130

CHAPTER: 7

MANAGEMENT OF INVENTORY, RECEIVABLES, CASH AND

PAYABLES

7.1 MANAGEMENT OF INVENTORY

Every company requires inventory for effective management of its activities. Inventory

constitutes a major part of current assets in most of the organizations. It comprises of raw

materials, work-in-progress, finished goods, consumables and stores. Management of these

components of inventory is very useful in order to keep them at optimum level. For this

purpose coordination among material department, manufacturing department, finance

department and marketing department is absolutely necessary. The material department

purchases the material, the manufacturing department changes it into finished product and

the marketing department sells it. Other departments such as finance and personnel, help

complement other three line and operational departments.

Fundamental problem involved in the management of inventory is to attain equilibrium

between the working efficiency and the costs connected with huge inventory of business

enterprise with the purpose of restraining conflicts to the minimum while optimizing

investment in the inventory.

7.1.1 INDIAN FARMERS FERTILIZER COOPERATIVE LIMITED (Table

No.7.1.1)

Inventory Turnover Ratio (in time) shows a continuous increase from 3.03 in 1999-2K

to 6.69 in 2005-06 and from 4.43 to 17.98 in 2008-09. It averages at 5.94.

Average Inventory Period (in days) shows a continuous decrease from 120.35 in 1999-

2K to 54.57 in 2005-06 and from 82.33 in 2006-07 to 20.31 in 2008-09. It averages at

77.33.

131

MANAGEMENT OF INVENTORY-TABLE NO.7.1.1

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 3.03 120.352000-01 3.84 95.062001-02 3.85 94.842002-03 4.03 90.622003-04 4.27 85.552004-05 6.07 60.132005-06 6.69 54.572006-07 4.43 82.332007-08 5.25 69.582008-09 17.98 20.31

Mean 5.94 77.33(Source: Annual Reports 1999-2009)

IFFCO

7.1.2 KRISHAK BHARTI COOPERATIVE LIMITED (Table No.7.1.2)

Inventory Turnover Ratio (in time) shows a continuous increase from 4.16 in 1999-2K

to 6.23 in 2003-04, alternate increase from 5.93 in 2004-05 to 7.07 in 2007-08. and finally

increases to 10.52. It averages and 6.15.

Average Inventory Period (in days) shows a continuous decrease from 87.81 in 1999-2K

to 58.63 in 2003-04, alternate decrease/increase from 61.59 in 2004-05 to 51.59 in 2007-

08 and finally decreases to 34.69 in 2008-09. It averages at 64.38.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.2KRIBHCO

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 4.16 87.812000-01 4.18 87.402001-02 4.26 85.742002-03 5.01 72.802003-04 6.23 58.632004-05 5.93 61.592005-06 7.19 50.792006-07 6.92 52.742007-08 7.07 51.592008-09 10.52 34.69

Mean 6.15 64.38(Source: Annual Reports 1999-2009)

132

7.1.3 COOPERATIVE SECTOR (Table No.7.1.3)

Inventory Turnover Ratio (in time) shows a continuous increase from 3.16 in 1999-2K

to 6.74 in 2005-06 from 4.67 in 2006-07 to 17.17 in 2008-09. It averages at 5.96.

Average Inventory Period (in days) shows a continuous decrease from 115.59 in 1999-

2K to 54.13 in 2005-06 from 78.12 in 2006-07 to 21.26 in 2008-09. It averages at 75.39.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.3 COOP SECTOR

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 3.16 115.592000-01 3.88 94.032001-02 3.90 93.562002-03 4.14 88.192003-04 4.47 81.722004-05 6.05 60.292005-06 6.74 54.132006-07 4.67 78.122007-08 5.44 67.062008-09 17.17 21.26

Mean 5.96 75.39(Source: Annual Reports 1999-2009)

7.1.4 FERTILIZERS AND CHEMICALS TRAVANCORE LIMITED (Table

No.7.1.4)

Inventory Turnover Ratio (in time) shows an alternate increase/decrease from 3.33 in

1999-2K to 4.33 in 2002-03 and continuous increase from 4.33 in 2003-04 to 5.24 in 2005-

06. Alternate decrease/increase took place from 4.48 in 2006-07 to 5.44 in 2008-09. It

averages at 4.28.

Average Inventory Period (in days) shows an alternate decrease/increase from 109.69 in

1999-2K to 84.32 in 2002-03 and continuous decrease from 84.23 in 2003-04 to 69.67 in

2005-06. Alternate increase /decrease took place from 81.46 in 2006-07 to 67.08 in 2008-

09. It averages at 89.47.

133

MANAGEMENT OF INVENTORY-TABLE NO.7.1.4FACT

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 3.33 109.692000-01 4.45 82.112001-02 3.61 101.232002-03 4.33 84.322003-04 4.33 84.232004-05 5.00 72.942005-06 5.24 69.672006-07 4.48 81.462007-08 2.57 142.002008-09 5.44 67.08

Mean 4.28 89.47(Source: Annual Reports 1999-2009)

7.1.5 MADRAS FERTILIZERS LIMITED (Table No.7.1.5)

Inventory Turnover Ratio (in time) shows an alternate increase/decrease from 2.96 in

1999-2K to 2.82 in 2002-03 and from 3.60 in 2003-04 to 5.92 in 2006-07. Increase took

place from 6.86 in 2007-08 to 8.00 in 2008-09. It averages at 4.63.

Average Inventory Period (in days) shows an alternate decrease/increase from 123.48 in

1999-2K to 129.29 in 2002-03 decrease/increase from 101.35 in 2003-04 to 61.68 in

2006-07. Decrease took place from 53.21 in 2007-08 to 45.62 in 2008-09. It averages at

90.42.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.5MFL

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 2.96 123.482000-01 3.41 106.962001-02 2.64 138.362002-03 2.82 129.292003-04 3.60 101.352004-05 5.24 69.672005-06 4.89 74.602006-07 5.92 61.682007-08 6.86 53.212008-09 8.00 45.62

Mean 4.63 90.42(Source: Annual Reports 1999-2009)

134

7.1.6 NATIONAL FERTILIZERS LIMITED (Table No.7.1.6)

Inventory Turnover Ratio (in time) shows a continuous increase from the 2.05 in 1999-

2K to 9.64 in 2006-07 and from 9.02 in 2007-08 to 11.58 in 2008-09. It averages at 6.45.

Average Inventory Period (in days) shows a continuous decrease from 178.22 in 1999-

2K to 37.86 in 2006-07 and from 40.45 in 2007-08 to 31.52 in 2008-09. It averages at

78.91.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.6NFL

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 2.05 178.222000-01 2.62 139.402001-02 3.01 121.092002-03 4.00 91.362003-04 6.03 60.532004-05 7.69 47.482005-06 8.85 41.232006-07 9.64 37.862007-08 9.02 40.452008-09 11.58 31.52

Mean 6.45 78.91(Source: Annual Reports 1999-2009)

7.1.7 RASHTRIYA CHEMICALS & FERTILISERS LIMITED (Table No.7.1.7)

Inventory Turnover Ratio (in time) shows a continuous decrease from 3.52 in 1999-2K

to 2.99 in 2001-02 and increase from 3.56 in 2002-03 to 5.93 in 2005-06. Again

continuous increase took place from 4.98 in 2006-07 to 9.20 in 2008-09. It averages 4.83.

Average Inventory Period (in days) shows a continuous increase from 103.70 in 1999-

2K to 121.91 in 2001-02 and decrease from 102.64 in 2002-03 to 61.60 in 2005-06. Again

continuous decrease took place from 73.31 in 2006-07 to 39.67 in 2008-09. It averages at

84.30.

135

MANAGEMENT OF INVENTORY-TABLE NO.7.1.7RCF

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 3.52 103.702000-01 3.05 119.612001-02 2.99 121.912002-03 3.56 102.642003-04 4.23 86.202004-05 5.29 69.042005-06 5.93 61.602006-07 4.98 73.312007-08 5.59 65.342008-09 9.20 39.67

Mean 4.83 84.30(Source: Annual Reports 1999-2009

7.1.8 PUBLIC SECTOR (Table No. 7.1.8)

Inventory Turnover Ratio (in time) shows an alternate increase/decrease from 2.77 in

1999-2K to 3.69 in 2002-03 continuous increase from 4.73 in 2003-04 to 6.42 in 2005-06.

Alternate decrease/increase took place from 6.12 in 2006-07 to 8.80 in 2008-09. It

averages at 5.05.

