WORKING CAPITAL MANAGEMENT

A Project Submitted to

University of Mumbai for partial completion of the degree of

Master in Commerce

Under the Faculty of Commerce

BY

BHAVIN NARESH MAMTORA

Under the Guidance of

MISS. SHRADDHA SHUKLA

K. P. B. HINDUJA COLLEGE OF COMMERCE

NOVEMBER, 2019

i
 WORKING CAPITAL MANAGEMENT

A Project Submitted to

University of Mumbai for partial completion of the degree of

Master in Commerce

Under the Faculty of Commerce

BY

BHAVIN NARESH MAMTORA

Under the Guidance of

MISS. SHRADDHA SHUKLA

K. P. B. HINDUJA COLLEGE OF COMMERCE

NOVEMBER, 2019

ii
 INDEX

Chapter. No Title of the chapter Page No

1 Introduction
1.1 Introduction of a Company
1.2 Meaning & Definition
1.3 Types of Ratio
1.4 Types of Cash Payment
1.5 Research Methodology

2 Review of Literature

3 Working Capital Management

3.1 Feature of Capital
3.2 Forms of Capital
3.3 Types of Working Capital
3.4 Components of Working Capital
3.5 History of Industry
3.6 Profile of Company
3.7 Vision, Mission And Goals
3.8 Objectives
3.9 Products And Services
3.10 Department Study
3.11 Balance sheet of Company

4 Data Analysis, Interpretation And Presentation

4.1 Ratio Analysis
4.2 Pie Chart, Survey Analysis

5 Suggestion And Conclusion

Suggestion
Bibliography

iii
 K. P. B. HINDUJA COLLEGE OF COMMERCE

(Affiliated to University of Mumbai)

Mumbai – Maharashtra

2019-2020

Certificate

This is to certify that Mr. Bhavin N. Mamtora has worked and duly completed his
Project Work for the degree of Master in Commerce under the Faculty of Commerce

iv
in the subject of Accountancy & Finance and his project is entitled, “Working Capital
Management” under my supervision. I further certify that the entire work has been
done by the learner under my guidance and that no part of it has been submitted
previously for any Degree or Diploma of any University.

It is his own work and facts reported by his personal findings and investigations.

Name and Signature of

Guiding Teacher

Date of submission

ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Miss. Minu Madlani for providing the necessary
facilities required for completion of this project.
v
I take this opportunity to thank our Coordinator Prof. Jitendra K. Aherkar for his moral
support and guidance.

I would also like to express my sincere gratitude towards my project guide Miss.
Shraddha Shukla whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in
the completion of the project especially my Parents and Peers who supported me
throughout my project.

vi
 DECLARATION

I the undersigned Mr. Bhavin N. Mamtora here by, declare that the work embodied in this
Project work titled “Working Capital Management” forms my own contribution to the
research work carried out under the guidance of Miss. Shraddha Shukla is a result of my
own research work and has not been previously submitted to any other University for any
other Degree / Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of Learner

Certified by,

Name & Signature of the Guiding Teacher

7
 EXECUTIVE SUMMARY

TITLE OF THE PROJECT

“WORKING CAPITAL MANAGEMENT”

Organization: SHREE NEW SAI TOURS & TRAVELS PRIVATE LIMITED

A travel agency is a private retailer or public service that provides travel and tourism related services to

the public on behalf of suppliers such as activities, airlines car rental cruise lines, hotels, railways, travel
insurance, and package tours. In addition to dealing with ordinary tourists, most travel agencies have a
separate department devoted to making travel arrangements for business travelers; some travel agencies
specialize in commercial and business travel only. There are also travel agencies that serve as general sales
agents for foreign travel companies, allowing them to have offices in countries other than where
their headquarters are located. A travel agency's main function is to act as an agent, selling travel products
and services on behalf of a supplier. Consequently, unlike other retail businesses, they do not keep a stock in
hand, unless they have pre-booked hotel rooms and/or cabins on a cruise ship for a group travel event such as
a wedding, honeymoon, or a group event. A package holiday or a ticket is not purchased from a supplier
unless a customer requests that purchase. The holiday or ticket is supplied to the agency at a discount.
The profit is therefore the difference between the advertised price which the customer pays and the
discounted price at which it is supplied to the agent. This is known as the commission. In many countries, all
individuals or companies that sell tickets are required to be licensed as a travel agent.

Shree New Sai Tours & Travels Private Limited is situated at Laxmi Nagar New Link Road, Goregaon (w)
Mumbai; state – Maharashtra. Shree New Sai Travels Pvt. Ltd is a medium scale of Tours & Travels services
providing company. This company was incorporated in the year 2002. Shree New Sai Travels Pvt. Ltd was
set up in the year of 2001 April. The Registrations Number is U63040 MH 2002 PTC 133094. The registered
office of the company will be situated in the state of Maharashtra i.e. within the jurisdiction of registrar of
companies at Mumbai. Shree New Sai Tours & Travels company. I have undertaken by study in area of
working capital in order to get the basic understanding of information the tour & Traveling of the company.

8
 CHAPTER 1

INTRODUCTION OF WORKING CAPITAL MANAGEMENT

1.1 INTRODUCTION OF COMPANY

Working capital also knows net working capital or NWC, is a financial metric which represents operating activity
available to a business. Along with fixed assets such as plant and equipment, working capital is considered a
part of operating capital. It is calculated current assets minus current liability. If current assets are less than
current liabilities, an entity has a working capital deficiency, also called a working capital deficit.

Working Capital = Current Assets − Current Liabilities A company can be endowed with assets and
profitability but short or liquidity if its assets cannot readily be converted into cash. Positive working capital
is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both
maturing short-term debt and upcoming operational expenses. The management of working capital involves
managing inventories, accounts receivable and payable and cash.

For the successful working of any business organization, fixed and current assets play a vital role.
Management of working capital is essential as it has a direct impact on profitability and liquidity. An attempt
has been made in this paper to study the working capital components and the impact of working capital
management on profitability of Hindalco Industries Limited. The paper also makes an attempt to study the
correlation between liquidity, profitability and Profit Before Tax (PBT) of Hindalco. The study is based on
secondary data collected from annual reports of Hindalco for the study period1990 to 2007. The ratio
analysis, percentage method and coefficient of correlation have been used to analyze the data. Multiple
regressions were used to check the significant impact on the profitability of Hindalco. Introduction A
successful commercial organization needs two types of assets, viz., fixed assets and current assets. Fixed
assets include—land, building, plant, machinery, furniture, etc. These are not only purchased for the purpose
of sale, but also for the purpose of earning profit for many years. Current assets include, raw materials, work-

9
in-progress, finished goods, sundry debtors, bills receivables, cash, bank balance, etc. These are purchased
for the purpose of production and sales, like raw material into semi finished products, semi finished products
into finished products, finished products into debtors and debtors transferred into cash or bills receivables.
The fixed assets are used in increasing production of an organization and the current assets are used in
using the fixed assets for day to day working. The management of this working capital is known as working
capital management. The term working capital refers to the amount of capital which is readily available to an
organization. Management of working capital deals Travel industry has witnessed enormous growth in recent
years. Travel agents are old news. Websites are the new way of booking travel. Imagine waking up in the
morning, drinking your coffee and logging onto your website account to check your earnings from the
comfort of your home. It is an opportunity to get established on the web with a high end Travel Business
setup and offer variety of services. Browser hits one button and instantly the site searches through the top
flight networks to bring people the lowest priced options and find the guaranteed best flight for their trip.
Give your customers an up-to-date pricing & availability information and save them the hassle of inquiring
for availability. Your user will always get the best price irrespective of the search being domestic or
international one. Compares hotels rates and lists prices directly on the site. Give customers a large selection
of hotels to choose from, check availability during the exact travel dates specified by the browser. Compares
hotels rates and lists prices directly on the site. Hotel images are showcased directly on the site with hotel
information for customers to make an informative decision base on their desired preferences. Extensive
collaborations in the hospitality and tourism sector that guarantees amazing travel packages at equally
exciting rates, value for money packages and personalized itineraries. Extensive collaborations in the
hospitality and tourism sector that guarantees amazing travel packages at equally exciting rates, value for
money packages and personalized itineraries. A strong national and international network which ensures that
your browser gets the best service at the best price always. More than 200 domestic and international
itineraries. Littleton area first began to be settled in 1862, there were to principal forms of transportation
available: walking and either riding or being pulled by a horse. There were no roads to speak of, only old
Indian trails which had been widened and packed hard by the increased usage of white men. This did not
change for nearly a decade. As farfetched as it may sound, the early South Platte valley settlements had a
legacy of steamboat travel. The Rocky Mountain News regularly published the arrivals and departures of
various river boats, and saw to it that major east coast newspapers reprinted them. Was the South Platte River
deeper then? No. This was just one of many schemes dreamed up by News editor William Byers to boost
settlement in Colorado Territory -- by the time greenhorns discovered the deception, they were in St. Louis,
more than half-way here. The only "real" traffic on the South Platte, then or since, were shallow-draft barges
and canoes carrying beaver and buffalo hides to Missouri markets. Steam-powered transportation did reach

10
Littleton in 1871, when tracks of the Denver and Rio Grande Railroad were completed to a siding at Richard
little’s farm. On August 24, the engine Montezuma brought the Mayor of Denver and assorted dignitaries to
the end of the line. The striking beauty of the area elicited such enthusiasm that the railroad added a public
excursion.

