bemco hydraulics project at belgaum
TRANSCRIPT
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CHAPTER – I
EXECUTIVE SUMMARY
This project on “A STUDY OF WORKING CAPITAL MANAGMNT AT !MCO
"YDRAULICS LTD# !LGAUM$ %e&'s to &scert&in the e((icienc) o( *or+in, c&pit&'
-&n&,e-ent o( the co-p&n).
In this project -) &i- is to +no* the princip'e &%opte% /) the co-p&n) to h&n%'e its
*or+in, c&pit&' 0 the &i- is to st1%) *or+in, c&pit&' -&n&,e-ent o( !e-co.
Wor+in, c&pit&' -&) /e re,&r%e% &s 'i(e/'oo% o( /1siness.Wor+in, c&pit&' is nee%e% to -eet
%&)2to2%&) re31ire-ent o( the /1siness 1nit.The e4p'oit&tion o( *or+in, c&pit&' &ssets is possi/'e
on') /) e((icient *or+in, c&pit&' -&n&,e-ent.This st1%) on *or+in, c&pit&' -&n&,e-ent is
con%1cte% in !e-co ")%r&1'ics Lt%.
This st1%) (oc1se% on the cost o( *or+in, c&pit&' o( the or,&ni5&tion &n% &'so to*&r%s so-e
r&tios re'&tin, to the *or+in, c&pit&' o( the co-p&n).
T)pe o( %&t& co''ection in6o'6e% pri-&r) %&t& &n% secon%&r) %&t& (or this st1%).The -ost o(
the re31ire% in(or-&tion *&s co''ecte% thro1,h secon%&r) so1rces.
Secon%&r) %&t& *ere co''ecte% (ro- 6&rio1s so1rces inc'1%in, the &nn1&' reports o( the
co-p&n) (or the )e&r 78892:8# 78:82::# 78::2:7 &n% 78:72:;.
R&tio &n&')sis is the -&jor too' (or &n&')5in, the *or+in, c&pit&' -&n&,e-ent o( !e-co &n%
&'so the in(or-&tion (or < )e&rs is co''ecte%.
R&tio &n&')sis h&s /een c&rrie% o1t 1sin, Fin&nci&' In(or-&tion (or '&st (i6e &cco1ntin, )e&rs
i.e. (ro- 7889 to 78:; R&tio h&6e /een &n&')5e%.
I hope th&t the st1%) h&s (1'(i''e% &'' its o/jecti6es &n% *i'' / 1se(1' (or those *ho &re 1sin,
this project report in the (1t1re.
PROJECT TITLE
A St1%) on “Wor+in, C&pit&' M&n&,e-ent$ &t !e-co ")%r&1'ics Li-ite%# !e',&1-.
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NEED
FOR THE STUDY
The project *or+ is -&%e co-p1'sor) /) K&rn&t&+& Uni6ersit) Dh&r*&% (or the !!A
st1%ents (or the (1'(i''-ent o( the re31ire-ent o( !!A %e,ree &s p&rt o( o1r c1rric1'1-.
!e-co ")%r&1'ics Lt%.# !e',&1- &'so in(or-e% -e to %o project on Wor+in, C&pit&'.
An% &'so to ,et the pr&ctic&' +no*'e%,e &/o1t the in%1str) on Wor+in, C&pit&' -&n&,e-ent
c&rrie% in the or,&ni5&tion.
OBJECTIVES OF THE STUDY
This study is being conducted with the following objectives
:. To +no* the so1rces (or (in&ncin, *or+in, c&pit&'
7. To +no* the *or+in, c&pit&' re31ire-ent o( the co-p&n);. To +no* the princip'e &%opte% /) the co-p&n) to -&n&,e the *or+in, c&pit&'
=. To +no* *hether the *or+in, c&pit&' -&n&,e-ent position is so1n% in the co-p&n)
SCOPE OF THE STUDY
Wor+in, c&pit&' -&n&,e-ent /ein, & 6er) i-port&nt concept in &'' the co-p&nies h&6in,
& 6oi% co6er&,e o(ten c&''s (or the -&n&,eri&' &ttention. In the -o%ern ti-es *or+in, c&pit&'
-&n&,e-ent h&s /eco-e the inte,r&' p&rt o( the &'' co-p&nies. So &'' the (ir-s ,i6e speci&'
i-port&nce (or *or+in, c&pit&' -&n&,e-ent. The -&jor o/jecti6e o( the st1%) is to e4&-ine the
e((ecti6eness o( *or+in, c&pit&' -&n&,e-ent s)ste- &%opte% /) &n in%1str)> the st1%) -&in')
(oc1ses on the techni31es 1se% /) the co-p&n) to contro' the *or+in, c&pit&'.
METHODOLOGY
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The -etho%o'o,) &%opte% is &s (o''o*s
SOURCES OF DATA
1. PRIMARY DATA:
Co''ection o( in(or-&tion or %&t& is %one thro1,h inter6ie* -etho% *ith senior Acco1nt&nt#
Mr. Rajs!"ar La""as!##$
%. SECONDARY DATA:
Most o( the in(or-&tion is co''ecte% (ro- secon%&r) %&t&. It is the %&t& th&t &'re&%) e4ist. The
so1rces o( secon%&r) %&t& &re?
• !&'&nce Sheet o( the co-p&n)
• P 0 L &cco1nt o( the co-p&n)
• Te4t /oo+s
• Co-p&n) *e/site
FINDINGS
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:. Co-p&n) h&s &%opte% the &,,ressi6e princip'e to -&int&in the *or+in, c&pit&'.
7. The -&in &n% on') so1rce (or (in&ncin, *or+in, c&pit&' is !&n+ Lo&n.
;. !&n+ o( M&h&r&shtr& &n% S!I &re the /&n+s *hich pro6i%es 'o&n to the co-p&n).
=. Tho1,h c1rrent r&tio is not 1pto the -&r+# /1t in (i6e )e&rs it ne6er *ent 'ess th&n :.:@
*hich c&n /e consi%ere% &s ,oo%.
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:. It is ,oo% (or the co-p&n) to -o6e *ith &,,ressi6e princip'e on')# /ec&1se it is s1it&/'e
&n% /ene(ite% to the co-p&n).
7. In &%%ition to !&n+ 'o&n I *o1'% 'i+e to s1,,est the (o''o*in, intern&' so1rces o(
(in&nce (or the *or+in, c&pit&'# /ec&1se it *i'' res1't in re%1ction o( cost o( *or+in, c&pit&' th&t
is %&'1&'(&)*(.%+ (or p&st (i6e )e&rs.
