40 Domestic Industry - The application has been filed by Indian Paper Manufacturers

Association (IPMA), on behalf of (1) ITC Limited (2) Ballarpur Industries Limited, (3)
JK Paper Limited, (4) M/s The Andhra Paper Mills Ltd, (5) M/s Tamil Nadu Newsprint
and Papers Limited , (6) Abhishek Industries Ltd., (7) Century Pulp & Paper, (8)
Emami Paper Mills Ltd., (9) Hindustan Paper Corporation Ltd. (10) Khanna Paper Mills
Ltd., (11) The Mysore Paper Mills Ltd. (12) Orient Paper & Industries Ltd., (13)
Pudumjee Pulp & Paper Mills Ltd., (14) Rama Newsprint and Papers Ltd., (15)
Seshasayee paper and paper Board Ltd. (16) The Sirpur Paper Mills Ltd., (17) Star
Paper Mills Ltd., (18) The west Coast Paper Mills Ltd. and (19) Yash Paper Mills Ltd
for imposition of Safeguard Duty on imports. The members of IPMA constitute more
than 80% of the total production in India and they have disclosed their information
through IPMA. Accordingly, the member of IPMA constitute domestic industry in
terms of clause (b) of subsection (6) of Section 8B of the Customs Tariff Act, 1975.
41 1. OVERALL REVIEW:
42 During the year under review, the profitability of the Company has increasedsatisfactorily as compared to the
previous year, mainly because of better performance ofthe Cement Divisions. The Paper Business was under
severe pressure due to a substantialincrease in the prices of raw materials and reduced demand. The production
at the newTextile Unit of the Company, "BirIa Century" in District Bharuch of Gujarat hasnow almost stabilized.
However, in the textile segment, which includes rayon yarn, thecordetc., the prices of all inputs had gone up
which could not be passed on to the end usersin view of adverse market conditions prevailing during the major
part of the year coupledwith low demand. Therefore, the performance of textile segment remained depressed.
43 The interest cost is likely to increase in future due to higher borrowings for thevarious expansion programmes
planned, which are under implementation, including theexpansion of cement manufacturing capacity at
Manikgarh Cement, Dist. Chandrapur,Maharashtra and at Sonar Bangia Cement at Sagardighi, Dist.
Murshidabad, West Bengal, asalso the multilayer packaging board and fibre line (pulp plant) at Century Pulp
&Paper, Lalkua in District Nainital, Uttarakhand and land development at Worli, Mumbai.There are indications
that interest rates are likely to harden still further.
44 India has been able to face the global economic downturn better than most othercountries in spite of the
inadequate and uneven monsoon and resultant slowdown inagriculture. Growth is expected to be better as there
are clear signs of an upturn in theeconomy and with the forecast of a normal monsoon in the current year, the
prospects forthe economy will be brighter. In this background, higher demand for cement may beexpected. The
prices of and demand for paper are likely to rule firm owing to the CentralGovernment's sustained thrust on
promoting education at all levels. Demand overseas isalso looking up and it is expected that the prices of textile
products may also improve.
45 2.1 BUSINESS SEGMENT - TEXTILES
46 COTTON TEXTILES, YARN AND DENIM:
47 a) Industry Structure & Development:
48 Though the global economy seems to be coming out of the crisis, recovery may beunsteady for a while. The
continuous improvement and investment in weaving and processingwill help to meet the demand of quality
textiles, which will give an edge to the Indiantextile industry over competitors. Upgrading technology and
infrastructure is an ongoingprocess and, with the added support of Government bodies it should boost the
Indiantextile further
49 b) Opportunities and Threats:
50 A stronger economy and brighter sentiment holds out optimism for the order flow as ageneral feeling of buoyancy
prevails. Export markets are also looking up especially in theUSA. However, the increase in prices of cotton is a
matter of concern. Further,competition from neighbouring countries including Vietnam and Bangladesh continue
tochallenge the industry.
51 c) Segmental Review and Analysis:
52 The production at our new textile mill named "BirIa Century" in DistrictBharuch (Gujarat), has almost stabilized,
reaching near optimum levels of production andefficiency. The unit manufactures high value cotton products
such as elite shirtings, aneye catching range of suitings, fancy & finer fabrics and dress materials, and a
widerange of bed linen with innovative finishes and attractive designs. Nevertheless, theperformance of this unit
remained under pressure due to the high cost of cotton and otherinputs. There was no improvement in the
market prices of fabrics to absorb the costincreases.
53 The brand "Cottons by Century" by which the Company's ready to wear productsare known is now one of the
well-known national brands in India for this segment.
54 The technical performance of yarn and denim Divisions of the Company has beensatisfactory although selling
prices were under pressure. The demand for yarn and denimfabric has recently started showing some
improvement and prices have also firmed up in thedomestic market. There are also prospects of similar
strengthening of international demandand consequently, also the prices.
55 d) Risks and Concerns:
56 The sharp increase in cotton prices and other input costs have made it very difficultfor Indian exporters to
compete in the international market. The strengthening of theRupee and non-availability of skilled workers are
also hurdles faced by the exportersincluding the Company.
57 e) Outlook:
58 We are trying to focus on cost cutting strategies, development of new markets andmaintaining the quality of our
fabrics to satisfy and exceed the expectations of themarket and look forward to a better market sentiment for
textile fabrics.
59 Century Rayon - Viscose Filament Yarn (VFY), Continuous Spun Yarn (CSY) and Rayon TheYarn.
60 a) Industry Structure and Development:
61 The demand for viscose filament yarn (VFY) and continuous spun yarn (CSY) remainedsteady during the year.
The domestic market is witnessing an influx of coarser denier yarnand embroidery yarn at lower rates from
China, affecting the market adversely. Since theseproducts are not covered by anti dumping duty, Industry is in
the process of preferring anapplication to the Government of India to control the inflow of these materials
andprovide a level playing field to domestic manufacturers.
62 In the recent Union budget, excise duty on rayon yarn has been increased from 8% to10%, which adversely
affects the selling price. The Industry feels that besides reductionin excise duty, the Government should also
take various steps to make credit cheaper andprovide other incentives/subsidy to VFY producers to help sustain
their operations.
63 The world over, due to stringent environment control, rayon manufacturing units areclosing their operations,
including one having so well-known a name as Enka Elsterberg,Germany. As a result, a substantial production
base of VFY is likely to be shifted toAsia, providing more opportunity to producers including the Company.
64 b) Opportunities and Threats:
65 The strengthening of the Rupee against the US Dollar and other currencies encouragescheaper imports coming
into India. Fiscal support to VFY producers in China continues tomake them more competitive, and this adds to
the threat of cheaper imports. Further,polyester yarn which is cheaper than VFY continues to be used as a
substitute for certainend products.
66 With the development of highways across India and dedicated corridors between metres,an opportunity may
materialize for use of the made out of rayon the yarn, in which case,the domestic scenario of the the yarn
industry should change for the better.
67 c) Segmental Review and Analysis:
68 Our products i.e. pot spun yarn, continuous spun yarn, rayon the yarn and variouschemical products are well
accepted in the market. Various Initiatives taken by the unitfor automation have led to better productivity and
improved quality of the products whichshould have a positive impact on the working of the unit.

