A Study on Working Capital

INTRODUCTION
DEFINITION OF WORKING CAPITAL
According to M.Y. Khan and P.K. Jain “Working capital refers to manage the
firm current assets and current liabilities in such a way that a satisfactory level of
working capital is maintained.
According to the cubing working capital is an amount of fund is necessary to
cover the cost of operating the enterprise.
Working capital management is concerned with the problem is that arise in
attempting to manage the current assets and the current liabilities and their inter
relationship their arise between them.
Current assets refers to those assets which to the ordinary course of business
can be or will be turned into cash within one year without undergoing a diminution in
value and without disrupting the operations of the firm.
The major current assets are cash marketable securities accounts receivable and their
inception to be paid in the ordinary course of business within
a year out of current assets (or) earnings of the concern. The basic current liabilities
are Bills payables. Bank overdrafts and outstanding expenses.
The goal of working capital management is to manage the firm current assets
and current liabilities in such a way that a satisfactory level of working capital is
maintained.
Thus the current assets should be large enough to cover its current liabilities in
order to ensure a reasonable margin of safety. Each of the current assets must be
efficiently in order to maintain the liquidity of the short term be managed efficiently
in order to maintain the liquidity of the short term sources of financing must be
continuously managed to ensure that they are obtained and used in a best possible
way.
Therefore interaction between current assets and current liabilities in the main
theme of working capital management.
Profits are earned with to help of assets. Which are partly fixed and partly
current working capitals some times referred to as “CIRCULATING CAPITAL”.
“WORKING CAPITAL” is also called as “CIRCULATING CAPITAL”

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CONCEPTS:
GROSS WORKING CAPITAL:
The Gross working capital is the firm investment in current assets. The current
Assets are Assets which can be converted into cash with in an accounting year and
include cash within an accounting year and include cash. Short term securities like
debtors. Bills Receivables and investor.
Gross working capital constituted current Assets.
1. Inventory: which are further classified into
a. Raw materials
b. Working in progress
c. Finished goods
2. Accounts Receivables:
a. Cash and bank balance.
Any" business firm needs to provide it with enough of these current Assets. So
that it an carry on its business operation smoothly.
These Assets are essential circulating in nature. That is to say that the business
buys raw materials with cash Receivable as a result or cash sales.
NET WORKING CAPITAL:
Net working capital refers to the difference between current assets and current
liabilities are those claims outsiders which are expected to mature are payment within
an accounting year and include creditors Bills payables and outside expenses.
Net working helps the management to look after the permanent sources for its
financing working capital under this approach does not increase with increase in short
term borrowing.
Profits are earned with the help of assets which are partly fixed and partly
working capital some times referred to as "CIRCULATING CAPITAL" or
"WORKING CAPITAL".
NEED FOR WORKING CAPITALS:
Business firms aim at maximizing the wealth of shareholders. In its endeavor
to maximize shareholder's wealth a firm should earn sufficient return from its
operation earning a steady amount of profits required successfully sales activity. The
firm has to invest enough funds in current assets for the success of sales activity

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current assets are needed because sales doesn't convert into cash instantaneously there
is always an operating cycle involved in the conversion of sales into cash.
Level of working capital is necessary on a continuous and uninterrupted basis.
This requirement is referred to as permanent level of working capital is temporary.
Fluctuating or variable working capital. This is portion of the required working capital
is needed to meet fluctuating in demand consequent upon changes in production and
sales as a result of seasonal changes.The above shows permanent level is fairly
constant. While temporary working capital is fluctuating some times increasing and
some times decreasing in accordance with seasonal demand. In the case an expanding
firm the permanent working capital may not be a horizontal. This is because the
demand for permanent current assets might be increasing or decreasing supports a
rising level of activity. In that the line should be a rising one.
PERMANENT AND TEMPORARY WORKING CAPITAL:
Both kinds of working capital are necessary to facilitate the sale process
through the operating cycle. Temporary working capital is created to meet liquidity
requirements that are purely transient in nature.
ROLE OF FINANCIAL MANAGER IN WORKING CAPITAL
MANAGEMENT
1. Working capital management requires must of the finance manager time as it
represent a large position of investment is assets.
2. Working capital management requires much of the finance management time
as it represent larger position of investment in assets.
3. Action should be taken to curtail unnecessary investment in current assets.
4. All precaution should be taken for the effective and efficient management of
working capital.
5. I agree have to manage their current assets and current liabilities very carefully
and should see that the work should be done properly in order to achieve
predetermined organizational goals.
6. The financial manager should pay special attention to the management of
current assets on continuing basis.

Finance is one the basic foundations of all kinds of economic activities. It is

the master key, which provides access to all the sources for being employed in
manufacturing. Hence it is rightly said that finance is lifeblood of any enterprise,

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besides being the scarcest elements, it is also the most indispensable requirement.
Without finance neither any business can be started nor successfully run. Provision of
sufficient funds at the required time is the key to success of concern. As matter of fact
finance may be said to be the circulatory system of economic body, making possible
the needed co-operation among many units of the activity.

FINANCIAL MANAGEMENT

Financial management emerged as a distinct field of study at the turn of this

Century. Many eminent persons defined it in the following ways.

DEFINITIONS

“According to GUTHMANN AND DOUGHAL “Business finance can

broadly be defined as the activity concerned with planning, rising, controlling and
administering of funds used in the business.”

“According to BONNEVILE AND DEWEY “Financing consists in the rising,

providing and managing of all the money, capital or funds of any kind to be used in
connection with the business.”

“According to Prof. EZRA SOLOMAN “Financial management is concerned

with the efficient use of any important economic resource, namely capital funds.”

FINANCIAL FUNCTIONS

The finance functions of raising funds, investing them in assets and

distributing returns earned from assets to shareholders are respectively known as
financing, investment and dividend decisions. While performing these functions, a
firm attempts to balance cash inflows and outflows. This is called as liquidity
decision.

The finance functions can be divided into three broad categories.

 Investment or long-term asset mix decision

 Financing or capital mix decision

 Dividend or profit allocation decision

 Liquidity or short-term asset mix decision

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INVESTMENT DECISION

Investment or capital budgeting involves the decisions of allocation of cash or

commitment of funds to long-term assets, which would yield benefits in future. It
involves measurement of future profitability, which involves risk, because of
uncertain future. Investment proposal should therefore be evaluated in terms of both
expected return and risk. Other major aspect of investment decision is the
measurement of standard or hurdle rate against which the expected return of new
investment can be compared.

FINANCING DECISIONS

Financing decision is the second important function to be performed by the fir.

Broadly, he must decide when, where, and how to acquire funds to meet the firm’s
investment needs. He has to determine the proportion of debt and equity. This mix of
debt and equity is known as the firms ‘capital structure’. The financial manager must
strive to obtain the least financing mix or the ‘optimum capital structure’ where the
market value of share is maximized.

DIVIDEND DECISIONS

It is the third major financial decision. The financial manager decides whether
the firm should distribute all profits, or return them, or distribute a portion and return
the balance. The optimum dividend policy should be determined where is maximizes
the markets value of the share.

LIQUIDITY DECISIONS

Current assets management, which affects firm’s liquidity, is yet another

finance function in addition to the management of long-term assets. Current assets
should be managed effectively safeguarding the firm against the dangers of liquidity
and insolvency.

Investment in current assets affects the profitability, liquidity, and risk. A

conflict exists between profitability and liquidity while managing current assets. If the
firm doesn’t invest sufficient funds in current assets it may. Become illiquid. But it
could lose profitability, as idle CA would not earn anything. Thus a proper takeoff
must be achieved between profitability and liquidity.

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GOALS OF FINANCIAL MANAGEMENT

Maximize the value of the firm to its equity shareholders. This means that
the Goals of the firm should be to maximize the market value of its equity shares
(Which represent the value of the firm to its equity shareholders)
 Maximization of profit.
 Maximization of earnings per share.
 Maximization of return on equity (defined as equity earnings/net worth).
 Maintenance of liquid assets in the firm.
 Ensuring maximum operational efficiency through planning, directing and
Controlling of the utilization of the funds i.e., through the effective
employment of funds.
 Enforcing financial discipline in the use of financial resources through the
coordination of the operation of the various divisions in the organization.
 Building up of adequate reserves for financing growth and expansion.
 Ensuring a fair return to the shareholders on their investment.
The key challenges for the finance manager in India appear to be in the
following areas

 Investment Planning

 Financial Structure

 Treasure Operations

 Foreign Exchange

 Investor Communication

 Management Control.

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INDUSTRIAL PROFILE

DAIRY INDUSTRY

Dairy is a place where handling of milk and milk products is done and
technology refers to the application of scientific knowledge for practical purposes.
Dairy technology has been defined as that branch of dairy science, which deals with
the processing of milk and the manufacture of milk products on an industrial scale.

The dairy sector in the India has shown remarkable development in the past
decade and India has now become one of the largest producers of milk and value-
added milk products in the world.

The dairy sector has developed through co-operatives in many parts of the
State. During 1997-98, the State had 60 milk processing plants with an aggregate
processing capacity of 5.8 million litres per day. In addition to these processing
plants, 123 Government and 33 co-operatives milk chilling centers operate in the
State.
Also India today is the lowest cost producer of per litre of milk in the world, at
27 cents, compared with the U.S' 63 cents, and Japan’s $2.8 dollars. Also to take
advantage of this lowest cost of milk production and increasing production in the
country multinational companies are planning to expand their activities here. Some of
these milk producers have already obtained quality standard certificates from the
authorities. This will help them in marketing their products in foreign countries in
processed form.

