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EXECUTIVE SUMMARY

As a locality of syllabus , each student finding out Master in Business Administration needs
to commence a scheme on a specific topic allocated to him. consequently I actually take
remained allotted the scheme w0rk on the study of capital establishment in Bombay Rayon
Fashion restricted, Doddaballapura.

Conclusions about wealth ( curent assets – curent liabilities) and short term finance square
measure mentioned to as capital managment. It involves tha link among a company’s kind
term assets and short term liabiIities.

The area of employed capital supervision is to confirm that the firm is in a position to
remain its operation which it's ample income to satisfy each budding short term debt and
coming working expenditures.

W0rking wealth is employed in international Bombay rayon fashion limited, for the
subsequent purpose stuff, add growth, done merchandise, invent 0ries, sundry borrowers and
daily money necessities. The Bombay Rayon fashion restricted keep bound funds that is
mechanically on the market to finance this assets necessities.

The various info concerning “ capital management” like classification determinates sources
are mentioned with reference to Bombay rayon fashion limited.

Rati0 examination takes stayed accepted available with financial data for previous 5
accounting year I . e form 2015 to 2018 ratio lick current ratio, stock turnover ratio,
employed capital turnover ratio, quick ratio, Current asset turnover Ratios, Current asset
turnover shareholders Ratios, Current liabilities to shareholders quantitative relation have
conjointly been analysed. an announcement of changes in capital has conjointly been
analysed.

At Bombay rayon fashion limited the money managemcnt has exposed growth within the
amount of study. This demonstrations capital is succeeded successfully.
CHAPETR 1: INTRODUCTION

1.1 INTRODUCTION ABOUT THE INTERNSHIP:

Internship is an essential part of the instruction set of courses of VTU MBA program. This
internship is an activity to cross any barrier learning and its submission done a series of
involvement that will allow VTU MBA student a sequencer insights and experience to
operation of an organization. This internship helps the students to have a wide exposure to
the practical world. It provides the practical exposure to what the student has learnt
theoretically. It also provides an industrial exposure i.e., it exposes student to the way how
the industry functions. The study encompasses the careful application of knowledge and
techniques how they perform in the organization. The importance of the structure study is to
grasp the operating surroundings of the organization.

Tha study undertaken in Bombay rayon fashion limited (BRFL) to evaluate the financial
performance and identifies the financial strength and weakness and arrive at a conclusion of
the performance of the company. The study enables me to have practical knowledge which
will be of a greater use me and add more value to me for my future.

1.2 INDUSTRY PROFILE

The textile business is endeavor a significant reorientation within the direction of non-wear
submissions of textiles, referred to as procedural cloths, that area unit increasing erratically
at double rate of textiles for fashion application and currently rationalization for over half
entire cloth manufacture. The procedures concerned in creating sensible fabrics need dear
tackle’s and sure-handed labours and area unit, for the instant, focussed in industrialized
nations. Technical fabrics have several submissions together with bed sheets; separation and
rough resources; piece of equipment and attention fabric; current defence and blood-
absorbing materials; straps; tape, and several different specific merchandise and requests.
The Indian Textile business has been experiencing a fast conversion and is within the
method of absorptive with the globe textile trade and producing. this modification is being
divided by the broadminded pull to items of the master's degree and therefore the
authoritative of the lately contracted Universal Contract Trade & Tariff. during this daring,
new situation, Bharat must move on the far side its role of being a mere allocation
sustaining country.

Cloth manufacturing involved in producing the cloth and appeals of humans. Example
shirts, dress. The India textile trade contains a vital presence within the economy
furthermore as within the international textile economy. it's involvement to the Indian
budget is established in terms of it is involvement t0 the producing production, engagement
generation and interchange incomes. It contributes twenty (20 %) you look after industrial
production, nine (9%) you look after excise collections, eighteen 8% of employment within
the industrial sector, nearly twenty you have to the country’s total export earning and four
nothing to the GDP.

The textile business recognized in 1969 in national market the industry commencement with
small sizes for producer of hosiery product and woollen textiles. This industry linked family
business and forecasting occasions in garments exports. Accommodations of company also
have in house facilities for fashions strategy and growth between others.

India was identified designed for his in height class clothes for males and maximum of the
dress producers are in the Minor and Average, huge gage manufacturing. Indian sub-
continent is the second largest producer of fashions after China being the universal leader in
clothing manufacture.

Indian mens sartorial manufacturing takes remained emerging gradually and quickly
completed the previous partial years, this has been conceivable 0wing to the Indian male
attractive more style cognizant, and hence there is additional feasting which has improved
the world-wide demand of men's garmcnts through the breather of the creation. Men’s shirt,
trousers, blazer-suits, wedding-suit, busines-suit, sports-suit, are made in dissimilar sizes to
cater the requirement of the customers both in distribute and national market.

1.2.1 GLOBAL SCENARIO / HISTORY :

The physical business possesses an motivating place in our nation one of the leading on
time to c0me back into authenticity in India, it signifies 14 July of grouping mechanical
generation, adds to about 200th of combination prices. Being the major outside trade
operative, on behalf of over five-hitter of value and giving direct work to 35 million
persons, basically the weaker segments, it's second most significant part simply when
farming.

The number one exporter of textile, china, includes a portion of over 100 % taken when by
Choson with eight.1percent ; India's senses at three.5-percent. In article of clothing trades,
china holds a share of eighteen.55 % taken once by European nation six.7 % and Bharat
three %. The vital markets for Indian material and attire square measure UAE, USA,UK, ,
France, Germany ,Russia, Italy , Canada ,Bangladesh and Japan.

1.2.2 INDIAN SCENARIO:

India's textile industry is one of the economies major. In 2000-2001, the fabric and article of
fashion enterprises depicted around 4 take advantage of GDP, 14 July of mechanical yield,
18 maximize trendy work, and 27 take advantage of fare profit (has him). India's material
trade is in addition noteworthy in a universal situation, positioning 2nd to china within the
generation of each cotton, yarn and texture and 5th within the creation of designed
filaments and yarns.

The past of textiIe is sort of as recent by way of that of humanoid development and as time
changes on the past of textiIe takes extra supplemented herself. within the sixth and seventh
period B.C., the oldest verified suggestion of exploitation fiber c0mes through the creation
of flax then yarn material at the dig of Swis freshwater populations.

Tha fabric business inhabits a standard apartment in our nation. one amongst the distinctive
to come back into presence in Asian nation, it financial records for 14 persent of the general
Manufacturing formation, donates to objective around half-hour of the total transfers and is
that the additional major employ creator once husbandry. material business is as long as one
amongst the foremost basic desires of individuals and therefore the holds standing; keeping
continued growing for educating excellence of life. it's a novel place as a autonomous
business, from the creating of raw materials to the delivery of finished merchandise, with
substantial value-additi0n at every period of procesing; it's a serious involvement to the
country's budget. Its huge potential for creation of use opportunities within the agrarian,
manufacturing, planned and localised sectors & rural and concrete areas, notably for girls
and therefore the needy is remarkable. tho' the event of textile sector was earlier happening
in terms of universal rules, in feeling of the position of this sector.
1.2.3 GDP CONTRIBUTION:

It contributes around 14% to manufacturing production, 4% GDP contribution the Indian


economy and 17% to be country export earnings.

The Indian textiles business, presently projected at about US$ 108 billion, is anticipated to
realise US$ 223 billion by 2021. The business is that the next largest leader when farming,
provided that employ to over forty five million individuals directly and sixty million entities
meanderingly.

