PROJECT REPORT ON WORKING CAPITAL MANAGEMENT AND ROLE OF FINANCE DEPARTMENT AT WILDFLOWER HALL SHIMLA

PROJECT REPORT On Working capital management For Two Months Industrial Training And Role of finance department At Wildflower Hall SHIMLA, HIMACHAL PRADESH Towards partial fulfilment of the requirements for the award of Degree of Masters of Business Administration Under the guidance of
ANUJ JAIN
(FINANCIAL CONTROLLER)

NISHA SHARMA
(FACULTY GUIDE)

Submitted to:

Submitted by:

Sunil Verma

DECLARATION

I, hereby declare that the Project Report entitled WORKING CAPITAL MANAGEMENT AND ROLE OF FINFNCE DEPARTMENT AT WILDFLOWER HALL SHIMLA submitted in partial fulfilment of the requirement for the degree of Masters of Business Administration submitted to IGNOU is my original work and has not been submitted for the award of any other Degree, Diploma of similar Title or Prize.

Place: Shimla Dated:

Signature

GUIDES CERTIFICATE

This is to certify that this project study titled Working capital management And Role of finance department at Wildflower Hall Shimla has been conducted by Mr Sunil Verma, Roll no122872698., a student of the second year full time M.B.A program, being run by the Indigrow Institute Of Professional Study, under my supervision.

Signature (Mr. Anuj Jain)

Table of Contents
S. No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27.

Topics
Acknowledgement Preface Abbreviations The Oberoi Group an Introduction and history Current Location Of Obroi Hotel &Resort Two Strong and Distinct Brands The Oberoi Group Mission The Oberoi Group Vision The Oberoi Group Dharma 5 Golden Rules Wildflower Hall, an Introduction Wildflower Hall, an Overview Wildflower Hall History Hotel Profile Awards &Departmental Overview Capital structure of wild flower Organization structure Department overview Review of literature Need for study Role of Finance Department Functions of Finance Department Introduction Of Working capital Management Management of working capital management Research methodology SWOT Analysis of Oberoi Group Bibliography

Page No.
6 7 8 9 16 17 19 20 21 22 23 24 25 26 28 29 32 35 38 40 41 42 45 48 49 78 79

Acknowledgement
Gratitude is a duty which ought to be paid

Words cannot express the deep sense of gratitude and indebtness towards the people who have helped me in successful completion of my project. With regard to my Project I would like to thank each and every one who offered help, guideline and support whenever required. First and foremost I would like to express gratitude to Dr. Sonia chadda, Head of the Department and all teachers of MBA department, IIPS Shimla, for providing me an opportunity to do the industrial training at Wildflower Hall, an Oberoi Resort. I am extremely grateful to Mr. Anuj Jain, Financial Controller and the finance team who helped me in gaining practical knowledge and for giving me their valuable guidance in the Project work. I extend my sincere gratitude towards Wildflower Hall, an Oberoi Resort for providing the opportunity and resources to work on this project would like to thank each and every one who offered help, guideline and support whenever required. Last but not the least I would like to thank those peoples whos encouraged and enriched my ideas to complete my project.

Preface
The global economy of the day has endangered the survival of every organization and in particular those who want to have a competitive edge over the others. The competitive edge may be a distant dream in the absence Superior Quality Products which otherwise is the function of well trained employees. Today resources are scarce and have to be used carefully and trainers of all kinds are required to justify their position and account for their activities. Training activities, which are in directed and inadequately focused, do not serve the purpose of the trainers, the trainees and the organization. Hence the identification of the training needs becomes the top priority of every progressive organization. Identification of training needs if done properly, provides the basis on which all other training activities can be considered and will lead to multi skilling, fitting people to take extra responsibilities increasing all round competence and preparing people to take on high level responsibilities in future. This project is the result of study conducted in the finance department of Wildflower Hall, an Oberoi Resort. The project report is basically rooted to the financial activities of the hotel. Various activities covered in the project report encompass the study of Working Capital Management and Role of Finance Department at Wildflower Hall Shimla. I have also tried to explain the importance of different area of finance in detail in the report.

Abbreviations:

AP

Accounts Payable

AR

Accounts Receivable

DRR

Daily Receiving Report

GL

General Ledger

MRR

Monthly Receiving Report

PJV

Purchase Journal Voucher

VP

Voucher Payable

THE OBEROI GROUP INTRODUCTION AND HISTORY

Late Rai Bahadur M.S. Oberoi

Founder Chairman, The Oberoi Group

Early Life:
Rai Bahadur Mohan Singh Oberoi was born on 15th August, 1898 in erstwhile undivided Punjab, which is now in Pakistan. He was only six months old when his father died. Success and fortune did not, therefore, come easily to him. Initiative, resourcefulness and hard work, combined with the capability to face and overcome the most overwhelming odds can best characterise this phenomenal entrepreneur. Mr. M.S. Oberoi completed his primary education in Rawalpindi and moved to Lahore for his Bachelors degree. Shortly thereafter, to flee the ravages of a virulent plague, he went to seek his fortune in Shimla, the summer capital of British India. Arriving penniless, he found a job at a monthly salary of INR 50, as the front desk clerk at the Cecil Hotel. Today, The Oberoi Group owns the hotel The Oberoi Cecil where the young Mr. Oberoi found his metier. The diligence, enthusiasm and intelligence displayed by Mr. Oberoi impressed Mr. Grove, the manager of the hotel. A quick learner, Mr. Oberoi did not restrict his efforts to fulfilling the job description of a desk clerk but sought and shouldered additional responsibilities. A few years later, when Mr. Clarke acquired a small hotel he asked Mr. Oberoi to assist him. It was here, at Clarkes Hotel, that Mr. Oberoi gained firsthand experience in all aspects of operating a hotel.

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 Budding Entrepreneur:
In 1934, Mr. Oberoi acquired his first property, The Clarkes Hotel, from his mentor by mortgaging his wifes jewellery and all his assets. Four years later, he signed a lease to take over operations of the five hundred rooms Grand Hotel in Calcutta that was on sale following a cholera epidemic. With his customary confidence and sheer determination to succeed, he was able to convert this hotel into a highly profitable business venture. Over several years, Mr. Oberoi had purchased shares in Associated Hotels of India (AHI), which owned Cecil and Corstophans hotels in Shimla, Maidens and Imperial hotels in Delhi and a hotel each in Lahore, Murree, Rawalpindi and Peshawar. In 1943, Mr. Oberoi acquired controlling interest in AHI. He thus became the first Indian to run the countrys largest and finest hotel chain.

