1.

General introduction Statement of the problem Objective of the study Scope of the study Methodology Limitation of the study

2. Analysis /Design, interpretation of results, findings observation &suggestion which may be divided into chapter

Data Analysis and Interpretation Raw data can take a variety of forms, including measurements, survey responses, and observations, in its raw form, this information can be incredibly useful, but also Inventory / Stock Turnover Ratio

Year 2005 - 2006 2006 - 2007 2007 - 2008 2008 -2009 2009 - 2010

Average Inventory Inventory Turnover 67128.52 12227 5.88 77567.10 13896 6.30 85483.73 15182 6.15 93852.71 17182 6.18 106646.31 18756 6.21 Net Sales

The above shows the stock turnover ratio of Infitech for the period of 2005 2006 to 2009 2010. The average stock is in increasing trend. In 2006 2007 it was higher (6.30 times) high value indicating that less quantity of funds locked up in stock. Higher the ratio indicates efficient management of inventory and more frequently the stocks are sold. Chart showing Inventory / Stock Turnover Ratio

Stock Turnover Ratio (In Times)

6.6 6.4 6.2 6 5.8 5.6 5.4 5.2 5 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 Stock Turnover Ratio (In Times)

Debtors Turnover Ratio Debtors turnover ratio or accounts receivable turnover ratio indicates the velocity of debt collection of a firm. In simple words it indicates the number of times average debtors receivable are turnover during a year. When a credit sale is not available, then the debtors turnover ratio can be calculated by dividing the total sales by the balance of debtors (inclusive of bills receivables) given and formula can be written as follows Debtors Turnover Ratio: Sales / Average Receivables

Year 2005 - 2006 2006 - 2007 2007 - 2008 2008 -2009 2009 - 2010

Net Credit Sales 67128.52 77567.10 85483.73 93852.71 106646.31

Average Trade Debtors 10384.49 12331.95 11679.35 10194.76 13415.15

Debtors Turnover Ratio 6.46 6.29 7.32 9.21 7.95

The Above table shows the debtors turnover for the period 2005 2006 to 2009 2010. In the year 2008 2009 the ratio is higher (9.21 times) the company takes time to receive their receivables. In the year 2009 10 the sales are also high and debtors turnover ratio is low (7.95 times) shows the company good in liquidity. Chart showing Debtors Turnover Ratio

Debtors Turnover Ratio

10 9 8 7 6 5 4 3 2 1 0 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 Debtors Turnover Ratio

Debtors Turnover Period The Debtors / Receivable Turnover Ratio when calculated in terms of days in known as Average Collected Period or Debtors Collection Period Ratio. The average collection period ratio represents the average number of days for which a firm has to wait before its debtors are converted into cash.

Table Showing Debtors Turnover Period Debtors Debtors No of Year Turnover Days Turnover Ratio (in times) Period (in days) 2005 - 2006 365 6.3 58 2006 - 2007 365 7.33 50 2007 - 2008 365 9.2 40 2008 -2009 365 7.94 46 2009 - 2010 365 5.55 66 Inference: The above tables shoes the debtors turnover period of Infitech for the period of 2005 2006 to 2009 2010. Debtors turnover period is in fluctuation trend, but sales is in increasing trend. In the year 2009 2010 shows debtors turnover ratio is low (55 times) and debtors turnover period is high (66 days) which implies that payment by debtors are delayed. In the year 2007 2008 debtors turnover ratio is high (9.20 times) but debtors turnover period is low, which implies that the payments by debtors are prompt

Chart shows Debtors Turnover Period (in days)

Debtors Turnover Period (in days)

70 60 50 40 30 20 10 0 2005 - 2006 - 2007 - 2008 - 2009 2006 2007 2008 2009 2010 Debtors Turnover Period (in days)

Debtors to sales Ratio Debtors to sales ratio, is defined as the debtors divided by the turnover of the company. This ratio demonstrates what percentage of credit the company gives on its sales. The formula is the following. Debtors to Sales = Debtors / Sales * 100

Year 2005 - 2006 2006 - 2007 2007 - 2008 2008 -2009 2009 - 2010

Closing Debtors 12777 10533 9856 16974 19957

Sales 77565 85484 93853 106646 102568

Debtors To Sales (%) 16.47 12.32 10.50 15.91 19.45

The table above shows debtors to sales ratio. In the year 2007 2008 the ratio shows lower (10.50%). It shows that company maintains lower credit sales, but the same year the sales also higher so it shows the higher cash sales. In corresponding year also sales increasing, but the ratio is higher, it shows the company doing more credit sales. Chart showing Debtors to Current Asset

Debtors To Sales (%)

20 15 10 5 0 2005 - 2006 - 2007 - 2008 - 2009 2006 2007 2008 2009 2010

Debtors To Sales (%)

Debtors to Current Asset Ratio The debt/Current asset ratio shows the proportion of a companys current assets which are financed through debt. It will show that in what % company makes cash sales and helps to analysis whether the company meets their day to day expense effectively or not. Debtors To Current Asset (%) 32.23 28.62 25.23 32.17 33.59

