Project Final Submission (Ajith)

A STUDY ON WORKING CAPITAL
MANAGEMENT WITH SPECIAL REFERENCE

TO KERALA AGRO MACHINERY
CORPORATION LTD., ATHANI, ERNAKULAM
A PROJECT REPORT
SUBMITTED TO KANNUR UNIVERSITY
in partial fulfilment of the requirement for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY
Mr. AJITH BABY E

Reg. No. B8GMBA3004
Under the guidance of
Dr. THOMAS MICHAEL

PRINCIPAL
VIMAL JYOTHI
INSTITUTE OF MANAGEMENT & RESEARCH
CHEMPERI, KANNUR – 670 632
2018-2020
DECLARATION
I, Mr. Ajith Baby E, fourth semester MBA student of Vimal Jyothi Institute of
Management & Research (VJIM) Chemperi, Kannur hereby declare that the report
titled “A STUDY ON WORKING CAPITAL MANAGEMENT WITH SPECIAL
REFERENCE TO KERALA AGRO MACHINERY CORPORATION LTD.,
ATHANI, ERNAKULAM” has been prepared by me under the guidance and
supervision of Dr. Thomas Michael, Principal, VJIM and submitted to Kannur
University, in partial fulfilment of the requirement for the award of the degree of
Master of Business Administration.
I further declare that this report has not been previously submitted to any institute
or University for the award of any Degree/Diploma/Fellowship or other similar title.
Place: Chemperi Mr. Ajith Baby E
Date: 03/06/2020 Reg. No.: B8GMBA3004

ACKNOWLEDGEMENT
I sincerely express my deep sense of gratitude to all who have been of great
help to me during the course of my project study. First and foremost I thank the
Almighty, for His blessings and protection during the period of work. I express my
thanks to Dr. Thomas Michael, the Principal, VJIM, my guide, for his constant
encouragement, valuable guidance and timely corrections, which made the work a
success.
I express my cordial gratitude to Mr. M.C. Vijayakumar HR manager of
KAMCO Ltd., Athani. Who gave permission to do project at KAMCO Ltd. and
support me by sharing information about company and also thanks to all department
heads.
I am grateful to my classmates and friends for supporting throughout the
study. I would like to express my thanks to my parents and dear ones for their
constant encouragement and support which kept me sail through the difficulties of this
study. I also thank all those who helped me directly or indirectly in completing this
project study.
Mr. Ajith Baby E

TABLE OF CONTENTS
CHAPTER PAGE
TITLE
NO. NO.
INTRODUCTION 1-14
1.1 Introduction to the Study 1
1.2 Theoretical Aspects 3
1.3 Statement of the Research Problem 11

1 1.4 Significance of the Study 11
1.5 Objectives of the Study 12
1.6 Methodology of the study 12
1.7 Chapter Scheme 13
1.8 Limitations of the Study 14
2 REVIEW OF RELATED LITERATURE 15-21

PROFILE OF THE INDUSTRY AND
22-60
ORGANIZATION
3.1 Profile of the Industry 22
3 28
3.2 Profile of the Organization
3.3 Product Profile 31
3.4 Organizational Structure 38
4 DATA ANALYSIS AND INTERPRETATION 61-106
FINDINGS, RECOMMENDATIONS AND 107-110

CONCLUSION
5 5.1 Findings 107
5.2 Recommendations 109
5.3 Conclusion 110

ANNEXURES
Balance Sheets
Bibliography
LIST OF TABLES
TABLE PAGE
TITLE
NO. NO.
3.1 Kamco Power Tiller Kmb 200 Super Di 32
3.2 Kamco Power Reaper Kr 120 33
3.3 Kamco Garden Tiller B30 34
3.4 Kamco Brush Cutter B30 35
3.5 Kamco Portable PumpsetKwp 30m 36
3.6 Kamco Portable PumpsetKwp 40s (Engine) 37
3.7 Kamco Portable PumpsetKwp 40s (Pump) 37
4.1 Net Working Capital 61
4.2 Current Ratio 63
4.3 Quick Ratio 65
4.4 Absolute Liquid Ratio 67
4.5 Inventory Turnover Ratio 69
4.6 Inventory Holding Period Ratio 71
4.7 Fixed Asset Turnover Ratio 73
4.8 Debtors Turnover Ratio 75
4.9 Debtors Collection Period 77
4.10 Working Capital Turnover Ratio 79
4.11 Accounts Receivables & Networking Capital Ratio 81
4.12 Cash and Working Capital Ratio 83
4.13 Stock and Working Capital Ratio 85
4.14 Cash Turnover Ratio 86
4.15 Trend Analysis of Working Capital 88
4.16 Working Capital for Next Seven Years 89
4.17 Expected Working Capital (Rs) 89
4.18 Sales Forecasting of Next Seven Years 90

4.19 Sales for Next Seven Years (Rs) 91
4.20 Expected Sales (Rs) 92
Comparative Statement of Working Capital for the

4.21 93
Year 2012-2013

4.22 95
Year 2013-2014

4.23 97
Year 2014-2015

4.24 99
Year 2015-2016

4.25 101
Year 2016-2017

4.26 103
Year 2017-2018

4.27 105
Year 2018-2019
LIST OF FIGURES
FIGURE PAGE
TITLE
NO. NO.
3.1 Structure of Marketing Department 39
3.2 Structure of Finance Department 41
3.3 Structure of Human Resource Department 44
3.4 Structure of Materials Department 46
3.5 Structure of Purchase Department 48
3.6 Structure of Stores Department 50
3.7 Structure of Quality Assurance Department 52
3.8 Structure of Production Department 54
3.9 Structure of Maintenance Department 56
3.10 Structure of Research and Development Department 58
3.11 Structure of System Department 60
4.1 Net Working Capital 62
4.2 Current Ratio 64
4.3 Quick Ratio 66
4.4 Absolute Liquid Ratio 68
4.5 Inventory Turnover Ratio 70
4.6 Inventory Holding Period Ratio 72
4.7 Fixed Asset Turnover Ratio 74
4.8 Debtors Turnover Ratio 76
4.9 Debtors Collection Period 78
4.10 Working Capital Turnover Ratio 80
4.11 Accounts Receivables & Networking Capital Ratio 82
4.12 Cash and Working Capital Ratio 84
4.13 Stock and Working Capital Ratio 86

4.14 Cash Turnover Ratio 87
4.15 Expected working capital 90
4.16 Expected sales 92

EXCEUTIVE SUMMARY
As per the course curriculum, MBA students have to undergo a major project
or internship with any of the leading business during the 4th semester. For acquiring
practical knowledge on specialized field of business administration with a particular
department in a company; the institute has the schedule of providing opportunity for
the students to select an established company and perform research project.
This project is an outcome of a study undertaken in The Kerala Agro
Machinery Corporation Ltd., “A Study on Working Capital Management with Special
Reference to Kamco Ltd., Athani.” The main objective is to analyse the financial
performance of the company for the past 7 years from 2013-19. The various analytical
tools like ratio analysis, trend analysis, common size balance sheet and comparative
statements. Primary and secondary data are used for the purpose supported by the
above mentioned tools paved a direction for the study; primary data are collected
through personal interactions with the financial executives, secondary data are
collected through 7 years of financial statements of the company.
By studying the companies past 7 years financial performance I have reached
at a conclusion that, now the company enjoying a satisfactory financial position. The
current ratio of the KAMCO Ltd, is much more than its standard during the past 7
years, so that the firm will not find any difficulty in meeting current liabilities.
Company should take effort to reduce cost, so that profitability can be increased.
CHAPTER- 1
INTRODUCTION
CHAPTER- 1
INTRODUCTION
1.1 INTRODUCTION TO THE STUDY
Finance is the life blood of business. Without finance, the business cannot exist.
Finance is scarce, but it is the most aspect of any business. Therefore finance requires
proper planning and control to achieve the objective of the company. It is one of the
most important functions of every business organization. It remains a focus of all
activities, it is not possible to substitute or eliminate this function because the business
will close down in the absence of finance. The need for money is continuous. It starts
with the setting up of an enterprise and remains at all times. The development and
expansion of business rather needs more commitment for funds. The funds will have
to be raised from various sources. The sources will be selected in relation to the
implications attached with them. The receiving of money is not enough, its utilization
is more important. The money once received will have to be returned also. If its use is
proper then its return will be easy otherwise it will create difficulties for repayment.
The management should have an idea of using the money profitably. It may be easy to
raise funds but it may be difficult to repay them. The inflows and outflows of funds
should be properly matched. Working capital is one of the most important areas in the
day to day management of the firm is the management of working capital. Working
capital refers to the funds invested in the current assets i.e. investment in stock,
sundry debtors, cash and others current are essential to use fixed assets profitability
for e.g.: A machinery cannot be used without raw materials. The investments on the
purchase of raw material are identified as working capital. It is obvious that ascertain
amount of the fund is always tied up in raw material inventories.

Kerala Agro Machinery Corporation Ltd. (KAMCO), Athani
Working capital may be regarded as lifeblood of a business. Its effective provision
can do much ensure the success of the business, while its inefficient management can
lead not only loss of the profits but also the ultimate downfall of what otherwise
might be considered as promising concern.
The importance of working capital in commercial under takings can never be over
emphasized. A concerned needs funds for its day to day running. A large amount of
working capital would mean that the company has idle funds the various study is
conducted by the bureau of public enterprises have shown that one of the reasons for
poor performance of the public sector undertaking in our country has been the large
amount of the funds locked up in working capital. Since funds have a cost, the
company has to pay huge amount as interest on funds. This results in over the
capitalization. Over the capitalization implies that company has too large funds for its
requirements, resulting in low rate of the return, a situation which implies a less than
optimal use of resources. A firm has therefore, to be very careful in estimating its
working capital requirements. The soft drinks are preferred by all categories
irrespective of their age, sex, status and dignity. Realizing this truth entrepreneur all
over the world has shown tremendous interest in the industry. As a result the modern
soft drinks industry is formed. As the world of business is changing very fast, we
know that the theoretical knowledge alone will not fulfil the needs of business school
students.
Vimal Jyothi Institute of Management & Research, Chemperi, Kannur Page | 2

1.2 THEORETICAL ASPECTS
Working capital is an accounting term that refers to a company’s available capital
for daily operations at any given point of time. It is defined as the difference between
a company’s current assets and current liabilities. In order to operate effectively, a
company should have more assets than liabilities to ensure that it has enough assets to
pay its short-term debt. The amount of working capital a company has is a good
measure of its liquidity, efficiency and financial health. Capital required for a business
can be classified under two main categories are Fixed Capital and Working Capital
Every business needs funds for two purposes- for its establishment and to carry out its
day to day operations. Long term funds are required to create production facilities
through purchase of fixed assets such as plant and machinery, land, building etc.
investment in these assets represent that part of firm’s capital which is blocked on a
permanent or fixed basis and is called fixed capital. Funds are also needed for short
term purposes for the purchase of raw materials, payment of wages and other day to
day expenses etc. These funds are known as working capital. Working Capital Terms
includes, the first place to start in analysing a company’s finances is its accounting
balance sheets. Balance sheets provide a company's financial position at a particular
point in time (generally at the end of a quarter or year). Balance sheets lay out the
ending balances of a company’s assets, liabilities and equity. This is where the
information necessary to calculate a company’s working capital is found.
Assets: A company’s assets are any items of economic value that a company owns or
controls. Assets can provide immediate or future benefits. It can also include costs
paid in advance (e.g., prepaid insurance, prepaid rent, etc.). Examples of assets are
cash, accounts receivables, inventory, supplies, land, buildings and equipment.

