A SUMMER INTERNSHIP PROJECT [SIP] ON [WORKING CAPITAL MANAGEMENT] UNDERTAKEN AT

APEX HEALTHCARE LIMITED ANKLESHWAR SUBMITTED BY: PRITI K.KALATHIYA GTU ENROLLMENT NO: - 107600592021 GUIDED BY: Ms. NISHA RAKHOLIYA ASSISSTANT PROFESSOR, MBA PROGRAMME [20010-12] A SIP Report Submitted To Gujarat Technological University in Partial Fulfillment of the Requirement for the Degree of Master of Business Administration [MBA]

SHREE LEUVA PATEL TRUST M.B.A. MAHILA COLLEGE

AMRELI

COMPANY SIP CERTIFICATE

COLLEGE CERTIFICATE

PREFACE
To start any business, First of all we need finance and the success of that business entirely depends on the proper management of day-to-day finance and the management of this short-term capital or finance of the business is called Working capital Management. Working Capital is the money used to pay for the everyday trading activities carried out by the business - stationery needs, staff salaries and wages, rent, energy bills, payments for supplies and so on. I have tried to put my best effort to complete this task on the basis of skill that I have achieved during the last one year study in the institute. I have tried to put my maximum effort to get the accurate statistical data. However I would appreciate if any mistakes are brought to me by the reader.

DECLARATION

I, Ms. PRITI K. KALATHIYA. Student of SHREE LEUVA PATEL

TRUST M.B.A. MAHILA COLLEGE - AMRELI, affiliated to Gujarat Technological University, Ahmedabad, hereby declare that this

project is result of culmination of my sincere efforts. I declare that this submitted work is done solely by me and to the best of my knowledge. I also declare that all the information collected from various secondary sources has been mentioned in this project report.

ACKNOWLEDGEMENT
Here, is the golden opportunity for me to express my heartfelt gratitude to all who supported me, given me their precious time, opinions and suggestions to complete my project. First of all, I would like to thank Mr. Gopal Patel (Principal), of SLPT M.B.A. Mahila College provided indent guidelines for preparing report, without whose guidelines I would have been lost in jungle of knowledge where I am just toddler. I would like to thank Mr. Umesh Mendapara my internal project guide whose efforts helped me to come out from my doubts and way of explanations helped me to understand the process of the whole organization and complete my project without any confusion. I would also like to thank staff members of Apex Healthcare Limited for valuable suggestion given by them, which were so helpful to me in many ways. Last but not the least, I would thank Ms. NISHA RAKHOLIYA for giving me the opportunity to carry out this project and thereby providing us the platform to develop our talents and gain valuable experience. I would also like to thank the staff for the help extended by them

Through the training, I have learnt a lot about the industry and would be glad to share this experience with others. This training has made me grow as management student and has helped me find our bearings.

TABLE OF CONTENT Sr. NO. Chapter Introduction 1 1.1 1.2 2 Chapter Research Methodology 3 3.1 Problem definition 3.2 Research objective 3.3 Research design 3.4 Data collection method 3.5 Analysis tools and technique 3.6 Limitation of research Chapter Data Analysis and Interpretation 4 Chapter Findings and Conclusion 5 Chapter Recommendations 6 Bibliography Appendix Industry profile Company profile TOPIC

Page No

Chapter Literature Review

Chapter 1 INTRODUCTION

1.1 INDUSTRY PROFILE

The Indian pharmaceutical industry today is the front rank of Indias science- based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian pharmacy industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 per cent annually. It ranks very high in third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously. By playing a key role in promoting and sustaining development in the vital field of medicine, Indian pharma industry boasts up the quality producer and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped tom put India on the pharmaceutical map of the world. The Indian pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies do control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with serve price competition and government price control. The pharmaceutical industry in India meets ground 70% of the countrys demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 small- scale units, which form the core of the pharmaceutical industry in India (including 5 central public sector units). These units produce the complete range of

pharmaceutical formulations, i.e. medicines ready for consumption by patients and about 350 bulk drugs. Following of the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories and an increasing balance of trade. The pharmaceutical industry, with its rich scientific talents and research capabilities, supported by property protection regime is well set to take on the international market.

1.2 COMPANY PROFILE

Excellence in customer servicing combined with an innovative business approach has enabled us to create a distinguished corporate image in the global market. Incepted in the year 2003 and formerly known as apex laboratories, Apex Healthcare limited is a quality conscious organization working towards providing complete API solution to its clients. We are counted among the most trusted manufacturer, exporter, importer and supplier of a qualitative array of active pharmaceutical ingredients and intermediated. It manufacturing and exporting an extensive range of products including Meloxicam, Alendronate Sodium Trihydrate, Piroxicam, 2-Amino, 5Methyl Thiazole, Etc. Being a quality conscious organization, it is manufacturing its product in strict compliance with ISO, GMP, JDMF and Pharmexcil standards. Customers health and satisfaction is the topmost priority for us and to ensure this, they undertake every possible measure. Their expert team of professionals manufacture range of APIs and intermediates carefully and precisely with the help of modern manufacturing facilities. Combined efforts of our workforce and production facility lead to the development of a highly reliable range of pharmaceutical compositions. Apex Healthcare Limited is produce active pharmaceutical ingredient. It is divided department wise work etc. it is small unit but its efficiency is good. Apex Healthcare Limited is produce nine product and two other product is under process. It is totally check its product and totally test. In this company their product is tested under two steps: 1) Research and development 2) Pilot plant after that raw material is use in the plant

HISTORY AND DEVELOPMENT

Apex healthcare limited a traditional active pharmaceutical ingredients company from India for human as well as veterinary products located in the out skirts of Ankleshwar 350 Km from Mumbai. Initially, was established in 2003 as a partnership firm named Apex Laboratories. On January, 2007, it was converted into a private limited company and named as Apex healthcare limited. Since its inception Apex Healthcare ltd has established a name in the pharmaceutical industry a highly qualified team works at our API plant with state of the art technological systems. Apex healthcare limited is very strong in manufacturing anti-inflammatory and laxatives products. Apex healthcare limited is in the business of manufacturing of active pharmaceutical ingredients/bulk drugs. The active pharmaceutical ingredients are used as anthelmintic, laxative, anti inflammatory and anti osteoporosis. Exports accounts for over 50% of the companys revenue, company exports to countries like Saudi Arabia, Argentina and Japan. Apex Healthcare Limited is always forward looking company that works to ensure customer satisfaction by offering high quality and innovative products. Academic Institutions and high quality laboratories belong to the current outsourcers for some analytical determinations and technical assistance. Maintaining a comprehensive network of highly experienced and internationally recognized professionals; we strongly believe team work is the key to success.

