ON

“OVERVIEW OF SAMSUNG”

Samsung Electronics Co. Ltd.

6th Floor, DLF Centre, Sansad Marg, New Delhi-110001

SUBMITTED BY

(PRIYANGSHU ACHARYA BHADURI)

(2025)

RegistrationNo:058-1111-0490-22.

Roll No: 221058-21-0043.

UNDER THE GUIDANCE OF:

SUBMITTED TO
VIJAYGARH JYOTISH RAY
COLLEGE
(CALCUTTA UNIVERSITY)

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 DECLARATION

I, am Student of B.COM FINANCE (CALCUTTA UNIVERSITY) I hereby declare that the Project
Report on “OVERVIEW OF SAMSUNG” SAMSUNG ELECTRONICS CO. LTD. ,6th Floor, DLF
Centre, Sansad Marg, New Delhi-110001 is been result of my own work and has been carried out
under supervision of MANISHA CHAUDHURY.

I declare that this submitted work is done solely by me and to the best of my knowledge; no such
work has been submitted by any other person forth award of post graduation degree or diploma.

I also declare that all the information collected from various secondary sources has been duly
acknowledged in this project report.

PLACE: KOLKATA (PRIYANGSHU ACHARYA BHADURI)

DATE:

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 ACKNOWLEDGEMENT

My debts are many and I acknowledge them with much pride and delight. This project Report
was​ undertaken​ for​ the​ fulfillment​ of​ B.COM​ Programme​ pursuing at(
CALCUTTA UNIVERSITY) I would like to thank my institute and SAMSUNG
ELECTRONICS CO. LTD., which has provided me the opportunity for doing this project
work.

I am extremely grateful to Prof. MANISHA CHAUDHURY (Professor of Vijaygarh Jyotish Ray

College), for his invaluable help and guidance throughout my work. He kindly evinced keen
interest in my work and furnished some useful comments, which could enrich the work
substantially.

In fact it is very difficult to acknowledge all the names and nature of help and encouragement
provided by them. I would never forget the help and support extended directly or indirectly to me
by all.

(PRIYANGSHU ACHARYA BHADURI)

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 TABLE OF CONTENTS

S.NO. PARTICULARS PAGE

NO.
1 INTRODUCTION OF SAMSUNG ELECTRONICS CO LTD 5
●​ BOARD OF DIRECTOR
●​ OVERVIEW OF THE INDUSTRY
●​ PROFILE OF THE ORGANISATION
2 RESEARCH OBJECTIVE & METHODOLOGY 14
●​ STATEMENT OF THE PROBLEM
●​ OBJECTIVE OF THE STUDY
●​ SCOPE OF THE STUDY
●​ NEED AND IMPORTANCE OF THE STUDY
●​ DATA COLLECTION METHOD
●​ LIMITATION OF THE STUDY

3 CONCEPTUAL DISCUSSION 17

4 DATA ANALYSIS 42
●​ COLLECTION OF DATA
●​ DATA ANALYSIS & INTERPRETATION
5 FINDING, SUGGESTIONS AND CONCLUSION 56

●​ MAJOR FINDING
●​ CONCLUSION OF FINDING
●​ SUGGESTIONS AND RECOMMENDATIONS

6 ANNEXURE 58

●​ SUPPORTING DOCUMENTS
●​ BIBLIOGRAPHY

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 CHAPTER NO. 1

INTRODUCTION

Samsung India Electronics Pvt. Ltd. is a wholly owned subsidiary of the South Korea-based multinational
conglomerate Samsung Electronics Co. Ltd., one of the world's largest and most recognized technology
companies. Since its inception in India in December 1995, Samsung has firmly established itself as a market
leader across various sectors of the Indian consumer electronics and technology market, including smart
phones, televisions, home appliances, and digital solutions.

Headquartered in Gurugram, Haryana, Samsung India has significantly contributed to the country’s digital
transformation by aligning its business operations with the government’s “Digital India” and “Make in
India” initiatives. Over the years, the company has expanded its footprint across the country through a
robust distribution network, cutting-edge manufacturing units, advanced research and development (R&D)
centers, and a comprehensive after-sales service infrastructure.

One of Samsung India’s key strengths lies in its extensive local manufacturing capabilities. The company
operates one of the world's largest mobile phone manufacturing plants in Noida, Uttar Pradesh, which not
only caters to the domestic market but also supports exports to other countries. This manufacturing hub
exemplifies Samsung's commitment to creating local employment opportunities and enhancing production
capacities to meet the growing demands of Indian consumers.

In addition to its manufacturing prowess, Samsung India places significant emphasis on innovation and
technology development through its R&D centers located in Bengaluru, Noida, and Delhi. These centers
focus on developing India-specific products and solutions, ranging from affordable smartphones to smart
home appliances, tailored to suit the diverse needs of Indian consumers. Samsung’s research teams in India
are actively involved in advanced technologies such as artificial intelligence (AI), machine learning, 5G,
and Internet of Things (IoT), helping to bring global innovations to Indian markets.

Samsung India has also made remarkable strides in customer satisfaction and service quality. With an
extensive network of customer service centers across urban and rural areas, Samsung ensures quick and
efficient support for its wide range of products. The company continuously innovates in service delivery,
offering digital platforms for product support, doorstep service, and mobile vans for rural outreach.
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Beyond business, Samsung India demonstrates strong corporate social responsibility through various
community outreach programs. Initiatives such as Samsung Smart Class, Samsung Technical School, and
other educational and skill development programs aim to empower youth by enhancing digital literacy and
vocational training. The company’s efforts in sustainable practices, including eco-friendly product design
and energy-efficient technologies, further reinforce its role as a responsible corporate citizen.

In conclusion, Samsung India Electronics Pvt. Ltd. stands as a symbol of innovation, quality, and
commitment in the Indian market. By combining global expertise with local insights, the company continues
to influence the everyday lives of millions of Indians through its technologically advanced and user-friendly
products. With a strong vision for the future, Samsung India is well-positioned to maintain its leadership in
the Indian electronics and digital ecosystem.

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 FOUNDATION

Samsung was founded on March 1, 1938, by Lee Byung-chul in Daegu, South Korea. Initially established
as a trading company, Samsung began its operations with just 40 employees. The company dealt primarily
in local groceries, dried-fish, noodles, and other goods, exporting them to China and its provinces.

The name “Samsung” means “three stars” in Korean, symbolizing greatness, strength, and eternity. From
its humble beginnings, Lee Byung-chul envisioned building a company that would last and grow to be
powerful, much like the symbolic “three stars.”

In the 1950s and 1960s, Samsung began diversifying its business, entering sectors such as textiles, food
processing, insurance, and retail. However, the major transformation came in the late 1960s, when Samsung
entered the electronics industry. In 1969, Samsung Electronics was established, marking a significant shift
toward the technology and industrial sectors.

By the 1970s and 1980s, Samsung began producing televisions, refrigerators, washing machines, and other
consumer electronics, gradually expanding into semiconductors and telecommunications. These decades
laid the foundation for Samsung’s global emergence as a technology powerhouse.

Today, Samsung Electronics Co., Ltd. is one of the largest producers of smartphones, televisions, memory
chips, and displays in the world. It operates in over 80 countries and is a key part of the larger Samsung
Group, one of South Korea’s most powerful chaebols (family-owned conglomerates).

