A STUDY ON

“WORKING CAPITAL MANAGEMENT”

TATA MOTORS

1
 INDEX

S.NO CONTENTS PAGE NO.

CHAPTER-1 INTRODUCTION
NEED OF THE STUDY
OBJECTIVES OF THE STUDY
SCOPE OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS

CHAPTER-2 REVIEW OF LITERATURE

CHAPTER-3 INDUSTRY PROFILE

COMPANY PROFILE

CHAPTER-4 DATA ANALYSIS AND INTERPRETATIONS

CHAPTER-5 FINDINGS
SUGGESTIONS
CONCLUSION
BIBILIOGRAPHY

2
 ABSTRACT
The uses of funds of difficulty may be divided into two parts specifically long-term
budget and quick-term price range. The lengthy -term investment can be termed as 'fixed
funding.' a chief part of the long-time period finances is invested within the constant assets.
Those constant assets are retained within the commercial enterprise to earn profits all through the
life of the constant belongings. To run the commercial enterprise operations short-time period
property also are required The makes use of of budget of a situation may be divided into
elements specifically long-term price range and short-time period budget. The lengthy -time
period investment can be termed as 'fixed investment.' a major a part of the long-time period
finances is invested within the constant belongings. These constant belongings are retained
inside the enterprise to earn income all through the existence of the constant property. To run the
enterprise operations short-term property also are required.

3
 CHAPTER-1
INTRODUCTION

4
 INTRODUCTION
Working capital (abbreviated WC) is a monetary metric which represents working
liquidity to be had to a commercial enterprise, organization or different entity, consisting of
governmental entity. Along with fixed property along with plant and device, running capital is
considered a part of running capital. Internet operating capital is calculated as modern property
minus contemporary liabilities. It is a derivation of working capital that is generally used in
valuation techniques together with DCFs (Discounted cash flows). If cutting-edge belongings are
less than present day liabilities, an entity has a operating capital deficiency, additionally known
as a operating capital deficit. A employer can be endowed with belongings and profitability but
brief of liquidity if its property cannot effortlessly be converted into cash. High quality operating
capital is required to ensure that a firm is able to hold its operations and that it has enough funds
to meet each maturing brief-term debt and upcoming operational prices. The management of
operating capital entails handling inventories, bills receivable and payable, and cash.

Present day property and modern-day liabilities consist of 3 debts that are of unique importance.
Those debts constitute the areas of the business where managers have the maximum direct
impact:

• debts receivable (current asset)

• inventory (cutting-edge belongings), and

• money owed payable (contemporary liability)

Working capital is commonly described as the difference between present day assets and modern
liabilities.

Running Capital = present day assets-contemporary Liabilities

There are two most important concepts of working capital:

Gross operating capital

internet running capital

5
Gross running capital:

It refers to company's funding in contemporary property. Contemporary assets are the assets,
which may be converted into CASH with in a financial year. The gross operating capital points
to the want of arranging budget to finance cutting-edge property.

Net running capital:

It refers back to the difference among current property and current liabilities. Internet operating
capital can be advantageous or poor. A high-quality net working capital will rise up whilst
modern belongings exceed current liabilities. And vice-versa for poor net operating capital.
Internet operating capital is a qualitative idea. It shows the liquidity position of the firm and
shows the extent to which working capital wishes may be financed by using everlasting
resources of finances. Net operating capital also covers the question of really appropriate mix of
lengthy-term and brief-term budget for financing cutting-edge property.

6
 OBJECTIVE OF THE STUDY

 Estimation of operating capital requirement

 assessment of working capital control

 evaluation of Liquidity position & operating capital usage

 evaluation of dating among operating capital and profitability

 evaluation & sources of working capital

 studying the extent of current belongings with relation to cutting-edge liabilities.

7
 NEED OF THE STUDY
 Assessment, analysis & interpretation of operating capital management of TATA
vehicles PVT LTD.
 Suggesting ways to improve its operating capital usage.

8
 SCOPE OF THE STUDY
This challenge will be a getting to know tool for the finance scholar.
Thru this project i'd examine the various methods of the running capital management.
The project might be a gaining knowledge of of planning and financing running capital.
The mission would also be an powerful device for credit score regulations of the
businesses.
This may display exclusive techniques of protecting inventory and dealing with cash and
receivables.
This will display the liquidity function of the corporation and additionally how do they keep a
selected liquidity role

9
 METHODOLOGY

Research technique is the systematic method of recording new records or

verifying vintage statistics, their interrelationship casual explanation & the natural
laws that govern them.
The number one item of R.M. Is to get proper & intimate knowledge of human
society, enterprise & its functioning to recognize & apprehend the laws which
might be operating behind diverse social sports of guy.
Technique OF series:-
While finding out about the technique of data collection for use for the observe,
there are kinds of records
Primary & and secondary
The primary information are those which might be collective a clean & for first
time & this manifest to be business enterprise in man or woman.
Secondary facts are those that have already been accrued by way of a person else
& that have been already passing via the statistical process.
Methods OF QUANTATIVE evaluation
 Calculation of net operating capital requirements.
 Ratio analysis
 operating cycle & CASH cycle
 CASH go with the flow evaluation
 determining the Financing mix
 Statistical tools like graphical presentation

