INDEX

SR.N
PARTICULARS
O.
1
CHAPTER-1
Introduction to project
company profile
2
CHAPTER-2
Objective of study
research methodology
3
CHAPTER-3
Analysis of working
capital management
4
CHAPTER-4
Data analysis and
interpretation
5
CHAPTER-5
Limitation of the project
and
Suggestion
6
BIBLIOGRAPHY

PAGE
NO.
1-13

14-19

20-33

34-54

55-58

59-60

QUESTIONNAIRE

61-63

CHAPTER-1
INTRODUCTION TO
PROJECT AND
COMPANY PROFILE

INTRODUCTION
INTRODUCTION TO PROJECT
The project is based on analysis of
working capital at twin wheels &
components pvt. Ltd. company . This
company deals in manufacturing of cycle
parts. The turnover of this company is 3-4
crore. This company sells all bicycle parts
to BHOGAL & SONS COMPANY
(LUDHIANA).

INTRODUCTION ABOUT CYCLE

INDUSTRY IN INDIA

The size of Indian bicycle industry stands at

US$1.2 billion. The number of units (finished
bicycles including all segments) produced is
around 12 million , according to an industry
source . Of this , the number of units
exported annually is about 2-3 millions which
points to huge demand in the domestic
market.
Ludhiana is the hub for bicycle manufacturing
in India . More than 25000 cycles per day are
manufactured in Ludhiana alone. The city is
home to over 1500 factories making bicycles
and components , providing employment to
over 0.25 million people and today it is a
jewel in the crown of Indias industrial
cities ,according to the All India Cycle
Manufactures Association

Bicycle companies in India are now focusing

on urban markets and are looking to expand
their base in the professional and adventure
categories. The production of all kinds of
bicycles in the organized sector in 2014-15 &
2015-16 (April December) was 132.46 and
107.20 lakh. The export and import of bicycle
(HS code 8712) in 2014-15 was Rs 360.54
crore and Rs. 194.32 crore respectively
whereas in 2015-16 (April November) the
same was Rs. 176.94 crore and Rs. 129.65
crore respectively.
Productions of cycle industry in India in
2014-2015 & 2015-16
Production year
2014-15
2015-16

Production of bicycles
132.46 lakh
107.20 lakh

Export and import of bicycles in India in

2014-15 & 2015-16
year
2014-15
2015-16

Export in
(crore)
360.54
176.94

Import in
(crore)
194.32
129.65

COMPANY PROFILE

INTRODUCTION
Based in Ludhiana, the industrial hub of Punjab (INDIA),

TWIN WHEELS & COMPONENTS PVT. LTD.

Established in 1 Dec,1992. This company sells all
manufacturing of cycles parts to BHOGAL & SONS
COMPANY.
"Bhogal" has been in the Bicycle & Spares business
ever since, catering to Indian as well as the European
markets.

Our mission :
"To use our technical expertise in delivering quality
products with total commitment to ensuring customer
satisfication.

Few words about us:

Over the years, we have excelled with the introduction of
new technologies and innovative products in the bicycle
industry.
As of today, we are manufacturing Bicycle Components
& Automotive Components. Today twin wheels &
components is spread over 1000 sq. yards of area . Ours
is a group of companies engaged in the manufacture of
Bicycles Components / Accessories.
.
We have a strong presence in the domestic market of
India with approx. 1600 authorized dealers throughout the
country, selling BHOGAL products.

Our Products :
This company manufacture
pedalsets , all types of canopy.

