Report On

“WORKING CAPITAL MANAGEMENT of 5 REAL ESTATE

COMPANIES”

Carried out at “Jain Ventures Consulting Pvt. Ltd.”, under the guidance

Of “Dr. Meena Sharma”

Submitted for evaluation under Summer Internship Report

(MB.20.613)

To the

School of Business

Mody University of Science & Technology

Lakshmangarh (Raj.)

by

Sneha Goyal

Enrolment No.: 170566

MBA II year Autumn Semester

1
 CERTIFICATES

Authentication Certificate

“To Whom It May Concern”

This is to certify that the Summer Internship Project Report (MB.20.613), titled
“WORKING CAPITAL MANAGEMENT of 5 REAL ESTATE COMPANIES” is a
bonafide work carried out by me at Jain Ventures Consulting Pvt. Ltd. The matter embodied
in the dissertation report has not been submitted earlier award of any degree or diploma to the
best of my knowledge and belief.

Sneha

Date:

2
Training Organisation’s Certificate

3
 Faculty Guide’s Certificate

“To whom it may concern”

This is to certify that the summer Internship Project Report (MB.20.613), Titled
“WORKING CAPITAL MANAGEMENT of 5 REAL ESTATE COMPANIES” is a
Bonafide work carried out by me at “Jain Ventures Consulting Pvt. Ltd.” The matter
embodies in this dissertation report has not been submitted earlier for award of any degree or
diploma to the best of my knowledge and belief.

I recommend its submission for evaluation.

Signature of the Intern Signature of the Faculty

Guide

Sneha

Date:

4
 ACKNOWLEDGEMENT

I would like to take the opportunity to thank and express my deep sense of gratitude to my
corporate mentor Mr. Pankaj Jain and my faculty mentor Dr. Meena Sharma. I am greatly
indebted to them for providing their valuable guidance at all stages of the Recruitment, their
advice, constructive suggestions, positive and supportive attitude and continuous
encouragement, without which it would have not been possible to complete the internship.

I would like to express my heartfelt thanks to the skilled Superior Mr. Saurav Shrivastav for
his general advice and help during my period of training. Finally, yet importantly, I would
like to thank to my beloved parents for their blessings, my friends for their help and wishes
for the successful completion of this project.

I perceive this as opportunity as a big milestone in my career development. I will strive to use
gained skills and knowledge in the best possible way, and I will continue to work on their
improvement, in order to attain desired career objectives. Hope to continue cooperation with
all of you in the future.

5
 Executive Summary

The organizational experience in the real estate sector has enabled me to develop my
knowledge in the construction and real estate business. With the growth in the economy, the
investments in this sector are growing too.

As we gain theoretical knowledge regarding this sector and how important role it plays in
economic development. It was my pleasure to work and analyze this sector practically in a
real-estate related firm.

I work for Six weeks in an organization named “Jain Venture Consulting Pvt. ltd” and
undergoing practical training on the topic “WORKING CAPITAL MANAGEMENT of 5
REAL ESTATE COMPANIES”. This training has given me a realistic understanding of
working capital and how different components of working capital are managed. I analyzed
different aspects of working capital of 5 different companies: DLF private limited, Prestige
estates projects limited, Brigade enterprises limited, Oberoi realty limited, Godrej properties
limited for 3 years i.e. 2019-2021. A statement of changes in working capital has also been
analyzed.

6
 PREFACE

Management education does not give desire result, if it does not include practical training; it
is provided to management students to expose them to the actual working environment of any
firm. This type of experience gives a foundation for learning, knowledge of the concepts and
practices of the topics assigned in the organization.

Summer training is an important component of the course, and the perquisite has 90 days
summer internship training in professional environment to support theoretical learning. I'd
like to express my appreciation for the valuable experience and practical information I gained
throughout my summer internship. Jain Ventures Consulting Pvt. Ltd. was the site of this
particular initiative. The project's main goal is to learn about financial analysis of companies’
features as a Finance Intern, such as what is their liquidity and their new financial plans, etc.
In this report, I described my incredible experience in words. I've done my best to make this
report as reader-friendly as possible while still achieving my study goal.

7
 DECLARATION

I hereby declare that this project titled “WORKING CAPITAL MANAGEMENT of 5

REAL ESTATE COMPANIES” for Jain Ventures consulting Pvt. Ltd. is an original work
done by me under the guidance of Mr. Pankaj Jain (Corporate Mentor) and Dr.Meena
Sharma, Faculty Mentor, School of Business, Mody University. This report is in partial
fulfillment of degree of Master of Business Administration (Full time) 2020-2021 from
School of Business, Mody University.

