A Study On: Master OF Business Administration Topic-Finance S Under THE Supervision AND Esteemed Guidance OF

A STUDY ON
͞WORKING CAPITAL MANAGEMENT͟

WITH REFERENCE TO
YUSAFI ENTERPRISES
A Project report submitted in to JNTU-Kakinada in partial fulfilment for the award of degree of the
MASTER OF BUSINESS ADMINISTRATION
TOPIC-FINANCE
SUBMITTED BY
VEMPADA DINAKAR RAJU (16521E0046)
UNDER THE SUPERVISION AND ESTEEMED GUIDANCE OF
Professor: E.Y.REDDY ASSISTANT PROFESSOR, M.B.A
DEPARTMENT OF MANAGEMENT STUDIES

VISHWANADHA INSTITUTE OF TECHNOLOGY AND MANAGEMENT
(Affiliated To Jawaharlal Nehru Technology University - Kakinada)
MINDIVANIPALEM VILLAGE, SONTYAM PANCHAYAT,
ANANDAPURAM,VISHAKAPATNAM-531173
CERTIFICATE
This is to certify that the project titled ͞ WORKING CAPITAL MANAGEMENT͟ with reference to
YUSAFI ENTERPRISES, Visakhapatnam Submitted by V.DINAKAR RAJU is sufficient as partial fulfillment
for the award of master of business administration in VISWANADHA INSTITUTE OF TECHNOLOGY AND
MANAGEMENT, during the academic year 2016-2018 is a record of bonafide word carried out under my
guidance and supervision
E.Y.REDDY U.RAM BABU

PROJECT GUIDE. Head of the Department
Date:
Station: Visakhapatnam
DECLARATION
I hereby declare that the project work titled ͞WORKING CAPITAL MANAGEMENT͟ with regard to
YUSAFI ENTERPRISES, Visakhapatnam is an original work done by me and submitted to VISHWANADHA
INSTITUTE OF TECHNOLOGY AND MANAGEMENT, affiliated to JNTU-K, Visakhapatnam, during the
academic year 2016-2018 in partial fulfillment of requirement for the award of MASTER OF BUSINESS
ADMINISTRATION under the supervision of E.Y.REDDY, Assistant professor .
Date: (V.DINAKAR RAJU)

Place: Visakhapatnam Reg. No:16521E0046
ACKNOWLEDGEMENT
I express my gratitude to U.RAMU, Head of the Department, for giving me permission to undertake the
study in that organization.
I sincerely express my deep sense of my honorable guide member of department of management studies
E.Y.REDDY for a taking special interest in my project work and giving valuable suggestion throughout my
project.
I am thankful to V.SRIDHAR PATNAIK, principal, vishwanadha institute of technology and management ,
Visakhapatnam for giving me the opportunity to do the project work.
I would like to thank N.SHABBIR manager of YUSAFI ENTERPRISES, Visakhapatnam for his valuable
guidance in completing this project.
Station:
Date: (V.DINAKAR RAJU)
INDEX
CHAPTER-I
INTRODUCTION
NEED FOR THE STUDY
OBJECTIVES
METHODOLOGY
LIMITATIONS
CHAPTER-II
INDUSTRY PROFILE
COMPANY PROFILE
CHAPTER-III
THEORITICAL FRAME WORK
CHAPTER-IV
DATA ANALYSIS & INTRPRITATION
CHAPTER-V
FINDINGS
SUGGESTIONS
CONCLUSION
CHAPTER-1
INTRODUCTION
Capital required for a business can be classified under two main financial management refers
to the efficient and effective management of money (funds) in such a manner as to accomplish
the objectives of the organization. It is the specialized function directly associated with the top
management. The significance
Categories they are:
1. Fixed capital. 2. Working capital.
Every business needs, funds for two purposes-for its establishment and to carry out its day-
today operations .long –term funds are required to create production facilities through
purchase of fixed assets such as plant and machinery, land, building furniture, etc.
investments in these assets represents that part of firms capital which is blocked on a
permanent or fixed basis is called fixed capital. Funds are also needed for short-term purposes
for the purchase of raw materials, payment of wages and other day-to-day expenses, etc. these
funds are known as working capital. In simple words, Working capital refers to that part of
the firm’s capital which is required for financing short term or current assets such as cash,
marketable securities, debtors and inventories. Funds, thus, invested in current assets keep
revolving fast and are being constantly converted into cash and these cash flows out again in
exchange for other current assets. Hence, it is also known as revolving or circulating or short -
term capital.
Working capital management is significant in financial management. It plays a vital role in
keeping the wheel of the business running. Every business requires capital, without it can’t be
promoted. Investment decisions is concerned with investment in current assets and fixed
assets .working capital plays a key role in a business enterprise just as the role of heart
inhuman body. It acts as grease to run the wheels of fixed assets .its effective provision can
ensure the success of business while its inefficient management can lead not only to loss but
also to the ultimate downfall of what otherwise might be considered as a promising concern.
Efficiency of a business enterprise depends largely on its ability to its working capital.
Working capital management is one of the important facts of affirms over all financial.
Management for increasing shareholder’s wealth a firm has to analyze the effect of fixed
Assets and current assets and on its returns and risk. Working management of current assets.
The management of current assets on the basis of the following points.
1. Current assets are for short period while fixed assets are for more than one year.
2. The large holding of current assets ,especially cash, strengthens liquidity position but also
reduce overall profitability ,and to maintain an optimal level of liquidity and profitability ,risk
return trade off is involved holding current assets.
DEFINITION:
According to Ralph Kennedy and steward mc Muller “a study of working capital is of major
Importance to internal and external analysis because of its close relationship with the current
Day to day operation of business”
“Working capital is a financial metric which represents operating liquidity available to a
business, organization or other entity, including governmental entity. Along with fixed assets
such as plant and equipment, working capital is considered a part of operating capital.
NEED FOR THE STUDY
The main concern is of the influence of external environment on business providing a modern
dimension to business to management .they find solution for many problems in the aspect of
financial analysis. Financial establishes inter relationship that exists among. The different
items appeared in the financial statements, which are effectively helpful to describe the
company should monitor key indication of operating performance and where possible must
compare, itself with the competitors in the industry.
Indus hospital believes in delivering quality care to its patients at all times. Indus has been
providing quality services to patients from all walks of life and of different economic strata.
Indus was started with the sole aim of providing quality healthcare to patients by a team of
dedicated specialists who felt the need for a specialized healthcare facility in the city of
Visakhapatnam. To know the company short-term assets and its short-term liabilities. The
goal of working capital management is to ensure that a organization is able to continue its
operations and that it has sufficient ability to satisfy both maturing short-term debt and
upcoming operational expenses. The management of working capital involves managing
inventories, accounts receivable and payable, and cash.

OBJECTIVES
1) To study the working capital management in the organization.
2) To understand briefly the theoretical background of financial performance
3) To study the theoretical framework of working capital.
4) To examine or analyze & interpret the received data.
5) To suggest the organization to take certain changes (or) to maintain same level of work
METHODOLOGY OF THE STUDY
To achieve the objective of studying the stock market data has been collected.
Research methodology carried for this study can be two types:
A. Primary Data
B. Secondary Data
A) PRIMARY DATA:
It is the data, which is collected for the first time keeping the Objective in the mind.
However collection of primary data in international and domestic research is an expensive
proposition in terms of both money and time and gathering primary data in international
environment pose a variety of problems that are related to social and cultural factors and
level of economic development. In preparation of this project report i depended more on
secondary data.
B) SECONDARY DATA:
It refers to information already collected by someone else, either an individual or an
organization for some other purpose earlier. The secondary data was gathered from
exporters encyclopedia, scripts year book and other international pharmaceutical
magazines, besides this information the company annual reports brochures and computer
data organization has provided information about group, company activities, and
economic policies of various countries.

LIMITATIONS FOR THE STUDY
1.I had to solely depend upon the talks that I had with my senior executives in getting
Information, thinking it to be true.
2. As the senior executive was busy with their work so it was very difficult to get all the
information completely.
3. Primary data is limited
4.The major problem in completing the project is the time of 8 weeks. This is very
Less in order to know about the overall objectives of the study.
5. It is not possible to get cent percent correct information. The research was made according
to the information available from related departments and through annual reports published.
CHAPTER-2
INDUSTRIAL PROFILE
Established in the year 1981, in Mumbai, (Maharashtra, India), we “Sonai Enterprises” are the
renowned Manufacturer,Exporter and Supplier of distinguished range of Rubber Gaskets, Rubber
Sheets, Rubber Seals, Rubber Hoses, Expansion Bellows, Rubber Gaskets, Cork Sheets, Metal
Washers, P.U. Seals, etc. Highly durable and guaranteed of their quality, these products are
precisely manufactured using utmost-grade raw material and contemporary machines in strict
compliance with the set industry standards. Our offered products remain in great demands across
the market, owing to their durability, easy installation, corrosion resistance and ability to
withstand high temperature. Our offered products are extensively used in sewage application,
waste water pumps, petrochemicals, and refinery, and general chemicals, mechanical and
automotive industries. In order to meet clients' diverse requirements, we offer these products in
various sizes and dimensions.
Our company has developed a state-of-the-art infrastructure unit that is divided into various sub-
functional units such as procuring, production, quality testing, packaging, sales & marketing, etc.
Activities these units are supervised by our adept professionals so as to increase production rate.
Spread over a huge area of land, our infrastructure is fully packed with sophisticated machines,
advanced equipment and latest tools. The machines installed at our infrastructure unit are
upgraded at regular interval of time so as to attain high efficiency and quality in the
manufacturing process. Apart from this, we have a diligent team of industry experts who have
been recruited on the basis of their experience and proficiency. Backed by their consistent efforts
and hard-working approach, we have been able to meet predefined goal of the organization.
Our commitment towards superb quality enforces us to test the entire range on various
parameters. For strictly adhering to the same, we have built up a separate quality testing unit. It
unit is well equipped with all the requisite tools required for testing these products. In addition to
this, we have hired a responsible team of quality inspectors that is well aware of all quality
parameters. By offering our clients the finest quality products, we have gained appreciation from
every nook and corner of the world. Our ethical business policies, reasonable prices and
transparent dealings are some of the factors that enable us to reach at the peak of the success. To
attain maximum clients' satisfaction, we understand their exact requirements and offer them
products accordingly. Also, we accept payment through easy modes like cash, cheque and DD
for clients' convenience.
FACTSHEET
Year of establishment 1981