Average Inventory Period (in days) shows an alternate decrease/increase from 131.83 in

1999-2K to 99.88 in 2002-03 and continuous decrease from 77.20 in 2003-04 to 56.82 in

2005-06. Alternate increase/decrease took place from 59.68 in 2006-07 to 41.50 in 2008-

09. It averages at 82.51.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.8 PUBLIC SECTOR

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 2.77 131.832000-01 3.16 115.542001-02 3.04 120.182002-03 3.69 98.882003-04 4.73 77.202004-05 5.96 61.222005-06 6.42 56.822006-07 6.12 59.682007-08 5.86 62.272008-09 8.80 41.50

Mean 5.05 82.51(Source: Annual Reports 1999-2009)

136

7.1.9 CHAMBAL FERTILISERS AND CHEMICALS LIMITED (Table No. 7.1.9)

Inventory Turnover Ratio (in time) shows a continuous increase from 4.25 in 1999-2K

to 7.53 in 2004-05 and alternate decrease/increase from 6.90 in 2006-07 to 5.94 in 2007-

08. Finally increase took place to 11.38 in 2008-09. It averages at 6.79.

Average Inventory Period (in days) shows a continuous decrease from 85.92 in 1999-2K

to 48.47 in 2004-05 and alternate increase/decrease from 52.90 in 2005-06 to 61.49 in

2007-08. Finally decrease took place to 32.08 in 2008-09. It averages at 56.98.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.9CFL

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 4.25 85.922000-01 5.51 66.202001-02 6.38 57.182002-03 6.84 53.392003-04 7.31 49.962004-05 7.53 48.472005-06 6.90 52.902006-07 5.87 62.182007-08 5.94 61.492008-09 11.38 32.08

Mean 6.79 56.98(Source: Annual Reports 1999-2009)

7.1.10 GUJARAT NARMDA VALLEY FERTILIZER COMPANY LIMITED (Table

No.7.1.10)

Inventory Turnover Ratio (in time) shows an alternate increase/decrease from 1.28 in

1999-2K to 4.31 in 2001-02 and continuous increase from 3.95 in 2002-03 to 5.27 in 2004-

05. Again continuous increase took place from 5.16 in 2005-06 to 6.12 in 2007-08 and

finally decreases to 5.04 in 2008-09. It averages at 4.75.

Average Inventory Period (in days) shows an alternate decrease/increase from 98 in

1999-2K to 84.62 in 2001-02 and continuous decrease from 92.43 in 2002-03 to 69.30 in

2004-05. Again decrease took place from 70.77 in 2005-06 to 59.64 in 2007-08 and finally

increases to 72.44 in 2008-09. It averages at 94.31.

137

MANAGEMENT OF INVENTORY-TABLE NO.7.1.10GNVFC

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 1.28 98.002000-01 7.00 52.162001-02 4.31 84.622002-03 3.95 92.432003-04 4.25 85.922004-05 5.27 69.302005-06 5.16 70.772006-07 5.16 70.742007-08 6.12 59.642008-09 5.04 72.44

Mean 4.75 94.31(Source: Annual Reports 1999-2009)

7.1.11 GUJARAT STATE FERTILIZER COMPANY LIMITED (Table No.7.1.11)

Inventory Turnover Ratio (in time) shows an alternate increase/decrease from 2.96 in

1999-2K to 2.38 in 2001-02 and continuous increase from 2.21 in 2002-03 to 6.21 in 2005-

06. Alternate decrease/increase took place from 5.88 in 2006-07 to 6.27 in 2008-09. It

averages at 4.22.

Average Inventory Period (in days) shows an alternate decrease/increase from 123.31 in

1999-2K to 153.04 in 2001-02 and continuous decrease from 165.28 in 2002-03 to 58.80 in

2005-06. Alternate increase/decrease took place from 62.06 in 2006-07 to 58.24 in 2008-

09. It averaged at 99.64.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.11GSFC

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 2.96 123.312000-01 2.97 122.962001-02 2.38 153.042002-03 2.21 165.282003-04 3.57 102.262004-05 5.28 69.082005-06 6.21 58.802006-07 5.88 62.062007-08 4.49 81.372008-09 6.27 58.24

Mean 4.22 99.64(Source: Annual Reports 1999-2009)

138

7.1.12 NAGARJUNA FERTILIZERS & CHEMICALS LIMITED (Table No.7.1.12)

Inventory Turnover Ratio (in time) shows a continuous decrease from 4.08 in 1999-2K

to 2.15 in 2002-03 increase from 4.96 in 2003-04 to 18.82 in 2006-07. Again increase took

place from 11.42 in 2007-08 to 13.25 in 2008-09. It averages at 8.77.

Average Inventory Period (in days) shows a continuous increase from 89.44 in 1999-2K

to 169.70 in 2002-03 decrease from 73.55 in 2003-04 to 19.40 in 2006-07. Again decrease

took place from 31.96 in 2007-08 to 27.56 in 2008-09. It averages at 70.57.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.12NAFL

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 4.08 89.442000-01 3.47 105.262001-02 2.73 133.772002-03 2.15 169.702003-04 4.96 73.552004-05 12.05 30.282005-06 14.73 24.782006-07 18.82 19.402007-08 11.42 31.962008-09 13.25 27.56

Mean 8.77 70.57(Source: Annual Reports 1999-2009)

7.1.13 PRIVATE SECTOR (Table No.7.1.13)

Inventory Turnover Ratio (in time) shows an alternate increase/decrease from 3.36 in

1999-2K to 3.42 in 2001-02 continuous increase from 3.22 in 2002-03 to 6.66 in 2005-06.

Alternate decrease/increase took place from 6.46 in 2006-07 to 7.57 in 2008-09. It

averages at 5.18.

Average Inventory Period (in days) shows an alternate decrease/increase from 108.57 in

1999-2K to 106.65 in 2001-02 Continuous decrease from 113.33 in 2002-03 to 54.82 in

2005-06. Alternate increase/decrease took place from 56.50 in 2006-07 to 48.20 in 2008-

09. It averages at 77.43.

139

MANAGEMENT OF INVENTORY-TABLE NO.7.1.13PRIVATE SECTOR

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 3.36 108.572000-01 4.10 88.982001-02 3.42 106.652002-03 3.22 113.332003-04 4.66 78.362004-05 6.38 57.242005-06 6.66 54.822006-07 6.46 56.502007-08 5.92 61.632008-09 7.57 48.20

Mean 5.18 77.43(Source: Annual Reports 1999-2009)

7.1.14 INDUSTRY (Table No.7.1.14)

Inventory Turnover Ratio (in time) shows an alternate increase/decrease from 3.01 in

1999-2K to 3.68 in 2002-03 and continuous increase from 4.62 in 2003-04 to 6.61 in 2005-

06. Continuous increase took place from 5.55 in 2006-07 to 11.50 in 2008-09. It averages

at 5.38.

Average Inventory Period (in days) shows an alternate decrease/increase from 121.30 in

1999-2K to 99.16 in 2002-03 and continuous decrease from 78.99 in 2003-04 to 55.21 in

2005-06. Again continuous decrease took place from 65.78 in 2006-07 to 31.75 in 2008-

09. It averages at 78.56.

MANAGEMENT OF INVENTORY-TABLE NO.7.1.14INDUSTRY

Year ITR(IN TIME) AIP(IN DAYS)1999-2K 3.01 121.302000-01 3.59 101.732001-02 3.38 108.012002-03 3.68 99.162003-04 4.62 78.992004-05 6.11 59.702005-06 6.61 55.212006-07 5.55 65.782007-08 5.71 63.972008-09 11.50 31.75

Mean 5.38 78.56(Source: Annual Reports 1999-2009)

140

Study shows that KRIBHCO, NFL, NAFL and Cooperative Sector have the highest RTR

in Cooperative Sector, Public Sector, Private Sector and Industry respectively. IFFCO,

MFL, GSFC and Public Sector have the highest AIP in Cooperative Sector, Public sector,

Private Sector and Industry respectively.

141

7.2 MANAGEMENT OF RECEIVABLES

A company sells its goods or services on credit to increase its sales which leads to

enhancement of profits. However sales on credit block the precious resource in the form of

receivables. The company therefore requires extra funds to meet short term obligations

relating to its day to day operational requirements. This attracts additional cost in the shape

of interest. Further, when receivables increase, the chances of bad debts also increase as

the receivables move upward. Piling up of receivables is both advantageous as well as

hazardous. Main purpose of receivables management is to keep the receivables at optimal

level so as to have maximum return on resources. Therefore the financial manager of a

company is accountable for the efficient and effective management of receivables.

