working capital management @ gadag textile project report
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THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
EXECUTIVE SUMMARY
The project has been under taken under as the part of master of business
administration course as per the direction of Karnataka university dharwad. The
second year MBA students will take part in this project were the summer inplant
project for the period of two months and the project is related to finance and the topic
of this project is “The study of working capital management”
The Gadag co-operative textile mill ltd established in 1972 by late
shri.K.H.Patil at Hulkoti in Gadag district. It is producing main product as yarn. The
company started with a production cost of RS.220lakhs.It is started producing yarn in
the year 1973.
A G.C.T.M has an arrangement of different department of the dependent
parts of functions and their interrelation in the structure form to provide the necessary
efforts of groups of individuals will be directed towards a common objective. So as to
identify the problems of such a title and give suggestions and conclusions. In addition to
this concept studying the over all organization role of different department functions of
their respective departments, procedures and policies.
The project is mainly focuses on the industry profile, company profile, SWOT
analysis, annual report and about working capital and ratios. this project studies
different department at the Gadag co-operative textile mill ltd. The functions of each
department and the organization in the company along with it covers the duties and
responsibilities of all the staff members type of decision making followed by the mill
and it also includes quality policy export oriented unit etc of the mill.
DESIGN OF THE STUDY
BABASAB PATIL 1
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Title of the study
“To study on working capital management” at The Gadag Co-operative Textile Mill
Ltd. Hulkoti”
OBJECTIVES OF THE STUDY:
1) To study the working capital management.
2) To know the sources of working capital.
3) To study the different components of working capital of the company.
4) To calculate the operating cycle of an organization.
5) To calculate the working capital of an organization.
6) To study the liquidity position of the company with the help of ratios.
METHODALOGY
BABASAB PATIL 2
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
PRIMARY DATA: The information collected from personal interaction with manager and other staffs
SECOUNDRY DATA: The annual report of the company and company website
BABASAB PATIL 3
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
INDUSTRY PROFILE
The Indian Textile Industry occupies an important place in the Economy
of the Country because of its contribution to the Industrial Output, Employment
Generation and Foreign Exchange Earnings. At present, the contribution of the textile
Industry to GDP is about 4 percent. The textile industry provides direct employment
to about more than 35 million people and is the second largest employment provider
in India next to agriculture. The contribution of this industry to gross export earnings
is about 31% of the country.
The Textile Industry is a self-reliant industry from the production
of raw materials to the delivery of final products with considerable value addition at
each stage of processing. The industry was delicensed in 1991 and under the current
policy no prior government approval is necessary to set up textile mills. The per
capita cloth availability in the country has increased from 24.1 square meters in 1991
to 30.7 square meters in 2000-01.The textile sector including the garment sector has a
continual increase in the FDI inflow from Rs.80.99 million to Rs.234.73million.
From growing its own raw material (cotton, jute, silk and wool) to
providing value added products to consumers (fabrics and garments), the textile
industry covers a wide range of economic activities, including employment generation
in both organized and unorganized sectors. Manmade fibers account for around 40 per
cent share in a cotton dominated Indian textile industry. India accounts for 15% of
world's total cotton crop production. And it is the second largest employer after the
agriculture sector in both rural and urban areas. India has a large pool of skilled low-
cost textile workers, experienced in technical skills. Almost all sectors of the textile
industry have shown significant achievement. India's cotton textile industry has a high
export potential. Cost competitiveness is driving the penetration of Indian basic yarns
and grey fabrics in international commodity markets. Besides natural fibers such as
cotton, jute and silk, synthetic raw material products such as polyester staple fiber,
polyester filament yarn, acrylic fiber and viscose fiber are produced in India.
From 1st January 2005, all textile and clothing products would be
traded internationally without quota-restrictions. And this impending reality brings the
issue of competitiveness to the fore for all firms in the textile and clothing sectors,
BABASAB PATIL 4
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
including those in India. With the dismantling of quotas in 2004 under mandate from
the Agreement in Textile and Clothing of the WTO, the focus has clearly shifted to
the future of the Indian textile and clothing exports. It is imperative to understand the
true competitiveness of Indian textile and clothing firms in order to make an
assessment of what lies over a period of time.
Global trade in Textile and clothing -India’s performance
During the MFN period, the textile exporters from industrial countries and those from
developing countries merely changed shares between themselves during 24 years .The
share of industrial countries declined by almost as much (19.2%) as was the gain in
the share of developing countries (18.8%). Clothing exporters, however, exhibit
significant changes, with the share of top exporters having declined by 13.8%.
New entrants have come in as well as some old ones have been knocked out. Of these
new entrants, most- if not all- are from developing countries, since the share of
industrial countries has declined during the period, and that of developing countries
has increased. The countries that are gaining share in clothing exports are the
ones whose industries are integrated to one or the other advanced country
through some policy-induced preferential arrangements. Mexico, Caribbean
region, East European countries and Mediterranean countries are capturing much of
the space vacated.
There has been a much deeper globalization in clothing than in textiles. Indeed, that
has been one of the principal reasons for the developed countries agreeing to an
eventual phase-out in the UR of negotiations. While in textiles, there was an
inexorable shift away from developed countries in 1973 to1997 and to developing
countries at large, in clothing the shift away from developed countries is increasingly
being grabbed by ‘preferred’ developing countries.
Thus, in clothing, the non-preferred group of developing countries is fighting amongst
themselves for a pie that is increasingly declining.
One should expect a much higher level of intra-industry and intra-firm trade in
clothing than in textiles. This is entirely compatible with the fact that it is the trade in
Clothing that is growing faster than that in textile.
BABASAB PATIL 5
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
And this trend is likely to deepen, as Clothing retailers consolidate, and Outward
Processing Trade (OPT) traffic increases. The Opportunity clearly lies much more in
clothing, though the caveat is the exporting.
Country would have to achieve the ‘preferred’ status, and integrate its manufacturing
with that of an importing country in order to continue exporting to the restricted
markets. The pressure to export would intensify in the years to come since 80% of
additional output during 1995-2005 is expected to be located in developing countries.
On the other hand, only 50% of the additional fibre consumption would originate in
developing countries.
COMPANY PROFILE
COMPANY DETAILS:
BABASAB PATIL 6
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Name of the mill : - The Gadag Co-operative Text
Mill Ltd Hulkoti.
Famous name : - The G.C.T.M Ltd Hulkoti
Address : - The G.C.T.M Ltd Hulkoti
Post: Hulkoti 582205
Tq &Dist: GADAG
Karnataka
Phone no: 289042, 289371
Mobile: 9449570255
email:gadagcooptex@sanchar.net.in
Registered office : - Hulkoti
Tq &dist: Gadag
Registration : - The mill has been registered under
The Karnataka co-operative society
act 1959
Registration No : - RCS 2022/72-73
Establishment : - 08-07-1972
Production began : - 1973
Sales turn over : - 25 crores
Nature of business : - production and sale of yarn
BABASAB PATIL 7
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Background of the company
The village hulkoti comprises of various sections of people and since long it has
been the cradle of co-operative movement in having the first primary credit co-
operative society established in the erstwhile Bombay state. The occupation of the
village is mainly agriculture. The farmer and farm laborers form a nucleus of this rural
area. The main crops grown around hulkoti are jowar, cotton, groundnut, chilly and
other pluses.
Since there are no other major irrigation projects, dry land cultivation is the only
way for the farming community. Agriculture produce particularly cotton, groundnut,
jowar etc. were being marketed to the tune of Rs/90 to 100 crores per annum in and
around gadag. Prior to the emergence of the Gadag Co-operative cotton sale Society
Ltd., Gadag farming community was exploited by private traders and commission
agents.
It is at this juncture, realizing the need for upliftment of mach neglected farmers
community and to improve the lot of rural area, Late Shri K.H.Patil, a son of soil and
veteran co-operator devoted he time fully for the establishment of
a co-operative network around hulkoti providing various amenities and scope for
development of farmers which went ahead against all odds both traditional and political
till he transformed a vision into a reality. This Endeavour had transformed into worthy
institution located on either side of highway no 63 between hulkoti and Gadag
After successful setting up of Ginning and pressing unit by the Gadag Co-
operative cotton sale society, the next ambition of our Co-operator, was to establish a
spinning Mill of 25,000 spindles capacity which would consume the main agriculture
produce by paying remunerative prices to cotton growers and to save the farming
community from the cluthes of private traders
It is with this ideal background The Gadag Co-operative mill was established in
the year 1972 with the project cost of Rs 220 lakhs and commenced its trail production
in April 1973 we have a feather in the cap for having installed 25000 spindles capacity
mill in a record time in the entire country.
