Summer Internship Presentation On Working Capital Project Of Bajaj Hindusthan Ltd.

Presented By: Amit Kumar PG-10-50007

Company Details
Company Name Address : : Bajaj Hindusthan Ltd 2nd Floor, Bajaj Bhawan, Jamnalal Bajaj Marg, B-10 Sector-3, Noida. Head Office (120) 4045555, 2543939 www.bajajhindustan.com Sugar Uttar Pradesh 1000-2500 Cr. 501-1000 Private Sector

Level of Office Phone No Website Industry State Total Turnover No. of Employees Sector

: : : : : : : :

INTRODUCTIO PRODUCT- SUGAR N

Bajaj Hindusthan Ltd. (BHL), a part of the Bajaj Group. India's Number One sugar and ethanol manufacturing company. The Company has ten sugar plants, which are all located in the northern Indian state of (UP). These ten plants have an aggregate sugarcane crushing capacity of 96,000 tcd (tones crushed per day).

WORKING CAPITAL Current assets Current liabilities

It measures how much in liquid assets a company has available to build its business. A short term loan which provides money to buy earning assets. An increase in working capital indicates that the business has either increased current assets (that is received cash, or other current assets) or has decreased current liabilities, for example has paid off some shortterm creditors.

 The fundamental principles of working capital management are reducing the capital employed and improving efficiency in the areas of receivables, inventories, and payables. Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable and cash.

CONSTITUENTS OF WORKING CAPITAL

CURRENT ASSETS
Inventory Sundry Debtors Cash and Bank Balances Loans and advances

CURRENT LIABILITIES
Sundry creditors Short term loans Provisions

Different approaches in determination of working capital

Industry norm approach Economic modeling approach Strategic choice approach

 THIS APPROACH IS BASED ON THE PREMISE THAT EVERY COMPANY IS GUIDED BY THE INDUSTRY PRACTICE. TO ESTIMATE OPTIMUM INVENTORY IS DECIDED WITH THE HELP OF EOQ MODEL THIS APPROACH RECOGNISES THE VARIATIONS IN BUSINESS PRACTICE AND ADVOCATES USE OF STRATEGYIN TAKING WORKING CAPITAL DECISIONS

Every business needs some amount of working capital. It is needed for following purposes For the purchase of raw materials, components and spares. To pay wages and salaries. To incur day to day expenses and overhead costs such as fuel, power, and office expenses etc. To provide credit facilities to customers etc.

Objectives of working capital

Management of working capital

The company has been effective in carrying working capital cycle with low working capital limits. It may also be observed that the PBT in absolute terms has been increasing as a year to year basis.

RECOMMENDATIONS
Company has to take control on cash balance because

cash is non-earning assets and increasing cost of funds. Company needs to control on the increasing of current liabilities & decreasing in the current assets so that it may able to making less expenditures compare to generation of revenues. Company needs to reduce the contribution of cash & bank balances among the current assets, so that resulting company may be able to enhance the opportunity of income.

Why is supply not catching up?

Land for agriculture declining. Continuance of agriculture a major problem. No efforts by Government to improve water table or irrigation. Resistance to change. Crop Switching.