Hypotheses

A Project Study on Working Capital Management of KAMCO Ltd.
INTRODUCTION
Financial management refers to that part of the management activity which is concerned with the planning and controlling of firms financial resources .It deals with finding out various sources for raising funds for the firm .The sources must be suitable and economical for the needs of the business the most appropriate use of such funds also forms a part of financial management. Working capital management is concerned with the management of current asset .It is an integral part of financial management as short term survival is a prerequisite for long term success .One aspect of working capital management is the tradeoff between profitability and risk .If the firm doesnt have adequate working capital ,that is, it doesnt invest sufficient funds in current assets ; it may become illiquid and consequently may not have the ability to meet its current obligation .If the current assets are too large ,profitability is adversely affected . The key strategies and considerations in ensuring a tradeoff between profitability and liquidity is one major dimension of working capital management. The goal of working capital management is to manage the firm`s current assets and liabilities in such a way that a satisfactory level of working capital is maintained. Working capital, in general refers to the excess of current assets over current liabilities. Management of working therefore, is concerned with the problems that arise in attempting to manage the current assets, current liabilities and the inter-relationship that exist between them.
Nirmala College of Information Technology, Chalakudy
OBJECTIVES OF THE STUDY
The main objective of the study is to evaluate the overall analysis of working capital of KAMCO Ltd. Other specific objectives are
1. To analyze the working capital management of KAMCO 2. To ascertain the growth of KAMCO Ltd in respect of profit 3. To ascertain the liquidity of KAMCO Ltd 4. To ascertain the efficiency of the firm 5. To understand general performance of the KAMCO Ltd 6. To get acquainted with the practical side of business
NATURE OF THE PROBLEM
The problem for which this study has been undertaken is to analysis the financial statement and to find out the components of working capital.The problem of working capital management involves the problem of decision making regarding investment in various current assets with an objective of maintaining the liquidity of funds of the firm to meets its obligation promptly and efficiently. The study is done to have a general view of the financial management of the company .Major areas covered in the scope of the study is financing of the company ,capital employed and profitability.
HYPOTHESIS
Hypothesis means a mere assumption or some supposition to be proved or disproved. But for a researcher hypothesis is a formal question that he intends to resolve .Thus a hypothesis, may be defined as a proposition or a set of preposition set forth as an explanation for the occurrence of some specified group of phenomena either asserted merely as a provisional conjecture to guide some investigation or as highly probable in the light of established facts. A research hypothesis is a predictive statement, capable of being tested by scientific methods that relates an independent variable to some dependent variable. Characteristics of hypothesis y y y y Hypothesis should be clear and precise. Hypothesis should be capable of being tested. Hypothesis should be in limited in scope and must be specific. Hypothesis should be stated as far as possible in most simple terms so that the same is easily understandable by all concerned. y y Hypothesis should be amenable to testing with a reasonable time. Hypothesis must explain the facts that gave rise to the need for explanation.
Basic concepts concerning testing of hypothesis There are two types of hypothesis, 1. Null hypothesis: If we are to compare method A with method B about its superiority and if we proceed on the assumption that both methods are equally good then this assumption is termed as the null hypothesis. A Null hypothesis is generally symbolized as H0. 2. Alternative Hypothesis: As against this we may think that the method A is superior or the method B is inferior we are then stating what is termed as alternative hypothesis. Alternative hypothesis as H1. Ho is the non effective working capital H1 is the effective working capital
INTRODUCTION TO THE INDUSTRY

Agriculture is a very important sector of the Indian companies .It contributes sizably to the domestic product as also to exports .More than two-third of the workforce work in agriculture and large may depend upon it, being engaged in agricultural products, agro based industries etc.
HISTORY TO THE INDUSTRY

India being an agricultural based economy provides livelihood to more than 75% of the population .Major portion of our income that is., about 70% is earned from agricultural activities .In spite of the very dominant place of agriculture, it is a depressed industry because of low productivity ,in agriculture ,small size of farms ,finance and defective equipments .Once government believed that only large land holdings were the most efficient and they could use the latest techniques in cultivation .how ever in recent years the emphasis has been shifted from large land holdings to small land holdings. After achieving her independence in 1947,India found herself to be badly lacking the means to meet the food demands for her vast population .The existing agricultural scenario presented a dismal picture traditional farming methods ,low yielding seeds and primitive implements wholly unsuited to large scale cultivation .The only solution lay in mechanized farming which could turn around the virtual fortune of India .In order to achieve this objective, indigenous agromachinery units were to be set up, without resorting to imports which undoubtedly passed a heavy burden on the nations need. Agricultural is way of life ,tradition that for centuries has shaped the thought ,the outlook, the culture and economic life of the people of India, agriculture is considered to be the major activity of most of the people .Mover over 200million farmers and farm workers have been the backbone of Indians agriculture .In the beginning, then farmers adopted ancient method. The entire process that is from the sowing the seed till harvesting were all done by the farmers itself .It was a really time consuming one, which required a lot labor work. The cost of production was very high and the benefits are not promising
PRESENT STATUS OF THE INDUSTRY

In the view of the spectacular success in the production and productivity achieved in developed countries through mechanization of agriculture, it was being agreed that India also should fall in line with these countries. Though India was backward in the use of machines for agricultural operations, yet in the past few years there has been an increase in the use of modern implements. The phase of mechanizations of farming in the country was slow during 1950s.There after, particularly since the middle of 1960s with the coming of the new agricultural technology ,this has increased .An associated effect of the new technology is the change in the agricultural practices .The preparation of land the sowing of seeds the watering of land ,the control of seeds ,the use of pesticides ,the quick harvesting of crops etc,are now done more scientifically than ever before
FUTURE SCOPE OF THE INDUSTRY

Agro-industry is looking proudly ahead into a more promising future .Future will also see diversification products in the farm mechanization field contributing significantly to the realization of the Indian dream of self sufficiency in food production and rededicating itself to the cause of self relevance and social responsiveness in the service of people without respite.
PROFILE OF THE ORGANISATION

The Kerala Agro Machinery Corporation Ltd. Popularly known as KAMCO was established in the year 1973 as a subsidiary of Kerala agro industries corporation Ltd .[KAIC]and subsequently became a fully owned Govt.of Kerala undertaking at Athani, 25km north of koachi .It all began in 1958, when Dr.Rajendra Prasad, the president of India was presented with a Kubota power tiller by the Japanese [M/S.Kubota Ltd. Japan,the worlds leading manufacturer of power tiller and other agriculture machinery]. The kerala agro industries corporation Ltd.[KAIC Ltd.]Trivandrum,[Govt. of kerala company]promoted the establishment of KAMCO .The KAIC Ltd. Entered in to a technical collaboration agreement with M/S Kubota Ltd.Japan in February1972.On 15.11.1972 the kerala industrial and technical consultancy organization Ltd.[KITCO]were entrusted with the worth of Rs.2cores as asubsidiary of M/S. KAIC Ltd. Which held the entire paid up capital shares in KAMCO .Even though the company was formed as a subsidiary of KAIC Ltd. Subsiquently the company become a fully owned Govt. company by transferringthe sheres held by KAIC Ltd. KAMCO hascompleted its 37 years and is running on profit for the last 26 years continuously inceasing its production ,turnover and profit year after year .
HISTORY OF THE ORGANISATION

Kerala agro machinery corporation Ltd was established in april 1973 as a subsidiary of the Kerala Agro Industries Corporation Ltd.specifically for the manufacture of KUBOTA power tiller in collaboration with M/S Kubota Ltd, Japan under industrial license already granded by the Govt. the company has its registered office at Athani in Ernakulam Dist. And the first manufacturing unit was also established there.Initially,the components were being imported from Japan in CKD condition,which were assembled and tested in the factory at Athani.The Company started indigenizing the components in a phased manner and the process of indigenization was completed by the year 1986.By this time,KAMCO became an independent Organization and the collaboration agreement with M/S Kubota also ceased to exist since full indigenization had been attained and the product coming out was fully Indian in all respects.The product was also renamed as KAMCO Power Tiller.At Athani, in addition to the Assembly shop, the Company also has got machine shop where most functionally critical components of the power tiller are being processed.Rest of the items is bought out from Small and Medium scale industries located mainly in South India. In 1992,KAMCO took over a sick unit of state SIDCO in Kalamassery major industrial estate and converted the same to a power tiller engine assembly plant.The unit was taken over along with employees of SIDCO and now the Company produces Engines needed for Power tiller.The approximate investment in this unit is Rs1.2 Crores. The company had procured 11acres of land in the industrial development area at Kanjicode ,Plakked and as per the approval of project report by the Govt. KAMCOs third unit was established there during the period 1994-95at a cost of Rs.4.3 crores .This third unit went in to production in March 1995where power tillers are being produced Kalamassery unit is supplying engines needed for the power tiller assembled at Palakkad unit. By 1991thecompany had taken up development of a small harvesting machine which was completed by 1996 after trial runs .The product was named KAMCO power reaper and initially regular production commenced in Klamassery unit As the facilities available there had been
A Project Study on Working Capital Management of KAMCO Ltd. merger ,company established its forth unit at Mala in Thrissur Dist. In the year 2000at a cost of Rs.4.28crores and shifted the production of power reaper from Kalamassery to Mala .Production of power reaper is now regularly going on in this unit .All the investment had been met from companys own resours. The company has established a dealership arrangement throughout the country consisting of more than 40 dealers in the Govt. and Pvt. Sector .Tiller is being sold
inKerala,Thamilnadu,Orrisa,WestBangal,Maharashtra,Bihar,Meghalaya,Tripura,
Manipur
,Gujarat ,Karnataka ,Andhrapradesh ,and Pondicherry. In all the places except West Bengal the product commends 45 to 50%of the market share whereas in West Bengal the product commends about 85% .Company has procured 9647power tillers during 208-09from all units together which are sold in the above states .Company is also taking efforts to make its presents felt in other states also. Power reaper is now being sold in kerala ,Thamilnadu Andhrapradesh and Orissa and to some in Maharashtra also .In Andhrapradesh and Orrisa the product is very popular .During the year 2008-09 company produced1293 reapers and sold the entire quantity through the dealers . Kerala Govt.have invested Rs.161.46 lakhs by way of share capital in the company [161460 shares @Rs100 each ]the company is running on profit since 1984-85and regularly paying dividend to Govt.Divident at 30%is being sold paid to Govt.from the year 2001-02 onwords . Sales turn over for the year 2008-09has crossed 120crores of Rupees Reserves and surplus of the company as on 31.03.2009 is Rs 8112.94 lakhs .from internally generated funds company invested in shares worth Rs 150 lakhs in Kerala feeds Ltd and Rs 50lakhs in cochin international airport. Power tiller now equipped to confirm to CMVR norms of central Govt power tiller manufactured by the company is also covered under ISO certification from 1998 onwords.
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PRESENT STATUS OF THE ORGANISATION