MODERNIZATION PROGRAM
BABASAB PATIL 8
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
After a period of 18 years there was a need for upgrading technology
of certain machines and to eater to the export needs, the Management proposed a
Modernization Programme at a cost of Rs. 429.00 Lakhs. The term, lending
institutions sanctioned Rs. 236.69 Lakhs and the balance Rs. 192.31 lakhs was from
the internal resources of the Mills. The Mill replaced Carding Machines, winding
machines and added one Open End Spinning machine and one Imported Auto Conner
of latest technology. With the implementation of this Project there was improvement
in the productivity and the quality of the finished product.
To meet the standards of the quality yarn in demand, both in domestic as well as in
International markets, the Management of the Mills thought it inevitable to launch
another Modernization Programme covering Machinery from blow room to Spinning
was planned. This programme, with an estimated cost of Rs. 920 Lakhs was approved
by the national Co-operative Development Corporation (N.C.D.C.) and the Government
of Karnataka.
As part as Modernization Programme, N.C.D.C. has sanctioned Rs. 736.00 Lkahs,
while Government of Karnataka contributed Rs. 136.00 Lkahs as share capital. The rest
amount of Rs. 46.00 Lkahs was mobilized from Members of the Society through shares.
With successful implementation of 2nd Phase of Modernization Programme, the latest
version of Auto leveler Machinery at Carding and Drawing Sections are inducted and
commissioned. Following this, efforts are being made to raise the productivity to high
standards. Further, completion of Modernization enables us to qualitative requirement
of requirement of International market Standards.
BASIC CONCEPTS USED IN TEXTILE MILL
Fiber : A slender filament ; a fine thread like part of a
substance
.
Kapas : Cotton with seeds and impurities
BABASAB PATIL 9
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Lint : Cotton free from seeds and impurities
Ginning : The mechanical process of separating the cotton
Fiber from seeds
Bale : A bundle or packages of cotton compressed and
Bound with cord or wire weight round about 170
Kgs.
Spinning : The process of drawing out and twisting the fiber
of cotton, Wool etc. Into thread or yarn either by
hand or machine.
Spindles : The rods or pins of spinning machine known as
The ring frame holding the bobbins on the which
yarn wound as it is spun . Such spinning is
expressed in terms of the number or spindles or
rotors.
Rotors : In the modern of spinning known as the open end
spinning instead of spindles rollers are used.
Yarn : A textile thread obtained by twisting of
consecutively Disposed and Straightened
ultimate composite fibers.
Hank & cones: Yarn is supplied to the market in to different
forms hank yarn and cone yarn Hank yarn is
convenient form of bleaching, and transport but
needs winding before placing on the loanIt is
used by hand loom weavers .Cone yarn however
eliminates the Need form winding and can be
directly used in power looms .
BABASAB PATIL 10
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Count : A count is measure of thickness or fitness of yarn
The various counts groups manufactured are 10s,
20s, 24s, 30s,32s,34s,40s, 60s, 80s 100s both in
Hank and Cone. Lower counts indicates coarse
yarn and higher counts indicates fine Yarn
Objectives of the company
To satisfy customers by integrating their needs in the mill yarn.
To sustain a mill of able and committed employees and provide opportunities for
growth and development.
To improve the process of managing mill affairs through proper planning, timely
improvement of plan and performance review.
To faster culture innovation with the application of new ideas and methods to solve
the business problems.
To provide the employment opportunities to Men& women of rural area
Nature of business carried
BABASAB PATIL 11
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
The first step the company purchases the raw material i.e. cotton from the farmers
then it mixes it with different quality of cotton according to the quality of yarn they
needed.
The next step is cleaning the minor part and spraying the water to it. Then it kept
one day in cool place. Next step it goes to the major cleaning part it goes to all the
cleaning of the cotton.
The next process is carding here the cotton will become smoothly and white.
Next goes to the simplex method in this method cotton becomes big layers and it makes
the group of layers
The next process is procedure is rolling and grilling here the big layers are rolled
and it is separated from the group and comes in the form of loose thread and next
process is drafting and twisting and the thread becomes strong and it comes layer by
layer in the form of thin yarn. The next is nothing here if thread goes into two parts the
machine will join it and it is called noting process.
Finally after all these process the raw material is converted into the finished
goods which are in the form of yarn.
VISION MISSION QUALITY
VISION: To be a premier textile company with a clear focus to become globally
competitive, through growth and technology up gradation committed to excellence in
quality service and co-operatives
MISSION: To purchase the creation of values for all its customers, share holders,
employees and society at large
BABASAB PATIL 12
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
QUALITY POLICY: The company will give main importance to the satisfaction
of the customers by producing good quality yarn and produce yarn to meet with the
market position the company will not see with the quality of raw material. The company
is also having a quality control department to check out the yarn quality in overall
stages to take any corrections required immediately.
PRODUCT PROFILE
The following table indicates the production performances/ progress since 2003-04 to
2007-08
sl Particulars 2003-04 2004-05 2005-06 2006-07 2007-08
A.
1.
2.
3.
Production
Cotton consumed
kgs in lakhs
Value in lakhs Rs.
Yarn produced in lakhs
kgs
33.37
1894.90
28.01
35.20
1812.25
29.57
32.31
1375.00
26.80
32.49
1460.90
27.53
32.39
165615
27.83
BABASAB PATIL 13
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
B.
1.
2.
Cac capacity Utilization an
productivity
Spdl utilization %
Production
(converted to 40s)in
gram per spindle
63.57
84.00
71.39
82.37
73.49
82.15
73.97
83.15
69.81
86.20
THE MARKET AREA
The mill has its market overall the different areas of the country like N.H.D.C.,
K.H.D.C., malligov, sollapur, ichalkaranji, Bangalore.
OWNERSHIP PATTERN
The G.C.T.M. ltd is situated in the village hulkoti of Karnataka. Shri D.R.Patil and
H.M.Soppin are the chairman and vice chairman of the G.C.T.M. hulkoti.
S.L.
No:
Name Designation
1 Shri D. R. Patil Chairman
2 Shri H.M. Soppin Vice Chairman
3 Shri R.M. Mulimani Director
4 Shri V.B. Inamati Director
5 Shri T.B. Mundavad Director
6 Shri C.B. Karikatti Director
7 Shri V. R. Naganur Director
BABASAB PATIL 14
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
8 Shri S.B. Balaraddi Director
9 Shri S.B. Bhasetti Director
10 Shri S.C. Kanavi Director
11 Shri S.C. Huilgol Director
12 Shri G.N. Patil Director
13 Shri A.S. Patil Director
14 Shri R.B. Hosamani Director
15 Shri B.H. Dyavanashi Director
16 Shri S. K. Kuradagi Director
17 Shri D.S. Odugoudar Director
18 Shri R.Y.
Kempalinganagoudar
Director
General Manager
District Industries center Gadag Director
Deputy Director of Handlooms
And Textile Inviters
Joint Registrar of
Co-operative societies Director
Shri T. Shantaveerappa
Managing Director Director
BABASAB PATIL 15
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
COMPETITORS INFORMATION
The competitors for G.C.T.M are
Banhatti co-operative spinning mill. Banhatti.
Raitara sahakari noolina girani. Rannebennur.
The farmer’s co-operative spinning mill ltd. Hulkoti.
Sangoola mills solapur.
INFRASTRUCTURE FACILITY
Head office: The head office of G.C.T.M is located in hulkoti the function of finance,
marketing and raw material procurement are carried by head office only it doesn’t have
its branch.
Land: The mill is established in the rural area near gadag at village hulkoti with
approval of the site selection committee. The total area covered is of 90528.25 sq ft out
of which build up area is 643.45 sq mt. there is the beautiful garden plantations
pollution free and healthy environment in the mill area.
BABASAB PATIL 16
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Other facilities: The mill has provided an quarters facilities to the workers and there
is an rest room for workers and drinking water facility and also cultural activities in
independence day, republic day, and workers day will be held and there is also an
canteen facility provided by the mill
AWARDS
The mills has got an some awards for continuously three years in the year 1978-79,
1979-80, 1980-81, the mill has ranked first for India and second for Asia.
The two awards were pretend to the mill as per the techno-economic data
presentation which is made by the mill in the Pune on 10th April 2005 the award for the
operating net profit per installed spindle and operating cash profit per installed spindle
has got
WORK FLOW OF MILL
MIXING: Bales of different counts are mixed along with usable wastes, on
different percentage in the mixing bins, cotton bales of different quality are opened and
stacked, called stock mixing, 24 Hours for conditioning before it is process further.
BLOW ROOM: Cotton in losses form is spending on mixing bale openers and
taken further of different cleaning points where the cotton is beaten and trash is
extracted. Finally converted into Lap form of different length, weigh per yard,
depending on the count.
BABASAB PATIL 17
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
CARDING: Lap form Blow room feed to Cards where the cotton is converted from
Lap form to sliver form. During this process trash, short fibers and other impurities are
extracted the different cleaning points, like licker in, Flats section Units. The sliver is
produced of different Hank depending on the counts.
