MBA Final Year project Synopsis

WORKING CAPITAL MANAGEMENT IN HCL INFOSYSTEM LTD

INTRODUCTION TO WORKING CAPITAL:

Working Capital Management is concerned with problems that arise in

attempting to manage the current assets, the current liabilities and the
interrelationship that exist between them. The term current assets refer to those
assets which in ordinary course of business can be, or will be converted into
cash within one year without undergoing a diminution in value and without
disrupting the operations of the firm. The major current assets are cash,
marketable securities, accounts receivable and inventory. Current liabilities are
those liabilities which are intended, at their inception, to be paid in the ordinary
course of business, within a year, out of current assets or earnings of the
concern. The basic current liabilities are accounts payable, bills payable, bank
overdraft and outstanding expenses. The goal of Working Capital Management is
to manage the firm’s current assets and current liabilities in such a way that a
satisfactory level of Working Capital is maintained. This is so because if the firm
cannot maintain a satisfactory level of Working Capital, it is likely to become
insolvent and may even be forced into bankruptcy. The current assets should be
large enough to cover its current liabilities in order to ensure a reasonable margin
of safety. Nevertheless the level of current assets should not be too high since in
that case it will affect the overall profitability of the firm. The interaction between
current assets and current liabilities is, therefore the main theme of Working
Capital Management.

Rationale of the study

 From this project we have a broad knowledge on different aspects of
working capital management. Some of the aspects of working capital
management are:

 Concepts of working capital management.

 Need of working capital.
 Types of working capital management.
 Operating cycle or working capital cycle
 Factors affecting working capital requirements.
 Various components of working capital management.

LIMITATIONS AND SCOPE OF THE STUDY:

The topic working capital management is itself a very vast topic yet very
important also. Due to time restraints it was not possible to study in depth in get
knowledge what practices are followed at HCL Infosystems. Nevertheless, many
facts and data are such that they are not to be disclosed because of the
confidential nature of the same. Hence because of that I cannot express any
opinions upon various issues which itself limits the scope of my study. However I
have tried to give an understanding of Working capital management in as much
as detail as possible.
CONCLUSION

 Sales are decreasing during the year 2006-07. Hence profitability has
declined over this time period

 Due to increase in the time period for the realization of debtors, cash and bank balance
has decreased.

 Stock turn over ratio is decreasing, it shows that capital is blocked into the inventory.

 Fixed asset turnover ratio has decreased this year, which shows that assets
have not been used efficiently as they had been used in the previous year.

All the above ratios show a decreased or unfavorable situation because of the
work of entire replacement of coolant channel, due to which the production
process had been stopped.
 MBA Final Year project Synopsis
Title:- WORKING CAPITAL MANAGEMENT IN HCL INFOSYSTEM LTD

Submitted By :- YUVARAJ BALU PATIL

PRN NO:- 2016017001238853