jibu hmt working capital management project

A STUDY ON WORKING CAPITAL MANAGEMENT IN

HMT MACHINE TOOLS, KALAMASSERY

Project Report submitted by

JIBU AB

REGISTER No: 0113514029

Of

NOORUL ISLAM CENTRE FOR HIGHER EDUCATION

A TRAINING REPORT

Submitted to the

FACULTY OF MANAGEMENT STUDIES

In partial fulfillment of the requirements for the award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

Noorul Islam Centre for Higher Education

Noorul Islam University, Kumaracoil

May- 2015

NOORUL ISLAM CENTRE FOR HIGHER EDUCATION

(declared as deemed-to-be university under section 3 of the UGC act 1956)

NOORUL ISLAM UNIVERSITY

Kumaracoil, Thuckalay, Kanyakumari District, Tamilnadu -629 175

Website: www.niuniv.com; email: [email protected]

Ms. A.V ROOPA

Assistant Professor,

School Of management

BONAFIDE CERTIFICATE

Certified that this training report titles “A STUDY ON WORKING CAPITAL

MANAGEMENT ON HMT MACHINE TOOLS, KALAMASSERY” is the bonafide work of

JIBU AB (Register No. 0113514029) who carried out the project work under my supervision.

Certified further, that to the best of my knowledge the work reported here in does not form part of

any other project report or dissertation on the basis of which a degree or award was conferred to

his on an earlier occasion or any other candidate.

Place: Kumaracoil Signature of the Guide

Date:

Forwarded by

Dr. D. Kinslin

Head of the Department

Internal Examiner External Examiner

http://www.niuniv.com/

mailto:[email protected]

DECLARATION

I hereby declare that the training report titled “A STUDY ON WORKING CAPITAL

MANAGEMENT OF HMT MACHINE TOOLS, KALAMASSERY”, submitted in partial

fulfillment for the award of Master of Business Administration, to the Noorul Islam Centre for

Higher Education, Kumaracoil is a record of training under the guidance of Ms. A.V ROOPA,

Asst.Professor, School of Management, Noorul Islam Centre for Higher Education, Kumaracoil. I

also declare that this training report is the result of my own effort and has not been submitted

earlier for the award of any other Degree.

Place: Kumaracoil JIBU AB

Date: (Reg No: 0113514029)

ACKNOWLEDGEMENT

First and foremost I would like to thank Almightily GOD for his presence and guidance

Which he has showered upon me through out to do this project.

I gratefully acknowledge my indebtedness to Dr.B. Chandrachoodan Nair, Director, and

Dr.D.Kinslin, Head of department, School of Management Studies, NICHE for making necessary

arrangements to enable me to complete this project successfully.

I obliged to express my deep gratitude to my guide Ms. A.V ROOPA, Asst.Professor, School of

Management, NICHE, Kumaracoil, for his valuable guidance constructive criticism, constant

support and encouragement during this study.

I wish to express my gratitude to HMT MACHINE TOOLS LIMITED, KALAMASSERY

for granting me the permission to do my Project Work in the Company. In addition, I express my

thanks to Mr.MIDHUN.S, senior finance officer, cost & accounts and project Guide, HMT

CO.LTD for sincere and valuable advice which helped me to conduct this project work

successfully.

Finally my sincere thanks to my parents, my faculty, my friends and everyone who helped me to

complete this project report successfully.

JIBU AB

(Reg No:0113514029

TABLE OF CONTENTS

Title Page No.

Chapter - I

1.1 Introduction 1

1.2 Need of the Study 3

1.3 Statement of the problem 4

1.4 Objective of the study 5

1.5 Scope of the study 6

1.6 Organizational chart 10

1.7 Industry profile 11

Chapter – II

2.1 Review of literature 20

Chapter - III

3.1 Research methodology 28

Chapter - IV

4.1 Data Analysis & Interpretation 30

Chapter - V

5.1 Findings of the study 33

5.2 Suggestions of the study 33

5.3 Conclusion 34

Bibliography 35

LIST OF TABLES

Table No

List of Tables

Page No

4.1

Balance sheet on the year 2010

26

4.2


27

4.3


28

4.4


29

4.5


30

4.6

Working Capital & Working Capital Ratio

31

LIST OF CHARTS

Chart No

LIST OF CHARTS

Page No

1.7.1

Organizational Chart of HMT

11

1.8.1

Finance Department Chart

13

1.8.2

Purchase Department Chart

16

1.8.3

Human Resources Department Chart

17

CHAPTER-I

INTRODUCTION

CHAPTER-I

1.1 INTRODUCTION

Working Capital Management is important part in firm financial management decision improper

management makes on the WIP- Working In Process to the develop on the various development

of working financial process on the basis of managing on developing the financial statements.

Working capital management the develop mentation of the manufacturing their goods on the basis

of short term liabilities and non-short liabilities.

The working capital requirements is the minimum amount of resources that a company requires to

effectively cover the usual costs and expenses necessary to operate the business. Since the capital

needs of each company will be a little different there is no ideal amount of working capital there

is a universally applicable to all business or even to companies engaged in the same industry. Even

so new companies can develop an idea of what type of requirement there will need to operate at

given levels of researching the cost and expenses associated with other corporations engaged in

similar operations.

Working Capital Ratio or WCR is used to rat ionize between the capitals ratios used in every year.

In every financial year the working capital ratio where calculated by the HMT.CO.LTD. The

working capital ratio is the same as the current ratio. It is the relative proportion of an entity current

assets to its current liabilities, and is intended to show the ability of a business to pay for its current

liabilities with its current assets. A working capital ratio of less than

1.0 is an stronger indicator that there will be liquidity problems in the future while a ratio in the

vicinity of 2.0 is considered to represent good short term liquidity.

To calculate the working capital ratio or WCR divided all current assets by all current liabilities.

Working capital involves the relationship between a firm’s short term assets and its short term

liabilities. The goal of working capital management is to ensure that a firm is able to continue its

operations and that it has sufficient ability to satisfy both maturing short term debt and upcoming

operational expenses. The working capital management of working capital involves managing

inventories accounts receivables and cash payables.

1.2 NEED OF THE STUDY

The study has been conducted for gaining particular knowledge about working capital

management & activities of HMT MACHINE TOOLS LIMITED, KALAMASSERY.

1.3 STATEMENT OF THE PROBLEM

The current problem of HMT machine tools is generally explain giving less attention has been paid

in the area of short term finance. In particular to the working capital but the effective working

capital has a crucial play in the enhancing the profitability and growth of the firm.

1.4 OBJECTIVES OF THE STUDY

To study the overall working of the organization of study all department and organizational

structure.