International Pioneer:
Having consolidated his early ventures, Mr. Oberoi became the first Indian hotelier to enter into an agreement with an internationally renowned hotel chain, to open the first modern, five-star hotel in the country. The Oberoi Inter Continental, in New Delhi opened in 1965. The I-Con, as it became popularly known, offered facilities that no other hotel in the country matched and was Indias first luxury hotel. This achievement was enhanced with the opening of the 35-storey Oberoi Sheraton in Bombay, in 1973. Mr. Oberoi was the first Indian to work in association with international chains to woo international travellers to India. This led to a heavy influx of international travellers and foreign occupancy soared to an average of 85%. This enabled the Oberoi Hotels to significantly contribute to Indias foreign exchange earnings. Mr. Oberoi realized that the hotel and hospitality business is greatly dependent on travel agents, a vital element in the distribution chain. Therefore, he decided to establish his own travel agency. Mercury Travels, part of The Oberoi Group, ranks amongst the leading travel agencies in India. With vision and imagination, Mr. Oberoi converted old and dilapidated palaces, historical monuments and buildings into magnificent hotels such as The Oberoi Grand in Calcutta, the historic Mena House Oberoi in Cairo and The Windsor in Australia. It was, in fact, in the face of severe opposition that the State Government of Victoria awarded Mr. Oberoi the lease of The Windsor, a heritage building in Melbourne. He personally supervised the restoration of the hotel to its original grandeur and later acquired it. The Oberoi Cecil in Shimla, built in the early 20th century, reopened in April 1997 after extensive and meticulous renovation.

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Awards and Honours:

In 1943, Mr. Oberoi was conferred the title of Rai Bahadur by the British Government in recognition of his services to the Crown. Thereafter, Mr. Oberoi won acclaim and received several national and international awards including admission to the Hall of Fame by the American Society of Travel Agents (ASTA) and Man of The World award by the International Hotel Association (IHA), New York. He was presented the Order of the Republic, First Class by the President of Egypt. He got an Honorary Doctorate of Business Administration from the International Management Centre, Buckingham, UK. Newsweek named him one of the Elite Winners of 1978. The PHDCCI Millennium award in 2000 was presented in recognition of his entrepreneurial and business success. In 2001, the Government of India accorded him the Padma Bhushan.

Globalization of The Oberoi Group:

To place The Oberoi Group on the world map, Mr. Oberoi exported management expertise to Australia, Egypt and Singapore, where The Oberoi Group took charge of the management of existing luxury hotels. The success of Oberoi Hotels & Resorts overseas, in the face of global competition, greatly enhanced the image of The Group. Today, Oberoi Hotels & Resorts in Indonesia, Egypt, Mauritius, Saudi Arabia and India add value and distinction to their host countries.

Mr. P.R.S. Oberoi, The Head of The Family

Chairman and Chief Executive Officer, The Oberoi Group

Mr. P.R.S. Oberoi is the Chairman and Chief Executive Officer of EIH Limited, the flagship company of The Oberoi Group. He is also the Chairman of Oberoi Hotels Private Limited, the major shareholder of EIH Limited. Popularly known as Biki, Mr. Oberoi is the son of late Rai Bahadur M.S. Oberoi, the founder of The Oberoi Group. Mr. P.R.S. Oberoi was educated in India, the United Kingdom and in Switzerland. In addition to providing leadership for the management of luxury hotels in several countries, Mr. Oberoi has been instrumental in pioneering the development of the new Oberoi hotels and resorts. The Oberoi brand has come to represent fine luxury hotels. Mr. Oberoi is credited with placing Oberoi hotels on the international luxury travellers map with the opening of several new luxury hotels in important locations, thus redefining

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architectural and design standards in luxury hospitality. A key aspect of this is the development of hotels that reflect their environment. It is Mr. Oberois firm belief that people are the most valuable asset of any organisation. Recognising the importance of quality in hospitality management, Mr. Oberoi established The Oberoi Centre of Learning and Development at New Delhi in 1966. Today, this institution is considered amongst the best in Asia. As a member of the World Wide Fund for Nature, Mr. Oberoi is committed to the conservation of the environment. Above all, Mr. Oberoi is aware of the need to constantly promote quality in every segment of the hospitality industry. Under his leadership, Oberoi Hotels and Resorts have received numerous international awards. In 2001, His Majesty King Mohammed VI of Morocco personally awarded Mr. Oberoi the Grand Officer of the Alalaoui Wissam, which is one of the highest awards in Morocco. The award was conferred in recognition of Mr. Oberois contribution to tourism and to IndoMoroccan relations. In recognition of his exceptional leadership and vision, the 6th International Hotels Investment Forum in Berlin honoured Mr. Oberoi with the prestigious Lifetime Achievement Award in March 2003. In January 2004, Mr. Oberoi was conferred a Special Award by the Department of Tourism, Government of India, in recognition of his contribution to the tourism sector. The letter from the Department stated, Due to your entrepreneurial skills and visionary leadership, The Oberoi Group has risen to a global brand, renowned for its high standards of service and excellence. In October 2005, the Hotel Investment Conference Asia Pacific (HICAP), which is the preeminent gathering of hotel investors, investment bankers and leading industry professionals in the region, honoured Mr. Oberoi with the Lifetime Achievement Award at its annual Conference in Hong Kong. This award was given in recognition of Mr. Oberois contribution to the hospitality industry and his pioneering leadership in making The Oberoi Group a global brand by taking the concept of luxury to a new paradigm. Mr. Oberoi was also conferred the Lifetime Achievement Award at the CNBC TV 18 India Business Leader Awards 2007 for building a world-class hotel chain that caters to both luxury and business travellers and for shaping the hospitality industry of the country. In January 2008, Mr. Oberoi was awarded the Padma Vibhushan, Indias second highest civilian honour, in recognition of his exceptional service to the country. Mr. Oberoi received the Lifetime Achievement Award at the South Asia Travel & Tourism Exchange (SATTE) and the 4th Hotel Investment Conference South Asia (HICSA) in April 2008. In August 2008, Mr. Oberoi was presented with the Lifetime Achievement Award at the Business world-NID (National School of Design) Design Brilliance Awards. These awards honour new levels of excellence in design.

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VIKRAMJIT SINGH OBEROI

JOINT MANAGING DIRECTOR, The Oberoi Group

CURRENT DESIGNATION: Joint Managing Director (Operations), EIH Limited EDUCATION: Economics degree from Pepperdine University in California CAREER TRACK: Worked in various capacities in the company from 1991 to 1997, after which he took over as General Manager, Oberoi Rajvilas. In June 2007, Oberoi, Deputy Managing Director, was promoted as Joint Managing Director. LEADERSHIP STYLE: Demands perfection, leads by example, extremely approachable, works with the team to reach goals and cares for people. FAVOURITE QUOTE:We should not look for the next big thing but make the small things bigger and better GOAL IN LIFE: To expand the luxury brand worldwide

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ARJUN SINGH OBEROI

JOINT MANAGING DIRECTOR, The Oberoi Group

CURRENT DESIGNATIONThe Chief Planning Officer and Joint Managing Director of the Company.

