2) Graph-1. Table.1 & 1.2 (Ref.Management of Working Capital & Expense Analysis MBA (Finance) The expenses as a percentage to net sales of the company has following components distributed in the given ratio Table-2 Components of cost Material cost Labour Cost Overheads Cost Profit 2004-05 49% 10% 24% 17% 2003-04 47% 11% 19% 23% 2003-04 Material cost Labour Cost Overheads Cost Profit 2004-05 Material cost Labour Cost Overheads Cost Profit Graph-1. The detail analyses of these costs have been done to find out the reasons of the increase with the amount of increase. 39 .Table. material cost and overhead cost are increasing.
99 3190.50 40 .700lac as compared to the purchases of only Rs. which lead to change in the contribution. The sales in the month of April and May 2005 are Rs.58 63.85 13.30 18.66 352.348.88% (2003-04) to 52. The main reason is the increase in the variable cost that increases as a 2%(approx.49 10.01% (2004-05).140lac The changes in different proportions.78 55.35 687.Management of Working Capital & Expense Analysis MBA (Finance) NOTES: The contribution has reduced from 53.) of sales.66 21.56lac. The work-in-progress at the end of year (2004-05) was Rs. have been given in the table under: - Table-4 2004-05 Sales Purchase % to sales Closing Stock %to sales % to purchase 5035. The increase in the material consumption has caused the increase in the variable cost.56 2003-04 3422. It was used for the sales in the next financial year.21 1904.
52 3.11 0.85 0.14 2.02 1.51 0 0. 41 .03 Remarks The general expenses are increasing mainly due to the increasing sales promotion expenses.11 1.05 19.01 0.2 2004-05 7.84 0.71 2.8 0.2 0.46 1.96 5.6.29 24.74 0.6.36 3.Management of Working Capital & Expense Analysis MBA (Finance) Table-6 GENERAL EXPENSES (Rs.5 65.13 40.07 0.42 0.02 8.Assets House keeping expense Seminars & training Water charges Gardening expense Excise duty expense ISO certification expense Paisa round off Liquidated damages Sundry adv.21 0.93 0.97 0.3 Tbl.01 5.03 1.6.97 6.68 3.lacs) ITEMS Security expenses Sales promotion Advertisement Sales promotion expense Entertainment expense Exhibition expense Miscellaneous expense Tender fees Recruitment charges Filling fees Loss on sale of F.03 0 7.34 0.77 1.02 2.86 100. written off Subscription Books & periodicals Subsc.3 3. Books & periodicals TOTAL 0.1 0.42 2003-04 7.01 0 0 Tbl.1 Tbl.
operation & maintenance of VP 120 and editing digital pictures and also to make operational and maintenance manual for service department 42 . 64 5 035. digitizing and quality colour prints etc during the year.9lacs to ABU Communications Pvt.75 Lac on Photography. The total payment of Rs. 99 0.1 ANALYSIS OF SALES PROMOTION EXPENSES (Rs. Omna tax. 77 3422. VCP40. tabletop/photography for Hi-Cart brochure There is a payment of Rs.98Lac was made to Longbow associates during the year For following purposes: Ampouloblis logo Advertisement for Cp-150 & Hi-Cart Shooting of raw footage of BP2000 in March. SALES % OF SALES Sales promotion expenses have increased by Rs. 21 0. EXPENSES OF 2004-05 There are expenses of Rs.1. printing. scanning. 87lac as compared to the last year.59lac has been made to Apt design for designing. Ltd for CD s containing processed images of machines and also some jobs done for BQS. 0. 18.Management of Working Capital & Expense Analysis MBA (Finance) Table-6.lacs) ITEM 2004-05 24. 0. May and August 2004 Logo and address correction on old brochures Advertisement for Tropac Editing of Hi-Cart soap cartoning film C-tax. A payment of Rs. It has also increased by 0. 16 SALES PROM. 48 2003-04 5.3. The payment was made to Gurudutt Photography. EXP.32 % of sales. VP120.
86lacs has been made to K. Iran for business promotion/coordination and other expenses for consignment send to Iran. The provision of Rs.13. There was an expense of Rs. Sudarshan Pillai has gone to Bolivia for Blister packing machine) The other payments (Rs.) are made to different hotels like Sun N Sand..0. Rs.15lacs was the payment related to the different expenses for the month of January. Payment of Rs.0. EXPENSES OF 2003-04 Rs.04lacs & Rs.Management of Working Capital & Expense Analysis MBA (Finance) Payment of Rs.07lacs & Rs.0. Ltd for the visit of customers from Egypt during the year.0.0. Rs.04lacs were made to Padmja Enterprises and samtech Enterprises respectively.13lacs & Rs.14lacs was paid to APT Design as machine manual charges and advertisement.13lacs was made to take care of outstanding expenses of 2003-04. and March.01lac was made to Flossy and Vikasdeep respectively There was a payment of Rs.0.0. 0. Enterprises.0.0. The Pride Hotel etc for the stay of customers.0.2lacs approx.50lacs was made to Sun n Sand for Mr.Ltd.18lacs for the expenses incurred in the month of April to October and November & December respectively.16lacs was paid to Bipin Mistry. Payment of Rs.34lacs was paid to Kohinoor Enterprises during the year Rs.13lacs was made to this hotel. A payment of Rs.0.0.0.09lacs was paid to Suman Mangal Kendra for machine Photography and video shooting for the month of March. & Pub. February. Rs.0. Lekkaram Suwatchi. 43 . Rs.0. Rs.08lacs was paid to S.56lacs to GVS creations for ACG logo. Another payment of Rs.0.0.17lacs to M/S Sabhi Enterprises Company Ltd.09lacs was paid to Sandham Advt.05lacs & Rs.S. Rs.01lacs were paid to Natraj Photo studio and Parekh Photo studio respectively. There was a payment of Rs.0. The payment of Rs.52lacs (Mr. Rs. Pvt.3.30lacs was paid to pride hotel. Raheja Pvt.0.0.
