1.

1 INTRODUCTION
The success and progress of any firm is depends upon the Financial performance.
Finance is one of the most requisites of a business and a modern management,
obviously depends largely on the efficient management of finance. Finance places a
vital role in determining the strength, weakness and control funds of the organization,
without Finance no organization can perform its activities in modern enterprises.

Every business in this world is directing its production activities towards the end goal
of economic development. A developing company requires an increasing volume of
investments not only in the fixed assets but also in working capital. Because of lack
of proper investment, the rate of growth of such entities depends to a great extent on
the effective utilization of its capital.

Working capital is an important for efficiently carrying out the day to day operations
of every organization. In all concerns the problem of effective working capital
management is of paramount significance as considerable amount of funds are
invested in the forms of various current assets. In the absence of proper and efficient
management of working capital, it would be difficult to achieve the basic objectives
of organizational efficiency.

The present study is undertaken with a view of analyzing the working capital
position of the company and to understand how the inventories, receivables
management and cash management works. The present study is expected to throw
light into the way in which the working capital is utilized in the TRACO CABLE
LTD.

1.2 SIGNIFICANCE OF THE STUDY

Capital is the key input of the production, distribution and development. Therefore it
can be described as the life blood of industry and is pre- requisite for accelerating the
process of industrial development. Working capital is the nerve center of every
business concern and undertaking can work efficiently without adequate amount of
working capital. Working capital has to be regarded as one of the conditioning
factors in the long run operation of the firm. Because, the adequate amount of

1
working capital or current assets, long term investments or fixed assets cannot
function.

The need of the study is to analyze the working capital position of the company and
to understand how the inventory, receivables management and cash management
works. The study in TRACO CABLE COMPANY is very important because of the
scale of the company. The study is very helpful to know the working capital
management. It also helps in ascertaining how the company performs in future. This
study will help the firm to projections of working capital requirements for the next
two years. This study also helps to understand the liquidity and profitability of the
company.

1.3 SCOPE OF THE STUDY

The scope of the study is limited to the working capital management of TRACO
CABLE COMPANY LTD, which is one of the Government undertakings
functioning in Kerala. The study has been done for a period of 5 years from 2012-
2013 to 2015-2016

The study is designed to cover the analysis of working capital, liquidity and solvency
position of the company on the basis of figures taken from financial statement
published by it. The study of working capital is based on tools like ratio analysis,
operating cycle,etc. using the study the firm can get the necessary information to
analyze and formulate strategies to improve the working capital position of the
company

1.4 OBJECTIVE OF THE STUDY

PRIMARY OBJECTIVE

 To study the working capital management of TRACO CABLE COMPANY

SECONDARY OBJECTIVES

 To analyse the ratios in relation to working capital

 To study the effect of working capital management of the company with respect to
o Cash Management

2
 o Inventory Management
o Receivable Management
o Creditors Management
 To suggest suitable measures for the improvement of working capital

1.5 LIMITATIONS OF THE STUDY

Time is the most important constraint. The study is mainly based on secondary data.
Findings and conclusions of its study are based on the information given in the
annual reports of the company and are valued only with respect, to figures given
there. Through adequate measures have been taken to verify the reliability of the
secondary data, possibility of normal errors inherent to research, cannot be
completely avoided.

3
2.1 INDUSTRY PROFILE
2.1.1 Introduction
Early telegraph system was the first form of electrical cabling, but transmitted only
small amounts of power. Gutta-percha insulation used for the first time transatlantic
cables was unsuitable for building writing use since Gutta-percha deteriorated rapidly
when expose to air. The first power distribution system developed by Thomas Edison
used copper rods, wrapped in jute and placed in rigid pipes filled with a bituminous
compound. Although vulcanized rubber had been patented by Charles Goodyear in
1844, it was not applied to cable insulation until the 1880s, when it was used for
lighting circuits.

Rubber-insulated cable was used for 11000 volt circuits in 1897 installed for the
Niagara Falls Power Project. Oil-impregnated paper insulated high voltage cables
were commercially practical by 1895. During Second World War several varieties of
synthetic rubber and polyethylene insulation were applied to cables. Modern power
came in variety of size, material and type, each particularly adapted to its uses. Large
single insulated conductors are also sometimes called power called power cables in
the trade.

Cable consists of three major components, namely conductors, insulation protection.

The constructional detail individual cables will vary according to their application.
The construction and material are determined by three main factors:- working
voltage, which determines the thickness and composition of insulation ;- current
carrying capacity, which determines the cross-section of the size of conductors;-
environmental conductors such as temperature, chemical or sunlight size of exposure,
and mechanical impact, which determines the form and composition of the cable
jacket enclosing conductors. Since power cable must be flexible, the copper or
aluminium conductors are made of stranded wire, although very small cable may use
solid conductors. The cable may include an insulated conductor used for the circuit
neutral or for ground [earth] connection.

4
The overall assembly may be round or flat. Filter strands may be added assembly to
maintain its shape. Special purpose power cable for overload vertical use may have
additional elements such as steel or Kevlar structural support. For circuits opening at
2400 volts between conductors or more, shield may surround each conductor. The
equalizes electrical stress on the cable insulation. The technique was patented by
Martin Hochstetler in 1916, and the shield is sometimes called Hochstetler shield.
The individual conductor shields of a cable are connected to earth ground at one or
both ends of a length of cable.

2.1.2 World Scenario

The economic liberalization and industrial globalization lead to spectacular
development of the infrastructure such as buildings, roads and cables are the crucial
element that wire up the length and breadth of the countries as power and telecom
networks. Now the world is all set to see a "war of the accesses" with ever
increasing demand for cables and conductors. World have learnt with time the “
philosophy of co-operation and co-existence” obviously leading to pooling of both
technical and financial resources for a better economically viable environment for
industrial growth and development.

2.1.3 Indian Scenario

INDIA has made remarkable progress in recent years in the manufacture of cables
and conductors. The country has not only achieved self-sufficiency in this field but
has also made a big head way into the international market. Rural electrification and
telecommunication networks undertaken by various state governments as part of
national policy lay the crucial infrastructure backbone for the recently liberalized
industry with increased Private Public Participation (PPP) and privatization.

The investment strategy of the government primarily relies on promoting investment

through a combination of public investment with private investment participation.
PPP will promote and streamline strategies for future development and management
of the economic and social infrastructures ensuring effective use of resources, access

5
to modern technology, timely implementation and operation for rapid economic
growth. The Indian economy grew at an average annual rate of 9% in 2008 before
global economic meltdown.

