Professional Documents
Culture Documents
Hritika Lokhande Ty
Hritika Lokhande Ty
PROJECT REPORT ON
“A STUDY OF WORKING CAPITAL MANAGEMENT WITH
REFRENCE TO HUPHEN ELECTROMECH PVT LTD”
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
SUBMIT BY:
HRITIKA MAHENDRA LOKHANDE
TYBBA
SEAT NO.
1
ACKNOWLEDGEMENT
2
DECLARATION
The project report submitted is my own work and has not been duplicated from any
other source. I shall be responsible for any unpleasure moment/situations.
3
4
INDEX
SR.NO. PARTICULARS PAGE NO.
1 INTRODUCTION 6-8
8 CONCLUSION 58-59
9 BIBLIOGRAPHY 60-61
10 ANNEXURE 61-66
5
CHAPTER NO-1
INTRODUCTION
6
Project work is a series of tasks that need to be completed in order to reach a specific
outcome
It aims at developing insight and capabilities in the students for in depth study,
research, interpretation and analysis on a particular chosen topic.
A project is a systematic study of real problem in an organization with a aim to resolve
it with the application of management concept and skills.
Project are applied in nature, wherein the subject is working with a company or
organization to analyze and purpose a solution to a specific problem or problems.
Project Management is the art and science of working within defined constraints of
scope, time, cost, and quality. A project is an organized commitment of effort to
produce a defined outcome within defined constraints of scope, time, budget, and
quality. A project manager is a person responsible for the project, who may use project
management to deliver it.
Each and every project may it be a long or a short one, an essay or a tough one is carried
out with certain objectives or motives in mind.
The project normally include data collection, data storing, data analysis and making
inference from it, under the guidance of the organization guides and his/her educational
institutional guide.
Such project work thus become alive platform for the student to know the current
management issues, development at the same time he/she can apply the knowledge
gained through earlier classroom learning.
The project study also provides an opportunity to develop communication skills,
analytical skills and also expose to the organization culture and actual working of the
organization.
8
CHAPTER NO-2
RESEARCH METHODOLOGY
9
Sr. Particulars Explanation
No.
1. Definition of “Research is a systematized effort to gain
Research new knowledge.”
“Research is a more systematic activity
directed towards discovery and the
development of an organized body of
knowledge.”
2. Types of Analytical and explanatory: Analytical
Research research includes study of collection and
analysis of financial records. The
explanatory research is used in this study
because the study involves the observation
and evolution of financial data from the last
two financial years.
3. Definition of Research methodology implies more than
Research simply the methods you intend to use to
Methodology collect data. It is often necessary to include a
consideration of the concepts and theories
which underlie the methods.
4. Type of research Qualitative and Analytical research:-
methodology
It comprises of past 3 years of financial data
and records to study the financial position
and status of Huphen Electromech Pvt Ltd.
To study the financial health of a business
certain methodology and technique used to
analyse the financial statements and accounts
therefore the analytical research
methodology is used in these project report.
5. Definition of “A research design is the logical and
research design systematic planning and directing a course of
research.”
6. Sample Method Probability sampling method:-
A probability sampling method is any
method of sampling that utilizes some form
of random selection. In order to have a
random selection method, you must set up
some process or procedure that assures that
10
the different units in your population have
equal probabilities of being chosen.
7. Duration of 50 Hours
Research
8. Definition of Primary data collection:-
Data Collection
Data collected by the investigator for his own
purpose, for the first time, from beginning to
end, is called primary data.
Secondary data collection:-
Secondary data means data that are already
available i.e. they refer to the data which they
have already been collected and analysed by
someone else.
9. Type of Data Secondary sources:-
Collected
The secondary data has been collected
through annual reports like:
Annual reports.
Profit and loss account.
Balance Sheet.
Website referencing.
Research papers.
Magazines.
