Professional Documents
Culture Documents
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O.
1
CHAPTER-1
Introduction to project
company profile
2
CHAPTER-2
Objective of study
research methodology
3
CHAPTER-3
Analysis of working
capital management
4
CHAPTER-4
Data analysis and
interpretation
5
CHAPTER-5
Limitation of the project
and
Suggestion
6
BIBLIOGRAPHY
PAGE
NO.
1-13
14-19
20-33
34-54
55-58
59-60
QUESTIONNAIRE
61-63
CHAPTER-1
INTRODUCTION TO
PROJECT AND
COMPANY PROFILE
INTRODUCTION
INTRODUCTION TO PROJECT
The project is based on analysis of
working capital at twin wheels &
components pvt. Ltd. company . This
company deals in manufacturing of cycle
parts. The turnover of this company is 3-4
crore. This company sells all bicycle parts
to BHOGAL & SONS COMPANY
(LUDHIANA).
Production of bicycles
132.46 lakh
107.20 lakh
Export in
(crore)
360.54
176.94
Import in
(crore)
194.32
129.65
COMPANY PROFILE
INTRODUCTION
Based in Ludhiana, the industrial hub of Punjab (INDIA),
Our mission :
"To use our technical expertise in delivering quality
products with total commitment to ensuring customer
satisfication.
Our Products :
This company manufacture
pedalsets , all types of canopy.
Hubcone
complete
Works :
Twin wheels company works with Bhogal & Sons
company. Bhogal & Sons company manufacturing bicycle
and bicycle components . Bhogal & sons company export
bicycle to European markets.
Our people :
Well-educated and trained personnel form the backbone
of our organization.
Our commitment :
Our urge to excel in our field, the encouraging
support from our customers, their trust in our
products, a strong team of suppliers ever-alert to meet
the quality demands and un-flinching dedication of
our employees will always keep us thirsting for
excellence. Quality consciousness is a part of our
work culture and customer satisfaction is our overriding concern.
Swot analysis
Strengths
prominent player
2. Steady revenue growth
3. Leading position gives power to attract new
customers
4. Support sales activities by understanding customers'
businesses better
Weaknesses
Opportunities
Threats
1.Strong competition
2.Competitive advertising and distribution network of
competitors
3. Dependence on third party suppliers
ORGANISATIONAL
HIRERACHY
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CHAPTER-2
OBJECTIVE OF STUDY
& RESEARCH
METHODOLOGY
ANALYSIS OF OF PROJECT
OBJECTIVE
WORKING CAPITAL
MANAGEMENT
Research methodology
The research methodology which is followed
to carry out this project i.e. the universe,
locale of our study, Sample selection, Data
Collection, data analysis and field experience.
As in organizations like TWIN WHEELS,
:15
STATISTICAL DESIGN
Since the study was quantitative in nature.
Primary data : I collect primary data
with conversation with twin wheels
accounts section department head
MR.pawan kumar (C.A.). He provided
information regarding company products
and much more. I also collect data by
interacting with 15 respondents.
Research design
Step 1 : To study the financial statements
of twin wheels.
Step 2 : Data analysis of working capital
through estimation of working capital.
Step 3 : comparison of base year data with
previous year data.
Analysis of Data
The study is qualitative in nature. The report
has been prepared after doing a qualitative
analysis of the data collected. Some bar
charts, graphs and pie charts are used to
make the data more understandable to the
reader.
Field Experience
CHAPTER 3
ANALYSIS OF
WORKING CAPITAL
MANAGEMENT
INTRODUCTION
In financial management, two important
decisions are very vital and crucial. They
are decision regarding fixed assets/fixed
capital and decision regarding working
capital/current assets. Both are important
and a firm always analyzes their effect to
final impact upon profitability and risk.
Fixed capital refers to the
funds invested in such fixed or permanent
assets as land, building, and machinery
etc. Whereas working capital refers to the
funds locked up in materials, work in
progress, finished goods, receivables, and
cash etc.
Thus, in very simple words, working
capital may be defined as capital
invested in current assets. Here
current assets are those assets, which can
be converted into cash within a short
period of time and the cash received is
again invested into these assets. Thus, it
operating cycle
R.M.
consumption per day
Average stock of R.M.= 315615 + 926760
=6211875
2
Average consumption of raw material
=315615+11273026926760=10661881.9
So , raw material holding period=6211875
*365
10661881.9
=21 days
2. Debtors collection period=Average
debtors
Credit
sales per day
Average debtors=8929506 =4464753
2
Debtors collection period =4464753
*365
27139832
= 60 days
METHODS OF ESTIMATING
WORKING CAPITAL
REQUIREMENT
1.PERCENTAGE OF SALES METHOD
2.REGRESSION ANALYSIS METHOD
1.PERCENTAGE OF SALES
METHOD
This method of estimating working
capital requirement is based on the
assumption that the level of working
% to
sales
2014-15
27,139,832 100
Current
10,417,641
Estimate
working
capital
40,000,0
00
assest
.55
Current 9,556,633.
liabilities 81
Working 861,007.74 32
capital
12,800,0
00
Interpretation
In this method, we find out the
estimation of working capital of year
2015-16 . we find the % of sales
through sales of 2014-15 and working
capital i.e. 32%.We estimate the sales of
year 2015-16 is Rs.40,000,000 so the
requirement of working capital for the
year 20115-16 on an estimated sales of
Rs. 40,000,000 shall be Rs.12,800,000
i.e. 32% of Rs. 40,000,000.