COMPANY OVERVIEW
Name of the company Year of establishment Year of incorporation Legal status Listed at Registered office Apex Health Care Limited. 2003. January 2007. Private limited company. not applicable. 4710, GIDC Industrial Estate, Ankleshwar 393002 Gujarat. Telephone No. Fax No. E-mail Manufacturing facilities Auditors Bankers +91 2646 222525 +91 2646 222525 apexlaboratories@gmail.com Ankleshwar (Gujarat) D.T.Samani & company. Bank of Maharashtra. ICICI bank.

SWOT ANALYSIS
STRENGTHS: Diverse customer base, product range and their applications, and well spread geographical reach add stability to revenue streams. Global reach- the company sells its products in several parts of India and in various countries, such as Saudi Arabia, Argentina, and Japan. Strength of the business model reflected in strong revenue growth at a compounded annual growth rate of 79.67 per cent over the past three years. Good customer profile, which includes, Cipla Limited, Zydus Cadila, and Pfizer Limited (ratedp1+ by CRISIL), Mumbai. Strong growth potential, owing to the growth prospects of the pharmaceutical industry and biotechnology industry owing to increased spending on healthcare. Good quality of infrastructure that is reflected in the company having access to stable power and good labour relationship. Moderate credit protection measures reflected in debt-equity ratio (not including promoter loans) of 0.9 times and net cash accruals at 18.55 per cent of total debt for the year ended march 31, 2007.

 WEAKNESSES: Owing to short track record of the firm and promoters in the same line of business; its ability to sustain the business cycles is yet to be seen. Raw material price volatility may pressurize margins in future. The company does not hedge against foreign exchange price movement; profitability is vulnerable to foreign exchange price movement. Weak profitability reflected in OPBDIT margins of 11.85per cent and PAT margins of 0.77 per cent and return on capital employed of 5.38 per cent during 200607. Moderate liquidity position as reflected in current ratio of 1.23 times for the year ended march 31, 2008. Weak working capital management as reflected in inventory of 179 days and payable of 166 days for the year ended March 31, 2008. Weak account policies- the company has not provided for deferred tax. OPPORTUNITIES: Significance export potential Marketing alliances to sell MNC products in domestic market Contract manufacturing arrangement with MNCs Potential for development India as a center for international clinical trials. Niche player in global pharmaceutical Research & development.

 THREATS: Product patent regime poses serious challenge to domestic industry unless it invests in research and development. Research & development efforts of Indian pharmaceutical companies hampered by lack of enabling regulatory requirement. For instance, restriction on animal testing outdated patent office. Drug price control order puts unrealistic ceiling on product price and prevent pharmaceutical companies from generating invisible surplus. Counterfeit medicines market.

MILESTONE OF THE COMPANY

An ISO 9001:2000 certified manufacturing company. Manufacturing excellence. Vertical integration API Fully integrated and state of the art API manufacturing facility. Quality is topmost priority in all our manufacturing process. Complying with cGMP guidelines. Well-equipped microbiological laboratory. Expert in market development.

PRODUCT PROFILE
NAME OF THE PRODUCTS:-

1. Meloxicam 2. Alendronate Sodium Trihydrate 3. Piroxicam 4. Sodium Picosulphate 5. Oxyclozanide 6. Bisacodyl 7. Piroxicam beta cyclodextrin 8. Tenoxicam. The company has also launched Piroxicam beta cyclodextrin and Tenoxicam before six months, but has not started its commercial exports till now. The average price of the product is about Rs.4, 500 per Kg. The company sells bulk drugs in powder form in packs of 1 kg to 25 kg. The company utilizes 70 percent of its installed capacity

NSAID/ANTI-ARTHRITIS
Brand-Names PIOPEX-20 DT ACECLOPEX-P DICLOPEX-P NIMUPEX-PLUS NIMUPEX-PLUS SUSP CARATIPEX-D CARTIPEX OSTEOPEX-70 Compositions Piroxicam 20mg Aceclofanac (100mg+paracetamol 500mg) Diclofenac Potassium 50mg+paracetamol 500mg Nimesulide 100mg+Paracetamol 500mg Nimesulide 250mg+Paracetamol 120mg Glucosamine Sulphate 1500mg+diacerine 50mg Glucosamine Sulphate 1500mg Alendronate sodium 70mg Form Tablets Tablets Tablets Tablets Syrup Tablets Tablets Tablets Packing. 10x10 10x10 10x10 10x10 60ml 10x10 10x10 10x10

GASTROINTESTINAL (ANTI-ULCER/ANTI-EMETICS/LAXATIVES)
Brand-Names RABIPEX DSR PANTOPEX DSR VOMIPEX DT DULCOPEX SOFTIPEX Compositions Rabeprazole 20mg+Domperidone 30mg Pantoprazole 40mg + Domperidone 30mg Ondansetron 4mg Bisacodyl 5mg Sodium Picosulphate 10 mg Sodium Picosulphate3.33mg+Liq. Paraffin 1.25mg+Milk of Magnesia 3.75 mg Form Packing.

Capsule 10x10 Capsule 10x10 Tablet Tablet Tablet 10x10 10x10 10x10

CREMAPEX

Syrup

170 ml

ANTI-BIOTICS:
Brand-Names PODOPEX SUSP PODOPEX-50 DT PODOPEX-100 PODOPEX-200 CEFIPEX-50 DT CEFIPEX- 100 CEFIPEX- 200 MOXIPEX-CV DT. MOXIPEX-CV SUSP MOXIPEX-CV 375 MOXIPEX-CV 625 MOXIPEX-XL AZIPEX 100 SUSP AZIPEX 200 SUSP AZIPEX-500 AZIPEX 250 LEVOPEX 500 OFLOPEX 200 OFLOPEX OZ OFLOPEX-OZ SUSP Compositions Cefpodoxime proxetil 50mg Cefpodoxime Proxetil 50mg Cefpodoxime Proxetil 100mg Cefpodoxime Proxetil 200mg Cefixime 50mg Cefixime 100mg Cefixime 200mg Amoxycillin200mg+Clavulanic acid 28.5mg Amoxycillin200mg+Clavulanic acid 28.5mg Amoxycillin250mg+Clavulanic acid 125mg Amoxycillin 500mg+Clavulanic acid 125mg Amoxycillin 250mg+Dicloxaciliin 250mg Azithromycin 100mg Azithromycin 200mg Azithromycin 500mg Azithromycin 250mg Levofloxacin 500mg Ofloxacin 200mg Ofloxacin 200mg + Ornidazole 500mg Ofloxacin 50 mg +Ornidazole 125mg Form Dry syp Tablet Tablet Tablet Tablet Tablet Tablet Tablet Dry syp Tablet Tablet Capsule susp susp Tablet Tablet Tablet Tablet Tablet Bottel Packing. 30 ml 10x10 10x10 10x10 10x10 10x10 10x10 10x6 30 ml 10x10 10x10 10x10 15 ml 15 ml 10x3 10x6 10x10 10x10 10x10 30 ml

