First 3 Pagespseomgposemgopm

8/11/2019 First 3 Pagespseomgposemgopm

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Summer Internship Report

Ballarpur Industries Limited (Unit Shree Gopal, Yamunanagar)

Submitted to Dr. SSBUIC !, "an#ab Uni$ersit% Chandigarh

In partial &ul&illment o& the degree o&

B (Chemi'al) ith B*

Session (+ - + -/)

Submitted By:

0RIS12* 0U *R

CM10215

BE(Chemical) with MBA


2/85

*C0234L DG 2!

No good wo ! ca" be do"e alo"e#$ a% the %ayi"g goe% i% t uly

a&&licable' A ie"d$ &hilo%o&he a"d a guide alway% act% %ou ce o i"%&i atio"

a"d moti atio" to accom&li%h a gi e" ta%!' *t o te" ha&&e"% that o"e i% at lo%% o

wo d% whe" o"e i% eally tha"! ul a"d %i"ce ely wa"t% to e+& e%% o"e,% eeli"g o

g atitude towa d% othe '

* am ea "e%tly g ate ul to r. R*0 S1 C1*4L* anager (5inan'e) Ballarpur

Industries Ltd(Unit Shree gopal, Yamunanagar) o & o idi"g me a" o&&o tu"ity to

u"de ta!e & o-ect wo ! i" thei e%teemed o ga"i.atio" a"d & actical t ai"i"g which will

go lo"g te m i" %ha&i"g my ca ee '

* al%o e+& e%% my dee&e%t g atitude tor. S.L *R3R* (*ssistant anager) a"d

hi% team who %u&&o ted a"d guided me with thei i" aluable i"%ight% a"d %ugge%tio"% a"d

& o ided a lot o & actical t ai"i"g' /hey di ectly made a %ig"i ica"t co"t ibutio" toeme ge"ce to thi% & o-ect e&o t'

* am dee&ly i"debted to Dr. S.0. *G*R4*L a"d Dr. G*UR*6 R*!!*2

(/ ai"i"g a"d laceme"t ice ) o the i"%titute o thei aluable co"t ibutio"

guida"ce i" & e&a atio" o thi% t ai"i"g e&o t'

Submitted B%7

0RIS1*2 0U *R

2


3/85

"R 5*C

actical t ai"i"g i% a" im&o ta"t &a t o the theo etical %tudie%' *t i% o a"

imme"%e im&o ta"ce i" the ield o ma"ageme"t' *t o e % the %tude"t% to e+&lo e the

aluable t ea%u e o e+&e ie"ce a"d a" e+&o%u e to eal wo ! cultu e ollowed by the

i"du%t ie% a"d the e by hel&i"g the %tude"t% to b idge the ga& betwee" the theo ie%

e+&lai"ed i" the boo!% a"d thei & actical im&leme"tatio"%'/ ai"i"g &lay% a" im&o ta"t ole i" utu e buildi"g o a" i"di idual %o that

he3%he ca" bette u"de %ta"d the eal wo ld i" which he ha% to wo ! i" utu e' /he theo y

g eatly e"ha"ce ou !"owledge a"d & o ide o&&o tu"itie% to ble"d theo etical with the

& actical !"owledge whe e t ai"ee% get amilia with ce tai" a%&ect% o i"du%t ie%$ li!e

%ho& loo ma"ageme"t$ & oductio" & oce%% a"d i"du%t ial elatio"%' * eel & oud to get

my%el t ai"ed at B*4/ ( "it Sh eego&al$ 6amu"a"ga ) that i% o"e o the to& mo%t &a&e

ma"u actu i"g i"du%t ie% i" *"dia'

/he to&ic which * ha e ta!e" o & o-ect i% 8*nal%sis o& &inan'ial

ratios9 that ha% bee" %ugge%ted to me by i"a"ce de&a tme"t B*4/ ( "it Sh eego&al)'

Accom&li%hme"t a"d achie eme"t o goal% i% the ma-o aim o a"y o ga"i.atio"' /he%e

goal% a e achie ed by & o&e &la""i"g' A"aly%i% o i"a"cial atio% &lay% a" im&o ta"t ole

i" achie i"g the%e goal%'

7


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!able o& Contents

Chapters !opi' "age 2o.E+ecuti e Summa y 5

Cha&te 8 1 *"t oductio" to Com&a"y 9 5;Cha&te 8 2


5/85

: CU!I6 SU *RY

/he & ime ob-ecti e o my & o-ect wa% to %tudy about the @o !i"g Ca&ital

Ma"ageme"t i" the u"it'

" the Working Capital o"t$ * had to a"aly.e whethe the u"it wa% utili.i"g it%

cu e"t a%%et% at a" o&timum le el to meet it% cu e"t liabilitie%$ %o that the

a&& o& iate li uidity le el wa% mai"tai"ed'

* got the & i ilege to lea " how e ecti ely a u"it ca" ma"age thei @o !i"g

Ca&ital e ui eme"t% with the u"di"g & o ided to them o" a day to day ba%i%' o

thi% &u &o%e$ a u"d &o%itio" %tateme"t had to be & e&a ed o" a daily ba%i% i"

o de to e%timate the %u &lu% o the de icit i" u"d% %o & o ided'

/he u"d &o%itio"% a e & e&a ed i" two &a t%:

i %tly$ with e%&ect to the ba"!% th ough which the daily t a"%actio"% a e

u"de ta!e"'

Seco"dly$ with e%&ect to the di e e"t head% %uch a% wage% a"d %ala ie%$ e+ci%eduty etc'

@ith the hel& o the i"di"g% a oadma& o the %ucce%% o the "it wa%

co"%t ucted which i"cluded ce tai" recommendations om my %ide which we e

eadily acce&ted a"d a&& eciated by the Manager o the i"a"ce e&a tme"t i" the

"it'

5


6/85

C1*"! R -

I2!R3DUC!I32

B*LL*R"UR I2DUS!RI S LI I! D

1.1 COMPANYS HISTORY & BACKGROUND

r.Gautam !hapar (Chairman, BIL!)

8BIL! is India;s largest paper 'ompan% and the onl% Indian 'ompan% to ran< amongst top -

paper 'ompanies in the orld8

B*LL*R"UR I2DUS!RI S LI I! D $ &o&ula ly !"ow" a% B*4/ is De&&i'ientl%

managed=, >&inan'iall% sound=, a"d Dsel& su&&i'ient=a"d Dsel& made > 'ompan% i% u"de the

lag%hi& o the co eted !1*"*R GR3U"S '

Balla &u *"du%t ie% 4imited (B*4/) i% !"ow" a% the bac!bo"e o the /ha&a g ou&' /he

ou"de o the /ha&a g ou& wa% Late Lala 0aram Chand !hapar (-? -?@+) ' "e o the

mo%t illu%t iou% i"du%t ial chai"% i" *"dia$ /ha&a g ou& co"%i%t% o ma"y ma-o i"du%t ie%

%uch a% &a&e $ chemical%$ gla%%$ &ul&$ chi"a clay$ elect o"ic% etc. /he e a e 5; com&a"ie% a"d =;

&la"t% u"de thi% g ou&' Some o the mai" com&a"ie% u"de thi% g ou& a e C om&to" ea e%$

F'C'4$ B o% GC/ 4imited$ B*4/'

B*4/$ which i% o igi"ally i"co &o ated i" 1>;5 a% Balla &u St aw Boa d Mill%$ ha% cha"ged it% "ame

i" Ma ch 1>;9 to Balla &u &a&e a"d %t aw boa d mill% a"d agai" it wa% cha"ged to the & e%e"t

"ame i" ctobe 1>?5' Si"ce the" the com&a"y ha% g ow" to be a leade i" &a&e i"du%t y by

co"ti"uou% e+&a"%io" a"d mode "i.atio" o it% ca&acity a"d &la"t a"d %t ategic ac ui%itio"%'

9


7/85

B*4/ i% the u"di%&uted leade i" the *"dia" &a&e i"du%t y' *t i% al%o *"dia,% la ge%t ma"u actu e a"d

e+&o te o &a&e $ with a %t o"g & e%e"ce i" all %egme"t% o the u%age %&ect um that i"clude% @ iti"g

i"ti"g a&e $ *"du%t ial a&e a"d S&ecialty a&e ' Com&leme"ti"g thi% i% a di e %i ied

& oductio" i" a%t uctu e with %i+ ma"u actu i"g u"it% %& ead ac o%% the cou"t y'

*" ece"t yea %$ B*4/ ha% e ol ed a% a mo e dy"amic$ !"owledge d i e" o ga"i.atio" ocu%ed

towa d% c eatio" o %ta!eholde alue' *" the & oce%%$ it ha% al%o t a"% o med the &a&e i"du%t y om

it% t aditio"al ,commodity ma !et, mi"d%et to a b a"ded o"e' A co"ce ted & og am o i""o atio" a"d

tech"ological e+celle"ce hel&% it & oacti ely e%&o"d to the "eed% o each i"di idual %egme"t' /oday$

B*4/ "ot o"ly ha% the a"ge$ but al%o a well e"t e"ched di%t ibutio" "etwo ! that e"able% it to each

cu%tome %$ a"y time$ a"y &lace'

A% the i"du%t y leade $ B*4/ i% committed to de elo&i"g it% bu%i"e%% towa d% ecological$ %ocial a"d

eco"omic %u%tai"ability' Commu"ity de elo&me"t a"d u&li tme"t o the ma gi"ali.ed cla%% ha e

bee" ide"ti ied a% ocu% a ea%' B*4/ ha% -oi"ed ha"d% with atham$ a" N that u"% & ima y

educatio" & og am% all o e the cou"t y' A !ey i"itiati e i" e" i o"me"tal accou"tability i% the B*4/

a m o e%t y & og am that ha% co e ed mo e tha" ?500 a me % %i"ce 2001'

BIL! is the largest and most respe'ted paper 'ompan% in India and a leader in the segments o&

riting and printing paper. It also en#o%s a sustainable presen'e in the


8/85

-.+ L3C*!I32S

/he g ou& i% head ua te ed i" Gurgaon '/hey ha e acto ie% i" the ollowi"g locatio"%:

"it Balla &u o Balla %hah (Maha a%ht a) acto y %ta ted i" 1>59

"it Sh ee go&al (6amu"a"aga $ Ha ya"a) acto y %ta ted i" 1>79

"it Sewa ( i%%a)

"it Bhigwa" ( u"e)

"it Famala&u am (A"dh a ade%h)

"it A%thi

=
http://www.bilt.com/reachballar.asphttp://www.bilt.com/reachsewa.asphttp://www.bilt.com/reachbhigwan.asphttp://www.bilt.com/reachkamal.asphttp://www.bilt.com/reachballar.asphttp://www.bilt.com/reachsewa.asphttp://www.bilt.com/reachsewa.asphttp://www.bilt.com/reachbhigwan.asphttp://www.bilt.com/reachbhigwan.asphttp://www.bilt.com/reachkamal.asphttp://www.bilt.com/reachkamal.asphttp://www.bilt.com/reachballar.asp


9/85

BOARD OF DIRECTORS

e'uti$e Independent

r. Gautam !hapar Chairman r. R 0 *hu#ar. RR 6aderah anaging Dire'tor r. San#a% Labroor. B 1ariharan Group Dire'tor (&inan'e) r. Shardul S Shro&& Dr Ram S !arne#a r. " 0 Baner#i 2ominee o& LIC rs.Ramni 2irula 2ominee o& ICICI Ban< 6i'e *dmiral 00 2a%%ar (retd)

-. 6isionu a%&i atio" i% to become a leadi"g c eato o Sha eholde Ialue i" the a&e *"du%t y'

/o achie e thi%$ we will u%e the ENE< 6 o ou &eo&le$ de elo& a"d im&leme"t leadi"g edge

tech"ologie% a"d d aw o" both to deli e e ecti e wo ld cla%% %olutio"% to ou cu%tome %'

-.E ission

/o achie e thi%$ we will ENE< *SE ou &eo&le$ with a &o%iti e cultu e that ewa d% *NN IA/* N$

b eed% *N*/*A/*IES a"d e"cou age% *N/E44* EN/ i%! ta!i"g

/o co"%i%te"tly out&e o m e+&ectatio"% a"d deli e %u&e io alue to both ou Cu%tome % a"d

Sta!eholde %

>


10/85

-./ Core 6alues 1onest%7 /o be & i"ci&led$ %t aight o wa d a"d ai i" all deali"g%'

Integrit%7 Mai"tai"i"g the highe%t %ta"da d% o & o e%%io"ali%m'

5le ibilit%7 Ada&ti"g ou %el e% to alway% %tay a %te& ahead o cha"ge'

Respe't &or Indi$idual7 i i"g each &e %o" oom to co"t ibute a"d g ow'

Respe't &or 0no ledge7 /o ac ui e a"d a&&ly leadi"g edge e+&e ti%e i" all a%&ect% o ou bu%i"e%%'

!eam "er&orman'e7 /he team come% i %tJ "o"e o u% i% a% good a% all o u%K

-.@ 26IR32 2!*L "3LICY

B*4/ belie e% i" %y"e gi.i"g bu%i"e%% i"te e%t% with e" i o"me"tal accou"tability' @e the Sh ee

o&al "it ollow %t i"ge"t e" i o"me"t ma"ageme"t %y%tem% a"d a e mo i"g towa d% *S 1;001

ce ti icatio"' u the i"g it% d i e towa d% & otecti"g the e" i o"me"t a"d educi"g &ollutio"$ the

"it ha% i" &lace the ollowi"g guideli"e%:

Set a"d &e iodically e iew %ou"d e" i o"me"tal ob-ecti e% a"d ta get%'

*"%tall$ mai"tai" a"d o&e ate acilitie% to com&ly with all a&&licable e" i o"me"tal law%

a"d othe egulatio"%'

Co"%e e "atu al e%ou ce% a"d e"e gy by th ough co"%i%te"tly educi"g co"%um&tio" a"d

wa%tage'

omote a m o e%t y o %u%tai"able a ailability o ib ou% aw mate ial'

10


11/85

*"t oduced clea"e a"d e"e gy e icie"t & oce%%e% i" a &ha%ed ma""e '

e elo& a" e" i o"me"tal co"%ciou% a&& oach# amo"g%t all em&loyee%

-.F ualit% "oli'%

@e a e the ma"u actu e% a"d %u&&lie% o a iou% g ade% o &a&e a"d coated &a&e a"d boa d' *t will

be ou e"dea o to co"ti"uou%ly im& o e the uality a"d %e ice o ou & oduct% o bette cu%tome

%ati% actio"'

E e y i"di idual i" the u"it %hall %ta"d committed a"d ocu%ed to thi% %tage ob-ecti e by

ado&ti"g total uality ma"ageme"t (/LM) met ology aimed at co"ti"uou% im& o i"g ou %y%tem$

& actice% a"d & e e e"ce' /hu% co"%ta"tly educi"g co%t th ough mi"imi.i"g wa%tage' @e %hall be

committed to com&ly with the e ui eme"t% i i"te "atio"al %ta"da d% o" uality ma"ageme"t %y%tem

a"d co"ti"ually im& o e it% e ecti e"e%% i" it% t ue %& ite th ough i" ol eme"t o em&loyee% a"d

t ai"i"g'

1.7.1 TQM

DR. 2. D4*RDS D 2I2GS -E "3I2!S

1' C eate co"%ta"cy o &u &o%e towa d im& o eme"t

2' Ado&t the "ew &hilo%o&hy'

7' Cea%e de&e"de"ce o" i"%&ectio" to achie e uality'

;' Mi"imi.e total co%t'

5' *m& o e co"%ta"tly'

9' *"%titute t ai"i"g'

?' *"%titute leade %hi&'

=' i e out ea '

>' B ea! dow" ba ie % b3w de&a tme"t'

10' Elimi"ate %loga"$ ta get a"d e+ho tatio" o the wo ! o ce' 11


12/85

11' 1' Elimi"ate wo !% %ta"da d'

2' Elimi"ate ma"ageme"t by ob-ecti e

12'


13/85

Brand Building : *"c ea%i"g b a"d i" ol eme"t o the & oduct% amo"g%t cu%tome % to

educe ma !et agme"tatio" a"d attai" ge"e ic b a"d# %tatu% ia %t ategic buildi"g'

De Commodisation and Ser$i'e 3rientation :


14/85

-.- ar


15/85

the%e e e yday i"%ta"ce% ac o%% the le"gth a"d b eadth o the "atio" with thei wide & oduct &o t olio

a"gi"g om ba%ic to high e"d %&ecialty &a&e '

Coated @ood ee a&e

"coated Hi B ight a&e Bu%i"e%% Statio"a y

Co&y a&e

S&ecialty i"e a&e

@hile the%e i"dicate thei b oad & oduct %egme"t%$ B*4/ al%o co"ti"uou%ly ocu%e% o" %e i"g

cu%tome % with cu%tomi.ed$ alue added & oduct% to %uit %&eci ic a&&licatio"%'

-.-+ "rodu'ts and Brands

Segments BIL! Brands

B*4/ Em&e o A t a&e C1SChromo B*4/


16/85

Su"%hi"e Su&e i"ti"g1i Bright /A Ma&litho NS & emium

B*4/


17/85

St ategically im&leme"ted Enterprise Resource Planning (E< ) Sy%tem$ eal time logi%tic% a"d

Just-in-Time (JIT) i" e"to y %olutio"% e"able highly e ecti e a"d e icie"t di%t ibutio" o locali.ed

B*4/ & oduct% ac o%% u ba"$ %emi u ba" a"d u al co"%um&tio" ce"te % "atio" wide' A di ect

ma !eti"g i"itiati e by the com&a"y to e%tabli%h a two way i"te actio" with cu%tome % i% a"othe

%te& o wa d i" thi% di ectio"'

-.-E * ards and re'ognition

Business orld 5ICCI a ard7 Bilt ecei ed a citatio" awa d o it% CS< & o-ect% a"d wa%

o"e o the %i+ com&a"ie% %elected'

Business &or so'ial responsibilit% a ard : Bilt % CS< & o-ect% we e o"e o the i e

com&a"ie% %elected o thi% awa d'

S43! *2*LYSIS

S!R 2G!1S7 oodwill o the com&a"y a% it i% *"dia % la ge%t &a&e ma"u actu e

Ma+imum a iety o &a&e

High uality o &a&e

New &ul& mill

ood em&loye em&loyee elatio"%hi&

E icie"t ma"ageme"t'

/otally com&ute i.ed a% they u%e the o acle a&&licatio" ba%ed e"te & i%e e%ou ce &la""i"g

(E< ) %y%tem o bette ma"ageme"t o e%ou ce%'

/eam buildi"g'

ul illi"g %ocial e%&o"%ibility by !ee&i"g e" i o"me"t clea"

1?


