ratio analysis 1012

8/12/2019 Ratio Analysis 1012

1/74

A STUDY ON

DETERMINE THE FINANCIAL POSITION THROUGH RATIO ANALYSIS

WITH REFERENCE TO Y.S.R SPINNING AND WEAVING MILL PVT LTD.

A project report su!"tte# to

$NTU% &A&INADA

I' p(rt"())* +u)+"))!e't o+ t,e re-u"re!e'ts

For t,e A(r# o+ t,e #e/ree o+

MASTER OF 0USINESS ADMINISTRATION

Su!"tte# *

&. SURENDRA 0A0U

REGD.NO.12U23E1145

U'#er t,e /u"#('ce o+

G.GURUNATHAM M0A% MA LIT

SRI MITTAPALLI COLLEGE OF ENGINEERINGTu!!()(p()e!% Gu'tur6477788% AP% INDIA

9A++")"(te# to $NTU% &A&INADA:

CERTIFICATE


2/74

T,"s "s to cert"+* t,(t t,"s project e't"t)e# ;( stu#* o' ;DETERMINE

THE FINANCIAL POSITION THROUGH RATIO ANALYSIS "' Y.S.R

SPINNING AND WEAVING MILL% "s ( o'(+"e# or< * &.SURENDRA0A0U u'#er !('(/e!e't /u"#('ce ('# su!"tte# to t,e #ep(rt!e't o+

us"'ess (#!"'"str(t"o'= SRI MITTAPALLI COLLAGE OF

ENGINEERING,T,u!!()(p()e!% Gu'tur "' p(rt"() +u)+"))!e't o+ t,e #e/ree

o+ Master of !s"#ess A$%"#"strat"o#.

I'ter'() e>(!"'er E>ter'()

e>(!"'er

He(# o+ t,e Dep(rt!e't

DECLARATION


3/74

I ,ere * #ec)(re t,(t t,e project report e't"t)e ;( stu#* o' DETERMINE

THE FINANCIAL POSITION THROUGH RATIO ANALYSIS "' Y.S.R.

SPINNING AND WEAVING MILL PVT Lt$?% ,(s ee' prep(re# * !e "'p(rt"() +u)+"))!e't o+ re-u"re!e'ts +or t,e ((r# o+ t,e #e/ree o+ M(ster o+

0us"'ess A#!"'"str(t"o' "' SRI MITTAPALLI COLLAGE OF

ENGINEERING% T,u!!()(p()e!% Gu'tur.

I ()so #ec)(re t,(t t,e project or< "s t,e resu)t o+ !* o' e++orts ('#

t,"s ,(s ee' 'ot su!"tte# to ('* ot,er u'"@ers"t* +or t,e ((r# o+ ('* #e/ree

or #"p)o!(.

&.SURENDRA 0A0U%

Re/ 'o 12U23E11145.

AC&NOWLEDGEMENT


4/74

It /"@es !e /re(t pressure% ,(@"'/ #o'e ( project o+ (' "'terest"'/ B te'# !* s"'cere /r(t"tu#e to(r#s !* p(re'ts% ,o ,(@e ()(*s e'cour(/e#

!e ('# /"@e /re(t support. T,e* ,(@e ee' ( /re(t source o+ !ot"@(t"o' "' t,e

co!p)et"o' o+ !* project.

Ao@e ()) I t,('< t,e ()!"/,t* +or !* success+u) co!p)et"o' o+ t,"s project.

CONTENTS


5/74

C'a(ters s!+e)t

(a-e

C'a(ter/0 3.3 I'tro#uct"o'

3.7 S"/'"+"c('ce o+ t,e stu#*

3.8 Oject"@es o+ t,e stu#*

3. L"!"t(t"o's o+ t,e stu#*

3.4 Rese(rc, Met,o#o)o/*

C'a(ter/II PROFILE OF INDUSTRY 1COMPANY

7.3 I'#ustr* pro+")e

7.7 Co!p('* pro+")e

C'a(ter/III THEORITICAL FRAME WOR&

C'a(ter/IV DATA ANALYSIS 1 INTERPRETATION

C'a(ter/V FINDINGS 1 SUGGESTIONS

CONCLUSION

"*"o-ra('2

INTRODUCTION


6/74

MEANING OF WOR&ING CAPITAL3

Worcess o+ curre't (ssets o@er curre't )"(")"t"es. It "s esse't"()

t,(t ( cert("' proport"o' o+ +u'#s e pe'#"ture. To )(r/e "'@est!e'ts "' curre't (ssets (++ect t,e +"r! pro+"t(")"t*. O' t,e ot,er

,('# too )"tt)e "'@est!e't c(' ()so t,e e>pe's"@e. A)) t,"s "'#"c(tes t,(t proper (ssets o+

or


7/74

Def"#"t"o#;Wore#% ut t,e !ore co!!o' useo+ t,e c(p"t() "s to co's"#er "t (s t,e #"++ere'ce etee' t,e oo< @()ue o+ t,e curre't (ssets

('# t,e curre't )"(")"t"es.?

