Download - working capital project tcs ion.docx
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A STUDY ON CASH FLOW STATEMENT
OF
TCS- ION Company
A project report su m!tte" to t#e Punjab Technical University !n part!a$ %u$%!$$ment o% t#ere&u!rements %or t#e a'ar" o% t#e "e(ree
o%
Bachelor of Commerce (Professional)
)*+, -*+,./
Un"er t#e 0u!"ance o% Su m!tte"1y
2ro%3 )Department o% Mana(ement Stu"!es/13com )2/
, *456.
DAV College, BAT !"DA
(Affiliate# to Punjab! University, PAT!A$A)
TA1LE OF CONTENTS
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S3NO NAME OF TO2IC 2A0E NO3
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CE7TIFICATE
DECLA7ATION
AC8NOWLED0EMENT
E9ECUTI:E SUMMA7Y
CHA2TE7-, COM2ANY 27OFILE
CHA2TE7-* INT7ODUCTION TO TO2IC
CHA2TE7- 7E:IEW OF LITE7ATU7E
CHA2TE7-; 7ESEA7CH METHODOLO0Y
-7ESEA7CH O1 7ECOMMENDATION?
SU00ESTION
CHA2TE7-4 1I1LIO07A2HY
D%C$A&AT!'"
I #ere y "ec$are t#at t#e project ent!t$e" A TUD* '" CA +$' TAT%-%"T
'+ TC . i'" / Su m!tte" !n part!a$ %u$%!$$ment o% t#e re&u!rements %or a'ar" o% t#e
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"e(ree o% 1313A3 at DA: Co$$e(e 1at#!n"a@ A%%!$!ate" to 2unja ! Un! ers!ty@ 2at!a$a !s an
aut#ent!c 'orB an" #as not een su m!tte" to any ot#er Un! ers!ty?Inst!tute %or a'ar" o%
any "e(ree ?" ! p$oma3
Name-
0AC1"' $%D2%-%"T
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F!rst$y I 'ou$" $!Be to e press our !mmense (rat!tu"e to'ar"s our !nst!tut!on DAV College
Bathin#a, '#!c# create" a (reat p$at%orm to atta!n pro%oun" tec#n!ca$ sB!$$s !n t#e %!e$" o%
13com)2/ t#ere y %u$%!$$!n( our most c#er!s#e" (oa$3
I 'ou$" t#anB a$$ t#e %!nance "epartment o% TC . i'" spec!a$$y Mr3 Aman 8umar@ an"
t#e emp$oyees !n t#e %!nance "epartment %or (u!"!n( me an" #e$p!n( me !n success%u$
comp$et!on o% t#e project3
I '!$$ a$so spec!%!ca$$y t#anB toProf3, Department@ Hea"@ Da co$$e(e 1at#!n"a %or t#e
(!nternal 2ui#e) %or e ten"!n( #!s cooperat!on !n "o!n( t#!s project3
I s#a$$ e %a!$!n( !n my "uty !% I "o not acBno'$e"(e t#e a%%ect!on@ ass!stance@ $ess!n(san mora$ support (! en to me y my %am!$y@ spec!a$$y my %at#er '#o encoura(e" me
an" !nst!$$e" me t#e se$% e$!e% an" ne er to say "!e att!tu"e3
Last ut not t#e $east@ I '!$$ $!Be to t#anB 0o" %or $ess!n( me an" (! !n( me suc# a
'on"er%u$ opportun!ty3
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C APT%&.4
COM2ANY 27OFILE
TATA Consultancy ervice
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Type 2u $!c
Tra"e" as 1SE 6 *6;+
NSE TCS
1SE SENSE9 Const!tuent
CN9 N!%ty Const!tuent
In"ustry IT ser !ces @ IT consu$t!n(
Foun"e" ,5.4
Foun"er
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S$o(an E per!ence certa!nty
We s!te '''3tcs3com
Tata Consu$tancy Ser !ces L!m!te" )TCS/!s an In"!an mu$t!nat!ona$ !n%ormat!on tec#no$o(y
)IT/ ser !ce@ consu$t!n( an" us!ness so$ut!ons company #ea"
&uartere" !n Mum a!@ Ma#aras#tra 3 It !s a su s!"!ary o% t#e Tata 0roup an" operates !n ;.
countr!es3TCS !s one o% t#e $ar(est In"!an compan!es y marBet cap!ta$!Gat!on ) 4+
!$$!on/3 TCS !s no' p$ace" amon( t#e 1!( ; most a$ua $e IT ser !ces ran"s
'or$"'!"e3 In *+,6@ TCS !s ranBe" .;t# o era$$ !n t#e For es Wor$"Js Most Inno at! e
Compan!es ranB!n( @ maB!n( !t ot# t#e #!(#est-ranBe" IT ser !ces company an" t#e %!rst
In"!an company3 It !s t#e 'or$"Js ,+t# $ar(est IT ser !ces pro !"er@ measure" y t#e re enues3
istory5
6777 to 8resent
On *6 Au(ust *++;@ TCS ecame a pu $!c$y $!ste" company3
https://en.wikipedia.org/wiki/Sloganhttp://www.tcs.com/http://var/www/apps/conversion/tmp/scratch_3/multinationalhttps://en.wikipedia.org/wiki/Information_technologyhttps://en.wikipedia.org/wiki/Service_(economics)https://en.wikipedia.org/wiki/Information_technology_consultinghttps://en.wikipedia.org/wiki/Information_technology_consultinghttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Mumbaihttps://en.wikipedia.org/wiki/Mumbaihttps://en.wikipedia.org/wiki/Maharashtrahttps://en.wikipedia.org/wiki/Maharashtrahttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Market_capitalizationhttps://en.wikipedia.org/wiki/Market_capitalizationhttps://en.wikipedia.org/wiki/Forbeshttps://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/wiki/Public_companyhttps://en.wikipedia.org/wiki/Public_companyhttps://en.wikipedia.org/wiki/Sloganhttp://www.tcs.com/http://var/www/apps/conversion/tmp/scratch_3/multinationalhttps://en.wikipedia.org/wiki/Information_technologyhttps://en.wikipedia.org/wiki/Service_(economics)https://en.wikipedia.org/wiki/Information_technology_consultinghttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Mumbaihttps://en.wikipedia.org/wiki/Maharashtrahttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Market_capitalizationhttps://en.wikipedia.org/wiki/Forbeshttps://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/wiki/Public_company
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In *++6@ TCS ecame t#e %!rst In"!a- ase" IT ser !ces company to enter
t#e !o!n%ormat!cs marBet3
In *++.@ TCS "es!(ne" an E72 system %or t#e In"!an 7a!$'ay Cater!n( an" Tour!sm
Corporat!on 3
In *++4@ TCSJs e- us!ness act! !t!es 'ere (enerat!n( o er US 6++ m!$$!on !n annua$ re enues3
In *++4@ TCS un"ertooB an !nterna$ restructur!n( e erc!se '#!c# a!me" to !ncrease t#e
companyJs a !$!ty3
TCS entere" t#e sma$$ an" me"!um enterpr!ses marBet %or t#e %!rst t!me !n *+,,@ '!t# c$ou"-
ase" o%%er!n(s3 On t#e $ast tra"!n( "ay o% *++, TCS o ertooB 7IL to ac#!e e t#e #!(#est
marBet cap!ta$!Gat!on o% any In"!a- ase" company3
In t#e *+,,?,* %!sca$ year@ TCS ac#!e e" annua$ re enues o% o er US ,+ !$$!on %or t#e %!rst
t!me3
In May *+, @ TCS 'as a'ar"e" a s! -year contract 'ort# o er ₹ ,,++ crores to pro !"e
ser !ces to t#e In"!an Department o% 2osts3
In *+, @ TCS mo e" %rom t#e , t# pos!t!on to ,+t# pos!t!on !n t#e Lea(ue o% top ,+ ($o a$ IT
ser !ces compan!es
In
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Asset $e era(e so$ut!ons )*3>+K/
Assurance ser !ces )>3>+K/
1us!ness process outsourc!n( ),*36+K/
Consu$t!n( )*3++K/
En(!neer!n( an" In"ustr!a$ ser !ces );3.+K/
Enterpr!se so$ut!ons ),63*+K/ an"
IT !n%rastructure ser !ces ),,36+K/3
'8erations5
TCS #a e * + o%%!ces across ;. countr!es an" ,;> "e$! ery centers !n *, countr!es3At t#e
same "ate TCS #a" a tota$ o% 64 su s!"!ary compan!es3
$ocations5
TCS #as operat!ons !n t#e %o$$o'!n( $ocat!ons
In"!a A#me"a a" @1an(a$ore @ 1aro"a @1#u anes'ar @ C#enna! @ Co!m atore @2atna @ De$#!@ 0a
n"#!na(ar @0oa @0ur(aon @0u'a#at! @ Hy"era a" @1#opa$ @In"ore @
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TCS esta $!s#e" t#e %!rst so%t'are researc# centre !n In"!a@ t#e Tata 7esearc# De e$opment
an" Des!(n Centre@ !n 2une@ In"!a !n ,54,3 T7DDC un"ertaBes researc# !n So%t'are
en(!neer!n( @2rocess en(!neer!n( an" systems researc#3 7esearc# at T7DDC #as a$so resu$te"
!n t#e "e e$opment o% Suja$@ a $o'-cost 'ater pur!%!er t#at can e manu%acture" us!n( $oca$$y
a a!$a $e resources3 TCS "ep$oye" t#ousan"s o% t#ese %!$ters !n t#eIn"!an Ocean Tsunam!
"!saster o% *++; as part o% !ts re$!e% act! !t!es3 T#!s pro"uct #as een marBete" !n In"!a as Tata
s'ac# @ a $o' cost 'ater pur!%!er3
!nnovation $abs
In *++>@ TCS $aunc#e" !ts co-!nno at!on net'orB@ a net'orB o% !nno at!on $a s@ start up
a$$!ances@ un! ers!ty researc# "epartments@ an" enture cap!ta$!sts3 In a""!t!on@ TCS #as ,5
!nno at!on $a s ase" !n t#ree countr!es3TCSJ partners !nc$u"e Co$$a net@Cassatt @ aca"em!c!nst!tut!ons suc# as IITs @ Stan%or"@MIT @Carne(!e Me$$on an" enture cap!ta$!sts
$!BeSe&uo!a an" 8$e!ner 2erB!ns3
%m8loyees5
TCS !s one o% t#e $ar(est pr! ate sector emp$oyers !n In"!a@ an" t#e secon"-$ar(est emp$oyer
amon( $!ste" In"!an compan!es )a%ter Coa$ In"!a L!m!te" /3
TCS #a" a tota$ o% o er 6@.*+ emp$oyees as o% Octo er *+,6@ o% '#!c# ,K 'ere
'omen3 T#e num er o% non-In"!an nat!ona$s 'as *,@*4* as at Marc# ,@ *+, )>3>K/3T#e
emp$oyee costs %or t#e FY *+,*-, 'ere US ;3 4 !$$!on@ '#!c# 'as appro 3 4K o% t#e
tota$ re enue o% t#e company %or t#at per!o"3 In t#e %!sca$ year *+,*-, @ TCS recru!te" a tota$
o% .5@>*4 ne' sta%%@ o% '#om 65@*>. 'ere ase" !n In"!a an" ,+@;6* 'ere ase" !n t#e rest o%
t#e 'or$"3 In t#e same per!o"@ t#e rate o% attr!t!on 'as ,+3.K3 T#e a era(e a(e o% a TCS
emp$oyee !s *4 years3 T#e emp$oyee ut!$!sat!on rate@ e c$u"!n( tra!nees@ %or t#e FY *+,*-,
'as 4*K3 TCS 'as t#e %!%t#-$ar(est Un!te" States !sa rec!p!ent !n *++4 )a%ter
In%osys@ CTS @ W!pro an" Ma#!n"ra Satyam /3In *+,*@ t#e Tata (roup compan!es@ !nc$u"!n(TCS@ 'ere t#e secon" $ar(est rec!p!ent o% H-,1 !sas3
Su raman!am 7ama"ora!@ %ormer CEO o% TCS@ #as 'r!tten an auto !o(rap#!ca$ ooB a out
#!s e per!ences !n t#e company ca$$e" T#e TCS Story333an" eyon"3
As o%
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On ,; Fe ruary *++.@ U3S3 $a' %!rm L!e%%Ca raserHe!mann= 1ernste!n@ LL2 %!$e" a
nat!on'!"e c$ass act!on $a'su!t a(a!nst Tata3 In
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Tota$ assets US ,*364 !$$!on )*+,6/
Tota$ e&u!ty US ;3 6 !$$!on )*+,6
Num er emp$oyees +++ )Au(ust *+,6/
2arent Tata 0roup
S$o(an E per!ence certa!nty
We s!te '''3tcs!on3com
TC . i'"
