A REPORT

ON

STUDY OF WORKING CAPITAL MANAGEMENT

At

VANTEX PAINTS PVT. LTD.

                                   By:

Shivangi

B.COM­ V Semester

Roll no. 14580

ID:WBBM 17268

Report submitted in partial fulfilment for the degree of 

Bachelor of Commerce/ Bachelor of Business Administration

FMS­WISDOM

Banasthali Vidyapith

2019

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2
                                                                         

               DECLARATION

This thesis is a presentation of my original research work. Wherever contributions of others are involved, every effort is 

made to indicate this clearly, with due reference to the literature, and acknowledgement of collaborative research and 

discussions. The work was done under the guidance of Mr.Vipin Kumar at the Ventax Pvt.ltd. New Delhi.                        

                                                             Name: Shivangi

   

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 ACKNOWLEDGEMENT
Words are indeed inadequate to convey my deep sense of gratitude to all those who have helped me in
completing this summer project to the best of my ability. Being a part of this project has certainly been a
unique and a very productive experience on my part.

I am really thankful to Mr. Amitabh Gupta (Director commercial) & Mr. Arun Sharma (Account
Manager) for making all kinds of arrangements to carry the project successfully and for guiding and helping
me to solve all kinds of quarries regarding the project work. His systematic way of working and incomparable
guidance has inspired the pace of the project to a great extent.

I would also like to thank my mentor and project–coordinator Dr. Nishtha pareek for assigning me a project
of such a great learning experience and acquainting me with real life project financing and appraisal.

I am very grateful to Mr. Vipin Kumar and very thankful for their useful guidance and advice.

Last but not least I would like to thank all the employees of Vantex Paints pvt ltd. who have directly or
indirectly helped me with their moral support for the completion of my project.
 EXECUTIVE SUMMARY

INTRODUCTION OF THE COMPANY

Vantex Paints Pvt. Ltd., are a professionally managed firm, working as a reliable manufacturer and supplier of Industrial
Paints, Enamel and other allied products.
The ultra-modern machines and technology are utilized in the production of the range. Besides, the ingredients used for
composition are directly sourced from the profound vendors. Our paints and enamel apply to many products to make
them resistant to oil, corrosion, grease, water, dust and acid. Further, to match up the set standard of the market, our
range is offered to customers in international quality grade.

INTRODUCTION OF THE TOPIC

“Working capital means the part of the total assets of the business that change from one form to
another form in the ordinary course of business operations.”

In an excellent world, there would be no necessity for current assets and liabilities as a result of there would be no
uncertainty, no dealings prices, info search prices, programming prices, or production and technology constraints. The
cost of production wouldn't vary with the amount created. Borrowing and disposal rates shall be same. Capital, labour,
and products market shall be absolutely competitive and would replicate all offered info, therefore in such associate
degree setting, there would be no advantage for investment in short term assets.

RESEARCH METHODOLOGY

The study concentrates on the main components of working capital like inventory management, accounts receivable
management and cash management of Public Enterprises. The tools used in this study includes ratio analysis, trend
analysis and percentage method.

DATA ANALYSIS

We analysed  various components of working capital as below:

1. Inventory analysis

2. Sundry debtor analysis

3. Cash and bank analysis

4. Loans and advances analysis

5. Current liabilities analysis

6. Provisions analysis
 7. Different ratios

We used primary and secondary data both to analyse these components and ratios.

CONCLUSION

After completing my project on working capital management in Vantex Paints, I can say that now I
understand working capital much better and in a practical way. This project helped me in understanding
the daily requirement in a manufacturing firm.

During my training period in Vantex Paints I am able to know the importance of working capital in any
company especially if the concern is a big one. It enables the company to have regular supply of raw material,
regular payment of salary and wages, exploit the favorable market conditions, have the ability to face crisis and
also make the good image of the company. In Vantex Paints the working capital requirements are very high as
production is continuous in the concern.

INDEX

S.NO TABLE OF CONTENTS PAGE NO.

1. CERTIFICATE 2
2. DECLARATION 3
3. ACKNOWLEDGEMENT 4
4. EXECUTIVE SUMMARY 5-6
5. INDEX 7
6. COMPANY INTRODUCTION 8-10
7. TOPIC INTRODUCTION 10-24
8. OBJECTIVES & OBLIGATIONS 25
9. SWOT ANALYSIS 26
10. RESEARCH METHODOLOGY 27-28
11. DATA INTERPRETATION 29-65
12. CONCLUSION 66
13. MAJOR FINDINGS 67-69
14. BIBLIOGRAPHY 70
 COMPANY INTRODUCTION

Vantex Paints Pvt. Ltd., are a professionally managed firm, working as a reliable manufacturer and supplier of Industrial
Paints, Enamel and other allied products. The ultra-modern machines and technology are utilized in the production of the
range. Besides, the ingredients used for composition are directly sourced from the profound vendors.Our paints and
enamel apply to many products to make them resistant to oil, corrosion, grease, water, dust and acid. Further, to match up
the set standard of the market,our range is offered to customers in international quality grade.

Original Equipment Manufacturer: Yes

Standard Certifications: ISO 9001:2008

Bankers: State Bank Of India

Year of Establishment: 2002

Production Type: Automatic Semi-Automatic

Business Type: Manufacturer And Supplier

Product range :

Paints Emulsion Coating Primers & Others

Repellent

Automotive Paint Exterior Emulsion Epoxy Coatings Synthetic Enamel Gloss Enamel
Primers

Lead Free Paints Paint With Silicone Texture Coating Synthetic Primers Wood Finishing
Emulsion

Epoxy Paint Paint Enamel High Performance Epoxy Primers Wall Putty
Coating

Adhesive Interior Emulsion Polyurethane Rain Guard Silicon Rainsol Waterborne

Decorative Paints Coatings Based Repellent

Synthetic Enamel Low Super Acrylic Water Based Acrylic Plaster

 Paints Emulsion Repellent

Exterior Paints Melamine

Industrial Paints S. Sealer

Epoxy Finish Paint

Interior Paints

Plastic Paint

Heat Resistant Paint

Finish Paint

Heat Resistant
Aluminum Paint

Fast Drying
Automotive Paint &
N.C. Paint

Texture Paint

Aluminum Paint

WORKING CAPITAL MANAGEMENT

“Working capital means the part of the total assets of the business that change from one form to another
form in the ordinary course of business operations.”

