Working Capital (Full Project)

INTRODUCTION
Introduction
The project is highlighted by the fact that the manner of administration of working capital to a
very large extent the success is failure of overall operations of an enterprise. Many times, in the event of a
failure of a business concern, the shortage of working capital is given out as its main cause. The proper
management of working capital is, of crucial importance for the success of an enterprise, which involves
the administration of all current assets.
For some years now industries have been finding it increasingly difficult to produce
working capital due to continuous draining out of finances by the banks the main financing agencies for
providing working capital because of the adoptions of credit squeeze policies. The difficulties have
further been aggravated by several developments, such as inflation and shortage, having a bearing on the
working capital.
Proper management of working capital is very important for the success of an enterprise.
It aims at protecting the purchasing power of assets and maximizing the returns on investment.
The manner of administration of current assets to a very large extent determines the success of
operations of a firm. Constant management is required to maintain appropriate levels in the various
working capital account, cash budget and financial budget aid in establishing proper proportions. Sales
expansion, dividend declaration, plant expansion, new product line, increased salaries and wages, rising
price levels etc., Put added strain on working capital maintenance. Shortage of working capital, so often
advanced as the main cause of failure of a industrial concerns, is nothing but the clearest evidence if
mismanagement which is so concern. “It has been found that the largest portion of a financial manager’s
time is utilized in the management of working capital”. All these factors indicate their importance of
working capital management in a firm.
Working capital management covers the administration of all current assets, namely cash in hand,
cash at bank, marketable securities, account receivables and inventories etc., An also the administration
of current liabilities, namely bank overdrafts, account payables, short term loans and outstanding etc.,
Thus, at present working capital management has turned into a field of specialists are known as
financial executives.
NEED AND IMPORTANCE OF THE STUDY
 The amount of such of such profit largely depends upon the magnitude of sale.
 Sale does not convert in to cash instant onerously.
 There is always a time gap between the sale of goods and receipt of cash.
 Working capital is required for this period in order to sustain the sale activity.
 In case adequate working capital is not available for this period, the company
will not be in position to sustain the sales since it may not be in a position to
purchase new raw material, pay wages and other expenses required for
manufacturing the goods to be sold.
 The need for working capital to run the day to day business activities cannot be
over emphasized we will hardly find a business from which does not require any
account of working capital. Indeed, firms differ in their requirements of the working
capital.
 We know that firms aim at maximizing the wealth of share holders. Earning a
steady amount of profit requires successful sales activity.
 The firm has to invest enough funds in current assets for the success of sales
activity. Current assets are needed because sales do not convert into cash.
OBJECTIVES OF THE STUDY
Working capital management is concerned with the problems that arise in

attempting to manage the current assets, current liabilities and the relationship between
them.
 To the study the existing system of working capital management.

 To study the liquidity position of NCL Limited.
 To examine receivables position of NCL Limited.
 To calculate the inventory position of NCL using the ratio’s.
The need for current assets arises because of the operating cycle. The operating
cycle is continuous process and therefore the need for current assets is felt constantly.
But the magnitude of current assets needed is not always same, it increases and
decreases over time. However, there is always a minimum level of current assets which
is continuously required by the firm to carry on its business operations. This minimum
level of current assets is refried to as permanent or fixed working capital.
The permanent working capital line needs not to be horizontal if the firm’s
requirements for permanent. Capital is increasing (or) decreasing over period. For a growing
firm the difference between permanent and temporary
Working capital can be depicted through this figure.
SCOPE AND PERIOD OF STUDY
 The duration of the project is two months.

 The generalizations drawn are based on the past performance in respect of the company.
 The study is limited to five years 2002-03 to 2006-07.
 The data used in study have been taken from published annual reports of the
organization.
 In view of the limitation and restrictions and in collecting data, the available data are
grouped and sub grouped.
METHODOLOGY
METHODOLOGY
 Working Capital has been assessed with the help of last five years Balance Sheets and
Annual Reports.
 Inventory Management has been studied in consultation with centralized Materials
Management and Material Budget Coordination groups.
 Credit policies, receivables and their relationships are studied through discussion in
Commercial Co-ordination and Accounts Department.
 Cash inflow and outflow are employed with the help of monthly Cash Budgets and Cash
Flow Statements.
 Discussions with staff in the concerned departments of NCL Alleteck & Seccolor ltd.
I have done my project work based on the following ratio analysis. These are
1. Liquidity ratios
2. Leverage ratios
3. Activity ratios
4. Profitability ratios
INDUSTRY PROFILE
INDUSTRY PROFILE
OVER VIEW: To present study examines the efficiency of working capital management
practices of the selected firms in cement industry and tests how fast the sample firms
have been able to improve their respective level of efficiency in working capital
management, with respect to a target level.
SCOPE: Thus on the whole scope for the improvement in the matter of managing either
the individual components of current assets or the current assets as a whole for
generating increased sales revenue is found. A careful attention to this would help the
firms in enhancing their efficiency in working capital management. In the context of the
present highly competitive market situation, these scopes should be properly utilized.
FINDINGS: The present study is based on a sample of 20 large cement companies

