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Study On Working Capital Management
Study On Working Capital Management
Funds are also needed for short term purposes for the
purchase of raw materials, payment of wages and other day-to-day expenses,
etc. These funds are known as working capital. In simple words, working
capital refers to that part of the firm’s capital which is required for financing
short term or current assets such as cash, marketable securities, debtors and
inventories. The working capital is also known as Revolving or Circulating
capital or short term capital.
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Solvency of business
Adequate working capital helps in maintaining solvency of the
business by providing uninterrupted flow of production.
Goodwill
Sufficient working capital enables a business concern to make
prompt payments and hence helps in creating and maintaining goodwill.
Easy loans
A concern having adequate working capital, high solvency and good
credit standing can arrange loans from banks and others on easy and
favorable terms.
Cash discounts
Adequate working capital also enables a concern to avail cash
discounts on the purchases and hence it reduces costs.
Regular supply of raw materials
Sufficient working capital ensures regular supply of raw materials
and continuous production.
Regular payment of salaries, wages and other day-to –day
commitments
A company which has ample working capital can make regular
payment of salaries, wages and other day to day commitments which raises
the morale of its employees, increase their efficiency, reduces wastages
and costs and enhances production and profits.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
current assets such as inventories, receivables, and cash, as such they need
large amount of working capital. The manufacturing undertakings require
sizable working capital between these two extremes.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
sale of finished products. Longer the period the cycle, larger is the working
capital.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
From the beginning, KSE Limited marketed the buy products obtained
from its solvent extraction division in the brand name of Jersey Copra Cake.
Most of the progress in the cattle feed sector has come about in the past 30
years only. There are only two cattle feed units in the country especially in
Kerala. The cattle feed industry of the state has been utilizing the indigenous
raw material that is coconut cake, which is mainly used as cattle feed.
Coconut cake contains four to five per cent oil is generally used for
industrial purpose and de oiled cakes is used to make mixed cattle feed.
In Kerala the rotary cake was used as a cattle feed and actually this
excessive oil on cakes reduced the keeping quality of the cake and also upset
the digestive system of the cattle. In foreign countries, the cattle feed is only
with de-oiled cakes and according to the dairy experts, the milk and fact
contend of milk depends solely on the protein contend of the feed. All these
factors stress the importance of having a few cattle feed industry in the state.
Thus in 1976, KSE Ltd entered the cattle feed industry by setting up the
new plant for manufacturing ready mixed cattle feed. During the last 3
decades KSE has been acting as a leader in ready mixed cattle feed industry
of the country. Today, KSE Ltd commands the resources, manufacture a
range of livestock feed in high volumes, driven by the commitment to high
standards of quality.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
between 2030 and 2040 if all sections of society support family planning
whole heartedly. The purchasing power of the middle class is growing and
food habits are also changing.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
milk products. It has obtained ISO recognition for its commitment to quality
and professionalism.
The last three decades have seen KSE emerging as a leader in solvent
extraction and ready mixed cattle feed in the country. Today KSE
commands the resources, expertise and infrastructure arrange of livestock
feed in high volumes, coconut oil from coconut cake and refined edible oil.
KSE has also entered in the field of milk procurement and processing.
KS Milk, KS Ghee and Vesta Ice Cream have become popular in many
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
India and enjoys a significant presence in exports too. Since the early days,
KSE has endeavored to supply products to customers through an extensive
network of dealers and retailers which form a dedicated force behind the
success of KSE. It is a matter of pride that KSE is a house hold today.
MISSION
To provide maximum benefit to the dealers and to give good quality
products to the customers at a fair profit. To increase the turnover and to
widen their markets to all the zones etc.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
OBJECTIVES
The Memorandum of Association of the company list out altogether 38
broader objectives. Out of these, the important objectives for which the
company is established as follows:
BUSINESS SEGMENTS
The company operates in three business segments:
(1). Cattle Feed Division
(2). Oil Cake Processing Division and
(3). Dairy Division comprising milk and milk products, including ice cream.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
KSE started operation of its dairy division on 22 January 2000. The idea of
diversification into dairy industry was the outcome of desire for forward
integration of the cattle feed business of KSE Ltd. The company market a
wide range of dairy products in the market, including toned milk, toned
homogenized milk, Ghee, Curd, Sambharam and Ice Cream (under brand
name 'Vesta'). Its main area of operation is Thrissur and also some parts of
Ernakulum and Malappuram.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
KS Milk
KS Curd
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
BUSINESS UNITS
The Company's manufacturing units include Swaminathapuram,
Vedagiri, Palakkad, Koratty, Konikkara and Thalayuthu.
