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A STUDY ON WORKING CAPITAL MANAGEMENT IN

OIL PALM INDIA LTD, KOTTYAM


By
REVATHY.R
Register N! "#$%##"&#'&(
A PRO)ECT REPORT
Submitted to the
*ACULTY O* MANAGEMENT STUDIES
In partial fulfilment of the requirements
for the award of the degree
Of
MASTER O* BUSINESS ADMINISTRATION
ANNA UNIVERSITY
CHENNAI 600 025
)UNE +$'#&
BONA*IDE CERTI*ICATE
Certified that this project report titled ,A STUDY ON WORKING
CAPITAL MANAGEMENT IN OIL PALM INDIA LTD, KOTTYAM- is the bonafide or! of
"s# REVATHY.R .Reg.N!"#$%##"&#'&(/ ho carried out the research under m$ super%ision#
Certified further& that to the best of m$ !noled'e the or! reported here is does not form part
of an$ other project report or dissertation on the basis of hich a de'ree or aard as conferred
on an earlier occasion on this or an$ other candidate#
(((((((((((((((((((((((((((((((( ((((((((((((((((((((((((((((((
)roject *uide Head of the +epartment
Submitted for the project ,i%a(,oice e-amination held on ..........................
(((((((((((((((((((((((((((((((((((( ((((((((((((((((((((((((((((((((
Internal E-aminer E-ternal E-aminer
DECLARATION
I REVATHY.R .Reg.N!"#$%##"&#'&(/& hereb$ declare that this project report& entitled
,A St01y 2 3r4i2g 567it68 9626ge9e2t i2 i8 7689 I21i6 8t1,4tty69- submitted to the
Anna /ni%ersit$& Chennai in )artial fulfillment of the re0uirements for the aard of the +e'ree
of MASTER O* BUSINESS ADMINISTRATION is a record of ori'inal project or! done
b$ me durin' 1une(2023 under the super%ision and 'uidance of Mr.P.K696r6:,
M.B.A,MP;i88,P;D Pr<essr, ,i%e!ananda Colle'e of En'ineerin' for 4omen and it has not
formed the basis for the aard of an$ +e'ree 5 +iploma 5 Associate ship 5 6elloship or other
similar title to an$ candidate of an$ /ni%ersit$#
+ate 7 Si'nature of the Student
)lace 7 89E,A:H;#9<

I certif$ that the declaration made abo%e b$ the candidate is true#
Si'nature of the *uide
"r#)#=amaraj& "#>#A&")hill&)h+ )rofessor
ACKNOWLEDGEMENT
I e-press m$ sincere than!s and 'ratitude to ,idh$a 9athna 9ashitra 9athna C;6ir962
= Se5ret6ry, Dr. M. K6r0262i1;i, B.P;6r9., M.S., P;.D., D.Lit., ,i%e!ananda Educational
Institutions& for his support in all our endea%ors#
I render m$ heartiest than!s to the +irector& Dr.A.P.K6>i862, M.E., P;.D., for 'i%in' me
a onderful opportunit$ to carr$ out this project successfull$#
I e-tent m$ heartfelt than!s to the principal& Dr.P.M0rt;i, M.E., P;.D., for the constant
support 'i%en in all our acti%ities#
I ish to e-press m$ sincere than!s to Dr. M.L6t;6 N6t6r6:62, MBA., P;.D., and Head
of the +epartment of "ana'ement studies for the help and !ind support rendered b$ her#
I e-press m$ profound than!s to Mr.P.K696r6:, M.B.A,MP;i88,P;D Pr<essr
+epartment of "ana'ement studies& 6acult$ 'uide& for her encoura'ement& super%ision and
'uidance throu'hout the project#
I ould li!e to e-press m$ sincere than!s for m$ parents and friends for their unbounded
support to ma!e this project a realit$#
I also e-press m$ heartfelt than!s to all the respondents ho ha%e pro%ided information
re0uired for the stud$#

CONTENT
CHAPTER NO TITLE PAGE NO
ABSTRACT
LIST O* TABLES
LIST O* CHART
#
INTRODUCTION
2#2 Introduction to the stud$
2#2 Industr$ profile
2#3 Compan$ profile
2#? )roduct profile



2

@
2?
22

$ MAIN THEME O* THE PRO)ECT
2#2 Abjecti%es
2#2 Bimitations
2#3 9esearch methodolo'$
2#? Biterature re%ie
2#5 +ata anal$sis and interpretation
23
2?
25
2C
32
& *INDINGS, SUGGESTIONS, CONCLUSION
3#2 6indin's
3#2 Su''estion
3#3 Conclusion
5@
5D
60
?
SCOPE RESEARCH *OR THE *UTURE
?#2 Scope or! for the future
?#2 >iblio'raph$
62