18/85

Ado&tio" o /LM met ology hel&% i" educi"g co%t th ough mi"imi.i"g co%t'

3""3R!U2I!I S7

@ide%& ead o & i"t a"d media i"du%t y & o ided a ma-o boo%t to &a&e i"du%t y'

B*4/ ha e tech"ology tie u& with wo ld cla%% &o&ula com&a"ie%'

B*4/ ha% 25O %ha e i" &a&e i" *"dia'

B*4/ ha% eached the owth Stage'

4 *02 SS S7

Sho tage o u"d%'

""ece%%a y bloc!age o u"d%'

low o u"d% co"t olled by head o ice o a"y u"it'

Co"ce"t atio" o mill i" o"e &a ticula a ea'

!1R *!S7

*"c ea%e i" & ice% o aw mate ial'

*m&o ted &a&e '

No" 8a ailability a"d high co%t o ib e'

o e "me"t &olicie%'

*"c ea%e i" com&etitio" '

High co%t o &owe

1=


19/85

BIL! S1R G3"*L, Y* U2*2*G*R

Unit "ro&ile

Year o& In'eption7 1>79

Lo'ation7 6amu"a"aga $ Ha ya"a

*rea7 21? ac e%

2earest Railhead7 Gagadh i

Lo'al Language7 u"-abi$ Hi"di

Installed Capa'it%7 ?5$000 to""e% &e a""um"rodu't Range7 001:2000 ce ti ied

o Luality Ma"ageme"t Sy%tem

Unit Shree Gopal i% %ituated at 6amu"a"aga i" Ha ya"a' *t co"t ibute% about 20O towa d% total

& oductio" o &a&e ma"u actu ed by B*4/' /hi% mill wa% ta!e" by /ha&a i" 1>7?' *t too! o e

yea % i" the & oce%% o ebuildi"g$ e+&a"%io" a"d di e %i icatio"' B*4/ "it Sh ee o&al$

6amu"a"aga i% & oduci"g &a&e at 12>O o it% ca&acity utili.atio"' B*4/ S li!e a"y othe &a&e

i"du%t y i% highly e"e gy i"te"%i e'

/oday "it Sh ee o&al i% o"e o the la ge%t u"it o B*4/' /hi% u"it i% made o achie i"g much i"

te m% o i"c ea%ed out&ut$ g eate e icie"cy i" i"&ut co"%um&tio" a"d e"de i"g a bette a"d

& om&t %e ice% to the cu%tome %' /he u"it & oduce% ?21 di e e"t b a"d% o &a&e o"ly i" the o m

o oll% a"d eam%' /he u"it em&loy% 7700 &eo&le a"d ma"u actu e% uality w iti"g$ & i"ti"g a"d

coated &a&e ' /he u"it ha% %i+ la ge a"d high %&eed machi"e% that ta!e% i" all !i"d% o aw

mate ial% li!e g a%%e%$ baga%%e$ cotto" wa%te to tu "out %&ecial &a&e with a" e+ ui%ite i"i%h'

1>


20/85

/he u"it al%o ha% th ee &ul& machi"e to co" e t aw mate ial i"to &ul& o &a&e $ ca&acity o %e e"

&a&e machi"e i% ?0000 to""e% o &a&e $ alo"g with that u"it al%o ha% got two &a&e coati"g

machi"e% with a ca&acity o & oductio" 1?000 to""e% o coated &a&e '

"R3DUC!S *2U5*C!UR D7

High uality wood ee B*4/ Cla%%ic


21/85

9' !ra&&i' department : /hi% de&a tme"t i"clude% wi"g %ectio"$ aw mate ial %ectio"$

t a"%&o t %ectio" etc'

1U *2 R S3URC D "*R 2!

*" u"it Sh ee o&al e %o""el e&a tme"t i% !"ow" a% the Huma"


22/85

-. I2DUS!RI*L R L*!I32S :

*t i% mai"ly elated to the i%%ue% elati"g to elatio"% e+i%t% betwee" the wo !e % 3 u"io" a"d

ma"ageme"t$ how to egulate the%e elatio"% to mai"tai" i"du%t ial &eace a"d democ acy with i" the

i"du%t y3u"it'

Ia iou% machi"e ie% a e the e to egulate the elatio"% li!e:

Grie$an'e "ro'edure : Ste&ladde & ocedu e i% de i"ed by the com&a"y to ed e%% the

g ie a"ce% o the wo !e % om the immediate %u&e io to highe autho ity$ the e i% al%o a

g ie a"ce committee i% thi% co"te+t'

Colle'ti$e Bargaining : @age% ag eeme"t% betwee" u"io" a"d ma"ageme"t a e do"e th ough

collecti e ba gai"i"g & oce%%$ be%ide thi% othe i%%ue% a e al%o %ettled by collecti e ba gai"i"g

whe e e ual "umbe o e& e%e"tati e o both ma"ageme"t a"d u"io" "egotiate o" co"ce "ed

i%%ue%

4or


23/85

/o mai"tai" atte"da"ce$ lea e$ o e time duty$ eco d% o all em&loyee%$ co"%olidati"g the

wo !i"g day% at the e"d o the mo"th a"d ad ice accou"t% de&a tme"t o &ayme"t o %ala y'

e&loyme"t o ca%ual labo '

Com&ly with %tatuto y e ui eme"t u"de the Act'

*ttendan'e Rule 8 > mi" g ace &e iod i% allowed to both cle ical a"d ma"ageme"t %ta at the

%ta t o the %hi t a"d al%o du i"g %hi t b ea!%' * a &e %o" i% late by mo e tha" > mi"$ he ha% to

%ubmit a %ho t lea e'

!hree Shi&ts are there

12 a'm' to = a'm'

= a'm' to ; &'m'

; &'m' to 12 a'm'

e"e al ?'70 a'm' to ;'70 &'m

4u"ch b ea! 12 "oo" to 1 &'m

3$ertime 8 ouble the actual amou"t &aid a te =h % o wo ! to wo !e a"d cle ical %ta % .

e time i% allowed agai"%t Ab%e"tee

o Iaca"cie%

o Shuto Ca%ual

o New -ob

o aid holiday

Lea$e rules7 o cle ical %ta % 8 4ea e yea 1%t Ga"ua y to 71%t ecembe '

o ma"ageme"t %ta % 84ea e yea 1 %t A& il to 71 %t Ma ch'

. 4*G S *2D S*L*RY *D I2IS!R*!I32 :

27


24/85

@age% o the wo !e % a e dete mi"ed by the ag eeme"t betwee" ma"ageme"t a"d u"io"$ %o di e e"t

%lab% a e de i"ed o %!illed$ u"%!illed a"d cle ical wo !e %$ which a e e i%ed om time to time'

Sala ie% o ma"ageme"t %ta % a e dete mi"ed acco di"g to & e aili"g i"du%t y ate$ -ob

e%&o"%ibility$ &o%itio" i" the hie a chy$ !"owledge$ e+&e ie"ce$ uali icatio"%$ a"d i+ed du i"g the

a&&oi"tme"t o the co"ce "ed &e %o" with & e dete mi"ed i+ed allowa"ce%$ which i"clude ba%ic a"d

&e !%'

E. S!*BLIS1 2!7

/hi% de&a tme"t ba%ically deal% with em&loyee &e %o"al eco d%$ %a i"g %cheme%$ i"%u a"ce

%cheme%$ a"d %ocial %ecu ity %cheme% a"d a te eti eme"t %cheme% a"d etc'

/. S!*! *2D S CURI!I S 7

It in'ludes

1ouse


25/85

Ia iou% acti itie% i"clude:

Canteen7 A ca"tee" i% bei"g u" i" the u"it a% &e %tatuto y e ui eme"t%$ whe e the em&loyee%

a e bei"g & o ided acilitie% o ood a"d %"ac!% at %ub%idi.ed ate%' A 9 membe committee i%

u""i"g it% o&e atio"J with 7 membe % o each u"io"$ which i% bei"g chai ed by MC'A&& o+imately$ it %e e% 700 lu"che% a"d 150 di""e % &e day' Em&loyee% a e bei"g

cha ged at a e y "omi"al ate o


26/85

F. " R53R *2C *""R*IS*L SYS! 7

e o ma"ce o the em&loyee% i% a&& ai%ed twice i" a yea ' /hi% %y%tem ha% bee" totally

com&ute i.ed ece"tly' Com&a"y ha% de%ig"ed a web%ite i" the local a ea "etwo ! o the

com&a"y a"d both the a&& ai%e a"d a&& ai%e ca" acce%% that th ough logi" a"d &a%%wo d%'

=' !R*I2I2G *2D D 6 L3" 2!7

"e o the im&o ta"t u"ctio"% o C i% de%ig"i"g a"d co"ducti"g a iou% t ai"i"g a"d

de elo&me"t acti itie% o thei wo !e % a"d ma"ageme"t %ta % at all le el% with the moti e% to

i"c ea%e thei e ecti e"e%% a"d e icie"cy' So a iou% i" hou%e$ %&o"%o ed$ tech"ical t ai"i"g

& og am% a e co"ducted at &la"t le el at egula ba%i%'

ACC N/S E A


27/85

; Co"t acto &ayme"t% all the &ayme"t do"e o" the ba%i% o co"t act a"d the &ayme"t i% made at the

e"d o 10 th e e y mo"th

Mai" co"t acto chi ag

5%tabli%hme"t

9co%ti"g & oduct ba%ed co%ti"g & o it i% dete mi"ed o" the ba%i% o co%ti"g de&a tme"t it i%

dete mi"ed wee!ly a"d it i% al%o hel& ul i" co"t olli"g wa%tage

? %ale% ta+ %ecto Pdi ect a"d i"di ect ta+

H C ba"! mai"ly i"a"ci"g

(II) "R3C SS D "*R! 2!7

1' "ulp mill : *t% u"ctio" i"clude% ma"u actu i"g o &ul& a"d %toc! & e&a atio"'

2' a'hine house : *t co"t ol% the wo !i"g o a iou% &a&e machi"e% a"d & e&a e% the

&a&e o e ui ed ua"tity'

7' Coating plant : ima y u"ctio" o thi% de&a tme"t co"ce " with coati"g o &a&e a%

&e e ui eme"t%'

;' Soda re'o$er% plant : u"ctio" o thi% de&a tme"t i% to loo! a te the & oce%% o

eco e y o u%e ul chemical om wa%te li uo '

5' Causti' soda 'hlorine plant (CSC") : /hi% de&a tme"t %u&e i%e% the & oductio" o

Hcl a"d Na H'

"rodu'tion "ro'ess and Departments *ssisting the"ro'ess

2?


28/85

R*4 *!RI*L D "*R! 2!

Mai" %ou ce% o &ul& aw mate ial a e wood$ bamboo a"d wa%te om wood & oduct%

ma"u actu i"g com&a"ie%'

@a%te om wood & oduct% ma"u actu i"g com&a"ie% i% the chea&e%t i'e' Ie"ee @a%te

(&lywood) a"d &o&ula i% mo%t e+&e"%i e wood'

A ou"d 900 ?00 to""e% o wood i% e ui ed by the ul&e daily de&e"di"g u&o" the moi%tu e

co"ditio"% a"d the & oduct mi+'

A&& o+' a""ual co"%um&tio" i% a ou"d 2$?;$000 to""e%

C1I"" R D "*R! 2!