• C&sh in h&n%
• De/tors
;. Co-p&n) pre(ers !&n+ o( M&h&r&shtr& &n% S!I (or 'o&n# the) c&n ,o (or other /&n+s
&'so *hich *i'' pro6i%e 'o&n &t 'ess interest.
=. I *o1'% &'so 'i+e to s1,,est co-p&n) to i-pro6e its *or+in, c&pit&' position /)
re%1cin, its c1rrent 'i&/i'ities 'i+e p&)in, the cre%itors &s e&r') &s possi/'e.
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INDUSTRY PROFILE
The In%i&n ")%r&1'ic In%1str) *&s st&rte% in e&r') 8Bs pri-&ri') *ith &n o/jecti6e
o( i-port s1/stit1tion o( so-e o( the h)%r&1'ic pro%1cts /ein, 1se% in 6&rio1s &pp'ic&tions.Since -ost o( the In%i&n in%1stries h&6e /een set 1p /&se% 1pon the 6&riet) o( techno'o,ic&'
so1rces# the r&n,e o( their speci(ic&tions is 6er) *i%e.D1e to this r&n,e o( pro%1cts in the oi'
h)%r&1'ic is &'so 31ite *i%e res1'tin, in 6er) s-&'' /&tch (or e&ch pro%1ct.
It is there(ore# %i((ic1't to speci() & -ini-1- econo-ic&'') 6i&/'e c&p&cit) (or the
in%1str). Whi'e there h&s /een & contin1e% o6er&'' ,ro*th in the oi' h)%r&1'ic pro%1cts /1siness
%1e to '&r,e 6&riet) o( speci&'i5e% pro%1cts to -eet speci(ic in%i6i%1&' &pp'ic&tions# 6o'1-e
,ro*th in in%i6i%1&' pro%1cts h&s /een 6er) 'o*. With 'o* 6o'1-es &n% hi,h %e6e'op-ent costsconcernin, too'in,# c&stin, &n% (or,in,# the in%1str) h&s not /een &/'e to &%opt -o%ern
pro%1ction -etho%s. C1rrent pro%1ction techno'o,ies in 1se &re '&r,e') %ict&te% /) pro%1ction o(
'&r,e 6o'1-es# 31&'it) re31ire-ents &n% costs.
Since the In%i&n in%1stries h&6e to -&n1(&ct1re & '&r,e 6&riet) o( pro%1cts *ith
'o* 6o'1-es# the in%1str) is not &/'e to 1se the -o%ern hi,h pro%1ction 'ines. Most o( the
-&n1(&ct1rers# *ith e4ception to so-e*ho h&6e inst&''e% %e%ic&te% SPMBs &n% CNC-&chines
*ith speci&' too'in,Bs &n% so-e speci&' p1rpose -&chines (or speci&'i5e% -et&' c1ttin,
oper&tions.
A'tho1,h the in%1str) h&s sho*n & re&son&/'e ,ro*th o6er the )e&rs# /1t it is (&r
&*&) (ro- the 6o'1-es *hich *o1'% 'e&% to &%optin, -o%ern pro%1ction -etho%s.A'so the
'i-ite% %e-&n% is /ein, sh&re% /) o6er 78 (ir-s res1'tin, in 1necono-ic&' 6o'1-es (or -ost o(
the-. It is 1n'i+e') th&t the sit1&tion *o1'% ch&n,e %r&stic&'') in the co-in, %ec&%e %1e to
6&rio1s (&ctors -entione% &/o6e.
A'-ost &'' the -&jor -&n1(&ct1rers o( h)%r&1'ic e31ip-ents h&6e co''&/or&tion
*ith (orei,n co-p&nies. On') t*o co-p&nies 6i5. Po')h)%rons &re Osc&r 31ip-ents &re
-&n1(&ct1rin, pro%1cts /&se% on in%i,eno1s %e6e'op-ent.There h&s /een 6er) 'itt'e &tte-pt &t
%e6e'opin, in%i,eno1s techno'o,) (or these pro%1cts# &'tho1,h /&rrin, (e* ite-s# &'' other
e31ip-ents h&6e /een in%i,eni5e%.
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CHAPTER – III
COMPANY PROFILE
N&-e o( the co-p&n) ?!e-co ")%r&1'ics Li-ite% !e',&1-
Re,istere% O((ice ?U%)&-/&,#Kh&n&p1r Ro&%#!',&1-2
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BAC,GROUND AND INCEPTION OF THE COMPANY
First ")%r&1'ic Press 6er De6e'ope% in :9
!e-co is the (irst co-p&n) in In%i& to pro%1ce h)%r&1'ic presses.
!e-co ori,in&'') *&s &n en,ineerin, cr&(ts-&nBs shop in the '&te ;8Bs h&s risen to /e
pri-er pro%1cer o( ")%r&1'ic presses &n% e31ip-ents. !e-co ")%r&1'ics co-p&n)
st&rte% -&n1(&ct1rin, presses initi&'') in co''&/or&tion *ith JOGAL 0 COM
GRMANY #in the )e&r :9
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An% so h&ppene% *ith !e-co#%1rin, :9@8Bs the co-p&n) /ec&-e *e&+ in (in&nce
&n% Mr.M Moht& *ho p1rch&se% the -&4i-1- sh&res o( !e-co /ec&-e the
ch&ir-&n o( the co-p&n).
D1rin, :9@< the stren,th o( the co-p&n) &'-ost re&che% to =
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Mo1n%in,# Str&i,htenin, &n% /en%in, presses.
Scr&p /&''in, presses.
Deep %r&*in,# tri--in,# (or,in,# cr&n+sh&(t t*istin, &n% coinin, presses.
R&i'*&) *hee' (ittin,# sprin, /1c+in,# &4'e (ittin,# %i((erent spottin, &n% 31enchin,
presses. St&/i'i5er /&r correction presses.
!ro&chin, (or hori5ont&' &n% 6ertic&' -&chines.
A'' t)pes o( speci&' p1rpose oi' h)%r&1'ic -&chines.
")%r&1'ic po*er p&c+s.
")%r&1'ic c)'in%ers.
")%r&1'ic p1-ps &n% 6&'6es.
")%r&1'ic -otors.
D1rin, the )e&r 788=28< the co-p&n) -&%e re2r&i'in, e31ip-ent (irst ti-e in In%i&
&n% s1pp'ie% to In%i&n R&i'*&)s.
VISION&MISSION AND -UALITY POLICY
VISION
The 6ision o( !e-co is to /e hi,h') 6isi/'e co-p&n) +no*n (or its hi,hest techno'o,)
%ri6en pro%1cts# s1perior tri--in, &n% s1rp&sse% ser6ice in the en,ineerin, (ie'%# o1t pro%1cts
*i'' /e -&r+e% *or'%*i%e &n% *i'' /e 'oo+e% &t &s 'e&%er in c1sto-er -&%e -&chines# !e-co
*i'' -&r+et the *or'% c'&ss presti,io1s pro%1cts thro1,h /est %istri/1tion net*or+.
