CHAPTER I

INTRODUCTION
In depth analysis tells that most in case research work is observed and focused mainly on two
aspects, working capital on profitability of firm and working capital management. The chief
issues with previous literature are lack of survey-based approach and lack of methodical theory
advance study, which gives direction and idea for future research. The proposed future research
direction is given in this project may help to develop a better understanding of determinants and
practices of working capital management on profitability of firm.
Working capital management plays an important role in financial management of the industry.
Numbers of researcher has been done the research on different components of working capital
and subjects on. And this is a part of my research work on the same title the working capital
management of selected automobile companies of India(TVS). The main aim of this Project is to
identify the gaps in current body of my research work which gives the direction towards forward
attention to be given.
Objective of the Study
 To study the working capital management of TVS motors.
 To identify & evaluate the working capital management of the TVS motors.
 To analysis working capital management by comparative statement and ratio analysis of
the organization.
 To find out & give suitable suggestions for TVS motors.
Period of the Study
The study has done for the period of four years from 2017 to 2018.
Research Methodology
Research design
 Diagnose research design use in this study.
 Using Secondary data
Tools adopted for Data analysis
 Comparative Analysis
 Ratio analysis

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 CHAPTER II
REVIEW OF LEITERATURE & CONCEPT
2.1 LITERATURE REVIEW ON WORKING CAPITAL MANAGEMENT.
ViraniVarsha (2008):- It was a comparative study in CADILA COMPANY This study has been
done with certain objectives first is to examine financial performance and second one is to
examine profitability trend and at the last to find out assets operational model and evaluate
liquidity position of the company. To achieve these goals used two classy analytical tools i.e.
ratio analysis and correlation analysis. The study shows relationship between different ratios.
That is also observed that correlation and coefficient is near about so there is a high degree of
negative and positive correlation between various ratios.
RamachandranAzhagaiah and JanakiramanMuralidharan (2009):- In this study author examine
the relationship among working capital management proficiency and earnings before interest and
tax. The study was made on Paper industry in India during 1997 to 2005. For the measurement of
working capital management three indexes are taken into consideration performance index,
utilization index and efficiency index, and EBIT of the selected companies for the study period
are taken. As a conclusion of the study says paper companies of india performed well during
period. Some having very good index and some of them need to improve the working capital
management give proper attention on that particular area also.
Kushwah, Mathur&Ball(2009):- The study undergone to evaluate the working capital
management and direction in selected five major cement companies i.e. ACC, Grasim, Ambuja,
Prism and Ultra- Tech.. For the research purpose secondary data are used like authors collected
the financial statement of selected cements companies for the years from 2007 to 2009. There is
liquidity ratios and activities ratios are used to analyse the condition of working capital of the
companies. The study revealed the truth of study is that, most companies not maintain their
working capital in a systematic way while overall ACC shows appropriate management of
working capital.
Rao and Rao&Ramachandran (2010):- Main aim of his study is to evaluate the trends and
parameters of effectiveness of working capital and its utilization in terms of volume of the firms
of cotton textiles industry in India. For that three parameters are taken i.e. different indices first
one performance Index, utilization index and efficiency Index. For the study industry is divided
in three category means small, medium and large. The output of the study is like that linear