Liabilities: A company’s liabilities are any financial debt or obligations that a
company is responsible for due to its business operations. Liabilities often include
"payable" in their account title on the balance sheet. Examples of liabilities are notes
payable, accounts payable, salaries payable, wages payable and income taxes payable.
Liabilities are considered current liabilities if the debts or obligations are due within
one year.
There are two concepts of working capital are balance sheet concept and Operating
Cycle or Circulating flow Concept in balance sheet concept includes the
interpretations of working capital are gross working capital and net working capital.
Gross working capital refers to firm’s investment in current assets. Current are the
asset, which can be converted into cash with in a financial year. The gross working
capital points to the need of arranging funds to finance current assets. Net working
capital refers to the difference between current assets and current liabilities.
Networking capital can be positive or negative. A positive net working capital will
arise when current asset exceeds current liabilities, and vice-versa for negative net
working capital.
Operating cycle or circular flow concept is Working capital refers to that part of
firm’s capital which is required of financing short term or current assets such as cash,
marketable securities, debtors and inventories. Funds thus, invested in current assets
keep revolving fast and are being constantly converted into cash and this cash flow
out again in exchange for other current assets. Hence, it is also known as revolving or
circulating capital.
Working Capital may be classified in two ways are On the basis of concept and
On the basis of time. On the basis of concept, working capital is classified as Gross

Working Capital and Net Working Capital. Then On the basis of time, working
capital may be classified as Permanent (Fixed) Working Capital and Temporary
(Variable) Working Capital. Permanent or fixed working capital is the minimum
amount which is required to ensure effective utilization of fixed facilities and for
maintaining the circulation of current assets. Temporary or Variable working capital:
Temporary or variable working capital is the amount of working capital which is
required to meet the seasonal demand and some special exigencies. Variable working
capital can be further classified as seasonal working capital and special working
capital. The capital required to meet the seasonal needs of the enterprise is called
seasonal working capital. Special working capital is part of working capital which is
required to meet special exigencies such as launching of extensive marketing
campaigns or conducting research etc.
Importance or advantages of adequate working capital are Short term solvency of
business, goodwill, cash discount, regular supply of raw material, regular payments of
salaries wages and exploitation of favorable market conditions.
Short term solvency of business: Adequate working capital helps is maintaining short-
term solvency of business by providing uninterrupted flow of production.
Goodwill: Sufficient working capital enables a business concern to make prompt
payments and hence helps in creating and maintaining goodwill.
Cash discount: Adequate working capital also enables a concern to avail cash
discounts on the purchases and hence it reduces costs.
The need of working capital arises due to time gap between production and
realization of cash from sales. Thus, working capital is needed for the following
purposes. For the purchase of raw materials, components and spares. To pay wages

and salaries. To incur day to day expenses and overhead costs such as fuel, power and
office expenses. To meet the selling costs as packing, advertising etc. To provide
credit facilities to the customers.
Regular supply of raw material: Sufficient working capital ensures regular supply of
raw materials and continuous production, Regular payment of salaries, wages and
other day to day commitments. And Exploitation of favourable market conditions:
Adequate working capital can exploit favourable market conditions.
Factors determining the working capital requirements are:
Nature or character of business: The management of working capital is completely
different from industry to industry. A simple comparison of the service industry and
manufacturing industry can clarify the point. In a service industry, there is no
inventory and therefore, one big component of working capital is already avoided.
Size of business/Scale of operation: The firms operating at large scale need to
maintain more inventory, debtors, etc. So they generally require large working capital
whereas firms operating at small scale require less working capital.
Manufacturing Process /Length of production cycle: The manufacturing process
maybe two, three or four. Moreover, the time required in each process may differ
from one process to another.
Seasonal Factors: The working capital requirement is constant for the company’s
which are selling goods throughout the season whereas the companies which are
Selling seasonal goods require huge amount during season as more demand, more
stock has to be maintained.

Business Cycle: The need for the working capital is affected by various stages of the
business cycle. During the boom period, the demand of a product increases and sales
also increase. Therefore, more working capital is needed.
Working Capital Cycle: Working capital cycle refers to the time required to convert
the raw materials into finished goods and up to the stage of conversion of finished
goods into cash form. Principles of working capital management are included
Principle of Risk Variation (Current Assets Policies): Risk here refers to the inability
of a firm to meet its obligations as and when they become due for payment. Larger
investment in current assets with less dependence on short term borrowings increases
liquidity, reduces dependence on short-term borrowings increases liquidity, reduces
risk and thereby the opportunity for gain or loss.
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 lower is the cost and lower the risk higher is the cost.
Principle of Equity Position: This principle is concerned with planning the total
investment in current assets. According to this principle, the amount of working
capital invested in each component should be adequately justified by a firm’s equity
position.
Importance/ benefits and uses of working capital management are;
Expansion of investment portfolio: Funds released through sound working capital
management practices act as a cheap source of finance that can be used for expansion
of existing projects or for investment in new spheres of investment.

Increased profitability: Increasing profitability is one of the main objectives of
engaging in working capital management. One of the ways of increasing profitability
through adequate working capital management is in saving of financial cost that
would have otherwise been incurred but for managing short-term assets and liabilities.
Ensure the availability of sufficient resources: Through stock management which is a
component of working capital management, a business is able to ensure that resources
are sufficient at all times. Optimal stock level, for instance, is determined using some
models outside the scope of this article.
Solidifies the going concern status of a company: In business, it is very common to
find a profitable company goes out of business if it fails to meet up with the short
term financial needs of the business. Businesses need to satisfy its short term and
medium term obligations in order to be in business and still remain competitive.
Improves overall efficiency of a company: The overall operational excellence of a
company would be greatly improved by an effective working capital management
system. Where this system is in place, finances are managed in such a way that it
poses no hindrance or obstacle to any aspect of the entity.
Helps a company avoid overtrading: Overtrading is one of the fastest ways to business
failure. One main characteristic of overtrading is mismatching assets and finances.
The business goes beyond set financial goals and objectives, and in the long run, it
meets with ruin. Some trends signaling overtrading will include uncontrolled, out of
proportion business expansion.
Maintain good relation with suppliers and other creditors: Where a business engages
in the proper management of its working capital and other financial indices, Trade
creditors and other non-trade creditors are poised to continue doing business with it.

Their knowledge of the existence of this system goes a long way to boost their
confidence in the business and their dealings.
Avoid underutilization of resources: While we condemn overtrading and tag it as a
negative impact on the functionality of the business, we must also reiterate that under
trading can cost a business a fortune in an unearned profit. Through proper
management of working capital, a company can ensure that there are no idle
resources.
Provides better insight into the true financial state of a company: Through working
capitals ratios, analysts and financial experts can gain a better understanding of a
business. The capital management affords the business the opportunity of taking a
closer look at all of its financial indices.
Allocation of resources: Management of working capital is essential in the allocation
of resources. It assists the business management incorrectly allocating the right
resources to appropriate quarters. Applying the ratios revealed upon the utilization of
the management system, as well as all other necessary analysis, areas with surplus
resources and the shortage of resources are identified and followed swiftly with
appropriate even distribution of resources to all.
Managing working capital is synonymous with efficiently managing other resources
in the business. Other financial indices are considered such as the ratios of turnover,
the ration of the collection, the ration of key performance. All of these can only be
effectively achieved by a standard, efficient and state of the art management of
working capital.

1.2.1 Ratio Analysis
A ratio analysis is a quantitative analysis of information contained in company’s
financial statements. Ratio analysis is based on line items in financial statements like
the balance sheet, income statement and cash flow statement; the ratios of one item –
or a combination of items - to another item or combination are then calculated. Ratio
analysis is used to evaluate various aspects of a company’s operating and financial
performance such as its efficiency, liquidity, profitability and solvency. According to
Myers, ratio analysis is defined as ‘study of relationship among the various financial
factors of the enterprise’.
1.2.1.1 Purpose of Ratio Analysis
 Liquidity of the firm. Leverage position of the firm.
 Profit earning capacity of the firm.
 To identify operating efficiency of the firm – Turnover of the ratios.
1.2.1.2 Utility of the Ratio Analysis
 Easy to understand the financial position of the firm.
 Measure of expressing the financial performance and position.
 Intra-firm analysis on the financial information over many number of years.
1.2.2 Trend Analysis
A trend analysis is an aspect of technical analysis that tries to predict the future
movement of a stock based on past data. Trend analysis is based on the idea that what
has happened in the past gives traders an idea of what will happen in the future. There
are three main types of trends: short-, intermediate- and long-term. Trend analysis is
the process of trying to look at current trends in order to predict future ones and is

considered a form of comparative analysis. This can include attempting to determine
whether a current market trend, such as gains in a particular market sector, is likely to
continue, as well as whether a trend in one market area could result in a trend in
another.
1.3 STATEMENT OF THE RESEARCH PROBLEM
A study on working capital management at KAMCO Ltd., Athani, is undertaken
in order to know the working capital management. The significance of working
capital in any industry needs no special emphasis since the working capital is the life
blood and nerve centre of a business firm. The goal of working capital management is
to ensure that the firm is able to continue its operation and that it has sufficient cash
flow to satisfy both maturing short term debt and upcoming operational expenses. A
company cannot manage their operations without a proper management of current
asset and current liability. Thus working capital management is an important function
of a company. With this backdrop, the present study examines the working capital
management of KAMCO Ltd. for the period 2012-2019.
1.4 SIGNIFICANCE OF THE STUDY
The present study helps to know the Working Capital Management of KAMCO
Ltd. by analysing the working capital position of the company for last seven years. It
deals with critical evaluation and analysis of all the aspects concerned with working
capital of the firm. The management of working capital helps to maintain the working
capital at a satisfactory level by managing the current assets and current liabilities. It
also helps to ascertain the liquidity position of the company. Organization may vary,
but they have certain common features. So the Project study is important for future

managers. The study provides insights to the management employees, creditors and
debtors about the management of working capital.
1.5 OBJECTIVES OF THE STUDY
 To analyze the working capital management of KAMCO Ltd.
 To perform the trend analysis and ratio analysis to study the company’s
financial performance.
 To make a study on the expected performance of working capital, current
assets, current liabilities and sales for next 7 years.
 To provide recommendations to the organization based on the findings of the
study.
1.6 METHODOLOGY OF THE STUDY
The analysis of working capital management was done based on the fact and
information already available in the form of secondary data. And an evaluation on
working capital management was made on the basis of the analysis. For the analysis
Balance sheets of KAMCO Ltd., Athani from 2013 to 2019 were used. Tools like
ratio analysis, Trend analysis and comparative statement were used. Ratio analysis is
used to study the relationship among the various financial factors such as liquidity,
solvency of the enterprise. By trend analysis an attempt was made to look at current
trends in order to predict future ones and is considered a form of comparative
analysis. By using comparative statement analysis, a comparative study was made on
the working capital with previous years.

1.6.1 Data collection
The study is based mainly on secondary data. The secondary data have been
collected from the audited financial statement of the company for the period under
study. This data includes published annual reports, audited profit and loss account and
balance sheet.
1.6.2 Tools used for analysis
Following are the tools used for analysing the current positions of KAMCO Ltd.,
Athani.
 Ratio analysis
 Trend analysis
 Comparative statement
1.6.3 Period of the study
The study was based on the financial data for the period 2012-2019 and the
present study was carried out for a period of 45 days from 17th February to 1st April
2020.
1.7 CHAPTER SCHEME
Chapter- 1 Introduction
This chapter contains introduction to the study, Theoretical aspects, statement of
the problem, significance of the study, objectives of the study, methodology of the
study, chapter scheme and limitation of the study.

Chapter- 2 Review of Related Literature
Literature review on working capital management
Chapter- 3 Profile of the Industry and Organization
This chapter covers the Profile of Industry, Organization and Product.
Chapter- 4 Data Analysis and Interpretation
This chapter contains data analysis and interpretation. It is done with the help of
ratio analysis, trend analysis and comparative statement.
Chapter- 5 Findings, Recommendations and Conclusion
This contains findings, recommendations and conclusion.
1.8 LIMITATIONS OF THE STUDY
 The study was conducted on the basis of secondary data available from
various financial records of KAMCO Ltd. All the inherent limitation of the
secondary data is applicable to this study.
 This study is based on the historical data and information provided in the
annual reports therefore it may not be a future indicator.
 There may be some fractional differences in the calculated ratios.
 To understand an organization and its working completely, a period of 45
days was not sufficient.

CHAPTER- 2
REVIEW OF RELATED LITERATURE

CHAPTER- 2
REVIEW OF RELATED LITERATURE

Singh Moirangthem B. and Singh Tejmani N. (2013) emphasize on the
efficient management of working capital. According to them it means proper
management of various components of working capital due to which adequate amount
of working capital and liquidity is maintained in the larger interest of successful
running of an enterprise. At the end he offers the suggestions are. The industry should
try to maintain proper level of net working capital by trying to control the growth rate
of current assets as compared to current liabilities to some extent. The industry should
also try to maintain balance between liquidity and profitability position by improving
current ratio and quick ratio.
Banos-Caballero Sonia, Garcia-Teruel Pedro J. and Martinez-Solano Pedro
(2012) present the relationship between working capital management and profitability
for Spanish small and medium size enterprises (SMEs) by controlling for
unobservable heterogeneity and possible endogeneity. For the purpose of this study,
standard working capital ratios were used to measure the effectiveness of working
capital in the selected firms. This paper offers new evidence on the relationship
between working capital management and profitability by controlling for
unobservable heterogeneity and possible endogeneity and, unlike previous studies,
given the competing hypotheses of effect of an increase in working capital on firm’s
profitability, it analyses a possible quadratic relation between these variables. At the
end it has been observed that most SMEs do not care about their working capital
position, most have only little regard for their working capital position and most do
not even have standard credit policy.