In an excellent world, there would be no necessity for current assets and liabilities as a result of there would be no
uncertainty, no dealings prices, info search prices, programming prices, or production and technology constraints. The
cost of production wouldn't vary with the amount created. Borrowing and disposal rates shall be same. Capital, labour,
and products market shall be absolutely competitive and would replicate all offered info, therefore in such associate
degree setting, there would be no advantage for investment in short term assets.

However the globe we have a tendency to live isn't excellent. it's characterised by considerable quantity of uncertainty
concerning the demand, market value, quality and convenience of own merchandise and people of suppliers. There are
dealings prices for buying or marketing merchandise or securities. info is dear to get and isn't equally distributed. There
are spreads between the borrowings and disposal rates for investments and financing of equal risks. equally every
organization is Janus-faced with its own limits on the assembly capability and technologies it will use there are fastened
further as variable prices related to production merchandise. In different words, the markets within which real firm
operated aren't absolutely competitive.

These planet circumstances introduce problems that need the requirement of maintaining capital. for instance, a
corporation could also be Janus-faced with associate degree uncertainty concerning convenience of comfortable amount
of crucial imputes in future at cheap worth. this could necessitate the holding of inventory, current assets. equally a
corporation could also be Janus-faced with associate degree uncertainty concerning {the level|the extent|the quantity} of
its future cash flows and insufficient amount of money could incur substantial prices. this could necessitate the holding
of reserve of short term marketable securities, once more a brief term capital plus. In company monetary management,
the term capital management” (net) represents the surplus of current assets over current liabilities.
Concept of working capital:-
The word capital is created of 2 words Working and a pair of Capital
The word operating suggests that day to day operation of the business, whereas the word capital suggests that price of all
assets of the business.
Working capital:
Working capital could also be considered the lifeblood of business. capital is of major importance to internal and external
analysis owing to its close relationship with the present day-after-day operations of a business. each business wants funds
for 2 functions:
● Long run funds are needed to make production facilities through purchase of fastened assets like plants,
machineries, lands, buildings & etc
● Short term funds are needed for the acquisition of raw materials, payment of wages, and different day-after-day
expenses.t's otherwise referred to as revolving or current capital
It is nothing however the distinction between current assets and current liabilities. i.e. capital = Current assets – Current
Liability.
Businesses use capital for construction, renovation, furniture, software, equipment, or machinery. it's conjointly
unremarkably accustomed purchase inventory, or to form payroll. Capital is additionally usually used by businesses to
place a payment down on a chunk of business property. capital is crucial for any business to succeed. it's changing into
additional} necessary to possess access to more capital after we would like it.
In straightforward words capital is that the far more than current Assets over current liabilities. capital has commonly
been outlined because the far more than current assets over current liabilities. capital is that the heart of the business. If
it's weak business cannot correct and survives. Sit is so aforesaid the fate of enormous scale investment in fastened assets
is commonly determined by a comparatively touch of current assets. because the capital is vital to the corporate is
important to stay adequate working capital with the company. money is that the lifeline of company. If this lifeline
deteriorates therefore will the company’s ability to fund operation, reinvest do meet capital requirements and payment.
Understanding Company’s income health is crucial to creating investment call. an honest thanks to decide a company’s
income prospects is to appear at its capital management. the corporate should have adequate capital the maximum
amount PRN by the company. It ought to neither be excessive or nor inadequate. Excessive capital cuisses for idle funds
birthing with the firm while not earning any profit, wherever as inadequate capital shows the corporate doesn’t have
comfortable funds for finance its daily wants working capital management involves study of the connection between
firm’s current assets and current liabilities. The goal of capital management is to make sure that a firm is in a position to
continue its operation. which has comfortable ability to satisfy each maturing short-term debt and upcoming operational
expenses. the higher an organization managers its capital, the less the corporate has to borrow. Even corporations with
money surpluses got to manage capital to make sure those surpluses are endowed in ways in which can generate
appropriate returns for investors.

Concept of capital
Gross capital = Total of Current plus
web capital = far more than Current plus over Current Liability
Current Assets Current Liabilities
• Take advantage hand / at bank
• Bills due
• Sundry Debtors
• Short term loans
• Investors/ stock
• Temporary investment
• Postpaid expenses
• Increased incomes
• Bills collectible
• Sundry Creditors
• Outstanding expenses
• Increased expenses
• Bank Over draft
Determinants of capital
Working capital necessities of a priority depends on variety of things, every of that ought to be thought of rigorously for
determinative the right quantity of capital. it should be but be adscititious that these factors have an effect on otherwise to
the various units and these keeps variable from time to time. In general, the determinants of capital that re common to all
or any organization’s may be summarized as under:
Nature of Business
Need for capital is very depends on what variety of business, the firm in. there are commercialism companies, that has to
invest a great deal in stocks, ills assets, liquid money etc. public utilities like railways, electricity, etc., would like a lot of
less inventories and money. producing issues stands in between these 2 extends. capital demand for producing issues
depends on varied factors just like the merchandise, technologies, selling policies.

Production policies
Production policies of the organization affects capital necessities terribly extremely. seasonal industries, that produces
solely in specific season needs a lot of capital . some industries that produces around the year however sale principally
wiped out some special seasons are got to keep a lot of capital.
Size of Business
Size of business is another issue to determines the requirement for capital
Length of in operation cycle
Operating cycle of the firm conjointly influence the capital. longer the operating cycle, the upper are the capital demand
of the organization.
Credit policy
Companies; follows liberal credit policy has to keep a lot of capital with them. potency of debt collection machinery is
additionally relevant during this matter. Credit convenience type suppliers conjointly affects the company’s capital
necessities. an organization doesn’t relish a liberal credit from its suppliers can need to keep a lot of capital Business
fluctuation Cyclical changes within the economy conjointly influence the extent of capital. throughout boom amount, the
tendency of management is to collect inventories of raw materials and finished merchandise to avail the advantage of
rising prove. This creates a demand for a lot of capital. Similarly, throughout depression once the costs and demand for
factory-made merchandise. perpetually cut back the economic and commercialism activities show a downward termed.
therefore the demand for capital is low.

Current plus policies

The quantum of capital of an organization is considerably determined by its current assets. Policies. an organization with
conservative assets policy could operate with comparatively high level of capital than its sales volume. an organization
following associate degree aggressive quantity assets policy operates with a comparatively lower level of capital.