EDUCATION:He holds a Bachelor's degree in Science (Economics) from the University of Buckingham, United Kingdom.

CAREER TRACK He has an experience of more than 22 years in the hospitality industry. He became a Whole Time Director and was designated as the Deputy Managing Director of the Company in July 2004. In July 2007, he was re-designated as a Joint Managing Director of the Company. On 29 November, 2010, he was re-designated as Chief Planning Officer and Joint Managing Director of the Company.

LEADERSHIP STYLE:Demands perfection, leads by example, extremely approachable, works with the team to reach goals and cares for people.

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Current Location of Oberoi Hotels & Resorts: India Indonesia Mauritius Egypt Saudi Arabia Dubai

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Two Strong and Distinct Brands:

EIH Ltd. Operates with the following brand names-

Two Strong and Distinct Brands

The Oberoi (Business & Resorts Hotels)

The Trident

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The Oberoi Hotels & Resorts:

India - Oberoi Hotels & Resorts:

The Oberoi, New Delhi The Oberoi, Mumbai The Oberoi, Bangalore The Oberoi Grand, Kolkata The Oberoi, Gurgaon The Oberoi Cecil, Shimla Wildflower Hall, Shimla in the Himalayas The Oberoi Rajvilas, Jaipur The Oberoi Udaivilas, Udaipur The Oberoi Amarvilas, Agra The Oberoi Vanyavilas, Ranthambhore The Oberoi, Motor Vessel Vrinda, Backwater Cruiser, Kerala Clarkes Hotel, Shimla, India Maidens Hotel, Delhi, India

Indonesia - Oberoi Hotels & Resorts:

The Oberoi, Bali The Oberoi, Lombok

Mauritius - Oberoi Hotels & Resorts:

The Oberoi, Mauritius

Egypt - Oberoi Hotels & Resorts:

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Mena House Oberoi, Cairo The Oberoi, Sahl Hasheesh, Red Sea The Oberoi Zahra, Luxury Nile Cruiser

Saudi Arabia - Oberoi Hotels & Resorts:

The Oberoi, Madina

Dubai - Oberoi Hotels & Resorts:

The Oberoi, Dubai

The Oberoi Group Mission

Our Guests We are committed to meeting and exceeding the expectations of our guests through our unremitting dedication to every aspect of service. Our People We are committed to the growth, development and welfare of our people upon whom we rely to make this happen. Our Distinctiveness Together, we shall continue the Oberoi tradition of pioneering in the hospitality industry, striving for unsurpassed excellence in high-potential locations all the way from the Middle East to Asia-Pacific. Our Shareholders As a result, we will create extraordinary value for our stakeholders.

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The Oberoi Group Vision

We see an organization which aims at leadership in the hospitality industry by understanding its guests, and designing and delivering products and services which enable it to exceed their expectations. We will always demonstrate care for our customers through anticipation of their needs, attention to detail, distinctive excellence, warmth and concern. We see a lean, responsive organization where decision making is encouraged at each level and which accepts change. An organization that is committed and responsive to its guests and other stakeholders. We see a multi-skilled workforce, which consists of team players who have pride of ownership in translating the organizations vision into reality. We see an organization where people are nurtured through continues learning and skill improvement, and are respected, heard and encouraged to do their best. Oberoi is recognized as best practice for training and developing its people. We see a more multinational workforce which has been exposed to different cultures, problems and situations and can use its experiences to enrich the local employees whether in India or overseas. We see the world dotted with hotels of The Oberoi Group, in strategic commercial and resort locations. We see user-friendly technology enhancing value for our customers and helping our personnel by making information more accessible. We see an organization which is conscious of its role in the community, supporting social needs and ensuring employment from within the local community. We see an organization which is committed to the environment, using natural products and recycling items, thus ensuring proper use of the diminishing natural resources.

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The Oberoi Group Dharma

We, as members of The Oberoi Group are committed to display through our behaviour and actions the following conduct, which applies to all aspects of our business: Conduct which is of the highest ethical standards - intellectual, financial and moral and reflects the highest levels of courtesy and consideration for others. Conduct which builds and maintains teamwork, with mutual trust as the basis of all working relationships. Conduct which puts the customer first, the Company second and the self last. Conduct, which exemplifies care for the customer through anticipation of need, attention to detail, excellence, aesthetics and style and respect for privacy, along with warmth and concern. Conduct which demonstrates a two-way communication, accepting constructive debate and dissent whilst acting fearlessly with conviction. Conduct which demonstrates that people are our key asset, through respect for every employee, and leading from the front regarding performance achievements as well as individual development. Conduct which at all times safeguards the safety, security, health and environment of our customers, employees and the assets of the Company. Conduct which eschews the short-term quick fix for the long-term establishment of a healthy precedent.

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The Oberoi Group The Five Golden Rules

Remember, each rule is worth Rs. 20 crores

Golden Rule 1 We only smoke in designated areas. Golden Rule 2 We do not drink on or before duty. Golden Rule 3 We are always honest. Golden Rule 4 We respect each other. Golden Rule 5 We do not let our team down by being absent without permission.

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Wildflower Hall, Shimla in the Himalayas - An Overview

Situated at 8,250 feet in the magnificent Himalayas, Wildflower Hall is a fairytale luxury resort set in 22 acres of virgin woods of pine and cedar. The former residence of Lord Kitchener, rebuilt to a new magnificence, Wildflower Hall recreates the grand style of the colonial era. Wood panelling and original artwork create an aura of old world charm. Teak wood floors, hand knotted rugs and rich furnishings complemented by spectacular views make the rooms very special retreats. For centuries, the Himalayas have inspired awe and awakened spirituality in the souls of all mortals who encounter their greatness. This fairytale resort offers a tranquil sanctuary in the mountains. The Oberoi spa at the resort offers holistic treatments based on Ayurveda, Oriental and Western traditions in private spa suites or pavilions that are ensconced in a dense cedar forest and offer spectacular vistas of the majestic snow peaks. Enjoy beautiful views of mountains and valleys from the restaurants, outdoor Jacuzzi and the heated swimming pool. Take leisurely walks on the trails winding through the fragrant pine forests and enjoy Gourmet picnic hampers that accompany your explorations. For the adventurous the resort offers white river rafting, trekking, mountain biking, horse riding, archery, billiards, ice skating (in winter) and golf.

