VRL LOGISTICS Ltd Varur-Hubli DECLARATION I, Mr. ARUNARADDI.D.TIGARI of BBA 6 TH semester of A.S.S’ College of BBA, Gadag hereby declare that this project titled “Working Capital Management” is based on “VRL Logistics Ltd in Varur-Hubli”. This project has been prepared by me under the guidance of Prof. A. M. Habib. . This project is my original work and has been submitted to A.S.S’ College of BBA, Gadag. Date: A.S.S’S College of Business Administration, Gadag-Betgeri
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
VRL LOGISTICS Ltd Varur-Hubli
DECLARATION
I, Mr. ARUNARADDI.D.TIGARI of BBA 6TH semester of A.S.S’
College of BBA, Gadag hereby declare that this project titled
“Working Capital Management” is based on “VRL Logistics
Ltd in Varur-Hubli”. This project has been prepared by me
under the guidance of Prof. A. M. Habib. . This project is my
original work and has been submitted to A.S.S’ College of
BBA, Gadag.
Date:
Place: Gadag Mr. ARUNARADDI.D.TIGARI
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
ACKNOWLEDGEMENT
Before we get deep into the project, I would like to take
this opportunity to express my profound thanks to people
who have become part of this project.
I would like to express my sincere and profound sense
of gratitude to the Management of “VRL Logistics Ltd in
Varur-Hubli” for Providing me such a great opportunity,
and their support and valuable guidance for “Working
Capital Management in their department”.
I would like to thank the Managing Director of VRL Mr.
Anand Sankeshwar and also to Shri. S.G.Patil General
Manager (HRD), for their support and advice and for giving
me all the valuable information required to fulfill the needs
of this project.
I would also thank the entire Departmental Staff of
VRL who were very kind and supportive enough to spare
their busy schedules, and for giving each and every detail I
needed to complete my project.
I extend my heartfelt and sincere thanks to our
Pri.Prof. Basavaraj A Hiremath, A.S.S’s College of BBA,
Gadag, for her valuable and timely guidance and support,
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
and for his constant motivation throughout my project
period.
I also extend my heart full thanks to my Project guide
Prof. A. M. Habib, A.S.S’s College of BBA, Gadag without
whose support and guidance I would not have been able to
prepare this project.
I want to extend my heartily thanks to my beloved
friend Mr. Basavaraj R Lingashetti, Madan Joshi who
has supported me for finishing the project work.
I would fail in my duty if I can’t remember the
encouragement given by my parents and friends in my
endeavor.
Place: Gadag Mr. Arunaraddi Tigari.
C ONTENTS
1. PROJECT PROFILE 1-3Executive summary
Scope of study
Objectives of the study
Methodology
Limitation
2. INDUSTRY PROFILE 4-9Introduction
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Out look of the VRL
3. COMPANY PROFILE 10-18
Brief History
Organization profile
Quality Policy
Customers
Organization chart
4. WORKING CAPITAL MANAGEMENT 19-44Introduction
Concept
Importance
Determinates
Analysis
5. CASH MANAGEMENT 45-46
Introduction
Motives
Cash management cycle
Objectives
6. RECEIVABLE MANAGEMENT 47-49Introduction
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Credit evaluation
Optimum credit policy
Benefits
Company practice
Average collection period
7. DATA ANALYSIS AND INTERPRETATION
8. GENERAL OBSERVATION
Strength
Weakness
Conclusion
BIBLIOGRAPHY
ANNEXURES
A.S.S’S College of Business Administration, Gadag-Betgeri
PROJECTPROFILE
VRL LOGISTICS Ltd Varur-Hubli
EXECUTIVE SUMMARY
I have selected. VRL Vrur-Hubli for the project work “Working capital
management” which I learned at my BBA VIth semester.
VRL Logistics Pvt, Ltd commenced its operation and started in the year 1976.
VRL Logistics is one of the leading road transportation companies in India, with
operations in parcel transportation, passenger transportation, express cargo, aviation and
courier segments.
Management of working capital is an essence of business activity a company should
always maintain good amount of working capital on continuous basis.
So I took this opportunity to study the working capital management of VRL Varur-
Hubli.