12 2003-04 19. Rs.2 EXHIBITION EXPENSES (Rs.66lacs) for exhibition expense of Propak. 50% share (Rs.1. Rs4.0. 2.lacs) Item EXHIBITION EXP. 40% share (Rs.91lac. Rs.37lacs) for Pharmatech exhibition held at Mascow 11.2lac) for Tropak exhibition expenses held at Poland 4.Management of Working Capital & Expense Analysis MBA (Finance) Table-6.41lacs for Asia Pharma exhibition expense held at Bangladesh 12.1lac for Chem spec exhibition held at Hyderabad 13.79lac for Propak exhibition held at South Africa 10. It has also increased by 0.3.1.8lacs as a share of Propak for exhibition held at Jakarta 7.8 0.21 SALES 5035. Rs. 40% share (Rs. 2004-05 40. The exhibition expenses for 2004-05 includes the following amounts-: 1. 3. There was a adjustment of Rs. 15% share (Rs.12lacs for exhibition held at Poland 8.2lac) for marketing expense paid to Algerian agent 6.77lac) for Kitex exhibition expense held at Kazakistan 5. South Africa and TotalPak 9.15.5% share (Rs. 20.21 % of sales 0.66lacs in respect to prior period expenses 44 . 4. Rs.56 The exhibition expenses have increased by Rs.99 3422.8lac) for Propak-Asia exhibition expenses held at Thailand 184.108.40.206% as a percentage of sales as compared to the last year.4. 42. 40% share (Rs. 50% share (Rs.59lac) for Indiachem exhibition expenses held at Mumbai 3.
20lacs paid to Chem Pharma for exhibition held at Mumbai from 14th December to 17th December 45 .8. Rs. Rs. UK for exhibition expense held on 16th February 2004 5. 20% share (Rs. 50% share (Rs.89lacs) towards Pharma exhibition held at Chennai from 19th December to 21st December 3. Bangok 2.1.Management of Working Capital & Expense Analysis MBA (Finance) The exhibition expenses for 2003-04 includes the following amounts-: 220.127.116.11. 40% share (Rs. Africa in March 2004 4. Rs.4lacs) towards Propak.47lacs for exhibition expense held at Chennai 6.55lacs) towards Propak Asia.03lacs paid to Sussex and Berkshire machine ltd.
Golden Swan Holidays (Rs. Some of these expenses are payments made to Sun n Sand (Rs.Management of Working Capital & Expense Analysis MBA (Finance) Table-6.14 2003-04 1.0.03 The entertainment expenses have increased by .3lac for the stay of personnel of Bintag.lacs) Item ENTERTAINMENT EXP. 2004-05 2.21 0.32lac for Bintag personnel tour expense for Delhi and Agra) 46 . These expenses include mainly the payments made to the hotels for the entertainment of the guests visiting to the company for different purposes.05 SALES % of sales 5035.04 0.3 Entertainment Expenses (Rs.0.99 3244.01% as a percentage of sales. Indonesia).
74 0.55 3.35 1.07 3.42 lacs but as a percentage of sales.Management of Working Capital & Expense Analysis MBA (Finance) Table-7.30 1.08 3.39 2.65 3422.65 1.01 15.9.83 2.89 5035.89 39. 47 .94 2.lacs) 2003-04 30.65 ITEM Tel.89 Table-7.22 1.71 1.77 0.lacs) MONTH April May June July August September October November December January February March TOTAL 2004-05 1.20 2.99 0.21 0. COURIER AND POSTAGE EXPENSES (Rs.2 2003-04 0.1 ANALYSIS OF TELEPHONE.09 1. it has reduced by 0.05 1.79% (Rs. courier & post.25 14.89% These expenses has increased as per the previous year by Rs. Sales % of sales 2004-05 39.08 2.1 %.99 1.14 30.20 3.04 1.
38lacs to BSNL.31lacs incurred on behalf of Associates Capsules Ltd. December Rs. for October. 237451 to 237456) Rs.25lacs for the bill of mobiles for the month of June Rs.1lacs for the bill of Mr. 237091 to 237098) Rs. B. Pune (Tel. Rs. no. Pune (Tele. Pune (Tele.P.25lacs for the bill of Idea of Mr.07 to City Courier for August Major Expenses for January 2005 are: Rs.L Shetty Rs.0. 237451to 237455) Rs.0.42lacs paid to Professional couriers for the month of April & May 2004 Major Expenses for November 2004 are: Rs.25lacs for the mobile bill of GVN Parsad (9810511696) Rs. GVN Prasad Rs.48lacs to BPL mobile Rs. no.0.39lacs to TNT India Ltd.1lac to BSNL.56lacs to BSNL. D.0. Pune (Tele.09 for the expenses of Mr. 237451 to 237455) Rs.45lacs to BSNL.04lacs to BSNL.0.08lacs to BPL mobile Rs. Pune (Tele.0.0. November.Management of Working Capital & Expense Analysis MBA (Finance) Major expenses for July 2004 are: Rs.0.0.0. no.0. Pune (Tele.0. 237091 to 237098) Rs. Saxena for the month of July to October Rs. No.0.1. no. 237092 to 237098) Rs. no.0.08lacs for the purchase of new mobile of Mr.0.0.75lacs to BSNL. (courier services) for August and November Rs.0.49lacs to BPL mobile Cellular ltd. GVN Prasad 48 .
Ltd. Another payment of Rs 0.1. PUNE (telephone no.37Lacs) Rs. No.22Lacs paid to BSNL.42lac (telephone no.12Lacs paid to Surjeet Chukraborty.0.0.0.5Lacs for the provision for expenses 2003-04 49 .18lacs to First Flight couriers for February 2005 Rs0.0.7. 237091 to 237098) Rs. 237091 to 237098) and Rs.10lac towards the share of Tel. Rs. no. (Rs. & photocopy expense 25% and 10% respectively accounted on behalf of PAM Pharmaceuticals & Allied machinery Pvt.14lacs on behalf of Assocciates Capsules Ltd.20lacs on behalf of Associates capsules Ltd for January and February Rs. Rs. Pune (Tel no.1. Pune (Tel. for March Rs.0.55Lacs paid to BSNL. Pune (Tel.57 lac was made to BPL mobile cellular Ltd. 237451 to 237456) Rs.Management of Working Capital & Expense Analysis MBA (Finance) Details of March 2005: Rs.0.0.0. 237451 to 237455) in the month of March.16Lacs paid to BPL Mobile Cellular. February & March. 1lacs to the BSNL. Rs.0.15lacs to city courier service from September to November Rs.0.58lacs Details of March 2004: Rs.24lacs to TNT courier for February and March The other payments for the outstanding expenses of 2004-05 amounts to Rs. Rs.2Lacs incurred by PAM on our behalf. 0.56Lacs paid to BSNL. The telephone charges include the payment of Rs. 237451 to 237456) Bills paid for the month of January.
