Contents of the Dissertation

S. No Chapter

1 Introduction

2 Organizational Profile

3 Review of Literature

4 Research Methodology

(i) Objectives of the Study

(ii) Hypothesis of the Study

(iii) Methods of Data Collection

(iv) Research Design, Sampling, Size, Type & Techniques.

(v) Limitation of the Study

5 Data Analysis and Interpretation

6 Observation and Findings

7 Conclusion

8 Suggestions

i. Bibliography & Reference

ii. Appendix

1
INTRODUCTION

2
 INTRODUCTION
Working capital

Working capital (also known as net working capital) is a financial metric which represents the
amount of day-by-day operating liquidity available to a business. Along with fixed assets such as
plant and equipment, working capital is considered a part of operating capital. It is calculated as
current assets minus current liabilities. A company can be endowed with assets and profitability,
but short of liquidity, if these assets cannot readily be converted into cash.

Working capital deficiency

When current assets are less than current liabilities, an entity has a working capital deficiency
also called a working capital deficit.

CA-CL=WIC

Calculation

Current assets and current liabilities include three accounts which are of special importance.
These accounts represent the areas of the business where managers have the most direct impact:

 accounts receivable (current asset)

 inventory (current assets), and
 accounts payable (current liability)
The current portion of debt (payable within 12 months) is critical, because it represents a short-
term claim to current assets and is often secured by long term assets. Common types of short-
term debt are bank loans and lines of credit.

An increase in working capital indicates that the business has either increased current assets (that
is received cash, or other current assets) or has decreased current liabilities, for example has paid
off some short-term creditors.

3
Working capital management

Decisions relating to working capital and short term financing are referred to as working capital
management. These involve managing the relationship between a firm's short-term assets and its
short-term liabilities. The goal of Working capital management is to ensure that the firm is able
to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term
debt and upcoming operational expenses.

Decision criteria

By definition, working capital management entails short term decisions - generally, relating to
the next one year period - which is "reversible". These decisions are therefore not taken on the
same basis as Capital Investment Decisions (NPV or related, as above) rather they will be based
on cash flows and / or profitability.

One measure of cash flow is provided by the cash conversion cycle - the net number of days
from the outlay of cash for raw material to receiving payment from the customer. As a
management tool, this metric makes explicit the inter-relatedness of decisions relating to
inventories, accounts receivable and payable, and cash. Because this number effectively
corresponds to the time that the firm's cash is tied up in operations and unavailable for other
activities, management generally aims at a low net count. In this context, the most useful
measure of profitability is Return on capital (ROC).

The result is shown as a percentage, determined by dividing relevant income for the 12 months
by capital employed; Return on equity (ROE) shows this result for the firm's shareholders. Firm
value is enhanced when, and if, the return on capital, which results from working capital
management, exceeds the cost of capital, which results from capital investment decisions as
above. ROC measures are therefore useful as a management tool, in that they link short-term
policy with long-term decision making i.e. economic value added (EVA).

4
Management of working capital

Guided by the above criteria, management will use a combination of policies and techniques for
the management of working capital. These policies aim at managing the current assets (generally
cash and cash equivalents, inventories and debtors) and the short term financing, such that cash
flows and returns are acceptable.

 Cash management. Identify the cash balance which allows for the business to meet day to
day expenses, but reduces cash holding costs.

 Inventory management. Identify the level of inventory which allows for uninterrupted
production but reduces the investment in raw materials - and minimizes reordering costs -
and hence increases cash flow; see Supply chain management; Just In Time (JIT);
Economic order quantity (EOQ); Economic production quantity (EPQ).

 Debtor’s management. Identify the appropriate credit policy, i.e. credit terms which will
attract customers, such that any impact on cash flows and the cash conversion cycle will
be offset by increased revenue and hence Return on Capital (or vice versa); see Discounts
and allowances.

 Short term financing. Identify the appropriate source of financing, given the cash
conversion cycle: the inventory is ideally financed by credit granted by the supplier;
however, it may be necessary to utilize a bank loan (or overdraft), or to "convert debtors
to cash" through "factoring".
 Implications on M&A: The common commercial definition of working capital for the
purpose of a working capital adjustment in an M&A transaction (ie for a working capital
adjustment mechanism in a sale and purchase agreement) is equal to:
 Current Assets - Current Liabilities excluding deferred tax assets/liabilities, excess cash,
surplus assets and/or deposit balances.
 Cash balance items often attract a one-for-one purchase price adjustment.

Working Capital of The Ultra Light Technology

Concept of Working Capital:

As we know that the amount of cash required for the day to day working of an organization is
called working capital. These are two concepts of working capital:

5
 Gross Working Capital

 Net Working Capital

1) Gross Working Capital:

It refers to the firm’s investment in total current or circulating assets.

2) Net Working Capital:

The term “net working capital” has been defined in two deferment ways:

 It is the excess of current assets over current liabilities. Some people define it as only
the deference between current assets and current liabilities.

 It is that portion of firm’s current assets which is financed by long term funds.

Source of working capital

The working capital requirements should be met both from short-term as well as long term
source of funds.

The financing of working capital through short term source of funds has the benefits of lower
cost and establishing close relationship with the banks.

Financing of working capital from long term resources provides the following benefits:

 Reduce the risk, since the need to repay loans at frequent intervals is eliminated.

 It increases liquidity since the firm has not to work about the payment of these funds in the
near future.

The finance manager has to make use of both long term and short term sources of funds in a way
that the over all lost of working capital is the lowest and the funds are available on time and for
the period they are really needed.