https://en.wikipedia.org/wiki/Assethttps://en.wikipedia.org/wiki/Equity_(finance)https://en.wikipedia.org/wiki/Parent_companyhttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Sloganhttp://www.tcsion.com/https://en.wikipedia.org/wiki/Assethttps://en.wikipedia.org/wiki/Equity_(finance)https://en.wikipedia.org/wiki/Parent_companyhttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Sloganhttp://www.tcsion.com/
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No' TCS !s "ea$!n( !n e"ucat!on an" 'e "e e$opment un"er t#e name o% !ON3
TC .i'" !s at present@ t#e most rap!"$y (ro'!n( on$!ne 'e so$ut!ons company !n
In"!a@ pro !"!n( IT ena $e" ser !ces@ consu$tat!on an" outsourc!n( to compan!es
sprea" !n more t#an ,.6 countr!es across > cont!nents3 T#e!r a" ance" "e$! ery mo"e$
$en"s tec#no$o(y pract!ces '!t# %unct!ona$ e pert!se to #e$p us !mpro e our us!ness
processes an" oost per%ormance3
T#e!r pro%ess!ona$ 'e s!te "es!(n@ We s!te "e e$opment@ $o(o "es!(n@ F$as# "es!(n@
an" SEO ser !ces@ amon( ot#ers@ can (o a $on( 'ay !n "eterm!n!n( t#e success o%
your us!ness3 Custom creat!on a$so !nc$u"es@ ut !s not $!m!te" to@ !ncorporat!n(
!ma(es@ !"eo an" ot#er !nteract! e content !nto our s!te@ apart %rom t#e usua$ te t
e$ement
T#ey o%%er t#e!r c$!ents a reperto!re o% ser !ces $!Be ecommerce 'e s!te creat!on an"
porta$ "e e$opment@ ran" marBet!n( on $ea"!n( a" net'orBs@ "!(!ta$ marBet!n(@ 'e
ana$yt!cs an" muc# more3 T#e!r ta$ente" an" e per!ence" team o% pro%ess!ona$s
compr!se We *3+ "e e$opment e ecut! es '#o o%%er a" ance" so$ut!ons %or
pu $!s#ers an" a" ert!sers3 T#ey create pro%ess!ona$ an" "ynam!c pa(es %or us us!n(
!nte$$!(ent an" smart pract!ces3
T#ey a$so "ou $e up as a "!(!ta$ marBet!n( a(ency t#at ser es $ea"!n( ran"s@
corporate c$!ents@ as 'e$$ as ot#er p$ayers3 T#e!r cost-e%%ect! e an" custom!Ge" 'e
"e e$opment@ an" on$!ne me"!a so$ut!ons are ta!$or-ma"e to su!t our spec!%!c nee"s an"
re&u!rements3 TCS-!ON o%%ers us cutt!n( e"(e ser !ces %or 'e s!te "es!(n!n(@
"e e$opment an" !nternet marBet!n(3 T#e!r a!m !s to con ert our Creating 2lobal
Profeesionate 3
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2et :uality an# %conomic eb ervicesTCS-!ON !s a 'e "es!(n an" "e e$opment company ase" !n In"!a 3A %u$$y!nte(rate" ITEs %!rm@ 'e pro !"e 'or$"-c$ass 'e "es!(n ser !ces to t#e!r ($o a$c$!ente$e sprea" across > cont!nents an" major countr!es !nc$u"!n( USA@ U8@Austra$!a@ an" se era$ t#rou(#out As!a an" Europe 3
TCS-!ON pro !"es a '!"e ran(e o% #!(#$y cost-e%%ect! e an" custom!Ge" 'e ser !cesto compan!es !n ar!e" !n"ustr!es suc# as enterta!nment@ %as#!on@ mus!c@ %!nance@en !ronment@ us!ness@ commerce@ IT an" te$ecommun!cat!ons@ tra e$ an" tour!sm@
#osp!ta$!ty@ e"ucat!on@ etc3 T#e!r a%%or"a $e 'e ser !ces are !"ea$ %or sma$$@ me"!uman" $ar(e sca$e" pr! ate an" corporate or(an!Gat!ons an" a$so start-up us!nesses an"asp!r!n( entrepreneurs
TC .i'" is 'ne.sto8 ho8 for Com8rehensive eb ervices;
T#e!r compre#ens! e $!st o% 'e "es!(n an" "e e$opment ser !ces !nc$u"es (rap#!cs"es!(n@ corporate !"ent!ty "es!(n an" custom $o(o "es!(n ser !ces@ custom 'e
pro(ramm!n(@ $o( custom!Gat!on an" e-commerce so$ut!ons@ F$as# "es!(ns@ searc#en(!ne opt!m!Gat!on ser !ces an" muc# more3
3
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ebsite Design ervices5
At TCS !ON In"!a@ creat! e ta$ent meets tec#n!ca$ e pert!se to pro"uce smart an" e%%ect! e
"es!(ns '!t# #!(# appea$ an" usa !$!ty a$ue3 T#ey un"erstan" your nee" to e "!%%erent %rom
re(u$ar se$$!n( or !n%ormat! e s!tes@ !ncrease !s!tor !n%$o' an" "ecrease ounce rates3 T#e!r
pro%ess!ona$ 'e "es!(ners emp$oy %res# !nno at! e !"eas an" a" ance" "es!(n!n( too$s to
pro"uce opt!m!Ge" an" pro%!t (enerat! e 'e s!tes %or you3
T#e!r 'e s!te "es!(n ser !ces are %ocuse" on pro"uc!n( un!&ue$y appea$!n( an" resu$t-
or!ente" 'e s!tes %or our spec!a$!Ge" us!ness3 Le era(e our &ua$!ty 'e "es!(n ser !ces
%or "ynam!c an" %$e ! $e 'e s!tes an" enjoy ma !mum ene%!t3
!T . as . a ervice5
T#e IT-as-a Ser !ce us!ness mo"e$ o% !ON a c$ou" ase" E72 so$ut!on 'as conceptua$!Ge"
y TCS t#rou(# c$ose !nteract!ons '!t# Sma$$ an" Me"!um 1us!nesses )SM1/ across re$e ant
staBe#o$"ers@ "e e$op!n( a "eep un"erstan"!n( o% t#e!r ICT consumpt!on pattern an" us!ness
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c#a$$en(es3 An !nno at! e ser !ce mo"e$@ !ON uses emer(!n( tec#no$o(!es $!Be c$ou"
comput!n( an" !rtua$!Gat!on to create a #o$!st!c@ %!t-%or-purpose so$ut!on stacB %or SM1s
!nte(rat!n( #ar"'are@ net'orB@ so%t'are an" ser !ces3 An" a$$ o% t#!s !s acBe" y us!ness@
tec#n!ca$ an" consu$t!n( ser !ces y !ON3 T#e !ON C$ou" E72 So$ut!on !s #!(#$y mo"u$ar@
sca$a $e an" con%!(ura $e (! !n( SM1s t#e ene%!ts o% !ncrease" e%%!c!enc!es %aster (o to
marBet@ pre"!cta !$!ty o% tec#no$o(y as 'e$$ as spen"@ IT ta$ent on ca$$ an" etter us!ness
resu$ts3
*ou gain from5
!ntegrate# solutions5
We as a C$ou" E72 So$ut!on %or SM1s o%%er s!n($e- '!n"o' IT '!t# a pre-!nte(rate" su!te o%
#ar"'are@ net'orB@ so%t'are an" ser !ces3 We ensure t#at your %unct!ons are "!(!t!Ge"@
automate" an" connecte"3 For e amp$e@ !% you are us!n( a C7M so$ut!on a$on( '!t# a core
E72 )e3( a Manu%actur!n( E72/ an" #a e a "ocument mana(ement system to or(an!Ge
support!n( %!$es an" an H7MS@ 'e ensure t#at t#ese so$ut!ons are connecte" an" 'orB as one3
So %or you@ !t !s s!mp$y one IT an" not mu$t!p$e app$!cat!ons3 Inte(rate" app$!cat!ons t#us
pro !"e a compre#ens! e !e' o% us!ness ena $!n( etter "ec!s!ons3
!ncrease# agility5
We r!n( !n t#e a(!$!ty to Beep pace '!t# c#an(!n( processes or a ne' $!ne o% us!ness3 We
#e$p you con%!(ure t#e processes to 'orB as you current$y "o or t#e so%t'are recommen"s
an" a$$o's you to c#oose !n"ustry est pract!ces ase" on your us!ness parameters3 !ON
(! es you !ncrease" con en!ence a$$o'!n( you to per%orm ar!ous tasBs %rom your mo !$e
"e !ce@ no matter '#ere you are3 1e!n( automat!ca$$y comp$!ant '!t# statutory re&u!rements@
t#e so$ut!on ensures your company !s a$'ays au"!t rea"y an" $e(a$$y comp$!ant3
A 8ay.as.you.use mo#el5
Our mo"e$ e$!m!nates cap!ta$ !n estment up %ront as 'e %ac!$!tate procurement o% t#e IT
!n%rastructure an" so%t'are on rent %or t#e "urat!on o% t#e contract3 A""!t!ona$$y@ you on$y pay
%or t#e num er o% users '#o actua$$y use t#e so%t'are3 T#us@ you pay as you use on a mont#$y
as!s '#!c# !nc$u"es ma!ntenance an" tra!n!n(3 Typ!ca$$y@ '!t# t#e !ON C$ou" E72 t#e 7OI
e cee"s renta$ '!t#!n t#ree mont#s@ '#en est pract!ces are 'e$$ %o$$o'e"3
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!ON C#anne$ Sa$es 2artners #a e !n-"ept# un"erstan"!n( o% t#e e"ucat!on se(ment3 T#e
C#anne$ Sa$es 2artners #e$p customers across "!%%erent e"ucat!on se(ments !mp$ement t#e
most appropr!ate !ON so$ut!on3
A -anufacturing nervous system
7ecor"!n( or"ers@ sa$es an" purc#ases 'ou$" #a e $!tt$e mean!n( un$ess t#ey 'ere connecte"3
At t#e #eart o% our manu%actur!n( so$ut!on $!es a pro"uct!on system t#at ensures t#at t#ese are
!n sync3 You procure as muc# as you pro"uce an" pro"uce as muc# as you are a $e to se$$3
T#e (oa$ !s as s!mp$e as Beep!n( t#e $o'est !n entory3
At !ON@ 'e ten" to maBe t#e comp$e manu%actur!n( process $ooB s!mp$e y connect!n( t#e
"!%%erent parts o% t#e operat!ons3 T#e so%t'are !s or(an!Ge" !nto p$ann!n( an" e ecut!on3
2ro"uct!on p$an %or !nstance@ 'ou$" te$$ your operat!ons to e pect t#e r!(#t amount o% sa$es@
an" t#en !n!t!ate t#e r!(#t &uant!ty o% procurement3 1ut '#at #appens '#en t#e e ecut!on
s$!ps %rom '#at !s p$anne" :!(!$ant reports an" "as# oar"s 'ou$" a$ert you !n t!me3
olution tac=5
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Po9er your 9or=force 8erformance5
Across !n"ustr!es@ or(an!Gat!ons are $ooB!n( at ne' 'ays to mana(e t#e!r 'orB%orce an"
measure per%ormance t#rou(# H7 ana$yt!cs@ per%ormance mana(ement systems@ an" soc!a$
me"!a3
T#e !ON Human Cap!ta$ Mana(ement )HCM/ So$ut!on !s an !nte(rate" so$ut!on t#at #e$ps
you e%%ect! e$y mana(e your emp$oyees an" !ncrease pro"uct! !ty across your 'orB%orce3 You
can a$!(n emp$oyee (oa$s '!t# us!ness o ject! es@ cu$t! ate emp$oyee sB!$$s@ measure an"
re'ar" per%ormance3 !ON HCM !s a comp$ete Enterpr!se 7esource 2$ann!n( )E72/ so$ut!on
t#at automates your #uman resource mana(ement an" payro$$ processes '!t# on-"eman"
1us!ness Inte$$!(ence )1I/ report!n( capa !$!t!es an" "as# oar"s to #e$p maBe &u!cB "ec!s!ons
'#!$e ma!nta!n!n( statutory comp$!anc !ON Human 7esources Mana(ement So$ut!on
)H7MS/ mana(es your recru!tment an" per%ormance e a$uat!on processes@ '#!$e a$so
mana(!n( emp$oyee recor"s an" a$!"at!n( t#e!r %!nanc!a$ "eta!$s!ON 2ayro$$
So$ut!on mana(es e ery sta(e o% t#e payro$$ process@ ensur!n( e%%ect! e@ accurate payro$$
cyc$es an" #e$ps !n %aster "ec!s!on maB!n( '!t# on-"eman" us!ness !nte$$!(ence )1I/
report!n( capa !$!t!es In a""!t!on@ !ON HCM #as a""!t!ona$ so$ut!on an" ser !ces to %urt#er
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en#ance t#e pro"uct! !ty an" $earn!n( en !ronment !n your or(an!Gat!on !ON Human Cap!ta$
Mana(ement )HCM/ !s "e$! ere" as a
-anage# ervice Mana(es t#e process en"-to-en" '!t# t#e ser !ce "e$! ere" as an output3
!m8lementation ervice De$! ers a comp$ete$y con%!(ure" system rea"y %or en" users to
transact an" e tract output on a "ay-to-"ay as!s3
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TC in e#ucation5
Cam8us ystem5
!ON Campus Mana(ement System compr!ses a su!te o% o%%er!n(s@ cater!n( to seasona$