Accordingly we can say that management of receivables entails taking decision pertaining

to the investment of resources in the portfolio which will give highest return on the

investment of the company.

7.2.1 INDIAN FARMERS FERTILIZER COOPERATIVE LIMITED (Table

No.7.2.1)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 17.21in

1999.2K to 15.86 in 2001-02 and decrease/increase from 15.23 in 2002-03 to 18.63 in

2004-05. Again alternate decrease/increase took place from 24.89 in 2005-06 to 31.37 in

2007-08 and finally increases to 80.23 in 2008-09. It averages at 25.90.

Average Collection Period (in days) shows an alternate decrease/increase from 21.21 in

1999-2K to 23.01 in 2001-02 and alternate increase/decrease from 23.96 in 2002-03 to

19.59 in 2004-05. Again increase/decrease took place from 14.67 in 2005-06 to 11.64 in

2007-08 and finally decreases to 4.55 in 2008-09. It averages at 18.22.

142

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.1IFFCO

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 17.21 21.212000-01 18.17 20.092001-02 15.86 23.012002-03 15.23 23.962003-04 12.72 28.692004-05 18.63 19.592005-06 24.89 14.672006-07 24.71 14.772007-08 31.37 11.642008-09 80.23 4.55

Mean 25.90 18.22(Source: Annual Reports 1999-2009

7.2.2 KRISHAK BHARTI COOPERATIVE LIMITED (Table No.7.2.2)

Debtor Turnover Ratio (in time) shows a continuous decrease from 7.92 in 1999-2K to

5.30 in 2002-03 and increase from 5.83 in 2003-04 to 13.13 in 2005-06. Again continuous

decrease took place from 11.46 in 2006-07 to 5.02 in 2008-09. It averages at 7.74.

Average Collection Period (in days) shows a continuous increase from 46.09 in 1999-2K

to 68.82 in 2002-03 and decrease from 62.61 in 2003-04 to 27.80 in 2005-06. Again

continuous increase took place from 31.85 in 2006-07 to 72.77 in 2008-09. It averages at

51.57.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.2KRIBHCO

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 7.92 46.092000-01 7.70 47.392001-02 7.13 51.192002-03 5.30 68.822003-04 5.83 62.612004-05 8.02 45.532005-06 13.13 27.802006-07 11.46 31.852007-08 5.92 61.692008-09 5.02 72.77

Mean 7.74 51.57(Source: Annual Reports 1999-2009

143

7.2.3 COOPERATIVE SECTOR (Table No.7.2.3)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 14.43 in

1999-2K to 13.24 in 2001-02 decrease/increase from 12.31 in 2002-03 to 15.83 in 2004-

05. Continuous decrease took place from 22.26 in 2005-06 to 18.82 in 2007-08 and finally

increases to 38.55 in 2008-09. It averages at 18.22.

Average Collection Period (in days) shows an alternate decrease/increase form 25.29 in

1999-2K to 27.56 in 2001-02 and increase/decrease from 29.66 in 2002-03 to 23.06 in

2004-05. Continuous increase took place from 16.40 in 2005-06 to 19.39 in 2007-08 and

finally decreases to 9.47 in 2008-09. It averages at 22.69.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.3 COOP SECTOR

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 14.43 25.292000-01 14.90 24.502001-02 13.24 27.562002-03 12.31 29.662003-04 10.61 34.412004-05 15.83 23.062005-06 22.26 16.402006-07 21.27 17.162007-08 18.82 19.392008-09 38.55 9.47

Mean 18.22 22.69(Source: Annual Reports 1999-2009

7.2.4 FERTILIZERS AND CHEMICALS TRAVANCORE LIMITED (Table

No.7.2.4)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 5.58 in 1999-

2K to 4.73 in 2001-02 and decrease/increase from 4.31 in 2002-03 to 7.18 in 2004-05.

Continuous decrease took place from 11.16 in 2005-06 to 6.38 in 2007-08 and finally

increases to 12.20 in 2008-09. It averages at 6.98.

Average Collection Period (in days) shows an alternate decrease/increase from 65.37 in

1999-2K to 77.18 in 2001-02 and increase/decrease from 84.74 in 2002-03 to 50.85 in

144

2004-05. Continuous increase took place from 32.70 in 2005-06 to 57.22 in 2007-08 and

finally decreases to 29.93 in 2008-09. It averages at 60.29.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.4FACTYear DTR(IN TIME) ACP(IN DAYS)

1999-2K 5.58 65.372000-01 6.16 59.262001-02 4.73 77.182002-03 4.31 84.742003-04 3.54 103.042004-05 7.18 50.852005-06 11.16 32.702006-07 8.56 42.652007-08 6.38 57.222008-09 12.20 29.93

Mean 6.98 60.29(Source: Annual Reports 1999-2009

7.2.5 MADRAS FERTILIZERS LIMITED (Table No.7.2.5)

Debtor Turnover Ratio (in time) shows a decrease from 21.44 in 1999-2K to 8.89 in

2001-02 and increase from 12.51 in 2002-03 to 466.22 in 2008-09. It averages at 134.32.

Average Collection Period (in days) shows a continuous increase from 17.03 in 1999-2K

to 41.05 in 2001-02 and decrease from 29.17 in 2002-03 to 0.78 in 2008-09. It averages at

15.91.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.5MFLYear DTR(IN TIME) ACP(IN DAYS)

1999-2K 21.44 17.032000-01 15.18 24.042001-02 8.89 41.052002-03 12.51 29.172003-04 13.04 28.002004-05 27.04 13.502005-06 111.15 3.282006-07 268.44 1.362007-08 399.32 0.912008-09 466.22 0.78

Mean 134.32 15.91(Source: Annual Reports 1999-2009

145

7.2.6 NATIONAL FERTILIZERS LIMITED (Table No.7.2.6)

Debtor Turnover Ratio (in time) shows a continuous decrease from 6.17 in 1999-2K to

5.04 in the year of 2003-04 and from 7.40 in 2004-05 to 3.78 in 2006-07. Increase took

place from 4.18 in 2007-08 to 6.01 in 2008-09. It averages at 5.46.

Average Collection Period (in days) shows a continuous from 59.12 in 1999-2K to 72.42

in 2003-04 and increase from 49.34 in 2004-05 to 96.45 in 2006-07. Decrease took place

from 87.38 in 2007-08 to 60.77 in 2008-09. It averages at 69.22.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.6NFLYear DTR(IN TIME) ACP(IN DAYS)

1999-2K 6.17 59.122000-01 6.00 60.872001-02 5.28 69.092002-03 5.11 71.462003-04 5.04 72.422004-05 7.40 49.342005-06 5.59 65.352006-07 3.78 96.452007-08 4.18 87.382008-09 6.01 60.77

Mean 5.46 69.22(Source: Annual Reports 1999-2009

7.2.7 RASHTRIYA CHEMICALS & FERTILISERS LIMITED (Table No.7.2.7)

Debtor Turnover Ratio (in time) shows an alternate decrease/increase from 3.59 in 1999-

2K to 4.11 in 2001-02 and continuous increase from 4.24 in 2002-03 to 6.32 in 2004-05.

Alternate decrease/increase took place from 5.05 in 2005-06 to 5.08 in 2007-08 and finally

increases to 5.71 in 2008-09. It averages at 4.69.

Average Collection Period (in days) shows an alternate increase/decrease from 101.63 in

1999-2K to 88.80 in 2001-02 and continuous decrease from 86.07 in 2002-03 to 57.79 in

2004-05. Alternate increase/decrease took place from 72.31 in 2005-06 to 71.85 in 2007-

08 and finally decreases to 63.90 in 2008-09. It averages at 80.38.

146

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.7RCF

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 3.59 101.632000-01 3.49 104.492001-02 4.11 88.802002-03 4.24 86.072003-04 5.01 72.852004-05 6.32 57.792005-06 5.05 72.312006-07 4.34 84.092007-08 5.08 71.852008-09 5.71 63.90

Mean 4.69 80.38(Source: Annual Reports 1999-2009

7.2.8 PUBLIC SECTOR (Table No.7.2.8)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 5.50 in 1999-

2K to 5.18 in 2002-03 and increase/decrease from 5.24 in 2003-04 to 6.60 in 2005-06.

Continuous increase took place from 5.47 in 2006-07 to 6.71 in 2008-09. It averages at

5.88.

