A study on STUDY ON WORKING CAPITAL

MANAGEMENT at

FITWEL TOOLS & FORGOINGS PVT LTD

NAME :
Register Number:

AKSHAY
1408007331

Sikkim Manipal University

Distance Education
2015-16

FITWEL TOOLS & FORGOINGS PVT LTD

ESTABLISHMENT OF FITWEL & NATURE OF WORK CARRIED ON
Established in the year 1987
Managing director: D.R.subramanya, B.Sc, B.E.Mechanical
Located about 70kms(45miles) from Bangalore
ISO/TS 16949: 2002 certified company

TPM being practiced

Worked as an ancillary to M/s KSSIDC for about 3 years to manufacture
forged hand tools.
Company became independent in the year 1990

FITWEL TOOLS & FORGOINGS PVT LTD

All forging related heat treatment operations are
carried out in-house and is monitored and
controlled by a well-equipped metallurgical lab.
Forging Die and Tool Design / manufacturing is
carried out in-house by our fully equipped design
dept. and tool room, thus ensuring direct control
over the quality of all the products.

Value addition through value engineering and

customer satisfaction is at the core of our
business and focus.

STATEMENT OFTHE PROBLEM

WORKING CAPITAL MANAGEMENT
To analyze and evaluate financial position of Fitwel tools
and Forgings Pvt. Ltd., with specific regards to working
capital and related ratios.

Objectives of the study

To know the existing system of working capital management
in Fitwel
To know the technique and objectives of cash management
To analyze the changes in working capital
To study the liquidity position of Fitwel
To study the management of inventory in Fitwel
To study above the future trend of working capital
management

DATA COLLECTION METHOD

Data Collection Methods
Primary data
Primary data means the primary information collected for a specific
purpose and gives accurate data relevant information and it is
generated in an investigation according to the needs of the
problem.
Primary data collected from interviewing and interacting with
concerned official from various departments of Fitwel Tools and
Forgings Pvt. Ltd.
Secondary data
Secondary data can be defined as data collected by secondary
source for purpose other than solving problem being investigation
and are previously mean for another purpose.
Secondary data is collected through company journals , books,
company website, and from the audited reports of the company.

DATA COLLECTION METHOD

Tools :
Three years balance sheet and profit & loss
account stated in the annual reports were
used for analysis.
Working capital and concerned ratios were used
as a tool of analysis, based upon this
performance was evaluated and suggestions
were made

FINDINGS
The current ratio of FITWEL in the year 2014-2015 is able to meet the
standard norm or ratio of 2:1 which is often referred to as bankers rule of
thumb
The company has been able to maintain its quick ratio above of the
standard ratio i.e, 1:1
Absolute ratio of the company quite satisfactory .
The companys working capital turnover ratio gradually decreasing from
last three years. In the year 2014-2015 the ratio is quite increase ie. 3.24
Current assets turnover ratio is slight changed in the last three years. It
shows efficient management of the current assets .
By the Fixed asset turnover ratio it has been increased up to 2.81 in the
analysis of three years, so it can be said as efficient in maintaining fixed
assets.
The current asset to Fixed asset Ratio has been increased in the all
succeeding years from 2012-13 and this increase in profit ratio shows the
expansion or growth of Fitwel.

SUGGESTIONS 01

Keeping this view, the following recommendations are put

forth after a detailed study was made.

The current ratio of the company is showing increasing trend and it

has to increase further to repay the short term obligations quickly.
The quick ratio of the company is standard and it has to maintain the
same in future to repay the liabilities immediately.

The cash ratio of the company is not standard so it has to maintain

the standard cash ratio

The inventory turnover ratio of the company is showing decreasing

trend so the company has to manage its inventory efficiently.

We can suggest that the company should increase its cash position
percentage to the required percentage of 10 % to 15 %
The company is able to collect from the debtors as possible over the
period and it has to increase further.

CONCLUSION
The study of the working capital management in
FITWEL TOOLS &FORGIVING PVT LTD was done to
know the working capital status.
Being an export oriented unit it is able manage its
inventory 7 working capital successfully.
Now the company is utilizing SAP system to ensure
accuracy in its dealings.
All the employees were found to be very co-operative
for the smooth running of the production operations.
The company in its quest for excellence seeks new
frontiers delivering best of breed products that meet
global quality standards & adopts innovative
techniques to further improve customer service.

CONCLUSION
Finally to conclude, I would like to submit that while
pursuing this research, I learnt that it is very
important to learn the background/genesis of the
topic/subject/issues first, so as to understand the
requirement/problem at hand and then consider
its present status and future prospects so as to
arrive at a suggested set of
solutions/recommendations/suggestions so vital
to the purpose of such studies.