aca"em!c e ents@ mappe" to spec!%!c "epartments o% an !nst!tut!on3 Our so$ut!on %ac!$!tates t#e
ent!re stu"ent $!%ecyc$e mana(ement %rom en&u!ry to a$umn!3 O%%er!n(s are !nte(rate"@ yetmo"u$ar !n nature@ '#!c# can #e$p automate certa!n %unct!ons '!t#!n t#e !nst!tut!on "epen"!n(
on pre%erence an" su!ta !$!ty3 W!t# 2re- u!$t us!ness processes an" easy-to-con%!(ure
so$ut!on capa !$!t!es@ !nst!tut!ons can start us!n( t#e system '!t# m!n!ma$ !mp$ementat!on
t!me an" e%%ort3 To maBe t#e "e$! ery process smoot# an" e%%ect! e %or t#e en" users@ some o%
t#e mo"u$es are a a!$a $e !n a Mana(e" Ser !ces mo"e$ as 'e$$3
Assessment -anagement5
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!ON Assessment Mana(ement so$ut!on pro !"es en"-to-en" ser !ces to con%!(ure an"
sc#e"u$e e am!nat!ons start!n( %rom creat!n( on$!ne an" o%%$!ne assessments to con%!(ur!n(
atten"ance@ #a$$ t!cBets@ creat!n( "r! es@ as 'e$$ as ass!(n!n( a test center an" e am s#!%t to
can"!"ates3 T#e so$ut!on a$so mana(es t#e "!str! ut!on o% &uest!on papers@ t#e E a$uat!on
process@ !n a""!t!on to 7esu$ts Mana(ement an" pro !"!n( Support Ser !ce3
Digital evaluation5
!ON D!(!ta$ E a$uat!on so$ut!on ena $es e a$uat!on o% p#ys!ca$ ans'er scr!pts ma"e a a!$a $e
!n e$ectron!c %orm3 A$$ t#e pa(es o% t#e ans'er scr!pt an" respect! e ta u$ate" reports can e
accesse" y t#e E a$uator@ Super !sor an" se$ect mem ers o% t#e Inst!tut!on3 T#e so$ut!on
com !nes ease o% manua$ e a$uat!on coup$e" '!t# %$e ! !$!ty@ accuracy an" e%%!cacy o% a
computer3
T#e manua$ e a$uat!on met#o" !s trans%orme" !nto a "!(!ta$ process start!n( '!t# e$ectron!c
scann!n( o% ans'er scr!pts@ '#ere stu"ent "eta!$s are masBe" '!t# %!ct!t!ous co"e@ &uest!ons
an" re$e ant marB!n( sc#eme !s up$oa"e" !nto t#e so$ut!on@ e a$uators ass!(ne" '!t#
!n"! !"ua$ ID an" pass'or"@ super !sor re !e's or re-ass!(ns e a$uate" scr!pts !n case o%
"!screpanc!es an" %!na$$y t#e o era$$ status o% ans'er scr!pts e a$uate"@ re !e'e" an" pen"!n(
are Bno'n t#rou(# t#e "eta!$e" 7eports %unct!ona$!ty3 T#us@ !ON D!(!ta$ E a$uat!on so$ut!on
%rom TCS a""resses t#e major !ssues o% t#e current e a$uat!on process $!Be m!ss!n( ans'er
scr!pts !n trans!t@ #uman error !n e a$uat!on@ ta u$at!on an" a'ar" $!sts an" most !mportant$y
stru(($!n( to announce resu$ts on t!me3
Demat ervice5
!ONDemat Ser !ces #e$ps un! ers!t!es !n $e era(!n( IT to mana(e t#e ent!re $!%ecyc$e o%
!ssu!n( cert!%!cates start!n( %rom stu"ent recor" co$$ect!on up to pr!nt!n( o% cert!%!cates@ a$on(
'!t# "!(!ta$ er!%!cat!on !n a secure"@ or(an!Ge"@ an" cost-e%%ect! e manner3
For stu"ent recor"s t#at 'ere ma!nta!ne" !n p#ys!ca$ re(!sters e%ore "!(!t!Gat!on@ t#e ser !ces
!nc$u"e scann!n( an" "!(!t!G!n( o% t#e recor"s a$on( '!t# secure" stora(e an" retr!e a$ on-
"eman"3 T#e so$ut!on maBes use o% "!(!ta$ encrypt!on tec#no$o(!es %or pro !"!n( t#e #!(#est
"e(ree o% Data Secur!ty an" Inte(r!ty a$on( '!t# !ncrease" spee" o% cert!%!cate !ssuance an"
"!(!ta$ er!%!cat!on3
Communicator5
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!ON Commun!cator !s t#e u$t!mate commun!cat!on too$ %or Sc#oo$s3 Ena $!n( t#e sc#oo$
a"m!n!strat!on an" teac#ers to connect '!t# parents an" stu"ents !n rea$-t!me@ %rom any'#ere@
!ON Commun!cator $ets you commun!cate a$most anyt#!n( - ne's@ a$erts@ ca$en"ar e ents@
p#oto(rap#s@ act! !t!es or #ome'orB@ %rom one@ easy-to-use system3 0! !n( you t#e %$e ! !$!ty
to commun!cate t#e 'ay you 'ant@ !t a$so !nc$u"es a user-%r!en"$y smartp#one app to access
a$$ t#e commun!cat!ons3 1e assure"@ t#at parents '!$$ ne er m!ss a commun!cat!on@ anymore3
%>am management5
TCS !ON E am Mana(ement So$ut!on "!(!t!Ges an" automates Un! ers!ty an" 1oar"s
E am!nat!on processes en"-to-en"@ pro !"!n( uncomprom!se" JSecrecyJ !n E am!nat!on
uest!on 2aper creat!on an" !ts "!str! ut!on to ar!ous e am!nat!on centers '!t# s!(n!%!cant
re"uct!on !n a"m!n!strat! e an" $o(!st!ca$ o er#ea"s an" costs3 Increas!n( automat!on at e ery
step $!Be enro$$!n( stu"ents %or eac# e am!nat!on@ sc#e"u$!n( o% e ams@ e am centre
mana(ement@ a$$ocat!n( stu"ents to e am centers@ ass!(n!n( su jects to %acu$t!es %or &uest!on
paper creat!on@ a$erts an" not!%!cat!ons to ar!ous staBe#o$"ers s!(n!%!cant$y re"uces manua$
e%%ort@ sc#e"u$e comp$!ance %a!$ures an" un%oreseen errors3
Course management5
!ON In-Course Assessment !s "es!(ne" to ena $e Inst!tut!ons "e$! er!n( 2ro%ess!ona$ #!(#er e"ucat!on an opportun!ty to $e era(e Computer 1ase" Test!n( to empo'er t#e!r teac#!n( sta%%
an" en#ance t#e a$ue "e$! ere" to stu"ents3 !ON In-Course Assessment a$$o's %or secure an"
co$$a orat! e content "e e$opment an" ett!n( y %acu$ty@ seam$ess "e$! ery o% tests an"
captur!n( o% stu"ent responses an" (enerat!on o% mu$t!p$e mean!n(%u$ staBe#o$"er spec!%!c
reports on stu"ent per%ormance "ata3
$ea#ing %>change5
!ON Learn!n( E c#an(e !s a co$$a orat! e Learn!n( 2$at%orm "es!(ne" to pro !"e an
!ncrementa$ an" !nteract! e $earn!n( en !ronment to ena $e an Inst!tute !ncrease part!c!pant
$earn!n( outcomes3 2o'ere" y est-!n-c$ass Learn!n( Mana(ement System )LMS/@ t#e
$earn!n( spaces are enr!c#e" '!t# a su!te o% co$$a orat!on too$s #e$p!n( $earners to $earn %rom
one anot#er !n a commun!ty structure3
%m8o9er $earning5
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!ON Learn!n( E c#an(e empo'ers teac#ers '!t# too$s to persona$!Ge $earn!n( %or e ery
$earner3 A teac#er can "es!(n = #ost course cata$o(ues@ en$!st stu"ents !nto $earner
commun!t!es an" "e$! er !ncrementa$ $earn!n( mater!a$ !n an !mmers! e 'ay us!n( !"eo@
au"!o@ po'er po!nt presentat!ons an" a ar!ety o% SCO7M Comp$!ant $earn!n( a!"s3 E terna$
$!nBs to 'or$"-c$ass $earn!n( mater!a$ !n t#e 'or$" '!"e 'e o% $earn!n( ena $es t#e $earner to
"!p !nto est resources on a su ject or top!c3 Teac#er can co-s#are "e$! ery respons! !$!t!es
'!t# In"ustry pro%ess!ona$s or su ject e perts to pro !"e re$e ancy to curr!cu$um an" meet
In"ustry emp$oya !$!ty e pectat!ons3
Personali
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True?Fa$se@ 7ea"!n( compre#ens!on/ an" enr!c# t#e tests y ta((!n( t#em to Sy$$a us@
D!%%!cu$ty Le e$ an" 1$ooms Ta onomy parameters3 Create uest!on 2apers ase" on 7u$e
En(!ne@ '#!c# %etc#es uest!ons ase" on uest!on Types@ Sy$$a us@ D!%%!cu$ty Le e$ an"
1$ooms Ta onomy 2arameters3
Analytics %ngine5
Ana$yGe t#e assessment resu$ts on ar!ous parameters an" pro !"e "as# oar" %or pro !"!n(
r!(#t $earn!n( !nter ent!ons to t#e part!c!pants o% t#e Course to !mpro e per%ormance@ #ence
c$os!n( t#e $earn!n(-$oop o% JLearn-Assess-Impro eJ3
Communication tools5
Le era(e Commun!cat!on %eatures )1anner? Mu$t!p$e In-Focus = Not!ce- oar" !tems? Not!%!cat!ons !a Ema!$?SMS/ to en(a(e an" !n%orm mem ers3 A$$ t#!s '!t# t#e %$e ! !$!ty to
commun!cate '!t# an !n"! !"ua$ or '!t# a$$ t#e mem ers o% a Commun!ty on (enera$
roa"casts3
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About Us
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%B P&'2&A--!"2
E ery on$!ne us!ness !s "!%%erent %rom ot#er@ e en s!m!$ar n!c#e 'e s!te3 TCS-!ON
In"!a un"erstan"s an" respect !n"! !"ua$ c$!ents nee"s an" pro !"e custom 'e
pro(ramm!n( ser !ces to ser e un!&ue 'e re&u!rements3 T#e!r team o% &ua$!%!e"
pro%ess!ona$s uses strate(!c p$ann!n( an" smart "e e$opment process '!t# &u!cB
operat!ona$$y e%%!c!ent an" pro"uct! e 'e s!te3 T#e!r a!m !s to pro !"e smart an"
pract!ca$ so$ut!ons %rom t#e!r 'e s!te3 TCS-!ON In"!a s custom 'e s!te pro(ramm!n(
ser !ces cause "ramat!c an" measurea $e (ro't# !n t#e!r 'e s!te3
+$A D% !2"
Creat! e #ea"s at TCS-!ON In"!a e p$o!t F$as# s ector tec#no$o(y to pro"uce@
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eaut!%u$ an" eye-catc#!n( "es!(ns %or you3 From F$as# !ntros@ anners $o(os an"
a" ert!sements to %u$$- $o'n F$as# 'e s!tes@ t#ey (! e our 'e s!te t#e !nteract! e
G!n( !t "es!res3 T#e!r creat! e F$as# "es!(n ser !ces #e$p trans%orm our 'e s!te !nto an
e%%ect! e commun!cat!on !nter%ace3
$'2' D% !2"
TCS-!ON In"!aJs $o(os are "es!(ne" to success%u$$y !ntro"uce your company to !ts
consumers an" compet!tors3 T#e!r $o(os are sty$!s# an" aest#et!c ear!n( super
co$or sc#eme an" (rap#!ca$ "eta!$!n( t#at create $on(-$ast!n( !mpress!ons3 T#e!r $o(o
"es!(n ser !ces (! e ran" a s!mp$e@ creat! e@ an" appea$!n( &ua$!ty capa $e o%
s!(n!%!cant !mpact on !e'ers3 T#ey (uarantee &ua$!ty $o(o "es!(n at m!n!ma$ rates
on$y at TCS-!ON In"!a3
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$'2' D% !2"
Bran#ing that #elivers your message 3
T#e &u!cBest 'ay to !ncrease t#e a$ue o% t#e company s ran" !s '!t# a 'e$$-!nte(rate"
"es!(n t#eme t#at !s cons!stent across t#e 'e as 'e$$ as on paper3 A (reat $o(o !s t#e
Beystone o% t#!s t#eme an" '!$$ attract t#e attent!on you 'ant an" "e$! er t#e sa$es t#at
company nee"s3
T#e!r $o(os "on t just create an !"ent!ty t#ey create a connect!on '!t# t#e au"!ence t#ey
speaB to an" "!%%erent!ate t#e pro"uct or ser !ce e!n( o%%ere"3 T#e!r $o(o an" ran"!n(s#ou$" a$$o' t#e!r customer to see you as pro !"!n( a "!st!nct so$ut!on to t#e!r un!&ue
pro $em3 A $o(o speaBs o$umes a out '#at t#e company "oes@ '#at !ts a$ues are an" '#at
!t can ac#!e e3 T#ey maBe sure t#e $o(o #as as muc# persona$!ty as you "o3
Lo(os t#at are "es!(ne" y TCS-!ON are as %o$$o's !n marc# *+,. -
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%&V!C% '+ C'-PA"*
T-$? @ C
At ION t#ey o%%er 2SD to CSS ?