69 Off take of rayon the yarn continues to remain under pressure as the demand for the inEurope and the U.S.A.
has not picked up causing major the manufacturing units all over theworld to operate at lower than their
respective installed capacities.SS
70 Newly developed zero twist rayon the yarn is well accepted in the market and export ofthis yarn is expected to
rise in due course.
71 High inventory of rayon the yarn continues to remain a major concern and 50% of theproduction capacity
remains suspended from February 2009. We do not expect the situationto improve before the end of the year
2010-11.
72 Continuous rise in the cost of major inputs and utilities, more particularly rayongrade pulp and sulphur, which
constitute a major portion of the cost, may erode the profitmargins of the unit.
73 Salt Works
74 Production and sale of refined salt have improved compared to the previous year. Weforesee better demand for
our refined salt in future.
75 d) Risks & Concerns:
 76 Availability of polyester yarn at a cheaper price and substantial import of VFY at alower price continue to pose
major hurdles to the further growth of the VFY industry. Thisunit is labour intensive and inflation in employee
costs also continues to pose a threat.
77 Stringent environmental control measures may add to our costs and create hindrances insmooth working as
rapid urbanization is taking place in and around the plant, due to whichlot of residential colonies are likely to
come up in the vicinity.
78 e) Outlook:

Product Page1

CPP’s range of products includes some of the finest varieties of writing and printing paper which
has carved a niche in the market.
CPP also manufacturers raw material for viscose filament yarn/staple fiber and also paper grade
pulp.
A. Writing and Printing Papers (45 to 210 gsm)

(Wood based)
 Azurelaid
 Maplitho White/NS
 Maplitho Deluxe CG
 SS Maplitho
 Dye line base
 Offset printing paper
 Maplitho NS (ARSR)
 Century Parchment
 Super Printing
 Century Bond
 Railway Bond
 Copier
 Continuous Stationery (HB)
 Base Paper for coating
 Plain Paper
 Opaline Base Paper
 Overlay tissue
 Century Maplitho
 NCR Base Paper
 MICR Cheque Paper
 Color Ptg Paper
 Century Excel Ptg
 Century Index Paper
 Broke cover MF – Sticker Base

(Bagasse Plant)

 Copier
 Super Maplitho white
 Super shine Printing
 Plain Paper / Writing Paper
 B. Rayon Grade Pulp

C. Bleached Hardwood Pulp (Paper Grade)

About us

Century Pulp and Paper(CPP) a division of Century Textile and

Industries Ltd (CTIL)(For full details about CTIL – please click here) is
manufacturer of Rayon Grade Pulp (RGP) and an exhaustive range of
excellent quality of Writing & Printing Paper. The unit successfully
achieved significant efficiencies in various disciplines within a short
span of time. Located at Lalkua (District Nainital, U.K.), CPP has
provided direct and indirect employment to the people of the
surrounding areas.

Century Pulp and Paper(CPP) a division of Century Textile and Industries Ltd (CTIL)(For full details
about CTIL – please click here) is manufacturer of Rayon Grade Pulp (RGP) and an exhaustive
range of excellent quality of Writing & Printing Paper. The unit successfully achieved significant
efficiencies in various disciplines within a short span of time. Located at Lalkua (District Nainital,
U.K.), CPP has provided direct and indirect employment to the people of the surrounding areas.

Vision :

Our vision for the millennium remains manufacturing of international quality products at optimum
cost in consistence with the physical and psychological environment best suitable for customers
and stakeholders.

Concrete vision elements :

 Product quality

 Safety and Environment

 Satisfaction of customer and stakeholders

 Cost Effectiveness

 Energy conservation

SCOMPANY PROFILE :
Century Pulp and Paper, a unit of Century Textiles and Industries Ltd. Is flagship company
of B.K. Birla group of industries . The company is an ISO- 9001 :2000 and ISO- 14001
certificated unit and has established it’s brand very well in the domestic and overseas
market ; with excellent quality of it’s products i.e. Writing Printing Papers and Dissolving/
Paper Grade Pulp. The company has the following installed capacities:
Rayon Grade/ Paper Grade Pulp : 31320 TPA
Writing & Printing Papers (wood) : 37250 TPA
Writing & Printing Papers ( Bagasse) : 84600 TPA
A State Of The Art Technology for Bagasse pulping, sound Environment practices and
excellent Product Quality are the core competencies of the company.
Energy Consumption :-
The power requirement of the plant is met by a 7500 MVA grid connection from UPCL and
21 MW & 6.8 MW own turbo generator sets. The plant consumes approx 6 lakhs units per
day, 90% of which is met by own generation . The daily thermal energy inputs are from 600
tons of coal and RFO. Black Liquor & Pith generated as liquid & solid wastes are also used
for meeting steam and power requirements of the mill.
The annual energy bill of the company is 20.64 % of the manufacturing cost.
Because of continuous energy conservation efforts , plant optimization and adopting
technological advances, there has been a continuous reduction in specific energy
consumption.
ENERGY CONSUMPTION TRENDS :
UNITS/TON 2 2 2 2
0 0 0 0
0 0 0 0
0 1 2 3
- - - -
2 2 2 2
0 0 0 0
0 0 0 0
1 2 3 4
RGP 1 1 9 9
0 0 7 6
0 1 6 9
9 2
PAPER 1 1 1 1
5 4 4 3
0 8 2 9
7 3 4 1
STEAM/TON 2 2 2 2
0 0 0 0
0 0 0 0
0 1 2 3
- - - -
2 2 2 2
0 0 0 0
0 0 0 0
1 2 3 4
RGP 1 1 1 1
2 2 1 0
. . . .
7 6 5 4
8 8 6 1
PAPER 1 1 1 9
1 1 0 .
 . . . 1
5 2 7 6
9 4 2
COMPANY PROFILE :
Century Pulp and Paper, a unit of Century Textiles and Industries Ltd. Is flagship company
of B.K. Birla group of industries . The company is an ISO- 9001 :2000 and ISO- 14001
certificated unit and has established it’s brand very well in the domestic and overseas
market ; with excellent quality of it’s products i.e. Writing Printing Papers and Dissolving/
Paper Grade Pulp. The company has the following installed capacities:
Rayon Grade/ Paper Grade Pulp : 31320 TPA
Writing & Printing Papers (wood) : 37250 TPA
Writing & Printing Papers ( Bagasse) : 84600 TPA
A State Of The Art Technology for Bagasse pulping, sound Environment practices and
excellent Product Quality are the core competencies of the company.
Energy Consumption :-
The power requirement of the plant is met by a 7500 MVA grid connection from UPCL and
21 MW & 6.8 MW own turbo generator sets. The plant consumes approx 6 lakhs units per
day, 90% of which is met by own generation . The daily thermal energy inputs are from 600
tons of coal and RFO. Black Liquor & Pith generated as liquid & solid wastes are also used
for meeting steam and power requirements of the mill.
The annual energy bill of the company is 20.64 % of the manufacturing cost.
Because of continuous energy conservation efforts , plant optimization and adopting
technological advances, there has been a continuous reduction in specific energy
consumption.
ENERGY CONSUMPTION TRENDS :
UNITS/TON 2 2 2 2
0 0 0 0
0 0 0 0
0 1 2 3
- - - -
2 2 2 2
0 0 0 0
0 0 0 0
1 2 3 4
RGP 1 1 9 9
0 0 7 6
0 1 6 9
9 2
PAPER 1 1 1 1
5 4 4 3
0 8 2 9
7 3 4 1
STEAM/TON 2 2 2 2
0 0 0 0
0 0 0 0
0 1 2 3
- - - -
2 2 2 2
0 0 0 0
 0 0 0 0
1 2 3 4
RGP 1 1 1 1
2 2 1 0
. . . .
7 6 5 4
8 8 6 1
PAPER 1 1 1 9
1 1 0 .
. . . 1
5 2 7 6
9 4 2
32000-012001-022002-032003-0490010001100120013001400150016002000-012001-
022002-032003-04RGPPAPER
STEAM CONSUMPTION TREND POWER CONSUMPTION TREND
ENERGY CONSERVATION COMMITMENT POLICY AND SET UP
CPP has accorded high priority for energy conservation from the inception. Accordingly for
energy conservation, a cell consisting of all energy producers & consumers is formed. The
objective of the cell is to coordinate the steam and power requirement of the mill, study the
causes of variance in consumption figure with targets on daily basis and take corrective
measures . The cell also identifies energy conservation schemes and monitors their
progress.
The energy conservation is a part of our environmental policy.
Some of the major energy saving projects implemented by us are :

• Capacity utilization continuously increased

• Fine tuning of pumps

• Installation of VFD’S

• Optimization of voltages & frequency of own generation.