Hubcone

complete

Works :
Twin wheels company works with Bhogal & Sons
company. Bhogal & Sons company manufacturing bicycle
and bicycle components . Bhogal & sons company export
bicycle to European markets.
Our people :
Well-educated and trained personnel form the backbone
of our organization.
Our commitment :
Our urge to excel in our field, the encouraging
support from our customers, their trust in our
products, a strong team of suppliers ever-alert to meet
the quality demands and un-flinching dedication of
our employees will always keep us thirsting for
excellence. Quality consciousness is a part of our
work culture and customer satisfaction is our overriding concern.
Swot analysis

Strengths

1. Differentiated business model to emerge as a

prominent player
2. Steady revenue growth
3. Leading position gives power to attract new
customers
4. Support sales activities by understanding customers'
businesses better

Weaknesses

Opportunities

Threats

1.low market share as compared to bigger brands

1.Restructuring initiatives for effectivenesss of the

organisation
2.Enter emerging markets.

1.Strong competition
2.Competitive advertising and distribution network of
competitors
3. Dependence on third party suppliers

ORGANISATIONAL
HIRERACHY

OLMITWERDPV

TWIN WHEELS &

COMPONENTS PVT. LTD .
RANGE OF PRODUCTS

H
N
O
C
B
U
P
S
A
E
L
Y
C
F
O
D
T
MC
Y
P
O
N
A

CHAPTER-2
OBJECTIVE OF STUDY
& RESEARCH
METHODOLOGY

ANALYSIS OF OF PROJECT
OBJECTIVE
WORKING CAPITAL
MANAGEMENT

To study and analyse working capital management at

TWIN WHEELS which includes:
Inventory management
Receivable management
Cash management
The aim is to learn how to manage working
capital needs of the organization and to learn the
different ways through which theoretical learning
is applied practically in the organization.
The project is aimed to learn and gain knowledge
of the day to day working of the organization as
to how does the different decision are taken and
on what basis.
The project will help in gaining the knowledge
of different steps of raising the short term funds
and their effective management so as to ensure
adequate availability of funds. The various
analyses will help the management to assess the

efficiency of the working capital management of

company.

Research methodology
The research methodology which is followed
to carry out this project i.e. the universe,
locale of our study, Sample selection, Data
Collection, data analysis and field experience.
As in organizations like TWIN WHEELS,

working capital constitute a major portion of

its resources, a through study of its working
capital management has been done broadly
covering: Receivables Management, Cash
Management, and Inventory Management.
SAMPLING DESIGN
Universe of study: The universe of the
study is CYCLE INDUSTRY.
Locale of study: Locale of this study is
CYCLE INDUSTRY.
SAMPLE SIZE

:15

STATISTICAL DESIGN
Since the study was quantitative in nature.
Primary data : I collect primary data
with conversation with twin wheels
accounts section department head
MR.pawan kumar (C.A.). He provided
information regarding company products
and much more. I also collect data by
interacting with 15 respondents.

 Secondary data: I also collect data by

visiting various websites :
www.academia.edu , www,bhogal.com ,
www.streetdirectory.com and etc. and
books.

Research design
Step 1 : To study the financial statements
of twin wheels.
Step 2 : Data analysis of working capital
through estimation of working capital.
Step 3 : comparison of base year data with
previous year data.

Analysis of Data
The study is qualitative in nature. The report
has been prepared after doing a qualitative
analysis of the data collected. Some bar
charts, graphs and pie charts are used to
make the data more understandable to the
reader.

Field Experience

The research was a positive and enriching

experience as it provided useful insights
about the current practices in working capital
management and the process through which
it is handled in the real world.

CHAPTER 3
ANALYSIS OF
WORKING CAPITAL
MANAGEMENT

INTRODUCTION
In financial management, two important
decisions are very vital and crucial. They
are decision regarding fixed assets/fixed
capital and decision regarding working
capital/current assets. Both are important
and a firm always analyzes their effect to
final impact upon profitability and risk.
Fixed capital refers to the
funds invested in such fixed or permanent
assets as land, building, and machinery
etc. Whereas working capital refers to the
funds locked up in materials, work in
progress, finished goods, receivables, and
cash etc.
Thus, in very simple words, working
capital may be defined as capital
invested in current assets. Here
current assets are those assets, which can
be converted into cash within a short
period of time and the cash received is
again invested into these assets. Thus, it

is constantly receiving or circulating.