KAMCO is one of the professionally managed companies owned by state Govt.Present status of KAMCO is synonymous with service to the small and marginal farmers of the country .KAMCO through their precision and quality is revolutionzing the small and marginal holdings throughout the country .Today kamcos products are widely used and demanded all over India ,enjoying over 50%market share at national level .The company with its four plants at Athani ,Kalamassery ,Kanjicode ,and Mala unit is confidently meeting the demand for KAMCO products in India and abroad .The main markets for the products are at West Bangal ,Assam ,Tamil Nadu
,Thripura,kerala ,Megalaya ,Bihar ,Gujarat ,and Manipur presently KAMCO have 45 dealers all over India .
Organisation structure of KAMCO

KAMCO is governed by the board of directors. Board includes Chairman ,Managing Director and other Directors .The Govt. of kerala nominates the Chairman of the board .The chief executive officer of the company is the Managing director who shall exercise powers ,subject to the overall control and supervision of the board.The Managing Diector is the top most official and the Govt gives deligation of authority to the Managing Director .He may be entrusted and delegated from time to time by the board . The Managing Director is the operational head of the company supported by General manager and Deputy general managers for different sections .Manegers and Deputy managers will assist the General Managers and Deputy General Managers . Board of Directors 1. V.Chamunni 2. S.M.Reghunathan 3. C.P.Murali 4. M.Aboobakar 5. K.Ramdas 6. Edakulam Hameed 7. Sulaiman Khalid Director &Chairman Managing Director Director Director Director Director Director
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A Project Study on Working Capital Management of KAMCO Ltd. 8. K.K.Gangadharan 9. M.Albertian Director (Director of Agricultural Dpt. Of Kerala) Director (Deputy Secretary, Agriculture, Govt. of Kerala)
Departments of KAMCO
KAMCO- The Govt. company works with the help and support from the different department .All departments work uniquely for the attainment of the organizational goal .The performance of different departments was amazing for the past several years ,which are the reason why the companys profit volume is increasing at a higher rate The head of each department is Deputy General Manager [DGM] assisted by managers and DY.managers add ASST. managers at different levels .Department heads are directly liable to report to Manageing Director . KAMCO haue totally 8 departments .They are as follows 1. Production Department 2. Marketing Department 3. Human Resource Department 4. Finance Department 5. Purchase &Stores Department 6. Quality Assurance Department 7. System Department 8. Engineering and Research &Development Department Product Profile All the products of KAMCO have high demand in Indian market. KAMCOS products include:1. KAMCO Power Tiller Model KMB 200 2. KAMCO Diesel Engine 3. KAMCO Power reaper Model KR 120
1. Power Tiller
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A Project Study on Working Capital Management of KAMCO Ltd. Power tiller is the main product of kamco .It is a versatile machine that has radically changed the old labour intensive method of agriculture ,by making almost all farming operations faster ,cheaper and easier .The coat on Tiller is around 1.10lakh Features A. Simple movement control for easy of handling B. Perfectly balanced and vibration free engine to reduce operator fatigue C. Unique radiator cooling system helps in non stop operation D. fail safesafety devices to prevents accidents E. Automatic fuel control to save precious energy F. Distinctive radiator control system for continuous operations G. It is faster H. Make cleaner windrows for easier collection I. 6 forward speed ,2 reserve speed ,4 tilling J. Rotary ,diesel powered ,water cooled ,with radiater K. Weight is 485kg
2. Diesel Engine
Features A. Economical with minimum fuel cost B. Smooth starting C. Easier operation D. Equipped with radiation E. Less vibration
F. Less noise
G. Travelling speed 15kmph H. HP-12
3. Power Reaper
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A Project Study on Working Capital Management of KAMCO Ltd. Features A. Power reaper harvests and makes windrows at the rate of 3-4 hours of hectare B. It is light enough to carry by two persons C. Smooth chain conveyer action deliver plants gently making clean windrows D. Weight is 136 kg E. Engine type is single cylinder ,4stroke CSD RR ,side value air cooled engine F. Maximum H P 3.6 Ps Manufacturing KAMCOs Power tiller have more than 850 different components, majority of which are supplied by dedicated small and medium scale industries from near by states .Functionally critical components (almost 13)are manufactured in kamcos house itself Company has got a modern machine shop with special purpose machine ,which ensure conformity with prescribed quality standards .Inspection at various stages off manufacturing is carried out ,which help in reducing the process to the minimum. Other Products KAMCO also deals with following products:-
1. KAMCO Super DI Power Tiller 2. KAMCO Power Stone Cutter KSC 625 3. KAMCO Agria 602 DE Power Tiller
4. KAMCO Agria Garden Tiller

All the above products are supplied by KAMCO to the needy people by the way Of manufacturing on a limited edition. KAMCO has a future plan of manufacturing the above items in a bulk number
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Objectives of the company

The main objective of the company is to manufacture or assemble in India ,either in collaboration or otherwise tractors ,power tillers ,power reapers ,combine harvesters ,tansplanters .diesel engine s, pump sets, accessories and attachments and spares thereto. The other objectives are as follows; 1.To organize , conduct or manage engineering workshops or repair shop. 2.To manufacture, import, buy, sell, or deal in workshop machinery machine tools and metals of all kinds and to undertake repairs. 3.Servicing of agricultural machinery or other equipments,implements and tools 4.Rendering other kinds of services for consideration or otherwise.
Milestones of the Company

KAMCO has three more units:-Kalamassery unit in Ernakulam dist. Kanjikode unit in Palakkad dist. and Mala unit in Trichur dist. The Kalamassery unit manufactures diesel engines, Kanjikode unit produces power tiller and the Mala unit manufactures power reaper. A major milestone for the company was the award of the International Quality Excellence Certificate under ISO 9002 IN October 1996 KAMCO is the second public sector undertaking in Kerala getting this coveted certificate and the only public sector undertaking who has got ISO 9002 certification justify in the high standards of the products for their three units . From 15-03-2002 onwords KAMCO became a ISO 9001 -2000 registered company by KRMG quality registration
Business environment of KAMCO
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A Project Study on Working Capital Management of KAMCO Ltd. As far as KAMCO Ltd. Products having heavy demand in the market , their un able to meet the requirement of the customers .The company is functioning in a cordial and happy atmosphere . The officers and staff in the company are very co-operative and friendly moving .The Cochin Port and Cochin Aerodrome are situated very near to the company and this will also help to boost the business .The company is running a stabilized canteen for their employees to maintain a harmonious atmosphere resulting to make maximum output.
Corporate Governance
Being a non-listed GOVT. company, provisions of the companys Act 1956 with 8regard to corporate governance is not applicable. Pollution Controlling System of KAMCO Athani, Palakkad and Mala units of the company have installed effluent treatment systems designed by the LBS centre for Science and Technology and approved by State Pollution Control Board. The all new engines will reduce pollution and it also reduces the fuel consumption than the ordinary engine.
Present Status of KAMCO

KAMCO is one of the professionally managed companies owned by state government. Present status of KAMCO is synonymous with service to the small and marginal farmers of the country. KAMCO through their precision and quality is revolutionizing the small and marginal holdings throughout the country Today KAMCOS products are widely used and demanded in all over India,enjoying over 60% of the market share at national level. The company with its four plants Athani Kalamassery, Kanjikode and Mala unit is confidently meting the demand for KAMCO products in India and abroad.The main markets for the products are at West Bengal, Assam, Tamil Nadu, Tripura Meghalaya, Kerala, Bihar, Gujarat and Manipur presently KAMCO have 45 dealers all over India
ISO 9001-2000 certification

All units of company are working with ISO 9001-2000 certification
Nirmala College of Information Technology, Chalakudy 16
Industrial Relations
The industrial relation in the KAMCO is cordial which forms the basis for sustained growth of the organization .
Quality of products
The company enjoys the position of premier manufacture in the field .The products manufactured are indigenized and there is no imported contend in any of the times. The machines have acquired a reputation for quality and reliability .KAMCOis an ISO 9001 organisation with the aim of providing quality products at reasonable price to the satisfaction of customers .The company enjoys all India market through a network of about 45 dedicated dealers. Products are sold on premium at several places. They have acquired a brand preference because of the high quality and reliability associated with machineries.
Quality Policy of KAMCO

