Full Project On Working Cap

Working capital management at Vivek Agencies
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION
Page 1
TABLE NO.1: SHOWING TREND OF CURRENT ASSETS FOR 5 YEARS
PARTICULARS
2008
2009
2010
2011
2012
CURRENT ASSETS INVENTORIES 0 0 0 0 0
SUNDRY DEBTORS
2292
3093
3093
3244
4212
CASH AND BANK 5470 BALANCE LOANS ADVANCES TOTAL ASSETS AND 1199
6429
9039
9797
13665
2705
3164
3898
4867
CURRENT 8961
12227
15593
16939
22744
Page 2
ANALYSIS: It can be observed from the table and the chart that the trend for the sundry debtor, cash and bank balance, loans and advances has been increasing for all these years 2008-2012. The proper scrutiny of this trend is most important because this constitute the working capital of the company.
Page 3

GRAPH NO. 1: SHOWING TREND OF CURRENT ASSETS FOR 5 YEARS
25000
20000
15000
2008 2009
10000
2010 2011
5000
2012
0 inventories sundry debtors cash and bank balance loans and advances total current assets
INTERPRETATION: From the data above its we can see that the inventory is zero for all the financial years, but all the other like debtor, cash, loans are showing a increasing trend year by year. They should maintain this trend to make good working capital funds to support the companys future.
TABLE NO.2: SHOWING THE TREND OF CURRENT LIABILITES FOR 5 YEARS.
Page 4
PARTICULARS CURRENT LIABILITIES
2008
2009
2010
2011
2012
CURRENT LIABILITIES
1162
1334
1507
1763
1880
PROVISION
663
2397
1763
2035
2473
TOTAL CURRENT LIABILITIES
1825
3731
3270
3798
4353
Page 5
ANALYSIS: It can be observed from the table that the trend for the CURRENT LIABILITIES has been increasing for all these years 2008-2012, but PROVISION decreased in the year 2010 then started to rise again. This trend is most important because this constitute the working capital of the company and has a direct bearing on its level. They need to decrease their current liabilities for more profit.
GRAPH NO. 2: SHOWING THE TRENDS OF CURRENT LIABILITES FOR 5 YEARS
Page 6

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2008 2009 2010 2011 2012 current liabilities provision total current liabilities
INTERPRETATION: The current liabilities of the company need to be reduced because if it is low its favorable for the growth of the company and the current assets should be more. So they should try important measures to reduce their liabilities.
TABLE NO. 3: SHOWING THE COMPOSITION OF CURRENT ASSETS FOR 5 YEARS
Page 7

ELEMENTS SUNDRY DEBTORS 2008 % 2009 % 2010 % 2011 % 2012 % 18.51
2292 25.57 3093
25.29 3093
19.83 3244
19.15 4212
CASH AND 5470 61.04 6429 BANK BALANCE LOANS AND ADVANCES TOTAL CURRENT ASSETS 1199 13.38 2705
52.58 9039
57.96 9797
57.83 13665 60.08
22.12 3164
20.29 3898
23.01 4867
21.39
8961
12227
15593
16939
22744
Page 8
ANALYSIS: In this sundry debtor ratio is showing a decreasing trend, cash and bank balance decreased in 2009 then started increasing, loans and advances decreased a bit in 2010 and 2012. So they need to improve in certain areas where the % was decreasing to improve.
GRAPH NO. 3: SHOWING THE COMPOSITION OF CURRENT ASSETS FOR 5 YEARS.
Page 9

70 60 50 40 30 20 10 0 2008 2009 2010 2011 2012 sundry debtors% cash and bank balances% loans and advances%
INTERPRETATION: Cash and bank balance has a very good position in company, debtor is constant for 1st 2 years then decreasing year by year, loans and advances are bit low in 2008 then it improved in next year, but in 2010 it came down by some points, then in 2011 again increased and then again decreased in the year 2012.
TABLE NO.4: SHOWING THE COMPOSITION OF CURRENT LIABILITIES.
Page 10