PREPARATORY: Cards sliver is drawn through different drafting Rollers and the
sliver is elongated and increasingly the length of the sliver and radiating in the cross
section by passing through different drafting rollers and convert into a suitable package
by giving little twist to the material called Rove and wound on a Bobbin.
SPINNING: The bobbins from the Preparatory process are feed to the drafting rollers
as final treatment to the material and further increasing the length and reduction the
cross section of the material. This process the material process through Ring and
Traveler and would on the bobbin to form a suitable package the giving optimum of the
twist depending on count of the yarn.
CONE WINDING: Here the yarn spun is cleaned by passing through cleaning
devise called slub catcher and would through suitable package of required length and
weight in the form of a Cone.
DOUBLING: Here two yarn of the same count are doubled by giving necessary
twist in the form of package called bobbins.
REELING: Here single yarn or doubled yarn are wound on the swifting of the
machine called Reel in the form of Hank and are make in the form of Knots. There are
two types, a Plain or Cross Reel.
BUNDLING & BALING: Here the number of knots plain or cross is in a press
depending on the count and weight of the boundless are as per requirements. Bundles
are pressed in the form of Bale depending on the count, Plain or Cross as per the
requirement from the market.
BABASAB PATIL 18
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
PACKING: Here number of cones or cheeses is bagged depending on the count of
the yarn number of cones and weight of the cones. Depending on the requirement of the
market.
DEPARTMENTAL STUDY
FINANCE DEPARTMENT
Finance department is the department which looks after the financial position of the
mill and takes over the investment decision, finance decision the mill has started with
its project cost of Rs.220 lakhs which contributed of Rs. 40 lakhs from members share,
Rs. 80 lakhs is of government share and remaining of Rs 100 lakhs is of term
loan(I.F.C.I)
MEMBER AND SHARE CAPITAL
BABASAB PATIL 19
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Sl.no Category
No of share
holders
Paid up share
Capital
1
2
3
“A”class
((individual/society)
“B” Class (K.A.I.C)
“C” Class (State govt)
3014
1
1
Rs.107.47 lakhs
Rs.015.00 lakhs
Rs.695.26 lakhs
TOTAL 3016 Rs.817.73 lakhs
Mill has funds that may be raised
1) By issue of Shares
2) By receiving deposits from members.
3) By raising loans
4) By entrance fees
5) By accepting donations, subsidies and grants.
6) By commercial institutions.
After starting of mill after the 18 years the mill has been modernized at cost of
Rs. 429 lakhs the leading institutions has sanctioned of Rs.236.69 lakhs and remaining
balance of Rs.192.31 is from the mill itself and 2nd time modernization has done of Rs
920 lakhs which the amount is given by the N.C.D.C.( national co-operative
development co-operation) and government of Karnataka as the part N.C.D.C has
sanctioned Rs.736 lakhs and 136 lakhs by govt of Karnataka and rest of amount Rs. 46
lakhs is from members of society
BABASAB PATIL 20
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
The mill is invested of Rs 1771.45 lakhs and of Rs. 40 lakhs share capital to the state
government and paid the loan amount of Rs.100 lakhs of Rs. I.F.C.I term loan and also
paid the first modernization loan of Rs. 236.69 lakhs
The mill will be raised its fund by issuing of share, receiving deposit from members
by taking loans and debentures and also accepting subsidies and donations and the
sources of finance for the mill is from the K.C.C bank, N.C.D.C. loan, and bijapur
D.C.C. bank ltd.
HUMAN RESOURCE DEPARTMENT
The human resource department of the mill is recruiting, selecting seeing welfare of
the employees and providing necessary facilities for the workers. Were as in the Gadag
co-operative textile mill there are 744 workers here 85 are staff members, 650
workers and 9 are securities
The facilities for the worker are transportation, medical, canteen, provident fund,
gratuity There are 3types of workers are there first selected (fresh) workers will be
taken as a trainee and in trainee there are two stages first stage trainee and second stage
trainee and after trainee they will be treated as badli and then as permit.
The mill works for 24 hours which is in 3 shifts no women workers are permitted
for night shift and the labour turnover is of 30 to 35 the over time duty is also there and
will be paid in double as per there working hours
The salary for the workers are paid in as the basic salary + ESI (employee state
insurance) + provident fund of 12% and bonus of 8.33% will be given and salary for 1 st
stage trainee is Rs.60 and for 2nd stage trainee Rs.65 and for badlis it depend on there
work which is of Rs.75-103 and for permits also depend on there work load and shift
allowance of Rs.250 for 26 days and of Rs 312 is attendance allowance for 26
attendance per month. The recruiting of staff will be done by managing director, general
manager, asst manager and H.R. manager and other workers will be selected by the H.R
department
The G.C.T.M also provided quarters for workers with rent of Rs.20 per month and
has a transportation facility from Gadag to hulkoti and in the G.C.TM. the cultural
activities also be held on independence day republic day, and on workers day.
BABASAB PATIL 21
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
PRODUCTION DEPARTMENT
The G.C.T.M. is the mill which produces the yarn which are in of two types one
is in cone and another as hank .The product has been done from cotton to final product
i.e yarn. In the mill it has purchased machines from m/s lakshmi from coimbatore
The mill works 24hour of its production and it has 3shifts the first shift is handled
by production manager and 2nd shift by deputy spinning master and 3rd shift is handled
by spinning supervisor and the has 7500kg of daily production
PROCESS OF PRODUTION
MIXING: Bales of different counts are mixed along with usable wastes, on
different percentage in the mixing bins, cotton bales of different quality are opened and
stacked, called stock mixing, 24 Hours for conditioning before it is process further.
BABASAB PATIL 22
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
BLOW ROOM: Cotton in losses form is spending on mixing bale openers and
taken further of different cleaning points where the cotton is beaten and trash is
extracted. Finally converted into Lap form of different length, weigh per yard,
depending on the count.
CARDING: Lap form Blow room feed to Cards where the cotton is converted from
Lap form to sliver form. During this process trash, short fibers and other impurities are
extracted the different cleaning points, like licker in, Flats section Units. The sliver is
produced of different Hank depending on the counts.
PREPARATORY: Cards sliver is drawn through different drafting Rollers and the
sliver is elongated and increasingly the length of the sliver and radiating in the cross
section by passing through different drafting rollers and convert into a suitable package
by giving little twist to the material called Rove and wound on a Bobbin.
SPINNING: The bobbins from the Preparatory process are feed to the drafting rollers
as final treatment to the material and further increasing the length and reduction the
cross section of the material. This process the material process through Ring and
Traveler and would on the bobbin to form a suitable package the giving optimum of the
twist depending on count of the yarn.
CONE WINDING: Here the yarn spun is cleaned by passing through cleaning
devise called slub catcher and would through suitable package of required length and
weight in the form of a Cone.
DOUBLING: Here two yarn of the same count are doubled by giving necessary
twist in the form of package called bobbins.
REELING: Here single yarn or doubled yarn are wound on the swifting of the
machine called Reel in the form of Hank and are make in the form of Knots. There are
two types, a Plain or Cross Reel.
BABASAB PATIL 23
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
BUNDLING & BALING: Here the number of knots plain or cross is in a press
depending on the count and weight of the boundless are as per requirements. Bundles
are pressed in the form of Bale depending on the count, Plain or Cross as per the
requirement from the market.
PACKING: Here number of cones or cheeses is bagged depending on the count of
the yarn number of cones and weight of the cones. Depending on the requirement of the
market.
The mill has 32.39 lakh kg of cotton has consumed in 2007-08 and 27.86 lakh kgs
of yarn is produced and 69.81% of spindle has been utilized
PURCHASE DEPARMENT
The purchasing of cotton is made through the conducting business committee
meeting were as the purchasing of cotton is made on every weekly of 500 to 600 bales
were as every one bale consists of 165 kgs the mill purchases different variety of cotton
such as NH44, J34, MBCH, BHARAMA, 26MM, and 28MM
The purchase of cotton is made from local which is at open auction market by the
Gadag co-op cotton sale society, T.A.P.C.S.M of annigeri were as these local cotton is
graded by the A.P.M.C authority. The purchases are also made from CCI (cotton co-
operation of India, maharastra co-operative federation, shanthi textile Mumbai, baradia
cotton company Mumbai and B.M. kollar from gokak
The price for the local is more of Rs.100-150 than the market rates and were as the
department purchase right material, right quality, and right quantity of cotton for the
BABASAB PATIL 24
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
mill and the mill collects the sample and makes the laboratory test and make sure of
quality which they requires and make business committee meeting and gives order of
purchasing and the payment of purchased material is made after 30 days of purchasing
to the suppliers
STORE DEPARTMENT
Objectives of the Stores Department :
1) Concentrating towards smooth running of the production process.
2) Facilitating all required equipments on time .
3) Reduction of Inventory equipments on time .
4) Working like a traffic signal to signalize to all equipments.
