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A STUDY ON WORKING CAPITAL

MANAGEMENT OF HEX CARGO MOVERPRIVATE LTD.,

COIMBATORE.

PROJECT REPORT

Submitted by

C.PERIYANNAN

Register No: 088001201025

In partial fulfillment for the award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES

JAYAM COLLEGE OF ENGINEERING &

TECHNOLOGY

NALLANUR DHARMAPURI - 636813

MAY -2010

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JAYAM COLLEGE OF ENGINEERING &

TECHNOLOGY

NALLANUR DHARMAPURI -636 813

Department of Management Studies

PROJECT WORK

MAY 2010

This is to certify that the project entitled

A STUDY ON WORKING CAPITAL

MANAGEMENT OF HEX CARGO MOVER

PRIVATE LTD.,

COIMBATORE.

is the bonafide record of project work done by

C.PERIYANNAN

Register No: 088001201025

of M.B.A (Master of Business Administration)

during the year 2008-2010.

--------------------- ----------------------------------

Project Guide Head of the Department

Submitted for the Project Viva-Voce examination held on _________

-----------------------------

---------------------------

Internal Examiner External Examiner

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DECLARATION

I affirm that the project work titledA study on working capitalmanagement of hex cargo mover private ltd. Coimbatore . Being submitted

in partial fulfillment for the award of Master of Business Administration is

the original work carried out by me. It has not formed the part of any other

project work submitted for award of any degree or diploma, either in this

or any other University.

(Signature of the Candidate)

C.PERIYANNAN

(Register No. 088001201025)

I certify that the declaration made above by the candidate is true

Signature of the Guide,

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ACKNOWLEDGEMENT

The ultimate result of any research work depends upon the help and

guidance of many persons. The help and guidance of such people cannot be left

unnoticed.

I take this opportunity to thank them for providing the relevant and

necessary inputs for successful completion of this project

I thankANNA UNIVERSITY, COIMBATORE for this academic vision

in integrating the class room learning with real lifes situational experience, bymaking the project work, a part of curriculum.

I would like to express my deepest gratitude to Dr. R. PARTHIBAN. Our

principal and Mr.B.ADHINARAYANAN.M.B.A. M.Phil. (Ph.D.,) our head of

the department of management studies for bring the inspiration and motivation

force which encourage to work towards excellence in the challenging task.

I words cannot adequately express my gratitude to my guide Mr. R.D

SURESH. M.B.A. for valuable guidance, constant encouragement and

supervision, motivation especially in times of difficulty and stress.

My special thanks Mrs.S.ANAND,Director of Hex cargo mover private

ltd.,Coimbatore, For his consent and permission to undertake a project in the

organization concerned and FINANCE department Hex cargo mover private

ltd.,coimbatorefor his valuable guidance and direction through out the project.

I extended my thanks to my beloved parents, friends, who gave us

encouragement and helped us at different stages of this project with warm

gestures.

(C.PERIYANNAN)

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TABLE OF CONTENTS

CHAPTER

. NODESCRIPTION PAGE NO.

List of tables

List of charts

Executive summary

1 Introduction

1.1 About the study 1

1.2 About the industry 22

1.3 About the company 26

2 Main theme of the project

2.1 Objectives of the study 31

2.2 Scope and limitations 32

2.3 Methodology 34

2.4 Review of literature 37

3 Analysis & Interpretation 40

4Finding, Recommendations and Conclusion

4.1 Findings 79

4.2 Recommendations 81

4.3 Conclusion 82

Appendices 83

Bibliography 85

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LIST OF TABLES

S. NO TABLES TITLE PAGE

NO

3.1.1 Table showing current ratio 40

3.1.2 Table showing quick ratio 42

3.1.3 Table showing debt equity ratio 44

3.1.4 Table showing interest coverage ratio 46

3.1.5 Table showing gross profit 48

3.1.6 Table showing net profit ratio 50

3.1.7 Table showing operating ratio 52

3.1.8 Table showing fixed asset ratio 543.1.9 Table showing return on asset ratio 56

3.1.10 Table showing earning per share ratio 58

3.1.11 Table showing return on share holder fund 60

3.1.12 Table showing cash position ratio 62

3.2.1 Changes in working capital on(2004-2005) 64





3.3.1 Funds flow statement(2004-2005) 68





3.4.1 Comparative balance sheet on (2004-2005) 74





LIST OF CHARTS

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S. NO CHARTS TITLE PAGE

NO

3.1.1 chart showing current ratio 41

3.1.2 chart showing quick ratio 43

3.1.3 chart showing debt equity ratio 45

3.1.4 chart showing interest coverage ratio 47

3.1.5 chart showing gross profit 49

3.1.6 chart showing net profit ratio 51

3.1.7 chart showing operating ratio 53

3.1.8 chart showing fixed asset ratio 55

3.1.9 chart showing return on asset ratio 57

3.1.10 chart showing earning per share ratio 59

3.1.11 chart showing return on share holder fund 61

3.1.12 chart showing cash position ratio 63

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EXECUTIVE SUMMERYThis research work aims to study working capital management of hex cargo

mover private limited Coimbatore. Financial position of a company plays a role in

an organization.

The study was confined past five years financial data i.e. 2004-2005 to 2008-

2009. The study filly covered secondary data only. These data were collected

from the annual reports of the company. From the data, ratio analyses were used.Changes in working capital and funds flow statement.

In the ratio analysis liquidity ratio, leverage ratio. Activity ratio and profitability

ratio were used fir analyzing the five year data, to addition to that trend

percentage analysis were used for sales share capital/net profit and total assets.

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CONCEPT OF WORKING CAPITAL:

Working capital may be regarded as the life-blood of a business. Its

effective provision can do much to ensure the success of a business, while its

inefficient management can lead not to loss of profits, but also to the ultimate

down fall of what otherwise might be considered as a promising concern. Much

has been rightly made of the long term planning in the use of working capital is

immeasurable.

There are two concepts of working capital:

Gross working capital

Net working capital

GROSS WORKING CAPITAL

It is refer to the firms investment in current assets. Current assets are the

assets which can be converted in to cash with in an accounting year and include

cash, short term securities, and debtors, bills receivable and stock. It also known

as circulating capital or current capitals, for current assets are rotating in their

nature.

NET WORKING CAPITAL:

It refers to the difference between current assets and current liabilities.

Current liabilities are those claims of outsiders, which are expected to mature for

payment with in an accounting year and include creditors, bills payable and

outstanding expenses.Net working capital can be positive or negative. A positive

net working capital occurs when current liabilities are in excess of current assets.

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NEED FOR WORKING CAPITAL:

Modern business enterprises produce goods in anticipation of demand.

Goods produced are not sold immediately. Cash for sales is also not realized

immediately. From the time purchases of raw materials to the time of realization

of cash for sales made, an operating cycle in involved. The following stages are

usually found in the operating cycle of a manufacturing firm.

Conversion of cash into raw material.

Conversion of raw material into work in progress.

Conversion of work in progress into finished goods.

Conversion of finished goods into debtors through sales.

Conversion of debtors into cash.

WORKING CAPITAL IS NEEDED FOR THE FOLLOWING PURPOSE:

To purchases of raw materials, spares and component parts.

To pay wages and salaries.

To incur day to day expenses.

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To meet selling cost such as packing, advertising.

To provide credit facilities to customers.

To maintain inventories of raw materials, work in progress and finished

goods

IMPORTANCE OF WORKING CAPITAL

Working capital is the life-blood and nerve center of a business. No business

can be run successfully without adequate of working capital. The importance of

working capital is:

Continuous production

Solvency and goodwill

Easy loan

Cash discounts

Regular payment of expenses

Exploitation of market condition

CONTINUOUS PRODUCTION

Adequate of working capital ensures regular supply of raw materials and

continuous production.