Ho/ )('#

NEED OF THE STUDY

Cas'

P!r)'ase of

Ra4 %ater"a*

Wor5/"#/

Pro-ress

F"#"s'e$ Sto)5


8/74

To oser@e !("'t("' curre't (ssets B curre't )"(")"t"es to ('()*e t,e or


9/74

T,e Worpe'#"ture ,"c, co'ce'tr(tes o' rout"'e

or/('"(t"o' (ct"@"t"es.

It re@e()s t,e (rou'# t,e per+or!('ce o+ #(*6to6#(* (ct"@"t"es.

T,e (!ou't o+ or


10/74

To e@()u(te t,e s,ort ter! ('# )o'/ ter! so)@e'c* pos"t"o' o+ t,e co!p('*.

To ('()*e t,e #et e-u"t* co!pos"t"o' o+ t,e co!p('*.

To stu#* t,e co!p('*=s pro+"t(")"t* pos"t"o'.

To out)"'e t,e tec,'"-ues o+ e@()u(t"'/ t,e per+or!('ce o+ or


11/74

T,e stu#* ,(s ee' co'#ucte# "' t,e or/('"(t"o' to e>(!"'e Wor


12/74

T,e stu#* (s !("')* (se# o' (ccou't"'/ #(t(% ,"c, ere recor#e# (t t,e e'# o+

t,e *e(r ('# e c(' 'ot ter'() +(ctors o' t,(t e++ect t,e +"'('c"() per+or!('ce o+ t,e co!p('* ,(@e 'ot

ee' /"@e' !uc, "!port('ce.

L"!"t(t"o's "' or


13/74

TE8TILE INDUSTRY3

T,e te>t")e "'#ustr* occup"es ( u'"-ue p)(ce "' our Cou'tr* .O'e o+ t,e

e(r)"est to co!e "'to e>"ste'ce "' I'#"(% "t (ccou'ts or 3 o+ t,e tot() I'#ustr"() pro#uct"o'%

co'tr"utes to 'e(r)* 81 o+ t,e tot() e>ports ('# "s t,e seco'# )(r/est e!p)o*!e't /e'er(tor

(+ter (/r"cu)ture.

I'#"( co'tr"utes to (out 74 s,(re "' t,e or)# tr(#e o+ cotto' *(r'. I'#"(%

t,e or)#=s t,"r#6)(r/est pro#ucer o+ cotto' ('# t,e seco'#6 L(r/est pro#ucer o+ cotto' *(r's

('# te>t")es% "s po"se# to p)(* (' "'cre(s"'/)* "!port('t ro)e "' /)o() cotto' ('# te>t")e

!(rt")e +"ers ('#

*(r's. I'#"( "s o'e o+ t,e )(r/est co'su!ers o+ cotto' "' t,e or)#% r('t")e ('# (pp(re) e>ports o+ US J 41 "))"o'

* 7131 o+ ,"c, t,e s,(re o+ /(r!e'ts ")) e US J 74 "))"o'. T,e !("' !(rt")es ('# (pp(re)s (re USA% UAE% U&% Ger!('*% Fr('ce% It()*% Russ"(% C('(#(%

0('/)(#es,% ('# $(p('.CURRENT SCENARIO3


14/74

De@e)op"'/ cou'tr"es "t, ot, te>t")e ('# c)ot,"'/ c(p(c"t* !(* e ()e to prosper

"' t,e 'e co!pet"t"@e e'@"ro'!e't (+ter t,e te>t")e -uot( re/"!e o+ -u('t"t(t"@e "!port

restr"ct"o's u'#er t,e !u)t"6+"er (rr('/e!e't 9MFA: c(!e to (' e'# o' 3st $('u(r*% 7114

u'#er t,e Wor)# Tr(#e Or/('"(t"o' 9WTO: A/ree!e't o' Te>t")es ('# C)ot,"'/.

T,e !oo# "' t,e I'#"(' te>t")e "'#ustr* /"@e' t,e p,(se out o+ t,e -uot( re/"!e o+ t,e

!u)t"6+"er (rr('/e!e't 9MFA: "s upe(t "t, 'e st(te!e't )o"'/ "' ('# "'cre(se# or#ers

+or t,e "'#ustr* (s ( resu)t o+ ,"c, c(p(c"t"es (re +u))* oot")e "'#ustr* "' t,e )(st +"@e *e(rs. N"'e te>t")e !(jors "'@este# Rs.7% 11

crores ('# p)(' to "'@est ('ot,er Rs.% 11 crores.

Furt,er% I'#"(s cotto' pro#uct"o' "'cre(se# * 4K o@er t,e )(st +"@e *e(rs ('# 8

!"))"o' (##"t"o'() sp"'#)es ('# 81%111 s,utt)es6)ess )oo!s ere "'st())e#. T,e "'#ustr*

e>pects "'@est!e't o+ Rs.3% 1%111 crores "' t,"s sector "' t,e post6MFA p,(se.

