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WORKING CAPITAL MANAGEMENT Submitted by : Geeti Gourav Pati
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working capital manegment

Aug 20, 2015

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Page 1: working capital manegment

WORKING CAPITAL MANAGEMENT

Submitted by : Geeti Gourav Pati

Page 2: working capital manegment

What is working capital?

• Working capital is that it is the flow of capital required for the day-to-day running of operations. Generally, the longer the business cycle the more working capital you require.

• Working capital is required to ensure that a firm is able to continue its operations and has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses.

Page 3: working capital manegment

CONCEPT

• Gross working capital:Gross working capital is the total cash and cash equivalents, that a business has on-hand.

• Net working capital:Net working capital refers to its current assets minus its current liabilities. The result measures the current liquidity of the company and its ability to repay creditors.

Page 4: working capital manegment

OBJECTIVE

• Study the level of current assets and current liabilities year to year basis.

• Study the level of working capital.

• Study the liquidity and profitability position of the company.

• Study the pattern of financing of the company (whether conservative or aggressive).

• Comment on the effectiveness of working capital management with respect to Inventory and receivables management.

Page 5: working capital manegment

TATA MOTORS MARUTI SUZUKI

V/S

Page 6: working capital manegment

TATA MOTORS

1 2 3 4 5 6 7 8 9 100.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

WCSALES

Page 7: working capital manegment

ITR V/S INVENTORY

1 2 3 4 5 6 7 8 9 100.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

ITR

ITR

1 2 3 4 5 6 7 8 9 100.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

INVENTORY

INVENTORY

Page 8: working capital manegment

RTR V/S DEBTOR

1 2 3 4 5 6 7 8 9 100

5

10

15

20

25RTR

RTR

1 2 3 4 5 6 7 8 9 100.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00DEBTOR

DEBTOR

Page 9: working capital manegment

1 2 3 4 5 6 7 8 9 10

-0.2

0

0.2

0.4

0.6

0.8

1

CRNET PROFIT MARGIN

NET PROFIT MARGIN V/S CR

Page 10: working capital manegment

LIQUDITY V/S PROFITABILITY

1 2 3 4 5 6 7 8 9 100

5000

10000

15000

20000

25000

30000

35000

40000

45000LIQUIDITY

LIQUIDITY

1 2 3 4 5 6 7 8 9 100

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16PROFITABILITY

PROFITABILITY

Page 11: working capital manegment

MARUTI SUZUKI

1 2 3 4 5 6 7 8 9 100.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.00

50,000.00

WCSALES

Page 12: working capital manegment

ITR V/S INVENTORY

1 2 3 4 5 6 7 8 9 100.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

ITRINVENTORY

Page 13: working capital manegment

RTS V/S DEBTOR

1 2 3 4 5 6 7 8 9 100.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

RTRDEBTOR

Page 14: working capital manegment

NET PROFIT MARGIN V/S CR

1 2 3 4 5 6 7 8 9 100

0.2

0.4

0.6

0.8

1

1.2

1.4

NET PROFIT MARGINCR

Page 15: working capital manegment

LIQUDITY V/S PROFITABILITY

1 2 3 4 5 6 7 8 9 100

500

1000

1500

2000

2500

3000

3500

4000

PROFITABILITY LIQUIDITY

Page 16: working capital manegment

ASIAN PAINTS AND

BERGER PAINTS

Page 17: working capital manegment

ASIAN PAINTS

1 2 3 4 5 6 7 8 9 10

-4,000.00

-2,000.00

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

SALESWORKING CAPITAL

Page 18: working capital manegment

ITR V/S INVENTORY

1 2 3 4 5 6 7 8 9 100

1

2

3

4

5

6

7

8

9 ITR

ITR

1 2 3 4 5 6 7 8 9 100.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00INV

INV

Page 19: working capital manegment

RTR V/S DEBTOR

1 2 3 4 5 6 7 8 9 100

2

4

6

8

10

12

14

16RTR

RTR

1 2 3 4 5 6 7 8 9 100.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00DEBTOR

