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sankalp final ppt

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sankalp final ppt

  1. 1. WORKING CAPITAL MANAGEMENT AT sankalp Khanna (2k11b27) 1
  2. 2.  Omax auto was incorporated in 1983, Omax is one of the largest manufactures of sheet metal parts , machined tubular, electroplated painted components, sprockets & welding facilities with integrated world class assembly lines.  It has a very broad customer base and supplies products to Maruti Udyog, Hero, Honda, Escorts, Bharat seats and other leading manufacturers of automobile industry.  Omax auto has the largest Sprocket manufacturing capacity (11 Million pa) in South East Asia.  Omax auto has the largest welding facility in India with 800 machines. It has Composite solution provider to customer requirement. 2
  3. 3. Products for Two Wheelers Products for Four Wheelers  Steering Handle Assembly  Carrier  Side Cover  Engine Guard  Oil Pump Assembly  Sprocket Cam and Sproket Timing  Complete Frame Assembly  Pedal Kick Strater  Mufflier  Footrest  Main Stand  Brake Padel  Sprockets  Neck Fuel Filter  Trunk Hinge  Steering Column Shafts  Wiper Rods  Frame Assembly  Transmission Shafts  Rocker Arm Shaft  Truck Chassis (Tata)  Back Plates for Brake shoes  Piston Rods for Dampe Assembly  Shround Fan  Door Beams  Half Shaft Bars  Base Battery Set  Seat Assembly 3
  4. 4.  To analyze the financial statement and behavioral analysis of cost.  Last five year balance sheet has been reviewed along with the changes in the Working capital.  To diagnose the information of financial statements, and to judge the profitability.  Analyze of current assets and liabilities to identify the cause of changes, covering a special emphasis on turnaround of Omax auto ltd. 4
  5. 5.  To study the liquidity position through various working capital related ratios.  To study the way and means of working capital finance of the OMAX AUTO LIMITED.  To estimate the working capital requirement of OMAX AUTO LIMITED.  To examine the effectiveness of working capital management polices with the help of accounting ratio.  To evaluate the financial performance of the company. 5
  6. 6. 6 YEAR Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Net Sales 391000 390072 436294 521089 548822 Working Capital 34574.13 28838.11 17100.24 25159.3 4 34964.07 Working Capital Turnover Ratio 11.31 13.53 25.51 20.71 15.7 Interpretation This above ratio also shows that during the year 2009-10 the company could utilize its resources in a better way compared to 2008-09 Analysis Working capital Ratio 0 100000 200000 300000 400000 500000 600000 Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 11.31 13.53 25.51 20.71 15.7 Net Sales Working Capital Working Capital Turnover Ratio
  7. 7. 7 In lakh 2006 2007 2008 2009 2010 Current Assets 344354.7 369686.2 488491.6 627013.5 566643.8 Current Liabilities 309780.5 340848.1 471391 621854.1 531679.7 Current Ratio 1.1116 1.0846 1.0363 1.0083 1.066 Interpretation : The marginal increase has been on account of increase in Cash and Bank balances and advances. Though the Current Ratio is less than 2 the company’s liquidity position is adequate. Current Ratio
  8. 8. 8 Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 QUICK ASSETS 84588 80626 165677 256115 311946 CURRENT LIABILITIES 309780.5 340848.1 471391 621854.1 531679.7 QUICK RATIO 0.273 0.236 0.351 0.411 0.586 0 200000 400000 600000 800000 Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 0.273 0.236 0.351 0.411 0.586 QUICK ASSETS CURRENT LIABILITIES QUICK RATIO Interpretation It indicates that companies short term liquidity and ability to meet its short-term obligations with its most liquid assets. The Company is in financially sound position. Quick Ratio
  9. 9. .  Working capital of the company was increasing and showing positive working capital per year. It shows good liquidity position.  Positive working capital indicates that company has the ability of payments of short terms liabilities.  Working capital increased because of increment in the current assets is more than increase in the current liabilities. 9
  10. 10.  Company should raise funds through short term sources for short term requirement of funds, which comparatively economical as compare to long term funds.  Company should take control on debtor’s collection period which is major part of current assets .  Company has to take control on cash balance because cash is non earning assets and increasing cost of funds.  Company should reduce the inventory holding period with use of zero inventory concepts. 10
  11. 11.  Limited data:- This project has completed with annual reports; it just constitutes one part of data collection i.e. secondary.  Limited period:- This project is based on five year annual reports. Conclusions and recommendations are based on such limited data.  Limited area: - Also it was difficult to collect the data regarding the competitors and their financial information. 11
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