SOLVENCY AND GOODWILL

Adequate of working capital enables prompt payment to creditors. This helps

in creating and maintaining goodwill.

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EASY LOAN

A concern having sufficient working capital enjoys liquidity and good credit

standing. Hence, it can secure loans from banks and others on easy and favorable

terms.

CASH DISCOUNT

Adequate of working capital enables a concern to avail cash discounts on the

purchases, leading to a reduction in costs

REGULAR PAYMENT OF EXPENSES

A company, which has ample working capital, can make regular payment of

salaries, wages and other day to day commitments. Such prompt payment raises

the morale of employees and increases their efficiency. As a result costs are

minimized and profit increases.

EXPLOITATION OF MARKET CONDITION

A concern with adequate working capital can exploit favorable market

conditions. It can buy its requirement of raw materials in bulk when the market

price is lower. Similarly, it can hold stock of finished goods to realize better

prices.

ABILITY TO FACE:

Adequate of working capital enables a concern to face business crises such as

depression, because during such period there is much pressure on working capital.

HIGH RETURN ON INVESTMENT

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Adequate of working capital facilities continuous production and effective

utilization of fixed assets. Because of this, the concern is able to generate more

profits and ensure higher return on investment.

KINDS OF WORKING CAPITAL:

Net working capital

Gross working capital

Permanent working capital

Temporary working capital

Balance sheet working capital

Cash working capital

Negative working capital

NET WORKING CAPITAL:

The net working capital is the difference between current assets and current

liabilities. The concept of net working capital enables a firm to determine how

much amount is left for operational requirement.

GROSS WORKING CAPITAL:

Gross working capital is the amount of funds invested in the various components

of current assets. This concept has the following advantages.

Financial managers are profoundly concerned with current assets,

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Gross working capital provides the correct amount of working

capital at the right time,

It enables a firm to realize the greatest return on its investment.

It enables in the fixation of various of financial responsibility.

It enables a firm to plan and control funds and to maximize the

return on investment.

PERMANENT WORKING CAPITAL:

Permanent working capital is the minimum amount required to ensure effective

utilization of fixed assets and support the normal operational of the business.

There is always a minimum level of current assets, which is continuously required

by the enterprise to carry out its normal business operations.

TEMPORARY WORKING CAPITAL:

Temporary is the `amount of working capital required for short period. It is

intended to meet seasonal demands and some special exigencies. Variable

working capital cannot be permanently employed gainfully in the business.

Therefore, only short term sources are employed to finance variable working

capital.

BALANCE SHEET WORKING CAPITAL:

The balance sheet working capital is one, which is calculated from the items

appearing in the balance sheet. Gross working capital, which is represented by

current assets and net working capital, which is represented by the excess assets

over current liabilities,

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CASH WORKING CAPITAL:

Cash working capital is one, which calculated from the item appearing in the

profit and loss account. It shows the real flow of money or value at a particular

time and is considered to be most realistic approach in working capital

management.

Negative working capital:

Negative working capital emerges when current liabilities exceed current

assets. Such a situation is not absolutely theoretical and occurs when a firm is

nearing crises of some magnitude.

FACTORS DETERMINING OF WORKING CAPITAL:

A firm should plan its operation in such a way that it should have neither too

much nor too little working capital. The total working capital requirement is

determined by a wide variety of factors. These factors, however, affect different

enterprise differently. They also vary from time to time. In general, the following

factors are involved in proper assessment of the quantum of working capital

requirement:

Nature of business

Volume of business

Production policy

Length of manufacturing process.

Operating cycle

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Condition of supply

Speed of stock turnover

Credit policy

Market conditions

Dividend policy

Business policy

Lead time

Price level changes

Other factors

NATURE OF BUSINESS

Working capital requirement is considerably influenced by the nature of business.

Example for trading concern the working capital requirement is more and

requirement of fixed assets will be less. For manufacturing concern requirement

of working capital is moderate and for public utility services like railways, hotels,

electricity, transport the requirement of working capital is less.

VOLUME OF BUSINESS:

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For a small scale business the working capital requirement is less whereas for

large scale operation the working capital requirement is more.

PRODUCTION POLICY:

Demand for some products may be seasonal. Example crackers, ceiling fan.

Production of the above items should be continued regularly so as to meet the

heavy demand for them in the season. Continuous production throughout the year

requires more working capital because cash is invested in the form of stock. On

the other hand if the production is intermittent the working capital requirement is

less.

LENGTH OF MANUFACTURING PROCESS:

It is the time gap between the input of raw material and output of finished goods.

In some manufacturing process output will be received after a short time, in

some other situation the output will be received after one week, one month, or

more than one month. Longer manufacturing process results in accumulation of

working capital. Simply shorter the length of manufacturing process the working

capital requirement is less and vice versa.

OPERATING CYCLE

It is the speed at which the cash is converted into other current assets and current

assets into cash.

Cash-current assets cash

If the of conversion is quick the working capital requirement is less and vice

versa.

CONDITION OF SUPPLY:

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If the supply of raw material is prompt and adequate working capital requirement

is less. Sometimes the regular and adequate supply may not be possible because

availability of raw material may be in a particular season only. E.g. cotton will be

purchased in bulk in the season which helps for uninterrupted production even in

the offseason also. If the condition of supply is irregular the working capital

requirement is more.

SPEED OF STOCK TURNOVER:

If the inventory or stock turnover is high the working capital requirement is less

and vice versa. Speed of stock turnover is nothing but the number of times the

stock has been converted into cash.

CREDIT POLICY:

Credit policy refers the credit given, to be given to the customers and credit

received / receivable from suppliers and from others.

If the purchase and sales is for cash working capital requirement will be

less.

If the purchase and sales are on credit depending upon the credit that is

extended and received the working capital requirement will be more or

less,

Sometimes purchase may be for cash but sales may be for credit. Here, the

working capital requirement will be less.

If the purchase is on credit and sales is for cash. Here, the working capital

requirement will be less.

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Depending upon the credit facility the working capital requirement may be more

or less.

MARKET CONDITIONS:

If the degree of competition is more, credit terms are to be extended the

requirement of working capital will be more, and if the degree of competition is

less the working capital requirement is also be less.

DIVIDEND POLICY:

If the firm follows liberal dividend policy it requires more working capital. On

other hand, if it follows conservatives dividend policy, dividend can be paid from

the retained earnings. Hence, the working capital requirement will be less.

LEAD TIME:

Lead time is the time gap between the date of placing an order and the dare of

received goods. If the lead time is more, more stock should be kept as stock for

uninterrupted production. Hence, more lead time leads to more working capital

requirement will also be less.

BUSINESS CYCLE:

Cyclical changes in the economy viz depression, boom also influence the

quantum of working capital. In case of depression sales will be less, collection

will be delayed. Hence, there requirement of working capital will be more. In case

of boom sales will be more, more stock should be maintained which also requires

more working capital.

PRICE LEVEL CHANGES:

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Increase in price normally requires more amount of working capital for the same

level of stock. Some firms may be affected because of the changes in price level.

OTHER FACTORS:

Availability of labor at all times, availability of credit facilities ability of the

management to invest etc also influences the amount of working capital.

WORKING CAPITAL FINANCING BY BANKS:

It is a well known fact that working capital financing by the commercial banks,

by other financial institution the ICICI, IDBI, IFCI, etc still contributes a major

portion of much financing. According, the assessment and disbursed of working

capital loans by banks.

ASSESSMENT OF WORKING CAPITAL REQUIREMENT:

There are several determinant factors that go to influence. The assessment of the

quantum of working capital requirement of a company.