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
100 TPD Physical Refining Plant with a capital outlay of Rs 14 crores for
refining Vegetable oils. Solvent Extracted Coconut oil is refined in the plant
and made edible. Commissioned fractionation Plant in March 2009.
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Secondary Objectives
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Primary Data
Data collected first hand by the investigator as original data are called
primary data. In other words, Primary data are those which are collected for
the first time and are original in nature. Primary data has been obtained
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Secondary Data
Data which are not originally collected but obtained from published or
unpublished sources are known as secondary data. Such data already
collected by someone for some purpose and are available for present study.
Secondary data is mainly used for this study and the five years’ data from
2013-2014 to 2017-2018 pertaining to the study was collected from the
company and the remaining from books, magazines, journals, websites etc.
This project is based on secondary data collected through annual reports of
the organization.
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
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Table:1
Effect of working
2013-14 2014-15 capital
Particulars ₨ in ₨ in Increase Decreas
lakhs lakhs ₨ in e ₨ in
lakhs lakhs
CURRENT ASSETS:
Inventories 4969.9 6600.66 1630.76
Trade Receivables 16.99 28.71 11.72
Cash and Cash Equivalents 314.41 3777.75 3463.34
Short term Loans &
Advances 483.94 496.29 12.35
Other Current Assets 9.07 14.13 5.06
Total Current
5794.31 10917.54
Assets
CURRENT LIABILITIES:
Short term Borrowings 728.9 831.6 102.7
Trade Payables 865.64 1633.16 767.52
Other Current Liabilities 1475.54 2550.05 1074.51
Short-term Provisions 777.8 1023.6 245.8
Total Current Liabilities 3847.88 6038.41
Working Capital 1946.43 4879.13
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
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Inference:
The working capital is increased by 29,32,70,000. The rate of increase is
151%. Major portion of investment is made in inventories.
Table:2
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INFERENCE:
Table:3
SCHEDULE OF CHANGES IN WORKING CAPITAL
FOR THE YEARS ENDING 31st MARCH
2016 AND 2017
Effect of working
Particulars 2015-16 2016-17 capital
₨ in lakhs ₨ in lakhs Increase Decrease
₨ in lakhs ₨ in lakhs
CURRENT ASSETS:
Inventories 7299.72 7432 132.28
Trade Receivables 8.92 10.83 1.91
Cash & Cash equivalents 1043.97 1140.11 96.14
Short-term Loans & Advances 437.76 460.12 22.36
Other Current Assets 11.82 10.61 1.21
Current Investments 0 3500 3500
12553.6
Total Current Assets 8802.19 7
CURRENT LIABILITIES:
Short-term Borrowings 243.87 3021.86 2777.99
Trade Payables 802.1 751.39 50.71
Other Current Liabilities 1839.97 2263.39 423.42
Short-term Provisions 839.44 179.2 660.24
Total Current Liabilities 3725.38 6215.84
Working Capital 5076.81 6337.83
Net increase in working capital 1261.02 1261.02
TOTAL 6337.83 6337.83 4463.64 4463.64
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INFERENCE
Table:4
Effect of working
2016-17 2017-18 capital
Particulars ₨ in lakhs ₨ in lakhs Increase Decrease
₨ in
₨ in lakhs
lakhs
CURRENT ASSETS:
Inventories 7432 9051.89 1619.89
Financial Assets
Trade Receivables 10.83 17.2 6.37
Cash & Cash equivalents 1140.11 2073.76 933.65
Short-term Loans &
460.12 139.44 320.68
Advances
Current Investments 3500 8333.13 4833.13
Other financial Assets 0 16.73 16.73
Other Current Assets 10.61 397.64 387.03
Total Current Assets 12553.67 20029.79
CURRENT LIABILITIES:
Financial Liabilities
Short-term Borrowings 3021.86 3461.88 440.02
Trade Payables 751.39 1512.23 760.84
Other Financial Liabilities 0 1775.33 1775.33
Other current liabilities 2263.39 686.88 1576.51
Short term Provisions 179.2 0 179.2
Current Tax Liabilities 0 488.98 488.98
Total Current Liabilities 6215.84 7925.3
Working Capital 6337.83 12104.49
Net increase in working 5766.66 5766.66
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capital
TOTAL 12104.49 12104.49 9552.51 9552.51
INFERENCE:
Table:5
INFERENCE:
The current assets include inventories, trade receivables, cash and cash
equivalents, current investments, short-term loans and advances.