62
LIST O* TABLES

LIST O* CHART
:able No :itle )a'e No
02 Schedule of chan'es in or!in' capital 33
02 Current ratio of the compan$ 36
03 Bi0uidit$ ratio 3@
0? Absolute li0uid ratio ?0
05 )roprietar$ ratio ?2
06 :rend anal$sis of current liabilities and pro%ision ??
0C :rend anal$sis of assets ?C
0@ :rend anal$sis of net profit 50
0D Comparati%e balance sheet 53
ABSTRACT
:he main objecti%e of the stud$ is to anal$Ee the %arious 4or!in' capital mana'ement
in%ol%ed in the compan$ for the period 200@ to 2022#
:able No :itle )a'e No
02 Current ratio of the compan$ 3C
02 Bi0uidit$ ratio 3D
03 Absolute li0uid ratio ?2
0? )roprietar$ ratio ?3
05 :rend anal$sis of current liabilities and
pro%ision
?6
06 :rend anal$sis of assets ?D
0C :rend anal$sis of net profit 52
:he stud$ is based on the secondar$ data# :he data hich are collected from the
compan$Fs annual report and balance sheet#
:he first chapter deals ith the introduction about stud$& introduction about stud$
industr$& introduction about the compan$
:he second chapter deals ith the research methodolo'$ hich includes statement of the
problem& objecti%es& limitation& data collection and anal$sis and interpretation process methods&
table& and chart& statement chan'es in or!in' capital and ratio anal$sis& :rend Anal$sis tools for
used#
:he third chapter deals ith findin's& recommendations and conclusion of the stud$# :he
last chapter is Appendices and biblio'raph$#
:he o%erall performance is 'ood# It is hope that the compan$ ill ta!e ade0uate steps for
stated in su''estions to earn ma-imum profits& and ill become one of the best compan$#
CHAPTER -I
CHAPTER +#
#.# INTRODUCTION ABOUT THE STUDY
INTRODUCTION
:he stud$ of or!in' capital mana'ement occupies an important place in financial mana'ement#
:he earlier emphasis of financial mana'ement as more on a lon'(term financial decision#
4or!in' capital mana'ement& hich is concerned ith short term financial decision& appears
to ha%e been relati%el$ ne'lected in the literature of finance# "ana'ers& :a- Authorities and
other interested 'roups see! ansers to the folloin' important 0uestions about a firm7
hat is the financial position of the firm at a 'i%en point of timeG
Ho did the firm perform financiall$ o%er a 'i%en period of timeG
:o anser the abo%e 0uestions& one has to prepare to major financial statements ( the balance
sheet and the income statement# :he balance sheet shos the financial position or condition of
the firm at a 'i%en point of time# In income statement or profit and loss account reflects the
performance of the firm o%er a period of time#
A firm communicates financial information to the users throu'h financial statements and reports#
>alance sheet and profit and loss accounts& as these statements are used b$ in%estors and
financial anal$sis to e-amine the firms performance in order to ma!e in%estment decisions#
MANAGEMENT O* WORKING CAPITAL
"ana'ement of or!in' capital is concerned ith the problem that arises in attemptin' to
mana'e the current assets& current liabilities# :he basic 'oal of or!in' capital mana'ement is to
mana'e the current assets and current liabilities of a firm in such a a$ that a satisfactor$ le%el
of or!in' capital is maintained& i#e# it is neither ade0uate nor e-cessi%e as both the situations
are bad for an$ firm#
:here should be no shorta'e of funds and also no or!in' capital should be ideal# 4or!in'
capital mana'ement polic$ of a firm has a 'reat on its probabilit$& li0uidit$ and structural health
of the or'aniEation# So or!in' capital mana'ement is three dimensional in nature as
2# It concerned ith the formulation of policies ith re'ard to profitabilit$&
li0uidit$ and ris!#
2# It is concerned ith the decision about the composition and le%el of current
Asset
3# It is concerned ith the decision about the composition and le%el of current
Biabilities#
*INANCIAL MANAGEMENT
6inancial mana'ement is %er$ important to e%er$ t$pe of or'aniEation# It refers to that part of
mana'erial acti%it$ concerned ith the procurement and utiliEation of funds the for business
purposes# In the ords of Hoard and /pton7
6inancial mana'ement in%ol%es the application of 'eneral mana'ement principles to financial
operations# :hus financial mana'ement is concerned ith7
Estimation of the fi-ed and or!in' capital re0uirements&
6ormulation of capital structure&
)rocurement of fi-ed and or!in' capital& and
"ana'ement of earnin's
OB)ECTIVES O* *INANCIAL MANAGEMENT!
6inancial mana'ement is concerned ith the efficient use of capital funds# It e%aluates
ho funds are used and procured# In all cases& financial mana'ement in%ol%es sound jud'ments&
combined ith a lo'ical approach to decision( ma!in'# +ifferent implication ha%es to are
a%ailable to a business enterprise in the process of decision ma!in'# :hese alternati%es ha%e to
be e%aluated on the basis of some anal$tical frameor! and commercial strate'ies of an
enterprise#
IMPORTANCE O* *INANCIAL MANAGEMENT
6inancial mana'ement is application to e%er$ t$pe of or'anisation irrespecti%e of its siEe&
!ind or nature# :hus its is important and useful for all t$pe of onership or'aniEation here
there is a use of financials financial mana'ement is helpful e%er$ mana'ement aims to utiliEe lit
fund in a best possible and profitable a$# It is indispensable in an$ or'aniEation as it help in7
6inancial plannin' and successful promotion of an enterprise#
)roper use and allocation of fund#
:a!in' sound financial decision#
Impro%in' the profitabilit$ throu'h financial controls#
*INANCIAL STATEMENT
6inancial statements 'enerall$ refer to four basic statements(the income statements& the
balance sheet& the statement of retained earnin's and the sources and uses of funds statements#
:he financial statements& ta!en to'ether& 'i%e the accountin' picture of the firms operation and
financial position# :he pac!a'e of financial statements include such schedules as those relatin'
to fi-ed assets& lon' term in%estments lon' term debts& accrued liabilities& cost of 'oods
manufactured& sellin' e-pensed and administrati%e and 'eneral e-penses# :hese schedule mainl$
supplements the information contained in the financial statements and considered essential for
the purpose of anal$sis#
MA)OR TOOLS O* *INANCIAL ANALYSIS!
,arious tools or techni0ues are used in the financial anal$sis# :he main objecti%e of an$
anal$tical method is simplification and presentation of data in a more comprehensi%e manner#
Hoe%er& no one t$pe of anal$sis is sufficient to support o%erall findin's& or to ser%e all t$pe of
users# :he most important tools of financial anal$sis are as follos7
2# Comparati%e financial statements
2# :rend ratios or percenta'es#
3# 9atio anal$sis#
?# 6unds flo anal$sis#
5# cash flo anal$sis#
COMPARATIVE *INANCIAL STATEMENT!+
Comparati%e statement mainl$ shos the folloin' information for anal$tical pure poses#
2# Actual data in absolute mone$ %alues& as 'i%en in the financial statement for the period under
consideration#
2# Increases or decreases in %arious items in mone$ %alues& and
3# Increases or decreases in %arious items in terms of percenta'es#
*UND *LOW STATEMENT!+
HA statement of source and application of fund is a technical de%ice is desi'ned to
anal$sis the chan'es in the financial condition of a business enterprises beteen to dateI#
In the ords of Anthon$I the fund flo statement describes the sources from hich additional
funds flo statements describe the source from hich additional funds ere deri%ed and the use
hich these chan'es of sources ere putI#
CASH *LOW ANALYSIS!+
Cash deposit cash on hand and demand deposits ith ban!s#
Cash e0ui%alents are short term& hi'hl$ li0uid in%estment that are readil$ con%ertible into
!no amount of cash and hich are subjecti%e to an insi'nificant ris! of %alues#
Cash flo are inflos and out flos of cash and cash e0ui%alents#