To study the efficiency of the working management of the company.

To study the efficiency of cash, inventory and receivables of the company.

To understand the analyze the working capital position of HMT Co.Ltdduring the period of

2010-2014

To measure the overall financial position of the organization with the help of ratio analysis.

1.5. SCOPE OF THE STUDY

Since the decision regarding working capital are of an operating nature not one time decision the

scope of the study is geared toward identifying important areas of control and to establish model

for better control of the various components of working capital.

The study would also attempt to identify the various source available for financing of working

capital.The study gives a fair idea of improvement in efficiency of working capital management

and also to have control over the components of working capital and managing of efficiency.

1.6 Industry Profile

INDIAN SCENARIO

The Machine tool industry constitutes backbone of the industrial sector and is vital for the growth

of the Indian machine tools industry. Even though the Indian machine tools industry is a small

segment of the engineering industry it plays a very important role in the development and

technology of up graduation of the engineering industry. The quality of mother machine tools and

their automation level. The development of the machine tools industry is therefore of paramount

importance for a competitive and self-industrial structure.

The growth of Indian machine tools industry and major user industries clearly shows the close

interdependeries of indigenous machine tools and the major user industries. This level of

performance of the major user industries has been made possible only because of support of

indigenous manufacturer large and small, to meet almost all the requirement of machine tools

conventional CNC special purpose and flexible manufacturing lines required by them.

Had the indigenous machine tools industry not have been able to meet the major user industries

demand then these machine tools would have to be imported at much higher prices, irrespective of

rising cost of foreign or not. This would have severely affected not only the country GNPand the

overall economy of the country. But not severely impained the country space and the defense

sector.

It was in the early post-independence era that HMT began in a small way to meet a big commitment

to manufacture other machine to build modern industrial era. HMT was conceived by the

Government of India in 1949 and was incorporated in 1953 with the objective of producing a

limited range of machine tools required for building an industrial edifice for the country.

Today, HMT Ltd has 16 manufacturing units with 22 product divisions, spread through the length

and breadth of India. The HMT machine tools limited is engaged in the manufacture and marketing

of general purpose machine tools, special purpose machine tools, computer numerically controlled

machine tools, precision machinery systems, printing machines, metal forming presses, die-casting

and plastic injection molding machines, ferrous and non-ferrous castings.

WORLD SCENARIO

The engineering industry is the largest segment of the overall industrial sectors in India, accounting

for 3% of India’s GDP, offering employment to over 4 mn skilled and semi-skilled workers (direct

and indirect). It is diverse with a number of segments and can be broadly categorised into two

segments: heavy engineering and light engineering. Engineering is relatively less fragmented at

the top as the competencies required are high and more fragmented at the lower end, in terms of

technology and capital investment and are dominated by comparatively smaller players.

The major end-user industries for heavy engineering goods are power, infrastructure, steel, cement,

petrochemicals, oil and gas, refineries, fertilisers, mining, railways, automobiles, and textiles

among others. Light engineering goods are essentially used as inputs by the heavy engineering

industry.

Growth in the domestic engineering industry has been fuelled by growth in key end-user industries

and many new projects undertaken in various core industries such as railways, power and

infrastructure. Capacity creation in sectors such as infrastructure, oil and gas, power, mining,

automobiles, auto components, steel, refinery and consumer durables has driven growth in this

sector. For example, the domestic sales of automobiles have grown at a CAGR of around 18%

over the past four years thereby increasing the demand for engineering goods.

1.7 Company Profile

By the end of the Second World War, the government of India was confronted by a big problem

of disposingthe colossal war waste. Ultimately a committee was constructedto inquire into the

possibilities. The committee report of 1948 proposed the establishment of a Govtowned machine

tool industry. This was expected to fulfill two aspects. The first was being utilization of the Rs

4000 million worth of metallic waste. The second was the incorporation of a state owned

infrastructure manufacturing facility. The result was birth of the Hindustan machine Tools

Limitedwhich diversified in due course of time to the present stature of the multi core, multi-unit,

multi-location, multi-Product industrial giant limited HMT Ltd (Holding Company)

The HMT Ltd was started a single factory to produce tool room lathes at Bangalore in collaboration

with M/s Oerlikonof Switzerland in 1953, with a capacity to manufacture around 400 machine per

year. Since then different collaborations continued in house R&D and tremendous marketing

efforts brought HMT, to its present status.

The growth of HMT.Ltd was characterized by the forward and backward integration technology

and product diversification. Thus the company which started with manufacturing and selling lathes

expanded its machine toolsproduct range to evolve as the ultimate solution in metal cutting.

The product diversification efforts took the company to the business of watches in 1962, tractors

in 1971, die-casting on plastic machinery in 1971, Lamp & Lamp making machinery in 1980, CNC

system in1986, Bull Screws in 1986 and reconditioning in 1990.

The multi-product activities made its identity Hindustan Machine Tools Limited to change

HMT.Ltd Today HMT. Ltd has 16 manufacturing units with 22 product divisions spread through

the length and breadth of India.

A subsidiary Viz HMT (International). Ltd taken care of the exports of the company products.

They also export several items for the Indiancompanies.

HMT.Ltd was restructured in 1992 to facilitate better administration of the multi-product business

activities. Accordingly the following business group were established.

Machine Tools Business group, to concentrate on metal cutting machines.

Industrial machinery business group, to deal with printing machines, Die casting and plastic

injection moldings machines, food processing machines, and metal forming machines.

Agricultural business group, to concentrate on tractor.

Engineering components business groups, to deal with watches & Lamps.

Consumer products business groups, to deals with watches and lamps.

In addition to the business groups, the company owns three subsidiaries as follows:

HMT (International).Ltd which undertakes overseas projects and topics.

Praga Tools.Ltdwhich manufactures machine tools.

HMT Bearings.Ltdwhich manufactures precision bearings in collaboration with M/s KOYO

of Japan.

