Seminar Presentation

UNDER THE GUIDANCE OF : PRESENTED BY:

MRS. GINNI SYAL GURSIMRAN KAUR
(assistant professor) 1811005
MBA(F)
AUTOMOB
ILE
INDUSTRY
Customers (Domestic & Export)
SWOT ANALYSIS

STRENGHTS WEAKNESSES OPPORTUNITIES THREATS

Rusted material Getting 1500 Focus of Competition
sold leaves instead of technology &
3000 leaves innovation
(development of
child
equipment).

No material will Favorable

come without macroeconomics
purchase order. and demographic
conditions
 9 state of the art
JAI is one of the world’s strategically located plants
leading players in leaf manufacturing high-
springs technology suspension
systems

JAI
TODAY
A pioneer in implementing We have association with
new technologies on the global leader Ridewell
back of our extensive in- Corporation, USA, for
house R&D approved by the design and manufacturing
department of Scientific of Air Suspension and Lift
and Industrial Research Axles
 .
Industry Automotive Industry
Founded 1954
Corporate office New Delhi , India
Key people Bhupinder Singh Jauhar (Chairman),
Randeep Singh Jauhar (Vice
Chairman), Pradeep Singh Jauhar
(Managing Director)
Products Multileaf Springs, Parabolic Springs,
Lift Axle, Air Suspension
Number of employees 3000
Parent Jamna Group
Type Public,
Listed on NSE, BSE
Website BSE
www.jaispring.com
EXECUTIVE TRAINING

WEEKS LEARNING DURING INTERNSHIP

1 Entries in Bank reconciliation
statement
2 Creating vouchers
3 How to book the travelling expense
of employees
4 Adjustment entries related to
suppliers payment
5 Creating Purchase order bill
6 Creating sales return note
Worked on the
software
RAMCO
To study the effect of working capital management on firm’s
profitability

• WRITTEN BY:
• A .K. Sharma
• Satish Kumar

Published by:
Global Business Review,2011,Vol12,Issue(1) N0.159-173
Working
capital
managemen
t
 Conceptualization

Construct
CONTENTS
Hypothesis Formulation

Research Methodology

Data Analysis

Results & Findings

Critical Review
CONSTRUCT: Studying the effect of
working capital management on
firm’s profitability.

INDEPENDENT VARIABLES CONTROL V

DEPENDENT VARIABLE
(Working capital (Working
(Profitability)
management) manage
• Return on Assets • Number of days • Size of the fir
accounts receivable • Growth in its
• Number of days of • Financial deb
inventory • Current ratio
• Number of accounts
payable
• Cash conversion cycle
HYPOTHESIS
FORMULATION
H1: Current ratio has positive impact on return on assets
H2:Sales growth ratio has negative impact on return on assets
H3:Cash conversion cycle has positive impact on return on assets
H4:Financial debt ratio has negative impact on return on assets
H5:Size of the firm has a negative effect on return on assets
H6:Number of days accounts receivables has a positive effect on return on
assets
H7:Number of days of inventory has negative effect on return on assets
H8:Number of accounts payable has a negative effect on return on assets
 Research
Methodology
………..
Research Methodology

Purpose of the Study =

Descriptive
Type of Investigation = Casual
Study Setting = Non-
Contrived
Time Horizon = Cross-
Sectional
DATA COLLECTION

The sample consists of 263 companies, all from BSE

500,broad market indices of Indian capital market .It
consists of 15 industries with full annual of data of eight
variables during the period 2000-08 .The data required
for the purpose of this study has been taken from the
Capitaline and CMIE-Prowess database.
Statistical Tools

1.Descriptive statistics
2. Correlations for study variables.
3. Regression analysis
 DATA
ANALYSIS

…………….
RESULTS AND FINDINGS

1) Regression reveals that there is a negative relationship between Size,

Leverage ,Growth and Inventory with dependent variable that is return
on assets.
2) In Indian companies both size and growth indicators are negatively
correlated with profitability which is contrary to many international
findings on such variables and also to the theory of corporate finance.
3) ROA and Current ratio have a positive relationship
4) A positive relationship is found between profitability and number of
days of accounts receivables
5) Descriptive statistics reveals that Indian companies on an average take
a longer time(683days) to pay their suppliers.
6) Regression results shows a negative relationship between number of
Continue…