Sneha

8
 Table of Contents

S. No. Particulars Page no.

1 Chapter-1: Introduction 10-24

2 Chapter-2 : Company Profile 25-26

3 Chapter-3 : Research Methodology 27-30

4 Chapter-4: Data Interpretation and Analysis 31-37

5 Chapter-5: FINDINGS, SUGGESTIONS, CONCLUSION 38-42

6 Daily activity chart 43-46

7 Bibliography 47

9
 Chapter-1: Introduction

Introduction to finance:

Finance is basically the management of money which includes activities like investing,
lending, borrowing, saving, etc. There are basically three categories of finance: Personal
finance, corporate finance, Public/government finance. Companies also need finance to
operate. Different departments of a company need finance for different purposes mainly to
purchase material or for sales promotion, etc.

Why a business needs finance:

1. To start the business

2. To increase production capacity
3. To develop/innovate new products
4. To enter new markets
5. For take over and acquisitions
6. For working capital.

This brings us to our main topic i.e. Working Capital. Let’s have detailed information
regarding working capital management and how a company maintains it and why it is
important.

10
Working capital

Meaning of working capital:

Working capital is a company's lifeblood and nerve centre. Working capital is critical to the
proper operation of a firm, much as blood circulation is important to preserve life in the
human body. There is no way to run a successful business without one. A sufficient level of
working capital is required.

From the gross working capital, there are operative parts of working capital, such as current
assets, also known as funds, which are used in the business process. Cash receivables,
inventory, marketable securities held as a short-term investment, and other goods that are
closer to cash or equivalent to cash are all considered current assets. The amount of cash,
inventories, receivables, and other current assets required to support a given volume of
production is determined by the level of production, which is dependent on the management
attitude toward risk and the factors that influence the amount of cash, inventories,
receivables, and other current assets required to support a given volume of production.

Working capital management is often focused with the management of current assets and
liabilities. The field involves the need for cash from a variety of sources, as well as how to
use them in a result-oriented manner. Effective working capital management is the short-term
necessity of long-term success, without hyperbole.

In Accounting: Working capital= Current assets – Current liabilities

OBJECTIVES OF WORKING CAPITAL MANAGEMENT

Effective management of working capital is means of accomplishing the firm’s goal of

adequate liquidity. It is concerned with the administration of current assets and current
liabilities. It has the main following objectives-

11
1. To maximize profit of the firm.

2. To help in timely payment of bills.

3. To maintain sufficient current assets.

4. To ensure adequate liquidity of the firms.

5. It protects the solvency of the firm.

6. To discharge current liabilities.

7. To increase the value of the firm.

8. To minimize the risk of business

CLASSIFICATION OF WORKING CAPITAL

12
On The Basis of Concepts

1) Gross Working Capital:

The amount of money invested in various components of current assets is referred to as gross
working capital. Current assets are assets that can be easily and quickly converted into cash
over a short period of time, such as a fiscal year. Cash on hand and in the bank, inventories,
bills receivables, various debtors, short term loans and advances are all examples of current
assets.

2) Net Working Capital:

This is the difference between current assets and current liabilities. Current liabilities are
those that are expected to mature within an accounting year and include creditors, bills
payable and outstanding expenses. Net working capital indicates:
 A positive net working capital signifies that the financial obligations of the company
have been met and it can invest in other operational requirements.
 A nil net working capital signifies that the company only has the funds that are
required to clear its financial obligations.
 A negative net working capital signifies that the company is in need for more funds.

On The Basis of Time

1) Permanent / Fixed Working Capital:

The minimum amount required to ensure effective usage of fixed facilities and maintain the
circulation of current assets is known as permanent or fixed working capital. Every business
must keep a certain level of raw materials, work-in-process, finished goods, and cash on
hand. Because this portion of working capital is permanently blocked in current assets, it is
referred to as permanent or fixed working capital.

13
We must maintain a minimal amount of inventory to meet consumer demands, and we must
offer credit and hence maintain accounts receivables in order to create income and develop
customer relations.

As a result, regardless of the business's activity levels, a minimum investment in the existing
asset is always necessary, as demonstrated by the previous explanation. Permanent working
capital is the name for this type of investment.

The permanent/fixed working capital is of two types:

 Regular Working Capital:

It is the permanent working capital which is normally required in the normal course of
business for the working capital cycle to flow smoothly.

 Reserve Working Capital:

It is the working capital cushion which needs to be maintained over and above regular
working capital for contingencies which may arise due to unexpected situations.

2) Temporary / Fluctuating Working Capital

The temporary fluctuation of networking capital over and above the permanent working
capital is referred to as temporary working capital (TWC). It is the requirement for increased
working capital stemming from seasonal product demand or any unusual occurrence that is
otherwise unpredictable. It's the gap between net working capital and permanent working
capital, in other words.

The earnings of a business are not the same as the earnings of an employee. Throughout the
year, an employee earns the same amount of money every month. Businesses, on the other
hand, are rarely of this sort. In business, businessmen are given opportunities to make a lot of
money at a specific period, and they all try to take advantage of them. To take advantage of

14
this, he will need additional operating cash and such a requirement is met by Temporary
working capital.