The urban market for milk products is expected to grow at an accelerated pace
of around 33% per annum to around Rs.43,500 crores by year 2005. This growth is
going to come from the greater emphasis on the processed foods sector and also by
increase in the conversion of milk into milk products. By 2005, the value of Indian
dairy produce is expected to be Rs 10,00,000 million. Presently the market is valued
at around Rs7,00,000 mn.

MILK PRODUCTION FROM 1950 TO 2020

1950 – 17 million tonnes

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1996 – 70.8 million tonnes

1997 – 74.3 million tonnes
(Projected) 2020 – 240 million tonnes
Expected to reach- 220 to 250 mt – 2020

India contributes to world milk production rise from 12-15 % & it will
increase up to 30-35% (year 2020)

RESEARCH AND DEVELOPMENT IN DAIRY INDUSTRY

The research and development need to the dairy industry to develop and
survives for long time with better status. The various institute and milk dairy
companies R and D results provide base for today’s industry growth and
development. The research and development of products of dairy, like yogurt and
cheese market research and company reports provides insights into product and
market trends, analysis opportunities, sales and marketing strategies will help local
milk unions to develop and spread world wide through obtaining this knowledge.
Specific on market share, segmentation, size and growth in the US and global markets
are also helps industry to expand its market worldwide even small union also.

DEVELOPMENT OF FOOD PROCESSING INDUSTRY

The food processing industry sector in India is one of the largest in terms of
production, consumption, export and growth prospects. The government of accorded
it is a high priority, with a number of fiscal relieves and incentives, to encourage
commercialization and value addition to agriculture produce, for minimizing harvest
wastage, generating employment and export growth.
Food processing industry is providing backbone support to the milk industry.
The development food products by using milk can give good market opportunities to
produces milk.

PRODUCTS AND INDUSTRY STATUS

Among the products manufactured by organized sector are Ghee, Butter,
Cheese, Ice-Creames, Milk powders, Melted milk food, Infant food, condensed milk

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etc.. some milk products like Casein and Lactose are also being manufactured lately.
Therefore, there is good scope for manufacturing these products locally.

INVESTMENT POTENTIAL IN MILK PRODUCTS

At the present rate of growth, India is expected to overtake the US in milk
production by the year 2010, when demand is expected to be over 125.69 ml.tn. Being
largely imported, manufacture of casein and lactose has good scope in the country.
Exports of milk products have been decentralized and export in 2005-2010 is
estimated at 71.875 cr.
India is the world leader in milk production with total volume of 115 million
tons. Driven by steady population growth and rising income, milk consumption
continues to rise in India. Dairy market is currently growing at an annual growth rate
of around 7 per cent in volume terms. The market size of Indian dairy industry stands
at around US$ 45 billion.
 
Since India’s population is predominantly vegetarian; milk serves as an
important part of daily diet. Indians use milk in various preparations such as in
brewing tea and coffee, in making yogurt or curd and in preparing many Indian
dishes. For most households, milk is also a popular beverage due to its nutritional
value.
  In India, rural households consume almost 50 percent of total milk production.
The remaining 50 percent is sold in the domestic market. Of the share of milk sold in
the domestic market, almost 50 percent is consumed in fluid form, 35 percent is
consumed as traditional products (cheese, yoghurt and milk based sweets), and 15
percent is consumed for the production of butter, ghee, milk powder and other
processed dairy products (including baby foods, ice cream, whey powder, casein, and
milk albumin).
 
Most dairy products are consumed in the fresh form and only a small quantity
is processed for value addition. In recent years, however, the market for branded
processed food products has expanded. Although only around 2 per cent food is
processed in India, still the highest processing happens in the dairy sector, where 35

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per cent of the total produce is processed, of which only 13 per cent is processed by
the organized sector.

Sruthi Milk Dairy with 185 million cows and 154 million buffaloes. Have the
largest population cattle in the world. Total cattle population in the country as on
October 2010 stood at 339 million. More than 50% of buffaloes and 20% of cattle in
the world are found in India and most of these are milk cows and milk buffaloes.

Sruthi Milk dairy sector contributes a large share in agriculture gross domestic
products. Presently there are around 70,000 village dairy cooperatives across the
country. The cooperative societies are federated into 170 district milk producers
unions, which in turn have 22 state cooperative dairy federations. Milk production
gives employment to more leading producer of milk in the world followed by USA.
The milk production in 1999-00 estimated at 78 million metric tons as compared
expected to increase to 81 million metric tons by 2000-01. Of this total produce of 78
million cows’ milk constitute 6 million metric tones while rest is from other.

While world milk production declined by 2% up last three years, according to

FAC estimates. Indian production has increased by 4%. The milk production in India
accounts for more than 13% of the total world output and 57% of total Asia’s
production. The top view milk producing nations in the world are idea, USA, Russia,
Germany and France.

Although milk production has grown at a fast pace during the last three
decades milk yield per animal is very low. The main reasons for the low yield are:

1. Lack of use of scientific practices in milking.

2. Inadequate availability of fodder in all seasons.

3. Non-availability of veterinary health services.

INDIA: WORLD LARGEST MILK PRODUCER

India has become the world’s no.1 milk producing country. United States
where the milk production is anticipated to grow only marginally at 71 million tones,
occupied the slot till 1997. In the year 1997, India’s milk production was on par with
the U.S at 71 million tones.

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India’s annual milk production has more than trebled in the last 30 years,
rising from 21 million tones in 1968 to an anticipated 80 million tones in 2001. This
braid growth and modernization is largely credited to contribution of dairy
cooperatives, under the operation flood (of) project, assisted by many multi-lateral
agencies, including the European union the world bank in the Indian context of
poverty and malnutrition’s, milk has a special role to play for its man notional
advantages as well as providing supplementary income to some 79 melon farmers in
over 500,000 remote villages.

MARKET SIZE AND GROWTH

Market size for milk (sold in loss/packaged from) is estimated to be 36 million

metric tones valued at Rs.470 billion; the market is currently growing at round 4% per
annum in volume terms. The milk surplus states in India are Uttar Pradesh, Punjab,
Haryana, Rajasthan, Gujarat, and Maharashtra, Andhra Pradesh, Karnataka and
TamiLnadu. The manufacturing of milk products is concentrated in these milk surplus
states. The top 6 states viz.

Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamilnadu and Gujarat

together account for 58% of national production.

Milk production grew by a mere 1% per annum, between 1947 and 1970.
Since the early 70's under operation flood, production growth increased significantly
averaging over 5% per annum.

About 75% of milk is consumed at the household level, which is not a part of
commercial dairy industry. Loose milk has a larger market in India as it is perceived
to be fresh by most consumers. In reality however. It poses a higher risk of
adulteration and contamination.

The production of milk products, that is milk products including infant milk
food, malted food, condensed milk and cheese stood at 3.07 lacks metric tons in 1999.
Production of milk powder including infant milk food has risen to 2.25lkh metric tons
in 1999, whereas that puff-malted food is at 65,000 metric tons cheese and condensed
milk production stands at 5000 and 11000 metric tons respectively in the same year.

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MAJOR PLAYERS

The packaged milk segment is dominated by the dairy cooperatives. Gujarat

cooperative milk Marketing Federation (GCMMF) is the largest player. All other
local dairy cooperatives have their local brands (for e.g. Gokul, Warana in
Maharashtra, Sarasin Rajasthan, verka in Punjab, Vijaywada in Andhra Pradesh,
Avian in Tamil Nadu, etc.)

Other private players include J.K.Dairy, Heritage Foods, Indian Dairy, and
Dairy Specialties etc. Amrut industries, once a leading player in the sector has turned
bankrupt and in facing liquidation.

EXPORT POTENTIAL

India has the potential to become one of the leading players in milk product
exports.

LOCATION ADVANTAGE

India is located amidst major milk deficit countries in Asia and Africa. Major
importers of milk and milk products are Bangladesh, China, Hong Kong, Singapore,
Thailand, Malaysia, Philippines, Japan UAD, Oman and other gulf countries, all
located close to India.

CONCERNS IN COMPETITIVENESS ARE QUALITY

Significant investment has to be made in milk procurement equipment,

chilling and refrigeration facilities. Also, training has to be imparted to improve the
quality to bring it up to international standards.

PRODUCTIVITY

To have an exportable surplus in the long term and also to maintain cost
competitiveness, it is imperative to improve productivity of Indian cattle.

FOREIGN COLLABORATION IN INDIA

The liberalization of the Indian economy in 1991 has attracted multinational

dairy enterprises in hundreds. Specialty dairy products like cheese; casein, lactose
and multinational corporations are now manufacturing whey proteins in India. The

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advent of foreign brands produced in India is changing the profile in the national dairy
industry.

PACKAGING TECHNOLOGY

The local milkman initially sold milk door to door. When the diary
cooperatives initially started marketing branded milk, it was sold in glass bottles
sealed with foil. Over the years several developments in packaging media have taken
place. In the early 80’s plastic pouches replaced the bottles. Plastic pouches made
transportation and storage very convenient, besides reducing costs. Mild packed in
plastic pouches/bottles have a shelf life of just 1-2 days, that too only if refrigerated.

FUTURE PROSPECTS

Sruthi Milk dairy sector is expected to triple its production in the next 10 years
in view of expanding potential for export to Europe and the West. Moreover with
WTO regulations expected to come into force in coming years all the developed
countries which are among big exporters today would are the withdraw the support
and subsidy to their domestic milk products sector.
DAIRY EQUIPMENTS

Designed with the aid of latest technology, our range of Dairy Equipment is
appreciated for optimum performance and durability. Offered at industry leading
price, these are widely in milk industry to store and process milk. We offer our range
in different specifications provided by our clients.

