INTERNSHIP REPORT ON

GAUTAM BUILDERS PVT. LTD.

An Organisational Study with the specific reference to
“Finance Department”

Author Faculty Guide

Reyaan Khan Dr. Geeta Mishra
B.Com (Hons.) Eve.
5th Semester
Submission Date: 12 th July 2019
 ACKNOWLEDGEMENT
Any achievement does not come from one's contribution, but it requires
support from superiors to make the task uncomplicated. This project is
no exception.
I would like to take the opportunity to express my gratitude to all those
who have been the part of this report in some way or the other. First &
foremost, I would like to thank my company guide for his valuable
guidance, & for getting knowledge for my career growth.
I am heartily thankful to my Institute Amity College of Commerce &
Finance (Amity University) for giving me an opportunity to undertake a
very useful and interesting project.
I am indebted to the helping hand of my faculty guide Dr. Geeta Mishra
, who by his continuous reinforcement and best wishes pioneered me
into an absolutely intense and corporate world.
Lastly, it is difficult to forget the help and moral support of my family
and friends without whose motivation it would have been a difficult task
altogether.
 DECLARATION
I the undersigned, hereby declare that the following documented project
report entitled "Summer Internship on "Gautam Builders" is a bona fide
work prepared by me. This is an organized and authentic work done for
the partial fulfillment of Bachelors of Commerce (Honors). The findings
in this report are based on the data collected from different sources of
information available. All the endeavors put in the completion of this
task are genuine and original to the best of my knowledge.

REYAAN KHAN
B.Com(Hons.)Eve.
5th SEMESTER
 CERTIFICATE
I, Dr. Geeta Mishra hereby certify that Mohd. Reyaan Khan, student of
Bachelor of Commerce at Amity College of Commerce and Finance,
Amity University Uttar Pradesh has completed the “Summer
Internship”, under my guidance

CONTENTS
 S.No. TITLE Pg No.
1. Executive Summary
2. Overview of Industry
3. Introduction of the Company
4. Organisational Strucure & Details
5. Corporate Social Responsibility
6. Functionl Department-Finance Department
7.  Structure
 Roles of their heads
 Fiancial Structure
 Timeline
Company Analysis
8.  SWOT Analusis
 BCG Matrix
 Porter’s 5 forces

EXECUTIVE SUMMARY
The internship report is on the Finance Department of Gautam Builders
Pvt. Ltd. The objective of the report is to study & analyze the finance
department of Gautam Builders. Both Primary & Secondary data are
used to prepare the report.
The report is divided into 6 Chapters, named Introduction of the
Company, Organization Structure, Functional Department, Company
Analysis, Finding & Suggestion & Conclusion.
The first chapter deals with the introduction of the company that consists
of the background, future plans & challenges of the company. The first
chapter includes the background of the company that includes its past
i.e., it includes its date of incorporation, its journey to become a
successful company.
The second chapter gives a brief description of the Organization
Structure which describes the structure of the organization ( name of all
the directors, managing director, and the various department) &
Corporate Social Responsibility (CSR).
The third chapter includes the functional department of the company &
the role & responsibilities of the respective departmental head; here the
study is conducted on the Finance Department of Gautam Builders.
The fourth chapter is about the different conceptual framework of the
company i.e., company analysis which includes the BCG Matrix,
SWOT, Market Share etc.
The fifth chapter is about the different finding & suggestion on the area
of internship. The sixth chapter is about the conclusion &
recommendations which are drawn by the analysis of whole study.