ELEMENTS 2008 % 2009 % 2010 % 2011 % 2012 %
CURRENT LIABILITIES
1162
63.67
1334
35.75
1507
46.08
1763
46.41
1880
43.18
PROVISION
663
36.32
2397
64.24
1763
53.91
2035
53.58
2473
56.81
TOTAL CURRENT LIABILITIES
1825
3731
3270
3798
4353
Page 11
ANALYSIS: Percentage of current liabilities decreased from the first then started increasing bit by bit and was almost constant for the last 3 years and provision increased in 2 year but was constant for the last 3 years.
GRAPH NO 4: SHOWING THE COMPOSITION OF CURRENT LIABILITIES.
70 60 50 40 current liabilities% 30 20 10 0 2008 2009 2010 2011 2012 provision%
Page 12
INTERPRETATION: Liabilities in year 2008 were more which is bad but later it has decreased and has come to a favorable state. Provisions where more in the year 2009 but later it decreased but they still need to work on it to reduce further more which can be beneficiary. CURRENT RATIO: Current Assets Current Ratio Current Liabilities
TABLE NO.5: SHOWING CHANGES IN CURRENT RATIO FOR 5 YEARS Year Current Assets Current liabilities Current Ratios
2008
8961
1824
4.912828947
2009
12227
3731
3.277137497
2010
15593
3305
4.718003026
Page 13

2011 16939 3798 4.459978936
2012
22,744
4353
5.224902366
ANALYSIS: In 2008 current assets is 8961 and a current liability is 1824 and Ratio is 4.912828947. In 2009 current assets is 12227 and a current liability is 3731 and Ratio is 3.277137497. In 2010 current assets is 15593 and a current liability is 3305 and Ratio is 4.718003026. In 2011 current assets is 16939 and a current liability is 3798 and Ratio is 4.459978936. In 2012 current assets is 22,744 and a current liability is 4353 and Ratio is 5.224902366. The current ratio is good they need to maintain it.
Page 14
GRAPH NO. 5: SHOWING CHANGES IN CURRENT RATIO FOR 5 YEARS
current ratio
6 5 4 3 2 1 0 2008 2009 2010 current ratio 2011 2012 current ratio
INTERPRETATION:
Page 15

The current Ratio of the company in the financial year 2008-2012 was pretty good. It was a bit low during the year 2009 but then it increased and came to a good position. Current ratio below the standard level, for any firm would mean a low working capital position. So they should maintain their current ratio
QUICK OR ACID TEST RATIO:
Quick or liquid assets Quick ratio = ---------------------------Current liabilities
TABLE NO.6: SHOWING CHANGES IN QUICK RATIO FOR 5 YEARS
Year
Quick Assets
Current liabilities
Quick Ratios
2008
8961
1824
4.912828947
2009
12227
3731
3.277137497
2010
15593
3305
4.718003026
2011
16939
3798
4.459978936
2012
22,744.00
4353
5.224902366
Page 16
ANALYSIS: In 2008 quick assets is 8961 and a current liability is 1824 and ratio is 4.912828947. In 2009 quick assets is 12227 and a current liability is 3731 and ratio is 3.277137497. In 2010 quick assets is 15593 and a current liability is 3305 and ratio is 4.718003026. In 2011 quick assets is 16939 and a current liability is 3798 and ratio is 4.459978936. In 2012 quick assets is 22,744 and a current liability is 4353 and ratio is 5.224902366 Quick ratio is good, they need to maintain.
Page 17
GRAPH NO.6: SHOWING CHANGES IN QUICK RATIO FOR 5 YEARS
6 5 4 3 2 1 0 quick ratio 2008 2009 2010 2011 2012
2008 2009 2010 2011 2012
INTERPRETATION: The standard Quick Ratio is said to be 1:1. From the above shown chart it is clear that the Quick ratio of all the 5 years is more than the standard ratio. The company has seen a continuous up in the Quick ratio. The company is in good position, they need to maintain it.
ABSOLUTE LIQUID RATIO:

