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A project is well organized and undertaken with related activities to achieve a goal of the study.

This project was undertaken at GANDHIMATHI APPLIANCES LTD. The Company is a profit

making organization, which manufactures and sells products like Cookers, flasks, mixers etc., It

export products to other countries which serves as source of revenue for the company.

Efficiency of the organization depends upon how well they manage their short term funds.

Hence, a study on working capital management is done in “GANDHIMATHI APPLIANCES

LTD”. Working Capital Management is concerned with the problems arise in attempting to

manage the Current assets, Current liabilities and the inter relationship between them. The goal

of working capital management is to manage the firm’s current assets and current liabilities in

such a way that the satisfactory level of working capital is maintained. The current assets should

be large enough to cover its current liabilities in order to ensure a reasonable margin of safety.

Working Capital Management policies have a great effect on firm’s profitability, liquidity and its

structural health. A Finance Manager should, therefore, check out appropriate working capital

management policies to ensure higher profitability, proper liquidity and sound structural health

of the organization

Every business needs adequate liquid resources in order to maintain day-To-day cash flow. It

needs enough cash to pay wages and salaries as they fall due and to pay creditors if it is to keep

its workforce and ensure its supplies.


Maintaining adequate working capital is not just important in the short-term. Sufficient liquidity

must be maintained in order to ensure the survival of the business in the long-term as well.

Even a profitable business may fail if it does not have adequate cash flow to meet its liabilities as

they fall due. Therefore, when businesses make investment decisions they must not only

Consider the financial outlay involved with acquiring the new machine or the new building, etc,

but must also take account of the additional current assets that are usually involved with any

expansion of activity. Increased production tends to engender a need to hold additional stocks of

raw materials and work in progress. Increased sales usually mean that the level of debtors will

increase. A general increase in the firm’s scale of operations tends to imply a need for greater

levels of cash.



India has emerged as one of the world's top ten countries in industrial production as per
UNIDO's new report titled 'Yearbook of Industrial Statistics 2010'.India surpassed Canada,
Brazil and Mexico in 2009 to reach the 9th position from the 12th position it held in 2008.

The Index of Industrial Production (IIP) quick estimates data for October 2010 shows a
growth of 11.3 per cent in the manufacturing sector as compared to October 2009. The
cumulative growth during April-October 2009-10 over the corresponding period of 2008-09 is 11
per cent, according to data by the Ministry of Statistics and Program Implementation.

The selling industry in India is generally defined as a low investments and high returns
affair. The rapid growth of the selling market in India means that sales in the country could bring
in more than $1 billion by the fiscal year ending March 2013. The World Federation of direct
Selling Associations made the forecast.

The Association pointed out that the current Indian market for direct selling products is
worth around U$600m and provides employment to around 1.8 million people, of which 1.2
million are women. Hence, though India continues to witness a phenomenal growth of shopping
malls and specialty retail stores, direct selling industry, too, is on a fast route to success.



India is ranked second in terms of manufacturing competence, according to report '2010
Global Manufacturing Competitiveness Index', by Deloitte Touché Tohmatsu and the US
Council on Competitiveness. The report states that the country's talent pool of scientists,
researchers, and engineers, together with its English-speaking workforce and democratic regime
make it an attractive destination for manufacturers.

India, the direct selling industry has shown a robust growth, bringing numerous
individuals in its fold through its entrepreneurial nature of activity. Today, the industry
encompasses a size of INR 33,300 million, bringing into its fold nearly 1.8 million people and
having posted a healthy growth rate of 17% in 2008-2009.”


Home Appliances are that without which a modern home is considered incomplete, especially in
urban areas. We have become so used to some of the home appliances that it seems difficult to live
without them. Indeed, they have made our life more comfortable and easier than ever. In metro cities
and big towns, such household appliances are regarded as a boon, as they are instrumental in cutting
down the time involved in most of the domestic chores. This is really a great help since people often
find it difficult to keep a balance between professional obligation and household needs.


Products such as microwave ovens, juicer- mixer- grinder, fully automatic washing machines, and
frost- free refrigerators are the most popular category of home appliances. This is because they have
made the work of housewives less tiresome and more enjoying. Most of the domestic appliances are
useful in various kitchen related jobs and hence are termed as kitchen appliances. Gas stoves,
toasters, microwave ovens, mixer & grinders, juicers & blenders, rotti makers, refrigerators, water
purifiers are some of the most common kitchen appliances in India. Besides, there is a category of
electronic products that have become an integral part of modern houses. These are air conditioners,
fans, room coolers, room heaters, geysers, electrical irons etc.