Hence, working capital is also known as
circulating capital or floating capital.
CONCEPT OF WORKING

CAPITAL There are two concepts of

working capital. These are:
1. Gross working capital: (Total
Current Assets) The gross working capital,
simply called as working capital refers to
the firms investment in current assets.
Current assets are the assets, which can
be converted into cash within an
accounting year or operating cycle. Thus,
Gross working capital, is the total of all
current assets. It includes
1. Inventories (Raw materials and
Components, Work-in-Progress, Finished
Goods, Others)
2. Trade Debtors
3. Loans and Advance
4. Cash and Bank Balances
5. Bills Receivables.
6. Short-term Investment

2. Net Working Capital: (Total

Current Assets Total Current Liabilities)
Net working capital refers to the difference
between current assets and current
liabilities. Current liabilities are those
claims of outsiders, which are expected to
mature for payment within an accounting
year. Net working capital may be positive
or negative. A positive net working capital
will arise when current assets exceed
current liabilities and a negative net
working capital will arise when current
liabilities exceed current assets i.e. there
is no working capital, but there is a
working capital deficit. It includes
1. Trade Creditors.
2. Bills Payable.
3. Accrued or Outstanding Expenses.
4. Trade Advances
5. Short Term Borrowings (Commercial
Banks and Others)
6. Provisions
7. Bank Overdraft
Working Capital represents the
amount of current assets that have

not been supplied by current, short

term creditors.
CALCULATE WORKING CAPITAL
REQUIREMENT
1. OPERATING CAPITAL: The cycle
starts with the purchase of raw materials
and other resources and stores its
conversion into stock of finished goods
through work in progress with
progressive increment of labor and
service costs , conversion of finished
stock into sales, debtors and receivables
and ultimately realisation of cash and
this cycle continues again from cash to
purchases of raw material and so on.
The speed /time duration required to
complete one cycle determines the
requirement of working capital longer
the period of cycle , larger is the
requirement of working capital.

sale of finished goods

finished goods produced

operating cycle

cash received from debtors and paid to supplliers of raw material

raw material introduced into process

TWIN WHEELS & COMPONENTS

PVT.LTD.

BALANCE SHEET AS AT 31ST

MARCH ,2015

CALCUATE OPERATING CYCLE

1. Raw material holding period=Average
stock of R.M

R.M.
consumption per day
Average stock of R.M.= 315615 + 926760
=6211875
2
Average consumption of raw material
=315615+11273026926760=10661881.9
So , raw material holding period=6211875
*365
10661881.9
=21 days
2. Debtors collection period=Average
debtors
Credit
sales per day
Average debtors=8929506 =4464753
2
Debtors collection period =4464753
*365
27139832
= 60 days

3. Creditors collection period= Average

creditors
Credit
purchases per day
Average creditors = 8298385.81
=4149193
2
So , creditors collection period
=4149193 *365
12359717.9 =122 days

METHODS OF ESTIMATING
WORKING CAPITAL
REQUIREMENT
1.PERCENTAGE OF SALES METHOD
2.REGRESSION ANALYSIS METHOD

1.PERCENTAGE OF SALES
METHOD
This method of estimating working
capital requirement is based on the
assumption that the level of working

capital for any firm is directly related to

its sales value.
WORKING CAPITAL OF 2015 =
CURRENT ASSESTS CURRENT
LIABILIITIES
Rs.10417641.55 Rs.9556,633.81 =
Rs.8,61,007.74
SALES OF 2015 =Rs.27139832
*we calculate the working capital
requirement of 2016
So we estimate the sales of 2016 is
RS.300,00,000
So , sales % = 27139832
=32 %
861007.74
Estimated sales of year 2016 = Rs.
30000000
Estimate woking capital of year
2015-16
Actual
2014-15
Sales

% to
sales
2014-15
27,139,832 100

Current

10,417,641

Estimate
working
capital
40,000,0
00

assest

.55

Current 9,556,633.
liabilities 81
Working 861,007.74 32
capital

12,800,0
00

Interpretation
In this method, we find out the
estimation of working capital of year
2015-16 . we find the % of sales
through sales of 2014-15 and working
capital i.e. 32%.We estimate the sales of
year 2015-16 is Rs.40,000,000 so the
requirement of working capital for the
year 20115-16 on an estimated sales of
Rs. 40,000,000 shall be Rs.12,800,000
i.e. 32% of Rs. 40,000,000.