Page 18

Absolute Liquid Assets Absolute Liquid Ratio: Current Liabilities
TABLE NO.7: SHOWING CHANGES IN ABSOLUTE LIQUID RATIO FOR 5 YEARS Year Absolute Assets 2008 6669 1824 3.65625 Liquid Current liabilities Absolute Ratio
2009
9134
3731
2.448137229
2010
12203
3305
3.692284418
2011
13695
3798
3.605845182
2012
18,532.00
4353
4.25729382
Page 19
ANALYSIS: In 2008 absolute liquid assets is 6669 and a current liability is 1824 and ratio is 3.65625. In 2009 absolute liquid assets is 9134 and a current liability is 3731 and ratio is 2.448137229. In 2010 absolute liquid assets is 12203 and a current liability is 3305 and ratio is 3.692284418. In 2011 absolute liquid assets is 13695 and a current liability is 3798 and ratio is 3.605845182. In 2012 absolute liquid assets is 18,532.00 and a current liability is 4353 and ratio is 4.25729382. Absolute liquid ratio is good they need to maintain it.
GRAPH NO.7: SHOWING CHANGES IN ABSOLUTE LIQUID RATIO FOR 5 YEARS
Page 20

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 absolute liquid ratio 2008 2009 2010 2011 2012
INTERPRETATION: The company maintains a good absolute liquidity ratio. It has absolute liquidity more than 0.75 in all the five financial years which is considered as standard ratio. But company is increasing the Ratio from year by year hoping they will raise the ratios in coming years. It was a bit low in the year 2009 but still not lower than the standard ratio.So they should try to maintain it.
Debtors/Receivable Turnover Ratio:
Total Sales Debtors Turnover Ratio = Debtors
Page 21
TABLE NO.8: SHOWING CHANGES IN DEBTORS TURNOVER RATIO FOR 5 YEARS
Year
Total Sales
Debtors
Debtors Ratio
Turnover
2008
13149
2292
5.736910995
2009
15648
3093
5.059165858
2010
20264
3390
5.977581121
2011
21140
3244
6.516646116
2012
25,385
4212
6.02682811
ANALYSIS:
In 2008 total sales is 13149 and debtors is 2292 and debtors turnover ratio is 5.736910995.
Page 22

In 2009 total sales is 15648 and debtors is 3093 and debtors turnover ratio is 5.059165858. In 2010 total sales is 20264 and debtors is 3390 and debtors turnover ratio is 5.977581121. In 2011 total sales is 21140 and debtors is 3244 and debtors turnover ratio is 6.516646116. In 2012 total sales is 25,385 and debtors is 4212 and debtors turnover ratio is 6.02682811.
GRAPH NO.8: SHOWING CHANGES IN DEBTORS TURNOVER RATIO FOR 5 YEARS
Page 23
7 6 5 4 3 2 1 0 debtors turnover ratio 2008 2009 2010 2011 2012
INTERPREATION: The company had received good debtor collection in 2008 but it decreased in next year and again company maintained and increased their collection from 2010. The company has to control the fluctuations and need to increase their debtors for the future.
Working capital turnover ratio: Net working capital = current assets current liabilities
Net Sales Working capital turnover ratio = --------------------------Net working capital
Page 24
TABLE NO.9: SHOWING CHANGES IN WORKING CAPITAL TURNOVER RATIO FOR 5 YEARS
Year
Net Sales
Working Capital
Working Turnover ratio
Capital
2008 2009 2010 2011 2012
13149 15648 20264 21140 25,385.00
7137 8496 12288 13141 18391
1.842370744 1.84180791 1.649088542 1.608705578 1.380294709
Page 25
ANALYSIS: In 2008 sales is 13149 and net working capital is 7137 and working capital turnover ratio is 1.842370744. In 2009 sales is 15648 and net working capital is 8496 and working capital turnover ratio is 1.84180791. In 2010 sales is 20264 and net working capital is 12288 and ratio working capital turnover is 1.649088542. In 2011 sales is 21140 and net working capital is 13141 and ratio working capital turnover is 1.608705578. In 2012 sales is 25,385 and net working capital is 18391 and ratio working capital turnover is 1.380294709. They need to maintain it for the upcoming ratio.
Page 26
GRAPH NO.9: SHOWING CHANGES IN WORKING CAPITAL TURNOVER RATIO FOR 5 YEARS
2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 working capital turnover ratio 2008 2009 2010 2011 2012
INTERPRETATION: From the above chart it is clearly known that the working capital turnover ratio is not much efficient in the company. As we see the ratio of turnover is showing decreasing trend year by year, which is not a good indicator to the management of the company.
Fixed asset turnover ratio:

