Integrated Business Reporting Publication_2Dec2015_FINAL
bansail
1. 1
A
PROJECT REPORT
ON
““TToo ssttuuddyy tthhee eeffffiicciieennccyy ooff wwoorrkkiinngg ccaappiittaall wwiitthh hheellpp ooff rraattiioo aanndd
ooppeerraattiinngg ccyyccllee..””
For
BHANSALI TRAILERS PVT LTD, KOKAMTHAN
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY, PUNE
IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF
MASTER OF BUSINESS ADMINISTRATION (M.B.A.)
UNDER THE GUIDANCE OF
(PROF. P.S.KAWLE)
-SUBMITTED BY-
( Mr. SHINDE SANTOSH BHAUSAHEB)
Submitted to
SRES
Sanjivani College of Engineering Department of MBA,
Kopargaon
2015-2017
2. 2
DECLARATION
I undersigned here by declare that the report entitled as “TToo ssttuuddyy tthhee
eeffffiicciieennccyy ooff wwoorrkkiinngg ccaappiittaall wwiitthh hheellpp ooff rraattiioo aanndd ooppeerraattiinngg ccyyccllee ffoorr
bbhhaannssaallii PPvvtt.. LLttdd..”” is a genuine and bonafied work prepared by me under the
guidance of Prof. P.S.KAWLE.
The empirical findings in this project report are based on the data collected by
myself. The matter presented in this report is not copied from any source .I understand
that any such copy is liable to the punishment in way the university authorities deem
fit.
The work has not been submitted for the award of any degree or diploma
either to university of Pune or any other universities.
This project report is submitted to university of Pune in a partial fulfillment of the
degree of
“MASTER OF BUSINESS ADMINISTRATION (FINANCE)”
DATE:
PLACE – KOPARGAON (Santosh Shinde)
3. 3
ACKNOWLEDGEMENT
I would like to take this opportunity to express my respect and deep gratitude to
my guide Prof. P.S.KAWLE. For giving all guidance required for my project report
from being a constant source of inspiration and motivation. It was my privilege to have
worked under his guidance.
I am thankful to MR. Suresh kalamkar sir (GM) for making
available all requisite in procuring the required information. I would like to place on
my records my sincere thanks to my friends for their help during my project
preparation. In this regard I owe a special debt of gratitude.
4. 4
INDEX
Chapter
No. Chapter Name Page No.
1. Executive summary
2. Introduction
3. Industry profile
4. Company profile
5. Product profile
6. Objective of study
7. Research Methodology
(i) Primary Data
(ii) Secondary Data
(iii) Scope of the study
(iv) Limitations of the study
8. Theoretical Background of the study
9. Data analysis and Interpretation
6. 6
SRES
SANJIVANI COLLEGE OF ENGINEERING,
DEPT. OF MBA
Certificate
This is to certify that Mr. Santosh Bhausaheb Shinde Has submitted a
summer project on “Bansali Trailers Pvt Ltd”.(Title) “TToo ssttuuddyy tthhee
eeffffiicciieennccyy ooff wwoorrkkiinngg ccaappiittaall wwiitthh hheellpp ooff rraattiioo aanndd ooppeerraattiinngg ccyyccllee ffoorr
bbhhaannssaallii ttrraaiilleerrss PPvvtt.. LLttdd..” to Savitribai Phule Pune University, Pune
forthe partial fulfillment of Master in Business Administration (M.B.A.).
We further certify that to the best of our knowledge and belief, the matter
presented in this project has not been submitted to any other Degree or
Diploma course.
(Name of guide) Internal Guide
Prof. P . S. Kawle (H.O.D)
Dr. B.M. Londhe
External Examiner
8. 8
EXECUTIVE SUMMARY
The current study contributes to the literature by examining impact of working
capital management on the operating performance and growth of new pvt lmt
companies. The study also sheds light on the relationship of working capital with debt
level, firm risk, and industry. Using a sample of a manufacturing, the study finds a
significant positive association between higher levels of accounts receivable and
operating performance. The study further finds that maintaining control (i.e. lower
amounts) over levels of cash and securities, inventory, fixed assets, and accounts
payables appears to be associated with higher operating performance, as well. We find
that the firms which are experiencing unusually high growth tend not to perform as
well as those with low to moderate growth. Further firms which are experiencing high
growth tend to hold higher levels of cash and securities, inventory, fixed assets, and
accounts payables. These findings tend to suggest that firms are willing to sacrifice
performance (accept low or negative operating returns) to increase their growth levels.
The higher level of growth is also associated with higher operating and financial risk.
The findings of this study suggest that perhaps the firms should stay more focused on
their operating performance than on maintaining high growth levels.
Working capital policy refers to the firm's policies regarding 1) target levels for
each category of current operating assets and liabilities, and 2) how current assets will
be financed. Generally good working capital policy (i.e. under conditions of certainty)
is considered to be one in which holdings of cash, securities, inventories, fixed assets,
and accounts payables are minimized.
Various ratios were calculated to know the status of the business, following are the
ratios : Current ratio,
Acid test ratio
Inventory turnover ratio
Receivable turnover ratio
Working capital turnover ratio
Fixed assets turnover ratio
Current assets turnover ratio
Total assets turnover ratio
Net profit ratio
Even receivable management, cash management and inventory management
were taken into consideration for studying the project.
10. 10
2.1 INTRODUCTION OF PROJECT:-
This project was carried out in Bhansali trailers Pvt Ltd. The area of project was
accounting procedure and evaluation of financial position of the company by using
Working Capital Management. Especially in any corporate company constitute major
area of investment. Huge investments are required to carry out the formulation and bulk
drug.
There are different costs involved at each level of the company. The company s
main focus will be on sale and formulation to reduce their costs on it. Thus,
there are critical costs involved in this the presentation of the same is very
important. Hence, it is accounting and reporting is done with utmost care and
according to accounting standards regarding overall turnover of the company
The current study contributes to the literature by examining impact of working
capital management on the operating performance and growth of new Pvt Ldt
companies. The study also sheds light on the relationship of working capital with debt
level, firm risk, and industry. Using a sample of a manufacturing, the study finds a
significant positive association between higher levels of accounts receivable and
operating performance. The study further finds that maintaining control (i.e. lower
amounts) over levels of cash and securities, inventory, fixed assets, and accounts
payables appears to be associated with higher operating performance, as well. We find
that the firms which are experiencing unusually high growth tend not to perform as
well as those with low to moderate growth. Further firms which are experiencing high
growth tend to hold higher levels of cash and securities, inventory, fixed assets, and
accounts payables. These findings tend to suggest that firms are willing to sacrifice
performance (accept low or negative operating returns) to increase their growth levels.