ANTI-COLD-COUGH PREPRATIONS:
Brand-Names RESPIPEX-AX Compositions Terbutaline 1.25mg+ Ambroxol15mg+Guafenesin 50mg+menthol Dextromethorphen 10mg+phenylephrine Hcl 5mg+CPM 2mg+Para 250mg Dextromethorphen 10mg+phenylephrine Hcl 5mg+CPM 2mg+menthol Levocetrizine-5mg +Phenylpropanolamine-12.5mg +Para-500mg +Ambroxol 60mg tabs Form Syrup Packing. 100/60 ml

RESPIPEX-P

Syrup

100/60 ml

RESPIPEX-D

Syrup

100/60 ml

MUCOPEX-A

Tablet

10x10

HEAMATENICS AND MULTI-VITAMINS:

Brand-Names FOLIPEX HEAMOPEX-Z FERRO-S NERVIPEX OD CALCIPEX -A Compositions Folic Acid 5mg Ferrus Fumarate 200mg+Folic Acid 1.5mg+Zinc sulph.61.8mg+VitaB12 15mcg+vitaB6 25mg Ferrous Ascorbate 100mg+Folic Acid 1.5mg+Zinc 22.5mg Methyl Cobalamine 1500mg+Folic Acid 1.5mg+Pyridoxine hcl3mg+ALA 100mg Calcium Citrate 1000mg+ Alfacalcidol 0.25mcg Calcium citrate1000mg +mag.hydroxide100mg +zinc sulphate4mg+vita-D3 200iu Vita-A 1600IU+Vita-D3 100IU+Vita-E 5mg+B1 1mg+B12-0.5mcg+D-Pantothal 1.25mg+Nicotinamide 15mg L-Lycin 5mg+Pott.Iodine 50mcg+Copper sul.100mcg+Zinc sul.22.2mg Form Tablet Tablet Tablet Tablet Tablet Packing. 10x10 10x10 10x10 10x10 10x10

CALCIPEX VITAPEX-PLUS

Tablet Syrup

10x10 200 ml

ANTI-FUNGAL:
Brand-Names FLUCOPEX Compositions Fluconazole 150mg Form Tablet Packing. 1x1

ANTHELMINTICS:
Brand-Names ALBIPEX-400 ALBIPEX-PLUS Compositions Albendazole 400mg Albenzole 400mg +Ivermectin 6mg Form Packing Tablet Mono Pack Tablet Mono Pack

STRENGTHS ->An ISO 9001- 2008 certified company ->A WHO GMP certified company ->Manufacturing facilities are as per CGMP guidelines ->Japanese accreditation for facilities ->JDMF of MELOXICAM

MANUFACTURING FACILITIES Multipurpose manufacturing production of fully integrated and state of the art

facility API's

equipment

enables from few

and

intermediates

kilograms to tens of tons under the conditions of cGMP guide lines. Apex facilities are regularly inspected by FDA and other regulatory authorities.

MARKETING We focus on our export orientation through the development of partnership in contract co-

manufacturing, co-development,

registration,

marketing and sales as well as by offering our cooperation through various in and out licensing

opportunities.

CUSTOMER SATISFACTION Our primary focus is on providing excellence to our customers. Accepting that time and quality create durable competitive advantages for our customers. We are committed to various norms and standards

including ISO9001:2008, cGMP both in action and spirit.

QUALITY CONTROL AND ASSURANCE Apex is committed to the highest quality standard having well equipped analytical laboratory and

microbiological laboratory. Apex api's are specified and analyzed according to relevant pharmacopoeias and in house specifications which compares with the relevant reference standards. It is necessary for controlling the raw material, intermediates, final products, auxiliary materials and packing materials confirms to current GMP. High quality of final product mainly depends on the careful selection of starting materials. Standard conditions of production and up to date technology ensure consistently high product quality. Analytical methods and specifications are both developed and validated by an experienced professional team that works in the analytical development section.

ECOLOGY AND SAFETY -Emphasis towards modifying the processes to reduce effluents.

-Maintain green belt as required. -Training of employees on environmental awareness. -Occupational health surveillance of employees. Apex is fully comply with the rules and regulations under manufacture, storage and import of hazardous chemicals rules, 1989 as amended in October, 1994 and January, 2000 [India] & is fully comply with the rules and regulations with regard to handling and disposal of hazardous wastes in accordance with the hazardous wastes[management and handling] rules, 2003[India]

EXPORTS Our efforts are directed to satisfy our various customers based across the globe, we operate in the most varied markets: Middle east: Egypt, Jordan, Syria, Iraq, Saudi Arabia South east Asia: Bangladesh, Pakistan, Malaysia Latin America: Brazil, Argentina, Chile, Peru, Colombia Central America: Mexico, Guatemala, Cuba, Santo Domingo

Europe: Germany, Switzerland, Uk , Italy, Spain

INTRODUCTION

Financial management means raising of adequate funds at the minimum cost and using them efficiently in business. It has to manage the finances in such a way that the goal of business, say, profit maximization realized. Each and every organization needs to manage the funds in and going out of the firm. This is done through financial management. It is the most important part of the organization in order to maximize the wealth of the firm and the value of the company to the owner or shareholders increases. Thus, in order to manage the finance of the firm financial department needs the finance manager. The finance manager has to undergo various plants to mobilize the required funds from various sources when they are required at an acceptance cost. The objective of the finance manager is to increase or maximize the wealth of the owners by increasing the value of the firm through market price of the shares. The finance department of Apex Healthcare Limited is full-fledged, as it has become a huge company where it has many subsidiaries and formulation. One of the group companies is shivram incorporation which works for manufacturing of mono chloric acid.

ORGANISATION STRUCTURE

General Manager (Finance)

Accounting Manager

Superintendent Manager

Assistance Manager (Cash)

Assistance Manager (Creditor)

Assistance Manager (Salary)

Officer

Officer

Officer

FINANCIAL PLANNING
Financial planning is pre-requisite for the smooth functioning of finance department and for the purpose of growth and expansion of business activities.

At Apex Healthcare Limited they have planning about long term as well as short term financial planning. Short term financial planning is for monthly planning and the long term financial planning is for yearly planning. Financial planning and decision making are undertaken at central level decision are made in the contest f organization objectives. The investment decision of a firm is generally known as the capital budgeting or capital expenditure decision. A capital budgeting may be defined as a firm decision to invest its current funds most efficiently in the long term assets in anticipation of an expected flow of benefits over a series of years. The long term assets are those which affect the firms operations beyond the one year period. The firms investment decision would generally include expansion, acquisition, modernization and replacement of the long term assets sales of a division or business is also analyzed as an investment decision.

The following are the features of investment decision: The exchange of current funds for future benefits. The future benefits will occur to the firm over a series of years. The funds are invested in long term assets. Review of latest capital project with reference to project cost, project financing and its implementation.