Ray Sarbapriya (2012) studies the relationship between liquidity and
profitability in the manufacturing industry. The writer has taken as a sample 311
manufacturing firms for a period of 14 years, and studied the effect of different
variables of working capital management. In this study strong adverse relationship
between measures of working capital management and corporate profitability have
been observed. In the end insignificant negative relationship between firm size and its
net operating profit ratio was detected.
DrPanigrahi Ashok Kumar (2012) studies the relationship between working
capital management and profitability of ACC Cement Company, the leading cement
manufacturer of the country for assessing the impact of working capital management
on profitability during the period 1999 – 2000 to 2009 – 10. The study is based on
secondary data. The main objective of the study was to find whether the working
capital management affects the performance of the firm. It can be deduced that there
is a moderate relationship between working capital management and the firm’s
profitability.
ManjhiRakesh Kumar and Kulkarni S. R. (2012) carry out a study of the
working capital structure and liquidity analysis of Gujarat Textiles Manufacturing
Industry. The objectives of the study are to analyze working capital structure of
Gujarat Textiles Manufacturing Industry, to analyze the liquidity position of the
Industry and to analyze the working capital turnover position of the Industry. It was
found that the variation between current assets turnover and working capital turnover
was quite high across the industry. The study concludes with the observation that
Arvind Ltd. and Shri Dinesh mills Ltd. achieved lower sales over their working

capital and current assets as compared to the other companies. However, the sample
companies had good current ratio, which also implies their sound liquidity position.
Chandra Bihas, ChouhanVineet and GoswamiShubham Chandra Bihas,
(2012), analyse the trends and profitability vis-à-vis working capital of some selected
information technology organizations in India. The author concludes with the
observation that the increased requirement of working capital in IT companies is
significantly established. He further observes that there exists a positive relationship
between working capital and profitability of all the selected companies, with the
exception of Patni Computer Systems. The positive direction of relationship indicates
that increase in working capital leads to increase in profitability.
Bagchi B. and Khamrul B. (2012) investigate the relationship between
working capital management and the companies‟ profitability, and identify the
variables that most affect profitability. It is also an empirical study where the authors
have investigated the effect of working capital management on the companies‟
profitability by using a sample of Indian FMCG companies. The study concludes with
the observation that both CCC and debt used by the firm are negatively associated
with the companies‟ profitability. This result can be further strengthened if the
companies manage their working capital in more efficient ways which will ultimately
increase their profitability.
Jasmine Kaur (2010) the study on working capital management in Indian tyre
industry. This is a two-dimensional study which examines the policy and practices of
cash management, evaluate the principles, procedures and techniques of Investment
Management, Receivable and Payable Management deals with analysing the trend of

working capital management and also to suggest an audit program to facilitate proper
working capital management in Indian Tyre Industry. The study covers a production
of 8 year via, 1999 – 2007. For the purpose of investigation both primary and
secondary data are used. The collected data is analysed by applying research tool
which includes accounting tools like Analysis, Cash Flow Analysis, Common Size
and Trend Analysis. They reveal that there is a standoff between liquidity and
profitability and the selected corporate has been achieving a trade-off between risk
and return. Efficient management of working Capital and its components have a direct
effect on the profitability levels of tyre industry. The present study reflects that the
proper management does affect positively on the profitability levels of the sample
companies.
KushwahGrima, MathurShivani Bali. S (2009) the study thereof was a modest
attempt in this direction by undertaking a study of working capital management. The
paper has tried to examine the source used by the companies to finance their working
requirements and to analyse and evaluate the working capital management .The paper
has also examined the liquidity position of the companies. In order to examine and
analyse, secondary data of five companies was collected in cement sector i.e. ACC,
Grasim, Ambuja, Prism and Ultra- Tech. Financial Statement of these companies
were collected for the period of two years from 1st April, 2007 to 31st March 2009
and Ratio analysis was conducted. Liquidity and activity ratios were calculated and
analysed to check the working capital condition of these cement companies. The
study shows that out of five cement companies, overall ACC has got the best working
capital management.

P. K. Singh (2004) study on Working capital management in Lupin
Laboratories Ltd. attempted to assess the significance of management of working
capital through working capital ratio and operating cycle. Having analyzed seven
years data (1995 – 2002), he concluded that the liquidity position of the company was
good, mean percentage of current assets was very high when compared to the
percentage of net fixed assets and the operating cycle showed declining trend. The
element wise analysis of working capital also revealed that trade debtors constituted
the highest percentage of current assets followed by loan and advances, inventories
and cash and bank balances. The study brought out the need for efficient management
of debtors, the percentage of which was the highest. It was published in The
Management Accountant.
D. Mukhopadhyay (2001) study attempts to an exposure on working capital
management and working capital forecast with particular reference to working capital
cycle. The study reveals that the conclusions drawn from the ratios can be no better
than the yardstick or standard against which they are compared. Moreover,
inflationary influence on ratio analysis should be taken into account while it is
adopted for ascertaining symptoms of the diseases or soundness of financial health of
a business, a balance sheet may not be able to reflect the average financial position
was it is prepared on a particular even date. Generally it does not take into view short-
term fluctuations in current assets that may occur within two balance sheet dates. It
was published in Cost Accountant & the Management accountant.

Dutta, Joginder Sign (2000) study on “Working Capital Management of
Horticulture Industry in Himachal Pradesh” – a case study of Himachal Pradesh
Horticulture Produce Marketing and Processing Corporation ( HPMC) for the period
from 1990 – 1991 to 1997 – 1998. It also attempted to analyse and evaluate working
capital management by throwing light on financing pattern of working capital. The
study revealed that the working capital position worsened drastically during the study
period. It was also found out that despite suffering huge losses, the firm was holding
huge idle inventories and hence miserably failed to trade-off between liquidity and
profitability. The regression results of the study have revealed that there was no
significant correlation between gross working capital and sales.
Sivarama Prasad R (1999) “A Study on Working Capital Management in
Indian Paper Industry” lays emphasis on individual current assets like cash,
receivables and inventory. The study revealed that the working capital formed 47.2%
of the total net assets during 1984 – 93. The results of correlation analysis indicated a
close relationship between profitability and working capital efficiency emphasizing
the need to exercise better control over working capital. The study also attempted to
assess the perception of chief executives favoured budgetary method as the tool to
plan working capital. Even though majority of the executives felt that the funds meant
for working capital should not be diverted to any other applications. It was found in
majority of the cases that funds were diverted to other uses. The survey revealed that
collection of receivables and inadequate working capital were serious problems in
running the business. It was done Nagarguna University.

Mohan, Reddy P. (1991) study examines various issues related to working
capital management among selected (six companies) private large scale companies in
the state of Andhra Pradesh during the period from 1977 – 1986. The study revealed
that investments in current assets in sample companies was more than that of fixed
assets and inventories constituted highest percentage of total current assets in the
sample companies. Analysis revealed that the liquidity and solvency position of
sample units was found to be highly unsatisfactory because the companies carried
with lesser balance sheet working capital than cash working capital. He based on his
findings, suggested the dire need for improvement of liquidity and solvency position
of sample companies failing which the situation would lead to serious liquidity
crunch.
Mukerjee A.K (1986) in his study on “Management of working capital in
public Enterprises Allahabad” in respect of central government industrial
undertakings, and covering a period from 1974 - 75 to 1978 - 79 has found that, the
current assets increased due to the accumulation of inventories and current liabilities
increased due to increase in financing through payables, the Overall Size of the
workings capital had been significantly influenced by the overall size of sales and
output, the working capital requirement of the units were not ascertained based on the
considerations as suggested for prudent financial management, there was a significant
negative correlations between overall profitability and size of working capital, there
was an over investment in structural determinants and huge size of working capital
and due to faulty financial policies adopted by the units, the liquidity and profitability
has a very significant negative correlations. It was published in Vorha Publishers &
Distributors.

CHAPTER- 3
PROFILE OF THE INDUSTRY AND ORGANIZATION

CHAPTER- 3
PROFILE OF THE INDUSTRY AND ORGANIZATION
3.1 PROFILE OF THE INDUSTRY
Agriculture in India is one of the most important sector of the economy. It is
the mean of livehood of almost two third of the workforce of the Indian farmers,
because of the mechanization the Indian agriculture marketing began to boom
mechanization become a necessity to enhance productivity and conversation of
energy required for various operations involved in crop production, thrashing,
processing, transportation, value added, storage, etc. priorities of mechanism were to
be decided as per the actual requirement of various agro climate zone and involves of
land preparation equipments, crop production equipment techniques for cereal crops,
for cash, for oil seeds and pulses and horticultural crops etc. The Indian agriculture
was facing the problem of lack of mechanization for agricultural purposes which
may increase the labour cost and high cost of production.
The agriculture industry is on the brink revolution that modernize the entire
food production in India is likely to double in the excellent export prospection,
competitive pricing of agriculture products and standards that internationally
comparable pricing of agriculture products and standards that are internationally has
created trades opportunities in the agro industry with a view to enhance the place of
agro machinery products the government has laid emphasis on providing financial
assistance to the farmers and other target group for assistance to the farmers and
other target group for purchases of different kinds of farms equipment‟s
demonstration of new equipments among farmers for spread of new technology also
in the operation, maintaince, repairs and management of agricultural machinery and
quality improvement through testing and evolution, etc.
Green Revolution refers to a series of research, development and technology
transfer initiatives, occurring between 1943 and the late 1970s that increased
industrialized agriculture production in India. The initiatives involved the
development of high-yielding varieties of cereal grains, expansion of irrigation
infrastructure, and distribution of hybridized seeds, synthetic fertilizers, and
pesticides to farmers. The term "Green Revolution" was first used in 1968 by former
USAID director William Gaud, who noted the spread of the new technologies the
green evolution leads to a big boom in the Indian agro machinery industry. Therefore
knowing this change, some of the Indian companies have done their diversification
program for production agro machinery equipment‟s. They also got good support
from government of India agriculturalist since independence made rapid studies in
studies in taking the annual food gain production from 51 million tons of the early
fifties to 208 million tones to the early fifties to 206 million tones to the century, it
has constituted significantly India. The existing agricultural scenario presented a
dismal picture, traditional farming methods, low yielding and improvement are
wholly unsuited to large scale cultivation. The only solution lays in mechanized
formatting which could turn around the agriculture to a great extent.
3.1.1 Agro Machinery in India
Green revolution in caused a great increase in the production of the food
products and this leads to the mechanization of agricultural sector world widely. This
resulted the country witnessed unprecedented growth in agriculture which helped
India to hunger to self-sufficient were closed down or did not even start because

stability of Indian farming conditions. Poor after sales service network presently only
two manufactures are producing power tiller. Since the phase of production was slow
the government of India continuous to allowed limited import tractors to meet the
demand of the farmers till 1974. While approving foreign collaboration government
of India made it mandatory that tractors to be allowed for manufacturing in India
shall be tested under laboratory and filled conditions to ensure that they were suitable
for Indian farming condition.
The tractor in India were introduced through importation, there were only
8635 imported tractors in use in 1951, the local tractor started in 1961-62 with 880
number. Similarly the manufacturing of power tiller started in 1961 in Japan
collaboration. At one time 12 models of power tiller were licensed to be
manufactured, however many of these units.
3.1.2 World Scenario
The backbone of Indian economy is Agriculture. About 70% of population
depends upon agricultural sector for their lively hood. Many countries are now
available to produce excess food grains, is mainly because, they use high yielding
variety of seeds and modern agricultural machineries with a view to increase their
productivity and then they are able to produce excess food grains in the present
scenario.
After the Industrial revolution even the agriculture sector all over the world
witnessed a drastic change. A no: of revolution occurred during the 19 th century.
Higher productivity and greater output are the two major contributions in farm
mechanization. Tillers form an integral part of farm mechanization and have a crucial

role to play in increasing agricultural productivity. Tiller is a highly versatile piece of
machinery having a multitude of uses, used in agriculture both for land reclamation
and for carrying out various crop cultivation and also employed for carrying out
various operations connected with raising the crops by attaching suitable implements
and to provide the necessary energy for performing various crop production
operations involved in the production of agricultural crops.
Tillers are capital intensive, labour displaying used as a mode of transport, in
electricity generation, in construction industry and for haulage operation. It has now
become an integral part of farm structure. The application of tiller for agricultural
activities which swept India during the last twenty years have erased the problem of
farmers. A rapid major change in the economy was noticed by the general
introduction of power driven machineries. The entry of engineering technologies in
agricultural sector for the purpose of large production of crops using technological
know-how, Kerala Agro Machinery Corporation Limited is the leading company in
India trying for establishing engineering green revolution in India.
3.1.3 Indian Scenario
The agriculture Industry is on the brink of a revolution that will modernize the
entire food chain as the total food production in India is likely to double in the
excellent export prospects, competitive pricing of agricultural products and standards
that are internationally comparable has created trade opportunities in the agro
industry. This further has enabled the Indian agriculture industry ported to serve as a
means by which every export and import of India and aboard, can fulfill. This Indian
agro industry revolution brings along the opportunities of profitable investment in
agriculture industry. The company provides B2B platform with agro related

catalogue, trade exporters and importers directory etc., that help to make a way to
production. India being an agricultural based economy provides livelihood to more
than 75% of the population. Major portion of our income that is, about 70% is earned
from agriculture, it is depressed industry because of the low productivity, in
agriculture small size of farms, finance and defective equipment‟s.
After achieving her Independence in 1947, India found herself to be badly
lacking the means to meet the food demands of her vast population. The existing
agriculture scenario presented a dismal picture traditional farming methods, low
yielding seeds and primitive implements wholly unsuited to large scale cultivation.
The only solution lay in mechanized farming which could turn around the virtual
fortune of India. In order to achieve this objective, indigenous agro machinery units
were to be set up. Without resorting to imports which undoubtedly passed a heavy
burden on the nations need.
Agriculture is way of life, a tradition that for centuries has shaped the
thought, the outlook, the culture and the economic life of the people of India.
Agriculture is considered to be the major activity of most of the people. Moreover
200 million farmers and farm workers have been the backbone of Indian‟s
agriculture. In the beginning, the farmers adopted ancient method. The entire process
that is from the sowing the seed till harvesting were all done by the farmers itself. It
was a really time consuming one which required lot of labor work. The cost of
production was very high and the benefits are not promising.

