Study of Working Capital Management

WORKING CAPITAL MANAGEMENT
A PROJECT REPORT
ON
“A STUDY OF WORKING CAPITAL MANAGEMENT OF
MARUTI SUZUKI –SURAKSHAA CAR CARE PVT.LTD.”
Submitted in partial fulfillment of the requirement of the award of the degree

of „bachelor of Business management‟ of Bangalore University
Submitted by
MR. SARAVANA KUMAR R
(Reg.no.13VFC24090)
Under the guidelines of
MRS.SREEJA NAIR
NEW HORIZON COLLEGE
MARATHALLI BANGALORE -560087
2015-2016
NEW HORIZON COLLEGE Page1

STUDENT DECLARATION
I, SARAVANA KUMAR R student of bachelor of business management, NEW HORIZON
COLLEGE BANGALORE, bearing registration number 13VFC24090 declare this project
entitled “ A STUDY ON WORKING CAPITAL MANAGEMENT” OF MARUTI SUZUKI-
SURAKSHAA CAR CARE PVT.LTD.” was prepared by me during by me during the year
2015-2016 and was submitted in partial fulfillment for the award of bachelor of business
management to Bangalore University,
I also declare that this project is original and genuine and has not been submitted to any other
university/ institution for the award of any degree, diploma or other similar titles or purposes
Place: Bangalore Name: SARAVANA KUMAR R
Date: Reg.no.13VFC24090

GUIDE CERTIFICATE
Certified that the project report entitled “A STUDY ON WORKING CAPITAL
MANAGEMENT” OF MARUTI SUZUKI - SURAKSHAA CAR CARE PVT.LTD”‟
submitted by MR.SARAVANA KUMAR R bearing registration no. 13VFC24090 to bangalore
university in partial fulfillment for the award of “Bachelor of Business Management” of
Bangalore University, Bangalore is a record of independent project work under taken by him,
under my supervision and guidance and the project has not be submitted either in part or whole for
the award of any other degree or diploma of any university.
Place: Bangalore MRS. SREEJA NAIR
Date:

HOD CERTIFICATE
This is to certify that SARAVANA KUMAR R (13VFC24090) is bonafide student of bachelor of
business management. The project work entitle “ A STUDY ON WORKING CAPITAL
MANAGEMENT” OF MARUTI SUZUKI-SURAKSHAA CAR CARE PVT.LTD”„is
bonafide work carried out by SARAVANA KUMAR R (13VFC24090) on partial fulfillment of
the requirement for the award of degree in business management of Bangalore university during
the year 2015-2016. It is to certify that all corrections/suggestions have been incorporated in the
project report and a copy is deposited in the department library. This project work as been
approved as it satisfies the academic requirement for the award of bachelors of business
management degree.
Place: Bangalore PRASANNA PRAKASH
Date: (HOD)

PRINCIPAL CERTIFICATE
This is to certify that SARAVANA KUMAR R (13VFC24090) bonafide student of
this college. The project work entitled“ A STUDY ON WORKING CAPITAL
MANAGEMENT” OF MARUTI SUZUKI-SURAKSHAA CAR CARE PVT.LTD”„is
bonafide work carried out by SARAVANA KUMAR R (13VFC24090) in partial
fulfillment of requirement for the award of degree in business management of
Bangalore University during the year 2015-2016.
Place: Bangalore Dr. R.BODHI SATVAN
Date: (principal)

ACKNOWLEDGEMENT
I would like to thank all those persons who have contributed towards the successful completion of
the project work. I am glad to say that working on this project was illuminating and enjoyable for
me.
I take this opportunity to thank our respected chairman Sri .Mohan Manghnani, and our beloved
principal Dr. R.BODHI SATVAN for their generosity and kindness to embrace us in, New
Horizon College, Bangalore university. I have deep sense of gratitude to MRS. PRASANNA
PRAKASH professor and head of the department. And Mrs. SREEJA NAIR, my internal
project guide for her encouragement, guidance and valuable suggestions throughout the project.
I would like to thank all the faculty members of BBM and my friends who directly and indirectly
helped me to complete this project.
Words fail me in expressing my deep sense of gratitude and affection to my parents, for their
constant love and moral support without them I could not have been what I am.
SARAVANA KUMAR R
(13VFC24090)

TABLE OF CONTENTS
CHAPTER No. CHAPTER NAME Pg.no
Chapter-1 INTRODUCTION 1-31
INDUSTRY PROFILE AND COMPANY

Chapter-2 PROFILE 32-52
Chapter-3 RESEARCH DESIGN 53-58
DATA ANALYSIS AND 59-78

Chapter-4 INTERPRETATION
FINDINGS 79-80
Chapter-5
Chapter-6 SUGGESTIONS AND CONCLUSIONS 81-83
BIBLIOGRAPHY
ANNEXURE

LIST OF TABLES
SL.NO LIST OF TABLES PAGE NO
4.1 Table showing statement of changes in working capital for 59

the year ending 2010-11
4.6 Table showing the current ratio 65
4.7 Table showing the inventory turnover ratio 68
4.8 Table showing the quick ratio 70
4.9 Table showing the working capital turnover ratio 72
4.10 Table showing the debtors turnover ratio 74
4.11 Table showing the cash ratio 77

LIST OF GRAPHS
SL.NO LIST OF GRAPHS PAGE NO
Graph showing changes in working capital

4.1 64
Graph showing the current ratio

4.2 66
Graph showing the inventory turnover ratio

4.3 69
Graph showing the quick ratio

4.4 71
Graph showing the working capital turnover ratio

4.5 73
Graph showing the debtors turnover ratio

4.6 75
Graph showing the cash ratio

4.7 78

EXICUTIVE SUMMERY
The project on working capital management of MARUTI SUZUKI-SURAKSHAA CAR

CARE PVT.LTD has been a very good experience. Every manufacturing company faces the
problem of working capital management in their day to day process. An organizations cost
can be reduced and its profit can be increased only if it‟s able to manage working capital
efficiently. At the same time the company can provide customer satisfaction and hence
provide their overall productivity and profitability.
The management had to depend upon certain relevant information for taking various
strategic decisions. The information is made useful by its analysis and interpretation. my
project is related to a study on working capital management It is found that the operating
cycle of the company is bit disturbed and due to which company is having decreasing
working capital position. By adopting various calculation and analysis and then making
interpretation with the solution of specific problem I put my efforts in giving appropriate
suggestion to the company. To this context I adopted methods and techniques like,
estimation of working capital, analyzing of operating cycle and use of various financial
ratios to put an exact picture of company.
The internship is a bridge between the institute and the organization. This made me to be
involved in a project that helped me gain theoretical knowledge about the myriad and
fascinating facts of finance. And in the process I could contribute to my individual as well as
the organization‟s growth.

CHAPTER-1
INTRODUCTION

INTRODUCTION TO FINANCE:
According to Guttmann and Dougall, “Business finance can be broadly defined as the
activity concerned with planning, raising, controlling and administering of funds used in the
business”.
Finance refers to the capital involved in a project, specifically the capital that has to be raised to start a
new business. Finance is regarded as the life-blood of a business enterprise. This is because in the modern
oriented economy, finance is one of the basic foundations of all the kinds of economic activities. The need for
finance starts from the inspection of the idea of starting a business. It has rightly been said that, “business
means money to make more money”. However it is also true that money begets more money, only when it is
properly managed. Hence efficient management of every business enterprise is closely linked with efficient
management of its finance.
FEATURES AND CHARACTERISTICS OF FINANCE:
 Business finance or financing is an essential business activity.

 All business concerns whether small or large need finance small business
enterprises require less funds in large business undertaking need more funds.
 Business finance may be short term finance medium term finance or long term
finance depending upon nature of the activities to finance.
Business finance is not just acquisition of finance it is a wider term it includes estimation of the
financial requirement the under taking acquisition of the required funds

IMPORTANCE OF FINANCE:
 Business activities permanently carried out as corporate form of business organization

has increased the importance of finance.
 The increase in the size of the business resultant increase in the scale of business
operation has contributed to the important of finance
 Wide distribution of corporate ownership is one of the factors reasonable for the
importance of the finance.
 Separation of ownership and management present in corporate form of business
organization is one of the factors responsible for the important of finance.
 Capital-intensive method of product is one of the factors responsible for the
importance of finance in modern industries.
The importance of benefit of finance may be considering in three different heads they are
 Importance or benefits to business units

 Importance or benefits of finance to invest
 Importance or benefits of to society

TYPES OF FINANCE:
 SHORT TERM FINANCE

 LONG TERM FINANCE
Short term finance:-Short term finance usually refers to finance required by a firm
finance required for the purchase of raw materials payment of wages salaries and for
meeting the other day to day manufacturing and other expenses in a firm.
LONG TERM FINANCE: Refers to finance required for a period exceeding five years
usually for a period of five to twenty it is required for financing the fixed capital.
SOURCES OF FINANCE: Any type of finance of corporate enterprises is obtained

through different sources.
The sources are:-
 Equity shares
 Preference shares
 Debentures and loan bonds
 Public deposits
 Internal resources
 Leasing
 Grants and Subsidies

CLASSIFICATION OF SOURCES OF FINANCE
1. According to period:
 Long term sources like shares, debentures, and long term loan etc.
 Short term source like advancesfrom commercial banks, public deposits,
advances from customers and Trade creditors
2. According to ownership:
 Own capital, via share capital, retained earning surplus etc.
 Borrowed capital via debentures, public deposits and loan etc.
3. According to source of generation:
Internal sources via retained earnings ,depreciation, funds etc.
1. External sources, via securities such as shares, debentures loans.

2. Security financing: This includes financing through depreciation funds and retained
earnings.
3. Loan financing: This financing includes both short term and long-terms loans.
FINANCE FUNCTION: Although it is difficult to separate finance functions from

productions, marketing and other functions, yet the functions themselves can be readily identified.
The functions of raising funds, investing them in assets and distributing returns earned from assets
to share holders are respectively known as financing, investment and dividend decisions. A firm
performs finance functions simultaneously and continuously in the normal course of the business.

Finance functions include:
1. Investment decisions.
2. Finance decisions.
3. Dividend or Project allocation decisions.
4. Current assets and management.
DEFINITIONOF FINANCIALSTATEMENT:
According to American Institute of Certified Public Accountants, financial statement reflects, “A

comparison of recorded facts, accounting conventions and personnel judgmentsapplied affects
materially”.
FINANCIAL MANAGEMENT:
Financial management is a measuring success for a failure of an organizational financial

management. It is an exclusive exercise in economy, which includes.
 Funds management
 Control and reporting system
 Financial cost and management accounting
 Tax planning
 Budgets related disciplines.
Financial management is managerial activity concerned with planning and controlling

the firm‟s financial resource.

