A

PROJECT REPORT
ON
“WORKING CAPITAL MANAGEMENT” OF SWETAL LOGISTICS
PVT LTD,
BHANDARA ROAD NAGPUR.
A project report is submitted to Rashtrasant Tukdoji Maharaj Nagpur
University. In partial fulfillment of the requirements award of degree in
MASTER OF COMMERCE (M.COM)

FOR THE ACADEMIC SESSION 2018-2019

: Submitted By:
ASHISH P.MAGARE

: PROJECT GUIDE:

DR. SHWETA GULHANE

PRERANA COLLEGE OF COMMERCE,

RESHIMBAGH SQUARE, NAGPUR.

2018-2019

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 CERTIFICATE

This is to certify that this project entitled “working capital

management” of shwetal logistics Pvt Ltd” submitted by Ashish P.
Magare to Rashtrasant Tukdoji Maharaj Nagpur University, Nagpur for
partial fulfillment of Master of Commerce is a bonafied original
research work carried out under my guidance and supervision. It is a
piece if research of a sufficiently high standard to warranty it
submission to the university for the reward the said degree.

No part of the project has been submitted for any degree or published in
any other from.

The assistance on the help ended to the research in the form of basic
source material and information how been duly acknowledged.

PROJECT GUIDE PRINCIPAL

DR.SHWETA GULHANE DR.SHUBHA MISHRA

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 DECLARATION

I hereby declare that this project “working capital management”

of swetal logistics pvt ltd” has been submitted as project report in
partial fulfillment of MASTER OF COMMERCE. The project detail for any
part has not been submitted earlier to any institutions for other degree or
diploma.

The source of material and data used in this study how been duly
acknowledge and certified.

Place: Nagpur ASHISH P MAGARE

Date:

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 ACKNOWLEDGEMENT

I express my sincere and hearty gratitude to DR.SHWETA

GULHANE my project guide for giving me an opportunity and support
to carry out this project without whose able guidance this project would
never materialize.

I was her polite talk’s keen interest, knowledge and practical

suggestion that inspire me to bring out the best.

I gratefully acknowledge my deepest gratitude to Honorable

Chairman R.C.Gulhane sir and Honorable Secretary Dr. S.C.Gulhane
sir and Honorable Principal Dr. Shubha Mishra madam for their
persistence inspiration conservation suggestion and constant
encouragement.

I also want to thank my friends, my family and all the members who
were associated directly or indirectly in making my project successfully.

ASHISH P. MAGARE

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 INDEX

PAGE
SR.NO NAME OF CHAPTER NO

INTRODUCTION AND RESEARCH

METHODOLOGY
01  INTRODUCTION 7-23

 COMPANY PROFILE
 RESEARCH METHODOLOGY
 PROBLEM STATEMENT
 AIMS & OBJECTIVE
 SCOPE & LIMITATIONS
 HYPOTHSIS

02 REVIEW OF LITERATURE 24-31

DATA COLLECTION
 Primary Data
03  Secondary Data 32-33

04 ANALYSIS OF DATA COLLECTION 35-59

05 CONCLUSION & SUGGESTION 61-63

6s BIBLIOGRAPHY 65

Annexure 66

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 CHAPTER-1

INTRODUCTION

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INTRODUCTION OF WORKING CAPITAL MANAGEMENT

Working capital (abbreviated WC) is a financial metric which represents operating liquidity
available to a business, organization or other entity, including governmental entity. Along
with fixed assets such as plant and equipment, working capital is considered a part of
operating capital. Net working capital is calculated as current assets minus current liabilities.
It is a derivation of working capital that is commonly used in valuation techniques such as
DCFs (Discounted cash flows). If current assets are less than current liabilities, an entity has
a working capital deficiency, also called a working capital deficit. A company can be
endowed with assets and profitability but short of liquidity if its assets cannot readily be
converted into cash. Positive working capital is required to ensure that a firm is able to
continue its operations and that it has sufficient funds to satisfy both maturing short-term debt
and upcoming operational expenses. The management of working capital involves managing
inventories, accounts receivable and payable, and cash.
Working capital management is a significant in financial management due to the fact
that it plays a vital role in keeping the wheel of business enterprises running. Working Capital
management is concerned with short term financial decision. Shortage of funds for working
capital has caused many cases, has retarded their growth. Lack of efficient & effective
utilization of working capital leads to low rate of return on capital employed or even compels
to sustain losses. The lead for skill working capital management has thus becomes greater in
recent years. A firm invests a part of its permanent capital in fixed asset & keeping part of it’s
for working capital i.e. for meeting a day today requirement. The management of long term
financial investment sufficient liquidity is necessary & must be achieved &maintained to
provided funds & payment of obligation as they arises or nature.
These read world facts introduce problems & require the necessity of working capital.
The most important areas in the day to day management is the functional area of finance that
covers all the correct accounts of the firms. It is concerned with management of level of
individual current assets as well as the management of total working capital. The goal of
working capital management is to ensure that a firm is able to continue its operations & that it
has sufficient ability to satisfy both maturing short term debt & upcoming operational
expenses.

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Funds are also needed for short term purpose for the purchase of raw material, payment of
wages and other day to day expenses etc. These funds are known as working capital. In
other words, working capital refers to that part of firm capital which is required for financing
short term or current assets, such as cash, marketable securities, debtors, inventories, bills
receivable, etc. The assets of this type are relatively temporary in nature. Unfortunately, there
is much disagreement among financier’s accountants, economists and businessmen as to the
exact meaning of the term “Working capital”. However, working capital is also known as
revolving or circulating capital or short-term capital.

MEANING AND CONCEPT OF WORKING CAPITAL:-

There are two concepts of working capital gross working capital & net working
capital. Gross working capital refers to the firm’s investment in current assets. Current assets
are those assets which can be converted into cash within an accounting year. Net working
capital refers to the difference between current assets & current liabilities. Current liabilities
are those claims of outsiders which are expected to mature for payment within an accounting
year.

Working capital is known as operating capital.

A positive working capital means that the company is able to pay off its short terms
liabilities. A negative working capital means that the company currently is unable to meet its
short-term liabilities.

Working capital may be regarded as life blood of business. Its effective provision can do
much to ensure the success of a business. It is defined as the excess of current assets over
current liabilities & provisions. In other words, it is net current assets or net working capital.

DEFINITION

According to Guttmann & Dougal - “Excess of current assets over current liabilities.”

According to Ramamurthy-“Working capital refers to the funds, which a company must

process to finance its day to day operations.”

