Project report

On
ANALYSIS OF WORKING CAPITAL MANAGEMENT
OF
JKM INFRA PROJECTS LIMITED
Submitted for the partial fulfllment of the
award
Of
Master of Business Administration
DEGREE
SUBMITTED BY:
ADITYA JAIN
ROLL No. 1221000593
.
UNDER TE GUIDAN!E "#
Internal Guide: r. .! ."ri#a$t#a
Department of Mana$ement
IT
G%A&IA'AD

C andidates DeclarationCerti!icate
I hereby declare that the Work which is being presented in this report entitled " Anal#sis o!
M$t$al F$nds and Ran%in& T'e( ) is an authentic record of my work carried out under the
supervision of Mr M*C* Sri+asta+a
The matter embodied in this report has not been submitted by me for the award of any other
degree
Dated ADITYA JAIN
De,art(ent- M.A

This is certifying that the above statements made by the candidate are correct to the best of my
knowledge.
Mr* M*C* Sri+asta+a
Desi&nation- AGM /Finance0
De,art(ent- Acco$nts 1 Finance
Date-22222222

PREFACE
During Master in Business dministration program! "tudents comes direct contact with the real
corporate world through the industrial Work. #$DM program provides its students with an in%
depth study of various managerial activities that are performed in any organi&ation.
detailed research'analysis of managerial activities conducted in various departments like
finance! marketing! human resources! production department etc. gives the student the
conceptual idea of what they are e(pected to manage and how to manage and how to obtain the
ma(imum output through minimum inputs of resources available and how to minimi&e the
wastage of resources.
s MB student! I am working with JKM In!ra Pro3ects Li(ited as a Acco$ntant*


ACKNOWLEDGEMENT
I feel immense pleasure and privilege to e(press my sincere thanks to my #ro)ect $uide Mr*
M*C*Sri+asta+a /AGM Finance0 for his incessant invaluable and indispensible guidance
throughout. t the same time! I cannot forget the courtesy and timely help provided by my
Colleagues.
I also e(press my sincere depth of gratitude to the *inance and ccount + dministrative
Department staff members in providing me with all the necessary information in carrying out my
pro)ect study.
ADITYA JAIN
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E4EC5TI6E S5MMARY
well designed and implemented working capital management is e(pected to contribute
positively to the creation of a companyAs value. The purpose of this pro)ect is to analysis and
interpretation. My pro)ect is related to Bnalysis of Working Capital Management CWCMD and
its impact on the performance of JKM INFRA PROJECTS LIMITED /JIPL0 during the last
few years.
My aims at learning various facets of working capital management at JIPL by studying the day
to day activities at its ,#C division which mainly deals in Infrastructure Developments
CConstruction of roads ' highways for 3ational 9ighways uthority of India C39ID and "tate
#WDs and e(ecution of irrigation pro)ects for irrigation departmentsD.
These pro)ects also draws a comparison between JIPL and other prominent players active in the
infrastructure segment and tries to find out the reasons playing an active role behind the
numerouno status of JIPL in the infrastructure segment. Working capital management involves
not only managing the different components of the current assets! but also managing the current
liabilities! or to be more precise! financing the current assets.
company is reEuired to maintain a balance between liEuidity and profitability while conducting
its day to day operations. 7iEuidity is a precondition to ensure that firms are able to meet its
short%term obligations and its continued flow can be guaranteed from a profitable venture. The
importance of cash as an indicator of continuing financial health should not be surprising in view
of its crucial role within the business. This reEuires that business must be run both efficiently and
profitably. In the process! an asset%liability mismatch may occur which may increase companyAs
profitability in the short run but at a risk of its insolvency. 4n the other hand! too much focus on
liEuidity will be at the e(pense of profitability.
During my study! I understand that there are three main areas in working capital management
and the pro)ect focuses on the followingF
0eceivables management
Cash management
Inventory management
By using the financial statements of 6I#7! an analysis has been carried out to understand the
trends that have been followed. lso a comparative study is carried out with respect to the v
companyAs competitors to further understand its position in the market .Based on the above
study! certain recommendations are made. The financial statements Cmainly balance sheet along
with profit + loss accountsD are used to work out various ratios which help us in better
understanding the organi&ationAs working capital management.
The key variables used in the analysis are inventories days! accounts receivables days! accounts
payable days and cash conversion cycle. These ratios are then compared with industryAs standard
to get an insight to understand the nuances of the working of the organi&ation.
INTROD5CTION
Wor%in& Ca,ital-
Working capital in simple terms means the amount of funds that a company reEuires for
financing its day %to% day operations. Working Capital includes the current assets and current
liabilities areas of the balance sheet.
Working Capital Management is concerned with the problems that arise in attempting to manage
the current assets! the current liabilities and the interrelationship that e(ists between them.
Working Capital Management is the process of planning and controlling the level and mi( of
current assets of the firm as well as financing these assets. nalysis of working capital is of
ma)or importance to internal and e(ternal analysis because it is closely related to the current day
%to% day operations.
Concept of Working CapitalF%
There are two concepts of working capitalsF %
2. $ross Working capitalF % It means the current assets which represent the proportion of
investment that circulates from one form to another in the ordinary conduct of business.
5. 3et Working CapitalF % It is the difference between current assets and current liabilities
or alternatively the portion of current assets financed with long%term funds.
Constituents of Current ssetsF%
2. Cash in hand and cash at bank.
5. Bill receivables.
8. "undry debtors.
@. "hort term loans and advances.
=. Inventories.
>. #repaid ,(penses.
?. ccrued Income.
:. Marketable "ecurities.
Constituents of Current 7iabilitiesF%
2. ccrued and outstanding e(penses.
5. "hort term loans! advances and deposits.
8. Dividends payable.
@. Bank overdraft.
=. #rovision for ta(ation.
>. "undry Creditors.
?. Bills payable.
The gross concept is sometimes preferred to the concept of working capital for the following
reasonsF
2. It enables the enterprise to correct amount of working capital at correct time.
5. ,very management is more interested in total current assets with which it has to operate then
the source from where it is made available.
8. It take into consideration of the fact every increase in the funds of the enterprise would
increase its working capital. The net working capital concept! 9owever! is also important for
following reasonsF
ItAs a Eualitative concept! which indicates the firmAs ability to meet its operating e(penses and
short term liabilities.
It indicates the margin of protection available to the short term creditors.
It is an indicator of the financial soundness of enterprise.
It suggests the need of financing a part of working capital reEuirement out of the permanent
sources of funds.
C7""I*ICTI43 4* W40;I3$ C#IT7
Working capital may be classified in two waysF
4n the basis of concept.
4n the basis of time.
4n the basis of concept working capital can be classified as gross working capital and net
working capital. 4n the basis of time! working capital may be classified asF
#ermanent or *i(ed working capital.
Temporary or variable working capital.
#,0M3,3T 40 *I-,D W40;I3$ C#IT7
#ermanent or fi(ed working capital is minimum amount which is reEuired to ensure effective
utili&ation of fi(ed facilities and for maintaining the circulation of current assets. ,very 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 fi(ed working capital as this part of
working is permanently blocked in current assets. s the business grow the reEuirements
of working capital also increases due to increase in current assets.
T,M#4001 40 /0IB7, W40;I3$ C#IT7
Temporary or variable working capital is the amount of working capital which is necessary to
meet the seasonal demands and some special necessities. /ariable working capital can further be
categori&ed as seasonal working capital and special working capital. The capital necessary to
meet the seasonal need of the enterprise is called seasonal working capital. "pecial working
capital is that part of working capital which is reEuired to meet special demands.
Temporary working capital differs from permanent working capital in the sense that is reEuired
for short periods and cannot be permanently employed profitably in the business.
IM#40T3C, 4* D,G.T, W40;I3$ C#IT7
"47/,3C,1 4* T9, B."I3,""F % deEuate working capital helps in maintaining the
solvency of the business by providing uninterrupted of production.
$44DWI77F % "ufficient amount of working capital enables a firm to make prompt
payments and makes and maintain the goodwill.
,"1 743"F % deEuate working capital leads to high solvency and credit standing can
arrange loans from banks and other on easy and favorable terms.
C"9 DI"C4.3TF deEuate working capital also enables a concern to avail cash discounts
on the purchases and hence reduces cost.
0,$.70 ".##71 4* 0W MT,0I7F % "ufficient working capital ensures regular
supply of raw material and continuous production.
0,$.70 #1M,3T 4* "70I,"! W$," 3D 4T9,0 D1 T4 D1
C4MMITM,3T"F % It leads to the satisfaction of the employees and raises the morale of its
employees! increases their efficiency! reduces wastage and costs and enhances production
and profits.
,-#74ITTI43 4* */40B7, M0;,T C43DITI43"F % If a firm is having
adeEuate working capital then it can e(ploit the favorable market conditions such as
purchasing its reEuirements in bulk when the prices are lower and holdings its inventories for
higher prices.
BI7IT1 T4 *C, C0I","F % concern can face the situation during the depression.
G.IC; 3D 0,$.70 0,T.03 43 I3/,"TM,3T"F % "ufficient working capital
enables a concern to pay Euick and regular of dividends to its investors and gains confidence
of the investors and can raise more funds in future.
9I$9 M407,F % deEuate working capital brings an environment of securities!
confidence! high morale which results in overall efficiency in a business.
DI"D/3T$," 4* ,-C,""I/, W40;I3$ C#IT7
2. ,(cessive working capital means ideal funds which earn no profit for the firm and business
cannot earn the reEuired rate of return on its investments.
5. 0edundant working capital leads to unnecessary purchasing and accumulation of inventories.
8. ,(cessive working capital implies e(cessive debtors and defective credit policy which causes
higher incidence of bad debts.
@. It may reduce the overall efficiency of the business.
=. If a firm is having e(cessive working capital then the relations with banks and other financial
institution may not be maintained.
>. Due to lower rate of return n investments! the values of shares may also fall.
?. The redundant working capital gives rise to speculative transactions.
W40;I3$ C#IT7 I" 3,,D,D *40 T9, *4774WI3$ #.0#4","F %
*or the purpose of raw material! components and spares.
To pay wages and salaries.
To incur day%to%day e(penses and overload costs such as office e(penses.
To meet the construction costs as payment to sub contractors! power + fuel! site e(penses!
freight + cartage etc.
To provide credit facilities to the customer.
To maintain the inventories of the raw material! work%in%progress! stores and spares and
finished stock.
*CT40" D,T,0MI3I3$ T9, W40;I3$ C#IT7 0,G.I0M,3T"
2. 3T.0, 4* B."I3,""F % The reEuirements of working is very limited in public utility
undertakings such as electricity! water supply and railways because they offer cash sale
only and supply services not products! and no funds are tied up in inventories and
receivables. 4n the other hand the trading and financial firms reEuires less investment in
fi(ed assets but have to invest large amt. of working capital along with fi(ed investments.
5. "IH, 4* T9, B."I3,""F % $reater the si&e of the business! greater is the reEuirement
of working capital.
8. #04D.CTI43 #47IC1F % If the policy is to keep production steady by accumulating
inventories it will reEuire higher working capital.
@. 7,3$T9 4* #04D.CTI43 C1C7,F % The longer the manufacturing time the raw
material and other supplies have to be carried for a longer in the process with progressive
increment of labor and service costs before the final product is obtained. "o working
capital is directly proportional to the length of the manufacturing process.
=. ","437" /0ITI43"F % $enerally! during the busy season! a firm reEuires larger
working capital than in slack season.
>. W40;I3$ C#IT7 C1C7,F % The speed with which the working cycle completes
one cycle determines the reEuirements of working capital. 7onger the cycle larger is the
reEuirement of working capital.
*ig. % 2
?. 0T, 4* "T4C; T.034/,0F % There is an inverse co%relationship between the Euestion of
working capital and the velocity or speed with which the sales are affected. firm having a
high rate of stock turnover will needs lower amt. of working capital as compared to a firm
having a low rate of turnover.
:. C0,DIT #47IC1F % concern that purchases its reEuirements on credit and sales its product '
services on cash reEuires lesser amt. of working capital and vice%versa.
I. B."I3,"" C1C7,F % In period of boom! when the business is prosperous! there is need for
larger amt. of working capital due to rise in sales! rise in prices! optimistic e(pansion of
business! etc. 4n the contrary in time of depression! the business contracts! sales decline!
difficulties are faced in collection from debtor and the firm may have a large amt. of working
capital.
C"9
0W MT,0I7 W40; I3 #04$0,""
*I3I"9,D $44D"
D,BT40"
2<. 0T, 4* $04WT9 4* B."I3,""F % In faster growing concern! we shall reEuire large
amt. of working capital.
22. ,03I3$ C#CIT1 3D DI/ID,3D #47IC1F % "ome firms have more earning
capacity than other due to Euality of their products! monopoly conditions! etc. "uch firms
may generate cash profits from operations and contribute to their working capital. The
dividend policy also affects the reEuirement of working capital.
25. #0IC, 7,/,7 C93$,"F % Changes in the price level also affect the working capital
reEuirements. $enerally rise in prices leads to increase in working capital.
M3$,M,3T 4* W40;I3$ C#IT7
Management of working capital is concerned with the problem that arises in attempting to
manage the current assets! 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 adeEuate nor e(cessive as both the situations
are bad for any firm. There should be no shortage of funds and also no working capital should be
ideal.
W40;I3$ C#IT7 M3$,M,3T #47IC," of a firm has a great on its probability!
liEuidity and structural health of the organi&ation. "o working capital management is three
dimensional in nature asF
2. It concerned with the formulation of policies with regard to profitability! liEuidity and risk.
5. It is concerned with the decision about the composition and level of current assets.
8. It is concerned with the decision about the composition and level of current liabilities.
O.JECTI6E OF ST5DY
This pro)ect was undertaken to analy&e the working capital policies! working capital
management of the company and to reduce down their problems and to find the solutions with
respect to the working capital management of the company.
The ob)ective of the study is to provide the solutions for reducing down the duration of the
operating cycle! to analy&e the working capital position of the company and the liEuidity
position! finding out the problems that the company is facing in managing the working capital
and showing trend of particular ratios in future and at the same suggesting them to solve their
problems. There are Two types of 4b)ectives in this studyF%
2. Pri(ar# O73ecti+e F% #rimary 4b)ectives is to Bnalysis of Working Capital Management B
5. Secondar# O73ecti+e F% There are few secondary ob)ectives F %
To see whether the company is prepared with enough working capital to face any kind of
contingencies.
To identify the financial strength and weakness of the company
To see how the day%to%day operations of the company takes place.
To compare the performance of working capital for a particular year with previous years.
To assess 7iEuidity position! 7ong term solvency! operational efficiency! and overall
profitability of 6;M I3*0 #046,CT" 7IMIT,D.
#roviding suggestions to solve the problems of the company.

