A PROJECT REPORT

On
''WORKING CAPITAL MANAGEMENT''
At
CREDIT CO-OPERATIVE RURAL BANK

Submitted in partial fulfillment for the requirement for the award

of BACHELORE OF BUSINESS ADMINISTRATION
By:
S.PARAMESHWARI
(REG NO:5921153007)
Project submitted in partial fulfillment for the award of
degree of
BACHELOR OF BUSINESS ADMINISTRATION
To

Alagappa University, Karaikudi

Under the guidance of

M. SANTHA KUMARI MBA., MPHIL.,

(HOD)
Department of Business Administration

PSY Arts And Science College

Arasanoor, Thirumancholai (POST) Sivagangai

2021-2024
 DECLARATION

I hereby signed S. Parameshwari (REG NO:5921153007) the student of final

year BBA In PSY Arts And Science College, Sivagangai hereby declare that the
project entitled ''A STUDY ON WORKING CAPITAL MANAGEMENT '' is
my original work under the guidance of Mrs. M.SANTHA KUMARI MBA,
MPHIL.,

Place : S. PARAMESHWARI
Date :
 ACKNOWLEDGEMENT

I express my heartfelt gratitude to ALAGAPPA UNIVERSITY and our

Principal Dr.G.SUBRAMANIAN Msc, Mphil., Phd., for providing an
opportunity to do the project..

I wish to express my greatfulness to our guide and Head of the Department of

Business Administration Mrs. M. SANTHA KUMARI MBA., MPHIL., for the
valuable suggestion and support.

I express my sinciere thanks to my respect guide Mrs. M. SANTHAKUMARI

MBA., MPHIL.,.
 PSY ARTS AND SCIENCE COLLEGE
DEPARTMENT OF BUSINESS
ADMINISTRATION SIVAGANGAI-630
551
CERTIFICATE

This is to certify that this project entitled of ''A STUDY ON WORKING

CAPITAL MANAGEMENT'' is a bonafied record done by S.
PARAMESHWARI (REG NO:5921153007) the year during 2021-2024 in
partial fulfillment of requirement of the award of degree of BACHELOR OF
BUSINESS ADMINISTRATION OF ALAGAPPA UNIVERSITY.

Viva Voce Examination Held on….........................

Guide Head of the Department

External Examiner
 CONTENT OF TABLE

CONTENTS PAGE NO
Chapter 1
Objectives of Working Capital 05

Limitation of Working Capital 05

Scope of Working Capital 05

Chapter 2
Literature Review

Needs of Working Capital 14

Types of Working Capital 15

Determinants of Working Capital 16

Chapter 3
Industry and Company Profile 17

Organizational Structure 18

Chapter 4
Data Analysis and Interpretation 21

Chapter 5
Finding 39

Chapter 6
Suggestion 40

Chapter 7
Conclusion 41

Chapter 8
Bibliography 42
 LIST OF TABLES

TABLE NUMBER PAGE NUMBER

Table No:1 24

Table No:2 27

Table No:3 29

Table No:4 31

Table No:5 32

Table No:6 36
 LIST OF FIGURES

FIGURES
CONTENTS PAGE NO

Structure and Asset Composition of

Fig(1) 06
scheduled commercial bank

Fig(2) The Opening Cycle of a Business 10

Fig(3) Working Capital Cycle 11

Working Capital cycle for a Manufacturing

Fig(4) 12
Firm

Fig(5) Current Assets 32

Fig(6) Current Liabilities 35

Fig(7) Net Working Capital 38

 Chapter 1

INTRODUCTION
Project Report on Working Capital

Introduction:

In a perfect word, there would be no neccessity assets and liabilities because

there would be no uncertainty, no transaction costs, information search costs, or
production and technology constraints. The unit of production would not vary with the
quantity produced. Borrowing and lending rates shall be same. Capital, labour, and
product market shall be perfectly competitive and would be no advantages for
investing in short term assets. However, the world we live is not perfect. It is
characterized by considerable amount of uncertainty regarding the demand, market
price, quality and availability of own products and those of suppliers. There are
transaction costs for purchasing or selling goods or securities. Information is costly to
obtain and is not equally distributed. There are spreads between the borrowings and
lending rates for investments, and findings of equal risks. Similarly, each organization
is faced with its own limits on the production capacity and technologies it can employ
there are fixed as well as variable costs associated with production goods. In other
words, the markets in which real firm operated are not perfectly competitive.
These real-world circumstances introduce problem's which require the necessity
of maintaining working capital. For example, an organization may be faced with an
uncertainty regarding availability of sufficient quantity of crucial imputes in future at
reasonable price. This may necessitate the holding of inventory, current assets.
Similarly, an organization may be faced with an uncertainty regarding the level of its
future cash flows and insufficient amount of cash may incur substantial costs. This
may necessitate the holding of reserve of short-term marketable securities, again a
short-term capital assets. In corporate financial management, the term working capital
management(net) represents the excess of current assets over current liabilities.
In simple words working capital is the excess assets over current liabilities.
Working capital has ordinarily been defined as the excess od current assets over
current liabilities. Working capital has ordinarily been defined as the excess of current
assets over current liabilities. Working capital is heart of business if it is weal business
cannot proper and survives. It is therefore said the fate of large scale investment in
fixed assets is often determined by a relatively small amount of current assets. As the
working capital is important to lifeline of company. If this lifeline deteriorates so that
the company's ability to fund operation, reinvest do meet capital requirement and
payment. Understanding company's cash flow health is essential to making investment
decision. A good way to judge company's cash flow prospects is to look at its working
capital management. The company must have adequate working capital as much as
needed by the company. It should neither be excessive or nor inadequate. Excessive
working capital cuisses for idle funds lying with the firm without earning any profit,
where as inadequate working capital shows the company doesn't have

