INTRODUCTION

Working capital is one of the most important requirements of any Business

concern. Working capital can be compared with the blood of human beings. As human
cannot survive without blood, in the same way any business concern can survive without
working capital.

Working capital management deals with maintaining the levels of Working capital
to optimum, because if a concern has inadequate opportunities and if the working capital
is more than required then the concern will lose Money in the form of interest on the
blocked funds. Therefore working capital Management plays a very important role in the
profitability of a company.

To go deeper into the topic first of all the meaning of working capital should be
made clear. The term working capital stands for that part of the capital, which is required
for financing the current needs of the company.

It is usually invested in raw material stock (both finished and semi finished).
Accounts receivable, saleable securities and in cash. Capital in all these forms in
constantly being converted into cash and this cash flow out again in exchange for other
forms of working constantly turned over management of working capital usually involves
planning and controlling these current assets.

NEED& IMPORTANCE OF THE STUDY

 Working capital is very essential to maintain the smooth running of the business.
 It is to obtain a true insight in to the financial position of the The Siva stone Inc.
 Working capital is just like a heart of business. A good working capital helps to
run the business effectively and maintain the more profitability position of the The
Siva stone Inc
OBJECTIVE OF THE STUDY

1. To project in the various accepts of Financial Management of The Siva stone Inc
with a particular emphasis on working capital.

2. To study the origin and development of Siva stone Inc

3. To find out the present and future working capital position.

4. To find and understand the trend in working capital position.

5. To offer conclusions and suggestions.

METHODOLOGY

The primary source of data for the study is collected through personal interview
with concerned finance executives.

The secondary sources of data from the study are annual reports.

LIMITATIONS OF THE STUDY

1. The amount used in the reports is taken from the annual reports published at the
need of respective years.

2. The result doesn’t reflect the day to day transactions.

3. It is impossible to study the day to day transactions in the cash management.

4. The working capital statement over the years doesn’t take into account price level
changes.
 INDUSTRY PROFILE

STONE INDUSTRY IN INDIA

India is a country which is endowed with high quality natural tones like marble,
sandstone, granite etc.

India has more than 11% export share in total world's total stone export. It produces
more than 27% of the total stones produced in throughout the world. India is recognized
as one of the largest raw stone material producer. India is a place of different types of
dimensional stones which include marble, granite, sandstone, slate, limestone and
quartzite that are widespread in every corner of the nation. As per an estimation Indian
stone industry is estimated to be more than Rs 3,200 crore processing stones.

Indian monuments are supplied in more than 25 nations throughout the world. India
encompasses around 32 various varieties of granite for monuments and more than 90% of
them can be find in 3 southern states- Tamil Nadu, Andhra Pradesh and Karnataka.

More than 95 per cent monument factories are situated in Tamil Nadu, Andhra Pradesh
and Karnataka. Tamil Nadu shares around 75 per cent. There are around 150 units located
in Tamil Nadu. India is a renowned producer of natural dimensional stones, possessing
excellent physical and chemical characteristics. One can find out the enormous
opportunities waiting to be geared in the stone industry. Stones like granites, marbles,
sandstones, limestones, slate stones etc. are characterized as one of the best quality stones
in all over world. In present date stone industry is recognized as one of the fastest
growing sector in the Indian economy.
STONES AVAILABLE IN INDIA

There are various types of stones with sparkling appearance and fine finishing available
in different places of India. Have a look on some types of stones which are found within
the Indian Territory.

Marble deposits can be found in various parts of India with economically high deposits
concentrated in the states of Gujarat, Madhya Pradesh, Rajasthan, Haryana, Telangana
and Andhra Pradesh. New varieties of marbles are found and are gradually being
developed in Bihar, Jammu & Kashmir, Sikkim, Maharashtra, Uttar Pradesh and West
Bengal

Rajasthan has a huge concentration of marble with reserves dissipated in various districts
of Nagaur, Udaipur, Rajsamand, Banswara, Dungarpur, Jaipur, Sirohi, Bhilwara, Ajmer,
Bundi, Alwar and Pali. The different colors found in Rajsthan marbles are Makrana
Albeta White, Green, Makrana Kumari White, Makrana Dungri White, Jhiri Onyx,
Phalodi Pink, Ambaji White, Indo-Italian, Babarmal Pink, Bhainslana Black, Forest
Green, Forest Brown, Agaria White.

Granite multicolor varieties of granite can be easily seen in the states of Karnataka,
Andhra Pradesh, Tamil Nadu and Uttar Pradesh. India has a huge reserves of one of the
best quality of granite with varied varieties, having more than 200 shades. More than
20% of world's granite is found in India. The nation holds the no.1 rank as a largest
granite and granite products exporter.

Sandstone deposits are available in the states of Assam, Andhra Pradesh, Bihar, Gujarat,
Haryana, Madhya Pradesh, Meghalaya, Mizoram, Karnataka, Orissa, Punjab, Rajasthan,
Uttar Pradesh, Tamil Nadu and West Bengal. More than 90% of sandstone deposits are
available in Rajasthan, which are spread in the districts of Dholpur, Bharatpur, Kota,
Jodhpur, Sawai-Madhopur, Bundi, Chittorgarh, Bikaner, Jhalawar, Pali, and Jaisalmer.
Slate deposits are available in Haryana, Rajasthan, Himachal Pradesh, Andhra Pradesh,
and Madhya Pradesh. Slate depository in Rajasthan are found in Alwar, Ajmer,
Bharatpur, Tonk, Sawai Madhopur, Pali, Udaipur, Churu, and Chittorgarh.

Limestone deposits are found in large quantity in state Andhra Pradesh. It accounts to
more than 32% of country's total limestone reserves. The state's limestone reserve is
calculated to be nearly 93,623 million tonnes.

Physical and Chemical Properties of stone

Sandstone is a sedimentary rock group which is mostly made up of tiny grains of quartz.
Most sandstone is formed in oceans, lakes and rivers where tiny bits of rock and dirt
settle to the bottom. Year after year, these layers of sand get buried under tons of more
sand and dirt until it is turned into solid rock. Sandstone can be found in many colors.

Physical Properties of Sandstone

Physically, they are very Hard, Compact, Fine grained, equi-granular homogeneous rocks
of sedimentary nature (Sandstone)

Chemical Properties of Sandstone

Chemically they are very resistant Mono-Mineralic rocks, principally composed of silica.
The other minor constituents vary from origin to origin.

They are highly resistant to acids, alkalies and thermal impact. Insolubility in acids and
alkalies is about 97%.

Teakwood and Rainbow sandstones differ from above physical properties

Varieties of Sandstone

Kandla Gray

Also known as Bhilwara-GREY has quartz grains cemented together by secondary silica
calcite. This sandstone is available in three different shades of bluish gray, dark gray, and
light gray.