6
Managing of cash
It is the duty of the finance manager to provide adequate cash to all segments of the organization.
He has also to ensure that no funds are blocked in idle cash since this will involve cost in terms
of interest to the business. A sound cash management scheme, therefore, maintains the balance
between the twin objectives of liquidity and cost.

Bank payments through bank transfer

Process brief

This process lays down the procedure to be followed in respect of bank payments through bank
transfers.

The procedure for verification and approval of the bills/employee claims has been described in
the relevant manuals.

Payment through bank transfer is effected through a schedule, supported by a cheque.

While processing the payments the checks and controls to be exercised and the procedure to be
followed for payments through bank transfer shall be the same as described in Process No. 1
“Bank payment and Cancellation of Cheques”. In addition the Cash and Bank Section should
ensure the following:

 The bank schedule is supported by a cheque. In case the concerned branch is

computerized a soft copy of the schedule may be sent to the bank.

 The official/(s) approving the BPV also approves the bank transfer advice.

 A periodicity is fixed for bank transfers. A weekly payment cycle may be

followed.

 The Bank Book is reviewed with the vouchers and the supporting documents thereof as
per circulars/guidelines issued from time to time in this respect.

7
Departments/sections responsible

 Finance and Accounts Department

 Cash and Bank Section.

Bank payment - Accounting for bank advices

Process brief

This process lays down the procedure for accounting of bank advices.

All bank advices are to be received by the Cash and Bank Section only. Cash and Bank Section
would in turn forward the same to the concerned section through the Bank Advice Register.

Accounting of the advices is to be done by the concerned sections.

Departments/sections involved in the process

 Finance and Accounts Department

Cash payments

Process brief

This process lays down the procedure to be followed in respect of cash payments to employees.
The concerned section (i.e. Establishment Finance) is to process the bills and authorize the
payment as per the Personnel Accounting manual.

The Cash and Bank Section is to release payments based on the duly authorized cash payment
vouchers (CPV).

8
Cash and Bank Section shall not prepare any cash payment voucher other than for utilization of
revenue stamps on receipt of money on company’s account/deposit of excess cash and shall not
modify any field of the vouchers (i.e. party name and code, particulars, amount, etc).

While processing payments, the Cash and Bank Section is to ensure that:

 No cash payment is made to outside parties.

 There are no manual changes/amendments on the CPV.

 Cash payment is as per the company’s policy and is not in contravention of the provisions
of the Income Tax Act, 1961.

 Payments are made only against the original supporting documents. In case the original
Supporting documents are lost/misplaced in finance – approval of the HOD (F) to release
the payment is enclosed with the CPV.

 Payment in cash is released to the concerned employee after obtaining his acquaintance
or to his authorized personnel (written letter of authority) in line with the guidelines
issued from time to time in this respect.

 All payment vouchers and supporting documents are to be defaced as ‘paid’ after
payments have been released.

The CPV should bear two serial numbers:

 Sectional serial number i.e. the serial number of the section preparing the CPV.

 CVR number i.e. the continuous number allotted by the Cash and Bank section at the time of
releasing payments.

Departments/sections responsible

 Finance and Accounts Department

 Cash and Bank Section
 Establishment Finance

Withdrawal of cash from bank

Process brief
9
This process lays down the procedure for withdrawal of cash by The Ultra Light Technology
from bank. The BPV for withdrawal cash is prepared by the Cash and Bank Section based
on the estimated requirements (for the period till the next banking hour) keeping in view the
minimum cash balance that is to be maintained.

The Cash and Bank Section should ensure the following:

 BPV for withdrawal of cash from bank is prepared only in favor of the cashier.

 The total amount of cash in hand does not exceed the cash insurance limit. If it is
expected to exceed, an insurance cover for the additional amount is to be taken or the
excess amount is to be deposited with the bank. The cash insurance cover is periodically
reviewed.

Cash and Bank receipts

Process brief

This process lays down the procedure to be followed in respect of miscellaneous receipts
from third Parties (in the form of cheques/drafts only) and from employees.

In case of cash receipts the concerned section is to prepare a CRV and the cashier is to
accept the cash based on the CRV. The CRV shall bear two serial numbers:

 Sectional serial control number i.e. the serial number of the section preparing the CRV.

 Cash Voucher Reference (CVR) number i.e. the continuous number allotted by the Cash
and Bank.

Sections at the time of receiving the payment Cheques/drafts are to be received directly by
the Cashier. However, in case of EMD in the form of draft/cheques (received along with the
tender documents) the same is to be brought to the Cash and Bank Section along with a
statement of the same by the finance representative associated in the bid opening.

10
 The Cash and Bank Section is to ensure that:

 The cheques/drafts are valid.

 An acknowledgement is issued for all receipts which is serially controlled.

 The receipt issued indicates that the cheque is subject to realization.

 Cheques/drafts are promptly deposited with the bank.

Departments/sections involved in the process

 Finance and Accounts Department

 Cash and Bank Section

 Establishment and bill passing sections

Remittances to various units

Process brief

This Process lays down the procedure to be followed at CC for remittances of funds to the
various units. This activity shall be carried out by the Cash and Bank Section at CC, based
on the request for funds received from the units. All units are required to forward a weekly
request (separately for Construction and Operations activities) For funds to the Treasury
section. Based on the request, the Cash and Bank Section shall remit the funds to the
respective units in installments spread over the next week. While discharging this function,
it is to be ensured that:

 Funds are sent to the units in a manner that there are minimal idle funds at the units

 Funds released to the units are within the approved budget for the respective units

 Funds remitted to the units are to be monitored separately for the construction and
operation phases

Accounting for Dishonored cheques

Process brief

11
 This Process lays down the procedure to be followed in accounting for dishonored cheques.
On receipt of intimation from bank about dishonor of a cheque, the concerned
employee/party account Should be debited immediately. The employee/party should be
advised to make payment by demand draft.

