Professional Documents
Culture Documents
1cm8o3qjm 265858
1cm8o3qjm 265858
_______________
Faculty Guide
Date:________________
Place: :_______________
DECLARATION
Place:
Date: _________
ACKNOWLEDGEMENT
My sincere thanks to all those people who has provided me all the
necessary information throughout this research report has been
successfully completed at time.
PREFACE
PART 1
CHAPTER – 1
1.1 Introduction of the problem. 5
1.2 Title of the project. 6
1.3 Executive Summary 7
1.4 Background of the problem undertaken. 9
1.5 Rationale of the study. 10
1.6 Limitations and Scope of the study. 11
CHAPTER – 2
2.1 HYPOTHESIS 13
2.2 SWOT ANALYSIS 13
CHAPTER – 3
3.1 RESEARCH METHODOLOGY 16
3.2 Research Design 16
3.3 Data Collection Instrument 18
CHAPTER – 4
4.1 Review of Literature Working Capital Management. 24
4.2 Finding Analysis 25
4.3 Working Capital Financing. 53
4.4 Cash Management. 63
4.5 Receivables Management. 79
4.6 Inventory Management. 87
4.7 HP India Ltd. 97
CHAPTER – 5
5.1 Conclusion
5.2 Recommendation
CHAPTER – 6
Bibliography.
CHAPTER – 1
INTRODUCTIONN
OF THE
PROBLEM
TITLE OF THE PROJECT
So, I have been given this topic to make an in-depth analysis and
detailed study to come out with a clear magnified view as to whether the
management of working capital at HP is sound or not.
Rationale of the study
The topic working capital management is itself a very vast topic yet very
important also. Due to time restraints it was not possible to study in depth
in get knowledge what practices are followed at HP India. Nevertheless,
many facts and data are such that they are not to be disclosed because
of the confidential nature of the same. Hence because of that I cannot
express any opinions upon various issues which itself limits the scope of
my study. However I have tried to give an understanding of Working
capital management in as much as detail as possible.
CHAPTER – 2
Hypothesis
SWOT ANALYSIS
STRENGTH
Strong technological base.
Highly skilled professionally qualified workforce.
Adoption of innovative fuel optimization.
Outage management.
WEAKNESSES
THREATS
If competitor is providing electricity at more reasonable prices than
HP INDIA LTD. , then the customers of the company are attracted
towards them.
Expansion of thermal power plants and hydro power plants.
CHAPTER – 3
RESEARCH METHODOLOGY
RESEARCH DESIGN
A research design is defined, as the specification of methods and
procedures for acquiring the Information needed. It is a plant or
organizing framework for doing the study and collecting the data.
Designing a research plan requires decisions all the data sources,
research approaches, Research instruments, sampling plan and contact
methods.
RESEARCH DESIGN IS MAINLY OF FOLLOWING TYPES: -
1. Exploratory research.
2. Descriptive studies
3. Casual studies
EXPLORATORY RESEARCH
The major purposes of exploratory studies are the identification of
problems, the more precise Formulation of problems and the formulations
of new alternative courses of action. The design of exploratory studies is
characterized by a great amount of flexibility and ad-hoc veracity.
DESCRIPTIVE STUDIES
Descriptive research in contrast to exploratory research is marked by the
prior formulation of specific research Questions. The investigator
already knows a substantial amount about the research problem.
Perhaps as a Result of an exploratory study, before the project is
initiated. Descriptive research is also characterized by a Preplanned and
structured design.
DATA COLLECTION METHODS
PRIMARY DATA
These data are collected first time as original data. The data is recorded
as observed or encountered. Essentially they are raw materials. They
may be combined, totaled but they have not extensively been statistically
processed. For example, data obtained by the peoples.
SECONDARY DATA
The Secondary data collected has been collected from books, journals,
broachers, internet and other secondary sources.