Average Collection Period (in days) shows an alternate decrease/increase from 66.35 in

1999-2K to 70.49 in 2002-03 and from 69.65 in 2003-04 to 55.32 in 2005-06. Continuous

decrease took place from 66.69 in 2006-07 to 54.40 in 2008-09. It averages at 63.11.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.8 PUBLIC SECTOR

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 5.50 66.352000-01 5.58 65.442001-02 5.07 72.012002-03 5.18 70.492003-04 5.24 69.652004-05 7.78 46.942005-06 6.60 55.322006-07 5.47 66.692007-08 5.72 63.802008-09 6.71 54.40

Mean 5.88 63.11(Source: Annual Reports 1999-2009

147

7.2.9 CHAMBAL FERTILISERS AND CHEMICALS LIMITED (Table No.7.2.9)

Debtor Turnover Ratio (in time) shows a continuous increase from 4.41 in 1999-2K to

6.21 in 2001-02, decrease from 6.02 to 5.74 in 2003-04 and again increase from 5.74 in

2004-05 to 6.26 in 2005-06. Continuous increase took place from 5.72 in 2006-07 to 11.17

in 2008-09. It averages at 6.47.

Average Collection Period (in days) shows a continuous decrease from 82.73 in 1999-

2K to 58.77 in 2001-02, increase from 60.63 in 2002-03 to 63.60 in 2003-04 and decrease

from63.64 in 2004-05 to 58.34 in 2005-06. Continuous decrease took place from 63.86 in

2006-07 to 32.69 in 2008-09. It averages at 59.61.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.9CFL

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 4.41 82.732000-01 5.56 65.602001-02 6.21 58.772002-03 6.02 60.632003-04 5.74 63.602004-05 5.74 63.642005-06 6.26 58.342006-07 5.72 63.862007-08 7.90 46.222008-09 11.17 32.69

Mean 6.47 59.61(Source: Annual Reports 1999-2009

7.2.10 GUJARAT NARMDA VALLEY FERTILIZER COMPANY LIMITED (Table

No.7.2.10)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 6.18 in 1999-

2K to 6.57 in 2002-03 and from 8.73 in 2003-04 to 6.63 in 2005-06. Continuous increase

took place from 5.14 in 2006-07 to 8.61 in 2008-09. It averages at 7.52.

Average Collection Period (in days) shows an alternate decrease/increase from 59.08 in

1999-2K to 55.52 in 2002-03 and again decrease/increase from 41.79 in 2003-04 to 55.05

in 2005-06. Continuous decrease took place from 70.95 in 2006-07 to 42.40 in 2008-09. It

averages at 51.

148

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.10GNVFC

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 6.18 59.082000-01 10.61 34.402001-02 5.97 61.152002-03 6.57 55.522003-04 8.73 41.792004-05 9.86 37.012005-06 6.63 55.052006-07 5.14 70.952007-08 6.90 52.882008-09 8.61 42.40

Mean 7.52 51.02(Source: Annual Reports 1999-2009

7.2.11 GUJARAT STATE FERTILIZER COMPANY LIMITED (Table No.7.2.11)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 3.30 in 1999-

2K to 3.56 in 2001-02 and continuous increase from 2.57 in 2002-03 to 5.55 in 2004-05.

Alternate decrease/increase took place from 4.40 in 2005-06 to 5.32 in 2007-08 and finally

increases to 11.31 2008-09. It averages at 4.68.

Average Collection Period (in days) shows an alternate decrease/increase from 110.74 in

1999-2K to 102.55 in 2001-02 and continuous decrease from 142.16 in 2002-03 to 65.76 in

2004-05. Alternate increase/decrease took place from 82.89 in 2005-06 to 68.64 in 2007-

08 and finally decreases to 32.27 in 2008-09. It averages at 91.19.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.11GSFC

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 3.30 110.742000-01 3.59 101.552001-02 3.56 102.552002-03 2.57 142.162003-04 3.13 116.482004-05 5.55 65.762005-06 4.40 82.892006-07 4.11 88.882007-08 5.32 68.642008-09 11.31 32.27

Mean 4.68 91.19(Source: Annual Reports 1999-2009

149

7.2.12 NAGARJUNA FERTILIZERS & CHEMICALS LIMITED (Table No.7.2.12)

Debtor Turnover Ratio (in time) shows a continuous decrease from 4.32 in 1999-2K to

2.03 in 2002-03 and increase from 2.97 in 2003-04 to 7.36 in 2008-09. It averages at 4.52.

Average Collection Period (in days) shows a continuous increase from 84.47 in 1999-2K

to 179.60 in 2002-03 and decrease from 123.06 in 2003-04 to 49.57 in 2008-09. It averages

at 96.70.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.12NAFLYear DTR(IN TIME) ACP(IN DAYS)

1999-2K 4.32 84.472000-01 3.33 109.652001-02 2.33 156.982002-03 2.03 179.602003-04 2.97 123.062004-05 4.40 82.942005-06 5.45 66.942006-07 5.81 62.842007-08 7.17 50.912008-09 7.36 49.57

Mean 4.52 96.70(Source: Annual Reports 1999-2009

7.2.13 PRIVATE SECTOR (Table No.7.2.13)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 3.90 in 1999-

2K to 4.10 in 2001-02 continuous increase from 3.64 in 2002-03 to 6.04 in 2004-05.

Alternate decrease/increase took place from5.51 in 2005-06 to 6.55 in 2007-08 and finally

increases to 9.90 in 2008-09. It averages at 5.36.

Average Collection Period (in days) shows an alternate decrease/increase from 93.69 in

1999-2K to 89.10 in 2001-02 and continuous decrease from 100.30 in 2002-03 to 60.47 in

2004-05. Alternate increase/decrease took place from 66.29 in 2005-06 to 55.71 in 2007-

08 and finally decreased to 36.87 in 2008-09. It averages at 73.81.

150

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.13 PRIVATE SECTORYear DTR(IN TIME) ACP(IN DAYS)

1999-2K 3.90 93.692000-01 4.64 78.682001-02 4.10 89.102002-03 3.64 100.302003-04 4.38 83.322004-05 6.04 60.472005-06 5.51 66.292006-07 4.96 73.642007-08 6.55 55.712008-09 9.90 36.87

Mean 5.36 73.81(Source: Annual Reports 1999-2009

7.2.14 INDUSTRY (Table No. 7.2.14)

Debtor Turnover Ratio (in time) shows an alternate increase/decrease from 5.92 in 1999-

2K to 5.71 in 2001-02 and continuous increase from 5.54 in 2002-03 to 8.38 in 2004-05.

Alternate decrease/increase took place from 8.33 in 2005-06 to 8.25 in 2007-08 and finally

increases to 13.58 in 2008-09. It averages.

Average Collection Period (in days) shows an alternate decrease/increase from 61.68 in

1999-2K to 63.95 in 2001-02 and continuous decrease from 65.87 in 2002-03 to 43.57 in

2004-05. Alternate increase/decrease took place increased from 43.81 in 2005-06 to 44.23

in 2007-08 and finally decreases to 26.88 in 2008-09. It averages at 52.06.

MANAGEMENT OF RECEIVABLES-TABLE NO.7.2.14 INDUSTRY

Year DTR(IN TIME) ACP(IN DAYS)1999-2K 5.92 61.682000-01 6.35 57.522001-02 5.71 63.952002-03 5.54 65.872003-04 5.83 62.602004-05 8.38 43.572005-06 8.33 43.812006-07 7.23 50.492007-08 8.25 44.232008-09 13.58 26.88

Mean 7.51 52.06(Source: Annual Reports 1999-2009

151

The study shows that IFFCO, MFL, GNVFC and Cooperative Sector have the highest RTR

in Cooperative Sector, Public Sector, Private Sector and Industry, respectively. KRIBHCO,

RCF, NAFL and Private Sector have the highest ACP in Cooperative Sector, Public

Sector, Private Sector and Industry, respectively.

152

7.3 MANAGEMENT OF CASH

Cash in an organization may be compared to the blood in human body. Just as blood gives

existence and vigor to the individual body, cash in the similar manner, gives existence,

power, earnings, liquidity and solvency to the organization. Stable and vigorous flow of

cash right through the whole trade process is the foundation of solvency. Cash is the major

liquid asset that an organization owns. As cash is the means of exchange it is the most

significant part of working capital. It is both the fundamental input which makes it

obligatory to carry on the company running on an uninterrupted basis and the eventual

production likely to be realized by selling goods and services. Therefore cash management

is quickly emerging as an important aspect of sound financial management of any

company. Cash management involves the efficient collection, disbursements and

temporary investment of cash. Although most firms establish a target level of cash

balances to maintain, they do not like to keep excess cash balance as interest can be earned

if these funds are invested in marketable securities. Thus the main objective of cash

management is the optimization of liquidity through an improved flow of funds.