As well practicing managers to understand the theory of financial management is not mere accounting management. Besides accounting also
involves financial decisions, that is howto raise fund loans,retain profit, investment decision, utilization of funds etc.
OBJECTIVE OF FINANCIAL MANAGEMENT:
The object of financial management can be classified into
1. Specific objective
2. Other objective or general objective.
 SPECIFIC OBJECTIVE
 Profit maximization:
Earning profit by a cooperative or a company or a social obligation, profit is the only means
through which the efficiency of an organization can be measured
 Wealth maximization:
The concept of wealth maximization refers gradual growth of the values of the assets of the
firm in terms of benefits it produces less cost of action this is the process of creating wealth of
organization

 OTHER GENERAL OBJECTIVE

 Balance assets structure
 Liquidity
 Judicious planning of funds
 Efficiency
 Financing discipline
FUNCTION OF FINANCIAL MANAGEMENT:
 Anticipating the financial needs

 Acquiring financial resources
 Allocating the funds in the business
 Administrating the allocation of funds
 Analyzing the performance of firms
 Anticipating the financial needs
 Acquiring the funds in the business
 Administrating the allocation of funds
 Analyzing the performance of firms.
SCOPE OF FINANCIAL MANAGEMENT:
Financial management has undergone significant changes over years as regard to its scope.
Inorder to have a better exposition of these changes it will be appropriate to study the “Traditional
Approach” and “Modern Approach” of finance function.

TRADITIONAL APPROACH:
The traditional approaches were popular in early part of century. The role of financial
management is of rising and administering of funds needed by corporate enterprises to meet their
financial needs. It broadly covered the following three aspects.
1. Arrangement of funds through financial instruments like shares, bonds etc...

2. Arrangement of funds from financial institution.
3. Looking after the legal and accounting relationship between a corporation and its sources
of funds.
Thus the traditional concept of financial management included within its scope the whole process
of raising the funds externally.
MODERN APPROACH:
Finance function according to modern scholars can be categorized into two broad groups
 RECURRING FINANCE FUNCTION.

 NON-RECURRING FINANCES FUNCTION.
RECURRING FINANCE FUNCTION:
Recurring finance encompass all such financial activities which are carried out
regularly for the efficient conduct of a firm, planning for & rising of funds, allocation of
funds, income and controlling the uses of funds are the contents of this function.

NON RECURRING FINANCE FUNCTION:
It refers to those financial activities that a financial executive has to perform very
infrequently, preparation of financial plans at the time of promotion of the enterprise financial
readjustments in times of liquidity crisis, valuation of the firm at the time of merger or
revaluation of the firm and similar other activities.
FINANCIAL PLAN:
Financial plan is primarily a statement estimating the amount of capital and
determining its composition financial planning results in the formation of the financial plan.
The financial plan states:

 The quantum of finance i.e. the amount needed for implementing the business plan.
 The pattern of financing i.e. the form & proportion of various corporate securities to
be issued to raise the required amount.
 The policies to be pursued for floating for various corporate securities particularly
regarding the time for their floating.
PRINCIPLES OF GOVERNING FINANCIAL PLAN
The Principles Governing Financial Plan is as follows:
Simplicity:
The financial plan should envisage a simple financial structure capable of being managed
easily. The types of securities of various types will give rise to unnecessary suspicion in the
minds of investing public & create avoidable complications

 Long term view:
The financial plan should be formulated & concerned by the promoters. Management keeping
in view the long term needs of corporation rather than finding out the easiest way of obtaining
the original capital. This is because the original financial plan would continue to operate for a
long period even after the formation of the company.
 Foresight:
The financial plan should be prepared keeping in view the future requirements of capital for
the business course, It is a difficult task since it requires making of accurate forecast regarding
the future scale of operation of company. Technological improvements, Demand forecast,
Resource availability & other secular changes should keep in view while drafting the financial
plan.
 Optimum use:
The financial plan should provide for meeting the genuine needs of the company. The business
should neither be starved of funds nor should it have unnecessary spare funds wasteful use of
capital as inadequate capital.
 Contingencies:
The financial plan should keep in view the requirement of funds for contingencies likely to
arrive it does not however, mean that capital should be kept unnecessary idle for unforeseen
contingencies. Promoter foresight will considerably reduce this risk.
 Flexibility:
The financial plan should have a degree of flexibility also. Flexibility is helpful in making
changes or revising the plan according to pressure of circumstances with minimum possible
delay.

 Liquidity
Liquidity is the ability of enterprise to make available the ready cash whenever required to
make disbursement. Adequate liquidity in the financial plan gives it a degree of flexibility too.
It could act as a shock absorber in the event of business operations deviating from normal
course.
 Economy: The cost of raising the required capital should be minimum. It should not
impose disproportionate burden on the company. This is possible by having a proper
debt equity mix.
INDIAN FINANCIAL SYSTEM:
Financial system is a set of inter related activities/services working together to achieve some
predetermined purpose or goal.
The objective of the financial system is to “Supply funds to various sectors and activities of
economy it says that promotes the fullest possible utilization of resources without theestablishing
consequences of price level changes or unnecessary interferences with individual desires.
The primary function of the financial system is “To provide link between savings &
investment for creation of new wealth and to permit portfolio adjustment in the composition of
the existing wealth”.
The financial system consists of variety of institution, market & instrument related in a
systematic manner and provides the principal means by which savings are transformed into
investments.

Financial sector can be broadly classified into following groups.
 Organized sector
 Unorganized sector
The organized financial system comprises the following subsystems:
1) The Banking System

A)Public sector
b)Private sector
2)Theco operative system
3)Money Market
4)Financial Companies/Institutions.
 The increase in the size of the business resultant increase in the scale of business
operation has contributed to the important of finance.
 Wide distribution of corporate ownership is one of the factors reasonable for the
importance of the finance.
 Separation of ownership and management present in corporate form of business
organization is one of the factors responsible for the important of finance.
 Capital-intensive method of product is one of the factors responsible for the
importance of finance in modern industries.
The importance of benefit of finance may be considering in three different heads they are
 Importance or benefits to business units

 Importance or benefits of finance to invest
 Importance or benefits of to society

a) INTRODUCTION:
Working capital is the firm‟s investment in current assets. It refers to the amount of funds
required by an industry to finance its day-to-day operations. It can be regarded as that part
of capital, which is employed for short-term operations, so working capital relates to
the management of current assets and current liabilities.
CURRENT ASSETS:
Current assets are those assets, which are converted into cash within the usual course
of business and within one year. They are
 Cash and bank balance

 Inventory
 Receivables
 Marketable securities
 Prepaid expenses
CURRENT LIABILITY:
Current liability are those, which are intended at their inception to be paid in the ordinary course
of business, within a year out of the current assets or earnings of the concern they are,
 Trade creditors
 Bank Overdraft
 Unsecured/short term loans
 Outstanding expenses
 Payables
DEFINITION OF WORKING CAPITAL:

“Circulating capital means current assets of a company that are changed in the ordinary course of
business from one to another as for example from cash to inventories, inventories to receivables
into cash”.
GENESTEN BERG
The sum of current is the working capital of a business.
J.S.MILL
Any acquisition of funds which increase the current assets increases working capital also for the
one and the same.
BONNEVELE
CONCEPTS OF WORKING CAPITAL:
There are two concepts of working capital:
 Gross Working Capital

 Net Working capital
 GROSS WORKING CAPITAL
The term Gross working capital refers to organization‟s investment in current assets. The current
assets of the firm include: cash, bank, balance (cr.), short term securities, bills receivables, stock
etc…

 NET WORKING CAPITAL
Net working capital refers to the organization‟s investment in current assets. The current assets of
an organization(e.g.: cash, bank, balance(cr.), short term securities, bills receivable,
stocked,,,,)and its current liabilities (e.g.: short term debt, bills payable, outstanding expenses
etc…,.)
NET WORKING CAPITAL HAS BEEN DEFINED AS:
“Working capital, sometimes called net working capital, is represented by the excess of current
assets over current liabilities and it enables a firm to determine the exact amount available at its
disposal for operational requirements.”
Net Working capital = Current Assets – Current Liabilities
NEED FOR WORKING CAPITAL:
The need for working capital to run the day-to-day business activities cannot be over emphasized.
We will hardly find a business firm which does not require any amount of working capital.
Indeed, firms differ in their requirements of the working capital.
We know that firms aim at maximizing the wealth of shareholders. In its endeavor to maximize
shareholders wealth, a firm should earn sufficient return from its operations. Earning a steady
amount of profit requires successful sales activity .the firm has to invest enough funds in current
assets for the success of sales activity. Current assets are needed because sales do not convert into
cash instantaneously. There is always an operating cycle involved in the conversion of sales into
cash.

OPERATING CYCLE
Operating cycle is the time duration required to convert sales, after the conversion of resources
into inventories, into cash. The operating cycle of a manufacturing company involves three
phases:
 Acquisition of resources such as raw material, labor, power and fuel etc.
 Manufacture of the product which includes conversion of raw materials into work-in-
progress into finished goods.
 Sales of the product either for cash or on credit. Credit sales create book debts for
collection.
These phases affect cash flows, which most of the time, are neither synchronized nor certain.
They are not synchronized because cash out flows usually occur before cash inflows. They are not
certain because sales and collections, which gives rise to cash inflows, are difficult to forecast
accurately. The firm is therefore required to invest in current assets for a smooth, uninterrupted
functioning. It needs to maintain liquidity to purchase raw materials and pay expenses such as
wages and salaries, other manufacturing, administrative and selling expenses and taxes as there is
hardly a matching between each cash inflows and outflows.
Cash is also held to meet any future exigencies. Stock of raw materials and work-in-process are
kept to ensure smooth production and to guard against non availability or raw materials and other
components. The firm holds stock of finished goods to meet the demands of customers on
continuous basis and sudden demand from some customers. Book debts (accounts receivables) are
created because goods are sold on credit for marketing and competitive reasons. Thus a firm
makes adequate investment in inventories and book debts for a smooth and uninterrupted
production and sale.

