CHAPTER-1

INTRODUCTION

1.1 INTRODUCTION

One of the most valued components of VTU MBA coursework is project work, which aims to
help students better understand the organizational culture and working conditions.
Understanding what real-world situations would entail and how to deal with them is particularly
crucial for the pupils. An internship enables students to understand a given organization's
capabilities first-hand Under studies who are utilizing research approaches will also benefit
from it.
In order to do this, project work has begun at one of the reputable firms in Bangalore,
DEWDAS TECHNOLOGIES PRIVATE LIMITED. The information about "A STUDY
ON WORKING CAPITAL MANAGEMENT AT DEWDAS TECHNOLOGIES PVT
LTD" is what I'd want to include in this report.

1.2 INDUSTRY PROFILE

Producing Industry

Producing is the method involved with making or manufacturing items using labour, machines,
instruments, and chemical or biological processing or formulation likewise to equipment. It is
the centre of the economy's secondary sector. The expression can be utilized to portray a variety
of human endeavours, from handicraft to high-tech, but it is the most frequently used to depict
modern plan, which involves the tremendous shift of natural substances from the essential area
into finished items. Such items might be conveyed through the tertiary business to end clients
and purchasers (normally inside wholesalers, who thusly offer to retailers, who thus offer to
individual shoppers) or offered to different makers for the creation of other, more mind-
boggling items (like airplane, home machines, furniture, athletic gear, or autos).

Producing designing is the field of designing that plan and enhances the assembling system, or
the cycles that change fundamental assets into a completed decent. The item plan and material
necessities are the most important phases in the creation cycle. The eventual outcome is made
by assembling these materials into various structures. All middle of the road steps in the
creation and combination of an item's parts are remembered for present day fabricating. All
things considered, the term manufacture is utilized in certain organizations, similar to those that
make semiconductors and steel. Designing and modern plan are personally connected with the
assembling business.
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The quickest period for manufacturing plant zap happened somewhere in the range of 1900 and
1930. This cycle began bit by bit during the 1890s following the improvement of the common-
sense DC engine and the air conditioner engine. The making of electric utilities with focal
stations and the lessening of pinner costs from 1914 to 1917 both contributed to this. Compared
to line shafts and belts, electric motors offered greater manufacturing flexibility and required
less maintenance. The increased use of electric motors caused the output of several enterprises
to grow by 30%.

Present-day large-scale manufacturing was made conceivable by zap, and early large-scale
manufacturing greatest affected the production of day-to-day things. For instance, the Ball
Siblings Glass Assembling Organization jolted its artisan container plant in Muncie, Indiana,
US, around 1900. the industrial facilities.

At the moment, the manufacturing sector in India employs approximately 12% of the country's
workforce and contributes between 16 and 17 percent to GDP. Different examinations have
assessed that each occupation made in assembling has a multiplier impact in making 2-3
positions in the administrations sector.

• Industrial development is a requirement for the eradication of unemployment and poverty

in our nation. Manufacturing industries not only contribute to modernizing agriculture
which is the foundation of our create jobs in secondary and tertiary sectors, reducing
people's reliance on agricultural income. This idea acted as the foundation for joint ventures
with the private domain in India. It also made an effort to lessen regional imbalances by
establishing industries in rural and tribal areas.

2
• Exporting manufactured goods increases trade and commerce while also supplying much needed
foreign currency.
• The countries that are effective in transforming their raw resources into a range of higher-value
finished commodities are the developing ones. If India is to prosper, its manufacturing
industries have to grow swiftly and diversify.
• Agriculture and industry don't necessarily coexist.

Contribution of the Manufacturing sector

• Out of a sum of 28% for the business during the beyond 20 years, which likewise incorporates
10% for quarrying, mining, power, and gas, assembling's extent a quarter of the country's total
output has kept the level set in stone.

• Compared to some East Asian economies, where rates range from 30% to 35%, this is
considerably lower.

• Throughout recent years, fabricating has developed normal between 7-9% every year. Over
the next ten years, a growth rate of 12% is desired.

1.3 COMPANY PROFILE

Company was incorporated 2015, DEWDAS technology Pvt Ltd. Is a high-tech company,
offering SMART (simple, maintenance-friendly, Affordable, Reliable and timely-to-market)
products and solutions devoted to industrial and home automation. The company’s automation
product line includes smart locks, controller for water level, water level indicators, automatic
hand sanitizer/ soap dispenser, UV sanitize, streetlight controller. The strict QA/QC quality
control system ensure that the products delivered to customers are of high quality.

Besides, the automation products DEWDAS technology offers quality inspection solutions that
help industries produce merchandise with zero imperfections and great quality with semi-gifted
workers. The organization's answers utilize PC vision, RFID, remote advances and embrace
most recent innovation patterns like AI, man-made consciousness DEWDAS technology Pvt
Ltd (DTPL) has expertise in hardware/ software development, embedded design, RF/ wireless
and antenna design, electronic system design, Mechanical modelling and fabrication, APP
development, System integration, Cable harness and have executed several projects across
different industry
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verticals, that the company have professional R&D department with skilled engineers. They
support OEM/ODM, and they customize hardware or software system.

Dewdas Technology Pvt Ltd in Bangalore's Electronic City was founded with the idea of
putting the needs of the customer first, and this conviction has helped the company forge
enduring connections.

The provision of top-notch goods and/or services is given top priority in order to ensure a
favourable client experience. It is one of the players in a number of devices, including an
automatic water level controller, a dispenser for hand sanitizer, a UV disinfection system, a
smart door lock, and a cabinet lock, to mention a few.

Jd mart, India's top B2B marketplace, makes it easy for both small and large firms to conduct
business with one another. This portal enables these firms to showcase their offerings in terms
of the products and/or services in order to help them reach their audience.

The company has 2 directors and no reported key management personnel. The longest severing
directors currently on board are vethkan iruthayadason Beatrice sylvia and Jeniant of who were
appointed on 20th February 2015.They have been on bord for more than 8years.

vethkan iruthayadason Beatrice sylvia has the largest number of other directorships with a seat
at a total of one company. In total, the company is connected to 0 other companies through its
directors.

Technology Dewdas Pvt Ltd The range of operational income for the fiscal year that starts on
March 31, 2019, is less than INR 1 crore. Its EBITDA increased over the prior year by 25.94%.
Its statutory total assets have grown by 760.55% concurrently. There are many reasons
execution and liquidity ratios mentioned here.

Our data show that the largest and most recent annual shareholder meeting of Dewdas
technology Pvt ltd took place on November 30, 2021.

Dewdas technology Pvt ltd is MCA provider company with the national industrial classification
(NIC) code of 72200. Based on this activity code, the company is involved in the business
activities such as software publishing, consultancy and supply.

4
 COMPANY PROFILE

CIN U72200KA2015PTC078931

COMPANY NAME DEWDAS TECHNOLOGY

PRIVATE LIMITED
COMPANY STATUS ACTIVE

RoC RoC-BANGALORE

REGISTRATION NUMBER 78931

COMPANY CATEGORY COMPANY LIMITED BY SHARES

CLASS OF ORGASATION PRIVATE

DATE OF INCORPORTION 20 FEBRUARY 2015

GSTIN 29AAFCD2572A2ZW

VISION

• Our vision is to be a global leader offering high quality industrial and home automation products and
solutions for all our customers around the world.
• To empower enterprises with scalable, affordable systems and solutions delivered on time with high
quality.

MISSION

➢ Securing the Technological future of company.

➢ Increasing the competitiveness of the company.
➢ To offer unique SMART innovative solutions, products and services.

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 PRODUCT PROFILE

➢ Smart Door lock-SL01 Smart door lock-SL 03

➢ Smart Door lock SL05 Smart Door Lock SL07

➢ Smart Door Look SL08 Smart Door Lock SL09

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➢ Smart Glass Door Lock GD01 Smart Door Lock SL04

➢ Cabinet lock CL02 Cabinet Lock CL04

Cabinet Lock CL08 Cabinet Lock CL16

➢ Cabinet Lock CL18 Cabinet Lock CL25

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 Cabinet lock CL29 Cabinet lock CL11 Cabinet LockCL28

OTHER PRODUCTS

➢ Automatic water level Controller

➢ Automatic hand sanitizer dispenser and temperature measurement
➢ UVC Disinfection Box

MANUFACTURING PROCESS OF ELECTRICAL

➢ Dewdas technology Pvt Ltd, we design & build solutions to cater to your current and future
business requirements. Quality Assurance in the individual activities of development
lifecycle. It allows us to consistently deliver high quality products.