A V"s"o' 7131 +or te>t")es +or!u)(te# * t,e /o@er'!e't (+ter "'te's"@e "'ter(ct"o'

"t, t,e "'#ustr* ('# E>port Pro!ot"o' Cou'c")s to c(p"t()"e o' t,e upe(t !oo# ("!s to

"'cre(se I'#"(s s,(re "' or)#s te>t")e tr(#e +ro! t,e curre't to 5 * 7131 ('# to

(c,"e@e e>port @()ue o+ US J 41 "))"o' * 7131 V"s"o' 7131 +or te>t")es e'@"s(/es /rot, "'

I'#"(' te>t")e eco'o!* +ro! t,e curre't US J 8K "))"o' to J 54 "))"o' * 7131 re(ct"o' o+

37 !"))"o' 'e jos "' t,e te>t")e sector ('# !o#er'"(t"o' ('# co'so)"#(t"o' +or cre(t"'/ (/)o())* co!pet"t"@e te>t")e "'#ustr*.

T,ere ")) e opportu'"t"es (s e)) (s c,())e'/es +or t,e I'#"(' te>t")e "'#ustr* "' t,e

post6MFA er(. 0ut I'#"( ,(s '(tur() (#@('t(/es ,"c, c(' e c(p"t()"e# o' stro'/ r(

!(ter"() (se 6 cotto'% !('6!(#e +"ers% jute% s")


15/74

T,e sce'(r"o o+ "'@est!e't "' t,e I'#"(' te>t")e "'#ustr* st(rte# to c,('/e (+ter t,e

"'cept"o' o+ t,e spec"() ;Te>t")e P(c


16/74

I'#"(' "'#ustr"() sector ,"c, "s (t prese't re@o)@"'/ (rou'# . Te>t")e sectors co'tr"ut"o'

to GDP o+ I'#"( "s ()so s"/'"+"c('t ,"c, curre't)* (!ou'ts to . It ,(s ee' +ou'# out t,(t

I'#"(' te>t")e "'#ustr* s o'e o+ t,e !(jor sources o+ +ore"/' e>c,('/e e(r'"'/s +or I'#"( ('#

co'tr"utes (rou'# 363K.Fro! t,e (o@e #"scuss"o' "t "s -u"te c)e(r to us t,(t t,e !(rp('#"'/ p"e. W"t,

"'cre(s"'/ #e!('# +or t,e pro#ucts o+ I'#"(' Te>t")e I'#ustr*% 'e p)(*ers (re ju!p"'/ "' t,e

)e(/ue to /et ( s)"ce o+ t,e pro+"t()e p"e ('# t,e ()re(#* e>"st"'/ te>t")e !"))s (re r("s"'/ t,e"r

c(p(c"t* +or "'cre(s"'/ t,e"r supp)*. He'ce% t,e e>p('s"o' process o+ t,e #o!est"c "'#ustr* "s

()so 'ot +(r e,"'#. T,us% "t c(' e s("# t,(t t,e ,o)e I'#"(' eco'o!* "s o' ( /ro"'/ tre'#

,"c, ,(s "ts o@"ous "!p(ct o' e@er* poss")e sector "'c)u#"'/ t,e I'#"(' I'#ustr*.

I'#"(' Te>t")e I'#ustr* "s /o"'/ t,rou/, ( !(jor c,('/e "' "ts out)oo< (+ter t,e e>p"r*

o+ Mu)t" F"er A/ree!e't (s "'tro#uce# "' t,e *e(r 32K (s ( s,ort ter! !e(sure #"recte#

to(r#s pro@"#"'/ ( )"!"te# t"!e per"o# to t,e #e@e)ope# cou'tr"es +or (#just"'/ t,e"r te>t")e

"'#ustr"es "' (ccor#('ce "t, t,(t o+ t,e #e@e)op"'/ cou'tr"es. T,e te>t")e "'#ustr"es (re

c,(r(cter"e# * t,e"r )(or "'te's"@e '(ture o+ co!!o#"t* pro#uct"o'. A@(")(")"t* o+ surp)us

)(or "s (u'#('t "' t,e #e@e)op"'/ cou'tr"es. T,ese cou'tr"es ,(@e co!p(r(t"@e (#@('t(/e "'

t,e pro#uct"o' o+ te>t")e re)(te# pro#ucts ('# ,e'ce (re ()e to supp)* /oo#s (t ( @er* )o

pr"ce.T,e (s"c "#e( e,"'# t,"s po)"c* (s to er(#"c(te ()) sorts o+ -uot( s*ste! +ro! t,e

(pp(re) ('# te>t")e "'#ustr* ()) o@er t,e or)# so t,(t ( )e@e) p)(*"'/ +"e)# cou)# e

est()"s,e#.

No% t,"s er( (+ter MFA "s e"'/ )oo


17/74

He'ce "t "s e@"#e't t,(t t,e perce't(/e "'cre(se "' t,e +(r"c te>t")e pro#uct #ur"'/ t,e per"o#

7116711K('# 711567112 ,(s see' ( r"se o+ (rou'# 3.8K ,ere(s "t (s o')* K.4 #ur"'/

71167114 ('# 7116711K.