Technical Fact Sheet

Location: Postal Address: Telephone: Facsimile: E-mail: Website:

Shimla in the Himalayas, Himachal Pradesh, India. Charabra, Shimla 171012, Himachal Pradesh, India. +91-177-2648585 +91-177-2648686 reservations@wildflowerhall.com www.oberoihotels.com

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The Wildflower Hall History:

Going back in time, this fascinating resort is wrapped in the history of Shimla for more than a hundred years. It was for many years the property of Mr. G H M Batten, C S who officiated as the one time Private Secretary of the Earl Lytton. It was also the favourite retreat of Lord Ripon. Later, it also served as a charming country villa of Lord and lady Dufferin. However, it is best remembered as the former residence of Lord Kitchener of Khartoum, the Commander in chief of the British Army, who secured the lease for the house almost as soon as he arrived in Shimla. Immediately after he left India, the Goldstein family sold Wildflower Hall to Mrs. Hotz who converted it into a hotel. The place became a popular residence for visitor and weekend resort for the Shimla public. Before the formation of the Himachal Pradesh Tourism Development Corporation in 1972, the Wildflower Hall was being run as a hotel by the Department of Tourism. In 1972, the property, along with several others, was transferred to the HPTDC. Unfortunately the building was gutted in a devastating fire in the year 1993. The Oberoi group took over and began construction the year 1995 and a majestic new building was erected among the sylvan surrounding and sweet smelling cedars. The hotel is a perfect base from which to explore the fascinating Himalayas. Outdoor activities include trekking, river rafting, mountain biking, picnics, nature walks and horse-riding. The building occupies only five percent of the twenty-two acres of property, allowing guests ample space for privacy and tranquillity. .

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Hotel Profile:
Location:
Location at an altitude of 2500 meters (8250 feet) above mean sea level, Wildflower Hall is a picturesque forty-five minutes drive through forested hills from Shimla. From its vantage point on top of a knoll, the hotel looks out onto a magnificent vista of rugged mountains, snow-clad peaks, verdant meadows and cedar forest.

Structure:
A handsome at six-storey structure, the newly constructed hotel has remained true to the spirit of the original bungalow in its external aspect. Borrowing from the traditional methods of local construction using Dhajji or lath and plaster, the exterior of the lower floors is clad in state, while the upper floors are relieved by a tracery of balconies and railings. A pitched roof, typical of hill houses of the period, surmounts the building.

Architecture and Interiors:

Built to the most exacting international standards, Wildflower Hall combines the charm and beauty of the local area with modern comforts. Burmese Teak paneling and polished parquet floors spread with oriental rugs imbue the interiors with an atmosphere of luxury and old world charm. Arched picture windows of the spacious lobby lounge offer splendid views, bringing in the beauty of the outdoors and flooding the public areas and restaurants with natural light.

The Card Room and Library:

For a round of fun or relaxation with family and friends, the Card Room is warm and inviting with baize covered tables and individualized muted lighting. The library here located conveniently next to a cozy fireplace offers an extensive array of books.

The Billiards Room:

A classic Billiards Room located at the lobby level with upholstered high benches, exquisite lighting fixtures and a warm fireplace recall the days of Kitchener.

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 Restaurant:

Lutyens The Specialty Restaurant

A fine specialty restaurant that is popular for dinner and special occasions. It reflects an old world charm reminiscent of the Raj with elegant woodwork, arched windows and a cozy fireplace. Lutyens opens in the high season for dinner only.

The Restaurant &The Conservatory

An all day dining restaurant with a selection of Continental and Coffee Shop specialties. The Restaurant opens onto a large terrace with an enchanting Conservatory that overlooks the magnificent mountain ranges and valleys.

Food Types:Indian - Continental - South Indian - Chinese. Bar- the Cavalry Bar:
The intimate bar with its welcoming log fire, classic upholstery and artifacts relating to the British Cavalry regiments offers gorgeous views as well as a choice selection of wines, spirits and cigars.

Hotel Facilities:

Swimming Pool Playground Indoor Games Fitness Centre Children Activities Basketball Shopping Arcade Money Exchange Coffee Shop Beauty Saloon

Safe Packages Health Centre Credit Cards Business Centre Travel Desk Restaurants and Bars Doctor On Call Child Care Centre Baby Sitting

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Accommodation:
Total salable keys Premiere room Deluxe Suite : : : 85 81 03

Lord Kitcheners Suite

1. (Two bed rooms) : 01

Spa Suites:
2. (302 & 303) Total Guest floors Average size of guest room: : : 450 sq. /ft. 02 04

Room Facilities:

Attach Bath With Hot Cold Water LCD DVD Player Thermostat Electronic safes Internet access in guest rooms Hair dryer Inter connecting rooms

Direct Dialing Telephone Central air conditioning Minibar Tea / Coffee making facility Working Desk Non smoking rooms

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AWARDS
Rated as Indias leading spa resort. Rated 2nd amongst the best leisure hotels in Asia and the Indian Subcontinent. Rated 34th amongst the worlds top 100. World Travel Awards 2010. Cond Nast Traveller, UK, Readers Travel Awards 2010. Cond Nast Traveller, UK, Readers Travel Awards 2010. Cond Nast Traveller, UK, Readers Spa Awards 2010. Cond Nast Traveller, UK, Readers Spa Awards 2010. World Travel Awards 2009. Readers Choice Awards 2009. Dream Destinations 100 of the Worlds Best Vacations. R Cond Nast Traveler, USA, Readers Choice Awards 2009. Cond Nast Traveler, USA, Gold List 2009. Cond Nast Traveller, UK, Readers Spa Awards 2009.

Rated 2nd amongst the favourite overseas hotel spas in Asia and the Indian Subcontinent. Rated 6th amongst the favourite spas in the world.

Rated the leading spa resort in Asia. Rated 3rd amongst the favourite resort/hotel spas in Asian Subcontinent Spa, USA. Rated as the top romantic destination in the world Life magazines book. Rated 4th amongst the top 25 resorts in Asia.

Rated amongst the best hotels in the world for location and rooms. Rated 7th amongst the best spas in Asia and the Indian Subcontinent.

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Organizational Structure of Oberoi Group:

CEO

MD

PRESIDENT

General Manager

Executive Assistant Manager

All Departments Head

Supervisors

Assistants

Permanent Employees

Fixed Term Contractor (FTC Employees)

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Organizational Hierarchy Structure:

Accounts & General Executive

Supervisor

Assistant

Supervisor

Assistant

Supervisor Front Office Executive Supervisor

Assistant

Assistant

Supervisor House Keeping Executive Supervisor

Assistant

Assistant

Food & Beverage Executive General Manager Executive Assistent Manager Spa Executive

Supervisor

Assistant

Supervisor

Assistant

Supervisor

Assistant

Supervisor

Assistant

Executive Chef Kitchen Executive

Chef De Partie

Commis

Chef De Partie

Commis

Supervisor Activiities Executive Supervisor

Assistant

Assistant

Supervisor Engineering Executive Supervisor

Assistant

Assistant

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Board of Directors:
Chairman & Chief Executive:P.R.S. Oberoi Vice Chairman & Managing Director: S.S. Mukherji Joint Managing Director (Operations):Vikram Singh Oberoi Joint Managing Director (Development):Arjun Singh Oberoi Independent Directors:S.K. Dasgupta, Anil Nehru, Rajan Raheja,Lakshminarayan Ganesh&Mrs. Renu Sud Karnad.