Legal status of firm Sole proprietor ship
Nature of business Manufacture
Number of employees Up to 10 people
Turn over Up to 50 lach
OUR INFRASTUCTURE
Supported by our ultra-modern infrastructure unit, we have been able to manufacture our
products as per the set industry standards. Segregated into various sub-functional units such as
procurement, manufacturing, quality testing, packing and sale & marketing, our infrastructural
unit empowers us to carry the entire business operation efficiently and smoothly supervised by
our experienced professionals these units work in close coordination with one another and
Accelerate the production rate. To maintain consistency in our quality, we upgrade all the
machines at regular interval of time
OUR TEAM & STAFF
We are baked by our diligent team of professional in manufacturing and supplying an optimum
quality range of products. In our team, we have skilled engineers, quality inspectors, sales &
marketing executive and other supporting staff. Recruited on the basis of its skill and
experience, these profeeional are highly responsible and dedicated towards their work. Our
professional possesses immense experience in their in respective fields and well-aware of latest
technological development. By utilizing their skill, we have been able to meet the bulk and
urgent order of quality assurance.
Being the fastest growing organizating, we are aimed at providing superb quality products. Our
intensive quality management techniques, added by thorough search of the modern market
allow us to offer an unmatchable range of products, for testing these products; we have
constructed an advanced quality testing unit that is installed with all the necessary tools. Apart
from this, the procured raw material is also tested on defined parameters of qulity.Our adept
quality controllers put their hard core efforts eradicate to eradicate any possible defect form
the entire products range.

RUBBER SEALS
Owing to our expertise, we are manufacturing and supplying an extensive array of rubber seals
such as rubber bonded seals, polyurethane seals, viton seals, etc.manufactured using premium
quality rubber that is sourced from the trustworthy vendors of the market, these seals complies
with the set industrial norms.avaiable in various shapes and sizes as per the stipulations
provided by the clients, these seals are high in demands for their optimum strength, fine finish
and durability.
RUBBER BONDED SEALS

Owing to our expertise in the domain, we have been able to offer our clients an excellent
quality rubber bonded seals. These seals are manufactured using premium quality rubber under
stiff surveillance of our experts.furthermore; the seals offered by us are designed in accordance
with the international quality standards. Our offered seals are widely used for automotive
parts. Our global clients can avail these seals form us with no hassle.
POLYURETHANE SEALS
Amidst our wide range of qualitative rubber seals, our supreme quality polyurethane seals is
highly demanded in the market. in order to ensure our defect-free policy, our team of experts
checks the entire array on various parameters. Apart from this, we provide these seals in different
sizes, in order to meet varied needs of clients.futhermore; the offered range is used in hydraulic
and pneumatic machine.

VITON SEALS
By keeping track with the latest market developments, we are actively engaged in offering a
broad range of viton seals. The offered seals are manufactured using premium quality viton
rubber that is procured form the trustworthy vendors of the market.further,our team of adept
profeeionals closely inspects the production process in order to put an end to deliver a flawless
range at the client’s end.
CHEVRONPACKING SEALS
Being a quality-centric company, we are engaged in offering a superior quality chevron packing
saels.Our offered seals are available in variegated sizes, diameters and thickness that are highly
demanded in various automotive and engineering industries. In order to ensure their quality, our
offered seals are closely tested on various quality parameters as per the set universal morms.
Furthemore,our offered seals can be availed by our clients at reasonable prices.
LIP SEALS
With our immense industrial experience, we are engaged in offering a wide range of lip seals. In
accordance with the international quality standards, our offered seals are manufactured using
supreme quality raw material and cutting edge technology. Available in various specifications,
our offered seals are highly durable in nature and easy to install.moreover, we offer these seals
to our clients at affordable prices.
WIPER SEALS
Our organization is delicately engaged in offering an extensive range of wiper seals .
Manufactured using supreme quality raw material and a modern teehnology, the offered seals
are highly demanded in both national as well as international market. Our quality controllers lay
emphasis on overall quality of our offered range while manufacturing. Apart from this, our
offered seals can be availed by our valued clients at affordable prices.
INDUSTRIAL.P.U.SEALS
We are known as a leading manufacturer and supplier of superior quality Industrial P.U.
Seals such as P.U. Rod Seals, P.U. U Seals, etc. These products are manufactured from the
premium grade polyurethane with the help of well installed machinery at our production unit.
The offered range is widely used in various hydraulic applications. The offered seals are popular
in the market for their attributes such as excellent finish, high tensile strength and durability.
PU ROAD SEALS
Incorporated with the ultra modern manufacturing unit talented professionals, we are able to
offer a wide gamut of P.U Road seals. These are manufactured using high polyurethane material
and innovative technology in accordance with globally accepted norms of quality. The offered
range id widely acclaimed in the market, owing to its specific attributes like fine finish offered
our clients can avail these seals form us within stipulated time period.
P.U SEALS
Leveraging on our vast experience and thorough research of the market, we are engaged in
offering a supreme quality P.U seals. These are made available in various shapes and sizes to
meet the varied needs of our clents.the seals offered by us are manufactured in compliance with
industry set standard using quality-assured polyurethane material. This range is made available
to our client’s at the most affordable price.

P.U.U SEALS
Backed by a diligent team of professionals, we have been able to manufacture, export, trade and
supply an exquisite range of P.U. U Seals. Our offered seals are manufactured using premium
quality polyurethane and modern technology under the guidance of our experts. Highly
acclaimed in various industries, the offered seals are widely demanded for hydraulic
applications. Moreover, clients can avail these seals from us at nominal prices.
P.U. WIPERS
We are a reliable entity in industry, engaged in offering an exclusive range of P.U. wipers. The
offered wipers are highly renowned in both national as well as international market for
featuring variegated attributes. In adherence with the international quality stabdrads, our
offered wipers are tested on numerous quality parameters to ensure their flawlessness.
Furthermore, we offer these wipers to our clients after assuring that our offered range is the
best in quality.
SILICONE RUBBER PRODUCTS

Symbolic to all the success that we have gained in this domain remains our status as a prominent
manufacturer, exporter and supplier Silicone Rubber Products such as Silicone Sleeves, Extruded
Silicone Products, Silicone Sponges, Silicone Tubes, Silicone Cords, Silicone Transparent Tubes
and many more items. These products are manufactured by our professionals using high grade
factor inputs in conformity with international quality standards. Acknowledged for accurate
dimensions, high strength, perfect finish and durability, these are broadly used in automotive and
engineering industries.
SILICONE TUBES
In our wide range of products, we are offering an immaculate range of silicone tubes.these is
manufactured using supreme graded silicon and latest technology under guidance of our highly
skilled professionals. Our offered range is available in diverse specifications and can be
customized as per the clients ‘specifications within promised time frame. Acclaimed for its
accurate dimensions, heat resistance and excellent finish, the offered range is expansively used in
construcation, automotive and engineering industries
SILICONE CORD
Fostered by supports form our highly experienced team of experts, we are able to offer a superior
quality silicon cords. In adherence with the set internatinaoal norms, our offered cords are
manufactured using superior quality raw material and innovative technology. To deliver a defect
free range at clients end, the offered corad cords are rigorously tested on various quality
parameters.moreover, the offered cord can be purchased by our clients at affordable prices.
HYDRAULICS SEALS
With the help of our state-of-the-art infrastructure unit, we are able to manufacture and supply
superlative quality hydraulic seals. The offered seals are used in various hydraulic applications
for providing a way for fluid power to be converted linear motion.further, these seals are
known for their excellent quality and fine finish in the market.moreover, clients can avail these
seals form us at reasonable prices.

COMPANY PROFILE
We ͞YUSUFI ENTERPRISES͟ are in the field of Pneumatic Machine Automation and Supply of
Stainless Steel/Carbon Steel Pipe, oil seal, Forge Fittings, & Flanges with IBR and NON IBR since
last 28 years. We had prepared express strides in knowledge and act and are now days
accepted by our respected clients as the most consistent ͞ONE STOP SHOP͟ for their flexible
requirements. Their continuous support bears ample acknowledgment for the confidence
reposed in us. We are supplying to all kinds of Process & Chemical, Refineries & Petrochemicals,
Fertilizers, Drugs & Pharmaceuticals, Thermal Power Stations, Nuclear & Automatic Power
Stations, Textiles Dyes & Intermediates, Paints & Varnishes, Sugar, Breweries & Distilleries,
Soaps & Detergents, Steel Plants, Food & Oil Industry, Solvent Extraction Plants, Granite
Factories, Sewage, Effluent & Water Treatment, Cooling Water, Sip Yards and Marine
Management, Pulp & Paper, LPG Bottling Plants, Printing & Packing.
MISSION AND VISION

To be amongst the most admire companies in India committed to be excellence.
MISSION:
1. Be a customer obsessed company
2. Deliver enhanced value at all stake holders
3. Most profitable company
4. Motivated and committed team developed for high performance organization.
MARKETING STRATEGY:
Strategic thinking is key to the evolution of successful marketing strategies of Unifi
Enterprises this involves the following analysis