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 INTERNATIONAL GROWTH

Samsung’s international growth began in the late 20th century as the company ventured beyond South
Korea to establish a global footprint. The company's focus shifted to technology and consumer electronics
in the 1970s and 1980s. Here's how Samsung expanded internationally:

1.​ Global Expansion into Electronics (1980s):​

By the 1980s, Samsung was producing televisions, home appliances, and mobile phones, and started
exporting these products to international markets. The company focused on innovation and quality to
compete in the global market.
2.​ Entry into the US and Europe (1990s):​
Samsung expanded its reach in major markets, including the US and Europe. The company became a
key player in the mobile phone market and consumer electronics, with its televisions becoming a
symbol of quality and affordability in Europe and the US.
3.​ Technological Innovation (2000s):​
As Samsung increased its investments in R&D, it advanced its position in global markets with
cutting-edge products. Samsung led in mobile phones, with the launch of iconic series such as
Galaxy, and became a dominant player in memory chips, semiconductors, and displays. By 2009,
Samsung had become the world's largest producer of memory chips.
4.​ Manufacturing Hubs and R&D Centers:​
Samsung’s growth was also supported by establishing manufacturing plants in key global regions,
including China, Vietnam, India, and Brazil. Additionally, the company opened R&D centers in
Europe, the United States, and India, enabling it to tailor products to meet the demands of local
markets.
5.​ Global Leadership in Smartphones:​
By the late 2000s and 2010s, Samsung had become a global leader in smartphones. Its Galaxy
series became one of the most successful smartphone lines globally, with the company holding a
dominant market share. Samsung's success in smartphones helped propel its brand to international
recognition.
6.​ Diversification and Investment in Emerging Markets:​
Samsung also made strategic investments in emerging markets such as India, Africa, and Latin
America, becoming a household name in those regions. Its affordable smartphones and consumer
electronics further expanded the brand’s reach.

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 7.​ Continued Technological Leadership (2010s–Present):​
Samsung continued its leadership in key technologies like 5G networks, OLED displays, and AI.
The company’s role in semiconductors and smart devices has solidified its position as a global tech
giant, competing with companies like Apple, Huawei, and Sony.

PRESENT

As of 2025, Samsung Electronics remains a global leader in technology, focusing on AI, mobile
innovations, and display technologies. The company continues to expand its Galaxy lineup with
AI-powered features and high-performance smartphones. Samsung is also leading in AI-driven TVs and
sustainable practices, aiming for net-zero emissions by 2050. Despite challenges in the semiconductor
market due to trade restrictions, Samsung has posted strong revenue growth, underscoring its resilience in a
dynamic global market.

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 BOARD OF DIRECTOR

1.​ Han-Jo Kim – Chairman of the Board & Independent Director​

Chairman since March 20, 2019, with a term ending on March 19, 2025. He is a finance and accounting
expert who previously served as President of the Korea Exchange Bank and Vice Chairman of Hana Financial
Group.
2.​ Jong-Hee Han – Vice Chairman & CEO​
Serving as Vice Chairman & CEO since March 18, 2020, with a term ending on March 17, 2026. He also
heads the Device eXperience (DX) Division and the Digital Appliances Business.
3.​ Tae-Moon Roh – President & Head of Mobile eXperience​
Appointed on March 16, 2022, with a term ending on March 15, 2025. He leads the Mobile eXperience
Business, overseeing flagship products like the Galaxy series.
4.​ Hark-Kyu Park – President & CFO (DX)​
Joined the board on March 15, 2022. He is responsible for the financial strategy and operations within the
DX Division.
5.​ Jung-Bae Lee – President & Head of Memory​
Appointed on March 15, 2022. He leads the Memory Business, focusing on DRAM and NAND flash memory
products.

OVERVIEW OF THE INDUSTRY

The technology and consumer electronics industry encompasses a wide range of products and services
related to electronics, software, telecommunications, and information technology. This industry is driven by
advancements in semiconductors, smartphones, computing devices, AI, and consumer electronics like
TVs, home appliances, and wearable devices.

Key Segments of the Industry:

1.​ Consumer Electronics:

o​ This includes products like smartphones, televisions, computers, tablets, smartwatches,
and home appliances.
o​ Manufacturers are continuously innovating to offer better features, higher performance,
and greater user experiences. Companies focus on design, integration, and providing
connected ecosystems.

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 2.​ Semiconductors:
o​ The semiconductor sector is crucial, providing the essential components for smartphones,
computers, and other electronics. Companies manufacture memory chips, processors, and
displays, which are the backbone of the global digital economy.
o​ Samsung, for example, is one of the largest producers of memory chips and
semiconductors, playing a vital role in the supply chain.
3.​ Telecommunications:
o​ With the rise of 5G, smartphones, mobile devices, and network infrastructure,
telecommunications is a significant sub-sector of the industry. The race to develop faster,
more reliable networks is shaping the future of global connectivity.
o​ Companies are also expanding into IoT (Internet of Things), creating an interconnected
ecosystem of devices.
4.​ Artificial Intelligence (AI) & Emerging Technologies:
o​ AI, machine learning, and big data analytics are transforming the industry, with
applications across smartphones, autonomous systems, healthcare, robotics, and more.
Companies like Samsung invest heavily in AI for smart products and systems.
o​ Quantum computing, augmented reality (AR), and virtual reality (VR) are also becoming
key trends within the tech industry.

Few Interesting Facts:

●​ Smart phones as the World's Most Used Device

Smart phones have become the most widely used electronic devices globally. As of 2025, there are more
than 6.8 billion smart phone users worldwide, making up over 85% of the global population. These
devices have evolved into hubs for communication, entertainment, and productivity.

●​ The Semiconductor Industry is a $500 Billion+ Market

The semiconductor industry, which is essential for devices like smartphones, computers, and even cars, is
one of the largest markets in the world. It’s a $500 billion+ industry and growing rapidly as demand for
chips in AI, 5G, automotive tech, and IoT increases.
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 ●​ The First Cell Phone Weighed 2.5 Pounds

The first commercial mobile phone, the Motorola DynaTAC 8000X, launched in 1983, weighed a massive
2.5 pounds and had a battery life of just 30 minutes of talk time. Today’s smartphones are thinner, lighter,
and more powerful, with 5G connectivity and incredible processing power.

●​ AI and Consumer Electronics are Merging

Artificial Intelligence (AI) is increasingly embedded in consumer electronics, revolutionizing devices like
smartphones, TVs, and home appliances. From voice assistants like Siri and Alexa to smart refrigerators
that track groceries and suggest recipes, AI is shaping the future of everyday products.

●​ Global TV Market Is Expected to Reach $300 Billion

The global TV market is predicted to reach $300 billion by 2026, with smart TVs taking the lead in sales.
With innovations like OLED, QLED, and 8K resolution, the TV industry is highly competitive, with
companies racing to deliver the best viewing experiences.

PROFILE OF THE ORGANISATION

Samsung Electronics Co., Ltd., founded in 1969 and headquartered in Suwon, South Korea, is a global
leader in technology and consumer electronics. It operates under the larger Samsung Group, established in
1938 by Lee Byung-chul. With over 260,000 employees worldwide, Samsung is known for its innovation
across three major divisions: Consumer Electronics (TVs, appliances), IT & Mobile Communications
(smartphones, tablets, network systems), and Device Solutions (semiconductors, display panels). The
company is a top manufacturer of memory chips and smartphones, with its Galaxy series and OLED/QLED
displays enjoying global popularity. Samsung has a strong global presence with operations in over 80
countries, large-scale manufacturing facilities in countries like India and Vietnam, and R&D centers across
the world. It heavily invests in research and development, spending more than $20 billion annually, and is
committed to achieving net-zero carbon emissions by 2050. In Q1 2025, Samsung reported $55.5 billion in
revenue and $4.7 billion in operating profit, despite challenges in the semiconductor market. Guided by the
vision “Inspire the World, Create the Future,” Samsung is consistently ranked among the world’s top brands

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and is recognized for its contributions to innovation, sustainability, and global social impact.