5) Proper maintenance of all equipments
The mills storage has divided in 2 sub department which one is of material store and
general stores and there are 11000 items are maintained in these department and the
mill has an 7500 metric ton of storage capacity and stock of 2000 metric ton of capacity
in godown. The store department’s construction costs of Rs 13.18 crores and the
department is using two ledgers one is material receipt ledger and material issued
ledger.
QUALITY CONTROL DEPARTMENT
FUNCTION OF THE QUALITY CONTROL DEPARTMENT :
Random lab weight checking
Within lap variation
Cleaning efficiency
Waste study speeds
BABASAB PATIL 25
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Wrapping checking
Naps study
Uniformity checking
Idle spindle
Top roller pressure checking
Rewinding study
Gauge and tension weight checking
Knot inspection
Knot weight checking
This is the department which checks out the quality of the cotton and the
produced yarn in the mill. The department which checks quality before purchasing of
cotton by taking sample from supplier. the G.C.T.M has its laboratory for testing of the
cotton and the lab has installed of 1.25 crore worth of machines which is of
computerized machines the quality control also helps in minimizing cost and improves
in working condition it also helps the G.C.T.M to know the cost of there product
The cotton testing is having some steps of testing of cotton the cotton testing is
made on H.V.I (high volume instrument) the testing of material is made out of one bale
half kg will be taken testing is made of its length, strength (grass per tex), informative
ratio, maturity ratio the mill is using 26mm type of cotton for coarser, 28mm for 30s,
34s, and 40s yarn, and 31mm for 60s and above.
In blow room lap weight checking its speed and settings cleaning efficiency and
next in carding department checking of the waste and C.V%(coefficient variation)
unevenness testing 120mtrs of sliver and variation of length is made by oster testing
monthly there will be wheel checking and next drawing is made and in drawing
wrapping checking is made it is of weight checking and study of breakage and setting of
an weight is by automation and next in simplex department spindles are checks hanks
are also checks and its stretching percentage is tested and in spinning department
checking of single yarn strength and double yarn strength and checks yarn fast per kms
and next is of winding which in winding it is made of rewinding of auto counts and
BABASAB PATIL 26
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
makes cone weight checking and next is reeling were as knot has been tested which is
of starting end to finishing end has been checked and next is doubling in this checking
for the covering of doubling and lastly baling and packing which checks the bale
weight, packet weight, bundle weight and tare weight checking is made
MARKETING DEPARTMENT
The marketing department has kept an long relationship with its customers from
purchasers and suppliers. The mill manufacture hank yarn and cone yarn as per the
market demands the sale of hank yarn and cone yarn is of 40:60 the daily production of
yarn is about 7500 kgs
Were mill works 24 hours for all seven days a weak
The selling of yarn is given to the weavers co-operative apex organization and
Karnataka handloom development corporation the mill gets order by phones by there
own sales depot and by local agents. The marketing department fixes the price of yarn
before fixing of price the department look after the total cost of production and market
demand and checking competitors price rate and quality and customers ability of
purchasing
The mill has direct and indirect channels of distribution were as in the direct channel
is from direct mill to the traders and indirect channel it is from mill to the agents and
then to the customers
ADMINISTRATIVE DEPARTMENT
The administrative department is the department which looks after the payment
of salaries, income tax purchasing and the department which maintains the files and
BABASAB PATIL 27
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
records etc. up to the date and collecting and presenting data of record and the
department which maintains office and provides the necessary required facilities
The administration department which decides on giving yearly bonus and to
provide the finance to all department and the department which conducts the meeting,
implementing the polices, controlling of different department and finally it is a
department which controls over all the activity of the mill.
MAINTENANCE DEPARTMENT
It is the department which has an relationship with the production
department. This department helps in maintaining of plant and machinery which to
work properly. If there is of any cause in machines the technicians are there to look
after and make repairs and maintain and look over all machines daily the department
keeps the stock of important spare parts of machine and it maintains.
The department which looks over the blow rooms its new lines, pre opener,
mbo, mono-cylinder, unimix, ERM, VXL, in blow room these all machines will make
cleaning for every 10 days and while cleaning if there is any repair then it that part will
make repair if it is need of replacement it will be replaced. In carding room half setting
is done for once in 15 days and full setting is done once in 3 months and larrikin wire
changing has been done for every 9 months
In the simplex department the general cleaning will be done for every 15 days
and in spinning department there is also general cleaning will be done for every 10 days
and spindle oil changing for every 6 months and spindle gauge also for 6 months and in
winding general cleaning has been done once in a week and spindle servicing is done
once in 30 days and in reeling oiling will been made once in a month and in packaging
cleaning once in a month will be done like these the maintenance department will
maintain the all department of the G.C.T.M.
BABASAB PATIL 28
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
SWOT ANALYSIS
STRENGTHS
1) Good reputation in the market
2) Good network of dealers
3) Well connected with roads
4) Well established in infrastructure facilities
5) 45% share capital given by the government
6) New specialized types of machines
7) Good support from the farmers as well as from the society
8) Financially strong
WEAKNESSES
1) No nation wide brands
2) Less sales promotion activities
3) Large work force
4) Partly automated
5) Lack of R&D
6) Low labour productivity
7) Not concentrating towards competition
BABASAB PATIL 29
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
OPPORTUNITIES
1) Land is available for expansion
2) Company can tie with other reputed company
3) Existence of a large market
4) Possibility of 100% automations
5) Market expansion
6) They are shortly getting the ISO 9001
THREATS
1) Decreasing in agricultural production
2) Globalization and liberalization
3) Cut through the competition
4) Taste and fashion of customers turning towards the ready
Made Garments
5) Negligence of Government as well as less guidance and low
BABASAB PATIL 30
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Support from the Government
WORKING CAPITAL
MEANING AND DEFINITION OF WORKING CAPITAL
Working capital is the amount of funds which a company has to finance its day to
day operations it can be regards as the part of capitals which the capitals is basically
classified into fixed and working.
Fixed capital is normally invested in fixed assets and working capital in current
assets. It is used in day to day operations. These are the funds that are invested in
current assets. The form of these current assets keeps on changing. Ex: Raw material to
work in progress to finished product. , so it is also called circulating capital.
A study of working capital is of major part of the external and internal analysis
because of its close relationship with the current day to day operation of the business.
Working capital consists of broadly for that the assets of a business that are used at
related current operation and is represented by raw material, stores, work in progress,
and finished goods merchandise, bills receivable.
BABASAB PATIL 31
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Definition of working capital
Gerstenberg
“working capital means current assets of company that are changed in the
ordinary course of business from one form to another, ex: from cash to inventories,
inventories to receivables, receivables into cash”
Shubin
“ Working capital is the amount of funds necessary to the cost of operating the
enterprise. Operating expenses involve investment in current assets, payment towards
overhead and expenses. Investment made in these heads is classified as working
capital”.
J. smith
“ The sum of the current assets is the working capital of the business”
’’WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITY”
BABASAB PATIL 32
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
CONCEPT OF WORKING CAPITAL
There are two concepts of working capital that are:
1) Balance sheet concept
2) Operating cycle concept.
1) Balance sheet concept:
Working capital as per this defined in terms of current assets and current liabilities.
Balance sheet concept further classifies working capital into a) gross and b) net working
capital.
a) Gross working capital: it refers to total investment made in current assets. It is also
called circulating rotating from one head to another. Ex. Cash to raw material, raw
material to finished products, finished products to debtors, and debtors to cash. This
concept stresses on quantity aspect; i.e. to refer to total investment made in different
current assets. Bonneville and beway have defined gross working capital as ’’ any
fund received which increases the current assets”.
b) Net Working capital: as per this concept working capital is the difference between
current assets and current liabilities. This concept stresses on quality aspect of
working capital. The difference between current assets highlights on liquidity aspect
and quality of current assets. A firm that has excess of current assets over liabilities is
said to possess adequate liquidity. On the contrary firm that has excess of current
liability over current assets means it does not have adequate liquidity. It means that
part of current assets of such firm are financed through fixed assets.
BABASAB PATIL 33
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
2) Operating cycle concept:
Operating Cycle or Working Capital Cycle indicates the length of time between
affirms paying for raw materials entering into finished stock and receiving cash on the
sales of such Finished Stock.
This operating cycle differs from firm to firm. Longer the operating cycle greater
will be the amount of Working Capital required and vice versa. Thus it plays an
important role in determining the Working Capital needs of a firm.
OPERATING CYCLE CHART
BABASAB PATIL
Cash Raw Materials
Work In Process
Finished goodSales
Debtors
34
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Operating Cycle is the time duration required to convert sales, after the
conversion of resources into inventories, into cash. The operating cycle of a G.C.T.M
involves three phases.
1. Acquisition of resources such as raw material, labour, power and
fuel etc.
2. Manufacture of the product which includes conversion of raw
material into work-In- progress into finished goods.
3.Sales of the product either for cash or on credit. Credit sales creates
book Debts for collection.