Nature of business

Seasonal industries

Production policy

Market conditions

Supply conditions

NATURE OF BUSINESS:

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The quantum of working capital requirement is closely related to the nature of

business of the company. This in turn, is related to the operating cycle. The

working capital requirement may be much ten as the operating cycle will be much

shorter. Mainly due to the fact that most of their sales will be on cash basis. The

whole time lag between credit sales and collection of bills will be saved.

SEASONAL INDUSTRIES:

Seasonal industries, manufacturing fans, fridges heater, coolers and air-

conditioner, woolen clothes and blankets may require a high level of working

capital requirement in peak reasons and much lower requirement during the slack

reason. The commercial banks stipulate working capital limits for such companies

for peak and slack reasons.

PRODUCTION POLICY:

Most of the companies may find it a better financial decision to keep

manufacturing goods even in the off-reason so as keep on working capital above

the breakeven point to meet at least the fixed assets cost. This may go to add to

the profitability of the company. This way the working capital requirement even

of seasonal industries may remain almost stable and uniform throughout the year.

As against the seasonal industries, the units manufacturing items like function or

tube lights fitting, would be having stable and uniform sales, round the year and

correspondingly the level of production activities. Therefore special much

industries, the working capital requirement may be almost uniform throughout.

MARKET CONDITIONS:

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The companies may have to keep sufficient quantities of finished goods in them

ready stock so as to be able supply then to the prospective buyer of the shelf and

theyre by try to get an edge over their competitions. Thus the additional

inventory of finished goods and the larger amount of sundry debtors may

proportionately increase the quantum of working capital requirement.

SUPPLY CONDITIONS OF MATERIALS:

If the required raw materials and consumable stores and spares are in short and

scarce supply or objectives of working capital management.

To manage the firms current assets and current liabilities in such a way

that an adequate and satisfactory level of working capital maintained.

To maintain a proper balance between different components of working

capital namely liquidity, inventories accounts receivable. The working

capital mix shows be such may ensure profitable use of resources.

To device such working capital management policies in respect of each

component as may ensure higher profitability and which may lead to

maximization of shareholder wealth of the lead time is long enough, the

working capital need may go as much as higher level of inventory of raw

materials and consumable stores and spares may have to be stocked to

ensure uninterrupted production throughout the year similar will be

position of the supply of material is seasonal but the production proves is

uniform throughout the year. That is the company may have to store

sufficiently large stocks of material during the haven Tory season when

these are available in plenty and at much cheaper rates.

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ESTIMATION OF WORKING CAPITAL REQUIREMENT

Current assets

1. Stock of raw materials

2. Work-in-process

(a) Raw materials

(b) Labour

(c) Overheads

3.stock of finished goods

(d) Raw material

(e) Labour

(f) Overheads

4.credit allowed to debtors

(g) Raw materials

(h) Labour

(i) Overheads

5. advance paid

RS

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6. cash balance to be maintained

Total current assets(A)

Less current liabilities

1. Credit allowed by suppliers

2. Delay or lag in payment of (wages,

salaries, rent)

Total current liabilities(B)

Working capital(A-B)

Add provision for contingencies if

any

Net working capital required

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ADVANTAGES OF WORKING CAPITAL

Business can be run only with adequate amount of working capital. The

various advantages of maintaining adequate. Working capitals are as follows.

It helps for continuous supply of raw materials which leads for

uninterrupted production.

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It helps for prompt payment of wages, salaries, and other day to day

expenses, and it also increases the goodwill of the firm.

It helps for utilize the favorable market conditions.i.e, by purchasing in

bulk at chapter price.

It helps for reduction of costive, purchases at cheaper rate reduces the cost

of production.

It helps for maintaining the solvency of the business.

It helps for raising short-term loans especially from banks.

It also helps for prompt payment of dividend, results in maintaining or

increasing the market value of the shares and makes raising additional

capital easy.

It creates high morale and provides job security for employees.

DANGERS OF EXCESS:

Like excess working capital inadequacy of working capital is also dangerous

because of the following reasons.

Possibility of under utilization of available fixed facilities.

It may result in non-payment or delay in payment of day-today expenses

and other short-term liabilities.

Exploitation of favorable market conditions and reduction of overall cost

may not be possible.

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Under utilization of fixed facilities will result in low rate of return, which

may result in reduction of the market value of shares.

1.2 ABOUT THE INDUSTRY

It was during a midnight in 1990s group of worries toiled over an idea of

starting a very big express industry with its own fleet of aviation covering the

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whole world with mere am investment of time and determination the vision was

clear and so do the road to success. Thus a seed was shown on 9th April 1990 to

set a historic legendary in future. The warriors were highly qualified and

professionally experienced people from the Express industry.

The legendary began with just a singly office with four delivery points

and within six month HEX became a reliable and trustworthy name exclusively

among export segment. Hex is strongly to conquer the market at a remarkable

growth rate of 400% during the last four year against 30%prevailing in the

express industry .HEX became more powerful; by adding up its own fleet of

eighteen trucks covering the whole network.HEX is strongly backed up by committed hard working people and it

takes motherly axe for them. With the philosophy of delight the customer fever

and ever. FedEx provides customer and business worldwide with a broad portfolio

of transportation E-commerce and business service. With annual revenue of

36billions the company offers integrated business application through operation

companies competing collectively and managed collaboratively, under the

respected FEDEX brand.

Consistently ranked among the worlds most admired and trusted

employers FedEx inspires its more than largest express transpiration company.

Over 280000 employees and highest and professional standard and need of their

customer and communication. FedEx corporation has been recognized as one of

the world most respected companied for the strategic leadership.

FEDERAL EXPRESS CORPORATION,

Worlds number one Air Express Transportation company, having its

worldwide headquarters at Memphis, USA. Backed up with highly sophisticated

real-time electronic tracking and tracing systems, the companies have got an air

fleet of 643 aircrafts, serviing 215 countries covering more than 366 airports

around the globe. They have a ground fleet of more than 43,000 vehicles with the

trained manpower of 1, 45,000 employees worldwide, with the turnover of 23

billion

Hex Cargo Movers P Ltd, India which has got a credential of 14 years of rich

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experience in the industry, have been appointed as the first ASP of FedEx in south

India. The top executives and professional have been trained by the FedEx team

from Dubai and Brussels. As a part of winning participation, Hex have been

awarded as the top performer in training of "Essential Selling Skills" derived by

FedEx. With this joint venture Hex aims to reach the world on time every time.

This will enhance the global coverage and to meet out the required superior

service level of the customers through Hex in the International market place.

AIR FREIGHT AND SEA FREIGHT

With an association of a recognized and licensed CHA and IATA approved

freight forwarder, Hex will cater to the requirement of the customers to move

their valued commercial shipments to all locations in the globe, either through

AIR or through SEA.

This ultimately means, Hex can suffice the requirements of an exporter, whether

you name it-courier, express, commercial, on commercial, through air or through

sea, whether door to door, door to airport, airport to airport, giving the option to

the valued customer with a quality service forever.

AIR FREIGHT

Dimerco airfreight service offers scheduled consolidation services, direct air

carrier, airport-to-airport and door-to-door delivery features. Our real-time on-line

tracking system enables customers to accurately monitor the actual status of their

freight while it moves through the logistics supply chain from point of origin to

destination.

CARRIER PARTNERSHIP

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Quality service and space availability are two of the most critical factors for

customer satisfaction in international transportation. Based on the concept of

mutual growth and cost/risk sharing, Demerol has established strategic alliances

with a host of prominent carriers and shipping lines.

