This document outlines the objectives, tools, and limitations of a working capital management study conducted at Tata Steel. The objectives are to maintain an appropriate level of working capital, understand Tata Steel's working capital techniques, analyze the effectiveness of its controls, and compare its position to other industry players. Data was collected from primary sources like interviews and secondary sources like annual reports. Ratios were calculated and companies compared from 2009-2014. Limitations include different accounting policies across companies and limited data from 5 years. Key findings show Tata Steel converts materials to cash in 26 days, collects debt in 7 days but pays suppliers after 299 days on average. It is recommended Tata Steel address decreasing profits and increasing liabilities.

1. SUKANYA DASGUPTA
(55)
Working capital management

2. Objective
 Maintenance of working capital at appropriate level.
 Availability of ample funds as and when they are
needed.
 To understand the concept ofWorking Capital
Management.
 To understand the techniques and process ofWorking
Capital Management atTata Steel.
 To analyze the effectiveness and efficiency of existing
working capital control system.
 To compare the working capital position ofTata Steel
with other players in the industry.
 To find out areas of weakness, if any.

3. Tools
Data is collected both from primary and secondary sources.
 Primary Sources:
1. Discussion with experts
2. Department visits
3. Data from accounts and finance department
 Secondary Sources:
1. Annual Reports
2. Journals and Books
3. Research articles
4. Websites
5. Intranet of Tata Steel

4. Ratios

5. Comparison

6. WORKING
CAPITAL
-10,000.00
-5,000.00
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
2009-10 2010-11 2011-12 2012-13 2013-14
Tata Steel
Jindal
Sail
0
50
100
150
200
250
300
350
2009-10 2010-11 2011-12 2012-13 2013-14
Debtors Collection
Period
Creditors Deferral
Period

7. Limitations
 The companies which are taken for the purpose of comparison may or
may not follow the same accounting policies, which Tata Steel is
currently following.
 The study is limited to five financial years i.e. from 2009 to 2014.
Conclusions and recommendations are based on such limited data.
 The scope and area of this study is limited to general office of Tata
Steel Jamshedpur only.
 The data used in this study is taken from the financial statement and
their related schedules of the companies’ standalone.
 This project has completed with annual reports; it just constitutes one
part of data collection i.e. secondary. There were limitations for primary
data collection because of confidentiality.

8. Findings & Recommendations
 Tata steel has a net operating cycle of 26 days which means that
the company converts its raw material into cash within 26 days.
 Company has an aggressive credit policy. Debtor’s turnover
ratio is 53.21, and the company collects money from its debtors
within 7 days.
 Tata steel makes the payments to its suppliers after 299 days on
an average.
 Tata steel’s profit is decreasing which is a matter of concern so
the company must take adequate measures.
 Tata Steel should also take some measure to control increasing
current liabilities.
 Tata steel uses EOQ method to place the order for raw material
(coking coal, coal, limestone, dolomite, iron ore), in order to
avoid unnecessary investment.
 Tata Steel uses FIFO method for the management and valuation
of its raw material for production.

9. Thank you