THE PRODUCT RANGE OF MACHINE TOOLS BUSINESS GROUP

Banglore

Heavy duty lathes

Single and multi-spindle automates

Radial drilling machines

Multi Spindle Drills

Cylindrical and Surface Grinders

Gear Cutting Machines

Laser Cutting Habbers

CNCTurn Mill Centres

Fine Boring Machines / SPM’s

Pinjore

FMS&FMC

Horizontal Machining Centres

Vertical Machining Centres

Milling Machines

Broaching Machines

Kalamassery

CNC Turning Centres

Turn Mills Centres

Flexible Turning Cells

Copying Lathes

Centre Lathes

Offset Printing Presses

Cutting Machines

Hydreabad

Special Purpose Machines

Horizontal Machining Centres

FMS

CNC Horizontal Boring Machines

Bed Type and Floor Boring Machines

Ajmer

Grinding Machines

SPM Grinders

CNC Grinders

Major Machines/Inspection Facilities Available In Different MTBS Units

1) CNC ram type Plano millers

2) Horizontal machining centres

3) Vertical Machining centres

4) Horizontal jig boring machines

5) Vertical jig boring machines

6) CNC turning machines

7) Turn mill centres

8) Slide way grinders

9) Cylindrical grinders

10) Internal grinders

11) Precision gear shapers

12) Precision gear hoppers

13) Gear grinders

14) Induction hardening machines

15) 3D coordinate measuring machines

The Kalamassery Complex of HMT Machine Tools Limited, Kalamssery

The Kalamassery unit, the 4th machine tools units was established in 1963 and started in 1964. The

unit originally manufactured only two years of centre lathes Viz, H&LBbut later added special

purpose lathes, like copying and turret lathes. Model LT-20 was the first product was landmark in

the history of the unit. The production of this machine was later licensed to M/s QETCOS.Ltd:

Quilon, Kerala, MATOOLS, Philippines Ceylon Steel Corporation, Srilanka.The original centre

lathes H&LB were then replaced by a new family of unified series of lathes. Which was designed

and developed by the unit incorporating the concepts of computer optimized design manufacturing

standardization and unification.

HMT had developed conventional machines of different sizes of NH and NL machines. Later the

following products were added through collaboration with world renowned machine manufactures

1. S-Pilote and T-Pilotecopying lathes in collaboration with M/s Erault Souma of France.

2. RTV 50 drum turret in collaboration with M/s Gilder misterof Germany.

And our unit had developed a completely hydraulic machine heavy duty front chucker (FC-25).

During the early 1980’s HMT.Ltd, Kalamassery designed developed and introduced the

manufacturing of CNC Lathes which cater to the turning requirements of light and medium

industries.

Diversification of kalamassey unit diversified its product range to include printing machines. Thus

was the born the printing machinery division (PMK). The commercial entry of PMK was with two

types of letter presses Viz. RTE and RTAE under collaboration with M/s Neibolo of Italy. Auto

platen, an indigenous development came up subsequently. During the ensuring years, the printing

machinery division come up with offset presses Viz. OMIR in collaboration with M/s Neibolo

later indigenous offsetpresses Viz SOM 136 were introduced to the market. The first two-color

machine from HMT was KPO in collaboration with M/s Koenig&Bearer of Germany. The latest

development of PMK is the paper cutting guideline PG-92, in collaboration with M/s Pivano

Binders of Italy.

The Current Product Range

Product Model

Offset Printing SOM 436







Offset Printing SOM 125G


Offset Printing MOM1015

Offset Printing MOM1520

HMT.Ltd holding company including tractors is a multi-product, multi-technology, multi-division

company and presently comprises of the following subsidiaries.

I. HMT Machine Tools Limited

II. HMT Watches Limited

III. HMT Chinar Watches Limited

IV. HMT Bearings Limited

V. HMT International Limited

VI. PRAGA TOOLS Limited

The Kalamassery unit of HMT is well knownfor development activities. Their products have

always fetched awards and prizes bugged in different IMTEX fairs by FC 25, SBC and SBCNC

machines. The CNC lathes model STC 25 has won the VASVIK industrial research award 1987

instituted by the VividhaLaxmiAudiyogikSamsodhanVikas Kendra (VASVIK), Mumbai for

outstanding contribution to advancement of science and technology.

The machine tool products of the unit, have been certified by RW-TUV, Reinsich west (falischer

Technischer uber wachungs verein) an international certification agency of high repute as

confirming total quality management system. Presently both the divisions have been awarded ISO

9001 certification by IRQS.

The manufacturing shops at kalamassery are supported by various infrastructural facilities like

high technology CNC machinery Centre’s, testing facilities foundry heat treatment computer

system CAD system etc. Around 870 will experienced personnel form the human resources of the

unit (MTK, PMK andFYK)put together keeping in line with the currentcorporate trends this unit

views HRD as one of primary concerns as a measure to increase productivity and enhance social

and standing. The company has a well-established training system by personnel of high technical

and management skills.

The HRD programme undertaken by theyinclude the following:

Management oriental programs.

Supervisory Development Programs.

Customer Training Programs to equip customers in optimum utilization on HMT machines.

Periodic awareness programs for employees relating to safety quality technology modern

secretarial practices etc.

Multi skills training to machine operators.

Induction and in plant training to fresh recruit.

Apprentices training programs under the apprentice act.

Project guidance in management or technology to students.

The Marketing Network of HMT .Ltd

The machine tools marketing divisions with its headquartersat Bangaloreand having wide network

of regional and divisional officers spread throughoutIndiacaters to the marketing needs of this unit

at the primary level to coordinate the marketing activities at unit at the primary level. To offer

technical support to MTM, a strong sales and services team is constituted at unit level.

HMT’s major customers includes Defense, Railways, Automobile and other engineering industries

in various sectors.

Main Inland Competitors for the Unit’s Products

Mysore Kirlosker .Ltd

ACE Designers.

NC Machines Private.Ltd

Lakshmi Machine Works.

Main Foreign Competitors for the Unit’s Products

o Okuma, Japan

o Nori Saiki, Japan

o Tukisama, Japan

o Muzak, Japan

o Ikegai, Japan

o GDM, Germany

o Churchill, England

o Erault Tayoda, Japan

o Victor, Taiwan

o Tuma, Korea

o EMAS, Geamany

HMT Machine Tools Ltd Kalamassery

Unit Organization

A. Officers

Designation Grade

General Manager (GM) PS IX

Joint General Manager (JGM) PS VIII

Deputy General Manager(DGM) PS VII

Assistant General Manager (AGM) PS VI

Deputy Chief Engineer (DCE) PS VI

Senior Engineer / Manager (SE/M) PS V

Engineer / Deputy Manager (E/DY.M) PS IV

Deputy Engineer , Officer (DY.E/O) PS III

Assistant Engineer / Officer (DY.E/O) PS II

B. Employees

Designation Grade

Worker Supervisor WSI

Worker Grade WSVI

Worker Grade WGV

Worker Grade WGIV

Worker Grade WG III

Worker Grade WG II

Worker Grade WG I

Top Executives

General Manager (Kalamassery Unit) Sri. Balachandran K.K

Joint General Manager (JGM) (Finance) Sri. Philip John

General Manager (P) Sri. Bidar C.M

Joint General Manager (JGM) (D) Sri. Hemalatha T.R

Joint General Manager (JGM) (ME) Sri. Purushothaman .K

Joint General Manager (JGM) (MM) Sri. Devanadan P.R

Joint General Manager (JGM) (S) Sri. Joy Panicker P.L

Joint General Manager (JGM) (PS) Sri.Sailish Kumar A.V

Joint General Manager (JGM) (FY) Sri. Damodaran .V

Joint General Manager (JGM) (Q) Sri.Alias Koruth

Joint General Manager (JGM) (AY) Sri.Balamurugaesan .S

Chart No: 1.6

HMT Organizational Chart

Source: Journals and Prospectus of HMT

President Of India

Ministry Of Heavy Industries

Board Of Directors

Chairman & Managing Director

Departments

1.8 DEPARTMENTS

Chart No: 1.8.1

HMT Finance Department Chart

Source: Companies journals & books

Finance Department

Joint Finance Manager(JGM)