 Seasonal Working Capital:

It is that fluctuation of NWC which is caused due to the effect of season. For example, the
seasons may be of mangoes, school uniform, audit deadlines, crackers, particular festival, etc.

 Special Working Capital:

It is the fluctuation in NWC due to some special event which otherwise would not occur. For
example, acute summer or winter, floods, famine, a sudden change in government policy, etc.

ADEQUACY OF WORKING CAPITAL

Working capital must be sufficient to shield a company from the negative impacts of a
shortfall in the value of current assets. It ensures a company's credit position is maintained to
a larger level and provides for unexpected events such as strikes, floods, and fire. It allows a
business to keep stocks at a level that allows it to meet the needs of its clients satisfactorily. It
allows a business to function more efficiently because there are no delays in procuring goods,
etc., due to credit issues.

INADEQUACY OF WORKING CAPITAL

When a company's working capital is insufficient, it confronts a slew of issues. Due to a lack
of working capital reserves, the firm's growth stagnates, making it harder to pursue profitable
ventures. Operating inefficiencies emerge when meeting day-to-day commitments becomes

15
challenging. As a result of inefficient use of fixed assets, the firm's profitability suffers. Due
to a lack of working capital reserves, the company is unable to take advantage of attractive
loan opportunities. When a company is unable to meet its short-term obligations, it loses its
reputation, resulting in tight lending terms.

DANGERS OF EXCESSIVE WORKING CAPITAL

Too much working capital is as dangerous as too little of it. Excessive working capital raises
problems.

1. As a result, inventory buildup unnecessarily. As a result, there's a higher risk of

inventory mismanagement, waste, theft, and losses.
2. The indication of a bad credit policy and a long collecting period result in, larger
incidence of bad debts, which has a negative impact on earnings. 
3. It also makes management lazy, which leads to managerial inefficiency.
4. The tendency to build up inventory in order to earn speculative profits, which tends to
liberalize dividend policy, makes it harder for the company to cope in the future if it
cannot make speculative profits.

ESTIMATION OF WORKING CAPITAL REQIUREMENTS

Managing the working capital is a matter of balance. The firms must have sufficient funds on
hand to meet its immediate needs. DLF Ltd is manufacturing oriented organization.

The following aspects have to be taken into consideration while estimating the working
capital requirements. They are:

1. Total material, labor, and overhead expenditures incurred.

16
 2. The amount of time raw materials must sit in storage before being released for
manufacture.
3. The time it takes to convert raw materials into finished goods, as measured by the
length of the production cycle or work-in-process.
4. The length of time that finished items must be held for sale during the sales cycle.
5. The average credit period that is being given to consumers.
6. The amount of money needed to cover the business's day-to-day expenses.
7. The typical amount of money needed to make advance payments.
8. The typical credit period that supplier is expected to grant.
9. Wages and other expenditures are not paid on time.

OPERATING CYCLE OF WORKING CAPITAL

The working capital cycle refers to how long it takes for a company to pay cash for supplies
and other expenses. This is also known as the operational cycle. The amount of time between
corporations paying for materials into stock and earning cash from finished goods sales is
referred to as the working capital cycle or operational cycle. The following events make up
the operating cycle.

17
 Cash

Raw
Debtors
material

Finished Work-in-
stock progress

COMPONENTS OF WORKING CAPITAL

The components of working capital are:

 CASH MANAGEMENT

 RECEIVABLES MANAGEMENT

 INVENTORY MANAGEMENT

CASH MANAGEMENT:

For the running of the firm, cash is the most crucial current asset. Cash is the most basic
input required to keep a business working on a continual basis, as well as the ultimate output
expected to be realized through the sale of a company's goods.

18
Neither too much nor too little cash should be kept on hand by the company. The firm's
manufacturing processes will be disrupted by a cash shortfall, while surplus cash will just sit
idle, contributing nothing to the firm's profits. As a result, one of the most important
responsibilities of the financial management is to maintain a healthy cash position. Money
that a company can disburse instantly and without limitation is referred to as cash. Coins,
currencies, and other forms of money are all included in the phrase cash.

RECEIVABLES MANAGEMENT:

Receivables, also known as debtors, are one of the most essential components of current
assets, as they are formed when a company delivers finished goods to a client but does not
get payment for them right away. When a corporation sells its products or services on credit
and does not receive payment right once, it is known as trade credit. It is a crucial marketing
technique that serves as a link between the moment when things are produced and when they
are delivered to buyers.