38.31 2003-04 85.50 2. The increased travelling expense is due to mainly increased foreign travel expense.lacs) DEPARTMENT SERVICE R&D ASSEMBLY ELECTRONICS MARKETING DESIGN EXPENSE (2004-05) 10.00 0. which has increased from Rs. This is mainly due to the frequent visit of service people for the purpose of after sales services. 50 .40 (03-04) to Rs. SALES %OF SALES 2004-05 116.2 (Rs.53 5035.25 4.13 0 EXPENSE (2003-04) 12.Management of Working Capital & Expense Analysis MBA (Finance) Table-8. 30.52 0 1.99 1. cost of visa.20% of sales. The department wise distribution of the foreign travel expenses is as followsTable-8.1 ANALYSIS OF TRAVELLING EXPENSES (Rs.00 1.lacs) ITEM TRAVELLING EXP.21 2.07 The service department expenses are very high as compared to others departments.99 2. hotel stay & other travel expenses. The foreign expenses include cost of tickets.31. installation and commissioning of the new machines.51 Travelling expense has increased by Rs.31 0. but as compared to the last year the foreign travel expenses has reduced.7 lac as compared to last year but it has reduced by 0.15 lac (0405).90 1.83 3422.
06 3. 51 .73 17.76 4.Management of Working Capital & Expense Analysis MBA (Finance) Table-9 ANALYSIS OF WARRANTY EXPENSES (Rs.31 1.70lacs was done in 2004-05 and 2003-04 respectively to take care of warranty expenses in next year.61 The company gives one year post sales warranty to Domestic customers.12 1.52 3.71 4.15 1. The Domestic sales in 2002-03 and 2003-04 are Rs.79 1.45 2.17 Total 47.78 2.14 0.3422lacs respectively.68 0. The provision of Rs.86 17.20lacs and Rs. The increase is mainly due to the increase in sales and installation & commissioning.14.42 2003-04 0.2.lacs) MONTHS April May June July August September October November December January February March 2004-05 1.59 0.2559lacs and Rs.69 3.92 0.13 1.82 1.81 3.72 1.75 2 2.
Lacs) 2004-05 IMPORTS 190. Custom duty charged on Nordson units is Rs.31. The custom duty charged on vaccum pumps is Rs. The main reason of increase in custom duty is the increase of imports.13.4. Lacs) ITEMS CUSTOM DUTY TOTAL SALES % AS TO SALES 2004-05 68. It has also increased by 0. The main reason is that. 2. (Rs.32 Lac. 2.94 2003-04 69. 1.29% of sales.04 1.9 Lac on import of Deckel Maho CNC vertical machining. There is also a custom duty of Rs.09 To decrease the expenses on the custom duty it is suggested to decrease the imports and procure the components of the machinery from the domestic manufacturers if possible.54 5035. As our requirements of some of the particular imported components is increasing regularly. There is also a custom duty of Rs. we can develop domestic suppliers for them. there are more imports of sensors during this year as compared to last year.07 Custom duty has increased by Rs.99 1.Management of Working Capital & Expense Analysis MBA (Finance) Table-10 ANALYSIS OF CUSTOM DUTY (Rs. 52 .20 Lac.65 3422. 12.6 Lac on import of 1 Pkg of pressure spring. 89 Lac as compared to last year. Vaccum pumps are also imported more as compared to last year. The custom duty charged on these sensors is Rs.51 Lac on Jekson camera purchased during this year. thus going into the backward integration if possible and feasible. There is a custom duty of Rs.36 2003-04 36.9 Lac.
53 . The overall stationery expenses have increased by Rs.21 0. there are no proper records for the expense of stationery in the particular department.41 0.lacs) MONTHS April May June July August September October November December January February March TOTAL Sales %to sales 2004-05 0.99 0.40 2.94 10.45 0. So.41 2003-04 0 0.Management of Working Capital & Expense Analysis MBA (Finance) Table-11 STATIONERY ANALYSIS (Rs.18 20. But as a percentage of sales it is reducing.71 3422.20 0.85 1.86 lacs.95 lacs.20 0.02 3.4.93 0.52 15.35 1.48 2.27 0.13 0. the department wise records for the issue of stationery are kept only from Jan 2005.66 5035.46 The stationery expenses in the month of June 2004-05 are negative due to the reason that provisions for goods received have been created in that month for Rs.15 0.55 8. In company.14 0.1.47 1.55 1.50 0.64 0.05 -1.
Whenever the stationery will be issued the proper entry should be made of received and required goods with the signature of the head of the respective department. 54 .Management of Working Capital & Expense Analysis MBA (Finance) It is suggested to keep the proper department wise record so that the expenses on stationery can be controlled. The format for keeping the stationery record has been attached. There must be a notebook of this format in each department and the stationery should be issued on the weekly basis instead of monthly basis. The purpose of keeping the Required column in the format is to ease the future assessment of the stationery required in the particular department so that purchases can be made on that basis.
99 3244.21 0. Some of these expenses are payments made to Sun n Sand (Rs.lacs) Item ENTERTAINMENT EXP. These expenses include mainly the payments made to the hotels for the entertainment of the guests visiting to the company for different purposes.32lac for Bintag personnel tour expense for Delhi and Agra) 55 .14 2003-04 1.Management of Working Capital & Expense Analysis MBA (Finance) Table-6.0.01% as a percentage of sales.04 0.3 Entertainment Expenses (Rs.03 The entertainment expenses have increased by . Indonesia). SALES % of sales 2004-05 2.0. Golden Swan Holidays (Rs.3lac for the stay of personnel of Bintag.05 5035.