OVERVIEW OF CONSTRUCTION INDUSTRY

According to GlobalData, the Indian construction industry regained its
growth momentum in 2018, helped by positive developments in
economic conditions, improvement in investor confidence, and
investments in transport infrastructure, energy, and housing projects.The
government’s ‘Housing for All’ initiative aims to build 20 million
affordable homes for the urban poor by 2022. This will provide a
significant boost to residential construction (the market’s largest
category), which will account for a third of the industry’s total value by
2023.In its 2018-19 budget, the government increased its expenditure
towards infrastructure development by 20.9% from Rs 4.9 trillion
(US$75.9 billion) in the financial year 2017-2018, to Rs 6 trillion
(US$89.2 billion)The industry contributes 55% share in the Steel
industry, 15% in the Paint industry and 30% in the Glass industry.
The Construction industry in India is expected to grow at 5.6% during
2016-20, compared to 2.9% during 2011-15. The activities that
registered the highest growth include export cargo (10%), highway
construction/widening (9.8%), power generation (6.6%), import cargo
(5.8%) and cargo at major ports (5.3%).

will be required to spend $ 454.8 bn on infrastructure development over

the period of five years (2015-20), with 70% of funds needed for power,
roads and urban infrastructure segments
Expected cement capacity addition of 80-100 MT per annum over next
five years.

INTRODUCTION OF THE COMPANY

Mission: “To provide economical households for every individual”
Vision: “World-Class Vertically Integrated, International, Professional
Organization”
Purpose: “Transforming Business-Enriching Lives”
Gautam group is a successful construction company. They are amongst
the reputed construction companies. in providing value-added
construction services to our customers by creating a successful
partnership with them throughout the construction process.
Their pledge is to establish lasting relationships with our customers by
exceeding their expectations and gaining their trust through exceptional
performance by every member of the construction team.
Established in 2014, headquartered in Noida, Uttar Pradesh. It began its
operation then and is a general contractor offering construction services
in terms of Site Analysis, Feasibility Studies, Preliminary Design
Studies, Permit/Zoning Applications, etc. They handle various industrial,
distribution, manufacturing, office, retail, recreational, healthcare and
commercial projects in the Chicago area and midwest regional markets.
To perform for our customers the highest level of quality construction
services at fair and market competitive prices. * To ensure the longevity
of our company through repeat and referral business achieved by
customer satisfaction in all areas including timeliness, attention to detail
and service-minded attitudes. * To maintain the highest levels of
professionalism, integrity, honesty and fairness in our relationships with
our suppliers, subcontractors, professional associates and customers. Our
mission is:
• To perform for our customers the highest level of quality construction
services at fair and market competitive prices.
• To ensure the longevity of our company through repeat and referral
business achieved by customer satisfaction in all areas including
timeliness, attention to detail and service-minded attitudes.
• To maintain the highest levels of professionalism, integrity, honesty
and fairness in our relationships with our suppliers, subcontractors,
professional associates and customers.
•To deliver high-quality, cost-effective projects on schedule by
employing and supporting motivated, flexible, and focused teams. We
value the importance of our relationships and will continue to remain
fair and true in our dealings with all employees, clients, vendors, and
partners
 •. Our clients count on our dependability, our drive, and our integrity.
We take great pride in our accomplishments and build on them every
day.
•To be the most honest and ethical trade partner of choice. To provide
superior carpentry labor and building components to the residential and
commercial construction industry. To foster a work environment that
encourages new ideas, new innovations.
Residential

Commercial

Heavy civil
INDUSTRY
Industrial

Environmental constructions

Components SECTORS

Development design/ build estimate

Designed project sales

Surveying to architectural specifications

Quality earth work and pipe work

Complete sewer and utility

Material hauling including recyclable

Quality hot mix Asphalt production

Hot mix asphalt paving

Commercial concrete curbing

Flat work

Commercial salting
 ORGANISATION STRUCTURE & DETAILS
The Board of Director consists of altogether 5 members. The Board of
Directors has 1 chairman and 2 Directors and 2 Whole Time Directors.
The decision making process & the chain of authority flows from top to
bottom. All decisions related to all branches are taken by the head office
in Noida, Uttar Pradesh. The managing director of GAUTAM
BUILDERS is Nischal Gautam.
LIST OF BOARD OF DIRECTORS
S.No. Name Date of Joining Title
1. Anuj Kumar Gupta 10 May 2014 Chairman
2. Geeta Kumar 01 June 2014 Director
3. Vijay Dayal 24 June 2014 Director
4. Ankit Gupta 01 October 2015 Whole Time
Director
5. Aman Kumar 01 January 2015 Whole Time
Director
 Other branches works under the head office. The manager has the full
authority & responsibility on their respective branches. The authority &
decision making process flows from top to bottom. The responsibility
flows from bottom to top. All decisions related to the operation of the
branch offices are taken by the manager.