Page 27
Net sales Fixed assets turnover ratio = --------------------Net fixed assets Net fixed assets = Value of assets Depreciation TABLE NO.10: SHOWING CHANGES IN FIXED ASSET TURNOVER RATIO FOR 5 YEARS
Year
Net Sales
Net Fixed Assets
Fixed
Assets
Turnover Ratio 2008 13149 3107 4.232056646
2009
15648
3931
3.980666497
2010
20264
4414
4.590847304
2011
21140
4188
5.047755492
2012
25,385.00
4555
5.572996707
Page 28
ANALYSIS: In 2008 Net sales is 13149 and net fixed assets is 3107 and fixed asset turnover ratio is 4.232056646. In 2009 Net sales is 15648 and net fixed assets is 3931 and fixed asset turnover ratio is 3.980666497. In 2010 Net sales is 20264 and net fixed assets is 4414 and fixed asset turnover ratio is 4.590847304. In 2011 Net sales is 21140 and net fixed assets is 4188 and fixed asset turnover ratio is 5.047755492. In 2012 Net sales is 25,385 and net fixed assets is 4555 and fixed asset turnover ratio is 5.572996707.
Page 29
GRAPH NO.10: SHOWING CHANGES IN FIXED ASSET TURNOVER RATIO FOR 5 YEARS
6 5 4 3 2 1 0 fixed asset turnover ratio
2008 2009 2010 2011 2012
INTERPREATION: From the above chart it is clearly known that the fixed assets turnover ratio is efficient in the company. As we see the ratio of turnover is showing variable trend year by year. The chart shows that company is utilizing its fixed assets efficiently. But in last three years its showing a good increment in the Fixed Assets. By increasing fixed asset company may secure its future.
Page 30

Total assets turnover ratio:
Net sales Total assets turnover ratio = --------------------Total assets
TABLE NO.11: SHOWING CHANGES IN TOTAL ASSET TURNOVER RATIO FOR 5 YEARS
Page 31
Year
Net Sales
Total Assets
Total Assets Turnover Ratio
2008
13149
11162
1.178014693
2009
15648
13490
1.159970348
2010
20264
17809
1.137851648
2011
21140
22036
0.959339263
2012
25385
24501
1.03608016
ANALYSIS:
Page 32

In 2008 Net sales is 13149 and total assets is 11162 and total assets turnover ratio is 1.178014693. In 2009 Net sales is 15648 and total assets is 13490 and total assets turnover ratio is 1.159970348. In 2010 Net sales is 20264 and total assets is 17809 and total assets turnover ratio is 1.137851648. In 2011 Net sales is 21140 and total assets is 22036 and total assets turnover ratio is 0.959339263. In 2012 Net sales is 25,385 and total assets is 24501 and total assets turnover ratio is 1.03608016.
The total assets are continuously increasing year by year which is good for company; the company should to maintain the ratio to increase their total assets and to improve the position of the company.
GRAPH NO.11: SHOWING CHANGES IN TOTAL ASSET TURNOVER RATIO FOR 5 YEARS
Page 33
1.2 1 2008 0.8 0.6 0.4 0.2 0 total asset turnover ratio 2009 2010 2011 2012
INTERPREATION: The total assets utilization of the company is quite efficient during the five years. The total assets turnover ratio shows the variable trend. Total assets are continuously decreasing year by year which is not good for company, to maintain the position of the company the company needs to increase the assets in coming years.
Gross profit ratio: Gross profit ratio measures the relationship of gross profit to net sales and is usually represented as a percentage. Thus, it is calculated by dividing the gross profit by sales. Gross profit Gross profit ratio = _______________X100
Page 34

Net sales
TABLE NO.12: SHOWING CHANGES IN GROSS PROFIT RATIO FOR 5 YEARS
YEAR
GROSS PROFIT
NET SALES
GROSS RATIO
PROFIT
2008
7137
13149
54.27789185
2009
8496
15648
54.29447853
2010
12288
20264
60.63955784
2011
13141
21140
62.16177862
2012
18391
25,385.00
72.44829624
Page 35
ANALYSIS: In 2008 Gross profit is 7137 and Net sales are 13149 and Gross profit ratio is 54.27789185. In 2009 Gross profit is 8496 and Net sales are 15648 and Gross profit ratio is 54.29447853. In 2010 Gross profit is 12288 and Net sales are 20264 and Gross profit ratio is 60.63955784. In 2011 Gross profit is 13141 and Net sales are 21140 and Gross profit ratio is 62.16177862. In 2012 Gross profit is 18391 and Net sales are 25385 and Gross profit ratio is 72.44829624.
Page 36