Official Publications,
Industry Associations:
CHAPTER – 4
REVIEW OF LITERATURE
WORKING CAPITAL
MANAGEMENT
FINDING
These differences can be explained due to drop in actual sales as per the
following reasons:
Slump in the market
Stiff competitions
Emergence of foreign players
INTRODUCTION TO WORKING CAPITAL:
Financing
Maturity
SHORT-TERM LONG-TERM
Asset
Maturity
High
LONG-TERM Moderate
Risk-Profitability
(Permanent)
Permanent Risk-Profitability
Hedging Approach:
Short-term financing**
RUPEES AMOUNT
Current assets*
Long-term financing
Fixed assets
TIME
Conservative Approach:
Current assets
Long-term financing
Fixed assets
TIME
Neither of the above two approaches would serve the purpose of efficient
working capital management because of their extreme nature. A trade-off
between these two would give an acceptable financing strategy.
Aggressive approach: This approach towards risk and profitability is such
where the firm uses total short term borrowings for financing its working capital
needs. This approach is very risky and always there is a chance of bankruptcy.
Risks vs. Costs Trade-Off
(Aggressive Approach)
Firm increases risks associated with short-
short-term borrowing by
using a larger proportion of short-
short-term financing.
Short-term financing
RUPEES AMOUNT
Current assets
Long-term financing
Fixed assets
TIME
WORKING CAPITAL CYCLE:
The term operating cycle refers to the length of time necessary to complete the following cycle
of events:
1. Conversion of cash into inventory.
2. Conversion of inventory into receivables.
3. Conversion of receivables into cash.
Cash flows in a cycle into, around and out of a business. It is the business's life blood and
every manager's primary task is to help keep it flowing and to use the cash flow to generate
profits. If a business is operating profitably, then it should, in theory, generate cash surpluses. If
it doesn't generate surpluses, the business will eventually run out of cash and expire.
The faster a business expands the more cash it will need for working capital and
investment. The cheapest and best sources of cash exist as working capital right within
business. Good management of working capital will generate cash will help improve profits and
reduce risks. One must bear in mind that the cost of providing credit to customers and holding
stocks can represent a substantial proportion of a firm's total profits.
There are two elements in the business cycle that absorb cash - Inventory (stocks and
work-in-progress) and Receivables (debtors owing you money). The main sources of cash are
Payables (your creditors) and Equity and Loans.
Each component of working capital (namely inventory, receivables and payables) has two
dimensions........ Time ......... and Money. When it comes to managing working capital – Time is
Money. If you can get money to move faster around the cycle (e.g. collect monies due from
debtors more quickly) or reduce the amount of money tied up (e.g. reduce inventory levels
relative to sales), the business will generate more cash or it will need to borrow less money to
fund working capital. As a consequence, you could reduce the cost of bank interest or you'll
have additional free money available to support additional sales growth or investment. Similarly,
if you can negotiate improved terms with suppliers e.g. get longer credit or an increased credit
limit; you effectively create free finance to help fund future sales.
If you....... Then......
← Collect
You release
receivables
cash from the
(debtors) faster
cycle
← Collect
Your
receivables
receivables
(debtors) slower
soak up cash
← Get better credit
You increase
(in terms of
your cash
duration or
resources
amount) from
suppliers
← Shift inventory
You free up
(stocks) faster
cash
Move inventory
You consume
(stocks) slower
more cash
It can be tempting to pay cash, if available, for fixed assets e.g. computers, plant,
vehicles etc. If you do pay cash, remember that this is no longer available for working
capital. Therefore, if cash is tight, consider other ways of financing capital investment -
loans, equity, leasing etc. Similarly, if you pay dividends or increase drawings, these are
cash outflows and, like water flowing downs a plug hole, they remove liquidity from the
business.
W= Work-in-progress period
Permanent
Working Capital
The amount of current assets required to
meet a firm’
firm’s long-
long-term minimum needs.
RUPEES AMOUNT
TIME
Temporary
Working Capital
The amount of current assets that varies
with seasonal requirements.