2
growth rate model is used to find out the significance with working capital and PI,UI and EI are
significant in respect of small size companies while in medium size only UI is significant. On an
average we can say that working capital efficiency was not so satisfied despite having PI in
growth mode. The reason behind is that continuous factors are declining.
Rahman Mohammad M. (2011):- Research is based on correlation among working capital and
profitability. To analyze the effectiveness of working capital management of the selected textile
companies.conclusion of the study found that overall good management in working capital
management of selected textile companies and thus most of the companies are profitable way
going on.
Dr Arbab Ahmed and Dr Matarneh Bashar (2011):- Research carried with registration
technique which is very powerful statistical tool to forecast the working capital. the area of
working capital management, that is possible to make the projection after starting the average
relationship in the past. For the purpose different components are used and to be finalized result.
And it is presented in diagrammatic way as well mathematical way.
Dr KaddumiThair A. and Dr Ramadan Imad Z. (2012):- The evaluation was made in 49
jordanian companies they are listed in Amman Stock Exchange, The carried with topic like
effect of working capital management on the profitability in a targeted companies for the period
2005 to 2009. This goal could be achieved with help of two different measures one is for
profitability and another one is for performance of working capital management i.e. proxy and
five proxies use full for respective goal. For the estimation two regression models fixed effects
model and ordinary least model are used.
Kaur Harsh V. and Singh Sukhdev (2013):- This article focuses on cash conversion efficiency
and setting up the operating cycle days. The study tests the relationship between the working
capital attain and profitability calculated by income to current assets and income to average total
assets. Authors did study with companies listed in BSE 200 that is spread over 19 industries for
the period 2000 to 2010.At the end, the study lay emphasis on that proficient management of
working capital notably affects profitability.
Madhavi K. (2014):- She has done research based on empirical study of co relation among
liquidity position an profitability of the paper mills in Andhra Pradesh. That has been evaluated
ineffective working capital negatively effect on profitability of the paper mills.

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Gurumurthy N. and Reddy Jayachandra K. (2014):- He has conducted serve and observed
working capital management position in four pharmaceutical companies APSPDCL, APEPDCL,
APNPDCL and APCPDCL and come out with fact that working capital management was not so
good in position and need to do beteer.

2.2 Concept of Working Capital Management

Introduction to Working-Capital Management
The management and control of working capital is of vital importance to companies and forms a
major workload function of the finance manager and accountant. By working capital, the
commonly accepted descriptive term for these resources, we mean the company’s investment in
short-term assets; traditionally these relate to items coming under the balance-sheet heading of
current assets (in practice, of course, all capital is working, whether invested in fixed or current
assets). Thus inventories (stocks), accounts receivable (debtors), short-term investments and cash
balances all come within the term working capital. (The words in brackets represent alternative
descriptions of the asset; throughout this book these terms are used synonymously.) Apart from
the efficient operation and control of these assets, the finance manager will also be concerned
with their financing. In this the finance manager will be faced with numerous alternative sources,
both short-term and long-term. Short-term financing is generally shown under the heading of
current liabilities and includes items such as bank overdrafts and credit received from suppliers.
The efficient financing of current assets by short-term liabilities also comes within the scope of
working-capital management and is therefore included in the text.

Components of Working Capital:

(A) Current Assets:

These assets are generally realized within a short period of time, i.e. within one year.

Current assets include:

(a) Inventories or Stocks

(i) Raw materials

(ii) Work in progress

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(iii) Consumable Stores

(iv) Finished goods

(b) Sundry Debtors

Current liabilities are those which are generally paid in the ordinary course of business within a
short period of time, i.e. one year.

Current liabilities include:

(a) Sundry Creditors

(b) Bills Payable

(c) Accrued Expenses

(d) Bank Overdrafts

(e) Bank Loans (short-term)

(f) Proposed Dividends

(g) Short-term Loans

Meaning Working Capital Management

Working capital management (WCM) is defined as the management of short-term liabilities and
short-term assets. The process is used continuously to operate and generate cash flow to meet the
need for short-term obligations and daily operational expenses.
Nature of Working Capital:
The nature of working capital is as discussed below:
i. It is used for purchase of raw materials, payment of wages and expenses.
ii. It changes form constantly to keep the wheels of business moving.
iii. Working capital enhances liquidity, solvency, creditworthiness and reputation of the
enterprise.
iv. It generates the elements of cost namely: Materials, wages and expenses.
v. It enables the enterprise to avail the cash discount facilities offered by its suppliers.
vi. It helps improve the morale of business executives and their efficiency reaches at the highest
climax.

