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CHAPTER 01:
INTRODUCTION

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INTRODUCTION
ANCILLIARY INDUSTRIES IN INDIA
A balance industrial growth constant with social integrity calls for diffused and the possession
and manage and decentralized growth of industries, this is feasible when only if new entrepreneurship is
developed in the organization. The accelerations of procedure one of the important method of
encouraging the new entrepreneurs to expand and setup small scale units in the corporation, this is so
because the running of ancillary industry does not offer a permission to increase difficult problems in
industry. Familiarization makes it potential for entrepreneurs to setup superior relationship with all and
large units, in this situation that ancillaries to gives a very strong and large increase stand for industrial
development and achieving their goals.

The require of co-existences of industries having difference in range of the firm and as well as products
are inter sectorial. Co-operation along with them has been known for the development of industrial
divisions, and this inter sectorial co-operation is knowing by other different terminologies wiz, sub
contraction, vendor-vendee relation, acceleration, preferred supplies etc.

Definition and Nature of Ancillaries

Usually the word ancillary industries are referring to the industries are those which manufacturers the
parts of components and for supply to firms which manufacture are collect the products, Ancillary
industries are enterprise having investment within the permanent property in plant and equipment not
more than rupees 75,00,000 and it occupied in,

1. The ancillary’s industries produce of part, machinery and sub assembly, tooling or
intermediaries.
2. The rending of services and the supply or else rending of propose to provide before make 30%
of their manufacture the whole services because the reason might further unit for manufacture or
further articles.

Nature

The government has issued clarifications and brief explanations on definition of ancillaries from time to
time. These are as follows,

1. Units produced intermediaries will be recognized as ancillary of units.

2. The firm proving servicing facilities e.g. pressure cleaning, sends blasting machining and
grinding will get recognized as ancillary industry.

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3. The concept of parent units will also include small scale industries also one small industry
function as ancillary to another.
4. A firm to be known as ancillary be supposed to provide or purpose towards the provide at least
50% of its manufacture to individual or additional parent units.

Development of Ancillary Industries in India

The development of Indian economy lies in decentralized industrialization viz. the development of
small-scale industries and cottage industry. So, that’s why the government of India took certain policies
plans incentives, benefits to improve small scale industries and setup more and more small scale and
ancillary industry through 5-year plans in India.

During the initial plan period the main important emphasis was given to develop heavy machinery
building industry as for example, in 1948 industrial policy resolution had laid down to as well arms and
bullets, tiny power and railway transfer which would exist the domination of the middle administration.
The condition would be wholly accountable intended for the organization of the central administration,
and also the state would exist wholly accountable for the founding of novel activities in six basic
industry had to depend on imports in short and the immediate post of the industries. In the early period
of industrialization most of the industries had to depend on imports short and the immediate post-
independence period. The emphasis as on the establishment of large industries without simultaneous and
the stress on dispersal through small-scale industries.

In ancillary’s industries the study group selected to determine industries working development and
regulation Act 1951observed that the implementation of the industrial policy had not up to the hope and
had created certain anomalies in usual of rural urban disparities the stagnation in actual investment and
extensive industrial illness. So the 1977 industrial policy laid particular notice on the development of the
tiny sector and expansion of the list of items kept intended for the small scale division from 180 items to
over 500 things. The establishment of district industries centers, creation of divides using in the
industrial development bank of India to deal exclusively with credit necessities of small scale, village,
and cottage industries.

Advantages of Acceleration

1. The Subcontracting process leads to deduction in overheads infrastructure charge and in this
way it enables the parent’s unit and services without a corresponding increase in investment
of capital. The owner of a noted manufacturing work an ancillary to premier to Bajaj Auto,

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Automobiles ltd, Telco etc., and it says in this regard that overheads and wages costs of
such units are much lower than those of large firms.
2. Another main important benefit of smaller units is the absence of unions and greater
freedom from lab our disputes and strikes in industry.
3. MRTP licensing law acts as a contributory factor in the growth of sub contraction of
ancillaries. That has been noted that because of capacity restriction under this huge firms
have begun to relieve of components and sub-assemblies to release internal capability.
4. The increase in the cost of capital has one more reason for rising of ancillaries, the size of
exercise taxes to a large number of extra items also added to the expand of ancillaries and
also small scale units where either exempted from excise duties (or) subject to a
comparatively lower rates of excise which in turn gave an important stimulus for the big
units to sub contract their productions to smaller units.
5. Ancillaries units are free from the usual worries about the marketing of their products.

Products of Ancillaries

The important main problem faced by ancillary units is their vulnerability to variation in demand, when
the large-scale manufacture industry producing an end product forces. In order the ancillary units
supplying the machinery is it hard and may have to remain almost ideal until the demand for the product
reviews for the developed industry.

An ancillary unit as a “captive unit” the ancillary unit is extremely specialized and modified to meet
the requirements of a particular assembly it is not possible to switch over to any other items without
incurring losses account of machinery installed. Its difficulties are often provoked by delay in the
payment of bills during items of severity. In India unlike other countries the ancillaries sponsored by
large units. This dependence may be unavoidable in the initial stage of development.

Origin of Springs

“Good beginning makes good ending”

Historical Developments

We find the oldest spring date from about 1400 BC in the form of dress pins. The material used was
hammered bronze wire. The production of springs from steel wire with low carbon content became
likely with the development of wires drawing among the 12 th to 15th centuries. The oldest known design
of such springs came from Leonora do-va Vinci in about 1500 BC. He used to felt spiral as well as
helical comprehension springs. According to him Thomas, in the year 1703 planned two helical springs
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coiled in opposite direction in a cylindrical house and his springs assembly. For the postponement of
carrying bodies, Leopold 2 in the year 1726 produced the spring balance still known today with a helical
solidity spring.

In the 70’s of the 19 th century a new method for the manufacture of steel wire came into seen in
England in which the wire was subjected to as particular heat action(patenting), previous to drawing the
wire so produced till today stand for the most usually used fabric for the majority of all helical springs in

the ancillary industry.

1.2 Theoretical Background:

Introduction to Working Capital Productivity:

Working capital, also known as net working capital, generally it is difference between current assets
such as cash, account receivables, inventories, cash at bank and as well as finished goods and its current
liabilities, such as accounts payable.

The main 4 components of working capital:

➢ Trade receivables
➢ Inventory
➢ Cash and bank balances
➢ Trade payables

Working capital can be classified into four types they are,

1. Gross working capital: Gross working capital it represents the total current assets of the
company it can be convertible into cash within a year or less than a year such as cash, account
receivable, inventory, short term investments, and marketable securities.
2. Net working capital: Networking capital it is the difference between current assets and current
liabilities of the company. Generally, the larger net working capital helps to cover the company’s
current obligations.
3. Permanent working capital: Permanent working capital is the amount that is current assets
over current liabilities which is helps to company even during in the dullest period.
4. Temporary working capital: Temporary working capital is the fluctuation of networking
capital over and above the permanent working capital. It is additional working capital based on
seasonal changes and market demand changes or any other special event occur which are not
predictable.

