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Submitted in partial fulfillment of the requirements for the Award of degree of Master of Business Administration 2011-2013 SUBMITTED TO: Dr. Ramesh Dalal Ms . Seema SUBMITTED BY: MANISH KUMAR ROLL NO. 25



As an integral of M.B.A., I was required to undergo a project work in the 3rd semester for the partial fulfillment of degree, I would not have been able to complete my project work not the project report, if I had not been assisted at various step by a number of people. I shall be therefore failing in my duty, if I do not extend my heartfelt thanks to these people. This project report has been made possible through the direct and indirect cooperation of the various persons for whom I wish to express my appreciation and gratitude. I am deeply gratitude to MR. Nitin Yadav who was always there to guide me and solve my problems. Without his unfailing guidance, this report could not have been possible. I also extend my gratitude to all my teachers for their valuable suggestion and comments in the project work, I am extremely thankful to my parents & friends for their blessing and last but not least I wish to thanks all those peoples who help me at one stage or other for the successful completing the project.




TOPIC EXECUTIVE SUMMARY INTRODUCTION Significance Of The Problem Focus Of the Problem Objective Of The Study COMPANY PROFILE Introduction



3. 4. 4.

Vision and Mission RESEARCH METHODOLODGY Research Design Data Collection Methods ABOUT THE PROJECT Introduction Need For Working Capital Management of Working Capital Need for Managing Working Capital Ratio Analysis

5. 6. 7. 8. 9. 8.



Working capital (also known as net working capital) is a financial metric which represents the amount of day-by-day operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. It is calculated as current assets minus current liabilities. A company can be endowed with assets and profitability, but short of liquidity, if these assets cannot readily be converted into cash. Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of Working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses. The goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that working capital is maintained at a satisfactory level. The current assets should be large enough to pay the current liabilities in time while not keeping too high level of any one of them. The interaction between current assets and current liabilities, therefore, the main objective of management of working capital.

SIGNIFICANCE OF STUDY Nice Projects Limited is a pioneer in conceiving and executing large sophisticated real estate projects with its arms spread across in the major cities of North India and in the commercial capital of Delhi.

It is useful for the management.

It gives information to the investors about the earning capacity of the business.

Current year's ratios are compared with those of previous years and if some weak spots are thus located remedial measures are taken to correct them.

It gives information to the financial institution for providing the finance to the company. It gives information to the taxation authorities.

It gives information to the researchers for conducting research in respect of profitability, efficiency, financial soundness and growth of that company.

CONCEPTS OF WORKING CAPITAL There are two concepts of working capital : 1. Gross working capital concept 2. Net working capital concept

GROSS WORKING CAPITAL :- Gross Working Capital refers to the firms investment in current assets. Current Assets are the assets which can be converted into cash within an accounting year and include cash, short-term securities, debtors (accounts receivable), bills receivable and stock (inventory). GROSS WORKING CAPITAL = TOTAL CURRENT ASSETS

NET WORKING CAPITAL :- Net Working Capital refers to the difference between current assets and current liabilities. Current Liabilities are those claims of outsiders which are expected to mature for payment within an accounting year and include creditors (accounts payable), bills payable, and outstanding expenses. Net working capital can be positive or negative. A positive net working capital will arise when current assets exceed current liabilities. A negative net working capital occurs when current liabilities are in excess of current assets.


FOCUS OF THE PROBLEM Any type of research study suffers from certain limitation relating to either the research itself or to the topic thought. The degree and nature of the limitation varies with the topic. The present study has been undertaken to analyze the Working Capital being managed in the company and how far it contributes to the overall objective of maximization of shareholders wealth and the organization wealth.


The project entitled Working Capital Management, which was undertaken at Nice Projects Pvt. Ltd. Delhi, is related to study of working capital and its management in the company. The main objectives of the study are:To analysis the working capital requirement. To simplifies and summarizes a long array of accounting data and makes them understandable. To forecasting and preparing the plans for the future. To reveal the trend of costs, sales, profits and other important facts. To establish ideal standards of the different items of the business. To discloses the liquidity, solvency and profitability of business enterprise. To provide useful information to the management.