Cost Accounts

Officers

Junior Officers

Office Staffs

Following are the major functions of finance department in HMT Machine Tools, Kalamassery.

To provide strategic financial support regarding operational and general business planning.

To meet internal and external needs and financial reporting requirements of the company at

large.

Providing financial information guidance and advising to other departments.

Vetting and appraisal of capital expenditure investment proposals to ensure their financial

viability.

Budgeting and monitoring variance.

Management of taxes.

Ensuring timely payment of employee’s salary and other welfare expenses.

Working capital management.

HMT Finance Department Has the Following Sections

1. Outward Bills Section (OBS)

2. Inward Bills Section (IBS)

3. Wages/Time Office

4. Provident Fund

5. Main Accounts & Cost Accounts

6. Cash

7. Concurrence

1) Outward Bills Section (OBS)

OBS maintains the records of sundry debtor’s accounts of sales of machines special accessories

spares and job order.OBS monitors and follow up with debtor for realization of outstanding

dues. OBS also prepares the provision entries servicing invoices. All the works related to sales

tax, excise duty and service tax comes under the ambit of OBS.

2) Inward Bills Section (IBS)

IBS is concerned with purchase accounting and authorizing payments to creditors contractors

and also variance expenses. Like water, Electricity, Hire charges, Insurance, Welfare expenses,

Legal charges, AMC’s. This section also handles import proceedurylike LC opening,

authorizing direct transfer to foreign customer (TT) monitoring exchange rate variations

arranging for forward cover from bank etc.

3) Wages / Time Office

Wages prepares payrolls of officers, workers, trainees on the basis of muster roll given by the

time office given by the time office. Payroll preparations is computerized and the

salary/wagesare also engage with the work of leave of employees, conveyance reimburse

settlement, calculation and disbursement of retirement benefits etc.

4). PROVIDENT FUND

Provident Fund section arranges for the recovery of Provident Fund from the employee salary.

Present statutory, minimum recovery is 12% of basic salary + Dearness allowance ( DA ) .The

employees re allowed to contribute higher amount voluntary (VPF).Out of 12% contribution

made by employer an amount equal to 8.33% is transferred to employees’ pension fund.

Provident Fund section also provides the loan facility to employees as per stipulated terms and

conditions.

5). MAIN ACCOUNT AND COST ACCOUNTS

All cost data required by financial accounts such as SIT, WIP are prepared by cost accounts

section. Main accounts related to material accounts. Weighted average rate is following for

inventory valuation .Half yearly periodical physical verification of stock is conducted by main

accounts and whenever discrepancies occurred they are analyzed and rectified. This section

prepares monthly and annual financial statements (balance sheet, P & L account, notes to

accounts, cash flow statements etc.) and co-ordinates with internal / statutory auditors and also

with comptroller and auditor general of India.

6). CASH

Cash section keeps cash day book a bank day book. The payment vouchers prepared by wages

/ IBS are sent to cash department for payments. Generally payments are made though NEFT

or RTGS. This section also prepares bank reconciliation statement and daily cash flow

statement and also monitor that cash credit does not exceed the permitted limit.

7). CONCURRENCE

All purchase proposals are sent to concurrence section for financial department. They make it

sure that all purchase is made according to the purchase manual. In short all purchase (whatever

it may be) can be made only with the approval of finance department.

Total Employees Strength – 25

JGM-1, DMF’s-2, officers-5, junior officers-1, workers-2, contract labours-6, Traninees-4,

Casual Labours-4.

1.8.2 PURCHASE DEPARTMENT

Chart No: 1.8.2

Purchase department Chart

Source: Companyprospectus journals

OBJECTIVES

Timely procurement and supply of required materials with prescribed specifications and

quality at the most competitive price and terms.

Fair, consistent and transparent purchase practices.

Continuous search for alternate sources of supply and to develop reliable sources of supply.

RESPONSIBILITIES OF PURCAHSE DEPARTMENT

The functions of purchase department are:

Adherence to guidelines contained in the purchase manual.

Maintenance of an updated vendor registers system.

To issue enquires/ tenders, analyze the quotations received and prepare comparative

statements with a view to obtain competitive prices to HMT.

To conduct negotiation with L1 tender.

To keep tender box with lock for receiving offers in sealed tender. Tender box shall be

opened in the presence of vendors and representative of finance department in the case of

open tender, limited tender, single tender etc.

1.8.3 HUMAN RESOURCE DEPARTMENT

Chart No: 1.8.3

Human Resources Department

Source: Company Prospectus & Journals

HRM Department of HMT is headed by AGM (HRM). There are 20 employees working in this

department. Human resources management strives to ensure continuous organizational growth by

nurturing the strengths of employees and providing the environment and opportunity for every

individual to raise to his/her highest potential.

HMT Ltd. has around 11,000 employees in the corporate level. They are divided into two groups,

PS grade and WG grade employees in the shop floor and in various office the employees include

trainees recruited into various grades. In addition, there are Directors, a Chairman and MD

appointed by the Govt. of India. The total strength of employees in HMT MTL, Kalamassery is

now 521 compared to 3000 when it was started. This is due to VRS policy actively followed by

the company.

Planning: - Determination in advance of a personnel programme. It involves ability to think,

analyze and to reach decisions.

Organizing: - Establishing an organization by designing the structure of relationship among jobs,

personnel and physical factors to attain the company objectives.

Directing, motivating or Actuation - getting the employees to work willingly and effectively.

Controlling: - Concerned with regulating activities in accordance with the personal plan.

Procurement: - Obtaining proper kind and size of personnel necessary to achieve company goals.

Development: - Involves increasing of employee’s skill, through training that is necessary for job

performance.