There are many Home Appliance companies in India like Videocon, Voltas, Godrej, Blue star, Ken
star etc. Apart from them there are various international companies also that deal in domestic
appliances. Some of these home appliances manufacturers are Samsung, LG, IFB, Whirlpool, and
Kenmore etc. With the arrival of international brands in Indian market, the competition among rival
companies have become stiff, which results in further improvement in qualities and depreciation in
prices of most of the home appliances in India. Since, a majority of products is electrically operated;
the focus is on such household appliances that are efficient in power consumption.


Most of the leading home appliances manufacturers and companies have set up their exclusive
retail outlets in important towns and cities of the country. Besides, there are local home
appliances suppliers, manufacturers, wholesalers and retailers spread throughout India. Apart
from that, Home Appliances stores and shops are located in every locality, which let you
compare products of different companies before buying and also let you buy all kinds of home
appliance products at one place. Some manufacturers also offer after sale service, and if needed,
repair the damaged parts of your electronic products. So here you will find the sites of some of
the leading Home Appliances manufacturers and suppliers.

Samsung: Samsung India has its head office in Delhi and 19 branches all over the country. It
manufacturers a comprehensive range of home appliances such as microwave ovens, refrigerator,
air conditioners and washing machines. All these products come in various sizes and styles and
offer various functions according to your need and budget.

LG- Life's Good: LG Electronics is a South Korean company and was established in India in
1997. They started their business with manufacturing of Color Televisions, LG Washing
Machines, Air-Conditioners and Microwave Ovens and other electronics products. Till date it
has gained a reputed name in Indian home appliances industry and serving their customers
satisfactorily from the past one decade.


Videocon: There are number of Home Appliances companies in India among which Videocon is one of them who tops the list. Godrej: Godrej is one of the prominent manufacturers of home appliances in India. Its domestic appliances products include refrigerators. microwave. mixer grinder. and toaster. sandwich maker. They offer full warranty on their products. 6 . air conditioners and cooking ranges. washing machines. Their domestic products include refrigerators of various types. television etc. Its kitchen appliances are vast such as rotti maker.

under the enterprising leadership of Mr. tool & die-making facilities with an impetus on quality control. BUTTERFLY is all set to conquer wider horizons. Middle East and the East Asian Countries. Pioneers in Stainless Steel Appliances started operations four decades ago. to keep up its passion for progress at all levels. kitchen products and cookware. and acquire the ISO 9002 certification. 7 . Four state-of-the-art-manufacturing units. Their products are also exported to the United Kingdom. The company was the first in India. Our in-house design facilities. Australia. Serving the customer with the finest quality products and adapting to the changing needs and tastes of customers have been the company’s primary motive.3 COMPANY PROFILE The Butterfly Group. backed by the latest D facilities ensure total compliance to standards of excellence in design and quality. V Murugesa Chettiar and his sons. Across the globe. to introduce Stainless Steel Pressure Cookers and Vacuum Flasks. The Success of Butterfly is attributed to its customer orientation. has enabled us to consistently produce products of the highest quality sticking to the finest functionality norms. Over the years. in the LPG and Mixie divisions. Spectrum Analyzer etc. Canada. Butterfly manufactures a comprehensive range of home appliances. the BUTTERFLY Group has grown from just manufacturing a handful of basic kitchen utensils to an organization involved in a comprehensive range of domestic appliances. 1. Quality and Consistency are our prime motivating factors. Today. This passion would constantly give birth to new product ranges Over the years. Butterfly products have been recognized for their quality standards by various international organizations. The Company’s R&D facilities has the latest design and development tools. Butterfly has grown to be a household name among millions in India. Japan. among others. The Company has state of the art manufacturing facility. kitchen products and cookware.




kitchen products. 11 . The company’s Butterfly product line includes LPG stoves. pressure cookers. vacuum flasks and lunch boxes. mixer grinders. tabletop wet grinders. and cookware products in India. ELECTRIC COOKERS The manufacture and sale of stainless steel home appliances.

the Middle East. Its products also comprise electric cookers. Japan. backed by the latest R&D facilities ensure total compliance to standards of excellence in design and quality. Australia. But. The company exports its products primarily to the United Kingdom. and ensemble products. kitchen sinks. Four state-of-the-art-manufacturing units. Gandhimathi Appliances Limited is based in Chennai. the company has established branches across the country. 12 . it manufactures a comprehensive range of home appliances. Today. Canada. and the East Asian countries. and dinner sets. and cookware sets. water filters. The company's products command a premium valuation in the home appliances market. kitchen products and cookware. India. The company has excellent reach in South India and I don't have the details on North India.