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
SCOPE OF THE STUDY
The customer Satisfaction Survey activity entails: identification of customer
segments in more details; listing the types of courier interfaces with customers;
categorization of services received by various segment. Intended project activity for 2010
encompasses the design, data collection, analysis and reporting of a statistically reliable
survey of customer segments, perceptions of courier current levels of performance,
service of performance standards expectations, and service improvement opportunities. In
order to be consistent with previous customer satisfaction studies, both the list of
directorates and the “satisfaction criteria” will be consistent. However additional items of
information will be added.
OBJECTIVES OF THE STUDY
To know the attribute of the customer towards the company’s service.
To know the service provided by the VRL Logistics.
To understand the present service system.
To find out the gap between present service and customer expectation.
To know the price level of the VRL Logistics Ltd courier service compared to other
competitors.
To know the safety of documents and time management.
To know the staff behavior with the customer.
To sasses the level of satisfaction of customer towards courier service offered by the
VRL Logistics Ltd.
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
METHODOLOGY
The data is collected from both primary and secondary source they are
***Primary Source: Conversation with Mr. S. Sudhakar. Financial Consulter and also
with college guide Mr. Anand Faculty in Finance.
***Secondary Source: Company’s annual reports and the company www.vrllogistics.com
LIMITATIONS
The time is the main limitation to this project. Because “Working capital
management” is a very vast subject and to study it thoroughly one month is a very short
period.
A.S.S’S College of Business Administration, Gadag-Betgeri
II Total Current Liabilities (e+f) 2154.61 2907.67 3461.08
Net Working Capital(I+II) 2501.35 5348.86 6554.20
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
OPERATING CYCLE:
A firm should aim at maximizing the wealth of it’s shareholders, so the firm should earn sufficient return from it is operations. Earning a steady amount of profit requires successful sales activities. The firm has to invest enough funds in current assets for generating sales. Current assets are needed because sales do not convert cash instantaneously. There is always an operating cycle involved in the conversion of sales in to cash.
IT IS EXPLAINED THROUGH THE FLOWING DIAGRAM
A.S.S’S College of Business Administration, Gadag-Betgeri
CASH
SalesA/c Receivables
Inventories
VRL LOGISTICS Ltd Varur-Hubli
Length of Operating Cycle:
The length of the operating cycle can be calculated in two ways:
a) Gross Operating Cycle:
The gross operating cycle of a trading concern in is the sum of Inventory
Conversion period and debtors (Receivable) conversion period. Thus, Gross Operating
Cycle is given as follows:
INVENTORY CONVERSION PERIOD + DEBTORS CONVERSION PERIOD
b) NET Operating cycle:
Net Operating Cycle is the difference between Gross Operating Cycle and
creditors (Payables) Deferral period.
Length of Operating cycle:
The sum of inventory conversion period (ICP), Debtors Conversion period (DCP).
Operating cycle period =ICP+DCP
Inventory Conversion period
1) RML conversion period = RML inventory X 360
RML consumption
2) WIP CP = WIP inventory X 360
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Cost of production
3) Finished goods CP = Finished goods inventory X 360
Cost of goods sold
4) Debtors conversion period = Debtors X 360
Cr. Sales at cost
5) Payables deferral period = Creditors X 360
Credit sales
INVENTORY CONVERSION PERIOD (ICP):
The total time needed for producing and selling the product and includes raw
material conversion period, work in progress conversion period and finished goods
conversion period.
ICP=RMCP+WIPCP+FGCP
Debtor’s conversion period [DCP]:
The time required to collect the outstanding amount from the customers.
Gross operating cycle [GOC]:
The total of inventory conversion period and debtor’s conversion period.
GOG=ICP+DCP
Net operating cycle [NOC]:
It is the net difference between gross operating cycle and payable deferral period.
Payable deferral period [PDP]:
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Capacity of firm to postpone the payments. The ability of a firm to acquire
resources on credit and temporarily postpone payment of certain expenses it is length of
time the firm is able to postpone payment on various resources purchases.
NOC=GOC-PDP
Cash conversion cycle [CCP]:
It is the net difference between net operating cycle and depreciation and profit.
CCC=NOC-Depreciation and profit
IMPORTANCE OF OPERATING CYCLE :
Operating cycle concept is a new concept in working capital management, which
has been gaining more and more importance in recent years. This concept emphasis the
importance of time factor in the conversion of raw materials into final product and then
into sales resulting in cash collection right from the acquisition of raw materials.