Rajpura Green

Also known as Bhilwara-GREEN is a commonly used building stone. Rajpura stone can
be easily carved and dressed into various attractive shapes. It finds various applications
including - roofing, flooring, paving and paneling.

Marson Copper

Also known as Bhilwara-BROWN sandstone is a smooth round stone. This stone is made
up of grains of quartz and other minerals of fairly uniform size.

Chocolate
This sandstone has high content of iron oxide making it buff to brownish; and sometimes
reddish. The most important usage of this stone is exterior cladding and is available in
natural, sawn as well as polished surface finishes.

Gwalior Greenish White

Also known as GWL-MINT, Gwalior Mint is most suitable for use in flooring, wall
fixing and lining due to its physical and chemical properties. It is the smooth natural split
surface which makes it commensurate for flooring. This highly useful stone is also
suitable for carving and making stone handcrafted items.
Lalitpur Yellow

Also known as LLP - YELLOW this stone is especially meant for exterior cladding in sea
shore buildings due to acid & thermal resistant properties. The saline winds have
negligible effect on LLP Yellow stone(Lalitpur sandstone).

Dholpur-BEIGE
This buff white colored sandstone is one of the highly used sandstone variety. The
peculiarity of the stone is the attractive, minor purple veins that are visible when the stone
is wet. Owing to its regular bedding, uniform grain size, suitable nature and durability, it
has been used from over centuries and is a constituent of a large number of historical
buildings and monuments.

Dholpur PINK

From Dholpur origin in Rajasthan, this stone is available in form of tiles, slabs, blocks in
either natural, sawn or polished surfaces. The stone is mostly used for exteriors and has
regular bedding, uniform grain size, suitable nature and durability.

Agra Red

Also known as Dholpur-RED is one of the most famous varieties of sandstone ever since
its use in Agra Fort and Delhi Fort. The stone has high degree of tolerance that does not
show weathering effects even for ages. The stone being smooth and soft is easy to be
carved and cut and is therefore used in stone handicrafts.

Khatu Teak

This creamish colored stone is fine grained and bears brown veins through out the
surface. This brownish touch gives the look of wooden finish and hence is also named as
teakwood sandstone. This stone is available only in the form of tiles with sawn surface
finish, since this stone can not be polished.
Khatu Rainbow

Rainbow stone is made of fine grained quartz and various other minerals. The presence of
other minerals lend attractive color to the stone. Depending on the percentage of
constituent minerals the color varies in the form of brown, violet and sometimes reddish
veins. It is because of the regular color variation that this stone has been named Rainbow.
Like Khatu Teak, rainbow is also available in tiles in sawn finish only.

STANDARD SPECIFICATIONS

Quality

Minor color tonal variations exist but within the tolerance limit Availability -Tiles, Slabs,
Blocks, Cobbles.

Edges

» Both hand chiseled and machine cut (sawn)

Tiles Size in cms » 30x30, 40x40, 60x30, 60x60, 60x40, 60x90 Cut to size Tiles

Thickness

» 15mm to 50mm with a tolerance of ±5mm» 18mm to 22mm with a tolerance of

±2mm (for Both sides Sawn)

Slab Size in cms

» Cut to size slabs Upto 200cm length and 60cm width.

PRODUCTION

Gantry Crane

The Big Block are unloaded in the vicinity of huge Gantry Crane of capacity 40 MT.
These big sandstone block are lifted on the dressing Machine
Block Dressing Machine

The Big random size blocks are lifted on the trolley of the dressing machine for proper
dimensional size.

Gang Saw

After cutting in dimensional size the blocks are lifted with the help of Gantry Crane on
the trolley of Gang Saw Machine for slabs cutting.

Edge Cutting Machine

The Slabs produces on the Gang Saw Machine are cut into tiles of required size and
thickness on the Edge Cutting Machine.

Block Cutting Machine

The Block Cutter is used to cut large dimensional sized stone, known as blocks are being
produced on this machine.

Polishing Machine

The tiles and slabs are being polished on this machine. The requires bfinish such as
brushing (antique) finish and shine polish are preformed on this machine.

Shot Blasting

The shot blasting or sand blasting is performed on the tiles, slabs, locks is done by the
Shot Blaster.

Flaming

Columns and Pillars that gives and outstanding looks to a building are designed on the
high capacity Lathe Machine.
PACKING AND DELIVERY OF SAND STONE

Packing

Stone's packaging is very important. Items are carefully packaged for shipment, and
should be checked for external damage on receipt, where sign-off will be requested.
Boxes of tiles are packed in polystyrene and then secured together on a pallet for
delivery. Note some items such as slate are sold in crates rather than boxes.

Crate Packing - Standard Packaging

Each wooden crate is first in lined with polythene to protect stones from staining from
wooden planks or from any other feature, then it is in lined with foam-sheet along
horizontal planks to protect stones against damage from wooden planks or nails. This is a
fundamental preliminary packing used for all our wooden crates irrespective of the type
of stone packed.

STAND PACKING

PALETTE PACKING

In case of polished stones, surface of each slab/tile is protected by using a paper cloth or
2mm-foam while tightly stacking them in a wooden crate. This protects the polished
surface of stones from scratching due to abrasion of dust particles between two tiles.

We consider that the quality of packing is as important as the quality of product. We

never try to save cost on wood or other packing materials. Stone is normally available in
various textures and finishes:
Polished:

The Most popular finish – One side is Finished by the action of the Abrasives on
polishing head, gives a mirror finish on Granite, and diminishing in the reflective
properties, as we go from Granite to marble and slate etc.

Shade:
We strictly maintain the shade of the merchandise as desired by the client. While
producing cut to size tiles, careful batching is done even when the material is cut from the
same slab / block.

Thickness:
While sawing, especially marble we take a lot of care, for the best result as it is a very
brittle and pasty material. A little less carefulness and the result is taper slabs.

Squarness :

Maintain Perfect square ness in cut to size materials; thanks to the automatic bridge
cutting machine from Peddrine SPA & Breton SPA, Italy. We never use locally made
bridge cutting machines or conventional hand driven edge cutting machines as it is far
than difficult to maintain.

Shipping:
Even in F.O.B. & C.& F. shipments consider it as our duty to investigate and inform the
buyer with various options of suitable shipping lines offering best freight along with
shortest transit time and satisfactory service. Our job does not just end upon loading the
container. We maintain the track of container till it reaches the destination and keep the
client advised of various movements/trans shipments.
Quality Control & Inspection

Should have an in-house designed three stage quality control system which does not
leave any room for mistakes or carelessness. The first stage starts at quarry level where
every individual block is carefully inspected. A 3D picture is drawn displaying all the
characteristics. The second stage inspection is conducted upon sawing where the material
is closely inspected & various findings are properly recorded with drawings. At the final
stage the polished finished product is inspected using various gadgets. A proper recording
is done at this level also. Before shipping, a photograph is taken of the material and the
packing of every container and a proper record is maintained.