COMPANY PROFILE
JKM In!ra Pro3ect Li(ited is mainly an ,#C /Engineering, Procurement and Construction)
contractor and is currently engaged in construction of roads ' highways for 3ational 9ighways
uthority of India C39ID and "tate #WDs and e(ecution of irrigation pro)ects for irrigation
departments. The Company has been e(ecuting road and irrigation pro)ects in the state of Bihar!
ssam! runachal #radesh and .ttar #radesh. s per CompanyAs business model! 6I#7 provide
,#C services either on basis of contracts directly bagged by it or through 6oint /entures C6/sD
with other reputed construction companies in similar business activities.
T'e Co(,an# is 'a+in& ISO 899:- ;99< Certi!ication !or its =$alit# ,rod$cts* The Company
has been also registered as Class>I Contractors with Water 0esource Division! Bihar! 0oad
Construction Division! Bihar! 0ural Development Division Bihar! and #WD! 7ucknow C..#D.
The Company is having a large and reputed customerAs base and the infrastructure sector being
having in the priority sectors list of $ovt. of India.
The Company is currently engaged mainly in the following activitiesF%
aD Construction of highways for 3ational 9ighways uthority of India C39ID.
bD 4peration! maintenance! augmentation on DB*4T Toll basis for 39I in the state of
Bihar
cD Construction of roads for "tate #WDs.
dD Construction of Bunds! Canals! earthwork! etc. for irrigation departments.
?5ALITY O.JECTI6ES-
2. 4rgani&ation which is sensitive and interactive to the needs of customer.
5. Continuous upgrading of Euality and process to meet changing needs of customer.
8. 4ptimi&ation of return on investment byF
Continuous improvement
Technology development
4rgani&ational and personnel development
Cost reduction efforts
,ffective use of all resources
9armonious and safe working conditions
@. Work to international norms of Euality and management.
The company has successfully practiced the best work ethics and technology
along with the T#M CTotal #roductive ManagementD + ;ai&en approach and
harmony through teamwork.
JIPL@s .OARD OF DIRECTORS
Mr* Ra( Kis'or JalanA CMD
Backed by vast e(perience in financial and administrative management! Mr. 0.;. 6alan with his
vision is the driving force behind the company for overall management and growth. .nder his
stewardship! 6;M Infra has risen to become a great company and a leading infra player with a
pan India presence. visionary who believes in leading by e(ample! he is passionate about his
work J a passion that has eEuipped him with a deep insight! acumen and e(pertise that enables
his team to deliver consistently.
rmed with rich technical knowledge + e(perience! Mr. 6alan has! over the years! gathered
e(tensive work e(perience in e(ecuting ma)or pro)ects! such as /aranasi J "haktinagar "tate
9ighway! #art of 3oida to $reater 3oida ,(pressway! 6aipur Bypass #hase%I! Bridges on
Mahakali 9ighway in 3epal! Cement Concrete 0oad at ,#I# ;asna! 7oni in .#! "ohna! #alwal
9ighway in 9aryana + "tate 9ighways in Chhattisgarh and ..#. 9e also has immense
e(perience in handling pro)ects covered under C0*! World Bank! etc.
cknowledged and respected for his e(tensive understanding and e(perience! he has freEuently
been invited by various local eEuipment manufactures ' M3Cs within India to attend their
presentations and for his views on the performance of various new types of eEuipments being
manufactured ' introduced in India in the construction Industry.
Mr. 6alan is a graduate with about 8< years of e(perience in the field of construction.

Mr* Ga$ra+ JalanA Joint Mana&in& Director
rmed with strong prowess and insight in the construction of 9ighways! Mr. $aurav 6alan has
been instrumental in steering the growth of the company. In his capacity as Director! he looks
after the management of all administrative as well as financial matters of the company.
dditionally! he also carries the overall responsibility for formulating the business strategy to
ensure that 6;M Infra continues its rapid strides towards becoming a fast growing dynamic
infrastructure company.
management graduate from ..;.! Mr. $aurav 6alan has about : years of e(perience.

Mr* 6ai7'a+ JalanA Joint Mana&in& Director
n intelligent! hard working + enthusiastic young professional! Mr. /aibhavAs prowess lies in
his detailed knowledge and e(pertise in the field of road construction pro)ects of ..#.! #WD!
under World Bank. keen strategist! he is the brains behind the companyAs key strategic )oint
venture relationships! which help the company deepen industry domain capabilities by
e(panding vertical wise coverage. 9is calm and composed disposition makes him an ideal
mentor for his team and he spends a significant proportion of his time grooming and moulding
them. s part of diversification plans of the Company! he has been instrumental in 4pening a
"ubsidiary company in Indonesia! with the aim of entering into the international trading of
minerals including coal and getting the company into .OT space.
management graduate from "ydney! ustralia! Mr. /aibhav 6alan has over ? years of hands
down e(perience.

Mr* Faroo= Sa$latA Director O,erations
4ne of the strongest pillars of the company! Mr. "aulat has been an integral part of the Board of
Directors since ugust 5<<I. 9owever! his association with the company dates back to ugust
5<<2! when he was appointed ,(ecutive Director. fter completing his engineering training! he
)oined the 3ational #ro)ects Construction Corporation C3#CCD! a Central $overnment #."...!
for 8? years till his retirement in 5<<2 as ,(ecutive Director.
During his stay at 3#CC! he gained e(tensive overseas e(posure. *rom 2I?< to 2I?>! he was on
deputation to $overnment of Tan&ania C,ast fricaDK he was a member of supervision Team of
Tan&ania J Hambia 9ighway! which was being constructed by the mericans. While in Tan&ania
he officially visited various countries like ..;.! $ermany! *rance! *inland! Italy and .""0 in
connection with purchase of ma)or construction eEuipments and finali&ation of assistance
packages by Donor Countries to various development pro)ects in Tan&ania. Mr. "aulat has also
worked on 3#CCAs overseas pro)ects in IraE for @ years! on an Irrigation #ro)ect of $overnment
of IraE! and 5 years in 3epal on DB%funded Canal "ystem pro)ect.
mechanical engineer with 8? years of e(perience! Mr. "aulat has been a *ellow of Institution
of ,ngineers of India and Indian Institute of #lant ,ngineers.

Ra(es' C'andra R$sta&iA Director Plannin& 1 Monitorin&
Mr. 0amesh Chandra 0ustogi! is Director of 6;M Infra #ro)ects 7td! one of the nationLs leading
Infrastructure development company. Mr. 0ustagi is associated with 6;M Infra #ro)ects 7imited
since 5<<@ and heads pro)ects in the states of .ttar #radesh! Madhya #radesh! and 6ammu +
;ashmir. Mr. 0ustagi holds prestigious educational Eualifications of Bachelor of ,ngineering
C,lect.D from Birla College of ,ngineering! #ilani! 0a)asthan .niversity in the year 2I>@ C*irst
DivisionD and work e(perience of 2> years in the Industry.
Mission 1 6ision
t 6;M Infra! we believe in continuous learning and growth. To continue to succeed as a
business over for decades to come! we must look ahead! be aware of the trends and forces that
will influence our business and foresee whatLs to come. We strive to get organi&ed for tomorrow!
today itself.
ThatLs what the vision of JKM INFRA PROJECTS LIMITED is all about. It builds an
enduring destination and endow with a 04DM# to gain mutually with our business partners.

ACBIE6EMENTS-
List o! ,ro3ects co(,leted 7# co(,an#-
Bihar "tate 9ighways #ro)ect C0ebidD B"iwan J Basantpur J Masrakh J Taraiya J
Madhaura J mnaur J "onho J #arsa Ba&ar J "heetalpurM Const. #ackage 3o. J = C"9%
?8D.
ll Works Cincluding Canal "ystem + BuildingsD .nder ,.0.M. C,(tension! 0enovation
+ ModernisationD of ,astern ;osi Canal "ystem under Chief ,ngineer! Water 0esouces
Department! #urnea.
0aising! "trengthening and Construction of Bituminous 0oad Cincluding reconstruction '
restoration of structuresD on Western ;osi ,mbankment from ;m <.<<< to ;m @>.2I<!
3irmali J $hoghardiha 7ink 0oad C:.=@: ;mD! Below $hoghardiha upto $hoghepur
C=@.<I ;msD! Balan Marginal Bundh from ;m <.<<< to @.22@! Western ;osi Main Canal
Cright bankD from ;m <.<<< to ;m @.58< and ,astern ;osi Main Canal Cright bankD from
;m <.<<< to <.?<<M % $roup %5 % in *.1. %5<<I%2<.
Improvement of 0oads under 0oad Division! Banka! Bhagalpur + Munger under
#ackage 3o. B0'"BW'MD0'<>'<>%<?
Improvement of 0oads under "hahabad 0oad Division! rrah CBiharD #ackage 3o.
B0'"BW'MD0'<8'<>%<?
0ehabilitation 0oad Works "9%2= 0anigan) J 0aibareilly 0oad Clength J =? ;msD
#ackage 3o. % .#'"0#'0MC'5@.
Widening to two lane from km <.<< to 58.8< of 6amui%7a(mipur%;haragpur 0oad
C"ikandra%6amui%;haragpur 0oadD! "9%?5 in 6amui Distt of Bihar "tate .nder 7W,
#73 % warded in *.1. %5<2<%22.
Works of /arious roads of ..#.! #WD in ;anpur Town

