10-12-2012, 06:14 PM
INDIAN SUGAR INDUSTRY
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INTRODUCTION TO THE SUGAR INDUSTRY
India is 1st major sugar producing country during the year 2001 – 2002 by producing 1987 and Brazil stood 1st in sugar production during 2002 – 2003 by producing 23.65 million ton of sugar followed by India producing 21.90 million ton sugar in the world using sugar cane as a raw material. There are 122 countries produced sugar with total quantity of 148.91 million tones in the world during 2002 – 2003. Using sugar cane & sugar beet as a raw material. The major sugar producing countries are Brazil, India, China, Thailand, Australia, Mexico, France & Germany.
Sugar industries occupies an important place among organized industries in India. It ranks 3rd largest industry in terms of its net value added by manufacture and employees. Nearly 325 lakhs workers besides creating extensive indirect employment for 25 million cultivators of sugar cane with 4.7 million sugar cane grower members. The various agencies of distributive trade & through subsidiary. Industries such as confectionary ice cream, cold drinks etc. It is also an important source of excise duty for central government excise duty and sugar cane purchase tax to state government. Central government has collected Rs. 395 crores during the year 2002 – 2003 by way of duties and taxes.
Progress In The Pre – Independence Period.
The beginning of the co-operative movement and establishment of the first sugar factory in India were contemporaneous. Both had its beginning in 1904. The co-operative societies act was passed in India in 1904 and the first vacuum pan process sugar plant was set up at Sarn in Marhowarah in Bihar. However the co-operative movement made its inroad into the sugar sector.
Sugar is controlled commodity under essential commodities act 10% of production of factory is to be sold to Govt. at levy price determined by the Govt. & 90% production is to be sold in the free market. The Govt. of India controls the distribution of sugar in market for public by releasing free and levy sugar quota monthly.
IMPORTANCE OF THE STUDY:
This study will help the organization to manage their current assets, current liabilities and understand the inter-relationship that exists between them. It will help the company to determine the satisfactory level of working capital that should be maintain in order to have a balance between liquidity and profitability.
SCOPE :
There is wide scope for the tools of financial management as it is helpful for the firm to evaluate the performance in the light of their success. The present study deals with “ working capital management” in the Bhima Shankar sugar factory. The study is restricted to the 5 years (2004-2005 to 2007-2008).
The changes in working capital are studied for all above years. Current ratio, liquid ratio, debtor’s turnover ratio and stock turnover ratio, working capital turnover ratio are calculated to find out liquidity position of the company. This analysis helped to find out management skills in managing current assets and current liabilities.
LIMITATIONS
1] It is difficult to decide the proper basis for comparison of competitors.
2] The ratios are calculated from past financial statements so it will not
show the current position of the organization.
METHODOLOGY
Working capital management is related to all financial figures. The study was conducted at Bhima shankar sahakari sakhar karkhana limited Mohal, Solapur. The study was descriptive in nature so an attempt was made to evaluate the performance of the company with help of liquid ratios and working capital turnover ratio. Only secondary data has been collected for the purpose of the study. The secondary data consists of extract of financial statement from 2000-2001 to 2004-2005.