In the THE GADAG CO-OPERATIVE TEXTILE MILL LTD (manufacturing
concern), the working capital operating cycle starts with the purchase of raw materials
and ends with the realization of cash from the sale of finished products. It is also
called as cash conversion cycle, production cycle etc. It involves the purchase of raw
materials and stores, its into stocks of finished goods through the work-in-Progress
with the progressive increment of labor and service costs, conversion of finished
goods (Yarn Products) into sales, Debtors and receivables and ultimately realization
of cash and this cycle continuous again from cash to purchases of raw material and so
on.
BABASAB PATIL 35
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
CLASSIFICATION OF WORKING CAPITAL
Working capital can be classified on the basis of concept and on the basis of time.
Various types of working capital are as follows
1) On the basis of concept :
Working capital on this basis of concept is classified into
A) Gross working capital: It refers to total investment made in current asset.
Current assets are the asset which can be converted into cash within a short period
of an accounting year. Current assets include cash, debtors, bills receivables and
short term securities etc.
B) Net working capital: It is the difference between current assets and current
liabilities. Current liabilities are those claims of outsiders which are expected to
mature for payment within an accounting year and include creditors, bills payable
and outstanding expenses. Net working capital can be positive or negative.
BABASAB PATIL
KINDS OF WORKING CAPITAL
1. ON THE BASIS OF CONCEPT
2. ON THE BASIS OF
TIME
GROSS WORKING CAPITAL
NET WORKING CAPITAL
PERMANENT OR FIXED
TEMPORARY OR
VARIABLE
REGULAR RESERVE SEASONAL SPECIAL
36
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Positive net working capital will arise when current asset exceeds current
liabilities. A negative net working capital occurs when current liabilities are in
excess of current assets.
2) On the basis of time :
Classification of working capital in this case is made on the basis
of time for which investment is required. Kinds of working capital in
this category are:
1) Permanent : Some portion of working capital always remain permanent or fixed.
This refers to minimum investment a firm has to make and keep in certain current
assets. Firm has to always maintain minimum cash balance, inventory, debtors etc.
as there current assets are required permanently. They are normally financed
through long term capital.
Such permanent working capital is further classified into
a) regular and b) reserve
a) Regular: regular permanent working capital is used in
routine business operations.
b) Reserve: reserve working capital refers to some portion of working capital that is
kept as reserve to meet any contingency.
2) Temporary working capital: required of such capital varies or fluctuates depending on
season. Its requirement is not continous it is normally finance through short term
sources, like overdraft, cash credit and other short term liabilities.
Temporary working capital is further classified into:
A) Seasonal working capital: requirement of working capital is based on
particular seasons
ex; winter, summer or festival seasons etc during these seasons there will be
additional demand for the products. To meet out such demand firm has to make
additional arrangement of working capital.
BABASAB PATIL 37
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
B) Special working capital: requirement of such working capital is necessitated to meet
demands of special occasion’s ex. Occasion of world cup cricket, Olympics, kumba
mela, elections. During these special occasions demand for goods and service will
increase. To meet such special demand firm has to make temporary arrangement of
working capital
DETERMINANTS OF WORKING CAPITAL
Requirement of working capital differs from one firm to other. This is because of
business conditions and policies of conducting business differ. Working capital required by
each from is determined by following factors.
1) Nature of business: important factor that determines requirement of working capital is
nature of business a firm is undertaking. Firm that are engaged in production and marketing
need more working capital compared to the firm that are in trading or service oriented
business. This is because manufacturing units need more current assets compared to service
oriented units.
2) Size of business: Size of the business obviously determines the requirement of the
working capital bigger the size more is the requirement of the working capital. Larger the
scale of operations, larger the investment required in current assets.
3) Operating cycle: Operating cycle means period from which investment is locked
up in different operations. Longer the period of inventory holding, work in progress, finished
goods etc more is the investment needed in the operations. This necessities more investment
in current assets.
4) Stock turn over: stock turnover refers to number of times stock is turned over that
is it refers to sales. Quicker the stock turn over (quick sales) less is the working capital. Slow
pace of stock turnover demands more investment is locked up in operation.
5) Credit policy: Credit policy of the firm will influence requirements of working
capital. Firms that offer liberal credit to the debtor have make more investment in production
operations. Such firms need more working capital to keep their production operation
continuous. Requirement of working capital will be much more if the firm buys on cash and
sells on credit. On the contrary firms that buy on credit and sell on cash basis need less
working capital.
6) Production policy: Firms that undertakes all production operations within the
organization need more working capital. Such firms have to make investment to manufacture
BABASAB PATIL 38
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
every component or part. On the contrary, firms which undertake outsourcing that is buying
some of the components or parts from out side agencies need less working capital.
7) Growth of business: Firms that are experiencing growth need more working
capital. Such firms have to constantly increase their production levels. To meet rising needs
of sales targets. They need to continuously increase investment in current assets.
8) Earning capacity and its appropriation: firms that earn sufficient profits and invest
a portion of profit in business needs less working capital. Ploughing back of profits and
accumulated reserves will minimize dependency on external capital for working capital
needs. On the contrary firms that follow liberal divided policy are firms that do not have
adequate surplus need to borrow more to meet regular working capital needs.
Needs of Working Capital:
The need for working capital to run the day-to-day business activities cannot
be overemphasized. We will hardly find a business firm which does not required any
amount of working capital. Indeed, firms differ in their requirements of the working
capital.
The firm’s aim is that maximizing the wealth of shareholders. Earning a steady amount of profit requires successful sales activity. The firm has to invest enough funds in current assets for generating of sales activity. Current assets are needed because sales do not convert into cash instantaneously. There is always an operating cycle involved in the conversion of sales into cash. Therefore Working Capital required for:
1) To meet the cost of inventories including total of raw materials purchased parts,
operating
Supplies, work in progress, finished goods.
2) To pay wages, salaries, for indirect labor, clerical staff, managerial and
supervision staff.
3) To meet overhead costs, including those of maintenance services activities, fuel,
power charges, taxes and general expense administration.
4) To bear the expansion (with regard to promotion of sales) e.g. expenses on
packing, advertisement, salesmanship, Sales Servicing, After requires, Credit
Facilities, Delivery Services, etc.
BABASAB PATIL 39
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
IMPORTANCE OF WORKING CAPITAL
Even though the skills for maintaining the working capital are somewhat
unique, the goals are the same-viz. to make an efficient use of funds for minimizing
the risk of loss to attain profit objectives.
Firstly, the adequate of working capital contributes a lot in raising the credit-standing
of a corporation in terms of favorable rates of interest on bank loan, better terms on
goods purchased, reduced cost of production on account of the receipt of cash
discounts, etc.
Secondly, a company with sufficient working capital is always in a position to take
the advantage of any favorable opportunity either to purchase raw materials or to
execute a special order or to wait for better market position.
In the third place, the ability to meet all reasonable demands for cash without
inordinate delay is a great psychological factor to improve the all rounds efficiency of
the business.
Lastly, during slump the demand for working capital, instead of coming down, shoots
up. A good amount of working capital is locked up in the inventories and book debts.
Concerns having ample resources can tide over that period of depression.
Thus, working capital is regarded as one of the conditioning factors in the long run
operations of the firm, which is often inclined to treat it as an issue of short run
analysis and decision making.
Components of Working Capital:
There are two components of Working Capital
A. Current Assets
BABASAB PATIL 40
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
B. Current Liabilities
A) Current Assets:
Components of Current Assets are as follows:
1. Cash & Bank Balance
2. Stock of Raw Material at cost- work in process and Finished
Goods.
3. Advanced Recoverable in Cash or kind or kind or for value to
be received.
4. Deposits under the company scheme.
5. Advanced payment of income takes credit certificates..
6. Outstanding debts for a period exceeding six months.
7. Balance with central excise authorities.
B) Current Liabilities:
Components of Current Liabilities are as follows:
1. Sundry Creditors for the goods and expenses.
2. Income tax deducted at sources from contractors.
3. Expenses Payable.
4. Unclaimed Dividend.
5. Security Deposits.
6. Liabilities for bills discounted.
7. Bank Overdraft Acceptance.
Working Capital Management concerned with the following aspects:
1. Cash Management:
Cash is the important current asset for the operation of the business. cash is
the basic input 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 keep sufficient cash, neither more nor less.
BABASAB PATIL 41
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Cash is the liquid form of an asset. It is the ready money available in the
firm or with the business, essential for its operations. A firm needs the cash for the
following three purposes:
(a) The Transaction Motive:
(b) The Precautionary Motive:
(c) The Speculative Motive:
2. Receivables Management:
Receivable represents amounts owed to the firm as a result of sale of
goods or services on the ordinary course of business. These are claims of the
firm against its customers and form part of its current assets. These receivables
are carried for the customers. The period of credit and extent of receivables
depends upon the credit policy followed by the firm. The main purpose of
maintaining or investing in receivables is to meet competitors, to increase sales,
and to maintain a cordial relationship with the clients.