Working capital management refers to a company's managerial accounting strategy designed to

monitor and utilize the two components of working capital, current assets and current liabilities, to ensure the
most financially efficient operation of the company. The primary purpose of working capital management is
to make sure the company always maintains sufficient cash flow to meet its short-term operating costs and
short-term debt obligations.
Working capital management commonly involves monitoring cash flow, assets, and liabilities through
the ratio analysis of key elements of operating expenses, including the working capital ratio, collection ratio,
and the inventory turnover ratio. Efficient working capital management helps maintain the smooth operation
of the operating cycle (the minimum amount of time required to convert net current assets and liabilities into
cash) and can also help to improve the company's earnings and profitability. Management of working capital
includes inventory management and management of accounts receivables and accounts payables.  The main
objectives of working capital management include maintaining the working capital operating cycle and
ensuring its ordered operation, minimizing the cost of capital spent on the working capital, and maximizing
the return on current asset investments.  
The working capital ratio, calculated as current assets divided by current liabilities, is considered a key
indicator of a company's fundamental financial health since it indicates the company's ability to successfully
meet all of its short-term financial obligations. Although numbers vary by industry, a working capital ratio
below 1.0 is generally indicative of a company having trouble meeting its short-term obligations. Working
capital ratios of 1.2 to 2.0 are considered desirable, but a ratio higher than 2.0 may indicate a company is not
effectively using its assets to increase revenues.
The collection ratio, also known as the average collection period ratio, is a principal measure of how
efficiently a company manages its accounts receivables. The collection ratio is calculated as the product of
the number of days in an accounting period multiplied by the average amount of outstanding accounts
receivables divided by the total amount of net credit sales during the accounting period. The collection ratio
calculation provides the average number of days it takes a company to receive payment. The lower a
company's collection ratio, the more efficient its cash flow.
The final element of working capital management is inventory management. To operate with maximum
efficiency and maintain a comfortably high level of working capital, a company must carefully balance
sufficient inventory on hand to meet customers' needs while avoiding unnecessary inventory that ties up
11
working capital for a long period before it is converted into cash. Companies typically measure how
efficiently that balance is maintained by monitoring the inventory turnover ratio. The inventory turnover
calculated as revenues divided by inventory cost reveals how rapidly a company's inventory is being sold and
replenished. A relatively low ratio compared to industry peers indicates inventory levels are excessively high,
while a relatively high ratio indicates the efficiency of inventory ordering can be improved.

The formula for day’s working capital is the product of average working capital and 365 divided by annual
sales. For example, if a company makes $10 million in sales and has working capital of $100,000, the days
working capital is calculated by multiplying $100,000 by 365 and then dividing the answer by $10 million.
The answer is 3.65 days. However, if the company makes $100 million in sales, the answer is 0.365 days.

An increased level of sales, all other things equal, produces a lower number of day’s working capital because
more sales means the company is converting working capital to sales at a faster rate. A company with a day’s
working capital ratio of 3.65 takes 10 times more time to turn working capital, such as inventory, into sales
than a company with a day’s working capital ratio of 0.365. Another way to interpret this is the company with
a day’s working capital ratio of 0.365 is 10 times more efficient than the company with a ratio of 3.65. While
the company with the higher ratio is generally the most inefficient, it is important to compare against other
companies in the same industry, as different industries have different working capital standards.

While negative and positive working capital measures provide a general overview of working capital, day’s
working capital provides analysts with a numeric measure for comparison. The ratio provides analysts with
an average for the number of days it takes a company to convert working capital into sales.

1.2 MEANING AND DEFINITION

The Company’s operations, sales, marketing and distribution, front line and support services and the
completion of these are vital to achieve a profitable growth in the future. India – the land to travel to, a haven
of tourism delights, a civilization to tour through. Tourists come to India for its wealth of sights, cultural
exuberance, diversity of terrain and in search of that special something, an extra punch that only India
promises and delivers. Teeming with over a billion people who voice over area million Information relating
to projection.
A ratio analysis is a quantitative analysis of information contained in a company’s financial statements. Ratio
analysis is used to evaluate various aspects of a company’s operating and financial performance such as its
efficiency, liquidity, profitability.

12
When investors and analysts talk about fundamental or quantitative analysis, they are usually referring to
ratio analysis. Ratio analysis involves evaluating the performance and financial health of a company by using
data from the current and historical financial statements. The data retrieved from the statements is used to -
compare a company's performance over time to assess whether the company is improving or deteriorating;
compare a company's financial standing with the industry average; or compare a company to one or more
other companies operating in its sector to see how the company.
A current asset is a balance sheet item that represents the value of all assets that can reasonably expect to be
converted into cash within one year. Current assets include cash and cash equivalents, accounts receivable,
inventory, marketable securities, prepaid expenses. and other. Current assets are important to businesses
because they can be used to fund day-to-day operations and pay ongoing expenses. Depending on the nature
of the business, current assets can range from barrels of crude oil, to baked goods, to foreign currency. On
a balance sheet, current assets will normally be displayed in order of liquidity, that is, the ease with which
they can be turned into cash. 

Assets that cannot feasibly be turned into cash in the space of a year – or a business' operating cycle, if it is
longer – are not included in this category and are instead considered long-term assets. These also depend on
the nature of the business, but generally include land, facilities, equipment.

Accounts receivable is the balance of money due to a firm for goods or services delivered or used but not yet
paid for by customers. Said another way, account receivable are amounts of money owed by customers to
another entity for goods or services delivered or used on credit but not yet paid for by clients.

Accounts receivable refers to the outstanding invoices a company has or the money clients owe the company.
The phrase refers to accounts a business has a right to receive because it has delivered a product or service.
Accounts receivable, or receivables represent a line of credit extended by a company and normally have terms
that require payments due within a relatively short time period, ranging from a few days to a fiscal or
calendar year.

Companies record accounts receivable as assets on their balance sheet since there is a legal obligation for the
customer to pay the debt. Furthermore, accounts receivable are current assets, meaning the account balance is
due from the debtor in one year or less. If a company has receivables, this means it has made a sale on credit
but has yet to collect the money from the purchaser. Essentially, the company has accepted a short-term from
its client.

13
1.3 Types of Cash Payment

• Receipts: It is anticipated that favorable credit terms will have to be extended to the corporate clients
targeted when marketing the hotel’s new convention facilities. It is projected that 5% of convention revenue
will be received in the month prior to the convention as a deposit, 40% of convention revenue will be
received at the time the seminar is held, and the remaining 55% will be received in the month following the
convention. $42,000 in convention sales are predicted for April. In the past, 40% of restaurant and bar sales
have been for cash and 60% have been charged and collected in the month following the sale. This cash to
credit ratio for restaurant and bar sales is expected to continue.

• Food and drink purchases: Food and drink stocks are replenished frequently. This signifies that
food and drink purchases in a month are approximately equal to food and drink expenses for the month. One
month’s credit is taken for all food and drink purchases.

• Wages, salaries and supplies payments: Wages, salaries and supplies are paid in the month they are
incurred as an expense.

• Electricity payments: Electricity is paid quarterly. The cost per quarter has been estimated at $1,200
and the first annual payment is made in March.

• Insurance payment: The annual insurance premium of $6,000 is paid in February.

• Advertising payments: In order to promote the hotel’s new seminar facilities, a major advertising
campaign costing $5,000 per month will be undertaken during the first four months of the year. In May
following the initial period of intensive promotion, advertising will revert to the hotel’s traditional level
of$500 per month. This signifies that $24,000 will be spent on advertising over the course of the year ([4
×$5,000] + [8 × $500]). The hotel’s accountant felt that for profit and loss statement purposes, it is reasonable
to pro rata this $24,000 equally across the year at the rate of $2,000 per month. He defended this approach on

14
the grounds that sales for the whole year would benefit from the additional market exposure achieved during
the initial intensive advertising campaign. All advertising is paid for in the month the service is provided.

• Fixed asset payments: Following an appraisal period in which tests will be conducted to ensure that
the new presentation equipment is meeting the vendor’s specifications, a final installment payment
of$150,000 for the seminar room equipment will be made in February. The expense associated with this
refurbishment has been included in the depreciation figure in budgeted profit and loss statement for January–
March.

• Opening bank balance: It is projected that Back Woods will be holding a bank balance of $6,000 at
the beginning of January The profit and loss statements presented in Exhibit 11.1, together with the projected
cash receipts and payments details in Exhibit 11.2,provide you with sufficient information to prepare ’ cash
budget for next January, February and March The easiest way to compile a cash budget involves breaking the
exercise into the following three steps:

1 Prepare a schedule of projected receipts by month.

2 Prepare a schedule of projected cash disbursements (payments) by month.

3 Prepare the monthly cash budget by consolidating the monthly receipts and payments schedules and also
the estimated cash balance at the beginning of the budget period.

We will now work through each of these steps, in turn, for the schedule of projected cash receipts Preparing
the schedule of cash receipts can be tricky when there is a signification in the period of credit taken by
customers. In the Retreat case, we have convention receipts occurring in three installments (5% in the month
prior to the sale, 40% in the month of the sale, and 55% in the month following the sale).In addition, we have
40% of restaurant & bar receipts coinciding with the month Of sale (i.e. cash sales) and 60% of receipts
occurring one month after the sale.