• Optimization of operating procedures for Agitator, Depithers

• Energy efficient lighting practices

CPP also believes that apart from energy conservation lot of savings can be generated by
effective utilization of plant capacities. The thrust is on continuous plant operation without
any unscheduled stoppages.

Overview
When someone, whether a creditor or investor, asks you how your company is doing, you'll want to have
the answer ready and documented. The way to show off the success of your company is a balance sheet.
A balance sheet is a documented report of your company's assets and obligations, as well as the residual
ownership claims against your equity at any given point in time. It is a cumulative record that reflects the
result of all recorded accounting transactions since your enterprise was formed. You need a balance
sheet to specifically know what your company's net worth is on any given date. With a properly prepared
balance sheet, you can look at a balance sheet at the end of each accounting period and know if your
business has more or less value, if your debts are higher or lower, and if your working capital is higher or
lower. By analyzing your balance sheet, investors, creditors and others can assess your ability to meet
short-term obligations and solvency, as well as your ability to pay all current and long-term debts as they
come due. The balance sheet also shows the composition of assets and liabilities, the relative proportions
of debt and equity financing and the amount of earnings that you have had to retain. Collectively, this
information will be used by external parties to help assess your company's financial status, which is
required by both lending institutions and investors before they will allot any money toward your business.
Outline:
I. Who Wants to See Your Balance Sheet
II. Common Classifications
III. Preparing Your Balance Sheet
IV. Sample Trial Balance Sheet (interactive tables are available for your use)
V. Resources
I. Who Wants to See Your Balance Sheet
Many people and organizations are interested in the financial affairs of your company, whether you want
them to be or not. You of course want to know about the progress of your enterprise and what's
happening to your livelihood. However, your creditors also want assurance that you will be able to pay
them when they ask. Prospective investors are looking for a solid company to bet their money on, and
they want financial information to help them make a sound decision. Your management group also
requires detailed financial data and the labor unions (if applicable) will want to know your employees are
getting a fair share of your business earnings.
Back to Outline
II. Common Classifications
On the balance sheet you list your assets and equities under classifications according to their general
characteristics. It is a relatively simple matter to make a comparison of one classification with another or
to make comparisons within a classification because similar assets or similar equities are listed together.
Some of the most commonly used classifications are:
Current Assets
Current assets include cash and other assets that in the normal course of events are converted into cash
within the operating cycle. For example, a manufacturing enterprise will use cash to acquire inventories of
materials. These inventories of materials are converted into finished products and then sold to customers.
Cash is collected from the customers. This circle from cash back to cash is called an operating cycle. In a
merchandising business one part of the cycle is eliminated. Materials are not purchased for conversion
into finished products. Instead, the finished products are purchased and are sold directly to the
customers. Several operating cycles may be completed in a year, or it may take more than a year to
complete one operating cycle. The time required to complete an operating cycle depends upon the nature
of the business. It is conceivable that almost all of the assets that are used to conduct your business,
such as buildings, machinery, and equipment, can be converted into cash within the time required to
complete an operating cycle. However, your current assets are only those that will be converted into cash
within the normal course of your business. The other assets are only held because they provide useful
services and are excluded from the current asset classification. If you happen to hold these assets in the
regular course of business, you can include them in the inventory under the classification of current
assets. Current assets are usually listed in the order of their liquidity and frequently consist of cash,
temporary investments, accounts receivable, inventories and prepaid expenses.
Cash
Cash is simply the money on hand and/or on deposit that is available for general business purposes. It is
always listed first on a balance sheet. Cash held for some designated purpose, such as the cash held in a
fund for eventual retirement of a bond issue, is excluded from current assets.
Marketable Securities
These investments are temporary and are made from excess funds that you do not immediately need to
conduct operations. Until you need these funds, they are invested to earn a return. You should make
these investments in securities that can be converted into cash easily; usually short-term government
obligations.
Accounts Receivable
Simply stated, accounts receivables are the amounts owed to you and are evidenced on your balance
sheet by promissory notes. Accounts receivable are the amounts billed to your customers and owed to
you on the balance sheet's date. You should label all other accounts receivable appropriately and show
them apart from the accounts receivable arising in the course of trade. If these other amounts are
currently collectible, they may be classified as current assets.
Inventories
Your inventories are your goods that are available for sale, products that you have in a partial stage of
completion, and the materials that you will use to create your products. The costs of purchasing
merchandise and materials and the costs of manufacturing your various product lines are accumulated in
the accounting records and are identified with either the cost of the goods sold during the fiscal period or
as the cost of the inventories remaining at the end of the period.
Prepaid expenses
These expenses are payments made for services that will be received in the near future. Strictly
speaking, your prepaid expenses will not be converted to current assets in order to avoid penalizing
companies that choose to pay current operating costs in advance rather than to hold cash. Often your
insurance premiums or rentals are paid in advance.
Investments
Investments are cash funds or securities that you hold for a designated purpose for an indefinite period of
time. Investments include stocks or the bonds you may hold for another company, real estate or
mortgages that you are holding for income-producing purposes. Your investments also include money
that you may be holding for a pension fund.
Plant Assets
Often classified as fixed assets, or as plant and equipment, your plant assets include land, buildings,
machinery, and equipment that are to be used in business operations over a relatively long period of time.
It is not expected that you will sell these assets and convert them into cash. Plant assets simply produce
income indirectly through their use in operations.
Intangible Assets
Your other fixed assets that lack physical substance are referred to as intangible assets and consist of
valuable rights, privileges or advantages. Although your intangibles lack physical substance, they still hold
value for your company. Sometimes the rights, privileges and advantages of your business are worth
more than all other assets combined. These valuable assets include items such as patents, franchises,
organization expenses and goodwill expenses. For example, in order to become incorporated you must
incur legal costs. You can designate these legal costs as organizing expenses.
Other Assets
During the course of preparing your balance sheet you will notice other assets that cannot be classified as
current assets, investments, plant assets, or intangible assets. These assets are listed on your balance
sheet as other assets. Frequently, your other assets consist of advances made to company officers, the
cash surrender value of life insurance on officers, the cost of buildings in the process of construction, and
the miscellaneous funds held for special purposes.
Current Liabilities
On the equity side of the balance sheet, as on the asset side, you need to make a distinction between
current and long-term items. Your current liabilities are obligations that you will discharge within the
normal operating cycle of your business. In most circumstances your current liabilities will be paid within
the next year by using the assets you classified as current. The amount you owe under current liabilities
often arises as a result of acquiring current assets such as inventory or services that will be used in
current operations. You show the amounts owed to trade creditors that arise from the purchase of
materials or merchandise as accounts payable. If you are obligated under promissory notes that support
bank loans or other amounts owed, your liability is shown as notes payable. Other current liabilities may
include the estimated amount payable for income taxes and the various amounts owed for wages and
salaries of employees, utility bills, payroll taxes, local property taxes and other services.
Long-Term Liabilities
Your debts that are not due until more than a year from the balance sheet date are generally classified as
long-term liabilities. Notes, bonds and mortgages are often listed under this heading. If a portion of your
long-term debt is due within the next year, it should be removed from the long-term debt classification and
shown under current liabilities.
Deferred Revenues
Your customers may make advance payments for merchandise or services. The obligation to the
customer will, as a general rule, be settled by delivery of the products or services and not by cash
payment. Advance collections received from customers are classified as deferred revenues, pending
delivery of the products or services.
Owner's Equity
Your owner's equity must be subdivided on your balance sheet: One portion represents the amount
invested directly by you, plus any portion of retained earnings converted into paid-in capital. The other
portion represents your net earnings that are retained. This rigid distinction is necessary because of the
nature of any corporation. Ordinarily, stockholders, or owners, are not personally liable for the debts
contracted by a company. A stockholder may lose his investment, but creditors usually cannot look to his
personal assets for satisfaction of their claims. Under normal circumstances, the stockholders may
withdraw as cash dividends an amount measured by the corporate earnings. The distinction in this rule
gives the creditors some assurance that a certain portion of the assets equivalent to the owner's
investment cannot be arbitrarily withdrawn. Of course, this portion could be depleted from your balance
sheet because of operating losses. The owner's equity in an unincorporated business is shown more
simply. The interest of each owner is given in total, usually with no distinction being made between the
portion invested and the accumulated net earnings. The creditors are not concerned about the amount
invested. If necessary, creditors can attach the personal assets of the owners.
Cost
Cost is conventionally used as the basis for accountability. Assets, when acquired under normal
circumstances, are recorded at the price negotiated between two independent parties dealing at arm's
length. Simply stated, the cost of an asset to the purchaser is the price that he or she must pay now or
later in order to obtain it. The fair value of the asset is not relevant in recording the transaction on your
balance sheet. A purchaser may acquire an asset at a cost that is greater or less than the fair value
determined in the marketplace. If the asset is acquired, the purchaser accounts for the assets at his cost,
value notwithstanding. A simple formula to remember in determining cost is: Assets = Liability + Equity or
Equity = Assets - Liability

