The document discusses the study of working capital management in Bajaj Allianz Life Insurance, focusing on the definitions, components, and importance of working capital. It analyzes the company's financial statements over four years, highlighting trends in current assets, current liabilities, and liquidity ratios, concluding that effective working capital management plays a crucial role in the company's financial performance. The findings indicate an overall positive trend in working capital, emphasizing the importance of balancing profitability, risk, and liquidity.

1. “ STUDY OF WORKING CAPITAL
MANAGEMENT IN BAJAJ ALLIANZ
LIFE INSURANCE”

2. INTRODUCTION
 Finance is a field that deals with the study of
investments. It includes the dynamics of assets
and liabilities over time under conditions of
different degrees of uncertainty and risk. Finance
can also be defined as the science of money
management. Finance aims to price assets based
on their risk level and their expected rate of
return.

3. WORKING CAPITAL
 Working capital is the amount of a company's
current assets minus the amount of its current
liabilities.
 The overall success of the company depends upon
its working capital position. So it should be handled
properly because it shows the efficiency & financial
strength of a company.

4. DEFINITIONS OF WORKING CAPITAL
 Working capital represents the total of all current assets.
. In other words it is the Gross working capital, it is also
known as Circulating capital or Current capital for
current assets are rotating in their nature
 Working capital is defined as the excess of current
assets over current liabilities and provisions. In other
words it is the Net Current Assets or Net Working
Capital.

5. CONCEPTS
OF WORKING
CAPITAL
Gross working
capital
Net working
capital

6. GROSS WORKING CAPITAL
Total current assets are working capital which presents
both owned capital as well as loan capital used for
financing current assets.
It includes cash, short-term securities and receivables
inventories. These assets can be converted into cash
within a year.
Another name of gross working capital is circulating
capital. Circulating capital means circular flow of cash.
This is also called operating cycle in case of
manufacturing firm.

7. Debtor
Cash
Raw
material
Work-in-
progress
Finished
goods

8. NET WORKING CAPITAL
 Net working capital represents the excess of total
current assets over total current liabilities.
 Net working capital may be positive or negative
according to the size of current assets and current
liabilities.
 Net working capital = Current assets – Current
liabilities

9. OBJECTIVES OF WORKING CAPITAL
 Meet day to day cash flow needs;
 Pay wages and salaries when they fall due;
 Pay creditors to ensure continued suppliers of
goods and services;
 Pay government taxation and providers of cash
dividends; and
 Ensure the long term survival of the business entity

10. Importance of working capital
Growth and
Expansion
Operating
Efficiency
Price Level
Changes
Other
Factors

11. Determinants of
working capital
Nature and
size of
business
Manufacturing
Cycle
Production
Policy
Credit Policy
Availability of
Credit
Level of Taxes

12. FinancingofWorkingCapital
Long-term financing
Ordinary share,
Debenture, Preference
share; retained
earnings and long-term
debt of financial
institution.
Short-term financing
Bank credit, overdraft
arrangement,
commercial paper

13. APPROACHES TO MANAGING
WORKING CAPITAL
Conventional
This approach implies
managing the individual
components of working
capital efficiently and
economically so that
there are neither idle no
funds or paucity of
funds.
Operating cycle
The working capital is
determined by the
duration of the
operating cycle and the
operating expenses
needed for completing
the cycle.

14. ADEQUACY OF WORKING CAPITAL
 When working capital is managed improperly, allocating
more than enough of it will render management non-
efficient & reduce the benefits of short term investments.
 On the other hand, if working capital is too low, the
company may miss a lot of profitable investment
opportunities or suffer short term liquidity crises, leading
to degradation of company credit, as it cannot respond
effectively to temporary capital requirements

15. COMPANY PROFILE
 Bajaj Allianz Life Insurance is a union between
Allianz SE, one of the largest Insurance Company
and Bajaj Finserv.
 Bajaj Allianz Life Insurance Co. Ltd. was
incorporated on 12th March 2001.

16. VISION
• To be the
first choice insurer
for customers.
• To be the
preferred employer
for staff in the
insurance industry.
• To be the
number one insurer
for creating
shareholder value.
Awards
Golden globe
tigers award 2017.
BBC knowledge
award for best
social media.
“Company with
highest claim
settlement” award
at ABP news BFSI
award 2017

17. NEED FOR THE STUDY
 The need for working capital management arises due to the time
gap between production and realisation of cash from sales.
 It helps to maintain proper balance between profitability, risk and
liquidity of the business significantly.
 By managing the working capital, current liabilities are paid in
time.
 The management of working capital helps to manage all the
factors affecting the working capital in the most profitable
manner.

18. OBJECTIVES
 To study the concept of working capital & components of
working capital.
 To study the change of working capital.
 To study the profitability, liquidity & working capital position
of the company.

19. RESEARCH METHODOLOGY
Data collection plays a very crucial role in the
statistical analysis. In research, there are
different methods used to gather information,
all of which fall into two categories, i.e. primary
data, and secondary data.
For this project secondary sources used are:
Annual report of the company
Company website
Books

20. The sampling unit and size used in this
project are
Sampling unit:
Financial statement & audit report
Sampling size:
Last four year financial statement

21. PRESENTATION TOOLS
Presentation tools are used to make
data understandable in easy way so, any
person can easily understand the figures
and less time are consumed to analyse
the data. Presentation tools helps in
showing data in attractive and eye
catchy way.