Despite the adverse circumstances Indian economy grew by 6.7% in 2009, 7.9% in
2010, and 8.5% in 2011 and is expected to achieve a growth rate of 9% in the year
2012. The telecom sector and the power sector needs infrastructure development
which is crustal for fueling for the growth for the economy however power shortage
remain a problem in many part of the country and the distribution segment (transition
and distribution) shows steady growth in the requirement for cables and conductors.

In the telecom sector private investment increased from Rs.6crores in 2003 to

Rs.51crores in 2010 and competition and access to consumers seems to be the
driving force. Therefore the pace of economic and social development of the nation
depend to a very large extend of the development of infrastructure in the power
sector as well as in the telecommunication sector.

The market segmentation and structure of the cable industry in India are there both in
Power sector as well in Telecom sector. Power cables are segregated into high and
low voltage varieties. Telecom cables are classified as high capacity cables (Optic
Fiber Cables) and low capacity cables (Jelly Filled Telecom Cables). Organized
players have higher presence in Indian Telecom sector since it involves higher capital
and technology inputs when the higher presence of unorganized players in Indian
power cables segment is evident for reasons of low investment.

The current scenario prevailing in the Indian cables industry has ample focus on
government policy along with demand- supply position. In this context, special focus
has been given to the impact of government decisions on the industry for direct
foreign investment putting an end to Public sector monopoly in the Industry

6
2.1.4 State Scenario
Emphasis is given for 100% electrification giving importance to rural electrification
as a government policy in Kerala State. Moreover telecommunication network is
wide spread all over the state including remote rural areas. Power connection and
telephone connection have become a basic need for everyone in the state. Due to the
onslaught of the mobile phones, in the country, the requirement for telecom cables
are diminishing in the state also. TRACO in public sector and around ten
manufacturers in the private sector compete in the market for power cables and
conductors in the state.

TRACO has got a manufacturing capacity of 6000 metric ton conductors/per annum,
where as the manufacturing capacity of all the private manufacturers taken together
constitute only 5500 metric ton/per annum. All the private companies are located in
the southern part of the state in Trivandrum and Kollam district. TRACO is
logistically located at central Kerala. When Kerala State Electricity Board floats
tenders for conductors the private manufacturers does not quote for consignees at
northern part of Kerala due to high transportation cost. Hence TRACO has got a
monopoly in bare conductors, distribution cables and control cable market when
transmission cables are mostly dominated by private players of outside state.

7
2.2 COMPANY PROFILE
2.2.1 Introduction
TRACO CABLE COMPANY, is incorporated in the year 1960; the foundation stone
of Irimpanam unit was laid down by Shri Manubhai M Shai. The company started
its operation in the year 1964. Shri M.D Jose was the first chairman and the
managing director on whose initiation Irimpanam unit of TRACO CABLE
COMPANY commenced its operation.

TRACO CABLE COMPANY, a Premier Kerala Government Company, commenced

operations in the year 1964, manufacturing high quality Electric Cables and Wires in
Technical Collaboration with M/s. Kelsey Engineering Ltd., Canada. Since then
TRACO has been in the forefront in meeting the needs of Public Sector Undertakings
in India like Railways, Electricity Boards of various states in the country and others
for AAC/ACSR, Power and Signalling cables.

One of the India’s most sought after Paper Insulated Lead Sheathed
Telecommunication Cables were produced by TRACO in collaboration with
Hindustan Cables, West Bengal under an agreement signed in 1974 until the
liberalization of Licensing policy in the country, TRACO was one of the two
manufactures of Telephone Cables in India and only one in the whole of South India.
Always playing its humble role in the process of nation building, TRACO’s cables
carry energy, actuate signals and help to connect people in far flying areas in this vast
subcontinent, that’s India with its quality products.

The superiority of TRACO cables is the result of better know-how combined with
well equipped machinery and efficient work force. Rigorous quality control is
maintained during every stage of production, which ensures, that the products going
into the market are according to the IS specifications. With the progress in Cable
Technology, Paper Insulated Cables gave way to the much more sophisticated Jelly
Filled Telephone cables which are superbly suited for communications. TRACO was
one among those who first perceived the opportunities inherent in this new

8
development. It soon went into Technical collaboration with M/s. General Cables
Inc., USA, world leaders in the Communication cable field and manufactured them
in India to exacting standards

The company started its function with a capital of Rupees one core divided into
250000 per: shares of Rs.10 each and 750000 equity shares of Rs.10 each. The unit
was has been manufacturing cables required for the Railways, the BSNL and the
KSEB. Traco's power cable manufacturing unit has a workforce of 210 and the
telephone cable division around 450. The estimated turnover of Traco cables is
around Rs 44.8crore

2.2.2 MAJOR CUSTOMERS

 Kerala State Electricity Board (KSEB) is the current customer

 All Kerala Electricity Board in India
 Railways
 Private firm

2.2.3 ORGANIZATION STRUCTURE OF TRACO CABLE LTD

DIVISIONAL MANAGER

Finance HR Q&A Store

Department Department Department Department

Marketing Maintenance Production

Department Department Department

9
 Figure 2.1

2.2.4 UNITS OF TRACO CABLE COMPANY LIMITED

Corporate office

The registered and corporate office of traco cable Company is located in Cochin,
panampillynagar the industrial city of Kerala. Board of directors, MD’s office, and
all main heads of traco Cable Company is located at the registered and corporate
office.

Tiruvalla unit

In tiruvalla unit of traco cables having two major divisions they are power cable
division and telephone cable divisions

Irimpanam unit

In irimpanam unit also having two divisions

Power cable division.

Telephone cable division.

Kannur unit

Kannur unit mainly focused on house wiring cables.

2.2.5 INFRASTRUCTURE AVAILABLE(IRUMPANAM UNIT)

Land : 15.38 Hectares

Plant area : 7500 sq.mtrs

Total built up area : 9500 sq. mtrs

Electricity : 2 nos. 1000KVA transformers in addition to

K.S.E.B. power connection.

Water : 3 nos. bore wells for process water and

10
 3 nos. well for Drinking water (7000ltrs/day)

Cooling tower : 1 FRP/ Spray cooling tower with an

overhead tank and ground level tank

2.2.6 ORGANISATION POLICY

WORK
IMPROVEMENT

MISSION
&VISION

PRODUCT METHOD
IMPROVEMENT IMPROVEMENT

Figure 2.2

2.2.7 ORGANISATIONAL SETUP

The company‘s Registered office is at Panampilly Nagar, Kochi with

manufacturing units at Irimpanam in Ernakulam District and Thiruvalla in
Pathanamthitta District and also a new Unit at Thalassery in Kannur District.
TRACO CABLE COMPANY LIMITED maintains the traditional lines of
management having pyramid structure of hierarchy. The Board of Directors consists
of members appointed by the Government of Kerala and the Managing Director is
the Chief Executive Officer who delegates the authority to the Unit Chiefs and other
department heads. The Head of Irimpanam unit is Mr.Boban George, Senior
Manager and different departments such as Production, Quality Assurance, Finance,
Maintenance, Personnel & Administration, Stores, Purchase and Marketing are
having department heads reporting to the unit head.