1. UNDERSTANDING MARKET:
Strategic perspective of the market requires skilful analysis of the trend and how they
affect the market size and demand for the firm’s product.
1. FINDING MARKET:
Price, service, convenience and technology are some of the niches in Indian market.
2. PRODUCT AND SERVICE PLANNING
Analysis of the customer’s promotions of the brand, both of the firm and competitors,
, besides an analysis of the situation in which the customs uses the product.
3. DISTRIBUTION:
Structural changes in inventory management, mobile distribution are some of the key
factors that are going to affect the distribution process in the Indian market.
4. MANAGING FOR RESULTS:
With the pressure on costs prices and margins, marketers, will have to effective
utilization of every rupee spent in marketing.
5. MARKET OPPORTUNITY OF USIFI ENTERPRISES:
Identification of market opportunity is critical before the management of affirm takes a
Decision to launch or diversify in any product area this involves analysis of the following
1. Size of the market
2. How well the market is served
3. Prospective inches
4. Marketing mix required to succeed
5. Core competencies required
O-RINGS:
An O-ring, also known as a packing, or a Toric joint, is a mechanical gasket in the shape of
a torus; it is a loop of Elastomer with a round cross-section, designed to be seated in a groove
and compressed during assembly between two or more parts, creating a seal at the interface.
The O-ring may be used in static applications or in dynamic applications where there is
relative motion between the parts and the O-ring. Dynamic examples include
rotating pump shafts and cylinder pistons.
O-rings are one of the most common seals used in machine design because they are
inexpensive, easy to make, reliable, and have simple mounting requirements. They can seal
tens of megapascals (thousands of psi) of pressure.
O-Rings are torus-shaped (doughnut-shaped) objects made from elastomeric compounds such
as natural or synthetic rubber, and are used to seal mechanical parts against fluid movement
(air or liquid).
O-R ings perform their sealing action by deforming to take the shape of their cavity, after
being oversized to guarantee a predetermined interference fit. The seal is designed to have a
point contact between the o-ring and sealing faces. This allows a high local stress, able to
contain high pressure, without exceeding the yield stress of the o-ring body. The flexible
nature of o-ring materials accommodates imperfections in the mounting parts. They can
withstand fluid pressures up to 100 bar (1500lbs/in2) provided such seals are properly
designed and applied. The pressure ratings of the dynamic O-ring seal can be enhanced by
using suitable back-up rings. The back-up rings may be of Acetal resin, PTFE or Fabric
reinforced rubber.
An O-Ring is specified by its inner diameter, cross-section diameter, material provided
hardness/udometer (typically defined by the Shore A hardness), and material composition.
"Vijay seals" hold stocks of most commercially available O-Rings in both Metric and
Imperial sizes, available in the following materials: - Nitrile Butadiene, Silicone, Poly Tetra
Fluor Ethylene (PTFE), Neoprene, Viton (Fluorocarbon), Polyurethane, Ethylene Propylene
Diene Monomer (EPDM).
CONTENTS:
1. Manufacturing
2. History
3. Theory and design
4. Sizes
5. Material
6. Other seals
7. Failure modes
8. Challenger disaster
MANUFACTURING:
O-rings can be produced by extrusion, injection molding, pressure molding or transfer
molding.
HISTORY:
The first patent for the O-ring is dated May 12, 1896 as a Swedish patent. J. O. Lundberg, the
inventor of the O-ring, received the patent. The US patent for the O-ring was filed in 1937 by
a then 72-year-old Danish-born machinist, Niles Christensen. He came to the USA in 1891
and soon after that patented an air brake system for streetcars (trams). Despite his legal
efforts, his intellectual property rights were passed from company to company until they
ended up at Westinghouse. During World War II, the US government commandeered the O-
ring patent as a critical war-related item and gave the right to manufacture to other
organizations. Christensen received a lump sum payment of US$75,000 for his efforts.
Litigation resulted in a $100,000 payment to his heirs in 1971, 19 years after his death.
THEORY OF DESIGN:
O-ring mounting for an ultra-high vacuum application. Pressure distribution within the cross
section of the O-ring The orange line are hard surfaces, which apply high pressure. The fluid
in the seams has lore pressure. The soft O-ring bridges the pressure over the seams.
O-rings are available in various metric and inch standard sizes. Sizes are specified by the
inside diameter and the cross section diameter (thickness). In the US the most common
standard inch sizes are per SAE AS568C specification (e.g. AS568-214). ISO 3601-1:2012
contains the most commonly used standard sizes, both inch and metric, worldwide.
TYPICAL APPLICATIONS:
Successful O-ring joint design requires a rigid mechanical mounting that applies a predictable
deformation to the O-ring. This introduces a calculated mechanical stress at the O-ring
contacting surfaces. As long as the pressure of the fluid being contained does not exceed the
contact stress of the O-ring, leaking cannot occur. Fortunately, the pressure of the contained
fluid transfers through the essentially incompressible O-ring material, and the contact stress
rises with increasing pressure. For this reason, an O-ring can easily seal high pressure as long
as it does not fail mechanically. The most common failure is extrusion through the mating
parts.
The seal is designed to have a point contact between the O-ring and sealing faces. This allows
a high local stress, able to contain high pressure, without exceeding the yield stress of the O-
ring body. The flexible nature of O-ring materials accommodates imperfections in the
mounting parts. But it is still important to maintain good surface finish of those mating parts,
especially at low temperatures where the seal rubber reaches its glass transition
temperature and becomes increasingly crystalline. Surface finish is also especially important
in dynamic applications. A surface finish that is too rough will abrade the surface of the O-
ring, and a surface that is too smooth will not allow the seal to be adequately lubricated by a
fluid film.
VACUUM APPLICATIONS:
In vacuum applications, the permeability of the material makes point contacts quite useless.
Instead, higher mounting forces are used and the ring fills the whole groove. Also,
round back-up rings are used to save the ring from excessive deformation [6][7][8] Because the
ring feels the ambient pressure and the partial pressure of gases only at the seal, their
gradients will be steep near the seal and shallow in the bulk (opposite to the gradient of the
contact stress [9] See: Vacuum flange#KF.2FQF. High-vacuum systems below
10−9 Torre use copper or nickel O-rings. Also, vacuum systems that have to be immersed
in liquid nitrogen use indium O-rings, because rubber becomes hard and brittle at low
temperatures.
HIGH TEMPERATURE APPLICATIONS:

In some high-temperature applications, O-rings may need to be mounted in a tangentially
compressed state, to compensate for the Gow-Joule effect.
SIZES:
O-rings come in a variety of sizes British Standard (BS) which are imperial sizes or metric
sizes. Typical dimensions of an O-ring are internal dimension (id), outer dimension (od) and
thickness Metric O-rings are usually defined by the internal dimension x the cross section.
Typical part number for a metric O-ring - ID x CS [material & shore hardness] 2x1N70 =
defines this O-ring as 2mm id with 1mm cross section made from Nitrile rubber which is
70Sh. BS O-rings are defines by a standard reference.
MATERIAL:
O-ring selection is based on chemical compatibility, application temperature, sealing
pressure, lubrication requirements, udometer, size and cost.
Synthetic rubbers - Thermosets:
 Butadiene rubber (BR)
 Butyl rubber (IIR)
 Chlorosulfonated polyethylene (CSM)

 Epichlorohydrin rubber(ECH, ECO)
ETHYLENE PROPYLENE DIENE MONOMER (EPDM):
Good resistance to hot water and steam, detergents, caustic potash solutions, sodium
hydroxide solutions, silicone oils and greases, many polar solvents and many diluted acids
and chemicals. Special formulations are excellent for use with glycol-based brake fluids.
Unsuitable for use with mineral oil products: lubricants, oils, or fuels. Peroxide-cured
compounds are suitable for higher temperatures.
FLUOROELASTOMER (FKM):
Noted for their very high resistance to heat and a wide variety of chemicals. Other key
benefits include excellent resistance to aging and ozone, very low gas permeability and the
fact that the materials are self-extinguishing. Standard FKM materials have excellent
resistance to mineral oils and greases, aliphatic, aromatic and chlorinated hydrocarbons, fuels,
non-flammable hydraulic fluids (HFD) and many organic solvents and chemicals. Generally
not resistant to hot water, steam, polar solvents, glycol-based brake fluids and low molecular
weight organic acids. In addition to the standard FKM materials, a number of specialty
materials with different monomer compositions and fluorine content (65% to 71%) are
available that offer improved chemical or temperature resistance and/or better low
temperature performance.
NITRILE RUBBER (NBR, HNBR, HSN):
A common material for o-rings because of its good mechanical properties, its resistance to
lubricants and greases, and its relatively low cost. The physical and chemical resistance
properties of NBR materials are determined by the acrylonitrile (ACN) content of the base
polymer: low content ensures good flexibility at low temperatures, but offers limited
resistance to oils and fuels. As the ACN content increases, the low temperature flexibility
reduces and the resistance to oils and fuels improves. Physical and chemical resistance
properties of NBR materials are also affected by the cure system of the polymer. Peroxide-
cured materials have improved physical properties, chemical resistance and thermal
properties, as compared to sulfur-donor-cured materials. Standard grades of NBR are typically
resistant to mineral oil-based lubricants and greases, many grades of hydraulic fluids,
aliphatic hydrocarbons, silicone oils and greases and water to about 80 °C. NBR is generally
not resistant to aromatic and chlorinated hydrocarbons, fuels with a high aromatic content,
polar solvents, glycol-based brake fluids and non-flammable hydraulic fluids (HFD). NBR
also has low resistance to ozone, weathering and aging. HNBR has considerable improvement
of the resistance to heat, ozone and aging, and gives it good mechanical properties.
 Polyacrylate rubber(ACM)
 Polychloroprene (neoprene) (CR)
 Polyisoprene (IR)
 Polysulfide rubber (PSR)
 Polytetrafluoroethylene (PTFE)
 Sanifluor
SILICONE RUBBER (SIR):
Noted for their ability to be used over a wide temperature range and for excellent resistance to
ozone, weathering and aging. Compared with most other sealing elastomers, the physical
properties of silicones are poor. Generally, silicone materials are physiologically harmless so
they are commonly used by the food and drug industries. Standard silicones are resistant to
water (to 100 °C), aliphatic engine and transmission oils and animal and plant oils and fats.
Silicones are generally not resistant to fuels, aromatic mineral oils, steam (short term to
120 °C is possible), silicone oils and greases, acids or alkalis. Fluorosilicate elastomers are far
more resistant to oils and fuels. The temperature range of applications is somewhat more
restricted.
 Styrene butadiene rubber (SBR)
 Thermoplastic elastomeric (TPE) styrenics
 Thermoplastic polyolefin (TPO) LDPE, HDPE, LLDPE, ULDPE
THERMOPLASTIC POLYURETHANE POLYETHER POLYESTER
Polyurethanes differ from classic elastomers in that they have much better mechanical
properties. In particular they have a high resistance to abrasion, wear and extrusion, a high
tensile strength and excellent tear resistance. Polyurethanes are generally resistant to aging
and ozone, mineral oils and greases, silicone oils and greases, nonflammable hydraulic fluids
HFA & HFB, water up to 50 °C and aliphatic hydrocarbons.
 Thermoplastic etheresterelastomers (TEEEs) co polyesters
 Thermoplastic polyamide (PEBA) Polyamides
 Melt Processible Rubber (MPR)
 Thermoplastic Vulcanization (TPV)