The higher level of growth is also associated with higher operating and financial risk.
The findings of this study suggest that perhaps the firms should stay more focused on
their operating performance than on maintaining high growth levels.
Working capital policy refers to the firm's policies regarding 1) target levels for
each category of current operating assets and liabilities, and 2) how current assets will
be financed. Generally good working capital policy (i.e. under conditions of certainty)
is considered to be one in which holdings of cash, securities, inventories, fixed assets,
and accounts payables are minimized.
11. 11
The level of accounts receivables should be used as a means of stimulating sales
and other income. Previous literature on working capital management has found a
negative association, overall, between level of working capital and operating
performance as measured by operating returns and operating margins. Under conditions
of certainty (i.e. sales, costs, lead times, payment periods, and so on, are known), firms
have little reason to hold more working capital than a minimum level.
The management of working capital plays an important role in the maintaining
the financial health of the firm during the normal course of business.
A study of working capital is of major importance of internal and external
analysis because of its relationship with the current day to day operations of business.
The study of management of working capital covers areas like cash management,
Accounts receivables, inventory and other concerned areas. Thus, working capital is of
paramount importance to a firm's financial performance.
In working capital analysis the direction of change over a period of time is of
crucial importance. Working capital is one of the important fields of management. It is
therefore very essential for an analyst to make a study about the trend and direction of
the working capital. The working capital trend analysis represents a picture of variation
in current assets, current liabilities and working capital over a period of time. Such an
analysis enables us to study the upward and downward trend in current assets and
current liabilities and it’s effect on the working capital position.
13. 13
INDUSTRY PROFILE
Agriculture equipment industry in India:-
India’s agricultural sector is one of the most significant components of
the country’s economy, though its share in the GDP has been decreasing over
the years. Nearly 60 per cent of India’s population is dependent on agriculture
for its livelihood. Performance of the agricultural sector continues to have a
crucial impact on the prices of essential goods and market demand for various
consumer products.
Agricultural Equipment industry plays a key role in supporting the
performance of the agricultural sector in India. Farming activities are
increasingly getting mechanized, and the availability, quality and performance
of agricultural equipment has an increasing impact on improving the output and
productivity of the agricultural sector.
While India manufactures and deploys a range of agricultural
equipment across the industry value chain, tractors and tillers are the two that
constitute the bulk of the industry.
Assam is one of the under developed regions of the country. Like in
other sectors, the state is also lagging behind in the agricultural sector. Though
Assam is gifted by enormous natural resources and crop production is the major
agricultural activity here, but these resources are not being fully utilized due to
inadequacy of critical farm inputs. This has resulted lower level of production
and productivity in Assam. This has been reported several times in the past.
Farm power is one of the critical inputs. In terms of total power
availability, Assam has 0.56 kW/ha as against 2.96 kW/ha for Punjab as well as
1.02 kW/ha for India as a whole. The tractor population in Assam is only 2 per
thousand hectares as against 82.5 per thousand hectares for Punjab. The figure
for India is 12.2 per thousand hectares. Animal source of farm power, which has
limited capacity, still dominates the agricultural of Assam.
Mechanization of agriculture has been growing:-
Agricultural Mechanization
Definition
Use of improved tools/implements/machines for farm operations in order to
• improve the quality of work
• Maintain timeliness of operations
• Reduce drudgery
• Reduce cost of operations
•Maintain environmental sustainability is the farm mechanization. Hand tools,
animal drawn implements, tractor/power tiller/engine driven machinery and
self-propelled machinery, which are advantageous over the traditional ones, are
the inputs of farm mechanization. The concept of agricultural mechanization is
dynamic and situation specific. Though agricultural tractor is one of the
universally used farm machines but mere tractorization cannot be described as
farm mechanization.
14. 14
Agricultural mechanization in India:-
Like the variations in other sectors, there exist distinct regional
variations of agricultural mechanization amongst the states of India. However,
barring few states including the NE states, the progress of farm mechanization
in India could be divided into three distinct phases. These are: Pre-Green
Revolution Era (1947-1965); Green Revolution Era (1965-1975) and Post-
Green Revolution Era (1975 onwards).The increase in land productivity is
attributed to inputs of quality seeds, chemical fertilizer and never the less farm
implements and mechanical power.
The mechanization programmed in Indian agriculture started with the
import of tractors, power tiller, harvesting machine during the green revolution
era. But it was soon realized that mere dependence on imported machines
couldn’t support & sustain farm mechanization. The result of this realization
was the growth of farm machinery manufacturing industry in India. Today
about 8,000 number of organized farm machinery manufacturers are supporting
the mechanization programmed throughout the country. Unfortunately, except
the traditional village craftsmen, there is no organized machinery manufacturer
in our state. Besides these commercially developed farm machinery, new farm
machinery are also developed as a result of the effort of research organizations.
Over the years, the share of human and animal power in agriculture has
reduced drastically, paving the way for a variety of equipment to emerge. Many
of these are driven by tractors, diesel engines or tillers. Several of the traditional
processes agriculture has been transformed with the advent of mechanization.
Migration of agricultural labor to urban areas:-
There has been an increasing trend of migration of rural population to
urban areas, to seek better job opportunities and lifestyles. This is primarily due
to improvement in income levels and quality of life in cities, enabled by the
boom in services and manufacturing sectors. As a result, the number of
agricultural workers has been declining, and it is expected that the percentage of
population involved in agriculture will come down from the present 60 per cent
to close to 40 per cent by 2020. The decrease in number of manual workers has
necessitated the move towards increased mechanization.
As a result of these trends, the domestic market for agricultural
equipment in India has been growing steadily.
The Government is actively supporting the agricultural sector:-
The Government of India has initiated several steps to improve
mechanization and boost farm productivity.
Assistance in the form of subsidy at the rate of 25 per cent of the cost
with permissible ceiling limits is made available to the farmers for the purchase
of agricultural equipment including hand tools, bullock-drawn/power-driven
implements, planting, reaping, harvesting and threshing equipment, tractors,
power-tillers and other specialized agricultural machines under the centrally
sponsored scheme of Macro Management of Agriculture.