Total customer satisfaction through quality products and service with improved technology and employee participation. We comply with the requirements of the customers and the applicable statutory regulatory requirements.The effectiveness of the established quality management system is continually improved to enable achievement of the policy.
Objectives
1. To ensure that quality requirements of the products and service offered are maintained at all stages. 2. To create a culture among all employees towards total concepts and productivity through total involvement and commitment of all employee. 3. To create healthy working environment for attainment of quality goals with excellence and to make quality a way of life.
A Project Study on Working Capital Management of KAMCO Ltd. 4. To detect and prevent non-conformance and defects as early as possible and to eliminate them through appreciate changes to the quality management system. 5. To achieve and maintain quality leadership through continuous technology up-gradation improvements in techniques system and procedures and to meet customers changing needs.
Expansion and Diversification

As per the decisions of Board of Directors to diversify into production of low HP Tractor and various kinds of pesticides sprayers, action had been taken to acquire the technology. Memorandum of Undertaking has been signed with M/s Barbieri Srl, Italy for providing
technology for Tractors 6 Nos of 18 hp Tractors have been imported and they are undergoing trials at various locations in the country now. As per the plan approved by Board, Company proposed to bring out the Tractor in Nov. 2010
Capital Structure
The Authorized Capital of the Company remained unaltered at Rs.200 lakhs. Issued and Paid up Capital remained unaltered at Rs.161.46 lakh divided into 161460 equity shares of Rs 100 each fully paid up, entirely held by Govt of Kerala.
Future Outlook
Company had decided to manufacture low HP Tractors for which an MOU was signed with an Italian Company. Company imported samples of low HP Tractors from Italy and the same is undergoing field trials at various locations across the country to identify its usefulness in Indian soil conditions. Mean Time Company had approached Govt of Kerala for getting the industrial land adjacent to Companys property at Athani for the new tractor project. Project related works are progressing. Govt of Kerala allotted 10 acres of land to company.
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FINANCIAL HIGHLIGHT
(Rs in Lakhs)
2004-05
A.SALES REVENUE Kamco power tiller Power reaper Power stone cutter AGRIA garden tiller Diesel engine Spares&Accessories 9.17 10.49 888.17 6661.79 364.77
2005-06
2006-07
2007-08
2008-09
6599.54 440.30 1.00 2.17 6.54 954.14
7558.47 475.64 2.01 11.28 4.75 1067.2
8300.56 636.59
9930.36 858.21
8.68 7.30 1168.73 4.46 1235.49
Total sales B.WORKING RESULTS Operating profit Depreciation&impair loss Cash profit Profit before tax Provision for tax Profit available
7934.39
8003.69
9121.74
1121.86
12028.50
726.23 81.30
805.69 78.81
883.70 67.29
950.12 65.85
1177.06 72.96
807.53 730.91 263.08 for 467.83
884.50 801.82 279.00 522.82
950.99 875.83 303.22 572.61
1015.97 933.16 307.61 625.55
1250.02 1169.40 44.88 764.52
appropriation C.APPROPRIATION proposed dividend Tax on dividend Other services 48.44 6.92 70.00 48.44 6.79 70.00 397.59 48.44 8.23 70.00 445.94 48.44 8.23 70.00 498.88 48.44 8.23 70.00 637.85
Surplus transferred to 342.47 Balance sheet
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PERFORMANCE
During the year 2008-09 the total turnover of the company increased from 101.22 crores to Rs 120.28 crores. During the first half of 2008-09 material costs showed an increasing trend. During the second half of 2008-09 economic recession all over the world hit the Indian economy also to a very great extend. In spite of the recessional tendency which adversely affected the production of engineering&automobile industry, the company could improve the sales mainly because of the improved quality of the product. The company could also reduce the material cost to some extent due to the reduction in the price of steel in the open market as an impact of economic recession .Overall, increase in the volume of production and reduction in the material prices in the second half of 2008-09 enabled the company to increase operating profit by 23.8% over the previous years Present trend indicate that sales during the coming years can be future increased provided there is price compititiveness .
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FUTURE SCOPE OF THE ORGANISATION

KAMCO is looking proudly ahead into more promising future . Future will also See KAMCOs diversification products in the farm mechanization field contributing significantly in food production and predicting itself to the cause of self relevance and social responsibility in the service of people without respite. Today KAMCO is a multi- product, multi- location company with two production units at Ernakulam dist., one production unit at Palakkad dist. And one production unit at Thrissur dist. KAMCO has a number of diversification plans in the anvil. Its proposed to set up research development activities which will hopefully help it to develop new products in the future and live up to its promise, that its products will be A boom for the farmer and again for the nation. The quality policy of KAMCO is total customer satisfaction through quality products and service with improved technology and employee participation.
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LITERATURE REVIEW
The current study contributes to the literature by examining impact of working capital management on the operating performance and growth of new public companies The study also sheds light on the relationship of working capital with debt level, firm risk , and industry .Using a sample of initial public offerings (IPOS) the study finds a significant positive association between higher levels of accounts receivables and operating performance . The study further finds that maintaining control (i.e.lower amounts ) over level of cash and securities , inventory, fixed accounts and accounts payables appears to be associated with higher operating
performance , as well .We find that IPO firms which are experiencing unusually high growth tend not to perform as well as those with low to moderate growth . Further firms which are experiencing high growth tend to hold higher levels of cash and securities , inventory, fixed asset and accounts payables .These findings tend to suggest that firms are willing to sacrifice performance (accept low or negative operating returns ) to increase their growth levels . The higher level of growth is also associated with higher operating and financial risk .The findings of this study suggest that perhaps IPO firms should stay more focused on their operating performance than on maintaining high growth levels . Introduction and literature review Working capital policy refers to the firms policies regarding 1) target levels for each category of current operating assets and liabilities, and 2) how current assets will be financed. Generally good working capital policy (i.e. under conditions of certainty) is considered to be one in which holdings of cash, securities, inventories, fixed assets and accounts payables are minimized. The level of accounts receivables should be used as a means of stimulating sales and other income. Previous literature on working capital management has found a negative association, overall, between level of working capital and performance as measured by operating returns and operating margins (Peterson and Rajan1997). Under conditions of certainty firms have little reason to hold more working capital than a minimum level. Larger amounts would increase the level of operating assets, increase the need for external funding, resulting in lower return on assets and a lower return on equity, without any increase in profit.
However the picture changes when uncertainty (i.e. uncertain growth ) is introduced (Brigham and Houston 2000). Larger amounts of cash, securities, accounts receivables, marketable securities, inventories and fixed assets will be needed to support increased sales required levels will be based on expected sales levels and expected order lead times. Additional holdings may be needed to enable the firm to deal with departures from the expected value . Further firms will also attempt to increase their accounts payable balance as a means of financing increased levels of current operating assets. Firms which are in high growth stages will face the challenge of maintaining the necessary level of operating assets to support subsequent growth , while at the same time attempting to maintain adequate performance indicators . This study focuses on understand how IPO companies manage their working capital and other balance sheet items to support subsequent growth .This study support the existing literature on working capital and contributes to the existing literature by examining a sample of firm which have a wider range of growth levels than non-IPO firms. Our study also examines these relationships under three categories of growth (i.e. negative growth, moderate growth and high growth). The study also examines other selected firm characteristics in light of working capital management: firm operating and financial risk, amount of debt, firm size and industry. An underlying theme of this study is that high growth certainly does not ensure high operating performance. Consistent with prior research (Peterson and Rajan 1997) this study provides further evidence that good working capital management is positively associated with better operating performance. Higher levels of accounts receivables are associated with higher operating performance, in all three of the growth rate categories. The study also finds that maintaining control over levels of cash, securities, inventory, fixed assets and accounts payables is associated with higher operating performance. We find that firms which are experiencing very high growth will hold higher levels of cash, securities, inventory, fixed assets and accounts payable to support the high growth. The study suggests that these firms are sacrificing operating performance (accepting lower operating returns) to support the high growth. This, in turn, increases financial and operating risk for these firms. Perhaps IPO firms should stay more focused on their operating performance, while maintaining more moderate growth levels.
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THEORETICAL CONCEPTS Introduction to financial management

Financial management refers to the part of the management activity ,which is concerned with the planning and controlling of firms financial resources .It deals with finding out various resources of raising fund for the firm. In other words financial management means the entire management efforts devoted to the management of finance both in its sources and uses .The most appropriate use of funds also reforms a part of financial management . Financial management is applicable to every type of organization irrespective of its size, kind of nature. It is useful to a small concern as to big unit. A trading concern gets the same utility from its applications as a manufacturing unit may expert. This subject is important and useful for all types of ownership organizations. Where there is use of finance management is helpful.
WORKING CAPITAL
Working capital may be regarded as the life blood of a business. Its effective provision can do much to ensure the success of a business. Its inefficient management can lead not only loss to profit but also to down fall of a business. A study of working capital is of major importance to internal and external analysis because of its close relationship with the current day to day operations of a business. Every business needs funds for two purposes- for its establishment and to carry out day to day operations. Long term funds are required to create production facilities through purchase of fixed asset such as plant and machinery, Land and Buildings, Furniture etc. Investment in these assets represents that part of firms capital which is blocked on a permanent or fixed basis and is called fixed capital. Funds are also needed for short term purposes for the purchase of raw materials, payment of wages, and other day to day expenses etc these funds are called working capital. In other words working capital refers that part of firms capital which is required for financing short term or current assets such as cash ,marketable securities, debtors, inventories, bill receivables etc
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CONCEPT OF WORKKING CAPITAL