CHEMICAL COMPATIBILITY
 Beer - EPDM
 Chlorine Water – Viton (FKM)
 Gasoline – Buna-N or Viton (FKM)
 Hydraulic Oil (Petroleum Base, Industrial) – Buna-N
 Hydraulic Oils (Synthetic Base) – Viton
 Water – EPDM
 Motor Oils – Buna-N
O-RING PROFILES
There are variations in cross-section design other than circular. These include the O-ring with
an x-shaped profile, commonly called the X-ring, Q-ring, or by the trademarked name Quad
Ring. When squeezed upon installation, they seal with 4 contact surfaces—2 small contact
surfaces on the top and bottom. This contrasts with the standard O-ring's comparatively larger
single contact surfaces top and bottom. X-rings are most commonly used in reciprocating
applications, where they provide reduced running and breakout friction and reduced risk of
spiraling when compared to O-rings.
There are also rings with a square profile, commonly called square-cuts, lathe cuts, or Square
rings. When O-rings were selling at a premium because of the novelty, lack of efficient
manufacturing processes and high labor content, Square rings were introduced as an
economical substitution for O-rings. The square ring is typically manufactured by molding an
elastomer sleeve which is then lathe-cut. This style of seal is sometimes less expensive to
manufacture with certain materials and molding technologies (compression molding, transfer
molding, injection molding), especially in low volumes. The physical sealing performance of
square rings in static applications is superior to that of O-rings, however in dynamic
applications it is inferior to that of O-rings. Square rings are usually only used in dynamic
applications as energizers in cap seal assemblies. Square rings can also be more difficult to
install than O-rings.
FAILURE MODE:
O-ring materials may be subjected to high or low temperatures, chemical attack, vibration,
abrasion, and movement. Elastomers are selected according to the situation.
There are O-ring materials which can tolerate temperatures as low as -200 C or as high as
250+ C. At the low end, nearly all engineering materials become rigid and fail to seal; at the
high end, the materials often burn or decompose. Chemical attack can degrade the material,
start brittle cracks or cause it to swell. For example, NBR seals can crack when exposed
to ozone gas at very low concentrations, unless protected. Swelling by contact with a low
viscosity fluid causes an increase in dimensions, and also lowers the tensile strength of the
rubber. Other failures can be caused by using the wrong size of ring for a specific recess,
which may cause extrusion of the rubber.
Elastomers are sensitive to ionizing radiation. In typical applications, O-rings are well
protected from less penetrating radiation such as ultraviolet and soft X-rays, but more
penetrating radiation such as neutrons may cause rapid deterioration. In such environments,
soft metal seals are used.

CHALLENGER DISASTER:
The failure of an O-ring seal was determined to be the cause of the Space shuttle challenger
Shuttle disaster on January 28, 1986. A contributing factor was cold weather prior to the
launch. This was famously demonstrated on television by Caltech physics professor Richard
Feynman, when he placed a small O-ring into ice-cold water, and subsequently showed its
loss of pliability before an investigative committee.
The material of the failed O-ring was FKM which was specified by the shuttle motor
contractor, Morton-Thiokol. When an O-ring is cooled below its Tg (glass transition
temperature), it loses its elasticity and becomes brittle. More importantly, when an O-ring is
cooled near, but not beyond, its Tg, the cold O-ring, once compressed, will take longer than
normal to return to its original shape. O-rings (and all other seals) work by creating positive
pressure against a surface thereby preventing leaks. On the night before the launch,
exceedingly low air temperatures were recorded. On account of this, NASA technicians
performed an inspection. The ambient temperature was within launch parameters, and the
launch sequence was allowed to proceed. However, the temperature of the rubber O-rings
remained significantly lower than that of the surrounding air. During his investigation of the
launch footage, Feynman observed a small out-gassing event from the Solid Rocket
Booster (SRB) at the joint between two segments in the moments immediately preceding the
disaster. This was blamed on a failed O-ring seal. The escaping high temperature gas
impinged upon the external tank, and the entire vehicle was destroyed as a result.
The rubber industry has gone through its share of transformation after the accident. Many O-
rings now come with batch and cure date coding, as in the medicine industry, to precisely
track and control distribution. For aerospace and military/defense applications, O-rings are
usually individually packaged and labeled with the material, cure date, and batch information.
O-rings can, if needed, be recalled off the shelf. Furthermore, O-rings and other seals are
routinely batch-tested for quality control by the manufacturers, and often undergo Q/A several
more times by the distributor and ultimate end users.
As for the SRBs themselves, NASA and Morton-Thiokol redesigned them with a new joint
design, which now incorporated three O-rings instead of two, with the joints themselves
having onboard heaters which can be turned on when temperatures drop below 50 °F (10 °C).
No O-ring issues have occurred since Challenger, and they did not play a role in the Space
Shuttle Columbia disaster of 2003.
FUTURE:
An O-ring is one of the simplest, yet highly critical, precision mechanical components ever
developed. But, there are new advances that may take some of the burden of critical sealing
away from the O-ring. There are cottage industries of Elastomer consultants assisting in
designing O-ring-less pressure vessels. Nano-technology-rubber is one such new frontier.
Presently, these advancements are increasing the importance of O-rings. Since O-rings
encompass the areas of chemistry and material science, any advancement in nano-rubber will
affect the O-ring industry.
Already, there are elastomers filled with nano-carbon and nano-PTFE and molded into O-
rings used in high-performance applications. For example, carbon nanotubes are used in
electrostatic dissipative applications and nano-PTFE is used puresemiconductor applications.
The use of nano-PTin fluoroelastomers and perfluoroelastomers improve abrasion resistance,
lowers friction, lowers permeation, and can act as clean filler.

Using conductive carbon black or other fillers can exhibit the useful properties of conductive
rubber, namely preventing electrical arcing, static sparks, and the overall build-up of charge
within rubber that may cause it to behave like a capacitor (electrostatic dissipative). By
dissipating these charges, these materials, which include doped carbon-black and rubber with
metal filling additives, reduce the risk of ignition, which can be useful for fuel lines.
PULLEY
A pulley is a basic device or machine made of a wheel with a rim that a cord or rope fits
around. The wheel and axle of a pulley makes it easier to lift heavy objects with the rope. Ships
and sailboats use pulleys though they're often called drums to make raising the sails less
difficult. Flagpoles also have pulleys for rising and lowering the flag, many garage doors work
by a pulley system, and loading docks and constructions sites use pulleys for lifting heavy
things. Pulleycomes from the Old French polie, with a Greek root ofpolidion, or "little pivot."
DRILLING MACHINE:
a machine for making holes with removal of chips. Drilling machines are used for drilling, bor
ing, countersinking, reaming, and tapping. Several types are used in metalworkingvertical dril
ling machines, horizontal drillingmachinesdrilling machines, gang drilling machines, multiple
-spindle drilling machines, and special-purpose drilling machines.
Vertical drilling machines are the most widely used in metalworking.They are used to make h
ole in relatively small workpieces in individual and smalllot production; they are also used in
maintenance shops. The tool, such asa drill, countersink, or reamer, is fastened on a vertical s
pindle, and the workpiece is secured on the table of the machine. The axes of the tool and the
hole to be drilled are aligned by moving the workpiece. Programmed controlis also used to ent
the workpiece and to automate the operation. Benchmounted machines, usually of the single-
spindle type, are used to make holes up to 12 mm in diameter, for instance, in instrument-
making.Heavy and large workpieces and workpieces with holes located along a curved edge a
re worked on radial drilling machines. Here the axes of the tool and the hole to be drilled are a
ligned by moving the spindle relative to thestationary work-piece.
Horizontal drilling machines are usually used to make deep holes, for instance, in axles, shafts
and gun barrels for firearms and artillery pieces.
Drilling machines are used to drill centers in the ends of blanks. They are sometimes equipped
with supports that can cut off the blank before centering, and in such cases they are called dril
ling machines. Gangdrilling machines with more than one drill head are used to produce sever
al holes at one time.
Multiple spindle drilling machines feature automation of the work process. Such manchine
can be assembled form several standardized self contained heads with electric motors and
reduction gears that rotate the spindle and feed the head. there are one two and there sided
multiple spindle drilling machines, with vertical,horizontal,and inclined spindle for drilling
and tapping. Several dozen such spindles may be mounted on a single machine. Special
purpose drilling machines, on which a limited of parathions is performed, are equipped with
various automated devices.
Multiple operations on work pieces are performed by various combination machines. These
include one and two sided boring manchines, drilling tapping machines usually gang drilling
cutting spindles, milling type drilling machine used mainly for wood working, and automatic
drilling machines.
CHAPTER-3
CONCEPT OF WORKING CAPITAL

Working capital management or current assets management is one of the most important
Aspects of overall financial management. It is concerned with the problems that arise in
Attempting to manage the current assets, current liabilities and their inter relationship that
Exists between them. Current assets which can be converted into cash with in an accounting
year and include cash, short-term securities, debtors bills receivables and inventories. Current
liabilities are those claims of outsider, which are expected to mature for payment with in an
accounting year and include creditors, bills payable, outstanding expenses. The goal of
working capital management is to manage firm’s current assets and current liabilities in such
a way that a satisfactory level of working capital is maintained. The current assets should be
large enough to cover its current liabilities in order to ensure a reasonable margin of safety.
Each of the short-term sources of financing must be continuously managed to ensure that they
are obtained and used in the best possible way.
There are two concepts of working capital-gross concept and net concept. Gross working
Gross working capital, simple called as working capital refers to the firm’s investment current
assets.Net working capital refers to the difference between current assets and current
liabilities alternatively it is that portion of the firm’s current assets which is financed by long-
term funds. The two concepts of working capital, gross and net are not exclusive; rather they
have equal significance from management point of view.
The gross working capital concept focuses attention on two aspects of current management.
A. Optimum investment in current assets and
B. Financing of current assets.