2.REGRESSION ANALYSIS METHOD

This method of forecasting working capital

requirement is based upon the statistical
technique of estimating or predicting the
unknown value of a dependent variable from
the known value of an independent variable.
It is the average relationship between two or
more variables i.e. sales and working capital
in terms of the original units of the data.
The relationship between sales and
working capital is represented by the
equation.
y = a +bx
y = na +bx
xy = ax
+bx2

Year

Sales (Rs.
Crore)

Working
capital
(Rs. Crore)

2013-14

27,695,840

511,211.1

2014-15

27,139,832

861,007.74

The relationship between sales and

working capital
can be represented by:
Y =a +bx
Sales
(Rs.
Crore)
(x)
2013-14 2

working xy
capital
(Rs. lac)
(y)
5
10

X2

2014-15 3

n=2

y=138 xy
=34

Year

x=5

y = na +bx
xy =ax +bx2

24

x2 =13

Putting the values in the above equations

13 =2a +5b

(i)

34 =5a +13b

(ii)

Multiplying & subtracting equations (i) & (ii)

Value of a=-1 , b=3
Now the put the values of a & b in equation y = a+bx
Y = a+ bx
Y= -1 +3*4
Y=11
Thus the estimated sales for 2015-16 are 4 core, the
amount of estimated working capital be Rs. 11 lac.

INTERPRETATION

According to this method , the sales are of two year 2014

& 2015 are 27,695,840 and 27,139,832. The working
capital of 2014 & 2015 are approx. 5 & 6 lac . so with the
help of this figure we estimate the sales of year 2016 is 11
lac.

Chapter -4

Data analysis &

interpretation

Working capital ratios

The difference between current assets and
current liabilities excluding short term bank
borrowing is called net working capital (NWC).
Net Working Capital is sometimes used as a
measure of a firms liquidity.
WORKING CAPITAL =CURRENT ASSESTS
CURRENT LIABILITIES

1.Current ratio
Current ratio is calculated by dividing current
assets by current liabilities:
Current ratio =
current assest
Current liabilities
Current assets include cash and those assets
that can be converted into cash within a year,

such as marketable securities, debtors,

inventories, loans and advances. All the
obligations maturing within a year are
included in current liabilities.
Current liabilities include creditors, bills
payable, accrued expenses, short term bank
loan, income tax liability and long-term debt
maturing in the current year.

Significance:
It indicates the availability of current
assets in rupees for every one rupee of
current liability. A ratio of greater than
one means that the firm has more current
assets than current claims against them.
In India, the conventional rule is to have a
ratio of 2:1 .
The current ratio represents the margin of
safety for the creditors. The higher the
current ratio, the greater the margin of
safety; the larger the amount of current
assets in relation to current liabilities, the

more the firms ability to meet its current

obligations.
Current ratio of 2014 = 1.113
Current ratio of 2015 =1.149
1.16
1.15
1.14
1.13
Series 3

1.12
1.11
1.1
1.09
2014

2015

For the year 2014 the ratio of current asset is

1.113 . it become satisfactory for the
company to pay off liabilities. And the ratio of
2015 is 1.149. it also become satisfactory for
the company to pay off liabilities .

2. Quick ratio
This ratio establishes the relationship
between quick or liquid assets and
current liabilities.

Quick ratio = current asset

(inventory prepaid expenses)
Current liabilities
An asset is liquid if it can be converted
into cash immediately without a loss of
value. e.g. Cash, Debtors, Bills
receivable and marketable securities.
Inventories are considered to be less
liquid as it requires time for realizing into
cash, their value also has tendency to
fluctuate.