List o! ,ro3ects in Band-
Description of t%e &or'
I()ro#e(ent*+),radation of -"i.an/'a$ant)ur/a$ra01/Tarai2a/ad1aura/
A(nauar/"on1o/3ar$a 'a4ar "1eetal)ur Road-5"%/637
All 8or0$ 5in9ludin, !anal "2$te( : 'uildin,$7 +nder ;.R.. 5;<ten$ion=
Reno#ation : oderni$ation7 of ;a$tern >o$i !anal "2$te( under !1ief
;n,ineer= 8ater Re$ou9e$ De)art(ent= 3urnia
;art1.or0 in %ari$1 !1andra)ur Di$tr2. : !on$tru9tion of $tru9ture$ fro( R.D.
0.00 to ?9.10 under 'ate$1.ar$t1an Gan,a 3u() !anal "91e(e 31a$e/I
8idenin, to t.o lane fro( 0( 0.00 to 23.30 of Ja(ui/La<(i)ur/>1ara,)ur
Road 5"i0andra/Ja(ui/>1ara,)ur Road7= "%/62 in Ja(ui Di$tt of 'i1ar "tate
+nder L8; 3LAN
!on$tru9tion and aintenan9e of Rural Road$ in Di$tri9t Ro1ta$ 5'i1ar7 under
3G"Y= 3a90a,e No.'R2@R*Ro1ta$/1 5'RRDA= Go#ern(ent. of 'i1ar7
"tren,t1in, : .idenin, of en,li$1 (ore to )un$ia #ia Aait1or(at1 road 50( ?
to 12.67
T.o Lanin, of Road fro( 3a$i,1at B ari2an, B Yin,0oin, Road fro( >(. 0.00
to 19.@@6 in t1e "tate of Aruna91al 3rade$1.
'alan9e .or0 of 9on$tru9tion of C/lane road for 0( 1?5.C00 to 0( 190.5@6 of
Jatin,a Jun9tion to %aran,aAo $e9tion of N%/5C in t1e "tate of A$$a(
2/lanin, fro( Lon,din, / Ti$$a B >1on$a '2)a$$ 9onne9tor 5N%/52'7 5Net
Len,t1 C2.50 >($.7 in Aruna91al 3rade$1 under Aruna91al 3rade$1 3a90a,e of
"ARD3/N;
T.o lanin, of t1e u4aDar)ur/'arauni "e9tion of N%/2@ fro( >( 519.?00 to
>( ?26.000 in t1e "tate of 'i1ar under N%D3 31a$e/IE on 'OT 5Toll7 'a$i$ ;3!
!ontra9tor J> Infra 3roAe9t$ Li(ited
3roAe9t of 2 lannin, of >( 2?F210 to >( 65FC@5 of GoGu0/ari2an,/"iA1on
Nalla1 in Aruna191al 3rade$1
Rai$in, : "tren,t1enin, Of Ja(indari 'und1 Of '1uta1i Ri#er= Ri,1t 'und1
Hro( Lodi)ur To Li#erie : Left 'und1 %ida( Lodi)ur To 'aAit)ur
!on$tru9tion and u),radation of road and ot1er $tru9ture$ 5in9ludin, %i,1
Le#el 'rid,e$7 fro( Hate1)ur to Gal,alia #ia 3iltola 5L/ 69.50>(.7 in >i$1an,anA
di$tri9t +nder Indo/Ne)al 'order Road 3roAe9t.
!on$tru9tion$ and u),radation of Road and ot1er $tru9ture$ fro(
'a1ar5'a1era 7#illa,eto "ur$and Eia >an1auli 5L/?0.065>(7 '1it1a(ore to
3ar$a5L/5.@0 >(.7 in "ita(ar1i Di$tri9t and 3ar$a to A01rar,1at 5L/10.?1 >(.7
J1auri!1au05Lau0a1i7 to '1uta1a 91au0 #ia a1adeo(at1 5L/2@.?0>(.7 in
ad1uGani Di$tri9t under Indo Ne)al 'order Road 3roAe9t.
!on$tru9tion and +),radation of road and ot1er "tru9ture= fro( D1uta1a Ri#er
'rid,e to GuaGari/31ul.ari2a G1at at LalGa0i2a Ri#er 5L/66.2C2 0(.7 in ;a$t
!1a()aran 5oti1ari7 Di$tri9t +nder Indo Ne)al 'order road 3roAe9t.
8idenin, : "tren,t1enin, of %aider,ar1 a1araA,anA Rae'areli Road 5"%/13A7
fro( !1. 9.31@ to !1. C1.000 +nder "tate "e9tor in Di$tri9t RaeGareli
;<e9ution of !e(ent !on9rete 3a#e(ent fro( Tut1iGari to 'ar,ada.a 5!1.
?0.20 to ?6.@07 of !.". N.T.N. Road 5DR7 under Indo/Ne)al 'order Road$ in
t1e Di$tri9t/a1araA,anA
;<e9ution of !e(ent !on9rete 3a#e(ent +nder Indo/Ne)al 'order road in
Di$tri9t "idd1art1na,ar al,a1ia/%arGan$)ur road 5i7 Ali,ar.a1 to Gan.aria
"e9tion 5ii7 >a0ara1.a !1ain)ur "e9tion 5iii7 >1un.a/'an,an,a "e9tion 5i#7
'1u$oula "e9tion7
!on$tru9tion of road G2 u),radation .it1 Ri,id 3a#e(ent under IN' Road
3roAe9t fro( "1arda)uri 'O3 to "u(erna,ar 'O3 53art of %an$na,ar to
Gauri)1anta7 in Di$tt La01i()ur >1eri
;<e9ution of ala,a1ia= %arGan$1)ur Road= in di$tri9t "idd1artna,ar under
Indo Ne)al 'order Road 5Hro( 3a0ari1a.a to 'ar1ni Eia "e(ra1.a= a1ade#a
'u4ur,= Lo1ati= >otia= D1anaura= 'an,an,a= >1un.a7 in t1e Di$tri9t/
"idd1art1na,ar
Rai$in,= "tren,t1enin, and !on$tru9tion of 'itu(inou$ Road 5in9ludin,
re9on$tru9tion * re$toration of $tru9ture$7 on 8e$tern >o$i ;(Gan0(ent fro(
>( 0.000 to >( C?.190= Nir(ali B G1o,1ardi1a Lin0 Road 5@.5C@ >(7= 'elo.
G1o,1ardi1a u)to G1o,1e)ur 55C.09 >(
8idenin, to t.o lane and i()ro#e(ent fro( 0( 00.00 to 23.00 of "1ar#an
'a0$1ila Road= Ja(ui Di$tt of 'i1ar "tate +nder L8; 3LAN
Re(ainin, .or0 for 8idenin, and "tren,t1einin, of "a0ri/'a1era Road 50/
15.650 >(7 for t1e 2ear 2010/11
!on$tru9tion of Road.
!on$tru9tion of Road.
;<e9ution of )art of al,1aia %araGan$1)ur road in Di$tri9t "idd1art1na,ar
under Indo/Ne)al 'order road$ 5fro( Lata1a.a,1at to 3a0ari1a.a #ia
'1u$aula= %ariGan$1)ur= >ara(aini= Ra(an,ar= >a0ra1a.a= D1ana,a,a.a=
'aA1/Len,t1 2@.00 >7
!on$tru9tion of Rin, Road for RaeGareli !it2 531a$e/I7 on ;a$tern $ide of N%/
2C' in t1e "tate of +ttar 3rade$1 on ;3! 'a$i$.
!onstruction of (m ) to *) of N+,)* in t%e State of Bi%ar
I()ro#e(ent and u),radation of !11u(01u( B !1a.n,te Road to 2 Lane N%
$tandard in t1e $tate of i4ora( fro( >( 0.00 to >( C1.53 1a#in, total len,t1
C1.53 >(
E=$i,(ents Di+ision
T'e Co(,an# is contin$o$sl# consolidatin& its ,osition and eC,erience 7# ac=$isition o! latest
(ac'iner# and e=$i,(ents and e(,lo#in& t'e latest tec'nolo&# s$ited to t'e &roDin& needs o! its
eC,andin& client 7ase*

,(cavator' 7oader 9ydraulic ,(cavator
Motor $rader /ibratory 0oller
Compressor Wheeled 7oader
WMM #lant WMM #aver
Batch Type 9ot Mi( #lant Drum Type 9ot Mi( #lant
sphalt "ensor #aver Concrete Batching #lant
Concrete Mi(er $enerating "et
Weigh Bridge Do&er
Tractor with Do&er "tatic 0oller ' 0oad 0oller
7ight "ource
Crushing + "creening #lant! 2=<'5<< T#9
with Cone Crushing
Crusher C6awD 0ock Breaker
Bucket Crusher with "tandard coupling Drill Machine
9ydraulic Mobile Crane Dumpers
Tripping Trailer C8> to @: Cum. capacityD Bitumen "prayer
#neumatic Tyre 0oller Mechanical Broom
O$r Stren&t'
The Company has invested nearly 0s 5<<< million in latest Construction
eEuipments including most modern Crushing plants available in the market. The fleet of highly
automated eEuipments imbibe precision! accuracy and optimal productivity.
The prudency shown in investing in modern! sophisticated eEuipments has provided the
Company a distinct and sharp cost effective edge in a highly competitive atmosphere.
*urther! owning the eEuipments has eliminated the dependence on the availability from rental
market. The Company is continuously acEuiring the latest eEuipments and consolidating its
position to address the growing varied needs of its ever e(panding client base. Today the
Company is in a position to take up challenges in vast variety of infrastructure pro)ects.
To further augment its competitive edge vis%a%vis cost effectiveness!
control on Euality and Euantity of the raw materials! the Company has ventured into 0ock mining
and setting up its own crushing plants at strategic locations. The Company has acEuired the best
Crushing #lants available.
The Company currently operates Two Integrated Crushing #lants in the states of .ttar #radesh!
and three in the "tate of runachal #radesh + one is ssam. Total production stands at 5 million
MT per annum.
By fostering a climate that encourages innovation! growth and diligence!
the Company! along with its competent human asset base comprising highly Eualified
professionals! engineers! technocrats! pro)ect managers! is redefining the benchmarks of
e(ecuting challenging infrastructure pro)ects in the country and ensuring timely completion of
pro)ects across sectors and geographies.
The Company has carefully built its human resources base! combining very senior e(perienced
professionals with deep domain knowledge in e(ecuting large and challenging )obs and a team of
young and enthusiastic professional geared to absorb finer nuances of the business. The
CompanyAs thrust has been on fostering a climate which encourages innovation and diligence
among the employees and on creating an ethical and friendly work environment that nurtures
team spirit and commitment.
The Company is pre%Eualified to bid and undertake single pro)ects in the range of 0s 2<<<< to
25<<< million in ,ngineering! #rocurement and Construction C,#CD space by associating itself
with big players in the industry. In the #ublic #rivate #artnership C###D! the Company is
Eualified to bid for pro)ects of upto 0s 8<<<%@!<<< million Cdepending on the specific nature of
the pro)ectD.
To further enhance the CompanyAs technical and financial bidding power! gain access to larger
ticket pro)ects and venture into new geographies! 6;M Infra has )oined hands with leading
companies.
N $0 Infra #ro)ects 7imited! .daipur C0a)asthanD
N ;30 Construction 7imited! 9yderabad Cndhra #radeshD
N 3;C #ro)ects #rivate 7imited
This decision also enables the Company to access more resources! and importantly! as a measure
of prudence! spread out the risks and costs! while increasing its capacity to bid and concurrently
to share its risks and costs with a partner. ccess to greater resources! including speciali&ed staff!
technology and finance are some of the other ma)or advantages that accrue to the Company from
these 6/s.
The Company is now also looking at the "#/ model to e(ecute pro)ects in the ### space.
*or smooth information flow! better and effective planning and closely monitoring work%in%
progress across the large infrastructure and construction sites pan%India! the Company has
invested in a powerful ,0# system. With this system all the offices! its department and site
offices will be tightly integrated and seamlessly connected on a single platform facilitating free
flow of information by the end of MID 5<2@.
The ,0# will be integrated with suitable modules that will enable the management get a Euick
overview of the pro)ects and facilitate the easy generation of data and reports from the sites. The
thrust on investing robust%IT systems is aimed to imbibe transparency into various processes and
functions and will play an important role as the Company e(pands and grows rapidly in the years
to come.
The Company has invested in four fully eEuipped Euality control
laboratories for ,arthwork! sphalt Work and Concrete Works. *urther! the Company has
invested in independent laboratories for imbibing Euality standards as per M40T9 and clients
specifications.
6;M Infra operates in accordance with the global standard! best practice! 9ealth! "afety +
,nvironmental procedures.
These compliant procedures are overseen by the CompanyAs 9ealth! "afety + ,nvironmental
department which has spelled out the procedures for all activity at the site'work place. 0egular
audits are carried out to ensure its compliance. ,mployees are provided training on various
"afety and ,nvironment procedures on induction which is backed up with regular Euality +
safety campaigns and literature updates. These focused efforts aim to create awareness on the
collective responsibility to prevent in)ury! occupational illness and ensure public safety when
carrying out its business.
The CompanyAs strengths are manifest in the robust performance year%on%year. The CompanyAs
Total Turnover has increased over touch 0s ><<< millions in *1 22 from 0s @=<< millions in the
previous year.
To always stay a step ahead of the competition and en)oy a cost advantage over its peers! the
Company has )udiciously managed its working capital to maintain strong positive cash flows
over the years! even in a capital%intensive industry.
Ste,s t'at ens$re De are ,oised to catal#Ee o,,ort$nities !or !aster and lar&e>scale &roDt'
in t'e #ears to co(e*
Joint 6ent$res
AlDa#s a ste, !orDard to 7$ild a ro7$st !o$ndation o! stren&t'sA
ca,a7ilities and eCec$tion ,roDess to $nloc% (aCi($( &roDt'*
;30 Constructions 7td.! 9yderabad Cndhra #radeshD
$0 Infra #ro)ects 7td.! .daipur C0a)asthanD
#eninsula 7and 7imited! Mumbai CMaharashtraD
3;C #ro)ects #rivate 7imited.
KNR Constr$ctions Li(ited C;30C7D is a multi domain infrastructure development
organi&ation with more than 5 decades of e(perience and e(ecutes the construction of technically
comple( and high value pro)ects across segments such as
,(press ways
3ational 9ighways
"tate 9ighways + 0ural 0oads
*lyovers
Bridges and /iaducts
Irrigation #ro)ects
.rban Development % Civic amenities
Commercial and 0esidential #ro)ects
These pro)ects e(hibit ;30C7Ls trademark % which is Euality! e(cellence and turning them into
engineering and construction marvels in their respective categories.
T'e G R In!ra,ro3ects Li(ited /GRIL0 is a national company speciali&ing in the
infrastructure sector. Their operations are spread in 0a)asthan! $u)arat! Madhya #radesh!
9aryana! .tter #radesh! Bihar! 9imanchal #radesh! 6harkhand etc.
The $ 0 Infrapro)ects 7imited has been working in the field of Infrastructure development in
India for =< years! since 2I>@.