DETERMINANTS OF WORKING CAPITAL:
There are no set rules or formulae to determine working capital requirements of the firms. But
there are some factors which generally influence the working capital requirements of firms.
Nature and size of Business
Working capital requirements of a firm are basically influenced by the nature of its business.
Trading and financial firms have a very small investment in fixed assets, but require a large sum
of money to be invested in working capital. Retail stores, for example, must carry large stocks of a
variety of goods to satisfy varied and continuous demand of their customers. In contrast, public
utilities have a very limited need for working capital and have to invest abundantly in fixed assets.
Manufacturing cycle
The manufacturing cycle comprises of the purchase and use of raw materials and the productions
of finished goods .longer the manufacturing cycle, large will be the firm‟s working capital
requirements. This needs proper planning and co-ordination at the levels of activity. Any delay in
manufacturing process will result in accumulation of work in process and waste of time.
Sales Growth
The working capital needs of a firm increase as its sales grow. It is difficult to precisely determine
the relationship between volume of sales and working capital needs inpractice, current assets will
have to be employed before growth takes place. It is therefore, necessary to make advance
planning of working capital for a growing firm on a continuous basis.

Demand conditions
Most firms experience seasonal and cyclical fluctuations in the demand for their products and
services. These business variations affect the working capital requirement, specially the temporary
working capital requirements of the firm. When there is an upward swing in the economy, sales
will increase; correspondingly, the firm‟s investments in inventories and book debts will also
increase. Under boom, additional investment in fixed assets may be made by some firms to
increase their productive capacity. This act of firms will require further additions of working
capital.
Production policy
A steady production policy will cause inventories to accumulate during the off-season periods and
the firm will be exposed to greater inventory cost and risks. Thus, if costs and risks of maintaining
a constant production schedule are high, the firm may adopt the policy of varying its productions
schedules in accordance with changing demand. Those firms, whose productivecapacities can be
utilized for manufacturing varied products, can have the advantage of diversified activities and
solve their working capital problems. They will manufacture the original product line during its
increasing demand and when it has an off-season; other products may be manufactured to utilize
physical resources and working force.
Price level changes
The increasing shifts in price level make functions of financial manager difficult. He should
anticipate the effects of price level changes on working capital requirements of the firm.
Generally, rising price levels will require a firm to maintain higher amount of working capital.
Same levels of current assets will need increased investment when prices are increasing.
However, companies which can immediately revise their product prices will rise price levels will
not face a severe working capital problem. Further, effects of increasing general price level will be
felt differently by firms as individual prices may move differently. It is possible that some
companies may not be affected by rising prices while other may be badly hit.
Operating Efficiency and performance
The operating efficiency of the firm relates to the optimum utilization of resources at minimum
costs. The firm will be effectively contribution to its working capital if it is efficient in controlling
operating costs. The use of working capital is improved and pace of cash cycle is accelerated with
operating efficiency. Better utilization of resources improves profitability and, thus, helps in
releasing the pressure on working capital. Although it may not be possible for a firm to control
prices of materials or wages of labor, it can certainly ensure efficient and effective use of its
materials, labor and other.
Firm‟s Credit policy
The credit policy of the firm affects working capital by influencing the level of books debts. The
credit terms to be granted to customers may depend upon norms of the industry to which the firm
belongs. But a firm has the flexibility of shaping its credit policy with in the constraint of industry
norms and practices. The firm should be discretionary in granting credit terms to itscustomers.
Depending on the individual case, different terms may be given to different customers. A liberal
credit policy, without collecting funds later on. The firm should be prompt in making collections.
A high collection period will mean tie-up of funds in book debts.

Availability of credit
The working capital requirement of a firm is also affected by credit terms granted by its creditors.
A firm will need less working capital if liberal credit terms are available to it. Similarly, the
availability of credit from banks also influences the working capital needs of the firm. A firm,
which can get bank credit easily on favorable conditions, will operate with less working capital
than a firm without such a facility.
DIMENSIONS OF WORKING CAPITAL MANAGEMENT:
Working capital management refers to the administration of all aspects of current assets, namely
cash, marketable securities, debtors, and stock (inventories) and current liabilities. The financial
manager must determine levels and composition of current assets. He must see that right sources
are tapped to finance current assets, and that current liabilities are paid in time.
IMPORTANCE OF WORKING CAPITAL:
Working capital management is one of the most important aspects in financial management.
Under the present economic scenario, where the industry is facing stiff competition from various
quarters. The existence of a firm/organization depends entirely on the effective utilization of the
available resources. The management of working capital aims and deals with employment of
current assets to derive maximum profitability and minimize risk.
In India, in case of large and medium size companies, the working capital constitutes 60% of the
total assets or total assets or total capital employed. So finance manager should pay attention tothe
management of working capital on continuing basis. The manager of administration of working
capital determines to very large extent the success or failure of overall operation of industry.
Many times in the event of failure of business concerns, the mismanagement of working capital
may be one of the factors.

LIQUIDITY v/s PROFITABILITY: THE RISK-RETURN TANGLE
The two important aims of working capital management are; Profitability and solvency. Solvency,
used in the technical sense, refers to the firm‟s continuous ability to meet maturing obligations.
Lenders and creditors except prompt settlements of their claims as and when due. To ensure
solvency, the firm should be very liquid, which means larger current assets holdings. If the firm
maintains a relatively large investment in current assets, it will have no difficulty in paving claims
of production. Thus a liquid
Firm has risk of insolvency; that is, it will hardly experience a cash shortage or stock-outs.
However, there is a cost associated with maintaining a sound liquidity position. A considerable
amount of the firm‟s funds will be tied up in current assets, and to the extent this investment is
idle, the firm‟s profitability will suffer.
To have higher profitability. The firm may sacrifice solvency and maintain a relatively low level
of current assets. When the firm does so, its profitability will improve as less funds are tied up in
idle current assets, but its solvency would be threatened and would be exposed to greater risk of
cash shortage and stock-ou

MANAGEMENT OF CASH
IMPORTANCE OF CASH
Cash is the important current assets for the operations of the business. Cash is the basic input
needed to keep the business running on a continuous basis; it is also the ultimate output expected
to realize by selling the service or product manufactured by firm. The firm should keep sufficient
cash, neither more nor less. Cash shortage disrupt the firm‟s manufacturing operation while
excessive cash will simply remain idle, without contribution anything towards the firm‟s
profitability thus, a major function of the financial manager is maintain a sound cash position.
CONCERNS OF CASH MANAGEMENT :
Cash management is concerned with the managing of:
Cash flows into and out of the firm.

Cash flows within the firm &
Cash balances held by the firm at a point of time by financing deficit or investing surplus
cash.
Sales generate cash which has to be disbursed out. The surplus cash has to be invested while
deficit has to be borrowed. Cash management seeks to accomplish this cycle at a minimum cost.
At the same time, it also seeks to achieve liquidity and control.
The management of cash is also important because it is difficult to predict cash flows accurately,
particularly inflows, and that there is a perfect coincidence between the inflows and outflows of
cash. An obvious aim of firms now-a-days is to manage its cash affairs in such a way has to keep
cash balance at a minimum level and to invest the surplus cash funds in profitable opportunities.

STRATEGIES OF CASH MANAGEMENT
In order to resolve the uncertainty about cash flow prediction and lack of synchronization between
cash receipts and payments, the firm should develop appropriate strategies for cash management.
The firm should evolve strategies regarding the following four facts of cash management.
 Cash planning: Cash inflows and outflows should be planned to project cash surplus or
deficit for each period of planning period. Cash budget should be prepared for this
purpose.
 Managing the Cash flows: The flow of cash flows should be properly managed. The cash
inflows should be accelerated while, as far as possible, decelerating the cash out flows.
 Optimum Cash Level: The firm should decide about the appropriate level of cash balances.
The cost of excess cash and danger of cash deficiency should be matched to determine the
optimum level of cash balances.
 Investing Surplus Cash: The surplus cash balances should be properly invested to earn
profits. The firm should about the division of such cash balance between bank deposits,
marketable securities, and inter-corporate lending.
The ideal cash management system will depend on the firm‟s products, organization structure,
competition, culture and options available.
MOTIVES FOR HOLDING CASH
The firm‟s need to hold cash may be attributed to the following three motives:
The transaction motive

The precautionary motive
The speculative motive
Transaction motive:

The transactions motive requires a firm to hold cash to conduct its business in the ordinary course.
The firm needs cash primarily to make payments for purchases, wages and salaries, other
operating expenses, taxes, dividends etc. for transactions purpose , a firm may invest its cash in
marketable securities. Usually, the firm will purchase securities whose maturity corresponds with
some anticipated payments, such as dividends, or taxes in future. The transactions motive mainly
refers to holding cash to meet anticipated payments whose timing is not perfectly matched with
cash receipts.
Precautionary motive:
The precautionary motive is the need to hold cash to meet contingencies in future. It provides a
cushion or buffer to with stand some unexpected emergency. The precautionary amount of cash
depends upon the predictability of cash flows. If cash flows can be predicted with accuracy, less
cash will be maintained for an emergency. The amount of precautionary cash is also influenced by
the firm‟s ability to borrow at short notice when the need arises.
Such funds should be invested in high- liquid and low-risk marketable securities. Precautionary
balance should, thus, be held more in marketable securities and relatively less in cash.
Speculative motive:
The speculative motive relates to the holding of cash for investing in profit- making opportunities
as and when they arise. The opportunity to make profit may arise when the security prices change.
The firm will hold cash, when it is expected that interest rates will rise and security prices will
fall. Securities can be benefit by the subsequent fall in interest rates and increase in security
prices. The firm may also speculate on materials prices. If it is accepted that material‟s prices will
fall, the firm can postpone materials‟ purchasing and make purchases in future when price actually
falls

CASH FORECASTING AND BUDGETING
Cash budget is the most significant device to plan for and control cash receipts and payments.
Cash budged is a summary statement of the firm‟s expected cash inflows and outflows over a
projected time period. It gives information on the timing and magnitude of expected cash flows
and cash balances over the projected period .This information helps the financial manager to
determine the future cash needs of the firm, plan for the financing of these needs and exercise
control over the cash and liquidity of the firm .Cash forecasts are needed to prepare cash budgets.
Cash forecasting may be done on short or long- term; those extending beyond one year considered
long- term.
Short- term forecasts:
It is comparatively easy to make short-term forecasts .the important functions of carefully

developed short- term forecasts are:
To determine operating cash requirements

To anticipate short-term financing
To manage investment of surplus cash
The short-term forecast helps in determining the cash requirements for a predetermined period to
run a business. If the cash requirements are not determined, it would not be possible for the
management to know howmuchcash balance to keep in hand, to what extent bank financing be
depended upon and weather surplus funds would be available to invest in marketable securities

Most companies depend upon banks for their temporary financing needs. One of the significant
roles of the short –term forecasts is to pinpoint when the money will be needed and when it can be
repaid. With such forecasts in hands, it will not be difficult for the financial manager to negotiate
short-term financing arrangements with banks this in fact convinces bankers about the ability of
management to run its business.
 Another important function of short –term cash forecast is to help in managing the
investment of surplus cash forecast helps a firm to:
1) Select securities with appropriate maturities and reasonable risk,
2) Avoid over and under-investing &
3) Maximize profits by investing idle money.
Short-term forecasting method:
Two most commonly used methods of short-term cash forecasting are:
 The receipt and disbursements methods

 The adjusted net income method
The receipts and disbursements method is generally employed to forecast for limited periods, such
as a week or a month. The adjusted net income method, on the other hand, is preferred for longer
durations ranging between a few months to a year.
The cash flows can be compared with budgeted income and expenses items if the receipts and
disbursements approach is followed. On the other hand, the adjusted income approach is
appropriate in showing a company‟s working capital and future financing needs.