3.1.4 State Scenario

Kerala Agro Machinery Corporation Ltd., Government of Kerala
Undertaking was formed with the intention of manufacturing Power Tiller operated
by Diesel Engine. The company came into existence in Athani in Ernakulam District
in 1973 when it started assembling Power Tillers under Technical Collaboration from
M/s. Kubota Ltd., Japan. The product is now made in India and is suitably designed
to meet the Indian conditions. There are more than 1.5 lakh of KAMCO Power
Tillers operating in various States in India.
Transport Corporation of India Ltd. has been associated with KAMCO for
about 25 years and transports material to all parts of the country. The machines have
to move direct to the concerned destinations in the same truck. It is here that TCI
plays a major role in the movement of the machine and also ensures availability of
spare parts with all the dealers. An endorsement of excellent service from TCI has
come by way of certificate of appreciation from KAMCO. MrSarvjeet Shukla
(Controlling Manager – Ernakulam) is managing the relationship and keeping a
watchful eye on service level for the customer. KAMCO Kubota Combine Harvester
and KAMCO Kukje Paddy Transplanter are the latest introduction in the country
from KAMCO. The Transplanter takes away the burden of dreary manual labour of
transplanting the seedlings thus taking away the human fatigue in the transplanting
operation. KAMCO has got 4 Assembling Units located at Athani and Kalamassery
in Ernakulam District, Kanjikoade in Palakkad District and Mala in Thrissur District
of Kerala State. Provides direct employment to approx. 600 persons in its various
units. It will be endeavor of TCI to continuously enhance operational efficiency and
value add it's services to strengthen the professional bond with KAMCO.

3.2 PROFILE OF THE ORGANIZATION
KAMCO was established in the year 1973 as a Wholly owned subsidiary of
Kerala Agro Industries corporation limited, Thiruvanandapuram for manufacture of
agricultural machinery specifically Power Tiller. Subsequently KAMCO becomes a
separate Government of Kerala undertaking in 1986.The objectives if the company is
to manufacture in India, either in collaboration with or otherwise or import and trade
agricultural machinery like Power Tiller, Power Reaper, Combine harvesters,
Harvester, transplanted accessories or spares there to. The objective also include
establishment of engineering workshop, repair shops to undertake repair and
servicing of agricultural machinery or other machinery, equipment, implements and
tools.
Assembly unit was established in 1970 at Athani by Kerala Agro Industries
Corporation for the assembly of KUBOTA Power Tillers in technical collaboration
with KUBOTA Ltd Japan. The world‟s leading manufacturers of Tillers and Other
Agricultural machinery. On the expiry of collaboration KAMCO manufactured
Power Tillers with their own facilities. KAMCO manufacturing facilities include
special purpose machines and imported machines. The inspection facilities include
modern inspection and testing equipment KAMCO have their own methodology,
calibration and engine testing lab. KAMCO an ISO 9001:2000 is fully owned
Government of Kerala under the ministry of agriculture. KAMCO is engaged in
manufacturing small agricultural machine mainly indented for small and marginal
farmers in the country in the country established in 1973; the company has now
completed 30 years of services. Company has got for manufacturing units now in
Athani, Kalamassery, Mala and Kanjikode. Athani unit is also the Registered Office

of the company. At present company employees approximately 750 persons in four
units. The company is working profitably for the past fifteen years. The company
was incorporated with the intention of manufacturing and marketing agricultural
machines useful for small and marginal farmers. Company‟s products are 9 to 12 HP
kerosene. Athani, Palakkad and Kalamassery units manufactures Power Tillers and
Mala unit manufactures Power Tillers and Power Reapers.
The company enjoys the position of premier manufacture in its fields. The
products manufactured are fully indigenized and there are no imported items in any
content in any of the items. The machines have acquired a reputation for quality,
providing products at reasonable price to the satisfaction of the customers. Company
enjoys all India sales through a network of about 60 dedicated dealers. Products are
sold at premium prices. KAMCO is also exporting products to certain countries.
Power Tillers is equipment suitable for small farm holding for basic tilling operations
instead of conventional plugging, the tiller breaks the soil into fine parts which is
highly suited for paddy and wheat cultivation, originally of Japaneese design, the
machines has been modified later to perfectly suit Indian conditions.
3.2.1 Vision
KAMCO with over 3 decades of engineering excellence stands as the number
one power tiller manufactures in India. Not surprising, with four state of the art
products, an innovation R and D and stringer quality control systems rated as one of
the best in the country. The technically competent, dedicated management and
workforce will go on to ensure that KAMCO shall be leader for several years to
come.

3.2.2 Mission
 To be an innovative, resourceful and profitable company.
 To meet customer requirements of quality, service and price consistently.
 To make “doing business with us easy” and delightful to our customers.
 To provide a congenial and entrepreneurial work environment in which
employees can respond to the needs of business and service earn fair reward
and can be satisfied.
3.2.3 Activities of the Company
KAMCO manufacturing facilities include special purpose machines, specially
built general machines and imported machines. The inspection facilities include
modern inspection and existing equipment. KAMCO have their own metrology,
calibration and engine test lab. The following are the main activities of the company.
 Manufacturing and marketing of agricultural machines like power tillers,
Tractors, Power reapers, Diesel engine etc
 Power tiller product at Athani and Palakkad units. Major components for
power tiller are manufactured at Athani and all other component bought out
from dedicated vendors in India. There are around 250 vendors now.
 Kalamassery unit produce engine for power tiller.
 Power Reaper products at Mala.
 Trading and manufacturing other farm machines.

3.3 PRODUCT PROFILE
Following are the products which KAMCO is producing
 KAMCO Tera TRAC4W Tractor
 KAMCO Power Reaper KR120
 KAMCO Beriberi Garden Tiller B30 Power Weeder
 KAMCO Brush Cutter KBC30
 KAMCO Power Tiller KMB 200
 KAMCO Super Di Power Tiller
 KAMCO Portable Pump Set KWP 30M
 KAMCO Portable Pump Set KWP 40M
3.3.1 Kamco Power Tiller Model Kmb 200/Super Di
The application are Tilling, pudding, ploughing, weeding, pumping, leveling,
spraying, ridging, hulling and the attachments are cultivator, rider, plough, water
pump, huller, riding set, potato digger, prayer, leveler, trailer etc.

Table 3.1: Kamco Power Tiller Kmb 200 Super Di
Engine ER 90 Engine DI 120

Model
Tiller: KMB 200 Tiller: super DI
General Purpose
Power Tiller with Water
Type
Cooled Engine
Continuous:9/6.7 12/.88
Hp/Kw
2000
2 Qrpm( Rated)
Specific Fuel Consumption 270 272

Kw/Hr
Fuel Tank Capacity 10.7 Liters
Forward 6, Reverse 2,
No. of Speed
Tilling 4
600x12
Tyre Size
200mm
Ground Clearance
12.2kmh (Max)
Travelling Speed
600mm
Tilling Width
190mm
Tilling Depth
20
No. of Blades
1 Hectare / 8 Hrs
Tilling Capacity
Weight (Kg) 484 – 502 Kg

(Source: Secondary Data)

3.3.2 Kamco Power Reaper Kr 120
The feature is that can do the work of 20 farmers with sickles. 75% less grain
loss, harvest rate of 34 hectare‟s per hour.
Table 3.2: Kamco Power Reaper Kr 120
Engine Greaves Honda Sarover

Make
Particulars 120 120h 120ds
Fuel Petrol/ Kerosene Petrol Diesel
Hp Max 3.6 4.63 3.9
Travel 1forword,1 Reverse 1forword,1 Reverse 1 Forword,

1 Reverse
Cutting Reciprocating Knife Reciprocating Knife Reciprocating

Device Bar Bar Knife Bar
Cutting Adjustable 5 To 25 cm Adjustable 5 to 25 cm Adjustable 5

Height Ground Level to 25 cm
Cutting
Width 120 cm 120 cm 120 cm

3.3.3 Kamco TeraTrac 4w Tractor
The feature are compact Italian design, economic operation, four wheel drive
with power steering, ergonomic seating with armrest, kohlerlombardini water cooled
TREM 3 A cylinder engine 15.4HP, POT power 13.4HP, Working Width: 100cms,
OIB for trouble- free wet land operation.
The applications are pudding, inter cultivation, De weeding, other farming
operation, transportation.
The attachment are Rotovator, cultivator, ridger, plough, bed former, fail
mower, lawn mower, post hole digger, sprayer, tiller(1mt)etc..
3.3.4 Kamco Garden Tiller B30
The application are weeding, ridging, tilling and attachments is furrower
Table 3.3: Kamco Garden Tiller B30
Engine Honda Petrol(3.89)
Starter Recoil
Gear Box 1 Forward And 1 Reverse
Transmission Chain And Belt
Working Width 920mm (Adjustable)

3.3.5 Kamco Brush CutterB30
The features are Reliable, durable design, easy to start, quiet. Operation lightest
engines in their class, excellent and low vibration, comfortable to use over long
periods of time.
Table 3.4: Kamco Brush Cutter B30
Engine Honda GX-35
Fuel Petrol
Hp 1.6
Fuel Consumption 0.7-0.9/Hr
Cutting Device Steel Blade/ Nylon Rope
Start Recoil Type

3.3.6 Kamco Portable PumpsetKwp 30M
Table 3.5: Kamco Portable PumpsetKwp 30m

Engine
Briggs& Stratton,M8(550 Series)

Model
2.6 Kw
Rated Power
3600
Rpm
Petrol
Fuel
Pump
Mahendra EMB7C
Model
Centrifugal 1.5 Kw
Type
50mmx50mm
Size
6m
Max Sucti Head
17m
Max Total Head
0.701/h
Fuel Consumption

3.3.6 Kamco Portable PumpsetKwp 40s
Table 3.6: Kamco Portable PumpsetKwp 40s (Engine)

Engine
Briggs & Stratton

Model
3.4 Kw
Rated Power
3600
Rpm
Petrol
Fuel
Table 3.7: Kamco Portable PumpsetKwp 40s (Pump)
Pump
Mahendra GSP80P
Model
Self-priming-2.3 Kw
Type
80mmx80mm
Size
5m
Max Sucti Head
28m
Max Total Head
1.31/h
Fuel Consumption

3.4 ORGANIZATIONAL STRUCTURE
In KAMCO there are 11 Departments. They are as follows:-
 Marketing Department
 Finance Department
 Human Resource Department
 Materials Department
 Purchase Department
 Stores Department
 Quality Assurance Department
 Production Department
 Maintenance Department
 Research Development Department
 System Department

3.4.1 Marketing Department
Senior General
Manager
(Mkting)
Dy. General Manager
(Mkting)
Area Region Sales

Manager Manager Manager
Figure 3.1: Structure of Marketing Department
Survival of any company depends upon marketing strategies adopted. This
is particularly important in the competitive era. Surviving from a lot of difficulties
KAMCO became no:1 brand in the agricultural machinery market. Due to
globalization KAMCO products have to compete with the international product. The
product from China is the major treat for the company because of its low price. But
KAMCO is not ready to compromise with the quality of its products for reducing
price. The marketing strategy wins the target. Considering the Indian market now
there is only one competitor that now there is only one competitor that is VST tillers
and tractors, Banglore. Even facing all these competitions companies marketing
department plays a better role for getting good result. The strength of marketing
department is 25.