RUPEES AMOUNT
TIME
DETERMINANTS OF WORKING CAPITAL:
Production cycle: Production cycle i.e. the time involved in the manufacture of goods
has also a bearing upon the quantum of working capital. It covers the time span between
the procurement of raw materials and the completion of manufacturing process leading to
the production of finished goods. Funds have to be necessarily tied up during the process
of manufacture, necessitating enhanced working capital. That is there is some time gap
before raw materials become finished goods. To sustain such activities the need of
working capital is obvious. The longer the time span or production cycle, the larger will be
the tied up funds and therefore, larger the working capital needed and vice-versa. In some
cases a part of financial burden relating to manufacturing cycle time is passed on to
others like in case of companies manufacturing heavy machinery and equipment minimize
the investment in inventory or working capital by requiring advance payments from
customers as work proceeds against orders.
Business cycle: The working capital requirements are also determined by the nature of
the business cycle. Business fluctuations lead to cyclical and seasonal changes which, in
turn, cause a shift in the working capital position, particularly for temporary working capital
requirements. These variations may take place in two directions i) upward phase when
boom conditions prevail ii) downsizing phase when economic activity is marked by a
decline. During the upswing of business activity, the need of working capital is likely to
grow to cover the lag between increased sales and receipt of cash as well as to finance
purchase of additional materials to cater to the expansion of the level of activity. The
downsizing phase of the business cycle has exactly an opposite effect on the level of
working capital requirements. The decline in the economy is associated with a fall in the
volume of sales which, in turn, leads to a fall in the level of inventories and book debts.
The need for working capital in recessionary conditions is bound to decline. In short,
business fluctuations influence the size of working capital mainly through the effect on
inventories.
Credit policy: The credit policy relating to sales and purchases also affects the working
capital in two ways: i) through credit terms granted by the firm to its customers/ buyers of
goods ii) credit terms available to the firm from its creditors. The credit sales result in
higher book debts. Higher book debts mean more working capital. On the other hand, if
liberal credit terms are available from the suppliers of goods (trade creditors), the need of
working capital is less. Hence, adoption of rationalized credit policies would be a
significant factor in determining the working capital needs of an enterprise. However such
discretion may not be available to a company which operates in a highly competitive
market. The degree of competition is, therefore, an important factor influencing working
capital requirements.
Profit Level: The net profit is a source of working capital to the extent it has been earned
in cash. Higher profit margin would improve the prospects of generating more internal
funds, thereby contributing to the working capital pool. Cash profit refers to the profit
earned after adjusting non-cash items such as depreciation, outstanding expenses, and
losses written off. The availability of internal funds for working capital requirements is
determined not merely by the profit margin, but also by the manner of appropriating
profits. The availability of such funds would depend upon the profit appropriations for
taxation, dividend, and reserves. For e.g. the taxes to be paid is determined by the
prevailing tax regulations. The management has no discretion in this respect. Many times
taxes have to be paid in advance on the basis of the profit and management has no
discretion in regard to the payment of taxes, in some cases non-payment may attract
penal action.
Tax planning can, therefore, be said to be an integral part of working capital planning.
Similarly, dividend policy also has a bearing on working capital requirements. The
payment of dividend consumes cash resources and, thereby, affects working capital to
that extent. Conversely, if the firm does not pay dividends but retains the profit, working
capital increases. In theory, a firm should retain profits to preserve cash resources and, at
the same time, it must pay dividends to satisfy the expectations of the investor. The
choice whether to retain or disburse profits must be made after taking into consideration
all the relevant factors. Dividend policy, is thus, a significant element in determining the
level of working capital in an organization. Depreciation policy also exerts an influence on
the quantum of working capital. Depreciation charges do not involve any cash outflow.