/hi% de&a tme"t chec!% the uality a"d moi%tu e i" wood a"d i" o m% the aw mate ial

de&a tme"t'

/he ca&acity o the chi&&e i% 25 to""e% &e hou '

So ti"g out o Ie"ee a"d chi&% i% do"e i" the %toc! ya d to chec! a"y o eig" &a ticle% li!e &la%tic wi e%'

@ate i% i %t &ut o" mate ial a"d the" o" co" eye % to ma!e the du%t %ettle'

Almo%t whole o the & oce%% i% automatic e+ce&t o"ly o &utti"g the mate ial o" the

co" eye %'

2=


29/85

aily a ou"d 900 ?00 to""e% i% chi&&ed de&e"di"g u&o" the weathe co"ditio"%'

*deal %i.e o wood i% = i"ch diamete a"d ? to 10 eet le"gth'

SIL3 D "*R! 2!

*t % the %to age ta"! o the chi&&ed wood a"d e"ee ' *t% mai" u"ctio" i% to %to e the u"u%ed

chi&&ed wood'

*t ha% = ta"!% o 50 to""e% ca&acity each %o total ca&acity i% ;00 to""e%'

*t ha% automatic %y%tem at the to& which it%el %elect% the ta"! i" which the chi&&ed wood i% to be

%to ed de&e"di"g u&o" ua"tity al eady & e%e"t'

/he" whe" the elt om the dige%te %ta t% the elt% o" the bottom o thi% ta"! al%o %ta t a"d the

mate ial %ta t% getti"g &o ed o" the belt a"d %ta t% mo i"g towa d% the dige%te '

/he e%idual wood which i% "ot coo!ed by the dige%te o the i %t time i% added to the elt at the

bottom %o a% to eu%e it'

Such e%idual wood i% i %t chec!ed o o eig" &a ticle% be o e bei"g &ut o" the elt agai"'

"UL" D "*R! 2!

2>


30/85

/he & oce%% %ta t% whe" chi&&ed wood %to ed i" the S*4 come% to thi% de&a tme"t whe e it %

illed i" the dige%te % o coo!i"g the" %c ee"ed a"d wa%hed to emo e u"wa"ted &a ticle%$ %uch

&a ticle% a e agai" e i"ed a"d eu%ed %o the e i% mi"imum wa%tage$ a te which the &ul& i%

bleached to im& o e b ight"e%% a"d i" the e"d it% i"ally ce"t ic clea"ed to emo e mi"ute%t

&o%%ible o eig" &a ticle%' /he" it % %to ed i" ta"!% be o e bei"g ta!e" om the e o & e&a atio"'

/he whole & ocedu e i% almo%t automatic o"ly ma"ual loadi"g i% do"e that to with hel& o machi"e% a"d -u%t ew o&e ato % a e the e to !ee& a chec! a"d ma!e %mall ad-u%tme"t%'

A te ta!i"g mate ial om the blow ta"! o coo!i"g it % &a%%ed th ough Gu"! / a& to emo e

wa%te the" it % %c ee"ed to emo e the u"coo!ed mate ial'

A% the e i% o matio" o oam i" the %lu y o &ul& chemical i% added to emo e oam' /he" the

%lu y i% wa%hed by &a%%i"g it th ough ; wa%he % that u%e wate o wa%hi"g it a"d i" the la%t wa%he

the colo get% cha"ged om blac! to b ow"' /he hot wate i% added o wa%hi"g i" the ; th wa%he a"d

it mo e% i" the o&&o%ite di ectio" om wa%he No'; to No'1 a"d become% com&letely blac! i" colo

which i% the" %e"d to eco e y de&a tme"t' @ate i% ecycled a"d u%ed agai" a"d agai"' /alcum

&owde i% added to the &ul& i" the ; th wa%he a te mi+i"g it with wate %o a% to im& o e uality a"d

bul! o the &ul&'

/hi% b ow" &ul& i% bleached i" bleachi"g %ectio" to ma!e the &ul& white a"d by t eatme"t o

chlo i"e ga% at Chlo i"e ga% towe ' Agai" &ul& i% wa%hed by Hy&o t eatme"t at Hy&o &la"t %o that to

SIL3

Coo


31/85

emo e e%idual chemical' ib e &ul&% a e u%ed to gi e %t e"gth i" &a&e the%e a e ed i"to %toc!

& e&a atio" &la"t' He e colou % a e al%o added to ma!e colou ed &a&e ' /hi% eady %tu i% "ow ed i"

&a&e machi"e' /he %tu i% eeded at wi e th ough head bo+ %o &ul& i% o med i"to %heet a"d at wi e

%ectio" wate i" &ul& i% emo ed by g a ity by %uctio" bo+e%'

/he o med %heet i% the" ed i"to & e%% &a t a"d the %heet i% & e%%ed i" betwee" oll% to emo e

wate ' /he" the &a&e i% otated i" d ye % %ectio" i" d ye % %ectio"' /o emo e u the moi%tu e i"

web3&a&e a"d the" ed i"to cale"da &a t to get %mooth"e%%' i"ally %heet i% emi"ded o" a" i o"

%heet oll (


32/85

72

*2*G R 355I2*2C

D%. *2*G R 355I2*2C

*. .R.S.L.*R3R*(5I: D

*SS !S,

*. .R.R.0.

!1*0R*L(BILLS

*. .R. 2.

*1UJ*(BKR)

D. .R.*S130 C13"R*

(S*L S !*:)

*. .R.

J3YD "B*2*RJ

355IC K : CU!I6 S

S!*55


33/85

*''ounts Costing Department

/hi% de&a tme"t ha"dle% all the accou"t% o the u"it% a"d & e&a e% the wee!ly$ mo"thly a"d a""ual

e&o t% to chec! the &e o ma"ce o the u"it a"d al%o to i"d out the ea%o" behi"d a ia"ce%' /hi%

de&a tme"t ha% bee" u the %ubdi ided i"to "i"e u"ctio"al de&a tme"t% that a e:

-. Sales !a 7 *t ha"dle% all the %ale% ta+ wo !' A% they a e %ome good% which a e %old di ectly

om the u"it to the &a tie% a"d othe % which a e %old th ough the Head ice %o it % thi%

de&a tme"t % -ob to %ee that &ayme"t o %ale% ta+ ha% to be made o" which t a"%actio" a"d ha%

to !ee& & o&e eco d% ega di"g %uch t a"%actio"%'

+. *"7 /hi% de&a tme"t ha"dle% all the c edito %' A% the e a e lot o ue ie% a"d e+&la"atio"% ha e

to be gi e"$ %o thi% wo ! i% ha"dled by a %e&a ate de&a tme"t' A te the good% a e ecei ed it %

thei -ob to ma!e the &ayme"t% %a"ctio"ed a"d i the e i% a"y & oblem the" they ha"dle% the

ue ie% o the c edito % ega di"g a"y deductio"% made by the com&a"y'

. Costing7 /hei -ob i% to collect data om the di e e"t de&a tme"t% a"d to calculate the co%t%

i"cu ed i" the u"ctio"i"g o the u"it' /hey & e&a e the e&o t% a"d chec! the a iatio"% om

the budget i a"y' *t hel&% i" !ee&i"g a co"t ol o e the a iou% u"ctio"% bei"g &e o med i"

the u"it'

E. stablishment7 *t deal% with labou &ayme"t%' *t% -ob i% to !ee& a eco d o all the &eo&le

wo !i"g i" the o ga"i.atio"$ to get i" o' About thei atte"da"ce om time o ice$ !ee& othe

eco d% elated to the &ayme"t% due to the em&loyee% a"d to i"ally ma!e %uch &ayme"t%

th ough %ala y accou"t%'

/. *udit7 /hi% de&a tme"t ba%ically ha"dle% the i"te "al audit amo"g%t the de&a tme"t% i" the

o ga"i.atio" a"d al%o betwee" the a iou% b a"che%$ o ice% a"d cutti"g ce"te %'

@. *R7 /hey ha"dle the ecei able%' *t % thei duty to chec! the amou"t to be collected o m a

debto a"d to %et c edit limit% o %uch debto % a"d to actually collect mo"ey om them'

77


34/85

F. Stores *''ounting7 /hei duty i% to hel& i" & ocu eme"t o the good% e ui ed by the %to e'

/hey a e middleme" betwee" the &u cha%e de&a tme"t a"d the %to e' /he %to e will i" o m

them about the good% e ui ed a"d they will & e&a e a &u cha%e o de to be %ubmitted to the

&u cha%e de&a tme"t' /hey will tell the &u cha%e de&a tme"t about the %&eci icatio" o the

item% to be &u cha%ed a"d al%o %ugge%t the be%t %u&&lie '

H. Bill at'hing7 /hei -ob i% to chec! whethe the good% ecei ed a e that which we e e ui ed$

to chec! the ua"tity a"d othe %&eci icatio"% o"ly a te thei chec!i"g the good% will be i%%ued

to the co"ce "ed de&a tme"t'

?. 5inan'e7 *t% duty i% to chec! the a ailability mo"ey to a a"ge o it whe" it % e ui ed a"d to

i"ally ma!e the &ayme"t%' /hey ha e to %chedule both ecei&t% a"d &ayme"t% %o that the u"it

u"ctio"% %moothly without a"y %ho tage o u"d%'

7;


35/85


36/85

C32C "!S 35 43R0I2G C*"I!*L

/he e a e two co"ce&t% o wo !i"g ca&ital:

a. #ross $orking capital.

%. &et $orking capital.

*" the b oad %e"%e$ the te m wo !i"g ca&ital e e % to the g o%% wo !i"g ca&ital a"d e& e%e"t% the

amou"t o u"d% i" e%ted i" cu e"t a%%et%' /hu% the g o%% wo !i"g ca&ital i% the ca&ital i" e%ted i"

total cu e"t %et% o the e"te & i%e'

Cu e"t a%%et% a e tho%e a%%et% which i" the o di"a y cou %e o bu%i"e%% ca" be co" e ted i"to ca%h

with a %ho t &e iod o "o mally o"e accou"ti"g yea '

C32S!I!U 2!S 35 CURR 2! *SS !S

1' Ca%h i" ha"d a"d ba"! bala"ce

2' Bill% ecei able%'

7' Su"d y debto %'

;' Sho t te m loa"% a"d ad a"ce%'

5' *" e"to ie% o %toc!% %uch a%:

(a)


37/85

.