Head of the marketing is the responsible to ensure that all the individuals in
the marketing department follow all the marketing procedures. Entire marketing
departments are functioning as a team. Main duties of the marketing departments are
presales and after sales services and these are looked upon by everyone in the
department. So everyone is aware of that happens in the marketing section. In the
absence of one person other can looking to the problem.
3.4.1.1 Major Activities
Head of the marketing department on receipt of any order or enquiry passes it
to concern offers for further verification. All the orders including credit sales and
entered into the computer as order booking.
 All details such as purchase order no: date, model, quality ordered, delivery
schedule, payments terms are verified.
 Incase delivery schedule cannot be met as per the requirements of order it is
brought to the notice of the head of the department.
 Schedule amendments if any are inform to the dealer or customer
 The divisional head carries out one month wise order position review.
 When number of pending orders exceeds available stock or production
number tiller allotment register is updated and maintained.
 Records of tiller transfer notes maintained by stores are available in the
computer and the department generates dispatch advice.

3.4.2 Finance Department
MD
Manager
DGM Finance (Cost& Audit)
Dy. Manager
Dy. Manager Internal Audit
Accounts
Ass. Manager
Asst. Manager IA
Accounts
Superintend
Superintend
(IA)
Accounts
Accountants Accountants
Figure 3.2: Structure of Finance Department
Financial performance of an organization is very important factor for the long
term survival profitability of any organization. Finance is defined as the provision of
money at the time when it is required.

Every enterprise whether big, medium, or small needs finance to carry on its
operations to achieve its targets. It is livelihood of an enterprise. Without adequate
finance no enterprise can possibly accomplish its objective. This department controls
the overall financial transactions of the company. It controls the receipts and
payments of each and every activity for all the divisions.
In KAMCO, finance department plays a major role because in public sector
only very few companies and earning profit KAMCO is a multistoried multiunit
organization. It means KAMCO have more than one unit established with their own
fund. Surprising thing is that KAMCO is giving dividend and carrying profit for 22
years. The department keeps a record of everything concerning any expenses or
income.
3.4.2.1 Major Functions
Budget and Budgetary control: Annual budget are prepared for both capital and
revenue, based on the requirements furnished by various units and departments. The
departmental requisitions are analyzed and after consultation with the departmental
heads and corporate divisional management group and it are finalized bases on the
disposition of funds. Consolidated budgets are presented to management or board for
approval.
Budgetary control of the company is exercised by the costing department of
various departments. The budget is reviewed half yearly and revised if found
required based on the deviations of actual from budget. Such changes are submitted
to management or board through a revised budget for approval. This revision is
intimated to concerned department for implementation.

Management of Receipts: A payment from dealers or customers reviewed through
marketing department is acknowledged by issuing proper receipts. Customer wise or
dealer wise accounting is adopted. Debits outstand department are informed to
marketing department once in a month for further actions. Insurance, freight out
ward, bank negotiations etc are accounted and maintained to revise the cost of sales,
daily sales proceeds in the sales counter and other receipts are verified and
accounted. Half yearly reconciliation of payments and receipts with dealer is
prepared by accounts department and settled with dealer.
Management of Payments: Subject to the availability of funds, payment
commitments are honored on due dates. All the payments are passed mainly on the
basis of IGRR. Advance payments are settled within a time of 45 days. Non-receipts
or delayed receipts extra are brought to the notice of stress for remedial actions.
Payments are usually done by cheque or DD.
Auditing: Internal audit is mainly based on corporate functioning. Internal audit
mainly takes care for the „CARO‟ requirements of company‟s act. „Watch Dog‟ for
an entire organization. The main function of this department is to ensure that policy
decisions of the management is strictly followed by the functional departments and is
verified by the internal audit.
Costing: Costing records are maintained as per the cost accounting rules. They are
mainly subjected to cost audit ordered by company law board. Costing department
also advices management and departments, which are the potential areas of cost
reduction.

Mainly costing departments analyzes cost of productions on a yearly basis. Costing
department advices accounts departments the cost of rejection as per warranty claims
Statutory Transactions: Sales tax, Income tax etc., are issued and properly accounted
and timely settlements are made. Salary and other payments, recoveries and their
remittance etc., in the case of employees are done in time.
3.4.3 Human Resource Department
Senior HR
Asst. Senior HR
Deputy. Manager
HRD
Asst.HR Managers
Figure 3.3: Structure of Human Resource Department
Human recourse department deals with all the functions related to the human
recourses in an organization.

 Identify human recourses requirements, job specifications, skill needs.
 Evaluate and select suitable personnel
 Maintain the competence of personnel through HRD method
 A personnel record sheet is prepared of very personnel
 New appointments are put on orientation training for one or two weeks
duration
 Service training is given to permanent employees
 Department head will assess the training needs and forward it to HRD unit
head. HRD committee will examine the training requirement forwarded to the
HRD head. HRD committee will prepare training calendar. At the end of the
year HRD department will submit details of the training arranged to the MD
and MR.
 On receiving training each employees of unit is required to submit the
training report to HRD.
 Heads of the units prepare an evaluation sheet every six months and
aresending to the HRD head.
 HRD or personnel and administration maintain personnel record sheet
 Periodically assesses by the HRD committee assess employee competence.
 Evaluation of new employees after evaluation training is initiated by HRD.
3.4.3.2 Record Maintained in HRD
 Personnel record sheet
 Oriented training report

 Training report
 Evaluation sheet
 Report to MR
3.4.4 Materials Department
Senior Manager
Deputy Manager Personal Asst.

Purchase
Figure 3.4: Structure of Materials Department
It deals with the Purchase of materials, which include purchase planning and
selection of vendors.
3.4.4.1 Functions
Purchase planning: In purchase planning first of all, based on production target
annual budget is prepared. After this, worksheet is prepared. Based on the
worksheet, purchase proposal is made. If purchase proposal is for more than 1lakhs,
signature of managing director should be made on it. If it is more than 75000,
purchase committee should be signed onit. The purchase and DGM finance. If the
amount is more than 35000 the signature of senior manager is there.

Selection of Vendors: For the suppliers approaching for registration, following will
be applicable. The registration Form is issued to the supplier for filling up the
details these details are preceded and approved, to proceed further by Vendor
development committee. Technical personnel designated by HOD assess premises of
the supplier. The personnel who visit the premises fill up the vendor evaluation
report. After taking decision on the capability of the vendor based on vendor
evaluation report they requested to supply samples for approval. Then the samples
are submitted to the Quality Assurance department at head office and based on their
recommendations regarding samples, decision is taken on ordering on them. They are
registered as vendors by the purchase or materials department at head office.as
vendors by the purchase or materials department at head office. The first purchase
order is released on trial basis for small quantity. After satisfactory supply of trial
order, they are included in the approved vendor list and regular purchase order is
released depending on requirement of materials. The head of materials department
approves the vendor list.

3.4.5 Purchase Department
Deputy Manager
(Purchase)
Asst. Manager
Asst. Engineer
Senior Technical
Officer
Office Asst.
Figure 3.5: Structure of Purchase Department
All other function other than the purchase planning and vendor selection is
done by the purchase department. After approving the vendor list by the materials
department, the purchase department then issues a purchase order containing
department, the purchase department then issues a purchase order containing details
like material quality, rate payment terms, supply schedule etc. For the purchase of
other materials or office equipment‟s, each department has to submit a purchase
intend. The board of directors approves the purchase budget for each department at
the beginning of the year.

Based on the requirement, an enquiry is made Quotations are obtained from
all suppliers and a comparative statement is prepared. Once a supplier has been
chosen, the purchase details are sent for intending and financial commitment is made
for purchase of budgetary control.
3.4.5.1 Functions of Purchase Department
 Ensuring that all raw materials, semi-finished, fully finished components
is procured from approved vendors.
 Ensuring that the procurement action is taken in time by processing repeat
orders or tender enquires whenever applicable.
 Assessing vendor capability to effect supplies in accordance with purchase
order meeting acceptable quality and delivers so that they can be listed as
approved vendors.
 Ensuring that the goods received are of consistent quality conforming to
the standards or specifications of the purchase order
 Providing feedback to the vendors for improving quality of supplies and
materials.
 Ensuring that the vendor‟s performance is recorded monitored and suitably
graded.

3.4.6 Stores Department
Senior Manager
(Materials)
Deputy Manager
(Store)
Asst. Manager
Asst. Engineer Typist
Technical Asst.
General Workers
Figure 3.6 Structure of Stores Department
The materials that received from the vendors are stored in the stores department.
19 employees working under this department. When the materials have been
received by the goods clerk according to the purchase order. It is passed on the store,
along with the goods inspection report.

The store is a service department, headed by the general, who receives the
materials and issues them. They duty of the staff members I is not on by the receipt
and issue of materials but also many other functions to be compiled with as his
position is that not of managerial level.
3.4.6.1 Important Functions
 Store materials for the company
 Receipt and accounting of materials including stationary
 Product delivery
 Spare parts dispatch
 Issue of product in FIFO
3.4.6.2 Documents Followed by Materials Department
 Inspection and goods received report
 Inter location stock transfer receipt stock issue or transfer note.
 Stock return note
 Inter location stock transfer issue
 Stock issue cum delivery note
 Bin card
 Master record index for department quality manual amendments
 Material presentation Tag
 Material gate pass
 Delivery note

3.4.7 Quality Assurance Department
Manager QA
Asst.
Mechanics
Charge Head of Charge Head for

Charge Head for
Fully Bought Final Product
Plant
Mechanics Mechanics
Mechanics
Figure 3.7 Structure of Quality Assurance Department
Quality assurance Department inspects the quality of materials or parts, which
was received from the vendors. Quality management is becomes a key variables in
the strategic business policy of the organization at present. Quality management is an
important area which will require maximum attention of top management. The
attitudes of quality such as performance, features, conference, reliability, should be
constantly evaluated and upgraded so as to cope with the current and future market
demands.

Critical components are crank shaft, all engine parts, gear wheels etc. Non
critical components are nuts, bolts and screws etc. The clarification is mainly for
ignoring the practical difficulty in checking non critical components and only sample
inspection in non-critical components. Practical difficulty in checking the non-
critical component is the problem there from here the production department as there
requirements takes the components. After getting a finished product from the
assembly department for the final checking. If getting a finished product from the
assembly department for the final checking. If it is Ok it is gone to the store. From
these the machine will enter into marker through dealers.
Calibration cell: Quality assurance Department is equipped with all modal facilities.
The company has calibration cell to check and correct the measurements of all
measuring instruments. A standard committee consisting of the following officers
will meet in the beginning of the year upon approval of the budget and as end when
required to assess the metrology or measuring or testing equipment,
DGM(QA) - Convener
Department Head(QA) - Member
Department Head - Member
Department Head(Engineering) - Member

3.4.8 Production Department
Manager
(Production)
Deputy. Manager
Shift Officer Shift Officer Shift Officer

(Machine Shop) (Assembly) (Pretreatment
& Painting)
Figure 3.8 Structure of Production Department
Production Department is also known as works department. It is divided into
Assembly shop, Machine shop, and a small sub unit for painting which is a sub unit
of assembly shop. Annual production is based on the budget this production figure is
broken down into monthly targets. Assembly of power tiller is done in separate
assembly line viz, engine line, transmission line, tiller line.
Parts required for assemblies are got through stock issue notes. Parts required
for assembly at each work center is located in bines at appropriate work section with
indication standard parts required by different work centers are kept in centralized
places. Painted parts are obtained from the painting section. Assembly is carried out
as per process chart. Work carried out in each work centers is recorded. In an
assembly line record each assembly line where chassis or engine number of each
assembly is noted.

After completion of each assembly line concerned machine verifies the
assembly and sign the assembly tags with date. At the end of each assembly chief
mechanic of that line clears the assembly for the next assembly line. Assembly
rejections are removed from the work Centre. Tillers are offered for inspection to QA
department along with tiller Completion report. Engine after inspection are handed
back with finished tiller inspection report.
Assembly Shop: Assembly is one of the major sections in production department.
The finished components are taken from the stores and it is sent to assembly as
required. The engine assembly is one of the main works in the assembly. After
testing the assembled engines, it is sent to the painting section. Through different
transmission in the assembly we get the finished products. In the power tiller here
using two types of engines (Diesel engines and DI engines)
Painting Booth: In KAMCO they are using a good advanced booth. After cleaning
the components it will go for painting through a conveyer belt and after painting it
will go over through the belt. Mainly they are using two colors for painting one is
Ash and other is Post office red.
Machine Shop: Company has a machine shop which is producing 15 components.
These are critical components. Company has a modern machine shop with special
purpose machines which ensures conformity with prescribed quality standards. The
materials purchased by the purchase department, then sent to the stores from their
materials to the QA department, it sent to the Machine shop.