7.3.1 INDIAN FARMERS FERTILIZER COOPERATIVE LIMITED (Table

No.7.3.1)

Cash Turnover Ratio (in time) shows a continuous increase from 4.92 in 1999-2K to

8.63 in 2001-02 and alternate decrease/increase from 6.75 in 2002-03 7.07 in 2004-05.

Continuous decrease took place from 9.16 in 2005-06 to 4.78 in 2007-08 and finally

increases to 20.34 in 2008-09. It averages at 7.81.

Average Age of Cash (in days) shows a continuous decrease from 74.19 in 1999-2K to

42.30 in 2001-02 and alternate increase/decrease from 54.06 in 2002-03 to 51.62 in 2004-

05. Continuous increase took place from 39.85 in 2005-06 to 76.40 in 2007-08 and finally

153

decreases to 17.94 in 2008-09. It averages at 55.56.

MANAGEMENT OF CASH-TABLE NO.7.3.1IFFCOYear CTR(IN TIME) AAC(IN DAYS)

1999-2K 4.92 74.192000-01 5.51 66.252001-02 8.63 42.302002-03 6.75 54.062003-04 5.38 67.852004-05 7.07 51.622005-06 9.16 39.852006-07 5.60 65.192007-08 4.78 76.402008-09 20.34 17.94

Mean 7.81 55.56(Source: Annual Reports 1999-2009)

7.3.2 KRISHAK BHARTI COOPERATIVE LIMITED (Table No.7.3.2)

Cash Turnover Ratio (in time) shows a continuous decrease from 0.24 in 1999-2K to

0.17 in 2002-03 and alternate decrease/increase from 0.30 in 2003-04 to 0.27 in 2005-06.

Continuous increase took place from 0.39 in 2006-07 to 0.58 in 2008-09. It averages at

0.32.

Average Age of Cash (in days) shows an alternate decrease/increase from 1550.46 in

1999-2K to 1655.11 in 2001-02 and again from 2169.12 in 2002-03 to 1340.45 in 2005-06.

Alternate decrease/increase took place from 926.50 in 2006-07 to 625.25 in 2008-09.It

averages at 1355.03.

MANAGEMENT OF CASH-TABLE NO.7.3.2KRIBHCO

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 0.24 1550.462000-01 0.24 1541.292001-02 0.22 1655.112002-03 0.17 2169.122003-04 0.30 1228.112004-05 0.19 1889.042005-06 0.27 1340.452006-07 0.39 926.502007-08 0.58 625.002008-09 0.58 625.25

Mean 0.32 1355.03(Source: Annual Reports 1999-2009)

154

7.3.3 COOPERATIVE SECTOR (Table No.7.3.3)

Cash Turnover Ratio (in time) shows a continuous increase from 0.68 in 1999-2K to

3.60 in 2008-09. It averages at 1.30.

Average Age of Cash (in days) shows a continuous decrease from 539.83 in 1999-2K to

101.50 in 2008-09. It averages at 355.02.

MANAGEMENT OF CASH-TABLE NO.7.3.3COOP SECTOR

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 0.68 539.832000-01 0.71 511.552001-02 0.80 454.622002-03 0.87 419.812003-04 0.93 392.062004-05 0.96 379.092005-06 1.34 272.902006-07 1.42 256.222007-08 1.64 222.652008-09 3.60 101.50

Mean 1.30 355.02(Source: Annual Reports 1999-2009)

7.3.4 FERTILIZERS AND CHEMICALS TRAVANCORE LIMITED (Table

No.7.3.4)

Cash Turnover Ratio (in time) shows a continuous increase from 2.27 in 1999-2K to

17.01 in 2003-04 and alternate increase/decrease from12.09 in 2004-05 to 6.90 in 2006-07.

Increase took place from 3.68 in 2007-08 to 7.43 in 2008-09. It averages at 8.10. Average

Age of Cash (in days) shows a continuous decrease from 161.11 in 1999-2K to 21.46 in

2003-04 alternate decrease/increase from 30.19 in 2004-05 to 52.87 in 2006-07. Decrease

took place from 99.14 in 2007-08 to 49.14 in 2008-09. It averages at 68.66.

155

MANAGEMENT OF CASH-TABLE NO.7.3.4FACT

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 2.27 161.112000-01 2.57 142.222001-02 5.40 67.632002-03 10.19 35.812003-04 17.01 21.462004-05 12.09 30.192005-06 13.48 27.082006-07 6.90 52.872007-08 3.68 99.142008-09 7.43 49.14

Mean 8.10 68.66(Source: Annual Reports 1999-2009)

7.3.5 MADRAS FERTILIZERS LIMITED (Table No.7.3.5)

Cash Turnover Ratio (in time) shows a continuous decrease from 20.75 in 1999-2K to

12.05 in 2001-02 and from 20.46 in 2002-03 to 11.53 in 2004-05. Continuous increase

took place from 15.12 in 2005-06 to 40.52 in 2007-08 and finally decreases to 31.93 in

2008-09. It averages at 21.44.

Average Age of Cash (in days) shows a continuous increase from 17.59 in 1999-2K to

30.29 in 2001-02 and from 17.84 in 2002-03 to 31.66 in 2004-05. Continuous decrease

took place from24.14 in 2005-06 to 9.01 in 2007-08 and finally increases to 11.43 in 2008-

09. It averages at 20.41.

MANAGEMENT OF CASH-TABLE NO.7.3.5MFL

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 20.75 17.592000-01 12.96 28.172001-02 12.05 30.292002-03 20.46 17.842003-04 15.89 22.972004-05 11.53 31.662005-06 15.12 24.142006-07 33.15 11.012007-08 40.52 9.012008-09 31.93 11.43

Mean 21.44 20.41(Source: Annual Reports 1999-2009)

156

7.3.6 NATIONAL FERTILIZERS LIMITED (Table No.7.3.6)

Cash Turnover Ratio (in time) shows an alternate decrease/increase from 19.99 in 1999-

2K to 20.41 in 2001-02 and again from 33.69 in 2002-03 to 3.64 in 2004-05. Alternate

increase/decrease took place from 7.61 in 2005-06 to 9.43 in 2007-08 and finally decreases

to 6.41 in 2008-09. It averages at 17.88.

Average Age of Cash (in days) shows an alternate increase/decrease from 18.26 in 1999-

2K to 17.88 in 2001-02 and from 10.84 in 2002-03 to 100.24 in 2004-05. Alternate

decrease/increase took place from 47.98 in 2005-06 to 38.71 in 2007-08 and finally

increases to 56.90 in 2008-09. It averages at 42.15.

MANAGEMENT OF CASH-TABLE NO.7.3.6NFL

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 19.99 18.262000-01 19.29 18.922001-02 20.41 17.882002-03 33.69 10.842003-04 3.47 105.102004-05 3.64 100.242005-06 7.61 47.982006-07 54.87 6.652007-08 9.43 38.712008-09 6.41 56.90

Mean 17.88 42.15(Source: Annual Reports 1999-2009)

7.3.7 RASHTRIYA CHEMICALS & FERTILISERS LIMITED (Table No.7.3.7)

Cash Turnover Ratio (in time) shows an alternate increase/decrease from 18.28 in

1999.2K to 5.82 in 2001-02 and again from 4.46 in 2002-03 to 6.21 in 2007-08. Finally

increase took place to 9.02 in 2008-09. It averages at 10.38.

Average Age of Cash (in days) shows an alternate decrease/increase from 19.97 in

1999.2K to 62.68 in 2001-02 and again from 81.81 in 2002-03 to 58.79 in 2007-08 and

finally decreases to 40.48 in 2008-09. It average at 45.99.

157

MANAGEMENT OF CASH-TABLE NO.7.3.7RCF

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 18.28 19.972000-01 19.50 18.722001-02 5.82 62.682002-03 4.46 81.812003-04 13.69 26.662004-05 11.28 32.362005-06 11.33 32.222006-07 4.23 86.282007-08 6.21 58.792008-09 9.02 40.48

Mean 10.38 45.99(Source: Annual Reports 1999-2009)

7.3.8 PUBLIC SECTOR (Table No.7.3.8)

Cash Turnover Ratio (in time) shows a continuous increase from 9.03 in 1999-2K to

13.16 in 2002-03 and alternate decrease/increase from 8.39 in 2003-04 to 10.80 in 2005-

06. Continuous decrease took place from 13.98 in 2006-07 to 8.59 in 2008-09. It averages

at 9.98.