MISSION STATEMENT
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O1r -ission is to pro6i%e inno6&ti6e# pr&ctic&' &n% *or'% c'&ss 31&'it) pro%1ct th&t
i-pro6es the *or+-&n to per(or- their jo/. We /e'ie6e th&t o1r (irst responsi/i'it) to o1r
c1sto-er *ho 1se o1r pro%1cts.
-UALITY POLICY
“We &re & ,ro*th oriente% or,&ni5&tion in ter-s o( techno'o,)# 31&'it) &n% 31&ntit)
*hose 1n%er')in, princip'e is ti-e') %e'i6er) o( 'on, ter-# cost e((ecti6e pro%1cts &n% ser6ices
to o1r c1sto-ers.$
OBJECTIVES
To o((er ('&*'ess ser6ices to c1sto-ers.
To o((er s1pport in?
:.Se'ection o( -&chiner)
7.Desi,n &n% %e6e'op-ent
;.Inst&''&tion &n% co--ission
=.S1pp') o( co-ponents &n% se&rs
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The %esi,ns &re c&rrie% o1t 1sin, e4c'1si6e speci&'ist -&ni(o'% so(t*&re pro,r&-s 1se%#
const&nt') 1p%&te% &n% enh&nce% o6er the '&st < )e&rs. These pro,r&-s r1n on ;D so'i% -o%e'in,
CAD so(t*&re.
STRAIGHTENING PRESSES
These &re h&n% oper&te% open thro&t presses *ith /&r str&i,htenin, &tt&ch-ent (or
str&i,htenin, c&- sh&(ts# &4'e sh&(ts &n% cr&n+ sh&(ts
Presses (ro- ; KN to 7888 KN c&p&cit) &n% str&i,htenin, &tt&ch-ent (or /&r 'en,th :88
-- to
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TJS Motors Lt%.
"ero "on%& Motors Lt%.
!&j&j A1to Lt%.
"on%& Motors P6t Lt%.
HEAVY ENGINEERING ELECTRICALS
!h&r&t "e&6) 'ectric&' Lt%
"in%1st&n Aeron&1tics Lt%
L 0 T Lt%
!h&r&t For,e Lt%
INDIAN RAIL/AYS
A'' on&' Wor+s Shop
ART
"RD
SPACE
In%i&n sp&ce rese&rch or,&ni5&tion Tri6&n%r&-
R 0 D n,, Or,&ni5&tion P1ne
Ji+r&- S&r&/h&i Sp&ce Rese&rch center.
/$# $#s r!0$s#!r! 233$4!5H!a 233$4! a#
U%)&-/&, !e',&1-2
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Ne* De'hi
98@#P&%-& To*ers I#
R&jen%r& p&'&ce#
Ne* De'hi2::888E.
ne*%e'hi/e-coh)%r&1'ics.net
Ko'+&t&
D&+shini P&r& Ro&%#
P.O.Th&r1rp1+r#
Ko'+&t&2@888;.
Ko'+&t&/e-coh)%r&1'ics.net
Chenn&i
F'&t ;#.P.To*er#
N1n,&-/&++&- "i,h Ro&%#Chenn&i2888;=.
Chenn&i/e-coh)%r&1'ics.net
BEMCO PRODUCTS ARE EXPORTED TO
thiopi&
Ir&3
Isr&e'
M&'&)si&
Nep&'
A.S.S College Of Business Administration,Gadag Page 1
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]
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O-&n
Phi'ippines
R1ssi&
S&1%i Ar&/i&
Sri'&n+&
Sin,&pore
&-/i&
Fro- the (o''o*in, in(or-&tion i-p&rte% re,&r%in, the Are& o( Oper&tion it is c'e&r th&t
!e-co ")%r&1'ics Lt% s1pp') its pro%1cts to 6&rio1s re,ion&' in%1stries *ith three /r&nches in
the pro-inent p'&ces in In%i& &n% &'so e4port to -&n) co1ntries in the ,'o/ th&t is the s1pp') o(
pro%1cts to the Intern&tion&' c1sto-ers. "ence (ro- this st1%) *e s&) th&t !e-coBs &re& o(
oper&tion is re,ion&' &s *e'' &s ,'o/e in n&t1re.
!e-co Pri6&te Lt% h&s s1ccess(1'') c&rrie% o1t its /1siness *ith the i--ense s1pport o( their
(in&ncers &n% /&n+ers.Those &re?
:. !&n+ o( M&h&r&shtr M&in !r&nch# Kir'os+&r# !e',&1-.
7. St&te !&n+ o( In%i Co--erci&' !r&nch# !e',&1-.
O/NERSHIP PATTERN
The co-p&n) *&s incorpor&te% in the st&te o( K&rn&t&+& on := th M&rch :9
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present pro-oters# the Moht& ,ro1p. Mr. M. M. Moht& is the present Ch&ir-&n &n% M&n&,in,
Director o( the co-p&n).
The n&-e o( the co-p&n) *&s (1rther ch&n,e% to “!MCO "YDRAULICS
LIMITD$#on th Dece-/er :[email protected] the )e&r :9E# the co-p&n) -&%e its initi&' p1/'ic o((er &n%
its e31it) sh&res *ere 'iste% on the Stoc+ 4ch&n,e.
In the )e&r :99: he too+ the ch&r,e o( the co-p&n) &s the Ch&ir-&n &n% M&n&,in,
Director.
In the )e&r :997 Mrs. Ur-i'& De6i Moht& *&s &ppointe% &s & Non 4ec1ti6e Director.
In the )e&r :99= Mr.Anir1%h Mohtthe son o( M. M. Moht& *&s &ppointe% &s the oint
M&n&,in, Director o( the co-p&n).
In the )e&r :99E Shri R. M. Sh&h &n% Shri N. K. D&,& *ere &ppointe% &s in%epen%ent
Directors o( the co-p&n).
In the recent )e&r 788= Shri. Di'ip Ch&n%&+ h&s &'so /een &ppointe% &s &n in%epen%ent
Director o( the co-p&n).
COMPETITORS INFORMATION
The co-p&n) h&s co-petition (ro- the 1nor,&ni5e% sector consistin, o( & n1-/er o(
s-&'' p'&)ers *ho s1pp') to the &1to-o/i'e in%1stries. O6er the )e&rs o( e4istence# the co-p&n)
h&s /een &/'e to %e6e'op & s&tis(ie% c1sto-er /&se /oth in In%i& &n% A/ro&% &n% in the co-in,
)e&r -o6in, to*&r%s st&n%&r%i5&tion o( its pro%1cts.