The effect of depreciation policy on working capital is, therefore, indirect. Depreciation
affects the tax liability and retention of profits. Enhanced rates of depreciation lower the
profits and, therefore, the tax liability and, thus, more cash profits. Higher depreciation
also means lower disposable profits and, therefore, a smaller dividend payment. Thus,
cash is preserved.
Price level changes: Changes in price level also affects the requirement of working
capital. Rise in prices necessitate the use of more funds for maintaining an existing level
of activity. For the same level of current assts, higher cash outlays are required. The effect
is that higher working capital is required. However, if the firm is able to increase the prices
proportionately, there is no serious problem as regards working capital.
requires efficient planning and a constant review of the needs for an appropriate working
capital strategy
The two components of working capital are current assets and current liabilities. In
order to calculate the working capital needs what is required is the holding period of
various types of inventories, the credit collection period and the credit deferral period. The
working capital also depends on the budgeted level of activity in terms of production/sales.
The calculation is based upon the assumption that the production/sales is carried out
evenly throughout the year and all costs accrue similarly. The steps involved in estimating
the different items of current assets and current liabilities are as follows:
Raw Materials Inventory: The funds to be invested in raw materials inventory may be
estimated on the basis of production budget, the estimated cost per unit and an average
holding period raw material inventory by using the following formula:
Budgeted production x Cost of raw materials per unit x Average raw material holding
period in days/months
12months/365 days
12months/365 days
Finished goods: The funds to be invested in finished goods can be estimated by the following
formula:
Budgeted production x Cost of Production per unit x Average finished goods holding
period in days/months
12months/365 days
Debtors : The funds to be invested in debtors can be estimated by the following formula:
Estimated credit sales x Cost of Sales per unit x Average debtors collection
period in days/months
12months/365 days
Cash Balance: Minimum desired cash and bank balances to be maintained by the firm has to be
added in current assets for computation of computation of working capital Estimation of
Current Liabilities : The amount of working capital is lowered to the extent of current
liabilities arising in the normal course of business.
Trade Creditors: This can be estimated by the following formula:
Estimated credit purchases x Raw Materials Requirement per unit x Credit period granted
by suppliers in
days/months
12months/365 days
12months/365 days
Overheads: This can be estimated by the following formula:
Estimated yearly production x Overhead costs per unit x Average time lag in
payment in days/months
12months/360 days
Note: The amount of overheads may be separately calculated for different types
of overheads. In case of selling overheads the relevant item would be sales volume instead
of production volume.
WORKING CAPITAL
FINANCING
Trade Credit:
Advantages:
Bank Credit:
Forms of credit:
Working capital finance is provided by banks in five ways: (i) cash
credits/overdrafts. (ii) Loans. (iii) purchase/discount bills, (iv) letter of
credit, and (v) working capital term loans.
Cash Credit/overdrafts: Under cash credit/overdraft form/arrangement
of bank finance, the bank specifies a predetermined borrowing/credit
limit. The borrower can borrow/draw up to the stipulated credit/overdraft
limit. Within the specified limit/line of credit, any number of
drawals/drawings is possible to the extent of his requirements
periodically. Similarly, repayments can be made whenever desired during
the period. The interest rate determined on the basis of running balance
actually utilized by the borrower and not the sanctioned limit. However, a
minimum (commitment) charge may be payable on the unutilized
balance. This form of financing is convenient and flexible for the
borrowers.
COMMERCIAL PAPERS:
Commercial paper is a short-term unsecured negotiable
instrument, consisting of usance promissory notes with a fixed maturity
An unsecured obligation issued by a corporation or bank to finance its
short-term credit needs, such as accounts receivable and inventory.
Maturities typically range from 2 to 270 days. Commercial paper is
available in a wide range of denominations, can be either discounted or
interest-bearing, and usually have a limited or nonexistent secondary
market. Commercial paper is usually issued by companies with high
credit ratings, meaning that the investment is almost always relatively low
risk.
