domestic presentation

8/3/2019 Domestic Presentation

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A

Presentation

Of

M/s MULTIMETALS LTD., KOTA

ON

MANAGEMENT OF WORKING CAPITAL

Submitted by Jogender Singh Chauhan

MBA-618

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Contents

Company Profile

Objective of the Study Research Methodology

Training Profile

Data Analysis & Interpretation

Conclusion

Recommendation & Suggestion

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Company Profile

Situated at Heavy Industrial Area, Kota.

Promoters sine 2004-05, Mr. R Agrawal & Mr. V. Agrawal

First manufacturer in India of world class Copper andCopper alloys tubes with latest technology

Founded in 1962 in Joint Venture with Revere Copperand Brass Inc. USA

Had Technical Collaboration with Hitachi Copper Japan

Has won 11 Export Excellence awards First non-ferrous tubes company to have ISO-9002:1994

Presently having ISO 9001:2008.

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Objective of the study

Working capital management.

optimum level of current assets and current

liabilities liquidity position through various working capital

related ratios.

Working capital components such as receivablesaccounts, cash management, Inventory position.

Way and means of working capital finance.

Estimate the working capital requirement.

Operating and cash cycle.

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Research Methodology

Title of the Study A Study of WorkingCapital and its Management.

Duration of Training 45 Days

[16.06.2010 to 05.08.2010]

Type of Research- Analytical

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Basis of Study

Annual report of MML for the Financial year 2005-06





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Particulars 2006 2007 2008 2009 2010

LIABILITIES

Share capital 1845 1845 1845 1845 1845Reserve and surplus 359 326 297 1 60Secured Loans 1331 1681 2048 2311 1681Unsecured Loans 973 1282 587 1842 2965Current liabilities [Creditors] 1443 1582 2287 669 2360Provisions 161 182 304 425 439Deferred Tax Liabilities 0 0 118 66 34

TOTAL 6112 6898 7487 7159 9385

ASSTTSFixed Assets

Gross Block 0 0 0 4487 4380Less: - Depreciation 0 0 0 3759 3696Net Block 881 952 1126 728 684

Misc. Expenditure 7 6 5 5 4P & L A/c 1099 900 551 275 0Current Assets

Inventories 2086 2929 2788 3644 4072Sundry Debtors 1165 1295 2041 718 2633Cash & Bank Bal. 296 198 349 321 297Deferred Tax Assets 337 61 0 0 0Loan & Advances 242 558 626 1469 1696

TOTAL 6112 6898 7487 7159 9385

BALANCE SHEET[In Lakhs]

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Working Capital Mgmt.

Working capital management is concerned

with the problems arise in attempting to

manage the current assets, the current

liabilities and the interrelationship that exist

between them.

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Working Capital

Working Capital may be defined as -

Difference between Current Assets and

Current Liabilities

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Particulars 2005-06 2006-07 2007-08 2008-09 2009-10

A) Current Assets

Inventories 2086 2929 2788 3644 4072

Sundry Debtors 1165 1295 2041 718 2633

Cash & Bank Bal. 296 198 349 321 297

Deferred Tax Assets 337 61 0 0 0

Loan & Advances 242 558 626 1469 1696

Total of A (Gross W.C.) 4125 5040 5804 6152 8698

A) Current Liabilities

Current liabilities 1443 1582 2287 669 2360

Provisions 161 182 304 425 439

Total of B 1604 1764 2591 1095 2799

Net W.C. (A-B) 2521 3277 3213 5057 5899

Working Capital Level

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Working Capital Trend Analysis

W.C. Indices

100

130 127

201

234

0

50

100

150

200

250

2005-06 2006-07 2007-08 2008-09 2009-10

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30%

57%


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Current Ratio

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Current Ratio

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Ratio Current

Ratio

2.57 2.86 2.24 5.62 3.11

idealRatio


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Component of Current Assets

Particulars 2005-06 2006-07 2007-08 2008-09 2009-10

Inventories 51 58 48 59 47

Sundry Debtors 28 26 35 12 30

Cash & Bank Bal. 7 4 6 5 3

Deferred Tax Assets 8 1 0 0 0

Loan & Advances 6 11 11 24 19

Total of 100 100 100 100 100

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Component of Current Assets

Current Assets Components in %

0

10

20

30

40

50

60

70

2005-06 2006-07 2007-08 2008-09 2009-10

Financial Year

%

Inventories

Sundry

Debtos

Cash & Bank

Bal.

Deferred Tax

Assets

Loan &Advances

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Component of Current Liabilities

C.L. Indices

100

110

162

68

175

0

20

40

60

80

100

120

140

160

180

200

2005-06 2006-07 2007-08 2008-09 2009-10

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Operating Cycle of MML

Particulars 2005-06 2006-07 2007-08 2008-09 2009-10Raw Material holdingperiod 51 32 24 43 48

WIP Period

36 45 66 67 61

Finished goods holding 13 13 13 24 23

Receivable collectionperiod 34 40 51 44 46

Gross Operating

Cycle 134

130

153

178

178

Less: - CreditorsPayment period 49 59 81 65 55Net Operating Cycle 85 72 72 113 123

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Operating Cycle of MML

Net Operating Cycle

85

72 72

113123

0

20

40

60

80

100

120

140

2005-06 2006-07 2007-08 2008-09 2009-10

Financial Year

No.

ofday's

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Component of Operating Cycle

Component of Operating Cycle

0

10

20

30

40

50

60

70

80

90

2005-06 2006-07 2007-08 2008-09 2009-10

Financial Year

No.ofday's

Raw Material

holding period

WIP Period

Finished

goods holding

Receivable

collectionperiodCreditors

Payment

period

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Conclusion

Working capital of the company was increasing andshowing positive working capital per year.

Positive working capital indicates that company hasthe ability of payments of short terms liabilities

Working capital increased because of increment inthe current assets is more than increase in thecurrent liabilities

Companys current assets were always more thanrequirement it affect on profitability of the company.

Contd.2.

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Conclusion

Current assets components shows inventory anddebtor were the major part in current assets it showsthe inventory turnover Ratio is more and the

inefficient receivables collection management. In the year 2007-08 working capital decreased

because of increased the expenses as manufacturingexpenses and increase the price of raw material as

increased in the inflation rate. Inventory was supporting to sales, thus inventory

turnover ratio was increasing, but company increasedthe WIP period and Finished goods holding period.

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Recommendation & Suggestion

Company should raise funds through short termsources for short term requirement of funds, whichcomparatively economical as compare to long term

funds. Company should take control on debtors collection

period which is major part of current assets.

Company has to take control on cash balance

because cash is non earning assets and increasingcost of funds.

Company should reduce the inventory holding periodwith use of zero inventory concepts.

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Thank

U10/03/2011

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