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NEED FOR WORKING CAPITAL:-

Working capital is needed till a firms gets cash on sale of finished products. It
depends on Manufacturing cycle i.e. time required for converting the row material in to
customers & credit period allowed by creditors. Thus the sum total of these times is called
“Operating cycle” & it consists of the following six steps:

1. Conversion of cash in the raw materials.

2. Conversion of raw material into work in progress.
3. Conversion of work in progress in to finished goods.
4. Times for sale of finished goods cash sales & credit sales.
5. Time for realization from debtors & bills receivables in to cash.
6. Credit period allowed by creditors for audit purchase of raw materials any inventory.

IMPORTANCE OF WORKING CAPITAL:-

The larger inventory also reduces the risk of a stock-out. Trade credit may stimulate
sales because it allows a firm to access product quality before paying. Another component of
working capital is accounts payables. It is believed that delaying payment of accounts
payable to suppliers allows firms to access the quality of bough products and can be
expensive if a firm is offered a discount for the early payment.

1) Easy availability of cash discount.

2) Creation of Bound goodwill.
3) Easy loan from the banks.
4) Steady work for the employees & efficiency in production.
5) Adequacy of working capital creates a feeling of security & confidence.
6) Adequacy of working capital is a must for maintaining solvency & continuing production.
7) Periods of slump can easily be overcome
8) Facility of off-season purchasing.
9) Quick & steady return to the Investors.
10) General rise in management moral.

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SIGNIFICANCE OF THE PROJECT

Financial Analysis is the process of identifying the financial strengths and weaknesses of
the firm by properly establishing relationships between the items of the balance sheet and the
profit & loss account. Financial analysis can be undertaken by management of the firm, viz.
Owners, creditors, investors and others. Ratio analysis is a powerful tool of financial analysis.
A ratio is defined as “the indicated quotient of two mathematical expressions” and as “the
relationship between two or more things”.
Ratios help to summaries large quantities of financial data and to make qualitative judgment
about the firm’s financial performance. WORKING CAPITAL MANAGEMENT deals with
the management of current assets. The management of current assets is similar to that of fixed
assets in the sense that in both cases firm analyses their effect on their return and risk profile.
The management of fixed assets and current assets, however, differ in three aspects. First, in
managing fixed assets, time is a very important factor; consequently, discounting and
compounding techniques play a significant role in capital budgeting. Second, the large
holding of current assets, especially cash, strengthens the firm's liquidity position (and
reduces risk). Third, levels of fixed as well as current assets depend upon expected sales, but
it is only current assets that can be adjusted with sales fluctuations in the short run.
Thus with such importance attached, a due diligence should be given to proper management
of the working capital.

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CONCEPTUALIZATION

There are two concepts of working capital- gross and net.

Gross Working Capital refers to the firm's investment in current assets. Current assets are
the assets which can be converted into cash within an accounting year and include cash,
short-term securities, debtors, (accounts receivable or book debts) bills receivables and stock
(inventory). 6

Net Working Capital refers to the difference between current assets and current liabilities.
Current liabilities are those claims of outsiders which are expected to mature for payment
within an accounting year and include creditors (accounts payable), bills payable, and
outstanding expenses. Net working capital can be positive or negative. A positive net
working capital will arise when current assets exceed Current assets.

Net Working Capital (+) =Current assets - Current liabilities

Also, negative net working capital will arise when current liabilities exceed current assets.

Net Working Capital (+) =Current liabilities - Current assets

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 CHAPTER-2

Company Profile

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COMPANY PROFILE

Swetal logistics is a warehouse management system (WMS) is a key part of the

supply chain and primarily aims to control the movement and storage of materials with in a
warehouse and process the associated transactions, including shipping, receiving, put away
and picking. The Company was started with the trading of iron and steel material in the year
1970 and within a couple of years, developed as a reputed manufacturer of structural and
reinforcement steel as the licensee of BIS, DGSD and PGCL

A warehouse management system (WMS) is a key part of the supply chain and
primarily aims to control the movement and storage of materials within a warehouse and
process the associated transactions, including shipping, receiving, put away and picking. The
systems also direct and optimize stock put away based on real-time information about the
status of bin utilization. A WMS monitors the progress of products through the warehouse. It
involves the physical warehouse infrastructure, tracking systems, and communication
between product stations.

More precisely, warehouse management involves the receipt, storage and movement
of goods, (normally finished goods), to intermediate storage locations or to a final customer.
In the multi-echelon model for distribution, there may be multiple levels of warehouses. This
includes a central warehouse, a regional warehouses (serviced by the central warehouse) and
potentially retail warehouses (serviced by the regional warehouses).

Warehouse management systems often utilize automatic identification and data capture
technology, such as barcode scanners, mobile computers, wireless LANs and potentially
radio-frequency identification (RFID) to efficiently monitor the flow of products. Once data
has been collected, there is either batch synchronization with, or a real-time wireless
transmission to a central database. The database can then provide useful reports about the
status of goods in the warehouse.
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Warehouse design and process design within the warehouse (e.g. wave picking) is also part of
warehouse management. Warehouse management is an aspect of logistics and supply chain
management.

The objective of a warehouse management system is to provide a set of computerized

procedures for management of warehouse inventory, space, equipment and people with the
goal of minimizing cost and fulfillment times.

This includes:

 A standard receiving process to properly handle a shipment when it arrives. This

process can be individualized to each warehouse or product type.
 The receipt of stock and returns into a warehouse facility. An efficient warehouse
management system helps companies cut expenses by minimizing the amount of
unnecessary parts and products in storage. It also helps companies keep lost sales to a
minimum by having enough stock on hand to meet demand.
 Modeling and managing the logical representation of the physical storage facilities (e.g.
racking, etc.). For example, if certain products are often sold together or are more popular
than others, those products can be grouped together or placed near the delivery area to
speed up the process of picking, packing and shipping to customers.
 Enabling a seamless link to order processing and logistics management in order to pick,
pack, and ship product out of the facility.
 Tracking where products are stocked, which suppliers they come from, and the length of
time they are stored. By analyzing such data, companies can control inventory levels and
maximize the use of warehouse space. Furthermore, firms are more prepared for the
demands and supplies of the market, especially during special circumstances such as a
peak season on a particular month. Through the reports generated by the inventory
management software, firms are also able to gather important data that may be put in a
model for it to be analyzed.

Alone warehouse management system cannot automate the process. It also involves the
combination of business process to be followed along with that system to achieve 100%
productivity and accuracy.

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Working Process

Warehouse management systems can be standalone systems, or supply chain execution suite,
modules of an ERP system. Depending on the size and sophistication of the organization, the
system can be as simple as a handwritten list that are updated when required, spreadsheets
using software such as Microsoft Excel or Access or purpose-built software programs.