1 ANALYSIS OF TELEPHONE.65 3422.04 1.05 1.99 1.94 2.lacs) MONTH April May June July August September October November December January February March TOTAL 2004-05 1.42 lacs but as a percentage of sales. Sales % of sales 2004-05 39. it has reduced by 0.14 30.09 1.30 1.07 3.9.35 1.65 1.22 1.lacs) 2003-04 30.55 3. COURIER AND POSTAGE EXPENSES (Rs.79% (Rs.74 0.25 14.99 0.89 5035. 56 .01 15.2 2003-04 0.20 2.89% These expenses have increased as per the previous year by Rs.77 0.08 2.89 39.89 Table-7.21 0.Management of Working Capital & Expense Analysis MBA (Finance) Table-7.1 %.71 1.39 2. courier & post.20 3.08 3.83 2.65 ITEM Tel.
no. for October.49lacs to BPL mobile Cellular ltd. Pune (Tele. 237092 to 237098) Rs. No.0.07 to City Courier for August Major Expenses for January 2005 are: Rs.0. Pune (Tel. December Rs.08lacs for the purchase of new mobile of Mr. Pune (Tele.Management of Working Capital & Expense Analysis MBA (Finance) Major expenses for July 2004 are: Rs. (courier services) for August and November Rs.39lacs to TNT India Ltd.0.25lacs for the bill of Idea of Mr. GVN Prasad Rs.0.1. Pune (Tele. 237451 to 237456) Rs.0. no.0.04lacs to BSNL.0. Rs.09 for the expenses of Mr. 237451 to 237455) Rs.1lacs for the bill of Mr.0. November.45lacs to BSNL. no.P.56lacs to BSNL.38lacs to BSNL. Pune (Tele.08lacs to BPL mobile Rs.0. D. Pune (Tele.L Shetty Rs.0.0. Saxena for the month of July to October Rs.25lacs for the bill of mobiles for the month of June Rs. 237451to 237455) Rs.0.25lacs for the mobile bill of GVN Parsad (9810511696) Rs.0.48lacs to BPL mobile Rs.31lacs incurred on behalf of Associates Capsules Ltd. 237091 to 237098) Rs. 237091 to 237098) Rs. no.0.42lacs paid to Professional couriers for the month of April & May 2004 Major Expenses for November 2004 are: Rs.0.0.75lacs to BSNL.1lac to BSNL. B.0. no. GVN Prasad 57 .
24lacs to TNT courier for February and March The other payments for the outstanding expenses of 2004-05 amounts to Rs. Pune (Tel no. 237091 to 237098) Rs. PUNE (telephone no.5Lacs for the provision for expenses 2003-04 58 .7.42lac (telephone no.12Lacs paid to Surjeet Chukraborty.16Lacs paid to BPL Mobile Cellular. No.0.1. 1lacs to the BSNL.58lacs Details of March 2004: Rs.0.0. Rs.20lacs on behalf of Associates capsules Ltd for January and February Rs. for March Rs.0. Rs.Management of Working Capital & Expense Analysis MBA (Finance) Details of March 2005: Rs.14lacs on behalf of Assocciates Capsules Ltd. February & March.0.0. no. 237091 to 237098) and Rs.37Lacs) Rs.56Lacs paid to BSNL.0. 237451 to 237455) in the month of March.10lac towards the share of Tel. 237451 to 237456) Rs. Another payment of Rs 0. Rs.22Lacs paid to BSNL. (Rs. Ltd. 237451 to 237456) Bills paid for the month of January. 0. Rs.0. & photocopy expense 25% and 10% respectively accounted on behalf of PAM Pharmaceuticals & Allied machinery Pvt.57 lac was made to BPL mobile cellular Ltd. Pune (Tel.18lacs to First Flight couriers for February 2005 Rs0.0.0.55Lacs paid to BSNL.15lacs to city courier service from September to November Rs. Pune (Tel.1.2Lacs incurred by PAM on our behalf. The telephone charges include the payment of Rs.
2 (Rs.25 4.51 TRAVELLING EXP.99 1. 30.90 1.07 The expenses related to the service department is very high as compared to others departments.40 (03-04) to Rs.52 0 1. The increased travelling expense is due to mainly increased foreign travel expense.20% of sales.83 3422.15 lac (0405).lacs) DEPARTMENT SERVICE R&D ASSEMBLY ELECTRONICS MARKETING DESIGN EXPENSE (2004-05) 10.00 1. This is mainly due to the frequent visit of service people for the purpose of after sales services and the installation and commissioning of the new machines etc.lacs) ITEM 2004-05 116.99 2. 59 . 38.13 0 EXPENSE (2003-04) 12. The department wise distribution of the foreign travel expenses is as followsTable-8.1 ANALYSIS OF TRAVELLING EXPENSES (Rs.31.00 0.31 2003-04 85. which has increased from Rs. SALES %OF SALES Travelling expense has increased by Rs.7 lac as compared to last year but it has reduced by 0.53 5035.Management of Working Capital & Expense Analysis MBA (Finance) Table-8.31 0.50 2.21 2.
15 1. The provision of Rs.78 2.79 1.81 3. The increase is mainly due to the increase in sales and installation & commissioning.17 Total 47.31 1.13 1.52 3. 60 .76 4.3422lacs respectively.71 4.14 0. The Domestic sales in 2002-03 and 2003-04 are Rs.73 17.Management of Working Capital & Expense Analysis MBA (Finance) Table-9 ANALYSIS OF WARRANTY EXPENSES (Rs.70lacs was done in 2004-05 and 2003-04 respectively to take care of warranty expenses in next year.12 1.61 The company gives one year post sales warranty to Domestic customers.42 2003-04 0.20lacs and Rs.92 0.2559lacs and Rs.68 0.2.06 3.59 0.75 2 2.14.86 17.72 1.lacs) MONTHS April May June July August September October November December January February March 2004-05 1.69 3.45 2.82 1.
There is a custom duty of Rs. we can develop domestic suppliers for them. It has also increased by 0.54 5035.07 Custom duty has increased by Rs. There is also a custom duty of Rs.65 3422.6 Lac on import of 1 Pkg of pressure spring.20 Lac. Vaccum pumps are also imported more as compared to last year. Lacs) ITEMS CUSTOM DUTY TOTAL SALES % AS TO SALES 2004-05 68. As our requirements of some of the particular imported components is increasing regularly.32 Lac. The custom duty charged on these sensors is Rs.94 2003-04 69. thus going into the backward integration if possible and feasible.36 2003-04 36.9 Lac.9 Lac on import of Deckel Maho CNC vertical machining. there are more imports of sensors during this year as compared to last year. The main reason is that.09 To decrease the expenses on the custom duty it is suggested to decrease the imports and procure the components of the machinery from the domestic manufacturers if possible.13. Custom duty charged on Nordson units is Rs.99 1.51 Lac on Jekson camera purchased during this year. 2.04 1.Management of Working Capital & Expense Analysis MBA (Finance) Table-10 ANALYSIS OF CUSTOM DUTY (Rs.29% of sales. The custom duty charged on vaccum pumps is Rs. 61 .31. 89 Lac as compared to last year. There is also a custom duty of Rs. 2.4.Lacs) 2004-05 IMPORTS 190. 1. 12. The main reason of increase in custom duty is the increase of imports (Rs.