GRAPH NO.12: SHOWING CHANGES IN GROSS PROFIT RATIO FOR 5 YEARS
80 70 60 50 40 30 20 10 0 gross profit ratio 2008 2009 2010 2011 2012
INTERPRETATION: It reflects the efficiency with which a firm produces its products. Higher the gross profit ratio better the result of the company, and in this case in first two years(2008-2009) the company had almost constant ratio, but it increased in 2010 and after a small decrease in 2011 it went back higher in the year 2012.
Page 37
EXPENSES RATIOS: Expenses ratio indicates the relationship of expenses to net sales. The lower the ratio, the greater is the profitability and higher the ratio, lower is the profitability. EXPENSE Expense ratio = ________________x100 NET SALES TABLE NO.13: SHOWING CHANGES IN EXPENSE RATIO FOR 5 YEARS
YEAR
EXPENSE
NET SALES
EXPENSE RATIO(%)
2008 2009 2010 2011 2012
8908 10669 13730 13781 16970
13149 15648 20264 21140 25,385.00
67.7465967 68.18123722 67.75562574 65.18921476 66.85050227
Page 38
ANALYSIS: In 2008 Expense is 8909 and Net sales are 13149 and Expense ratio is 67.7465967. In 2009 Expense is 10669 and Net sales are 15648 and Expense ratio is 68.18123722. In 2010 Expense is 13730 and Net sales are 20264 and Expense ratio is 67.75562574. In 2011 Expense is 13781 and Net sales are 21140 and Expense ratio is 65.18921476. In 2012 Expense is 16970 and Net sales are 25385 and Expense ratio is 66.85050227.
Page 39
GRAPH NO.13: SHOWING CHANGES IN EXPENSE RATIO FOR 5 YEARS

68.5 68 67.5 67 66.5 66 65.5 65 64.5 64 63.5 expense ratio 2008 2009 2010 2011 2012
INTERPRETATION: Lower the ratio, the greater is the profitability and higher the ratio, lower is the profitability hence by seeing the Expense ratios of the company we understand that the companies Expenses are very high so the company should take measures to get these values down.
Page 40
NET PROFIT RATIO: Net profit ratio = net profit after tax X100 Net sales
TABLE NO.14: SHOWING CHANGES IN NET PROFIT RATIO FOR 5 YEARS
Page 41
YEAR
NET PROFIT NET SALES AFTER TAX
NET RATIO
PROFIT
2008
3783
13149
28.77024869
2009
4470
15648
28.56595092
2010
5819
20264
28.71594947
2011
5803
21140
27.45033113
2012
6443
25,385.00
25.38113059
ANALYSIS:
Page 42

In 2008 net profit is 8909 and Net sales are 13149 and Expense ratio is 28.77024869 In 2009 net profit is 4470 and Net sales are 15648 and Expense ratio is 28.56595092. In 2010 net profit is 5819 and Net sales are 20264 and Expense ratio is 28.71594947. In 2011 net profit is 5803 and Net sales are 21140 and Expense ratio is 27.45033113. In 2012 net profit is 6443 and Net sales are 25385 and Expense ratio is 25.38113059
Page 43

GRAPH NO.14: SHOWING CHANGES IN NET PROFIT RATIO FOR 5 YEARS.
30000 25000 20000 net sales 15000 10000 5000 0 2008 2009 2010 2011 2012 net profit net profit ratio
INTERPRETATION: The higher the net profit is, the more effective the company is at converting revenue into actual profit. They need to work on this ratio so that they can increase it with the period of time so that the company can run for a long term. In this case the ratio was almost the same in all years, they need to work hard on this to increase.
Page 44

