1

CHAPTER 1
INTRODUCTION

The apparel and textile industry occupies a unique and important place in India.
One of the earliest industries to come into existence in the country, the sector accounts
for 14% of the total Industrial production, conduces to about 30% of the total exports and
is the second largest employment creator after agriculture.

The apparel and textile industry caters to one of the most basic requirements of
people and holds importance; maintaining the prolonged growth for improved quality of
life. The sector has a unique position as a self-reliant industry, from the production of raw
materials to the delivery of end products, with considerable value-addition at every stage
of processing. Over the years, the sector has proved to be a major contributor to nations'
economy.

Its immense potential for generation of employment opportunities in the
industrial, agricultural, organized and decentralized sectors & rural and urban areas,
especially for women and the disadvantaged is noteworthy.

1.1 COMPANY PROFILE

CENTURY APPARELS [P] LTD started with the aim of producing high quality
hosiery garments. The company was incorporated on 24
th
Dec 1989. The company started
its exporting activities from 1992. The founders of the company was Roopan David and
Neelam Roopan.

The quantity and timely delivery of the order attracted buyers around the globe.
Due to continuous hard work had achieved a turnover of around 75 crores per annum,
presently its exports to prestigious buyers from European countries. The Projected
2

average annual turnover for the next five years is Euro 20000000. The company has
three branches in Tirupur and one in Coimbatore.



CENTURY APPARELS is adopting a strict quality control method at the time of
purchasing quality yarn. The fabric is knitted with; the help of leading branded machines.
The company also entrust job work to quality knitters for all kinds of fabrics like jersey,
interlock, pique, jacquard engineering stripes etc.

CENTURY APPARELS has around 500 machineries and equipments. It
employed around 1000 employees. The main buyers are Cutter & Buck, Dockers,
Vantage, Espirit, LemonNOrange, Oliver, etc.The products produced in CENTURY
APPARELSs are Mens wear , Ladies wear, Childrens wear, Sports wear, Bermudas,
Pants, Shirts etc.,

3

The organization has its own building for carrying out the manufacturing process.
It also has own vehicles for transportation purpose. The organization provides the canteen
facility to the workers. It was started as small company. It has been developing with
technologies. The company has several departments such as production department,
purchase department, human resource department.

The production department starts their function from fabric to a garment. During
is it undertakes several functions such as knitting, dyeing and bleaching, compacting,
cutting, printing, embroidering, sewing, trimming and checking, ironing and packing.
After this the garment will be exported to foreign countries.

The company has latest equipments like Qwick track and other material
movement systems (from Malaysia and Sri Lanka) and air-cooling systems (from
Australia). Modern computerised sewing machines from Japan and ironing systems
from Italy. State of the art modern safe and healthy work place considered to be the best
in India. The company also has house printing (MHM Austria) and Embroidery (Tajima
Japan) along with Laser bridge (Proel Italy) and automatic spreading , CAD & cutting
(FK, Italy).

CERTIFICATIONS
Control union certification for manufacturing textile under EKO sustainable
textile standards.
GOTS standards for organic cotton by Control Union Certifications.
SA8000 certification approved by ITS.
SME Rating Agency of India Ltd (SMERA) rating of 3 in a scale of 1 to 8 for
financial management practices.
Government of India recognised Export house status.
Standards as per ILO norms and as per Factories Act.
SA8000 certification.

4

Chart 1.1 :ORGANIZATION CHART OF CENTURY APPARELS

Managing Director



General Manager


Administration Department




Finance Purchase Production Merchandising H R
Dept Dept Dept Dept Dept



Accounts Purchase Production Assistant Merchandiser H R
. Officer Supervisor Officer Officer



Cashier Assistant Supervisors Junior Merchandiser Clerks
Supervisor



Clerks Staffs & Workers
Employees
5


VISION AND MISSION

To be a bench mark in creating and delivering value to all our stakeholders.
To develop an ethical business model and strategy which is customer focussed ,
growth oriented, and adaptable for change
To develop strategic business partnerships and transform our supply chain into a
collaborative community of synchronized activities.
To empower all employees and motivate and train them through the best HR
practises, to develop team spirit and promote continuous learning .
To develop a pragmatic IT and communications network and make technology
and ERP the backbone of the organisation.
To synergize the above mentioned good business practises keeping in mind our
corporate social responsibility, and the values we stand for.


NAME OF AUTHORI TY DESI GNATI ON
MRS. NEELAM ROOPAN CEO
MR. ROOPAN DAVID MANAGING DIRECTOR
MR. ASHOK KUMAR GENERAL MANAGER
MR.MOHANRAJ HR MANAGER
MR. GURU KRISHNAN.M ACCOUNTS MANAGER
MR. MOHAN MERCHANDISING HEAD
MR.GUNA SEKARAN PRODUCTION MANAGER
MR.VIGNESH KUMAR PURCHASE MANAGER
6

Chart 1.2 MANUFACTURING PROCESS IN CENTURY APPARELS
























YARN
KNITTING
DYING
CUTTING
PACKING
STITCHING
CHECKING
IRONING
7

1. KNITTING
Knitting is a method by which thread or yarn may be turned into cloth or other
fine crafts. Knitted fabric consists of consecutive loops, called stitches. As each row
progresses, a new loop is pulled through an existing loop. The active stitches are held on
a needle until another loop can be passed through them. This process eventually results in
a final product, often a garment. Knitting may be done by hand or by machine. There
exist numerous styles and methods of hand knitting.
Different yarns and knitting needles may be used to achieve different end
products by giving the final piece a different colour, texture, weight, and/or integrity.
Using needles of varying sharpness and thickness as well as different varieties of yarn
can also change the effect.

2. DYEING
Dyeing is the process of coloring textile material by immersing them in an
aqueous solution of dye called DYE LIQUOR. Normally the dye liquor consists of dye.
Water and auxiliary to improve the effectiveness on dyeing .
The theory of dyeing explains the interaction between dye, fiber, water and dye
auxiliary more specifically it explains.
Forces of repulsion which are developed between the dye molecule and water.
Forces of attraction which are developed between the dye molecule and fiber.
These forces are responsible for the dye molecule leaving the aqueous dye liquor
and entering and attaching themselves to the polymer of fiber.

3. CUTTING
Cutting is an important function since has greater effect on excessive
manufacturing cost than any other department concerned with actual production of
garment. They can be both internal cost those incurred in the cutting roll itself of the
malfunction in the cutting room .so proper care has to be taken while cutting the fabric.
While placing the pattern on the fabric lay, it should be done in such a way that
only the minimum amount of fabric is wasted. While cutting lay according to the pattern
pieces. It should be accurate and on the mark.
8

Finally while bundling the garments part that are out it should be bundling and
labeled accordingly which would make it easier for the sewing room to sort out those
pieces and start work. While cutting a particular 10to20%. We always cut more than the
order quantity. In case if there is any rejection of the garments due to certain detects, the
extra piece are used.
Use of pattern:
Pattern is prepared by the pattern maker in sampling room .It is
prepared for one of the buyer sampling pieces to take and preparing the front bodice,
bodies pack, yoke, sleeves cut, Collar, neck band ,pocket. The brow paper pattern is
prepared for all the size
Pattern layout:
Pattern are placed on the fabric departing upon economical pattern
placement. In the fabric layout two or three sizes will be marked.