Average Age of Cash (in days) shows a continuous decrease from 40.41 in 1999-2K to

27.73 in 2002-03 and alternate increase/decrease from 43.53 in 2003-04 to 33.79 in 2005-

06. Continuous increase took place from 26.10 in 2006-07 to 42.47 in 2008-09. It averages

at 38.15.

MANAGEMENT OF CASH-TABLE NO.7.3.8PUBLIC SECTOR

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 9.03 40.412000-01 9.43 38.692001-02 9.54 38.262002-03 13.16 27.732003-04 8.39 43.532004-05 6.68 54.632005-06 10.80 33.792006-07 13.98 26.102007-08 10.17 35.882008-09 8.59 42.47

Mean 9.98 38.15(Source: Annual Reports 1999-2009)

158

7.3.9 CHAMBAL FERTILISERS AND CHEMICALS LIMITED (Table No.7.3.9)

Cash Turnover Ratio (in time) shows a continuous decrease from 25.63 in 1999-2K to

7.28 in 2003-04 and again from 16.12 in 2004-05 to 1.11 in 2007-08.Finally increases to

2.76 in 2008-09. It averages at 9.21.

Average Age of Cash (in days) shows a continuous increase from 14.24 in 1999-2K to

50.13 in 2003-04 and again from 22.65 in 2004-05 to 327.45 in 2007-08. Finally, decrease

took place to 132.16 in 2008-09. It averages at 84.63.

MANAGEMENT OF CASH-TABLE NO.7.3.9CFL

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 25.63 14.242000-01 12.14 30.072001-02 9.77 37.352002-03 7.32 49.902003-04 7.28 50.132004-05 16.12 22.652005-06 7.22 50.572006-07 2.77 131.762007-08 1.11 327.452008-09 2.76 132.16

Mean 9.21 84.63(Source: Annual Reports 1999-2009)

7.3.10 GUJARAT NARMDA VALLEY FERTILIZER COMPANY LIMITED

(Table No.7.3.10)

Cash Turnover Ratio (in time) shows a continuous decrease from 69.62 in 1999-2K to

2.63 in 2004-05 and again from 5.99 in 2005-06 to 3.40 in 2007-08. Finally increase took

place to 3.50 in 2008-09. It averages at 14.33.

Average Age of Cash (in days) shows a continuous increase from 5.24 in 1999-2K to

138.88 in 2004-05 and again from 60.96 in 2005-06 to 107.48 in 2007-08. Finally decrease

took place to 104.40 in 2008-09. It averages at 70.03.

159

MANAGEMENT OF CASH-TABLE NO.7.3.10GNVFCYear CTR(IN TIME) AAC(IN DAYS)1999-2K 69.62 5.242000-01 27.22 13.412001-02 14.61 24.982002-03 7.92 46.112003-04 2.71 134.872004-05 2.63 138.882005-06 5.99 60.962006-07 5.71 63.942007-08 3.40 107.482008-09 3.50 104.40

Mean 14.33 70.03(Source: Annual Reports 1999-2009)

7.3.11 GUJARAT STATE FERTILIZER COMPANY LIMITED (Table No.7.3.11)

Cash Turnover Ratio (in time) shows a continuous increase from 10.28 in 1999-2K to

33.69 in 2002-03 and again from 3.47 in 2003-04 to 7.61 in 2005-06. Alternate

decrease/increase took place from 5.33 in 2006-07 to 14.90 in 2008-09. It averages at

11.79.

Average Age of Cash (in days) shows a continuous decrease from 35.49 in 1999-2K to

10.84 in 2002-03 and again from105.10 in 2003-04 to 47.98 in 2005-06. Alternate

increase/decrease took place from 68.51 in 2006-07 to 24.49 in 2008-09. It averages at

51.09.

MANAGEMENT OF CASH-TABLE NO.7.3.11GSFC

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 10.28 35.492000-01 13.97 26.122001-02 20.04 18.212002-03 33.69 10.842003-04 3.47 105.102004-05 3.64 100.242005-06 7.61 47.982006-07 5.33 68.512007-08 4.94 73.962008-09 14.90 24.49

Mean 11.79 51.09(Source: Annual Reports 1999-2009)

160

7.3.12 NAGARJUNA FERTILIZERS & CHEMICALS LIMITED (Table No.7.3.12)

Cash Turnover Ratio (in time) shows a continuous decrease from 6.17 in 1999-2K to

3.04 in 2001-02 and increase from 3.25 in 2002-03 to 5.95 in 2004-05. Alternate

increase/decrease took place from 5.03 in 2005-06 to 4.58 in 2007-08 and finally decreases

to 3.32 in 2008-09. It averages at 4.78.

Average Age of Cash (in days) shows a continuous increase from 59.15 in 1999-2K to

119.89 in 2001-02 decrease from 112.22 in 2002-03 to 61.36 in 2004-05. Alternate

decrease/increase took place from 72.50 in 2005-06 to 79.74 in 2007-08 and finally

increases to 109.79 in 2008-09. It averages at 81.72.

MANAGEMENT OF CASH-TABLE NO.7.3.12NAFL

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 6.17 59.152000-01 5.91 61.792001-02 3.04 119.892002-03 3.25 112.222003-04 4.58 79.642004-05 5.95 61.362005-06 5.03 72.502006-07 5.97 61.132007-08 4.58 79.742008-09 3.32 109.79

Mean 4.78 81.72(Source: Annual Reports 1999-2009)

7.3.13 PRIVATE SECTOR (Table No.7.3.13)

Cash Turnover Ratio (in time) shows an alternate increase/decrease from 10.85 in 1999-

2K to 4.35 in 2004-05 and a continuous decrease from 6.63 in 2005-06 to 2.91 in 2007-08.

Finally increase took place to 3.90 in 2008-09. It averages at 7.00.

Average Age of Cash (in days) shows an alternate decrease/increase from 33.65 in 1999-

2K to 83.96 in 2004-05 and continuous increase from 55.08 in 2005-06 to 125.51 in 2007-

08. Finally decrease took place to 93.48 in 2008-09. It averages at 66.70.

161

MANAGEMENT OF CASH-TABLE NO.7.3.13PRIVATE SECTOR

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 10.85 33.652000-01 11.86 30.772001-02 10.46 34.892002-03 10.56 34.562003-04 3.72 98.132004-05 4.35 83.962005-06 6.63 55.082006-07 4.75 76.922007-08 2.91 125.512008-09 3.90 93.48

Mean 7.00 66.70(Source: Annual Reports 1999-2009)

7.3.14 INDUSTRY (Table No.7.3.14)

Cash Turnover Ratio (in time) shows a continuous increase from 2.23 in 1999-2K to

2.70 in 2002-03 and again from 2.13 in 2003-04 to 3.33 in 2006-07. Increase took place

from 3.03 in 2007-08 to 4.66 in 2008-09. It averages at 2.85.

Average Age of Cash (in days) shows a continuous decrease from 163.94 in 1999-2K to

134.99 in 2002-03 and again from 171.31 in 2003-04 to 109.53 in 2006-07. Decrease took

place from 120.44 in 2007-08 to 78.25 in 2008-09. It averages at 134.64.

MANAGEMENT OF CASH-TABLE NO.7.3.14INDUSTRY

Year CTR(IN TIME) AAC(IN DAYS)1999-2K 2.23 163.942000-01 2.46 148.272001-02 2.49 146.792002-03 2.70 134.992003-04 2.13 171.312004-05 2.31 157.902005-06 3.18 114.932006-07 3.33 109.532007-08 3.03 120.442008-09 4.66 78.25

Mean 2.85 134.64(Source: Annual Reports 1999-2009)

IFFCO, MFL, GNVFC and Cooperative Sector have the highest CTR in Cooperative

Sector, Public Sector, Private Sector and Industry respectively. KRIBHCO, FACT, CFL

and Cooperative Sector have the highest AAC in Cooperative Sector, Public Sector,

162

Private Sector and Industry respectively.

