Beruflich Dokumente
Kultur Dokumente
Submitted To:
Prof.Arthi
Group # 3
Rakesh Soni Suvrat Sajjan Ravi Jhawar Manan Zaveri Deepali Kunjeer Ramchand 062 069 080 085 113 120
producer. A balanced global presence in over 50 markets and manufacturing operations in 26 countries. One of the worlds lowest cost producers of steel. A shareholder base of over 800 k people. An employee strength over 81k across 5 continents.
Working Capital
Firms need money to pay for their day to day activities. The funds available to do this, is known as the firms
working capital. Managing the working capital needs of the organization is important, because shortage of funds could disrupt the day to day operations But holding excess funds the interest burden of the firm starts mounting & eating into its profits.
Working Capital
There are two concepts of Working Capital Gross working capital: Gross working capital is the sum total of all the current assets. Net working capital: Net working capital is the difference between current assets and current liabilities. Current Assets Bank or cash balances Current Liabilities Outstanding expenses
Marketable securities
Debtors Inventory
By collecting money from debtors quicker By reducing inventory levels relative to sales
Debtors Management
Credit worthiness 1. Ability to pay 2. Willingness to pay
Gross Realization Excise Freight = Net Realization We deduct Sales Commission Handling Charges Cost of Rejection Cost of Credit Establishment cost of Marketing Division Inventory carrying costs = Net of Net Realization Net of Net Realization Cost of production = Net Profitability of the customer
CREDIT MANAGEMENT MODULE (BASED ON LOTUS NOTES) This module is very exhaustive It begins by capturing the essential information relating to sales like : Products to be purchased by the customer Tonnage on cash Tonnage on credit Invoice price (Rs. / MT) Credit period (Days) Proposed credit (Rs. Lacs) Total tonnage Future expected Monthly lifting potential (MT)
In such cases the accounts status of the customer as on the date when credit sales is being made are also entered into Lotus Notes. These includes the amounts of outstanding and overdue as on a particular date, Cheque payment history, existing credit limit, interest free credit period, Guarantee provided, level of secured and unsecured credit.
Process
ZERO SCORE FORMULA
Z = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E Where Z = score A = Working capital / Total Assets B = Retained earnings / Total Assets C = Earnings before interest & tax / Total Assets D = Market Value of Equity / Total Liabilities E = Sales / Total Assets
Debtors control
Letter of credit
Interest collection
Tata Steel charges an interest to its customers if the payment
made is late after the due date. The details on interest payment are mentioned at the time of credit sales in the Sales Order or the MOU. However, these need to be accepted by the customer. All the transactions are recorded in the SAP system which acts as a database and which is kept updated. When the credit sales are made, all information like invoice date, interest free credit period, money receipt date, etc. are all recorded in SAP with respect to separate transaction. Thus, SAP automatically calculates the interest that has to be charged to each customer for every delay in payment.
the operational activities are State Bank of India and the Central Bank of India.
3.5 3 2.5 2 1.5 1 0.5 0 Over-Draft scenario on monthly basis
10
11
FY 09
9.36 41.29 74.12 27.88
FY 09
5707.05
FY 08
3,613.70
FY 07
10,646.16
Current Asset (in Cr) Current Liabilities (in Cr) Net Working Capital (in Cr)
6747.01
6653.09
6039.86
3,855.26
3,523.20
93.92
-332.81
-241.56
7122.96
FY 10
25755.52
FY 09
25945.45
-332.81 -77.96
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