1. planed properly and reviewed periodically at regular intervals. 13 . monitored efficiently.5 NEED FOR THE STUDY Study of the working capital management is important because unless the Working Capital is managed effectively. bottlenecks cannot be removed so that the company cannot earn Profit and increases its turnover.

receivables and each management  To project the important ratio is pertaining to working capital management for near future year. 14 . SECONDARY  To find out the size of working capital and to measure its liquidity and operational efficiency by using ratio analysis.6 OBJECTIVE OF THE STUDY PRIMARY To analyze the working capital management of Gandhimathi appliances. 1.  To make an element wise analysis of working capital and to identify the elements of responsible for variable for variation in working capital  To evaluate the performance of the company through inventory.

7 SCOPE OF THE STUDY The scope of the study is identified after and during the study is conducted. industry analysis were not considered while preparing this project. 15 . And even factors like competitors analysis. The study of working capital is based on tools like RATIO ANALYSIS. Further the study is based on last 5years Annual Reports of GANDHIMATHI APPLIANCES Ltd. 1. WORKING CAPITAL ANALYSIS & TREND ANALYSIS.

the time given for our research was limited. • The project is based on the Annual Report of five years. Conclusions and recommendations are based on such limited data. It constitutes only a part of data collection i. Moreover. 1. The trend of last three years may or may not reflect the actual Working Capital position of the company.8 LIMITATION OF THE STUDY • The project has been done with Annual Reports. There were limitations to primary data due to confidentiality.e. 16 . secondary.

Working Capital = Current Assets Net Working Capital = Current Assets − Current Liabilities Equity Working Capital = Current Assets − Current Liabilities − Long-term Deb 17 . Working capital refers to that part of firm’s capital which is required for financing short term or current assets such as cash.e. No business can run successfully without an adequate amount of working capital. Working capital means the funds (i. working capital is very essential to maintain the smooth running of a business. It consists broadly of that portion of assets of a business which are used in or related to its current operations.1 REVIEWOF LITERATURE WORKING CAPITAL MANAGEMENT MEANING: Working capital is the life blood and nerve centre of a business. 2. capital) available and used for day to day operations (i. working) of an enterprise.. marketable securities. It refers to funds which are used during an accounting period to generate a current income of a type which is consistent with major purpose of a firm existence. In other words working capital is the amount of funds necessary to cover the cost of operating the enterprise. debtors.e. and inventories.. Just as circulation of blood is essential in the human body for maintaining life.

FACTORS: The working capital requirement of a concern depends upon a large number of factors such as • Size of business • Nature of character of business. • Seasonal variations working capital cycle 18 . meet the short-term obligations of the business. Working capital is needed to pay for planned and unexpected expenses. components and spares. • To provide credit facilities to the customers. and to build the business OBJECTIVES: Every business needs some amount of working capital. • To pay wages and salaries. It is needed for following purposes- • For the purchase of raw materials. • To incur day to day expenses and overhead costs such as fuel.DEFINITION: Working capital is how much in liquid assets that a company has on hand. and office expenses. power.

SOURCES: The working capital requirements should be met both from short term as well as long term sources of funds. • Operating efficiency • Profit level. • Temporary working capital: The amount of such working capital keeps on fluctuating from time to time on the basis of business activities. • Financing of working capital through long term sources provides the benefits of reduces risk and increases liquidity TYPES: • Permanent working capital: It refers to that minimum amount of investment in all current assets which is required at all times to carry out minimum level of business activities. 19 . • Financing of working capital through short term sources of funds has the benefits of lower cost and establishing close relationship with banks.