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CHAPTER NO 2

STATEMENT OF THE PROBLEM

The researcher aim to find out the liquidity and profitability position of the company. This study
is concerned with problems involved in working capital like estimation of working capital and
provision of working capital at the time it is needed.

Working capital represents that part of resource of the business, which makes the business work.
In the absence of proper management of working capital it would be difficult to achieve the
requirement of the company.

OBJECTIVE OF THE STUDY:

1.​ To examine the effectiveness of working capital management polices with the help of
accounting ratio.
2.​ To study liquidity position of the company by taking various measurements.
3.​ To evaluation the financial performance of the company.
4.​ To make suggestions for policymakers for effective management of working capital.

SCOPE OF STUDY

The scope of this study is to provide an insight into concept of working capital management and
illustrate it by actually working capital management of Samsung Electronics Co. Ltd. This study
also provides insight of the customer preference of Samsung Electronics Co. Ltd. and its market
share as competitor.

Working Capital is the money used to make goods and attract sales. The less working capital
used to attract sales, the higher is likely to be the return on investment. Working Capital
Management is about the commercial and financial aspects of Inventory, Credit, Purchasing,
Marketing and royalty and investment policy. The higher the profit margin, the lower is like to be
the level of working capital tied up in creating and selling titles. The importance of working
capital management stems from the two reasons viz ,.

1.​ A substantial portion of total investment is invested in current assets

2.​ Level of current assets will change quickly with the variation in sales.

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Hence, an attempt should be made to analyze the size and composition of working capital and
whether such an investment will lead to increased of business ever a period of time. After
determining the requirements of current assets, one of the importance tasks of the financial
manager is to select an assortment of appropriate sources of finance for the current assets.

The efficient utilization of funds is very important in an organization. The scope of this project is to
analyze the efficient utilization of working capital. This project document emphasizes handling the
various techniques in articulating the glass factory’s monetary strengths and weaknesses, as well as its
growth over a specific period of time. Therefore, this project will help the organization’s future by
suggesting means to measure and maintain the optimal level of working capital.

NEED AND IMPORTANCE OF THE STUDY:

1.​ Their projects is helpful in knowing the company’s position of funds maintenance and
setting the standards for working capital inventory levels, current ratio level, quick ratio,
current amount turnover level & web torn turnover levels.
2.​ This project is helpful to the managements for expanding the dualism & the project
viability & present availability of funds.
3.​ This project is also useful as it compares the present year's data with the previous year's
data and thereby shows trend analysis, i.e., whether the fund is increasing or decreasing.
4.​ The project is completed as a comprehensive study. It provides an overall view of the
organization and is useful for making future expansion decisions by the management.

DATA COLLECTION METHOD

Primary Data

In respect of primary data which the researcher is directly collects data that have not been
previously collected.

The primary data was gathered through personal interaction with various functional heads and
other technical personnel. Some information was also collected by observation.

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Secondary Data:

Secondary data was collected various reports / annual reports, documents charts, management
information systems, etc in PRAGA. And also collected various magazines, books, newspapers
and internet.

The analysis of the information gathered has been made on the basis of the clarifications sought
during the personal discussions with the concerned people and perception during the personal
visits to the important areas o services.

LIMITATIONSOFTHESTUDY

Following were the limitations of the study:

1.​ Time was limited.

2.​ The sample size of 100 is very small and more than that could not be possible.
3.​ The study was only based on the survey of respondents in DELHI could be undertaken
for the survey due to lack of time.
4.​ This of working capital management is based solely upon the annual reports of
the company in hard copy and through company website.

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 CHAPTER NO 3

CONCEPTUAL DISCUSSION

OVERVIEW OF WORKING CAPITAL MANAGEMENT

Working capital is a financial metric which represents operating liquidity available to a business,
organization or other entity, including governmental entity. Along with fixed assets such as plant
and equipment, working capital is considered a part of operating capital. Gross working capital
equals to current assets. Net working capital (NWC) is calculated as current assets minus current
liabilities.Itisaderivationofworkingcapitalthatiscommonlyusedinvaluationtechniquessuch as
DCFs (Discounted cash flows). If current assets are less than current liabilities, an entityhas a
working capital deficiency, also called a working capital deficit.

A company can be endowed with assets and profitability but still suffer from a lack of liquidity if its assets
cannot readily be converted into cash. Positive working capital is essential to ensure that a firm can
continue its operations and has sufficient funds to meet both maturing short-term debts and upcoming
operational expenses. The management of working capital involves effectively handling inventories,
accounts receivable, accounts payable, and cash to maintain operational efficiency and financial stability.

Working capital refers to that part of the firm’s capital which is required for financing short-term or current
assets, such as cash, marketable securities, debtors, and inventories. The funds invested in current assets
keep revolving quickly, being constantly converted into cash, and this cash flows out again in exchange for
other current assets. Hence, it is also known as revolving or circulating capital or short-term capital.

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Working capital management is concerned with the problems that arise in attempting to manage the
current assets, current liabilities, and the interrelationships that exist between them.

The term current assets refers to those assets that, in the ordinary course of business, can or will be turned
into cash within one year without undergoing a diminution in value and without disrupting the operation of
the firm. The major current assets are cash, marketable securities, accounts receivable, and inventory.

Current liabilities are those liabilities that, at their inception, are intended to be paid in the ordinary course
of business within a year, out of the current assets or earnings of the firm. The basic current liabilities
include accounts payable, bills payable, bank overdrafts, and outstanding expenses.

The goal of working capital management is to manage the firm’s current assets and current liabilities in
such a way that a satisfactory level of working capital is maintained, ensuring smooth operations and
liquidity.

Definition:-

According to Guttmann & Dougall-

“Excess of current assets over current liabilities”.

According to Park & Gladson-

Working capital refers to the excess of current assets of a business (such as cash, accounts receivable,
and inventories) over current liabilities owed to employees and others (such as salaries and wages
payable, accounts payable, and taxes owed to the government).

Capital required for a business can be classified under two main categories via,

1)​ Fixed Capital

2)​ Working Capital

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Every business needs funds for two purposes: for its establishment and to carry out its day-to-day
operations. Long-term funds are required to create production facilities through the purchase of fixed
assets such as plant and machinery, land, buildings, furniture, etc. Investments in these assets represent that
part of the firm’s capital which is blocked on a permanent or fixed basis, and this is referred to as fixed
capital. On the other hand, short-term funds are needed for purposes such as the purchase of raw
materials, payment of wages, and covering other day-to-day expenses.

CONCEPT OF WORKING CAPITAL

There are two concepts of working capital:

1.​ Gross working capital

2.​ Networking capital

The gross working capital is the capital invested in the total current assets of the enterprise. Current assets
are those assets that can be converted into cash within a short period, normally within one accounting year.

CONSTITUENTS OF CURRENT ASSETS

1)​ Cash in hand and at bank

2)​ Bills receivables

3)​ Sundry debtors

4)​ Short term loans and advances

5)​ Inventories of stock as:

a.​ Raw material

b.​ Work in process

c.​ Stores and spares

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 d.​ Finished goods

6.​Temporary investment of surplus funds.

7.​Prepaid expenses

8.​Accrued incomes.

9.​Marketable securities.

In a narrow sense, the term working capital refers to the net working. Net working capital is the
excess of current assets over current liability, or, say:

NETWORKINGCAPITAL= CURRENTASSETS–CURRENT LIABILITIES.

Net working capital can be positive or negative. When the current assets exceeds the current
liabilities are more than the current assets. Current liabilities are those liabilities, which are
intended to be paid in the ordinary course of business within a short period of normally one
accounting year out of the current assts or the income business.