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!mportant %or any us!ness $ooB!n( to e success%u$ on t#e Internet3 Let Su%%esCom e our
ecommerce so$ut!on pro !"er an" t#ey '!$$ e sure to #a e t#ousan"s o% sat!s%!e" customers3
T#e %ocus %or an ecommerce us!ness '!$$ e a 'e s!te !ncorporat!n( pro"uct !n%ormat!on
an" t#e a !$!ty to purc#ase or maBe or"ers on$!ne3 At Su%%es3Com t#ey use t#e $atest "ata ase
tec#no$o(y to create ecommerce so$ut!ons %or our ne' or e !st!n( us!ness3
%'
Searc# En(!ne Opt!m!Gat!on )SEO/ !s a tec#n!ca$ cum marBet!n( tec#n!&ue '!t# '#!c#
Su%%esCom ass!sts !ts c$!ents to rea$!Ge t#e!r "ream o% maB!n( t#e!r 'e s!tes ranB #!(# !n 'e
searc#es3 Searc# En(!ne Opt!m!Gat!on !s a process t#rou(# '#!c# 'e s!tes are #one" !n or"er
to maBe t#em !s! $e to on$!ne searc#ers3 It s 'ort# po!nt!n( out t#at SEO !s not a ma(!c
u$$etR t#at '!$$ necessar!$y "r! e tra%%!c an" sa$es t#rou(# t#e roo%3 SEO maBes t#e 'e s!testan" out
%rom t#e cro'"@ espec!a$$y !% your !n"ustry !s #!(#$y compet!t! e or !% you 'ant to attract a
capt! e au"!ence %or a popu$ar Bey'or" or Bey'or"s3
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'ur 8rocess involves the follo9ing crucial ste8s5
&esearch
T#e!r researc# team maBes a researc# us!n( ar!ous secon"ary researc# too$s to etter
un"erstan" t#e re&u!rements o% t#e c$!ent3 T#ey pre%er to seeB ass!stance %rom t#e c$!ent y
asB!n( t#em ar!ous &uest!ons re$ate" to t#e!r 1us!ness )rea" 'e s!te/@ Tar(et Au"!ence@
Strate(!c 8ey'or"s@ etc3 an" t#en t#ey %ormu$ate t#e c$ear an" measura $e o ject! e %or t#e
projects3
Analy
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hy Choose TC . i'"
!ON !s t#e company '#!c# (! es t#e (uarantee t#at 'e can #e$p your us!ness or or(an!Gat!on
to e t#e est y !mpro !n( your pro%!ta !$!ty an" e%%!c!ency3
T#ey un"erstan" t#at you cou$" e concerne" a out '#y you s#ou$" ut!$!Ge our ser !ces %or
your re&u!rements3 It !s ut natura$ t#at you $o(!ca$$y put t#ese &uest!ons to yourse$%3 In an era
'#ere t#ere are many ot#ers out t#ere o%%er!n( s!m!$ar ser !ces c$a!m!n( s!m!$ar a" anta(es@ !t
!s 'ort# cons!"er!n( t#e %o$$o'!n( po!nts3 At Su%%esCom 'e t#orou(#$y un"ertaBe t#e
%o$$o'!n( ($o a$$y acBno'$e"(e" a" ance" pract!ces3
$atest technologies
T#ey "ep$oy t#e $atest tec#no$o(!es to meet your unmatc#e" IT re&u!rements3
%>cellent su88ort
T#ey o%%er t#e most e ce$$ent support an" "e"!cate" ser !ce y a %u$$ %$e"(e" 'e e perts
team3
Best talent
T#ey #!re on$y t#e est ta$ent a a!$a $e !n t#e marBet an" ensure t#at 'e ut!$!Ge t#e cutt!n(
e"(e top ran(e met#o"o$o(!es an" tec#n!&ues to "e e$op an" e ecute your projects3
Pro#uctive 9or= environment
T#ey s#are a #ea$t#y 'orB en !ronment '#ere our emp$oyees cont!nua$$y $earn an" mature as
a #a !tua$ pract!ce3
trict a#herence to uality
Not on$y "o 'e str!ct$y a"#ere to t#e #!(#est !nternat!ona$ $e e$ &ua$!ty stan"ar"s@ ut t#ey
re(u$ar$y commun!cate '!t# our c$!ents an" Beep t#em a'are o% t#e $atest "e e$opments3
atisfie# Clientele
Nee"$ess to say@ t#ey #a e een a $e to "e e$op a $ar(e $!st o% sat!s%!e" c$!ents !n countr!es
aroun" t#e ($o e3 T#ey are rea$$y prou" to say t#at a$$ t#!s !s "ue to our #onest an" e&u!$atera$
comm!tment !n un"erstan"!n( t#e nee"s o% our c$!ents an" pro !"!n( t#em '!t# prec!se
so$ut!ons !n accor"ance '!t# t#e!r !n"! !"ua$ re&u!rements3
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AT C$!%"T A*
cott A#ams
7em!n" peop$e t#at pro%!t !s t#e "!%%erence et'een re enue an" e pense3 T#!s maBes you$ooB smart an" a$so s!(n!%!cant$y !ncreases your c#ances3
Tasia
Amr!n"er 'orBe" "!$!(ent$y unt!$ #e pro"uce" somet#!n( I 'as #appy '!t#3 We
commun!cate" o er SBype as o%ten as nee"e" an" somet!mes #e " 'orB a%ter#ours to (et t#e
re !s!ons "one e%ore #e 'ent #ome %or t#e "ay3 He s ery pat!ent an" t#at maBes $!%e easy
'#en youre try!n( to pro"uce somet#!n( 'on"er%u$3
Bran#on Doe
En(!neers $!Be to so$ e pro $ems3 I% t#ere are no pro $ems #an"!$y a a!$a $e@ t#ey '!$$ create
t#e!r o'n pro $ems3 T#at !s a ery Bno'n %act t#ere3
T %!& %&V!C%
T#e!r e-commerce so$ut!ons are t#e est $en" o%
ebsite Develo8ment
T#ere are many ar!at!ons o% passa(es o% LoremIpsum a a!$a $e@ ut t#e joy #a e su%%ere"
a$terat!on !n some %ormat@ y !njecte" #umour3
ebsite DesigningT#ere are many ar!at!ons o% passa(es o% LoremIpsum a a!$a $e@ ut t#e joy #a e su%%ere"
a$terat!on !n some %ormat@ y !njecte" #umor3
!nternet -ar=eting
T#ere are many ar!at!ons o% passa(es o% LoremIpsum a a!$a $e@ ut t#e joy #a e su%%ere"
a$terat!on !n some %ormat@ y !njecte" #umor3
ebsite -aintenance5
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Let Your We s!te SpeaB For You333 Mana(e It L!Be Your SALESMAN33
T#ey o%%er you %ast an" e%%!c!ent9ebsite maintenance ser !ces3 T#ey '!$$ up"ate@ en#ance@
acBup an" repa!r our s!te &u!cB$y an" e%%!c!ent$y@ '#!$e you can (o on runn!n( your
us!ness3 T#ey '!$$ ma!nta!n t#e &ua$!ty o% our 9ebsite @ Beep!n( !t %res# %or our return
c$!ents3 I% you nee" to a"" more !ma(es@ ne' anners@ ne' ca$en"ar e ents@ c#an(e t#e
content o% t#e s!te@ acBup
any !mportant "ata@ a"" ne' 8lug.in an" %unct!ona$!ty@ $et us "o !t %or you 3T#e!r 9ebsite
maintenance ser !ces are pro%ess!ona$ an" a%%or"a $e '!t# &u!cB turnaroun" an" "e$! ery t!mes3
T#ey a$'ays #a e custom so$ut!ons to 'e s!te %unct!ona$!ty pro $ems at an a%%or"a $e cost3 T#ey
o%%er pro%ess!ona$ #e$p '!t# any u(s or m!s%ortunes '#!c# may #appen to your s!te3 T#e!r
s!te mon!tor!n( !s e%%ect! e an" pro%ess!ona$3 As soon as t#ey rece! e ma!ntenance re&uests@
t#e s!tes (et up"ate" or %! e" r!(#t a'ay3 A$$ t#e 'e s!te "e e$opment an" ma!ntenance !s
e!n( per%orme" !n a secure 'ay@ '!t# non-"!sc$osure o% t#e pass'or"s or any s!te
!n%ormat!on3
ome other ervices they offer5
a/ 2#one 1us!ness App$!cat!on De e$opment
/ !2#one Mu$t!me"!a App$!cat!on De e$opmentc/ !2#one Internet Apps De e$opment"/ !2#one 02S 1ase" App$!cat!on De e$opmente/ !2#one Enterta!nment App$!cat!on De e$opment%/ !2#one 0am!n( App$!cat!on De e$opment3
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!"T&'DUCT!'"
'&1!"2 CAP!TA$
or=ing Ca8ital is the $ife.Bloo# an# Controlling "erve Center of a
business/
No one can start us!ness or run an enterpr!se '!t#out a"e&uate %un"s3 E ery us!ness
re&u!res money to start an" to carry out !ts "ay-to-"ay operat!ons as re&u!rement o% amount o%
cap!ta$ "epen"s on s!Ge an" nature o% us!ness3 To %u$%!$ "ay to "ay re&u!rement suc# as
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purc#ase o% current assets or maeBeta $e secur!t!es '#!c# can e eas!$y con erte" !nto cas#@
purc#ase o% ra' mater!a$@ payment o% 'a(es an" ot#er rout!ne e penses@ an enterprenuer #as
re&u!re" 'orB!n( cap!ta$3 T#ose %!nance '#!c# are nee"e" !n s#ort term to carry on operat!n(
an" s#ort term act! !t!es !s Bno'n as WorB!n( Cap!ta$@ '#!$e $on( term %!nance '#!c# !s
re&u!re" to esta $!s# us!ness t#rou(# purc#ase o% %! e" assets suc# as 2$ant = Mac#!nery@
Lan" an" 1u!$"!n(@ etc@3 !s ca$$e" F! e" Cap!ta$3
WorB!n( cap!ta$ !s t#e "!%%erence et'een resources !n cas# or rea"!$y con ert! $e !nto cas#
)current assets/ an" Current L!a !$!t!es3 0enera$$y t#e enterpr!se '#!c# #as #!(#er amounts o%
'orB!n( cap!ta$ !s etter pos!t!one" %or success3 T#e company nee"s an a"e&uate 'orB!n(
cap!ta$ re&u!rement@ t#e m!n!mum amount o% resources t#at re&u!re to e%%ect! e$y co er!n( t#e
cost an" e penses necessary to operate t#e us!ness3 T#ere s#ou$" e matc# et'een assetsan" $!a !$!t!es o% t#e company3 I% a company #as more "e ts t#an current assets@ t#en 'orB!n(
cap!ta$ 'ou$" e e presse" !n ne(at! e num er@ '#ere as !% assets are more t#an $!a !$!t!es@ a
company #as pos!t! e 'orB!n( cap!ta$3
A$$ suc# matc# '!$$ e poss! $e '#en t#ere s#ou$" e a proper trans%ormat!on o% sources %rom
one to ot#er re%erre" to as C!rcu$at!n( AssetsR ecause o% t#e!r cyc$!ca$ nature3 Mana(ement
o% 'orB!n( cap!ta$ !s muc# !mportant ecause s#orta(e as 'e$$ as e cess o% !t may cause t#e
!((est %a!$ure o% us!ness !n recent t!mes3 Mean'#!$e@ t#e re$at!ons#!p et'een %!rm s s#ort
term assets an" $!a !$!t!es !s cons!"ere" to e 'orB!n( cap!ta$ mana(ement3
T#e rat!ona$e e#!n" t#!s project stu"y o% WorB!n( Capta$ Mana(ementR !s to "eterm!ne t#e
amount o% 'orB!n( cap!ta$ re&u!rement on t#e as!s o% ar!ou!s %!nanc!a$ rat!os '#!c# #e$p a
us!ness man to taBe a"e&uate "ec!s!on t#rou(# proper p$ann!n( an" contro$ o er us!ness
act! !t!es3 T#e project a$so "epen"s on stu"y o% c#an(es !n t#e uses an" sources o% 'orB!n(
cap!ta$ to un"erstan" t#at #o' a mana(er can !ncrease t#e e%%!c!ency o% us!ness !n
mana(ement o% 'orB!n( cap!ta$3
For a mana(er !t !s ery !mportant to %! an a"e&uate amount o% 'orB!n( cap!ta$ as o%
c!rcu$at!n( assets '#!c# re o$ es as %ast as per t#e!r cyc$!ca$ nature3 For !$$ustrat!on@ !n a
us!ness enterpr!se@ !n!t!a$$y cas# emp$oye" to purc#ase !n entory@ '#!c# m!(#t e !n cas# or
on cre"!t3 I% t#e !n entory so$" on cre"!t@ !t turne" !nto rece! a $es@ "e tors3 An" once t#e
rece !a $es are co$$ecte"@ t#ey ecome cas# an" %urt#er re!n este" %or purc#ase o% a""!t!ona$
!n entory or as part o% reta!ne" earn!n(3
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T#e a"e&uate 'orB!n( cap!ta$ re&u!rement !s t#e m!n!mum amount o% resources re&u!res to
e%%ect! e$y co er costs an" e penses necessary to operate t#e us!ness an" mana(ement o% !t
!s nee"e" to "eterm!ne proper %!nanc!a$ structure@ taB!n( a"e&uate "ec!s!on on !ts re&u!rement
o% 'orB!n( cap!ta$@ source o% %!nance %rom '#ere %un"s to procure@ components an" %actors o%
a%%ect!n( !t '#!c# re&u!re %or prompt payment@ re(u$ar supp$y o% ra' mater!a$3 It must ensure