Departments/sections involved in the process

 Finance and Accounts Department

 Cash and Bank Section

 Concerned Section

Bank Reconciliation Statement

Process brief

This Process lays down the procedure for preparation of bank reconciliation statement
(BRS). BRS shall be prepared monthly for all bank accounts and it should be put up for
review of HOD (F) by the 7th of the following month.

Departments/sections involved in the process

 Finance and Accounts Department

 Book Section

Key controls to be exercised in this process are:

 BRS should be prepared monthly for all the bank accounts.

 All cheques issued but not presented for six months should be transferred to the stale
cheques account Issue of fresh cheque against a stale cheque should be approved by the Section-
in-charge.

Deposit of TDS

Process brief

12
This Process lays down the procedure for deposit of TDS with the appropriate authorities.

Departments/sections involved in the process

 Finance and Accounts Department

 Cash and Bank Section

 Works Bill Section

 Stores Bill Section

 O&M and Misc. Bills Section

The Cash and Bank Section should ensure the following:

 TDS is deposited within the time frame stipulated by the relevant statute.

 Receipted copy of the challan is obtained and forwarded to the section concerned for
filing of return/Records.

Physical verification of cash and cash equivalents

Process brief

This process lays down the procedure for physical verification of the cash balance in hand
including revenue stamps.

The cash and cash equivalents should be physically verified and tallied daily by the cashier.

An official (other than from the Cash and Bank Section) designated by the HOD (Finance)
should verify the cash balance periodically (at random at least once in a month).
Mutilated/spoilt currency should be replaced from the bank periodically.

Custody and issue of cheque books and pre-printed stationery

Process brief

This process lays down the procedure for receipt, custody and issue of cheque stationery
(including cheque books and MICR computerized stationery including that with pre-printed

13
 signatures). THE ULTRA LIGHT TECHNOLOGY uses cheque books (for hand-written
cheques) and computerized stationery (for computer generated cheques).

At CC, cheque stationery with pre-printed signatures is used for payment of lease rent,
interest warrants for Power Bonds etc.

While discharging this function, the Cash and Bank Section should ensure the following:

 The cheque stationery that has not been issued is kept in a cash chest and handled by the
cashier and the I/C Cash and Bank Section. The stocks are physically verified at the
month-end.

 Cheque stationery issued but unused at the end of the day is kept in the cash chest. Such
unused cheque stationery is physically verified daily.

 All cheque stationery drawn from the bank is entered in the stationery register.

 Section I/C daily conducts checks in respect of the safe keeping and records of unused
cheque books.

 The cheque stationery is kept in a place of security under lock and key. It is periodically
verified whether all unused forms are intact and promptly intimate to the bank the loss, if
any, of the unused cheque forms/ cheques requisition slip.

 The cheques contained in the cheque book are counted before the issue/use of the cheque
books.

 At the time of closure or transfer of bank account all unused cheques and cheque book
requisition forms are always returned to the bank after defacing them as “CANCELLED
and VOID”.

 No blank cheques from the cheque books are given to anyone.

 All alterations on the cheque are confirmed by the full signature of the drawer.

 Indelible ink/reverse carbon are used to prevent unauthorized alterations

The amount printed on the cheque to be protected by pasting a slip of Cellophane paper
on the face of the cheque.

14
ORGANIZATIONAL
PROFILE

15
 ORGANIZATIONAL PROFILE

The Ultra Light Technology

The Ultra Light Technology. Vidisha is a well established and systematically organized
company engaged in the manufacture of LED intensive market survey to cater to the needs of
high demand areas.
The promoter and his team had the business acumen, professional background obtained
after serving a long stint in LED industry, sound business ethics, skills and had brought this to
bear in the discipline and systems required to maintain and sustain quality in such a mass
production.
The company utilizing the skilled low-cost manpower strength that offer, flavors India
has staff strength of 100 personnel headed by the board of directors, who control the different
divisions of the organization.

Ultra Light Technology is an innovative, leading German company operating in the

development and manufacture of LED lighting.
Founded in 1988, Ultra Light Technology is not only active in the general lighting sector, but has
already specialized exclusively in LED technology since 2005.

Ultra Light Technology is therefore one of the pioneers of the LED lighting industry.

Our passion and enthusiasm is LED. We combine experience, accuracy, technological progress
and constant quality control in accordance with the latest standards to offer innovative and high-
quality products at an excellent price and quality level.

Our high quality LED luminaries, controls and components are offered worldwide under the
well-known brand LED LIGHT.

The product range includes a wide range of flexible LED strips, matching innovative profiles,
interior lighting and exterior lighting for commercial and industrial buildings, retail, hotels,
restaurants, etc.

16
The product portfolio is rounded off by a large number of intelligent controls for modern and
comfortable light management.

Our extensive range of products, the fast delivery times, the outstanding price-performance ratio
and the option of manufacturing and packaging according to your requirements make us your
ideal partner.

Using the LED technology our products offer the perfect lighting solution for indoor and
outdoor applications and combine the advantages of LED’s. Compared to traditional lamps they
emit no UV or IR radiation, have a very low heat generation, are shock proof, have a long
lifetime as well as a very low power consumption and contain no mercury. As RGB version 16,7
million colours and seamless colour changes are possible. This offers unlimited possibilities for
creating atmosphere with light.