27 0.55 1.4.71 3422. the department wise records for the issue of stationery are kept only from Jan 2005.94 10.41 2003-04 0 0. 62 .66 5035.14 0.50 0.41 0. So.02 3.64 0.93 0.20 0.99 0.21 0. The overall stationery expenses have increased by Rs.95 lacs.46 The stationery expenses in the month of June 2004-05 are negative due to the reason that a provision for goods received have been created in that month for Rs. In company.05 -1.20 0.86 lacs.13 0.45 0. there are no proper records for the expense of stationery in the particular department.lacs) MONTHS April May June July August September October November December January February March TOTAL Sales %to sales 2004-05 0.1.18 20. But as a percentage of sales it is reducing.52 15.55 8.47 1.40 2.48 2.35 1.Management of Working Capital & Expense Analysis MBA (Finance) Table-11 STATIONERY ANALYSIS (Rs.85 1.15 0.
63 . The purpose of keeping the Required column in the format is to ease the future assessment of the stationery required in the particular department so that purchases can be made on that basis.Management of Working Capital & Expense Analysis MBA (Finance) It is suggested to keep the proper department wise record so that the expenses on stationery can be controlled. There must be a notebook of this format in each department and the stationery should be issued on the weekly basis instead of monthly basis. The format for keeping the stationery record has been attached. Whenever the stationery will be issued the proper entry should be made of received and required goods with the signature of the head of the respective department.
Management of Working Capital & Expense Analysis MBA (Finance) METHODOLOGY 64 .
These points are further analyzed in details and rearranged according to the requirements. it has been analyzed to find out the points to be worked on. so that the required results can be obtained The suggestions of different departments especially the finance department personnals are taken to get the correct information.Management of Working Capital & Expense Analysis MBA (Finance) Methodology The first step is to collect the data from various sources like Tally Monthly performance review meetings (MPRM) Reports Annual Reports Computerized Inventory Management system (CIMS) After the collection of data. 65 .
Management of Working Capital & Expense Analysis MBA (Finance) SUGGESTIONS & RECOMMENDATIONS 66 .
67 . The expenses on sales promotion should be controlled and more emphasis should be given on the advertisement as it has more reach than any other sales promotional tool. Thus reducing the investment in the receivables. As we are the market leaders in our products and the number of competitors is also very low. The expenses of stationary can also be controlled by applying the rule of recording the stationery requirement in the provided format We should try to develop domestic suppliers for the goods we are importing so that the expense on custom duty can be reduced. Reducing stock and increase in the average payment period can help this up to some extent.Management of Working Capital & Expense Analysis MBA (Finance) Suggestions & Recommendations More than 50% of the shareholders fund is invested in working capital of the company we must try to reduce it. we can ask for the full advance payment for domestic sales also.
Management of Working Capital & Expense Analysis MBA (Finance) LIMITATIONS 68 .
But we have to work irrespective of these limitations and find our way. so as ours. which leads to difference in the information of annual reports and monthly statements. so that we can achieve the required aim. we face the limitation of extracting that particular data because our access is limited for the sake of confidential information of the company. Some of the limitations of our project are: - As our project is based on the data recorded by the company. 69 . as it is very difficult to identify which item is clubbed with which head. But thanks to accounts personal who made it easy to understand these clubbing.Management of Working Capital & Expense Analysis MBA (Finance) Limitations Every project has its own limitations. Another limitation is the un-audited MPRM statements. The grouping of different items in the balance sheet also created hindrances for us.
Management of Working Capital & Expense Analysis MBA (Finance) Bibliography 70 .
Management of Working Capital & Expense Analysis MBA (Finance) Bibliography Tally System CIMS MPRM Reports Annual Reports 71 .
55 264.20 448. 976.01 187.18 51.28 87.12 1346.23 710.42 68.48 22.07 889.15 445.80 89.03 522.10 19.24 60. 619.75 560.40 492. 72 .94 1309.05 1145.34 716.60 134.42 338.27 Cash & Bank c 71.41 1474. 1306.03 768.05 1145.03 522.56 300. 817.79 71.27 Cash & Bank c 71.98 86.12 1346.17 266.46 28.00 492.80 313.79 1555.60 207.60 358.00 649.86 522.77 661.75 560.74 Other assets d 161.82 124. 511.55 115.20 1609.79 71.29 698.13 645.99 630.28 87.92 167.07 553.56 300.13 275. 458.01 187.48 22. 1083.09 2390.18 51.72 S.01 477.39 497.44 S.22 110.84 290.93 1537.19 531.00 268.54 210.80 537.99 630.78 110.29 698.98 86.44 S.04 86.13 645.12 438.23 530.12 404.47 Provisions h 44.40 492.43 60.12 18.22 245.44 224.88 269.60 207.43 60.07 553.78 110.20 507.22 110.20 1609.62 1333.92 167.72 161.47 22.82 554.57 14.64 491.84 290.42 68.Management of Working Capital & Expense Analysis MBA (Finance) Table-2 Schedule of Changes in Working Capital 2002-03 Current Assets MONTHS Inventories a 370.63 101.12 404.04 86.50 495.57 14.20 Current Liabilities Advances &other liabilities g 66.28 607. 889.03 768.54 1799.77 661.91 198.01 477.82 124.54 210.79 1555. 828.72 161.10 19.64 491.60 Tota i =f+g 386.63 101.19 531.50 495.21 474.creditors f 275.74 Other assets d 161.17 266.12 18.42 338.27 1537.88 658.09 2390.44 224.86 522.20 Current Liabilities Advances &other liabilities g 66.71 Total e =(a+b+c+d) 1278.54 1799.40 179.21 474.91 198.20 224.28 607.88 658.47 22.70 699.00 649.62 1333.94 1309.40 403. 1005.39 497.24 60.82 554.34 716.82 657.93 1537.55 264.92 55.41 1474.23 710.92 55.12 438.22 245.71 Total e =(a+b+c+d) 1278.82 657.46 1523.27 1537. Debtors b 675.13 275.70 699. Debtors b 675.46 28. 1097.72 S.23 530.47 P April May June July August September October November December January February March Table-2 Schedule of Changes in Working Capital 2002-03 Current Assets MONTHS April May June July August September October November December January February March Inventories a 370.88 269.15 445.55 115.07 889.46 1523.20 507.creditors f 275.