t#at t#ere #as su%%!c!ent 'orB!n( cap!ta$ t#at 'ou$" ear a$$ t#e cas# %$o' pro $ems suc# as
"e$ay !n payment to supp$!ers '#!c# e$!m!nate t#e c$a!m o% "!scounts %or prompt payment3 In
recent t!mes@ to run a us!ness !s most cruc!a$ tasB %or an entrepreneur ecause !t !s not
su%%!c!ent to #a e money !n #an" o% us!nessman@ ut proper mana(ement o% cas#-%$o's an"
returns '#!c# #e$p to "eterm!ne an opt!mum a$ance o% !t !s nee"e" '#!c# a$$o's t#e
us!ness to meet "ay to "ay e pense3 T#ere s#ou$" e an opt!mum a$ance o% cas# !n %!rm to
ma!nta!n a soun" $!&u!"!ty pos!t!on to sett$e "ues !n t!me %u$%!$$ transact!ona$ act! !t!es an"
re"uce opportun!ty cost3
So@ t#!s project concentrates on 'orB!n( cap!ta$@ !ts %actors@ 'ay to mana(e !t a"e&uate$y@ an"
!ts $!nBe" components '#!c# #e$p a us!nessman to a!r us!ness %unct!on!n( proper$y '!t#
ma !mum return at r!(#t t!me '!t# r!(#t opportun!ty3 It #e$ps a mana(er to Bno' '#at !s t#e
reason to ma!nta!n a"e&uate 'orB!n( cap!ta$ re&u!rements@ #o' !t s#ou$" e "one !n %orm o%
cas#@ rece! a $es an" !n entory an" a$so "eterm!ne t#e !mpact o% !t3
AT ! '&1!"2 CAP!TA$
WorB!n( cap!ta$ re%ers to t#e !n estment y t#e company !n s#ort terms assets suc# as cas#@
marBeta $e secur!t!es3 Net current assets or net 'orB!n( cap!ta$ re%ers to t#e current assets $ess
current $!a !$!t!es3Sym o$!ca$$y@ !t means@
"et Current Assets Current Assets.Current $iabilities3
In account!n(@ WorB!n( cap!ta$ !s t#e "!%%erence et'een t#e !n%$o' an" out%$o' o% %un"s3 In
ot#er 'or"s@ !t !s t#e net cas# !n%$o'3 It !s "e%!ne" as t#e e cess o% current assets o er current
$!a !$!t!es an" pro !s!ons3 In ot#er 'or"s@ !t !s net current assets or net 'orB!n( cap!ta$3R
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WorB!n( cap!ta$ represents t#e tota$ o% a$$ current assets3 In ot#er 'or"s !t !s t#e 0ross
'orB!n( cap!ta$@ !t !s a$so Bno'n as C!rcu$at!n( cap!ta$ or Current cap!ta$ %or current assets
are rotat!n( !n t#e!r nature3
A stu"y o% 'orB!n( cap!ta$ !s o% major !mportance to !nterna$ an" e terna$ ana$ys!s ecause o% !ts c$ose re$at!ons#!p '!t# t#e "ay-to-"ay operat!ons o% a us!ness3 WorB!n( Cap!ta$ !s t#e
port!on o% t#e assets o% a us!ness '#!c# are use" on or re$ate" to current operat!ons@ an"
represente" at any one t!me y t#e operat!n( cyc$e o% suc# !tems as a(a!nst rece! a $es@
!n entor!es o% ra' mater!a$s@ stores@ 'orB !n process an" %!n!s#e" (oo"s@ merc#an"!se@ notes
or !$$ rece! a $es an" cas#3
WorB!n( cap!ta$ compr!ses current assets '#!c# are "!st!nct %rom ot#er assets3 In t#e %!rst
!nstance@ current assets cons!st o% t#ese assets '#!c# are o% s#ort "urat!on3WorB!n( cap!ta$ may e re(ar"e" as t#e $!%e $oo" o% a us!ness3 Its e%%ect! e pro !s!on can "o
muc# to ensure t#e success o% a us!ness '#!$e !ts !ne%%!c!ent mana(ement can $ea" not on$y
to $oss o% pro%!ts ut a$so to t#e u$t!mate "o'n%a$$ o% '#at ot#er'!se m!(#t e cons!"ere" as a
prom!s!n( concern3
The fun#s re uire# an# ac uire# by a business may be investe# to t9o ty8es of
assets5
43+i>e# Assets3
63 Current Assets
+i>e# assets are t#ose '#!c# y!e$" t#e returns !n t#e "ue course o% t!me3 T#e ar!ous
"ec!s!ons $!Be !n '#!c# %! e" assets %un"s s#ou$" e !n este" an" #o' muc# s#ou$" e
!n este" !n t#e %! e" assets etc3 are !n t#e %orm o% cap!ta$ u"(et!n( "ec!s!ons3 T#!s can e
sa!" to e %! e" cap!ta$ mana(ement3
Current Assets are re&u!re" to ensure smoot# an" %$uent us!ness operat!ons an" can e
sa!" to e $!%e $oo" o% t#e us!ness3 T#ere are t'o concepts o% 'orB!n( cap!ta$ 0ross an"
Net3 0ross 'orB!n( cap!ta$ re%ers to (ross current assets3 Net 'orB!n( cap!ta$ re%ers to t#e
"!%%erence et'een current assets an" current $!a !$!t!es3 T#e term current assets re%ers tot#ose assets #e$" y t#e us!ness '#!c# can e con erte" !nto cas# '!t#!n a s#ort per!o" o%
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t!me o% say one year@ '!t#out re"uct!on !n a$ue3 T#e ma!n types o% current assets are stocB@
rece! a $es an" cas#3 T#e term current $!a !$!t!es re%er to t#ose $!a !$!t!es@ '#!c# are to e pa!"
o%% "ur!n( t#e course o% us!ness@ '!t#!n a s#ort per!o" o% t!me say one year3 T#ey are
e pecte" to e pa!" out o% current assets or earn!n(s o% t#e us!ness3 T#e current $!a !$!t!es
ma!n$y cons!st o% sun"ry cre"!tors@ !$$ paya $e@ anB o er"ra%t or cas# cre"!t@ outstan"!n(
e penses etc3
$!:U!D!T* Vs P&'+!TAB!$!T*5 &! 1.&%TU&" T&AD% '++
Anot#er !mportant aspect o% a 'orB!n( cap!ta$ po$!cy !s to ma!nta!n an" pro !"e su%%!c!ent$!&u!"!ty to t#e %!rm3 L!Be t#e most corporate %!nanc!a$ "ec!s!ons@ t#e "ec!s!on on #o' muc#
'orB!n( cap!ta$ e ma!nta!ne" !n o$ es a tra"e o%%- #a !n( a $ar(e net 'orB!n( cap!ta$ may
re"uce t#e $!&u!"!ty r!sB %ace" y a %!rm@ ut !t can #a e a ne(at! e e%%ect on t#e cas# %$o's3
T#ere%ore@ t#e net e%%ect on t#e a$ue o% t#e %!rm s#ou$" e use" to "eterm!ne t#e opt!ma$
amount o% 'orB!n( cap!ta$3 Soun" 'orB!n( cap!ta$ !n o$ es t'o %un"amenta$ "ec!s!ons %or
t#e %!rm3
T#ey are t#e "eterm!nat!on o%
T#e opt!ma$ $e e$ o% !n estments !n current assets3
T#e appropr!ate m! o% s#ort-term an" $on(-term %!nanc!n( use" to support t#!s
!n estment !n current assets@ a %!rm s#ou$" "ec!"e '#et#er or not !t s#ou$" use s#ort-
term %!nanc!n(3 I% s#ort-term %!nanc!n( #as to e use"@ t#e %!rm must "eterm!ne !ts
port!on !n tota$ %!nanc!n(3 S#ort-term %!nanc!n( may e pre%erre" o er $on(-term
%!nanc!n( %or t'o reasons
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T#e cost a" anta(e
F$e ! !$!ty
C$A !+!CAT!'" '+ '&1!"2 CAP!TA$
WorB!n( cap!ta$ may e c$ass!%!e" !n to 'ays
E 'n the basis of conce8t3
'n the basis of time 3
On t#e as!s o% concept 'orB!n( cap!ta$ can e c$ass!%!e" as (ross 'orB!n( cap!ta$ an" net
'orB!n( cap!ta$3 On t#e as!s o% t!me@ 'orB!n( cap!ta$ may e c$ass!%!e" as
E Permanent or fi>e# 9or=ing ca8ital3
E Tem8orary or variable 9or=ing ca8ital
P%&-A"%"T '& +!F%D '&1!"2 CAP!TA$5
2ermanent or %! e" 'orB!n( cap!ta$ !s m!n!mum amount '#!c# !s re&u!re" to ensure e%%ect! e
ut!$!Gat!on o% %! e" %ac!$!t!es an" %or ma!nta!n!n( t#e c!rcu$at!on o% current assets3 E ery %!rm
#as to ma!nta!n a m!n!mum $e e$ o% ra' mater!a$@ 'orB- !n-process@ %!n!s#e" (oo"s an" cas#
a$ance3 T#!s m!n!mum $e e$ o% current assets !s ca$$e" permanent or %! e" 'orB!n( cap!ta$ as
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t#!s part o% 'orB!n( !s permanent$y $ocBe" !n current assets3 As t#e us!ness (ro' t#e
re&u!rements o% 'orB!n( cap!ta$ a$so !ncreases "ue to !ncrease !n current assets3
T%-P'&A&* '& VA&!AB$% '&1!"2 CAP!TA$5
Temporary or ar!a $e 'orB!n( cap!ta$ !s t#e amount o% 'orB!n( cap!ta$ '#!c# !s re&u!re" to
meet t#e seasona$ "eman"s an" some spec!a$ e !(enc!es3 :ar!a $e 'orB!n( cap!ta$ can %urt#er
e c$ass!%!e" as seasona$ 'orB!n( cap!ta$ an" spec!a$ 'orB!n( cap!ta$3 T#e cap!ta$ re&u!re" to
meet t#e seasona$ nee" o% t#e enterpr!se !s ca$$e" seasona$ 'orB!n( cap!ta$3 Spec!a$ 'orB!n(
cap!ta$ !s t#at part o% 'orB!n( cap!ta$ '#!c# !s re&u!re" to meet spec!a$ e !(enc!es suc# as
$aunc#!n( o% e tens! e marBet!n( %or con"uct!n( researc#@ etc3
'&1!"2 CAP!TA$ C'-P'"%"T
E Cash an# e uivalents5 . T#!s most $!&u!" %orm o% 'orB!n( cap!ta$ re&u!res constant
super !s!on3 A (oo" cas# u"(et!n( an" %orecast!n( system pro !"es ans'ers to Bey
&uest!ons suc# as !s t#e cas# $e e$ a"e&uate to meet current e penses as t#ey come
"ue W#at !s t#e t!m!n( re$at!ons#!p et'een cas# !n%$o' an" out%$o' W#en '!$$
peaB cas# nee"s occur W#en an" #o' muc# anB orro'!n( '!$$ e nee"e" to meetany cas# s#ort%a$$s W#en '!$$ repayment e e pecte" an" '!$$ t#e cas# %$o' co er !t
E Accounts receivable5 . Many us!nesses e ten" cre"!t to t#e!r customers3 I% t#ey "o@
!s t#e amount o% accounts rece! a $e reasona $e re$at! e to sa$es Ho' rap!"$y are
rece! a $es e!n( co$$ecte" W#!c# customers are s$o' to pay an" '#at s#ou$" e
"one a out t#em
E !nventory5 . In entory !s o%ten as muc# as 6+ percent o% a %!rm s current assets@ so
natura$$y !t re&u!res cont!nua$ scrut!ny3 Is t#e !n entory $e e$ reasona $e compare"
'!t# sa$es an" t#e nature o% your us!ness W#at s t#e rate o% !n entory turno er
compare" '!t# ot#er compan!es !n your type o% us!ness
E Accounts 8ayable5 . F!nanc!n( y supp$!ers !s common !n sma$$ us!ness !t !s one o%
t#e major sources o% %un"s %or entrepreneurs3 Is t#e amount o% money o'e" to
supp$!ers reasona $e re$at! e to '#at you purc#ase W#at !s your %!rm s payment
po$!cy "o!n( to en#ance or "etract %orm your cre"!t rat!n(
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E Accrue# e>8enses an# ta>es 8ayable5 . T#ese are o $!(at!ons o% your company at
any (! en t!me an" represent a %uture out%$o' o% cas#3
"%%D +'& '&1!"2 CAP!TA$
WorB!n( cap!ta$ may e re(ar"e" as t#e $!%e $oo" o% t#e us!ness3 W!t#out !nsu%%!c!ent
'orB!n( cap!ta$@ any us!ness or(an!Gat!on cannot run smoot#$y or success%u$$y3 In t#e
us!ness t#e WorB!n( cap!ta$ !s compara $e to t#e $oo" o% t#e #uman o"y3 T#ere%ore t#e
stu"y o% 'orB!n( cap!ta$ !s o% major !mportance to t#e !nterna$ an" e terna$ ana$ys!s ecause
o% !ts c$ose re$at!ons#!p '!t# t#e current "ay to "ay operat!ons o% a us!ness3 T#e !na"e&uacy
or m!smana(ement o% 'orB!n( cap!ta$ !s t#e $ea"!n( cause o% us!ness %a!$ures3
T#e nee" o% (ross 'orB!n( cap!ta$ or current assets cannot e o eremp#as!Ge"3 T#e o ject o%
any us!ness !s to earn pro%!ts3 T#e ma!n %actor a%%ect!n( t#e pro%!ts !s t#e ma(n!tu"e o% sa$es
o% t#e us!ness3 1ut t#e sa$es cannot e con erte" !nto cas# !mme"!ate$y3 T#ere !s a t!me $a(
et'een t#e sa$e o% (oo"s an" rea$!Gat!on o% cas#3 T#ere !s a nee" o% 'orB!n( cap!ta$ !n t#e
%orm o% current assets to %!$$ up t#!s t!me $a(3 Tec#n!ca$$y@ t#!s !s ca$$e" as operat!n( cyc$e or