1.4 Types of Ratio

1. Working Capital Ratio: A ratio between the current assets and current liabilities, it signifies the current
ability of an organization to pay off its short-time financial obligations.
15
2. Collection Period Ratio: Also known as the debtors or accounts receivables turnover ratio, this ratio is
indicative of a company’s ability to convert its debts into cash. The lesser number of days it takes to realize
its payments from its debtors, the better.

3. Inventory Turnover Ratio: Also known as the stock turnover ratio, this ratio monitors the time a
company takes to converts its goods into cash. Lower the time taken higher is the company’s stock efficiency.
Strong working capital management aids a company in having a higher operational efficiency and hence,
higher profitability. For this, Bajaj Finserv offers special working capital loan which
will help your business meet its short-term liquidity smoothly.

1.5 RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

• To study the working capital requirement of a company.

• To know the progress of working capital in a company.

• To study the efficiency of cash, and receivables management of the company.

• To know the solvency of the company & how the company is managing working capital.

• The objective of study to analyzed the liquidity position of the company.

• To study the loan & advances and repayment of loan of company.

• The basic objective of the study is to see the liquidity position of the company.

• To study the efficiency of working capital management of the company.

THE WORKING CAPITAL NEED ARISES FOR THE FOLLOWING PIRPOSE

• For purchasing of Tickets.

• For paying wages and salaries.

• To increase day-to-day expense and overhead costs like power and office expense etc

16
• To meet selling costs of packages, advertising etc…

• To provide credit facilities to customers.

SCOPE FOR THE STUDY

This project acts as a reference guide or as a source of information. It gives the idea about the financial
analysis and working capital of the firm. The main scope of the study was to put into practical the theoretical
aspect of the study into real life work experience. The study deals with analysis and interpretation of the data
collected through the sources of primary and secondary data for a period of five financial years. I.e. 2004-
2005, 2005-2006, 2006-2007, 2007-2008 and 2008-2009 Graphs, diagrams and tabulation methods are used
to analyze and interpret the data collected. It will help to understand the company’s liquidity position. 

LIMITATION OF THE STUDY

• This study deals only with the data made available. Hence the result of this study cannot judge the business
of the firm in general.

• The study have been influenced by the limitation of the ratio analysis.

• The study extensively uses the data provided is the financial reports of the firm which may also have their
own limited perspective.

• The analysis made on the working capital management is for a particular period of time the current assets
and current liabilities will change for an analysis made at any other of time.

The data in this project is enabling in secondary in nature. Financial reports, company records were
referred for data analysis. The study has been undertaken by collecting relevant data from the balance sheet,
profit and loss a/c, annul report & Audit report of the Shree New tours & travels Pvt. ltd. the company is used
financial tools for the analyzing and interpretation data. However primary data is also collected by
observation discussing with company officials. This primary data is used to fill in the gaps while preparing
this report and to know the latest procedures adopted by the company. This has helped to draw inferences and
conclusions.

17
Sources of Data

In preparing of the project the information collected from the two sources

There are two types of Data

• Primary Data

• Secondary Data

Primary Data

The primary data are those, which are collected fresh for the first time and thus happen to be original in
character. The primary data collection involves the collecting of information for the first time by observation,
experimentation, and questionnaire and through interview schedules in the original form by the researcher
himself or his nominees.

Plan of action

The primary data was collected through discussion with the finance manager using the interview schedule.
This data was obtained to study the latest procedures relating to working capital management and ratio
analysis system followed by the company.

Secondary Data

 The secondary data are those, which have been collected by some other and which have been processed.
Generally speaking secondary data are information, which have been previously collected by some
organization to satisfy his own need. But the department under reference for an entirely different reason is
using it.

I was used secondary sources also for collecting the data. They are:

18
• Information from the text sources.

• Information from the internet sources.

• Information from the materials provided by the concern.

SAMPLING DESIGN

Sampling unit: Financial Statement & Audit Report

Sampling Size: Last Five Year financial Statement

19
 CHAPTER 2

REVIEW LITRATURE

Author by Babasab Patil

Littleton area first began to be settled in 1862, there were two principal forms of transportation
available: walking and either riding or being pulled by a horse. There were no roads to speak of, only old
Indian trails which had been widened and packed hard by the increased usage of white men. Their after in air
India has came in 19th century. Air Indian has first Government sector company in India .It was introduced
long year ago in India And there after many private air lines comes in India .The airlines has developing the
service sector in India by providing tours and traveling facility to the customer. In 19 the century many tours
& Travels Company introduce in India. Air Deccan is continues to be one of the faster growing commercial
passenger airlines today .Air Deccan company has developed tours & travels sectors to provide various
facility to the tours & travels facility company. Company profile:- SHREE NEW SAI TOURS & TRAVELS
PRIVATE LIMITED (SNST&TPL) is situated Laxmi Nagar Link Road Goregaon (w) in Mumbai; State –
Maharashtra .Shree NEW Tours &Travels Pvt. Ltd is a medium scale of Tours & Travels service providing
company. Shree New Tours & Travels Pvt. Ltd was incorporated in the year 2001. Shree new Tours &Travels
Pvt. Ltd was set up in the year of 2001, 17 August. The Registration number is U63040 MH 2001 PTC
133094. The registered office of the company will be situated in the state of Maharashtra i.e. within the
jurisdiction of registrar of companies at Mumbai. Shree New is a Tours & Travels company. I have
undertaken my study in area of working capital.

Book of the Marvels N Author Marco Polo (2002)

This is a 13th-century travelogue written down by Rustichello da Pisa from stories told by Marco Polo,
describing Polo's travels through Asia between 1271 and 1295, and his experiences at the court of Kublai
Khan.

20
The book was written in Old French by romance writer Rustichello da Pisa, who worked from accounts
which he had heard from Marco Polo when they were imprisoned together in Genoa. From the beginning,
there has been incredulity over Polo's sometimes fabulous stories, as well as a scholarly debate in recent
times. Some have questioned whether Marco had actually travelled to China or was just repeating stories that
he had heard from other travelers.

Shikhar.com is an effective encyclopedia on tours in India and Shikhar Travels features comprehensive facts
related to tour packages in India. India with abundant tourist destinations attracts tourist from all over the
world. Attractive hill stations, beaches, historical monuments, forts, cultural sites, narrow backwater nature
blessed landscapes, all these features will make your holiday in India memorable. This country is paradise for
travelers. 

At shikhar.com, we believe travelling to India is about more than just going on vacation - it's about having a
remarkable experience. Our tours are judiciously planned and customized to meet your needs so your trip is
everything you imagined and much more. Our team is managed by professionals with years of travel
experience. We cater to travelers across the board- from luxury to mid range- economy travel options. 

Looking for a car rental solution for India, Nepal or Bhutan? We can assist you with car rental for leisure,
business and transfers. Our cars are well maintained, with special attention paid. We have our own fleet of
air-conditioned salon/ SUVcars. We can also assist you in arranging Super luxury car like BMW (7 series)
Mercedes (E class / S class/ Viano), Limousine.

We are dedicated in providing friendly transportation that exceeds all expectations. We provide a safe and
trouble-free transport service. Our drivers very well spoken and highly experienced and they have knowledge
of English language. They are carefully selected and trained. All drivers have a company emergency phone
and can be contacted by our staff and clients at any given time.

Littleton area first began to be settled in 1862, there were two principal forms of transportation available:
walking and either riding or being pulled by a horse. There were no roads to speak of, only old Indian trails
which had been widened and packed hard by the increased usage of white men. Their after in air India has
came in 19th century. Air Indian has first Government sector company in India .It was introduced long year
ago in India And there after many private air lines comes in India .The airlines has developing the service
sector in India by providing tours and traveling facility to the customer. In 19 the century many tours &
21
Travels Company introduce in India. Air Deccan is continues to be one of the faster growing commercial
passenger airlines today .Air Deccan company has developed tours & travels sectors to provide various
facility to the tours & travels facility company. 

CHAPTER 3

WORKING CAPITAL MANAGEMENT

3.1 FEATURE OF CAPITAL

Capital has the following features.

1. Capital is a man made.

2. Capital is a perishable.
3. Capital is a human control possible.
4. Capital is a mobile.
5. Capital is a human sacrifice.
6. Capital is a scarce.
7. Capital is a passive factor.

3.2 FORMS OF CAPITAL

• Equity Capital
• Debt Capital
• Specialty Capital
• Fixed Capital
• Working Capital

Equity Capital:-

22
Otherwise known as “net worth” or “book value”, this figure represents assets minus liabilities. There are
some businesses that are funded entirely with equity capital (cash written by the shareholders or owners into
the company that have no offsetting liabilities.) Although it is the favored form for most people because you
cannot go bankrupt, it can be extraordinarily expensive and require massive amounts of work to grow your
enterprise. Microsoft is an example of such an operation because it generates high enough returns to justify a
pure equity capital structure

Debt Capital:-
This type of capital is infused into a business with the understanding that it must be paid back at a
predetermined future date. In the meantime, the owner of the capital (typically a bank, bondholders, or a
wealthy individual), agree to accept interest in exchange for you using their money. Think of interest expense
as the cost of “renting” the capital to expand your business; it is often known as the cost of capital. For many
young businesses, debt can be the easiest way to expand because it is relatively easy to access and is
understood by the average American worker thanks to widespread home ownership and the community-based
nature of banks. The profit for the owners is the difference between the return on capital and the cost of
capital.