Net working capital being the difference between current assets and current liabilities is
Quantitative concept.
C. It indicates the liquidity position of the firm.
D. Suggest the extent to which working capital needs may be financed by permanent sources
of funds.
GROSS WORKING CAPITAL (TOTAL CURRENT ASSET):
The gross working capital, simply called as working capital refers to the firm’s Investment in
current assets. Current assets are the assets, which can be converted into cash within an
accounting year or operating cycle. Thus, Gross working capital, is the total of all current
assets. It includes
1. Inventories (Raw materials and Components, Work-in-Progress, Finished
Goods, Others)
2. Trade Debtors
3. Loans and Advance
4. Cash and Bank Balances
5. Bills Receivables.
6. Short-term Investment
NET WORKING CAPITAL (TOTAL CURRENT ASSET- TOTAL
CURRENT LIABLITIES):
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. Net working capital may be positive or negative. A positive net
working capital will arise when current assets exceed current liabilities and a negative net
working capital will arise when current liabilities exceed current assets i.e. there is no
working capital, but there is a working capital deficit. It includes
1. Trade Creditors.
2. Bills Payable.
3. Accrued or Outstanding Expenses.
4. Trade Advances
5. Short Term Borrowings (Commercial Banks and Others)
6. Provisions
7. Bank Overdraft
The profits earned by the firm depend upon the magnitude of the sales, among other things. A
successful sale program is, in other words necessary for earning profits by one business
invariably a time lag between sale of goods and receipt of cash. There is therefore a for
working capital in the form of current assets to deal with the problem arising out of the lack of
immediate realization of cash against goods sold. Therefore sufficient capital is necessary to
sustain sales activity. Technically this is referred to as the operating cycle and cash cycle. It is
defined as a continuing flow from cash to suppliers, to inventory, to accounts receivable and
back into cash. It consists of 3 phases.

1. Conversion of cash in to inventory.
2 .Conversion of inventory in to receivables.
3. Conversion receivables in to cash.
The magnitude of working capital required is not always the same and increases and decreases
over time. However there is always a minimum level of current assets, which is continuously
required by the firm to carry on its business operations. This minimum level of current assets is
referred to as permanent or fixed working capital. It is permanent in the same way as the firms
fixed assets are.
Depending over and above permanent working capital will fluctuate. For example, extra
inventory of finished goods will have to be maintained to support peak period of sale and
investment and investments in receivables may also increase during such periods. The extra
working capital needed to support the changing production and sales activities is called
fluctuating or variable temporary working capital.
Both kinds of working capital-permanent and temporary are necessary to facilitate production
and sale through operating cycle, but the firm to meet liquidity requirements that will last only
temporarily creates temporary working capital.
Permanent working capital is stable over time while temporary working capital is fluctuating.
However the permanent working capital line need not be horizontal if the firm’s requirement
for permanent capital is increasing over period. For a growing firm, the difference between
permanent and temporary working capital is depicted below.
WORKING CAPITAL MANAGEMENT GOAL:
The goal of working capital management is to manage the firms’ Current Assets and Current
Liabilities in such a way that a satisfactory level of working capital is maintained. This is so
because if the firm cannot maintain a satisfactory level of working capital, it is likely to
become insolvent and may even be forced into bankruptcy. Sometimes, a Company may have
tremendous potential for profitability in the long run, but may languish due to inadequate
liquidity. The interaction between current assets and current liabilities therefore, the main
theme of the theory of working capital management.
NEED OR OBJECT OF WORKING CAPITAL IN THE FIRM:
The need for working capital cannot be over emphasized. Every business needs some amount
of working capital. The need for working capital arises due to the time gap between
production and realization of cash from sales. There is an operating cycle involved in the sales
and realization of cash. There are time gaps in purchase of raw materials and production;
production and sales; and sales and realization of cash. Thus, working capital is needed for the
following purposes
● For the purchase of raw materials, components and spares.
● To pay wages and salary
●To provide credit facilities to the customer.
For studying the need of working capital in a business, one has to study the business under
varying circumstances such as a new concern, as a growing concern and as one which has
attained maturity. A new concern requires a lot of liquid funds to meet initial expenses like
promotion, formation, etc. These expenses are called preliminary expenses and are
capitalized. The amount needed as working capital in a new concern depends primarily upon
its size and the ambitions of its promoters. Greater the size of the business unit, generally,
larger will be the requirements of working capital. The amount of working capital needed
goes on increasing with the growth and expansion of business till it attains maturity. At
maturity the amount of working capital needed is called normal working capital.
OPERATING CYCLE:
As discussed earlier, working capital refers to that part of firm’s capital which is required for
financing short-term or current assets such as cash, marketable securities, debtors and
inventories. Funds, thus, invested in current assets keep revolving fast and are being
constantly converted into cash and these cash flows out again in exchange for other current
assets. Hence, it is also known as revolving or circulating capital.
Further, following formula can be used to determine the conversion period
1. Raw-material conversion period = Average stock of raw material
Raw material consumption per day
2. Work in process conversion = Average stock of raw material
Total cost of production per day
3. Finished goods conversion period = Average stock of finished goods
Total cost of sales per day
4. Receivables conversion = Average accounts receivables
Net credit sales per day

5. Payables deferral period = Average payables
Net credit purchases per day
CLASSIFICATION OF WORKING CAPITAL:
Working capital may be classified in two ways:
1. on the basis of concept
2. on the basis of time
On the basis of concept, working capital is classified as gross working capital and
Net working capital as discussed earlier
On the basis of time, working capital may be classified as:
1. Permanent or fixed working capital
2. Temporary or variable working capital
PERMANENT OR FIXED WORKING CAPITAL:

Permanent or fixed working capital is the minimum amount which is required to ensure
effective Utilization of fixed facilities and for maintaining the circulation of current assets.
There’s is always a minimum level of current assets which is continuously required by the
enterprise to carry out its normal business operations. For example, every firm has to maintain
a minimum level of raw materials, work-in-process, finished goods and cash balance. This
minimum level of current assets is called permanent or fixed working capitals as this part of
capital is permanently blocked in current assets. As the business grows, the requirements of
permanent working capital also increase due to the increase in current assets. The permanent
working capital can further be classified as regular working capital and reserve working
capital required tonsure circulation of current assets from cash to inventories, from inventories
to receivable and from receivables to cash and so on.
TEMPORARY OR VARIABLE WORKING CAPITAL:

Temporary or variable working capital is the amount of working capital which is required to
meet the seasonal demands and some special exigencies. Variable working capital can be
further classified as seasonal working capital and special working capital. Most of the
enterprises have to provide additional working capital to meet the seasonal and special needs.
The capital required to meet the seasonal needs of the enterprise is called seasonal working
capital. Special Working capital is that part of working capital is that part of working capital
DRAWBACKS OF WORKING CAPITAL:
1. It results in unnecessary accumulation of inventory. Thus, chances of inventory
Mishandling, waste, theft and losses increase.
2. It is an indication of defective credit policy and slack collection period. Consequently
Higher incidence of bad debts results, which adversely affects profits.
3. Excessive working capital makes management complacent, which degenerates in to,
Managerial in efficiency.
4. Tendencies of accumulating inventories to make speculative profits grow. This may
Tend to make dividend policy liberal and difficult to cope with in future when the firm
Is amiable to make speculative profits.
INADEQUATE WORKING CAPITAL:
Every business concern should have adequate working capital to run its business operation. It
should have neither redundant or excess working capital nor inadequate or shortage of
working capital. Both excess as well as short working capital positions are bad for any
business. However, out of the two, it is the inadequacy of working capital which is more
dangerous from the point of view of the firm.
DISADVANTAGES OR EXCESSIVE WORKING CAPITAL:
1) Excessive Working Capital means idle funds which earn no profits for the business and
hence the business cannot earn a proper rate of return on its investments.
2) When there is a redundant working capital, it may lead to unnecessary purchasing and
accumulation of inventories causing more chances of theft, waste and losses.
3) Excessive working capital implies excessive debtors and defective credit policy which may
cause higher incidence of bad debts.
4) It may result into overall inefficiency in the organization.
5) When there is excessive working capital, relations with banks and other financial
institutions may not be maintained.
6) Due to low rate of return on investments, the value of shares may also fall.
DISADVANTAGES OR DANGERS OF INADEQUATE WORKING

CAPITAL:
1) A concern which has inadequate working capital cannot pay its short-term liabilities in
time. Thus, it will lose its reputation and shall not be able to get good credit facilities.
2) It cannot buy its requirements in bulk and cannot avail of discounts, etc.
3) It becomes difficult for the firm to exploit favorable market conditions and undertake
profitable projects due to lack of working capital.

4) The firm cannot pay day-to-day expenses of its operations and it creates inefficiencies,
increases costs and reduces the profits of the business.
5) It becomes impossible to utilize efficiently fixed assets due to non-availability of liquid

funds.
6) The rate of return on investments also falls with the shortage of working capital.
DETERMINANTS OF WORKING CAPITAL:
A large number of factors influence the working capital needs of the firm. These factors
Affect different enterprises differently. They also vary from time to time. In general the
Following factors are involved in a proper assessment of quantum of working capital
required.
1. NATURE AND SIZE OF BUISNESS:
Working capital requirements of a firm are basically influenced by the nature of its business.
Trading and financial firms have a very less investment in fixed assets but require a large sum
of money to be invested in working capital. In contrast public utilities have a very limited
need for working capital and have to invest abundantly in fixed assets. The working capital
needs of most manufacturing concerns fall between two extreme requirements of trading
firms and public utilities.
The size of the business also has an important impact on its working capital needs. Size may
be measured in terms of the scale of operation. A firm with larger scale of operation will need
more working capital than a small firm.

