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<p>PROJECT REPORTON</p> <p>Working capital and cost of goods soldA Report Submitted In Partial Fulfilment of the Requirements For The Award of the Degree of MASTER OF BUSINESS ADMINISTRATION</p> <p>Collaborative program of M.S.Ramaiah Management Institute with PRIST University BYDEEPAK KUMAR REG.NO:- CM2091860012 Under the guidance of Dr. H. Muralidharan</p> <p>PRIST UNIVERSITYVallam, Thanjavur, 2010</p> <p>STUDENTS DECLARATION</p> <p>I declare that the project titled WORKING CAPITAL AND COST OF GOODS SOLD is an original project done by me and no part of the project is taken from any other project or materials published or otherwise or submitted earlier to any other college or university.</p> <p>Students Signature DEEPAK KUMAR REG.NO-CM2091860012</p> <p>2 | Page</p> <p>AUTHENTICATION CERTIFICATE</p> <p>This is to certify that the work presented in this dissertation entitled ON PROJECT AT VARIAN (I) PVT.LTD ON THE TOPIC OF WORKING CAPITAL AND COST OF GOODS SOLD has done by Deepak Kumar Reg.no- CM2091860012 under my guidance is being submitted to M.S RAMAIAH MANAGEMENT INSTITUTE.</p> <p>Signature of Project Guide</p> <p>Dr. H. MuralidharanM S Ramaiah Management Institute, Bangalore</p> <p>3 | Page</p> <p>ACKNOWLEDGEMENT</p> <p>It is really a matter of great pleasure to acknowledge the invaluable guidance, enormous assistance and excellent co-operation extended to me finance department, Varian India Pvt Ltd, Kolkata in completion of my project. I express my sincere gratitude to Mr. D. GANGULY (DGM FINANCE), MISS NIMISHA, who gave me the project guidelines and were a source of constant inspiration and help throughout the project work. I extend my special gratitude to our beloved Dean Dr. CS.Thammaiah for inspiring me to take up this project I wish to acknowledge my sincere gratitude and indebtedness to my project guide Dr. H. Muralidharan of M.S. RAMAIAH MANAGEMENT INSTITUTE OF Bangalore for his valuable guidance and constructive suggestions in the preparation of project report. Finally yet importantly, I would like to thank my parents and my friends for their constant support and encouragement to do the best. I HAVE BEEN IMMENSELY BENEFITTED BY THIS PROJECT.</p> <p>4 | Page</p> <p>CONTENTPart A: Organizational study Sl. no 1 2 Sectorial analysis Introduction to VARIAN 3 4 5 6 7 8 9 10 Company profile History Values Vision Mission Achievement Topic Page no. 10-14 15 15 15 15 16 16 16 17-19 20 20-21 21 22 23 24-25 26-27</p> <p>Products VARIAN care program Philosophy and human face Quality policy Environment ,health &amp; safety policy Organizational structure Financial highlights Swot analysis</p> <p>5 | Page</p> <p>Part B: Project report Sl. no 1 2 Executive summary Research design 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Statement of the problem Objective of the study Limitation of the study Types of data collection Data collection technique Sample design 31 32 33-35 35-36 36-37 37-41 41-43 43-44 44 44-45 45 46 46-47 47-48 48-50 50-51 Topic Page no 29 30 30 30 31</p> <p>Working capital (Definition) permanent and temporary working capital Working capital needs of a business Working capital cycle Factor determining the working capital requirement Consequences of under assessment on working capital Consequences of over assessment on working capital Impact of inflation on working capital requirement Impact of double shift working capital requirement Zero working capital Adequate working capital Working capital leverage Approaches to working capital finance Financing working capital</p> <p>6 | Page</p> <p>17 18 19 20 21 22 23 24 25 26 27 28 29 30</p> <p>Committee recommendation of working capital finance Method for estimating working capital requirement Inventory management Objective of inventory management Inventory management techniques Receivable management Receivable collection policy Process of receivable management Cash management Effects of cash deficits Cash budget Method of cash flow budgeting Cash management model Analysis and interpretation Types of ratio</p> <p>52-54 54-55 55-56 56-57 58-59 59-61 62 62 63 64 64-65 65-66 66-67</p> <p>68 69-71 72-73 74-76 77-79 79-81 82 83 84</p> <p>31 32 33 34 35 36 37 38</p> <p>Profitability ratio Activity ratio Liquidity ratio Classification of costs Proforma of cost sheet Conclusion Recommendation Bibliography</p> <p>7 | Page</p> <p>39</p> <p>Annexure</p> <p>85-87</p> <p>PART A: ORGANIZATIONAL STUDY</p> <p>8 | Page</p> <p>SECTORIAL ANALYSISIndias biotechnology sector is at a crossroads. On the one hand, it must find affordable solutions to the pressing national needs in agriculture, health and energy, but on the other, it must be competitive enough to take advantage of the lucrative international markets. The Indian Government established an independent Department of Biotechnology (DBT) in the Ministry of Science and Technology as early as 1986, much before biotechnology became a buzzword. Government funding to the S&amp;T sector increased by eight times from the 8th Five-Year Plan to the 11th Five-Year Plan and support to