Long-Term Cash Forecasting:
Long-term cash forecasts are prepared to give an idea of the company‟s financial requirements in
distant future. They are not as detailed as the short-term forecasts. Once a company has developed
long-term cash forecast, it can be used to evaluate the impact of, say, new-product developments
or plant acquisitions on the firm‟s financial condition three, five or more years in the future. The
major uses of the long-term cash forecasts are:
 It indicates as company‟s future financial needs, especially for its working capital
requirements.
 It helps to evaluate proposed capital projects. It pinpoints the cash required to finance
these projects as well as the cash to be generated by the company to support them.
 It helps to improve corporate planning long term cash forecasts compel each division to
plan for future and to formulate projects carefully.
DETERMINING THE OPTIMUM CASH BALANCE:
One of the primary responsibilities of the finance manager is to maintain a sound liquidity
position of the firm so that dues may be settled in time. The firm needs cash not only to purchase
raw materials and pay wages, but also for payment of dividend, interest, taxes and countless other
purposes. The test of liquidity is really the availability of cash to meet the firm‟s obligations when
they become due.
The operating cash balance is maintained for transaction purposes and an additional amount may
be maintained as a buffer or safety stock. The finance manager should determine the appropriate
amount of cash balance. Such a decision is influenced by a tradeoff between risk return. If the
firm maintains small cash balance, neither too small nor too large.

To find out the optimum cash balance, the transaction costs and risks of too small a balance
should be matched with the opportunity costs of too large a balance.
If the firm maintains larger cash balances, its transaction costs would decline, but the opportunity
costs would increase. At point x the sum of two costs is minimum. This is the point of optimum
cash balance which a firm should seek to achieve.
MANAGEMENT OF RECEIVABLES
INTRODUCTION:
Account receivable/sundry debtors constitute the third most important assets category for business
firms, after plant and equipment and inventories. When a business or an industry would like to sell
on cash the pressure of competition and the force of custom persuades them to sell on credit.
Business /Industry grants credit to facilitate sales.
The term receivable is defined as debt owned to the firm by customers arising from sales of goods
or services in the ordinary course of business. When a firm makes an ordinary sale of goods or
services and does not receive payment, the firm grants trade credit and creates account receivable
which would be collected in the future, thus account receivable represent an extension of credit to
customers. Allowing them a receivable period of time in which to pay for the goods, which they
have received, therefore receivables is less than the cost of funds raised to finance that additional
credit.
Credit Evaluation
In extending credit to customers the firm would ensure that receivables will be collected in full
and on due dates. Credit should be granted to those customers who have the ability to make the
payment on time.

BENEFITS OF RECEIVABLES
1.Increase in sales:
Except a few monopolistic firms, most of the firms are required to sell goods on credit, either
because of trade customs or other conditions. Liberalizing the credit terms can further increase the
sales. This will attract more customers to the firm resulting in higher sales and growth of the firm.
2. Increase in profits:
Receivable helps in increase in profits
3.Increase in sales will help the firm:
To easily recover the fixed expenses and attending the breakeven level.
Increase the operating profit of the firm. In a normal situation, there is a positive relation
between the sales volume and the profit.
4. Extra profit:
Sometimes, the firms make the credit sales at a price, which is higher than the usual cash-selling
price. This brings on opportunity to the firm to make extra profit over and above the normal profit.

INVENTORY MANAGEMENT
Inventories are stock of the product a company is manufacturing for sale and components that
make up the product. The various forms in which inventories exist in a manufacturing company
are: Raw materials, Work-in-progress and finished Goods. Inventories constitute the most
significant part of current assets of a large majority of companies. A considerable amount of funds
is required to be committed to them. It is therefore very important to manage inventories
efficiently and effectively.
NEED TO HOLD INVENTORIES
There are three general motives for holding inventories.
Transaction Motive: This emphasizes the need to maintain inventories to facilitate

smooth production and sales operations
Precautionary Motive: This necessitates holding of inventories to guard against the risk
of unpredictable changes in demand and supply forces and other factors.
Speculative Motive: this motive influences the decision to increase or reduce inventory
levels to take advantage of price fluctuations.

OBJECTIVE OF INVENTORY MANAGEMENT:
In the context of inventory management, the firm is faced with the problem of meeting two
conflicting needs that are:
1. Whether to maintain a large size of inventory for efficient and smooth production
sales operation?
2. Whether to maintain a minimum investment in inventories to maximize
profitability?
The objective of inventory management should be to determine and maintain optimum

level of inventory investment. The optimum level of inventory will lie between these two
danger points of excessive and inadequate inventories.
In deciding the optimum level of inventory a firm will have to follow these practices.
 Ensure a continuous supply of raw materials to facilitate uninterrupted production.

 Maintain sufficient stocks of raw materials in periods of short supply and
anticipate price changes.
 Maintain sufficient finished goods inventory for smooth sales operation, and
efficient customer service
 Minimize the carrying cost and time.

CHAPTER-2
INDUSTRY AND
COMPANY PROFILE

HISTORY OF CARS
The story of car is one of the most important and exciting chapters in the history of
transport. Worldwide, there are more than 400 million living to travel for pleasure. People in the
United States often refer to cars as automobiles. In Britain and many other countries, they are
sometimes called motor cars.
Most of the world‟s cars are in the United States, Canada, Japan, and Western Europe. Ways of
life have changed greatly in all those countries because of the car. The development of the car has
meant that city dwellers can travel into the country for a relaxing break, and people can visit
relatives living in remote or distance areas
Before people had cars to drive, they generally walked or rode bicycles when travelling short
distances. Most long-distance travel was by railway, tram, or some king of horse drawn carriage.
In fact, the early cars were called “Houseless carriages.”
The origin of the car can be traced to Europe. But it became a major from of transportation first in
the United States. Most European cars were built by hand, and were expensive. Only rich people
could afford them.
During the late 1700‟s, the development of steam-powered engines progressed rapidly in Europe.
Inventors dreamed of a “Houseless carriages” –a vehicle that could travel under its own power –
and steam seemed the obvious power source.
Nicolas-Joseph Cugnot, a French military engineer built the first self propelled road vehicles in
1769 and 1770. One was designed to carry passengers, while the others were three-wheeled steam
tractor for hauling artillery. In 1801 and 1803, Richard Trevithick of the England demonstrated
four – Wheeled steam- propelled road vehicles (steam car) to carry passengers. But he lacked the
money to continue his work.

Numerous attempts in Britain to promote the use development of stream cars failed because of
competition from railway and stagecoach companies. In 1865, the “Red Flag Law” ended further
development of cars in Britain for about 30 years.
Steam cars had big disadvantages. At first, it took too long for the fire to heat the boiler. Inventors
solved that problem, but other remained. The steam engines had to be practical for cars and so
they had to be high pressure engines to produce the required power.
Electric cars were at first more successful than steam cars .Batteries powered them. Electric cars
quickly became popular because they were quiet, easy to operate, and free of smelly fumes. But
the batteries limited how far or fast electric cars could go. Few electrics could travel faster than 32
kilometers per hour, and the batteries had to be recharged at least every 80 kilometers.
The petrol-engine car as we know today resulted from the development of the internal-combustion
engine. Gases powered the first internal-combustion engines. In 1820, the British inventor
W.Cecil designed an engine driven by the explosion of mixture of hydrogen and air.
In 1885 Gottlieb Daimler and Karl Banz, two Germans working separately, developed the first
successful four-stroke petrol engines. The general design of present-day cars was developed in
France. Emil laves and Rene Pan Hard, partners in a carriage firm, built their first car in 1890. A
Daimler‟s engine powered it.
In the early 1900‟s, Ransom E, Henry Ford, and other pioneers began mass-Producing cars.
Although some people disliked the “Houseless Carriage,” many welcomed the introduction of the
new machine because it would replace horse-drawn carriage. Unsightly horse droppings would no
longer litter the street, creating a terrible stench and attracting disease-tearing flies. No longer
would people be burdened by the need to keep horses or be limited to travelling short distances.
Today, the United States has about 130 million cars, more than any other country. In the
U.S.A, Australia, and France there is approximately one to every two people. The United
Kingdom has approximately one car for every three and Japan one for every four.

Other important car manufacturing countries include Germany, Japan, France, Italy and
Spain. Australia, the Czech Republic, India, South Korea, Malaysia, Sweden and the United
Kingdom also have motor Industries.
IMPORTANCE OF CARS
The development of cars had an enormous effect on people‟s way of life throughout much of the
world. Probably no other invention, discovery, or technological advance has created greater or
more rapid changes in society.
Impact of Society: The car has given many people freedom of movement. The car influences
where people live and work how they spend their leisure time. The striking changes in
people‟s lives created by the car began in the United States and have since spread across much
of the globe, especially in industrialized countries. Before the development of cars, urban
workers walked, cycled, or rode on railway trains or horse-drawn vehicles to their jobs. But as
roads improved and car ownership expanded during the 1920‟s, people increasingly moved to
the suburbs because of freedom provided by car owner. By the mid 1950‟s even factories had
begun to relocate in the suburbs.
Economic impact: Such industrialized nations as the United States, Japan, Germany, the
United Kingdom, and Italy depend on car production to provide jobs for millions of workers.
But even in industrialized nations with little or no car production- Batteries, and grading. They
carefully plan bypass, road junctions, and slip roads leading into major motorways, traffic
signals, and the number of lanes.