Normally operating cycles passes through the following stages
a. Acquisition of raw materials
b. Work in process
c. Stock of finished goods
d. Sale and realization of sale proceeds
Operating cycle concept plays an important role in determining the working
capital management of firm. Longer the operating cycle greater will be the amount of
working capital requirement and shortest operating cycle requires limited amount of
working capital. There fore an efficient management should try to reduce the time
elapsed in these consecutive stages of operating cycle.
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Duration of manufacturing process right from the acquisition of raw materials till
they are sold out after being converted into final product and the cash realized determines
the amount of working capital required.
REASONS FOR LENGTHY OPERATING CYCLE:
Pro-longed operating cycles may be due to the following reasons:
1) In effective receivable management.
2) Lack of credit facilities from the suppliers.
3) In effective purchase policies.
A.S.S’S College of Business Administration, Gadag-Betgeri
CASH MANAGEME
NT
VRL LOGISTICS Ltd Varur-Hubli
CASH MANAGEMENT:
MEANING:
Cash is the important current asset for the operations of the business . Cash a basis
input needed to keep the business running on a continuous basis it is also the ultimate
output expected to be realized by selling the service or product manufactured by the
company. The company should keep the sufficient cash neither more or less cash
shortage will descript the firm’s manufacturing operation while excessive cash will
simply remain idle without contributing anything towards the company’s profitability.
Thus, a major function of the financial manager is to maintain a sound cash position.
Cash is the money, which a firm can disburse immediately without any restriction
the term cash included coins currency and cheques held by the firm and balance in its
bank accounts. Sometimes more cash items such as marketable securities or bank time
deposits are also included in cash.
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
MOTIVE FOR HOLDING CASH:
1) Transaction Motive:
The transaction motive requires a company to hold to conduct its business in the
ordinary course the company needs cash primary to make payments for purchases.
Wages, salaries, other operating expenses etc.
2) Precautionary Motive:
The precautionary motive is its need to hold cash to meet contingencies in futures.
It provides a cushion to with stand some unexpected emergency. The precautionary
amount of cash defends upon the predictability of cash flows. The precautionary
balance many kept cash and marketable securities.
3) Speculative Motive:
The speculative motive relates to the holding of cash for investing in profit
making opportunities as send when they arise. The opportunity to make profit may arise
when the security prices changes.
CASH PLANNING
Cash inflows and outflows should be planned to project cash surplus or deficit for
cash period of the planning period. Cash budget should be prepared for this purpose.
MANAGING THE CASH FLOW
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
The flow of cash should be properly managed. The cash inflows should be
accelerated as far as possible, decorating the cash outflows.
OPTIMUM CASH LEVEL
The company should decide about appropriate level of cash balances. The cost of
excess cash and danger of cash deficiency should be matched to determine the optimum
level of cash balances.
INVESTING SURPLUS CASH
The surplus cash balances should be properly invested to earn profits. The firm
should decide about the division of cash balance between bank deposits, marketable
securities, and inter corporate lending.
CASH MANAGEMENT AT VRL LOGISTICS PVT,LTD
A well management of cash needs in a company can represents the amount of
money company keeps with a bank on current or deposit account and the money holds in
the company.
To control a company’s cash flows one requires a plan of the company’s
operations for the relevant future period. This plan is based on forecasts of cash receipts.
In patil works and cash disbursements for costs and purchases of equipment’s etc.
COMPANY PRACTICE:
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Inflows and outflows of cash by the VRL (Varur-Hubli)
CASH INFLOWS OF THE COMPANY:
Advanced payment by the customers.
Sundry debtors / receivable
Export incentives
Other income
CASH OUTFLOWS OF THE COMPANY:
Sundry creditor’s payment.
Account payable.
Other expenses.
Wages and salary
PERCENTAGE OF CASH TO NET WORKING CAPITAL:
Cash is important component of current assets because of more liquid. It is also
known as lifeblood of the business firm. This percentage of cash to net working capital
and cash to gross working following particulars.