11
CHAPTER NO-3
ORGANIZATION PROFILE
12
3.1. INTRODUCTION:
13
3.2. PROFILE:
District: Nasik
3.4. ACHIEVEMENTS:
14
3.5. FACILITIES:
15
3.7. ORGANISATION STRUCTURE:
PURCHASE: KARKERA
PRODUCTION: KARVE
16
CHAPTER NO-4
PRODUCT PROFILE
17
4.1. PRODUCT PROFILE:
18
4.1.2. HTCT:
Metering CT
Protection CT
Bushing CT
Interposing CT
19
4.1.3. PT (POTENTIAL TRANSFORMERS):
20
4.1.5. LTCT:
3 phase CT for motor protection relay specifically designed and developed for
Schneider Electric.
21
CHAPTER NO-5
THEORY OF WORKING CAPITAL
MANAGEMENT
22
5.1. INTRODUCTION:
For increasing shareholder's wealth a firm has to analyze the effect of fixed assets and
current assets on its return and risk.working capital management of current assets . the
management of current assets on the basis of the following points:
1.current assets are for short period while fixed assets are for more than one year
2.The large holding of current assets ,especially cash, strengthens liquidity position but
also reduce overall profitability ,and to maintain an optimal level of liquidity and
profitability , risk return trade off is involved holding current assets
3.Only current assets can be adj usted with sales fluctuating in the short run. thus the
firm has greater degree of flexibility in managing current assets. The management of
current assets help affirm in building a good market reputation regarding its business
and economic conditions.
23
5.2. CONCEPT OF WORKING CAPITAL MANAGEMENT:
2. Qualitative
These concepts are well known as “gross working capital” concept and “net working
capital” concept. In quantitative working capital concept, current assets are considered
as working capital which is termed as gross working capital too.
In qualitative, current assets and current liabilities are taken into account, working
capital is defined as excess or deficit of current assets over current liabilities.
It becomes essential to know and understand the current assets components and current
liabilities components in the working capital management:
⮚ Current assets – This is imperative to facilitate “Current assets have a short life
span. These types of assets are connected in current operation of a business and
normally used for short–term operations of the firm. The two important
characteristics of these assets are; (i) short life span, and (ii) swift conversion
into other form of assets. Cash balance may be held idle for few weeks, account
receivable may have a period of 30 to 60 days”
⮚ Current liabilities – Business generates liability for purchasing raw material and
other essential things on credit, these are called as creditors or account payable.
Until remittances towards creditors are made, it is categorized under liabilities
section of balance sheet. Current liabilities are explained as all obligations that
are due in near future for payment.
24
Various current assets and current liabilities components make up the working capital
composition. Each component plays important part in any business firm. If any
component of working capital is not adequate, it may bring down efficiency and
profitability of the company. Current asset and current liabilities which constitute
working capital structure are shown in table below.
Creditors Inventories
Bank Overdraft Cash and Bank Balance
Bills Payable Accounts Receivables
Outstanding Expenses Bills Receivables
Short-term Loans Accrued Income
Provision for Taxation Prepaid Expenses
Other Current Liabilities Other Current Assets
25
5.4. OBJECTIVES OF WORKING CAPITAL MANAGEMENT:
It means raw material should be present on the requirement and it should not be a cause
to stoppages of production.
The finished goods should be sold as early as possible once they are produced and
inventoried.
Cash should be available as and when required along with some cushion
Easy loans:-Adequate working capital leads to high solvency and credit standing can
arrange loans from banks and others financial services organizations on easy and
favorable terms.
Cash discount:-Adequate working capital also enables a concern to avail cash discounts
on the purchases and hence reduce cost.
26
5.6. TYPES OF WORKING CAPITAL MANAGEMENT:
27
5.6.1. ON THE BASIS OF CONCEPT:
The working capital can be classified into two types under based on concept. They are:
● Gross working capital.
● Net working capital.
Gross working capital:
Gross working capital means an amount of funds invested in the various forms of
current assets in total. Current assets are those assets which are bought in the ordinary
course of business and converted into cash within a short period which is normally one
accounting year.
The positive net working capital exists, whenever the current assets exceeds current
liabilities.
