Working Capital Management

Working Capital Management
CHAPTER- 1
INTRODUCTION
SANSKRITHI SCHOOL OF BUSINESS Page 1

INTRODUCTION
Fund needed to term purpose for a purchase of raw materials, payments of wages and
other day-to-day expencess etc.. these fund are known as working capital. Simpale working
capital refers to the firm capital which is required for financing short term are current assets
such as cash. Marketable security, debitors and inventories working capital is also known as
revaluing or circulating capital or short-term capital.
MEANING OF FINANCE:
Finance is the science of funds management. Finance includes saving money and
often includes lending money. The field of finance deals with the concepts of time, money,
and risk and how they are interrelated. It also deals with how money is spent and budgeted.
Finance is related to money and money management. Incidentally, it is also related to the
inflow and outflow of funds. In view of the fact that it is the life blood of economic activities.
DEFINITION OF FINANCIAL MANAGEMENT:
According to GUTHMANN AND DOUGHAL: “business finance can broadly defined as the
activity concerned with planning ,raising,controlling and administering of funds used in the
business.”
According to BONNEVILE AND DEWEY: “finance consist in the raising,providing and
managing of all the money,capital or funds of any kinds to be used in connection with the
business.”
FINANCE FUNCTION:
It may be difficult to separate the finance functions from production, marketing and other
functions, but the functions themselves can be readily identified. Financial functions include:
 Long term asset mix or investment decisions
 Capital mix or financing decisions
 Profit allocation or dividend decisions.
 Short term asset mix or liquidity decisions

FINANCE GOALS:
The firm’s investment and financing decisions are unavoidable and continuous. In
order to make them rationally, the firm must have a goal. The following are the financial
goals.
 Profit maximization
 Wealth maximization
 Maximizing earnings per share
FINANCIAL MANAGEMENT:
Financial management mainly involves rising of funds and their effective utilization
with the objective of maximize shareholders wealth.
Financial management is an operational activity of a business that is responsible for

obtaining and effectively utilizing the funds necessary for efficient operations.
Financial management is concerned with the acquisition, financing and managing the assets
of the organizations.
Financial Management is the process of managing the financial resources, including

accounting and financial reporting, budgeting, collecting accounts receivable, risk
management, and insurance for a business. The financial management system for a small
business includes both how you are financing it as well as how you manage the money in the
business.

IMPORTANCE OF FINANCIAL MANAGEMENT
A financial is essential in any type economy whether it is a centrally planned

economy (Russia) in a capitalist set up (USA) or a mixed economy (INDIA). He plays a
crucial role in the utilization of resources in the most profitable manner. Colin Brocks
remarked – Bad production management and had sales management have slain their hundreds
but faulty finance has slain its thousand’s.
Financial management is of great significance even is the case of a non – profit

marking organization’s non profit marking organization may not be keen on earning profits.
But it needs cut down its expenditure and use of the funds in the most beneficial a sound
sense of financial management is to be cultivated by engineers, administrators, educationalist
bureaucrats and public at large in order stop to the wastage of capital resource.

OBJECTIVES OF THE STUDY
 Primary objective
To study on working capital management of super spinning mills ltd, hindupur
 Secondary objective
1) To effectiveness of working capital management.
2) To analysis strength and weakliness of the company.
3) To determine liquidity position of the company.
4) To analysis financial healthiness of working capital of the company.
5) To make suggestion working capital management of super spinning mills ltd.

NEED FOR THE STUDY
In order to maintain revenue from operations every firm needed certain amount of
current assets for example cash is in require to pay for expenses or to meet obligation for
service received etc. By a firm identical plan inventories are required to provide the link
between production and sales similarly accounts receivables generate when goods are sold on
credit. Needless to maintain cash, bank, debtors, bills receivables, closing stock (including
raw material work-in progress finished goods) prepayments certain other deposits and invest
which are temporary in nature represents current assets of a firm.
 The study has been conducted for gaining practical knowledge about working capital
management and activities of super spinning mills ltd.
 Working capital is considered to be “ super spinning mill ltd” of a business
organization. Such as failure of a depends on the management of firms working
capital.
 The study is an internal financing pattern of the working capital management. Which
deals with determaining size of working capital needs to achive certain longs term of
goals. Therfore an analysiss is to be made to know the reasons and find out the
measures to be taken to make it more successful.

SCOPE OF THE STUDY
Decision regarding working capital management is operating in nature and is not our
time decision, so the scope of the study is to identify the areas of the control to have better
over various components of working capital. An attempt is made to identify the optimum
working capital requirements for super spinning mill and how can they utilize the inventories,
cash and receivables in better way.
 The study is exclusively conducted for Super Spinning Mill Ltd., the study is conducted
on the basis of records of last 5 years i.e. 2012-13to 2015-16.
 The study focuses on the measurement of liquidity of working capital.
 Explain the principals of current assets, investement and financing.
 Focus on the proper mix of short term financing for current assets.
 Emphasis the need and goal of establishing a sound creadit policy.
 Suggest the needs of monitoring receivables.
 Highlights the need for holding cash.
 Discus the techniques of preparing cash budget.
 Focus on the management of cash collecting and disbursement.

LIMITATIONS OF THE STUDY
 It is based on the data supplied by the factory personnel.

 The data collected here is from the annual reports, which is already prepared.
 Since only 5 years data is used for the analysis the outcome may be generalized.
 Due to limitations of time, it was unable to go for a depth study into the subject.
 There is no separate department for planning working capital in Super Spinning Mill Ltd.
 The topic working capital management is itself a very vast topic yet very important also.
Due to time restrains it was not possible to study in depth in get knowledge what practices
are fallowed at super spinning mill ltd.
 Many facts and data are such that they are not to be disclosed because of the confidential
nature of the same.
 Since the financial matters are sensitive in nature the same could not acquire easily.
 The study is restricted to only the four-year data of super spinning mills ltd.,

RESEARCH METHODOLOGIES
The study has been conducted in the organization to examine working capital
Management in order to enquire into the issue like liquidity, timelines and material
Management. The study has been undertaken in the accounting and finance departments of
the organization.
Secondary data is collected from the annual reports of super spinning mills limited during
for the last 5 years. and various other reports like company’s mangers journals published
books and journals at wed sites.
 A company annual report
 Reference books
 Jouranals
 Web sites
 Sample design: I have been used judgement method in non-random sampling.
because hall will not be good respondance to answer my questions. I have selected
those who kmow about working capital., debtors, creditors, stock etc.sample size is 50
in different super spinning mill for different department.
 Data collection: Ihave been collected data through both primary and secondary.
Primary data from questionnaire, observation and personal interview with CFO,
executive and senior employees. Secondary data from annual reports and company
websites.
 Sources of dataThere were mainly two major sources of data namely;
1. Primary data: primary data has been obtained through personal discussion with
managers and senior officials of the organization, observation and questionnaire both
open ended and closed ended.
2. Secondary data: secondary data has been obtained from published reports like the
annual reports of the company. Balanced sheet, and profit and loss account Wed sites
record such as files, reports maintained by the company.
 Period of study: I have done this research activity in two months.

CHAPTER- 2
INDUSTRY PROFILE
COMPANY PROFILE

INDUSTRY PROFILE
The textile industry in India is one of the oldest industries. It will be difficult to cover
the entire scenario of the growth of textile industry in such a short span of time. Garment
industries form an integral and important part of textile.
Garment industries established in early 70’s with the aim of encouraging the growth
of garment industries to boost up the export. Indian garments have taken many strides to
develop garment industries as small-scale industry units. Small-scale industries play vital role
by helping large garment industry to tap local resources and they are by ancillary to these
industries. The readymade garment industry has emerged as a dynamic and booming
industry. This trade has socio and economic importance as it is essentially a labours intensive
industry and has the potential to generate wide spread employment particularly of rural and
backward areas. India being rich in cotton base and HR required a stable and strong
foundation for optimum utilization of it. Garment industry provides a base for utilization of
cotton and HR fully soon garment industries were formulated to boost up exports and make a
mark in international market.
It is a young and thrust industry having made its presence felt only from last two
decades. The rapid growth of this industry in the last few years revealed the massive export
potential. The entrepreneurs are setting up new factories and trying to employ more and more
professionals to take care of the senior positions of the organization. Garment trades needs to
have more technically qualified and experienced persons to take care of the production and
quality at the shop floors. Practice makes man perfect; like that managers at the production
should be capable of handling day-to-day problems, which may crop without his knowledge
in the process
PRESENT STATUS OF TEXTILE INDUSTRY:
The cotton textile industry is going through a severe Crisis following a stump in exports
of cotton textiles, yarn and garments to the ASEAN and other countries. Yarn exports
particulars have been severely affected by the development in the ASEAN Region and there
is yet no indication of a recovery in these exports.
The performance in the first six months of 1998 has been highly discouraging, as
shipments of yarn decline by 50Million KGs as compared to an increased 273 Million KGs in
the corresponding period in 1997. The trends in subsequent months also have not significant
hanged and the value of exports in the whole of 1998 may be much lower than in 1997.

