Comprehensive Project Report

On
Analysing Working Capital Management
of
Kamps Ecotech Private Ltd.
Submitted to
Institute Code: 804
Institute Name:
R.H.PATEL INSTITUTE OF MANAGEMENT

Prepared by:
Pratik Rathod
Enrolment No – 198040592065
Krunal Kadiya
Enrolment No- 198040592022
 Introduction – Working Capital

Working capital (abbreviated WC) is a financial metric which represents

operating liquidity available to a business, organization, or other entity,
including governmental entities. Along with fixed assets such as plant
and equipment, working capital is considered a part of operating capital.

Working capital is calculated as current assets minus current liabilities. If

current assets are less than current liabilities, an entity has a working
capital deficiency, also called a working capital deficit and Negative
Working capital.

Working capital is also known as net working capital.

Working capital is computed as the sum of: Inventories (+) Trade

receivables (+) Cash (-) Trade payables. The working capital cycle
(WCC), also known as the cash conversion cycle, is the amount of time it
takes to turn the net current assets and current liabilities into cash.
Working capital structure
Working Capital Cycle
Factors influencing working capital
 Disinfectant Industry Profile
Disinfectants are antimicrobial agents with the ability to destroy
harmful harmful microorganisms such as fungi, virus, and bacteria.
There are various types of disinfectants available in the global market,
which include oxidizing agents, phenolic, quaternary ammonium
compounds, and aldehydes. Phenolic compounds are commonly used
as disinfectant for environmental surfaces such as laboratory surfaces
and non-critical medical devices including stethoscope, blood pressure
cuffs, hospital beds, and furniture.

Increasing demand for disinfectants from water treatment and

healthcare industries is fuelling growth of the global disinfectants
market. Hospital environment is a conducive for transmission of
various pathogens including methicillin-resistant Staphylococcus
aureus, Clostridium difficile, Vancomycin-resistant Enterococcus
faecalis, and Acinetobacter baumannii, which causes various infections
such as bacteremia, urinary tract infection, pneumonia, meningitis, and
wound infection.
Disinfection of wastewater and potable water aids in reducing risk
associated with contamination with pathogenic organisms including
those causing polio, cholera, hepatitis, typhoid, and other viral, bacterial,
and parasitic diseases. According to United Nations, improvement in
water sources decreases diarrhea morbidity by 21% and improved
drinking-water quality such as point-of-use disinfection, would lead to a
45% reduction of diarrhea episodes.

Based on End-Use industry, healthcare segment dominated the global

disinfectants market in 2017. As disinfectants are most widely used in
hospitals and clinics, diagnostic laboratories, pharmaceutical, and
biotechnology companies.

Hospitals, clinics, and diagnostic laboratories utilize disinfectants for

surface disinfection and disinfection of semi-critical and non-critical
medical and surgical instruments such as stethoscopes, trays, reusable
impression, mirrors, and amalgam condensers.
In pharmaceutical industry, disinfectants are used for disinfection
of clean rooms and sterile production facilities. Thus, the growing
pharmaceutical industry is anticipated to support the growth of the
global disinfectants market.

According to the International Federation of Pharmaceutical

Manufacturers & Associations, global pharmaceutical industry is
expected to account for US$ 1,430 billion by 2020, thereby increasing
demand for disinfectants.

Furthermore, various agencies such as United Nations and Centres

for Disease Control and Prevention are focused on initiatives to
promote hygiene and sanitization in this region, which is fuelling
growth of the disinfectants market in the region.
 Global Disinfectants Market - Impact of Coronavirus
(Covid-19) Pandemic
Governments in different countries are focusing on ensuring safety of the
people and to enhance their medical facilities for treatment of Covid-19
infected patients. Rapid surge in medical expenditure and increasing
awareness among consumers regarding hygiene products has provided a
significant boost in the demand for clinical grade disinfectant from clinics,
hospitals and other medical facility premises. This scenario is expected to
foster the demand for disinfectants and the market is expected to witness
a CAGR of around 15% during the on-going pandemic.
Global Surface Disinfectant Market size was over USD 5.3
billion in 2019 and is estimated to grow over 7.54% CAGR
between 2020 and 2026. Increasing demand from healthcare
sector coupled with increasing occurrences of hospital
acquired infections (HAI) and infection transmitted diseases
will promote market growth during the forecast period.