CAR INDUSTRY
During the early 1920‟s, the United States made 90 percent of the world‟s cars. By the late
1900‟s, it made only about 20 percent. Yet U.S output has generally climbed since the 1920‟s.
What has happened is that a worldwide production has boomed-from about 101.2 million motor
vehicles in 1950 to more than 45 million in the 1990‟s.
Japan and the unitedStates are the largest car producers .Japan replaced the united states as the top
passenger car manufacturer from 1980 to 1983. It regained the top spot in 1987 and still holds first
place. Other major producers include Germany and the United Kingdom. In general, the largest
car manufacturing countries also have the largest markets for cars. The United States has the
biggest car market by far. Such countries as Japan, Italy and France follow well behind.
A famous British quality car is the Rolls Royce, built ever since 1904. William Morris was the
first British car manufacturer to copy the mass production methods of Henry Ford. Germany owes
much of its success in the world market to the production of the Volkswagen. In1960, Germany
over took Britain and France top become the second largest car producer in the world market,
largely due to the success of companies like BMW and Mercedes-Benz. Its main competitors were
Italy and Japan.
Japan, the major car manufacturing companies in Japan includes Honda, the motorcycle
manufacturers, who began producing cars in 1962. Mazda, who took over Chrysler in 1982,
Nissan and Toyota. Nissan was set up in 1915, but produced only trucks until 1931. In 1986, they
became the first Japanese manufacturers to build cars in Europe when they opened their factory in
Sunderland, Britain.
United States, the “big three” motor manufacturers in the United States are General Motors, Ford
and Chrysler. Their largest suppliers number about 200 major companies, and there are thousands
of smaller suppliers.
Each manufacturer produces, under different trade names, a variety of cars and light trucks. The
car industry also aids many countries economy by its huge consumption the output of other

industries. For example: the typical car requires more than 770 kg of steel; 180 kg of iron 110 kg
of aluminum; and 60 kg of rubber.
World War I (1914-1918) demonstrated the values of car and other petrol-powered vehicles for
military purposes. The war also proved the importance of the car industry‟s mass production
methods. Car production increased greatly during the 1920‟s. During most of that period, business
conditions were good and jobs were plentiful.
MarutiUdyog Limited (MUL) was established in February 1981. Through an act of
parliament.MarutiUdyog Limited “ is a public limited company incorporated under the
Companies Act of 1956. MarutiUdyog Limited is a joint venture of Government of India and
Suzuki Motor Company of Japan. Suzuki motor company was chosen from seven prospective
partners worldwide. A license and a joint venture agreement were signed between the government
of India and Suzuki Motors on October 1982.
December 1983 herald a revolution in the Indian car industry. Maruti collaborated with
Suzuki of Japan to produce the first affordable car for the average Indian. At this time, the Indian
car market has stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983. This
was from where Maruti took over.
MarutiUdyog Limited created history by going into production in a record 13 months.On
14th December 1983, the Prime minister of India, Smt.Indira Gandhi, released the first car by
handing over the key of Maruti 800 to Mr. Harpal Sing of Delhi.
Maruti Udyog limited exceeded the volume targets; sales figure for the year 1993 reached
up to 1, 96,820. In March 1994 Maruti became the first Indian company to manufacture one
million cars, a landmark yet to achieve by any other company in India. It crossed the two million
mark in 1997.
India‟s largest automobile company, Maruti entered the Indian car market with avowed
aim to provide high quality, fuel-efficient, low-cost vehicles. Its cars operate on Japanese
technology, adapted to Indian condition and Indian car users, Maruti comes in variety of models
in the 800 segment.
To fend off growing competition, Maruti has recently completed Rs.4 billion expansion
project at the current site, which has increased the total production capacity to over 3,20,000
vehicles per annum. It has further plans to modernize the existing facilitied and to expand its
capacity by 1,00,000 units in the year 1998-99. The total production of the company will exceed
4,00,000 vehicles per year.
MarutiUdyog Limited is holding equity in 19 Group Companies.
Some of them are:
1) J.J.Impex (New Delhi) Pvt.Lts. - 49%
2) Mark Auto Industries Lets. - 33.90%
3) Maruti Countrywide Auto Financial Services Lets. - 26%

Core Values
 Customer obsession
 Fast, flexible and first move
 Innovation and creativity
 Networking and partnership
 Openness and learning
Vision of MarutiUdyog Limited
 To be leader in Indian automobile industry
 Creating customer delight and shareholder wealth
Objectives of MarutiUdyog Limited
o Modernization of Indian automobile industry.

o Production of fuel efficient vehicles to conserve resources.
o To have a long-term objectives, policies and goals.
o To provide small cars for single families.
o The existing cars in Indian market were not able to satisfy the customers with regards to
fuel efficiency and hence, Maruti 800 was introduced.
o Consumer satisfaction through quality of products and services, achieved by consisted
adherence to producers and systems.
o Teamwork and recognition that each employee is important for the company‟s growth and
prosperity.Organisational and individual discipline.

o Respects for laws, ethics and human beings.
Strengths of MarutiUdyog Limited
 Expertise in small car technology

 Extensive product portfolio.
 Quality products.
 Extensive sales and services network.
 Brand strength.
 Integrated manufacturing facility.
OfMarutiUdyog Limited
1. Maruti cars are winning combinations of Suzuki compact car technology.
All Maruti vehicles are the products of Suzuki‟s worldwide leadership in compact car
technology.A technology that has fine timed the art of maximizing the minimum of providing
compact car with sufficient interior spaces, performances and durability. This is the expression of
phenomenal engineering strength that has taken the lead in designing and entirely new category of
new cars, worldwide.
2. High value and low maintenance
All Maruti cars are packed with value added features. They are engineered to give you
maximum fuel efficiency and require very little maintenance, so we get is superior quality at a
right price.

3.Reliable quality.
With a growing customer‟s base of over two million people, it goes, without saying that
Maruti is synonymous with reliability. It is also a car company that constantly upgrades its
product to suit your changing needs with changing times.
4.The largest Network
The company has strong support base of 178 Maruti showroom and 1029 Maruti
authorized service outlets across 488 cities assuring the best possible service everywhere.
Providing with the state-of-art workshop, Maruti genuine parts and over 30,000 trained personnel,
to make the maintenance of Maruti a non-worry proposition.
5.A range to suit every need
Today, Maruti is the only Indian automobile company that can promise its customers a
wide range of cars to suit a host of different lifestyles.

THE MANAGEMENT TEAM
The key people of MarutiUdyog Limited
 Chairman – Shinzo Nakanishi

 Managing Director-JagadishKhattar
 Director Marketing & Sales-Kinji Saito

J.D.PowerAsiaPacific
2015India VehicleDependabilityStudySM(VDS)
TopThreeModelsperSegment
Problemsper100Vehicles*
CompactCarSegment**

UpperCompactCarSegment
PremiumCompact Car Segment

EntryMidsize CarSegment
MidsizeCar Segment**
MUV/MPVSegment
SUVSegment
*Problemsper100 vehiclesis
measuredviaactualownerfeedbackrelatedtothenumberof“thingsgonewrong.”Alower
scorereflectsbetterqualityperformance.
**Noothermodelinthissegmentperformsabovethesegmentaverage.
Note:Noofficialrankingsarepublishedfortheentrycompactcar,
entryluxurycar,luxurycar,premiummidsize,premium
SUV,andvansegmentsduetoaninsufficientnumberofmodelsinthesesegments.
Source:J.D.PowerAsiaPacific2015IndiaVehicleDependabilityStudySM(VDS)
Chartsandgraphsextractedfromthispressreleaseforusebythemediamustbeaccompaniedby
astatementidentifyingJ.D. PowerAsiaPacificas thepublisherandthestudyfromwhichit
originatedas thesource.Rankingsarebasedonnumerical
scores,andnotnecessarilyonstatisticalsignificance.Noadvertisingorotherpromotionalusecanbe
madeoftheinformation
inthisreleaseorJ.D.PowerAsiaPacificsurveyresultswithouttheexpresspriorwrittenconsentofJ.D.
PowerAsiaPacific.


REPRESENTATION OF SALES AND PAT


REPRESENTATION OF PROFIT AND ALES RATIOS % TO NET SALES


REPRESENTATION OF SALES VOLUME

MILESTONES
 Market share grew from 42% to 54% in the competitive A2 segment (with the
WagonR, Zen and Alto)
 Overall sales increased by 23%. The Alto became India‟s new best-selling car.
 Business World ranked us among the country‟s five most respected automobile
company.
 Business Today-AC Nielsen ORG-MARG declared us one of India‟s Greenest
Companies.
Hindustan Times Power Jobs proclaimed us the company with „the Most Innovative Human
Resource Practices‟
ACCOLADES:
Business standard: company of the year 2010-2011
2009 Global reputation pulse study: MSIL‟s global reputation ranking up from 77 to 49-all
companies, all sectors. Global reputation ranking up from 4 to – Global car companies category.
Maruti ranks 91 in Forbes magazine list of worlds 200 most reputed companies. In the automotive
sectors, Maruti ranked 7th in the world in 2005 gold for maruti Suzuki at the India
manufacturing excellence awards (IMEA)2009,organized by the economic times in partnership
with frost & Sullivan.

ICSI National award for excellence in corporate governance, 2009.
Golden peacock award for excellence in the field of environment management in automobile
sector in 2007
Golden peacock award for sustainability in 2012.
The excellence times &Avaya global connect limited awarded Maruti, avaya global connect-
customer responsiveness award in the automotive category in 2006 &2007
Ranked fourth in an index of thought leaders in India published by London –based

communication agency –Globe scan
NHRDN Trailblazer award 2010 for HRD excellence
Hall of fame award for single handedly changing theface of Indian automobile Industry by car
India in 2011
Mr. R C Bhargava,
Chairman, named the Automobile person of the year, 2013, byIndia‟s popular business
channel, NDTV profit (2012)
Mr. R C Bhargava,
Chairman, selected by the government of Japan for a royal honor.MR.bhargava bestowed with the
order of the rising sun, gold and silver star by his majesty, Emperor Akihito of Japan (2011)
Mr. R C Bhargava,
Chairman, conferred with the economic times lifetime achievement award for
corporate excellence in 2010.