10
 LIMITATIONS OF THE STUDY
 While there's an excessive working capital it in all likelihood will cause the
needless procurement and buildup of inventory attracting extra probability of burglary,
waste and losses.
 Redundant operating capital implies an excessive amount of debtors and defective
credit score practices which may create extended incidence of terrible money owed.
 it can result in incompetency of the enterprise, on the complete.
 attributable to less charge of return on funds the worth of stocks can also as
properly decrease.
 The immoderate running capital can also improve speculative transactions.
 A company which has insufficient working capital will no longer be capable of
meet its quick-time period duties in time. Therefore, it's going to lose its goodwill and
shall no longer be capable of having superior credit score centers.
 It can not procure its necessities in bulk and can't avail discounts.
 It becomes hard for the employer to take benefit of effective marketplace scenario
and take on rewarding projects because of loss of running capital.

11
 CHAPTER-2
REVIEW OF LITERATURE

12
 REVIEW OF LITERATURE
MEANING OF WORKING CAPITAL:
Capital required for a enterprise may be classifies beneath two important categories:

• fixed Capital

• Working Capital

Each commercial enterprise needs finances for two functions for its establishments and to carry out each
day operations. Long time budget are required to create production facilities through buy of fixed assets
such as plant and equipment, land and constructing, fixtures etc. Investments in those belongings are
representing that a part of company’s capital that's blocked on a everlasting or fixed basis and is known as
constant capital. Finances also are needed for quick term functions for the shopping of raw materials, bills
of wages and different day to day expenses etc. Those funds are referred to as running capital. In easy
words, running capital refers to that part of the company’s capital that's required for financing quick time
period or modern-day belongings which include CASH, marketable securities, borrowers and inventories.

Principles OF operating CAPITAL:

There are two standards of operating capital:

• stability Sheet principles

• operating Cycle or round drift concept

Balance SHEET idea:

There are interpretation of working capital underneath the stability sheet concept:

• Gross running Capital

• net running Capital

The time period running capital refers back to the Gross operating capital and represents the amount of
budget invested in cutting-edge belongings . Consequently, the gross running capital is the capital
invested in total current assets of the establishments. Contemporary property are those belongings that are
transformed into CASH within brief durations of usually one accounting year. Example of modern-day
assets is:

Constituents of present day property:

13
• cash in hand and bank balance

• payments Receivable

• Sundry debtors

• short term Loans and Advances

• Inventories of inventory as:

 raw materials

 paintings in system

 shops and areas

 completed goods

• brief Investments of Surplus finances

• prepaid costs

• accrued earning

The time period operating capital refers to the internet working capital. Net operating capital is the extra
of contemporary belongings over modern liabilities or say:

Internet running Capital = current property – current Liabilities.

Net operating CAPITAL can be poor OR fantastic:

Whilst the modern property exceed the cutting-edge liabilities, the running capital is positive and the bad
operating capital consequences while the modern liabilities are extra than the modern-day assets.
Contemporary liabilities are those liabilities which might be supposed to be paid in the everyday route of
commercial enterprise within a brief length of normally one accounting yr of the contemporary
belongings or the profits of the enterprise. Examples of present day liabilities are:

Parts OF modern-day LIBILITIES:

• payments Payable

• Sundry creditors or Account Payable

• gathered or incredible prices

14
• quick term Loans, Advances and Deposits

• Dividends Payable

• bank Overdraft

• Provision for Taxation, If does now not quantity to appropriation of profits

The gross operating capital concept is economic or going concern idea whereas internet operating capital
is an accounting idea of operating capital.

Running CYCLE OR CIRCULATING cash layout:

Operating Capital refers to that part of company’s capital which is required for financing quick term or
modern-day belongings along with CASH, marketable securities, borrowers and inventories. Funds
consequently invested in modern-day property keep revolving rapid and being constantly transformed
into CASH and these cash flows out again in change for different modern-day belongings. Hence it's also
known as revolving or circulating capital. The round waft idea of running capital is based totally upon
this working or operating capital cycle of a company. The cycle starts with the purchase of uncooked
material and other assets

And ends with the realization of CASH from the income of finished goods. It includes purchase of raw
cloth and shops, its conversion into stocks of completed goods via paintings in progress with modern
increment of hard work and service fee, conversion of completed stocks into income, borrowers and
receivables and in the long run realization of cash and this cycle non-stop again from cash to purchase of
uncooked materials and so on. The speed/ time of duration required to complete one cycle determines the
necessities of running capital longer the duration of cycle, large is the requirement of operating capital.