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vii. It facilitates expansion programmes of the enterprise and helps in maintaining operational
efficiency of fixed assets.
Need for Working Capital:
Working capital plays a vital role in business. This capital remains blocked in raw materials,
work in progress, finished products and with customers.
The needs for working capital are as given below:
i. Adequate working capital is needed to maintain a regular supply of raw materials, which in
turn facilitates smoother running of production process.
ii. Working capital ensures the regular and timely payment of wages and salaries, thereby
improving the morale and efficiency of employees.
iii. Working capital is needed for the efficient use of fixed assets.
iv. In order to enhance goodwill a healthy level of working capital is needed. It is necessary to
build a good reputation and to make payments to creditors in time.
v. Working capital helps avoid the possibility of under-capitalization.
vi. It is needed to pick up stock of raw materials even during economic depression.
Importance of Working Capital:
It is said that working capital is the lifeblood of a business. Every business needs funds in order
to run its day-to-day activities.
The importance of working capital can be better understood by the following:
i. It helps measure profitability of an enterprise. In its absence, there would be neither production
nor profit.
ii. Without adequate working capital an entity cannot meet its short-term liabilities in time.
iii. A firm having a healthy working capital position can get loans easily from the market due to
its high reputation or goodwill.
iv. Sufficient working capital helps maintain an uninterrupted flow of production by supplying
raw materials and payment of wages.
v. Sound working capital helps maintain optimum level of investment in current assets.

Classification of Working Capital:

Working capital may be of different types as follows:
(a) Gross Working Capital:

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Gross working capital refers to the amount of funds invested in various components of current
assets. It consists of raw materials, work in progress, debtors, finished goods, etc.
Gross working capital = Stock + Debtors + Receivables + Cash.
(b) Net Working Capital:
The excess of current assets over current liabilities is known as Net working capital. The
principal objective here is to learn the composition and magnitude of current assets required to
meet current liabilities.
Net Working Capital = Stock + Debtors + Receivables + Cash – Creditors – Payables.
(c) Positive Working Capital:
This refers to the surplus of current assets over current liabilities.
Working Capital = Current Assets – Current Liabilities
A Ltd : Rs. 8,000 – Rs. 6,000 = (+) Rs. 2,000
(d) Negative Working Capital:
Negative working capital refers to the excess of current liabilities over current assets.
Working Capital = Current Assets – Current Liabilities
B Ltd : Rs. 8,000 – Rs. 10,000 = (-) Rs. 2,000
(e) Zero Working Capital:
If the current assets are equal to current liabilities, it is called zero or nil working capital.
Working Capital = Current Assets – Current Liabilities
C Ltd : Rs. 8,000 – Rs. 10,000 = (-) Rs. 2,000
(f) Permanent Working Capital:
The minimum amount of working capital which even required during the dullest season of the
year is known as Permanent working capital.
(g) Temporary or Variable Working Capital:
It represents the additional current assets required at different times during the operating year to
meet additional inventory, extra cash, etc.
It can be said that Permanent working capital represents minimum amount of the current assets
required throughout the year for normal production whereas Temporary working capital is the
additional capital required at different time of the year to finance the fluctuations in production
due to seasonal change.

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The advantages of having adequate working capital may be summarised:
1.Smooth Flow of Production:
To maintain a smooth flow of production, it is necessary that adequate working capital is
available for paying trade suppliers, hiring labour and incurring other operating expenses.
2. Increase in Liquidity and Solvency Position:
It enhances the liquidity and solvency position of the business concern.
3. Goodwill:
A firm with sound working capital position can make timely payment of its outstanding bills.
This enhances the reputation of the firm.
4. Advantages of Cash Discount:
It enables the firm to avail itself of the facilities like cash discount by making prompt payments.
5. Easy Loan:
Adequate amount of working capital builds a sound credit-worthiness of the firm. As a result it
becomes easier for the firm to obtain additional loans in favourable terms and conditions in order
to meet seasonal increase in demand or to finance the increased working capital resulting from
expansion.
6. Regular Payment of Wages and Salaries:
The firm can make regular and timely payment of wages and salaries to its employees. This
increases the morale and efficiency of employees.
7. Security and Confidence:
It creates a sense of security and confidence in the mind of management or officials of the firm.
8. Efficient Use of Fixed Assets:
Adequate amount of working capital enables the firm to use its fixed assets more efficiently and
extensively. If the fixed assets remain idle due to paucity of working capital, depreciation of
fixed assets and interest on borrowed capital invested in fixed assets will have to be incurred
unnecessarily.
9. Meeting of Contingencies:
It can meet unforeseen contingencies of the firm. Unforeseen contingencies like business
depression, financial crisis due to huge losses etc. can easily be overcome, if adequate working
capital is maintained by a firm.