The negative net working capital exists whenever the current liabilities exceeds the
current assets. Current liability means a liability payable within one accounting year in
the ordinary course of business or payable out of the current assets within a short period
normally one year or payable out of the revenue income of the business.
The working capital can be classified into two types under based on time. They are:
● Permanent/fixed working capital.
● Variable working capital.
Permanent working capital:
Permanent working capital implies the base investment amount in all types of current
resources which is respected at all times to carry on business activities. The value of
current assets have been increased or decreased over a period of time. Even though,
there is a need of
28
having minimum level of current assets at all times in order to carry on the business
activities effectively. Again, the permanent working capital is divided into two parts.
They are:
Some products have seasonal demand. Seasonal demand arises due to festival. In this
way, seasonal working capital means an amount of working capital maintained to meet
the seasonal demand of the product.
Special programs may be conducted for business development. The programs may
be advertisement campaign, sales promotion activities, product development
activities, marketing research activities, launching of new products, expansion of
markets and the like. Therefore, special working capital means an amount of working
capital maintained to meet the expenses of special programs of the company.
29
5.7. DETERMINANTS OF WORKING CAPITAL:
Nature and size of the business- The working capital requirement of a firm is basically
influenced by the nature and size of the business. Size may be measured in terms of the
scale and operations. A firm with larger scale of operations will need more working
capital than a small firm.
Growth and expansion of business- Working capital requirement of the business firm
tend to increase in correspondence with growth in sales volume and fixed assets.
Profit margin- A higher rate of profit margin due to quality products or good marketing
management or monopoly power in the market, reduces the working capital
requirement of the firm, as a profit earned in cash is a source of working capital.
Credit policy- A concern that purchases its requirement on credit and sales its
products/services on cash requires less amount of working capital.
Business fluctuations- Most firms experiences fluctuations in demand for their product
and services. These business variations affect the working capital requirements.
Import policy- import policy of the government may affect the level of working capital
of a firm since they have to arrange funds for importing goods at specified times.
Infrastructure facilities- The firm may require additional funds to maintain the level of
inventory and other current asset.
Taxation policy- The tax policy of the government will influence the working capital
decision. If the government follows regressive taxation policy i.e. imposing heavy tax
burdens on business firms, they are let with very little profit for distribution and
retention purpose.
30
5.8. TYPES OF WORKING CAPITAL FINANCING:
Cash Credit /
Working
Trade Credit Bank
Capital Loans
Overdraft
Purchase /
Discount of Bank
Bills Guarantee
● Trade Credit
This is simply the credit period which is extended by the creditor of the business. Trade
credit is extended based on the creditworthiness of the firm which is reflected by its
earning records, liquidity position, and records of payment. Just like other sources of
working capital financing, trade credit also comes with a cost after the free credit
period. Normally, it is a costly source as a means of financing business working capital.
31
● Purchase / Discount of Bills
For a business, it is another good service provided by commercial banks for working
capital financing. Every firm generates bills in the normal course of business while
selling goods to debtors. Ultimately, that bill acts as a document to receive payment
from the debtor. The seller who requires money will approach the bank with that bill
and bank will apply the discount on the total amount of the bill based on the prevailing
interest rates and pay the remaining amount to the seller. On the date of maturity of
that bill, the bank will approach the debtor and collect the money from him
● Bank Guarantee
It is primarily known as non-fund based working capital financing. Bank guarantee is
acquired by a buyer or seller to reduce the risk of loss to the opposite party due to non-
performance of the agreed task which may be repaying the money or providing of some
services etc.
32
5.9. WORKING CAPITAL CIRCULATION:
Current assets along with current liabilities present in all the businesses every time. It’s
like stimulating current which flow every time. “Working capital plays pivotal role of
heart in any firm as in human body. Working capital resources are created and
distributed in the business firm, and if circulation of working capital stops, business
tends to get unresponsive.” It is very essential to circulate resources to enable long life
and efficient run of any business.
