EXECUTIVE SUMMARY

This finance project report on working capital management is based on the study of working
capital management in Autocraft Ltd. An insight view of the project will encompass what it
is all about, what it aims to achieve, what is its purpose and scope, the various methods used
for collecting data and their sources, including literature survey done, further specifying the
limitations of our study and in the last, drawing inferences from the learning so far.
The working capital management refers to the management of working capital, or precisely to
the management of current assets. A firms working capital consists of its investments
in current assets, which includes short-term assetscash and bank balance, inventories,
receivable and marketable securities.
This project tries to evaluate how the management of working capital is done in Autocraft
through inventory ratios, working capital ratios, trends, computation of cash, inventory and
working capital, and short term financing
In Perfect World, there would no necessity for current asset and liabilities because there
would be no uncertainty, no transaction cost, information search cost, scheduling cost, or
production cost and technology constraint. The unit cost of production would not vary with
the quality produced. Borrowing and lending rate shall be same. Capital, labour and product
market shall be perfectly competitive and would reflect all availability of information, thus in
such environment, there would be no advantage for investing in short term assets. However
the world we live is not perfect. It is characterized by considerable amount of uncertainty
regarding the demand, market price, quality and availability of own product and those of
suppliers. There is transaction cost for purchasing or selling good for securities.
Information is costly to obtain and is not equally distributed. There are spreads between the
borrowing and lending rates for investing and financing of equal risks. Similarly each
organization is faced with its own limits on the production capacity and technologies it can
employ there are fixed as well as variable cost associated with production goods. In other
words, circumstance introduce the problems which requires necessity of maintaining
working capital

Introduction to working capital

Working Capital is the Life-Blood and Controlling Nerve Centre of a
Business
The working capital management precisely refers to management of current assets.
A firms working capital consists of its investment in current assets, which include
Short-term assets such as:
1. Cash and bank balance,
2. Inventories,
3. Receivables (including debtors and bills),
4. Marketable securities.
5. Working capital is commonly defined as the difference between current assets and
current liabilities.
Working Capital = Current Assets-Current Liabilities
There are two major concepts of working capital:
Gross working capital
Net working capital
Gross working capital:
It refers to firm's investment in current assets. Current assets are the assets, This can be
converted into cash with in a financial year the gross working Capital points to the need of
arranging funds to finance current assets.
Net working capital:
It refers to the difference between current assets and current liabilities. Net Working capital
can be positive or negative. A positive net working capital will arise When current assets
exceed current liabilities. And vice-versa for negative net Working capital. Net working
capital is a qualitative concept. It indicates the Liquidity position of the firm and suggests the
extent to which working capital Needs may be financed by permanent sources of funds. Net
working capital also covers the question of judicious mix of long-term and short-term funds
for financing current assets.

The management of working capital is important for several reasons:

For one thing, the current assets of a typical manufacturing firm account for half of its total
assets. For a distribution company, they account for even more.
Working capital requires continuous day to day supervision. Working capital has the effect on
company's risk, return and share prices
There is an inevitable relationship between sales growth and the level of current assets. The
target sales level can be achieved only if supported by adequate working capital Inefficient
working capital management may lead to insolvency of the firm if it is not in a position to
meet its liabilities and commitments.

Working Capital Cycle

Definition:
The working capital cycle (WCC) is the amount of time it takes to turn the net current assets
and current liabilities into cash. The longer the cycle is, the longer a business is tying up
capital in its working capital without earning a return on it. Therefore, companies strive to
reduce its working capital cycle by collecting receivables quicker or sometimes stretching
accounts payable.

Explanation:
A positive working capital cycle balances incoming and outgoing payments to minimize net
working capital and maximize free cash flow. For example, a company that pays its suppliers
in 30 days but takes 60 days to collect its receivables has a working capital cycle of 30 days.
This 30 day cycle usually needs to be funded through a bank operating line, and the interest
on this financing is a carrying cost that reduces the company's profitability. Growing
businesses require cash, and being able to free up cash by shortening the working capital
cycle is the most inexpensive way to grow. Sophisticated buyers review closely a target's
working capital cycle because it provides them with an idea of the management's
effectiveness at managing their balance sheet and generating free cash flow.

Working Capital Cycle: How Healthy is Your Business?

Any business needs a working capital to fund the day-to-day operations, which include debts
and expenses, and forms a major component of the operating liquidity. Apart from the fixed
assets such as plant and machinery, equipment, land etc. the working capital also is an
integral part of the operating capital.
We can understand the concept of working capital by understanding the terms working capital
gap and short-term borrowings. Companies define current assets and current liabilities in
their balance sheets with respect to the assets and liabilities that are expected to be realized or
settled within the normal operating cycle (i.e. 12 months after the balance sheet date). This is
where the concept of working capital arises from.

Understanding Working Capital Cycle:

The working capital cycle is the time duration between paying for raw materials and goods
that were bought to manufacture products and the final receipt of cash that you earn on
selling the products. So basically, it denotes the time required by your business operations to
convert the current assets and current liabilities into cash. The shorter the working capital
cycle, the more effective is your working capital. If the working capital cycle is too long, then
your capital gets tied up in the operational cycle without earning returns. Therefore,
companies try to achieve shorter working capital cycles to increase their business efficiencies.
If you are the owner of a small business or aspire to be an entrepreneur, then you must
understand the importance of the working capital cycle and cash flow management.
The working capital cycle comprises of four parts cash, creditors, inventory and debtors.
For a successful cash-flow management, you need to have complete control on each of these
aspects of the working capital cycle. The shorter your working capital cycle, the faster you
can convert inventory into cash thereby lessening your dependency for cash on customer
payments and loans.

Whats the Optimum Level of Working Capital?

If the working capital is too high, then your business has surplus funds that are not earning
any returns, unless they are invested in short-term securities etc. If the working capital is too
low, then your business faces the threat of financial difficulties and this will not send out a
positive signal to the market. So how do you decide what is the right level of working capital
for your business? For this, you need to know more about your business environment.
Lets say you are operating a business in the software domain catering to the services
industry; then the levels of working capital required will be less than that required by a
manufacturing firm for example. The reason for this is that the inventory levels are less and
the time required to deliver the service and generate cash will also be lesser than that required
to produce and sell goods.
To find out the right amount of working capital needed, you need to look at your recent
balance sheet and take into the account the current assets and current liabilities for
calculations. Once you have found the working capital required, you also need to know
whether the safety margin is wide enough to operate efficiently. For this, you need to
calculate the working capital ratio.

Approach to Managing the Working Capital Cycle:

Decisions on working capital management are taken based on several criteria, some of which
are explained below:
1. Cash-conversion cycle Its important to measure the cash flow and one method to do
so is to find out the number of days between spending money on raw materials and
receiving cash from the customer. This helps you understand the relationship between
inventories, accounts payable and receivable, and cash. It helps you find out the
amount of cash tied up in ongoing operations, which is not available for other
activities.
2. Return on capital (ROC) This is a measure of profitability and is an indication of the
companys value to its shareholders. If the ROC of a firm is more than the cost of
capital, then its value is enhanced; it is an efficient management tool that helps
business managers in linking short-term policies with long-term decision making.
3. Credit policy A very important factor that affects the cash-conversion cycle and the
working capital management thereby, is the credit policy of a company. It specifies
whether the company buys material and sells products and services in cash or on
credit.