The current assets are increasing in the period of 2013-14 – 2014-15. But it
decreased in the year 2015-2016. Then it increases.
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Graph:1
10000
8333.13
9000
7299.72
7432
8000
6600.66
7000
6000
4969.9
5000
3777.75
3500
4000
2073.76
3000
1140.11
1043.97
2000
496.29
483.94
460.12
437.76
397.64
314.41
156.17
1000
28.71
16.99
14.13
11.82
10.61
10.83
17.2
8.92
9.07
0
0
0
0
I nve ntor ie s Tr a de Ca sh a n d Ca sh Cu r r e n t Sh o r t te r m O th e r Cu r r e n t
Re c e iv a b le s Equiva le nts I nve stme nts Loans & A sse ts
Advances
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Table:6
Other Financial
- - - - 1775.33
Liabilities
Other Current
1475.54 2550.05 1839.97 2263.39 686.88
Liabilities
INFERENCE:
The current liabilities include short term borrowings, trade payables, short
term provisions etc.
The current liabilities are increased in the year 2014-15. But it reduces in the
year 2015-16. Then it increases in the last two years.
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Graph:2
3461.88
4000
3021.86
3500
2550.05
3000
2263.39
2500
1839.97
1775.33
1633.16
1512.23
2000
1475.54
1023.6
1500
839.44
751.39
831.6
802.1
686.88
1000 865.64 777.8
488.98
728.9
243.87
179.2
500
0
2013- 14 2014- 15 2015- 16 2016- 17 2017- 18
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
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Table:7
WORKING CAPITAL
SL NO YEAR
(₨ in lakhs)
1 2013-14 1946.43
2 2014-15 4879.13
3 2015-16 5076.81
4 2016-17 6337.83
5 2017-18 12104.49
INFERENCE:
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
14000
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
12104.49
12000
10000
8000
6337.83
6000 5076.81
4879.13
4000
1946.43
2000
0
2013-14 2014-15 2015-16 2016-17 2017-18
WORKING CAPITAL
Graph:3
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Table:8
Current Ratio
CURRENT CURRENT
CURRENT
YEAR ASSETS LIABILITIES
RATIO
(₨ in lakhs) (₨ in lakhs)
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INFERENCE:
The current ratio of the company is not satisfactory in the years
2013-14 and 2014-15 (1.51 and 1.81). It is below the standard norm.
The current ratio of the company is satisfactory in the years 2015-16,
2016-17 and 2017-18.
Now the company is able to pay the current liabilities.
Graph:4
Current Ratio
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2013-14; 1.51
2017-18; 2.53
2014-15; 1.81
2016-17; 2.02
2013-
14
2014-
2015-16; 2.36 15
2015-
16
2016-
17
Table:9
Quick Ratio
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
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CURRENT
QUICK ASSETS QUICK
YEAR LIABILITIES
(₨ in lakhs) RATIO
(₨ in lakhs)
INFERENCE:
The quick or liquid ratio is below the standard form in the years
(2013-14, 2014-15,2015-16, 2016-17 and 2017-18). It means that
the firm cannot have adequate liquid assets to pay of its current
liabilities immediately.
In the year 2017-18 the liquid ratio is satisfactory. It is above than
the standard form of 1:1.