2. MANUFACTURING CYCLE:
The manufacturing cycle starts with the purchase of raw materials and completes with
Production of finished goods. Longer the manufacturing cycle, larger is the tie up of funds in
inventories; therefore larger will be the firm’s working capital requirements. Thus if there are
alternative ways of manufacturing product the process with the shortest manufacturing cycle
must be chosen.
3. BUISNESS FLUCTUATION:
Business variations effect especially the temporary working capital requirement. When there
is an upward swing in the economy sales will increase correspondingly the firm’s investment
in inventories and book debts will also increase. On the other hand when there is a decline in
the economy sales will fall and consequently levels of inventories and book debt will also fall.
4. PRODUCTION POLICY:
A strategy of constant production may be maintained in order to resolve the working
Capital problems arising due to seasonal changes in the demand for the firm’s capital.
Steady production policy will cause inventories to accumulate during the off season periods
and the firm will be exposed to greater inventory costs and risks. The firm may then adopt the
policy of varying its production schedules in accordance with changing demand.
5. FIRMS CREDIT POLICY:
The credit policy of the firm affects working capital by influencing the level of book debts.
The credit terms to be granted to customers may depend upon norms of the industry to which
the firms belong. A high collection period will mean tie up of funds in book debts.
6. AVAILABILITY OF CREDIT:
The credit terms granted by the firm’s creditors also effect he working capital requirements of
a firm. A firm, which can get bank credit easily on favorable conditions, will operate with less
working capital than a firm without such a facility.
7. GROWTH AND EXPANSION ACTIVITIES:
A growing firm may need to invest funds in fixed assets in order to sustain its growing
production and sales. This will in turn increase investment in current assets to support
enlarged scale of operations. It should therefore make proper planning to finance the
increasing needs for working capital.
8. PROFIT MARGIN AND APPROPRIATION:
A high net profit contributes towards the working capital pool. In fact net profit is a source of
working capital to the extent it has been earned in cash. The cash profit is found by adjusting
non-cash items such as depreciation, outstanding expenses, accumulated expenses and losses
written off in the net profit.. Higher the amount of divides less will be the contribution
towards working capital funds, the availability of cash generated from operations thus
depends upon taxation, dividend and retention policy, and depreciation policy.
9. PRICE LEVEL CHANGES
Rising price levels require a firm to maintain higher working capital same level of current
assets will require product prices with rising price levels so that they do not face a severe
Working capital problem.
10. OPERATING EFFICIENCY
The operating efficiency of the firm relates to the optimum utilization of resources at
minimum costs. The firm will be effectively contributing to its working capital if it is efficient
in controlling operating costs. The use of working capital is improved and pace of cash cycle
is accelerated with operating efficiency.

WORKING CAPITAL IN ORGANISATION
Working capital is one of the important measurements of the financial position. The words of
H. G. Guttmann clearly explains the importance of working capital. “Working Capital is the
life-blood and nerve centre of the business.” In the words of Walker, “A firm’s profitability is
determined in part by the way its working capital is managed.” The object of working capital
management is to manage firm’s current assets and liabilities in such a way that a satisfactory
level of working capital is maintained. If the firm cannot maintain a satisfactory level of
working capital, it is likely to become insolvent and may even be forced into bankruptcy. Thus,
need for working capital to run day-to-day business activities smoothly can’t be
overemphasized.
WORKING CAPITAL POLICY
Working capital management policies have a great effect on firm`s profitability, liquidity and
structural health. A finance manager should therefore, chalk out appropriate working capital
policies in respect of each component of working capital so as to ensure high profitability,
proper liquidity and sound structural health of the organization.
In order to achieve this objective we have to perform
To perform basically following two functions.
 Estimating the amount of working capital.
 Sources from which these funds have to be raised

BALANCE SHEET:
In financial accounting, in working capital management consist of a balance sheet or
statement of financial position is a summary of the financial balances of a sole
proprietorship, a business partnership, a corporation or other business organization, such as an
LLC or an LLP. Assets, liabilities and ownership equity are listed as of a specific date, such
as the end of its financial year. A balance sheet is often described as a "snapshot of a
company's financial condition". Of the three basic financial statements, the balance sheet is
the only statement which applies to a single point in time of a business' calendar year.
A standard company balance sheet has three parts: assets, liabilities and ownership
equity. The main categories of assets are usually listed first, and typically in order of liquidity.
Assets are followed by the liabilities. The difference between the assets and the liabilities is
known as equity or the net assets or the net worth or capital of the company and according to
the accounting equation, net worth must equal assets minus liabilities.
Another way to look at the balance sheet equation is that total assets equals liabilities plus
owner's equity. Looking at the equation in this way shows how assets were financed: either by
borrowing money (liability) or by using the owner's money (owner's or shareholders' equity).
Balance sheets are usually presented with assets in one section and liabilities and net worth in
the other section with the two sections "balancing".
A business operating entirely in cash can measure its profits by withdrawing the entire bank
balance at the end of the period, plus any cash in hand. However, many businesses are not
paid immediately; they build up inventories of goods and they acquire buildings and
equipment. In other words: businesses have assets and so they cannot, even if they want to,
immediately turn these into cash at the end of each period. Often, these businesses owe money
to suppliers and to tax authorities, and the proprietors do not withdraw all their original capital
and profits at the end of each period. In other words businesses also have liabilities.
COMPONENTS OF WORKING CAPITAL:
CURRENT ASSETS
INVENTORIES
 Raw material
 Work in progress
 Finished goods
TRADE DEBTORS:
 Loans and advances
 Investment (short term)
 Cash bank balance
SUNDRY CREDITORS:
 Trade Advances
 Borrowings
 Commercial banks
RATIO ANALYSIS:
Ratio Analysis is a technique of analysis and interpretation of financial statements. It
Is the process of establishing and interpreting various ratios for helping in making certain
Decisions. The suppliers of goods on credit, banks, financial institutions, investors, share
Holders and management all make us of ratio analysis has a toll in evaluating the financial
Position and performance of a firm for granting credit providing loans and making
Investments in the firm. A single ratio is itself does not convey much of sense. Evaluation
May be done by comparing present ratio and past ratios as this indicates the direction of
Change and whether the firm’s performance and financial position has improved, deteriorated
or remained constant over a period of time.
Ratio analysis is a powerful tool of financial analysis. A ratio is defined as “the
Relationship between two or more things”. In financial analysis, ratio is used as a benchmark
for evaluating the financial position and performance of a firm.
SIGNIFICANCE OF RATIO ANALYSIS:
1) Ratio analysis simplifies complex financial data. It reveals the financial condition of
The business.
2) Ratio analysis throws light on the degree of efficiency of management.
3) It may be used as instruments of management control.
4) It helps in assessing financial performance and profitability of the concern.
5) It helps investors in making investment decision to make a profitable investment.
TYPES OF RATIOS:
Several ratios calculated from the accounting data, can be grouped into various classes
According to financial activity or function to be evaluated. The classification of ratios is:

1. Liquidity ratios
2. Leverage ratios
3. Activity ratios
4. Profitability ratios
PROFITABILITY RATIOS:
A company should earn profits to survive and grow over a long period of time. The
profitability ratio is calculated to measure the operating efficiency of the management. There
are two types of profitability ratios:
• Profitability in relation to sales.
• Profitability in relation to investments.
ACTIVITY RATIOS:
Funds of creditors and owners are invested in various assets to generate sales and profits.
Activity ratios are employed to evaluate the efficiency and effectiveness with which a firm
manages its resource or assets. Activity Ratios are also called as “Turnover Ratios” because
they indicate the speed with which the assets are converted or turned over into sales. A proper
balance between sales and assets generally reflects that assets are well managed.
I have studied the following ratios in analyzing the working capital management.
LIQUIDITY RATIOS:
1) Current Ratio.
2) Quick Ratios.
3) Cash Ratio
ACTIVITY / TURNOVER RATIOS:
1) Working Capital Turnover Ratio.
2) Inventory Turnover Ratio.
3) Debtors Turnover Ratio.
4) Fixed Assets Turnover Ratio.
5) Current assets Turnover Ratio.
6) Average collection period.
7) Inventory conversion period.
RATIOS TO MEASURE THE EFFICIENCY OF WORKING CAPITAL:
 Current Ratio: Current assets/Current liabilities.
 Quick Ratio: (current assets – Inventories) /Current liabilities.
 Sales to cash: Sales during a period / Average cash balance.
 Average collection period: Debtors dividend by annual credit sales and the
resulting figure multiplied by 365.This ratio indicates how many days of credit is
being obtained from the suppliers.
 Average payment Period: Creditors divided by annual credit purchase and the
resultant figure is multiplied by 365. This ratio indicates how many days of credit
are being obtained from the suppliers.
 Inventory turnover ratio: Sales /Average inventory.

CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
In financial management, two important decisions are very vital and crucial .They are
decision regarding fixed assets/fixed capital and decision regarding work in 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 is constantly
receiving or circulating. Hence, working capital is also known as circulating capital or
floating capital.
Indus hospital believes in delivering quality care to its patients at all times. Indus has been
providing quality services to patients from all walks of life and of different economic strata.
Indus was started with the sole aim of providing quality healthcare to patients by a team of
dedicated specialists who felt the need for a specialized healthcare facility in the city of
Vishakhapatnam. At Indus, We believe in giving our patients the best care and facilities of
international standards which they can expect within the country.
As I have collected the data from the finance department of organization .They have provided
me the data like balance sheet, about the departments, some annual report. The data is
provided during the course of my project. They have provided some information about
organization useful for my project
STATEMENT OF CHANGES IN WORKING CAPITAL IN

INDUS
TABLE NO. 4.1
Particulars 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-15
INVENTORIES 11,775,970 15,579,960 16,655,060 21,732,871 22,618,844 1,86,19,594
CASH &
BANK 74,40,439 8,810,103 3,605,608 21,699,597 79,46,788 2,99,32,339
BALANCE
LOANS & 63,88,884 2,34,09,473

ADVANCES 49,80,468 81,70,894 47,48,752 38,64,373
TOTAL CURRENT
ASSETS (A) 53,518,375 71,549,163 11,17,25,287 134,707,953 149,053,35 165,184,90
2 4
TOTAL CURRENT 55,422,257 82,6,19,071 85,955,493 77,006,995 61,310,783 59,915,944

LIALIBILITIES (B)
PROVISION 40,96,356 3,302,731 1,657,758 3,315,515 18,773,757 25,83,0964
TOTAL CURRENT
LIABLITIES (B) 59,518,613 85,921,802 87,613,251 80,322,510 80,084,540 85,746,908
INCREASE
/DEACREASE IN 60,00,238 14,372,639 24,112,036 54,385,443 68,968,812 79,437,996
WORKING
CAPITAL
Series 1
80,000,000
60,000,000
Series 1
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
WORKING CAPITAL IN INDUS
INTERPRETATION 2009-2010:
The gross working capital is Rs.53, 518,375.Current liabilities is 55,422,257. Provisions are 40,
96,356. The net working capital is 59,518,613. There has been a decrease of 60, 00,238 over the
previous year.
The gross working capital is Rs. 7,15,49,163. Current liabilities are 82,6,19,071.
Provisions are 3,302,731. The net working capital is 85,921,802.There has been a
Decrease of 14,372,639 over the previous year.