Automobile Industry in India

With a scintillating 2.3 million units produced in 2008 the Indian automobile industry bagged
the position of being the ninth largest in the world. Following economic liberalization, Indian
domestic automobile companies like Tata Motors Maruti Suzuki and Mahindra and Mahindra
expanded their production and export operations in and across the country and since then the
industry has only shown signs of growth. The automobile industry comprises of heavy
vehicles (trucks, buses, tempos, and tractors), passenger cars, and two-wheelers.
The Indian automobile industry seems to come a long way since the first car that was
manufactured in Mumbai in 1898. The automobile sector today is one of the key sectors of
the country contributing majorly to the economy of India. It directly and indirectly provides
employment to over 10 million people in the country. The Indian automobile industry has a
well-established name globally being the second largest two wheeler market in the world,
fourth largest commercial vehicle market in the world, and eleventh largest passenger car
market in the world and expected to become the third largest automobile market in the world
only behind USA and China.
The growth of the Indian middleclass along with the growth of the economy over the last few
years has resulted in a host of global auto giants setting their foot inside the Indian Territory.
Moreover India also provides trained manpower at competitive costs making the country a
manufacturing hub for many foreign automobile companies. India proves to be a potential
market as compared to most of the other countries which are witnessing stagnation as far as
automobile industry growth is concerned.
A recent research conducted by the global consultancy firm Deloitte says that at least one
Indian automobile company will feature among the top six automobile companies that will
dominate the car market by 2020.
The Indian automobile industry proved to be in good shape last year even after the economic
downturn. This was majorly due to the fact of renewed interest shown by global automobile
players like Nissan Motors which consider India to be a potential market.
As far as authorized dealer networks and service stations are concerned Maruti Suzuki is the
most widespread. The other automobile companies are also showing rapid progression in this
field.
Indian Automobile Export market:
India is a very favorable market for small cars be it production, sales or export. Since the
Indian automobile industry is the largest manufacturer of small cars companies like Hyundai
and Nissan Motors export about 2, 40,000 and 2, 50,000 annually. India emerged as Asia's
fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. The Indian
automobile exports registered a 22.30 percent growth in the year 2009. The growth trend was
as follows: Two Wheelers- 32.31 percent, Commercial Vehicle - 19.10 percent and Passenger
Cars grew by - 19.10 percent.

Key automobile manufactures in India:

1. MarutiUdyog
2. General Motors
3. Ford India Limited
4. Eicher Motors
5. Bajaj Auto
6. Daewoo Motors India
7. Hero Motors
8. Hindustan Motors
9. Hyundai Motors India Limited
10. Royal Enfield Motors
11. Telco
12. TVS Motors
13. DC Designs
14. Mahindra & Mahindra

Latest update: March, 2015

The automobile industry in India is expected to be the world's third largest by 2016, with the
country currently the world's second largest two-wheeler manufacturer. Two-wheeler
production is projected to rise from 16.9 million in FY14 to 28.8 million by FY21.
Furthermore, passenger vehicle production is expected to increase to 10 million in FY21 from
3.1 million in FY14.

Strong growth in demand due to rising income, growing middle class, and a young population
is likely to propel India among the world's top five auto manufacturers by 2015. Automobile
export volumes increased at a compound annual growth rate (CAGR) of 17.5 per cent during
FY05-14, out of which two-wheelers accounted for the largest share in exports at 67 per cent
in FY14.

The government aims to develop India as a global manufacturing as well as a research and
development (R&D) hub. It has set up National Automotive Testing and R&D Infrastructure
Project (NATRiP) centers as well as a National Automotive Board to act as facilitator
between the government and the industry.
Alternative fuel has the potential to provide for the country's energy demand in the auto
sector as the CNG distribution network in India is expected to rise to 250 cities in 2018. Also,
the luxury car market could register high growth and is expected to reach 150,000 units by
2020.

Market Size:
Sales of commercial vehicles in India grew 5.3 per cent to 52,481 units in January 2015 from
a year ago, according to Society of Indian Automobile Manufacturers (SIAM).
Sales of cars also grew for a third month in a row to 169,300 units in January 2015, up 3.14
per cent from the year-ago period.
Car market leader Maruti Suzuki India witnessed 8.6 per cent higher sales at approximately
118,551 units in February 2015, out of which 107,892 were sold in domestic market and
10,659 units were exported.
Hyundai Motor India Ltd (HMIL) reported a 2.4 per cent growth in total sales at 47,612 units
in February, compared with 46,505 units in the same month last year.
In the two-wheeler segment, Hero MotoCorp witnessed sales of 484,769 units in February
2015. TVS Motor Co posted 15 per cent higher sales at 204,565 units against 177,662 units.
Bajaj Auto sold a total of 243,000 two and three-wheelers segment.

Investments:
To match production with demand, many auto makers have started to invest heavily in
various segments in the industry in the last few months. The industry has attracted foreign
direct investment (FDI) worth US$ 12,232.06 million during the period April 2000 to
February 2015, according to the data released by Department of Industrial Policy and
Promotion (DIPP).
Some of the major investments and developments in the automobile sector in India are as
follows:
1. DSK Hyosung has announced to set up a plant in Maharashtra and is planning to add
10-15 dealerships in the next financial year (FY 15-16) mostly in the tier-II cities and
introduce more models in the 250cc segment.
2. Germany-based luxury car maker BayerischeMotorenWerke AGs (BMW) local unit
has announced to procure components from seven India-based auto parts makers.
3. Mahindra Two Wheelers Limited (MTWL) has acquired 51 per cent shares in Francebased Peugeot Motorcycles (PMTC).
4. Suzuki Motor Corp is planning to sell the automobiles made in the Gujarat plant, in
Africa.
5. Tata Motors Ltd, Indias largest automobile maker, will sell trucks in Malaysia,
Vietnam and Australia to strengthen its presence in the Asia-Pacific region.

Government Initiatives:
The Government of India encourages foreign investment in the automobile sector and
allows 100 per cent FDI under the automatic route. Excise duty on small cars, scooters,
motorcycles and commercial vehicles was reduced in February last year to 8 per cent
from 12 per cent to boost the Make in India initiative of the Indian government.
Some of the major initiatives taken by the Government of India are:
1. Under the Union budget of 2015-16, the Government has announced to provide credit
of Rs 850,000 to farmers, which is expected to boost the tractors segment. The
government is aligning to ensure that at least one family member is economically
strong to support the family. This is expected to improve the sentiments of entry-level
two-wheelers.
2. The Government plans to promote eco-friendly cars in the country i.e. CNG based
vehicle, hybrid vehicle, electric vehicle and also made mandatory of 5 per cent
ethanol blending in petrol.
3. The government has formulated a Scheme for Faster Adoption and Manufacturing of
Electric and Hybrid Vehicles in India, under the National Electric Mobility Mission
2020 to encourage the progressive induction of reliable, affordable and efficient
electric and hybrid vehicles in the country.

10

4. The Automobile Mission Plan for the period 20062016, designed by the government
is aimed at accelerating and sustaining growth in this sector. Also, the well-established
Regulatory Framework under the Ministry of Shipping, Road Transport and
Highways, plays a part in providing a boost to this sector.

Road Ahead:
India is probably the most competitive country in the world for the automotive industry. It
does not cover 100 per cent of technology or components required to make a car but it is
giving a good 97 per cent, highlighted MrVicentCobee, Corporate Vice-President, Nissan
Motors Datsun.
The vision of AMP 2006-2016 sees India, to emerge as the destination of choice in the
world for design and manufacture of automobiles and auto components with output
reaching a level of US$ 145 billion; accounting for more than 10 per cent of the GDP and
providing additional employment to 25 million people by 2016.
The Japanese auto maker Maruti Suzuki expects the Indian passenger car market to reach
four million units by 2020, up from 1.8 million units in 2013-14.

