Introduction to Working capital management :

Working capital could be defined as the portion of assets used in current Operations. The movements of the funds from capital to income and profits and back to Working capital are one of the most important characteristics of the business. This cyclical operation is concerned with utilization of the funds with the hope that will return with an additional amount called income. If the operations of the company are to run smoothly, a proper relationship between fixed capital and current capital has to maintain. Sufficiently liquidity is important and must be achieved and maintained to provide that funds to pay off obligation as they arise. Financial management is that managerial activity which is concerned with the planning and controlling of the firm s financial resources. The term working capital refers to current assets, which may be defined as: i) Year and ii) Those which are required to meet day to day operations, Those which are convertible into cash or equivalents with the period of one

The fixed as well as current assets, both requires investment of Funds . So the Management of working capital and fixed assets apparently seem to involve it type of Consideration but it is no so. The management of working capital involve different Concept and methodology than the techniques used in fixed assets management. Financial management focuses on finance manager performing various tasks as Budgeting, Financial Forecasting, Cash Management, Credit Administration, Investment Analysis, Funds Management, etc. Which help in the process of decision making. The management of fixed and current assets, however, differs in three important ways: Firstly, in managing fixed assets, time is very important; consequently discounting and compounding aspects of time element play an important role in capital budgeting and a minor one in the management of current assets. Secondly, the large holdings of current assets, especially cash, strengthen firm s liquidity position but it also reduces its overall profitability. Thirdly, the level of fixed as well as current assets depends upon the expected sales, but it is only the current assets, which can be adjusted with sales fluctuation in the short run.

 Introduction of Videocon Industries Ltd.

Shri Nandlal Madhavlal Dhoot, the founder of the Videocon Group, completed his education in Ahmednagar and Pune. He was a successful sugarcane and cotton cultivator. As a next logical step to vertical integration, he boldly took upon an entrepreneurial venture by importing machinery from Europe to set up the Gangapur Sakhar Karkhana (Sugar Mill) in 1955. Those were the times when the village did not even have electricity. Thus was unleashed an Industrial Revolution. In 1984, the Dhoot family launched Videocon International Limited with an avowed purpose of producing world class Color Television set thought technical tie - up with Toshiba Corporation of Japan. Videocon group companies have won prestigious approval and certificate from India and abroad. These includes the approval from VDE testing and Certificate Institute Germany, the British Standard, the CE approval for exporting to Europe and the ISO 9002 certification. Videocon sprawling state of the art facility is spread across 18 locations in India. The latest inclusion is the Rs.400 crore. Ultra modern and environmental friendly manufacturing facility set up at Banglore. The inertia of diversification was catalyzed with the inspection of Videocon Appliance ltd. In 1988. The company manufactured advanced washing machines and has thus changed the lives of millions of women. The company has revolutionized the A.C. market by creating superior quality A.C. 1992 Videocon breathed new life into the refrigerator market by introducing India s first No frost refrigerator. The refrigerator plant follows the international quality to ensure defect free products with a total production capacity of more than 1.5 million refrigerator per year.

 Objective:

Working capital management is very important in modern business. The analysis of working capital is also very useful for short-term management of funds. The following are objective of study: 1) To make. Items wise analysis of the elements or component of working capital to identify the items responsible for change in working capital. 2) To calculate of working capital for last Four Year.

 Scope & Limitation of the Study

1. The Study is limited to Four Years performance of the Company. 2. The data used in this study have been from published annual reports only. As per the requirement and necessary some data are grouped and sub Grouped. 3. For making a clear-cut opinion, Ratio technique of financial management has been used.

 Data & Methodology Of The Study:

The data of videocon appliances Ltd. For this study have been taken from secondary sources e.g. Published annual report of the company. Editing, classification and tabulation of the financial data, which are collected from the above-mentioned sources, have been done as per the requirement of the study.

 Factors determining working capital

1) Nature or character of Business. 2) Production cycle. 3) Production Policy. 4) Credit Policy. 5) Growth and Expansion. 6) Seasonal Variation. 7) Earning Capacity. 8) Dividend Policy. 9) Other Factors.

 Sources Of Working Capital

Mainly there are two sources of working capital: I. II. Permanent or Fixed working capital Temporary or variables working capital

 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 most important part is the efficient management of working capital in right time. The liquidity position of t he firm is totally effected by management of working capital. So, 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 workin g capital analysis. The analysis of working capital can be conducted though a number of devices such as: 1. Ratio analysis. 2. Budgeting.