General Manager: Mr. Abhishek Sharma

All Departmental Heads:

HR: Mr. Pratap Sharma Finance: Mr. Anuj Jain IT: Mr. Sunil Yadav Front Office: Mr. Yaduraj Singh House Keeping: Mrs. Priyanka Rana Food & Beverage: Mr. Ashish Nehra Spa: Kitchen: Chef Mohan Gyani Engineering: Mr. Ravi Mohan Jain

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Departments Overview:

Housekeeping & Laundry

Acconts & General

Kitchen & Kitchen Stewarding

Departments

Front Office

Food & Beverage

Spa

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1. Housekeeping:
The objective of Housekeeping in a Hotel is to provide a clean, hygienic and well maintained environment for guests. A great Housekeeper must have a keen eye for detail. Housekeeping teams today, have extensive guest contact and through these interactions look for opportunities to preempt guest needs and provide superior service.

Laundry:
The principle objective is to provide clean and hygienic linen and garments to guests and uniforms to employees. This is achieved by using state-of-art equipment with a focus on high quality and service excellence.

2. Kitchen:
The kitchen team takes pride in cooking a variety of different cuisines to enhance the culinary experience of our guests. The chefs are creative and are constantly training each other to improve skills in different cuisines and sections of the kitchen. The kitchen team ensures that the food served at the hotel is of superior quality and taste. We place great emphasis on using the best ingredients from around the world and India, cooked to perfection to give our guests memorable dining experiences. Our kitchen teams take pride in going the extra mile in meeting special guest requests.

Kitchen stewarding department:

The kitchen stewarding team supports the food and beverage department by ensuring the highest standards in hygiene and sanitation of the food service areas. Kitchen stewards are a critical part of the food and beverage operation, they maintain the quality and quantity of expensive serve ware and utensils.

3. Food & beverage department:

The objective of the department is to provide exceptional food and beverage service at Restaurants, Bars, and Poolside, in Rooms and at Banquet facilities of the hotel. The Food & Beverage teams take pride in making all guest visits memorable by ensuring that guest needs are met and the experience is enhanced by personalized service and care.

4. Front office:
The objective of Front Office is to provide impeccable and consistent service to all guests that visit the hotel through reservations, concierge, telephone operations, cashiering, bell desk

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and business centre. The Front Office department strives to offer efficient and personalized guest service in a warm and courteous manner with the aim of delivering an unforgettable experience.

5. Tijori: Tijori at our hotels store the finest jewellery, arts and crafts of the country. Knowledge of the service professional, able to give an insight into the culture and craftsmanship. The objective at The Oberoi Boutique is to provide quick and efficient service to guests in the most friendly and courteous manner with the aim of delivering an unforgettable shopping experience to the guests.

6. Spa:
The Oberoi Spa provides quality world class spa experience for our guests and associates; a place where beauty, comfort, knowledge and personalized attention to create a totally memorable and rejuvenating experience. Our goal entails building enduring and rewarding relationships with our guests through knowledge, wellness and superior service.

7. Accounts & General:

Human Resources Finance Systems

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Review of literature
Walker (1964) made a pioneering effort to develop a theory of working capital. Walker studied the effect of the change in the working capital on the rate of return in nine industries. He found the relationship between level of working capital and the rate of return to be negative. National council of applied economic research (1966) made a study with reference to working capital management in three industries namely cement, Fertilizer and Sugar. This was the first study on nature and norms of working capital management in countries with scarcity of investible resource. National council of applied economic research (1966) made a study with reference to working capital management in three industries namely cement, Fertilizer and Sugar. This was the first study on nature and norms of working capital management in countries with scarcity of investible resource. Vanhorne (1969) recognize working capital management as an area largely lacking in theoretical perspective, attempted to develop a frame work in term of probabilistic cash budget for evaluating decision concerning working capital. Cohan and Pringle (1973) illustrated extension of capital assets pricing model working capital management decision. They tried interrelating long term investment and financial decision as working capital management decision through CAPM. Agarwa(1983) also studied working capital management on the basis of sample of 34 large manufacturing and trading public limited companies in ten industries. Applying the same technique of ratio analysis, response to questionnaire and interview , the study include the although the working capital per rupee of sale showed a decline trend over the year but still there appeared a sufficient scope for reduction Pass C.L., Pike R.H1 (1984), studied that over the past 40 years major theoreticaldevelopments have occurred in the areas of longer-term investment and financialdecision making. Many of these new concepts and the related techniques are now beingemployed successfully in industrial practice. By contrast, far less attention has beenpaid to the area of short-term finance, in particular that of working capital management.Such neglect might be acceptable were working capital considerations of relatively littleimportance to the firm, but effective working capital management has a crucial role toplay in enhancing the profitability and growth of the firm. Indeed, experience showsthat inadequate planning and control of working capital is one of the more commoncauses of business failure Herzfeld B2 (1990), studied that Cash is king--so say the money managers who sharethe responsibility of running this countrys businesses. And with banks demanding morefrom their prospective borrowers, greater emphasis has been placed on thoseaccountable for so-called working capital management. Working capital managementrefers to the management of current or short-term assets and short-term liabilities. Inessence, the purpose of that function

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is to make certain that the company has enoughassets to operate its business. Here are things you should know about working capitalmanagemen Maynard 1996), Argued that attempts to improve working capital bydelaying payment to creditors E. Refuse11 (is counter-productive to individuals and to the economyas a whole. Claims that altering debtor and creditor levels for individual tiers within avalue system will rarely produce any net benefit. Proposes that stock reductiongenerates system-wide financial improvements and other important benefits. Urgesthose organizations seeking concentrated working capital reduction strategies to focuson stock management strategies based on lean supply-chain techniques.Thomas M. Krueger12 (2005), studied distinct levels of WCM measures for differentindustries, which tend to be stable over time. Many factors help to explain thisdiscovery. The improving economy during the period of the study may have resulted inimproved turnover in some industries, while slowing turnover may have been a signalof troubles ahead. Appuhami, Ranjith B4 (2008), studied impact of firms capital expenditure on theirworking capital management. The author used the data collected from listed companiesin the Thailand Stock Exchange. The study used Schulman and Coxs (1985) NetLiquidity Balance and Working Capital Requirement as a proxy for working capitalmeasurement and developed multiple regression models. The empirical research foundthat firms capital expenditure has a significant impact on working capital management.The study also found that the firms operating cash flow, which was recognized as acontrol variable, has a significant relationship with working capital managemen , Nancy; Zhang, Yilei (2008), Benedastudied impact of working capital managementon the operating performance and growth of new public companies. The study alsosheds light on the relationship of working capital with debt level, firm risk, andindustry. Using a sample of initial public offerings (IPOs), the study finds a significantpositive association between higher levels of accounts receivable and operatingperformance. The study further finds that maintaining control (i.e. lower amounts) overlevels of cash and securities, inventory, fixed assets, and accounts Hardcastle J (2009)., studied that Working capital, sometimes called gross workingcapital, simply refers to the firms total current assets (the short-term ones), cash,marketable securities, accounts receivable, and inventory. While long-term financialanalysis primarily concerns strategic planning, working capital management deals withday-to-day operations. By making sure that production lines do not stop due to lack ofraw materials, that inventories do not build up because production continues unchangedwhen sales dip, that customers pay on time and that enough cash is on hand to makepayments when they are due. Obviously without good working capital management, nofirm can be efficient and profitable