1
sufficient funds for financing its daily needs working capital management
involves study of the relationship between firm's current assets and current
liabilities. The goal for working capital management is to ensure that a short-
term debt and upcoming operational expenses. The better a company manager
its working capital, the less the company needs to borrow. Even companies with
cash surpluses need to manage working capital to ensure those surpluses are
invested in way that will generate suitable returns for investor.

''The primary objective of working capital management is to ensure

that sufficient cash is available to''
Meet day to day cash flow needs.
Pay wages and salaries when they fall due.
Pay creditors to ensure continued supplies of goods and services.
Pay government taxation and provider of capital-dividends and
Ensure the long-term survival of the business entity.

AN OVERVIEW OF THE INDIAN BANKING SECTOR

Banking sector is a lender to other sector for their improvement and their
growth. Thus a strong bank sector is required for the economic growth of a
country. After the reforms in 1991, banks are growing by leap and bounds.
Commercial banks have a comparative advantage as provides of capital because
of their special knowledge of customers and ability to closely monitor uses of
funds on an ongoing basis. The major participants of the Indian Financial
System are the Commercial banks, the Financial Institutions (FIs)
encompassing Term-Lending Institution, Investment Institutions, specialized
Financial Institutions and the state-Level Development Bank, Non- Bank
Financial Companies(NBFCs) and other market intermediaries such as the stock
brokers and money lenders. The commercial banks certain variants of NBFCs
are among the oldest of the market participants. The Financial Institutions, on
the other hand, are relatively new entities in the financial market place.

2
HISTORICAL PERSPECTIVE

Bank of Hindustan, set up in 1870, was the earliest Indian Bank. Banking
in India on modern lines started with the establishment of three presidency
Banks under presidency Banks's Act 1876 i.e., Bank of Calcutta, Bank of
Bombay and Bank of Madras. In 1921, all presidency banks were amalgamated
to form the imperial Bank carried out limited central banking functions also
prior to established of RBI. It engaged in all types of commercial banking
business expect dealing with the foreign exchange.
Reserve Bank of India Act was passed in 1934 & Reserve Bank of India (RBI)
was constituted as an apex bank without major government ownership Banking
Regulations Act was passed in 1949. This regulation brought Reserve Bank of
India under Governement control. Under the Act, RBI got wide ranging powers
for supervision & control of banks. The Act also vested licensing powers & the
authority to conduct inspections in RBI.
In 1955, RBI acquired control of the ''imperial Bank of india'', which was
renamed as state Bank of India. In 1959, SBI took over control of eight private
banks floated in the erstwhile princely states, making as its 100% subsidiaries.
RBI was empowered in 1960, to force compulsory merger of weak banks
with the strong ones. The total number of banks was this reduced from 566 in
1951 to 85 in1969, government nationalized 14 banks having deposits of Rs.50
crores & above.
In 1980 Government acquired 6 more banks with deposits of more than
Rs.200 crores. Nationalization of banks was to make them pay the role of the
catalytic agents for economic growth. The Narasimham committee report
suggested wide ranging performs for banking practices.

3
The amendment of banking regulation act 1933 saw the new entry of private
sector banks. Banking segment in india the regulatory, central bank. This
segment broadly consists of:

1. Commercial banks.
2. Co-operative banks.

Commercial Banks:

The commercial banking structure in india consists of:

Scheduled Commercial Banks.
Unscheduled Banks.
Scheduled Commercial Banks constitute those banks which have been included in
the second scheduled of Reserve Bank of India(RBI) Act, 1934. RBI in return
includes only those banks in this schedule which satisfy the creteria laid down wide
section 42(60) of the Act. Some co-operative banks are scheduled commercial banks
albeit not all cooperative banks are. Being part of the second schedule confers some
benefits to the bank in term of access to the accommodation by RBI during the times
of liquidity contraints. At the same time, however, this status also subject the bank to
certain conditions and obligation towards the reserve regulation of RBI. This sub
sector can broadly be classified into:
• Public sector
• Private sector
• Foreign Banks
Public sector banks have either the Government of india or Central bank of india as
the majority shareholders. This segment comprises of:
State Bank of India (SBI) and its subsidaries
Other Nationalized banks.

4
 ObjectivesofWorkingCapital

To minimise the amount of capital employed in financing the current assets.

This will also lead to an improvement in the'' Return on Capital Employed''.
To manage the current asset in such a way that the marginal return on
investment in these assets is not less than the cost of capital acquired to finance
them. This will ensure the minimisation of the value of the business unit.
To maintain the proper balance between the amount of current asset and
liabilities in such a way that the firm is always able to meet its
financial obligation whenver due. This will ensure the smooth working of the
unit without any production is hold-ups due to paucity of funds.