the life sciences sector steadily increased by 16 times in the same period As a result, a firmer foundation of life sciences and biotechnology has been created over the years in public-funded institutions, over which a strong edifice of innovation and enterprise could be built now. Fiscal incentives include relaxed price controls for drugs, subsidies on capital limits, and tax holidays for R&amp;D spending. Several State Governments (e.g. Andhra Pradesh, Karnataka, Maharashtra, Himachal Pradesh, Uttar Pradesh, Kerala and Gujarat) have come up with added financial (e.g. tax concessions) and policy incentives (biotech parks, incubators of their own) to spur investment in biotechnology. DBT and other organizations have proactively taken up a number of initiatives in creating trained human resource, institutional infrastructure (e.g. microbial culture collections, cell and tissue lines, gene banks, laboratory animals, facilities for oligonucleotide synthesis, etc.) and a strong research base in the country in areas relating to agriculture and forestry, human health, animal productivity, environmental safety and industrial production.</p> <p>9 | Page</p> <p>90000 80000 70000 60000 50000 40000 30000 20000 10000 0 406 9393 675 12022 1150 25301 75304 DBT Total S&amp; T 6400</p> <p>8th five year plan 9th five year plan 10th five year plan11th five year plan</p> <p>Figure: From the 8th Five-Year Plan to the 11th Five-Year Plan, governments total S&amp;T budget increased by eight times and DBTs budget by 16 times. Segments of biotechnology sector Biopharma segment Plan 8th five year plan 9th five year plan 10th five year plan 11th five year plan</p> <p>Total S&amp;T ( in crore) 9393 12022 25301 75304 406 675 1150 6400</p> <p>DBT (in crore)</p> <p>10 | P a g e</p> <p>The biopharma segment mainly concentrates on vaccines, non-vaccine therapeutics, other novel products and contract services4. Its strong impact has been on promoting low-cost commodities and forcing a price reduction on MNC bio products. Bio services. Bio Services segment comprises of clinical research, contract manufacturing and contract researches. Bio agriculture Bio industrial Bio industrial Services is a contract laboratory specializing in the analysis of a variety of products and raw materials for the Pharmaceutical industry, Veterinary Health industry, Cosmetics and the Food and additives market. Bio informatics Bioinformatics was applied in the creation and maintenance of a database to store biological information at the beginning of the "genomic revolution", such as nucleotide and amino acid sequences. Development of this type of database involved not only design issues but the development of complex interfaces whereby researchers could both access existing data as well as submit new or revised data. Category Bio pharma Bio services Bio agriculture Bio industrial Bio informatics Percentage (%) 67 15 12 4 2</p> <p>11 | P a g e</p> <p>Bio industrial 4% Bio agriculture 12%</p> <p>Bio inform atics 2%</p> <p>percentag e(% )</p> <p>Bio pharma Bio services Bio services 15% Bio agriculture Bio industrial Bio inform atics Bio pharm a 67%</p> <p>Figure. Chart showing the segments of biotechnology sector.</p> <p>12 | P a g e</p> <p>Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08</p> <p>Bio Pharma 1790 2752 3570 4768 5973 6399</p> <p>Bio Services 135 275 425 720 1102 1572</p> <p>Bio Agriculture 110 130 330 598 926 1201</p> <p>Bio Industry 235 238 320 375 395 410</p> <p>Bio Informatics 70 80 100 120 145 190</p> <p>Table: Revenue generated by biotechnology sector in crore.10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Bio inform atics Bio industry Bio agriculture Bio services Bio pharma</p> <p>Chart: Revenue generated by biotechnology sector in crore.</p> <p>13 | P a g e</p> <p>COMPANY PROFILEVarian, Inc. is a leading worldwide supplier of scientific instruments and vacuum technologies for life science and industrial applications. The company provides complete solutions, including instruments, vacuum products, laboratory consumable supplies, software, training and support through its global distribution and support systems. Varian, Inc. employs approximately 3,500 people worldwide and operates manufacturing facilities in North America, Europe and Asia Pacific. Varian, Inc. had fiscal year 2009 sales of $807 million, and its common stock is traded on the NASDAQ Global Select Market under the symbol "VARI." It has been opened his company in Kolkata since 2007 with 8 products.</p> <p>History:Varian, Inc. was formed in 1999 when Varian Associates Inc.--a pioneer of the renowned hightech hotbed of Silicon Valley, California. reorganized into three independent public companies: Varian Medical Systems Inc.; Varian Semiconductor Equipment Associates Inc.; and Varian, Inc. Varian, Inc. operates as a leading supplier in scientific instruments, vacuum technologies, and contract manufacturing and has 14 locations in North America, Europe, and the Pacific Rim. The company caters to the life science, health care, semiconductor processing, and industrial industries and has over 20,000 customers. Varian's three main business segments include Scientific Instruments, Electronics Manufacturing, and Vacuum Technologies.