A

MANAGEMENT THESIES
ON

‘WORKING CAPITAL MANAGEMENT’

IN
‘BAJAJ ALLIANZ LIFE INSURANCE
COMPANY LTD’
FOR
THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE
DEGREE OF MASTER OF BUSINESS ADMINISTRATION (2009-11)

From

SUBMITTED TO: SUBMITTED BY:

MRS. PUSHPA KATARIA KUSUM LATA ASWAL

FACULTY GUIDE MBA-IV

ICFAI UNIVERSITY ENROL NO- 0901120059

DEHRADUN
 TABLE OF CONTENTS

1. Acknowledgement.

2. Introduction of the company.

3. Introduction of the topic

a) Working capital management.

b) Working capital concept

4. Objective of study

a) Main objective

b) Sub objective

5. Research methodology

6. Sources of data collection.

a) Primary data

b) Secondary data

7. Objective of research.

8. Limitation and findings

9. Conclusion and recommendations

10. Bibliography and annexure.

 ACKNOWLEDGEMENT

It is not a single man’s effort which is sufficient for the accomplishment of a

research. No task can be successfully by a single individual.

I readily acknowledge my indebted to my parents whose support, dedication

and honest efforts have given me an immense help in doing this project.

I thank Mrs. PUSHPA KATARIA for her kind support in making my project
report

Last but not the least I record my sincere thanks to all beloved and
respectable persons who helped me and could find any separate mention.

Above all I praise “GOD” the most beneficial, the most merciful that I have
been able to complete my empty 2(synopsis) successfully.

KUSUM LATA ASWAL

 PREFACE

It gives great pleasure to present on the topic of “Working Capital

Management” of Bajaj Allianz Life Insurance limited. I have selected this
topic because to know about the relationship between current assets and
current liabilities.

As “Working Capital Management” holds an important place in the

theory of Finance. A large number of tools and techniques have been
developed in the past to insure optimal allocation of Working Capital
Management funds more than Eighty Percent of finance manager is spent in
dealing with day to day problem which are part & parcel of working capital
requirements of the enterprise. Efficient use of working capital has direct
bearing on profitability of an enterprise. It augments the productivity of the
investment in the fixed assets. Basic survival of the firm may be at stake if
adequate working capital is not available in time. It is essential to maintain
constant supply of working capital for healthy growth of an enterprise.

Management of working capital assumes added significance in the context

of small scale and medium sized industries in our country. Most of them
have weak financial base and limited access to the institutional finance.
Their risk capacity is also low. Working capital management deals with
management of each of the firm current assets in such way that is maximizes
the value of the firm.
 In any economy, the financial sector plays a major role in the mobilization
and allocation of savings. In changing economic environment,
manufacturing industries have to become more competitive, they have to
keep their cost in check an efficient use of working capital would release the
funds locked in the current assets.
 CHAPTER-I

INTRODUCTION
ABOUT
THE COMPANY
 INTRODUCTION OF THE COMPANY

Bajaj Allianz Life Insurance Company Limited is a Union between Allianz

SE, one of the world’s largest Life Insurance companies and Bajaj Auto, one
of the biggest 2- &- 3 wheeler manufacturers in the world.

Allianz SE is a leading insurance conglomerate globally and one of the

largest asset managers in the world, managing assets worth over a Trillion
Euros (Over R. 55,00,000 crores). Founded in 1890 in Berlin, Allianz SE has
over 115 years of financial experience in over 70 countries.

Bajaj group is the largest manufacturer of two-wheelers and three-wheelers

in India and one of the largest in the world.

Today, Bajaj Allianz is one of India’s leading and fastest growing insurance
companies. Currently, it has presence in more than 550 locations with over
60,000 Insurance consultants.
 ALLIANZ

Allianz AG was founded in Berlin in 1890 and shifted its headquaters to

Munich in 1949.the first step to became an international company started
with the opening of a branch office in London in the late 19th
century .after World war second , Golbal Business activities were
gradually resumed.

Allianz opened an office in Paris in the late 1950’s and a management

office for Italy in the 1960’s. These Expansions were followed in the
1970’s by the establishment of the business in Great Britain, the
Neitherland, Spain, Brazil and the United States.In 1986, Allianz aquired
Cornhill insurance PLC, London and the purchase of a Stake in Riunione
Adriatica di Sicurita (RAS), Milan strengthened its presence in western
and southern Europe in the 1980’s. Recently, in Febrauary 08,
2006 ,RAS shareholders approved the mergers with Allianz . In 1990,
Allianz started an expansion into eight eastern European countries with
establishing a presence in Hungary. In the same decade , Allianz also
aquired fireman’s fund, in Insurer in the united state, which was followed
by the purchase of assurances generales de france (AGF), Paris . These
acquisitions were followed by the expansions into Asia with several joint
ventures and acquisitions in China and Korea.Around this time Allianz
expanded its asset management business as well by purchasing for eg,
asset management companies in California. In 2001, Allianz acquired
Dresdner Bank, a large German bank. Allianz group and Dresdner bank
combined their asset management activities by forming Allianz Dresdner
bank asset management. In2002, Michael diekmann succeeded Henning
Schulte-Noelle as CEO of Allianz AG. The Allianz group was
reincorporated under a European Company statue and, as a result of the
cross- border merger with RAS, Allianz converted into European
company (SE- Societies europea) in October 13, 2006. Allianz is now
present in more than Seventy countries with over 177,000 employees . At
the top of the international group is the holding company, Allianz SE,
with its head office in the Munich .Allianz Group provides its more than
sixty million customers worldwide with a comprehensive range of
services in the areas of property and casualty in insurance, health
insurance , life insurance, asset management and banking .

Allianz a global financial power houses.

 Worldwide gross return premiums –Rs4,46,654 cr.

 Third largest asset under management (AUM) and largest amongst

insurance company- AUM of Rs 51,96,959 cr.

 12th largest corporation in the world.

 49.8% of global business from Life insurance.

 Established in 1890, 110 years of insurance expertise.

 BOARD OF DIRECTORS

SENIOR MANAGEMENT

1. CEO- Kamesh Goyal

2. CFO-Rajesh Vishwanathan

3. Head of sales-ECJ Augustine

4. Head of Operations-V Phillip

5. Head of Alternate Channel- Niraj Kumar

6. Chief Investment Officer- Sashi Krishnan

7. Appointed Actuary-Anil Singh

8. Chief of information- Ishita Mukherjee

9. Agency Training- Kalyan singh

10.Head HR-Jaydeep

11.Head of direct marketing channel-Manish Kr.