2et or


38/85

*t i"dicate% the ma gi" o & otectio" a ailable to the %ho t te m c edito %'

*t i% a"d i"dicato o the i"a"cial %ou"d"e%% o a" e"te & i%e'

*t %ugge%t% the "eed o i"a"ci"g a &a t o the wo !i"g ca&ital e ui eme"t% out o &e ma"e"t %ou ce%

o u"d%'

/o co"clude$ it may be %aid that both$ g o%% a"d "et$ co"ce&t% o wo !i"g ca&ital a e im&o ta"t

a%&ect% o the wo !i"g ca&ital ma"ageme"t'

/he "et co"ce&t o wo !i"g ca&ital may be %uitable o"ly o & o& ieta y o m o o ga"i.atio"% %uch a% %ole

t ade o &a t"e %hi& i m%' But the g o%% co"ce&t i% %uitable to the com&a"y o m o o ga"i.atio" whe e

the e i% a di o ce betwee" ow"e %hi&$ ma"ageme"t a"d co"t ol'

2 D 35 43R0I2G C*"I!*L

o the e icie"t o&e atio" o the bu%i"e%%$ wo !i"g ca&ital i% e ui ed alo"g with the i+ed ca&italJ

wo !i"g ca&ital i% "eeded o the &u cha%e o aw mate ial a"d o the &ayme"t o a iou% day to day

e+&e"%e%' /he e will be ha dly a"y bu%i"e%%$ which doe% "ot e ui e a"y wo !i"g ca&ital' /he "eed o

wo !i"g ca&ital i% di e e"t i" di e e"t bu%i"e%%' i"a"cial ma"ageme"t aim% at ma+imi.i"g the wealth o

%ha eholde ' /o achie e the ob-ecti e$ it i% "ece%%a y to ea " ade uate & o it%' /he & o it de&e"d% la gely

o" %ale% but %ale do" t e%ult i" to ca%h immediately' /o i"c ea%e %ale% good% a e to be %old o" c edit$ the

collectio" o which ta!e% &lace time te m' /hu% the e e+it a ga& betwee" the %ale% o good% a"d eali.atio"

o ca%h' u i"g thi% &e iod e+&e"%e% i"cu ed to co"ti"ue bu%i"e%% o&e atio"%' o thi% &u &o%e$ wo !i"g

ca&ital i% e ui ed' /he "eed o wo !i"g ca&ital ca" be e+&lai"ed with the hel& o o&e ati"g cycle o ca%h

cycle' &e ati"g cycle mea"% that time &e iod which i% e ui ed to co" e t aw mate ial i" to ca%h' *"

ma"u actu i"g e"te & i%e aw mate ial &u cha%ed with ca%h$ tha" aw mate ial i% co" e ted i"to wo ! i"

& oce%%$ which i% the te m get% co" e ted i" to i"i%hed good%J both ecei able th ough %ale% a"d la%tly

ca%h i% ecei ed om debto % a"d bill ecei able'

7=


39/85

*" o&e ati"g cycle ollowi"g e e"t% a e i"cluded'

1' Co" e %io" o ca%h i"to aw mate ial'

2' Co" e %io" o aw mate ial i"to wo ! i" & oce%%'

7' Co" e %io" o wo ! i" & oce%% i"to i"i%hed good%'

;' Co" e %io" o i"i%hed good% i" to debto % a"d bill ecei able'

5' Co" e %io" o debto % a"d bill ecei able th ough %ale% i" to ca%h'

3" R*!I2G CYCL

/he g eate the &e iod o o&e ati"g cycle$ mo e will be the e ui eme"t o wo !i"g ca&ital' Bu%i"e%%

e"te & i%e% e"gaged i" ma"u actu i"g wo ! ha e la ge du atio" o o&e ati"g cycle a% com&a ed to tho%e

e"gaged i" t adi"g bu%i"e%% i" %uch e"te & i%e whe e ca%h i% di ectly co" e ted i" to i"i%hed good%'

A% "o bu%i"e%% i% able to match it% ca%h low a"d out low%$ the e o e the bu%i"e%% "eed% t

mai"tai" %ome ca%h to &ay it% cu e"t liabilitie% i" time' Simila ly$ to mai"tai" %u&&ly o good% to meet the

D B!3RS *2D BILL R C I6*BL

C*S1

43R0 I2 "R3C SS

*N*SHE S

R*4 *!RI*L

7>


40/85

dema"d i" the ma !et$ the %toc! o aw mate ial ha% to mai"tai"' i m ha% to %ell o" c edit due to the

com&etitio"' /hu%$ bu%i"e%% "eed% ade uate wo !i"g ca&ital'

CL*SSI5IC*!I32 3R 0I2DS 35 43R0I2G C*"I!*L

@o !i"g ca&ital may be cla%%i ied i" two way%:

-. 3n the basis o& 'on'ept.

+. 3n the basis o& time.

" the ba%i% o co"ce&t$ the @o !i"g ca&ital i% cla%%i ied a% g o%% wo !i"g ca&ital a"d "et wo !i"g

ca&ital a% di%cu%%ed ea lie ' /hi% cla%%i icatio" i% im&o ta"t o m the &oi"t o iew o the i"a"cial

ma"age ' " the ba%i% o time wo !i"g ca&ital may be cla%%i ied a%:

-. "ermanent or &ied or


41/85

!emporar% or $ariable or


42/85

0I2DS 35 43R0I2G C*"I!*L

43R0I2G C*"I!*L

32 !1 B*SIS 35 !I32 !1 B*SIS 35C32C "!

6*RI*BL4.C

5I: D4.C

2 !4.C

GR3SS4.C

;2


43/85

" R *2 2! *2D ! "3R*RY 43R0I2G C*"I!*L

I2 S13R! RU2

" R *2 2! *2D ! "3R*RY 43R0I2G C*"I!*L

I2 L32G RU2

" R *2 2!

! "3R*RY

!I * 3 U 2 ! 3 5 4 3 R 0 I 2 G C * " I ! * L ( R S )

;7


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PERMANENT AND TEMPORARY WORKING CAPITAL

IN LONG RUN

5*C!3RS *55 C!I2G !1 43R0I2G C*"I!*L R UIR 2!S

Bu%i"e%% %hould & e&a e it% i"a"cial &la" i" %uch a way that it ha% "eithe %u &lu% "o i"ade uate wo !i"g

ca&ital' /he "eed o e e y bu%i"e%% i% di e e"t but ge"e ally the acto mu%t be co"%ide ed while

dete mi"i"g the e ui eme"t o wo !i"g ca&ital'

" R *2 2!

! "3R*RY

!I

* 3 U 2 ! 3 5 4 3 R 0 I 2 G C * " I ! * L ( R S )

;;


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1' Natu e o the bu%i"e%%'

2' owth a"d e+&a"%io"'

7' oductio" cycle'

;' Bu%i"e%% luctuatio"%'

5' oductio" &olicy'

9' C edit &olicy'

?' A ailability o aw mate ial'

=' A ailability o ba"! c edit'

>' /u "o e o" i" e"to ie%'

10' Mag"itude o & o it'

11' 4e el o /a+e%'

12' i ide"d &olicy'

17' e& eciatio" &olicy'

1;' ice le el cha"ge'

15' &e ati"g e icie"cy'

I "3R!*2C 3R *D6*2!*G S 35 *D U*!

43R0I2G C*"I!*L

@o !i"g ca&ital i% the li e blood a"d "e e ce"te o a bu%i"e%%' Gu%t a% ci culatio" o blood i%

e%%e"tial i" the huma" body o mai"tai"i"g li e$ wo !i"g ca&ital i% e y e%%e"tial to mai"tai" the %mooth

u""i"g o a bu%i"e%%' Bu%i"e%% ca" u" %ucce%% ully without a"d ade uate amou"t o wo !i"g ca&ital' /he

mai" ad a"tage% o mai"tai"i"g ade uate amou"t o wo !i"g ca&ital a e a% ollow%:

;5


46/85

1' Sol$en'% o& the business7 Ade uate wo !i"g ca&ital hel&% i" mai"tai"i"g %ol e"cy o the

bu%i"e%% by & o idi"g u"i"te u&ted low o & oductio"'

2' Good ill7 %u icie"t wo !i"g ca&ital e"able% a bu%i"e%% co"ce " to ma!e & om&t &ayme"t% a"d

he"ce i" c eati"g a"d mai"tai"i"g goodwill'

7' as% loans7 A co"ce " ha i"g ade uate wo !i"g ca&ital$ high %ol e"cy a"d good c edit %ta"di"g

ca" a a"ge loa"% om ba"!% a"d othe % o" ea%y a"d a o able te m%'

;' Cash dis'ounts7 Ade uate wo !i"g ca&ital al%o e"able% co"ce " to a ail ca%h di%cou"t% o" the

&u cha%e% a"d he"ce it educe% co%t%'

5' Regular suppl% o& ra materials : Su icie"t wo !i"g ca&ital e"%u e% egula %u&&ly o aw

mate ial% a"d co"ti"uou% & oductio"'

9' Regular pa%ment o& salaries, ages and other da% to da% 'ommitments : A com&a"y which ha%

am&le wo !i"g ca&ital ca" ma!e egula &ayme"t o %ala ie%$ wage% a"d othe day to day

commitme"t% which wa%tage a"d co%t% a"d e"ha"ce% & oductio" a"d & o it%'

?' ploitation o& &a$orable mar


47/85

o the two$ it i% the i"ade uacy o wo !i"g ca&ital which i% mo e da"ge ou% om the &oi"t o iew o the

i m'

Disad$antages o& redundant or e 'essi$e or


48/85

;' /he i m ca""ot &ay day to day e+&e"%e% o it% o&e atio" a"d it c eate% i"e icie"cie%$ i"c ea%e%

co%t% a"d educe% the & o it% o the bu%i"e%%'

5' *t become% im&o%%ible to utili.e e icie"tly the i+ed a%%et% due to "o" a ailability o li uid u"d%'

9' /he ate o etu " o" i" e%tme"t% al%o all% with the %ho tage o wo !i"g ca&ital'