ABOUT THE COMPANY Established in the year 1988, at Delhi, India, we Nice Projects Private Limited, are a renowned organizations engaged in offering Building & Construction Services to our clients. These encompasses Construction of Residential Complexes, Construction of Warehouse & Allied Buildings, Construction of Plants, Construction of Library Buildings, Hostel Construction andConstruction of Civil Works. Moreover, we also provide assistance to our clients in the form of on-site support regarding any query faced by them. Further,we also provide services for Construction of Research & Development Centre, Construction of Structural & Road Work, Construction of Industrial Plots, Construction of Office & Factory Building, Construction of Laboratory and Construction of Shopping Mall cum Multiplex. Maintaining the highest standards of quality within our services, we are set with the vision of providing the best construction solutions. Company Profile Basic Information Business Type

Service Provider

Ownership & Capital Year of 1988 Establishment Ownership Type Trade & Market Major Markets Team & Staff Total 501 to 1000 People Number of Employees

Private Limited Company

Indian Subcontinent

Our Clients Ranbaxy Laboratories Ltd. India Glycols Ltd. ( IGL ) Jacobs H & G as Consultant. Jubilant Organosys - Pharma Plan Consultant & Acrop Associates Pvt. Ltd. Continental Carbon India Ltd. ( Jacobs H&G as Consultant), A multi-national Company Oriental Carbon & Chemical Ltd. (OCCL)- Goenkas Co. (Simon as consultant) IOCL (At Panipat refinery EIL as Consultant) XPRO India Ltd. ( Birlas Group) Thapers (GRUP India as Consultant). R.K. Marbels Limited (GRUP India as Consultant). Hospital Services Consultancy Corpn. (I) Ltd. (HSCC India Ltd.) Indian Council of Medical Research. (ICMR) HSCC as Consultant. National Academy Of Medical Sciences. (NAMS) HSCC as Consultant. National Institute Of Biological. (NIB) HSCC as Consultant. Central Indian Pharmacopoeia Laboratory (CIPL). HSCC as Consultant. Hamdard University(Suresh Goel & Associates) Lanco Infratech Ltd. (HSCC as Consultant) Eldeco Infrastructure & Properties Ltd (Space Combine) Engineering Projects India Ltd. N.P.C.C Limited. Titan Industries Ltd. Hamdard (Wakf) Laboratories. HBL NIFE Power Systems Ltd. RK & Associates (Consultants) Aquamall Water Solution Ltd. Mott Mac Donald (Consultants) Everest Industries Ltd. Gurukul Kangri Vishwa Vidhyalaya Hero Honda - Arrow Infrastructure Ltd. Gherzi Eastern India Ltd. (Consultant) Jay Pee Greens Arcops Associates (P) Ltd (Consultant) Ansal Housing Construction Ltd. Polyplex Corporation Ltd. Sandwell Consulting Engineers (Consultant) Patanjali Ayurved Ltd., Haridwar Goldfield Shiksha Sanstha SS Group (SS Plaza) Sikka Associates Architecs SS Group (Habiscus Housing) Arcop Associates Pvt. Ltd Easter Industries Ltd. BPTP Ltd.


Why Us? Some of the factors that have made us a preferred choice of our clients are:

Complete Customer Satisfaction Excellence in Quality of Our Services Efficient Knowledge Management Continuous Innovation Flexible to clients requirements Consultation Expertise Well trained and experienced workforce

Backed by talented architects, interior designers and other professionals Projects In Hand We provide construction services for for various projects like industrial construction projects, commercial construction project and building construction projects. Below mentioned are the details of the jobs which are in hand currently: Construction of Dudhmoti Sagar Dairy at Dharuhera Clients : Dudhsagar Dairy, Mehsana District co-operative milk producers`s union ltd. , Mehsana , Gujrat : M/s Kanvinde Chowdhary : Date of start Scheduled Completion Date : 08:12:2010 of : 07:12:2012 Rai &