'orB!n( cap!ta$ cyc$e@ '#!c# !s t#e #eart o% nee" %or 'orB!n( cap!ta$3 T#!s 'orB!n( cap!ta$
cyc$e can e "escr! e" !n t#e %o$$o'!n( 'or"s3 I% t#e company #as a certa!n amount o% cas#@ !t
'!$$ e re&u!re" %or purc#as!n( t#e ra' mater!a$ t#ou(# some ra' mater!a$ may e a a!$a $e
on cre"!t as!s3 T#en t#e company #as to spen" some amount %or $a our an" %actory
o er#ea"s to con ert t#e ra' mater!a$ !n 'orB !n pro(ress@ an" u$t!mate$y %!n!s#e" (oo"s3
T#ese %!n!s#e" (oo"s '#en so$" on cre"!t as!s (et con erte" !n t#e %orm o% sun"ry "e tors3
Sun"ry "e tors are con erte" !n cas# on$y a%ter t#e e p!ry o% cre"!t per!o"3 T#us@ t#ere !s a
cyc$e !n '#!c# t#e or!(!na$$y a a!$a $e cas# !s con erte" !n t#e %orm o% cas# a(a!n ut on$y
a%ter %o$$o'!n( t#e sta(es o% ra' mater!a$@ 'orB !n pro(ress@ %!n!s#e" (oo"s an" sun"ry
"e tors3 T#us@ t#ere !s a t!me (ap %or t#e or!(!na$ cas# to (et con erte" !n %orm o% cas# a(a!n3
WorB!n( Cap!ta$ nee"s o% company ar!se to co er t#e re&u!rement o% %un"s "ur!n( t#!s t!me
(ap@ an" t#e &uantum o% 'orB!n( cap!ta$ nee"s ar!es as per t#e $en(t# o% t#!s t!me (ap3
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T#us@ some amount o% %un"s !s $ocBe" !n ra' mater!a$s@ 'orB !n pro(ress@ %!n!s#e" (oo"s@
sun"ry "e tors an" "ay-to-"ay re&u!rements3 Ho'e er some part o% t#ese current assets may
e %!nance" y t#e current $!a !$!t!es a$so3 E3(3 some ra' mater!a$ may e a a!$a $e on cre"!t
as!s@ a$$ t#e e penses nee" not e pa!" !mme"!ate$y@ 'orBers are a$so to e pa!" per!o"!ca$$y
etc3 1ut st!$$ t#e amounts re&u!re" to e !n este" !n t#ese current assets !s a$'ays #!(#er t#an
t#e %un"s a a!$a $e %rom current $!a !$!t!es3 T#!s !s prec!se reason '#y t#e nee"s %or 'orB!n(
cap!ta$ ar!se3
From t#e F!nanc!a$ mana(ement po!nt o% !e'@ t#e nature o% %! e" assets an" current assets
"!%%er %rom eac# ot#er--
,3 T#e %! e" assets are re&u!re" to e reta!ne" !n t#e us!ness o er a per!o" o% t!me an" t#ey
y!e$" t#e returns o er t#e!r $!%e@ '#ereas t#e current assets $oose t#e!r !"ent!ty o er a s#ort
per!o" o% t!me@ say one year3
*3 In t#e case o% current assets@ !t !s a$'ays necessary to str!Be a proper a$ance et'een t#e
$!&u!"!ty an" pro%!ta !$!ty pr!nc!p$es@ '#!c# !s not t#e case '!t# %! e" assets3 E3(3 I% t#e s!Ge o%
current assets !s $ar(e@ !t !s a$'ays ene%!c!a$ %rom t#e $!&u!"!ty po!nt o% !e' as !t ensures
smoot# an" %$uent us!ness operat!ons3 Su%%!c!ent ra' mater!a$ !s a$'ays a a!$a $e to cater to
t#e pro"uct!on nee"s@ su%%!c!ent %!n!s#e" (oo"s are a a!$a $e to cater to any B!n" o% "eman" o% customers@ $! era$ cre"!t per!o" can e o%%ere" to t#e customers to !mpro e t#e sa$es an"
su%%!c!ent cas# !s a a!$a $e to pay o%% t#e cre"!tors an" so on3
Ho'e er@ !% t#e !n estment !n current assets !s more t#an '#at !s !"ea$$y re&u!re"@ !t a%%ects
t#e pro%!ta !$!ty@ as !t may not e a $e to y!e$" su%%!c!ent rate o% return on !n estment3 On t#e
ot#er #an"@ !% t#e s!Ge o% current assets !s too sma$$@ !t a$'ays !n o$ es t#e r!sB o% %re&uent
stocB out@ !na !$!ty o% t#e company to pay !ts "ues !n t!me etc3 As suc#@ t#e !n estment !n
current assets s#ou$" e opt!mum3 Hence@ !t !s necessary to mana(e t#e !n"! !"ua$
components o% current assets !n a proper 'ay3 T#us@ 'orB!n( cap!ta$ mana(ement re%ers to
proper a"m!n!strat!on o% a$$ aspects o% current assets an" current $!a !$!t!es3 WorB!n( Cap!ta$
Mana(ement !s concerne" '!t# t#e pro $ems ar!s!n( out o% t#e attempts to mana(e current
assets@ current $!a !$!t!es an" !nter-re$at!ons#!p et'een t#em3 T#e !ntent!on !s not to
ma !m!Ge t#e !n estment !n 'orB!n( cap!ta$ nor !s !t to m!n!m!Ge t#e same3 T#e !ntent!on !s to
#a e opt!mum !n estment !n 'orB!n( cap!ta$3 In ot#er 'or"s@ !t can e sa!" t#at t#e a!m o%
'orB!n( cap!ta$ mana(ement !s to #a e m!n!mum !n estment !n 'orB!n( cap!ta$ '!t#out
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a%%ect!n( t#e re(u$ar an" smoot# %$o' o% operat!ons3 T#e $e e$ o% current assets to e
ma!nta!ne" s#ou$" e su%%!c!ent enou(# to co er !ts current $!a !$!t!es '!t# a reasona $e
mar(!n o% sa%ety3
'&1!"2 CAP!TA$ C*C$%
WorB!n( cap!ta$ cyc$e !n"!cates t#e $en(t# o% t!me et'een a %!rm s pay!n( %or mater!a$s
enter!n( !nto stocB an" rece! !n( t#e cas# %rom sa$e o% %!n!s#e" (oo"s3 In a manu%actur!n(
%!rm@ t#e "urat!on o% t!me re&u!re" to comp$ete t#e se&uence o% e ents !s ca$$e" operat!n(
cyc$e3
In case o% a manu%actur!n( company@ t#e operat!n( cyc$e !s t#e $en(t# o% t!me necessary to
comp$ete t#e %o$$o'!n( cyc$e o% e ents Q
Con ers!on o% cas# !nto ra' mater!a$s
Con ers!on o% ra' mater!a$s !nto 'orB-!n-pro(ress
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Con ers!on o% 'orB-!n-pro(ress !nto %!n!s#e" (oo"s
Con ers!on o% %!n!s#e" (oo"s !nto accounts rece! a $es
Con ers!on o% accounts rece! a $e !nto cas#
T#e a o e operat!n( cyc$e !s repeate" a(a!n an" a(a!n o er t#e per!o" "epen"!n( upon t#e
nature o% t#e us!ness an" type o% pro"uct etc3 t#e "urat!on o% t#e operat!n( cyc$e %or t#e
purpose o% est!mat!n( 'orB!n( cap!ta$ !s e&ua$ to t#e sum o% "urat!on a$$o'e" y t#e
supp$!ers3
WorB!n( cap!ta$ cyc$e can e e presse" as
&G G+GDGC
W#ere@
7 - ra' mater!a$ stora(e per!o" V a (3 stocB o% ra' mater!a$ ? a (3 cost o% pro"uct!on per "ay
W Q 'orB !n pro(ress #o$"!n( per!o" V a (3 'orB !n pro(ress !n entory ? a (3 cost o%
pro"uct!on per "ay
F Q %!n!s#e" (oo"s stora(e per!o" V a (3 stocB o% %!n!s#e" (oo"s ? a (3 cost o% (oo"s so$" per
"ay
D Q "e tors co$$ect!on per!o" V a (3 ooB "e ts ? a (3 cre"!t sa$es per "ay
C Q cre"!t per!o" a a!$e" V a (3 tra"e
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'&1!"2 CAP!TA$ -A"A2%-%"T
To start any us!ness@ F!rst o% a$$ 'e nee" %!nance an" t#e success o% t#at us!ness ent!re$y
"epen"s on t#e proper mana(ement o% "ay-to-"ay %!nance an" t#e mana(ement o% t#!s s#ortterm cap!ta$ or %!nance o% t#e us!ness !s ca$$e" WorB!n( Cap!ta$ Mana(ement3
WorB!n( Cap!ta$ !s t#e Bey "!%%erence et'een t#e $on( term %!nanc!a$ mana(ement an" s#ort
term %!nanc!a$ mana(ement !n terms o% t#e t!m!n( o% cas#3 WorB!n( cap!ta$ mana(ement !s a
s#ort term %!nanc!a$ mana(ement3 WorB!n( cap!ta$ mana(ement !s concerne" '!t# t#e
pro $ems t#at ar!se !n attempt!n( to mana(e t#e current assets@ t#e current $!a !$!t!es = t#e
!nter re$at!ons#!p t#at e !sts et'een t#em3 T#e current assets re%er to t#ose assets '#!c# can
e eas!$y con erte" !nto cas# !n or"!nary course o% us!ness@ '!t#out "!srupt!n( t#e operat!ons
o% t#e %!rm3
or=ing ca8ital management or short.term financial management !s a s!(n!%!cant %acet
o% %!nanc!a$ mana(ement3 It !s !mportant "ue to * reasons
In estment !n current assets represents a su stant!a$ port!on o% tota$ !n estment
In estment !n current assets an" t#e $e e$ o% current $!a !$!t!es #a e to e (eare"
&u!cB$y to c#an(es !n sa$es3
WorB!n( cap!ta$ !n o$ es act! !t!es suc# as arran(!n( s#ort-term %!nance@ ne(ot!at!n(
%a ora $e cre"!t terms@ contro$$!n( t#e mo ement o% cas#@ a"m!n!strat!n( accounts
rece! a $es@ an" mon!tor!n( t#e !n estment !n !n entor!es a$so taBe a (reat "ea$ o% t!me3
Mana(ement o% 'orB!n( cap!ta$ !s concerne" '!t# t#e pro $em t#at ar!ses !n attempt!n( tomana(e t#e current assets@ current $!a !$!t!es3 T#e as!c (oa$ o% 'orB!n( cap!ta$ mana(ement
!s to mana(e t#e current assets an" current $!a !$!t!es o% a %!rm !n suc# a 'ay t#at a
sat!s%actory $e e$ o% 'orB!n( cap!ta$ !s ma!nta!ne"@ !3e3 !t !s ne!t#er a"e&uate nor e cess! e as
ot# t#e s!tuat!ons are a" %or any %!rm3 T#ere s#ou$" e no s#orta(e o% %un"s an" a$so no
'orB!n( cap!ta$ s#ou$" e !"ea$3 WO78IN0 CA2ITAL MANA0EMENT 2OLICES o% a
%!rm #as a (reat on !ts pro a !$!ty@ $!&u!"!ty an" structura$ #ea$t# o% t#e or(an!Gat!on3 So
'orB!n( cap!ta$ mana(ement !s t#ree "!mens!ona$ !n nature as
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,3 It concerne" '!t# t#e %ormu$at!on o% po$!c!es '!t# re(ar" to pro%!ta !$!ty@ $!&u!"!ty
an" r!sB3
*3 It !s concerne" '!t# t#e "ec!s!on a out t#e compos!t!on an" $e e$ o% current
assets3
3 It !s concerne" '!t# t#e "ec!s!on a out t#e compos!t!on an" $e e$ o% current
$!a !$!t!es3
!2"!+!CA"C% '+ '&1!"2 CAP!TA$ -A"A2%-%"T
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The management of 9or=ing ca8ital is im8ortant for several reasons5
For one t#!n(@ t#e current assets o% a typ!ca$ manu%actur!n( %!rm account %or #a$%o% !ts
tota$ assets3 For a "!str! ut!on company@ t#ey account %or e en more3
WorB!n( cap!ta$ re&u!res cont!nuous "ay to "ay super !s!on3 WorB!n( cap!ta$ #ast#e
e%%ect on companyJs r!sB@ return an" s#are pr!ces3T#ere !s an !ne !ta $e re$at!ons#!p et'een sa$es (ro't# an" t#e $e e$ o% current
assets3
T#e tar(et sa$es $e e$ can e ac#!e e" on$y !% supporte" y a"e&uate'orB!n( cap!ta$
Ine%%!c!ent 'orB!n( cap!ta$ mana(ement may $ea" to !nso$ ency
!-P'&TA"C% '& ADVA"TA2% '+ AD%:UAT% '&1!"2
CAP!TA$
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olvency of the business A"e&uate 'orB!n( cap!ta$ #e$ps !n ma!nta!n!n( t#e so$ ency
o% t#e us!ness y pro !"!n( un!nterrupte" o% pro"uct!on3
2oo#9ill Su%%!c!ent amount o% 'orB!n( cap!ta$ ena $es a %!rm to maBe prompt
payments an" maBes an" ma!nta!n t#e (oo"'!$$3
%asy loans A"e&uate 'orB!n( cap!ta$ $ea"s to #!(# so$ ency an" cre"!t stan"!n( can
arran(e $oans %rom anBs an" ot#er on easy an" %a ora $e terms3
Cash Discounts A"e&uate 'orB!n( cap!ta$ a$so ena $es a concern to a a!$ cas#
"!scounts on t#e purc#ases an" #ence re"uces cost3
&egular u88ly of &a9 -aterial Su%%!c!ent 'orB!n( cap!ta$ ensures re(u$ar supp$y
o% ra' mater!a$ an" cont!nuous pro"uct!on3
&egular Payment 'f alaries, ages An# 'ther Day T' Day Commitments It