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HOMOGENIZER
We are reckoned as one of the chief Dairy Homogenizer Manufacturers,
Exporters and Suppliers based in India. Made using superior quality raw material,
these Dairy Homogenizers are widely demanded in dairy industry due to their better
performance and high efficiency. The Dairy Homogenizers offered by us are widely
appreciated for enhancing the consistency of a product by dispersion. The Dairy
Processing Plants offered by us are known for upgrading the co lour, flavor and
appearance of the products and even avoid occurring of the ring formation.

Advantages :

 Better product stability

 Smoothness of product
 Avoids rise of the cream layer

DAIRY PRODUCTS
Utilizing our years of experience and advanced infrastructure, we offer our
clients Dairy equipment, which is in compliance with international quality standards.
In-built features, for better compatibility with continuous as well as batch mode of
process designing, makes it perfect choice for various industries such as food
processing and milk dairy.

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INDUSTRIAL HOMOGENIZER
We are one of the leading manufacturers of Turn Key Liquid Milk Dairy
Plants or dairy processing plants, which are manufactured using superior quality raw
material. These are heavily demanded in dairy industry due to efficient performance
and cost effectiveness. Our range is equipped with in-built features to ensure proper
functioning.

MILK PASTEURIZERS
HTST continuous pasteurizers are extensively used for pasteurization of milk
and cream in dairy and food industries. Plate heat exchangers based pasteurizer offer
enormous convenience for processing milk, cream with flexibility, high thermal
efficiency and effective heat transfer. The system is compact, requires minimal space
and is very easy to expand capacity by adding additional plates.

SKID MOUNTED PROCESS

We have utilized over a decade experience for creating synergies with global
technologies so as to bring out a locally acceptable techno-commercially viable range
of dairy equipments. We have utilized a generic strategy of cost leadership through
focus on quality and integration of different dairy equipments in a dairy project. You
may always rely on our equipment for international quality at domestic prices. The
equipments have inbuilt features for better compatibility with continuous as well as
batch mode of process designing.

Services for Dairy Industry:

 Boilers, Hot Water Generator, Thermal Fluid Heater's Erection and

Commissioning.

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 HT / LT Cabling, Power Control Centre, Motor Control Centre, Complete

Fabrication Erection and commissioning.
 Effluent treatment plant for dairy industry.
 Milk, Butterfat and Milk Powder Packing Automatic Form Fill and Seal
(FFS) machines.
 Conveyor and product flow automation system.
 Complete refrigerated chain systems for dairy and food industry.

PASTEURIZER
We are the largest manufacturer of high quality pasteurizing machine.

CREAM SEPARATOR
We are the largest manufacturer of high quality cream separator machines .It can
process 80 liters milk per hour.

Max. milk output, l/h 80

Drum rotational speed, min-1 10500 

Number of disks in drum, pcs 10 to 12

Milk bowl capacity, l 12

Max. butter-fat content in 0.05

skimmed milk, %

Cream/skimmed milk volume 1:4 to 1:10

proportion adjustment range
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STORAGE TANK  
 We manufacture custom storage tanks for the chemical, pharmaceutical and
food process industries

MILK PUMP
We manufacturer and exporter of milk pump and dairy milk pump with high quality
and fully automatic 
 Our range of pumps is appreciated owing to the following features:
• Low power consumption
•High performance
•Excellent suction performance

 High capacity

WEIGH BOWL
The superior quality of Weigh Bowl manufactured by our company is made from
good quality raw material which makes them durable.

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HOT WATER GENERATOR

We design & manufacture various types of process heat equipments like hot water
generators, agro waste fired hot water generators and hot water boilers.

Features are

1. Rugged construction
2. Low maintenance
3. High efficiency

REFRIGERATION SYSTEM

We are engaged in the supply of ice bank tank that are in high demand in the domestic
market. Manufactured from superior quality SS (304) these are used for dairy, chilled
milk tank, plate heat exchanger.

 COLD ROOM

Carrier panels are manufactured in thickness of 60mm,80mm,100mm,120mm and

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150mm.

Carrier offers indigenous equipments ranging from 1 HP to 5 HP for positive

temperature and 1.6 HP to 3.2 HP for negative temperature applications.

For larger refrigeration equipments, Carrier offers imported equipments from own
overseas factories and sourcing partners.

Carrier offers end to end solutions from farm to retail covering wide spectrum of
applications such as Pre-cooling, Blast freezer, IQF, Controlled
atmosphere/Modified atmosphere and large cold storages. 

CONVEYOR
We are the largest manufacturing of high quality automatically operated conveyers.
Conveyor systems are used widespread across a range of industries. These systems
are commonly used in many industries, including the automotive, agricultural,
computer, electronic, food processing,[4] aerospace, pharmaceutical, chemical, bottling
and canning, print finishing and packing.

Types of conveyer systems are:

1. Belt conveyer
2. Flexible conveyer
3. Vertical conveyer.... etc

KHOVA MAKING MACHINE

We are the largest manufacturer of high quality with fully automatic khova making
machine.
Motor Gear: 1 HP Single Phase

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Blower Motor: 0.5 HP Single Phase (Diesel Burner)

Fuel Consumption: 1 to 2 Liter Diesel / Kerosene or 500 to 600 gm of LP Gas /
10Litre
Production Cap: 30 Liter Milk convert to khova per hour
Operated By: Only one un-skilled labour

BUTTER CHURNING MACHINE

The company exclusive range of butter churn that can churn out quality butter. Made
of quality materials these butter making machine are in accordance with an
international standards.

COMPANYPROFILE
SRUTHI MILK PRODUCT PVT.LTD. Was started in the year 2002 by
Mr.P.BABU REDDY, M.B.A Chairman. The managing director of the Sruthi Milk

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Products Pvt.Ltd was S.NEERAJAKSHULU NAIDU M.B.A. SRUTHI MILK

PRODUCTS PVT. LTD. Was situated in NH – 4, Chennai – Banglore By Pass Road,
Chittoor Mandal, Chittoor (Dt.), Andhra Pradesh. An area where basic raw material
milk is available in plenty. The main function of the company is to procure the milk
(raw) in and around Sadum taluk and process the milk at factory, pack the processed
milk and supply in to the Chennai and Bangalore cities.

The product range of the company is

1. Milk (toned, full cream milk)

Toned Milk which is having 3% fat and have 8.55 of SNF (solid not fat) which
is available at Rs.13/- Per.ltr.

Full cream milk which is having 6.5% fat and have 9% of SNF (solid not fat)
which is available at Rs.16/- per.ltr.

2. Cream

3. Ghee

SRUTHI MILK PRODUCTS PVT. LTD. enjoys excellent reputation as a fair and
reliable of raw milk from dairy farmers.

QUALLITY CONTROL
The most significant aspect of S.S dairy is its quality products reflecting its
sound quality functions. It has well equipped laboratory with the sound work culture.
Recognizing quality as they key to prosperity the dairy has laid specific emphasis on
quality control operates with major functions like assessing commercial quality,
minimizing spoilages ensuring quality conformity milk and milk products, exercising
process controls, assessing sanitation, status of equipment, inspection of additives
formulation of standards and inspections of packaging materials, developing test
methods, stability and accelerated tests for quality guarantee of the products and
review of market
Procurement complaints
for improving
the production
Sruthi Milk Product
Production Promotion
practices.
Pvt.Ltd.

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SRUTHI MILK PRODUCTS PVT LTD FOUR P’S OF

PROFITABLE DAIRY

 Procurement
 Production
 Processing
 Promotion

PROCUREMENT

Procurement covers collection of milk from rural producers or contractors,

including setting up of chilling centers. Provisions of laboratory equipment and
supplies milk vending machines, cattle welfare including feeding and fodder and
transportation.

PRODUCTION

Promotion includes activities of producing various types of liquid milk. The

conventional whole toned and standardized as well as innovative like extra, nutrition
for school children, pregnant mothers, the aged and infirm, low fat for the calorie
conscious.

PROCESSING

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Processing products includes that the collected milk is stored and after storing
the milk is converted in to toned milk and full cream milk, ghee and cream is made
from the milk in the dairy.

PROMOTION

Promotion covers activities like brand promotion setting by dairy parlors,

buying milk in bulk and repacking to self, distribution, which will result in building
and image either nationally and regionally.
Sruthi Milk Products Private Limited is a professionally managed company
engaged in the manufacture of a wide range of Dairy Products which include Milk in
Sachets, Sweets, Flavored Milk, Curd in Cups and Sachets, Milk Powder, Butter,
Ghee and Butter Oil both in bulk as well as in consumer packs..

Established in 1998, Sruthi Milk Products (P) Ltd. is one of the fastest
growing Private Sector Enterprises in India with a team of dedicated professionals.
The company has one of the most modern and versatile plants in the Indian Dairy
Industry with state-of-the-art technology Sruthi Milk Products (P) Ltd. products meet
stringent quality control tests and cater to the premium segment of the market for
Dairy Products. Sruthi Milk Products (P) Ltd. is presently implementing an expansion
programmer and proposes to launch new products in the near future.

Presently our market presence is in Andhra Pradesh, Karnataka and Tamil

Nadu. We handle more than 12 Lakh liters of milk per day in our packing stations and
dairy plant, Sruthi Milk Products (P) Ltd. sells a rich, varied offering of nutritious,
tasty and healthy food products under well-known brand. Taste, health, convenience,
reliability and vitality for consumers are key characteristics.