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➢ Risks are identified and prioritized throughout the process and all the major, critical risks are
addressed early in the product life cycle. Thus, the later stages risks can be more effectively
managed without impacting the overall process.
➢ Similarly, changes are introduced in the system in a controlled manner without disrupting the
process. We understand that the change is vital for the survival in today’s fast changing
business environment. So, we anticipate them ahead of time and address them based on the
risks involved.

QUALITY PROCESS

➢ Dewdas technology Pvt Ltd, the quality orientation is integrated in each activity of the
organization, whether it is Process development or testing. We are committed to provide you
a high-quality Products within the time period specified frame. We guarantee the state of
affairs of every aspect of our product and services.
➢ For product quality, our testing team gets involved As a result of a layout stage and develops
a detailed system test plan. All the defects are tracked with thorough inspection through
advanced equipment’s to deliver product/component with minimum defects.
➢ The documentation standard is followed religiously throughout the development cycle.

SERVICES:

➢ RF/Wireless Design RF/Wireless system/module/circuit design, Embedded design, PBC

design, Antenna Design.
➢ Offer unique design solution from concept study to implementation
➢ Can design up to 60 GHz frequency range
➢ Design capability for multi-band, wide-band, phased array antenna
➢ Design capability for wireless low-profile antenna
➢ Capability to study effect of enclosure, PCB layout on antenna performance
➢ Antenna testing in anechoic chamber, far field ranges
➢ Antenna tuning with network analyser / Matching network optimization
➢ Antenna fabrication
➢ Simulation with CST/HFSS Tool flow.

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 QUALITY POLICY:

➢ Customer Satisfaction is the prime measure of our success.

➢ Cost effective and Quality Products to be delivered on time.
➢ Internationally competent products in terms of Price and Quality.

STRUCTURAL CAPABILITIES

A reliable infrastructure outfitted with cutting-edge technologies enables us to carry out a

variety of company operations. Our infrastructure is properly segmented so that various
operations can run without interfering with one another. Our ability to handle the market's
emerging engrossment in less time is thanks to our technically arbitrated body and competent
team. Our most recent tools are simple to use and have greatly increased our level of
productivity. In 10,000 square feet, we have high-tech machinery set up. The facilities
supported with high-quality output.

COMPETITORS

➢ ABEZ Smart Solutions

➢ Agastya Electronics & Home Automations
➢ Laurel Solutions Home Automations Company
➢ Rudo Smart Lock & Cabinet Lock Company
➢ Foshan Onew Metal Corporation
➢ Fortune Marketing Pvt ltd
➢ Megamind Techno soft
➢ Techno Electro Solutions Pvt Ltd
➢ Kt Automation Pvt Ltd
➢ Dhonaadhi Hi-tec Innovations
➢ Moburban Global Pvt Ltd

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SWOT ANALYSIS

STRENGTHS

• A strong return on investment,

• the maintenance of high-quality items,
• a broad distribution network, and several large retail locations.
• Access to raw materials
• The company's greatest asset is its strong teamwork,
• which also contributes to high client satisfaction.

WEAKNESS

• It has a technological entry hurdle,

• limited resources, a lot of industry rivals,
• low R&D and testing lab capabilities, and resource limitations.
• Consumers are not well-informed on the advantages of the product.

OPPORTUNITIES

• We have few rivals nearby,

• we can produce new products,
• we can use new technology and new strategies,
• we can build new markets, and
• we can observe new patterns in consumer behaviour.

THREATS

• Emerging and fierce rivals,

• an evolving regulatory landscape, and
• shifting customer perceptions of our organization.
• Disruptive technical advancements that cost money and time to embrace.

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FUTURE GROWTH AND PROSPECTS

• Dewdas Technology Private Limited is an example of the "Make in India" movement and
focuses on making investment in these industries.
• From start-up to the next level, they ought to be in a stronger position in the market over
the following five years.

PROFIT STATEMENT

B/L sheet Mar-22 Mar-21 Mar-20 Mar-19 Mar-18

DEWDAS
TECHNOLOGY PVT
LTD (in Rs.Cr.)
EQUTIES and
LIABLITIES
SHARE-HOLDER'S
FUND
Equity share-capital 293.55 293.55 293.55 292.71 284.59
TOTAL SHARE-
293.55 293.55 293.55 292.71 284.59
CAPITAL
Reserve and surplus 6,683.65 6,947.25 8,031.75 6,952.83 5,841.48
TOTAL RESERVE AND
6,683.65 6,947.25 8,031.75 6,952.83 5,841.48
SURPLUS
TOTALSHAREOLDERS
6,977.20 7,263.99 8,332.43 7,245.54 6,126.07
FUND
NON-CURRENT
LIABILITIES
Long-Term Borrowings 2,558.01 1,353.86 298.4 512.55 1,146.32
Deferred Tax liabilities 384.29 264.82 249.73 298.58 126.9
Other Long-Term
67 327.32 305.25 205.18 86.48
Liabilities
Long-Term Provisions 189.57 180.69 249.63 255.04 132.55
TOTAL NON-
CURRENT 3,198.87 2,126.69 1,103.01 1,271.35 1,492.26
LIABILITIES
CURRENT
LIABILITIES

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Short-Term Borrowings 1,158.24 1,710.97 100 100 198.64
Trade Payables 5,164.69 2,623.91 5,018.93 4,887.90 3,116.99
Other current liablities 1,485.95 2,039.20 2,867.26 3,023.11 2,587.81
Short -Term Provisions 464.96 624.85 802.77 808.49 518.31
TOTAL CURENT
8,273.84 6,998.93 8,788.96 8,819.50 6,421.75
LIABILITIES
TOTAL CAPITAL AND
18,449.91 16,389.61 18,224.40 17,336.39 14,040.07
LIBALITES
ASSETS
NON-CURRENT
ASSET
Intangible Assets 1,451.19 1,360.45 808.53 736.54 314.71
Capital Work-In-Progress 228.78 420.97 274.64 234.33 157.6
FIXED ASSETS 7,422.24 7,397.71 6,272.13 5,970.61 5,176.67
Non-Current Investments 3,068.72 2,719.63 2,636.50 2,451.51 2,001.68
Long-Term loans and
20.5 32.42 31.71 33.54 45.57
Advances

Other Non-current assets 486.92 816.36 1,097.72 817.26 716.02

TOTAL NON-
10,998.38 10,966.12 10,038.06 9,272.92 7,939.95
CURRENT ASSETS
Current Investments 0 0 0 3,155.16 877.17
Inventories 2,142.29 1,238.00 2,684.67 1,758.33 2,631.03
Trade Receivables 2,816.00 1,179.82 2,505.53 944.78 1,064.39
Cash &Cash Equivalents 822.95 1,322.47 1,373.59 1,042.16 911.97
Other current asset 1,649.67 1,660.20 1,600.09 1,138.94 594.09
TOTAL CRRENT
7,451.53 5,423.49 8,186.34 8,063.47 5,977.12
ASSET
TOTAL ASSETS 18,449.91 16,389.61 18,224.40 17,336.39 14,040.07

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GAINS AND LOSSES

PROFIT&LOSS
ACCOUNTS OF
DEWDAS
Mar-22 Mar-21 Mar-20 Mar-19 Mar-18
TECHNOLOGY
LTD (in Rs Cr)
Income
Surplus from
15,301.45 17,267.22 28,614.03 26,242.38 21,054.59
activities (gross)
Less:
0 0 0 276.6 1,313.01
excise/service
Tax other levies
Gain from
15,301.45 17,267.22 28,614.03 25,965.78 19,741.58
logistics (net)
functioning
15,301.45 17,467.47 29,054.95 26,356.40 20,140.13
sales total
Other income 119.5 123.34 109.94 196.58 136.27
Total revenue 15,420.95 17,590.81 29,164.89 26,552.98 20,276.40
Expenses
price of the
11,118.96 10,384.46 20,872.27 16,496.62 13,148.80
supplies
Acquiring of
746.66 793.22 766.1 659.36 1,583.39
stock-in trade
Increases in the
FG WIP and
-462.31 1,191.47 -958.8 1,275.10 -758.8
stock-in-trade
inventories
Compensation
1,583.89 1,615.06 2,098.77 1,837.78 1,480.05
costs for staffs
Finance costs 306.79 109.45 70.38 147.28 155.38
Other expenses 1,779.11 2,309.61 3,140.87 3,124.02 2,484.16
Total expenses 15,820.81 17,073.07 26,610.60 24,138.64 18,610.87
Items and tax