In its simplest form, the WMS can track product's data during the production process and act
as an interpreter and message buffer between existing ERP and WMS systems.

Working Activity

 Automated storage and retrieval system

 Data warehouse
 Document automation
 Enterprise resource planning
 Inventory management software
 Manufacturing resource planning
 Pick and pack
 Shipping list
 Voice-directed warehousing
 Warehouse Control System
 Wave Picking

SWETAL BUSINESS

 Consignment Agencies
 Finance
 Hiring of Cranes, Reach Stackers, Fork lift
 Iron and Steel trading
 Logistics Solutions
 Material Handling Agent
 Processing Unit – TMT De-coiling, Straightening and Cutting
 Supply Chain Management

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 CHAPTER-3

RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY
Research is a scientific and systematic search for pertinent information on a specific
topic. Research means search for knowledge. It is discovery of facts, developments of facts
and verification of facts. It is an attempt to find practical solutions to the problems with the
help of application of scientific methods. The purpose of research is to discover the answers
of questions through application of scientific procedure. The aim of research is to find out the
truth which is has been discovered as yet. The research has been defined as “A careful
investigation or enquiry especially through search for new facts in branch of knowledge” The
research design used in this project is Analytical in nature the procedure using, which
researcher has to use facts or information already available, and analyze these to make a
critical evaluation of the performance.

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Definition of Research

1) According to Advanced Learner’s Dictionary:-

“Research is a careful investigation or inquiry especially through search

for new facts in any branch of knowledge”.

2) According to Clifford woody:-

“Research comprises defining and redefining problems, formulating hypothesis or suggested

solutions, collecting and evaluating data; making deduction and reaching conclusion; and at

last carefully testing the conclusion to determine whether they fit the formulating

hypothesis.”

TYPES OF RESEARCH

1) Descriptive vs. Analytical

2) Applied vs. Fundamental.

3) Quantitative vs. Qualitative

4) Conceptual vs. Empirical

5) Some other types of research

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1) Descriptive vs. Analytical:-

Descriptive research includes surveys and fact finding enquiries of different kinds. The
main feature of this method is that the research has no control over the variable; he can
only report what has happened.

2) Applied vs. Fundamental:-

Research can either be applied (or action) research or fundamental (to basic or pure)
research aims at finding a solution for an immediate problems facing a society or an
industrial/business organization.

3) Quantitative vs. Qualitative:-

Quantitative research is based on the measurement of quantity or amount. It is application

to phenomena that can be expressed in term of quality. Qualitative research, on the other
hand, is concerned with qualitative phenomenon.
4) Conceptual vs. Empirical:-

Conceptual research is that related to some abstract idea(s) or theory. It is generally used
by philosophers and thinkers to develop new concepts. On the other hand, empirical
research relies on experience or observation along. It is data based research.
5) Some other types of research:-

 One time research or long term research.

 Field setting research or laboratory research.

 Clinical or diagnostic research.

 Historical research.

 Conclusion oriented research.

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 PROBLEM STATEMENT

Swetal enterprises have decreased their production and productivity ratio between the years.
Swetal enterprises try to increase their profit level and productivity. The biggest issue of
Shwetal Enterprises is that they are facing the fluctuation of price of raw materials,
fluctuation in share market and unstable price of shares Swetal logistics decreased his
liquidity ratio. The study will explore
“A STUDY ON WORKING CAPITAL MANAGEMENT” OF SWETAL LOGISTICS
PVT LTD, NAGPUR”

20
AIM & OBJECTIVE OF THE RESEARCH

1. To study the asset & liability and net working capital of the Swetal logistics.

2. To observe the growth in current assets, current liabilities & working capital in the firm.

3. To study the requirement of working capital management.

4. To study the management of working capital theory situation.

5. To study the various ratio analysis based on working capital.

6. To study the present financial condition of the concern by calculating the working capital.

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 SCOPE

1. The study will be carried in Nagpur City.

2. The data will be collected from the head of company by personal interview.

3. The study is limited to working capital only.

LIMITATION

The study conducted and done is analytical, subject to the following limitations.

1. The study is mainly carried out based on the secondary data provided in the financial
statements.
2. This study is based on the historical data and information provided in the annual reports
therefore it may not be a future indicator.
3. There may be some fractional differences in the calculated ratios.

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 HYPOTHESIS

 The Working Capital of Swetal logistics has been increasing year by year.
 To analyze that there is growth in current assets, current liabilities & working capital of
the firm.
 To analyze that the Shwetal logistic has a sound financial position.

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 CHAPTER – 2

REVIEW OF LITERATURE
In depth analysis tells that most in case research work is observed and focused mainly on two
aspects, working capital on profitability of firm and working capital management. The chief
issues with previous literature are lack of survey-based approach and lack of methodical
theory advance study, which gives direction and idea for future research. The proposed future
research direction is given in this paper may help to develop a better understanding of
determinants and practices of working capital management.

Working Capital Management, components of working capital management, cash conversion

cycle, inventory turnover in days, Bills payable in days, Bill receivables in days.
In depth analysis tells that most in case research work is observed and focused mainly on two
aspects, working capital on profitability of firm and working capital management. The chief
issues with previous literature are lack of survey-based approach and lack of methodical
theory advance study, which gives direction and idea for future research. The proposed future
research direction is given in this paper may help to develop a better understanding of
determinants and practices of working capital management.

Introduction:-Working capital management plays an important role in financial management

of the industry. Numbers of researcher has been done the research on different components of
working capital and subjects on. Here, I have included the relevant articles as well research
work on the same topic and subject. And this is a part of my research work on the same title
the working capital management of selected textile companies of India. The main aim of this
paper is to identify the gaps in current body of my research work which gives the direction
towards forward attention to be given.

NCEAR (1966):-The National council of applied Economic Research (NCEAR) in 1966 first
time formal study was conducted on working capital management in India. The council
published a structure of working capital" which was limited analysis of the creation of
working capital with special attention to the fertilizers, and cement and sugar industries the
main objective of this study was emphasized on come out with findings that working capital
management practices were extremely unplanned and hence need to develop proper
accounting policies like inventory management, debtors management as above. And the study
suggested developing suitable working capital policies required in the success of business.

24
Bhatt V.V. (1972):-He has given concentration on system to appraise working capital
management and its finance especially for the large scale companies. This tools also helpful
to other sectors like agriculture as well retail trade etc. As bank provide short term finance to
operation of business at the same time need to pay attention on repayment of loan and
required finance necessity. If these two areas are to be maintain properly no need to appraise
the working capital management concern.