NATIONAL TE8TILE POLICY3

3. T,e N(t"o'() Te>t")e Po)"c* (s +or!u)(te# porter o+ c)ot,"'/.

8. M("'te'('ce o+ ( )e(#"'/ pos"t"o' "' t,e #o!est"c !(r


18/74

a. &a(a to *"#t &(p( 9()so t")e !"))s% or s,"ppe# to +ore"/' cou'tr"es.

). Note T,e cotto' see# "s #e)"@ere# to ( see# stor(/e (re( +ro! ,ere "t "s )o(#e# "'to

truc


19/74

II. Pro$!)t"o# of Cotto# See$ O"*3

Process"'/ o+ cotto'see# "' !o#er' !"))s "'@o)@es ( 'u!er o+ steps. T,e* (re (s

+o))os

T,e +"rst step "s "ts e'tr* "'to t,e s,(


20/74

III. Pro$!)t"o# of Cotto#see$ Mea*9Ca5e9&a(as5'a**"3

&(p(s


21/74

O+ t,e '"'e cotto' pro#uc"'/ St(tes "' I'#"(% (@er(/e *"e)#s (re ,"/,est "' Pu'j( ,ere !ost

o+ t,e cotto' (re( "s "rr"/(te# 0ut t,e *"e)#s o+ cotto' "' I'#"( (re )o% "t, (' (@er(/e *"e)#

o+ 418 port "s C,"'(. T,e ot,er !(rports. As ( resu)t o+ t,ese% 'o t,e e>porters (re 'ot re-u"re# to ot("' ('*

cert"+"c(te +ro! t,e Te>t")e Co!!"ss"o'er o' t,e re/"str(t"o'% ())oc(t"o'% -u()"t* ('# -u('t"t*

o+ e>port. I'#"( e>porte# (rou'# 74 per ce't cotto' #ur"'/ 7115612 ('# "t "s est"!(te# 'e(r)*

7 per ce't e>porte# to C,"'(.


22/74

Dur"'/ t,e *e(r 7115612 t,e pr"ces o+ I'#"(' cotto' "' e(r)* p(rt o+ t,e se(so' e"'/ )oer

t,(' t,e "'ter'(t"o'() pr"ces% ,(# ee' (ttr(ct"@e to +ore"/' u*ers ('# t,ere (s /oo#

#e!('# +or I'#"(' cotto'% espec"())* S6% H6 ('# 0u''*% ,"c, ,(# resu)te# "' sust("'e#

cotto' e>ports% ,"c, (re est"!(te# (t 44.11 )(port()e pro#ucts )"tr( Lo'/ st(p)e cotto's% )"


23/74

7.7 COMPANY PROFILE

YARRAM SRIDHAR REDDY SPINNING MILLS"s ( Tec,'ocr(t project set up

* peop)e ,o ere "' e!p)o*!e't e(r)"er u')"

(re( ('# /o@er'!e't o+ A'#,r( Pr(#es, ,(s ( re)"()e sus"#* to t,ose ,o ,(@e "'st())e#

"'#ustr"es "' t,"s #"str"ct.

T,e co!p('* "' sett"'/ up sp"''"'/ !"))s "t, (' UN st())e# c(p(c"t* o+ 2111

sp"'#)es. T,e project ,(s ee' +"'('ce# * t,e S.0.I "t, p(rt"c"p(t"o' "' -u()"t* s,(re c(p"t()

('# "s ()so +"'('ce# * t,e Ce'tr() F"'('c"() I'st"tut"o' S.0.I.% T,e cost o+ t,e project (s

(rou'# 8.4 crores ('# t,e tur' o@er or t,e co!p('* "s (rou'# K crores. T,"s +(ctor* ")) /o (

)o'/ (* to "!pro@e t,e )"@"'/ co'#"t"o's o+ t,e poor ('# e(per"e'ce "' cotto' /("'"'/ !")) +ro! ( !o#est 71%111 sp"'#)es% t,e sp"'#)e

c(p(c"t* to#(* ,(s "'cre(se# to 74%111. T,e S(#(s"@pet u'"t (ccou'ts +or 1%111 sp"'#)es

,")e t,e G('(p(@(r(! p)('t (ccou'ts +or t,e re!("'"'/ 71%111 sp"'#)es. I' t,e course o+

t"!e t,e co!p('* ,(s /("'e# 'ot o')* (' ISO 2113 cert"+"c(t"o' ut ()so t,e st(tus o+ ('

e>port ,ouse. I' t,e *e(r 71167114 t,e co!p('* ,(# re/"stere# ( tur'o@er o+ RS.341 crores.


24/74

T,e co!p('* "s e)) est()"s,e# "' t,e !(rport ,ouse.