CASH PROFIT RATIO:
CASH PROFIT RATIO = CASH PROFIT X 100 NET SALES CASH PROFIT = NET PROFIT + DEPRECIATION
TABLE NO.15: SHOWING CHANGES IN CASH PROFIT RATIO FOR 5 YEARS
YEAR
CASH PROFIT
NET SALES
CASH PROFIT RATIO
2008
4252
13149
32.33705985
2009
5016
15648
32.05521472
2010
6513
20264
32.1407422
2011
6610
21140
31.26773888
2012
7183
25,385.00
28.29623794
ANALYSIS: In 2008 cash profit is 4252 and Net sales are 13149 and cash profit ratio is 32.33705985.
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In 2009 cash profit is 5016 and Net sales are 13149 and cash profit ratio is 32.05521472. In 2010 cash profit is 6513 and Net sales are 20264 and cash profit ratio is 32.1407422. In 2011 cash profit is 6610 and Net sales are 21140 and cash profit ratio is 31.26773888. In 2012 cash profit is 7183 and Net sales are 25,385 and cash profit ratio is 28.29623794.
GRAPH NO.15: SHOWING CHANGES IN CASH PROFIT RATIO FOR 5 YEARS
Page 46

33 32 31 2008 30 29 28 27 26 cash profit ratio 2009 2010 2011 2012
INTERPRETATION: Cash profit ratio is decreasing year by year it was maximum only in the 1 st year then it kept on decreasing and it was minimum in the year 2012. So they need to put suitable methods into action so that the company can once again come up with good cash profit ratio.
Page 47

TABLE NO.16: SHOWING THE WORKING CAPITAL OF 5 YEARS
2008
2009
2010
2011
2012
CURRENT ASSETS
8961
12227
15593
16939
22744
CURRENT LIABILITIES
1824
3731
3305
3798
4353
WORKING CAPITAL
7137
8496
12288
13141
18391
ANALYSIS: Working capital of the company is showing increasing trend because in all the years from starting the company had more current assets then the current liabilities. So they have good working capital with which they can pay their debt and can improve the image of the company. They need to maintain it in the upcoming years too.
Page 48
GRAPH NO.16: SHOWING THE WORKING CAPITAL FOR 5 YEARS

25000
20000
15000
current assets current liabilities
10000
working capital
5000
0 2008 2009 2010 2011 2012
INTERPRETATION: Working capital of the company is increasing every year so they have bright future they need to maintain this in the upcoming years also, to do this they need to increase their current assets and decrease their current liabilities.
Page 49
5.1. FINDINGS: Working capital of the company has been increasing continuously, which is good for the company because it means that the company is utilizing the capital correctly and they need more capital to be invested for the future of the company. Positive working capital as shown in the Table & graph NO.16 indicates that company has the ability of payment of short terms liabilities. Working capital increased in Table & graph NO.16 because of increment in the current assets more than the current liabilities. Current ratio of the company is also good which means the companys liquidity is good, the ideal ratio of current ratio is 2:1 but in this case every year it is more than the standard ratio which is good for the company. Recommended absolute liquidity ratio of the company is 0.75:1, but they had always above the standard ratio which is good for the company, as shown in the table & graph no.7. Debtors turnover ratio is improving from 2007-08 to 2010-11. Increase in ratio is beneficial for the company because as ratio increases the number of days of collection for debtors decreases. Fixed assets turnover ratio is also in good position which means the company is utilizing the fixed assets efficiently. Total assets turnover ratio is decreasing year by year which is not good for the company. Gross profit ratio of the company is good as it is increasing year by year.
Page 50

Expense ratio of the company is too much it bad for the companys future. Net profit ratio is not to good, they need to come up with new ideas to boost up their net profit ratio. Cash profit ratio is also not that good; they need to practice good and efficient decisions to make it more profitable.
5.2. SUGGESTIONS: Company has to control on cash balance because cash is non earning assets and increasing cost of funds. Company should reduce the inventory holding period with use of zero inventory concepts. Company should take control on debtors collection period which is major part of current assets. The current assets should be managed more effectively so as to avoid unnecessary blocking of capital that could be used for other purposes. Awareness level of the company should be increased, so that people get more awareness of all the benefits, and features and get to use them. They can realize the full potential only when they are better informed. There must be highly qualified professionals to guide the company or decide the objectives of the company to be fulfilled in the long run. Investment in the business shall be increased to earn more business. Education camps should be arranged to show what new technology has been introduced in the particular medicine and how is it going to effect the life of the people. Marketing strategy should be good because if the marketing is not good then the customer may have difficulty in understanding the product.
Page 51