USES OF THE SANDSTONE

Sandstone is uses as building and paving stone which is mainly used in

Houses,Gardens,Ofiices,for Flooring,Paving and in walls.

Sandstones are used for variety of purposes. They are mainly used in paving, roofing,
flooring etc. They are also used in making beams, pillars, doors and window sills, wall
facing, fence posts etc.

 Sandstones are resistant to saline air, which make it perfect for exterior cladding in
sea-shore buildings.

 They are also acid and alkali resistant. So, they are used in chemical industry for
flooring, wall-covering.

 They are thermal resistant so used for making fireplaces.

Some common uses of sandstone are given below:

 Sandstone Flooring

Sandstone is a wonderful material for flooring purposes. Its high strength make it
perfect for making floors of shopping markets, offices, residences, monuments,
 parks and many more. The different colors and patterns make it easy to choose
from that suits your need.

 Sandstone Wall

Sandstone walls have been a tradition for years. Be it Red fort, hawa mahal,
Rashtrapati Bhawan or any other historical monument the sandstone walls have
added a great value to their beauty. The durability and long lasting of these walls
show that sandstone is an ideal material for wall construction. Walls made with
white sandstones shows the impact of serenity and purity. Red sandstones are
largely in demand.

 Sandstone Pavers

The high strength of sandstone tiles, blocks, and slabs make it suitable for paving
floors. The different shades and patterns of sandstone make your garden pavement
gorgeous. Sandstone enhance the style and look of pavements making it attractive.

Different type of sandstone tiles and chips are used to create patterns which
enhance the beauty of these pavements.

 Sandstone Fireplace

The thermal resistant property of sandstones make it idle for building fireplaces.
Its natural rugged look impart unique look to the fireplace. Red and yellow
sandstones matching with fire waves make it alive and feels realistic.

Sandstone Properties

 High mechanical strength

 Resistant to acids and alkalies

  Resistant to air and Saline water

 Low water absorption ability

 Resistant to Corrosion and weathering

 Excellent binding with cement

HS CODES FOR SAND STONE

HS Codes of Heading 2516 : Granite, porphyry, basalt, sandstone and other monumental
or building stone, whether or not roughly trimmed or merely cut, by sawing or otherwise,
into blocks or slabs of a rectangular (including square) shape.

Sandstone-25162000
 COMPANY PROFILE

About Siva Stones Inc

Established in 2012, Siva Stones Inc has gained immense expertise in supplying &
trading of Granite slabs etc. The supplier company is located in Ongole, Andhra Pradesh
and is one of the leading sellers of listed products. Buy Granite slabs in bulk from us for
the best quality products and service.

Granite Slabs - Exporter From Ongole

Siva Stones Inc is a quality driven organization offering a wide range of Granite slabs , ,
. Established in 2012, the firm supplies Granite slabs , within preset time limit.

ABOUT THE COMPANY & PRODUCTS

Siva Stones Inc with a desire and intention to manufacture/produce crushed stones (size
35mm, 20mm, 12mm). The stone crusher will crush the stone daily except in the rainy
season. This is because it is difficult & risky to transport the stones and also very less
construction work is carried. Work will be carried for seven months while two months
will be the period of storing raw materials because after rainy season the price increases.

As construction and road building is booming in India, Stone crushing mills have
proliferated throughout India to accommodate the huge demand for stone used in
Construction of roads, bridges, housing, industrial building construction and other cement
based products like RCC pipes, PSC poles, pre-molded slabs, frames and beams, etc for
fabrication.

Housing is a basic need of the human being as well as society. Hence, it is receiving
increased focus towards crushed stones. This company wants to put its maiden step into
crushed stone. Simultaneously, the wastage from the stone industry will be of much use
to the crushed stone and it is in the form of sand.
CRUSHED STONES:-

The demand for crushed stone will continue to grow with the Growth of its user industry.
The unit can be set up depending availability of raw Material and major commercial
centre.

 Crushed stone is segregated into various sizes like 35mm, 20mm, 12mm, etc for
different uses.

 Crushed stone aggregates are used for construction of roads, bridges, housing,
industrial building construction and other cement based products like RCC pipes,
PSC poles, pre-molded slabs, frames and beams, etc for fabrication.

 It is advantageous if the crushed stone unit is set up near the quarries where the
granite boulders of various sizes are available for the crushing unit.

 The wastage from the stone industry will be of much use of the crushed stone
unit.

Wastage of Stone:-

The wastage of the stone is in the form of sand. It has followings features & advantages.

 Best material used in construction rather than sand.

 Rare to purchase as it is the wastage of stones.

 Costly than sand & crushed stones.

PROCESS OF MANUFACTURING

 The granite stones of various sizes are fed into the jaw crushers for size reduction.

 Depending on the desired output size of the crushed stone, the raw materials are
fed to one or two jaw crushers in a sequence.
  Then these crushed stones re passed onto the rotary screen for size gradation.

 Material is handled through a belt conveyor to the different

Places of operation i.e. from jaw crusher to the rotary screen.

The whole process of crushing stones or granite stones shall be automatic except the
process of placing the stones into the jaw crusher for the size reduction. The sizes vary
when the stones are crushed. The sizes of stones is segregated into various sizes like
35mm, 20mm, 12mm, etc. these sizes are used in different purposes.

The installed machinery has the capacity to crush one truck daily of each various sizes
i.e. 1 tucks daily of each sizes like 35mm, 20mm, 12mm etc except the wastage of stones
in the form of sand. It reaches 1 truck in a month.

FACTORS OF PRODUCTION

Raw Material:-

The raw material required for crushed stones is stones from the river and the small hills
or mountains.

The raw materials are transported from the river and other small hills or mountains to the
installed plant & machinery.

Labor:-

Labor is available at reasonable rates. On holiday labor are available on the basis of hour
at the reasonable rates.

Marketing profile

The unit is basically producing crushed stones for construction activities. Hence the
demand for crushed stones would be always rising due to the fact of population explosion
in India. This is because as population grows, there will be the demand for house and in
order to make house or any constructive work crushed stones are required.

Housing is a basic need of the society. Hence, it is receiving increased focus. All the
building constructions whether it is housing or industrial construction activities requires
crushed stone. Crushed stone is also required for cement based products like RCC pipes,
PSC poles; cement concrete hollow blocks, precast cement concrete slabs, well rings,
window & door frames and road Laing. The demand for crushed stone will continue to
grow with the growth of its user industry.

Moreover the director of the unit is well experienced, rather he is experts in the field of
marketing and finance too. The company will be planning to expand it activities in other
adjoining places too. Hence there will always be a healthy market for the units produced.
The company has studied and analyzed the market thoroughly.