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Factors Affecting the Working Capital:

1. Nature of Industry: One of the important factors influencing the amount of working capital is
the nature of industry. The term nature of industry refers to whether a concern is a manufacturing
concern or public utility concern.
2. Size of business: Size of the business is another important factor influencing the amount of
working capital. The term size of the scale of operation. A large-scale organization may require
more amount of working capital than a small one.
3. Production policies: The production policy that is the plan for production has great influence on
the amount of working capital. Production policy refers to whether the firm is capital intensive or
labor intensive. In case of labor intensive industries the working capital requirements will be
more when compared to capital-intensive industries. In such industries the requirement of long-
term funds will be more than the amount of working capital.
4. Volume of sales: the volume of sales and size of working capital are directly related to each
other. As the volume of sales increases there is an increase in the investment of working capital.
5. Credit policy: A firm which allows liberal credits to its customer, may enjoy higher sales but
may need more amount of working capital when compared to a firm enforcing strict credit terms.
Similarly, the working capital requirements are also affected by the credit facilities enjoyed by
the firm.
6. Business Cycle: Business fluctuations lead to cyclical and seasonal changes in production and
sales and affect the working capital requirements. The business expands during the period of
prosperity and declines during the period of depression. Consequently, more working capital is
required during the period of depression.
7. Fluctuations in the supply of raw materials: If prompt and adequate supply of raw materials,
spares, stores, etc. is available, it is possible to manage with small amount of working capital.
However, if supply is seasonal, or channelized through government agencies, etc. It is essential
to keep larger stocks increasing working capital requirements.
8. Price level changes: Inflationary trends in the economy necessitate more working capital to
maintain the same level of activity. Generally, raising price level requires a firm to maintain
higher amount of working capital and vice versa.
9. Profit Margin: A high net profit margin contributes towards the working capital requirements.
Therefore, the amount of working capital required will be less. A low profit margin requires a
greater amount of working capital. In fact, the net profit is a source of working capital to the
extent it has been earned in cash.
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10. Dividend policy: The amount of profit available towards working capital needs would be
affected by the way in which profits are appropriated. The availability of cash from operation
depends upon dividend policy. Payment of dividend policy. Payment of dividend utilizes cash
while retaining profits acts as a source of working capital. Thus, dividend policies affect working
capital.
11. Abnormal factors: Abnormal factors like strikes and lockouts also require additional working
capital. Recessionary conditions necessitate a higher amount of stock of finished goods
remaining in stock. Similarly, inflationary conditions necessitate more funds for working capital
to maintain the same amount of current assets.

WORKING CAPITAL PRODUCTIVITY:

Working capital productivity is measured by examining the relationship between company’s sales or
turnover and spending of available funds. It is calculated by dividing sales by working capital that is
current assets minus current liabilities.

Working capital productivity helps us to measure the company’s efficiency.

It is also measure whether a business has invested in a sufficient amount working capital to supports its
sales.

WORKING CAPITAL PRODUCTVITY ANALYSIS:

1. Current Ratio: The current ratio is a liquidity ratio that measures a company’s ability to pay
short-term obligations or those due within one year. It tells investors and analysts how a
company can maximize the current assets on its balance sheet to satisfy its current debt and other
payables.
2. Inventory Turnover Ratio: Inventory turnover ratio is financial ratio showing how many times
a company has sold and replaced inventory during a given period. A company can then divide
the days in the period by the inventory turnover formula to calculate the days it takes to sell the
inventory on hand.
3. Average Collection Period: The average collection period is the amount of time it takes for a
business to receive payments owned by its clients in terms of account receivable(AR).
Companies calculate the average collection period to make sure they have enough cash on hand
to meet their financial obligations.
4. Net Profit Ratio: The net profit margin, or simply net margin, measures how much net income
or profit is generated as a percentage of revenue. It is the ratio of net profits to revenues for

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company or business segment. Net profit margin is typically expressed as a percentage but can
also be represented in decimal form. The net profit margin illustrates how much of each dollar in
revenue collected by a company translates into profit.
5. Return on capital employed: Return on capital employed is a financial ratio that can be used in
assessing a company’s profitability and capital efficiency. In other words, this ratio can help to
understand how well a company is generating profits from its capital as it is put to use.
The ROCE ratio is one of several profitability ratios financial managers, stakeholders, and
potential investors may be when analyzing a company for investment.
6. Return on Asset: Return on assets(ROA) is an indicator of how profitable a company is relative
to its total assets. ROA gives a manager, investor, or analyst an idea as to how efficient a
company’s management is at using its assets to generate earnings.
7. Working capital ratio: Working capital turnover is a ratio that measures how efficiently a
company is using its working capital to support sales and growth. Also known as net sales to
working capital turnover measures the relationship between the funds used to finance a
company’s operations and the revenues a company generates to continue operations and turn a
profit.

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Chapter 2

Research methodology

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2.1 Title of the project

“A study on Working Capital Productivity with special reference to Hindustan Spring Manufacturing
Company”

2.2 Statement of the problem:

The management of Account Receivables is a major component of the corporate financing, as it affects

liquidity, productivity and business growth directly.

The management of accounts receivable, intended to ensure an optimal balance between the individual
components of the account receivable that is cash, debt, inventory and payable is a fundamental part of
the overall strategy to create corporate values and a fundamental source of business competitiveness
and therefore profitability.

2.3 Objectives of Research:

➢ To study working capital productivity of the selected spring manufacturing firms in India.
➢ To study the correlation between working capital productivity and profitability of selected
spring manufacturing firms in India.

2.4 Scope of the Study:

➢ The present study comprises the 5 selected spring manufacturing in India. The period of
research work is for 6 weeks.

2.5 Need for the study:

Several scholarly papers on the management of working capital are available at various firms, both
in India and abroad. And there are few studies explicitly focusing on the account receivables
management of Indian firms so this research work is an attempt to find the relationship between the
account receivable variables and the productivity of the listed Indian Spring Manufacturing Firms.

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2.6 Literature Review:

1.Mehmet Sen, Can Deniz Koksal and Eda Orav,(2015): In this study author going to analyze that
the effect of change in working capital is compared by the company size and sectors. This study related
to the company listed in Istanbul stock exchange took data of 60 periods based on 3 month financial
table for 15 years for each firms. The main aim of this study is to find out relationship between the
efficiency levels of working capital management and sizes of companies. And from this study they
finally concluded that management inefficiency in the issue of inventory management related with ISE
companies is seen as a major result.

2.Ntui Ponsian, Kiemi Chrispina, Gwatako Tago, Halim Mkibi, (2015): This study helps to find out
the effect of working capital management on company profitability. Study aims is to examine the
statistical significance working capital management and its profitability. Study adopted the quantitative
approach to test a series of research hypotheses. Taken 3 manufacturing company from Dar es Salaam
Stock exchange. Methodology were used pearson’s correlation and regression analysis. The main
findings from this study is positive relationship between cash conversion cycle and average payment
period with profitability and remaining liquidity , average collection period and inventory turnover in
days have negative relationship between profitability.