Back to Outline
III. Preparing Your Balance Sheet
Title and Heading
In practice, the most widely used title is Balance Sheet; however Statement of Financial Position is also
acceptable. Naturally, when the presentation includes more than one time period the title "Balance
Sheets" should be used.
Heading
In addition to the statement title, the heading of your balance sheet should include the legal name of your
company and the date or dates that your statement is presented. For example, a comparative
presentation might be headed:
XYZ CORPORATION
BALANCE SHEETS
December 31, 2009 and 2010
Format
There are two basic ways that balance sheets can be arranged. In Account Form, your assets are listed
on the left-hand side and totaled to equal the sum of liabilities and stockholders' equity on the right-hand
side. Another format is Report Form, a running format in which your assets are listed at the top of the
page and followed by liabilities and stockholders' equity. Sometimes total liabilities are deducted from
total assets to equal stockholders' equity.
Captions
Captions are headings within your statement that designate major groups of accounts to be totaled or
subtotaled. Your balance sheet should include three primary captions: Assets, Liabilities and
Stockholders' Equity. In the report form of presentation, the placement of your primary captions would be
as follows:
2009 2010 ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
Except in certain specialized industries your balance sheet should include the following secondary
captions:
CURRENT ASSETS
CURRENT LIABILITIES
Your remaining assets and liabilities are generally combined into two or three other secondary captions,
based on their materiality.
Order of Presentation of Captions
First, start with items held primarily for conversion into cash and rank them in the order of their expected
conversion. Then, follow with items held primarily for use in operations but that could be converted into
cash, and rank them in the order of liquidity. Finally, finish with items whose costs you will defer to future
periods or that you cannot convert into cash. Following these guidelines, your major assets should
normally be presented in the following order:
Cash
• Short-term marketable securities
• Trade notes and accounts receivable
• Inventories
• Long-term investments
• Property and equipment
• Intangible assets
• Deferred charges
Liabilities are ordinarily presented in the order of maturity as follows:
• Demand notes
• Trade accounts payable
• Accrued expenses
• Long-term debt
• Other long-term liabilities
Components of stockholders' equity are usually presented the following order:
• Preferred stock
• Common stock
• Additional paid-in capital
• Retained earnings
• Accumulated other comprehensive income
• Treasury stock
Back to Outline
IV. Sample Trial Balance Sheet
Trial Balance
Cash 10000
Accounts Receivable 28000
Inventory 55000
Prepaid Expenses 2000
Equipment 25000
Computers 15000
Accum. Depr Equip 8000
Accum. Depr Computers 6000
Goodwill 10000
Accounts Payable 25000
Expenses Payable 5000
 Payroll Taxes Withheld 2500
Loans Payable - Short Term 10000
Loans Payable - Long Term 30000
Capital Stock 10000
Paid In Capital 5000
Retained Earnings 22000
145000 123500
Net Profit 21500
145000 145000

(You can use the interactive table provided to create an income statement for your company. Netscape
users must scroll back down to the form after clicking 'submit' for your results.)
Top of Form
Balance Sheet
Assets
Current Assets:
Cash

Accounts Receivable

Inventory

Prepaid Expenses

Fixed Assets:
Equipment

Equipment Depreciation

Computers

Computer Depreciation

Other Assets:
Goodwill

Liabilities
Current Liabilities:
Accounts Payable

Expenses Payable

Payroll Taxes Withheld

Loans Payable (short term)

Long-term Liabilities:
Loans Payable (long term)
 Shareholders' Equity
Beginning Retained Earnings

Net Income

Capital Stock

Paid in Capital

Current Assets
Accumulated Depreciation
Net Fixed Assets
Other Assets
Total Assets
Total Current Liabilities
Total Long Term Liabilities
Total Liabilities
Ending Retained Earnings
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

SUBMIT RESET

Bottom of Form

Ratios
Now that the balance sheet is complete, here are some simple ratios you can calculate using the
information provided on the balance sheet.
Current Ratio
Computation: Total current assets divided by total current liabilities.
Total Current Assets / Total Current Liabilities
The current ratio is a rough indication of a firm's ability to service its current obligations. Generally, the
higher the current ratio, the greater the cushion between current obligations and a firm's ability to pay
them. The stronger ratio reflects a numerical superiority of current assets over current liabilities. However,
the composition and quality of current assets is a critical factor in the analysis of an individual firm's
liquidity.
Quick Ratio
Computation: Cash and equivalents plus trade receivables divided by total current liabilities.
Cash & Equivalents + Trade Receivables / (net) Total Current Liabilities
Also known as the "acid test" ratio, this is a refinement of the current ratio and is a more conservative
measure of liquidity. The quick ratio expresses the degree to which a company's current liabilities are
covered by the most liquid current assets. Generally, any value of less than 1 to 1 implies a reciprocal
dependency on inventory or other current assets to liquidate short-term debt.
Fixed/Worth Ratio
Computation: Fixed assets (net of accumulated depreciation) divided by tangible net worth.
Net Fixed Assets / Tangible Net Worth
This ratio measures the extent to which owner's equity (capital) has been invested in plant and equipment
(fixed assets). A lower ratio indicates a proportionately smaller investment in fixed assets in relation to net
worth and a better cushion for creditors in case of liquidation. Similarly, a higher ratio would indicate the
opposite situation. The presence of substantial leased fixed assets (not shown on the balance sheet) may
deceptively lower this ratio.
Debt/Worth Ratio
Computation: Total liabilities divided by tangible net worth.
Total Liabilities / Tangible Net Worth
This ratio expresses the relationship between capital contributed by creditors and that contributed by
owners. It expresses the degree of protection provided by the owners for the creditors. The higher the
ratio, the greater the risk being assumed by creditors. The lower the ratio, the greater the long-term
financial safety. A firm with a low debt/worth ratio usually has greater flexibility to borrow in the future. A
more highly leveraged company has a more limited debt capacity.
Back to Outline
V. Resources
Books
John Clay and Stephen Holton, "Guide to Preparing Financial Statements" (Practitioners Publishing,
1997)
Peter Atrill and Eddie McLaney, "Accounting and Finance for Non-Specialists" (Prentice Hall, 1997)
Leopold Bernstein and John Wild, "Analysis of Financial Statements" (McGraw-Hill, 2000)
Daniel L. Jensen, "Advanced Accounting" (McGraw-Hill College Publishing, 1997)
Martin Mellman et. al., "Accounting for Effective Decision Making" (Irwin Professional Press, 1994)
Eric Press, "Analyzing Financial Statements" (Lebahar-Friedman, 1999)
Gerald I. White, "The Analysis and Use of Financial Statements" (John Wiley & Sons, 1997)
Back to Outline

Pulp and paper industry

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An International Paper mill in South Carolina
The global pulp and paper industry is dominated by North American (United States, Canada),
northern European (Finland, Sweden) and East Asian countries (such as Japan). Australasia and
Latin America also have significant pulp and paper industries. Both India and China are expected
to be key in the industry's growth over the next few years.