3.4.9 Maintenance Department
Manager
Pdn
Asst. Manager
(Maintenance)
Asst. Engineer
Charge Head Charge Head
Mechanical Electrical
Figure 3.9 Structure of Maintenance Department
Maintenance Department deals with the maintenance of machine tools and
equipment used for production.
3.4.9.1 Types of Maintenance Followed in KAMCO
Mainly there are 3 types of Maintenance Management:-
 Preventive Maintenance
 Breakdown Maintenance
 General Maintenance

Spares and consumables required are procured as and when required. Review
of spare parts and consumables is carried out once in a year. Shift arrangements are
done by HOD of maintenance. In Preventive maintenance, schedule is prepared by
head of the department and is given to concerned department and electrical or
mechanical maintenance section. Electrician or mechanic under the supervision of
change hand takes up the machines for preventive maintenance. All the machines and
equipment are attended once in every month, defects notices if any rectified. Head of
the department carries out final checks. After carrying out preventive maintenance
work the preventive maintenance checklist are filled up by the electrician or
mechanic and counter signed by charge hand or chief mechanic department head
reviews the reports every month. Monthly report is given to divisional head.
Maintenance schedules are reviewed every 6 months by divisional head.
In Breakdown Maintenance, maintenance or repair order is made by the
concerned department indicating the location of nature of faults and signed by the
reporting officer. Maintenance order is received by the section head and handed over
to the concerned charge hand for execution. After completion of the work the
operation is demonstrated and the mechanic hands over the equipment to the concern
department. Repair completion report is given to the concerned department.
Maintenance work is also done through outside agencies and the transactions are
recorded. Machine breakdown data is analyzed using Pareto‟s principle. Spare parts
maintenance is done once in a year Areas covered by the maintenance department are
electrical, substation, telephone system, water supply system, welding operations and
general maintenance.

3.4.10 Research and Development Department
DGM (R& D)
Asst. Manager
Chief Draftsmen Chief Mechanic
2 Draftsmen 1 Mechanic
Figure 3.10 Structure of Research and Development Department
KAMCO has a very intelligent research and development team. The R and D
activities of the company are now being attached to the engineering departments.
Government of India had stipulated certain norms to meet the minimum performance
standard for the power tiller in view of the complaints of farmers on the performance
of power tillers especially after the introduction of Chinese tillers. According all the
power tiller manufactures have been advised to company with the minimum
performance standards to consider subsidy for the power tiller at the end of the final
year.

The modifications are implemented by delivering safety cover with in the
record time and the tiller got tested and approved by central farm testing and training
institute, Budni during May-July 2001, Government of India had cleared training
institute, Budni during May-July 2001, Government of India had cleared KAMCO
power tiller meeting minimum standards in July 2001 for eligibility of subsidy.
 Revise drawings for correction or improvement based on feedback from
customer feedback from production, purchase and Quality assurance
departments.
 This covers activities with regard to modifications for improvement to
products and consequent changes to the relevant drawings.
 Keeping all drawings in safe custody, maintain them promptly and issue
copies to indenting department

3.4.11 System Department
DGM
(F&CS)
Manager System
Manager
Security &
Networking
Programmer Programmer
Figure 3.11 Structure of System Department
This is the youngest department in the company. KAMCO is still in the
process of developing a system whereby it can make optimum usage of IT recourses.
At present KAMCO makes use of a customized ERP package based on ORACLE.
The package was developed and is implemented in 2001-2002. The system
department does not play a role in production planning.

CHAPTER- 4
DATA ANALYSIS AND INTERPRETATION

CHAPTER- 4
DATA ANALYSIS AND INTERPRETATION
4.1 NET WORKING CAPITAL
Networking capital refers to the difference between current assets and current
liabilities. It is a qualitative concept which indicates the liquidity position of a firm.
Net Working Capital = Current Assets – Current Liabilities
Table 4.1: Net Working Capital
Current Assets Current Liabilities Net Working Capital

Year (Rs) (Rs) (Rs)
2012-2013 1279676847 445501660 834175187
2013-2014 1496948105 580519939 916428166
2014-2015 1586457376 606178148 980279228
2015-2016 1505660941 558425266 947235675
2016-2017 1622547911 625207400 997340511
2017-2018 1394282276 344974726 1049307550
2018-2019 1539800883 423201117 1116599766

(Source : Annual Report of the Company from 2013-2019)
The above table shows the changes in working capital from 2013-2019. It
shows a positive trend from 2013-2015 which shows the efficiency of the firm i.e., the
working capital condition of the company is at satisfactory level. There was an only
decline in net working capital in 2015-2016 i.e., the net working capital shows a
negative trend.
1.2E+09
Net Working Capital

1E+09
800000000
600000000
400000000
200000000
0
Year
Figure 4.1: Net Working Capital
4.2 RATIO ANALYSIS
Ratios like current ratio, quick ratio, absolute liquid ratio, inventory turnover
ratio, inventory holding period, fixed asset turnover ratio, debtors turnover ratio,
debtors collection period, working capital turnover ratio, accounts receivables and net
working capital, cash and working capital, stock and working capital, creditors turnover
ratio, creditors payment period ratio, inventory and current asset ratio, inventory
turnover ratio and cash turnover ratio were used here for analysis.
4.2.1 Current Ratio
The current ratio is an important measure of liquidity because short-term
liabilities are due within the next year. This means that a company has a limited amount
of time in order to raise the funds to pay for these liabilities. It shows the ability of the
firm to meet the current obligations as and when these are during the short term period.
The standard current ratio is 2:1
Current Ratio = Current Assets /Current Liabilities

Table 4.2: Current Ratio
Current Current Current Ratio

Year Assets (Rs) Liabilities (Rs) (in times)
2012-2013 1279676847 445501660 2.9
2013-2014 1496948105 580519939 2.6
2014-2015 1586457376 606178148 2.6
2015-2016 1505660941 558425266 2.7
2016-2017 1622547911 625207400 2.6
2017-2018 1394282276 344974726 4.1
2018-2019 1539800883 423201117 3.6

(Source: Annual Report of the Company from 2013-2019)
The current ratio of the company reveals the liquidity position of the company
is good. This is because the firm current ratio is 2:1 position in all years. The above
table indicates the current ratio was decreasing till 2016-2017. In the year 2017-2018
the firm had a higher current ratio that is 4.1 so the company is able to meet current
liabilities.

4.5
4
3.5
Current Ratio 3
2.5
2
1.5
1
0.5
0
Year
Figure 4.2: Current Ratio
4.2.2 Quick Ratio
Quick ratio or liquidity ratio measures the ability of a company to use its near
cash or quick assets to extinguish or retire its current liabilities immediately. Quick
assets include those current assets that presumably can be quickly converted to cash at
close to their book values. Generally a liquid ratio 1:1 is considered to represent a
satisfactory commend or financially position.
Quick Ratio = Quick Assets /Current Liabilities

Table 4.3: Quick Ratio
Quick Assets Current Quick Ratio

Year (Rs) Liabilities (Rs) (in times)
2012-2013 809398643 445501660 1.8
2013-2014 952245753 580519939 1.6
2014-2015 1155182886 606178148 1.9
2015-2016 1216006750 558425266 2.1
2016-2017 1261720809 625207400 2
2017-2018 973731899 344974726 2.8
2018-2019 1068855218 423201117 2.5

It is clear from the above table that the quick ratio/liquid ratio of the
company achieved the ideal quick ratio 1:1 in seven years i.e., from 2013-2019. In the
year 2012-2013 the liquidity ratio is 1.8 and there is slight decrease in the year 2013-
2014. In the year of 2017-2018 the company had higher quick ratio that is 2.8. So it
indicates that KAMCO have the capacity to pay off its short term obligations.

3
2.5
Quick Rtio
2
1.5
1
0.5
0
Year
Figure 4.3: Quick Ratio
4.2.3 Absolute Liquid Ratio
Therefore while calculation of absolute liquid ratio only the absolute liquid
assets as like cash in hand cash at bank, short term marketable securities are taken in
to consideration to measure the ability of the company in meeting short-term
financial obligation.
Absolute liquid ratio = Absolute Liquid Assets/Current Liabilities

Table 4.4: Absolute Liquid Ratio
Absolute Liquid Current Liabilities Absolute Liquid Ratio

Year Assets (Rs) (in times)
(Rs)
2012-2013 264403106 445501660 0.5
2013-2014 249737839 580519939 0.4
2014-2015 292714412 606178148 0.4
2015-2016 107208865 558425266 0.1
2016-2017 157171730 625207400 0.2
2017-2018 186188488 344974726 0.5
2018-2019 257053355 423201117 0.6

The standard absolute liquidity ratio is 0.5: 1. From the table 4.4 it is clear that
the absolute liquid ratio is below the standard from 2014-2017. Therefore, proper care
must be given for improving the liquidity position. But there is a slight improvement in
the year 2017-2018 and 2018-2019.

0.6
Absolute Liquid Ratio 0.5
0.4
0.3
0.2
0.1
Year
Figure 4.4: Absolute Liquid Ratio
4.2.4 Inventory Turnover Ratio (ITR)
The inventory turnover ratio is an efficiency ratio that shows how effectively
inventory is managed by comparing cost of goods sold with average inventory for a
period. This measures how many times average inventory is “turned” or sold during a
period. Inventory turnover ratio indicates the efficiency of the firm in producing and
selling its product. It shows the rate at which inventories are converted in to sales and
then in to cash.
Inventory Turnover Ratio = Net Sales/Average Inventory

Table 4.5: Inventory Turnover Ratio
Inventory
Average inventory
Year Net Sales (Rs) turnover Ratio
(Rs)
(in times)
2012-2013 1677761646 247007580 6.7
2013-2014 1897235509 238165939 7.9
2014-2015 1680210010 209525727 8.0
2015-2016 1519785536 192491306 7.8
2016-2017 1531004451 192506919 7.9
2017-2018 1559802688 210304696.5 7.4
2018-2019 1789511305 275319027 6.5

Table 4.5 reveals that there is high inventory turnover ratio from 2013-2019. A
high inventory turnover ratio indicates efficient management of inventory because
more frequently the stocks are sold the lesser amount of money is required to finance
inventory. Thus the inventory turnover ratio is satisfactory.

Inventory Turnover Ratio

8
Year
Figure 4.5: Inventory Turnover Ratio
4.2.5 Inventory Holding Period Ratio
The company can then divide the days in the period by the inventory turnover
formula to calculate the days it takes to sell the inventory on hand. It is calculated
Inventory Holding Period Ratio = Days in an year/Inventory turnover ratio.

Table 4.6: Inventory Holding Period Ratio
Year Days in an Year ITR (in times) Ratio ( in days)
2012-2013 365 6.7 54.4
2013-2014 365 7.9 46.2
2014-2015 365 8.0 45.6
2015-2016 365 7.8 46.7
2016-2017 365 7.9 46.2
2017-2018 365 7.4 49.3
2018-2019 365 6.5 56.1

Table: 4.6 shows that the inventory holding period is fluctuating. The highest
inventory holding period is in the year 2018-2019. The inventory holding period is
decreasing from 2014-2018. It represents that the company have efficiency of
management to convert the inventory into cash and it is good for the working capital of
the company.

Inventory ahaolding Period

60
50
40
Ratio
30
20
10
0
Year
Figure 4.6: Inventory Holding Period Ratio
4.2.6 Fixed Asset Turnover Ratio
The return on assets ratio is an important profitability ratio because it measures
the efficiency with which the company is managing its investment in assets and using
them to generate profit. It measures the amount of profit earned relative to the firm's
level of investment in total assets. It measures the efficiency with which a firm is
utilizing its fixed assets in producing sales.
Fixed Asset Turnover Ratio = Net Sales /Fixed Asset

Table 4.7: Fixed Asset Turnover Ratio
Year Net Sales (Rs) Fixed Assets (Rs) Ratio (in times)
2012-2013 1677761646 182280275 9.3
2013-2014 1897235509 181343889 10.5
2014-2015 1680210010 202012270 8.4
2015-2016 1519785536 249815577 6.1
2016-2017 1531004451 226017067 6.8
2017-2018 1559802688 206184753 7.6
2018-2019 1789511305 196402379 9.1

In the year 2012-2013 the fixed asset turnover ratio is 9.3. In 2013-2014 it
increases to 10.5. Highest ratio that is 10.5 was in 2013-2014. And again it decreases
to 8.4. Fixed asset turnover ratio is fluctuating year after year. In the year 2018-2019
the fixed asset turnover ratio is 9.1. The overall high ratio indicates the efficient
utilization of fixed asset.