The deceleration process started in 1997 as the impact of the ASEAN Crisis was felt
towards the end of the year. With accounting, earlier rise in exports of fabrics, yarn,
garments and other items, and steady growth in production did not create serious problems in
marketing, though the composite and spinning mills using out-dated machinery were
suffering losses due to wide variation in cotton prices, delayed purchased and inadequate
working capital.
The output of all sectors was higher at 27,891 millions sq. meters in April – February
1998 against 26,317 millions Sq.mts. in the corresponding period in 1996-97. The power
loom and handloom sector, the former particularly has been taking advantages of the increase
in domestic demand for fabrics.
Southern Mill’s Sad Plight:
The spinning mills in the southern region have been complaining that they are not able to
ensure reasonable margins. This is because the prices of cotton are higher than that of the
counter parts in other regions while the finished products have to be sent to leading centers in
Maharastra, Gujarat and elsewhere. It is not therefore expected that the industry will have
smooth sailing in the near future
The Chairman of the Indian Cotton Mills Federation (ICMF) has taken a rather grim
view of the prevailing situation. At the actual meeting of ICMF grim view of the pedaling
situation. At the actual meeting of ICMF held in September, he stated that the number of
mills remaining closed was as high as 257 in July 1998 against 206 a year ago and that the
increase was highest in recent years. Several composite and Spinning mills in Coimbatore
and adjoining areas in Tamil Nadu has also suspended their operations and the Manchester of
South in now presenting a sorry spectacle while it was bustling with activity not long ago.
Excess Capacity builds up:
The output of fabrics and yarn was not however, adversely affected in 1997-98 as
stated above, because of creation of excess capacity. Actually 6.4 million yarn spindles and
20,000 rotors were remaining permanently idle in closed mills and another 5 millions could
set-up output easily as the modernized and newly established export-oriented units have been
utilizing their capacity to the maximum extend. The expansion of capacities had been taking
place at an unprecedented rate. In the past three years alone, 4.33 million spindles and 1.32
lakh rotors were installed.
The power-loom sector accounts for around 72% of the total cloth production and it
has been growing over a period. Due to the fact that number of Power-looms installed has

increased to 15.23 lakh units in 1996-97 from 10.44 Lakh units in 1990 and there is a
concentration of Power – loom in Maharastra, Gujarat, Andhra Pradesh and in the Punjab
region.
Dominance of Power Loom Sector:
The power loom management has a distinct advantage over the composite mills in the
organized sector in terms of outlay, overheads and working capital requirements. The
handloom sector also has been increasing it share in total production, deposit complaints that
power loom weavers have been rendering ineffective the reservation of quotas exclusive for
the handloom sector for turning out specified products. It share in total production in 55%
and it was 6990 million Sq. mts in 1997-98 against 6441 million Sq.mts in 1996-97.
Sizeable Export Earnings:
It was estimated that there were 30 Lakh household weavers and about 124 Lakh
weavers without owning looms and special attention was being provided to the weaving of
furnishing, bed sheets and other items fancied by sophisticated consumers in Western Europe
and elsewhere. The foreign exchange earnings secured through exports of these items were
Rs.1, 491.32 Crores in 1994-95 with steady growth in exports of cotton textiles, made ups,
yarn and garments the foreign exchange earnings exceed $ 10 Billion in 1996-97.
FUTURE SCENARIO OF THE INDIAN TEXTILE INDUSTRY:
Information revolution promises to bring the world closer to cohesion. In the
emerging face to fast moving information technology transfer is bound to take place at a
higher speed. As the international boarders blur supply chain management and information
technology take a crucial role in apparel manufacturing. Global partners in the clothing
supply chain are exchanging information electronically thus the needs for Indian clothing
industry to spruce up upcoming technologies for mass customization such as three
dimensional non-constant body measurements and digital printing ought to be considered
thoroughly implement fast. This mass customization shall be successful for meeting
unpredictable demand levels for luxury goods uncertain customers wants and for
heterogeneous demand. It is to be noted that mass customization is different from mass
production.
The future requires generation of real value service for the customer’s comprehensive
study of multifaceted supply chain and global. Integration by supply system in a cost and
time sufficient manner. The economic scene of its trade partners and us need to be eyed
carefully if India is to survive in the faster and cut-throat competition in the 21st century.

COMPANY PROFILE
SUPER SPINNING MILLS PRIVATE LIMITED – B UNIT
Brief history of SS mills
The story of super spinning mills is one of the continuing sagas of success a story of
formation, promoting and establishment.
The company was promoted and established in the year 1964 by well known industrialist and
philanthropist, Sri. L.G. Balakrishnan at Kirikera in the backward area of Anantapur district.
The company chairs man is Sri. L.G. Ramamurthy and managing director is Sri R. Sumanth.
The successful functioning of their unit gave rise to other units namely Super-B at Kotunur
in year 1983 and Super – C an export oriented – unit at D- Gudalur in Tamilnadu in Year
1992, the total capacity of the group on date is 12,000 spindles and an assets Rs. 640 million
per annum and the total labour force around 2300. Sri L.G. Balakrishnan and Brother’s Ltd.,
ELgi equipments Ltd, Elgi trade India Ltd., Elgi Rolling Mills Ltd., Elrgi and Co Pvt, Ltd.,
Rayalaseema Technologies Ltd., etc.,
The project implementation of these units have generated direct employment to nearly
3000 families besides indirect employment to another thousand. This had fulfilled the
objective of the government to certain extent in promoting the company in this area.
The company. Super-A, commenced its commercial productions in April 1964 with
12000 spindles by 2000. the paid up capital of the company is Rs 300 Lakh the company had
record steady the growth in its productivity as well as quality and its profitability over the
years since its inception. The company has been following a steady dividend policy and

never skipped the dividend since 1965According to the survey conducted by the South India
textile research association (SITRA) the company is one among the best 10 mills of couth in
respect to quality and productivity. The company is using cotton as raw material and
producing. The company is using as raw material and producing yarn in different counts Viz
60s,80,90 etc the company’s finished products are being sold in the areas of Tirupur Kolkata,
Varanasi, New Delhi Lehalharangi, Mangalagiri etc. through brokers and also the company is
exporting 37% of its products to various countries Viz Bangaladesh, Japan, Singapore, Italy
Etc. the companies’ products are used in manufacturing sarees, Dhoties, Banians, T-Shirts
etc and it is proud to say that the company is fulfilling one of the basic needs of human being
that is clothing. The company’s total turnover is around 760 Millions. The company is
providing latest machinery. Equipment, testing equipment and also keeping the plant and the
machinery updated from the to time. In order to provide sound up-keeping conditions, the
company has provided humidification to the entire plant. Also the company has introduced
the waste evaluation system I the carding and preparatory department.
The company has sound industrial relations. The company has recently concluded a
settlement with its workers on wages and work assignments linked to productively for 5
years. Also the company has arrived at a settlement on bonus and Effie bonus for 5 years
linked to productively. The company is paying very high bonus that is 36.35% and 28%.
Also the company has organized several community development and welfare program viz.
 Family planning camp was organized and 300 operations were done as an incentive the
company has given one polyester saree and blues worth Rs.200 To all the operated
people.
 Organized one week eye operation camp at LRG Vidyalayam, Kirikera.
 Donated submersible water pumps to the people of housing board colony, sadlapalli
village.
 Constructed drinking water tank at Nakkalapalli.
In achieving the tremendous financial soundness, the company never neglects its
responsibility of well being of its employees and the community welfare. The company
is paying highest wages and bonus in all textile mill in Andhra Pradesh.
The company is providing number of welfare amenities for the development of its
workers such as:
1. Interest-free own your house scheme.
2. Quarters for 20% of its employees.

3. Educational benefits for children.

4. Self-employed schemes etc.
Since this area is highly backward, the company has extended its help by way
of donations to the development of educational land, medical facilities in this area a few are.
 Donations for construction of Z.P.High school at Basavanahalli.
 Construction of science block in the same school.
 Constructed primary school at Mittameedapalli.
 Running English medium school for the benefits of rural children.
 Construction of auditorium in A.P. Residential school, sevamandir.
 Constructed a block in governmental hospital, Hindupur.
 Donated for construction of a free dispensary by the all India medical association.
Quality policy of the company:
Quality leading to customer satisfaction shall be top priority. This shall be achieved by
complying to the requirements of the quality management system and continually improve its
effectiveness. Employees shall be trained and motivated to enhance the quality of their work,
competence and skills.
Administrative set up:
The company has total number of employees of 950 out of which 64 are Staff and rests
of the people are workmen. The firm is headed by General Manager.
Super-B an over view:
Chief promoter Sri L.G. Balakrishnan
Chairman Sri L.G. Ramamurthy
Managing Director and Vice Sri R. Sumanth
Chairman
Date of establishment of the Mill 1-4-1964
Capacity of spindles 59712 (appox)
Raw material cotton and viscose
Major counts Hosiery – 50s, 60s, 80s, 2/60s
Warp -60s,80s,90s,2/56s,2/80s.
Area of the mill 13 Acres
Financial products produced Banians,T-shirts,sarees etc.,
Sales local Tirpur, Kolkata, Mumbai,

Varanasi, Ichakarangi, Tenali,

Mangalagiri, Chirala.
Exports England, Singapore, Malaysia,
Italy, Switzerland, Japan and
Bangladesh.
No. of employees 886 (Blue colour)
No. of staff 64 (white colour )
Awards:
According to the survey conducted by the South India Textile Research
association the company is one among the best 10 mills of South India in respect of quality
land productivity in 1996 out of 270 mills the company’s three units productivity
performance is ranked as follows.
A Unit -21st Rank
B Units – 10th Rank
C Unit – 6th Rank
The company has also won so many awards at a national level for its quality and
productivity.
Objectives of the Company
1. Their efforts are committed towards fulfilling their quality, requirements of customer
exceptions and needs
2. Enhancing the awareness of employees towards quality thought systematic training,
development and motivation.
3. The policy is understood implementation and maintained through display boards
training classes, videocassettes and policy.
Export Performance:
The company has identified new markets during the year and thrust has been given
more on direct experts. The total exports during the year were Rs. 7625 lakhs registered and
increasing of 38% over the last year Rs 5540 lakhs. The company is striving to improve the
exports for achieving better results in the coming year.
Direct exports consisted of Rs. 5443 lakhs as against Rs. 4045 lakhs registering a growth of
35% the foreign exchange outflow utilized during the year mainly for modification was Rs.
943 lakhs and the net foreign exchange earnings by the company is Rs.4500 lakhs.

Conservation of energy:
The power situation in Andhra Pradesh has been critical. Frequent, power
interruption on daily basis and increased power tariff rates affected the machine utilization.
Due to this energy saving measures were implemented in different areas excessively by
conducting result-oriented energy consultants suggestions offered by the team viz., provisions
of plant one touch fitting in all the pneumatic lines of machines modification of plant house
designs, provision of PLC based panels, etc were already implemented and other suggestions
are at different stages of progress which is expected to save the energy consumption
considerably. In addition two second – hand wind mill have also been acquired during the
year, which is expected lower the further. Thrust is being to explore further possibility in
these vital areas of energy consumption.
Research and Development:
Efforts are being made continuously for improvement up-gradation of the
manufacturing process for improving quality and productivity, conservation of energy,
centralized waste collection system by the R and D department. Significant measures taken
viz., modification of ring frames lift and ring dial combination which is expected to yield
10% higher production, provision of XBZ attachments in carding to improve the realization
about 0.5to 19% traits with bottom roller cleaners in ring frames and speed to improve the
quality etc. efforts are continuing to enlarge the scope of R and D facility to as many areas as
possible revenue expenditure incurred on.Research and Development amounted to Rs.
127019.
Technology absorption, adaptation and innovation:
The thrust areas have been in improving the quality of the products and
increasing productivity through cost effective programmes and value engineering technique.
The company commenced the re-engineering process in the organization to
fundamentally rethink and redesign manufacturing process to achieve dramatic improvement
is critical areas of performance such as quality, cost service and speed. This will enable the
company to compete more efficiently in the competitive global environment.
During the year, state of art machinery namely either unfrock A-11 and unchain
B-11 RSSB D30 draw frames, contamination cleaners etc., were included in our
manufacturing process to produce yarns meeting user 5 to 25% standards. In addition, high-
tech gassing machine, micro 2000 yarn cleaners were also added on our post spinning process
to offer value added yarns meant for export pur.