Fluctuations of provide and seasonal differences

Some corporations got to keep a great deal of capital thanks to their irregular sales and intermittent provide. equally
corporations victimisation large materials conjointly maintain massive reserves’ of stuff inventories. This increase the
requirement of capital . some corporations manufacture and sell merchandise solely throughout bound seasons. capital
necessities of such industries are higher throughout bound season of such industries amount.
Other factors
Effective coordination between production and distribution will cut back the requirement for capital . transportation and
communication suggests that. If developed helps to cut back the capital requirement.
Working capital in terms of 5 components:
1. Money and equivalents: - This most liquid type of capital needs constant oversight. an honest money budgeting and
statement system provides answers to key queries such as: is that the cash level adequate to meet current expenses as
they are available due? what's the temporal arrangement relationship between cash influx and outflow? once will peak
cash wants occur? once and the way a lot of bank borrowing are required to satisfy any cash shortfalls? once will
compensation be expected and can the income cowl it?
2. Accounts receivable: - several businesses extend credit to their customers. If you do, is that the quantity of assets
cheap relative to sales? however apace are assets being
collected? that customers are slow to pay and what ought to be done concerning them?
3. Inventory: - Inventory is commonly the maximum amount as fifty p.c of a firm's current assets, therefore naturally it
needs continual scrutiny.
Is that the inventory level cheap compared with sales and also the nature of your business?
What's the speed of inventory turnover compared with different corporations in your variety of business?
4. Accounts payable:- finance by suppliers is common in tiny business; it's one among the key sources of funds for
entrepreneurs. is that the quantity of cash owed suppliers cheap relative to what you purchase? what's your firm's
payment policy doing to reinforce or cut back from your credit rating?
5. Increased expenses and taxes payable: - These are obligations of your company at any given time and represent a
future outflow of money.
Two completely different ideas of capital are:-
● record or ancient thought
● in operation cycle thought.
Balance sheet or ancient concept:- It shows the position of the firm at bound purpose of your time. it's calculated within
the basis of record ready at a selected date. during this technique there are 2 variety of operating capital:-

● Gross capital
● Web capital

Gross operating capital:- It refers to the firm’s investment in current assets. The addition of the present assets is that the
capital of the business. The add of the present assets could be a quantitative side of capital. that emphasizes a lot of on
amount than its quality, however it fails to reveal truth monetary position of the firm as a result of each increase in
current liabilities can decrease the gross capital
Net operating capital:- it's the distinction between current assets and current liabilities or the surplus of total current
assets over total current liabilities
Working capital= current assets - current liabilities
Net operating capital: - it's can also outlined as that a part of a firm’s current assets that is supported with long run
funds. it should be either positive or negative. once the present assets exceed the current liability, the capital is positive
and contrariwise.
Operating cycle concept:- The period or time needed to finish the sequence of events right from purchase of stuff for
money to the belief of sales in cash is termed the in operation cycle or capital cycle.
Types of Working Capital:-

TYPES OF
WORKING
CAPITAL

ON THE BASIS ON THE BASIS

OF B/S OF TIME
CONCEPT

GROSS NET WORKING REGULAR TEMPORARY

WORKING CAPITAL WORKING WORKING
CAPITAL CAPITAL CAPITAL

SEASONAL
WORKING
CAPITAL

SPECIFIC
WORKING
CAPITAL
Kinds of working capital

Working capital can be put in two categories:

1) fixed or permanent working capital and
2) fluctuating or temporary working capital

Fixed or permanent working capital

The volume of investment in current assets and change over a period of time. But always there is
minimum level of current assets that must be kept in order to carry on the business. This is the
irreducible minimum amount needed for maintaining the operating cycle. It is the investment in
current assets. This is permanently locked up in the business and therefore known as permanent
working capital.

Variable/temporary working capital

It is the volume of working capital. This is needed over and above the fixed working capital in
order to meet the unforced market changes and contingencies. In other words any amount over
and about the permanent level of working capital is variable or fluctuating working capital . this
type of working capital is generally financed from shorter source of finance such as bank credit
because this amount is not permanently required and is usually paid back during the off season or
after the contingency.
Sources of working capital
The company can choose to finance its current assets
Long term sources
Short term sources
A combination of them. Long term sources of permanent working capital include equity and
preference shares, retained earnings, debentures and other long term debts from public deposits
and financial institution. The long term working capital needs should meet through long term
means of financing. Financing through long term means provides stability, reduces risk or
payment. And increases liquidity of the business concern. Various types of long term sources of
working capital are summarized as follows

Issue of shares
It is the primary and most important sources of regular or permanent working capital. Issuing
equity shares as it does not create and burden on the income of the concern. Nor the concern is
obliged to refund capital should preferably raise permanent working capital.
Retained earnings
Retained earnings accumulated profits are a permanent sources of regular working capital. It is
regular and cheapest. It creates not charge on future profits of the enterprises.

Issue of debentures
It creates a fixed charge on future earnings of the company. Company is obliged to pay interest.
Management should make wise choice in procuring funds by issue of debentures.

Long term debt

Company can raise fund from accepting public deposits, debts from financial institutions like
banks, corporations etc. the cost is higher than the other financial tools.
Other sources sale of idle fixed assets, securities received from employees and customers are
examples of other sources of finance.

Short term sources of temporary working capital

Temporary working capital is required to meet the day to day business expenditures. The variable
working capital would finance from short term sources of funds. And only the period needed. it
has the benefits of, low cost and establishes closer relationships with banker.

Some sources of temporary working capital are given below;

Commercial bank
A commercial bank constitutes a significant sources for short term or temporary working capital
this will be in the form of short term loans, cash credit, and overdraft and though discounting the
bills of exchanges.

Public deposits
Most of the companies in recent years depends on this source to meet their short term working
capital requirements ranging from six month to three years.

Various credits
Trade credit, business credit papers and customer credit are other sources of short term working
capital. Credit from suppliers, advances from customers, bills of exchange, promise notes, etc
helps to raise temporary working capital

Reserves and other funds

Various funds of the company like depreciation fund. Provision for tax and other provisions kept
with the company can be used as temporary working capital.

