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WORKING CAPITAL MANAGEMENT OF BAHETY CHEMICALS & MINERALS PVT. LTD., DANDELI. INDEX TABLE pixia-club.info CONTENTS PAGE NO. 1 PART – I 2 . report on “working capital management in hcl infosystems limited” by (submitted in partial fulfillment of the requirements of mba program at icfai business. This project has been done on a Working Capital Management in Bharti Airtel. Services Ltd. It was complicated but exiting as well to do a project on a company.

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Please this pdf send me [email protected] A project report submitted to Jawaharlal Nehru university Kakinada in; 7. declare that the project report entitled “WORKING CAPITAL MANAGEMENT” have been. Project Report on "Working Capital Management" Absolutely FREE ◇◇◇ http: //pixia-club.info 1 week ago Reply. Are you sure. The title of the report is “Working Capital Management and Its This project paper starts with the objective of the study and the methodology. http://www. pixia-club.info [Accessed 2.

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It is a colourless solid, which is soluble in water but insoluble in alcohol. Dyeing and purification, Water treatment. The company is planning to produce alum ferric solid through conventional process, Boiler evaporation of water from liquid alum. Estimated investment in expansion process is Rs 27 Lacks. Expansion of the company is likely to give 10 — 12 employment opportunities. The company is also planning to diversify.

It is planning to manufacture crystal alum for which the market is better Swimming pools are one of the markets for crystal alum. The estimated investment required starting up producing crystal alum is Rs. The workers in Bahety Chemicals and Minerals are given some facilities for their.

Betterment and comfort. Facility for washing, storing, drying materials, resting first aid facilities have been provided inside the factory for the benefits of workers on duty. The company has made provision of clean, drinking water providing to the workers during the working hours.

There are drinking taps and coolers placed in every department. After the working hours to take rest rooms have been made by the company and to have food in lunchtime. Canteen is also provided to the workers. As the raw materials are brought in Lorries, there is a proper facility to park them and unload them. Availability of manpower. High quality product.

Low price high quality.

Availability of raw materials. Heavy transport charges. Major consumption in paper industries but limited paper industries in Karnataka. Technological up gradation. Foreign market expansion. Online ordering process. Product expansion. Market expansion. Entry of competitors. Product substitution.

The purchase officers and assistance head the purchase department. The clearly take the requisition from various departments and forward to the purchase offices and then the purchase officer arranges to the purchase required materials from the best seller available in the market.

The purchase department plays a very important role in the company where the dealing made between the purchase officers and sellers is convenient then it can be help in reduction of the price of the materials and their by which will also result in increase of profit.

Laboratory is also one of the important department here because this department is used for testing the raw materials and the finished goods for their quality. There is a lab incharge that looks after all the functions of the laboratory.

Lab incharge has certain other workers under him who help him in executing his functions. The Production department is one of the important department in the company.

It is the department that produces the product on which the company is established. Special care is taken in this department on production. List of critical raw materials presently in the production of Alum. The company is engaged in the production of three types of Alum they are 1.

Viz ferric alum. Viz liquid ferric alum. When the complete raw materials are together, exothermic reaction takes place. Lot of steam and heat is evolved in the process. After about an hour time viscous Ferric Alum Is ready in the reactor. Ferric Alum is either sold in blocks form or broken into pieces and bagged as per requirement of the customers. After about an hour time viscous Liquid Ferric Alum Is ready in the reactor.

The viscous Liquid Ferric Alum is discharged through the outlet of the reactor through hose pipe into tank.

Working Capital Management of a Manufacturing Company(Project Report,M.B.A)

Liquid Ferric Alum is sold in tank form to the customers. After about an hour time viscous Non-ferric Alum Is ready in the reactor. Non-ferric Alum is either sold in blocks form or broken into pieces and bagged as per requirement of the customers.