CAPITAL STRUCTURE OF THE COMPANY

Capital Structure refers to the composition of sources of funds that is company has used to raise the finance needed by it for its business. Generally the management of the company plans an ideal capital structure in advance and raise funds accordingly as and when need for fund arises. The sources of fund which are included in capital structure can be divided into two groups:

(1) Those which impose the burden of interest and dividend payments on the company. (2) Those which impose no such burden on the company. Ideal capital structure can be formulated by combining debts and equities judiciously. The optimum or ideal capital structure refers to that capital structure which maximizes market value of the companys shares or minimizes the average cost of its capital.

Capital structure is the permanent finance of the firm represented by long-term debt, preferred stock and net worth. Capital structure of the company shows how or through which sources its capital has been raised by issuing equity shares, preference shares, debentures or any two of them. This influence both return and risk of the shareholders. It has an effect on value of the firm and its cost of capital.

The capital structure may be presented as follows:

Capital structure

Owned capital (1) Equity share capital (2) Pref. share capital (3) Share premium (4) Reserves & surplus

Debt capital (1) Debentures (2) Long term Loans & other liabilities.

The capital structure of Apex healthcare limited as under follow: PARTICULARS Authorized share capital 1500000 Equity shares of Rs. 10/- each. Issued, subscribed and paid-up share capital 1500000 equity shares of Rs. 10/- each fully paid-up Secured loans Unsecured loans 1,06,15,495.50 11,52,570.23 1,50,00,000.00 1,50,00,000.00 AMOUNT

DIVIDEND POLICY
Dividend policy is to determine how much earnings are to be distributed among the shareholders and how much amount is to be retained in the firm. Dividend payout ratio is the percentage of earnings paid by way of dividend, while retention ratio is the percentage of earnings retained by the firm, not distributed as dividend. Dividend policy decision has a significant effect on the credit system of the firm, its price of shares and its future growth. If the firm follows a liberal dividend policy, it will not be able to build sufficient internal resources and its future growth may be leading to fall in the value of the firm. Another consequence of the liberal dividend policy is that the shareholders will receive higher dividends and would be satisfied because most of the investors have preference for current income. Another important aspect of dividend policy is whether the dividend decision is taken first or whether the retention decision should be made first. There is no rule and it all depends upon the circumstances available in the firm. If the firm has on hand some investment programme of growth, expansion or replacement and which requires a particular amount to be invested, then the retention decision is first taken. But almost generally the dividend decision is made first.

Apex healthcare limited do not declared any dividend for the financial year 2009-10 because with a view to conserve the resources and retaining them for the future prospects.

DETAIL OF COMPANY DEPARTMENT 1) Ware house department

Three areas are available I. II. III. I. Quarantile area: Under test area Approved area Quarantile area: in this department raw material is put the quarantine area which raw material drum is put in this area. This drum is marked by green sticker. II. Under test area: in this department raw material is taken under test by quality control department .quality control department is marked by yellow sticker. III. Approved area: in this department raw material is checked by quality control department and marked by blue sticker. 2) Quality control department In this department raw material is check by Q.C chemist and Q.C in charge. After that quality control department is marked under test sticker. After that raw material sample is taken by quality assurance department.

3) Quality assurance department In this department raw material is check by Q.C department in microbiological laboratory. Quality assurance department check that which process is better useful for high quality product.

4) Research and development department In this department employees are talented person because this department research about which process is better use in the big plant.

5) Production department In this department production manager check the entire product. Production manager is check how much kilogram raw material is use in the plant and how much kilogram production is achieved.

6) Microbiological department This laboratory tests the raw material, organic, inorganic, and solvent and proves the solubility test and color test etc.

7) Packaging department After completion of the product, packaging and labeling of product is done in this department. the

FINANCE FUNCTIONS
It may be difficult to separate the finance functions from production, marketing and other function, but the functions themselves can be readily identified.

The functions of raising funds, investing them in assets and distributing returns earned from assets to shareholders are respectively known as financing decision, investment decision, and dividend decision.

A firm attempts to balance cash inflows and outflows while performing these functions. This called liquidity decision, and we may add it to the list of important finance decisions or functions.

Following are the finance function: Long term asset-mix or investment decision Capital-mix or financing decision Profit allocation or dividend decision Short-term asset-mix or liquidity decision.

A firm performs finance functions simultaneously and continuously in the normal course of the business. They do not necessarily occur in a sequence. Finance functions call for skilful planning, control and execution of a firms activities.

INVESTMENT DECISION
Investment decision of the firm is known as the capital budgeting and capital expenditure analysis. A capital budgeting decision may be defined as the firms decision to invest its current funds most efficiently in the long term assets in anticipation of an expected flow of benefits over series of years.

A firms investment decisions involve capital expenditures .They are, therefore, referred as capital budgeting decisions. A capital budgeting decision involves the decision of allocation of capital or commitment of funds to long-term assets that would yield benefits in the future. Following are the important aspects of investment decisions: The evaluation of the prospective profitability of new investments The measurement of a cut-off rate against that the prospective Return of new investment could be compared. Future benefits of investments are to measure and cannot be predicted with certainty. Risk in investment arises because of the uncertain returns. Investment proposals should, therefore, be evaluated in terms of both expected return and risk. Besides the decision to commit funds in new investment proposals, capital budgeting also involves replacement decisions, that is, decision of recommitting funds when an asset becomes less productive or non-profitable.

Apex healthcare limited is in the working from the last 8 years so the company is doing the investment analysis for the purpose of the enlarging the company to achieve the maximum wealth. So we can say that the company follows the expansion of the existing types of the investment decision.

The company evaluated its capital budgeting decision on the basis of the cash flow. The financial manager making the estimated cash flow of the particular investment and find that when the investment come back or we can say that the investment is at the breakeven point.

Investment Analysis Ratio

EPS Analysis Net profit available for equity share holders No. of equity share 22,14,183.44 15, 00,000 = 1.48

CHAPTER 2 LITERATURE REVIEW

LITERATURE REVIEW
Risk is uncertainties resulting in the adverse variation of profitability or in losses. In the banking universe there is large number of risks. There has been a significant extension of focus, from traditional qualitative risk assessment towards the quantitative management of risk, due to both evolving risk practices and strong regulatory incentives. The different risk needs careful definition to provide sound bases serving for quantitative measures of risk. WORKING CAPITAL is the one of the important risk while lending money to any client thats why it has given important aspect in the Basel committee recommendation that the government is planning to implement in Indian Banking system.

Working capital is defined as the difference between assets and liabilities. It measures how many liquid assets are available for a business to use for growth opportunities. A lack of working capital can really hold a business back from reaching their full potential.

Working capital includes Business Micro Loans put out by the Small Business Administration (SBA), credit card receipt advances, account receivable factoring, business credit cards, sale and leaseback, and a standard business bank loan. It is important to separate your personal credit from your business credit.

Businesses use capital for construction, renovation, furniture, software, equipment, or machinery. It is also commonly used to purchase inventory, or to make payroll.

