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FYP-Study of Working Capital Management in BHEL
FYP-Study of Working Capital Management in BHEL
com
A report submitted to GGDSD College, Chandigarh as a part fulfillment of Full time masters of commerce (2011-2013)
Submitted to: Mr.Amit mahindroo Department of Commerce & Mgt. GGDSD College Chandigarh.
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DECLARATION
I, Karishma marwah do hereby declare that this project work entitled, working capital management record of project work carried by me under the supervision of Mr.Amit mahindroo (Lecturer, GGDSD College, Chandigarh) at "BHEL HARDWAR in the partial fulfillment of the requirement of m.com program of the GGDSD COLLEGE, CHANDIGARH (Punjab).
ACKNOWLEDGEMENT
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I express my sincere thanks to the management of HEEP (heavy electric equipment plant) of BHEL ranipur, Hardwar unit for giving me an opportunity to gain exposure on matter related to project under the esteem guidance of Mr. B.c Sharma (head of finance). I hereby take this opportunity to put on records my sincere thanks to Mr. B.c Sharma under the light of able guidance I could complete this project in an effective and successful manner. I am also indebted to Mr. Bhalla (accounts officer) and Mr. Rakesh Sharma (finance manager) for their valuable information and inputs, which added dimensions meaning to my project. I would like to thank the entire staff of M.COM G.G.D.S.D College Chandigarh, and all my friends for their support and cooperation extended to me during the execution of project. This project would not have been possible without these people. KARISHMA MARWAH
EXECUTIVE SUMMARY
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REPORTING OFFICER- Mr. B.C Sharma Bhel ranipur FACULTY GUIDE-Mr. Amit mahindroo STUDENT NAME-karishma Marwah OBJECTIVE1 To study the working capital of the company 2 management of debtors in the company 3 cash management of the company
CONTENTS
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TITLES INTRODUCTION TO TOPIC COMPANY PROFILE NEED AND OBJECTIVE OF STUDY RESEARCH METHODOLOGY RESEARCH DESIGN DATA COLLECTION DATA ANALYSIS TECHNIQUES LIMITATIONS
PAGE NO.
DATA ANALYSIS AND INTREPRETATION FINDINGS AND SUGGESTIONS CONCLUSION BIBLIOGRAPHY ANNEXURE
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Working Capital is commonly defined as the difference between current assets and current liabilities. Efficient working capital management requires that firms should operate with some amount of working capital, the exact amount varying from firm to firm and depending, among other things on the nature of industry. Capital required for a business can be classified in two main categories viz. 1) Fixed capital, and 2) Working capital. Every business needs funds for two purposes-for establishment and to carry out its day-to-day operations. Long-term funds are required to create production facilities. Through purchase of fixed assets such as plants and machinery, land, building, furniture, etc. Investments in these assets represent that part of firms capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purpose for the purchase of raw material, payment of wages and other day-to-day expenses, etc. These funds are known working Capital. In simple words, working capital refers to that part of the firms capital, which is required for financing short-term or current assets such as cash, marketable securities, debtors and inventories. Funds thus invested in current assets keep revolving fast and are being constantly converted into cash and this cash flow 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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b) On the basis of Time: On the basis of time, working capital can be classified as, Permanent or Fixed Working Capital Temporary or Variable Working Capital
Gross Working Capital:Gross Working Capital is the Capital invested in the total current assets of the enterprises. Current assets are those assets, which can be converted into cash within a short period, normally an accounting year.
Gross Working Capital = Total Current Assets Net Working Capital:The term Net Working Capital refers to the excess of current assets over current liabilities, or say,
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It takes into consideration of the fact every increase in the funds of the enterprise would increase its working capital. The concept is also useful in determining the rate of return on investments in working capital.
The net working capital concept, however, is also important for the following reasons: It is a qualitative concept, which indicates the firms ability to meet its operating expenses the short term liabilities. It is an indicator of financial soundness of enterprise. It suggests the need of financing a part of working capital requirement out of the permanent sources of funds.
Permanent or Fixed Working Capital:Permanent or fixed capital is the 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 current assets is called permanent or fixed working capital as this part of working capital is permanently blocked in current assets. As the business grow the requirement of working capital also increases due to increase in current assets.