11

INTRODUCTION TO THE AUTOCRAFT

In early eighties when automobile market was blooming, late Mrs Anila B. Shah visualized a
bright future for Auto Ancillary Industries. With a view to cater to the growing demand of
precision & quality components for Automobile Industries, she started a new venture with Mr
Henry DSouza, an experienced Engineer as working partner in the year 1983. This was the
beginning of Autocraft. Initially operations were started in an area of 950 sq. ft. at Gala No.
21 in the Nahur Industrial Estate, Mulund, Mumbai 80.
It started with manufacturing various engineering parts for Mahindra & Mahindra and Larsen
& Toubro, with manpower of six technicians headed by Mr Henry DSouza. From the modest
turnover of Rs. Ten Lacs in the first year of operation the firm achieved a steady progress to
reach Rs. 1.5 crores for the financial year 1997-98. After the sad demise of Mrs.Anilaben
Shah in December 1991 her husband Mr B.P. Shah, who is also a well-known businessman,
stepped in and the firm continued to make progress with Mr.Henry DSouza as a full fledge
partner.
Today, we are producing machined and fabricated engineering goods of high quality for
general and automobile industry and have a high rating at M/s. Mahindra & Mahindra Ltd.
Our main products are Differential axle, Axle drive flange, Companion Flange, Return
spindle assembly, Synchronizer cone, Spindle Axle,-Spring Shackle Assy.,Adoptor Plate,
Spindle Knuckle and Arm Knuckle for M&M vehicles.
Since 1994 Autocraft is operating at 15/16 Gala Ind. Estate, Dumping Road, Mulund (W)
with a covered area of 4200 Sq. ft., under the Reg. No. B III/ Mulund / DN/RE/CH-87/23/92.
Also we have started with operations at Chakan, purely on demand from our existing
customer s.
The administration & accounting is controlled from the head office at 21, NahurUdyog, opp.
Ralliwolf, Mulund (W), Mumbai-80, under the able guidance of our Chief Executive Officer,
Mr. B.P. Shah.
We have dedicated teams, who work on projects, giving it a customized touch to all our
customers requirements.

12

TYPES OF MACHINES
1. CNC Lathes

Elctronica Super Elton 2 nos.

Daewoo LYNX 210 1 no.
Jyoti STC 200 1 no.
Ace Jobber 2 no.
Ace Classic 2no\

2. VMCs

Stama With 12 Tools ATC & Twin pallets 1 no.

Jyoti 640 With 24 Tools ATC & Twin pallets 2 nos.
Ace With 12 Tools Single Pallet. 1 no.

3. CNCs

ACE super jobber -3 nos.

4. VMC

ACE 24 Tools, Twin Pallet. -1 no.

5. HMC

ACE -1 NO, 40 Tools, Twin Pallet 1no.

6. CMM
7. TRIMOS Height Master
8. Grinding In process gauge
9. Surface Comparator
10. Hardness Tester
11. Other standard equipment's
12. Surface Roughness Tester

13

Our Elite Clientele

Mahindra & Mahindra Ltd.
Mahindra Forgings Ltd.
Mahindra Navistar Ltd.
Kerala Automobile
Indian Navy
Mahindra Vehicle Ltd. Chakan
Mahindra Hinoday Ltd.

14

Product Portfolio
Forged & Casting Components Machining:
1. Spindle Knuckles
2. Reverse idler shaft
3. Gear Carrier Assy
4. Companion Flanges
5. Axle Drive Flange
6. Synchro Cone
7. Synchro Ring
8. Spider Block & Spacer
9. ABS Gear Carrier
10. Wheel Hub Front
11. Arm Knuckle RH
12. Arm Knuckle LH
13. Steering Knuckle
14. Knuckle
15. Stub Axle Assembly
16. Upper Arm Assembly
17. Axle Yoke
18. Sleeve Yoke
19. Gear Support Sleeve
20. Adaptor Plate

15

OBJECTIVE OF THE STUDY

The primary objective of working capital management is to understand

operating cycle of the business.
To understand the working capital structure of Autocraft ltd.
This project describes how the management of working capital takes place at
Autocraft.

SCOPE OF THE STUDY

This project is vital to me in a significant way. It does have some Importance for the
company too. These are as follows

This project will be a learning device for the finance student.

Through this project we would study the various methods of the working capital
management.

The project will be a learning of planning and financing working capital.

The project would also be an effective tool for credit policies of the Companies.

This will show different methods of holding inventory and dealing with Cash and
receivables.

This will show the liquidity position of the company and also how do they maintain a
particular liquidity position

16

Limitation of the Study

We cannot do comparisons with other companies unless and until we have the

data of other companies on the same subject.

The latest financial data could not be reported as the companys websites have

not been updated

Lastly, due to shortage of time it is not possible to cover all the factors and
details regarding the subject of study

RESEARCH QUESTION

How is the working capital management done in the company?

What kinds of tools and measurement taken by the company for funding the
working capital?

17

DATA ANALYSIS AND INTERPRITATION

CMA REPORT (Table No: 1.1)

PROJECTED PROFIT
& LOSS STATEMENT
M/S AUTOCRAFT

SR.NO
A

B
1

2
3
4
5
6
7
C

PROFIT & LOSS

ACCOUNT FOR THE
YEARS
PARTICULARS
SALES
Sales
Other Income

Audited

Projected

2013-14

2014-15

2015-16

2016-17

768.82
1.11
769.93

922.58
1.57
924.15

1,088.65
2.29
1,090.94

1,262.83
2.78
1,265.61

21.90

36.06

97.86

116.80

325.55
347.45

401.32
437.38

479.01
576.86

568.27
685.07

72.53
51.37

92.44
64.58

112.13
78.38

132.60
93.45

163.47
7.59
36.75

179.82
9.13
46.04

183.09
10.89
54.43

186.36
12.50
64.40

46.23

38.69

32.06

26.95

725.39

868.09

1,047.85

1,201.33

36.06

97.86

116.80

138.57

COST OF SALES

689.33

770.23

931.05

1,062.76

GROSS PROFIT (A-D)

80.59

153.92

159.89

202.85

COST OF
PRODUCTION
Opening Stock of Raw
materials
Add:
Purchases
Total
Labour
Other Manufacturing
Expenses
Salary & Wages
Rent
Other Administration
Expenses
Depreciation
TOTAL COST OF
SERVICE
Less:

Rs In
Lacs

Closing Stock
of Raw
Materials

INTEREST
18

a)
b)
b)
c)

On CC/OD
On Term Loan
On Unsecured
Loan
On Partner
Capital

2.67
9.24
11.07

6.50
7.44
9.68

6.50
6.11
9.68

6.50
3.62
9.68

14.98

18.94

26.66

34.67

37.96

42.56

48.94

54.47

SELLING & GENERAL

EXPENSES

26.63

31.96

37.71

43.74

REMUNERATION TO
PARTNER

12.53

13.78

15.16

16.68

PROFIT BEFORE
TAXATION

3.47

65.62

58.08

87.95

PROVISION FOR TAXES

20.28

17.95

27.18

PROFIT AFTER TAXES

3.47

45.35

40.13

60.78

NET PROFIT

3.47

45.35

40.13

60.78

Add:

Depreciation and Interest

87.66

126.60

121.14

142.20

NET CASH ACCRUALS

91.14

171.94

161.27

202.97

M
1)

2)

REPAYMENT
OBLIGATIONS
Towards
Business Loan
(EMI +
Interest)
Towards Others
2.67
(CC Interest)
Total
Repayment

6.50

6.50

6.50

2.67

6.50

6.50

6.50

34.13

26.45

24.81

31.23

M.D.S.C.R (M/L)

D.S.C.R.
27.50

19

M/S AUTOCRAFT BALANCE SHEET (Table No: 1.2)