Contents
[hide]
• 1 List by net sales
○ 1.1 2007
○ 1.2 2008
• 2 See also
• 3 References

[edit] List by net sales

[edit] 2007
In 2007, the top 10 forest, paper & packaging products companies were:[1]
2007 Net Sales 2007 Net Income (Loss)
Rank Company Country
(US$M) (US$M)
2 Stora Enso Finland 18,322 (291)
3 Kimberly-Clark United States 18,266 1,822
4 SCA Sweden 15,675 1,056
5 Weyerhaeuser United States 13,949 462
6 UPM Finland 13,748 111
7 Oji Paper Japan 10,439 146
8 Metsäliitto Finland 10,507 (12)
9 Nippon Unipac Japan 9,990 195
10 Smurfit Kappa Ireland 9,963 202
[edit] 2008
In 2008, some orders changed:[2]
 2008 Net Sales 2008 Net Income (Loss)
Rank Company Country
(US$M) (US$M)
1 International Paper United States 24,829 (1,282)
2 Kimberly-Clark United States 19,415 1,690
3 SCA Sweden 16,965 857
4 Stora Enso Finland 16,227 (991)
5 UPM Finland 13,920 (263)
6 Oji Paper Japan 12,788 114
7 Nippon Unipac Japan 11,753 55
8 Smurfit Kappa Ireland 10,390 (73)
9 Metsäliitto Finland 9,335 (313)
] 10 Mondi Group UK/ South Africa 9,466 (310)

Paper Industry in India

Paper industry in India is the 15th largest paper
industry in the world. It provides employment to
nearly 1.5 million people and contributes Rs 25 billion to the government's kitty. The government regards the paper
industry as one of the 35 high priority industries of the country.

Paper industry is primarily dependent upon forest-based raw materials. The first paper mill in India was set up at
Sreerampur, West Bengal, in the year 1812. It was based on grasses and jute as raw material. Large scale
mechanized technology of papermaking was introduced in India in early 1905. Since then the raw material for the
paper industry underwent a number of changes and over a period of time, besides wood and bamboo, other non-
conventional raw materials have been developed for use in the papermaking. The Indian pulp and paper industry at
present is very well developed and established. Now, the paper industry is categorized as forest-based, agro-based
and others (waste paper, secondary fibre, bast fibers and market pulp).

In 1951, there were 17 paper mills, and today there are about 515 units engaged in the manufacture of paper and
paperboards and newsprint in India. The pulp & paper industries in India have been categorized into large-scale and
small-scale. Those paper industries, which have capacity above 24,000 tonnes per annum are designated as large-
scale paper industries. India is self-sufficient in manufacture of most varieties of paper and paperboards. Import is
confined only to certain specialty papers. To meet part of its raw material needs the industry has to rely on imported
wood pulp and waste paper.

Indian paper industry has been de-licensed under the Industries (Development & Regulation) Act, 1951 with effect
from 17th July, 1997. The interested entrepreneurs are now required to file an Industrial Entrepreneurs' Memorandum
(IEM) with the Secretariat for Industrial Assistance (SIA) for setting up a new paper unit or substantial expansion of
the existing unit in permissible locations. Foreign Direct Investment (FDI) up to 100% is allowed on automatic route
on all activities except those requiring industrial licenses where prior governmental approval is required.

Growth of paper industry in India has been constrained due to high cost of production caused by inadequate
availability and high cost of raw materials, power cost and concentration of mills in one particular area. Government
has taken several policy measures to remove the bottlenecks of availability of raw materials and infrastructure
development. For example, to overcome short supply of raw materials, duty on pulp and waste paper and wood
logs/chips has been reduced.

Following measures need to be taken to make Indian paper industry more competitive:

• Improvements of key ports, roads and railways and communication facilities.

 • Revision of forest policy is required for wood based paper industry so that plantation can be raised by
industry, cooperatives of farmers, and state government. Degraded forest land should be made available to
the industry for raising plantations.

• Import duty on waste paper should be reduced.

• Duty free imports of new & second hand machinery/equipment should be allowed for technology up
gradation.
Outlook
Outlook for paper industry in India looks extremely positive as the demand for upstream market of paper products,
like, tissue paper, tea bags, filter paper, light weight online coated paper, medical grade coated paper, etc., is growing
up.

Note: The above information was last updated on 21-07-2007

Production Process

Process:

CPP is the first large pulp and paper mill in India, who had not only floated the idea of consuming
bagasse for manufacturing Quality paper but also gave concrete base to its idea in the form of
Bagasse Unit. The Bagasse Unit of CPP was commissioned in early 1995 with a capacity of 211
TPD for manufacturing quality paper. The salient features of bagasse unit are latest bagasse
handling, pulping and paper making technologies.

1. - Beloit UK.
Bagasse handling, moist depithing, pile building reclaiming and
washing
2. - Sunds
Bagasse cooking continuous digester, cold blow to avoid Emissions
and to retain fiber strength.
3. Brown Stock Washing. - HDO
4. Screening and cleaning - Ahlstrom,Finland
5. Bleaching system based on C/D, E/O D sequence to attain final pulp - Sunds, Sweden
brightness of +88 without affecting the strength of pulp.

Bagasse:

Bagasse is received from the Sugar Mills either in bale form or in

loose form as per the requirement. Whole bagasse from the sugar mill
is available only in the sugar cane crushing season which is stretched
over a period of maximum six to seven months only, whereas the
process of production of paper is continuous throughout the year.

Therefore, it is essential to store bagasse in a proper way so as to

make it available for paper making through out the year i.e. during off
season without affecting the quality

Hence, the total amount of bagasse required for the production throughout the year is carefully
stored so that the production is not affected due to the shortage of bagasse.
 Writing and Printing Paper Plant Process (WPP)

This integrated plant is based on Eucalyptus and Bamboo furnish to produce paper ranging
between 45 to 210 gsm.

The best selected species of Eucalyptus and other hard wood/bamboo which are locally available
from nearby forest is used for pulping. Pulping process is conventional kraft process. For high
brightness and good strength pulp output latest technology of bleaching sequences consisting of
Hydrogen peroxide, chlorine dioxide & sulphur dioxide is used. Pulp is further processed in highly
sophisticated continuous stock preparation plant.

To cater to market requirement of reels and sheets facilities of winding, sheeting and packing is
available. The packing of reels & sheets is conforming to seaworthy standards suitable for export.