Compensation: - Adequate and equitable remuneration of personnel for their contribution to

achieve organizational goals.

Integration: - Attempt to effect a reasonable reconciliation of individual and organizational

interest.

Maintenance: - Sustaining and further improving the conditions that have been established.

Employee Welfare

It is at most important for a company. Here have a set of employees welfare schemes to ensure

over all well-being of the employees. Providing company quarters, drinking water, food welfare

and electricity at subsidies rate.

Canteen facility at low cost

Medical facility allowance and dispensary.

Arts, dramatics & recreational clubs.

Social clubs/ educational clubs.

Employee safety is ensured by a specified safety department.

1.8.4 FOUNDRY DEPARTMENT

Foundry industry is the mother industry for all types of industry agricultural and consumers’

products. The developments in this industry therefore are bound to have a far reaching effect on

the production in all other sectors. Though the casting processes are based on techniques that

are age old and amazingly simple in principle considering the effectiveness of the results

achieved the metal casting industries have become the key industries in the world today.

Foundry industries based on casting principles. Casting is a process and producing metal parts

of desired shape by pouring molten metal into a prepared mould and then allowing the metal to

cool and solidity. This solidified metal is known as casting.

HMT FOUNDRY

The foundry attached to the machine tools division to manufacture all cast iron and spherical

graphite iron required for machine tools and printing machinery division and can also under take

job orders. Established in 1968 with POLISH design, it is semi mechanized foundry producing

heavy duty grey and SG iron, castings for machine tools and printing machines using means

frequency induction furnace for melting and resin bounded sand for molding and core making.

OBJECTIVES OF FOUNDRY DIVISION

• Reducing percentage rejection of casting in foundry.

• Reducing percentage rejection of castings at customer’s end.

• Reducing energy consumption.

PRODUCT PROFILE

WATCHES

HMT Watches, a pioneer in chorological industry in India since 1961, welcomes you to its

products from the Brand name known for decades for its accurate time keeping and trouble free

performance that lasts a life time. The models come in a wide range of attractive designs and

prices, there surely is a model to suit your taste and pocket. HMT watches unveil its stupendous

creations. Watches that are an exquisite blend of form and function, of style and substance.

PRINTING MACHINERY

HMT exporter of a wide range of products which include Printing Machines such as Single

Colour Sheet fed Offset Printing Machines; Two Colour Sheet fed Offset Printing Machines,

Four Colour Sheet-fed Offset Printing Machines and Programmable Guillotine Shears.

BEARINGS

Each bearing undergoes as many as 150 checks before it is supplied to the customer. Vigorous

inspection and quality checks at each of the stages of manufacture till assembly ensure that the

bearings of required accuracies and precision only are made available to the customer.

TRACTORS

HMT stepped in by introducing tractors that met the specific needs of the agricultural sector.

HMT manufactures a wide range of tractor from 25 HP to 75 HP. Keeping in tune with HMT's

philosophy of introducing innovative products and continuously upgrading its tractors with

better technology, these models incorporate contemporary technology viz. fuel efficient engine

meeting emission norms, floor gears, direct axle, latest styling giving value for money to its

customers.

MACHINE TOOLS

HMT Machine Tools Limited, the pioneers in Machine Tools Industry in India and

manufacturers of a diversified range of products. A multi-technology company manufacturing a

wide variety of state-of-the-art machine tools.

CHAPTER-II

REVIEW OF LITERATURE

CHAPTER-II

2.1REVIEW OF LITERATURE

Pass CL, Pike RH (1984) studied that over the past 40 years major theoretical developments have

occurred in the areas of long terminvestment and financial decision making. Many of these new

concepts and the related techniques are now been employed successfully in industrial practices.

By contrast far or less attention can been made to the short term finance, in particular that of

working capital management. That neglect might be acceptable were working capital

considerations of relatively little importance to the firm. Indeed experience shows that adequate

planning and control of working capital is one of the more common causes for the failure of

business.

According to Beard Larry H; Hart graves A.I.L; (2005) an inventory frequently represent a major

portion of the total assets of a small business. Because of the magnitude of the investment,

managers are often told to reduce the level of inventories. Although necessity large inventories

reduce the profitability of a business, low inventories can be even more costly. Inventories must

be monitored to make sure that they do not become too large or too small. Effective inventory

management requires an intensive examination of the relationships between costs and benefits with

in a business. There are 3 categories of inventory costs that must be considered when evaluating

any type of inventory:

• The costs incurred in manufacturing or producing the merchandise.

• The cost of ordering

• The cost of carrying or holding the inventory

• The primary aim of inventory management is to maintain an adequate stock of units which

will permit flexibility in the production and or sales of the product but will not tie up an excessive

amount of a firm’s limited liquid resources.

Paradise, Louis J (2006) states that ‘while inventories have been rising, sales have been advancing

just as fast, keeping the inventory sales ratio, close to its historical lows. Latest reports show the

ratio near 1.80’ compared with a high of over 2.06 a few years’ ages. Given today’s high inventory

carrying costs, improved inventory control, ample supplies and growing interest in Just-in-time

deliveries, there is little incentive to increase inventories. All ratios are calculated in real or

physical volume terms rather than current dollar ratios that tend to have a downward bias because

of inflation. However, using the volume concept during times of rising prices will signal the

beginning on an inventory buildup faster than the current dollars measure. While this analysis,

method covers the entire manufacturing sector, it can also be used to pinpoint ratios for specific

industries where comparable inventory and sales data are available.

Sheridan, John W (2008) describes that besides its ability to signal changes in the business cycle

the inventory-to-sales (I/S) ratios is also looked upon as an indicator of economic health. While

the manufacturing I/S ratio are currently outstanding and the system ratio appear good, smart

buyers are continuing go view these ratios with caution. Although the low level of inventories

currently kept by manufactures significantly reduces the possibly of an economic downturn

stimulated by this sector, the retail sector is a cause for concern. A number of factors reinforce the

idea that there has been a fundamental shift in the structural relationship between manufacturing

and retail. This new inventory relationship is as yet untested. If inventories have been shifted to

the retail level and not actually lowered, then the benefits are mainly to manufacturing and will

not be realized by the system over all. It could be that the current system I/S ratios are too high.

Solver, Alan (2011) Using a representative model case, as illustrated by an “distribution of sales

and inventory by value report” an ABC inventory management strategy is described that resulted

in:1). Improved inventory turnover rates (2) Reduced back orders and 3) A reduced number of line

items issued on stock purchase orders. For most industrial distributors, “A” items represent the

20% of stock that generally account for 80% of total sales; “B” items represent the next 20% of

items, accounting for 15% of sales and “C” items represent the remaining 60% of stock that

account for only 5% of sales. In the ABC approach, A items are recorded on an order-up-to-level

basis with a relatively low level of safety stock maintained. Larger quantities of B and C items are

ordered perhaps 2 or 3 months stock at a time and more safety stock is carried. As a result the costs

of acquisition are reduced for a relatively slight increase in the cost carrying inventory in stock.