3. Inventory management:
Every enterprise needs inventory for smooth running of its activities. It
serves as a link between production and distribution process. There is, generally a
time lag between the recognition of a need and its fulfillment. The greater the time
lag, the higher the requirements for inventory. The unforeseen fluctuations in
demand and supply of goods necessitate the need for inventory. Moreover, it
provides a cushion for future price fluctuations.
ANALYSIS AND INTERPRETATION
Statement of changes in working capital
Particulars As @
31/3/05
As @
31/3/06
Effect
of wc
Increase
decrease
BABASAB PATIL 42
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
A. Current assets
Cash on hand
Cash at bank
F.D with bank
Deposits
Sundry debtors
Pre university college
Loan to FCSM
Advances
Other receivables
Closing stock
Total current assets
B. Current liabilities
Current liabilities
Bonus provision payable
Other payables
Total current liability
Net working capital(A-B)
Increase or decrease in
working capital
Total working capital
15143
5027449
16051822
4628150
35371142
255296
8500000
1616172
633633
52948390
125047200
40050746
1254248
2090328
43395322
81651878
81651878
41550
4634497
246822
4630150
51579031
255296
8500000
4062468
631633
53043163
127624611
49098335 1280042
2713579
53091956
74532655
7119223
81651878
26407
2000 16207888
2446296
94773
18777364
7119223
25896588
392952
15805000
2000
9047589 25794
623252
25896587
25896558
INTERPRETATION
The statement shows that the changes in working capital in the year 2004-05 and
2005-06. It shows how the current assets and current liabilities are changes in two
years the different between current asset and current liabilities i.e. net working capital
of two years 2004-05 and 2005-06 is Rs 81651878 and Rs 74532655 respectively it
BABASAB PATIL 43
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
shows the working capital decreases of Rs 7119223 in 2005-06 which compare to
2004-05. Here due to decrease the firm is not satisfactory with its working capital
In current assets
1. cash in hand increases of Rs 26407
2. cash at bank is decreasing of Rs 392953
3. F.D with banks is also decreased Rs 15805000
4. deposits has increased of Rs 2000
5. sundry debtors has increased of Rs 16207888
6. advances has increased to Rs 2446296
7. other receivables has decreases of Rs 2000
8. closing stock has increased to Rs 94773
In current liabilities
1. bonus provision is increasing of Rs 25794
2. other payables is increasing of Rs 623252
3. other liabilities are increased to Rs 9047589
Statement of changes in working capital
Particulars As @
31/3/06
As @
31/3/07
Effect
of wc
Increase
Decrease
BABASAB PATIL 44
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
A. Current assets
Cash on hand
Cash at bank
F.D with bank
Deposits
Sundry debtors
Pre university college
Loan to FCSM ltd
Advances
Other receivables
Closing stock
Total current assets
B. Current liabilities
Current liabilities
Bonus provision payable
Other payables
Total current liability
Net working capital(A-B)
Increase or decrease in
working capital
Total working capital
41550
4634497
246822
4630150
51579031
255296
8500000
4062468
631633
53043163
127624611
49098335 1280042
2713579
53091956 74532655
10082999
84615654
20530 18446450
265078
4630150 47320434
255297 8500000
5151421 500000
62356456
147445816
58462247 1395879
2972036
62830162 84615654
84615654
13811952
18256
1088953
9313293
24232454
24232454
21020
4258597
131633
9363912115837
258457
14149456
10082999
24232454
INTERPRETATION
This statement shows that the changes in working capital in the year 2005-06
and 2006-07. it shows the current assets and current liabilities i.e net working capital
of two years is 2005-06 and 2006-07 is rs 74532655 and rs 84615654 respectively. It
BABASAB PATIL 45
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
shows the working capital increases Rs 10082999 in the year 2006-07 compare to
2005-06 by increasing the firm is satisfactory with its working capital.
In current assets
1. cash in hand has decreased by Rs 21020
2. cash at bank is increased to Rs 13811952
3. F.D with bank is increasing of Rs 18256
4. there is no increase or decrease in deposits
5. sundry debtors is decreased to Rs 4258597
6. advances paying increased to Rs 1088953
7. other receivables has decreased to r 131633
8. closing stock is increased to Rs 9313293
In current liabilities
1. bonus provision is increased of Rs 115837
2. other payable is also increased of Rs 258457
3. other liabilities is increased to Rs 9363912
Statement of changes in working capital
Particulars As @
31/3/07
As @
31/3/08
Effect
of wc
Increase
decrease
A. Current assets
Cash on hand 20530 40460 199302217724
BABASAB PATIL 46
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Cash at bank
Fd with bank
Deposits
Sundry debtors
Pre university college
Loan to fcsm ltd hulkoti
Advances
Other receivables
Closing stock
Recvd from NCDC
Total current assets
B. Current liabilities
Current liabilities
Bonus provision payable
Other payables
NCDC payable
Total current liability
Net current assets(A-B)
Increase or decrease in
working capital
Total working capital
18446450
265078
4630150 47320434
255297 8500000
5151421 500000
62356456- --------------------------
147445816
58462247 1395879
2972036
62830162 84615654
6991114
91606768
16228726
275078
4431466 51709943
255297 8500000
5687379 535374
58071755 1319412
147054890
49593596 1564000
2971114 1319412 55448122 91606768
91606768
10000
4389509
535958 35374
1319412
8868651
922
15179756
15179756
198684
4284700
168121
1319412
8188641
6991114
15179756
INTERPRETATION
The statement shows that the changes in working capital in the year 2006-07
and 2007-08 it shows how the current assets and current liabilities are changes in the
two years the difference between current assets and current liabilities i.e. net working
capital of the two years is 2006-07 and 2007-08 is Rs 84615654 and 91606768
respectively. It shows the working capital increases of Rs 6991114 in the year 2007-
BABASAB PATIL 47
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
08 compare to 2006-07 by the increase in the net working capital firm is satisfactory
with its working capital
In current asset
1. cash in hand increased of Rs 19930
2. cash at bank increased of Rs 2217724
3. F.D. with bank has increased of Rs 10000
4. deposits has decreased to Rs 198684
5. sundry debtors has increased to Rs 4389509
6. advances paying is increased to Rs 535958
7. other receivables also increases of Rs 35374
8. closing stock has decreased of Rs 4284700
9. there is a receivables from NCDC of Rs 1319412
In current liability
1. bonus provision has increased of Rs 168121
2. other payable has decreased of Rs 922
3. payable of received of NCDC of Rs 131912
4. other liabilities has decreased to Rs 8868651
Statement of changes in working capital
Particulars As @
31/3/08
As @
31/3/09
Effect
of wc
Increase
decrease
A. Current assets
Cash on hand
Cash at bank
40460 16228726
275078
277094 19346310
311758413366
BABASAB PATIL 48
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Fd with bank
Deposits
Sundry debtors
Pre university college
Loan to fcsm ltd hulkoti
Advances
Other receivables
Closing stock
Recvd from NCDC
Total current assets
B. Current liabilities
Current liabilities
Bonus provision payable
Other payables
NCDC payable
Total current liability
Net working capital (A-B)
Increase or decrease in
working capital
Total working capital
4431466
51709943
255297 8500000
5687379 535374 58071755 1319412
147054890
49593596 1564000
2971114
1319412 55448122
91606768
91606768
275078 4052950
51003132
255297 8500000
48584281021508
46289123-----------
135628920
524862261227535
4744789
58458550
77170370
14436398
91606768
486134
336465
1319412
5259595
14436398
19695992
378516
706810
828951
117826321319412
2892630
1773675
19695992
19695992
INTERPRETATION
The statement shows that the changes in working capital in the year 2007-08 and 2008-09 it shows how the current assets and current liabilities are changes in the two years the difference between current assets and current liabilities i.e. net working capital of the two years 2007-08 and 2008-09 is Rs 91606768 and Rs 77170370 respectively it shows the decreasing of Rs 14436398 in 2008-09 which compare to 2007-08 by decreasing in net working capital the firm is not satisfactory with its working capital
In current assets 1. cash in hand has decreased of Rs 133662. cash at bank is increased of Rs 3117584
BABASAB PATIL 49
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
3. F.D with bank has no changes 4. deposits has been decreased of Rs 378516 5. sundry debtors has decreased to Rs 7068106. advances is decreased of rs8289517. other receivables has increased of Rs 4861348. closing stock is decreased to Rs 117826329. received from NCDC of Rs 1319412 is decreased
In current liability1. bonus provision is decreased to Rs 3364652. other payables is increases of Rs 17736753. NCDC payables in decreased of Rs 13194124. other liabilities has increased of Rs 2892630
CALCULATION OF OPERATING CYCLE OF THE G.C.T.M. LTD
Investment in working capital is influenced by four key events in the production and sales cycle of the G.C.T.M
Purchases of raw materials Payment of raw materials Sale of finished goods Collection of cash for sale
The firm begins with the purchase of raw material which are paid for after a delay which represent the account payable period. The firm converts the raw material into finished goods and then sells the same. The time lag between the purchase of raw
BABASAB PATIL 50
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
materials and sale of finished goods is the inventory period customers pay there bills some time after the sales. The period that elapses between the date of sales and date of collection of receivable is the accounts payable period. The time that elapses between the purchase of raw materials and the collection of cash for sales is referred to as the operating cycle. Where as the time length between the payment for raw material purchases and the collection of cash for sales is referred to as the cash cycle. The operating cycle is the sum of the inventory period and the accounts receivable period, whereas the cash cycle is equal to the operating cycle less the accounts payable period. From the financial statement of the firm we can estimate the inventory period, the accounts receivable period and accounts payable period.