Administration Department takes care of the whole activities happening in and around the company. The personal manager heads the department and personal managers is responsible for the man power in the whole factory. Personal Manager is concerned with the most efficient use of people to achieve organization and individual goals. It is the way of managing people at work so that they give the best to the organization.

Administration department also takes care of the planning, organizing, directing, controlling, procuring and developing and integrating of the company and human resources to the end. It also looks after the financial matters of the company. Finance is an essential component of the business to maintain its operations effectively. This dept. Since BCM is the small scale industry it maintains very good accounting system, The whole financial matter is mainly dealt by the separate dept called finance dept.

The Major sources of finance are, 1. Shares Equity Shares 2. Loan from corporation banks. Marketing Department is also a one of the important department in the company.

This department is important because it gives a clear picture of how much to produce? Which will also help in the investment to he made and to purchase department to purchase raw materials.

The marketing department has a procedure, by which it is done i. Marketing department also take care of the time given to it by the buyer to produce the product. Research methodology is a way to systematically solve the research problem. It May be understood as a science of studying now research is done systematically. In that various steps, those are generally adopted by a researcher in studying his problem along with the logic behind them. Analytical Research is defined as the research in which, researcher has to use facts or information already available, and analyze these to make a critical evaluation of the facts, figures, data or material.

There are mainly two through which the data required for the research is collected. The primary data is that data which is collected fresh or first hand, and for first time which is original in nature. In this study the Primary data has been collected from Personal Interaction with Finance manager i.

Mahesh Nadkarni. The secondary data are those which have already collected and stored. Secondary data easily get those secondary data from records, annual reports of the company etc. It will save the time, money and efforts to collect the data. Sampling Size: Tool Used for calculations: Capital is the keynote of economic development. In this modern age, the level of economic development is determined by the proportion of capital available.

Meaning of Capital: In the ordinary sense of the word Capital means initial investment invested by businessman or owner at the time of commencing the business. Capital economics , a factor of production that is not wanted for itself but for its ability to help in producing other goods. Capital is a factor of production with a specific, changeable value attached to it that could, potentially, provide its owner with more wealth.

It is an abstract economic concept, and, as such, has many different definitions and classifications, but the unifying feature of capital is that it has a certain value, so it in itself is a type of wealth, and it has the potential of generating more wealth.

Features of Capital: Capital has the following features. Capital is a man made. Capital is a perishable. Capital is a human control possible. Capital is a mobile.

Capital is a human sacrifice. Capital is a scarce. Capital is a passive factor. Working capital is the life blood and nerve centre of a business. Just as circulation of blood is essential in the human body for maintaining life, working capital is very essential to maintain the smooth running of a business. No business can run successfully without an adequate amount of working capital.

There is operative aspects of working capital i. Working capital management as usually concerned with administration of the current assets as well as current liabilities. The area includes the requirement of funds from various resources and to utilize them in all result oriented manner.

It can be stated without exaggeration that effective working capital management is the short requirement of long term success. The importance of working capital management is indisputable; Business liability relies on its ability to effective management of receivables, inventory, and payables. By minimizing the amount of funds tied up in current assets. Firms are able to reduce financing costs or increase the funds available for expansion.

Many managerial efforts are put into bringing non-optimal level of current assets and liabilities back towards their optimal levels. It consists broadly of that portion of assets of a business which are used in or related to its current operations.

It refers to funds which are used during an accounting period to generate a current income of a type which is consistent with major purpose of a firm existence. In Accounting: Positive working capital means that the company is able to pay off its short-term liabilities companies that have a lot of working capital will be more successful since they can expand and improve their operations. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets.

It is concerned with the administration of current assets and current liabilities. It has the main following objectives- 1. To maximize profit of the firm. To help in timely payment of bills. To maintain sufficient current assets. To ensure adequate liquidity of the firms.

It protects the solvency of the firm. To discharge current liabilities. To increase the value of the firm.

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To minimize the risk of business. To purchase raw materials, spare parts and other component.