Our LED products are suitable for the use in hotels, offices, shops, boutiques, museums,
restaurants, bars, clubs, wellness centres, fair stands, storage buildings, production plants, ...

Quality:

For the Flavors India with 30 years of standing, quality is the day to success. Our plant
has fully equipped quality control laboratories where the raw materials, in process and finished
products are rigorously tested for their quality standards.
Our qualified manufacturing and technical personnel deal with material handling, shop
floor and production activities. We maintain stringent quality control measure and hygienic
condition as per the specification of Bureau of India Standards. The research and development
wing devotes its fulltime towards better product development, cost .effective methods and new
products.
Ultra Light Technology is an ISO 9001_2000 certified company ensuring the quality
systems practiced .with a commitment towards safe environment we have development an
efficient Effluent Treatment Plant fulfilling the pollution control Board needs.

17
CUSTOMER BASE:

Our motto being “customer is our Boss” a good amount of time and skill is put in and
translated into action by formulating new products as demands by the customers.
Our products command its reputation in the market for the past 3decades and more in
leading food processing companies throughout the country and overseas.
Our customer service is always prompt and sure as the” sun –rises and sun set”

AWARDS:

It was a moment of pride when government of bestowed on us thrice the Good Industries
Relations Award. We promise to march towards the future with the same zeal and motive.

18
OUR PRODUCTS

19
 ORGANISATIONAL CHART

MANAGING DIRECTOR

Department INCHARGE

QUALITY
PRODUCTION DEPARTMENT CONTROL FINANCE DEPARTMENT MARKETING DEPARTMENT

SENIOR
SENIOR ASSISTANT
ASSISTANT
INCOME TAX
ACCOUNTS

JUNIOR
JUNIOR ASSISTANT
ASSISTANT

20
FINANCE DEPARTMENT:

The accounts department of Ultra Light Technology functions so as to keep as a system

record of the daily events of the business. It maintain records of all financial transaction to find
out the profit and loss according during the year and to financial status of the company, which
helps them to take quick and correct policy decision.

OBJECTIVE OF FINANCE DEPARTMENT:

 To determine the financial status of the company balance sheet, profit and loss accounts.
 To help the management to analyses the financial standard of the company so that they
can take quick correct decision.
 To provide useful information to management.
 Analysis the cash flow of the company it will useful for new ventures.

SYSTEM OF ACCOUNTING:
All the transaction in the company is enter into to the system. There is more lapse of
time in the company to do the other work. The daily transaction of the company is registered
under the computer. The invoice, Quotation etc are sending through the system.

FUNCTING FINANCE DEPARTMENT OF THE FIRM

The work performed by the account department has follows.
1. Preparation of cash and bank vouchers ( both debtors and creditors)
2. Maintaining cash and bank book.
3. Bank reconciliation statement.
4. Preparing purchasing journal, salaries, wages etc.
5. Preparing debtors and creditors notes.
6. Posting journal to journal books.
7. Maintaining general ledger accounts.
8. Maintaining subsidiary books.
9. Preparing trial balance, profit and loss account and balance sheet.

21
 REVIEW
OF LITERATURE

22
 REVIEW OF LITERATURE

While research of Ratio analysis I have been read some articles, Review of literature some
mentioning here:

John T Grady, April 2010, financial analysis is the cornerstone of credit risk assessment.
Commercial lenders and analysts study financial statements and perform ratio analysis to identify
and understand the risks in lending to a business. The business's debt service
coverage ratio (DSCR) is one of the key ratios to calculate and analyze as a measure of the
borrower's ability to repay debt. The DSCR measure used by many bankers is the traditional debt
service coverage ratio (TDSCR). A second, more detailed method to calculate DSCR is to use
the information reported in the borrower's UCA cash flow statement (UCACFS). The purpose of
this article is to apply these two methods for calculating DSCR. It also will highlight the
differences between the two DSCR calculations and show the added benefit that the UCA-based
calculation can bring to the credit analysis. The important point is that when analyzing a credit
and the debt service ability; do not stop at the traditional DSCR.

Sam Subramanian, May 2010, Fundamental equity traders rely on factors such as earnings,
earnings growth or valuation ratios to select securities. Technical traders use moving averages,
trading volume patterns or price breakouts. One method is not necessarily better than the other;
each has its merits. By leveraging the strengths of both of these styles, people can not only
increase their success rate in selecting securities, but also improve their portfolio management.
To understand the nuances of the two methods, it helps to think of a company and its stock as
two separate entities. This article has demonstrated how technical analysis can be used to
supplement the fundamental assessment of a company. Ultimately, that technical analysis can
help to make trading decisions. These analyses also can be combined when making sale
decisions, as positions are unwound. By spreading buy and sell decisions over wider periods and
price points, investors can seek to earn higher risk-adjusted returns

Kannika Damrongplasit, July 2010, this article uses the 2001 National Drug Strategy
Household Survey to assess the impact of marijuana decriminalization policy on marijuana

23
smoking prevalence in Australia. Both parametric and nonparametric methods are used. The
parametric approach includes endogenous probit switching, two-part, sample selection, and
standard dummy variable models, while the nonparametric approach uses propensity score
stratification matching. Specification analyses are also conducted. A nonparametric kernel-based
test is constructed to select between parametric and nonparametric models, and the
likelihood ratio test is used to choose among parametric models. Our analyses favor the
endogenous switching model where decriminalization increases the probability of smoking by
16.2%.