11
2.2.8 MANAGEMENT IN IRIMPANAM UNIT

SENIOR MANAGER (UNIT HEAD) - BOBAN GEORGE

SENIOR MANAGER(MAINTENENCE) - K.S. KRISHNAKUMAR

MANAGER( P&A) - JOSHY ABRAHAM

MANAGER (P&A) - JOHN VARKEY

MANAGER (MARKETING) - BOBY GEORGE

MANAGER (FINANCE) - MANOJ BINDHU

MANAGER (PRODUCTION) - MANOJ A.T

MANAGER (QA&STORES) - DEEPA MERIN JACOB

12
3.1 LITERATURE REVIEW

Bansal S. P. (1999) stated that working capital management refers to the

management of current assets and current liabilities for maintaining the optimum
levels of various components and increasing the profitability of an enterprise. The
author has insisted on application of various techniques for management of working
capital and its three main components cash, receivables and inventories.

Deloof Marc. (2003) presents a picture of how working capital management affects
the profitability of Belgium firms . The writer has made use of empirical analysis for
the sample firms. It was observed that most of the firms have a large amount of cash
invested in working capital. It can, therefore, be deduced that the way in which
working capital is managed will have a significant impact on the profitability of the
firms.
Filbeck Greg and Krueger Thomas M. (2005) base their study on the ratings of
working capital management published in CFO magazines. The findings of the study
provides insight into working capital performance and working capital management,
which is explained by macroeconomic factors, interest rates, competition, etc., and
their impact on working capital management. The article further studies the impact of
working capital management on stock prices.

MeszekWieslaw and Polewski Marcin (2006) examine the profiles of selected

construction companies from the viewpoint of working capital formation and their
management strategies applied to working capital. The analysis is based on the
financial ratios. The authors conclude with the observation that complex working
capital management requires controlling methodology to be developed. A specific
character of the construction industry, including operational factors and market
requirements make working capital management a task exceeding the financial

13
sphere, as it embraces the issues of organization of investment processes, the
organization of production processes and logistics.

Ganesan Vedavinayagam (2007) studies the impact of working capital management

on profitability through ANOVA test where the financial statements of 349 telecom
units or enterprises are analyzed. The relationship between working capital
management efficiency and profitability and the impact of working capital
management on the same has been tested. At the end of the study the author has
minutely observed that the working capital management efficiency in
telecommunication industry is poor. And he suggests that the telecommunication
industry should improve working capital management efficiency.

Samiloglu F. and Demirgunes K. (2008) intend to analyze the effect of working

capital management on firm’s profitability. To consider statistically significant
relationship between the firm’s profitability and the components of cash conversion
cycle at length, a sample consisting of Istanbul Stock Exchange (ISE) listed
manufacturing firms for the period from 1989 to 2007 has been analyzed under a
multiple regression model. Empirical findings of the study show that accounts
receivable period, inventory period and leverage affect firm’s profitability
negatively, while growth (in sales) affects firm’s profitability positively.

Rosenbluth Frances (2010) makes a close study of the role that networks can play
in boosting women's representation in the personal, professional and political arenas.
It has been found that women lag behind men in their access to professional
networks. At the end of the study the author concludes with the observation that
gender equality will remain out of reach until women and men have a statistically
equal shot at being productive, which at the top of the career ladder invariably
includes the difficult-to-quantify but real value of network power.

Rahman Mohammad M. (2011) focuses on the co-relation between working capital

and profitability. An effective working capital management has a positive impact on

14
profitability of firms. From the study it is seen that in the textile industry profitability
and working capital management position are found to be up to the mark.

Bagchi B. and Khamrul B. (2012) investigate the relationship between working

capital management and the companies‟ profitability, and identify the variables that
most affect profitability. It is also an empirical study where the authors have
investigated the effect of working capital management on the company’s profitability
by using a sample of Indian FMCG companies. The study concludes with the
observation that both CCC and debt used by the firm are negatively associated with
the company’s profitability. This result can be further strengthened if the companies
manage their working capital in more efficient ways which will ultimately increase
their profitability.

Joseph Jisha (2014) closely examines the study of working capital management in
Ashok Leyland and points out that the liquidity and profitability position of the
company is not satisfactory, and needed to be strengthened in order to be able to
meet its obligations in time.

15
3.2.1 CONCEPTS OF WORKING CAPITAL
The concept of working capital has been a matter of great controversy among
financial experts. Broadly speaking different views of working capital can be
categorized in to two groups.
 Gross Concept
 Net Concept
According to the concept, working capital refers to the sum total of all current
assets of the firm employed in the business process. Current assets are those assets,
which can be converted to cash with in an accounting year of operating cycle.
The net working capital represents excess of current assets over current liabilities.
Current liabilities are those claims of outsiders, which are expected to mature for
payment with an accounting year. It includes.
 Creditors
 Bills payable
 Bank overdraft
 Outstanding expenses etc
Both these concepts have their own significance. According to I.M.Pandey “The
two concepts of working capital-Gross and Net-are not exclusive, rather they have
equal significance from management view point. The gross working capital
concept focuses attention on two aspects of current assets management.
 Optimum investment in current assets and
 Financing of current assets.
The investment in current assets should be just adequate, not more, not less, to the
need of the business firm. Excessive investment in current asset should be avoided
because it impairs firm’s profitability, as idle investments earn nothing. On the
other hand inadequate amount of working capital can threaten the solvency of the
firm, if it fails to meet its current obligations Thus financial manager should have

16
the knowledge of the sources of working capital as well as the investment avenues
where the ideal funds may be temporarily invested

In words of I.M.Pandey “The net working capital indicates.