Residential Complex HIBISCUS Name of Project : Construction of Structural, Finishing & External Development work for Residential Complex "Hibiscus" at sector 50 (Gurgaon) : North Star Apartments Pvt. Ltd. : Architect Date of start Scheduled Date of Completion : Arcop Asscociates Pvt. Ltd. : 05.08.2009 : 04.06.2011



Construction of 300 Flats on 100 Plots Name of Project : Construction of 300 Flats on 100 Plots including Civil, Internal Electrical & Internal Plumbing Work in Parkland Pocket L in Sector 84, Faridabad : BPTP Ltd. : BPTP Ltd. : Date of start Scheduled Date of Completion : 09.10.2009 : 09.04.2012

Clients Architect

Major Projects completed

Sl. Description No. of work 1

Year of Name of Completion Client/Arch. M.J. Logistics Services Ltd

Construction 2009 of Ware House & Allied buildings at Palwal.

Construction 2008 HBL NIFE of Office & Power Factory Systems Ltd. Building of HBL House at Plot No. 425, sector-8, IMT, Manesar, Haryana Biotical/Pharmaceutical/Hospital Projects

Sl. Description of No. work 1

Year of Name of Completion Client/Arch. Jubilant Organosys Ltd.

Construction of R 2009 & D Centre for Pharmaceuticals, Greater Noida (Double basement + 6 storey Towers Construction of 2009 St. Stephens Dispensary at DLF Phase III, Gurgaon

DLF Qutab Enclave Educational Charitable Trust

Institutional/Office/Residential Projects Sl. Description Year of Name of No. of work Completion Client/Arch. 1 Construction 2009 of Belvedere School at Cyber City, Gurgaon Construction 2009 of High School & Primary School at DLF Phase I DLF Qutab Enclave Educational Charitable Trust DLF Qutab Enclave Educational Charitable Trust


Research methodology is a way to systematically solve the research problem. In it, step-by-step methods are followed to solve a particular problem. It refers to a search for knowledge. It can also be defined as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. Redman & Mory defines research as systematized effort to gain new knowledge. RESEACH DESIGNS: Research Design is the way in which the research is carried out. It works as a blue print. Research Design is the arrangement of conditions for the collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. Descriptive & Diagnostic Research Design: In Descriptive Research Design, those studies are taken which are concerned with describing the characteristics of a particular individual or a group. This report also based on descriptive research design .


DATA COLLECTION SECONDARY DATA: Secondary data are indispensable for most organizational research. Secondary data refer to information gathered by someone other than the researcher conducting the current study. In this project, secondary data has been collected from following sources: Annual Report Books Other material and report published by the company

This project based on the secondary data .



INTRODUCTION Working Capital is the amount of funds which a company must have, to finance its day to day operations. It can also be regarded as the proportion of companys total capital which is employed in short term operations.

MAIN ASPECTS OF WORKING CAPITAL MANAGEMENT: 1. To determine the optimum quantum of investment in working capital. 2. To determine the composition or structure of current assets. 3. To maintain a proper balance between liquidity and profitability. 4. To determine the policy or means of finance for current assets. OPERATING CYCLE


Debtors & Bills Receivables

Raw Materials

Finished Goods



Because of the time involved in an operating cycle, there is a need of working capital in the form of current assets. Firms have to keep adequate stock of raw materials to avoid risk of nonavailability of raw materials. Similarly, concerns must have adequate stock of finished goods to meet the demand in market on continuous basis and to avoid being out of stock. Concerns also have to sell finished goods on credit due to competition which necessitates the money tied up in debtors and bills receivables. In addition to all these, concerns have to necessarily keep cash to pay the manufacturing expenses etc. and to meet the contingencies. NEED OF MANAGING THE WORKING CAPITAL Different industries have different optimum working capital profiles, reflecting their methods of doing business and what they are selling. Businesses with a lot of cash sales and few credit sales should have minimal trade debtors. Supermarkets are good examples of such businesses; Businesses that exist to trade in completed products will only have finished goods in stock. Compare this with manufacturers who will also have to maintain stocks of raw materials and work-in-progress. Some finished goods, notably foodstuffs, have to be sold within a limited period because of their perishable nature. Larger companies may be able to use their bargaining strength as customers to obtain more favorable, extended credit terms from suppliers. By contrast, smaller companies, particularly those that have recently started trading (and do not have a track record of credit worthiness) may be required to pay their suppliers immediately. Some businesses will receive their monies at certain times of the year, although they may incur expenses throughout the year at a fairly consistent level. This is often known as seasonality of cash flow. For example, travel agents have peak sales in the weeks immediately following Christmas.