Cash received form

Debtors and paid to suppliers

Of raw materials

The gross operating cycle of a firm is equal to the length of the inventories and

receivables conversion periods. Thus,

Gross Operating Cycle = RMCP + WIPCP + FGCP + RCP

15
Net Operating Cycle Period = Gross Operating Cycle Period – Payable Deferral period

In which,

RMCP = uncooked cloth Conversion duration

WIPCP = paintings –in- system Conversion length

FGCP = completed items Conversion duration

RCP = Receivables Conversion period

But, a firm can also gather a few assets on credit and as a result defer bills for positive period. In

that case, internet running cycle period can be calculated as underneath:

Further, following components may be used to determine the conversion

intervals.

 raw material Conversion period = common inventory of raw cloth.

Raw fabric consumption in step with day

 work in manner Conversion period = average inventory of labor-in-progress

overall price of manufacturing in step with day

 completed goods Conversion duration = common inventory of completed goods

general fee of goods offered according to day

 Receivables Conversion length = common money owed Receivables

16
 internet credit income in keeping with day

 Payable Deferral length = common Payable

net credit purchase consistent with day

Category OR sort of running CAPITAL:

Running capital may be labeled in two methods:

• On the basis of idea

• On the idea of time

Om the premise of idea, working capital is classed as gross working capital and internet working

capital. The class is critical from the factor of view of the monetary manager.

On the idea of time, running capital may be labeled as:

• permanent or fixed working capital

• temporary or Variable operating capital.

17
 t Kinds of Working Capital

On the basis of concept On the basis of time

Permanent or Temporary or
Gross Working
Net Working Variable Working
Fixed Working
Capital
Capital
Capital

Regular Reserve Working Special Working

Working Capital Capital Capital

18
 CHAPTER-3
INDUSTRY PROFILE
COMPANY PROFILE

19
 INDUSTRY PROFILE
The auto business has changed the way wherein people stay and paintings. The
maximum punctual of cutting-edge motors was produced inside the year 1895. Instantly the first
appearance of the automobile observed in quite a while. As the century became, 3 automobiles
have been imported in Mumbai (India). Inner decade there have been aggregate of 1025 autos in
the city.

The start of automobile truely returns to 4000 years when the first wheel changed into utilized
for transportation in quite some time. Inside the begin of fifteenth century, Portuguese showed up
in China and the affiliation of the 2 societies prompted an assortment of latest improvements,
along with the manufacturing of a wheel that grew to become under its very own capacity. Via
1600s little steam-fueled motor models was grown, yet it took one extra century earlier than a
complete-sized motor managed car changed into created.Brothers Charles and Frank Duryea
offered the actual horseless carriage inside the yr 1893. It was the primary inward ignition engine
vehicle of the united states, and it become trailed by using Henry Ford's first exploratory vehicle
that equivalent 12 months. One of the most noteworthy appraised early extravagance motors was
the 1909 Rolls-Royce Silver Ghost that protected a tranquil 6-chamber motor, cowhide inside,
collapsing windscreens and hood, and an aluminum body.

Drivers for the most part drove it and accentuation changed into on solace and fashion instead of
pace.

Throughout the Twenties, the motors displayed structure refinements, for example, swell tires,
squeezed steel wheels, and 4-wheel brakes.Graham Paige DC Phaeton of 1929 covered a eight-
chamber motor and an aluminum body.The 1937 Pontiac De Luxe vehicle had spacious inner
and back pivoted secondary passage that match greater to the necessities of families. In 1930s,
motors were now not so much rectangular fashioned but rather extra streamlined than their
ancestor changed into. The 1940s noticed highlights like programmed transmission, constant
shaft headlights, and tubeless tires.The yr 1957 added floor-breaking superior cars, for example,
Mercedes-Benz 300SL. It become primarily based on smaller and adapted strains, and become in
shape for 230 kmph (one hundred forty four mph).

20
This became the Indian automobile records, and today current automobiles are generally mild,
efficaciously makers, business vehicle creators or three-wheeler businesses - every body seems,
by means of all bills, to be in a scramble to climb introduction limits. The country is relied upon
to observer over Rs 30,000 crore of speculation by means of 2010.Hyundai will likewise be
exposing the Verna and a spic and span diesel car. Popular cars will dispatch a Mini and is
probably a smaller automobile. A big portion of the corporations have made their targets
understood. Maruti Udyog has installation the following vehicle plant with an assembling limit
of two.Five lakh units consistent with annum for a mission of Rs 6,500 Crore (Rs 3,two hundred
Crore for diesel automobiles and Rs 2,718 Crore for the automobile plant itself).

Hyundai and Tata automobiles have declared designs for contributing a similar sum at some
point of the subsequent three years. Hyundai will get more than Rs three,800 Crore to India.Tata
cars will put Rs 2,000 Crore in its little vehicle task.