Smith Keith V. (1973):-Research has been given focused on the short term finance need to
be given more attention for the success of the individual firm. For that finance manager has to
give more attention on current assets and current liability. Many firms do investment of
current assets in a basket while current liability in many different request. This paper consist
eight distinct approaches to working capital management out of it first three gives common
guidelines next three regarding constrain set and cost balancing and last two about probability
models and portfolio theory.

Chakraborthy S. K. (1974):-In this research author try to make difference among cash
working capital v/s balance sheet working capital. And research is based on two dimensions.
Fist is operating cycle concept and second calculation of operating cycle period in all the four
cases. Main aim of this research is to exhibit operating cycle concept based on published
annual report of the firm.

Rajeshwar (1985):-He has done the study on few selected public enterprises in India. He
tried to check the working capital policies adopted by the sample units. He made attempt to
examine the working capita components how efficiently managed. At the last no one
company clearly defined working capital polices and hence most of them could not achieve
efficiency in working capital management. In this study it is found that majority of
investment was made in finished goods inventory that was indicate that working capital was
not managed in planned way. Thus, study recommended for careful management of working
capital in finance management.

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Misra (1975):-Here, in this analysis try to identify the problems of working capital in six
public enterprises for the period of 1960. Importance and findings are here under: selected
samples of companies were not able to utilize working capital efficiently. As well excess
inventory level which shows inappropriate management of inventory. In order delay
exchange was made to foreign exchange and issue of import license. Furthermore account
receivable ratio is very law because liberal credit policy and inappropriate collection policy.
In most of the selected firms were having huge cash amount on account and improper
management and control on cash. Natarajan Sundar (1980) has been given views on working
capital is having immense important at both, the national as well business level. To keep
control on working capital at the national level by controlling credit controls. In practice
efficient working capital includes to determine the best suitable level of working capital,
financing it and control over it. If we talked about corporate level investment is important in
both case short term investment and fixed assets. And that can be possible many company not
surviving as well not incurring profit because of not efficiently manage the working capital.
Thus, cost management with improved operational efficiency, and that aspect working capital
is very important to be manage in proper way.

Rao K.V. and RaoChinta (1991):-This study observed that strong and weak point of
conventional techniques of working capital analysis. Outcomes of this study show that some
of the conventional techniques which could realize the working capital behavior well. And
some of them fail to do so. And thus authors suggest proper working capital management
with conventional method i.e. ratio analysis. Study suggests further inclusive factors which
are decisive yardstick in working capital efficiency.

Fazzari Steven M. and Petersen Bruce C. (1993):-Research has been put light on financial
restrain on investment by giving focus the ignoring role of working capital in both as use and
source of funds. As per the views of author liquidity can be maintain by maintaining working
capital on smooth manner means to be investment in a manner which does not create cash
flow constrain. Through the research found that working capital investment should be
“excessively sensitive” with summing up that controlling on smoothing working capital
create a long term impact of finance constraints and reported in many other studies also.

26
Siddharth and Das (1994):- Siddharth and Das has been done study on “Working Capital
Turnover in Pharmaceutical companies” tried to determine efficient use of working capital in
selected pharmaceutical firms in India. 10 years data has been ISSN: 2320-5407 Int. J. Adv.
Rs.5 (12), 336-342338 concluded that overall turnover ratio was 90.3 time. The finely
analysis of the data shows that the selected companies has done well in terms of employment
of working capital. Furthermore study discovered the working capital turnover ratio cried off
staidly over the stage from 1981 to 1990.

Vijayakumar and Venkatachalam (1995):-This study was made on observed analysis in

working capital and profitability. Study was carried with 13 firms belonging sugar industry
for the 10 years period from 1982-1983 to 1991-92. The correlation and regression statistical
method has been used to analyze the impact of working capital ratios on profitability. In this
study total four ratios has been taken in to consideration; Liquidity ratio, inventory turnover
ratio, receivable turnover ratio and cash turnover ratio. The discovery of the study said that
liquid ratio and cash turnover ratio have harmful impact on profitability on the other hand
inventory turnover ratio and receivables have positive impact on profitability.

Rafuse (1996):-The article stressed on working capital enhancement by halting payment of

creditors. That was clear many UK companied delayed payment for the long period. Very
surprisingly the story reveled in 1994 by the Forum for Private Business, that was a small
business association, and reverse side 50 days before payment of debtors were been paid
beyond the due date. This article stressed to maintain healthy and close relationship among
supplier and customer. The discovery of the study warranted the firms to reduce inventory
level as fast as possible in order to increase the profit of the firms. Another fact of study was
that control over working capital responsibility goes on the head of finance manager.

Swami (1997):- Swami was done research with 19 key agricultural areas in the contour of
Dakshina Kannada district in Karnataka. The research exposed that maintenance of liquidity
and profitability is a major problem in the targeted are. To be safe in side of working capital
management were found to be suffered and low profitability due to the interest burden. The
effects of this firm raised the fund for working capital requirement by borrowing fund from
depositors. This study has been given stressed on proper management of working capital so
future of business would be bright.

27
Hossain Saiyed Zabid and Akon Md. Habibur Rahman (1997):-
The main objective of this study is to maintain working capital in proper way. i.e. time of
fund requirement, amount of fund and from where to raise fund to be maintain so can
possible to acquire trade off among liquidity and profitability. The analysis showed that
BTMC had followed aggressive working capital policy by taking the risk of liquidity. The
study analyzed that company continuously raising trend in negative net working capital
during the period of the study. That was suggest to BTMC not to raise only fund from long
term source instead by understating the requirement of fund need to take short term source
also.

Ahmed Habib (1998):-This study is evaluated that the interest rate of fund reducing money
power on output. For the study rational expectation model is used to find out relation between
production decisions and debt finance. As working capital having immense important factors
and its cost, the rate of interest, affects the supply of goods, this study revealed that this
model helps to identify the alarming situation when interest rate is used. This model also
revealed that effects of monetary policy on the price level and supply side.

Garg Pawan Kumar (1999):-This study was done in selected public sectors firms of
Haryana study relate with working capital and liquidity analysis. The analysis of the study
says that forecasting of working capital necessity constrained on different factors. After
realizing the facts like needs of working capital in public sectors. According to that, need to
analyze production schedule, labor cost, sales trend etc. furthermore, suggestion is to manage
other components of working capital.

Bansal S. P. (1999):-Review of this study on working capital management refers to the

management of current assets and current liabilities to be maintain the various components to
increasing the profitability of the firm. The author persists on ISSN: 2320-5407 Int. J. Adv.
Res. 5(12), 336-342-339 applications of various methods and techniques for the management
of working capital and its three main gears cash, receivables and inventors.