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 Exceptional
-12.05 -155.82 -57.49 -28.51 -335.45
items
P&L befor tax -411.91 361.92 2,496.80 2,385.83 1,330.09
Current tax 0.02 71.74 378.2 677.25 313.72
Entitlement
Deferred tax -98.25 50.66 135.4 -9.15 -206.71
Total tax
-98.23 122.4 513.6 668.1 107.01
expenses
Profit or loss
-313.68 239.52 1,983.20 1,717.73 1,223.08
from continuing

RATIOS:

Financial ratiosof Mar-22 Mar-21 Mar-20 Mar-19 Mar-18

DEWDAS
TECHNOLOGY PVT
LTD (in Rs Cr)
Share ratios
EPS in Rs -1.07 0.82 6.76 5.87 4.24
Diluted EPS in Rs -1.07 0.82 6.76 5.85 4.24
Cash EPS in Rs 1.48 3.1 8.87 7.91 6.12
Book Value (Exclusive 23.77 24.75 28.39 24.75 21.53
Revel Reserve /Share
in Rs
Book Value [Inclusive 23.77 24.75 28.39 24.75 21.53
Revel Reserve]/Share
Rs
Dividend /Share (Rs.) 0.6 0.5 3.1 2.43 1.56
Revenue from 52.13 59.5 98.98 90.04 70.77
Operations/Share (Rs.)
PBDIT/Share (Rs.) 2.23 4.42 11.06 10.8 8.22
PBIT/Share (Rs.) -0.32 2.14 8.94 8.75 6.4
PBT/Share (Rs.) -1.4 1.23 8.51 8.15 4.67
Net profit share in Rs -1.07 0.82 6.76 5.87 4.3
PROFITABLITY
RATIO
15
PBDIT margin % 4.27 7.42 11.17 11.98 11.61
PBIT margin % -0.6 3.59 9.03 9.71 9.04
PBT margin % -2.69 2.07 8.59 9.05 6.6
Net profit margin % -2.05 1.37 6.82 6.51 6.07
Return on net worth % -4.49 3.29 23.8 23.7 19.96
Return on capital -0.91 6.67 27.81 30.07 16.05
Employed %
Return on Assets % -1.7 1.46 10.88 9.9 8.71
Total Debt/Equity (X) 0.53 0.42 0.05 0.08 0.22
Asset Turnover ratio% 0.88 106.57 159.42 152.02 143.44
RATIOS OF
LIQUIDITY
Present ratio 0.9 0.77 0.93 0.91 0.93
Quick ratio 0.64 0.6 0.63 0.71 0.52
Inventory Turnover 6.58 14.11 10.82 14.99 7.65
Ratio
Dividend pay-out ratio 0 530.32 43.35 31.98 26.6
NP
Dividend pay-out ratio 0 139.69 33.01 23.72 18.69
CP
Earnings Retention 0 -430.32 56.65 68.02 73.4
ratio %
Cash earning retention 0 -39.69 66.99 76.28 81.31
ratio %
VALUATION RATIO
Enterprise value in Cr 36,196.55 14,379.69 25,825.93 42,101.15 24,494.90
Net operating Revenue 2.37 0.82 0.89 1.6 1.22
EV/EBITDA (X) 55.29 11.09 7.96 13.32 10.47
Net operating 2.18 0.72 0.92 1.61 1.19
revenue/Market cap
Retention ratios % 0 -430.32 56.64 68.01 73.39
BV/Price 4.77 1.74 3.22 5.87 3.93
Net operating/Revenue 2.18 0.72 0.92 1.61 1.19
Earnings Yield -0.01 0.02 0.07 0.04 0.05

16
STATEMENT of CASHFLOW

CASH FLOW OF Mar-22 Mar-21 Mar-20 Mar-19 Mar-18

DEWDAS
TECHNOLOGY
PVT LTD (in Rs Cr)
Net income or loss
before unusual -313.68 239.52 1,983.20 1,717.73 1,223.08
expenditures and taxes
From operating
operations, net funds 21.13 941.06 -362.35 5,643.37 2,154.77
flow
Net cash used for -
-975.19 2,311.49 -3,429.22 -1,476.82
investment objectives 2,177.45
Utilized net cash for -
205.97 1,148.98 -2,090.93 -1,371.85
activities of financing 1,616.16
Foreign Exchange
-0.82 1.47 0.53 0.17 -1.4
gain/loss
cash equivalents start
1,279.04 1,364.98 1,031.47 908.08 1,562.73
era
Cash equivalents last
530.13 1,279.04 1,364.98 1,031.47 868.61
era

17
 CHAPTER-2

THEORETICAL BACKGROUND AND LITERTURE REVIEW

STUDY'S THEORETICAL BASIS

Capital serves as the backbone of all financial transactions and significant advancements.
Improvements in economics are frequently gauged by the economy's total number of projects.
Cash is what is meant by the phrase "capital" in everyday usage. Capital within the financial
industry, however, has extra effects. Everything created by people and utilized in the
construction process is considered capital. With regarding to the qualifying gifts from nature
that yield revenue, capital consists of various kinds of surplus.

WORKING CAPITAL MANAGEMENT

The amount of money needed for a company's everyday operations is known as the working
capital. It is usually referred to as modifications to noncurrent assets as well as liabilities, as
well as the contradiction between resource inflow and surge. Operating capital relates to the
company's net cash-inflow.

The amount of working capital is made up of current assets as well as current obligations.

Currently held assets - "Currently held assets have a limited lifespan. These kinds of assets
are employed in the ongoing operations of an organization and are typically the company's
short-term activities within accounting period, or within a period of twelve months. Such assets
have two key traits: (i) a brief lifespan; and (ii) a quick conversion into new types of assets.
Accounts receivable may have a life of 30 to 60 days, while inventories may be preserved for
30 to 100 days. Cash balances may be left inactive for a week or two.

Currently Liable Assets A current liability in favour of creditors (sellers) is created when a
business purchases raw materials on credit. Occasionally, this obligation is referred to as
accounts payables.

WC is significant keeping into consideration the fact that it furnishes go with reserves it
necessities to take care of its bills, buys stock, and cover different costs related with maintaining
its business. A company that doesn't have enough working capital may trouble meeting its
obligations, which could cause financial problems or even bankruptcies.

A very much oversaw working capital cycle can likewise further develop productivity, lessens
monetary gamble, and improve organization's general seriousness. By upgrading its
functioning
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capital cycle, an organization can lessen the gamble of monetary trouble, further develops
productivity and improve its general seriousness.

Successful working capital administration includes dealing with an organization's ongoing

resources and liabilities in a manner that guarantees it has sufficient income to meet its
momentary commitments and asset its tasks. This incorporates overseeing stock level to keep
away from stockouts and over stocks, gathering debt claims as quickly as possible, and paying
records payable on chance to try not to late expenses and keep up with great connection with
providers.

Effective WC management necessitates constant attention and monitoring to ensure the

company's continued financial health and competitiveness. It is a crucial component of any
company's success.

TYPES OF WORKING CAPITAL

WORKING
CAITAL

VALUE BASED TIME BASED

TEMPORARY PERMANENT
GROSS NET WORKING WORKING
WORKING WORKING
CAPTAL CAPITAL CAPITAL
CAPITAL

Working capital is the cash on hand that the company needs to pay for continuous operating
costs. What is utilized to assess a corporation is the difference between its constant assets and
its ongoing liabilities. Working cash is essential for covering expenses, investing in
opportunities for growth, maintaining a sound financial base.

The amount of cash on hand that a business needs to meet its immediate obligations and
expenses is known as working capital. It is determined by dividing the company's present
wealth by its present debts. Cash, receivables, inventory, and other assets that may be quickly
converted into cash within a year are considered assets at the moment.

19
 Examples of current commitments involve accounts owing, short-term loans, and other debts
the fact that must be repaid within the span of one year.

The management of work is an essential component of any business's financial management.

A business must strike a balance between the cash it needs and the money it needs to invest in
growth opportunities to stay in good financial shape Properly handling working capital may
help a business boost cash flow, reduce risk of a financial crisis, and set themselves up for a
successful future.

There are two classifications of working capital:

• Value-based wc

Reducing the amount underlying working capital necessary for a firm to be profitable is the
goal of the financial management technique known as value-based capital planning. This
method examines at a company's operations to determine ways reducing the amount of financial
resources kept in assets like inventories, accounts receivable, and other assets.

Value-based fundraising seeks to create a balance between the need for operating capital and
the need to put money toward prospective growth areas. A company can free up funds for
investment from venture capitalists for new goods, services, or sectors by reducing the total
amount of working capital required to function..

Value-based working capital involves several key strategies, including:

1.Decreasing inventory levels: By streamlining inventory control procedures, a business may

lower the inventory quantity it must maintain to satisfy client demand.