3.Syed Ahean Jamil, Mawih Kareem Al Ani, Faris Nasif Al Shubiri,(2015): This study related to
examine the effect of working capital management efficiency on the operating performance of the
industrial company in Oman. 37 out of 48 industrial companies were taken as sample. The research
methodology contains regression analysis, multicollinearity test. From this study the result revealed that
first model is significant and second model is insignificant. Finally it concluded that the industrial
company should enhance there working capital efficiency to increase the NOP.

4.Sumathi and Narasimhaiah,(2016): This study related to Infosys and this study helps to examine the
effect of working capital on the profitability. The objective of this study is to analyze the relationship
between working capital management and profits of the firm , effects of different components of
working capital and profits of the firm and to give suggestion for improvement for successful survival.
Research methods includes analysis of ratio, z score test, liquidity test and solvency test. And this study
finally concluded that the overall position of the company is satisfactory there is major need is required
for improvement of inventory.
5.Ruhollah Samadi and Mir Hadi Moazen Jamshidi, (2016): This study have a aim to investigate the
relationship between aggressive strategies in working capital management and dividend yield in listed
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companies in Tehran Stock Exchange. The study population consist of 116 companies the financial data
took from 1987 to 1991. The results obtained from this study showed that there is an inverse relationship
between aggressive strategies of capital management and productivity of companies listed in Tehran
stock exchange.

6.Ajanku, Emmanueal Ademola & Ekundayo, Oluwayomi Ayoade(2017):

This study ascertain the effect of Account Receivable on profitability of selected metal manufacturing
companies in Osun state , Nigeria. The main objective of this study is to determine the effect of account
payable on profitability and also assess the effect of inventories on profitability. The population for this
consists of 15 metal manufacturing companies. Purposive sampling method was used in this study. The
study reveal that there was a significant positive effect of WCM on organizations performance and also
ensures that Accounts payable had direct significant impact on profitability of selected manufacturing
company.

7.Dr.R. Siva Ram Prasad and B. Hima Lakshmi,(2018): This study aims to evaluate that efficiency of
selected pharmaceutical industry in India. 15 companies randomly selected the main objective of the
study is to identify the efficiency of working capital management of selected companies. This study
adopted index developed by Battacharya in 1997. From this study author concluded that out of 15
companies 10 companies are god at maintaining the working capital and remaining 5 companies need to
improve in the working capital management.

8.Wayan Cipta, Komang Krisna Heryanda,(2018): This study conducted on wayang craftsmen in
Nagasepaha village the main objective of this study is to maximize the role of
MSME’s in maintaining economic stability. The research was explanatory research which aimed to
explain working capital and product innovation. From this study result would come wayang making
very significant decline because wayang is durable product not used daily. The productivity of the
company is only 2% because of less innovation adopted this leads to poor working capital management.

9.Parul Bhatia and Priya Gupta,(2018): This study related to analyze of impact of working capital
efficiency on firm’s profitability study on manufacturing sectors in India. In this study took a sample of
141 S&P RSE listed manufacturing companies had been taken. The objective of this study is to testing
association between CCC and NPM. The panel data analysis technique was used. The main findings
from this study that is 14.43% of variation in operating profits may be explained by CCC of firms. This
study limited to two variables only.

10.Nurlaela (2018), This article based on two companies engaged in food industry that is Mayora Indah
Tbk and PT Siantar top Tbk. The main objective of this article is to comparing with each other to know
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whether the management of working capital owned has been managed properly and to the competing
company can be a company to date. The method used in this study is descriptive analysis method with
financial ratio analysis. From this study author find that Mayora Indah Tbk more efficient use of
working capital than PT Siantor top Tbk.

11.Muzakir Achmady,(2020): This study objective is to analyze the liquidity on profitability in

manufacturing companies listed in Indonesia stock exchange in the period of 201418 and to evaluate
liquidity on sales as well as liquidity on working capital. The methodology used in this study is Cash
conversion cycle management. From this study the liquidity position of a company is materially
affected by the level of account receivables, inventories and current liabilities the effective management
of these components can lead to create good liquidity conditions of the companies.

12.Satyendra Sharma(2020), This study aims to evaluates the working capital management efficiency
of Indian manufacturing industries by using DEA that is data envelopment analysis taking sample of
1391 Indian manufacturing firms covering the period 2008-19. From this day author find that WCM
efficiency of manufacturing industries has been stable and he also find that the capacity to generate
internal resources, size, age, productivity, GDP and interest rate significantly influence WCM
efficiency.

Research Methodology:

• The Research Design:

The research design used to constitute is descriptive research design
• Sampling Design:
-Sampling Unit: Selected 5 auto ancillary spring industry.
-Sampling Frame: Selected companies in India.
-Sampling Technique: All the companies which have data from 2016- 2020.
-Sampling Size: 6 companies.

• Data collection methods:

- Primary sources: Primary data is gathered through interactions with executions from the
finance department.( Hindustan spring manufacturing company)
- Secondary sources: Secondary data from the capital database is collected, Google Scholar
etc..

Data collection tool: Secondary data is collected from Capitaline.

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2.8 Limitations:

• The time horizon is very short and cannot be done in detail in a through analysis.
• The validity and the reliability of data are restricted as the data used are secondary in nature.

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Chapter 3

Industry and company profile

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3.2 COMPANY PROFILE

Hindustan spring manufacturing company was established in the year 1976 under the partnership of
three astute leaders namely H.R. Suryanarayan, Mr. Suresh Gowda and H.R. Hiriyanna with boundless
determination and perseverance of the above three the company has trudged the tortuous path to
glorification. Hindustan spring manufacturing company is specialized in manufacturing company is
specialized in manufacturing of cold coined springs of various varieties stating from the springs of wire
diameter 0.4mm to 12mm. It manufactures “Compression Springs, Torsion
Springs , Tension Springs , Special Wire Forms, Shaped Springs , Spring washers , Variable Pitched

Springs , Rolling shutters Springs etc”

Business Type Manufactures/Supplier

Primary Competitive Advantage: • Springs are manufactured using high
quality of raw materials.
• Quality control section which is highly
devoted to ensure the conformity of the
production of spring to the quality
requirements.
• Strategically located manufacturing
facilities.
• An extensive distribution.
Year of establishment: 1976
Export markets: Tractor industries, four wheeler break
assembly units manufacturers, defense
establishment, two wheelers manufacturers of
automobile and automobile ancillary and
railway products etc..

Machinery facilities: Several automatic machines, shot penning

machine, quality testing equipment spring and

grinding machines, fly presses, air circulated

electric furnaces, lathes etc..

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Popular products: • Industrial springs

• Volute springs
• Spring
• Hangers
• Multi leaf springs
• Shutter springs
• Spring parts
• Gas springs
• Clock springs
• Barrel springs
• Helical springs

Standard certification: ISO 9000-2008

Address: Industrial estate, Yadavgiri, Mysuru.