Customer service is also improved by maintaining a higher level of safety stock for B and C items.

According to Lee and Wang (2012), it provides information regarding inventory levels and

position, sales data and forecasts, order status, production and delivery schedules and capacity. It

is considered as the most reliable "real time" tool to decrease uncertainty in the chain which leads

to the bullwhip effect (Lewis, 2003).This refers to variations in demand and supply which are

caused by information uncertainties in the chain (Taylor, 2000). This helps to reduce safety stock

at each stage which leads to a reduction in inventory carrying costs (Yao, Evers and Dresner,

2000). Product and delivery lead times are shortened making products available on time to

customers (Tachizawa and Ginemez, 2005).Access to information enables channel members to

plan how much to stock for a given period of time (Fasanghari, Roudsari and Kamal, 2008). In

order for information sharing to take place, chain partners should have a collaborative potential

and IT infrastructure (Shore and Venkatachalam, 2003).

HerzfeldB (1992): studiedthat “Cash is King” –so say the money managers who share the

responsibility of running this country businesses and with banks demand more from their

prospective borrowers greater emphasis can been placed on those accountable for so called

working capital. Working capital management refers to the management or current on short term

assets and short term liabilities. In essence these purpose of that function is to make certain that

the company has enough assets to operate its business.Here are things you should know about

working capital.

Thomas.M.Krueger (2005): studied distinct levels of working capital management measures for

different industries, which tend to be stable over time. Many factors helps to explain this discovery.

The improving economy during the period of study may have resulted in improved turnover in

some industries. While showing turnover may have been a signal of troubles a head. Our results

should be interpreted cautiously.

CHAPTER-III

RESEARCH METHODOLOGY

CHAPTER-III

3.1 RESEARCH METHODOLOGY

The process used to collect information and data for the purpose of making financial decisions.

The methodology may include publication research, interview, surveys and other research

techniques and could both present and historical information.

Type of research is based on descriptive and analytical research.

3.2 Sources of data collection:

Secondary data means the data which has already been collected by some other persons at some

other time for the other purpose important source of secondary collections are:

1. Annual reports of HMT for the past five years.

2. Internet

3. Project reports

Period of the study- two months

Sampling Design

Sampling Units: Financial Statements

Sampling Size: Last Five Years Financial Statements

Tools used: Working Capital Turnover Ratios, Quick Ratios, Super Quick Ratios, Debtors

Turnover Ratios, Creditors Turnover Ratios, Working Capital Ratios.

3.4 Limitations of the study

The Working Finance Departments are always busy with their work and difficult to give proper

attention to the project section.

CHAPTER-IV

DATA ANALYSIS & INTERPRETATION

CHAPTER-IV

4.1 DATA ANALYSIS AND INTERPRETATION

Working Capital Management is important part in firm financial management decision improper

management makes on the WIP- Working In Process to the develop on the various development

of working financial process on the basis of managing on developing the financial statements.

Working capitalmanagement the develop mentation of the manufacturing their goods on the basis

of short term liabilities and non-short liabilities.

The working capital requirements is the minimum amount of resources that a company requires to

effectively cover the usual costs and expenses necessary to operate the business. Since the capital

needs of each company will be a little different there is no ideal amount of working capital there

is a universally applicable to all business or even to companies engaged in the same industry. Even

so new companies can develop an idea of what type of requirement there will need to operate at

given levels of researching the cost and expensesassociated with other corporations engaged in

similar operations.

Working Capital Ratio or WCR is used to rat ionizebetween the capitalsratios used in every year.

In every financial year the working capital ratio where calculated by the HMT.CO.LTD. The

working capital ratio is the same as the current ratio. It is the relative proportion of an entity current

assets to its current liabilities, and is intended to show the ability of a business to pay for its current

liabilities with its current assets. A working capital ratio of less than

1.0 is an stronger indicator that there will be liquidity problems in the future while a ratio in the

vicinity of 2.0 is considered to represent good short term liquidity.

To calculate the working capital ratio or WCR divided all current assets by all current liabilities.

The Formula is:

Working Capital Ratio = Current Assets

Current Liabilities

Table No: 4.1.1

Balance sheet of HMT on the year 2010

Source: Company’s financial statements

Working Capital = Current Assets – Current Liabilities

WC = 434414584-419131050

WC = 15283534


Current Liabilities

WCR = 434414584

419131050

WCR = 1.03646

Current Liabilities Current Assets

Current Liabilities 219973407

Provisions 199157643

Inventories 152601938

Sundry Debtors 180633762

Cash & Bank Balances 2774449

Other Current Assets 4495952

Loans & Advances 93908483

Total Current Liabilities = 419131050 Total Current Assets = 434414584

Table No: 4.1.2




WC = 428885887-438070303

WC = -9184419


Current Liabilities

WCR = 428885887

438070306

WCR = 0.97903


Short Term Borrowings 81127245

Trade Payables 71701944

Other Current Liabilities 175501961

Short Term Provisions 109739156


Trade Receivables 171843630

Cash & Receivables 73197

Short Term Loans & Advances 99043367



Table No: 4.1.3




WC = 433697677-452109870

WC = 18412193


Current Liabilities

WCR = 433697677

452109870

WCR = 0.95927


Short term borrowings 68567606



Short term provisions 84414779



Cash & Cash equivalents 76067

Short terms loans & Advances 85224046



Table No: 4.1.4




Current Liabilities

WCR = 495861130

5262736312

WCR = 0.94221







Trade receivables 251713881

Cash & Cash Equivalents 1409201




Working Capital = Current Assets-Current Liabilities

WC = 495861130-5262736312

WC = -30412182

Table No: 4.1.5



Working Capital = Current Assets-Current Liabilities

WC = 520042983-573648756

WC = -53605773


Current Liabilities

WCR = 520042983

573648756

WCR = 0.90655






Incentives 191003844


Cash & Cash Equivalents 17509886




Table No: 4.1.6

Table showing WC & WCR of past five years (2010-2014)

Source: Company Books & Journals

Chart No: 4.6.1

Graphical representation of WC&WCR

Source: Company Books & Prospectus 2014

-60000000 -50000000 -40000000 -30000000 -20000000 -10000000 0 10000000 20000000 30000000

2010

2011

2012

2013

2014

Graphical representation of working capital &working capital ratio of past five years (2010-2014)

Working Capital Ratio (WCR) Working Capital (WC)

Year Working Capital (WC) Working Capital Ratio

(WCR)

2010 15283534 1.03646

2011 -9184419 0.97903

2012 18412193 0.95927

2013 -30412182 0.94221

2014 -53605773 0.90655

Particulars MAR'14

(₹ Cr.)