4. SEWING
Sewing machine with greater technology guidance and confidence are
coming to industry with good quality. The thread is being source according to the same
/repaired color and contrast to the fabric. It is done and proper instructions of a
production needs. The whole garments is finished and monitored by the production head.

5. STITCHING
There are three types of stitching machines. They are flat lock, over lock and
Singer.
The department breaks into different structures on fixing up a garments :
Allocation the materials to the proper line.
Sleeve binding
Neck binding
Shoulder joint ,lock stitch
Mogul joint
Size joint
Bottom folded stitch
9

Sleeve lock stitch
6. CHECKING
After all these processes are over, the garments come to the checking table and
checked by experienced hands. Extra threads are removed, damaged pieces are removed
by them and other mistakes are corrected through the re-stitching process.
Stain removing:
Stain removing is a part of checking process. At the time of checking if there is
any stain on the cloth it is removed. The steam is allowed on the so it is will help to
remove the stain from the cloth.

7. IRONING
The ironing section consists of the normal & steam ironing. There are ironing
masters and helpers. They iron the garment and send it to the packing section.
The main functions done in ironing are listed below:
He controls about measurement deviation.
Practical ironing knowledge is a must.
Garment folding technique
Packing ratio knowledge.
Cost control techniques.
8. PACKING
After the ironing process , Firstly they will attached the size tag and extra button
according to the specification of the buyer. Size label on the shirt and the size tag should
match. Next, at the same tag will be attached the different size label and the packing of
finished goods is done.

1.2 OBJECTIVES OF THE STUDY

The following are the main objectives of the study : -

To identify the financial strengths & weakness of the company.
10

Understand the Profitability of the company through the profit ratio.
To evaluate efficiency and liquidity of working capital management in
CENTURY APPARELS [P] LTD, Tirupur .
To examine the pattern of management of working capital and to analyze the
working capital trends.
To analyze receivable management in company.
To study the operating cycle of company.
To examine cash management practice in company

The following are the secondary objectives of the study :-

To look at possible remedial measures if any on the basis of which tied-up funds
in working capital could be used effectively and efficiently.
To suggest, if possible on the basis of conclusion some modification to meet the
situation.

1.3 NEED FOR THE STUDY

1.This projects is helpful in knowing the companies position of funds maintenance and
setting the standards for working capital inventory levels, current ratio level, quick ratio,
current asset turnover level & size of current liability etc.

2. This project is helpful to the managements for expanding the dualism & the project
viability & present availability of funds.

3. This project is also useful as it combines the present year data with the previous year
data and there by it show the trend analysis, i.e. increasing fund or decreasing fund.

4. The project is done as a whole entirely. It will give overall view of the organization
and it is useful in further expansion decision to be taken by management.

11

1.4 SCOPE & SIGNIFICANCE OF THE STUDY

The study is conducted at CENTURY APPARELS PVT. LTD for 2 months
duration. The study of W.C. management is purely based on secondary data and all the
information is available within the company itself in the form of records. To get proper
understanding of this concept, I have done the study of the balance sheets, profit and loss
A/Cs, cash accounts, trial balance, and cost sheets. I have also conducted the interviews
with employees of accounts and finance department and stores department. So, scope of
the study is limited up to the availability of official records and information provided by
the employees. The study is supposed to be related to the period of last five years.


1.5 LIMITATIONS OF THE STUDY

The following are the various limitations involved in the study : -

The study fully depends on financial data collected from the published financial
statement (Annual Report) of company. The data collected from above the
sources are not of detailed nature. Thus study incorporates all the limitations that
are inherent in the considered financial statement.
The study in limited 4 years (2007-2008) to (2010-2011) performance of the
company.
This study in conducted within a short period. During the limited period the study
may not be retailed, full fledged and utilization in all aspects.
We cannot do comparisons with other companies unless and until we have the
data of other companies on the same subject.
Only the printed data about the company will be available and not the backend
details.
Future plans of the company will not be disclosed to us.
Lastly, due to shortage of time it is not possible to cover all the factors and details
regarding the subject of study.
12

CHAPTER 2
REVIEW OF LITERATURE
2.1 THE RESEARCH DONE BY PASS C.L., PIKE R.H.
The research done by Pass C.L., Pike R.H., An overview of working capital
management and corporate financing,(1984) describes that over the past 40 years major
theoretical developments have occurred in the areas of longer-term investment and
financial decision making. Many of these new concepts and the related techniques are
now being employed successfully in industrial practice. By contrast, far less attention has
been paid to the area of short-term finance, in particular that of working capital
management. Such neglect might be acceptable were working capital considerations of
relatively little importance to the firm, but effective working capital management has a
crucial role to play in enhancing the profitability and growth of the firm. Indeed,
experience shows that inadequate planning and control of working capital is one of the
more common causes of business failure.
2.2 THE RESEARCH DONE BY HERRFELDT B
The research done by Herrfeldt B., How to Understand Working Capital Management
describes thatCash is king--so say the money managers who share the responsibility of
running this country's businesses. And with banks demanding more from their
prospective borrowers, greater emphasis has been placed on those accountable for so-
called working capital management. Working capital management refers to the
management of current or short-term assets and short-term liabilities. In essence, the
purpose of that function is to make certain that the company has enough assets to operate
its business. Here are things you should know about working capital management




13

2.3 THEORICAL BACKGROUND OF WORKING CAPITAL MANAGEMENT

Working capital occupies a peculiar position in the capital structure of a company. The
decision as to the adequacy of working capital is a complicated and yet a very important
decision.
Working capital is the life-blood of all types of enterprises, manufacturing and
trading both. It is constantly required to buy raw materials for payment of wages and
other day-to-day expenses. Without adequate working capital, manufacturing operations
will be crippled. For trading enterprises, the capacity to stock a variety of goods for sale
depends upon its working capital. It is a base on which all the activities of business
enterprise depend.
High working capital ratios often mean that too much money is tied up in
receivables and inventories. Typically, the knee-jerk reaction to this problem is to apply
the big squeeze by aggressively collecting receivables, ruthlessly delaying payments to
suppliers and cutting inventories across the board. But that only attacks the symptoms of
working capital issues, not the root causes. A more effective approach is to
fundamentally rethink and streamline key processes across the value chain. This will not
only free up cash but lead to significant cost reductions at the same time.
Excessive working capital is equally unprofitable. The extra working capital is not
utilized in business operations and earns no profit for the firm. It results in unnecessary
accumulation of inventories, leading to inventory mishandling, waste, theft etc. The
abundance of working capital would lead to waste and inefficiency
Shortage of working capital funds renders the firm unable to avail attractive credit
opportunities etc. The firm loses its reputation when it is not in a position to honor its
short term obligations. As a result, the firm faces tight credit terms. It stagnates growth.
Meaning Of Working Capital:-
In simple words working capital means that which is issued to carry out the day to
day operations of a business. Capital required for a business can be classified under two
main categories
Fixed capital
Working capital
14

Every business needs funds for two purposes, for its establishment and to carry on
its day to day operations. Long term funds are required to create production facilities
through purchase of fixed assets such as plant and machinery, land, building, furniture
etc. Investment in these assets represents that part of firm capital, which is blocked on a
permanent or fixed basis called fixed capital. Funds are also needed for short term
purposes i.e. for the purchase of raw material, payment of wages and other day to day
operations of business. These funds are known as working capital. In other words,
working capital refers to that firms Capital, which is required for short term assets or
current assets. Funds thus invested in current assets keep revolving last and being
constantly converted into cash and this cash flow is again converted into other current
assts. Hence it is known as circulating or short term capital.


















