A STUDY ONWORKING CAPITAL MANAGEMENT

With reference to

(SUJALA PIPES PRIVATE LIMITED)Nandyal,Kurnool District

A Project report submitted to Andhra University, Visakhapatnam in Partial

fulfillment for the award of the degree ofMASTER OF BUSINESS ADMINISTRATION

Submitted by

Shaik.GouseAhamedRegd No: 2085454040 Under the guidance of

Mr.P.V.PRASAD M.B.A.HOD - BBMAsst.Professor.

AQJ CENTRE FOR P.G. STUDIESDEPARTMENT OF MANAGEMENT STUDIES

(Affiliated to Andhra University)VISAKHAPATNAM- 531 173

(2008-2010)

INTRODUCTION

Working capital refers to a firm’s investment in short-term assets, viz., cash, short-term securities, debtors, etc., It can also be regarded as that portion of the firm’s total capital which is employed in short-term operations. It refers to all aspects of current assets and current liabilities. In simple terms, working capital is the investment needed or day-to-day operations.

Change in its value or without affecting the operations of any firm. Current liabilities are those liabilities, which are intended to be paid within a year out of the current assets or the firm’s earnings.

OBJECTIVES OF THE STUDYTo evaluate the financial performance of the company by

using Working capital.

To analyze the working capital performance of the company for the last five years that is 2004-2008.

To find out net working capital every current year.

To find out funds from operation was previous year.

METHODOLOGY

Primary Data :

The data was collected from the officials of the organization. Secondary Data :

Study was based on the secondary data, which are collected from the books, records, journals and profiles of the organization.

LIMITATIONS OF STUDY

1.The information used is primary from historical annual reports like profit and loss account, Balance sheet.

2.Since financial matters are sensitive in nature the same could be acquired easily.

INDUSTRY PROFILE

Plastic have become synonymous with modern living.  It is undoubtedly a product which Penetrated extensively into the common man’s life.  No wonder the industry has achieved in terms of supply of raw material expansion and diversification of processing capacities and manufacturing of processing machinery and equipment.

  The Government of India recognizing the

importance of plastics in agriculture appointed on march 7th, 1981 a National Committee on the use of plastics in Agriculture under the chairmanship of Dr. G.V.K Rao. 

COMPANY PROFILENandi has it's origins in the year 1979 when Mr S.P.Y Reddy,  a technocrat left his job at Bhaba Atomic Research Centre, Mumbai to start a plastic containers unit in Nandyal. The company has grown at a fast pace and Mr Reddy who sensed an opportunity in making pipes for irrigation started manufacture of PVC pipes in year 1984 and has fast become leading manufacturer in Andhra Pradesh and later in India. With annual consumption of 50,000 tones of resin, Nandi group is one of the biggest plastic processors in Asia. The group has either setup or acquired plants in different geographical locations of south India to improve operational efficiency and to enhance customer satisfaction.  Nandi group sells PVC pipes under 4 brands of which Nandi brand is the most prominent.

FINDINGS

Maintenance of cash and bank balance is concerned it is too low in relation networking capital.

Sundry Creditors have been increased considerably during the period of study expect in 2004-05. The payment period is decreased from 60days in 2004-05 to 49 days in 2005-06 and even just 6 days in 2006-07 and 48 days in 2007-08.

There is increase in networking capital from 2004-05 to 2007-08.

Comparing the cost of sales between 2004-05 and 2007-08, it is also increased.

SUGGESTIONSCash management is not satisfactory hence it required special attention by preparing cash budget for sufficient balance of cash, otherwise it because tuff task to meet day to day cash requirements.

The increase is attributed because of overall increases in purchases of raw materials, labour cost and other manufacturing and administration costs, It is most need of the company to control these costs at various levels.

The overall management of working capital is not good hence is suggested to take special care in management of debtors, inventor cash and Bank balance.

THANK YOU