Wellknown motors will make contributions Rs 100 Crore, Ford about Rs 350 Crore and Toyota
reported unassuming improvement designs at the same time as Honda Siel has reserved Rs 3,000
Crore in the course of the subsequent decade for India - a substantial lump of this need to drop
with the aid of 2010 because the employer is also hoping to enter the worthwhile little vehicle
section..Speakme about the enterprise vehicle fragment, TATA vehicles and Tata cars have
every declared well over Rs 1,000 Crore of speculation. Mahindra and Mahindra's joint
undertaking with worldwide vehicles is relied upon to see an implantation of in any event Rs 500
Crore.Industry execution in 2008-09

The Indian automobile put it up for sale figured out the way to face the fancies of the financial
emergency to expose marginally improvement all through economic 2008-09. By way of and big
car deals at ninety seven.23 lakh have become zero.Seventy one percentage from 96.54 lakh
units in 202017-16. On the factor when predominant vehicle markets discovered a 30-40 percent
decay, only a bunch of countries found out how to reveal improvement. A couple of months
previous, India become taking a gander at bad improvement but has became round. It's far in fact
advanced to predicted.

Traveler automobile deals at 15.Fifty one lakh enrolled stage development while enterprise
vehicle offers indicated a 21 percent drop.SIAM has an inspirational standpoint for the

21
contemporary financial yr. Even as it anticipates a 7-eight percent development for the enterprise
vehicle segment, the enterprise frame predicts a three-five percent development for visitor
vehicles. The three-wheeler element might also develop 5-eight percent improvement whilst
bikes may additionally display 3-5 percentage improvement. The visitor vehicle market it has
endured the downturn to a great extent due to marketplace pioneer Maruti Suzuki which holds 48
percentage of the marketplace. The conservative vehicle goliath timed 7.22 lakh gadgets for
2008-09. Nearest rival Hyundai Motor India bought 2.44 lakh vehicles, a development of thirteen
percentage. TATAT cars automobiles' offers became 1.Three percentage at 2.30 lakh devices at
the same time as Mahindra and Mahindra published 2.Five percentage development at 1.06 lakh
units. Maximum premium carmakers saw volumes agreement last economic. Toyota Kirloskar
Motor's numbers fell 15 percent to 46,892 units whilst Ford India's offers were down 17
percentage to 27,976 devices. Honda Siel vehicles India additionally determined a 17 percent
drop at 52,420 units while general cars India become down 8 percent to sixty one,526 devices.
Amongst commercial enterprise vehicle creators, every unmarried extensive player saw
beneficiant fall in volumes. Marketplace pioneer Tata motors with a 60 percentage similarly to
share, demonstrated 22 percentage drop in numbers at 2.34 lakh gadgets whilst TATA vehicles
indicated 37 percentage drop at forty seven,632. Eicher's commercial enterprise quantity fell 37
percentage at 17,341 units and force cars changed into down 28 percent at 7,819 gadgets. "The
shipment development might be no longer going to improve this economic with a purpose to
affect truck deals. Bike offers have become 2.6 percent to 74.38 lakh gadgets. "Legend Honda
has compensated for the disintegration of deals extent for different bike creators together with
Bajaj automobile and TVS Motor organization," said Mr. Matta. Legend Honda timed 36.Forty
lakh gadgets, a improvement of 12.5 percentage. Bajaj automobile's volumes dropped 23 percent
to 12.86 lakh gadgets even as TVS saw a peripheral decay at 11.36 lakh gadgets. Honda bike and
Scooter India's offers flooded 16 percent to 10.15 lakh units. The automobile business in India is
one in all the biggest on earth and one of the quickest developing universally. India's tourist
automobile and business automobile fabricating industry is the seventh largest on earth, with a
yearly introduction of more than 3.7 million units in 2010.[1] in keeping with ongoing reviews,
India is about to surpass Brazil to turn into the sixth biggest tourist vehicle maker on the earth,
developing 16-18 percentage to promote around 3,000,000 devices at some stage in 2011-12.[2]
In 2009, India rose as Asia's fourth biggest exporter of tourist vehicles, at the back of Japan,

22
South Korea, and Thailand.[3]. In 2010, India got here to as Asia's 1/3 biggest exporter of visitor
cars, in the back of Japan and South Korea beating Thailand.

Beginning at 2010, India is home to 40 million visitor motors. Greater than three.7 million
automobile vehicles were introduced in India in 2010 (a spread of 33.9%), making the country
the second one fastest developing vehicle put it on the market inside the international] in keeping
with the Society of Indian automobile producers, every year automobile deals are expected to
increment to 5 million by means of 2015 and in excess of nine million by 2020.[6] via 2050, the
kingdom is relied upon to top the arena in vehicle volumes with kind of 611 million vehicles on
the us of a's streets