:he cash floin' are the e-amples of cash flo arisin' from in%estin' acti%ities#
Cash pa$ment to ac0uire fi-ed assets#
9eceipt from disposal of fi-ed assets#
Cash ad%ances and loan made to third parties#
Cash receipt on account of interest and di%ided on in%estments#
Cash receipt from future contracts forard contracts etc#&
Cash flo from financin' acti%ities:
Cash receipt from the issue of shares#
Cash repa$ment of amounts borroed
Cash pa$ment to redeem preference shares
Cash pa$ment of di%idend
Cash pa$ment of interest on debentures and loans#
TREND ANALYSIS
:rend anal$sis calculates the percenta'e chan'e for one account o%er a period of time of
to $ears or more#
Per5e2t6ge 5;62ge
:o calculate the percenta'e chan'e beteen to periods7
2# Calculate the amount of the increase58decrease< for the period b$ subtractin' the earlier
$ear from the later $ear# If the difference is ne'ati%e& the chan'e is a decrease and if the
difference is positi%e& it is an increase#
2# +i%ide the chan'e b$ the earlier $earJs balance# :he result is the percenta'e chan'e#
INDUSRTY PRO*ILE
#.# COMPANY PRO*ILE

CHAPTER -II
CHAPTER +$
$.#OB)ECTIVES O* THE STUDY
:o stud$ the or!in' capital mana'ement practices in Ail palm India Btd#
:o carr$out ratio anal$sis to stud$ the effecti%eness of or!in' capital mana'ement
practices
:o e-amine the impact of cash flos on the or!in' capital of Ail palm India Btd#
:o forecast the or!in' capital re0uirements of the compan$ for the ne-t fi%e $ears#
:o su''est suitable measures to brin' impro%ement in the or!in' capital mana'ement
practices of Ail palm India Btd
$.$ LIMITATIONS O* THE STUDY
:he project or! has been completed successfull$ a fe limitations has obser%ed#
Hoe%er ade0uate measures ha%e been ta!en to o%ercome the impact of limitations on
the stud$#
:he stud$ is conducted ith a%ailable data 'athered from the annual report and the
anal$sis as made accordin'l$#
:he )redictions ere made b$ a%ailable data of fi%e $ears 8200@ (2022<
:his research is mainl$ based on ratio anal$sis and or!in' capital other tools to certain
e-tent#
It deals ith 4or!in' Capital "ana'ement and findin' and 'eneraliEation are confined
to Ail palm India Btd#
$.& RESEARCH METHODOLOGY
MEANING O* RESEARCH
9esearch is a s$stematic critical careful search for all anser to a 0uestion or solution to a
problem is called search#
9E search
SEA9CH for the !noled'e or fact#
DE*INITION O* RESEARCH
9esearch is the process of s$stematic plannin' anal$sis of an$ particular topic or subject
of area of in%esti'ation in%ol%in' colletin' comparison presentation interpretation of element
detail or data hich should be useful for sol%in' problem of impro%in' e-istin' sol%in' to
problem#
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem it may be
understood as a science of stud$in' ho research is done scientificall$ it include o%erall desi'n
the samplin' procedure& data collection& methods and anal$sis#
RESEARCH DESIGN!+
9esearch desi'n used in the stud$ is anal$tical research# :he research as carried out b$ to
anal$sis the balance sheet& hich is a historical data and deri%e conclusion from it#
NATURE O* DATA7(
:he nature of data used for the stud$ is secondar$ data#
PERIOD O* THE STUDY!+
:he stud$ as made beteen 1anuar$ 2023 and "a$ 2023 #:he financial performance of Ail
palm India Btd beteen 200@ and 2022 as anal$ses durin' this period
SECONDARY DATA!+
Secondar$ data that are alread$ a%ailable i#e#& the$ refers to the data hich ha%e alread$
been collected b$ someone else# Here& secondar$ data ere collected from the compan$
brochures& manuals and other records#
TOOLS USED *OR THE ANALYSIS
4or!in' capital anal$sis
9atio anal$sis
:rend anal$sis
Comparati%e balance sheet Assessment

$.? LITERATURE REVIEW
4or!in' capital mana'ement can be considered as an important source of profitabilit$ of a firm#
"an$ researchers in%esti'ated the impact of or!in' capital mana'ement on profitabilit$# :his
past research demonstrated that efficient or!in' capital mana'ement leads to 'reater
profitabilit$# S9it; 82D@0< conducted a stud$ on )rofitabilit$ and Bi0uidit$ and su''ested that
or!in' capital mana'ement directl$ influence ris! and profitabilit$ of a firm# Hence it can be
inferred that effecti%e or!in' capital mana'ement can increase the financial stren'th of a
business. Se2e2 82DD3< also performed an anal$sis of or!in' capital mana'ement and its
relationship ith financial performance# His stud$ as based on /S firms and after the stud$ he
su''ested that if the len'th of net trade c$cle increases then it affects the return on in%estment
ne'ati%el$#
:he 4or!in' Capital mana'ement is re'arded as an essential part of financial mana'ement of a
firm 8)s;i, #%%(/. L69>ers2 82DD5< obser%ed the impact of economic acti%it$ on the 4or!in'
Capital "ana'ement )olic$# 6or this he too! a sample of 50 small firms of /S for a time period
of 22 $ears i#e# 2D@0(2DD2# He found that economic e-pansion do not cause an increase in the
in%estment of or!in' capital durin' a specific period# 6inall$ he su''ested that there e-ists a
sli'ht impact of an$ chan'e in economic acti%it$ on or!in' capital mana'ement of these
firms#Some other researchers namel$& )se, L6256ster, 621 Ste@e2s 82DD6< carried out a
detailed anal$sis on the association of cash con%ersion c$cle and financial returns# :he$ located
an in%erse association of profitabilit$ ith cash con%ersion c$cle#