Percentage of cash to Net working capital = cash X 100
Net working capital
Particulars Amount (2008-09) Amount (2009-10)
Cash 1515.85 1961.89
Working capital 5348.86 6554.20
Percentage 28.33 29.93
PERCENTAGE OF CASH TO GROSS WORKING CAPITAL:
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
This percentage of cash to gross working capital shows the relationship between
cash current assets, which indicates the portion of cash in the current assets.
Percentage of Cash to gross working capital = Cash X 100 G.W.C. [Rs in Lakhs]
Particulars Amount (2008-09) Amount (2009-10)
Cash 1515.85 1961.89
G.W.C 8256.53 10015.28
Percentage 18.35 19.58
A.S.S’S College of Business Administration, Gadag-Betgeri
RECEIVABLE MANAGEMENT
VRL LOGISTICS Ltd Varur-Hubli
RECEIVABLE MANAGEMENT
MEANING:
Receivables contribute a substantial portion of current assets of several firms e.g.
In INDIA tread debtors, after in ventures one the major components of current assets.
They form about one third of current assets in India granting credit and creating debtors
amount to the blocking of the company’s funds. The interval between the date of sale and
payment has to be financed out of working capital. These necessities the firm to get funds
from banks or other sources. Thus trade debtors represent investment, as substantial
amounts are ties up in trade debtor’s, it needs careful analysis and proper management.
OBJECTIVES:
The following are the objectives of receivables management
a. To maintain the good will of the company in the minds of customers:
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Good will is an intangible asset clearly specifies the reputation of the company to maintain the good will in the customers mind is essential because good will is only the alternate food for long life of the company there fore providing credit facility to the customers is to maintain the reputation.
b. To have the regular customers
Providing credit facility is to protect its sales from the competitions and to attract the potential customers to buy its products at favorable terms. Regular customers are like KEB etc.
ESTABLISHING OPTIMUM CREDIT POLICY:
A company’s investment in accounts receivable depends on:
a) Volume of credit sales
b) Collection period
The volume of credit sales is a functions of the firm’s total sales and percentage
of credit sales to total sales. Total sales depend on market size firm’s market share
product quality. Intensity of competition economic conditions etc. the financial manager
hardly has any control over these variables. The percentage of credit sales to total sales
are mostly influenced by the native of business and industry norms.
The term credit polity is used to refer to the combination of the decision variables they
are-
i) Credit standard
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
ii) Credit terms
ii) Collections efforts
On which the financial manager has influence.
THE CREDIT STANDARD:
It is the criteria to decide the types of customer’s to whom goods could be sold on
credit. It a company has more slow playing customers its investment in account
receivables. Will increase. The company will also expose to higher risk of default. Credit
terms specify duration of credit and terms of payment by customer’s investment accounts
receivables will be high if the customers are allowed extended time period for making
payments collection efforts. Determine the actual collection period. The lower the
collection period, the lower investment in accounts receivables and vice-versa.
OPTIMUM CREDIT-POLICY: A Cost Benefit- Analysis:
The firms operating Profit is maximized when total cost is minimized for a given
level of revenue. Optimum credit policy is one, which maximizes the company’s value.
The value of the company is maximized when the incremental rate of return on
investment is equal to the incremental cost of funds used to finance the investment. As
the firm looses its credit policy. Its investment in accounts receivable becomes more risky
because of increase in slow paying and defaulting accounts.
Thus we many state that the goal of the firm’s credit policy is to maximize the
value of the company. To achieve this goal the evaluation of investment in accounts
receivable should involve the following steps
Estimation of incremental operating profit
Estimation of incremental investment in accounts receivables
Estimation of the incremental rate of return of investment
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
Comparison of the incremental rate of return with the required rate of return.
CREDIT TERM:
The stipulations under which the firm sells on credit to customers are called credit terms. These stipulations include: a) the credit period b) the cash discount
CREDIT PERIOD:
The length of time for which credit is extended to customers is called the credit
period. It is generally started in terms of a net date. A firm’s credit period may be
governed by the industry norms. However, depending on its objectives, the firm can
lengthen the credit period on the other hand. The company may tighten it credit period if
customers are defaulting too frequently & bad debt looses are building up.
COLLECTION PERIOD:
A collection policy is needed because all customers are slow payers while some
are nonpayers.The collection efforts should there fore aim at accelerating collections
from slow payers and reducing bad debt looses. A collection policy should ensure prompt
collection is need for fast turnover of working capital keeping collection costs and bad
debts within limits and maintaining collection efficiency. Regularity in collections keeps
debtors alert, and they tend to pay their dues promptly.