Most of India's car fabricating enterprise is primarily based around three bunches within the
south, west and north. The southern bunch close to Chennai is the greatest with 35% of the
earnings proportion. The western center factor near Maharashtra is 33% of the market. The
northern organization is essentially Haryana with 32%.[8] Chennai, is moreover alluded to
because the "Detroit of India"[9] with the India activities of Ford, Hyundai, Renault and Nissan
based in the town and BMW having a get collectively plant on the edges. Chennai represents
60% of the country's vehicle exports.[10] Gurgaon and Manesar in Haryana structure the
northern group in which the nation's largest automobile manufacturer, Maruti Suzuki, is based
totally.[11] The Chakan passage near Pune, Maharashtra is the western bunch with agencies like
fashionable motors, Volkswagen, Skoda, TATA motors, Tata automobiles, Mercedes Benz, Land
Rover, Fiat and force automobiles[12][13] having get together vegetation within the area.
Aurangabad with Audi, Skoda and Volkswagen additionally shapes some portion of the western
bunch. Any other developing organization is in the territory of Gujarat with assembling
workplace of standard automobiles in Halol and in addition made arrangements for Tata Nano at
Sanand. Portage, Maruti Suzuki and Peugeot-Citroen flowers are likewise set to come back up in
Gujarat Kolkatta with Hindustan automobiles, Noida with Honda and Product and management
division

The auto commercial enterprise of India is classified into traveler automobiles, bikes, enterprise
motors and 3-wheelers, with bikes commanding the market. Over 75% of the automobiles
offered are bikes. Almost fifty nine% of those motorcycles offered had been cruisers and

23
approximately 12% have been motorcycles. Mopeds own a touch bit within the motorbike
showcase anyhow; electric bikes are but to go into.

The visitor cars are additionally sorted into traveller vehicles, utility vehicles and multi-cause
automobiles. All vehicle, hatchback, station wagon and sports autos fall beneath traveller cars.
TATAT cars Nano, is the sector's least high-priced traveler automobile, produced with the aid of
Tata cars - a chief automaker of India. Multi-motive cars or human transporters are similar suit
as a fiddle to a van and are taller than a car, hatchback or a station wagon, and are supposed for
maximum severe interior room. Application motors are intended for explicit undertakings. The
vacationer motors generating constitute about 15% of the marketplace in India.

The car commercial enterprise of India is ordered into tourist autos, bikes, enterprise automobiles
and three-wheelers, with motorcycles overwhelming the market. Over 75% of the cars offered
are motorcycles. Nearly fifty nine% of these bikes offered were cruisers

24
 COMPANY PROFILE

TATAT motors limited, consolidated on September 1, 1945, is a vehicle organization.

The organization is interested by production of engine vehicles. The business enterprise's
fragments contain automobile responsibilities and every unmarried different interest. The
organization is locked in primarily inside the be counted of car items comprising of a extensive
variety of business and tourist motors, which includes financing of the cars offered with the aid
of the organisation. The business enterprise advertises its business and traveller cars in
extraordinary countries in Africa, the center East, South East Asia, South Asia, Australia, and
Russia and the Commonwealth of unbiased States countries. The business enterprise works in
more than 160 countries over the sector.

Vehicle Operations

The enterprise's vehicle phase responsibilities include all sporting events identifying with the
improvement, shape, production, accumulating and offer of automobiles, which include car
financing, simply as provide of related components and adornments. Inside the car component,
the enterprise produces and sells traveler automobiles, software vehicles, mild enterprise
automobiles, and medium and overwhelming commercial enterprise motors. The business
enterprise further walls those lessons dependent on the scale, weight, shape and cost of the car.
The business enterprise's subcategories range among and inside Tata and different brand
vehicles and Jaguar Land Rover corporations.

The agency's scope of Tata-marked vacationer vehicles contains the Nano (small scale), the
Indica, the Bolt and the Tiago both within the conservative fragment, the Indigo eCS, and the
Zest (slight sized) inside the automobile classification. The company has extended its traveller
automobile run with distinctive variations and fuel choices. The company's Jaguar Land Rover
tasks have a nearness within the vacationer car type under the Jaguar logo call. There are round
five vehicle traces made below the Jaguar logo name, along with the F-type -seater sports
automobile roadster and convertible XF vehicle, the XJ cantina, the XE sports cantina and
game software automobile (SUV) called the F-tempo.

The organization produces a scope of Tata-marked utility automobiles, which includes the
Sumo and the Safari (SUVs), the Xenon XT (manner of existence pickup), the Tata Aria

25
(hybrid) and the undertaking (multipurpose application car). Below the Safari logo, the
company offers extra than two variations,

As an instance, the Dicor and the Safari Storme. Below the Sumo emblem, the company gives
the Sumo Gold. There are approximately five automobile strains underneath the Land Rover
logo inclusive of the range Rover, the variety Rover sport, the variety Rover Evoque, 6 the
Land Rover Discovery and the Land Rover Discovery game.

The company makes an volume of mild commercial enterprise cars (LCVs), consisting of
pickup vans and little commercial enterprise cars. This similarly consolidates the Tata Ace,
which is a littler than normal truck with generally 0.7 ton payload with specific gas decisions,
the first rate Ace and the ACE Mega both with more than one-ton payload, the Ace Zip, with
around 0.6 ton payload, the Magic and Magic Iris, the 2 of which can be voyager varieties for
enterprise transportation made on the Tata Ace stage, and the Winger. The organization's
commitments inside the LCV transport piece join the Cityride and the Starbus extents of
transports.