RaoGovinda D. and Rao P. M. (1999):-As per the study management of working capital is
constant process. So that proper observation on various components is needed. At the end
relationship between different components are needed. This provides proper direction.

28
Han Shin an LUC Soemen (1998):-The study is on the efficiency of the working capital
management and business profitability. There are 58 companies are taken for the research and
period for the study is 1975 to 1994, study found that there is a strong negative relationship if
firm having long Net Trade Cycle and its profitability. In other side short Net Trading cycle
created the risk. It has also found measuring liquidity differently, need to be maintain
appropriate current ratio having positive relation with profitability.

Singh O. N. (1999):-The research discussed the needs of credit to the farmers or agriculture
segment and another need is having proper system of working capital finance in agriculture
segment in line and commerce finance, with some changes. Research advised a system which
is quite similar useful and fulfill the need of both farmers as well as the bankers. Main aim of
the study is to make farmers strong in terms of capital.

RaoGovinda D. and Rao P. M. (1999):-Study believes that management of working capital

is a constant process need of finance proper observation or monitoring and revising the
relationship of all variables and give conclusion. This is a proper indication to the manager.

Dutta (2000):-Author Dutta has done study on “Working Capital Management of

Horticulture Industry in Himachal Pradesh” thatwas a case study of Himachal Pradesh
Horticulture Produce Marketing and Processing Corporation for the stage 1991 to 1998. The
study was thrown the light on financing pattern of working capital management. The study
exposed that the working capital of HRMC was going worse gradually during the study
period. Though, huge losses of the firm holding the huge amount of inventory and that was a
main cause of failed trade off among liquidity and profitability. The conclusion of study like
that there was no significant correlation between gross working capital and sales.

Filbeck Greg and Krueger Thomas M. (2005):-As per the article, need to study internal
working capital management and working capital performance. That article was published in
CFO magazines. As per the findings of this article macro-economic factors, interest rates,
ISSN: 2320-5407 Int. J. Adv. Res. 5(12), 336-342340 competitions, etc. having impact on
working capital management. Further finding is that management of working capital goes on
stock prices also.

29
Jain P. K. and YadavSurendra S. (2001):-That was a study of corporate Working capital
management related practices in India, Singapore and Thailand. This study tried to
understand the relationship of working capital management and current assets and current
liabilities. In other hand, authors have revealed the analysis liquidities ratios like current
assets and current liabilities. Every sample of study have been pertained these ratios for the
management of working capital. In a sum up of the paper the data of samples of three
countries confirm that there were wide inter-industry variations in liquidity ratios. At the end,
authors suggest the serious consideration attention to be given by respective nation as well
industry groups of three companies and should develop corrective measures to take care of
areas concern.

Parvathy (2004):-Observation of study has shown that in increasing in mode, but net profit
has in decreasing in trend because operating cost is high. The others found out and thrown
light on the importance of cost of production. Other side found that the return on network and
the return to total assets were on the decreasing trend. Researcher has found
that the return on investment is stable and the company invested on profitable way.
Company’s payout ratio was very conservative and that shows growth of the company. With
sum up of the research is that for the long term financial stability and formed the debt equity
ratio. Opposite side of the research interest coverage ratio and the proprietary ratio were not
satisfactory.

MeszekWieslaw and PolewskiMarcin (2006):-By observation of selected construction

companies at area of working capital management and working capital policy formation and
strategies implication. The Study was based to develop the controlling methodology for
working capital. here, study that was going on construction company having the specific
factors are to be consider like functional factors and market requirements which make
working capital area wide and more focused.

Arindam Ghosh (2007):-The art was the study carried on Cement Industry of India specific
area of study was “Working Capital Management and its practices and impact on
profitability. Main aim of the study is to evaluate efficiency of working capital management
of selected cement companies in India during the period 1992 to 2001. For the study targeted
20 large cement companies avail in India having very large portion in cement industry of
India.

30
Chowdhury Anup and Amin Md. Muntasir (2007):-That was the study carried on
pharmaceutical companies listed in Dhaka Stock Exchange. Observation of the study based
on the financial management, according to this major problem found in area of working
capital management. It is true that working capital effects go on business performance and
growth. The main objective of the study is to evaluate working capital practicability and
implication of working capital policy and strategies in the targeted industry. To obtain the
goal, evaluation was made regarding principles, procedures and techniques of stock
management, creditors’ management, and debtors’ management.

Virani Varsha (2008):-It was a comparative study in CADILA COMPANY This study has
been done with certain objectives first is to examine financial performance and second one is
to examine profitability trend and at the last to find out assets operational model and evaluate
liquidity position of the company. To achieve these goals used two classy analytical tools i.e.
ratio analysis and correlation analysis. The study shows relationship between different ratios.
That is also observed that correlation and coefficient is near about so there is a high degree of
negative and positive correlation between various ratios.

Ramachandran Azhagaiah and Janakiraman Muralidharan (2009):-In this study author

examine the relationship among working capital management proficiency and earnings before
interest and tax. The study was made on Paper industry in India during 1997 to 2005. For the
measurement of working capital management three indexes are taken into consideration
performance index, utilization index and efficiency index, and EBIT of the selected
companies for the study period are taken. As a conclusion of the study says paper companies
of Indiaperformed well during period. Some having very good index and some of them need
to improve the working capital management give proper attention on that particular area also.

Kushwah, Mathur&Ball (2009):-The study underwent to evaluate the working capital

management and direction in selected five major cement companies i.e. ACC, Grasim,
Ambuja, Prism and Ultra- Tech... For the research purpose secondary data are used like
authors collected the financial statement of selected cements companies for the years from
2007 to 2009. There is liquidity ratios and activities ratios are used to analysis the condition
of working capital of the companies. The study revealed the truth of study is that, most
companies not maintain their working capital in a systematic way while overall ACC shows
appropriate management of working capital.
31
 DATA COLLECTION

DIFFERENT METHODS OF COLLECTING DATA

There two types of collecting data

1. Primary data

2. Secondary data

1. PRIMARY DATA

The primary data are those which are collected fresh and for the first time and thus happen to

be original in character.

METHODS OF COLLECTINGPRIMARY DATA

a) Observation method

b) Interview method

c) Through questionnaires

d) Through schedules

32
2. SECONDARY DATA:-

The secondary data on the other hand are those which have already been collected by

someone else and which have already been through the statistical process.

METHODS OF COLLECTING SECONDARY DATA

a) Secondary data may either be published data or unpublished data usually published data

are available in

b) Various publication of the central, state or local governments.

c) Various publication of foreign government or of international bodies.

d) Technical and trade journals

e) Books, magazines and newspapers.

f) Reports and publication of various associations connected with business and industry

bank, stock exchanges etc.

g) Report prepared by research scholars, universities, economists, etc.in different fields.

h) Public record & statistics, historical document, and other sources of published

information.