Significance

Generally a quick ratio of 1:1 is considered to

represent a satisfactory current financial
condition. This test is more significant as
compare to current ratio to fulfill the firms
obligations.

1.2
1
0.8
0.6

Series 3

0.4
0.2
0
2014

2015

Interpretation
For the year 2014 the ratio of quick asset
is .97 .it is quite satisfactory to pay off
liabilities. And the year 2015 the quick
asset ratio is also .97 .

3.Inventory turnover ratio

Inventory turnover is calculated by
dividing the cost of goods sold by the
average inventory. This ratio indicates the
efficiency of the firm in producing and
selling its product, by indicating the

number of times the inventory has been

converted into sales during the period. If
cost of goods sold is not given then net
sales can be used.
Inventory turnover ratio = Net sales
Average
inventory
Inventory turnover ratio of 2014 =74
times
Inventory turnover ratio of 2015 =62
times

Significance

1. This ratio indicates the efficiency of the

firm with which it manages and utilises its
assets, the speed with which the assets
are converted into sales.
2. This comes out as a good sign of the
efficiency of the management in converting
its assets into sales. The ratio also implies
continuous improvement in the operations of
the company.

76
74
72
70
68
66

Series 3

64
62
60
58
56
2014

2015

Interpretation
For the year 2014 the inventory turnover ratio
is 74 times and the year 2015 the ratio is 62
times. The ratio of 2015 is less than 2014. So
company should increase this ratio so that
more sales are made.

3.Debtors turnover ratio

A Firm sells goods for cash and credit. Credit
is used as a marketing tool by a no. of
companies. When the firm extends credits to
its customers, debtors (accounts receivables)
are created. Debtors are convertible into cash

over a short period of time, therefore included

in the current assets. Debtors turnover is
found by dividing credit sales by average
debtors. Average debtors are nothing but the
average of the opening and closing balances
of debtors.
Debtors turnover ratio = Net credit sales
Average trade
debtors
Debtors turnover ratio of 2014 = 3.67 times
Debtors turnover ratio of 2015 = 3 times

Significance
Debtors Turnover indicates the number of
times debtors turnover each year.
Generally, the higher the value of debtors
turnover, the more efficient the
management of the company.

4
3.5
3
2.5
2

Series 3

1.5
1
0.5
0
2014

2015

Interpretation
The debtor turnover ratio of 2015 is 3
times is almost similar to 2014 ratio. So the
ratio of company is satisfactory because
higher the ratio , the more efficient the
company.

4. Creditors turnover ratio

Creditors turnover ratio indicates the
number of times sundry creditors have
been paid during a year. It is calculated
to judge the requirements of cash for

paying sundry creditors. It is calculated

by dividing the net credit purchases by
average creditors.
Creditors turnover ratio = net credit
purchases
Average
trade creditors
Creditors turnover ratio of 2014 =1.5
times
Creditors turnover ratio of 2015 =1.3
times

Significance
A high creditors turnover ratio or a
lower credit period ratio signifies that
the creditors are being paid promptly.
This situation enhances the credit
worthiness of the company. However a
very favorable ratio to this effect also
shows that the business is not taking the
full advantage of the credit facilities
allowed by the creditors. We can

interpret this ratio in exactly the same

way as the debtors turnover ratio.
1.52
1.5
1.48
1.46
1.44
Series 3

1.42
1.4
1.38
1.36
1.34
2014

2015

The ratio of creditors turnover ratio of

2014 is 1.3 times. The ratio of 2015 is
1.5 times. The ratio of 2015 is more than
2014 so it is better for company.