Basic Assumptions

 The property or land on which the crusher will be established its own property
which is 2 acre.
 The work shed will be constructed on 100 sq. meters while. The office will be
constructed on 5 sq. meters.
 The working period will be 9 months in a year, which include 26 days in a month.
Two days will be holiday while 2 days will be working time on time basis in a
month.
 The working hours will be 8 hours per day while on holiday 4 hours per day.
 It is considered that in 1 truck of boulders contains 4 ft. of boulders (1truck=4 ft.).
The ft. is considered as the height of the truck from the boulders to be load.

Loan is sanctioned on the basis of fixed deposits kept in bank. It is assumed that 80%
loan is sanctioned out of total deposits. But loan is taken only 60% of fixed deposits that
are kept. The loan is sanctioned by the State Bank Of India.
 THEORETICAL FRAME WORK
What is Working Capital?

Firms need cash to pay for all their day-to-day activities. They have to pay wages,
pay for raw materials, pay bills and so on. The money available to them to do this is
known as the firm’s working capital. The main sources of working capital are the as these
are the short-term assets that the firm can use to generate cash. However, the firm also
has current liabilities and so these have to be taken account of when working out how
much working capital a firm has at its disposal.

Working capital is therefore:

WORKING CAPITAL Current Assets - Current liabilities

||
stock + debtors + cash

Working capital management means management of current assets of the firm. It

can be defined in simple terms as excess of current assets over current liabilities. In short
it is the difference between inflow and outflow of funds. Working capital includes stock
of raw material, semi finished goods including work in progress, cash in hand and bank
and debtors after deducting current liabilities i.e. sundry creditors for expenses ex:
salaries and other administration expenses, interest payable to term lending institutions
and other financial institutions within 12 months and creditors for purchase of Raw
Material and any short term advances towards sale of goods.
 The working capital is an important part of the top half of the firm's balance sheet.
It is vital to a business to have sufficient working capital to meet all its requirements. any
businesses have gone under, not because they were unprofitable, but because they
suffered from shortages of working capital

Working Capital Cycle

Cash flows in a cycle into, around and out of a business. It is the business's life
blood and every manager's primary task is to help keep it flowing and to use the cash
flow to generate profits. If a business is operating profitably, then it should, in theory,
generate cash surpluses. If it doesn't generate surpluses, the business will eventually run
out of cash and expire.

The faster a business expands the more cash it will need for working capital and
investment. The cheapest and best sources of cash exist as working capital right within
business. Good management of working capital will generate cash will help improve
profits and reduce risks. Bear in mind that the cost of providing credit to customers and
holding stocks can represent a substantial proportion of a firm's total profits.

There are two elements in the business cycle that absorb cash - Inventory (stocks
and work-in-progress) and Receivables (debtors owing you money). The main sources of
cash are Payables (your creditors) and Equity and Loans.
 .

Each component of working capital (namely inventory, receivables and payables)

has two dimensions: TIME and MONEY. When it comes to managing working
capital - TIME IS MONEY. If you can get money to move faster around the cycle
(e.g. collect monies due from debtors more quickly) or reduce the amount of money
tied up (e.g. reduce inventory levels relative to sales), the business will generate
more cash or it will need to borrow less money to fund working capital. As a
consequence, you could reduce the cost of bank interest or you'll have additional
free money available to support additional sales growth or investment. Similarly, if
you can negotiate improved terms with suppliers e.g. get longer credit or an
increased credit limit; you effectively create free finance to help fund future sales.

It can be tempting to pay cash, if available, for fixed assets e.g. computers, plant,
vehicles etc. If you do pay cash, remember that this is now longer available for working
capital. Therefore, if cash is tight, consider other ways of financing capital investment -
loans, equity, leasing etc. Similarly, if you pay dividends or increase drawings, these are
cash outflows and, like water flowing down a plughole, they remove liquidity from the
business.
CONCEPT OF WORKING CAPITAL:

There are three types of working capital, Gross working capital, Net working capital and
fixed working capital.

1. Gross Working Capital: It refers to the firms investment in current assets i.e.,
mainly stock, debtors, bills receivables and cash. This is also known as ‘Current
capital concept’ or ‘Circulating capital concept’. It is represented by the sum total
of the current assets of the enterprise. It is known as Circulating capital’ because
current assets of a company are changed from one form to another, for e.g. from
cash to inventories, inventories to receivable to cash.

The Gross capital concept focuses attention on two aspects of current assets
management:

a). Optimum investment in current assets and

b). Financing of current assets.

The gross capital concept takes into consideration that: every increase in the
funds of the enterprise would increase its working capital. This concept is more
useful in determining the rate of return on investments in working capital.

2. Networking capital: It is Excess of Current Assets over Current Liabilities.

Alternatively it is that portion of the firm’s current assets, which is financed by
long-term funds.

Net working capital being the difference between current assets and current
liabilities is quantitative concepts.

 It indicates the liquidity position of the firm.

 Suggests the extent to which working capital needs may be financed by

permanent sources of funds.
 3. Fixed working capital: Every firm is required to maintain a minimum balance of
cash, inventory etc, in order to meet the business requirement even in the slack
seasons. This part of current assets is called as permanent or fixed working capital.

TYPES OF WORKING CAPITAL:

Depending upon the nature of the funds blocked, working capital can be of two
types

1. PERMANENT OR REGULAR WORKING CAPITAL

2. VARIABLE WORKING CAPITAL

PERMANENT WORKING CAPITAL:

The magnitude of the current assets depends upon the firms operating cycle. The
operating cycle is a continuous process and the need for current assets is also
continuously. But the level of current assets needed is not always same. It increases or
decreases overtime. However there is always minimum level of current assets which is
continues required by a firm to carry out its business operations. The minimum level of
current assets is called permanent or fixed working capital.

It represents the minimum amount of investment in current assets that is seemed

necessary to carry on operations at time. It is also known as ‘hard core’. It is of two
kinds:

a). INITIAL WORKING CAPITAL:

At its inception and during the formation period of its operations, a company must
have enough cash funds to meet its obligations. In the initial year it as revenues may not
be regular and adequate credit arrangements may not be available from banks, financial
institutions, etc till it has established its credit standing, credit may have to be granted on
sales to attract the customers.
b). REGULAR WORKING CAPITAL:

It is the amount of working capital needed for the continuous operations of the
business of the company. It refers to the excess of current assets over the current
liabilities so that the process of conversion of cash into stock, stock into sales, receivables
and collections is maintained without any breaks.

VARIABLE WORKING CAPITAL:

This working capital required over and above the permanent working capital
depends upon changes in production and sales are called fluctuating or variable working
capital or temporary working capital. There may be changes either increase or decrease in
working capital. Many the variable working capital required in season dependent.

It represents additional assets required at different times during the operating year
to cover any change or variability from the normal operations. It can be of two parts:

A. Seasonal working capital

B. Special Working Capital
A. Seasonal working capital:
The amount to be blocked due to seasonal nature of industry. Examples are
package tours and summer tours. Obviously it refers to financial requirement that cope
up during that particular season. Beyond their initial and regular circulating capital most
business will require at stated intervals a large amount of current assets to fill the
demands of the seasonal busy periods.