Dwivedi

12.Head of business procurement-Yogesh Gupta

13.Head of/ bancassurance and NRI business-AS
Narayan

14.Head of marketing and coporate communication-

Akshay Mehrotra

ORAGANIZATION STRUCTURE

 Head office
 Zonal office
 Regional office
 Divisional office
 Branch office
 MANAGEMENT TEAM

CEO- kamesh Goyal

Head of sales- ECJ Augustine

Zonal Manager- Ashok shah

Regional Manager- Dheeraj Jauhri

Divisional Manager- Naveen Srivastava

Branch Manager(2)- Pardeep Chaudhary and Manish Joshi

Sales manager(20)- Manu Rajvanshi(company guide) and

Mr. sameer (Trainer)
[10 SMs under one BM]

[DM,BM, and SMs are of dehradun branch

 HISTORY OF INSURANCE
The insurance sector in India has completed all the facets of competition –
from being an open competitive market to being nationalized and then
getting back to the form of a liberalized market once again. The history of
the insurance sector in India reveals that it has witnessed complete
dynamism for the past two centuries approximately.

With the establishment of the Oriental Life Insurance Company in Kolkata,

the business of Indian life insurance started in the year 1818.

Important milestones in the Indian life insurance business

 1912: The Indian Life Assurance Companies Act came into force for
regulating the life insurance business.

 1928: The Indian Insurance Companies Act was enacted for enabling
the government to collect statistical information on both life and non-
life insurance businesses.
 1938: The earlier legislation consolidated the Insurance Act with the
aim of safeguarding the interests of the insuring public

 1956: 245 Indian and foreign insurers and provident societies were
taken over by the central government and they got nationalized. LIC
was formed by an Act of Parliament, viz. LIC Act, 1956. It started off
with a capital of Rs. 5 crore and that too from the Government of
India.

 The history of general insurance business in India can be traced back

to Triton Insurance Company Ltd. (the first general insurance
company) which was formed in the year 1850 in Kolkata by the
British.
Important milestones in the Indian general insurance business

 1907: The Indian Mercantile Insurance Ltd. was set up which was the
first company of its type to transact all general insurance business.
 1957: General Insurance Council, an arm of the Insurance Association
of India, framed a code of conduct for guaranteeing fair conduct and
sound business patterns.
 1968: The Insurance Act improved for regulating investments and set
minimal solvency levels and the Tariff Advisory Committee was set
up.
 1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India. It was with effect
from 1st January 1973.
107 surers integrated and grouped into four companies viz.
the National Insurance Company Ltd., the New India Assurance
Company Ltd., the Oriental Insurance Company Ltd. and the
United India Insurance Company Ltd. GIC was incorporated as
a company.

Insurance companies in India

IRDA has till now provided registration to 12 private life

insurance companies and 9 general insurance companies. If the
existing public sector insurance companies are considered then
there are presently 13 insurance companies in the life side and
13 companies functioning in general insurance business.
General Insurance Corporation has been sanctioned as the
"Indian reinsurer" for underwriting only reinsurance business.
 List of Insurance companies in India

LIFE INSURERS Websites

Public Sector
Life Insurance Corporation of India www.licindia.com
Private Sector
Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in
Birla Sun-Life Insurance Company Limited www.birlasunlife.com
HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com
ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com
ING Vysya Life Insurance Company Limited www.ingvysayalife.com
Max New York Life Insurance Co. Limited www.maxnewyorklife.com
MetLife Insurance Company Limited www.metlife.com
Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com
SBI Life Insurance Company Limited www.sbilife.co.in
TATA AIG Life Insurance Company Limited www.tata-aig.com
AMP Sanmar Assurance Company Limited www.ampsanmar.com
Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com
GENERAL INSURERS
Public Sector
National Insurance Company Limited www.nationalinsuranceindia.com
New India Assurance Company Limited www.niacl.com
Oriental Insurance Company Limited www.orientalinsurance.nic.in
United India Insurance Company Limited www.uiic.co.in
Private Sector
Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in
ICICI Lombard General Insurance Co. Ltd. www.icicilombard.com
IFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.in
Reliance General Insurance Co. Limited www.ril.com
Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com
TATA AIG General Insurance Co. Limited www.tata-aig.com
Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com
Export Credit Guarantee Corporation www.ecgcindia.com
HDFC Chubb General Insurance Co. Ltd.  
REINSURER
General Insurance Corporation of India www.gicindia.com

Our products
Bajaj Allianz Life Insurance Co Ltd is a unique joint venture among the global giants
Allianz Group (AG) and Bajaj Auto. Allianz AG's world ranking establishes it among the
top insurance companies in the world. Bajaj is the biggest two and three wheeler
manufacturer in the world. Bajaj Allianz Life Insurance Company boasts of a nationwide
presence with 876 offices and over 4 million satisfied customers. The various insurance
products include

Individuals Plans
 Unit Gain Insurances
 Term Care Plans
 Lifetime Care Insurance Policy
 Business Insurance Policies
 Savings And Security Policies For You And Your Family

 Rural Insurance Plan

 Healthcare Insurance
 Financial Insurance
 Pension Plus
 Retirement Plans
 Children's Policies
 Endowment Plans and many more.

Group Insurance Schemes

 Insurance For Employee-Employer Groups
 Insurance For Non-Employer - Employee Groups
 Employees Deposit Linked Insurance
 New Group Superannuation Scheme
 New Group Gratuity Care Scheme
Special Insurance Policies for NRI's
 Investgain Endowment Plan
 Cashgain Money Back Plan
 ·Childgain Kids Special Plan
 Swarna Vishranthi

CONTACT DETAILS:
Toll Free Number:1800-233-7272
Corporate Office Address
Bajaj Allianz Life Insurance Company Ltd.
GE Plaza,
Airport Road,
Yerawada,
Pune 411 006
Phone :91-20-30587888
Fax :91-20-40111502
Email :life@bajajallianz.co.in
Website:http://www.allianzbajaj.co.in/lifeinsurance/
ACTIVITIES OF THE COMPANY

A
C
T

SALES I
FINANCE &
V
IT
I
T
RESEARCH &
MARKETING I DEVELOPMENT
E
S

TECHNICAL &
O OPERATION
F

T HUMAN
H RESOURCE
E &LEGAL

C QUALITY E
O ASSURANC
M
P
COMPANY PERFORMANCE
A (FY 20010-11)
N
Y
For the year ended 31st march, 2008 our Company achieved a sale growth of 17.5% on an
expanded base arising from 27.5% growth in the previous year. Net profit of the Company
increased 77.5%to Rs. 1910 Mn compared to Rs. 1076 Mn in 2006-07. Operating margin
increased by 307 basis points to 7.5%

Exceptional items for the year include Rs. 130.5 Mn towards amortization of VRS costs.
Earnings
Share is Rs. 80 compared to Rs. 45.1 last year.
Achievement of the company

Our Achievements

Bajaj Allianz has received iAAA rating, from ICRA Limited, an associate of
Moody's Investors Service, for Claims Paying ability. This rating indicates
highest claims paying ability and a fundamentally strong position.
Bajaj Allianz General Insurance has received the prestigious "Business
Leader in General Insurance", award by NDTV Profit Business Leadership
Awards 2008. The company was one of the top three finalists for the year
2007 and 2008 in the General Insurance Company of the Year award by
Asia Insurance Review.
 CHAPTER-II
INTRODUCTION
ABOUT
 THE
DEHRADUN UNIT