15

CHAPTER 3
RESEARCH METHODOLOGY

Research Methodology is a purposeful, precise and systematic search for new
knowledge, skills, attitudes and values, or for the re-interpretation of existing knowledge,
skills, attitudes and values.
Research methodology is a way to systematically solve the research problem. It
may be understood as a science of studying now research is done systematically. In that
various steps, those are generally adopted by a researcher in studying his problem along
with the logic behind them.
Data collection is important step in any project and success of any project will be
largely depend upon now much accurate you will be able to collect and how much time,
money and effort will be required to collect that necessary data, this is also important
step.
3.1 STATEMENT OF THE PROBLEM

Every business need fund for two purpose; one for the establishment and the other
to carry out the day to day operation. It needs some amount of working capital to meet
daily obligation. The need for working capital arises due to the time gap between the
production and realization cash from sales. Management of working capital is concerned
with the problem that arises in attempting to manage current asset, current liability and the
inter relationship that exist between them. Effective and efficient working capital
management of a firm has a great effect on its profitability, liquidity and the structural
health of organization.

In the management of working capital, the firm is faced with two key problems:

1. First, given the level of sales and the relevant cost considerations, what are the optimal
amounts of cash, accounts receivable and inventories that a firm should choose to
maintain?

16

2. Second, given these optimal amounts, what is the most economical way to finance
these working capital investments? To produce the best possible results, firms should
keep no unproductive assets and should finance with the cheapest available sources of
funds. Why? In general, it is quite advantageous for the firm to invest in short term assets
and to finance short-term liabilities.

Besides this followings are some other problem , a firm is facing. Through this study we
try to find answer for these problems.

1. What are root causes of working capital on business?
2. What are the major effects on accounts receivable?
3. What is the nature of relationship between working capital and capital employed
4. What steps should be taken to ensure that it effect on the profit of the firm will not
be negative?
5. How can working capital be managed?
6. What make up the working capital cycle?
7. How can debtors be controlled?

3.2 RESEARCH DESIGN:
Descriptive research procedure is used for describing the recent situations in the
organization and analytical research to analyze the results by using research tools.

Descriptive Research:
Descriptive research, also known as statistical research, describes data and
characteristics about the population or phenomenon being studied. Descriptive research
answers the questions who, what, where, when and how...
Although the data description is factual, accurate and systematic, the research
cannot describe what caused a situation. Thus, Descriptive research cannot be used to
create a causal relationship, where one variable affects another. In other words,
descriptive research can be said to have a low requirement for internal validity.
17

In short descriptive research deals with everything that can be counted and
studied. But there are always restrictions to that. Your research must have an impact to
the lives of the people around you. For example,finding the most frequent disease that
affects the children of a town. The reader of the research will know what to do to prevent
that disease thus, more people will live a healthy life.

3.3 DATA SOURCE & COLLECTION METHODS:
There are several ways of collecting the appropriate data which differ considerably
in context of money, cost, time and other sources at the disposable of the researcher.
There are two types of data:
Primary data
Secondary data

Primary data
Primary data are those which are collected afresh and for the first time, and thus
happen to be original in character. In case of descriptive research, researcher performs
survey whether sample survey or census survey, thus we obtain primary data either
through
Observation
Direct communication with respondent
Personal interview

Secondary Data:
Secondary data are those which have already been collected by someone else
and which have already been passed through the statistical process. The Secondary data
consist of reality available compendices already complied statistical statements.
18

Secondary data consists of not only published records and reports but also unpublished
records.
Here we done the analysis on basis of secondary data, which included-
Balance sheet of company
Profit and loss A/C of century apparels
Cost sheets, & Trail balance of five years
3.4 PURPOSE:
The purpose of this paper is to properly analysis of the working capital
management of Century Apparels, Tirupur over the period 2008-20011.
3.5 TOOLS USED:

I used the different tools to analyze the working capital management of
Century Apparels -
Analysis through Working capital ratios
Analysis through Schedule change in working capital
Analysis through Gross operating cycle & Net operating cycle
Analysis through Various components of working capital










19

CHAPTER 4
WORKING CAPITAL ANALYSIS

As we know working capital is the life blood and the centre of a business. Adequate
amount of working capital is very much essential for the smooth running of the business.
And the most important part is the efficient management of working capital in right time.
The liquidity position of the firm is totally effected by the management of working
capital. So, a study of changes in the uses and sources of working capital is necessary to
evaluate the efficiency with which the working capital is employed in a business. This
involves the need of working capital analysis.
The analysis of working capital can be conducted through a number of devices, such
as:
1. Ratio analysis. 2. Fund flow analysis. 3. Budgeting.
1. RATIO ANALYSIS
A ratio is a simple arithmetical expression one number to another. The technique of ratio
analysis can be employed for measuring short-term liquidity or working capital position
of a firm. The following ratios can be calculated for these purposes:
1. Current ratio. 2. Quick ratio
3. Absolute liquid ratio 4. Inventory turnover.
5. Receivables turnover. 6. Payable turnover ratio.
7. Working capital turnover ratio 8. Working capital leverage
9. Ratio of current liabilities to tangible net worth.
2. FUND FLOW ANALYSIS
Fund flow analysis is a technical device designated to the study the source from which
additional funds were derived and the use to which these sources were put. The fund flow
analysis consists of:
a. Preparing schedule of changes of working capital
b. Statement of sources and application of funds.
It is an effective management tool to study the changes in financial position (working
capital) business enterprise between beginning and ending of the financial dates.