operating in India. These companies constitute a larger part of the cement industry in
terms of market sharing within the country.
Measuring the overall efficiency of working capital management (WCM). First the
Performance Index of WCM (PIWCM) suggested by Bhattacharya (1997) has been
calculated.
CONCLUSION: An attempt has been made in the present study to investigate the
efficiency of the cement companies in the matter of management of working capital
during 1992-93 to 2001-02. Instead of using the common method of analyzing different
working capital management ratio’s, three index values representing the average
performance of the components of current assets in relation to sales and the efficiency in
managing the working capital, have been computed for the selected firms over the ten
year study period using industry norm as target efficiency level of the individual firms,
as evaluation has been made with regard to the speed of achieving that target level of
efficiency by an individual firm during the study period.
In the matter of achieving the target level (industry horn) of efficiency by the
firms. Associated cement and Delia was the most successful firm followed by Decan,
Kanoria & Madras. In view of the observed B values, once again it may not be unwise
to conclude that firms under study should take necessary steps in order to improve
efficiency in this regard. This is in particular important in the context of the present
competitive situation of the market.
Present study also suggests that a further study may be helpful for identifying the
forces that govern this entomic nature of efficiency present in the Indian cement
companies in the matter of working capital management working capital and liquidity
management in factoring. A comparative study of SBI and can bank factors.
Working Capital Management a Comparative study of the SBI and Canara Bank factors.
OVER VIEW: The present study examines the efficiency Working capital is a capital
required to manage day to day operation of a business management of adequate working
capital is essential as it has direct impact on profitability and liquidity. An attempt has
been made in this paper to study the size and its components and liquidity management
in factoring companies.
SCOPE: The paper also makes an attempt to study the correlation between liquidity and
profitability of factoring companies. SBI factors and Can Bank Factors Ltd were selected
for the purpose of study.
FINDINGS: The study is based on secondary data collected from annual reports of SBI
factors and commercial services Ltd, and Can Bank factors Ltd. Ratio analysis and
percentage method and spearman’s rank correlation have been used to analyze the data.
Test was used to check the significance of correlations.
CONCLUSION: It was observed from the study that the sundry debtors and sundry due
to creditors are the major components of current assets and profitability are in versify
related to each other in both factoring companies .The liquidity of can bank factors is
strongly related to profitability than SBI factors.
About NCL Groups
Group of companies manufacturing a range of building materials. The objective of the
Group is "to provide comfortable housing at an affordable price".
After establishing the Cement plant in 1983 the group has started identifying building
materials which are best suited for Indian construction industry .Several units have been
established with proven technologies from Europe. All these materials are Eco-friendly.
The group also has interests in Construction, Power Generation and manufacture of
Chemicals.
The turnover of the group in The Year 2006-2007 is around Rs 100 crores (over 20 Million Us
dollars.) and employs above 900 people
The manufacturing units are located across India and the head office is located in
Hyderabad, capital of state of Andhra Pradesh, India. The marketing offices are spread over
entire India.
About Cement Division
NCL Industries Ltd., an ISO 9001 : 2000 Company, made its debut in Indian Industrial
Scene way back in 1983 by setting up a 200 TPD Cement Plant at Simhapuri in Nalgonda
District, Andhra Pradesh.
The plant was expanded in stages to1800 TPD with a split grinding unit at kondapally, a
with this the present capacity increased from 2,97,00 TPA TO 6,30,000 TPA.
The Pyre Processing of the Kiln is monitored by a latest PLC System. A well equipped
laboratory ensures consistency in quality of Cement produced in our factory.
The Term "Nagarjuna Cement" has become a replica for quality, strength, consistency
and durability and commands premium, particularly in North Coastal Districts of Andhra
Pradesh and is fast spreading into other areas and neighboring States.
COMPANY POFILE
COMPANY PROFILE
BACKGROUND OF THE COMPANY
NCL Alltek & Seccolor Limited formerly Alltek coating products Limited is an
existing profit making dividend paying company engaged in the business of manufacture
and marketing of surface coating products paints and cold rolled pre painted steel
profiles for construction and architectural activities. The company has set up spray plaster
manufacturing unit at Mattapally, Huzurnagar, Nalgonda district of A.P. in technical
collaboration with international coating products, Sweden the world leaders in surface
coating products technology.
PROMOTERS
The company has been promoted by a group who are well experienced in
building material industry and they comprise of Sri K.Madhu, Sri K.Ravi, Sri
G.D.L.S.N.Raju, Sri Bimal Goradia and Sri K.S.Narayana Rao.
MANAGEMENT
The managing director of the company is Sri K.Madhu, has been in the building
material industry for the last two decades.
Sri Bimal VGoradia and Sri K.A.Reddy executive directors look after the Alltck
and Seccolor divisions respectively and experienced staff in all the functional asses one
in place. The other members of the board comprises of Sri K.Jayabharath Reddy IAS
(retd) as Chairman, and Sri V.Suderasan IAS (retd) as independent nominees.
ALLTECK PROFILE
Alltek Division of NCL Alltek & Seccolor Ltd., is established in the year 1991 by NCL
Group of Companies in Technical Collaboration with M/S International Coating Products (ICP)
of Sweden.
ICP has invented, developed and patented wide range of Spray/Textured Plasters and in
the last 5 decades, many units have been established with their technology in Europe, Middle
East, Africa and Asia.
In India, Alltek has four manufacturing facilities for high quality water based eco friendly
Architectural Textured Spray Plasters and Paints. Two units are in Andhra Pradesh, third is in
Tamilnadu and the fourth is in Rajasthan near Delhi.
Alltek has a wide marketing network with 11 Marketing Offices. 26 Resident
Representatives and a large number of dealers and distributors throughout India.
ALLTECK PRODUCTS
ALLTEK SPRAY PLASTERS & PAINTS
Alltek is a ready mixed product and is used as a coating over the cement
plastered surfaces, concrete and other surfaces. They are available for interior and
exterior applications in plan, granular and designer finishes in May natural shades to slit
various tastes. The advantages of Alltek products are they are easy to use and one anti
cracking, anti fungal and do not fade due to ultra violet radiations.
1. SPRAY PLASTER
INTERIOR SPRAY PLASTERS
Superfine: Alltek Superfine is a Ready Mix Base Plaster in paste form, comprising of Acrylic
emulsion binder, carefully selected and sieved fillers along with small quantities of performance
additives like thickeners, anti cracking and biocides. This material can be applied on RCC,
Cement walls etc. by spray equipment or by spatula to obtain a smooth clean surface or a variety
of textured finishes.
Features
An excellent leveling material with rich look.
A range of textured or a smooth finishes.
Very fast application, allows usage of a big blade (of 400mm).
Excellent breathing.
No peel off and flaking.
No discoloration.
SUPERFINE W/R: SUPERFINE WATER RESISTANT GRADE or W/R is a material with
extra Acrylic emulsion binder while all other properties are similar to superfine. This has got
better wash ability and is recommended for areas like kitchens, restaurants or other similar places
where frequent wet cleaning is required to keep the surface clean.
Features
No discoloration.
COARSE: Alltek COARSE is ready mix plaster made of bigger size particles as fillers. This
beige colored material is to level sound surfaces where undulations are heavy. This is to be
followed by coats of FINE and SUPER FINE to get a smooth wall surface.
Features
An excellent leveling material.
FINE: Alltek FINE is ready mix plaster made of medium size particles as fillers. This beige
colored material is to level sound surfaces where undulations are medium. This is to be followed
by coats SUPER FINE to get a smooth wall surface.
FEATURES:
An excellent leveling material.
B. EXTERIOR SPRAY PLASTERS:
SUPERFINE EXTERIOR: Alltek Superfine Ext. is a Ready Mix Plaster in paste form,
comprising of higher percentage of Acrylic emulsion binder, carefully selected and sieved fillers
along with small quantities of performance additives like thickeners, anti cracking, dry film
preservative and biocides. This material can be applied on RCC, Cement walls etc. by spray
equipment or by spatula to obtain a smooth clean surface or a variety of textured finishes.
Features
No discoloration.
TRENDY: A good, ready to use paste, made from naturally colored fine chips, to give matty
appearance. This is available in white and seven colors with each shade modified as Darkest
being (001) to Lightest (004).
Naturally available shades are:
Pea berry
Churchill
Night Queen
Alice
Cinderella
Sheffield
DECO ORIENT: A good, ready to use paste, made from naturally colored fine chips and gives
a texture with lines or circles as per customer choice. These lines can be Small, Medium, Big and
jumbo in size. This is available in white and seven colors with each shade modified as Dark
(00A), Medium (00B) and Light (00C).
Pea berry
Churchill
Night Queen
Alice
Cinderella
Sheffield
Also available is Deco Orient Base which should be painted with a color of customer’s
choice and still get the texture.
DUNE: A good, ready to use paste, made from naturally colored fine chips and gives a grainy
texture to walls. This is available in white and seven colors with each shade modified as Dark
(00A), Medium (00B) and Light (00C). Depending on grain size used, this is supplied as Fine,
Medium, Coarse and Extra Coarse.
Pea berry
Churchill
Night Queen
Alice
Cinderella
Sheffield
Cadbury
GOLDLINE: A fine paste made with Acrylic binders and fine natural stone powders which can
be applied with rollers to give a wide range of finishes as per customer’s choice. This is available
in white and seven colors with each shade modified as Dark (00A), Medium (00B) and Light
(00C).
Pea berry
Churchill
Night Queen
Alice
Cinderella
Sheffield
Cadbury
This material is available in limited exterior stable, pigmented colors.
2. EMULSION PAINTS
A. EXTERIOR EMULSION PAINTS
ALLTIMATE: A very high quality Exterior Grade emulsion made of pure acrylic binder and
excellent quality of pigments. Ultimate provide buildings, excellent color fastness, sheen,
coverage and a long life.
HARMONY: Good quality economical exterior grade emulsion paint with fungicides. Harmony
has a good life on buildings.
SPLENDOR: Good quality Quartz Reinforced exterior emulsion paint. The matt finish and
rough texture gives elegant look for the buildings
CEMENT PRIMER: High quality Primer, rich in pigment and binder with good penetration of
the substrate and excellent adhesion to paint.
INTERIOR EMULSION PAINTS
FLORA: A high quality interior grade emulsion paint in colors of choice with excellent
coverage and life.
GAIETY: Economic interior emulsion paint with excellent ambience for homes.
DELIGHT: An economical acrylic washable distemper which lasts long.
CEMENT PRIMER: High quality Primer with good penetration of the substrate and excellent
adhesion to paint.
3. OTHER PRODUCTS
A. TILE FIX
ALLTEK TILE FIX is a ready to use adhesive paste for thin bed fixing of ceramic tiles, rigid
and flexible insulation materials. Gives coverage of approximately 4 to 6 sft/kg, depending on
the kind of substrate. All precautions necessary for substrate preparation and after fixing should
be taken as specified.
B. FLOOR FIX
ALLTEK FLOOR FIX is a paste based on the Acrylic polymer resin system. This is a non-
toxic material with excellent adhesion to floor and floor tile. All precautions necessary for
substrate preparation and after fixing should be taken as specified.
C. ROOF COAT
This is a acrylic emulsion based “Water Proof” coating with excellent binding power.
This is ideally suited for sloping roofs. Tiles can also be fixed (use additional roof coat as binder
for fixing tiles over fully dried coat of roof coat). Min of 1.5 to 2mm thick coat is to be given for
areas where people regularly walk or areas subjected to aberration. This coat is to be protected
with tiles.
D. FLEX AND FLEXFINE
ALLTEK FLEX AND FLEXFINE is emulsion based pastes with low density fillers for
extremely good adhesion and flexibility. These are used for filling major/minor cracks in walls
and for seamless joints in board panels.
SECCOLOR PRODUCTS
The roll formed sections made of pre painted Zinc coated steel one cut and
punched as per the customer’s requirements and these sections one mainly used for
windows, doors, partitions, false ceilings etc;. Seccolor also uses GI steel sheets for
powder coating based on the choice of colors required by the customers.
Slide windows
Strong sections designed to withstand wind speeds up to 200 kms/hr.
Elegant looking due to good sense of proportion of sections and the high finish of color
coated paint.
Excellent sealing due to well designed gaskets not only around the glass but also between
the shutters and the outer frame.
Stainless steel track, good quality Nylon components along with EPDM gaskets and SS
screws give maintenance free window for a lifetime.
Provision for Fly Mesh is available.
Casement windows (side Hung): Strong sections designed to withstand wind speeds up to
200kms/hr.Elegant looking due to good sense of proportion of sections and the non fading high
finish. (color coated G.I./pure polyester powder coating.)Excellent sealing due to well designed
gaskets not only around the glass but also between the shutters and the outer frame
Reduces the load on air-conditioning as there are no air leakages.
Reduces noise & dust considerably.
Specially selected/made EPDM gaskets, electroplated corner brackets, SS friction hinges
and screws, Die cast handle, nylon handle receiver and nylon components give long maintenance
free widows for life. Flexibility in configuration, partly fixed, partly open able, top hung, arched,
bay windows etc are possible. Double insulated windows, pharma windows, economic windows
with provision for flymesh and security grill.
Specification Ajanta
Windows : Providing and fixing Windows, Top Hung Ventilators fabricated from roll formed
sections made of Galvanized Steel Color Coated/ Powder Coated (Base Steel as per IS 513 "D"
quality, Galvanized as per IS 277 with Zinc of 120 grams/ Sq. Mtr.) with total coated thickness
of 0.60 mm.
Paint Specifications : Coated Sections should be with Primer Coat of Epoxy Primer of 5-7
microns thick, finish painted with a Polyester Paint of 12-16 microns thick and back coated with
Alkyd backer of 5-7 microns, or Powder Coated with pure Polyester Powder up to 50-60 microns
thick.
Dimensions of Sections : Section for Shutter should be of 46 mm x 46 mm and External Frame
should be of 46 mm x 52 mm. Section for Glass Beading should be of 18 mm x 25 mm and
center mullion should be of 46 mm x 70 mm.
Fixing Details : The Frame & Shutter Sections should be cut to length and miter joined with
Corner Bracket made of CRCA electroplated. Mullion Section should be joined with Frame/
Mullion using Nylon Mullion Cap Ethyl Propylene Diamine Monomer (EPDM) Gasket should
be used all around glass in shutter, between frame and glazed shutter and both sides of fixed
glass.
Accessories : Handle made of high grade Aluminum powder coated and with nylon receiver.
Gaskets made of Ethyl Propylene Diamine Monomer (EPDM). Corner brackets made of CRCA
with zinc phosphate. Mullion caps made of Glass filled nylon.
Glass : Glass shutter and fixed glass portions should be provided with a glass of 5mm Plain
Float Glass.
Window Frame should be fixed to brick/ concrete masonry by using Nylon self-expanding caps
and driving MS electroplated 80mm long screws into the caps through frames.
Specification for Secco Orient (ECO-3000 Series)