 The liquidity of the firm.
 Suggests the extend to which capital needs may be financed by permanent
source of funds.
Current assets should be sufficiently in excess of current liabilities to constitute a
margin of buffer for maturing obligations with in the ordinary operating cycle of a
business. In order to protect their interest, the short-term creditors always like a
affirm to maintain current assets at a higher level that current liabilities. The net
working capital concept also covers the questions of judicious mix of long tern and
short term funds for financing current assets.
The net concept of working capital has been taken into consideration in the present
study. The main object of study is to examine the liquidity position and its effect on
working capital management of the industry.
3.2.2 CIRCULATION SYSTEM WORKING CAPITAL
Working capital is also known as “Circulating Capital” or “Current Capital”. The
funds in a business are obtained from the issue of shares, debentures other long
term arrangement and operations of business. A huge part of generated funds is
used to acquire fixed assets viz plant and machinery, land and building and some
other fixed assets, while the remaining part of the generated funds is used for day
to day operation of the business i.e. to pay wages and overhead expenses for the
raw materials processed. This makes possible the stocking of finished goods by
whose sales either accounts receivables are created or cash is received. In thus
process profits are generated. A part of the profit is used to pay tax, interest and
dividends, while the remaining part is ploughed back in the business. This cycle
goes on constantly through out life of the business.
3.2.3 OPERATING CYCLE

17
The duration of time required to complete sequence of events right from purchase
of raw materials for cash to the realization of sales in cash is called the operating
cycle, working capital, or cash cycle.
In the words O.M. Joy “the operating cycle refers to the length of time necessary to
complete the following cycle of events”.
 Conversion of cash into raw materials
 Conversion of raw materials into work-in-progress
 Conversion of work-in-progress into finished goods
 Conversion of finished goods into debtors or bills receivable through sales.
 Conversion of debtors or bills receivables into cash
“Operating cycle is the time duration required to convert sales, after the conversion
of resources into inventories, into cash” says I.M Pandey
The operating cycle of a manufacturing company involves three phases.
 Acquisition of resources-such as raw materials, labours, power and fuel etc.
 Manufacture of the product which includes conversion of raw materials into
finished goods.
 Sale of the product-either for cash or credit.
The cycle will again and again over the period depending upon the type of the
product produced.

Operating cycle period

18
The length or time duration of the operating cycle of any firm can be defined as the
sum of its inventory conversion period and the receivable conversion period.
1. Inventory conversion period:
It is the time required for the conversion of raw material into finished goods sales. In
a manufacturing firm the inventory conversion period is consisting of raw material
conversion period (RMCP), work-in-progress conversion period (WPCP) and
finished goods conversion period (FGCP).
Raw material conversion period refers to the period for which the raw material is
generally kept in stores before it is issued to the production department.
The work-in-progress conversion period (WPCP) refers to the period for which
the raw material remains in the production process before it is taken out as finished
units.
The finished goods conversion period refers to the period for which finished units
remains in stores before being sold a customer.
2. Receivable conversion period (RCP):
It is the time required to convert the credit sales into cash realization. It refers to the
period between the occurrence of credit sales and collection from debtors.
The total of Inventory conversion period (ICP) and Receivable conversion period
(RCP) is also known as total operating cycle period (TOCP).the firm might be
getting some credit facilities from supplier of raw material, wages earners etc.This
period for which the payment to these parties are deferred or delayed is known as
deferred period (DP).the net operating cycle (NOC) of the firm is arrived at by
deducting the DP from TOCP.
3.3.4 KINDS OF WORKING CAPITAL
 Permanent or Fixed Working Capital
The permanent or regular working capital is the minimum amount which
should always be there in the business to carry out its activity. It is permanent
in the same way as the firms fixed assets are. A sound financial policy
demands that permanent working capital should be financed from long term
sources of finance.
 Temporary or Variable Working Capital

19
 Depending upon the changes in production and sales the need for working
capital over above the permanent working capital will fluctuate. The extra
working capital needed to support the changing production and sales
activities is called the fluctuating or variable or temporary working capital.
Both kinds of working capital are needed to facilitate production and sales
through the operation cycle but temporary working capital is created by the
firm to meet liquidity requirements that will last only temporarily.

3.2.5 ADVANTAGES OF ADEQUATE WORKING CAPITAL

 It helps for continuous supply of raw materials which leads for uninterrupted
production.
 It helps for prompt payment of wages, salaries, and other day to day
expenses, and it also increases the goodwill of the firm.
 It helps to utilize the favorable market conditions.i.e, by purchasing in bulk at
cheaper price.
 It helps for reduction of cost.i.e; purchase at a cheaper rate reduces the cost
of production.
 It helps raising short term loans especially banks.
 It helps for maintaining the solvency of the business.
 It also helps for prompt payment of dividend, results in maintaining or
increasing the market value of the shares, and makes raising additional
capacity easy.
 It also helps for prompt supply of finished goods by which the brand loyal
customers can be maintained.
 It creates high morale and provides job security for employees.

3.2.6 DISADVANTAGE OF INADEQUATE WORKING CAPITAL

 It stagnates growth of the business
 Implementation of operating plans becomes difficult.
 Operating inefficiencies creep in when it becomes difficult even to meet
day to day commitments.

20
  The firm loses its reputation when if it is not in opposition to meet its short
term obligations.

3.2.7 DANGERS OF EXCESS WORKING CAPITAL

 It result in unnecessary stock accumulation. Thus the chance of inventory
mishandling, Waste etc increases.
 It is an indication of defective credit policy collection period
 Excessive working capital makes satisfied which degenerates into
managerial inefficiency.
3.2.8 NEED FOR WORKING CAPITAL
 To pay for wages and salaries
 To pay for day to day expenses and overhead cost
 To meet selling cost
 To provide credit facilities to customers
 To maintain inventories of raw materials, works-in-progress and finished
goods.
3.2.9 RATIO ANALYSIS
A ratio is a mathematical expression of the relationship of one number to another
of quantitative relationship between two numbers. Advantages of Ratio Analysis.
 Simplifies financial statement
Ratio analysis helps in comprehending complex financial statements into
simple stories
 Facilitates inter firm comparison
Ratio analysis facilitates inter firm comparison and high lights factors
associated with successful and unsuccessful firms, reveal strong firms and
weak firms, over valued and under valued firms
 Utility to Managers
Ratio analysis helps managers in decision making planning financial
forecasting, coordination and control.
 Utility to Share holders
Ratio analysis helps share holders to evaluate their investments

21
  Utility to Creditors
Ratio analysis helps creditors to evaluate a firm’s repayment capacity.

 Utility to Employees
Ratio analysis evaluate the profit earning capacity of the firm
 Utility to Government
Ratio analysis helps government in bringing about economic equality
3.2.10 LIMITATIONS OF RATIO ANALYSIS
 Limited use of single ratio
 Lack of adequate standards
 Inherent limitations of accounting
 Price level changes

22
Research methodology is a way to systematically solve the research problem. It may
be understood as a science of studying now research is done systematically. In that
various steps ,those are generally adopted by a researcher in studying his problem
along with the logic behind them.