NEED: The amount of funds tied up in working capital would not typically be a constant figure throughout the year. etc. For most businesses there would be weekly fluctuations. would be at higher levels at some predictable times of the year than at others. This means that sales. stocks. and • A fluctuating part The fixed part is probably defined in amount as the minimum working capital requirement for the year. Only in the most unusual of businesses would there be a constant need for working capital funding. debtors. It is widely advocated that the firm should be funded in the way shown in the diagram below: 20 . the working capital need can be separated into two parts: • A fixed part. Many businesses operate in industries that have seasonal changes in demand. In principle.

• It creates an environment of security. 21 . and overall efficiency in a business. • It helps in maintaining solvency of the business. • It can arrange loans from banks and others on easy and favorable terms. • It enables a concern to face business crisis in emergencies such as depression. confidence.ADVANTAGES: • It helps the business concern in maintaining the goodwill.

It will be interesting to understand the relationship between working capital. Both situations are dangerous. risk and return. Operating cycle can be said to be the heart of the need for working capital. The flow begins with conversion of cash into raw materials which are. • Inadequate working capital cannot pay its short term liabilities in time A firm must have adequate working capital. Working capital sometimes is referred to as “circulating capital”. in turn transformed into work-in-progress and then to finished goods. as much as needed the firm. Collection of receivables brings back the cycle to cash. Inadequate working capital means the firm does not have sufficient funds for running its operations. 22 . presuming goods are sold as credit. i. • Excess working capital may result into over all inefficiency in organization.e. • Excess working capital means idle funds which earn no profits. It should be neither excessive nor inadequate.DISADVANTAGES: • Rate of return on investments also fall with the shortage of working capital. Excessive working capital means the firm has idle funds which earn no profits for the firm. With the sale finished goods turn into accounts receivable..

it’s a cash outflow: The Company had to shell out money to buy the extra assets. When changes in working capital are negative. changes in working capital are a little like capital spending: its money the company is investing—in things like inventory—in order to grow. When a company increases its current assets. Likewise. the company is investing heavily in its current assets. one can add back changes in working capital to cash flow from operations. the company is either selling off current assets or else raising its current liabilities. When changes in working capital are positive. To get a true picture of the cash a company is generating before investment. provide money. Another point: A negative value for changes in working capital could mean the company is investing heavily in growth. For the Pros For many growing companies.CHANGES: The excess of current assets over current liabilities is referred to as the company’s working capital. The difference between the working capital for two given reporting periods is called the change in working capital. when a company increases its current liabilities. Changes in working capital simply show the net effect on cash flows of this adding and subtracting from current assets and current liabilities. or that something’s 23 . or else drastically reducing its current liabilities. Changes in working capital is included in cash flow from operations because companies typically increase and decrease their current assets and current liabilities to fund their ongoing operations. it’s a cash inflow: The added liabilities. such as short-term debt.

INCREASES WORKING CAPITAL DECREASE IN ASSET-DECREASES WORKING CAPITAL INCREASE IN CURRENT LIABILITY-DECREASES WORKING CAPITAL DECREASE IN CURRENT LIABLITY-INCREASES WORKING CAPITAL SCHEDULE OF CHANGES IN WORKING CAPITAL PARTICULARS YEAR YEAR INCREASE DECREASE Rs Rs Rs Rs CURRENT ASSET • Cash XXX XXX XX - • Bank Balance XXX XXX XXX - • Stock XXX XXX . inventories will balloon. XXX • Sundry debtors XXX XXX XXX - • Trading Investment XXX XXX . The following are the “PRINCIPLES” for the preparation of working capital statement INCREASE IN ASSET.gone wrong. If a company is having trouble selling its goods. and changes in working capital will turn sharply negative. XXX • Prepaid expenses XXX XXX XXX - XXX XXX TOTAL(A) CURENT LIABILITY • Creditors XXX XXX XXX • Bills payable XXX XXX XXX • Outstanding expenses XXX XXX XXX • Short term loans • Bank overdraft XXX XXX XXX XXX XXX XXX XXX XXX TOTAL(B) WORKING CAPITAL(A-B) XXX XXX 24 .

NETINCREASE/DECREASE XXX XXX XXX IN WORKING CAPITAL WORKING CAPITAL CYCLE As we know working capital is the life blood and the centre of a business. The liquidity position of the firm is totally effected by the management of working capital. Adequate amount of working capital is very much essential for the smooth running of the business. And the most important part is the efficient management of working capital in right time. a study of changes in 25 . So.

such as: • Ratio analysis. The analysis of working capital can be conducted through a number of devices. This involves the need of working capital analysis. • Working capital analysis • Trend analysis. 26 .the uses and sources of working capital is necessary to evaluate the efficiency with which the working capital is employed in a business.