Temporary or Variable Working Capital: Temporary or variable working capital is the amount of working capital, which is required to meet the seasonal demands and some special exigencies. Variable working capital can further be classified as seasonal working capital and special working capital. The capital required to meet the seasonal need of the enterprise is called the seasonal working capital. Special working capital is that part of working capital which is required to meet special exigencies such as launching of extensive marketing campaign for conducting research etc. Temporary working capital differs from permanent working capital in the sense that it is required for short periods and cannot be permanently employed gainfully in business.
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Every business needs some amount of working capital. The needs for working capital, arises due to time gap between production and realization of cash from sales. There is an operating cycle involved in sales and realization of cash. There are time gaps in purchase of raw material and production, production and sales, and realization of cash.
Working capital is needed for the following purposes: For the purchase of raw material, component and spares. To pay wages and salaries. To incur day- to- day expenses and overhead costs such as fuel, power and office expenses etc. To meet the selling costs such as packing, advertising etc. To provide credit facilities to the customers. To maintain the inventories of raw material, work in progress, store, spares, and finished stock For studying the need of working capital in a business, one has to study the business under varying circumstances such as new concern, as a growing and one, which has attained maturity. A new concern requires a lot of funds to meets its initial requirement such as promotion and formation etc. These expenses are called preliminary expenses and are capitalized. The amount needed for working capital depends upon the size of the company and the ambition of its promoters. Greater the size of the business unit generally will be the requirement of the working capital.
FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENT NATURE OF BUSINESS :The requirement of working capital is very limited in public utility undertaking such as Electricity, Water Supply and Railways because they offer cash sales only and supply services not products and no funds are tied up in inventories and receivables. On the other hand the trading and financial firm requires less investment in fixed assets but have to invest
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large amounts in current assets. The manufacturing undertaking requires sizable amount of working capital along with fixed investments.
PRODUCTION POLICY :The determination of working capital needs depends upon the production policy of the business. The demand for certain products is seasonal i.e., such products are purchased in certain months of a year. For such industries two types of production policy can be followed. Firstly they can produce the goods in the months of demand or secondly, they produce for the whole year. If the second alternative is followed, it would mean that till the time of demand finishes, product will have to be kept in stock. It would require additional working capital.
LENGTH OF PRODUCTION CYCLE :The longer the manufacturing time, the raw material and other supplies have to be carried for a longer time in the process with progressive increment of labor and service costs before the final product is obtained. So working capital is directly proportional to the length of the manufacturing process.
CREDIT POLICY:
Credit policy affects the working capital requirements in two ways: (a) (b) Terms of credit allowed by customer to the firm, Terms of credit available to the firm.
A concern that purchases its requirements on credit and sells its product/services on cash requires lesser amount of working capital and vice-versa.
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WORKING CAPITAL CYCLE:The speed with which the working cycle completes one cycle determines the requirements of working capital. Longer the cycle larger is the requirement of working capital.
DEBTORS
CASH
FINISHED GOODS
RAW MATERIALS
WORK IN PROGRESS
RATE OF GROWTH AND EXPANSION OF BUSINESS: The larger size businesses require more permanent and variable working capital in comparison to small business. If a company is growing, its working capital requirements will also go on increasing. Thus, the growing concerns require more working capital as compared to the stable industries.
SEASONAL VARIATION: -
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Generally, during the busy season, a firm requires larger working capital than in the slack season.
BUSINESS FLUCTUATION: In period of boom, when the business is prosperous, there is a need for larger amount of working capital due to rise in sales, rise in prices, optimistic expansion of business etc. On the contrary in time of depression, the business contracts, sales decline, difficulties are faced in collection from debtors and the firm may have a large amount of working capital idle.
PRICE LEVEL CHANGES: Price level changes also affect working capital needs. If the prices of different Goods increase, to maintain same level of production, more working capital is Needed.
AVAILABILITY OF RAW MATERIAL: Availability of raw material on the continues basis affects the requirement of working capital. There are certain types of raw materials, which are not available regularly. In such a situation firm requires greater working capital to meet the requirements of production. Some raw materials are available in particular season only for example wool, cotton, oil seeds, etc. They have to keep greater working capital.
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MAGNITUDE OF PROFIT:
Magnitude of profit is different for different businesses. Nature of product, Control on the market and ability of managers etc. determine the quantum of Profit. If the profit margin high, it will help to arrange funds internally which Will also increase the working capital.