Forecast/Estimate of Working Capital Requirement:Working capital is the life-blood and controlling nerve of a business. No business can be successfully run without an adequate amount of working capital. To avoid the shortage of working capital at once, an estimate of working capital requirement should be made in advance so that arrangements can be made to procure adequate working capital. But estimation of working capital requirements is not an easy task and a large number of factors have to be considered before starting this exercise. For manufacturing organization, the following factors have to be taking in to consideration while making am estimate of working capital requirements:

Factors requiring consideration while estimating working capital 1 Total costs incurred on material, wages and overheads. 2 The length of time for which raw materials are to remain in stores before they issued for 3 4 5 6 7 8 9 production. The length of the production cycle or work-in-progress, i.e., the time taken for conversion of raw material in to finished goods. The length of sales cycle during which finished goods are to be kept waiting for sales. The average period of credit allowed to customers. The amount of cash required to pay day-to-day expenses of the business. The average amount of cash required to make advance payment, if any. The average credit period expected to be allowed by suppliers. Time lag in the payment of wages and other expenses.

From the total amount blocked in current assets estimated on the basis of the first seven items given above, the total of the current liabilities, i.e., the last two items, is deducted to find out the requirements of working capital.



The tools and techniques of financial ratio are employed for the analysis and interpretation of financial and operational data connected with working capital management. The following ratios have been used:1) Current Ratio :- This ratio explains the relationship between Current Assets and Current Liabilities of a business.

Current Ratio = Current Assets / Current Liabilities

This ratio is used to access the firms ability to meet its short term liability on time. According to accounting principle, the significant current ratio is supposed to be 2:1. It means that the current assets of a business should, at least, be twice of its current liabilities. If the current ratio is less than 2:1, it indicates lack of liquidity and shortage of working capital. A much higher ratio indicates the poor investment policy of the management.

2) Liquidity ratio :- Liquidity ratio indicates that the firm is in a position to pay its current liabilities with in a month or immediately.

Liquidity Ratio = Liquid Assets / Current Liability

All Current Assets except inventory and prepaid expenses are included in the Liquid Assets. An Ideal Quick Ratio is said to be 1:1. If it is more, it is considered to be better. The ideal is that for every rupee of current liabilities, there should at least be one rupee of liquid assets. This ratio is a better touched of short term financing position of the company. Stock is not included in the liquid assets as it may take a lot of time before it is converted into cash. A much higher ratio then 1:1 may indicates the poor receivable policy o the company. This shows that there is more working capital than required.


3) Inventory Turnover Ratio :- This ratio indicates the relationship between the cost of goods sold during the year and stock kept during the year.

Inventory Turnover Ratio = Cost of Goods Sold / Inventory

This ratio indicates whether stock has been efficiently used or not. It shows the peed with which stock is rotated into sales number of times the stock is turn into sales during the year. The higher the ratio, better it is, since it indicates that stock is selling quickly. A low stock turnover indicates that stock does not sold quickly and remains in lying in the warehouse for quite a long time. This results in increasing storage cost, blocking of funds and losses on account of goods becoming obsolete and unsaleable. By comparing the stock turnover ratio of current year with the previous year the management can accessed whether stock has been more efficiently used or not. 4) Debtor Turnover Ratio :- This ratio indicates the relationship between credit sales and debtors during the year.

