FM II Assignment 3 – Analysis of Working Capital Management

The following tasks need to be performed for the subject companies chosen by your group. Find
the relevant data from the LATEST ANNUAL REPORT and conduct an analysis of working
capital management over the last 2 years.

1. Calculate the percentage of current assets to total assets and current liabilities to total
liabilities.
2. Calculate the percentage of each component of current assets to total current assets e.g.
inventory to current assets and cash to current assets and so on. Also, identify the top 2
contributors.
3. Calculate the percentage of each component of current liabilities to total current liabilities
e.g. trade payables to current liabilities and short-term liabilities to current liabilities and
so on. Further, identify the top 2 contributors.
4. Calculate and analyze the below working capital metrics:
a. Current Ratio
b. Quick Ratio
c. Operating cycle and cash conversion cycle
5. Monitor the receivable collection policy of the firm.
a. Read the notes on accounts receivables from the latest annual report and check the
schedule on “Ageing of trade receivables” of your subject company.
A sample of ageing schedule is provided below.

Source: Bata India Annual Report 2022-2023

b. Determine whether your subject company is taking too long to collect receivables
or not.
6. Critically evaluate working capital management policy of the company.
Support all your arguments with the facts given in annual reports of the companies assigned to
you.
Please note:

 You are advised to consider the project as a group project. For this, you need to make a
comparison across the companies for the above-mentioned analysis.
 Consolidate and neatly present your combined (inter-firm) analysis in a PPT Format.
Attach supporting files of your research as well.
 The last date for submission of this assignment is Friday, March 29, 2024 (EOD). No
extension will be granted.