The organization delivers an extent of medium and significant business vehicles, which fuse
tractors, transports, tippers and multiaxled cars, with net vehicle weight (GVWs) (tallying
payload) of between eight heaps and 49 tons. Except, thru Tata Daewoo commercial
automobiles (TDCV), the organization creates an collection of vehicles reaching out from 215
team spirit to 560 force, including dump vans, tractor-trailers, blenders and burden cars. The
organisation in like way gives an quantity of transports, which fuses the Semi Deluxe Starbus
ultra settlement Bus and the new Starbus ultra. The business enterprise's volume of transports is
proposed for an volume of occupations, such as as intercity coaches (with both cooled and non-
cooled indulgence types), as faculty transportation and as ambulances.

Each and every other Operation

The agency's all various assignments piece basically consolidates statistics development (IT)
corporations, and gadget devices and making ready plant robotization groups. The company's
reinforcement, Tata technologies confined (TTL), speaks to widespread professional in giving
structuring businesses redistributing, issue headway IT groups solutions for factor lifecycle the
officers (PLM) and employer aid control (ERM), to car, flight and buyer durables makers and
their providers. TTL's agencies furthermore join element shape, evaluation and creation

26
constructing, statistics based making plans and patron courting the officers systems. TTL
furthermore appropriates, realizes and helps PLM things from publications of action companies
round the arena, as an example, Dassault systems and Autodesk.

The organisation competitors Audi, BMW, Infiniti, Lexus, Mercedes Benz, Porsche, Volvo,
Volkswagen, Isuzu, Nissan and Toyota.

Farewell vehicles confined is a number one common car maker of automobiles, application
motors, transports, trucks and watchman motors. As India's finest car affiliation and a part of
the USD 100 billion Tata accumulating, Tata motors has exercises inside the united kingdom,
South Korea, Thailand, South Africa, and Indonesia through a strong basic arrangement of 76
reinforcement and associate institutions, consolidating Jaguar Land Rover in the united
kingdom and Tata Daewoo in South Korea. In India, Tata cars is a marketplace boss in
enterprise motors and many of the pinnacle voyager vehicles creators with 9 million motors on
Indian roads. With structure and R&D centers organized in India, the UK, Italy and Korea, Tata
cars attempts to pioneer new matters that fireplace the innovative mind of GenNext customers.
Abroad, Tata cars, transports, and vehicles are being promoted in Europe, Africa, the center
East, South Asia, South East Asia, South the united states, Australia, CIS and Russia.

Farewell vehicles has a plan of automobile things, going from sub-1 ton to 49 ton net car
weight (GVW) trucks (tallying pickup vehicles) and from little, medium, and significant cars
and tutors to explorer cars. The association's bits consolidate vehicle, and others, which fuse
information advancement (IT) agencies, development tools handing over, system gadgets and
making ready plant computerization recreation plans, excessive-precision tooling and plastic
and digital elements for specific programs, and idea business.

27
 CHAPTER-4

DATA ANALYSIS

28
 DATA ANALYSIS
WORKING CAPITAL ESTIMATION

Current assets Loans & advances FY 2019-18 FY 2018-17 FY 2017-16

Currents assets      
Inventories      
stock in trade 223.94 662.87 1176.85
work in progress 2528.4 4563.76 8714.56
raw materials 7224.96 8145.37 9242.58
stores and spare parts 1131.8 1463.13 1810.73
Total Inventories 11109.1 14835.13 20944.72
Debtors 5516.14 7402.6 14211.12
Cash & Bank balances 1027.1 8042.12 5225.01
(subtracting FCCB issue unutilized   -6910.46 -5272.52
money as it amounts to long term      
liability)      
loans and advances 3249.1 7529.5 8647.1
Net current assets 20901.44 30898.89 43755.43
Current Liabilities FY 2019-18 FY 2018-17 FY 2017-16
       
Sundry Creditors 1476.37 1589.57 3748.82
Creditors for capital expenditure 1456.05 365.64 258.4
other liabilities 342.26 645.34 621.04
unclaimed dividend 21.33 31.66 35.29
sundry deposits 174.14 229.23 321.66
advances from customers 217.21 362.59 73.55
interest accrued but not due on loan 7.04 20.05 32.12
Net current liabilities 3694.404 3244.08 5090.88

29
 INVENTORIES

. Within the context of TATA vehicles the fundamental growth in the gift three monetary years

has been of the inventory

Reasons:
 The pile up of inventory that is utilized in trial run, before hand to be used within the

checking the equipment & the newly hooked up production potential.