There are two concepts of working capital
(A) BALANCE SHEET CONCEPT

1. Gross Working Capital 2. Net Working Capital In the broad sence ,the term working capital refers to the gross working capital and represents the amount of funds invested in current asset .Thus the gross working capital is the capital invested in total current asset of the enterprise . Net working capital is the excess of current over current liability .Its also the portion of firms current asset ,which is financed by long term funds Net working capital may be positive or negative .when the current asset exceed the current liabilities ,the working capital is positive and the negative working capital results when the current liabilities are more than the current asset
NEED FOR WORKING CAPITAL

The basic objective of financial management is to maximize the share holders wealth .This is possible only when the company earns sufficient profit. The amount of profit largely depends up on the magnitude of the sale .How ever ;sales do not convert in to cash immediately .There is always the time gap between sales of goods and the receipt of cash .Working capital is required for the period in order to sustained the sales activity in case adequate working capital is not available for this period ,the company will not be in a position to purchase row material ,pay wages and other expenses required for manufacturing the goods to be sold .
(B) OPERATING CYCLE

Working capital refers to that part of firms capital which is required for financing short term or current assets such as cash, marketable securities,debtors and inventories .Funds thus invested in current assets keep revolving fast and are being constantly converted in to cash and this cash
A Project Study on Working Capital Management of KAMCO Ltd. flow out again in exchange for other current assets .Hence it is also known as revolving or circulating capital .The circular flow concept of working capital is based up on this operating or working capital cycle of a firm .The cycle starts with the purchase of raw material and other resources and ends with the realization of cash from the sale of finished goods .The speed/time duration required to complete one cycle determines the requirementsof working capital longer the period of cycle ,larger the requirement of working capital Working is required because of the time gap between the sales and their actual realization of cash .This time gap technically termed as operating cycle of the business .In case of manufacturing company the operating cycle is the length of the necessary to complete the following cycle of events: 1. Conversion of cash in to raw material 2. Conversion of raw material in to work in progress 3. Conversion of work in progress to finished goods 4. Conversion of finished goods in to accounts receivables 5. Conversion of account receivables into cash This cycle will be repeated again and again
TYPES OF WORKING CAPITAL

Working capital may be classified in two ways 1.On the basis of concept 2.Onthe basis of time On the basis of concept ,working capital is classified as gross working capital and net working capital On the basis of time ,working capital may be classified as a. Permanent or Fixed working capital b. Temporary or Variable working capital
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a. Permanent or Fixed working capital

Permanent or Fixed working capital is the maximum amount of which is required to ensure effective utilization of fixed facilities and for maintaining the circulation of current assets.There is always a minimum level of current assets which is continuously required by the enterprise to carry out its normal business operations. The following are the characteristics of permanent working capital (1) Amount of working capital remains in the business in one form or another. This is particularly from the point of view of financing. The suppliers of such working capital should not expect its return during the life time of the firm. (2) It also grows with the size of the business. In other words, greater the size of the business greater is the amount of such working capital and vice versa
(C ) Temporary Working Capital

The amount of such working capital keeps on fluctuating from time to time on the basis of business activities. In other words, it represents additional current assets required during the operating years. Suppliers of temporary working capital can expect its return during off season when the firm does not require it. Hence temporary working capital generally financed from short term sources of finance, such as bank credit
FACTORS DETERMINING WORKING CAPITAL

The need for working capital requirement for running day today business activities cannot be over emphasized .The working capital requirements are affected by a number of factors .Some of them might be associated with the general economic monetary business environment etc. how ever some of the important requirements of business enterprise are given below a) Production policies b) Nature of the business c) Length of manufacturing process
A Project Study on Working Capital Management of KAMCO Ltd. d) Credit policy e) Seasonal fluctuations f) Fluctuations of supply g) Type of business organization h) Type of business industry i) Growth of business j) Dividend policy k) Economic factors l) Government policy
ADEQUACY OF WORKING CAPITAL

A firm must have adequate working capital i.e.as such needed by the firm .It should neither be excessive nor inadequate .Both situations are dangerous Excessive working capital means that company has idle funds which earn no profit on the other hand inadequate working capital means the firm does not have fund for running its operations which ultimately cause productions interruptions and lowering down of the profitability There is a relationship between working capital risk and return. In manufacturing concern it is generally accepted that higher level of working capital decrease the profitability too while lower levels of working capital increases the risk and return .In manufacturing concern it is generally accepted that higher level of working capital decrease the risk and decrease the profitability too while lower levels of working capital increase the risk but have the potentiality of increasing profitability
SOURCE OF WORKING CAPITAL

The financial manager is always interested in working capital at right time ,at a reasonable cost and at the best possible favorable terms .In any concern a part of working capital investments are permanent investment in fixed assets, because there is always a minimum level of current assets which are continuously, required by the enterprise to carry out the day to day business operations. The minimum level cannot be expected to reduce at any time. This minimum level of current assets gives rise to permanent working capital which is permanently blocked in current assets.
WORKING CAPITAL MANAGEMENT

Working capital, in general refers to the excess of current assets over current liabilities. Management of working therefore,is concerned with the problems that arise in attempting to manage the current assets, current liabilities and the inter relationship that exist between them. The basic goal of working capital management is to manage the current assets and liabilities of a firm in such a way that a satisfactory level of working capital is maintained i.e. it is neither inadequate nor excessive. This is so because both inadequate as well as excessive working capital positions are bad for any business. Inadequacy of working capital may lead the firm to insolvency and excessive working capital implies idle funds which earn profit for the business . Working capital management policies of a firm have a great effect on its profitability, liquidity and structural health of organization . The management of working capital has the following problems 1. Estimating the working capital requirements 2. To decide optimum level of investment in various assets 3. To decide optimal mix of short term funds in relation to long term capital 4. To locate the appropriate means of short term financing We need to know when to look for working capital funds, how to use them and how to measure, plan and control them. Thus the finance manager has to perform the following three basic functions:1.Forecasting the working capital requirements 2.Financing of working capital needs
COMPONENTS OF WORKING CAPITAL MANAGEMENT

Working Capital Management has three components 1. Cash Management 2. Receivables Management 3. Inventory Management
CASH MANAGEMENT
Cash is one of the current assets of a business. It s needed at all times to keep the business going. A business concern should always keep sufficient cash for meeting its obligation. Any shortage of cash will hamper the operations of a concern and any excess of it will be unproductive. Cash is the most unproductive of all the assts.
Cash management deals with the following:

(a) Cash inflows and outflows (b) Cash flows within the firm (c) Cash balance held by the firm at appoint of time
Motives for holding cash

The firms needs for cash may be the following needs y Transaction motive-A firm needs cash for making transactions in the day today operations such as to make purchases pay expenses ,tax,dividend etc y y Precautionary motive A firm is required to keep cash for meeting various contingencies Speculative motive-The speculative motives relates to holding of cash for investing in profitable opportunities
INVENTORY MANAGEMENT
Inventories constitute the most significant part of current assets of a large majority of companies in India .Inventories are stock of the product a company is manufacturing for sale and components that make up the product .The various forms in which inventories exist in a manufacturing company are a. Raw materials b. Work in process c. Finished goods
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A Project Study on Working Capital Management of KAMCO Ltd. There are three general motives for holding inventories a. Transaction motive b. Precautionary motive c. Speculative motive The main objectives of inventory management are operational and financial. The operational objectives mean that the materials and spares should be available in sufficient quantity so that work is not disrupted for want of inventory. The financial objectives means that investments in inventories should not remain idle and minimum working capital should be locked in it. Effective inventory management requires an effective control system for inventories. A proper inventory control not only helps in solving the acute problem of liquidity but also increases profits and causes substantial reduction in the working capital of the concern Some of the important tools and techniques of inventory management are a. Determination of stock levels b. Determination of safety stocks c. A.B.C Analysis d. V.E.D Analysis e. Inventory turnover ratios f. Classification and codification g. Preparation of inventory report
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RECEIVABLES MANAGEMENT
Receivables represent amount owed to the firm as a result of sale of goods or services in the ordinary course of business. These are claims of the firm against its customers and from part of its customers and from part of its current assets. Receivables are also known as account receivables, trade receivables, customer receivables or book debts. The receivables are carried for the customers. The period for credit and extend of receivables depend upon the credit policy followed by them. The purpose of maintaining or investing in receivables is to meet competition and to increase the sale and profit. Receivables management is the process of making decision relating to investment in trade debtors .The objective of receivables management is to take the sound decisions as regard investment in debtors in the words of Bolton S.E the objective of receivable is to promote sales and profit until that point is reached were the return on investment in further funding of receivables is less than the cost of funds raised to finance that additional credit
Factors influencing the size of receivables