!13D 35 *CC3U2!I2G

B*4/ i% u%i"g R" in 3R*CL %y%tem o it% o"li"e accou"ti"g i" i"a"ce de&a tme"t' ollowi"g

Module% a e bei"g u%ed o the accou"ti"g'

Journal Ledger7 /hi% i% the accou"ti"g boo! i" the %y%tem whe e the Gou "al e"t ie% a e &o%ted'

4i!e o a" e+am&le:

*" e"to y A3c '

/o C edito % a3c

( o i" e"to y eco ded om the %u&&lie )

C edito % a3c '

/o Ba"! a3c

( o ayme"t made to the c edito )

*''ounts "a%able : /hi% &a ticula module !ee&% the t ac! o" the C edito %' /he e a e ba%ically

two ty&e% o c edito %$ the t ade c edito a"d othe c edito %' *t !ee&% o" u&dati"g the amou"t

&ayable to the c edito % a"d tell% u% how much amou"t i% to be &aid to the t ade a"d othe c edito %'

*''ounts Re'ei$ables : "li!e Accou"t% &ayable module the Accou"t% ecei able module !ee&%

the t ac! o" the debto %' /he debto % ha e al%o bee" %eg egated i"to t ade a"d othe debto %' /hey

ha e u the bee" bi u cated i"to %ecu ed a"d u"%ecu ed' /hi% module !ee&% o" u&dati"g the

amou"t ecei able om debto % a"d tell% u% how much amou"t i% &e"di"g om t ade a"d othe

debto '

Cash anagement7 Ca%h ma"ageme"t i" ol e% ma"agi"g ca%h low% i" a"d out o the i m a"d

a a"gi"g the ca%h de icit% o i" e%ti"g %u &lu% ca%h i" %ho t te m$ & o itable a"d li uid

o&&o tu"itie%' /he time ta!e" i" collecti"g a"d &ayi"g ca%h dete mi"e% the "eed o holdi"g ca%h$

;=


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a"d deci%io" to bo ow o i" e%t it' /he aim o ca%h ma"ageme"t i% to &e o m u"ctio"% at

mi"imum co%t'

5i ed *ssets7 /hi% &a ticula module deal% with the a%%et% that a e ca&itali.ed i" the bala"ce %heet

a"d de& eciatio" i% cha ged agai"%t %uch a%%et%' *t i" ol e% amou"t %&e"t o" %uch a%%et%' /hi%

mai"ly i"clude%

B (bloc!) item% o BE


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BL3C0 S!3R S

/he%e a e the %to e% u%ed i" ca&ital3 e e"ue -ob% i" & og e%%' /he e ui%itio" i% made by the co"ce "ed

e"gi"ee i" cha ge o the ca&ital wo ! i" & og e%%'

Bloc! %to e% a e actually the ca&ital good% which hel&% i" the & oductio"$ li!e machi"e y a"d the%e item%

a e 'apitaliAed in the balan'e sheet u"de the head o i+ed a%%et%' o %uch item% the depre'iation is

'harged a""ually' Sa"ctio" o %uch i"de"t i% gi e" by the de&a tme"t head a"d the u"it i" cha ge' *" ca%e

the &u cha%e i% abo e two la!h%$ the i"de"t i% %e"d to the H I a"d the & o-ect head alo"g with the

co e i"g lette ' *" thi% ca%e the &u cha%e o de i% i%%ued by the head o ice'

SS 2!I*L S!3R S

E%%e"tial %to e% a e thestores used in 'apitalKre$enue #obs in progress ' /he%e i"clude %to e% a"d %&a e%

&a t%' /he%e a e e%%e"tial becau%e without it the & oductio" ca""ot be do"e' /he e ui%itio" o %uch item%

i% do"e by the co"ce "ed e"gi"ee i" cha ge o the ca&ital wo ! i" & og e%%' Sa"ctio" o %uch i"de"t i%

gi e" by the de&a tme"tal head a"d the u"it i" cha ge' *" ca%e &u cha%e i% abo e two la!h%$ the i"de"t i%

%e"d to the H I a"d the & o-ect head alo"g with the co e i"g lette ' *" thi% ca%e the &u cha%e o de i%

i%%ued by the head o ice'

R GUL*RK R3U!I2 S!3R S


51/85

/he ma imum the minimum le$el o& sto'< a e set i" the %y%tem' /he%e le el% a e decided o" the ba%i%

o lead time a"d li e o the %toc! ' "ce the %toc! o good% eache% the mi"imum le el the %y%tem

automatically ge"e ate% o good% to be &u cha%ed' *" ca%e o egula %to e% the i"de"t i% i%%ued by the

%to e% o" a wee!ly ba%i% di ectly to the comme cial de&a tme"t'

! "3R*RY

/em&o a y %to e% a e tho%e catego ie% o %to e% which a e ide"ti ied to be i%%ued by the %to e de&a tme"t

o co"%um&tio" withi" 7 mo"th%' Sa"ctio" o %uch i"de"t i% gi e" by the de&a tme"tal head a"d the u"it

i" cha ge' *" ca%e o &u cha%e i% abo e 2la!h%$ the i"de"t i% %e"d to the H I a"d the & o-ect head alo"g

with the co e i"g lette ' *" thi% ca%e the &u cha%e o de i% i%%ued by the head o ice'

o the item% li!e BE/ the e ui%itio" i% gi e" by the e%&ecti e de&a tme"t%' But i" ca%e o < item%$

limit% a e de i"ed a"d a% %uch the e ui%itio" i% do"e automatically whe" the %toc! eache% the mi"imum

le el i" the %y%tem'

5I LD 43R0

Study o low i" e"to y om a iou% de&a tme"t% ight om the e ui%itio" till it% co"%um&tio" ( ecei&t)

by the co"%umi"g de&a tme"t'

51


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5L34 35 I26 2!3RY 5R3 6*RI3US D "*R! 2!S

R UISI!I32

"de thi% the


53/85

u cha%e o de i% & e&a ed by the &u cha%e de&a tme"t i"timatio" i% %e"d to the %u&&lie ' /he u cha%e

o de co"tai"% the des'ription o& the material re uired and the terms and 'onditions at which the

o de ha% bee" &laced to the %u&&lie '

/he terms and 'onditions may a e li!e:

Negotiated Price i'e' the ate at which the mate ial i% to be &u cha%ed'

Mode of Payment : /he &ayme"t to the t ade %u&&lie ca" be i ect$ th ough Hu"di o Sola'

Credit Period allowed : /hi% i% the &e iod i" which the &ayme"t ha% to be made to the %u&&lie %

o"ce the mate ial i% ecei ed'

/he o de o the mate ial e ui ed i% eithe &laced th ough the local b a"ch (2 "CL) o th ough

C"3 ' /he%e a e the b a"che% which act a% mediato betwee" the cu%tome a"d the %u&&lie ' /hey

& o ide the mate ial to B*4/ a% &e the e ui eme"t a"d at the "egotiated & ice%' o %uch wo ! they

cha ge the commi%%io"'

C ha% b a"che% i" all o e *"dia i" ab oad th ough which it call% u&o" the mo%t %uitable %u&&lie

o the &u cha%e o the mate ial e ui ed'

*" ca%e the alue o the mate ial e+ceed%


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Inspection "de thi% & oce%% the docume"tatio" o the mate ial a e i"%&ected i'e' the i" oice ate a e

matched with that o &u cha%e o de ' /he e a te the mate ial i% &hy%ically i"%&ected' "ce the i"%&ectio"

i% o e the"$ the mate ial i% %e"d to the i%%ue %to e' /he" the docume"t i% o wa ded o a aili"g the

CENIA/' C26*! i% a" e+ci%e duty that i% &ayable o" mate ial &u cha%ed' /he e a e two !i"d% o

mate ial%: & oductio" e"gi"ee i"g' *" ca%e o & oductio" good% 100O o CENIA/ i% e u"dable i" the

cu e"t yea but i" ca%e o e"gi"ee i"g good% 50O i% e u"dable i" %ame yea a"d 50O i" "e+t yea '

*odging insurance claim : *" ca%e mate ial ecei ed i% damaged o i" %ho t o what wa% o de ed' *" that

ca%e lodgi"g o i"%u a"ce claim i% do"e' *" ca%e %ame i% mo e tha"


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R "3R!I2G 35C32SIG2 2!

I2 R CI "! S!3R

IS *! RI*L"1YSIC*L

30M

U2L3*DI2G 35 *! RI*L *!

L3C*!I32

6ES N

D3CU 2!S*R I23RD RM

"URC1*S 53R2 C SS*RY *C!I32

6ES

N

L3DGI2G I2SUR*2C

CL*I"R "*RR C I"!

I2S" C!I32

*! RI*L 53R4*RD !3 ISSU

55


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BILL *!C1I2G

*" B*4/ total %y%tem i% wo !i"g u"de R" in 3R*CL which ha% b ought t a"%&a e"cy i" the %y%tem'

*" the %y%tem code% ha e bee" allotted to e e y item li!e i" e"to y$ %u&&lie % etc called the codi'ied items '

*" ca%e o i" e"to y the e a e two !i"d% o %toc!%$ o"e i% elated to & oce%% item (3" ) a"d othe the

e"gi"ee i"g item% ( R3) ' A" actual co%t & oce%% o e aluati"g i" e"to ie% i% ca ied out i" the %ectio" a%

the ua"tity o the %toc! alo"g with it% alue i% eco ded' /he i" e"to ie% a e alued o" ba%i% o onthl%

eighted a$erage method ' *" thi% %ectio" o the i"a"ce de&a tme"t the ecei&t o the mate ial ecei ed i%

duly chec!ed with that o &u cha%e o de $ the & ice% a e duly chec!ed' /he e a e ce tai" item% that a e

direct de%ita%les i'e' they do" t u"de go the & oce%% o %to e%$ they a e di ectly cha ged to accou"t% a"d a e

%e"t to the co"%umi"g de&a tme"t'

In$entor% module

Calculatio" o clo%i"g bala"ce o i" e"to y:

&e"i"g bala"ce o *" e"to y Q

N


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CHA /E< 2

+.- R 6I 4 35 LI! R*!UR

*rAu !e


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it will become mea"i"gle%% i" e y %ho t o de '