Working capital is essential for any business to succeed. It is becoming increasingly important to have access to more working capital when you need it. The number one reason most people look at a balance sheet is to find out a company's working capital (or "current") position. It reveals more about the financial condition of a business than almost any other calculation. It tells you what would be left if a company raised all of its short-term resources, and used them to pay off its short term liabilities. The more working capital, the less financial strain a company experiences. Working Capital is the easiest of all the balance sheet calculations. Here's the formula: Current Assets - Current Liabilities = Working Capital Today for the most effective management of business activities, financial Management practices do provide a sound and effective framework for management of assets. It has been observed that investment in fixed assets has been receiving more emphasis in both management areas and research. On the other hand effective working capital management, which has been receiving little attention from researchers will yield more significant results and for this reason demands more serious attention from researchers and management.

C R Sathtamoorthp (2001) in his article on Working capital in selected Cooperatives in Botswana. In his study he has emphasized on working capital management. The main objectives of the study were: ascertain how the current assets are financed, to discover the relative importance of various current assets components, to establish trends for the data over periods of years, to draw conclusion on the effectiveness of the working capital management.

While studying the above objectives, he has emphasized on working capital, cash management, just in time in context to Bostwana Cooperatives. His conclusion were based on current ratio, composition of current assets- its financing policies, trend of stock retention and cash holding. In his article he has given references of researcher who have already conducted survey in the related field. He has quoted Parosh and Tamari (1978) included current ratio as one of the variables in the predictor model developed for Israeli companies. Taffler (1977) developed model to predict business failures included a variant on working capital management as a component. The multi-variable model developed by Altman (1968) for US based organization included working capital management is one of the companies.

According to Prof. Henry G. Gethmann and Herbert E. Dangall, working capital is the excess of current assets over current liabilities. And Prof. C W., any comprehensive discussion on the working capital includes the excess of current assets over current liabilities. An overwhelming support to this view has been advanced by some renowned financial analysts, for example, Dr. Colin Park and Prof. Jhon W.Gladson, most commonly working capital is defined as the excess of current assets of a business (cash, account, receivable, inventories) over current, item owned to employees and others (such as salaries and wages payable, taxes owned to government). (N K Shrma, 2001)

Working capital management: Meaning.

Working capital management includes issues relating to the management of current assets. The management of current assets is similar to that of fixed assets in the sense that in both cases a firm analyses their effects in its return and risk. The management of fixed and current assets, however, differs in three important ways. First, in managing fixed assets, time is a very important factor; consequently, discounting and compounding techniques play a significant role in capital budgeting and a manor one in the management of current assets. Second, the large holding of current assets, especially cash, strengthens the firms liquidity position (and reduces risk), but also reduces the overall profitability. Thus, a risk-return trade off is involved in holding current assets.

Third, levels of fixed as well as current assets depend upon expected sales, but it is only current assets which can be adjusted with sales fluctuations in the short run. Thus, the firm has a greater degree of flexibility in managing current assets Working capital is defined as the excess of current assets over current liabilities. Current assets are those which will be converted into cash within the current accounting period or within the next year as a result of the ordinary operation of the business. (Ravi M Inshore, 2002) Working capital is also known as Circulating capital, fluctuating capital & revolving capital. The magnitude and composition keep on changing continuously in the course of business. (N K Sharma, 2001)

Working capital is the difference between the inflow and out flow of funds (P V Kukri & B G Sathyprasad, 2002). Working capital management is an integral part of overall corporate management. A management has to be alert to the internal and external and environmental developments and constantly plan and review its working needs and strategy. According to Louis Brand, (2000) we need to know when to look for working capital fund, how to use them and how to measure plan and control of them. According to R M Srivastva, (1998) working capital management is a significant part of business decision and is a major concern to finance manager in as much as accomplishment of value maximization goal depends essentially on the present working capital decision, maintaining optimal level of working capital is the crux of the problem with which a finance manager is seriously concerned because problem of trade off between risk and return is involved. A firm is required to carry adequate amount of working capital so as to carry on the productive and distributive activities smoothly. Working Capital management is management for the short-term. This is of critical importance to a firm. As pointed out in the text, managers spend about 70% managing for the short-term. This Makes sense. Every day companies take in money, write receipt, balance cheque books, record receivables records, manage inventory and the like also; shortterm management should not be discounted. As the old saying goes, If you can budgets may be utilized in managing working capital. (www.studyfinance .com/lessons/workcap.html) Background could be secondary data from the literature review. It is composed primarily of literature review and related research. It can be the information regarding the research which helpful to understand the research analysis properly.

INTRODUCTION
Working capital is one of the most fundamental measures of companys financial strength. If company possesses a significant value of liquid assets, it can easily fund its day-to-day business obligation. Working capital also provides insight on how efficiently a companys management able to oversee the company operation. The speed at which the company is able to manage its short term assets and short term liabilities is also crucial to its business success. Keeping working capital level to the minimum required for efficient operation keeps cost down. This means controlling buying, handling, storing, and managing stock property.

Working capital of a company is like lifeblood of human body. Working capital management is the administration of the firms current assets and the financing needed to support the current assets. Current assets are those assets which will be converted into the cash within the current accounting period or within the next year as a result of the ordinary operation of the business. They are cash or nearly converted cash resources. They includes Cash and Bank balance, Receivables, inventory, Prepaid expenses, Short term advances, Temporary investment. Cash is used to buy raw-materials, to pay wages and to meet other manufacturing expenses. Finished goods are produced further held as inventories and when inventories are sold account receivables are created. Then the collection of account receivables brings cash into the firm and the cycle starts again.

Working Capital = Current Assets Current Liabilities

Cash

Inventory

Receivables
Flow of current assets Current liabilities are the debts of the firm that have to be paid during the current accounting period or within a year. This includes creditors for goods purchased, outstanding expenses, short term borrowing, advances received against sales, taxes and dividends payable, and other liabilities maturing within a year. Working capital is also known as circulation capital, fluctuating capital and floating capital. Current assets 1. 2. 3. 4. 5. 6. 7. Inventories Raw Material And Components Work In Progress Finished Goods Debtors Loans And Advance Cash And Bank Balance

Current liabilities 1. 2. 3. 4. 5. Creditors Trade Advances Short Term Borrowings Commercial Banks Provisions

CONCEPTS OF WORKING CAPITAL

1. Gross working capital It refers to the firms investment in current assets. There are two characteristics of current assets like: Short span life Swift transformation into other assets forms

2. Net working capital It refers to excess of current assets over current liabilities.net working capital can be positive or negative. A negative working capital will arise in case when current liabilities are more than current assets and positive working capital will occur when current assets are more than current liabilities. Current credit soundness is indicated by positive NWC position, which is of major concern to investors and bankers. It is measured by the current ratio obtained by dividing the rupee value of current assets the current ratio obtained by rupee value of current liabilities. Larger the ratio the more solvent the firm, i.e. in the event of bankruptcy, falling prices of inflated values, the book value of current assets could shrink considerably the firms creditors would still be assured of payments. However from managements point of view a high ratio may indicate poor planning since excessive amounts are tied up in on productive current assets, which tend to produce a lower income.