Shift timings:
General shift : 8-00 A.M. To 5-00 P.M.
I shift: 8-00 A.M. To 4-30 P.M.
II shift: 4-30 P.M. To 1-30 A.M.
III shift: 1-30 A.M. To 8-00 A.M
With a break of one hour for lunch in each shift.
Communication:
All the staff shall be attentive in the process of communication. The communication
must be passed to all the concerned as quickly as possible there should not be any hesitation
in giving information at any level subject to the communication.
Internal communication:
E-mail, Telephone facility is available. Every table has been provided with an
intercom. The operator will connect all the incoming calls to the respective table directly.
There are also be used for communicating one table to another. These facilities can be used
for personal needs after obtaining superiors permission on chargeable basis.
Office equipment:
Photocopy can be used with the permission of administrative office. Computers are
provided to make the work easier.
Every paper has its right place, employees are advised to complete filling Immediately.
Stationery is provided for each and every table whatever they need for their work.
Employees are advised to use A4 size paper as standard practice. It is advised to avoid
damage/wastage by improper handling.
Visitors:
It is advised to be courteous to visitors. But dispose them soon after meeting is over.
Meeting them at reception lounge is recommended. It is advised to meet the visitors only
after they have taken the appointment.
Security:
Mill security is on contract basis. Round the clock security arrangements are
provided for the mill and the quarters.
Uniform and identity cards:
All the staff wears uniforms as prescribed. The company supplies cloth
Material for 2 set of uniform once in 2 years. The company also pays the stitching charge as
may be decided by the management.

 Uniform should be maintained neat and clean.

 Female staff should attend their work wearing sarees and blouse provide by company.
 Identity cards are given to each staff.
In case of replacement the cost should be borne by the individual concerned all the
staff always keep secret, confidential, and prevent the disclosures of divulgence of all
information, knowledge, know-how experience, date documents, plans, report statements,
logs records, correspondence discussions, contracts, drawings, photo prints, copies,
methods, process, layout of machinery finance, qualities etc., of the company that many
pass through or come to the employees knowledge.
Mill Etiquette:
 The entire mill premises are deemed as “ No Smoking Zone “
 Avoid entering the cabins when a visitor is present or a meeting is in progress unless
it is absolutely necessary.
 Avoid standing on the arises and discuss with colleagues or visitors.
 Ensure that discussions or talking on telephone do not cause disturbance to others.
 Turn off lights computers, etc, whenever they leave work place.
 Develop the practice of keeping a daily work plan sheet. Monitor your progress as
per work plan an manage time well.
 Finally assume yourself as the customer for your work, the review your work so that
you are able to give better satisfaction to your customer.
Departments in Super-B:
The following are various departments of super-B
 Personal department.
 Finance department
 Production department.
 Purchase department.
Personal department:
Super Spinning Mills Ltd., A-unit has a separate personal department
functioning under the head of Mr. K. Sudhakar. The main job of this department is to recruit,
place competent and loyal workers in the enterprise. It also has the job of developing,
planning, motivating and maintain the same.
All employees shall be systematically trained, developed and motivated to
continuously improve the quality of their work.

Function of the personal department:

The head of the personal department analyze and determine the number of kinds of
people required to run the organization. It is assed only by this department and it is the most
important function.
The personal department functions are at the prior level because only this
department analyze the person and appraise their work. Their performance is reviewed
periodically, their skills, knowledge, attitude and capacity are analyzed in detailed manner by
making frequent enquires regarding them. This can be used for confirming the service of an
employee and confirmation of employment. Determining all these actives they can be
awarded with increments or higher salary if production etc.
Recruitment:
The policy of this company is ‘RIGHT MEN FOR RIGHT JOB ‘.
The recruitment is made under the following factors:
Job description
Type of person – qualification, experience and other skills
Go in for advertisement
Recruitment process:
a. To collect information regarding candidates by advertisement.
b. Screening the application.
c. Short listing the candidates.
d. Interview date and time.
The candidates are give prior intimation regarding time and date of interview.
The methods used for interviewing are as follows.
1. Written test, Personal interview, Aptitude test, Psychological
Test.
2. Job test for technical job.
3. Confirmation orally or by writing.
4. Appointment order.
Joining:
After joining the employees must be given induction and orientation program me.
Induction:
Making an employee to know about the company, introducing the member of the
organization, informing the candidates of employment (Working time), how to conduct
himself, leave facilities, welfare etc.,
Training:
The company provides 6 months training to employees to acquire desired level of
skills to further expand their knowledge to shoulder more responsibility.
Time keep in:
Time keeping means controlling and maintaining for entry and exit of the members
of the company. This is by maintenance of attendance, especially for staff and workmen by

taken system or card system. In case of late coming or early going, one has to get gate pass
or permission slip.
Promotion:
Generally promotion means an advancement to better job which involves greater
responsibilities and more knowledge and skills, which carries greater prestige and finally
higher salary. In Super Spinning Mills ltd., they follow a good policy which carries seniority
and competence as basis of promotion.
Welfare of staff:
The welfare activity of an organization is carried out to take care of employees and
also his family. The super spinning mills has provided all welfare tit to staff within the
premises, which gives the basic necessity of food rice is charged at a very reduced rate on no
profit no loss basis. Periodic medical checkup is to be undertaken by every employee of fee
of cost.
Recreational Facilities:
Recreation helps to reduce tension of work and to relax for sometime. Tea is
provided twice a day to every employee at the table. This avoids idle time and makes them
fresh at work. Club also provided to the employees.
Safety Measures:
To promote safe working conditions in the work area, safe work methods are
conveyed to the employees during training program me and during work. Safety device are
provided to suit working environment to protect the health of employees.
Benefit schemes:
Statutory benefits are provided as per the acts like provident fund, gratuity fund,
E.S.I., maternity benefit etc., apart from statutory benefits the employees are provided with
facilities like super annotation, group personnal, accident policy, medical expenses,
reimbursement etc.
Fair price shop:
Fair price shop is provided to the staff within the premises which gives the necessity
commodities, prices are charged at reasonable rates on no-profit and no-loss basis.
TYPICAL ERRORS TO BE CONTROLLED IN A PROCESS
Errors and Data Relating to Attitude and Behavior Delivery and Cost
People Courtesy Missed dead lines
Tools Reliability Over budget costs

Methods Trust worthiness Untimed delivery
Procedures Efficiency
Mechanisms Performance
PROCESS ERROR MINIMISATION TO IMPROVE CUSTOMER SATISFACTION

Product and service Management Error Errors from other sources
Materials Planning Supplies
Packages Organizing Vendors
Parts Controlling Controls
Information Directing External Environment
Allocating Resources

Techniques for problem solving:

Brain storming : to identify problem and or solution
Cause and effect diagram : to identify all root problems
Flow chart : to explain process sequence directly
Parcto diagram : to priorities the problem or causes When satisfied data
Histogram : to graphically represent and study
Graphs : to show the friend in performance
Pie chart : to pictorially show the contribution
of individual items to the total
Scatter diagram : to indicate the extent of inter Interdependency factors
Control charts : to study the process tends by on-line
Plotting and take quick corrective
Steps when find necessary.
Finishing process objectives:
 Zero customer complaints
 Adherence proportionate dispatches
 Maintain target quality levels
 Maintain good house-keep
VISION, MISSION AND QUALITY POLICY :
Vision :Our commitment to total customer satisfaction is by consistently provide,
innovative and quality products through team efforts.
Mission : Provide world-class products and services in a competitive environment
resulting in effort.
 Continuous customer satisfaction through scientific selection of raw material and
other inputs
 Product research and development
 Continuous improvement of process and up gradation of skills and technology
 Spiritual values
 Job enrichment
 Training

SWOT ANALYSIS:
SWOT analysis refers to the analyzing the strength, weakness, opportunity and threat
of the organization (Company).
SWOT is a compound of two factors namely external factors and internal factors.
Strength and weakness are the internal factor, which can be controlled by the technical and
personnel departments. Opportunity and threat are the external factors, which cannot be
controlled by the company. External factors may include political factors, Socio-Cultural
factors, Technical factors, demography, Environmental factors etc
Strengths:
 The most competitive and reasonable price.
 Products quality guarantee.
 Prompt and superior services.
 Punctual delivery.
Weakness:
 High cost establishment of plants.

 Transportation cost is also high.
 Poor advertisement and sales.
Opportunity:
 The finished product of Super Spinning Mill Ltd is the raw material for many
textile and garment industries. So, the spinning mills have almost demand for its
product. There are still better opportunities available to expand our network
system.
 There is a scope for expansion of the plants in new places.
 Scope for export trade and globalization.
 Attractive investment opportunity.
Threat:
 Tough competition in this sector since so many mills raised after abolition of
quota system, MFA (Multiform agreement) from January, 2012on-wards.
 Too many competitions in the same model of business.
 Lack of water facilities due to drought. There is stiff competition in the market.
This is mainly due to multinational companies which have all the latest
technologies.

CHAPTER - 3
RESEARCH METHODOLOGOY

REVIEW OF LITERATURE
Introduction:
Working Capital Management is one of the most important aspects of financial
management. It forms a major function of the finance manager and accountant.
Meaning and Definition:
Working capital management or administration of all aspects of working capital, which
manage the firm’s current assets and current liabilities in such a way that a satisfactory level
of working capital is maintained.
According to Smith “Working Capital Management is concerned with the problems that
arise in attempting to manage the current assets liabilities: and the inter-relationship that
exists between them.
DETERMINANTS OF WORKING CAPITAL OR FACTORS AFFECTING
The Working Capital requirement of a firm affected by a number of factors. The various
factors, which affect the working capital requirement of a concern, are as follows.
Nature of Business:
The working capital requirements of enterprises are related to the conduct of business.
Public utilities have certain features which have a bearing on their working capital needs.
They do not maintain big inventories arid have, therefore, probably the least requirement of
working capital. On the other hand trading and manufacturing concern required large
amount of working capital to maintain a sufficient amount of cash, inventories and book
debts.
Production Cycle:
The term production or manufacturing cycle refers to the time involved in the
manufacturing of goods. It covers the time span between the procurement of raw materials
and completion pf the manufacturing process leading to the production of goods. In other
words, there is some time gap before raw material becomes finished goods. Therefore the
longer the time span, the larger will be the working capital needed and vice versa.