Receivables management at Patil Electric Works:
a) To achieve growth in sales
b) To increase profit
c) To meet competition
Credit policy variables in Patil electric works
Credit policy has important implication for the company’s production, marketing and
finance functions.
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
CREDIT STANDARDS:
Credit standard are the criteria, which a firm follows in selecting customers for
the purpose of extension.
AVERAGE COLLECTION PERIOD :
The average collection period measures the quality of debtors since it
indicates the quality of their collection the average collection period should
be compared the against firms credit terms and collection efficiency.
Average collection period = Debtors X 360 sales
(Amount in lack)Particulars Amount (2009) Amount (2010)
Debtors 2922.98 4459.29
Sales 43737.84 51258.80
ACP 24 Days 31 Days
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
INTERPRETATION:
The average collection period of the VRL in the year 2008-09 is 24
days and in the year 2009-10 is 31 days since the it is in increasing order. It
indicates that the firm has control over credit facility & credit collection.
PERCENTAGE OF DEBTORS TO NET WORKING CAPITAL:
The ratio indicates percentage of debtors in the net working capital.
Percentage of Debtors to Net Working Capital. = Debtors X 100
NWC
(Amount in lack)Particulars Amount (2009) Amount (2010)
Debtors 2922.98 4459.29
NWC 5348.86 6554.20
Percentage 54.64 68.03
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
PERCENTAGE OF DEBTORS TO GROSS WORKING CAPITAL:
The percentage of debtors to gross working capital shows the portion of debtors in the current assets.
Percentage of Debtors to Gross Working Capital. = Debtors X 100
GWC
(Amount in lack)Particulars Amount (2009) Amount (2010)
Debtors 2922.98 4459.29
GWC 8256.53 10015.28
Percentage 35.40 44.52
A.S.S’S College of Business Administration, Gadag-Betgeri
DATA ANALYSIS AND INTERPRETATI
ON
VRL LOGISTICS Ltd Varur-Hubli
DATA ANALYSIS AND INTERPRETATION
ASSETS
CURRENT ASSETS
Cash and Bank balance from 2006-07 to 2009-10
YEAR AMOUNT DIFFRENCE
2006-2007 708.15 194.21
2007-2008 1515.85 807.07
2008-2009 1961.89 446.04
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
2009-2010 2391.17 429.28
The Bank balance are the substitutes for cash are most liquid assets for the
company. The more cash and bank balance may be required when there is more operation
to be done. In the last 4 years it has be clear that the highest growth in cash and bank
balance found in the year 2007-08 (807.70).
SUNDRY DEBTORS FROM 2006-07 TO 2009-10
YEAR AMOUNT DIFFRENCE
2006-2007 1721.25 494.00
2007-2008 2371.32 650.07
2008-2009 2922.98 551.66
2009-2010 4459.29 1536.31
A.S.S’S College of Business Administration, Gadag-Betgeri
194.21
807.70
446.04429.28
0
100
200
400
500
600
800
900
2006-07 2007-08 2008-09 2009-10
YEAR
DIFFERENCE
AMOUNT
VRL LOGISTICS Ltd Varur-Hubli
Sundry debtors are debts owned by the customer as goods are sold on credit basis
and are considered to be the most liquid current assets for the firm. As for the calculation,
the highest rate in debtors found in the year 2009-10 at rate of 1536.31.
INVENTORIES FROM 2006-07 TO 2009-10
YEAR AMOUNT DIFFRENCE
2006-2007 869.50 218.03
2007-2008 960.29 90.79
2008-2009 633.06 327.23
2009-2010 686.35 53.29
A.S.S’S College of Business Administration, Gadag-Betgeri
494.00
650.07551.66
1536.31
0
300
600
900
1200
1500
1800
2100
2006-07 2007-08 2008-09 2009-10
YEAR
DIFFERENCE
AMOUNT
VRL LOGISTICS Ltd Varur-Hubli
The inventories constitute that major part of the current assets. The difference
change in growth highest rate over the last 4 years 2008-09 (327.23).