INTRODUCTION ABOUT THE UNIT

(DEHRADUN BRANCH)
INTRODUCTION

Bajaj Allianz General Insurance Company Limited is a joint venture

between Bajaj Finserv Limited (recently demerged from Bajaj Auto
Limited) and Allianz SE. Both enjoy a reputation of expertise, stability and
strength.
Bajaj Allianz General Insurance received the Insurance Regulatory and
Development Authority (IRDA) certificate of Registration on 2nd May,
2001 to conduct General Insurance business (including Health Insurance
business) in India. The Company has an authorized and paid up capital of Rs
110 crores. Bajaj Finserv Limited holds 74% and the remaining 26% is held
by Allianz, SE.
As on 31st March 2010, Bajaj Allianz General Insurance maintained its
premier position in the industry by achieving growth as well as profitability.
Bajaj Allianz has made a profit before tax of Rs. 180 crores and has become
the only private insurer to cross the Rs.100 crore mark in profit before tax in
the last four years. The profit after tax was Rs. 121 crores, 27% higher than
the previous year.

Bajaj Allianz today has a countrywide network connected through the latest
technology for quick communication and response in over 200 towns spread
across the length and breadth of the country. From Surat to Siliguri and
Jammu to Thiruvananthapuram, all the offices are interconnected with the
Head Office at Pune.

Vision

To be the first choice insurer for customers

To be the preferred employer for staff in the insurance industry
To be the number one insurer for creating shareholder value

Mission

As a responsible, customer focused market leader, we will strive to

understand the insurance needs of the consumers and translate it into
affordable products that deliver value for money.

A Partnership Based on Synergy

Bajaj Allianz General Insurance offers technical excellence in all areas of
General and Health Insurance as well as Risk Management. This partnership
successfully combines Bajaj Finserv's in-depth understanding of the local
market and extensive distribution network with the global experience and
technical expertise of the Allianz Group. As a registered Indian Insurance
Company and a capital base of Rs. 110 crores, the company is fully licensed
to underwrite all lines of general insurance business including health
insurance.
 COMPANY EVENTS
Bajaj Allianz offers insurance covers for various events such as Musical
events, Award ceremonies, Product launches, Fashion shows and
Exhibitions.

Films and Television

Making a film involves heavy investment and consequently involves

significant risk. Thus, production houses require insurance coverage. This
insurance cover is tailor-made for all aspects of the film industry like:-
Films & documentaries
Television serials
Advertising films etc
Sports Tournaments

The policy provides specific coverage for sporting tournaments like:-

Cricket
Hockey
Golf
Athletics
Football
Swimming etc.

Events

Event management is about organization and execution of an event. Bajaj

Allianz offers insurance cover for various events ensuring that you stay
protected against any unforeseen risks, and all the hard work that goes into
managing an event does not go to waste. We provide insurance cover for the
following events:-
Musical events
Award ceremonies
Product launches
Fashion shows
Exhibitions etc

Scope of Coverage

The insurance coverage is highly customised to suit specific requirements.

The basic coverage includes the following :-
Event Cancellation

 Cast Insurance*
 Extra Expenses*
 Film Negative*
 Fire (Allied Peril)
 Personal Accident
 Money (in transit & in safe)
 Hospital Cash
 Burglary
 Public Liability
 DEPARTMENTS OF THE COMPANY

 HUMAN RESOURSE
 FINANCE
 PURCHASE
 MAINTANANCE
 QUALITY ASSURANCE

HEADS OF DEPARTMENTS OF THE

COMPANY
CEO- kamesh Goyal
Head of sales-ECJ Augustine
Zonal Manager-Ashok shah
Regional Manager- Dheeraj Jauhri
Divisional Manager-Naveen Srivastava
Branch Manager(2)- Pardeep Chaudhary and Manish Joshi
Sales manager(20)- Manu Rajvanshi(company guide) and
Mr. sameer (Trainer)
[10 SMs under one BM]
[DM,BM, and SMs are of dehradun branch

SWOT ANALYSIS

STRENGTH

 Goodwill of company
 Superior quality and service to provide maximum benefits to
customers.
 The family environment in the company.
 Continuous growth.
 Market share of the company.
  Fully Automation of the company.

WEAKNESSES
its all- India presence and good track record makes Bajaj Allianz a fertile
company for poaching by other private insurance companies

OPPORTUNITY
a vast, untapped potential for health insurance, geographical expansion. De-
tariffing will offer differential pricing for our customers. Approximately of
75% market still not being insured.

THREATS
An industry where every one focuses on increasing market share and
aggressiveness greatly increases pressure on profitability. More than 20
companies to fight with for the market share and more to come, mindest of
people towerds insurance, a higer number of people who do not take risk in
India, lack of faith of people on private players.
 CHAPTER-III
INTRODUCTION
ABOUT
 THE TOPIC -
WORKING CAPITAL
MANAGEMENT

Working capital management

Working Capital Management is the process of planning and controlling the
level and mix of the current assets of the firm as well as financing these assets.

Decisions relating to working capital and short term financing are

referred to as working capital management. These involve managing the
relationship between a firm's short-term assets and its short-term liabilities.
The goal of Working capital management is to ensure that the firm is able to
continue its operations and that it has sufficient cash flow to satisfy both
maturing short-term debt and upcoming operational expenses.

WORKING CAPITAL:-
Definition Working Capital
Working Capital is the amount of funds necessary to cover the cost of operating
the enterprise.
 Shub
in

The term working capital refers to the amount of capital which is readily
available to an organization. That is, working capital is the difference between
resources in cash or readily convertible into cash (Current Assets) and
organizational commitments for which cash will soon be required (Current
Liabilities).

Current Assets are resources which are in cash or will soon be converted into
cash in "the ordinary course of business".

Current Liabilities are commitments which will soon require cash settlement
in "the ordinary course of business.

Thus:

WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIES

Current Assets:-
 Liquid Assets (cash and bank deposits)
 Inventory

 Debtors and Receivables

 Prepaid Expenses

 Marketable Securities

Current Liabilities:-
 Bank Overdraft
 Creditors and Payables

 Notes Payable
 Accrued Expenses

 Other Short Term Liabilities

WORKING CAPITAL- CONCEPTUAL

FRAMEWORK

The concept of working capital has been matter of greater controversy

among the financial wizards. Broadly speaking different view on
working capital can be categorized into two groups, viz. gross concept
and net concept these two concepts are not to be regarded as mutually
exclusive each has its relevance in specific situation .gross working
capital is deal with the problem of managing individual current assets
in day to day operations. Thus gross concept is in nature of a
quantitative definition that focuses attention on the level of current
assets for given activity.
The emphasis ,however ,shift when we consider the net working
concept .this is a qualitative definition which focuses attention on the
character of the sources from which the fund have been procured to support
that portion of current liabilities

WORKING CAPITAL MANAGEMENT

INTRODUCTION TO THE TOPIC:-

It involves the relationship between a firm's short-term assets and its short-
term liabilities. The goal of working capital management is to ensure that a
firm is able to continue its operations and that it has sufficient ability to
satisfy both maturing short-term debt and upcoming operational expenses.
The management of working capital involves managing inventories,
accounts receivable and payable, and cash.