DEEPAK GAUTAM (DIN

00273844)

GEETA KUMAR (DIN

00284479)

VIJAY DAYAL (DIN

00305076)

ANKIT GUPTA (DIN

02666658)
BOARD OF AMAN KUMAR (DIN 06815934)
DIRECTORS

ABHAY KUMAR
CONSTRUCTI MANAGING
GUPTA
ON DIRECTOR
DIN 00273668

FINANCE & MARKETING RESEARCH & HUMAN

ACCOUNTS DEVELPOMENT RESOURCE
 CORPORATE SOCIAL RESPONSIBILITY

Organizes evening classes

in factory premises
DISHA- A school for
Provides financial
mentally challenged
support to under
kids.
privileged in many
other social
.initiateives. GAUTAM

Organizes Eye Camps

Supports Ramanuj in Hospital every
Gautam Orphanage month for free.
for physically
challenged children. Gyanodya Vatika, a school for
poor children providing free
education.

BUILDINGS

The spirit of corporate social responsibility is imbibed deed into the

culture of Gautam groups. With the noble mission of putting a smile on
resident, Gautam constructions take utmost care that only quality
construction leave units, & if any problem is faced by the society it is
earnestly looked into.
Besides, Gautam Group operates a school, “Gyanodya Vatika” where
children, like rag-pickers etc who cannot afford a school, are given free
education; evening classes are organized for imparting vocation training
like sewing & basic computer know how.
Gautam Group also operates a full time hospital a full hospital for poor,
at the Noida Headquarter.
All these efforts are beyond the numerous camps & missions, like the
camp for physically challenged, orphanages etc. the company believes in
complete welfare of people involved with Gautam. Thus, evening
classes are organized in the premises, where the staff members educate
the production labor in the basics of reading & writing.
 FUNCTIONAL DEPARTMENT
DEPARTMENT

STRUCTURE

DIRECTOR OF FINANCE

FINANCE MANAGER

ASST. MANAGER ASST. MANAGER ASST. MANAGER

(BUDGETING) (TREASURY) (GENERAL ACCOUNT)

ASST. ACCOUNTS JR. CLERK CASHIER

ACCOUNTANT CLEARK
Finance Department is the part of the organization that manages money.
It is the main part of a company for every department. It maintains all
the transactions related to the construction dealings. The sale accounts,
purchase accounts, etc. are maintained by this department. The
department also maintains the Statement of Profit & Loss & Balance
Sheet. Allocation of funds, Raising funds, Profit Planning are the most
important function performed by the department.
In Gautam Builders the Finance Department is divided in three sub
sections:

 Budgeting
 General Accounting
 Treasury
Budgeting department is given budget of every department as estimated
by each department. Departmental budget shows the requirement of
overall financial year. Budget department’s work to estimate the next
overall budget of company by observing past budgets. Actual
expenditure of current year is compared with the actual expenditure of
preceding year.
In general accounting department, all matters relating to recording of
transactions like payables, receivables, fixed assets, expenses & sales tax
etc are recorded.
Treasury department deals with all the cash relate matters. All the
cheques are made & signed in this department.

ROLE & RESPONSIBILITIES OF FINANCE MANAGER

 Profit Planning is the most important responsibility of the finance

managers.
 Understanding the capital markets to for purchase & sale of
securities.
 Allocation of funds should be done in such a manner that they are
optimally used.
 Prepare Financial Statement (Statement of Profit & Loss &
Balance Sheet), business activity reports.
 Review the financial reports & seek ways to reduce or cut the
costs.
 Analyze the market trends to find out opportunities for growth &
expansion or for acquiring new companies.
 Supervising the employees who perform financial budgeting &
reporting.
 Do research & advise seniors in order to increase the profits of the
company.
 Monitoring the company’s finance is the major responsibility of
the manager.
  Help management in making betterment of the company.
FINANCIAL STRUCTURE
CAPITAL STRUCTURE OF DAYAL FERTILISERS