CURRENT LIABILTIES
SUNDRY CREDITORS FROM 2006-07 TO 2009-10
YEAR AMOUNT DIFFRENCE
2006-2007 1596.43 196.97
2007-2008 2794.28 1197.82
A.S.S’S College of Business Administration, Gadag-Betgeri
218.03
90.79
327.23
53.29
0
100
200
300
400
500
600
700
2006-07 2007-08 2008-09 2009-10
YEAR
DIFFERENCE
AMOUNT
VRL LOGISTICS Ltd Varur-Hubli
2008-2009 3355.96 561.68
2009-2010 2944.90 411.06
It may be inferred that the sundry creditors increases to during the year of 2007-
08 (1197.82) As compared to present year 2006-07 (196.97) it will not increase.
OTHER LIABILITIES FROM 2006-07 TO 2009-10
YEAR AMOUNT DIFFRENCE
2006-2007 196.18 129.29
2007-2008 280.43 84.25
2008-2009 105.12 -175.31
2009-2010 109.83 4.71
A.S.S’S College of Business Administration, Gadag-Betgeri
196.97
1197.82
561.68411.06
0
200
400
600
800
1000
1200
1400
2006-07 2007-08 2008-09 2009-10
YEAR
DIFFERENCE
AMOUNT
VRL LOGISTICS Ltd Varur-Hubli
It may be inferred that the other liabilities increased to during the year of 2006-07
(129.29). The present year 2009-10 (4.71). Will be compared with the figure of 2007-08
(-175.31).
Information relating to various current assets
and liabilities includes in the year 2006-07
PARTICULARS AMOUNT PERCENTAGE (%)
Current assets
Cash and Bank balance 708.15 21.47%
Sundry debtors 1721.25 52.17%
Inventories 869.50 26.36%
A.S.S’S College of Business Administration, Gadag-Betgeri
129.2984.25
-175.31
4.71
-200
-150
-100
-50
0
50
100
150
2006-07 2007-08 2008-09 2009-10
YEAR
DIFFERENCE
AMOUNT
VRL LOGISTICS Ltd Varur-Hubli
Total 3298.90 100.00%
Current Liabilities
Sundry Creditors 1596.43 89.06%
Other Liabilities 196.18 10.94%
Total 1792.61 100.00%
Current assets Current Liabilities 21.47% 26.36% 10.94%
26
52.17%
It may be revealed that in the over all composition of sundry creditors are the highest
(89.06%), followed by sundry debtors (52.17%), Inventories (26.36%), cash & bank
balance (21.47%), other liabilities (10.94%).
Information relating to various current assets
and liabilities includes in the year 2007-08
PARTICULARS AMOUNT PERCENTAGE (%)
Current assets
Cash and Bank balance 1515.85 31.27%
Sundry debtors 2371.32 48.92%
Inventories 960.25 19.81%
A.S.S’S College of Business Administration, Gadag-Betgeri
o InventoriesoSundry DebtoCash & Bank b
oSundry crdrsoOther libet
VRL LOGISTICS Ltd Varur-Hubli
Total 4847.46 100.00%
Current Liabilities
Sundry Creditors 2794.28 90.88%
Other Liabilities 280.43 9.12%
Total 3074.71 100.00%
Current assets Current Liabilities31.27% 9.12%
19.81%
48.92% 90.88%
It may be revealed that in the over all composition of sundry creditors are the
highest (90.88%), followed by sundry debtors (48.92%), cash & bank balance (31.27%),
Inventories (19.81%), other liabilities (9.12%).
Information relating to various current assets
and liabilities includes in the year 2008-09
PARTICULARS AMOUNT PERCENTAGE (%)
Current assets
Cash and Bank balance 1961.89 32.56%
Sundry debtors 2922.98 52.97%
A.S.S’S College of Business Administration, Gadag-Betgeri
o InventoriesoSundry DebtoCash & Bank b
oSundry crdrsoOther libet
VRL LOGISTICS Ltd Varur-Hubli
Inventories 633.06 11.47%
Total 5517.93 100.00%
Current Liabilities
Sundry Creditors 3355.96 96.96%
Other Liabilities 105.12 3.04%
Total 3461.08 100.00
Current assets Current Liabilities32.56% 11.47% 3.04%
96.96%52.97%
It may be revealed that in the over all composition of sundry creditors are the
highest (96.96%), followed by sundry debtors (52.97%), cash & bank balance (35.56%),
Inventories (11.47%), other liabilities (3.04%).