S;i2 621 Se2e2 82DD@< conducted an e-panded stud$ b$ ta!in' a lar'e sample of 5@D@5 firms
of /S# :heir stud$ as based on a lon'er time phase of 2DC5(2DD?# :he$ su''ested that for
'eneratin' 'reater %olume of ealth for the shareholders of a firm& it is %er$ crucial to mana'e
the or!in' capital of that firm effecti%el$ and in an efficient manner# :he$ also recommended
that profitabilit$ and net trade c$cle both are in%ersel$ related to each other#
Lyr01i 621 L6A6ri1is 82000< in%esti'ated the relationship of li0uidit$ and cash con%ersion
c$cle for the food industr$ of *reece# :he$ concluded that a considerable positi%e relationship
e-ists amon' Cash Con%ersion C$cle and current ratio& a%era'e a'e of in%entor$ and a%era'e
collection period# Also the$ located an in%erse relationship beteen CCC and a%era'e pa$ment
period# :he$ concluded that there as no statisticall$ si'nificant relationship beteen %ariables
used for li0uidit$ measurement and that used for profitabilit$ measurement# Also the$ su''ested
that cash con%ersion c$cle had no si'nificant relationship ith debt ratio#
4or!in' capital mana'ement and profitabilit$ relationship has been e-plored b$ man$ other
researchers as ell# De8< 82003< anal$Eed 200D non(financial firms of >el'ium# He found that
'ross operatin' profit of a firm is ne'ati%el$ related to in%entor$ turno%er and a%era'e collection
period# Hence& he recommended that financial mana'ers can tr$ to impro%e profitabilit$ b$
enhancin' a%era'e pa$ment period and b$ curbin' in%entor$ turno%er and a%era'e collection
period# He also recommended that profitabilit$ is stron'l$ related to or!in' capital
mana'ement of a business#:hrou'h a stud$ on Saudi Arabian companies& E8:e88y 8200?
disco%ered that the profitabilit$ and cash 'ap ha%e a si'nificant ne'ati%e relationship ith each
other# M688i4, S0r, 621 R64s;it 82005< e%aluated Indian pharmaceutical industr$# :he$
disco%ered that profitabilit$ and li0uidit$ do not ha%e an$ si'nificant relationship for these
firms#:o researchers namel$ MesAe4 621 P8e3s4i 82006<anal$Eed the construction sector#
:heir or! tar'eted mainl$ the strate'ies hich should be used for the or!in' capital
mana'ement in construction sector# :he$ ha%e not or!ed to e%aluate the o%erall or!in'
capital mana'ement effecti%eness and financial performance of construction sector#

:he stud$ of S.M.A9ir S;6; 621 S626 82006< as based on a period of fi%e $ears i#e#
2002(2005# :he$ used or!in' capital ratios to determine the effect of or!in' capital
mana'ement on financial performance# :hese or!in' capital ratios include in%entor$ turno%er&
current ratio& 0uic! ratio& a%era'e collection period and a%era'e pa$ment period# :he$ used
correlation anal$sis and ABS method to reach the results# 6inall$ the$ re%ealed that *ross profit
is ne'ati%el$ associated ith all or!in' capital ratios e-cept number of da$s pa$able# In a stud$
on H+6C S:AN+A9+ BI6E INS/9ANCE 8200@< anal$Eed or!in' capital mana'ement and
its relation ith profitabilit$ b$ e-aminin' a sample of manufacturin' firm of "auritius#
)eriod of the stud$ as si- $ears i#e# 2000(2005# He used da$s of recei%ables& in%entor$
turno%er& cash con%ersion c$cle and da$s of pa$ables as e-planator$ %ariables& and return on
total assets 89AA< as dependent %ariable# :he$ used re'ression anal$sis to find out the results#
:he$ found that paper and printin' industr$ shoed 'reater scores for
different or!in' capital components amon'st the o%erall manufacturin' industr$# :hese 'reater
scores affect the profitabilit$ of this industr$ positi%el$# 6inall$ the$ concluded that if a firm ill
in%est hea%il$ in its in%entor$ and accounts recei%ables then the profitabilit$ of that firm ould
be loer#Vis;262i 621 S;6; 8200D< from their stud$ on Indian consumer electronic industr$
disco%ered that profitabilit$ for the o%erall industr$ had no reco'niEed relationship ith
li0uidit$& but majorit$ of the companies belon'in' to this industr$ shoed a positi%e association
for profitabilit$ and li0uidit$# G62es62 8200D< conducted a stud$ on :elecommunication K
e0uipment industr$ b$ ta!in' 3?D firms of this sector# :he time period of this stud$ as C $ears
i#e# 2003(200D# He declared that in this industr$ effecti%e or!in' capital mana'ement and
financial performance do not ha%e an$ si'nificant in%erse relationship ith each other# He also
indicated that there e-ists a stron' and in%erse association beteen financial performance and
li0uidit$#
R6;e962 621 N6sr 8200D< performed an anal$sis on D? firms listed at =SE& based on a time
span of 6 $ears from 2002 to 2006# :he$ ha%e ta!en different or!in' capital ratios such as Net
Aperatin' )rofitabilit$& +ebt ratio& current assets to total assets ratio& cash con%ersion c$cle&
a%era'e collection period& in%entor$ turno%er& a%era'e pa$ment period& current ratio#
A<A6 621 N6Air 8200D<studied 263 firms of )a!istan for a time phase of si- $ears i#e# 2000(
2005# :he$ stated that adoptin' inefficient or!in' capital mana'ement policies affects the
profitabilit$ ne'ati%el$#A<A6 621 N6Air 82020<re%ieed their per%ious stud$ to estimate the
impact of different t$pes of or!in' capital mana'ement policies on financial performance of
firms in different sectors# 6or this the$ used a sample of 263 non(financial firms belon'in' to 2C
different sectors listed at =SE from2000 to 2005#
:he secondar$ data as collected from the financial reports of selected companies and also from
the publications of State >an! of )a!istan# :here are to t$pes of or!in' capital mana'ement
policies namel$ a''ressi%e or!in' capital mana'ement polic$ and conser%ati%e or!in' capital
mana'ement polic$# In a''ressi%e or!in' capital mana'ement polic$ a firm places less amount
of capital in current assets to earn more profit from fi-ed assets& hereas in conser%ati%e or!in'
capital mana'ement polic$ firms use more capital as current assets# 6or the measurement of the
de'ree of a''ressi%eness the$ used current liabilities to total assets ratio 8CB:A9< and current
assets to total assets ratios 8CA:A9<# :o locate the impact of these policies on the performance
of firms the$ used 9eturn on E0uit$ 89AE< and 9eturn on Assets 89AA<# 9esults ere found b$
usin' re'ression anal$sis# :he$ found an in%erse relationship beteen de'ree of a''ressi%eness
of these policies and profitabilit$#
Uy6r 82022< too! a sample of 266 :ur!ish companies to predict the nature of relationship of
profitabilit$ and siEe of the firms ith Cash Con%ersion c$cle# :he result demonstrated that
profitabilit$ and siEe of the firms both are ne'ati%el$ related ith Cash Con%ersion C$cle#
:he stud$ of Bi2ti M;6961 621 M;1 S661 82022< as based on secondar$ data of 2C2 firms
of "ala$sia# :he$ e%aluated the impact of %arious components of or!in' capital on
profitabilit$ and mar!et %alue of the firms# :he stud$ co%ered a time span of fi%e $ears from
2005 to 200D# 6or this purpose the$ used different or!in' capital components namel$ cash
con%ersion c$cles 8CCC<& debt ratio 8+9<& current assets to total assets ratio 8CA:A9<& current
liabilities to total assets ratio 8CB:A9<and current ratio 8C9<&# :o see the effect of these or!in'
capital components on financial performance the$ used :obinLs M 8:M<& return on in%ested
capital 89AIC< and return on assets 89AA< as a measurement of financial performance of the
selected firms# :o deduce the results the$ used correlations and multiple re'ression anal$sis#