Limitations of Working Capital:

Working capital is always changing. Hence, by the time financial information is
calculated, the working capital of the company may have changed.
Working capital dose not consider the underlying types of account. For
example if a company has 100% of its current assets in account receivable, although
the working capital will show as positive, its financial health will depend on whether
the payments are realised.
The value of the company's assets can changed quickly. Based the forces
outside its control. Therefore, the working capital will also change accordingly.
Working capital is calculated on the assumption that all debts are known,
which may not be a case.

Scope of Working Capital:

Ensure the business continutity: Working capital management enables
business in continuing their activities uninterrupted. Proper management of working
cpital will lead to availability of sufficient funds at all time. Business will receive
regular supply of raw material from supplier by paying them on time which will help
in continuing the production activities regularly.
Improves Business solvency: Business managing their working capital
efficiently are able to maintain proper liquidity. It will improve their cash management
and will reduce their dependency on external financing at large amount of funds in
tried up in working capital. Management of working capital will enable them in
paying short-term debts and operetaing expanses on time.

5
 Scheduled commercial Bank in India

Public sector Banks Private Sector Banks Foreign Banks

81.01% 12.7% 8.06%

Nationalized Banks State Bank groups Old private banks New private
62.89% 37.11% 62.93% 37.07%

Fig.(1)

Banking is more than 225 old in our country. The first bank called the bank of
Hindustan was established 1770. Since, then there has never been any let up and as of
today, there are 295 banks with 66514 branches spread across the country.

6
Co-operative Banks:

There are two main categories of the co-operative banks:

A) Short Term Lending oriented Co-operative Banks- Within this category

there are three sub category of banks viz state co-operative banks, District Co-
operative banks and primary agricultural co-operative societies.
B) Long Term Lending Oriented Co-operative Banks- Within the second
category there are land development banks at three levels- State level, District
level, Village level.

The Co-operative banking structure in india is divided into following main five
categories:
1. Primary Urban Co-operative Bank.
2. Primary Agricultural Credit Societies.
3. District Central Co-operative Banks.
4. State Co-operative Banks.
5. Land Development Banks.

Banking Basics:
Banking Regulation Act of India, 1949 defines banking as ''Accepting , for the
purpose of lending or lending in investment of deposits of money from the public,
repayable on demand or otherwise and withdraw able by cheque, draft, order or
otherwise.
Most of the activities a bank performance are divided from the above
definition: In additional banks are allowed to perform certain activities which are
ancillary to this business of accepting deposit and lending. A banks relation with the
public, therefore revolves around the accepting deposits and lending money.
Another activity which is assuming increasing important is transfer of money-both
domestic and foreign-from one place to another. This activity generally known as
''remittance business'' in banking parlance. The so called FOREX (foreign exchange)
business is largely a part of remittance albeit it involves buying and selling of foreign
currencies.

7
Functioning of Banks :

Functioning of bank is more complicated of cooperate operation.

Since banking involves dealing directly with money government in
most countries regulate in this sector rather than stringently. In India the
regulation traditionally has been very strict and in the opinion of
certain quarter s, resposiable for the present condition of banks, where
NPA's are of a very high order. This process of financial reforms,
which started 1991, has cleared the cobwebs somewhat but a lot remain
to be done. The multiplicity of a policy and regulation but a bank has to
with makes with a operation s even more complicated, sometimes
bordering on illogical. This section which is also intended for banking
professional, attempts to give an overview of the functions in as simple
manner as possible.
As per the Banking Regulation Act 1949 and viewed solely
from the point of view of the customers, banks essential performs the
following conditions:
Accepting deposits from the public/others (deposits).
Lending money to publics (loans).
Transferring money from one place to another (remittance).
Acting as trustees.
Keeping valuable in safe custody.
Government business.
But do these functioning constitute banking The answer must be a no.
There are so many intricacies involved in a activities that a bank
performs today, that the above list must sound very simple to a
seasoned banker. Bank has to do to give the above services to its
customers. These activities can also be described as bank office
banking. Banks are organized in linear structure to perform this
activities at the base which lies a branch . The corporate office of bank
is normally called head office.

Current Scenario:

Currently overall banking in india is considered as fairly matured in

terms of supply, product range and reaches even though reach in rural
india still remains in a challenge for the private sector foreign banks.
Even in terms of quality of assets and capital adequacy, indian banks
are consider to have clean, strong and transparent balance sheets- as
compared to other banks in comparable economics in a region. The
reserve bank of india is a autonomous body with minimal pressure from
the government, The stated policy of the bank on the Indian rupee is to
manage volatility- without any stated exchange rate- and this has mustly
been true.

8
 Chapter 2

LITERATURE REVIEW
Working Capital Management:

'' Working Capital refers to the firm's investment in short term-cash,short

term securities, accounts receivable and inventories.''

Weston & Brigham

Working Capital can be classified either on the basis of its concept or on the
basis of periodicity of its requirement.
(1) On the basis of concepts there are two concepts of working capital:
1. Gross Working Capital.
2. Net Working Capital.
Gross Working Capital:
Gross working Capital refers to the firm's investment in current assets.
Current assets are assets that can be converted into cash within an accounting
year. Current assets van include cash and bank balance, short term- securities,
Debtors, Bills receivables and inventory.
The gross working capital focuses attention on two aspects of current
assets management
(I) Optimum investment in current assets.
(ii) Financing of current assets.

