RSWM is a leading textile company in India with annual revenues of Rs.775 crore. It manufactures yarn and fabric and exports to over 60 countries [paragraph 1]. The company has a production capacity of 81,000 MT of yarn annually from its 5 units in Rajasthan. It also produces 12 million meters of fabric annually [paragraph 2]. The Indian textile industry contributes significantly to India's economy, providing employment and exports. RSWM aims to analyze its financial position and working capital management to efficiently operate and meet contingencies [paragraph 3].

1.  RSWM is a premier company of the Group, with a turnover of Rs.775 crore
(US$ 177 million). RSWM is exporting a complete range of yarn and fabric
to over 60 countries worldwide, giving RSWM a markedly visible presence
across the textile world.
 The manufacturing capacity of the Company is upwards of 81,000 MT of
Yarn per annum from its five units - Gulabpura, Banswara, Mandpam,
Rishabhdev and Ringas located in Rajasthan. RSWM also manufactures
12 million meters of fabric per annum at its Gulabpura unit.

2. PRESENT POSITION OF TAXTILE
INDUSTRY
 The Indian textile industry contributes about 14 per cent to industrial
production, 4 per cent to the country's gross domestic product (GDP) and 17
per cent to the country’s export earnings, according to the Annual Report
2014-15 of the Ministry of Textiles.
 It provides direct employment to over 35 million people and is the second
largest provider of employment after agriculture.
 According to the Ministry of Textiles, the cumulative production of cloth
during April’14- March’15 has increased by 8.3 per cent as compared to
the corresponding period of the previous year.

3. RESEARCH METHODOLOGY
OBJECTIVE OF THE STUDY:-
 To analyze financial position of the organization to execute
the routine operations and meet for contingencies.
 To study the working capital management of RSWM Ltd.,
Banswara.
 To practically understand the concept of working capital
studies in academic session.
 To study the trends & reasons for deviation.

4. INTRODUCTION TO WORKING
CAPITAL MANAGEMENT

5. CONCEPTS OF WORKING CAPITAL
GROSS WORKING CAPITAL:
Simply called as working capital, it refers to the firm’s investment in current
assets. Current assets are the assets, which can be converted into cash within an
accounting year (or operating cycle), and include cash, short-term securities,
debtors, bills receivables and stock (inventory).
NET WORKING CAPITAL (NWC)
NWC = Current Assets – Current Liabilities
Current liabilities are those claims of outsiders, which are expected to mature
for payment within an accounting year (or operating cycle) and include creditors,
bills payable and outstanding expenses.
Net working capital can be positive or negative. A positive net working capital will
arise when current assets exceed current liabilities. On the other hand, negative
working capital occurs when current liabilities are in excess of current assets.
The gross working capital concept focuses attention on two aspects of current assets
management.
Optimum investment in current assets.
Financing of current assets.

6. COMPONENTS OF WORKING CAPITAL
 The main components of the Working Capital Management are as
follows:
 Receivable Management.
 Cash Management
 Inventory Management
 Payables Management

7.  In the form of an equation, the operating cycle process can be expressed as follows:
 Operating cycle = R + W + F + D – C
 Where,
 R = Raw material and stores storage period.
 W = Work-in-Progress period.
 F = Finished goods storage period.
 D = Debtors collection period
 C = Credit payment period.

8. FINDINGS
 Since, the Working Capital of RSWM Banswara is increasing every year but the Current
Assets & Current Liabilities are decreasing from the last year, these is due to following
reasons:-
 In Current Assets, Inventory & Loans & Advances are increases from the last years. But
Other Current Assets & Cash & Bank balance is decreases, specially there is a
drastically change in Cash & Bank Balance. If we see the figures of Cash & Bank in
Balance-Sheet, we can find that there is increase in Cash in hand & Saving a/c of the
company, but decrease in fixed deposits of the firm in 2014-15 from Rs. 70.40 lakhs to
Rs. 7.12 Lakhs. All these Cash are invested in the Fixed Assets or Inventory of the firm
and this is happening every year. This shows that company is running at the high risk.
So company should increase its cash & bank balance for good liquidity.
 Current Liabilities was also decreased from 5669.41 to 4643.34 in 2014-15 this is due to
the no provision made in the year 2014-15 & also the low Working Capital loans.
 If we see the changes we find that Current Assets & Current Liabilities of 2013-14 is
increased from 2012-13 Such a volatility in current assets & current liabilities indicates
poor working capital management of the company and it must be controlled, other wise
it must be harmful in future for the company.

9. CONCLUSION
 RSWM Banswasra is one of the most leading companies of LNJ Bhilwara Group. It
has proper resources to manage its production cycle. All the departments of RSWM
Banswara are well coordinated with each other. It has its customers in both global
and domestic market.
 RSWM has the latest technology for the production. The SQC and CPPC departments
are also strong. RSWM has policies like Environment Policy & Quality Policy. It has
a good brand image and good brands.
 RSWM has also dad considerable success with major modernization schemes
involving almost total replacement of outdated equipments & production methods,
achieving capacity utilization. Also, RSWM has carried out many engineering &
maintenance improvements, resulting in lower operating costs.
 In order to conclude, it can be said that Working Capital Management is effective
only through proper blend of Cash Management, Receivables Management,
Inventory Management & Payables Management.
 Company’s policy regarding management of all these are clean set. Company keeps
its position secure in both Debtors & Creditors dealings. The profit & turnover of the
company is increasing every year. The structural health of Working Capital is
improving continuously.It is a prosperous, growing firm which would attain heights
in coming years.

10. LIMITATION OF THE STUDY
 This study was restricted to RSWM Ltd. (Banswara Unit) only and therefore,
the result of this study cannot be generalized to other parts of the units.
 The study was relayed upon the information given by the respondents at the
time of interview.
 Due to confidentially of certain information all the details could not be obtained
from the company.