</p> <p>VALUES:Our values guide the way we do businessour customers, suppliers and employees see them in action every day when they work with us. We believe its these values that have helped us enable our customers to excel, and have helped us attract and retain our most valuable assetour exceptional people.</p> <p>14 | P a g e</p> <p>VISION:The people of Varian, Inc. enhance customers' success by devising integrated, creative solutions to their most pressing technological and process requirements. Grounded in an unbending commitment to Inspiring Excellence, we strive to deliver the highest quality products and services, offering exceptional value to our customers. As a result, we create growth opportunities for employees while working to achieve the best financial performance in our industry, providing shareholders with an excellent return on their investment.</p> <p>MISSION:To be the market leader by providing customer delight through excellent quality, service and cost-effectiveness in a progressive, innovative and challenging environment. We endeavour to provide an enriching, rewarding and environment friendly work experience to our employees in an achievement-based, high- performance culture. We will provide maximum satisfaction to all our stakeholders.</p> <p>Achievement: 2009 Number 12 in the Business Week 50 listing of best performing public corporations 2007 Number 14 in the Business Week 50 listing of best performing public corporations 2007, 2008, 2009 named one of Industry Week's "50 Best Manufacturing Companies" inthe U.S.</p> <p> 2006 R&amp;D 100 Award 2006 Forbes Global High Performer 2004, 2005 Forbes Platinum 400 list</p> <p>15 | P a g e</p> <p>PRODUCTSVARIAN provides leading edge tools and solutions for diverse, high growth applications in life science and industry. Scientific Instruments:Were leaders and innovators in creating solutions that solve a wide range of challenges in life science and industry. In particular, we excel in creating high performance products, often combining our diverse technologies and capabilities to create new ways to meet the evolving needs of our customers. Our instruments, consumable supplies, and solutions are key tools in bio-molecular and academic research, pharmaceutical R&amp;D and manufacturing, and industrial R&amp;D and quality control, and in developing everything from disease-resistant crops to cosmetics to testing drinking water and monitoring quality in the petrochemical industry. Vacuum Technologies :We specialize in listening carefully to customer requirements and developing vacuum systems tailored to meet each ones unique needs. We do this by leveraging our broad product range and our 50 years of fundamental expertise in vacuum technologies. Whether a customer is building a mass spectrometer or a medical linear accelerator, a system for producing flat panel displays or coating architectural glass, or experimenting in high-energy, physics experiment, Varian, Inc. works alongside its customers to solve vacuum challenges.</p> <p>16 | P a g e</p> <p>Chromatography:GC Flexible solutions, for every application, From portable Micro-GC to custom Configurations. Flash Chromatography Automated systems improve performance and Minimize routine tasks to increase productivity</p> <p>Molecular spectroscopy:UV-Vis-NIR Outstanding performance, flexibility and Ease of use is what you expect from The range of Varian spectrophotometers, From routine to research applications.</p> <p>FT-IR Imaging Microscopes and imaging products For medical, biological and industrial Applications, with unmatched spatial</p> <p>17 | P a g e</p> <p>Resolution, speed and ease of use.</p> <p>Application-based consumables:-Application-BasedDrug Testing and Screening Varian offers a range of USP-compliant Dissolution vessels, paddles, and baskets, All serialized for traceability.</p> <p>Biotech Particles Highly reproducible, functionalized Magnetic, latex and custom particles for Biotech applications, and solid phase synthesis supports.</p> <p>Vacuum Technologies for Science and Industry Primary Vacuum Dry Scroll Pumps Consistent performance in a reliable, dry vacuum in a small, economical Package. Vacuum Control Precise, user-friendly mass</p> <p>18 | P a g e</p> <p>Spectrometer and ion pump leak Detectors are available with wireless Remote capability.</p> <p>Varian Care ProgramThe Varian Care Program adds value to your business by ensuring ongoing productivity. Whether you need service, training or preventive maintenance, you need more than a skilled technician. You need a good listener who will understand your situation and give you the best advice and service possible. Our dedicated field support representatives and specialists take pride in their work and are committed to ensuring you get the most from your investment. Our goal is to help you increase your productivity, maximize your uptime and achieve the highest return possible on your investment. Our experienced a...</p>