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10. Completing operating cycle:
A sound management of working capital helps in completing the operating cycle quickly. This
enables a firm to increase its profitability.
11. Timely Payment of Dividend:
Adequate working capital ensures regular payment of dividends to the shareholders
Different Sources of Working Capital:
A firm can use two types of sources to finance its working capital, namely:
(i) Long-term source, and
(ii) Short-term source.
(i) Long-Term Sources:
Every business organisation is required to maintain a minimum balance of cash and other current
assets at all the times—irrespective of the ups and downs in the level of activity. The portion of
working capital which is continuously maintained by the business at all times to carry on its
minimum level of activities is called permanent working capital.
This type of working capital should be arranged from long-term sources of fund.
The factors are to be considered in determining the working capital requirement of a firm:
1. Nature of Business:
The working capital requirements of a firm are widely influenced by the nature of business.
Public utilities like bus service, railways, water supply etc. have the lowest requirements for
working capital—partly because of the cash nature of their business and partly because of their
rendering service rather than manufacturing product and there is no need of maintaining any
inventory or book debt except capital assets.
On the contrary, trading concerns are required to maintain more working capital because they
have to carry stock-in-trade, receivables and liquid cash. Manufacturing concerns also require
large amount of working capital because of the time lag involved in the conversion of raw
materials into finished products and, finally, into cash.
2. Size of the Business:
The amount of working capital requirement also depends upon the size of the business. The size
can be measured in terms of the scale of operations. A large firm with a high scale of operation
will require to maintain a large amount of working capital than a firm with a small scale of
operation.

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3. Production Cycle:
Production cycle is the time involved in manufacturing or processing a product. It starts when
raw materials are put in the production process and ends with the completion of manufacturing
of the product. Longer the production cycle, higher is the need of working capital.
This is because funds remain blocked in work-in-progress for long periods of time. For example,
the working capital needs of a ship-building industry will be much longer than those of a bakery.
4. Business Cycle:
The working capital requirements are also determined by the nature of the business cycle. During
the boom period, the need for working capital will increase to meet the requirements of increased
production and sales. On the other hand, in a slack period, the reduced volume of operation will
require relatively lower amount of working capital.
5. Credit terms of Purchase and Sale:
The period of credit given by the suppliers and the period of credit granted to the customers will
affect the working capital needs of a firm. If a firm allows a very short credit period, cash will be
realised very soon from debtors. So the need for the working capital will be less.
On the other hand, a liberal credit policy will result in higher amount of book debts. Higher book
debts will mean more working capital requirement. If the firm has to purchase raw materials in
cash or gets credit for shorter period, it has to arrange for relatively higher amount of working
capital.
6. Seasonal Variations:
There are industries like cold drinks, ice-cream and woolen where the goods are either produced
or sold seasonally. So, in such industries, working capital requirements during production or sale
seasons will be large and these will start decreasing when the season starts coming-to end.
However, much depends on the policy of management with regard to production or sale of
goods. For example, the management of a woolen industry wants to carry on production evenly
throughout the year rather than concentrating on its production only in the busy season. In that
case the working capital requirements will be low.
7. Operating Efficiency:
If the operating efficiency of a firm is very high, the resources will be properly utilised. As a
result, it improves the profitability of the firm which ultimately, helps in releasing the pressure of

10
working capital. On other hand, inefficiency compels the firm to maintain relatively a high level
of working capital.
8. Price level changes:
If prices of input rise, the firm requires additional working capital to maintain the same level of
production.
9. Growth and Expansion of the Business:
Every concern wants to grow over a period of time and with the increase in its size, so the
working capital requirements are bound to increase. A growing firm would require greater
working capital than a static one.
10. Profitability and Retention Money:
The net profit earned by the firm goes to increase the working capital to the extent it has been
earned in cash. The cash profit can be found by adjusting non-cash items such as depreciation,
outstanding expenses and losses or intangible assets written-off in the net profit.
But what portion of this profit will be reinvested as working capital will depend upon the
retention policy of a firm which is, again influenced by corporate tax structure and dividend
policy. So, if the amount of retained profit is not immediately invested outside the business, it
would increase the amount of working capital.
11. Relationship of Material Cost to Total Cost:
In manufacturing concerns, where raw material costs bear a large proportion to the total cost of
production, a greater amount of working capital will have to be maintained. For example, in
industries like textile and electronics, large sums are required to maintain the inventory of such
raw materials.
12. Turnover of Current Assets:
The speed with which the current assets revolve around also affects working capital requirements
of a firm. In few cases like vegetables or fruit shops, stocks get sold very quickly and, for this
reason, a little or no working capital is required in carrying over the stock.