Debtors Turnover Ratio = Net Credit Sales / Average Debtors

This ratio indicates the speed with which the amount is collected from debtors. The higher the ratio, the better it is, since it indicates that amount from debtors is being collected more quickly and the risk from bad debts is less. A lower Debtor Turnover Ratio indicates the inefficient credit sale policy of the management. It is difficult to set up a standard for this ratio. By comparing the debtors turnover ratio of current year with that of previous it may be accessed, whether the sales policy of management is efficient or not. 5) Average Collection Period :- This ratio indicates the time within which the amount is collected from debtors and bills receivables. The formulae to compute this ratio is as follows:

Average Collection Period = Average Debtors / Sales * 365

Increase in this ratio indicates the excessive blockage of funds with debtors, which increases the chances of bad debts. So, a higher collection period indicates the inefficiency and negligence on the part of manager. On the other hand, if there is a decrease in debt collection period, that indicates prompt payment by debtors, which reduces the chances of bad debts. If a higher debt collection period then there is need of more working capital to deal with day to day operations of a company. 6) Cash Turnover Ratio :- This ratio indicates the relationship between the net sales during the year and the cash and bank balances during the year.

Cash Turnover Ratio = Net Sales / Cash & Bank Balances

This ratio indicates whether cash has been efficiently used or not. It shows the speed with which the cash is rotating the sales. The higher the ratio, the better it is, since it indicates that cash is used efficiently. If the cash is used efficiently, then it shows that the working capital is efficient for dealing with day to day operations of the company. By comparing cash turnover ratio of current year with that of previous years the management can accessed whether cash has been more efficiently used or not. 7) Working Capital Turnover Ratio :- This ratio indicates the relationship between the net sales during the year and net working capital of the year.

Working Capital Turnover Ratio = Net Sales / Net Working Capital

This ratio reveals how efficiently the working capital of a company is being utilized. A higher working capital turnover ratio shows efficient use of working capital. But a very high turnover ratio is also dangerous for the company, as it is a sign of over-trading, i.e. doing business with too

little working capital. It is an indicator of shortage of working capital. On the other hand a very low turnover ratio of working capital may be a sign of under-trading in composition of working capital.



31/03/2007 31/03/2008 31/03/2009 Last Year Last Year Actuals (As Actuals (As Current per Audited per Audited Year's Accounts) Rs. crore [1] 1 2 Total Current Assets (34 in Form III) Other Current Liabilities (Other than Bank Borrowings) (Item 2 to 9 of Form III) Working Capital Gap (WCG) (1-2) Min. stipulated Net Working Capital (i.e. 25% of total Current Assets other than Export Receivables) (as at 28(ii) in Form III) 5 12.67 21.06 19.54 32.81 49.28 50.68 35.36 Accounts) Rs. crore [2] 84.25 39.72 Crore [3] 131.23 31.95

31/03/2010 Following Year's Rs. Crore [4] 181.40 43.96

Estimates Rs. Projections

3 4





22.13 19.55

Actuals / Projected Net Working Capital 7.58 (Item No. 45 in Form III)

6 7 8

Item 3 minus Item 4 Item 3 minus Item 5

2.65 7.74

23.47 24.99 23.47

66.47 50.00 50.00

115.31 117.89 115.31

Maximum Permissible Bank Finance (Item 2.65 6 or 7, whichever is lower)

Excess Borrowings, if any





1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

INTERPRETATION As Per the Maximum Permissible Bank Finance Statement of the Company. The Company Has The Bank Finance Of Rs.2.65 Crores For The Year 2007 And That For The Year 2008 Is Rs.23.75 Crores. And Hence I Have Calculated The Bank Finance Of Rs.50 Crores For The Next Proceeding Year By Estimating The Current Assets And Current Liabilities For The Year 2009.


Current Ratio = Current Assets / Current Liabilities Ideal Current Ratio = 2:1 Current Assets Years 2006-07 2007-08 2008-09 2009-10 ( in crores) 50.68 84.25 131.23 181.40 Current Liabilities (in crores) 35.36 39.72 31.95 43.96
Current Ratio 2 1.5 Amount 1 Current Ratio 0.5 0

Current Ratio 1.18 1.30 1.60 1.93

2006-07 2007-08 2008-09 2009-10 Years

INTERPRETATION The graph shows an increase in the current ratio year after year, which shows that the company is improving its capabilities. But still it has not the ideal current ratio and there is still the need of more working capital to deal with the daily operations of the company.