ANALYSIS AND INTERPRETATION
WORKING CAPITAL ANALYSIS

&.# SCHEDULE O* CHANGES IN WORKING CAPITAL

TABLE NO! #
.A902t i2 5rre/

SOURCE! Annual 9eport of Ail palm India B:+
:he or!in' capital of Ail palm India ltd has increased to 9s# 3#3 crore in the $ear 200@(200D#
:he current asset and current liabilities increased 9s#22#2 crore and 2@#D crore respecti%el$ in
the $ear 200D(2020
YEAR CURRENT ASSET CURRNT
LIABILITIES
NET WORKING
CAPITAL
200@(200D ?D#? 2?#2 35#3
200D(2020 C2#6 33#0 3@#6
CHAN*ES 22#2 2@#D 3#3

TABLE NO! $
.A902t i2 5rre/
YEAR CURRENT ASSET CURRNT
LIABILITIES
NET WORKING
CAPITAL
2020(2022 65#0 26#@ 3@#2
2022(2022 C0#@ 3C#C 33#2
CHAN*ES 5#@ 20#D (5#C
SOURCE! Annual 9eport of Ail palm India B:+
:he or!in' capital of Ail palm India ltd has decreased to 9s# 5#C crore in the $ear 2020(2022#
:he current asset and current liabilities increased 9s#5#@ crore and 20#D crore respecti%el$ in
the $ear 2022(2022
TABLE NO! &
.A902t i2 5rre/
YEAR CURRENT ASSET CURRNT
LIABILITIES
NET WORKING
CAPITAL
2022(2022 C0#@ 3C#C 3@#2
2023 C2#2 32#5 33#2
CHAN*ES 2#3 (5#2 (5#2
SOURCE! Annual 9eport of Ail palm India B:+
:he or!in' capital of Ail palm India ltd has dereased to 9s# 5#2 crore in the $ear 2022(2022#
:he current asset as increased 9s#2#3 crore and current liabilities decreased 9s#5#2 crore in
the $ear 2022(2023#
&.$ RATIO ANALYSIS
&.$.#CURRENT RATIO
:hus the to basic components of current ratio are current asset and current liabilities# Current
asset7 debtors& bills recei%able& in%entor$& cash in hand& cash at ban!& prepaid e-penses and short
term in%estment& ra material or! in pro'ress finished 'oods and stores and spares#
Current liabilities7 current liabilities include creditors& bill pa$able& ad%ance recei%ed& ban! o%er
draft& outstandin' liabilities for e-penses and interest accrued but not due#
Current asset
Current ratio N (((((((((((((((((((((((((( - 200
Current liabilities
TABLE NO! ?
THE TABLE SHOWS CURRENT RATIO O* THE COMPANYB
BETWEEN $''%+$'#&
.A902t i2 5rres/
YEAR CURRENT ASSET CURRENT
LIABILITIES
CURRENT RATIO
200D ?D#? 2?#2 3#?D
2020 C2#6 33#0 2#2C
2022 65#0 26#@ 2#?2
2022 C0#@ 3C#C 2#@C
2023 C2#2 32#5 2#22
INTERPRETATION
:he abo%e table shos that the current ratio of the firm beteen 200@ and 2022& and it is
fluctuatin' considerabl$# :he ma-imum current ratio of 3#?D is obser%ed durin' 200@ and the
least 2#@C is reported durin' 2022# It is concluded that there e-ist an abnormal %ariation in
current asset and current liabilities beteen 200@ and 2022#
CHART! # CURRENT RATIO
&.$.$ LICUID RATIO
Bi0uid ratio ma$ be defined as the ratio of li0uid assets to li0uid liabilities or current liabilities#
It is concerned ith the relationship beteen li0uid assets and li0uid or current liabilities# :he
other terms used for li0uid ratio are F0uic! ratioL and FAcid test ratioL for the purpose of
computation& the current assets and current liabilities could be classified as follos7
Current assets7 8a< li0uid assets& and 8b< +eferred Assets
Current liabilities7 8a< Bi0uid liabilities and 8b< +eferred liabilities
*r9086!
Bi0uid assets Bi0uid assets
Bi0uid ratio N or
Bi0uid liabilities Current liabilities
TABLE NO! (
THE TABLE SHOWS LICUIDITY RATIO O* THE COMPANY
BETWEEN $''D+$'#$
.A902t i2 5rre/
YEAR CUICK ASSET CURRENT
LIABILITY
CUICK RATIO
200@ ??#D 2?#2 3#26
200D 6D#2 33#0 2#0D
2020 62#C 26#@ 2#30
2022 6C#2 3C#C 2#C@
2022 63#@ 2D#? 2#2C
INTERPRETATION
:he abo%e table shos the li0uidit$ ratio of the firm beteen 200@(2022# :he ma-imum