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 CHAPTER III
PROFILE OF THE STUDY AREA
TVS MOTOR COMPANY
1. TVS IN BRIEF
2. Overview
3. TVS Motor Company is the third largest two-wheeler manufacturer in India, with a revenue
of 15129 Cr INR (2017-18). The company has an annual production capacity of 4 million 2
wheelers & 120,000 3 wheelers.
4. TVS Group spans across industries like Automobile, Aviation, Education, Electronics,
Energy, Finance, Housing, Insurance, Investment, Logistics, Service and Textiles.
5. Has over 90 Companies under the umbrella.
6. TVS Group turnover including all key subsidiaries and associates is Rs. 59400 Cr for FY
2017-18, approximately USD 8.5 Billion
A Vehicle for Everyone
TVS Motor currently manufactures a wide range of two-wheelers. Take your pick from
mopeds to racing inspired motorcycles.
Manufacturing Locations
The company has four manufacturing plants, three located in India (Hosur in Tamil Nadu,
Mysore in Karnataka and Nalagarh in Himachal Pradesh) and one in Indonesia at Karawang.
Innovation at the Helm
TVS Motor's strength lies in design and development of new products. We at TVS deliver total
customer satisfaction by anticipating customer need and presenting quality vehicles at the right
time and at the right price. The customer and his ever changing need is our continuous source of
inspiration. We have proved time and again that this sense of responsiveness along with a
penchant for quality is a winning formula. The company has many firsts to its credit including
the fact that we launched seven vehicles on the same day - a rare feat in Auto motive history.
Inspiring Millions of Smiles
TVS has always stood for innovative, easy-to-handle, and environment-friendly products, backed
by reliable customer service.
More than 33.5 million customers have bought a TVS product to date. TVS products give you
only reasons to smile!

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TVS Motor Company - Mission
We are committed to being a highly profitable, socially responsible, and leading manufacturer of
high value for money, environmentally friendly, lifetime personal transportation products under
the TVS brand, for customers predominantly in Asian markets and to provide fulfillment and
prosperity for employees, dealers, and suppliers
Vision Statement
Driven by the customer
TVS Motor will be responsive to customer requirements consonant with its core competence and
profitability. TVS Motor will provide total customer satisfaction by giving the customer the right
product, at the right price, at the right time.
The Industry Leader
TVS Motor will be one among the top two two-wheeler manufacturers in India and one among
the top five two-wheeler manufacturers in Asia.
Global overview
TVS Motor will have profitable operations overseas especially in Asian markets, capitalizing on
the expertise developed in the areas of manufacturing, technology and marketing. The thrust will
be to achieve a significant share for international business in the total turnover.
At the cutting edge
TVS Motor will hone and sustain its cutting edge of technology by constant benchmarking
against international leaders
.
Committed to Total Quality
TVS Motor is committed to achieving a self-reviewing organization in perpetuity by adopting
TQM as a way of life. TVS Motor believes in the importance of the process. People and projects
will be evaluated both by their end results and the process adopted.
The Human Factor
TVS Motor believes that people make an organization and that its well-being is dependent on the
commitment and growth of its people. There will be a sustained effort through systematic
training and planning career growth to develop employees' talents and enhance job satisfaction.
TVS Motor will create an enabling ambience where the maximum self-actualisation of every

13
employee is achieved. TVS Motor will support and encourage the process of self-renewal in all
its employees and nurture their sense of self-worth.
Responsible Corporate Citizen
TVS Motor firmly believes in the integration of Safety, Health and Environmental aspects with
all business activities and ensures the protection of employees and environment including
development of surrounding communities. TVS Motor strives for long-term relationships of
mutual trust and interdependence with its customers, employees, dealers, and suppliers.