Legal Disclaimer

This is the official site of Century Textiles and Industries Limited and provides general information
about the Company. All the text, graphics, trade marks and all other content displayed on this site are
owned by Century Textiles and Industries Limited (hereinafter called as "Century"). The information
and content is based on the laws applicable in India.
While efforts are made to keep the information on this site accurate and timely, Century does not
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information, and references to services and products if any herein, including without limitations, text,
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To the fullest extent permissible, Century disclaims any warranties, express and/or implied, including
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irrespective of whether the materials contained on the site are provided by Century.
The contents of this site are subject to change without notice. Commercial use of any of the contents
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obtained. No reproduction of any part of the site may be sold or distributed for commercial gain nor
shall it be modified or incorporated in any other work, publication or site, whether in hardcopy or
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This site may contain some hyperlinks which lead out of this site. Information contained in any site
linked from this site has not been reviewed for accuracy or legal sufficiency. Century is not responsible
for the content of any such external hyperlinks and references to any external links should not be
construed as an endorsement of the links or their content.
No information on this site shall constitute an invitation to invest in Century nor its respective officers,
employees or agents shall be liable for any loss, damage or expense arising out of any access to or
use of this site or any site linked to it, including, without limitation, any loss of profit, indirect,
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By viewing this site you are deemed to agree to jurisdiction of the courts at Mumbai, India in respect
of any action arising therefrom or related thereto.

At CPP we believe in caring.... Caring for you and the quality of the products we supply to you. For the people
who turn this dream into a reality. And caring for nature. Nature - the source of our very existence. Which
provides the Bamboo and Eucalyptus for bringing you the best writing paper in the country.
What's important is the perfect balance that we have managed to maintain. Come share this beautiful
experience of co-existence with us....
 Writing and Printing Century Pulp and Paper,
Papers Lalkua is having a well
Rayon Grade Pulp organised laboratory
equipped with all modern
Bleached Hardwood
pulp and paper testing
Pulp
equipment..
Read More...
Read More...

Company Policy

We at Century Pulp and Paper are committed to strengthen our position as market leader in
manufacturing of writing and printing paper and rayon grade pulp by developing a company wide
culture that promotes :

 Customer delight

 Quality, Environment, Safety and Information Security initiatives

 Environment friendly, Safe and Energy efficient operation

Protecting Information of all Stakeholders


We will continuously pursue for :

 Continual improvement in our products, processes & services in all areas.

 Protecting information assets and customer information from all threats through the
implementaion of suitable information security management systems.

 Remain incompliance with applicable legislations.


Communicate and reinforce this policy through out the company.

This policy is made available to employees and on request to interested parties.

Export Figures:

Major Countries Exported :

Major countries to which Century has exported during the year 99-00 are UAE,
Singapore, Sri Lanka, Egypt, Bangladesh, Nepal & Myanmar.

Countries Exporting Currently :

CPP is currently exporting to UAE, Singapore, Sri Lanka, Egypt,

Bangladesh & Nepal, Myanmar, Malaysia, South Africa, Malta, Tanzania
and Austria.

Seeking Export Enquiries :

CPP is currently seeking export enquiries from all over. The company wholeheartedly welcomes
innovative ideas and productive schemes.
Top of Form

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services. We'd also love to hear your suggestions about our Web site. Please feel free to
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What Does Working Capital Management Mean?

A managerial accounting strategy focusing on maintaining efficient levels of both components of working
capital, current assets and current liabilities, in respect to each other. Working capital management
ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating
expenses.

Investopedia explains Working Capital Management

Implementing an effective working capital management system is an excellent way for many companies
to improve their earnings. The two main aspects of working capital management are ratio analysis and
management of individual components of working capital.

A few key performance ratios of a working capital management system are the working capital ratio,
inventory turnover and the collection ratio. Ratio analysis will lead management to identify areas of focus
such as inventory management, cash management, accounts receivable and payable management.
Cash Flow

What Does Cash Flow Mean?

1. A revenue or expense stream that changes a cash account over a given period. Cash inflows
usually arise from one of three activities - financing, operations or investing - although this also occurs as
a result of donations or gifts in the case of personal finance. Cash outflows result from expenses
or investments. This holds true for both business and personal finance.

2. An accounting statement called the "statement of cash flows", which shows the amount of cash
generated and used by a company in a given period. It is calculated by adding noncash charges (such as
depreciation) to net income after taxes. Cash flow can be attributed to a specific project, or to a business
as a whole. Cash flow can be used as an indication of a company's financial strength.

Investopedia explains Cash Flow

1. In business as in personal finance, cash flows are essential to solvency. They can be presented as a
record of something that has happened in the past, such as the sale of a particular product, or forecasted
into the future, representing what a business or a person expects to take in and to spend. Cash flow is
crucial to an entity's survival. Having ample cash on hand will ensure that creditors, employees and
others can be paid on time. If a business or person does not have enough cash to support its operations,
it is said to be insolvent, and a likely candidate for bankruptcy should the insolvency continue.

2. The statement of a business's cash flows is often used by analysts to gauge financial performance.
Companies with ample cash on hand are able to invest the cash back into the business in order to
generate more cash and profit.

Cash Flow Statement

What Does Cash Flow Statement Mean?

One of the quarterly financial reports any publicly traded company is required to disclose to the SEC and
the public. The document provides aggregate data regarding all cash inflows a company receives from
both its ongoing operations and external investment sources, as well as all cash outflows that pay for
business activities and investments during a given quarter.

Investopedia explains Cash Flow Statement

Because public companies tend to use accrual accounting, the income statements they release each
quarter may not necessarily reflect changes in their cash positions. For example, if a company lands a
major contract, this contract would be recognized as revenue (and therefore income), but the
company may not yet actually receive the cash from the contract until a later date. While the company
may be earning a profit in the eyes of accountants (and paying income taxes on it), the company may,
during the quarter, actually end up with less cash than when it started the quarter. Even profitable
companies can fail to adequately manage their cash flow, which is why the cash flow statement is
important: it helps investors see if a company is having trouble with cash.
Balance Sheet

What Does Balance Sheet Mean?

A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a
specific point in time. These three balance sheet segments give investors an idea as to what the
company owns and owes, as well as the amount invested by the shareholders.

The balance sheet must follow the following formula:

Assets = Liabilities + Shareholders' Equity

Investopedia explains Balance Sheet

It's called a balance sheet because the two sides balance out. This makes sense: a company has to pay
for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders
(shareholders' equity).

Each of the three segments of the balance sheet will have many accounts within it that document the
value of each. Accounts such as cash, inventory and property are on the asset side of the balance sheet,
while on the liability side there are accounts such as accounts payable or long-term debt. The exact
accounts on a balance sheet will differ by company and by industry, as there is no one set template that
accurately accommodates for the differences between different types of businesses.

Profit and loss accounts, balance sheets

Two of the most important financial statements for a business are the Profit and Loss Account,
and the Balance Sheet. The Profit and Loss Account shows the profit or loss of a business over a
given period of time e.g. 3 months, 1 year, etc.

In contrast, the Balance Sheet is like a photograph taken at an instant in time giving a picture of
what the business owns and what the business owes at that moment in time. As we shall see it
will always balance because what the business owns is financed by what the business owes.
The Profit and Loss (P&L account)

One of the most important objectives of a business is to make a profit. The P&L account shows
the extent to which it has been successful in achieving this objective.
Companies are expected to keep their P&L accounts in certain formats.
Typically the P&L account will show the revenues received by a business and the costs involved
in generating that revenue.
In simple terms:

Revenues - Costs = Profits.

A typical P&L account will look like the following:

Case Study:
P&L Account for Superior Traders as at 31/12/2004

You can find out the gross profit of a business by deducting cost of sales from turnover:

£100,000 - £50,000 = £50,000

You can find out the operating profit by deducting the expenses from the gross profit:

£50,000 - £30,000 = £20,000

You may also come across the term net profit. Operating profit is earned from carrying out a
businesses normal operations e.g. producing confectionery, or selling Christmas cards. Net profit
takes account of other sources of income and expenditure that are not involved in normal
operations e.g. interest paid on loans and interest received on having a positive balance in a bank
account.

