04-07-2014, 12:03 PM
SUMMER TRAINING REPORT ON MANAGEMENT OF WORKING CAPITAL
SUMMER TRAINING REPORT.docx (Size: 431.74 KB / Downloads: 26)
INTRODUCTION
Tristar Infrastructure Group provides specialist services for the construction, repair and refurbishment of concrete and steel plant and infrastructure assets.
Our energetic and motivated team is hardworking, innovative and experienced. Typical projects undertaken have included work on Buildings, Dams, tunnels, pipelines, containments, mining and process plant, rail rolling stock, storage tanks. Projects have taken place in a range of environments and conditions including confined spaces and in the presence of dangerous goods.
We believe in the value of delivering risk managed highly professional and cost effective services within verifiable standards of, safety, quality and environmental responsibility.
TriStar Alliance Infrastructure Group operates Australia wide and provides services including:
o Repairs to Steel Structures & Tankage
o Concrete Construction and Repairs
o Mechanical Servicing and Repairs
o Support Services
SERVICES
Tristar Global Infrastructure Pvt. Ltd. is committed to consistently achieve client satisfaction by providing an extreme level of services including design on turnkey basis and assuring timely completion of projects within budget and with excellent quality
DMRC Underground Stations
Waterproofing with PVC membrane at DMRC stations.• Kingsway Camp • Malviya Nagar
• Nehru Stadium • Jor Bagh
• Jangpura • NDLS
• Khan Market • AIIMS
• Lajpat Nagar • INA
Delhi International Airport Limited
The project involved the treatment of expansion joints with fire barrier, waterproofing and modular expansion joints. The project has expansion joints of about 15000 mts
MEANING AND DEFINITION OF WORKING CAPITAL
Working capital is the amount of funds which a company has to finance its day to day operations it can be regards as the part of capitals which the capitals is basically classified into fixed and working.
Fixed capital is normally invested in fixed assets and working capital in current assets. It is used in day to day operations. These are the funds that are invested in current assets. The form of these current assets keeps on changing. Ex: Raw material to work in progress to finished product. , so it is also called circulating capital.
Definition of working capital
working capital means current assets of company that are changed in the ordinary course of business from one form to another, ex: from cash to inventories, inventories to receivables, receivables into cash” “ Working capital is the amount of funds necessary to the cost of operating the enterprise. Operating expenses involve investment in current assets, payment towards overhead and expenses. Investment made in these heads is classified as working capital”.
“ The sum of the current assets is the working capital of the business
Operating cycle concept
Operating Cycle or Working Capital Cycle indicates the length of time between affirms paying for raw materials entering into finished stock and receiving cash on the sales of such Finished Stock.
This operating cycle differs from firm to firm. Longer the operating cycle greater will be the amount of Working Capital required and vice versa. Thus it plays an important role in determining the Working Capital needs of a firm
On the basis of concept
Working capital on this basis of concept is classified into
A) Gross working capital: It refers to total investment made in current asset. Current assets are the asset which can be converted into cash within a short period of an accounting year. Current assets include cash, debtors, bills receivables and short term securities etc.
B) Net working capital: It is 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 and include creditors, bills payable and outstanding expenses. Net working capital can be positive or negative. Positive net working capital will arise when current asset exceeds current liabilities. A negative net working capital occurs when current liabilities are in excess of current assets.
DETERMINANTS OF WORKING CAPITAL
Requirement of working capital differs from one firm to other. This is because of business conditions and policies of conducting business differ. Working capital required by each from is determined by following factors.
1) Nature of business: important factor that determines requirement of working capital is nature of business a firm is undertaking. Firm that are engaged in production and marketing need more working capital compared to the firm that are in trading or service oriented business. This is because manufacturing units need more current assets compared to service oriented units.
2) Size of business: Size of the business obviously determines the requirement of the working capital bigger the size more is the requirement of the working capital. Larger the scale of operations, larger the investment required in current assets
SCOPE OF THE STUDY
The scope of the study is identified after and during the study is conducted. The main scope of the study was to put into practical the theoretical aspect of the study into real life work experience. The study of working capital is based on tools changes in working capital. Further the study is based on last 5 years Annual Reports of Tristar Global Infrastructure Pvt. Ltd.
IMPORTANCE OF WORKING CAPITAL
Even though the skills for maintaining the working capital are somewhat unique, the goals are the same-viz. to make an efficient use of funds for minimizing the risk of loss to attain profit objectives.
Firstly, the adequate of working capital contributes a lot in raising the credit-standing of a corporation in terms of favorable rates of interest on bank loan, better terms on goods purchased, reduced cost of production on account of the receipt of cash discounts, etc.
Secondly, a company with sufficient working capital is always in a position to take the advantage of any favorable opportunity either to purchase raw materials or to execute a special order or to wait for better market position.
In the third place, the ability to meet all reasonable demands for cash without inordinate delay is a great psychological factor to improve the all rounds efficiency of the business.
Lastly, during slump the demand for working capital, instead of coming down, shoots up. A good amount of working capital is locked up in the inventories and book debts. Concerns having ample resources can tide over that period of depression.
Thus, working capital is regarded as one of the conditioning factors in the long run operations of the firm, which is often inclined to treat it as an issue of short run analysis and decision making
METHODALOGY
INTRODUCTION
Research methodology is a way to systematically solve the research problem. It May be understood as a science of studying now research is done systematically. In that various steps, those are generally adopted by a researcher in studying his problem along with the logic behind them.
“The procedures by which researcher go about their work of describing, explaining and predicting phenomenon are called methodology”.
DATA ANALYSIS & INTERPRETATION
INTERPRETATION
In the above table, it is seen that during the year 2005-06 and 2006-07 there was a net increase in working capital of Rs 368085.00. It indicates an adequate working capital in Bahety chemicals & minerals pvt ltd.,
This is because of
1. Increase current assets such as Sundry debtors by Rs 762571.00, other current assets by Rs 14458.00. And decrease in Inventories by Rs 468850.00, Cash & Bank balance by Rs 9925.00, Loans and Advances by Rs 6382.00.
2. Increase in current liabilities such as in Sundry creditors by Rs 67320.00 and decrease in Provisions by Rs 143533.00.
CONCLUSIONS
The study on working capital management conducted in TRISTAR GLOBAL INFRASTRUCTURE PVT.LTD. to analyze the financial position of the company. The company’s financial position is analyzed by using the tool of annual reports from 2009-10 to 2011-12.
The financial status of TRISTAR GLOBAL INFRASTRUCTURE PVT.LTD. is good.
In the last year the inventory turnover has increased, this is good sign for the company.
The company’s liquidity position is very good With regard to the investments in current assets there are adequate funds invested in it. Care should be taken by the company not to make further investments in current assets, as it would block the funds, which could otherwise be effectively utilized for some productive purpose. On the whole, the company is moving forward with excellent management