Chart 1.1 depicts cycle of working capital which represents it very apparent so as to
the overall cash is gathered primarily through issuance of shares or debentures,
borrowings as well as operation. Cash is utilized in the direction of procuring raw
material, fixed assets and paying due amount to creditors. Raw materials then
processed; operating expenses are paid that further results in production of finish
product up for sale.
Chart 1.1
33
RATIO ANALYSIS:
Definition:
According to H.G. Guttmann:
“Ratio is the relationship or proportion that one amount bears to another,
the first number being the numerator and the later denominator.”
34
MERITS AND DEMERITS OF RATIO ANALYSIS:
● Ratios have to be interpreted, but different people may interpret the same ratio
in different ways. It should be clearly noted that ratios are only tools and personal
judgment of the analyst is more important. If the analyst does not possess
requisite qualifications or is based in interpreting the ratios, the conclusions
drawn will prove misleading.
35
CLASSIFICATION OF RATIOS:
WORKING
DEBTORS
LIQUIDITY RATIO CAPITAL
TURNOVER RATIO
TURNOVER RATIO
CREDITORS INVENTORY
TURNOVER RATIO TURNOVER RATIO
● Liquidity ratio:
It refers to the firm’s ability to meet its current financial obligations as they arise. The
liquidity ratios measure the short term financial solvency of the firm.
Current ratio- Current ratio is the relationship between current assets and current
liabilities. The ideal ratio for current assets is 2:1. It is calculated by dividing current
assets by current liability.
37
CHAPTER NO-6
DATA ANALYSIS & INTERPRETATION
38
CURRENT ASSET
Column1, 2016-
CURRENT
17, 109426243.6 ASSET
Column1, 2018-
19, 105776797
Column1, 2017-
18, 96913611.76
INTERPRETATION:
As per the graph above there is decrease in the current asset of 2018 from 10.9 cr to
9.6 (approx) as compared to the F.Y because there is decline observed in trade
receivables ,cash, short term loans and other current assets. Then there is again an
increase in current assets of 2019 from 9.6 cr to 10.5 cr due to increase in cash and cash
equivalent
39
CURRENT LIABILITIES
Column1, 2016-
CURRENT
17, 64999952.95 LIABILITIES
INTERPRETATION:
As shown in the above graph there is a decreasing trend in Current Liabilities from
2017 to 2018 fro 6.5cr to 4.53 cr , and a marginal decrease from 2018 to 2019 to 4.51
cr. The reason for the same can be attributed to decrease in trade payables and other
current liabialities during these respective years.
40
WORKING CAPITAL
PARTICULARS 2016- 17 2017-18 2018-19
A)TOTAL CURRENT 109462743.63 96918611.76 105776796.95
ASSETS
B)TOTAL CURRENT 64999952.95 45307010.15 45105710.17
LIABILITIES
Net Working Capital 44462790.68 51606601.61 60671086.78
(A-B)
Column1, 2017-
18, 51606601.61
Column1, 2016-
17, 44462790.68
INTERPRETATION:
As it can be observed from the above graph, there is an increasing trend in the working
capital of the company .From 4.4cr 2017 it increases to 5.1 cr in 2018, and there is a
further increase to 6.6cr in 2019. The working capital of the company is increasing
since past three years which is due to increase in current asset and decrease in the
current liabilities.It is good because the company has enough funds to carry out its daily
operations and bad as it has idle cash and debtors.
41
RATIO ANALYSIS:
Column1, 2018-
CURRENT RATIO 19, 2.345
Column1, 2017-
18, 2.139
Column1, 2016-
17, 1.684
INTERPRETATION:
⮚ The current ratio is increasing in pas three years and it meets the standard ratio
of 2:1.
⮚ It increases from1.6 to 2.1 and further in the third year it increases to 2.3 which
means the liquidity position of the company is good that is the company is able
to pay of its short term liabilities.
