SYNOPSIS

ON

“ASTUDY ON WORKING CAPITAL

MANAGEMENT AT SUNFLAG IRON & STEEL
CO.LTD. BHANDARA”

SUBMITTED TO

R.T.M.Nagpur University , NAgpur

FOR

Management Programme [ BBA ]

Specialization : Financial Management

Submitted by

Mr. Aditya Joshi

Supervisor
Dr. Prashant A. Manusmare
TITLE :A STUDY ON WORKING CAPITAL MANAGEMENT
AT SUNFLAG IRON & STEEL CO.LTD. BHANDARA

INTRODUCTION TO TOPIC

Working Capital is a financial metric which represents operating liquidity available to a

business,organization or other entity,including government entity. Along with Fixed assets
working capital is considered a part of operating capital. Net working capital is calculated as
Current assets minus Current liabilities.If Current assets are less than current liabilities ,an
entity has working capital deficiency,also called working capital deficit.A company can be
endowed with assets and profitability but short of liquidity if assets cannot readily be
converted into cash. Positive working capital is required to ensure that a firm is able to
continue its operations and that it has sufficient funds to satisfy both maturing short-term debt
and upcoming operational expenses. The management of working capital involves managing
inventories, account receivable and payable and cash.

Working Capital Management :

Decisions relating to working capital and short term financing are reffered to as working
capital management. The goal of working capital management is to ensure that the firm is
able to continue its operations and that it has sufficient cash flow to satisfy both maturing
short-term debt and upcoming operational expenses.

Problem Statement

Working capital management or simply management of capital invested in current asset is the
focus of the study.So the topic is to study working capital management of Sunflag Iron &
Steel Co. Ltd, Bhandara.In cut throat competition where each firm competes with each other
to increase their production and sales, holding of sufficient current assets have become
mandatory for smooth production runs. Holding of sufficient current assets will ensure
smooth and uninterrupted production but at the same time it will consume a lot of working
capital. Here creeps the importance and need of efficient working capital
management.working capital management aims at managing capital assets at optimum level,
the level at which it will aid smooth running of production and it will involve investment of
nominal working capital in capital assets.

Company Profile :

Since inception Sunflag has firmly believed that geographical boundaries do not limit
the growth of human progress. In furthering its commitment to narrow the gap between
developed and the developing countries, Sunflag has succeeded in transplanting advanced
technologies into third world nations.
Sunflag's activities range from making artificial leather, synthetic fibres, spinning,
weaving, manufacturing of sophisticated garments to agriculture and agro based industries.
With a pragmatic investment policy, professional management and a commitment to maintain
the highest standards of business ethics, Sunflag looks forward to playing an ever-increasing
role in enriching the industrial environment of the countries with which Sunflag's destiny is so
closely entwined.
Sunflag Iron and Steel Co. Ltd. is a prestigious unit of the SUN FLAG GROUP. It has
set up a state-of-art integrated plant at Bhandara,IndiaThe plant has a capacity to produce
200,000 tonnes per annum of high quality special steel using iron ore and non coking coal as
basic inputs.

The plant comprises a 1,50,000tonnes per annum Direct Reduction Plant, to produce
sponge iron for captive consumption in the Steel Melting Shop. This shop comprises a 50/60
tonnesultra high power Electric Are Furnace with Eccentric bottom arrangement; a Ladle auto
mould level controller and electromagnetic stirrer. The billets produced at the steel melting
shop are rolled at the Mannesmann Demag Designed ultra modern 18 stand
Continousmill.This mill has a walking hearth reheating furnace, quick roll-changing facilities,
a 65metres long walk and wait type modern cooling bed and above all computerised process
control linking and controlling the various stages.
Rationale of Study
At Sunflag Iron & steel Co. Ltd , a substantial part of total assets are covered by current
assets. Current assets around 30% -50% of total assets. However this could be less profitable
on the assumption that current assets generate lesser return than fixed assets.In cut throat
competition where each firm competes with each other to increase their production and sales,
holding of sufficient current assets have become mandatory for smooth production runs.
Holding of sufficient current assets will ensure smooth and uninterrupted production but at the
same time it will consume a lot of working capital.

The study of working capital management is very helpful for the organization to know its
liquidity position. The study is relevant to the organization to know the day to day
expenditure.This study is relevant to give an idea to utilize the current assets.This study is also
relevant to the further researcher in conducting research.