Graph:5
QUICK RATIO
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1.6
1.39
1.4
1.2
1
Liquid Ratio
0.82
0.8 0.72
0.6
0.4
0.4
0.21
0.2
0
2013-14 2014-15 2015-16 2016-17 2017-18
Year
Table:10
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
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CURRENT
ABSOLUTE ABSOLUTE
YEARS LIABILITIES
LIQUID ASSETS LIQUID RATIO
₨ in lakhs
₨ in lakhs
INFERENCE:
Graph:6
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1.4 1.31
1.2
Absolute Liquid Ratio
1
0.82
0.8 0.75
0.63
0.6
0.4
0.28
0.2
0
2013-14 2014-15 2015-16 2016-17 2017-18
Year
Table:11
Comparative Balance sheet as on 31st March 2014 and 2015
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
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Inference:
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A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Table:12
Comparative Balance sheet as on 31st March 2015 & 2016
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2014-15 2015-16
Absolute Change in
Particulars ₨ in ₨ in
Change %
lakhs lakhs
ASSETS
Current Assets:
Inventories 6600.66 7299.72 699.06 1.59
Trade Receivables 28.71 8.92 -19.79 -68.93
Cash and Cash Equivalents 3777.75 1043.97 -2733.78 -72.37
Inference:
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Table:13
Comparative Balance sheet as on 31st March 2016 & 2017
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2015-16 2016-17
Absolute Change in
Particulars ₨ in ₨ in
Change %
lakhs lakhs
ASSETS
Current Assets:
Inventories 7299.72 7432 132.28 1.81
Trade Receivables 8.92 10.83 1.91 21.41
Cash and Cash Equivalents 1043.97 1140.11 96.14 9.21
Short term Loans and Advances 437.76 460.12 22.36 5.11
Current Investments 0 3500 3500 0
Other Current Assets 11.82 10.61 -1.21 -10.24
Total Current Assets 8802.19 12553.67 3751.48 42.62
Fixed Assets:
Tangible Assets 2497.32 2889.94 392.62 15.72
Intangible Assets 1.68 1.45 -0.23 -13.69
Capital Work-in Progress 28.09 5.72 -22.37 -79.64
Non-Current Investments 2.5 2.5 0 0
Long term Loans & Advances 153.13 164.22 11.09 7.24
Deferred Tax Assets 73.88 56.34 -17.54 -23.74
Total Fixed Assets 2756.6 3120.17 363.57 13.19
11558.7
15673.84 4115.05 36.6
TOTAL ASSETS 9
LIABILITIES & CAPITAL
Current Liabilities:
Short term Borrowings 243.87 3021.86 2777.99 1139.13
Trade Payables 802.1 751.39 -50.71 -6.32
Other Current Assets 1839.97 2263.39 423.42 23.01
Short term Provisions 839.44 179.2 -660.24 -78.65
Total Current Liabilities 3725.38 6215.84 2490.46 66.85
Non-Current Liabilities:
Long term Borrowings 617.31 669.83 52.52 8.51
Long term Provisions 47.25 57.69 10.44 22.1
Total Non -current Liabilities 664.56 727.52 62.96 9.47
Shareholders' Funds
Share Capital 320 320 0 0
Reserves & Surplus 6848.85 8410.48 1561.63 22.8
Shareholders' Funds 7168.85 8730.48 1561.63 21.78
11558.7
15673.84 4115.05 35.6
TOTAL LIABILITIES 9
INFERENCE:
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Table:14
Comparative Balance sheet as on 31st March 2017 & 2018
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INFERENCE:
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Table:15
Composition of Current Assets & Current Liabilities 2013-14
Inference:
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Graph:7
Composition of current assets 2013-2014
Inventories 4969.9
Graph:8
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777.8 728.9
865.64
1475.54
Short term
Borrowings
Trade Payables
Short term
Provisions
Other Current
Liabilities
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Table:16
Composition of Current Assets & Liabilities2014-15
Inference:
Out of total current assets, 60.46% of the funds are in the form of
inventories. 34.6% of funds are in the form of cash and cash
equivalents.
Out of total current liabilities, short term provisions are 16.95%.
Trade payables are 27.05%.
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Graph:9
7000
6600.66
6000
5000
3777.75
4000
3000
2000
1000 496.29
28.71 14.13
0
Inventories Trade Cash & Cash Short term Other Current
Receivables Equivalents Loans & Assets
Advances
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Graph:10
2550.05
1633.16
1023.6
831.6
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
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Table:17
Components of Current Assets and Liabilities 2015-2016
Inference:
Out of total current assets, 82.93% of the funds are invested in the
form of inventories. 11.86% are in the form of cash and cash
equivalents.