2. Speeding up collections: A business can decrease the volume of cash held in accounts
receivable by increasing the pace at which customers pay their invoices.

3. Managing payables: A business can lower the profit of money required to pay bills by
arranging favourable payment arrangements with suppliers.

By putting these tactics into practice, a business may lower its requirements and enhance its
cash flow, both of which can contribute to its long-term success.

20
 In value-based there are 2 types of working capital

1.Gross working capital

Net working capital is the entire current assets that a company has on hand to cover
any immediate financial commitments. Cash can be generated from money, receivables, shares,
and other assets that mature in a year or less.

ross The goal of working capital management is to maintain an acceptable level of liquidity to
sustain continuous operations while ensuring that a company has enough current assets to
satisfy its short-term in nature financial obligations, such as paying its employees and suppliers.

Effective Operating funds overall management involves several key strategies including:

1. Maintaining enough cash reserves: By keeping adequate financial reserves, a company may
ensure that it has enough liquidity for meeting its short-term monetary obligations.

2. Managing inventory levels: A business may free up more cash reserves by managing
inventory levels to correspond with forecasted demand.

3.Accounts receivable management: By accelerating collections through accounts receivable

management, a business may free up more operating fund.

4.Managing payables: A business can lessen the money required to pay bills by managing
payables to take advantageous payment periods.

By putting these tactics into practice, a business may maximize its gross orderly capital markets
short-term financial obligations while still having enough cash to finance ongoing operations.

Capital expenditures net

The disparity between an organization's existing assets and current liabilities. working capital
net. It demonstrates how much capital a company has available to meet its immediate financial
obligations after taking into consideration its immediate liabilities. Making sure a company has
enough cash on hand to pay its immediate financial obligations while still maintaining a high
enough level of liquidity to sustain continuous operations is management's goal.

A corporation with a positive networking capital implies that it has sufficient liquid assets to
satisfy its immediate financial commitments, whereas a negative network capital suggests that
it may struggle to do so.

21
Time based working capital

A accounting and leadership strategy called time-based working capital seeks to reduce the
amount of working capital needed for a company to operate successfully over a particular
length of time. In order to reduce the amount of working capital that is entangled in stocks,
accounts outstanding, and other assets throughout the course of a specific time period, the
operations of an organization are looked at in this method. Time-based capital management
seeks to keep as little working capital as possible locked up in long-term assets while ensuring
that a company has adequate money to pay for its immediate obligations, such as paying
employees and suppliers. This approach understands that a company's working capital needs
may alter over time depending on factors like as demand during particular times of year, the
status of the economy, and potential growth prospects.

Temporary working capital

Impermanent finances includes dealing with an organization's momentary monetary

commitments and income needs. A company's capital investments is the amount it needs in the
near term, to pay its vendors, pay its workers, and meet other costs associated with operations.

A company's day-to-day operations typically necessitate temporary working capital, which can
be affected by seasonal fluctuations in demand, shifts in market conditions, and shifts in the
production cycle of the business.

Permanent working capital

The management of a company's long-term financial obligations and cash flow requirements
is part of permanent working capital management It is the amount of financial resources that a
business requires to support its expansion and growth ambitions while maintaining its daily
operations. Dissimilar to brief which is centered around momentary monetary commitments,
extremely durable is centered around long-haul monetary commitments like putting resources
into new hardware, venturing into new business sectors, and growing new items.

BENEFITS OF CAPITAL EXPENDITURES

1.Improves cash flow: A company's ability to satisfy its immediate financial commitments can
be improved through financing management that is effective.

2. To minimize financing costs: A corporation may reduce its reliance on external finance and
cut financing costs by managing working capital.

22
3.Raise profitability: By maximizing working capital, a business may raise profitability by
freeing up resources that would otherwise put in non-productive assets like excess inventories.

4.Increases credit worthiness: By proving business has the financial resources necessary to
satisfy its financial commitments, may increase a company's credit worthiness.

5.Strengthen supplier relationships: By successfully managing working capital, a firm may

make timely supplier payments and foster long-lasting supplier relationships.

6.Betters the connection with the consumer: By successfully managing working capital, that
it has adequate inventory to fulfil customer demand and prevent stockouts, which can raise
satisfaction.

7.Supports growth and expansion: A corporation may free up the funds necessary to support
growth and expansion goals by maximizing working capital.

8.Reduces risks: By ensuring that a firm has the resources necessary to satisfy its financial
responsibilities, effective working capital management may lower the chance of a company
experiencing financial difficulties.

9.Promotes financial stability: Working cash helps companies cover short-term needs like
buying raw supplies, paying employees, and covering overhead costs. Some of these payments
are irreversible. A firm may remain solvent by sustaining an ongoing flow of output with
sufficient cash.

10.Cost advantage: Making timely or early payments enables a company to negotiate

favourably, purchase goods at deeply discounted prices, and gain a rivals. This boosts sales and
profitability.

LIMITATIONS OF WORKING CAPITAL

1.Limited Scope: Working capital management only focuses on short-term financial

obligations and does not consider long-term financial obligations and does not consider long-
term financial obligations, such as investments in property, plant, and equipment.

2.Inflexibility: Working capital management strategies can be inflexible and may not adapt to
changing market conditions or unexpected events.

3.Limited Impact: Working capital management strategies may have a limited impact on a
company’s financial performance and may not be able to address larger financial issues.
23
4.Costly: Implementing working capital management strategies can be costly and may require
significant resources, such as hiring additional staff or investing in new technology.

5.Complex: working capital management can be complex and may require specialized
knowledge and expertise to implement effectively.

6.Competitive pressures: Working capital management strategies may be affected by

competitive pressures, such as the need to maintain inventory levels to meet customer demand
or the need to offer extended payment terms to remain competitive.

7.Limited access to financing: Companies with limited access to financing may find it difficult
to implement effective working capital management strategies, as they may not have the
resources needed to invest in new technology or hire additional staff.

8.Limited Control: Companies may only have a limited amount of contribute to over external
factors, such as changes in interest rates, currency rates, or commodity prices, that might have
an impact upon their financial resources.

9.Limited information: Companies could lack deep understanding about their suppliers,
clients, or rivals, which can make it challenging to adopt financial oversight techniques.

10.Limited access to data: Companies may have limited access to data about their working
capital, such as inventory turnover rates or days sales outstanding, which can make it difficult
to identify areas for improvement.

11.Limited resources: Small and medium-sized businesses may have limited resources to
invest in working capital management, such as hiring additional staff or investing in new
technology.

12.Limited expertise: Companies expertise in the availability of working capital which can
make it difficult to identify areas for improvement or implement effective strategies.

FINANCIAL CASH RESOURCES

1.Trade credit: This is credit extended by suppliers to their customers, allowing them to
purchase goods or services on credit terms. This can provide a source of working capital for
the customers, as they can use the goods or services to generate revenue before paying for them.

2.Bank credit: A bank will offer a firm a loan or a line of credit that can be utilized to finance
its financial needs. The revolving line of credit, which can be drawn upon and repaid as
necessary, or a term loan, which is returned over a set length of time.

24
3.Factoring: This is the practice of selling accounts receivable at a discount to a third party
known as a factor. This gives the company quick access to cash that it may utilize to pay for its
financing needs.

4.Equity financing: This is the exchange for cash for the sale of ownership in a company.
Common stock, preferred stock, or other equity securities may be used to accomplish this.
Equity finance can be available.

5.Sale of assets: The sale of non-core assets, such as real estate or equipment, to generate cash.
This can provide a source of working capital, as the business can use the cash to finance its
operation.

6.Retained earnings: It refers to the part of a company's profits that isn't paid out as payments
but is instead put back into the company. Retained earnings can provide a source of working
capital, as the business can use the funds to finance its operations.

7.Commercial paper: The brief financial product that big businesses issue to pay for their
financial needs. Commercial paper typically has a maturity of less than 270 days and is sold at
a discount to face value.

8. Crowd funding: the process of raising funds from a large number of people, typically
through an online platform. Crowd funding can provide a source of working capital, as the
business can use the funds to finance its operation.

25
 COMPONENTS WORKING CAPITAL

Accounts
Inventories
payable

Accounts
Cash
Receivable

1.Cash: it is a most liquidity asset and most significant of capital reserve cash is utilized to
cover everyday expenses including wages, rent, and utility bills.

2. Accounts receivable: These are the sums of money that clients owe the business for the
goods and services that they financed. Debt claims can make up a significant portion ital since
they address the company's future obligation of providing cash.

3.Inventory: This encompasses the products or raw resources that the business now owns or
may purchase. Stock creation can be an essential component of the operating budget because it
absorbs funds until it is transferred.