Our milk comes from cattle herd that receive the best care along with healthy
and nutritious diet in the form of quality feed to ensure that they produce wholesome,
high-quality milk.

THE MAJOR CONTRIBUTORS TO THE SUCCESS OF SRUTHI

MILK PRODUCTS (P) LTD. ARE:-

 Milk Procurement Network

 Superior sales and marketing prowess

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 Strategic technological & infrastructural advantage

 Efficient human investment

We have the advantage of

 Procurement of Quality Buffalo and Cow milk through a strong network of

chilling centers spread across states of Andhra Pradesh, Tamil Nadu and
Karnataka.
 Strong roots in local markets and first-hand knowledge of the local culture.
 Business intelligence and technical expertise that is applied to serve our
consumers.
 Strong management focus

PRODUCT PROFILE

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The milk sold in the market as buffaloes milk is often mixed with cow’s milk,
buffaloes milk has portion of total solid and fats and then cow’s milk and admits of
large dilution with water. So highly rich in fat contents.

TYPES OF MILK

According to quality (fat) we can divide in to three types of milk they are.

1. Toned milk ,which is having 3%fat and have 8.5% of SNF(solid not fat) which
is available at Rs.16/- per.ltr.
2. Full cream milk which is having 6.5% fat and have 9% of SNF which is
available at Rs.20/- per. lit.
3. Skim milk which is having 05 fat and have 6% of SNF which is available at
Rs.10/- per.ltr.

THE SRUTHI MILK DAIRY LTD HAS THREE PRODUCTS

1. Milk (toned full cream, skim)

2. Cream

3. Ghee

4. Curd

Competitors for Sruthi Milk Products Pvt.Ltd.

1. Nandini

2. Heritage

3. Dodla

4. Sangam

5. Tirumala.

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REVIEW OF LITERATURE
WORKING CAPITAL MANAGEMENT

Working capital is that amount of funds, which is required to carry out the
day-to-day operations of an enterprise. It may also regard as that position of an
enterprise total capital, which is employed in its short-term operations. This operation
consists of primarily such items such as raw materials, semi-finished goods, finished
goods, sundry debtors, short-term investments etc. Thus working capital also refers to
all the short-term assets known current assets used in day-to-day operations of an
organization.

DEFINITION OF WORKING CAPITAL

“Working Capital sometimes called as Net Working Capital is represented by

the excess of current assets over the current liabilities and identified the relatively
liquid portion to total enterprise capital which constitutes a margin of buffer for
maturing obligations within the ordinary operating cycle of the business”.

‘Working Capital is a excess of current assets over current liabilities’.

CONCEPT OF WORKIGN CAPITAL

There are two concepts of working capital such as

1. Gross Concept

2. Net Concept

GROSS WORKING CAPITAL: (GWC)

The gross working capital simply called as working capital, refers to the firm’s
investment in current assets. Current assets are the assets which can be converted into
cash within an accounting year (or operating cycle) and include cash, short-term
securities, debtors, bills receivables, inventories and prepaid expenses.

Gross Working Capital = Total of Current Assets

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NET WORKING CAPITAL: (NWC)

The Term Net Working Capital, can be defined in two ways

“The Excess of Current assets over Current liabilities“

“That portion of a firm’s current assets which is financed with long term funds

Net Working Capital = Current Assets - Current Liabilities

Net working capital can be positive or negative. A positive net working

capital will arise when current assets exceed current liabilities. A negative working
capital occurs when current liabilities are in excess of current assets.

The two concepts of working capital gross and net are not exclusive; rather
they have equal significance from the management viewpoint.

The gross working capital focuses attention on two aspects of current assets
management such as

 Optimum investment in current assets and

 Financing of current assets

The consideration of the level of investment in current assets should avoid two
danger points excessive and inadequate investment in current assets. The investment
in current assets should be just adequate, not more, nor should less, to the need of the
business firm excessive investment in current assets be avoided because it impairs the
firm’s profitability, as idle investment earns nothing. On the other hand, inadequate
amount of working capital can threaten solvency of the firm because of its inability to
meet its obligations. It should be realized that the working capital needs of the firm
may be fluctuating with changing business activity.

This may cause excess or shortage of working capital frequently. The

management should be prompt to initiate an action and correct imbalances.

Another aspect of the gross working capital points to the need of arranging
funds to the need of arranging funds to finance current assets. Whenever a need for
working capital arises due to the increasing level of business avidity or for any other
reason. Financing arrangement should be made quickly. Similarly, if suddenly, some
surplus funds arise they should not be allowed to remain idle, but should be invested

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in short term securities. Thus, the financial manager should have knowledge of the
sources of working capital funds as well as investment avenues where idle funds may
be temporarily invested.

Net working capital, being the difference between current assets and current
liabilities, is a quality concept it

 Indicate the liquidity position of the firm and

 Suggests extent to which working capital needs may be financed by

permanent sources of funds.

Current assets should be sufficiently in excess of current liabilities to

constitute a margin or buffer for maturing obligations within the ordinary operation
cycle of a business. In order to protect their interests, short term creditors always like
a company to maintain current assets at a higher level than current liabilities.

It is conventional rule to maintain the level of current assets twice of the level
of current liabilities. However, the quality of the current assets should be considered
in determining the level of current assets vis-à-vis current liabilities.

We know that firm aim at maximizing the wealth of the share holder’s wealth,
a firm should earn sufficient returns from its operations earning a steady amount of
profit requires successful sales activities. The firm has to invest enough funds in
current assets for the success of sales activity. Current assets are needed because
sales do not convert into cash instantaneously. There is always an operating cycle
involved in conversion of sales into cash.

WORKING CAPITAL GAP: (WCG)

The Working capital shall be met from the NWC and from current liabilities
and still there shall be some gap left to meet the total requirement.

Hence, WCG is the gap between the total working capital required and total
funds brought on long term basis and market borrowing liabilities excluding short
term finance available from banks / financial institutions.

WCG = TCA – [CL (Excl. STBB)

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These concepts can be better understood from the following diagrammatic

representation.

Liabilities Assets

LTS LTU
NWC

…………

CL
CA
STBB

LTS = Long term Sources CL = Current Liabilities

LTU = Long term uses CA = Current Assets

NWC= Net Working Capital CA – CL [or LTS-LTU]

STBB = Short term bank borrowings

WCG = CA – CL (Excl. STBB)

OPERATING CYCLE

Operating cycle is the time duration required to convert sales, after the
conversion of the resources into inventories, into cash. The operating cycle of a
manufacturing company involves three phases;

 Acquisition of resources such as raw material, labor, power fuel etc.,

 Manufacture of the product which includes conversion of raw material into

work-in-process into finished goods.

 Sales of the product either for cash or on credit. Credit sales create book
debts for collection.

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DIAGRAM

CASH

Debtors Raw Materials

Sales Work-in-Progress

Finished Goods

Operating Cycle of a manufacturing Firm

CASH

Receivables Inventory Cash Debtors

Operating Cycle of a Non manufacturing Firm Operating Cycle of Service and Finance Firm

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SPECIMEN OF WORKING CAPITAL CHANGES STATEMENT

Statement of Schedule of Changes in Working Capital

Effect on working
Previous Current capital
Particulars
year year Increas
e decrease
Current Assets:
Cash in hand
Cash at bank
Sundry debtors
Temporary Investments
Stocks/Investments
Prepaid Expenses
Accrued Incomes

Total Current Assets

Current Liabilities:
Sundry creditors
Outstanding Expenses
Bank Overdraft
Shot-term Advances
Dividends Payable
Proposed dividends*
Provision For Taxation*

Total current liabilities

Working capital (C.A – C.L)

Net increase/decrease in
working capital.

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For calculation of net operating cycle, various conversion periods are calculated using
the following formulas:

1) Raw material conversion period

Average raw material inventory
RMPC = ------------------------------------------------
Average raw material consumed per day

2) Work-in-progress conversion period

Average work-in-progress
WIPCP = ----------------------------------------------------
Average cost of production per day

3) Finished good conversion period

Average finished goods
FGCP = ----------------------------------------------------------
Average cost of production of goods per day

4) Debtors conversion period

Average debtors
DCP = ------------------------------------
Average credit sales per day

5) Payables deferrable period

Average creditors
PDP = ---------------------------------------
Average credit purchases per day

Inventory conversion period ICP = RMCP + WIPCP + FGCP

Gross operating cycle GOC = ICP + DCP

Net operating cycle NOC = GOC – PDP

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NEED FOR WORKING CAPITAL

Different industries have different optimum working capital profiles,

reflecting their methods of doing business and what they are selling.

 Businesses with a lot of cash sales and few credit sales should have minimal
trade debtors. Supermarkets are good examples of such businesses;

 Businesses that exist to trade in completed products will only have finished
goods in stock. Compare this with manufacturers who will also have to
maintain stocks of raw materials and work-in-progress.

 Some finished goods, notably foodstuffs, have to be sold within a limited

period because of their perishable nature.

 Larger companies may be able to use their bargaining strength as customers to

obtain more favorable, extended credit terms from suppliers. By contrast,
smaller companies, particularly those that have recently started trading (and do
not have a track record of credit worthiness) may be required to pay their
suppliers immediately.

 Some businesses will receive their monies at certain times of the year,
although they may incur expenses throughout the year at a fairly consistent
level. This is often known as “seasonality” of cash flow. For example, travel
agents have peak sales in the weeks immediately following Christmas.

Working capital needs also fluctuate during the year. The amount of funds tied
up in working capital would not typically be a constant figure throughout the year.
Only in the most unusual of businesses would there be a constant need for working
capital funding. For most businesses there would be weekly fluctuations.

