A STUDY ON WORKING CAPITAL

MANAGEMENT WITH
REFERENCE TO MARUTI SUZUKI
PVT LTD, KANCHIKACHERLA
PRESENTED BY

U. NAVEEN
UNDER THE GUIDANCE OF

U. RAMBABU
INTRODUCTION

• Working Capital Management is the process of planning and controlling the level and mix of current
assets of the firm as well as financing these assets.
• Specifically, Working Capital Management requires financial managers to decide what quantities of cash,
other liquid assets, accounts receivables and inventories the firm will hold at any point of time.
• It measures how much in liquid assets a company has available to build its business.
• A short term loan which provides money to buy earning assets. Positive
• working capital is required to ensure that a firm is able to continue its operations and that it has
sufexpense funds to satisfy both maturing short- term debt and upcoming operational expenses.
NEED OF THE STUDY

• The main aim of any firm is to maximize the wealth of shareholders.

• This can be achieved only by a steady flow of profits which in turn depend on successful sales activity.
To generate sales, investment of sufficient funds in current assets is required.
• The need of current assets should be emphasized, as the sales don’t convert into cash immediately but
involved a cycle of operations, namely operating cycle.
• MARUTI SUZUKI is multi product dealing unit with varying cycle for each product.
• The capital requirement for each department in an organization of MARUTI SUZUKI is large which
(depends on the product target for that particular year) calls for an effective working capital
management.
OBJECTIVES OF THE STUDY

• To know the change in working capital during the study period.

• To know the liquidity position of the Maruti Suzuki with the help of liquidity ratio.
• To evaluate the working capital position and its management in the organization.
• Through computing and analysis the financial ratios.
• To identify the financial strengths and weakness of the company.
• To suggest measure to improve efficiency of the company.
RESEARCH METHODOLOGY

Secondary data:
➢ Most of the computations are made from the figures contained in the Working Capital Management
provided by the company.
➢ Collection of some of the information regarding theoretical aspects by referring standard text and
books.
➢ Observation of functioning of the Finance Department.
➢ Research methodology used for study includes both primary& secondary sources of data. However
most of study is conducted based on secondary sources.
LIMITATIONS OF THE STUDY

• Although every effort has been made to study the “Working Capital Management” in detail, in an
organization of MARUTI SUZUKI size, it is not possible to make an exhaustive study in a limited duration
of 6weaks.
• It is not possible to include data as the audited financial reports has not come yet (at the time of
preparation of this report). However data is included partially from the unaudited financial reports of
MARUTI SUZUKI.
• Apart from the above constraint, one serious limitation of the study is that it is not possible to reveal
some of the financial data owing to the policies and procedures laid down by MARUTI SUZUKI. However
the available data is analyzed with great effort to get an insight into Working Capital Management in
MARUTI SUZUKI.
INDUSTRY PROFILE
• Like many other nations India’s highly developed transportation system has played a very important role
in the development of the country’s economy over the past to this day.
• One can say that the automobile industry in the country has occupied a solid space in the platform of
Indian economy.
• Empowered by its present growth, today the automobile industry in the country can produce a diverse
range of vehicles under three broad categories namely cars, two- wheelers and heavy vehicles.
• Today, India is among the world's largest producers of small cars.
• The New York Times has rated India as a very strong engineering base with an incomparable expertise in
the arena of manufacturing a number of low-cost, fuel-efficient cars has encouraged the expansion
plans of the manufacturing facilities of a number of automobile leaders like Hyundai Motors, Nissan,
Toyota, Volkswagen and Suzuki.
COMPANY PROFILE

• Maruti Suzuki is India and Nepal’s number one leading automobile manufacturer and the market leader
in the car segment, both in terms of volume of vehicles sold and revenue earned.
• Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of
Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003
• As of 10 May 2007, the government of India sold its complete share to Indian financial institutions and
no longer has any stake in MarutiUdyog.
CONCLUSION

Automobile has a lot of scope for both two wheelers and four Industry Analysis
wheelers due to development in infrastructure of the country. Company Analysis
 According to Indian Statistical Organization the per capita income