li0uidit$ ratio of 3#26 is obser%ed durin' 200@ K the least 2#C@ is reported durin' 2022#It is
obser%ed that there e-ist an abnormal %ariation in li0uidit$ asset and current liabilities
beteen200@ to 2022
CHART! $ CUICK RATIO
&.$.& ABSOLUTE LICUIDITY RATIO
It is relationship beteen absolute li0uate asset and current liabilities #absolute li0uid
assets consists of cash in hand and mar!etable securities or temporar$ in%entor$#
Absolute li0uidit$ ratio
Absolute li0uidit$ ratio N ((((((((((((((((((((((((((((((((((
Current liabilities
TABLE NO! "
THE TABLE SHOWS ABSOLUTE LICUID RATIO O* THE COMPANY
BETWEEN $''D+$'#$
.A902t i2 5rre/
YEAR ABSOLUTE
LICUID ASSETS
CURRENT
LIABILITIES
ABSOLUTE
LICUID RATIO
200@ 3@#3 ?#? @#6@
200D ?3#0 5#3 @#22
2020 ?2#6 ?#2 D#@5
2022 ?2#D D#5 ?#3C
2022 ?0#5 D#2 ?#?5
INTERPRETATION
It is obser%ed from the abo%e table that the absolute li0uidit$ ratio of the firm beteen
200@(2022 is decreasin'# :he ma-imum absolute li0uidit$ ratio of D#@5 is obser%ed durin' 2020
and the least ?#3C is reported durin' 2022#An increase or decreases in the absolute li0uid ratio
represent impro%ement in the li0uidit$ position# :his indicates that the short term sol%enc$
position of the compan$ is satisfactor$#
CHART! & ABSOLUTE LICUID RATIO
&.$.? PROPRIETORES *UND
:he ratio of current asset to the proprietors fund establishes the relationship beteen the
current asset and shareholders fund#
Share holder fund
)roprietorLs ratio N (((((((((((((((((((((((((((( -200
:otal assets
TABLE NO! F
THE TABLE SHOWS PROPRIETARY RATIO O* THE COMPANY
BETWEEN $''D+$'#$
.A902t i2 5rres/
YEAR SHARE HOLDER
*UND
TOTAL ASSETS RATIO
200@ 55#2 ?D#? 2#22
200D 5@#C C2#6 0#@2
2020 60#? 65#0 0#D3
2022 63#C C0#@ 0#@D
2022 65#2 6@#6 0#D5
INTERPRETATION
It could be obser%ed from the abo%e table that the proprietar$ ratio of the firm beteen 200@(
2022 is fluctuatin' considerabl$# :he ma-imum proprietar$ ratio of 2#22 is obser%ed durin' 200@
and the least 0#@2 is reported durin' 200D# It is concluded that there e-ist a major %ariation in
total asset and share holders fund beteen200@ to 2022
CHART! ? PROPRIETARY RATIO
&.&TREND ANALYSIS
4or!in' capital trend anal$sis in an important techni0ue of or!in' capital
mana'ement# :rend percenta'e constitutes an important tool of interpretati%e
anal$sis of financial position of a compan$#
It indicates die chan'es& hich ha%e been ta!in'& place from time to time in
indi%idual items of current assets& current liabilities and net or!in' based on
some standard $ear and its effect on or!in' capital position#
#. C0rre2t 8i6>i8ities = 7r@isi2
TABLE NO!D
YEAR G GH$ Y
Li6>i8ities
I2 .5rre/
GY
I2 .5rre/
200@ (2 ? 2?#2 (2@#3
200D (2 2 33#0 (33#0
2020 0 0 26#@ 0
2022 2 2 3C#C 3C#C
2022 2 ? 32#5 220#0
TOTAL O GI' O GH$I#' OYI#??.# OGYI?#.?
OPN0 O PQ2 N 20
a N O$5n
b N O-$5O-Q2
$ N aRb-
a N2@#@2 crores
b N ?#2? crores
$ N2@#@2R?#2?8-<8in crore<
SL
YEAR Tre21 @680e < 50rre2t 8i6>i8ities
.I2 5rres/
2 200@ 20#5?
2 200D 2?#6@
3 2020 2@#@2
? 2022 32#?2
5 2022 3C#0@
6 2023 ?2#2?
C 202? ?5#3@
@ 2025 ?D#52
D 2026 53#66
20 202C 5C#@0
INTERPRETATION
It is obser%ed from the abo%e table that the current liabilities has been increasin' consistentl$
from 200@ to 202C #:he %alue of current liabilities durin' 200@ as 20#5? crores and it has
'ron to 3C#0@ crores at the end of the $ear 2022#In order to predict the current liabilit$
re0uirement for the financial $ear beteen 2023(202C a trend anal$sis as e-ecuted and it is
projected that a sum of 9s#8 in crore< ?2#2?& ?5#3@&?D#52&53#66&5C#@ are re0uired durin' the
respecti%e $ears#