CONSTITUENTS OF CURRENT LIABILITIES

1.​ Accrued or outstanding expenses.

2.​ Short term loans, advances and deposits.

3.​ Dividends payable.

4.​ Bank overdraft.

5.​ Provision for taxation, if it does not amt. to app. Of profit.

6.​ Bills payable.

7.​ Sundry creditors.

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CLASSIFICATION OF WORKING CAPITAL

Working capital may be classified in two ways:

1.​ On the basis of concept.

2.​ On the basis of time.

On the basis of the concept of working capital, it can be classified into two categories: gross
working capital and net working capital. On the basis of time, working capital may be classified
as:

1.​ Permanent or fixed working capital.

2.​ Temporary or variable working capital

Amount of Working

Capital​ Temporary capital

Permanent Capital

Time

PERMANENT OR FIXED WORKING CAPITAL

Permanent or fixed working capital is minimum amount which is required to ensure effective
utilization of fixed facilities and for maintaining the circulation of current assets. Every firm has
to maintain a minimum level of raw material, work-in-process, finished goods and cash balance.
This minimum level of current assets is called permanent or fixed working capital as this part of

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working is permanently blocked in current assets. As the business grow the requirements of
working capital also increases due to increase in current assets.

TEMPORARY OR VARIABLE WORKING CAPITAL

Temporaryorvariableworkingcapitalistheamountofworkingcapitalwhichisrequiredtomeet the
seasonal demands and some special exigencies. Variable working capital can further be
classifiedasseasonalworkingcapitalandspecialworkingcapital.Thecapitalrequiredtomeetthe
seasonal need of the enterprise is called seasonal working capital. Special working capital is that
partofworkingcapitalwhichisrequiredtomeetspecialexigenciessuchaslaunchingofextensive
marketing for conducting research, etc.

Temporary working capital differs from permanent working capital in the sense that is required
for short periods and cannot be permanently employed gainfully in the business.

IMPORTANCE OR ADVANTAGE OFADEQUATE WORKING CAPITAL

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 ●​ SOLVENCY OF THE BUSINESS:

Adequate working capital helps in maintaining the solvency of the business by ensuring uninterrupted
production.
●​ Goodwill:

A sufficient amount of working capital enables a firm to make prompt payments and maintain its goodwill.

●​ Easy loans:

Adequate working capital leads to high solvency and a good credit standing, enabling the firm to arrange
loans from banks and other financial institutions on easy and favorable terms.

●​ Cash Discounts:

Adequate working capital also enables a concern to avail cash discounts on purchases, thereby reducing
costs.
●​ Regular Supply of Raw Material:

Sufficient working capital ensures regular supply of raw material and continuous production.

●​ Regular Payment Of Salaries, Wages And Other Day To Day Commitments:

It leads to the satisfaction of employees, raises their morale, increases their efficiency, reduces wastage and
costs, and enhances production and profits.

●​ Ability to Face Crises:

A concern can face the situation during the depression.

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 FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENTS

1.​ NATURE OF BUSINESS:

The requirements of working capital are very limited in public utility undertakings such as electricity, water
supply, and railways because they offer cash sales only and supply services, not products. As a result, no
funds are tied up in inventories or receivables. On the other hand, trading and financial firms require less
investment in fixed assets but must invest a large amount of working capital alongside their fixed
investments.

2.​ SIZE OF THE BUSINESS:

Greater the size of the business, greater is the requirement of working capital.

3.​ PRODUCTION POLICY:

If the policy is to keep production steady by accumulating inventories, it will require higher
working capital.

4.​ LENGTH OF PRDUCTION CYCLE:

The longer the manufacturing time the raw material and other supplies have to be carried
for a longer production process with a progressive increase in labor and service costs
before the final output is realized, a higher amount of working capital is required. final
product is obtained. So working capital is directly proportional to the length of the
manufacturing process.

Sources of working capital

The company can choose to finance its current assets by

1.​Long term sources

2.​Short term sources

3.​A combination of them.

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 Long-term sources of permanent working capital include equity and preference shares, retained
earnings, debentures, and other long-term debts from public deposits and financial institutions.
The long-term working capital needs should be met through long-term means of financing. Financing
through long-term sources provides stability, reduces the risk of repayment pressure, and increases the
liquidity of the business concern. Various types of long-term sources of working capital are
summarized as follows:

1.​Issue of shares:

It is the primary and most important sources of regular or permanent working capital. Issuing
equity shares as it does not create and burden on the income of the concern. Nor the concern is
obliged to refund capital should preferably raise permanent working capital.

2.​Retained earnings:

Retained earnings, or accumulated profits, are a permanent source of regular working capital.
They are a regular and the cheapest source of finance, as they do not create any charge on the future
profits of the enterprise. Issue of debentures:

It creates a fixed charge on future earnings of the company. Company is obliged to pay interest.
Management should make wise choice in procuring funds by issue of debentures.

Short term sources of temporary working capital

Temporary working capital is required to meet the day-to-day business expenditures..The

variable working capital would finance from short term sources of funds. And only the period
needed. It has the benefits of, low cost and establishes closer relationships with banker.

Some sources of temporary working capital are given below:

1.​Commercial bank:

A commercial bank constitutes a significant source of short-term or temporary working capital. This
is provided in the form of short-term loans, cash credit, overdrafts, and through the discounting of bills of
exchange.
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2.​Public deposits:

Most of the companies in recent years depend on this source to meet their short term working
capital requirements ranging for six month to three years.

3.​Various credits:

Trade credit, business credit papers and customer credit are other sources of short term working
capital. Credit from suppliers, advances from customers, bills of exchanges, etc helps to raise
temporary working capital

4.​Reserves and other funds:

Various funds of the company like depreciation fund. Provision for tax and other provisions kept
with the company can be used as temporary working capital. The company should meet its
working capital needs through both long term and short term funds. It will be appropriate to meet
at least 2/3 of the permanent working capital equipments form long term sources, whereas the
variables working capital should be financed from short term sources. The working capital
financing mix should be designed in such a way that the overall cost of working capital is the
lowest, and the funds are available on time and for the period they are really required.

SOURCES OF ADDITIONAL WORKING CAPITAL

Sources of additional working capital include the following-

1.​Existing cash reserves

2.​Profits (when you secure it as cash)

3.​Payables(credit from suppliers)

4.​New equity or loans from shareholder

5.​Bank over drafts line of credit

6.​Long term loans

26
 If we have insufficient working capital and try to increase sales, we can easily overstretch the
financial resources of the business. This is called overtrading. Early warning signs include a rapid
increase in sales without a corresponding increase in working capital, frequent cash flow shortages,
delayed payments to suppliers, increasing short-term borrowings, and declining liquidity ratios.

1.​Pressure on existing cash

2.​Exceptional cash generating activities. Offering high discounts for clear cash payment

3.​Bank over draft exceeds authorized limit

4.​Seeking greater over drafts or lines of credit

5.​Part paying suppliers or there creditor.

6.​Management pre occupation with surviving rather than managing.

Different Aspects of Working Capital Management

●​ Management of Inventory
●​ Management of Receivables/Debtors
●​ Management of Cash
●​ Management of Payables/Creditors

MANAGEMENTOFINVENTORY

Inventories constitute the most significant part of current assets of a large majority of companies.
On an average, inventories are approximately 60% of current assets. Because of large size, it
requires a considerable amount of fund. The inventory means and includes the goods and
services beings old by the firm and the raw material or other components being used in the
manufacturing of such goods and services.

Nature of Inventory:

The common type of inventories for most of the business firms may be classified as raw-
material, work-in-progress, finished goods.