Providing and fixing Eco 3000 Series Windows fabricated from roll formed sections
made of Galvanized Steel Color Coated/Powder Coated (Base Steel as per IS 513 ?D? quality,
Galvanized as per IS 277 with Zinc of 120 grams/Sq. Mtr.) with total coated thickness of 0.60
mm
microns thick, finish painted with Polyester Paint of 12-16 microns thick and back coated with
thick.
Dimensions of Sections : Section for frame should be 48 mm x 50 mm, Section for Mullion
should be of 48 mm x 50 mm, Section for Glazed Shutter Frame should be of 47 mm x 20 mm,
and Section for Fixed Glass Bead should be of 12 mm x 12 mm.
Fixing Details : Frame and Shutter Frame Sections should be cut to length and miter joined with
Polypropylene Corner Brackets. Mullion Section should be joined with Frame/Mullion using
Nylon Mullion Cap. Ethyl Propylene Diamine Monomer (EPDM) Gasket should be used all
around glass in shutter.
Accessories : Each Glazed Shutter should be provided with S.S. Pivot Hinges-1set,
Polypropylene Handle 1 No. 3? Aluminum Powder Coated Tower Bolts with Receiver-2 No?s.
Aluminum Peg Stay Powder Coated ? 1 No?s.
Glass : Glazed Shutter and Fixed Glass portions should be provided with a glass of 5 mm Plain
Float Glass.
Grill : Windows should be provided with Grill made of 10 mm sq. MS Bars welded to at 150
mm center-to-center, 6 mm x 12 mm MS flat. Total grill unit should be powder coated and fixed
to window frame with screws.
Window Frame should be fixed to brick/concrete masonary by using Nylon self-
expanding caps and driving MS electroplated 80 mm long screws into the caps through frames.
Specification for Secco Orient ( Eco - 4000 Series)
Providing and fixing Windows, Ventilators fabricated from roll formed sections made of
Galvanized Steel Colour Coated/ Powder Coated (Base Steel as per IS 513 ?D? quality,
Galvanized as per IS 277 with Zinc of 120 grams/ Sqr. Mtr.) with total coated thickness of 0.60
mm
microns thick, finish painted with Polyester paint of 12-16 microns thick and back coated with
thick.
Dimensions of Sections : Sections for Frame should be of 72 mm X 55 mm, Section for Mullion
should be of 72 mm X50 mm, Section for Shutter Frame should be of 47 mm X 20 mm, Section
for Fixed Glass Bead should be of 12 mmX12 mm, and Section for Fly mesh should be of 40
mm X 20 mm.
Fixing Details : Section for Frame Glazed Shutters and Mesh Shutters should be cut to length
and mitre joined with Polypropylene Corner Brackets, Mullion Section should be joined with
Frame/ Mullion using Mullion Cap Ethyl Propylene Diamine Monomer (EPDM) Gasket should
be used all around glass in shutter and Fixed Glass. Rubber Gasket should be used around Fly
mesh to fix Mesh in Mesh Shutter.
Accessories : Each Glazed Shutter and Mesh shutter should be provided with SS Pivot Hinges ?
1 set, Poly propylene Handle -1 No. 3? Aluminum Tower Bolts with Receivers -2 Nos and
Aluminium Powder coated Peg stay ? 1 No. for Glazed shutter alone.
Glass : Glazed Shutter and Fixed Glass portions should be provided with a glass of 5 mm Plain
Float Glass.
Mesh : Mesh Shutter should be provided with a Stainless Steel 32 gauge Fly mesh of 304 grade
with 144 holes per sq. Inch.
Windows should be provided with Grill made of 10 mm sq. MS Bars welded to at 150
mm centre-to-centre, 6 mm X 12 mm MS flat. Total grill unit should be powder coated and fixed
Window Frame should be fixed to brick/concrete masonry by using Nylon self-expanding
caps and driving MS electroplated 80mm long screws into the caps through frames.
Specification for Secco Plus (Eco 5000 Series)
Providing and fixing Windows, Ventilators fabricated from roll formed sections made of
Galvanized Steel Color Coated/Powder Coated (Base Steel as per IS 513 ?D? quality,
Galvanized as per IS 277 with Zinc of 120 grams/ Sqr. Mtr.) with total coated thickness of 0.60
mm.
microns thick, finish painted with a Polyester Paint of 12-16 microns thick and back coated with
thick.
Dimensions of Sections : Section for Frame should be of 98 mm X 50 mm, Section for Mullion
should be of 46 mm X 70 mm, Section for Shutter Frame should be of 46 mm X 46 mm, Section
for Fixed Glass Bead should be of 18 mm X 25 mm and Section for Fly mesh Shutter Frame
should be of 20 mm X 40 mm
Fixing Details : Frame and Mesh Shutter Sections should be cut to length and miter joined with
Corner Bracket made of Polypropylene. Glass Shutter should be miter joined with corner
brackets made of CRCA electroplated. Mullion Section should be joined with Frame/ Mullion
using Nylon Mullion Cap Ethyl Propylene Diamine Monomer (EPDM) Gasket should be used
all around glass in shutter between Frame and Glazed Shutter and both sides of Fixed Glass.
Rubber Gasket should be used around Fly mesh to fix Mesh in Mesh Shutter.
Accessories : Each Glazed Shutter should be provided with MS Powder Coated Friction
Hinges ? 1 set, High Grade Aluminum Powder Coated Handle -1 No. Each Mesh shutter should
be provided with S.S. Pivot Hinges-1 set, Polypropylene Handle- 1 No. and 3? Aluminum Tower
Bolts with Receivers-2 No.
Glass : Glass Shutter and Fixed Glass portions should be provided with a glass of 5 mm Plain
Float Glass.
Mesh : Mesh Shutter should be provided with a Stainless Steel 32 gauge Fly mesh of 304 grades
with 144 holes per square Inch.
Grill : Windows should be provided with Grill made of 10 mm sq. MS Bars welded to at 150
mm centre to centre, 6 mm X 12 mm MS flat. Total grill unit should be powder coated and fixed
Window frames should be fixed to brick/ concrete masonry by using nylon self
expanding caps and driving MS electroplated 80 mm long screws into the caps through frames.
Partitions
Elegant looking galvanized color coated steel sections, with good quality of accessories
for maintenance free Partitions.
Excellent sealing reduces noise, dust and load on air-conditioning.
Infill option available for full glazing, partly glasses and partly Boards or fully board.
Standard sections can be used up to 10' 6" high partition.
For higher than 10'6'', partition sections are made depending on requirements.
Doors
NCL Seccolor makes a range of doors and door frames out of Galvanized color coated
steel(CCS), stainless steel, GI and CRCA.
Panel Doors made of CCS/SS can be either partly or fully glazed. Laminated board etc.,
can be used as infill (fully or in part).
Swing Doors.
Door Frames in CCS, SS, GI or CRCA are made in various shapes and sizes of sections
with or without provision for gaskets, with various rebates depending upon the thickness of the
shutter and with or without provision for FlyMesh shutter.
Industrial Doors : Double shutter doors (each shutter of up to max of 4ft x 8ft), Sliding doors
(Top Hung with Rollers) can be offered for big projects.
Curtain Glazing
NCL Seccolor has designed and executed several glazing works spread throughout India.
Each of these elegant looking Glazing are designed to withstand the wind speeds as per
IS875 ranging from 100 Kms/Hr to 225 Kms/Hr.
The sections are made exactly to the requirement of each project and hence they are not
over designed or under designed and hence are economical.
Galvanized color coated steel is used for the frame work while some Gl or CR sections
are used for additional strengthening if necessary.
Good quality of gaskets, Nylon components and other specially selected accessories are
used to give Elegant, Economical, Strong and Durable Curtain Glazing with good sealing.
Structural Glazing
NCL Seccolor has designed and executed several glazing works spread throughout India.
Each of these elegant looking Glazing are designed to withstand the wind speeds as per
IS875 ranging from 100 Kms/hr to 225 Kms/hr.
Seccolor Structural glazing are unique in the sense :
Glass is held in position by top and down stainless steel sections and Silicone. Hence
Double safe and Silicone is used mainly for waterproofing while it also provides additional hold.
The mainframe is made of color coated G.I. sections amply supported by G.I. stiffeners.
Glazing are designed exactly to the requirement. Not over designed or Under designed.
Hence Economical.
Galvanized color coated steel is used for the frame work while some GI or CR sections
are used for additional strengthening if necessary.
MARKET
ALLTEK PRODUCTS
Alltek is the first company in India to start marketing spray plasters and is a
brand leader in South India. The CAGAR in sales has been around 50% and the
company’s 60% of the sales are in A.P., 30% in rest of south India, and 10% in places
like Delhi, Jaipur, Chandigar etc;
SECCOLOR PRODUCTS
Seccolor division has a marketing team of 45 people in located throughout South
India, Maharashtra & Delhi. The CAGAR has been around 20% and is expected to grow
further with the acceptability of the product.
THEORITICAL ASPECTS
OF
WORKING CAPITAL
MANAGEMENT
THEORITICAL ASPECTS OF
WORKING CAPITAL MANAGEMENT
Though working capital is of vital significance to an undertaking in several ways, the

management of which did not receive adequate attention until recently. The management of fixed
assets is getting precedence over the working capital. Working capital management refers to the
control of both current assets and current liabilities. It involves control of components of current
assets such as cash, inventories, accounts receivables, marketable securities and current
liabilities, such as short-term debt, creditors, bank loans, provisions, etc. Management and
control of working capital has been treated as the vital function of financial management in
modern business. It is highly flexible in nature and policies and to frame depending upon the
market conditions prevailing in the economy.
MEANING OF WORKING CAPITAL:
Working capital refers to that part of the firm’s capital which is needed for financing
short term (or) current assets such as cash, marketable securities, debtors and inventories.
Working capital is the amount of funds necessary to cover the cost of operating the enterprise.
Working capital has ordinarily been defined as the excess of current assets over current
liabilities.
Concepts of Working Capital:
Like most other financial terms, the concept working capital is used in different
connotations by different experts. The concept of working capital is divided into two different
concepts of working capital.
Gross Working Capital:
The gross working capital is also known as “current capital” (or) circulated capital is
represented by the sum total of all current assets of the enterprise. It refers to the investment in
current assets such as inventories, cash and bank balances, accounts receivables, debtors, etc.,
which can converted into cash in short notice. Investment in current assets should be adequate,
since inadequate investment causes solvency problems.
Working capital is necessary to run a business firm and to meet day to day expenses.
Without current assets, it is not imaginable to make sales and maximize profit. Cash is generated
through sale which is possible with the investment in inputs such as raw materials, consumables
labor etc., and hence working capital is necessary for acquiring inputs.
Net Working Capital:
It refers to different between current assets and current liabilities. Net working capital can
be positive (or) negative. It is conventional to maintain sufficiently excess current assets. It is a
conventional rule to maintain the level of current assets twice the current liabilities. Net working
capital refers to the judicious mix of long term and term loans for financing current assets.
However a minimum amount of net working capital is permanent and therefore it is necessary to
finance the long term capital. Weak liquidity position is a threat to the solvency to the company.
Both gross and net working capitals are necessary for a firm. Any size of current assets
can be maintained by raising short term debts. So, a prudential management will see long term
funds go into working capital, so as to be stable. Hence a firm which maintains highest working
capital is said to be sound. It does not mean that net working capital i.e., if the difference
between current assets and current liabilities is too high, it sounds idle current assets. Idle current
assets maybe in the form bas debts, unmoving inventories, hence too high net working capital is
not a sound indicator.
Operating Cycle and Need for Working capital
The profits earned by the firm depend upon the magnitude of the sales, among other
things. A successful sale program is, in other words necessary for earning profits by one business
invariably a time lag between sale of goods and receipt of cash. There is therefore a for working
capital in the form of current assets to deal with the problem arising out of the lack of immediate
realization of cash against goods sold. Therefore sufficient capital is necessary to sustain sales
activity. Technically this is referred to as the operating cycle and cash cycle. It is defined as a
continuing flow from cash to suppliers, to inventory, to accounts receivable and back into cash. It
consists of 3 phases.
1 Conversion of cash in to inventory.
2 Conversion of inventory in to receivables.
3 Conversion receivables in to cash.
Operating Cycle for manufacturing firm
Purchase of Raw Material Issue of material to production
Raw Material
CASH
Work in Progress
Account Receivables Finished Goods