5. Working capital ratio

It shows the relationship between the
working capital and sales.
Working capital ratio = sales
Net working
capital

The firm should maintain a steady

working capital position. It should have
adequate working capital to run its
business operations. Both excessive and
inadequate working capital positions are
dangerous from a firms point of view
excessive working capital means holding
costs and idle funds which earns no
profits for the firms. Paucity of working
capital not only impairs firms
profitability but also results in production
inefficiencies and interruptions and also
sales disruptions.
Working capital turnover ratio of 2014 =
67 times
Working capital turnover ratio of 2015 =
31 times

80
70
60
50
40

Series 3

30
20
10
0
2014

2015

The working capital ratio of 2014 is 67

times and the ratio of 2015 is 31 times.
Too much ratio is not satisfactory for the
company. So the ratio of 2015 is quite
satisfactory because there is not too
much to utilize the working capital of the
company.

6. Fixed asset to proprietors

funds
The ratio establishes the relationship
between fixed asset and shareholders
funds, i.e. share capital plus reserve ,

surpluses and retained earnings. The

ratio can be calculated as follows:
Fixed asset to net worth ratio =
fixed asset (after depreciation)
shareholders funds

Significance
1. The ratio of fixed asset to net worth

2.

3.

4.

indicates the extent to which

shareholders funds are sunk into the
fixed asset.
Generally , the purchase of fixed asset
should be financed by shareholders
equity including the fixed asset ,
surpluses and retained earnings.
If the ratio is less than 100% , it
implies that owners funds are more
than total fixed asset and a part of the
working capital is provided by the
shareholders.
When the ratio is more than 100% , it
implies that owners funds are not
sufficient to finance the fixed asset
and the firm has to depend upon
outsiders to finance the fixed asset.

Fixed asset to proprietors funds of

2014 =113%
Fixed asset to proprietors funds of
2015 = 112%
113.20%
113.00%
112.80%
112.60%
112.40%
Series 3

112.20%
112.00%
111.80%
111.60%
111.40%
2014

2015

Interpretation
The fixed asset to proprietors funds
ratio is more than 100% in both year .
so the owners capital is not sufficient
to finance the fixed asset and the firm
has to depend upon outsiders funds.

7. Current asset to proprietors

funds

The ratio indicates the extent to which

proprietors funds are invested in current
asset . there is no rule of thumb for this
ratio and depending upon the nature of
the business there may be different ratio
for different firms.
Current asset to proprietors funds
=
Current asset
*100
Shareholders funds
Ratio of 2014 = 329%
Ratio of 2015 = 283%
340%
330%
320%
310%
300%
Series 3

290%
280%
270%
260%
250%
2014

2015

Interpretation
The ratio of current asset to
proprietors funds of 2014 is 330% and
the 2015 is 283% . so the owners
capital invested in current asset is
given above. It depends upon the
nature of company which amount of
owners capital invested in current
asset.

8. Equity ratio
This ratio establishes the relationship
between shareholders funds to total
assets of the firm. This ratio is an
important ratio for determining long
term solvency of the firm . The
shareholders funds are equity share
capital ,preference share capital ,
undistributed profits , reserve and
surpluses.
Equity ratio = shareholders funds
Total asset
Ratio of 2014 = 22%
Ratio of 2015 =25%

26%
25%
25%
24%
24%
23%

Series 3

23%
22%
22%
21%
21%
2014

2015

Interpretation
In this company , the equity ratio of
2014 & 2015 are 22% and 25%. Higher
the ratio , better is the solvency of the
company. So the ratio of 2015 is more
than 2014. So company position
improves in 2015.

9. Capital gearing ratio

The term capital gearing ratio is used to

describe the relationship between equity
share capital including reserves and
surpluses to preference share capital
and other fixed interest bearing loans.
If preference share capital and other
fixed interest bearing loans exceed the
equity share capital including reserves ,
the firm is said to be highly geared.
The firm is said to be low gear if
preference share capital and other fixed
interest bearing loans are less than equity
capital and reserves.
Capital gearing ratio =
Equity share capital + reserve &
surpluses
Preference share capital + long term
bearing fixed interest
Ratio of 2014 = 4:1
Ratio of 2015 = 3:1

capital gearing ratio

2014
2015

Interpretation
The higher capital gearing ratio is not
good for company . So the capital gearing
ratio in both year is low so company has
satisfactory position.