The company should meet its working capital needs through both long term and short term funds.
It will be appropriate to meet at least 2/3 of the permanent working capital equipments form long
term sources, whereas the variables working capital should be financed from short term sources.
The working capital financing mix should be designed in such a way that the overall cost of
working capital is the lowest, and the funds are available on time and for the period they are
really required.
SOURCES OF ADDITIONAL WORKING CAPITAL

Sources of additional working capital include the following

Existing cash reserves
Profits (when you secure it as cash)
Payables (credit from suppliers)
New equity or loans from shareholder
Bank overdrafts line of credit
Long term loans

If you have insufficient working capital and try to increase sales, you can easily over stretch the
financial resources of the business. This is called overtrading. Early warning signs include
Pressure on existing cash Exceptional cash generating activities. Offering high discounts for
clear cash payment Bank overdraft exceeds authorized limit Seeking greater overdrafts or lines
of credit Part paying suppliers or there creditor. Management pre occupation with surviving
rather than managing.
 SIGNIFICANCE OF WORKING CAPITAL:-

PAYMEN
T
TO
SUPPLIE
EASY RS DIVIDEN
LOAN D
FROM DISTRIBU
BANKS TI- ON
SIGNIFICA
N-
-CE OF
WORKING
CAPITAL
INCREA
INCREASE
SE
EFFECIEN DEBT
C-Y CAPACI
TY
INCREASE
IN
FIX
ASSETS
The prime objective of the company is to obtain maximum profit thought the business. The
amount of profit largely depends upon the magnitude of sales. However the sale does not convert
into cash instantaneously. There is always a time gap between sale of goods and receipt of cash.
The time gap between the sales and their actual realization in cash is technically termed as
operating cycle. Additional capital required to have uninterrupted business operations, and the
amount will be locked up in the current assets. Regular availability of adequate working capital is
inevitable for sustained business operation. If the proper fund is not provided for the purpose, the
business operations will be effected. And hence this part of finance to be managed well.
 Factors requiring consideration while estimating working capital.

1. The average credit period expected to be allowed by suppliers.

2. Total costs incurred on material, wages.
3. The length of time for which raw material are to remain in stores before they are issued for
production.
4. The length of the production cycle (or) work in process.
5. The length of sales cycle during which finished goods are to be kept waiting for sales.
6. The average period of credit allowed to customers
7. The amount of cash required to make advance payment

Importance of Working Capital Ratios

Ratio analysis can be used by financial executives to check upon the efficiency with which
working capital is being used in the enterprise. The following are the important ratios to measure
the efficiency of working capital. The following, easily calculated, ratios are important measures
of working capital utilization.
 Formulae Re Interpretati
sul on
t

Stock Average Stock * =x On average, you turn over the value of your entire
Turnove 365/ days stock every x days. You may need to break this down
r (in Cost of Goods Sold into product groups for effective stock management.
days) Obsolete stock, slow moving lines will extend overall
stock turnover days. Faster production, fewer product
lines, just in time ordering will reduce average days.
Receivables Debtors * 365/ =x It takes you on average x days to collect monies due to
Ratio Sales days you. If your official credit terms are 45 day and it takes
(in days) you 65 days. One or more large or slow debts can drag
out the average days. Effective debtor management
will minimize the days.
Payable Creditors * 365/ Cost = x On average, you pay your suppliers every x days. If
s Ratio of Sales (or days you negotiate better credit terms this will increase. If
(in days) Purchases) you pay earlier, say, to get a discount this will decline.
If you simply defer paying your suppliers (without
agreement) this will also increase - but your reputation,
the quality of service and any flexibility provided by
your suppliers may
suffer.
Current Total Current =x Current Assets are assets that you can readily turn in
Ratio Assets/ times to cash or will do so within 12 months in the course of
Total Current business. Current Liabilities are amount you are due to
Liabilities pay within the coming 12 months. For example, 1.5
times means that you should be able to lay your
hands on
$1.50 for every $1.00 you owe. Less than 1 times
e.g.
0.75 means that you could have liquidity problems and
be under pressure to generate sufficient cash to meet
oncoming demands.
Quick Ratio (Total Current =x Similar to the Current Ratio but takes account of the
Assets - Inventory)/ times fact that it may take time to convert inventory into
Total Current cash.
Liabilities
Working (Inventory + As A high percentage means that working capital needs
Capital Receivables - % are high relative to your sales.
Ratio Payables)/ Sales
Sales
 OBJECTIVES & OBLIGATIONS
Objectives:
❖ To maximize utilization of the existing facilities in order to improve efficiency and
increase productivity.

❖ To work towards the achievement of self-sufficiency in the field of shakers market by

setting up adequate capacity and to build up expertise in lying of crude.

❖ To further enhance distribution network for providing assured service to customers

throughout the country through expansion of reseller network as per Marketing Plan/
Government approval.

Obligations:
❖ Towards Customers and Dealers: To provide prompt, courteous and efficient service
and quality products at fair and reasonable prices.
❖ Towards Suppliers: To ensure prompt dealings with integrity, impartiality and
courtesy and promote ancillary industries.
❖ Towards Employees: Develop their capability and advancement through appropriate
training and carrier planning.

❖ Towards Community: To develop techno-economically viable and environment

friendly products for the benefit of the people.
 SWOT ANALYSIS OF VENTAX PVT.LTD.

Strengths

1. Price of different range of product is more compatible than others.

2. Vantex Paints pioneered the manufacturing of electrodynamic vibration shakers in India.
3. Vantex Paint is innovative in nature they make changes in their product on time to time.
4. Vantex Paints is the world first company to manufacture the full range of vibration test
system and environmental test chamber’s under one roof.
Weaknesses
1. Limited market and tough competition
2. Continuous increase in labor cost.
3. The Shortage of skilled laborers.
4. Appreciation of rupees against foreign currencies.

Opportunities

1. Increase in the production and sell of cement at different plants have increased the turnover
of the company.
2. The modernization, productivity improvement and cost control measures will improve the
performance of the division in times to come.
3. Explore the new market in the rest of the world.
Threats
1. The numbers of players are increasing which further increases the competition.
2. Appreciation of rupees against foreign currencies affects the income of the company.
3. Appreciation of rupees against foreign currencies affects the income of the company.
 RESEARCH METHODOLOGY

OBJECTIVE OF THE RESARCH

The objective of this project work is to focus on the working capital of the Vantex Paints Pvt.
Ltd. and exploring its potential in the company. The project contain the basic postulates of
working capital, procedure of analysis of working capital, ratio being used to define the working
capital and the impact of working capital in the company in case of excess or inadequacy. Also,
the project contains analysis of estimation of working capital requirement and the procedure to
estimate working capital requirement in manufacturing and trading concern and from the data
available it can be concluded that it holds a very strong position in the market.