Sales
Since cash inflows and out flows do not match firms have to necessarily keep cash or invest in
short term liquid securities that they will be in position to meet obligations when they become
due.
Operating cycle for Non-Manufacturing Firm
Debtors
Cash
Stock of Finished Goods

Permanent and Variable Working Capital
The magnitude of working capital required is not always the same and increases and
decreases over time. However there is always a minimum level of current assets, which is
continuously required by the firm to carry on its business operations. This minimum level of
current assets is referred to as permanent or fixed working capital. It is permanent in the same
way as the firms fixed assets are.
Depending over and above permanent working capital will fluctuate. For example, extra
inventory of finished goods will have to be maintained to support peak period of sale and
investment and investments in receivables may also increase during such periods. The extra
working capital needed to support the changing production and sales activities is called
fluctuating or variable temporary working capital.
Both kinds of working capital-permanent and temporary are necessary to facilitate

production and sale through operating cycle, but the firm to meet liquidity requirements that will
last only temporarily creates temporary working capital.
Permanent working capital is stable over time while temporary working capital is
fluctuating. However the permanent working capital line need not be horizontal if the firm’s
requirement for permanent capital is increasing over period. For a growing firm, the difference
between permanent and temporary working capital is depicted below.
Draw backs of excessive working capital
1. It results in unnecessary accumulation of inventory. Thus, chances of inventory

mishandling, waste, theft and losses increase.
2. It is an indication of defective credit policy and slack collection period. Consequently
higher incidence of bad debts results, which adversely affects profits.
3. Excessive working capital makes management complacent, which degenerates in to,
managerial in efficiency.
4. Tendencies of accumulating inventories to make speculative profits grow. This may tend
to make dividend policy liberal and difficult to cope with in future when the firm is
amiable to make speculative profits.
DETERMINANTS OF WORKING CAPITAL:
It is understood that working capital is the vital component for future growth of the firm.
Financial manager has to maintain adequate level of working capital. There are no set rules (or)
formula to determine the working capital requirements of a firm. There are several factors which
determine the working capital. It is necessary to know those factors which identifying the
optimum size of working capital.
1. Nature of the business: The working capital requirements of a firm are basically
influenced by the nature of its business. Firms engaged in trading and financing activities
make heavy investment in current assets as compared to the investment in fixed assets,
whereas in the case of rail and road transport and other public utility services steel.
Aluminum, Automobile industries, working capital forms a relatively low proportion of
total assets.
2. Operating cycle: The operating cycle implies the stages (or) process through which the
raw materials are processed to get the final product. If the process is lengthy and takes
long time to get the finished product, the requirements of working capital will be much
larger than that of a unit which has a relatively low operating cycle. The shortest
manufacturing process will minimize the investment in the form of work-in-progress.
3. Seasonal Fluctuations: The requirement of working capital to a company is influenced
by the demand for the product. If the firm’s products are seasonal, demand-oriented, not
only the amount of working capital fluctuates from one season to the other, but also the
composition of working capital. During the season, cash and bank balances converted
into inventory. The working capital level will increase and cash balances may reduce.
4. Growth and expansion of business: The working capital requirement of the firm will
increase as it grows in terms of sales (or) fixed assets, current assets are closely related
with that of sales. The requirements of working capital for a growing firm will be more.
A growing company has to maintain proper balance between fixed assets and current
assets in order to sustain its growing production and sales. This will in turn increase the
investment in current assets to support the increased scale of operations.
5. Firm’s credit policy: The credit policy of the affects working capital by influencing the
debtor balances. The credit terms of a company may also depend upon the industry credit
norms. If a company follows a liberal credit policy, without following the norms of
credit, it will result in more credit sales, increased book debts and increased investment in
working capital.
6. Turnover of current assets: Turnover of current assets refers to the speed at which the
components of current assets can be converted in to cash. The greater the turnover is low,
the company can witness heavy piling up of various components of current assets and
increased level of working capital.
7. Availability of credit: The level of working capital of a company also depends upon the
credit facility available to it. The firm will need less working capital, it liberal credit
terms are available. The availability of credit from commercial banks also influences
working capital needs of the firm. Generally, if a firm gets credit facility easily, on
favorable conditions, it can operate with less working capital than a firm without such
facility.
8. Dividend policy: Dividends are paid to share holder of the company out of the profits.
The payments of dividends result in cash outflow. Further, a desire to maintain an
established dividend policy may affect the company by reducing the cash balances. It will
cause changes in the level of working capital. Often, changes in working capital
therefore, act as a powerful reason for reducing (or) skipping a cash dividend.
9. Taxation: Taxation is a short- term liability payable in cash. Advance, payment of tax
may have to be paid on the basis of anticipated profits. Tax is the first appropriation out
of profits. Higher the tax, greater is the strain on the working capital of the company.
10. Government regulations and restrictions: Regulations and restrictions by the
government and Reserve Bank of India through such controls, as credit control, import
regulations, influence the working capital of companies. For instance the Tondon
Committee has prescribed norms for holding inventory and debtor which the company is
not expected to exceed.
CASH MANAGEMENT:
Introduction:
Now-a-days all business transactions are done with cash in the form of coins and notes.
Normally, every business firm holds 1 to 3 percent of its assets in the form of cash to enable
itself to in the form of cash to enable itself to discharge its routine and non- routine obligations
such as payment of salaries meeting bills, pay for expenses, repayment of loan, dividends,
interest etc. the comfort of business transaction depends more on the amount of cash it holds
either in bank (or) on hand. To enable its liquidity, and paying capacity, a sound cash
management is necessary.
Motives for Holding Cash:
Transaction motive:
Cash manager is expected to arrange right amount of cash at right. In fact, the receipts
will never synchronize with cash obligations to pay for, so to meet expenses timely, a firm hold
optimum amount of cash and comfortable in its cash transactions. Larger the business
transaction, less the amount of cash balance to be maintained.
Precautionary motive:
Firms at time need cash without prior notice. They cash under emergency conditions such
as break down of machines, fire, theft, accidents etc. falling which they have to pay heavy
penalties. In such cases cash rich companies can withstand rather than nil less cash companies.
Thus, casualties accidents, theft, machinery break-down etc., in organizations generally downed
cash immediately. To meet the said eventualities, the firms have to maintain cash balance. This
cash balance is called precautionary cash balance. Hence they have to raise funds in very short
notice (or) sometimes spontaneously also. At that time only cash rich companies credit worthy
will be able to survive under hectic conditions cited above.
Speculative motive:
Occasionally, every business firm comes across speculative conditions such as sudden
and sudden and heavy flections in prices of raw materials and rates of interest leading to rise in
market for goods. Hence, there is sudden rise in demand for goods, which warrants availability
of cash in very short notice. Thus the speculative conditions give chance to raise profitable
opportunities. Firm, having ability to generate cash in short notice will take advantages of these
speculative conditions of business opportunities.
INVENTORY MANAGEMENT
Inventory management is the crucial aspect of whole Working Capital Management,
since inventories constitute 60 to 70 percent of current assets in any manufacturing company.
Success of any industry depends upon inventory policies. The inventory controller is expected to
ensure right inventory at right time, right quality from a right place at right price in order to
minimize the cost of manufacturing.
Components of inventory:
a. Raw material:
Raw materials are the input for manufacturing goods (or) products.
b. Working in process:
It is processes of raw materials converted into finished goods.
c. Finished goods:
Finished goods are the goods ready to market to the sales.
Need for Holding Inventory:
1. Continuous production:
Production without halt will be possible by holding enough inventories. Otherwise, firm
has to incur heavy costs for keeping the machine idle.
2. Continuous supply to market:

Proper inventory management will ensure finished goods without interruption which
leads to customer satisfaction.
3. No stock-out problem:
Shortage of Inventory often cause stock-out problem, there by consumers shift to
competitors.
4. Cost saving:
Enough inventories will ensure continuous production in the absence of which cost of
production will be high.
5. High Margin of price vise:

Cost saving would enable the problem to enjoy better profit and ultimately higher return
to the firm.
6. Advantage of Price vise:

Flections fluctuations due to change in supply and demand factors when price rise, the
firm holding inventories will enjoy sudden profits.
7. Scarcity:
At times raw materials may become scare due to sudden changes in supply (or) power
failures. In these situations inventories holding would enable the firm.
INVENTORY MANAGEMENT TECHNIQUES:
The essence of inventory management is to maximize profits with minimum investment

in inventory for which various techniques are used.
1 Economic Order Quantity (EOQ): For efficiency, in inventory management the often
encountered question, is for how much quantity has to ‘order for’. But it varies from item
to item. The optimum quantity which is economically viable is called “E.O.Q (or)
Economic Lot Size”. An order size should neither be high (or) low. Higher the order size,
an enterprise practice, more the carrying costs the firm incurs. Smaller the order size
more the ordering costs the company incurs, since the firm places order many times a
year.
Formula for E.O.Q = 2AOc
Cs
A = Annual consumption
Oc = Ordering Cost per Order
Cs = Carrying Cost per Unit per Year.
2 A.B.C. Analysis: Inventory includes several items and they are categorized on the basis
of value. All items need not be stocked in equal quantities. Every item may not be an
essential one. So the financial manager divide all these inventory into three categories on
the basis of value.
• High Value (A)