Net Working Capital:

Net working capital refers to the difference between the current assets
and current liabilities. Current liabilities are those claims of outsiders, which are
expected to mature for payment within an accounting year and included bills
payable and outstanding expanses. Net working capacity indicates the liquidity
position of the firm. Generally Net Working capacity is referred to as working
capital.

9
 Operating Cycle:

It is clear that working capital is require because of time gap between the sales and their
actual realization in cash. This time gap is technically termed as ''operating cycle'' of the
business. Funds required investing in inventories: Debtors and other current assets keep on
changing shape and volume. Like a company has some cash in a beginning. This cash may be
supplier of raw material, to meet labour cost and other overheads. These three combine would
generate WIP, which will converted into finished goods on completion of production process. On
sales this finished goods gets converted into debtors and debtors pay, the firm will again have
cash. This cash again used for financing raw material, WIP, etc. Thus there is a complete cycle
when cash gets converted into raw material, WIP finished goods, debtors and finally again cash.
In case of manufacturing company, the operating cycle is a length of time necessary to
complete the following cycle of events:

1. Conversion of cash into raw material.

2. Conversion of cash into work-in-progress.
3. Conversion of work-in-progress into finished goods.
4. Conversion of finished goods into accounts receivable and
5. Conversion of accounts receivable into cash.
The operating cycle of the business can be shown as in the following chart.

ACCOUTS RECEIVABLE SALES

CASH FINISHED GOODS

RAW MATERIALS WORK-IN-PROGRESS

FIG(2)
Working Capital Cycle:

The working capital cycle can be define as

'' The period of time which elapses between the point at which cash begins to be expended on the
production of the product and the collection of cash from the customer''.
The diagram below illustration the working capital cycle

EQUITY AND LOANS

CASH

REVEIVABLE OVERHEADS
PAYAYABLE

SALES
INVENTORY

FIG(3)

11
Each components of working capital (namely, inventroy, receivable, payables)
has two dimensions TIME and MONEY. When they comes to managing
working capital TIME is MONEY. If you can get money to move fast around
the cycle (collect monies due from debtors more quickly) or reduce the amount
of money tied up (reduce inventory level relative to sales). The business will
generate more cash or it will need to borrow less money to fund working
capital. As a consequence, you could reduce the cost of bank interest or you will
have additional free money available to support additional sales growth or
investment. Similarly, if you can negotiate improve terms with supplier e.g., get
longer credit or an increased.
A persual od operating cycle reveals that the cash invested in operations are
recycled back into cash. However, it takes time to reconvert the cash.

The diagram below illustrates the working capital cycle for manufacturing
firm
Work-in-process

Raw material stock Finished material goods

Wages and overheads

Trade Debtors Trade Creditors

Cash

Taxation Shareholder

Lease loans

Fig(4)
12
 The upper portion of the diagram above shows in a simplified from a chain of
events in a manufacturing firm. Each of the boxes in the upper part of a diagram
can be seen as a tank through which funds flow. These tanks, which are
concerned with day-to-day activities, have finds constantly flowing into and out
of them.

The chains starts with a firm buying raw material on credit.

In due course this stock will be used in a production, work will be carried
out on the stock, and it will become part of the firm's work in progress
(WIP).
Work will continue on the WIP until it eventually emerges as a
finished product.
As production progresses, labour cost and overheads will need to be meet.
Of course, as some stage trade creditors will need to be paid.
When the finished goods are sold credit, debtors are increased.

Each of the areas-stocks (Raw materials, work-in-progress and finished), trade

debtors and cash (positive or negative) and trade creditors-can be viewed as
tanks into and from which funds flow.
Working capital is clearly not only the aspect of a business that affects the
amount of cash;

The business will have to make payment to government for taxation.

Fixed asset will be purchased and sold.
Lessor of fixed asset will be paid their rent.
Shareholder (existing or new) may provide new funds in the form of cash.
Some cash may be redeemed for cash.
Dividends may be paid.
Interest obligations will have to be meet by the business.

Unlike movements in the working items, most of these 'non-working capital'

cash transactions are not every day events. Some of them are annual events (eg.,
tax payments, lease payments, dividends, interest and, possibly, fixed asset
purchases and sales). Others (eg., new equity and loans finance and redemption
of old equity and loan finance) would typically be rarer events.

13
NEED OF WORKING CAPITAL MANAGEMENT:

The need of working capital gross or current assets cannot be over

emphasized. As already observed, the objective of financial decision making is
to maximize the shareholders wealth. To achieve this, it is necessary to generate
sufficient profits can be earned will naturally depends upon the magnitude of
the sales among other things but sales cannot convert into cash. There is a need
for working capital in the form of current asset to deal with the problem arising
our of lack of immediate realization of cash against goods sold. Therefore,
sufficient working capital is necessary of sustain sales activity. Technically this
is 10 is refers to operating or cash cycle. If the company has certain amount of
cash, it will be required for purchasing raw material may be available on credit
basis. Then the company has to spend some amount for labour and factory
overheads to convert the raw material in work in progress and ultimately,
finished goods. These finished goods covert in to sales on credit basis in the
form of sundry debtors. Sundry debtors are converting into cash after expiry of
credit period. Thus some amount of cash is blocked in raw material, WIP,
finished goods and sundry debtors and day to day cash requirements. However,
some part of current assets may financed by the current liabilities also. The
amount required to be invested in this current asset is always higher than the
funds available from current liabilities. This is the precise reason why the needs
of working capital arise.