3.2.1 Introduction about company

Hindustan Spring Manufacturing Co in Yadavagiri, Mysore is known to satisfactorily cater to the

demands of its customer base. The business came into existence in 1976 and has, since then, been a
known name in its field. It stands located at C-111/112, Behind Sankalp Central Park, Industrial Estate,
Yadavagiri-570020.
Quality policy

Conduct severe quality checking right from the opening of the manufacturing procedure that ensures our
variety of wire products for four wheelers meets the necessities of our clients our strict devotion with
difference Indian and global standards enables us to offer technology move on range we included
variance internal process in order to organize and develop the qualitative features of our collection such

as metal wire, precision sheet, hangers, metal parts, trim wire etc..

• Durability
• Pressure drop
• Leakage
• Corrosion resistance
• Efficiency

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Products and Services:

There are manufacturing precision on metallic coil spring such as,

• Springs of Compression: Century mechanism warehouse and the main record of straight ,
high grade, cylindrically wrought density springs in the globe. A density spring is a helical
spring so as to provides confrontation to a compressive power practical axially.
• Rolling shutter springs: Rolling shutters are made from Galvanized steel, stainless steel,
aluminum & PVC slats.
• Torsion spring: Torsion spring be able to provisions and release angular power or statically
grasp a machinery in position by deflect the legs regarding the corpse centerline alliance.
• Wire spring.
• Spring in shape.
• Pitch springs variable.
• Fountains suspension.
• Springs of engine value.
• Springs for rolling shutter.

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3.2.2 Organization structure:

(PARTNERS)

MANAGING PARTNER TECHNICAL PARTNER

PARTNER ADMINISTRATION

PURCHASE TOOLS
SALES PRODUCTION
ASSISTANT PLANNING
ASSISTANT MANAGER
ASSISTANT

QUALITY
RELIABILITY
SUPERVISION SUPERVISOR
SUPERVISOR

PRODUCTION COMMERCIAL ADMINISTRATIVE ACCOUNTS

PLANNING ASSISTANT MANAGER ASSISTANTS
ASSISTANT

QUALITY
ASSISTANT ASSISTANT

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3.2.3 Brief introduction about functional department

Spring Manufactured At Hindustan Spring Manufacturing Company: -

Hindustan Spring Manufacturing Company is specialized in manufacturing of cold coiled springs of

various starting from the springs of wire diameter 0.4mm to 12mm. It manufactures “ Compression
Springs, Torsion Springs, Tension Springs, Spring wire forms, Shaped
Springs, Spring Washers, Variable Pitched Springs, Rolling Shutters Springs etc..”

DESIGN:

The spring designer’s task consist of selecting the type of spring the material most available
for the purpose in hand once this choice in made of finding the dimensions of the spring which must be
in agreement with the space available & with the permissible stress. Different theoretical conditions
were developed to characterize the properties of springs, taking into account such factors as the structure
and size of the wire, the diameter of the spring oil, the quantity of the coils and the calculation of the
anticipated external force. To boost the plan process, the requirements were consolidated into computer
programming.

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MANUFACTURING PROCESS:

1. Colds Winding: Wire up to 0.75 in diameter (18mm) can be coiled to room temperature using
one of two simple technique. The wrap of the wire around a poles called an arbor or a rubber belt
involves another. This can be achieved on a checked spring winding unit, on a electric hand box
with the jaw inside the chuck, or on a hand-turning tool. A control device such as the lead screw
should be used on the machine to adjust the cable into a perfect pitch as it flows over the
mandrel. The wire can be wrapped as an alternative without a mandrel. This is typically achieved
with a central browser (CNC) system. The wire is driven forward by a help of block to a scored
head, which redirects the wire, and forcing it to bend. In order to control the width and tone of
the forming spring, the head and support block can be rotated upwards of five covers. Following
the completion of the spin for expansion or torsion springs, the finishes are bent to perfect
chains, pins, or straight pieces.

2. Winding Hot: Whether the metal is more thick wire or bar stock, you can roll it in springs or
roll the bar stock in springs if the metal is heated to flexibility create it. Customary mechanical
coiling machines can accommodate steel bars up to 3 in(75mm) in diameter and easily
customized springs up to 6 in(150mm) in thickness with structural bars. The steel is rounded by
the mandrel, and the red is hot. At that point, the winding machine is quickly removed and
poured into the oil to refresh and harden it rapidly. At this stage, steel is too fragile to think of
even a well and the process should therefore be tempered, known as mechanical plywood and
includes the spring’s tumbling in a container on the surface of the spring.

3. Threating for Heat: When the steel was coiled warm or cold, the material was concerned. The
spring must be tempered by heating to reduce this pressure and enable the steel to preserve its
distinctive strength. The spring is warmed up in an oven , kept for a certain duration at the
appropriate temperature and then cooled slowly. For example, for 60 minutes a spring made of
wire is heated up to 550(260Oc).

4. Grinding With: During this step of the production process, the ends will be based on the design
requirements of smooth spring finishes. The spring is in a jig and held against a rotational
abrasive wheel to ensure proper introduction during crushing until optimal fat is achieved. The
spring is placed in a sleeve where unnecessarily mechanized hardware is used and the two

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closures simultaneously ground, first by roughened, improved wheels. A suitable liquid(water or

oil-base substance) may be used when cooling the spring, lubricating the grinding wheel and
diverting particles during molding.

5. Warning Shot: This process strengthens the steel to combat metal exhaustion during continuous
bending throughout its life. The entire surface of the spring is fed by a small block of steel balls
which smoothly hammer it and stack the steel just underneath.

6. Setty: To permanently fix the ideal length and pitch of the spring, it is compressed completely
with the aim that each of the coils touch each other. A handful of manufacturers frequently
repeat this process.

7. Charge: The entire surface of the spring is covered by painting it, dipping it in liquid rubber, or
coating it with other metals such as zine or chromium to avoid corrosion.

8. Packaging: Only boxes or plastic bags may attach the desired quantity of springs. Nevertheless,
various bundling styles were built to reduce damage or tangling to the spring. For example, they
can be bagged individually, connected to wires or pipes , wrapped in tubes or attached to sticky
paper.

Areas of operation:

• It is located in the Garden city of Mysuru situated in Yadavagiri Industrial Area

of Karnataka Industrial Development Board.
• Do business in domestic and international market.
Infrastructural facilities:

As per the industrial norms Hindustan Spring Manufacturing company given that infrastructural facility

to his employees.

• Canteen facilities
• It facilities modern mission and equipment like
• Workspace and associated facilities
• Layout of plant process equipment are optimized for ergonomics
• High level of hygiene standards and habits are maintained in all working areas

a. Automatic wire cut/strip machines

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b. Assembly conveyor
c. Coil wending facilities
d. Pick and space machine
e. Wave soldering
f. Profile projector

3.2.4. Competitor’s information:

1. Maxima resources private limited-Mysuru

2. Bedi springs private limited-Mysuru
3. Swaraj enterprises-Mysuru
4. RB spring industry-Mysuru
5. Mahalakshmi spring manufacturing company-Mysuru

3.2.5. SWOT analysis:

SWOT ANALYSIS

INTERNAL EXTERNAL
ANALYSIS ANALYSIS

STRENGTH OPPORTUNITY

WEAKNESS THREATS

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1.STRENGTHNESS:

➢ Strong relation between the organization and the levels of employees is the backbone of
the success.
➢ Efficient supply chain.
➢ Continuing manufactured goods novelty and renovation, to customer insight.
➢ Distribution arrangement that allow broad arrive at and reporting in the intention market.
➢ Technically stable.