Turnover - is the value of sales made in a trading period. It is sometimes referred to as sale
revenue and is calculated by the average price of items sold x the number sold.

Cost of sales - calculates the direct costs of manufacturing items, or buying in items to sell them
on.

Expenses - are the overhead costs of running a business. These overheads can't be tied down to
particular cost units. For example, it would be very difficult to calculate what fraction of the
heating cost of a pen factory can be allocated to just one pen.

The Balance Sheet is a statement showing the assets, liabilities and owner's capital of a business
at a particular moment in time, for example the year end.

The Balance Sheet balances because the assets that a business possesses at a specific time have
been financed either through the provision of capital by the owner's or by the creation of external
liabilities:

Value of assets = Value of Liabilities Value of Owner's capital.

There are a number of things that we can see from looking at a balance sheet, for example:

1. The Net Assets of the business, i.e. the difference between the value of the assets and the value
of the liabilities. A growth in net assets tends to indicate a growing business.

2. How solvent the business is. In other words, does it have enough assets that are short term, and
hence easily converted into cash, to pay any pressing short-term liabilities.
Case Example: A typical balance sheet will be set out in the following way (note that we use two
columns. The first column is for minor calculations, the second column is for grand totals):
Balance Sheet of Superior Traders, as at 31st December 2004

Fixed assets consist of those items that are kept within the business to create wealth over a period
of time e.g. machinery, equipment, vehicles, computers, etc.

Current assets are used in the short period to generate income for a business. For example, in a
manufacturing company like Kraft, stocks would represent products that have already been made
and are waiting to be sold onto retailers. Typically stocks will be sold on credit for periods of one
month, two months, or three months. Retailers buying stocks on credit from Kraft would become
Kraft's debtors. At the end of the credit period they will pay up in the form of cash, enabling
Kraft to buy more raw materials to create further stocks.

Creditors due within one year are the sums that a business owes money to in the short period -
otherwise known as current liabilities.
Net current assets is a measure of how solvent or liquid a business is.
Many businesses need to have working capital. Working capital is calculated by subtracting
current liabilities from current assets:

Working capital = Current assets - Current liabilities

Note that the figure for net current assets appear almost in the centre of a balance sheet, and is a
figure that many people will look at first to check on the solvency of a business.
Total assets - current liabilities is a sum that appears in the balance sheet simply doing what the
title suggests.
Creditors due after more than one year shows the longer term liabilities of the bsiness.

Total net assets is calculated by taking away all the liabilities (both current and long term) from
all of the assets (both current and long term).
Shareholders' funds shows the value of the shareholders capital in the business. It will always be
the same value as the total net assets and it balances the account.

Working Capital Ratio (Current Ratio)

Current Assets
=
Current Liabilities
Indicates if a firm has enough short-term assets to cover its immediate liabilities.

Things to remember
• If the ratio is less than one then they have negative working capital.

• A high working capital ratio isn't always a good thing, it could indicate that
they have too much inventory or they are not investing their excess cash.
 [Click on the image(s) above to see the financial statements]

For Cory's Tequila Co.

$4,615
= 1.54
$3,003

This ratio indicates whether a company has enough short term assets to cover its short term debt.
Anything below 1 indicates negative W/C (working capital). While anything over 2 means that the
company is not investing excess assets. Most believe that a ratio between 1.2 and 2.0 is sufficient,
Cory's Tequila Co. seems to be comfortably in this area.

If you wanted to take this ratio a step further then you could try the Acid Test/Quick Ratio - it is a more
strenuous version of the W/C, indicating whether liabilities could be paid
without selling inventory.

Ratio Analysis: Conclusion

There is a lot to be said for valuing a company, it is no easy task. I hope that we have helped shed
some light on this topic, and that you will use this information to make educated investment decisions.
If you have any other questions about fundamental analysis please don't hesitate to contact us.

Let's recap what we've learned:

• Financial reports are published quarterly and annually.
• Ratios on their own don't really tell us a whole lot, but when we compare them against
previous years numbers, other companies, industry averages, or the economy in general it
can reveal a lot!
• Every ratio has it's variations, some people exclude things that others include. Use what you
feel comfortable with, but be sure to have consistency when comparing against other
companies.
Also:
1. If you think we missed something and have a question, tell us about it.
2. If you enjoyed this tutorial, make sure to Tell a Friend!
3. If you still aren't on our newsletter, why not?

Related Articles and Tutorials

If you are still unsure about many of the terms we discussed in this tutorial then please check out our
list of Fundamental Analysis and Financial Reporting terms.

Learn to Look at the Cash Flow - an article discussing the key items to look at when reviewing the
statement of cash flow.

Off Balance Sheet Entities: The Good, The Bad and The Ugly - Companies have used off balance
sheet entities responsibly, and irresponsibly, for some time. This article will define some typical off
balance sheet items and discuss whether they are "good" or "bad."

Inventory Valuation for Investors: FIFO and LIFO - If you are an investor who ignores how a company
values its inventory, it's time to get the lowdown.

Annual Report Analysis - Invest-faq.com helps you understand the financial reports.

The Basics of Fundamental Analysis - an excellent tutorial by the TheStreet.com where the author
goes through several fundamental analysis techniques on Budweiser.
Working Capital Calculation
Want to learn how to calculate working capital? Here's an article on what is working capital and working capital
calculation.

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All the subjects related to establishing the financial position of the business like accounts, costing and
financial management have something or the other to do with what is known as working capital. What is
working capital? And how does one go about working capital calculation? Read on to find out.

Working Capital Calculation

Before I get to the part about how is working capital calculated, it is essential to define a couple of terms
who have quite a bit to do with the calculation of working capital.

Current Assets
Another little something we hear a lot but don't know the meaning of. The definition of current assets is
indeed quite ambiguous and contextual. Current assets are generally those assets which can be
liquidated quickly or whenever you need them liquidated. While this seems fairly straightforward, the
ambiguity revolves around the word 'quickly'. How quickly is quickly? Different answers are given by
different companies in different industries. But the general assumption is that when you look to the assets
side of the balance sheet, certain items like cash-in-hand, cash at bank, marketable securities and
working inventory and debtors (again, debatable) make the grade as current assets.

Current Liabilities
The definition of current liabilities, in contrast, is fairly simple. Current liabilities are those liabilities that
might have to be paid any time soon. The payment date for current liabilities is not fixed and the debt
might mature anytime. But then again, a long term loan is not and never will be a current liability, even if it
has to be paid off tomorrow. Current liabilities are simply those liabilities which you might have to pay up
for anytime. So typically current liabilities is the sum of the amount owed to creditors and, sometimes, bills
payable.

Working Capital
So great, we learned 2 new terms today. But how is this going to help you in working capital calculation?
Well you'll be pretty glad to know that once you've wrapped your heads around what current assets and
current liabilities are, working capital calculation becomes a piece of cake. Simply, working capital is
calculated as:

Working Capital = Current Assets – Current Liabilities

See? That simple. Oh yes, and the fact that I put the current assets first in the formula means that the
working capital ought to be positive i.e. the total of the current assets should be more, often twice as
much for the sake of unforeseen risk factors, the total of the current liabilities.

Change in Working Capital Calculation and Its Importance

Now that you had to go through the fairly difficult steps to learn about working capital calculation, I believe
you deserve to know more about it. After all, people who do know what working capital is do tend to make
a big fuss about working capital? What's the big deal about it anyway? Why is there a whole subject
called 'working capital management' devoted to it?