Specialty Capital:-

This is the gold standard. There are a few sources of capital that have almost no economic cost and can take
the limits off of growth. They include things such as a negative cash conversion cycle (vendor financing),
insurance float, etc. Negative Cash Conversion (Vendor Financing) Imagine you own a retail store. To
expand your business, you need $1 million in capital to open a new location. Most of this is the result of
needing to go out, buy your inventory, and stock your shelves with merchandise. You wait and hope that one
day customers come in and pay you. In the meantime, you have capital (either debt or equity capital) tied up
in the business in the form of inventory. Now, imagine if you could get your customers to pay you before you
had to pay for your merchandise. This would allow you to carry far more merchandise than your
capitalization structure would otherwise allow. AutoZone is a great example; it has convinced its vendors to
put their products on its shelves and retain ownership until the moment that a customer walks up to the front
of one of AutoZone’s stores and pays for the goods. At that precise second, the vendor sells it to AutoZone
which in turn sells it to the customer. This allows them to expand far more rapidly and return more money to
the owners of the business in the form of share repurchases (cash dividends would also be an option) because
they don’t have to tie up hundreds of millions of dollars in inventory. In the meantime, the increased cash in

23
the business as a result of more favorable vendor terms and / or getting your customers to pay you sooner
allows you to generate more Income than your equity or debt alone would permit. Typically, vendor
financing can be measured in part by looking at the percentage of inventories to accounts payable (the higher
the percentage, the better), and analyzing the cash conversion cycle; the more days “negative”, the better.
Dell Computer was famous for its nearly two or three week negative cash conversion cycle which allowed it
to grow from a college dorm room to the largest computer company in the world with little or no debt in less
than a single generation. 

Float
Insurance companies that collect money and can generate income by investing the funds before paying it
them out in the future in the form of policyholder payouts when a car is damaged, or replacing a home when
destroyed in a tornado, are in a very good place. As Buffet describes it, float is money that a company holds
but does not own. It has all of the benefits of debt but none of the drawbacks. His most important
consideration is the cost of capital – that is, how much money it costs the owners of a business to generate
float. In exceptional cases, the cost can actually be negative; that is, you are paid to invest other people’s
money plus you get to keep the income from the investments. Other businesses can develop forms of float but
it can be very difficult.

Sweat Equity
There is also a form of capital known as sweat equity which is when an owner bootstraps operations by
putting in long hours at a low rate of pay per hour making up for the lack of capital necessary to hire
sufficient employees to do the job well and let them work an ordinarily forty hour workweek. Although it is
largely intangible and does not count as financial capital, it can be estimated as the cost of payroll saved as a
result of excess hours worked by the owners. The hope is that the business will grow fast enough to
compensate the owner for the low-pay, long-hour sweat equity infused into the enterprise

1. Fixed Capital:-
Fixed capital includes the assets and capital investments—such as property, plant, and equipment (PP&E)—
that are needed to start up and conduct business, even at a minimal stage. These assets are considered fixed in
that they are not consumed or destroyed during the actual production of a good or service but have a reusable
value. Fixed-capital investments are typically depreciated on the company's accounting statements over a
long period of time—up to 20 years or more.

24
Fixed capital can be contrasted with variable capital, the cost and level of which change over time and with
the scale of a company's output. For instance, machinery used in production would be considered fixed
capital, while human labor would be a component of variable capital.

The concept of fixed capital was first introduced in the 18th century by the political economist David
Ricardo. For Ricardo, fixed capital referred to any kind of real or physical asset that was consumed in the
production of a product. This was opposed to Ricardo's idea of circulating capital, such as raw materials,
operating expenses, and labor. In Marxian economics, fixed capital is closely related to the concept of
constant capital.

Fixed capital is one, which can be used in production again and again for a long period. In other words, fixed
capital is the capital, which can be used over and over in the process of production. It is a capital, which is
durable and can be used over a long period of time. For example: - Machinery, building, tools, implements
etc.

2. Working Capital
Working capital, also known as net working capital (NWC), is the difference between a company’s current
assets, such as cash, accounts receivable (customers’ unpaid bills) and inventories of raw materials and
finished goods, and its current liabilities, such as accounts payable.

Working capital is a measure of a company's liquidity, operational efficiency and its short-term financial

health. If a company has substantial working capital, then it should have the potential to invest and grow. If a
company's current assets do not exceed its current liabilities, then it may have trouble growing or paying back
creditors, or even go bankrupt.

It is the capital which can be used only once in the process of production. In other words, It refers to capital
which can be used only once in production. It loses its utility after a single use. E.g: - Raw material, Coal and
petroleum, Payment of wages etc.

3.3 Type of Working Capital Introduction

The financial concept of working capital equates it with current assets. According to this view the total of the
working capital is the total value of the current assets of the company. This is known as the ‘Gross working
capital’. According to the excess of current assets, over current liabilities. In other words, it is the difference
25
between current assets and current liabilities. This concept of working capital is called the Net Working
Capital
Hence there two concepts of working capital.

1. Gross Working capital

2. Net Working Capital1.

Gross Working Capital

The Gross Working Capital (also known as circulating capital, operating capital or current capitals) represent
the quantitative aspect of Working capital since it concerns with the total value of current assets to be held by
the company. The management of Gross working capital is a short-term phenomenon involving a continuous
study of the fluctuation in investment in current assets. The aim is to neither maintain the level of current
assets at proper level neither at a high level involving unnecessary costs nor at a low level threatening.
Production needs. Current assets include cash in hands, bank balance, bills receivables, sundry debtors, short-
term loans advances, inventories and marketable seventies. 

Advantages of working capital

a) Financial managers are profoundly concerned with current assets.

b) Gross Working Capital provides the current amount of working capital at the right times
c) It enables a firm to realize the greatest retime on it investment.
d) It helps the fixation of various areas of financial responsibility.

2) NET WORKING CAPITAL

The net working capital is the difference between current assets and current liabilities. The concept of net
working capital enables a firm to determine how much amount is left for operational requirements. The net
working capital is financed from long term sources which may includes barrowed funds in the form of term
loans, debentures etc. or own funds like plough-back profits, etc, or both. The management of net working
capital is a long-term phenomenon current liabilities include bills payable, sundry creditors, short-term loans
advances and bank OD. Needles to say that the firm aims at maximizing the wealth of shareholders wealth
.They should earn sufficient return from its operations. To earn sufficient amt of profit it requires successful
sales utilized to their fullest capacity for this purpose proper management of working capital is essential

26
because fixed assets can’t work without working capital. Various research studies suggest. The Gujarat study
team, Gujarat the SBI study team has confirmed that inadequacy of working capital and improper
management of working capital has contributed enormously for the ailment of industrial enterprises. Working
capital management refers to the administration of all aspects of current assets. If has been observed that a
creation of financial manager time is utilized in the management of working capital. It is devoted for raising
working capital and managing it efficiently.
It is relatively simple to calculate the net working capital of a company. We will show you the formula below.

The net working capital (NWC) formula is:

Net Working Capital = (Cash and Cash Equivalents) + (Marketable Investments) + (Trade Accounts
Receivable) + (Inventory) – (Trade Accounts Payable)

– OR –

Net Working Capital = (Current Assets) – (Current Liabilities)

Net Working Capital Example

Now that you understand the equation, let’s now take a look at each component of net working capital below.
This will help you calculate your current assets, current liabilities, as well as your overall net working capital.

Current Assets

Current assets are short-term assets found on your balance sheet that can be converted to cash within 1 year or
less. Current assets typically include cash and cash equivalents such as treasury bills, short-term government
bonds, commercial paper, and money market funds. Marketable securities, accounts receivables, and
inventories are also considered current assets.

For example, your company has cash and cash equivalents of $50,000, accounts receivable of $5,000, and
total inventories worth $10,000. To calculate the total current assets, you simply sum these values together:

$50,000 + $5,000 + $10,000 = $65,000

27
For more information, you can read our in depth article on current assets.

Current Liabilities

Current liabilities are short-term financial obligations due in 1 year or less. Current liabilities usually include
short-term loans, lines of credit, accounts payable, accrued liabilities, and other debts such as credit cards,
trade debts, and vendor notes. Current portions of long-term debt like commercial real estate loans and small
business loans are also considered current liabilities.

For example, your company has a $20,000 short-term loan, accounts payable of $7,000, and accrued
liabilities of $4,000. To calculate the total current liabilities, you need to add all these values individual
current liability numbers:

$20,000 + $7,000 + $4,000 = $31,000

For more information, you can read our in-depth article on current liabilities.

Now that you have the values for both current assets and current liabilities, the next step is to subtract the
current liabilities from the current assets to get the value of your net working capital. Using the above figures,
the calculation is as follows:

$65,000 – $31,000 = $34,000 NWC

Why is Net Working Capital Important?

NWC is important because it represents your short-term business assets available to pay your short-term
obligations and also invest in income-producing activities. It can serve as a good indicator regarding how
efficiently a business is operating and how financially solvent it is in the short-term.

For example, a positive net working capital means that a company has the short-term liquidity to pay its
current obligations as well as invest in its future growth. A net zero working capital means a company can
only meet its current financial obligations and a negative net working capital means that a company will
typically need to borrow or raise money to remain solvent.