A manufacturing firm needs raw-materials and other components parts for the purpose of converting them in to final products, for this purpose it requires working capital. Trading concern requires less working capital. To meet over head expenses. Working capital is required to meet recurring over head expenses such as cost of fuel, power, office expenses and other manufacturing expenses. To hold finished and spare parts etc. Stock represents current asset.

So for that adequate quantity of working capital is required.

It includes cost of packing, commission etc. Working capital is required to pay wages, salaries and other charges. It is helpful in maintain uncertainties involved in business field. The major thrust of course is on the management of current assets.

This Is understandable because current liabilities arise in the context of current assets. Its Importance stems from two reasons: To be sure, fixed asset investmentWorking and long term Capital financing are responsive to variation in sales.

However, this relationship is not as close and direct as it is in the case of working capital components. On The Basis of Concepts 1 Gross Working Capital Gross working capital is the amount of funds invested in various components of current assets.


Current assets includes Cash in hand and cash at bank, Inventories, Bills receivables, Sundry debtors, short term loans and advances. This concept has the following advantages: Financial managers are profoundly concerned with the current assets. Gross working capital provides the correct amount of working capital at the right time. It enables a firm to realize the greatest return on its investment. It helps in the fixation of various areas of financial responsibility.

It enables a firm to plan and control funds and to maximize the return on investment. For these advantages, gross working capital has become a more acceptable concept in financial management.

Current liabilities are those that are expected to mature within an accounting year and include creditors, bills payable and outstanding expenses. Working Capital Management is no doubt significant for all firms, but its significance is enhanced in cases of small firms. A small firm has more investment in current assets than fixed assets and therefore current assets should be efficiently managed. The working capital needs increase as the firm grows. As sales grow, the firm needs to invest more in debtors and inventories.

The finance manager should be aware of such needs and finance them quickly. Every firm has to maintain a minimum level of raw material, work- in-process, finished goods and cash balance. This minimum level of current assts is called permanent or fixed working capital as this part of working is permanently blocked in current assets.

As the business grow the requirements of working capital also increases due to increase in current assets. The need for initial working capital is for every company to consolidate its position. Regular working capital refers to the minimum amount of liquid capital required to keep up the circulation of the capital from the cash inventories to accounts receivable and from account receivables to back again cash. It consists of adequate cash balance on hand and at bank, adequate stock of raw materials and finished goods and amount of receivables.

It may be divided into two types. The capital required to meet the seasonal needs of the enterprise is known as seasonal Working capital. Solvency of the business: Adequate working capital helps in maintaining the solvency of the business by providing uninterrupted of production.

Sufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill. Easy loans: Adequate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms.

Cash discounts: Adequate working capital also enables a concern to avail cash discounts on the purchases and hence reduces cost. Regular Supply of Raw Material: Sufficient working capital ensures regular supply of raw material and continuous production. Regular payment of salaries, wages and other day to day commitments: It leads to the satisfaction of the employees and raises the morale of its employees, increases their efficiency, reduces wastage and costs and enhances production and profits.

Exploitation of favorable market conditions: If a firm is having adequate working capital then it can exploit the favorable market conditions such as purchasing its requirements in bulk when the prices are lower and holdings its inventories for higher prices. Ability to Face Crises: A concern can face the situation during the depression. Quick and regular return on investments: Sufficient working capital enables a concern to pay quick and regular of dividends to its investors and gains confidence of the investors and can raise more funds in future.

High morale: Adequate working capital brings an environment of securities, confidence, high morale which results in overall efficiency in a business.

Working capital should be adequate so as to protect a business from the adverse effects of shrinkage in the values of current assets. It permits the carrying of inventories at a level that would enable a business to serve satisfactorily the needs of its customers.

