22-06-2012, 03:48 PM
working capital management
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The Birth
Registered on 16th Sept 1935 with an authorized capital of Rs 10.00 lakh and commenced business on 8th Feb 1936.
The Childhood
Known as a common man's bank since inception, its initial help to small units has given birth to many of today's industrial houses. After nationalization in 1969, the bank expanded rapidly. It now has 1276 branches (as of 31st March 2004) all over India. The Bank has the largest network of branches by any Public sector bank in the state of Maharashtra.
The Adult
The bank has fine tuned its services to cater to the needs of the common man and incorporated the latest technology in banking offering a variety of services.
Banks Philosophy
Technology with personal touch.
The 3m’s symbolizing
• Mobilisation of Money
• Modernisation of Methods and
• Motivation of Staff.
Banks Aims
The bank wishes to cater to all types of needs of the entire family, in the whole country. Its dream is "One Family, One Bank, Maharashtra Bank".
The Autonomy
The Bank attained autonomous status in 1998. It helps in giving more and more services with simplified procedures without intervention of Government.
Banks Social Aspect
The bank excels in Social Banking, overlooking the profit aspect; it has a good share of Priority sector lending having 46% of its branches in rural areas.
Other Attributes
Bank is the convener of State level Bankers committee
Bank has signed a MoU with EXIM bank for co-financing of project exports
Bank offers Depository services and Demat facilities in Mumbai.
Bank has captured 95.25% of its total business through computerization.
Banks Future Plans
• Opening of 40 new branches at the most strategic business centers.
• Circle offices at Pune, Mumbai, Delhi, Banglore and Nagpur.
• 255 additional ATMs will be installed.
• To cross business level of around Rs 46000 crore.
• To increase customer base by 10%.
• To increase finance to Self Help Groups in rural areas.
• To substantially increase the Savings Bank Deposits.
• Bank is planning setting up of overseas representative offices in New York , London, Singapore & Dubai.
WORKING CAPITAL MANAGEMENT
Concept of working capital
There are two concepts of working capital:
1.Gross working capital
It refers to the firm’s investment in total current assets or circulating assets.
2.Net working capital (defined in two ways)
(i) It is the excess of current assets over current liabilities.
(ii) It is that portion of a firm’s current assets which is financed by long-term funds.
NEED FOR WORKING CAPITAL:-
The basic objective of financial management is to maximize shareholders wealth. This is possible only when the company earns sufficient profit. The amount of such profit largely depends upon the magnitude of sales.
However, sales do not convert into cash instantaneously. There is always time gap between the sale of goods and receipt of cash.
Working capital is required for this period in order to sustain the sales activity.