We ,(@e (c,"e@e# ( /re(t ,e"/,t o+ success #ue to t,e ,(r# or< o+ t,e c,("r!(' ('#

MR. Y.SRINIVASULU REDDY% t,e !('(/"'/ #"rector ,(@e ( ,"/,)* sper"e'ce ,(@e ( stro'/ "'+r(structur() (se% ,"c, "s e))

e-u"ppe# "t, t,e (#@"se. We ()(*s e'#e(@or to pro@"#e t,e est o+ (re +(r"cs to our

custo!er c,ec< t,e -u()"t* co'te't o+ t,e +(r"c.

We (re e'/(/e# "' t,e !('u+(ctur"'/ o+ "#e r('/e o+ +"'e cotto' +(r"cs ,(@e (

re!(r


25/74

e(@"'/ !"))s P@t. Lt#.% tur' "' to o'e o+ t,e 311 cotto' *(r's to !(* #o!est"c ('#

e>porte# or"e'te# e(@"'/ !"))s cou'tr*.

VISION

T,e co!p('* ,(s @"s"o' to e>ce) "' ()) +"e)# o+ te>t")e "'#ustr* pro#uce

(s"s.

We ")) e "'te'se)* custo!er +ocuse# ('# ")) o++er pro#ucts pro@"#e t,e est

@()ues +or our custo!ers.

MISSION

To !('u+(cture ( ,"/, -u()"t* *(r' t,ere* "t, st('#"'/ co!pet"t"@e'ess.

De@e)op"'/ ( )o'/ te(! re)(t"o's,"p "t, our custo!ers ('# supp)"ers.

To use )(test tec,'o)o/"c() str(te/"es #ur"'/ pro#uct"o' t,ere * +or (ppro(c,.

To pro@"#e ( s(+e% +u)+"))"'/ ('# re(r#"'/ or< e'@"ro'!e't.

Ser@"c"'/ ('# support"'/ t,e co!"t"es.

PRODUCTION

T,e Te>t")es Sp"''"'/ S*'t,et"c ('# )e'#e# "'#ustr* "s ,"/,)* +r(/!e'te# ('# "'

(##"t"o' to t,e est()"s,e# p)(*er t,ere (re !('* u'or/('"e# p)(*ers t,(t oper(te "' t,e

"'#ustr*. T,e c(p(c"t"es (re "'terc,('/e()e +or sp"''"'/ '(tur() +"er ('# !('!(#e +"er% so

#e+"'"t"@e co!p(r()e "'+or!(t"o' o' co!pet"tors oper(t"'/ "' '(tur() +"ers ('# !('!(#e

+"ers "s 'ot pu)"c)* (@(")()e. A)so PSM oper(tes "' ( custo!er or#er !(r


26/74

MANUFACTURING PROCESS3

R( !(ter"()6Cotto'

COTTON3

T,ere "s 'o pro)e! "' t,e (@(")(")"t* o+ t,e re-u"s"te -u('t"t* o+ r( !(ter"() ('#

t,e co!p('* "s ,(@"'/ re/u)(r supp)"er "t, )o'/ st('#"'/ re)(t"o's,"p +or !eet"'/ "s

re-u"re!e'ts. T,e re-u"re!e'ts o+ t,e r( !(ter"() (re est"!(te# (ccor#"'/ to t,e or#ers "'

,('# ('# pre#"cte# !(r


27/74


28/74


29/74

u()"t* "+ "'te/r() to e@er*t,"'/ (t Y.S.R. e (#opt ,o)"st"c -u()"t* (ssure "'te/r(te#

s*ste! ,"c, co@ers t,e e't"re pro#uct"o' process. A)) )ot /"@"'/ to !">"'/ e e)"e@e

-u()"t* "s ( co't"'u() process. W"t, ( +ocus c)e(r)* ( #e)"@er ('# ser@"ces% e "'te/r(te to

co'st('t)* "''o@(te ('# e>ce). As ( (ssure# to top 'otc, -u()"t* t,(t "s co's"ste't (cross our

pro#uct r(/e.

VALUE

0* ( c)e(r co!pre,e's"o' o+ t,e !(r


30/74

(se# o' t,e !(ter"() use#% +"er )e'/t, ('# ()"/'!e't% -u('t"t* o+ +"er use# ('# #e/ree o+

t"st. T,e e(r)"est sp"''"'/ pro()* "'@o)@e# s"!p)* t"st"'/ t,e +"ers "' t,e ,('#. L(ter

t,e use o+ st"c< to ,e)p t"st t,e +"er (s "'tro#uce#. Drop sp"''"'/ "'@o)@es t,e use o+ (

st"c< "t, ( ,or) or e"/,t to st(")"e t,e sp"''"'/ o+ t,e st"c


31/74

AWARDS AND RECOGNITIONS

Mr. Yerr(! Sr"#,(r Re##* st(rte# ,"s us"'ess (s cotto' co!!"ss"o' '(t"@e

p)(ce I#upu)(p(#u% I'


32/74


33/74


34/74

"s ()so #eter!"'e# ;res"#u() +ro! t,e #ec"s"o' just '(!e? +or e>(!p)e% "+ ( +"r! ,(s )(r/e

(ccu!u)(t"o' o+ +"'"s,e# /oo#s "'@e'tor*% "t !(* ,(@e to pro@"#e !ore )"er() cre#"t ter!s or

s,o )(>"t* "' cre#"t ter!s or s,o )(>"t* "' cre#"t co))ect"o'.