Inventory period = average inventory Annual cost of goods sold/365
Average receivable period = average accounts receivable Annual sales
Accounts payable period = average accounts payable Annual cost of goods sold/365
Financial information of THE G.C.T.M. Ltd 2005-2006
Particulars P&l a/c data Particular Beginning EndingSales Cost of goods sold
231390442206149519
InventoryA/c receivable A/c payable
46919052 633633 1254248
46274537 631633 1280042
Sales = sales + yarn sales + other sales 228943400 + 700864 + 1746178
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THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
= 231390442
Cost of production 210628618Add opening stock of finished goods 20107336 230735954Less closing stock of finished goods 24586435 Cost of goods sold 206149519
Inventory period = average inventory Annual cost of goods sold/365 = 46596794 206149519/365
= 46596794 564793 = 82.50
Average receivable period = average accounts receivable Annual sales
= 632633 231390442/365
= 632633 633946
= 0.99
Accounts payable period = average accounts payable
BABASAB PATIL 52
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Annual cost of goods sold/365
= 1267145 206149519/365
= 1267145 56479320 = 2.24
Operating cycle = inventory period + accounts receivable period = 82.50 + 0.99
= 83.49
Cash cycle = operating cycle – accounts payable period = 83.49 – 2.24 = 83.49
Financial information of THE G.C.T.M. Ltd 2006-2007
Particulars P&l a/c data Particular Beginning EndingSales Cost of goods sold
254655866 215192439
InventoryA/c receivable A/c payable
46274537 631633 1280042
50785141 500000 2972036
Sales = sales + yarn sales + other sales 3484623 + 250490529 + 680714
BABASAB PATIL 53
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
= 254655866
Cost of production 220852642Add opening stock of finished goods 24586435 245439077Less closing stock of finished goods 30246638 Cost of goods sold 215192439
Inventory period = average inventory Annual cost of goods sold/365 = 48529839 21519439/365
= 48529839 589568 = 82.31
Average receivable period = average accounts receivable Annual sales
= 565816 254655866/365
= 565816 697687
= 0.81
Accounts payable period = average accounts payable Annual cost of goods sold/365
BABASAB PATIL 54
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
= 2126039 215192439/365
= 2126039 589568 = 3.60
Operating cycle = inventory period + accounts receivable period = 82.31 + .81
= 83.12
Cash cycle = operating cycle – accounts payable period = 83.12 – 3.60 = 79.52
Financial information of THE G.C.T.M. Ltd 2007-2008
Particulars P&l a/c data Particular Beginning EndingSales Cost of goods sold
274253348 244014252
InventoryA/c receivable A/c payable
55889767 500000 2972036
50785141 1854786 4290526
Sales = sales + yarn sales + other sales 262156033 + 1131833 + 10965481 = 274253348
BABASAB PATIL 55
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Cost of production 235780335Add opening stock of finished goods 30246638 266026973Less closing stock of finished goods 22012721 Cost of goods sold 244014252
Inventory period = average inventory Annual cost of goods sold/365 = 106674908/2 244014252/365
= 53337454 668532 = 79.78
Average receivable period = average accounts receivable Annual sales
= 2354786/2 274253348/365
= 1177393 751379
= 1.56
Accounts payable period = average accounts payable Annual cost of goods sold/365
= 7262562/2 244014252/365
BABASAB PATIL 56
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
= 3631281 668532 = 5.43
Operating cycle = inventory period + accounts receivable period = 79.78 + 1.56
= 81.34
Cash cycle = operating cycle – accounts payable period = 81.34 – 5.43 = 75.91
Financial information of THE G.C.T.M. Ltd 2008-2009
Particulars P&l a/c data Particular Beginning EndingSales Cost of goods sold
256739185 231802183
InventoryA/c receivable A/c payable
50785141 1854786 4290526
39186088 1021508 5972323
Sales = sales + yarn sales + other sales 13609228 + 242486231 + 643726 = 256739185
Cost of production 233038800Add opening stock of finished goods 22012721 255051521Less closing stock of finished goods 23249338
BABASAB PATIL 57
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Cost of goods sold 231802183
Inventory period = average inventory Annual cost of goods sold/365 = 89971229/2 231802183/365
= 44985614 635074 = 70.83
Average receivable period = average accounts receivable Annual sales
= 2876294/2 256739185/365
= 1438147 703395
= 2.04
Accounts payable period = average accounts payable Annual cost of goods sold/365
= 10262849/2 231802183/365
= 5131424 635074 = 8.08
BABASAB PATIL 58
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Operating cycle = inventory period + accounts receivable period = 70.83 + 2.04
= 72.87
Cash cycle = operating cycle – accounts payable period = 72.87 – 8.08 = 64.79
Years Inventory period
Account receivable period
Account payable period
Operating cycle
Cash cycle
2005-06 82.50 0.99 2.24 83.49 81.252006-07 82.31 0.81 3.60 83.12 79.522007-08 79.78 1.56 5.43 81.34 75.912008-09 70.83 2.04 8.08 72.87 64.79
BABASAB PATIL 59
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
operating cycle
6668707274767880828486
2005-06 2006-07 2007-08 2008-09
years
day
s
Series1
INTERPRETATION :
Here the firm’s operating cycle has continuously decreased from 83 days during 2005-06 to 73 days during 2008-09. The operating cycle of the firm is satisfactory because it has come down by 10 days. The firm’s cash cycle is also satisfactory as it has decreased from 82 days to 65 days during 2005-06 to 2008-09. However it is also observed that the debtor’s collection period has increased from 0.99 days to 2.08 days during the same time period.
BABASAB PATIL 60
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
RATIO ANALYSIS
INTRODUCTION
The ratio analysis is one of the most important and powerful tools of financial
analysis. It is the process of establishing and interpreting various ratios. It is with
BABASAB PATIL 61
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
the help of ratios that the ratios that the financial statement can be analyzed more
clearly and decisions made from such analysis.
CONCEPT OF RATIO
A ratio is a simple arithmetical expression of the relationship of one number to
another. It may be defined as the indicated quotient of two mathematical
expressions. According to Accountant’s handbook by Wixonkell and Bedford, a
ratio “is an expression of the quantitative relationship between two numbers”.
RATIO ANALYSIS
Ratio analysis is the technique of calculation of number of accounting ratios from
the data found in the financial statements, the comparison of the accounting ratios
with those of the previous years or with those of other concerns engaged in similar
line of activities or with those of standard ratios and the interpretation of the
comparison.
CURRENT RATIO The current ratio of a unit measures firm’s short-term solvency, that is, its
ability to meet short-term obligations. It is the ratio of total current assets to total
current liabilities.
BABASAB PATIL 62
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
The current ratio 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.
It is calculated by dividing total current assets by total current liabilities:
CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITES
Sl.no Years Current assets
Current liability
Current ratio
1 2004-05 125047200 43395322 2.88
2 2005-06 127624611 53091956 2.40
3 2006-07 147445816 62830162 2.34
4 2007-08 147054890 55448122 2.65
5 2008-09 135628920 58458550 2.32
current ratio
0
0.5
1
1.5
2
2.5
3
3.5
2004-05
2005-06
2006-07
2007-08
2008-09
years
rati
o
Series1
INTERPRETATION: The standard for current ratio is 2:1 but the firm’s current ratios are more than the standard the highest ratio is 2.88 in the year 2004-05 and the lowest ratio is 2.31 in the year 2008-09. And also it found that there is an excess amount in current assets its
BABASAB PATIL 63
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
shows that the firm is not utilizing the funds from current assets properly the firm need to concentrate on its excess amount.
QUICK RATIO
This ratio is also termed as Acid-test ratio. A Quick ratio is concerned
with, the relationship between quick assets and current liabilities.
It is a measure of liquidity calculated dividing current assets minus inventory and
prepaid expenses by current liabilities.
The Quick Ratio is the ratio between quick current assets and current liabilities.
It is calculated by dividing the Quick Current Assets by the Current Liabilities.