27
Raw material:

It is basic inputs that are converted into finished products through the manufacturing process. Raw
materials inventories are those units which have been purchased and stored for future productions..

Work–in–process:

Work-in-process is semi-manufactured products. They represent products that need more work
before them become finished products for sale.

Finished goods:

These are completely manufactured products which are ready for sale. Stocks of raw materials and
work-in-process facilitate production, while stock of finished goods is required for smooth marketing
operations. Thus, inventories serve as a link between the production and consumption of goods. The
levels of the three kinds of inventories for a firm depend on the nature of the business. A manufacturing
firm will have substantially high levels of all the three kinds of inventories, while a retail or wholesale
firm will have a very high level of finished goods inventories and no raw material and work-in-process
inventories.So operating cycle can be known as following:-

RawMaterial

WorkinProgress

CashCollectionfrom

Sales

28
The receivables (including the debtors and the bills) constitute a significant portion of the
working capital. The receivables emerge whenever goods are sold on credit and payments are
deferred by customers. A promise is made by the customer to pay cash within a specified period.
Future are called trade debtors and represent the firm’s claim or assets. Thus, receivable is a type
of loan extended by the seller to the buyer to facilitate the purchase process. Receivables may be
defined as a collection of steps and procedures required to properly weigh the costs and benefits
attached with the credit policy. The Receivable Management consists of matching the cost of
increasing sales (particularly credit sales) with the benefits arising out of increased sales with the
objective of maximizing the return on investment of the firm.

29
.

Nature

The term credit policy issued to refer to the combination of three decision variables:

1.​ Credit standards: It is the criteria to decide the type of customers to whom goods could
be sold on credit. If a firm has more slow –paying customers, its investment in accounts
receivable will increase. The firm will also be exposed to higher risk of default.

2.​Credit terms:

It specifies the duration of credit and terms of payment by customers. Investment in accounts
receivable will be high if customers are allowed an extended time period for making payments.

Collection efforts:

It determines the actual collection period. The lower the collection period, the lower the investment in
accounts receivable and vice versa.

Management of Cash

Cash management refers to the management of cash balance and the bank balance and also includes the
short-term deposits. Cash is the important current asset for the operations of the business. Cash is the
basic input needed to keep the business running on a continuous basis. It is also the ultimate output
expected to be realized by selling the service or product manufactured by the firm. The term 'cash'
includes coins, currency, and cheques held by the firm and balances in the bank accounts.

Factors of Cash Management:

Cash management is concerned with the managing of

●​ Cash flows into and out of the firm

●​ Cash flows within the firm and

30
 ●​ Cash balance held by the firm at a point of time by financing deficit or investing surplus cash.
Sales generate cash which has to be disbursed out. The surplus cash has to be invested while
deficit has to borrow. Cash management seeks to accomplish this cycle at a minimum cost and it
also seeks to achieve liquidity and control.

Motives of holding cash

A distinguishing feature of cash as an asset is that it does not earn any substantial return for the business.
Even though firms hold cash for the following motives:

Transaction motive

Precautionary motive

Speculative motives

Compensatory motive

Transaction motive: This refers to the holding of cash to meet routine cash requirements to
finance the transactions that a firm carries on in the ordinary course of business.

Precautionary motive: This implies the need to hold cash to meet unpredictable contingencies such as
strikes, sharp increases in raw material prices. If a firm can borrow at short notice to pay for these
unforeseen contingencies, it will need to maintain relatively small balances and vice versa.

Management of Payables/Creditor

Creditors are a vital part of effective cash management and should be managed carefully to enhance
the cash position. Purchasing initiates cash outflows and an over-zealous purchasing function can
create liquidity problems. Consider the Following:

i. Who authorizes purchasing in our company — is it tightly managed or spread among a number of
people?​
ii. Are purchase quantities geared to demand forecasts?​
iii. Do we use order quantities which take account of stock-holding and purchasing costs?​
iv. Do we know the cost to the company of carrying stock?​
v. Do we have alternative sources of supply?

31
MANAGEMENT OF WORKING CAPITAL

Management of working capital is concerned with the problems that arise in attempting to manage the
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,
i.e., it is neither inadequate nor excessive, as both situations are detrimental to any firm. There should be no
shortage of funds, and at the same time, no working capital should be idle.

Working capital management policies of a firm have a great impact on its profitability, liquidity, and the
structural health of the organization. Therefore, working capital management is three-dimensional in nature
as:

 It is concerned with the formulation of policies with regard to profitability, liquidity, and risk.

 It is concerned with the decision about the composition and level of current assets.

 It is concerned with the decision about the composition and level of current liabilities.

WORKING CAPITAL ANALYSIS

As we know, working capital is the lifeblood and the center of a business. An adequate amount of
working capital is essential for the smooth running of the business. One of the most important
aspects is the efficient management of working capital at the right time. The liquidity position of the
firm is directly affected by the management of working capital. Therefore, a study of changes in the
uses and sources of working capital is necessary to evaluate the efficiency with which the working
capital is employed in a business. This involves the need for working capital analysis.

32
The analysis of working capital can be conducted through a number of devices, such as:
●​ Ratio analysis.

●​ Fund flow analysis.

●​ Budgeting.

METHODS OF WORKING CAPITAL ANALYSIS

There are many methods for the analysis of financial statements, but Bata India Ltd used the following
techniques:

●​ Comparative size statements

●​ Trend analysis
●​ Cash flow statement
●​ Ratio analysis

A detailed description of these methods is as follows:

COMPARATIVE SIZE STATEMENTS:-

When two or more years’ figures are compared to each other, we refer to them as comparative size
statements. In order to estimate the future progress of the business, it is necessary to look at the past
performance of the company. These statements show the absolute figures and also highlight the changes
from one year to another.

TREND ANALYSIS:-

To analyze many years' financial statements, Bata India Ltd uses this method. This indicates the
direction of movement over the long term and helps in the financial statements.

33
Procedure for calculating trends:

1.​ The previous year is taken as the base year.

2.​ Figures of the base year are taken as 100.
3.​ Trends are calculated in relation to the base year.

CASH FLOW STATEMENT:-

Cashflowstatementsarethestatementsofchangesinthefinancialpositionpreparedonthebasis of funds
defined in cash or cash equivalents. In short cash flow statement summaries the cash inflows and
outflows of the firm during a particular period of time.

Benefits for the Samsung Electronics Co. Ltd.:-

 To prepare the cash budget.

 To compare the cash budgets.

 To show the position of the cash and cash equivalents.

RATIO ANALYSIS:-

Ratio analysis is the process of determining and presenting the relationship of items and groups of items
in the financial statements.

Benefits of ratio analysis to Samsung Electronics Co. Ltd:

1.​ Helpful in the analysis of financial statements.

2.​ Helpful in comparative study.
3.​ Helpful in locating the weak spots of Bata India Ltd.
4.​ Helpful in forecasting.
5.​ Estimates the trend of the business.
6.​ Fixation of ideal standards.
7.​ Effective control.
8.​ Study of financial soundness.