According to the Economic Survey 2006-2007, 7,292 tractors, 16,500
power tillers, 64,610 hand tools, 41,854 bullock-drawn implements, 15,236
tractor-driven implements, 6,080 self-propelled/power-driven equipment,
81,496 plant protection equipment, 6,587 irrigation equipment and 66,464
15. 15
gender-friendly equipments were supplied to the farmers under the Scheme
during
2005-06.
Market competitiveness of goods produced in the region as compared to
national and global commodities markets:-
This is another factor that determines the purchase of agricultural
machinery. The investment in productivity enhancing goods is proportional to
the predictable returns the farm produce would fetch, which in turn is
influenced by the demand for the commodity in the global market. Punjab and
Haryana meet the above criteria largely due to the presence of consolidated
wheat farms and due to the emergence of corporate participation in the process
of agriculture through promotion of contract farming and sourcing.
As per the Livestock Census 2003, Andhra Pradesh, Karnataka,
Madhya Pradesh and Tamil Nadu were the fastest in adopting automation
solutions; however, the market in some of these states is yet to evolve in terms
of scale.
17. 17
4.1 COMPANY PROFILE
Quick facts:-
FOUNDER Bhansali Dhanraj.
COUNTRY India
INDUSTRY Manufacturing Trailers& other agriculture Implements.
YEAR OF
ESTABLISH
1968 ( In Trailers in 1995)
BUSINESS
GROUP
Bhansali udyog
HEAD OFFICE Bhansali TVS,
Sakkar Chowk, Nagar-Pune Highway; Ahemadnagar.
Phone No.:- (0241) 2253756 ;2227724
BRANCH
OFFICE
‘‘Dhantara’’ Gurudwra Road Kopargaon:
- 423601 Dist: - Ahemadnagar.
P.B.No. :-051 Tel :- (02423)222391, 92, 93
Fax :-91- 2423-222394 Email
:-bhasaliudyog@rediffmail.com
FACTORY Survey No.384/p; Nagar Manmad highway,
Kokamthan (Tinchari): Kopargaon: - 423601
Mob. :- 9372747561; 9372747563
WEB SITE. www.bhansalitrailors.in & www.bhansalitrailors.com
18. 18
4.2 History of Company:-
The Bhansali Trailers Pvt. Ltd. was established in 1968 by Dhanraj
Bhansali. As a tracter dealer. But their continuous interaction with the consumer
they gathered the confidence and relevant technological knowledge that helped
to them for start their OWN manufacturing unit in 1996 with the market brand
of ‘‘BAHUBALI’’.
Today the company Bhansali Trailers Pvt Ltd.is a trusted name
engaged in manufacturing a wide range of agricultural equipments and
implements that are accepted globally for their optimum performance longevity
and high quality.
Company are association with tractor manufacturing companies was an
opportunity for them to learn aspects like industrial safety, production planning
etc. which helps them to complete given orders in scheduled time .
They are continuously focused on customers’ satisfaction. They take
pride of their workers who are highly skilled and sincere.
Company achievements or Awards:-
ALL INDIA AWARDS FOR EXPORT EXCELLENCE – Awarded 2006 –
2007 by Engineering Export Promotion Council of India.
UDYOG SHIROMANI AWARD-2007- from ’’National Institute of
Economic Development (NIED)’’ New Delhi.
EXPORT EXCELLENCE (Western Region)- Awarded by EEPC INDIA.
2007 - 2008.
GOVERNMENT OF MAHARASHTRAINDUSTRYDEPARTMENT–
Best Performance for export 2008-2009.
INDIAN ORGANSATION FOR COMMERCE AND INDUSTRY-
Awarded- 2009 “Bharat Gaurav Samman Puraskar”.
RAJIV GANDHI EXCELLENCE AWARD BY Global Achievers
Foundation -2010.
Membership with other organisation:-
Engineering Export Promotion Council of India.
National Company Small Industries Corporation Ltd. (NSIC) New Delhi
Undertaking by Government of. India.
Export Credit Guarantee Corporation of India Ltd.
Business mission:-
To Built
An Enthused, Knowledgeable, Motivated, Learning, Company Culture.
A selected portfolio of World Class Leading Products and Services.
An ever growing Company involved in the Global Business Community.
Dedicated To
The Continuous Improvement of Services and Products.
Up gradation of manufacturing technology and skills.
Cost reduction through elimination of waste in all business process.
Assurance of first time right in everything will do.
19. 19
Implementation of quality policy is demonstration of their overriding
commitment to customer’s satisfaction.
Constantly Meeting the Customer Requirements.
Maintaining a clear Competitive Edge over our competitors.
Quality policy:-
The company being ISO 9001-2000 certified operates with set manufacturing
standard, & they operates on following standard
TESTING&DESIGNING
BATCH PRODUCTION UNDER SUPERVISION OF DESIGNING
PERSON
IMPLEMENTATION OF PRODUCTS ON PRODUCTION LINE
They will strive to deliver agricultural and farm machinery products to meet
and exceed customer expectations of quality, delivery and cost .they will
continuously improve their systems and process .This policy shall be deployed
through Continues improvement in product quality by customers feedback,
process control and variability reduction.
Associated company:-
Mahindra & Mahindra Ltd.
Punjab Tractors Ltd.
Escort Ltd.
International Tractor Ltd. &
Big Export House and overseas customers.
John Deere
Company Infrastructure:-
List of Machineries
They possess three high-tech manufacturing units that are spread over a
sprawling area of 100000 square feet. They possess all the requisite machineries
and equipment in the latest models, which enables us in meeting the delivery
deadlines and attain higher client satisfaction.
SOME OF THE MACHINERIES ARE:-
Table list of machinery
Sr.
No.
Name of Machine
1) CNC Profile cutting Machine
2) Paint shop with conveyer
3) Lathe Machine
4) CO2 (MIG) Welding Machine
5) ARC Welding Machine
6) Radial & Pill Machine
7) NCS Hearing Machine
8) Press Machine
9) Three Painting oven
10) Screw Compressor
11) Hacksaw Machine
12) Power Press
20. 20
13) Universal cut master
14) E.O.T. Crane for Loading & Unloading
15) Fork lift for Loading & Unloading
Exporting countries:-
Graph :- Exporting countries
Table :- exporting countries
1) AbuDhabi 13) Saudi Arabia 25) Indonesia
2) Angola 14) Sudan 26) Ghana
3) Bangladesh 15) Tanzania 27) Dubai
4) Brazzaville 16) Uganda 28) Congo
5) Cameron 17) Zambia 29) Chad
6) Chili 18) Yemen 30) Cambodia
7) Ethiopia 19) Gambia 31) Botswana
8) Guyana 20) Surinam 32) Benin
9) Kuwait 21) Sri-Lanka 33) Australia
10) Malawi 22) Paraguay 34) Algeria
11) Morocco 23) Mali 35) Niger
12) Nigeria 24) Madagascar 36) Democratic
Republic of the
Congo
Progress chart:-
They have humble beginnings and have been learning through Experience
With in very short span they not only established as a leader in the field of
Agricultural Equipments .But has also grown at a dizzying pace.