The gross working capital is Rs.11,17,25,287. Current liabilities is 85,955,493.Provisions
are 1,657,758.The net working capital is 87,613,251.There has been an increase of
24,112,036 over the previous year.
The gross working capital is Rs. 134,707,953.Current liabilities is 77,006,995.
Provisions are 3,315,515.The net working capital is 80,322,510. There has been a
increase of 54,385,443 over the previous year.
INTERPRETATI2013-2014:
The gross working capital is Rs. 149,053,352. Current liabilities are 61,310,783.
Provisions are 18,773,757. The net working capital is 80,084,540. There has been a
increase of 68,968,812 over the previous year.
INTERPRETATI2014-2015:
The gross working capital is Rs.165,184,904. Current liabilities are
59,915,944.Provisions are 25,83,0964. The net working capital is 85,746,908. There has
been a increase of 79,437,996 over the previous year.

COMPARITIVE BALANCE SHEET 2009-2010
particulars 2009 2010 Increase %

/decrease
Fixed liablities
Share capital 28,527,310 28,527,310
Reserve &surplus 100,030,528 100,002,528 28,0000 31.2
Secured loans 44,928,929 45,268,984 340,055 38.56

Unsecured loans - -
Deferred taxes 30,23,192 3,282,500 259,308 25.2
Fixed asset
Tangible asset 130,298,567 132,829,928 2,531,361 45.3
Work in progress 148,282 150,928 26,460 56.0

Long term loans and advances 1,304,924 1,403,500 98,576 38.2
Current asset
inventory 17,633,045 18,262,592 629,547 26.5
Trade receivables 63,298,982 63,282,920 160,062 49.2

Cash in bank 19,060,569 19,922,063 861,494 52.3
Loans &advances 2,058,900 2,093,929 35,029 41.2
Less :current liabilities & 184,62,401 19,162,472 700,071 32.8

provision
INTERPRETATION:
The fixed assets of the company in 2009-2010 are 131,751,773 this significance that the long
term sources of funds are not sufficient to finance fixed assets and a part of working capital
has been used to finance fixed assets. But the policy of the firm should be to purchase fixed
assets from long term sources of finance and not from working capital.
Total current assets of the company in 2009-10 at133,752,986 and total current liabilities are
89,738,055. It shows net positive working 91,030,538 of the working capital position of the
company is satisfactory.
The liquidity position of the company in also satisfactory as all current assets has increased in
2009-10.
PARTICULARS 2010 2011 Increase %

/decrease
FIXED LIABLITIES
Share capital 28,527,310 28,527,310
Reserve &surplus 100,002,528 100,100,282 97,754 29.3
Secured loans 45,268,984 49,829,628 4,560,644 60.4
Unsecured loans - -
Deferred taxes 3,282,500 3,489,500 207,000 23.5
FIXED ASSET
Tangible asset 132,829,928 135,289,528 2,459,600 41.2

Work in progress 150,928 152,289, 1,361 25.1
Long term loans & advances 1,403,500 1,423,982 20,482 33.4
CURRENT ASSET
inventory 18,262,592 19,299,478 1,036,886
Trade receivables 63,282,920 65,354,928 2,072,008 68.9
Cash in bank 19,922,063 21,198,282 1,276,219 23.6

Loans &advances 2,093,929 2,509,352 415,423 36.5
Less :current liabilities & 19,162,472 93,543,560 74,381,088 72.4

provision
INTERPRETATION:
The fixed assets of the company in 2010-11 are2,459,600 this significance that the long term
sources of funds are not sufficient to finance fixed assets and a part of working capital has
been used to finance fixed assets. But the policy of the firm should be to purchase fixed assets
from long term sources of finance and not from working capital.
Total current assets of the company in 2010-11 at139,655,899 and total current liabilities
are65,232,960. It shows net positive working 40,587,989 of the working capital position of
the company is satisfactory.
2010-11.

/decrease
Fixed liablities
Share capital 28,527,310 28,527,310
Reserve &surplus 100,100,282 100,534,565 434,283 35.1
Secured loans 49,829,628 52,300,257 2,470,629 48.2
Unsecured loans - -
Deferred taxes 3,489,500 4,234,563 745,063 28.2
Fixed asset
Tangible asset 135,289,528 140,694,780 5,405,252 32.1
Work in progress 152,289, 258,623 106,334 20.1

Current asset
inventory 19,299,478 20,628,485 1,329,007 58.1
Trade recievables 65,354,928 68,624,592 3,269,664 23.4
Cash in bank 21,198,282 30,028,003 8,829,721 35.6

Loans &advances 2,509,352 2,982,623 473,271 20.1

provision
INTERPRETATION:
The fixed assets of the company in 2011-12 are 130,191,956. This significance that the long
Total current assets of the company in 2011-12 at130, 191,956 and total current liabilities are
86,019,676. It shows net positive working of 87,043,134 the working capital position of the
2011-12.

/decrease
Fixed liablities
Share capital 28,527,310 28,527,310
Reserve &surplus 100,534,565 110,544,591 10,010,026 65.2
Secured loans 52,300,257 58,395,857 6,095,600 45.2
Unsecured loans - -
Deferred taxes 4,234,563 5,065,988 831,425 26.3
Fixed asset
Tangible asset 140,694,780 152,894,880 12,200,100 70.2
Work in progress 258,623 285,695 27072
Current asset
inventory 20,628,485 21,732,871 1,104,386 36.1
Cash in bank 30,028,003 2,699,597 27,328,406 59.4
Loans &advances 2,982,623 3,485,941 503,318 40.6

provision
INTERPRATION:
Total current assets of the company in 2012-13 at 135,471,895 and total current liabilities are
2012-13.

/decrease
Fixed liablities
Share capital 28,527,310 28,527,310
Reserve &surplus 110,544,591 176,190,073 65,645,482 68.5
Secured loans 58,395,857 63,606,724 5,210,867 54.1
Unsecured loans -
Deferred taxes 5,065,988 6,138,334 1,072,346 36.2
Fixed asset
Tangible asset 152,894,880 168,882,486 15,987,606 78.1
Work in progress 285,695 - - -
Long term loans 1,494,527 6,858,300 5,363,773 80.1
Current asset
inventory 16,665,060 21,732,871 5,067,811 66.1
Cash in bank 2,699,597 21,699,597 19,000,000 80.1
Loans &advances 3,485,941 1,312,594 2,173,347 45.2

Less :current liabilities & 14,825,611 15,214,119 388,508 32.1
provision
INTERPRETATION:
Total current assets of the company in 2013-14 at 179,453,015 and total current liabilities
are77,006,995. It shows net positive working of 99,130,505 the working capital position of
the company is satisfactory.
2013-2014.
COMPARATIVE BALANCE SHEET 2014-2015
particulars 2014 2015 Increase/dec %

rease
Fixed liabilities
Share capital 28,527,31 28,527,310
0
Reserve & surplus 20733518 247457589 40,122,401 83.7
8
Secured loans 71120438 46240488 24879950 83.7
Unsecured loans - - - -
Deferred taxes 5671580 4532021 1139599 1.25
Fixed assets
Tangible asset 20860236 197462338 11140022 1.05
0
Work in progress 31500 450285 4,18,785 6.99
Long term loans 4290672 2125972 2164700 2.01
Current asset
inventory 22618844 18619594 3999250 1.21
Trade receivables 79325388 96020245 16,694,857 82.6
Cash in bank 7946788 29932339 21,985,551 26.5
Loans & advances 458080 1738401 12,80,321 26.3
Less: current liabilities
& provision 42538422 43323926 7,85,504 98.1
INTERPRETATION:
Total current assets of the company in 2014-15 at 165,184,904 and total current liabilities are
2014-15.
RATIO
CURRENT RATIO
The Current Ratio is the ratio of total Current assets to total current liabilities. It is a measure
of the firms short term solvency i.e., its ability to meet short term obligations. The higher the
current ratio the larger the amount of rupees available for rupee of current liability
conventionally a current ratio of 2 is considered satisfactory. A higher current ratio may
indicative of slack management
CURRENT RATIO TABLE-4.2
particulars 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-15
Current 53,518,375 71,549,163 111,725,287 134,707,953 149,053,352 165,184,904

Assets
Current 59,518,613 85,921,802 87,613,251 80,322,510 80,084,541 85,746,908

liablities
Current 1.99 1.32 1.27 1.67 1.86 1.926

Ratio
ANALYSIS
This ratio attempts to measure the utilization and effectiveness of the use current assets and
current liabilities. This ratio reveals the relationship between the current assets and current
liabilities. In the year 2009-10 this ratio was 1.99times but in the year 2010-11 it came up to 1.32
times it was due to decrease in current liabilities. In year 2011-12 this ratio was 1.27 times and in
year 2012-13 it has 1.67 times, in 2013-14 it was 1.86 this was due to increase in current
liabilities. And the last year 2014-15 it was 1.926 this was due to increase in current liabilities.
INFERENCE
This ratio is stable with minor fluctuations. It has marginally improved and Satisfactorily.
INTERPRETATION:
It indicates the amount of current assets available for each current liability. Higher the ratio,
greater the margin of safety or creditors.

QUICK RATIO TABLE NO-4.3
Particula formula 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

rs
quick Current assets- 41,742,405 55,969,203 95,070,227 112,975,082 126,434,508 146,565,310
ratio inventories/cur
rent liabilities
59,518,613 85,921,802 80,322,510 80,084,541
87,613,251 85,746,908
Ratio 0.70 0.65 1.08 1.40 1.57 1.70
ANALYSIS:
It establishes the relationship between quick or liquid assets and liabilities. An assets is liquid if
it can be converted into cash immediately without loss. A ratio 1:1 is considered ideal. In the
year 2009, this ratio was 0.70 this was decreased to 0.65 in the year 2010 and had increased in
2011and reached 1.08. In the year 2012, it was1.40 & in 2013 it was 1.57 and the Last year 2014
the ratio was 1.70 it is increased.
INFERENCE:
Quick ratio is satisfactory.