Particulars Amt(₹)
1. Authorized Capital
i) 50000 Equity Shares of ₹1000 each 50,000,000
ii) Non-Redeemable Preference shares -
iii) Redeemable Preference shares -
2. Issued Capital
i) 42400 Equity Shares of ₹1000 each 42,400,000
ii) Non-Redeemable Preference shares -
iii) Redeemable Preference shares -
3. Paid up Capital
i) 42400 Equity Shares of ₹1000 each 42,400,000
ii) Non-Redeemable Preference Shares -
iii) Redeemable Preference Shares -
4. Proposed Bonus Shares -
5. Calls in Arrears -
6. Calls in Advance -
7. Total (3+4+5+6) 49,400,000
TIMELINE

Annual Return Filled

7 months ago Loan modified for SBI

3 years ago

Loan modified for SBI

4 years ago

Balance Sheet filled

3 years
 INCOME STATEMENT FOR LAST 4 YEARS
Particulars 2016 2015 2014 2013
1. Revenue from Operations
Contract revenue 15,663.87 12,352.67 10,111.86 11,003.58
Sub-Contract 14,021.11 12,694.84 10,733.67 10,669.78
29,684.98 25,047.51 20,845.53 21,643.36
Revenue 715.67 331.89 536.60 537.42
2.Other Revenue
30,400.65 25,379.40 21,382.13 22,210.78
3.Turnover (1+2)
4. Operating Expenses
a) Cost of Material
Consumed
-Raw Material 16,662 14,839.26 13,973.68 14,193.17
-Stores & Spares 128.93 127.73 140.45 152.97
-Construction material 52.43 53.27 56.63 59.22
-Construction 287.34 294.18 268.49 249.99
Equipments 1,491.81 1,451.61 1,303.10 996.75
-Power, Fuel

328.42 340.34 381.24 207.47

Less: Stock transfer for
(a) self Consumption
6,434.76 3,928.45 2,101.72 1,715.06
b) Labour
c) Fuel & Lubricant
d) Employee Benefit
Expense 248.54 89.23 (606.04) 131.46
e) Finance cost
f) Depreciation & 961.56 941.02 850.01 874.18
Amortization expenses 906.77 771.03 861.26 789.52
g) Other Expenses
277.82 297.29 514.92 488.02
Total Expenses 2,257.14 1,887.21 1,889.37 1,660.48
5. Profit Before Tax (3-4)
6.Tax 29,380.76 24,339.94 20,974.35 21,103.35
7.Profit After Tax 1,019.89 1,039.46 407.78 1,107.43
Profit Transferred to: 314.39 392.59 88.97 378.71
-Investment fluctuation 705.50 646.87 318.81 728.72
 fund
300.00 10.00 - -
8. Net Profit as per Multi
State Cooperative
Societies Act, 2002 405.50 636.87 318.81 728.72

(Rs. in Crore)
 BALANCE SHEET AS ON 31st MARCH
Particulars 2016 2015 2014 2013
I. Equity and Liabilities
1) Shareholder’s Fund
a) Share Capital 424.39 424.98 425.78 425.88
b) Reserves & Surplus 7,087.26 6,741.05 6,084.34 5885.31
Total- Shareholder’s Fund 7,511.65 6,896.03 6510.12 6281.19

2) Non-Current Liabilities
a) Long term Debt 127.83 290.59 342.48 353.83
b) Deferred Tax Liability 369.23 372.65 400.22 485.47
c) Other Liabilities 19.67 14.96 7.49 4.03
d) Long Term Provisions 346.66 320.85 301.84 272.92
Total- Non-Current Liabilities 863.39 999.05 1,052.03 1,116.25
3) Current Liabilities
a) Short term Debt 14,116.05 10,445.23 9,157.26 10,224.96
b) Accounts Payable 1,322.85 1,378.03 1,006.27 1,566.34
c) Other Current Liabilities 862.34 634.70 473.85 639.11
d) Short Term Provisions 303.11 277.84 245.01 237.56
Total- Current Liabilities 16,604.35 12,732.80 10,879.39 12,687.97
Total- Equity and Liabilities 24,979.39 20,630.88 18,441.54 20,085.41