S"!")(r)*% "+ ( co!p('* "s +(c"'/ )"-u"#"t* cru'c,% "t !uc, ,(@e to o++er

/e'erous #"scou'ts.

FACTORS INFLUENCING WOR&ING CAPITAL RE>UIREMENTS

T,e or


35/74

. Prof"ts *ee*s3

A co!p('* c(rr*"'/ ,u/e (!ou't o+ pro+"t c(' (## to t,e or


36/74

c(p"t(). To c(rr* o' t,e us*'ess% cert("' !"'"!u! )e@e) o+ orUACY OF WOR&ING CAPITAL3

Wor


37/74

A#e-u(te orp)o"t +(@or()e !(r


38/74

NEED FOR WOR&ING CAPITAL MANAGEMENT3

For t,e purpose o+ r( !(ter"()

To p(* (/es ('# s()(r"es.

To "'curre# #(*6to6#(* e>pe'ses ('# o@er ,e(#s costs% suc, (s +ue)% poer ('# o++"ce

e>pe'ses etc.%

To !eet t,e se))"'/ costs (s p(cpecte# to '(ture +or p(*!e't "t, "' ('

(ccou't"'/ *e(r ('# "'c)u#e cre#"tors% 0P ('# out st('#"'/ e>pe'ses. Net or


39/74

SOURCES OF WOR&ING CAPITAL RE>UIREMETS3

T,e source o+ ore#

source ('# @(r"()e source t,e* (re (s +o))os

A. F"e$ So!r)e3

S,(res.

Dee'tures

Pu)"c Depos"ts

P)(/u"'/ (c< o+ pro+"ts.

Lo('s +ro! +"'('c"() "'st"tut"o's.

. Var"a*e So!r)e3

Co!!erc"() ('pe'ses

Co%(os"t"o# of Wor5"#- Ca("ta*3

Wor


40/74


41/74

Goa*s of Wor5"#- Ca("ta*3

0. M"#"%"at"o# of R"s53

T,e se)ect"o' o+ "ts source o+ +"'('c"'/ p(*()es ('# ot,er S,ort Ter! L"(")"t"es !(*

"'@o)@e re)(t"@e)* )o costs. T,e +"r! !ust e'sure t,(t t,ese 'e(r ter!s o)"/(t"o's #o 'ot

eco!e e>cess"@e co!p(re# to t,e Curre't Assets o' ,('# to p(* t,e!. T,e !(tc,"'/ o+

(ssets ('# )"(")"t"es (!o'/ curre't (ccou'ts "s ( t(s< o+ !"'"!""'/ t,e r"s< o+ e"'/ u'()e

to p(* "))s ('# ot,er o)"/(t"o's.

7. Co#tr"!te to Ma"%""#- F"r%s Va*!e3

T,e +"r! ,o)#s Wor"!"e t,e @()ue o+ t,e +"r!.

?. Est"%at"o# of Wor5"#- Ca("ta* Re:!"re%e#ts3

I' or#er to #eter!"'e t,e (!ou't o+ Worp('s"o' (out e(c, o+ t,ese +(ctors ,(s ()re(#* #"scusse# (o@e.

0es"#es t,"s% F"'('ce M('(/er c(' (pp)* ('* o'e o+ t,e +o))o"'/ tec,'"-ues% +or (ssess"'/

t,e Wor


42/74

"= Per)e#ta-e of Sa*es Met'o$3

It "s ( tr(#"t"o'() ('# s"!p)e !et,o# o+ #eter!"'"'/ t,e )e@e) o+ Wor


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Aera-e Wor5/"#/(ro-ress I#e#tor2

W //////////////////////////////////////////////////

Aera-e Cost of Pro$!)t"o# (er $a2

Aera-e F"#"s'e$ Sto)5 I#e#tor2

F //////////////////////////////////////////////////////

Aera-e Cost of -oo$s so*$ (er $a2

Aera-e oo5 Dets

D /////////////////////////////////////////////////////

Aera-e Cre$"t Sa*es (er $a2

Aera-e Tra$e Cre$"tors

C /////////////////////////////////////////////////////

Aera-e Cre$"t P!r)'ases (er $a2

Nu!er o+ oper(t"'/ #(*s "' ( c*c)e "s #"@"#"'/ 84 #(*s. T,e tot()

oper(t"'/ e>pe'#"ture "' t,e *e(r% ,e' #"@"#e# * t,e No. o+ oper(t"'/ c*c)es "' ( *e(r "))

/"@e t,e (@er(/e (!ou't o+ Wor


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OPERATING CYCLE OF WOR&ING CAPITAL MANAGEMENT

O(erat"#- C2)*e

It re+ers to t,e t"!e #ur(t"o' re-u"re# to co'@ert s()es (+ter t,e co'@ers"o' o+

resources "'to "'@e'tor"es% "'to c(s,. T,"s c*c)e "'@o)@es 8 p,(ses.