21. 21
Designmanufacturing and capabilities
The company manufactures the entire product through a perfect production
line. The design of the implement is done with Auto Cad and Solid Edge
software by the experienced designer and the testing model is implemented,
after testing and some development is made, if needed.
The inspection of tested model carried by responsible personnel .The final
design put then in to the production line, accomplished by skilled workers.
They believes that quality must be built into all the company’s processes;
beginning from the procurement of raw material, production processes,
performance testing right up to the finished product. Raw material is accepted
with its testing report. Along with these stringent quality measures, spot checks
of the products in various stages of production through gauge control and
finally pre-dispatch inspection on the finished product leave very little to
chance.
Working diligently towards achieving high quality standards are we most
vital assets –its employees. Their enthusiasm and vigor finds reflection in the
company’s exemplary performance .They ensure that all ISO 9001-2000
standards and norms are adhered to and specific customers expectations
fulfilled. Any rejection or delay is viewed as personal setback by the employees
making them rare occurrences in our history.
They make all our efforts to ensure that the right product, at the right time, of
the right quality & also right cost (price) is delivered at the right place.
24. 24
5.1 PRODUCT PROFILE
Table :1- Product profile
TRAILOR TANKER RIGID TILLERS
1) 4TC 2wheel/4 wheel
Tipping / Non -Tipping.
2) 6TC 2wheel/4wheel
Tipping / Non-Tipping
3) 8TC 2wheel/4wheel
Tipping / Non- Tipping
1) 2 wheel (Capacity-
5000&10000 ltr.)
2) 4 wheel (Capacity-
5000& 10000 ltr.)
1) Extra heavy duty
adjustable tiller.
2) Extra medium duty
rigid tiller.
3) Heavy duty tiller.
4) Spring Loaded Tillers
5) Medium Duty Tillers
HARROW PLOUGH LEVELLER
1) Mounted Offset Disc
Harrow.
2) Centre Tyre Trailed
Offset Harrow.
3) Trailed Offset Disc
Harrow Without / With
Rear Tyre.
1) Mounted Disc Plough.
2) Two Furrow Reversible
Plough.
3) Mounted Mould Board
Plough.
1) ReversibleLand
Leveller.
2) HeavyDutyLand
Leveller.
DRILL ROTAVATOR RIGDER
25. 25
1.TRAILERS
Trailers are one of the most use full products in agriculture field. It is
mostly sellable by Bhansali udyog. Good result of it since 1996 has been started
production of this product.
Table no.2:- Trailers features( Hydrolic)
2.WATER TANKER
Table no.3:- Water tanker features.
3.RIGID TILLERS
Table no.4 Rigid tillers features.
Sr. No. Features
1. Types Tipping
Non-Tipping
2. Color Blue & Red
3. Capacity Tipping( 5 MT & 6 MT)
Non-Tipping(4MT,6MT,8MT)
4. Launch December 1996
5. Length 10 feet
6. Width 6 feet
7. Height 21 & 24 inch
Sr. No. Features
1. Types 2 Wheel ;4 Wheel
2. Colour Blue / Red
3. Capacity 5,000 Ltr. ;10,000 Ltr.
Sr. No. Features
1. Types 1) Extra heavy duty adjustable
tiller.
2) Extra medium duty rigid
tiller.
3) Heavy duty tiller.
4) Spring Loaded Tillers
5) Medium Duty Tillers
2. Color Red / Blue
26. 26
4. HARROW
Table no.5:- Harrow features.
5.PLOUGH
Table no.6:- Plough features.
6.LEVELLER
Table no.7:- Leveller features
7. DRILL
Table no.8:- Drill Features.
Sr.
No.
Features
1. Types 1) Mounted Offset Disc Harrow.
2) Centre Tyre Trailed Offset
Harrow.
3) Trailed Offset Disc Harrow
Without / With Rear Tyre.
2. Color Red / Blue
Sr.
No.
Features
1. Types 1) Mounted Disc Plough.
2) Two Furrow Reversible Plough.
3) Mounted Mould Board Plough.
2. Color Green, Yellow, Blue & Red
Sr. No. Features
1. Types 1) ReversibleLandLevelers.
2) HeavyDutyLandLevelers.
2. Colou
r
Red / Blue
Sr.
No.
Features
1. Types 1) Automatic seed drill
2)Seed drill cum Fertilizer
2. Colour Red, Blue& Green
27. 27
8.ROTAVATOR
Table no.9:- Rotavator
9.RIGDER
Table no.10.:- Rigder features
Sr.
No.
Features
1. Type 36 ,42 Blade
2. Color Red,Orange
Sr.
No.
Features
1. Types 1)Plate tie Rigder
2) Two furrow Rigder
3) Two Disc Barrow Rigder
2. Color Red / Blue
29. 29
6.1 OBJECTIVES
The objectives of project on Management of working capital are as follows-:
To study the conceptof working capital management
To find out the efficiency of working capital management through
a) Ratios
b) Operating Cycle
To provide suggestion based on analysis improving working capital
management of bhansali trailers.
31. 31
RESEARCHMETHODOLOGY
Meaning of Research
Research is an art of scientific investigation. It is a movement from the known to
the unknown. Curiosity is an essential natural feeling of every human being.
Whenever theunknown fact confronts us, we try to find the meaning and causes of
that fact. This feeling of human being is the mother of all knowledge and the
methods which he employs for obtaining the knowledge of whatever the unknown,
is called as research
Definition of Research-
“Research is the process of systematic and in-depth study or search for any
particular topic, subject or area of investigation, backed by the collection,
compilation, presentation, and interpretation of relevant details of data.”
7.2 METHODS OF DATA COLLECTION
The data was collected from the customer by adopting the method of
Questionnaire and interview schedule.
1.Primary Data:
• The concern staff of Bhansali Trailers Pvt Ltd was interviewed personally.
The data was collected with the purpose of evaluation.
• Discussion with the finance manager regarding the figure of balance sheet.
• Collection of information related to working capital from other members
of the accounts department of the organization.
