WORKING CAPITAL MANAGEMENT OF BAHETY CHEMICALS & MINERALS PVT. LTD., DANDELI. INDEX TABLE sibacgamete.cf CONTENTS PAGE NO. 1 PART – I 2 . report on “working capital management in hcl infosystems limited” by (submitted in partial fulfillment of the requirements of mba program at icfai business. This project has been done on a Working Capital Management in Bharti Airtel. Services Ltd. It was complicated but exiting as well to do a project on a company.
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Please this pdf send me [email protected] A project report submitted to Jawaharlal Nehru university Kakinada in; 7. declare that the project report entitled “WORKING CAPITAL MANAGEMENT” have been. Project Report on "Working Capital Management" Absolutely FREE ◇◇◇ http: //sibacgamete.cf 1 week ago Reply. Are you sure. The title of the report is “Working Capital Management and Its This project paper starts with the objective of the study and the methodology. http://www. sibacgamete.cf [Accessed 2.
Provision for taxation , if it does not amt. Of profit. Bills payable. Sundry creditors. The gross working capital concept is financial or going concern concept whereas net working capital is an accounting concept of working capital. Both the concepts have their own merits.
The gross concept is sometimes preferred to the concept of working capital for the following reasons: 1.???? It enables the enterprise to provide correct amount of working capital at correct time.
Every management is more interested in total current assets with which it has to operate then the source from where it is made available. It take into consideration of the fact every increase in the funds of the enterprise would increase its working capital. This concept is also useful in determining the rate of return on investments in working capital. IT indicates the margin of protection available to the short term creditors.
It is an indicator of the financial soundness of enterprises. It suggests the need of financing a part of working capital requirement out of the permanent sources of funds.
Working capital may be classified in to ways: o?????? On the basis of concept. On the basis of time.
On the basis of concept working capital can be classified as gross working capital and net working capital. Permanent or fixed working capital. Every firm has to maintain a minimum level of raw material, work- in-process, finished goods and cash balance. This minimum level of current assts is called permanent or fixed working capital as this part of working is permanently blocked in current assets. As the business grow the requirements of working capital also increases due to increase in current assets.
Variable working capital can further be classified as seasonal working capital and special working capital. The capital required to meet the seasonal need of the enterprise is called seasonal working capital. Special working capital is that part of working capital which is required to meet special exigencies such as launching of extensive marketing for conducting research, etc. Temporary working capital differs from permanent working capital in the sense that is required for short periods and cannot be permanently employed gainfully in the business.
And some special al is the amount of working capital which is required to meet the seasonal sets.
Goodwill: Sufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill. Easy loans: Adequate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms.
Cash Discounts: Adequate working capital also enables a concern to avail cash discounts on the downloads and hence reduces cost. Regular Supply of Raw Material: Sufficient working capital ensures regular supply of raw material and continuous production. Regular Payment Of Salaries, Wages And Other Day TO Day Commitments: It leads to the satisfaction of the employees and raises the morale of its employees, increases their efficiency, reduces wastage and costs and enhances production and profits.
Exploitation Of Favorable Market?? Conditions: If a firm is having adequate working capital then it can exploit the favorable market conditions such as downloading its requirements in bulk when the prices are lower and holdings its inventories for higher prices.
Ability To Face Crises: A concern can face the situation during the depression. Quick And Regular Return On Investments: Sufficient working capital enables a concern to pay quick and regular of dividends to its investors and gains confidence of the investors and can raise more funds in future.
High Morale: Adequate working capital brings an environment of securities, confidence, high morale which results in overall efficiency in a business.
Hence described earlier the following products are in the. Cash received form Debtors and paid to suppliers Of raw materials. Sales of finished Raw materials Goods introduced into process. Finished Goods Produced. On the basis of concept On the basis of time. Seasonal Working Capital. The main advantages of maintaining adequate amount of.