The sources of unpublished data are many found in diaries, letter, unpublished biographies

and autobiographies and through private individual and organization.

33
 CHAPTER-4

Data Analysis
&Interpretation

34
 Data Analysis &Interpretation

Working capital statement for period of five years from the year 2013-2018

Particular 2013-14 2014-15 2015-16 2016-17 2017-18

(A)Current assets

Inventories 9034.75 3398.07 6996.76 5531.49 3995.11

Sundry debtors 9866.67 6106.54 7273.08 7318.43 11315.64
Cash & Bank bal. 625.13 1252.45 921.96 836.67 1300.93
Loans & advance 14303.30 10967.68 9332.60 11209.01 7258.47

TOTAL (A) 33829.85 21724.74 24524.40 24895.60 23870.15

(B)Current liabilities

Liabilities 23782.82 20801.17 21974.12 20935.38 16244.71

Provision 454.48 427.21 391.82 251.80 264.33
Bonds repayable 493.00 493.00 481.50 1981.50 481.50
Interest accrued on loans 5024.91 9283.34 2551.76 16166.46 20512.28

TOTAL (B) 29755.21 31004.72 35399.20 39355.14 37502.82

NET WORKING 4074.64 -9279.98 -10874.80 -14439.54 -13632.67

CAPITAL(A-B)

35
 NET WORKING CAPITAL
10000
W
O
5000
R
KI
N 0 Series 1
G 2013-14 2014-15 2015-16 2016-17 2017-18
C -5000
A
PI
T -10000
A
L -15000

-20000

YEAR

INTERPRETATION:-

During the five year period, the working capital position of Swetal logistics is decline.
During 2013-2014 only capital shows an upward trend. From 2014-15 onwards the working
capital show a downward trend. This is because there is more proportionate increase in
current liabilities over the proportionate decrease in current which ultimately resulted in
posing negative sign of working capital management and current assets management at
Swetal logistics during above mentioned period.

36
Statement Showing Changes in Working Capital of Swetal logistics Ltd.
From the year 2012-13 to 2013-14 (Rs.In Lakhs)

Particular 2012-13 2013-14 Increase Decreases

(A)Current assets

Inventories 9192.47 9034.75 157.72

Sundry debtors 8159.75 9866.67 1706.92
Cash & Bank bal. 414.81 625.13 210.32
Loans & advance 18022.60 14303.30 3719.30

TOTAL (A)
35789.63 33829.85

(B)Current liabilities

Liabilities 16664.77 23782.82 7118.05

Provision 323.37 454.48 131.11
Bonds repayable 493.00 493.00
Interest accrued on loans 162.87 5024.91 4862.04

TOTAL (B) 17644.01 29755.21

Net working capital

decrease in working capital 18145.62 4074.64 14070.98
(A-B)
14070.98

18145.62 18145.62 15988.22 15988.22

TOTAL

37
 40000

35000

30000

25000

20000 Current assets

Current liabilities
15000

10000

5000

0
2012-13 2013-14

INTERPRETATION:

In between 2012-13 and 2013-2014, the net working capital position show a down
trend because there is a more proportion decrease in current assets position (inventory loans
and advance) over proportionate increase in current liabilities position (liabilities, interest
accrued on loan and provision) which ultimately sign of working capital management at
Swetal logistics during the above mentioned period during this period only debtors and cash
balances show an increase.

38
Statement Showing Changes in Working Capital of Swetal logistics Ltd.
From the year 2013-14 to 2014-15 (Rs.In Lakhs)

Particular 2013-14 2014-15 Increase Decreases

(A)Current assets

Inventories 9034.75 3398.07 5636.68

Sundry debtors 9866.67 6106.54 3760.13
Cash & Bank bal. 625.13 1252.45 627.32
Loans & advance 14303.30 10967.68 3335.62

TOTAL (A)
33829.85 21724.74

(B)Current liabilities

Liabilities 23782.82 20801.17 2981.65

Provision 454.48 427.21 27.27
Bonds repayable 493.00 493.00
Interest accrued on loans 5024.91 9283.34 4258.43

TOTAL (B) 29755.21 31004.72

Net working capital

decrease in working capital 4074.64 -9279.98
(A-B)
13354.62 13354.62

4074.64 4074.64 16690.86 16690.86

TOTAL

39
 35000

30000

25000

20000 Current assets

Current liabilities
15000

10000

5000

0
2013-14 2014-15

INTERPRETATION:

In between 2013-14 and 2014-2015, The net working capital position show a down
trend because there is a more proportion decrease in current assets position (inventory loans
and advance) over proportionate increase in current liabilities position (liabilities, interest
accrued on loan and provision) which ultimately resulted in decrease in working capital
position a negative sign of working capital management at Swetal logistics during the
abovementioned period. During this period the current assets position is not satisfactory.

40
Statement Showing Changes in Working Capital of Swetal logistics Ltd.
From the year 2014-15 to 2015-16 (Rs.In Lakhs)

Particular 2014-15 2015-16 Increase Decreases

(A)Current assets

Inventories 3398.07 6996.76 3598.69

Sundry debtors 6106.54 7273.08 1166.54
Cash & Bank bal. 1252.45 912.96 330.49
Loans & advance 10967.68 9332.60 1635.08

TOTAL (A)
21724.74 24524.40

(B)Current liabilities

Liabilities 20801.17 21974.12 1172.95

Provision 427.21 391.82 35.39
Bonds repayable 493.00 481.50 11.50
Interest accrued on loans 9283.34 12551.76 3268.42

TOTAL (B) 31004.72 35399.20

Net working capital

decrease in working capital -9279.98 -10874.80
(A-B)
1594.82 1594.82

-9279.98 -9279.98 6406.94 6406.94

TOTAL

41
 40000

35000

30000

25000

20000
Current assets
15000 Current liabilities
10000

5000

2014-15
2015-16

INTERPRETATION:

In between 2014-15 and 2015-2016, The net working capital position show a down
trend because there is a more proportion decrease in current assets position (inventory loans
and advance) over proportionate increase in current liabilities position (liabilities, interest
accrued on loan and provision) which ultimately resulted in decrease in working capital
position a negative sign of working capital management at Swetal logistics during the
abovementioned period. During this period the current assets position is not satisfactory