RESEARCH DESIGN

The research design for the comparative study is of exploratory type and the focus is given to
discover the possible measures, by detailed analysis, for the company which would be helpful up
to some extent to retain a good position in the competitive market. The research design is not
formal and rigid one as the focus depends upon the availability of new ideas and relationship
among variables.

DATA COLLECTION METHOD

Primary Data:
The primary data are which are collected afresh and for the first time, and thus happen to be
original in character.

Secondary sources:
The Secondary data are those which have already been collected and through processed the
statically process.

For the purpose of study both primary as well as secondary data have been used. The secondary
data have been collected from company broachers, newspapers, company annual reports, and
websites. For the collection of primary data personally asked the question.

For the purpose of knowing the whereabouts of the company in the present market secondary
 data has disclosed many important information as- market share of the company and its potential
in the electrodynamic vibration market leaders on the basis of various attributes .

TOOLS FOR ANALYSIS

The following statistical tools have been used for analyzing the data.

➢ Column diagram
➢ Sampling percentage
➢ Pie-Diagram

SIMPLE PERCENTAGE ANALYSIS

Percentage refers to a special kind of ratio. Percentages are used in making comparisons between two or
more variables to find the efficacy of each variable. Percentages are used to describe relationships
among them replacing the common base say (100) so that comparisons can be made easy and
meaningful.

DATA ANALYSIS PROCEDURE

We used different formulas to calculate each ratio and for data analysis and after that we interpret them in a brief.
you can see them in data analysis and interpretation
Statement showing change in working capital for Vantex Paints

Particulars 17-18 16-17 Increase ( + ) Decrease (- )

Current Assets
Inventories 1,418275 14052466 130284
0
Sund. Debtors 4897544 30901152 18074291
3
Cash & Bank 2304500 1895049 409451
Loan & Advances 3066013 23485905 7174227
2
Total ( A ) 9612282 70334572
5

Current
Liabilities
C.L. 3439423 19139989 15254246
5
Provisions 2980000 3184500 204500
Total ( B ) 3737423 22324489
5

( A-B ) 5874859 48010083 25992753 15254246

0
↑ in working 10738507 10738507
capital
Total 5874859 58748590 25992753 25992753
0

Statement showing change in working capital for Vantex Paints

Particulars 16-17 15-16 Increase ( + ) Decrease

(-)
Current Assets
Inventories 1405246 13908710 143756
6
Sund. Debtors 3090115 12821864 18079288
2
Cash & Bank 1895049 1496214 398835
Loan & Adv. 2348590 13988679 9497226
5
Total ( A ) 7033457 42215467
2
Current
Liabilities
C.L. 1913998 26021539 6881550
9
Provisions 3184500 1233000 1951500
Total ( B ) 2232448 27254539
9

( A-B ) 4801008 14960928 35000655 1951500

3
↑ in 33049155 33049155
working
capital
Total 4801008 48010083 35000655 35000655
3
DATA ANALYSIS AND INTERPRETATION

CALCULATION OF WORKING CAPITAL FOR VANTEX PAINT

-------------- ------------- -----------

TOTAL CURRENT ASSESTS (a) 42215467 70334572 961225
--------------- --------------- -----------
LESS:-

CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIES 26021539 19139989 34394235

PROVISION 1233000 3184500 2980000

------------- ----------- ----------

TOTAL CURRENT LIABILITIES (b) 27254539 --- ---
-------------- 223244 373742
- 89 35
-------------- -----------
---
NET CURRENT ASSETS (a-b) 14960928 4801008 58748590
3

NET WORKING CAPITAL

587
485
480 90
108
03

149
609
28

2016 2017 2018

YEAR
ANALYSIS OF VARIOUS COMPONENTS OF WORKING CAPITAL
INVENTORY ANALYSIS

Inventory is the total amount of goods and materials content in a store of factory at any given time. Inventory
means stock of three:-
1. Raw materials
2. Semi finished goods.
3. Finished goods.

Position of inventory in Vantex Paints

Particular 31.03.16 31.03.17 31.03.18

Raw material 3152145 2928101 2672500

Stock in process 10756565 11124365 11510250
--------------- ---- -------------
------------- ---
13908710 14052466 14182750
----------------- --------------- ------------

Analysis through
chart:

14182
750
14200 14052
000 466
14100 A
13908
000 710 M
O
14000 U
000 N
13900
13700
000
000
2 20 2
13800 0 17 0
000 1 Y 1
6 E
A
R
INTERPRETATION:
By analyzing the 3 years data we see that the inventories are increased year by year. We are
looking increasing pattern in inventories. We can see that inventories are grown by 1% and 0.9%
in 15-16 and 17-18 respectively from previous year. By this growth we can say that the company
is growing. A company uses inventory when they have demand in market and Vantex Paints is
having a demand in industry market. That is biggest reason for increase in inventories. From
other point of view we can say that the liquidity of firm is blocked in inventories but to stock is
very good due to uncertainty of availability of raw material in time.

SUNDRY DEBTORS ANALYSIS

Debtors or an account receivable is an important component of working capital and fall under
current assets. Debtors will arise only when credit sales are made.
Position of Sundry Debtors inVantex Paints

Particular 31.03.16 31.03.17 31.03.

18
Debts outstanding more than 6 months 781270 3888555 567200
0

Other Debts 11091194 27012597 459462

07
------------------ ------------------ ---------
Total (a) 11872464 - --
30901152 5161820
7
---------------- --------------- ---------
-
Less:

Doubtful Debts 949400 -------- 26427

64
Total (b) 949400 -------- 26427
64
-------------- -------------- -------
---
Total (a-b) 12821864 30901152

48975443
-------------- --------------- ------
--
Analysis through chart:

60000
000 48975
50000 443
000
A
40000 30901
m 152
ou 30000
000
000
nt 20000 12821
000 864
10000
000

0
2 2 2
0 0 0
1 Y1 1
6 E7 8
INTERPRETATION A
R
In the table and figure we see that there is continuous rise in the debtors of Vantex Paints in the
successive years. A simple logic is that debtors increase only when sales increase and if sales
increases it is good sign for growth. We can see 141% and 58% growth in 16-17 and 17-18
respectively from previous years.
We can say that it is a good sign as well as negative also. Company policy of debtors is very
good but a risk of bad debts is always present in high debtors. When sales are increasing with a
great speed the profit also increases. If company decreases the Debtors they can use the money in
many investment plans.