4. Accounts payable: This is the money company pays vendors for labor and goods that were
purchased using a credit card. Working capital can play a crucial role in creditor
responsibilities.

26
WORKING CAPITAL CYCLE

PURCHASE
Purchase OF RAW Production
MATERIAL

WORK-IN-
CASH PROGRESS

Collection
Production

ACCOUNTS
FINISHED
RECIVEAB GOODS
LE

Customer Invoiced SALES

Customer Invoiced

Regarding the services' operating cycle

Cash to accounts receivables conversion

Receivables to cash flow

ACCOUNTS
CASH RECEIVABLES

The operational cycle of a corporation that trades is the conversion of cash into completed
goods inventory.

Debtors to Cash and Stock to Debtors

27
SIGNIFICANCE OF WORKING CAPITAL

Maintain
liquidity

improves
supplier Improves
realtionship profitability

Significane
ofWC

Enhances
Increase in
creditwor-
growth
hiness

Recduce
risk

1. Assists with maintaining liquidity: Good control over working capital makes sure a
business has enough cash flow to cover its immediate needs and maintain liquidity.

2. Increases profitability: By reducing the amount of cash retained in stocks and other non-
assets, the control of working capital may help an organization's profitability rise.

3.Increases Creditworthiness: Effective working capital management may boost a business's

creditworthiness and simplify the funding procedure.

4.Reduces Economic Risk: By successfully managing short-term assets and obligations, a

business may lower its financial risk and avoid exorbitant fines and fees.

5.Betters supplier connections: Good management of working capital can improve a

company's connections with its suppliers by ensuring that invoices are paid on time.

6. Growth management skills have improved. As a business grows, it has to successfully

handle its working capital to ensure that it generates enough cash flow to finance its
development.

28
Any firm needs to handle its working capital effectively to succeed. In order to have sufficient
funding to pay short-term obligations, it entails managing a company's short-term assets and
liabilities. This is crucial since it ensures that a business can avoid, have good connections with
its suppliers, and pay its payments on time. By releasing the cash that is locked aside in
inventory and other non-cash assets, efficient financing management may also increase a
company's profitability. In summary, good financial management and securing a company's
future growth are dependent upon effective working capital management.

REVIEW IN LITERATURE

Already constructed or disseminated is an account of on a particular research topic by

recognized scholars and researchers is known as a literature.

It is a comprehensive, in-depth, systematic, assessment the selected literature to determine how

the study presented can benefit from it.

Gilli and Biger in 2013 The investigation taught us that the BOD is responsible for raising
operating capital. The administration acknowledges that the gamble variation shows up in
higher income. The working capital of any company affects its financial condition and profit
ratios.

2012 Quayyum: in this connection between profitability and management. It demonstrates

how to make the most of working capital. He also employs the method of studying various
variables in order to maximize profitability. His review finished up all the business which he
analysed has adequate connection in benefit and working capital administration aside from food
industry.

In the case of Lingesiya and Nalini (2011), when the management of the company's working
capital components is compared to their performance, It demonstrates that more stock is
invested, receivables are decreased, and current wealth are grown, leading to a larger return on
investment.

2014 Marobhe: The examination involves the ROA and working capital edge systems as
dependant on different free calculates his review named working capital organization and
productivity Additionally, there was a confirmed to be the relationship between profitability
and money change sectors between 2005 and 2012 when charge percentage and friend size
were used to analyse business development.

29
As indicated by Almazari (2003), a examination named an exact investigation of the
connection between overseeing working capital and efficiency. This examination shows that
productivity impacts the current rate and that developing the association's size additionally
increments benefits. Analyse the connection between WCM and productivity in greater detail
using a regression test.

Gill, Biger, and Mathur examined 88 US businesses' profitability and working capital
oversight in their 2010 study. The study emphasized the cash conservation cycle in particular.
They utilized a data set of 300 monetary reports from 2005 to 2007 to observe that the
receivables are associated with productivity and might be diminished by giving clients a more
limited credit period.

2013's Ibrahm awad and Fhema Jayar They look at the productivity and liquidity in this. It
gives understanding into the course that functioning capital administration and liquidity have
on remunerations and different results. Progresses in unit root test coordination utilizing
financial measurements all altogether, the eleventh gathering organizations remembered for the
per come on board declaration for the Engle and Granger approach with mistake review show.

Knauer, Thorsten, and Wohrmann 2013: The success of a business is dependent on how
well it manages its current obligations and assets, according to this study on the control of
working capital and organizational efficiency. according to this study on the control of working
capital and organizational efficiency. WCM's short-term effects on liquidity are obvious, but it
is also observed to disrupt business productivity.

2013 Omo Aregbeyen: The WCM on the productivity of Nigeria's manufacturing industries.
This study found that a company's profitability can be guided byWCM. An observational
explanation of how WCM has affected Nigerian manufacturing companies is provided by this
study.

2012's Haitham Nobanee The customary connection between the money change cycle and
firm productivity in this WCM and industry benefit puts limitations on the money change
cycle's capability to increment organization proficiency. However, reducing the cycle of money
changes could be detrimental to association tasks and reduce benefits.

30
2015 Pays M.A., and Gama, P.M. They gave this the heading "WCM and SMEs benefit." In
an effort to determine the profit of micro and medium-sized businesses in relation to effects of
WCM, Portuguese research utilized statistical and economic approaches to investigate samples
of 6063 SMEs. Profitability has been find to have a negative correlation for the variables INV,
PMP, PMR, and CCC.

2015: This is referred to as the link between the cash conversion cycle and business sizes by
Bhutto N, Abbas Ur Rehman M, and Shah S. Working capital techniques and an
organization's productivity are connected, and there are eminent contrasts between them as far
as both the organizations' monetary and stock strategies.

Sonia B. Caballero and Tpedro (2012), Working Capital Management's Rate of Adjustment.
This study breaks down working capital management into its component parts and looks at how
quickly employees adjust to their goals.

Axel Sells (2012) says that the calculation of wc for the aim of evaluating businesses in
developing countries is looked at, as are some fundamental comparisons between different
methods for figuring out what makes working capitals unique of WC's perspective on a pay
examination as the point of convergence of monetary valuation of endeavors, ideas are created
for which repeating costs are to be used as avocation for the goal.

2016 Bhatia and Srivastava: In this review, there was a negative connection between
functioning capital and company execution. According to Bhatia and Srivastava, the success of
an organization is inversely correlated with its financial reserves. When they used the OSL
technique, constant impact models, and arbitrage impact models to conduct their investigation,
they found that proficient use of WC is necessary to further enhance the overview.

S. M. Takon and F. A. Atseye (2015): The use of secondary information from the balance
sheets and income statements of selected listed firms' annual financial reports for evaluating
the effects of WCM on the profitability particular Nigerian enterprises.

D. Mathuva, 2015: The investigation examines the impact of WCM features on the corporate
effectiveness of Kenyan registered associations using a relapsing model and data for the years
1993 to 2008. The results of the study show a negative link between profitability and customer
cash accumulating timeframes.

31
2008: Appuhami, B. R. Empirical research across a variety of sectors in Thailand attempted
to ascertain how capital investment influences WCM by utilizing a regression model and data
from the Thailand stock market of businesses. They will be greatly affected by the capital
investment.

2016: L. M. Gelsomino, A. Perego, R. Mangiaracina, and A. Ellinger This study, titled

"Supply chain finance," attempted to provide direction by investigating supply chain finance
using this approach based on previous research. 2014. It presents perspectives that are "supply
chain oriented" and "finance oriented.".

2020: Virolainen V, Lind L, and Karri T The WC administrators in the Russian car retailer
network. Pirttila M The handling of resevers in the Russian auto retailer network has made an
effort to examine the problem from view the inventory network and should examine the
organization's exchange using WCM models and the premise of exchange costs.

32
 CHAPTER- 3

RESEARCH DESIGN

AN OUTLINE OF THE PROBLEM:

Managing the flow of cash in a manufacturing organization is a very dangerous as well as

challenging task. For a business to be profitable, its cash status needs to remain stable. It’s the
important risk that all firms face. As a result of this, it's crucial to manage WC components
like cash flow, receivables, and inventory well. Studying the use of working capital is
essential since a firm cannot make a profit or increase its sales without properly managing
funding, which involves keeping track of it, making plans for it, and then assessing it
frequently in order to find any difficulties.

NEED FOR THE STUDY:

Recognizing the important of WC management & it’s impact on business profit and turnover
is necessary for the research. This is due to the WC cannot be adequately controlled, monitored,
planned, and evaluated on a regular basis to eliminate bottlenecks.