1. Whoever performs an operational audit. such audits are also conducted by external auditors and by company managers who wish to make self-audits. AN OPERATIONAL AUDIT OF WORKING CAPITAL MANAGEMENT Abstract An operational audit (or value-for-money audit) is an organized search for ways of improving efficiency and effectiveness. the objective is to assist managers in performing their daily functions more effectively and economically. However. In effect. Virtually all large companies conduct operational audits in their major production and service departments. Urges those organizations seeking concentrated working capital reduction 2. an operational audit is an early warning system for the detection of potentially destructive problems. Traditionally. Proposes that stock reduction generates system-wide financial improvements and other important benefits. operational audits have been conducted by means of a questionnaire interview of departmental employees. Working capital management: an urgent need to refocus Abstract Argues that attempts to improve working capital by delaying payment to creditors are counter- productive to individuals and to the economy as a whole. Although internal auditors have traditionally performed most operational audits. Claims that altering debtor and creditor levels for individual tiers within a value system will rarely produce any net benefit. Perhaps this oversight is caused by the view that the controllership and treasury functions are high-level departments that are not susceptible to scrutiny by internal 27 . working capital management has often been ignored in these audits.

this article is intended to end the oversight. or by a treasurer who merely wants to perform a self-audit of his or her own department's efficiency and effectiveness. Whatever the reason. Alternatively. Effects of working capital management on SME profitability Abstract Purpose – The object of the research presented in this paper is to provide empirical evidence on the effects of working capital management on the profitability of a sample of small and medium- sized Spanish firms. The authors tested the effects of working capital management on SME profitability using the panel data methodology. Working Capital Management and The Management of Foreign Exchange Risk Abstract As is true for all areas of financial management. Findings – The results. and market value of a change in exchange rates—may affect working capital management. which are robust to the presence of endogeneity. An operational audit can lead to better management of working capital in the same way that it can lead to better management of a production area. This article is concerned with selected aspects of how foreign exchange risk—the potential impact on a MNC's profitability. demonstrate that managers can create value by reducing their inventories and the number of days for which their 28 .auditors. working capital management is more complex for the multinational corporation (MNC) than for firms engaged in only domestic operations. the oversight may be attributable to the feeling that there is little standardization of duties among controllers and treasurers in the management of working capital. 4. 3. net cash flows. The questionnaire in Exhibit 1 can be used by internal auditors. Design/methodology/approach – The authors have collected a panel of 8. Such incremental complexity is due to a number of reasons related to the effects of operating in diverse economic and political climates and tax jurisdictions.872 small to medium- sized enterprises (SMEs) covering the period 1996-2002.

Management of Working Capital: A Neglected Subject Abstract Economic recessions have severely stretched the financial resources of many businesses. Determinants and Management of Working Capital Investment Abstract A multiperiod analysis of working capital investment is outlined. Second. 6. Moreover. Originality/value – This work contributes to the literature in two ways. 29 . in the current work robust test have been conducted for the possible presence of endogeneity problems.accounts are outstanding. The Mechanics. An attempt is also made to clarify the objects of working capital management by reference to wealth maximization orthodoxy. shortening the cash conversion cycle also improves the firm's profitability. First. The aim is to ensure that the relationships found in the analysis carried out are due to the effects of the cash conversion cycle on corporate profitability and not vice versa. no previous such evidence exists for the case of SMEs. 5. unlike previous studies. One result has been to focus attention on the management of working capital in companies that have often had to remain solvent by shrinking.

secondary data are collected from company records profile. audited annual report. This is not originally collected for the first time In this research. 30 . The data collected by this method consist of all answers obtained with first hand In this research primary data is collected an unstructured interview with official Secondary data This refers to the information that is collected for a purpose other than to solve the specific problems under investigation. The research design constitutes the blue print for the collection measurement and analysis of data SOURCES OF DATA Primary data This refers to the information that is generated to meet the specific requirement of the investigation at hand. and collected from on line integrated information system. RESEARCH METHODOLOGY Research is a careful investigation or enquiry especially through search for new fact in any branch of knowledge RESEARCH DESIGN Research design is an overall operational pattern or frame work of the project that stipulates on what information is to be collected. from which source any by which procedures.