Working capital is represented by current assets .It constitutes a dominant

segment of investment ,particularly in manufacturing enterprises
management of working capital assumes added significance in the context of
small scale and medium sized industries in our country .most of them have
weak financial base and limited access to the institutional finance .their risk
capacity is also low. An effort is to reduce or optimize its size releases funds
and improves profitability working capital management deals with
management of each of the firm’s current assets in such a way that
maximizes the value of the firm.
Shortage of funds for working capital as well as the uncontrolled
over expansion has caused many business to fail and in less severe cases has
stunted their growth .specially in small firms, working capital management
may be the factor that decides success or failure: in large firms, efficient
working capital management can significantly affect the firm’s risk, returns
and share price.
Commercial banks are the major source of finance to the industry and
commerce banks in India provides mainly short term credit for financing
working capital needs .the various types of advances provided by them are:
loans cash credit and overdrafts are running accounts .borrower can draw
funds up to the sanctioned credit limit interest is charged on the daily
outstanding amount.

WORKING CAPITAL CONCEPT:-

There are two concept of working capital:
 Balance Sheet Concept
 Operating Cycle or Circular Flow Concept

Balance Sheet Concept

There are two interpretation of working capital under the Balance
sheet concept.

 Gross working capital

 Net working capital

 Gross working capital:-

The terms “gross working capital “, refers to the firms investment in current
assets .current assets are the assets which can be converted into a cash within
an accounting year .and includes cash, short term securities, debtors bill
receivable, and stock also referred to as total current assets.

 Net working capital:-

The term net working capital can be defined as two ways:
(I) The most common definition of net working capital (NWC) is the
difference B\W
Current assets &current liabilities.

(ii) NWC is that portion of firm’s current assets which is financed with long
term funds.
Working capital management involves not only administration of firm’s
current
assets: viz. cash and marketable securities, receivables and inventory –
but also the
financial needed to support current assets.
Current assets of a typical manufacturing firm account for more than
half of its total
assets Firms invest in inventory, which consist of raw material, work in
progress
and finished goods .the cost of holding inventory includes not only
storage cost or
risk of obsolescence but also the opportunity cost of capital.

Another important current assets is account receivable. When one company

sells goods to another company or a govt. agency it does not usually expect
to be paid immediately. This trade credit builds up account receivable.

The other important Current Assets is cash & marketable securities.

Current assets may typically vary from industry to industry .A company
should monitor and control inventory and receivables closely. In a typical
fast growing company investment in such assets can go out of control. Too
few current assets may result in frequent shortage and problem in smooth
operations of the firm, while excessive investment in current assets in sub
optimal return on investment.
 A firm may finance current assets through a variety of short term loans. A
typical small company resorts to current assets financing through current
liabilities alone these firms do not have access to long term capital market.
Some firm do get finance through banks and from other private financers at
a high interest rate.
Short term financial decision involves management of short term
assets and liabilities and usually they are easily reversed .A finance manager
responsible for short term financial decisions does not have look far into the
future.

The fundamental issues in management in the working capital

are:-

 The optimal of investment in the current assets.

 The appropriate mix of short term and long term financing used to
support this investment in the current assets.
Operating Cycle or Circular Flow Concept.

The circular flow concept of working capital is based upon this operating
or working cycle of a firm. The cycle starts with the purchase of raw
material and other resources and ends with the realization of cash from
 the sale of finished goods. It involves purchase of raw material and
stores, its conversion into stock of finished goods through work-in-
progress with progressive increment of labour and service costs,
conversion of again from cash to purchase of raw material and so on. The
time duration required to complete one cycle determines the requirements
of working capital-longer the cycle, large is the requirement of working
capital.

Thus gross operating cycle of a firm is equal to the length of the

inventories and receivables conversion period. Thus

Gross Operating Cycle = RMCP + WIPCP + FGCP + RCP

Where: - RMCP = Raw Material Conversion

Period
WIPCP = Work-in-process Conversion
Period
FGCP = Finished Goods Conversion
Period
RCP = Receivables Conversion
period

Net operating cycle period = Gross operating cycle Period -

Payable
Deferral Period

NEED FOR WORKING CAPITAL

The need for working capital to run day to day business activities cannot
be overemphasis. We will hardly find a business firm which does not
require any amount of working capital.
 We know that the firm aims at maximizing the wealth of the shareholder.
In its endeavor to maximize shareholder wealth the firm should earn
sufficient return from its operation earning a steady amount of profit
requires successful sales activity. The firm has invested enough funds in
current assets for the success of sales activity. Current assets are needed
because sales do not convert into cash instaneously. There is always
operating cycle involved in the conversion of cash.

THE IMPORTANCE OF GOOD

WORKING CAPITAL MANAGEMENT

 Solvency of the business-

 To Maintain good will-
 Easy Loans-
 Cash Discount-
 Regular Supply of Raw Material-
 Regular Payment of Salary, Wages, Other day-to-day expenses-
 Exploitation of favorable market conditions-
 Ability to face crisis-
 APPROACHES TO WORKING
CAPITAL MANAGEMENT:-

The objective of working capital management is to maintain the optimum

balance of each of the working capital components. This includes making
sure that funds are held as cash in bank deposits for as long as and in the
largest amounts possible, thereby maximizing the interest earned. However,
such cash may more appropriately be "invested" in other assets or in
reducing other liabilities.

Ratio analysis can be used to monitor overall trends in working capital and
to identify areas requiring closer management.

The individual components of working capital can be effectively managed

by using various techniques and strategies

When considering these techniques and strategies, departments need to

recognize that each department has a unique mix of working capital
components. The emphasis that needs to be placed on each component
varies according to department. For example, some departments have
significant inventory levels; others have little if any inventory.

Furthermore, working capital management is not an end in itself. It is an

integral part of the department's overall management. The needs of efficient
working capital management must be considered in relation to other aspects
of the department's financial and non-financial performance.
 USES OF WORKING CAPITAL
MANAGEMENT

Working Capital is the money used to make goods and attract sales. The less
Working Capital used to attract sales, the higher is likely to be the return on
investment. Working Capital management is about the commercial and
financial aspects of Inventory, credit, purchasing, marketing, and royalty and
investment policy. The higher the profit margin, the lower is likely to be the
level of Working Capital tied up in creating and selling titles. The faster that
we create and sell the books the higher is likely to be the return on
investment.
 MANAGEMENT OF WORKING
CAPITAL

Working Capital management involves the problem of decision making

regarding investment in various current assets with an objective of
maintaining the liquidity of funds of the firm to meet its obligation promptly
and efficiently. The basic goal of working capital management is to manage
the current assets and current liabilities of a firm in such a way that a
satisfactory level of working capital is maintained, it is neither inadequate
nor excessive.