Dimerco Market Focus

Dimerco has been dedicated to the development of the Greater China logistics

market since 1991. As "Your China Logistics Specialist Dimerco is constantly

growing with its customers and partners by providing time-defined international

freight forwarding services as well as designing, implementing customized

logistics management solutions. Today, Dimerco operates more than 70 offices in

Greater China providing air, ocean, warehousing, trucking, domestic air/road

transportation, cargo insurance brokerage, customer brokerage and AQSIQ

inspection.

EXPORT SHIPPING;

Outbound Ocean Freight

FCL & LCL

Export Packing & Crating

Inland Hauling of export bound Cargo, from any point in the USA

Drayage of Containers from and back to harbor

Full Export Documentation

US Export and Import Customs Services

Overseas Customs Clearance

On-Carriage - Overseas Inland Delivery to Final Destination

Inbound Ocean Freight (Import)

1.3 ABOUT THE COMPANY

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Hex cargo mover private limited a private company was established on

19th may 1997, sir.C.S.KALAISELVUM as the chairman cum managing director

of the hex cargo mover private limited because of his sustained efforts to promote

the company with aspirations to bring if branches around the world and gain

momentum through positive dynamic approach for the companys continuous

growth.

The constitution of the board

K.S. ELANGOVAN DIRECTOR

N. SEETHARAMAN DIRECTOR

S.ANAND DIRECTORThe board has appointed the directors as regional directors with the

responsibilities of managing the zonal offices more efficiently and to take

decisions appropriately for the promotion and progress of the industry as a wholly

with concurrence from the M.D. director to the overall control and direction of the

board the managing director vested with over all managerial power as a whole

time ex official director.

Apart from regional branch offices hex cargo mover private limited vide

their objects clause of the memorandum, have appointed franchisees 68in

effective control and operation for quick delivery the franchisees are representing

the company for business promotion effective functioning of deliveries. The total

no of delivery points in and around Tamil Nadu is about 240 to facilitate quick

delivery operating through rules

Hex cargo mover private limited owns its own fleet of sixteen in number

the operation is direct throughout Tamil Nadu Kerala Andhra Karnataka

Maharashtra Bombay & Delhi .there is a proposal for increasing the fleet up to 50

in the near future including 15more vehicles immediately this will cover the nook

and corner of the Tamil Nadu state as well as all India level maneuver and quick

operations

The collections centers are opened only deliver on presentation by the local

people and to hubs franchisees and to H .O operations. The collection centers are

not canvassing like the franchisees of hex cargo mover private limited.

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The multiple and multipurpose activities of hex cargo mover private

limited will go a long way in making the company foremost and a pioneer u break

service to the business people . Industrialists and the common man in

professionalism hex cargo mover private limited have many more programmers

for promotion and consolidation of business in industrial circles.

Hex cargo mover private limited is in the dedicated service to the nation for

more than 15 years with glorious moments. The win- win group spreads its wings

further by offering solutions in India. A wide range of services are available

through each one tailored to suit the need of the business corporate exclusively.

Among the various products of service offered break bulk service serves byaccepting bilk consignment at one destination being distributed delivered to

different consignees according to the requirement.

Open delivery service is ready to help the customers by serving from

pointy to point express courier service teaching the valued shipment is shortest

time frame whats more door to door service is also offered where the shipments

are picked up from the specified destination and delivered at the exact doorstep.

Further seaport to seaport and airport to airport services are offered by us fir

import and export.

Full trick load and consolidation of part loads are yet other handy product

where the loads are accepted for delivery according tit hr requirement if the

customers. The containers available are or size 20/40 ft. above all us cover all

major metros cities and towns and cater it the needs of every client in every major

center with ware house facilities.

DISTRIBUTIONS WORLDWIDE

We distribute through an exclusive distributor in each country why is

responsible for indenting distributing servicing assisting and providing marketing

support for the service.

THE WORLD OF HEX CARGO

We have revolutionized service retailing in India by setting up a chain of high

profile store provide an international ambience showcasing our entire range. This

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provides the customer with the complete service experience making it the most

preferred place.

FEDEX CORPORATION

FedEx corporation FedEx introduced express delivery to the world in 1973

and remained the worlds largest express transportation company .today over

280000 employees worldwide serve more than 220 countries and territories across

the global with a fleet of 669 aircraft more than 75000 vehicles to deliver more

than 6.5 million packages per day.

FEDEX EXPRESSFedEx express a wholly owned company of FedEx, is divided into five global

regions:

Asia pacific

Canada

Europe, Middle East, Indian subcontinent and Africa

Latin American and the Caribbean

United states

RECOGNITION FOR FEDEX CORPORATION

FedEx corporation has been recognized as one of the worlds most respected

companies for the strategic leadership it provides to the independent companiesthat make up todays FedEx express, FedEx ground, FedEx freight, FedEx

Kinkos office and print services, FedEx custom critical, FedEx trade networks,

FedEx supply services and FedEx services recent recognition of its leadership,

workplace environment and contribution to the community includes.

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MAJOR ACTIVITIES OF THE COMPANY

Air freight

Sea freight

Courier

Cargo

Surface

Express

Imports and exports

Exhibtion

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CHAPTER- 2

2.1 OBJECTIVE OF THE STUDY

To study the working capital position of the company.

To prepare and analyze the statement of changes in working capital.

To study and identify the sources of working capital of the company.

To identify the working capital requirements of the company.

To suggest the ways to improvement the working capital management.

.

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2.2 SCOPE OF THE STUDY

The study is conducted mainly to review the financial strength of the

company for a period of five years from 2004-2005 to 2008-2009 as

revealed from the financial data of the companies annual reports.

Manual and accounting records it also helps in bringing out of the various

factors which a lead to down fall of the company performance.

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LIMITATIONS OF THE STUDY

The study is mainly depends upon the secondary data. I.e. The Final

report of the company for the period of five years only.

The Financial data cannot be estimated accurate for the future period

The analyses & Interpretation of the concern is based only past

performance.

The technical aspects of the production process are not considered for

the

Analysis.

It cannot be compared with those of other concern

Ratios are only post mortem of what has happened between two balance

sheets, they also given no clue to future.

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SOURCE OF SECONDARY DATA.

Trading and profit and loss Account

Balance sheet

Books

Newspaper

Journals

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TOOLS USED FOR ANALYSIS

Ratio analysis

Changes of working capital

Funs flow statement

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2.4 REVIEW OF LITERATURE

. A personal of research study in projects reveals that the topic of

financial performance and analysis of major interest to finance students

over the last decade the topic has been researched by a good number of

management students. In this chapter the researcher briefly brings to light

some selected studies on the topic.

Shree javalgekar (1977) says that, the return on investment is

inextricably linked with the method of controlling the size of the

concerned firms investments .investment in current asset is of great

significance as it generally constitutes more than 50% of the total assets of

the firm. Further the sales growth and the demand for funds in order to

fianc the current assets are directly and closely interlinked. For a small

firm or having enough capital, working capital is of greater importance.

One way of increasing the working capital for the would be reducing the

investment in fixed assets.

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Bhabatosh banerjee (1997) have analyzed the different turnover ratios

such as debtors and creditors as also the stock turnover ratio. The cash

position and cash movement is also examined with the effect of the

liquidity ratio.

Surendra s.Yadav p.k.jain ashish k.Raslogi (2001) estimated the

importance of working capital in any industrial concern needs no

emphasis. The management of working capital in one of the most

important aspects of the overall financial management. The existence of

an adequate working capital and its careful management can make

substantial difference between the success and failure of an enterprise.

S.A. Mohammed Ali in his financial performance analysis of

stances and company Ltd says that profitability does not show

satisfactory position. The company has to concentrate on

profitability. The current ratio also shows there is an inadequate

short- term fund. He suggested that the company must utilize its

capital and assets to a greater extent to increase its returns.

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G. Ravichandran has studied the ratio analysis of L.G.