$ea"s to t#e sat!s%act!on o% t#e emp$oyees an" ra!ses t#e mora$e o% !ts emp$oyees@
!ncreases t#e!r e%%!c!ency@ re"uces 'asta(e an" costs an" en#ances pro"uct!on an"
pro%!ts3
%>8loitation of +avorable -ar=et Con#itions I% a %!rm !s #a !n( a"e&uate 'orB!n(
cap!ta$ t#en !t can e p$o!t t#e %a ora $e marBet con"!t!ons suc# as purc#as!n( !ts
re&u!rements !n u$B '#en t#e pr!ces are $o'er an" #o$"!n(s !ts !n entor!es %or #!(#er pr!ces3
Ability to +ace Crises A concern can %ace t#e s!tuat!on "ur!n( t#e "epress!on3
:uic= An# &egular &eturn 'n !nvestments Su%%!c!ent 'orB!n( cap!ta$ ena $es a
concern to pay &u!cB an" re(u$ar o% "! !"en"s to !ts !n estors an" (a!ns con%!"ence o%
t#e !n estors an" can ra!se more %un"s !n %uture3
igh -orale A"e&uate 'orB!n( cap!ta$ r!n(s an en !ronment o% secur!t!es@
con%!"ence@ #!(# mora$e '#!c# resu$ts !n o era$$ e%%!c!ency !n a us!ness3
%FC% '& !"AD%:UAT% '&1!"2 CAP!TA$
E ery us!ness concern s#ou$" #a e a"e&uate amount o% 'orB!n( cap!ta$ to run !ts us!ness
operat!ons3 It s#ou$" #a e ne!t#er re"un"ant or e cess 'orB!n( cap!ta$ nor !na"e&uate nor
s#orta(es o% 'orB!n( cap!ta$3 1ot# e cess as 'e$$ as s#ort 'orB!n( cap!ta$ pos!t!ons are a"
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%or any us!ness3 Ho'e er@ !t !s t#e !na"e&uate 'orB!n( cap!ta$ '#!c# !s more "an(erous
%rom t#e po!nt o% !e' o% t#e %!rm3
D! ADVA"TA2% '+ !"AD%:UAT% '&1!"2 CAP!TA$
E ery us!ness nee"s some amounts o% 'orB!n( cap!ta$3 T#e nee" %or 'orB!n( cap!ta$ ar!ses
"ue to t#e t!me (ap et'een pro"uct!on an" rea$!Gat!on o% cas# %rom sa$es3 T#ere !s an
operat!n( cyc$e !n o$ e" !n sa$es an" rea$!Gat!on o% cas#3 T#ere are t!me (aps !n purc#ase o%
ra' mater!a$ an" pro"uct!on pro"uct!on an" sa$es an" rea$!Gat!on o% cas#3
T#us 'orB!n( cap!ta$ !s nee"e" %or t#e %o$$o'!n( purposes
For t#e purpose o% ra' mater!a$@ components an" spares3
To pay 'a(es an" sa$ar!es
To !ncur "ay-to-"ay e penses an" o er$oa" costs suc# as o%%!ce e penses3
To meet t#e se$$!n( costs as pacB!n(@ a" ert!s!n(@ etc3
To pro !"e cre"!t %ac!$!t!es to t#e customer3
To ma!nta!n t#e !n entor!es o% t#e ra' mater!a$@ 'orB-!n-pro(ress@ stores an" spares
an" %!n!s#e" stocB3For stu"y!n( t#e nee" o% 'orB!n( cap!ta$ !n a us!ness@ one #as to stu"y t#e us!ness un"er
ary!n( c!rcumstances suc# as a ne' concern re&u!res a $ot o% %un"s to meet !ts !n!t!a$
re&u!rements suc# as promot!on an" %ormat!on etc3 T#ese e penses are ca$$e" pre$!m!nary
e penses an" are cap!ta$!Ge"3 T#e amount nee"e" %or 'orB!n( cap!ta$ "epen"s upon t#e s!Ge
o% t#e company an" am !t!ons o% !ts promoters3 0reater t#e s!Ge o% t#e us!ness un!t@
(enera$$y $ar(er '!$$ e t#e re&u!rements o% t#e 'orB!n( cap!ta$3
+ACT'& A++%CT!"2 '&1!"2 CAP!TA$ -A"A2%-%"T
T#e amount o% 'orB!n( cap!ta$ re&u!re" "epen"s upon a num er o% %actors '#!c# can e
state" as e$o'
E "ATU&% '+ BU !"%
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Some us!nesses are suc#@ "ue to t#e!r ery nature@ t#at t#e!r re&u!rement o% %! e" cap!ta$ !s
more rat#er t#an 'orB!n( cap!ta$3 T#ese us!nesses se$$ ser !ces an" not t#e commo"!t!es an"
not t#e commo"!t!es an" t#at too on cas# as!s3 As suc#@ no %un"s are $ocBe" !n p!$!n(
!n entor!es an" a$so no %un"s are $ocBe" !n rece! a $es3 E3(3 2u $!c ut!$!ty ser !ces $!Be
ra!$'ays@ e$ectr!c!ty oar"s@ !n%rastructure or!ente" projects etc3 T#e!r re&u!rement o% 'orB!n(
cap!ta$ !s $ess3 On t#e ot#er #an"@ t#ere are some us!ness $!Be tra"!n( act! !ty@ '#ere t#e
re&u!rement o% %! e" cap!ta$ !s $ess ut more money !s $ocBe" !n !n entor!es an" "e tors3
T#e!r re&u!rement o% t#e 'orB!n( cap!ta$ !s more3
$%"2T '+ P&'DUCT!'" C*C$%
In some us!ness $!Be mac#!ne too$ !n"ustry@ t#e t!me (ap et'een t#e ac&u!s!t!ons o% ra'
mater!a$ t!$$ t#e en" o% %!na$ pro"uct!on o% %!n!s#e" pro"uct !tse$% !s &u!te #!(#3 As suc# more
amounts may e $ocBe" e!t#er !n ra' mater!a$s@ or 'orB !n pro(ress or %!n!s#e" (oo"s or
e en !n "e tors3 Natura$$y@ t#e!r nee"s o% 'orB!n( cap!ta$ are #!(#er3 On t#e ot#er #an"@ !% t#e
pro"uct!on cyc$e !s s#orter@ t#e re&u!rement o% 'orB!n( cap!ta$ !s a$so $ess3
!H% A"D 2&' T '+ BU !"%
In ery sma$$ compan!es t#e 'orB!n( cap!ta$ re&u!rements are &u!te #!(# o er#ea"s@ #!(#er
uy!n( an" se$$!n( costs etc3 As suc#@ t#e me"!um s!Ge" compan!es pos!t! e$y #a e an e"(e
o er t#e sma$$ compan!es3 1ut !% t#e us!ness starts (ro'!n( a%ter a certa!n $!m!t@ t#e 'orB!n(
cap!ta$ re&u!rements may e a" erse$y a%%ecte" y t#e !ncreas!n( s!Ge3
BU !"% IT&AD% C*C$%
I% t#e company !s operat!n( !n t#e per!o" o% oom@ t#e 'orB!n( cap!ta$ re&u!rements may e
more as t#e company may $!Be to uy more ra' mater!a$@ may !ncrease t#e pro"uct!on an"
sa$es to taBe t#e ene%!ts o% %a oura $e marBets@ "ue to t#e !ncrease" sa$es@ t#ere may e more
an" more amount o% %un"s $ocBe" !n stocB an" "e tors etc3 S!m!$ar$y@ !n case o% "epress!on
a$so@ t#e 'orB!n( cap!ta$ re&u!rements may e #!(# as t#e sa$es !n terms o% a$ue an" &uant!ty
may e re"uc!n(@ t#ere may e unnecessary p!$!n( up o% stocBs '!t#out (ett!n( so$"@ t#e
rece! a $es may not e reco ere" !n t!me etc3
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E &AT% '+ T'C1 TU&"'V%&
T#ere !s an !n erse co-re$at!ons#!p et'een t#e &uest!on o% 'orB!n( cap!ta$ an" t#e e$oc!ty
or spee" '!t# '#!c# t#e sa$es are a%%ecte"3 A %!rm #a !n( a #!(# rate o% stocB turno er 'u!$$
nee"s $o'er amt3 o% 'orB!n( cap!ta$ as compare" to a %!rm #a !n( a $o' rate o% turno er3
E C&%D!T P'$!C*
T#e %!rm s cre"!t po$!cy "!rect$y a%%ects t#e 'orB!n( cap!ta$ re&u!rement3 I% t#e
%!rm #as $! era$ cre"!t po$!cy@ #ence t#e more cre"!t per!o" '!$$ e pro !"e" to t#e "e tors so
t#!s '!$$ $ea" to more 'orB!n( cap!ta$ re&u!rement3 W!t# t#e $! era$ cre"!t po$!cy
operat!n( cyc$e $en(t# !ncreases an" !ce ersa3
E %A '"A$ VA&!AT!'"
In certa!n !n"ustr!es $!Be ra' mater!a$ !s not a a!$a $e t#rou(#out t#e year3 T#ey #a e to uy
ra' mater!a$ !n u$B "ur!n( t#e season to ensure an un!nterrupte" %$o' an" process t#em
"ur!n( t#e year3 0enera$$y@ "ur!n( t#e usy season@ a %!rm re&u!res $ar(er 'orB!n( cap!ta$ t#an
!n s$acB season3
E %A&"!"2 CAP!C!T* A"D D!V!D%"D P'$!C*
Some %!rms #a e more earn!n( capac!ty t#an ot#er "ue to &ua$!ty o% t#e!r pro"ucts@ monopo$ycon"!t!ons@ etc3 Suc# %!rms may (enerate cas# pro%!ts %rom operat!ons an" contr! ute to t#e!r
'orB!n( cap!ta$3 T#e "! !"en" po$!cy a$so a%%ects t#e re&u!rement o% 'orB!n( cap!ta$3 A %!rm
ma!nta!n!n( a stea"y #!(# rate o% cas# "! !"en" !rrespect! e o% !ts pro%!ts nee"s 'orB!n(
cap!ta$ t#an t#e %!rm t#at reta!ns $ar(er part o% !ts pro%!ts an" "oes not pay so #!(# rate o% cas#
"! !"en"3
E P&!C% $%V%$ C A"2%
C#an(es !n t#e pr!ce $e e$ a$so a%%ect t#e 'orB!n( cap!ta$ re&u!rements3 0enera$$y r!se !n
pr!ces $ea"s to !ncrease !n 'orB!n( cap!ta$3
E P&'DUCT!'" P'$!C*
I% t#e po$!cy !s to Beep pro"uct!on stea"y y accumu$at!n( !n entor!es !t '!$$ re&u!re #!(#er
'orB!n( cap!ta$3
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P$A""!"2 '+ '&1!"2 CAP!TA$
WorB!n( cap!ta$ !s re&u!re" to run "ay to "ay us!ness operat!ons3 F!rms "!%%er !n t#e!r
re&u!rement o% 'orB!n( cap!ta$ )WC/3 F!rm s a!m !s to ma !m!Ge t#e 'ea$t# o% s#are #o$"ers
an" to earn su%%!c!ent return %rom !ts operat!ons3 WCM !s a s!(n!%!cant %acet o% %!nanc!a$
mana(ement3 Its !mportance stems %rom t'o reasons
In estment !n current asset represents a su stant!a$ port!on o% tota$ !n estment3In estment !n current assets an" $e e$ o% current $!a !$!ty #as to e (eare" &u!cB$y to
c#an(e !n sa$es3
1us!ness un"ertaB!n( re&u!re" %un"s %or t'o purposes
To create pro"uct! e capac!ty t#rou(# purc#ase o% %! e" assets3
To %!nance current assets re&u!re" %or runn!n( o% t#e us!ness3
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T#e !mportance o% WCM !s re%$ecte" !n t#e %act t#at %!nanc!a$ mana(ers spen" a (reat "ea$ o%
t!me !n mana(!n( current assets an" current $!a !$!t!es3 T#e e tent to '#!c# pro%!t can e
earne" !s "epen"ent upon t#e ma(n!tu"e o% sa$es3 Sa$es are necessary %or earn!n( pro%!ts3
Ho'e er@ sa$es "o not con ert !nto cas# !nstant$y t#ere !s !n ar!a $y a t!me $a( et'een sa$e
o% (oo"s an" t#e rece!pt o% cas#3 WC mana(ement a%%ect t#e pro%!ta !$!ty an" $!&u!"!ty o% t#e
%!rm '#!c# are !n erse$y proport!ona$ to eac# ot#er@ #ence
proper a$ance s#ou$" e ma!nta!ne" et'een t'o3
To con ert t#e sa$e o% (oo"s !nto cas#@ t#ere !s nee" %or WC !n t#e %orm o% current asset to
"ea$ '!t# t#e pro $em ar!s!n( out o% !mme"!ate rea$!Gat!on o% cas# a(a!nst (oo" so$"3
Su%%!c!ent WC !s necessary to susta!n sa$es act! !ty3 T#!s !s re%erre" to as t#e operat!n( or cas#
cyc$e3
INVENTORY MANAGEMENTInventories constitute the most important part of the current assets of large majority
of companies. On an average the inventories are approximately 60% of the current
assets in public limited companies in India. Because of the large size of inventories
maintained by the firms a considerable amount of funds is committed to them. It is
therefore imperative to manage the inventories efficiently and effectively in order to
avoid unnecessary investment.
Nature of Inventories
Inventories are stoc! of the product of the company is manufacturing for sale and
components ma!e up of the product. "he various forms of the inventories in the
manufacturing companies are#
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&a9 -aterial It is the basic input that is converted into the finished
product through the manufacturing process. $a materials are those units
hich have been purchased and stored for future production.
E or=.in.8rogress Inventories are semi&manufactured products. "hey
represent product that need more or! they become finished products for
sale.
