The document is a presentation on working capital management at Wahid Sandhar Sugars Ltd. It includes an introduction to the company, objectives of studying its working capital, research methodology used, data analysis and interpretation of key working capital ratios and cycles. The analysis found the company's operating cycle is 83 days, with raw material storage at 49 days and debtors collection at 43 days. Suggestions include reviewing stock control to reduce raw material levels and ensuring creditors are paid within terms to maintain good supplier relationships.

1. SUBMITTED BY
KURRA RANGA NAIK
11502076
SECTION Q1529
ROLL NO A21
Company: WAHID SANDHAR SUAGR Mill LTD
Presentation on Summer Training
“WORKING CAPITAL MANAGEMENT IN
WAHID SANDHAR SUGARS LTD”

2. CONTENTS
 INTRODUCATION COMPANY
 OBJECTIVES OF THE STUDY
 RESEARCH METHODOLOGY
 DATAANALYSIS/INTERPRETATION
 SUGGECTIONS
 CONCLUSION

3. WAHID SANDHAR SUGAR LTD.
 The Sugar Plant originally established in 1933 by Narang Group of Industries
 which was later on taken over by Oswal Group in 1989.
 The Plant was later on taken over by Wahid and Sandhar Group in the year 2000
 Main Activities of Company
The Company is mainly engaged in the business of manufacturing and sale of Sugar. At
present the capacity of the Plant is 5500 M.T. for crushing of sugar cane at Phagwara
Sugarcane being the seasonal crop available only for 5 to 6 months.

4. List of Directors
S. Soukhbir Singh Sandhar S. S. Jaswinder Singh Bains s.s jarnail singh wahid s.s . sandeep singh
( chairman) (Vice-Chairman) ( Managing Director ) ( Director )

5. OBJECTIVES OF THE STUDY
To understand Planning and Management of Working Capital at Wahid Sandhar Sugar
Ltd
To measure the financial soundness of the company by analyzing various ratios.
To determine the gross and net operating cycle of the unit
To know the future need of working capital in the running organization.
To suggest ways for better management and control of working capital at Wahid Sandhar
Sugar Ltd

6. RESEARCH METHODOLOGY
Method of Data
 Primary Data as well as Secondary Data
Tools Used
 Gross operating cycle and net operating cycle
 Analysis through working capital ratios

7. Working capital management
Working capital refers to that part of total capital which is used for carrying out
the routine or regular business operations. In other words, it is the amount of funds
used for financing the day-to-day operations
Working capital may be regarded as life blood of a business. Its effective
provision can do much to ensure the success of a business while its inefficient
management can lead not only to loss of profits but also to the ultimate downfall of
the organization

8. CLASSIFICATION OF WORKING CAPITAL

9. Data Analysis
Particulars Year 2016
Rs in ‘000
Sales
Cost of production
Purchases
Average raw material stock
Average Working in progress
Average finished goods stock
Average creditors
Average debtors
3000
2100
600
80
85
180
90
350

10. Data Analysis
1. Raw material = Average raw material / Total raw material *365
= 80/600*365
=49 days
2. Working in progress = Working in progress / total cost of production
85/2100*365
=15 days
3. Finished goods = Average stock /total cost of production *365
=180/2100 *365
=31 days

11. Data Analysis
4. Debtors = Average debtors / total creditors sales *365
= 350/3000 *365
=43 days
5. Creditors = Average creditors / total purchase *365
=90/600 *365
=55 days
Net operating cycles = 49+15+31+43-55
= 138 days – 55 days = 83 days

12. OPERATING CYCLE :
0
10
20
30
40
50
60
Raw material
storage period
WIP Storage
Period
Finished Good
Storage Period
Debtor collection
period
Gross net working capital
Days
0
10
20
30
40
50
60
70
80
90
Raw
material
storage
period
WIP Storage
Period
Finished
Good
Storage
Period
Debtor
collection
period
Creditor
Payment
Period
Operating
Cycle Period
Net oprtating cycle
Days

13. Calculation of Ratio
0
5
10
15
20
25
30
Gross Profit Ratio Net Profit Ratio
PROFIT RATIO
RATIO
0
2
4
6
8
10
12
Stock Turnover Ratio Debror Turnover RatioCreditor Turnover Ratio
TURNOVER RATIO
Ratio (in time)

14. FINDINGS
•The operating cycle of the company is 83 days.
• The company has raw material storage period is 49 days.
•Work in Progress storage period is 15 days.
•Finished goods storage period is 31 days.
•The debtor collection period is 43 days. It means sale are more on credit and company provide the 43
days allow to debtor or customer for make a payment.
•Creditor payment period is 55 days. It means company have purchase the goods on credit also and the
supplier provide 55 days to the company for make a payment.

15. •So the operating cycle of the company is 83 days. The company operates 3 operating cycle in a year.
•The Gross Profit ratio is 25% of its sales it is good for the company.
•The net profit ratio is 20% of its sale and the company have only 5% indirect expenses.
•The stock turnover ratio is 3.07 times of its stock . so it helps to company to reduce the indirect expense.
So there is no inventory ideal.
•The debtor turnover ratio is 10 so more goods are sold on credit and the debtor collection period is 43
days.
•The creditor turnover ratio is 6.67 so company is also buying the good on credit and the payment period is
allowed by company is 55 days for make payment.
•So the payment period is less than the collection period so it helps to maintain the liquidity position of
the company.

16. SUGGECTIONS
•For Wahid Sandhar sugar ltd the working capital management cycles is longer than
the industry average however the following points should be above the indicial
elements or working capital
•The stock of raw material is considerably higher than average. so there is a need for
stock control produces to be reviewed
•The values of creditors is also above average the indicates that Wahid Sandhar
sugar is delaying the payments of creditors beyond the credit period although this is
an additions source of finance it may result in a higher cost of raw material or Loss
of good will among the suppliers

17. CONCLUSION
Working capital management is of critical importance to all companies. Ensuring that sufficient liquid
resources are available to the company is a pre-requisite for corporate survival. Companies must strike a
balance between minimizing the risk of insolvency (by having sufficient working capital) with the need
to maximize the return on assets, which demands a far less conservative outlook.