CASH RATIO TABLE NO- 4.4
particulars formula 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
cash ratio Cash/current 74,40,439 88,10,103 36,05,608 21,699,597 79,46,788 29,932,339

liabilities
59,518,613 85,921,802 87,613,251 80,322,510 80,084,541 85,746,908
ratio 0.12 0.10 0.04 0.27 0.09 0.34
ANALYSIS:
This ratio is also known as absolute liquid ratio. This ratio will reveal how much percentage of
current liabilities is held in cash. 1% or 0.12 is considered as ideal. In the year 2009 company’s
cash ratio was 0.10, which is ideal. In the year 2010, it slightly decreased to 0.04. This ratio
shows that 3% and in 2013 it was decreased to 0.09 of the current liabilities but in 2014-15 it was
increased to 0.34 is held in cash and the company may be having good borrowing power.
INFERENCE:
Company’s cash ratio is satisfactory and is stable. Improvement was seen.
INTERPRETATION:
It indicates the amount of quick assets available for meeting of current liability. Traditionally, a
quick ratio of 1:1 is considered to be satisfactory.

ACTIVITY RATIOS
Working Capital Turnover Ratio indicates the velocity of utilization of net working capital.
It indicates the number of times net W.C., is turned over in the course of a year. It is a measure
of the firm’s efficiency to utilize its working capital. A higher ratio indicates efficient utilization
of working capital and a low ratio indicates otherwise. However a very high ratio is not a good
situation for any firm and hence care must be taken while interpreting
WORKING CAPITAL TURNOVER RATIO TABLE NO- 4.5

Particulars formula 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Turnover sales/workin 249,804,160 277,901,517 321,716,095 365,970,570 333,296,544 361,693,740

ratio g capital 60,00,238 14,372,639 24,112,036 54,385,443 68,968,812 79,437,996
Ratio 41.6 19.3 13.3 6.72 4.83 4.55

ANALYSIS:
This ratio indicates the velocity of utilization of net working capital. The main purpose of
Computing this ratio is to find out to what extent the working capital is rotated in the business
with in a period of one year. In the year 2009, this ratio was negative figure 41.6. But in the year
2010, it has increased to 19.3 due to increase in working capital. In the year 2011, it again
increased to 13.3 and in the year 2013 it further decreased to 4.83 and in the year 2014 it is again
decreased 4.5 times.
INTERPRETATION:
It indicates the firm’s ability to generate sales per rupee of working capital.
INVENTORY TURNOVER RATIO
Inventory Turnover Ratio also known as stock velocity is normally calculated as sales to average
inventory. This ratio indicates whether inventory has been efficiently utilized or not. It indicates
the number of time the stock has been turned over during the period and evaluates the efficiency
with which a firm is able to manage its inventory. Usually a high inventory turnover indicates
efficient management of inventory because more frequently the stock s are sold, the lesser the
money is required to finance the inventory.igher the ratio, the more efficient the management and
utilization of working capital.

INVENTORY TURNOVER RATIO TABLE NO- 4.6
Particulars formula 2009-20010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
12 Sales/avg
249,804,160 277,901,517 321,716,095 365,970,570 333,296,544 361,693,740
inventory inventory
11,775,970 15,579,960 16,655,060 21,732,871 22,618,844 18,619,594
Turn over
ratio
Ratio 21.2 17.8 19.3 16.8 14.7 19.4
ANALYSIS
It establishes the relationship between Net Sales during a given period and the average amount of
inventory held during that period. In 2009, Company’s inventory turnover ratio was 21.2 times.
In the year 2010 it was decreased 17.8 and the next year 2011 again raised 19.3. In the year 2012
again decreased 16.8 and the next 2013 also decreased 14.7. And the last final year 2014 it was
increases 19.4 times. Company’s inventory turnover ratio is fluctuated; this shows that it has
efficient inventory management policy.

FIXED ASSET TURN OVER RATIO TABLE NO. 4.7
particulars formula 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Fixed asset Net

249,804,160 277,461,695 321,716,095 365,970,570 333,296,544 361,693,740
Turnover Sales/net
fixed asset 160,518,229 146,877,786 152,894,880 168,882,486 208,602,360 197,462,338
ratio
Ratio 1.55 1.88 2.10 2.16 1.59 1.83
ANALYSIS
This ratio establishes the relationship between net sales and fixed assets. This ratio indicates
the extent to which the investments and fixed assets contribute towards the sales. In the year
2009, ratio was 1.55 times, it will generate in the year 2010, this ratio was 1.88, in 2011 it was
2.10 and in 2012 this ratio was at 2.16. In 2013 the ratio was decreased 1.59.And in 2014 this
ratio was increased 1.83. This ratio shows that fixed assets have been efficiently utile.
CHAPTER-5
FINDINGS
The following are the major findings of my study.
1. Working capital position of the company is satisfactory.
2. The policy of the firm should be to purchase fixed assets from long term sources of
finance and not from working capital
3. The amount of current assets available for each current liability. Higher the
Ratio, greater the margin of safety or creditors
4. The liquidity position of the company in also satisfactory as all current assets has
Increased in 2012-13
5. Fixed assets have been efficiently utilized.
6. Company’s average collection period decreased this shows that it has good credit
Management policy.
7. Inventory turnover ratio has decreased from 2011 to 2012; this shows that it has
Efficient inventory management policy.
8. The company has been maintaining sufficient amount of working capital in all the years.
9. It indicates the amount of quick assets available for meeting of current liability.
Traditionally, a quick ratio of 1:1 is consider to be satisfactory.

SUGGESTIONS
1) Suggested the company should follow the present working capital.
2) The company spends reasonable amount on inventory so that it should be followed for the
further years.
3) The quick ratio of the company is found satisfactory. The company should try to maintain
the same ratio in future keeping in view of the safe liquidity position of the company.
4) The cash ratio is stable and improvement is seen every year .so the cash handlings is
maintained like this every year.
5) The company should tighten its credit policies so that receivables are collected soon there
by reducing sundry debtors and improving cash position.
6) It is suggested that the company should established reasonable basis for estimating future
working capital requirement.

CONCLUSIONS
1. During my industrial traing of yusufi enterprises I found that the working capital analysis is
an integral part of industrial success.
2. The top management is every aware about the good working capital analysis they know that
can make their environment and implementation of various polices better with the help of
working capital analysis
3. They are all also known that the good working capital analysis make their environment
(internal/external) healthy through which their makes their relationship is more and more better
with the other practice.
4. The top management has played a great role in the progressive of better working capital
analysis through its various activities are the administrative increase in the managerial personal
the working capital is the base of industrial success.

BIBLOGRAPHY
BOOKS:
 AGRAWAL, N.K. (2003) “Management of Working Capital”, Sterling
Publishers Pvt, Ltd, New Delhi.
 Batty, J.(Second ed.) “Management Accounting”, Machdonald & Events Ltd.,
London.
 Cumen, Ward S. (1987): “Principles of Financial Management”, New York.
 Herbert, B. Mayo 91978): “An Introduction to Money and Financial
Management”, D.C. Health and Company.
 Foulka, Roy A. (1959): “How to Control Accounts Receivable for Greater
Profits, New York.
 Ziauddin Khan and Arora R.K. (1975): “Public Enterprises in India”.

A Study On: Master OF Business Administration Topic-Finance S Under THE Supervision AND Esteemed Guidance OF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Study On: Master OF Business Administration Topic-Finance S Under THE Supervision AND Esteemed Guidance OF

Uploaded by

Copyright:

Available Formats

A STUDY ON

͞WORKING CAPITAL MANAGEMENT͟

DEPARTMENT OF MANAGEMENT STUDIES

E.Y.REDDY U.RAM BABU

Date: (V.DINAKAR RAJU)

management. The significance

Categories they are:

1. Fixed capital. 2. Working capital.

Working capital management is significant in financial management. It plays a vital role in

The management of current assets on the basis of the following points.

return trade off is involved holding current assets.

Day to day operation of business”

“Working capital is a financial metric which represents operating liquidity available to a

compare, itself with the competitors in the industry.

upcoming operational expenses. The management of working capital involves managing

inventories, accounts receivable and payable, and cash.

1) To study the working capital management in the organization.

2) To understand briefly the theoretical background of financial performance

3) To study the theoretical framework of working capital.

4) To examine or analyze & interpret the received data.

Research methodology carried for this study can be two types:

However collection of primary data in international and domestic research is an expensive

level of economic development. In preparation of this project report i depended more on

It refers to information already collected by someone else, either an individual or an

exporters encyclopedia, scripts year book and other international pharmaceutical

economic policies of various countries.

Information, thinking it to be true.

3. Primary data is limited

Less in order to know about the overall objectives of the study.

renowned Manufacturer,Exporter and Supplier of distinguished range of Rubber Gaskets, Rubber

various sizes and dimensions.

for clients' convenience.

Year of establishment 1981

machines at regular interval of time

OUR TEAM & STAFF

urgent order of quality assurance.

the entire products range.

RUBBER BONDED SEALS

and pneumatic machine.

range at the client’s end.

Furthemore,our offered seals can be availed by our clients at reasonable prices.

to our clients at affordable prices.

offered seals can be availed by our valued clients at affordable prices.

to our client’s at the most affordable price.

SILICONE RUBBER PRODUCTS

construcation, automotive and engineering industries

seals form us at reasonable prices.

MISSION AND VISION

2. Deliver enhanced value at all stake holders

3. Most profitable company

4. Motivated and committed team developed for high performance organization.

Enterprises this involves the following analysis

2. PRODUCT AND SERVICE PLANNING

4. MANAGING FOR RESULTS:

utilization of every rupee spent in marketing.

5. MARKET OPPORTUNITY OF USIFI ENTERPRISES:

Identification of market opportunity is critical before the management of affirm takes a

1. Size of the market

2. How well the market is served

5. Core competencies required

a torus; it is a loop of Elastomer with a round cross-section, designed to be seated in a groove

rotating pump shafts and cylinder pistons.

tens of megapascals (thousands of psi) of pressure.