TYPES OF WORKING CAPITAL:

The operating cycle creates the needs for current assets (working capital).
However, the need dose not come to an end after the cycle is complete to
explain this continuing of current assets the destination should be drawn
between permanent and temporary assets.

1. Permanent Working Capital

2. Temporary Working Capital
14
1.Permanent Working Capital:

The need for current assets arises, as already observed because of cash
cycle. To carry on business certain minimum level of working level of working
capital is necessary on continues and unintterrupted basis. For all practical
purpose, this requirement have to be meet permanent as with other fixed
assets. This requirement refers to as permanent or fixed working capital.

2. Temporary Working Capital:

Any amount over and above the permanent level of working capital is
temporary, fluctuating to variable, working capital. This portion of the required
working capital is needed to met fluctuation in demand consequent upon
changes in production and sales as result of seasonal changes.
Graph shows that the permanent level is fairy castant; while temporary
working capital is fluctuating in the case of an expanding the firm permanent
working capital line may not be horizontal.
This may be because of changes in demand for permanent current asset might
be increasing to support a rising level of activities.

DETERMINANTS OF WORKING CAPITAL:

The amount of working capital is depends upon the following factors:

1. Nature of the business

2. Length if the production cycle
3. Size and growth of the business
4. Business/Trade cycle
5. Terms of purchase and sale
6. Profit Ability
7. Operating efficiency

15
1.NATURE OF THE BUSINESS:

Some business are such, due to their vary nature, that their requirement of fixed
capital is more rather than working capital. These business sell services and not the
commodities and that too on cash basis, As such, no funds are blocked in piling
inventories and also no funds are blocked in a receivable. Eg., public utility services
like railways, infrastructure oriented project etc., there requirements of working
capital is less. On the other hand, there are some businesses like trading activity,
where the requirement of fixed assets is less but more money is blocked in
inventories and debtors.
2.LENGHT OF PRODUCTION CYCLE:
In some business-like machine tools industry, the time gap between the acquisition
of raw material till the end of the final production of finished product itself is quite
high. As much amount is blocked either in raw materials or work in progress or
finished goods or even in debtors. Naturally there need of working capital is high.
3. SIZE AND GROWTH OF BUSINESS:
In every small company working capital requirement is high overheads, higher
buying and selling etc., as much medium size business positively has edge over the
small companies. But if the business start growing after certain limit, the working
capital requirements may adversely affect by the increasing size.
4. BUSINESS/TRADE CYCLE:
If the company is the operating in the time of boom, the working capital
requirement may be more as a company may like to buy more raw material, may
increse the production and sales to take the benefit of favourable market, due to
increase in sales, there may more and more amount of funds blocked in stock and
debtors etc., similally in the case of depression also, working capital may be high as
the sales term of value and quantity may be reducing, there may be unneccessary
pilling up of stock without getting sold, the receivable may not be recovered in time
etc.
5. TERMS OF PURCHASE AND SALES:
Sometime due to competition or custom, it may be necessary for company to
extend more and more credit customer, as result with more and more amount is locked
up in debtors are bills receivable which increase the working capital requirement. On
the other hand, in the case of purchase, if the credit is offered by the supplier of goods
and services, a part of working capital requirement may be financed by them, but it is
necessary to purchase on cash basis, the working capital requirement will be higher.

16
 CHAPTER 3

INDUSTRY AND COMPANY PROFILE

 INDUSTRY AND COMPANY PROFILE

The bank was established in the year 1998. With the dedicated and
courteous services rendered by the bank the business is increasing substantially
year after year and the bank has completed thirteen (13) successful years
deriving customers utmost satisfaction. The bank has paid dividend at 12%.

MISSION STATEMENT:
To retain the bank's position as premiere Indian Financial Services Group
with world class standard and significant global committed to excellence in
customer, shareholders and employee satisfaction and to play a leading role in
expanding and diversifying financial service while containing emphasis on its
development banking rule.
VISION STATEMENT:
Premier Indian Financial Service Group with prospective world class
standards of efficiency and professionalism and institutional values .
Maximize the shareholder value through high-sustained earning per share.
An institution with cultural mutual care and commitment, satisfying and
Good working environment and continues learning opportunities.
VALUES:
Excellence in customer service.
Profit orientation.
Belonging commitment to bank.
Fairness in all dealings and relations.
Risk taking and innovative.
Team playing .
Learning and renewal.
Integrity
Transparency and discipline policy

17
 ORGANIZATIONAL STRUCUTRE:

The bank is managed by highly professional and dedicated

Board of Directors. The personnel in the bank are highly rich
experience in banking who have worked with various nationalized
banks in different capacities.

CEO

CHIEF GENERAL MANAGER

OFFICER(6)

MANAGER (2)

CLERKS (2)

SUBSTAFF (3)

18
11
 SHAREHOLDING AND LIQUIDITY (TILL 31ST
MARCH 2023
The bank was started in the year 1998 with the share capital of Rs 22.00 lakhs. As
on 31.03.2023, the share capital of the bank increased to Rs 143.46 lakhs. Reserves
increased to Rs 362.79 lakhs and net worth increased to Rs 506.25 lakhs. The bank
has been maintaining statutory liquidity ratio and cash reserve ratio as per the norms
prescribed by Reserve Bank of India scrupulously. The bank is strictly maintaining
SLR and CRR as per RBI guidelines. The bank has invested Rs 1058.58 lakhs in
government securities (Both Central and State Governments), Rs 190.00 lakhs in
various Mutual funds and Rs 850.00 lakhs in fixed deposits with various banks as on
31.03.2023. All the bank assets are insured with IFFCO Tokio general insurance
co.limit ., under banker's indemnity policy.