2.WEAKNESS:

➢ Crises between management and employees.

➢ Since steel is primary raw material, fluctuation in price affects product cost.
➢ Implementation of new changes is delayed.
➢ The efficiency and the commitment of the workers are not checked effectively because of
which the workers can take undue advantage.

3.OPPOTUNITIES:

➢ Changes in the widening the market throughout the country and abroad.
➢ Option for future expansion.
➢ Increase in 2 wheelers insist would approach for the most part growing inhabitants in
pertinent period earnings group, and it help to rising the sales.
➢ New geographies opening up.
➢ Trends towards using accredited companies.

4.THREATS:

➢ Suppliers raising costs.

➢ Competitive environment with diverse players.
➢ Boom in two wheelers markets.
➢ Competitors raising prices aggressively.

3.2.6 Vision and Mission of the company

The dream is “to be global reward company with strong emphasis on growing market

• To be among top compression, fiction and conical spring manufacturers in India.

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• Providing the right product to the right customer at the right time, good quality and right
price.
• To ensure employee grow with the company
Mission of the company

To have total agreement among quality-in-process and continuous development to deliver excellent
service that will delight our customer and clients.

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CHAPTER 04:

DATA ANALYSIS AND INTERPRETATION

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4.1 Objective 01: To study working capital productivity of selected spring manufacturing firms in India

4.1.1CURRENT RATIO:
COMPANY 2017 2018 2019 2020 2021 Mean
NAME
Jamna Auto 0.82 0.74 1.00 1.32 1.13 1.002
Industries Ltd
Frontier springs 1.39 1.34 1.22 1.28 1.34 1.314
Ltd
Federal-Mogul 2.29 1.29 1.43 1.78 2.09 1.776
TPR(India)Ltd
Conventry Coil-o- 0.61 0.83 0.73 0.59 0.51 0.654
Matic
(Haryana)Ltd
Auto 1.01 1.36 1.32 1.10 1.03 1.164
Pins(India)Ltd
Hindustan Spring 5.23 4.16 5.39 4.54 3.29 4.538
manufacturing
company

Mean Current 1.89 1.62 1.85 1.77 1.57

Ratio
Above Mean 3 1 1 2 2
Below Mean 3 5 5 4 4

Table 4.1.1 Current ratios of selected Spring Manufacturing company

• Average Current ratio in the year 2017 is 1.89.

In the year 2015 three companies have recorded current ratio more than the average value of the sample
companies and the remaining companies have recorded below the mean value.

• Average Current ratio in the year 2018 is 1.62.

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In the year 2016 five companies have recorded current ratio below mean value except Hindustan springs
manufacturing company.

• Average Current ratio in the year 2019 is 1.85.

In the year 2017 also five companies have recorded current ratio below the mean value

Except Hindustan springs manufacturing company this company recorded 5.39.

• Average Current ratio in the year 2020 is 1.77.

In the year 2018 four companies recorded current ratio below the mean value. Remaining two
companies recorded more than the mean value.

• Average current ratio in the year 2021 is 1.57.

In the year 2021 two companies recorded current ratio above the mean value remaining four companies
recorded below the mean value.

4.1 Mean of Current Ratio

2 1.89 1.85
1.77
1.8 1.62 1.57
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1 2 3 4 5

The Graph above shows the pattern in the mean current sample companies Ratio:

It illustrates the decreasing trend line for the sample firm’s mean current ratio.

The minimum average value during the study period 1.62, and the maximum average value is 1.89.

Standard current ratio is 2:1. In all year the mean current ratio maintained here.

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4.1.2 INVENTORY TURNOVER RATIO:

COMPANY NAME 2017 2018 2019 2020 2021 Mean

Jamna Auto 10.04 11.69 11.46 10.97 9.33 10.698
Industries Ltd
Frontier springs 2.85 2.72 3.05 3.97 4.52 3.422
Ltd
Federal-Mogul 6.17 6.95 6.68 6.95 6.17 6.584
TPR(India)Ltd
Coventry Coil-o- 36.85 46.54 36.52 34.63 12.79 33.47
Matic
(Haryana)Ltd
Auto 8.12 5.81 2.77 1.69 1.82 4.042
Pins(India)Ltd
Hindustan Spring 15.34 14.08 35.11 27.13 16.96 21.72
manufacturing
company

Mean of Inventory 13.23 14.63 15.93 14.22 8.59

turnover Ratio

Above Mean 3 1 2 2 3
Below Mean 3 5 4 4 3
Table 4.1.2 Inventory turnover ratios of selected spring Manufacturing Company.

• Average Inventory turnover ratio in the year 2017 is 13.23.

In the year 2017 four companies recorded inventory turnover ratio below the mean value but remaining
two companies recorded above the mean value.

• Average Inventory turnover ratio in the year 2018 is 14.63.

In the year 2018 the five selected companies recorded inventory turnover ratio below the mean value
but Coventry coil o- Matic (Haryana) ltd recorded the ratio above mean.

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• Average inventory turnover ratio in the year 2019 is 15.93.

In the year 2019 the four companies recorded inventor turnover ratio below the mean value but two
companies recorded the above the mean value.

• Average Inventory turnover ratio in the year 2020 is 14.22.

In the year 2020 four companies recorded below the mean value and remaining two companies
inventory turnover ratio recorded above the mean.

• Average Inventory turnover ratio in the year 2021 is 8.59.

In the year 2021 three companies recorded inventory turnover ratio above the mean value and three
companies recorded below the mean value.

4.2 Mean of Inventory Turnover ratio

18
16
15.93
14
14.63 14.22
12 13.23
10
8
8.59
6
4
2
0
1 2 3 4 5

The above graph shows the pattern of mean of sample companies Inventory Turnover ratio:

It shows the declining trend line for the average of inventory turnover ratio. The minimum mean value is
8.59 and the maximum mean value is 15.93.

The ideal inventory turnover ratio always between 5 to 10 except one mean all above the ideal value.

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4.1.3: AVERAGE COLLECTION PERIOD:

COMPANY NAME 2017 2018 2019 2020 2021 Mean

Jamna Auto 17.35 10.07 8.85 39.72 51.99 25.59
Industries Ltd
Frontier springs 17.36 10.07 8.85 39.72 43.71 23.94
Ltd
Federal-Mogul 57.29 129.86 34.55 82.48 82.87 77.41
TPR(India)Ltd
Conventry Coil-o- 47.51 39.24 29.01 45.93 25.54 37.44
Matic
(Haryana)Ltd
Auto 17.81 24.96 18.01 15.36 9.09 17.05
Pins(India)Ltd
Hindusthan Spring 10.56 6.40 8.89 61.93 78.46 33.25
manufacturing
company

Mean of Average 27.98 36.76 18.03 47.52 48.61

collection period
Above Mean 2 2 2 2 3
Below Mean 4 4 4 4 3
Table 4.1.3 Average collection period of selected spring Manufacturing companies.

