BANGALORE

UNIVERSITY

A STUDY ON WORKING CAPITAL

MANAGEMENT
AT

A PROJECT PROPOSAL SUBMITTED TO BANGALORE UNIVERSITY FOR

THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

CHANDRASHEKAR .A.C.
(Reg. No: 09QZCMA020)
UNDER THE GUIDANCE OF
Ms.SHWETHA.N.S
(Assistant Professor)
Bangalore Institute of Management Studies

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

Approved by AICTE, Affiliated to Bangalore University, Recognized by Govt. of Karnataka

No. 35, Opp. R. V. Engineering College, Mysore Road, Bangalore 560059, India
2009-11

STUDENTS DECLARATION
I hereby declare that the dissertation titled A study on
Working Capital Management at Karnataka Co-operative Milk
Federation Ltd., Bangalore Submitted by me to the Department of
Management, Bangalore University in Partial fulfillment of
requirements of MBA Programme is a bonafide work carried by me
under the guidance of Assistant Professor Ms.Shwetha. This has
not been submitted earlier to any other university or Institution for
the award of any degree diploma / certificate or published any time
before.

DATE:
PLACE: BANGALORE

CHANDRASHEKAR.A.C
Reg. No. - 09QZCMA020

CERTIFICATE OF FACULTY GUIDE

This is to certify that Chandrashekar.A.C. Reg. No. 09QZCMA020

has successfully completed his research work and has submitted the report
under the guidance and supervision towards the partial fulfillment of the
requirements of MBA course of Bangalore University, Bangalore.

Date:

Ms Shwetha.N.S (Professor)

Place: Bangalore
Sign. Of Faculty Guide

ACKNOWLEDGMENT

It gives me a great pleasure to have the privilege of expressing my

indebtedness and gratitude to thank Almighty God for giving me the strength
and wisdom to complete the project successfully.
This study will be incomplete without acknowledging my sincere
gratitude to Dr. S. Radha, Director, Bangalore Institute of Management
Studies, for providing me the opportunity to conduct this project.
I am grateful to my project Internal Guide, Ms.Shwetha.N.S , for his
support, assistance throughout the project work.
My sincere thanks to the External Guide Mr.Lokesh for dedicating his
time, constant support, assistance throughout the project work. And, I would
also thank all the other staff KMF Ltd, for their co-operation and guidance
during the project work.

Place: Bangalore

CHANDRASHEKAR.A.C

Date:

Reg. No- 09QZCMA020

EXECUTIVE SUMMARY

Karnataka Milk Federation which is most popular as KMF, evolved itself as a

premier and most profitable dairy farmers' organization in the State of Karnataka. As an
agency in 1975 to implement the World Bank Aided Dairy Development Projects,
Karnataka Dairy Development Corporation (KDDC) was formed, the company grew
itself fast and as it spreads the wings of new found rural economic activity - Dairying all
over the State, the genesis of apex cooperative body took the shape of KMF in 1983
encompassing entire State with 13 District Co-operative Milk Unions executing the
various parameters of Dairy activity - organization of Dairy Co-operatives, Milk Routes,
Veterinary Services, Procurement of milk in two shifts of the day, Chilling, Processing of
milk, distribution of milk and also establishment of Cattle Feed Plants, Nandini Sperm
Station, Liquid Nitrogen Supply, Training Centres - as its main stay.
The study covers the concepts of working capital management and their
components. The primary objective of any business is to maximize the value of the
Federation and maximize the wealth of the share holders .The dissertation titled A study
on working capital management with special reference to KMF Ltd. Bangalore.
Accordingly a research deign was prepared. Relevant primary and secondary data
were obtained. Primary data were collected through personnel talk with finance manager
of the federation and secondary data were obtained through companys websites and
annual report of five years i.e., 2007-09. Ratio Analysis is the analytical tool used for the
study.
Analysis and interpretation gives information about, how much the company
earns profits, how the company manages with available funds, to know how it maintain
funds through reserves and surpluses, to know the maintaining of cash and bank balance
and how they manage inventories whether the company earn profits for a longer period of
time which helps the company to be provided in the best possible way in order to improve
their performance and for their future expansion or diversification of the company and
sustain for longer period.

Table of Contents

SL. NO.
1

CHAPTERS
Introduction

PAGE
NO.
1 13

Introduction about study

Need for working capital

Objective of working capital

Classification of working capital

Advantages of adequate working capital

Disadvantages of inadequate working capital

Factors determining the working capital

Principle of working capital

13

Research Design

14 16

Title of the study

14

Statement of the problem

14

Need for study

14

Objective of the study

14

Scope of the study

15

Research methodology

15

Data analysis

16

Limitations of the study

16

Profile of the company

17 36

Industry review

17

Company Review

18

Data Analysis and Interpretation

37 63

Summary of Findings, Recommendations & Conclusion

64 67

Findings

64

Suggestions

66

Conclusions

67

Bibliography

68

Annexure

69 73

LIST OF TABLES

Sl. No.

Table Description

Page No.

Constitutes of Current Assets...

2
3

Constitutes of Current Liabilities.

Showing KMF Officers

5
6
20

Showing Growth Process of company.

22

Showing Milks composition.

28

Showing Class & type of milk

30

Showing contents of milk.

34

Showing Structure of gross working capital.

39

Showing Net working capital.

41

10

Showing Current ratio

43

11

Showing Working capital turnover ratio

45

12

Showing Cash ratio.

47

13

Showing Trend analysis..

49

14

Showing Quick ratio...

51

15

Showing Current asset to total asset...

53

16

Showing Current liability to total liability.

55

17

Showing Current assets to Fixed assets...

57

18

Showing Inventory turnover ratio

60

19

Showing Net profit to net sales..

62

LIST OF CHARTS

Sl. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Chart Description
Classification of Kinds of Working Capital
Factors Determining Working Capital
Principles of Working Capital Management
Organization structure of KMF Ltd ...
Showing Structure of gross working capital.
Showing Net working capital.
Showing Current ratio
Showing Working capital turnover ratio
Showing Cash ratio.
Showing Trend analysis..
Showing Quick ratio...
Showing Current asset to total asset...
Showing Current liability to total liability.
Showing Current assets to Fixed assets...
Showing Inventory turnover ratio
Showing Net profit to net sales..

Page No.
3
9
12
19
40
42
44
46
48
50
52
54
56
59
61
63