II. Assets
1) Non- Current Assets
a) Fixed Assets
-Tangible 4,495.10 4,361.21 4,486.83 4,409.25
-Intangible 15.63 20.12 28.01 18.91
-Capital work in
Progress 597.15 334.17 318.65 593.08
-Intangible Assets under
Development - - - 2.38
b) Non Current Inv. 2,714.44 2,762.35 2,642.78 2,421.62
 c) Long Term Loan &
Advances 355.37 227.15 242.74 246.24
d) Other Non Current
Assets 5.82 5.93 6.03 9.47
Total- Non- Current Assets 8,183.51 7,710.93 7,725.04 7,700.95

2) Current Assets
a) Current Investments 687.38 - - -
b) Inventory 2,289.29 2,452.94 2,542.85 2,109.72
c) Trade Receivables (net) 4,025.75 2,017.83 1,950.20 3,340.08
d) Cash and Cash
Equivalents 186.45 115.15 153.49 208.60
e) Short Term loans &
Advances 148.95 259.03 232.76 191.94
f) Other Current Assets 9,458.06 8,075.00 5,837.20 6,534.12
Total- Current Assets 16,795.88 12,919.95 10,716.50 12,384.46
Total- Assets 24,979.39 20,630.88 18,441.54 20,085.41

(All figures in thousands)

CASH FLOW STATEMENT FOR THE YR ENDING 31 MARCH 2016

PARTICULARS AMOUNT
(A) Cash Flow From Operating Activities
Net Profit before Tax 1,019.89
Adjustment For:
Depreciation & Amortization 278.03
Interest Expense 906.77
Interest Income (107.72)
Dividend Income (189.79)
PFDD -
Amount charged off 0.07
Fixed Assets written off 4.22
Profit on Sale of Non Current Investments (155.73)
Loss on Sale of Non Current Investments 17.56
Unrealized Exchange Rate Variation (net) (26.38)
Loss on Disposal 0.87
Provision for Diminution in value of investments 37.86
Liabilities/Provision written back 16.19
Operating Profit before Working Capital Changes 1,769.46
Adjustment for Changes in Working Capital
Decrease in Trade Payables (55.18)
Increase in Long Term Provisions 25.81
Increase in Short term Provisions 22.92
Increase in Other Current Liabilities 195.37
Increase in Long Term Liabilities 5.53
Increase in Trade Receivables (2,007.92)
Decrease in Inventories 163.65
Increase in Long Term Loan & Advances (15.62)
Decrease in Short Term Loan & Advances 89014
Increase in Other Current Assets (1351.84)
Decrease in Other Non Current Assets 0.11
Operating Profit After Working Capital Changes (1,158.57)
 Tax Paid (257.81)
Payment towards Cooperative Fund (9.56)
Payment to Cooperative Welfare Fund (0.51)
Donations Paid (0.52)
Net Cash used in Operating Activities (A) (1,426.97)

(B) Cash Flow from Investing Activities

Purchase of Fixed Assets, including Intangible Assets,
Capital Work in Progress & Capital Advances. (789.40)
Purchase of Non-Current Investment (539.16)
Dividend Received 189.79
Interest Received 79.08
Net Cash Flow used in Investing Activities (B) (1,059.69)

(C) Cash Flow from Financing Activities

Repatriation of share capital (0.59)
Repayment of Long Term Borrowings (162.76)
Proceeds from Short Term Borrowings 3,688.47
Interest Paid (880.07)
Dividend Paid (87.09)
Net Cash Flow from Financing Activities (C) 2,557.96
Total Cash Flow/Used 71.30
Opening Cash & Cash Equivalents 115.15
= Closing Cash & Cash Equivalents 186.45
 3,000.00

2,000.00

1,000.00

0.00 Operating Activities

2016 2015 2014 2013 Investing Activities
-1,000.00 Financing Activities

-2,000.00

-3,000.00

-4,000.00

CASH FLOW FROM OPERATING, INVESTING & FINANCING

ACTIVITIES OF LAST 4 YEARS
 RATIO ANALYSIS OF DAYAL FERTILIZERS
LIQUIDITY RATIO

 Current (Working Capital ) Ratio:

Current Assets
Current Ratio =
Current Liabilities
Current Assets= Current Investments + Inventories + Trade
Receivables + Cash & Cash Equivalents + Short
Term Loans & Advances + Other Current Assets

Current Liabilities= Short Term Borrowings + Trade Payables+

Other Current Liabilities + Short Term Prov.