43 24.49 108.44 1658.26 52.03 2444.85 1602.66 10.00 1022.40 2497.11 0.12 1.83 2619.47 53.36 144.32 33.03 75.06 84.59 0.00 305.21 48.06 5.25 2.lacs) (Rs.53 2.70 32.91 2.88 73 .34 7.67 5.66 48.61 80.79 52.63 267.22 135.lacs) 2004-05 SALES DOMESTIC SALES EXPORTS less-central excise duty less-central sales tax less-maharastra sales tax NET SALES OPERATING INCOMES INCOME FROM SERVICES SCRAP SALES OTHER INCOMES TOTAL OPERATING INCOME VARIABLE COST MATERIAL CONSUMED OPENING STOCK ADD-PURCHASE LESS-CLOSING STOCK LESS-CENVAT CREDIT AVAILED LESS-SALE TAX SET OFF AVAILED Add-INCREASE /DECREASE IN STOCK 352.54 0.62 5036.30 3422.82 0.00 63.00 29.45 45.21 % to Sales 82.06 100.19 1904.09 1.30 3.84 7.01 1.23 29.58 687.66 4.85 204.84 14.26 4.Management of Working Capital & Expense Analysis MBA (Finance) Table-3 ANALYSIS OF EXPENSE UPTO CONTRIBUTION LEVEL (Rs.54 STORES & SPARES CONSUMED TOTAL MATERIAL CONSUMED POWER &FUEL REPAIRS & MAINTENANCE TOTAL VARIABLE COST CONTRIBUTION P/V Ratio (contribution/sales)*100 61.11 40.86 22.76 10.90 46.88 1.77 0.71 100.91 35.59 38.03 0.89 530.69 55.99 0.51 263.97 1.30 1.88 0.62 1843.78 352.60 52.84 53.49 3190.36 13.00 4114.97 0.01 30.16 3.90 % to Sales 81.86 1.86 8.15 53.24 1649.47 0.19 81.00 200304 2814.29 49.
83 10.29 2.64 4.02 371.55 8.89 9.15 10.14 32.17 0.64 310.94 35.53 46.04 0.08 -0.61 80.67 51.67 14.40 388.18 1100.86 64.66 839.35 1.82 122.99 3422.01 0.02 101.89 145.42 1.67 Tbl.74 1.95 1022.43 0.43 1614.00 0.52 3.75 2444.98 -8.Lacs) EXPENSES NET SALES(A) DOMESTIC SALES EXPORTS 200405 5035.78 337.85 14.69 11.87 35. NON OPERATING INCOMES other non-operating incomes FIXED COST Personnel expenses salaries wages.00 8.23 1.09 29.05 0.65 0.77 4.13 29.94 0.91 0.81 3.84 -5.88 775.48 1804.38 REMARKS TOTAL OTHER INCOMES INCOME FROM SERVICES OTHER INCOMES TOTAL OPERATING INCOMES 81.32 33.00 0.87 (+/-) 1613.31 0.02 0.24 96.48 0.29 -0.87 275.60 0.60 48.09 1.67 39. allowance & bonus provident fund &family pension fund superannuation fund gratuity fund employees welfare expense 47.24 3.85 16.90 0.08 1.03 0.11 0.02 0.63 1602.03 2.03 0.54 0.00 67.90 9.53 0.02 30.99 26.23 6.90 1.68 30.14 1.00 Tabl Tabl Selling & distribution expenses 436.57 1613.32 6.25 35.40 49.29 1658.30 8.59 1.66 53.19 21.09 0.57 83.50 38.01 -1.90 Administration expenses insurance rent rate & taxes vehicle expenses legal & professional charges printing & stationery auditor remuneration postage telegram &telephone director's commission donation software expenses capital goods purchased general expenses 726.08 8.40 7.11 0.42 0.Management of Working Capital & Expense Analysis MBA (Finance) STATEMENT OF EXPENSES 2003-04 TO 2004-05 (Rs.28 360.42 as a %of sales 100.90 0.95 0.79 1.40 5.78 0.04 2400.87 225.08 0.30 704.99 3502.26 1.43 10.35 0.33 52.69 397.38 2.93 0.69 65.61 0.60 4.42 5117.74 74 .02 39.56 100.86 1.90 0.82 0.18 4.48 15.59 6.76 20.18 39.01 0.44 48.71 19.36 1.89 96.04 as a % of sales 100.20 20.01 1843.77 0.05 1.99 0.18 7.12 842.87 22.78 125.55 1.23 1.79 VARIABLE COST MATERIAL CONSUMED POWER &FUEL REPAIR & MAINTENANCE 2497.04 200304 3422.11 5.35 512.80 21.11 0.00 1022.57 591. CONTRIBUTION 2619.04 Tbl.00 9.23 0.74 0.71 -0.26 44.00 70.89 102.48 47.07 151.45 0.86 0.47 46.96 32.
66 -4.61 3.11 0.12 1.75 55.66 61.48 14.10 3.51 0.00 2.95 0.00 0.22 0.49 1.47 0.48 2.46 0.78 102.70 782.08 141.53 47.53 29.53 0.30 38.00 16.51 0.91 5.73 5.90 Tabl Tabl Research & development expenses Interest & bank charges Depericiation Exchange loss profit for the year 23.56 75 .83 85.94 30.11 0.55 22.00 0.82 2.83 17.63 0.59 1.91 2.53 12.13 71.84 0.Management of Working Capital & Expense Analysis commission on sales packing & forwarding charges travelling expenses warranty expenses bad-debts written off provision for doubtful debts 125.75 -28.78 28.91 23.70 30.28 17.82 18.77 116.24 862.00 MBA (Finance) 2.31 0.46 79.87 53.
05 19.8 0.02 1.07 0.13 40.03 0 7.85 0.3 3.21 0.86 100.46 1.02 0. meeting & training water charges gardening expense excise duty expense ISO certification expense Paisa round off Liquidated damages sundary advances written off subscription books & periodicals subscription books& periodicals TOTAL 2004-05 7.97 0.77 1.01 0.96 5.03 1.51 0 0.Management of Working Capital & Expense Analysis MBA (Finance) General Expenses ITEMS Security expenses Sales promotion advertisement sales promotion expense entertainment expense exhibition expense Misclaneous expense Tender fees Recruitment charges filling fees Loss on sale of fixed assets house keeping expense seminar.01 REMARKS Tabl Tabl Tabl Tabl Tabl Tabl Tabl 76 .74 2003-04 7.03 8.11 0.5 65.11 1.71 2.97 6.36 3.52 3.93 0.84 0.1 0.01 0 0 0.29 24.14 2.34 0.42 0.68 3.42 5.2 0.02 2.