So-e o( the -&jor co-petitors o( !e-co ")%r&1'ics Pri6&te Li-ite% in !e',&1- &re?
Si%%h&rth& In%1stries
")%ro p&c+ pri6&te 't%
S.P.M Contro'
P'1s one ")%r&1'ics
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So-e -&jor co-petitors o( !MCO ")%r&1'ics Lt% in In%i& &re?
Is5&c#P1ne
"MT
'ectro Pne1-&tic
INFRASTRUCTURAL FACILITIES
P28!r
The pe&+ ho1r re31ire-ent o( po*er to the co-p&n) is 7
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The -&in r&* -&teri&'s (or the co-p&n) is stee'# *hich is proc1re% /) the co-p&n) (ro- the
'&r,e s1pp'iers 'i+e SAIL &n% &'so (ro- 'oc&' 6en%ors. The -&in 6&rieties o( stee' cons1-e% /)
the p'&nt P'&tes# !&rs# Ro1n%s# Pipes etc.
The co-p&n) &'so re31ires h)%r&1'ics p1-ps# e'ectric -otors# PLC 0 *e'%in, *ires# *hich
&re /ein, proc1re% (ro- Sie-ens# !osch 0 other 6en%ors.
The cons1-&/'es s1ch &s oi'# e'ectric&' p&rts &n% other store ite-s &re &6&i'&/'e in
&/1n%&nce 'oc&'').
Ca6#!!6
The c&nteen (&ci'ities &re pro6i%e% (or the e-p'o)ees. Thro1,h c&nteen# sn&c+s &n% te& is
ser6e% to the e-p'o)ees &t the *or+shop &n% to the st&((. It *i'' /e s1pp'ie% to the *or+shop
*or+ers &t E.;8 &- &n% other st&(( &(ter 9.:< &-.
A(ternoon te& *i'' /e s1pp'ie% &t 7 p- to the *or+ers &n% to the st&(( &t 7.;8 p-. The
co-p&n) is ,i6in, sn&c+s &n% te& &'-ost &t (ree o( cost per he&% &t 8.=8 p&is&.The c&nteen r1ns
1n%er the s1/si%ies r&tes.
ACHIEVEMENTS
:.!e-co h&s &chie6e% e4tensi6e s1ccess &s & re-&r+ o( *hich it ce'e/r&te% the
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%eep (or*&r% 'in+&,es *ith se6er&' +e) se,-ents o( the econo-)# &1to-oti6e in%1str) h&s &
stron, -1'tip'ier e((ect &n% is c&p&/'e o( /ein, the %ri6er o( econo-ic ,ro*th. The &1to-oti6e
sector is one o( the core in%1stries o( the In%i&n econo-)# *hose prospect is re('ecti6e o( the
econo-ic resi'ience o( the co1ntr). With = contri/1tion to the GDP &n% ne&r')
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:. !&n+ o( M&h&r&shtr M&in !r&nch &t Kir'os+&r Ro&%# !e',&1- &n% S!I# Co--erci&' !r&nch#
!e',&1- &re the on') /&n+s *hich &re pro6in, 'o&n to the co-p&n).
7.Co-p&n) pre(ers !&n+ o( M&h&r&shtr& &n% S!I /ec&1se the) ,i6e 'o&n &t 'ess interest.
;.Re'&tionship /et*een the co-p&n) &n% /oth the /&n+s is ,oo% since /oth the /&n+s &re
pro6i%in, 'o&ns to the co-p&n) (ro- -&n) )e&rs.
S/OT A6a7=s$s 23 #! 429a6=
S#r!60#
:.L&r,e n1-/er o( or%ers.
7."i,h 31&'it).
;.One o( the top (i6e jo//in, (o1n%ries in In%i&.
=.((icient -&npo*er.
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@.J&rio1s &*&r%s &n% &chie6e-ents.
/!a"6!ss
:."i,h tr&nsport&tion cost.
7."i,h rejection.
;."i,h &/senteeis- o( *or+ers.
O992r#;6$#$!s
:.Incre&se in %e-&n% or%er.
7.Per-&nent &n% ne* c1sto-ers.
;.Incre&se in pro%1ction c&p&cit).
=.A%6&nce-ent in techno'o,).
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7. In !e-co I ,ot the opport1nit) to -eet the C.As *hi'e the) &re &1%itin, the (in&nci&'
st&te-ents o( the co-p&n)# the) *ere spe&+in, to e&ch other th&t &t 'e&st the) nee% three
secon%s to chec+ one p&,e# th&t ti-e I c&-e to +no* *e h&6e to %e6e'op %oin, thin,s
6er) 31ic+').
;. This project he'pe% -e in +no*in, the i-port&nce o( ,ro1p e((orts *hen co-p&re% to the
in%i6i%1&' e((orts.
=. I &'so c&-e to +no* ho* *or+ &n% thin,s &re ,ettin, %one thro1,h others &n% *ith
others.
. T=9!s 23 /2r"$60 Ca9$#a7
'. D!#!r$6a6#s 23 /2r"$60 Ca9$#a7
*. I92r#a64! 23 /2r"$60 Ca9$#a7
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CHAPTER –IV
THEORETICAL FRAME/OR,
INTRODUCTION
/2r"$60 Ca9$#a7 Ma6a0!!6#
Wor+in, c&pit&' -&n&,e-ent is concerne% *ith the pro/'e-s *hich &rise in &tte-ptin,
to -&n&,e the c1rrent &ssets#the c1rrent 'i&/i'ities &n% the interre'&tionship th&t e4ist /et*een
the-.The ter- c1rrent &ssets re(ers to those &ssets *hich in or%in&r) co1rse o( /1siness c&n /e or
*i'' /e t1rne% into c&sh *ithin one )e&r *itho1t 1n%er,oin, & %i-in1tion in 6&'1e &n% *itho1t
%isr1ptin, the oper&tion o( th (ir-.The -&jor c1rrent &ssets &re c&sh#-&r+et&/'e
sec1rities#&cco1nt recei6&'e &n% in6entor).C1rrent 'i&/i'ities *ere those 'i&/i'ities *hich inten% &t
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their inception to /e p&i% in or%in&r) co1rse o( /1siness#*ithin & )e&r#o1t o( the c1rrent &ssets or
e&rnin,s o( the concern.The /&sic c1rrent 'i&/i'ities &re &cco1nt p&)&/'e#/i'' p&)&/'e#/&n+ o6er2
%r&(t &n% o1tst&n%in, e4penses.