28
Changes to Net Working Capital

Changes to net working capital is a measure of operating cash flow (OCF) and is typically recorded on your
statement of cash flows. The change in net working capital can show you if your short-term business assets
are increasing or decreasing in relation to your short-term liabilities from one period to the next.

However, an increasing or decreasing net working capital isn’t necessarily bad or good. Sometimes strategic
business decisions call for an increase in short-term liabilities in the near-term. Other times, an increasing net
working capital can show that more of your cash is tied up in assets that might not be as liquid. It’s important
to track the changes in net working capital so you can monitor your operating cash flow.

To measure the change, you can use the following formula:

(Current Net Working Capital) – (Previous Net Working Capital)

Net Working Capital Ratio

The net working capital (NWC) ratio measures the percentage of a company’s current assets to its short-term
liabilities. Similar to net working capital, the NWC ratio can be used to determine whether or not you have
enough current assets to cover your current liabilities.

The net working capital ratio can be calculated as follows:

(Current Assets) / (Current Liabilities)

The optimal ratio is to have between 1.2 – 2 times the amount of current assets to current liabilities. Anything
higher could indicate that a company isn’t making good use of its current assets. Liquidity measures such as
the quick ratio and the working capital ratio can help a company with its short-term asset management.

29
 Factors determining working capital Requirements
In case of a small-scale enterprise, the important factors determining the requirements of working capital are
as follows:

1. Sales:
Among the various factors, size of the sales is one of the important factors in determining the amount of
working capital. In order to increase sales volume, the enterprise needs to maintain its current assets. In the
course of period, the enterprise becomes in the position to keep a steady ratio of its current assets to annual
sales. As a result, the turnover ratio, i.e., current assets to turnover increases reducing the length of operating
cycle. Thus, less the operating cycle period, less will be requirements for working capital and vice versa.

2. Length of Operating Cycle:

Conversion of cash through various stages viz., raw material, semi-processed goods, finished goods, sales,
debtors and bills receivables into cash takes a certain period of time that is known as ‘length of operating
cycle’. Longer the operating cycle time, the more is the working capital required.

For example, heavy engineering needs relatively more working capital than a rice mill or cotton spinning mill
or a steel rolling mill. Thus, it follows that depending upon the length of working cycle, the requirement for
working capital varies from enterprise to enterprise.

3. Nature of Business:
The requirement of working capital also varies among the enterprises depending upon the nature of the
business. For instance, trading companies require more working capital than manufacturing companies. This
is because that the trading business requires large quantities of goods to be held in stock and also carry large
amounts of working capital than manufacturing concerns.

In both these types of businesses, the value of current assets is 80% to 90% of the value of total assets. The
investment in current assets is relatively smaller in the case of hotels and restaurants because they mostly
have cash sales, and only small amounts of debtors’ balances.

4. Terms of Credit:
Another important factor that determines the amount of working capital requirements relates to the terms of
credit allowed to the customers. For instance, an enterprise may allow only 15 days credit, while another may
allow 90 days credit to its customers. Besides, an enterprise may extend credit facilities to its all customers,

30
while another enterprise in the same business may extend credit only to select and those too reliable
customers only.

Then, the requirements for working capital will naturally be more if the credit period is longer and credit
facilities are extended to all customers, no matter reliable or non-reliable they are. This is because there will
be longer balance of debtors and that too for a relatively longer period which will obviously demand for more
capital.

On the contrary, if supplies of raw materials are available on favourable conditions or terms of credit i.e., the
payment will be made after a relatively longer period of time, the requirement for working capital will be
correspondingly smaller.

5. Seasonal Variations:
The seasonal enterprises, i.e., the enterprise whose operations pick up seasonally may require more working
capital to meet their increased operations during the particular season. A popular example of seasonal
enterprise may be sugar factory whose operations are highly seasonal.

6. Turnover of Inventories:
If inventories are large in size but turnover is slow, the small-scale enterprise will need more working capital.
On the contrary, if inventories are small but their turnover is quick, the enterprise will need a small amount of
working capital.

7. Nature of Production Technology:

In case of labour intensive technology, the unit will need more amount to pay the wages and, therefore, will
require more working capital. On the other hand, if the production technology is capital- intensive, the
enterprise will have to make less payment for expenses like wages. As a result, enterprise will require less
working capital.

8. Contingencies:
If the demand for and price of the products of small- scale enterprises are subject to wide variations or
fluctuations, the contingency provisions will have to be made for meeting the fluctuations. This will
obviously increase the requirements for working capital of the small enterprises. While one can add certain
other factors to this list, the said factors appear to be the major ones in determining the requirement of
working capital of a small-scale enterprise.

31
 Financing Of Working Capital

This chapter put forth the discussion on the sources available for financing the working capital of an
organization.
Funding of working capital is continuous problem for all management. Basically sources of financing
working capital are broadly bifurcated into two sources they are as follows. Sources of financing of working
capital

Sources of Financing of Working Capital

Sources of working capital can be spontaneous, short term and long term. Spontaneous working capital
includes mainly trade credit such as the sundry creditor, bills payable, and notes payable. Short term sources
are tax provisions, dividend provisions, bank overdraft, cash credit, trade deposits, public deposits, bills
discounting, short-term loans, inter-corporate loans, and commercial paper. Long-term sources are retained
profits, provision for depreciation, share capital, long-term loans, and debentures.

Spontaneous
Short Term Sources Long Term Sources
Sources

Internal External Internal External

Sources Sources Sources Sources

Tax Bank Retained Share

Trade Credit Provisions Overdraft Profits Capital

Sundry Dividend Trade Depreciation Long Term

Creditors Provisions Deposits Provision Loans

Public
Bills Payable   Deposits   Debentures

Notes   Bills    

32
 Spontaneous
Short Term Sources Long Term Sources
Sources

Payable Discounting

 Accrued Short Term

Expenses   Loans    

3.4 COMPONENTS OF WORKING CAPITAL

The Components Of Working Capital Are:

• Cash Management
• Receivable Management

RECEIVABLES MANAGEMENT
Receivable represents amounts owed to the firm as a result of sale of goods or services on the ordinary
course of business. These are claims of the firm against its customers and form part of its current assets.
These receivables are carried for the customers. The period of credit and extent of receivables depends upon
the credit policy

CASH MANAGEMENT
Cash is the liquid form of an asset. It is the ready money available in the firm or with the business, essential
for its operations. A firm needs the cash for the following three purposes

Transaction Motive:
The firm must and should keep the funds for transactions like purchase, sales etc. These activities, which are
not known in advance, are not considered while preparing a cash budget.

Precautionary motive:
The firm also keeps funds for the safeguard against uncertainties, which are an integral part of business
operations.

33
Speculative Motive:
To tap profits from opportunities arising from fluctuations in commodity prices, security prices, interest rates
etc. The company with surplus cash is in a better position to exploit such situations.
The main purpose of maintaining or investing in receivables is to meet competitors, to increase sales, and to
maintain a cordial relationship with the clients. Receivables management is the process of making decisions
relating to investment in trade debtors. However, at the same time, investment in this current asset involves
cost considerations also. Therefore, there is always a risk of bad debts too.

Credit Evaluation
There are three approaches used for credit evaluation. These are:

• Traditional Credit analysis

• Numerical Credit Scoring

Working capital composition: -

This part unfolds the discussion on the composition of the working capital i.e. the proportion different
current assets is determined by the trade of between the two seemingly opposite objectives of liquidity and
portability. Liquidity refers to the ability of an asset get convert into cash at short period and without loss in
value .A Company is said to liquid when they arise. This ability is also known as technical solvency of the
company. The creditors and other lenders of the company would like to have the ability of meet their dues on
their due dates this means much of the current assets should be held in the form of cash and near near-cash
items like marketable. Securities, But cash is a non-earning asset and yield on marketable seethes will affect
the profitability of the concern. The consideration of the profitability requires that the level of current assets is
kept low and also such a form as will aid production and generate surplus. Thus the objectives of liquidity
(solvency) and profitability seem to operate in opposite to directions. While liquidity requires large we
current assets to be kept and of that mostly in cash and near-cash form profitability requires that the current
assets should be kept at low levels and that too in form which will contribute to production. By proper
planning the opposing objectives can be recognized and made to compliment each other. Keeping liquidity at
adequate levels helps the managers to concentrate on production in a congenial atmosphere and by increase

34
the efficiency of functioning. realty profitability, since the profits ultimately constitute the sources of
repayment of the company’s dues, higher profits increases the liquidity of the concern.

Thus the chapter states that the objectives of liquidity and profitability seem to operate in opposite directions,
while liquidity requires large current assets to be kept and profitability requires the current assets should be
kept at low levels, which will contribute to production. 