M/S AUTOCRAFT
BALANCE SHEET
PARTICULARS
A

LIABILITIE
S
Capital and
Reserves
Term Loan
Bank OD
Bank CC
Unsecured Loans

Audited
2013-14
Total

Total

157.85

222.14

62.86
12.78
5.26
80.67

61.11
50.00
0.00
80.67

Total

Projected
2015-16

2014-15

319.4
2
319.4
2

413.9
2

2016-17

Total
288.9
2
40.45
50.00
0.00
80.67

413.9
2

Total
384.37

460.0
5

20.89
50.00
0.00
80.67

460.0
5

535.93

535.93

ASSETS
Fixed Assets
Opng WDV

302.38

270.25

Additions

14.10
316.48

0.50
270.75

Less:Depreciation 46.23
Clsg WDV

38.69
270.2
5

Investments

2.16

Current Assets
Inventories

232.0
6
0.00
232.0
6
32.06

200.00
0.00
200.00
26.95

232.0
6

200.0
0

173.05

2.16

2.16

2.16

97.86

116.80

138.57

123.85

146.1
5
105.1
9
16.55

169.53

16.39
6.84

6.84

6.84

293.30

391.5

517.45

36.06
Sundry Debtors
92.82
Cash & Bank
Balance
Other Current
Assets
Loans &
Advances

48.36
0.12
15.61
6.84
151.45

20

185.81
16.70

2
Less
:

Current
Liabilities
Sundry Creditors
NET CURRENT
ASSETS

13.94
90.50

14.64

15.52

16.60

98.96

118.11

140.12

47.01

TOTAL
319.4
2

(0.00)

179.7
0

257.8
9

360.72

413.9
2

460.0
5

535.93

0.00

0.00

0.00

21

CASH FLOW STATEMENT (TABLE NO: 1.3)

M/S AUTOCRAFT
PROJECTED CASH FLOW STATEMENT
SR.NO PARTICULARS

Rs In
Lacs

201415

201516

2016-17

108.1
8

107.02

142.43

Increase In Capital
Depreciation
Investment Allowance
Increase In Business Loan
PreliminaryExp Written Off
Increase In Unsecured Loan
Increase In Bank OD
Increase In CC
Increase In Car Loan
Others

0.00
38.69
0.00
0.00
0.00
0.00
37.22
0.00
0.00
0.00

0.00
32.06
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

0.00
26.95
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Total Sources (A)

184.1
0

139.08

169.38

SOURCES OF FUNDS

Cash Accruals
(Net Profit Before Taxation &
Add Interest)

2
3
4
5
6
7
8
9
10
11

DISPOSITION OF FUNDS

1
2
3

Preliminary& Preoperative Exp

Increase In Capital Expenditure
Increase In Net Current Assets
(Excluding Cash & Bank Bal)
Increase in Investments
Decrease In Business Loans
Decrease In Unsecured Loans
Decrease In Bank OD
Decrease In CC
Interest
Taxation
Drawing

0.00
0.50
84.46

0.00
0.00
21.36

0.00
0.00
22.21

0.00
1.75
0.00
0.00
5.26
23.62
20.28
0.00

0.00
20.66
0.00
0.00
0.00
22.29
17.95
0.00

0.00
19.56
0.00
0.00
0.00
19.80
27.18
0.00

Total Disposition (B)

135.8
6

82.25

88.75

Opening Balance

0.12

48.36

105.19

4
5
6
7
8
9
10
11

22

Net Surplus (A-B)

48.24

56.83

80.62

Closing Balance (C-D)

48.36

105.19

185.81

48.36

105.19

185.81

0.00

0.00

0.00

CASH

23

CHANGE IN CURRENT ASSETS (TABLE NO: 1.4)

M/S
AUTOCRAFT
STATEMENT OF CHANGES IN CURRENT ASSETS
(Excluding Cash & Bank Bal)
PARTICULARS
2013-14
2014-15

Rs In
Lacs
2015-16

2016-17

CURRENT
ASSETS
Inventories
36.0
6

97.86

116.80

138.57

92.8
2

123.8
5
16.39

146.15

169.53

16.55

16.70

6.84

6.84

6.84

Sundry Debtors

Other Current
Assets
Loans &
Advances

Less:

15.6
1
6.84
151.3
3

244.9
4

286.3
3

331.64

Current
Liabilities
Sundry
Creditors

13.94

14.64

15.52

16.60

90.50

98.96

118.11

140.12

NET
CURRENT
ASSETS

46.89

131.3
4

152.7
0

174.91

0.00

84.46

21.36

22.21

CURRENT
YEAR
PREVIOUS
YEAR
Increase in Net
Current Assets

24

WORKING CAPITAL REQUIREMENT (TABLE NO: 1.5)

M/S AUTOCRAFT
WORKING CAPITAL REQUIREMENT

Rs In
Lacs

STOCK
SR.NO PARTICULARS

2013-14

2014-15

2015-16

2016-17

138.57

PERIO
D
1
2
3

Raw Materials
Work in Progress
Finished Goods

89.00
-

36.06
-

97.86
-

116.80
-

4
5

Sundry Receivables
Advance to Creditors

49.00
-

92.82

123.85
-

146.15
-

169.53

128.88

221.71

262.95

308.10

90.50

98.96

118.11

140.12

38.38

122.75

144.84

167.97

92.07

108.63

125.98

TOTAL
6

Less:
Credit For Raw
Materials

90.00

WORKING
CAPITAL

25

WORKING CAPITAL RATIOS (TABLE NO: 1.6)

M/S AUTOCRAFT
Working Capital Ratios
Particulars

2013-14

2014-15

2015-16

2016-17

1.
CURRENT RATIO= - TOTAL CURRENT
ASSETS
TOTAL CURRENT LIABILITIES

1.45

2.16

2.14

2.12

0.05

0.13

0.13

0.13

1.10

1.29

1.27

1.23

0.56

1.06

1.43

1.92

15.34

31.73

61.26

43.85

a) Receivables Ratio= - Debtors * 365

Sales

44.07

49.00

49.00

49.00

b) Payable Ratio=- Creditors *365

Cost of Goods of Sales

106.08

106.38

93.71

93.58

2. Working Capital Ratio= Inventory+Receivables-Paybles

Sales
3.
Quick Ratio= - Total Current Assets Inventories
Total Current Liabilities
a) CA TO FA Ratio= - Current Assets
Fixed Assets
5. Stock Turnover Ratio = - Average Stock *365
Cost of Goods Sold

26

Comments
1) Current ratio
i) The ratio was 1.45:1 in 2013-14. The ideal current ratio is 2:1. The lower ratio in
2013-14 implies that the company may face difficulties in paying its current
liabilities / debts in 2013-14.
ii) The ratio in 2014-15 was 2.16:1 as compared to 1.45:1 in 2013-14. The ratio
increased in 2014-15 due to increase in debtors and inventories of the company.
2) Working Capital Ratio
i) The ratio was 0.05:1 in 2013-14. The ideal Working capital ratio is 2:1. The lower
ratio in projected year indicates financial crunch or liquidity problem in future.
ii) The ratio in 2014-15, 2015-16, and 2016-17 0.13:1 is because of estimation in
future years are taken same.
3) Quick Ratio
i) The ratio was 1.10:1 in 2013-14. The ideal quick ratio is 1:1. The increase in ratio
means that company has more liquid assets available to cover current liability of
the company.
ii) The ratio is positively increasing in projected year, which shows company will
have more liquid assets to repay its debt in future.
4) Stock Turnover Ratio
i) The ratio was 15.34 in 2013-14. There is no such as ideal ratio for stock turnover
ratio, we need to compare with industry standard for the same.
ii) And as per industry standard it is showing a good sign.
5) Receivables Ratio
i) The receivable ratio indicates approx. 44days debtors cycle in 2013-14, which is
a good indication as per industry standards.
ii) And projected days are also indicating 49 days debtors cycle.
6) Payable Ratio
i) The payable ratio indicates approx. 106 days creditors cycle in 2013-14, which
indicates that the company has a favorable creditors cycle.
ii) Even projected years shows a good creditors cycle. Which means company can
invest more money for short-term assets for good returns.