• Moderate Value (B)
• Low Value (C)
Since ‘A’ items are costly, high control is used, ‘B’ items are under reasonable control
and ‘C’ items are simple no control, since they are of low value.
3 Ageing Schedule: The inventory items are grouped into basing on the number of
days/months they have been lying in warehouse. More the number of days/months on
item are hold in warehouse, it is said to old. The economic value of an item depends upon
its quality, usage and relevance, utility value of old items that is lying in godown for a
long time will be low.
4 Safety Stock: It is the number of units to be maintained as cushion against delay in

delivery of stocks. Normally manager of inventory so add safety stock while calculating
average inventory.
5 Just – In – Time (JIT): Normally, inventory costs are high and controlling inventory is
complex because of uncertainties in supply, dispatching transportation etc., lack of
coordination between suppliers and ordering firms is causing sever irregularities,
ultimately the firm ends-up in inventory problem.
6 V.E.D. Analysis: Stocks are divided into three categories such as Vital, Essential and
Desirable. It will helps manager to take inventory decisions are taken more carefully and
seriously for items of vital category, next comes essential item and followed by desirable
item.
7 F.S.N. Analysis: According to this approach the inventory item are categorized into three
types. They are fast moving, slow moving, and nonmoving. Inventory decisions are very
carefully taken in the case of not moving category. In the case of item of fast moving
items the manager can take decisions quite easily because any error happened will not
trouble the firm so seriously. Since risk in less in fast moving items, because they can be
consumed quickly unlike the nonmoving category, which are carried in the godown for
more time period.
Management of accounts Receivables:
Sales cannot be done for cash alone and trade creditor is in evitable in the modern
business society which is the basis of accounts receivables. And credit is also allowed by many
as a sales technique to maximize the sales technique to maximize the sales and profits. Trade
credit act as bridge between producers as funds will tie up. Hence, accounts receivable
management is also a vital aspect of working capital management.
RATIO ANALYSIS
Ratio Analysis is a technique of analysis and interpretation of financial statements. It is
the process of establishing and interpreting various ratios for helping in making certain decisions.
The suppliers of goods on credit, banks, financial institutions, investors, share holders and
management all make us of ratio analysis has a toll in evaluating the financial position and
performance of a firm for granting credit providing loans and making investments in the firm. A
single ratio is itself does not convey much of sense. Evaluation may be done by comparing
present ratio and past ratios as this indicates the direction of change and whether the firm’s
performance and financial position has improved, deteriorated or remained constant over a
period of time.
Ratio analysis is a powerful tool of financial analysis. A ratio is defined as “the

relationship between two or more things”. In financial analysis, ratio is used as a benchmark for
evaluating the financial position and performance of a firm.
Significance of Ratio Analysis
1) Ratio analysis simplifies complex financial data. It reveals the financial condition of the
business.
2) Ratio analysis throws light on the degree of efficiency of management.
3) It may be used as instruments of management control.
4) It helps in assessing financial performance and profitability of the concern.
5) It helps investors in making investment decision to make a profitable investment.
TYPES OF RATIOS
Several ratios calculated from the accounting data, can be grouped into various classes
according to financial activity or function to be evaluated. The classification of ratios is:
1. Liquidity ratios
2. Leverage ratios
3. Activity ratios
4. Profitability ratios
LIQUIDITY RATIO’S
Liquidity Ratio’s measure the ability of the firm to meet its current obligations.
In fact analysis of liquidity needs the preparation of cash budgets and cash and fund flow
statements; but liquidity Ratio’s by establishing a relationship between cash and other
current assets to current obligations, provide a quick measure of liquidity.
1. Current Ratio
2. Quick Ratio
3. Cash Ratio
CURRENT RATIO
Current assets include cash and those assets which can be converted in to cash
within a year, such as marketable securities, debtors and inventories. Prepaid expenses one
also included in current asset. All obligations maturing within a year are included in
current liabilities. Thus current liabilities include creditors, bills payable, accrued
expenses, short term bank loan income tax in the current year. The current Ratio is a
measure of the firm’s short term solvency.
A conventional rule, a current Ratio of arbitrary standard of 2 to 1 should not be

blindly followed. Firms with less than 2 to 1 current ratio’s may be doing well, while
firms with 2 to 1 or even higher current ratio’s may be finding great difficulties in
paying their bills. This is so because the current ratio is a rest of quantity not a quality.
QUICK RATIO
This ratio establishes a relationship between quick or liquid, assets and current
liabilities. An asset is liquid if it can be converted in to cash immediately or reasonably
soon without a loss of value. Cash are considered to be relatively liquid and included in
quick assets are book debts (debtors and bills receivables) and marketable securities
(temporary quoted investment). Inventories are considered to be less liquidity.
Generally a quick ratio of 1 to 1 is considered to represent as at is factory
current financial condition.
CASH RATIO
Cash and bank balances and short – term marketable securities are the most liquid assets
of a firm, financial analysis lock at cash ratio, which is defined as
LEVERAGE RATIO
Financial leverage refers to the use of debt finance. While debt capital is a cheaper source
of finance, it is also a riskier source of finance. Leverage ratios help in assessing the risk arising
from the use of debt capital. Two types of ratios are commonly used to analyze financial
leverage:
1. Structural ratio
2. Coverage ratio
STRUCTURAL RATIO
Structural ratios are based on the proposition of debt and equity in the financial structure
of the firm. The importance structural ratios are:
a) Debt equity ratio

b) Debt assets ratio
COVERAGE RATIO
Coverage ratios show the relationship between debt servicing commitments and the
sources for meeting these burdens. The importance coverage ratios are:
1. Interest coverage ratio
2. Fixed changes coverage ratio
3. Debt service coverage ratio.
TURNOVER/ACTIVITY RATIOS
Funds of creditors and owners are invested in various assets to generate sales and profits.
Activity ratios are employed to evaluate the efficiency and effectiveness with which a firm
managers its resource or assets. Activity ratios are also called as “Turnover Ratio” because they
indicate the speed with which the assets are converted or turned over into sales. A proper balance
between sales and assets generally reflects that assets are well managed.
1. Inventory Turnover ratio

2. Working Capital Turnover Ratio
3. Debtors Turnover Ratio
4. Average Collection Period
5. Current Assets turnover ratio
6. Fixed Assets Turnover Ratio
INVENTORY TURNOVER RATIO
This ratio establishes the relationship between the costs of goods sold to average
inventory. The higher of this ratio is better to firm, because it show the finished stock turnover. A
low stock turnover ratio is not absolute stock. The stock turnover ratio is calculated by applying
following principles.
WORKING CAPITAL TURNOVER RATIO
Working Capital Turnover Ratio indicates the velocity of utilization of net working
capital. It indicates the number of times net W.C., is turned over in the course of a year. It is a
measure of the firm’s efficiency to utilize its working capital. A higher ratio indicates efficient
utilization of working capital and a low ratio indicates otherwise. However a very high ratio is
not a good situation for any firm and hence care must be taken while interpreting the ratio.
DEBTORS TURNOVER RATIO
Debtor’s Turnover Ratio indicates the velocity of debt collection of a firm. In simple
words it indicates the number of times average debtors are turned over during a year. Generally
the higher the value of debtors turnover the more efficient is the management of debtors / sales
or more liquid are the debtors precaution should be taken while interpreting a very high ratio as it
may imply a firm’s inability due to lack of resources to sell on credit there by losing sales and
profit. Comparing the ratios over some years and finding the trend may interpret the ratio.
AVERAGE COLLECTIO PERIOD
The average number of days for which book debt remains outstanding is called the
average collection period.
CURRENT ASSETS TURNOVER RATIO
FIXED ASSETS TURNOVER RATIO

TREND VALUES
The financial statements can be analyzed by computing trends of series of information.

This method shows up words and down word of the various items this method also used by
calculating the percentage. Generally the first year is known as “base year’. If the value is taken
as “100” thereafter, trend value Percentage is calculated for each and every item.
ANALYSIS
OF
WORKING CAPITAL
Analysis of Working Capital Management in NCL Allteck & Seccolors ltd
Gross Working Capital in NCL Allteck & Seccolors ltd
Gross Working Capital in NCL Allteck & Seccolors ltd during the period 2002-03 to
2006-07.
S.no Year Gross Working Capital in Rs

1 2002-03 108293752.00
2 2003-04 102472904.00
3 2004-05 147435062.00
4 2005-06 206208408.00
5 2006-07 287442799.00
Working Capital of NCL Allteck & Seccolor ltd during the period from 2002-03 to 2006-07.
Interpretation
The gross working capital of NCL Allteck & Seccolor ltd during the period 2002-03 is
10.82 crores. It has decreased to 10.24 crores in the year 2003-04. It has increased to 14.74
crores in the rear 2004-05. It was increased to 20.62 crores in the year 2005-06. And it has
increased to 28.74 crores in the 2006.07, because of an increase in the current assets, loans &
advances.
Net Working Capital
The following table shows Net working capital of NCL Allteck & Seccolor ltd. During
the period of 2002-03 to 2006-07.
S.no Year Current Assets Current Liabilities Net Working

Capital
(Rs) (Rs)
1 2002-03 108293752.00 77331297.00 30962455.00
2 2003-04 102472904.00 69501687.00 32971217.00
3 2004-05 147435062.00 65369560.00 82065502.00
4 2005-06 206208408.00 97369018.00 108839390.00
5 2006-07 287442799.00 102285003.00 185157796.00
Net working capital of NCL Allteck & Seccolor ltd. During the period of 2002-03 to 2006-07.
Interpretation
The data in above graph represent the fact that the networking capital of NCL Alltect &
Seccolor ltd in the year 2002-03 Rs 3.09 crores. It was increased to 3.29 crores in the year 2003-
04. It has more increased to 8.20 crores in the year 2004-05. It has increased to 10.88 crores in
the year 2005-06 and it has tremendous increased to 18.51 crores in year 2006-07. Because of
increased in the current assets than the current liabilities.
Statement showing changes in Working Capital:

Statement showing changes in working capital of NCL Alltek & Seccolor ltd during the
period 2002-03 to 2003-04.
2002-03 2003-04 Increase Decrease

Particulars Rs Rs
Current Assets, Loans &
Advances:
Investors 31088050.00 26788981.00 4299069.00
Sundry Debtors 55726928.00 63595245.00 7868317.00
Cash & Bank balances 3364221.00 4091844.00 727623.00
Loans & Advances 18114553.00 7996834.00 10117719.00
Total Current Assets (A) 108293752.00 102472904.00
Current Liabilities &
Provisions:
Current Liabilities 66467339.00 58835428.00 7631911.00
Provisions 10863958.00 10666259.00 197699.00
Total Current Liabilities (B) 77331297.00 69501687.00
Net working capital (A-B) 30962455.00 32971217.00 2008762.00

period 2003-04 to 2004-05.