The management of working capital has-been studies under the following

three heads-

1- Management of Cash Balance.

2- Management of receivable.

3- Management of Inventory.

1- Management of Cash Balance: -

Cash is one of the current assets of a business. It is needed at all times to

keep business concern should always keep sufficient cash for meeting its
obligations. Any shortage of cash will hamper the operations of a concern
and any excess of it will be unproductive.
 Cash not only include hard cash but also include which can be easily
converted into cash with in no time.

Tool for Cash Control:-

a) Cash Budget.
b) Inflow or Outflow of cash.

c) Ratio Analysis.

2- Management of receivable: -

“Receivable result from credit sales”. A concern is required to allow

credit sales in order to expand its sales volume. It is not always possible
to sell goods on cash basis only. Sometimes, other concerns in that line
might have established a practice of selling goods on credit basis. Under
these circumstances, it is not possible to avoid credit sale without
adversely affecting sale.

Tool for receivable control:-

a) Deciding acceptable level of risk.

b) Terms of credit sale.

c) Credit collection policy.

3- Management of Inventory: -
Inventories mean the stock of the product and the components of the
product that is Raw Material, W-I-P, Finish good, Spares. Inventories
hold the prime position among the current assets in India. In India, about
60% of the current assets are representing by inventories.

Thus large part of working capital is invested in inventories. The

management of inventories is therefore necessary to avoid heavy
losses due to leakage, theft and wastage because neglecting the
management of inventories may jeopardize the long run profitability
of the concern and the concern may fall ultimately. Inventory
management will minimize these costs.

Tool for Inventories control:-

a) Classification and identification of inventories.

b) Adequate storage facilities.

c) Record of inventories.

d) Standardization and simplification of inventories.

e) Use the appropriate method of inventory control for ex. - JIT,

HML, EOQ, FSN etc.
 f) Intelligent and experience person.

Sources of Working capital

 Long term sources (Permanent or Fixed)

 Short term Sources (temporary)

Permanent or Fixed Temporary or

Variable
Permanent or Fixed Source:-
Permanent or Fixed Working Capital is the minimum amount which is
required to ensure effective utilization of fixed facilities and for maintaining

 Shares the  Commercial bank

 Debentures  Indigenous bankers
 Public deposits  Trade creditors
 Ploughing back of  Installments credit
profits  Advances
 Loans from  Account receivable
financial  Accured expenses
institutions  Commercial papers

circulation of current assets. There is a minimum level of current assets

which is continuously required by the enterprise to carry out its business
operation.

Characteristics of Permanent Working Capital:-

 It is classified on the basis of the time period.

 Its Size increase with the growth of business operation

  It constantly changes from one asset to another and continues to

remain the business process.

Some of the sources of Permanent Working Capital are given below:-

Shares: Issue of share is the most important source for raising the
permanent or long term capital. A company can issue various types of shares
as equity shares, preference share and differed shares. According to
company act, 1956 a public company cannot issue differed shares. As far as
possible, a company should raise the maximum amount of permanent capital
by the issue of share.

Debentures: A debentures is an instrument issued by the company

acknowledging its debt to its holder. It is also an important method of raising
long term or permanent working capital. The debenture holders are the
creditors of the company. A fixed rate of interest is paid on debenture. The
interest on debenture is a charge against profit and loss account.

Public deposits: public deposits are the fixed deposit accepted by a

business enterprise directly from the public. This source if raising short term
and medium term finance was very popular in absence if banking facilities
earlier time period 6 month to 1 year. But now a day even long term deposits
for 5 to 7 year are accepted by the business houses. Public deposit as a
source of finance have a large number of advantages such as very simple and
convenient source of finance , taxation benefit , trading on equity, no need of
securities and an inexpensive source of finance.

Ploughing Back Of Profit: Ploughing back of profit means the re-

investment by concerns of its surplus earning in its business. It is an internal
source of finance and is most suitable for an established firm for its
expansion, modernization and replacement etc.

Loans from financial institution: Financial Institution such as

Commercial bank, Life Insurance Corporation, Industrial Finance
Corporation of India etc. also provides short term and long term loans. This
source of finance is more suitable to meet the medium of working capital.
Interest is charged on such loans at a fixed rate and the amount of the loan is
to be repaid by way of installments in a number of years.

Temporary or variable source:-

Temporary Working Capital is the amount of Working Capital which is
required to meet the seasonal demand and some special exigencies.

Characteristics of Temporary Working Capital:-

It is not always gainfully employed, though it may change from one asset to
another asset, as permanent capital does.

It is particularly suited to business of a seasonal or cyclical nature

Some of the sources of Temporary Working Capital are given below:-

Commercial bank: Commercial banks are the most important

source of short term capital. Different forms in which the bank normally
provide loans and advance are as follows-

Loans: When a bank an advance in lump sum against some security it

is called a loan. Commercial bank generally provides short term loans up to
1 year for meeting working capital requirement.

Overdrafts: Overdrafts means an agreements with a bank by which a

current account holder is allowed to withdraw more than the balance to his
credit up to a certain limit.

The interest is charges of daily overdrawn balances. The main difference

between cash credit & overdraft is that overdraft is allowed.

 Indigenous Bankers: Private money lenders and other country

bankers used to be the only source of finance, prior to the
establishment of commercial banks. They charge a very high rate of
interest but now a day with development of commercial banks, they
have lost their monopoly but even today some houses have to depend
upon indigenous bankers for obtaining loans to fulfill their
requirement.

 Trade creditors: Trade credit refers to the credit extended by the

suppliers of goods in the normal course of business. The trade credit
 arrangement of a firm with its suppliers in an important source of
short term finance. The main advantages of trade credit as a source of
short term finance include:

 It is an easy and convenient method of finance.

 It is flexible as the credit increases with the growth of

the firm.

 It is informal and spontaneous source of finance.

 Installment Credit: This is another method by which the assets

are purchased and the possession of goods is taken immediately but
the payment is made in installments over a predetermined period of
time generally, interest is charged on the unpaid price or it may be
adjusted in the price. But in any case it provides funds for sometimes
and is used as a source of short term working capital by many
business houses which have difficult fund position

 Advances: Some business houses get advances from

their customers and agents against orders and this source is a short
term source of finance for them. It is a cheap source of finance and
in order to minimize their investment in working capital, some
firm having long production cycle, specially the firms
 manufacturing industrial products prefer to take advances from
their customer.