Year
Sales (Rs.
Crore)
Working
capital
(Rs. Crore)
2013-14
27,695,840
511,211.1
2014-15
27,139,832
861,007.74
working xy
capital
(Rs. lac)
(y)
5
10
X2
2014-15 3
n=2
y=138 xy
=34
Year
x=5
y = na +bx
xy =ax +bx2
24
x2 =13
(i)
34 =5a +13b
(ii)
INTERPRETATION
Chapter -4
1.Current ratio
Current ratio is calculated by dividing current
assets by current liabilities:
Current ratio =
current assest
Current liabilities
Current assets include cash and those assets
that can be converted into cash within a year,
Significance:
It indicates the availability of current
assets in rupees for every one rupee of
current liability. A ratio of greater than
one means that the firm has more current
assets than current claims against them.
In India, the conventional rule is to have a
ratio of 2:1 .
The current ratio represents the margin of
safety for the creditors. The higher the
current ratio, the greater the margin of
safety; the larger the amount of current
assets in relation to current liabilities, the
1.12
1.11
1.1
1.09
2014
2015
2. Quick ratio
This ratio establishes the relationship
between quick or liquid assets and
current liabilities.
Significance
1.2
1
0.8
0.6
Series 3
0.4
0.2
0
2014
2015
Interpretation
For the year 2014 the ratio of quick asset
is .97 .it is quite satisfactory to pay off
liabilities. And the year 2015 the quick
asset ratio is also .97 .
Significance
76
74
72
70
68
66
Series 3
64
62
60
58
56
2014
2015
Interpretation
For the year 2014 the inventory turnover ratio
is 74 times and the year 2015 the ratio is 62
times. The ratio of 2015 is less than 2014. So
company should increase this ratio so that
more sales are made.
Significance
Debtors Turnover indicates the number of
times debtors turnover each year.
Generally, the higher the value of debtors
turnover, the more efficient the
management of the company.
4
3.5
3
2.5
2
Series 3
1.5
1
0.5
0
2014
2015
Interpretation
The debtor turnover ratio of 2015 is 3
times is almost similar to 2014 ratio. So the
ratio of company is satisfactory because
higher the ratio , the more efficient the
company.
Significance
A high creditors turnover ratio or a
lower credit period ratio signifies that
the creditors are being paid promptly.
This situation enhances the credit
worthiness of the company. However a
very favorable ratio to this effect also
shows that the business is not taking the
full advantage of the credit facilities
allowed by the creditors. We can
1.42
1.4
1.38
1.36
1.34
2014
2015
80
70
60
50
40
Series 3
30
20
10
0
2014
2015
Significance
1. The ratio of fixed asset to net worth
2.
3.
4.
112.20%
112.00%
111.80%
111.60%
111.40%
2014
2015
Interpretation
The fixed asset to proprietors funds
ratio is more than 100% in both year .
so the owners capital is not sufficient
to finance the fixed asset and the firm
has to depend upon outsiders funds.
290%
280%
270%
260%
250%
2014
2015
Interpretation
The ratio of current asset to
proprietors funds of 2014 is 330% and
the 2015 is 283% . so the owners
capital invested in current asset is
given above. It depends upon the
nature of company which amount of
owners capital invested in current
asset.
8. Equity ratio
This ratio establishes the relationship
between shareholders funds to total
assets of the firm. This ratio is an
important ratio for determining long
term solvency of the firm . The
shareholders funds are equity share
capital ,preference share capital ,
undistributed profits , reserve and
surpluses.
Equity ratio = shareholders funds
Total asset
Ratio of 2014 = 22%
Ratio of 2015 =25%
26%
25%
25%
24%
24%
23%
Series 3
23%
22%
22%
21%
21%
2014
2015
Interpretation
In this company , the equity ratio of
2014 & 2015 are 22% and 25%. Higher
the ratio , better is the solvency of the
company. So the ratio of 2015 is more
than 2014. So company position
improves in 2015.
2014
2015
Interpretation
The higher capital gearing ratio is not
good for company . So the capital gearing
ratio in both year is low so company has
satisfactory position.
10.
145%
140%
135%
130%
Series 3
125%
120%
115%
2014
2015
Interpretation
CHAPTER -5
LIMITATIONS ,
SUGGESTIONS
Limitations of
working capital
3.
4.
5.
6.
7.
capital
gives
rise
to
SUGGESTIONS
Working capital of the company has increasing
every year. Profit also increasing every year this is
good sign for the company. It has to maintain it
further, to run the business long term.
Chapter -6
Bibliography
SITES
www.academia.edu
www.streetdirectory.com
www.allprojectsreports.com
www.bhogal.com
www.wikipedia.org
BOOKS
Management accounting &
business finance- SHASHI K. GUPTA
& Dr. R.K. SHARMA
QUESTIONNAIRE
Very
No ------
Dont
b. Wholesale
d.