**CAGR – Compound Annual Growth Rate

Key Players operating in the global disinfectants market include Solvay

S.A., Unilever Group, Evonik Industries AG, 3M Company, Procter &
Gamble Corporation, DowDuPont Inc., Lanxess AG, BASF S.E., The
Clorox Company, and Reckitt Benckiser Plc.
Appropriate disinfection and sterilization procedures are mandatory
for the control of hospital-acquired infections, failure of which could
cause increased cost and fatality. Moreover, the on-going COVID-19
outbreak resulted in a drastic surge in the demand for surface
disinfectants in the country. People are now more alert about health
and hygiene, which would boost the demand for surface disinfectant in
the country in the years to come.

According to 6Wresearch, India Surface Disinfectant Market size is

anticipated to register growth during 2020-2026. The Indian healthcare
system is constantly improving with the help of government actions
and policies especially, for the rural areas and providing them with
proper medical aid and sanitation facilities
 Objectives

1. To Analyse the working- capital trend.

2. To Analyse the liquidity trend.
3. To study the different components of working capital.
4. To analyse utilization of current asset and disbursement of
current liabilities and find out any inadequacies.
5. To suggest measure for effective management of working
capital.

Limitations

1. The study is restricted to only Three Year data of Kamps

Ecotech Pvt Ltd.
2. Many facts and data are such that they are not to be disclosed
because of the confidential nature of the information.
 Company Profile - Kamps Ecotech Pvt. Ltd
Kamps Ecotech Pvt. Ltd. established in 2011 is an innovative, industry
leading supplier of high performance Eco-Friendly disinfectant which is
combination of H202 and Silver Ions for industrial, commercial and
process applications; pharmaceutical industries, hospitals, food and
beverage processing industries including dairies, meat and seafood
exporters, fruit & vegetable processing companies, poultry farms, etc.

About Company :

Type of Company - Private Limited

Chairman & Director - Shalin Kalpeshbhai Patel
Communication - www.kampsecotech.com
kampsecotech1@gmail.com
+91-02717 -497603
Cell No : +91-9979600619
Nature of business - Production and sale of Disinfectant
Company is Producing Finished Good Named
“SUREOXYL” and selling at a Rate of Rs.250 Per Litre in
unit of 1 Litre, 5 Litre, 10 Litre, 30 Litre.
 Features of SUREOXYL

1. Universal Disinfectant – it kills everything.

2. Environmentally friendly – The breakdown products are water and
oxygen.
3. Cost Efficient – SureOxyl's stability and eco friendliness can save
time and chemicals.
4. Fullty effective in salt water, fresh water and on surfaces.
5. Causes no irritation to skin or eyes
6. No alteration to taste of food/ substances.
7. SureOxyl is Non-pollutant and bio-degradable.
8. SureOxyl is Non Staining, Non inflammable & Odour free.
 Areas Of Application Of “Sureoxyl”
Pharmaceutical Industries

Hospitals

Dairy

Packaged Drinking Water

Food Processing

Poultry Farms

Breweries

Agriculture

Cooling Towers

Hotels & Restaurants

Swimming Pool-SPA-Sauna

Bottling Section
Process of making Suroxyl
 Research Design
The methodology controls the study, dictates the acquisition of the data,
and arranges them in logical relationships, sets up a means of refining the
raw data, contrives an approach so that the meanings that lie below the
surface of those data become manifest, and finally issue a conclusion or
series of conclusions that lead to an expansion of knowledge.

The data or research is a financial and based on analysis of financial

figures.

The source of data is secondary in nature. The data for the present study
has been collected from the authorized person of the company. This
includes financial data such as last 3 years audited financial statements
and audit reports.

In order to analyze the secondary data the statistical tools like ratio
analysis, trend analysis used.
 Literature Review
With the industrialization, the importance of the finance has increased
and working capital management emerged as one of the vital area in the
financial management. Research is not complete unless the previous
references are not taken into consideration and studied. The previous
studies help in planning structure of the present study and take into
account area, if any, left out in previous studies, and helps in identifying,
the problems, the size, the scope and development of present study
structure.

1. Smith Keith V. (1973):-

 
Research has been given focused on the short term finance need to be
given more attention for the success of the individual firm. For that
finance manager has to give more attention on current assets and current
liability. Many firms do investment of current assets in a basket while
current liability in many different request. This paper consist eight
distinct approaches to working capital management out of it first three
gives common guidelines next three regarding constrain set and cost
balancing and last two about probability models and portfolio theory.
2. Bose S.K

“Management of Working Capital”, studied the two Cable

manufacturing companies, and discussed the concept of working capital
and found that the working . capital needs depends on certain elements
like volume of investment in fixed assets, volume of projected sales, rate
of turnover of current assets and credit terms of purchases.