Year 2005 - 2006 2006 - 2007 2007 - 2008 2008 -2009 2009 - 2010

Closing Debtors 12777 10533 9856 16974 19957

Sales 39634 36791 39051 52749 59398

The table above shows debtors to current basset ratio. It is in fluctuating trend. In the year 2009 2010 the debtors to current asset ratio shows higher (33.59%). It is mainly due to higher debtors and current asset. In 2007 2008 the debtors to current asset ratio shows lower (25.23%). Here current asset and debtors is also lower. It shows that the company maintains cash sales. Chart showing Debtors to Current Asset Ratio

Debtors To Current Asset (%)

35 30 25 20 15 10 5 0 2005 - 2006 - 2007 - 2008 - 2009 2006 2007 2008 2009 2010 Debtors To Current Asset (%)

Inventories to sales Ratio The amount of stock the company has compared wih the amount of goods that they have sold in a particular period of time. T refers to Percentage of cost of sales attributable to average inventory. A decreasing number indicates higher efficiency in the use of resources. An increasing number suggest potential cash flow problems due to greater sums tied up in inventory. The inventory to sales ratio measures the percentage of inventories the company currently has on hand to support the current amount of sales.

Inventories to Sales ((in %) : Inventories / Sales * 100

Year 2005 - 2006 2006 - 2007 2007 - 2008 2008 -2009 2009 - 2010

Inventories 12155 15638 14726 19639 12155

Sales 12155 15638 14726 19639 12155

Inventories to sales (in %) 15.67 18.29 15.69 18.41 17.42

The above table indicates the comparison of inventories to sales. It shows fluctuation trend, because of fluctuation in inventories but sales is in increasing trend in every year. In 2008 2009 the ratio shows the higher (18.41%) and in 2005 2006 the ratio shows lower (15.67%). Chart showing Inventories to Sales

Inventories to Sales (in %)

19 18.5 18 17.5 17 16.5 16 15.5 15 14.5 14 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

Inventories to Sales (in %)

Operating Cycle The operating cycle is the number of days from cash to inventory to account receivable to cash. The operating cycle reveals how long cash is tied up in receivables and inventory. A long operating cycle means that less cash is available to meet short term obligations. Operating Cycle: Debtors Turnover Period + Inventory Turnover period

Year 2005 - 2006 2006 - 2007 2007 - 2008 2008 -2009 2009 - 2010 Inference:

Debtors Turnover Period (in days) 58 50 40 46 66

Inventory Turnover Operating Period Cycle (in days) (in days) 58 116 59 109 59 99 59 105 67 133

From the above table it shows the operating cycle has been decreased from 116 days in 2005 2006 to 99 days in 2007 2008 and again increased to 133 days in 2009 2010 the cash is tied up in receivables and inventory.

Chart showing Operating Cycle

Operating Cycle
140 120 100 80 60 40 20 0 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

(in days)

Operating Cycle days)

(in

Table showing the Trend Analysis for Debtors

Year 2005 - 2006 (-2) 2006 - 2007 (-1) 2007 - 2008 (-0) 2008 - 2009(-1) 2009 - 2010 (2) X=0 Debtors (Y) 12777 10533 9856 16974 19957 Y=70097 Xy -25554 -10533 0 16974 39914 xy=20801 X2 4 1 0 1 4 X2 =10 Trend Values 9859 11939 14019 16099 18179

Inference: The above table shows trend value of debtors for Infitech for the year 2005 2006 to 2009 2010. The table shows increasing trend that means company allowing more cresit sales but not in loss within certain period they are collecting their debts. The trend value shows that company allows more credit sales within their credit limit given by credit control department. Formula Y = a + bx Y= na+ba Xy=ax + b X2

Calculation 2. Y= na +bx 70097 = 5a + 0b a= 70097/5 a=14019 3. xy=ax+b X2 20801 = 0a + 1b b=20801/10 b=2080 1. Y=a+bx Sub x and y in eq. 1 Y=14019 + 2080x

Trend Values 2006: x = -2 Y= 14019 + 2080(-2) = 9859 2007: x= =1 Y=14019 + 2080(-1) = 11939 2008: x=0 Y=14019 + 2080(0) = 14019 2009: x = 1 Y = 14019 + 2080(1) =16099 2010: x=2 Y=14019 + 2080(2) =18179 Chart showing Trend Values for Debtors

Trend Values
20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

Trend Values

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION FINDINGS The company always maintains the nil stock at the yearend in case of the finished goods in spite of the increase in the production in the consecutive years which shows that there is increasing trend in the sales and average stock from 2005 2006 to 009 2010. The trend value is high in the year 2005 2006 which implies the less quantity of funds locked in stock.

3. Conclusion & Recommendations During my study, it is observed that system in Infitech Global followed for managing credit was efficient. With such wide network managing the receivables, collecting the money on time, recover a maximum amount is a great risk and with the current system of credit terms. Infitech Global has been able to achieve the best. The Learning from the company has been very informative on how difficult it is to address issues in such leading organisation.

4. Annexure relevant to the project such as figures, graphs, photographs etc

Bibliography