INVENTORY MANAGEMENT:

Inventories are products held by a company for eventual sale. Inventories are thus one of the
most important factors in a company's ability to achieve the targeted level of sales. Raw
materials, semi-finished commodities, and final products are all included in inventories. Any
asset, whether it is plant, cash, or inventories, should have an optimal degree of investment in
the company. Again, insufficient leads production to be disrupted and sales to be lost.
Inventory management that is effective should ultimately result in the owner's wealth being
maximized. It means that, while management should strive to achieve the financial goal of
flipping inventory as rapidly as possible, it must also assure adequate inventory levels.

19
 Industry Scenario

With the liberalization of the economy, the real estate sector in India has grown in
prominence. As a result of the increasing business prospects and labor force mobility,
demand for commercial and residential space, particularly rental accommodation, has surged.
The retail, hospitality, and entertainment (e.g., hotels, resorts, cinema theatres) businesses,
economic services (e.g., hospitals, schools), and information technology (IT)-enabled
services (like call centers) industries, among others, all affect real estate developments, and
vice versa.

The real estate industry is a major job creator, second only to agriculture in terms of
employment. This is due to the sector's extensive network of backward and forward links
with other parts of the economy, particularly the housing and building industries. Cement,
steel, brick, timber, construction materials, and other ancillary businesses are all dependent
on the real estate industry.

India is emerging as an important business location, particularly in the service sector. The
favorable demographics and strong economic growth makes the country an attractive place to
property investors.

Historically, the real estate sector in India was quite unorganized. There was lack of
uniformity in laws, lack of funds available, high interest rates and lack of transparency in the
system.

But in recent years however, the real estate sector in India has established a trend towards the
greater organization and transparency, accompanied by various regulatory reforms.

20
 Industry Analysis (Porter’s five forces model)

1. Intensity of Industry Rivalry (Neutral to Favorable)

In the residential development industry, developer rivalry is relatively minimal. The

competition for development land is where it is most noticeable. Developers generally strive
to avoid direct competition by 1) developing products in separate markets/locations; 2)
launching products at different times; and 3) diversifying product kinds when it comes to
selling end units.

2. Threat of new entrants (Neutral to Unfavorable)

Authorization from the law

To enter the industry, no particular legal authority is required. When returns become good or
just out of interest, many non-property enterprises find it easy to shift into this industry.

Technology

This industry does not have a lot of technological know-how. Because there is less
opportunity to protect designs, names, and concepts through patents or copyright, they can all
be copied. Large value supply chains can be hired or co-opted, including agents, consultants,
property managers, and competitors' staff.

Capital

Capital is a potential stumbling block for large-scale, specialized initiatives. Small businesses
are also limited in their potential to scale up due to their inability to secure bank finance.

3. Threat of Substitutes (Favorable for End Use; Neutral for Investment)

Residential real estate is in high demand for both its use as a place to live and its investment
potential as a secure, inflation-proof store of wealth. New private housing from any
developer can be replaced as accommodation by 1) a competitive product from another

21
developer; 2) existing private housing for sale or rent: 3) social housing that is available for
purchase or rental.

Product distinctiveness, such as excellent quality and management services, can help
developers avoid competition from other developers.

4. Bargaining Power of Suppliers (Favorable)

4 Key suppliers in the industry are land sellers (government or other developers),
construction contractors and building material & home furnishing manufacturers and capital
providers.

5. Bargaining Power of Buyers (Neutral)

Dependent on the stage in the industry cycle, regulations to protect consumer interests and
financial state of individual developers are made. Near the peak of property cycle, the
combination of investment and end user demand generally outstrip available supply, giving
developers pricing power and leads to outsized returns.

DLF Private Limited

DLF Limited (Delhi Land & Finance) is a commercial real estate developer. It is based in
New Delhi, India, and was founded by Chaudhary Raghvendra Singh in 1946. Shivaji Park,
Model Town, Rajouri Garden, Krishna Nagar, South Extension, Greater Kailash, Kailash
Colony, and Hauz Khas are some of DLF's residential colonies in Delhi. DLF is a developer
of residential, commercial, and retail properties. The group's primary business is real estate
development, which it does through its subsidiaries, joint ventures, and affiliates. The
company operates on a one-of-a-kind business strategy, with revenue generated from
development and rentals. Its diversification across enterprises, segments, and geographies
helps to mitigate market setbacks. DLF has also expanded into infrastructure, special
economic zones, and hotel development. It is involved in all areas of real estate development,
from site acquisition to project design, execution, construction, and marketing. The company

22
also engages in the generation and transmission of electricity, as well as maintenance,
hospitality, and recreational activities.

Prestige Estates Projects Limited

Prestige Estates Projects Ltd is a South Indian real estate development company with offices
in Chennai, Hyderabad, Kochi, Mysore, Mangalore, and Goa. The property portfolio of the
Prestige Group includes residential, commercial, retail, property management, and hotel
properties. Landmark malls, big townships, tech parks, hotels, and luxury residences are
among the projects. The commercial segment accounts for the majority of the company's
completed projects, while the residential segment accounts for the vast majority of new
projects.