Statement Showing Changes In Working Capital 2.TOOLS AND TECHNIQUES OF THE STUDY 1. Ratio Analysis 3. Trend Analysis 31 .

35 44.45 2456.62 6316.69 (2.88 2008 1409.18 4.73 15.1.61 2010 2790.27 3159.1a TABLE SHOWING RETURN ON INVESTMENT YEAR OPERATING CAPITAL RATIO PROFIT EMPLOYED 2005 (51.26 19.20 2007 488.72 945.19 44. DATA ANALYSIS AND INTERPRETATION 4.32) 2006 143.57) 2226.1b CHART SHOWING RETURN ON INVESTMENT INFERENCE: 32 .1.

1.2b CHART SHOWING OPERATING PROFIT RATIO INFERENCE: 33 .45 6858.27 4.57) 2117.72 3474.27 16055.12 2008 1409.1.38 10.77 2010 2790.75 (2.1 4.57 8.43) 2006 143. 4.2a TABLE SHOWING OPERATING PROFIT RATIO YEAR OPERATING SALES RATIO PROFIT 2005 (51.62 2762.14 2007 488.39 7.

3 6858.27 2117.57 5.23 27162.38 5.3a TABLE SHOWING NET PROFIT RATIO year NET PROFIT SALES ratio 2005 170. 4.3b CHART SHOWING NET PROFIT RATIO INFERENCE: 34 .04 2006 (110.14 16055.10 (3.39 4.17) 2007 291.26) 3474.24 2008 950.73 4.1.92 2010 1558.1.75 8.

72 1.04 4.1.39 1475.57 1421.23 2007 6858.63 4.4a TABLE SHOWING FIXED ASSET TURNOVER RATIO YEAR SALES FIXED RATIO ASSETS 2005 2117.75 1677. 4.10 1559.1.65 2008 16055.65 11.29 2010 27162.37 14.42 2.38 1934.4b CHART SHOWING FIXED ASSET TURNOVER RATIO INFERENCE: 35 .26 2006 3474.

24 2010 27162.38 4381.1.5a TABLE SHOWING WORKING CAPITAL TURNOVER RATIO year SALES NET WORKING ratio CAPITAL 2005 2117.70 9.99 2008 16055.97 3.20 4.39 980.5b CHART SHOWING WORKING CAPITAL TURNOVER RATIO 36 .66 2007 6858.62 6.82 6.1.57 1737.4.10 613.86 2006 3474.69 5.75 548.

10 661.1.05 7.1.67 7.INFERENCE: 4.6b CHART SHOWING DEBTORS TURNOVER RATIO 37 .51 2006 3474.38 2896.25 2007 6858.18 6.6a TABLE SHOWING DEBTORS TURNOVER RATIO year SALES AVERAGE ratio ACCOUNTS RECEIVABLE 2005 2117.44 2010 27162.00 2008 16055.37 4.75 325.78 5.74 9.39 979.57 2157.

92 4.44 2.00 2.1.7a TABLE SHOWING DEBTORS COLLECTION PERIOD RATIO year MONTHS DEBTORS ratio TURNOVER RATIO 2005 12 6.84 2006 12 5.1.14 2008 18 7.7b CHART SHOWING DEBTORS COLLECTION PERIOD RATIO INFERENCE: 38 .51 1.28 2007 15 7.25 2.INFERENCE: 4.37 1.42 2010 18 9.

71 13.91 2008 943.95 2006 2025.1.05 2007 3971.81 2.53 1219.45 1062.06 1241.19 2.21 1363.90 4.10 0.88 2010 17260. 4.8a TABLE SHOWING CREDITORS TURNOVER RATIO year PURCHASE AVERAGE ratio ACCOUNTS PAYABLE 2005 1167.8b CHART SHOWING CREDITORS TURNOVER RATIO INFERENCE: 39 .53 0.05 988.1.

95 12.45 2010 18 13.88 20.1.29 4.90 1.1.85 2007 15 2.63 2006 12 2.15 2008 18 0.05 5.4.9b CHART SHOWING CREDITORS PAYMENT PERIOD RATIO 40 .9a TABLE SHOWING CREDITORS PAYMENT PERIOD RATIO year MONTHS CREDITOR ratio TURNOVER PERIOD 2005 12 0.91 5.