OTHER FACTOR: Operating efficiency Management ability Irregularities of supply Import policy Asset structure
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1) It concerned with the formulation. It of policies with regard to profitability, liquidity and risk. 2) It is concerned with the decisions about the composition and level of current assets. 3) It is concerned with the decisions about the composition and level of current liabilities.
current
To maintain the optimum level of working capital in such a big organization is really a challenging task. The three basic components that determine the level of working capital in any organization are: Cash Debtors B/R Inventory.
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The basic objective of management of sundry debtor is: To optimize the return on investment on this asset.
It is obvious that if there are large amounts tied up in sundry debtors, working capital requirement would be high and consequently interest charges will be high. In such cases, the bad debts and cost of collection of debts would be high. On the other hand if the credit policy is very tight, investment in sundry debtors is low but the sale may be restricted, since the competitor may offer more liberal credit term. We have limited resources and therefore every resource has its own opportunity cost. Therefore, the management of sundry debtors is an important issue and requires proper policies and efficient execution of such policies. Debtors and cost of debtors have direct relation; cost will increase due to increase in debtors and vice versa. It depends on the credit sale of concern and credit period (collection period) allowed to customer. It is in interest of customer to pay as late as possible, and company who made sales, would like to collect their debtor as early as possible. There is a conflict between the two aspects. Debtor management is the process of finding the equilibrium at which company agrees to receive its payment without hampering or having any adverse effect on its sales and customer agree to pay at their economical buying concept.
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2. Credit Analysis:
This requires to the firm to determine as to how risky is to advance credit to a particular party.
3. Control of Receivables:
This requires to the firm to follow up debtors and decide about a suitable credit collection policy. It involves both lying down of credit policy and execution of such policies.
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The company require additional funds as resources are blocked in receivables which involves a cost in the form of interest (loan fund) or opportunity cost (own fund). Administrative cost which includes record keeping, investigation of credit worthiness etc. Collection cost Defaulting cost or Bad debts
B.H.E.L Hardwar is engaged in the manufacturing business of heavy electrical equipments, where cycle time of the product is 18- 24 months and most of the contracts take approximately 3-5 years to complete. Customers of B.H.E.L. Hardwar are broadly divided into following categories: State electricity board Power Project Public Sector Under takings Railways Government Departments Private Sectors Exports
In most of the contracts, payments of B.H.E.L. Hardwar are made in Following stages: -
Payment Terms
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At the time of dispatch of goods At the time of MRC (material receipt at site) Deferred payment after commissioning of project with certain test However, the above terms may vary from contract to contract. Based on the above payment terms, B.H.E.L. Hardwar categories their debtors into two parts: Collectible debtors Deferred debtors
Collectible debtors-- are those, which are due for payment as on now and there is no
credit time allowed to the customer say payment at the time of dispatch.
Deferred debtors-- are those, which will become due on the occurrence of a particular
event such as issuing of MRC (material Receipt Certificate) from customer or completion of contract with certain tests etc. The position of collectible and deferred debtors in last few years along with its comparison in nos of days to turnover in BHEL Hardwar, are as follows.
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2. Precautionary motive: A firm holds cash balance to meet sudden cash needs arising
out of unexpected contingencies such as floods, strikes, obsolesces; sharp increase in prices of raw materials, presentation of bills for payment earlier than expected date. more amount of cash will be kept by the firm if there is more possibility of such contingencies.
3. Speculative motive: BHEL also keeps cash balance to take advantage of unexpected
business opportunities. Such motive is there of speculative nature.
cash budget. Cash budget is the most important device for planning and
controlling the use of cash. It involves the future receipts and payments of the firm. On the basis of this information the finance manager can determine the future cash needs of the firm.
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iii) Availability of alternative source of funds : a firm may need not keep large
cash balance. If it has arrangements with banks for borrowing money in times of emergencies.
2.
3.
4.