1. Size of credit sales 2. Credit policies 3. Terms of trade 4. Expansion plants 5. Relation with profit 6. Credit collection efforts 7. Habits of customers
Dimension of receivables management

a. Forming of credit policy b. Executing the credit policy c. Formulating and executing collection policy
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RESEARCH METHODOLOGY
Research Methodology is science of study how research is done scientifically. Research is an art of scientific investigation. The Advanced Learners Dictionary of Current English lays down the meaning of research as A careful investigation or enquiry specially through search for new facts in any branch of knowledge. Redman and Mory defines research as a Systematized effort to gain new knowledge
Research Design The research design must make enough provision for protection against bias and must maximize reliability with due concern for the economical completion of the research study. Descriptive research studies are those study which are concerned with describing the characteristics of a particular individual or of a group . A research design must focus attention on the following a. Formulating the objective of the study b. Designing the method of data collection c. Selecting the sample d. Collecting the data e. Processing and analysis the data f. Reporting the findings
Data Collection
1. Internal Under this the information is collected from the firms internal records .
2. External External factors are of two types a. Primary Data Primary data are those which are original in character .They are collected for the first time
A Project Study on Working Capital Management of KAMCO Ltd. b. Secondary Data Secondary data are those which are already collected by someone of another purpose secondary data was collected from the annual reports of the company Research methodology is a way to systematically solve the research problem . The study was undertaken by personally visiting the plant at Athani (Ernakulam) and was done during the period of 45 days . The study plays more emphasize on the finance department of KAMCO Ltd. Both primary and secondary data are used for the completion of the study
Sources of data
The researcher has studied the existing system through the data collection. The data has been collected through primary data and secondary data .The data collected was done during the period of 45 days . Primary Data The researcher has collected primary data from the officers of finance account section .Direct personal interview method was adopted to collect information from the above said officers Secondary Data The study is confined to secondary data obtained from the Annual Reports of the company, Books of accounts, Company web site etc. The source of data for the study was Balance Sheet& P/L Account of the company. The secondary data was collected from the annual reports of the company from 25 to 209 Analysis and Interpretation The Ratio Analysis technique is used to analyze the data. Simple tabulation was used to arrange data. In order to facilitate comparison, data were expressed through charts. Limitation of the study 1. A detailed study cannot be made possible due to lack of time 2. Limitations of Ratio Analysis are not considered
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RESEARCH PROCESS 1. Formulating the research problem There are two types of research problems ,viz., those which relate to states of nature and those which relates to relationships between variables . At the very outset the researcher must single out the problem he wants to study ,i.e. he must decide the general area of interest or aspect of a subject matter that he would like to inquire into. 2. Extensive literature survey Once the problem is formulated ,a brief summery of it should be written down . 3. Development of working hypothesis After extensive literature survey , researcher should state in clear terms the working hypothesis or hypotheses. Working hypothesis is tentative assumption made in order to draw out and test its logical or empirical consequences. 4. Preparing the research design The research problem having been formulated in clear cut terms, the researcher will be required to prepare a research design, i.e. he will have to state the conceptual structure within which research would be conducted. 5. Determining sample design The researcher must decide the way of selecting a sample or what is popularly known as the sample design. In other words a sample design is a definite plan determined before any data are actually collected for obtaining a sample from given population. 6. Collecting the data In dealing with any real life problem it is often found that data at hand are inadequate and hence it become necessary to collect data that are appropriate. There are several ways of collecting the appropriate data which defer considerably in context money costs time and other resources at the disposal of the research
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7.
Execution of the project Execution of the project is a very important step in the research. If the execution of the project proceeds on current lines, the data to be collected would be adequate and dependable. The researcher should see that the project is executed in a systematic
manner and in time. 8. Analysis of data The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences. 9. Hypothesis- testing After analyzing the data as stated above, the researcher is in position to test the hypotheses, if any, he had formulated earlier 10. Generalizations and interpretation If a hypothesis is tested and upheld several times, it may be possible for the researcher to arrive at generalization,i.e. to build a theory. 11. Preparation of the report or the thesis Finally the researcher has to prepare the report of what has been done by him.
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VARIABLES UNDER STUDY Dependent Variable

Working capital management is the depended variable. The capital requirements of a business can be divided into two main categories: fixed capital requirements and working capital requirements. Working capital is the capital required for its day today operations.
Independent Variable
Cash Cash is one of the current assets of a business. Cash itself doesnt produce goods or service It is used to as a medium to acquired other assets Receivables Receivables represent amounts owed to the firm as a result of sale of goods and services in the ordinary course of business. Inventory Inventories are goods held for eventual sale by a firm. Inventories are thus one of the major elements which help the firm in obtaining the desired level of sales. Inventories can be classified into three categories a. Raw material: These are goods which have not yet been committed to production in a manufacturing firm. b. Work -in process: This include those materials which have been committed to production process but have not yet been completed c. Finished goods: these are completed products awaiting sale. Holding of inventories helps a firm in separating the process of purchasing, producing and selling. In case a firm does not hold sufficient stock of raw materials, finished goods, etc. The purchasing would take place only when the firm receives the order from a customer. It may result in delay in executing the order because of difficulties in obtaining procuring raw materials, finished goods, etc. Thus, inventories provide cushion so that the purchasing, production and sales functions can proceed at optimum speed.
PERIOD OF THE STUDY

The present study analyze the working capital of KAMCO Ltd, over a period of five years that is from 2005-09
LIMITATIONS
a. The entire study is based on the published financial statements of the company and any limitation inherent it would reflect in this also
b. The ratio does not provide an indication of future c. Information disclosed in the financial statement may not be fully true
d. The busy schedule of the department heads restricted collection of detailed information e. Entire details regarding the organization cannot be revealed due to non disclosure of certain files , records , information etc.
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DATA ANALYSIS AND INTERPRETATION
RATIO ANALYSIS
Ratio analysis is an important tool and useful technique to check upon the efficiency with which working capital is being used in the enterprise. Some of the ratios indicate the trend or progress or downfall of the firm. It helps the financial management in evaluating the financial position and performance of the firm. The object and utility of ratio analysis as a technique of financial analysis is confined not only to the internal parties but to the trade creditors, bank and lending institution also. problems such as y y y y y Whether the enterprises financial position is basically sound. Whether the capital structure of the business is in proper order Whether the profitability of the enterprise is satisfactory Whether the credit policy in relation to sales and purchase is sound Whether the company is credit worthy Here Ratio analysis gives the answers to the
Thus, ratio analysis highlights the liquidity, solvency, capital gearing etc.
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LIQUIDITY RATIO
CURRENT RATIO Current Ratio = Current assets Current Liabilities
YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Graph 1
CURRENT ASSET 6206.74 6642.32 7548.34 7915.02 8825.08
CURRENT LIABILITIES 1050.56 969.32 1347.69 1122.81 1329.85
QUICK RATIO 5.90 6.85 5.60 7.04 6.63
CURRENT RATIO
8 7 6 5 4 CURRENT RATIOS 3 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: The current ratio of firm measures its short term solvency, i.e., its ability to meet short term obligations. Current Ratio of 2:1 is considered an ideal one. Here Current ratios of KAMCO show sound solvency position and adequate working capital. In the year 2008-09 current ratio shows high i.e. 7.04
QUICK RATIO Quick Ratio = Quick assets Current Liabilities
YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Graph 2
QUICK ASSETS 4424.82 4434.54 5599.47 5874.11 6573.04
CURRENT RATIO 4.21 4.57 4.15 5.23 4.94
QUICK RATIO
6 5 4 3 QUICK RATIO 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: Quick ratio of 1:1 is considered satisfactory and if the ratio is more than 1:1, then the financial position of the concern is sound and good. Quick ratio is the true test of business solvency. Quick ratios of KAMCO Ltd. Shows sound financial position and its ability to meet all current liabilities.
ABSOLUTE LIQUIDITY RATIO Absolute liquidity ratio = Cash Current Liabilities
YEAR
CASH
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 3
2771.42 2878.75 3922.46 3525.63 3585.66
ABSOLUTE LIQUIDITY RATIO 2.63 2.96 2.91 3.14 2.69
ABSOLUTE LIQUIDITY RATIO

6 5 4 3 Absolute Liquidity Ratio 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: This ratio indicates the cash position of the concern. A ratio of 0.75:1 is recommended to ensure liquidity. Cash maintenance is higher in the case of KAMCO Ltd. It shows the increasing trend year over year. It creates more liquidity to the company. The graph shows that cash position of KAMCO Ltd. Is very high in the year 2007-08.
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LIVERAGE RATIO
DEBT EQUITY RATIO Debt Equity Ratio YEAR OUTSIDERS FUND 1050.56 969.32 1347.69 1122.81 1329.85 = Outsiders Fund Shareholders Fund SHAREHOLDERS DEBT FUND EQUITY RATIO 6014.14 0.17 6481.73 0.14 6997.67 0.19 7566.55 0.14 8274.39 0.16
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 4
DEBT EQUITY RATIO

0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2004-05 2005-06 2006-07 2007-08 2008-09 DEBT EQUITY RATIO
Interpretation: An acceptable norm for this ratio is considered to be2:1. A very high ratio is unfavorable from the point of view of the firm. Here debt equity ratios of KAMCO Ltd. Show that greater claims of owners than creditors. From the point of view of creditors, it represents a satisfactory capital structure of the business.
PROPRIETARY RATIO Proprietary Ratio = Shareholders Fund Total Assets
YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Graph 5
SHAREHOLDERS FUND 6014.14 6481.73 6997.67 7566.55 8274.39
TOTAL ASSETS 7096.63 7481.99 8372.68 8725.84 9646.28
PROPRIETARY RATIO 0.84 0.86 0.83 0.86 0.85
PROPRIETARY RATIO
0.865 0.86 0.855 0.85 0.845 0.84 0.835 0.83 0.825 0.82 0.815 2004-05 2005-06 2006-07 2007-08 2008-09 Proprietary Ratio
Interpretation: This ratio shows the financial strength of the company. It indicates the long term solvency of the firm. The acceptable norm of the ratio is 1:3 i.e. 0.33. Proprietary ratios of KAMCO Ltd show good financial strength in every year.
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FIXED ASSET TO NET WORTH Fixed Asset to Net Worth = Fixed Assets Net Worth
YEAR
FIXED ASSETS
NET WORTH
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 6
714.89 664.66 619.34 605.82 616.19
6014.14 6481.73 6997.67 7566.55 8274.46
FIXED ASSETS TO NET WORTH 0.11 0.10 0.08 0.08 0.07
0.12 0.1 0.08 0.06
FIXED ASSET TO NET WORTH RATIO
FIXED ASSET TO NET WORTH RATIO 0.04 0.02 0 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: This ratio shows the relationship between fixed assets and shareholders fund. The purpose of this ratio is to find out the percentage of the owners fund invested in fixed assets.
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ACTIVITY RATIOS
INVENTORY TURNOVER RATIO Inventory Turnover Ratio = Net Sales Inventory
YEAR
NET SALES
INVENTORY
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 7
7934.39 7998.07 9114.09 10118.62 12027.56
1781.91 2207.78 1948.86 2040.91 2252.04
INVENTORY TURNOVER RATIO 4.45 3.62 4.67 4.95 5.34
INVENTORY TURNOVER RATIO