Services to the customers should be improved so that the customer feels that they are being treated well. Complete information should be provided to the manager about the working of the company so that he can act accordingly and solve the problems if they occur in future. The company can maintain separate books of accounts for their manufacturing and trading businesses for more clarity and transparency in operations.
5.3. CONCLUSION: Working capital is a measure of the firm's ability to streamline its operations to generate cash as quickly as possible. When understood in this light, less is actually more. Our CFO services help companies get their arms around this concept and maximize their cash flow. Business is, ultimately, about cash generation. The working capital cycle of a business can either gobble up more than its fair share of cash or it can be managed as an efficient cash flow system. If managed, it can become one of the company's most significant competitive advantages Working capital increased because of increment in the current assets more than the current liabilities. So they need to maintain it to be in good profitability position. Net profit ratio is not too good; they need to come up with new ideas to boost up their net profit ratio. Gross profit ratio of the company is good as it is increasing year by year. The overall position of the company is satisfactory, but needs to improve in certain areas
Page 52

6: BIBLIOGRAPHY
: BOOKS WRITER PUBLICATION
Page 53

Management accounting B.S. Raman Kalyani publication
Financial Management
P.N. Reddy H.R Appendix B.G. Satyr prasad
Himalaya House
Publishing
6.1. BOOKS
6.2. WEBSITE: www.google.com www.scribd.org www.planware.org www.wikipedia.com
CHAPTER 7: ANNEXURE
Page 54
7.1. BALANCE SHEET: Particular Share Capital Reserves & Surplus Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities Application of Funds Fixed Assets Gross Block Less : Accumulated Depreciation Provision for impairment of Assets Net Fixed Assets Capital Work In Progress Total Fixed Assets 6934 2878 6357 2578 5986 2187 4508 1837 3889 1739 2012 287 24214 2011 287 21749 2010 286 17523 2009 286 13204 2008 286 10876
24501
22036
17809
13490
11162
0 0 0 24501
0 0 0 22036
0 0 0 17809
0 0 0 13490
0 0 0 11162
4056 499
3779 409
3799 615
2671 1260
2150 957
4555
4188
4414
3931
Page 55
3107

Investments Current Assets Inventories Sundry Debtors Cash & Bank Balances 0 4212 13665 0 3244 9797 0 3390 9039 0 3093 6429 0 2292 5470 1325 4626 1005 964 839
Loans & Advances Total Current Assets Current Liabilities & Provisions Current Liabilities Provisions Total Current Liabilities & Provision Net Current Assets Miscellaneous Expenditure written off Total Assets
4867 22744
3898 16939
3164 15593
2705 12227
1199 8961
1880 2473 4353
1763 2035 3798
1507 1798 3305
1334 2397 3731
1162 662 1824
18391 0
13141 0
12288 0
8496 0
7137 0
24501
22036
17809
13490
11162
Page 56

7.2. PROFIT AND LOSS :
Particulars Income Income Operations Other Income Increase/Decrease Stocks Total Income Expenditure Total Expenditure Operating Profit Interest Gross Profit Depreciation Profit Before Tax Provision for Tax Deferred Tax Fringe Benefit Tax Net Profit
2012
2011
2010
2009
2008
from 25385
21140
20264
15648
13149
1147 in 0
970 0
876 0
685 0
381 0
26532
22110
21140
16333
13530
16970 9562 1 9561 740 8821 2521 -143 0 6443
13781 8329 2 8327 807 7520 1696 21 0 5803 0
13730 7410 2 7408 694 6714 898 -3 0 5819 0
10669 5664 1 5663 546 5117 650 -20 17 4470 0
8908 4622 1 4621 469 4152 375 -23 17 3783 1
Adjustments Below Net 0 Profit Profit & Loss Brought 13806 Forward
10305
6642
4844
2195
Page 57