81 -0.07 1710.45 258.72 70. As the year proceeds the material consumption goes on decreasing as a percentage of sales in 2004-05 The overall material consumption has increased in the current year leading to decrease in material consumption.66 146.17 1237.86 1478.45 418.21 %to sales -193.74 2616.27 3176.49 549.89 -28.Management of Working Capital & Expense Analysis MBA (Finance) Table-5 Analysis of material consumption 2004-05 Material consumed 140.07 477.92 155.68 1465.23 1602.99 %to sales 837.03 46.54 1725.26 62.89 1544.06 -0.57 1219.37 48.4 2042.81 97.32 2003-04 Sales 14.82 April May June July August September October November December January February March All figures are in Rs.90 250.56 60.67 38.47 3861.86 850.52 2277.54 Material consumed -28.04 105.lacs The material consumption( % to Sales) is more in the month of April in 2004-05.26 57.90 5035.27 803.51 1175.88 67.21 30.48 63.67 909.42 46.82 567.26 1186.88 1962.51 1233.79 3604.43 679.57 46.03 2048.6 321. The closing stock at the end of the year has also been doubled in this year as compared to the previous year Notes Material consumed are the figures taken from MPRM report The figures of Sales and Material consumed are the cummulative figures 77 .78 129.86 2375.26 2304.4 2419.36 825.50 48.04 2444.93 64.02 65.54 -19.5 Sales 16.83 685.07 3422.03 44.20 61.85 366.6 325.
2nd WEAK REQ. TOTAL REC. PLAIN DELUX PAPER 10*12*1 10*12*2 78 . REC. 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 1 2 3 4 5 6 7 8 9 10 11 1 2 3 1 2 3 4 5 FILES BOX FILES FLAT FILES FLAT FILES WITH SPRINGS PLASTIC FILE DIAMOND MAKER FILE PIANO FILE HANGING FILE PLASTIC FOLDER P. 4th WEAK REQ. REC. 3rd WEAK REQ.F U-TYPE REGISTERS 2-QUIRE 3-QUIRE 4 -QUIRE 5 -QUIRE 6 -QUIRE 10-QUIRE PAPERS TRACING PAPER 340*240 460*330 635*450 330*450 TRANSPARENT A4 SIZE SHEET RIGID OPAEQUE A4 SHEET XEROX PAPER A4 SIZE XEROX PAPER A3 SIZE LEAFLET PAPER(140H*200W) GERM.F L-TYPE P. REC. ITEMS Ist WEAK REQ.NO.____________ STATIONARY RECORDS for the month of_________ S.Management of Working Capital & Expense Analysis MBA (Finance) DEPTT. HP CARTRIDGE 51646A BLACK HP CARTRIDGE 51646ACOL. ALBESTER PAPER A4 SIZE CARBON PAPER DOUBLE SIDE CARBON PENCIL CARBON BLACK CARBON COMPUTER STATIONARY HP CARTRIDGE 51641A BLACK HP CARTRIDGE 51641A COL. REC.
Management of Working Capital & Expense Analysis MBA (Finance) 6 7 8 1 2 1 2 3 4 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 10*12*3 10*12*4 15*12*1 15*12*2 15*12*3 15*12*4 MOUSE PAD FLOPPY BOX REWRITABLE CD PUNCH SMALL BIG STAPLER SMALL MEDIUM BIG PINS WRITING MATERIAL PENCIL PEN ERASER SHARPENER HIGHLIGHTERS SKETCH PEN KOREX EROZ-X MARKER JAMBO MARKER WHITENER PEN CLUTCH PENCIL ROTRING PEN SCRIBLING PAD SMALL BIG SPIRAL PAD OTHERS U-CLIP V-CLIP SDI BINDER 32MM 25MM 14MM GLUE STICK PAPER PINS DRAWING BOARD PINS SEPRATORS PAPER WEIGHTS STAMP PAD BIG FAX ROLL OH SHEET TELEPHONE DIARY VISTING CARD HOLDER CHEQUE STICKERS 79 .
Management of Working Capital & Expense Analysis MBA (Finance) SIGN OF HOD 80 .
Management of Working Capital & Expense Analysis
MONTHS April May June July August September October November December January February March
Creditors(Rs.Lacs) 20022003200403 04 05 4.80 1.34 5.80 10.13 45.02 246.31 68.32 83.32 170.24 60.58 114.53 220.36 173.57 92.94 290.58 183.81 106.56 226.47 134.77 52.09 304.49 145.41 145.78 179.52 167.96 145.42 324.29 192.00 282.03 313.07 138.63 229.17 259.46 343.59 879.59 1140.06
Statement of Creditor Analysis Annualised Purchases(Rs.lacs) Creditors turnover Ratio 20022003200420022003200403 04 05 03 04 05 1144.64 1373.81 1808.71 238.47 1025.23 311.85 1140.01 1318.67 1761.18 112.54 29.29 7.15 1150.13 1309.38 1935.85 16.83 15.72 11.37 1174.69 1301.08 1949.56 19.39 11.36 8.85 1208.38 1284.54 1990.52 6.96 13.82 6.85 1231.57 1297.01 2047.12 6.70 12.17 9.04 1415.08 1173.30 2882.99 10.50 22.52 9.47 1306.38 1263.65 2620.09 8.98 8.67 14.59 1363.86 1809.39 3000.45 8.12 12.44 9.25 1467.00 1709.43 3050.07 7.64 6.06 9.74 1401.92 1690.93 2996.31 10.11 7.38 11.55 1472.12 1838.05 3092.12 4.28 2.09 2.71
Average P 200203 2 3 22 19 52 54 35 41 45 48 36 85
(Ref.Table- 13.1, 13.2, 13.3
Table-10A Statement of Debtor Analysis (Domestic)
MONTHS April May June July August September October November December January February March
Debtors (Rs. Lacs) 2002-03 2003-04 2004-05 571.91 561.80 648.59 489.24 469.32 584.89 505.20 460.71 629.18 475.02 372.77 856.37 475.57 366.88 770.90 511.46 389.65 871.95 406.63 446.05 875.03 400.50 425.61 785.10 398.84 399.48 672.45 352.03 467.99 514.49 452.91 518.58 564.39 794.15 881.63 959.77