20

3. WORKING CAPITAL BUDGETING
Budget is a financial or quantitative expression of business plans & policies to be pursued
in the future period of time. WC budget as a part of total budgeting process of a business
is prepared estimating future long term & short term WC capital needs & sources to
finance them & then comparing the budgeted figures with the actual performance for
calculating variances. The successful implementation of WC budget involves the
preparing of separate budgets for various elements of WC such as cash inventories and
receivables etc. The objectives of a WC budget is to ensure availability of funds as and
when needed and to ensure effective utilization of these resources.
KEY WORKING CAPITAL RATIOS
The following, easily calculated, ratios are important measures of working capital
utilization.
Table 4.1
Key Working Capital Ratios
Ratio Formulae Result Interpretation
Stock
Turnover
(in days)
Average Stock *
365/
Cost of Goods
Sold
= x days On average, you turn over the value of your entire
stock every x days. You may need to break this
down into product groups for effective stock
management.
Obsolete stock, slow moving lines will extend
overall stock turnover days. Faster production,
fewer product lines, just in time ordering will reduce
average days.
Receivables
Ratio
(in days)
Debtors * 365/
Sales
= x days It takes you on average x days to collect monies due
to you. If your official credit terms are 45 day and it
takes you 65 days.
One or more large or slow debts can drag out the
21

average days. Effective debtor management will
minimize the days.
Payables
Ratio
(in days)
Creditors * 365/
Cost of Sales (or
Purchases)
= x days On average, you pay your suppliers every x days. If
you negotiate better credit terms this will increase.
If you pay earlier, say, to get a discount this will
decline. If you simply defer paying your suppliers
(without agreement) this will also increase - but
your reputation, the quality of service and any
flexibility provided by your suppliers may suffer.
Current Ratio Total Current
Assets/
Total Current
Liabilities
= x times Current Assets are assets that you can readily turn
in to cash or will do so within 12 months in the
course of business. Current Liabilities are amount
you are due to pay within the coming 12 months.
For example, 1.5 times means that you should be
able to lay your hands on $1.50 for every $1.00 you
owe. Less than 1 times e.g. 0.75 means that you
could have liquidity problems and be under
pressure to generate sufficient cash to meet
oncoming demands.
Quick Ratio (Total Current
Assets -
Inventory)/
Total Current
Liabilities
= x times Similar to the Current Ratio but takes account of
the fact that it may take time to convert inventory
into cash.
Working
Capital Ratio
(Inventory +
Receivables -
Payables)/
Sales
As %
Sales
A high percentage means that working capital
needs are high relative to your sales.
22

4.1. RATIO ANALYSIS
Ratio analysis is a technique of analysis and interpretation of financial statements. It is
the process of establishing and interpreting various ratios for helping in making
decisions. It only means of better understanding of financial strengths and weaknesses of
a firm. The main emphasis has been on calculating the ratios related to a working capital
management.
LIQUIDITY RATIOS: -These are the ratios which measures the short term solvency or
financial position of a firm. In other words, it refers to the ability of a concern to meet its
current obligations as and when these become due. To measure the liquidity of a firm, the
following ratios can be calculated.





















23

Table 4.2
Current Ratio Of Century Apparels

Chart 4.1: Current Ratio Of Century Apparels

ANALYSIS
The current ratio of the CENTURY APPARELS is above the standard and it guarantees
the payment of dues in time. The current ratio of the company has been considerably high
because they had made over investment in inventories, which is the main reason for the
high ratio of current assets. Inventories are high because of seasonal availability of raw
material. The overall position of current ratio for CENTURY APPARELS is satisfactory.
The current ratio of dye house has shown a remarkable increment from 5.26 in 2007-08
to 7.92 in 2008-09. Initially in 2007-08, the ratio was not satisfactory but it is quite
satisfactory for the years after 2010-11 and especially for the year 2008-09.
0
5
10
2008 2009 2010 2011
5.26
7.92
4.04
6.24
YEAR
CURRENT RATIO
CURRENT RATIO
YEAR CURRENT
ASSETS(in Rs)
CURRENT
LIABILITIES(in Rs)
CURRENT
RATIO
2008 72335450.22 13758132.09 5.26
2009 97761075.20 12343214.74 7.92
2010 141934492.00 35172584.20 4.04
2011 115612673.56 18528617.22 6.24
24


Table 4.3
Quick Ratio Of Century Apparels
YEAR LIQUID ASSETS
(in Rs)
CURRENT
LIABILITIES(in Rs)
LIQUID RATIO
2008 50693352.22 13758132.09 3.68
2009 56583851.20 12343124.74 4.58
2010 74081279.00 35172584.20 2.11
2011 71845029.56 18528617.22 3.88
Chart 4.2: Quick Ratio Of Century Apparels


Analysis
According to rule of thumb, it should be 1:1. For CENTURY APPARELS, the liquid
ratio present a uneven change over the past four years. It was 3.68 in 2007-08 and
increased to 4.58 in 2008-09 and then to 2.11 in 2009-10. The decrement in the ratio is
not satisfactory, however the ratio 2.11 in 2009-10 is more than the rule of thumb but it
should be quite more than the rule of thumb.
0
1
2
3
4
5
2008 2009 2010 2011
3.68
4.58
2.11
3.88
YEAR
LIQUID RATIO
LIQUID RATIO
25

Table 4.4
Working Capital Turnover Ratio Of Century Apparels

. YEAR SALES (in Rs) NET WORKING
CAPITAL (in Rs)
WCTR
2008 453662278.70 453662278.70 7.74
2009 503359979.46 85417950.46 5.89
2010 593474659.66 106761907.80 5.56
2011 703988634.61 97084056.34 7.25
Chart 4.3: Working capital Turnover Ratio Of Century Apparels


ANALYSIS
This ratio indicates the number of times the working capital is turned over in the course
of a year. A high working capital ratio indicates the effective utilization of working
capital and less working capital ratio indicates less utilization. For CENTURY
APPARELS, the ratio is quite same for the past five years. It is 7.74 in years 2007-08 and
in 2008-09 there was a slight change came over here and the ratio decreased to 5.89. And
in the next year in 2009-10 the ratio stand at 5.56. For CENTURY APPARELS, the ratio
is increasing once more in the very next year in 2010-11, it shows increment to 7.24, the
ratio of the company is satisfactory.
0
2
4
6
8
2008 2009 2010 2011
7.74
5.89
5.56
7.25
YEAR
WCTR
WCTR
26

Table 4.5
Stock Turnover Ratio Of Century Apparels

YEAR SALES (in Rs) AVERAGE
STOCK (in Rs)
STR or ITR
2008 453662278.70 24291109 18.68
2009 503359979.46 31409661 16.03
2010 593474659.66 23981268.5 24.75
2011 703988634.61 55810428.5 12.61
Chart 4.4: Stock Turnover Ratio Of Century Apparels


ANALYSIS: -
By analyzing the four-year data it seen, that it follows an uneven trend. We see that from
the year 2008 to 2009 the ratio is decreased in very nominal figures. In 2011 there is a
huge increase in inventory due to this, ratio the company maintains is very high in 2010
and the company is required to take measures to lower down this ratio as it affects the
working capital cycle of company and the flow of cash in the company. In 2011, we saw
company take measure to lower down its ratio which is good for company because a low
stock turnover ratio reveals undesirable accumulation of obsolete stock.
0
5
10
15
20
25
2008 2009 2010 2011
18.68
16.03
24.75
12.61
YEAR
STR or ITR
STR or ITR
27