The amount required also. If raw material is readily. At time business needs to. The principle is concerned with. Given a choice, every business would. Cash budget basically incorporates estimates of. Total cash inflows Estimated cash outflows ……………………………..
Total cash outflows III. Opening cash balances IV. Minimum level of cash balance VII. Estimated excess or short fall of cash V-VI. Sundry Creditors A relatively higher ratio is an. Higher prepaid expenses related to advances given so as to pile up the.
An analysis of this ratio over a period reflects working. Working Capital project Uploaded by bhawna sonaikar. Flag for inappropriate content. Related titles. Jump to Page. Search inside document. Mukul Chinchalkar who have extended their sincere help in accomplishing my project. Current Assets include: Maintaining adequate working capital; is not just important in the short term. Sufficient liquidity must be maintained in order to ensure the survival of business in the long term as well.
Even a profitable business may fail if it does not have adequate cash flows to meet its liabilities as tyhey fall a due. Therefore when business make investment decisions they must not only consider the financial outlay involved with acquiring the new machine or the new building etc, but must also take account of the additional current assets that are usually involved with any expansion of activity.
Increased sales usually mean that the level of debtor will increase. Company Name: Plot No. P — Telephone: Mukul Chinchalkar. Under his experienced and motivating headship the company has been leading exporters of material handing equipments like stone crushers and industrial feeders.
The below mentioned feature of company have constantly help standardize among the most distinguish stone crushers supply in India. To ensure the quality of products, the company follow a standard quality control system and maintain strict vigil throughout the production process. The company has promptly inspect of the quality of raw materials used at our manufacturing unit. Further the finished products are again scrutinized by our quality control inspection to prevent any sub standard product to reach the hands of the customer.
In addition to it the company take pride to acquire with the fact that the company have not received any complaints from the customers. The company thrives on the mutual efforts of highly committed team of engineers technicians, quality, supervisors etc.
They have acquired sound knowledge and understanding of the industry and render their services accordingly. In addition to that the market is also spread in the countries such as Gulf, Middle East, and East Asia. And due to this, the company is an all industrial spare manufacture of the country. Name of CEO: Mukul Chinchalkar Establishment: Manufactures and Exporters Market Cover: The range has wide application area that includes fertilizers, food processing, automobiles, flow mills, distillates and many more fields.
Hence described earlier the following products are in the usual manufacturing range: Rollers for belt Conveyors 2. Rollers for Roller conveyors 3. Pulleys for Belt Conveyors In general the rollers are of variety of lengths for different applications.
According to the width of conveyors belts and the roller conveyors applications these are normally of following divators and lengths.
The below mentioned table is a brief description. These are some rollers which are either of rubber lugging or with the rubber rings. Capital required for a business can be classifies under two main categories: Long term funds are required to create production facilities through download of fixed assets such as plant and machinery, land and building, furniture etc.
Funds are also needed for short term purposes for the downloading of raw materials, payments of wages and other day to day expenses etc. These funds are known as working capital. There are two interpretation of working capital under the balance sheet concept: Thus, the gross working capital is the capital invested in total current assets of the enterprises.
Current assets are those assets which are converted into cash within short periods of normally one accounting year.
Example of current assets is: Constituents of Current Assets: Net working capital is the excess of current assets over current liabilities or say: When the current assets exceed the current liabilities, the working capital is positive and the negative working capital results when the current liabilities are more than the current assets. Current liabilities are those liabilities which are intended to be paid in the ordinary course of business within a short period of normally one accounting year of the current assets or the income of the business.
Examples of current liabilities are: Funds thus invested in current assets keep revolving fast and being constantly converted into cash and these cash flows out again in exchange for other current assets. Hence it is also known as revolving or circulating capital. The cycle starts with the download of raw material and other resources And ends with the realization of cash from the sales of finished goods.
