Beruflich Dokumente
Kultur Dokumente
By
K. SAI SUDHAKAR
Student of SANKETIKA VIDYA PARISAD ENGINEERING
COLLEGE
Regd. No.115232902050
INTRODUCTION
Definition : Working capital management refers to a company's
managerial accounting strategy designed to monitor and utilize the two
components of working capital, Current assets and Current liabilities, to
ensure the most financially efficient operation of the company.
Funds required for short term purposes or for meeting day to day expenses
of business are called working capital.
iv. To analyze the overall liquidity position of Pearl Bottling Pvt. Ltd.
v. To identify the problem areas of organization and basing on which
necessary suggestions can be rendered.
NEED FOR THE STUDY
1. Management of funds, particularly working capital decides not only
liquidity and solvency but also operating efficiency of the organization.
2. Pearl Bottling (P) Ltd is a fastest growing liquid beverage company, so it
needs more working capital and its management has to keep the pace of
its financial growth.
3. Strengths of the organization in managing working capital of the
organization.
4. To review the elements of working capital and its importance in
operating activities in the organization.
SCOPE OF THE STUDY
•The study covers Working Capital Management of Pearl Bottling Pvt. Ltd. and its
importance to the company especially relating to inventory, debtors, and cash.
•The scope of this study is limited to the Visakhapatnam franchise of Pearl Bottling Pvt.
Ltd. Only.
•The figures relating to this study is extracted from the financial statement of the Pearl
Bottling company.
•The comparative statements are prepared based on the information given by the
financial department of the company.
RESEARCH METHODOLOGY
Primary Data:
The employees and manager of the financial
department have provided the information needed for
the study.
Secondary Data:
Data Gathered from the Balance sheets, Profit and
loss accounts, Annual reports and other Books and
Manuals of the PEARL BOTTLING PRIVATE
LIMITED.
LIMITATIONS OF THE STUDY
1. The project is only for 60 days
2. Restricted to financial department only
3. Analysis is done only for past 5 years
4. The study depends upon the information
given by company.
COMPONENTS OF WORKING CAPITAL
Current assets:
These are those assets which converts into cash within one year.
These includes
• Inventory
• Debtors
• Bills Receivables
• Cash and Bank balances
• Prepaid expenses
COMPONENTS OF WORKING CAPITAL
Current liabilities:
These are those liabilities which are to be paid within one year.
These includes
• Creditors
• Bills payable
• Bank overdraft
• Proposed dividend
• Provision for taxation
WORKING CAPITAL CYCLE
Raw material
Cash Work-in-
progress
sales
CALCULATION OF DURATION OF
OPERATING CYCLE
DURATION OF RAW MATERIAL STORAGE
+
DURATION OF WORK IN PROGRESS
+
DURATION OF FINISHED GOODS
+
DURATION OF RECEIVABLES FROM DEBTORS
-
DURATION OF CREDIT PERIOD ALLOWED BY THE
SUPPLIERS
O =R+W+F+D-C
TYPES OF WORKING CAPITAL
1.Syrup making
2.Water treatment
3.Bottling
4.Crating
ANALYSIS OF WORKING CAPITAL
There is a negative working capital trend in last 5 years.
The inventories are contributing more to the current assets.
The liquidity position of company is very weak.
The company is taking more loans from banks that causes higher current
liabilities than current assets.
The company has least negative working capital in F.Y. 2012-13 and the
company faced poor management of working capital in F.Y. 2015-16.
FINDINGS