 The multiplied stock to supply greater goods as a way to make use of the brand new plant

installation

30
DEBTORS AND AVERAGE RECEIVABLES

CASH AND BANK BALANCES

CASH and financial institution stability as consistent with the balance sheet it is seen to be
growing however from the above chart it's far seen to be reducing. This discrepancy may be
attributed to the fact that stability sheet figures deliver extra CASH balance of unutilized FCCB
trouble proceeds which amount to long term liability as properly. Consequently the actual figures
are distorted because the cash from FCCB trouble needs to be returned and it's miles a sort of
long term loan which the agency has sought for growth cause. As a end result to find the actual
outlay of cash the unutilized money has been subtracted. Also we ought to be aware of the reality
that the FCCB cash can most effective be used for enlargement motive and no longer as money
for normal utility of working

capita Loans & advances are growing at the part of extended advances which are given to pile up
stock while the organization went for the enlargement mode

31
CURRENT ASSETS Includes coins & those belongings which can be without troubles

transformed into cash internal a short length usually twelve months along with marketable

securities , bills receivables, sundry debtors, inventories, art work in development, pay as you go

prices and so forth .The overall cutting-edge assets are the sum of beneath contingency i.E.

Modern-day assets = inventory/ stock + Sundry borrowers + Advances + coins and bank

balances + different cutting-edge assets

32
Conclusions: The fashion of the modern belongings in TATA cars all through the length from

2005-08 are proven within the pie-chart .It's miles evident from the table that the cutting-edge

assets in TATA vehicles has accelerated besides in 12 months 2018-17.

33
CURRENT LAIBILITIES
These are those responsibilities which can be payable within a short period of generally 12
months and includes incredible costs, payments payable, sundry creditors, accrued fees, bank
overdraft, quick term advances, income tax payable.

Conclusion: The fashion of present day Liabilities of TATA vehicles in the course of the period

from 2019-18 are proven within the table. It's far obvious from the desk that it shows growing

tendencies within the yr 2019 to 2018. It shows that the TATA motors has balance in

developments of contemporary Liabilities.

34
 RATIO ANALYSIS

 FY  FY  FY

 
2019-18 2018-17 2017-16
Current assets 29843.52 47163.72 61410.49
current liabilities 7611.44 6597.95 7459.4
quick assets 12759.32 14530.46 20880.64
quick liabilities 7611.44 6597.95 7459.4
Net turnover (sales) 45503 52527.1 81786.93
working capital 22232.08 40565.77 53951.09

average inventory (average of opening & closing stock of year) 8594.615 14476.47 22666.83

cost of goods sold = cost of sales 37398 47018.31 67855.4

total assets 87666 124436.1 138465.6

total annual expenses -(depreciation +debt expenses) 37313.16 27364.06 23898.65

average gross income 97754.89 63633.37 51858

PROFIT before interest and taxes 5998 8120.16 14612.92
Total interest 747.8 2653.75 5214.77
Net Profit after tax (NPAT) 4115 3893.37 7383.56
capital employed (FA+CA-CL ) 89529.68 106917.7 111772.7
investment (FA+CA) 97141.12 113515.7 119232.1
Fixed assets 67297.6 66351.94 57821.59

35
 LIQUIDITY RATIOS

CURRENT RATIO

Modern ratio is described as the relationship among cutting-edge belongings and present day
liabilities. It's far a degree of trendy liquidity & is maximum widely used to make the analysis of
brief time period monetary function of a company. Modern-day ratio is the ratio of contemporary
belongings to modern liabilities. A exceptionally better ratio is a sign that the firm is liquid and
has the capability to pay its modern responsibilities on time. On the other hand a low modern-
day ratio indicates that the

Liquidity function of the firm isn't always desirable and shall now not be capable of pay its
modern liabilities in time. Modern-day Ratio:

The modern-day ratio is calculated by dividing present day assets via present day liabilities:

Current ratio: Current Assets

CURRENT LIABILITY

36
 Current Liabilities

CURRENT CURRENT CURRENT

FIANANCIAL YEAR
ASSETS LAIBILITIES RATIO

FY 2019-18 29843.52 7611.44 3.92

FY 2018-17 47163.72 6597.95 7.14
FY 2017-16 61410.49 7459.4 8.23

CURRENT SCENERIO INTERPRETATION

a. An increase in average receivables which was in sync with increased capacity of

production and also increased sales.

The quick ratio is a more important indicator of liquid position of TATA MOTORS as it hardly

varies from 25% (FY 2018-17) to 33% (FY 2017-16). Obviously the effect of inventories has

been negated.

37
EFFICIENCY RATIO

From the perspective of working capital management we would be discussing three important

ratios they are.

 Sales to working capital ratio

 Inventory turnover ratio

 Current assets turnover ratio.

38
SALES TO WORKING CAPITAL RATIO

Financial Year FY 2019-18 FY 2018-17 FY 2017-16

Sales to working capital ratio 2.04673 1.29486 1.51595

CURRENT SCENERIO INTERPRETATION

As visible from the above desk the ratio has decreased from 2 (FY 2019-18) to 1.29 in (FY 2018-

17) and then multiplied to one.Five (FY 2017-16). This ratio is once more indicative of the

reality that the year in which the enlargement befell the sales did not suit up with the scale of

enlargement. In any other case it might have remained intact and no longer reduced. The slight

increase from 1.29 to at least one.Fifty one is indicative of the reality that the entire effect of

expansion is being slowly found out & income are slowly growing.

