A GROUP PRESENTATION

ON WORKING CAPITAL OF TEXTILE INDUSTRY

Submitted To:Dr. Ashwin Dave

Submitted By: Monali Prikh-81 Kinjal Patel-90 Urvi Patel-103 Krina Patel-109 Kinjal chaudhri-115 Preeti khunti-64

Flow Of Presentation

IntroductionConcept of working capitalList of the companiesRatio AnalysisGraphical presentation of ratiosconclusion

Chimanbhai Patel Institute Of Management & Research

Introduction

Definition: According to Hoagland “ Working capital is a

descriptive of that capital which is not fixed but the more common use of the working capital is as the difference between the book value of current asset and current liabilities.”

It is the combination of two words- (1) Working (2) capital

Introduction

CONCEPT OF WORKING CAPITAL There are two concept of working capital: gross and net.Gross working capital:Net working capital:Significance of working capital:

Cash

Raw material

Work in progress

Finish goods

Receivable & debtors

Credit payment

Circulation system of working capital

List of Company

Arvind mills Bombay dyeing Reliance Siyaram Raymond Chiripal Grasim Welspun Mafatlal Surat textiles

FORMULA-RATIO ANALYSIS

Current Ratio = Current Assets / Current LiabilitiesD/E Ratio = Long-Term Debt / Shareholders' EquityLong-Term Debt Equity Ratio = Long-Term Debt /

Permanent CapitalInventory Turnover Ratio = Cost Of Goods Sold / Average

InventoryDebtors Turnover Ratio = Net Credit Sales / Average

DebtorsTotal Assets Turnover Ratio = Cost Of Goods Sold /

Average Total AssetsNet Profit Margin (%)= Earnings after Interest and Taxes

(EAT) * 100 / Net Sales 

Graphical Interpretation-Arvind Mills

Graphical Interpretation-Bombay Dyeing

Graphical Presentation-Reliance

Graphical Presentation-Siyaram

Graphical Presentation-Raymond

Graphical presentation-Chiripal

Graphical presentation-Grashim

Graphical presentation-Mafatlal

Graphical presentation-Wellspun

Graphical presentation-Surat textiles

Average of Ratio

  CURRENTRATIO

D/ERATIO

L.T.D/E RATIO

INVENTORYRATIO

DEBTORS’TURNOVER

RATIO

TOTALASSETSRATIO

NETPROFITWORTH

ARVINDMILLS

2.282 1.394 1.266 4.456 7.728 0.726 1.912

BOMBAYDYEING

0.938 5.732 3.708 4.456 3.568 0.726 -0.666

RELIANCE 1.038 0.502 0.416 9.256 24.434 1.34 10.434

SIYARAM 0.952 1.384 0.64 10.405 5.378 1.842 3.566

RAYMOND 1.292 0.98 0.772 7.162 5.378 0.599 1.992

CHIRIPAL 3.16 2.304 1.754 4.516 4.78 0.538 2.01

GRASHIM 0.864 0.294 0.232 5.726 3.78 0.847 19.068

WELLSPUN 0.894 2.75 2.136 17.98 15,96 0.673 2.158

MAFATLAL 0.812 0.06 0.054 9.27 13.296 1.63 18.354

SURATTEXTLES

1.982 3.734 3.542 15.32 44.82 2.898 1.944

Conclusion

1). Current ratio (2:1): It shows the relationship between current assets and current

liabilities. Chiripal and arvind mills has the highest ratio. It shows the current assets are more than current liability. Grasim has the lowest ratio.  

2). Debt-equity ratio(1:1): It express the relationship between the exernal and internal

equities or that between the borrowed capital and owners’ capital. Bombay dyeing has poor condition. While mafatlal has lower ratio which is good sign

for the company.  3). Long term D/E ratio: Higher ratio shows the poor condition of the company. Bombay

dyeing has poor condition while mafatlal has lowest ratio which is good for the company.  4). Inventory turnover ratio: If the company gets higher ratio then it is benefit for the

company. This ratio measures the no. of times the stock turns slows or rotates in an accounting period compared to the sales effected during the period. Arvind mills and Bombay has higher ratio which is good sign for the company. While wellspun has the lowest ratio which is not good for the company.

Bibliography 

WWW.GOOGLE.COMBOOKS:1. FINANCIAL MANAGEMENT-10TH EDITION; BY- I M PANDEY

2. FINANCIAL MANAGEMENT-8TH EDITION; BY; PRASANNA CHANDRA 

Thank You