Table 4.6
Debtors Turnover Ratio Of Century Apparels

YEAR CREDIT SALES
(in Rs)
AVERAGE
DEBTORS (in Rs)
DTR
2008 453662278.70 28677098.13 15.82
2009 503359979.46 27348823.87 18.41
2010 593474659.66 25923481.52 22.89
2011 703988634.61 32503373 21.66
Chart 4.5: Debtors Turnover Ratio Of Century Apparels

ANALYSIS
Generally a low debtors turnover ratio implies that it considered congenial for the
business as it implies better cash flow. The ratio indicates the time at which the debts are
collected on an average during the year. Needless to say that a high Debtors Turnover
Ratio implies a shorter collection period which indicates prompt payment made by the
customer. Now if we analyze the five year data we can say that it holds a good position
while receiving its money from its debtors. The ratios are in variation trend, which
implies that recovery position is good and company should maintain these positions.
0
5
10
15
20
25
2008 2009 2010 2011
15.82
18.41
22.89
21.66
YEAR
DTR
DTR
28

Table 4.7
Creditors Turnover Ratio Of Century Apparels

YEAR CREDIT PURCHASE
(in Rs)
AVERAGE CREDITORS
(in Rs)
CTR
2008 358037616.35 15724391.01 22.77
2009 421557817.32 10672311.95 39.50
2010 505412322.46 19426820.02 26.02
2011 567750535.58 20914713.21 27.15
Chart 4.6: Creditors Turnover Ratio Of Century Apparels


ANALYSIS
Actually, this ratio reveals the ability of the firm to avail the credit facility from the
suppliers throughout the year. Generally, a low creditors turnover ratio implies favorable
since the firm enjoys lengthy credit period. Now if we analyze the three years data we
find that in the year 2009 the ratio was very high which means that its position of
creditors that year was not good only in the year 2009, when we turn ahead the other
years creditors turnover ratio is in pretty good position. In the all four years it has
followed, a decreasing trend, which is very good, sign for the company. Therefore, we
can say it enjoys a very good credit facility from the suppliers.
0
10
20
30
40
2008 2009 2010 2011
22.77
39.5
26.02
27.15
YEAR
CTR
CTR
29

4.2 OPERATING CYCLE ANALYSIS
Operating cycle refers to the time period which starts from the raw material
purchases and ends with realization of receivable. So it is total time gap between raw
material purchases to total debtors collection. This is also known as working capital
cycle. Operating cycle is therefore expressed in terms of months or weeks or days. The
higher the operating cycle period, higher the working capital requirement. It comprises of
raw material conversion period, WIP conversion period, FG conversion period and
debtors conversion period and creditors period. The basic reason for calculating
operating cycle is to find out the means for reducing the duration of operating cycle
because if duration of operating cycle will be less than working capital requirement will
be less.
OC = R + W + F + D C
Where,
R = raw material conversion period W = work in process period
F = finished goods conversion period D = debtor collection period
C = creditors payment period








30

Table 4.8
Raw Material Conversion Period (RMCP) Of Century Apparels

Raw Material Conversion Period (RMCP)

= Average Raw Material Stock X 365s
Average Raw Materials consumed during the year

PARTICULARS 2008 2009 2010 2011
Average raw
material stock
(in Rs)
13076062.5 20819151 33352213.5 33065118
Raw material
consumed
during the year
(in Rs)
218371.65 107464.04 213093.45 314166.03
RMCP 59.88 193.73 156.52 105.25
Chart 4.7:RMCP Of Century Apparels

0
50
100
150
200
2008 2009 2010 2011
59.88
193.73
156.52
105.25
N
O
.

O
F

D
A
Y
S

YEAR
RMCP
RMCP
31


Table 4.9
Work in Progress Conversion Period (WIPCP) Of Century Apparels
Work in Progress Conversion Period (WIPCP)
= Average stock in progress
Average Cost of Production

PARTICULARS 2008 2009 2010 2011
Average stock in
progress
4818821.5 5586013 8313099.5 7834151.50
Avg. Cost of
production
180015.22 194248.64 211273.02 190952.86
WICP 26.77 28.75 37.93 41.03
Chart 4.8:WICP Of Century Apparels


0
10
20
30
40
50
2008 2009 2010 2011
26.77
28.75
37.93
41.03
N
O
.

O
F


D
A
Y
S

YEAR
WICP
WICP
X365
32

Table 4.10
Finished Goods Conversion Period (FGCP) Of Century Apparels

Finished Goods Conversion Period (FGCP)
= Average finished goods inventory
Average Cost of goods sold

PARTICULARS 2008 2009 2010 2011
Average
finished goods
inventory
6396225 5004497 13149905.5 14911159
Cost of goods
sold
1260173 1398222.17 1648540.72 1955523.98
FGCP 5.08 3.58 7.98 7.63
Chart 4.9:FGCP Of Century Apparels


0
1
2
3
4
5
6
7
8
2008 2009 2010 2011
5.08
3.58
7.98
7.63
N
O
.

O
F

D
A
Y
S

YEAR
FGCP
FGCP
X 360

X 360

X 365
33

Table 4.11
Debtors Conversion Period (DCP) Of Century Apparels

Debtors Conversion Period (DCP)
= Days in year company operating
Debtors Turnover

PARTICULARS
2008 2009 2010 2011
Days in year
company
operating
360 360 360 360
Debtors turnover 15.82 18.41 22.89 21.66
DCP 22.76 19.55 15.72 16.62
Chart 4.10: DCP Of Century Apparels




0
5
10
15
20
25
2008 2009 2010 2011
22.76
19.55
15.72
16.62
N
O
.

O
F

D
A
Y
S

YEAR
DCP
DCP
34

Table 4.12
Credit Conversion Period (CCP) Of Century Apparels

Credit Conversion Period (CCP)
= Days in year company operating
Creditors turnover
PARTICULARS
2008 2009 2010 2011
Days in year
company
operating
360 360 360 360
Creditors
turnover
22.77 39.50 26.02 27.15
Avg. consumption
period OR CCP
15.81 9.11 13.84 13.26
Chart 4.11:CCP Of Century Apparels



0
2
4
6
8
10
12
14
16
2008 2009 2010 2011
15.81
9.11
13.84
13.26
N
O
.