163

7.4 MANAGEMENT OF PAYABLES

Accounts payables contain trade creditors and other outstanding expenditure which helps

in financing the operational activities of an organization continuously up to considerable

extent. Due to this accounts payables often called self adjusting way of financing. Main

function of payables management is to keep the payable at optimal level. Company should

use payables as a source of working capital finance keeping in mind the credibility and its

goodwill. Payables originate from the manufacturing plan of an organization, but become

accounts payable only when materials are delivered and handed over to the concerned

department. Though timing of procurement or placement of an order is the work of

supplies department but the management will be capable to augment the worth of the

organization only if it is working in close coordination with the finance department. Whilst

the objective of accounts payable management is to offer as much impulsive financing as

possible but efforts should always be made to keep their level to the optimum.

7.4.1 INDIAN FARMERS FERTILIZER COOPERATIVE LIMITED (Table

No.7.4.1)

Payable Turnover Ratio (in time) shows an alternate increase/decrease from 6.70 in

1999-00 to 7.05 in 2001-02 and decrease/increase from 6.55 in 2002-03 to 7.36 in 2004-

05. Continuous increase took place from 8.76 in 2005-06 to 17.81 in 2008-09. It averages

at 8.70.

Average Payable Period (in days) shows an alternate decrease/increase from 54.47 in

1999-00 to 51.80 in 2001-02 increase/decrease from 55.76 in 2002-03 to 49.59 in 2004-

05. Continuous decrease took place from 41.66 in 2005-06 to 20.49 in 2008-09. It averages

at 45.90.

164

MANAGEMENT OF PAYABLES-TABLE NO.7.4.1IFFCO

Year PTR(IN TIME) APP(IN DAYS)1999-2K 6.70 54.472000-01 7.24 50.432001-02 7.05 51.802002-03 6.55 55.762003-04 6.16 59.212004-05 7.36 49.592005-06 8.76 41.662006-07 9.43 38.712007-08 9.91 36.852008-09 17.81 20.49

Mean 8.70 45.90(Source: Annual Reports 1999-2009)

7.4.2 KRISHAK BHARTI COOPERATIVE LIMITED (Table No.7.4.2)

Payable Turnover Ratio (in time) shows a continuous increase from 3.11 in 1999-00 to

7.36 in 2003-04 and from 7.18 in 2004-05 to 11.23 in 2006-07. Again increase took place

from 8.60 in 2007-08 to 10.5 in 2008-09. It averages at 7.48.

Average Payable Period (in days) shows a continuous decrease from 117.37 in 1999-00

to 49.60 in 2003-04 and from 50.84 in 2004-05 to 32.49 in 2006-07. Again decrease took

place from 8.60 in 2007-08 to 34.75 in 2008-09. It averages at 58.58.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.2KRIBHCOYear PTR(IN TIME) APP(IN DAYS)1999-2K 3.11 117.372000-01 3.48 104.992001-02 5.30 68.892002-03 7.14 51.122003-04 7.36 49.602004-05 7.18 50.842005-06 10.94 33.362006-07 11.23 32.492007-08 8.60 42.432008-09 10.50 34.75

Mean 7.48 58.58(Source: Annual Reports 1999-2009)

165

7.4.3 COOPERATIVE SECTOR (Table No.7.4.3)

Payable Turnover Ratio (in time) shows a continuous increase from 6.02 in 1999-00 to

6.83 in 2001-02 and alternate decrease/increase from 6.59 in 2002-03 to 7.35 in 2004-05.

Continuous increase took place from 8.93 in 2005-06 to 17.27 in 2008-09. It averages at

8.51.

Average Payable Period (in days) shows a continuous decrease from 60.62 in 1999-00 to

53.43 in 2001-02 and alternate increase/decrease from 55.36 in 2002-03 to 49.69 in 2004-

05. Continuous decrease took place from 40.88 in 2005-06 to 21.14 in 2008-09. It averages

at 47.05.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.3COOP SECTORYear PTR(IN TIME) APP(IN DAYS)1999-2K 6.02 60.622000-01 6.56 55.612001-02 6.83 53.432002-03 6.59 55.362003-04 6.27 58.242004-05 7.35 49.692005-06 8.93 40.882006-07 9.61 37.982007-08 9.72 37.572008-09 17.27 21.14

Mean 8.51 47.05(Source: Annual Reports 1999-2009)

7.4.4 FERTILIZERS AND CHEMICALS TRAVANCORE LIMITED (Table

No.7.4.4)

Payable Turnover Ratio (in time) shows an alternate increase/decrease from 4.98 in

1999-00 to 3.68 in 2001-02 and decrease/increase 3.28 in 2002-03 to 4.87 in 2004-05.

Continuous decrease took place from 4.98 in 2005-06 to 3.74 in 2007-08 and finally

increases to 17.18 in 2008-09. It averages at 5.63.

Average Payable Period (in days) shows an alternate decrease/increase from 73.27 in

1999-00 to 99.14 in 2001-02 and increase/decrease from 111.39 in 2002-03 to 75.00 in

166

2004-05. Continuous increase took place from 73.36 in 2005-06 to 97.52 in 2007-08 and

finally decreases to 20.53 in 2008-09. It averages at 81.45.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.4 FACTYear PTR(IN TIME) APP(IN DAYS)1999-2K 4.98 73.272000-01 5.13 71.142001-02 3.68 99.142002-03 3.28 111.392003-04 3.16 115.342004-05 4.87 75.002005-06 4.98 73.362006-07 4.69 77.832007-08 3.74 97.522008-09 17.78 20.53

Mean 5.63 81.45(Source: Annual Reports 1999-2009)

7.4.5 MADRAS FERTILIZERS LIMITED (Table No.7.4.5)

Payable Turnover Ratio (in time) shows a continuous decrease from 21.71 in 1999-00 to

1.34 in 2002-03 and alternate increase/decrease from 1.80 in 2003-04 to 2.43 in 2007-08.

Decrease took place to 2.15 in 2008-09. It averages at 4.19.

Average Payable Period (in days) shows a continuous increase from 16.81 in 1999-00 to

272.05 in 2002-03 and alternate decrease/increase from 202.99 in 2003-04 to 150.17 in

2007-08. Increase took place to 169.63 in 2008-09. It averages at 161.39.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.5MFLYear PTR(IN TIME) APP(IN DAYS)1999-2K 21.71 16.812000-01 3.56 102.602001-02 1.42 256.792002-03 1.34 272.052003-04 1.80 202.992004-05 2.47 147.752005-06 2.21 165.442006-07 2.81 129.722007-08 2.43 150.172008-09 2.15 169.63

Mean 4.19 161.39(Source: Annual Reports 1999-2009)

167

7.4.6 NATIONAL FERTILIZERS LIMITED (Table No.7.4.6)

Payable Turnover Ratio (in time) shows a continuous increase from 3.69 in 1999-00 to

10.69 in 2003-04 and alternate decrease/increase from 8.24 in 2004-05 to 4.86 in 2008-09.

It averages at 5.99.

Average Payable Period (in days) shows a continuous decrease from 98.96 in 1999-00 to

34.14 in 2003-04 and alternate increase/decrease from 44.31 in 2004-05 to 75.05 in 2008-

09. It averages at 68.03.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.6NFLYear PTR(IN TIME) APP(IN DAYS)1999-2K 3.69 98.962000-01 3.75 97.302001-02 4.55 80.182002-03 7.03 51.892003-04 10.69 34.142004-05 8.24 44.312005-06 6.26 58.282006-07 6.45 56.572007-08 4.36 83.632008-09 4.86 75.05

Mean 5.99 68.03(Source: Annual Reports 1999-2009)

7.4.7 RASHTRIYA CHEMICALS & FERTILISERS LIMITED (Table No.7.4.7)

Payable Turnover Ratio (in time) shows an alternate decrease/increase from 6.32 in

1999-00 to 6.28 in 2001-02 and continuous increase from 6.78 in 2002-03 to 13.89 in

2004-05. Alternate decrease/increase took place from7.47 in 2005-06 to 6.88 in 2008-09. It

averages at 7.80.