Balakrishnan and Brothers Ltd, Coimbatore. His aim was to study

the ratio analysis of the company for a period of 5 years 1986

1990. He concluded that the financial position of company was not

continuously steady. The rate of return of the company has a

declining trend till 1988 89. He stressed the need of maintaining a

desirable collection and payment period.

CHAPTER -3

ANALYSIS AND INTERPRETATION

3.1 RATIO ANALYSIS:

3.1.1 CURRENT RATIO

In order to measure the short term liquidity or solvency

of a concern, comparison of current assets and current liabilities is inevitable.

Current ratio = current asset / current liabilities

Table no.3.1.1 current Ratio

CURRENT RATIO

Year

Current

assets

Current liabilities

Ratio

2004-2005 15,85,11,71 91,32,649 1.73

2005-2006 2,43,89,650 14,18,7,302 1.72

2006-2007 4,47,52,184 30,74,55,92 1.46

2007-2008 5,25,32,442 3,17,31,407 1.66

2008-2009 6,34,23,302 4,04,47,177 1.57

Source; Annual report.

INFERENCE;

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From the above table shows that the current ratio for the

year 2004-05 is 1.73. In the year 2005-06 it decrease to 1.72. In the year 2006-07

it decrease to 1.46 and in the year 2007-08 increases in 1.66. In the year 2008-09

is 1.57.current ratio standard norm is 2;1,current asset and current liabilities was

not meet out to the norms so current ratio is not satisfied.

Chart no.3.1.1 current Ratio

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3.1.2 QUICK RATIO

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The ratio is also termed as acid test ratio or liquidity ratio is ascertained by

comparing the liquid assets.

Quickratio=Quickasset/currentliabilities

Table no.3.1.2 quick ratio

QUICK RATIO

Year

Current

assets

Current liabilities

Ratio

2004-2005 15,85,11,71 91,32,649 1.73

2005-2006 2,43,89,650 14,18,7,302 1.72

2006-2007 4,47,52,184 30,74,55,92 1.46

2007-2008 5,25,32,442 3,17,31,407 1.66

2008-2009 6,34,23,302 4,04,47,177 1.57

Source; Annual reports.

INFERENCE;

From the above table shows that the quick ratio for the

year 2004-05 is 1.73..In the year 2005-06, it decrease to 1.72. In the year 2006-07it decrease to 1.46 and in the year 2007-08 increases in 1.66. In the year 2008-09

is 1.57.the quick ratio standard norm is 1;1,it shows the current liabilities would

meet out quick ratio norm so quick ratio satisfactory. Maintain the position in

future

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Chart no.3.1.2 quick Ratio

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3.1.3 DEBT EQUITY RATIO

Theratio is ascertained to determine long term solvency

position of a company. It known external equity ratio.

Debt equity ratio = external equity / internal equity.

Table no.3.1.3 Debt Equity Ratio

DEBT EQUITIY RATIO

year outside funds share holder

funds

ratio

2004-2005 5531119 12006114 0.46

2005-2006 9260361 18084519 0.51

2006-2007 12275511 22802790 0.53

2007-2008 17422420 30323571 0.57

2008-2009 15890918 30432711 0.52


INFERENCE;

From the above table shows that the debt equity

ratio for the year 2004-05 is 0.46.In the year 2005-06 it increase to 0.51. In the

year 2006-07 it increase to 0.53 and in the year 2007-08 increases in 0.57. In the

year 2008-09 is 0.52.the debt equity ideal ratio is 1,it shows the debt equity ratio

was not meet ideal debt equity ratio so debt equity ratio should need improve this

position in future.

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Chart no.3.1.3 Debt equity Ratio

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3.1.4 INTEREST COVERAGE RATIO.

It ratio establishes the relationship between profit before interest

and tax and fixed interest charged.Interest coverage ratio=profit before interest and tax/fixed interest charges.

Table no.3.1.4 interest coverage Ratio

year earnings

before@ tax

fixed interest

charges

ratio

2004-2005 1178389 - -

2005-2006 2113406 974844 2.17

2006-2007 1703713 1513241 1.13

2007-2008 2347125 2228612 1.05

2008-2009 1858121 3626630 0.51


INFERENCE;

From the above table shows that the interest coverratio for the year 2004-05 is NIL. In the year 2005-06 is 2.17. In the year 2006-07

it decrease to 1.13 and in the year 2007-08 decreases in 1.05. In the year 2008-09

is 0.51.it shows the interest coverage ratio is decreased year by year so it should

need improve this position in future.

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Chart no.3.1.4 interest coverage Ratio

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3.1.5 GROSS PROFIT RATIO.

This ratio is also known as gross margin or trading margin

ratio. Gross profit ratio indicates the difference between sales and direct cost.Gross profit ratio= gross profit / net sales x100

Table no.3.1.1 Gross Profit Ratio

GROSS PROFIT RATIO.

year Gross

profit

Net sales ratio

2004-2005 63249832 69847961 90.55

2005-2006 57394263 65700205 87.35

2006-2006 85359736 96309295 85.83

2007-2008 87452801 99456283 87.93

2008-2009 90034274 102482753 87.85


INFERENCE;

From the above table shows that the gross profit ratio

for the year 2004-05 is 90.55.In the year 2005-06 it decrease to 87.35. In the year

2006-07 it decrease to 85.83 and in the year 2007-08 increases in 87.93. In the

year 2008-09 is 87.85.it shows the gross profit ratio is decreasing year by year, so

it should need improve this level in future.

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Chart no.3.1.5 Gross profit Ratio

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3.1.6 NET PROFIT RATIO

It measure of management. Efficiency in operation the business

successfully from the owner .it indicates the return on shareholder investment.

Net profit ratio = net profit after tax / net sales.

Table no.3.1.6 Net Profit Ratio

NET PROFIT RATIO

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year Net profit sales Ratio

2004-2005 1178389 69847961 1.69

2005-2006 1972613 65700205 3.00

2006-2007 1589213 96309295 1.65

2007-2008 2231844 99456283 2.24

2008-2009 1750406 102482753 1.71

Source; Annual reports.INFERENCE;

From the above table shows that the net profit ratio for

the year 2004-05 is 1.69.In the year 2005-06 it increase to 3.00. In the year 2006-

07 it decrease to 1.65 and in the year 2007-08 increases in 2.24. In the year 2008-

09 is 1.71.here net profit ratio has average level so it should improve this position

in future.

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Chart no.3.1.6 Net Profit Ratio

3.1.7 OPERATING RATIO.

This ratio indicates the relationship between total operating

expense and sales.

Operating ratio =cost of goods sold operating expense / sales. X 100

Table no.3.1.7 operating Ratio

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OPERATING RATIO

year Operating

profit.

sales Ratio

2004-2005 13196250 69847961 18.89

2005-2006 16611884 65700205 25.28

2006-2007 21899118 96309295 22.73

2007-2008 24006964 99456283 24.13

2008-2009 24896958 102482753 24.30


INFERENCE;

From the above table shows that the operating ratio

for the year 2004-05 is 18.89.In the year 2005-06 it increase to

25.28. In the year 2006-07 it decrease to 22.73 and in the year 2007-

08 increases in 24.13. In the year 2008-09 is 24.30.it shows the

operating profit ratio has average position so company should reducethe operating expanse in future.

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Chart no.3.1.7 operating Ratio

3.1.8 FIXED ASSETS RATIO.

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The ratio establishes the relationship between fixed assets and long term

funds. It calculating ratio is oil ascertain the proportion of long term funds

invested in fixed assets.

Fixed assets ratio = fixed assets/ long term funds.

