Synopsis WORKING CAPITAL MANAGEMENT OF TAJ HOTEL

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MBA (FINANCE)

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WORKING CAPITAL MANAGEMENT OF TAJ HOTEL

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WORKING CAPITAL MANAGEMENT OF TAJ HOTEL

1. Title of the project. 2. Introduction to topic . 3. Review of Literature. 4. Objective of the Study. 5. Contribution from the study. 6. Research Methodology. 7.Limitations. 7. Chapterisaton. .

WORKING CAPITAL MANAGEMENT OF TAJ HOTEL

2.INTRODUCTION
The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and is recognised as one of Asia's largest and finest hotel company. Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. Taj Hotels Resort and Palaces comprises more than 60 hotels in 45 locations across India with an additional 15 international hotels in the Malaysia, United Kingdom, United States of America, Bhutan, Sri Lanka, Africa, the Middle East and Australia.Spanning the length and breadth of the country, gracing important industrial towns and cities, beaches, hill stations, historical and pilgrim centres and wildlife destinations, each Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities. Every business needs finance for two purposes- for its establishment & to carry day to day operations. Long-term funds are required to create production facilities through purchase of fixed assets such as plant & machinery, land & building, furniture etc. Funds are also needed for short term purposes- for purchase of raw materials, payment of wages & other day to day expenses etc. These funds are known as working capital. In simple words working capital refers to that part of firms capital which is required for financing short term or current assets such as cash, marketable securities, debtors & inventories etc. Funds, thus, invested in current assets keep revolving fast & are being constantly converted into cash & these cash flows out again in exchange for other current assets. Hence, it is known as revolving or circulating capital or short term capital.

Working capital may be classified into two ways firstly ,On the basis of concepts and Secondly ,On the basis of time.On the basis of concepts working capital is classified as Gross working capital & Net working capital. On the basis of time working capital is classified as permanent or fixed working capital & temporary or variable working capital.

3. REVIEW OF LITERATURE:

Every business needs funds for two purposes basically, they are for establishment and to carry day-to-day operations. Long term funds are required for establishment of the organization, it is required for production facility through purchase of fixed assets and it needs fixed capital and the funds which are needed for short term purposes for the purchase of raw materials, payment of wages, payment of day to day expenses etc, the funds required for these are known as WORKING CAPITAL.

Working capital refers to that part of the firm's capital which is required for financing short term or current assets such as cash, marketable securities, debtors and inventories. Funds, thus, invested in current assets keep revolving fast and are being constantly converted into cash and this cash flow out in exchange for other current assets. Hence it is also known as CIRCULATING CAPITAL or REVOLVING CAPITAL or SHORT TERM CAPITAL.

According to GENESTENBERG:"Circulating capital means current assets of a company that are changed in the ordinary course of business from one form to another, as for example, from cash to inventories, inventories to receivables into cash."

Need for working capital cannot be over emphasized. Every business needs some amount of working capital. The need of working capital arises due to the time gap between production and realization of cash from sales. Thus, the working capital is needed for the following purposes:a) For the purchase of raw materials, components and spares. b) To pay wages and salaries.

c) To incur day-to-day expenses and overhead costs such as fuel, power and office expenses etc. d) To met the selling costs as packing, advertising etc. e) To provide credit facility to customers. f) To maintain the inventories of raw material, work-in-progress, stores and spares and finished stock.

For studying the need of working capital in a business, one has to study the business under varying circumstances such as a new concern, as a going concern and as one which ha attained maturity.

4.OBJECTIVES OF THE RESEARCH

Following are the objectives which are being considered in my study:

i.To analyze the various components of working capital of Taj Hotels. ii.To study the financing of working capital of Taj Group of Hotels. iii.To study and analyse the operating cycle of Taj Group of Hotels.

5. CONTRIBUTION FROM THE STUDY

No business can run successfully without an adequate amount of working capital. Adequate working capital helps in maintaining solvency of business by providing uninterrupted flow of production. Sufficient working capital enables a Hotel concern to make prompt payments & hence helps in creating & maintaining goodwill. A Hotel having adequate working capital, high solvency & good credit standing can arrange loans form banks & others on easy and favorable terms. Adequate working capital also enables a concern to avail cash discounts on the purchase and hence reduce costs. sufficient working capital ensures regular supply of raw materials & continuous production. A Hotel which has ample working capital can make regular payment of salaries, wages & other day-to-day commitments which raises the morale of its employees, increases their efficiency, reduces wastage & costs and enhances production & profits.Only concerns with adequate working capital can exploit favourable conditions such as purchasing its requirements in bulk when the prices are lower & by holding its inventories for higher prices. Adequate working capital enables a Hotel to face business crisis in emergencies such as depression because during such periods, generally, there is much pressure on working capital. Every investor wants a quick and regular return on his investments. Sufficiency of working capital enables a concern to pay quick and regular dividends to its investors, a there may not be much pressure to plough back profits. This gains the confidence of its investors & creates a favourable market to raise additional funds in the future.

6. RESEARCH METHODOLOGY:
The research design is a pattern or an outline of research project working. It is a statement of only essential elements of study, those that provide basic guidelines for the details of the project. The present study is being conducted followed by Descriptive Research Design. Data Collection: Primary as well as secondary data is used for the project. The research vehicle for primary data collection is unstructured interview with the managers to get information regarding all variables for working capital management. Secondary data is collected from Annual Report, relevant files & records of Taj Group of hotels. Analysis of Data: The information gathered are the policies & practices regarding management of the working capital. Analysis is done in terms of theoretical concepts. Analysis of working capital performance is done with the help of percentages by showing graphs, ratios etc.

7.LIMITATIONS: Even though every effort will be taken to minimize the variation and present a factual picture with the help of statistical methods, but still there are some limitations, which are as follows:

The preparation and interpretation of data may not be 100% free from errors and may be affected by the Respondents biased mindset to some extent. Sampling size of the targeted employees of Taj Hotels is small, because non-reachable due to there busy schedule.

 The study will be based on the balance sheet of the company and depends directly on balance sheet and annual reports of the company.

8. Chapterisation:
Detailed/final project report will include the following chapters; Introduction: Objective and scope of study: Methodology: (Details of methodology used in studying and collecting the data and issue will be described): Descriptive work: Descriptive work on the topic, this chapter will include analysis and interpretation of data tabulation and categorization; Study report: Study report of other researcher will be observed and analyzed. Chapter V Chapter IV Chapter I Chapter II Chapter III

Conclusion: Limitation Recommendation: Bibliography:

Chapter VI Chapter VII Chapter VIII Chapter IX

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Appendix-1

Chapter X

(Questionnaire has been prepared for conducting study will be attached and others which has not mentioned in the above, will be included if required)

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