B. Special Working Capital:

Extra funds are needed to meet contingencies, festivals, and special occasions. All
business enterprises have to be prepared to meet unforeseen eventualities that may arise
in the course of their operations. Therefore, they must have extra funds at ‘Unstated
Periods’ to meet contingencies.
COMPOSITION OF WORKING CAPITAL:

Working capital consists of

Current Assets

Current Liabilities

Current Assets:

Current Assets are those, which can be converted into cash with one year without
affecting the operations of the firm.

In the management of working capital, two characteristics of current assets must be borne
in mind:

1. Short life span

2. Swift transformation into other asset forms.

The life span of current assets depends upon the time required in the activities of
procurement, production, and sales.

List of Current Assets:

 Cash and Bank Balances

 Investments:

a) Government and Other Trustee Securities

b) Fixed deposits with Banks

 Receivables arising out of Sales

 Instalments of Deferred receivable due within a year

  Raw Material and components used in the process of manufacture including those
in transit

 Stock in Process including semi-finished goods

 Other consumable spares

 Advance payment of tax

 Advance for purchase of raw materials, components and consumable stores

 Prepaid Expenses

 Deposits kept with public bodies for the business operations.

Current Liabilities:

Current Liabilities are those, which are expected to fall due or mature for payment
in a short period not exceeding a year and represent short term sources of funds.

List of Current Liabilities:

 Short term Borrowings (including bills purchased and discounted) from

a) Banks and

b) Others

 Unsecured Loans

 Public deposits maturing in one year

 Sundry creditors for raw materials and consumable stores and spares

 Interest and other charges accrued but not due for payment

 Deposits from Dealers, Sellers agents, etc

  Instalments of term Loans, Deferred payments, Credits, Debentures, Redeemable
preference shares and long term deposits, payable within on

 Statutory Liabilities

a) P F dues

b) Provision for taxation

c) Sales tax and excise tax

d) Obligations towards workers considered statutory

e) Others

 Miscellaneous Current Liabilities

a) Dividends

b) Liabilities for expenses

c) Gratuity payable within one year

d) Other provisions

e) Any other payment due within one year

OBJECTIVES OF WORKING CAPITAL:

The main aim of Working Capital Management is to attain a Trade-off between

Profitability and Risk. Here Risk refers to profitability that a firm will become technically
insolvent. Risk is commonly measured by using the amount of net working capital or the
current ratio. Thus, more the new working capital, the more liquid the firm and therefore
less likely it is to become technically insolvent. On the other hand, Lower levels of
liquidity are associated with increasing levels of Risk. To increase the amount of profits,
a firm, may sacrifice solvency i.e. taking risk of technical insolvency and maintain
relatively low levels of current assets. When the firm does so, its profitability would
improve but would be exposed to greater risk of technical insolvency. Thus, if a firm
wants to increase profitability it must also increase its risk and if it wants to decrease risk,
it must decrease profitability. Therefore, Working capital management involves a Trade-
off between Risk and Profitability.

FACTORS DETERMING WORKING CAPITAL:

There are no hard and past rules for determining working capital of the firm. There
are several factors which influence working capital need of the firm and the factors may
change from time to time. The following are the factors that generally influence the
working capital requirement of firm.

a. Nature & size of the business

b. Trading & service orient firms have very small investment in fixed assets,
but require a large sum of money to be invested in working capital.
Manufacturing business requires much working capital but it also depends
nature of business.

REVENUE GROWTH:

The working capital requirement of the firm increase as it revenue grow. But to
establish a direct relationship between volume of revenue and working capital requires is
difficult. Practically current assets will have to employ before revenue growth takes
place. It is therefore necessary to make advance planning of working capital requirement
for a firm on a continuous basis.

DEMAND CONDITION:

Many firms are seasonal in nature and cyclical fluctuations in demand for their
products and services. These business variations effect the working capital requirement
i.e., temporary requirement of working capital of the firm. Under the boom conditions the
firm requires more working capital. As they will invest huge funds infixed assets.
Seasonal fluctuations i.e., peek season demand in more resources a in production, in
certain month, will also effect working capital requirement. Therefore financial
arrangements for seasonal working capital requirement can be made in advance. The
financial plan should be flexible enough to take care of some abrupt seasonal fluctuation.

OPERATING EFFICIENCY AND PERFORMANCE:

The operating efficiency and performance of the firm relates to the optimum
utilization of resources at minimum cost. If the firm can efficiently controlling operating
costs then it can effectively contributing to its working capital. Better utilization of
resources includes profitability and internal cash profit can be utilized as a part of
working capital. The availability of cash generated will be available for working capital
depends upon taxation, dividend, retention policy and depreciation policy of firm.

FIRM CREDIT POLICY:

Every firm must allowed credit to its customers. The credit period depends upon
the norms of the industry and market conditions. Effect the credit policy i.e. credit to
customers allowed after properly accessing the credit worthily ness of the customers and
firms collections will maintain the level of book debts which anti effect the working
capital of the company.

RATIOS RELATING TO WORKING CAPITAL:

To evaluate the financial condition and the purpose of a firm the financial analyst
needs certain yardsticks frequently use are a ratio relating two pieces of financial data to
each other. Different types of ratios relating to working capital management are

1) CURRENT RATIO:

The current ratio is calculated by dividing current assets by current liabilities.

Current ratio =Current assets /Current liabilities

 Current Assets include cash and those assets, which can be converted into cash
within a year, such as marketable securities, debtors, and inventories. Prepaid expenses
are also included in current assets as they represent the payments that will not be made by
the firm in the future.

All obligations maturing within a year are included in current liabilities. Current
liabilities include creditors, bills payable accrued expenses, short-term bank loan, income
tax liability, long-term debt5, maturing in the current year.

The current ratio is a measure of firm’s short-term solvency. it indicates the

availability of current assets in rupees for every one rupee of current liability. A ratio of
greater that one means that the firm has more current assets than current claims against
them.

2) QUICK RATIO

It establishment a relationship between quick or liquid assets and current

liabilities. An asset is liquid if it can be converted into cash immediately or reasonably
soon without a loss of value.
Cash is the most liquid asset. Other assets, which are considered to be relatively
liquid and included in quick assets, are considered to be relatively liquid and included in
quick assets, are debtor’s bills receivables marketable securities (temporary quoted
investments). Inventories are considered to be less liquid. Inventories normally require
some time to rely into cash; their value also has a tendency to fluctuate. The quick ratio is
found out dividing quick assets by current liabilities.
Quick ratio = Current assets – inventories / Current liabilities.