LEADERSHIP
Innovation in Motion
We have always been at the forefront of bringing new and relevant technology. We stay ahead of
the curve when it comes to meeting customer expectations.
All our technological innovations are attributed to meeting customer expectations from our
constant interactions with them. That's where the story begins.
Back at our R & D lab, a small idea gets transformed into a machine - one that will completely
fulfill the needs of the market/customer and that is sure to exceed expectations.
While the primary focus is on superior handling and experience, we also keep in mind the style
and other aspects that make our Vehicles one of a kind/feature rich.
Eco Leadership
Green Bikes. Greener Tomorrow.
Technological Innovations must support growing concerns on global warming and pollution. At
TVS Motor, we have always been the pioneers in bringing Cleaner Greener technology to two-
wheelers. TVS Motor Company was the first to use a catalytic converter in its bike, in India way
back in 1996 - the TVS Shogun.
All our vehicles are 85% recyclable. Our vehicles comply with world standards of recyclability.
This is of utmost importance in a scenario where countries like Japan and Germany have laws on
the recyclability of the vehicle.
Heritage
A Century of Quality & Trust

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 The TVS group, right from its inception, believed in its destiny of growth, success, and
longevity. The method and integrity of conducting business is what sets TVS apart from the
rest.
The company was born in 1911, thanks to the ambitious dreams of the founding father, T V
Sundaram Iyengar, who refused to settle managing smaller businesses like bus fleet operations or
vehicle servicing. He wanted to build a business that would create a family of like-minded
individuals pursuing only the best in quality and standards. And he made his dreams a reality.
The success of the TVS group is rooted in their founder's personal belief system - a commitment
to the values of trust and customer service. Although the company is named after the founder, the
letters TVS have always stood for Trust, Value, and Service within the company.
This remains the guiding, overarching philosophy by which the group functions. It was only
natural that success and market leadership followed. Today, the TVS Group is one of India's
leading suppliers of automotive components, with over 90 Companies under its umbrella and a
revenue of around INR. 59400 Cr in 2017-18. The first four companies in India to have won the
coveted Deming Prize are from the TVS Group.
Milestones
 2017 – 2018Celebrating 35 years of TVS Racing, 2018 witnessed the launch of the
TVS Apache RR310. This motorcycle has been born out TVS Racing’s 35 year
heritage in the Racing world.
 2018 was special for TVS Motor Company as we launched TVS Ntorq 125, India’s
first scooter with Bluetooth and smart connectivity.
 Sherco TVS Factory Rally Team achieved the best ever finish at Dakar Rally 2018
in 11th position.
Innovations
The art of delivering innovative technology at a great value - where style and technology
meet to create fuel-efficient vehicles that also deliver better environment performance -
that is Innovation to us. Our R&D team is a group of well-qualified engineers who work
diligently to provide worthy solutions for present-day challenges.
Manufacturing Excellence
 Driven by the Five Pillars of TQM

15
 The management philosophy is based on Five Pillars of TQM (Total Quality Management) -
Management Commitment, Customer Focus, Quality Costs, Quality Systems and Continuous
Improvement - which rests on the foundation of the Total Employee Involvement Program, Daily
Management and Kaizen.

 The Total Employee Involvement Program:

The Total Employee Involvement Program ensures that responsibility for the company's
performance is the shared responsibility of employees at all levels. It provides the employees
with the opportunity to be involved in breakthrough activities and other improvements, over and
above their daily routine.
 Daily Work Management:
Daily work management consists of defining and monitoring key processes, ensuring that they
meet set targets, detecting abnormalities and preventing their recurrence. TVS Motor encourages
continuous improvement in all aspects of work, using Cross Functional Teams (CFT),
Supervisory Improvement Teams (SIT) Quality Control Circles (QCC) and suggestion schemes.
 What about Kaizen?
The five pillars start with policy management, which is used to arrive at the annual breakthrough
objectives. There are generally not more than three company objectives, arrived at after a
detailed exercise, which are deployed and reviewed periodically.
The company conducts an exhaustive range of training programs, utilising both in-house skills
and consultants from all over the world. The programs are conducted for employees across levels
Awards
CII ITC Sustainability Awards 2012
TVS Motor Company Ltd is a winner of the CII ITC Sustainability Awards, 2012, Certificate of
Commendation for Significant Achievement.
Exports
TVS Motor Company has been awarded 'Star Performer - Silver Shield' in two/three wheeler
category, by EEPC India, for excellent export performance for the year 2007-08.