Brigade Enterprises Limited

Brigade Group is a major property developer in India, with more than three decades of
experience in creating good experiences for all of our stakeholders. With initiatives in the
Residential, Commercial, Retail, Hospitality, and Education sectors, we have reshaped the
skylines of cities across South India, including Bangalore, Mysore, Mangalore, Hyderabad,
Chennai, and Kochi.

Villas, villaments, penthouses, premium residences, luxury apartments, value homes, urban
studios, independent living for seniors, and mixed-use lifestyle enclaves and townships are
among the residential constructions.

Oberoi realty limited

Oberoi Realty, located in Mumbai, is India's largest real estate developer. It is a publicly
traded company that focuses on premium developments in the residential, office, retail,
hospitality, and social infrastructure sectors; it is a well-known brand with a solid track

23
record. Oberoi Realty excels at creating new developments by focusing on modern
architecture, strong project execution, and high-quality construction. Its goal is to create
aspirational developments for its clients, with unique designs, functional aesthetics, and high-
quality finishing. While its primary focus is on residential projects, it has made its presence
felt across a diversified portfolio by introducing Oberoi Mall, The Westin Mumbai Garden
City and the Oberoi International School, respectively to Mumbai.

Godrej Properties Limited

Godrej Properties Ltd is a multi-city developer of residential, commercial, and township

properties. The majority of the company's revenue comes from property sales. Other sources
of operating revenue include the selling of services, project compensation, and leasing fees.
Residential Real Estate and Commercial Real Estate are the two main business areas in
which the company operates. Each of these segments has initiatives that the company takes
on. Godrej Garden City, Godrej Prakriti, and Godrej Palm Grove are some of the company's
Residential Real Estate developments. Godrej BKC and Godrej Eternia are two of the
company's most important Commercial Real Estate developments.

24
 CHAPTER-2: COMPANY PROFILE

JAIN Ventures Consulting Pvt. Ltd.

(Building trust based relationships globally)

Introduction

The company is whole heartedly supporting the initiatives taken by the Government of India
like ‘Aatma Nirbhar Bharat’ ‘$5 Trillion Economy’ ‘Make in India’ 'Digital India' ‘MSME
Empowerment’ ‘Urban Transformation’ ‘Clean India’ ‘Infrastructure Development under
PPP’ ‘Housing for All’ ‘Smart Cities’ ‘Start-up India’ 'Skill India' etc. We are continually
engaged in knowledge sharing and dissemination of information which is highly relevant and
important to the growth of these areas.

They are continually engaged in knowledge sharing and dissemination of information which
is highly relevant and important to the growth of these areas.

Chief Mentor- Pankaj Jain

An Accomplished CMA, CS, AMT, Alumnus of IIM, Calcutta and Certified Corporate
Director with vibrant spirit of entrepreneurship, having over 30 years of diversified
experience across wide spectrum of industries while working at India and overseas with
proven track record of turning around the financial position of several companies through
dynamic initiatives and helping them to achieve exponential growth even in challenging
times

• While working at top corporate level positions like VP, CFO, CEO, Director, he has
successfully led the growth of reputed business houses such as Super Seals, IAP, ERA Infra,
Logix Group to the next level in challenging times.

25
Mission:

 Environment Protection of the Universe

 Education for all human beings
 Healthcare for all living creatures
 Economic prosperity on inclusive basis
 Creation of more and more entrepreneurs

CSR activities

As part of the Corporate Social Responsibility, they are continuously engaged in various
socio-economic activities. Some of their supporting organizations in this area are as under:

 Supporting PETA India

 Supporting World Wildlife Fund of Nature, India
 Supporting Child rights and You
 Supporting PM Cares Fund

26
 Chapter-3: Research Methodology

BACKGROUND OF STUDY

According to financial managers, cash is the lifeblood of a company. The management of

current or short-term assets and liabilities is referred to as working capital management.
Short-term assets include inventory, loans and advances, debtors, investments, cash and bank
balances, and other short-term assets. Creditors, trade advances, borrowings, and provisions
are all examples of short-term liabilities. It is critical for businesses to manage their working
capital effectively in order to reduce risk.

STATEMENT OF THE PROBLEM

This project deals with the study about “Working Capital Management” of 5 real estate
companies.

The issue explains why less attention has been dedicated to the field of short-term finance,
particularly working capital management. Such indifference could be tolerable if working
capital problems were of minor importance to the company, but good working capital
management is critical to the company's profitability and growth. Indeed. Inadequate
planning and control of working capital is one of the most common causes of business
failure, according to experience.