Generally, a quick ratio of 1 to 1 is considered to represent a satisfactory current

financial position. Although quick ratio is more penetrating test of liquidity than the
current ratio, yet it should be used cautiously. A quick ratio of 1 to 1 or more does not
necessarily imply sound liquidity position. A company with a high value of quick ratio
can suffer from shortage of funds if it has slow paying its current obligation in time if it
has been turning over its inventories efficiency, nevertheless, the quick ratio remains an
important indeed of the firm’s liquidity

3) INVENTORY TURNOVER RATIO:

This ratio expresses the relation between the cost of goods sold during a give
period and the average amount of inventory outstanding during a period. The formula for
these ratios is as follows:

Inventory Turnover Ratio = cost of goods sold/Avg. Inventory at cost

Avg. Inventory = opening stock + closing stock / 2

Inventory turnover ratio may also be calculated by making use of the following
formulation.

Inventory turnover ratio = net sales / Avg. inventory at selling price

Inventory turnover indicates the velocity with which goods move through the
business. It gives the rate at which inventories are converted into sales and then into cash.
Thus it helps to measure the liquidity of the firm. A high ratio indicates quick movement
of inventories and the efficiency of inventory control. A low ratio, on the other hand,
indicates existence of slow moving and obsolete stocks.

4) DEBITORS TURNOVER RATIO:

This ratio express the relationship between net credit sales of affirm and its trade
debtor’s bills receivable there by indicates the rate at which book debts are converted into
cash. In other words, it shows how many days credit is outstanding by debtors or the time
taken to collect the debts.
Debtors turnover ratio = Net credit sales / Avgas, debtors
To calculate the debt collection period just to following:
Debt collection period = Number of working days in a year / debtors turnover ratio
Usually the number of working days in a year is taken as 365.
 The debtor’s turnover ratio or the average collection period should be compared
with the period of credit allowed to judge the efficiency of the collection department. As
a rule of thumb, the average collection period should no exceed 11/2 times the credit
period.
Sources of working capital:
Out of the total current requirement of funds some portion of current funds is more
of permanent nature and its refers to fixed working capital. Balance portion of funds
cyclical and its refers to variable working capital. Every industrial enterprise as to
maintaining a minimum stock of raw material, work-in-progress, finished goods. Loose
tools and spare parts. It always requires money for the payment of wages and salaries
throughout the year. Funds require for these is known as fixed or permanent working
capital. Depending upon the size and volume of the business, additional working capital
is required for buying materials and for meeting the current operational expenses. This is
the variable part of the working capital.
Sources of regular working capital
Issue of share:
Rising of funds by issue of shares has certain distinct edges over others sources,
especially borrowed capital. Once procure it is not refundable except in cash of
liquidation and does not create any changes on the assets of the company .so it is
advantages for affirm to finance its fixed working capital out of proceeds of the issuing of
shares.
Issue of debenture or long term borrowing
Debentures are fixed interest-bearing securities, besides being redeemable at the
option of the company. The entire surplus after payment of debentures interest goes to the
credit of equity shareholders either in the form of interest goes to the credit of equity
shareholders either in the form of increased rates of dividend or in the form of increased
relation.
Retention
Retention in the form of general reserve and or credit balance of profit and loss
account may also be used to finance fixed working capital
Sources of seasonal or variable working capital:For firms, which are in seasonal
character in their business a large amount of working capital, is required for holding
inventory in peak period. But as soon as peak period is over, their working capital
becomes idle. So such firms may not prefer to finance working capital from long-term
sources. They may find it convenient to meet working capital from short-term sources
may find it convenient to meet their working capital from short-term sources as follows
Cash Credit
This represent the over draft facilities as the hypothecation of inventories and bad
debts. The cash credit system is unique to the Indian banking system. Such as flexible
system of bank finance is nowhere in the world.
Discount of bills
Banks discount the bills raised on the buyers of companies’ goods. This facility
helps in realizing funds without wasting for the credit period to get over.
Bank guarantees
A Banks Issues specific guarantee to facilities business transaction between
various parts is, including government agencies.
Determination of Working capital

The factors, which usually influence working capital needs in manufacturing

undertaking, cover

1. The nature of and size of business.

2. Manufacturing process, technology and facilities.

3. Competitive forces.

4. Speed of operating cycle.

 5. Growth and expansion activities

6. Credit terms

7. Dividend policy

8. Production policy

9. Attitude towards policy

10. Inventory procedures, depreciation policy, business cycle management attitude

etc.

11. Infrastructure the abysmal economic and physical infrastructure in India also
effects to working capital needs adversely prolonging the operating cycle

Working capital management is an integral part of overall corporate management.

The effective management of working capital like other areas of management requires a
clear statement of goals to be pursed and responsibility to be allocated. Cash
management and short-term loans along with the level of debtors are the responsibility
of financial executives. Inventory and credit control are managed in the other
departments these division of responsibilities makes a coordinate approach to working
capital management.
Profitability and liquidity are the twin objectives of working capital management.
Profitability and liquidity frequently conflict with each other. Attempts to procedure
maximum profitability and out of various elements of working capital do create severe
liquidity problems. At the same time, over concentration on liquidity does dilute profits.
Management of working capital establish the best possible credit off between the
profitability of net current assets employed and the ability to pay current liabilities as
there fall due. Working capital management includes
1. Cash management
2. Receivable management
3. Inventory management
 DATA ANALYSIS

CHANGES IN WORKING CAPITAL POSITION IN SIVA STONE INC FOR

THE YEAR 2012-2014

Working Capital Management

Year WC
Particulars 2012(Rs. In 2014(Rs. In Increase (Rs. Decrease (Rs.
Lakhs) Lakhs) Inlakhs) In Lakhs)
A. Current Assets
1. Inventory 1224.84 1125.61 - 99.23
2. Cash & Bank Balances 439.13 357.17 - 81.96
3. Receivables 835.75 713.75 - 122.00
4. Subsidiary Receivables - -
Loans & Advances
1. Advances to Employees 13.21 12.06 - 1.15
2. Advances for Purchases 67.09 107.85 40.76 -
3. Prepaid Expenses 10.81 18.13 7.32 -
Total Current Assets 2590.83 2334.57
B. Current Liabilities
1. For Milk Purchases 307.56 374.68 67.12
2. For Expenses 705.43 555.29 150.14
Sundry Creditors
a. Sundry Creditors 284.78 272.22 12.56 -
b. Security Deposits 142.26 167.04 - 24.78
Total Current Liabilities 1440.03 1369.23
Networking Capital 1150.80 965.3
Increase / Decrease Working Capital 185.46 185.46
1150.80 1150.80 396.24 396.24
INTERPRETATION:
During 2012-13 the Networking Capital of the company decreased by 185.46 Lakhs. This
is mainly due to increase in Current Liabilities for company Purchases and Sundry Creditors.
 CHANGES IN WORKING CAPITAL POSITION IN SIVA STONE INC FOR THE
YEAR 2014-2015