John F Wasik, Aug 2010, History shows that you can earn great returns buying stocks with sky-
high share prices. The key is to avoid confusing a stock's price with its value. As of June 4, 39
stocks trading in the US fetched $100 or more. This article focuses on five with bright prospects.
Google sells for 18 times estimated 2010 earnings of $27.82 per share. As recently as 2007,
Google's average price-earnings ratio for the year was over 40. Apple sells for 19 times
estimated earnings of $13.38 per share for the year that ends this September. The company holds
$23 billion in cash and has no debt. At $189, AutoZone shares sell at 13 times estimated earnings
of $14.61 per share for the year that ends this August. The Washington Post Co sells at 22 times
estimated 2010 earnings of $20.58 per share, a big jump from the depressed levels of 2008 and
2009. Morningstar estimates Wasco Financial Corp's fair value at $455 per share.

Robert B Durand, June 2010, In addition to its role as the optimal ex ante combination of risky
assets for a risk-averse investor, possessing the highest potential return-for-risk trade-off, the
tangency or maximum Sharpe ratio portfolio in the Markowitz [1952, 1991] procedure plays an
important role in asset management because it minimizes the probability that a future portfolio
return falls below the risk-free, or reference, rate; this is a kind of Value at Risk (VaR) property
of the portfolio. In this article the authors demonstrate the way this VaR, and related quantities,
vary along the efficient frontier, emphasizing the special role played by the tangency portfolio.
The results are illustrated with ananalysis of the market crash of October 1987, as an episode of
extreme negative market movements, in which the tangency portfolio performs best (loses least!)
among a variety of portfolios.

24
Suleyman Basak,july 2010, This article analyses the implications of money illusion for investor
behavior and asset prices in a securities market economy with inflationary fluctuations. We
provide a belief-based formulation of money illusion which accounts for the systematic mistakes
in evaluating real and nominal quantities. The impact of money illusion on security prices and
their dynamics is demonstrated to be considerable even though its welfare cost on investors is
small in typical environments. A money-illusioned investor's real consumption is shown to
generally depend on the price level, and specifically to decrease in the price level. A general-
equilibrium analysis in the presence of money illusion generates implications that are consistent
with several empirical regularities. In particular, the real bond yields and dividend
price ratios are positively related to expected inflation, the real short rate is negatively correlated
with realized inflation, and money illusion may induce predictability and excess volatility in
stock returns. The basic analysis is generalized to incorporate heterogeneous investors with
differing degrees of illusion.

Paul Cullinane, June 2010, This article outlines the new methodology for Financial
Intermediation Services Indirectly Measured (FISIM), introduced in Blue Book 2008, on the
sector accounts. In particular the impact on interest payments and receipts, and key aggregates
such as household saving ratio and net lending/borrowing.

25
 RESEARCH
METHODOLOGY

26
 RESEARCH METHODOLOGY
(I) OBJECTIVES OF THE STUDY
 Objective of Study

Primary Objective :
 To study the working capital management of the concern so as to analyze and interpret
the inventory position of the The Ultra Light Technology
 To assess the strength and weakness of the concern in various areas.

Secondary Objective :
 To assess the overall efficiency and performance of the company.
 To analyze the liquidity position of the company.
 To study the uses and sources of working capital.

Scope Of The Project

The scope of this research study relates to the working capital management of The Ultra Light
Technology The analysis of working capital has made against the financial performance
status in the present day world. The important aspects of working capital management, which
have received adequate attention, are production policies, size of the business, and length of
manufacturing cycle, credit policy, and turnover of circulating capital, economies of scale,
current asset policies and other factors.
RESEARCH METHODOLOGY
This type of analysis helps the management of the company to plan its future polices according
to the external environment. Any sound research must have an proper design to achieve the
required result, this study is constructed on the basis of descriptive design.

 The above parameters are used for critical analysis of financial position. With the evaluation of
each component, the financial position from different angles is tried to be presented in well
and systematic manner. By critical analysis with the help of different tools, it becomes clear
how the financial manager handles the finance matters in profitable manner in the critical
challenging atmosphere, the recommendation are made which would suggest the

27
 organization in formulation of a healthy and strong position financially with proper
management system.

It is a step-by-step logical process, which involves:

 Defining a problem.
 Laying the objectives of research.
 Source of data.
 Method of data collation.
 Tabulation of data.
 Data analysis and processing.
 Conclusion and recommendation.
Descriptive research
Descriptive research studies are those study which are concerned with describing the character.
It is move valuable because researcher has no control over the variables what has happened
or what is happening is considered so it is very accurate so we can say it is more valuable.
In this study, for practical reasons, a descriptive approach would be used, considering the
proposed study would embrace the above characteristics of a descriptive study.
Types of Research
In a research when we talk of research methodology, we not only take Research methodology,
but also considered the logic behind the method we used in the contest of our research study
and explain why we are using a particular method. This way we can be stated as under.
1. It relies on empirical evidence
2. it utilize relevant concepts
3. it is committed to only objective consideration
4. it result into probabilistic prediction
In a method particular research problem involve usually the consideration of the followings
means of obtaining the information
Explanation of the way in which related means of obtaining information will be organized and
the reasoning leading to the selection Investing the reasons for human behavior i.e. people
thinks or do certain thinks so we comes for quantitative reaches
Research Design: This research is a descriptive research.