IMPORTANCE OF WORKING CAPIITAL

Working capital is just like the hart of business. If it becomes weak, the business can hardly prosper and survive. No business can run successfully without an adequate amount of working capital. The following are a few advantages working capital in the business. Adequate working capital enables a firm to avail cash discount facilities offered to it by the suppliers. The amount of cash discount reduces the cost purchase. Adequate working capital enables a firm to make prompt payment. Making prompt payment is a base to create and maintain goodwill. The provision of adequate working capital facilitates to meet situations of crisis and emergencies. It enables a business to withstand of depression smoothly. It enable a firm to operate its business more efficiently because there is no delay in getting loans from banks and others on easy and favorable terms. It permits the carrying of inventory at a level that would enable a business to server satisfactorily the needs of customers. That is it ensures regular supply of raw materials and continues production.

Determinants of the Working Capital

Nature of business Market and demand Technology and Manufacturing policy Credit policy Supplies credit Operating efficiency Inflation

Estimating Working Capital

The most appropriate method of calculating the working capital needs are as Follows: Current assets holding period: To estimate working capital requirement on the basis of average holding Period of current assets and relating them to costs based on the Companys experience in the precious years. This method is essentially based on the operating cycle concept.

Ratio of Sales: To estimate working capital requirement as a ration of sales on the Assumption that current assets change with sales.

Ratio of fixed investment: To estimate working capital requirement as a percentage of fixed assets.

Operating Cycle: Operating cycle is the time period of acquisition of Resource,

Manufacturing of Product, and Sale of the Product.

CHAPTER 3 RESEARCH METHODOLOGY

3.1 PROBLEM DEFINITION I had joined the APEX HEALTHCARE LIMITED for the purpose of the summer Internship Training Program on the requirement of the GTU. I want to take the finance as my electives in the final year of the MBA so I am interested to do the project in the finance. So for that purpose I asked for the mini project topic in the company in which they can give the full information support. I talk with the Mr.UMESH Mendapara (director) for the purpose. He suggests the Working Capital Management as the topic of the mini project and He is ready to give me the greater detail regarding the working capital management. Research Questions: Every research project starts with the research questions. And every research question to be fact oriented, information gathering question. In the word of definition the research question is the hypothesis of choice that best states the objective of the research study. It is more specific management question that must be answered. Following is the research question of my mini project research. How the company manage it Working Capital?

3.2 RESEARCH OBJECTIVE Investigate questions are questions must answer to satisfactorily arrive at a conclusion about the research question. To formulate them, a general research question break into specific questions about which to gather data. On the basis of the above mentioned investigate questions formulation process, in this project investigate question might be: What are the policies of the working capital management? How company manages it receivable? How company manages it inventory? How company manages it cash? So above are the investigate question as well as the objectives of the study which have to be fulfilled.

3.3 RESEARCH DESIGN Research design is the plan and structure of investigation so convinced as to obtain answer to research questions. The plan is the overall scheme of program of the research. It includes an outline of what to do from writing hypothesis and their operational implications to the final analysis of data.

Research design expresses both the structure of the research problem the framework, organization, or configuration of the relationships among variables of a study and the plan of investigation used to obtain empirical evidence on those relationships.

Here I am doing the research on the topic - working capital management of the APEX HEALTHCARE LIMITED. So it can be said that the research design might be the descriptive where I have to find out the answer of the questions like who, what, where, when, how much regarding the working capital management.

3.4 DATA COLLECTION METHOD This part of the report described the specifics of the gathering the data. It include that the secondary data source from where the data is collected. I had used the two technique for the collecting the data these are. Mentoring the annual report of the company which is prepared by the company at the end of the year, and I had used the literature called IM Pandeys financial Management book as reference book for the research. Communicating with the financial officer (face to face as well as with the help of mail) for the purpose of the getting the policies regarding the working capital.

3.5 ANALYSIS TOOLS & TECHNIQUES The data is collected through secondary method. I have used annual report of Apex healthcare limited of year 2008-09 2009-10 for data analysis.

3.6 LIMITATION OF RESEARCH Nothing is perfect; all research studies have their limitation so my project has also the limitations which are mentioned below. Project not covered the whole data as well as the full company view. Whatever data is required to do the project completely is not given by the company due to the privacy. It is not possible to meet every concern topic person in the company due to the companys norms. Working capital is very wide concept and include very small but important things such as inventory management technique, receivable policies etcnot covered on full volume.

CHAPTER 4 DATA ANALYSIS & INTERPRETATION

DATA ANALYSIS & INTERPRETATION Data analysis is the part of the research where exactly work is done to solve the research questions. Here the data which is collected for the purpose of the research are analyzed on the basis of the background which I mentioned in the starting of the report.

According to the net working capital the working capital of the company is Net working capital = current assets current liabilities

CALCULATION OF WORKING CAPITAL REQUIREMENT particular Current assets Inventories Sundry Debtors Cash & Bank 889000 Balance Loans Advances Total Current liabilities Liabilities Provisions Total capital 6117000 102405 6219405 5645000 115301 5760301 7283699 7078921 132976 7511897 8307254 7659519 240075 7899594 6084792 15848460 316014 16164474 6142219 10814000 13024000 15519151 13984386 22306693 & 873000 1049000 1542999 1519484 2528714 95000 440427 764697 479729 5474000 3578000 8326000 3554000 4860400 8675325 5205175 6495030 10591144 8707106 2005-06 2006-07 2007-08 2008-09 2009-10

Net working 4594595

Net working capital

7 6 5 4 3 2 1 0 YEAR 2005-06 2006-07 2007-08 2008-09 2009-10

Efficiency ratio:
WORKING CAPITAL TO SALES The working capital turnover ratio shows the relationship between sales and working capital. It can be calculated by Working capital turnover ratio = sales / Working capital Year Sales Working capital Working capital turnover ratio (times) 2005-06 2006-07 2007-08 2008-09 2009-10

1,05,91,000 2,18,78,000 1,80,77,123 3,31,17,980 4,44,24,140 1,08,39,000 1,24,71,000 1,55,19,151 1,39,84,388 2,23,06,695 0.98 1.75 1.16 2.37 1.99

working capital turn over ratio

2.5 2 1.5 1 0.5 0 year 2005-06 2006-07 2007-08 2008-09 2009-10

INTERPRETATION: This ratio helps to measures the efficiency of the utilization of networking capital. It signifies that, for an amount of sales a relative amount of working capital is needed. If any increase in sales is contemplated, working capital should be adequate and thus, this ratio helps management to maintain the adequate level of working capital. From the above table it is observed that the company is maintaining working capital as per sales requirement i.e. 2005-06,2006-07,2007-08 it was 0.98, 1.75,1.16 respectively.