PRODUCTS AND SERVICES:

SERVICES:

✓ All the types of deposits account.

✓ Loans and advances of various type.
✓ Safe deposit locker.
✓ NEFTS and RTGS facility/SMS alert.
✓ Issuance of DDs/ At par cheque.

TYPES OF DEPOSITS:

✓ Savings bank account.

✓ Current accounts.
✓ Term deposit (cumulative)
✓ Short term deposits
✓ Recurring deposits
✓ Deposit carry attractive rate of interest
✓ Extra interest for senior citizenship

* Deposits are guaranteed by DICGC upto Rs 5 lakhs.*

19
TYPES OF LOANS AND ADVANCES:

❖ Gold loans
❖ Business loans
❖ Loans against deposits
❖ Vehicle loan
❖ Personal loan
❖ Mortage loan/Over draft
❖ Top up loans
❖ Housing loans
❖ Education loans.

20
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

HOW TO ANALYZE WORKING CAPITAL

The purpose of analysis of working capital is a three-step process. This process is

included in following;

Step 1:
• The first step of analysing the working capital begins by determining
the current assets.
• Current assets are comprised of cash, marketable securities,
accounts receivable and current inventories.
• The sum of the total value of each of the above is called the current asset.

Step 2:
• The second step is determining of current liabilities.
• The result will be a working capital.
• In other words current asset minus current liabilities equals to
working capital.

Step 3:
• Take the total of current asset and subtract them from the current assets.
• The result will be a working capital.
• In other words current asset minus current liabilities equal to
working capital.

21
EXAMPLE:

The company has Rs 1,00,000 in cash, Rs 50,000 in securities, Rs 10,000 in

account receivable, and Rs 30,000 in inventory.
On the current liabilities side, the company has Rs 60,000 in accounts
payable, Rs 10,000 in accrued expenses and Rs 20,000 in current debts.

➢ The current assets of the company are :

1,00,000+50,000+10,000+30,000=Rs1,90,000

➢ The current Liabilities are:

60,000+10,000+20,000=Rs90,000

Now take the current assets of Rs 1,90,000 and subtract the current liabilities of
Rs 90,000 to arrive at the working capital 0f Rs 1,00,000.

22
 CURRENT ASSETS:

Current asset is a balance sheet item which equals the sum of cash and
cash equivalents, accounts receivable, inventory, marketable securities, prepaid
expenses, and other assets that could be converted to cash in less than one year.
A company's creditors will often be interested in how much that company has in
current assets, since these assets can be easily liquidated in case the company
goes bankrupt. In addition current assets are important to most companies as a
source of funds for day-to-day operations.

In accounting, a current asset is an asset on the balance sheet which is

expected to be sold or otherwise used up in the near future, usually within one
year, or one operating cycle whichever is longer. Typically current asset include
cash, cash equivalents, accounts receivable, inventory the portion of prepaid
accounts which will be used within a year, and short term investments.

Current Assets = Cash + Bank + Debtors + Bills Receivable + Short

Term Investment + Investment + Inventory +
Prepaid Expenses.

23
 BELOW IS THE LIST OF ASSETS OF CREDIT CO-
OPERATIVE RURAL BANK LIMITED:

FROM THE BALANCE SHEET OF CREDIT CO-

OPERATIVE RURAL BANK (31 MARCH 2023):

Particulars March 2023 March 2022 March 2021

Assets

Cash and bank balance 2,75,18,154.31 3,19,85365.28 2,56,21,935.93

Investments 20,98,58,350.0 18,07,30,850.00 20,62,30,850.00
Loans and Advances 0 22,53,19,816.38 19,56,05,284.70
Interest Receivable 25,37,37,659.3 43,84,010.00 51,20,411.00
Fixed Net Block 1 67,22,779.15 8,93,131.88
Capital Work in Progress 49,91,374.00 0.00 63,41,484.94
Other Deposits 55,59,472.59 12,78,880.00 13,73,671.04
Other Assets 0.00 32,81,941.22 31,47,671.04
Deferred Tax Asset 12,19,380.00 0.00 0.00
28,53,350.85
0.00
Total Assets 45,37,03,647.03 44,44,88,191.49

50,57,38,241.0
6

Table No (1)

24
 so

The current assets of the Credit Co-operative Rural Scoiety in the year 2021
as per the balance sheet (31 March 2021).

Current Assets = Cash and bank balances + loans and advances + Investments

= 2,75,18,154.25, + 25,37,37651.31 + 20,98,58,350.00

= 49,11,14,163.62.

Current Liabilities:

In accounting, current liabilities are considered liabilities of the business that

are to be settled in cash within the fiscal year or the operating cycle, whichever
period is longer.

For example:

Accounts payable for goods, services or supplier that were purchased for use
in the operation for business and payable within a normal period of time would
be current liabilities.
Bonds, mortgages and loans that are payable over the term exceeding one
year would be fixed liabilities or long-term liabilities. However, the payments
due on the long-term loans in the current fiscal year could be considered current
liabilities if the amounts were material.