27

SUNDRY DEBTORS (Table No: 1.7)

Sr.no

Name of Party

invoice no

ALF Engineering

1545/12-13

Invoice
Date

Received
Date

Debit
Period

28-Mar-13

22-May-13 55

28-Mar-13

22-May-13 55

06-Mar-13

22-Apr-13 47

30-Apr-13

15-Jul-13 76

31-May-13

13-Aug-13 74

007/13-14

1447/12-13

116/13-14

217/13-14

61

Kit Automotive &

Tubular Products

301/13-14
28-Aug-13

26-Nov-13 90

18-Oct-13

26-Nov-13 39

29-Jun-13

01-Oct-13 94

01-Dec-13

17-Feb-14 78

27-Dec-13

17-Feb-14 52

440/13-14

122/13-14

612/13-14

732/13-14

28

71

Mahindra &
Mahindra Ltd (K)

124/13-14
10-May-13

03-Jun-13 24

11-Jun-13

02-Jul-13 21

11-Jul-13

05-Aug-13 25

12-Oct-13

07-Nov-13 26

11-Nov-13

02-Dec-13 21

244/13-14

338/13-14

457/13-14

514/13-14

23

Mahindra &
Mahindra Ltd (N)

364/13-14
31-Aug-13

26-Sep-13 26

11-Sep-13

02-Oct-13 21

21-Sep-13

14-Oct-13 23

19-Oct-13

11-Nov-13 23

13-Dec-13

06-Jan-14 24

514/13-14

554/13-14

696/13-14

897/13-14

29

23

Mahindra &
Mahindra Ltd (Z)

250/13-14
13-Jun-13

06-Jul-13 23

22-Jun-13

16-Jul-13 24

10-Jul-13

05-Aug-13 26

12-Nov-13

05-Dec-13 23

24-Oct-13

19-Dec-13 56

279/13-14

336/13-14

767/13-14

719/13-14

30

Mahindra Forgings
(P)

619/13-14
30-Dec-13

12-Mar-14 72

25-Nov-13

11-Feb-14 78

11-Nov-13

15-Jan-14 65

29-Jul-13

21-Dec-13 145

25-Jul-13

17-Oct-13 84

550/13-14

515/13-14

288/13-14

281/13-14

30

89

Mahindra &
Mahindra Ltd (P)

958/13-14
16-Mar-13

08-Apr-13 23

06-Apr-13

29-Apr-13 23

20-Nov-13

12-Dec-13 22

21-Nov-13

12-Dec-13 21

12-Dec-13

02-Jan-14 21

19/13-14

799/13-14

804/13-14

894/13-14

22

Mahindra &
Mahindra (Z)

1483/12-13
13-Mar-13

05-Apr-13 23

22-Mar-13

12-Apr-13 21

21-Apr-13

13-May-13 22

27-Apr-13

20-May-13 23

1514/12-13

85/13-14

97/13-14

1525/13-14
20-Feb-13

31

11-Jun-13 111

40

Mahindra Trucks &

Buses Ltd

345/13-14
16-Jul-13

20-Jan-14 188

13-Jun-13

12-Jul-13 29

29-Jun-13

25-Jul-13 26

20-Jul-13

01-Nov-13 104

13-Aug-13

28-Oct-13 76

248/13-14

308/13-14

357/13-14

426/13-14

85

10

Mahindra Vehicle
Manf.Ltd

1506/13-14
19-Mar-13

15-Apr-13 27

05-Apr-13

06-May-13 31

30-Mar-13

26-Apr-13 27

16-May-13

30-May-13 14

27-May-13

20-Jun-13 24

19/13-14

1568/13-14

166/13-14

193/13-14

32

25

11

YojanaUdyog Ltd
(K)

55/12-13
16-Apr-13

13-Jun-13 58

20-May-13

17-Aug-13 89

13-Jul-13

24-Sep-13 73

11-Nov-13

04-Dec-13 23

15-Nov-13

07-Feb-14 84

178/13-14

259/13-14

512/13-14

522/13-14

65

Total Debit Cycle

49
Average Credit
Period for debtors

49

Comment:
On the examination of a sample of 80% of the total debtors, we observed that the average
debtors days of the company are 49 days.

33

SUNDRY CREDITORS (Table No. 1.8)

Sr.No

Name of the Party

Bill No

Akshar Enterprises

18

Bill Date

Paid Date

Credit
period

15-Jul-13

21-Oct-13

98.00

15-Jul-13

28-Sep-13

75.00

24-Oct-13

24-Dec-13

61.00

19

36

78.00

Arabian Petroleum

290
12-Apr-13

09-Aug-13

119.00

02-May-13

12-Sep-13

133.00

04-Jun-13

17-Oct-13

135.00

02-Sep-13

02-Nov-13

61.00

09-Oct-13

20-Dec-13

72.00

747

1490

3712

4588

104.00

18-Apr-13
3

BenaraUdyog Ltd

367
34

24-May-13

36.00
1565
17-Jun-13

17-Oct-13

122.00

06-Dec-13

13-Dec-14

372.00

03-Mar-14

30-Apr-14

58.00

04-Mar-14

09-May-14

66.00

4953

6676

6716

130.80

Dharmendra Enterprises

14108
06-Jul-13

12-Nov-13

129.00

21-Mar-14

09-May-14

49.00

12-Feb-14

17-Apr-14

64.00

06-Mar-14

09-May-14

64.00

07-Mar-14

09-May-14

63.00

14371

14331

14352

14354

73.80

07-May-13
5

Hemant Tools pvt.Ltd

4577
35

01-Jun-13

25.00
8492
04-Jun-13

17-Oct-13

135.00

02-Jan-14

07-Mar-14

64.00

06-Mar-14

09-May-14

64.00

06-Mar-14

09-May-14

64.00

35816

44873

44790

70.40

Jain A one Industries

jai/13-14/l003

02-Apr-13

18-Jul-13

107.00

jai/1314/004

03-Apr-13

18-Jul-13

106.00

19-Jul-13

29-Jul-13

10.00

25-Feb-14

18-Apr-14

52.00

21-Mar-14

13-May-14

53.00

L-32

127

141

65.60

13-Apr-13
7

Jain Products

12004
36

09-Aug-13

118.00
12020
02-Sep-13

21-Nov-13

80.00

22-Oct-13

24-Dec-13

63.00

03-Dec-13

13-Feb-14

72.00

12-Dec-13

14-Feb-14

64.00

12080

33

34

79.40

Manko Industries

4
06-Apr-13

01-Aug-13

117.00

18-Apr-13

09-Aug-13

113.00

23-Apr-13

09-Aug-13

108.00

14-Jun-13

17-Oct-13

125.00

20-Sep-13

27-Nov-13

68.00

11

14

39

93

106.20

02-Apr-13
9

NAV Engineering Traders

14010
37

18-Apr-13

16.00
14036
08-Apr-13

18-Jul-13

101.00

13-Jun-13

17-Oct-13

126.00

03-Jul-13

21-Oct-13

110.00

20-Apr-13

30-Aug-13

132.00

14289

14412

14081

97.00

10

prayosha International

5
15-Apr-13

13-Jul-13

89.00

10-Apr-13

13-Jul-13

94.00

02-Jul-13

28-Sep-13

88.00

06-Jul-13

28-Sep-13

84.00

27-Sep-13

11-Dec-13

75.00

17

18

36

86.00

04-Feb-13
11

samart Forgings Ltd

2210
38

22-Apr-13

77.00
2403
28-Feb-13

14-May-13

75.00

06-Mar-13

24-May-13

79.00

06-Mar-13

03-May-13

58.00

03-May-13

27-Aug-13

116.00

2463

2462

516

81.00

12

S.G.Engineering
Industries

72
14-Jan-13

15-Apr-13

91.00

28-Jan-13

29-Apr-13

91.00

19-Feb-13

14-May-13

84.00

23-Mar-13

18-Jul-13

117.00

04-Oct-13

13-Dec-13

70.00

76

86

94

53

90.60

Total Credit Cycle

88.57
39

Average credit period for Creditors

90.00
Comment:
On the examination of a sample of 50% of the total creditors, we observed that the
average creditors days of the company are 90 days.
iii)