The ,o&' o( *or+in, c&pit&' -&n&,e-*nt is to -&n&,e the (ir-Bs c1rrent &ssets &n%
c1rrent 'i&/i'ities in s1ch & *&) th&t the s&tis(&ctor 'e6e' o( *or+in, c&pit&' is -entione%.The
c1rrent &ssets sho1'% /e '&r,e eneo,h to co6er its c1rrent 'i&/i'ities in or%er to ens1re &
re&son&/'e -&r,in o( s&(et).
DEFINITION
Accor%in, to G;##a66 D2;0a77?
@E4!ss 23 C;rr!6# Ass!#s 2!r C;rr!6# L$a
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(inishe% ,oo%s con6ert into s&'es on cre%it /&sis in the (or- o( s1n%r) %e/tors.S1n%r) %e/tors &re
con6ertin, into c&sh &(ter e4pir) o( cre%it perio%.Th1s so-e &-o1nto( c&sh is /'oc+e% into r&*
-&teri&'s#WIP#(inishe% ,oo%s#s1n%r) %e/tors &n% %&) to %&) c&sh re31ire-ents."o*e6er so-e
p&rt o( c1rrent &ssets -&) /e (in&nce% /) c1rrent 'i&/i'ities &'so.The &-o1nt re31ire% to /e
in6este% in this c1rrent &ssets is &'*&)s hi,her th&n the (1n%s &6&i'&/'e (ro- c1rrent
'i&/i'ities.This is the precise re&son *h) the nee%s o( *or+in, c&pit&' &rise.
GROSS /OR,ING CAPITAL AND NET /OR,ING CAPITAL
There &re t*o concepts o( *or+in, c&pit&' -&n&,e-ent.
:. Gross Wor+in, C&pit&'
7. Net Wor+in, C&pit&'
1. GROSS /OR,ING CAPITAL
Gross *or+in, c&pit&' re(ers to the (ir-Bs in6est-ent in c1rrent &ssets.C1rrent
&ssets &re the &ssets *hich c&n /e con6erte% into c&sh *ithin & )e&r inc'1%e c&sh#short ter-
sec1rities#%e/tors#/i''s recei6&/'e &n% in6entor).
%. NET /OR,ING CAPITAL
Net *or+in, c&pit&' re(ers to the %i((erence /et*een c1rrent &ssets &n% c1rent
'i&/i'ities.C1rrent 'i&/i'ities &re those c'&i-s o( o1tsi%ers *hich &re e4pecte% to -&t1re (or
p&)e-ent *ithin &n &cco1ntin, )e&r &n% inc'1%e cre%itors#/i''s p&)&/'e &n% o1tst&n%in,
e4penses.Net *or+in, c&pit&' c&n /e positi6e or ne,&ti6e.
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((icient *or+in, c&pit&' -&n&,e-ent re31ires th&t (ir-s sho1'% oper&te *ith
so-e &-o1nt o( *or+in, c&pit&'#the e4&ct &-o1nt 6&r)in, (ro- (ir- to (ir- %epen%in, &-on,
other thin,s on th n&t1re o( in%1stries.Net *or+in, c&pit&' is necess&r) /ec&1se the c&sh o1t('o*s
&n% in('o*s %o not coinci%e.The c&sh o1t('o*s res1'tin, (ro- p&)-ent o( c1rrent 'i&/i'ities &re
re'&ti6e') pre%ict&/'e.The c&sh in('o* &re ho*e6er %i((ic1't to pre%ict.The -ore pre%ict&/'e the
c&sh in('o*s &re#the 'ess net *or+in, c&pit&' *i'' /e re31ire%.
The concept o( *or+in, c&pit&' *&s (irst e6eo'6e% /) ,ar7 Mar.M&r4 1se% the
ter- ar$a
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%.TEMPORARY /OR,ING CAPITAL
An) &-o1nt o6er &n% &/o6e the per-&nent *or+in, c&pit&' is te-por&r)#('1ct1&tin, or
6&ri&/'e *or+in, c&pit&'.This portion o( the re31ire *or+in, c&pit&' is nee%e% to -eet ('1ct1&tionin %e-&n% conse31ent 1pon ch&n,es in pro%1ction &n% s&'es &s res1't o( se&son&' ch&n,es.
Te-por&r) Wor+in, C&pit&'
A-o1nt O(
Wor+in, c&pit&'
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Per-&nent Wor+in, C&pit&'
TIM
Gr&ph sho*s the per-&nent 'e6e' is (&ir') const&nt *hi'e te-por&r) *or+in, c&pit&' is
('1ct1&tin, in the c&se o( &n e4p&n%in, (ir- the per-&nent *or+in, c&pit&' 'ine -&) not /e
hori5ont&'.
This -&) /e /ec&1se o( ch&n,es in %e-&n% (or per-&nent c1rrent &ssets -i,ht /e
interestin, to s1pport & risin, 'e6e' o( &cti6it).
DETERMINANTS OF /OR,ING CAPITAL
The &-o1nt o( *or+in, c&pit&' %epen%s 1pon the (o''o*in, (&ctors
1. Na#;r! 23 B;s$6!ss
So-e /1sinesses &re s1ch# %1e to their 6er) n&t1re# th&t their re31ire-ent o( (i4e% c&pit&' is
-ore r&ther th&n *or+in, c&pit&'. These /1sinesses se'' ser6ices &n% not the co--o%ities &n%
th&t too on c&sh /&sis. As s1ch# no (1n%s &re /'oc+e% in pi'in, in6entories &n% &'so no (1n%s &re
/'oc+e% in recei6&/'es .,. P1/'ic 1ti'it) ser6ices 'i+e r&i'*&)s# in(r&str1ct1re oriente% projects
etc. their *or+in, c&pit&' re31ire-ents 'ess. On the other h&n%# there &re so-e /1sinesses 'i+e
tr&%in, &cti6it)# *here re31ire-ent o( (i4e% c&pit&' is 'ess /1t -ore -one) is /'oc+e% in
in6entories &n% %e/tors.
%. L!60# 23 Pr2;4#$26 C=47!
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In so-e /1siness 'i+e -&chine too's in%1str)# the ti-e ,&p /et*een the &c31isition o( r&*
-&teri&'s ti'' en% o( (in&' pro%1ction o( (inishe% pro%1cts itse'( is 31ite hi,h. As s1ch &-o1nt
-&) /e /'oc+e% /) either in r&* -&teri&' or *or+ in pro,ress or (inishe% ,oo%s or e6en in
%e/tors. N&t1r&'') the nee% o( *or+in, c&pit&' is hi,h.