Need of the study

The study's necessity is a crucial aspect of the endeavor. My goal in conducting this research
is to determine what is causing the deficit of working capital. Working capital is a company's
lifeblood and nerve centre. Working capital is critical to a company's ability to operate
smoothly. Without a sufficient quantity of working cash, no business can succeed. How does
the corporation maintain its market share and goodwill? As a result, that corporation must
keep its cash in order to run the business and meet its day-to-day expenses.

27
OBJECTIVES OF THE STUDY

 To study the sources and uses of the working capital.

 To study the liquidity position through various working capital related ratios.
 To study the working capital components such as receivables accounts, cash
management, inventory management.
 To make suggestions based on the finding of the study.

Scope of Study
The scope of the study is identified after and during the study is conducted. The main scope
of the study was to put into practical the theoretical aspect of the study into real life work
experience. The study of working capital is based on tools like Ratio Analysis, Statement of
changes in working capital. Further the study is based on last 3 years Annual Reports of all 5
companies.

IMPORTANCE OF THE STUDY

Working capital management has a variety of elements that make it an essential issue for
research. Asset management is an important aspect of overall management in any firm. At
the time of its inception, the company places a high value on fixed asset management as part
of its investment decision-making process. However, after the first investment, the
management places a greater emphasis on controlling working capital in the overall day-to-
day financial management. When we look at any financial account, we can see that the
investment in fixed assets is relatively constant, but the working capital fluctuates. A robust
working capital position is a must-have for any successful company. This is shown in
adequate inventory, a low number of debtors, and a limited use of bank working capital
facilities, among other things. As a result, the study of working capital management plays a
significant role in financial management.

28
LIMITATIONS OF THE STUDY

 The duration of the study is short.

 The analysis is limited to just three years of data study (from year 2018 to year 2021)
for financial analysis.
 Limited interaction with the concerned heads due to their busy schedule.
 The findings of the study are based on the information retrieved by the selected unit.
 The financial data is sensitive in nature and the same could not acquire easily.

TYPE OF RESEARCH:

This project “A Study on Working Capital Management of 5 real estate companies ” is

considered as an Analytical research.

Analytical Research is defined as the research in which, researcher has to use facts or
information already available, and analyze these to make a critical evaluation of the facts,
figures, data or material.

METHDOLOGY

In preparing this project the information was collected from the following sources.

Secondary data:

The major source of data for this project was collected through annual reports, profit and loss
account of 3 year period from 2016-2019 & some more information collected from internet
and text sources.

29
SAMPLING DESIGN

 Sampling unit: Financial Statements.

 Sampling Size: Last three years financial statements.

Tools Used: MS-Excel has been used for calculations

TOOLS USED FOR ANALYSIS OF DATA

The data were analyzed using the following financial tools. They are

 Ratio analysis
 Statement of changes in working capital

Plan of Analysis

Data is collected through company’s financials and analysed step-by step:

1. A thorough examination of the company's financials for the last three years is conducted.

2. The data from the financial statement of the company is then entered into the worksheet.

3. Data will be analyzed using various procedures and tables and charts will be created. All
financial statement comments have been made.

4. It is then graphically portrayed using diagrams for better comprehension.

5. The data is analyzed, and conclusions and recommendations are written down.

30
 CHAPTER-4: DATA INTERPRETATION AND ANALYSIS

A) Net Working Capital (NWC)

An analysis of the net working capital will be very helpful for knowing the operational
efficiency of the company.

DLF Pvt. Ltd.

The following table provides the data relating to the net working capital of DLF Pvt. Ltd.

Net Working Capital = Current Assets – Current Liabilities

Years Current Assets (in Current Liabilities Net Working

cr) (in cr) Capital (in cr)
2018-2019 20,236.30 11,049.28 9187.02

2019-2020 21,287.44 11,940.73 9346.71

2020-2021 12,625.75 9,232.62 3393.13

31
 Net Working Capital (in cr)
9187.019999999 9346.709999999
10000 98 98
9000
8000
7000
6000
Net Working Capital
5000
4000 3393.13
3000
2000
1000
0
2018-2019 2019-2020 2020-2021

Interpretation:

In the year 2018-19 Dlf had a working capital of Rs. 9187.02 crore. In the year 2019-20 the
net working capital has increased to Rs 9346.71 showing an increase of nearly 2%. And it
decreased even more in 2020-2021.Thus DLF working capital has decreased over the years.
This shows that the company is deteriorate its liquidity position and don’t has sufficient
working capital for the smooth running of its business.

Prestige estates projects limited

Years Current Assets (in Current Net Working

cr) Liabilities (in cr) Capital (in cr)
2018-2019 11,122.60 12,444.80 -1322.2

2019-2020 10,633.00 12,707.30 -2074.3

32
 2020-2021 12,004.60 11,616.20 388.4

Net Working Capital (in cr)

1000

500 388.4

0
2018-2019 2019-2020 2020-2021

-500 Net Working Capital

-1000

-1500 -1322.2

-2000
-2074.3

-2500

Interpretation:

In the year 2018-19 the company had a negative working capital of Rs. -1322.2 cr. And in
2019-20 it decreased even more to Rs. -2074.3 cr. But the company improved a bit of
liquidity in 2020-21 and had a positive working capital of Rs. 388.4 cr.