Fixed Asset Turnover Ratio

12
10
8
6
4
2
0
Year
Figure 4.7: Fixed Asset Turnover Ratio
4.2.7 Debtors Turn Over Ratio
Debtor's Turnover Ratio is an accounting measure used to measure how effective
a company is in extending credit as well as collecting debts. The receivables turnover
ratio is an activity ratio, measuring how efficiently a firm uses its assets.
The liquidity position of the firm depends on the quality of debtors play great
extent. Debtor’s turnover ratio indicates the velocity of debt collection of a firm.
Generally the higher value of the debtor’s turnover, the more efficient is the manager
of the credit. Debtor’s turnover can be calculated by dividing total sales by average
debtors.
Debtors turnover ratio = Credit Sales /Average Debtors

Table 4.8: Debtors Turnover Ratio
Average
Credit Sales (Rs) Ratio (in times)
Year Debtors (Rs)
2012-2013 499695432 410187666 1.2
2013-2014 602102189 550898810.5 1
2014-2015 1007823009 804962599 1.2
2015-2016 1062363850 1035093430 1
2016-2017 1045628297 1053996074 0.9
2017-2018 691992350 868810323.5 0.8
2018-2019 673803030 682897690 0.9

The above table shows a decreasing trend. In the year 2012-2013 and 2014-2015
the company had higher ratio was 1.2. And the low ratio means the period of credit
allowed is too high. It shows the in efficiency of company to realize the cash from
debtors and it is not favorable condition for the company.

Debtors Turnover Ratio

1.2
1
0.8
0.6
0.4
0.2
0
Year
Figure 4.8: Debtors Turnover Ratio
4.2.8 Debtors Collection Period
In accounting the term Debtor Collection Period indicates the average time
taken to collect trade debts. In other words, a reducing period of time is an indicator
of increasing efficiency.
The average number of days for which debtors remain outstanding is called as
average collection period. The average collection period measures the quality of
debtors, since it indicates the speed of their collection.
Debtors Collection Period = Days in an year/ Debtors turnover ratio

Table 4.9: Debtors Collection Period
Debtors collection
Debtors turnover
period
Year Days in an Year ratio (in times)
( in days)
2012-2013 365 1.2 304
2013-2014 365 1 365
2014-2015 365 1.2 304
2015-2016 365 1 365
2016-2017 365 0.9 406
2017-2018 365 0.8 456
2018-2019 365 0.9 406

The above table shows an increasing trend. It’s the days months or years within
which firm can convert its receivables in to cash. Here the collection period is
increasing year by year. And it’s not a favorable condition for a company.

Debtors Collection Period

500
400
300
200
100
0
Year
Figure 4.9: Debtors Collection Period
4.2.9 Working Capital Turnover Ratio
It indicates a company's effectiveness in using its working capital. And also
indicates the number of times the working capital is converted into sales.
Working Capital Turnover Ratio = Sales /Net Working Capital

Table 4.10: Working Capital Turnover Ratio
Net Working Capital

Year Net Sales (Rs) Ratio (in times)
(Rs)
2012-2013 1677761646 834175187 2.0
2013-2014 1897235509 916428166 2.1
2014-2015 1680210010 963203589 1.7
2015-2016 1519785536 947235675 1.6
2016-2017 1531004451 997340511 1.5
2017-2018 1559802688 1049307550 1.4
2018-2019 1789511305 1116599766 1.6

The above table shows that in the year 2012-2013 the ratio is 2.0 then in the next
year it is increased to 2.1. Then coming years it is decreased. Generally, a higher ratio
indicates efficient utilization of working capital, but at the same time too much
utilization of net working capital will adversely affect the firm’s day to day operations
and very high working capital turnover is not a good situation. But during the period
from 2015-2018 it decreased and ratio becomes 1.4 it indicates a good situation.

Working Capital Turnover

2.5
2
1.5
Ratio
1
0.5
0
Year
Figure 4.10: Working Capital Turnover Ratio
4.2.10 Accounts Receivables and Networking Capital
The ratio is intended to evaluate the ability of a company to efficiently issue
credit to its customers and collect funds from them in a timely manner.
Accounts Receivables & Networking Capital Ratio = Debtors /Net working capital

Table 4.11: Accounts Receivables & Networking Capital Ratio
Net Working Ratio

Year Debtors (Rs)
Capital (Rs) (in times)
2012-2013 499695432 834175187 0.6
2013-2014 602102189 916428166 0.7
2014-2015 1007823009 963203589 1.0
2015-2016 1062363850 947235675 1.1
2016-2017 1045628297 997340511 1.0
2017-2018 691992350 1049307550 0.6
2018-2019 673803030 1116599766 0.6

Table 4.11 shows accounts receivables and net working capital increased from
the year 2013-2016. But it decreased from 2017-2019. The above table indicates that
the receivables on net working capital of the company are fluctuating.

Networking Capital Ratio

Accounts Receivables &
1.2
1
0.8
0.6
0.4
0.2
0
Year
Figure 4.11: Accounts Receivables & Networking Capital Ratio
4.2.11 Cash and Working Capital
The cash to working capital ratio is another useful tool that’s available to you
for evaluating a potential investment. It explains the relationship between cash and
working capital.
Cash and Working Capital Ratio = Cash/ Net Working Capital

Table 4.12: Cash and Working Capital Ratio
Net Working Capital

Year Cash (Rs) Ratio (in times)
(Rs)
2012-2013 264403106 834175187 0.3
2013-2014 292714412 916428166 0.3
2014-2015 107208865 963203589 0.1
2015-2016 113118685 947235675 0.1
2016-2017 157171730 997340511 0.2
2017-2018 186188488 1049307550 0.2
2018-2019 257053355 1116599766 0.2

Table 4.12 shows that in the year 2012-2013 and 2013-2014 cash and working
capital ratio is 0.3. But it decreased from the year 2015-2019. In present situation the
company has sufficient working capital. The entire cash balance is used to work in
day to day activities.

Cash and Working Capital

0.3
0.25
0.2
Ratio 0.15
0.1
0.05
0
Year
Figure 4.12: Cash and Working Capital Ratio
4.2.12 Stock and Working Capital
It shows the relationship between stock and working capital.
Stock and Working Capital = Stock/ Net Working Capital

Table 4.13: Stock and Working Capital Ratio
Year Stock (Rs) Net Working Ratio (in times)

Capital(Rs)
2012-2013 470278204 834175187 0.6
2013-2014 544702352 916428166 0.6
2014-2015 414198851 963203589 0.4
2015-2016 289654191 947235675 0.3
2016-2017 360827102 997340511 0.4
2017-2018 420550377 1049307550 0.4
2018-2019 470945665 1116599766 0.4

Table 4.13 shows stock and net working capital ratio increase during the year
2013 and 2014 but it is decreased from 2015-2019. The decline in ratio is due to the
increase in net working capital. Then our working capital will be improved to every
year and to success the day to day operations.

Stock and Working Capital

0.6
0.5
0.4
Ratio
0.3
0.2
0.1
0
Year
Figure 4.13: Stock and Working Capital Ratio
4.2.13 Cash Turnover Ratio
Cash Turnover Ratio = Sales /Cash
Table 4.14: Cash Turnover Ratio
Year Sales Cash Ratio( in times)
2012-2013 1677761646 264403106 6.3
2013-2014 1897235509 292714412 6.5
2014-2015 1680210010 107208865 15.7
2015-2016 1519785536 113118685 13.4
2016-2017 1531004451 157171730 9.7
2017-2018 1559802688 186188488 8.4
2018-2019 1789511305 257053355 6.9

Table 4.14 show that cash turnover ratio is increasing during the period of
2013- 2015. It decreases in 2016-2019. It represent that the sales is increasing but the
cash is both increasing and decreasing.

So the company wants to increase the cash along with sales.
16
Cash Turnover Ratio

14
12
10
8
6
4
2
0
Year
Figure 4.14: Cash Turnover Ratio

4.3 TREND ANALYSIS
4.3.1 Trend Analysis of Working Capital
It is an aspect technical analysis that tries to predict the future movement of a
stock based on past data. Under trend analysis, fitting the linear trend by the least –
squares method is used for this study.
Table 4.15: (A) Trend Analysis of Working Capital
Net Working
Year u=x-A u*u uy (Rs)
Capital (y)
2012-2013 834175187 -3 9 -2502525561
2013-2014 916428166 -2 4 -1832856332
2014-2015 963203589 -1 1 -963203589
2015-2016 947235675 0 0 0
2016-2017 997340511 1 1 997340511
2017-2018 1049307550 2 4 2098615100
2018-2019 1116599766 3 9 3349799298
Total 6824290444 0 28 1147169427
A = 2016
a = Total (y)/N = 6824290444/7 = 974898634.9
b = Total (uy)/(u*u) = 1147169427/28 = 40970336.68

y = a+b(u)

Table 4.16: (B) Working Capital for Next Seven Years
Year a u b(u) a+b(u)
2020 974898634.9 4 163881346.7 1138779982
2021 974898634.9 5 204851683.4 1179750318
2022 974898634.9 6 245822020.1 1220720655
2023 974898634.9 7 286792356.8 1261690992
2024 974898634.9 8 327762693.4 1302661328
2025 974898634.9 9 368733030.1 1343631665
2026 974898634.9 10 409703366.8 1384602002

(Source: Primary Data)
Table: 4.17: (C) Expected Working Capital (Rs)
Year Amount
2020 1138779982
2021 1179750318
2022 1220720655
2023 1261690992
2024 1302661328
2025 1343631665
2026 1384602002
Table 4.17 show that the forecasted value of working capital shows an
increasing trend. It will affect the day to day performance of the company.

1.6E+09
Expected Working Capital

1.4E+09
1.2E+09
1E+09
800000000
600000000
400000000
200000000
0
2020 2021 2022 2023 2024 2025 2026
Year
Figure 4.15: Expected Working Capital
4.3.2 Sales Forecasting of Next Seven Years
Table 4.18: (A) Sales Forecasting of Next Seven Years
Year Sales(y) u=x-A u*u uy
2012-2013 1677761646 -3 9 -5033284938
2013-2014 1897235509 -2 4 -3794471018
2014-2015 1680210010 -1 1 -1680210010
2015-2016 1519785536 0 0 0
2016-2017 1531004451 1 1 1531004451
2017-2018 1559802688 2 4 3119605376
2018-2019 1789511305 3 9 5368533915
Total 11655311145 0 28 -488822224


A = 2016
a = Total (y)/N = 11655311145/7 = 1665044449
b = Total (uy)/(u*u) = -488822224/28 = -17457936.57
y = a+b(u)
Table 4.19: (B) Sales for Next Seven Years (Rs)
Year a u b(u) a+b(u)
2020 1665044449 4 -69831746.28 1595212703
2021 1665044449 5 -87289682.85 1577754766
2022 1665044449 6 -104747619.4 1560296830
2023 1665044449 7 -122205556 1542838893
2024 1665044449 8 -139663492.6 1525380956
2025 1665044449 9 -157121429.1 1507923020
2026 1665044449 10 -174579365.7 1490465083


Table 4.20: (C) Expected Sales (Rs)
Year Amount
2020 1595212703
2021 1577754766
2022 1560296830
2023 1542838893
2024 1525380956
2025 1507923020
2026 1490465083
Table 4.20 shows that the forecasted value of the sales shows an decreasing trend.
It is not good for the company.
1.62E+09
1.6E+09
1.58E+09
Expected Sales
1.56E+09
1.54E+09
1.52E+09
1.5E+09
1.48E+09
1.46E+09
1.44E+09
1.42E+09
2020 2021 2022 2023 2024 2025 2026
Year
Figure 4.16: Expected Sales

4.4 COMPARATIVE STATEMENT OF WORKING CAPITAL

Table 4.21:
Comparative Statement of Working Capital for the Year 2012-2013
Changes in Working
31st March Capital
Particulars
2012 2013 Increase Decrease
A) CURRENT
ASSETS
Inventory 402625678 470278204 67652526 -
Trade receivable 320679900 499695432 179015532 -
Cash and Bank 389514236 264403106 - 125111130
Loans and advances 39889507 34174810 - 5714697
Other current assets 17954453 11125295 - 6829158
(a) Total (A) 1170663774 1279676847
B) CURRENT
LIABILITIES
Trade Payable 333885158 383239055 - 49353897
Other current liabilities 29106376 30044120 - 937744
Short term provisions 20794947 32218485 - 11423538
(b) Total (B) 383786481 445501660
Net working capital(a-b) 786877293 834175187 47297894 -
Net increasing in 47297894 - - -

working capital
Total 834175187 834175187 293965952 199370164

The above table indicates that the schedule of changes in working capital as on
2012-2013. The current asset has increased in the year 2013 from 1170663774 to
1279676847. The current liabilities for the year 2012 is 383786481. It has increased
to 445501660 in 2013. The net working capital is increased to 47297894. The
company utilized its cash and bank balances to pay off the liabilities and provisions
because the cash and bank balances are decreased in this year.

Table 4.22:
Changes in Working
31st March Capital
Particulars
A) CURRENT
ASSETS
Inventory 470278204 544702352 74424148 -
Cash and Bank 264403106 292714412 28311306 -
Loans and advances 34174810 41207876 7033066 -
Other current assets 11125295 16221276 5095981 -
(a) Total (A) 1279676847 149694810
B) CURRENT
LIABILITIES
Trade Payable 383239055 501472649 - 118233594
Other current liabilities 30044120 229472649 7096877 -
(b) Total (B) 445501660 580519939

working capital
Total 916428166 916428166 306621114 142115156

2013-2014. The current asset has decreased in the year 2014 from 1279676847 to
149694810. The current liabilities for the year 2013 is 445501660. It has increased to
580519939 in 2014. The net working capital is increased to 82252979.