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 Descriptive research studies are those study which are concerned with describing the character.
It is move valuable because researcher has no control over the variables what has happened
or what is happening is considered so it is very accurate so we can say it is more valuable.
. In a research when we talk of research methodology, we not only take Research methodology,
but also considered the logic behind the method we used in the contest of our research study
and explain why we are using a particular method. This way we can be stated as under.
 It relies on empirical evidence
 it utilize relevant concepts
 it is committed to only objective consideration
 it result into probabilistic prediction
In a method particular research problem involve usually the consideration of the followings the
means of obtaining the information Explanation of the way in which related means of
obtaining information will be organized and the reasoning leading to the selection Investing
the reasons for human behavior i.e. people thinks or do certain thinks so we comes for
quantitative reaches

1. TYPE OF THE STUDY:

DESCRIPTIVE STUDY:
The type of the study or research used in this project is a descriptive research design. It mainly
involves surveys and facts findings enquiries of different kinds. The main objective of
descriptive research is to describe the state of affairs as it exists at present. The major purpose of
descriptive research is a description of the state of the affairs, as it exists at present. Thus a
descriptive study is a fact finding investigation with adequate interpretation. It is the simplest
type of research. It focuses on particular aspects or dimensions of the problem studied. It is
designed that it gathers descriptive information and provides information for formulating more
sophisticated studies. There is a cause effective relationship.
The criteria for selecting this particular design are that, the problem of the project must be
described and not arguable. The data collected is amenable to statistical analysis and has
accuracy and significance. It is possible to develop to valid standards of comparison. It tends
itself to the verifiable procedure of collection and analysis of data. Descriptive study objective

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 aim at identifying the various characteristics of a company problem under study. It can reveal
potential relationships between variables with exploratory research.

2. TYPE OF DATA:
Data Collection:
Data is collected entirely through secondary source because inventory management is to be
analyzed with the previous fact &records only . Primary data cannot be gathered and
published data as a secondary source is used with the help of a annual reports, magazines,
records & files of the organization.

SECONDARY DATA:
The data which is used for the research is secondary data. The secondary data is the data which is
duplicate of primary data. “The data (published or unpublished) which have already been
collected and processed by some agency or person and taken over from there and used by any
other agency for their statistical work are termed as person and taken over from there and used
by any other agency for their statistical work are termed as secondary data” as far as second
agency is concerned. The second agency if and when it publishes and files such data becomes the
secondary source to anyone who later uses these data.
In other words secondary source is the agency who publishes for use by others the data which
was not originally collected and processed by it.

3. SOURCES OF DATA:

Unpublished sources:
 The data can be governments or private offices can be collected from these are unpublished data.
 The research work, the secret documents.

Published sources:
 Central and state government publication publishes the various statistics like crop production,
population, statistic, wages expenses.

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 The commerce association, commerce and trade association, Indian chamber of commerce
federation are publishes several data.
 News paper, journals, periodicals etc. publishes the several data.
 Some private organization, research berceuse, universities publishes several data’s.
Data Presentation:
Data is gathered & analyzed by using various tools & techniques of inventory management and
hence the data is presented by graphical method by using bar graphs.

ANALYSIS OF FINANCIAL STATEMENTS

  FINANCIAL STATEMENTS:

Financial statement is a collection of data organized according to logical and consistent

accounting procedure to convey an under-standing of some financial aspects of a business
firm. It may show position at a moment in time, as in the case of balance sheet or may reveal
a series of activities over a given period of time, as in the case of an income statement. Thus,
the term ‘financial statements’ generally refers to the two statements

(1) The position statement or Balance sheet.

(2) The income statement or the profit and loss Account.

OBJECTIVES OF FINANCIAL STATEMENTS:

According to accounting Principal Board of America (APB) states

The following objectives of financial statements: -

1. To provide reliable financial information about economic resources and obligation of a

business firm.

2. To provide other needed information about charges in such economic resources and
obligation.

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LIMITATIONS OF FINANCIAL STATEMENTS:

Though financial statements are relevant and useful for a concern, still they do not present a final
picture a final picture of a concern. The utility of these statements is dependent upon a
number of factors. The analysis and interpretation of these statements must be done carefully
otherwise misleading conclusion may be drawn.

Financial statements suffer from the following limitations: -

1. Financial statements do not given a final picture of the concern. The data given in these
statements is only approximate. The actual value can only be determined when the business
is sold or liquidated.

2. Financial statements have been prepared for different accounting periods, generally one year,
during the life of a concern. The costs and incomes are apportioned to different periods with
a view to determine profits etc. The allocation of expenses and income depends upon the
personal judgment of the accountant. The existence of contingent assets and liabilities also
make the statements imprecise. So financial statement are at the most interim reports rather
than the final picture of the firm.

3. The financial statements are expressed in monetary value, so they appear to give final and
accurate position. The value of fixed assets in the balance sheet neither represent the value
for which fixed assets can be sold nor the amount which will be required to replace these
assets. The balance sheet is prepared on the presumption of a going concern. The concern is
expected to continue in future. So fixed assets are shown at cost less accumulated
deprecation. Moreover, there are certain assets in the balance sheet which will realize nothing
at the time of liquidation but they are shown in the balance sheets.

4. The financial statements are prepared on the basis of historical costs Or original costs. The
value of assets decreases with the passage of time current price changes are not taken into
account. The statement are not prepared with the keeping in view the economic conditions.
the balance sheet loses the significance of being an index of current economics realities.

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 Similarly, the profitability shown by the income statements may be represent the earning
capacity of the concern.

 FINANCIAL STATEMENT ANALYSIS

It is the process of identifying the financial strength and weakness of a firm from the available
accounting data and financial statements.