LIQUIDITY RATIO Liquid Ratio = Liquid Assets / Current Liabilities


Ideal Ratio = 1:1

Years 2006-07 2007-08 2008-09 2009-10

Liquid Assets 29.34 52.06 70.29 95.46

Current Liabilities 35.36 39.72 31.95 43.96

Liquid Ratio

Liquid Ratio 0.82 1.31 2.20 2.17

2.5 2 1.5 Amount 1 0.5 0 2006-07 2007-08 2008-09 Years 2009-10 Liquid Ratio

INTERPRETATION The graph shows that there is a continuous increase in ratio from last 4 years. This indicates the blockage of funds in the form of debtors. So, there is a need of more working capital to deal with the daily operations of the company.



Working Capital Turnover Ratio = Net Sales / Net Working Capital

Years 2006-07 2007-08 2008-09 2009-10

Net Sales 72.8 113.4 250 350

Net Working Capital 7.58 19.54 49.28 87.44

Working Capital T.O.R.

Working Capital T.O.R. 9.60 5.80 5.07 4.00

10 8 Amount 6 4 2 0 200607 200708 200809 200910 Working Capital T.O.R.


INTERPRETATION Th e a b o v e g r a p h s h o w s t h a t t h e c o m p a n y i s a n e f f i c i e n t u s e r o f w o r k i n g capital in generating sales. So there is less working capital is required to dealing with day to day operations of company.



Overdraft Arrangements: Under the arrangement with the bank, certain facilities are available to the borrower to overdraw his current account with a bank up to stipulated limit. Within this limit any number of drawings is permitted. Repayment can be made when ever desired during the period. The interest liability of the borrower is determined on the basis of actual amount utilized. Cash Credit Arrangement: Under this arrangement credit is operated in the same way as overdraft with the only added facility that the amount is credited to the current account of the borrower in full and the interest is payable for the amount utilized on the same rates of overdraft arrangement and additional commitment charges of 1% to 2% paid to the bank for the unutilized amount. WORKING CAPITAL CONTROL AND PERFORMANCE EVALUATION CREDIT CONTROL: Trade Credit is treated as the soul of business and an essential tool. Trade Credit creates book debts known as receivables. These debts involve an element of risk based on economic value and needs an experts control. Percentage of Receivables = Receivables / Current assets Table showing percentage of receivables to Current Assets in NICE PROJECTS PVT. LTD. Receivables to current Years 2006-07 2007-08 2008-09 2009-10 Accounts receivables 29.01 30.00 61.64 86.30 Current assets 50.68 84.25 131.23 181.40 assets 0.57 0.36 0.47 0.48


Receivables to current assets 0.6 0.5 0.4 Amount 0.3 0.2 0.1 0 2006-07 2007-08 2008-09 2009-10 Years Receivables to current assets

INTERPRETATION Total receivable are about less than the half of total current assets. This shows that debtors are important and second most portions of current assets. Hence, it demands a great need for effective management and control of trade debtors.

PROFITS OF NI CE PROJECTS PVT. LTD. Year 2003-04 2004-05 2005-06 2006-07 Amount (Rs.) 5932971.84 4582034.67 13590819.32 18090402.78
Amount (Rs.)

20000000 15000000 Amount 10000000 Amount (Rs.) 5000000 0







In Nice Projects Pvt. Ltd. company has the profit for the year 2003 is to Rs.5932971.84 and for the year 2004 the profit of the company is to RS. 4582034.67. And the profit for the year 2005 is to Rs.13590819.32 and the profit for the year 2006 is to Rs.18090402.78. So That, The Profit Of The Company Is Increasing Year by Year.

ANALYSIS OF BALANCE SHEET 31/03/2007 31/03/2008 31/03/2009 Last Years Last Years Actuals accounts) Rs. Crore [1] LIABILITIES CURRENT LIABILITIES

31/03/2010 Following Year's Crore [4]

(as Actuals (as per Current Year's Crore [3] accounts) crore [2]

per audited audited

Rs. Estimates Rs. Projection Rs.