$0I7 e(tend ,#C services ranging from 9ighways! *lyovers! Bridges! Buildings! ir *ield
Developments! Irrigation! Mega 9ighways! 0oad .pgradations! $eometrical Improvements!
Implementation of CB.4.T.D #ro)ects and ssets preservation J Maintenance etc. their Euality
standards! Construction and pro)ect managements techniEues is reflection of its business
e(cellence. They have grown to become national class construction entrepreneur! as well as in
the commitments to their employers and communities J nation.
NKC Pro3ects Pri+ate Li(ited is a multi%disciplinary construction company with the ability to
deliver the finest construction solutions and e(ceed client e(pectations every time % in Euality of
material! build and processes.
3ational 9ighways! ,(pressways! Bridges! Industrial turnkey #ro)ects! Multi storey 9ousing
#ro)ects are all part of the companyAs pri&ed portfolio. It has integrated its strengths in process
technology! basic and detailed engineering! eEuipment fabrication! procurement! pro)ect
management! construction and commissioning to offer single%point responsibility against
stringent delivery schedules.
3;C #ro)ects has e(celled in the e(ecution of several national and state highway pro)ects during
the last : years J pro)ects that have been completed with precision engineering! transparent
building processes and some of the best talent in the sector.
3;C #ro)ectsA e(perience in 0oad construction has been enriched with e(perience of conversion
of a section of the Delhi%$urgaon ,(pressway C39%:D into a modern access controlled :'> lane
,(pressway! completion of World Bank funded :< ;m road works for .# "tate $ovt. with
I0C43 International 7td C $ovt. of India .ndertakingD! substantial completion of prestigious
Ta) ,(pressway C3ow 1amuna ,(presswayD for 6aypee $roup.
0ecently we have been awarded the road work of 0s. 55=.<< crore Ce(tended valueD of Widening
and .p%gradation of e(isting @%lane road to >%lane road CContract #ackage%/ID in the "tate of
0a)asthan with ,T "tar Infrastructure 7imited C,"I7D! Dubai and road work of 0s ?I.I> crore
directly with 3ational 9ighway uthority of India! in the "tate of ;arnataka as prime contractor.
3;C #ro)ects have e(ecuted also civil work of Multi%"toried Towers for 4M-, 7td and
Industrial pro)ects at #antnagar C"IDC.7D for Tata Motors 7td and 9ewlett #ackard 7td.
3;C #ro)ects have e(celled in the vital parameters of all construction pro)ects J e(cellent finish!
timely delivery and top%of%the%heap Euality.
The company has dedicated in%house teams for every single aspect of pro)ect implementation J
from planning to e(ecution to operation and maintenance % and scores a perfect 2< when it comes
to credentials! e(perience and track record.
Today! 3;C #ro)ects has more than = multi%location pro)ects in various stages of completion.
O$r F$t$re
JKM In!ra@s %e# stren&t' lies in its a7ilit# to $nderstand t'e !$t$re needs o! !ast
,ro&ressin& nation* Ali&nin& o$rsel+es to t'e !ast>,aced and &roDin& de(ands o! t'e
co$ntr#@s ,o,$laceA it is o$r constant endea+o$r to tr# to lend Din&s to t'e as,irations o!
t'e sectors acceleratin& and trans!or(in& t'e India o! to(orroD*
The Company plans to spread pan%India in the ne(t 5 to 8 years and plans to tap huge ### space
in B4T! 9ighways! diversify into other infrastructure verticals such as 0ailways! irports!
Mining! etc. The Company has a long%term vision to venture into the global arena and establish
presence across sia! frica and Middle%,ast.
Within India! the company has already bid in the states of 9imachal #radesh! 4rissa!
.ttarakhand and other states of the north%east.
Through its well%planned initiatives! the Company is confident of posting strong financial growth
year%on%year.
RESEARCB METBODOLOGY
MethodologyF
A* T#,e o! St$d#F
The study carried out here is basically analytical in nature. This type of study relies on data
which is already available.
.* T#,e o! Data $sed-
The methodology involved for data collection was mainly through secondary data and
was obtained from the companyAs financial statements and the companyAs website. The
Balance "heets and the #rofit + 7oss ccounts for the last 8 years was the source based
on which forecasting was done which was from the companyAs archives. ,(treme care was taken
in collecting the data from the financial statements and only relevant data was taken for
the analysis based on.
C* So$rces o! Data-
The source of data has been companyAs Balance "heet and #rofit and 7oss ccounts over a
period of past 8 years.
D* Tools $sed !or Data CollectionF
The data has been collected mainly from the companyAs Balance "heet and #rofit + 7oss
ccount for the past 8 years. Interview schedule was taken to understand how the *inance
Department is working and what are the various policies followed in the 4rgani&ation.
E* Tools and tec'ni=$es $sed !or anal#sis-
/arious tools and techniEues have been used to fulfill the aforesaid ob)ectives.
thorough study of the organi&ation has been along with in depth study of the functioning
of *inance and ccounts Department of 6I#7. *urther for the analysis of Working Capital
Management! study of working Capital cycle ' 4perating cycle has been made along with
4perating cycle of 6I#7. Thereafter analysis of working capital has been done by taking into
consideration past 8 years Current ssets and current 7iabilities. fter this component wise
analysis has been done! to have in depth view of working capital reEuirements and its trend. To
find out the efficiency of Working Capital management! 0atio analysis tool has been used
for the evaluation of inventory! Cash Management and 0eceivables Management at
"0#7. Trend #ro)ection of Working Capital 0eEuirements has also been done to assess
the future reEuirements of Working Capital.
ANALYSIS OF WORKING CAPITAL MANAGEMENT
Met'ods ado,ted !or Wor%in& Ca,ital anal#sis-
The broad range of pro)ect management and financial advisory services includeF
Working Capital policy
*inancial 0atio analysis for Working Capital Management
Managing the components of Working Capital of 6;M I3*0 #046,CT" 7TD.
Determination of operating cycle of 6;M I3*0 #046,CT" 7TD.
"tatement of change in Working Capital
,stimating Working Capital needs! #ermanent + /ariable Capital
Trend nalysis of Working Capital Management
FINANCIAL RATIO ANALYSIS FOR WORKING CAPITAL
MANAGEMENT
Ret$rn on Wor%in& Ca,ital-
0eturn on Working Capital C04WCD O #BIT ' Working Capital P 2<<
Ta7le;- Ret$rn on Wor%in& Ca,ital
Ret$rn on Wor%in& Ca,ital For JIPL
5<2<%22 ?I8.=:'28I8.=:P2<< =>.I@Q
5<22%25 >@I.I2'2288.5?P2<< =?.8@Q
5<25%28 2552.@:'2=><.:8P2<< ?:.5=Q
Fi&$re F- Ret$rn on Dor%in& ca,ital
3oteF C$rrent Lia7ilities O Working Capital borrowings from Banks R Current 7iabilities R
#roposed Dividend R #rovision for Ta(.
C$rrent Assets O Inventories R Debtors R Cash + Bank balance R Current Investments R
dvance Income Ta( R dvance recoverable in Cash.
Anal#sis-
There has been a decline in 04WC between the two years J it reduces 5<Q during 5<2<%22. This
situation arises because of increase in current liabilities in past years as company is having
proposal of lots of investment due to which company is financing its pro)ect and there is less
tendency of free cash flow.
LI?5IDITY RATIOS-
Snapshot of Liquidity Ratios:
Ta7le F- Li=$idit# ratios
.asic Ratios ;9:9>:: ;9::>:; ;9:;>:F
Current ratio 5.>< 5.2? 5.@8
cid test ratio 2.>> 2.5: 2.=?
Cash ratio <.<= <.<2 <.8<
C$rrent Ratio-
The current ratio is also known as the Dor%in& ca,ital ratio and is normally presented as a real
ratio.
Ta7leG- C$rrent Ratio
5<2<%22 Current sset F Current 7iability 5.><F2
5<22%25 Current sset F Current 7iability 5.2?F2
5<25%28 Current sset F Current 7iability 5.@8F2
Fi&$re G- C$rrent Ratio
An
al#sis-
The current ratio is the measure of whether a company has enough short%term assets to cover its
short%term debt and is inde( of strength of working capital. nything below 2 indicates negative
W'C Cworking capitalD. While anything over 5 means that the company is not investing e(cess
assets. ratio of greater than one means that the firm has more current assets then current
claims. Current ratio of the company has increased from 5.2? in 1ear 5<22%25 to 5.@8 in 1ear
5<2<%22. Current 0atio of the company depicts that for every 0e.2 worth of current liability there
are assets worth 0s.5.@8. The company has sufficient liEuidity as the ratio is increasing. This
year there is an increase in ratio due to almost double inventory level in current year in
comparison with previous year.
S$&&estions-
*irstly the company should try to increase their inventory levels as money gets blocked.
In order to increase current ratio current assets should be increased. If we look into the
detailed schedule of current assets then we can find out that ma)or portion of current assets is
due to debtors and inventories.
Company should make market survey and should decide first that what should be the
optimum amount of finished goods so that ma)or portion of it can be sold off in the market.
This will help in reducing the locking of funds or working capital in the finished goods.
Acid Test Ratio-
Ta7le H- Acid Test Ratio !or JKM In!ra Pro3ects Li(ited
Acid Test Ratio For S'rira( Pistons
5<2<%22 Current ssets % "tocksF Current 7iabilities 55=:.52%:2@.2I':>?.<< 2.>>
5<22%25 Current ssets % "tocksF Current 7iabilities 5<II.?=%:=?.5='I>=.?8 2.5:
5<25%5<28 Current ssets % "tocksF Current 7iabilities 5>=<.<@%I5I.=?'2<:I.52 2.=?


Fi&$re H- Acid Test Ratio !or JIPL

Anal#sis-
cid test ratio is a more rigorous test of liEuidity than the current ratio and when used in
con)unction with it! gives a better picture of the firm s ability to meet its short%term debts out of
short%term assets. This ratio is used to determine risk that is not detected by the Working Capital
ratio. Euick or liEuid ratio of 2F2 is considered as satisfactory as the firm can easily or readily
meets all of its current liabilities. 9ere 6I#7 have its last year ratings of which is constant from
last three years! which indicates company is not having satisfactory financial position and not
able to pay its current liabilities and should be looked at with e(treme care and also implies that
current assets are highly dependent on inventory.
Co(,arison 7etDeen C$rrent Ratio 1 Acid Test Ratio-
Ta7le I- Co(,arison 7etDeen c$rrent ratio and acid test ratio
Co(,arison C$rrent Acid Test
5<2<%22 5.2< 2.>>
5<22%25 2.?5 2.5:
5<25%28 2.I2 2.=?
JKM In!ra Pro3ects Li(ited liEuidity position had worsened when looked at its current ratio.
The acid test ratio has fallen from 5<22 to 5<25. Current assets might not be that liEuid since
most of them are debtors. The fact that the differences between the current and acid test ratio is
around.@! which is large! tells us that the JKM In!ra Pro3ects Li(ited stocks are large. This is a
huge level of stock holding. dditionally! the acid test ratio has decreased over the three%year
period! meaning that JKM In!ra Pro3ects Li(ited has a weak liEuidity position than it had
before. 3ormally that is not a good thing.
Cas' Ratio-
Ta7le J- Cas' ratio !or JIPL
Cas' Ratio For S'rira( Pistons
5<2<%22 CashF Current
7iabilities
@>.85':>?.<< <.<=F2
5<22%25 CashF Current
7iabilities
2?.=I'I>=.?8 <.<2F2
5<25%28 CashF Current
7iabilities
88@.>>'2<:I.52 <.8<F2

Fi&$re I- Cas' Ratio !or JIPL
Anal#sis-
s cash is being the most liEuid asset! Euoted investment has been taken as marketable
securities. In our case the company is showing an increasing trend but still it is not a favorable
cash ratio. *rom the above calculation it is clear that companyAs cash ratio had remained very
low. It is the notable point for the company as its current liabilities are much higher than the cash
in hand. It can create problems in the future payments of current liabilities. Ma)or portion of
companyAs current assets goes to inventory and debtors! which only increase the carrying cost.
Company need to reduce these assets to their optimum level.