Table no.3.1.8 fixed assets ratio.

fixed assets ratio

year fixed assets long term

funds

Ratio

2004-2005 5236142 11278855 0.46

2005-2006 7847871 16980710 0.46

2006-2007 8779048 21585074 0.41

2007-2008 9522537 28963827 0.32

2008-2009 7456585 29182731 0.25

Source; Annual report

INFERENCE;

From the above table shows that the fixed asset ratio for the

year 2004-05 is 0.46.In the year 2005-06 it increase to 0.46. In the year 2006-07

it decrease to 0.41 and in the year 2007-08 decreases in 0.32. In the year 2008-09

is 0.25.the ideal fixed ratio ratio is 0.67. it shows fixed assets ratio was not meet

ideal fixed assets ratio so fixed assets ratio is not satisfactory.

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Chart no.3.1.8 fixed assets ratio

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3.1.9 RETURN ON ASSETS RATIO (ROA)

This ratio is calculated to measure the productivity of total asset.

Return on asset ratio = (net profit after tax / total asset x 100).

Table no.3.1.9 return on asset Ratio

RETURN ON ASSETS RATIO

YEARNET

PROFIT

TOTAL

ASSETSRATIO

2004-2005 1178389 12006114 9.81

2005-2006 1972613 18084519 10.91

2006-2007 1589213 22802790 6.97

2007-2008 2231844 30323571 7.36

2008-2009 1750406 30432711 5.75

Source; Annual report.

INFERENCE;

From the above table shows that the return on asset ratio

for the year 2004-05 is 9.81.In the year 2005-06 it increase to 10.91. In the year

2006-07 it decrease to 6.97 and in the year 2007-08 increases in 7.36. In the year

2008-09 is 5.75. Here the ratio is decreasing year by year so productivity of total

assets decreasing .it should improve this position in future.

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Chart no.3.1.9 return on asset Ratio

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3.1.10 EARNING PER SHARE RATIO

In order to avoid confusion on account of their varied meaningof the term capital employed. It determination of market price of equity share.

Earning per shares = (net profit - preference dividend / No of equity shares).

Table no.3.1.10 earning per share Ratio

EARNING PER SHARE RATIO

year net profitNo. Of equity

sharesRatio

2004-2005 1178389 17000 69.32

2005-2006 1972613 46000 42.08

2006-2007 1589213 46000 34.55

2007-2008 2231844 215000 10.38

2008-2009 1750406 169000 10.36


INFERENCE;

From the above table shows that the earning per share

ratio for the year 2004-05 is 69.32..In the year 2005-06 it decrease

to 42.08. In the year 2006-07 it decrease to 34.55 and in the year

2007-08 decreases in 10.38. In the year 2008-09 is 10.36.it shows

the earning per share is decreasing year by year so company mark

price of equity share decreasing it should improve in future.

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Chart no.3.1.10 earning per share ratio

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3.1.11. RETURN ON SHAREHOLDER FUND.

This ratio determines the profitability from the shareholder point of

view. Return on share holder funds = net profit after interest and tax/

shareholder funds x100 Table no.3.1.11. Return on shareholder fund.

RETURN ON SHAREHOLDER FUND

year Net profit shareholder

fund

Ratio

2004-2005 1178389 12006114 9.82

2005-2006 1972613 18084519 10.9

2006-2007 1589213 22802790 6.96

2007-2008 2231844 30323571 7.36

2008-2009 1750406 30432711 5.75


INFERENCE;

From the above table shows that the earning per share

ratio for the year 2004-05 is 9.85..In the year 2005-06 it decrease to

10.90. In the year 2006-07 it decrease to 6.96 and in the year 2007-

08 increases in 7.36. In the year 2008-09 is 5.75.it shows the return

on shareholder fund is decreasing year by year so company

profitability of share capital decreasing it should improve in future.

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Chart no.3.1.11. Earning per share ratio

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3.1.12: CASH POSITION RATIO:

This ratio is also called Absolute liquidity ratio or super quick ratio. Thisis a variation of quick ratio.

Cash position ratio = Cash & bank balance / current liabilities

Table no 3.1.12: Cash position ratio

CASH POSITION RATIO

year CASH&BANK

BALANCE

CURRENT

LIABILITIES

RATIO

2004-2005 388522 9132649 0.042

2005-2006 302000 14187302 0.021

2006-2007 671346 30745592 0.022

2007-2008 294469 31731407 0.0092

2008-2009 1000762 40447177 0.025


INFERENCE;

From the above table shows that the cash position ratiofor the year 2004-05 is 0.042..In the year 2005-06 it decrease to

0.021. In the year 2006-07 it increase to 0.022 and in the year 2007-

08 decreases in 0.0092. In the year 2008-09 is 0.025. it shows the

cash position ratio is decreasing year by year so it should need

improve in future

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Chart no.3.1.12.cash position ratio

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3.2.1Statement showing the changes in working capital (2004-2005)

PARTICULARS 2004 2005 INCREA

SE

DECREA

current assets

Deposits and

advances

2837883 3273459 435576 1782898

Sundry debtors 13972088 12189190 - 118852

Cash and bal 507374 388522 - 118852

Total-A 17317345 15851171 - -

Liability and

provision

11791662 9132645 2659017 --

Total-B 11791662 9132645 - -

Total A-B 5525683 6718526 -- --

increase on

working capital

1073991 -- -- 1073991

TOTAL 6718526 6718526 8625000 8625000

Source; Annual reports

INFERENCE

From above table shows the working capital increased (1073991).In

this year 2004-2005

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3.2.2 Statement showing the changes in working capital (2005-2006).

PARTICULARS 2005 2006 INCREASE DECREASE

current assets

Deposits and

advances

3273459 3494252 220793 --

Sundry debtors 12189190 20593397 8404207 --

Cash and bal 388522 302001 -- 86521

Total-A 15851171 24389650

Liability and

provision

9132650 14187302 -- 5054652

Total-B 9132650 14187302 -- --

Total A-B 6718521 10202347 - --

increase on

working capital

34838227 --- - 3483827

TOTAL 10202347 10202347 8625000 8625000


INFERENCE


this year 2005-2006.

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3.2.3 Statement showing the changes in working capital (2006-2007).

PARTICULARS 2006 2007 INCREASE DECRE

ASE

Current assets

Deposits and

advances

3439252 4627429 1133177 --

Sundry debtors 20593398 394553408 18860010 --

Cash and bal 302000 671347 369347 --

Total-A 24334650 399852184 -- --

Liability and

provision

14187303 30745592 -- 16558289

Total-B 14187303 30745592 - --

Total A-B 10202347 369106592 --

increase on

working capital

3804245 --- 3804245

total 14006591 14006591 20362534 20362254


INFERENCE



3.2.4 Statement showing the changes in working capital (2007-2008)

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current assets

Deposits and

advances

4627429 7209519 2582090 -

Sundry debtors 39453408 45028453 5575045 -

Cash and bal 671347 294470 -- 376877

Total-A 44752184 52532442 -- --

Liability and

provision

30745592 31731407 - 985815

Total-B 30745592 31731407 -- --

Total A-B 14006591 20801035 -- --

increase on

working capital

6794443 --- -- 6794443

total 20801035 20801035 8157135 8157135


INFERENCE



3.2.5 Statement showing the changes in working capital (2008-2009)

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current assets

Deposits and

advances

7209519 9056295 1846776 --

Sundry debtors 45028453 53366245 8337792 --

Cash and bal 294470 1000762 706292 --

Total-A 52532442 63423302 -- --

Liability and

provision

31731408 40447177 -- 8715769

Total-B 31731408 40447177 --

Total A-B 20801034 22976125 --

increase on

working capital

2175091 -- -- 2175091

total 22976125 22976125 10890860 10890860


INFERENCE

From above table shows the working capital increased (2175091).In this year

2008

3.3.1 Statement showing the funs flow statement (2004-2005)

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SOURCE OF FUNDS 2004 2005

Capital 560000 1780000

Reserve and surplus 2789346 3967735

TOTAL 3349346 5747735

LOANS AND ADVANCE

Secured loans 4074368 4851119

unsecured loans 1054500 680000

DEFERRED TAX LIABILITY 414110 727259

TOTAL 8892324 12006114

APPLICTION OF FUNDS

FIXED ASSETS 3298042 5236142

Current asset 17317343 15851171

Less; currents liabilities provisions 11791661 9132649

Net current assets 5525682 6718521

Miscellaneous expenditure 68600 51450

TOTAL 8892324 12006114

INFERENCE

From above table shows the inflow increased (2004-2005) the outflow

shows the also increased.