Many businesses operate in industries that have seasonal changes in demand.

This means that sales, stocks, debtors, etc. would be at higher levels at some
predictable times of the year than at others.

In principle, the working capital need can be separated into two parts:

 Permanent working capital

 Variable working capital

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PERMANENT AND VARIABLE WORKING CAPITAL

There is always a minimum level of current asserts which is continuously

required by the firm to carry out its business operations. This minimum level of
current assets is referred to as permanent or fixed working capital.

The extra working capital, needed to support the changing production and
sales activities is called fluctuating, or variable or temporary working capital. Both
kinds of working capital permanent and temporary are necessary to facilitate
production and sale through operating cycle, but temporary working capital is created
by the firm to meet its liquidity requirements that will last only temporarily.

Diagrams

Temporary or Fluctuating

Permanent

Time

(Fig-1a)

Temporary or Fluctuating

Permanent

Time
(Fig-2a)

(Fig-1a) illustrates differences between permanent and temporary working capital. It

is shown that permanent working capital is stable over time, while temporary working
capital is fluctuating sometimes increasing and sometimes decreasing.

(Fig-1b)For a growing firm the difference between permanent and temporary working
capital can be depicted through fig-1b.

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ADEQUACY OF WORKING CAPITAL

The firm should maintain a sound working capital position. It should have
adequate working capital to run its business operations. Both excessive as well as
inadequate working capital positions are dangerous from the firm’s point of view.
Excessive working capital means idle funds which earn no profits for the firm.
Paucity working capital not only impairs firm’s profitability but also results in
production interruptions and inefficiencies.

THE DANGERS OF EXCESSIVE WORKING CAPITAL ARE AS

FOLLOWES

 It results in unnecessary accumulation of inventories. Thus, chances of

inventory mishandling, waste, theft and losses increase.

 It is an indication of defective credit policy and slack collection period.

Consequently, higher incidence of had debts results, which adversely affects
profits.

 Excessive working capital makes management com placement, which

degenerates into managerial inefficiency.

 Tendencies of accumulating inventories to make speculative profits grow.

This may tend to make dividend policy liberal and difficult to cope within
future when the firm is unable to make speculative profits.

INADEQUATE WORKING CAPITAL IS ALSO BAD AND HAS THE

FOLLOWING DANGERS

 It stagnates growth. It becomes difficult for the firm to undertake profitable

projects for the non-availability of working capital funds.

 It becomes difficult to implement operating plans and achieve the firm’s

target.

 Operating inefficiencies crept in when it becomes difficult even to meet the

day to day commitments.

 Fixed assets are not utilized for the lack of working capital funds. Thus the
firm’s profitability would deteriorate.

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 Paucity of working capital funds renders the firm unable to avail attractive
credit opportunities etc.,

 The firm loses its reputation when it is not in a position to honour its short
term obligations. As a result the firm faces tight credit terms.

WORKING CAPITAL INVESTMENT POLICIES

(a) Conservative Approach: Under this policy the firm holds relatively large
proportion of total assets in the form of current assets. This policy lowers expected
profitability, assuming that current liabilities remain constant. This policy also
increases the firm’s net working capital position resulting in a lower risk that firm will
encounter financial problems.

(b) Aggressive Approach: Under this policy a firm holds relatively small proportions
of total assets in the form of current assets and thus, has relatively less net working
capital. Consequently this policy yield higher expected profit and higher risk.

(c) Moderate Approach: Under this policy, expected profitability and risk will fall
between those by Conservative approach and Aggressive approach.

The relationship between current assets and sales under the above policies is
shown below:

Conservative Moderate

Aggressive

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DETERMINANTS OF WORKING CAPITAL

There are no set rules to determine working capital requirements of the firms.
A large number of factors influence working capital needs of the firms. All factors
are of equal importance. Also, the importance of factors changes for a firm over time.
Some of the relevant factors are listed below

Nature and size of business

Sales growth

Business cycles

Production policy
Factors Price level changes
affecting
Operating efficiency and
Working
Capital performance

Firm’s credit policy

Availability of credit

Inventory policy

Level of taxes

Abnormal factors

Seasonal fluctuations

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DIMENSIONS OF WORKING CAPITAL MANAGEMENT

There are many aspects of working capital management, which make it an

important function of financial management.

 Working capital management requires much of the financial manager’s time.

 Working capital represents a large portion of the total investment in the assets.

 Working capital management has a greater significance for the smaller firms.

 The need for working capital is directly related to sales growth.

SOURCE OF WORKING CAPITAL

The typical sources of working capital are summarized as below

Funds from operations (adjusted net income).

Sales of non current assets

1) Sales of long term investment (shares, debentures etc.,)

2) Sale of tangible fixed assets (land, buildings etc.,)

3) Sale of intangible fixed assets (goodwill, patents etc.,)

Long term financing

1) Long term borrowings (institutional loans, debentures, bonds etc.,)

2) Issuances of equity and preference shares.

Short term financing - such as bank borrowings.

INVENTORY MANAGEMENT

Inventories constitute the most significant part of current assets of majority

of companies in India. On an average, inventories are approximately 60 percent of
current assets in public limited companies in India. Because of the large size of the
inventories maintained by firms, a considerable amount of funds is required to be
committed to them. It is, therefore, absolutely imperative to manage inventories
efficiently and effectively in order to avoid un necessary investment. A firm
neglecting the management of inventories will be jeopardy dising its long run
profitability and may fail ultimate. It is possible for a company to reduce its levels of

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inventories to a considerable degree, e.g., 10to20 percent, without any adverse effect
on production and sales, by using simple inventory planning and control techniques.
The reduction in excessive carries a favorable impact on a company profitability.

NATURE OF INVENTORIES

Inventories are stock of the product a company is manufacturing for sales and
component that make up the product. The various forms in which inventories existing
a manufacturing company are: raw material, work in process and finished goods.

1. RAW MATERIAL

Are those basic input that are converted in to finished product through the
manufacturing process. Raw material inventories are those units which have been
purchased and stored for future production.

2. WORK IN PROGRESS

Inventories are semi-manufactured product. They represent product that the

need more work before they become finished product for sale.

3. FINISHED GOODS

Inventories are those completely manufactured product which are ready for
sale. Stock of raw material and work in process facilitate production, while stock of
finished goods is required for smooth marketing operation. Thus, inventories serve as
a link between the product and consumption of goods.

NEED TO HOLD INVENTORIES

There are three general motives for holding inventories.

1. Transaction motive emphasized the need to maintain inventories to facilitate

smooth production and sales operation.

2. Precautionary motive necessitates holding of inventories to guard against the

risk of un predictable change in demand and supply forces and other factor.

3. Speculative motive influences the decision to increase or reduce inventory

levels to take advantage of prices fluctuations.

A company should maintain adequate stock of material for a continuous

supply to the factory for an uninterrupted production. A work-in-progress inventory

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builds up because of the production cycle. Stock of finished goods has to be held
because production and sales are not instantaneous.

Failure to supply product to customer, when demanded, would means loss of

the firm’s sales to competitors. The level of finished goods inventories would depend
upon the co-ordination between sales and productions as well as on production time.

MANAGEMENT OF ACCOUNT RECEIVABLE

Trade credit arises when a firm sells its products or service on credit does not
receive cash immediately. It is an essential marketing tool, acting as a bridge for the
movement of goods through production and distribution stage to customer. A grant
trade protects its production of favorable terms. Trade credit creates receivable or
book debt which the firm is expected to collect in the near future. The book debts or
receivable arising out of credit has three characteristics’:

First, it involves an element of risk which should be carefully analyzed. Cash

sales are totally risk less, but not the credit sale as the cash payment is yet to be
received;

Second, it is based on economic value. To the buyer, the economic value in

goods or service passes immediately at the time of sales, while the seller expects an
equivalent value to be received later on.

Third, it implies futurity. The customer from whom receivable or book debts
have to be collected in the future are called trade debtors or simply as debtors and
represent the firm’s claims or assets.

Receivable constitutes a substantial portion of current assets of several firms.

for example in India trade debtors, after inventories, are the major components of
current assets. The form about one-third of current assets in India. Granting credit and
creating.

Debtors amount to the blocking of the firm’s funds. The internal between the
date of sales and date of payment has to be financed out of working capital. This
necessitates the firm to get funds from banks or other sources. Thus, trade debtors
represent investment. As substantial amount are tied-up in trade debtors, it needs
carefully analysis and proper management.

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USES OF WORKING CAPITAL

The typical uses of working capital are as follows:

 Adjusted net loss from operations

 Purchase of non-current assets

 Repayment of long term debt and short term debt

 Redemption of redeemable preference shares

 Payment of cash dividend

A weak liquidity position poses a threat to solvency of the company and

makes it unsound. A negative working capital means a negative liquidity, and may
prove to be harmful for the company. Excessive liquidity is also bad.

Net working capital also covers the question of judicious mix of long term and
short-term funds for financing current assets. For every firm, there is a minimum
amount of net working capital, which is permanent. Therefore a portion of the
working capital should be financed by the permanent sources of funds such as
owner’s capital, debentures, long-term debt, preference capital or retained earnings.
Management must, therefore, decide the extent to which current assets should be
financed with equity capital and/or borrowed capital.

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NEED FOR THE STUDY

Any organization must have to maintain adequate working capital to meet its
day to day operation. In order to maintain flows of revenues from operation, every
firm need certain amount of current assets. For examples; cash is required to meet
obligations for services received etc. By a firm on identical plan in inventories are
required etc. by a firm on identical plan in inventories are required to provide the line
between production and sales. The study is required to understand the working capital
position in Sruthi Milk Products Pvt. Ltd.