Short Term Borrowings From 1 Banks ( i ) From Application Bank ( ii ) From Other Banks ( iii ) (of which BP & BD) Sub Total (A) Short Term Borrowings From 2 3 Others Sundry Creditors (Trade) Advance Customers/ 4 Dealers Provision 5 6 for Taxation (i/c 1.55 2.34 2.6 2.8 Payments deposits From From 21.45 0.58 1.53 3 10.55 (77 days) 32.64 (122 days) 23.54 (15 days) 33.25 -7.74 7.74 25 -25 50 -50 50


Deferred tax) Dividend Payable Other Statutory Liabilities

Expenses Payable (due within 1 7 year) Deposits/ Installments of Term Loans / DPG's / Debentures etc. 8 (due within 1 year) Other Current Liabilities and Provision (due within 1 year) 9 (Specify major items) Sub Total (B) (2 to 9) 10 Total Current Liabilities (Total of 1 to 9) TERM LIABILITIES





1.56 35.36 43.1

3.52 39.71 64.71

3.72 31.95 81.95

4.2 43.96 93.96

Debenture (not maturing within 1 11 12 year) -Preference Shares -(Redeemable after 1 year) Term Loans (excluding installments due within a year) Deferred (excluding 14 15 within a year) Payment installments Credits due 0.03 0.03 -0.03 -0.03 -0.54 -----





Term Deposits -(Repayable after 1 year) Other Term Liabilities (Unsecured Loan) TOTAL TERM LIABILITIES (Total of 11 to 16) TOTAL OUTSIDE 45.66 1.99 2.56

16 17

1.05 1.08

1.05 1.08

1.05 1.08






19 20 21 22 23 24 25

Share Capital General Reserve Share Premium Account Share Application Money Surplus (+) or Deficit (-) in Profit & Loss Account NET WORTH (Total of 19 to 23) TOTAL LIABILITIES (18+24) ASSETS CURRENT ASSETS

0.25 -2.52 14.03 8.33 25.13 70.79

0.75 -13.76 3.89 12.80 31.20 96.99

0.75 -13.76 4.05 17.15 35.71 118.74

0.75 13.76 4.05 21.25 39.81 134.85

26 27

Cash and Bank Balances 0.27 Investments (other than long term investment) i) Government & other Trustee -33







Securities ii) Fixed Deposits with Banks i) Receivables other than Deferred & Export (including Bill Purchased & Discounted by 28 Bankers) 29.01 ii) Export Receivables (including Bills Purchased / Discounted by Bankers) Installment 29 of Deferred -26.92 (90 days) 1.79 3.48 -54.9216 (90 days) 1.79 4.23 -80.17644 (90 days) 1.79 3.97 (145 days) (86 days) (90 days) (90 days) 30.00 61.64 86.3

Receivables -(due within 1 year) 30 Stock-in-trade 3.92 Days (Cost of Sales) (23 Days) Adv. To suppliers / Contract Advances 14.66 Advance Payment of Taxes 2.76 Current Assets (Specify major items) a) Security Deposit b) Other Current Assets c) Share App. Money TOTAL CURRENT ASSETS (Total of 26 to 33) FIXED ASSETS Gross Block (Land & Building, Machinery, Furniture & Fixture, -0.6 -50.68

31 32 33


-0.4 19.94 84.25

-0.3 5 131.23

0.4 6 181.40

35 36 37

Vehicles) Depreciation to date Net Block (35-36) OTHER ASSETS NON CURRENT

5.71 2.23 3.48

6.72 0.80 5.92

6.72 1.15 5.57

6.72 1.35 5.37


Investments/Book Debts/Advances/Deposits which


are not Current Assets) (i) Investment in Subsidiary 3.97 --1.27 2.71 -4 --1.5 1 -4 --1.6 1.5 --

Companies / Affiliators / Others 3.97 (ii) Advances to Suppliers of Capital Goods and Contractors -(iii) Deferred Receivables (Maturity exceeding 1 year) -(iv) Security Deposits / Tender Deposits 1.26 (v) Others : Debtors exceeding 6 months 39 2.21