 Account receivable: Another method of raising short-term

finance is through account receivable credit offered by commercial
banks and factors.

Accrued expenses: Accrued expenses are the expenses which have

incurred but not hence not yet paid also. These simply represent a liability
that a firm has to pay for the services already received by it. The most
important item of accruals is wages and salaries, Interest and taxes.

Commercial papers: Commercial paper represents unsecured promissory

notes issued by the firm to raise short-term funds. It is an important money
market instrument in advance countries like U.S.A. In India, the Reserve
Bank of India introduced commercial paper in the India money market on
the recommendation of the working group on Money Market (Vaughal
Committee).

FACTORS DETERMINING WORKING

CAPITAL REQUIREMENT
1 Nature or Character of business

2 Size of Business/ Scale of Operation

3 Production policy

4 Manufacturing Process/Length of production Cycle

5 Seasonal variations

6 Working capital cycle

7 Rate of Stock Turnover

8 Credit policy

9 Business Cycle

10 Rate of Growth of Business

11 Earning Capacity and Dividend Policy

12 Price Level Changes

13 Other Factors

ITEMS AFFECTING THE LEVEL OF WORKING CAPITAL

 Items that reduce Working Items that increase Working
Capital levels for publishers Capital levels for publishers

1-Increased profit margins 1- Lower profit margins 

2- Customers who pay promptly 2- Long print runs except where all
the books are required on publication
e.g. School and university textbooks

3- Inventory which is sold and paid 3- Slow authors who deliver late and
for quickly by customers after whose manuscripts require
publication substantial editing

4- Lower Inventory levels by 4- Holding paper stock unless market

reducing print quantities and working conditions demand and the savings
with printers who will deliver are large
quickly and produce low print runs
economically

5- Successful promotion that speeds 5- Slow schedules for the

up the rate of sale development of new titles 
6- Making advance payments to
6- Slow schedules for the
printers
development of new titles 
MEASURES TO IMPROVE WORKING
CAPITAL MANAGEMENT:-

The essence of effective Working capital management is proper cash flow

forecasting. This should take into account the impact of unforeseen events,
market cycles, loss of a prime customer and actions by competitors. The
effect of unforeseen demands of Working capital should be factored in.
It pays to have contingency plans to tide over unexpected events. While
market-leaders can manage uncertainty better, even other companies must
have risk-management procedures. These must be based on objective and
realistic view of the role of Working capital.

Addressing the issue of Working capital on a corporate-wide basis has

certain advantages. Cash generated at one location can well be utilized at
another. For this to happen, information access, efficient banking channels,
good linkages between production and billing, internal systems to move cash
and good treasury practices should be in place.

An innovative approach, combining operational and financial skills and an

all-encompassing view of the company’s operations will help in identifying
and implementing strategies that generate short-term cash. This can be
achieved by having the right set of executives who are responsible for
setting targets and performance levels.
Effective dispute management procedures in relation to customers will go
along way in freeing up cash otherwise locked in due to disputes. It will also
improve customer service and free up time for legitimate activities like sales,
order entry and cash collection. Overall, efficiency will increase due to
reduced operating costs.

Collaborating with your customers instead of being focused only on own

operations will also yield good results. If feasible, helping them to plan their
inventory requirements efficiently to match your production with their
consumption will help reduce inventory levels. This can be done with
suppliers also.

WORKING CAPITAL FINANCING POLICY

 HEDGING FINANCING POLICY

 CONSERVATIVE FINANCING POLICY

 AGGRESSIVE FINANCING POLICY

Hedging financing policy: This requires that financing of each asset

would be offset with a financing of each asset would be offset with a
financing instrument of approximately the same maturity. Short term or
seasonal variations in current assets would be financed with short term debt.
The fixed assets and the permanent component of current assets would be
financed with long term debt or equity. And the firm can adopt a financial
plan which matches the expected life of source of fund s raised to finance
assets.
Conservative financing policy: A firm can adopt a conservative
approach in financing its current and fixed assets. a financial policy of the
firm is said to be conservative when its depends more on long term funds for
financing needs .under a conservative plan, the firm finances its permanent
assets and also a part of temporary current assets, with long term financing .

Aggressive financing policy: A firm may be aggressive in financing its

assets. An aggressive policy is said to be followed by the firm when it uses
more short term financing than warranted by matching plan .under a
aggressive policy, the firm finance a part of permanent current assets with
short term financing .

Principles OF WORKING CAPITAL

management
 Principle of Risk Variation: Risk here refers to the inability
of a firm to meet its obligations and when they become due for
payment. Large investment in current assets with less dependence on
short term borrowing increases liquidity, reduce risk thereby
decreases the opportunity for gain or loss. On the other hand less
investment in current assets with greater dependence on short –term
borrowings increases risk, reduces liquidity and increases
profitability. In other words, there is a definite inverse relationship
between the degree of risk and profitability.

 Principle of Cost of Capital: The various sources of raising

working capital finance have different cost of capital and the degree
of risk involved. Generally, higher the risk is the lower is the cost and
lower the risk higher the cost. A sound working capital management
should always try to achieve a proper balance between these two.

 Principle of Equity Position: This principle is concerned

with planning the total investment in current assets. According to this
principle, the amount of working a\capital invested in each component
should be adequately justified by a firm’s equity position. Every rupee
invested in the current assets should contribute to the net worth of the
firm.

 Principle of Maturity of Payment: This principle is

concerned with planning the sources of finance for working capital.
 According to this principle, a firm should make every effort to relate
maturities of payment to its flow of internally generated funds.

FORECAST/ ESIMATE OF WORKING

CAPITAL REQUIREMENT
“Working capital is the life blood and controlling never centre of a
business.” No business can be successfully run without an adequate amount
of working capital. To avoid the shortage of working capital at once, an
estimate of working capital requirements should be made in advance. For a
manufacturing organization, the following factors have to be taken into
consideration while an estimate of working capital.

Factor Requiring Consideration While Estimating Working Capital

1 Total costs incurred on material, wages and overheads.

The length of time for which raw material are to remain In stores before they are
2
issued for production.
 The length of sales cycle during which finished goods are to be kept waiting for
3
sales.
The length of the production cycle or work in process, i.e., the time taken for
4
conversion of raw material into finished goods.

5 The average period of credit allowed to customers.

6 The amount of cash required to pay day-to-day expenses of the business.

7 The average amount of cash required to make advance payments, if any.

8 The average credit period expected to be allowed by suppliers.

9 Time-lag in the payment of wages and other expenses.

ANALYSIS OF WORKING CAPITAL:-

There are three Techniques to analysis the working capital

 Schedule of change in working capital

 Ratio Analysis
 Fund statement

Schedule of change in Working Capital

The working capital of a business concern is subject to change due to several
business transactions. Working Capital represents excess of current assets
over current liabilities. The Schedule of Change in Working Capital presents
a detailed and analytical picture of changes in current assets and current
liabilities during two balance sheet dates.

