1.

INTRODUCTION:

Every business whether big, medium or small needs finance to carry on itsoperations

and to achieve its target. Without adequate finance, no enterprise can possibly accomplish its

objectives.So, this chapter deals with studying various aspects of working capital

management that is necessary to carry out the day to day operations. Working capital is the

difference between the current assets and current liabilities of a firm. Working capital is an

essential component of the corporate finance because it directly affects the liquidity and

profitability of the firm. Theprimary objectiveof any firm is to maximize their profits. But,

maintaining the liquidity of the firm is also an essential objective. The problem is that

growing profits at the cost of liquidity can bring major and effective problems to the firm.

Therefore, there must be a proper balance between these two objectives or goals of the firms.

One objective should not be met at cost of the other. If we do not care about profit, it

becomes difficult to survive for a longer period. On the contrary if we do not care about

liquidity, we may have to face the problem of insolvency or bankruptcy. For the above

reasons management of working capital should be given proper importance and asit

ultimately affects the profitability of the firm. Hence firmshave to maintain an optimal level

of working capital.

In present time greater importance is given to working capital. So here an attempt to

me to study the “WORKING CAPITAL MANAGEMENT” of the selected textile industries

i.e., RAYMOND TEXTILE AND SIYARAM`S TEXTILE. To know the present condition

and efficient utilization of working capital of the company. It is done by preparing a

comparative analysis and financial ratio analysis.

1
1.1 CONCEPT OF WORKING CAPITAL:

There are two concepts of working capital:

A. Gross working capital

B. Net working capital

(A) GROSS WORKING CAPITAL- It is simply called working capital refers to the

firm’s investment in current asset so the total current assets of the firm are known as gross

working capital

(B) NET WORKING CAPITAL- It represents the difference between current asset and

current liabilities. Net working capital may be positive or negative. Positive net working

capital is that when current asset are more than the current liabilities. But when current

liabilities becomemore than current asset than it is negative working capital. In brief we can

say that working capital is too much necessary for the smooth functioning and proper

utilization of fixed assets.

1.2 TYPES OF WORKING CAPITAL

a. PERMANENT WORKING CAPITAL:

As the operating cycle is a continuous process so the need for working capital is. also

arises continuously. But the magnitude of current assets needed is not always same; it

increases and decreases over the time. However, there is always a minimum level of current

assets. This level is known as permanent or fixed working capital.

b. TEMPORARY WORKING CAPITAL:

The extra working capital needed to support the changing production and sales

activities, is called variable or functioning or temporary working capital.

2
1.3 WORKING CAPITAL MANAGEMENT:

The management of working capital is concerned with two problems that arise in

attempting to manage the current assets, current liabilities and the inter relationship that

assets between them.

The basic goal is working capital management is to manage current assets and current

liabilities of a firm in such a way that a satisfactory of optimum level working capital is

maintained i.e. it is neither inadequate nor excessive. This is so because both inadequate as

well as excessive working capital position is bad for business.

1.4 BUSINESS USES OF WORKING CAPITAL:

Just as working capital has several meanings, firms use it in many ways. Most

fundamentally, working capital investment is the lifeblood of a company. Without it, a firm

cannot stay in business. Thus, thefirst, andmost critical, use of working capital is providing

the ongoing investmentin short-term assets thata company needs to operate.

A business requires a minimum cash balance to meet basic day-to-day expenses and

to provide a reserve for unexpected costs. It also needsworking capital for prepaid business

costs, such as licenses, insurancepolicies, or security deposits.

A second purpose of working capital is addressing seasonal or cyclical financing

needs. Here, working capital finance supports the buildup of short-term assets needed to

generate revenue but which comes before the receipt of cash.

Another way to view this function of working capital is providing liquidity. Adequate

and appropriate working capital financing ensuresthat a firm has sufficient cash flow to pay

its bills as it awaits the full collection of revenue. When working capital is not sufficiently

orappropriately financed, a firm can run out of cash and face bankruptcy.

Working capital is also needed to sustain a firm’s growth. As a businessgrows, it

needs larger investments in inventory, accounts receivable, personnel, and other items to

3
realize increased sales. New facilities andequipment are not the only assets required for

growth; firms also mustfinance the working capital needed to support sales growth.

Working capital management is a continuous planning process whereinthe manager

has to take appropriate decisions, as and when required, the failure of which can result in

huge losses for the company.

1.5 MAJOR DECISIONS IN WORKING CAPITAL MANAGEMNT

There are two major decisions management relating to working capital management: -

1 What should be ratio of current assets to sales?

2 What should be the appropriate mix of short-term financing and long-term financing

for financing these current assets?

Working capital management is crucial due to its significant effect on the profitability

of a company and thus the existence of the company in the market. Working capital

management is an effective management for the optimal use ofcurrent assets and current

liabilities to meet the short-term-obligations and to reduce the risk of liquidity problems for

efficient operations. It represents the liquidity position of business indicating the management

of short-term assets and liabilities. Basically, net working capital of a company is determined

from the deviation of current assets and current liabilities. When current assets higher than

current liabilities, that means the company is capable enough to continue its operations and it

also defines that the company have sufficient funds to satisfy its short-term debt and

upcoming operational expenses.

1.6 COMPANY PROFILE:

I. RAYMOND TEXTILE LTD.:

It was incorporated as the Raymond Woollen Mill during the year 1925 near Thane

Creek. Lala Kailashpat Singhania took over the Raymond Woollen Mill in the year 1944. In

1958, the first exclusive Raymond Retail Showroom, kings’ corner, was opened at Ballard

4
Estate in Mumbai. In 1968, Raymond had set up a readymade garments plant at Thane. A

new manufacturing facility was set up at Jalgaon (Maharashtra) during the year 1979 to meet

the increasing demand for Worsted Woollen Fabrics.

The Raymond limited is $800 million company with $797 million as operating income.

The total net income of the company stood at $850 million with a total asset of $500 million

with a total equity of $475 million.

Raymond export products to over 55 countries including USA, CANADA, EUROPE,

JAPAN and middle east.

II. SIYARAM`S TEXTILE LTD.:

Siyaram silk mills limited is a public company. It was incorporated on 29th June 1978

and it headquarter was in the Kamala Mills Compound, Lower Parel, Mumbai. It is classified

as non-govt. company and is registered at registrar of companies, Mumbai. It authorises share

capital is 12,00,00,000 and it’s paid up capital is 9,37,40,000. It involved in spinning,

weaving, and finishing of textile.

Siyaram is one of the largest producers of polyester viscose blended fabrics selling

85.26 million meters of fabrics annually. The siyaram company Rs.241.23 core as operating

income in the year 2019. Siyaram export product to middle east and Srilanka.

2. LITERATURE REVIEW

Many researchers have studies working capital from different views and in different

environments. The following are the studies an useful for our research.

SWARNKAR (2013), in her article analyse and interpret the liquidity position and

creditability of selected textile companies using ratio analysis of 5-year data of 5 companies

from 2008-12 and have found that “Vardhman and Siyaram” choose financing from own

fund and maintain high liquid ratio. Sangham (India) had a high debt exposure doesn’t

maintain good quality which may be a dangerous trend. Furthermore “RSWM and Alok Ltd.”

5
Also had a very high debt exposure and adopt being financed by creditors but they maintain

very high liquidity position.

SUMATHI & NATASIMMALAH (2016) in her article have analysed the source and

uses of the working capital and to study the liquidity position of “Arvind Mills” using ratio

analysis of 5 year data from 2011-2015 and have found that Arvind exports has sufficient

funds to meetits current obligation and cash management ate receivable management are too

much good.

BHATE (2007) in her article have analysed the working capital management process,

receivable management of the company and to study the process of cash and inventory

management of “Raymond Ltd” using ratio analysis of 3-year data from 2004-2006 and have

found that company has a defensive approach as it believes in maintaining its sales in this

competitive environment. The ratio has been improving and so have been the sales, thus

showing the efficient management of the company.

CHANDRABAL & RAO (2011) in her article have analysed the working capital

management of Acc Ltd using financial ratios and statistical tools like “correlation” of five-

year data from 2004-2009 and have that working capital management of this company is

satisfactory. The company has no problem in the management of inventory, debtors, cash.

The liquidity position is too good. Financial statement shows current assets and current

liabilities in classified form. There is good collection of receivable due to good credit and

collection policy.

SWAMINATHAN &JASIM (2013) in her article have analyzed the working capital

management of select cement companies in India using ratio analysis and statistical tools and

have found that overall position of the working capital of select cement company is

satisfactory, but there is a need for improvements in certain factor.

6
3. OBJECTIVE OF THE STUDY:

The present study “Working Capital Management of RAYMOND TEXTILLE PVT.

LTD. and SIYARAM`S TEXILE PVT. LTD”, has been designed to achieve the following

objective.

(A) Comparative study of working capital management of RAYMOND andSIYARAM`S

Textile pvt. ltd.

(B) Study the efficiency of working capital in RAYMOND and SIYARAM`S textile

company.

4. DATA COLLECTION:

4.1 NATURE AND SOURCE OF DATA: The present study is of analytical in nature

and makes use of secondary data. The relevant secondary data are collected from organisation

official website.

4.2 SAMPLE SIZE:Collected three years data of two textile companies (RAYMOND,

SIYARAM`S) data includes liquidity ratio and balance sheet of companies.

4.3 TOOL USED FOR ANALYSIS:

*Comparative Analysis

* Ratio Analysis

 Current Ratio

 Quick Ratio

 Cash Ratio

 Inventory Turnover Ratio

 Working Capital Turnover Ratio

5. ANALYSIS AND INTERPRETATION:

“Evaluating the financial performance of RAYMOND&SIYARAM`S TEXTILE.”

Working Capital Management

7
5.1 COMPARATIVE STATEMENT ANALYSIS OR INTRA FIRM ANALYSIS

Comparative statements of Raymond Textile:

Table No – 1.Schedule showing changes in working capital for the financial year 2017-2018

Calculation of Gross working capital

PARTICULARS 31st March 31st March INCREASE %OF

2017 2018 OR INCREASE
DECREASE OR
DECREASE
CURRENT ASSETS
Inventories 69827.28 93687.13 23859.85 34.16981
Investments 36700.42 33509 -3191.42 -8.69587
Trade Receivables 71396.41 61894.69 -9501.72 -13.3084
Cash And Cash 806.72 2679.55 1872.83 232.1537
Equivalent
Bank Balance 3068.04 4014.13 946.09 30.83695
Loans 1224.96 1368.21 143.25 11.69426
Other Financial Assets 1306.26 1036.16 -270.1 -20.6774
Other Current Assets 5559.24 9366.26 3807.02 68.48094
Total Current Assets 189889.33 207555.13 17665.8 9.303208
CURRENT
LIABILITIES
Borrowings 81223.34 74782.1 -6441.24 -7.93028
Trade Payables 40006.78 54106.5 14099.72 35.24333
Other Financial 54739.6 79507.72 24768.12 45.24717
Liabilities
Provisions 3910.97 3758.85 -152.12 -3.88957
Other Current 9142.67 8352.44 -790.23 -8.64332
Liabilities
Total Current 189023.36 220507.61 31484.25 16.65627
Liabilities
WORKING 865.97 -12952.48 -13818.5 -1595.72
CAPITAL(CA-CL)
*Source- Annual Report

8
Interpretations

As in the above table shows that in the year 2017 current assets increased as compared to

current liabilities but in year 2018 current assets decreased as compared to current liabilities.

The above two-year working capital has decreased(-13818.48) crores.

Table No – 2 Schedule showing changes in working capital for the financial year 2018-2019

PARTICULARS 31st March 31st March INCREASE %OF

2018 2019 OR INCREASE
DECREASE OR
DECREASE
CURRENT ASSTS

Inventories 93687.13 105909.03 12221.9 13.04544

Investments 33509 25181.9 -8327.1 -24.8503

Trade Receivables 61894.69 67592.28 5697.59 9.205297

Cash And Cash 2679.55 703.58 -1975.97 -73.7426

Equivalent
Bank Balance 4014.13 9481.22 5467.09 136.1961

Loans 1368.21 8378.19 7009.98 512.3468

Other Financial Assets 1036.16 10044.36 9008.2 869.3831

Other Current Assets 9366.26 15518.36 6152.1 65.68363

total current assets 207555.13 242808.92 35253.79 16.98527

CURRENT
LIABILITIES
Borrowings 74782.1 128417.84 53635.74 71.7227

Trade Payables 54106.5 61501.33 7394.83 13.66717

Other Financial 79507.72 65725.59 -13782.1 -17.3343

Liabilities
Provisions 3758.85 4305.87 547.02 14.55286

Other Current 8352.44 8498.64 146.2 1.750387

Liabilities
Total Current 220507.61 268449.27 47941.66 21.7415
Liabilities

9
WORKING -12952.48 -25640.35 -12687.9 97.95707
CAPITAL(CA-CL)
*Source- Annual Report

Interpretations

As in the above table shows that in the year 2018 current assets decreased as

compared to current liabilities and also in year 2019 current assets decreased as compared to

current liabilities. It shows decreasing trend in current assets.

Comparative Statement of Siyaram`s Textile Industry:

Table No – 3 Schedule showing changes in working capital for the financial year 2017-2018

Calculation of Gross working capital

PARTICULARS 31st March 31st March INCREASE %OF

2017 2018 OR INCREASE
DECREASE OR
DECREASE
CURRENT ASSETS

Inventories 31557.26 43015.71 11458.45 36.31003

Trade Receivables 30454.88 42176.89 11722.01 38.48976

Cash And Cash 399.96 2204.35 1804.39 451.1426

Equivalent

Bank Balance 63.19 78.21 15.02 23.76958

Loans 322.86 417.01 94.15 29.16125

Other Financial Assets 20.38 17.11 -3.27 -16.0451

Current Tax Assets 1492.92 1215.89 -277.03 -18.5563

Other Current Assets 3704.21 6458.22 2754.01 74.34811

Total Current Assets 68015.66 95583.39 27567.73 40.53145

CURRENT
LIABILITIES
Borrowings 20349.65 41426.69 21077.04 103.5745

10
Trade Payables 14016.39 18106.11 4089.72 29.17813

Other Financial 3866.78 2641.71 -1225.07 -31.6819

Liabilities

Provisions 293.63 317.18 23.55 8.020298

Other Current 3624.2 4284.4 660.2 18.21643

Liabilities
Total Current 42150.65 66776.09 24625.44 58.42244

Liabilities

WORKING 25865.01 28807.3 2942.29 11.37556

CAPITAL(CA-CL)
*Source- Annual Report

Interpretations:

As the above table shows the current assets has a increasing trend when compared to current

liabilities. Working capital has increased to 2942.29 crores.

Table no – 4. Schedule showing changes in working capital for the financial year 2018-2019

Calculation of Gross working capital

PARTICULARS 31st March 31st March INCREASE %OF

2018 2019 OR INCREASE
DECREASE OR
DECREASE
CURRENT ASSETS
Inventories 43015.71 42050.73 -964.98 -2.24332
Trade Receivables 42176.89 39268.92 -2907.97 -6.8947
Cash And Cash 2204.35 723.54 -1480.81 -67.1767
Equivalent
Bank Balance 78.21 81.9 3.69 4.718067
Loans 417.01 127.55 -289.46 -69.4132
Other Financial Assets 17.11 11.06 -6.05 -35.3594
Current Tax Assets 1215.89 1750.15 534.26 43.93983
Other Current Assets 6458.22 8613.09 2154.87 33.36631
Total Current Assets 95583.39 92626.94 -2956.45 -3.09306

11
CURRENT
LIABILITIES
Borrowings 41426.69 27515 -13911.7 -33.5815
Trade Payables 18106.11 17533.83 -572.28 -3.1607
Other Financial 2641.71 3510.52 868.81 32.88817
Liabilities
Provisions 317.18 351.22 34.04 10.73208
Other Current 4284.4 3060.07 -1224.33 -28.5765
Liabilities
Total Current 66776.09 51970.64 -14805.5 -22.1718
Liabilities
WORKING 28807.3 40656.3 11849 41.13194
CAPITAL(CA-CL)
*Source- Annual Report

Interpretations:

As the above table shows the current assets has a increasing trend when compared to current

liabilities.Working capital has increased to 11849 crores.

5.2 INTER FIRM ANALYSIS:

Inter firm comparison is a technique by which the voluntary exchange of information on

costs, performance, efficiency, prices and profits of undertakings in the similar industries can

be studied and oriented for better utilisation of resources leading to improved productivity

and profitability.

Table No.-5 Inter-firm analysis between RAYMOND& SIYARAM`S textile ltd. in the year

of 2016-2017

12
 PARTICULARS Raymond Siyaram Increase or % of
Decrease Increase or
Decrease
CURRENT ASSETS

Inventories 69827.28 31557.26 38270 54.8066887

Trade Receivables 71396.41 30454.88 40941.5 57.3439617

Cash and Cash Equivalent 806.72 399.96 406.76 50.4214597

Bank Balance 3068.04 63.19 3004.85 97.9403789

Loans 1224.96 322.86 902.1 73.643221

Other Financial Assets 1306.26 20.38 1285.88 98.4398206

Other Current Assets 5559.24 3704.21 1855.03 33.3684101

Total Current Assets 153188.91 66522.74 86666.2 56.5747024

CURRENT
LIABILITIES
Borrowings 81223.34 20349.65 60873.7 74.9460561

Trade Payables 40006.78 14016.39 25990.4 64.9649634

OtherFinancial Liabilities 54739.6 3866.78 50872.8 92.9360463

Provisions 3910.97 293.63 3617.34 92.4921439

Other Current Liabilities 9142.67 3624.2 5518.47 60.3595011

Total Current Liabilities 189023.36 42150.65 146873 77.7008249

WORKING -35834.45 24372.09 -60206.5 168.013015

CAPITAL(CA-CL)
Interpretation

This table shows that the Raymond company working capital is in negative form. Siyaram

company working capital is better than the Raymond company. The Raymond company does

not maintain the day to day expenses.

13
Table No.-6 Inter-Firm analysis between RAYMOND & SIYARAM’S textile ltd in the year

of 2017-2018

PARTICULARS Raymond Siyaram Increase or %

Decrease
CURRENT ASSETS

Inventories 93687.13 43015.71 50671.4 54.0857853

Trade Receivables 61894.69 42176.89 19717.8 31.8570139

Cash and Cash Equivalent 2679.55 2204.35 475.2 17.7343211

Bank Balance 4014.13 78.21 3935.92 98.0516326

Loans 1368.21 417.01 951.2 69.5214916

Other Financial Assets 1036.16 17.11 1019.05 98.3487106

Other Current Assets 9366.26 6458.22 2908.04 31.0480384

Total Current Assets 174046.13 94367.5 79678.6 45.7801791

CURRENT
LIABILITIES
Borrowings 74782.1 41426.69 33355.4 44.6034679

Trade Payables 54106.5 18106.11 36000.4 66.5361648

Other Financial Liabilities 79507.72 2641.71 76866 96.677417

Provisions 3758.85 317.18 3441.67 91.5617809

Other Current Liabilities 8352.44 4284.4 4068.04 48.7048096

Total Current Liabilities 220507.61 66776.09 153732 69.7171041

WORKING -46461.48 27591.41 -74052.9 159.38556

CAPITAL(CA-CL)

Interpretation-

In the year of 2017-2018 the working capital of Siyaram company is better than the Raymond

company. So, this table shows that the Raymond company is inefficient to operate his day to

day expenses

14
Table No.-7 Inter-Firm analysis between RAYMOND & SIYARAM textile ltd. in the year of

2018-2019

PARTICULARS Raymond Siyaram Increase or % of

Decrease Increase or
Decrease
CURRENT ASSTS

Inventories 105909.03 42050.73 63858.3 60.2954252

Trade Receivables 67592.28 39268.92 28323.4 41.9032469

Cash and Cash Equivalent 703.58 723.54 -19.96 -2.83691975

Bank Balance 9481.22 81.9 9399.32 99.1361871

Loans 8378.19 127.55 8250.64 98.4775948

Other Financial Assets 10044.36 11.06 10033.3 99.8898885

Other Current Assets 15518.36 8613.09 6905.27 44.4974211

Total current assets 217627.02 90876.79 126750 58.2419545

CURRENT
LIABILITIES
Borrowings 128417.84 27515 100903 78.5738492

Trade Payables 61501.33 17533.83 43967.5 71.4903239

Other Financial Liabilities 65725.59 3510.52 62215.1 94.6588231

Provisions 4305.87 351.22 3954.65 91.843228

Other Current Liabilities 8498.64 3060.07 5438.57 63.9934154

Total Current Liabilities 268449.27 51970.64 216479 80.6404242

WORKING -50822.25 38906.15 -89728.4 176.55338

CAPITAL(CA-CL)
Interpretation-

This table shows the Raymond company current asset amount is not sufficient to cover the

current liability. But the siyaram company current asset is sufficient to cover the current

liability.

15
5.3 RATIO ANALYSIS:

Ratio analysis is the process of determining and interpreting numerical based on

financial statements. It is a very powerful analytical tool useful for measuring the

performance of an organisation, and it helps the management to analyses the past

performance of the firm and to make further project. A ratio is a statistical yardstick that

provides a measure of the relationship between two variables, the relationship can be

expressed as a percent or as a quotient.

Various working ratio is used for analyses.

A. Current Ratio

Current ratio defined as the relationship between liquid assets and current liabilities.

This is a measure of general liquidity & is most widely used to make analysis of short-term

financial position or liquidity of firm.

Current Ratio= Current Assets/ Current Liabilities

YEAR RAYMOND SIYARAM’S

2016-17 1.00 1.61

2017-18 0.94 1.43

2018-19 0.90 1.78

CURRENT RATIO

1.5

0.5

0
2016-17 2017-18 2018-19

RAYMOND SIYARAM’S

16
Interpretations:

The current ratio is the measure of liquidity. An arbitrary standard of current ratio is

2:1 indicates that for every one rupee of current liability two rupee of current assets is

available. The above analysis shows that the both companies’ current ratio is low, which

indicates the company position is unfavourable nature

B. Quick Ratio

A quick ratio is an indicator of a company’s short-term liquidity position and measure

a company’s ability to meet its short-term obligations with its most liquid assets.

Quick Ratio=

YEAR RAYMOND SIYARAM’S

2016-17 0.63 1.61

2017-18 0.51 1.43

2018-19 0.50 1.78

Chart Title
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2016-17 2017-18 2018-19
RAYMOND SIYARAM’S

17
Interpretation

A standard of quick ratio is 1:1. The above analysis shows that SIYARAM’S quick

ratio in 2016 to 2019 is greater than 1 which indicates the SIYARAM’S company has enough

quick assets to pay for its current liabilities. But in RAYMOND company quick ratio is less

than 1 which indicates they have not sufficient quick assets to pay its current liabilities.

C. Cash Ratio

The cash ratio is a measurement of a company's liquidity, specifically the ratio of a

company's total cash and cash equivalents to its current liabilities. The metric calculates a

company's ability to repay its short-term debt with cash or near-cash resources, such as

easily marketable securities.

Cash Ratio=

YEAR RAYMOND SIYARAM

2016-17 0.19 0.009

2017-18 0.16 0.033

2018-19 0.09 0.013

Chart Title
0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
2016-17 2017-18 2018-19

RAYMOND SIYARAM

18
Interpretation

A standard of quick ratio is 1:1. The above analysis shows that both the company cash

ratio is less than 1 which indicates both the company shall not be paid its current liabilities

with cash and cash equivalents. So, both the company needs more cash reserves.

D. Inventory Turn Over Ratio

Inventory turnover is a ratio showing how many times a company has sold and replaced

inventory during a given period.

Inventory turn over ratio =

YEAR RAYMOND SIYARAM

2016-17 4.16 4.90

2017-18 3.68 4.64

2018-19 3.28 4.26

Chart Title
6

0
2016-17 2017-18 2018-19

RAYMOND SIYARAM

19
Interpretation

The performance of of Raymond Company from 2016-2019 the stock turnover ratio is going

to be reduced. It indicates that the clearance of stock is going to reduced and more days need

to maintain inventory. As a result, the cost of stock

(i) is going to rise

(ii) Quality of product is detoriating.

(iii) It makes blockage of capital.

(iv) Performance of the company is worst in 2019 as 2017

E. Working Capital Turnover Ratio

The working capital turnover ratio is also referred to as net sales to working capital. It

indicates a company's effectiveness in using its working capital.

Working Capital Turn Over Ratio =

YEAR RAYMOND SIYARAM

2016-17 9.53 6.84

2017-18 -24.91 6.33

2018-19 -16.97 5.22

20
 Chart Title
15
10
5
0
-5 2016-17 2017-18 2018-19

-10
-15
-20
-25
-30

RAYMOND SIYARAM

Interpretation

The ratio indicates a company’s effectiveness in using its working capital in a year. In 2016-

17 RAYMOND company ratio is positive which indicates efficient utilisation of working

capital but in 2017-18 and 2018-19 the RAYMOND company does not maintain their

working capital efficiency. SIYARAM’S company maintained their working capital

efficiency in all three years i.e., 2016 to 2019 which indicates that SIYARAM company

effectiveness in using working capital.

6. FINDINGS:

 With the reference of the study, working capital management of Raymond Company

and Siyaram company quantity of working capital is contributed by short source of

finance.

 In this gross working capital of both the firms, a major part is occupied by

inventories.

 Current Ratio of Raymond company is not satisfactory but the Siyaram company is

quite satisfactory.

21
 Quick Ratio of Raymond Company is not good but according to Raymond company

Siyaram Company is comparatively good.

 Cash ratio of Raymond company does not full fill rule of thumb but Raymond

Company cash ratio is better than Siyaram Company.

 Inventory Turn Over Ratio of both companies is near about same.

 Working Capital of Raymond Company is Negative but Siyaram Company working

capital ratio is positive.

22
7. CONCLUSION:

Raymond &Siyaram are no doubt a well performing company producing cloth and

cotton. According to increase in competition in garment industry both are declining their

performance gradually. Still now Raymond turnover comparatively decreasing more than

siyaram. so both company should give importance towards; changing marketing strategy,

enhancing their stock turnover, applying global marketing and cost reduction programme by

application of efficiency and effective in administrative, production and marketing.

Besides that, from inter firm comparison in Balance Sheet the rule of thumb in current ratio is

2:1. The Siyaram’s company maintain current ratio 1.57 and Raymond company maintain

current ratio 0.81. So, both companies are not good prospective for working capital

management facing problem in liquidity of the company. This report has studied in 2016-17.

The same policy is followed in 2016-17 & 2017-18.

Therefore, company should give important towards financial management and

inventory management.

23
7. REFERENCE:

1. Sumathi, Narasimmalah (2016), A study on working capital management At Arvind

Mills, International Journal of Intelligence Research, Volume-8, p.g-67-92

2. Goel, Jain (2017), Impact of working capital management on profitability, Empirical

Evidence from Indian Textile Industry, International Journal of management studies,

Volume-IV, p.g-78-92

3. Naeem, Awais, Shahzadi (2017), Working capital management; A comparative study

of textile, food, cement industry, International Journal of Engineering and Information

system, Volume-1, p.g-179-191

4. Soni, Gultani, Swarnkar (2013), Working capital management in Textile Industries,

Indian Journal of Management Science, Volume-III, p.g-93-99

5. Ahmad, Banol (2015), Working capital management matters profitability of textile

sector; With GLS Model, International Journal of Economics and Empirical Research,

Volume-3, p.g-543-549

6. Rakesh, Kulkarni (2013), Working capital structure and Liquidity Analysis: An

Empirical Research on Gujarat Textile Manufacturing Industry, Indian Journal of

Finance, Volume-6(8), p.g-25-35

7. Channar, Ram (2011), Impact of financial crisis on the textile industry of Pakistan; A

case study of Fatch Textile Industry, Australian Journal of Basic and Applied

Sciences, Volume-5(10), p.g-1435-1443

24
 ABSTRACT

The paper studied the Working Capital management of Raymond and Siyaram

from 2016-2017 to 2018-2019. The study uses the comparative analysis and

ratio analysis for studying the performance of the Working Capital of Raymond

and Siyaram. It finds that the performance of Siyaram company is

comparatively better than the Raymond company in Working Capital

management.

25
 CONTENTS

CHAPTER TITLE

PAGE

1 INTRODUCTION

1.1 Concept of Working Capital

1.2Types of Working Capital

1.3 Working Capital Management

1.4 Business Uses of Working Capital

1.5 Major Decisions in Working Capital Management

1.6 Company Profile

2 LITERATURE REVIEW

3 OBJECTIVES OF THE STUDY

4 DATA COLLECTION

4.1 Nature and Source of data

4.2 Sample Size

4.3 Tools Used for analysis

5ANALYSIS AND INTERPRETSTION

5.1 Comparative Analysis or Intra Firm Analysis

5.2 Inter Firm Analysis

5.3 Ratio Analysis

6 CONCLUSION

REFERENCE

LIST OF TABLES

TABLE TITLE PAGE

26