3. Banarjee

“The Management of Working Capital Derivation- a case study”

observed that only current ratio is not sufficient to judge the financing
activities but required to be compared with sales. The working capital
output ratio may be calculated for each component of working capital i.e.
stock, debtors, cash and creditors. Further stock may be raw material,
work-in-progress, finished goods. Other important aspects indicated by
author are turnover ratio, the credit and collection policy by average
debtors to net and credit sales, aging of debtors, cash holding from past
experiences, and creditors turnover. However the creditor turnover ratio
is not significant as decrease in the accounts payable may be off set by
increase in overdraft and vice-versa.
4.Venugopalan

In the study of “Working Capital Management and Control” discussed

Two Hypothetical Companies. For the period of two years, 1970 and 1971
explain the significance of working capital management. According to
him, the needs of working capital can be ascertained by three methods
viz Traditional method, Engineering technique and Operational analysis.
There are two integrated factors in operating cycle i.e. Time cycle and
Physical Targets.

5. Bhattacharya

In the study of “Working Capital Management and Inflation” defined the

concept of gross and net working capital. Negative concept is also used
when current liabilities are in excess of current assets. Internal sources
like retained earnings and depreciation and external sources like bank
credit, creditors and public deposit are used for financing working
capital.
6. Mishra

In the study of “Problems of Working Capital Management during

Inflation”, discussed the crucial facets of working capital like amount of
working capital, composition of current assets and liabilities and ways of
financing it. Working capital is needed more with increase in operations
and overstatement of profits leads to the distribution of dividends out of
capital and tax payment on capital leads to increase in working capital
requirements and fund gets exhausted.
 Data Analysis
Data analysis is a cycle of looking into, purifying, changing over, and
displaying data with the objective of finding important data, proposing
ends, and supporting choice making. Data interpretation talk going to the
cycle of evaluating and deciding the noteworthiness of significant data,
for example, audit results, investigational discoveries, comments or story
reports. Understanding data is a significant basic reasoning aptitude that
encourages you appreciate course readings, graphs and tables.

Project is based on analysis and facts and figures based on the

following :

1. Audit Reports of year 2017-18, 2018-19, 2019-2020.

2. Balance sheet and P & L account of the year 2017-18, 2018-19, 2019-
2020.
3. Ratio analysis
 Ratio Analysis

The basis for financial analysis, planning and decision making is

financial statements which mainly consist of Balance Sheet and Profit
and Loss Account. The profit & loss account shows the operating
activities of the concern and the balance sheet depicts the balance value
of the acquired assets and of liabilities at a particular point of time.

The financial manager has certain analytical tools which help in

financial analysis and planning. One of the main tool is Ratio Analysis.
Let us discuss the Ratio Analysis.

A ratio is defined as “the indicated quotient of two mathematical

expressions and as the relationship between two or more things.” Here
ratio means financial ratio or accounting ratio which is a mathematical
expression of the relationship between accounting figures.
Type of Ratios
Sources of Financial Data for Analysis
The sources of information for financial statement
analysis are:
1. Annual Reports
2. Interim financial statements
3. Notes to Accounts
4. Statement of cash flows
5. Business periodicals.
6. Credit and investment advisory services
 Working Capital (Percentage change from previous year)

% Change % Change % Change

Particulars 2016-17 2017-18 2018-19 2019-20
2018-2017 2019-2018 2020-2019

Current Assets              

Inventories ₹ 34,068 -33% ₹ 86,435 154% ₹ 1,40,226 62%

₹ 51,136
Trade receivables ₹ 38,452 231% ₹ 16,455 -57% ₹ 99,967 508%
₹ 11,600

Cash and Cash Equivalents ₹ 3,04,539 4% ₹ 5,85,861 92% ₹ 5,07,727 -13%

₹ 2,92,826

Short-Term Loans and Advances ₹ 38,621 54% ₹ 54,452 41% ₹ 1,64,515 202%
₹ 25,131

(A) Gross Current Assets ₹ 3,80,693 ₹ 4,15,680 256% ₹ 7,43,203 230% ₹ 9,12,436 759%

Current Liabilities              

Other Current Liabilities ₹ 1,80,393 28% ₹ 4,86,398 170% ₹ 3,26,897 -33%

₹ 1,41,091
Short-Term Provisions ₹ 3,753 -81% ₹0 -100% ₹ 26,207  
₹ 20,132

(B) Total Current Liabilities ₹ 1,61,223 ₹ 1,84,146 -54% ₹ 4,86,398 70% ₹ 3,53,104 -27%

               

Net Working Capital (A-B) ₹ 2,19,470 ₹ 2,31,533   ₹ 2,56,805   ₹ 5,59,332  

1. Current Ratio

Current ratio is the ratio of current assets and current liabilities.