Ac-u"s"t"o' o+ resources6

It re+ers +ro! suc, (s r( !(ter"()% )(our% poer ('# +ue) etc.

M('u+(cture o+ t,e pro#uct6

It "'c)u#es co'@ers"o' o+ r( !(ter"() "'to or< "' pro/ress "'to +"'"s,e#

/oo#s.

S()e o+ t,e pro#uct6

It re+ers +ro! e"t,er +or c(s, or o' cre#"t s()es cre(te (ccou'ts rece"@()e

+or co))ect"o'


45/74

STATEMENT SHOWING CHANGES IN WOR&ING CAPITAL FOR THE

YEAR

7@/7

PARTICULARS 7@ 7 INCREASE DECREASE

CURRENT

ASSETS

I'@e'tor"es 38128835 317K713 2885K58 6

Su'#r* #etors 355KK13 84KK5K 7K5185 6

C(s, B ('< ()('ce 31K474 31547 6 355558

Lo('s B (#@('ces 8883173 4KK773 74811

Tota* C.A


46/74

CURRENT

ASSETS

I'@e'tor"es 317K713 3425K142 32425328 6

Su'#r* #etors 84KK5K K5K45K 87855151 6

C(s, B ('< ()('ce 31547 54558K 6 3525324

Lo('s B (#@('ces 4KK773 3117521 7554 6Tota* C.A


47/74

LIAILITIES

Ot,er )"(")"t"es 333K323 3854818 6 727337

Pro@"s"o's 3574111 827111 6 3548K111

Tota* C.L


48/74


49/74

STATEMENT SHOWING CHANGES IN WOR&ING CAPITAL FOR THE

YEAR

7/70

PARTICULARS 7 70 INCREASE DECREASE

CURRENT

ASSETS

I'@e'tor"es 37273841 44K8K535 34535 6

Su'#r* #etors 317821 38K7K12 827134 6

C(s, B ('< ()('ce 771377 33834822 238433K8 6

Lo('s B (#@('ces 3438K7342 7757KK7 K21718 6

Tota* C.A


50/74

STATEMENT SHOWING CHANGES IN

GROSS WOR&ING CAPITAL 1 NET WOR&ING CAPITAL

(art")!*ar

s

7 7B 7J 7K 7 70

C!rre#t

assets

I'@e'tor"es 317K71

3

3425K142

35221384

1

7514817

8

3727384

1

44K8K535

Su'#r*

Detors

84KK5K K5K45K 383123

8

3755854

2

31782

1

38K7K12

C(s, B0('UID ASSETS CURRENT

LIAILITIES

RATIO

71167114 3315441 37188K14K 1.24

71146711 35K28371 381352323 3.

7116711K 728275KK 3K435818 3.5

711K67115 321253713 734432 1.52

711567112 7K4K51874 35825K821 3.41

711267131 K52474K 374KK354 8.53


56/74

I#ter(retat"o#3 T,e )"-u"# r(t"o +or t,e *e(r 71167114 "s 1.24. It (s "'cre(se# to 8.53 "' t,e *e(r

711267131. T,e co!p('* !("'t("'"'/ /oo# r(t"o.


57/74

WOR&ING CAPITAL RATIO3

T,"s R(t"o !(


58/74

I#ter(retat"o#3

T,e or


59/74

NET WOR&ING CAPITAL RATIO3

T,e #"++ere'ce etee' Curre't Assets ('# Curre't L"(")"t"es.

Net Wor5"#- Ca("ta* Rat"o Net Wor5"#- Ca("ta*

Net assets

Year 7 7B 7J 7K 7 70

Curre'tAssets

74551243 8K588K3 5857577K 4524217 35K13K4 31888774

Curre't

L"(")"t"es

37188K14K 381352323 3K435818 734432 35825K821 374KK354

Net

Wor5"#-

Ca("ta*

0?@@?K@ 70JB@@7? ?K@7@ ?J@K?B@? 7?@J0@7K 0B7@

F">e#

Assets

8444773 2741 41458557 5448437 7418 5KK1255

Net

Assets

@0B0? J00KKK K0@7@KJBB KBB?J0 BB077J70 0J??B77K

NWC

R(t"o

1.7K 1.83 1.85 1.8 1.84 1.4K


60/74

I#ter(retat"o#3

T,e 'et or


61/74

It c(' e use# +or e# (ssets

!(* re'#er co!p(r"so' o+ +"r!=s per+or!('ce o@er !e('"'/)ess. T,ere+ore /ross +">e# (ssets

!(* e use# +or ( !e('"'/+u) co!p(r"so'

F"e$ Assets T!r# Oer Rat"o Sa*es

F"e$ Assets

YEAR SALES FI8ED ASSETS RATIO

71167114 4153338 8444773 3.8

71146711 K8K8474K 2741 3.2

7116711K 3124357 41458557 7.3K

711K67115 387K873 5448437 7.K

711567112 3844812 7418 8.35

711267131 3822524 5KK1255 7.38


62/74

I#ter(retat"o#3

T,e +">e# (ssets tur' o@er r(t"o (s 3.8 "' *e(r 71167114. It ,(s "'cre(se# 7.38 "' t,e

*e(r 711267131 t,e *e(r 711267131 "s recor#e# ,"/, "'@e'tor* tur' o@er r(t"o "t "s 7.38. It

s,os /oo# per+or!('ce o+ t,e co!p('*.