“The procedures by which researchers go about their work of describing, explaining

and predicting phenomenon are called methodology”

4.1 TYPE OF RESEARCH

This project “A Study on Working Capital Management in TRACO CABLE

COMPANY” is considered as an analytical research.

Analytical Research is defined as the research in which, researcher has to use facts or
information already available, and analyze these to make a critical evaluation of the
facts, figures,data or material.

4.2 RESEARCH DESIGN

The type of research used in this study is analytical. This is an attempt to evaluate the
performance of the company through the financial statement analysis by the financial
data which are disclosed in accounting policies.

4.3 SOURCES OF DATA

The data is collected for this study is only secondary sources.

Secondary data:

The secondary data are those which already collected and stored. Secondary data
easily get those secondary data from records, annual reports of the company etc. It
will save the money, time and efforts collect data.

23
The major source of data for this project was collected through annual reports of 5
year period from 2013-2018 and some more information collected from internet and
text sources.

4.5 TOOLS USED FOR ANALYSIS OF DATA

The data were analysed using the following tools. They are:

 Schedule of working capital changes

 Ratio analysis

24
Table 5.1
(In lakhs)
SCHEDULE OF CHANGES IN WORKING CAPITAL
PARTICULARS 2013 2014 EFFECT ON W. C
INCREASE DECREASE

CURRENT ASSET

Inventory 1738.48 1460.93 277.55

Trade receivables 2874.95 3214.68 339.73
Cash& cash equivalence 594.92 1747.47 1152.55
Other current asset 68.01 50.07 17.94
Loans and advances 87.99 257.05 169.06
TOTAL C. A 5364.35 6730.2

CURRENT LIABILITIES

Short term borrowings 2418.3 1860.95 557.35

Trade payable 1264.98 2672.16 1407.18
Other current liabilities 1969.33 1128.09 841.24
Short term provision 519.38 491.66 27.72
TOTAL C.L 6171.99 6152.86

W.C ( C.A- C.L) -807.67 577.34 3087.65 1702.67

NET INCREASE IN W. C 1384.98 1384.98

577.34 577.34 3087.65 3087.65

INTERPRETATION
Working capital of the company shows an favourable trend. For the year 2013,
working capital was (-807.67). It increased to 577.34 in the year 2014. It indicates a
positive growth in current asset of the company. Thus we can say that the liquidity
position is improving.

25
Table 5.2
(In lakhs)
SCHEDULE OF CHANGES IN WORKING CAPITAL
PARTICULARS 2014 2015 EFFECT ON W. C
INCREASE DECREASE

CURRENT ASSET

Inventory 1460.93 1832.58 371.65

Trade receivables 3214.68 3132.2 82.48
Cash& cash equivalence 1747.47 1111.35 636.12
Other current asset 50.07 400.89 350.82
Loans and advances 257.05 50.27 206.78
TOTAL C. A 6730.2 6527.29

CURRENT LIABILITIES

Short term borrowings 1860.95 2363.73 502.78

Trade payable 2672.16 2365.98 306.18
Other current liabilities 1128.09 1941.15 813.06
Short term provision 491.66 549.4 57.74
TOTAL C.L 6152.86 7220.26

W.C ( C.A- C.L) 577.34 -692.97 1028.65 2298.96

NET DECREASE IN W. C 1270.31 1270.31

577.34 577.34 2298.96 2298.96

INTERPRETATION
Working capital of the company shows an unfavourable trend. For the year 2014,
working capital was 577.34. It decreased to (-692.97) in the year 2015. It indicates a
decline in current asset position of the company.

26
Table 5.3
(In lakhs)
SCHEDULE OF CHANGES IN WORKING CAPITAL
PARTICULARS 2015 2016 EFFECT ON W. C
INCREASE DECREASE

CURRENT ASSET

Inventory 1832.58 2004.32 171.74

Trade receivables 3132.2 4573.04 1440.84
Cash& cash equivalance 1111.35 911.42 199.93
Other current asset 400.89 195.17 205.72
Loans and advances 50.27 59.79 9.52
TOTAL C. A 6527.29 7743.74

CURRENT LIABILITIES

Short term borrowings 2363.73 3443.17 1079.44

Trade payable 2365.98 2026.51 339.47
Other current liabilities 1941.15 3604.15 1663
Short term provision 549.4 654.87 105.47
TOTAL C.L 7220.26 9728.7

W.C ( C.A- C.L) -692.97 -1984.96 1961.57 3253.56

NET DECREASE IN W. C 1291.99 1291.99

-1984.96 -1984.96 3253.56 3253.56

INTERPRETATION
Working capital of the company shows a unfavourable trend. For the year 2015,
working capital was (-692.97). It decreased to (-1984.96) in the year 2016. It again
indicates a decline in current asset position of the company and this is not a good
sign for the liquidity of the company.

27
Table 5.4
(In lakhs)
SCHEDULE OF CHANGES IN WORKING CAPITAL
PARTICULARS 2016 2017 EFFECT ON W. C
INCREASE DECREASE

CURRENT ASSET

Inventory 2004.32 2171.91 167.59

Trade receivables 4573.04 5892.99 1319.95
Cash& cash equivalance 911.42 1666.67 755.25
Other current asset 59.79 21.76 38.03
Loans and advances 195.17 261.02 65.85
TOTAL C. A 7743.74 10014.35

CURRENT LIABILITIES

Short term borrowings 3443.17 4001.95 557.98

Trade payable 2026.51 2253.23 226.72
Other current liabilities 3604.15 4716.16 1112.02
Short term provision 654.87 783.76 128.89
TOTAL C.L 9728.7 11755.1

W.C ( C.A- C.L) -1984.96 -1740.75 38.03 4334.25

NET INCREASE IN W. C 244.21 4296.22

-1984.96 -1984.96 4334.25 4334.25

INTERPRETATION
Working capital of the company shows a small favourable trend. For the year 2016,
working capital was (-1984.96). It increased a little bit to (-1740.75) in the year 2017.
It indicates a small improvement in the current asset position of the company.