40

CAPITAL & RESERVES ACCOUNT (TABLE NO: 1.9)

AUTOCRAF
T
CAPITAL & RESERVES
ACCOUNT
SR.NO
PARTICULARS
1
Opening Balance
2
Add: Additions to Capital
3
Add:
Net Profit
4
Add:
Interest
5
6

Less:

Drawings
Closing Balance

Interest Calculation

Rs In Lacs
2014-15
157.85
45.35
18.94
222.14

2015-16
222.14
40.13
26.66
288.92

2016-17
288.92
60.78
34.67
384.37

222.14

288.92

384.37

18.94

26.66

34.67

41

LOAN REPAYMENT (TABLE NO: 1.10)

AUTOCRAFT
Details of Loan Repayment of SIDBI Loan (Existing Loan)
Sr.No
OpnPricipal
Interest
InstallmentAmt Pricipal
@ 12.25
(Pricipal)
Repaid

Bal O/s

2.18
1

58.81

0.60

April.2014
1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

1.58

57.23

2.18
2

58.81

0.60
2.18

58.81

0.60

58.81

0.60

2.18
2.18
5

58.81

0.60
2.18

58.81

0.60
2.18

58.81

0.60

58.81

0.60

2.18
2.18
9

58.81

0.60
2.18

10

58.81

0.60

11

58.81

0.60

2.18
2.18
12

58.81

0.60

March.2015
1.58

57.23

1.58

55.65

1.58

54.07

1.58

52.49

1.58

50.91

1.58

49.33

1.58

47.75

1.58

46.17

1.58

44.59

2.16
13

57.23

0.58
2.15

14

55.65

0.57

15

54.07

0.55

2.13
2.12
16

52.49

0.54
2.10

17

50.91

0.52

18

49.33

0.50

2.08
2.07
19

47.75

0.49
2.05

20

46.17

0.47
2.04
42

21

44.59

0.46

1.58

43.01

1.58

41.43

1.58

39.85

1.58

38.27

1.58

36.69

1.58

35.11

1.58

33.53

1.58

31.95

1.58

30.37

1.58

28.79

1.58

27.21

1.58

25.63

1.58

24.05

1.58

22.47

1.58

20.89

2.02
22

43.01

0.44
2.00

23

41.43

0.42

24

39.85

0.41

1.99

March.2016

1.97
25

38.27

0.39
1.95

26

36.69

0.37
1.94

27

35.11

0.36

28

33.53

0.34

1.92
1.91
29

31.95

0.33
1.89

30

30.37

0.31

31

28.79

0.29

1.87
1.86
32

27.21

0.28
1.84

33

25.63

0.26
1.83

34

24.05

0.25

35

22.47

0.23

1.81
1.79
36

20.89

0.21

March.2017
1.58

43

19.31

Details of Loan Repayment of Volkswagen Loan (Existing Loan)

Sr.No
OpnPricipal
Interest
InstallmentAmt
Pricipal
@ 5.75
(Pricipal)
Repaid

Bal O/s

0.19
1

4.05

0.02

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.21

3.88

0.19
2

4.05

0.02

4.05

0.02

0.19
0.19
4

4.05

0.02
0.19

4.05

0.02
0.19

4.05

0.02

4.05

0.02

0.19
0.19
8

4.05

0.02
0.19

4.05

0.02

10

4.05

0.02

0.19
0.19
11

4.05

0.02
0.19

12

4.05

0.02

13

3.88

0.02

0.21

3.88

0.21

3.72

0.21

3.55

0.21

3.38

0.21

3.21

0.21

3.04

0.21

2.87

0.21
0.21

2.70
2.53

0.21

2.36

0.19
0.19
14

3.72

0.02
0.19

15

3.55

0.02
0.19

16

3.38

0.02

17

3.21

0.02

0.19
0.19
18

3.04

0.01
0.19

19
20

2.87
2.70

0.01
0.01

0.19
0.19

21

2.53

0.01
0.19
44

March.201
5

22

2.36

0.01

0.21

2.18

0.22
23

2.18

0.01

Feb.2016
0.21

45

1.98

DEPRECIATION WORKING (TABLE NO: 1.11)

Depreciation Working
Year

Particulars

Plant &
Machinery

Computer

0.15

0.6

Furnitur
e&
Fixtures
0.1

Other

Tenancy
Rights

Total

0.10
2013
2014

Opening
WDV
Add
:Additions

302.36
273.17

0.65

8.10

0.83

19.61
14.09

8.30

5.39

0.40

281.47

6.04

8.50

0.83

19.61

41.97

3.33

0.84

0.08

239.50

2.71

7.66

0.75

19.61

239.50

2.71

7.66

0.75

19.61

316.45

Less :
Depreciatio
n
Closing
WDV

2014
2015

Opening
WDV
Add
:Additions

46.22

270.23

270.25

0.50
-

0.50

239.50

3.21

7.66

0.75

19.61

35.93

1.93

0.77

0.08

203.58

1.28

6.89

0.68

270.75

Less :
Depreciatio
n
Closing
WDV

2015
2016

Opening
WDV
Add
:Additions

38.69

19.61

232.04

232.04
203.58

1.28

6.89

0.68

19.61
0.00

46

232.04

2016
2017

203.58

1.28

6.89

0.68

Less :
Depreciatio
n

30.54

0.77

0.69

0.07

Closing
WDV

173.04

0.51

6.20

0.61

19.61

173.04

0.51

6.20

0.61

19.61

Opening
WDV
Add
:Additions

19.61
32.06

199.98

199.98

0.00
-

173.04

0.51

6.20

0.61

19.61

25.96

0.31

0.62

0.06

147.08

0.21

5.58

0.55

199.98

Less :
Depreciatio
n
Closing
WDV

26.95

47

19.61

173.03

INTEREST CALCULATION (TABLE NO: 1.12)

Calculation of Interest on Unsecured Loan
Sr.No

OpnPricipal

80.67

80.67

80.67

Int @
15%
12.10
12.10
12.10

48

OPERATING STATEMENT (TABLE NO: 1.13)

OPERATING
STATEMENT
Form II
Name:

AUTOCRAFT

Particulars

Amount: In
lacs

Audite
d

Following
year's

Following
year's

2013-14

Projections
2014-15

Projections
2015-16

768.82

922.58

1,088.65

Following
year's
Projections
2016-17

GROSS SALES
i) Domestic Sales
1,262.83

ii) Export Sales

-

TOTAL
768.82
2

922.58

1,088.65

1,262.83

Less: Excise Duty

-

Net Sales (1-2)

768.82

922.58

1088.65

1262.83

% age rise (+) or fall (-)

on Net Sales as compared to
previous year

0.00

20.00

18.00

16.00

COST OF SALES :