34
Types of ratio:-
●​ Liquidity ratio: These ratios indicate the firm’s ability to meet its current obligations using
its current resources.
●​ Current ratio:- Currentassets/Currentliabilities

●​ Quick ratio:-​ Liquidassets/Currentliabilities

Liquid assets=Current assets–Stock-Prepaid expenses

❖​ Leverage or Capital structure ratio: This ratio discloses the firm's ability to meet
the interest costs regularly and assesses the long-term solvency of the firm.
●​ Debt equity ratio:- Longtermloans/ShareholdersfundsornetWorth
●​ Debt to total fund ratio:-Longtermsloans/shareholderfunds+longterm loan
●​ Proprietary ratio:-Shareholdersfund/shareholdersfund+longtermloan

●​ Activity ratio or Turnover ratio:- They indicate the

rapidity with which the resources available to the concern are
being used to produce sales.
●​ Stock turnover ratio:-Costofgoodsold/Averagestock
(Cost of goods sold= Net sales/ Gross profit,

Averagestock=Openingstock+closingstock/2)

●​ Debtors turnover ratio:-Netcreditsales/Averagedebtors

+AverageB/R

●​ Average collection period:-Debtors+B/R/Creditsalesper

(Credit sales per day=Net credit sales of the year/365)

●​ Creditors Turnover Ratio:-Netcreditpurchases/Average

Creditors+Average B/P

●​ Average Payment Period:-Creditors+B/P/Creditpurchaseperday.

35
●​ Fixed Assets Turnover ratio:-Costofgoodssold/NetfixedAssets
(Net Fixed Assets = Fixed Assets – depreciation)
Working Capital Turnover Ratio:-Costofgoodssold/ Working Capital

(Workingcapital=currentassets–current liability)

36
●​ ProfitabilityRatios or Incomeratios:- The main objective of every business
concern is to earn profits. A business must be able to earn adequate profit in relation
to the risk and capital invested in it.
●​ Gross profit ratio:-Gross profit/ Net Sales *100
(Net sales=Sales–Sales return)

●​ Net profit Ratio:-Net profit/Net sales*100

(OperatingNetProfit=operatingnetprofit/NetSales*100oroperatingNet profit=
gross profit – operating expenses)

●​ Operating Ratio :- Cost of goods sold+ Operating​ expenses/Net Sales*

100
(Cost of goods sold = Net Sales – Gross profit, Operating expenses = office &
administrationexpenses+Selling&distributionexpenses+discount+baddebts
+interest on short term loans)

●​ Earning per share(E.P.S.):-NetProfit–dividendonpreferenceshare/No. of

equity shares
●​ Dividend per share(D.P.S.):-DividendpaidtoequityshareHolders/No.of
equity shares *100
●​ Dividend Payout ratio(D.P.):-D.P.S./E.P.S.*100

37
OPERATING CYCLE OF WORKING CAPITAL

Sufficient working capital is necessary to sustain sales activity. Technically this is

referred to as a operating/ cash cycle. It can be said to be at the heart of the need of
working capital.
The cash/operating cycle is the length of time necessary to complete the following
events:

✔​ Raw material into goods in process.

✔​ Goods in process into finished goods.
✔​ Finished goods into debtors through credit sales, and debt or into cash.

The cycle is a continuous process

OPERATING CYCLE

38
 The Working Capital cycle or Cash Conversion cycle as it is also called is usually expressed in
terms of the number of days. This figure is the average time that it takes to turn investment in
books into cash and profit. Payback expresses the number of days required to recoup the original
investment on a single title. In the organization’s Balance Sheet there will be the costs of paper,
titles still under development, and author advances of books already and not yet published. In
addition there will be the cost of stocks of unsold books, Accounts Receivable, and Accounts
Payable.

Determinants of working capital

The requirements of working capital generally vary from industry to industry, from concern to concern,
and over time. Comparing the production cycle of BHEL with any of the FMCG companies, we will
notice that BHEL takes a considerably longer period to manufacture a turbine, while in FMCG
companies like HLL or P&G, it takes only a few minutes to manufacture their product. Working capital
in these companies can even be negative, as they take credit from suppliers and sell their products for
cash. As a result, current liabilities are higher, which can lead to a negative working capital figure.

The various factors influencing the amount of working capital required by a business enterprise can be
grouped under two heads:

1)​ Internal factor:- The factors which are within the control and competence of management
These may include the risk taking attitude of management, turn over of receivable and
inventories terms of purchase and sale s and credit rating etc.

2)​ External factor:- These may include the nature of the business, the volume of production
and sales, and the business cycle.

PERMANENT AND TEMPORARY WORKING CAPITAL

The operating cycle thus crates the need for current assets (working capital).however this need
does not come to an end after the cycle is completed. It continues to exist. Thus the distinction
between permanent and temporary working capital should be known.

A business continues to operate even after the realization of cash from customers, which creates the need for
a regular supply of working capital. However, the magnitude of working capital required is not constant but
39
fluctuates. To carry on business, a certain minimum level of working capital is necessary on a continuous
and uninterrupted basis. For all practical purposes, this requirement has to be met permanently, similar to
other fixed assets. This requirement is referred to as Permanent or Fixed Working Capital.

Any amount above or beyond the permanent level of working capital is considered Temporary,
Fluctuating, or Variable Working Capital. This portion is needed to meet fluctuations in demand due to
changes in production and sales resulting from seasonal variations.

The basic distinction between these two is:

30

25

20

15

10

IMPORTANCE OR ADVANTAGES OF WORKINGCAPITAL

Working capital is the blood and nerve center of a business. Just as the circulation of blood is
essential in the human body for maintaining life, working capital is very essential to maintain the
smooth running of a business. No business can run successfully without an adequate amount of
working capital. The main advantages of maintaining adequate amount of working capital are as
follows:

▪​ Solvency of the business.

40
▪​ Goodwill

▪​ Easy loans
▪​ Cash discounts
▪​ Regular supply of raw materials
▪​ Regular payment of salaries, wages, and other day-to-day commitments
▪​ Exploitation of favorable market conditions.

41
CHAPTER NO 4

COLLECTION OF DATA:-

The task of data collection begins after a research problem has been defined and research
design/plan chalked out. The collection of data is done to support tour findings and interest the
resultwhethertheresultyouhavefoundinaccordingtoyourhypothesisornot.Thedatacanbe collected
by various methods. These are broadly classified into two ways, as follows:

●​ PRIMARY DATA
●​ SECONDARY DATA

PRIMARY DATA:-
Primary data are those which are collected afresh and for the first time, making them original in
character. We collect primary data during the course of conducting experiments in experimental
research. It is firsthand data, and nobody else has collected it before. There are various ways of
collecting primary data, and these are as follows:

1).Observation method

3).​Questionnaires

4).​Other methods

SECONDARY DATA:

1.​From Internet

2.​Government Publications

DATA ANALYSIS & INTERPRETATION

It is also known as the “working capital ratio.” It is a measure of the short-term financial strength
of the business and indicates whether the business will be able to meet its current liabilities as
and when they mature.

Current Assets including assets which can be converted in to cash easily and itself like market
securities debtors, inventory, prepaid expenses etc.
42
 Current Liabilities included creditors, bills payable, accrual expenses, short term bank loan,
income tax liabilities and long term debt maturity in current year. In short it can be said as all
obligations within a year are included in current liabilities.

The current ratio is a measure of a firm’s short-term solvency. It indicates the availability of current assets
for every rupee of current liabilities. As a conventional rule, a current ratio should be 2:1, meaning the firm
should ideally have twice as many current assets as current liabilities to ensure short-term financial stability.

2017 –16 = Rs.24574.45 =1.96:1

Rs.12563.50

2016 –15 = Rs.28452.51 =2.14:1

Rs.13283.95

YEARS CURRENT RATIO

2020-19 1.61:1

2019-18 2.19:1

2018-17 1.77:1

43
 2017-16 1.96:1

2016-15 2.14:1

INTERPRETATION:

It is generally believed that a 2:1 ratio indicates a comfortable working capital position. The Tandon
Committee, appointed by the RBI, also recommended a current ratio of 2:1. The company has
maintained this ratio and improved it year by year. In the current year, the current ratio is 1.61. However,
in other years, the ratio was closer to 1:2. Therefore, we can say that the company currently has a
comfortable working capital position.