Average Payable Period (in days) shows an alternate increase/decrease from 57.73 in

1999-00 to 58.11 in 2001-02 and continuous decrease from 53.87 in 2002-03 to 26.28 in

2004-05. Alternate increase/decrease took place from 48.87 in 2005-06 to 53.02 in 2008-

09. It averages at 51.80.

168

MANAGEMENT OF PAYABLES-TABLE NO.7.4.7RCFYear PTR(IN TIME) APP(IN DAYS)1999-2K 6.32 57.732000-01 5.00 72.992001-02 6.28 58.112002-03 6.78 53.872003-04 9.27 39.382004-05 13.89 26.282005-06 7.47 48.872006-07 4.84 75.392007-08 11.29 32.342008-09 6.88 53.02

Mean 7.80 51.80(Source: Annual Reports 1999-2009)

7.4.8 PUBLIC SECTOR (Table No. 7.4.8)

Payable Turnover Ratio (in time) shows a continuous decrease from 5.32 in 1999-00 to

3.39 in 2001-02 and increase from 3.94 in 2002-03 to 6.02 in 2004-05. Alternate

decrease/increase took place from 5.10 in 2005-06 to 5.17 in 2007-08 and finally increases

to 5.95 in 2008-09. It averages at 4.91.

Average Payable Period (in days) shows a continuous increase from 68.56 in 1999-00 to

107.67 in 2001-02 and decrease from 92.60 in 2002-03 to 60.65 in 2004-05. Alternate

increase/decrease took place from 71.56 in 2005-06 to 70.66 in 2007-08 and finally

decreases to 61.38 in 2008-09. It averages at 76.70.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.8PUBLIC SECTORYear PTR(IN TIME) APP(IN DAYS)1999-2K 5.32 68.562000-01 4.10 88.992001-02 3.39 107.672002-03 3.94 92.602003-04 5.12 71.252004-05 6.02 60.652005-06 5.10 71.562006-07 4.95 73.722007-08 5.17 70.662008-09 5.95 61.38

Mean 4.91 76.70(Source: Annual Reports 1999-2009)

169

7.4.9 CHAMBAL FERTILISERS AND CHEMICALS LIMITED (Table No.7.4.9)

Payable Turnover Ratio (in time) shows a continuous increase from 4.00 in 1999-00 to

7.21 in 2002-03 and alternate decrease/increase from 6.54 in 2003-04 to 6.12 in 2005-06.

Again alternate increase/decrease took place from 9.67 in 2006-07 to 4.22 in 2008-09. It

averages at 6.48.

Average Payable Period (in days) shows a continuous decrease from 91.21 in 1999-00 to

50.61 in 2002-03 and alternate increase/decrease from 55.79 in 2003-04 to 59.67 in 2005-

06. Again alternate decrease/increase took place from 37.75 in 2006-07 to 86.54 in 2008-

09. It averages at 61.91.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.9CFLYear PTR(IN TIME) APP(IN DAYS)1999-2K 4.00 91.212000-01 4.67 78.232001-02 6.30 57.902002-03 7.21 50.612003-04 6.54 55.792004-05 5.45 66.942005-06 6.12 59.672006-07 9.67 37.752007-08 10.58 34.502008-09 4.22 86.54

Mean 6.48 61.91(Source: Annual Reports 1999-2009)

7.4.10 GUJARAT NARMDA VALLEY FERTILIZER COMPANY LIMTED (Table

No.7.4.10)

Payable Turnover Ratio (in time) shows an alternate increase/decrease from 1.17 in

1999-00 to 2.96 in 2001-02 and from 2.77 in 2002-03 to 4.67 in 2004-05. Alternate

decrease/increase took place from 5.36 in 2005-06 to 5.52 in 2007-08 and finally increases

to 6.87 in 2008-09. It averages at 4.26.

Average Payable Period (in days) shows an alternate decrease/increase from 310.96 in

1999-00 to 123.42 in 2001-02 and increase/decrease from 131.61 in 2002-03 to 78.14 in

170

2004-05. Alternate increase/decrease took place from 68.04 in 2005-06 to 66.17 in 2007-

08 and finally decreases to 53.12 in 2008-09. It averages at 110.57.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.10GNVFCYear PTR(IN TIME) APP(IN DAYS)1999-2K 1.17 310.962000-01 5.80 62.922001-02 2.96 123.422002-03 2.77 131.612003-04 2.70 135.322004-05 4.67 78.142005-06 5.36 68.042006-07 4.80 75.982007-08 5.52 66.172008-09 6.87 53.12

Mean 4.26 110.57(Source: Annual Reports 1999-2009)

7.4.11 GUJARAT STATE FERTILIZER COMPANY LIMITED (Table No.7.4.11)

Payable Turnover Ratio (in time) shows a continuous decrease from 2.08 in 1999-00 to

1.34 in 2002-03 and increase from 1.83 in 2003-04 to 10.14 in 2008-09. It averages at

3.53.

Average Payable Period (in days) shows a continuous increase from 175.18 in 1999-00

to 272.06 in 2002-03 and decrease from199.16 in 2003-04 to 36.01 in 2008-09. It averages

at 152.08.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.11GSFC

Year PTR(IN TIME) APP(IN DAYS)1999-2K 2.08 175.182000-01 1.76 207.432001-02 1.60 227.562002-03 1.34 272.062003-04 1.83 199.162004-05 2.46 148.262005-06 3.08 118.592006-07 4.52 80.672007-08 6.53 55.882008-09 10.14 36.01

Mean 3.53 152.08(Source: Annual Reports 1999-2009)

171

7.4.12 NAGARJUNA FERTILIZERS & CHEMICALS LIMITED (Table No.7.4.12)

Payable Turnover Ratio (in time) shows a continuous decrease from 4.97 in 1999-00 to

3.05 in 2001-02 and alternate decrease/increase from 4.21 in 2002-03 to 6.95 in 2007-08.

Decrease took place to 4.08 in 2008-09. It averages at 5.31.

Average Payable Period (in days) shows a continuous increase from 73.45 in 1999-00 to

119.64 in 2001-02 and alternate increase/decrease from 86.76 in 2002-03 to 52.53 in 2007-

08. Increase took place to 89.37 in 2008-09. It averages at 78.10.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.12NAFL

Year PTR(IN TIME) APP(IN DAYS)1999-2K 4.97 73.452000-01 3.46 105.372001-02 3.05 119.642002-03 4.21 86.762003-04 3.42 106.772004-05 8.99 40.602005-06 5.98 61.072006-07 8.03 45.442007-08 6.95 52.532008-09 4.08 89.37

Mean 5.31 78.10(Source: Annual Reports 1999-2009)

7.4.13 PRIVATE SECTOR (Table No.7.4.13)

Payable Turnover Ratio (in time) shows an alternate increase/decrease from 2.64 in

1999-00 to 2.52 in 2001-02 and continuous increase from 2.50 in 2002-03 to 6.66 in 2007-

08. Decrease took place to 6.15 in 2008-09. It averages at 4.02.

Average Payable Period (in days) shows an alternate decrease/increase from 138.29 in

1999-00 to 145.11 in 2001-02 and continuous decrease from 145.80 in 2002-03 to 54.76 in

2007-08. Increase took place to 2008-09. It averages at 104.04.

172

MANAGEMENT OF PAYABLES-TABLE NO.7.4.13 PRIVATE SECTOR

Year PTR(IN TIME) APP(IN DAYS)1999-2K 2.64 138.292000-01 2.90 125.932001-02 2.52 145.112002-03 2.50 145.802003-04 2.78 131.252004-05 3.88 94.112005-06 4.45 81.972006-07 5.72 63.842007-08 6.66 54.762008-09 6.15 59.34

Mean 4.02 104.04(Source: Annual Reports 1999-2009)

7.4.14 INDUSTRY (Table No. 7.4.14)

Payable Turnover Ratio (in time) shows a continuous decrease from 4.47 in 1999-00 to

3.74 in 2001-02 and increase from 4.03 in 2002-03 to 10.00 in 2008-09. It averages at

5.54.

Average Payable Period (in days) shows a continuous increase from 81.61 in 1999-00 to

97.52 in 2001-02 and decrease from 90.67 in 2002-03 to 36.49 in 2008-09. It averages at

71.56.

MANAGEMENT OF PAYABLES-TABLE NO.7.4.14INDUSTRY

Year PTR(IN TIME) APP(IN DAYS)1999-2K 4.47 81.612000-01 4.19 87.152001-02 3.74 97.522002-03 4.03 90.672003-04 4.49 81.352004-05 5.55 65.812005-06 5.61 65.022006-07 6.34 57.582007-08 6.97 52.372008-09 10.00 36.49Mean 5.54 71.56

(Source: Annual Reports 1999-2009)

Study shows that IFFCO, RCF, CFL and Cooperative Sector have the highest PTR in

Cooperative Sector, Public Sector, Private Sector and Industry respectively. KRIBHCO,

MFL, GSFC and Private Sector have the highest APP in Cooperative Sector, Public Sector,

Private Sector and Industry respectively.