Ratio Analysis
Ratio is one of the methods of analyzing financial statement. Ratio analysis
measures the Profitability, Efficiency and Financial soundness of the
business

According to Myers, ratio analysis is a “study of relationship among

the various financial factors in a business”.

Fund statement
Fund flow statement is the technique of analyzing and interpreting the
financial statement of business concern. It is a technical device designed to
analyze the changes in the financial or working capital position of a business
enterprise between two dates.
The Fund Flow Statement is a statement, depicting change in working
capital. It is also termed as a ‘statement of source and Application of Funds’,
‘Statement of Change in Financial Position’, ‘Statement of Change in
Working Capital’.

TECHNIQUES OF FORECASTING
WORKINGCAPITAL
1. Operating cycle method
2. Forecasting of current assets and current liabilities
3. Cash forecasting method
4. Projected balance sheet method
5. Profit & loss adjustment method
Operating cycle method:-
Operating cycle is the time duration with in one cycle of business operation
is completed. Business operations involve a number of stages from purchase
of raw material till conversion of receivable into cash.

Forecasting of Current Assets and Current

Liabilities:-
This is the Traditional method of forecasting the Working Capital
requirements. Working Capital is the excess of Current Assets over Current
Liabilities; its requirement can easily be forecasted by making the estimate
of the amount of each component of current assets and current liabilities.
The procedure for estimating the component is as under:-

 Stock of Raw-materials- The average amount of such stock of

raw-materials would depend upon the quantity of raw-materials
required for production during a particular period as well as upon the
average time taken in obtaining fresh delivery.

 Stock of Work-in-Progress - Raw-materials, wages, overheads are

included in the cost of work-in-progress. In order to determine the
stock of work-in-progress, the time-period for which the inputs will be
in the process of production will be determined.
  Finished Goods Stock- Finished goods are not immediately sold
these are to be kept in godowns or warehouses for certain period. This
is an important factor in determining the amount to be locked up in
finished goods stock. On the basis of year’s production, the amount of
finished goods for the storage period may be calculated.

 Sundry Debtors- The amount of capital locked up in sundry debtors

can be computed on the basis of credit sales, period of credit
allowed/time lag in collecting the payments.

 Cash and Bank Balances- These are estimated on the basis of past
experience

 Sundry Creditors- This is estimated on the basis of credit purchases

and the time lag in payments to creditors/credit period allowed by
suppliers of raw-materials.

 Outstanding Expenses – These are ascertained having considered the

time lag in payment of various types of expenses.

Cash forecasting method:

This method is very much related to cash budgeting and it attempts to

estimate the cash surplus and deficiency.
Every operating cycle starts with a cash outflow and after passing through
various channels it ultimately ends with an inflow of cash. A statement of
month, cash forecast is prepared which includes cash inflow and outflow for
the various methods. The difference between the total cash flow will indicate
surplus or deficiency for which necessary adjustment can be planned in
advance.

Cash turnover = No. of days in operating period

Duration of cash cycle in days

Projected balance sheet method:-

Under this method, various items of assets and liabilities (both long-term as
well as short-term) are estimated for the future period. On the basis of these
assets and liabilities, a projected Balance Sheet is prepared and then
Working Capital estimate is made by deducting current liabilities from the
current assets.

Profit & loss adjustment method:-

According to this method, estimated profit is calculated first on the basis of
transactions likely to take place in future. Working Capital magnitude is
ascertained by making necessary adjustments for cash inflow and outflow in
the estimated profit.

Objective of study
The objective for doing my MT is to make myself capable for moving
forward in corporate world, to gain knowledge & experience &know how to
work in the organization environment. It will help me to gain more & more
about corporate sector, which was very essential for me to do. There- fore I
have also done my summer internship on bajaj Allianz Life Insurance Co.
Ltd. to improve my capabilities.

Main objective

To analyze how ‘working capital management’ method is done in Bajaj

Allainz life Insurance Co. Ltd.

SUB OBJECTIVE

 To see the difference between the theoretical knowledge & practical

knowledge.

 To know about industrial environment.

 To know how theoretical knowledge apply in the practical approach.

 To know the techniques of working capital management in their

business.

 To know whether they open to adopt new methods and techniques to

manage their financial resources better.

 To know whether they are satisfied with the changes or not.

 To know what are their option to current credit delivery mechanism.

 To know the signals of changes.

 To know the liquidity position of the firm.

 To search the new methods and configuration of data.

 Chapter–iv
about
Research -
methodology/
Analyzing
And
finding
 Research methodology
The purpose of the methodology is to describe the process involve in the
research work. This includes the overall research design, the data collection
method.
Research Methodology refers to the various sequential steps (along with a
rationale, of each such steps) to be adopted by a researcher in studying a
problem with certain object or objectives in view. It would be appropriate to
mention that research project are not susceptible to any one complete and
inflexible sequence of steps and type of problems to be studied will
determine the particular steps to be taken and their order too.

SOURCES OF DATA COLLECTION

Data was collected by using both primary and secondary methods. In

primary method of data collection personal interview and questionnaire was
used and in case of secondary ways of data collection the magazines,internet
etc.

1. Primary Data – It is collected through survey with the help of

structured questionnaire with close ended which provides précised
and reliable information.
  Observation
 Questionnaire

2. Secondary Data – Data through it are collected via internet,

books reports, journals etc. i.e. data by researcher is collected by a
secondary source and not by himself.
 Websites
 Transcripts of Books
 Journals
 Handouts

Sampling method – Simple Random sampling .

Sample Size– A sample size 100.

Geographical location- Dehradun.

MAIN SAMPLE = 100

NON RESPONDENT = 10
SAMPLE SIZE = 90

SIGN TEST

To check that the Bajaj working capital

Sample size=100
Non respondent=10
HOP=success rate HOQ=failure rate
69 21
Stating hypothesis recruitment process is satisfactory
PHo=0.5
Hypnotized proportion of the population feel the recruitment is satisfactory
.
QHo=0.5

Hypnotized proportion of the population feels that the recruitment process is

unsatisfactory.
Hop=69/90=0.766(proportion of success in the sample)
HoQ=21/90=0.233(proportion of failure in the sample)
Calculation of standard error:
S.dp=∫pq/n
= ∫(0.5*0.5/90 =0.0027
Significance level 95% value=1.96
Findings the limits of the acceptance region for null hypothesis
s.dp=0.0025

pHo+1.96(SDp)=0.5+(1.96)(.0027)
=0.5052(upper limit)
Pho-1.96(SDp) = 0.5-(1.96)0(.0027)
=-0.4947(lower limit

-1.96 +1.96

0.4947
+0.5052
Critical Region
 -1.96
+1.96
FIGURE
Objective of research
 The main aim of research is to find out the truth which is hidden and

which has not been discovered yet.