ACID-TESTRATIO

The measure of absolute liquidity may be obtained only cash and bank balance as well as only
ready marketable security with liquid liabilities. This is every existing standard of liquidity and it
is satisfaction if the ratio is 1.50:1.

​ −​
− ​ ​ =

44
Forth year:

2020-19 =​ Rs.58746.07 – 20109.61 =1.08:1

Rs.​ 35756.98

YEARS ACID-TESTRATIO

2020-19 1.08:1

2019 – 18 1.38:1

2018-17 1.05:1

2017-16 1.15:1

2016 -15 1.58:1

45
 INTERPRETATION:

The acid-test ratio is close to one in the current year, at 1.08, compared to 1.38 in the previous year.
Overall, the acid-test ratio over the last five years has been very satisfactory, so we can conclude that the
absolute liquidity position of Samsung Electronics Co. Ltd. is favorable.

​ DEBTORS TURNOVER RATIO

This ratio shows the proportion of sales to average receivables and reflects the efficiency of the firm’s
collection policy. A higher ratio indicates a less satisfactory position, suggesting that the firm may have
a weak collection policy and is taking longer to collect its receivables.

Forth year:

2020 -19=Rs.151224.01 =31.21:1

Rs.4844.97

2019 -18=​ Rs.137146.66 =22.60:1

Rs.​ 6068.30

2018 -17=​ Rs.111692.72​ =29.92:1

Rs.3732.42

2017 -16=​ Rs.81211.33​ =19.50:1

Rs.4163.62

2016 -15=​ Rs.66051.30​ =16.82:1

46
 Rs.3927.81

YEARS DEBTORSTURNOVERRATIO

2020 – 19 31.21:1

2019 -18 22.60:1

2018 -17 29.92:1

2017 – 16 19.50:1

2016 -15 16.82:1

DEBTORSTURNOVERRATIO

35
30
25
20​
DEBTORSTURNOVER
15​ RATIO

10

2020- 2019- 2018- 2017- 2016-

19 18 17 16 15

INTERPRETATION:

We know that a higher Debtors’ Turnover Ratio is not necessarily good for the firm, as it may indicate
inefficiencies in the collection process. In the year 2012–13, the ratio was 31.21:1, compared to 22.60:1 in
the previous year. Therefore, some improvement in the firm’s collection policy is needed.

47
 CREDITOR’S TURNOVER RATIO:

The Creditor’s Turnover Ratio shows the proportion of purchases to accounts payable and helps estimate the
number of days within which the company makes payments to its creditors for credit purchases. If this ratio
is high, the company should assess whether it is making payments within the available credit period.

If payments are being made before the due date, it means the company is not fully utilizing the credit
period, potentially affecting cash flow. On the other hand, if the company delays payments beyond the
credit period, it may miss out on discounts allowed by creditors and damage supplier relationships.

YEARS CREDITOR’STURNOVERRATI

48
2020 -19 3.33:1

2019 -18 4.62:1

2018 -17 5.47:1

2017 – 16 5.49:1

2016 -15 3.96:1

49
This ratio is also known as the “stock turnover ratio.” It represents the number of times the average stock is
turned over during the year. It is computed by dividing the cost of goods sold (or sales) by the average
inventory. This ratio is important as it indicates the efficiency of inventory management and shows how
effectively the management is able to move the stock.
=

Forth year:

YEARS INVENTORYTURNOVERRATIO

2020– 19 7.51 times

2019– 18 7.17 times

50
2018– 17 9.20 times

2017 – 16 8.00 times

2016 -15 8.91 times

51
 INTERPRETATION:

The higher the inventory turnover ratio, the more profitable the business is likely to be, as it indicates
efficient stock movement and strong sales performance. This ratio reflects the management’s ability to
effectively manage and move inventory. The inventory turnover ratio was highest in the year 2011–12 at
9.20, compared to other years. In the current year, it stands at 7.51, which is slightly lower than the previous
year. However, this is expected, as heavy industries like Samsung Electronics Co. Ltd. generally have a
lower inventory turnover ratio compared to companies in the electronics sector.

​ NET WORKING CAPITAL TURNOVERRATIO

Net working capital turnover ratio is obtained by net working capital joining to sales. The excess
of current assets over current liabilities is called working capital. It is found for measuring firm
liquidity. It also measures the firm potential reserve of funds.

Forth year:

2020 -19 =Rs.151224.01 =5.83times

Rs.19874.06

2019 -18 =​ Rs.137146.66​ =5.57times

Rs.24622.18

52
 2018 -17 =​ Rs.111692.72​ =9.85times

Rs.11334.95

2017 -16 =​ Rs.81211.33​ =10times

Rs.8119.97

2016-15 =​ Rs.66051.30​ =5.83times

Rs.11320

YEARS WORKINGCAPITALTURNOVERRATIO

2020 –19 7.60 times

2019 –18 5.57 times

2018 –17 9.85 times

2017 –16 10.00 times

2016 -15 5.83 times

INTERPETATION:

As per the balance sheet data of the creditors, the working capital turnover ratio varies across different
years. The ratio was 7.60 in 2012–13 and 5.57 in 2011–12, but the best and most favorable ratio was in
2009–10, which was 10 times. This indicates that a higher ratio generally reflects better working capital
conditions for the company, as it signifies more efficient use of working capital in generating sales.

53
 ​ DEBTOR COLLECTION PERIOD

The Debt Collection period shows the number of days taken to collect debts from credit sales. It reflects the
efficiency and collection policy of the company. The ratio is computed by dividing the Debtor’s Turnover
Ratio by 365 days. This provides an estimate of the average number of days the company takes to collect its
receivables. A lower number of days generally indicates more efficient debt collection.

Forth year:

2020 -19 = 365days = 11 days

31.21

2019 -18 = 365days = 16.15days

22.60

2018 -17 = 365days = 12.20days

29.92

2017 -16 = 365days =18.71 days

19.50

2016 -15 = 365days =21.70 days

16.82

YEARS DEBTORSCOLLECTION PERIOD

2020 -19 11.00days

54
 2019 -18 16.15days

2018 -17 12.20days

2017 -16 18.71days

2016 -15 20.71days

INTERPRETATION:

The collection period was highest in 2008–09 at 20.71 days, compared to a much lower 11 days in 2012–13.
This shows a significant improvement in the collection policy of Samsung Electronics Co. Ltd. It highlights
the company’s ability to collect debts more efficiently, which is crucial for maintaining a healthy cash flow.
Therefore, it is very important for any company to focus on effective debt collection, a practice which Bata
India Ltd. has done very well.

STATEMENT OF RATIO ANALYSIS

RATIOS 2008-09 2007-08 2006-07 2005-06 2004-05

Current ratio 1.64 2.19 1.77 1.96 2.14

Acid-test ratio 1.08 1.38 1.05 1.15 1.58

Debtor’sturnoverratio 31.21 22.60 29.92 19.50 16.82

Creditor’sturnoverratio 3.33 4.62 5.47 5.49 3.96

Inventoryturnover ratio 7.51 7.17 9.20 8.00 8.91

Net-working​ capital​ 7.60 5.57 9.85 10.00 5.83

turnover ratio

Debtcollection period 11 16.15 12.20 18.71 21.70

55
 CHAPTER NO 5

FINDING, SUGGESTIONS AND CONCLUSION

MAJOR FINDINGS

Findings of working capital management of Samsung Electronics Co. Ltd.

 The company has a comfortable working capital position.

 The absolute liquidity of Bata India Ltd. is favorable.

 The collection policy of the company is very good.