7)The combined effect of all the three variables used in

equations(1),(2) and (3) was analysed using the
relationship between profitability and cash conversion
cycle.
9) There is a positive relationship betwwen CCC and
profitability.
LIMITATIONS

1)This study prompts the researchers to investigate the relationship

between working capital management and the firm’s profitability
with a broader set of companies operating in India.
2)Secondary data is used in this study.
3)Because of inadequacy of data our study consist only 15
industries out of 263 with full annual data of eight variables during
the period 2000-08.
4)An unusual and strange relationships in certain cases has been
observed in indian companies which may be useful for users who
are engaged in management of short term funds in corporate world
5)There is no presence of autocorrelation and multicollinearity in
FUTURE
SCOPE
………
 Theoretical Framework

– Construct
Studying the indicators of working capital management (current
ratio, financial debt ratio, assets turnover ratio, quick ratio and
gross working capital turnover ratio) of Jamna Auto Industries Ltd
in the context of profitability (return on assets) on the basis of last
five financial Years ending March31st,2015 to March31st 2019
Dependent variable
Independent
variable • Return on assets
• Current ratio
• Financial debt ratio
• Gross working capital
turnover ratio
• Assets turnover ratio
• Quick ratio
HYPOTHESIS
FORMULATION
H1: Current ratio has positive impact on return on assets
H2:Gross working capital turnover ratio has negative impact
on return on assets
H3:Financial debt ratio has negative impact on return on
assets
H4:Quick ratio has a positive impact on return on assets.
H6:Asset turnover ratio has a negative impact on return on
assets
Research Methodology

Purpose of the Study =

Descriptive
Type of Investigation = Casual
Study Setting = Non-
Contrived
Time Horizon = Cross-
Sectional
RESEARCH OBJECTIVES

1) To study the impact of selected working capital management

indicators on profitability using regression analysis.
2) To comment on profitability position of Jamna Auto Industries
Ltd
3) To identify the nature and extent of relationship between
liquidity and profitability
4) To provide appropriate management policy recommendations.
5) To find out the financial postion of a company using liquidity
and profitability ratios.
 RATIO
ANALYSIS
 QUICK RATIO YEAR QUICK RATIO
1.2 2014-
1
15 0.38
2015-
0.8
16 0.27
0.6
2016-
0.4 17 0.42
0.2
2017-
18 0.82
0

2014-15 2015-16 2016-17 2017-18 2018-19

2018-
19 1.12
 ASSETS TURNOVER RATIO
5

4.5

4
Assets
3.5
Turnover
3
Year Ratio
2.5
2014-15 2.4
4.68 2015-16 0.89
2

1.5
2.82 2016-17 1.19
1
2.4 2017-18 2.82
0.5
0.89 1.19 2018-19 4.68
0
2014-15 2015-16 2016-17 2017-18 2018-19
 RETURN ON TOTAL ASSETS
0.4 Return on
0.3 0.35 Year Total Assets
0.31 0.29
0.2 0.24 2014-15 0.16
0.1 0.16
2015-16 0.31
0
Return on Total Assets 2016-17 0.35
2014-15 2015-16 2016-17 2017-18 0.29
2017-18 2018-19
2018-19 0.24
 Working Capital Turnover
Year Ratio
2014-15 -23.45
2015-16 -22.65
2016-17 2279.75
2017-18 17.36
2018-19 32.03
WORKING CAPITAL TURNOVER RATIO
2500
2279.75

2000

1500

1000

500

17.36 32.03
0
-23.45 -22.65 WORKING CAPITAL TURNOVER RATIO

-500
2014-15 2015-16 2016-17 2017-18 2018-19
 CURRENT RATIO
1.4
1.2 1.32
Current
1 1.12 Year Ratio
0.8
1.002
0.82 2014-15 0.82
0.6 0.745
2015-16 0.745
0.4
2016-17 1.002
0.2
2017-18 1.32
0
2014-15 2015-16 2016-17 2017-18 2018-19 2018-19 1.12
 FINANCIAL DEBT RATIO

Financial
Financial Debt Ratio Year Debt Ratio
0.8
0.7 2014-15 0.6
0.6
0.5 2015-16 0.5
0.4
0.71
0.3 0.6 2016-17 0.4
0.5
0.2 0.4 0.34
0.1 2017-18 0.71
0
2014-15 2015-16 2016-17 2017-18 2018-19 2018-19 0.34