28
Table 5.5
(In lakhs)
SCHEDULE OF CHANGES IN WORKING CAPITAL
PARTICULARS 2017 2018 EFFECT ON W. C
INCREASE DECREASE

CURRENT ASSET

Inventory 2171.91 2175.15 3.24

Trade receivables 5892.99 6039.23 146.24
Cash& cash equivalance 1666.67 1541.11 125.56
Other current asset 21.76 622.73 600.97
Loans and advances 261.02 13.23 247.79
TOTAL C. A 10014.35 10391.45

CURRENT LIABILITIES

Short term borrowings 4001.95 4174.53 172.58

Trade payable 2253.23 3164.74 911.51
Other current liabilities 4716.16 5416.91 700.75
Short term provision 783.76 585.06 198.7
TOTAL C.L 11755.1 13341.24

W.C ( C.A- C.L) -1740.75 -2949.79 572.05 2535.29

NET DECREASE IN W. C -1209.04 1963.24

-2949.79 -2949.79 2535.29 2535.29

INTERPRETATION
Working capital of the company again shows an unfavourable trend. For the year
2017, working capital was (-1740.75). It decreased a to (-2949.79) in the year 2018.
It indicates a major decline in the current asset position of the company and this is
not at all good for the company.

29
RATIO ANAYSIS
Ratio analysis is a powerful tool for the analysis of financial performance. It is an
important technique of financial analysis. Ratio means that it is one number
expressed in terms of another can be worked out by dividing.
5.1 CURRENT RATIO
This is the most widely used ratio. It is the ratio of current asset to current liabilities.
It shows a firm ability to cover its current liabilities with its current assets. The
current ratio is mainly used to give an idea of the company’s ability to payback its
current liabilities with its current assets. As such, current ratio can be used to take
rough measurement of a company’s financial health. Current ratio of 2 : 1 is
considered as ideal ratio or standard ratio. A high ratio indicates sound solvency
position and a low ratio indicates inadequate working capital.

CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITIES

CURRENT ASSET CURRENT RATIO

(In lakhs) LIABLITY(In lakhs)
2013-2014 6730.2 6152.86 1.09
2014-2015 6527.29 7220.26 0.9
2015-2016 7743.74 9728.7 0.79
2016-2017 9991.59 11755.1 0.85
2017-2018 10391.45 13341.24 0.78

Table 5.6

30
 CURRENT RATIO
1.2

0.8

0.6

0.4

0.2

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

Figure 5.1

INTERPRETATION
The standard current ratio of a firm is 2:1. It provides a margin of safety to the
creditors. It is an index of the firm’s financial stability. It is observed from the table
that during the past years of current ratio of the company shows a fluctuating trend.
For the year 2013-14, current ratio of the company was 1.09 and for the year 2014-15
it was 0.9. current ratio of the company was 0.79 and 0.85 for the year 2015-16 and
2016-17 respectively. For the year 2017-18, it was 0.78.

31
5.2 QUICK RATIO
The acid test ratio or quick ratio is very similar to the current ratio except for the fact
that it excludes inventory. This is the ratio of liquid asset to liquid liabilities. It shows
a firm ability to meet current liabilities with its most liquid assets. 1:1 ratio is
considered as ideal ratio for a concern because it is wise to keep the liquid assets at
least equal to the liquid liabilities at all times. Liquid liabilities include all items of
current liabilities except bank overdraft.

QUICK RATIO = QUICK ASSETS

CURRENT LIABILITIES

YEAR QUICK ASSET(In lakhs) CURRENT LIABILITY(In RATIO

lakhs)

2013-2014 5269.27 6152.86 0.85

2014-2015 4694.71 7220.26 0.65

2015-2016 5739.42 9728.7 0.58

2016-2017 7820.68 11755.1 0.66

2017-2018 8216.3 13341.24 0.61

Table 5.7

32
 QUICK RATIO
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

Figure 5.2

INTERPRETATION
Quick ratio shows the relationship between quick assets and liabilities. There is a
decreasing trend, this is because of an increase in current liabilities and a decrease in
quick assets mainly due to low cash and bank balance.

33
5.3 NET WORKING CAPITAL
It is the difference between current assets and current liability. It is used for the day
to day activities of the concern.
Net Working Capital = Current Asset – Current Liability
Table

Year Current Assets(In Current Net Working Capital

lakhs) Liability(In lakhs)
2013-2014 6730.2 6152.86 577.34
2014-2015 6527.29 7220.26 -692.97
2015-2016 7743.74 9728.7 -1984.36
2016-2017 9991.59 11755.1 -1763.51
2017-2018 10391.45 13341.24 -2949.79
Avg -6813.29

NET WORKING CAPITAL

1000

500

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018
-500

-1000

-1500

-2000

-2500

-3000

-3500

Figure

34
INTERPRETATION
There is a decline in the net working capital of the company. This is because the
current liability of the company is greater than current asset of the company. For the
year 2013-2014, the net working capital of the company is positive. But after that it
becomes negative. Negative working capital means the liabilities that need to be paid
within one year exceed the current asset that are monetized over the same period.
The highest negative working capital is for the year 2017-2018 and it is (-2949). The
net average working capital of the company for 5 years are (-6813.29).

35
RATIO OF GROSS WORKING CAPITAL TO SALES
This ratio indicates the amount of working capital employed per rupees of sales. It is
obtained by dividing gross capital by sales.
Gross working capital
Ratio of Gross Working Capital =
Sales
Year Gross Working Sales(In Ratio
Capital(In lakhs) lakhs)
2013-2014 6730.2 3430.76 1.96
2014-2015 6527.29 2924.36 2.23
2015-2016 7743.74 2464.61 3.14
2016-2017 9991.59 8249.72 1.21
2017-2018 10391.45 9086.42 1.14
Avg 1.936

RATIO OF GROSS WORKING CAPITAL TO SALES

3.5

2.5

1.5

0.5

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

INTERPRETATION
The ratio of gross working capital to sales shows an increasing trend till the year
2015-2016 and it increases to 3.14. After 2015-2016 it starts decreasing and for the
year 2017-2018 the ratio is 1.14.

36
5.3 GROSS WORKING CAPITAL
The term gross working capital represents the amount fund invested in current assets.
Thus gross working capital is the working capital invested in total assets of the
enterprise. Gross working capital is the sum of all of a company's current
assets (assets that are convertible to cash within a year or less). Gross working capital
includes assets such as cash, checking and savings account balances, accounts
receivable, short-term investments, inventory and marketable securities

(In lakhs)
2013- 2013- 2013- 2013- 2013-
2014 2014 2014 2014 2014

Inventories 1466.04 848.01 627.98 2171.91 2175.15

Sundry 5892.99 6039.23

debtors 183.53 1430.43 1318.27
Cash &bank 1666.67 1541.11
balance 140.95 171.13 203.16
Other current 261.02 622.73
assets 4.33 4.6 4.76
Loans and 13.23
advances 466.07 508.06 447.82 150.42

Table 5.8

37
 GROSS WORKING CAPITAL
7000

6000

5000

4000

3000

2000

1000

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

inventories sundry debtors cash and bank balance

other current assets loans and advances

Figure 5.3

Interpretation:

This table shows the components of asset of the company, which are the main parts
of the working capital. In this table the current asset of each items shows variations
in each year.The amount of working capital of the company is analyzed by knowing
the position of each items in the current assets.