PURPOSE OF THE STUDY:

•To evaluate the repayment term for creditors and debtors.

• To examine how liquidity affects the firm's productivity and profitability.

• To assess the efficiency of the operational cycle.

• To prevent cash blocks and guarantee speedy cash circulation.

SCOPE OF THE STUDY:

The scope of the activity is restricted to Limited information of company which considering
only five years financial statement.

33
 Research methods such as

To conclude this project, the information shown below was compiled from the sources listed
below.

➢ Supplementary sources of the company's books and records, yearly reports it has issued, and
other periodicals. The following sources provide the secondary information.

• Gathering the necessary information from "DEWDAS TECHNOLOGY Pvt Ltd.’s yearly
records, monthly records, internal published book, or profile.

• Additional books, periodicals, and publications.

• Corporate Annual Reports.

Hypotheses:

1) H0 = There is no significant relationship between payback period of creditors and debtors.

H1= There is a significant relationship between payback period of creditors and debtors.

2) H0= There is no positive impact of liquidity on profitability and efficiency of the firm.

H1 = There is a positive impact of liquidity on profitability and efficiency of the firm.

LIMITATIONS:

▪ Although the investigation made use of data that had been accessible for five years, a
corporation cannot be studied using this technique.

▪ Finance is a particularly complex topic that includes organizational management: owing to this,
this study predominantly relies on data gathered from the financial documents of the business,
each of which has its own limitations.

▪ The correctness and trustworthiness with which the facts were established utilizing information
from financial accounts.

Research gap
To learn about the working capital management in a company which helps business to manage
their funds and to enhance the liquidity flow in the Dewdas technology private ltd.

34
Chapter scheme:

Chapter-1: Introduction

Chapter-2: Conceptual Background Review in Literature

Chapter-3: Research Design

Chapter-4: Analysis and interpretation

Chapter-5: Finding Suggestion and Conclusion

35
 CHAPTER-4

DATA ANALYSIS

1.DEBTORS

Anova:
Single
factor
Summary

Groups Count Sum Average Variance

Debtors 5 150 30 387.5
order
completion 5 75 15 0
day

Anova:

Source of
SS DF MS F P-value F-crit
variation
Between
562.5 1 562.5 2.9032258 0.1268 5.31766
groups
Within
1550 8 193.75
Groups
Total 2112.5 9

Since the p value in this case is 0.12 and the alpha value1 that we cannot rule out the null
hypothesis, hence H1 is accepted.

36
3)CREDITORS
Anova:
Single
factor
Summary
Groups Count Sum Average Variance
Creditors no 5 450 90 1400
of days
no of days 5 600 120 0

Anova
Source of
SS DF MS F P-Value F crit
Variation

Between Groups 2250 1 2250 3.214286 0.11076 5.31766

Within Groups 5600 8 700

Total 7850 9

Since, in this case, this case is 0.11 and the alpha value is 0.05, null hypothesis can be accepted.

3. WORKING CAPITAL V/S CURRENT Ratio

Anova:
Single factor

Summary

Groups Count Sum Average Variance

WC Rs Cr 5 -4201 -840.21 190225.59

Current ratio 5 4.44 0.888 0.00452

37
 Source of
SS DF SM F P-value F crit
variation

Between 1768598 1 1768598 18.59474 0.00257 5.31766

Groups
Within 760902 8 95112.8
Groups
Total 2529500 9

Here, the null hypothesis is rejected since the F value is greater than 18.59, and this is
significant result H1 is therefore approved.

RATIO ANALYSIS

1.Current Ratio

This ratio, also known as the present-day ratio on occasion, is used to assess the firm's current
financial position.

Formula:
Current Assets / Current
Liabilities

Year 2022 2021 2020 2019 2018

Current assets 7,451.53 5,423.49 8,186.34 8,063.47 5,977.12

Current
8,273.84 6,998.93 8,788.96 8,819.50 6,421.75
Liabilities
Ratio 0.9 0.77 0.93 0.91 0.93

38
 Year Current Ratio

2021-2022 0.9

2020-2021 0.77

2019-2020 0.93

2018-2019 0.91

2017-2018 0.93

Current Ratio
1 0.93 0.93
0.9 0.91
0.9
0.77
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation:
The business's current ratio is in good shape, however between 2020 and 2021 it declined by
0.77, while between 2021 and 2022 it increased by 0.9, indicating the company's expansion.

2)Inventory Turnover ratio

A quantitative measure of the turnover of inventories ratio metric that demonstrates how
frequently a firm sells and replaces inventory over a specific time period.

Formula:
= Cost of goods sold
Average inventory

39
 Year 2022 2021 2020 2019 2018

Cost of 15,420.95 17,590.81 29,164.89 26,552.98 20,276.40

goods sold

Average
2,142.29 1,238.00 2,684.67 1,758.33 2,631.03
Inventory

Ratio 6.58 14.11 10.82 14.99 7.65

Inventory
Year turnover
ratio
2021-2022 6.58
2020-2021 14.11
2019-2020 10.82
2018-2019 14.99
2017-2018 7.65

Inventory turnover ratio

16 14.99
14.11
14
12 10.82
10
7.65
8 6.58
6
4
2
0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation

The inventory turnover ratio of Dewdas Technology PVT. Ltd. is observed in the graph above,
and it fluctuates over the 5 years from 2018 to 2022. It’s been noted that the ratio will be 14.11
lower in 2021-2022 than it was in 2021-2021.

40
3)Accounts Receivable Turnover Ratio

The typical number of times a corporation collects the receivable amount is measured by the
account receivable turnover ratio.

Formula:
Net credit sales
=
Average account receivable

Year 2022 2021 2020 2019 2018

Net Credit
30,301.45 17,267.22 28,614.03 25,965.78 19,741.58
Sales
Average
Account 2,816.00 1,179.82 2,505.53 944.78 1,064.39
Receivable
Ratio 10.76 14.63 11.42 26.1 18.54

Year ART Ratio

2021-2022 10.76
2020-2021 14.63
2019-2020 11.42
2018-2019 26.1
2017-2018 18.54

41
 Accounts Receivable Turnover Ratio
30
26.1
25

20 18.54

14.63
15
10.76 11.42
10

0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation
The company's account receivable turnover ratio decreased in the years 2021–2022, or 10.76,
when it’s compared to the years 2020–2021, or 14.63, and it was noted that ratio is decreased
in the years 2019–2020, or 11.42, contrasted to the years 2020–201–2021, or 14.63, but it
increased in the years 2018–2019, or 26.1.

4)Accounts Payable Turnover ratio

A quick liquidity metric called the account payable turnover ratio used to quantify how quickly
a business pays its suppliers.

Formula:
𝐂𝐫𝐞𝐝𝐢𝐭 𝐩𝐮𝐫𝐜𝐡𝐚𝐬𝐞
= 𝐀𝐯𝐚𝐫𝐚𝐠𝐞 𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐩𝐚𝐲𝐚𝐛𝐥𝐞

Year 2022 2021 2020 2019 2018

Credit
464.96 624.85 802.77 808.49 518.31
Purchase

Average
Account 5,164.69 2,623.91 5,018.93 4,887.90 3,116.99
Payable

Ratio 0.09 0.23 0.15 0.16 0.16

42
 Year APT Ratio
2021-2022 0.09
2020-2021 0.23
2019-2020 0.15
2018-2019 0.16
2017-2018 0.16

APT Ratio
0.25 0.23

0.2
0.16 0.16
0.15
0.15

0.1 0.09

0.05

0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation
Accounts Payable's turnover ratio dropped in the years 2021–2022, when it was 0.09 in contrast
to the year before, when it was 0.23. It also decreased in the following year, when it was 0.15
in the years 2019–2020, indicating that the ratio has been declining in the years 2018–2019 and
2017, when it was 0.16 and 0.16, correspondingly.

43
5) Quick Ratio or Liquidity Ratio
The quick ratio determines an organization's short-term liquidity circumstances by calculating
its capacity to settle immediate debts using its most convertible asset.

Formula:
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐚𝐬𝐬𝐞𝐭𝐬 − 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲
=
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬

Year 2022 2021 2020 2019 2018

Current assets 7,451.53 5,423.49 8,186.34 8,063.47 5,977.12

Inventory 2,142.29 1,238.00 2,684.67 1,758.33 2,631.03

Current
8,273.84 6,998.93 8,788.96 8,819.50 6,421.75
Liabilities

Ratio 0.64 0.59 0.62 0.71 0.52

Quick
Year
Ratio
2021-2022 0.64
2020-2021 0.59
2019-2020 0.62
2018-2019 0.71
2017-2018 0.52

44
 Quick Ratio
0.8
0.71
0.7 0.64 0.62
0.59
0.6
0.52
0.5

0.4

0.3

0.2

0.1

0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation
The business's quick ratio, the ratio appears to be declining over time. When compared to 2018-
2019, the ratio for 2017-2018 is down 0.71, but it increases again in 2019-2020, down 0.59.