• Average collection period in the year 2017 is 27.98

In the year 2017 the four selected spring manufacturing companies recorded below the average mean
collection period but remaining two companies recorded above mean.

• Average collection period in the year 2018 is 36.76.

In the year 2018 the four companies recorded below the average mean value and also two companies
recorded above the mean value.

• Average collection period in the year 2019 is 18.03.

In the year 2019 the four selected companies recorded below the average mean value and also two
companies recorded above the mean value.
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• Average collection period in the year 2020 is 47.52.

In the year 2020 the four selected companies recorded below the average mean value and remaining two
companies recorded above the mean value.

• Average collection period in the year 2021 is 48.61.

In the year 2021 three companies recorded below the average mean vale and remaining three companies
recorded above the mean value.

4.3 Mean of Average collection period

60

50
47.52 48.61
40

36.76
30
27.98
20
18.03
10

0
1 2 3 4 5

The above graph shows that the pattern in mean of average sample firms selection time:
It shows the growing trend line for the average sample firms collection period mean. The minimum
mean value is 18.03 during the study period and the maximum mean value is 48.61.

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4.1.4 ACCOUNTS RECEIVABLE TO NET WORKING CAPITAL:

COMPANY NAME 2017 2018 2019 2020 2021 Mean
Jamna Auto -2.72% -0.30% 0.13% 0.27% 1.00% -0.32%
Industries Ltd
Frontier springs 1.92% 1.96% 1.49% 1.90% 1.66% 1.79%
Ltd
Federal-Mogul 0.66% 0.51% 0.13% 0.25% 0.20% 0.35%
TPR(India)Ltd
Coventry Coil-o- 23.81% 44.83% 76.31% 44.83% 2.38% 38.43%
Matic
(Haryana)Ltd
Auto Pins(India)Ltd 14.56% 11.65% 4.43% 2.15% 1.25% 6.81%

Hindustan Spring 8.7% 4.97% 11.54% 16.9% 21.49% 12.72%

manufacturing
company

Mean of Accounts 46.93% 10.60% 15.67% 11.05% 4.66%

receivable to net
working capital

Above Mean 0 2 1 4 1
Below Mean 6 4 5 2 5

Table 4.1.4 Asset Turnover Ratio of Selected Spring Manufacturing Company.

• Average mean of Accounts receivable to Net working capital is 46.93%.

In the year 2017 all selected companies that means six companies recorded below the average mean.

• Average mean of Accounts receivable to Net working capital in the year 2018 is 10.60%.

In the year 2018 four companies recorded below average mean but two companies recorded above the
average mean.

• Average mean of Accounts receivable to Net working capital is in the year 2019 is 15.67%.

In the 2019 the five companies recorded below the average mean and one company recorded the
accounts receivable to net working capital above the mean.

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• Average mean of Accounts receivable to Net working capital in the year 2020 is 11.05%.

In the year 2020 four companies recorded above the average mean but two companies recorded below
the average mean.

• Average mean of Accounts receivable to Net working capital in the year 2021 is 4.66%.

In the year 2021 five companies recorded below the average mean and only one company that is
Hindustan Springs Manufacturing company recorded above the average mean.

4.4 Mean of Account Receviables to Net

Working Capital
50.00%
45.00%
46.93%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
15.67%
10.00%
10.60% 11.05%
5.00% 4.66%
0.00%
1 2 3 4 5

The above graph patterns shows that the average accounts receivables to net working capital in the study
period of sample firms.

It shows the decreasing trend line pattern in during the study period the minimum mean among five
years study is 4.66% and maximum is 46.93%.

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4.1.5 NET PROFIT RATIO:

COMPANY NAME 2017 2018 2019 2020 2021 Mean

Jamna Auto 2.68 5.69 8.12 7.21 6.44 6.03
Industries Ltd
Frontier springs 1.14 1.25 4.38 5.98 10.10 4.57
Ltd
Federal-Mogul 18.05 15.38 13.67 15.11 15.44 15.53
TPR(India)Ltd
Conventry Coil-o- -5.15 -8.48 -4.44 -3.12 -1.88 -4.614
Matic
(Haryana)Ltd
Auto 1.76 1.32 1.26 -4.59 1.59 0.27
Pins(India)Ltd
Hindustan Spring 4.87 5.23 7.00 7.40 8.64 6.67
manufacturing
company

Mean of Net profit 3.89 3.39 4.99 4.67 6.72

ratio

Above Mean 2 3 3 4 3
Below Mean 4 3 3 2 3

Table 4.1.5 Net Profit Ratios of selected Spring Manufacturing companies.

• Average Net profit ratio in the year 2017 is 3.89.

In the year 2017 four companies recorded below the average mean of net profit ratio and two companies
recorded below the average mean.

• Average Net profit ratio in the year 2018 is 3.39.

In the year 2018 three companies recorded below the average mean of net profit ratio and three
companies recorded above the average mean.

• Average Net profit ratio in the year 2019 is 4.99.

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In the year 2019 three companies recorded below the average mean of net profit ratio and three
companies recorded below the average mean.

• Average net profit ratio in the year 2020 is 4.67.

In the year 2020 two companies recorded below the average mean of net profit ratio and remaining four
companies recorded below the average mean of net profit ratio.

• Average net profit ratio in the year 2021 is 6.72.

In the year 2021 three companies recorded below the average mean and remaining three companies
recorded above the average mean.

4.5 Mean of Net Profit Ratio

8

6 6.72

5
4.99
4 4.67
3.89
3 3.39
2

0
1 2 3 4 5

The above graph pattern shows that the average of Net Profit Ratio during the study period:

It shows the increasing trend line for the average sample firms net profit ratio.

The minimum mean value is 3.39 and the maximum mean value is 6.72.

As per ideal ratio the mean value in all years comparatively lower.

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4.1.6 RETURN ON CAPITAL EMPLOYED:

COMPANY NAME 2017 2018 2019 2020 2021 Mean

Jamna Auto 12.09 27.50 43.04 43.02 44.47 34.02
Industries Ltd
Frontier springs 1.37 1.59 11.00 17.98 26.12 11.61
Ltd
Federal-Mogul 6.41 6.68 19.21 19.41 16.77 13.69
TPR(India)Ltd
Conventry Coil-o- 126.19 49.04 25.97 15.84 20.52 47.51
Matic
(Haryana)Ltd
Auto 4.02 -9.26 7.27 10.84 11.70 24.57
Pins(India)Ltd
Hindustan Spring 25.61 28.32 34.03 39.01 35.84
manufacturing
company

Mean of Return on 29.28 17.31 23.42 24.35 25.90

Capital employed
Above Mean 1 3 3 2 6
Below Mean 5 3 3 4 0

Table 4.1.6 Return on Capital Employed of selected Spring Manufacturing companies.

• Average of Return on Capital Employed in the year 2017 is 29.28.