1.2.4 MAJOR PLAYERS OF TEXTILE INDUSTRIES IN INDIA:

Name of the company Market share price


Sutlej Textiles 2,461.50
Jindal Worldwid 1,643.21
SEL Mgf Company 989.28
Garware Technic 884.61
TCNS Clothing C 838.49
S P Apparels 628.01
Bang Overseas 168.81
Hindoostan Mill 165.00
GTN Textiles 142.79
STL Global 104.51

1.2.5 FIRM GROWTH FACTORS IN TEXTILE COMPANY:

 Availability of labourers.
 Good relationship with clients.
 Good management of the firm.
 Technological edge.
 Maintaining products quality high.
 Internal efficiency.

1.3 CONPANY PROFILE


Name of the company Bombay Rayon fashion Ltd
Incorporation date 4 April 1986
Area 30 acers
Broads of Directors Mr Prashant Agarwal(M.D)
Mr Uday C. Morge (Exe.director)

Bankers AXIS Bank, SBI Bank


Accountants V.K Beshwal & Associates,
Chartered auditors

Company head Quarters Bombay Rayon Fashions Ltd


KIADB, Near railway station,
Doddaballapur, Bangalore 561203

 B0mbay ray0n fashi0n restricted could be a precipitously joined textile company, this
company engaged within the production of a good vary of materials and clothes
from state of the art making facilities. excluding metropolis cloth fashion restricted
existence the biggest Shirt manufacturer in Asian nation, we've got with success
evolved into a multi-fiber producing company engineering materials like Polyester,
Cotton, Modal, Tencel, Lycra, Wool and varied blends. Our yarn artificial cloth,
 Bombay rayon fashion restricted as fallow printing techniques for cloths, final,
dispensation, weaving, handicraft square measure a mark of superiority creating
each piece of material good.

 Bombay rayon fashion restricted have a industrial capability of material


accommodations of one hundred million meters every year, and garment industrial
facilities of sixty million aggregation every year, being dilated to ninety million
items every year and a robust worker base of around thirty eight,38,000; metropolis
cloth fashion restricted is these days one in all the foremost asked for brands within
the Indian additionally as world flashiness markets.

1.3.1 BACKGROUND OF PROMOTERS GROUP:

 The First fabric manufacturing of the group comes into existence at Maharashtra for
domestic fabrics on 1998 BRFL starts exports of fabrics
 Bombay Rayon Fashion Limited (BRFL) was established by Mr. Janardhan Agarwal
in 1986
 Bombay Rayon Fashion limited (BRFL) as been allotted 20.16 acres of land. In
Apparel park at Doddaballapura for location up AN integrated textile project of Yam
coloring Weaving method house and garment producing.
 Tha Total cost of integrated textile project at Doddaballapur, Bangalore at the time
initial public issues was estimated at Rs.161.72crores.

1.3.2 B0ARD OF DIRECT0RS AND C0MMITTEES:


SL.NO NAME OF DIRECTRS POSOTION
1 Chairman ( 1986 to 18th April, 2018)
Mr. JD Agrawal

2 Mr. Aman Agrawal Chairman (from 19th April, 2018)

3 Mr. Prashant Agrawal Managing Director

4 Mr. Naseer Ahmed Vice Chairman

5 Mr. A R Mundra Managerial Director (Finance)

6 Mr. Suresh Vishwa Rao Independent Director1

7 Mr. M.M. Agrawal Independent Director 2

8 Mr. A. Aru mugham Independent Director 3

9 Ms. Prachi Deshpande Director and Corporate Affairs

10 Mr. John Mathew Independent Director

1.3.3 MAJOR SHAREHOLDERS:

SL.NO NAME OF SHAREHOLDERS NUMBER OF SHARES


1 Janardhan Agrawal 75,99,422
2 Prashant Agrawal 61,62,994
3 Scott Garment Private Limited 40,00,000
4 Vinita Agrawal 38,15,980
5 BSMA Limited 46,32,920
6 Reynold shirting Private limited 30,00,000
7 Goldman Sachs Investment (Mauritius) 12,03,224
1.3.4 VISION, MISSION AND QUALITY POLICY:

Vision:

To be an entire Fashion attire company centered on total client orientation, attaining an


edge of pride for stake holders Through creation of congenial Business setting, giving
merchandise and repair par excellence.
Mission:

 Most innovation-sought once fashion attire and cloth manufacturer


 Most reliable for Shortest work time.
 Most dependable for quality, service and deliveries
 Most for good guaranteed with client, suppliers and alternative stake holders
 Most valued leader

Quality Policy:

 Improve Customer Satisfaction through delivery & service


 Improve Quality by reducing rejection
 Improve Quality by reducing reworks

1.3.5 PRODUCTS AND SERVICES PROFILE:

APPARELS:

Bombay Rayon Fashion Limited producing a good quality and comfortable garments,
durable and trendy ar the intrinsic makings of the vary of clothes accessible.

FABRICS:

Each cotton laced at b0mbay rayon fashion Limited is a portion of an implausible range of
fabric that BFRL has to proposal. To respectively fabric has one intrinsic class relief.
RETAIL:

Leader , a famous clothing brand in Italy has been secondary of Bombay Rayon Fashion
Limited since 2008. Guru consumes stores in 18 countries round the creation.

TRIMS:

through an original goal to keep quality & consistent button trade unit with in Bombay
Rayon Fashion Limited the trims separation in nowadays the largest and most urbane
control industry in India.

YARN:
In tha year 2010 Bombay Rayon Fashions Ltd with the acquisition of STI India incomplete
is devoted to continue as a world class produces of 1oo percent cotton tarn and knitted
fabric.

1.3.6 AREA OF OPERATION:

Weaving And Yarn Dyeing

Navi Mumbai and Tarapur, - Maharashtra

Bangalore, - Karnataka

Dispensation

Tarapur,- Maharashtra

Bangalore, -Karnataka

Garmenting

Islampur, Navi Mumbai, Latur, Ichalkaranji,- Maharashtra

Karnataka – Bangalore

Tamilnadu – Chennai

Kerala – Thiruvananthapuram

Maharashtra – Nani Mumbai And Tarapur

1.3.7 INFRASTRUCTURE FACILITIES:

 BRFL is concerned about environment, hence the sewage water is subjected to water
treatment and is re-utilized causing minimal water pollution.
 Employee training and development is recognized as an important factor and hence
provides facilities like training programs and personality developmental programs
 Healthy and Safety: BRFL provides all its employees with health and safe conditions
of work. Annual health camp.
 Canteen facility is available for all the employees at minimum rate/discount rate
 Transportation facility to the door step of employees.

1.3.8 COMPETITORS INFORMATION:

BRFL is the market leader in the manufacturing of Bed linen, Drapery, upholstery, silk and
Blended yarn

GLOBAL COMPETITORS:

 Crical, kazertta, Italy


 Mantero, como, Italy
 Ratti, como, Italy
 D’décor
 Veral de belval Lyon, France

NATIONAL COMPETITORS:

 Bonazza industries Ltd.


 JJ Export Ltd.
 Brabdhous retail Ltd.
 Zenith Textiles.
 Arvind mills
 Raymond ltd
 Bombay dyeing

1.3.9 SWOT ANALYSIS:

Strength:

 Technical & experienced man power


 Efficient communication network
 Reach out higher distribution channels
 Automated & highly classy machines
 Volume to meet greater demand
 The Experience of BRFL promoters is remarkable.

Weakness:
 As customer expectation is growing day to day it has become tough to Fulfil them
completely
 Lack of infrastructure facility
 Poor maintenance facilities being provide
 Due to high price in the market so company’s market share has been decrease to that of
the total market share

Opportunity:

 Capacity of meeting higher demand &attain optimum utilization of existing resource


 Scope in expansion of exports on a wider network of countries around the globe
 Increasing the number of plants to various states & giving importance to domestic
exports

Threats:

 New entrant in market may dilute the market share of the company
 Rules and regulation of the different countries may dilute the business
 Due to recession (USA) to the international market may get loss

1.3.10 FUTURE GROWTH AND PROSPECT:

Information revolution guarantees to bring the globe closer to organisation, within the rising
face of fast moving info, technology transfer is sure to happen at the next speed.as the
international borders blur provide chain management and data technology take a vital role
in attire producing. World partners within the clothing provide chain are exchanging data
electronically, so the necessity for Indian clothing trade to spruce up.