6)Debt Equity Ratio

Debt to equity ratio used to evaluate a company’s financial leverage, which compares a
company’s total liabilities with its shareholder’s equity.

Formula
𝐓𝐨𝐭𝐚𝐥 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
=
𝐓𝐨𝐭𝐚𝐥 𝐬𝐡𝐚𝐫𝐞 𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐞𝐪𝐮𝐢𝐭𝐲

Year 2022 2021 2020 2019 2019

Total Liabilities 8,273.84 6,998.93 8,788.96 8,819.50 6,421.75

Total
Shareholders’ 293.55 293.55 293.55 292.71 284.59
Equity
Ratio 28.18 23.84 29.63 30.13 22.56

45
 Debt to
Year equity
ratio
2021-2022 28.18

2020-2021 23.84

2019-2020 29.63

2018-2019 30.13

2017-2018 22.56

Debt to equity
35
29.63 30.13
30 28.18

25 23.84
22.56

20

15

10

0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation
The company's debt-to-equity ratio will rise by 28.18 in 2021-2022, fall by 23.84 in 2020-2021,
and fluctuate over the last three years by 29.63, 30.13, and 22.56 (in that order) in 2019-2020,
the year 2018-2019 and 2017-2018.

46
7)Creditors Days

Formula:
=Trade payable/cost of sales*365days

Year 2022 2021 2020 2019 2018

Trade
5,164.69 2,623.91 5,018.93 4,887.90 3,116.99
payable
Cost of
15,301.45 17,267.22 28,614.03 26,242.38 21,054.59
sales*365
Creditors’
100 150 60 80 60
days

Creditor’s
Year
days
2021-2022 100
2020-2021 150
2019-2020 60
2018-2019 80
2017-2018 60

47
 Creditor’s days
160 150

140
120
100
100
80
80
60 60
60
40
20
0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation:
In the years 2021–2022, this company's creditors' days repayment time was 100 days; however,
in the years 2020–2021, it was increased to 150 days. There are 60 days in the years 2019–
2020, 80 days in the years 2018–2019, and 60 days in the years 2017–2018.

8)Debtors’ days

Formula:

= Average debtors / credit sales * 365

Year 20200 2021 2020 2019 2018

Average
1,649.67 1,660.20 1,600.09 1,138.94 594.09
debtors
Credit
17,267.22 28,614.03 25,965.78 19,741.58
sales*365 15,301.45
Debtors’
60 40 20 15 11
days

48
 Year Debtor's days

2021-2022 60
2020-2021 40
2019-2020 20
2018-2019 15
2017-2018 11

Debtor's days
70
60
60

50
40
40

30
20
20 15
11
10

0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation
The debtor's payback duration for this firm is highest in year 2021-2022, when it is 60 days,
compared to the debtor's repayment term in 2020-2021, which is 40 days. In the years 2019-
2020, it takes 20 days for the company to get payment from debtors, 2018-2019, fifteen days,
and 2017-2018, eleven days.

49
 CHAPTER-5

SUMMAERY OF FINDINGS, RECOMMENDATIONS, AND CONCLUSION

FINDINGS

The corporation's right now ratio is in outstanding shape, although it declined by 0.77 among
2020 and 2021 and reached by 0.9 between 2021 and 2022, demonstrating the company is
expanding.

Dewdas Technologies PVT. Ltd's ratio of turnover of inventory varies during the course of the
five-year period that runs from between 2018 and 2022 It has been noted that the percentage of
the population will be 14.11 smaller in 2021-2022 than it was in 2021-2021.

✓ In the years 2021–2022, this company's creditors' days repayment time was 100 days; however,
in the years 2020–2021, it was increased to 150 days. There are 60 days in the years 2019–
2020, 80 days in the years 2018–2019, and 60 days in the years 2017–2018.

In comparison to the debtor's repayment term in 2020–2021, which is 40 days, the debtor's
payback length for this business is at its highest point in 2021–2022, when it is 60 days. Getting
payment from borrowers takes the business 20 days in 2019–2020, 15 days in 2018–2019, and
a total of eleven days in 2017–2018.

✓ The company's debt-to-equity ratio climbed by 28.18 in 2021-2022, declined by 23.84 in 2020-
2021, and fluctuated in each of the three previous years (2019-2020, 2018-2019, and 2017-
2018) by 29.63, 30.13, and 22.56, respectively.

Accounts payable turnover rate of the has decreased in the years 2021–2022, proportion is 0.09
contrasting to the prior year 2020–2021, ratio is 0.23 again its decreased in the years 2019–
2020 value is 0.15 so it is apparent that in the years 2018–2019, 2017–2018 appreciate
correspondingly 0.16,0.16 the ratio diminished.

50
 SUGGESTIONS

• Propose that the credit period be extended to 120 days through cooperative negotiations with
the creditors.
• Urgent (within 15 days) client payment is advised.
• It is advised to establish an efficient JIT and Kanban system for maintaining material
inventories.
• Propose assessing current stock levels at the dealer point and sales yard in light of incoming
cash improvement.
• Recommendations for improving the efficiency of work-in-progress inventory analysis and
order completion times
• Daily SAP-driven MIS on work capital status and trigger mechanisms are also recommended
to concerned stakeholders in the operational cycle in order to increase cash availability.
• The Finance team held a review meeting with all stakeholders to discuss and advocate for the
removal of cash blockages.
• Proposed to keep stock levels as low as conceivable while as yet fulfilling client need. This can
diminish the sum cash restricted in stock.
• It is recommended to regularly monitor cash flow in order to spot potential deficits and make
any necessary adjustments to operations.
• Go with the choices that focus on productivity over income development, like lessening cost,
further developing edges and increment effectiveness.
• Implement inventory management software, accounts payable automation, and a cash flow
forecasting tool like JIT to help automate and streamline the working capital management
process.
• Prescribed to urge clients to take care of their bill on time by offering limits for early instalment,
conveying customary remnants, and circling back to past due accounts.
• Guidelines for inventory management, accounts receivable and payable management, and cash
management should be developed as working capital policies and procedures.

51
 CONCLUSION

The initiative group of the organization's functioning capital essentially affects the company's
monetary status. Cash management, receivables management, and inventory management are
the three parts of working capital management. If the finance manager correctly manages these
three working capital management elements, the priority will experience a significant increase
in overall business performance. literature, working capital management affects the
organization's profitability and liquidity. In this organization, in particular, current assets
exceed current liabilities. As a result, funds flow into the company are very effective, but the
excess amount spent in working capital is a sign of poor financial management inside the
organization.

The practice of managing a company's assets & liabilities to make sure it has adequate liquidity
to satisfy its short-term obligations is called as WCM. Optimizing the business operating funds
situation, which the goal of the handling of working capital is to minimize the difference
between the present value of a business's assets and its present debts.

Compelling working capital administration includes dealing with an organization's ongoing

resource and liabilities guarantee it has sufficient income to meets its transient commitments
and asset its tasks.

This is significant in light of the fact that an organization with an unfortunate working capital
administration might battle to cover its bills on time or may need to assume obligation to meet
its commitments, which can prompt monetary troubles. A business can improve its overall
competitiveness, profitability, and risk of financial distress by optimizing its working capital
cycle. This business must be able to effectively manage its inventory, accounts receivable, and
accounts payable for the purpose to accomplish its objectives. A trustworthy financial reporting
system that provides accurate, up-to-date information on the organization's cash flow is also
essential.