2.SecondaryData
Secondary data is provided by the organization. The needed information is collected
from:
Balance sheet of 2013-14
Balance sheet of 2014-15
Balance sheet of 2015-16
Company websites (www.Bhasalitralier.com )
The present study is aimed at to analyze the working capital analysis of Bhansali
Traliers Pvt Ltd, by coving yearly financial data supplied in the company’s financial
accounts
32. 32
7.3 Scope of the study
This project is carried to analyze the working capital of BHANSALI
TRAILERS PVT. LTD.
As the part of the study of working capital and its circulation, statement of
changes in working capital and ratio analysis with its conclusion and
interpretation of working capital with the help of graph has been done.
This project is based on last three years record and these records are used for
comparison for ratio analysis.
33. 33
7.4 LIMITATIONS
The study is limited only to working capital management
The information and data, which is made available by the personnel
working in the organization is only used for this study.
The study is based only on last 3-year records.
The study is restricted to financial position of the company with on attention
given to loans and advances and deposit mobilization.
35. 35
8.1 Introduction:-
The financial management of business firms involves: the management of long term
assets, fixed assets, management of capital and management of short term assets and
liabilities. The first of three functions is the capital budgeting, the second is the
management of capital structure and the last but not the least is the management of
working capital.
Meaning & Definition: -
Working capital. management is the process of planning and controlling the level and
mix of the current assets of the firm as well as financing these assets.
"The portion of firm's current assets which are financed with long term funds”
L.G.Gitmann:-
“excess Amt of current assets overcurrent liabilities”.
Concepts:-
The concept of working capital has been a matter of great controversy among the
financial experts.
There are two concepts of working capital i.e.
a) Gross Concept
b) Net Concept
a) Gross Concept:-
The Gross concept of working capital deals with firms current assets. The sum total
of current assets of firm is termed as working capital.
From the perspective of working capital needs, Gross concept of working capital is -
the investment in circulating assets or in inventory and accounts receivables,
comprising the opening cycle of a manufacturing firm. which includes cask short term
securities, debtor, bills receivable and inventories.
b) Net Concept:-
Net concept of working capital refers to current assets less current liabilities. That
means, working, capital is the difference between resources in cash or readily
convertible into cash i.e. current assets and organizational commitments for which cash
will soon be required i.e. current liabilities.
Thus:-
Net Working Capital = Current Assets - Current Liabilities
36. 36
Current liabilities are those claims of outsiders which are expected to mature for
payment within an accounting year and include creditors, bills payable, bank overdrafts
and outstanding expenses.
Thus, according to net concept of working capital represents excess of current assets
over current liabilities.
So, there is no universal concept of working capital that is accepted widely. Some
have made it quite simple stating it is the difference between current assets and current
liabilities. Others consider it as being equal to the total of current assets.
CONSTITUENTS OF CURRENT ASSETS:-
1) Cash in hand and cash at bank
2) Bills receivables
3) Sundry debtors
4) Short term loans and advances.
5) Inventories of stock as:
6) Temporary investment of surplus funds.
7) Prepaid expenses
8) Accrued incomes.
9) Marketable securities.
In a narrow sense, the term working capital refers to the net working. Net working
capital is the excess of current assets over current liability, or, say:
working capital can be positive or negative. When the current assets exceeds 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 out of the current assts or the income
business.
CONSTITUENTS OF CURRENT LIABILITIES
1. Accrued or outstanding expenses.
2. Short term loans, advances and deposits.
3. Dividends payable.
4. Bank overdraft.
5. Bills payable.
6. 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:
37. 37
1. It enables the enterprise to provide correct amount of working capital at correct
time.
2. Every management is more interested in total current assets with which it has
to operate then the source from where it is made available.
3. It take into consideration of the fact every increase in the funds of the enterprise
would increase its working capital.
4. This concept is also useful in determining the rate of return on investments in
working capital. The net working capital concept, however, is also important for
following reasons:
It is qualitative concept, which indicates the firm’s ability to meet to its operating expenses
and short-term liabilities.
I. It indicates the margin of protection available to the short term creditors.
II. It is an indicator of the financial soundness of enterprises.
III. It suggests the need of financing a part of working capital requirement out of the
permanent sources of funds.
38. 38
8.2 Types of Working Capital:-
The term working capital is broadly classified under two heads as under:-
a) On the basis of concepts
b) On the basis of time
(a) On the basis of Concepts:-
On the basis of concepts the working capital is divided in two types. They are :
i) Gross Working Capital:-
The gross working capital refers to investment in all the current assets taken
together.The total of investments in all current assets is known as gross working
capital.
ii) Net Working Capital:-
The term net working capital refers to excess of total current assets over total
current liabilities.
b) On the basis of time :-
From the point of view of time, the working capital can be divided into two
categories:
i) Permanent Working Capital:-
It also refers to Hard core working capital. It is that minimum level of investment in
the current assets that is carried by the business at all the times to carry over minimum
level of its activities.
ii) Temporary Working Capital:-
It refers to that part of working capital, which is required by a business over &
above permanent working capital. It is also called variable working capital. Since the
volume of temporary working capital keeps on fluctuating from time to time according
to business activities it may be financed from short-term sources.
39. 39
8.3 Factorof working capital:-
The total working -capital requirement is determined by a wide variety of factors. It
should be noted that these factors affect different enterprises differently.
The following is the description of the factors, which generally influence the working
capital requirements of the firms.
A) Internal Factors:-
1) Nature of Enterprise-
The working capital requirements of a firm basically influenced by the nature of its
firm. For example, trading and financial firms require a lower investment in working
capital but in the case of manufacturing concern. have to invest substantially in working
capital.
2) Production Cycle
Longer the manufacturing process the higher would be the requirements of working
capital. This is the reason why highly capital-intensive industries require a large
amount of working capital to run their sophisticated and long production process.
B) External Factors:-
1) Business Cycle Fluctuations-
Business fluctuations lead to cyclical and seasonal changes in production and sales and
affect the working capital requirements. Most firms experience seasonal and cyclical
fluctuations in the demand for their products and services.
These business variations affect specially the temporary working capital requirements
of the firm.
2) Supply Conditions-
The inventory of raw materials, spares and stores depends on the condition of supply.
If the supply is prompt and adequate the firm can manage with small inventory hence
the lower requirements of working capital.
If the supply is unpredictable the firm, would have to acquire stocks as and when
they are available and carry the inventory for longer period. This policy is followed
when the raw material is available only seasonally.