DETORS TURN OVER RATIO3


63/74

It "s t,e r(t"o o+ s()es ('# (@er(/e #etor=s. F"r! s()es /oo#s% +or c(s, ('# cre#"t

"s use# (s !(r


64/74

I#ter(retat"o#3

I' t,e *e(r o+ 711614 t,e #etors tur'o@er r(t"o (s 31.2K% I' 711461 "t #ecre(se# to

2.8% I' 71161K "t #ecre(se# to 5.87% I' 711K615 "t "'cre(se# to 31.7% I' 7115612 "t

"'cre(se# to 38.7% I' 7112631 "t #ecre(se# to 31.K.


65/74

I#e#tor2 "%(a)t o# 4or5"#- )a("ta* 3

YEARS Working Capital INVENTORY

2004-05 134543894 140272401

2005-06 217644523 159870594

2006-07 308409924 189901350

2007-08 374083643 280530263

2008-09 234714285 142921350

2009-10 910565240 557378168


66/74

I#ter(retat"o#3

Co!p('* !("'t("' !"'"!u! stoc< )e@e)s e>cept 7115612.0ec(use "'@e'tor* stor(/e

cost ")) e ,"/, o'ce t,e co!p('* #o'e su++"c"e't s()es (t !"'"!u! co))ect"o' per"o#. T,e'

/et t,e !ore pro+"ts.


67/74

Detors "%(a)t o# 4or5"#- )a("ta*3

years working capital Debtors

2004-05 134543894 46357787

2005-06 217644523 78745867

2006-07 308409924 131609613

2007-08 374083643 128834859

2008-09 234714285 102346940

2009-10 910565240 137267096


68/74

I#ter(retat"o#3

T,e Detors "s #"rect)* proport"o'(te to 'etor


69/74

Sa*es I%(a)t o# Wor5"#- Ca("ta*3

years working capital sales

2004-05 134543894 508611613

2005-06 217644523 737352457

2006-07 308409924 1095641682

2007-08 374083643 1342763421

2008-09 234714285 1355360694

2009-10 910565240 1463998945


70/74

I#ter(retat"o#3

S()es ('# or


71/74

FINDINGS

T,e perce't(/es o+ "'cre(s"'/ curre't (ssets ere !ore t,(' t,e "'cre(s"'/

perce't(/e "' curre't )"(")"t"es. It te))s t,(t t,e +"r! !("'t("'"'/ ( /oo# or


72/74

SUGGESTIONS

As t,e stu#* oser@e# t,e curre't (ssets pos"t"o' (s "'cre(se# ()) t,e +"@e *e(rs "t "s

su//este# to t,e co!p('* to !("'t("' proper curre't (ssets +or etter s,ort ter! +u'#

!('(/e!e't.

T,e +">e# (ssets tur'o@er r(t"o "s "' ( s(t"s+(ctor* pos"t"o' "t "s su//este# to t,e

co!p('* to "!pro@e t,e +">e# (ssets tur'o@er r(t"o +or e++ect"@e ut")"(t"o' o+ t,e

+">e# (ssets.

T,e co!p('* s,ou)# re#uce t,e oper(t"'/ e>pe'ses to "'cre(se t,e pro+"t(")"t* o+ t,e

+"r!.

T,e or


73/74

CONCLUSION

A+ter 1 D(*s o+ M* S"'cere Wor< (t Y.S.R sp"''"'/ M"))s Pr"@(te L"!"te# Is

F"'('c"() A@er(/e.

I' H('#)"'/ o+ t,e F"'('c"() St(te!e'ts Pro+ess"o'()"s! M(* 0e E'cour(/e.

T,e Co!p('*=s O@er()) Pos"t"o' Is S(t"s+(ctor*.

Dur"'/ M* Project Wor< I H(@e Got Goo# E>per"e'ce Re/(r#"'/ t,e Y.S.R sp"''"'/

M"))s Pr"@(te L"!"te#.


74/74

ILIOGRAPHY

A!t'or Na%e T"t*e of t'e oo5

I.M.P('#e* F"'('c"() M('(/e!e't

Pr(s(''( C,('#r( F"'('c"() M('(/e!e't

G.Pr(s(# Accou'ts +or M('(/ers

A''u() Reports o+ YSR SPINNING MILLS

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