10b CHART SHOWING CAPITAL TURNOVER RATIO INFERENCE: 41 .95 2006 3474.30 4.08 2010 27162.19 4.69 0.35 5.1.73 3.INFERENCE: 4.75 2226.39 2456.38 6316.79 2008 16055.67 2007 6858.1.10 945.10a TABLE SHOWING CAPITAL TURNOVER RATIO year SALES CAPITAL ratio EMPLOYED 2005 2117.57 3159.26 2.

02 2008 16055.39 526.1.80 13.37 13.11b CHART SHOWING INVENTORY TURNOVER RATIO INFERENCE: 42 .53 8.1.11a TABLE SHOWING INVENTORY TURNOVER RATIO year SALES AVERAGE ratio STOCK 2005 2117.58 6.75 3304.38 20095.54 16. 4.52 4.10 409.41 2006 3474.48 2007 6858.90 2010 27162.57 949.

15 2008 18 16.1.52 0. 4.90 0.12b CHART SHOWING INVENTORY TURNOVER RATIO INFERENCE: 43 .42 2007 15 13.1.41 1.94 2010 18 13.75 4.02 1.12a TABLE SHOWING INVENTORY TURNOVER RATIO year MONTHS INVENTORY ratio TURNOVER RATIO 2005 12 6.48 1.87 2006 12 8.

71 2006 1339.35 2617.1.93 3. 4.21 1799.69 0.88 2008 3983.12 2010 8998.23 2042.79 1302.72 1877.13b CHART SHOWING CURRENT RATIO INFERENCE: 44 .43 4.13a TABLE SHOWING CURRENT RATIO year CURRENT CURRENT ratio RATIO LIABILTIES 2005 918.1.74 2007 1808.13 0.20 0.97 2.

798 5.943 2.409 38.406 45 .228 130213271 NET WORKING CAPITAL (A-B) 12.578.152 INFERENCE: The above table discloses that there is increase in working capital for the year 2004-2005 was 28.609.406 CAPITAL TOTAL (38.819 91.TABLE4.407) (38.222 TOTAL (B) 1.369.397 32.922.406 28.850.142.864.959.045 6.1.874.994.00.724  Cash & bank balance 8.229 PROVISIONS 1.878.163.864 CURRENT LIABILITIES 97.407) 40.518.244 1.484 2.14: SHOWING CHANGES IN WORKING CAPITAL FOR THE YEAR 2004- 2005 PARTICULARS 2004 (Rs) 2005 (Rs) Increase In Decrease In Working Working Capital Capital CURRENT ASSETS:  Inventories 28.611 9.576 2.803 TOTAL (A) 88.27.426.334.407 INCREASE IN WORKING 30.520.952 37.152 40.527 1.898  Loans & advances 21.704.659  Sundry debtors

136 2.213.714.205.407 46.79.339 48.015 46 .989.724 18.14: SHOWING CHANGES IN WORKING CAPITAL FOR THE YEAR 2005- 2006 PARTICULARS 2005 (Rs) 2006 (Rs) increase in decrease in working working capital capital CURRENT ASSETS:  Inventories 37.108 4.850.714.091  Loans & advances 18.422 50.827 INFERENCE: The above table discloses that there is increase in working capital for the year 2005-2006 was 7.786.473 1.TABLE4.777.426.232.617 33.484 66.798 3.422 46.422 INCREASE IN WORKING 7.513.334.482 NET WORKING CAPITAL (A-B) 38.76.518.045 5.056.143 7.192.133  Cash & bank balance 2.345 TOTAL (B) 1.30.878.015 7.232.588  Sundry debtors 32.271 1.048.520.27.76.827 50.199 6.1.653.616 TOTAL (A) 91.969.714.060 CURRENT LIABILITIES 1.866 PROVISIONS 2.33.660.015 CAPITAL TOTAL 46.990.921.173.864 44.178.048.