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Need For The Study

As we know working capital is the life blood and the centre of a business. Adequate amount of working capital is very much essential for the smooth running of the business. And the most important part is the efficient management of working capital in right time. The liquidity position of the firm is totally effected by the management of working capital. So, a study of changes in the uses and sources of working capital is necessary to evaluate the efficiency with which the working capital is employed in a business. This involves the need of working capital analysis. Working capital management ensure that weather firm is able to continue its operation or not and weather firm has sufficient cash or not for maturing short term debt and upcoming operational expenses. In other hand finance is again essential to run operations. So Working capital management and finance both are very essential for smooth functioning of a firm.

Objective of the Study:

1. To study the best management over working capital for making it positive (current assets>current liabilities) 2. To study the various factor effecting working capital. 3. To study the various function of finance department.

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Role of Finance Department:

Support to allied departments Funds management. Proper accounting of all revenues and expenditure Prevent leakage of revenue Cost control Budgets Statutory compliances Licenses Financial statements Balance Sheet P&L Inventory control Investments Asset control and Management Key controls Banking Custodian of cash Audit Internal / Statutory

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Functions of Finance Department:

Purchase

Receiving

Store

Accounts Payable FUNCTIONS OF FINANCE DEPARTMENT

General Cash

Income Audit

General Ledger

Accounts Reveivable

Food & Beverage

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Purchase:
1. Ordering of regular items as per advice from stores. 2. Float enquires for new items and invites quotations and desirable suppliers are selected. 3. Negotiation with vendors for better rates. 4. Feedback to various departments on status of their purchases. 5. Correspondence with the suppliers in case for wrong or defective items received.

Receiving:
1. Receiving, unloading and unpacking the material delivered by the suppliers under the delivery challans or bills. 2. Check physical condition and quantity of materials received by comparing it with bills or challan. 3. Checking quality of materials received. People of the concerned departments whose goods have been received are called to check the quality of the materials. They have to ensure that the quality is according to the purchase order. 4. Proper storage of goods at their allotted place. 5. Prepare Daily Receiving Report. 6. Handover of DRR and supporting documents to Accounts Payable.

Store:
1. Ordering of materials as per requirements. 2. Check on spoilage. 3. Issue of stores to different departments. i. Main Kitchen ii. Kims (Cafeteria) iii. Front Office iv. House Keeping v. Spa vi. F & B Service vii. Finance viii. HR 4. Conformation of items received

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General Cash:
1. Collection of cash from Front Office on daily basis. 2. Reconciliation of physical collection of cash with total collection of the day. 3. Cash disbursement to employees. 4. Depositing cash and cheques into the bank. 5. Proper book keeping of foreign exchange collection. 6. Reconciliation of physical cash in hand. 7. To keep track and follow up for IOUs. 8. Maintenance of cash book.

Accounts Receivable:
1. The AR personnel is responsible for timely collections from the Debtors. Debtors can of the following types: a) Travel agents: There are certain travel agents who are on the credit list of a company i.e. credit can be extended only to them so bills are forwarded to them which are to be cleared within 30 days. Some travel agents who do not feature on the credit list of the company have to deposit the money in advance against which the reservation for any guest is guaranteed. b) Customers: c) Credit card companies d) Internal customers Brief description of 2. Data transfer from Opera to the AR module in OASIS 3. The respective debtor id is assigned 4. Then the transfer is taken following which the data travels to the concerned debtor id.

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Food & Beverage:

1. Keeping control over food cost by controlling following things: i. Control over pilferage. ii. Control over wastage & optimum utilization of material issued from store. iii. Ensuring by kitchen that no food pick-up without KOT. iv. Keeping an eye on open & void cheques. v. Calculating & mailing daily food cost report to Chef & GM. 2. Keeping control over beverage cost by following things: i. Regular Bar & butler inventory. ii. Calculating beverage cost on daily basis iii. Control over pilferage. iv. Control over spoilage. 3. Other functions: v. Opera reconciliation with micros vi. Menu check with micros vii. Beverage stock & consumption report to corporate fortnightly. viii. EDM &A& G checks en reconciliation with micros. ix. Filling of daily excise register. x. Ensuring proper recipes costing. xi. Keeping a check over receiving & issue of food & beverage items.

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Introduction to working capital management:

Capital required for a business can be classified under two main categories via, 1) 2)

Fixed Capital Working Capital

Every business needs funds for two purposes for its establishment and to carry out its day- to-day operations. Long terms funds are required to create production facilities through purchase of fixed assets such as p&m, land, building, furniture, etc. Investments in these assets represent that part of firms capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purposes for the purchase of raw material, payment of wages and other day to- day expenses etc. These funds are known as working capital. In simple words, working capital refers to that part of the firms capital which is required for financing short- term or current assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in current assts keep revolving fast and are being constantly converted in to cash and this cash flows out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital or short term capital CONCEPT OF WORKING CAPITAL There are two concepts of working capital: 1. 2.

Gross working capital Net working capital

The gross working capital is the capital invested in the total current assets of the enterprises current assets are those Assets which can convert in to cash within a short period normally one accounting year.

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CONSTITUENTS OF CURRENT ASSETS 1) 2) 3) 4) 5)

Cash in hand and cash at bank Bills receivables Sundry debtors Short term loans and advances. Inventories of stock as:
a. b. c. d.

Raw material Work in process Stores and spares Finished goods

6. Temporary investment of surplus funds. 7. Prepaid expenses 8. Accrued incomes. 9. Marketable securities.

In a narrow sense, the term working capital refers to the net working. Net working capital is the excess of current assets over current liability, or, say: NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES.

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Net working capital can be positive or negative. When the current assets exceeds the current liabilities are more than the current assets. Current liabilities are those liabilities, which are intended to be paid in the ordinary course of business within a short period of normally one accounting year out of the current assts or the income business. CONSTITUENTS OF CURRENT LIABILITIES 1. 2. 3. 4. 5. 6. 7.