Mr.Ajay Seth,
CFO,MSIL. Business today‟s best CFO Award for consistent liquidity

management in the category of large companies. He received the award from the honorable
finance minister, Mr. Pranabmukherjee in 2011.
Excellent partner award by army on its diamond jubilee celebration in

automobile category for car supply under CSD scheme, 2008
Golden peacock Award-2012 for Occupational health safety performance in

automobile sector in 2012.
Ranked as India‟s most respected automobile company by leading business

magazine, business world, 2007.

SWOT analysis of Maruti Suzuki
Maruti Suzuki is the market leader in India and has an amazing brand equity. Maruti is known for
the service it provides and is synonymous with Maruti 800 – the longest running small car in
India. Here is a SWOT of maruti suzuki, its strengths, weaknesses, opportunities and threats.
Strengths
Maruti Udyog limited (MUL) is in a leadership position in the market with a market share
of 48.74
Major strength of MUL is having largest network of dealers and after sales service centers
in the country.
Good promotional strategy is adopted by MUL to transfer its thoughts to the people
about its products.
Maruti Suzuki recorded highest number of domestic sales with 9,66,447 units from
7,65,533 units in the previous fiscal. It recently attained the 10million domestic sales
mark.
Strong Brand Value and Loyal Customer Base are big strengths for MUL
There are around 15 vehicles in Maruti Product portfolio. Has good product lines with
good fuel efficiency like Maruti Swift, Diesel, Alto etc
Alto still beats the small car segment with highest number of sales
MUL is the first automobile company to start second hand vehicle sales through its True-
value entity.
MUL has good market share and hence it’s after sales service is a major revenue contributor.
Weaknesses
Low interior quality inside the cars when compared to quality players like Hyundai and
other new foreign players like Volkswagen,Nissan etc.
Government intervention due to having share in MUL.
Younger generations started getting a great affinity towards new foreign brands
The management and the company’s labor unions are not in good terms. The recent
strikes of the employees have slowed down production and in turn affecting sales.
Maruti hasn’t proved itself in SUV segment like other players.
Related SWOT of Walt Disney
Opportunities
MUL has launched its LPG version of Wagon R and it was a good move simultaneously
MUL can start R&D on electric cars for a much better substitute of the fuel.
Maruti’scervo 600 has a huge potential in tapping the middle class segment and act as a
strong threat to Nano
New DZire from Maruti will capture the market share and expected to create the same
magic as Maruti Esteem(currently not available)
Export capacity of the company is giving new hopes in American and UK markets
Economic growth of the country is constantly increasing and the government is working
hard to increase the gdp to double digit.
Threats
MUL recently faced a decline in market share from its 50.09% to 48.09 % in the previous
year(2011)
Major players like Maruti Suzuki, Hyundai, Tata has lost its market share due to many
small players like Volkswagen- polo. Ford has shown a considerable increase in market
share due to its Figo.
Tata Motors recent launches like Nano 2012, Indigo e-cs are imposing major threats to its
respective competitor’s segment
China may give a good competition as they are also planning to enter into Indian car
segment
Launch of Hyundai’s H800 may result in the decline of Alto sales

CHAPTER-3
RESEARCH DESIGN

RESEARCH DESIGN
Research design is a statement or specification of procedure for collecting and analyzing the
information required for the solution of a specific problem. It provides a scientific find work for
conducting some research investigation. The conception of research of the research design plan is
a critical step in the research process. The design of the study constitutes blue print for the
collection, measurement, and analysis of the data.
RESEARCH DESIGN OF THE STUDY
The research is by large desk research and involves the following :
Setting up an objective of the study.

Scanning through the standard texts to understand the theory behind working
capital management.
The decision regarding the study period in this case was decided on the basis
of various items in current assets and current liabilities for working capital
management.
Collection of the company‟s specific literature i.e .,company‟s profile and
annual reports over this study period.
Collection of primary and secondary data, related to the functioning of the
company.
Identification of current assets and current liabilities for working capital.

TITLE OF THE STUDY
The title of the study undertaken for the project work is „A study on “WORKING
CAPITAL MANAGEMENT” with specific reference to MARUTI SUZUKI
BIMAL.
STATEMENT OF THE PROBLEM
Working capital is either taken as current asset or as the excess of current asset over current
liabilities. Working capital management Is concerned with the problem that arises in attempting to
manage the current assets, the current liabilities and the inter relationships that exists between
them.
In any industry the working capital is most important as it plays significant role starting from
procuring row materials until it is converted into finished goods. If the working capital is under
invested it results in delay in output of finished products which in turn reduces sales and profits or
if it is over invested, the interest has to be paid on the amount .The payable rate of the field of
working capital management, raw materials, receivables, cash and its management system is very
vast.
The study has been conducted to know the working capital management of the “MARUTI
SUZUKI” to know various ratios of working capital. As working capital is the life blood and
nerve centre of an organization can run successfully without an adequate amount of working
capital.

OBJECTIVES OF THE STUDY
The main objective of the study is to analyze the working capital management of the
company over the study period of the inventories relating to assets and liabilities
during the financial period for the year 2011-15.
The subjective objectives are:
1) To determine the working capital requirement of the company.

2) To study the various component of the working capital of the company.
3) To study the management of the working capital during previous 5 year
4) To study practical difficulties faced by the bank in meeting working capital requirements.
5) To get a clear picture of working capital in the company.
6) To draw valid conclusions and recommendations.
METHODOLOGY OF THE STUDY
The study requires secondary data. The secondary data was obtained from the
past records, files and annual reports of the concern and also from other financial
statement.
SOURCES OF DATA COLLECTION
Data is defined as group of non-random symbols in the firm of text, image, or voice responding
quantities, action as objects. Data is processed into a form that is meaningful to the recipient and
is of real and perceived value in the current or prospective actions or decisions of the recipient.

SECONDARY DATA
Secondary data are those, which already have been collected by some other agency or researcher
with the intention of using it for a particular purpose. The source of secondary data concern‟s data
is about the various records, reports and research studies published.
Significant tools popular with my studies are bank‟s websites, annual reports and books and
magazines
SCOPE OF THE STUDY:
The study mainly deals with working capital management of MARUTI SUZUKI INDIA decision
regarding working capital is not one time decision, so the scope of the study is to identify the
financial performance of the company between the year 2011-15, company growth and profit
earned.
LIMITATIONS:
 Use of ratio as a technique for analysis. Hence all the limitations of ratio analysis are also
applicable.
 Analysis are restricted to 5 years.
 Limited data provided by the company.
 Due to limitations of time, it was usable to go for a deep study.
 Study of working capital management is limited to the information gathered through the
interview and discussions with the company officials and executives.
 The confidentiality of some facts and figure.
 The study is based on secondary data.

CHAPTER SCHEMES:
The overview of the report proceeds as below;
Chapter-1: introduction to the study:

This chapter gives us a general introduction to the study undertaken. It talks about the problems
for which the project has been taken; the definitions of the study; need, objective and the scope of
the study conducted.
Chapter-2:Industry and company profile:
This chapter views the origin, growth and the present status of the organization, i.e.,
MARUTI SUZUKI INDIA. It also covers the functional departments, its
organization structure, its objectives and its future prospects.
Chapter-3: Research design of the study:
This chapter briefly describes the way in which the study is carried out .it provides
information regarding the specific research design followed for the study, sources of
data, data processing and analysis plan of the study, expected contribution of the
study and limitations of the study.

Chapter-4:Analysis and interpretation of data:
In this chapter all calculation pertaining to the study are calculated and
interpreted. Calculations refer to the ratio calculated and changes in working
capital in the study. The trend of the ratios and the changes in working capital
are also projected and interpreted. As it is said that one picture is worth 1000
words, graphs have also been provided for the better understanding.
Chapter-5: Summary of Findings:
Chapter-6: Suggestions and conclusions:

CHAPTER-4
DATA ANALYSIS AND

INTERPRETATIONS

TABLE 4.1
SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR ENDING
31-03-2010 & 31-03-2011
Particulars 2010 2011 Increase in Decrease in

Working capital Working capital
CURRENT ASSETS:
2508.50 2410.30
Cash and bank 98.20
Balance
Sundry debtors 809.90 824.50 14.60
Inventories 1415.00 206.20

1208.80
20116.90 4748.00
TOTALS(A)
CURRENT
LIABILITIES: 3160.00 3861.60
701.60
3160.00 3861.60
Other liabilities
TOTAL(B) -1043.10 886.40

1929.50
(A-B)
1929.50
Increase in working capital
886.40 886.40 2631.10 2631.10
INTERPRETATION:
From the above analysis, it is known that in the year,2010 the working capital is -
1043.1 and in the year 2011 the working capital is 886.4..Hence there is increase in
working capital by – 1929.50

TABLE 4.2
31-03-2011 & 31-03-2012

CURRENT ASSETS:
72.40
Cash and bank 2508.50
Balance 2436.10
Sundry debtors 824.50 937.60

113.10
1796.50
TOTAL(A) 4748.00 5170.20
CURRENT LIABILITIES:
Other liabilities 1476.40

3861.60 5338.00
TOTAL(B)
3861.60 3861.60 5338.00
(A-B) 886.40 -167.80 1054.20
Decrease in working capital 1054.20
886.40 886.40 1548.80 1548.80
INTERPRETATION:
886.40 and in the year 2012 the working capital is -167.80..Hence there is decrease
in working capital by 1054.20

TABLE 4.3
31-03-2012 & 31-03-2013

CURRENT ASSETS:
Cash and bank 1661.10

Balance 2436.10 775.00
Sundry debtors 486.10

937.60 1423.70
Inventories
1796.50 1840.70 44.20
TOTALS(A)
5170.20 4039.40
Other liabilities 5338.00 5845.80

TOTAL(B)
5338.00 5845.80
(A-B)
-167.80 -1806.40 1638.60
1638.60
Decrease in working capital
-167.80 -167.80 2168.90 2168.90
INTERPRETATION:
From the above analysis, it is known that in the year, 2012 the working capital is
–167.80 and in the year 2013 the working capital is -1806.4..Hence there is decrease
in working capital by 1638.60

TABLE 4.4
31-03-2013 & 31-03-2014

CURRENT ASSETS:
145.30
Cash and bank 775.00 629.70
Balance
1423.70 1413.70
Sundry debtors 10.00
134.80
TOTALS(A) 4039.40 3749.30
Other liabilities 5845.80 6996.90