CHART ! ( TREND RATIO O* CURRENT LIABILITY
$. Tre21 6268ysis < C0rre2t 6ssets
TABLE NO! %
YEAR G GH$ Y
C0rre2t 6ssets
I2 .5rre/
GY
I2 .5rre/
200@ (2 ? ?D#? (D@#D
200D (2 2 C2#6 (C2#6
2020 0 0 65#0 0
2022 2 2 C0#@ C0#@
2022 2 ? C2#2 2??#2
TOTAL O GI' OGH$I#' OYI&$D.% OGYI??.(
OPN0 OPQ2 N 20
a N O$ 5 n
b N O-$ 5 O-Q2
$ N a R b-
a N 65#C5crores
b N ?#?5crores
0
10
20
30
40
50
60
70
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Trend Ratio
Year
Trend ratio
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
$ N 32@#DR?#?5 8-<8in crore<

SI.N. YEAR Tre21 @680e < 50rre2t 6sset
.I2 5rres/
2 200@ 320#00
2 200D 32?#?5
3 2020 32@#D0
? 2022 333#35
5 2022 33C#@0
6 2023 3?2#25
C 202? 3?6#C
@ 2025 352#25
D 2026 355#6
20 202C 360#05
INTERPRETATION
It is obser%ed from the abo%e table that the current asset has been increasin' consistentl$ from
200@ to 2022 #:he %alue of current asset durin' 200@ as 320#00 crores and it has 'ron to
33C#@0 crores at the end of the $ear 2022#In order to predict the current asset re0uirements for the
financial $ears from 2023 to 202C a trend anal$sis as e-ecuted and it is projected that a sum of
9s# 8in crore< 3?2#25& 3?6#C& 352#25& 355#6& 360#05 are re0uired for the respecti%e $ears
CHART! " TREND RATIO O* CURRENT ASSET
&. Tre21 6268ysis < Net 7r<it
TABLE NO! #'
YEAR G GH$ Y
Net 7r<it
I2 .864;s/
GY
I2 .864;s/
$''D +$ ? $#'.D +?$#.D
$''% +# # "F.F +"F.F
$'#' ' ' ##F.# '
$'## # # #"?.# #"?.#
$'#$ $ ? $'#.$ ?'$.?
TOTAL O GI' O GH$I#' OYIF"'.% OGYIFF.'#
OPN0 O PQ2 N 20
a N O$5n
b N O-$5O-Q2
$ N aRb-
a N 252#2@ la!hs
b N C#C0 la!hs
$ N252#2@RC#C08-<8in la!hs<
SL YEAR Tre21 @680e < 7r<it
I2 864;s
2 200@ 236#C@
2 200D 2??#?@
3 2020 252#2@
? 2022 25D#@@
5 2022 26C#5@
6 2023 2C5#2@
C 202? 2@2#D@
@ 2025 2D0#6@
D 2026 2D@#3@
20 202C 206#0@
INTERPRETATION
It is e%ident from the abo%e table that the net profit has been increasin' hea%il$ from 200@ to
2022# :he %alue of profit durin' 200@ as 236#C@la!hs and it has 'ron to 26C#5@ at the end of
the $ear 2022#In order to calculate the profit for the financial $ear 2023(202C a trend anal$sis
e-ecuted and it is projected that a sum of 2C5#2@ &2@2#D@&2D0#6@&2D@#3@&206#0@ are re0uired for
the respecti%e $ears
CHART !F TREND RATIO O* PRO*IT
0
50
100
150
200
250
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Trend Value
Year
Trend value in lakhs
2008
2009
2010
2011
2012
2013
2014
2015
2016
? . Tre21 6268ysis < S68es
TABLE NO! ##
YEAR G GH$ Y
S68es
I2 .5rre/
GY
I2 .5rre/
$''D +$ ? $F.' +(?.'
$''% +# # $?.' +$?.'
$'#' ' ' &#.% '
$'## # # $$.$ $$.$
$'#$ $ ? &#.' "$.#
TOTAL O GI' O GH$I#' OYI#&".& OGYI".$
OPN0 O PQ2 N 20
a N O$5n
b N O-$5O-Q2
$ N aRb-
a N 2C#2 crores
b N 62 la!hs
$ N 2C#2 crores R 62 la!hs8-<
SL YEAR Tre21 @680e i2 s68es
.I2 5rres/
2 200@ 26#0
2 200D 26#6
3 2020 2C#2
? 2022 2C#@
5 2022 2@#5
6 2023 2D#2
C 202? 2D#C
@ 2025 30#3
D 2026 30#D
20 202C 32#5
INTERPRETATION
It is ob%ious from the abo%e table that the sales has been small %ariation from 200@ to 2022 #:he
%alue of sales durin' 200@ as 26#0 crores and it has 'ron to 2@#5 crores at the end of the $ear
2022#In order to estimate the re0uirement for the financial $ear 2023(202C a trend anal$sis
e-ecuted and it is projected that a sum of 2D#2& 2D#C&30#3&30#D&32#5 respecti%el$#
CHART! D TREND RATIO O* SALES
?. COMPARITIVE BALANCESHEET O* OIL PALM INDIA LTD
BETWEEN $''D+$'#$
TABLE NO !#$
P6rti5086rs C;62ges
I2 $''F+'D
.I2 864;s/
C;62ges
I2 $''D+'%
.I2 864;s/
C;62ges
I2$''%+#'
.I2 864;s/
C;62ges
I2 $'#'+##
.I2 864;s/
6i-ed asset8A<
(2?#3 (?C6#6 R2036#2 (6C#3
Wr4i2g 567it68
Current asset82<
R?@6#C R222#2 (66@#@ R5@C#2
Current liabilit$82<
(23#D R2@D#0 (623#2 R20@?#6
R?62#@ R332#D (22D2#0 R26C2#@
4or!in' capital8><2(2
Capital
emplo$ed8AR><
R??@#? (2??#2 RC??#2 R220?#5
Share holders fund
Share capital
0 0 0 0
9eser%e and surplus
R523#C R3?C#5 R2C3 R32?
Share holders fund
R523#C R3?C#5 R2C3 R32?
INTERPRETATION
6rom the abo%e comparati%e balance sheet it is obser%ed that the fi-ed asset has been fluctuatin'
consistentl$ from 200Cto 2022#Hea%$ chan'e in the fi-ed asset as obser%ed in the $ear 200D(20
and also the %alue of current asset decreased hea%il$ in the $ear 200D(208R2036#2<crore# It is also
obser%ed that the chan'e in the %alue of current liabilit$ is fluctuatin' from 200C to 2022# :he
minimum current liabilit$ as reported durin' 200C(0@# Increased %alue of chan'e in the
or!in' capital as obser%ed durin' the $ear 2020(22 hich amounts R26C2#@ crore# 4hile
stud$in' the chan'es in the capital emplo$ed it is ob%ious that a ma-imum of R220?#5 Crore as
injected durin' 2020(22 #:he chan'es in the %alue of share holders fund is also fluctuatin' from
200C(22#

