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MBA PROJECT ON MBA

Oct 30, 2015

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Working capital Mnagement

EXECUTIVE SUMMARY

A Project report on

WORKING CAPITAL MANAGEMENT

With reference to

SUJALA PIPES PVT LTD

Submitted in partial fullfillment of the

Requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted By

D.VIKRANTH

Redgno:( 1980863030 )

(2007-2009)

Under the esteemed guidance of

Prof.D.V.RAMANA

DEPARTMENT OF MANAGEMENT STUDIES,

S V U COLLEGE OF C M I S,

SRI VENKATESWARA UNIVERSITY,

TIRUPATI-515702

2007-09

DECLERATIONI declared that this project report entitled A STUDY ON working capital management with reference to SUJALA PIPES PVT LTD in NANDYAL is original and bonfire work of my own in the partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION and submitted to the post graduate department of management, S V U COLLEGE OF COMMERCE, MANAGEMENT AND INFORMATION SCIENCES, SRI VENKATESWARA UNIVERSITY, TIRUPATI.,under the guidance of Prof.D.V.RAMANA and has not been copied from any earlier reports. The empirical conclusions and findings on this report are based on the information collected by me.

Place:

Date:

(D.VIKRANTH)

Acknowledgement

I would like to express my sincere gratitude to the following people without whose support, help and encouragement, this project would not have reached its successful completion.

I would like to express my gratitude to Prof. P. BALAJI PRASAD Head of the Department, guide Prof.D.V.RAMANA lecturer of their magnanimous support in making this project a success.

I would like to thank the H.R manager, FINANCIAL manager & all the members who have guided me to complete this project work General Manager costing, remitting to me to undertake this project.

Last but not least, I would like to express my gratitude to all other members of the faculty, Department of management Studies, for continuous guidance and cooperation

(D.VIKRANTH)

CONTENTSChapter Title

Page No.

1. Introduction

6 - 8

2. Profile

Industry profile

9 - 12

Company profile

13 - 23

3.

Review of literature

24 -51

4.

Data analysis and Interpretation

52 - 64

5.

Findings & Suggestions

65 - 66

6.

Bibliography

67

conclution

68

LIST OF TABLES

Sl. NoTitle of the TablePage No

1

2

Working capital analysis

Ratio Analysis

Current Ratio

Quick Ratio

Cash Ratio

Net Working Capital turnover Ratio

Net working capital ratio52-56

57

59

62

63

61

LIST OF GRAPHSSl.NoTitle of the GraphPage No

1

2

3

4

5Current Ratio

Quick Ratio

Cash Ratio

Net working Capital Ratio

Net working Capital Turnover Ratio58

60

62

61

63

EXECUTIVE SUMMARY

Company Profile:

Sujala pipes (p) ltd., is commissioned with the objective of catering the agricultural needs of the region. A dynamic entrepreneur Sri S.P.Y.Reddy who is basically a mechanical engineer started a unit at Nandyal those manufacturers black pipes. This resulted information of private ltd., company called Sujala Pipes Pvt. Ltd.,

In the year 1995 it diversified into other products like milk products mineral water, super market etc., its greatest achievements are taking over sagar pipes in 1997 and monarch pipes in 1999 who are major competitors at that time. At present the major competitors are sudhakar & finolex pipes. It has its market presence in four states in south India (A.P, T.N, Karnataka, and Kerala).

INTRODUTION:

Working capital signifies funds required for day to day business operation of the organization. Working capital management refers to the administration of all aspects of current assests and current liabilities.

It refers to the firms investment in current assests. It is defined as excess of current assests over current liabilities. In other words, it is the net current assests or net working capital

NEED AND IMPORTANCE OF THE STUDY:

Working capital management plays a vital role in any organization and one should have a through knowledge about the working capital position.

In view of this context, I have undertaken this study and it would be a great advantage to the company also to know its working capital.

OBJECTIVES OF THE STUDY:

Primary objective:

To find out the working capital position of the company for the last five financial years.

Secondary objective:

To know the liquidity position of the firm.

To study the profitability of the company

RESEARCH METHODOLOGY : The data collected from both primary and secondary data.

Primary data

Primary data has been collected through personal interviews with the financial department and the executives.

Secondary data

Secondary data collected from the records like B/S, income statement and necessary records and website (www.nandipipes.com).

LIMITATIONS:

Confidential matters like financial position, soundness etc, are naturally not disclosed fully. This is certainly set back while drawing the conclusions.

The study is based on five annual reports only. The information

from annual reports is insufficient to calculate few ratios.

Limited time does not allowed to do more analysis.

FINDINGS

The current ratio is mostly constant for first 4 years and highly increased in last year 2006-2007

The companies net working capiotal turnover ratio is increasing corresponding maximum increase is 16.8 The working capital ratio is gradually increasing from year after yearThe maximum ratio is 0.46

The cash ratio is gradually reaching the standered normSUGGESTIONS

The company should keep more current assets such as cash & bank balances short-term investment to meet its increasing liabilities. By that the company can able to have a better liquidity position.

The company has to take necessary steps to establish effective working capital management ( which maintains adequate working capital required for the business). In the view of increasing current liabilities and less allocations of resources towards working capital..

As of now, the company has maintained good financial position by controlling the current liabilities and other expenses, it has suggested that the company should maintain the same performance in the future.

INDUSTRY PROFILE

Plastics have becomes synonymous with modern living. It is undoubtedly a product, which has penetrated extensively into the common mans life. No wonder the industry has achieved in terms of supply of raw materials, expansion and diversification of processing capacities and manufacturing of processing machinery and ancillary equipment.

The versatile material with its superior qualities such as light weight, easy process ability, corrosion resistance, energy conservation, non toxicity etc., may substitute to a large extent, many conventional and costly industrial materials like wood, metal, glass, jute, leather etc., on the automobiles, electronics, packaging and agriculture give enough evidence of the immense utility of plastics.

At present 80% of total requirement of raw material and almost all types of plastic machines required for the industry and indigenously available. The present investment in all three segment of the industry, namely production of raw materials, expansion and diversification of processing equipment in Rs.1,250 crores and it provides employment to more than eight lakh people.

Plastics have been subject to level not only at the central, but at state, and local government levels. These levels have affected the price of plastic of production adversely, because of their inherent advantage in properties and versatile in adaptation and use, plastics have come to play a vital role in a variety of applications over the world. In our country, plastics are used in essential consumer goods of daily use for common man such as baskets, shopping bags tiffany boxes, hair combs, tooth brushes, spectacle frames and fountain pens etc., they also find applications in field like packaging and automobiles and transportation, engineering, electronics, telecommunications, defense, medicine, building and other construction plastics and its importance is also growing infield like agriculture and water management.

The govt of India recognizing the importance of plastics in Agriculture, appointed on March 7th, 1981. National committee on the use of plastics in agriculture under the chairmanship of Dr.G.V.K.Rao. The committee has forecast a tremendous growth of drip irrigation through a network of plastic pipes and tubes. In its opinion, large-scale adoption of irrigation would lend to support in demand for PVC pipes LDPE tubes and polypropylene emitters. The committee has highlighted the importance of the use of PVC resin in the manufacture of rigid pies, flexible pipes and sheeting, which are being used for agricultural operations to carry water for one place to another and also linen of ponds and reservoirs to reduce see page and most important, in drip irrigation system.

Engineering plastics are being increasingly used for variou

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