( ) Inade uate 4or


59/85

(@) 2o Re'orded "ro&itabilit%

o %ta tu&%$ the mo%t im&o ta"t thi"g you ca" do om a i"a"ci"g &oi"t o iew i% get & o itable a% a%t a%

&o%%ible' Mo%t le"de % mu%t %ee at lea%t o"e yea o & o itable i"a"cial %tateme"t% be o e they will

co"%ide le"di"g u"d% ba%ed o" the %t e"gth o the bu%i"e%%' Be o e %ho t te m & o itability i%

demo"%t ated$ bu%i"e%% i"a"ci"g i% ba%ed & ima y o" &e %o"al c edit a"d "et wo th' o e+i%ti"g

bu%i"e%%e%$ hi%to ical e%ult% "eed to %how & o itability to ac ui e additio"al ca&ital' /he mea%u eme"t o

thi% ability to e&ay i% ba%ed o" the "et i"come eco ded o the bu%i"e%% by a thi d &a ty acc edited

accou"ta"t'*" ma"y ca%e%$ bu%i"e%%e% wo ! with thei accou"ta"t% to educe bu%i"e%% ta+ a% much a% &o%%ible but al

de%t oy o e%t ict thei ability to bo ow i" the & oce%% whe" the bu%i"e%% "et i"come i% i"%u icie"t to

%e ice a"y additio"al debt'

(F) 2o 5inan'ing Strateg%

A & o&e i"a"ci"g %t ategy c eate% 1) the i"a"ci"g e ui ed to %u&&o t the & e%e"t a"d utu e ca%h low%

o the bu%i"e%%$ 2) the debt e&ayme"t %chedule that the ca%h low ca" %e ice$ a"d 7) the co"ti"ge"cy

u"di"g "ece%%a y to add e%% u"&la""ed o u"i ue bu%i"e%% "eed%'

Becau%e i"a"ci"g i% la gely a" u"&la""ed a"d a te the act e e"t' *t %eem% o"ce e e ythi"g el%e i%

igu ed out$ the" a bu%i"e%% will t y to locate i"a"ci"g' /he e a e ma"y ea%o"% o thi% i"cludi"g:

e"t e& e"eu % a e mo e ma !eti"g o ie"ted$ &eo&le belie e i"a"ci"g i% ea%y to %ecu e whe" they "eed it$

the %ho t te m im&act o &utti"g o i"a"cial i%%ue% a e "ot a% immediate a% othe thi"g%$ a"d %o o"'


60/85

1arris (+ /) om the &e %&ecti e o the chie i"a"cial o ice $ the co"ce&t o wo !i"g ca&ital

ma"ageme"t i% elati ely %t aight o wa d: to e"%u e that the o ga"i.atio" i% able to u"d the di e e"ce

betwee" %ho t te m a%%et% a"d %ho t te m liabilitie%' *" & actice$ though$ wo !i"g ca&ital ma"ageme"t ha%

become the Achille%, heel o %co e% o i"a"ce o ga"i.atio"%$ with ma"y C % %t uggli"g to ide"ti y co e

wo !i"g ca&ital d i e % a"d the a&& o& iate le el o wo !i"g ca&ital'

A% a e%ult$ com&a"ie% ca" be limited i" thei ability to weathe u" o e%ee" o ad e %e e e"t% a"d e"%u e

that ca%h i% eadily a ailable whe e it i% "eeded$ ega dle%% o the ci cum%ta"ce%' By u"de %ta"di"g the ole

a"d d i e % o wo !i"g ca&ital ma"ageme"t a"d ta!i"g %te&% to each the ight le el% o wo !i"g ca&ital$

com&a"ie% ca" mi"imi.e i%!$ e ecti ely & e&a e o u"ce tai"ty a"d im& o e o e all &e o ma"ce'

/heo y %' actice

o mo%t C %$ the g eate%t challe"ge with e%&ect to wo !i"g ca&ital ma"ageme"t i% the "eed to

u"de %ta"d a"d i" lue"ce acto % that a e out o thei di ect co"t ol$ i" o de to obtai" a com&lete &ictu e o

the com&a"y,% "eed%'

a%nard . Ra&use (-??@) A gue% that attem&t% to im& o e wo !i"g ca&ital by delayi"g &ayme"t to

c edito % i% cou"te & oducti e to i"di idual% a"d to the eco"omy a% a whole' He claim% that alte i"g

debto a"d c edito le el% o i"di idual tie % withi" a alue %y%tem will a ely & oduce a"y "et be"e it'

o&o%e% that %toc! eductio" ge"e ate% %y%tem wide i"a"cial im& o eme"t% a"d othe im&o ta"t be"e it%'

ge% tho%e o ga"i.atio"% %ee!i"g co"ce"t ated wo !i"g ca&ital eductio" %t ategie% to ocu% o" %toc!

ma"ageme"t %t ategie% ba%ed o" lea" %u&&ly chai"# tech"i ue%'

.0. 0ola% (-??F) w ite% the a ticle which a"aly%e% the & o%# a"d co"%# o di e e"t %t ategie% to be

ado&ted to ma"age a"d a oid wo !i"g ca&ital c i%i% %ituatio"% i" a"y o ga"i.atio"' /he wo !i"g ca&ital

&o%itio" de&e"d% o" ma"y o ga"i.atio"al &a amete % which a e i"te elated a"d i"te de&e"de"t$ a"d al%oa y o e time' *" %uch a %ituatio"$ the u%e o a %y%tem dy"amic% a&& oach ha% bee" ad ocated to e lect

the ele a"t dy"amic cau%e a"d e ect elatio"%hi&% o the de elo&me"t o a&& o& iate lo"g te m a"d

%ho t te m %t ategie%'

90


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91


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Chapter

2eeds and 3b#e'ti$es

.- 2eed o& the stud%

@CM i% co"ce "ed with ma!i"g %u e that we ha e e+actly the ight amou"t o mone% and lines o&

'redit a$ailable to the business at all time%' Ca%h i% the li e blood o a"y bu%i"e%%$ "o matte how

big o %mall' * a bu%i"e%% ha% "o ca%h a"d "o way o getti"g a"y ca%h$ it will ha e to clo%e dow"'

ollowi"g o" thu% we ca" %ee that i a bu%i"e%% ha% "o idea o it% li uidity a"d wo !i"g ca&ital

&o%itio"$ it could be i" %e iou% t ouble'

Ca%h i% the li eli"e o a com&a"y' * thi% li eli"e dete io ate%$ %o it will a ect the com&a"y,% ability

to &und operations, rein$est and meet 'apital re uirements and pa%ments ' "de %ta"di"g acom&a"y,%'ash &lo health i% e%%e"tial to ma!i"g i" e%tme"t deci%io"%' A good way to -udge a

com&a"y,% ca%h low & o%&ect% i% to loo! at it% wo !i"g ca&ital ma"ageme"t (@CM)'

.+ 3BJ C!I6 S

1' /o e%timate the wo !i"g ca&ital e ui eme"t%'

2' /o a"aly.e the li uidity &o%itio" o the o ga"i.atio"'

7' /o e+ami"e & o itability &o%itio" o the ma"ageme"t'

;' /o a"aly.e a"d co"t ol wo !i"g ca&ital

92


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Chapter E

R S *RC1 !13D3L3GY

E.- R S *RC1 D SIG2

/he e%ea ch de%ig" i% a &atte " o a" outli"e o a e%ea ch & o-ect % wo !i"g$ it i% a %tateme"t o o"ly the

e%%e"tial eleme"t% %tudy$ tho%e that & o ide the ba%ic guideli"e% o the detail% o the & o-ect' u the a

e%ea ch de%ig" i% a" a a"geme"t o co"ditio"% o collectio" a"d a"aly%i% o data i" a ma""e that aim% to

combi"e ele a"ce to the e%ea ch &u &o%e with eco"omy i" & ocedu e' *t co"%titute% the blue& i"t o

collectio"$ mea%u eme"t a"d a"aly%i% o data'


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*" B*4/ the e i% a %y%tem o IS whe e i" e e y mo"th e&o t%(B3S$ o it 4o%% A3C) a e

& e&a ed a"d a"aly.ed a&a t om the A""ual


65/85

Chap !" #

#.1 ASSUMPTIONS OF THE PRO$ECT

Ce tai" a%%um&tio"% which ha e bee" ta!e" a e de%c ibed a% u"de ' /he%e a%%um&tio"% ha e bee" made toe"%u e that a" o&timum le el o wo !i"g ca&ital i% mai"tai"ed at all time%'

o u"i"te u&ted & oductio"$ it i% a%%umed that plant is in a running condition th oughout the

yea '

u"d% a e a%%umed to be the mo%t im&o ta"t a%&ect without which "o bu%i"e%% ca" %u i e' He"ce

the e i% a proper a+aila%ilit, o' 'unds i" o de to meet the u""i"g "eed% o the bu%i"e%% li!ema!i"g ad a"ce &ayme"t% to %u&&lie % o meeti"g the budgeted "eed o aw mate ial'

@o !i"g ca&ital ul ill% the day today "eed% o the bu%i"e%% %o it i% e y much "ece%%a y that the

ra$ material is ade uatel, a+aila%le to ca y o" the u"i"te u&ted & oductio"'

*t ha% bee" a%%umed that the pa,ments are readil, made to t e suppliers on due dates a"d a% %uch

they a e "ot delayed'

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Chap !" %

@.- LI I!*!I32 35 !1 S!UDY

!he ma#or limitations o& m% stud% are as under7

-. LI I! D !I 7 Although the %ta o BA44A< < *"du%t ie% 4td wa% e y e icie"t a"d

highly coo&e ati e a"d they de oted e"ough o thei aluable time o u% but becau%e o time

co"%t ai"t we we e "ot able to de ote a% much time with thei em&loyee%'

+. S CR CY7 Some o the i" o matio" wa% !e&t co" ide"tial a"d wa% "ot di%clo%ed to a"y &e %o"

who%oe e '

. L*C0 35 C3 "*R*!I6 D*!*7 ue to "o" a ailability o data o othe &a&e u"it% o

Balla &u *"du%t ie% we we e "ot able to com&a e the data o o"e u"it with a"othe '