10.

Return on equity capital

In real sense , ordinarily shareholders

are the real owners of the company . The
rate of dividend varies with the
availability of profits in case of ordinary
shares only. Thus , ordinary shareholders
are more interested in the profitability of

a company and the performance of a

company should be judged on the basis
of return on equity capital of the
company.
Return on equity capital =
Net profit after tax preference
dividend
Equity share capital (paid up)
Return on equity capital of 2014 = 127%
Return on equity capital of 2015 = 143%

145%
140%
135%
130%

Series 3

125%
120%
115%
2014

2015

Interpretation

This ratio is more meaningful to the

equity shareholders who are interested
to know profits earned by the company
and those profits which can be made
available to pay dividend to them .
higher the ratio better it is.

CHAPTER -5
LIMITATIONS ,
SUGGESTIONS

Limitations of
working capital

1.Excessive working capital means ideal funds which earn

no profit for the firm and business cannot earn the
required rate of return on its investments.
2.

Redundant working capital leads to unnecessary

purchasing and accumulation of inventories.

3.

Excessive working capital implies excessive debtors

and defective credit policy which causes higher
incidence of bad debts.

4.

It may reduce the overall efficiency of the business.

5.

If a firm is having excessive working capital then the

relations with banks and other financial institution may
not be maintained.

6.

Due to lower rate of return on investments, the values

of shares may also fall.

7.

The redundant working

speculative transactions.

capital

gives

rise

LIMITATIONS OF RATIO ANALYSIS

The basic limitation of ratio
analysis is that it may be
diff icult to fi nd a basis for
making the comparison .

to

This project has been completed with annual

reports; it just constitutes one part of data
collection. There were limitations for
primary data collection because of
confidentiality.
This project is based on two year annual
reports . conclusions and recommendations
are based on such limited data.

SUGGESTIONS
Working capital of the company has increasing
every year. Profit also increasing every year this is
good sign for the company. It has to maintain it
further, to run the business long term.

 The Current and quick ratios are almost up to the

standard requirement.
The company has sufficient working capital
and has better liquidity position. By efficient
utilizing this short-term capital, then it
should increase the turnover.
The company should take precautionary mean
s areas for investing and collecting funds from
receivables and to reduce the bad debts.

The company has sufficient working capit

al and has better liquidity position. By

efficient utilizing this short-term capital, then it
should increase the turnover.

Chapter -6
Bibliography

SITES
www.academia.edu
www.streetdirectory.com
www.allprojectsreports.com
www.bhogal.com
www.wikipedia.org

BOOKS
Management accounting &
business finance- SHASHI K. GUPTA
& Dr. R.K. SHARMA

QUESTIONNAIRE

1.To what extent does your company actively

manage working capital?
Not At All ------Neither/Nor ----Very High ----Dont know ------2.To what extent is working capital used as a
performance
measurement in your
companys internal reports?
Not At All -----Neither/Nor -----High
-----Dont know ------

Very

3.To what extent is your company currently

working to optimize the level of working capital?
Not At All ----Very High-----

Neither/Nor -----Dont know -----

4. To what extent do you consider your companys

current level of working capital to be optimized?
Not At All ----Very High-----

Neither/Nor -----Dont know -----

5. What key ratios (KPIs) does your company use to

measure working capital? (choose all that apply)
a. Inventory ----b. Receivables ----c.
Payables -----d. Cash Conversion Cycle -----e. Current ratio ----d. Other (please specify)
-----6. . To what extent do you consider your company's
current Cash Conversion Cycle (CCC) to be at an
optimal level?
Not At All ----Very High-----

Neither/Nor -----Dont know -----

7. Have you recently noticed an increase in

working capital?
Yes -----know -------

No ------

Dont

8. What is your company's main industry?

a. IT & Telecom ---------c. Manufacturing ----Other (please specify) ----

b. Wholesale
d.