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 CHAPTER IV
DATA ANALYSIS & INTERPRETATION
Table 4.1
COMPARATIVE WORKING CAPITAL FOR THE YEAR 2015-16

Particulars 15-Mar 16-Mar Increase/Decrease Change %

Current Liabilities
Short Term Liabilities 399.76 264.23 -135.53 -34%
Trade Payables 1263.82 1543.71 279.89 22%
Other Current Liabilities 474.77 449.47 -25.3 -5%
Short Term Provisions 105.03 58.47 -46.56 -44%
Total Current Liabilities 2243.38 2315.88 72.5 3%
Current Assets
Inventories 819.68 696.33 -123.35 -15%
Trade Receivables 503.86 578.03 74.17 15%
Cash And Cash Equivalents 5.39 32.74 27.35 507%
Short Term Loans And
632.78 0 -632.78 -100%
Advances
Other Current Assets 67.31 579.27 511.96 761%
Total Current Assets 2029.02 1886.37 -142.65 -7%
Working Capital -214.36 -429.51 -215.15 -100%

Interpretation
From the about table it is find that, maximum current liabilities decrease in short term
provision (-44%) & maximum current liabilities increase in trade payable (22%).
Maximum current assets decrease in short term loans and advances (-100%) maximum
current asset increase in other current assets (761%).
It leads to -100% of decrease in working capital for the year 15-16.

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 Table 4.2
COMPARATIVE WORKING CAPITAL FOR THE YEAR 2016-17

Particulars 16-Mar 17-Mar Increase/Decrease Change %

Current Liabilities
Short Term Liabilities 264.23 616.38 352.15 133%
Trade Payables 1543.71 1859.36 315.65 20%
Trade Payables 449.47 312.47 -137 -30%
Short Term Provisions 58.47 62.87 4.4 8%
Total Current Liabilities 2315.88 2851.08 535.2 23%
Current Assets
Inventories 696.33 966.95 270.62 39%
Trade Receivables 578.03 723.77 145.74 25%
Cash And Cash Equivalents 32.74 8.51 -24.23 -74%
Short Term Loans And
0 0 0 0%
Advances
Other Current Assets 579.27 487.66 -91.61 -16%
Total Current Assets 1886.37 2186.89 300.52 16%
Working Capital -429.51 -664.19 -234.68 -55%

Interpretation
From the about table it is find that, maximum current liabilities decrease in trade payables
(-30%) & maximum current liabilities increase in short term liabilities (133%).
Maximum current assets decrease in cash and cash equivalents (-74%) maximum current
assets increase in (39%).
It leads to -55% of decrease in working capital for the year 16-17.

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 Table 4.3
COMPARATIVE WORKING CAPITAL FOR THE YEAR 2017-18

Particulars 17-Mar 18-Mar Increase/Decrease Change %

Current Liabilities
Short Term Liabilities 616.38 719.35 102.97 17%
Trade Payables 1859.36 2517.99 658.63 35%
Other Current Liabilities 312.47 480.14 167.67 54%
Short Term Provisions 62.87 62.02 -0.85 -1%
Total Current Liabilities 2851.08 3779.5 928.42 33%
Current Assets
Inventories 966.95 964.39 -2.56 0%
Trade Receivables 723.77 968.37 244.6 34%
Cash And Cash Equivalents 8.51 10.9 2.39 28%
Short Term Loans And Advances 0 0 0 0%
Short Term Loans And Advances 487.66 634.45 146.79 30%
Total Current Assets 2186.89 2578.11 391.22 18%
WCM3 -664.19 -1201.39 -537.2 -81%

Interpretation
From the about it is find that, maximum current liabilities decrease in short term provisions
(1%) maximum current liabilities increase in other current liabilities (54%).
No current assets decrease and maximum current assets increase in trade receivables (34%).
It leads to -81% decreases in working capital for the year 17-18.

