06-05-2014, 02:39 PM
ANALYSIS OF WORKING CAPITAL MANAGEMENT OF COSMIC STRUCTURE LTD
WORKING CAPITAL MANAGEMENT.docx (Size: 925.12 KB / Downloads: 13)
Executive Summary
Cosmic Structure Ltd is a very well famous builder company in Indian real estate sector having a worth of more than 3000 crore. It has 6 branches all over National Capital Region with wide variety of luxurious projects mainly for middle section income group of the society. It has broadened its business abroad as well.
The major purpose of the study is to analyze the working capital management and its relationship with the profitability of Cosmic Structure Ltd by considering the annual report of two years. The financial statement explains the trend analyzes and the ratio analyzes along with the cash conversion cycle.
Working capital is one of the most difficult financial concepts to understand for the business in real estate sector. In fact, working capital means different in different business. Working capital is the amount by which current assets exceed current liabilities. It involves the relationship between a firm’s short term assets and its short term liabilities.
Funds needed for short term needs for the purpose like payment of wages and other day to day expenses are known as working capital. The purpose of working capital management is to ensure that the firm is able to continue its operation and that it has sufficient cash flow to satisfy both maturing short term debt and upcoming operational expenses. The primary objective of the working capital is the management of inventory, receivables, and payables.
Objectives:
The prime objective of the study is to analysis the working capital management of Cosmic Structure LTD which is a real estate company in order to evaluate the performance of the company.
The secondary objectives are:
To study the working capital leverage of Cosmic Structure LTD
To study the effect of different components of cash conversion cycle on the profitability of the company.
Indian Real Estate
Commercial real estate sector is in boom in India. In the last fifteen years, post liberalization of the economy, Indian real estate business has taken an upturn and is expected to grow from the current UDS14 billion to a UDS 102 billion in the next 1o years. This growth can be attributed to favorable demographics, increasing purchasing power existence of customer friendly banks and housing finance companies, professionalism in real estate and favorable reforms initiated by the government to attract global investors.
Cosmic Structure LTD
Cosmic Structures Limited is the real estate division of the prestigious Cosmic Group. It’s an emergent Real Estate Developing company in the Indian realty space with 25 years of satisfactory deliveries. The company’s passion and aim is to be a respectable and trustworthy builder & developer in the competitive world of real estate in India and abroad.
With diversified functioning areas in Residential, Commercial, Retail, IT Parks, Hospitality and Education sector, Cosmic has created niche and has won the trust of satisfied customers, associates, alliances and investors alike. During its committed dedication, loyalty and commitment towards its clientele, the organization has certainly gained prominence. Its knowledge and profound acquaintance in the industry has facilitated the company to brain some handy commercial and residential buildings. The spotlight is in the direction to meet the mounting requirements of the customers. The organization has made an effort to make available good quality products to each customer and endlessly improve on the quality of products.