FACTORING:
Factoring provides resources to finance receivables as well as
facilitates the collection of receivables. Factoring can be broadly defined
as an agreement in which receivables arising out of sale of
goods/services are sold by a firm(client) to the factor(a financial
intermediary) as a result of which the title of goods/services represented
by the said receivables passes on to the factor. Hence, factor becomes
responsible for credit control, sales accounting and debt collection from
the buyers. In case of factoring without recourse facility, if any debtor fails
to pay the dues as a result of financial inability or insolvency the factor
has to absorb the loss.
FUNCTIONS OF THE FACTOR:
Financing facility.
Maintenance and administration of sales ledger.
Collection of account receivables.
Provision of advisory services.
Assumption of credit risk and control.
ADVANTAGES OF FACTORING:
Reduction of cost and expenses: Since the client need not have
a special administrative setup to look after the credit control he can
have the benefit of reduced overheads by way of savings on man-
power, time and effort.
CASH
MANAGEMENT
INTRODUCTION:
1) Transaction Motive:
This is a motive of holding cash/near-cash to meet routine cash
requirements to finance the transactions which a firm carries on in the
ordinary course of the business. A firm enters into a variety of
transactions to accomplish its objectives which have to be paid for in the
form of cash. For e.g. cash payments have to be made for purchases,
wages, operating expenses, financial charges, and so on. Similarly, there
is a regular inflow of cash to the from sales operations, returns on
investments and so on. These receipts and payments constitute a
continuous two way of cash, but they do not coincide or synchronize.
Hence, in case, the disbursements are in excess of current receipts the
need of cash balance is obvious.
2) Precautionary Motive:
In addition to the non-synchronization of anticipated cash inflows
and outflows in the ordinary course of business, a firm may have to pay
the cash for the purposes which cannot be predicted or anticipated. The
unexpected cash needs at the short notice may be the result of floods,
strikes, and bills may be presented for settlement earlier than expected,
unexpected slowdown in collection of accounts receivables, cancellation
of some order of goods from customers, sharp increase in cost of raw
materials, etc. hence precautionary balances to meet unpredictable
obligations are required to provide a cushion to meet unexpected
contingencies. Such cash balances are usually held in the form of
marketable securities so that they earn a return.
3) Speculative Motive:
It refers to the desire of the firm to take advantage of opportunities
which present themselves at unexpected moments and which are
typically outside the normal course of business. While the precautionary
motive is defensive in nature, that firms must make provisions to handle
unexpected contingencies, the speculative motive represents a positive
and aggressive approach. Firms’ aim to exploit profitable opportunities
and keep cash in reserve to do so. The speculative motive helps to take
advantage of: an opportunity to purchase raw material at a reduced price
on payment of immediate cash, a chance to speculate on interest rate
movements by buying securities when interest rates are expected to
decline.
4) Compensative Motive:
Yet another motive to hold cash balances is to compensate banks
for providing certain services and loans. Banks provide a variety of
services such as clearance of cheques, supply of credit information and
so on. While for some of this services banks charge a commission or fee
for other they seek indirect compensation. Usually, the clients are
required to maintain a minimum balance of cash at the bank and the
bank could return on such balances. Compensating balances are also
required by some loan agreements between a bank and its customers.
CASH BUDGET:
OBJECTIVES:
The credit sales are generally made on open account in the sense
that there are no formal acknowledgements of debt obligations through a
financial instrument. As a marketing tool, they are intended to promote
sales and thereby profits. However, extension of credit involves risks and
costs. The objective of receivables management is ‘to promote sales and
profit’ until that point is reached where the return on investments in
funding receivables is less than the cost of funds raised to finance the
additional credit. The specific costs and benefits which are relevant to the
determination of objectives of receivable management are stated below:
Costs: The major categories of costs associated with accounts
receivable are: i) collection costs ii) capital costs iii) delinquency
cost iv) default costs.
Objectives:
The sum of ordering and carrying costs represents the total cost of
inventory.