16,795.88
2016= = 1.011:1
16,604.35

 Liquid/ Quick/ Acid Test Ratio

Liquid Assets
Liquid Ratio=
Current Liabilities

Liquid Assets= Current Assets – Inventories – Other Current Assets

Or
Liquid Assets= Current Investments + Trade Receivable (Bill
Receivables + Debtors – PFDD) + Cash & Cash
Equivalents + Short Term Loans & Advances
Current Liabilities= Short Term Borrowings + Trade Payables+ Other
Current Liabilities + Short Term Provisions
5048.53
2016= = 0.304:1
16,604.35

SOLVENCY RATIO

 Debt to Equity Ratio

Debt
Debt to Equity Ratio=
Shareholder’s Fund
Debt= Long Term Borrowings + Long Term Provision

Shareholder’s Fund= Share Capital + Reserves & Surplus

Or
Shareholder’s Fund= Non-Current Assets + Working Capital +
Non-Current Liabilities
 474.49
2016= =0.063:1
7,511.65

 Total Assets to Debt Ratio

Total Assets
Total Assets to Debt Ratio=
Debt
Total Assets= Non-Current Assets + Current Assets
Debt= Long Term Borrowings + Long Term Provision

2016= 24,979.3 = 52.64:1

9474.49
 Proprietary Ratio

Proprietor’s Fund/ Shareholder’s Fund

Proprietary Ratio=
Total Assets
Shareholder’s Fund= Share Capital + Reserves & Surplus
Or
Shareholder’s Fund= Non-Current Assets + Working Capital +
Non-Current Liabilities

Total Assets= Non-Current Assets + Current Assets

7,511.65
2016= = 0.3:1
24,979.39
 ACTIVITY RATIO
 Inventory Turnover Ratio
Cost of Revenue from Operations
Inventory Turnover Ratio=
Average Inventory

Cost of RFO= Cost of Material Consumed + Purchase of Stock in

trade + Change in inventory + Direct Expenses
Opening Inventory + Closing Inventory
Avg. Inventory=
2

29,380.76
2016= = 13.39 times
2371.115

Average Days of Inventory

365
Average Days of Inventory=
Inventory Turnover Ratio
365
2013= 13.39 = 27days

 Trade Receivables / Debtors Turnover Ratio

Credit Revenue from Operations
 Trade Receivables Turnover Ratio=
Average Trade Receivables

Credit RFO = Total RFO – Cash RFO

Op Trade Receivables + Cl Trade Receivables

Average Trade Receivables=
2

If Credit RFO is not given. The Ratio can be worked out as

follows:
Total Revenue from Operations
Trade Receivables Turnover Ratio=
Cl Trade Receivables
30,400.65
2013= = 13.27 times
2,289.29

Average days of Debtors

365
Average days of Debtors=
Trade Receivables Turnover
Ratio
2016= 365 = 27 days
13.27

 Trade Payables / Creditors Turnover Ratio

Net Credit Purchase

Trade Payables Turnover Ratio=
Average Trade Payables
Net Credit Purchase= Gross Credit Purchase – Credit
Purchase Returns
Op Trade Payables+ Cl Trade Payables
Average Trade Payables=
2
 Another Method, when credit Purchase is not given then this ratio
can be worked out as follows:
Total Purchases
Trade Payables Turnover Ratio=
Average Trade Payables
Total Purchase = Cl Inventory + COGS – Op Inventory