(. S$! a6 Gr28# 23 B;s$6!ss
In 6er) s-&'' co-p&n) the *or+in, c&pit&' re31ire-ent is 31ite hi,h %1e to hi,h o6erhe&%#
hi,her /1)in, &n% se''in, cost etc. &s s1ch -e%i1- si5e /1siness positi6e') h&s e%,e o6er the
s-&'' co-p&nies. !1t i( the /1siness st&rts ,ro*in, &(ter cert&in 'i-it# the *or+in, c&pit&'
re31ire-ents -&) &%6erse') &((ect /) their incre&sin, si5e.
>. B;s$6!ss5Tra! C=47!
I( the co-p&n) is oper&tin, in ti-e o( /oo-# the *or+in, c&pit&' re31ire-ent -&) /e -ore &s
the co-p&n) -&) 'i+e to /1) -ore r&* -&teri&'s# -&) incre&se the pro%1ction &n% s&'es to t&+e
the /ene(it o( (&6or&/'e -&r+et# %1e to incre&se in s&'es# there -&) /e -ore &n% -ore &-o1nts o(
(1n%s /'oc+e% in stoc+ &n% %e/tors etc. Si-i'&r') in the c&se o( %epressions &'so# *or+in, c&pit&'
-&) /e hi,h &s the s&'es ter-s o( 6&'1e &n% 31&ntit) -&) /e re%1cin,# there -&) /e 1nnecess&r)
pi'in, 1p o( stoc+ *itho1t ,ettin, so'%# the recei6&/'e -&) not /e reco6ere% in ti-e etc.
'. T!rs 23 P;r4as! a6 Sa7!
So-e ti-e %1e to co-petition or c1sto-# it -&) /e necess&r) (or the co-p&n) to e4ten% -ore
cre%it to c1sto-ers# &s res1't in *hich -ore &n% -ore &-o1nt is 'oc+e% 1p in %e/tors or /i''s
recei6&/'es *hich incre&se the *or+in, c&pit&' re31ire-ent. On the other h&n%# in the c&se o(
p1rch&se# i( the cre%it is o((ere% /) s1pp'iers o( ,oo%s &n% ser6ices# & p&rt o( *or+in, c&pit&'
re31ire-ent *i'' /e hi,her.
*. Pr23$#a
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The pro(it&/i'it) o( the /1siness -&) 6&r) in e&ch &n% e6er) in%i6i%1&' c&se# *hich is in t1rn
%epen% on n1-ero1s (&ctors# /1t hi,h pro(it&/i'it) *i'' positi6e') re%1ce the str&in on *or+in,
c&pit&' re31ire-ent o( the co-p&n)# /ec&1se the pro(its to the e4tent th&t the) e&rne% in c&sh
-&) /e 1se% to -eet the *or+in, c&pit&' re31ire-ent o( the co-p&n).
. O9!ra#$60 E33$4$!64=
I( the /1siness is c&rrie% o1t on -ore e((icient')# it c&n oper&te in pro(its *hich -&) re%1ce
the str&in on *or+in, c&pit&' it -&) ens1re proper 1ti'i5&tion o( e4istin, reso1rces /) e'i-in&tin,
the *&ste &n% i-pro6e%.
OBJECTIVES OF /OR,ING CAPITAL MANAGEMENT
:. To ens1re &%e31&te 'i31i%it) o( (ir-
7. To -ini-i5e the ris+
;. To -&4i-i5e the (ir-s 6&'1e
IMPORTANCE OR SIGNIFICANCE OF /OR,ING CAPITAL
:. Fee'in, o( sec1rit) &n% con(i%ence
7. So'6enc) &n% s1r6i6&'
;. Goo%*i'' &n% /orro*in, c&p&cit)
=. Goo% re'&tion *ith s1pp'iers# /&n+ers &n% cre%itors
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Par#$4;7ars Y!ars Ca60! $6 82r"$60 4a9$#a7
C;rr!6# Ass!#s: %)) %)1) I64r!as! D!4r!as!
I6!6#2r$!s :7#;7#7:#88@ :#@;#@E#:+
ANALYSIS OF /OR,ING CAPITAL
S#a#!!6# s28$60 4a60!s $6 82r"$60 4a9$#a7 32r #! =!ar %)1) %)11
Par#$4;7ars Y!ars Ca60! $6 82r"$60 4a9$#a7
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C;rr!6# Ass!#s: %)1) %)11 I64r!as! D!4r!as!
I6!6#2r$!s :#@;#@E#:1
C;rr!6# L$a
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Par#$4;7ars Y!ars Ca60! $6 /2r"$60 Ca9$#a7
C;rr!6# Ass!#s:
%)11 %)1% I64r!as! D!4r!as!
I6!6#2r$!s :9#:#E;#8;E 7+ (%&+'&%+&+)+
N!# /2r"$60
Ca9$#a7A?B
%&'>&%(&>1> *&)&*)&*%1
ANALYSIS OF /OR,ING CAPITAL
S#a#!!6# s28$60 4a60!s $6 82r"$60 4a9$#a7 32r #! =!ar %)1% %)1(
Par#$4;7ars Y!ars
Ca60! $6
/2r"$60
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Ca9$#a7
C;rr!6# Ass!#s:
%)1% %)1( I64r!as! D!4r!as!
I6!6#2r$!s 7() (+&&(+&+))
C;rr!6# L$a
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YEAR /OR,ING CAPITAL
7889 @#9=##@@=
78:8 :8#=9#8
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MEANING
R&tio is the n1-eric&' re'&tionship /et*een t*o n1-/ers. It -&) /e e4presse% in 31otients# r&te
or in percent&,e. The r&tio &n&')sis o( *or+in, c&pit&' he'ps -&n&,e-ent in chec+in, 1pon the
e((icienc) *ith *hich *or+in, c&pit&' h&s /een 1se% in co-p&n).
R&tio &n&')sis is *i%e') 1se% too' o( (in&nci&' &n&')sis. It is %e(ine% &s the s)ste-&tic 1se o(
r&tios to interpret (in&nci&' st&te-ent so th&t the stren,ths &n% *e&+nesses o( the (ir-# &s its
historic&' per(or-&nce &n% c1rrent (in&nci&' con%itions c&n /e %eter-ine%.
R&tios -&+e re'&te% in(or-&tion co-p&r&/'e. A sin,'e (i,1re /) itse'( /) itse'( h&s no -e&nin,.
!1t *hen e4presse% in ter-s o( the re'&te% (i,1re# it )ie'%s s1((icient in(erences. Th1s r&tios &re
re'&ti6e (i,1res re('ectin, the re'&tionship /et*een re'&te% 6&ri&/'es. The) &re 1se% &s too's o(
(in&nci&' &n&')sis# *hich in6o'6e their co-p&rison &s sin,'e r&tios *hich 'i+e &/so'1te (i,1res &re
not 1se%.
IMPORTANCE OF RATIO ANALYSIS
The (o''o*in, &re the i-port&nce o( r&tio &n&')sis
:. Use(1' in (in&nci&' position &n&')sis.