6 5 4 3 INVENTORY TUNOVER RATIO 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: It signifies the liquidity of the inventory. This ratio indicates whether investment in inventory is efficiently used or not. It also measures the effectiveness of the firms sales efforts. Inventory turnover ratio of KAMCO Ltd. Shows fluctuating trend in every year Inventory turnover ratio is high in the year.
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FIXED ASSET TURNOVER RATIO Fixed Asset Turnover Ratio = Net Sales Fixed Assets
YEAR
NET SALES
FIXED ASSETS
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 8
7934.39 7998.07 9114.09 10118.62 12027.56
714.89 664.66 619.34 605.82 616.19
FIXED ASSETS TURNOVER RATIO 11.09 12.03 14.71 16.70 19.81
FIXED ASSET TURNOVER RATIO

25
20
15 FIXED ASSET TURNOVER RATIO
10
0 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: This ratio indicates the extent to which the investment in fixed assets contributes towards sales.
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WORKING CAPITAL TURNOVER RATIO Working Capital Turnover Ratio = Net Sales Net Working Capital
YEAR
NET SALES
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 9
7934.39 7998.07 9114.09 10118.62 12027.56
NET WORKING W/C CAPITAL TURNOVER RATIO 5156.18 1.53 5673.01 1.40 6200.64 1.46 6792.21 1.48 7495.23 1.60
W/C TURNOVER RATIO

1.65 1.6 1.55 1.5 1.45 1.4 1.35 1.3 2004-05 2005-06 2006-07 2007-08 2008-09 W/C TURNOVER RATIO
Interpretation: Working Capital turnover ratio of KAMCO Ltd. Showing a fluctuating trend. Here graph shows that there is an increasing trend in the year 2008-09. It indicates that maximum utilization of working capital.
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DEBTORS TURNOVER RATIO Debtors Turnover Ratio = Net Sales Debtors
YEAR
NET SALES
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 10
7934.39 7998.07 9114.09 10118.62 12027.56
NET WORKING W/C CAPITAL TURNOVER RATIO 891.42 8.90 1025.97 7.79 1220.42 7.46 1989.42 5.08 2616.75 4.59
DEBTORS TURNOVER RATIO

10 9 8 7 6 5 4 3 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09 DEBTORS TURNOVER RATIO
Interpretation: Debtors Turnover Ratio indicates the number of times debtors turnover each year. Higher the value of debtors turnover, the more efficient is the management of credit. Here Debtors turnover ratio of KAMCO Ltd. Showing a decreasing trend.
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PROFITABILITY RATIO Net Profit Ratio = Net Profit after tax *100 Net Sales
YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Graph 11
NET PROFIT AFTER TAX 461.83 522.82 572.65 625.55 764.52
NET SALES 7934.39 7998.07 9114.09 10118.62 12027.56
NET PROFIT RATIO 5.82 6.54 6.28 6.18 6.36
DEBTORS TURNOVER RATIO

6.6 6.4 6.2 6 NET PROFIT RATIO 5.8 5.6 5.4 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: Net profit ratio of KAMCO Ltd. For the period 2004-05, 05-06, 06-07, 07-08, 08-09 were 5.82, 6.54, 6.28, 6.18, 6.36 respectively. The ratio is used to measure the overall profitability. Here net profit ratio of KAMCO Ltd. Show better operational efficiency of the concern.
RETURN ON SHAREHOLDERS FUND Return on Shareholders fund = (Net Profit after Interest & Tax) Shareholders fund
YEAR
2004-05 2005-06 2006-07 2007-08 2008-09 Graph 12
SHARE HOLDERS FUND 6014.14 6481.73 6997.67 7566.55 8274.46
RETURN ON SHAREHOLDERS FUND 7.78 8.07 8.18 8.26 9.24
RETURN ON SHAREHOLDER'S FUND

9.5
8.5 RETURN ON SHAREHOLDER'S FUND
7.5
7 2004-05 2005-06 2006-07 2007-08 2008-09
Interpretation: This ratio shows the rate of profit on shareholders fund. It relates the profit available for the shareholders to their total investment. In the year 2008-09 the rate of return on shareholders fund was 9.24.
MARKET TEST RATIO EARNING PER SHARE Earning Per Share = Net Profit after Tax No of equity shares
YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Graph 13
No. OF EQUITY SHARES 161.46 161.46 161.46 161.46 161.46
EARNING PER SHARE 2.89 3.23 3.54 3.87 4.73
EPS
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2004-05 2005-06 2006-07 2007-08 2008-09 EPS
Interpretation: The earning per share helps in determining the market price of the equity shares of the company. It also helps in estimating the companys capacity to pay dividend on its equity shareholders. Here we can see that there is an increasing trend in the EPS i.e from 2004-05 to 2008-09.
TREND PERCENTAGES
Trend analysis is a tool, which indicates the direction i.e., upward or downwards the different values pertaining to different years. For this purpose the percentage relationship that each item bears to the same item in the base year computed. The information for a number of years is taken up and one year, generally the first year is taken as the base year. The values for base year are considered to be 100 and trend for each year is calculated by taking the values of base year as the basis. An analysis of the ratios over the past five years may well suggest the trend or direction in which the concern is going upward or downward. The method of trend percentage is a useful analytical device for the management since by substituting percentages for large amounts; the brevity and readability are achieved. YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 CURRENT ASSETS 6206.74 6642.32 7548.34 7915.02 8825.08 TREND PERCENTAGES 100 107 122 127 142
Trend analysis of current assets

160 140 120 100 80 60 40 20 0 2004-05 2005-06 2006-07 2007-08 2008-09 Trend analysis of current assets
In the trend analysis shows that current assets of KAMCO Ltd., is increasing significantly in every year.
Trend analysis of Current liabilities
YEAR 2004-05 2005-06 2006-07 2007-08 2008-09
CURRENT ASSETS 1050.56 969.32 1347.69 1122.81 1329.85
TREND PERCENTAGES 100 92 128 107 126
Trend analysis of current liabilities

140 120 100 80 60 40 20 0 2004-05 2005-06 2006-07 2007-08 2008-09 Trend analysis of current liabilities
In the trend analysis shows that current liabilities of KAMCO Ltd., is fluctuating significantly in every year.
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CONSTITUENTS OF CURRENT ASSETS

The Current Assets of KAMCO Ltd consists of the following items. 1. 2. 3. 4. 5. Loose tools Inventories Sundry debtors Cash and bank balance Other Current Assets 6. Loan and advances Year Loose tools 9.86 7.50 5.35 3.85 4.36 Inventories Sundry debtors 891.42 1025.97 1220.42 1989.42 2616.75 Cash & bank balance 2771.42 2878.75 3922.46 3525.63 3585.66
(Rs. In Lakhs)
Other Current assets 103.60 102.87 134.62 179.39 198.52 Loans & advances 648.50 419.43 316.59 175.81 167.74
2004-05 2005-06 2006-07 2007-08 2008-09
1781.91 2207.78 1948.86 2040.91 2252.04
4500 4000 3500 3000 2500 2000 1500 1000 500 0 2004-05 2005-06 2006-07 2007-08 2008-09 Loose tools Inventories Sundry debtors Cash & bank Other current assets Loans & advances
Graph shows that cash & bank constitutes highest position of the total current assets. It helps to keep the firm sufficiently liquid and to use excess cash in some profitable way.
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CONSTITUENTS OF CURRENT LIABILITIES
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Current Liabilities 1050.56 696.32 1347.69 1122.81 1329.85
Provisions 325.38 133.08 81.46 103.17 72.82
1600 1400 1200 1000 800 600 400 200 0 2004-05 2005-06 2006-07 2007-08 2008-09 Current Liabilities Provisions
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COMPARISON OF CURRENT ASSETS AND CURRENT LIABILITIES
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Current Assets 6206.74 6642.32 7548.34 7915.02 8825.08
Current Liabilities 1050.56 696.32 1347.69 1122.81 1329.85
10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2004-05 2005-06 2006-07 2007-08 2008-09 CURRENT ASSETS CURRENT LIABILITIES
The Company is having sufficient current assets to meet its current liabilities. The companys current assets are always more than the companys current liabilities.
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COMPUTATION OF WORKING CAPITAL