 To test the hypothesis of a casual relationship between variables (such

studies are known as hypothesis-testing research studies).

 To discover answer to questions through application of scientific

procedure.

 To gain familiarity with a phenomenon or to achieve new insights.

To determine the frequency with which something occurs or which it is

associated with something else
 LIMITATION
 The time period for the project is very less for understanding the wide
organization.
 The ratio of the one company cannot always be compared with the
performance of the other firm.
 Comparisons are also made difficult due to differences of the terms
like gross profit, operating profit, net profit etc
 The scope off study is very wide .A large sample would have
provided more confidence in the findings but due to cost and time
constraint the sample size was kept small
 Most of the business units in our country do not have confidence that
the information shared by them with the people will not be misused.
So this makes the employees reluctant to share information with them.
Reluctance is more if information pertains to financial position and
business operations.
 Finding
Working capital has increased in comparison to previous year 2009-10 by

Rs. 57.91 Mn.

The reasons are-

1) It was found that the company achieved a sales growth of

17.5% at 31st march 2008 which was 27.5% growth in the

previous year.

2) The net profit of the company had Rs.1910 Mn compared to

1076 in 2006-2007.

3) Current share price of Bajaj is Rs.80 to 45.1 in the last year.

4) 60% of the investors want to invest mostly in private sector

than government sector.

5) 50% of them want to invest in Bajaj i.e. maximum investors are

successful with Bajaj.

6) Most of the investors are satisfied with IRDA norms.

7) Most of the investors are also getting tax rebates in Bajaj.

Chapter- v
 Recommendation
Conclusion

And

bibliography

Recommendations
 Management of Bajaj ensures the efficient use of various resources

& increases the productivity of the enterprise.

 Keeping & maintaining good working condition to ensure fair wage

for worker security of employment.

  Maintaining good relations with their customer to get maximum

policies & capital so that the organization can continue dealing in

future as well.

 The organization structure must be flattered for the quicken decision

making which will result in higher profitability.

 Complaint and replace the defective in time, otherwise it will tarnish

the image of the company among the customer.

 The company can diversify itself by undertaking the various policies

apart from insurance at the Dehradun Branch

Conclusions

This report is whole on the basis of financial analysis. The main object of

doing this study is to analysis the condition of organization. The tools of

financial are used to find out the soundness of the company.

It can be concluded that in the fiercely competitive FMCG market with

regional players striking so hard at BILs market share the company has not

made any compromise with quality, systems and practices in spite of feeling

the pinch in its profitability not only due to competition but also because

being an agro based industry and because of the seasonality and

unpredictability in the availability and price of one of its major raw material

Maida.

The company is doing well in terms of its marketing approach and the

financials of the company seem to be healthy as of now.

Bibliography

 Working Capital Management - V.K.Bhalla

  Management Accounting - S.P Gupta

 Financial Management - I.M Pandey

- Shashi K. Gupta

 www.Google.com

 Magazine of Bajaj Allianz

ANNEXURE

Dear Sir/ Madam,

 As part of my MBA Degree Course, I am conducting a study

working capital management in Bajaj Allianz Life
Insurance Co. Ltd.
Instructions: Tick mark (√) in appropriate place

Que1: Do you believe in a government or private investment?

a) Government insurance sector.
b) Private insurance sector.

According to this 60% of them prefer to invest in private insurance sector and 40% are
prefer to invest in government sector.

Que2: what do you prefer the most in the insurance sector?

a) Bajaj
b) HDFC
c) Birla Sunlife
d) ICICI
0%
e) LIC 10% 20%
20% LIC
Bajaj
ICICI
50%
Birla sunlife
According to this 50% prefer to Bajaj , 20% ICICI, 20% LIC and
10% Birlasunlife.

Que3: what kind of policy do you prefer most?

a) Traditional plan
b) Ulip plan
c) Unit link plan

s
e
e
y
lo
p
60 m
E
f
40 o
.
o
N
30

20
Ulip Unit link Traditional

Total no. of
respondents

According to this 50% of people prefer unit link, 40% people

prefer ulip and 10 % follow the traditional plan.

Que4: do you feel insurance company registered under IRDA

norms are reliable & consistent?
a) Yes
b) No
 NO YES

According to this most of them satisfied with the IRDA norms.

Que5: Do you prefer to invest your money in capital market plan?

a) Yes
b) No

NO YES
As per the above question most of them prefer to invest in capital
market.

Que6: Do you get any tax rebate benefit by investing in the

policies?
a) Yes
b) No

NO YES
More people believe to get tax rebate benefit by investing in the
policies.

Que7: If you invest in Bajaj what kind of customer service you

want to get?
a) Reliability
b) Online trading
c) Consistency
d) Delivery

0%
10% 20%
20% reliabilty
Online trading
Consistency
50%
Delivery

According to above,50% of the customers believe in online trading

but only 10% believe in delivery.

Que8: Do you believe that Bajaj is successful in companison to

other?
a) Yes
b) No

NO YES
Most of them are in favour of bajaj and rest of them have no
response.

Que9: Are you finding yourself comfortable with the insurance

services & policies of Bajaj?
a) Yes
b) No

According to above, most of them feel comfortable but rest don’t.

Que10: what age group most prefer to invest in Bajaj?

a) 15-20
b) 20-25
c) 25-30
d) 30-35
e) 35-40 0%
10% 20% 20-25
20% 30-35

25-30
50% 15-20
According to above,30-35% highly invest highly in bajaj,and 15-
20 mostly invest less in bajaj.

Any suggestion please mention

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 ANNEXURE

Dear Sir/ Madam,

 As part of my MBA Degree Course, I am conducting a study

working capital management in Bajaj Allianz Life
Insurance Co. Ltd.

Instructions: Tick mark (√) in appropriate place

Que1: Do you believe in a government or private investment?

c) Government insurance sector.
d) Private insurance sector.

Que2: what do you prefer the most in the insurance sector?

f) Bajaj
g) HDFC
h) Birla Sunlife
i) ICICI
j) LIC

Que3: what kind of policy do you prefer most?

d) Traditional plan
e) Ulip plan
f) Unit link plan

Que4: do you feel insurance company registered under IRDA

norms are reliable & consistent?
c) Yes
d) No
Que5: Do you prefer to invest your money in capital market plan?
c) Yes
d) No

Que6: Do you get any tax rebate benefit by investing in the

policies?
c) Yes
d) No

Que7: If you invest in Bajaj what kind of customer service you

want to get?
e) Reliability
f) Online trading
g) Consistency
h) Delivery

Que8: Do you believe that Bajaj is successful in companison to

other?
c) Yes
d) No

Que9: Are you finding yourself comfortable with the insurance

services & policies of Bajaj?
c) Yes
d) No

Que10: what age group most prefer to invest in Bajaj?

 a) 15-20
b) 20-25
c) 25-30
d) 30-35
e) 35-40

Any suggestion please mention

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