7. Use(1' in si-p'i(ic&tion &cco1ntin, p1rpose.
;. Use(1' in &ssessin, p1rpose.
=. Use(1' in co-p&rison o( per(or-&nce.
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RATIOS
CURRENT RATIO
This is -ost *i%e') 1se% r&tio to +no* the c&pit&' position. These r&tiose4press the re'&tionship /et*een c1rrent &ssets &n% c1rrent 'i&/i'ities &n% ,i6e the in(or-&tion
&/o1t (ir- &/i'it) to -eet short ter- &n% 'on, ter- *or+in, c&pit&'.
C;rr!6# Ra#$2 K C;rr!6# Ass!#s
C;rr!6# L$a
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ABSOLUTE LI-UID RATIO
It consi%ers on') the &/so'1te 'i31i%it) &6&i'&/'e *ith the (ir- -e&ns &s e&r') &s possi/'eho* co-p&n) *i'' ,et its c&sh re&%) in its h&n%. "ere on') c&sh# /&n+ /&'&nce# -&r+et&/'e
sec1rities &re t&+en into consi%er&tion. The i%e&' r&tio is 1:%
A
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This R&tio in%ic&tes th&t the co-p&n) h&% hi,h &/so'1te 'i31i%it) r&tio in 78::2:7 *hen
co-p&re% *ith 'o* &/so'1te 'i31i%it) r&tio in 78:72:; perio%.
/OR,ING CAPITAL TO TURNOVER RATIO
This r&tio sho*s the n1-/er o( ti-es the *or+in, c&pit&' is t1rne% o6er *ithin & st&te%
perio%. It is c&'c1'&te% &s (o''o*s?
/2r"$60 Ca9$#a7 Ra#$2 K Sa7!s
N!# /2r"$60 Ca9$#a7
Par#$4;7ars5Y!ars %))?1) %)1)?11 %)11?1% %)1%?1(
Sa7!s :@#;#@;#99< 7=#;#=;#=@8 7=#9:#@@#@9 ;E#=;#;:#99<
N!# /2r"$60
Ca9$#a7
:8#=9#8
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This R&tio sho*s th&t the co-p&n) h&% 6er) hi,h t1rno6er r&tio o( .98 o( *or+in, c&pit&' in
78:72:; perio%.
/OR,ING CAPITAL TO PROFIT
This r&tio sho*s the re'&tionship /et*een *or+in, c&pit&' &n% the pro(it o( the co-p&n).
/2r"$60 Ca9$#a7 #2 Pr23$# K Pr23$#
N!# /2r"$60 Ca9$#a7
Par#$4;7ars5Y!ars %))?1) %)1)?11 %)11?1% %)1%?1(
Pr23$#
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INTERPRETATION
This R&tio in%ic&tes th&t the co-p&n) h&% incre&se% r&tio o( 8.:E in 78:72:; &n% hi,h pro(it o(
R.s. :#88#=# (.+'
2009#10 2010#11 2011#12 2012#13
0
1
2
3
4
6!i4ed Asset "urno5er 0atio
ied )sset Turnover &!tio
A.S.S College Of Business Administration,Gadag Page 2
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INTERPRETATION
This R&tio sho*s th&t 78::2:7 h&% hi,h r&tio o(
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INTERPRETATION
This R&tio sho*s th&t co-p&n) h&% hi,h r&tio o( c&sh in 78::2:7 &t 8.78 0 78:72:; h&% 'o*er
r&tio th&n other pre6io1s )e&rs &t 8.8@.
CURRENT ASSET RATIO
The c1rrent &sset r&tio -e&s1res the e((icient 1se o( c1rrent &ssets in the pro%1ction. I( the
co-p&n) 1ti'i5es its c1rrent &ssets e((ecti6e') pro%1ction &n% s&'es *i'' incre&se# i( ine((icient')
then pro%1ction &n% s&'es *i'' re%1ce.
C;rr!6# Ass!# Ra#$2 K Sa7!s
C;rr!6# Ass!#s
Par#$4;7ars5Y!ars %))?1) %)1)?11 %)11?1% %)1%?1(
Sa7!s :@#;#@;#99< 7=#;#=;#=@8 7=#9:#@@#@9 ;E#=;#;:#99<
C;rr!6# Ass!#s 77#;@#E
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INTERPRETATION
This R&tio in%ic&tes th&t co-p&n) 1se% its c1rrent &ssets e((icient') in pro%1ction *hich res1'te%
in -ore pro%1ction 0 s&'es. The R&tio *&s incre&se% (ro- 8.7 in 78::2:7 to 8.9E in 78:72:;.
COMPOSITON OF /OR,ING CAPITAL
For & proper &ppreci&tion &n% 1n%erst&n%in, o( it# c'oser 'oo+ o( *or+in, c&pit&' is
necess&r). The (o''o*in, &re the constit1ent p&r+s o( *or+in, c&pit&'.
C;rr!6# Ass!#s
:. C&sh
7. !&n+ !&'&nce
;. Stoc+ o( In6entor)
=. De/tors
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;. O1tst&n%in, 4penses
=. Inco-es Recei6e% in A%6&nce
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The (in&ncin, po'ic) o( the (ir- is s&i% to /e conser6&ti6e *hen it %epen%s -ore
on 'on, ter- (1n%s. Un%er & conser6&ti6e p'&n the (ir- (in&nces its per-&nent &ssets &n% &'so &
p&rt o( te-por&r) c1rrent &ssets *ith 'on, ter- (in&ncin,.
THE PRINCIPLE ADOPTED BY BEMCO HYDRAULICS L#.
The co-p&n) &%opte% AGGRSSIJ PRINCIPL /ec&1se it is 1sin, short ter- /&n+
'o&ns to (in&nce the *or+in, c&pit&'. M&in') the co-p&n) is ,ettin, 'o&n (ro- t*o /&n+s. The)
&re?
• !&n+ o( M&h&r&shtr&
• St&te !&n+ o( In%i&
In /oth the /&n+s the co-p&n) h&s three t)pes o( &cco1nts?
1.C;rr!6# A442;6#
These &cco1nts &re -&in') 1se% /) /1siness-en. These &re 6er) he'p(1' to /1siness
or,&ni5&tions /ec&1se these %eposits &re -ore 'i31i% %eposits. !MCO &'so h&s its
c1rrent &cco1nts in the &/o6e -entione% /&n+s &n% ,ettin, the (o''o*in, /ene(its?