Scope of the Study :

The study of working capital management is mostly based on secondary data and all the
information is available within the company itself from the records. To get proper
understanding of this concept, I have done the study of Balance Sheets, Profit & Loss
Acccounts, trail balance and cost sheets. So, scope of the study is limited upto the availability
of official records and information provided by the employees. This study is supposed to be
related to the period of last three years.
OBJECTIVES OF THE STUDY
Everything in life holds some kinds of objectives to be fulfilled. The following are few
straight forward goals which tried to be fulfilled in my project.

1. To Study various concepts of working capital

2. To analyse the liquidity trend

3. To analyse the working capital trend.

4. To appraise the utilization of current assets and current liabilities and find out short

comings if any

5. To suggest measure for effective management of working capital.

Hypothesis of the Study :

The following are the hypothesis of the study

1. The firm isfacing difficulty in paying short-term debt

2. The firm is not properly managing the sundry debtors

3. The current liabilities are increasing than current assets year by year
RESEARCH METHODOLOGY
Research methodology in a way is a written game plan for conducting research. Research
methodology has many dimensions. It includes not only the research methods but also
considers the logic behind the methods used in the context of the study and complains why
only a particular method of technique has been used. The basic task of research is to generate
accurate information for use in decision making. Research can be defined as the systematic
and objective process of gathering, recording and analyzing data for aid in making business
decisions.As the project involves analyzing of financial structure, the research is exploratory
in nature, covering financial parameters and come of the important ratios to carry out
research.

Time Period of the Study :

The study will undertaken for Six Months.

Data Source and Collection Method :

There are two types of data

1. Primary Data
2. Secondary Data

Secondary Data Collection :

The secondary data are those which have already collected and stored. Secondary data
easily get from records, journals ,annual reports of the company.It saves time.money and
efforts.The project mostly based on secondary data collected through annual reports of
the company.The data collection is aimed at study of working capital management of the
company.

Project will based on

1. Annual Report of Sunflag Iron & Steel Co.Ltd., Bhandara -2015-16

2. Annual Report of Sunflag Iron & Steel Co.Ltd., Bhandara -2016-17
3. Annual Report of Sunflag Iron & Steel Co.Ltd., Bhandara -2017-18
 Selection of Location for the study : The location for study is selected as the corporate
office of Sunflag Iron & Steel Co. Ltd.

Research Design :

Descriptive research also known as statistical research describes data and characteristics
about the population or phenomenon being studied. Descriptive research answers the
questions who, what when and how…

Statistical tools for Analysis :

The various Statistical tools for Analysis is as follows-

a) Tables
b) Barcharts
c) Graphs

Analytical Tools :

a) Ratio Analysis
b) Schedule of changes in working capital
c) Cash flow statements
Limitations

 The topic working capital management itself a very vast topic yet very important also.
Time will be the biggest constraint but all effort will be made to get all the relevant
information required for this study.
 Many facts and data are such that they are not to be disclosed because of confidential
nature.
 The study is restricted to only the three year data of Sunflag Iron & Steel Co. Ltd.

CHAPTERISATION:

Following are the Chapterisation of the study

Chapter 1 :INTRODUCTION

Chpter2 : Company profile

Chpter3 :Obectives of Study , Hypothesis & Limitation

Chapter 4 : Literature Review

Chapter 5 : Research Methodology

Chapter 6 : Data Collection & Analysis

Chapter 7 : Findings & Conclusion

Chapter 8 : Suggestions & Recommendations

RELEVENT BIBLOIGRAPHY/REFERENCES

Name of Book Author Publication

Financial Management I. M. Pandey HPH Pub.

Research Methodology Devendra Thakur Deep & deep

Financial Management Rastugi HPH Pub.

 www.google.com

o Magzines

o Articles

o Annual Reports

Mr. Ramakant A. Bawankule Dr. Prashant A. Manusmare

Researcher Supervisor/Guide
HOD
Deptt. of Management Science & Research
J.M.Patel College, Bhandara
 PROJECT REPORT
ON

“A
STUDY ON WORKING CAPITAL
MANAGEMENT AT SUNFLAG IRON & STEEL
CO.LTD. BHANDARA”

SUBMITTED TO
Mahatma Gandhi Antarashtriya Hindi VishwaVidyalaya
Wardha

FOR

Management Programme [ MBA ]

Specialization : Financial Management

Submitted by

Mr. Ramakant A. Bawankule

Enrollment No. 29001170006

Supervisor
Dr. Prashant A. Manusmare
HOD, Department of Management Science & Research
J.M.Patel College, Bhandara