Appropriations 4658 2302 13806 2156 10305 2672 6642 1133 4844
Profit & Loss Carried 15591 Forward EPS (in Rs) Book Value (in Rs) 112.25 426.85
101.1 383.9 0
101.73 311.35 0
78.15 235.84 0
66.14 195.14 0
Preference Dividend (in 0 Rs) Equity Dividend in % Equity (Rs.) Dividend 1200 in 3445
500 1434
470 1345
665 1902
230 649
Corporate Tax
Dividend 568
240
228
323
102
Contingent Liability Extra-Ordinary Items
3491 0
2377 48
2714 0
3261 0
672 6
Page 58

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Working capital management at Vivek Agencies

CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION

Working capital management at Vivek Agencies

TABLE NO.1: SHOWING TREND OF CURRENT ASSETS FOR 5 YEARS

CURRENT ASSETS INVENTORIES 0 0 0 0 0

Working capital management at Vivek Agencies

Working capital management at Vivek Agencies

TABLE NO.2: SHOWING THE TREND OF CURRENT LIABILITES FOR 5 YEARS.

Working capital management at Vivek Agencies

PARTICULARS CURRENT LIABILITIES

TOTAL CURRENT LIABILITIES

Working capital management at Vivek Agencies

GRAPH NO. 2: SHOWING THE TRENDS OF CURRENT LIABILITES FOR 5 YEARS

Working capital management at Vivek Agencies

TABLE NO. 3: SHOWING THE COMPOSITION OF CURRENT ASSETS FOR 5 YEARS

Working capital management at Vivek Agencies

2292 25.57 3093

57.83 13665 60.08

Working capital management at Vivek Agencies

GRAPH NO. 3: SHOWING THE COMPOSITION OF CURRENT ASSETS FOR 5 YEARS.

Working capital management at Vivek Agencies

TABLE NO.4: SHOWING THE COMPOSITION OF CURRENT LIABILITIES.

Working capital management at Vivek Agencies

TOTAL CURRENT LIABILITIES

Working capital management at Vivek Agencies

GRAPH NO 4: SHOWING THE COMPOSITION OF CURRENT LIABILITIES.

70 60 50 40 current liabilities% 30 20 10 0 2008 2009 2010 2011 2012 provision%

Working capital management at Vivek Agencies

Working capital management at Vivek Agencies

Working capital management at Vivek Agencies

GRAPH NO. 5: SHOWING CHANGES IN CURRENT RATIO FOR 5 YEARS

Working capital management at Vivek Agencies

QUICK OR ACID TEST RATIO:

Quick or liquid assets Quick ratio = ---------------------------Current liabilities

TABLE NO.6: SHOWING CHANGES IN QUICK RATIO FOR 5 YEARS

Working capital management at Vivek Agencies

Working capital management at Vivek Agencies

GRAPH NO.6: SHOWING CHANGES IN QUICK RATIO FOR 5 YEARS

6 5 4 3 2 1 0 quick ratio 2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

ABSOLUTE LIQUID RATIO:

Working capital management at Vivek Agencies

Working capital management at Vivek Agencies

GRAPH NO.7: SHOWING CHANGES IN ABSOLUTE LIQUID RATIO FOR 5 YEARS

Working capital management at Vivek Agencies

Debtors/Receivable Turnover Ratio:

Total Sales Debtors Turnover Ratio = Debtors

Working capital management at Vivek Agencies

TABLE NO.8: SHOWING CHANGES IN DEBTORS TURNOVER RATIO FOR 5 YEARS

Working capital management at Vivek Agencies

GRAPH NO.8: SHOWING CHANGES IN DEBTORS TURNOVER RATIO FOR 5 YEARS

Working capital management at Vivek Agencies

7 6 5 4 3 2 1 0 debtors turnover ratio 2008 2009 2010 2011 2012

Net Sales Working capital turnover ratio = --------------------------Net working capital

Working capital management at Vivek Agencies

Working Turnover ratio

2008 2009 2010 2011 2012

13149 15648 20264 21140 25,385.00

7137 8496 12288 13141 18391

1.842370744 1.84180791 1.649088542 1.608705578 1.380294709

Working capital management at Vivek Agencies

Working capital management at Vivek Agencies

Fixed asset turnover ratio: