INTRODUCTION TO THE TOPIC

WORKING CAPITAL
Working capital refers to the cash a business requires for day-to-day operations,
or, more specifically, for financing the conversion of raw materials into finished
goods, which the company sells for payment. Working Capital is life blood and
nerve centre of a business. Just as circulation of blood is essential for the survival
of the human being similarly working capital is necessary for the survival of every
business organization, whether it is a small organization or a big organization.
Every business needs funds for two purposes-for the establishment and to carry
out its day to day operations. Long terms funds are required to create production
facilities through purchase of fixed assets such as plant & machinery, land &
building, furniture & fixtures etc. Investments in these assets the present that
part of the 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 as for the
purchase of raw material, payment of wages & other day to day expenses etc.
these funds are known as working capital.
While the beginnings of Nahar group were small the vision was big. The burning
desire to evolve, grow & one day position itself as a responsible & reputed
corporate entity playing out its role in improving the people’s quality of life
through their products & service, remained a driving force. It is their relentless
spirit of enterprise, boundless enthusiasm, grit & determination to live the dream
that enabled them to add new dimensions to their philosophy- where
commitment leads, achievement follows
Nahar group came into existence in 1949 as a small worsted spinning unit with
the assets of 800 spindles and from that day till today the company has grown
into new horizons under the magic of chairperson, Sh. Jawahar Lal Oswal. Now his
sons, Mr. Kamal Oswal and Mr. Dinesh Oswal are continuing the tradition. Nahar
group is a renowned name in the textile industry of India and is heading fast in
future with its wide range of Products. Nahar Group surges ahead to establish
itself as a reputed Industrial Conglomerate with a wide ranging portfolio Cotton
Yarns, Woolen Yarns, Knitted Fabrics, Knitwear, Sweaters, Greige Fabrics, Finished
and Processed Fabrics, Hosiery Garments, Steel, Sugar, Infrastructure
Development.
 REVIEW OF LITERATURE

1. Pradeep Singh (2008) empirically analyses that a firm’s working capital consists
of its investments in current assets, which includes short-term assets—cash and
bank balance, inventories, receivable and marketable securities. Therefore, the
working capital management refers to the management of the levels of all these
individual current assets. On the other hand, inventory, which is one of the
important elements of current assets, reflects the investment of a firm’s fund.
Hence, it is necessary to efficiently manage inventories in order to avoid
unnecessary investments. A firm, which neglects the management of inventories,
will have to face serious problems relating to long-term profitability and may fail
to survive. With the help of better inventory management, a firm can reduce the
levels of inventories to a considerable degree. This paper tries to evaluate the
effect of the size of inventory and the impact on working capital through
inventory ratios, working capital ratios, and trends, computation of inventory and
working capital, and liquidity ranking. Finally, it was found that the size of
inventory directly affects working capital and its management. Size of the
inventory and working capital of Indian Farmers Fertilizer Cooperative Limited
(IFFCO) is properly managed and controlled compared to National Fertilizer Ltd.
(NFL).
2. Jonathan Brookfield, Ren-Jye Liu, John Paul MacDuffie (2008) finds that,
integrated, co-innovative supplier networks have two basic features that
differentiate them from traditional Modular, symbiotic supplier networks. First,
whereas traditional supplier systems have emphasized cost control, integrated,
co-innovative supplier networks appear to be more focused on value creation
through co-innovation. Secondly, by adopting a more integrated network
structure, such supplier networks appear to have a greater ability to resist
imitation. Based on Taiwan's bicycle industry, there seem to be five basic
conditions for establishing a successful integrated, co-innovative supplier network.
There must be: a strong awareness of industry risks and/or prospects; trust among
network members; long-term interactive cooperative relationships; a desire to
learn, and extensive communication, including substantial face-to-face
communication.

3.Pedro Juan Garcı´a-Teruel and Pedro Martı´nez-Solano (2007) conducted

research for the object of the research presented in this paper is to provide
empirical evidence on the effects of working capital management on the
profitability of a sample of small and medium-sized Spanish firms. The results,
which are robust to the presence of endogeneity, demonstrate that managers can
create value by reducing their inventories and the number of days for which their
accounts are outstanding. Moreover, shortening the cash conversion cycle also
improves the firm’s profitability. The aim is to ensure that the relationships found
in the analysis carried out are due to the effects of the cash conversion cycle on
corporate profitability and not vice versa.
4. Naila Iqbal (2001) examined that for increasing shareholder's wealth a firm has
to analyze the effect of fixed assets and current assets on its return and risk.
Working Capital Management is related with the Management of current assets.
The Management of current assets is different from fixed assets on the basis of
the following points i.e. Current assets are for short period while fixed assets are
for more than one Year. The large holdings of current assets, especially cash,
strengthens Liquidity position but also reduces overall profitability, and to
maintain an optimum level of liquidity and profitability, risk return trade off is
involved holding Current assets. Only Current Assets can be adjusted with sales
fluctuating in the short run. Thus, the firm has greater degree of flexibility in
managing current Assets. The management of Current Assets helps affirm in
building a good market reputation regarding its business and economic condition.

5. Vellanki S. Kumar, Awad S.Hanna, Teresa Adams (2000) conducted research

and examined that the systematic assessment of working capital requirement in
construction projects deals with the analysis of various quantitative and
qualitative factors in which information is subjective and based on uncertainty.
There exists an inherent difficulty in the classical approach to evaluate the impact
of qualitative factors for the assessment of working capital requirement. This
paper presents a methodology to incorporate linguistic variables into workable
mathematical propositions for the assessment of working capital using fuzzy set
theory. This article takes into consideration the uncertainty associated with many
of the project resource variables and these are reflected satisfactorily in the
working capital computations. A case study illustrates the application of the fuzzy
set approach.
 OBJECTIVES OF THE STUDY

This study is being carried out keeping in mind the following objectives:
 To analyze the working capital management of the company.
 To determine the operating cycle of the unit.
 To determine the future need of working capital in the running
organization.
 To examine that the investment in the working capital is optimum.
 To know the potential areas which can be improved with the effort in the
desired direction.
 To see how well the company is making use of its funds and how much is it
dependent on outsiders.
 To know the areas of business which need more attention.
 Company Overview
THE STORY OF ONE OF INDIA'S FAVOURITE BRANDS READS ALMOST LIKE A FAIRY TALE. ONCE
UPON A TIME, IN 1892 TO BE PRECISE, A BISCUIT COMPANY WAS STARTED IN A NONDESCRIPT
HOUSE IN CALCUTTA (NOW KOLKATA) WITH AN INITIAL INVESTMENT OF RS. 295. THE
COMPANY WE ALL KNOW AS BRITANNIA TODAY.
THE BEGINNINGS MIGHT HAVE BEEN HUMBLE-THE DREAMS WERE ANYTHING BUT. BY 1910,
WITH THE ADVENT OF ELECTRICITY , BRITANNIA MECHANISED ITS OPERATIONS, AND IN 1921,
IT BECAME THE FIRST COMPANY EAST OF THE SUEZ CANAL TO USE IMPORTED GAS OVENS.

BRITANNIA'S BUSINESS WAS FLOURISHING . BUT, MORE IMPORTANTLY , BRITANNIA WAS

ACQUIRING A REPUTATION FOR QUALITY AND VALUE. AS A RESULT, DURING THE TRAGIC

WORLD WAR II, THE GOVERNMENT REPOSED ITS TRUST IN BRITANNIA BY CONTRACTING IT

TO SUPPLY LARGE QUANTITIES OF "SERVICE BISCUITS" TO THE ARMED FORCES.

AS TIME MOVED ON, THE BISCUIT MARKET CONTINUED TO GROW… AND BRITANNIA GREW

ALONG WITH IT. IN 1975, THE BRITANNIA BISCUIT COMPANY TOOK OVER THE DISTRIBUTION

OF BISCUITS FROM PARRY'S WHO TILL NOW DISTRIBUTED BRITANNIA BISCUITS IN INDIA. IN

THE SUBSEQUENT PUBLIC ISSUE OF 1978, INDIAN SHAREHOLDING CROSSED 60%, FIRMLY

ESTABLISHING THE INDIANNESS OF THE FIRM. THE FOLLOWING YEAR, BRITANNIA BISCUIT
COMPANY WAS RE-CHRISTENED BRITANNIA INDUSTRIES LIMITED (BIL). FOUR YEARS LATER IN
1983, IT CROSSED THE RS. 100 crores revenue mark.
On the operations front, the company was making equally dynamic strides. In
1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new
corporate identity - "Eat Healthy, Think Better" - and made its first foray into the
dairy products market. In 1999, the "Britannia Khao, World Cup Jao" promotion
further fortified the affinity consumers had with 'Brand Britannia'.
HISTORY

“Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching on

biscuits, but do they know how biscuits began?” The word 'Biscuit' is derived from
the Latin words 'Bis' (meaning 'twice') and 'Coctus' (meaning cooked or baked) .
The word 'Biscotti' is also the generic term for cookies in Italian. Back then,
biscuits were unleavened, hard and thin wafers which, because of their low water
content, were ideal food to store.

Therefore biscuits became the ideal travelling food since they stayed fresh for
long periods. The seafaring age, thus, witnessed the boom of biscuits when these
were sealed in airtight containers to last for months at a time. Making good
biscuits is quite an art, and history bears testimony to that. During the 17th and
18th Centuries in Europe, baking was a carefully controlled profession, managed
through a series of 'guilds' or professional associations. To become a baker, one
had to complete years of apprenticeship - working through the ranks of
apprentice, journeyman, and finally master baker.
COMPANY VISION

 To be one of the best biscuit and baked snack producers in Europe.

 To produce innovative products for an ever changing markets.

 Healthy biscuits and snacks using finest ingredients.

 A

SYNOPSIS

ON

WORKING CAPITAL ANALYSIS

OF
BRITANNIA

Submitted to: Submitted by:

Miss Maneet Kaur Meenakshi Gadura
Roll No.80104317034