Business Cycle:
The business fluctuations influence the size of working capital mainly during upward
phase when boom conditions prevail, the need for working capital is likely to grow to cover
the lag between increased sales and receipt of cash as well as invest in plant and machinery to
meet the increased demand. The downswing an opposite effect on the level of working
capital requirement.
Production Policy:
A better alternative is a steady production policy independent of shifts in demand for
the finished goods. This means a large accumulation of finished goods during the off-season
and their abrupt sales during the peak season. The progressive accumulation of stock
naturally requires an increasing amount of working capital, which remains tied up with time.
For Example: A manufacturer of ceiling fans may maintain a steady production throughout
the year rather than intensity in the production activity during the peak business seasons such
a production policy may dampen the fluctuation in working capital requirements.
Credit Policy:
The Credit policy relating to sales and purchases also affects the working capital.
The credit policy influences the requirements of working capital in two ways:
Through credit terms granted by the firm to its customers/buyers of goods. Credit
terms available to the firm from its creditors.
A firm with more credit sales and cash purchase required high working capital than a firm
having more credit purchase and cash sales.
Scale of Production:
A concern carrying on activities on a small scale needs less working capital. On the
other hand a concern undertaking activities on a large scale needs large amount of working
capital.
Growth and Expansion of Business:
The growth and expansion of business also affect the working capital requirement.
When there is growth and expansion in the business of a firm the working capital needs of the
firm will also increase.

Operating Efficiency
The operating efficiency of the management is most important determinant of the
level of working capital. A firm enjoying operating efficiency can eliminate wastage and use
its resources efficiently and thereby reduce its working capital needs considerably.
Operating Cycle:
Operating cycle refers to the length of time necessary to complete the following cycle of
events. :
 Conversion of cash into inventory
 Conversion of inventory into receivable
 Conversion of receivable into cash
If the operating cycle is lengthy than the working capital requirement will be more on the
other hand, if the operating cycle is shorter then the working capital requirement will be less.
Sources of working capital :
Among the various sources available for financing working capital needs, Finance
manger has to select the best suitable source depending on working capital need of the
company.
Long-term Sources:
 By issue of Shares
 By issue of Debentures
 Ploughing back of profits
 Long-term loan
Short-term Sources
They are classified into:
INTERNAL EXTERNAL
Withdrawing the depreciation fund Bank
Using the resourcement for taxation Trade credit
Postponement of payment accrued expenses Bills of Exchange
Public deposits (Short-term) Govt. assistance

WORKING CAPITAL MANAGEMENT

Every company needs two types of funds they are:
1. Long term funds (required to create production facilities through purchase of fixed assets
such as plant and machinery, land and building, furniture etc., Investments in these assets are
called fixed capital.
2. Short term funds- these are required for short term purposed for the purchase of raw
materials, payments of wages and other day today expenses etc., these funds are known as
working capital.
Working capital refers to that part of the company’s capital, which is required for
investment, made in short term or current assets for e.g., cash, debtors, marketable securities
and inventories. Funds then invested in these types of current assets keep revolving fast and
being constantly connected into cash and again this cash flow out in exchange for other
current assets. Therefore it is also called as circulating or short-term capital.
A) CONCEPTS OF WORKING CAPITAL

There are two types of working capital. They are:
1) Gross Working Capital
2) Net Working Capital
1. Gross working capital:

Refers to the firm’s investment in current assets. Current assets are the assets, which can
be concerned into and within an accounting year (or operating cycle) and include cash, short-
term securities, debtors (Accounts receivables or book debts) bills receivable and stock
(Inventory).
Gross working capital points to the arranging of funds to finance current assets.
2. Net working capital:

Refers to the difference between current assets and current liabilities. Current
liabilities are those claims of outsiders, which are expected to mature for payment within
accounting years and include creditors (accounts payable), bills payable and outstanding
expenses. Net working capital can be positive or negative. A positive networking capital
will arise when current assets, exceed current liabilities are in excess of current assets.

B) THE NEED OR OBJECTIVES OF WORKING CAPITAL

The need for working capital to run day-to-day business activities cannot be
overemphasized. We will hardly find a business firm, which doesn’t require any amount of
working capital. Indeed, firms differ in their requirements of the working capital. We know
that a firm should aim at maximizing the wealth of its shareholders.
In it’s Endeavor to do so. A firm should earn sufficient return from its operations.
Earning a steady amount of profit required successful sale activity. The firm has to invest
enough funds in current assets for cash instantaneously. There is always an operation cycle
involved in the conversion of sales into cash.
The various need of working capital is as follows
 To pay wages and salary.
 It helps to the purchase of raw materials, components and spares.
 It helps to incur day-to-day expenses and overhead cost such as fuel, power
and office expenses etc.
 It also to meet the selling cost as packing, advertising etc.
 It provides credit facilities to the customer
 It helps to maintain the inventories of raw material, working progress, stores
and spares and finished stock.
C) PROBLEMS ASSOCIATED WITH EXCESS AND INADEQUATE
WORKING CAPITAL
Dangers of excess working capital
 It results in unnecessary accumulation of inventories. Thus the changes of
inventory mishandling, the losses increase.
 It is an indication of defective credit policy and stock collection period.
 Excessive working capital makes management complacement, which
degenerates into managerial efficiency.
 Tendencies of accumulating to make speculative profits grow. This may tend
to make dividend policy liberal and difficult to cope with in future when the
firm is unable to make speculative profits.

Dangers of inadequate working capital

 It stagnates growth. It becomes difficult to undertake profitable projects due to non-
availability of the working capital funds.
 It becomes difficult to implement operating plans and achieve the firms profit target.
 Operating inefficiencies creep in when it becomes difficulty event to meet day-to-day
commitments.
 Fixed assets are not efficiently utilized for the working of capital funds. Thus, the rate
of return on investment slumps.
 Paucity of working capital funds renders the firm unable to avail of attractive credit
opportunities etc.
 The firm losses its reputation when it is not in position to turnover short-term
obligations.
The various need of working capital is as follow
 To pay wages and salary.
 It helps to the purchase of material, components and spares.
 It helps to incur day-to-day expenses and overhead costs such as fuel, power office
expenses etc.
 It helps to meet the selling cost as packing, advertising etc.
 It provides credit facilities to the customer.
 It helps to maintain the inventories of raw material, work-in-progress, to stores and
spares and finished stock.
D) MANAGEMENT OF WORKING CAPITAL
Generally working capital refers to the excess of current assets over current liabilities.
Management of working capital therefore is concerned with the problems that arise in
attempting to manager the current assets, the current liabilities and the inter relationship that
exists between them. It refers to all aspects of administration of both current assets and
current liabilities.
The basic goal of working capital management is to manage the current assets and current
liabilities of a firm in such a way that a satisfactory level of working capital is maintained.
i.e., it is neither inadequate for an organization or a company. The policies or working capital
management of a firm have a great on its profitability, liquidity and structural health of the
organization.
In this context the working capital management is three dimensional in nature.

 Dimension I is concerned with the formulation of policies regard to profitability, risk

and liquidity.
 Dimension II is concerned with the decision about the composition and level of
current assets.
 Dimension III is concerned with the decision about composition and levels of current
liabilities.
Permanent or fixed working capital;
The need for current assets arises because of the operating cycle. The operating
cycle is a continuous process and therefore, the need for the current assets is felt constantly.
But the magnitude of current assets needed is not always the same, it increases over time.
However there is always a minimum level of current assets, which is continuously required
by the firm to carry on its business operations. This minimum level of current assets is
referred to as permanent or fixed working capital.
Variable or temporary working capital:
create Depending upon the changes in production and sales, the need for working
capital over and above permanent working capital, will have to be maintained to support the
peak proceeds of sale and investment in receive may also increase during such periods. On
the other had, investment in raw material, working in progress and finished goods will fall if
the market is slack.
The extra working capital needed to support the changing production and sales
activities is called fluctuating, or variable or temporary working capital. The firm to meet
liquidity measurement that will last only temporarily s temporary working capital..
Long term financing:
Loans from financial institution: the option is normally ruled out, because financial
institutions do not provide finance for working capital requirements. Further this facility is
not available to all companies this option is not practical.
Floating of debentures:
The profitability of a successful floating of debentures seems to be rather merging. In
Indian capital market, floating of debentures has still to gain popularly debentures issues of
companies in private sector not associated with certain reputed groups generally failed to
attract investors to invest their funds in companies. In this context the mode of raising funds
by issuing convertible debenture / bonds is also gaining.

Accepting public deposits:

The issue of tapping public deposits is directly related to the image of the company
seeking to invite private deposits.
Issues of shares :
With a view to financing additional working capital needs, issue of additional equity
share could be considered. Many Indian Companies have still to go ahead to command
respect of investors in this context low profit margin as well as lack of knowledge about
company make the success of a capital issue very dim.
Raising funds by internal financing :
Raising funds from operational profit poses problems for many companies, because
prices of their end products are controlled and do not permit companies to earn profit
sufficient requirements to finance additional working assets, still a largely feasible solution
lies in increase profitability through cost control and cost reduction measures managing the
cash operating cycle, rationalizing inventory stock and so on.
Basic objective of working capital management:
The basic objectives of working capital management are to manage the firm’s
working capital (i.e., current assets and current liabilities) in such a way that a satisfactory
level of working capital (i.e., neither excessive nor inadequate working capital) is maintained.
This is necessary because, if the working capital is excessive or large, the liquidity
position adversely affected, as funds would not doubt, improve, but its profitability would be
adversely affected, as funds would remain idle. Conversely if the working capital is too
small, the profitability of the firm may improve, but the liquidity position of the firm would
be adversely affected.
Processes or steps involved in working capital management:
Working capital management involved two possesses, they are:
Forecasting the amount of working capital. Determining the source of working capital
means estimating the amount of working capital needed by the firm. The amount of working
capital needed by a firm has to be estimated by taking into consideration several factors, such
as the nature of business, scale of operation, production policies, length of manufacturing
process rapidity of turnover, seasonal fluctuation, period of credit allowed to debtors, period
of credit availed of from creditors etc.