3.5 HISTORY OF INDUSTRY

WORKING CAPITAL MANAGEMENT OF SHREE NEW SAI TOURS & TRAVELS PVT LTD concerns
in fifteen hundred different languages, India is where people live with variety, thrive on diversity and are too
familiar with largeness to let it boggle them. Mud huts and mansions face off across city streets. Lurid luxury
and limp living are inhabitants of the same lane. Histories of Transportation Fixed wheels on carts are
invented - the first wheeled vehicles in 3500 BC history. Other early wheeled vehicles include the chariot.
3500 BC River boats are invented - ships with oars 2000 BC Horses are domesticated and used for
transportation. 181-234 The wheelbarrow is invented. 770 Iron horseshoes improve transportation by horse
Leonardo da Vinci first to seriously theorize about flying 1492 machines- with over 100 drawings that
illustrated his theories on flight Cornelis Drebbel invented the first submarine - a human oared 1620
submersible. Blaise Pascal invents the first public bus - horse-drawn, regular 1662 route, schedule, and fare
system Jacques de Vaucanson demonstrates his clockwork powered 1740 carriage First practical steamboat
demonstrated by Marquis Claude 1783 Francois de Jouffroyd Abbans - a paddle wheel steamboat 1783 The
Montgolfier brothers invent the first hot air balloons 1787 Steamboat invented First self-propelled road
vehicle invented by Nicolas Joseph 1769 Cugnot 1790 Modern bicycles invented Richard Trevithick invented
the first steam powered 1801 locomotive (designed for roads) Isaac de Rivas makes a hydrogen gas powered
vehicle - 1807 first with internal combustion power - however, very unsuccessful design First steamboat with
regular passenger service - inventor 1807 Robert Fultons Clermont George Stephenson invents the first
practical steam 1814 powered railroad locomotive 1862 Jean Lenoir makes a gasoline engine automobile
1867 First motorcycle invented George Westinghouse invents the compressed air 1868 locomotive brake -
35
enabled trains to be stopped with fail- safe accuracy 1871 First cable car invented Karl Benz builds the
world’s first practical automobile to be 1885 powered by an internal combustion engine Ferdinand von
Zeppelin invents the first successful dirigible 1899 - the Zeppelin 1903 The Wright Brothers invent and fly
the first engine airplane 1907 Very first helicopter –unsuccessful design Henry Ford improves the assembly
line for automobile 1908 manufacturing Hydrofoil boats co-invented by Alexander Graham Bell & 1908
Casey Baldwin - boats that skimmed water 1926 First liquid propelled rocket launched 1940 Modern
helicopters invented 1947 First supersonic jet flight 1956 Hovercraft invented 1964 Bullet train transportation
invented 1969 First manned mission (Apollo) to the Moon 1970 First jumbo jet 1981 Space shuttle launched.

3.6 PROFILE OF THE COMPANY

COMPANY HISTORY OF THE PLACE

The Shree New Sai Tours & Travels Private Limited was established in April 2002 at Mumbai,
Maharashtra State.

REGD. OFFICE & WORKS OF THE COMPANY

Shree New Sai Travels Private Limited Corporate Office: Laxmi Nagar, New Link Road, And Mumbai:
400104

Mobile No.9821186395/9987644401

DIRECTOR OF THE COMPANY

Mr. Bholanath Gupta

Mr. Brijesh Kumar Gupta

PRODUCT AND SERVICE LINE OF THE COMPANY

36
• Tours Product

• Domestic and International Flight booking services

• Hotel Booking Services.

• Provided Bus facility services.

• Provided Car facility service.

• Railway ticket booking services.

• Foreign exchange services.

CLIENTS OR CUSTOMER

• Lata Tours N Travels Pvt. Ltd.

• Reliable Cabs n Services Pvt. Ltd.

• Asian Market Pvt. Ltd.

• Chaturbhuj Pvt. Ltd

• Laxmi Cabs Pvt. Ltd

• Other People

MARKET CHANNELS

• On the Basis of Clients, they make Direct sales to the Customer.

COMPETITOR

The main competitors of the company are:

• Lata Tours & travels Pvt. Ltd.

• Bharat Tours & Travels Pvt. Ltd.

37
NUMBER OF SHIFTS

General shift:

9-00IS to 6-00PM

NO. OF WORKING DAYS: 300 Days in a Year

Shree New Sai Travels Pvt. Ltd was incorporated in the year 2002. Shree New Sai Tours & Travels Pvt. Ltd
was set up in the year of 2002, April. The Registration number is U 63040 MH 2001 PTC 133094. The
registered office of the company will be situated in the state of Maharashtra i.e. within the jurisdiction of
registrar of companies at Mumbai. Shree New Sai is a Tours & Travels company .This company has booking
the aero planes ticket and booking, reserving accommodations seats, compartments and berths on railways,
Steam ships motor ships boats, omnibus, Motorbus and carriages.

All descriptions and to issue tickets international & Domestics for the same and to Hire taxies ,Motor car and
all kind of Public vehicles and transports and to charter services and To book reserve and secure for and on
behalf of the constituents of the company ,Room and boarding and lodging accommodations in hotels
,restaurants and boarding’s houses and to handle cargoes ,goods ,luggage or baggage’s and also to book ,and
secure accommodation including boarding and lodging accommodations in resorts on behalf of guests or
customers of the company. There is another industry in the Campus of Shree New Sai Tours & Travels Pvt.
Ltd which is a husband concern Shree New Sai Impax private Limited was established in the year 2003.Dayal
Impax private Limited has cloth stitching company .This company has taking order from the supplier and
prepare a cloth. This company has provided many offer more than 15 leisure tour product to Singapore and
Europe, more than 10 to south East Asian and is the Domestic and international tour operator in Indian tours.
Shree New Sai tours & Travels Pvt. Ltd also takes pride in being consistently innovation in the tourisms
industry. The Shree New Sai Tours & Travels Private Limited is customer focused and Quality oriented
Service unit, which is continuously strive to services to meet its external customer’s requirements. The main
goal of the company is to giving full satisfaction to the customer and providing good quality of service,
enhancing to improve the services and make company more competitive. The Shree New Sai Tours & Travels
Private Limited has specialized divisions to cater to the needs of all types travelers, whether it is a guest
looking for the safety and security of escorted group tours, or someone seeking exclusive customized
holidays or the business traveler .We offer our guests a range of allied travel services such as air ticketing,

38
Visa, Foreign exchange and hotel booking at one stop for their convenience. H as issue domestic and also
international flight ticket booking to the people on the basis of the commission. The company has issue more
flight ticket booking of that company those who are give high commission to The Company .The Company
has issued or booking of the Domestic air ticket railway ticket, booking of hotel and give rent on car The
Company has also provided helicopter service facility to the people. The company has also sold many tours
product to the people for his tour convenience purpose. The company has offered many tours product to the
people. The company was offered world tours as well as Indian tours to the people. The company has offered
tours product like Second Inning tours, Sport tours, Honeymoon tours, Education tours, and Business tours to
the people. The different Airlines company has given different commission rate to the company. If the
company has ticket booked of Jet Air ways, Spice jet and go air Airline Company then SN T&TPL Company
will get 6% transaction fees. And remain Air ways like kingfisher, Indian airlines; indigo and air Deccan air
ways will get 3% transaction fees on booking of flight ticket.

India Tour Packages

• Rajasthan Tour Packages. Rajasthan Tour 15D/10N. ...

• Kerala Tour Packages. Spices of Kerala 8D/7N. ...

• Jammu Kashmir Tour Packages. Best of Kashmir 6D/5N. ...

• Odisha Tour Packages. Eastern Triangle of Odisha 6D/5N. ...

• Assam Tour Packages. Tea Tasting Tour Assam 7D/6N. ...

• Arunachal Tour Packages. ...

• West Bengal Tours. ...

• Gujarat Tour Packages.

39
NAME OF INTERNATIONAL AIRLINES:

40
BUSINESS FLIGHT FIRE:-

STATE AIRLINES CODE Included TAX Total1 America Delta Airline

BOM/JFK/EWR 7381882 Australia Qantas Air BOM /SYD/ MEL/ 2427103 Sri Lanka Srilanka

BOM/ CMB/BOM 493984 Canada Jet Airways BOM/ YYZ/BRU 2427695 New zealand Singapore

BOM/AKL/BOM 2075346 South Africa Kenya Airlines BOM/JNB/BOM 1221557 England

Lufthansa BOM/LHR/MAN 2740058 Mexico Delta Airline BOM/ MAX /BOM 5721929 Saudi

Arabia Air India BOM/ RUH/BOM 4418110 Nepal Jet Airways BOM/ KTM /BOM 7154511

Etly KU BOM/ RWI/ ROM/ 22143412 China 9W BOM/PVG/BOM 12019313 Russia Aeroflot

BOM/ SVO /BOM 10405514 France Air France BOM/CDG /BOM 23414615 Germany

Lufthansa BOM/ FRA/ MAM 23621216 Kuala Lumpur Malaysia BOM/KUL/BOM 8660217

Singapore BOM/ SIN/BOM 8370918 Dubai Emirates BOM/DXB/BOM 8675819

Turkey BOM/IST/BOM 22645320 Bangkok Bk BOM/BKK/Bom 62894

ECONOMY CLASS FLIGHT FAIR

STATE AIRLINES CODE Included TAX Total1 America Delta Airline

BOM/JFK/EWR

1101382 Australia Qantas Air BOM /SYD/ MEL/ 1835453 Sri Lanka Srilanka BOM/

CMB/BOM 285344 Canada Jet Airways BOM/ YYZ/BRU 144482 New zealand Singapore

BOM/AKL/BOM 631526 South Africa Kenya Airlines BOM/JNB/BOM 835927 England

Lufthansa BOM/LHR/MAN 786908 Mexico Delta Airline BOM/ MAX /BOM 2710889 Saudi

Arabia Air India BOM/ RUH/BOM 2886710 Nepal Jet Airways BOM/ KTM /BOM 2919911

Etly KU BOM/ RWI/ ROM/ 8232012 China 9W BOM/PVG/BOM 4206813 Russia Aeroflot

BOM/ SVO /BOM 7906114 France Air France BOM/CDG /BOM 9178115 Germany Lufthansa

BOM/ FRA/ MAM 7204416 Kuala Lumpur Malaysia BOM/KUL/BOM 3937717 Singapore

41
Singapore BOM/ SIN/BOM 2732418 Dubai Emirates BOM/DXB/BOM 4712319 Turkey

Turkey BOM/IST/BOM 5069620 Bangkok Bk BOM/BKK/Bom 40060 

3.7 VISION, MISSION & GOALS

VISION

‘Spreading Smiles Happiness and Joyful life to People and Developing the Business in a

country.’