OTBER SNAPSBOT OF WORKING CAPITAL MANAGEMENT RATIO S
Ta7le <- Wor%in& ca,ital (ana&e(ent ratios
JIPL For t'e t'ree #ears
Asset 5sa&e ;998>:9 ;9:9>:: ;9::>:;
*i(ed sset Turnover <.II times <.I2 times 2.<8 times
Current sset Turnover 5.>? times 8.<@ times 5.I5 times
Capital ,mployed Turnover 5.=8 times 5.@= times 5.@5Times
Working Capital Turnover @.88times =.>= times @.I=times
E!!icienc#
Working capital to $ross "ale <.58 times <.2? times <.5< times
Working Capital to Cost of "ale <.5: times <.5: times <.5= times
Stoc%De7torsCreditors
DebtorsA Turnover =.2? times >.8= times >.I< times
verage Collection #eriod >I.>2 days =>.>I days =5.2? days
CreditsA Turnover 8.88 times 5.>= times 8.8> times
Credit #ayment #eriod 2<:.2<days 28=.:@days 2<?.2@ days
Inventory Turnover >.<I times >.8? times >.>8 times
Inventory 9olding =I.22 days =>.2> days =@.5I days
Conversion #eriod CIn DaysD =I.22 days =>.=2 days =@.5I days
Ratio to anal#Ee WC Str$ct$re
Current sset to Total ssets 0atio <.8: times <.88 times <.8: times
Cash to Current sset 0atio <.<5< times <.<<: times <.25 times
Inventory to Current sset 0atio <.8> times <.@< times <.8= times
Current 7iabilities to Total 7iabilities <.@: times <.@8 times <.@I times
*inished goods to Inventory 0atio <.@<< times <.@<8 times <.8@< times
0aw Material to Inventory 0atio 2.>I times 2.>5 times 2.:2 times
7oan + dvances to C ratio <.2< times <.2< times 2.<< times
Wor%in& Ca,ital Mana&e(ent I- Asset 5sa&e
C$rrent Asset T$rno+er-
C$rrent Asset T$rno+er O
Turnover
Current ssets
Ta7le 8- C$rrent asset t$rno+er !or JIPL
Current sset Turnover *or 6I#7
5<2<%22 ><8:'55><.=: O 5.>?times
5<22%25 >@<<'5<II.?= O 8.<@ times
5<25%28 ??8I'5>=<.<@ O 5.I5 times

Fi&$re J- C$rrent Asset T$rno+er
Anal#sis-
9igh current assets turnover ratio is more )udicious and shows efficiency of management and
proper utili&ation of the assets. The graph shows the company has managed to higher the ratio
during the previous year however this year due to non%proportionate change in current assets and
turnover the ratio declines to 5.I5. Due to more inventories this ratio falls.
Wor%in& Ca,ital T$rno+er- This ratio signifies how effectively working capital is being
used in terms of the turnover.
Wor%in& Ca,ital T$rno+er O
"ales
Working Capital
Ta7le :9- Wor%in& ca,ital t$rno+er !or JKM In!ra Pro3ects Li(ited

Fi&$re <- Wor%in& Ca,ital T$rno+er !or JIPL
Wor%in& Ca,ital T$rno+er For S'rira( Pistons
5<2<%22 ><8:'28I8.=: @.88 times
5<22%25 >@<<'2288.5? =.>= times
5<25%28 ??8I'2=><.:8 @.I= times
Anal#sis-
What this ratio tries to highlight is how effectively working capital is being used in terms of the
turnover it can help to generateF no ideal values here but the higher the better! surely. The
declining working capital turnover ratio in JKM In!ra Pro3ects Li(ited indicates that working
capital is not being utili&ed properly over the period of time. Management may think of
increasing the sales in the market or it is going for certain e(pansion plans.
Wor%in& Ca,ital Mana&e(ent II- E!!icienc#
Wor%in& Ca,ital to Gross Sale-
Wor%in& Ca,ital to Gross Sale O
Working Capital
$ross "ale
Ta7le ::- Wor%in& ca,ital to &ross sale !or JIPL
Working Capital to $ross "ale for the 6I#7
5<2<%22 28I8.=:'><8: <.58
5<22%25 2288.5?'>@<< <.2?
5<25%28 2=><.:8'??8I <.5<
Fi&$re 8- Wor%in& Ca,ital to Gross Sale !or t'e JIPL
Anal#sis-
The Company was showing decline in the year 5<22 but now as the ratio increased to <.2? from
<.5< there is a matter of concern but here also 6;M Infra #ro)ects 7td. is far better than the
industryAs average. In previous year companyAs working capital was very low but now they are
trying to improve it for liEuidity purposes.
Wor%in& Ca,ital to Cost o! Sale-
Ta7le :;- Wor%in& ca,ital to cost o! sale !or JIPL
S

Wor%in& Ca,ital to Cost o! Sale O
Working Capital
Cost of "ale
Wor%in& Ca,ital to Cost o! Sale !or t'e JIPL
5<<I%2< 28I8.=:'@I>< <.5:
5<2<%22 2288.5?'=@>5 <.5<
5<22%25 2=><.:8'>2>: <.5=
Fi&$re :9- Wor%in& Ca,ital to Cost o! Sale !or t'e JIPL
Anal#sis-
The Company was showing decline in the year 5<25 but now as the ratio increased to <.5= from
<.5< there is a matter of concern but here also 6I#7 is far better than the industryAs average. In
previous year companyAs working capital was very low but now they are trying to improve it for
liEuidity purposes.
Wor%in& Ca,ital Mana&e(ent III- Stoc%De7torsCreditors
De7tor@s T$rno+er-
De7tor@s T$rno+er O
"ales
Debtors

Ta7le :F- De7tor@s t$rno+er ratio !or JIPL
Fi&$re ::- De7tor@s T$rno+er Ratio !or t'e JIPL
Anal#sis-
*irstly! the ratio seems to have change by going from =.2? to >.8= times in the two yearsK and it
means that! on average! the companyAs debtors are taking fewer days to pay their accounts.
"oundness of this ratio is more dependent on the business policy and the terms with the clients.
4n the other side turnover is increasing over the years! which implies higher the turnover! shorter
the time between sales and collecting cash. It shows the companyAs debt%collecting machinery
has improved through years.
A+era&e Collection Period-
De7tor@s T$rno+er Ratio !or t'e JIPL
5<2<%22 ><8:'22>?.=> =.2? times
5<22%25 >@<<'2<<?.8: >.8= times
5<25%28 ??8I'225<.@2 >.I< times
A+&* Collection Period O
8><
Debtor Turnover
Ta7le :G- A+era&e collection ,eriod !or JIPL
A+era&e Collection Period !or t'e JIPL
5<2<%22 8>< ' =.2? >I.>2days
5<22%25 8>< ' >.8= =>.>I days
5<25%28 8>< ' >.I< =5.2? days
Fi&$re :;- A+era&e Collection Period !or t'e JIPL
Anal#sis-
The average collection period measures the Euality of debtors since it indicates the speed of their
collection. The shorter the average collection period! the better the Euality of debtors! as a short
collection period implies the prompt payment by debtors. The trend of 6I#7 is showing that the
company was a success in decreasing the average collection period! which represent sound
collection policy of the company. #revious year it was =>.>I being debtors were less but now it
is on the previous trend.
Creditor@s T$rno+er-
Creditor@s T$rno+er O
#urchases
Creditors
Ta7le :H- Creditor@s t$rno+er ratio !or JIPL
Fi&$re :F- Creditor@s T$rno+er Ratio !or t'e JIPL
Anal#sis-
In 5<22 creditors turnover ratio increased from 5.>= to 8.8> times that shows company was
having improved credit paying ability through proper working capital management while in 5<25
the ratio decreased which implies terms of credit allowed by the suppliers are liberal and
creditors are not paid promptly. This shows company keeps its obligation for long time.
Creditor@s T$rno+er Ratio !or t'e JIPL
5<2<%22 28?:'@28.>I 8.88
5<22%25 28I<.2<'=58.I= 5.>=
5<25%28 2>:='=<<.:8 8.8>
Credit Pa#(ent Period-
Credit Pa#(ent Period O
8><
#ayable turnover ratio
Ta7le :I- Credit ,a#(ent ,eriod !or JIPL
Credit #ayment #eriod for the 6I#7
5<2<%22 8>< ' 8.88 2<:.2< days
5<22%25 8>< ' 5.>= 28=.:@ days
5<25%28 8>< ' 8.8> 2<?.2@ days

Fi&$re :G- Credit Pa#(ent Period !or t'e JIPL
Anal#sis-
"ince in 5<22 and 5<22 the average payment period of the company was less compared to 5<25
i.e. 28=.:@ days which implies that 5<25 company was less prompt in making payment to
suppliers compared to other years. s again it improved its criteria and kept fewer obligations in
the year 5<22. The same shows that reduction in the payment period is responsible for the
creditworthiness of the company.
In+entor# T$rno+er Ratio-
In+entor# T$rno+er O
Cost of Construction
Closing "tock

Ta7le :J- In+entor# t$rno+er ratio !or JIPL
In+entor# T$rno+er Ratio !or t'e JIPL
5<2<%22 @I><':2@.2I >.<I
5<22%25 =@>5':=?.5= >.8?
5<25%28 >2>:'I5I.=? >.>8
Fi&$re :H- In+entor# T$rno+er Ratio !or t'e JIPL
Anal#sis-
It measures appro(imately the number of times an entity is able to acEuire the inventories and
convert them into sales. The 6I#7 shows higher turnover ratio which is good for the company
while a low turnover is usually a bad sign because products tend to deteriorate as they sit in a
warehouse! but several aspects of inventory holding policy have to be balanced like lead time!
seasonal fluctuations in orders! alternative use of warehouse space.
In+entor# Boldin& Period-
In+entor# Boldin& Period O
8><
Inventory Turnover
Ta7le :<- In+entor# 'oldin& ,eriod
In+entor# Boldin& Period !or t'e JIPL
5<2<%22 8>< ' >.<I =I.22 days
5<22%25 8>< ' >.@2 =>.2> days
5<25%28 8>< ' >.>8 =@.5I days
Fi&$re :I- In+entor# Boldin& Period !or t'e JIPL
Anal#sis-
9ere! the company shows a decreasing trend in which there inventory holding ratio falls down!
which is good for the company as it avoids the unnecessary locking up of working capital in the
inventory and it shows efficiency of the management.
Wor%in& Ca,ital Mana&e(ent I6- Ratio to anal#Ee WC Str$ct$re
C$rrent Asset to Total Assets Ratio-
Ta7le :8- C$rrent asset to total asset ratio !or JKM In!ra Pro3ects Li(ited
C$rrent Asset to Total Asset Ratio !or t'e JIPL
5<2<%22 55><.=:'=I@>.5> <.8:
5<22%25 5<II.?='>5>>.:? <.88
5<25%28 5>=<.<@'>:@8.5= <.8:
Fi&$re :J- C$rrent Asset to Total Asset Ratio !or t'e JIPL
Anal#sis-
If we analy&e the structural health of working capital for 6;M Infra #ro)ects 7td.! the proportion
of current assets to total assets has been showing almost constant trend continuously over the
years! which shows that the company is having certain problems with its current asset
management. But as this picture is showing less declining so itAs very clear that this can be due to
some investment for long%term return.
Cas' to C$rrent Asset Ratio-
Cas' to C$rrent
Asset
O
Cash
Current asset
Ta7le ;9- Cas' to c$rrent asset ratio

Cas' to C$rrent Asset Ratio !or t'e JIPL
5<2<%22 @>.85'55><.=: <.<5<
5<22%25 2?.=I'5<II.?= <.<<:
5<25%28 88@.>>'5>=<.<@ <.25<
Fi&$re:<- Cas' to C$rrent Asset Ratio !or t'e JIPL
Anal#sis-
The company shows an increasing trend in 5<22 + again it decrease in 5<25 but as this
recovered again the increasing trend of cash in the current assets was observed. 9owever in the
year 5<25 it decreased drastically. We can say that it will effect liEuidity position of the firm but
on the other hand it is observed that they do not keep any ideal cash with them! which is a
positive sign for the company.
In+entor# to C$rrent Asset Ratio-
In+entor# to C$rrent Asset O
Inventory
Current asset
Ta7le ;:- In+entor# to c$rrent asset ratio !or JIPL
In+entor# to C$rrent Asset Ratio !or t'e JKM In!ra
5<2<%22 :2@.2I'55><.=: <.8>
5<22%25 :=?.5='5<II.?= <.@<
5<25%28 I5I.=?'5>=<.<@ <.8=
Fi&$re- :8 In+entor# to c$rrent asset ratio
Anal#sis-
9ere! the company shows an unfavorable trend of increase in the proportion of the inventory to
current assets in 5<22%25! which represents that the company is locking up the working capital
unnecessarily in the inventory. *ortunately! the ratio rises in the year 5<22 which is a good sign.
C$rrent Lia7ilities to Total Lia7ilities-
Current 7iabilities to Total 7iabilities O
Current 7iabilities
Total 7iabilities
Ta7le ;;- C$rrent lia7ilities to total lia7ilities ratio !or JIPL
C$rrent Lia7ilities to Total Lia7ilities Ratio !or t'e JIPL
5<2<%22 :>?.<<'2<?=.=? <.:<
5<22%25 I>=.?8'252=.5I <.?I
5<25%28 2<:I.52'28:5.2@ <.?:
Fi&$re ;9- C$rrent lia7ilities to Total lia7ilities
Anal#sis-
The company shows a decreasing trend in the proportion of the current liabilities in the total
liabilities! this means company is taking fewer loans to meet its liability and pro)ect investments
are there! hence this shows a less burden on the management of 6;M I3*0 #046,CT"
7IMIT,D. This ratio is not the only means of reviewing a companyLs debt structure.
Loan 1 Ad+ances to C$rrent Asset Ratio-
7oan + dvances to Current sset O
7oan + dvances
Current sset
Ta7le ;F- Loan 1 Ad+ances to C$rrent assets ratio !or JIPL
7oan + dvances to Current sset Ratio !or t'e JIPL
5<2<%22 55I.I8'55><.=: <.2<
5<22%25 52?.=8'5<II.?= <.2<
5<25%28 5>=.@<'5>=<.<@ 2.<<
Fi&$re ;;- Loan 1 Ad+ances to C$rrent Asset