Information relating to various current assets
and liabilities includes in the year 2009-10
PARTICULARS AMOUNT PERCENTAGE (%)
Current assets
Cash and Bank balance 2391.17 31.73%
A.S.S’S College of Business Administration, Gadag-Betgeri
o InventoriesoSundry DebtoCash & Bank b
oSundry crdrsoOther libet
VRL LOGISTICS Ltd Varur-Hubli
Sundry debtors 4459.29 59.17%
Inventories 686.35 9.10%
Total 7536.81 100.00%
Current Liabilities
Sundry Creditors 2977.90 96.40%
Other Liabilities 109.83 3.60%
Total 3054.73 100.00%
Current assets Current Liabilities31.73% 9.10% 3.60%
59.17% 96.40%
It may be revealed that in the over all composition of sundry creditors are the
highest (96.40%), followed by sundry debtors (59.17%), cash & bank balance (31.73%),
Inventories (9.10%), other liabilities (3.60%).
Estimation of Net Working Capital:
Year Current assets Current
Liabilities
Gross Working
Capital
Net Working
Capital
2006-07 3298.90 1792.61 3298.90 1506.29
2007-08 4847.46 3074.71 4847.46 1772.75
A.S.S’S College of Business Administration, Gadag-Betgeri
o InventoriesoSundry DebtoCash & Bank b
oSundry crdrsoOther libet
VRL LOGISTICS Ltd Varur-Hubli
2008-09 5517.93 3461.08 5517.93 2056.85
2009-10 7536.81 3054.73 7536.81 4482.08
A.S.S’S College of Business Administration, Gadag-Betgeri
1506.291772.75
2056.85
4482.08
0
1500
2000
2500
3000
3500
4000
4500
2006-07 2007-08 2008-09 2009-10
YEAR
Net Working Capital (CA-CL)
AMOUNT
VRL LOGISTICS Ltd Varur-Hubli
FINDINGS:
A.S.S’S College of Business Administration, Gadag-Betgeri
GENERAL OBSEREATION
VRL LOGISTICS Ltd Varur-Hubli
There is dedicated workers increase in growth of their turnover
They provide good service that leads to customer satisfaction
The company is recommended by Indian books association Mumbai
They provide training facility
They have good brand image
They provide direct and indirect employment to many people
They did not under go any lockout, strike etc
They have their own in house body building of vehicle
They have new courier service called “CARGO EXPRESS” which refers to the
24 hours of service.
The company is having wide network of branches spread all over Karnataka,
Andhra Pradesh, Madhya Pradesh, Maharashtra, and New Delhi.
SUGGESTIONS:
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
The garage is centralized all the vehicle must have to come Varur for repair and
maintenance
They are highly depend on economic scenario
They only concentrate on rich class of people
There is heavy work load
OPORTUNITIES:
They can enter into hotel business
They can decentralize their garage and office
They can concentrate on remote villages
They can tie up with the government transport service
They can enter into international courier and cargo express service
They can extent their service to north and south station
Another English newspapers to be published out side of the Karnataka
THREATS:
Uncertain policies of changing policy government
Competition can enter into market for leadership
New technology economic slowdown
Maintenance
Competitors
CONCLUSION:
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
The Conclusion of whole the study is that the management of working capital in
the VRL Logistics Pvt. Ltd. Is very good as it is above corporate standard.
The profits of company are also growing with the speed, as the management of
working capital is getting good.
As well as level of working capital liquidity of company is also affected
positively. So the study showing it is true that the working capital is the guiding for the
organization survival growth and profitability.
A.S.S’S College of Business Administration, Gadag-Betgeri
VRL LOGISTICS Ltd Varur-Hubli
BIBLIOGRAPHY:
A.S.S’S College of Business Administration, Gadag-Betgeri
BIBLIOGRAPHY
VRL LOGISTICS Ltd Varur-Hubli
Financial Management : Khan & Jain.
Financial Management : I. M. Panday
Annual Report VRL
www.vrllogistics.com .
www.google.com.
A.S.S’S College of Business Administration, Gadag-Betgeri