DEBTOR

Page 20: working capital manegment

NET PROFIT MARGIN V/S CR

1 2 3 4 5 6 7 8 9 100

0.1

0.2

0.3

0.4

0.5

0.6

NET PRO MARGINCR

Page 21: working capital manegment

BERGER PAINTS

1 2 3 4 5 6 7 8 9 10

-500.00

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

SALESWORKING CAPITAL

Page 22: working capital manegment

NET PROFIT MARGIN V/S CR

1 2 3 4 5 6 7 8 9 100

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

NET PRO MARGINCR

Page 23: working capital manegment

MAHINDRA INDIA AND

BAJAJ AUTO INDIA

Page 24: working capital manegment

MAHINDRA INDIA

1 2 3 4 5 6 7 8 9 10

-10,000.00

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

SALES WORKING CAPITAL

Page 25: working capital manegment

NET PROFIT MARGIN V/S CR

1 2 3 4 5 6 7 8 9 100

0.5

1

1.5

2

2.5

NET PRO MARGINCR

Page 26: working capital manegment

NET PROFIT MARGIN V/S CR

1 2 3 4 5 6 7 8 90

0.2

0.4

0.6

0.8

1

1.2

1.4

NET PRO MARGINCR

Page 27: working capital manegment

AIRTEL AND

RELIANCE TELECOM

Page 28: working capital manegment

AIRTEL

1 2 3 4 5 6 7 8 9 10

-35,000.00

-30,000.00

-25,000.00

-20,000.00

-15,000.00

-10,000.00

-5,000.00

0.00

WC

WC

1 2 3 4 5 6 7 8 9 100.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

90,000.00

100,000.00

SALES

SALES

Page 29: working capital manegment

ITR V/S INVENTORY

1 2 3 4 5 6 7 8 9 100

100

200

300

400

500

600

700

800

900

1000

ITRINVENTORY

Page 30: working capital manegment

RTR V/S DEBTOR

1 2 3 4 5 6 7 8 9 100

2

4

6

8

10

12

14

16

RTR

RTR

1 2 3 4 5 6 7 8 9 100.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00DEBTOR

DEBTOR

Page 31: working capital manegment

NET PROFIT MARGIN V/S CR

1 2 3 4 5 6 7 8 9 100

0.1

0.2

0.3

0.4

0.5

0.6

NET PROFIT MARGINCR

Page 32: working capital manegment

RELIENCE

1 2 3 4 5 6 7 8 9 100.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

300,000.00

350,000.00

400,000.00

450,000.00

500,000.00

WCSALES

Page 33: working capital manegment

ITR V/s INVENTORY

1 2 3 4 5 6 7 8 9 100.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

INVENTORY

INVENTORY

1 2 3 4 5 6 7 8 9 100

1

2

3

4

5

6

7

8

9

10

ITR

ITR

Page 34: working capital manegment

RTR AND DEBTOR

1 2 3 4 5 6 7 8 9 100.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

RTRDEBTOR

1 2 3 4 5 6 7 8 9 100.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

DEBTOR

DEBTOR

Page 35: working capital manegment

Dabur and

P&G

Page 36: working capital manegment

DABUR

1 2 3 4 5 6 7 8 9 100.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

WCSALES

Page 37: working capital manegment

ITR AND INVENTORY

1 2 3 4 5 6 7 8 9 100.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00ITR

ITR

1 2 3 4 5 6 7 8 9 100

200

400

600

800

1000

1200INVENTORY

INVENTORY

Page 38: working capital manegment

RTR AND DEBTOR

1 2 3 4 5 6 7 8 9 100

100

200

300

400

500

600

700

800

DEBTORRTR

Page 39: working capital manegment

CR AND NET PROFIT MARGIN

1 2 3 4 5 6 7 8 9 100

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

CRNET PROFIT MARGIN

Page 40: working capital manegment

P&G

1 2 3 4 5 6 7 8 9 10

-10,000.00

-8,000.00

-6,000.00

-4,000.00

-2,000.00

0.00

2,000.00

4,000.00

6,000.00

8,000.00

SALESWC

Page 41: working capital manegment

ITR AND INVENTORY

1 2 3 4 5 6 7 8 9 100.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

ITR

ITR

1 2 3 4 5 6 7 8 9 100.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

INVENTORY

INVENTORY

Page 42: working capital manegment

RTR AND DEBTOR

1 2 3 4 5 6 7 8 9 100

0.5

1

1.5

2

2.5

3

3.5

RTR

RTR

1 2 3 4 5 6 7 8 9 100.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

DEBTOR

DEBTOR

Page 43: working capital manegment

NET PROFIT MARGIN AND CR

1 2 3 4 5 6 7 8 9 10

-0.5

0

0.5

1

1.5

2

CRNET PROFIT MARGIN

Page 44: working capital manegment

CONCLUSION

Thus working capital management is the most prominent function of the company because it wakeup the firms operations for long term or short term purpose. Cash on hand is not a big deal but proper utilization of the capital becomes the overcome of all the issues faced by the company.

Page 45: working capital manegment

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