WORKING CAPITAL ASSIGNMENT

Submitted To: Prof. Ritu Tuli.

GROUP MEMBERS

GAGANDEEP SINGH ISHA BORICHA ASHISH DUBE PRIYANKA DUBEY VARUN PAREKH HARLEEN SANDHU RACHNA SHETTY

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Shop Name: Angel Stationery Shops Owner Name: Mr. Avinash Contact No.: 8879245157 Shop Address: Angel Stationery House, Near Model College, MIDC, Dombivli East. Mr. Avinash was considerate enough to share the details about the store and management of its working capital. After brief discussion and study about the store with Mr. Avinash, we came to a conclusion that shop owner has adopted moderate approach to working capital policy. The long term or permanent assets are finance by long term funds and short term or temporary assets are finance by short term fund. Shop is located near college and enjoys monopoly since it is the only stationery shop in the locality. 50% Goods are purchased on credit from suppliers and credit period enjoyed is 15 days. However shop does business with customers on allcash basis and no credit is allowed to customers as it enjoys monopoly. The shop has high level of finished goods inventory. It means considerable amount of money is blocked in inventory. Since shop does business with its customer on all cash basis there is optimum level of cash in the shop and there is continuous cash inflow so there is no cash flow problem in the shop. Trade discount is offered to customers who buy goods in bulk quantity. 50% of sales proceeds are used to purchase inventory and rest is deposited in the bank. We also came to a conclusion that the shop owner is a moderate risk taker.

Moderate Working Capital Approach