Lock box system: This system is more popular in the U.S.A. and is further step in
speeding up collection of cash. This system has been devised to element delay arising in cash of the concentration banking system on account of a time gap between actual receipt of cheques by the regional collection centers and its deposits in the local bank account. Under this system BHEL hires a post office box and instruct its customers for there remits to the box. It also reduces the chances of frauds in the cash collection process and controls the cash inflows better. In order to avoid the unnecessary pockets of idle funds, the company should maintain minimum number of bank accounts. Controlling outflows of cash: - an efficient control over cash outflows is equally important for conserving cash and reducing financial requirements. Control over cash outflows signifies slow disbursement. in order to control the outflows of cash efficiently, a firm should keep in view the following considerations:
i)
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control account, i.e., from the central office of the company. However, the local office of the company may pay local expenses.
ii)
Payment should be made on the due dates , neither before nor after. The
company should neither lose cash discount nor its prestige on account of delayed payments. The company should, there fore, made payments within the terms offered by the suppliers.
iii) Playing float, technique should be used by the company for maximizing the availability of funds. The term float means the account tied up in checks which have been issued by BHEL but not have been yet been presented for payment by the creditors. As a result of a time lag between issue of a cheque and its actual presentation, the actual bank balance of a firm may be more than the balance shown in the books. The difference is called payment of float. The longer the float period the greater would be the benefit of the firm.
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INTRODUCTION TO THECOMPANY
COMPANY PROFILE
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BUSINESS POLICY:
In-line with Companys Vision, Mission and values, we dedicate ourselves to sustained growth with increasing positive Economic Value Addition and Customer focused business leadership in the Power and Industry Sector.
VISION
A World-Class Engineering Enterprise Committed to Enhancing Stakeholder Value.
MISSION
To be an Indian Multinational Engineering Enterprise providing Total Business Solutions through Quality Products, Systems and Services in the fields of Energy, Industry, Transportation, Infrastructure and other potential areas.
VALUES
Zeal to Excel and Zest for Change Integrity and Fairness in all Matters Respect for Dignity and Potential of Individuals Strict Adherence to Commitments Ensure Speed of Response Foster Learning, Creativity and Team-work Loyalty and Pride in the Company.
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potential coupled with its strong performance over the year has resulted in it being chosen as one the NAVARATNA PSUs which enjoy the support from the government their endeavors to become global player with its prudent financial management. BHEL occupies an all important niche as evident by its ranking by C 11 amongst top eight PSUs based on financial performance recently in survey conducted by business India, BHEL has been rated as 7 th best employer in India.
BHEL offers a wide spectrum of equipment, systems and services in the field of power, transmission, industry, transportation, oil & gas, non conventional energy sources and telecommunication.
PRODUCTS OF BHEL
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Thermal power plants Nuclear power plants Gas Based power plants Hydro power plants Dg power plants Industrial sets Boilers Boiler Auxiliaries Piping System Heat exchangers and pressure Vessels Pumps Power station Control equipment Switchgear Bus Ducts Transformers
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16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31.
Insulators Industrial and special ceramics Capacitors Energy Meters Electrical Machines Compressors Control Gear Silicon Rectifiers Thyristor GTO/ IGBT equipments Power Devices Transportation equipments Oil Field equipments Castings and Forgings Steams Steel Tubes Distributed power Generation and Small Hydro plants Systems and Services
A view of Main Gate of HEEP, Hardwar At Hardwar, against the picturesque background of Shivalik hills, 02 major manufacturing units of BHEL are located viz.Heavy Electrical Equipment Plant (HEEP) and Central Foundry Forge Plant (CFFP) which were started in the early 60s. HEEP has come into existence out of Indo-Soviet Collaboration.
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HEEP Hardwar has 08 large manufacturing blocks and the following are their main manufacturing activities:-
Manufacturing of Motors and assembling & testing of motors/generators Fabrication & Welding Technology Shop Turbine manufacturing Shop & Turbine Blade Shop Coil & Insulation Shop Heavy Fabrication & Forging Shop Heavy Fabrication, and Stamping & Die Shop Packing & Dispatch Heavy Fabrication
Block-VIII -
STEAM TURBINES
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STEAM TURBINES
BHEL has the capability to design, manufacture and commission steam turbines of up to 1000 MW rating for steam parameters ranging from 30 bars to 300 bars pressure and initial & reheat temperatures up to 600 oC
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Role of finance functionFinance function is the backbone of any organization. The finance function plays a very critical role in the maximization of shareholders who provide the funds to the company. This objective is being achieved by the finance department, which provides the carious information on the financial parameters such as cash flows, profitability, cost and margin, assets, working capital and shareholder value for the purpose of efficient utilization of resources resulting in better profitability of the company. The importance of the finance functions cannot be undetermined in any organization as many companies have perished not due to bad production management but due to poor financial management. Finance function acts like radar of the ship, which guides the direction of the ship and saves it from the perils of the sea. In the same way finance department provides timely and relevant information to various levels of management for the purpose of decision making. The various activities undertaken by the finance department achieve the aforesaid objectives, may be summarized as follows Maintenance of account books, cost records. Preparation of salary bills and other related payment to employees: PP, bonus, TA, departmental advances of PF accounts etc. Preparation of Profit & Loss a/c and Balance Sheet. Generation of various MIRs for management use: MIRs relating to turnover, profitability, cash requirements, inventory. Coordination with company auditors, Govt. auditors, cost auditors and tax auditors. Decisions relating to purchase and sales. Investment decisions: capital investment decisions and working capital management decisions. Financing decisions: decisions relating to financing-mix or capital structure or leverage. Dividend policy decisions.