CALCULATIONS OF RATIOS
Ratios are relationship expressed in mathematical terms between figures, which are connected
with each other in some manner.
CLASSIFICATION OF RATIOS
Ratios can be classified in to different categories depending upon the basis of classification

The traditional classification has been on the basis of the financial statement to which the
determination of ratios belongs.

  These are:-

        Profit & Loss account ratios

        Balance Sheet ratios

        Composite ratios

RESEARCH DESIGN

For the proper analysis of data simple statistical techniques such as percentage were use. It
helped in making more accurate generalization from the data available.
SOURCES OF DATA
Secondary data were collected to meet the objective. The data is collected for the annual
reports of the Ultra Light Technology Data has been taken as per the requirements of the
study of the RATIO ANALYSIS. Secondary data is used for it.
TOOLS OF ANALYSIS

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It is essential to use a systematic research methodology for the assessment of a project because
without the use of a research methodology analysis of any company or organization will not
be possible.
In the present analysis mostly secondary data have been used. Its is worth a white to mention that
have used the following types of published data:
 Balance sheet
 Profit & Loss A/c
 Schedules

(V) LIMITATION OF THE STUDY

Some of the limitations of this study may be summarized as follows:

 The findings and conclusions of this report are totally based on the secondary data.
 Time is very limited and Budget is very small.
 Here for maintaining the records the concept of on-line is used so the problem related to
network could arise.
 The Ultra Light Technology area is far away from the city. The Internet facility is not good
in the area. The cost of using Internet facility is very high.

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 DATA ANALYSIS
AND INTERPRETATION

35
v
In
h
C
a
S
y
r
io
c
R
s
le
b
t
need’s.
DATA ANALYSIS AND INTERPRETATION
Financing Working Capital

Source of Finance

We have many connection’s with many Banks who provides/help us financially, When we

A good relation with bank helps to rotates or doing transactions.

These are the following Banks:-




Oriental Bank of Commerce (Lead Consortium)
ICICI Bank
HDFC Bank Limited
Working Capital Cycle

The cash flow in cycle into,around and out of a business’s Life blood and every manager’s
primary task is yo keep it flowing and to use the cash flow to generate profits. If a business is
operating profitbility then it should , in theory , generate cash surpluses. If it doesnot genetes
surplus ,The business will eventully runout of cash & surplus.

The Faster the business expands,the more cash it will need for working capital and investment
.The cheapest and the best sources of cash exist as working capital rightwith in business. Good
management of working capital will generate cash will help inprove profits and reduce risks.
Bear in mind that the cost providing of a firms total profits.

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 Working Capital Cycle

CURRENT RATIOS:

Current ratio

The current ratio is a financial ratio that measures whether or not a firm has enough resources
to pay its debts over the next 12 months. It compares a firm's current assets to its current
liabilities. It is expressed as follows:

For example, if WXY Company's current assets are 50,000,000 and its current liabilities are
40,000,000, then its current ratio would be 50,000,000 divided by 40,000,000, which equals
1.25. It means that for every dollar the company owes in the short term it has 1.25 available in
assets that can be converted to cash in the short term. A current ratio of assets to liabilities of 2:1
is usually considered to be acceptable (i.e., your current assets are twice your current liabilities).

The current ratio is an indication of a firm's market liquidity and ability to meet creditor's
demands. Acceptable current ratios vary from industry to industry. If a company's current ratio is
in this range, then it is generally considered to have good short-term financial strength. If current
liabilities exceed current assets (the current ratio is below 1), then the company may have
problems meeting its short-term obligations. If the current ratio is too high, then the company
may not be efficiently using its current assets or its short-term financing facilities. This may also
indicate problems in working capital management.

Low values for the current or quick ratios (values less than 1) indicate that a firm may have
difficulty meeting current obligations. Low values, however, do not indicate a critical problem. If
an organization has good long-term prospects, it may be able to borrow against those prospects
to meet current obligations. Some types of businesses usually operate with a current ratio less
than one. For example, if inventory turns over much more rapidly than the accounts payable
become due, then the current ratio will be less than one. This can allow a firm to operate with a
low current ratio.

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If all other things were equal, a creditor, who is expecting to be paid in the next 12 months,
would consider a high current ratio to be better than a low current ratio, because a high current
ratio means that the company is more likely to meet its liabilities which fall due in the next 12
months.

  Mar ' 2020 Mar ' 2019 Mar ' 2018 Mar ' 2017 Mar ' 2016

Current ratio 1.07 1.01 1.05 1.2 1.7

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 Mar ' 2020 Mar ' 2019 Mar ' 2018 Mar ' 2017 Mar ' 2016
1.8 1.7

1.6

1.4
1.2
1.2
1.07 1.05
1.01
1

0.8

0.6

0.4

0.2

0
Current ratio
QUIC
K OR ACID TEST OR LIQUID RATIO

Quick ratio, also known as Acid Test or liquid Ratio, is a more rigorous test of liquidity
than the current ratio. Quick ratio may be defined as the relationship between quick/liquid assets
and current or liquid liabilities. The quick ratio can be calculated by dividing the total of the
quick assets by total current liabilities thus,

Quick∨liquid Assets
Quick/liquid or Acid test ratio =
current liabilities

  Mar ' 2020 Mar ' 2019 Mar ' 2018 Mar ' 2017 Mar ' 2016

Quick ratio 0.15 0.18 0.56 0.44 0.41

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Mar ' 2020 Mar ' 2019 Mar ' 2018 Mar ' 2017 Mar ' 2016