18,130.5
2016= = 5.99 times
23021.79

Average days for Creditors/ Trade Payables

365
Average days for Creditors=
Trade Payables Turnover Ratio
365
2013= = 61days
5.99

 Working Capital Turnover Ratio

Revenue from Operations

Working Capital Turnover Ratio=
Working Capital
Working Capital= Current Assets – Current Liabilities

30,400.65
2016= = 158.6 times
191.53
 PROFITABILITY RATIO
 Gross Profit Ratio
Gross Profit
Gross Profit Ratio= X 100
Revenue from Operations

Gross Profit= Revenue from Operation – Cost of RFO

29,380.76
2013= X 100 = 96.64%
30,400.65

 Operating Ratio

Cost of RFO + Operating Expenses

Operating Ratio= X 100
Revenue from Operations

Cost of RFO= Cost of Material Consumed + Purchase of Stock in

Trade + Change in inventory + Direct Expenses

Operating Expenses= Employees Benefit Exp + Dep + Other

Expenses

18294.09
2016= X 100 = 60.17%
30,400.65
 Operating Profit

Operating Profit
Operating Profit= X 100
Revenue from Operations

Operating Profit= Net Profit (before tax) + Non Operating

Expenses-Non Operating Incomes
Or
Operating Profit= Gross Profit + Other Operating Incomes – Other
Operating Expenses
1,019.89 X 100
2016= = 3.35%
30,400.65

 Net Profit Ratio

Net Profit after Tax

Net Profit Ratio= X 100
Revenue from Operations

Net Profit after Tax= Gross Profit + Indirect Expenses – Other

Incomes

705.50 X 100
2016= = 2.32%
30,400.65

 Return on Investment
Net Profit Before Interest, Tax & Dividend
Return on Investment= X 100
Capital Employed

Net Profit before Tax, Interest & Dividend=

 Gross Profit + Other Income – Indirect Expenses
Or
Net Profit after Tax + Tax + Dividend + Interest
Working Capital = Current Assets – Current Liabilities
1,019.89
2013= X 100 = 12.17%
8,375.04
 INTRODUCTION TO WORKING CAPITAL
MANAGEMENT
Working capital refers to the amount of fund required to finance current
assets. It is a measure of both a company's efficiency and its short-term
financial health. The working capital ratio is calculated

Working Capital = Current Assets – Current Liabilities

The term working capital refers to the amount of capital which is readily
available to a company. That is, working capital is the difference
between resources in cash or readily convertible into cash (Current
Assets) and organizational commitments for which cash will soon be
required (Current Liabilities).

Current Assets are resources which are in cash or will soon be converted
into cash in "the ordinary course of business".

Current Liabilities are commitments which will soon require cash

settlement in "the ordinary course of business".

In a company's balance sheet components of working capital are

reported under the following headings:
Current Assets: Current Liabilities:
Liquid Assets (cash and bank Bank Overdraft
deposits) Creditors and Payables
Inventory Other Short Term Liabilities
Debtors and Receivables

“Positive working capital means that the company is able to pay off its
short-term liabilities. Negative working capital means that a company
currently is unable to meet its short-term liabilities with its current assets
(cash, accounts receivable and inventory). Also known as "Net Working
Capital”.
WORKING CAPITAL CYCLE
CASH

RAW MATERIAL STOCK

WORK IN PROGRESS

FINISHED GOODS

DEBTORS

BILLS RECEIVABLE

BANK

CASH
 STATEMENT SHOWING CHANGE IN WORKING CAPITAL
Particulars Mar17 Mar16 Increase Decrease
Current Assets
a) Current Investment 687.38 - 687.38
b) Inventory 2,289.29 2,452.94 (163.65)
c) Trade Receivables 4,025.75 2,017.83 2007.92
d) Cash & Cash Equi. 186.45 115.15 71.3
e) Short Term Loans &
Advances 148.95 259.03 (110.008)
f) Other Current Assets 9,458.06 8,075.00 1383.06
TOTAL (A) 16,795.88 12,919.95 3875.93 (273.73)
Current Liabilities
a) Short term debt 14,116.05 10,445.23 (3670.23)
b) Account Payables 1,322.85 1,378.03 55.18
c) Other Current
Liabilities 862.34 634.70 (227.64)
d) Short Term Provision 303.11 277.84 (25.27)
TOTAL(B) 16,604.35 12,732.80 (3923.73) 55.18
(A-B) 191.53 184.15 (47.8) (218.55)