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RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It may be understood as the science of studying how research is done. Research in the common parlance refers to a search for knowledge. Research as the systematic & objective analysis & recording of controlled observation that may lead to the generalization principle or the theories, resulting in the prediction & possibly ultimate control of events.
Research Objective:
To know the current financial position of the company with help of ratio analysis.
Data Collection:
The secondary data used in this case study was collected through external resources through like Business Magazines, Generals, Internet, Websites and Research Papers etc. The main sources were there in company. A simple course of action has been followed for working on this project. Entire information and data were gathered from the respective annual report of BHEL Hardwar. All the information is taken from their balance sheet and the internal documents, which were personally shown by the members in our interest.
Methodology used for Analysis of Data:For analysis of data collected, ratio analysis method has been used as at help in looking at different financial aspects.
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TOOLS OF ANALYSIS
Liquidity Analysis
Current Ratio
Liquid Ratio
This diagram shows liquidity analysis and it includes the various ratios like Current Ratio, Liquid Ratio, Working Capital Ratio/. Liquidity analysis is very important for the company because it helps to know the financial position of the company. Working Capital Ratio:This ratio shows the number of times the working capital is turned over during the period. A high working capital turnover ratio reveals that the working capital funds are properly employed to generate more sales (for the business).
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Formula used for the calculation of debtor collection period: Collectible Debtor to Turnover:
Collectible debtors / turnover * 365
Collectible Debtors to turnover are the relationship between collectible debtors and turnover, in no of days.
Total debtors to turnover are the relationship between Total debtors and turnover, in no of days
Limitation:
1. The financial data of the competitors was not available. 2. In the study many factors that need detailed analysis could not be discussed in detail because of the limitations regarding length of the project and available time 3. Further, the study takes into consideration the quantitative aspect of the performance and not the qualitative aspect such as impact of industrial assistance of company in the economic development of the state, on additional employment opportunities, contribution to net domestic product an development of industrial estate, etc.,
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DATA ANALYSIS AND INTERPRETATION TABLE OF WORKING CAPITAL (Rupees in lakhs) 2006-2007 Current Assets Debtors Inventory Cash Loan and Advaces Total Current Liabilities Sundry Creditors Adv.from Customers Other liabilities Total Net Working Capital 40942 58331 9 4821 104103 16205 55048 9250 80503 23600 140697 61(D) 20072008 57300 68747 9 4681 130737 16674 61889 12370 90933 39804 164059 88(D) 20082009 83714 66641 111 8720 159186 21570 94345 14307 130222 28964 200864 53(D) 20092010 115963 64160 5 10947 191075 33545 128554 23956 186055 5020 235096 8(D) 20102011 157384 114705 4 21824 293917 46328 156797 54691 257816 36101 264795 50(D) 20112012 179638 162527 4 31589 373758 54254 172383 87404 314041 59717 310996 71(D)
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INTERPRETATION:
If we see from the above table, it can be clearly seen that net working capital has been increase from 36101 lakhs in 2010-11 to 59717 lakhs in 2011-12. Moreover, if we compare from No. of days of net working capital to turnover has also come up from 61 to 71 days in the year 2010 and 2011 This improvement does not come accidentally but considerable measures have been taken to control working capital in organization in financial year 2011-2012 There is direct relation of working capital requirement with Debtors and cash above data indicate that company has taken certain strategy to manage its Debtor and cash.