21.90

36.06

325.55

401.32

i) 1) Opening Stock of materials

2) Add: Purchase Materials
(including
stores & other terms used in the
process
of manufacture)
3) Less: Closing stock of material

97.86
479.01

116.80
36.06
49

97.86

116.80
568.27

138.57

Material Consumed

311.39

339.53

ii) Other spares

a) Imported

460.06

546.51

b) Indigenous
iii) Salary & Wages

186.36
163.47

179.82

iv) Direct Labour

72.53

92.44

112.13

132.60

v) Other Manufacturing Expenses

51.37

64.58

78.38

93.45

Particulars

Audite
d

Following
year's
Projections

183.09

Following
year's

Following
year's

2013-14

2014-15

Projection
s
2015-16

vi) Depreciation

46.23

38.69

32.06

26.95

vii) Sub-Total ( i to vi )

644.99

715.06

865.73

985.86

viii) Add: Opening stocks-in-process

0.00

0.00

0.00

0.00

644.99

715.06

865.73

985.86

ix) Deduct: Closing Stocks in

process

0.00

0.00

0.00

0.00

x)

644.99

715.06

865.73

985.86

0.00

0.00

0.00

0.00

644.99

715.06

865.73

985.86

0.00

0.00

0.00

0.00

Sub Total

Cost of Production

xi) Add: Opening Stocks of Finshd

Goods
Sub Total
xii) Deduct: Closing Stocks of
Finshed Goods
xiii) Sub Total

50

Projections
2016-17

(Total Cost of Sales)

644.99

715.06

865.73

985.86

Selling, General & Administrative

Expenses

83.50

100.91

118.19

137.33

Sub Total ( 5 + 6 )

728.49

815.97

983.92

1123.18

Operating Profit before interest ( 3 - 7

)

40.33

106.61

104.73

139.65

Interest

1
0

Operating Profit after Interest ( 8 - 9 )

11 i) Add: Other Non-Operating

Income
Indirect Income
Sub Total (Income)

54.47
37.96

42.56

48.94

2.37

64.05

55.79

85.18

1.11
1.11

1.57
1.57

2.29
2.29

2.78
2.78

ii) Deduct: Other Non-Operating

Expenses
Sub-Total (Expenses)

iii) Net of Other Non-Operating

Income / Expenses
(Net of 11 (i) and 11 (ii)

1.11

51

1.57

2.29

2.78

Particulars

Audite
d

Following
year's
Projections

1
2

Profit before Tax/ Loss

Following
year's

2013-14

2014-15

Projection
s
2015-16

3.48

65.62

58.08

20.28

17.95

Following
year's
Projections
2016-17
87.95

(10 + 11 (iii))
1
3

Provision for Taxes

1
4

Net Profit / Loss ( 12 - 13 )

3.48

45.35

40.13

60.78

1
5

a)

Equity Dividend Paid

0.00

0.00

0.00

0.00

b)

Dividend Rate %

0.00

0.00

0.00

0.00

1
6

Retained Profit ( 14 - 15 )

3.48

45.35

40.13

60.78

1
7

Retained Profit / Net Profit ( % age )

100%

100%

100%

100%

52

27.18

Particulars

Audite
d

Following
year's
Projections

Following
year's

Following
year's

2013-14

2014-15

Projection
s
2015-16

0.00

50.00

50.00

50.00

ii) From other banks

18.04

0.00

0.00

0.00

Sub Total (A)

18.04

50.00

0.00

50.00

Short Term Borrowings from Others

0.00

0.00

0.00

0.00

Sundry Creditors ( Trade )

90.50

98.96

118.11

140.12

Advance payments from customers/

deposits from dealers

0.00

0.00

0.00

0.00

Provision for Taxation

0.00

0.00

0.00

0.00

Dividend Payable

0.00

0.00

0.00

0.00

Other Statutory Liabilities-(Fringe

Benefit Tax)
(Due within one year)

0.00

0.00

0.00

0.00

Deposits / Instalments of Term Loans/

DPG/s / Debentures, etc. (due within
one year)

0.00

0.00

0.00

0.00

Projections
2016-17

LIABILITIE
S
CURRENT
LIABILITIE
S
1

Short-term borrowings from banks

(including bills purchased, discounted
&
excess borrowings placed on
repayment
basis)
i)

From applicant bank

53

Particulars

1
0

Audited

Following
year's

Following
year's

Following
year's

Projection
s
2015-16

Projections

2013-14

Projection
s
2014-15

Other Current Liabilities &

Provisions
(due within one year)
(Specify major items)

13.94

14.64

15.52

16.60

Sub - Total ( B )

104.44

113.59

133.63

156.72

122.48

163.59

133.63

206.72

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

62.86

61.11

40.45

20.89

0.00

0.00

0.00

0.00

(repayable after one year)

0.00

0.00

0.00

0.00

Other Term Liabilities

80.67

80.67

80.67

80.67

2016-17

TOTAL CURRENT LIABILITIES

(Total of 1 to 9 )
TERM
LIABILITIE
S

11 Debentures
(Not maturing within one year)
1
2

Preference Shares
(redeemable after one year)

1
3

Term Loans
(excluding instalments payable within
one year )

1
4

Deferred Payment Credits

(excluding instalments due within one
one year )

1
5
1

Term Deposits

54

6
1
7

TOTAL TERM LIABILITIES

(Total of 11 to 16 )

1
8

143.53

141.78

121.12

101.56

266.01

305.38

254.75

308.28

TOTAL OUTSIDE LIABILITIES

( 10 + 17 )
NET
WORTH

1
9

Capital

157.85

222.14

288.92

384.37

2
0

General Reserve

0.00

0.00

0.00

0.00

2
1

Revaluation Reserve

0.00

0.00

0.00

0.00

2
2

Other Reserves
0.00

0.00

0.00

0.00

(excluding provisions)

55

Particulars

Audited

Following
year's

Following
year's

Following
year's

Projection
s
2015-16

Projections

2013-14

Projection
s
2014-15

Profit & Loss Accounts

0.00

0.00

0.00

0.00

2
4

NET WORTH

157.85

222.14

288.92

384.37

2
5

TOTAL LIABILITIES
423.86

527.52

543.67

692.66

0.12

48.36

105.19

185.81

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

92.82

123.85

146.15

169.53

0.00

0.00

0.00

0.00

2
3

2016-17

Surplus ( + ) or Deficit ( - ) in

( 18 + 24 )

CURRENT ASSETS
2
6

Cash & Bank Balances

2
7

Investments
(Other than long term investments)
i)

Government & Other Trustee

Securities

ii) Fixed Deposits with Banks

2
8

i) Receivables other than

Deferred & Exports (including
bills
purchased / discounted by bankers)
ii) Export Receivables (including
bills
purchased/ discounted by bankers)

2
9

Instalments of Deferred Receivables

56

( due within one year)

3
0

3
1
3
2

3
3

0.00

0.00

0.00

0.00

i) Materials (including stores

& other items in the process of
manufacturing)
a) Imported & Indigenous

36.06

97.86

116.80

138.57

ii) Stocks in Process

0.00

0.00

0.00

0.00

iii) Finished Goods

0.00

0.00

0.00

0.00

iv) Other Consumable Spares

a) Imported
b) Indigenous

0.00
0.00

0.00
0.00

0.00
0.00

0.00
0.00

Advances to Suppliers of Raw

Materials
& Stores / Spares

0.00

0.00

0.00

0.00

Advance payment of Taxes

0.00

0.00

0.00

0.00

Particulars

Audited

Inventory

Following
year's

Following
year's
Projections

2013-14

Projection
s
2014-15

Projection
s
2015-16

2016-17

22.45

23.23

23.38

23.54

151.45

293.30

391.52

517.45

Other Current Assets

Deposits, Deferred Tax Asset, Loans
&
Advances, Tax Deducted at source.