38
5.1.4 CURRENT ASSET TURN OVER RATIO

The asset turnover ratio is an efficiency ratio that measures a company's ability to
generate sales from its assets by comparing net sales with average total assets. In
other words, this ratio shows how efficiently a company can use its assets to generate
sales.The total asset turnover ratio calculates net sales as a percentage of assets to
show how many sales are generated from each dollar of company assets. For
instance, a ratio of .5 means that each dollar of assets generates 50 cents of sales.The
asset turnover ratio is calculated by dividing net sales by average total asset

CURRENT ASSET TURN OVER RATIO = NET SALES

CURRENT ASSETS

Table 5.9

SALES(In CURRENT RATIO

lakhs) ASSETS(In lakhs)
2013-2014 3430.76 3909.52 0.88
2014-2015 2924.36 2962.23 0.99
2015-2016 2464.61 2601.99 0.95
2016-2017 8249.72 9991.59 0.82
2017-2018 9086.42 10391.45 0.87

Figure 5.4

39
 CURRENT ASSET TURN OVER RATIO
1.2

0.8

0.6

0.4

0.2

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

CURRENT ASSET TURN OVER RATIO

INTERPRETATION

Current asset ratio is analyzed by the sales is divided with the current assets of the
company. In the above following table shows that the company’s current asset
turnover ratio is very poor.

40
5.1.5 WORKING CAPITAL TURN OVER RATIO

Working capital turnover is a measurement comparing the depletion of working

capital used to fund operations and purchase inventory, which is then converted into
sales revenue for the company. The working capital turnover ratio is used to analyze
the relationship between the money that funds operations and the sales generated
from these operations.

WORKING CAPITALTURN OVER RATIO = NET SALES

NET WORKING CAPITAL

Table

YEAR SALES(In NET WORKING RATIO

lakhs) CAPITAL(In
lakhs)
2013-2014 3430.76 1813.06 1.87
2014-2015 2924.36 1038.95 2.81
2015-2016 246.61 1433.99 1.72
2016-2017 8249.72 1763.51 4.67
2017-2018 9086.42 2949.79 3.08

41
 WORKING CAPITALTURN OVER RATIO
5

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

WORKING CAPITALTURN OVER RATIO

Figure 5.5

INTERPRETATION

The working capital turnover ratio measures how well a company is utilizing its
working capital for supporting a given level of sales. The least working capital ratio
of Traco Company ltd is 1.72 in 2016.This will leads to an excessive amount of bad
debts and obsolete inventory.

42
5.6 INVENTORY TURN OVER RATIO

Every firm has to maintain a certain level of inventory or stock of finished goods so
as to be able to meet the requirements of the business. But the level of inventory
should neither be too high nor too low. Inventory turnover ratio of cost of goods sold
by a business to its average inventory during a given accounting period. This ratio
reveals the number of times finished stock is turned over during a given accounting
period.

STOCK TURNOVER RATIO = NET SALES

AVERAGE STOCK

INVENTORY(In SALES(In lakhs) RATIO

lakhs)
2013-2014 1466.04 3430.76 2.34
2014-2015 848.01 2924.61 3.45
2015-2016 627.98 2464.61 3.93
2016-2017 2171.91 8249.72 3.8
2017-2018 2175.15 9086.42 4.15

Table 5.11

43
 INVENTORY TURN OVER RATIO
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

INVENTORY TURN OVER RATIO

Figure 5.6

INTERPRETATION

The inventory turnover ratio signifies the liquidity of the inventory. A high inventory
turnover ratio indicates the efficiency of the management in converting stock into
cash quickly, sound liquidity position and quality of gods maintained. There is an
increasing trend.

44
5.1.7 INVENTORY HOLDING PERIOD

Inventory turnover gives the number of times inventory turn into sales in year. The
reciprocal of inventory turnover gives average inventory holding in percentage terms.
It is always advisable for the firm to have a minimum value of days of inventory
holding. Since it helps in minimizing the funds locked up with the inventory as well
as an indicator of improved turnover.

INVENTORY HOLDING PERIOD = INVENTORY * 365

SALES

INVENTORY(In SALES(In PERIOD

lakhs) lakhs)
2013-2014 1466.04 3430.76 155.98
2014-2015 848.01 2924.36 105.98
2015-2016 627.98 2464.61 93

2016-2017 2171.91 8249.72 96

2017-2018 2175.15 9086.42 87.3

Table 5.12

INVENTORY HOLDING PERIOD

180
160
140
120
100
80
60
40
20
0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

INVENTORY HOLDING PERIOD

Figure 5.7

45
INTERPRETATION

Inventory holding period shows a decreasing trend from 2014-2018. For the year
2013-14, inventory holding period of the company was 156 days approximately and
for the year 2014-15 it was 106 days approximately. inventory holding period of the
company was 93 days and 96 days for the year 2015-16 and 2016-17 respectively.
For the year 2017-18, it was 57 days approx.

46
5.1.8 RAW MATERIAL STORAGE PERIOD

Raw material turnover gives the number of times raw materials turns into sales in a
year. The reciprocal of raw material turnover gives average raw material holding
period in percentage terms

Raw material storage period = Closing stock of raw material * 365

Sales

Closing stock of raw Sales(In lakhs) Period

material(In lakhs)
2013-2014 409.28 3430.76 43.54
2014-2015 143.89 2924.61 18
2015-2016 163.37 2426.61 24.19
2016-2017 269.3 8249.72 11.9
2017-2018 200.24 9086.42 8.04

Table 5.13

Raw material storage period

50
45
40
35
30
25
20
15
10
5
0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

Raw material storage period

Figure 5.8

47
INTERPRETATION

Raw material storage period in Traco cable company ltd is showing a fluctuating
trend. For the year 2013-14 raw material period of the company was 44 days
approximately and for the year 2014-15 it was 18 days approximately. raw material
period of the company was 24 days and 12 days for the year 2015-16 and 2016-17
respectively. For the year 2017-18, it was 8 days approx.

