...WORKING CAPITAL PERFORMANCE ANALYSIS OF HINDUSTAN UNILEVER LIMITED COMPANY An Overview of FMCG Companies in India Fast Moving Consumer Goods (FMCG) goods are all consumable items (other than groceries/pulses) that one needs to buy at regular intervals. These are items which are used daily, and so have a quick rate of consumption, and a high return. FMCG can broadly be categorized into three segments which are: 1. Household items as soaps, detergents, household accessories, etc, 2. Personal care items as shampoos, toothpaste, shaving products, etc and finally 3. Food and Beverages as snacks, processed foods, tea, coffee, edible oils, soft drinks etc. Global leaders in the FMCG segment are Nestlé, ITC, Hindustan Unilever Limited, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi, Gillette etc. A look at some factors that will drive growth in this sector: * Increasing rate of urbanization, expected to see major growth in coming years. * Rise in disposable incomes, resulting in premium brands having faster growth and deeper penetration. * Innovative and stronger channels of distribution to the rural segment, leading to deeper penetration into this segment. * Increase in rural non-agricultural income and benefits from government welfare programmes. * Investment in stock markets of FMCG companies, which are expected to grow constantly. Objectives The study aims at analyzing the working...
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...A Project Report Entitled Study of Working Capital Management of Jain Irrigation System Ltd. (JISL) Submitted in partial fulfillment of Post-Graduate Degree Master in BusinessAdministrat ion TO University of Pune -: Submitted By:- Santosh Deoram Watpad e -: The Research Guide:- Prof. Shekhar Paranjpe -:For The Academic Year:- 2007-09 INSTITUTE OF MANAGEMENT Jain Irrigation Systems Ltd. MET s Institute Of Management, BHUJBA L KNOWLEDGE CITY, MET League of Colleges, Adgaon, Nasik - 422 003 1 ACKNOWLEDGEMENT It gives me immense pleasure to present this project report on Working Capital Management carried out at Jain Irrigation Systems Ltd. In partial fulfillment of post-graduate course M.B.A. No work can be carried out without the help and guidance of various persons. I am happy to take this opportunity to express my gratitude to those who have been helpful to me in completing this project report. At the outset I would like to thank Mr. S.R. Gohil sir Head of Dept. (Accounts) for their valuable advice and guidance during my project completion, also MR. Jain Sir (Head of bill passing dept.) and Mr. M.C. Mangal sir (Head of SQC. dept.) for timely help concerning various aspects of project. I also thanks to all staff members of account department for help me to complete the summer internship program. I would be failing in my duty if I do not express my deep sense of gratitude to Prof. Shekhar Paranjpe sir without his guidance it wouldn t...
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...Finance / under West Bengal State University, Barasat) Title of the Project WORKING CAPITAL MANGEMENT IN MARUTI SUZUKI INDIA.LTD Submitted by Name of the Candidate: TANUMOY ROY Registration No. : 13611131114020870 OF 2011-12 Name of the College: RBC EVENING COLLEGE College Roll No: 21 Supervised by Name of the Supervisor MR RANJIT KUMAR DUTTA Name of the College: RBC EVENING COLLEGE Month & Year of Submission FEB 2014 ACKNOWLEDGEMENT I would like to thank our head of the department (HOD) Mr. Ranjit Kumar Dutta, for giving necessary support during the course. Chapter No. | Particulars | Page No. | 1. | INTRODUCTION | 4-7 | 2. | AUTOMOBILE INDUSTRY SCENARIO IN INDIA | 8 | 3. | PRESENTATION OF DATA, ANALYSIS, FINDING | 9-11 | 4. | CONCLUSION,RECOMMENDATION,LIMITATION | 12 | 5. | BIBLOGRAPHY AND REFERANCES | 13 | 6. | SUPERVISER CERTIFICATE | 14 | 7. | STUDENT DECLARATION | 15 | CONTENTS INTRODUCTION 1.1CONCEPT OF WORKING CAPITAL The term working capital is used to mean that proportion of working capital of a business which is employed in short Term or current operations. There are two type of working capital: gross and net. Gross working capital is the sum total of all current asset, while net working capital is the difference between current asset and current liabilities. IMPORTANCE OF WORKING CAPITAL * The business can avail the advantages of cash discount facilities offered...