33
Brigade enterprises limited
Years Current Assets Current Net Working
(in cr) Liabilities (in cr) Capital (in cr)

2018-2019 3,970.22 3,476.95 493.27

2019-2020 3,758.48 3,504.05 254.43
2020-2021 4,184.37 3,823.35 238.84

Net Working Capital (in cr)

600

493.27
500

400
Net Working Capital
300
254.43 238.84
200

100

0
2018-2019 2019-2020 2020-2021

Interpretation:

In the year 2018-19n the company had a working capital of Rs. 493.27 cr. But it decreased
drastically to Rs. 2544.43 cr in the year 2019-20 as their current assets decreased and current
liabilities were increased. Also in the year 2020-21 their liquidity further reduced and they
had a working a capital of Rs. 238.84 cr.

34
Oberoi realty limited

Years Current Assets (in Current Liabilities Net

cr) (in cr) Working
Capital (in
cr)
2018-2019 5,404.02 325.88 5078.14
2019-2020 5,521.87 1,211.25 4310.62
2020-2021 5,704.29 1,129.52 4,574.77

Net Working Capital (in cr)

5200 5078.14
5000

4800
4574.77
4600 Net Working Capital
4400 4310.62
4200

4000

3800
2018-2019 2019-2020 2020-2021

Interpretation:

In the year 2018-19 the company had a working capital of Rs. 5078.14 cr. But in 2019-20
their working capital decreased to Rs. 4310.62 cr. The company improved its liquidity
position in 2020-21 and showed a increase to Rs. 4574.77 crore.

35
Godrej properties limited

Years Current Assets Current Liabilities Net Working

( in cr) ( in cr) Capital ( in
cr)
2018-2019 5,517.24 4,608.70 908.54
2019-2020 7,926.56 4,784.02 3142.54
2020-2021 11,449.72 5,039.80 6,409.92

Net Working Capital ( in cr)

7000
6409.92
6000

5000

4000 Net Working Capital

3142.54
3000

2000
908.54
1000

0
2018-2019 2019-2020 2020-2021

Interpretation:

In the year 2018-19 the company had a working capital of Rs. 908.54 cr. It increased to Rs.
3142.54 cr in 2019-20 showing a good growth in liquidity and it further increased to Rs.

36
6409.92 cr in 2020-21 showing a good trend. The company has improved its liquidity
position over the years.

37
 CHAPTER-5: FINDINGS, SUGGESTIONS, CONCLUSION

FINDINGS

Years DLF private Prestige Brigade Oberoi Godrej

limited estates enterprises realty properties
projects limited limited limited
limited
2018-2019 9187.02 -1322.2 493.27 5078.14 908.54

2019-2020 9346.71 -2074.3 254.43 4310.62 3142.54

2020-2021 3393.13 388.4 238.84 4,574.77 6,409.92

38
 12000

10000

8000

6000

4000
2018-2019
2019-2020
2020-2021
2000

0
d d d d d
ite ite ite ite ite
lim lim lim lim lim
-2000
at
e ts s ty s
iv jec rise eal rtie
pr o p r pe
F s pr ter ro
i
ro
L te n e p
D-4000 sta d ee O
b
re
j
g ee rig
a o d
ti B G
res
P

The following analysis can be derived from the above graph:

 In all the 5 companies, DLF Ltd. had the highest working capital but it was
decreasing over the years. The pandemic has hit the company really hard and has
affected its liquidity position. DLF is one of the strongest market players in the real
estate industry but they are still facing liquidity challenges.
 Godrej properties limited was the only company who showed a positive trend in these
3 years while others showed a negative trend or negative and then positive. Also in
the year 2020-21 Godrej properties limited had the highest working capital compared
to all the other 4 companies.

39
 Oberoi limited showed an average trend as the working capital decreased in the year
2019-20 but it then increased in 2020-21. So we can say that they are more stable
than other 4 companies as the increase or decrease is not very high, so they are
comparatively stable.
 Brigade enterprises limited is showing a downward trend in their working capital but
they still are a bit stable than others companies as the fluctuations in the numbers is
not that high compared to other companies.
 And lastly if we talk about Prestige estates project limited, they had a negative
working capital in the year 2018-19 and their liquidity further deteriorated in the year
2019-20 but the company improved its position in the year 2020-21 and showed a
positive trend.