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SCOPE OF THE STUDY

FINANCIAL MANAGEMENT

Financial management is that the managerial activity is concerned with the

planning and controlling of the firm’s financial resources. Though it was a branch of
economics till 1890 as a separate activity or discipline, it is of recent origin. Still it
has no unique body of knowledge of its own and heavily on economics for its
theoretical concepts even today.

The subject of financial is of immense interest to both academician and

practicing managers. It is of great interest of academicians because the subject is still
developing and there are still certain areas where controlling exists for which no
unanimous solutions have been reaches as yet.

The present study aims at the following

 Highlighting the necessity of current assets and current liabilities.

 Explain the principles of current assets, investment and financing.

 Focus on the proper mix of short term financing for current assets.

 Emphasis the need and goal of establishing a sound credit policy.

 Suggest the need of monitoring the receivables.

 Highlight the need for holding cash.

 Discuss the techniques of preparing cash budget.

 Focus on the management of cash collection and disbursement.

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IMPARTANCE OF STUDY

Importance of Working Capital Management

Working capital is part of the total assets of the company. Generally, it is the
difference between current assets and current liabilities. Practically speaking, it is the
daily, weekly and monthly cash requirement for the operations of a business.
Therefore, working capital management is a process of managing short-term assets
and liabilities. It makes sure that a firm has sufficient liquidity to run its operations
smoothly.

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OBJECTIVES OF THE STUDY

 To evaluate the performance of Sruthi Milk Products Pvt. Ltd by analyzing the
profitability and liquidity position of the company.

 To study changes in working capital position at the organization from 2009-

2013.

 To examine the turnover of the company.

 To identify and analyze relationship between working capital, sales, fixed

asset to sales etc.

 To suggest measures if any for improving financial performance of company.

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LIMITATIONS OF THE STUDY

 It is based on the data supplied by the company personnel.

 It is based on consultation, decisions of all concerned officials.

 Time is the major limitation for the study i.e., study conducted based on the 4
years financial reports. We can’t determine the over all financial position of
the company.

 Due to limitation of time, it was unable to go far a depth study in to the

subject.

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RESEARCH METHODOLOGY
SOURCES OF DATA
Primary Data
Primary data for this project is collected personal interviews and discussions
with financial executives and the officials of the company.

Secondary Data
The secondary data is collected from the following sources:
Annual Reports of the company for the years from 2008-09 to 2012-13

PERIOD OF THE STUDY

The period covered under this study is five financial years that is from 2008-
13 Several visits were to collect the required data they extended the full co-operation
in getting information required.  
Analysis and interpretation of collected data is the heart of project work. Only
after analysis one can arrive at the various findings with the related problem
identified. This findings that have been arrived after analysis and interpretation helps
to find out the hidden solutions for the problem and give most appropriate suggestions
for overcoming problems.
The analysis and interpretation can be carried out by various techniques. These
techniques help in analyzing the large volume of data by establishing the quantity
relation between various caravels of data.
The techniques are involved
 Change in working capital.
 Ratio
TOOLS OF ANALYSIS
Working capital management is a very significant aspect in the management
of finance of any organization. By checking the level of working capital can easily
identify the liquidity and profitability position of the Finn.

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 Calculation of operating cycle which reveals the operating efficiency of the

firm.
 Calculation of Average collection period and Debtors to sales.

 Calculation of days of holding inventory

 Raw - Material Holding Period

 Working - in - progress Holding Period

 Finished - Goods holding period

 Calculation of Ratios

 Liquidity Ratio

 Activity Ratio

 The level of its determinate by the level of current assets and current
liabilities.

The composition of current assets and current liabilities

The study required both primary and secondary data;

A. PRIMARY DATA

Primary data bas been collected by interviewing certain executives who were
chosen on the basis of their in depth knowledge and experience in the
company. The interviews in nature are under to gain as much information as
possible.

B. SECONDARY DATA

Secondary data was obtained from the past records file and reports of the
organization also from other financial statements.

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DATA ANALYSIS AND INTERPRETATION

TOOLS FOR ANALYSIS OF WORKING CAPITAL

The quantum of working capital as well as its financing pattern is

subject to constant monitoring and reviews by the financial manager. There are
different analytical tools which can help a financial manager in monitoring in viewing
and controlling the working capital. The popularly used tools are:

1. Schedule of changes in working capital

2. Working capital ratios.

1. SCHEDULE OF CHANGES IN WORKING CAPITAL

Generally working capital refers to the excess of current assets over current
liabilities. Management of working capital therefore is concerned with the problems
that arise in attempting to manager the current assets, the current liabilities and the
inter relationship that exists between them. It refers to all aspects of administration of
both current assets and current liabilities.

The basic goal of working capital management is to manage the current assets
and current liabilities of a firm in such a way that a satisfactory level of working
capital is maintained. The policies of working capital of management of a firm have
an impact on its profitability, liquidity and structural health of the organization.

2. WORKING CAPITAL RATIO’S

Another analytical tool that can be used for analyses of working capital the
accounting ratio’s particularly the working capital ratio’s. Some of the important
working capital ratio’s are:
 Current Ratio
 Quick Ratio
 Cash to current assets
 Sales to cash
 Average collection period

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 Inventory turnover ratio

 Working capital to sales ratio etc.

CURRENT RATIO
Current Assets
Current ratio = ------------------------------
Current Liabilities

Year Current Assets Current Liabilities Ratio

2008-09 11405087 10791949 1.05
2009-10 13922432 12005681 1.15
2010-11 18173935 14165732 1.28
2011-12 20640425 7149051 2.88
2012-13 1458971 282154 5.17

INFERENCE

Current ratio measures the firm’s short-term solvency. The standard norm for
current ratio is (2:1). It is evident that in the year 2009-10 and 2010-11 Current Ratio
is satisfactory. In remaining years current ratio is less than 2 is not satisfactory.
There fore it can be calculated that the liquidity performance of the company is poor.

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QUICK RATIO
Quick assets
Quick ratio = ------------------------------------
Current Liabilities

Super Quick
Year Current Liabilities Ratio
Assets
2008-09 5801648 10791949 0.53
2009-10 8542212 12005681 0.71
2010-11 9001221 14165732 0.63
2011-12 9189751 7149051 1.28
2012-13 589295 282154 2.08

INFERENCE

This is the more penetrating test of liquidity than the current ratio. Generally
a quick ratio is 1:1 it considered to represent a satisfactory current financial condition.
The quick ratio has never exceeded the standard ratio. Empirically the quick ratio in
the year 2009-10 to 2010-11 satisfactory. In remaining years quick ratio is less than 1
is not satisfactory. Therefore it can be calculated that the liquidity performance of the
company is poor.

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CASH TO CURRENT ASSETS RATIO

Cash and Bank Balance

Cash ratio =--------------------------------------------
Current Liabilities

Year Cash and Bank Balance Current Liabilities Ratio

2008-09 5801648 10791949 0.53
2009-10 8545512 12005681 0.71
2010-11 9001221 14165732 0.63
2011-12 9189751 7149051 1.28
2012-13 589295 1176817 0.50

INFERENCE

The desirable norm for cash ratio is 1:2. The cash ratio is very low in 2009-
10 year. There after it is increased slightly on the years 2006-07 to 2007-08
respectively and declined in 2008-09 and 2010-11. Anyway finally the company
failed in keeping sufficient cash and bank balance and marketable securities.

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NET WORKING CAPITAL RATIO

Net Working Capital
Net working capital = -----------------------------
Net Assets

Net Working
Year Net assets Ratio
Capital
2008-09 613138 94930352 3.45
2009-10 1916752 8837584 0.21
2010-11 4008203 8845519 0.45
2011-12 13491374 19921649 0.67
2012-13 1176817 21275690 0.05

INFERENCE

I inferred from the above table that the net working capital is decreasing every year
which shows the ideal funds are used for most productive purpose and company
continues doing it.

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WORKING CAPITAL TURNOVER RATIO

Year Sales Net Working Capital Ratio

2008-09 6579980 613138 10.73
2009-10 13776540 1916752 7.18
2010-11 8012850 4008203 1.99
2011-12 7731472 13491374 0.57
2012-13 7496210 1176817 6.36
Sales
WorkingCapitalTurnover Ratio 
Net WorkingCapital

INFERENCE

This ratio measures the relationship between sales and net working capital. In
the years2006-07, 2009-10 and 2010-11 recorded as the highest working capital
turnover ratio respectively. In the year 2008-09 and 2009-10 recorded as the lowest
working capital turnover ratio. The higher indicates more favorable it is for the
company. In Sruthi Milk Products Pvt., Ltd. is highly fluctuating in the ratios.

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INVENTORY TURNOVER RATIO

Net Sales
Inventory turnover ratio = -----------------------
Average Inventory
Year Net Sales Average Inventory Ratios
2008-09 6579980 19554635 0.33
2009-10 13776540 2781570 4.92
2010-11 8012850 2141365 3.74
2011-12 7731472 1038709 7.44
2012-13 7496210 855241 8.76

INFERENCE

The inventory turnover ratio indicates the efficiency of the firm in producing
and selling its products. A low inventory turnover implies excessive inventory levels
than required for production. The company inventory turnover ratio is decreasing in
2006-07 and 2007-11 is increased.