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Capital 1780000 1780000


TOTAL 2187735 61045349

LOANS AND ADVANCE



DEFERRED TAX LIABILITY 727259 1103809TOTAL 12006114 18084159

APPLICTION OF FUNDS

FIXED ASSETS 5236142 1245348

CURRENT ASSETS 15851171 24389649

TOTAL 15851171 24389650

Less; current liability 9132649 14187302



TOTAL 12006114 18084519

INFERENCE





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Capital 1780000 1780000


TOTAL 7720349 9309562

LOANS AND ADVANCE




TOTAL 18084519 22802790

APPLICTION OF FUNDS

FIXED ASSETS 7847871 8779048

Current assets 5855589 44752182

TOTAL 24389650 44752184




TOTAL 18084519 22802790

INFERENCE





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Capital 1780000 1780000


TOTAL 9309562 11541406

LOANS AND ADVANCE

Secured loans 11560511 16987420



APPLICTION OF FUNDS

FIXED ASSETS 8779048 1752589


TOTAL 44752184 52532442



Miscellaneous expenditure 17150 -----------

TOTAL 22802790 30323571

INFERENCE




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Capital 1780000 1780000


TOTAL 11541406 13291813

LOANS AND ADVANCE

Secured loans 16987420 15455918



TOTAL 30323571 30432711

APPLICTION OF FUNDS

FIXED ASSETS 9522537 7656585


TOTAL 52532442 63423302




TOTAL 30323571 30432711

INFERENCE



3.4.1 ANALYSIS COMPARATIVE BALANCE SHEET

3.4.1COMPARATIVE BALANCE SHEET (2004-2005)

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Particulars 2004 2005 Inc/Dec

Inc/Dec

(%)

current assets

1731734

4

1585117

1 -1466173 -8.46

fixed assets 3298042 5236142 1938100 58.76

TOTAL ASSETS

2061538

6

2108731

3 471927 2.28

currents liabilities

1179166

1 9132649 -2659012 -22.54

miscellaneous 68600 51450 -17150 -25

share capital 560000 1780000 1220000 217.85

reserve & surplus 2789346 3967735 1178389 42.24

TOTAL LIABILITIES

[A]

1520960

7

1493183

4 -277773 -1.82

secured 1054500 680000 -374500 -35.51

unsecured 4074368 4851119 776751 19.06

deferred tax 414110 727259 313150 75.62

TOTAL LOANS [B] 5542978 6258378 1464401 26.41TOTAL LIABILITIES

[A+B]

2075258

5

2119021

2 1742174 8.4


INFERENCE

From the above table total assets is increasing (2.28%), In this year

(2004-2005) and total liabilities decreased (1.82%)

3.4.2 COMPARATIVE BALANCE SHEET (2005-2006)

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Inc/Dec

(%)

current assets

1585117

1 24389650 8538479 53.86

fixed assets 5236142 7847872 2611730 49.87

TOTAL ASSETS

2108731

3 32237522

1115020

9 52.87

currents liabilities 9132649 14187302 5054653 55.34

miscellaneous 51450 34300 -17150 -33.33

share capital 1780000 1780000 0 0reserve & surplus 3967735 5940349 1972614 49.71

TOTAL LIABILITIES

[A]

1493183

4 21941951 7010117 46.94

secured 680000 680000 0 0

unsecured 4851119 8580362 3729243 76.87

deferred tax 727259 1103809 376550 51.77

TOTAL LOANS [B] 6258378 10364171 4105793 65.6

TOTAL LIABILITIES

[A+B]

2119021

2 32306122

1111591

0 52.45


INFERENCE

From the above table total assets is increasing (52.87%), In this year

(2005-2006) and total liabilities increased (46.94%).


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particulars 2006 2007 Inc/Dec

Inc/Dec

(%)

current assets

2438965

0 44752184

2036253

4 8.34

fixed assets 7847872 8779048 931176 11.86

TOTAL ASSETS

3223752

2 53531232

2129371

0 66.05


1418730

2 30745592

1655829

0 116.71

miscellaneous 34300 17150 -17150 -50

share capital 1780000 1780000 0 0

reserve & surplus 5940349 7529562 1589213 26.75

TOTAL LIABILITIES

[A]

2194195

1 40072304

1813035

3 82.62

secured 680000 715000 35000 5.15

unsecured 8580362 11560511 2980149 34.73

deferred tax 1103809 1217716 113907 10.32

TOTAL LOANS [B]

1036417

1 13493227 3129056 30.19

TOTAL LIABILITIES

[A+B]

3230612

2 53565531

2125940

9 65.8


INFERENCE

From the above table total assets is increasing (66.05%),In this year

(2006-2007) and total liabilities increased (82.62%)


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Inc/Dec

(%)

current assets

4475218

4 52532442

778025

8 17.38

fixed assets 8779048 9522537 743489 8.46

TOTAL ASSETS

5353123

2 62054979

852374

7 15.92


3074559

2 31731407 985815 3.2

miscellaneous 17150 0 0 0

share capital 1780000 1780000 0 0

reserve & surplus 7529562 9761406

223184

4 29.64

TOTAL LIABILITIES

[A]

4007230

4 43272813

320050

9 7.98

secured 715000 435000 -280000 -39.16

unsecured

1156051

1 16987420

542690

9 46.94

deferred tax 1217716 1359744 142028 11.66

TOTAL LOANS [B]

1349322

7 18782164

528893

7 39.19

TOTAL LIABILITIES

[A+B]

5356553

1 62054977

848944

6 15.84


INFERENCE


(2007-2008) and total liabilities increased (7.98%).

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Inc/Dec

(%)

current assets 52532442 63423302

1089086

0 20.73

fixed assets 9522537 7456585 -2065952 -21.69

TOTAL ASSETS 62054979 70879887 8824908 14.22

currents liabilities 31731407 40447177 8715770 27.46

miscellaneous 0 0 0 0

share capital 1780000 1780000 0 0

reserve & surplus 9761406 1511813 -8249593 -84.52

TOTAL

LIABILITIES [A] 43272813 43738990 466177 10.77

secured 435000 435000 0 0

unsecured 16987420 15455918 -1531502 -9.01

deferred tax 1359744 1249980 -109764 -8.07

TOTAL LOANS [B] 18782164 17140898 -1641266 -85.86TOTAL

LIABILITIES [A+B] 62054977 11519888

5053508

9 81.43


INFERENCE


(2008-2009) and total liabilities increased (10

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CHEPTER-4

4.1 FINDINGS

The current ratio in this year increased (04-05) ratio is 1.73 in this years

decreased (05-06), (06-07), (07-08), (08-09). Ratio is 1.72, 1.46, 1.66,

1.57.The current ratio standard norms 2; 1 but current ratio was not met

out the current liabilities so current ratio is not satisfied.