Benefits of holding inventory:
The secondary element in the optimum inventory decision deals
with the benefits associated with holding inventory. The major benefits of
holding inventory is that they enable firms in the short run to produce at a
rate greater than purchase of raw materials and vice-versa, or sell at rate
greater than production and vice-versa.
Inventory Management Techniques:
Many sophisticated mathematical techniques are available to
handle inventory management problems.
EOQ= √2AO
√C
Where A= Annual usage in units
B= Ordering Cost
C= Carrying Cost
Setting of various stock levels:
Minimum level; It indicates the lowest figure of inventory
balance, which must be maintained in hand at all times so
that there is no stoppages of production due to non-
availability of inventory. The main considerations for fixation
of minimum level of inventory are as follows:
VISION STATEMENT
"Together we create the enterprises of tomorrow"
MISSION STATEMENT
"To provide world-class information technology solutions and services to
enable our customers to serve their customers better"
QUALITY POLICY
"We deliver defect-free products, services and solutions to meet the
requirements of our external and internal customers, the first time, every
time"
OUR OBJECTIVES
I dream of the day, and I believe it’s not too far away, when
technology for products developed by Indian companies would be
licensed to global manufacturers as well as innovative products
manufactured by Indian companies would be available worldwide.
Company Profile
HP AT A
GLANCE
Fortune Rank 11
(U.S.)
Fortune Rank 28
(Global)
324,600
Employees
$126
BILLION USD
In revenue for
FY10
Operates in
approximately
170 Countries
worldwide
Hewlett Packard (HP) — the popular computer
manufacturing giant is that the company is actually quite old by
American standards. Its influence spans over nearly six decades. With
the company’s humble beginnings, HP has grown into a computer
empire influencing several countries and industries over the course of
their existence. In fact, many other popular computer companies and
competitors have developed innovative technology based on patents
pioneered by HP decades ago.
Incredible things are happening around the world today with the help
of HP technology. A patient in Ghana can send a simple text message,
free of charge, to make sure the medication she’s about to take is not
counterfeit. Manufacturers and officials in Canada are using an HP-
based cloud solution to communicate virtually instantly when a recall
is needed so that harmful goods are removed from store shelves as
quickly as possible. And partners, colleagues, and clients working
remotely across the globe are connecting face-to-face, in real time.
These are just a few of the ways that HP is working to empower
people, businesses, and governments. HP uses technology to ensure
seamless, secure connections between people and information
delivered in the right place, at the right time. Helping to improve the
way people live, the way businesses operate, and the way the world
works through products, solutions, and services that transform data
into value, bytes into experiences, and noise into knowledge. And
because of unique size, scope, and scale, HP get better information into
the hands of more people all across
the globe.
TURNING RESEARCH INTO REALITY
HP was co-founded in 1935 by Dave Packard and Bill Hewlett, two
Stanford University graduates with advanced degrees in Electrical
Engineering. Like many tech companies, HP actually started in a
garage just outside of Palo Alto, CA. The company was founded
during a fellowship with Stanford professor, Frederick Terman. He
was also the initial investor for HP. In 1939, Terman gave the new
technology company $538. In naming the company, Packard and
Hewlett tossed a coin as to whether the company would be called
Hewlett-Packard or Packard-Hewlett. The coin toss resulted in the
company’s current nomenclature, Hewlett-Packard. HP became a
corporation by 1947, and by 1957 HP was a publicly traded company.
Corporate Objectives
“It is necessary that people work together in unison toward common
objectives and avoid working at cross purposes at all levels if the
ultimate in efficiency and achievement is to be obtained.” – Dave
Packard
HP's Corporate Objectives have guided the company in the conduct of its business
since 1957, when first written by co-founders Bill Hewlett and Dave Packard.
Customer Loyalty
To provide products, services and solutions of the highest quality and deliver
more value to our customers that earns their respect and loyalty.
Profit
To achieve sufficient profit to finance our company growth, create value for
our shareholders and provide the resources we need to achieve our other
corporate objectives.
