MANAGEMENT OF WORKING CAPITAL AT PROTEIN FOOD PRODUCTS

GUIDED BYPROF. BALA SUBMITTED BYSOHAIL SALIM LAKHAMSEY ROLL NO. 29 S.Y.MBA FINANCE

ALLANA INSTITUTE OF MANAGEMENT SCIENCES CAMP, PUNE

Working Capital
Working capital typically means the firms holding of current or short-term assets such as cash, receivables, inventory and marketable securities. These items are also referred to as circulating capital.
Corporate executives devote a considerable amount of attention to the management of working capital.

Definition of Working Capital

Working Capital refers to that part of the firms capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories. Funds thus, invested in current assets keep revolving fast and are constantly converted into cash and this cash flow out again in exchange for other current assets. Working Capital is also known as revolving or circulating capital or short-term capital.

Introduction to the Study

Name of the Company: Protein Food Products Nature of Company: Food Processing Major Product: Chikki Purpose of the Study: To understand the Working Capital Management of the organization.

Objectives of the Study

To determine policy regarding profitability and liquidity by considering company's objectives. To determine the structure of current assets.
Determining the relationship between the current assets and current liabilities and hence liquidity is determined. Optimization of the amount of sales and investment in receivables. Analysis of Financial Statements.

A Comparative Analysis of the Companys Performance

TYPES OF WORKING CAPITAL

WORKING CAPITAL

BASIS OF CONCEPT Gross Working Capital Net Working Capital

BASIS OF TIME Permanent / Fixed WC Temporary / Variable WC Special WC

Seasonal WC Regular WC Reserve WC

Accounts Payable

Value Addition

Raw Materials

WIP

Cash

THE WORKING CAPITAL CYCLE (OPERATING CYCLE)

Finished Goods

Accounts Receivable

SALES

Ratios associated with WCM

Stock Turnover Ratio (Times) Stock Turnover Ratio (Days) Receivables Turnover Ratio (Times) Average Receivables Period (Days) Payables Turnover Ratio (Times) COGS AVERAGE STOCK Average Stock COGS x 365

Net Credit Sales Average Accounts Receivable Avg A/C Receivable x 365 Net Credit Sales Net Credit Purchases Average Accounts Receivable

Average Payables Period (Days) Avg A/C Receivable x 365 Net Credit Sales

Current Ratio Quick Ratio Working Capital Turnover Ratio

Current Assets Current Liabilities CA Stock Current Liabilities Net Sales Net Working Capital

Thank you