39
INVENTORY TURNOVER RATIO

This ration shows the effectiveness and efficiency of inventory management. This ratio is

calculated as fee of products bought: average stock indicates how in a timely fashion the stock is

was bills receivables through income. The higher the stock turnover ratio (also referred to as

inventory pace) the extra the efficient stock management.

FY FY 2018- FY2017-
Financial Year
2019-18 17 16
inventory turnover ratio/ stock
4.35133 3.247914 2.9936
velocity

40
 CURRENT SCENERIO INTERPRETATION

The stock velocity is reducing sooner or later from 4.35 (FY 2018-17) to two.99 (FY 2017-

sixteen) which suggests inefficiency on the part of stock control.

Partly the motive for the autumn can be attributed to stocking up of inventory for the trail run &

using them in testing the enlargement mode machinery.

FY 2019-
Financial Year FY 2018-17 FY2017-16
18
current assets turnover ratio 1.52472 1.1137183 1.331807

CURRENT ASSETS TURNOVER RATIO

This ratio is indicated by sales upon present day belongings. This ratio shows the efficiency with

which the cutting-edge property become sales & higher modern-day property turnover ratio

implies by means of & massive a more efficient use of price range in modern belongings. As a

result, a excessive turnover charge shows decreased lock up of price range in modern-day

belongings. An evaluation of this ratio over a duration reflects working capital management of

the company

41
 .

CURRENT SCENERIO INTERPRETATION

FY FY FY2017
Financial Year
2019-18 2018-17 -16
current assets turnover ratio 1.52472 1.1137183 1.331807

The ratio is slightly lowering from 1.Fifty two (FY 2019-18) to one.11 (FY 2018-17) & then increasing to

at least one.33 (FY 2017-sixteen) which indicates that sales increase isn't matched by means of the

increase in present day assets within the expansion section of TATA cars . The motive may be properly

attributed to the piling up of trial stock and now not complete use of the elevated manufacturing capacity

42
OPERATING RATIOS

 Working ratio

 Interest coverage ratios

WORKING RATIO

A ratio used to measure a agency's capacity to get better running prices from annual revenue.

This ratio is calculated through taking the company's overall annual charges (except for

depreciation and debt-associated costs) and dividing it via the annual gross income. A working

ratio beneath 1 means that the employer is capable of get better running charges, whereas a ratio

above 1 displays the enterprise's incapability to accomplish that.

FY 2018-
Financial Year FY 2019-18 FY2017-16
17

working ratio 0.381701 0.4300269 0.460848

43
CURRENT SCENERIO INTERPRETATION

The ratio constantly has been under 1 which means corporation can very well take out its

operating fees, even though the margin of consolation is slightly decreasing due to the boom in

fees of the TATA vehicles.

44
 CHAPTER-5

FINDINGS, SUGGESTIONS, CONCLUSIONS

45
 FINDING AND SUGGESTION

Working capital control is an vital aspect of any enterprise. Each enterprise situation must have adequate

operating capital to run its commercial enterprise operation. Each problem must have neither redundant

of excess working capital nor insufficient or scarcity of working capital. Each excess in addition to short

operating capital positions are awful for any business

• Making to be had just good enough quantum of running capital. A number of the existing

machinery is new with absolute device’s requiring modernization and rebuilding.

• The organisation need to administrate their credit score on the idea of sure nicely identified and

mounted principle of credit score administration.

• The organisation should preserve an finest degree of coins within the commercial enterprise in an

effort to preserve a right liquidity inside the commercial enterprise.

46
 CONCLUSION

The 3 elements of working capital control are cash control receivable management and

inventory management. If a finance supervisor continues those three factors of working capital

management properly approach the priority will get dramatic development of their sales extent

and additionally in business. Working capital guidelines of a company have a incredible effect

on its profitability, liquidity and dependent fitness of the organization.

Every issue ought to undertake some new tread control strategies in an effort to help in greater

productiveness, inventory optimization and also higher operating capital control. So, it is

mentioned that running capital is a way to run commercial enterprise easily and profitability. As

a consequence, the idea of operating capital has its own important in a going concern.

Precise control of working capital is part of correct finance control powerful use of working

capital will contribute to the operational efficiency of a branch; gold standard use will assist to

generate maximum return.

TATA cars is likewise using “SAP” 6.0 versions which could be very advanced to do every

transaction of any enterprise. ‘SAP’ 6.0 additionally relevant for e-transaction.

47
 BIBLOGRAPHY

 Financial Management theory and practice by Prassanna Chandra

 Financial Management theory and practice by Shashi .K. Gupta & R.K. Sharma.

 Www. Google.com, www. Wikepidia.com

48