BRFL is increasing its capacities across the worth chain.10.5 million kg p.a. capability is
being more to yarn dyeing facilities to take the entire capability to 11.9 million kilo p.a. 180
million meters p.a. capability is being more to material production facilities to take the full
capability to 235 million meters p.a. And 15 million items p.a. capability is being more to
garment production facilities to take the whole capability to 75 million items p.a. New
producing units also are being started In Maharashtra (for cloth and garments) and
Bangalore, Karnataka (for Garments).
1.3.11 BALANCE SHEET:

Balance sheet of Bombay Rayon Fashion Limited from the year 2015 to 2018 is as under
(The amounts presented in Indian rupees).

(Rs. In crores)

PARTICULARS 2018 2017 2016 2015


EQUITIES AND LIABILITIES
SHARE HOLDERS FUND
Equity share capital 317.48 185.99 134.60 134.60
Total share capital 317.48 185.99 134.60 134.60
Reserves and surplus 3923.61 2419.31 2532.13 2483.28
Total reserves and surplus 3923.61 2419.31 2532.13 2532.13
Money recived against share 49.31 49.31 49.31 49.31
warants
Total share holders fund 4290.40 2654.61 2716.04 2667.19
NON CURRENT LIABILITIES
Long term borrowings 1270.69 1702.77 2547.58 2741.73
Deferred tax liabilities (net) 54.26 130.53 77.53 72.60
other long term liabilities 14.74 12.35 0.00 0.00
Long term provisions 0.00 0.00 10.30 8.18
Total non-current liabilities 1339.69 1845.65 2635.41 2822.51
CURRENT LIABILITIES
Short term borrowings 2626.59 3635.81 2744.25 2383.18
Trade payables 570.67 541.89 745.25 639.57
Other current liabilities 303.37 533.48 378.89 276.91
Short term provisions 6.03 5.42 38.78 39.71
Total current liability 3506.66 4716.60 3097.46 3339.37
Total capital and liability 9136.75 9216.86 9258.91 8829.07

ASSETS
NON CURRENT ASSETS
Tangible assets 3028.09 3175.69 3209.51 3371.79
Intangible assets 1.18 1.27 2.59 4.10
Capital work in progress 15.17 8.94 0.15 131.53
Fixed assets 3044.44 3185.90 3212.25 3507.42
Non current investment 146.57 146.57 146.52 149.49
Long term loans and advances 131.45 156.07 384.77 372.47
Other non current assets 26.41 39.25 0.00 0.00
Total non current assets 3348.87 3527.79 3743.54 4029.38
CURRENT ASSETS
Currant investment 0.00 0.00 0.11 0.11
Invent0ries 3727.15 3646.34 3241.52 2875.36
Trade receivables 1066.72 1472.29 1045.84 1154.70
Cash and cash equivalents 5.56 53.19 84.10 86.77
Short term loans and advances 45.80 72.09 783.80 682.75
Other current assets 402.65 455.16 0.00 0.00
total current assets 5787.88 5689.07 5515.37 4799.69
Total assets 9136.75 9216.86 9258.91 8829.07

CHAPTER-2

CONCEPTUAL BACKGROUND AND LITERATURE REVIEW

THEORETICAL BACKGROUND OF THE STUDY:

2.1 INTRODUCTION CAPITAL:

Capital

Capital is life lifeblood of the organization. Capital the key note of monetary growth. this
up so far age, the extent of monetary growth is ready through the measuring of wealth out
there.

as capital.

Meaning of Capital:

In tha intelligence of the term Capital suggests that gap venture capitalized by manufacturer
or possessor at a period of beginning the corporate.

Capital may be a term for money assets, like funds command in deposit accounts, also as for
tangible factors of production, i.e. producing instrumentality. in addition, capital includes
facilities, as well as buildings accustomed turn out and store factory-made product.
Materials used and consumed as a part of the producing method don't qualify

Definetion:

Capital may be a influence of manufacture with associate degree full, variable value
dedicated thereto that may, hypothetically, deliver it is holder with extra wealth. it's
associate degree intellectual financial set up, and, as such, takes numerous different
descriptions and organisations, but the amalgamating eye of capital is that it's an exact
value, so it in it self may be a spread of wealth, and it is the possible of creating extra
prosperity.

Features of Capital:

Capital has tha foll0wing structures.

1) Capital remains artificial.

2) Capital can be a recent.

3) Capital can be a golem switch conceivable.

4) Capital can be a movable.

5) Capital can be a personality's harm.

6) Capital can be a rare.

2.2 INTRODUCTION OF WORKING CAPITAL:

Employed capitaI is that the lifeblood and bravery middle of a company. even as movement
of plasma stays indispensable within the shape for keeping life, assets is incredibly
necessary to uphold the sleek running of a business. No business will run with success while
not associate degree satisfactory volume of assets.

Around a functioning options of assets i.e. curent qualitys that is recognised as capitals
conjointly active toward the corporate method from the gr 0ss assets Curent asset
encompasses money assets, inventories, saleable securities command as short-run venture
and alternative things nearer to money or adore money. assets comes into business method
once real process takes dwelling usually the duty of important of assets is set by the extent
of manufacture that be contingent up on the administration boldness in the direction of risk
and therefore the problems that impact the quantity of money, inventories, assets and
alternative present assets necessary to provision absolute’s capacity of manufacture.
Employed capital manageing as generally involved with management of the present assets
additionally to curent liabiilities. The zone take in the necessity of capitals from many
resource and to use them all told result-oriented method. It is expressed while not
overstatement that actual assets managemcnt is that the petite demand of l0ng-run sucess.

Tha position of assets founding is indubitable; Professional accountability trusts on its


capability to actual organization of assets, invent 0ry, and liabilities. By minimalizing the
quantity of funds tense up in curent assets. corporations ar proficient to scale back funding
prices or growth the funds obtainable for development. many decision-making efforts ar
place into delivery non-optimal level of curent assets and liabilities backbone near their
optimum levels.

Working capital =current assets-current liabilities


DEFINITIONS:

Various researchers’ offers several definitions concerning term assets a number of these
square measure given below.

Acording in to lensman & Brigham

Working capital refers to a organization’s venture in short assets money, short term
securities, accounts assets and stocks.

Bonerille

“Any achievement of capitals that will increase this assets will increase working capital
assets for they're one and therefore the same”.

Optimistic assets implies that the corporate is in a position to wage rotten his quick pried
liabiIities corporations that take a great deal of assets are going to be additional no-hit since
they'll expand and improve their operations.

Undesirable assets suggests that a corporation presently is incapable to fulfill its short
liabilities with its curent assets. . corporations with undesirable assets could deficiency the
capitals necesary for growing.
2.3 OBJECTIVES OF WORKING CAPITAL MANAGEMENT:

Active managemcnt of capital is ways of endeavor the firm’s penalty area of passable
liquidity. it's involved with the superintendence of curent assets and curent liabilities. it's the
most subsequent objects-

1) Near exploit revenue of the strong.

2) To facilitate in applicable imbursement of bills.

3) To keep adequate curent assets.

4) To ensure passable fluidity of the organisations.

5) It shelters tha wealth of the firm.

6) To unleash current liabilities.

7) To upsurge the value of the firm.

8) To minimalize the chance of corporate.

2.4 CLASSIFICATION OF WORKING CAPITAL:

This perpetual need and the flexible requirements are the basis for a convenient
classification scheduled the base of concept and period of working capital by way of gross,
net, regular, permanent, of follows.