MISSION

‘Shree New Sai Travels Pvt. Ltd is passionately committed to quality travels, with continual

delivery of value added services. We uploaded the highest ethical standard and believes in

creating new benchmarks in the industry.

GOALS

MAIN GOAL OF COMPANY

• To earn a profit

• To providing good quality of services to people

• To attractive new and new customer

42
• To services cannot stop boundary

SHREE NEW SAI TRAVELS PRIVATE LIMITED

BOARD OF DIRECTORS

• Mr. Bholanath Gupta

• Mr. Brijesh kumarshuhu

MANAGING OF DIRECTOR

• Mr. Bholanath Gupta

BANKERS

• Canada Bank

RIGISTER OFFICE

Laxmi nagar, new link road,

Mumbai: 400104

3.8 OBJECTIVES

 The main Objects of the Company as set out in the Memorandum of Association of the
Company is as follows:

 To run manage or carry on the business of taxi cars, deluxe coaches ,lorries , cars ,trucks, airships
wagons ,rail , motors vessels, ferries ,boats and other vehicles propelled by electricity, gas ,gasoline

43
 compressed air steam ,manned power ,mechanized power, oil ,crude oil, automatic or other energy or
by whatsoever means and from any place or another whether within India or otherwise for the purpose
of carrying conveying ,transportation goods , materials produce ,machinery ,animals passengers,
merchandise , mail ,freight ,and all such things which may be conveniently carried on with the
aforesaid object of the company.

 To insure with any persons or company, against losses, damages, risks and liability of any kind which
may affect the company either wholly or partially and if thought fit to effect any such insurance by
joining or becoming members of any mutual insurance, protection or indemnity association federation
or society and to accept any such insurances or any thereof for the account of the company. 

 To procure information for as to the standing and responsibility of parties with whom they propose to
transact business.

 To provide clear ,comfortable and inexpensive sleeping accommodation for workmen and others and
in connection there with to the afford to such persons facilities and convenience for washing
,bathing ,cooking , reading, writing , and finding employment and for the purchase ,sale and
consumption of provisions both liquidity and solid. 

3.9 PRODUCT & SERVICES PROFILES

 The Shree New Sai Tours and Travels Pvt. Ltd have provided many tours product to the people. The
company has also provided service to the people. The totally honest policy, excellent service and perfect tours
planning are the hallmarks of company success. The company has perfected our tour itineraries to meet the
special needs of the discerning tourist.

Product Profile: (Tour Products)

• Second Innings Tours

• Educational Tours.

• Honeymoon Holiday Tours.

44
• Sports Tours.

• Chillax Tours.

• Business Tours.

• Thrillax Tours.

1. Second Innings Tours:

An exclusive tour for senior citizens is fully of mastimazz & magic .it’s a great way to discover
a holiday experience that is truly unique and great opportunity to meet seniors from different
walks of life.

2. Educational Tours:
Educational tours take teaching out of the textbooks. Its gives wonderful opportunity to learn about various
historic event and key location.

3. Honeymoon Holiday Tours:

Honeymoon tours will give the wonderful happy moment for life time and that make happy to the life
partner. 

4. Sports Tours:
Sport tours just for the vacationer who want s to combine holiday cheer with edge of the seat sporting
encounter.

5. Chillax Tours:
This tour is perfect respite from work stress and the daily grind. Specially tailored to put the spring back into
your stride, it’s your chance to let your hair down and indulge in the unexpected. Just make sure your boss
hasn’t.

45
6. Business Tours:
This tours facility sports enthusiasts this one will have you cheering SDT&TPL introduces sports tours
tailored just for the vacationer who want to combine holiday cheer with edge of the seat sporting encounter. 

7. Thrillax Tours: 
Thrillax vacation a new SNT&TPL special tours product and life will never be the same again. Feel your
adrenaline pumping as you hurtle over white water Rapides. The discovery skill you never knew you
possessed, climbing rock faces because it’s about time you stopped existing and started living.

3.10 DERPARTMENT STUDIES

• Finance Department

• Marketing Department

• Air Ticket Booking Department

• Hotel Booking Department

• Billing Department

• Forex Department

Finance Department

Finance is an essential component of the business to maintain its operation effectively. This dept. is
concerned with day-to-day activities like purchase, Sale, Salaries etc. and proper management and
maintenance of accounts of concerned year.

Factions

• Day to day/ bank Transactions.

46
• Bill passing and payment

• Recovering all transactions in the books of accounts

• Preparations of Cash Balance Statement

• Bank Reconciliations

• Preparations of Inflow and Outflow of cash statement

• Providing various types of management Information system reports required by management from
time to time.

• Carry out auditing

Marketing Department

Among all the functional areas of management marketing are play very important role for selling product of
the company. The with marketing Department The company can sold product to the customer of public.

Factions

• Selling of Tours Product

• Increasing of Sales of company

• Awareness about Product and Service to The customer

• Advertising of Company Product

Air Ticket Booking Department

The main function of air ticket booking department is to Flight Ticket Booking. The company has Ticket
Booking as per the order of the customer. The Department is Booking of National as well as International
Ticket of Flight.

47
Factions

 Booking Of Ticket To Give Information Regarding

 The Airlines To Give the information Regarding
 the Fair Price or Low price Airline

Hotel Booking Department

- Hotel booking department is important because the people booking through the tours &travels
company .The hotel booking department has given full information regarding the hotel to the customer .Hotel
booking department has knowledge about each hotel and which types of service provide to the customer.

Billing Department

Billing department has Prepared a Bill Of Airlines & Hotel. The Billing Department Has prepared the
day to day Booking of airline, Hotel and other services provided by company to the customer.

Factions

• Preparing Bill of Airlines ticket booking per Day

• Preparing Bill for Hotel Booking per Day

Forex Department

For Ex Department is Doing Transactions of Foreign exchange. The Forex Department is Handling
day to day transactions of foreign exchange. The fore Department has prepared the visa and also change the
currency of tourist those who want go other country for tourism purpose.

48
Factions

• Exchange currency with bank

• Day to day rate fluctuations record of each country

• Preparing Visa

• Providing foreign currency required customer

• Handling foreign currency trading activity

ORGANISATIONS FLOW CHART OF SHREE NEW SAI TRAVELS PVT LTD.

49
3.11 BALANCE SHEET SHREE NEW SAI TRAVELS OF PRIVATE LIMITED FOR
3 YEARS

BALANCE SHEET OF SHREE NEW SAI TRAVALS PRIVATE LIMITED

50
 2016-2017

Particular 31-03-2016 31-03-2017 Increase Decrease

Current Assets
Sundry Debtors
o/s more than 6 833104.00 - 833104.00 -
months
Other 42790924.00 28981646.00 13809278.00 -
Cash & Bank
Balance
Cash in hand 125254.00 151478.00 - 26224.00
Balance with
schedule bank
In Current A/C - - -
In Fixed Deposit 600000.00 600000.00 0.00 0.00

Loan & Advances

Unsecured 182081.00 49243.00 132838.00 -
considered goods,
subject to recover
advance recover in
cash or kind or
value.
Sundry Advance 1331945.00 - 1331945.00 -
T.D.S & Income 995525.00 305604.00 689921.00 -
Tax Paid

Total 4685833.00 30087971.00 16770862.00 -

Current Liability
Sundry Creditors 8090866.00 5663415.00 2427451.00 -

Other Liability 891150.00 617659.00 273491.00 -

Provision
Provision for 927500.00 527500.00 4000000.00 -
taxation
Provision for F.B.T 69590.00 34590.00 35000.00 -

Total 12123368.00 6843164.00 3135942.00 -

Networking
51
 Capital
(Current assets- 3687927.00 23244807.00 13634920.00 -
Current Liability)

BALANCE SHEET OF SHREE NEW SAI TRAVALS PRIVATE LIMITED

2017-2018

Particular 31-03-2017 31-03-2018 Increase Decrease

Current Assets
Sundry Debtors
o/s more than 6 386945.00 833104.00 - 446159.00
months
Other 41158296.0 42790924.00 - 1632628.00
0
Cash & Bank
Balance
Cash in hand 95663.00 125254.00 - 29591.00
Balance with
schedule bank
In Current A/C - - -
In Fixed Deposit 600000.00 600000.00 0.00 0.00

Loan & Advances

Unsecured 276894.00 182081.00 94813.00 -
considered goods,
subject to recover
advance recover in
cash or kind or
value.
Sundry Advance 431945.00 1331945.00 - 900000.00
T.D.S & Income 1439475.00 995525.00 443950.00 -
Tax Paid