1151.10
TOTAL(B) 5845.80 6996.90
(A-B) -1806.40 -3247.60
1441.20
1441.20
Decrease in working capital
-1806.40 -1806.40 1441.20 1441.20
INTERPRETATION:
From the above analysis, it is known that in the year,2013 the working capital is –
1806.40 and in the year 2014 the working capital is -3247.60..Hence there is
decrease in working capital by 1441.20

TABLE 4.5
31-03-2014 & 31-03-2015

CURRENT ASSETS:
Cash and bank 629.70 18.30

Balance 611.40
1413.70 1069.80 343.90
Sundry debtors
1705.90 2,615.00 909.10
Inventories
TOTALS(A)
3749.30 3703.10
Other liabilities 6996.90 8,013.60 1016.70
TOTAL(B)
6996.90 8,013.60
(A-B)
-3247.60 -4310.50 1062.90
Increase in working capital

1062.90
-3247.60 -3247.60 1972 1972
INTERPRETATION:
3247.60 and in the year 2015 the working capital is - 4310.50..Hence there is
increase in working capital by 1972

GRAPH: 4.1
GRAPH SHOWING CHANGES IN WORKING CAPITAL
WORKING CAPITAL
2000
1000
0
2011 2012 2013 2014 2015
-1000
WORKING CAPITAL
-2000
-3000
-4000
-5000

MEANING OF CURRENT RATIO:

Current ratio is the ratio which expresses relationship between current assets and
current liabilities. This ratio is most commonly used to perform the short term
financial analysis. Also known as the working capital ratio, this ratio matches the
current assets of the firm to its current liabilities.
CURRENT RATIO = CURRENT ASSETS
CURRENT LIABILITIES
TABLE: 4.6:TABLE SHOWING CURRENT RATIO
YEAR CURRENT CURRENT CURRENT

ASSETS LIABILITIES RATIO
2011 4,748.00 3161.60 1.2295
2012 5,170.20 5338.00 0.9685
2013 4,039.40 5845.80 0.6909
2014 3,749.30 6996.90 0.5358
2015 3,703.10 8,013.60 0.4621

GRAPH: 4.2
GRAPHICAL REPRESENTATION OF CURRENT RATIO
CURRENT RATIO
1.4
1.2
0.8
CURRENT RATIO
0.6
0.4
0.2
0
2011 2012 2013 2014 2015

INFERENCE:
The current ratio in the year 2010-11 is 1.2295, in the year 2011-12 is 0.9685, in the year 2012-13
is 0.6909, in the year 2013-14 is 0.5358, in the year 2014-15 is 0.4621 .from this above analysis it
is known that there has been a raise in current ratio in first year, proceeding which there has been
a decreasing trend.
As a convention 2:1 is the slandered current ratio which means current assets
should be double the current liabilities. Hence we observe that the current assets are
not sufficient to meet the current liabilities.

MEANING OF INVENTORY TURNOVER RATIO

Inventory turnover ratio is the ratio which expresses the relationship between the net sales and
average inventory. It is known as stock turnover ratio. It indicates the efficiency of a firm‟s
inventory management
INVENTORY TURNOVER RATIO = NET SALES
AVERAGE INVENTORY
TABLE:4.7: TABLE SHOWING INVENTORY TURNOVER RATIO
YEAR NET SALES AVERAGE INVENTORY

INVENTORIES TURNOVER
RATIO
2011 36618.40 1311.90 27.912
2012 35587.10 1605.75 22.162
2013 43587.10 1818.60 23.968
2014 43700.60 1773.30 24.644
2015 49970.60 1241.75 40.242

GRAPH: 4.3
GRAPHICAL REPRESENTATION OF INVENTORY TURNOVER RATIO
INVENTORY TURNOVER RATIO

45
40
35
30
25
20
15
10
0
2011 2012 2013 2014 2015
INFERENCE:
The inventory ratio in the year 2010-2011 is 27.912,in the year 2011-2012 is 22.162, in the year
2012-2013 is 23.968, in the year 2013-2014 is 24.644, in the year 2014-15 is 40.242.
A high stock turnover ratio is good as it indicates more sales from each rupee of investment in
stock. But in case we notice that the stock turnover ratio is very high which may be due to very
low level of stock which results in frequent out of stock position

MEANING OF QUICKRATIO:
This ratio is also known as acid test ratio or liquid ratio. It is a more severe test of liquidity of a
company than the current ratio. It shows the ability of a business to meet its immediate financial
commitments .it is the ratio between liquid assets and liquid liabilities
QUICK RATIO= LIQUID ASSETS
LIQUID LIABILITIES
TABLE: 4.8: TABLE SHOWING QUICK RATIO
YEAR LIQUID ASSETS LIQUID QUICK RATIO

LIABILITIES
2011 3333 3861.60 0.8631
2012 3373.70 5338.00 0.6320
2013 2198.70 5845.80 0.3761
2014 2043.40 6996.90 0.2920
2015 1088.10 8013.60 0.1258

GRAPH: 4.4
GRAPHICAL REPRESENTATION OF QUICK RATIO
QUICK RATIO
1
0.9
0.8
0.7
0.6
0.5
QUICK RATIO
0.4
0.3
0.2
0.1
0
2011 2012 2013 2014 2015
INFERENCE:
The quick ratio in the year 2010-11 is 0.8631, in the year 2011-12 is 0.6320, in the
year 2012-13 is 0.3761, in the year 2013-14 is 0.2920. We observe that the ratio of
the first year has been low and it has seen a raise the next year ,followed by which
there has been a decreasing trend of quick ratio

MEANING OFWORKING CAPITAL TURNOVER RATIO

Working capital turnover ratio indicates the velocity of the utilization of net working capital.this
ratio indicates the number of times the working capital is turned over in the course of the year .
This ratio measures the efficiency with which the working capital is being used by a firm
WORKING CAPITAL TURNOVER R RATIO =NET SALES
NET WORKING CAPITAL
TABLE:4.9:TABLE SHOWING WORKING CAPITAL TURNOVER RATIO
YEAR SALES NET WORKING WORKING CAPITAL

CAPITAL TURNOVER RATIO
2011 36,618.40 886.40 41.311
2012 35,587.10 -167.80 -212.08
2013 43,587.90 -1806.40 -24.129
2014 43,700.70 -3247.60 -13.456
2015 49,970.60 -5970.20 -8.370

CHART: 4.5
GRAPHICAL REPRESENTATION OF WORKING CAPITAL

TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO

100
50
0
2011 2012 2013 2014 2015
-50
-100
-150
-200
-250
INFERENCE:
The working capital turnover ratio in the year 2010-2011 is -41.311, in the year 2011-12 is -
212.08, in the year 2012-13 is -24.129, in the year 2013-14 is -13,456. We observe that the
working capital turnover ratio for all the five years except the year 2010-11 has seen a negative
ratio

MEANING OF DEBTORS TURNOVERRATIO:

The debtor‟s turnover ratio indicates the relationship between the net credit sales and trade
debtors. It shows the rate at which cash is generated by the turnover of debtors
DEBTORS TURNOVER RATIO=NET CREDIT SALES
AVERAGE TRADE DEBTORS
TABLE: 4.10: TABLE SHOWING DEBTORS TURNOVER RATIO
YEAR NET CREDIT AVERAGE TRADE DEBTORS

SALES DEBTORS TURNOVER
RATIO
2011 36618.40 817.20 44.809
2012 35587.90 881.05 40.391
2013 43587.90 1180.65 36.918
2014 43700.60 1418.70 30.908
2015 49970.60 1241.75 40.242
CHART:4.1
GRAPHICAL REPRESENTATION OF DEBTORS TURNOVER

RATIO
DEBTORS TURNOVER RATIO

50
45
40
35
30
25
20
15
10
0
2011 2012 2013 2014 2015
INFERENCE:
We observe that the debtors turnover ratio for the year 2011 is 44.809,for the year 2012 is
40.391,for the year 2013 is 36.918.year 2014 is 30.908 and for the year 2015 is 40.242 we notice a
declining trend from the year 2012-14 but in the 2015 again it‟s in growth trend
MEANING OF CASH RATIO:

this ratio indicates the relationship between the cash and bank balance ,short term securities and
the current liabilities. it is also the absolute liquidity ratio or shows the cash position of the
company to meet its current liabilities.
CASH RATIO=CASH AND BANK BALANCE+SHORT TERM SECURITIES

CURRENT LIABILITIES
TABLE:4.11:TABLE SHOWING CASH RATIO
YEAR CASH AND BANK CURRENT CASH RATIO

BALANCE LIABILITIES
2011 2508.50 3861.60 0.6496
2012 2436.10 5338.00 0.4563
2013 775.00 5845.80 0.1325
2014 629.70 6996.70 0.0899
2015 18.30 8013.60 0.0023
GRAPH: 4.7
GRAPHICAL REPRESENTATION OF CASH RATIO

CASH RATIO
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2011 2012 2013 2014 2015
INFERENCE:
The cash ratio for the year 2011 is 0.6496, for the year 2012 is 0.4563, for the year 2013 is
0.1325, for the year 2014 is 0.899 and for the year 2015 is 0.0023
We observe that the cash ratio for the year 2011 has been the lowest, where as for the year 2011
has been the highest, there after following a declining trend.
The company has not maintained the standard ratio of 0.5:1, which the company has not
maintained except for the year 2011 and 2012.

CHAPTER-5
SUMMARY OF
FINDINGS

FINDINGS
1. We observe that the working capital over the five years except the year 2011-15 has been
positive only in the year 2011 and rest all the years the working capital balance of the
company has been negative
2. There has been an increase in working capital only in the years 2010-11, there after there
has been a steady decrease in working capital. Hence we observe that the company has not
maintained sufficient current assets to meets its working capital requirements
3. And 2010-11 in the case of current ratio the standard convention ratio is 2:1,which means
the current assets should be double the current liabilities where as in this case we observe
That the current assets are not sufficient to meet requirements
4. A high stock turnover ratio is good as it indicates more sales from each rupee of investment
in stock. Hence it indicates that the company has high sales contributing to the high
inventory turnover.
5. In this case we notice that the stock turnover ratiois very high which may be due to very
low level of stock which results in frequent out of stock positions.
6. The quick ratio indicates a good liquidity value of the company. The liquidity value for the
year 2011 is the highest.
7. The working capital turnover ratio is negative in all years except 2011 and hence we
observe that it has a weak velocity of utilization of working capital

CHAPTER-6
SUGGESTIONS AND
CONCLUSIONS

SUGGESTIONS AND CONCLUSIONS
SUGGESTIONS:
1. The company has to work towards maintaining an increase in working capital, as it is

very essential for the effective functioning of the company.
2. The company has to maintain more of current assets than current liabilities to have a
better working capital.
3. The liquidity value of the company has to be increased in order to meet continuous
needs of the company. A liquidity position ensures safety for the company in times of
contingencies.
4. The working capital utilization of the company should be improvised in order to

maintain efficient management of capital.
5. The stock turnover ratio is high indicating higher risk out of stock positions, hence the
stock level has to be increased in order to meet the immediate requirement as a result of
which profits can be increased.