In the year 2017 among selected spring manufacturing companies five companies recorded below the
average mean and only one company recorded above the average mean.

• Average of Return on Capital Employed in the year 2018 is 17.31.

In the year 2018 three spring manufacturing companies recorded below the average mean and three
companies recorded above the average mean.

• Average of Return Capital Employed in the year 2019 is 23.42.

In the year 2019 three companies recorded below the average mean and remaining three companies
recorded below the average mean.

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• Average of Return Capital Employed in the year 2020 is 24.35.

In the year 2020 four companies recorded below the average mean of Return on Capital Employed and
two companies recorded above the average mean.

• Average of Return Capital Employed in the year 2021 is 25.90.

In the year 2021 out of six companies three companies recorded above the average mean and three
companies recorded below the average mean.

4.6 Mean of Return on Capital Employed

35
29.28
30
25.9
23.42 24.35
25

20 17.31

15

10

0
1 2 3 4 5

In the above graph pattern shows that the mean of Return on Capital Employed of selected sample firms.

It shows the growing trend line or the average sample firms. The minimum mean value is 17.31 and the
maximum mean value is 29.28.

4.1.7 RETURN ON ASSET:

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COMPANY NAME 2017 2018 2019 2020 2021 Mean

Jamna Auto 5.92 14.76 18.71 15.87 12.87 13.63
Industries Ltd
Frontier springs 0.88 0.96 3.85 5.99 12.39 4.81
Ltd
Federal-Mogul 3.80 4.26 7.15 8.10 7.47 6.16
TPR(India)Ltd
Conventry Coil-o- -26.21 -17.24 -9.78 -8.57 -13.53 -15.07
Matic
(Haryana)Ltd
Auto 1.97 -4.49 1.94 3.03 5.24 1.54
Pins(India)Ltd
Hindustan Spring 20.15 24.24 32.82 30.32 29.96
manufacturing
company

Mean of Return on 1.09 3.75 9.11 9.12 9.06

asset

Above Mean 4 3 2 2 3

Below Mean 2 3 4 4 3

Table 4.1.7 Return on Asset ratios of Selected spring Manufacturing companies.

• Average of Return on Asset in the year 2017 is 1.09.

In the year 2017 two companies recorded below the average mean and remaining four companies
recorded above the average mean.

• Average of Return on asset in the year 2018 is 3.75.

In the year 2018 three companies recorded below the average mean and remaining three companies
recorded above the average mean.

• Average of Return on Asset in the year 2019 is 9.11.

In the year 2019 four companies recorded below the average mean of return on asset but remaining three
companies including Hindustan springs Ltd recorded above the average mean.

• Average of Return on Asset in the year 2020 is 9.12.

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In the year 20120 four selected springs company recorded below the average mean and remaining two
companies recorded above the average mean.

• Average of Return on Asset in the year 2021 is 9.06.

In the year 2021 the selected spring manufacturing companies three out of them recorded below the
average mean as well as three companies recorded above the average mean.

4.7 Mean of Return on Asset Ratio

12

10 9.11 9.12 9.06

3.75
4

2 1.09

0
1 2 3 4 5

The above graph pattern shows that the mean of return on asset ratio;

It shows that the trend line is growing positively with higher rate. The minimum mean value in above
graph it is 1.09 and the maximum mean value is 9.12. From this we can say that the selected sample
firms are maintaining good return on asset ratio.

4.1.8 WORKING CAPITAL TURNOVER RATIO:

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COMPANY NAME 2017 2018 2019 2020 2021 Mean

Jamna Auto -20.97 -19.09 16.99 15.87 30.69 4.69
Industries Ltd
Frontier Springs 5.62 5.85 10.18 9.86 9.73 8.25
Ltd
Federal-Mogul TPR 39.35 11.42 9.41 6.48 4.79 14.29
(India) Ltd
Coventry Coil-O- -6.91 -5.58 -4.62 -5.06 -5.31 -5.49
Matic(Harayana)ltd
Auto Pins (India) 4.66 6.02 10.34 43.35 179.3 48.73
Ltd
Hindusthan Springs 3.01 2.84 4.31 3.79 2.95 3.38
Manufacturing Ltd
Mean of Working 4.13 0.24 7.77 12.38 37.02
capital turnover
ratio
Above Mean 3 4 4 2 1
Below Mean 3 2 2 4 5

Table 4.1.8 Working Capital Turnover Ratios Selected spring Manufacturing companies.

• Average of working capital turnover ratio in the year 2017 is 4.13.

In the year 2017 three companies recorded below the average mean of working capital turnover ratio and
three companies recorded above the average mean.

• Average of Working capital turnover ratio in the year 2018 is 0.24.

In the year 2018 the all selected spring manufacturing companies recorded above the average mean
except two companies recorded negative working capital turnover ratio.

• Average of Working capital turnover ratio in the year 2019 is 7.77.

In the year 2019 two companies recorded below the average mean and remaining four companies
recorded above the average mean.

• Average of working capital turnover ratio in the year 2020 is 12.38.

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In the year 2020 the selected spring manufacturing companies among them four companies recorded
below the average mean and remaining two companies recorded above the average mean.

• Average of working capital turnover ratio in the year 2021 is 37.02.

In the year 2021 all selected spring manufacturing companies recorded below the average mean but
except Auto pins India private ltd recorded above the average mean.

4.8 Mean of Working Capital Turnover Ratio

40
35 37.02
30
25
20
15
10 12.38
5 7.77
4.13 0.24
0
1 2 3 4 5
-5
-10

The above graph patterns shows that the mean of Working Capital Turnover Ratio of sample firms
during the study period.

It shows that growing trend line during the study period

4.2 Objective 02: To study the correlation between working capital productivity and profitability of
selected spring manufacturing firms in India.

Correlation analysis of selected spring manufacturing Companies:

Jamna Auto Industries Limited:

X Y
X 1
0-
Y 0.3775 1

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The correlation of Janma Auto Industries Limited is found to be -0.37753. Therefore, it has negative
moderate relationship between networking capital and net profit which means firm has negative
moderate level of working capital which leads to lower minimum profitability.

Frontier Springs Limited:

X Y
X 1
-

Y 0.556605 1

The correlation of Frontier Springs Limited is found to be 0.55605. Therefore, it has average positive
relationship between net working capital and net profit which means firm has average level of working
capital which leads to average profitability.

Federal-Mogul Goetze ( India) Limited:

X Y
X 1
Y -0.2659 1

The correlation of Federal-Mogul Goetze (India) Limited found to be -0.26597. Therefore, it has
negative weak relationship between net working capital and net profit. Which means company has lower
level of working capital leads to lower profitability.

Coventry Coil-O-Matic (Haryana) Limited:

X Y
X 1
Y -0.4992 1

The correlation of Coventry Coil-O-Matic (Haryana) Limited found to be-0.49924. Therefore, it has
strong strong relationship between net working capital and net profit. Which company has negative
working capital leads to lower profitability.

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Auto Pins (India) Limited:

X y
X 1
y -0.4419 1

The correlation of Auto Pins (India) Limited found to be -0.44197. Therefore, it has strong negative
relationship between net working capital and net profit. Which company has negative average working
capital leads to lower profitability.