3) Technological Development-
Changes in technologies may lead to improvements in processing raw materials,
minimizing wastages, greater productivity, more speed of production. All these
improvements may enable the firm to reduce investments in inventory. Thus changes in
technology affect the requirements of working capital.
40. 40
8.4 Importance of working capital:-
The management of working capital plays an important role in the maintaining the
financial health of the firm during the normal course of business.
A study of working capital is of major importance of internal and external analysis
because of its relationship with the current day to day operations of business.
The study of management of working capital covers areas like cash management,
Accounts receivables, inventory and other concerned areas. Thus, working capital is of
paramount importance to a firm's financial performance.
41. 41
8.5Operating Cycle: -
The term operating cycle is also known as 'Cash Cycle'. The term capital cycle or
operating cycle refers to the length of time between the firms paying cash for raw
materials, applying those materials into production process, stock and inflow of cash
from debtors.
The operating cycle is the average time between purchasing or acquiring inventory
and receiving cash proceeds from the sale of finished products.
The operating cycle consists of the following events which continues throughout the
life of business
Conversion of cash into raw materials;
Conversion of raw materials into work in progress;
Conversion of work in progress into finished products;
Conversion of finished products into account receivables through
sales;
Conversion of account receivables into cash
Account Receivables Sales
Cash Finished Production
Raw Materials Work in process
Operating Cycle of Working Capital
Thus there is complete cycle form cash to cash wherein cash gets converted into
raw materials, work-in-progress, finished products, debtors and finally into cash again.
Operating cycle formula:-
OC = O = R + W + F + D – C
Where;
O = Duration of operating cycle
R = Raw material conversion period
42. 42
W = Working capital conversion period
F = Finished goods conversion period
D = Debt collection period
C = Credit payment period
Average raw material stock
1) R = * 365
Total raw material consumption
Average work inprogress
2) W = * 365
Total cost of production
Average finishedgoods
3) F = * 365
Total cost of goods sold
Average receivable
4) D = * 365
Total credit sale
Average creditors
5) C = * 365
Total credit purchase
44. 44
DATA ANALYSIS AND INTERPRITATION
RATIO:
Ratios are the comparison between two quantitative terms in statistics. These ratios
when used for quantitative information which are connected with each other, expressed
in mathematical terms, is called accounting ratios. Analysis and interpretation of
various accounting ratio gives a better understanding of the financial condition and
performance of a business concern.
To be more precise financial ratios are the ratios used for the analysis purpose with the
use of financial statements like Balance sheet, P & L Statement, etc. Any related term
in the statement that can come to a conclusion can be compared and Analysis can be
done. Ratio analysis is one of the techniques of financial analysis to evaluate the
financial condition and performance of a business concern. It puts the information from
a financial statement into perspective, helping to spot financial patterns that may
threaten the health of the company. Ratios are also very useful for making comparisons
between businesses within industry. For example, profit shown by two-business
concern is Rs. 50,000 and Rs. 100,000. It is difficult to say which business concern is
more efficient unless figures of capital investment or sales are also available.
Financial statement ratio analysis focuses on three key aspects of a
business:
a) Liquidity
b) Profitability
c) Coverage
45. 45
a) Liquidity Ratios:-
i) Current ratio:
Current Ratio =
Current Assets
Current Liabilities
Interpretation:- The current ratio of the company is very high i.e. 2.78 which is very
good but on the other hand the company is not able to manage its assets which are 3
times its liability. Company can work out in managing the debtors that are Bills
Payable and should also look on in reducing the finished goods holding to bring down
the current ratio.
0
0.5
1
1.5
2
2.5
3
2013-14 2014-15 2015-16
Ratio
Current Ratio
Particulars 2013-14 2014-15 2015-16
Current Asset Cr. 250.43 319.79 605.23
Current Liability Cr. 122.93 192.62 217.66
Current Ratio 2.02 1.66 2.78
46. 46
ii) Quick Ratio:
Interpretation:- Quick Ratio of the company is 0.63 which determines how quick the
company can liquidate its assets into liquid form is impressive. Companies with
ratios of less than 1 cannot pay their current liabilities and should be looked at with
extreme caution and then it may indicate that the company needs to establish a line of
credit with a financial institution to ensure the company has access to cash when it
needs to pay its obligations.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2013-14 2014-15 2015-16
Quick Assets =
Quick Assets
Current Liabilities
Quick Assets
=
( Cash + Receivable + Loan & Advance )
Current Liabilities
Particulars 2013-14 2014-15 2015-16
Quick Asset Cr.
87.91 104.25 137.8
Current Liability Cr. 122.93 195.62 217.66
Quick Ratio
0.71 0.54 0.63
47. 47
iii) Proprietary Ratio :-
Proprietary Ratio =
Proprietary Fund
Total Assets
Interpretation:- The Proprietary Ratio of the company is 0.55 which Total Assets
which is very good for managing the working of the company. The higher the ratio the
more the company earns, the above figure is also a good margin that is managed. It
measured the percentage of each sale rupee remaining after the firm has paid for its
goods
0.4
0.42
0.44
0.46
0.48
0.5
0.52
0.54
0.56
2013-14 2014-15 2015-16
Particulars 2013-14 2014-15 2015-16
Proprietary Fund Cr
248.91 407.29 648.63
Total Assets Cr
530.16 776.19 1178.18
Proprietary Ratio 0.46 o.52 0.55
48. 48
b) Profitability Ratios:
i) Gross profit :-
Gross Profit
Gross Profit Ratio = -------------------------X 100
Sales
Particulars 2013-14 2014-15 2015-16
Gross Profit Ratio Cr. 120.22 202.52 229.16
Net sale Cr. 847.87 966.12 1088.37
Gross Profit Ratio 14.17% 20.96% 21.05%
Interpretation:- The profit margin ratio of the company is 21.05% which come Net
Sales which is very good for managing the working of the company. The higher the
ratio the more the company earns, the above figure is also a good margin that is
managed. It measured the percentage of each sale rupee remaining after the firm has
paid for its goods.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
2013-14 2014-15 2015-16
AxisTitle
Axis Title
49. 49
ii) Return on Total Assets (ROI):
Net Profit
Return on Total Assets = ----------------------X 100
Total Assets
Interpretation:- Return on Assets of company indicated is very low, this ratio is
affected by Gross profit and assets turnover. The profitability ratio is measured in terms
of the relationship between net profit and assets.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
2013-14 2014-15 2015-16
Particulars 2013-14 2014-15 2015-16
Net Income Cr. 63.98 122.23 140.12
Total Asset Cr. 530.16 776.19 1178.37
Return on Total Asset 12.06% 15.74% 11.89%
50. 50
iii) Operating Ratio:
Cost of goods sold – Operating Exp
Operating Ratio: = --------------------------------------------------X 100
Sales
Particulars 2013-14 2014-15 2015-16
cost of goods sold Cr. 727.65 763.60 859.21
sales Cr. 847.87 966.12 1088.37
Operating Ratio 0.85% 0.79% 0.78%
Interpretation:- The Operating Ratio of the company is 0.78 which comes Net Sales
which is very good for managing the working of the company. The higher the ratio the
more the company earns, the above figure is also a good margin that is managed. It
measured the percentage of each sale rupee remaining after the firm has paid for its
goods.