Determining the sources of working capital

Determining the sources of working capital means determining or deciding the
sources from which the working capital requirement of a firm should be meet. The working
capital requirement of a firm should be meeting from both long-term and short-term sources
of fund.
It will be appropriate to finance or meet the fixed of permanent parts of the working
capital requirements from long-term sources and the variable or fluctuating part of the
working capital from short-term sources.
MEANING OF RATIO
A ratio is defined as the indicated quotient of two mathematical expressions and as the
relationship between two of more things. In financial analysis, a ratio is used as an index or
yardstick for evaluating the financial position and performance of firm.
. A single ratio itself does not indicate favorable or unfavorable condition. It should
be compared with some standard. Standards of comparison may consist of
 Ratio calculated from the past financial statements of the same firm.
 Ratio developed using the projected or preformed financial statement of the same
firm.
 Ratios of some selected firms, especially the most progressive and successful, at the
same point of time.
 Ratios of the industry to which the firm belongs. The easiest way to evaluate the
performance of a firm is to compare its present ratio’s with the past ratios.
TYPES OF RATIOS:
Ratio can be grouped into various classes according to financial activity or function to
be evaluated. The parties interested in financial analysis are short & long term creditors,
owners & management. Short – term creditor’s main interest is in the liquidity position or the
short-term solvency of the firm. Long term creditors on the other hand are more interested in
the long term solvency and profitability of the firm. Management is interested in evaluating
every aspect if the firm performance. They have to protect the interests of all parties and see
that the firm grows profitability. In view of the requirement of the various users of ratios, the
ratios are classified into four important categories.

A. Liquidity ratios
B. Leverage ratios
C. Activity ratios / Turnover ratio &
D. Profitability ratio
A.Liquidity ratios:
These ratios measure the firm’s ability to meet its current obligations as and when they
become due. Liquidity is a prerequisite for the survival of a firm. A firm should ensure that it
does not suffer from lack of liquidity. The failure of the company to use its obligations put in
a dangerous situation on the other named idle assets earns nothing. Therefore a proper
balance between the two contradictory requirements i.e., liquidity and profitability is required
for efficient financial management. The liquidity ratios measure the ability of a firm to meet
its short term obligations and reflect the short-term financial strength/solvency of a firm.
 Current ratio:
Current ratio is calculated by dividing total current assets to total liabilities. This ratio is
also known as “working capital ratio”.
Current assets
Current ratio =
Current Liabilities
A ratio greater than one means that the firm has more current claims against them. Its
conventional rule that a current ratio of 2 to 1 or more to be considered as satisfactory.
However current ratio is a crude and quick measure of firm’s liquidity.
b) Quick Ratio:
Quick ratio or acid test ratio is more refined measure of firm’s liquidity. This ratio
establishes a relationship between quick or liquid assets and current liabilities. Stock and
prepaid expenses are considered to be less liquid.
Current assets – Inventory
Quick Ratio =
Current Liabilities

Generally, a quick ratio of 1:1 is considered, representing a satisfactory current

financial condition. This ratio is of great important for banks and financial institutions.
c) Cash Ratio:
It is the ratio of absolute liquid assets to quick liabilities. However for calculation
purposes it is taken as ratio of absolute liquid assets to current liabilities. Absolute liquid
assets include cash in hand and short term investments.
Cash in hand
Cash Ratio =
Current Liabilities
d) Net working capital ratio:
Net working capital is sometimes used as a measure of firm’s liquidity. It is
considered that between two firms the one having the larger net working capital has the
greater ability to meet current obligations. NWC however measures firm’s potential of funds.
It can be related to net assets.
Net working capital
Net working capital ratio =
Net Assets
1. Turnover Ratios:Turnover ratios measure how efficiently the enterprise employs the
resources or assets at its command. They indicate the performance of the business. The
performance of an enterprise is judged with its sales (turnover). Turnover ratios are otherwise
called as activity ratios.
2. Debtors Turnover Ratio:Debtor’s turnover ratio expresses the relationship between
average debtors and sales. It is calculated as follows
Sales
Debtors Turnover Ratio =
Average Debtors
Average debtors are the simple average of debtors at the beginning and at the end of
year. The analysis of the debtor’s turnover ratio supplements the information regarding the
liquidity of one item of current assets of the firm. The ratio measures how rapidly receivables
are collected. A high ratio is indicative of shorter time-lag between credit sales and cash
collection. A low ratio shows that debts are not being collected rapidly.

A. Inventory Turnover Ratio:Inventory turnover ratio indicates the efficiency of the

firm in producing and selling its product. It is calculated by dividing the cost of goods sold by
the average inventory. The average inventory is the average of operating and closing balances
of inventory. In a manufacturing company inventory of finished goods is used to calculate
inventory turnover.
Sales
a ) Inventory Turnover Ratio =
Average Inventory
Opening inventory + Closing inventory
Average Inventory =
2
b) Current Assets Turnover Ratio: Current Assets turnover ratio expresses the
relationship between net current assets and sales. It is calculated as follows:
Sales
Current assets turnover ratio =
Net Current Assets
 Working Capital Turnover Ratio:This ratio measures the relationship

between working capital and sales. The ratio shows the number of times the working
capital results. In sales working capital as usual is the excess of current assets over the
Sales
Working Capital Turnover Ratio =
Working Capital
Comment:
Higher the ratio the greater are the profit, a low working capital over indicates that working
capital is not efficiently util.
Measures to be adopted for a sound working capital management
For a sound management of working capital, a concern should adopt the following measure:
 Budget its cash flow
 Control its debtors
 Control its creditors
 Control its stock
 Avoid over borrowing

 Avoid over investment fixed assets

 Determine the financing mix
Operating cycle and cash cycle:
Investment in working capital is influenced by four key events in the production and sales
cycle of the firm:
 Purchase of raw materials
 Payment of raw materials
 Sale of finished goods
 Collection of cash for sales
The firm begins with the purchase of raw material, which are paid for after a delay, which
represents the account payable period. The firm converts the raw materials into finished
goods and then sells the same. The time lag between the purchase of raw materials and sale of
finished goods is the “Inventory period”.
The period that comes between the date of sales and the date of collection of receivable
is the accounts payable period (debt period). The time that comes between the purchase of
raw materials and the collection of cash for sales is referred to as the operating cycle,
whereas, the time length between the payment of raw material purchases and the collection of
cash for sales is referred to as the cash cycle.
The operating cycle is the sum of the inventory period and the account receivable period
where as the cash cycle is equal to the operating cycle less the account payable period.
From the financial statements of the firm, we can estimate the inventory period, the
account receivable and the account payable period.

OPERATING CYCLE OR CASH CYCLE
CASH
PURCHASE
COLLECTION OF &
CASH EXPENCES
DEBTORS & B/R s PRODUCTION
SALES STOCK

CHAPTER- 4
DATA ANLAYSIS

TABLE-1
DATA ANALASIS AND INTERPRETATION
YEAR CURRENT ASSETS
2012 20918.86
2013 19468.76
2014 24792.7
2015 24907.61
2016 26813.86
INTERPRETATION
In the above table shows that fluctuation of current assets. In the year 2013 are
decreased to 19468.76, 2015 are increased to 24907.61.when to compare inventories and
debtors, cash and bank balance and loan are increased, to decreased current assets but
increase in the provision.
CHART.1
30000
26813.86
24792.71 24907.61
25000
20918.86
19468.76
20000
15000
Series 1
10000
5000
0
2012 2013 2014 2015 2016

TABLE-2
CURRENT LIABILITIES
year Current liabilities
2012 6925.63
2013 7501.51
2014 6986.21
2015 8765.61
2016 10092.15
INTERPERTATION
In the above table shows that fluctuation of current liasbilities In the year
2013 are increased to 7501.51, 2015 are increased to 8765.61.when to compare inventories
and debtors, cash and bank balance and loan are increased, to decreased current liabilities but
increase in the provision.
CHART-2
current liabilities
12000
10092.15
10000 8765.61
7501.51 6986.21
8000 6925.63
2
6000
4000
2000
0
2012 2013 2014 2015 2016

TABLE-3
NET WORKING CAPITAL
Net working capital=current assets-current liabilities
( Rs in lakhs )
Year Current assets Current Net working
liabilities capital
2012 20918.86 6925.23 13993.23
2013 19468.76 7501.51 11967.25
2014 24792.71 6986.21 17806.50
2015 24907.71 8765.61 16142.00
2016 26813.86 10092.15 16721.71
INTERPRETATION
In the above table shows that fluctuation of net working capital ratio.
In the year 2013 are decreased to11967.25, 2015 are increased to 16142.00 when
to compare inventories and debtors, cash and bank balance and loan are increased,
to decreased current assets but increase in the provision.
CHART-3
Net working capital

20000 17806.5
16142 16721.71
15000 13993.23
11967.25
10000
Net working capital
5000
0
1 2 3 4 5

TABLE- 4
NET WORKING CAPITAL (ACCOUNT) AMOUNT
Particulars 2012-13 2013-14 2014-15 2015-16

Incresing WC 5836.26 579.66
Decreasing 2025.99 1611.51
WC
INTERPRETATION
In the above table shows that fluctuation of net working capital In the year 2013-14
are increased to 5836.26, 2015-16 are increased to 579.66. when to compare inventories and
debtors, cash and bank balance and loan are increased, to decreased current .
CHART-4
6000
5000
4000
3000 Incresing WC
Decreasing WC
2000
1000
0
2012-13 2013-14 2014-15 2015-16

TABLE – 5
CURRENT RATIO
Current asset
Current ratio = ------------------
Current liabilities
YEAR Current assets Current liabilities Ratios
Rs in lakhs
2012 20918.86 6925.63 3.02
2013 19468.76 7501.51 2.59
2014 24792.71 6986.21 3.54
2015 24907.61 8765.61 2.84
2016 26813.86 10092.15 2.65
INTERPREATION
In the above table shows that the current ratio is that year by year decreasing in the year
2013i.e., 2.59 and increased in the year 2013i.e, 3.54 and decreasing in 2015 and 2016.
Chart-5
Current Ratios
3.5
2.5
ratio
2 Ratios
1.5
0.5
0
2012 2013 2014 2015 2016
years

TABLE –6
QUICK RATIO (ACID TEST RATIO)

It is connected with the relationship between liquid asset and liquid liabilities.
Quick ratio is the real index of the liquidity or the short solvency of the concern.
The quick ratio is expressed as follows
current assets
Quick ratio = -------------------
current liabilities
( Rs in lakhs)
YEAR QUICK CURRENT RATIO
ASSETS LIABILITY
2016 7502.2 6925.63 1.08
2015 11431.99 7501.51 1.52
2014 12923.36 6986.21 1.84
2013 15858.76 8765.61 1.80
2012 15456.85 10092.15 1.53
INTERPRETATION
In the above table shows that the Quick ratio was fluctuating year by year. In the year 2014
and 2015 increased i.e, 1.84 and 1.80 and again decreased in the year 2016 i.e, 1.53.