It involves download of raw material and stores, its conversion into stocks of finished goods through work in progress with progressive increment of labor and service cost, conversion of finished stocks into sales, debtors and receivables and ultimately realization of cash and this cycle continuous again from cash to download of raw materials and so on. In that case, net operating cycle period can be calculated as below: Working capital may be classified in two ways: The classification is important from the point of view of the financial manager.
On the basis of time, working capital may be classified as: There is always a minimum level of current assets which is continuously required by the enterprises to carry out its normal business operations. Temporary or variable working capital is the amount of working capital which is required to meet the seasonal demands and some special exigencies.
Varibles working capital can be further classified as second working capital and special working capital. The capital required to meet the seasonal needs of the enterprises is called the seasonal working capital. Working capital is the life blood and nerve centre of a business. The main advantages of maintaining adequate amount of working capital are as follows: The need for working capital cannot be 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. There is an operating cycle involved in the sales and realization of cash.
The working capital requirements of a concern depend upon a large number of factors such as nature and size of the business, the characteristics of their operations, the length of production cycle , the rate of stock turnover and the state of economic situation.
However the following are the important factors generally influencing the working capital requirements. The nature and the working capital requirement of enterprises are interlinked. The amount required also varies as per the nature, an enterprises involved in production would required more working capital then a service sector enterprise.
Each enterprises in the manufacturing sector has its own production policy, some follow the policy of uniform production even if the demand varies from time to time and other may follow the principles of demand based production in which production is based on the demand during the particular phase of time.
Accordingly the working capital requirements vary for both of them.
The requirement of working capital fluctuates for seasonal business. If there is a high competition in the chosen project category then one shall need to offer sops like credit, immediate delivery of goods etc for which the working capital requirement will be high. Otherwise if there is no competition or less competition in the market then the working capital requirements will be low.
If raw material is readily available then one need not maintain a large stock of the same thereby reducing the working capital investment in the raw material stock. On other hand if raw material is not readily available then a large inventory stocks need to be maintained, there by calling for substantial investment in the same.
Growth and Expansions in the volume of business result in enhancement of the working capital requirements. As business growth and expands it needs a larger amount of the working capital. Normally the needs for increased working capital funds processed growth in business activities.
Generally raising price level require a higher investment in the working capital. With increasing prices, the same levels of current assets needs enhanced investments. The manufacturing cycle starts with the download of raw material and is completed with the production of finished goods. At time business needs to estimate the requirement of working capital in advance for proper control and management. The factors discussed above influence the quantum of working capital in the business.
The assessment of the working capital requirement is made keeping this factor in view. Each constituents of the working capital retains it form for a certain period and that holding period is determined by the factors discussed above. So for correct assessment of the working capital requirement the duration at various stages of the working capital cycle is estimated.
Thereafter proper value is assigned to the respective current assets, depending on its level of completion.
The basis for assigning value to each component is given below: The total of all such valuation becomes the total estimated working capital requirement. We know that working capital has a very close relationship with day-to-day operations of a business.
Negligence in proper assessment of the working capital, therefore, can affect the day-to-day operations severely. It may lead to cash crisis and ultimately to liquidation.
An inaccurate assessment of the working capital may cause either under-assessment or over-assessment of the working capital and both of them are dangerous. The following are the general principles of a sound working capital management policy: Risk here refers to the inability of a firm to meet its obligations as and when they become due for payment.
Larger investment in current Assets with less dependence on short term borrowings, increase liquidity, reduces risk and thereby decreases the opportunity for gain or loss. On the other hand less investments in current assets with greater dependence on short term borrowings, reduces liquidity and increase profitability.
In other words there is a definite inverse relationship between the degree of risk and profitability.
In other words, there is a definite inverse relationship between the risk and profitability. A conservative management prefers to minimize risk by maintaining a higher level of current assets or working capital while a liberal management assumes greater risk by reducing working capital.
However, the goal of management should be to establish a suitable trade off between profitability and risk. The various source of raising working capital finance have different cost of capital and the degree of risk involved.