Annualised Sales(Rs. Lacs) 2002-03 2003-04 2004-05 1647.31 1846.11 2434.80 1578.86 1758.00 2327.63 1557.22 1823.68 2387.41 1592.33 1744.35 2558.84 1594.62 1803.86 2588.50 1627.07 1789.36 2731.32 1425.54 1901.05 3569.48 1319.29 1419.95 3094.23 1362.81 1524.43 2859.31 1128.75 2111.35 3497.98 1520.39 2084.13 3253.20 1984.67 2618.32 4150.70
Debtors turnover Ratio 2002-03 2003-04 2004-05 2.88 3.29 3.75 3.23 3.75 3.98 3.08 3.96 3.79 3.35 4.68 2.99 3.35 4.92 3.36 3.18 4.59 3.13 3.51 4.26 4.08 3.29 3.34 3.94 3.42 3.82 4.25 3.21 4.51 6.80 3.36 4.02 5.76 2.50 2.97 4.32
Ave P 2002-03 127 113 118 109 109 115 104 111 107 114 109 146
(Ref.Table- 10.1,10.2, 10
Table-10B Statement of Debtor Analysis (Exports)
Debtors (Rs. Lacs) 2002-03 2003-04 2004-05 103.79 322.62 421.12
Annualised Sales(Rs. Lacs) 2002-03 2003-04 2004-05 661.15 832.37 1123.86
Debtors turnover Ratio 2002-03 2003-04 2004-05 6.37 2.58 2.67
Ave P 2002-03 57
Management of Working Capital & Expense Analysis
May June July August September October November December January February March
64.53 156.62 79.26 132.18 147.04 88.76 96.73 131.80 139.10 192.14 351.12
257.55 259.45 212.22 213.46 239.82 274.61 352.01 398.87 301.95 271.17 459.57
325.64 200.17 189.30 326.52 460.27 339.53 321.47 630.87 691.12 531.56 630.70
626.47 664.80 650.51 657.13 641.10 462.63 440.58 661.74 626.70 726.48 899.86
779.31 763.91 763.68 737.82 776.11 1125.36 1161.66 965.30 710.78 880.78 1217.52
1083.18 1015.32 1002.47 1082.37 1278.16 927.30 1092.10 1923.22 1320.67 1188.47 1613.43
9.71 4.24 8.21 4.97 4.36 5.21 4.55 5.02 4.51 3.78 2.56
3.03 2.94 3.60 3.46 3.24 4.10 3.30 2.42 2.35 3.25 2.65
3.33 5.07 5.30 3.31 2.78 2.73 3.40 3.05 1.91 2.24 2.56
38 86 44 73 84 70 80 73 81 97 142
(Ref.Table- 10.1,10.2, 10
Table-10.1 2002-03 Analysis of Debtors Domestic
MONTH April May June July August September October November December January February March Debtors 571.91 489.24 505.2 475.02 475.57 511.46 406.63 400.5 398.84 352.03 452.91 834.87 Monthly sales 56.13 57.41 104.52 176.58 135.94 181.56 118.9 97.65 108.53 30.51 226.33 690.61 Annualised sales 1,647.31 1,578.86 1,557.22 1,592.33 1,594.62 1,627.07 1,425.54 1,319.29 1,362.81 1,128.75 1,520.39 1,984.67 Debtors Turnover Ratio 2.88 3.23 3.08 3.35 3.35 3.18 3.51 3.29 3.42 3.21 3.36 2.38 avg. collection period 127 113 118 109 109 115 104 111 107 114 109 154 Debtors 103.79 64.53 156.62 79.26 132.18 147.04 88.76 96.73 131.8 139.1 192.14 351.12 Monthl ysales 8.07 14.63 100.12 36.34 63.6 30.71 34.86 30.45 85.74 74.06 123.95 297.33 Annualised sales 661.15 626.47 664.80 650.51 657.13 641.10 462.63 440.58 661.74 626.70 726.48 899.86
Gross domestic sales of the last year
Gross export sales of last year
Debtors in (Rs. Lacs) Monthly Sales in (Rs. Lacs) Annualised Sales (Rs. Lacs) For the calculation of the annualised sales of first Six months = [last year sales + sum o Number of Months Example -: Annualised sales of July = [1728.46 +(56.13+57.41+104.52+176.58)]*12/16
Management of Working Capital & Expense Analysis
For the calculation of the annualised sales of last Six months = (Sum of sales from Apr sales*remaining months Example- : Annualised sale of Novembe (56.13+57.41+104.52+176.58+135.94+ =1319.29 Debtors Turnover ratio = Annualised Sales/ Sundry Debtors Average collection period ( in Days) = 365/D.T.R
Management of Working Capital & Expense Analysis
Table-10.3 2004-05 Analysis of Debtors Domestic
MONTH April May June July August September October November December January February March Debtors 648.59 584.89 629.18 856.37 770.90 871.95 875.03 785.10 672.45 514.49 564.39 959.77 Monthlysales 19.38 77.87 268.69 427.53 255.25 429.94 348.47 253.42 194.69 407.58 285.19 1,182.69 Annualised sales 2,434.80 2,327.63 2,387.41 2,558.84 2,588.50 2,731.32 3,569.48 3,094.23 2,859.31 3,497.98 3,253.20 4,150.70 Debtors TurnoverRatio 3.75 3.98 3.79 2.99 3.36 3.13 4.08 3.94 4.25 6.80 5.76 4.32 avg. collection period 97 92 96 122 109 117 89 93 86 54 63 84 Debtors 421.12 325.64 200.17 189.3 326.52 460.27 339.53 321.47 630.87 691.12 531.56 630.7
Monthlysale 0 46.19 5.44 67.47 196.74 383.88 37.93 70.89 278.67 77.82 11.72 436.68
Gross domestic sales of the last year
Gross export sales of l year
Debtors in (Rs. Lacs) Monthly Sales in (Rs. Lacs) Annualised Sales (Rs. Lacs) For the calculation of the annualised sales of first Six months = [last year sales + sum of sales(Apri Example -: Annualised sales of July = [2618.32+(19.38+77.87+268 =2558.84
For the calculation of the annualised sales of last Six months = (Sum of sales from April to Current Example- : Annualised sale of November = (19.38+77.87+268.69+ = 3094.23 Debtors Turnover ratio = Annualised Sales/ Sundry Debtors Average collection period ( in Days) = 365/D.T.R
Management of Working Capital & Expense Analysis MBA (Finance) 85 .
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