ORGANISATION STUDY

CHAPTER 5
FINDINGS, SUGGESTIONS AND CONCLUSIONS

5.1 FINDINGS

1. The standard norm for the current ratio is 2:1.from the study it is inferred that the current
ratio of the firm is almost satisfying the standard norm and from the working capital ratio
itself we can find that the company’s working capital management is sufficient.

2. From the study it is inferred that the quick ratio of the company is fluctuating over the
years. The average current ratio is 1.10. So the company is satisfying the standard norm.

3. The average cash ratio is 0.06 during the study period which is also showing a fluctuating
trend, decline in the cash ratio is because of payment of credit and unavailability of cash
in hand.

4. The inventory turnover ratio is fluctuating over the year. The average ratio is 17.07.The
average inventory holding period is 21 days.

5. The debtor’s turnover ratio is varying over the study period. The average ratio is 4.53.The
average debtors collection period 779.47.

6. The creditor’s turnover ratio indicates that there are fluctuations over the years. The
lower ratio indicates that company enjoys a greater credit period to repay the liability.

7. The working capital turnover ratio indicates a fluctuating trend in the study period. In
2016-17 there is a increase in up to (4.53) ratio because of the increase in working capital
compared to net sales.

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8. Gross working capital ratio is fluctuating over the year. The average gross working
capital ratio is 0.53 this shows efficient usage of current asset for each rupee of sales.

9. The raw materials turnover shows a fluctuating trend. The average raw material turnover
ratio is 14.80.The raw material turnover ratios stability will help the organization to
manage the raw material in an effective manner.

10. The solvency position of the company is fluctuating over the year. The average solvency
ratio is 1.29. This means outside liabilities are increased.

11. Since the company is running under loss from 2015-2016 to 2016-2017 the ratio also
reflects a positive indication to the overall performance. in the current year the company
showing a positive performance then the previous year

12. The net profit of the company from 2015-2016 to 2016-2017 is in a very good figure.
The return on investment ratio is also indicating a good ratio. And in the current year in
the year the company making positive return

13. The fixed assets of the company from 2015-2016 to 2015-2016 is fluctuating. The FATR
ratio is also indicating a fluctuating tendency. In an increasing trend

14. The Operating cost of the company from 2015-2016 to 2016-2017 is Fluctuating. The
operating ratio is also indicating a fluctuating tendency in a balance trend.

15. From the above table one can easily identify that performance of the company shows a
positive trend from 2015-2016 to 2016-2017. It is mainly because of the balance sales
margin compared to high cost of production. But in the present working year the
company showing a positive performance which is more than the past year

16. The components of current assets are fluctuating throughout the period of study and

increasing at a good rate

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17. While comparing the components of current liability of the company shows gradual
fluctuations. Ii should affect the working capital of the company.

18. The forecasted value of working capital shows increasing value of a deficiency of
working capital. Due to increase in sale

19. The forecasted value of sales shows an increasing trend.

20. The forecasted value of profit shows an increasing trend.

21. The forecasted value of current asset shows an increasing trend.

22. The forecasted value of current liability shows an increasing trend. But in a balance rate

23. The correlation between sales and profit is 0.59 which is positive. Whenever there is an
increase in sales, it increases the profit of the company and vice versa.

24. The correlation between sales and current asset is 0.31.Hence, there is positive
relationship between sales and current asset. So when sales increases, the current asset
will also increase and vice-versa.

25. The correlation between working capital and current asset is 0.79. Hence, there is positive
relationship between working capital and current asset. So when current asset increases,
the working capitals will also increase and vice-versa.

26. The correlation between working capital and sales is 0.30 hence; there is positive

relationship between working capital and sales. So when sales increase, the working

capitals will also increase and vice-versa

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5.2 SUGGESTIONS

1. The amount of working capital of the company is increasing since 2015. So the company
should increase the current assets by increasing its cash and bank balance.

2. Inventory management of the company is very good. The raw materials and work-in-
progress inventory holding periods are minimum. Therefore it showing that the company
utilizing its raw material varies usefully and by this company can increase its current
assets.

3. The debtors of the company is increasing over the years, company should adopt a
competent credit policy to attract the customers. Increasing debtors is a solution to
overcome the liquidity problem.

4. Creditor’s turnover ratio shows that the payment period enjoyed by the company is high.
High creditor’s payment period will affect the regular supply of raw materials so
company can make necessary step to pay its creditors at a reasonable time period.

5. The company can reduce the cost of production and try to improve it profitability.

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5.3 CONCLUSION

The study was conducted to analyze the working capital management in ARVIND
PVT.LTD. The financial statements of the company was analyzed and interpreted. The analysis
and interpretation of data relating to working capital management of ARVIND helped the
researcher to reach a conclusion that working capital management efficiency of ARVIND is up
to the level. So the company can go in the same direction and take necessary steps to improve the
sale. It is high time for ARVIND to formulate certain policies to keep a well monitored its sale in
the competitive market for better profitability, reliability, consistency. If all the policies will
adopt by a company in a proper way and to utilize the resources effectively then it will sure that
the company will reach its zenith.

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5.4 BIBLIOGRAPHY

REFERENCES

REPORTS

 Annual reports of ARVINDPVT Ltd for the Year 2016-17 to 2015-17

.
BOOKS:

 Dr.S.N.Maheswari, Financial Management Principles and Practices, 10th Edition, Sultan

Chand & sons publishers New Delhi
 R.K.Sharma and S.K.Gupta, Management Accounting Principles & Practices, 8th Edition
Kalyani Publication
 C.R.Kothari, Research Methodology, 2nd Edition, New age International (P) Ltd
P.R.Vittal, Business Mathematics and Statistics, 6th Edition, Margham Publications,
Chennai

INTERNET SOURCES:

www.ARVIND.com

www.wikipedia.com

www.google.com

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