CASH AND BANK BALANCE ANALYSIS

Cash is called the most liquid asset and vital current assets, it is an important component of
working capital. In a narrow sense, cash includes notes, bank draft, cheque etc while in a broader
sense it includes near cash assets such as marketable securities and time deposits with bank.
Position of Cash and Bank Balance in Vantex Paints
Particular 31.03.16 31.03.18

31.03.17

Cash in hand 250748 80017 1033235

Fixed deposit 1059523 1367844 787961

Bank balances

With scheduled bank:

In Current Account 185943 447188 483304
-------------- ------------- -----------
Total 1496214 1895049 2304500
------------- ------------------ ---------

Analysis through chart:

2500
000

2000
000

1500
000

1000
000
2 2 2
0 0 0
5000 1 Y1 1
00 6 E7 8
A
0 R
A
M
O
U
INTERPRETATION
If we analyze the above table and chart we find that it follows an increasing trend. In the year
2016 it had maintained a huge amount of cash and bank balance which has increased in the year
2017 and 2018. Although the company's cash is increasing but this is a very good sign for the
company. The analysis shows that the fixed deposits of company are rapidly fallen in the year as
42.3% in 17- 18 respectively from previous year. Company is utilizing the fixed cash for
exploding the projects that are good for growth,

LOANS AND ADVANCES ANALYSIS

Loans and Advances here refers to any to amount given to different parties, company, employees
for a specific period of time and in return they will be liable to make timely repayment of that
amount in addition to interest on that loan.

Position of Other Loans & Advances in Vantex Paints

Particular 31.03.16 31.03.17 31.03.18

Advance Tax & Tds 128878 353919 1926354

Loans & Advances (assets) 1168461 22079745 27466165

8
Prepaid Expenses 244335 43000 216326

Security Deposit & Earnest 770928 1009240 1051286

Money
-- ---------------- ----------- -----------
Total 12828759 --- ---
234859 306601
04 31
------------------ ----------------- --------------
 Analysis through chart:

3500
0000

3000
0000

AMOUNT In RS 2500
0000

2000
0000

1500
0000

1000
0000
2 2 2
0 0 0
5000 1 1 1
000 6 7 8

YEAR

INTERPRETATION
If we analyze the table and the chart we can see that it follows an increasing trend which is a
good sign for the company. We can see that the increase of 83% and 30.54% in 16-17 and 07-18
respectively from previous year.
The increasing pattern shows that company is giving advances for the expansion of plants and
machinery which is good sign for better productioN.

CURRENT LIABILITIES ANALYSIS

Current liabilities are any liabilities that are incurred by the firm on a short term basis or current liabilities that
has to be paid by the firm within one year.
Position of Other Current Liabilities in Vantex Paints

Particular
31.03.16 31.03.18

31.03.17

Advance From customer 523512 10084413 7536341

Bank O/D A/c 4 1482216 84248

3
1
Creditor for expenses 9674075 2487913 1503979

Creditor for good 12720801 3518381 11617976

Creditor for other ---------- ----- 11027760

Expenses
payable& Duties 3102720 1567066 2623931
& Taxes
------------- ---- ---------
Total ----------- 3434235
26021539 --------

19139989
------------------- ---
------------

Analysis through chart:

35000 A
000
M
30000 O
000 U
25000 N
000 T(
IN
20000 R
000 S
15000
000
10000 2 2 2
0 0 0
000 1 1 YEAR 1
6 7 8
50000
00
0
INTERPRETATION

If we analyze the above table then we can see that it follow an uneven trend. The important
component of current liabilities is sundry creditors and other liabilities. In 16-17 it decreased by
27% and in 17-18 it increased by 75%. In 17-18 it was increased because of growth in other
liabilities .This is liability for company so this should be less. When company have minimum
liabilities it creates a better goodwill in market. High current liabilities indicate that company is
using credit facilities by creditors.

PROVISIONS ANALYSIS
Position of Other Provisions in Vantex Paints

Particular 31.03.16 31.03.17 31.03.18

Fringe Benefit Tax 562000 425000 300000

Income tax 671000 2759500 2680000

------------- -------------- -------------

Total 1233000 3184500 298000
------------- ------------ 0
----------
---
Analysis through chart:

3500
000

3000
000

2500
A
M 000
O
U 2000
N 000
T(
IN 1500
R 000
S
1000
000 2 2 2
0 0 0
1 1 1
5000 6 8
00

0
YEAR

INTERPRETATION
From the above table we can see that provision shows an uneven trend and the huge amount is
being kept in these provisions. Though the profits of the company are increased income tax is
also increased which is good that company is creating goodwill in market by pa ing income tax
in time. The income tax is increased by 158% in 16-17 and fall 6% in 17-18 respectively from
previous year. Although company is paying more income tax but also they are earning more.
This is good sign for Company growth.
Particular 31.03.16 31.03.17

31.03.1
CURRENT ASSETS
INVENTORIES 13908710 14052466

14182750
SUNDRY DEBTORS 12821864 30901152

48975443
CASH AND BANK 1496214 1895049 2304500
LOANS & ADVANCES 13988679 23485905 30660132
RATIO ANALYSIS AND ITS INTERPRETATION
Position of RECEIVABLE RATIO in Vantex Paints

FORMULA
DEBTORS
RECEIVABLE RATIO = * 365
SALES

YEAR 31.03. 31.03. 31.03.08

16 07

RECEIVABLE RATIO (IN DAYS) 62.41 89.79 133.59

Analysis through chart:

160

140

120

D 100
A
Y 80

60

40

20

2016 2017 2018

YEAR
INTERPRETATION

Generally a low debtors turnover ratio implies that it considered congenial for the business as it
implies better cash flow. The ratio indicates the time at which the debts are collected on an
average during the year. Needless to say that a high Debtors Turnover Ratio implies a shorter
collection period which indicates prompt payment made by the customer.