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...Impact of Working Capital Management on Profitability 1 IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY Impact of Working Capital Management on Profitability of Textile Sector of Pakistan Sumaira Tufail Hailey College of Commerce University of the Punjab, Lahore Sumaira_08sep@yahoo.com This paper has been presented in the organized by School of Business and Economics University of Management and Technology, Lahore, Pakistan This paper has been included in the conference proceedings with good intentions, where the conference and its organizers are not liable at all for the contents of this paper and / or any part of it. For more information about the conference please visit the conference website: http://cgr.umt.edu.pk/icobm2013/index.html or write the organizers at icobm@umt.edu.pk Proceedings of 3rd International Conference on Business Management (ISBN: 978-969-9368-07-3) Impact of Working Capital Management on Profitability 2 ABSTRACT Working capital can be considered as source of existence for a financial body and management of working capital is regarded as one of the most essential part of business management. This study aims to find out the impact of working capital policies on profitability. Return on assets is used as a measure of profitability. Current assets to total assets ratio is used to compute the investment policy of working capital management and to determine financing policy of working capital management current liabilities to total assets ratio...
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...A STUDY ON FINANCIAL ANALYSIS IN RANE ENGINE VALVES PVT LTD AT ALANTHUR A Project Report Submitted by P.KOKILA (30307631027) Under the guidance of Mr.P.Ganesh,M.com,M.B.A,M.phil,(Ph.D) FACULTY OF MANAGEMENT STUDIES In partial fulfillment of the requirements for the award of the degree of MBA IN Department of Management Studies Anand Institute Of higher Technology ANNA UNIVERSITY CHENNAI 600 025 JUNE 2009 I BONAFIDE CERTIFICATE Certified that this project report titled “A Study on Financial Analysis in Rane Engine Valves Pvt Ltd at Alanthur “is the bonafide work of Mr./Ms.KOKILA.P (Registration Number: 30307631027)Who carried out the research under my supervision. Certified further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertion on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate. Internal Guide Head of the Department (P.Ganesh,M.Com., M.B.A.,M.Phil,( Ph.D.) (Dr.M.Kavitha, M.B.A, M.Phil, PhD.) Submitted to Project and Viva Examination held on_____________. Internal Examiner External Examiner II KOKILA.P (Registration Number: 30307631027) II MBA ANAND INSTITUTE OF HIGHER TECHNOLOGY, KAZHIPATTUR - 603103 DECLARATION I hereby declare that the project entitled A Study on Financial Analysis in Rane Engine Valves Pvt Ltd at Alanthur in partial fulfillment of the requirements...
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...Working Capital Structure and Financing Pattern of Mauritian SMEs Kesseven Padachi*; C. Howorth[1]; M. S. Narasimhan[2] and R. Durbarry3 *School of Business, Management and Finance University of Technology, Mauritius La Tour Koenig, Pointe – aux – Sables, Mauritius kpadachi@utm.intnet.mu ABSTRACT The competitive nature of the business environment requires firms to adjust their strategies and adopt good financial policies to survive and sustain growth. Most firms have an important amount of cash invested in current assets, as well as substantial amounts of current liabilities as a source of financing. This paper therefore analyses the working capital structure and financing pattern of small to medium-sized Mauritian manufacturing firms, using primarily secondary data. Structural differences in working capital and the financing pattern of the sample firms are analysed and the results showed significant structural changes over the study period. The research finding revealed disproportionate increase in current asset investment in relation to sales resulting in sharp decline in working capital turnover. The analysis also revealed an increasing trend in the short-term component of working capital financing; in particular trade credit and other payables have financed the major part of working capital. This over-concentration on short-term funds is a reality of the SMEs as they often faced difficulties in raising finance and they are viewed to be informationally opaque....
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...BBC PVT. LTD. AND WORKING CAPITAL CHALLENGES | Case Study Report | Table of Contents * Case Background 3 * Key Findings 4 * Recommendations 6 * References 11 * Exhibits 11 Case Background BBC Pvt. Ltd, is a chemical manufacturing company that was established in 2004. It's registered offices are in Bangalore, and its manufacturing is in Lucknow. At the time of the case BBC is in need of working capital to secure a major contract with Indian Railways. The contract would open doors for long term business. BBC's product manufacturing required minimal fixed assets investment and high quality production. Their product was low cost high quality which is a great business strategy. They were able to provide to their customer the marginal price which made their product more attractive. Furthermore, most of their sales were on credit terms. BBC was very conservative with their working capital management. Its assets were ten times that of their liabilities. They repaid their creditors quickly before the credit period ended, but on the other token they were lenient with their customer’s credit terms. The excess credit to their customers caused excessive blockage to their working capital. Key Findings: BBC has a promising contract in their hands, but must invest a large amount of money immediately. We must determine how they can obtain and manage their funds to upgrade the facility to secure...
