working capital

1. FINANCIAL MANAGEMENT
WORKING CAPITAL MANAGEMENT
Presenting
Ziauddin Ahmed Siddiqui
Reg #: 51310
Presented To
Sir. Zia-ur-Rehman

2. COMPANY INTRODUCTION
 SS Industry provides innovative solutions for pretreatment Vat
dyeing, Bleaching, Mercerizing, Cotton Yarn, printing and
finishing of textiles products
 Our specialists provide color matching with high quality, trend
monitoring as well as sector specific concepts
 Generate greater value from their products
 Our package produce improved color yields and excellent
brightness

3. VISION STATEMENT
To transform the Company into a modern and dynamic
yarn, cloth, processed cloth and finished products
manufacturing company with highly professionals and
fully equipped, to play a meaningful role on sustainable
basis in the economy of Pakistan.

4. MISSION STATEMENT
To provide quality products to customers and explore new
markets to promote/expand sales of the company through
good governance and foster a sound and dynamic team, so
that to achieve optimum prices of products for sustainable
and equitable growth and prosperity of the company.

5. OUR QUALITY POLICY
Its our policy to achieve Quality Parameters through
continuously improving Processes and
Quality Management System having long term
relationship with Buyers Satisfaction

6. PRODUCTS
 Blended Yarns
 100% Cotton (Medium to Dark Colors)
 100% Cotton Yarn (White to Light Colors)
 Extra Long Staple Cotton
 Compact Yarns
 Slub Yarns
 Compact Core Spun Yarn
 Eli Twist yarns

7. CUSTOMERS
 FEROZE TEXTILE
 COSMIC TEXTILE
 M.A TEXTILE
 ANWAR TEX INDUSTRY
 UNIVERSAL TEXTILE INDUSTRY (UTI) PVT
 MEHTABI TOWELS
 SAYA WEAVING MILLS PVT LTD
 MIRTEX INTERNATIONAL PVT.

8. WOKING CAPITAL POLICIES
Here are four different working capital policies:
Matching Working Capital Policy
Aggressive Working Capital Policy
Conservative Working Capital Policy
Balance Working Capital Policy

9. MATCHING POLICY
Matching policy matches the maturity of a financing
source with an asset’s use full life
Short term assets should be financed with short term
liabilities
Long term assets should be funded by long term
financing sources.

10. CONSERVATIVE POLICY
Conservative policy ignores the difference between
temporary and permanent current by financing almost all
asset investments with long term capital.
This policy greatly reduces the risk of liquidity &
eliminated the firm’s exposure to fluctuating loan rate and
availability of short credit.
It is less profitable because it has a higher financing cost.

11. AGGRESSIVE POLICY
Aggressive policy is an attempt to increase the return on
equity by taking advantage of the cost differential between
short and long tern debt.
It takes extreme position of restoring to short term
liabilities not only temporary but also part or all of
permanent current asset requirement.

12. BALANCED POLICY
Long term financing is used to support permanent current
assets and part of temporary current assets.

13. S.S INDUSTRY’S POLICIES
ACCOUNTS RECEIVABLES (A/R)
oA/R policy is applied for 30 to 120 days
oGrants trade credit
oSpecial discounts
ACCOUNTS PAYABLES (A/P)
oStandard terms of payment is 30 to 120 days
oFollow the restricted time period
oFinance Manager will be responsible
INVENTORIES
oMaterial presence in inventory is determined
oInventory kept for not more than one month after
purchasing
oPurchase department will maintain procurement

14. WORKING CAPITAL PROCEDURES
CASH MANAGEMENT
oAt SS Industry, cash budget is prepared when they receive
customer order.
oCash budget is prepared on the basis of information from various
departments such as engineering, production & economics
assumption.
oOutflow is determined on the basis of raw material, payment of
taxes, interest or borrowing
INVENTORY MANAGEMENT
oFirst of all, purchase of material for inclusion in the total
inventory is determined.
oProcurement is done by purchase department.
oPurchase order is placed for entire quantity of a specific item and
its delivery over a period of time is received.
oInventory is placed in store not more than one month.
oQuality is checked by Q.C department.
oRecord and processing is maintained by Ms-Excel.

15. ACCOUNTS RECEIVABLE MANAGEMENT
o S.S industry credit policy is applied for 30 to 120 days
o S.S industry grants trade credits to attract potential
customers.
o S.S industry provides special discounts for valuable
customers
o If payments are not received within due date, the finance
department will contact the customer by telephone or e-mail
o If no response is received after the mentioned due date,
Legal Recoveries and Collections will be advised.
o Another favor for valuable customers is that they can pay
after two months from the due date.

16. ACCOUNTS PAYABLE MANAGEMENT
o Payable invoices are processed by accounts department
o Review the invoices paid within due date
o Standard terms of payment are 30 to 120 days from date of
receipt of a valid invoice.
o No invoices will be paid on any other terms unless
expressly agreed by the Finance Manager

17. CONCLUSION
By carefully analyzing the above working capital procedures at
S.S Industry, we can give the following suggestion to S.S
Industry:-
S.S Industry must maintain buffer stock or excess level of
inventory, i-e above the required level so that unexpected large
orders can be met by the company easily in case of emergency
The credit policy of S.S Industry should be formulated again and
customers should be allowed credit days of 30 to 60 days or in
other words, debtor turnover period should be reduced so that
company can have sale receipts before the expiry of credit time
period allowed by the creditors. In this way company will have
excess cash beforehand.