Working Capital = Current assets-current liabilities Year 2004-05 2005-06 2006-07 2007-08 2008-09 Current Assets 6206.74 6642.32 7548.34 7915.02 8825.08 Current Liabilities 1050.56 696.32 1347.69 1122.81 1329.85 Working Capital 5156.18 5673 6200.65 6792.21 7495.23
Working Capital
8000 7000 6000 5000 4000 Working Capital 3000 2000 1000 0 2004-05 2005-06 2006-07 2007-08 2008-09
Here graph shows that the working capital of KAMCO Ltd. Increasing year by year.
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STATEMENT OF CHANGES IN WORKING CAPITAL
Statement of changes in working capital is one of the important tools to analyse the increase or decrease in working capital over a period of time. The main objective of this statement preparation is to derive a fairly accurate summary of the events that affected the amount of working capital. The amount of net working Capital is determined by deducting the total of current liabilities from the total of current assets. Statement of changes in working capital is prepared in order to measure the increase of decrease in the working capital over a period of time. The working capital position at the beginning of a period is changed to a different position a that end of that period. This statement is prepared to depict the changes in working capital and it represents the excess of current assets over current liabilities. Compare each asset in previous year with that in current year. Similarly, compare each current liability in the previous year with that in the current year.
59
60
61
62
63
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Interpretation
An increase in the asset effects the working capital increasing trend. An increase in the liability shows a decreasing trend of working capital. A decrease in the asset effects the working capital in a decreasing trend. A decrease in the liability shows an increasing trend. But an increase in the liability shows a decreasing trend of working capital. For example in the year 2005current asset like loose tools inventories and debtors shows a decreasing trend. Its percentage of change is also negative. But in the liabilities like current liability and provision shows a decreasing trend but its percentage of change is positive.
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CASH MANAGEMENT
The main aim of cash management is to maintain adequate control over cash position to keep the firm sufficiently liquid and to use excess cash in some profitable way. The
management of cash also important because it is difficult to predict cash flows accurately, particularly the inflows, and there is no perfect coincidence between the inflows and outflows of cash. During some periods, cash outflows will exceed cash inflows, because payments for taxes, dividends or seasonal inventory buildup. At other times cash inflow will be more than cash payments because there may be large cash sales and debtors may be realized in large sums promptly. The firm should evolve strategies regarding the following four facets of cash management. 1. Cash Planning: Cash inflows and outflows should be planned to project cash surplus or deficit for each period of the planning period. 2. Managing the cash flows: The flow of cash should be properly managed. The cash inflows should be accelerated while, as far as possible, the cash outflows should be decelerated 3. Optimum Cash Level: The firm should decide about the appropriate level of cash balance. The cost of excess cash and danger of cash deficiency should be matched to determine the optimum be decelerated. 4. Investing Surplus Cash: The surplus cash balance should be properly invested to earn profits. The firm should decide about the division of such cash balance between alternative short term investment opportunities such as bank deposits, marketable securities or interoperate lending. The ideal cash management system will depend on the firms product, organization structure, competition, and culture.
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Cash maintenance is higher in the case of KAMCO comparing with the industry. It shows increasing trend and it creates more liquidity to the company. (Rs. In Lakhs) 2005 KAMCO 2771.42 Cash & Bank 2006 2007 2878.75 3922.46 2008 3525.63 2009 3585.66
Cash & Bank

4500 4000 3500 3000 2500 2000 1500 1000 500 0 2005 2006 2007 2008 2009 Cash & Bank
Graph shows that cash position is very high in the year 2007 and KAMCO keeps on maintain a good cash management because cash and bank constitutes the highest position of the total current assets.
INVENTORY MANAGEMENT
The aim of inventory management should be to avoid excessive and inadequate levels of inventories and to maintain sufficient inventory for the smooth production and sales operation. Effort should be made to place an order at the right time with the right source to acquire the right quantity at the right price and quality. An effective inventory management should y y Ensure a continuous supply of raw materials to facilitate uninterrupted production Maintain sufficient stocks of raw materials in periods of short supply and anticipate price changes y Maintain sufficient finished goods inventory for smooth sales operation and efficient customer service y y Minimize carrying cost and time, and Control investment in inventories and keep it at an optimum level
Maintaining and inadequate level of inventories is also dangerous. The consequences of under investment in inventories are production hold ups and failure to meet delivery commitments. Inadequate raw material and work in progress inventories will result in frequent production interruptions. Similarly, if finished goods inventories are not sufficient to meet the demand of customers regularly, they may shift to competitors, which will amount to a permanent loss to the firm
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The inventory contribution is higher for the raw materials than the finished goods. Normally the other players keeping finished goods more than raw materials as inventory. But KAMCO keeps on maintaining raw materials more than the finished goods. Inventories are listed of stock-raw materials, work in progress, or finished goods waiting to be consumed ;in production or to be sold. The total balance of inventory is the sum the value of each stock line. (Rs. In Lakhs) Raw Material & Stores 2006 2007 856.26 984.91
2005 KAMCO 838.85
2008 1274.05
2009 1531.34
Raw Material & Stores

1800 1600 1400 1200 1000 800 600 400 200 0 2005 2006 2007 2008 2009 Raw Material & Stores
Raw materials inventories show an increasing trend. It helps to maintain frequent production.
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A Project Study on Working Capital Management of KAMCO Ltd. Finished Goods 2006 2007 944.34 553.60
2005 KAMCO 588.71
2008 294.27
2009 109.76
Finished Goods
1000 900 800 700 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 Raw Material & Stores
2005 KAMCO 298.47
Work in Progress 2006 2007 338.99 353.76
2008 425.54
2009 538.84
Raw Material & Stores

600 500 400 300 200 100 0 2005 2006 2007 2008 2009 Raw Material & Stores
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Effective inventory management requires an effective control system for inventories. A proper inventory control not only helps in solving the acute problem of liquidity but also increases profits and causes substantial reduction in the working capital of the concern
Inventory Turnover Ratio

Inventory Turnover Ratios are calculated to indicate whether inventories have been used efficiently or not. The purpose is to ensure the blocking of only required minimum funds in inventory. Inventory Turnover Ratio= Net sales Inventory YEAR NET SALES INVENTORY INVENTORY TURNOVER RATIO 4.45 3.62 4.67 4.95 5.34
2004-05 2005-06 2006-07 2007-08 2008-09
7934.39 7998.07 9114.09 10118.62 12027.56
1781.91 2207.78 1948.86 2040.91 2252.04
inventory Turnover Ratio

6 5 4 3 inventory Turnover Ratio 2 1 0 2005 2006 2007 2008 2009
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Inventory Conversion Period

Inventory conversion period is calculated to find out the average time taken for clearing the stocks. Inventory Conversion period = 365
Inventory turnover ratio
YEAR
DAYS
INVENTORY
2004-05 2005-06 2006-07 2007-08 2008-09
365 365 365 365 365
4.45 3.62 4.67 4.95 5.34
INVENTORY TURNOVER RATIO 82 100 78 73 68
Classification and Codification of Inventories The inventories of a manufacturing concern may consist of raw materials; work in process, finished goods, spares, consumable stock etc. All these categories may have their sub divisions. For a proper recording and control of inventory, a proper classification of various types of items is essential. The inventories may be classified either according to their nature or according to their use. Generally, materials are classified according to their nature such as construction materials, consumable stock, spares etc. After classification, the materials are given code
numbers. The coding may be done alphabetically or numerically Inventory Reports From effective inventory control, the management should be kept informed with the latest stock position of different items. This is usually done by preparing periodical inventory reports. These reports should contain all information necessary for managerial action. On the basis of these reports management takes corrective action wherever necessary.
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Stock records are needed y y To provide an account to activity within each stock line As evidence to support the balances used in financial reports
Inventory Management is an important aspect of working capital Management because inventories themselves do no earn any revenue. Holding either too little or too much inventory incurs costs.
Costs carrying too much inventory are y y y y Opportunity cost of forgone internal-insurance Ware housing Costs Damage and pilferage Obsolescence
Costs of carrying too little inventories are Stock out costs y y Lost sales Delayed Service
Ordering Cost y y y Freight Order administration Loss of quantity discounts
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Carrying cost can be minimized by making frequent small orders but these increases ordering cost and the risk of stocks-outs. Risk of stock-outs can be reduced by carrying safety stock (at a cost) and reordering ahead of time. The best ordering strategy requires balancing of various cost factors to ensure the department incurs minimum inventory costs. The optimum inventory position is known as the Economic Reorder Quantity (ERQ) Analytical review of the inventories can help to identify areas where inventory management can be improved. Slow moving items, continual stock outs, obsolescence, are signals that stock lines need closer analysis and contro
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RECEIVABLES MANAGEMENT
A sound managerial control requires proper management of liquid assets and inventory.These assets are a part of working capital of the business. An efficient use of financial resources is necessary to avoid financial distress. Receivables result from credit sales . A concern is required to allow credit sales in order to expand its sales volume. Receivables constitute a significant portion of current assets of a firm. But for investment in receivables, a firm has to incur certain costs, Further, there is a risk of bad debts also. It is therefore very necessary to have a proper control and management of receivables. The following factors will help in forecasting receivables y y y y y Credit period allowed Effect of cost of goods sold Forecasting expenses Forecasting Average Collection period and discounts Average size of Receivables
The allowing of credit to customers means giving of funds for the customers use. The concern incurs the following costs on maintain receivables: y y y Cost of financing receivables Cost of collection Bad debts
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Debtors Turnover Ratio

Debtors turnover ratio = Net sales Debtors DEBTORS TURNOVER RATIO 8.90 7.79 7.46 5.08 4.59
YEAR 2004-05 2005-06 2006-07 2007-08 2008-09
NET SALES 7934.39 7998.07 9114.09 10118.62 12027.56
DEBTORS 891.42 1025.97 1220.42 1989.42 2616.75
Debtors Turnover Ratio