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...| | | |II. COURSE DESCRIPTION | |Students will gain a working knowledge of financial management by learning to develop a systematic approach to financial analysis; to apply techniques for | |planning, forecasting, and managing; as well as to evaluate and recommend improvements in the organization's financial performance. | | | |III. PREREQUISITES | | | |FIN 5001 OR FINP 5008 and ACTP 5001 | | | |IV. LEARNING OUTCOMES ...
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...indicate whether a company can continue without going concern problem. Working capital is subtractive between current assets and current liabilities, and it is helpful to increase firm’s profitability in the short term but taking a risk of insolvency. Manager of a firm are desired to find a balance between liquidity and profitability to improve cash flow and maximize shareholder’s wealth. As soon as a company starts to run its business, it comes the decision and strategy about how much cash or inventory should be hold, how to financing and investing funds, how much debt to take and how long for the payment periods. Those decisions have serious influences on business cash flow and profitability. The Meaning of Working Capital The way to calculate working capital is: Working capital = Current Assets – Current Liabilities “Current assets may include inventories of raw materials, work-in-progress and finished goods, trade receivables, short-term investments and cash, while current liabilities may include trade payables, overdrafts and short-term loans.” (See table 1) “Working capital is the result of subtracting current liabilities from current assets. It is a measure of a company's solvency, its capacity to make large purchases and take advantage of bulk discounts, and its ability to attract customers by offering advantageous credit terms” (Conrad Carlberg, April 2, 2008) “Net working capital represents the excess of current assets over current liabilities and is...
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...Case Study “A study of Working Capital Management -Policies and Practices at SABMiller India” Author - Dr Anubha srivastava Sr. lecturer (Finance) Amity Business School Noida Co-Author Pankaj Ishpujani Management trainee HCL B Serve Noida Summary Indian beer market is valued at INR 41 billion for the year ending 31st march 2010 and it is expected to grow at 17.2% for the next year. Indian growth rates compare favorably with the global beer industry. Foreign brewers are eyeing the Indian beer market which is largely untapped and has growth potential. Apart from providing strong growth, India also provides attractive profit margins due to the consolidated nature of the industry. The effect of this consolidation can be seen in the fact that beer prices in India rarely go down with the competitive pressures of new product or brand launches. In the past, whenever beer prices have gone down, it has been due to either the lowering of duties by the government or the deregulation of distribution (leading to lower margins for the distribution channel partners). The Indian beer market has been growing rapidly over the last 10 years, due to the positive impact of demographic trends and expected changes, like: ➢ Rising income levels ➢ Changing age profile ➢ Changing lifestyles The case study attempts to calculate various ratios and working capital requirement of SABMiller India and compare it with the market...
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...Report - Working Capital Management WORKING CAPITAL - Meaning of Working Capital [pic][pic][pic][pic][pic]Capital required for a business can be classified under two main categories via, 1) Fixed Capital 2) Working Capital Every business needs funds for two purposes for its establishment and to carry out its day- to-day operations. Long terms funds are required to create production facilities through purchase of fixed assets such as p&m, land, building, furniture, etc. Investments in these assets represent that part of firm’s capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purposes for the purchase of raw material, payment of wages and other day – to- day expenses etc. [pic][pic][pic][pic][pic]These funds are known as working capital. In simple words, working capital refers to that part of the firm’s capital which is required for financing short- term or current assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in current assts keep revolving fast and are being constantly converted in to cash and this cash flows out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital or short term capital. CONCEPT OF WORKING CAPITAL There are two concepts of working capital: 1. Gross working capital 2. Net working capital The gross working capital is the...