Working Capital Management

Year WC
Particulars 2014 (Rs. In 2015(Rs. In Increase (Rs.In Decrease (Rs.
Lakhs) Lakhs) lakhs) In Lakhs)
A. Current Assets
1. Inventory 1125.61 1060.57 - 65.04
2. Cash & Bank Balances 357.17 543.33 186.16 -
3. Receivables 713.75 701.41 - 12.34
4. Subsidiary Receivables - - - -
Loans & Advances
1. Advances to Employees 12.06 16.78 4.72 -
2. Advances for Purchases 107.85 60.68 - 47.17
3. Prepaid Expenses 18.13 12.78 5.35

Total Current Assets 2334.57 2395.55

B. Current Liabilities
1. For Milk Purchases 374.68 405.93 31.25
2. For Expenses 555.29 610.46 - 55.17
Sundry Creditors
a. Sundry Creditors 272.22 222.02 50.20 -
b. Security Deposits 167.04 216.59 - 49.55

Total Current Liabilities 1369.23 1455.00

Networking Capital 965.3 940.55
Increase / Decrease Working Capital 24.79 24.79

965.34 965.34 265.87 265.87

INTERPRETATION: During 2014-15 the Networking Capital of the company decreased by
24.79 Lakhs. This is mainly due to the Increase in Current Liabilities more than Current Assets
for company purchases and Sundry Creditors.
 CHANGES IN WORKING CAPITAL POSITION IN SIVA STONE INC FOR THE
YEAR 2015-2016

Working Capital Management

Year WC
Particulars 2015 (Rs. In 2016(Rs. In Increase (Rs. Decrease (Rs.
Lakhs) Lakhs) In lakhs) In Lakhs)

A. Current Assets
1. Inventory 1060.57 1442.27 381.70 -
2. Cash & Bank Balances 543.33 578.46 35.13 -
3. Receivables 701.41 697.09 - 4.32
4. Subsidiary Receivables - - - -
Loans & Advances
1. Advances to Employees 16.78 11.01 5.77
2. Advances for Purchases 60.68 48.23 12.45
3. Prepaid Expenses 12.78 10.64 2.14
Total Current Assets 2395.55 2787.70
B. Current Liabilities
1. For Milk Purchases 405.93 460.62 54.69
2. For Expenses 610.46 809.65 199.19
Sundry Creditors
a. Sundry Creditors 222.02 313.57 91.55
b. Security Deposits 216.59 233.49 16.90
Total Current Liabilities 1455.00 1817.33
Networking Capital 940.55 9970.37
Increase / Decrease Working Capital 29.82 29.82
970.37 970.37 416.83 416.83
INTERPRETATION: During 2015-16 the Networking Capital of the company increased by
29.82 Lakhs. This is mainly due to the Investment in Current Assets in 2016-17.
 CHANGES IN WORKING CAPITAL POSITION IN SIVA STONE INC FOR THE
YEAR 2016-2017

Working Capital Management

Year WC
Particulars 2016 (Rs. In 2017 (Rs. In Increase (Rs. Decrease (Rs.
Lakhs) Lakhs) In lakhs) In Lakhs)
A. Current Assets
1. Inventory 1442.27 1297.30 - 144.97
2. Cash & Bank Balances 578.46 1165.82 587.36 -
3. Receivables 687.09 442.00 - 255.09
4. Subsidiary Receivables - - - -
Loans & Advances
1. Advances to Employees 11.01 8.82 2.19
2. Advances for Purchases 48.23 41.38 - 6.85
3. Prepaid Expenses 10.64 14.08 3.44 -
Total Current Assets 2787.70 2969.40
B. Current Liabilities
1. For Milk Purchases 460.62 439.43 21.19 -
2. For Expenses 809.65 828.08 - 18.43
Sundry Creditors
a. Sundry Creditors 313.57 251.38 62.19 -
b. Security Deposits 233.49 271.01 - 37.52
Total Current Liabilities 1817.33 1789.90
Networking Capital 970.37 1179.5
Increase / Decrease Working Capital 209.13 209.13
1179.5 1179.5 674.18 674.18
INTERPRETATION:
During 2016-17 the Networking Capital of the company increased by 209.13 Lakhs. This
is mainly due to increase in Current Assets and Decrease in Current Liabilities.
 CHANGES IN WORKING CAPITAL POSITION IN SIVA STONE INC FOR THE
YEAR 2017-2018

Working Capital Management

Year WC
Particulars 2017 2018 Increase Decrease (Rs.
Rs. In Lakhs) (Rs. InLakhs) (Rs.In lakhs) In Lakhs)
A. Current Assets
1. Inventory 1297.30 1536.24 238.94 -
2. Cash & Bank Balances 1165.82 1427.11 261.29 -
3. Receivables 442.00 399.00 - 43
4. Subsidiary Receivables - - -
Loans & Advances
1. Advances to Employees 8.82 6.31 2.51
2. Advances for Purchases 41.38 80.32 38.94 -
3. Prepaid Expenses 14.08 14.19 0.11 -
Total Current Assets 2969.40 3463.17
B. Current Liabilities
1. For Milk Purchases 439.43 480.24 - 40.01
2. For Expenses 828.08 813.11 14.97
Sundry Creditors
a. Sundry Creditors 251.38 403.02 151.64
b. Security Deposits 271.01 286.84 - 15.83
Total Current Liabilities 1789.90 1983.21
Networking Capital 1179.5 1479.96
Increase / Decrease Working Capital 300.46 300.46
1479.96 1479.96 554.25 554.25
INTERPRETATION:
During 2017-18 the Networking Capital of the Siva stone Inc increased by 300.46 Lakhs.
This is mainly due to Investment in Current Assets.
 Net working capital of Siva stone Inc during
the period 2012-2014 to 2017-2018
(All amounts are in thousands)
Year Current Growth Current Growth Net W.C Growth of
Assets Rate (%) Liabilities Rate (%) W.C (%)

2012-13 1500977 100 862668 100 638301 100

2014-15 1688733 112.5 1029208 119 659525 103

2015-16 2307604 153.74 1155154 134 1152450 180

2016-17 2150110 143.24 1359165 157 790945 123

2017-18 2017272 133.99 1470284 170 540988 84

Net working capital

200
180
160
140
120
RATIO

100
80
60
40
20
0
YEAR
 WORKING CAPITAL TURNOVER RATIO
(All amounts are in thousands)

Year
Sales Networking Capital Ratio

2012-13 4225506 1152450 3.69

2014-15 2648791 638309 4.15

2015-16 3423153 659525 5.15

2016-17 3901375 790945 4.93

2017-18 4748354 540988 8.77

WORKING CAPITAL TURNOVER RATIO

10

6
RATIO

0
YEAR
Turnover Ratio:

Debtors Turnover Ratio expresses the relationship between debtors and sales. A
high Debtors Turnover Ratio or low Debt collection period is indicative of sound credit
management policy.