Accrued or outstanding expenses. Short term loans, advances and deposits. Dividends payable. Bank overdraft. Provision for taxation , if it does not amt. to app. Of profit. Bills payable. Sundry creditors.

MANAGEMENT OF WORKING CAPITAL Management of working capital is concerned with the problem that arises in attempting to manage the current assets, current liabilities. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, i.e. it is neither adequate nor excessive as both the situations are bad for any firm. There should be no shortage of funds and also no working capital should be ideal. WORKING CAPITAL MANAGEMENT POLICES of a firm has a great on its probability, liquidity and structural health of the organization. So working capital management is three dimensional in nature as

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1.

It concerned with the formulation of policies with regard to profitability, liquidity and risk.

2.

It is concerned with the decision about the composition and level of current assets.

CAPITAL ANALYSIS WORKING As we know working capital is the life blood and the centre of a business. Adequate amount of working capital is very much essential for the smooth running of the business. And the most important part is the efficient management of working capital in right time. The liquidity position of the firm is totally effected by the management of working capital. So, a study of changes in the uses and sources of working capital is necessary to evaluate the efficiency with which the working capital is employed in a business. This involves the need of working capital analysis

RESEARCH METHODOLOGY
The methodology, I have adopted for my study is the ratio analysis, which basically analyze critically financial position of to the organization. These are the following ratio which I have studied:

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1.

RATIO ANALYSIS A ratio is a simple arithmetical expression one number to another. The technique of ratio analysis can be employed for measuring short-term liquidity or working capital position of a firm. The following ratios can be calculated for these purposes: 1. Current ratio. 2. Quick ratio 3. Absolute liquid ratio 4. Inventory turnover. 5. Receivables turnover. 6. Payable turnover ratio. 7. Working capital turnover ratio.

1. CURRENT RATIO Current Ratio, also known as working capital ratio is a measure of general liquidity and its most widely used to make the analysis of short-term financial position or liquidity of a firm. It is defined as the relation between current assets and current liabilities. Thus, CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITES The two components of this ratio are:

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1) 2)

CURRENT ASSETS CURRENT LIABILITES

Current assets include cash, marketable securities, bill receivables, sundry debtors, inventories and work-in-progresses. Current liabilities include outstanding expenses, bill payable, dividend payable etc. A relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current obligations in time. On the hand a low current ratio represents that the liquidity position of the firm is not good and the firm shall not be able to pay its current liabilities in time. A ratio equal or near to the rule of thumb of 2:1 i.e. current assets double the current liabilities is considered to be satisfactory

CALCULATION OF CURRENT RATIO (Rupees in crore)

Year Current Assets Current Liabilities Current Ratio

2010 81.29 27.42 2.96:1

2011 83.12 20.58 4.03:1

2012 13,6.57 33.48 4.08:1

Interpretation:As we know that ideal current ratio for any firm is 2:1. If we see the current ratio of the company for last three years it has increased from 2010 to 2012. The current ratio of company is more than the ideal ratio. This depicts that companys liquidity position is sound. Its current assets are more than its current liabilities.

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2. QUICK RATIO Quick ratio is a more rigorous test of liquidity than current ratio. Quick ratio may be defined as the relationship between quick/liquid assets and current or liquid liabilities. An asset is said to be liquid if it can be converted into cash with a short period without loss of value. It measures the firms capacity to pay off current obligations immediately. QUICK RATIO = QUICK ASSETS CURRENT LIABILITES Where Quick Assets are: 1) 2) 3)

Marketable Securities Cash in hand and Cash at bank. Debtors.

A high ratio is an indication that the firm is liquid and has the ability to meet its current liabilities in time and on the other hand a low quick ratio represents that the firms liquidity position is not good. As a rule of thumb ratio of 1:1 is considered satisfactory. It is generally thought that if quick assets are equal to the current liabilities then the concern may be able to meet its short-term obligations. However, a firm having high quick ratio may not have a satisfactory liquidity position if it has slow paying debtors. On the other hand, a firm having a low liquidity position if it has fast moving inventories.

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CALCULATION OF QUICK RATIO (Rupees in Crore)

Year Quick Assets Current Liabilities Quick Ratio Interpretation:

2010 44.14 27.42 1.6 : 1

2011 47.43 20.58 2.3 : 1

2012 61.55 33.48 1.8 : 1

A quick ratio is an indication that the firm is liquid and has the ability to meet its current liabilities in time. The ideal quick ratio is 1:1. Companys quick ratio is more than ideal ratio. This shows company has no liquidity problem. 3. ABSOLUTE LIQUID RATIO Although receivables, debtors and bills receivable are generally more liquid than inventories, yet there may be doubts regarding their realization into cash immediately or in time. So absolute liquid ratio should be calculated together with current ratio and acid test ratio so as to exclude even receivables from the current assets and find out the absolute liquid assets. Absolute Liquid Assets includes : ABSOLUTE LIQUID RATIO = ABSOLUTE LIQUID ASSETS CURRENT LIABILITES ABSOLUTE LIQUID ASSETS = CASH & BANK BALANCES. (Rupees in Crore)

Year Absolute Liquid Assets Current Liabilities Absolute Liquid Ratio

2010 4.69 27.42 .17 : 1

2011 1.79 20.58 .09 : 1

2012 5.06 33.48 .15 : 1

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Interpretation : These ratio shows that company carries a small amount of cash. But there is nothing to be worried about the lack of cash because company has reserve, borrowing power & long term investment. In India, firms have credit limits sanctioned from banks and can easily draw cash.

B) CURRENT ASSETS MOVEMENT RATIOS Funds are invested in various assets in business to make sales and earn profits. The efficiency with which assets are managed directly affects the volume of sales. The better the management of assets, large is the amount of sales and profits. Current assets movement ratios measure the efficiency with which a firm manages its resources. These ratios are called turnover ratios because they indicate the speed with which assets are converted or turned over into sales. Depending upon the purpose, a number of turnover ratios can be calculated. These are : 1. 2. 3.

Inventory Turnover Ratio Debtors Turnover Ratio Working Capital Turnover Ratio

The current ratio and quick ratio give misleading results if current assets include high amount of debtors due to slow credit collections and moreover if the assets include high amount of slow moving inventories. As both the ratios ignore the movement of current assets, it is important to calculate the turnover ratio.

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1.

INVENTORY TURNOVER OR STOCK TURNOVER RATIO :

Every firm has to maintain a certain amount of inventory of finished goods so as to meet the requirements of the business. But the level of inventory should neither be too high nor too low. Because it is harmful to hold more inventory as some amount of capital is blocked in it and some cost is involved in it. It will therefore be advisable to dispose the inventory as soon as possible.