Market leadership
Growth comes from taking smart risks, based on the state of the
industry—that requires both a conviction in studying the trends, but
also in inducing change in our industry.
Employee commitment
"To provide products, services and solutions of the highest quality and
deliver more value to our customers that earns their respect and
loyalty."
Environmental sustainability
Climate and energy (operations and products)
Sustainable Design
2009: 100% of HP ’s consumer photo paper will derive from
sustainable-forest-certified suppliers
2010: Remove all mercury from HP ’s entire notebook line by the end
of 2010
2010: Triple the amount of recycled materials used in our inkjet
printers, relative to 2007
HP operations
2009: Continue to divert at least 87% of solid (nonhazardous) waste
from landfill globally through the end of 2009
2010: Reduce water consumption by 5%, compared with 2007
Social Investment
2009: Initiate more than 130 HP Innovations in Education grant-
supported projects worldwide that showcase the future of learning.
Political engagement
HP Labs is using its data center facilities in Bangalore, India, and Palo
Alto, California, as a test bed for core aspects of City 2.0. Thousands of
sensors in each of these data centers monitor the demand and flow of
resources in real-time. HP Labs is exploring opportunities to deliver
these solutions on an unprecedented scale.
“HP has the breadth and depth to provide all aspects of the City 2.0 IT
ecosystem, including the billions of service-oriented client devices,
thousands of data centers and print factories needed to implement the
vision.” Patel says. “And we have a legacy in measurement,
communication, and computation. Now we need to leverage the past
to create the future, one where we meet society’s needs by ‘right
provisioning’ resources so future generations can have the same
quality of life we enjoy today.”
The Awards and Honors section highlights HP's products, services and
solutions that have earned recognition from industry authorities, public
organizations and the business and trade press.
Computerworld Recognizes HP as Laureate in Honors Program
Date: June 4, 2012
HP Wins Award for Disease Surveillance and Mapping Project
Date: May 22, 2012
HP Global Business Services EMEA Wins Two SSON 2012
Excellence Date: May 17, 2012
HP Brazil Wins Second Consecutive Green best Award
Date: May 16, 2012
HP ITO Global Delivery Team Wins TSIA STAR Award for
Excellence
Date: May 9, 2012
HP Technology Services Scores Multiple Wins at TSIA STAR
Award Ceremony
Date: May 9, 2012
HP Canada Recognized among 50 Best Diversity Employers
Date March 19, 2012
HP Wins National Governors Association’s Public-Private
Partnership Award
Date: February 27, 2012
Neelam Dhawan and Geetha Panda Named “Top Inspirational
Woman Leaders” in India
Date: February 9, 2012
HP ENVY 14 Spectre Earns CNET Best of CES Award
Date: January 23, 2012
HP executives named among Fortune’s Most Powerful Women in
Business Date:
October 3, 2011
Opportunities
There are open new markets in the Antarctica sector of the
world.
The brand reputation of the company and financial statu
helps to provide HPQ with infrastructural projects
worldwide.
Weaknesses
Internal control issues.
Lack of in-house management consulting division.
No aggressive investments in R&D compared to historical
spending.
Threats
Apple is a major competitor.
Intense competition from other PC manufacturers.
Increasing competition on imaging and printing.
Slowdown in economic conditions in US, Europe.
Conclusion
Dell computers are now available in Wal-Mart stores and Sam’s Clubs
in a break from their historical absence in retail stores.
At HP we have recognized that creating a diverse, inclusive work
environment is a journey of continuous renewal. Each step in the
process has an important significance to remember as HP move
forward into the 21st century. Together the steps create a diversity
value chain upon which HP is building winning global workforce and
workplace.
HP had many accomplishments in continuing journey toward creating
a diverse, inclusive workplace. As HP expands efforts to build a culture
of inclusion not only in our workplace but also in the marketplaces
and communities where HP serves, HP remember the milestones that
brought it here. Each has made a difference.