It enables a company to operate its business more efficiently because there is no delay in obtaining materials etc; because of credit difficulties. When working capital is inadequate, a company faces many problems. It stagnates the growth and it becomes difficult for the firm to undertake profitable projects for non-availability of working capital funds. Paucity of working capital funds renders the firm unable to avail attractive credit opportunities.

The firm loses its reputation when it is not in a position to honor it short-term obligations thereby leading to tight credit terms. Too much working capital is as dangerous as too little of it.

Excessive working capital raises problems. It results in unnecessary accumulation of inventories. Thus chances of inventory mishandling, waste, theft and losses increase. Indication of defective credit policy and slack collection period. Consequently, it results in higher incidence of bad debts, adversely affecting profits, 3.

Makes the management complacent which degenerates in to managerial inefficiency. The tendencies of accumulating inventories to make a speculative profit, which tends to liberalize the dividend policy, make it difficult for the concern to cope in the future when it is not able to make speculative profits.

The firms must have sufficient funds on hand to meet its immediate needs. The following aspects have to be taken into consideration while estimating the working capital requirements. Provision for taxation , if it does not amt. Of profit. Bills payable. 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: 1.????

It enables the enterprise to provide correct amount of working capital at correct time.

Every management is more interested in total current assets with which it has to operate then the source from where it is made available. It take into consideration of the fact every increase in the funds of the enterprise would increase its working capital. This concept is also useful in determining the rate of return on investments in working capital. IT indicates the margin of protection available to the short term creditors.

It is an indicator of the financial soundness of enterprises. It suggests the need of financing a part of working capital requirement out of the permanent sources of funds. Working capital may be classified in to ways: o?????? On the basis of concept. On the basis of time. On the basis of concept working capital can be classified as gross working capital and net working capital. Permanent or fixed working capital. Every firm has to maintain a minimum level of raw material, work- in-process, finished goods and cash balance.

This minimum level of current assts is called permanent or fixed working capital as this part of working is permanently blocked in current assets.

As the business grow the requirements of working capital also increases due to increase in current assets. Variable working capital can further be classified as seasonal working capital and special working capital. The capital required to meet the seasonal need of the enterprise is called seasonal working capital. The business may be compelled to by raw materials on credit and sell finished goods on cash. In the process it may end up with increasing cost of purchase and reducing selling price by offering discounts.

Now avaibility of stocks due to non availability of funds may result in production stoppage. While underassessment of working capital has disastrous implications on business overassesments of working capital also has its own dangerous.

Each of the components of working capital needs proper management to optimize profit. For effective working capital management, inventory needs to be managed effectively. The level of inventory should be such that the total cost of ordering and holding inventory is the least. Simultaneously stock out costs should be minimized. Business therefore should fix the minimum safety stock level reorder level of ordering quantity so that the inventory costs is reduced and outs management become efficient.

However, due to factors like trade policies , prevailing market conditions etc. Business are compelled to sells their goods on credit. In certain circumstances a business may deliberately extend credit as a strategy of increasing sales. Extending credit means creating current assets in the form of debtors or account receivables. An effective control of receivables Help a great deal in properly managing it.

From this it would be possible to find out the average credit days using the above given formula. A business should continuously try to monitor the credit days and see that the average.

Credit offer to clients is not crossing the budgeted period otherwise the requirement of investment in the working capital would increase and as a result, activities may get squeezed. This may lead to cash crisis. There are two components of cash budget are: 1.

Cash inflows The main source for thses flows are given here under: 1. Cash Sales 2. Cash received from debtors 3. Cash received from Loans, deposits etc. Cash receipts other revenue income 5.Debt collection period changing over the years. Company is maintaining high quick assets to overcome current liabilities for better results. Maturity pattern of various current obligations is an important factor in risk assumptions and risk assessments.

A project report submitted to Jawaharlal Nehru university Kakinada in 7. Technological up gradation. In a chemical compound atoms of its constituent elements are bonded together in molecules.

In the year the current ratio has increases 2. Cash received from Loans, deposits etc.

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