COMPANY ANALYSIS
SWOT ANALYSIS
SWOT Analysis is an acronym for Strengths, Weaknesses,
Opportunities & Threats. SWOT Analysis is a powerful tool for
understanding the Strengths, Weaknesses, Opportunities & Threats of an
Organization. It helps to uncover the opportunities that might be
available to a company to exploit & use to its advantage & by
understanding the weaknesses the threats can be reduced & managed
better. Strengths & Weaknesses are usually internal to the organization
whereas Threats & Opportunities exists externally.
SWOT is a basic, analytical framework that assesses what an
organization can & cannot do, for factors both internal (strengths &
weaknesses) as well as external (opportunities & threats). SWOT
Analysis determines what assists the firm in accomplishing its
objectives, & what obstacles must be overcome or minimized to achieve
the desired results.
As the name states, SWOT Analysis examines the 4 elements:

 Strengths- Internal Factors & resources that support a successful

outcome.
 Weaknesses- Internal Factor resources that work against a
successful outcome.
 Opportunities- External Factors the project can capitalize on or use
to its advantage.
 Threats- External Factors that could harm the project.

SWOT ANALYSIS
STRENGTHS

 Technology
Technology upgradation/innovation has increased the company’s
productivity & distributional channels because of company
adoption of modern technology.

 Network
Gautam Builders has a strong network all over the country that
helps availability even in far-flung areas.
 Low cost
The cost of construction is very low due to availability of skills
workforce at cheap rates. Availability of cheap labor is an
important factor that determines the cost of construction.

 Growth
Gautam Builders is one of the leading companies of India. This
industry is expected to grow at significant rate & internal strength
is quite strong & good management as well.

 Brand Name
A strong brand name is a major strength of any company. Brand
name gives Gautam the ability to charge higher price for their
construction because customers place additional value in the
brand.
 Customer Loyalty
Customers are loyal to the construction industry & hence instead of
targeting all customers Gautam targets new customers in order to
grow their business.

 Barriers to entry
Since huge amount of investment is made to enter in the
construction industry. The number of players a& the level of
competition decreases which increases the profitability of Gautam
Builders.
WEAKNESSES

 High debt
A high debt burden increases the risk that the company can go
bankrupt if they make poor business decision which will increase
the debt interest payment.

 High Research & Development cost

It takes on an average several years in construction which requires
a large amount of investment plus time.

 More Industry
Festivals plays an important role in the construction industry. The
demand depends on locality & area. If both are not good it will
directly affect the demand of customers.

 Insufficient Production
 Due to increase in the demand of the flats, Gautam constructions
sometimes is not able to complete the demand for their customers
in the market i.e., the company is not able to provide its products in
full fledged way.

 Customer Service
Weak or poor customer service impacts Gautam Builders
reputation & make its customers to switch to other players in the
existing market.

 Technology
Lack of proper technology or using technology that is outdated
decreases the Gautam capability to compete against its rivals in the
market as outdated/ obsolete technology incurred huge losses.

OPPORTUNITIES

 Online Markets
Online market offers Gautam an opportunity to greatly expand its
business. Gautam Builders can target markets to a much wider
group of customers in low cost.

 New Markets
New demand of flats due to rising population to expand their
business & diversify their portfolio of its products & services.
  Leverage
Leveraging the balance sheet allows Gautam's to quickly expand
its business in other market & products.

 Increase in usage of flats

With almost 35-40% middle class people have to pay heavy
amount for flats due to demand.

 Network
Gautam's by working on its network can increase its contacts.

THREATS

 Political Risk
Politics can increase risk factors, as government can quickly
change business rules that negatively affect on its business.

 Competitions
An intense competition decreases the Gautam Builders’ profits,
because competitors can make customers switch from their place
to the competitors place.

 Government Intervention
 Changes in the rules & regulations can negatively affect Gautam
Builders.

BCG MATRIX

The BCG Matrix