10 9 8 7 6 5 4 3 2 1 0 2005 2006 2007 2008 2009 Debtors Turnover Ratio
Debtors Turnover Ratio indicates the number of times debtors turnover each year. Higher the value of debtors turnover, the more efficient is the management of credit. Average collection period The average collection period measures the quality of debtors since it indicate the speed of their collection. The shorter average collection period, the better quality of debtors, since a short collection period implies the prompt payment by debtors. The average collection period should be
Compared against the firms credit terms and policy to judge its credit and collection efficiency Average collection period = No. of Working Days Debtors Turnover Ratio
YEAR
2004-05 2005-06 2006-07 2007-08 2008-09
NO. OF WORKING DEBTORS DAYS TURNOVER RATIO 365 8.90 365 7.79 365 7.46 365 5.08 365 4.59
AVERAGE COLLECTION PERIOD 41 47 49 72 79
The average collection period so calculated is compared with the firms stated credit period to judge the collection efficiency. An extended collection period delays cash inflows impairs the firms liquidity position and increases the chance of bad debt losses. The average collection period measures the quality y of receivables since it indicates the speed of their collectability. An excessively long collection period implies a very liberal and inefficient credit and collection performance. This certainly delays the collection of cash and impairs the firms liquidity. The chances of bad debt losses are also increased. On the other hand, too low
collection period is not necessarily favorable. Rather, it may indicate a very restrictive credit and collection period. The firm should consider relaxing its credit and collection policy to enhance the sales level and improve profitability. The collection period ratio helps to determine the collectability of debtors and thus, the efficiency of collection efforts.
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FINDINGS
1) There was an increasing trend in the working capital of KAMCO Ltd, the period under study 2) Inventory , cash and bank balance where the major parts of the current assets during the period under study . Cash and bank balance constitute highest position of the total current assets .It helps to keep the firm sufficiently liquid 3) Inventory conversion period shows the average time taken for clearing stokes .Here the inventory conversion period is decreasing .It is good for the company 4) Inventory turnover ratio of KAMCO Ltd.showing an increasing trend .Its favorable to the concern because it indicates the efficiency of the firm in producing & selling its product. 5) Trend analysis shows an increasing trend in the case of current assets and fluctuating trend in the case of current liabilities 6) Raw materials inventories show an increasing trend. It helps to maintain frequent production. 7) Working Capital turnover ratio indicates efficiency with which the working capital is being used by a firm . A higher ratio indicates efficient utilization of working capital. Here the companys working capital turnover ratio is showing an increasing trend, it indicates that the company is efficiently utilizing the working capital 8) Quick ratios and Current ratios of KAMCO Ltd show sound financial position and its ability to meet all current liabilities 9) Current ratios of KAMCO show sound solvency position and adequate working capital. In the year 2008-09 current ratio shows high i.e.7.04
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SUGGESTIONS
1. Debtors turnover ratio of KAMCO Ltd shows a decreasing trend. Here lower the value of debtors turnover indicates the inefficient management of credit . so the company should have to maintain an efficient of credit 2. Debtors collection period shows an increasing trend .It indicates the companys inefficient credit and collection performance .This certainly delays the collection of cash and impairs the firms liquidity .The changes of bad debt losses are also increased .So the company should try to form a good credit and collection policy 3. It is advisable to the management to take necessary steps to speed up receivables collection procedure in order to avoid blocking of funds 4. Finished goods inventories show a decreasing trend. So the company should have to maintain sufficient finished goods inventories for meeting the demand of customers regularly 5. Current liabilities of the company showing an increasing trend .So the company should try to reduce their current liabilities and increase the short term solvency position
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CONCLUSION
Working capital is the life blood of an organization so it must be handled carefully. Working capital is a key operational and financial driver, holding strong business risk and potentially huge opportunities. Optimal working capital management will guide business along the road to achieving their strategies while minimizing these risks and realizing the opportunities. In most markets, competition and innovation are a fact of life that means no firm can afford to stand still for long The analytical study of financial statements of KAMCO Ltd, Athani, has provided a lot of valuable information for critical analysis and interpreting the numerical facts in a systematic manner. The present study entitled Working Capital Management of KAMCO Ltd has thrown light on the various aspects of the company. There have been certain drawbacks which have been studied at appropriate places and suggestions have also been made. It can be helped that the present study may serve the purpose to some extend; it is not to a great extend.
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BIBLIOGRAPHY
1. I M PANDEY VIKAS PUBLISHING HOUSE PVT LTD (NINTH EDITION) 2. M Y KHAN& P K JAIN TATA MC GRAW HILL( THIRD EDITION) 3. S K GUPTHA & NEETHI GUPTHA, KALYANI PUBLISHERS 4. PRASANNA CHANDRA TATA MC GRAW HILLS PUBLISHERS CO LTD NEW DELHI 1997 5. S P JAIN & K L NARANG CORPORATE ACCOUNTING 6. C.R.KOTHARI RESEARCH METHODOLOGY (SECOND REVISED EDITION)
JOURNAL ANNUAL REPORT OF THE COMPANY WEBSITE www.kamcoindia.com
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CONTENTS
CHAPTER TITLE
PAGE NO
1.1 Introduction 1 1.2 Objectives of the study 1.3 Nature of the problem 1.4 Hypothesis 2.1 Introduction to the study History of the company Present status of the industry
2
1 2 3 4 5 5 6 7 8 9-10 11-20 21 22-23 24-32 33-34 35-36 37 38 38 39-77 78 79 80
Future scope of the industry 2.2 Profile of the organization History of the organization Present status of the organization Future scope of the organization
3.1 Literature review 3.2 Theoretical concept 4.1Research methodology 4.2Research process
4.3Variables under study 4.4 Period of the study 4.5Limitations
5.1Data analysis and interpretation 5.2Findings 6.1Suggestions 6.2Conclusion Bibliography Annexure
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LIST OF TABLES
TABLE NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Financial Highlight Current Ratio Quick Ratio Absolute Liquidity Ratio Debt Equity Ratio Proprietary Ratio Fixed Asset Turnover Ratio Working Capital Turnover Ratio Debtors Turnover Ratio Net Profit Ratio Return on Shareholders Fund Earning Per Share Trend Analysis Current Assets Trend Analysis of Current Liabilities Constituents of Current Assets Constituents of Current Liabilities Comparison of Current Assets& Current Liabilities Computation of Working Capital Statement of Changes in Working Capital as on 31st March 2005 Statement of Changes in Working Capital as on 31st March 2006 Statement of Changes in Working Capital as on 31st March 2007 Statement of Changes in Working Capital as on 31st March 2008 Statement of Changes in Working Capital as on 31stMarch 2009 TITLE PAGE NO 20 40 41 42 43 44 47 48 49 50 51 52 53 54 55 56 57 58 60 61 62 63 64
83
A Project Study on Working Capital Management of KAMCO Ltd. 24 25 26 27 28 29 30 31 Cash& Bank Raw Materials and Spares Finished Goods Work in Progress Inventory Turnover Ratio Inventory Conversion Period Debtors Turnover Ratio Average Collection Period 67 69 70 70 71 72 76 77
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LIST OF GRAPHS
Graph no .
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Title
Current Ratio Quick Ratio Absolute Liquidity Ratio Debt Equity Ratio Proprietary Ratio Fixed Asset Turn Over Ratio Working Capital Turn over Ratio Debtors Turn Over Ratio Net profit Ratio Return on Shareholders Fund Earning per Share Trend Analysis Current Assets Trend Analysis of Current Liabilities Constituents of Current Assets Constituents of Current Liabilities Comparison of Current Assets & Current Liabilities
Page no.
40 41 42 43 44 47 48 49 50 51 52 53 54 55 56 57
17 18 19 20 21 22 23
Computation of Working Capital Cash& Bank Raw Materials &Spares Fished Goods Work in Progress Inventory Turn over Ratio Debtors Turnover Ratio
58 67 69 70 70 71 76
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CHAPTER 1
86
CHAPTER 2
87
CHAPTER 3
88
CHAPTER 4
89
CHAPTER 5
90
BIBLIOGRAPHY
91
ANNEXURE
92
CHAPTER 6
93

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A Project Study on Working Capital Management of KAMCO Ltd.

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

OBJECTIVES OF THE STUDY

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

NATURE OF THE PROBLEM

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

INTRODUCTION TO THE INDUSTRY

HISTORY TO THE INDUSTRY

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

PRESENT STATUS OF THE INDUSTRY

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

FUTURE SCOPE OF THE INDUSTRY

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

PROFILE OF THE ORGANISATION

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

HISTORY OF THE ORGANISATION

Nirmala College of Information Technology, Chalakudy

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

PRESENT STATUS OF THE ORGANISATION

Organisation structure of KAMCO

Nirmala College of Information Technology, Chalakudy

Nirmala College of Information Technology, Chalakudy

Nirmala College of Information Technology, Chalakudy

4. KAMCO Agria Garden Tiller

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

Objectives of the company

Milestones of the Company

Business environment of KAMCO

Nirmala College of Information Technology, Chalakudy

Present Status of KAMCO

ISO 9001-2000 certification

A Project Study on Working Capital Management of KAMCO Ltd.

Quality Policy of KAMCO

Expansion and Diversification

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

6599.54 440.30 1.00 2.17 6.54 954.14

7558.47 475.64 2.01 11.28 4.75 1067.2

8.68 7.30 1168.73 4.46 1235.49

807.53 730.91 263.08 for 467.83

884.50 801.82 279.00 522.82

950.99 875.83 303.22 572.61

1015.97 933.16 307.61 625.55

1250.02 1169.40 44.88 764.52

Surplus transferred to 342.47 Balance sheet

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.

FUTURE SCOPE OF THE ORGANISATION

Nirmala College of Information Technology, Chalakudy

A Project Study on Working Capital Management of KAMCO Ltd.