O
F

D
A
Y
S

YEAR
Avg. consumption period OR CCP
Avg. consumption period OR
CCP
35

Table 4.13
GROSS OPERATING CYCLE FOR CENTURY APPARELS:
(in Days)
YEAR RMCP WICP FGCP DCP GOC
2008 59.88 26.77 5.08 22.76 114.49
2009 193.73 28.75 3.58 19.55 245.61
2010 156.52 37.93 7.98 15.72 217.84
2011 105.25 41.03 7.63 16.62 170.53
Chart 4.12:GOC Of Century Apparels









0
50
100
150
200
250
2008 2009 2010 2011
114.49
245.61
217.84
170.53
N
O
.
O
F

D
A
Y
S

YEAR
GOC
GOC
36

Table 4.14
NET OPERATING CYCLE FOR CENTURY APPARELS: -
(In DAYS)
YEAR GOC CCP OR APP NOC
2008 114.49 15.81 98.68
2009 245.61 9.11 236.5
2010 217.84 13.84 204.31
2011 170.53 13.26 157.27

Chart 4.13:NOC Of Century Apparels







0
50
100
150
200
250
2008 2009 2010 2011
98.68
236.5
204.31
157.27
N
O
.
O
F

D
A
Y
S

YEAR
NOC
NOC
37

ANALYSIS
It claimed that gross operating cycle of CENTURY APPARELS is increasing in year
2008-09 and in the year 2009-10 it decreasing up to certain extent. In year 2007-08, it is
114.49 days is increased to 245.91 days in the year 2008-09. The main reason of
increasing gross operating cycle in 2008-09 is due to more availability of raw material in
the stores. In 2008-09, it is on the highest point of 245.61 days. In year 2008-09 the
company purchased a bulk of raw material due to market variations the GOC is
increased. However, when we came to year 2009-10 the GOC for CENTURY
APPARELS has shown a significant decrement of 204.31 days from the year 2008-09 to
245.61. When in next year 2010-11, it came out to be 170.53 days. The GOP for
satisfactory as it Varies as the market requirements and changes in form of meet the
customers requirements largely.
But when we came to the NOC of CENTURY APPARELS it we can see that Creditors
payment period OR Average payment period of CENTURY APPARELS is on a average
of 15 days in each (4) four years so does not make more effect on GOC. Therefore, it is
somehow near of the GOC.
That is why the companys NOC 98.68, 236.5, 204.31, and 157.27 in the years 2008,
2009, 2010 and 2011. Therefore, we can say that there is a significant change in the NOC
of the CENTURY APPARELS.









38

4.3 ANALYSIS ON THE BASIS OF SCHEDULE OF CHANGES IN WORKING
CAPITAL
Table 4.15
ANALYSIS OF CHANGES IN WORKING CAPITAL FROM 2007-08 TO 2008-09
(in Rs)
PARTICULARS 2007-08 2008-09 INCREASE DECREASE
CURRENT ASSETS:
Inventories 21642098 41177224 19535126
S. debtors 30359548.69 24338099.04 6021449.65
Cash & Bank Balances 3407307.32 2297697.88 1109609.44
Loans & Advances 16926496.21 32127724.16 15201227.95
Total current assets (A) 72335450.22 99940745.08
CURRENT
LIABILITIES:

S. creditors 11585162.05 9759461.84 1825700.21
Advance from customers 100000 100000
Provisions 2072970.04 2483662.9 410692.86
Total current liabilities
(B)
13758132.09 12343124.74
Working capital (A-B) 58577318.13 87597620.34 36562054.16 7541751.95
Net Increase in working
capital
29020302.21 29020302.21
87597620.34 87597620.34 36562054.16 36562054.16





39


Table 4.16
ANALYSIS OF CHANGES IN WORKING CAPITAL FROM 2008-09 TO 2009-10
(in Rs)
PARTICULARS 2008-09 2009-10 INCREASE DECREASE
CURRENT ASSETS:
Inventories 41177224 67853213 26675989
S. debtors 24338099.04 27508864 3170764.96
Cash & Bank Balances 2297697.88 3665403.6 1367705.72
Loans & Advances 32127724.16 42907011.4 10779287.24
Total current assets (A) 99940745.08 141934492
CURRENT
LIABILITIES:

S. creditors 9759461.84 29094178.2 19334716.36
Advance from customers 100000 2539050 2439050
Provisions 2483662.9 3539356 1055693.1
Total current liabilities
(B)
12343124.74 35172584.2
Working capital (A-B) 87597620.34 106761907.8 41993746.92 22829459.46
Net Increase in working
capital
19164287.46 19164287.46
106761907.8 106761907.8 41993746.92 41993746.92


40

Table 4.17
ANALYSIS OF CHANGES IN WORKING CAPITAL FROM 2009-10 TO 2010-11
(in Rs)
PARTICULARS 2009-10 2010-11 INCREASE DECREASE
CURRENT ASSETS:
Inventories 67853213 43767644 24085569
S. debtors 27508864 37497882 9989018
Cash & Bank Balances 3665403.6 6891449.29 3226045.69
Loans & Advances 42907011.4 27455698.27 15451313.13
Total current assets (A) 141934492 115612673.6
CURRENT
LIABILITIES:

S. creditors 29094178.2 12735248.22 16358929.98
Advance from customers 2539050 822054 1716996
Provisions 3539356 4971315 1431959
Total current liabilities
(B)
35172584.2 18528617.22
Working capital (A-B) 106761907.8 97084056.34 31290989.67 40968841.13
Net Decrease in working
capital
9677851.46 9677851.46
106761907.8 106761907.8 40968841.13 40968841.13




41

ANALYSIS

FOR YEARS 2007-08 AND 2008-09:
As we have a look on the schedule of changes in working capital for the Century
Apparels over the years 2007-08 and 2008-09, we find that, among current assets,
inventories, loans and advances have shown increment from year 2007-08 to year 2008-
09. The sundry debtors and cash & bank balances have decreased in the same years.
Among the current liabilities, the sundry creditors and other liabilities have decreased and
provisions were increased. Therefore, the overall net working capital has increased.

FOR YEARS 2008-09 AND 2009-10:
As we have a look on the schedule of changes in working capital for the Century
Apparels over the years 2008-09 and 2009-10, we find that all the current assets such as
inventories, loans and advances, sundry debtors and cash & bank balances have shown
increment from year 2008-09 to year 2009-10. All the current liabilities were increased
from 2008-09 to 2009-10. The overall net working capital has increased but it is less
compared to previous year's net working capital increment.

FOR YEARS 2009-10 AND 2010-11:
Among the current assets, debtors and cash & bank balances have increased and
inventories and loans & advances have shown decrement. The total current assets have
increased. Among the current liabilities, sundry creditors and other liabilities have
decreased which made a positive effect on networking capital and it increases, on the
other hand, the provision increased which not directly but overall made a good effect on
company.






42

4.4 ANALYSIS OF VARIOUS COMPONENTS OF WORKING CAPITAL
Table 4.18
Position of inventory in Century Apparels: - (in Rs)
PARTICULARS
2007-08 2008-09 2009-10 2010-11
Raw material 12230900 29407402 37297025 28833211
W.I.P 4901850 6270176 9756023 5912280
Finished goods 4509348 5499646 20800165 9022153
TOTAL 21642098 41177224 67853213 43767644
Chart 4.14: Position of inventory in Century Apparels

INTERPRETATION: By analyzing the 4 years data we see that the inventories are
increased/decreased year by year. We can look increasing pattern in inventories. We can
see that inventories are grown in 08-09 and 09-10 respectively from previous year in
figures it increases up to19535126 in 2009 and in the year 2010 it increases to 26675989
in comparison of 2009. By this growth we can say that the company is growing. A
company uses inventory when they have demand in market and Century Apparels is
having a demand in industry market. That is biggest reason for increase in Inventories.
From other point of view we can say that the liquidity of firm is blocked in inventories
but to stock is very good due to uncertainty of availability of raw material in time.
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
2008 2009 2010 2011
21642098
41177224
67853213
43767644
A
M
O
U
N
T
(
i
n