2.4.1 ON THE PREMISE OF CONCEPTS:

Gross working capital

Uncultured capital is that tha volume of resources advanced in several elements of present
assets. Curent assets square measure people assets that square measure simply and straight
off restored into money inside a fast amount of your time say, Associate in Tending book-
keeping year. Existing moneys includes take advantage pointer and money at bank, Bills
assets, Inventories, Miscellaneous borrowers, quick term credits and advanecs.

This impression has the subsequent advanteges:-

a) Monetary directors square measure deeply involved with the present assets.

b) Gross capital delivers the proper quantity of capital at the proper time.

c) It permits a strong to appreciate the best come on its venture.

d) It help within the fascination of assorted zones of economic answerability.

Net working capital

Net working capital distinction among curent assets and curent liabilities. Curent liabilities
square measure those who square measure probably to mature inside Associate in Nursing
acounting year and encompass credit0rs, bills owed and out-standing expenditures.

W0rking Capital Managemcnt is not any reservation necessary for all companies, however
its implication is increased in bags of little companies. atiny low fixed has additional asset
in curent assets than mounted assets then existing assets ought to be competently
accomplished.

The capital desires rise because the stable produces. As auctions raise, the firm needs to
speculate additional in borrowers and inventories. The finance government should bear in
mind of such desires and money them quickly.

2.4.2 ON THE PREMISE OF TIME:

Permanent / fastened working capital

Perpetual or fastened capital is smallest volume that is needed to safeguard effective use of
fastened conveniences and for keeping the movement of present resources. apiece firm has
got to keep a smallest equal of physical, work- in-process, complete produce and money
stability.

Regular working capital

Regular capital mentions to the minutest quantity of fluid capital essential to stay active the
movement of the capital after the money inventories to books owed and since acc 0unt assets
to vertebral over money. It contains of passable money stability handy and at the bank,
passable routine of fresh materials and finished merchandise and quantity of assets.

Reserve margin working capital

It is extra capital wanted to satisfy sudden potentialities which will rise in future. These
eventualities might harvest informed account of rise in costs, business unhappiness, attacks,
lock-outs, fires and unforeseen competition. it's required over and higher than the regular
capital provides.

Temporary / variable working capital

Momentary / unsteady capital is that the capital desirable to satisfy repeated likewise as
sudden needs. it should be divided into 2 varieties.

Seasonal working capital

Here square measure several appearances of occupational wherever the capability of


operations square measure totally differnt and henceforward the quantity of capital differ by
the periods. The capital needed to happen the cyclical desires of the creativeness is
understood as periodic capital.

Special working capital

Tha Capital needed to satisfy any singular processes like researches with new merchandise
or innovative systems of manufacture and creating internal ad blitz etc, are called special
capital.

2.5 WORKING CAPITAL CYCLE (WCC):

Tha capital cycle (WCC) is that the volume of amount it takings to travel Infobahn curent
assets and curent liabilties convert into money. The lengthier the cycle is, the longer a
company is docking capital in its capital while not obtaining a come back thereon.
Consequently, firms struggle to scale back its capital cycle by gathering assets quicker or
from time to time extending accounts owed.

2.5.1 OPERATIONAL CYCLE:

Tha operational rotation is that the average amount of your time needed for a company to
form an explicit quantity of money to supply merchandise, sell the products, and procure
money from clienteles in oral communication for the products. If a business could be a
reseler, formerly the working cycle doesn't contain somewhat period for manufacture – it's
primarily the initiate the first money expenditure toward the day of money receiving from
the client.

Tha operational cycle is valuable for approximating tha degree of capital that a business can
would like in instruction to continue or grow its corporation. an organization with Associate
in Nursing terribly short operational rotation desires less money to keep up its processes,
and then will still grow whereas mercantilism at comparatively little limitations. Equally, a
business could have overweight margins and nonetheless still need aditional finance to raise
at even a diffident pace, if its operational cycle is remarkably extended.

In situation of a producing firm, the operational rotation is that the distance of your time
needed to finish the subsequent cycle of events –

 change of money into raw materials


 change of raw materials into work-in-progress
 change of work-in-progress into finished merchandise
 change of finished merchandise into accounts assets
 change of assets into money

Tha on top of operational rotation is continual over and completed again over the amount
dependent upon the rural area of the corporate and kind of manufacture etc. the amount of
the operational cycle for the aim of estimation capital is capable the total of length
allowable by the dealers.
2.6 BENEFITS OF WORKING CAPITAL MANAGEMENT:
a) Certifies liquidness:- Business and Trades usually get in hassle thanks to lack of money
required for operation and to repay short term debts.
b) Evades interruption in operation:- wealth running involves the utilization of magnitude
relation examination.
c) Enhance profit:- correct request of capital management plan would enhance the
company’s effectiveness within the long-standing time.
d) Expands monetary strength:- investment supervision essentially deals with the
management of money in Associate in tending business.
e) Cost totalling:- as elucidated earlier, capital enhances company’s monetary health and
operational success.

2.7 DISADVANTAGES OF WORKING CAPITAL MANAGEMENT:


a) Only financial influences:- this approach takings only financial factors in to account.
Financial lick the value of arrears receivables, the value of finished goods ect.
b) Non situational:- added demerits of employed capital managemet rule is that it is not
situatonal in nature.
c) Founded on data:- it is functions round information. It is the key sole of any
w0rking capital management stratagem.

2.8 LITERATURE OF REVIEW:

1) Raju Sharma(2012) The determination of suggestion was to consider and


evaluation the cash related explanation of no less then two special association to rate
their displays. The inflection was to have the ability to support best one among a
couple of connotation to place assets into. The explanation behind the survey was
met by taking a gander at the risk of different association , rate of give back, their
qualities and inadequacies and their future examples.

2) Joseph Jisha (2014) thoroughly inspects tha education of w0rking capital


management in Bombay rayon fashion ltd and ideas out that the fluidity and success
perfection of tha company is not acceptable, and desirable to be supported in 0rder
to be able to met its requirements in time.

3) Harsh Pratap Singh (2014) The purpose of this paper is to review analysis on
capital management (WCM) and to spot gaps within the current body of
information, that justify future analysis directions. WCM has attracted serious
analysis attention within the recent past, particularly once the monetary crisis of
2008.

4) Rathiranee (2011) Tha study pr0blem f0cused here “what did you say degree the
w0rking capital management effect tha monetary presentation of the transaction
organizations?” a sturdy important association among w0rking capital managment
and cost-effectiveness takes bcen recognised in the previ0us research.
5) Ray Sarbapriya (2012) knowledges tha connection among wateriness and
effectiveness in the manufactured industry. The journalist takes as a example 311
trade organisations for a passé of 14 years, and deliberate the result of diferent
variaables of w0rking capital management. In this learning durable adversative
relati0nship among procedures of w0rking capital managment and business
productivity consume remained experiential.

6) Joshi Lalit Kumar and Ghosh Sudipta (2012) learning of w0rking capital
performanec of bloom croft ltd peri0d 2007-08 to 2011-12. Monetary ratios take
remained aplied in determining the w0rking capital demonstration, and numerical as
weal as economtric methods have remained hand-me-down. It stayed 0bserved that
tha nominated ratios showing tha satiisfactory perforomance, and noteworthy bad
relati0nship among liqudity and profitebility is originate to happen.

7) Dr Arbab Ahmed and Dr Matarneh Bashar (2011) The view that tha registering
method is a actual use-ful arithmetical method of employed capital calculating. In
the compass of employed capital administration, it help in assembly forecast aftar
launching tha normal relati0nship in tha previous among sales and employed
capital, and its several mechanisms. Tha examination can be complete with the help
of realistic depictions or mathemetical formulary.

