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1.2STATEMENT OF PROBLEM In the management of working capital, the firm is faced with two key problems: 1. First, given the level of sales and the relevant cost considerations, what are the optimal amounts of cash, accounts receivable and inventories that a firm should choose to maintain? 2. Second, given these optimal amounts, what is the most economical way to finance these working capital investments? To produce the best possible results, firms should keep no unproductive assets and should finance with the cheapest available sources of funds. Why? In general, it is quite advantageous for the firm to invest in short term assets and to finance shortterm liabilities. Besides this followings are some other problem, a firm is facing. Through this study we try to find answer for these problems. 1. What are root causes of working capital on business? 2. What are the major effects on accounts receivable? 3. What is the nature of relationship between working capital and capital employed 4. What steps should be taken to ensure that it effect on the profit of the firm will not be negative? 5. How can working capital be managed?6.What make up the working capital cycle?7.How can debtors be controlled? 1.3NEED AND IMPORTANCE OF THE STUDY . 1.This projects is helpful in knowing the companies position of funds maintenance and setting the standards for working capital inventory levels, current ratio level, quick ratio, current asset turnover level & size of current liability etc. 2. This project is helpful to the managements for expanding the dualism & the project viability & present availability of funds. 3. This project is also useful as it combines the present year data with the previous year data and there by it show the trend analysis, i.e. increasing fund or decreasing fund. 4. The project is done as a whole entirely. It will give overall view of the organization and it is useful in further expansion decision to be taken by management.

1.4 OBJECTIVES OF THE STUDY

The main objective of the study is to determine the effect of working capital on business profitability which has to do with:-

1. Maintenance of working capital at appropriate level, and

2. Availability of ample funds as and when they are needed

To accomplishment of these two objectives, the management has considered the composition of current assets pool. The working capital position sets the various policies in the business with respect to general operations like purchasing, financing, expansion and dividend etc,

The subsidiary Objective of Working Capital Management is to provide adequate support for the smooth functioning of the normal business operations of a company. This Objective can be subdivided into 2 parts:-

1. Liquidity

2. Profitability

1) Liquidity

The quantum of Investment in Current Assets has to be made in a manner that it not only meets the needs of the forecasted sales but also provides a built in cushion in the form of safety stocks to meet unforeseen contingencies arising out of factors such as delays in arrival of Raw Material, sudden spurts in demand etc. Consequently, the investment in current assets for a given level of forecasted sales will be higher if the management follows a conservative attitude than when it

follows an aggressive attitude. Thus, a company following a conservative approach is subject to a lower degree of risk than the one following an aggressive approach. Further, in the former situation the high amount of Investment in Current Assets imparts greater liquidity to the company than under the latter situation wherein the quantum of investment in Current Asset is less. This aspect exclusively covers the liquidity dimension of Working Capital.

2) Profitability Once we recognize the fact that the total amount of financial resources at the disposal of a company is limited and these can be put to alternative uses, the larger the amount of investment in current assets, the smaller will be the amount available for investment in other profitable avenues at hand with the company. A conservative approach in respect of Investment in Current Assets leaves fewer amounts for other Investments than an aggressive approach does.

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2. OBJECTIVES OF THE STUDY

Study of the working capital management is important because unless the Working capital is managed effectively, monitored efficiently planed properly And reviewed periodically at regular intervals to remove bottlenecks if any the Company can not earn profits and increase its turnover. With this primary Objective of the study, the following further objectives are framed for a depth Analysis.

1. To study the working capital management of Jain Irrigation Systems Ltd.

2. To study the optimum level of current assets and current liabilities of the

company..

3. To study the liquidity position through various working capital related ratios.

4. To study the working capital components such as receivables accounts, cash management, Inventory position 5. To study the way and means of working capital finance of the Jain Irrigation System Ltd. 6. To estimate the working capital requirement of Jain Irrigation System Ltd 7. To study the operating and cash cycle of the company.

2.4) SCOPE & LIMITATIONS OF THE STUDY

Scope of the study
The scope of the study is identified after and during the study is conducted. The study of working capital is based on tools like trend Analysis, Ratio Analysis, working capital leverage, operating cycle etc. Further the study is based on last 5 years Annual Reports of Jain Irrigation Systems Ltd. And even factors like Competitors analysis, industry analysis were not considered while preparing This project.

Limitations of the study

Following limitations were encountered while preparing this project:

1) Limited data:This project has completed with annual reports; it just constitutes one part of data collection i.e. secondary. There were limitations for primary data collection because of confidentiality. 2) Limited period:This project is based on five year annual reports. Conclusions and

recommendations are based on such limited data. The trend of last five year may or may not reflect the real working capital position of the company 3) Limited area:Also it was difficult to collect the data regarding the competitors and their financial information. Industry figures were also difficult to get

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Objective of the Study:
Study of the working capital management is important because unless the working capital is managed effectively, monitored efficiently planed properly and reviewed periodically at regular intervals to remove bottlenecks if any the company cannot earn profits and increase its turnover. With this primary objective of the study, the following further objectives are framed for a depth analysis 1. To study the working capital management of ARSS Infrastructure Projects Limited; 2. To study the optimum level of current assets and current liabilities of the company; 3. To study the liquidity position through various working capital related ratios; 4. To study the working capital components such as receivables accounts, cash management, Inventory position; 5. To study the way and means of working capital finance of the ARSS Infrastructure Projects Limited;

6. To estimate the working capital requirement of ARSS Infrastructure Projects Limited; 7. To study the operating and cash cycle of the company;

Scope of the Study: The scope of the study is identified after and during the study of the project. The study of the working capital is totally based on the trend analysis ratio analysis working capital leveraged. and 5years annual reports of the company while other things like competitor analysis, Industry analysis are discussed in the part of company profile. Limitation of the Study: 1. Limited Data: This project has completed with annual reports of the company; it just constitutes one part of data collection i.e. secondary. There were limitations for primary data collection because of confidentiality. 2. Limited Period: This project is totally based on 6 years annual reports. Conclusion and recommendation are based on such limited data. The trend of last six years may or may not reflect the real working capital position of the company. 3. Limited Area: It was difficult to collect all the competitors and their financial information. Recent industry figures were also difficult to get. 4. Limited Competitors: In this project a few important competitors of the company are discussed, rests are left because of compatibility