Introduction This project is on the study of working capital management in Emirates Telecommunications Corporation (Etisalat).

The project will encompass all about Etisalat and its working capital, what it aims to achieve, what is its purpose and scope, the various methods used for collecting data and their sources, including literature survey done, the limitations of the study and the inferences from the study.

Working Capital Working capital is defined as current assets minus current liabilities.

A positive WC (Working Capital) means that the company is able to support its day-to-day operations serving both maturing short-term debt and upcoming operational expenses. Funds which are needed for short term purpose for the day-to-day expenses are known as working capital. It may be regarded as life blood of a business. Working capital is also known as circulating capital or current capital or revolving capital.

A study of working capital is of major importance to internal and external analysis because of its close relationship with the day-to-day operation of a business.

Overview of the Industry Telecom Industry Telecommunication has become very important for the economic development of both companies and countries around the world. The telecommunications industry is responsible for radio, television, voice communications, and broadband services. The growth and innovation of the telecom industry has enabled people to communicate across the globe and access endless amounts of information over the internet. Broadband services are becoming faster and easier to access with fiber optic networks and wireless services like Wi-Max and CDMA. Many of the major telecom companies have merged over the last 10 years in order to offer massive product and service portfolios, as well as further capitalize on bundled media packages ('triple play"). These new technologies and growth through mergers are enabling these companies to find new revenue sources and growth opportunities in a mostly mature market.

Telecom Industry in UAE UAE has one of the most developed telecom market and technologically advanced telecom infrastructure in the Gulf with fixed, mobile and Internet penetration rates of 30.4%, 166.4% and 49.5% respectively in 2007. The country is ranked first in the Arab World and 29th overall in Networked Readiness Index (NRI), according to the Global Information Technology Report produced by the World Economic Forum.

Future Prospects of the Industry There will be tremendous growth in Mobile and broadband services in the years to come. The shift from fixed line to mobile will continue as the level of services offered to mobile subscribers grows in diversity and sophistication. With growing broadband subscriber base it is anticipated that the provision of data and multimedia services will be an important revenue growth driver. The increased level of business start-ups and strength of economy in UAE is making high speed data provision a necessity for further sustained economic growth.

Overview of the Company Etisalat

Emirates Telecommunications Corporation, branded trade name Etisalat is a UAE based telecommunications services provider, currently operating in 18 countries across Asia, the Middle East and Africa. As of February 2011, Etisalat is the 16th largest Mobile network operator in the world, with a total customer base of more than 135 million. It is the secondlargest Arab phone company and in the UAE alone the operators mobile subscriber base grew 14 percent in 2008 to 7.3 million Emirates Telecommunication Corporation Etisalat was founded in 1976 as a joint-stock company between International Aeradio Limited, a British Company, and local partners. In 1983 the ownership structure changed United Arab Emirates government held a 60% share in the company and the remaining 40% were publicly traded. It was formed to consolidate the independent telecoms networks of the seven emirates; Etisalat was the first telecom operator to introduce mobile phone service (in 1982) and GSM technology (in 1994). The company remained the sole provider of telecoms services in the UAE until competitor du was created in late 2005 in accordance with the regional liberalization of the telecoms sector In 1991 the UAE central government issued Federal Law No. 1, which gave the corporation the right to provide the telecommunications wired and wireless services in the country and between UAE and other countries. It also gave the firm the right to issue licenses for owning, importing, manufacturing, using or operating telecommunication equipment. This practically gave Etisalat both regulatory and control powers, which completed the monopoly of the telecom giant in the UAE. In order to safeguard the country's economic development, the law made provisions for the development of the telecommunication sector in the country. An important milestone was Etisalat's commencement of international operations in January 2001, when under the brand name of Ufone it started operating out of Islamabad. Etisalat International Investments is the business unit of Etisalat that operates outside the UAE and manages the corporation's stakes in telecommunications carriers in Afghanistan, Benin, Burkina

Faso, the Central African Republic, Gabon, India, Indonesia, Iran, the Ivory Coast, Egypt, Niger, Nigeria, Saudi Arabia, Sudan, Tanzania, Togo, Sri Lanka and Pakistan.

Problem Identification and Problem Formulation

The Project helps in indentifying the problem of analyzing the working capital management of Etisalat and to find out the ratio analysis of company

Working Capital is the lifeblood of business. There is a need of working capital in companies to deal with the problem arising out of the lack of immediate realization of cash against goods sold. Therefore maintaining adequate working capital is necessary for the smooth running of business. This is referred as the operating or cash cycle.

Objective & Scope of Study The main objective is to find if the working capital of Etisalat is rewarding or not. The project aims at understanding the Working Capital of Etisalat and to suggest solutions to shortfalls if any in the company or industry.

Objectives of the study 1. 2. 3. 4. To study the optimum level of current assets and current liabilities of Etisalat. To study the liquidity position through various working capital related ratios To estimate the operating cash cycle and working capital requirement of Etisalat. To find out the effects of different components of working capital management on Profitability 5. To establish a relationship between the two objectives of liquidity and profitability of the firm. 6. 7. To study the liquidity position through various working capital related ratios. To study the working capital components such as receivables accounts, cash management, Inventory position 8. To study the relationship between working capital and capital employed.

Data Collection Method The data for the study are collected from primary and secondary sources and the project will be based on both primary data and secondary data.

Primary Data The first hand information collected directly from their original sources through various methods is known as Primary data. Observation, interviewing, mail survey, experimentation, simulation and projective technique are the methods of primary data collection.

Secondary Data The data which have been already collected and compiled for another purpose is called Secondary data. Secondary data is data collected by someone other than the user. Census report, annual reports and financial statements of companies are some examples of secondary data.

Research Tools Applied Research methodology is a systematic and logical study of an issue or problem through scientific method. Its the process of systematically obtaining accurate answers to significant pertinent questions by the use of scientific method gathering and interpreting information.

Data such as Current assets, liabilities, debtors, creditors, cash balance, inventories etc are collected in the form of samples which is the first step in the scientific research. Further, data is analyzed through various statistical tools to effectively solve the problems in the area of working capital management

Conclusions Working Capital is the lifeline of every industry, irrespective of whether its a manufacturing industry or service industry. Working Capital is the prime and most important requirement for carrying out the day to day operations of the business.

The project undertaken is vital in a number of ways This project will be a learning device as it helps in studying the various methods of working capital management. The project would also be an effective tool for credit policies of the company and also helps it in planning and financing working capital. The project will show the different methods of holding inventory and dealing with cash and receivables.

Any reduction in operation cost as a result of effective and efficient management of finance would improve the profitability, liquidity and solvency of the organization and the project helps in achieving the same.

Limitations of the Study It is limited to the performance of a few years of the company. It is conducted within a short period and therefore all the factors and details regarding the subject of study cannot be covered. It does not take into account the price level changes. It does not involve comparisons with other companies.