Anal#sis-
The increase in this ratio in the year 5<22 shows the efficiency of the management. 9owever this
much increases in the ratio is not suggestible.
INTERPRETATION /RATIO ANALYSIS0-
The utili&ation rate of net working capital as depicted by working capital turnover ratio is
fluctuating during the period. It shows that working capital has not been effectively used over
the period of years e(cept in the year 5<22.
s shown by current assets turnover ratio! the utili&ation of current assets in terms of sales
has shown an increasing trend which shows that current assets has been effectively used to
achieve sales.
gain if we look at the efficiency with which individual elements of working capital have
been utili&ed! the picture of inventory turnover is bright.
s we look at the e(tent of liEuidity of working capital! we notice that the ratio shows a
decreasing trend. This indicates! problem on the liEuidity front.
MANAGEMENT OF C5RRENT ASSETS
Alternati+e C$rrent Asset In+est(ent ,olicies
Three alternative policies are there regarding the total amount of current assets. ,ssentially!
these policies differ with regard to the amount of current assets carried to support any given level
of sales! hence in the turnover of those assets. The line with the steepest slope represents a
rela(ed current asset investment Calso known as Bfat catMD #olicy! where relatively large amounts
of cash! marketable securities! and inventories are carried! and where sales are stimulated by the
use of a credit policy that provides liberal financing to customers and a corresponding high level
of receivables. Conversely! with the restricted current asset investment Calso known as Blean and
meanMD policy! the holdings of cash! securities! inventories and receivables are minimi&ed. .nder
the restricted! current assets are turned over more freEuently! so each dollar of current assets is
forced to Bwork harderM. The moderate current asset investment policy is between the two
e(tremes.
.nder the conditions of certainty! all firms would hold only minimal levels of current assets.
ny larger amounts would increase the need for e(ternal funding without a corresponding
increase in profits! while any smaller holdings would involve late payments to suppliers along
with lost sales due to inventory shortages and an overly restrictive credit policy.
When uncertainty is introduced the firm reEuires some minimum amount of cash and inventories.
restricted lean and mean current asset investment policy often provides the highest e(pected
return on this investment! but it entails the greatest risk! while the reverse is true under a rela(ed
policy.



Alternati+e C$rrent Assets In+est(ent Policies-

Fi&$re ;F- Alternate c$rrent assets in+est(ent ,olicies
Current ssets

=<
SBRIRAM PISTONS
@< 0ela(ed
8< Moderate
5<
0estricted
2<
< =< 2<< 2=< "ales

Ta7le s'oDin& Alternati+e C$rrent Assets In+est(ent Policies-
Ta7le ;G- Ta7le s'oDin& alternati+e c$rrent assets in+est(ent ,olicies
#olicy Current asset to support
"ales of I30 2<<'%
Turnover of
Current ssets
0ela(ed 8< 8.8
Modified 58 @.8
0estricted 2> >.8
6I#7 85.=? 8.<?
3oteF % The "ales'current assets relationship is shown here as being linear! but the
relationship is often curvilinear
MANAGING TBE COMPONENTS OF WORKING CAPITAL OF JKM
INFRA
*our main components-
Cash
Marketable securities'ccount #ayables
Inventory
ccounts 0eceivables
Cas' Mana&e(ent in JKM INFRA-
Cash management system adopted by *inance Department in 6;M I3*0 is very reliable and
transparent. s cash is a very important activity for a good operation of company here in 6;M
I3*0 cash is monitored every day and intimated to *inance Department. The daily cash report
includes all the details of cash inflows and outflows. Monthly cash budgets are maintained for
the estimated of monthly cash inflows and outflows. *inally the annual cash budget is made by
the *inance Department in the corporate head office.
The corporate office allocates different amount of each to different manufacturing units as per
their reEuirement. Corporate office acts as a linkage between the manufacturing unit and
creditors. Corporate office has determined the credit facility for every units of the company and
this keeps on changing from year to year depending up on companyAs position transactions!
profitability and inventory position.
The corporate office provides cash to manufacturing units but there most function is controlled in
unit itself. ll the need related to inventory are met through corporate office as well as individual
efforts of unit.
F$nd Allocation-
9ere the initial allocation for manufacturing units is done by corporate office and all
supplementary reEuirements are to look upon by Commercial department.
F$nd 5tiliEation-
Company operates an annual SCash BudgetA and a rolling SCash #lanA drawn up every month.
lthough specific forecasting techniEue is used! funds are deployed to different departments as
per their reEuirements. Daily reports on cash transaction are prepared by #rocurement
department to keep a track of all payments made in the days work. ,very month cash transaction
report is sent to *inance department in the corporate office showing all the transaction of cash!
Cinflow and outflowsD actual utili&ation of cash and allocation of fund is compared. If the
utili&ation of cash is more than the allocation of fund! then the plant has to )ustify its more
utili&ation.
To meet the reEuirement of cash! company approach to bank and present the reEuired detailed by
the bank. 6;M I3*0 kept less cash in hand! to meet the entire cash reEuirement it depends on
financing process.
E+al$ation o! cas' (ana&e(ent ,er!or(ances-
To assess the cash management performance this phase is divided as followsF
a0 "i&e of Cash
70 7iEuidity and deEuacy of cashF
This is depicted by the current ratio and acid test ratio! as calculated in part ratio analysis for
working capital management and respective position is shown in graph.
c0 Control of cash
4ne of the ma)or ob)ectives of cash management from the stand point of increasing return on
investment is to economi&e on the cash holding without impairing the overall liEuidity
reEuirements of the firms. This is possible by effecting tighter controls over cash flows. The
following ratios have been applied to assess the efficiency of cash controlF
Cash to Current ssets ratio
Cash turnover ratio
Cash to current liabilities ratio
Ta7le ;H- Ta7le s'oDin& di!!erent cas' ratios
JKM INFRA For t'e #ear ended MnRs*
E!!icienc# o! cas' control ;9:9>:: ;9::>:; ;9:;>:F
Cash to Current sset 0atio @>.85'55=:
O<.<5<
2?.=I'5<II
O<.<<:
88@.>>'5>=<.<@
O<.25 times
Cash to Current liability 0atio @>.85':>?.<<
O<.<= times
2?.=I'I>=.?8
O<.<2 times
88@.>>'2<:I.52
O<.8< times
verageF <.<@I
verageF <.25
S$((ar#-
It can be inferred from the above table that cash to current assets ratio is increasing which shows
improving position of liEuidity but it again starting decline from 5<25! which ultimately affect
the operational efficiency of the firm. Cash to current liability ratio shows the cash balance
maintained by company at a certain point of time for meeting its current liabilities. The cash to
current liability ratio is nearly on decreasing trend shows the efficiency of operations! but this
year it increases which is not a good sign.
Pa#a7le Mana&e(ent in JKM INFRA-
Mostly the creditor comprises of the bank that is financing the working capital needs and the
suppliers to whom payments are to be given. This is basically done as per terms and condition
with the respective parties. The company is not able to make proper payment to its creditors as
year on year companyAs creditors are increasing.
E+al$ation o! Pa#a7les Mana&e(ent-
The evaluation for payable management is done with the help of ratiosF
CreditorAs turnover ratio
verage #ayment #eriod
Ta7le ;I- Ta7le s'oDin& ,a#a7les (ana&e(ent
JKM INFRA For t'e #ear ended MnRs*
Pa#a7le Mana&e(ent ;9:9>:: ;9::>:; ;9:;>:F
Creditor@s ratio 8.88 times 5.>= times 8.8> times
A+era&e Pa#(ent ,eriod 2<:.2< days 28=.:@days 2<?.2@ days
verageF 22?.<5 days
S$((ar#-
The analysis shows that the minimum average creditor period is 2<? days and ma(imum is 28=
days. By analysis reveals the increasing and decreasing trend in average payment period! which
shows company is provided with liberal and strict credit payment period over the year and
according to the market situation.
In+entor# Mana&e(ent-
9ere the inventory is categori&ed in toF
/:0 B C analysis
/;0 - 1 H analysis
:0 A.C Anal#sis- > Items which constitutes to ?<Q of total consumption Cof stores and sparesD
value when arranged in descending order of consumption value will be termed as SA class items.
3e(t 5<Q of total consumption value will be termed as SBA class items and the rest 2<Q as the
SCA class items.
;0 4YK Anal#sis- > Items which constitute top ?<Q of total stock of stores and spares holding
value when arranged in descending order of stock holding will be termed a S-A class items ne(t
5<Q of total stock holding value is S1A class items and the rest 2<Q as the SHA class.
9igher than necessary stock levels tie up cash and cost more in insurance! accommodation costs
and interest charges.
*our basic levels will need to be established for each line'category of stock. There are theF
a0 Ma(imum level J achieved at the point a new order of stock is physically receivedK
70 Minimum level J the level at point )ust prior to delivery of a new order Csometimes called
buffer stocks J those held for short term emergenciesDK
c0 0eorder level J point at which a new order should be placed so that stocks will not fall
below the minimum level before delivery is receivedK and the
d0 0eorder Euantity or economic order Euantity J the Euantity of stock! which must be
reordered to replenish the amount held at the point delivery! arrives up to the ma(imum
level.
4nce these controls are implemented an efficient system of recording receipts and issues is vital
to e(ercise full control of inventories.
In+entor# Mana&e(ent at JKM INFRA-
Inventory is stock of a company! which is manufacturing the components that make up the
products! for sale. In managing inventories the ob)ective of the company is to determine and
maintain optimum level of inventory investment. The optimum level of inventory lies between
two danger points of e(cess and inadeEuate inventories.
Inventory is monitored differently for raw material! work in progress! finished goods and spares.
Monthly inventory report is sent to the finance department in the corporate office. 4bviously the
inventory report is prepared at plant level. #rocurement Department gives the date of closing
stock of raw materials! finished goods as well as the work in progress.
In+entor# T$rno+er Ratio-
Ta7le ;J- ta7le s'oDin& In+entor# t$rno+er ratio
JKM INFRA For t'e #ear ended MnRs*
;9:9>:: ;9::>:; ;9:;>:F
Inventory Turnover >.<I times >.8? times >.>8 times
verageF >.8>
S$((ar#-
Inventory turnover ratio establishes a relationship between the total sales during a period and
average inventory hold to meet that Euantum at >.>8 times in 5<22 and on average it is >.8>
times! that signifies the average moving of inventory. In other words! the stock held during 5<22
is for =I.22 days as comparison of average at =>.=5 days.
Recei+a7le Mana&e(ent-
t a plant level mostly the finished goods are sold on credit to increase upon the market
share and retain the customers but the ma)or portion of debtors are dealt by Marketing .nit
of the Commercial Department and the *inance Department. It is consideration as an
essential marketing tool.
Control of the debtorsA element Cthe amount owed the business in the short termD involves a
fundamental trade%off between the cost of providing credit to customers Cwhich includes
financing bad debts and administrationD! and the additional net revenue that can be earned by
doing so. The former can be kept to a minimum with effective credit control policies! which will
reEuireF
"etting and enforcing credit termsK
/etting customers prior to allowing them creditK
"etting and reviewing individual credit limitsK
,fficient invoicing and statement generationK
#rompt Euery resolutionK
Continuous review of debtors position Cgenerating Saged debtorsA reportDK
,ffective chasing and collection proceduresK and
7imits beyond which legal action will be pursued.