• Most 'i31i% %eposits
• No 'i-its (or the n1-/er o( tr&ns&ctions
• No 'i-its (or the &-o1nt o( tr&ns&ctions in & %&)
•
Che31e /oo+ (&ci'it) is pro6i%e%
%.Ba6" G;ara6#!! A442;6#
!&n+ ,1&r&ntee is the ,1&r&ntee o( p&)-ent /) /&n+ on /eh&'( o( c1sto-er o( the
/&n+> c1sto-er -&) /e in%i6i%1&' or & co-p&n). !MCO &'so h&s its /&n+ ,1&r&ntee
&cco1nt in S!I &n% !&n+ o( M&h&r&shtr& &n% ,ettin, /e'o* -entione% /ene(its2
• !&n+ ,1&r&ntee c&n -iti,&te ris+
A.S.S College Of Business Administration,Gadag Page )
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• It (1nctions &s & s&(e,1&r% (or /oth p&rties
• It is 1se% to stren,then &n% sec1re &n o/'i,&tion 1n%er & co--erci&' contr&ct.
(.L!##!r 23 Cr!$#
Letter o( cre%it is & /in%in, %oc1-ent th&t & /1)er c&n re31est (ro- his /&n+ in
or%er to ,1&r&ntee th&t the p&)-ent o( ,oo%s *i'' /e tr&ns(erre% to the se''er. !&sic&'') & 'etter o(
cre%it ,i6es the se''er re&ss1r&nce th&t he *i'' recei6e the p&)-ent (or the ,oo%s so'%.
!MCO &'so h&s Letter o( Cre%it (&ci'it) (ro- its /&n+. A(ter & contr&ct is
conc'1%e% /et*een /1)er &n% se''er# /1)ers /&n+ s1pp'ies & 'etter o( cre%it to se''er. So the short
ter- 'o&n is the -&in &n% on') so1rce (or (in&ncin, the *or+in, c&pit&' in !MCO.
CALCULATION OF COST OF /OR,ING CAPITAL
Cost o( *or+in, c&pit&' is nothin, /1t the c&rr)in, cost o( th&t *or+in, c&pit&' -e&ns
ho* -1ch cost the co-p&n) inc1rrs to ho'% the *or+in, c&pit&'.
It c&n /e c&'c1'&te% /) c&'c1'&tin, the interest &-o1nt o( 'o&n t&+en /) the co-p&n)# the
cost o( *or+in, c&pit&' o( !MCO ")%r&1'ics is &s (o''o*s?
YEAR LOAN AMOUNT RATE OF
INTEREST
INTEREST
AMOUNT
7889 :#=
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!) o/ser6in, the &/o6e t&/'e *e c&n s&) th&t (or the p&st (i6e )e&rs the cost o( *or+in, c&pit&' o(
the co-p&n) is %&'1&'(&)*(.%+.
In e6er) co-p&n) *or+in, c&pit&' is nee%e% &n% si-i'&r') the cost o( *or+in, c&pit&' &'so
inc1rrs to ho'% th&t c&pit&'.
SALES&PROFIT AND /OR,ING CAPITAL OF THE COMPANY
6er) co-p&n) co-es into e4istence to -&+e pro(its. M&+in, pro(its &n% &c31irin, -ost
o( the c&pit&' sh&re &re the -&in o/jecti6es o( e6er) co-p&n). The /e'o* t&/'e &n% ,r&ph sho*s
the s&'es# pro(it &n% *or+in, c&pit&' o( the co-p&n) o( the p&st (i6e )e&rs.
Par#$4;7ars %)) %)1) %)11 %)1% %)1(
Sa7!s 77#
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2009 2010 2011 2012 20130
0000000
100000000
10000000
200000000
20000000
300000000
30000000
400000000
40000000
00000000
W+&*(5 )*T)7
&+*T
,)7',
INTERPRETATION
This R&tio sho*s th&t the co-p&n)Bs S&'es 0 Pro(it is incre&sin, )e&r /) )e&r &n% *or+in,
c&pit&' h&% incre&se% (ro- 7889 to 78:: /1t it is %ecre&sin, (ro- 78:7 &n% 78:;
CHAPTER VI
FINDINGS& SUGGESIONS AND CONCLUSION
FINDINGS
:. Co-p&n) h&s &%opte% the &,,ressi6e princip'e to -&int&in the *or+in, c&pit&'.
7. The -&in &n% on') so1rce (or (in&ncin, *or+in, c&pit&' is !&n+ Lo&n.
;. !&n+ o( M&h&r&shtr& &n% S!I &re the /&n+s *hich pro6i%es 'o&n to the co-p&n).
A.S.S College Of Business Administration,Gadag Page '
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=. Tho1,h c1rrent r&tio is not 1pto the -&r+# /1t in (i6e )e&rs it ne6er *ent 'ess th&n :.:@
*hich c&n /e consi%ere% &s ,oo%.
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;. Co-p&n) pre(ers !&n+ o( M&h&r&shtr& &n% S!I (or 'o&n# the) c&n ,o (or other /&n+s
&'so *hich *i'' pro6i%e 'o&n &t 'ess interest.
=. I *o1'% &'so 'i+e to s1,,est co-p&n) to i-pro6e its *or+in, c&pit&' position /)
re%1cin, its c1rrent 'i&/i'ities 'i+e p&)in, the cre%itors &s e&r') &s possi/'e.
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There is & s-&'' ('1ct1&tion in the co-p&n)Bs *or+in, c&pit&'# s&'es &n% pro(it in these <
)e&rs. !) o/ser6in, the %&t& *e c&n s&) th&t co-p&n) is i-pro6in, )e&r /) )e&r. Tho1,h the
co-p&n) %oes not h&6e hi,h') 31&'i(ie% e-p'o)ees# the) &re contri/1tin, their s+i''s &n%
+no*'e%,e so e((ecti6e') th&t their o*n e-p'o)ees te'' th&t the) h&6e /eco-e e4pert th&n hi,h')
31&'i(ie% e-p'o)ees.
The co-p&n)Bs (in&nci&' position *i'' /e stron, in the co-in, )e&rs. Co-p&n)Bs
*or+in, c&pit&' position is ,oo%. The 'i31i%it) position o( the co-p&n) is &'so ,oo%.
One i-port&nt thin, is th&t /&n+ o( M&h&r&shtr& &n% S!I &re pro6i%in, 'o&ns since so
-&n) )e&rs so th&t the re'&tionship /et*een the co-p&n) &n% these t*o /&n+s is ,oo%.
BIBLIOGRAPHY
B22"s:
:. Fin&nci&' M&n&,e-ent /) Kh&n &n% &in7. Fin&nci&' M&n&,e-ent /) I.M.P&n%e)
C29a6=:
• Ann1&' Report
A.S.S College Of Business Administration,Gadag Page '3
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• !&'&nce Sheet
• Pro(it &n% Loss St&te-ent
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