Total 44389218.0 46858833.00 - 2469615.00

0

Current Liability
Sundry Creditors 9854397.00 8090866.00 176353.00 -

52
 Other Liability 801881.00 891150.00 - 89269.00

Provision
Provision for 1362500.00 927500.00 435000.00 -
taxation
Provision for F.B.T 104590.00 69590.00 35000.00 -

Total 12123368.0 9979106.00 2144262.00 -

0

Networking
Capital
(Current assets- 32265850.0 36879727.00 - 4613877.00
Current Liability) 0

Balance Sheet of Shree New Sai Travels Of Private Limited 2018-2019

Particular 31-03-2018 31-03-2019 Increase Decrease

Current Assets
Sundry Debtors
o/s more than 6 378114.00 386945.00 - 8831.00
months
Other 59110455.00 411582986.00 17952159.00 -
Cash & Bank
Balance
Cash in hand 64627.00 95663.00 - 31036.00
Balance with
schedule bank
In Current A/C - - -
In Fixed Deposit 600000.00 600000.00 0.00 0.00

Loan & Advances

Unsecured 320425.00 276894.00 43531.00 -
considered goods,
subject to recover
advance recover in
cash or kind or
value.
Sundry Advance 431945.00 431945.00 - 900000.00
T.D.S & Income 1589475.00 600000.00 0.00 0.00
Tax Paid
53
 Total 652495041.00 44389218.00 18105823.00 -

Current Liability
Sundry Creditors 8916827.00 9854397.00 - 937570.00

Other Liability 418250.00 801881.00 - 383631.00

Provision
Provision for 2012500.00 1362500.00 65000.00 -
taxation
Provision for F.B.T 17590.00 104590.00 75000.00 -

Total 50967874.00 12123368.00 - 596201.00

Networking
Capital
(Current assets- 0 0 0
Current Liability)

The Working Of The Company Should is provided. Ti Should not be negative In the year 2004-05
Rs. 2022229451.69 and in the year 2005-2006 rs.3244807.00 the working capital has increased and 2006-
2007 Rs 3679727.00 the working capital has increased but the Year 2007-2008 RS 32265850.00 the working
capital has Decreased. But in the year 2008-2009the working capital of Shree New Sai Travels Pvt. Ltd. Has
again increased Rs, 5067874.00The Shree New sai travels Pvt. Ltd working capital has increased which is
favorable position to the company. It clearly shown that the Shree New Sai Travels Pvt. Ltd. Has profits The
company. It clearly show that the Shree New Sai Travels Pvt. Ltd. Has profit orient of the company. So it was
not facing shortage of working capital in Initial year So to increase in Working capital to stand in the business
world.

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

54
Q.1) Gender?

NO OF RESPONDENT %
FEMALE 21 42%
MALE 29 58%
Grand Total 50 100%

INTERPRETATION
According to the given above. 44% Respondent and Female and 58% of the respondent are Male.

Q.2) Married Status?

NO OF RESPONDENT %
MARRIED 23 44%
UNMARRIED 26 56%
Grand Total 49 100%

INTERPRETATION
According to the graph above. 44% Respondent are Married and 56% are Unmarried.

Q.3) What Types of Statistics Calculate The Number Of Tourist Visiting a Destination Of given
Time?
COUNT NO OF RESPONDENT %
VOLUME STATISTICS 12 24%
STATISTICS OF TOURIST 04 8%
CHARCTERISTICS

55
 EXPENDITURE STATISTICS 13 26%
RESOURCES STATISTICS 11 22%
Grand Total 50 100%

INTERPRETATION
According to the Graph Given above. 24% of the respondent of volume Statistics, 8% of the respondent of
Tourist Industry, 26% of the respondent of Expenditure Statistics and 22% of the resources Statistics.

Q.4) Fluctuating Working Capital Is For

COUNT NO OF RESPONDENT %
IN THE PRICE OF 31 62%
MATERIAL
FOREX MATERIAL 20 4%
ALL OF THE ABOVE 40 8%
Grant Total 50 100%

INTERPRETTION
According to the Graph Given above. 62% of the respondent is Price Of Material, 4% of the respondent is
Forex Material and 8% of the Respondent is All of the above

Q.5) Which of the Following Types Of Working Is For Meeting The Contingency Of Business
COUNT NO OF RESPONDENT
Reserve Margin 45 9%
Permanent 32 50%
Temporary 25 64%
Regular 21 42%
Grant Total 50 100%

INTERPRETATION

According to the Graph Given above. 9% of the respondent is Reserve Margin, 50% of the respondent is
Permanent, and 64% of the respondent is Temporary and 42% of the Regular Working Capital

Q.6) Travels Propensity Is a measure Of?

NO RESPONDENT %
Population Engaging 42 84%
The Ratio Of Day Trips To Overnight 2 4%
Visits
56
 Tourism Market Share Of a Country 26 52%
Frequency Of Travel Of a Population 45 9%
Grant Total 50 100%

INTEPRETATION

According to the Graph given above. 84% respondent in the population Engaging. 4% respondent in the Ratio
Of the day Trip Overnight, 2% respondent in the Tourism and 9% respondent are Frequency the Travel.

Q.7) The First Stage of The Tourist Area Lifecycle is

NO. Of Respondent %
Exploration 42 84%
Involvement 36 72%
Development 39 78%
Consolidation 48 96%
Grant Total 50 100%

INTERPRETATION

According to Graph Given above. 84% respondents are Exploration, 72% respondents are Involvement, 78%
respondents are Development and 96% respondents are Consolidation.

Q.8) Gross Working Capital Is

No Of Respondent %
Net Current assets 42 84%
Difference Between C.A n 32 64%

57
 C.L
Gross Current Assets 29 58%
Gross Current Liability 15 3%
Grant Total 50 100%

INTERPRETATION

According to Graph Given In The Above. 84% respondents are Net Current Assets, 645 respondents are
Difference between C.A n C.L, 58% Respondent are Gross Current Asset and 2% Are Gross Current
Liability.

Q.9) Which of the Following Motive Is The Holding Cash

No Of Respondent %
Transaction Motive 45 90%
Speculative Motive 25 50%
Contingency Motive 36 72%
All Of the Above 12 24%
Grant Total 50 100%

INTERPRETATION

According to Graph Given Above 90% Respondent are Transaction Motive, 50% are Speculative Motive, and
72% Contingency Motive and 24% respondent are all of the above.

Q.10) Permanent Working Capital

No Of Respondent %
Various With the Seasonal Needs 35 70%
Option Includes Fixed Assets 25 50%
58
 Current Required Need The firm 26 52%
Include Account Payable 43 86%
Grant Total 50 100%

INTERPRETATION

According To the Graph Given Above. 70% respondent is various With The Seasonal Needs, 52% respondent
is Current Required Need Fixed Assets, 50% respondent is Current Required and 86% respondent is Includes
Amount Payable.

Q.11) Environment Cost of Transport Paid For by

No Of Respondent %
The Community 42 80%
The Transport Operate 32 69%
The Transport Passenger 12 43%
International Transport 26 50%
Organization
Rant Total 50 100%

INTERPRETATION

According to the graph given above. 80% respondent is The Community, 69% respondent is Transport
Passenger, 43% respondent is Transport Operate and 50% respondent is International Transport Organization.

CHAPTER 5

59
 Suggestion And Conclusion

SUGGESTION

The Shree dayal tours The net working capital has declined in the year 2007-2008 and but the profit of the
company was increased in the year 2007-2008 & Travels Pvt. Ltd has abled to repay the liability & The
company has abled to repay the liability of the creditors because of the current ratio of SDT In the year 2007-
2008 the current assets of the Shree Dayal tours and travels Pvt. Ltd has declined and current liability of the
company has increases there for the net working capital declined. There for the current ratio has declined. The
net working capital of the company has increased remaining year .But profit has increased because the sales
has increased in the year 2007-2008. loan of the creditors or not. Suggestion: - &TPL is above the standard of
current ratio i.e. 2:1. The profit of the company has increased every year.• Conclusion:- The Shree New Sai
tours & travels Pvt. Ltd has profit orient company and company has to able to the repay of his liability. The
company has sufficient reserve and surplus and reserve and surplus has increases every year. After going
through the different aspects of the industry departments and the awards it has received in different fields.
There is good relationship between the directors and employee. The management concerned about employees
complete health and wealth.

This company has taking order from the supplier and prepare a cloth. This company has provided
many offer more than 15 leisure tour product to Singapore and Europe, more than 10 to south East Asian and
is the Domestic and international tour operator in Indian tours. Shree New tours & Travels Pvt. Ltd also takes
pride in being consistently innovation in the tourisms industry. The Shree new Sai Tours & Travels Private
Limited is customer focused and Quality oriented

Service unit, which is continuously strive to services to meet its external customer’s requirements.
The main goal of the company is to giving full satisfaction to the customer and providing good quality of
service, enhancing to improve the services and make company more competitive. The Shree New Sai Tours
& Travels Private Limited has specialized divisions to cater to the needs of all types travelers, whether it is a
guest looking for the safety and security of escorted group tours, or someone seeking exclusive customized
holidays or the business traveler .We offer our guests a range of allied travel services such as air ticketing,
Visa, Foreign exchange and hotel booking at one stop for their convenience. 

BIBLOGRAPHY
60
www.wikipedia.com

www.WorkingCapitalManagementOfTravelsAgency.com

www.Tours and Travels Agency.com

BOOK REFERENCE

Tours and Travels of Badshah Patil

R.K Gupta Of Tours & Travels

61