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Particulars Collectible Debtors Collectible Debtors to Turnover Deferred Debtors Deferred debtors to Turnover Provisions Total Debtors Total Debtors to Turnover Turnover
2007-08 40320
2010-11 89456
2011-12 94573
90(D)
104(D)
127(D)
123(D)
110(D)
24389
33664
41130
53721
61598
127(D) 164059
152(D) 200864
180(D) 235096
189(D) 264795
191(D) 310996
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ANALYSIS OF DEBTORS
300 200 100 0 2007- 2008- 2009- 2010- 201108 09 10 11 12 54 90 61 104 152 64 127 180 74 123 189 72 110 191 Deferred debtors Collectible debtors total debtors
INTERPRETATION
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If we analyze the position of debtors, period of collectible debtors to turnover and total debtors to turnover has come up from 90 days to 110 and 127 to 191respectively in few years. Even the deferred debtors ha come up 54 to 72 days. Although the balance of debtor is managed considerably but still there is scopes in Debtors Management for the company.
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ANALYSIS OF CASH MANAGEMENT WITH THE HELP OF CERTAIN RATIOS: RATIOS 2007-08 2008-09 2009-10 2010-11 CURRENT 130737/9093 159186/13022 191075/18605 293917/25781 RATIO QUICK RATIO 3 = 1.4 :1 2 = 1.2 :1 5 = 1.0:1 6 =1.14 :1 2011-12 373758/3140 41 =1.19:1 179642/3140 41 = .57:1
GRAPHICAL PRESENTATION
\
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Ratios
INTERPRETATION:
The satisfactory ratio of liquidity is considered to be 1:1. In case of BHEL we see that liquidity ratio has maintained in every years which show the good utilization of liquid fund available to organization. In case of current ratio the satisfactory ratio is considered to be 1.5:1. If we analyze the current ratio of BHEL we can see that it has maintained every year which make the interest of shareholders in the organization.
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FINDINGS
1. It can be clearly seen that net working capital has been increase from 36101 lakhs in 2010-2011 to 59717 lakhs in 2011-12. Working capital of the company should be maintained like this in order to have its maximum utilization 2. The balance of debtor comes up considerably so is scope of Debtors Management for the company. 3. In case of BHEL we see that liquidity ratio has maintained in every years which show the good utilization of liquid fund available to organization. 4. If we analyze the current ratio of BHEL we can see that it has maintained every year which make the interest of shareholders in the organization.
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SUGGESTIONS
Special task forces were builds up from debtors and at senior level. Regular follow up at senior level. There should a close contact with the customers. There should be proper age- wise analysis of the debtors. There should be proper classification between collectible Debtors and bad debts. Bad debts should be written of as early as possible after making all efforts for its collection.
Formulation of action plan to eliminate/minimize wastage there should a close contact with the customers. There should be proper age- wise analysis of the debtors. There should be proper classification between collectible Debtors and bad debts. Bad debts should be written of as early as possible after making all efforts for its collection.
There must be a provision of discount for early payment of debts by the customers. Regular checking of the records of the debtors is essential so as to analysis the current position of that organization. While making a policy regarding the debtors the point should be considered that customer having excellent past record, follow the lenient policy is adopted for doubtful customers. Manage the working capital according to need as recovering the debt from customer as early as possible while, get extension of payment of dues on the company of others as suppliers of raw material as late as possible.
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CONCLUSION 1. The working capital of BHEL (Hardwar) decreased till 2009-2010 then considerable
measures have been taken to improve working capital in organization in 2011-12 Working capital increased in 2010-2011 and 2011-12 On the other hand the turnover of the company has increased which is good news for the company. The above things show the maximum unitization of working capital by the organization because the turnover of the working capital has increased. 2.The debtors of the company has increased in alternate years which show the companys increasing debtors if we analyses the turnover of debtors in days it has also increased. This show the good performance of the company. Rather than this the companies still have to take some effective measures to control its debtors. 3. The satisfactory current ratio of any organization considers being 1.5:1 and the company has maintained it in every year. In reference of liquidity ratio the satisfactory or level is 1:1 and we have seen that the company has also maintained it in every year. By which the company has maintained the interest of shareholder in it this show the good management of case by the company.
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BIBLIOGRAPHY
1. PRASANNA CHANDRA
2. M.Y. Khan & P.K. Jain 3. D.C. Sharma & K.G. Gupta 4. www.bhel.com
ANNEXURE