The quick ratio standard norms is 1; 1, the quick ratio is 1.73, in this years

(05-06) 1.72, (06-07), 1.46 (07-08) 1.66, (08-09) ratio is 1.57.the quick

ratio could meet out standard norms so here quick ratio satisfactory..

The debt equity ratio standard norms is 1,(04-05) 0.46,(05-06 0.51,9),

(06-07) 0.53,(07-08) 0.57 ,(08-09) 0.52, it ratio wasnt meet standard

norms so debt equity ratio here not satisfied.

Interest coverage ratio is decreased year by year. ratio is (04-05) nil

(05-06) 2.17, (06-07) 1.13, (07-08) 1.05, (08-09) 0.51.so company fixed

charges is reducing. The gross profit ratio is (04-05) 90.55,(05-060 87.35,(06-070 85.83 ,907-

08) 87.93, (08-09) 87.85.it shows the gross profit ratio decreased year by

year .

Net profit ratio is decreased year by year. In this years (04-05),(05-06),

(06-07),(07-08),(08-09).{1.69,3.00,1.65,2.24,1.71}. It shows the net profit

has average level so should want change this level in coming year.

Operating ratio has increasing level. Companies try to avoid the operating

expense years (04-05), (05-06), (06-07), (07-08), (08-09). Ratio is {18.89

25.28 22.73 24.13 24.30}.

Fixed assets ratio norms 0.67. The company fixed assets ratio wasnt meet

ideal ratio so company fixed ratio is not in the good position.

The coverage ratio decreased year by year. Years is (04-05) nil, (05-06)

2.17, (06-07) 1.13, (07-08)1.05,(08-09) 0.51. The company fixed assets

interest charges is not satisfied.

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Gross profit ratio has average level just try means get more profit in future

so it try. Ratio is {90.55, 87.35, 85.83, 87.93, and 87.85}.

Net profit ratio has average level try to improve this profit.(04-05 1.69,

(05-06) 3.00,(06-07) 1.65,(07-08) 2.24,(08-09)1.71.

The company has been maintained operating expense average level so try

to reduce the expense in future time. . (04-05 18.89,(05-06) 25.28,(06-07)

22.73,(07-08) 24.13,(08-09)24.30.

The company productivity of total assets year by year decreased ratio is .

(04-05 9.81,(05-06) 10.91,(06-07) 6.97,(07-08) 7.36,(08-09) 5.75.

The earnings per share is year by year reducing this position affect to

share value so company should concentration own this ratio. .(04-05

69.32,(05-06) 42.08,(06-07) 34.55,(07-08) 10.38,(08-09) 10.36.

The company cash position is going very low level.

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4.2 SUGGESTION

The company current assets could not meet out current liabilities so

company should improve current assets.

The company quick ratio norms 1; 1. So it is satisfactory. The companies

try maintaining the ratio.

The company should try to improve long term fund and out side fund from

share holders. There must be an increase in future.

The company has to take steps improve interest coverage ratio because

long fund and risk reduce.

The gross profit ratio has average level so should need improve the

position in coming period.

Operating Ratio Company has maintained good position. It should reduce

good way running the concern.

Company productivity of fixed assets has low level so should try to

improve base on return on assets.

Earning per share coming low level so should need improve the position.

The company should try to investing in more amount of working capital.

The company should reduce the operating expenses by cost control and

cost reduction in order to increase the net profit margin.

The company should be improving the investment in future.

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CONCLUSION:

The project did as an analysis on the working capital management

system. It was doing use comparative balance sheet profit and loss of common

size balance sheet.

The ratios of current ratio, quick ratio, debtors turnover ratio,

inventory turnover. Working capital turnover ratio, operation ratio, operating

profit ratio, net profit ratio and return on investment were also formed, the

findings were given and suggestions were made for the working capital

management.

The project has provided me with both theoretical and practical

knowledge in the field with the current trend in business.

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APPENDIX

Balance sheet as on (2004-2009)

PARTICULARSAS AT

31.03.04

AS AT

31.03.05

AS AT

31.03.06 AS AT

31.03.07

AS ON

31.03.08

AS ON

31.03.09

I. SOURCES OF

FUNDS

1. Share Holders Fund

(1) SHARE CAPITAL

Authorised Share Capital

500000 Shares of Rs.

10/- each 5000000.00 5000000.00 5000000.00 5000000.00 5000000.00 15000000.001500000 Shares of Rs.

10/- each0.00

(a) Issued, Subscribed

and Paid up NIL 460000.00 1690000.00

46000 Equity Shares of

Rs.10/- each 460000.00 460000.00 460000.00 0.00 90000.00 1690000.00

(b) Share Application

Money 100000.00 1320000.00 1320000.00 1320000.00 9750000.00 90000000.00

(c) Reserves & Surplus 2775000.00 3950000.00 5925000.00 7525000.00 11406.78 11500000.00

(d) Profit and Loss

Account 14346.00 17735.52 15349.50 4562.60 11813.00

2. Caution Deposit 1054500.00 680000.00 680000.00 715000.00 435000.00 435000.00

3. Loans & Advances 4074368.00 4851119.83 8580361.02

11560511.6

7

16987420.9

1 15455918.06

4. Deferred Tax Liability 414110.00 727259.00 1103809.00 1217716.00 1359744.00

8892324.4912006114.3

5

18084519.5

2

22802790.2

7

28633571.6

9 30432711.13

PARTICULARSAS AT

31.03.04

AS AT

31.03.05

AS AT

31.03.06

AS AT

31.03.07

AS ON

31.03.08

AS ON

31.03.09

II. APPLICATION OF

FUNDS

1. FIXED ASSETS :

(a) Gross Block 3695979.00 3298042.00 5236142.64 7847871.77 8748247.68 9103666.59

(+) Additions 2719760.00 3857078.00 2574573.12 2526879.00 114391.00(b) Depreciation 397937.00 781659.36 1245348.87 1643396.46 1752589.68 1761471.00

(c) Net Block 3298042.00 5236142.64 7847871.77 8779048.43 9522537.00 7456585

2. CURRENT ASSETS,

DEPOSITS &

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ADVANCES

(a) Deposits & Advances 2837883.00 3273459.00 3494252.05 4627428.87 7209518.71 9056294.00

(b) Sundry Debtors

13972087.0

0

12189190.3

0

20593397.4

3

39453408.2

8

45028453.4

6 53366245.00(c) Cash & Bank

Balances 507373.00 388522.40 302000.75 671346.98 294469.88 1000762.00

#########15851171.7

0

24389650.2

3

44752184.1

3

52532442.0

5 63423302.00

(ii) Less: CURRENT

LIABILITIES

ANDPROVISIONS

11791661.00 9132649.99

14187302.48

30745592.29

31731407.36 40447177.00

6718521.7110202347.7

5

14006591.8

4

20801034.6

9 22976125.00

3. MISCELLANEOUS

EXPENDITURE(Preliminary & Pre-

operative Expenses to

the extent not written

off) 68600.00 51450.00 34300.00 17150.00 0.00 0.00

8892324.4912006114.3

5

18084519.5

2

22802790.2

7

30323571.6

9 30432711.16

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BIBLIOGRAPHY:

T.S. Reddy & Y Hariprasad ready, Management accounting Margham

publication:7th

edition 2006 (P. 3.26 to 3.75)

S.N. Maheswari, Management accounting Sultan chand & sons,1995 6th

edition (P. 81 to 120)

C.R Kothari, Research methodologyMethods and Techniques, (2nd ed ;

New Delhi: Viswa Prakasham, 1996)ch.1,p.30-38

M.Y khan & p.k jain, Financial management (5th ed: Tata Mc Graw-Hill

publishing company limited) ch.16,p.16.1

M.P pandikumar. Management accounting(1st ed: Excel books, New

Delhi)ch.12,p.271

WEBSITES:

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