8) Rahman Mohammad M. (2011) efforts on the corelation between w0rking capital


and viability. An operative w0rking capital managemant takes a constructive
influence on profitebility of organisations. Fr0m tha training it is understood that in
the cloth industrial success and w0rking capital management condition are find to up
the scratch.

9) Baig Viqar Ali (2009) Goals at broadcasting relative finding the study of w 0rking
capital supervision perform of particular business firm fr 0m diary co- operative,
secluded &malty national company diary companies by way of a part of the
investigation theory accomplished in jan 2007. Beside , an effort has keep on
finished to distinguish the result of the proprietorship, management principles ,
executive authorisation and educational issue on the w0rking capital conclusion
creation.

10) Dinesh M.(2008) Explains tha perceptions of employed capiital , the changed trials
existence confronted by the busines organization in handling w0rking capital and
the approaches t0 remain accepted used for it is everyday running. Tha writer
achieves with tha maximum of the busineses unsuccessful in the revenue then for
non-existence of cash. The wild development in manufacture and sales might reason
the occupational to use for all of the monetary resoures looking for growing and
creation assets such as inventaries, accounts receivable and other assets as additional
iliquid.

11) Filbeck Greg And Krueger Thomas M. (2005) Improper their education on the
involving of w0rking captal supervision printed on CEO publications. Tha finding of
the training delivers understanding in to employed capital presentations and
employed capital administration, there is explicated by macro-economic aspects,
attention tolls, opposition, and their influence on working capital management. The
object further educations tha influence of employed capital managemcnt on share
values.

12) Bhatt V. V. (1972) extensively traces up on a technique of evaluating w 0rking


capital money requirements of big industrial apprehensions. It positions that
comparable systems necessity toward tha planed for further portions such as
farming, employment etc. The writer is of tha opinion that banks while as long as
short-term finance, quintessence their care on competence of safety and refund
volume. On existence fulfilled with these two standards they do not usually carry out
any feature assessment of the w0rking of the apprehensions.
13) Rao K.V. and Rao Chinta (1991 see the sturdy and weedy opinions of conservative
methods of w0rking capital analysis. Tha outcome takes stayed clearly assorted
though around of tha conservative methods which might understand of w 0rking
capital havioure healthy; 0thers unsuccessful in liability the work correctly.

14) Samiloglu F.and Demirgunes K (2008), deliberate tha consequence of w0rking


capital supervision on strong productivity. In agreement with aim, to reflect
statistically important relations among company effectiveness and tha instruments of
money alteration series at distance, a example containing of Mumbai Stock
Exchange registered

15) Kouma Guy18, (2001) the very studies on, “W0rking capital managemcnt in health
care”, assets is that the needed to finance the daily processes of a company. assets
could also be need to bridge the gap among shopping for of supplied with things to
ultimate expense for product oversubscribed on account. assets conjointly must fund
the gap once merchandise ar to be had however being command available.

16) John kwaku mensah mawutor (2015) Tha core detached of studies was create a
arithmetical association among effectiveness slow by the reappearance on asset and
the basics of w0rking capital such as the money change series, age gathering dated,
age imbursement period, inventory turn0ver days.

17) Navena nesa kumari (2017) Tha determination of study is to analyse the climate
w0rking capital managemcnt cannister move the business profitebility of vehicle
segment in india. sum preceding research might have deliberate the relative among
w0rking capital managemcnt and profitebility, but those research failed to discourse
the sector wise issues of w0rking capital management.

18) Mohammad Talha (2015) Working capital management nearly always determines
the power of a firm to earn profit. potency with that a firm handles capital ensures
prosperity whereas neglect would spell danger for the terribly survival of the firm.
The study focuses on the impact of capital management on gain of hand-picked
Indian company hospitals. The time span is 10 years from 1996 to 2006. The results
of multivariate analysis denote that the present quantitative relation, money turnover
quantitative relation, proportion of current assets to in operation financial gain and
leverage have a negative influence on gain. Stepwise multivariate analysis has
known seven outstanding variables that considerably influence gain

19) Arun Kumar O N (2013) The connotation examination displays that the businesses
success is a extremely prejudiced by the mutable connecting to assets employed is
analyzed in this is training. the writer put on corelation analysis to identify the
effects of these variables on profitebility. we conduct compassion analysis to bargain
the range of return on assets to the level of self-determining variaebles.

20) Lalit (2012) The experiential results revel important optimistic trend development in
most of the certain performence pointers. Further the selected ratios show acceptable
performence during the education period. Metals test also indicates significant
upgrading in liqcidity performence during the said period.

CHAPETR-3

RESEAECR DESIGN

3.1 TOPIC CHOOSE FOR THE STUDY:


A STUDY ON WORKING CAPITAL MANAGEMENT WITH SPECIAL
REFERENCE TO BOMBAY RAYON FASHION LIMITED DODDABALLAPURA.

3.2 STATEMENT OF THE PROBLEM:

Working capital constitutes 40% to 60%of total funds active in a business. Deficit amount
of working capital disturbs routine operation of the organization. Whereas surplus working
capital leads to loss of returns on capital employed. Therefore working capital need to be
maintained in a firm at an optimum level. That means neither it is a surplus nor it is deficit.
The current project being carried out to find optimum working capital for firm by using the
following methods.

1) RATIOS ANALYSIS

2) CHANGES IN WORKING CAPITAL

3.3 NEED FOR THE STUDY:

The study helps to measure the financial position of the company. Ratios analysis and fund
flow analysis is accomplished for the various business reason and it is a basic instrument for
measuring the financial data related of any company. It helps to part of the budgetary
examination is to show the cash related status of the company and know the profitability of
the organization. This study helps to know is tha working capital requirement of a
origination.

3.4 OBJECTIVE OF THE STUDY:

 To measure the financial situation of the company in relations of profitability and


liquidity.
 To evaluate the performance of the organisation 0ver a peri0d of time.
 To measurement of the w0rking capital and its changes.
3.5 SCOPE OF THE STUDY:

Tha sc0pe of the study please collecting the monetary records of the Bombay rayon fashion
limited to particular division. The analysis made by the suggestion giving two possible
solution using the ratio analysis and comparative statement analysis of a company past
present and futures performance and decision making of the firm’s can be analysed. The
steady as been placid with the helps of data operator after audited financial data. The 3 years
yearly report confined and different tools can be used for research.

3.6 RESEARCH METHODOLOGY:

The project stated on 3 of January 2019 as per schedules. There was a previous activities
schedule with individually division heads in step with their accessibility.

In managemeent, organization study will be outlined as investigation of any administration


performs trailed with within the organization, the only shibboleth here was to know the
roles of all the sections and their mutual coordination. information needed to create this
study report has been calm in one pleat ways that.

It is a study supported secondary information analysis

Secondary data:- It is a data already excite and record data in company website and annual
reports.

3.6.1 SECONDARY SOURCES:

Information calleting from different sources,

 Company annual records


 Company audit reports
 Different records of company
 Website of the company
3.6.2 TOOLS FOR THE ANALYSIS:

 Ratio analysis
 Changes in working capital

3.7 HYPOTHESES:

H1:- The Company Is comparatively More Depending On Working Capital For Its Daily
Operations.

H0:- The Company Is comparatively Less Depending On Working Capital For Its Daily
Operations.

3.8 LIMITATIONS OF THE STUDY:

 A study been confined to working capital assessment from the past 4 years financial
statement.
 The study being solvency position ascertain shortterm solvency situation of the firm’s.

 There are some facts and figures which are considered to be confidential and hence
complete data is not available.

 Tha major part of tha analysis as been based on financial reports.

 The investigation related on annual report of the company.

 The project pried only limited of 6 weeks.

3.9 CHAPTER SCHEME:

Chapter-1 Introduction.

Introduction about internship, Industry information , Company information, Promoters,


Vision, Mission & Quality Policy, Products and services profile, Areas of operation,
Competitor’s info , SWOT Analysis, Future growth and prospects and Financial Statement.