Table 4.23:
Changes in Working
31st March Capital
Particulars
A) CURRENT
ASSETS
Inventory 544702352 414198851 - 130503501
Cash and Bank 292714412 124284503 - 168429909
Loans and advances 41207876 33545300 - 7615563
(a) Total (A) 1496948105 1586457376
B) CURRENT
LIABILITIES
Trade Payable 501472649 483522305 17950344 -
(b) Total (B) 580519939 606178148

working capital
Total 980279228 980279228 487522226 359773089

to 606178148 in 2015. The net working capital is increased to 63851062.

Table 4.24:
Changes in Working
31st March Capital
Particulars
A) CURRENT
ASSETS
Inventory 414198851 289654191 - 124544660
Cash and Bank 124284503 113118685 - 11165818
(a) Total (A) 1586457376 1505660941
B) CURRENT
LIABILITIES
Trade Payable 483522305 396099160 - 87423145
Short term provisions 75567154 98914381 23347227 -
(b) Total (B) 606178148 558425266
Net working capital(a-b) 980279228 947235675 - 469532147
Net decreasing in -469532147 - - -

working capital
Total 947235675 947235675 97250109 695331573

2015-2016. The current asset has decreased in the year 2016 from 11586457376 to
1505660941. The current liabilities for the year 2015 is 606178148. It has decreased
to 558425266 in 2016. The net working capital is decreased to 469532147.
Table 4.25:
Changes in Working
31st March Capital
Particulars
A) CURRENT
ASSETS
Inventory 289654191 360827102 71172911 -
Trade receivable 1062363850 1045628297 - 16735553
Cash and Bank 113118685 157171730 44053045 -
(a) Total (A) 1509498991 1622547911
B) CURRENT
LIABILITIES
Trade Payable 396099160 433684564 37585404 -
Short term provisions 98914381 131817546 32903165
(b) Total (B) 558425266 625207400

working capital
Total 997340511 997340511 254215927 20441988
1622547911. The current liabilities for the year 2016 is 55842566. It has increased to
625207400 in 2017. The net working capital is decreased to 40104836.
Table 4.26:
31st March Changes in Working

Capital
Particulars
A) CURRENT
ASSETS
Inventory 360827102 420550377 59723275 -
Cash and Bank 157171730 186188488 29016758 -
(a) Total (A) 1622547911 1394282276
B) CURRENT
LIABILITIES
Trade Payable 433684564 233363267 - 200321297
(b) Total (B) 625207400 344974726
Net increasing in working 51967039 - - -

capital
Total 1049307550 1049307550 178507930 633985699
The above table indicates that the schedule of changes in working capital as
on 2017-2018. The current asset has decreased in the year 2018 from 1622547911 to
1394282276. The current liabilities for the year 2017 is 625207400. It has decreased
Table 4.27:
Changes in Working
31st March Capital
Particulars
A) CURRENT
ASSETS
Inventory 420550377 470945665 50395288 -
Cash and Bank 186188488 257053355 70864867 -
(a) Total (A) 1394282276 1539800883
B) CURRENT
LIABILITIES
Trade Payable 233363267 274527654 41164387 -
(b) Total (B) 344974726 423201117

working capital
Total 1116599766 1116599766 337224268 46187055
CHAPTER- 5
FINDINGS, RECOMMENDATIONS AND CONCLUSION

CHAPTER- 5
FINDINGS, RECOMMENDATIONS AND CONCLUSION
5.1 FINDINGS
The main findings of the study made at KAMCO Ltd. by analysing the
financial data of the last seven years from 2013-2019 are:
 The current ratio of the company reveals the liquidity position of the company
is good. This is because the firm current ratio is 2:1 position in all years.
 The quick ratio/liquid ratio of the company achieved the ideal quick ratio 1:1
in seven years i.e., from 2013-2019. In the year 2012-2013 the liquidity ratio
is 1.8 and there is slight decrease in the year 2013-2014. In the year of 2017-
2018 the company had higher quick ratio that is 2.8. So it indicates that
KAMCO have the capacity to pay off its short term obligations.
 It is clear that the absolute liquid ratio is below the standard from 2013-2017.
Therefore, proper care must be given for improving the liquidity position.
 There is high inventory turnover ratio from 2014-2018 except 2013 and 2019.
A high inventory turnover ratio indicates efficient management of inventory
because more frequently the stocks are sold the lesser amount of money is
required to finance inventory. Thus the inventory turnover ratio is satisfactory.
 The company has efficiency of management to convert the inventory into cash
and it is good for the working capital of the company.
 Fixed asset turnover ratio is fluctuating year after year. The overall high ratios
indicate the efficient utilization of fixed asset.
 The debtors turnover ratio shows the in efficiency of company to realize the
cash from debtors and it is not favorable condition for the company.
Vimal Jyothi Institute of Management & Research Chemperi, Kannur Page | 107
 Accounts receivables and net working capital increased from the year 2013-
2015. But it decreased from 2016-2019. It indicates that the receivables on net
working capital of the company are fluctuating.
 In present situation the company has sufficient working capital. The entire
cash balance is used to work in day to day activities.
 The cash turnover ratio is increasing during the period of 2013-2015. It
decreases in 2016-2019. It represent that the sales is increasing but the cash is
both increasing and decreasing. So the company wants to increase the cash
along with sales.
 The forecasted value of working capital shows an increasing trend. It will
affect the day to day performance of the company.
 The forecasted value of the sales shows an decreasing trend. It is not good for the
company.
5.2 RECOMMENDATIONS
 Liquidity position of KAMCO is not better. So the firm can maintain proper
liquid fund like cash and bank balances which is essential for better liquidity
position.
 The firm have high inventory so the firm can reduce the stock by increasing
sales.
 The company can increases the shareholders fund and it will help to improve
goodwill of the company.
 The debt capital is not utilized effectively so that the company can extend its
debt capital.
 Try to maintain more fixed asset to future benefits.
 KAMCO can increase the price of final products or decreases the cost of
production for better profitability.
 The company can increase it’s the source of fund to make effective research
and development for more profit in the future year.
5.3 CONCLUSION
The study is made on the topic the working capital management with seven
years data in KAMCO Ltd. The company was incorporated with the intension of
manufacturing and marketing agricultural machines for small and marginal farmers.
Company’s products are A9-12HP Diesel operated power tiller, a power reaper
running on 3.2 HP Kerosene Engine and 9-12 HP Diesel. Athani and palakkad units
manufacture diesel power tillers whereas kalamassery unit manufactures Diesel
Engines and now reaper also. The unit which came up at Mala recently took up the
production of reapers.
The research methodology adopted for this study is mainly from secondary
sources of data which includes annual reports of KAMCO and websites of the
company. Ratio analysis, trend analysis are the tools which are used here for analysis.
The current ratio of the company reveals the liquidity position of the company
is good. The absolute liquid ratio is below the standard from 2014-2017. Therefore,
proper care must be given for improving the liquidity position. The company have
efficiency of management to convert the inventory into cash and it is good for the
working capital of the company. Fixed asset turnover ratio is fluctuating year after
year. The overall high
ratio indicate the efficient utilization of fixed asset. The debtors turnover ratio shows
the in efficiency of company to realize the cash from debtors and it is not favorable
condition for the company. To conclude, it can be said that the firm has been on the
way of development, expansion and cost cut programs, which would give better
results in future.
ANNEXURES
BALANCE SHEETS
Balance Sheet for the Year 2013 of KAMCO Ltd.
Particulars 2012-2013
Shareholders Fund
Share Capital 16146000
Reserves and Surplus 1024458974
Non-Current Liabilities
Long Term Borrowings -
Differed Tax Liabilities 7011233
Current Liabilities
Short- Term Borrowings -
Trade Payables 383239055
Other Current Liabilities 30044120
Short- Term Provisions 32218485
Total 1493117867
Assets
Non- Current Assets
Fixed Assets
Tangible Assets 170722807
Intangible Assets 8574687
Capital Work in Progress 2982781
Non- Current Investments 20500000
Long Term Loans and Advances 10660745

Current Assets
Inventories 470278204
Trade Receivables 499695432
Cash and Bank Balance 264403106
Short-Term Loans and Advances 34174810
Other Current Assets 11125295
Total 1493117867
Shareholders Fund
Long Term Borrowings 23010103
Current Liabilities
Total 1727260253
Assets
Non- Current Assets
Fixed Assets
Current Assets
Cash And Bank Balance 292714412
Total 1727260253
Shareholders Fund

Current Liabilities
Total 1822220518
Assets
Non- Current Assets
Fixed Assets
Current Assets
Cash And Bank Balance 124284503
Total 1822220518
Shareholders Fund
Current Liabilities
Total 1789917854
Assets
Non- Current Assets
Fixed Assets

Current Assets
Total 1789917854
Shareholders Fund
Current Liabilities
Total 187859775
Assets
Non- Current Assets
Fixed Assets
Current Assets
Total 1878859775
Shareholders Fund

Current Liabilities
Total 1630760644
Assets
Non- Current Assets
Fixed Assets
Intangible Assets -
Current Assets
Total 1630760644
Shareholders Fund
Current Liabilities
Total 1765916843
Assets
Non- Current Assets
Fixed Assets

Current Assets
Total 1765916843
BIBLIOGRAPHY
BOOKS
 Kothari C R, Research Methodology, New Delhi, New age
international(P)limited publishers, 2004, 2nd edition
 S.P. Jain Advanced Accountancy, New Delhi, Kalyani Publisher, 2008 15 th
edtion
JOURNAL
 Annual Report of KAMCO LTD For Financial years 2013, 2014, 2015, 2016,
2017, 2018 and 2019
WEBSITES
 www.kamcoindia.com
 www.accountingtools.com
 www.financialratios.com

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A STUDY ON WORKING CAPITAL

MANAGEMENT WITH SPECIAL REFERENCE

in partial fulfilment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Mr. AJITH BABY E

Under the guidance of

Dr. THOMAS MICHAEL

titled “A STUDY ON WORKING CAPITAL MANAGEMENT WITH SPECIAL

REFERENCE TO KERALA AGRO MACHINERY CORPORATION LTD.,

ATHANI, ERNAKULAM” has been prepared by me under the guidance and

supervision of Dr. Thomas Michael, Principal, VJIM and submitted to Kannur

Master of Business Administration.

or University for the award of any Degree/Diploma/Fellowship or other similar title.

Place: Chemperi Mr. Ajith Baby E

Date: 03/06/2020 Reg. No.: B8GMBA3004

I express my cordial gratitude to Mr. M.C. Vijayakumar HR manager of

I am grateful to my classmates and friends for supporting throughout the

Mr. Ajith Baby E

1.1 Introduction to the Study 1

1.2 Theoretical Aspects 3

1.3 Statement of the Research Problem 11

1.5 Objectives of the Study 12

1.6 Methodology of the study 12

1.7 Chapter Scheme 13

1.8 Limitations of the Study 14

2 REVIEW OF RELATED LITERATURE 15-21

3.3 Product Profile 31

3.4 Organizational Structure 38

4 DATA ANALYSIS AND INTERPRETATION 61-106

FINDINGS, RECOMMENDATIONS AND 107-110

5 5.1 Findings 107

5.2 Recommendations 109

5.3 Conclusion 110

3.2 Kamco Power Reaper Kr 120 33

3.3 Kamco Garden Tiller B30 34

3.4 Kamco Brush Cutter B30 35

3.5 Kamco Portable PumpsetKwp 30m 36

3.6 Kamco Portable PumpsetKwp 40s (Engine) 37

3.7 Kamco Portable PumpsetKwp 40s (Pump) 37

4.1 Net Working Capital 61

4.2 Current Ratio 63

4.3 Quick Ratio 65

4.4 Absolute Liquid Ratio 67

4.5 Inventory Turnover Ratio 69

4.6 Inventory Holding Period Ratio 71

4.7 Fixed Asset Turnover Ratio 73

4.8 Debtors Turnover Ratio 75

4.9 Debtors Collection Period 77

4.10 Working Capital Turnover Ratio 79

4.11 Accounts Receivables & Networking Capital Ratio 81

4.12 Cash and Working Capital Ratio 83

4.13 Stock and Working Capital Ratio 85

4.14 Cash Turnover Ratio 86

4.15 Trend Analysis of Working Capital 88

4.16 Working Capital for Next Seven Years 89

4.17 Expected Working Capital (Rs) 89

4.18 Sales Forecasting of Next Seven Years 90

4.20 Expected Sales (Rs) 92