R
s
)

YEAR
STOCK
43

SUNDRY DEBTORS ANALYSIS
Debtors or an account receivable is an important component of working capital and fall
under Current assets. Debtors will arise only when credit sales made.
Table 4.19
Position of Sundry Debtors in Century Apparels
(in Rs)
PARTICULARS
2007-08 2008-09 2009-10 2010-11
DEBTS O/S
FOR A PERIOD
OF SIX
MONTHS
85124.00 118028.00 203547.00 0.00
OTHER
DEBTS
30274424.69 22040401.16 27305317.00 37497882.00
TOTAL 30359548.69 22158429.16 27508864.00 37497882.00
Chart 4.15: Position of Sundry Debtors in Century Apparels



0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
2008 2009 2010 2011
30359548.69
22158429.16
27508864
37497882
A
M
O
U
N
T

(
i
n

R
s
)

YEAR
DEBTORS
44

INTERPRETATION
In the table and figure, we see that there are continuous variations in the debtors of
Century Apparels in four successive years. A simple logic is that debtors increase only
when sales increase and if sales increases it is good sign for growth. We can see that in
the year 2008-09 the Debtors are at minimum level. Moreover, in next two years in 2010
& 2011 the debtors are continuously increasing. We can say that it is a good sign as well
as negative also. Company policy of debtors is very good but a risk of bad debts is always
present in high debtors. When sales are increasing with a great speed the profit also
increases. If company decreases the Debtors, they can use the money in many investment
plans. So, this variation is good from the firm prospect





















45

CASH AND BANK BALANCE ANALYSIS
Cash called the liquid asset and vital current assets; it is an important component of
Working capital. In a narrow sense, cash includes notes, bank draft, cheque etc.
Table 4.20
Position of Cash and Bank Balance in Century Apparels: -
(in Rs)
PARTICULARS
2007-08 2008-09 2009-10 2010-11
Cash & Bank 3407307.32 2297697.88 3665403.60 6891449.29
TOTAL 3407307.32 2297697.88 3665403.60 6891449.29
Chart 4.16: Position of Cash and Bank Balance in Century Apparels





0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
2008 2009 2010 2011
3407307.32
2297697.88
3665403.6
6891449.29
A
M
O
U
N
T

(
i
n

R
s
)

YEAR
CASH & BANK
46

INTERPRETATION
If we analyze the above table and chart we find that it follows an increasing trend. In the
year 2008, it had maintained a huge amount of cash and bank balance which has
decreases in the year 2009. Although companys cash position in the year 2008, 2009 &
2010 was not sound so, this is not a very good sign for company. The analysis shows that
the fix deposits of company are rapidly fallen in the year in 08- 09 respectively from
year 2008 that is why company is have minimum balance in 2009 in comparison of all.
Through analysis, we got that company is utilizing the fixed cash for exploding the
Projects that is good for growth.






















47

LOANS AND ADVANCES ANALYSIS
Loans and Advances here refers to any to amount given to different parties, company,
employees For a specific period of time and in return they will be liable to make timely
repayment of that Amount in addition to interest on that loan.
Table 4.21
Position of Loan and Advance in Century Apparels: -
(in Rs)
PARTICULARS
2007-08 2008-09 2009-10 2010-11
LOANS &
ADVANCES
16926496.21 32127724.16 42907011.40 27455698.27
TOTAL 16926496.21 32127724.16 42907011.40 27455698.27
Chart 4.17: Position of Loan and Advance in Century Apparels




0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
45000000
2008 2009 2010 2011
16926496.21
32127724.16
42907011.4
27455698.27
A
m
o
u
n
t

(
i
n

R
s
)

YEAR
LOANS & ADVANCES
48

INTERPRETATION
If we analyze the table and the chart we can see that it follows an increasing trend which
is a Good sign for the company. We can see that the increase of loans and advances are
increases year by year except the year 2011. In the year 2010 there is more than Rs 4
crore given as loan, due to this a lot of amount was blocked. But it used for expansion of
business. The increasing pattern shows that company is giving advances for the
expansion of plants and Machinery which is good sign for better production. Although
companys cash is blocked but This is good that company is doing modernization of plan
competitors in market.






















49

CURRENT LIABILITIES ANALYSIS
Current liabilities are any liabilities that are incurred by the firm on a short term basis or
current Liabilities that has to be paid by the firm within one year.
Table 4.22
Position of Current liabilities in Century Apparels: -
(in Rs)
PARTICULARS 2008 2009 2010 2011
SUNDRY
CREDITORS
11585162 9759462 29094178 12735248
ADVANCE FROM
CUSTOMERS/DLRS
100000 100000 2539050 822054
TOTAL 11685162 9859462 31633228 13557302

Chart 4.18: Position of Current Liabilities in Century Apparels


0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
2008 2009 2010 2011
11685162
9859462
31633228
13557302
A
M
O
U
N
T

(

i
n

R
s
)

YEAR
CURRENT LIABILITIES
50

INTERPRETATION
If we analyze the above table then we can see that it follow an uneven trend in the sundry
creditors and other liabilities. In 2009 current liabilities is decreased compared to 2008 .
In 09-10 it was increased because of growth in other liabilities. This is done because in
the year 2011 company purchased a bulk of raw material due to market variations. When
company has minimum liabilities it creates a better goodwill in market. High current
liabilities indicate that company is using credit facilities by creditors.
























51

PROVISIONS ANALYSIS
Table 4.23
Position of Provisions in Century Apparels: -
(in Rs)
PARTICULARS 2008 2009 2010 2011
PROVISIONS 2072970 2483663 3539356 4971315
TOTAL 2072970 2483663 3539356 4971315
Chart 4.19: Position of Provisions in Century Apparels

INTERPRETATION
From the above table we can see that provision shows a growing trend and the huge
amount is being kept in these provisions. Though the profits of the company are
increased, income tax is also increased. Therefore, there is a great need of maintaining
proper provisions, which is good that company is creating in time. The provisions are
increasing as the tax increases. Although company is paying more income tax that is why
because company also earning more. This is good sign for Company.

0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
2008 2009 2010 2011
2072970
2483663
3539356
4971315
A
M
O
U
N
T
(
i
n

R
s
)

YEAR
PROVISIONS
52


CHAPTER 5
FINDINGS, CONCLUSION AND SUGGESTIONS

5.1 FINDINGS

Due to seasonal availability of raw material is purchased in bulk .So the most part
of current assets is covered by inventories.
Liquidity ratios of Century Apparels are too high because of maintaining more
inventory stock of raw material.
Raw material is purchased by corporate office in bulk to get the advantages of
bulk purchasing.
The cost of raw material fluctuates depending upon the availability of crop in the
particular season, so it effect the finished product price.
The operating cycle of Century Apparels is very high due to the high raw
material conversion period because raw material is a seasonal product.
For filling its fund requirement Century Apparels depends upon the ICICI bank
and Axis Bank .
It holds the cash only for transaction purpose. Corporate office holds the cash for
major receipts & payments.
EOQ technique is not followed by Century Apparels for purchasing Yarn because
cotton is a seasonal product. Also EOQ is not followed in stores.