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GROSS PROFIT RATIO

GrossPr ofit
GrossPr ofitRatio   100
Net Sales

Year Gross Profit Net Sales Ratios

2008-09 4257247 6579980 0.64
2009-10 6896890 13776540 0.50
2010-11 4892870 8012850 0.61
2011-12 4279400 7731472 0.55
2012-13 4928280 7496210 0.65

INFERENCE

It is inferred from the above Table that the Gross profit is in fluctuating trend.
So the company must be able to detect causes of fluctuating profits and initiate actions
to improve the situation.

NET PROFIT RATIO

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Net profit ratio shows the relationship between net profit of the concern and
its net sales.

Net Profit Ratio= (Net Profit /Net Sales)*100

Year Net Profit Net Sales Ratios

2008-09 4313521 6579980 0.65
2009-10 2246039 13776540 0.16
2010-11 443780 8012850 0.50
2011-12 274502 7731472 0.30
2012-13 2246039 7496210 0.29

INFERENCE

From the above table that the net profit is satisfactory in the years 2006-07 and
2008-09 is continuously decreasing.

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OPERATING RATIO
Cost of goods sold +Operating Expenses
Operating Ratio = -----------------------------------------------------------
Net sales

Year Operating Cost+Cog Net Sales Ratios

2008-09 2561027 6579980 0.38
2009-10 8354562 13776540 0.60
2010-11 4296242 8012850 0.53
2011-12 4518566 7731472 0.58
2012-13 3501454 7496210 0.46

INFERENCE

The lower ratio is better than higher the ratio, the less favorable it is because it
would have a smaller margin of operating profit for the payment of dividends and the
creation of reserves. From the above Table that the Operating ratio is in fluctuating
trend.

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OPERATING PROFIT RATIO

Operating Profit = (Operating Profit/ Net Sales)

Years Operating Profit Net Sales Ratio

2008-09 4018953 6579980 0.61
2009-10 5421978 13776540 0.39
2010-11 3716608 8012850 0.46
2011-12 3212906 7731472 0.41
2012-13 3994756 7496210 0.53

INFERENCE

From the above Table that the Operating profit is in fluctuating trend. So the
company must be able to detect causes of fluctuating profits and initiate actions to
improve the situation.

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SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE

YEAR 2008-09
Effect of working capital
PARTICULARS 2008 2009
Increase Decrease

CURRENT ASSETS:

Cash and bank balance 5512130 5801648 289518 ******

Sundry debtors 4801648 4512121 ****** 289527

Short term loans & advances to

employee
1091340 1091318 ****** 00022

TOTAL CURRENT ASSETS (A) 11405118 11405087 289518 289549

CURRENT LIABILITIES:

Loans & borrowings 4357212 4575212 ****** 218000

Employees stat liabilities 4522122 4322122 200000 ******

Other non stat liabilities 1894615 1894615 ****** ******

TOTAL CURRENT LIABILITIES 10773949 10791949 200000 218000

(B)
NET 631169 613138 489518 507549

WORKING CAPITAL (A-B)

NET DECREASE IN WORKING

CAPITAL ****** 18031 18031 ******

TOTAL 631169 631169 507549 507549

INFERENCE

The net working capital requirement of the company during the year 2009 has
Decreased than in the year 2008, and the net working capital of the company was
recorded Rs.631169 and it was been Decreased to Rs.613138 in the year 2009.

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SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE

YEAR 2009-10
Effect of working capital
PARTICULARS 2009 2010
Increase Decrease

CURRENT ASSETS:

Cash and bank balance 5801648 8545512 2740564 ******

Sundry debtors 4512121 4432211 ****** 79910

Short term loans & advances to

employees
1091318 948009 ****** 143309
TOTALCURRENTASSETS (A) 11405087 13922433 2740564 223219
CURRENT LIABILITIES:

Loans & borrowings 4575212 5421984 ****** 846772

Employees stat liabilities 4322122 3654655 667467 ******

Other non stat liabilities 1894615 2929042 ******* 1034427

TOTAL CURRENTL IABILITIES 10791949 12005681 667467 1881199

(B)
NET WORKING CAPITAL 613138 1916752 3408031 2104418

(A-B)
NET INCREASE IN WORKING

CAPITAL 1303614 ******* ****** 1303614

TOTAL 1916752 1916752 3408031 3408031

INFERENCE

The net working capital requirement of the company during the year 2010 has
increased than in the year 2009, and the net working capital of the company was
recorded Rs.613138 and it was been increased to Rs.1916752 in the year 2010.

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE

YEAR 2010-11
PARTICULARS 2010 2011 Effect of Working Capital

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Increase Decrease

CURRENT ASSETS:

Cash and bank balance 8542212 9001221 459009 ******

Sundry debtors 4432211 7246521 2814310 ******

Short term loans & advances to

employees
948009 1926193 978184 ******
TOTALCURRENTASSETS 1392243 1817393 4251503 0000000
(A) 2 5
CURRENT LIABILITIES:

Loans & borrowings 5421984 5243554 178430 ******

Employees stat liabilities 3654655 4724215 ******* 1069560

Other non stat liabilities 2929042 4197963 ******* 1268924

TOTALCURRENT 1200568 1416573 178430 2338484

LIABILITIES (B) 1 2
NET WORKING CAPITAL 1916752 4008203 4429933 2338484
(A-B)
NET INCREASE IN
WORKING CAPITAL
2091452 ****** ******* 2091449
TOTAL 4008203 4008203 4429933 4429933
INFERENCE

The net working capital requirement of the company during the year 2011 has
increased than in the year 2010, and the net working capital of the company was
recorded Rs.1916752 and it was been increased to Rs.4008203 in the year 2011.

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE

YEAR 2011-12
Effect of working capital
PARTICULARS 2011 2012
Increase Decrease

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Current Assets:

Cash and bank balance 9001221 9189751 188530 ******

Sundry debtors 7246521 7554321 307800 ******

Short term loans & advances to

employees
1926193 3896353 1970160 ******
Total Current Assets (A) 18173935 20640425 2466490 000000
Current Liabilities:

Loans & borrowings 5243554 3100242 2143312 ******

Employees stat liabilities 4724215 2383017 2341198 ******

Other non stat liabilities 4197963 1665792 2532171 ******

Total Current Liabilities (B) 14165732 7149051 7016681 000000

Net Working Capital (A-B) 4008203 13491374 9483171 ******

Net Increase in Working

Capital
9483171 ****** ****** 9483171

TOTAL 13491374 13491374 9483171 9483171

INFERENCE

The net working capital requirement of the company during the year 2012 has
increased than in the year 2011, and the net working capital of the company was
recorded Rs.4008203 and it was been increased to Rs.13491374 in the year 2012.

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE

YEAR 2012-13
Effect of Working
Capital
PARTICULARS 2012 2013
Increase Decrease

Current Assets:

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Cash and bank balance 9189751 589295 ****** 8600456

Sundry debtors 7554321 523686 ****** 7030635

Short term loans & advances to 3896353 345990 ****** 3550363

employees

Total Current Assets (A) 20640425 1458971 000000 19181454

Current Liabilities:

Loans & borrowings 3100242 124980 2975262 ******

Employees stat liabilities 2383017 98745 2284272 ******

Other non stat liabilities 1665792 58429 1607363 ******

Total Current Liabilities (B) 7149051 282154 6866897 000000
Net Working Capital (A-B) 13491374 1176817 6866897 19181454

Net Decrease in Working Capital ****** 1231455 12314557 ******

7
TOTAL 13491374 1349137 19181454 19181454
4

INFERENCE

The net working capital requirement of the company during the year 2013 has
Decreased than in the year 2012, and the net working capital of the company was
recorded Rs.13491374 and it was been Decreased to Rs.1176817 in the year 2013.

FINDINGS
 The Sruthi Milk Product Pvt.Ltd. has performed well over the past five years
is evident from the Gross profit and Net profit Ratios.

 The Company is suffering from lack of adequate working capital.

 The Company is using Current Assets and Fixed Assets well.

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 The Company has maintained relationship between Working Capital and

Sales.

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SUGGESTIONS
 The Company has to take steps to maintain optimum current assets.

 The company should focus on investment that are marketable securities so that
its current ratio may reach optimal ration 2:1

 Working Capital is decreasing Year by Year so adequate Working capital has

to be maintained.

 The Turnover Ratio are Fluctuating so the Company must detect the cause for
that and solve it.

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CONCLUSION
Finally, I conclude saying that the liquidity position is satisfactory,
performance of the company is satisfactory but still needs to cut down the expenses to
earn more net profits and see that turnover ratios are increased so that it can enjoy
reduce in non operating cost, due to large scale production and results in increase in
profits. Working capital is in fluctuating trend so the company must maintain
adequate working capital.

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BIBLIOGRAPHY

Books:
 Annual Reports of Sruthi Milk Products Pvt. Ltd.

 M.Y Khan and P.K. Jain Finance Management. 3rd Edition Tata Mc Graw Hill
publishing company Ltd., New Delhi.

 I.M.Pandey Financial Management 9th edition Vikas Publishing House Pvt.Ltd.,

New Delhi.
edition
 Prasana Chandra 2002 Financial Management 5th , Tata Mc Graw Hill
Publishing Company Ltd., New Delhi.