 The creditors' turnover ratio is 3.33 in 2012–13, compared to 4.62 in 2011–12, which is higher than the
other years.

 The inventory turnover ratio was highest in 2011–12 at 9.20, compared to other years. In the current
year, it is 7.51, which is slightly lower than the previous year. However, it is expected, as heavy industries
like Samsung Electronics Co. Ltd. generally have a lower ratio compared to other sectors.

 The working capital ratio is 7.60 in 2012–13 and 5.57 in 2011–12, but the best favorable ratio was in
2010–11 at 10 times. This indicates better working capital conditions for the company.

 There has been an improvement in the collection policy of Samsung Electronics Co. Ltd.

SUGGESTIONS

 For inventory, in order to improve the position, Bata India Ltd. can reduce the level of stocks by
resorting to phased production, i.e., producing according to requirement and disposing of or recycling the
unserviceable inventories. However, the low turnover of stock may also be due to problems with the
generation of sales. Inventory management is a great concern for Samsung Electronics Co. Ltd., especially
stores and spares. The purchase manager should take proper steps for the procurement of inventories.

 The company must take certain steps to decrease the working capital cycle. One way can be better
management of inventories.

56
 Bata India Ltd. is suggested to maintain a balance in capacities, synchronization of various inputs, and
availability of some materials or parts which are not easily available.

 The short-term credit period availed must be reduced, and sundry creditors should be paid faster.

 It should maintain inventory at an optimum level rather than a very optimistic level.

 The procurement for materials requisition processing should be reduced so as to minimize the lead time.

 Freedom should be there in deciding the credit policies, cash discounts, or credit ratings.

 Bata India Ltd. can also consider negotiating its creditors for relaxing the debt repayment period and
repaying only on or just before the expiry of the credit period.

CONCLUSION OF FINDING

In the present study, I have analyzed the working capital management of Bata India Ltd. The study involves
a practical and conceptual overview of decisions concerning current assets such as cash and bank balances,
inventories (including raw materials, work-in-progress, and finished goods), sundry debtors, loans and
advances, other current assets, and current liabilities like sundry creditors, securities, and other deposits, as
well as other current liabilities and provisions of Samsung Electronics Co. Ltd. The objective is to maximize
the overall net profit of the company, ensuring complete synchronization and coordination among the
working capital components to contribute to the optimum level of operations. Mismanagement of any of
these components can be detrimental to the objectives of efficient operation, profitability, and maximization
of the overall value of the company.

The working capital limits will be considered only after the project nears completion and after ensuring
control over the inventory. Inventory management is a significant concern for Bata India Ltd., and it
requires proper procurement and management.

Eligible working capital limits will be assessed using the cash budget method and projected production
method, depending on market conditions, the scale of operations, the nature of the activity or enterprise, and
the duration/length of the operating cycle.

57
 CHAPTER NO 6
ANNEXURE
BALANCE SHEET OF SAMSUNG ELECTRONICS CO. LTD.

December December 31, December December 31,

31, 31,
2024 2023 2024 2023
KRW KRW USD USD

Assets Current assets​

Cash and cash equivalents

53,705,579 69,080,893 39,399,770 50,679,489

Short-term financial instruments 58,909,334 22,690,924 43,217,376 16,646,635
Short-term financial assets at amortized cost - 608,281 - 446,250
Short-term financial assets at fair value​ 36,877 27,112 27,054 19,890
through profit or loss 4, 6, 28
Trade receivables 43,623,073 36,647,393 32,002,989 26,885,454
Non-trade receivables 9,622,974 6,633,248 7,059,657 4,866,318
Prepaid expenses 3,362,824 3,366,130 2,467,053 2,469,478
Inventories 51,754,865 51,625,874 37,968,677 37,874,046
Other current assets 6,046,740 5,038,838 4,436,043 3,696,620
Assets held-for-sale - 217,864 - 159,831
227,062,266 195,936,557 166,578,619 143,744,011
Non-current assets

Financial assets at fair value​ 10,580,932 7,481,297 7,762,439 5,488,469​

through other comprehensive income 1,175,749 1,431,394 862,559 1,050,107
Financial assets at fair value​
through profit or loss

Investments in associates and joint ventures 12,592,117 11,767,444 9,237,895 8,632,894

Property, plant and equipment 205,945,209 187,256,262 151,086,611 137,375,927
Intangible assets 23,738,566 22,741,862 17,415,212 16,684,005
Net defined benefit assets 3,089,571 4,905,219 2,266,587 3,598,593
Deferred income tax assets 14,236,468 10,211,797 10,444,233 7,491,632
Other non-current assets 16,111,070 14,174,148 11,819,488 10,398,513
287,469,682 259,969,423 210,895,024 190,720,140
Total assets 514,531,948 455,905,980 377,473,643 334,464,151

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 December December December 31, December 31,
31, 31,
2024 2023 2024 2023
KRW KRW USD USD
Liabilities and Equity

Current liabilities​
Trade payables 12,370,177 11,319,824 9,075,075 8,304,509

Short-term borrowings 13,172,504 7,114,601 9,663,682 5,219,451

Other payables 18,547,365 15,324,119 13,606,816 11,242,161
Advances received 1,841,420 1,492,602 1,350,912 1,095,011
Withholdings 991,812 892,441 727,618 654,717
Accrued expenses 29,613,258 26,013,273 21,725,035 19,083,995
Current income tax liabilities 4,340,171 3,358,715 3,184,059 2,464,038
Current portion of long-term 2,207,290 1,308,875 1,619,324 960,224
liabilities
Provisions 8,216,469 6,524,876 6,027,809 4,786,814
Other current liabilities 2,025,833 2,308,472 1,486,202 1,693,553
Liabilities held-for-sale - 61,654 - 45,231
93,326,299 75,719,452 68,466,532 55,549,704
Non-current liabilities​
Debentures

14,530 537,618 10,660 394,410

Long-term borrowings 3,935,860 3,724,850 2,887,446 2,732,644
Long-term other payables 5,510,455 5,488,283 4,042,609 4,026,343
Net defined benefit liabilities 521,410 456,557 382,520 334,942
Deferred income tax liabilities 528,231 620,549 387,524 455,250
Long-term provisions 3,120,044 2,878,450 2,288,943 2,111,704
Other non-current liabilities 5,383,049 2,802,356 3,949,141 2,055,879
19,013,579 16,508,663 13,948,843 12,111,172
Total liabilities 112,339,878 92,228,115 82,415,375 67,660,876
December December December 31, December 31,
31, 31,
2024 2023 2024 2023
Equity attributable to owners of the KRW KRW USD USD
parent company
Preference shares 119,467 119,467 87,644 87,644
Ordinary shares 778,047 778,047 570,795 570,795
Share premium 4,403,893 4,403,893 3,230,807 3,230,807
Retained earnings 370,513,188 346,652,238 271,817,840 254,312,844

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Other components of equity 15,873,008 1,280,130 11,644,840 939,136
391,687,603 353,233,775 287,351,926 259,141,226
Non-controlling interests 10,504,467 10,444,090 7,706,342 7,662,049
Total equity 402,192,070 363,677,865 295,058,268 266,803,275
Total liabilities and equity 514,531,948 455,905,980 377,473,643 334,464,151

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BIBLIOGRAPHY

WEBSITES

http://samsung.com/

https://www.samsung.com/global/ir/financial-information/audited-financial-statements/

http://wikipedia.com/

BOOKS

COMPNAY FINANCIAL BOOKS AND ACCOUNTS

Financial Management​ Khan& in

Financial Management​ I.M.Pandey

Research Methodology​ C.R.Kothari

THANK YOU SO MUCH FOR YOUR VALUABLE SUPPORT!!!

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