22. ANALYSIS AND INTERPRETATION

23. COMPONENTS OF CURRENT ASSETS
 Current assets refer those assets that are cash or
can be converted into cash within a year.
 The composition of current assets or the main
components of current assets at Bajaj Allianz Life
Insurance Company are cash and bank balance,
loan and advances and government securities.

24. Particulars 2017 2016 2015 2014
Cash & bank 6,145,345 3,397,183 4,523,360 7,320,635
Loan & advances 150,129 261,088 319,602 440,460
Other current
assets
19,189,592 11,840,366 11,788,976 10,569,419
Total 25,485,066 15,498,637 16,631,938 18,330,514

25. OTHER ASSETS INCLUDE:
 Income accrued on investments
 Outstanding premiums
 Agents' balances
 Foreign agencies balance
 Due from other entities carrying on insurance
business (Including amount due from re-insurers)
 Due from subsidiaries/holding company
 Deposit with reserve bank of India
 Unsettled investment contracts-receivable
 Service tax unutilised credit
 Advance against service tax liability
 Unit receivable
 Assets held to cover unclaimed funds

26. 0
5000000
10000000
15000000
20000000
25000000
30000000
2017 2016 2015 2014
cash & bank
loan & advances
other assets
total

27. COMPONENTS OF CURRENT LIABILITIES
 Current liabilities is a short-term obligation which is
payable within a year.
 The composition of current liabilities or the main
components of current liabilities. Tax provision, staff
bonus, proposed dividend payable and other
liabilities are included in other current liabilities.
Particulars 2017 2016 2015 2014
Creditors 282,999 478,930 556,564 2,890,118
Other current
liabilities
17,734,704 11,789,991 14,688,735 10,437,140
Provisions 4,676,048 4,360,683 3,995,464 3,228,044
Total 22,693,751 16,629,604 19,240,763 16,505,302

28. 0
5000000
10000000
15000000
20000000
25000000
2017 2016 2015 2014
creditors
other current
liablities
provisions
total

29. WORKING CAPITAL OF BAJAJ ALLIANZ LIFE
INSURANCE COMPANY
Year Current assets Current liabilities Net working capital
(C.A.-C.L.)
2017 25,485,066 22,693,751 2,791,315
2016 15,498,637 16,629,604 (1,130,967)
2015 16,631,938 19,240,763 (2,608,825)
2014 18,330,514 16,505,302 1,825,212

30. -5000000
0
5000000
10000000
15000000
20000000
25000000
30000000
2017 2016 2015 2014
current assets
current liablities
net working capital

31. LIQUIDITY RATIOS
 Current ratio:
This ratio indicates the short-term solvency position of
bank. In other words current ratio indicates better
liquidity position. It is calculated as follows:
Current assets (CA)
Current liabilities (CL)

32. 1.11
0.86
0.93
1.12
0
0.2
0.4
0.6
0.8
1
1.2
2014 2015 2016 2017
current ratio
current ratio

33. CASH TO CURRENT ASSETS
 The cash and bank balance is almost liquids from
the current assets; this ratio shows the percentage
of readily available fund within the banks. It can be
calculated by dividing cash and bank balance by
current assets, which is given below.
Cash and bank balances
Current assets

35. CASH RATIO
Cash ratio is calculated as a total of cash, bank,
marketable securities divided by current liabilities.
Ideally, a company would want to have cash ratio
greater than or equal to 1. So that company can pay
current liabilities.

36. 0.44
0.23
0.2
0.27
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
2014 2015 2016 2017
ratio
ratio

37. FINDINGS
 Current assets decline during the fiscal year 2015 &
2016 whereas current liabilities increases in year
2015 and then there is decrease in current liabilities
in fiscal year 2016 which results decline in net
working capital during fiscal year 2015 & 2016.
 In the fiscal year 2016-17, there is 64.43%
increment in current asset during 2016 to 2017 and
current liabilities also increases by 36.46% from
2016 to 2017 which result increase in working
capital due to excess of current assets over current
liabilities.

38.  Current ratio decline during the fiscal year 2014-15, and
then there is slightly increase in current ratio from 0.86 to
0.93 during 2015 to 2016. In the fiscal year 2016-17,
current ratio is 1.12 which is highest in all the four years.
 Cash to current assets ratio is higher in 2014 i.e. 0.39
and then there is fall in ratio from 0.27 to 0.21 during
fiscal year 2015 to 2016. In 2017, the ratio increase to
0.24.
 Cash ratio is higher in 2014 i.e. 0.44 and then there is
decrease in cash ratio in 2015 & 2016. In fiscal year
2017, there is slight increment in ratio from 0.2 to 0.27.

39. CONCLUSION
Working capital is considered to be an important tool for
progress. Working capital management techniques are
playing significant role in assisting the management for
decision making. The study of working capital
management at Bajaj Allianz Life Insurance Pvt. Ltd. is
found to be very effective. The working capital contains the
management of Cash, Debtors, and creditors. The Bajaj
Allianz Life Insurance Pvt. Ltd has profit oriented company
.The profit of the company will be increases every year
.The company has able to the repay the amount of the
creditor.

40. REFRENCES
Most of the information was collected from the internet
and annual reports from various websites, they are as
follows:
• www.bajajallianzlife.com
• www.financialanalysishub.com
• www.readyratio.com
• www.moneycontrol.com
• www.brighthub.com
• Annual reports:
*The orbit (2016-17)
*15th annual report (2015-16)
*Annual report (2014-15)
*Annual report (2013-14