*" %&ite o the%e di icultie% we %till &ut ou be%t e o t% i" t y to do the ull -u%tice to the

%ub-ect matte a"d i" com&letio" o the e&o t'

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C1*"! R F

.1 ANALYSIS & INTERPRETATION

SCHEDULE OF CHANGE IN 'ORKING CAPITAL

Ta()! N*.1

Pa" +, )a" 0-$ !-2003 0-$ !-200#Cha 4! +5*"6+ 4 ,ap+ a)

I ,"!a !/D!,"!a !CURRENT ASSETS 1.Inventories


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Ba"! Boo! 3 191870540 -Sec e&o%it% 7771805 206394756 198622951Ad a"ce


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Pa" +, )a" 0-$ !-200# 0-$ !-200% Cha 4! + 5*"6+ 4 ,ap+ a) I ,"!a !/D!,"!a !CURRENT ASSETS 1.Inventories


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CURR 2! *SS !S7

c o e%' Secu itie% wo th 2'20 c o e% we e acce&ted du i"g the &e iod'

Ad a"ce% om cu%tome % i"c ea%ed by 51 la!h% ' e all Current liabilities in'reased b% almost H

'rores '

*t ca" be ob%e ed that the i"c ea%e i" the cu e"t a%%et% i% almo%t double the i"c ea%e i" the cu e"t

liabilitie%$ which %how% that the u"it ha% a &o%iti e wo !i"g ca&ital which i% able to co"%titute a ma gi" o

bu e o matu i"g obligatio"% withi" the o di"a y o&e ati"g cycle o the u"it'

SCHEDULE OF CHANGE IN 'ORKING CAPITAL

?0


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Ta()! N*.

Pa" +, )a" 0-$ !-200% 0-$ !-200 Cha 4! + 5*"6+ 4 ,ap+ a) I ,"!a !/D!,"!a !

CURR 2! *SS !S -.In$entories


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C#AN$E IN % R'IN$CA(ITA" -18312%#0 -1 2 2733 11 # #%

?2


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I2! R"R !*!I32 (+ @ F)

CURR 2! *SS !S7


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Ratio *nal%sis

-. CURR 2! R*!I3

*t i% the mo%t commo" a"d &o&ula mea%u e o %tudyi"g the li uidity o a i m' *t i% calculated a%

ollow%:

O Current *ssets K Current Liabilities

/he total cu e"t a%%et% i"clude tho%e a%%et% which a e i" o m o ca%h$ "ea ca%h o co" e tible i"to ca%h

withi" a &e iod o o"e yea ' /he te m cu e"t a%%et% al%o i"clude & e&aid e+&e"%e% a"d %ho t te m

i" e%tme"t%$ i a"y'

/he total cu e"t liabilitie% i"clude all ty&e% o liabilitie% which will matu e o &ayme"t with i" a &e iod

o o"e yea li!e$ ba"! o e d a t$ bill% &ayable$ t ade c edito %$ out%ta"di"g e+&e"%e%$ etc'

@hile calculati"g cu e"t a%%et% we ha e ta!e" i" e"to y$ %u"d y debto %$ ca%h ba"! bala"ce a"d loa"%

a"d ad a"ce% a"d o calculati"g cu e"t liabilitie% we ha e ta!e" c edito %$ & o i%io"% etc o yea 200;$

2005 a"d 2009'

Current

liabilities

+ E + / + @ Current

*ssets

+ E + / + @

Current

liabilities

F +? @FE F /FFEE H-E E/ ? *" e"to ie% 2;>272511 2??50?99> 750>770;?

Su"d y

ebto %

1995;?1=1 1>95721;7 251?7;;9=

Ca%h

ba"!

11?9?2= 1;;=50= 10?0175

4oa"

ad a"ce%

52>92?=0 92;9>950 7970;=9?

!otal F +? @FE F /FFEE H-E E/ ? !otal E@??-?+ / F?/F?F @E E+/-F

?;


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Cal'ulation o& Current Ratio

+ E

Current Ratio OCurrent *ssetsKCurrent Liabilities O E@??-?+ KF +? @FE

O .@F

+ /

Current Ratio OCurrent *ssetsKCurrent Liabilities

O / F?/F?F KF /FFEE

O .F @

+ @


O @E E+/-FKH-E E/ ?

O .FH@

+ F


O@E/H+H /?KH-H@ -

O .FHH

?5


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Interpretation7 !he 'urrent ratios has been in'reased &rom %ear + E to %ear + F.Ideal ratio is

+7-.But as the liabilities are more than 'urrent assets the 'ompan%=s ideal ratio has not rea'hed till

+7- but in'rease in 'urrent ratio is de'rease in 'urrent liabilities.

Cal'ulation o& ui'< Ratio4hile 'al'ulating ui'< ratio e need to 'al'ulate li uid assets hi'h in'ludes7

Li uid assetsOCurrent *ssets sto'< prepaid e penses

+ E

ui'< Ratio OLi uid *ssetsKCurrent Liabilities

O -FEF -?HFKF +? @FE O .+/

+ /


T +- E+F @KF +? @FE O .+?

?9


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+ @


O +/?@ /? EKH-E E/ ? O . -

+ F


O + ?-?@+--KH-H@ - O .+?

Interpretation7 !he ui'< ratios has been in'reased &rom %ear + E to %ear + F.Ideal ratio is

+7-.But as the liabilities are more than 'urrent assets the 'ompan%=s ideal ratio has not rea'hed till

+7- but in'rease in 'urrent ratio is de'rease in 'urrent liabilities.

??


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Cal'ulation o& *bsolute Li uid Ratio4hile 'al'ulating absolute li uid ratio e need to 'al'ulate7

*bsolute Li uid *ssetsOCash ban< balan'eKCurrent liabilities

+ E

*bsolute li uid ratio OCash ban< balan'eK'urrent liabilities

O --F@F+HKF +? @FE O . -@H

+ /*bsolute li uid Ratio OCash ban< balan'eKCurrent Liabilities

T -EEH/ HKF +? @FE O . -?H

+ @

*bsolute li uid Ratio OCash ban< balan'eKCurrent Liabilities

O - F - /KH-E E/ ? O . - -

+ F*bsolute li uid Ratio OCash ban< balan'eKCurrent Liabilities

O -EEFHH++KH-H@ -

O . -F@

?=


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Cal'ulation o& Debtors !urno$er Ratio

4hile 'al'ulating Debtors !urno$er Ratio e need to 'al'ulate7

Sales and *$erage debtor

*$erage DebtorO3pening N Closing debtorsK+

+ E

D!R OSalesK*$erage debtors

O , @-,H+-,H? K -F-E + +H./

O-F.H@

+ /


O H@,E ,-@/ K -H-/ ?@@+ O-H.@/

+ @


O ,FE?,?+H, ? K ++E- /./ [email protected]

?>


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+ F

D!ROSalesK*$erage debtors

O ,?+-, F,?@ K+ +EFHFE+

[email protected]

Debt 'olle'tion period

Debt 'olle'tion period is 'al'ulated on the basis o& debtor=s turno$er ratio

+ E

Debt 'olle'tion periodO @/ da%sKD!R O @/K-F.H@ O+ .E

+ /

Debt 'olle'tion periodO @/ da%sKD!R O @/K-H.@/

O-?./F

+ @

Debt 'olle'tion periodO @/ da%sKD!R O @/[email protected] O+-.H+

=0


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+ F

Debt 'olle'tion periodO @/ da%sKD!R

O @/[email protected] O+-.@E

4or


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4or


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C1*"! R H

R C3 2D*!I32S

/he ollowi"g ecomme"datio"% we e gi e" by me o" the ba%i% o the & e%e"tatio": *" e%tme"t i" i" hou%e < team o :

im& o i"g uality e"%u i"g co"%i%te"cy

/ y to achie e co"%i%te"tly high ca&ital utili.atio" o o e 100O mai"tai" a eco d o .e o%toc!

E"e gy co"%e ati%m 8 "it %hould become %el %u icie"t i" &owe ge"e atio" the %u &lu% &owe (i a"y) may be e+&o ted to ea " additio"al e e"ue%

C32CLUSI32

C1*2G S I2 43R0I2G C*"I!*L DURI2G !1 !R*C0 35 E Y *RS7

@hile a"aly.i"g the di e e"t eleme"t% o wo !i"g ca&ital$ it i% e ealed that com&a"y ha% ta!e" a "umbe

o %te&% to i"c ea%e otatio" o it% wo !i"g ca&ital'

Com&a"y ha% a better In$entor% odule a"d the e i% a chec! o" *" e"to y by &e &etual chec!i"g a"d

timely e&o ti"g' /he total %y%tem i% wo !i"g u"de R" in ora'le which has brought transparen'% i"

the %y%tem' Not o"ly it li uidated it% %toc! but had a & o&e chec! o e debto % o" the accou"t o a%t

eco e y a"d & o&e ollow u&' Simila ly the e wa% a" im& o eme"t i" loa"% a"d ad a"ce%$ & e&ayme"t%

to the %u&&lie % by the way o bette ba gai" due to %ou"d i"a"cial &o%itio"' B*4/ ha% a" ad a"tage o

bette ba gai" with the %u&&lie % !ee&i"g the liabilitie% u"de co"t ol' *t i% &ayi"g o the %u&&lie

&ayme"t% mo e o le%% o" due date%' /hi% i"c ea%ed com&a"y % ma !et alue a"d co" ide"ce o the

%u&&lie which ultimately i" lue"ced the wo !i"g ca&ital' e all it ca" be ob%e ed that the com&a"y ha%

bette ma"ageme"t o" it% wo !i"g ca&ital'

=7


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CHA /E< >

?.- BIBLI3GR*"1Y

www'bilt'com htt&:33i%ei"dia'com

www'i"diai" oli"e'com

www'"%ei"dia'com

Boo!%:

i"ci&le% o Co &o ate i"a"ce

(B ealey Mye %)

u"dame"tal% o i"a"cial Ma"ageme"t

(Ia" Ho "e$ @achowic. G )

i"a"cial Ma"ageme"t

(*M a"dey)

=;
http://www.bilt.com/http://www.indiainfoline.com/http://www.bilt.com/http://www.indiainfoline.com/


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