TURNOVER RATIO =

COST OF GOOD SOLD AVERAGE INVENTORY

Inventory turnover ratio measures the speed with which the stock is converted into sales. Usually a high inventory ratio indicates an efficient management of inventory because more frequently the stocks are sold ; the lesser amount of money is required to finance the inventory. Where as low inventory turnover ratio indicates the inefficient management of inventory. A low inventory turnover implies over investment in inventories, dull business, poor quality of goods, stock accumulations and slow moving goods and low profits as compared to total investment.

AVERAGE STOCK = OPENING STOCK + CLOSING STOCK 2

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(Rupees in Crore)

Year Cost of Goods issued Average Stock Inventory Turnover Ratio

2010 110.6 73.59 1.5 times

2011 103.2 36.42 2.8 times

2012 96.8 55.35 1.75 times

Interpretation: These ratio shows how rapidly the inventory is turning into receivable through sales. In 2010 the company has high inventory turnover ratio but in 2012 it has reduced to 1.75 times. This shows that the companys inventory management technique is less efficient as compare to last year.

3.

DEBTORS TURNOVER RATIO :

A concern may sell its goods on cash as well as on credit to increase its sales and a liberal credit policy may result in tying up substantial funds of a firm in the form of trade debtors. Trade debtors are expected to be converted into cash within a short period and are included in current assets. So liquidity position of a concern also depends upon the quality of trade debtors. Two types of ratio can be calculated to evaluate the quality of debtors.

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TURNOVER RATIO =

TOTAL SALES (CREDIT) AVERAGE DEBTORS

Debtors velocity indicates the number of times the debtors are turned over during a year. Generally higher the value of debtors turnover ratio the more efficient is the management of debtors/sales or more liquid are the debtors. Whereas a low debtors turnover ratio indicates poor management of debtors/sales and less liquid debtors. This ratio should be compared with ratios of other hotel and a trend may be found to make a better interpretation of the ratio.

AVERAGE DEBTORS= OPENING DEBTOR+CLOSING DEBTOR 2 Year Sales Average Debtors Debtor Turnover Ratio 2010 166.0 17.33 9.6 times 2011 151.5 18.19 8.3 times 2012 169.5 22.50 7.5 times

Interpretation: This ratio indicates the speed with which debtors are being converted or turnover into sales. The higher the values or turnover into sales. The higher the values of debtors turnover, the more efficient is the management of credit. But in the company the debtor turnover ratio is decreasing year to year. This shows that company is not utilizing its debtors efficiency. Now their credit policy become liberal as compare to previous year.

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5.

WORKING CAPITAL TURNOVER RATIO : Working capital turnover ratio indicates the velocity of utilization of net working capital. This ratio indicates the number of times the working capital is turned over in the course of the year. This ratio measures the efficiency with which the working capital is used by the firm. A higher ratio indicates efficient utilization of working capital and a low ratio indicates otherwise. But a very high working capital turnover is not a good situation for any firm. Working Capital Turnover Ratio = Cost of Sales Net Working Capital

Working Capital Turnover

Sales Networking Capital

Year Sales Networking Capital Working Capital Turnover

2010 166.0 53.87 3.08

2011 151.5 62.52 2.4

2012 169.5 103.09 1.64

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Interpretation: This ratio indicates low much net working capital requires for sales. In 2010, the reciprocal of this ratio (1/1.64 = .609) shows that for sales of Rs. 1 the company requires 60 paisa as working capital. Thus this ratio is helpful to forecast the working capital requirement on the basis of sale.

INVENTORIES (Rs. in Crores) Year Inventories 2009-2010 37.15 2010-2011 35.69 2011-2012 75.01

Interpretation: Inventories are a major part of current assets. If any company wants to manage its working capital efficiency, it has to manage its inventories efficiently. The graph shows that inventory in 2009-2010 is 45%, in 2010-2011 is 43% and in 2011-2012 is 54% of their current assets. The wild flower hall should try to reduce the inventory upto 10% or 20% of current assets.

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CASH BAK BALANCE: (Rs. in Crores) Year Cash Bank Balance 2009-2010 4.69 2010-2011 1.79 2011-2012 5.05

Interpretation: Cash is basic input or component of working capital. Cash is needed to keep the business running on a continuous basis. So the organization should have sufficient cash to meet various requirements. The above graph is indicate that in 2010 the cash is 4.69 crores but in 2011 it has decrease to 1.79. In 2012, it is increased upto approx. 5.1% cash balance. So in 2010, the company has no problem for meeting its requirement as compare to 2009.

DEBTORS: (Rs. in Crores) Year Debtors Interpretation: Debtors constitute a substantial portion of total current assets. In India it constitute one third of current assets. The above graph is depict that there is increase in debtors. It represents an extension of credit to customers. The reason for increasing credit is competition and hotel liberal credit policy. 2009-2010 17.33 2010-2011 19.05 2011-2012 25.94

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CURRENT ASSETS: (Rs. in Crores) Year Current Assets Interpretation: This graph shows that there is 64% increase in current assets in 2008. This increase is arise because there is approx. 50% increase in inventories. Increase in current assets shows the liquidity soundness of hotel. 2009-2010 81.29 2010-2011 83.15 2011-2012 136.57

CURRENT LIABILITY: (Rs. in Crores) Year Current Liability 2009-2010 27.42 2010-2011 20.58 2011-2012 33.48

Interpretation: Current liabilities shows company short term debts pay to outsiders. In 2010 the current liabilities of the hotel increased. But still increase in current assets is more than its current liabilities.

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NET WOKRING CAPITAL: (Rs. in Crores) Year Net Working Capital Interpretation: Working capital is required to finance day to day operations of a firm. There should be an optimum level of working capital. It should not be too less or not too excess. In the company there is increase in working capital. The increase in working capital arises because the hotel has expanded its business. 2009-2010 53.87 2010-2011 62.53 2011-2012 103.09

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SWOT Analysis of Oberoi Hotel

Strengths:

Weaknesses:

Cost advantage Asset leverage Effective communication High R&D Innovation Online growth Loyal customers Market share leadership Strong management team Strong brand equity

Diseconomies to scale Over leveraged financial position Low R&D Low market share No online presence Not innovative Not diversified Poor supply chain Weak management team

Weak real estate

Opportunities:

Threats:

Acquisitions Asset leverage Financial markets (raise money through debt, etc) Emerging markets and expansion abroad Innovation Online Product and services expansion Takeovers

Competition Cheaper technology Economic slowdown External changes (government, politics, taxes, etc) Exchange rate fluctuations Lower cost competitors or imports Maturing categories, products, or services Price wars

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BIBLIOGRAPHY
Websites:
www.oberoihotels.com en.wikipedia.org www.oberoigroup.com www.wikiswot.com

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