048.905  Loans & advances 18.650.04.520.136 6.255 TOTAL (A) CURRENT LIABILITIES 1.723 49.655 PROVISIONS 3.204  Sundry debtors 66.509.956 22.143 4.956 47 .513.723 INFERENCE: The above table discloses that there is decrease in working capital for the year 2006-2007 was 22.79.614  Cash & bank balance 5.777.422) (46.000 1.15: SHOWING CHANGES IN WORKING CAPITAL FOR THE YEAR 2006- 2007 PARTICULARS 2006 (Rs) 2007 (Rs) Increase In Decrease In Working Working Capital Capital CURRENT ASSETS:  Inventories 44.104.231 31.994 22.TABLE4.969.699.048.003.922.650.904.726.173.247.108 61.650. 49.904.905.994 NET WORKING CAPITAL (A-B) (46.303.422) (23.041 9.482 2.857 TOTAL (B) 97.339 1.853 3.327.30.956 CAPITAL TOTAL (46.466) DECREASE IN WORKING 22.403 17.056.

04.549.301.104.533.986.147 TOTAL (B) 2.828.840 2.780 31.012 1.33.853 47.605.99.575.812 CURRENT LIABILITIES 1.013.973.303.861.780  Sundry debtors 97.575.57. 33.822.905.840 2.39.340 2.781  Cash & bank balance 6.338.575.1.39.453 INFERENCE: The above table discloses that there is increase in working capital for the year 2007-2008 was 2.372.973.453 2.641 PROVISIONS 4.17.509.986.973.183 67.353 22.500 NET WORKING CAPITAL (A-B) (23.17.231 2.16: SHOWING CHANGES IN WORKING CAPITAL FOR THE YEAR 2007- 2008 PARTICULARS 2007 (Rs) 2008 (Rs) Increase In Decrease In Working Working Capital Capital CURRENT ASSETS:  Inventories 61.306 2.77.661.466) 2.927 TOTAL (A) 1.000 10.10.796.699.33.80.365 5.87.994 1.10.520.041 6.840 INCREASE IN WORKING 2.397.TABLE 4.15.306 CAPITAL TOTAL 2.28.528 3.994 1.436.324  Loans & advances 6.306 48 .

638.533.302.183 2.04.337.15.858 INFERENCE: The above table discloses that there is increase in working capital for the year 2008-2010 was 4.085  Sundry debtors TOTAL (B) 2.333.500 NET WORKING CAPITAL (A-B) 2.780 3.77.466.674.866. 49 .338.804 1.TABLE4.219.27.796.145 11.479 INCREASE IN WORKING 4.98.494 PROVISIONS 10.994 1.28.337 739077325  Cash & bank balance 6.10.340 CURRENT LIABILITIES 1.638 CAPITAL TOTAL 6.08.372.780  Loans & advances 47.18.42. 27.611 TOTAL (A) 1.391 2.661.657 1.528 1.925.17: SHOWING CHANGES IN WORKING CAPITAL FOR THE YEAR 2008- 2010 PARTICULARS 2008 (Rs) 2010 (Rs) Increase In Decrease In Working Working Capital Capital CURRENT ASSETS:  Inventories 1.479 1.44.365 18.841 6.012 2.388.697.767.268 1.333.822.479 6.469. 1.638 4.87.466.

60 2008 950.15 TOTAL 2889.53x The equation of the straight-line trend is Y1 = .91 -2 Solving 1 and 2 we get a= (151.26) -1 1 1 (110.26) 291.30 950.42 2010 1588.27 (110.43+331.23 2 5 25 7941.68 0 11 39 11263.30 0 2 4 582.68 -1 Σxy= aΣx+bΣx2=11263.26) 2007 291.YEAR 2005 2006 2007 2008 2010 PROFIT 170.53x 50 .27 -2 0 0 0 2006 (110.14 1588.43) b= 331.91 N=5 Σy= Na+bΣx= 2889.14 1 3 9 2850.151.23 (Rs in crores) Y1= a+bx Year Profit Deviation X X2 XY From 2007 2005 170.

10 2007 2 -151.43+1989.43+331.43+331. However.53x Y1 Trend 2005 0 -151.18 Y2011=1837. there is a difference between actual and estimated values.75 51 .22.43+331. actual profit for the year 2010 is 1588.22 As per the trend value.53(4) 1506.Trend values Year X Y1= -151.43+331.63 2008 3 -151.53(2) 511.53(1) 180. Trend value for 2011 Value X for the year 2011 will be 6 Y2011= .151.43+331.43+331.23.53(0) -151. Therefore. estimated profit of the year 2010 is 1506.43+331.53(6) = -151. This difference is likely to be there because estimates are based on certain assumptions and only in rare circumstances both the figures will completely coincide.16 2010 5 -151.53(3) 843.43 2006 1 -151.

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