Before allowing credit to a new customer trade and bank references should be sought. ccounts
can be asked for and analy&ed and a report including any county court )udgments
gainst the business and a credit score asked for from a credit rating business. "alesmenAs views
can also be canvassed and the premises of the potential customer visited.
The e(tent to which all means are called upon will depend on the amount of the credit sought!
the period! past e(periences with this customer or trade sector! and the importance of the
business that is involved. But this is not a one%off reEuirement. 4ne classic fraud is to start off
with small amounts of credit! with invoices being settled promptly! eventually building up to a
huge order and a disappearing customer.
Credit checking! even for established customers! should therefore feature in regular procedures.
When the creditworthiness of a new customer is established! positive credit control calls for the
setting of a credit limit! any settlement discounts! the credit period! and credit charges Cif anyD.
The 7ate #ayment of Commercial Debts CInterestD ct now allows small businesses to charge
large interest on late payment of business debts by companies and public sector organi&ations.
3evertheless! it is wise to inform customers this right will be e(ercised.
Collection is a vital element of credit control and must include standard! polite and well%
constructed reminder letters and effective telephone or e%mail follow up. .se of collection
agencies should be considered! as could factoring J in its most comprehensive form a loan
facility based on outstanding invoices plus a sales ledger and debtors control service.
,fficient control of debtors will assist cash flow! and help keep overdraft or other loan
reEuirements down! and hence reduce interest costs.
Debtors represent future cash J or they should do if proper credit control policies are pursued.
7ikewise stock will eventually become cash! but in the meantime represents working capital tied
up in the business. ;eeping levels to the minimum reEuired for efficient operations will keep
costs down. This means controlling buying! handling! and storing! issuing! and recording stock.
Inherent in any system of inventory control is the concept of appropriate stock levels J normally
e(pressed in physical units sometimes in monetary terms.
The ob)ective of establishing control levels is to ensure that e(cessive stocks are never carried
Cand working capital thereby sacrificedD but that they never fall below the level at which they can
be replenished before they run out.
Recei+a7les Mana&e(ent in JKM INFRA-
Corporate office and the commercial department in coordination do the management of
receivables. The management of receivable is dealt on ma)or part by corporate office and minor
part by commercial department of the company.
6;M I3*0 in matter of granting a credit period to customers tightens their policy and reduce
credit period to 2<? days to its debtors. Total Debtors amounted to 0s. 22>?.=> by the end of
5<22! which further decreased to 0s. 2<<?.8: in 5<25.
DETERMINATION OF OPERATING CYCLE OF JKM INFRA-
The determination of length of the operating cycle of a manufacturing firm is the sum ofF
The broad range of pro)ect management and financial advisory services includeF
inventory conversion period CIC#D! +
debtors conversion period CDC#D
A0 In+entor# con+ersion ,eriod-
It is the total time needed for producing and selling the product. Typically! it includesF
a0 raw material conversion period C0MC#D
70 work%in%process conversion period CWI#C#D

In+entor# Con+ersion ,eriod L RMPC M WIPCP
The raw material conversion period is depends onF
:0 raw material consumption per day! +
;0 raw material inventory
RaD Material Cons$(,tion ,er da# L Total RaD Material Cons$(,tionN$(7er o! da#s
in t'e #ear
RaD Material Con+ersion ,eriod L RaD Material In+entor#RaD Material Cons$(,tion
,er da#
"imilar calculations can be made for other inventories! debtors and creditors.
.0 De7tors@ con+ersion ,eriod-
It is the time reEuired to collect the outstanding amount from the customers. The total of
inventory conversion period and debtorsA conversion period is referred to as gross operating
cycle C$4CD.
Gross O,eratin& C#cle L ICP M DCP
C0 Pa#a7le De!erral ,eriod-
This is very common to get gross operating cycle but in practice! a firm may acEuire resources
Csuch as raw materialsD on credit and temporarily postpone payment of certain e(penses.
#ayables! which the firm can defer! are spontaneous sources of capital to finance investment in
current assets. The payables deferral period C#D#D is the length of time the firm is able to defer
payments on various resource purchases.

Net O,eratin& C#cle L Gross O,eratin& C#cle N Pa#a7le De!erral ,eriod
If depreciation is e(cluded from e(penses in the computation of operating cycle! the net
operating cycle also represents the cash conversion cycle. It is net time interval between cash
collections from sale of the product and cash payments for resources acEuired by the
firm. It also represents the time interval over which additional funds! called working capital!
should be obtained in order to carry out the firmAs operations.
A0 In+entor# con+ersion ,eriod-
a0 RaD Material Con+ersion Period-
1ears 5<2<%22 5<22%25 5<25%28
0aw material consumed
vg. 0aw material inventory 28?:.>8
?<2.55
28?:.>8'?<2.55
O2.I> times
28I<.2<
?55.?=
28I<.2<'?55.?=
O2.I5 times
2>:=
:I8.@2
2>:=':I8.@2
O2.:: times
0CM#
8><'2.I>
O2:8.>? days
8><'2.I5
O2:?.= days
8><'2.::
O2I2.@: days
70 Wor%>In>Pro&ress Con+ersion Period-
.0 De7tors Con+ersion-
1ears 5<2<%22 5<22%25 5<25%28
Cost of #roduction
vg.Work in progress
5<>2.?8
2=5.==
5<>2.?8'2=5.==
O28.=2 times
582<.<8
22I.I8
582<.<8'22I.I8
O2I.5> times
25@:.:5
2@:.8=
25@:.:5'2@:.8=
O:.@2 times
WI#C# 8><'28.=2
O@5.:< days
8><'2I.5>
O2:.>I days
8><':.@2
O5>.>@ days
1ears 5<<I%2< 5<2<%22 5<22%25
"ales
Closing debtors
><8:
22?<.2@
><8:'22?<.2@
O=.2> times
>@<<
2<<?.8:
>@<<'2<<?.8:
O>.8= times
??8I
225<.@2
??8I'225<.@2
O>.I< times
DC# 8><'=.2>
O>I.?> days
8><'>.8=
O=>.>I days
8><'>.I<
O=5.2? days
C0
Pa#a7les Con+ersion-
O,eratin& C#cle-
$ross 4perating Cycle C$4CDF
3et 4perating Cycle C34CDF
Anal#sis-
1ears 5<<I%2< 5<2<%22 5<22%25
#urchases
Closing creditors
28?:.>8
@28.>I
28?:.>8'@28.>I
O8.88 times
28I<.2<
=58.I=
28I<.2<'2<<?.8:
O5.>= times
2>:=
=<<.::
2>:='=<<.::
O8.8> times
#C# 8><'8.88
O2<:.2< days
8><'5.>=
O28=.: days
8><'8.8>
O2<?.2@ days
1ears 5<<I%2< 5<2<%22 5<22%25
0CM#RWI#C#RDC# 5II.@: days 5:5.8> days 8<2.@< days
1ears 5<<I%2< 5<2<%22 5<22%25
$4C%#C#
5II.@:%2<:.2<
O2I2.8: days
5:5.8>%28=.:<
O2@>.=> days
8<2.@<%2<?.2@
O2I@.5> days
The operating cycle of the firm is disturbed! as it is continuously increasing which is not good for
the company.
The company policy had a significant change for the year with regard to inventory as it had
increased continuously but this policy has a cost to the company in the presence of a
significant decrease in payables deferral period! will have to negotiate higher working capital
funds.
Company has tighten its steps towards the credit policy which signifies that in the current
year company is proving itself more efficient but other side it as well shows a decline in the
market share of the company.
The company had reduced down its payables deferral period significantly which strengthens
its creditworthiness in the market and helps the company in getting the loans on liberal terms.
This represents the efficiency of the management.
4ne can have a vastly different working capital outlay while performing the same activity.
9aving a large amount invested in stocks and debtors does not necessarily mean large profits! but
it can mean a drop in the prime calculation that every businessman is interested in the return on
investment. The ob)ect of working capital management is to trim down on stocks and debtors and
get the cash coming faster within the comfort &one of the business. In the normal periods of
business activity! cash that had completed the working capital cycle would be reinvested in stock
and the whole process would begin again.
Anal#sis o! Asset Percenta&e-
Ta7le ;<- Ta7le s'oDin& anal#sis o! asset ,ercenta&e
6; I3*0 #046,CT 7IMIT,D Years
Partic$lars ;9:9>:: ;9::>:; ;9:;>:F
Current asset 55=: 5<II 5>=<.<@
Total asset =I@>.5> >5>>.:? >:@8.5=
#ercentage of current assets over fi(ed
assets
8?.<5Q 5I.IIQ 8=.@IQ
Current ratios 5.>< 5.2? 5.@8
Fi&$re ;G- Percenta&e o! C$rrent Asset to FiCed Asset
Anal#sis- *rom the above calculation it can be analy&ed that company is following an adeEuate
policy of working capital from last 5 years. When we give a thought to the current ratio of last
three years we can very easily depict that its current ratio is more than the standard one i.e. of
5F2. This type of approach also gives the adverse impact on the liEuidity of the company.
Anal#sis o! C'an&e in Wor%in& Ca,ital-
Ta7le ;8- Ta7le s'oDin& anal#sis o! Dor%in& ca,ital
"90I0M #I"T43" For t'e #ear ended MnRs*
Partic$lars ;9:9>:: ;9::>:; ;9:;>:F
Current asset 55=: 5<II 5>=<.<@
Current 7iabilities 2<=5.<8 22II.5: 28=2.I2
3et Working Capital 25<=.I? :II.?5 25I:.28
Fi&$re ;H- Net Dor%in& Ca,ital
Anal#sis-
s we can see from the above table and graph that companyAs 3et Working Capital has been
showing variation in its trend as from last two years working capital is showing positive
trend in increasing order.
The above situation shows that company management is efficient in management of working
capital.
Making the comparison of current assets and current liabilities in 5<22 + 5<25 current
liabilities are less than current assets which leads the working capital in positive range which
is good for the company.

Anal#sis o! C$rrent Assets-
Ta7le F9- Ta7le s'oDin& anal#sis o! c$rrent assets
6;M I3*0 For t'e #ear ended MnRs*
Partic$lars ;9:9>:: ;9::>:; ;9:;>:F
Debtors 22>?.=> 2<<?.8: 225<.8:
Inventory :2@.2I :=?.5= I5I.=?
Cash + Bank balance @>.85 2?.=I 88@.>>
7oans + dvances 55I.I8 52?.=8 5>=.@<
Total 55=: 5<II.?= 5>=<.<2
Anal#sis-
Composition of all parts seems to be distributing but almost each component is showing
increasing trend which has both kind of influence for the financial performance of the
company so company need to manage these components very carefully.
Inventory is showing an increasing trend that is the signal of danger for companyAs
profitability and these are not giving any return by locking up working capital.
S$&&estions-
*irst and foremost suggestion for the company is that! it should look into the idle funds!
which are engaged in inventory. Company should withdraw money from this locked up
working capital and invest it in some other assets.
Anal#sis o! C$rrent Lia7ilities-
Ta7le ;I- Ta7le s'oDin& anal#sis o! c$rrent lia7ilities
Partic$lars ;9:9>:: ;9::>:; ;9:;>:F
"undry Creditors @28.>I =58.I= =<<.:8
dvances from customers 2@.?> 2<.5? 2>.25
4ther provisions 5<:.=? 5@I.=> 5I5.I8
4ther Current liabilities @2=.<2 @2=.=< =@5.<8
Total 2<=5.<8 22II.5: 28=2.I2
Anal#sis-
s we can see from the graph and table that ma)or portion of current liabilities are with
sundry creditors and every year it keeps on increasing.
s the company obligations are increased so company need to put certain measure to control
current liabilities.
By looking the three years position of company in current assets and current liabilities it can
be seen that current liabilities are increasing over current assets so within the time company
need to manage its liability portion and need to make safer decisions.
S$&&estions-
Due to the huge amount of current liabilities company has to lock up its funds in current
assets. Therefore! it should reduce its current liabilities by paying them off so that regular
cash outflow of cash get restricted and outflow gets converted into inflow to increase in
profitability of the firm.
4ne suggestion that could be made to the company is that! it should pay off its creditors by
withdrawing some cash from its debtors! which is idle at this point of time and some amount
from its inventory.
STATEMENT OF CBANGE IN WORKING CAPITAL
Ta7le FF- Ta7le s'oDin& state(ent o! c'an&e in Dor%in& ca,ital
6;M I3*0 Years
Partic$lars ;9:9>:: ;9::>:; ;9:;>:F
Total C$rrent assets /A0 55=: 5<II 5>=<.<@
Total C$rrent Lia7ilities /.0 2<=5.<8 22II.5: 28=2.I2
Wor%in& Ca,ital S'ort!all /A>.0 25<=.I? :II.?5 25I:.28
Anal#sis-
statement of changes in working capital helps us in locating where these changes took place.
"ince working capital is measured by subtracting current liabilities from current assets. ny
increase in current asset and any decrease in current liabilities show an increase in working
capital similarly! a decrease in current assets and an increase in current liabilities represent a
decrease in working capital.
This table shows the changes in net working capital of 6;M I3*0 #046,CT". wise
financial policy of a firm reEuires that long%term funds be used to finance *i(ed ssets and short
term funds are used to finance Current ssets. The statement of changes in working capital
shows that there was a tremendous continuous increase in current liabilities. It is clear that our
debtors are increasing in the previous year so it implies that company is losing the interest on the
working capital locked into it. There is a decrease in working capital mainly because of the
locking of working capital funds in inventories and receivables and due to the increase in the
liabilities.
ESTIMATING WORKING CAPITAL NEEDS
The most appropriate method of calculating the working capital needs of a firm is the concept of
operating cycle. 9owever! a number of other methods may be used to determine working capital
needs in practice. We shall illustrate here three approaches! which have been successfully
applied in practiceF
C$rrent assets 'oldin& ,eriod- To estimate working capital reEuirements on the basis of
average holding period of current assets and relating them to costs based on the companyAs
e(perience in the previous years. This method is essentially based on the operating cycle
concept.
Ratio o! sales- To estimate working capital reEuirements as a ratio of sales on the
assumption that current assets change with sales.
Ratio o! !iCed in+est(ent- To estimate working capital reEuirements as a percentage of
fi(ed investment.
Esti(atin& O,ti(al Need o! Wor%in& Ca,ital
a0 RaD (aterial cons$(ed ,er (ont'-
O 2>:='25 O2@<.@< Mn'0s.
70 Wor% in ,ro&ress-
0aw material per month R CCost of #roduction '5D
O %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
25
2@<.@< R C25@:.:5' 5D
O %%%%%%%%%%%%%%%%%%%%%%%%%%%%% O 2@<.@< R >5@.@2O ?>@.:2 Mn'0s.
d0 Total In+entor# Needs-
O 2@<.@< R ?>@.:2 O I<=.52 Mn'0s.
e0 De7tors-
??8I
"ales per month O %%%%%%%%%%%%%%%%% O >@@.I2 Mn'0s.
25
!0 O,eratin& Cas'-
>5@.@2
Total cost per month O %%%%%%%%%%%%%%%%%% O=5.<8 Mn'0s.
25 T'ere!oreA
Total Wor%in& Ca,ital Re=$ired
O I<=.52 R >@@.I2 R =5.<8
O 2><5.2= Mn'0s.
The first method gives details of the working capital items. This approach is sub)ect to error if
markets are seasonal.
number of factors will govern the choice of methods of estimating working capital. *actors
such as seasonal variations in operations! accuracy of sales forecasts! investment cost and
variability in sales price would generally be considered. The production cycle and credit and
collection policy of the firm would have an impact on working capital reEuirements. Therefore!
they should be given due weightage in pro)ecting working capital reEuirements.
TREND ANALYSIS FOR WORKING CAPITAL MANAGEMENT
Trend analysis is comparative analysis of companyAs ratios over time. It tries to predict the future
movement based on past data. Trend analysis is based on idea what is happened in past and given
the idea what would happen in past. In trend analysis! industry ratios are compared over time!
typically years. 1ear%to%year comparisons can highlight trends and point up the need for action.
Trend analysis works best with five years of ratios.
TWith the past! we can see tra)ectories into the future % both catastrophic and creative
pro)ections.T
The Trend nalysis module allows plotting aggregated response data over time. This is
especially valuable on the basis of five%year data and a result of long survey.
The following data points can be measured C1%(isD
:* Mean and Mean #ercentile
;* "tandard Deviation and /ariance
F* 0atio
The TTime *actorT C-%(isD can have the following granularity
:* Daily
;* Weekly
F* Monthly
G* Guarterly C6an%Mar! pr%6un! 6ul%"ept! 4ct%DecD
H* 1early