CHAPTER -III
CHAPTER +?
?. *INDINGS, SUGGESTIONS AND CONCLUSION
?.# *INDINGS
4ith the help of trend anal$sis and financial performance measures the collected data
ere anal$sed and the folloin' are the major findin's of the stud$
:he schedule of chan'es in the or!in' capital of Ail palm India Btd is increased
9s#5#5 crore in the $ear 200@ to 200D hen comparin' to 200@(200D#
:he Current ratio for the $ear 200@ is 3#?D hich is hi'hest hile comparin' to
rest of the $ears#
:he Absolute Bi0uidit$ ratio for the $ear 2022 is ?#3C hich is loest than
comparin' to rest of the $ears#
:he li0uid ratio for the $ear 200@ is 3#26 hich is hi'hest than comparin' to rest
of the $ears#
:he proprietorLs ratio for the $ear 200D is 0#@2 hich is loest than comparin' to
rest of the $ears#
:he trend %alue of current liabilities increased in the $ear 2022 is 3C#0@ crore
hich is hi'her than comparin' to other $ears#
:he trend ratio of current asset increased in $ear 2022 the %alue is 33C#@0 hich
is hi'her than comparin' to rest of the $ears#
:he trend ratio of profit decreased for the $ear 200@ the %alue is 236#C@ hich is
loer than comparin' to rest of the $ears
:he trend %alue of sales increased in the $ear 2022 the %alue is 2@#5 hich is
hi'her than comparin' to rest of the $ears
:he comparati%e balance sheet shos the chan'es in the %alue of share holders
fund is also fluctuatin' from 200C(22

?.$ SUGGESTIONS
Bi0uidit$ position of the compan$ can be impro%ed b$ sound financial plannin'#
:he current and 0uic! ratios are almost up to the standard re0uirement so the or!in'
capital mana'ement of Ail palm India ltd is satisfactor$ and it has to be maintained #
A%ailin' more credit from its suppliers ill help to ensure efficient of or!in' capital
It is su''ested to impro%e the in%entor$ con%ersion period &mainl$ reduction in or!in'
pro'ress

?.& CONCLUSION
:his stud$ briefl$ conducted in Ail palm India Btd under the title of Ha stud$ on or!in'
capital mana'ement in Ail palm India Btd& !otta$amI# :he profit le%el of the compan$
!non from its accountin' record is encoura'in' #:he mana'ement of or!in' capital is
also maintain ell#
:he o%erall position of the compan$ is in a 'ood positionS the compan$ needs to maintain
the in%entor$ le%el# It is hoped that the compan$ ill ta!e ade0uate steps as stated in
su''estion to earn ma-imum profit and ill become one of the best compan$#
Annexure-i
BALANCESHEET
SCOPE *OR *UTURE WORKS

P6rti5086rs M6r
'D
M6r
'%
M6r
#'
M6r
##
M6r
#$
Sources of funds
:otal share capital 22#C@ 22#C@ 22#C@ 22#C@ 22#C@
9eser%es ?3#?@ ?6#D5 ?@#6D 52#D3 5@#C5
:otal 55#2C 5@#C? 60#?@ 63#C2 C0#5?
A778i56ti2 < <021s
6IPE+ ASSE:
*ross bloc! 2D#62 30#2@ 33#?0 33#5? 33#5?
Bess7 accum#
+epreciation
2D#60 20#63 22#@2 22#63 22#3@
Net bloc! 20#02 D#5? 22#5@ 20#D0 20#D0
+e%elopment of propert$ 6#C0 6#D2 6#D2 C#5C 6#@C
Capital or! in pro'ress C66C@ C2520@#06 2?CC?3D#03 C@#D2 20#26
In%estments 2#00 2#00 2#00 2#00 2#00
+eferred ta- asset8net< 2#25 2#62 2#5D 3#2C 3#CC
CA&Boans K Ad%ances
In%entories ?#56 2#?5 3#22 3#C0 3#@6
Sundr$ debtors 623@2? 62C30D#00 63?525#00 2?D@2C 22@005
Cash and ban! balance 3@#3D ?3#03 ?2#6C ?2#D5 ?2#02
Boans and ad%ances 6#?5 26#23 20#05 25#20 25#3?
:A:AB ?D#?C C2#6D 65#00 C0#@C 220#2D
Bess7Cl And )ro%isions
Current liabilities ?#?2 5#30 ?#22 D#5D D#22
)ro%isions D#C6 2C#C@ 22#63 2@#20 20#3C
:otal CB K pro%isions 2?#2@ 33#0D 26#@5 3C#C0 3C#C0
net current assets 35#2@ 3@#60 3@#2? 33#2C 33#2C
TOTAL 55#2C 5@#C? 60#?@ 63#C2 63#C2
ANNEXURE-II
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+elhi#
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