40
 SUGGESTIONS

 Working capital of the company has decreasing every year. Profit also decreasing
every year this is not a good sign for the company.
 More investment should be made in the purchase of current assets in order to increase
the working capital of the firm
 Inventories should be maintained at minimum level as it reduces the liquidity of the
current assets.
 The excess balance of cash arises in course of business operations should
immediately be invested in short term securities.
 The Working capital management has to gain more efficiency in order to maintain
smooth running of the business.
 The company shows decreasing trend of working capital and liquidity position
 The company should take precautionary measures for investing and collecting funds
from receivables to reduce the bad debts.

41
 CONCLUSION

The study on working capital management of 5 real estate companies in India

was conducted to analyze the current liquidity and their liquidity trend from
2019-2021.

Different companies showed different trends in regards to their working capital.

DLF had the highest working capitals as it is the largest player in the market but
most of the companies now-a-days are facing liquidity issues due to the covid-
19 pandemic.

But on the whole the company’s liquidity position is deteriorated and overall
industry’s liquidity is affected.

42
 Daily work report

No. of
hours
Date Task assigned Task status worked

Collected the financial statements for top 10 real

26/07/2021 estate companies Completed 5 hrs

Making compressed financial statements for the top

27/07/2021 10 companies of 5 years Completed 5 hrs

Collected the cash flow statements and financial

28/07/2021 ratios for top 10 companies of 5 years Completed 6 hrs

Collecting the historic price data from NSE and BSE

29/07/2021 for top 10 real estate companies for the past 5 years Completed 4 hrs

30/07/2021 reading different financial reports Completed 5 hrs

31/07/2021 Learning about making hypothesis and other concepts In progress 5 hrs

01/08/2021 Sunday

02/08/2021 Learning about making hypothesis and other concepts Completed 4hrs

Read some reports and some research about indian

03/08/2021 real estate industry Completed 5hrs

Going through the websites of the indian real estate

04/08/2021 developers In progress 5 hrs

05/08/2021 Going through the websites of the indian real estate In progress 4 hrs

43
 developers

Going through the websites of the indian real estate

06/08/2021 developers Completed 5 hrs

07/08/2021 Reading various articles and made a learning report Completed 5 hrs

08/08/2021 Sunday

09/08/2021 worked on my summer internship project In progress 5 hrs

10/08/2021 worked on my summer internship project In progress 4 hrs

11/08/2021 worked on my summer internship project In progress 5 hrs

12/08/2021 Holiday

13/08/2021 Going through companies websites In Progress 4 hrs

14/08/2021 Going through companies websites In Progress 5 hrs

15/08/2021 Sunday

16/08/2021 Going through companies websites In Progress 5 hrs

17/08/2021 Going through companies websites In Progress 4 hrs

18/08/2021 Going through companies websites In Progress 5 hrs

19/08/2021 Going through companies websites Completed 6 hrs

20/08/2021 Merging the data into the matrix for analysis In progress 4 hrs

21/08/2021 Holiday

22/08/2021 Sunday

44
23/08/2021 Merging the data into the matrix for analysis In progress 5 hrs

24/08/2021 Researched about different methods of analysis In progress 4 hrs

25/08/2021 Researched about different methods of analysis Completed 5 hrs

Worked on benchmarking of 10 listed real estate

26/08/2021 company of India In progress 4 hrs

Worked on benchmarking of 10 listed real estate

27/08/2021 company of India In progress 4 hrs

Worked on benchmarking of 10 listed real estate

28/08/2021 company of India In progress 5 hrs

29/08/2021 Sunday

Worked on benchmarking of 10 listed real estate

30/08/2021 company of India In progress 5 hrs

Worked on benchmarking of 10 listed real estate

31/08/2021 company of India Completed 5 hrs

Worked on working capital management of

01/09/2021 benchmarked companies In progress 5 hrs

Worked on working capital management of

02/09/2021 benchmarked companies In progress 5 hrs

Worked on working capital management of

03/09/2021 benchmarked companies Completed 4 hrs

04/09/2021 Holiday

05/09/2021 Sunday

45
06/09/2021 Worked on my SIP report In progress 5 hrs

07/09/2021 Worked on my SIP report In progress 4 hrs

08/09/2021 Attended Webinar Completed 4 hrs

09/09/2021 Made my final internship project report In progress 4 hrs

10/09/2021 Made my final internship project report Completed 6 hrs

BIBLIOGRAPHY

Following sources have been sought for the preparation of this Summer Internship Report:
46
 https://www.dlf.in/

 https://www.bloomberg.com/profile/company/PEPL:IN

 https://www.oberoirealty.com/

 http://godrejpropertyindia.com/delhi-ncr

 http://www.jainventures.in/initiatives.php

 https://www.bankofamerica.com/smallbusiness/business-financing/learn/what-is-
working-capital/

 https://www.lendingkart.com/blog/working-capital/

 https://www.bajajfinserv.in/insights/what-are-the-different-types-of-working-capital

47