0.74%
0.76%
0.78%
0.80%
0.82%
0.84%
0.86%
2013-14 2014-15 2015-16
51. 51
C) Coverage Ratio:
i) Receivable Turnover:
Receivable Turnover =
Sales
Total Receivable
Interpretation: - The collection of debtors for the company is lacking to some extent.
Company should work on to have time to time collection for debtors which will help to
manage debts on time. The receivable turnover ratio is just 3.24 which has to be further
improved. This improvement will also help in improving return on assets.
0
1
2
3
4
5
6
7
8
2013-14 2014-15 2015-16
Particulars 2013-14 2014-15 2015-16
sale Cr. 847.87 966.17 1088.37
Total Receivable Cr. 117.98 180.98 355.52
Receivable Turnover Times 7.18 5.33 3.24
52. 52
ii). Working Capital Turnover Ratio=
Working Capital Turnover
Ratio
=
Sales
Working Capital
(Values in Crore.)
Interpretation: - The working capital turnover ratio in the year 2013-14 by
6.89 time. But next year 2014-15 is a decreases to compare last year, we
observes that year 2014-15 and 2015-16 constant to working capital turnover
ratio.
Particulars 2013-14 2014-15 2015-16
sales 847.87 966.17 1088.37
Working Capital 122.93 192.62 217.66
Working Capital Times 6.89 5.01 5
0
1
2
3
4
5
6
7
8
2013-14 2014-15 2015-16
53. 53
iii)Debtors Turnover Ratio :
Debtors Turnover Ratio =
Average Accounts Receivable
Credit Sale
Particulars 2013-14 2014-15 2015-16
Average Account Receivable 58.99 90.49 167.76
Credit Sale 847.47 966.17 1088.37
Debtors Turnover Ratio 0.06 0.09 0.15
Interpretation: - The Bhansali trailers Pvt Ltd the situation is average.But in 2013-14
up to 0.06 which was not good for the company. 2014-15 is a 0.09 i.e inceasing to
compear last year, but we observe that year 2015-16 is a 0.15 which is a good for the
company.
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
2013-14 2014-15 2015-16
54. 54
iv)Inventory Turnover Ratio:
Interpretation:- Inventory turnover ratio of the company is 4.39 Time which is good
ratio. The company can still work on to increase the ratios which will be beneficial for
the company. This ratio is also related to current ratio and return on assets ratio. If
company could try to manage this ratio, then it can help the profitability ratio to boost.
0
1
2
3
4
5
6
7
8
9
2013-14 2014-15 2015-16
Inventory Turnover =
Cost Of Goods Sold
Average Inventory
Particulars 2013-14 2014-15 2015-16
Cost Of Goods sold 727.65 763.6 859.21
Average Inventory 94.99 91.88 195.62
Inventory turnover Times 7.66 8.31 4.39
55. 55
d) Operating cycle formula:-
OC = O = R + W + F + D – C
Where;
O = Duration of operating cycle
R = Raw material conversion period
W = Working capital conversion period
F = Finished goods conversion period
D = Debt collection period
C = Credit payment period
Average raw material stock
6) R = * 365
Total raw material consumption
Average work inprogress
7) W = * 365
Total cost of production
Average finishedgoods
8) F = * 365
Total cost of goods sold
Average receivable
9) D = * 365
Total credit sale
Average creditors
10) C = * 365
Total credit purchase
56. 56
i)Operating cycle for year 2013-14
As per above formula,
Average raw material
1) R = * 365
Total raw material consumption
94.99 cr
= * 365
542.55 cr
R = 64 Days
Average work inprogress
2) W = * 365
Total cost of production
102.93 cr
= * 365
127.48 cr
W = 59 Days
Average finishedgoods
3) F = * 365
Total cost of goods sold
123.93 cr
= * 365
723.65 cr
F = 62 Days
Average receivable
4) D = * 365
Total credit sale
57. 57
107.98 cr
= * 365
847.87 cr
D = 46 Days
Average creditors
5) C = * 365
Total credit purchase
108.67 cr
= * 365
526.01 cr
C = 75 Days
OC = 64 + 59 + 62 + 46 – 75
OC = 156 Days
58. 58
ii) Operating Cycle for 2014-15
Average raw material
1) R = * 365
Total raw material consumption
91.88 cr
= *365
564.53 cr
R = 59 Days
Average work inprogress
2) W = * 365
Total cost of production
104.62 cr
= * 365
747.59 cr
w = 51 Days
Average finishedgoods
3) F = * 365
Total cost of goods sold
183.06 cr
= * 365
763.60 cr
F = 87 Days
Average receivable
4) D = * 365
Total credit sale
59. 59
180.98 cr
= * 365
966.12 cr
D = 68 Days
Average creditors
5) C = * 365
Total credit purchase
120 cr
= * 365
52.67 cr
C = 78 Days
OC = 59 + 51 + 87 + 68 – 78
OC = 187 Days
60. 60
iii)Operating Cycle2015-16
Average raw material
1) R = * 365
Totalraw material consumption
195.62 cr
= *365
996.40 cr
R = 102 Days
Average work inprogress
2) W = * 365
Total cost of production
217.66 cr
= *365
811.42 cr
W = 97 Days
Average finishedgoods
3) F = * 365
Total cost of goods sold
204.18 cr
= * 365
859.21 cr
F = 86 Days
Average receivable
4) D = * 365
Total credit sale
155.52 cr
= * 365
61. 61
1088.37 cr
D = 52 Days
Average creditors
5) C = * 365
Total credit purchase
137.14 cr
= * 365
840.58
C = 60 Days
OC = 102 + 97 + 86 + 52 – 60
OC = 277 Days
62. 62
Operating Cycle
Sr. no Year OC
1 2013-14 156 Days
2 2014-15 187 Days
3 2016-17 277 Days
e) Interpretation:-
The Bhansali trailers Pvt. Ltd. Operating Cycle in the year 2013-14 is
156 Days, in 2014-15 is 187 Days and in 2015-16 is 277 Days. So we
can observethat in year 2013-14 is best year for the company.