42
QUICK RATIO:
Column1, 2017-
Column1, 2016- 18, 1.9892
17, 1.9095
INTERPRETATION:
The Figure of the quick ratio shows an increasing trend from 1.9 in the F.Y. to 1.9 in
the S.Y. to 2.5 in T.Y. which is due to decrease in current liabilities.
The quick ratio of company is good as it is in increasing every year which means that
not much money is blocked in inventory
43
ABSOLUTE LIQUID RATIO:
Column1, 2018-
ABSOLUTE 19, 0.9452
LIQUID RATIO
Column1, 2016-
17, 0.6919 Column1, 2017-
18, 0.6502
INTERPRETATION:
The above graph shows a marginal decrease in absolute liwuid ratio from 0.69
in F.Y. to 0.65 in the S.Y. to 0.94 in T.Y. due to incline in absolute liquid
asset.
This shows that the company has much cash to meet its daily working capital
requirement. But it also means that the company has a lot of cash kept idle
which can be utilized somewhere else.
44
INVENTORY TURNOVER RATIO
Inventory Turnover Ratio = ROGS/Average Inventory
Column1, 2016-
17, 13.7404 INVENTORY TURNOVER RATIO
Column1, 2017-
18, 10.0151
Column1, 2018-
19, 7.5408
INTERPRETATION:
It can be observed from the above graph that there is a decreasing trend in inventory
turnover ratio reasoning a decrease in COGS an increase in average inventory in the
past three years.
The period pf conversion process of raw materials to finished goods in decreasing over
the past three years which means that the company is taking more time to convert raw
materials to finished goods which shows its inefficiency.
45
DEBTORS TURNOVER RATIO:
Debtors Turnover Ratio =Total Credit Sales/Average Debtors
YEAR Credit Sales Average Debtors Debtors Turnover
Ratio(Times)
2016-17 194029168 39551521.28 4.9057
2017-18 155520264 19235247.36 8.0851
2018-19 166577006 33573885.09 3.7701
DEBTORS
Column1, TURNOVER
2017-18, RATIO
8.0851
Column1, 2016-17,
4.9057
Column1, 2018-19,
3.7701
INTERPRETATION:
The graph above shows the increase in F.Y. to S.Y. from 4.9 times to 8 times due to
decrease in sales and average debtors.Further ,in the T.Y. it decreases to 3.7 times due
to incline in average debtors.
The Trend shows that the recovery from debtors is not fast and money is blocked in
debtors.
46
CREDITORS TURNOVER RATIO:
Creditors Turnover Ratio =Credit Purchases/Average Creditors
Column1, 2018-19,
CREDITORS TURNOVER
9.2932 RATIO
Column1, 2016-17,
5.9208
Column1, 2017-18,
4.9185
INTERPRETATION:
The graph above shows that there is a decline in creditors turnover period from F.Y.
i.e. 5.9 times to 4.9 times in S.Y. due to decrease in average creditors. A further increase
in the T.Y. is seen due to increase in purchases.
It shows that the company is paying its creditors frequently and therefore the
creditworthiness of the company is increasing.
47
NET WORKING CAPITAL TURNOVER RATIO:
Net Working Capital Turnover Ratio= Sales / NWC
YEAR Sales Net Working Net Working
Capital Capital turnover
ratio (Times)
2016-17 194029168 44462790.68 4.3638
2017-18 155520264 51606601.61 3.0185
2018-19 166577006 60671086.78 2.0862
Column1, 2016-17,
4.3638
NET WORKING CAPITAL TURNOVER RATIO
Column1, 2017-18,
3.0135
Column1, 2018-19,
2.0862
INTERPRETATION:
The figure of net working capital turnover ratio are showing a constant decline in the
pas three years reasoning in increase of sales and comparative decreases in working
capital
It can be said the company is not utilizing its working capital effectively to increase its
sales.