Web Sites:

www.sruthimilk.com

www.google.com

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ANNEXURE
SRUTHI MILK PRODUCTS PVT.LTD.
Particulars amount Particulars Amount

To Opening stock 1061067 By Sale of milk 3436700

To Purchase of milk products 1382998 By Sale of milk products 3143280
To Transport charges 857491 By Closing stock 2849860
To Packing material 472920
To Processing and conversion 769820
To Shares consumed 628297
To Gross profit 4257247
9429840 9429840
To Salaries & wages 226950 By Gross profit 4257247
To Depreciation 192321 By Other incomes 1989573
TO Interest on loan 258929
To Insurance charges 236281
To Travelling and 183699
conveyance 148329
To Advertisement 448496
To Milk payments 238294
To Selling and distribution 4313521
To Net profit
6246820 6246820
TRADING AND PROFIT&LOSS A/C FOR THE YEAR ENDED 31st-03-2009

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SRUTHI MILK PRODUCTS PVT.LTD

BALANCE SHEET AS AT 31st MARCH 2009

Particulars 31.03.2009 31.03.2008

sources of Funds:
1.share holder funds:
equity share capital 3138642 5892421
share advance 1794637 4113048
Add: profit & loss A/c
4313521 000000
9245800 10005469
2.Loan funds:
secured loans
000000 282720
unsecured loans
184552 194242
TOTAL:
9430352 10482431
application of funds:
3.fixed assets
gross block
Add: additions during the year 16431124 4559280
Less: accumulated dep.
11783959 2545171
Net Block
19397869 102490
4.current assets:
8817214 7001961
Cash and bank balance
Sundry debtors
5801648 5512130
Short term loans & advances to employees
4512121 4801648
1091318 1091340
Less: current liabilities:
Loans & borrowings
Employees stat liabilities
4575212 4357212
Other current liabilities
4322122 4522122
Net current assets
1894615 1894615
5.miscellaneous
613138 631169
expenditure:
profit & loss A/c
TOTAL
000000 2849301
94930352 10482431

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SRUTHI MILK PRODUCTS PVT.LTD.

TRADING AND PROFIT&LOSS A/C FOR THE YEAR ENDED 31st-03-2010

Particulars Amount Particulars Amount

To Opening stock 2849860 By Sale of milk of milk 8298290

To Purchase of milk products 2729210 By Sale of milk products 5478250
To Transport charges 1229211 By Closing stock 2713280
To Packing material 728500
To Processing and conversion 1098256
To Shares consumed 957893
To Gross profit 6896890
16489820 16489820

To Salaries & wages 1595820 By Gross profit 6896890

To Depreciation 629621 By Other incomes 1680008
TO Interest on loan 789987
To Other expenses 598920
To Insurance charges 942875
To Travelling and conveyance 791357
To Advertisement 5298285
To Milk payments 1598285
To Selling and distribution 875992
To Net profit 2246039

8576898 8576898

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SRUTHI MILK PRODUCTS PVT.LTD

BALANCE SHEET AS AT 31st MARCH 2010

Particulars 31.03.2010 31.03.2009

sources of Funds:
1.share holder funds:
equity share capital 3620300 3138642
share advance 2879461 1794637
Add: profit & loss A/c 2246039 4313521
8745800 9245800
2.Loan funds:
secured loans 00000 00000
unsecured loans 91784 184552
TOTAL 8837584 9430352
application of funds:
3.fixed assets
gross block 6460087 16431124
Add: additions during the year 2472088 11783959
Less: accumulated dep. 2011342 19397869
Net Block 6920833 8817214
4.current assets:
Cash and bank balance 8542212 5801648
Sundry debtors 4432211 4512121
Short term loans & advances to employees 948009 1091318

Less: current liabilities:

Loans & borrowings 5421984 4575212
Employees state liabilities 3654655 4322122
Other non stat liabilities 2929042 1894615

Net current assets 1916751 613138

5.miscellaneous expenditure:
profit & loss A/c 00000 00000
TOTAL 8837584 94930352

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SRUITHI MILK PRODUCTS PVT.LTD.

TRADING AND PROFIT&LOSS A/C FOR THE YEAR ENDED 31-12-2011

Particulars Amount Particulars Amount

To Opening stock 2713280 By Sale of milk of milk 4892450

To Purchase of milk products 729290 By Sale of milk products 3120400
To Transport charges 250800 By Closing stock 1569450
To Packing material 495000
To Processing and conversion 175184
To Shares consumed 325876
To Gross profit 4892870

9582300 9582300
To Salaries & wages 1123945
To Depreciation 252588 By Gross profit 4892870
TO Interest on loan 799867 By Other incomes 2363920
To Insurance charges 595298
To Travelling and conveyance 725790
To Advertisement 452000
To Milk payments 1687260
To Selling and distribution 878970
To Other expenses 297292
To Net profit 443780

7256790
7256790

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SRUTHI MILK PRODUCTS PVT.LTD

BALANCE SHEET AS AT 31st MARCH 2011

Particulars 31.03.2011 31.03.2010

sources of Funds:
1.share holder funds:
equity share capital
3529120 3620300
share advance
Add: profit & loss A/c 4772900 2879461
443780 2246039
2.Loan funds: 8745800 8745800
secured loans
unsecured loans 00000 00000
TOTAL: 99719 91784
application of funds: 8845519 8837584
3.fixed assets
gross block
Add: additions during the year
Less: accumulated dep.
18565780 6460087
Net Block
7394564 2472088
4.current assets:
21123028 2011342
Cash and bank balance
4837316 6920833
Sundry debtors
Short term loans & advances to employees
9001221 8542212
7246521 4432211
Less: current liabilities:
1926193 948009
Loans & borrowings
Employees stat liabilities
Other current liabilities
5243554 5421984
Net current assets
4724215 3654655
5.miscellaneous
4197963 2929042
expenditure:
4008203 1916751
profit & loss A/c
TOTAL

00000 00000
8845519 8837584

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SRUTHI MILK PRODUCTS PVT.LTD.

TRADING AND PROFIT&LOSS A/C FOR THE YEAR ENDED 31-12-2012

Particulars Amount Particulars Amount

To Opening stock 1569450 By Sale of milk of milk 4278900

To Purchase of milk products 897480 By Sale of milk products 3452572
To Transport charges 345210 By Closing stock 507968
To Packing material 399895
To Processing and conversion 325602
To Shares consumed 422403
To Gross profit 4279400

8239440 8239440

948996 4279400
To Salaries & wages By Gross profit
598865 2595100
To Depreciation By Other incomes
759230
TO Interest on loan
259686
To Communication
789200
To Travelling and conveyance
498967
To Advertisement
1678560
To Milk payments
590872
To Selling and distribution
475622
To Other expenses
274502
To Net profit

6874500 6874500

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SRUTHI MILK PRODUCTS PVT.LTD

BALANCE SHEET AS AT 31st MARCH 2012

Particulars 31.03.2012 31.03.2011

sources of Funds:
1.share holder funds:
equity share capital 3620300 3529120
share advance 5125500 4772900
Add: profit & loss A/c 274502 443780
2.Loan funds: 9020302 8745800
secured loans 9771572 00000
unsecured loans 1129775 99719
TOTAL: 19921649 8845519
application of funds:
3.fixed assets
gross block 25516561 18565780
Add: additions during the year 3053897 7394564
Less: accumulated dep. 22140183 21123028
Net Block 6430275 4837316
4.current assets:
Cash and bank balance 9189751 9001221
Sundry debtors 7554321 7246521
Short term loans & advances to employees 3896353 1926193

Less: current liabilities:

Loans & borrowings 3100242 5243554
Employees stat liabilities 2383017 4724215
Other non stat liability 1665792 4197963
Net current assets 13491374 4008203
5.miscellaneous
expenditure:
profit & loss A/c 00000 00000

TOTAL 19921649 8845519

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SRUTHI MILK PRODUCTS PVT.LTD.

TRADING AND PROFIT & LOSS A/C FOR THE YEAR ENDED 31st-03-2013

Particulars Amount Particulars Amount

To Opening stock 507968 By Sale of milk of milk 4596330

To Purchase of milk products 999470 By Sale of milk products 2899880
To Transport charges 398740 By Closing stock 1202514
To Packing material 352020
To Processing and conversion 498060
To Shares consumed 722110
To Utilities 292076
To Gross profit 4928280

8698724 8698724

To Salaries & wages By Gross profit

1172440 4928280
To Depreciation By Other incomes
325742 2530170
To Travelling and conveyance
442580
To Selling & distribution
442820
To Milk payments
1685892
To Advertisement
272390
To Other expenses
490704
To Net profit
2246039

7458450 7458450

VIJAYAM SCIENCE & ARTS DEGREE COLLEGE, CHITTOOR Page 77

A Study on Working Capital

SRUTHI MILK PRODUCTS PVT.LTD

BALANCE SHEET AS AT 31st MARCH 2013

Particulars 31.03.2013 31.03.2012

sources of Funds:
1.share holder funds:
equity share capital 5684221 3620300
share advance 4001352 5125500
Add: profit & loss A/c 2246039 274502
2.Loan funds: 11931612 9020302
secured loans 6771572 9771572
unsecured loans 2572506 1129775
TOTAL: 21275690 19921649
application of funds:
3.fixed assets
gross block 46245621 25516561
Add: additions during the year 32456120 3053897
Less: accumulated dep. 58602868 22140183
Net Block 20098873 6430275
4.current assets:
Cash and bank balance 589295 9189751
Sundry debtors 523686 7554321
Short term loans & advances to employees 345990 3896353

Less: current liabilities:

Loans & borrowings 124980 3100242
Employees stat liabilities 98745 2383017
Other non stat liability 58429 1665792
Net current assets 1176817 13491374
5.miscellaneous
expenditure:
profit & loss A/c 000000 000000

TOTAL 21275690 19921649

VIJAYAM SCIENCE & ARTS DEGREE COLLEGE, CHITTOOR Page 78