Projection of Ratios through Trend Analysis
Fi&$re ;I- C$rrent Ratio Trend
Fi&$re ;J- Cas' Ratio Trend
Fi&$re ;<- Total Asset T$rno+er Trend
Fi&$re ;8- C$rrent Asset T$rno+er Trend
Fi&$re F9- Wor%in& Ca,ital T$rno+er Trend
Fi&$re F:- De7tor T$rno+er Trend
Fi&$re F;- Creditor T$rno+er Trend
Fi&$re FF- In+entor# T$rno+er Trend
Anal#sis on t'e 7asis o! Trend-
Trend of current ratio put a picture of company that company is not having short term fund in
hand to meet short term debt hence it put a threat in meeting current obligations.
Cash 0atio trend shows that company is having high amount of cash for paying current
liability which can influence the financial position of company in upcoming period.
Total asset turnover implies the asset base of company and this pro)ection is in favour of the
company that shows efficacy of company in handling asset.
Current asset turnover trend of company is decreasing which shows inefficiency in handing
assets.
Working capital is decreasing over the period that can lead company to face liEuidity crunch
+ shows inefficiency in use of working capital. It needs to analy&e the root cause of the same
to take reEuired corrective action.
DebtorAs turnover trend is showing an increase in future that signifies that there is shorter
time period in sales and collecting cash.
s the CreditorAs turnover ratio trend is decreasing which shows that payments of company
are prompt and do not keep its obligation for long time.
Inventory is showing good position in hand of company but still company need to keep a
check over it as inventory is influenced by seasonal fluctuations and market conditions.

C5RRENT ASSET FINANCING
Process o! Dor%in& ca,ital !inancin&-
:0 #redictions are made based on sales.
;0 Company has Credit Monitoring rrangement CCMD with banks. ccordingly *orms
are prepared and sent to consortium of banks for approval.
a* *orm I contains information about Current ssets! this *orm I should be sent one
week before beginning of Guarter.
7* *orm II contains details about operationsK this *orm II should be sent si( weeks
from entering the Guarter.
F0 ccordingly margins are decided. The company itself should meet margin amount. ,.g.
Inventory J 5=Q! 0eceivables J 8=Q. 3ormally margins are 5=%8=Q.
G0 dvances are received.
FINDING 1 S5GGESTIONS
Findin&s-
The following recommendations are made to the authorities at 6;M Infra #ro)ects 7imited in
order to maintain and improve on their current performance. The recommendations made are
based purely on my understanding of the situation. "ome of the ma)or things which I would like
the authorities to take notice of includeF
C$rrent ratio is sli&'tl# on a loDer side a&ainst t'e ind$str# standard o! :*FF
!olloDed in India* Current ratio indicates the ability of a company to stay afloat irrespective of
the prevailing market situations. Internationally! a current ratio of 5F2 is accepted. The investors
also seek this ratio in order to e(amine whether the company has adeEuate current resources so
that it does not default on its obligations and is able to generate sufficient returns to ma(imi&e
shareholders money.
De7tor@s t$rno+er ratio needs a t$ne $, as a&ainst creditor@s t$rno+er* This ratio
helps to e(amine whether the management of the concerned organisation is not being complacent
in recovery of its debts on time. $enerally it is reEuired that debtors turnover ratio be high as
compared to creditors turnover which implies that the firm is generating sales adeEuate enough
to cover its construction cost. If we look at the situation for 6I#7! the ratios were fine enough
until *128 but then afterwards the debtorIs turnover took a dip but because of adeEuate liEuidity
the management is able to take care of its obligations as for now. But if a proper solution is not
formulated then it can become a huge problem which will affect not only the performance of the
firm but may also deteriorate the confidence of the investors in the company.
T'e in+entor# t$rno+er ratio !or JIPL 'as 7een a s$ccess stor# !or t'e last co$,le o!
#ears so the management should do everything possible thing to maintain this inclination
in the coming years and try to encourage its human resources to keep up the good work.
With many a pro)ects in line and at different levels of e(ecution! it is reEuired that all the
aspects are dealt with eEual importance whether it is the case of long term ratios or the
short term ratios. The company has so many pro)ects in line for which it will reEuire
funds. With stellar performance in various sectors it has the confidence of investors. "o
the management )ust need to continue on the good work.
.p to now the Company en)oys the ratin&s o! OCRISIL A and OCare ...@ from
C0I"I7 and Care 0atings respectively. "o the management must make sure that
investors confidence remains the same.
"ome of the recent initiatives of 6I#7 areF
The study conducted on working capital management of 6;M I3*0 #046,CT"
7IMIT,D shows the evaluation of management performance in this conte(t. Ma)or
findings and suggestions thereon are narrated as underF
2. s current ratio is showing an increasing trend year on year! which implies that
current asset! are more compared to current liabilities.
5. 9igh current assets turnover ratio is more )udicious and shows efficiency of
management and proper utili&ation of the assets.
8. 6;M I3*0 #046,CT" 7IMIT,D has not a sufficient amount of working
capital during the past two years. s company is showing decreasing trend of
working capital! which shows that company! kept its obligation for long time and
less cash in hand to pay off its obligations.
@. Current ratio C5.@8F2D and Euick ratio C2.=?F2D of the year 5<25%28 are little bit
more than that of the ideal figures i.e. ideal current ratio is 5F2 while Euick ratio
is 2F2.
=. Inventory turnover ratio depicts the increasing trend which indicates the faster
sale of inventory which is good for the company.
>. Debtors Turnover ratio reveals an increasing trend during the period of study and
average collection period came down from >I to =5 days which shows that
company is having specific policy for debtorsA management.
?. The operating cycle of the firm is disturbed! as it is continuously increasing
which is not good for the company.
:. The optimum need for working capital on an average basis company roughly will
reEuire more than 2>5:.I5 Mn'0s. as its working capital.
S$&&estions- ;eeping in view of detailed analysis for the 8 years of study and findings
mentioned in above paragraphs! the following suggestions shall be helpful in increasing
the efficiency in working capital management.
2
2. In case of inventory management BC analysis! *"3 techniEue! /,D techniEue
should be adopted to increase the efficiency of inventory management. *urther a
inventory monitoring system should be introduced to avoid holding of e(cess
inventory.
5. It is suggested to maintain a favorable current and Euick ratios which shows a
lesser than ideal figures. It can be done either through increasing current assets
or decreasing liabilities.
8. With the help of proper inventory management systems! like demand%based
management! etc. the company can reduce the need for working capital and
inventories can be financed through accounts payable.
@. The company should try and maintain an optimum level of working capital in
order to improve upon the workings of the company.

5
LIMITATIONS
2. vailability of the financial data was very limited which is not disclosed due to
sensitive nature for the company.
5. The main component of working capital is cost of capital! which is not described
in the pro)ect because of confidential nature.
8. ,(ternal environment influence was not considered while doing the theoretical
standard rather than the industrial standard because of unavailability of any such
specific standard.
@. The scope of the study was limited to JKM INFRA PROJECTS LIMITED*

8
REFERENCES
nnual reports of 6;M Infra #ro)ects 7imited.
;han M.1! *inancial Management.
*inancial accounting! Weygandt! ;eiso! ;immel.
*undamental of financial management D. Chandra Bose
*inancial management! #aresh "hah
*inancial Management! ;han + 6ain % 5<22 ,dition
www.)kminfra.com
www.google.com

@
GLOSSARY
A.C Anal#sis- n approach of inventory management! which classifies inventories
according to their monetary values. Inventory items are thus categori&ed as CiD %
itemsF high value items for which careful management is neededK CiiD B%itemsF
moderate value items for which rules of thumb such as past inventory turnover are
adeEuate management techniEues! and CiiiD C%itemsF low value items which can be
maintained at a flat minimum amount.
Accr$ed Lia7ilit#- > lso known as outstanding liabilities or e(penses. *or
e(ample! accrued wages! accrued rent! accrued ta(es and accrued interest and so on.
They typically represent obligations for certain services for which payments are yet
to be made and are indirect sources of financing.
A&ein& Sc'ed$le- It is a tabular classification of receivables which showing the
length of time which the account has been outstanding.
An A&&ressi+e Polic#- It resorts to short%term liabilities to finance temporary and
also part or the entire permanent current assets reEuirement.
A+era&e Collection Period- ccounts receivables ' Cannual credit sales'8><D. ratio
that e(press how rapidly the firm is collecting its credit accounts.
.alanced Polic#- This policy is that balances the trade%off between risk and
profitability in a manner consistent with its attitude towards bearing risk.
.ills Pa#a7le- Bills #ayable is a current liability and arises when the bills written by
creditors are accepted by the firm.
Ca,ital Cost- The cost of the use of additional capital to support credit sales! which
alternatively could be profitably employed elsewhere is! therefore a part of the cost
of e(tending credit or receivables and are called capital costs.
Carr#in& Costs- These costs arise due to the storing of inventory and e(penses
made in raising funds to finance the acEuisition of inventory.
Cas' .$d&et- It is statement of the e(pected cash flows for a firm over a specified
period of time.
=
Cas' C#cle- This is length of the time between the purchase of raw materials and
collection of receivables in the sale of the final product.
Cas' Disco$nt- percent reduction in sales or purchase price allowed for early
payment of invoices. It is an incentive for credit customers to pay invoices in a
timely fashion.
Collection Cost- These costs are administrative costs or legal costs incurred in
collecting the receivables from the customers to whom credit sales have been made.
Conser+ati+e Polic#- conservative policy ignores the distinction between
temporary and permanent current assets! by financing almost all assets investments
with long term capital.
Cons$(er Credit- Credit granted to an individual is referred to as consumer credit.
Credit Period- It is total length of time period over which credit is e(tended to a
customer to pay bill.
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