26
 BELOW THERE IS THE LIST OF CURRENT LIABILITIES
OF CREDIT CO-OPERATIVE RURAL BANK:

FROM THE BALACE SHEEET OF CREDIT CO-

OPERATIVE RURAL BANK (31 MARCH 2023)

Particulars March 2023 March 2022 March 2021

Liabilities

38,22,69,423.7
43,86,41,377.55 39,13,97,479.58 8
Deposits
Reserve Funds &Other reserve 3,62,78,966.42 3,76,05,335.59 3,40,77,870.85
4,56,189.30 6,04,505.10 6,26,389.50
Unclaimed Dividends
17,110.00 23,792.00 39,320.90
Interest Payable in Deposits
Provision for Taxation 15,37,792.00 14,33,290.00 17,91,544.00
67,13,792.00 16,62,202.00 15,97,202.00
Other Provisions
Deferred Tax Liability 20,145.00 58,946.00 0.00
45,36,249.30 42,77,694.56 49,62,478.74
Profit and Loss account
32,30,407.94 31,05,047.30 62,84,803.30
Other liabilities

Total Liability 49,13,41,377.55 44,61,68,292.03 42,66,86,562.75

Table No (2)

27
so

The current liabilities of Credit co-operative rural bank in the year 2023 as per
the balance sheet (31 March 2023)

Current Liabilities = Deposits + Unclaimed Dividends + Interest payable

on deposits + Provision for taxations + Other
provisions

= 43,86,41,377.55 + 4,56,189.30 + 17,110.00

+ 15,37,792.00 + 67,13,943.47
= 44,73,66,412.32.

28
 So
The current assets of credit co-operative rural bank in the year 2023, 2022,
2021 as per the balance sheet (31 March 2023)

2023
Current Assets = Cash and bank balance + Loans and advances + Investment
= 2,75,18,154.31 + 25,37,37,659.31 + 20,98,58,350.00
= 49,11,14,103.62.

2022
Current Assets = Cash and bank balance + Loans and advances + Investment
= 3,19,85,365.28 + 22,53,19,816.38 + 18,07,350.00
= 43,80,36,031.00

2021
Current Assets = Cash and bank balance + Loans and advances + Investment
= 2,56,21,935.93 + 19,56,05,284.70 + 20,62,30,850.00
= 42,74,58,070.63.
INCREASE OR DECRECE OF CURRENT ASSETS OF
CREDIT CO-OPERATIVE RURAL BANK:

Particulars 2021 2022 2023

Current Assets 42,74,58.0703 43,80,36,031.6 49,11,14,163.62

Increase (/decrease) 1,05,77,161.03 5,30,78,131.96

%
increase(decrease) 2.47% 12.11%

Table No (4)
CURRENT ASSETS

hhhhhhhhhhhhhhhhhhhhhhjghghhhhhhhhbmh

4900000000
5900000000
4800000000
4700000000
4600000000
4500000000
4400000000
4300000000
4200000000
4100000000
4100000000
3900000000

Fig (5)
Now

The current assets of the Credit Co-operative Rural Scoiety in the year 2021 as
per the balance sheet (31 March 2021).

2021

Current Liabilities = Deposits + Unclaimed Dividends + Interest payable

on deposits + Provision for taxation + Other provision
= 43,86,41,377.55 + 4,56,189,30 + 17,110.00
+ 15,37,792.00 + 67,13,943.47
= 44,73,66,412.32.

2022
Current Liabilities = Deposits + Unclaimed Dividends + Interest payable
on deposits + Provision for taxation + Other provision
= 39,13,97,479,58 + 6,04,505.10 + 14,33,290.00
+ 16,62,202.00
= 39,51,21,268.68.

2023
Current Liabilities = Deposits + Unclaimed Dividends + Interest payable
on deposits + Provision for taxation + Other provision
= 38,22,69,432.70 +6,26,389.90 + 39,320.00
+17,91,544.00 + 15,97,202.00
= 38,63,23,888.6.
INCREASE OR DECRECE OF CURRENT
LIABILITY OF CREDIT CO-OPERATIVE RURAL
BANK:

Particulars 2021 2022 2023

Current Liability 38,63,23,888.6 39,51,21,268.8 44,73,66,412.32

Increase (/decrease) 87,97,380.08 5,22,45,143.64

%
increase(decrease) 2.27% 13.22%

Table No (5)
Current Liabilities:

4500000000
4400000000
4300000000
4200000000
4000000000
3900000000
3800000000
3700000000
3600000000
3500000000

Fig (6)
Therefore from the above calculation we get that the working capital of credit
co-operative rural bank in the year 2021, 2022 and 2023, as per the balance
sheet (31 March 2023).