INVENTORY TURNOVER RATIO Inventories constitute a major element of working capital. It is therefore, important that investment in inventory is property controlled. The objectives of inventory management are, to a great extent, similar to the objectives of cash management. Inventory Management covers a large number of problems including fixation of minimum and maximum levels, determining the size of inventory to be carried, deciding about the issues, receipts and inspection procedures, determining the economic order quantity, proper storage facilities, keeping check over obsolescence and ensuring control over movement of inventories.

Year Cost of goods sold Average inventory Inventory turnover ratio(times)

2005-06

2006-07

2007-08

2008-09

2009-10

52,32,000 1,92,85,000 1,37,19,517 2,56,05,763 3,06,11,446 47,65,000 1.10 69,00,000 1.34 1,23,52,766 1.56 50,32,788 2.73 78,98,159 3.87

inventory turnover ratio

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 year 2005-06 2006-07 2007-08 2008-09 2009-10

INTERPRETATION: This ratio indicates the effectiveness and efficiency of the inventory management. The ratio shows how speedily the inventory is turned into accounts receivable through sales. The higher the ratio the more efficiently the inventory said to be managed vice versa. From the above table it is noted that the company is maintaining higher inventory turnover, which means inventory is managed more efficiently from 200506, 2006-07, 2007-08, 2008-09 & 2009-10 i.e.1.10, 1.34, 1.56, 2.73 & 3.87 respectively maintained a constant ratio regarding inventory.

CURRENT ASSETS TURN OVER RATIO Year sales 2005-06 2006-07 2007-08 2008-09 2009-10

1,05,91,000 2,18,78,000 1,80,77,123 3,31,17,980 4,44,24,140

Current assets Current asset turnover ratio(times)

10814000

13024000

15519151

13984386

22306693

0.98

1.68

1.16

2.37

1.99

current asset turnover ratio

2.5 2 1.5 1 0.5 0 year 2005-06 2006-07 2007-08 2008-09 2009-10

INTERPRETATION: This ratio indicates the efficiency with which current assets turn into sales. A higher ratio implies by and large a more efficient use of funds. Thus a high turnover rate indicates reduced lock-up of funds in current assets. An analysis of this ratio over a period of time reflects working capital management of a firm. From the above table it is observed that the company maintained a current assets to turn over ratio i.e. 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10 it was 0.98, 1.68, 1.16, 2.37, 1.99 respectively.

LIQUIDITY RATIO:
CURRENT RATIO The current ratio is the ratio of total current assets and total current liabilities. The current ratio of firm measures its short term solvency that is its liabilities meet short term obligation. A satisfactory current ratio would enable a firm to meet its obligation even when the value of the current assets declines. Current Ratio = Current Assets / Current Liabilities

Year Total current Assets Total current liabilities Current ratio

2005-06 1,08,39,000

2006-07 1,24,71,000

2007-08

2008-09

2009-10 2,23,06,695

1,55,19,151 1,39,84,388

61,47,000

56,45,000

72,11,898

78,99,595

1,61,64,474

1.76

2.21

2.15

1.77

1.38

current ratio
2.5 2 1.5 1 0.5 0 2005-06 2006-07 2007-08 2008-09 2009-10 current ratio

INTERPRETATION: The current ratio is the composition of current asset. It measures the ability of the firm to meet its current liabilities current assets get converted into cash in the operating cycle of the firm and provide the funds needed to pay current liabilities. Higher the current ratio, the greater the short-term solvency. The general norm for in India is 1.33, internationally it is 2.From the above table it clears that the company is maintaining a higher current ratio i.e. 2005-06, 2007-08, 2007-08, 200809 & 2009-10 it was 1.76, 2.21, 2.15, 1.77, 1.38 respectively. ACID TEST RATIO OR QUICK RATIO The term quick assets refer to current assets, which can be converted in to cash immediately or at short notice without definition of value. The Acid test ratio is a measure of liquidity designed to overcome this defect of the current ratio. Acid Test Ratio or Quick Ratio = Quick Assets / Current liabilities.

Year Quick Assets Total current liabilities Acid test ratio

2005-06 53,65,000 61,47,000

2006-07 41,45,000 56,45,000

2007-08

2008-09

2009-10

1,06,58,751 87,79,213 1,17,15,551 72,11,898 78,99,595 1,61,64,474

0.87

0.73

1.48

1.11

0.72

Acid test ratio

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 year 2005-06 2006-07 2007-08 2008-09 2009-10

INTERPRETATION: Quick ratio is a fairy stringent measure of liquidity. It is based on those current assets, which are highly liquid an inventory is excluded, as it is slow moving. A quick ratio of 1:1 is usually considered satisfactory through it is again a rule of thumb only. From the above table it is observed that the company had fluctuation in acid test ratio i.e. in 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10 it was 0.87, 0.73, 1.48, 1.11, 0.72 respectively.

DEBTOR TURNOVER RATIO Trade credit arises when a firm sells its products or services on credit and does not receive cash immediately. It is an essential marketing tool, acting as a bridge for the movement of goods through production and distribution stages to customers. A firm grants trade4 credit to protect its sales from the competitors and to attract the potential customers to buy its products at favorable terms. Trade credit creates accounts receivable or trade debtors that the firm is expected to collect in the near future. The customers from whom receivable or book debts have to be collected in the future are called trade debtors or simply as debtors and represent the firms claim or assets. A credit sale has three characteristics. 1. It involves an element of risk that should be carefully analyzed. Cash sales are totally riskless, but not the credit sales as the cash payment are yet to be received. 2. It is based on economic value. To the buyer, the economic value in goods or services passes immediately at the time of sale while the seller expects an equivalent value to be received later on. 3. It implies futurity. The buyer will make the cash payment for goods or services received by him in future period. The analysis of the debtors turnover ratio supplements the information of the times the amount of credit sale is collected during the year. The ratio measures how rapidly debts are collected. The high ratio is indicative of shorter time day between credit sales and cash collection. A low ratio shows that debts are not being collected rapidly. Debtor turnover ratio = Net credit Sales / Average debtors.

Debt collection period = 12 month / debtors turn over. Year 2005-06 2006-07 2007-08 2008-09 2009-10

Net credit sales Average debtors Debtor turnover ratio(time)

67,77,000

1,05,91,000

2,18,78,000

3,31,17,980

4,44,24,140

21,94,000

35,66,000

6,11,4,662

75,85,177

76,01,068

3.08

2.97

3.58

4.37

5.84

Debtor turnover ratio

7 6 5 4 3 2 1 0 YEAR 2005-06 2006-07 2007-08 2008-09 2009-10

INTERPRETATION: It shows how many times receivable (debtors) turnover account during the year. Higher the debtor turnover the greater the efficiency of credit management. From the above table it is observed that, i.e.2005-06, 200607, 2007-08, 2008- 09 & 2009-10 it was 3.08, 2.97, 3.58, 4.37, 5.84 which means the company was following greater efficiency of credit management.