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...Project Report - Working Capital Management WORKING CAPITAL - Meaning of Working Capital Capital required for a business can be classified under two main categories via, 1) Fixed Capital 2) Working Capital Every business needs funds for two purposes for its establishment and to carry out its day- to-day operations. Long terms funds are required to create production facilities through purchase of fixed assets such as p&m, land, building, furniture, etc. Investments in these assets represent that part of firm’s capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purposes for the purchase of raw material, payment of wages and other day – to- day expenses etc. These funds are known as working capital. In simple words, working capital refers to that part of the firm’s capital which is required for financing short- term or current assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in current assts keep revolving fast and are being constantly converted in to cash and this cash flows out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital or short term capital. CONCEPT OF WORKING CAPITAL There are two concepts of working capital: 1. Gross working capital 2. Net working capital The gross working capital is the capital invested in the total current assets of the enterprises current assets...
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...International Review of Business Research Papers Vol.3 No.1. March 2007, Pp.279 - 300 Working Capital Management And Profitability – Case Of Pakistani Firms Abdul Raheman* and Mohamed Nasr ** Working Capital Management has its effect on liquidity as well on profitability of the firm. In this research, we have selected a sample of 94 Pakistani firms listed on Karachi Stock Exchange for a period of 6 years from 1999 – 2004, we have studied the effect of different variables of working capital management including the Average collection period, Inventory turnover in days, Average payment period, Cash conversion cycle and Current ratio on the Net operating profitability of Pakistani firms. Debt ratio, size of the firm (measured in terms of natural logarithm of sales) and financial assets to total assets ratio have been used as control variables. Pearson’s correlation, and regression analysis (Pooled least square and general least square with cross section weight models) are used for analysis. The results show that there is a strong negative relationship between variables of the working capital management and profitability of the firm. It means that as the cash conversion cycle increases it will lead to decreasing profitability of the firm, and managers can create a positive value for the shareholders by reducing the cash conversion cycle to a possible minimum level. We find that there is a significant negative relationship between liquidity and profitability. We also find that...
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...| 2015 WORKING CAPITAL MANAGEMENT AND PROFITABILITY IN SUGAR INDUSTRY OF PAKISTAN Muhammad Ehsan Javaid Leghari PhD Management Sciences COMSATS Institute of Information Technology Islamabad, Pakistan Email:muhammadehsanjavaid@yahoo.com ABSTRACT Working capital management is necessary for profitability. In this study working capital management of sugar industry and its impact on profitability is checked from 2002 to 2012. Total observations are 308 while 28 companies listed at Karachi Stock Exchange are in sample. Correlation and pooled panel data regression analysis is performed. Results show that day’s inventory, cash conversion cycle, cash ratio, account receivable to sale ratio, short term investment ratio, secured short term obligation and fixed asset ratio are negatively affecting profitability of firm. Whereas quick ratio, days account receivable and working capital are positively affecting profitability. Key words: Return on Asset, Cash Conversion Cycle, Secured Short Term Obligations, Cash Ratio, Account Receivable to Sale INTRODUCTION In finance field two extensively examined areas are capital structure and working capital management. It is matter of great importance both for researchers and corporate individuals to figure out firm’s value and profitability. Working capital management has a direct impact on the firm profitability along with reducing the liquidity risk. Liquidity is one face of coin and profitability is other. It clarify that working capital management...
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...International Review of Business Research Papers Vol.3 No.1. March 2007, Pp.279 - 300 Working Capital Management And Profitability – Case Of Pakistani Firms Abdul Raheman* and Mohamed Nasr ** Working Capital Management has its effect on liquidity as well on profitability of the firm. In this research, we have selected a sample of 94 Pakistani firms listed on Karachi Stock Exchange for a period of 6 years from 1999 – 2004, we have studied the effect of different variables of working capital management including the Average collection period, Inventory turnover in days, Average payment period, Cash conversion cycle and Current ratio on the Net operating profitability of Pakistani firms. Debt ratio, size of the firm (measured in terms of natural logarithm of sales) and financial assets to total assets ratio have been used as control variables. Pearson’s correlation, and regression analysis (Pooled least square and general least square with cross section weight models) are used for analysis. The results show that there is a strong negative relationship between variables of the working capital management and profitability of the firm. It means that as the cash conversion cycle increases it will lead to decreasing profitability of the firm, and managers can create a positive value for the shareholders by reducing the cash conversion cycle to a possible minimum level. We find that there is a significant negative relationship between liquidity and profitability. We also find that...
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