CHART-6
QUICK RATIO
2
1.8
1.6
1.4
1.2
ratio
1
0.8
0.6
0.4
0.2
0
2012 2013 2014 2015 2016
years

TABLE –7
INVENTORY TURN OVER RATIO

It is connected with the relationship between sales and average inventory.
Inventory turn over ratio is the real index of the liquidity or the short solvency of the concern.
The Inventory turn over ratio is expressed as follows
sales
Inventory turn over ratio = -------------------
Average inventory
(Rs in lakhs)
YEAR SALES AVERAGE INVENTORY

INVENTORY TURN OVER
RATIO
2016 33516.26 10726.46 3.12
2015 36752.25 9953.04 3.69
2014 36316.52 10459.08 3.47
2013 40378.77 10202.76 3.95
2012 39215.27 11356.97 3.45
INTERPRETATION
In the above table shows that inventory turn over ratio fluctuating year by year. In
2012, 2014 and 2016are decreased, in 2015 and 2013 are increased.

CHART-7
INVENTORY TURN OVER RATIO
4.5
3.5
ratio2.5 INVENTORY TURN

OVER RATIO
2
1.5
1
0.5
0
2012 2013 2014 2015 2016
years

TABLE –8
DEBTORS TURN OVER RATIO
It is connected with the relationship between sales and average debtors.
Debtors turn over ratio is the real index of the liquidity or the short solvency of the concern.
The Debtors turn over ratio is expressed as follows
sales
Debtors turn over ratio = -------------------
Average debtors
(Rs in lakhs)
YEAR SALES AVERAGE DEBTORS
DEBTORS TURN
OVER
RATIO
2012 33516.26 1735.91 19.30
2013 36752.25 1921.06 19.13
2014 36316.52 2131.6 17.03

2015 40378.77 2666.96 15.14
2016 39215.27 2958.28 13.25
INTERPRETATION
In the above table debtors turn over ratio was fluctuating 19.30 in the year 2012 to 2013. 19.13
in the year 2013. in the year 2016, 2015, 2014are decreasing year by year.

CHART-8
DEBTORS TURN OVER RATIO
25
20
15
ratio DEBTORS TURN OVER
RATIO
10
0
2012 2013 2014 2015 2016
years

STATEMENT SHOWING CHANGE IN WORKING CAPITA

AS ON 31 / MARCH/ 2013AND2014
CHANGE IN WORKING
CAPITAL
Particulars 2013 year 2014 year
Rs. Rs.
Increase Decrease
Current Assets
Inventory 8760.94 14379.77 5618.83
Debtors 2920.31 2479.27 - 441.04

Cash and Bank 2336.25 2479.27 143.02
Loan and advances 4867.00 6198.18 1330.70
TOTAL (A) 19468.86 24792.71 -
Current Liabilities .
Liabilities 4725.91 4890.35 164.44 680.56

Provisions 2775.56 2095.00 -
TOTAL (B) 7501.47 6985.35 -
(A-B) Net 17807.36
11967.39 -
Working capital
increase in working 6135.39
TOTAL 6135.39 7256.99 7256.99

STATEMENT SHOWING CHANGE IN WORKING CAPITAL

CHANGE IN WORKING
CAPITAL
Particulars 2014 year 2015 year
Rs. Rs.
Increase Decrease
Current Assets
Inventory 14379.77 14446.41 66.64
Debtors 2479.27 2739.84 260.57 -
Cash and Bank 2479.27 3237.99 758.72 -
Loan and advances 6198.18 5023.27 - 1174.81
TOTAL (A) 24792.71 24907.61 -
Current Liabilities ..
Liabilities 4890.35 6135.93 1245.58 -
Provisions 2095.00 2629.68 534.68
TOTAL (B) 6985.35 8765.61 -
(A-B) Net 17807.36

16142.00 .-
Working capital
increase in working 1691.38 - 1691.38
TOTAL 2866.19 2866.19

STATEMENT SHOWING CHANGE IN WORKING CAPITAL

CHANGE IN WORKING
Particulars 2015 year 2016 year CAPITAL
Rs. Rs.
Increase Decrease
Current Assets
Inventory 14446.41 16088.32 11641.91 -
Debtors 2739.84 4826.49 2086.65 -
Cash and Bank 3237.99 3217.66 -. 33.67
Loan and advances 5023.27 2681.39 - 2341.98
TOTAL (A) 24907.61 26813.86 - -
Current Liabilities
Liabilities 6135.93 6761.74 625.81 -
Provisions 2629.68 3330.41 700.73 -
TOTAL (B) 8765.61 10092.15
(A-B) Net
16142.00 16721.71 -
Working capital
increase in working 2679.45 2679.45
TOTAL 5055.10 5055.10

STATISTICAL TOOL IN WORKING CAPITAL
TABLE: 4.1
MAGNUM STANDARD DEVIATION
Year Fund Average Return (R- ) (R- )2
Returns(R) ( )
2016-17 18.32 34.54 -16.22 263.08
2015-16 87.94 34.54 53.40 2851.56
2014-15 51.47 34.54 16.93 286.62
2013-14 71.28 34.54 36.74 1349.82
2012-13 -56.29 34.54 -90.83 8250.08
=172.72
=13001.16
= = 34.54
= = 50.99
Standard Deviation =
𝟑𝟒.𝟓𝟒−𝟕
Sharpe Ratio = = =0.54
𝟓𝟎.𝟗𝟗
Inference : The fund Standard Deviation is 50.99 and the Sharpe ratio of this fund is
0.54.

CALCULATION OF BETA VALUE:
Fund
Returns Bench Mark
Year (y) Returns (x) X2 XY
2016-17 18.32 39.83 1586.42 729.68
2015-16 87.94 54.77 2999.75 4816.47
2014-15 51.47 17.95 322.20 923.88
2013-14 71.28 75.76 5739.57 5400.17
2012-13 -56.29 -51.79 -2682.20 2915.25
TOTAL 172.72 136.72 7965.74 14785.45
β=
= 5(14785.45)-(136.72)(172.72)/5(7965.74)-(136.72) 2
= 2.37
𝟑𝟒.𝟓−𝟕
Treynor Ratio = = =11.6
𝟐.𝟑𝟕
Inference :
The Beta of Magnum Equity capital is Greater than the Bench Mark i.e., 2.37 > 1. The
Fund returns more than the Bench Mark for Five Years i.e., 172.72 > 136.52.

TABLE 4.2
MAGNUM WORKING CAPITAL
Year Fund Average Return( ) (R- ) (R- )2

Returns(R)
2016-17 18.10 36.002 -17.902 320.98
2015-16 119.56 36.002 83.558 6981.93
2014-15 56.63 36.002 20.628 425.51
2013-14 52.37 36.002 16.368 267.91
2012-13 -66.65 36.002 -102.652 10551.43
= 180.01 =18533.26
= =
36.002
𝟏𝟖𝟓𝟑𝟑.𝟐𝟔
Standard Deviation = =√ = 60.88
𝟓
𝟑𝟔.𝟎𝟎𝟐−𝟕
Sharpe Ratio = = = 0.47
𝟔𝟎.𝟖𝟖
Inference :
The fund Standard Deviation is 60.88 and the Sharpe ratio of this fund is 0.47.

X2 XY
Fund Bench Mark
Year Returns (y) Returns (x)
2016-17 18.10 39.83 1586.42 720.92
2015-16 119.56 54.77 2999.75 6548.30
2014-15 56.63 17.95 322.20 1016.50
2013-14 52.37 75.76 5739.57 3967.55
2012-13 -66.65 -51.79 -2682.20 3451.80
TOTAL 180.10 136.52 7965.74 15705.07
β=
= 5(15705.07)-(136.52)(180.10)/5(7965.74)-(136.52) 2
= 2.54
𝟑𝟔.𝟎𝟎𝟐−𝟕
𝟐.𝟓𝟒
Inference :
The Beta of Magnum Global capital is Greater than the Bench Mark i.e, 2.54 > 1. The
Fund returns more than the Bench Mark for Five Years i.e., 180.01 >136.52.

TABLE 4.3
MAGNUM MIDCAP
Year Fund Average Return( (R- ) (R - )2

Returns(R) )
2016-17 14.70 32.89 -18.19 330.87
2015-16 104.11 32.89 71.22 5072.28
2014-15 46.69 32.89 13.80 190.44
2013-14 70.69 32.89 37.80 1428.84
2012-13 -71.74 32.89 -104.63 10947.43
=164.45 =17969.86
= =
32.87
𝟏𝟕𝟗𝟔𝟗.𝟖𝟔
𝟓
𝟑𝟐.𝟖𝟗−𝟕
𝟓𝟗.𝟗𝟒
INFERENCE:

X2 XY
Fund Bench Mark
2016-17 14.70 39.83 1586.42 585.50
2015-16 104.11 54.77 2999.75 5702.10
2014-15 46.69 17.95 322.20 838.08
2013-14 70.69 75.76 5739.57 5355.47
2012-13 -71.74 -51.79 -2682.20 3715.41
TOTAL 164.45 136.52 7965.74 1619.56
β=
= 5(16196.56)-(136.52)(164.45)/5(7965.74)-(136.52) 2
= 2.76
𝟑𝟐.𝟖𝟗−𝟕
𝟐.𝟕𝟔
INFERENCE:
The Beta of Magnum Midcap fund is Greater than the Bench Mark i.e., 2.76> 1. The Fund
returns more than the Bench Mark for Five Years i.e., 164.45> 136.52.

TABLE 4.4
MAGNUM MULTICAP
Year Fund Average (R- ) (R- )2

Returns(R) Return ( )
2016-17 9.76 24.26 -14.50 210.25
2015-16 80.82 24.26 56.56 3199.03
2014-15 42.66 24.26 18.40 338.56
2013-14 45.62 24.26 21.36 456.24
2012-13 -57.54 24.26 -81.80 6691.24
=121.32 =10895.32
= =
24.26
𝟏𝟎𝟖𝟗𝟔
𝟓
𝟐𝟒.𝟐𝟔−𝟕
Sharpe Ratio = = =0.36
𝟒𝟔.𝟔𝟖
Inference :

Fund X2 XY
Returns Bench Mark
YEAR (y) Returns (x)
2016-17 9.76 39.83 1586.42 388.74
2015-16 80.82 54.77 2999.75 4426.51
2014-15 42.66 17.95 322.20 765.74
2013-14 45.62 75.76 5739.57 3456.17
2012-13 -57.54 -51.79 -2682.20 2979.99

121.32
TOTAL
136.52 7965.74 12017.15
β=
= 5(12017.15)-(136.52)(121.32)/5(7965.74)-(136.52) 2 = 2.05
= 𝟐𝟒.𝟐𝟔−𝟕
Trey nor Ratio = =8.41
𝟐.𝟎𝟓
Inference: The Beta of Magnum Multi cap fund is Greater than the Bench
Mark i.e., 2.05 > 1. The Fund returns less than the Bench Mark for Five
Years i.e., 121.32< 136.52.

TABLE 4.5
MAGNUM COMMA RETURN

2016-17 9.01 36.23 -27.22 740.92
2015-16 99.00 36.23 62.77 3940.07
2014-15 46.85 36.23 10.62 112.78
2013-14 86.01 36.23 49.78 2478.04
2012-13 -59.71 36.23 -95.94 9204.48
=
181.16 =16476.29
= =
36.23
= 𝟏𝟔𝟒𝟕𝟔.𝟐𝟗
Standard Deviation = √ =57.40
𝟓
= 𝟑𝟔.𝟐𝟑−𝟕
Sharpe Ratio = =0.50
𝟓𝟕𝟒𝟎
Inference:
The Standard Deviation is 57.40 and the Sharpe ratio of this fund is 0.50.

Fund Bench Mark X 2 XY

2016-17 9.01 39.83 1586.42 358.86
2015-16 99.00 54.77 2999.75 5422.23
2014-15 46.85 17.95 322.20 840.95
2013-14 86.01 75.76 5739.57 6516.11
2012-13 -59.71 -51.79 -2682.20 3092.38

181.16
TOTAL 136.52 7965.74 16230.53
β=
= 5(16230.53)-(136.52)(181.16)/5(7965.74)-(136.52) 2
= 2.66
= 36.23−7
2.66
Inference:The Beta of Magnum Comma fund is Greater than the Bench

Mark i.e.,2.66> 1. The Fund returns more than the Bench Mark for Five Years
i.e.181.16> 136.52.

TABLE 4.6
MAGNUM INDEX FUND

2016-17 17.99 26.19 -8.2 67.24
2015-16 74.74 26.19 48.55 2357.10
2014-15 42.05 26.19 15.86 251.53
2013-14 49.46 26.19 23.27 541.49
2012-13 -53.27 26.19 -79.46 6313.89
=
130.97 =9531.25
= =
26.19
= 𝟗𝟓𝟑𝟏.𝟐𝟓
𝟓
= 𝟐𝟔.𝟏𝟗−𝟕
𝟒𝟑.𝟔𝟔
Inference:
The fund Standard Deviation is 43.66 and the Sharpe ratio of this capital is 0.43

X2 XY
Fund Returns Bench Mark
Year (y) Returns (x)
2016-17 17.99 39.83 1586.42 716.54
2015-16 74.74 54.77 2999.75 4093.50
2014-15 42.05 17.95 322.20 754.79
2013-14 49.46 75.76 5739.57 3747.08
2012-13 -53.27 -51.79 -2682.20 2758.85

130.97
TOTAL 136.52 7965.74 12070
β=
= 5(12070.76)-(136.52)(130.97)/5(7965.74)-(136.52)2
= 2.00
= 26.19−7
2
Inference:
The Beta of Magnum Index capita is Greater than the Bench Mark i.e., 2.00> 1. The
returns less than the Bench Mark for Five Years i.e., 130.97< 136.52.

TABLE 4.7
MAGNUM MULTIPLIER PLUS FUND
Year Fund Average Return (R- ) (R- )2

Returns(R) ( )
2016-17 19.30 33.27 -13.97 195.16
2015-16 87.53 33.27 54.26 2944.14
2014-15 49.83 33.27 16.56 274.23
2013-14 64.89 33.27 31.62 999.82
2012-13 -55.19 33.27 -88.46 7825.17
=
166.36 =12238.52
= =
33.27
= 𝟏𝟐𝟐𝟑𝟖.𝟓𝟐
𝟓
= 𝟑𝟑.𝟐𝟕−𝟕
𝟒𝟗.𝟒𝟕
Inference :
The fund Standard Deviation is 49.47 and the Sharpe ratio of this capital is 0.53.

X2 XY
Capital Bench Mark
19.30
2016-17 39.83 1586.42 768.71
87.53
2015-16 54.77 2999.75 4794.01
49.83
2014-15 17.95 322.20 894.44
64.89
2013-14 75.76 5739.57 4916.06
-55.19
2012-13 -51.79 -2682.20 2858.29
166.36
TOTAL 136.52 7965.74 14231.51
β=
= 5(14231.51)-(136.52)(166.36)/5(7965.74)-(136.52) 2
= 2.28
= 33.27−7
2.28
Inference :
The Beta of Magnum Multiplier Plus capial is Greater than the Bench Mark i.e., 2.28 > 1. The
Fund returns more than the Bench Mark for Five Years i.e., 166.36 > 136.52.

TABLE 4.8
MAGNUM SECTOR FUNDS UMBRELLA
MAGNUM IT
Year capital Average Return (R- ) (R- )2

Returns(R)
( )
2016-17 24.95 28.93 -3.98 15.84
2015-16 126.32 28.93 97.39 9484.81
2014-15 51.17 28.93 22.24 494.61
2013-14 6.41 28.93 -22.52 507.15
2012-13 -64.20 28.93 -93.13 8673.19
=
144.65 =19175.6
= =
28.93
= 𝟏𝟗𝟏𝟕𝟓
𝟓
= 𝟐𝟖.𝟗𝟑−𝟕
𝟔𝟏.𝟗𝟐
Inference :The Standard Deviation is 61.92 and the Sharpe ratio of this fund is 0.35.

X2 XY
Fund Benchmark
24.95
2016-17 39.83 1586.42 993.75
126.32
2015-16 54.77 2999.75 6918.54
51.17
2014-15 17.95 322.20 918.50
6.41
2013-14 75.76 5739.57 485.62
-64.20
2012-13 -51.79 -2682.20 3322.91
144.65
TOTAL 136.52 7965.74 12639.32
β=
= 5(12639.32)-(136.52)(144.65)/5(7965.74)-(136.52) 2
= 2.05
= 28.83−7
2.05
Inference :
The Beta of Magnum IT fund is Greater than the Bench Mark i.e., 2.05> 1. The Fund returns
more than the Bench Mark for Five Years i.e., 144.65 > 136.52.

TABLE 4.9
MAGNUM PARMA WORKING CAPITAL
Year FUND Average Return (R- ) (R- )2

Returns(R) ( )
2016-17 29.14 16.72 12.42 154.25
2015-16 84.29 16.72 67.57 4565.70
2014-15 12.63 16.72 -4.09 16.72
2013-14 6.74 16.72 -9.98 99.60
2012-13 -49.20 16.72 -65.92 4345.44
=
83.6 = 9181.71
= =
16.72
9181.71
=
√ = 42.85
5
16.72−7
42.85
Inference :
The fund Standard deviation is 42.85 and the Sharpe ratio of this fund is 0.22.


FUND Benchmark X2 XY
29.14
2016-17 39.83 1586.42 1160.64
84.29
2015-16 54.77 2999.75 4616.56
12.63
2014-15 17.95 322.20 226.70
6.74
2013-14 75.76 5739.57 510.62
-49.20
2012-13 -51.79 -2682.20 2548.06
83.6
TOTAL 136.52 7965.74 9062.58
β=
= 5(9062.58)-(136.52)(83.6)/5(7965.74)-(136.52) 2
= 1.59
= 16.72−7
1.59
Inference :
The Beta of Magnum Parma capital is Greater than the Bench Mark i.e., 1.59 > 1. The capital
returns less than the Bench Mark for Five Years i.e., 83.6 < 136.52.

TABLE 4.1
MAGNUM CONTRA WORKING CAPITAL
( )
Returns(R)
2016-17 9.59 32.75 -23.16 536.38
2015-16 90.55 32.75 57.80 3340.84
2014-15 50.48 32.75 17.73 314.35
2013-14 66.29 32.75 33.54 1124.93
2012-13 -53.14 32.75 -85.89 7377.09
=
163.77 = 12693.59
= =
32.75
12693.59
=
√ = 50.38
5
= 32.75−7
Sharpe Ratio = = 0.51
50.38
Inference :

X2 XY
FUND Benchmark
9.59
2016-17 39.83 1586.42 381.96
90.55
2015-16 54.77 2999.75 4959.42
50.48
2014-15 17.95 322.20 906.11
66.29
2013-14 75.76 5739.57 5022.13
-53.14
2012-13 -56.79 -2682.20 2752.12
163.77
TOTAL 136.52 7965.74 14021.74
β=
= 5(14021.74)-(136.52)(163.77)/5(7965.74)-(136.52) 2
= 2.25
= 32.75−7
Treynor Ratio = =11.70
2.25
Inference : The Beta of Magnum Contra fund is Greater than the Bench Mark i.e.,
2.2 > 1. The Fund returns more than the Bench Mark for Five Years i.e.163.77 > 136.52.

TABLE 4.11
MAGNUM EMERGING BUSINESS WORKING CAPITAL

( )
Returns(R)
2016-17 29.45 33.48 -4.03 16.24
2015-16 64.46 33.48 30.98 959.76
2014-15 33.08 33.48 -0.40 0.16
2013-14 108.96 33.48 75.48 5697.23
2012-13 33.08 33.48 -0.40 0.16
=
167.41 = 17081.47
= =
33.48
17081.47
=
√ = 58.44
5
= 33.48−7
58.44
Inference :
The Standard Deviation is 58.44 and the Sharpe ratio of this fund is 0.45

FUND X2 XY
Benchmark
29.45
2016-17 39.83 1586.42 1172.99
64.46
2015-16 54.77 2999.75 3530.47
33.08
2014-15 17.95 322.20 593.78
108.96
2013-14 75.76 5739.57 8254.80
-68.54
2012-13 -56.79 -2682.20 3549.68
167.41
TOTAL 136.52 7965.74 17101.72
β=
= 5(17101.72)-(136.52)(167.41)/5(7965.74)-(136.52) 2
= 2.91
= 33.48−7
Trey nor Ratio = = 9.13
2.91
Inference :
The Beta of Magnum Emerging Business fund is Greater than the Bench Mark i.e., 2.9 > 1.
The Fund returns more than the Bench Mark for Five Years i.e.167.41> 136.52.

TABLE 4.1
MAGNUM FMCG WORKING CAPITAL
Year Fund Average Return ( (R- ) (R- )2

Returns(R) )
2016-17 48.08 23.08 25.00 625.00
2015-16 66.37 23.08 43.29 1874.02
2014-15 5.58 23.08 -17.50 306.25
2013-14 28.38 23.08 5.30 28.09
2012-13 -32.97 23.08 -56.05 3141.60
=
115.44 =5974.96
= =
23.08
5974.96
=
√ = 34.56
5
= 23.08−7
34.56
Inference :

X2 XY
Fund Benchmark
48.08
2012-13 39.83 1586.42 1915.02
66.37
2013-14 54.77 2999.75 3635.08
5.58
2014-15 17.95 322.20 100.16
28.38
2015-16 75.76 5739.57 2150.06
32.97
2016-17 -56.79 -2682.20 1707.51
115.44
TOTAL 136.52 7965.74 9507.83
β=
= 5(9507.83)-(136.52)(115.44)/5(7965.74)-(136) 2
= 1.49
= 23.08−7
Treynor Ratio = = 10.79
1.49
Inference :
The Beta of Magnum FMCG fund is Greater than the Bench Mark i.e., 1.49> 1. The Fund
returns less than the Bench Mark for Five Years i.e.115.44 <136.52

PERFORMANCE OF EACH WORKING CAPITALIN TABLE

REPRESENTATION
SCHEMES SD SR BETA TR
Magnum Equity Fund 50.99 0.54 2.37 11.62
Magnum Global Fund 60.88 0.47 2.54 11.41

Magnum Mid Cap 59.94 0.43 2.76 9.38
Fund
Magnum Multi Cap 46.68 0.36 2.05 8.41
Fund
Magnum Comma 57.40 0.50 2.66 10.98
capital
Magnum Index capital 43.66 0.43 2.00 9.59
Magnum Multiplier 49.47 0.53 2.28 11.52
Plus capital
Magnum Sector 61.92 0.35 2.05 10.69
Fund(IT)
Magnum Parma capital 42.85 0.22 1.59 6.11
Magnum Contra capial 50.38 0.51 2.22 11.70
Magnum Emerging 58.44 0.45 2.9 9.13
Business capital
Magnum FMCG capital 34.56 0.46 1.49 10.79

CHAPTER -V
FINDINGS, SUGGESTIONS
AND
CONCLUSION

FINDINGS
 The ratio of current assets to current liabilities was decreasing and increasing
for the past 5 years.

 The ratio of quick assets to quick liabilities has shown a satisfaction position,
despite fluctuations.
 Inventory turnover has been decreasing and increasing trend, this implies that
inventories are being managed efficiently.

 Raw material turn over ratio has been decreasing and increasing trend, this
implies that raw material are being managed efficiently.

 Net profit has been decreasing and increasing of the fluctuations from the year
to year.
 Net working capital has been increasing from year to year.
 There is no proper management of working capital.
I absorbed this through absorption during my project work in super spinning

mills LTD.,
 Company’s is current ratio is fluctuating year by year due to increase of
sundry creditors ratio And creditors and other deposits in current

liabilities.the company is maintaining standard of quick assets I,e 1:1 the
company is maintaining high amount of quick assets when compare with
 The company working capital has been fluctuating due to increasing in
 Analysis of five years working capital fluctuating yaer to year working capital
of the company has been increased.

.

SUGGESTIONS
 The desirable current ratio is 2:1 and some years it was more than 2:1 and
even 3:1 the company should try to reduce this ratio to 2:1 because idle funds
earn nothing.
 Current assets management needs to be more efficient debtors and inventory
management should be stabilized.

 Despite satisfactory results shown in inventory turnover ratio, investment in
inventories has been increasing and decreasing from year to year. This should
be stabilized.
 Net working capital should 1:1.33 but it is less. There fore has to try to
improveits working capital.

 The working capital position of the super spinning mill ltd, is in fluctuating
manner so it is better to maintain exact figure.

 Company has to make a proper forecasting of sale and working capital to
reduce large fluctuation in working capital management.

 Management should develop credit policy and proper sale realization system
from customer so that efficient and effective management of account

reasonable can be ensured. This will significantly improve the profitability
and liquidity of the company
 Over all company has good liquidity posision and sufficient funds to re

payment to liabilities,company is increase in sales value per year.

 Which supported to company increase the market share year to year.
CONCLUSION
Working capital turnover is changing from year to year. Hence,

networking capital is not used efficiently. The cash ratio of Super
Spinning Mill is very low.The current ratio is very high.
Trading and inventory management has been decreasing and

increasing in inventories has been decreasing and increasing from year
to year.Trading ratio was not favorable.Despite satisfactory results
shows in inventory turnover ratio, investment in inventories has been
decreasing and increasing from year to year.Net profit ratio has been
shown an increasing trend.
The working capital position of the company is satisafactory, the

organization which managers it financial operation effectively propers

to be successful to decreed the long term loans and current asset. So it

not finding any difficulties to decharge its obligation under the light of
the inferences drawn from the analysiss, it is no exaggeration to
conclude with information that the over all working capital
management of super spping mill ltd is fair and reasonably good and
thus promoting future a waits the company.

ANNEXURE
BIBILOGRAPHY
I.M .PANDEY, financial management, vikas publishing house private limited.
M.Y.KHAN & P.K. JAIN, financial management, tata mc.graw hill publishing
company limited.
PRASANNA CHANDRA, financial management, Tata McGraw hill publishing

company
T.S REDDY, financial management, margham publication.

m.y khan/ p. k jain, financial management, text ,problem cases, 5th

edition, tata mc graw –hill publishing company limited ,New delhi, 2001
Dr, P.C TULSIAN: financial management, s.chand and company ltd.
G.SUNDARSANA REDDY: financial management, himalay published house

3rd revised edition.
SP.JAIN: financial accounting, by kalyani publishers, Ludhiana.
PRASANNA CHANDRA: financial management, 5TH edition, Tata mc graw-

hill publishing company limited, new delhi,2001.
Websites:
www.superspinning.com
www.google.com
www.indiantextileindustry.com
PROFIT &LOSS ACCOUNT

Consolidation profit and loss account for the year ended 31st march 2012
(RS in lakhs)
Particulars Schedule Amount Amount
Income:
Sales 10 48632.90 39455.65
Other Income 11 713.44 192.25
Inc/Dec(-) in stock of 12 1324.83
Finished
Goods(1917.47) 50671.17 37730.43
Total Income 13 20603.08
30414.05
Expenditure:

Raw material 14 4166.02 3863.72

Salaries &wages 4471.88 3431.54
Power &fuel 2174.98 1681.65
Stores 15 897.35 694.63
Repairs& maintenance 349.20 905.89
Processing charger 16 1565.03 1334.64
Selling Expenses 17 703.56 723.01
Administrative Expenses 18 2200.12 2183.90
Interest(net) 46969.19 35422.06
Total Expenditure 3701.98 2308.37
Gross profit 2088.09 2333.86
Less: Depreciation 1613.89 25.49
Profit before tax (372.54-325.00) (42.75-5.03)
Provision for current tax 47.54 47.78
less: MAT credit entitlement 2.00 2.00
less: provision for wealth tax 21.40 251.63
less: provision for deferred
tax _ 35.45
less: pre-acquisition profit _ 1.66
transferred to capital 139.25
reseve on 1585.75
consolidation 0.40 1.49
less: profit transferred to 114.95 93.44
minority interest 1470.40 44.32
Profit after tax 1442.70 1519.16
Less: prior year expenses _ 61.13
Less: taxes relating to earlier _ 2.11
year 27.70 1538.08
NET PROFIT
add: Balance brought 8.05 4.98
forward 19.65 1543.06
less: Transferred to capital 27.70 1538.08
reserve on
consolidation 2.67 0.08
less: Transferred to minority
interest
Profit available for
appropriation
General reserve
Balance carried forward
Total
Basic earning per share(in
rs)face value of re 1/-

per share
BALANCE SHEET
SUPER SPINNING MILLS LIMITED BALANCE SHEET FOR

THE YEAR 31-03-2012
(Rs in lakhs)
Liabilities Amount Assets Amount
Share capital 10834.04 Fixed assets 6894.08

Reserve and 4726.56 inventories 8760.94
surplus
Loans secured 3893.60 Sunday debtors 2920.31
Loans unsecured 973.40 Cash in hand or 2336.25
cash in bank
Current liabilities 4725.91 Loans and 4867
advance
Provisions 2775.56 Capital work in 2363.25
progress
Net differed tax 215.76
liabilities
28144.83 28144.83


THE YEAR 31-03-2013
(Rs in lakhs)

surplus
Loans 2239.64 Cash in hand or 2479.27
unsecured cash in bank
Current 4890.35 Loans and 6198.18
liabilities advance
progress
liabilities
34957.09 34957.09


THE YEAR 31-03-2014
(Rs in lakhs)

surplus
Loans unsecured 2436.56 Cash in hand or 3237.99
cash in bank
Current liabilities 6135.93 Loans and 5023.37
advance
progress
liabilities
34984.24 34984.24


THE YEAR 31-03-2015
(Rs in lakhs)

surplus
Loans 2167.85 Cash in hand or 3217.66
unsecured cash in bank
Current 6761.74 Loans and 2681.39
liabilities advance
progress
liabilities
36388.23 36388.23


Working Capital Management

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Working Capital Management

SANSKRITHI SCHOOL OF BUSINESS Page 1

DEFINITION OF FINANCIAL MANAGEMENT:

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Financial management is an operational activity of a business that is responsible for

Financial Management is the process of managing the financial resources, including

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IMPORTANCE OF FINANCIAL MANAGEMENT

A financial is essential in any type economy whether it is a centrally planned

Financial management is of great significance even is the case of a non – profit

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OBJECTIVES OF THE STUDY

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NEED FOR THE STUDY

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SCOPE OF THE STUDY

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LIMITATIONS OF THE STUDY

 It is based on the data supplied by the factory personnel.

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SUPER SPINNING MILLS PRIVATE LIMITED – B UNIT

Brief history of SS mills

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3. Educational benefits for children.

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Varanasi, Ichakarangi, Tenali,

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 Uniform should be maintained neat and clean.

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Function of the personal department:

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People Courtesy Missed dead lines

Tools Reliability Over budget costs

PROCESS ERROR MINIMISATION TO IMPROVE CUSTOMER SATISFACTION

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Techniques for problem solving:

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 High cost establishment of plants.

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WORKING CAPITAL MANAGEMENT

A) CONCEPTS OF WORKING CAPITAL

1. Gross working capital:

2. Net working capital:

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B) THE NEED OR OBJECTIVES OF WORKING CAPITAL

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Dangers of inadequate working capital

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 Dimension I is concerned with the formulation of policies regard to profitability, risk

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