DEBTORS COLLECTION PERIOD =DEBTORS/SALES (365) Year Debtors Sales Days 2005-06 35,78,000 67,77,000 193 2006-07 35,54,000 1,05,91,000 122 2007-08 86,75,325 2,18,78,000 145 2008-09 52,05,175 3,31,17,980 57 2009-10 87,07,106 4,44,24,140 72

Debtor collection period

250 200 150 100 50 0 year 2005-06 2006-07 2007-08 2008-09 2009-10

INTERPRETATION: Debtors collection period when measures how long it takes to collect amounts from debtors the actual collection period can be compared with the stated credit terms of the company. It is longer than those terms, and then this indicates some insufficiency in the procedure for collecting debtors. From the above table it is observed that the collection of debtors amounts is required a less a days in the year 2008-09.Thus it shows good efficiency of the company in collection of debtors amount.

CASH TURNOVER RATIO Cash is the important current asset for the operations of the business. Cash is the basic needed to keep the business running on a continuous basis; it is also the ultimate output expected to be realized by selling the service or product manufactured by the firm. The firm should deep sufficient cash neither more nor less. Cash shortage will disrupt the firms manufacturing operations while excessive cash will simply remain idle, without contributing anything towards the firms profitability. Thus a major function of the financial manager is to maintain a sound cash position. Cash Turnover in Apex Healthcare Ltd. PARTICULAR Current liabilities Cash Balance Cash Ratio turnover 6.99 6.06 17.06 10.33 33.69 & 200506 6219405 200607 5760301 950000 7511897 440427 7899594 764697 16164474 479729 2007-08 2008-09 2009-10

Bank 889000

cash turnover ratio

40 30 20 10 0 2005-06 2006-07 2007-08 2008-09 2009-10 cash turnover ratio

INTERPRETATION: The company has the enough cash in the current account and fixed deposited which helpful in the achievement of the motives like speculative, precautionary and many others.

APEXS INVENTORY CONVERSION PERIOD

INVENTORARY CONVERSION PERIOD (I C P) = RMCP + WIPCP + FGCP RMCP=RAW MATERIAL CONVERSION PERIOD WIPCP=WORK IN PROCESS CONVERSION PERIOD FGCP=FINISHED GOODS CONVERSION PERIOD DCP=DEBTOR CONVERSION PERIOD CDP=CREDITORS (PAYABLE) DEFERRAL PERIOD. AMOUNT 3,12,98,591.28 14,04,252.33 23,20,955.60 3,03,81,888.01 6,58,414.00 32,88,635.00 3,43,28,937.01 15,98,226.47 20,29,594.46 3,38,97,569.02 21,15,732.45 57,05,101.87 3,03,08,199.6

PARTICULAR PURACHASE OF RAW MATERIAL +OPENING RAW MATERIAL INVENTORY -CLOSING RAW MATERIAL INVENTORY RAW MATERIAL CONSUMED +DIRECT LABOUR +DEPRECIATION TOTAL COST +OPENING WORKING PROGRESS INVENTORY -CLOSING WORKING PROGRESS INVENTORY COST OF PRODUCTION +OPENING FINISHED GOODS INVENTORARY -CLOSING FINISHED GOODS INVENTORARY COST OF GOOD SOLD

1) RMCP = RMI 360/RMC =14, 04,252.33 X 360 /3, 03, 81,888.01 = 17 DAYS

2) WIPCP = WIPI 360/COP =15, 98,226.47 X 360/3, 38, 97,569.02 =17 DAYS 3) FGCP = FGI 360/COGS = 21, 15,732.45 X 360 /3, 03, 08,199.6 = 25 DAYS. 4) DCP = DEBTOR X 360/CREDIT SALES = 87, 07,106 X 360/4, 44, 24,140 = 71 DAYS. 5) CDP= CREDITORS X 360/CREDIT PURCHASE = 1, 16, 80,732.21 X 360/3, 12, 98,591.28 =134 DAYS. 6) ICP = RMCP + WIPCP + FGCP = 17+17+25 = 59 DAYS. 7) GROSS OPERATING CYCLE = ICP+DCP = 59+71 = 130 DAYS.

INTERPRETATION: Above calculation APEX HEALTHCARE limited has its raw material conversion period is 17 days and then after working progress period is 17 days than after finished goods conversion period is 25 days. Finally the inventory conversion period is 59 days.

CHAPTER 5 FINDINGS AND CONCLUSION

FINDINGS & CONCLUSION

From the above project I found the following policy of the APEX HEALTHCARE limited.

Objective- 1 How Company manages it receivable?

Company gives the average 60 TO 90 days credit to the DOMESTIC Customer and 90 days letter of credit to exports. Company gets the average 60 to 90 Days credit period from the creditors.

Objective 2 How company manages it cash?

Company keeps the cash balance as wealthy for the achieving the motives like speculative, precautionary etc

Objective -3 How company manages it inventory?

Company doing its inventory management by the techniques called FIFO for the high value inventories, EOQ for the small value inventories. Above mentioned are the findings from the project research.

CHAPTER 6 RECOMMENDATION

SUGGESTIONS
I recommend the company in the case of the working capital management in the following way Company has to follow the aggressive approach for the financing the working capital because matching approach is costly for the business. Though the aggressive approach is risky but the risk and return goes together. Company used the conservative approach of investing the working capital but I recommend the moderate approach that the company should also invest in the fixed assets and current assets equally. So above described is my suggestions for the company in the working capital management.

BIBLIOGRAPHY

www.apexhealthcareindia.com Annual Report of the company 2009-10, Financial Statement. I M Pandey (10th Edition), Financial Management, Vikas Publishing House Pvt. Ltd. Donald R Cooper & Pamela S Schindler , Business Research Method (9th Edition), Tata McGraw-Hill publishing company limited (SIE), Research methodology material Donald R Cooper & Pamela S Schindler, Student CD, Tata McGrawHill publishing company limited (SIE), Sample Student Project.

APPENDIX

BALANCE SHEET
PARTICULARS SOURCES OF FUNDS: Owners Funds: Equity share capital Reserves and surplus Loan funds Secured loans Unsecured loans Total Uses of fund: Fixed assets Gross block Less: depreciation Net block Capital work in progress Investment Current assets, loans & advances Less: current liabilities & provision Net current assets Miscellaneous expenditure Total 143.95 24.22 103.27 155.19 72.11 83.07 4.78 223.65 132.79 29.51 119.72 139.84 78.99 60.84 3.59 196.88 268.34 86.62 181.72 223.06 161.64 61.42 2.39 267.68 97.39 76.25 223.65 82.24 14.63 196.88 106.15 11.52 117.67 50 100 150 Mar 08 (Rs. In Lakhs) Mar09 (Rs. In Lakhs) Mar10 (Rs. In Lakhs)