42
Statement Showing Changes in Working Capital of Swetal logistics Ltd.
From the year 2015-16 to 2016-17(Rs.In Lakhs)

Particular 2015-16 2016-17 Increase Decreases

(A)Current assets

Inventories 6996.76 5531.49 1465.27

Sundry debtors 7273.08 7318.43 45.34
Cash & Bank bal. 912.96 836.67 85.29
Loans & advance 9332.60 11209.01 1876.41

TOTAL (A)
24524.40 24895.60

(B)Current liabilities

Liabilities 21974.12 20935.38 1038.74

Provision 391.82 251.80 140.02
Bonds repayable 481.50 1981.50 1500.00
Interest accrued on loans 12551.76 16166.46 3614.70

TOTAL (B) 35399.20 39335.14

Net working capital -10874.80 -14439.54 3565.74

decrease in working capital
(A-B) 3565.74

-10874.80 -10874.80 6665.26 6665.26

TOTAL

43
 45000

40000

35000

30000

25000
Current assets
20000 Current liabilities

15000

10000

5000

0
2015-16 2016-17

INTERPRETATION:

In between 2015-16 and 2016-2017, the net working capital position show a down
trend because there is a more proportion decrease in current assets position (Inventory loans
and advance) over proportionate increase in current liabilities position (liabilities, interest
accrued on loan and provision) which ultimately resulted in decrease in working capital
position a negative sign of working capital management at Swetal logistics during the
abovementioned period. During this period the current assets position is not satisfactory

44
Statement Showing Changes in Working Capital of Swetal logistics Ltd.
From the year 2016-17 to 2017-18(Rs. In Lakhs)

Particular 2016-17 2017-18 Increase Decreases

(A)Current assets

Inventories 5531.49 3995.11 1536.38

Sundry debtors 7318.43 11315.64 3997.21
Cash & Bank bal. 836.67 1300.93 464.26
Loans & advance 11209.01 7258.47 3950.54

TOTAL (A)
24895.60 23870.15

(B)Current liabilities

Liabilities 20935 16244.71 4690.67

Provision 251.80 264.33 12.53
Bonds repayable 1981.50 481.50 1500.00
Interest accrued on loans 16166.46
20512.28 4345.82

TOTAL (B) 22474.88 17644.01

Net working capital

decrease in working capital -14439.54 -13632.67
(A-B)
806.87 806.87

-10874.80 -10874.80 6665.26 6665.26

TOTAL

45
 25000

20000

15000 Current assets

Current liabilities
10000

5000

0
2016-17 2017-18

INTERPRETATION:

In between 2016-17 and 2017-2018, the net working capital position show a down
trend because there is a more proportion decrease in current assets position (inventory loans
and advance) over proportionate increase in current liabilities position (liabilities, interest
accrued on loan and provision) which ultimately resulted in decrease in working capital
position a negative sign of working capital management at Swetal logistics during the
abovementioned period. During this period the current assets position is not satisfactory

46
  RATIO ANALYSIS:-

A ratio is a simple arithmetical expression of the relationship of one number to

another. It may be defined as the indicated co-efficient of two mathematical expression. The
techniques of ratio analysis can be employed for measuring short term liquidity or working
capital position of firm. The following ratio may be calculated for this purpose.

1. Current ratio

2. Acid test ratio

3. Absolute liquid ratio or position ratio

4. Inventory turnover ratio

5. Receivable/debtors turnover ratio

6. Payable/creditors turnover ratio

7. Working capital ratio

47
CURRENT RATIO

Current ratio may be defined as the relationship between current assets current
liabilities. This ratio, so know as working capital ratio. Is a measure of general liquidity and
is most widely used to make the analysis of a short terms financial position or liquidity of
firm.

Current Assets

CURRENT RATIO = Current Liabilities

Calculation of current ratio of Swetal logistics from 2013-14 to 2017-18

(Rs.in lakhs)

Year Current assets Current Liabilities Current ratio

2013-14 33829.85 29755.21 1:14:1

2014-15 21724.74 31004.72 0:70:1

2015-16 24524.40 35399.20 0:69:1

2016-17 24895.60 39335.14 0:63:1

2017-18 23870.15 37502.82 0:64:1

48
 45000

40000

35000

30000

25000
Current assets
20000 Current Liabilities

15000

10000

5000

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION:

As a convention current ratio of 2:1 is considered satisfactory in the year 2013-14 The
Swetal logistics recorded high quick ratio than the other year. But the current ratio was not
reaching the ideal ratio of 2:1 then it is on decreasing trend year after year. This is because
there is more proportionate decrease increase in current asset which ultimately resulted in
posing a negative sign of working capital management

49
QUICK RATIO:-

Quick ratio is also known as liquid ratio or acid ratio. The term liquidity reforms to
the ability of firm to pay its short terms obligation as and when they become due. Quick ratio
may be defined as the relationship between quick liquid assets and current or liquid liabilities.
An assets is said to be liquid if it can converted into cash within a short period without loss of
value.

Quick Assets

QUICK RATIO = Quick Liabilities

QUICK ASSETS=CURRENT ASSETS-(INVENTORY+PREPAID EXPENSES)

Calculation of Quick ratio of Swetal logistics from 2003-14 to 2017-18

(Rs.in lakhs)

Year Current Inventory Quick assets Current Quick

assets Liabilities Ratio
2013-14 33829.85 9034.75 24795.10 29755.21 0:83:1

2014-15 21724.74 3398.07 18326.67 31004.72 0:59:1

2015-16 24524.40 6996.76 17527.64 35399.20 0:50:1

2016-17 24895.60 5531.49 19364.11 39335.14 0:49:1

2017-18 23870.15 3995.11 19875.04 37502.82 0:53:1

50
 45000
40000
35000
30000
25000 Current Liabilities

20000 Quick assets

15000 Inventory

10000 Current assets

5000 Year

0
2013-
2014-
14 2015-
15 2016-
16 2017-
17
18

INTERPRETATION:

As a convention quick ratio of 1:1 is considered satisfactory. In the year 2013-14 the
Swetal logistics recorded high quick ratio then the other year. But the quick ratio was not
reaching the ideal ratio of 1:1 this is because of existence of more slow playing debtors and
also increase in interest accrued and due on loan and other current liabilities. The liquidity
position of Swetal logistics is not satisfactory.

51
ABSOLUTE LIQUID RATIO:-

Generally debtors and skill receivable are also considered quick assets but yet there
may doubts regarding their realization into cash immediately. Absolute liquid assets include
cash in hand and cash at bank and marketable securities or temporary investment. The
acceptable norms of this are 50% or 0:5:1 or 1:2 this is called cash ratio.