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Graph:11
Components of Current Assets 2015-2016
8000
7299.72
7000
6000
5000
4000
3000
2000
1043.97
1000 437.76
8.92 11.82
0
Inventories Trade Cash & Cash Short term Loans Other Current
Receivables Equivalents & Advances Assets
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Graph:12
Components of Current Liabilities 2015-2016
2000
1839.97
1800
1600
1400
1200
1000
802.1 839.44
800
600
400
243.87
200
0
Short term Trade Payables Short term Other Current
Borrowings Provisions Liabilities
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Table:18
Components of Current Assets and Liabilities 2016-2017
INFERENCE:
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Graph:13
8000 7432
7000
6000
5000
4000
3500
3000
2000
1140.11
1000 460.12
10.83 10.61
0
Current Inventories Trade Cash & Cash Short term Other Current
Investment Receivables Equivalents Loans & Assets
Advances
64
DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Graph:14
Components of Current Liabilities 2016-2017
2263.39
3021.86
179.2 751.39
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Table:19
Amount Percentage
Particulars ₨ in lakh
CURRENT ASSETS:
Inventories 9051.89 45.19
Financial Assets:
Investments 8333.13 41.6
Trade Receivables 17.2 0.09
Cash & Cash Equivalents 2073.76 10.35
Short term Loans & Advances 139.44 0.7
Other financial assets 16.73 0.08
Other Current Assets 397.64 1.99
TOTAL 20029.79 100
CURRENT LIABILITIES:
Financial Liabilities:
Short term Borrowings 3461.88 43.68
Trade Payables 1512.23 19.08
Other financial liabilities 1775.33 22.4
Other Current Liabilities 686.88 8.67
Current Tax Liabilities 488.98 6.17
TOTAL 7925.3 100
INFERENCE:
Out of total current assets, 45.19% of the funds are invested in the
form of inventories. 41.6% are in the form of current investments.
43.68% of the total current liabilities is short term borrowings.
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Graph:15
Components of Current Assets 2017-2018
Trade Receivables
17.2
Investments 8333.13
Inventories 9051.89
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Graph:16
3000
2500
2000 1775.33
1512.23
1500
1000
686.88
488.98
500
0
Short term Trade Payables Other financial Other Current Current Tax
Borrowings liabilities Liabilities Liabilities
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Table:20
1 RMCP 17.5
2 WIPCP 1
3 FGCP 4
4 RCP 0
INFERENCE:
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Table:21
1 RMCP 21
2 WIPCP 1
3 FGCP 4
4 RCP 0
INFERENCE:
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Table:22
Working Capital cycle 2015-16
1 RMCP 24
2 WIPCP 1
3 FGCP 4
4 RCP 0
INFERENCE:
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Table:23
1 RMCP 22
2 WIPCP 1
3 FGCP 5
4 RCP 0
INFERENCE:
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
Table:24
1 RMCP 23
2 WIPCP 1
3 FGCP 4
4 RCP 0
INFERENCE:
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
4.1 FINDINGS
The working capital position of the company is good. The working
capital of the company is increasing. But the rate of increase is
sometimes decreasing.
The current assets include inventories, trade receivables, cash and cash
equivalents, current investments, short-term loans and advances.
The current liabilities include short term borrowings, trade payables,
short term provisions etc.
The current ratio of the company is not satisfactory in the years
2013-14 and 2014-15 (1.51 and 1.81). It is below the standard norm.
The current ratio of the company is satisfactory in the years 2015-16,
2016-17 and 2017-18.
The quick or liquid ratio is below the standard form in the years
(2013-14, 2014-15,2015-16, 2016-17 and 2017-18). In the year
2017-18 the liquid ratio is satisfactory. It is above than the standard
form of 1:1.
The absolute liquid ratio of the company is satisfactory in all the years
except 2015-16.
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
The company does not allow any credit sales because the Receivables
conversion period is zero.
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DEPARTMENT OF MANAGEMENT STUDIES MES COLLEGE ERUMELY
A STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LIMITED
4.2 SUGGESTIONS
The decreasing rate in working capital adversely affect the company. It
may weak the company.
The maintenance of adequate liquid assets will help the company to
meet its immediate current liabilities.
Large investment in inventory causes over stocking. This reduces the
opportunity to invest in productive sources like current investment.
The investment of money in inventory influence to maintain
inadequate liquid assets.
The increase in the time period of working capital may increase the
working capital requirements.
To adopt social responsibility by providing credit sale facilities to the
dealers. This will help to the investment of current assets in debtors.
Maintenance of adequate assets in the certain or prescribed ratio or
standards increase the efficiency of the company.
To maintain the working capital in the standard forms, the decrease of
current liabilities will help them.
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