REFERENCES:
www.google.com
www.hp.com
www.answers.com
www.opapers.com
www.crn.com
www.wsj.com
www.investor.reuters.com
Balance
Profit and
Sheet
Lossfor
Account
the Year
forEnded
the Year
as on 31st as
Ended march st
on 312006march 2006
2006 2005
2006 2005
The 143 percent increase in Net Current Assets is due to the fact
that there has been an increase in the Current Assets by 50.73% and
increase in Current Liability has been only 17.50% over that of the
previous year. The firm’s level of liquidity being high we need a check on
whether it affects the return on assets. Now there is a substantial
increase in the current assets to total assets. This could be less profitable
on the assumption that current assets generate lesser return as
compared with return on fixed assets.
RISK-RETURN ANALYSIS
2014 2013 2012
SALES 199886 154295 166604
EBIT 15634 14523 11491
RETURN ON INVESTMENT (%) 39 75.5
In case instead of Net Current assets and net block if total assets had
been used in computation of ROI then
% INC
30
%INCREASE
25
20
15
10
% INC
5
0
-5 RAW STORES FINISHED WORK IN
-10 MATERIAL AND GOODS PROGRESS
-15 SPARES
INVENTORY
The increasing component of raw materials in inventory is due to
the fact that the company has gone for bulk purchases and has increased
consumption due to a fall in prices and reduced margins for the year.
To the question as to whether the increasing costs in inventory are
justified by the returns from it the answer could be found in the HP retail
expansion. They are more into it than earlier and at present more than
650 retail outlets branded with HP signages and more are in the pipeline.
This also ensures availability of products to meet the increasing sales.
DIVIDEND POLICY
UN-SECURED LOANS
2014 2013 2012
3338.2
TOTAL BORROWINGS 2610.39 233.45 6
SHORT-TERM 2593.39 63.94 76.84
PERCENTAGE SHORT-TERM 99.36 27.39 2.3
Due to increase in the time period for the realization of debtors, cash
and bank balance has decreased.
Stock turn over ratio is decreasing, it shows that capital is blocked into
the inventory.
Fixed asset turnover ratio has decreased this year, which shows that
assets have not been used efficiently as they had been used in the
previous year.
Special efforts should be made to analyze loans & advances, which are
between 35% to 56% of current assets. This can be classified between
production / operation relation related and non-production / operation
related. No production related cases might be financed from other
sources like debenture etc. and treated separately.
Inventory
Debtors
A study may be conducted if required by experts to pinpoint reason
behind HP INDIA LTD. high correction period of 95 days in 2013-14
against 50 days of TCS It is due to quality of products, quality of
customer, the segment of customers marketing effort, distribution pattern
or other reasons.
Creditors
Though high payout days may be apparently beneficial for the company.
It has it very heavy long term cost like high interest cost, bad credit
ratings and shyness of good quality / standard suppliers.
This is the most liquid element in current asset and target shall be fixed
most cautiously. Too low a figure of 4.4% of total current assets of HP
INDIA LTD. in 2012-13 as against 15.5% of TCS may be apparently too
good to look at, but this may be lead to payment crisis at various sorts.
Ratios
The company should try to improve its current situation. The ratios, which
are taken in this research to evaluate the company’s position, are Current
ratio, Quick ratio and Activity ratio. These ratios show the actual position
of the company. The Quick ratio is declining since 2010-11 till now. There
is a drastic declining in the working capital turnover ratio. This ratio goes
to –ve position in current year compared to previous. The Debts
collection period is 359 days for Exporters. This shows the poor collection
policy. The current ratio is 1.02 in 2013-06, which is not upto the ideal
ratio. This shows that the current assets are equal to the current
liabilities. Not satisfactory.
CHAPTER – 6
BIBLIOGRAPHY
BOOKS / JOURNALS
1. Business World
2. Business Today