0
50
100
150
200
250
300
2013-14 2014-15 2015-16
Operating Cycle
63. 63
WORKING CAPITAL ANALYSIS OF BHANSALI TRAILERS PVT.LTD.
WORKING CAPITAL
In Cr
Particular 2013-14 2014-15 2015-16
A) Current Assets
1) Inventories 94.99 91.88 195.62
2) Debtors 67.53 123.66 271.81
3) Bills Receivable 50.45 57.32 63.71
4) Cash & Bank Balance 4.08 5.47 7.59
5) ) Loans & Advance 33.38 41.46 66.5
Total Current Assets 250.43 319.79 605.23
B) Current Liabilities
1) Current Liabilities 108.67 120.89 137.14
3) Provision 14.26 71.73 80.52
Total Current Liabilities 122.93 192.62 217.66
Net Working Capital (A - B ) 127.5 127.17 387.57
64. 64
Interpretation:-
The working capital of bhansali trailers Pvt. ltd. 2013-14 is 127.5Cr for 2014-15 is a
127.17 Cr is constant same two year. But as compare to year 2014-15 we observed that,
working capital is increase i.e. 387.57 Cr.
127.5 127.17
387.57
0
50
100
150
200
250
300
350
400
450
2013-14 2014-15 2015-16
Working Capital
Amount(Cr.)
66. 66
FINDING
I. Current assets for the year 2015-16 is increases and it is good condition for the
company and current liabilities of the company is decreased by 217.66 cr that’s
shows the working capital of the company is increased.
II. Current ratio (C.R) of fiscal year 2013-14 to 2015-16 showed slightly increase
i.e. 2.2 to 2.78. But in fiscal year 2013-14 C.R decreased comparatively in
deposits and in fiscal year 2015-16 C.R is again increase 2.78 due to increase in
factors which influence it.
III. The quick ratio shows the company liquidity position is decrease in 2014-15
and it has again increase in 2015-16 i.e. 0.71, o.54 and o.63.
IV. The total assets is increase in year by year i.e. 530.16 cr, 776.19 cr and 1178.18
cr. And also proprietor ratio is increase i.e 0.55
V. The debtor’s turnover ratio was very less in the year 2013-14 at 0.06 times, but
them it has increased to 0.09, 0.15 times in the year 2014-15 and 2015-16. This
shows that the company is making all the offers to speed up the collection
process.
VI. The working capital turn over ratio in 2013-14 is 6.89, in 2014-15 is 5.01 and in
2015-16 is 5 it shows the working capital of the company is decrease in year by
year.
VII. The company return on assets ratio in 2013-14 is 11.06%, in 2014-15 is 15.74%
and in 2015-16 is 11. 89% it is shows the return on assets is in 2014-15 is
increase and it has again decrease in 2015-16.
VIII. In the year 2013-14 the Operating Cycle shows the less requirement of Days i.e.
156 ..
IX. Bhansali Trailers Pvt Ltd good pay very rapidly to its creditors, it is
positive point of Bhansali Trailers Pvt Ltd.
X. Looking to the annual reports & analysis Bhansali Trailers Pvt Ltd. is
good progressing and bright future of the company.
XI. When comparing Working capital is compared with net sales it is in
increasing trend indicating the effective utilization of the net working
capital.
68. 68
Conclusion
As I made the project on Working Capital Management & I found it a
very challenging task.
A study of the Working Capital Management is of major importance to
internal and external analysis because of its close relationship with the
day to day operations of a business.
Working Capital may be regarded as the life blood of the company or 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 or
profit,
but also to the ultimate downfall of otherwise might be considered as
thee promising concern.
As the operating cycle of the company continuously increasing, so
excess amount of fund are getting long term an it is hampering the profit
company because high operating cycle the efficiency of working capital
decreasing.
70. 70
Suggestions
Management of the company would be interested in every aspect of the
financial analysis. It is their overall responsibility to see that the firm’s
resources are most effectively and efficiently utilized to ensure a sound
financial position of the company.
The company has able to repay the liability of the creditors because the
profit of the company has increased every year
The company should decrease operating cycle period , because company
has get maximum days in last two year.
The present study observed that the position of Bhansali Trailers pvt.ltd.
Industries LTD. is satisfactory except in cash management. Considering
the significant role of Bhansali Trailers pvt.ltd. Industries LTD.
There is an increase in the current ratio suggesting that there may be idle funds
with the company. It is therefore recommended that the company should invest
the excess cash in marketable securities. This would be more profitable than
holding idle cash.
The variations were very high in the cash position of Bhansali Trailers
pvt.ltd. Industries LTD. and the cash resources are not use properly. So
the study suggests that the cash resources must be used effectively and
by better way.
The company should try to reduce its inventory holding to lower down the
holding cost & increase its Raw Material Turnover. It can also help in lower
down the operating cycle.
The study suggests that the other factor of working capital management
like Inventory Management, Receivables Management, Payables.
Management are running effectively in Bhansali Trailers pvt.ltd.
Industries LTD. So the efforts must be given to maintain the current
trend in future.
72. 72
LEARNING THROUGH PROJECT
To study the liquidity position through various working capital related cash
management, inventory management.
It may be understood as a science of studying now research is done
systematically.
As we know working capital is the life blood and the centre a business.
I understand every business need fund for two purpose for its established and to
carry out its day to day operation.
It is need of financial a part of working requirement.
76. 76
WORKING CAPITAL ANALYSIS OF BHANSALI TRAILERS
PVT.LTD..
WORKING CAPITAL
In Cr
Particular 2013-14 2014-15 2015-16
A) Current Assets
1) Inventories 94.99 91.88 195.62
2) Debtors 67.53 123.66 271.81
3) Bills Receivable 50.45 57.32 63.71
4) Cash & Bank Balance 4.08 5.47 7.59
5) Loans & Advance 33.38 41.46 66.5
Total Current Assets 250.43 319.79 605.23
B) Current Liabilities
1) Current Liabilities 108.67 120.89 137.14
3) Provision 14.26 71.73 80.52
Total Current Liabilities 122.93 192.62 217.66
Net Working Capital (A - B ) 127.5 127.17 387.57