Table shows Debtors Turnover Ratio of HPT during the period 2012-2014 to 2017-
2018 (All amounts are in thousands)

Year Net Credit Sales Avg. Debt Ratio

2012-13 2648791 567931 4.67

2014-15 3043448 682289 4.46

2015-16 3925325 612590 6.24

2016-17 3614471 442498 8.17

2017-18 4417677 47842 9.34

Turnover Ratio
10
9
8
7
6
RATIO

5
4
3
2
1
0
YEAR
Debtors Turnover Ratio

Current Ratio:

It is the ratio of the current assets current liabilities this ratio is used to know the
company’s ability to meet its current obligations. The standard norm for the current ratio.

Current ratio = current Assets / Current liabilities.

Table showing current ratio of HPT during the period 2012-2014 to 2017 -2018

(All amounts are in thousands)

Year Current Assets Current Liabilities Ratio

2012-13 1500977 862668 1.74

2014-15 1688733 1029208 1.64

2015-16 2307604 1155154 1.99

2016-17 2150110 1359165 1.54

2017-18 2015547 1427828 1.40

Ratio
2.5

1.5
RATIO

0.5

0
YEAR
Quick Ratio:

Quick ratio is relation between quick assets and current liabilities. The term quick
assets, which can be converted into cash with a short notice. This category also includes
cash bank balances short – term investments and receivables.

Quick ratio = Quick Assets / current liabilities

Table showing quick ratio of TRIPL during the period 2012 - 2014 to 2017 – 2018

(All amounts are in thousands)

Year Current Assets Current Liabilities Ratio

2012-13 870459 862668 1.01

2014-15 923353 1029208 0.89

2015-16 1056852 1155154 0.91

2016-17 1005863 1359165 0.74

2017-18 1082902 1427828 0.76

Quick Ratio
1.2

0.8
RATIO

0.6

0.4

0.2

0
YEAR
Composition of current Assets

(All the amounts are in thousands)

Particulars 2012-13 2014-15 2015-16 2016-17 2017-18 Avg.

630518 765380 1250752 1144247 926645 48.16
Inventory (42%) (45.32%) (54.2%) (53.41%) (46.07%)
Sundry 708107 656472 568707 316288 523360 30.17
Debtors (47.17%) (38.87%) (24.64%) (14.71%) (23.02%)
Cash and Bank 56675 35502 25034 58827 17636 4.11
(3.77%) (2.1%) (1.08%) (2.74%) (2.74%)
Loans & 105677 29032 93380 192467 204545 6.38
Advances (7.04%) (1.71%) (4.04%) (8.95%) (10.62%)
Other current -- 202347 369731 438281 339086 12.94
Assets
Total 1500977 1688744 2307604 2150110 2017272
(100%) (100%) (100%) (100%) (100%)

Avg.
60
50
40
Avg.

30
20
10
0
Inventory Sundry Cash and Loans & Other
Debtors Bank Advances current
Assets
Particulars
 FINDINGS

1. The SIVA STONE INC net working capital is satisfactory between the years 2012- 2018
since it shows increasing trend ; but after that it is in declining position

2. The current ratio of SIVA STONE INC is satisfactory during the period of study 2015–
2016 to 2017-2018. It is increased from 1.74 to 1.99 but after that it is declining.

3. The average quick ratio of SIVA STONE INC is not good though the quick ratio is
showing maximum value of 0.91 in the year 2017-18 and then it is declining to be deal

4. Fixed assets turnover ratio of SIVA STONE INC increased from .84 times to 1.95. The
company has to maintain this.

5. Total Assets turnover ratio of SIVA STONE INC is not satisfactory because it is always
below one, except in the year 2016 – 2017 having a value of 1.03

6. The SIVA STONE INC Net Profit Ratio is showing negative profit in the year 2014 –
2015. These event is an expected one because since from the previous two years it is
showing the decline stage in Net Profit Ratio

7. The SIVA STONE INC Gross Profit Margin of SIVA STONE INC increases in
decreases.

8. Profit Margin of SIVA STONE INC is decreasing and showing negative profit because
there is increase in the price of copper.

9. The SIVA STONE INC Net Working Capital Ratio is satisfactory.

10. The total Debt ratio is increased from 0.14 to 0.59 during the years 2012 to 2018. This
means the company is borrowing money from the Siva stone Inc well.

11. The SIVA STONE INC return on Total Assets ratio shows a negative sign in the year
2017 – 2018
 SUGGESTIONS

1. The Siva stone Inc has to follow the asset allocation approach to Siva stone Inc
working capital utilization. Which means the investment made in different types of
assets have to be directly related to the different sources from which working
capital are derived by the Siva stone Inc.

2. Thus fundamental criteria which must be followed in allocation working capital

for acquiring different types of assets, is that the velocity turnover rate of different
sources of supply of working capital determines the appropriate maturity of the
assets acquiring through fund utilization. For instance where relatively stable
working capital paid up capital long term borrowings could be used to buy long
dated high yield giving securities.

3. Demand deposits which are most volatile could be used to acquire relatively liquid
assets (or) money at call & short notice on which little to return minimum.

4. The Siva stone Inc raised its working capital from many sources like long term
deposits, long term borrowings & through capital. But these sources are not
deployed to the required extent.

5. Some times more working capital was kept in stocks in the forms of other assets.
The working capital has to be invested in investments to get adequate returns
otherwise those idle assets earn nothing.

6. Liquidity of the assets is most concerned aspect to the Siva stone Inc because they
should be in a position to repay all its demand deposits at anytime. So it has to
maintain total liquidity regardless of the purpose of net ratio. The Siva stone Inc
should improve its liquidity position.

7. Maintaining new types of deposits should be reach to the present &future

customers through different channels.
 CONCLUSIONS

1. Improve position working capital should be utilized properly.

2. Better Awareness to increases the sales is suggested.

3. Cost cut down mechanics can be employed.

4. Better production technique can be employed.

5. Siva stone Inc maintains sufficient level of working capital during the study
period but there is a decrease during the years 2012-2014

6. Siva stone Inc is maintaining adequate level of balances with other Siva stone
Inc.

7. The term deposits of the Siva stone Inc are also good but the Siva stone Inc has
to mobilize more fixed deposits.

8. Changes in education loan has to be similar to government Siva stone Inc by

this we can motivate more members.

9. Loans in constructing of building are more and in gold loans also. They have to
Increase in the giving loan to small industrial business.
 BIBLIOGRAPHY
Books
Financial Management Written By R.M.Srivastava

Financial Management Written By Prasanna Chandra

Financial Management Written By I. M. Pandey

Financial Management Written By S. N. Maheswari

Management accounting Written By R.K.Sharma, Shashi. K.Guptha

Web site:

www.google.com

www.scridb.com