48
6.1 FINDINGS

 Working capital of the company shows an favourable trend in the year 2013-
2014 while it shows unfavourable trend for the financial years 2014-
2015,2015-2016,2016-2017 and 2017-2018. The net working capital
decreases to (-2949.79) in the year 2018.
 During the past years, current ratio of the company shows a fluctuating trend.
 There is a decreasing trend in quick ratio and this is because of an increase in
current liabilities and a decrease in quick assets mainly due to low cash and
bank balance
 There is a decline in the net working capital of the company. This is because
the current liability of the company is greater than current asset of the
company. The highest negative working capital is for the year 2017-2018 and
it is (-2949). The net average working capital of the company for 5 years are
(-6813.29)
 The ratio of gross working capital to sales shows an increasing trend till the
year 2015-2016 and it increases to 3.14. After 2015-2016 it starts decreasing.
 The company’s current asset turnover ratio is very poor.
 The least working capital ratio of Traco Company ltd is 1.72 in 2016.This
will lead to an excessive amount of bad debts and obsolete inventory.
 There is an increasing trend in inventory turnover ratio. A high inventory
turnover ratio indicates the efficiency of the management in converting stock
into cash quickly, sound liquidity position and quality of gods maintained.
 Inventory holding period shows a decreasing trend from 2014-2018.
 Raw material storage period in Traco cable company ltd is showing a
fluctuating trend.

49
6.2 SUGGESTIONS

 The company should ensure that all debt obligations are met on time. The
company can use electronic payment systems to ensure timely payments, and
avoid situations that delay payments and attract penalty.
 Discounts from vendors can help the company save finances. They should
maintain a good relationship with them.
 Company should identify expenses that are wasteful and should try to avoid
them.
 The company should automate Accounts Receivable and Payment Monitoring
process.
 The company can consider introducing e-procurement in their system which
can help reduce cost.

50
6.3 CONCLUSION
The study was undertaken in Traco Cables Company Ltd on the working capital
management. This study provides an insight into the working of Traco Cable
Company. For the study of working capital management secondary source of data
and various analysis are used. As result of financial analysis net profit ratio, working
capital turnover ratios are not at the satisfactory level. So the company should take
more concentration to increase profit. The net working capital of the company is
decreasing over the years. The company should invest more funds to increase the
quantum of net working capital. The management of inventory also indicates bad
sign.

The performance of the company or the last three years is not good. Company is
running under loss due to decrease in sales.

51
BIBLIOGRAPHY

REFERENCE BOOKS

 Financial Management, I M Panday

 Working capital Management, Dr P K Sing
 Working Capital Management and Control, Sathis B Mathur

JOURNAL

 Annual Report, Traco Cable Company

WEBSITES

 https://www.tracocables.com

52
 BALANCESHEET AS ON 31 ST MARCH 2014

ASSET AMOUNT LIABILITY AMOUNT

NON CURRENT ASSET SHARE HOLDERS FUND

Tangible assets 1062.33 Share capital 5721.82

Capital work in progress 74.4 Reserve and surplus -4858.28
Noncurrent investment 0.02 Share application money 0
Long term loans and advances 532.48
Noncurrent liability
CURRENT ASSETS
Long term borrowings 1383.13
Inventory 1460.93
Trade relivable 3214.68 CURRENT LIABILITY
Cash and cash equivalence 1747.47
Other current assets 50.07 Short term borrowings 1860.95
Loans and advances 257.05 Trade payable 2672.16
Other current liability 1128.09
Short term provisions 491.66

TOTAL 8399.53 TOTAL 8399.53

53
 BAANCE SHEET AS ON 31 ST MARCH 2015
EQUITY AND LIABILITIES ASSETS
Shareholder's fund Non-current assets

Share capital 5721.82 FIXED ASSETS

Reserves and surplus -
5661.87
Tangibleassets 1089.22
NON CURRENT LIABILITIES Capital work-in progress 300.33
Non-current investments 0.02
Long term borrowings 1276.38 Long- term loans and advances 639.83

CURRENT LIABILITIES CURRENT ASSETS

Short term borrowings 2363.73 Inventories 1832.58

Trade payables 2365.98 Trade receivables 3132.2
Other current liabilities 1941.15 Cash and cash equivalents 1111.35
Short term provisions 549.4 Short term loans and advances 400.89
Other current assets 50.27

TOTAL 8556.59 TOTAL 8556.59

54
 BALANCESHEET AS ON 31-03-2016

LIABILITIES AMOUNT ASSET AMOUNT

EQUITY AND LIABILITIES NON CURRENT ASSETS

Share capital 5721.82 Tangible assets 1818.04

Reserves and surplus -6631.76 Capital work in progress 103.96
Noncurrent investment 0.02
NON CURRENT LIABILITIES Long terms loans and advances 236.38

Long term borrowings 1083.38 CURRENT ASSETS

CURRENT LIABILITIES Inventories 2004.32

Trade receivables 4573.04
Short term borrowings 3443.17 Cash and cash equivalence 911.42
Trade payable 2026.51 Short term loans and advances 195.17
Other current liabilities 3604.15 Other current assets 59.79
Short term provisions 654.87

TOTAL 9902.14 TOTAL 9902.14

55
 BALANCE SHEET AS ON 31ST MARCH 2017

ASSET LIABILITY AMOUNT

AMOUNT

NON- CURRENT SHARE HOLDERS FUND

ASSETS
Tangible assets 1738.76 Share capital 5721.82
Intangible asset 0.16 Reserve and surplus -6497.82
Capital work in progress 53.29
Non- current 0.02 NON- CURRENT LIABILITY
investment
Long term loans and 304.15 Long term borrowings 1131.63
advances

CURRENT ASSETS CURRENT LIABILITY

Inventory 2171.91 Short term borrowings 4001.95
Trade receivables 5892.99 Trade payable 2253.23
Cash and cash 1666.67 Other current liability 4716.16
equivalence
Other current assets 261.02 Short term provisions 783.76

TOTAL 12110.73 12110.73

56
 BALANCE SHEET AS ON 31 ST MARCH 2018
NON CURRENT ASSET SHARE HOLDERS FUND

Tangible asset 1635.64 Share capital 5721.82

Intangible asset 0.16 Reserve and surplus -7375.90
Capital work in progress 271.28
Noncurrent investment 0.02 NON CURRENT LIABILITY
Long term loans and advances 324.98
Long term borrowings 936.37
CURRENT ASSET
CURRENT LIABILITY
Inventory 2175.15
Trade receivables 6039.23 Short term borrowings 4174.53
Cash& cash equivalence 1541.11 Trade payable 3164.74
Other current assets 622.73 Other current liability 5416.91
Loan and advances 13.23 Short term provisions 585.06

TOTAL 12623.53 12623.53

57