MAR'13

(₹ Cr.)

MAR'12

(₹ Cr.)

MAR'11

(₹ Cr.)

MAR'10

(₹ Cr.)

EQUITY AND LIABILITIES

Share Capital 1,420.35 760.35 760.35 760.35 760.35

Share Warrants &out standings

Shareholder's Funds 1,138.38 390.43 535.81 618.00 697.24

Long-Term Borrowings 0.00 0.00 0.00 0.00 0.00

Secured Loans 0.00 58.00 60.50 60.50 254.65

Unsecured Loans 48.48 416.62 341.85 259.26 366.26

Deferred Tax Assets / Liabilities 0.00 0.00 0.00 0.00 0.00

Other Long Term Liabilities 0.00 0.00 0.00 0.00 0.00

Long Term Trade Payables 0.00 0.00 0.00 0.00 0.00

Long Term Provisions 60.49 34.06 40.54 38.27 0.00

Total Non-Current Liabilities 108.96 508.68 442.89 358.04 620.91

Trade Payables 34.85 39.33 48.55 44.15 61.03

Current Liabilities

Other Current Liabilities 113.10 456.20 393.71 337.56 81.53

Short Term Borrowings 35.85 57.57 53.21 64.79 0.00

Short Term Provisions 38.51 30.99 32.66 37.27 71.81

Total Current Liabilities 222.30 584.09 528.13 483.77 214.37

Total Liabilities 1,469.64 1,483.20 1,506.82 1,459.81 1,532.52

Non-Current Assets 0.00 0.00 0.00 0.00 0.00

ASSETS

Gross Block 139.49 139.37 139.78 136.48 136.39

Less: Accumulated Depreciation 111.18 107.78 104.71 100.40 96.93

Less: Impairment of Assets 0.00 0.00 0.00 0.00 0.00

Net Block 28.31 31.59 35.07 36.08 39.46

Lease Adjustment A/c 0.00 0.00 0.00 0.00 0.00

Capital Work in Progress 0.00 0.00 0.00 0.01 0.00

Intangible assets under

development 0.00 0.00 0.00 0.00 0.00

Pre-operative Expenses pending 0.00 0.00 0.00 0.00 0.00

Assets in transit 0.00 0.00 0.00 2.59 0.82

Non-Current INVESTMENTS 763.90 765.56 765.56 765.56 765.56

Long Term Loans & Advances 3.23 0.92 0.92 0.00 0.00

Other Non-Current Assets 0.00 0.00 0.00 0.00 0.00

Total Non-Current Assets 795.44 798.07 801.55 804.24 805.84

Trade Receivables 221.85 251.71 170.32 171.84 0.00

Total Reserves -725.71 -812.92 -667.54 -585.35 -506.11

Current Assets Loans & Advances

Currents INVESTMENTS 0.00 0.00 0.00 0.00 0.00

Inventories 43.43 32.99 56.14 28.36 29.00

Cash and Bank 43.74 4.53 3.62 3.83 4.39

Other Current Assets 10.89 11.21 6.69 4.00 1.11

Short Term Loans and Advances 545.18 601.10 574.29 550.02 623.55

Total Current Assets 674.20 685.12 705.28 655.57 726.68

Net Current Assets (Including

Current INVESTMENTS) 451.90 101.03 177.15 171.80 512.31

Total Current Assets Excluding

Current INVESTMENTS 674.20 685.12 705.28 655.57 726.68

Miscellaneous Expenses not

written off 0.00 0.00 0.00 0.00 0.00

Total Assets 1,469.64 1,483.20 1,506.82 1,459.81 1,532.52

Contingent Liabilities 13.74 17.71 33.92 30.59 32.81

Total Debt 98.27 559.31 531.33 475.68 620.91

Book Value (in ₹) 0.46 0.00 1.22 2.30 3.34

Adjusted Book Value (in ₹) 0.46 0.00 1.22 2.30 3.34

Sundry Debtors 30.96 35.30 64.54 72.49 68.64

Quick Ratio

Quick Ratio is the same as the current ratio, but without the value of inventory and prepaid

expenses in the numerator. In other words only assets that can be quickly converted into cash.

Interpretation

The current ratio analysis is satisfy only at the year 2010-11 & 2014-15. But the current ratio

analysis is not satisfactory at 2011-2012, 2012-13&2013-14.

Interpretation

The quick ratio analysis is satisfy at year from 2010 to 2015.

Year Current Assets

(in crores)

Current

Liabilities

(in crores)

CA/CL=

Current Ratio

Standard

Ratio

2010-11 726.8 214.37 3.3904 2

2011-12 655.57 483.77 1.35513 2

2012-13 705.28 528.13 1.33543 2

2013-14 685.12 584.09 1.17297 2

2014-15 674.20 222.30 3.03284 2

Year Quick Assets

(in crores)

Current

Liabilities

(in crores)

QA/CL=

Ratio

Standard Ratio

2010-11 1532.52 214.37 7.14895 1

2011-12 1459.81 483.77 3.01757 1

2012-13 1506.82 528.13 2.85312 1

2013-14 1483.20 584.09 2.53933 1

2014-15 1469.64 222.30 6.61107 1

Super Quick Ratio

Some businesses may have trouble converting their accounts receivables into cash quickly, so

another measure of liquidity is the cash ratio equal to the cash plus marketable securities over

current liabilities.

Super Quick Ratio Formula:

Super Quick Ratio = Cash + Marketable Securities

Current Liabilities

Marketable Securities = Quick ratio * Current Liabilities – Cash and Cash Equivalents- Trade

Receivables

Year (QR*CL)-CCE-TR

(in crores)

Marketable

Securities

(incrores)

2010-11 (7.14895*214.37)-4.39 1528.13

2011-12 (3.01757*483.77)-3.83-171.84 1284.13

2012-13 (2.85312*528.13)-3.62-170.32 1332.87

2013-14 (2.53933*584.09)-4.53-251.71 1226.95

2014-15 (6.61107*222.30)-43.74-221.85 1204.05

Year Cash + Marketable Securities

Current Liabilities

Super Quick Ratio

2010-11 4.39+1528.13

214.37

11.51

2011-12 3.83+1284.13

483.77

6.48

2012-13 3.62+1332.87

528.13

6.14

2013-14 4.53+1226.95

584.09

6.63

2014-15 43.74+1204.05

222.30

49.15

Interpretation

In super ratio analysis at the year 2010-11 and 2014-15 the ratio is increase more than which is

expected with the standard ratio analyze with other years super quick ratios and it is satisfied with

this super quick ratio analysis.