QUICK RATIO = QUICK ASSETS/QUICK LIABILITES
Quick asset = current assets –inventory, prepaid expensesQuick liability = current liability – bank overdraft
BABASAB PATIL 64
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Sl.no Years Quick assets Quick liability
Quick ratio
1 2004-05 72098810 30847985 2.33
2 2005-06 74581448 53091956 1.40
3 2006-07 85089360 62830162 1.35
4 2007-08 88983135 55448122 1.60
5 2008-09 89339797 58458550 1.52
quick ratio
0
0.5
1
1.5
2
2.5
2004-05
2005-06
2006-07
2007-08
2008-09
years
rati
o
Series1
INTERPRETATION: The standard ratio for quick ratio is 1:1 but the firms quick ratio are more than the standard the highest quick ratio is 2.33 and lowest quick ratio is 1.35 so it found that there is quick ratio is more than the standard by having more the ratio it shows that th. So the has to concentrate for collection of funds.
BABASAB PATIL 65
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
INVENTORY TURNOVER RATIO
Inventory turnover ratio is the ratio, which indicates the number of times
the stock is turned over i.e., sold during the year. In other words, it is the ratio
between the cost of goods sold and closing stock. This ratio can be calculated as
follows.
INVENTORY TURNOVER = COST OF GOODS SOLD AVERAGE INVENTORY
Sl.no years Cost of goods sold
Average Inventory
Ratio
1 2004-05 256843587 46438421 5..53
2 2005-06 206149519 46596794 4.42
3 2006-07 215192439 51082152 4.21
4 2007-08 244014252 53337454 4.57
5 2008-09 231802183 44985614 5.15
BABASAB PATIL 66
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
INTERPRETATION:
The inventory turnover ratio shows how the inventory is turning into receivables through sales. Here in the firm highest inventory turnover is 5.53 in 2004-05. it indicates that there was a good inventory management in 2004-05 whereas in the year 2006-07 there is low inventory turnover which implies that in 2006-07 there was excessive inventory levels than warranted by production and sales activity. In the year 2008-09, the inventory turnover is 5.15.
GROSS PROFIT RATIO.
The gross profit ratio reflects the efficiency with which management produces each unit of product. This ratio indictes the average spread between the cost of goods sold and the sales revenue
GROSS PROFIT RATIO = GROSS PROFIT /SALES
Sl.no years GROSS PROFIT
SALES RATIO
1 2004-05 2536378 269932512 0.93
2 2005-06 15767888 231390442 6.81
3 2006-07 27291869 254655866 10.71
BABASAB PATIL 67
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
4 2007-08 10816537 274253348 3.94
5 2008-09 4049865 256739185 1.57
RATIO
0
2
4
6
8
10
12
2004-05
2005-06
2006-07
2007-08
2008-09
YEARS
RA
TIO
S
RATIO
INTERPRETATION: . The gross profit ratio is not satisfactory because this ratio is not stable it is fluctuating widely by year by year from the year 2004-05 to 2008-09. the highest ratio is 10.71 and the lowest ratio is 0.93 here the firm has higher the sales in 2006-07 so the ratio is high and due to lower the sales or higher the cost of good so in the year 2004-05 it is low.
BABASAB PATIL 68
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
WORKING CAPITAL TURNOVER RATIO
The ratio, which expresses the relationship between the working capital and
sales, is called as Working capital turnover ratio. It is calculated as follows
NET CURRENT ASSETS TURNOVER = SALES/ NET CURRENT ASSETS
Sl.no Years Sales Net current assets
Net current asset ratio
1 2004-05 269932512 81651878 3.30
2 2005-06 231390442 74532655 3.10
3 2006-07 254655866 84615654 3.00
4 2007-08 274253348 91606768 2.99
5 2008-09 256739185 77170370 3.32
BABASAB PATIL 69
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
Net current asset ratio
2.8
2.9
3
3.1
3.2
3.3
3.4
2004-05
2005-06
2006-07
2007-08
2008-09
years
rati
o Net current assetratio
INTERPRETATION:
A working capital turnover ratio indicates that of high working capital turnover and low net working capital here in the firm there is an continuous decrease for 4 years but in last year it has been increased in working capital turnover ratio. The firm is satisfactory with its last year turnover ratio. The firm has to maintain in increasing the working capital turnover ratio.
BABASAB PATIL 70
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
FINDINGS AND SUGGESTION
1. The current ratio of the firm is not satisfactory because the firm is not utilizing available recourses properly. The highest ratio is 2.88 recorded in the year 2004-05 and the lowest ratio is 2.31 recorded in the year 2008-09. So the current ratio is not satisfactory. The firm needs to concentrate on current assets. By utilizing the available resources properly the firm may improve the current ratio.
2. The quick ratio of firm is not satisfactory because in the firm’s quick assets there excess amount than requirement it shows that the company is not utilizing available resources properly. The highest quick ratio is 2.33 recorded in the year 2004-05 and the lowest ratio 1.35 recorded in the year 2006-07. The company needs to concentrate on quick assets. By utilizing quick assets properly the firm may improve this ratio.
3. the inventory turnover ratio is satisfactory because from the year 2004-05 it is go on decreasing but in the year 2008-09 it increased to 5.15 from 4.57 in the year 2007-08 so this ratio is satisfactory. The highest ratio 5.53 recorded in the year 2004-05 and lowest is 4.21 recorded in the year 2006-07.
4. .The gross profit ratio is not satisfactory because this ratio is not stable it is fluctuating widely by year by year from the year 2004-05 to 2008-09. the highest ratio is 10.71 and the lowest ratio is 0.93 here the firm has higher the sales in 2006-07 so the ratio is high and due to lower the sales or higher the cost of good so in the year 2004-05 it is low.
5. A working capital turnover ratio indicates that of high working capital turnover and low net working capital here in the firm there is an continuous decrease for 4 years but in last year it has been increased in working capital turnover ratio. The firm is satisfactory with its last year turnover ratio. The firm has to maintain in increasing the working capital turnover ratio.
6. Here the firm’s operating cycle has continuously decreased The
BABASAB PATIL 71
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
operating cycle of the firm is satisfactory because it has come down by 10 days. The firm’s cash cycle is also satisfactory as it has decreased from 82 days to 65 days during 2005-06 to 2008-09. However it is also observed that the debtor’s collection period has increased from 0.99 days to 2.08 days during the same time period
7. The changes in working capital of 2004-05 and 2005-06 is 81651878 and 74532655 respectively it shows working capital decreased to 7119223 in 2005-06 which compare to 2004-05 here the decreasing the net working capital firm may not satisfactory with its working capital.
8. the changes in working capital of 2005-06 and 2006-07 is 74532655 and 84615654 respectively it shows the working capital increased of 10082999 in the year 2006-07 compare to 2005-06. By increasing net working capital the firm may satisfactory with its working capital.
9. the changes in working capital of 2006-07 and 2007-08 is 84615654 and 91606768 respectively it shows the working capital increased of 6991114 in the year 2007-08 compare to 2006-07. By increasing in net working capital the firm may satisfactory with its working capital.
10. the changes in working capital of 2007-08 and 2008-09 is 91606768 and 77170370 respectively it shows the working capital decreased of 14436398 in the year 2008-09 compare to 2007-08. By decreasing net working capital the firm is satisfactory with its working capital.
BABASAB PATIL 72
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
SUGGESTIONS
1. To improve the current ratio and quick ratio the company need to concentrate on current assets by utilysing available resources in the current assets the company may improve its current ratio and quick ratio
2. The gross profit ratio is not satisfactory because there is more fluctuating in the ratios so company need to concentrate in its profits
3. during the year 2005 and 2006 the companies working capital is decreased due to less current assets and more liability so it has to make proper use of its current assets and to make improve.
4. during the year 2008 and 2009 the companies working capital again decreased so the firm has to has to concentrate on its current assets to maintain the business transaction .
BABASAB PATIL 73
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
CONCLUTION:
This study helps to know that the companies financial position. The
sale of the company is decline in the year 2009. There is an increases cost in
some years so it is needs to reduce its costs.
As the study helps to know that the changes in financial statements
i.e. increase or decrease in the liabilities and assets. By the ratio analysis we
come to know that the companies solvency. The company have to take some
measures to control the costs. By working capital we comes to know its
working capital management
This study helps us to know that the companies financial position is
not appreciable because there is loss in the present year due to high expenses.
so it has to control the costs.
By the analysis of financial statements I conclude that, overall
financial performance of the company is not satisfactory. The company can try
to take a some measures to increase profit i.e. proper utilization of available
resources.
BIBLIOGRAPHY
BABASAB PATIL 74
THE GADAG CO-OPERATIVE TEXTILE MILL LTD, GADAG.
BOOKS : FINANCIAL MANAGEMENT : KHAN AND JAIN FINANCIAL MANAGEMENT : I.M.PANDEY
BABASAB PATIL 75
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