Hard enough to surmise, but this little amount, which hardly involves 4-5 balance sheet items, with usually
the lowest amounts in the whole sheet, could make your bankrupt or at least, lead to short term debt
settlement problems. How? Because if your current liabilities exceed the assets, and you run into your
creditors, the business might find itself in a real fix. Secondly, the working capital shows the efficiency in
running the business. A low working capital generally indicates that your debtors pay you slowly (your
collections are low), while your creditors are a lot more demanding. One more unhealthy looking scenario.
Read on for debt management.

Ratio Analysis

What Does Ratio Analysis Mean?

A tool used by individuals to conduct a quantitative analysis of information in a company's financial
statements. Ratios are calculated from current year numbers and are then compared to previous years,
other companies, the industry, or even the economy to judge the performance of the company. Ratio
analysis is predominately used by proponents of fundamental analysis.

Investopedia explains Ratio Analysis

There are many ratios that can be calculated from the financial statements pertaining to a company's
performance, activity, financing and liquidity. Some common ratios include the price-earnings ratio, debt-
equity ratio, earnings per share, asset turnover and working capital.

SAsset Turnover
What Does Asset Turnover Mean?
The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales in
dollars by assets in dollars.

Formula:

Also known as the Asset Turnover Ratio.

Investopedia explains Asset Turnover

Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the higher
the number the better. It also indicates pricing strategy: companies with low profit margins tend to have
high asset turnover, while those with high profit margins have low asset turnover.

Price-Earnings Ratio - P/E Ratio

What Does Price-Earnings Ratio - P/E Ratio Mean?

A valuation ratio of a company's current share price compared to its per-share earnings.

Calculated as:

For example, if a company is currently trading at $43 a share and earnings over the last 12 months were
$1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95).

EPS is usually from the last four quarters (trailing P/E), but sometimes it can be taken from the estimates
of earnings expected in the next four quarters (projected or forward P/E). A third variation uses the sum of
the last two actual quarters and the estimates of the next two quarters.

Also sometimes known as "price multiple" or "earnings multiple".

Investopedia explains Price-Earnings Ratio - P/E Ratio

In general, a high P/E suggests that investors are expecting higher earnings growth in the future
compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole story by itself.
It's usually more useful to compare the P/E ratios of one company to other companies in the same
industry, to the market in general or against the company's own historical P/E. It would not be useful for
investors using the P/E ratio as a basis for their investment to compare the P/E of a technology company
(high P/E) to a utility company (low P/E) as each industry has much different growth prospects.

The P/E is sometimes referred to as the "multiple", because it shows how much investors are willing to
pay per dollar of earnings. If a company were currently trading at a multiple (P/E) of 20, the interpretation
is that an investor is willing to pay $20 for $1 of current earnings.

It is important that investors note an important problem that arises with the P/E measure, and to avoid

DECLARATION
IRAJNI, student of M.B.A. III Semester of VAISH COLLEGE OF
ENGINEERING (Affiliated to M.D University) hereby declare that the Summer
Training Report on “WORKING CAPITAL MANAGEMENT”of BHIWANI TEXTILE MILL

(GRASIM INDUSTRY) Is my original work and has not been submitted by any other person.
I also declare that I have done my work sincerely and accurately even then if
any mistake or error had kept in it, I request the readers to point out these errors and guide
me to remove these errors in future.
Presentation Incharge
Signature of the Candidate

PREFACE
Practical work experience is the integral part of individual learning. An individual who is
learning managerial concepts has to undergo this practical experience for being a future
executive.
Master of Business Administration is a two-year programme that inserts
management knowledge in an individual to make that individual completely professional for
which practical experience is must.
BHIWANI TEXTILE MILL (GRASIM INDUSTRY). is the market
leader in Textile industry. BTM offered me a project on Working Capital
Management
to understand the current position through dates provided by them.

TABLE OF CONTENTS

 I n t r o d u c t i o n

 R e s e a r c h M e t h o d o l o g y

 G r a s i m I n d u s t r y L t d

 A n O v e r v i e w o f G r a s i m I n d u s t r y

 C h a r a c t e r s t i c s o f G r a s i m I n d u s t r y

 M i s s i o n

 V a l u e s

 M a n a g e m e n t S t r u c t u r e

 M a i n P r o d u c t s o f G r a s i m I n d u s t r y

 M a i n u n i t s o f G r a s i m I n d u s t r y
 B h i w a n i T e x t i l e M i l l

 A b o u t t h e M i l l

 S t r a t e g y & P h i l o s o p y o f C o m p a n y

 O b j e c t i v e

 S W O T A n a l y s i s o f B T M

 O r g a n i s a t i o n s t r u c t u r e o f f i n a n c e
 W h a t c a n w e d o

 W h a t y o u c a n e x p e c t
 W O R K I N G C A P I T A L A T A G L A N C E

ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of

any task would be, but incomplete without mentioning the people who made it possible,
whose constant guidance encouraging crowned my effort with success.

I would like to begin with a special note of gratitude and heartfelt thanks to Mr.

SURESH SARAF,(FINANCE MANAGER), who gave me the opportunity to complete my

summer project atBhiwani Textile Mill ,Bhiwani

(Haryana), A unit of GRASIM INDUSTRY.
I am extremely grateful to the GENERAL MANAGER
MR.S.K.SHARMA for his constant encouragement and valuable suggestions
throughout my summer training and project for his cooperation extended to me.
I am extremely indebted to him for sharing his valuable time, comments and

encouraging suggestions which guided and inspired me throughout the preparation of the

project.
I express my special thanks to Mr. LALIT DUTT (HR Manager)for
giving me their valuable opinions time to time.
At last but not the least, I am very thankful to all the staff members of
Finance department also.

DECLARATION
IRAJNI, student of M.B.A. III Semester of VAISH COLLEGE OF
ENGINEERING (Affiliated to M.D University) hereby declare that the Summer
Training Report on “WORKING CAPITAL MANAGEMENT”of BHIWANI TEXTILE MILL

(GRASIM INDUSTRY) Is my original work and has not been submitted by any other person.
I also declare that I have done my work sincerely and accurately even then if
any mistake or error had kept in it, I request the readers to point out these errors and guide
me to remove these errors in future.
Presentation Incharge
Signature of the Candidate

PREFACE
Practical work experience is the integral part of individual learning. An individual who is
learning managerial concepts has to undergo this practical experience for being a future
executive.
Master of Business Administration is a two-year programme that inserts
management knowledge in an individual to make that individual completely professional for
which practical experience is must.
BHIWANI TEXTILE MILL (GRASIM INDUSTRY). is the market
leader in Textile industry. BTM offered me a project on Working Capital
Management
to understand the current position through dates provided by them.

TABLE OF CONTENTS
 Introduction

 Research Methodology

 Grasim Industry Ltd

 An Overview of Grasim Industry

 Characterstics of Grasim Industry

 Mission

 Values

 Management Structure

 Main Products of Grasim Industry

 Main units of Grasim Industry

 Bhiwani Textile Mill

 About the Mill

 Strategy & Philosopy of Company

 Objective

 SWOT Analysis of BTM

 Organisation structure of finance

 What can we do

 What you can expect

 WORKING CAPITAL AT A GLANCE

 THEORTICAL ASPECTS OF WORKING CAPITAL MANAGEMANT

 WORKING CAPITAL MANAGEMENT

 RECEIVABLES MANAGEMENT
 INVENTROY MANAGEMENT

CASH MANAGEMENT
ANALYSIS OF WORKING CAPITAL MANAGEMENT

COMPARATIVE P&L ACCOUNT

TREND ANALYSIS

CASH FLOW ANALYSES

RATIO ANALYSIS

FINDINGS AND CONCLUSIONS

LIMITATIONS

BIBLIOGRAPHY
Show More

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