48
OPERATING CYCLE ANALYSIS:
Inventory Holding Period = 360/Inventory turnover ratio
Column1, 2018-19,
47.74
INVENTORY HOLDING PERIOD
Column1, 2017-18,
35.94
Column1, 2016-17,
26.2
INTERPRETATION:
The graph above shows that Inventory Holding period is getting increased in the last
three years which is due to decrease in inventory
In the F.Y. the company takes 20 days , S.Y. 36 days , T.Y. 48 days to convert its raw
material into finished goods i.e. the raw materials stays as stock in the company for a
longer period of Time.
49
Debt collection Period = 360/Debtors turnover ratio
Column1, 2018-19,
95.48
INVENTORY HOLDING PERIOD
Column1, 2016-17,
73.38
Column1, 2017-18,
44.52
INTERPRETATION:
The graph above shows that debtors collection period has increased in the past three
years from F.Y. to S.Y. it decreased from 73 days to 45 days because of increase in
debtors turnover ratio which is actually good for the company as it is recovering in
debts faster.
From S.Y. to T.Y. there is an increase in debtors collection period because of decrease
in debtors turnover ratio which is not good for the company as their recovery from
debtors is not fast.
50
Credit Payment Period = 360/Creditors Turnover Ratio
Column1, 2017-
CREDITORS
18, 73.19
PAYMENT PERIOD
Column1, 2016-
17, 60.8
Column1, 2018-
19, 38.73
INTERPRETATION:
The Graph above shows a decreasing trend. From the F.Y. to S.Y. there an incline seen
in creditors payment period due to decrease in creditors turnover ratio which shows
that the company is paying its creditors faster.
From S.Y. to T.Y. there is a downfall in creditors payment period because of increase
in creditors turnover ratio which means that the company takes time to pay its creditors.
51
Net Operating Cycle = Inventory holding period + Debt collection
period – Creditors Payment period
Particulars 2016-2017 2017-2018 2018-2019
Inventory holding 26.20 35.94 47.74
period
Debt collection period 73.38 44.52 95.48
Gross Operating Cycle 99.58 80.46 193.22
Creditors Payment 60.80 73.19 38.73
Period
Net Operating Cycle 39 7.27 104.49
(Days)
Column1, 2011-12,
39
Column1, 2012-13,
7.27
INTERPRETATION:
From the above graph the Net operating cycle shows an increasing trend in the past
three years. From F.Y. to S.Y. a decrease in operating cycle can be observed due to
decrease in debt collection period and increase in creditors payment period which
means that the company takes less time to convert its raw materials to finished good
and further to sales.
From S.Y. to T.Y. a great increase in operating cycle is observed due to increase in
debt collection period and decrease in creditors payment period which means that the
company takes longer time to convert its raw materials to finished good and further to
sales.
52
CHAPTER NO.7
FINDINGS AND RECOMMENDATIONS
53
7.1. FINDINGS:
Liquidity Position
Ratios
54
LIQUIDITY POSITION
2018-19, QUICK
RATIO, 2.5869
2018-19, CURRENT
RATIO, 2.345
2017-18, CURRENT
RATIO, 2.139 2017-18, QUICK
2016-17,RATIO,
QUICK1.9892
RATIO, 1.9095
2016-17, CURRENT
RATIO, 1.684
2018-19, ABSOLUTE
LIQUID RATIO, 0.9452
2016-17, ABSOLUTE
2017-18, ABSOLUTE
LIQUIDLIQUID
RATIO, RATIO,
0.6919 0.6902
INTERPRETATION:
The liquidity position of the firm is satisfactory as the firm has sufficient amount of
current assets and liquid assets against its current liabilities and liquid assets.
However quick ratio has increased to 2.5:1 in the year 2019 which shows the liquidity
position of the firm is slightly unsound
The graph shows a good liquidity position of the company but has excess amount of
liquid assets which indicates that the firm has its liquid assets lying idol.