Particulars Rs Rs
Advances:
Investors 26788981.00 44104644.00 17315663.00
Sundry Debtors 63595245.00 82757950.00 19162705.00
Loans & Advances 7996834.00 16561310.00 8564476.00
Provisions:
Provisions 10666259.00 13932640.00 3266381.00

period 2004-05 to 2005-06.

Particulars Rs Rs
Advances:
Investors 44104644.00 50916919.00 6812275.00
Sundry Debtors 82757950.00 119556184.00 36798234.00
Loans & Advances 16561310.00 26852886.00 10291576.00
Provisions:
Provisions 13932640.00 25062032.00 11129392.00

period 2004-05 to 2005-06.

Particulars Rs Rs

Advances:
Investors 50916919.00 66380122.00

Sundry Debtors 119556184.00 137316339.00
Cash & Bank balances 8882419.00 2872634.00
Loans & Advances 26852886.00 80873704.00

Provisions:

Provisions 25062032.00 24231720.00 830312.00

Ratio Analysis of Working Capital management of NCL Allteck & Seccolors
ltd.
LIQUIDITY RATIO
A. Current Ratio
Table showing the Current Ratio of NCL Alltek & Seccolorltd during the period 2002-03 to
2006-07.
S.no Year Current Assets (Rs) Current Liabilities(Rs) Current Ratio.

1 2002-03 108293752.00 77331297.00 1.40
2 2003-04 102472904.00 69501687.00 1.47
3 2004-05 147435062.00 65369560.00 2.26
4 2005-06 206208408.00 97369018.00 2.12
5 2006-07 287442799.00 102285003.00 2.81
Interpretation:
The date in the above graph represent the test that the current ratio of Allteck & Seccolor
ltd is 1.40 in the year 2002-03, and in the next year the current ratio is increased to 1.47. In the
year 2004-05 current ratio is increased to 2.26. But in the next year the ratio was come down to
2.12. In the last year 2006-07 ratio is increased to 1.55.
B. Quick Ratio (or) Liquidity Ratio

Table showing the Quick Ratio of NCL Alltek & Seccolor ltd during the period 2002-03
to 2006-07.
S.no Year Quick Assets (Rs) Current Liabilities (Rs) Quick Ratio
1 2002-03 77205702.00 77331297.00 0.99
2 2003-04 75683923.00 69501687.00 1.08
3 2004-05 103330418.00 65369560.00 1.58
4 2005-06 155291489.00 97369018.00 1.59
5 2006-07 221062677.00 102285003.00 2.16
Interpretation:
The data in the above graph represent the test that the quick ratio of Alltek & Seccolor ltd
is 0.99 and in the next year the quick ratio is increased to 1.08. In the year 2004-05 the ratio is
increased to 1.58 and 2005-06 the ratio is increased 1.59. The last year 2006-07 the ratio is
increased to 2.16.
C. Cash Ratio
Table showing the Cash Ratio of NCL Allteck & Seccolor ltd during the period 2002-03
to 2006-07.
S.no Year Cash & Bank Current Liabilities Cash
(Rs) Ratio
1 2002-03 3364221.00 77331297.00 0.04
2 2003-04 4091844.00 69501687.00 0.06
3 2004-05 4011158.00 65369560.00 0.06
4 2005-06 8882419.00 97369018.00 0.09
5 2006-07 2872634.00 102285003.00 0.03
Interpretation:
The data in the above graph represent the test that the Cash Ratio of NCL Allteck &
Seccolor ltd is 0.04 in the year 2002.-03. In the year 2003-04 the Cash Ratio is increased to 0.06.
The next year also Cash Ratio is 0.06 and the next year ratio is increased to 0.09. But the last
year 2006-07 the cash ratio is decreased to 0.03.
TURNOVER RATIO [Activity Ratio]

1. Inventory Turnover Ratio
Table showing the Inventory Turnover Ratio of NCL Allteck & Seccolor ltd during the
period 2002-03 to 2006-07.
Particulars 2002-03 2003-04 2004-05 2005-06 2006-07
Sales 416441068.0 181652413.0 450113780.0 565497049.0 698118386.00

0 0 0 0
Gross Profit 154656010.0 54454564.00 159260340.0 209391264.0 241239109.00
0 0 0
Cost of goods 261885058.0 127197849.0 290853440.0 256105785.0 456879277.00
sold 0 0 0
Opening 11005772.00 12191935.00 10769595.00 15096416.00 19492480.00

Inventory
Closing 12191935.00 10769595.00 15096416.00 19492480.00 23951448.00

Inventory
Average 11598854.00 114880765.0 12933006.00 17294448.00 21721964.00

Inventory 0
Inventory
Turnover 22.58 11.08 22.49 20.59 21.03
Ratio
Interpretation:
In the year 2002-03 the inventory turnover ratio is 22.58, but in the next year the ratio
was decreased to 11.08. In the year 2004-05 the ratio is increased to 22.49. In the year 2005-06
the ratio was decreased to 20.59. The next year 2006-07 the inventory turnover ratio is increased
to 21.03.
2. Debtor Turnover Ratio
Table showing the Debtor Turnover Ratio of NCL Allteck & Seccolor ltd during the
period 2002-03 to 2006-07.
If the figure net credit sales are not available, one many have to make do with the net
sales figure.
Opening Closing Average Debtor

Year Sales Debtors Debtors Debtors Turnover
Ratio
2002-03 416541068.0 3778297.00 55726928.00 29752613.00 14.00
0
2003-04 181652413.0 55726928.00 63595245.00 596610887.00 3.04
0
2004-05 450113780.0 63595245.00 82757950.00 73176598.00 6.15
0
2005-06 565497049.0 82757950.00 119556184.00 101157067.00 5.59
0
2006-07 698118386.0 119556184.00 137316339.00 128436262.00 5.44
0
Interpretation:
In the year 2002-03 the debtor turnover ratio was 14.00. But in the next year ratio was
decreased to 3.04. In the year 2004-05 the ratio was increased to 6.15. In the year 2005-06 the
ratio is decreased to 5.59. In the last year also decreased to 5.44.
3. Working Capital Turnover Ratio
Table showing the Working Capital Turnover Ratio of NCL Allteck & Seccolor ltd
during the period 2002-03 to 2006-07.
S.no Year Sales Working Capital Working Capital

Turnover Ratio
1 2002-03 416541068.00 309624455.00 13.45
2 2003-04 181652413.00 32971217.00 5.51
3 2004-05 450113780.00 82065502.00 5.48
4 2005-06 565497049.00 108839390.00 5.19
5 2006-07 698118386.00 185157796.00 3.77
Interpretation:
This ratio indicates the velocity of utilization of net working capital. The main purpose of
computing this ratio is to find out to what extent the working capital is rotated in the business
with in a period of one year.
The above graph shows the fact that the working capital ratio of Allteck & Seccolor ltd in
the year 2002-03 is 13.45. In the year 2003-04 to 2006-07 the ratio is decreased.
4. Average Collection Period
Table showing the Average Collection Period of NCL Allteck & Seccolor ltd during the
period 2002-03 to 2006-07.
S.no Year No.of.days Debtors Avg Collection

in a year Turnover Period
Ratio
1 2002-03 365 14.00 26.07
2 2003-04 365 3.04 120.07
3 2004-05 365 6.15 59.35
4 2005-06 365 5.59 65.30
5 2006-07 365 5.44 67.10
Interpretation:
The above graph shows the fact that the Avg debt collection period of Allteck & Seccolor
ltd in the year 2002-03 is 26.07. In the year 2003-04 Avg debt collection period was increased to
120.07 but the next year was decreased to 59.35. In the year 2005-06 was increased to 65.35. In
the last year was increased to 67.10.
5. Current Assets Turnover Ratio
Table showing the Current Assets Turnover Ratio of NCL Allteck & Seccolor ltd during
the period 2002-03 to 2006-07.
S.no Year Sales Current Assets Current Assets

Turnover Ratio
1 2002-03 416541068.00 108293752.00 3.85
2 2003-04 181652413.00 102472904.00 1.77
3 2004-05 147435062.00 147435062.00 3.05
4 2005-06 206208408.00 206208408.00 2.74
5 2006-07 287442799.00 287442799.00 2.43
Interpretation:
The above graph shows the fact that the current assets turnover ratio of Allteck and
Seccolor ltd in the year 2002-2003 is 3.85. But in the year 2003-204 the ratio is increased to
1.77. The next year the ratio increased to 3.05. In the year 2005-206 the ratio is decreased to 2.74
and in the last year 2006-2007 the ratio decreased to 2.43.
Trend Values
Inventory Trend Values
Table showing S.no Year Inventory Trend

the Trend in inventory (Rs)
of NCL Allteck & 1 2002-03 31088050.00 100.00
2 2003-04 26788981.00 86.17
Seccolor ltd during
3 2004-05 44104644.00 164.64
the period 2002-03 to
4 2005-06 50916919.00 115.45
2006-07. 5 2006-07 66380122.00 130.37
Interpretation
The first year 2002-03 is taken as base year and its trend value is denoted as 100 the next
year 203-04 the inventory trend value is deceased to 86.17 because the inventory was come
down. In the year 2004-05 the inventory trend value is increased to 164.64 because of increase in
inventory. In the year 205-06 it is decreased to 115.45 because the inventory was come down and
in the final last year 206-07 it is increased to 130.37 because there is enormous increase in
inventory. Over all the inventory of NCL Allteck & seccolor ltd is increased to 6.63 cross from
3.10 crores during the period 2002-03 to 2006-07.
Inventory to Current Assets:
Table showing the Trends in inventory of NCL Allteck & Seccolor ltd during the period
2002-03 to 2006-07.
S.no Year Inventory Current Assets Percentage