5.2 CONCLUSION

By conducting the study about working capital management, I found out that
working capital management of CENTURY APPARELS is good. CENTURY
APPARELS has sufficient funds to meet its current obligation every time, which
is due to sufficient profits and efficient management of CENTURY APPARELS.
53

Raw material for all the units of CENTURY APPARELS purchased by corporate
office in bulk, which is a major problem for the company as it increases the
inventory cost.
Company is cash rich but as there are expansion and diversification plans under
the pipeline, company is not utilizing these funds. For meeting the working capital
needs and capacity expansion needs, it has borrowed from banks.
Lack of advertisement can be considered to be a weak point for the CENTURY
APPARELS.
The amount of stock is increasing per year, which is a good sign, as it would help
them in the tough competition coming ahead.
Firm profitability can be increase by shortening accounts receivables and
inventory periods.

5.3 SUGGESTIONS
Management should make the proper use of inventory control techniques like
fixation of minimum, maximum and ordering levels for all the items for less
blockage of money.
The company should also adopt proper inventory control like ABC analysis etc.
This inventory system can make the inventory management more result oriented.
The EOQ should also follow in stores.
The company should train its work force properly, which would enable the
company to utilize its resources properly and in the interim help in minimizing
wastage, and hence result in the expansion of its market share.
Due to competition, prices are market driven and for earning more margin
company should give the more concentration on cost reduction by improving its
efficiency.
The investments of surplus funds made by the corporate office and the units are
not generally involved while taking decisions with regard to structure of
investment of surplus funds. The corporate office should involve the units to
better ascertain the future requirements of funds and accordingly the investments
made in different securities.
54

The company is losing its overseas customers due to decrease in exports so; the
sufficient amount of exports should the maintained.
Companys Average debtor collection period of company is 19 days. Therefore, it
would be the one of the positive point for company and company should maintain
it for future.























55


BIBILIOGRAPHY

WEBSITES:-

http://www.centuryapparel.com/
http://www.centuryapparel.com/evolution.php
http://www.centuryapparel.com/strengths.php
http://www.studyfinance.com/lessons/workcap/
http://en.wikipedia.org/wiki/Working_capital
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=931591&rec=1&am
p;amp;srcabs=966188
http://www.emeraldinsight.com/Insight/ViewContentServlet?contentType=Articl
e&S.Sename=/published/emeraldfulltextarticle/pdf/2910030202.pdf

BOOKS AND JOURNALS

Anand, M. 2001. Working Capital performance of corporate India: An empirical
survey, Management & Accounting Research, Vol. 4(4), pp. 35-65

Berryman, J. 1983. Small Business Failure and Bankruptcy: A survey of the Literature,
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56

ANNEXURES

BALANCE SHEET AS AT CENTURY APPARELS PVT LTD

PARTICULARS 2010-11 2009-10 2008-09 2007-08
SOURCES OF
FUNDS

SHARE CAPITAL 19901000 19901000 19901000 19901000
RESERVE AND
SURPLUS
345519708.1 29625231.23 15253956.78 21829295.54
LOAN FUNDS
SECURED LOANS 72686105.58 88539002.13 94535519.74 55323395.23
DEFERED TAX
LIABILITY
3383097 3449412 3080483 662332
UNSECURED
LOANS
43486673 46947616 28872233 15703501
TOTAL 173976583.7 188462261 171643192.5 113419524
APPLICATION OF
FUNDS

FIXED ASSETS
A: GROSS BLOCK 178453951.9 172240571.2 164888412.7 126570061.8
B: less
DEPRICIATION
101561424.6 90540217.62 78663170.62 71729938.62
C: NET BLOCK 76892527.31 81700353.56 86225242.06 54840123.14
D:CURRENT
ASSETS

INVENTORY 43767644 67853213 41177224 21642098
SUNDRY DEBTORS 37497882 27508864 24338099.04 30359548.69
CASH IN HAND &
BANK
6891449.29 3665403.6 2297697.88 3407307.32
LOANS AND
ADVANCES
27455698.27 42907011.4 32127724.16 16926496.21
E:CURRENT
LIABILITIES

SUNDRY
CREDITORS
12735248.22 29094178.2 9759461.84 11585162.05
ADVANCE FROM
CUSTOMERS/DLRS
822054 2539050 100000 100000
PROVISIONS 4971315 3539356 2483662.9 2072970.04
(D-E)NET
CURRENT ASSETS
970s84056.34

106761907.8 85417950.46 58577318.13
MISCELLANEOUS
EXPENSES
--------- --------- -------- 2082.5
TOTAL 173976583.7 188462261 171643192.5 113419524
57

PROFIT & LOSS ACCOUNT AS AT CENTURY APPARELS PVT LTD


PARTICULARS 2010-11 2009-11 2008-09 2007-08
(A) INCOME
1: NET SALES 703988634.6
1
593474659.6
6
503359979.4
6
453662278.7
0
2: OTHER INCOME 436106.42 3913796.87 172310.00 13234.00
TOTAL 704424741.0
3
597388456.5
3
503532289.4
6
453675512.7
0
(B) EXPENSES
1:RAW
MATERIAL,FINISHE
D GOODS & WORK
IN PROGRESS
591836104.5
8
478736333.4
6
402022691.3
2
36335638.35
2:MANUFACTURING
EXPENSES
68743029.05 76058287.24 69929616.64 64805480.37
3:SALARY & OTHER
EMP.BENEFITS
4115744.00 3845617.00 3348712.00 3336648.00
4: ADMINISTRATIVE
EXPENSES
3232698.41 3229712.90 3352674.68 2742302.31
5: SELLING
EXPENSES
4646428.28 4114634.84 3276473.48 3183784.89
6: FINANCIAL
EXPENSES
13455947.36 13038713.28 7292587.41 6731948.84
7: OTHER EXPENSES 446187.51 324537.36 731402.50 38487.59
8:DEPRICIATION 11021207.00 11877047.00 6933232.00 7349223.00
TOTAL 697497346.1
9
591224883.0
8
496887390.0
3
451523513.3
5

PROFIT BEFORE
TAX
6927394.84 6163573.45 6644899.43 2151999.35
DEFERRED TAX -66315.00 368929.00 2418151.00 662332.00
PROVISION FOR FBT 99521.00 90342.00 56529.41 0.00
PROVISION FOR
TAXATION
1999712.00 1333028.00 745557.78 446425.00
PROFIT AFTER TAX 4894476.84 4371274.45 3424661.24 1043242.35
PROFIT AS PER
LAST YEAR
BALANCE SHEET
18406627.98 14035353.53 10610692.29 9567449.94
CARRIED TO
CURRENT YEAR
BALANCE SHEET
23301104.82 18406627.98 14035353.53 10610692.29