Chapter-2 Conceptual Background And Literature Review.

Theoretical background of working capital management, literature review.


Chapter-3 Research Design.

Statement of the problem, Need for the study, Objectives, Scope of the study, Research
methodology, Hypotheses, Limitations,

Chapter-4 Analysis And Interpretation.

Analysis and interpretations of financial data. Tables, Graphs, analysis tools.

Chapter-5 Findings, Conclusion And Suggestions.

Summary of findings, conclusion, suggestions,

CHAPTR-4:

DATA ANALYSIS AND INTERPRETATIONS

SECONDARY DATA WHICH INCLUDES:

Interior information- these square measure the businesses own data that they provided lick
organization structures, record, annual reports electroshock therapy.
Limitation

 A study been confined to working capital estimation from the part of 3 years
financial statement.
 The study being solvency position ascertain short term solvency position of the firm.
 The solvency rati0s have l0ng-term view while other class ratio is primarily
absorbed to sh0rt-run.
 For the analysis of the liquidness the following liquidity ratios were used in the
research, the ratios are as follows:

4.1 RATIOS ANALYSIS:

1) Current Ratios.
2) Quick Ratios.
3) Working Capital turnover Ratios.
4) Current asset turnover Ratios.
5) Inventory turnover Ratios.
6) Current asset turnover shareholders Ratios.
7) Current liabilities to shareholders Ratios.

4.1. CURRENT RATIOS:

Significance:

The Curent ratio is an pointer of the organization’s obligation to meet it’s sh 0rt-term
liabilities i.e. it represent the margin of safety of creditors. Tha current ratios express the
relationship of curent assets to curent liabilities of the BOMBAY RAYON FASHION
LTD (BRFL). It reveals how much of current liabilities of a firm are covered by current
assets.

Standard:

Tha stand current quantitative relation is 2:1. The of 2:1 is taken into account as a margin of
financial condition thanks to the very fact if the present ar reduced to half i.e. rather than
two then conjointly the creditors are able to get their payments fully.

FORMULA:

Current assets

Current ratio =
Current liabilities

TABLE 4.1

Table showing the CURRENT RATIO of BRFL from the year 2016 to 2018

(Rs. In crores)

Years Current Assets Current Current Ratios


Liabilities
2015 4779.69 3339.37 1.43

2016 5515.37 3097.46 1.78

2017 5689.07 4176.60 1.36

2018 5787.88 3506.66 1.65

Analysis:

The above table shoes the current ratio in the year 2015 (1.43) it has been increased in year
2016 (1.78 ),again its has been decrease in year 2017 (1.36).and increased (1.65) in the year
2018.

GRAPH 4.1

Graph showing the CURRENT RATIO of BRFL form the year 2016 to 2018
2
1.78
1.8
1.65
1.6
1.43
1.4 1.36

1.2

0.8

0.6

0.4

0.2

0
2015 2016 2017 2018
Col umn1

INTERPRETATION:

The graph 4.1 clearly indicates that the current ratios for the period of study is more then
current liabilities, current ratio as been increased in the year 2017 to 1.78, the compering
the year 2015, again it was decreased in 1.36 in the year 2017 and increased 1.65 in the year
2018.

4.2 QUICK RATIO:

Significance:

This magnitude relation founds a association among fast or runny plus and curent . associate
degree plus is liquid if it are often born-again into money directly while not a lot of loss of
values. it's indicated the extent to that the concern will pay its current liabilities while not
looking forward to the sale of inventory. The quick assets and current liabilities of BRFL
are taken for a period of 3 years. The table 4.2 given clear picture about the quick ratio of
the company.

Standard:

The quick ratio 1:1 considered satisfactory the current financial conditions.
FORMULA:

Quick Assets

Acid Test Ratio =

Current Liabilities

Where Quick Assets= Current Assets-(Stock +Prepaid Expenses)

TABLE 4.2

Table showing tha QUICK RATIO of BRFL for the year 2015 to 2018

(Rs. In crores)

years Quick assets Current liabilities Quick ratio


2015 1924.33 3339.37 0.57
2016 2273.85 3907.49 0.58
2017 2042.73 4716.60 0.43
2018 2060.73 3506.66 0.58

Analysis

Table showing the company’s quick- ratio of the year 2015 is 0.57 and it has been increased
0.58 in the year 2016 and it has been come down 0.43 in the year 2017 and again increased
0.58 in the year 2018.the quick ratio in the tear 2016 and 2018 in remain same.

GRAPH 4.2

The graph shoeing quick ratio of the BRFL from the year 2016 2017 to 2018
0.7

0.6 0.57 0.58 0.58

0.5
0.43
0.4

0.3

0.2

0.1

0
2015 2016 2017 2018
Col umn2

Interpretation:

The graph 4.2 shows that company quick ratio is acceptable of more than industry standard .
In the year 2015 it was 0.57 then increased to 0.58 in the year 2016 and it has come down to
0.43 in 2017 and again increased in 0.58 in year 2018.

The ideal ratio the quick ratio is 1:1 in case of BRFL liquidity ratio is not exceeds the
normal in every year so it performance respect of liquidity is satisfactory

4.3 WORKING CAPITAL TURN OVER RATIO:

SIGNIFICANCE
It indicates the speed of the use working capita this ratio shows the association among the
sales and the w0rking capital of the company. This relation shows the amount of periods
working capital is termed over in a standard period the ratio indicates efficient or in-
efficient use of tha w0rking capital of an firm’s.

FORMULA:

Net Sales

Working Capital Turnover Ratio= _________________

Net Working Capital

Where net sales = total sales – sales return

Net w0rking capital = current assets- current liabilities

TABLE 4.3

Table Showing Working Capital Turnover Ratio Of BRFL From The Year 2015 ,
2016.2017 And 2018:
(Rs. In crores)

Working capital
Years Net sales Net working turnover ratio (in
capital times)
2015 3532.67 1460.32 2.42
2016 4171.62 1607.91 2.59
2017 3876.96 972.47 3.98
2018 3088.36 2281.22 1.35

Analysis:

This table shows tha w0rking capital turn-over ratio, this ratio as increased in 2.42 ,in tha
year 2015 and increased in 2.59 in 2016 again increased 3.38 in 2017 and decreased in the
year 2018 in 1.35.
GRAPH 4.3

The graph showing the working capital turnover ratio of BRFL from the year 2015- 16
to 2017-18

4.5
3.98
4

3.5

3
2.59
2.5 2.42

1.5 1.35

0.5

0
2015 2016 2017 2018
Col umn2

Interpretation:

In general standard of this ratio is high in times. The ratio has been increasig from the year
2015 to 2017. In the year 2018 will be decreased in 1.35.which is a bad sign.

From the study, it is clear that. In the year 2018 the ratio is lowet than all other year.
Therefore , it can be considered that there is higest invesment in working capital.

4.4 WORKING CAPITAL TO TOTAL ASSETS RATIO:

Significance:

W0rking capital to the over-all assets ratio is the ratio between t0tal assets and working
capital. This ratio is the contribution of working capital to total assets. The year wise
working capital to over-all assets of BRFL is given in the table.
Standard

There is no ideal current assets turnover ratio. But in general the higher Curent assets turn-
over ratio shoes well use of current assets and lesser the current assets turnover ratio
indication lesser utilization of the curent assets of the firm.

FORMULA:

Working Capital

W0rking Capital To Total Assets =

Total Assets

TABLE 4.4

Table showing the WORKING CAPITAL TO TOTAL ASSETS RATIO of BRFL from
the year 2015-16 to 217-18

(Rs.in crores)

W0rking Capital
Years W0rking Capital T0tal Assets To Total Assets ( In
Tine)
2015 1460.32 8829.07 0.16
2016 1607.91 9258.91 0.17
2017 972.43 9216.86 0.10
2018 2281.22 9136.75 0.25

Analysis:

This table showing the working capital ta total assets ratio of every year. This ratio
increased 0.17 in the year 2016 camper to 2015 in 0.16,again it has been reduced to 0.10 in
tha year 2017, later it was improved to 0.25 in the year 2017-18.

GRAPH 4.4
Graph showing the w0rking capital to total assets ratio of BRFL form the year 2015-16
to 2017-18.

1 1 2 2 3 3 4 4
0.3

0.25
0.25

0.2
0.17
0.16
0.15

0.1
0.1

0.05

0
2015 2016 2017 2018
worki ng ca pi ta l to tota l as s ets ratio

Interpretation:

This ratio shows whether or not w 0rking capital has been competently used in making
capital. this ratio is a liquidness ratio that expresses the net assets or working capital of a
company. This ratio was increased 2015 to 2016 is 0.01.and again decreased in the year
2016 (0.17) to 2017 (0.10) i.e 0.07 and father increased in the year 2018 (0.25) i.e. (0.15).

4.5 INVENTORY TURNOVER RATIO:

Invent0ry turnover magnitude relation is Associate in Tending ability magnitude relation


that shows however with success inventory is managed by examination coat of products
oversubscribed with a inventory for a amount. It means that the speed at that the inventory
are recreated into sales, there by underwriting for the profit of the priority. This magnitude
relation is considered as follows.
FORMULA:

Net sales

Inventory turnover ratio =

inventories

TABLE 4.5

Table showing the inventory turnover ratio of BRFL in the year 2015-16 to 2017-18.

(Rs. In crores)

Inventory
Years Net Sales Inventories Turnover Ratio
2015 3532.67 2875.36 1.23
2016 4171.62 3241.52 1.28
2017 3876.96 3646.34 1.06
2018 3088.36 3727.15 0.82
Source: balance sheet and company annual reports ( secondary data):

Analysis:

Inventory turn-over ratio is 1.23 in tha year 2015 and increased in 1.28 in a year 2016, again
father decreased in the year 2017 was to 1.06,again decreased to 0.82 in the year 2018.

GRAPH 4.5

Graph shows the inventory turnover ratio of BRFL from the year 2015-06 to 2017-18.
2 2 3 3 4 4
1.4
1.28
1.23
1.2
1.06
1 1
1

0.82
0.8

0.6

0.4

0.2

0
2015 2016 2017 2018
i nventory trunover ratio

Interpretation :

This quantitative relation indicates whether or not invent 0ry partakes remained used or not.
It showing the speed with that the stock in turned into sales or the quantity of your time the
inventory is become sales throughout the year. the upper the quantitative relation, the higher
it's, since it indication that inventory is mercantilism late. In s business wherever inventory
turnover quantitative relation is low, not product are often oversubscribed at a coffee margin
of profit and even the profitableness could also be quite high. The quantitative relation is
extremely low within the year 2018 thus inventory is mercantilism late.

4.6 CURRENT ASSETS TO SHAREHOLDERS FUND RATIO:

This ratio shows the how much money of shareholders did company management invest in
current assets, share holders can get both item from current balance sheet.
FORMULA:

Current Assets

Current Assets To Shareholders Fund Ratio =

Shareholders Fund

TABLE 4.6

This table showing the Curent Assets to shareholders fund ratio of BRFL.

(Rs. In crores)

Years Currents Assets Shareholders Fund Ratio


2015 4799.69 2667.19 1.76
2016 5515.37 2716.04 2.03
2017 5689.07 2654.61 2.14
2018 5787.88 4290.40 1.34

Analysis:

This table showing the Curent assets shareholders fund Ratio in a year 2015 is 1.76 it eats
remained improved to 2.03 in tha year 2016 and again it has been improved in the year 2017
(2.14) and2017 to 2018 is decreased to 2.14 and 1.34 respectively.

GRAPH 4.6

This graph shows the CURRENT ASSERTS to shareholders fund ratio of BRFL
3 3 4 4
2.5

2.14
2.03 2 2
2
1.76

1.5
1.34

1 1
1

0.5

0
2015 2016 2017 2018
current as s erts to s ha rehol ders fund ratio

Interpretation:

This graph shows the association among curent assets and shareh 0lders fund. If current
assets of the company are more than the shareholders fund, it shows a favourable financial
situation of the company. The current assets of all the years is more then of shareholders
fund and hence hence the financial position is good.

4.7 CURRENT LIABILITIES TO SHAREHOLDERS FUND RATIO:

FORMUA:

Current Liabilities

Current Liabilities To Shareholders Fund =

Shareholders Fund

TABLE 4.7

This table shows the DEBIT RATIO of BRFL.


Years Current Liabilities Shareholder Fund Ratio
2015 3339.47 2667.19 1.25
2016 3907.46 2716.04 1.43
2017 4716.60 2654.61 1.78
2018 3506.66 4290.40 0.81

Analysis:

This table sh0ws the current liability to share holder fund ratio in the year 2015 is 1.25 it has
remained increasing to 1.43 in the year 2016 , again it was improved rapidly in 2017 &
decreased in 0.18 in the year 2018 .

GRAPH 4.7

Graph showing the current liabilities to share holders fund ratio of BRFL from the
year 2015-16 to 2017-18.

2
1.78
1.8

1.6
1.43
1.4
1.25
1.2

1
0.81
0.8

0.6

0.4

0.2

0
2015 2016 2017 2018
Seri es 3

Interpretation:

This ratio showing the relationship between current liability to the share holders fund . if the
current liability of the company more than the shareholder fund , its shows a non favourable
financial position of the company. Current liability of the year 2015-16 to 2016-17 , more
than that of shareholders fund and hence the financial position is non positive . in the year
20178 current liability less than the share holder fund & hence the current year financial
position in favourable of the company .

4.8 CHANGES IN WORKING CAPITAL:

Changes in capital associate degreealysis in an operative administration t 00l to check of


fluctuations within the capital ( money position ) of the organization between starting and
ending financial plan date. Fund flow examination involves preparation of schedule of
changes in w0rking capital.

A fluctuations in w0rking capital is that the variance within the internet capital amt as of 1
accounting amount to the subsequent. A goal of management is to cut back any rising
changes in capital, there by minimizing the necessity to herald additional fundinf.

Schedule of changes in working capital statement are made to show:

 Increased and decreased in total data in terms of money values.


 Total data (money values or rupee amount ).
 Working capital position of the organization.

TABLE 4.8.1

STATEMENT SHOWING CHANGES IN WORKING CAPITAL FOR THE YEAR


2017 AND 2018. (Rs. In crores)
Increased In Decreased
Particulars 2017 2018 WC In WC
Current Assets
Inventories 3646.34 3727.15 80.81
Trade receivables 1472.29 1606.72 134.43
Cash & cash equivalents 53.19 5.56 47.63
Short term Loans and 72.09 45.80 26.29
advances
Other current assets 445.16 402.65 42.51
Total Current Assets 5689.07 5787.88

Current liabilities
Short term borrowings 3635.81 2626.59 1009.22
Trade payables 541.89 570.67 28.78
Other current liabilities 533.48 303.37 230.11
Short term provisions 5.42 6.03 0.61
Total Current Liabilities 4716.60 3506.66
Total 1454.57 145.82
Net increased 1308.75 1308.75
Working capital 972.47 2281.22
TOTAL 2281.22 2281.22 1344.57 1454.00

Analysis And Interpretation:

Around is a net growth in w 0rking capital due to reduction in creditors and increase in
current assets such as inventories. and decrease in cash and, short term loans and advances,
and other curent assets .Net increased in working capital is by 1308.75cr. the inventories
for the year has been increased which means increased in stock turnover which might to
increase in credit sales. Cash has been used to pay creditors which in turn resulted in
decreased in cash.

TABLE 4.8.2

STATEMENT SHOWING CHANGES IN WORKING CAPITAL FOR THE YAER


2016 AND 2017. (Rs. In crores)

Increased In Decreased
Particulars 2016 2017 WC In WC
Current Assets
Curent -investments 0.11 0.00 0.11
Inventories 3241.52 3646.34 404.82
Trade receivables 1405.84 1472.29 66.45
Cash & cash equivalents 84.10 53.19 30.91
Short term Loans and 783.80 72.09 711.71
advances
Other curent assets 0.00 445.16 445.16
Total Current Assets 5515.37 5689.07

Current liabilities
Short term borrowings 2744.25 3635.81 891.56
Trade payables 745.54 541.89 203.65
Other current liabilities 378.89 533.48 154.59
Short term provisions 38.78 5.42 33.36
Total Current Liabilities 3907.46 4716.60
Total 1153.44 1788.88
Net decreased 635.44 635.44
Working capital 1607.91 972.47
TOTAL 1607.91 1607.91 1788.88 1788.88
Analysis and interpretation:

This statement shows the net decreased in working capital because increase in trade
receivables and increase in current assets such as current investment, cash and cash
equivalents. Net decreased in working capital is by 635.44cr. . the inventories for the year
has been increased which means increased in stock turnover which might to increase in
credit sales. Cash has been used to pay creditors which in turn resulted in decreased in cash.

TABLE 4.8.3

STATEMENT SHOWING CHANGES IN WORKING CAPITAL FOR THE YAER


2015 AND 2016. (Rs. In crores)

Increased In Decreased
Particulars 2015 2016 WC In WC
Current Assets
Currents investments 0.11 0.11 - -
Inventories 2875.36 3241.52 366.16
Trade receivables 1154.70 1405.84 251.14
Cash & cash equivalents 86.77 84.10 2.67
Short term Loans and 682.75 783.80 101.05
advances
Other current assets 0.00 0.00 - -
Total Current- Assets 4799.69 5515.37

Current liabilities
Short term borrowings 2383.18 2744.25 361.07
Trade payables 639.57 745.54 105.97
Other current liabilities 276.91 378.89 101.98
Short term provisions 39.71 38.78 0.93
Total Current Liabilities 3339.37 3907.46
Total 719.28 571.69
Net decreased 147.59 147.59
Working capital 1460.32 1607.91
TOTAL 1607.91 1607.91 719.28 719.28

Analysis and interpretation:

This statement shows the net decreased in working capital because increase in trade
receivables and increase in current assets such as current investment, cash and cash
equivalents. Net decreased in working capital is by 147.59cr. The inventories for the year
has been increased which means increased in stock turnover which might to increase in
credit sales. Cash has been used to pay creditors which in turn resulted in decreased in cash.
CHAPTER-5

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS:

 The company is running under the loss and as adequate volumes for the daily business.
 It is found that BRFL has not investment in current assets in the year 2016-17 and
2017-18.
 We can observe from the current ratio that the company has maintained below the
standard curent quantitative relation this quantitative relation is simply too a lot of
but the conventional quantitative relation of 2:1, weakening the short economic
condition of the business.
 Current assets shareholder fund ratio of the proprietary fund capitalized in curent assets
for the company showing increase trend of 2016-2017 but decrease in 2017-2018.
 The Ratio showing the connection among curent assets and curent liabilities to the share
holders fund if the current liabilities of the company more than the shareholder fund it
shows a non-favourable of the company .
 The current assets as been increased in every years.
 Compare the each years cash and cash equalists has been decreased because company
more invest in current assets.
 The inventory turnover ratio is changing when we comparing the 4 years in 2015 to
2018.
 Increasing the W0rking capital turnover ratio has been in the years 2015 to 2017 and
current year 2018 will be decreased which is bad sign.
 The changes in working capital has decreased in the years 2015-2016,and 2016-2017
,and increasing in 2017-2018.

SUGGESTIONS:

 The company has inceres can liquidity position when they has increase their current
assets and quick assets.
 The company has focus on controlling and reducing its operating expenses.
 The company needs to concentrate increase current ratio so company need to
increase the current assets and quick assets and decrease current liabilities.
 Company try to improving cash balance it is help full to any future estimation
projects.
 Mange obtaining and record, prudent inventory management is a very important
think about creating the foremost of your capital.
CONCLUSION:

I have done project an “ WORKING CAPITAL MANAGEMENT AT BOMBAY RAYON


FASHOIN LIMITED’’ get practical knowledge and good experience about how company’s
financial position is running in the business.

According to my knowledge , this project report helped me to study of working capital


management analysis of Bombay Rayon Fashion Ltd.

I have founded that the company’s current liabilities are decreased comparing the privies
year and current assets was been increased year to year so its shows that company running
well and efficient work.

The overall working position of the company employed capital is measured to be lifecycle
of the business without which firms daily business operation canot stay carried out.
Holding the excessive working-capital leads to loss of results. Where has deficit amount of
working capital leads to supply in the operating activities from the project been carried out
optimum working capital been suggested through various ratios and through changes in
working capital analysis. The estimation of contingency been done through various analysis.
BIBLIOGRAPHY:

Financial management. By – Prasanna Chandra. 6th edition

Annual reports of Bombay Rayon Fashion Limited.

Financial statements of Bombay Rayon Fashion Limited.

Websites:

www.bombayrayon.com
ANNEXURE:

Balance sheet for the year 2015-2018 ( Rs. In crores )

PARTICULARS 2018 2017 2016 2015


EQUITIES AND LIABILITIES
SHARE HOLDERS FUND
Equity share capital 317.48 185.99 134.60 134.60
Total share capital 317.48 185.99 134.60 134.60
Reserves and surplus 3923.61 2419.31 2532.13 2483.28
Total reserves and surplus 3923.61 2419.31 2532.13 2532.13
Money received against share 49.31 49.31 49.31 49.31
warrants
Total share holders fund 4290.40 2654.61 2716.04 2667.19
NON CURRENT LIABILITIES
Long term borrowings 1270.69 1702.77 2547.58 2741.73
Deferred tax liabilities (net) 54.26 130.53 77.53 72.60
other long term liabilities 14.74 12.35 0.00 0.00
Long term provisions 0.00 0.00 10.30 8.18
Total non-current liabilities 1339.69 1845.65 2635.41 2822.51
CURRENT LIABILITIES
Short term borrowings 2626.59 3635.81 2744.25 2383.18
Trade payables 570.67 541.89 745.25 639.57
Other current liabilities 303.37 533.48 378.89 276.91
Short term provisions 6.03 5.42 38.78 39.71
Total current liability 3506.66 4716.60 3097.46 3339.37
Total capital and liability 9136.75 9216.86 9258.91 8829.07

ASSETS
NON CURRENT ASSETS
Tangible assets 3028.09 3175.69 3209.51 3371.79
Intangible assets 1.18 1.27 2.59 4.10
Capital work in progress 15.17 8.94 0.15 131.53
Fixed assets 3044.44 3185.90 3212.25 3507.42
Non-current investment 146.57 146.57 146.52 149.49
Long term loans and advances 131.45 156.07 384.77 372.47
Other non-current assets 26.41 39.25 0.00 0.00
Total non-current assets 3348.87 3527.79 3743.54 4029.38
CURRENT ASSETS
Current investment 0.00 0.00 0.11 0.11
Inventories 3727.15 3646.34 3241.52 2875.36
Trade receivables 1066.72 1472.29 1045.84 1154.70
Cash and cash equivalents 5.56 53.19 84.10 86.77
Short term loans and advances 45.80 72.09 783.80 682.75
Other current assets 402.65 455.16 0.00 0.00
total current assets 5787.88 5689.07 5515.37 4799.69
Total assets 9136.75 9216.86 9258.91 8829.07