2021
Net Working Capital = Current Assets – Current Liability
= 49,11,14,163.62 - 44,73,66,412.33
= 4,37,47,751.3.

2022
Net Working Capital = Current Assets – Current Liability
= 43,80,36,031.66 - 39,51,21,268.62
= 4,29,14,762.98.

2023
Net Working Capital = Current Assets – Current Liability
= 42,74,58,070.63 - 38,63,23,888.6
= 4,11,34,182.03.
INCREASE OR DECRECE OF
CURRENT LIABILITY OF CREDIT CO-OPERATIVE
RURAL BANK:

Particulars 2021 2022 2023

Current Assets 42,74,58.0703 43,80,36,031.6 49,11,14,163.62

Current Liability 38,63,23,888.6 39,51,21,268.8 44,73,66,412.32

Net working capital 4,11,34,182.03 39,51,21,268.62 44,73,66,412.33

Increase (/decrease) 17,80,580.95 8,32,988.32

in NWC

% 4..32% 1.94%
Increase(/decrease)
in NWC

Table No (6)
Net Working Capital:

4400000000
4350000000
4350000000
4250000000
4250000000
4150000000
4150000000
4050000000

Fig (7)
CHAPTER 5

FINDINGS
FINDINGS:

The research is conducted with the data of past three years. And from these
past three years data that the things that I have find after the research done are:

1) Working capital of the company was increasing and showing

positive working capital per year. It shows good liquidity position.
2) In the year 2021-2022 the company's working capital has
increased 4.32%.
3) In the year 2022-2023 the company's working capital has
increased 1.94%.
4) Positive working capital indicates that company has the ability
of payments of short term liabilities.
5) Working capital increased because of increment in the current assets
is more than increase in the current liabilities.
6) The company's current assets were always more than requirement it
affect on profitability of the company.
7) Current assets are more than current liabilities indicate that company
used long-term funds for short-term requirement, where long term funds
most costly then short-term funds.
 CHAPTER 6

SUGGESTIONS
SUGGESTIONS:

The research is conducted with the data of past three years. However, better
insight could be obtained if the research is continued with the data for more
number of years.

1) There should maintain proper management in inventory.

2) Current assets should not be exceeding over because it is increase
the investment od company.
3) The working capital should in a balance condition it should not
be fluctuate excessively.

All over the company should manage the Net Working Capital of a company in
such a that it should enhance the effectiveness and efficiency of the company's
profitability.
CHAPTER 7

CONCLUSION
CONCLUSION:

Working Capital Management is important aspect of financial management.

The study of working capital management of Credit Co-operative Bank has
revealed that the current ratio is in an increasing trend. The study has been
conducted on working capital management which will help the company to
manage its working capital efficiently and effectively.

Over all the company has good liquidity position and sufficient funds to
repayment of liabilities. Company has accepted conservative financial policy
and thus maintaining more current assets balance. Company is increasing
sales volume per year each supported to the company for sustain in the number
one position.

From this research I found that the overall Working Capital (WC) of Credit
Co-operative Rural Bank is increased by more than 50% in the last three years.
Which are a significant trend is giving a good sound for the health of the bank.
CHAPTER 8

BIBLIOGRAPHY
BIBLIOGRAPHY

For the purpose of collecting information the following sources were referred :

✓ Textbooks:

✓ Authors- Shashi K. Gupta and Dr.

R.K. Sharma and Neeti
Gupta,
✓ Textbooks- Financial Management,
✓ Publisher- Kalyani publishers.

Manuals from Credit Co-operative Bank.

✓ Websites:

✓ www.wikipedia.com

✓ www.scribd.com
✓ www.google.com
✓ www.rbi.com
✓ www.credit co-operative alagapuri.com
QUESTIONARIE
QUESTIONS:

1) There is no relationship between working capital management efficiency

and profitability.
YES__________NO__________

2) The proportions of working capital components affect the efficiency of the

Working capital .
YES__________NO__________

3) Profitability could be increased at the expense of liquidity.

YES__________NO__________

4) Working capital. can be managed efficiently by maintaining optimum level

of its components.
YES__________NO__________

5) it is considered a good working capital management if current assets of the

company are able to fulfill all its current liabilities.
YES__________NO__________

6) Cash position and bills receivable decide the liquidity of a firm

YES__________NO__________

7) There is a negative relationship between liquidity of the company

and its profitability.
YES__________NO__________
 8) Working capital management in the company involves the control of cash.
YES__________NO__________

9) Negligence in proper assessment of the working capital lead to cash crisis

and ultimately to liquidation.

YES__________NO_______

10) Efficient working capital management is expected to improve a

company's profitability and liquidity.
YES__________NO__________

11) Management of working capital by managing cash, debtors and creditors

are important to the financial health of businesses.
YES__________NO__________

12) Large amount of cash invested in working capital will have a

negative significant impact on profitability.
YES__________NO__________

13) .Good management of working capital generate cash and help to

improves profits and reduces risks.
YES__________NO__________
Multiple Choice Questions

14) Working capital management plays an important role to increase;

a)Profitability.
b) Liquidity.
c) Both.
15) Working capital can be optimized by
d) Managing cash.
e) Managing bills receivable and payables.
f) Managing debtors and creditors.
g) All of these.
16) Poor working capital management can lead to
h) Over capitalization.
i) Over trading.
j) Both.
17) Working capital for the bank is calculated
k) Weekly.
l)Monthly.
i)quarterly
m) Yearly.
18) Good working capital management help in
n) Helping to earn interest or reducing interest payments over trading.
o) Helping managers take financial responsibility.
p) Helping managers to measure their own performance and the performance of
their team.
q) All of these.
19) For working capital assessment documents/papers required are
r) Balance sheet.
s) Profit &loss account.
t) Both.
 OPEN-ENDED QUESTION

20). What do you .want to say about working capital management in

your company?
21) .How the assessment of working capital is calculated?