52
 Dewdas technology pvt ltd annual report

Books:

Accounts for managers- -Dr Shaheeda Banu S and Suresh

WEBILOGRAPHY:

https://en.wikipedia.org/wiki/

https://www.moneycontrol.com
https://www.investopedia.com
https://corporatefinanceinstitute.com

53
 Annexure

PROFIT STATEMENT

B/L sheet Mar-22 Mar-21 Mar-20 Mar-19 Mar-18

DEWDAS
TECHNOLOGY PVT
LTD (in Rs.Cr.)
EQUTIES and
LIABLITIES
SHARE-HOLDER'S
FUND
Equity share-capital 293.55 293.55 293.55 292.71 284.59
TOTAL SHARE-
293.55 293.55 293.55 292.71 284.59
CAPITAL
Reserve and surplus 6,683.65 6,947.25 8,031.75 6,952.83 5,841.48
TOTAL RESERVE AND
6,683.65 6,947.25 8,031.75 6,952.83 5,841.48
SURPLUS
TOTALSHAREOLDERS
6,977.20 7,263.99 8,332.43 7,245.54 6,126.07
FUND
NON-CURRENT
LIABILITIES
Long-Term Borrowings 2,558.01 1,353.86 298.4 512.55 1,146.32
Deferred Tax liabilities 384.29 264.82 249.73 298.58 126.9
Other Long-Term
67 327.32 305.25 205.18 86.48
Liabilities
Long-Term Provisions 189.57 180.69 249.63 255.04 132.55
TOTAL NON-
CURRENT 3,198.87 2,126.69 1,103.01 1,271.35 1,492.26
LIABILITIES
CURRENT
LIABILITIES

54
Short-Term Borrowings 1,158.24 1,710.97 100 100 198.64
Trade Payables 5,164.69 2,623.91 5,018.93 4,887.90 3,116.99
Other current liablities 1,485.95 2,039.20 2,867.26 3,023.11 2,587.81
Short -Term Provisions 464.96 624.85 802.77 808.49 518.31
TOTAL CURENT
8,273.84 6,998.93 8,788.96 8,819.50 6,421.75
LIABILITIES
TOTAL CAPITAL AND
18,449.91 16,389.61 18,224.40 17,336.39 14,040.07
LIBALITES
ASSETS
NON-CURRENT
ASSET
Intangible Assets 1,451.19 1,360.45 808.53 736.54 314.71
Capital Work-In-Progress 228.78 420.97 274.64 234.33 157.6
FIXED ASSETS 7,422.24 7,397.71 6,272.13 5,970.61 5,176.67
Non-Current Investments 3,068.72 2,719.63 2,636.50 2,451.51 2,001.68
Long-Term loans and
20.5 32.42 31.71 33.54 45.57
Advances

Other Non-current assets 486.92 816.36 1,097.72 817.26 716.02

TOTAL NON-
10,998.38 10,966.12 10,038.06 9,272.92 7,939.95
CURRENT ASSETS
Current Investments 0 0 0 3,155.16 877.17
Inventories 2,142.29 1,238.00 2,684.67 1,758.33 2,631.03
Trade Receivables 2,816.00 1,179.82 2,505.53 944.78 1,064.39
Cash &Cash Equivalents 822.95 1,322.47 1,373.59 1,042.16 911.97
Other current asset 1,649.67 1,660.20 1,600.09 1,138.94 594.09
TOTAL CRRENT
7,451.53 5,423.49 8,186.34 8,063.47 5,977.12
ASSET
TOTAL ASSETS 18,449.91 16,389.61 18,224.40 17,336.39 14,040.07

55
GAINS AND LOSSES

PROFIT&LOSS
ACCOUNTS OF
DEWDAS
Mar-22 Mar-21 Mar-20 Mar-19 Mar-18
TECHNOLOGY
LTD (in Rs Cr)
Income
Surplus from
15,301.45 17,267.22 28,614.03 26,242.38 21,054.59
activities (gross)
Less:
0 0 0 276.6 1,313.01
excise/service
Tax other levies
Gain from
15,301.45 17,267.22 28,614.03 25,965.78 19,741.58
logistics (net)
functioning
15,301.45 17,467.47 29,054.95 26,356.40 20,140.13
sales total
Other income 119.5 123.34 109.94 196.58 136.27
Total revenue 15,420.95 17,590.81 29,164.89 26,552.98 20,276.40
Expenses
price of the
11,118.96 10,384.46 20,872.27 16,496.62 13,148.80
supplies
Acquiring of
746.66 793.22 766.1 659.36 1,583.39
stock-in trade
Increases in the
FG WIP and
-462.31 1,191.47 -958.8 1,275.10 -758.8
stock-in-trade
inventories
Compensation
1,583.89 1,615.06 2,098.77 1,837.78 1,480.05
costs for staffs
Finance costs 306.79 109.45 70.38 147.28 155.38
Other expenses 1,779.11 2,309.61 3,140.87 3,124.02 2,484.16
Total expenses 15,820.81 17,073.07 26,610.60 24,138.64 18,610.87
Items and tax
Exceptional
-12.05 -155.82 -57.49 -28.51 -335.45
items

56
 P&L befor tax -411.91 361.92 2,496.80 2,385.83 1,330.09
Current tax 0.02 71.74 378.2 677.25 313.72
Entitlement
Deferred tax -98.25 50.66 135.4 -9.15 -206.71
Total tax
-98.23 122.4 513.6 668.1 107.01
expenses
Profit or loss
-313.68 239.52 1,983.20 1,717.73 1,223.08
from continuing

RATIOS:

Financial ratiosof Mar-22 Mar-21 Mar-20 Mar-19 Mar-18

DEWDAS
TECHNOLOGY PVT
LTD (in Rs Cr)
Share ratios
EPS in Rs -1.07 0.82 6.76 5.87 4.24
Diluted EPS in Rs -1.07 0.82 6.76 5.85 4.24
Cash EPS in Rs 1.48 3.1 8.87 7.91 6.12
Book Value (Exclusive 23.77 24.75 28.39 24.75 21.53
Revel Reserve /Share
in Rs
Book Value [Inclusive 23.77 24.75 28.39 24.75 21.53
Revel Reserve]/Share
Rs
Dividend /Share (Rs.) 0.6 0.5 3.1 2.43 1.56
Revenue from 52.13 59.5 98.98 90.04 70.77
Operations/Share (Rs.)
PBDIT/Share (Rs.) 2.23 4.42 11.06 10.8 8.22
PBIT/Share (Rs.) -0.32 2.14 8.94 8.75 6.4
PBT/Share (Rs.) -1.4 1.23 8.51 8.15 4.67
Net profit share in Rs -1.07 0.82 6.76 5.87 4.3
PROFITABLITY
RATIO
PBDIT margin % 4.27 7.42 11.17 11.98 11.61

57
PBIT margin % -0.6 3.59 9.03 9.71 9.04
PBT margin % -2.69 2.07 8.59 9.05 6.6
Net profit margin % -2.05 1.37 6.82 6.51 6.07
Return on net worth % -4.49 3.29 23.8 23.7 19.96
Return on capital -0.91 6.67 27.81 30.07 16.05
Employed %
Return on Assets % -1.7 1.46 10.88 9.9 8.71
Total Debt/Equity (X) 0.53 0.42 0.05 0.08 0.22
Asset Turnover ratio% 0.88 106.57 159.42 152.02 143.44
RATIOS OF
LIQUIDITY
Present ratio 0.9 0.77 0.93 0.91 0.93
Quick ratio 0.64 0.6 0.63 0.71 0.52
Inventory Turnover 6.58 14.11 10.82 14.99 7.65
Ratio
Dividend pay-out ratio 0 530.32 43.35 31.98 26.6
NP
Dividend pay-out ratio 0 139.69 33.01 23.72 18.69
CP
Earnings Retention 0 -430.32 56.65 68.02 73.4
ratio %
Cash earning retention 0 -39.69 66.99 76.28 81.31
ratio %
VALUATION RATIO
Enterprise value in Cr 36,196.55 14,379.69 25,825.93 42,101.15 24,494.90
Net operating Revenue 2.37 0.82 0.89 1.6 1.22
EV/EBITDA (X) 55.29 11.09 7.96 13.32 10.47
Net operating 2.18 0.72 0.92 1.61 1.19
revenue/Market cap
Retention ratios % 0 -430.32 56.64 68.01 73.39
BV/Price 4.77 1.74 3.22 5.87 3.93
Net operating/Revenue 2.18 0.72 0.92 1.61 1.19
Earnings Yield -0.01 0.02 0.07 0.04 0.05

58
STATEMENT of CASHFLOW

CASH FLOW OF Mar-22 Mar-21 Mar-20 Mar-19 Mar-18

DEWDAS
TECHNOLOGY
PVT LTD (in Rs Cr)
Net income or loss
before unusual -313.68 239.52 1,983.20 1,717.73 1,223.08
expenditures and taxes
From operating
operations, net funds 21.13 941.06 -362.35 5,643.37 2,154.77
flow
Net cash used for -
-975.19 2,311.49 -3,429.22 -1,476.82
investment objectives 2,177.45
Utilized net cash for -
205.97 1,148.98 -2,090.93 -1,371.85
activities of financing 1,616.16
Foreign Exchange
-0.82 1.47 0.53 0.17 -1.4
gain/loss
cash equivalents start
1,279.04 1,364.98 1,031.47 908.08 1,562.73
era
Cash equivalents last
530.13 1,279.04 1,364.98 1,031.47 868.61
era

59