ABSOLUTE LIQUID ASSETS

ABSOLUTE LIQUID RATIO=CURRENT LIABILITIES

ABSOLUTE LIQUID ASSETS = CASH &BANK + SHORT-TERM SECURITIES

Calculation of Absolute liquid Ratio of Swetal logistics from 2013-14to 2017-18

(Rs.in lakhs)

Year Absolute liquid Current Liabilities Absolute liquid

assets(IN LAKHS) Ratio
2013-14 625.12 29755.21 0:02:1

2014-15 1252.45 31004.72 0:04:1

2015-16 921.96 35399.20 0:03:1

2016-17 836.67 39335.14 0:02:1

2017-18 1300.93 37502.82 0:03:1

52
 40000

35000

30000

25000
Absolute liquid assets
20000
Current Liabilities
15000

10000

5000

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION:

Among the five year period, the highest absolute liquid ratio was recorded during the
year 2014-15 with 0.04 which is less than the rule of thumb i.e.0.5 the absolute liquid assets
position of GTNL is not satisfactory.

53
INVENTORY TURNOVER RATIO

Every firm has to maintain a certain level of inventory, so as to meet the requirement
of the business. But the level of inventory should neither be too high nor too low. Inventory
turnover ratio is also known as stock velocity, It would indicate whether inventory has been
efficiently used or not.

COST OF GOODS SOLD

INVENTORY TURNOVER RATIO = AVERAGE INVENTORY

Calculation of ITR of Swetal logistics from 2013-14 to 2017-18

Year Cost of goods Average Inventory turnover

sold(in lakh) Inventory(in lakh)
2013-14 17650.72 9113.61 1.93

2014-15 15629.85 6216.41 2.51

2015-16 11588.76 5197.42 2.22

2016-17 11463.49 6264.12 1.83

2017-18 14204.72 4763.30 2.98

54
 30000

25000

20000

15000 Inventory turnover

Average Inventory(in lakh)
10000 Cost of goods sold(in lakh

5000

0
2013-14
2014-15
2015-16
2016-17
2017-18

INTERPRETATION:

The inventory turnover ratio is highest in the year 2017-18 and recorded lowest in the
year 2015-16.It is also observed that the inventory position fell drastically in the year 2014-
11 when compared to previous year 2014-15.also the cost of goods sold declined to a major
effect from 2014-15 to 2016-17 and improved during 13-14.It indicates that inventory is
efficiently managed during 17-18.

55
DEBTORS TURNOVER RATIO:-

Debtor’s turnover ratio indicates the velocity of debt collection of firm. In simple it
indicates the number of time average debtors are turned over during a year.Genrally the
higher the value of debtors turn over the more efficient is the management of debtors/sales or
more liquid the debtors. Similarly low debtors turn over implies inefficient management of
debtor/rate and less liquid debtors.

NET CREDIT ANNUAL SALES

DEBTORS TURNOVER RATIO = AVG.DEBTORS

Calculation of DTR of Swetal logistics from 2013-14 to 2017-18

Year Sales (in lakhs) Average debtors DTR

2013-14 14749.73 9013.21 1.6

2014-15 5956.14 7986.61 0.7

2015-16 10942.52 6689.81 1.6

2016-17 12205.34 7295.76 1.7

2017-18 17539.02 9317.03 1.8

56
 30000

25000

20000

15000 Sales (in lakhs)

Average debtors

10000

5000

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION:

The ratio recorded highest in the year 2017-18 i.e.1.8 and the lowest was recorded in
the year 2014-15 i.e.0.75.this happened due decrease in sales during 2014-15. It indicates that
the debtors management at Swetal satisfactory.

57
WORKING CAPITAL TURNOVER RATIO:-

Working capital turnover ratio indicates the velocity of the utilization of net working.
This ratio indicates the numbers if time the working capital is turnover in the course of year.

COST OF GOODS SOLD

WORKING CAPITAL TURNOVER RATIO = NET WORKING CAPITAL

Calculation of WCTR of Swetal logistics from 2013-14 to 2017-18

Year Cost of goods sold Net working capital Working capital

(in lakh) (in lakh) turnover ratio
2013-14 17650.72 4074.64 4.33

2014-15 15629.85 -9279.98 -1.68

2015-16 11588.76 -10874.80 -1.06

2016-17 11463.49 -14439.54 -1.79

2017-18 14204.72 -13632.67 -1.04

58
 20000

15000

10000

5000

0
Cost of goods sold (in lakh)
2013-14 2014-15 2015-16 2016-17 2017-18
-5000 Net working capital (in lakh)
-10000 Working capital turnover ratio
-15000

-20000

INTERPRETATION:

The working capital turnover ratio was recorded high in the year 2006-
07.After that it goes on declining to -1.68 in year 2007-08 the ratio was declined to greater
extent due to the inefficient management of working capital management.

59
CHAPTER-5
CONCLUSION

60
 CONCLUSION

1. Swetal industries have adequate working capital for running its day to day business.

2. The working capital of swetal industries is on decreasing trend. It has been decreasing

year after year.

3. The company’s current liabilities are on increasing trend. It is increasing year after year.

4. The company current assets have been decreasing year after year.

5. The company working capital management is not satisfactory.

61
CHAPTER-7
SUGGESTION

62
 SUGGESTION

1. Company has to induct long term funds by ways of share capital, equity term
loans/unsecured loans from promoter to improve its current ratio as per the norms.

2. Company should raise funds through short term sources for short term requirements of
funds.

3. The company should maintain a proper level of inventory. So that why the unnecessary
blockage of funds can be avoided.

4. The current assets of the firm are increasing year to year.

63
CHAPTER-7
BIBLIOGRAPHY

64
 BIBLIOGRAPHY
BOOKS:-

 “Financial Management” - (P.V. KULKARNI)

 Financial Management – I.M.Pandey

 Financial Statement Analysis – Dr. Anjan Bhattacharya

 WEBSITES :-

 www.google.com.in
 www.swetallogistices.co.in

65
 ANNEXURE

Balance sheet of Swetal logistics pvt. Ltd.

From the year 2016-17 to 2017-18 (Rs. In Lakhs)

Particular 2016-17 2017-18

(A) Current assets

Inventories 5531.49 3995.11

Sundry debtors 7318.43 11315.64

Cash & Bank bal. 836.67 1300.93

Loans & advance 11209.01 7258.47

TOTAL (A) 24895.60 23870.15

(B)Current liabilities

Liabilities 20935 16244.71

Provision 251.80 264.33

Bonds repayable 1981.50 481.50

Interest accrued on loans 16166.46 20512.28

TOTAL (B) 22474.88 17644.01

Net working capital decrease in working capital -14439.54 -13632.67

(A-B)

Increased 806.87
TOTAL -10874.80 -10874.80

66