Presentation

on
Working Capital Management
IN

Presented by :- Raj Dubey

Roll. No. :- 09
Batch :- E
 Working Capital Management
• Working capital management is concerned with
making sure we have exactly the right amount of
money and lines of credit available to the business at
all times

• Working Capital is the money used to make goods and

attract sales

• The less Working Capital used to attract sales, the

higher is likely to be the return on investment

• Working Capital = Current Assets − Current Liabilities

 Working Capital Management

Cash Management Receivables Management Inventory Management

Cash Management
Identify the cash balance which allows for the business to
meet day to day expenses
reduces cash holding costs
Receivables Management
Money which is owed to a company by a customer for
products and services provided on credit
Identify the appropriate credit policy
Inventory Management
Identify the level of inventory which allows for uninterrupted production
Reduces the investment in raw materials, minimizes reordering costs and
hence increases cash flow
 Company background
• 1956 - Company was set up at Bhopal in the name of
Heavy electrical (India) Ltd. in collaboration with AEI,
UK

• The Company`s object is to manufacture of heavy

electrical equipments

• 1974 - In January Heavy electrical (India) Ltd was

merged with BHEL

• 1982 - BHEL also entered into power equipments, to

reduce its dependence on the power sector
• In 1984 BHEL setup Heavy Equipment Repair Plant (HERP)
in Varanasi

• Attained ISO 9000 certification and the major units of BHEL

have already acquired the ISO 14001 certification

• BHEL’s 14 manufacturing divisions, four power sector

regional centers, over 100 project sites, eight service centers
and 14 regional offices

• BHEL has over the years established its references in over 50

countries of the world
Sectors
• BHEL caters to core sectors of the Indian
economy: -
– Power generation & transmission
– Industry
– Transportation
– Telecommunication
– Renewable energy
 Cash Management @ BHEL (VARANASI)
• Centralized cash credit system is followed
• For meeting day to day expenses, the units have to prepare the
estimates of such expenses
• The corporate office allocates the funds

Advantages

• Excess cash can be effectively used

• Deficit can be sorted
• Idle cash may be noted
 RECEIVABLE MANAGEMENT @ BHEL
(VARANASI)

• Products of BHEL are heavy industrial goods with

long operating cycle
• Main customers of BHEL are Railways, Power
Industries and other Private Parties.
• Regional Operational Divisions (RDOs) primarily
carry out the job of recovery from the customers.
• Lying down of credit policy by head office
 INVENTORY MANAGEMENT @ BHEL
(VARANASI)

• Inventory control is perform with following steps

with PPC department
• Planning
• Procurement
• Receipt and Custody
• Issue
• Accounting
 Research Methodology

●
Interaction with
primary employees & a/c head

seceond ●
Internet , annual report of company
●
Financial reports of unit
ry
 Findings & Observation
• Debtors pertaining since financial year 1991-
92 are outstanding
• Net working capital increased year on year
• Centralized cash management system has
proved better cash security
• Inventory control system have somewhere
time consuming
RECOMMENDATIONS AND SUGGESTIONS

• arrangement the raw material in advance

which may reduce the operating cycle
• Storage capacity should be made more
reliable
• Government department customers are
lagging in debt payment which should be
consider