Now if we analyze the three year data we can say that it holds a good position while receiving its
money from its debtors. The ratios are in an increasing trend, which implies that recovery
position is good and company should maintain these positions

Position of PAYABLE RATIO in Vantex Paints

FORMULA
CREDITORS
PAYABLE RATIO= * 365
COST OF SALES

YEAR 31.03.16 31.03.17 31.03.18

PAYABLE RATIO (IN DAYS) 116.66 28.83 113.81

Analysis through chart:

140

120

100

D
A 80
Y
60

40

20

2016 2017 2018

YEAR

INTERPRETATION

Actually this ratio reveals the ability of the firm to avail the credit facility from the suppliers
throughout the year. Generally a low creditor’s turnover ratio implies favorable since the firm
enjoys lengthy credit period.
Now if we analyze the three years data we find that in the year 2016 the ratio was very high
which means that its position of creditors that year was not good, but in the next years it is seen
that it has followed a decreasing trend which is very good sign for the company but in 2018 it
followed a increasing trend So we can say it not enjoys a very good credit facility from the from
the suppliers.
Position of CURRENT RATIO in Vantex Paints
FORMULA

TOTAL CURRENT ASSETS

CURRENT RATIO= --------------------------------------------
TOTAL CURRENT LIABILITIES

YEAR 31.03.16 31.03.17 31.03.18

CURRENT RATIO 1.5 3.15 2.57

Analysis through chart:

3.5

2.5

D 2
A
Y
1.5

0.5

0
YEAR
2017 2018
20
16
INTERPRETATION

This ratio reflects the financial stability of the enterprise. The standard of the normal ratio is 2:1
but in most of companies standard is taken according to Tandon Committee which is taken as
1.33:1.
Now if we analyze the three years data it can be predicted that it holds a stable position all
throughout period but it is seen that it holds a low position in 2016 compare the standard one but
the company improve its position in 2017 &2018 which show improving position of the
company

Position of QUICK RATIO in Vantex Paints

FORMULA

TOTAL CURRENT ASSETS - INVENTORIES

QUICK RATIO= -----------------------------------------------------------------
TOTAL CURRENT LIABILITIES

YEAR 31.03.16 31.03.17 31.03.18

QUICK RATIO 1.03 2.52 2.19

Analysis through chart:

2.5

D
A 1.5
Y
1

0.5

2016 2017 2018

YEAR

INTERPRETATION

It is the ratio between quick liquid assets and quick liabilities. The normal value for such ratio is
taken to be 1:1. It is used as an assessment tool for testing the liquidity position of the firm. It
indicates the relationship between strictly liquid assets whose realizable value is almost certain
on one hand and strictly liquid liabilities on the other hand. Liquid assets comprise all current
assets minus stock.
By analyzing the three years data it can be said that its position was weak in the year 2016 but it
improved significantly in the next two years and was stable during that year and it is meet with
the standard & in the year 2017 & 2018 it was very satisfactory and it can be said that its
liquidity position is stable & good.
 Position of WORKING CAPITAL RATIO in Vantex Paints

FORMULA

COST OF GOOD SOLD

WORKING CAPITAL TURNOVER RATIO = -------------------------------------------------------
WORKING CAPITAL

YEAR 31.03.16 31.03.17 31.03.18

WORKING CAPITAL RATIO 4.68 1.57 1.31

Analysis through chart:

5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0

2016 2017 2018

INTERPRETATION

This ratio indicates whether the investments in current assets or net current assets ( i.e., working
capital ) have been properly utilized. In order words it shows the relationship between sales and
working capital. Higher the ratio lower is the investment in working capital and higher is the
profitability. But too high ratio indicates over trading.

This ratio is an important indicator about the working capital position. Now if we analyze the
three years data, we find that it follows a decreasing trend which means that its investment in
working capital is higher and the company not utilizing more of its profit. But we find that it is
not a good sign for the company and the company is required to look into these matters closely.

Position of INVENTORY TURNOVER RATIO in Vantex Paints

FORMULA

AVERAGE STOCK
STOCK TURNOVER RATIO (IN DAYS) = * 365
COST OF GOODS SOLD

YEAR 31.03.16 31.03.17 31.03.18

STOCK TURN OVER RATIO 65.02 67.16 36.14

Analysis through chart:

80

70

60

D 50
A
Y
40

30

20

10

2016 2017 2018

YEAR

INTERPRETATION

This ratio tells the story by which stock is converted into sales. A high stock turnover ratio
reveals the liquidity of the inventory i.e., how many times on average, inventory is turned over or
sold during the year. If a firm maintains a minimum stock level in order to maximize sales by
quick rotation of inventory and the holding cost of inventory will be minimum. A low stock
turnover ratio reveals undesirable accumulation of obsolete stock.
By analyzing the three year data it seen that it follows an uneven trend. We see that from the year
2016 to 2017 it is more which has been rectified in the year 2018. But it is needless to say that
ratio the company maintains is very high in 2016 &2017 and the company is required to take
measures to lower down this ratio as it affects the working capital cycle of company and the flow
of cash in the company. In 2018 we saw company take measure to lower down its ratio which is
good for company because A low stock turnover ratio reveals undesirable accumulation of
obsolete stocK.
Position of Debt-Equity RATIO in Vantex Paints
Formula = Debt / Equity
Calculation of debt-equity ratio at Vantex Paints

Particulars 2005-16 2016-17 2017-18

Debt 4750168 70518408 58513399
Equity 31543972 51077695 72736936
D/E Ratio 0.15:1 1.38:1 0.80:1

Analysis through chart:

1.6

1.4

1.2
D/
E1
R
ati
0.8
o
0.6

0.4

0.2

2005-16 2016-17 2007-18

YEAR
Interpretation

This ratio establishes a relationship between external liabilities and shareholder fund. The DER is
worked out to ascertain the relative proportion of debt & equity in financing the assets of the
firm. Generally, a debt equity ratio Of 1:1 is considered satisfactory

When a company has lower d/e ratio, it means that company is utilizing its own funds and
reserves rather than taking loans from outsiders. Vantex Paint have a uneven trend in d/e ratio so
we can say that in 2016 which portray that debt is less than shareholder fund but in 2017 it
increase due to it increase in debt more than its equity but in 2018 its lees than the equity which
show company in satisfactory position & the long term solvency position of the enterprise is
quite comfortable.
Material storage period position of Vantex Paints

FORMULA

Average stock for the year

Material storage period (in days) = ---------------------------------------
Daily average consumption

Average stock = opening stock + closing stock

---------------------------------------
2

Daily average consumption = Annual average consumption

-----------------------------------------
360

YEAR 31.03.16 31.03.17 31.03.18

Material storage period (R) = 30 days 18 days 16days

Analysis through chart:

1
6

2
3 0
0 1
6
2
0
1
1
8 7
2
0
1
8

Production process period position of Vantex Paints

FORMULA

Average work in process (WIP)

Production process period (in days) = ---------------------------------------
Average production cost
 Average WIP = opening WIP + closing WIP
---------------------------------------
2

Average production cost = Average daily cost of production

-----------------------------------------
360

YEAR 31.03.16 31.03.17 31.03.18

Production process period (W) 361days 171days 5days

Analysis through chart:

1 2
7 0
1 1
6

3 2
6 0
1 1
7
2
0
1
8
Finished goods storage period position of Vantex Paints

FORMULA

Average stock of the finished good

Finished goods storage period (in days) = ---------------------------------------
Average cost of sales per day

Average finished good = opening finished goods + closing finished goods

-------------------------------------------------
2

Average cost of sales = Annual cost of goods sold

-----------------------------------------
360

YEAR 31.03.16 31.03.17 31.03.18

Finished goods storage period (F) 00 00 00

Interpretation

Vantex Paints doesn’t hold the finished goods in stock. As the finished goods is manufactured it
made their goods after the demand of product from the customer. That’s why the finished good
storage period of Vantex Paints is nil.

Debtor collection period of Vantex Paints

FORMULA
Debtor collection period = average debtors
------------------------------
Daily average sales

Average debtors = opening debtor + closing debtor

Daily average sales
-------------------------------------------
2
= Annual sales
-----------------------------
360
YEAR 31.03.16 31.03.17 31.03.18

Debtor collection period (D) = 51days 62days 1076days

Analysis through chart:

51

62

2
0
1
6
2
0
1
1 7
0 2
7
6 0
1
8
Creditor payment period of Ventex

FORMULA

Creditor payment period = Average trade creditor

-------------------------------------------
Average credit purchase per day

Average payment period = opening creditor + closing creditor

---------------------------------------------------
2
Average credit purchase per day = Annual credit purchase
-------------------------------
360

YEAR 31.03.16 31.03.17 31.03.18

Creditor payment period(C) 228days 85days 37days

Analysis through chart

3
7

2
8 0
5 1
6
2
0
2 1
2
8 7
2
0
1
8

Operating cycle period of Vantex Paints

Formula

OC = R +W+F+D-C
YEAR 31.03.16 31.03.17 31.03.18

Operating cycle period 214days 166 days 1063days

Analysis through chart

2
1
4
1 2
6 0
6 1
6
2
1 0
0 1
6 7
3
2
0
1
8
 CONCLUSIONS
After completing my project on working capital management in Vantex Paints, I can say that now
I understand working capital much better and in a practical way. This project helps me in
understanding the daily requirement in a manufacturing firm.
During my training period in Vantex Paints I am able to know the importance of working capital
in any company especially if the concern is a big one. It enable the company to have regular
supply of raw material, regular payment of salary and wages, exploit the favorable market
conditions, have ability to face crisis and also make the good image of the company. In Vantex
Paints the working capital requirements are very high as production is continuous in the concern.

Working capital is also a major external source of capital for especially small and medium sized
firms. These firms have relatively limited access to capital markets and tend to overcome this
complication by short-term borrowing. Working capital position of such firms is not only an
internal firm-specific matter, but also an important indicator of risk for creditors. Higher amount
of working capital enables a firm to meet its short-term obligations easier. This results increase in
borrowing capability and decrease in default risk (and consequential decrease in cost of capital
and increase in firm value). So, it is possible to state that efficiency in working capital
management affects not only short-term financial performance (profitability), but also long-term
financial performance (firm value maximization).

From the discussion in this project we can say that Vantex Paints manage its working capital
requirement in an effective and efficient manner. Its current assets are approx. twice of its current
liabilities which is the standard for any company and it means that the company always have the
sufficient amount of cash to meet any type of liability at any time.
 Major Findings

Statement Showing Difference from Previous Year

Particulars 16-17 17-18

Investments 000000000 -100000

↑ by0% ↓.79%
Inventories 143756 130284
↑ by 1% ↑ by 0.92%
Sundry Debtors 108079288 18074291
↑ by 141% ↑ by 58%
Cash & Bank 398835 409451
↑ by 26.6% ↑ by 21.6%
Current Liabilities -6881550 15254246
↓ by 26.44% ↑ by 76.69%
Reserve & Surplus 19533723 21659241
↑ by 86.76% ↑ by 51.51%
1. Vantex Paints profit is increasing day by day from last three years.

2. Vantex Paints has shown that it is very strong competitor in Electrodynamics

shaker market in India.

3. Overall all ratios of the company are good and company need to work with more
efficiency

4. Lack of advertisement can be said as weak point of the Vantex Paints.

5. Firm profitability can be increased by shortening accounts receivables and inventory

periods

6. Position of the stock is increasing per year that is good sign to face the competition
coming ahead.

7. Recession in the economy affect the Vantex Paints.

8. Appreciation in rupees reduces the profit the company.

9. The major sources of raw materials are local sources and USA, UK, etc

10. Working capital management of the Vantex Paints Is satisfactory due to efficient
management of inventory, debtors, cash balances and working funds.

11. The major elements of working capital are inventory, debtors, cash balances and short
term investments.

12. Cash management of the company is done through cash budget, cash flow statement and
other steps.

13. The company has bright prospects due to efficient management of mace, machine
materials & technology.

14. The company has successful uses of working capital due to planned inventory,
receivables, cash, finance and good cash inflow.
 BIBLIOGRAPHY

Reference of book

Dr.A.K.Garg (2007), Basic Business Finance, Swati Prakashan Publisher, UP

C.R.Kothari (2009), Research Methodology, New Age International Publishers, New Delhi

Reference of web pag

www.ventaxcom
http://aggregate-inventory-management-47605.htm

http://www.allelectricalproducts.com/indian-electricalindustry.html

http://isb.agepub:com/(g)/content/abstract/1412152

http://findarticles:com/P/articles/mi-qa3857/is200807/ai_n30992061

http://wwwfinanceweek:co.uk/item/6240

http://findarticle.com/P/article/mi-qa5439/is_200801/ai_n27996599

http://wwwemeraldinsight.com/insight/viewcontentservlet?filename=published/emeraldfull text
article/Articles/0010340208html