Working Capital Turnover Ratio

The working capital turnover ratio measures how well a company is utilizing its working

capital.Working Capital Turnover Ratio divide net sales by working capital (which is current

assets

Minus current liabilities)

Working Capital Turnover Ratio divide net sales by working capital (which is current assets

Minus current liabilities)

Net Sales

Trade Receivables + Inventories - Trade Payables

Year Net Sales

Trade Receivables +

Inventories - Trade Payables

Working Capital Turnover

Ratio

2010-11 193.46

0.00+29.00-61.03

-6.04

2011-12 200.94

171.84+28.36-44.15

0.12

2012-13 159.56

170.32+56.14-48.55

0.90

201314 99.42

251.71+32.99-39.33

0.41

2014-15 78.44

221.85+43.43-34.85

0.34

Interpretation

In the year 2010-11, the working capital turnover ratio gets decreased due to less ability to generate

the sales from their working capital and to balance 4 years the working capital turnover gets

increase so that more ability in making its sales with their working capital

Inventory Turnover Ratio

Inventory turnover ratios details how much inventory is sold over a period of time

Costs of goods sold / Average Inventory

Or

Sales / Inventory

Interpretation

The inventory turnover ratio is analyzing the inventory with sales so the inventory is satisfied.

Year Sales/Inventory Inventory Turnover Ratio

2010-11 193.46/29.00 6.67

2011-12 200.94/28.36 7.08

2012-13 159.56/56.14 2.84

2013-14 99.42/32.99 3.01

2014-15 78.44/43.43 1.80

Debtors Turnover Ratio

Debtors Turnover Ratio = Credit Sales / Average Debtors

Average Debtors = (Opening Debtors Balance + Closing Debtors Balance) / 2

Year (Opening Debtors Balance+

Closing Debtors Balance)/2

Average Debtors

(in crores)

2010-11 (68.64+34.32)/2 51.48

2011-12 (72.49+36.24)/2 54.36

2012-13 (64.54+32.27)/2 48.40

2013-14 (35.30+17.65)/2 26.47

2014-15 (30.96+15.48)/2 23.22

Interpretation

Debtor’s turnover ratio is analyzing the credit sales with debtors the turnover also satisfied.

Year Average Debtors/Credit

Sales

Debtors Turnover Ratio

(in times)

2010-11 51.48/193.49 2.70

2011-12 54.36/200.94 2.85

2012-13 48.40/159.56 2.33

2013-14 26.47/99.42 1.99

2014-15 23.22/78.44 2.37

Creditors Turnover Ratio

Creditors Turnover Ratio = Credit Purchases / Average Creditors

Year (Opening Creditors

Balance+Closing Creditors

Balance)/2

Average Creditors

2010-11 (219973407+199157643)/2 209565525

2011-12 (175501961+109739156)/2 142620558.5

2012-13 (195229138+84414779)/2 101835308.5

2013-14 (281591160+91140691)/2 186365925.5

2014-15 (300623164+78282871)/2 189453017.5

Year Average Creditors/Credit

Purchases

Creditors TurnoverRatio

(in times)

2010-11 209565525/219973407 0.95269

2011-12 142620558.5/175501961 0.81264

2012-13 101835308.5/195229138 0.52162

2013-14 186365925.5/281591160 0.66183

2014-15 189453017.5/300623164 0.6302

CHAPTER-V

FINDINGS, SUGGESTIONS&CONCLUSION

CHAPTER-V

5.1 Findings

Debtor’sturnover ratio is increase at 2011-12 as 2.85times and simultaneously the debtor’s

turnover ratio decreases at 2013-14 as 1.99 times.

Creditors turnover ratio increased at 2010-11 as0.95269 times and creditors turnover ratio

decreases at 2012-13 as 0.52162 times

Working capital turnover ratio increased at 2012-13 as 0.90 and working capital turnover

ratio decreases at 2010-11 as -6.04.

Super quick ratio increases at 2014-15 as 49.15 and super quick ratio decreased at 2012-13 as

6.14.

Quick ratio is increase at 2010-11 as 7.14 and quick ratio decreased at 2013-2014 as 2.53.

Current ratio increased at 2010-11 as 3.39 and current ratio decreased at 2013-14 as 1.17.

5.2 Suggestions

The Debtors turnover of the company is less the times when it is come down from the 2010-

11 to 2014-15.

The Creditors turnover of the company is less the times when it is come down from the 2010-

11 to 2014-15.

Working capital of the company is more care in handling for the day-to-day operations of the

company.

Current assets and current liabilities were analyzed in proper manner always current assets

are always equal to the current liabilities.

Current assets and current liabilities of the companies is always better analyzing through

continuous current ratio process.

More handling with care for working management of the company due to the proper running

of the company.

5.3 CONCLUSIONS

HMT is pioneer in the market and has created reliability and credibility among the customers. It

has an excellent transporting facilities and proximity to national high way, railway line, sea port

and airport as well. A better inventory management will surely be helpful in solving the problem

that the company is facing with respect to inventory and will pave the way for reducing the huge

investment or blocking of investment in inventory. Inventory management is vitally important to

almost every type of business, whether product or service oriented. Inventory control touches

almost every facets if operation. A proper balance must be struck to maintain proper inventory

with the minimum financial impact on the customer. Inventory control is the activities that

maintain stock keeping items at desired level. In manufacturing since the focus is on physical

product, inventory control focus on material control. The goal of the wealth maximization is

affected by the efficiency with which inventory is managed. Inventories constitute about 60% of

current assets of companies in India. The manufacturing companies hold inventories smooth

production and sales operation to guard against the risk of unpredictable changes in usage.

BIBILOGRAPHY

BIBILOGRAPHY

BOOKS

* Bhagirathi Singh (1994), Working Capital Management, Arabians Publishers, Jaipur

* Dutta A K (1998), Working Capital and Capital control, Jockopublishers, Mumbai

* Nair N K (1994) Working Capitalmanagement, Vikas publications, New Delhi

REPORTS

Annual Reports 2010, 2011,2012,2013,2014

WEBSITE

Www. Wikipedia.com

www.hmt.com

jibu hmt working capital management project

Education

project work

kalamassery project

training report

project guide

school of management

kumaracoil jibu ab date

faculty of management

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