+inishe# 2oo#s Inventories are those completely manufactured productshich are ready for sale. 'toc!s of ra materials and or!&in&progress
facilitate production hile stoc! of finished goods is re(uired for smooth
mar!eting operations. "hus inventories serve as a lin! bet een the
production and consumption of goods.
Inventory Management Techniques
In managing inventories the firm)s objective should be to be in consonance ith the
shareholder ealth maximization principle. "o achieve this the firm should determine
the optimum level of inventory. *fficiently controlled inventories ma!e the firm
flexible. Inefficient inventory control results in unbalanced inventory and inflexibility&
the firm may sometimes run out of stoc! and sometimes pile up unnecessary stoc!s.
E %conomic 'r#er :uantity (%':) "he major problem to be resolved is
ho much the inventory should be added hen inventory is replenished. If
the firm is buying ra materials it has to decide lots in hich it has to
purchase on replenishment. If the firm is planning a production run the issue
is ho much production to schedule. "hese problems are called order
(uantity problems and the tas! of the firm is to determine the optimum or
economic lot size. +etermine an optimum level involves t o types of costs#&
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• 'r#ering Costs "his term is used in case of ra material and
includes all the cost of ac(uiring ra material. "hey include the costs
incurred in the follo ing activities#
• $e(uisition
• ,urchase Ordering
• "ransporting
• $eceiving
• Inspecting
• 'toring
Ordering cost increase ith the number of orders placed- thus the more
fre(uently inventory is ac(uired the higher the firm)s ordering costs.
On the other hand if the firm maintains large inventory)s level there
ill be fe orders placed and ordering costs ill be relatively small.
"hus ordering costs decrease ith the increasing size of inventory.
Carrying Costs5 /osts are incurred for maintaining a given level of
inventory are called carrying costs. "hese include the follo ing
activities#
arehousing /ost
1andling
2dministrative cost
Insurance
+eterioration and obsolescence
/arrying costs are varying ith inventory size. "his behavior is contrary
to that of ordering costs hich decline ith increase in inventory size.
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"he economic size of inventory ould thus depend on trade&off
bet een carrying costs and ordering cost.
ABC System
2B/ system of inventory !eeping is follo ed in the factories. 3arious items
are categorized into three different levels in the order of their importance. 4or
e.g. items such as memory high capacity processors and royalty are placed
in the 52) category. arge number of firms has to maintain several types of
inventories. It is not desirable the same degree of control all the items. "he
firm should pay maximum attention to those items hose value is highest.
"he firm should therefore classify inventories to identify hich items should
receive the most effort in controlling. "he firm should be selective in approach
to control investment in various types of inventories. "his analytical approach
is called 72B/ 2nalysis8. "he high&value items are classified as 72 items8 and
ould be under tightest control. 7/ items8 represent relatively least value and
ould re(uire simple control. 7 B items8 fall in bet een the t o categories and
re(uire reasonable attention of management.
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CASH MANAGEMENT
Sources of Cash:
ources of a##itional 9or=ing ca8ital inclu#e the follo9ing5
*xisting cash reserves
,rofits 9 hen you secure it as cash:;
,ayables 9credit from suppliers;
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=anagement pre&occupation ith surviving rather than managing
4re(uent short&term emergency re(uests to the ban! 9to help pay ages
pending receipt of a che(ue;.
CASH MANAGEMENT IN AIRSOFT INFOSYS
/ash =anagement 'ystem involves the follo ing steps#
"he branch offices of the company at various locations hold the collection of
che(ues of the customers.
"hose che(ues are either handed over to the /=' agencies or ban! of the
particular location ta!e charge of hole collection.
"hese /=' agencies or ban! send those che(ues to the clearing house to
ma!e them realized. "hese che(ues can be local or outstation.
"he /=' agencies or ban! send information to the central hub of the
company regarding realization>che(ue bounced.
"he central hub passes on the realized funds to the company as per the
agreed agreements.
"he /=' agencies or concerned ban! provides the necessary =I' to the
company as per re(uirement.
In cash management the collect float ta!en for the che(ues to be realized into cash
is irrelevant and non&interfering because ban!s such as 'tandard /hartered 1+4/
and /itiBan! ho give credit on the basis of these che(ues after charging a very
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small amount. "hese credits are given to immediately and the maximum time ta!en
might be just a day. "he amount they charge is very lo and this might cover the
threat of the che(ue sent in by t o or three customers bouncing. *ven other ise the
time ta!en for the che(ues to be processed is instantaneous. "heir /ash
=anagement 'ystem is (uite efficient.
RECEIVABLES MANAGEMENT
/ash flo can be significantly enhanced if the amounts o ing to a business are
collected faster. *very business needs to !no .... ho o es them money.... ho
much is o ed. ho long it is o ning. 4or hat it is o ed.
Late payments erode profits and can lead to bad debts.
'lo payment has a crippling effect on business- in particular on small businesses
hom can least afford it. If you don?t manage debtors they ill begin to manage
your business as you ill gradually lose control due to reduced cash flo and of
course you could experience an increased incidence of bad debt.
The following measures will help manage debtors:
@. 1ave the right mental attitude to the control of credit and ma!e sure that it
gets the priority it deserves.
A. *stablish clear credit practices as a matter of company policy.
. =a!e sure that these practices are clearly understood by staff suppliers and
customers.
C. Be professional hen accepting ne accounts and especially largerones.
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D. /hec! out each customer thoroughly before you offer credit. Ese credit
agencies ban! references industry sources etc.
6. *stablish credit limits for each customer and stic! to them.
F. /ontinuously revie these limits hen you suspect tough times are coming
or if operating in a volatile sector.
G. Heep very close to your larger customers.
. Invoice promptly and clearly.
@0./onsider charging penalties on overdue accounts.
@@./onsider accepting credit >debit cards as a payment option.
@A.=onitor your debtor balances and aging schedules and don?t let any debts get
too old.
+ebtors due over 0 days 9unless ithin agreed credit terms; should generally
demand immediate attention. oo! for the arning signs of a future bad debt. 4or
exampleJ..
@. onger credit terms ta!en ith approval particularly for smaller orders.
A. Ese of post&dated chec!s by debtors ho normally settle ithin agreed
terms.
. *vidence of customers s itching to additional suppliers for the same goods.
C.
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MANAGING PAYABLES (Creditors)
Creditors are a vital part of effective cash management and should be
managed carefully to enhance the cash position.
,urchasing initiates cash outflo s and an over&zealous purchasing function can
create li(uidity problems.
Consider the following: -
ho authorizes purchasing in your company & is it tightly managed or spread
among a number of 9junior; peopleM
2re purchase (uantities geared to demand forecastsM+o you use order (uantities hich ta!e account of stoc! holding and
purchasing costsM
+o you !no the cost to the company of carrying stoc!M
1o many of your suppliers have a return policyM
2re you in a position to pass on cost increases (uic!ly through price
increases to your customersM
If a supplier of goods or services lets you do n can you charge bac! thecost of the delayM
"here is an old adage in business that "if you can buy well then you can sell
well". =anagement of your creditors and suppliers is just as important as the
management of your debtors. It is important to loo! after your creditors& slo
payment by you may create ill feeling and can signal that your company is
inefficient 9or in trouble:;.
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$emember that a good supplier is someone ho ill or! ith you to enhance the
future viability and profitability of your company.
Financing Current Assets
the firm has to decide about the sources of funds hich can be availed to ma!e
investment in current assets.
Long term financing:
It includes ordinary share capital preference share capital debentures long term
borro ings from financial institutions and reserves and surplus.
hort term financing:It is for a period less than one year and includes or!ing capital funds from ban!s
public deposits commercial paper etc.
Depending on the mix of short and long term financing, the company can
follow any of the following approaches.
!atching "pproach
In this the firm follo s a financial plan hich matches the expected life of assets
ith the expected life of source of funds raised to finance assets. hen the firm
follo s this approach long term financing ill be used to finance fixed assets and
permanent current assets and short term financing to finance temporary or variable
current assets.
Conservative "pproach
In this the firm finances its permanent assets and also a part of temporary current
assets ith long term financing. In the periods hen the firm has no need for
temporary current assets the long&term funds can be invested in tradable securities
to conserve li(uidity. In this the firm has less ris! of facing the problem of shortage of
funds.
"ggressive "pproach
In this the firm uses more short term financing than arranted by the matching plan.
Ender an aggressive plan the firm finances a part of its current assets ith short
term financing.
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ADVA"TA2% '+ '&1!"2 CAP!TA$ -A"A2%-%"T
E 8ee# an# +le>ibility5 One a" anta(e o% 'orB!n( cap!ta$ %!nanc!n( !s t#at most
e$!(! $e compan!es can o ta!n s#ort-term $oans@ !nc$u"!n( accounts rece! a $e cre"!t
$!nes@ !n entory $oans or anB $!nes o% cre"!t@ !n a s#ort per!o" o% t!me3 T#e $oan
amounts are typ!ca$$y a %ract!on o% re enues an" are t!e" to assets t#at &u!cB$y con ert
to cas#3 WorB!n( cap!ta$ %!nanc!n( !s (enera$$y %$e ! $e@ '!t# ary!n( !nterest rates an"
repayment terms3 T#!s %$e ! !$!ty can #e$p compan!es '!t# seasona$ or per!o"!c
%$uctuat!ons smoot# out cas# %$o'3
E hort.Term '8tions5 Accounts rece! a $e cre"!t $!nes an" %actor!n(@ '#!c# occurs
'#en your company se$$s !ts rece! a $es to a t#!r" party at a "!scount@ "!rect$y t!e to
your companyJs accounts rece! a $es3 As your companyJs re enues an" assoc!ate"
rece! a $es (ro'@ t#e cre"!t $!ne !ncreases3 As your company nee"s more money@ t#ese
'orB!n( cap!ta$ opt!ons maBe t#ose %un"s a a!$a $e3 T#ese a$so pro !"e a !a $e
c#o!ce %or sma$$er or ne'er compan!es '!t#out t#e operat!ona$ #!story or a$ance
s#eet stren(t# to &ua$!%y %or a anB term $oan or unsecure" $!ne o% cre"!t3
E -e#ium.Term '8tions5 Your company can a$so %!nance 'orB!n( cap!ta$ '!t# a term$oan3 S#ort-term 'orB!n( cap!ta$ %!nanc!n( a""resses cyc$!ca$ nee"s t#rou(#out t#e
%!sca$ year3 M!"-term 'orB!n( cap!ta$ %!nanc!n( pro !"es t#e %un"s to purc#ase
a""!t!ona$ !n entory an" (enerate t#e rece! a $es t#at !ncrease 'orB!n( cap!ta$3 For
compan!es '!t# (ro't# prospects o er t#e ne t %e' years@ t#!s opt!on pro !"es access
to a stea"y stream o% cap!ta$ to co er (aps create" y (ro't#-re$ate" e penses3
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re !e' o% L!terature on 'orB!n( cap!ta$ mana(ement )conceptua$ an" researc#/3 T#e ma!n
o ject! e o% t#!s paper !s to pro !"e t#e '!"e ar!ety o% re !e's on 'orB!n( cap!ta$
mana(ement !n "!%%erent !n"ustr!es an" %!e$"s to !"ent!%y t#e researc# (ap %or %urt#er stu"!es3
T#e stu"y #as een !"ent!%!e" t#at researc# stu"!es o% (enera$ nature re$at!n( to 'orB!n(
cap!ta$ mana(ement are $!m!te"3 Furt#er@ researc# stu"!es touc#!n( upon %!nance are o%
Automot! e 1attery !n"ustry are a$so ery $!m!te"@ '#!$e 'orB!n( cap!ta$ mana(ement !n
Automot! e 1attery In"ustry !s #!t#er to a muc# ne($ecte" area3
3 Chan#ra @ A3 elvaraj (6746) stu"!e" t#at 'orB!n( cap!ta$ !s t#e acB one o% an
or(an!Gat!on3 It re%ers to a port!on o% t#e tota$ %un" '#!c# %!nances t#e "ay to "ay 'orB!n(
e penses "ur!n( t#e operat!n( cyc$e3 Mana(ement o% 'orB!n( cap!ta$ !s one o% t#e most!mportant %unct!ons o% corporate mana(ement3 It !s r!(#t$y sa!"@ Ina"e&uate 'orB!n( cap!ta$
!s a" anta(eous@ '#ereas re"un"ant 'orB!n( cap!ta$ !s a cr!m!na$ 'asteR3 As a $ar(e
manu%actur!n( !n"ustry@ 'orB!n( cap!ta$ mana(ement !n t#e stee$ !n"ustry !n o$ es a $ar(e
port!on o% t#e companyJs tota$ assets3 T#e opt!mum 'orB!n( cap!ta$ ensures t#e success o% t#e
us!ness@ '#!$e !ts !ne%%!c!ent mana(ement '!$$ $ea" to t#e "o'n %a$$ o% t#e company3 Hence@
t#!s paper ana$yses t#e 'orB!n( cap!ta$ mana(ement o% se$ecte" stee$ compan!es !n In"!a3
Furt#er@ to measure t#e e%%ect! e ut!$!Gat!on o% t#e 'orB!n( cap!ta$@ Operat!n( Cyc$e an" Cas#Con ers!on Cyc$e 'ere use"3 To measure t#e "eterm!nants o% Cas# Con ers!on Cyc$e@ t#e
8!esc#n!cB mo"e$ #as een use"3 F!na$$y@ !t 'as conc$u"e" t#at t#e s!Ge o% a company p$ays a
!ta$ ro$e !n "eterm!n!n( t#e e%%!c!ency o% !ts 'orB!n( cap!ta$ mana(emen