3
4

Following
year's

TOTAL CURRENT ASSETS

(Total of 26 to 33 )
FIXED ASSETS

57

3
5

Opening W.D.V of Fixed Assets

(land & building, machinery,
furniture, computers,
work in progress )

316.48

270.75

232.06

200.00

3
6

Depreciation

46.23

38.69

32.06

26.95

3
7

Closing W.D.V of Fixed Assets

270.25

232.06

200.00

173.05

Deposits which are not Current Assets

0.00

0.00

0.00

0.00

i)

0.00

0.00

0.00

0.00

2.16

2.16

2.16

2.16

ii) Advances to Suppliers of Capital

Goods & Contractors

0.00

0.00

0.00

0.00

iii) Deferred Receivables (Maturity

exceeding one year)

0.00

0.00

0.00

0.00

iv) Others

0.00

0.00

0.00

0.00

3
9

Non-Consumable Stores & Spares

0.00

0.00

0.00

0.00

4
0

Other Non-Current Assets

(including dues from directors)

0.00

0.00

0.00

0.00

TOTAL OTHER NON-CURRENT

ASSETS
( TOTAL OF 38 TO 40 )

2.16

2.16

2.16

2.16

( 35 - 36 )
OTHER NON-CURRENT ASSETS
3
8

4
1
4
2

Investments/Book Debts/Advances

a)

Investments in Subsidiary
Companies/ Affiliates
b) Others

Intangible Assets ( patents, goodwill

preliminary expenses, bad/ doubtful
58

debts
not provided for , etc. )

0.00

59

0.00

0.00

0.00

Particulars

4
3

Audited

423.86

527.52

593.68

692.66

157.85

222.14

288.92

384.37

28.97

129.70

207.89

310.72

1.24

1.79

2.93

2.50

1.69

1.37

0.88

0.80

0.00

0.00

0.00

0.00

0.00
0.00

0.00
0.00

0.00
0.00

0.00
0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

2016-17

Current Ratio
( 34 / 10 )

4
7

Projection
s
2015-16

Projections

2013-14

Projection
s
2014-15

NET WORKING CAPITAL

[ (17 + 24 ) - ( 37 + 41 + 42 )]
To tally with ( 34 - 10 )

4
6

Following
year's

TANGIBLE NET WORTH

( 24 - 42 )

4
5

Following
year's

TOTAL ASSETS
(Total of 34, 37, 41, & 42 )

4
4

Following
year's

Total Outside Liabilities /

Tangible Net Worth ( 18 / 44 )
ADDITIONAL INFORMATION
A) Arrears of depreciation
B) Contingent Liabilities
i) arrears of cumulative dividends
ii) gratuity liability not provided
for
iii) disputed excise / customs / tax
liabilities
iv) other liabilities not provided
for

60

COMPARATIVE STATEMENT OF CURRENT ASSETS AND

LIABILITIES (TABLE NO: 1.14)
COMPARATIVE STATEMENT OF CURRENT ASSETS AND LIABILITIES

Particulars

Audited

Following
year's

Following
year's

Following
year's
Projections

2013-14

Projection
s
2014-15

Projection
s
2015-16

2016-17

36.06

97.86

116.80

138.57

A. CURRENT ASSETS
1)

Materials
(incl. Stores & other items used in

the
process of manufacture)
a) Imported & Indigenous

2)

Other Consumable
Spares excluding those included
in 1 above
a) Imported

b) Indigenous :

3)

4)

Stocks-in-Process

Finished Goods

5) Receivables from exports &

deferred
receivables (including bills
purchased &
discounted by bankers)
Receivables
(including bills purchased
& discounted)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

92.82

123.85

146.15

169.53

6)

61

Particulars

Audited

Following
year's

Following
year's

2013-14

Projection
s
2014-15

Projection
s
2015-16

7) Advances to Suppliers
of Raw Material & Stores/ Spares,
Consumables

8) Other Current Assets including

Cash & Bank
Balances & Deferred Receivables
due within
one year (Specify major items)

22.57

71.59

128.57

209.35

151.45

293.30

391.52

517.45

90.50

98.96

118.11

140.12

Projections
2016-17

9) TOTAL CURRENT ASSETS

( To agree with item 34 in Form
III )

Following
year's

CURRENT LIABILITIES
(Other than bank borrowings for
working capital )
10) Creditors for Purchase of
Raw Materials Stores &
Consumable Spares
11) Advances from Customers

12) Statutory Liabilities

13) Other Current Liabilities

16.60
13.94

( Specify major items - short term

borrowings,
unsecured loans, dividend
payable, instalments of
term loan, DPG, public deposits,
debentures etc.)

62

14.64

15.52

14) TOTAL
( To agree with sub-total B - 10 in
104.44
113.59
133.63
156.72
Form III )
COMPUTATION OF MAXIMUM PERMISSIBLE BANK FINANCE
Particulars
Audited
Following
Following
Following
year's
year's
year's

2013-14

Projection
s
2014-15

Projection
s
2015-16

2016-17

Total Current Assets

( 9 in Form IV )

151.45

293.30

391.52

517.45

Other Current Liabilities

( other than bank borrowing )
( 14 of Form IV )

104.44

113.59

133.63

156.72

Working Capital Gap ( WCG )

(1-2)

47.01

179.70

257.89

360.72

37.86

73.32

97.88

129.36

Actual / Projected Net Working

Capital ( 45 in Form III )

28.97

129.70

207.89

310.72

Item 3 minus item 4

9.15

106.38

160.01

231.36

Item 3 minus item 5

18.04

50.00

50.00

50.00

Maximum Permissible Bank

Finance (Item 6 or 7 whichever
is lower )

9.15

50.00

50.00

50.00

Minimum stipulated Net Working

Capital i.e.25 % of WCG / 25 %
of total current assets, as the case
may be, depending upon the method
of lending being applied (Export
receivables to be excluded under
both methods )

63

Projections

Excess borrowings representing

shortfall in NWC ( 4 - 5 )

8.89

64

-56.38

-110.01

-181.36

CONCLUSION
The management of working capital plays a vital role in running of a successful business.
So, things should go with a proper understanding for managing cash, receivables and
inventory.
AutocraftPvt.Ltd. is managing its working capital in a good manner, but still there is some
scope for improvement in its management.
This can help the company in raising its profit level by making less investment in accounts
receivables and stocks etc. This will ultimately improve the efficiency of its operations.
Following are few recommendations given to the company in achieving its desired
objectives:
The business runs successfully with adequate amount of the working capital but the company
should see to it that the cash should not be tied up in excessive amount of working capital.
Though the present collection system is near perfect, the company as due to the Increasing
sales should adopt more effective measures so as to counter the threat of bad debts.
The over purchasing function should be avoided as it could lead to liquidity problems.
The investment of cash in marketable securities should be increased, as it is very profitable
for the company.
Holding of excessive and insufficient stock must be avoided as it creates a burden on the cash
resources of a business and results in lost sales, delays for customers, etc respectively.
The company need to keep high inventory because of fluctuating demand from their client,
which need to control and schedule properly in order to reduce cost of the company.
Company has a favourable working capital cycle, as shown in above ratios, company need to
invest liquidity in proper short-term assets in order to maximize their profits.

65

BIBLIOGRAPHY
Corporate Intranet
Financial Statements (Annual Reports)
Direct interaction with the employees of the company
Internet ---o www.Eatagroupofcompanies.com
o www.scribd.com
o www.automobileindustries.com
Textbooks on financial management I.M.Pandey
Khan and Jain

66