(Rs)
1 2002-03 31088050.00 108293752.00 28.71
2 2003-04 26788981.00 102472904.00 26.14
3 2004-05 44104644.00 147435062.00 29.91
4 2005-06 50916919.00 206208408.00 24.69
5 2006-07 66380122.00 287442799.00 23.09
Interpretation:
The percentage of inventory to current assets in the year 2002-03 is 28.71 it was
decreased to 26.14 in the year 2003-04. It was increased to 29.91 in the year 2004-05 the
percentage of inventory to current assets is decreased to 24.69. In the year 2005-06 and it is also
decreased to 23.09 in the year 2006-07. It shows inventory increased up to 2004-05, later on that
it was decreased therefore the inventory is decreased to year by year.
Cash & Bank balance Trend Values
Table showing the Trends in cash & bank balance of NCL Allteck & Seccolor ltd during
the period 2002-03 to 2006-07.
S.no Year Cash & Bank Trend

1 2002-03 3364221.00 100.00
2 2003-04 4091844.00 121.63
3 2004-05 4011158.00 98.03
4 2005-06 8882419.00 221.14
5 2006-07 2872634.00 32.34
Interpretation:
The year 2002-03 is base year and its trend value is 100. In the year 2003-04 it is
increased to 121.63 but in the next year 2004-05 it is decreased to 98.03. In the year 2005-06 it is
increased to 221.14, it shows an increase in Cash & Bank balance to 88.82 lakhs from the 40.11
lakhs, but in the year 2006-07. There was a drastic decrease in Cash & Bank balances to 28.72
lakhs.
Cash & Bank to Current Assets
Table showing the Trends in cash & bank to Current Assets of NCL Allteck & Seccolor
ltd during the period 2002-03 to 2006-07.
S.no Year Cash & Bank Current Assets Percentage

1 2002-03 3364221.00 108293752.00 3.11
2 2003-04 4091844.00 102472904.00 3.99
3 2004-05 4011158.00 147435062.00 2.72
4 2005-06 8882419.00 206208408.00 4.31
5 2006-07 2872634.00 287442799.00 0.99
Interpretation
In the year 2002-03 the ratio is 3.11. It has increased to 3.99 in the year 2003-04. It has
decreased to 2.72 in the year 2004-05. In the year 2005-06 the ratio is increased to 4.31, but in
the year 2006-07 the ratio is decreased to 0.99.
Debtors Trend Values
Table showing the Trend values in debtors of NCL Allteck & Seccolor ltd during the
period 2002-03 to 2006-07.
S.no Year Debtors Trend

1 2002-03 55726928.00 100.00
2 2003-04 63595245.00 114.12
3 2004-05 82757950.00 130.13
4 2005-06 119556184.00 144.46
5 2006-07 137316339.00 114.86
Interpretation
The above graph shows the fact that the trends in debtors. In the year 2003-04 the trend
value in debtors increased to 114.12 and it was increased to 130.13 in the year 2004-05. In the
year 2005-06 it was increased to 144.46 but in the last year 2006-07 the trend value is decreased
to 114.86.
Debtors to Current Assets
Table showing the Proportion of Debtor to Current Assets of NCL Allteck & Seccolor ltd
S.no Year Debtors Current Assets Percentage
1 2002-03 55726928.00 108293752.00 51.46

2 2003-04 63595245.00 102472904.00 62.06
3 2004-05 82757950.00 147435062.00 56.13
4 2005-06 119556184.00 206208408.00 57.95
5 2006-07 137316339.00 287442799.00 47.77
Interpretation
In the year 2002-03 it was 51.46 in the year 2003-04 it was increased to 62.06 because of
there was an increase in debtors. In the year 2004-05 it was decreased to 56.13 because of there
was decrease of debtors. It was in the year 2005-06 it was increased to 57.98. In the year 2006-
07, it was decreased to 47.77 percentage increase of there was increase in the current assets is
more than the debtor increase.
Loans & Advances Trend Values
Table showing the Trend value in loans & advances of NCL Allteck & Seccolor ltd
S.no Year Loans & Trend
Advances
1 2002-03 18114553.00 100.00
2 2003-04 7996834.00 44.15
3 2004-05 16561310.00 207.09
4 2005-06 26852886.00 162.14
5 2006-07 80873704.00 301.17
Interpretation
In the year 2003-04 it decreased to 44.15. I t was increased to 207.09 in the year 2004-05,
because of the Loans & Advances are increased to 1.65 crores from 79.96 lakhs. But in the year
2005-06 it was decreased to 162.14 because there was a decreased in Loans & Advances. In the
last year the trend value is increased to 301.17 because Loans & Advances were increased to
8.08 crores from 2.68 crores overall loans & advances are continuously increased during the
period 2003 to 2007.
Loans & Advances to Current Assets

Table showing the Trend value in loans & advances to Current Assets of NCL Allteck &
Seccolor ltd during the period 2002-03 to 2006-07.
S.no Year Loans & Current Assets Percentage

Advances
1 2002-03 18114553.00 108293752.00 16.73
2 2003-04 7996834.00 102472904.00 7.80
3 2004-05 16561310.00 147435062.00 11.23
4 2005-06 26852886.00 206208408.00 13.02
5 2006-07 80873704.00 287442799.00 28.14
Interpretation
In the year 2002-03 the proportion is 16.73. It was decreased to 7.80 in the year 2003-04.
In the year 2004-05 the percentage is increased to 11.23 and in the year 2005-06 is increased to
13.02. In the year 2006-07 the proportion of the loans & advances to current assets increased to
28.14 because of although there was an increased in loans & advances, the increased in current
assets is more than that.
Provisions to Current Liabilities
Table showing the proportion of provision to current liabilities of NCL Allteck &
Current Liabilities
S.no Year Provisions Percentage
(Rs)
1 2002-03 10863958.00 77331297.00 14.05
2 2003-04 10666259.00 69501687.00 15.35
3 2004-05 13932640.00 65369560.00 21.31
4 2005-06 25062032.00 97369018.00 25.74
5 2006-07 24231720.00 102285003.00 23.70
Interpretation
In the year 2002-03 the proportion of provisions to current liabilities is 14.05. In the year
2003-04 it was increased to 15.35. In the year 2004-05 it was increased to 21.31 and in the year
2005-06 it was increased to 25.74 because of provisions are increased to 2.50 crores from 1.39
crores. In the year 2006-07 it was decreased to 23.70.
Growth Rate of Gross Working Capital
Table showing that the Growth rate of Gross Working Capital of NCL Allteck &
Gross Working Growth

S.no Year Capital Rate
1 2002-03 108293752.00 100.00
2 2003-04 102472904.00 94.62
3 2004-05 147435062.00 143.88
4 2005-06 206208408.00 139.86
5 2006-07 287442799.00 139.39
Interpretation
In the year 2003-04 the growth of gross working capital decreased to 94.62. It was
increased to 143.88 in the year 2004-05. The growth of gross working capital was decreased to
139.86 in the year 2005-06. In the year 2006-07 the growth rate of gross working capital is
decreased to 139.39 overall the growth rate of gross working capital is satisfactory.
The Trend in Net Working Capital
Table showing the Trend in net working capital of NCL Allteck & Seccolor ltd during the
period 2002-03 to 2006-07.
S.no Year Networking Percentage

Capital
1 2002-03 30962455.00 100.00
2 2003-04 32971217.00 106.49
3 2004-05 82065502.00 248.90
4 2005-06 108839390.00 132.63
5 2006-07 185157796.00 170.12
Interpretation
The trend value is increased to 106.49 in the year 2003-04 and it is increased to 248.90 in
the year 2004-05, but in the year 2005-06 the trend value is decreased to 132.63. In the last year
2006-07 it was increased to 170.12
SUMMARY
AND
CONCLUSIONS
Findings & Conclusions

1. It is found that current ratio of NCL Allteck & Seccolor ltd is 1.40 in the year
2002-03. There is increase in current assets resulting increase in current ratio up to 2006-
07. In the year 2006-07 the current ratio is increased to 2.81.
2. This company maintains good liquidity. In the year 2002-03 to 2006-07 the quick
ratio is increased from 0.99 to 2.16.
3. It is found that the cash ratio is 0.04 in the year 2002-03, it has increased to 0.06,
0.06 and 0.09 in the year 2003-04, 2004-05 and 2005-06. But in the year 2006-07 it was
decreased because there was decrease in cash balances.
4. It is found that inventory turnover is 22.58 times in the year 2002-03. It came
down to 11.08 in the next year and in the year 2004-05 the ratio increased to 22.49. In the
year 2005-06 it has come down to 20.59. The last year the ratio is increased to 21.03 in the
year 2006-07.
5. It is found that Debtor turnover as is 14.00 times in the year 2002-03. In the year
2003-04 the Debt turnover ratio is come down to 3.04. This is because of fall in the sales
volume. In the year 2004-05 the ratio is increased to 6.15. But in the year 2005-06 to
2006-07 it has decreased to 5.59 and 5.44.
6. It is found that the collection period in the year 2002-03 is 26 days. It has
increased to 120 days in the year 2003-04. It has decreased to 59 days in the year 2005-06.
It was increase to 65 days and it was also increase 67 days. The average collection period
is increase the whole company collection period.
7. It is found the net working capital in the year 2002-03 is 30962455. In the next
year onwards the net working capital is increased. Working capital turnover ratio defines
company should maintain good control.
8. It is found that the ratio of sales to current assets in the year 2002-03 is 3.85. The
next year 2003-04 the ratio is decreased to 1.77 because in the year 2002-03 the balance
sheet is calculated 18 months and in the next year 2003-04 the balance sheet calculated 6
months. So, the sales are decreased. In the next year 2004-05 the ratio increased to 3.05
because of sales are decrease.
9. We can find that proportion of inventory in total current assets in the
first year 2002-03 is 28.71% and it is 26.14% in 2003-04. It is increased
to 29.91 in the year 2004-05. It came down to 24.69% in the year 2005-
06. It is also come down to 23.09% in the year 2006-07.
10. We can find that the proportion of debtors in the total current assets are
51%, 62%, 56%, 57% and 47% in the years 2002-03, 2003-04, 2004-05,
2005-06 and 2006-07 respectively.
11. We are find that the proportions of provisions in the total current
liabilities in the year 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07
were 14.05%, 15.35%, 21.31%, 25.74% and 23.70% respectively. It
means the proportions of provision are increased continuously.
12. It is found that there is an increase trend in inventory of NCL Allteck &
Seccolor ltd. The trend values of inventory fluctuate between 100 to
130.37 during the period of 2002-03 to 2006-07.
13. It is found that cash & bank balance has decreasing trend because of
lower level of cash held by the company.
14. It is found that Debtors have an increasing trend value because of