6. A good working capital position of a company indicates the company‟s strong position
in its worth, the result of which it can improve its goodwill among its investors, debtors
creditors and shareholders‟ hence the company has to maintain a good working capital
management.
7. The company should maintain working management controls in place

CONCLUSIONS
The above study provides us to draw the following conclusions:
1. The company has had huge net profits during the five financial years showing the
increased demand for its products in the market. The company has a huge market
reputation which is very evident with its high scales value.
2. The company has a poor working capital management, which is not a positive sign of a
good financial performance of the company. The company has to work towardsimproved
capital management to increased its profits during the coming years by maintaining a
positive working capital which follows an increasing trend.
3. Overall it has been a great learning experience doing this project helping me gain a deeper
insight into the concept of working capital.

BIBLIOGRAPHY

BIBLIOGRAPHY:
BOOKS:
Appannaiah and reddy and ramanath:
Research design: business research methods, Mrs., meenapandey. For Himalaya publishing house
pvt Ltd.
Management accounting M.N. Arrora for Himalaya publishing house pvt.Ltd
REPORTS:
Annual report of MARUTI SUZUKI INDIA
Of 2010-11, 2011-12, 2012-13. 2013-14, 2014-15
WEBSITES
www.google.com
www.moneycontrol.com

ANNEXURE

Balance Sheet of Maruti Suzuki India ------------------- in Rs. Cr. -------------------
Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
12 mths 12 mths 12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 151.00 151.00 151.00 144.50 144.50
Equity Share Capital 151.00 151.00 151.00 144.50 144.50
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 23,553.20 20,827.00 18,427.90 15,042.90 13,723.00
Net worth 23,704.20 20,978.00 18,578.90 15,187.40 13,867.50
Secured Loans 0.00 0.00 0.00 0.00 0.00
Unsecured Loans 180.20 1,685.10 1,389.20 1,078.30 170.20
Total Debt 180.20 1,685.10 1,389.20 1,078.30 170.20
Total Liabilities 23,884.40 22,663.10 19,968.10 16,265.70 14,037.70
Application Of Funds
Gross Block 26,076.90 22,435.00 19,633.90 14,678.30 11,718.60
Less: Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Less: Accum. Depreciation 13,817.60 11,644.60 9,834.70 7,157.60 6,189.20
Net Block 12,259.30 10,790.40 9,799.20 7,520.70 5,529.40
Capital Work in Progress 1,882.80 2,621.40 1,940.90 611.40 862.50
Investments 12,814.00 10,117.90 7,078.30 6,147.40 5,106.80
Inventories 2,615.00 1,705.90 1,840.70 1,796.50 1,415.00
Sundry Debtors 1,069.80 1,413.70 1,469.90 937.60 824.50
Cash and Bank Balance 18.30 629.70 775.00 2,436.10 2,508.50
Total Current Assets 3,703.10 3,749.30 4,085.60 5,170.20 4,748.00
Loans and Advances 2,891.80 3,256.70 3,830.20 2,852.50 2,178.40
Fixed Deposits 0.00 0.00 0.00 0.00 0.00
Total CA, Loans & Advances 6,594.90 7,006.00 7,915.80 8,022.70 6,926.40
Deferred Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 8,013.60 6,996.90 5,892.00 5,338.00 3,861.60
Provisions 1,653.00 875.70 874.10 698.50 525.80
Total CL & Provisions 9,666.60 7,872.60 6,766.10 6,036.50 4,387.40
Net Current Assets -3,071.70 -866.60 1,149.70 1,986.20 2,539.00
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 23,884.40 22,663.10 19,968.10 16,265.70 14,037.70
contingent Liabilities 9,228.60 7,210.20 8,193.30 6,108.00 6,384.80

Book Value (Rs) 784.70 694.45 615.03 525.68 479.99

Profit & Loss account of Maruti Suzuki India ------------------- in Rs. Cr. -------------------
Income
Sales Turnover 55,133.60 48,878.60 49,090.00 35,587.10 36,618.40
Excise Duty 5,163.00 5,178.00 5,502.10 0.00 0.00
Net Sales 49,970.60 43,700.60 43,587.90 35,587.10 36,618.40
Other Income 831.60 822.90 812.40 826.80 508.80
Stock Adjustments 455.90 -18.50 -23.40 131.20 56.00
Total Income 51,258.10 44,505.00 44,376.90 36,545.10 37,183.20
Expenditure
Raw Materials 35,713.10 31,495.00 32,722.00 28,330.60 28,490.10
Power & Fuel Cost 712.30 594.10 493.70 229.50 210.20
Employee Cost 1,606.60 1,368.10 1,069.60 843.80 703.60
Other Manufacturing Expenses 0.00 0.00 0.00 0.00 0.00
Selling and Admin Expenses 0.00 0.00 0.00 0.00 0.00
Miscellaneous Expenses 5,681.60 5,129.00 5,049.60 3,801.40 3,632.00
Preoperative Exp Capitalized 0.00 0.00 0.00 0.00 0.00
Total Expenses 43,713.60 38,586.20 39,334.90 33,205.30 33,035.90
Operating Profit 6,712.90 5,095.90 4,229.60 2,513.00 3,638.50

PBDIT 7,544.50 5,918.80 5,042.00 3,339.80 4,147.30
Interest 206.00 175.90 189.80 55.20 25.00
PBDT 7,338.50 5,742.90 4,852.20 3,284.60 4,122.30
Depreciation 2,470.30 2,084.40 1,861.20 1,138.40 1,013.50
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 4,868.20 3,658.50 2,991.00 2,146.20 3,108.80
Extra-ordinary items 0.00 0.00 0.00 0.00 0.00
PBT (Post Extra-ord Items) 4,868.20 3,658.50 2,991.00 2,146.20 3,108.80
Tax 1,157.00 875.50 598.90 511.00 820.20
Reported Net Profit 3,711.20 2,783.00 2,392.10 1,635.20 2,288.60
Total Value Addition 8,000.50 7,091.20 6,612.90 4,874.70 4,545.80
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 755.20 362.50 241.70 216.70 216.70
Corporate Dividend Tax 153.80 61.60 41.10 35.10 35.10
Per share data (annualized)
Shares in issue (lakhs) 3,020.80 3,020.80 3,020.80 2,889.10 2,889.10
Earnings Per Share (Rs) 122.85 92.13 79.19 56.60 79.21
Equity Dividend (%) 500.00 240.00 160.00 150.00 150.00
Book Value (Rs) 784.70 694.45 615.03 525.68 479.99


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WORKING CAPITAL MANAGEMENT

“A STUDY OF WORKING CAPITAL MANAGEMENT OF

MARUTI SUZUKI –SURAKSHAA CAR CARE PVT.LTD.”

Submitted in partial fulfillment of the requirement of the award of the degree

MR. SARAVANA KUMAR R

Under the guidelines of

NEW HORIZON COLLEGE

MARATHALLI BANGALORE -560087

NEW HORIZON COLLEGE Page1

I, SARAVANA KUMAR R student of bachelor of business management, NEW HORIZON

COLLEGE BANGALORE, bearing registration number 13VFC24090 declare this project

entitled “ A STUDY ON WORKING CAPITAL MANAGEMENT” OF MARUTI SUZUKI-

management to Bangalore University,

Place: Bangalore Name: SARAVANA KUMAR R

NEW HORIZON COLLEGE Page2

Certified that the project report entitled “A STUDY ON WORKING CAPITAL

MANAGEMENT” OF MARUTI SUZUKI - SURAKSHAA CAR CARE PVT.LTD”‟

submitted by MR.SARAVANA KUMAR R bearing registration no. 13VFC24090 to bangalore

university in partial fulfillment for the award of “Bachelor of Business Management” of

the award of any other degree or diploma of any university.

Place: Bangalore MRS. SREEJA NAIR

NEW HORIZON COLLEGE Page3

This is to certify that SARAVANA KUMAR R (13VFC24090) is bonafide student of bachelor of

business management. The project work entitle “ A STUDY ON WORKING CAPITAL

MANAGEMENT” OF MARUTI SUZUKI-SURAKSHAA CAR CARE PVT.LTD”„is

bonafide work carried out by SARAVANA KUMAR R (13VFC24090) on partial fulfillment of

Place: Bangalore PRASANNA PRAKASH

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This is to certify that SARAVANA KUMAR R (13VFC24090) bonafide student of

this college. The project work entitled“ A STUDY ON WORKING CAPITAL

MANAGEMENT” OF MARUTI SUZUKI-SURAKSHAA CAR CARE PVT.LTD”„is

bonafide work carried out by SARAVANA KUMAR R (13VFC24090) in partial

fulfillment of requirement for the award of degree in business management of

Bangalore University during the year 2015-2016.

Place: Bangalore Dr. R.BODHI SATVAN

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CHAPTER No. CHAPTER NAME Pg.no

Chapter-1 INTRODUCTION 1-31

INDUSTRY PROFILE AND COMPANY

Chapter-3 RESEARCH DESIGN 53-58

DATA ANALYSIS AND 59-78

Chapter-6 SUGGESTIONS AND CONCLUSIONS 81-83

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SL.NO LIST OF TABLES PAGE NO

4.1 Table showing statement of changes in working capital for 59

4.7 Table showing the inventory turnover ratio 68

4.8 Table showing the quick ratio 70

4.9 Table showing the working capital turnover ratio 72

4.10 Table showing the debtors turnover ratio 74

4.11 Table showing the cash ratio 77

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SL.NO LIST OF GRAPHS PAGE NO

Graph showing changes in working capital

Graph showing the current ratio

Graph showing the inventory turnover ratio

Graph showing the quick ratio

Graph showing the working capital turnover ratio

Graph showing the debtors turnover ratio

Graph showing the cash ratio

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The project on working capital management of MARUTI SUZUKI-SURAKSHAA CAR