55
EFFECIENCY POSITION:
2016-17, INVENTORY
TURNOVER RATIO,
13.7404
2017-18, INVENTORY
TURNOVER RATIO,
2018-19, CREDITORS
10.015
TURNOVER RATIO,
9.2932
2017-18, DEBTORS
2018-19, INVENTORYTURNOVER RATIO,
TURNOVER RATIO, 8.085
7.5408
2016-17, CREDITORS
TURNOVER RATIO,
2016-17, DEBTORS 5.9208 CREDITORS 2016-17, NET
2017-18,
TURNOVER RATIO, TURNOVER RATIO, WORKING CAPITAL
4.905
2018-19, DEBTORS 4.9185 TURNOVER RATIO,
2017-18, NET
4.3638
TURNOVER RATIO,
WORKING CAPITAL
3.7701
2018-19,
TURNOVER NET
RATIO,
WORKING
3.0135 CAPITAL
TURNOVER RATIO,
2.0862
INTERPRETATION:
Efficiency ratio indicates the working efficiency of the company. In Huphen
electromech Pvt. Ltd. the inventory turnover ratio is good. Company is utilizing stock
efficiently the debtor’s turnover ratio is in decreasing trend which is not good for the
company as it is not collected in cash from debtors on time
The creditors turnover ratio has an increasing trend which means that the company is
able to pay off its creditors.
Working capital turnover ratio is in decreasing trend which indicates that the company
is not investing in working capital properly so as to increase its sales.
56
7.2 RECOMMENDATION:
To avoid unnecessary block up of the fund ,company should maintain its inventory at certain
level to avoid this blockage there are two recommendations
1.Concept of Reorder Level
2.EOQ may be applied
1. Reorder point- The reorder point (ROP) is the level of inventory which
triggers an action to replenish that particular inventory stock. It is a
minimum amount of an item which a firm holds in stock, such that, when stock falls to this amount,
the item must be reordered.
Formula: The basic formula for the Reorder Point is to multiply the average daily usage rate for an
inventory item by the lead time in days to replenish it.
2. EOQ CONCEPT = In corporate finance, economic order quantity (EOQ) is the order quantity that
minimizes the total holding costs and ordering costs. It is one of the oldest classical production
scheduling models. The framework used to determine this order quantity is also known as Wilson
EOQ Model.
The company should increase the period of conversion of raw material to finished goods and further
to sales, the average period taken by them is 60 days but bringing to it to 40 day will be more
beneficial.
57
CHAPTER NO.8
CONCLUSION
58
8.1. CONCLUSION RELATED TO PROJECT WORK:
Since this project was conducted to analyse the working capital of fluphen occtromech
Pvt Ltd. for the last three years 2016-2017, 2017-2018, 2018-2019. During this project
work and project report I came to the conclusions which are as follows:
•The company has good liquidity position but has excess amount of liquid assets which
should be utilised efficiently.
•The debtors turnover ratio should be improved, the company should increase the
recovery of cash from debtors
•The company has good creditworthiness in market as it pay off its creditors on time.
•The firm needs to improve its efficiency in business operations.
We thank our college faculty for giving us opportunity to visit the industry which has been a great
exposure for us as it has been a practical experience to look throughout the working capital of the
company, etc. we were inspired by them as they strictly follow certain principal due to which
they are well known as they maintain trust or their customer.
● The project was very beneficial for me. Because it gave a practical experience and idea of
working in an industry. My doubts and confusion were cleared through this project.
● This project helped in learning even the theoretical concept how it been practically
implemented in the industries.
59
CHAPTER NO-9
BIBLIOGRAPHY
60
BIBLIOGRAPHY
61
CHAPTER NO-10
ANNEXURE
62
HUPHEN ELECTROMECH PVT. LTD
BALANCE SHEET AS ON 31st MARCH ,2019
2 Non-Current liabilities
3 Current liabilities
63
HUPHEN ELECTROMECH PVT. LTD
BALANCE SHEET AS ON 31st MARCH ,2018
2 Non-Current liabilities
3 Current liabilities
64
PARTICULARS Refer Figures for the Figures for the
Note year ended year ended
No. 31.03.2018 31.03.2017
4. Expenses .49
65
12. Profit/(loss) from discontinuing operations 28 0.00 0.00
66