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PROJECT REPORT ON WORKING CAPITAL MANGEMENT OF KESORAM CEMENT FACTORY SITUATED AT VILLAGE BASANTH NAGAR,MANDAL RAMAGUNDAM, DIST- KARIMNAGAR,ANDRA

PRADESH

SHORT NOTE ON PROJECT SYNOPSIS

1. Introduction of the study. 2. Need for the study 3. Statement of the problem and Hypothesis 4. objectives of the study 5. Methodology and Database 6. Period of the study 7. Plan of the study or chapterization

INTRODUCTION OF THE STUDY

Working capital is one of the most important requirements of any business. It is compared with the blood of human beings. As human cannot survive without blood. In the same way, no business concern can survive without working capital. Every business needs funds for two purposes, for its establishment and to carry out its day to day operations. Long-term funds are required to create production facilities through purchase of fixed assets such as furniture, plant and machinery, land and buildings etc., in which investment is blocked on permanent basis called Fixed Capital. Funds are also needed for short-term purpose for purchase of raw materials, payment of wages and other day-to-day expenses. These funds are known as working capital. In other words, working capital refers to that part of firms capital, which is required for financing short-term or current assets such as cash, marketable securities, debtors and inventories that are being constantly converted into cash inflows and outflows in exchange for other current assets. Hence, it is also known as revolving or circulating capital. Management of working capital therefore is concerned with the problems that arise in attempting to manage the assets, current liabilities and the interrelation that exists between them. In simple, it refers to all aspects of administration of both current assets and current liabilities. DEFINITION OF WORKING CAPITAL: Working capital is the amount of funds necessary to cover the cost of operating the enterprise - SHUBIN

NEED FOR THE STUDY

Kesoram Industries is one of the Indias leading industrial conglomerates under the stewardship of B.K Birla. Birla group of Industries are diversified industries. They manufacture all varieties of goods from pin to plane. Kesoram Industries ltd has arose in 1924 with a textile mill and grew from strength to strength and spread its activities to newer fields like Rayon, pulp, Transparent paper, spun pipes and refractoriness. Kesoram cement industry is a part of Birla Group of Industries and is one of the leading manufacturers of Cement in Andhra Pradesh and also in India. It is a dry process cement plant. The plant capacity is 7.50 lakhs tones per annum at Basanthnagar, a backward area in Karimnagar district of Andhra Pradesh. The need of studying working capital management in this particular organization is to know the method followed by the company in determining working capital requirements in its day-to-day business activities. The objective of this kesoram cement is the use of forecasting method to determine working capital requirements. It takes sales as the basis for working capital determination for which the company prepares working capital budget on long-term basis for a period of 5 years. The cycle of the budget is quarterly assessed.

STATEMENT OF THE PROBLEM & HYPOTHESIS STATEMENT OF THE PROBLEM The main problem of the company is associated with the assessment of the working capital requirement during the years. The working capital shows a fluctuating trend during the review period i.e some years it is negative. HYPOTHESIS It is suggested that the company has to maintain sufficient cash and bank balances The cash ratio of the company is not satisfactory. It is less than the idle ratio. It is suggested that that company should improve its utilization of current assets effectively. It is suggested to maintain the inventory position same it has at present. Since the management of inventory during the review period is satisfactory.

OBJECTIVES OF THE STUDY The following are the objectives of study. 1. To present the conceptual framework relating to management of working capital 2. To examine the size of investment and turnover of working capital in an overall manner including financing of current assets. 3. To know the inventory management Practices of Kesoram cements with a view to determine the extent of blocking up of money inventory. 4. To assess the receivables management practice of Kesoram cement in terms of its size, turnover and collection policies. 5. To offer suitable suggestion for the efficient management of working capital in kesoram cement, keeping in view the inadequacies highlighted by the study.

SCOPE OF THE STUDY Since it is not possible to conduct a macro level study of all cement industries in Andhra Pradesh, the study is restricted to Kesoram cements only. The project was done for 45 days. The study is focused on comparative analysis for kesoram cement only. Comparative and ratio analysis is applied. METHODOLOGY AND DATABASE The proposed study is carried with the help of both primary and secondary sources of data. Annual reports of the company and other journals, magazines and manuals published by kesoram Cement Company. Some of the information related to topic was gathered from websites related to kesoram Cement Company. All the secondary data used for the study has been extracted from the annual reports, manuals and other published materials of the company. PERIOD OF THE STUDY The period of the study is limited to 5 years only i.e from 2007-2011 PLAN OF THE STUDY The plan of the study is divided into 6 chapters which cover from introduction to suggestions of the study. Ie, Introduction, objectives, scope, profile of the organization selected, data analysis etc.