Hindustan Spring Manufacturing Company:

X Y
X 1
Y 0.294849 1

The correlation of Hindustan Spring Manufacturing Company found to be 0.294849. Therefore, it has
moderate relationship between net working capital and net profit. Which means company has positive
moderate working capital which lead to moderate level of profitability.

4.9 CORRELATION
0.8
0.6
0.4
AXIS TITLE

0.2
0
-0.2
-0.4
-0.6
Janma Frontier Federal Coventry Autopins Hsmc
Series1 -0.37753 0.556605 -0.26587 -0.49924 -0.44197 0.294849
AXIS TITLE

From the above graph, we can see that the correlation of Frontier Springs Limited was found to be high
compared to remaining all selected spring manufacturing companies. And four of them having negative
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relationship between net working capital and net profit. Hindustan spring manufacturing company have
moderate relationship between net working capital and net profit.

4.1.9 Regression Analysis of Selected Spring Manufacturing Companies:

Column1 Column2 Column3 Column4 Column5

COMPANY REGRESSION COEFFICIENTS STANDARD

ERROR

Janma Auto industries limited 0.158250243 Intercept 92.1034533 148.9510212

X variable
1 -3.08450075 5.030245602

Frontier Springs limited 0.30980874 Intercept -0.284151075 0.927461838

X variable
1 0.441245213 0.380239538

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Federal - Mogul Goetze limited 0.168068672 Intercept 47.65507124 22.56459223

X variable
1 -0.8475129 1.333311657

Coventry Coil-O-Matic limited 0.49016772 Intercept -1.30809957 0.716968294

X variable
1 -0.99894348 0.720389261

Auto pins limited 0.493834615 Intercept -0.58846239 0.168421015

X variable
1 0.551846907 0.395056373

Hindustan Spring
Manufactruing limited 0.075916602 Intercept -0.65105728 3.36768692

X variable
1 0.109768535 0.270800088

From the above table, we can see that regression analysis was done for all six companies. Coventry and
Auto pins regression value R square was found to be moderate between net working capital and net
profit when compared to all other companies.
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CHAPTER 5

FINDING SUGGETION CONCLUSION

48
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5.1 FINDINGS:

After details study of the working capital productivity of selected spring manufacturing companies, the
following are the important find out,

1. This study reveals that changes in working capital of Hindustan Spring Manufacturing company
is increasing in nature for the period of five years that is 2017-2021.
2. Working capital turnover ratio is found to be high for continuous period for four years that is
2017-2020 but in 2021 it going to decreasing company sales were found to be low.
3. It is found that current assets of the company have overcome the current liabilities in the period
of 2017-2021. It shows the current ratio is more than 2:1 in all selected financial year.
4. It found that Inventory turnover ratio is gradually decreasing year by year it shows that the
number of times inventory is sold or used in a time period and it also shows that the sales
volume so the Hindustan spring manufacturing company’s sales volume also decreasing.
5. Average collection period says the average number of days necessary to convert into cash in this
case Hindustan spring company not maintaining ideal ratio on it that is increasing year by year
that shows that slow in converting receivables into cash taking long period.

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6. Net profit ratio, the ideal ratio is between 10%-20% but Hindustan spring manufacturing
company have below the ideal ration but at least it is increasing year by year and it is near to
ideal ratio.
7. The high return on capital employed can be sign of a very good company, as it shows that the
company consistently good use of its resources as per Hindustan spring manufacturing company
ROCE it is increasing that shows company utilizing their resources effectively.
8. Return on asset is the ratio it will helps to know the how efficient a company’s management is
generating earnings from their earnings from their economic resources or assets, here Hindustan
spring manufacturing company maintaining more than the ideal ratio it shows company
generating good earnings from their assets.
9. The ideal working capital turnover ratio considered as 1.5 to 2 more than that it is considered as
not better. But in case of Hindustan spring manufacturing company the working capital turnover
ratio is more than the ideal ratio so this indicates that poor financial management and lost
business opportunities.
10. The correlation of Hindustan spring manufacturing company is found to 0.294849 this show the
relationship between working capital and its net profit have moderate relationship.
11. The correlation of Jamna auto industries limited company is found to 0.37753 this is also shows
the relationship between working capital and net profit is moderate.
12. The correlation of Frontier spring limited is found to 0.556605 this considered as the relationship
between working capital turnover and net profit moderately correlated and also low correlation.
13. The correlation of Coventry Coil-O-Matic company found 0.49924 this shows that the
correlation between working capital and its net profit moderately correlated.
14. The correlation of Auto pins limited found that 0.44197 this is also found that moderate
correlation between working capital and net profit.
15. Finally all the company’s correlate on found moderate correlation between working capital and
net profit.

5.2 SUGGESTIONS:

1. Hindustan spring company ought to keep proper liquidity positions. It can follow moderate
current asset policy.
2. The current ratio of the company Hindustan spring manufacturing company is more than the
ideal ratio that is (2:1) it is not necessary to have more current assets it may create more
liquidity position in the company.
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3. In current ratio the Coventry Coil-O-Matic(Haryana) limited is maintaining less than 2:1 so
they have to focus on improving current ratio.
4. According to average collection period Auto pins limited is 17.04 is very strict in terms of
collecting credit but in case Federal-Mogul TPR( India ) limited is 77.41 this company is
giving more credit compare to other company so they can focus on improving average
collection period.
5. Inventory turnover ratio suggests that Frontier spring limited and Auto pins limited have very
less inventory turnover ratio that indicates that sales volume of both the companies is less
than the other company from this I suggests that by introducing more and more promotional
activities it can increase their sales.
6. Comparing to all selected companies Coventry Coil-O-Matic company is performing poor
performance it showing by their financial status so they have to improve their performance.

5.3 CONCLUSION:

Working capital management is the functional area of finance that covers all current accounts of the
firm. It involves the relationship between a firm’s short-term assets and its short-term liabilities. A firm
is required to maintain a balance between liquidity and profitability while conducting its day to day
operations.

Coming to this report different companies though they are in some spring manufacturing firms they are
maintaining different levels for various ratios. The financial positions in terms of liquidity, in terms of
profitability, in terms of turnover is preferring significant between different companies.

From the above results the efficiency level of working capital management of the company Hindustan
Spring Manufacturing company is not so satisfactory. Because the working capital turnover ratios shows
that below the ideal range. As well as the correlation between working capital and its net profit is
moderate correlation.

From the results when it compared with other spring company the performance of the Hindustan spring
company is not satisfactory. But compare to all company Hindustan spring manufacturing company
maintaining good amount of current assets, and best inventory turnover ratio from this we can assume
that company going in stable way.

Regression analysis also shows that the relationship between working capital and net profit is not have
good relationship.

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At the end, I would like to conclude that Hindustan spring manufacturing company top spring company
in India. It was my pleasure, to do my project work in this company for four weeks period. At last, it
was my knowledgeable experience I learnt so ratios analysis, regression, correlation analysis in depth by
using practical aspects.

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