increased credit sales of customer.
15. It is found that the gross working capital has an increased trend because
of the investment of funds increase in current assets.
16. It is found that the working capital trend values is increased trend value
in the year 100 to 24.90% in the year 2002-03 to 2004-05 and it has been
decreased to 132.63% in the year 2005-06. The last year 2006-07 the
trend value increased to 170.12.
Suggestions
1. The current ratio of firm is fluctuated between 1.40 to 2.81 during the period 2002-03 to
2006-07. It is desirable. The desirable current ratio is 2:1. The current ratio is good in the
firm.
2. The quick ratio position is good, between 0.99 to 2.16 during the period 2002-03 to 2006-
07. The adequate quick ratio is 1:1. In case of NCL Allteck & Seccolor ltd is sufficient. It
is desirable to maintain same ratio.
3. The debtor’s turnover ratio is fluctuated between 14.00 to 5.44 during the period 2002-03
to 2006-07. Then ratio in the year 2002-03 is 14.00 times showing effective management
of credit. It is desirable to maintain same ratio.
4. There is an increasing trend in inventory it is desirable to maintain the same level of

inventory.
5. The inventory turnover fluctuates between 22.58 to 21.03 during the period 2002-03 to
2006-07. In the year 2002-03 it is 22.58 so, it is advisable to maintain higher inventory
turnover which indicated the efficiency of the firm in seeing its products.
ANNEXURE
ANNEXURE
BALANCE SHEET AS AT 30th SEPTEMBER-2003
SCHEDULE As at As at
30-09-03 31.03.02
I. SOURCES OF FUNDS
1. SHAREHOLDERS FUNDS
a) Share capital A 24876260 8000000
b) Reserves & Surplus B 27683365 6790145
2. LOAN FUNDS
a) Secured loans C 10139562 6846456
b) Unsecured Loans D 69871820 4674000
TOTAL 132571007 26310601
II. APPLICATION OF FUNDS
1. FIXED ASSETS E
a) Gross Block 15362774 2457029
b) Less: Depreciation
3 2
72448140 9309015
c) Net Block 81179603 15261277
2. INVESTMENTS F 354000 4000
19200849 --
3. DEFERRED TAX ASSETS G
4. CURRENT ASSETS, LOANS H
& ADVANCES
a) Inventories 31088050 3196159
b) Sundry Debtors 55726928 3778297
c) Cash & Bank 3364221 178534
18114553 1149578
d) Loans & Advances 3
LESS: CURRENT LIABILITIE I 10829375 1864877
2 3
& PROVISIONS
a) Current liabilities
b) Provisions
66467339 3002469
NET CURRENT ASSETS 30962455 9403224
10863958 6243080
5. MISC.EXPENDITURE J 874100 1642100
(to the extent not written off)
TOTAL
132571007 26310601
BALANCE SHEET AS AT 31st MARCH-2004
SCHEDULE AS AT As at
31.03.2004 30.09.03
I. SOURCES OF FUNDS
a) Share capital A 24876260 24876260
2. LOAN FUNDS
TOTAL
131528514 132571007
1. FIXED ASSETS E
a) Gross Block
15739266 15362774
b) Less: Depreciation 4 3
c) Net Block 80408140 72448140
2. INVESTMENTS F 76984524 81179603
5427750 354000
3. DEFERRED TAX ASSETS G 15526923 19200849
& ADVANCES
a) Inventories
63595245 55726928
c) Cash & Bank
4091844 3364221
d) Loans & Advances 7996834 18114553
LESS: CURRENT LIABILITIE I 10247290 10829375
4 2
& PROVISIONS
b) Provisions
58835428 66467339
5. MISC.EXPENDITURE J 32971217 30962455
618100 874100
(to the extent not written off)
TOTAL
131528514 132571007
SCHEDULE AS AT AS AT
31.03.2005 31.03.2004
I. SOURCES OF FUNDS
a) Share capital A 24876260 24876260
2. LOAN FUNDS
10813265 --
3. DEFFERENT TAX LIABILITY(net) G
173469418 131528514
TOTAL
1. FIXED ASSETS E
16450824 15739266
a) Gross Block
4 4
c) Net Block 76664156 76984524
14633660 5427750
2. INVESTMENTS F
& ADVANCES
a) Inventories
82757950 63595245
c) Cash & Bank
4011158 4091844
d) Loans & Advances 16561310 7996834
4. LESS: CURRENT LIABILITIE I 14743506 10247290
2 4
& PROVISIONS
b) Provisions
51436920 58835428
NET CURRENT ASSETS 13932640 82065502 10666259 32971217
5. DEFERRED TAX ASSETS G -- 15526923
106100 618100
6. MISC.EXPENDITURE J
(to the extent not written off or adjusted)
TOTAL
173469418 131528514

31.03.2006 31.03.2005
I. SOURCES OF FUNDS
a) Share capital A 24876260 24876260
2. LOAN FUNDS
a) Secured loans C 59078900 47952814
17347887 10813265
218788373 173469418
TOTAL
1. FIXED ASSETS E
18436020 16450824
a) Gross Block
3 4
c) Net Block 88315323 76664156
21633660 14633660
2. INVESTMENTS F
& ADVANCES
a) Inventories
11955618 82757950
c) Cash & Bank
4 4011158
d) Loans & Advances 8882419 16561310
4. LESS: CURRENT LIABILITIE I 26852886
20620840 14743506
& PROVISIONS
8 2
b) Provisions
NET CURRENT ASSETS 72306986 108839390 51436920 82065502
5. MISC.EXPENDITURE J 25062032 -- 13932640 106100
TOTAL
218788373 173469418
31.03.2007 31.03.2006
I. SOURCES OF FUNDS
a) Share capital A 24876260 24876260
2. LOAN FUNDS
a) Secured loans C 136259748 59078900
12228070 17347887
329759934 218788373
TOTAL
1. FIXED ASSETS E
21924686 18436020
a) Gross Block
9 3
c) Net Block 9 114843610 88315323
29758528 21633660
2. INVESTMENTS F
& ADVANCES
a) Inventories
b) Sundry Debtors
66380122 50916919
c) Cash & Bank
13731633 11955618
d) Loans & Advances 9 4
4. LESS: CURRENT LIABILITIE I 2872634 8882419
80873704 26852886
& PROVISIONS
28744279 20620840
a) Current liabilities 9 8
b) Provisions
5. MISC.EXPENDITURE J 78053283 -- 72306986 --
24231720 25062032
TOTAL
329759934 218788373
BIBLOGRAPHY
BIBLOGRAPHY
II. BOOKS:
a. Financial Management --- I.M. PANDEY
b. Financial Management --- PRASANA CHANDRA
c. Financial Management --- M.Y. KHAN & P.K. JAIN
III. NEWSPAPERS:
a. Business Line
b. The Hindu
IV. JOURNALS:
a. Business World
b. Business India (The Magazine of the corporate World)
IV. WEBSITES:
a. www.ncl.com

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INTRODUCTION

OBJECTIVES OF THE STUDY

Working capital management is concerned with the problems that arise in

 To the study the existing system of working capital management.

Working capital can be depicted through this figure.

SCOPE AND PERIOD OF STUDY

 The duration of the project is two months.

FINDINGS: The present study is based on a sample of 20 large cement companies

Specification for Secco Orient (ECO-3000 Series)

WORKING CAPITAL MANAGEMENT

Though working capital is of vital significance to an undertaking in several ways, the

MEANING OF WORKING CAPITAL:

Concepts of Working Capital:

Gross Working Capital:

Net Working Capital:

Operating Cycle and Need for Working capital

Purchase of Raw Material Issue of material to production

Account Receivables Finished Goods

Operating cycle for Non-Manufacturing Firm

Stock of Finished Goods

Both kinds of working capital-permanent and temporary are necessary to facilitate

Draw backs of excessive working capital

1. It results in unnecessary accumulation of inventory. Thus, chances of inventory

Need for Holding Inventory:

2. Continuous supply to market:

5. High Margin of price vise:

6. Advantage of Price vise:

INVENTORY MANAGEMENT TECHNIQUES:

The essence of inventory management is to maximize profits with minimum investment

Formula for E.O.Q = 2AOc

Oc = Ordering Cost per Order

Cs = Carrying Cost per Unit per Year.

• High Value (A)

4 Safety Stock: It is the number of units to be maintained as cushion against delay in

Management of accounts Receivables:

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as “the

Significance of Ratio Analysis

A conventional rule, a current Ratio of arbitrary standard of 2 to 1 should not be

a) Debt equity ratio

1. Inventory Turnover ratio

WORKING CAPITAL TURNOVER RATIO

DEBTORS TURNOVER RATIO

AVERAGE COLLECTIO PERIOD

CURRENT ASSETS TURNOVER RATIO

FIXED ASSETS TURNOVER RATIO

The financial statements can be analyzed by computing trends of series of information.

Gross Working Capital in NCL Allteck & Seccolors ltd

S.no Year Gross Working Capital in Rs

S.no Year Current Assets Current Liabilities Net Working

Statement showing changes in Working Capital:

2002-03 2003-04 Increase Decrease

Current Assets, Loans &

Investors 31088050.00 26788981.00 4299069.00

Sundry Debtors 55726928.00 63595245.00 7868317.00

Cash & Bank balances 3364221.00 4091844.00 727623.00

Loans & Advances 18114553.00 7996834.00 10117719.00

Total Current Assets (A) 108293752.00 102472904.00

Current Liabilities &

Current Liabilities 66467339.00 58835428.00 7631911.00

Provisions 10863958.00 10666259.00 197699.00

Total Current Liabilities (B) 77331297.00 69501687.00

Net working capital (A-B) 30962455.00 32971217.00 2008762.00