0.56

0.44
0.41

0.18
0.15

Quick ratio

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OBSERVATION
AND FINDINGS

41
 OBSERVATION AND FINDINGS
The findings of the project report as per my view are given below:
 The Cash Management is very constant in nature.
 The Cash Management is similar to transaction of fund in the organization segment i.e. both
are cash settled.
 Cash Management as an instrument of risk-management. These generally do not influence
the fluctuations in the underlying asset prices. However, by locking in asset prices, financial
products minimize the impact of fluctuation in the asset price on the profitability and cash
flow situation of risk-averse investors.
 The most commonly used financial Cash contracts in the Indian organizations are futures and
options.
 The major risks in financial transactions can be classified as credit, market, liquidity,
operational and legal risks.
 Maximum uses of financial cash are in all capitalized segment clearly indicate that financial
market is widely used for hedging the share price fluctuation. It can be understood by another
way that top most companies, which are known for their stable performance i.e. Tata
Consultancy Services Ltd., Bharat Heavy Electricals Ltd., Oil and Natural Gas Corporation
Ltd., Hindalco Industries Ltd., Indian Oil Corporations Ltd. and Wipro Ltd. having minimum
lots, are not preferred in the cash segment. The reason is because they carry less price risk as
compared to all capitalized stocks.
 The permitted number of situation for cash management transactions trading is almost 10%
of the total number of situation. So the market is very huge and there is a big opportunity for
financial Professionals Financial organization in India. When the permitted Companies act
1956 in the companies segment will be increased, it will further widen the multinational
companies.

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CONCLUSION

43
 CONCLUSION
As we know that Cash Management is a life blood of the any financial organizations. . In care
of Cash Management underlying transaction may be cash section in here, cash or scrip. There
are three baric tools of instruments of financial cash requirement that manage the all sections
requirement. Daily basis, weekly basis, quarterly basis. These are management of cash.
There are 3 important factors that contributed to the growth of Cash Management. These factors
are –

 Maximum transactions of cash in business enterprises.

 Changes in the interest rate – both upwards and downwards.

 Financial market which increased uncertainties.

Indian companies act as an instrument of risk management; these generally don’t influence the
fluctuations in the underlying asset prices. However, by locking in asset prices, financial
products minimize the impact of fluctuations in asset prices on the profitability and cash flow
situation of risk-averse investors. It is similar to that of trading company in the cash market
segment. It hedges the price risk. Settlements are based on cash, requirement basis. In other
words, we can say that financial transactions are settled at daily, weekly & quarterly basis but
our banking sector is not so advanced. So there is need to improved banking sector so that it
matures the pace of transactions and settlements in the business enterprise.

In the analysis portion, I have found that The Ultra Light Technology have good financial
position. After studying the components of working capital management system of The Ultra
Light Technology It is found that the company has a good and effective policy and its
performance is also good. Company is competing well at the domestic as well as the
international level and it is among the low cost producers of rice in the world only because of its
proper management of finance, specially the short term finance known as the working capital
.The company is a matured one and it has contributed well in the countries growth and
development and will also continue to perform and contribute to the whole nation. In conclusion,
we can say that the company’s management is an effective one and knows well the management
of finance; its working capital management system is very good.

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SUGGESTIONS

45
 SUGGESTIONS
 After the study of Cash Management I find that the financial Cash Management has to do
more effective effort for continuous success in the field of finance.

 There is need to bring awareness among the general public about Cash Management
through promotion mix or promotional activities.

 Generally financial transactions are settled on daily, weekly, & quarterly basis but our
banking interim Management in India is not so advanced. So there is need to improve the
banking sector so that it matches the pace of transactions and settlements in the all type’s
organizations.

 Other than futures and options, other instruments like swaps, swap ions have to be
introduced so that area of Cash Management is broadened.

 At present the number of scrip’s traded in the financial Cash Management segment is
limited to 53 only. Scrip’s traded in financial cash segment must be increased.

We are giving some suggestion that we think will help The Ultra Light Technology to control
their inventory in some better way.

1. Spares and components are not directly related to generation of power but its inventory is
substantially high. So, all the nearby projects Of The Ultra Light Technology should share
their requirement of spare parts that have a low value in terms of money. Advantage: This
will decrease the cost of inventory holding.

2. In case of high value items in terms of usage there should be proper expediting. If
possible, a card should be opened indicating the various stages of procurement from the
receipt of indents. Advantage: Proper expediting system should reduce the extra
transportation cost and material handling cost. Also reduce Lead-time.

3. Remedial measures must be taken to reduce consumption by reconditioning & repairing

the tools and policies should be followed to reduce the average average holding period in
order to decrease excess money blocked.

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4. Various Management information Reports should be compiled, generated and sent to
various levels of management at project, regional and corporate office level.

5. It is recommended that the station should follow scientific Inventory Management to

avoid extra blockage of funds.

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BIBLIOGRAPHY &
REFERENCE

48
 BIBLIOGRAPHY & REFERENCE
BOOKS AND MAGAZINES:
1. Kothari, C. R., Research Methodology, New Delhi, New Age International (P)
Limited Publishers, Second Revised Edition 2004.
2. The Advance Learner’s Dictionary of Current English, Oxford, 1952, p. 1069
3. Magazines of THE ULTRA LIGHT TECHNOLOGY
4. Pandey, I.M., Financial Management.

NEWS PAPERS AND JOURNALS:

1. The Times of India, New Delhi.

ANNUAL REPORT:
1. THE ULTRA LIGHT TECHNOLOGY Annual Report- 2005-06.

LIBRARY:
Library of THE ULTRA LIGHT TECHNOLOGY

WEBSITES:
1. www.mvomni.com
2. www.Google.Com

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