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 Table 4.4
COMPARATIVE WORKING CAPITAL FOR THE YEAR 2018-19

Particulars 18-Mar 19-Mar Increase/Decrease Change %

Current Liabilities
Short Term Liabilities 719.35 668.82 -50.53 -7%
Trade Payables 2517.99 2923.9 405.91 16%
Other Current Liabilities 480.14 389.31 -90.83 -19%
Short Term Provisions 62.02 59.65 -2.37 -4%
Total Current Liabilities 3779.5 4041.68 262.18 7%
Current Assets
Inventories 964.39 1175.94 211.55 22%
Trade Receivables 968.37 1414.14 445.77 46%
Cash And Cash Equivalents 10.9 43.86 32.96 302%
Short Term Loans And
0 0 0 0%
Advances
Short Term Loans And
634.45 520.96 -113.49 -18%
Advances
Total Current Assets 2578.11 3154.9 576.79 22%
WCM4 -1201.39 -886.78 314.61 26%

Interpretation
From the about table it is find that, maximum current liabilities decrease in other current
liabilities (-19%) & maximum current liabilities increase in trade payables (16%).
Maximum current assets decrease in short term loans and advances (-18%) maximum current
assets increase in cash and cash equivalents(-53%).
It leads to 26% increase in working capital for the year 18-19.

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 Table 4.5
CURRENT ASSET RATIO
Year Current Assets Current Liabilities Ratio
2015 2029.02 2243.38 0.90
2016 1886.37 2315.88 0.81
2017 2186.89 2851.08 0.77
2018 2578.11 3779.5 0.68
2019 3154.9 4041.68 0.78

Interpretation
From the about table it is find that, for the year 2015 current ratio is 0.90, for the year 2016
current ratio is 0.81, for the year 2017 current ratio is 0.77, for the year 2018 current ratio is 0.68
and for the year 2019 current ratio is 0.78.
Chart 4.2
CURRENT ASSET RATIO

Ratio
1
0.9
0.8
0.7
2015
0.6
2016
0.5
2017
0.4
2018
0.3
2019
0.2
0.1
0
2015 2016 2017 2018 2019

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 Table 4.6
NET PROFIT RATIO
Year Net Profit Sales Ratio
15-Mar 347.83 10632.21 3%
16-Mar 489.28 11953.3 4%
17-Mar 558.08 13063.82 4%
18-Mar 662.59 15310 4%
19-Mar 670.14 17912.51 4%

Interpretation
From the about it is find that, for the year 2015 net profit ratio (3%), for the year 2016 net
profit ratio (4%), for the year 2017 net profit ratio (4%), for the year 2018 net profit ratio (4%)
and for the year 2019 net profit ratio (4%).

Chart 4.2
NET PROFIT RATIO

Ratio
5%

4%

4%

3% 2015
3% 2016

2% 2017
2018
2%
2019
1%

1%

0%
2015 2016 2017 2018 2019

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 CHAPTER V
FINDINGS, SUGGESTIONS AND CONCLUSION
Findings
 100% of decrease in working capital for the year 15-16.
 55% of decrease in working capital for the year 16-17.
 81% of decrease in working capital for the year 17-18.
 26% of increase in working capital for the year 18-19.
 From the year 2015 to 2018 current ratio was decreasing trend and last year increasing
trend.
 The net profit ratio was 4% for last 4 years it clear sales and profit are identical grown-
up.

Suggestions
 Based on the increase of sales the working capital also increases. The sales and
working capital identical grown-up help to grow the net profit with sales increases.

Conclusion
Most of the existing studies reveal with different measurement technique to analyze the financial
performance is yet to develop. With this view the present study has been analyzed. The different
researchers have been done the research with different industry as well different tools techniques
and with different factors which are related with working capital management and profitability of
the corporate area. This study proved that the automobile company will mostly influence
profitability by the working capital.

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