Non Consumable Stores / Spares -Other Non current Assets including dues from Directors : Share App. Money Total Other Non Current Assets (Total of 38 to 40) Intangible Assets (Patents, 9.19 16.63

40 41




Goodwill, Preliminary expenses, Bad/Doubtful Debts not provided 42 43 for etc. -TOTAL ASSETS (Total of 34,37,41 & 42) TANGIBLE NET WORTH (2444 45 42) NET WORKING CAPITAL [(17+24)-37+41+42] To tally with (34-10) Current Ratio (item 34/10) Total 47 Outside Liabilities / 1.82





25.13 7.58

31.20 19.54

35.71 49.28

39.81 87.44






Tangible Net Worth (18/44)




SWOT ANALYSIS STRENGTHS The company maintains excellent relationships with its dealers and distributors whom they treat as their partners. The company treats all its employees as the member of a same family. Latest technology is used in all its departments. Quality assurance Good Infrastructure and Interior Time Management Strategy Efficient Utilization of Resources Efficient Policy Formulation by Top Level Management

WEAKNESS It has to still work on its advertisements which could reach all over India. Current Ratio of the company is not satisfactory Delay in decision making

Lack in Motivating the Staff

OPPORTUNITIES To capture the untapped market which its targeting by expanding its production To grow not only in populated area but also in rigid areas. Investment of funds in the market. THREATS Its major threat is from it competitors. As there are many new companies coming up in near future so there is a tough competition ahead. Market fluctuations with the passage of time



The project and data collected was time bound, thus limiting the number of samples considered. Budge constraints is also a limitation. The result obtained from primary data through various tests done may be a biased one. The time horizon is very short, so in depth analysis could be done only of few schemes. The project is dependent on the relevance of the secondary data collected from the internet which might not be correct. The study has been done on only a handful of Audited Accounts so it cannot be generalized to the entire industry. The internal information about the creation of various asset classes and formation was not revealed to the internees.


The scope of study is limited to the primary data collected. The result of this research can be weighted and can be considered for using it in improved future business propositions and further research.

The project will help business development managers to select and target the specific fund for improving the current ratio of the company and their risk taking ability.

This project would be useful for further casual and descriptive studies to formulate a scientific method of evaluation of the Net Working Capital regarding the financing options available.

Hypothesis testing can also be done to predict the future performance of any scheme.

CONCLUSION Cash is the lifeblood of business is an oft-repeated maxim amongst financial managers. Working capital management refers to the management of current or short-term assets and short-term liabilities. Components of short-term assets include inventories, loans and advances, debtors, investments and cash and bank balances. Short-term liabilities include creditors, trade advances, borrowings and provisions. The major emphasis is, however, on short-term assets, since short-term liabilities arise in the context of short-term assets. It is important that companies minimize risk by prudent working capital management. Working capital management is an important yardstick to measure a company operational and financial efficiency. This aspect must form part of the companys strategic and operational thinking. Efforts should constantly be made to improve the working capital position. This will yield greater efficiencies and improve customer satisfaction.


Hence the company should improve its working capital and should manage it accordingly so that the company can improve its capabilities to survive in the real estate market and compete efficiently with the other companies. And with the growth of real estate companies, country can equally compete with other developed as well as developing countries.

RECOMMENDATIONS AND SUGGESTIONS It pays to have contingency plans to tide over unexpected events. While market-leaders can manage uncertainty better, even other companies must have risk-management procedures. These must be based on objective and realistic view of the role of working capital. Addressing the issue of working capital on a corporate-wide basis has certain advantages. Cash generated at one location can well be utilized at another. An innovative approach, combining operational and financial skills and an allencompassing view of the companys operations will help in identifying and implementing strategies that generate short-term cash.

Effective dispute management procedures in relation to customers will go along way in freeing up cash otherwise locked in due to disputes. It will also improve customer service and free up time for legitimate activities Collaborating with your customers instead of being focused only on own operations will also yield good results.


Websites Www.Google.Com
Books D.K. GOEL of Financial Management

M. PANDAY of Financial Management