Current Assets
Current Ratio = ___________________________
Current Liabilities

Current Ratio

Year Current Assets Current Liabilities Current Ratio

2020 ₹ 9,12,436 ₹ 3,53,104 2.6

2019 ₹ 7,43,203 ₹ 4,86,398 1.5

2018 ₹ 4,15,680 ₹ 1,84,146 2.3

2017 ₹ 3,80,693 ₹ 1,61,223 2.4

Company has maintained good Current ratio of greater than 2 during the year
2020, 2018, 2017 which indicates company has enough current assets to meet
current liabilities, but during the year 2019 company’s current ratio was not
ideal.
 2. Quick Ratio

The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best
measures of liquidity.
 
Quick ratio = Quick Assets
Current liabilities
Quick Ratio

Year Current Assets Inventories Quick Assets ( CA - Inventory) Current Liabilities Quick Ratio

2020 ₹ 9,12,436 ₹ 1,40,226 ₹ 7,72,209 353104.0 2.19

2019 ₹ 7,43,203 ₹ 86,435 ₹ 6,56,768 486398.0 1.35

2018 ₹ 4,15,680 ₹ 34,068 ₹ 3,81,612 184146.5 2.07

2017 ₹ 3,80,693 ₹ 51,136 ₹ 3,29,557 161223.0 2.04

A quick ratio of 1 is considered as ideal. A quick ratio of less than 1 is indicated of

inadequate liquidity of the business. A very high ratio is also not available as funds
can be profitability employed.

Company has maintained adequate Quick Ratio of greater than 1 During all years.
Which indicates company has enough liquidity to pay current liabilities.
3. Equity Ratio
This ratio indicates proportion of owners’ fund to total fund invested in the business.
Traditionally, it is believed that higher the proportion of owners’ fund lower is the
degree of risk.

Shareholder’s Equity
Equity Ratio = __________________________
Capital Employed

Higher of equity to capital employed is considered ideal and preferred. Company’s

equity ratio was not good as Equity was half of capital employed. Owners need to
bring more capital to increase Equity and thereby Equity ratio. However company
had favorable ratio during 2017, 2018, 2019.

4. Debt Ratio
Total debt will include short and long-term borrowing from financial institution
debentures bonds. Capital employed will include total debt and net worth .

Total Debt
Total Debt Ratio = ________________
Total Assets
Company’s Debt ratio from 2017 to 2020 was not favourable as it is greater than
ideal debt ratio of 0.4. Which indicates total debt is higher than Total assets.
Company need to reduce its debt by paying surplus profits to creditors, short-
term loans and advances.

5. Debt -Equity Ratio

It reflects the relative claims of creditors and shareholders against the assets
of the business. Debt, usually, refers to long-term liabilities. Equity include
preference share capital and reserves.
Total Debt

Debt-Equity = __________________________
Shareholder’s Equity
Company’s Debt ratio was very good for the year 2019 and 2020 as debt was less
than half of equity which signifies company has enough capital to pay debt
(liabilities). However for the year 2017 and 2018 debt – equity ratio was not
favorable as it was greater than 0.5.

6. Proprietary Ratio
Proprietary ratio expresses the relation between net worth and total assets.
Net worth
Proprietary ratio = ________________
Total assets
Company’s proprietary ratio was very low during year 2017 to 2020 which
indicates less than half of total assets are financed by shareholders.

7. Total Assets Turnover Ratio

This ratio measures efficiency of a company with which the firm uses its total
assets to generate revenue. Ideal total assets turnover ratio is 2.5 or more. This
ratio is computed as below mentioned :
Sales
Total assets T/O Ratio = _____________________________
Average Total Assets

Company had good total assets turnover ratio of more than 2.5 during 2019 and
2020 which indicates company is using total assets with high efficiency to
generate revenue.

8. Fixed Assets Turnover Ratio

The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure
operating performance. It measures the efficiency with which the firm uses its
fixed assets.
Sales
Fixed Assets Turnover Ratio = _____________________________________
Average Fixed Assets
Company’s sales for the year 2020 was 20.3 times of Average fixed assets which
signifies company is using fixed assets with greater efficiency. Assets turnover
ratio for the year 2018 was 6.7 times which further increased to 17 times for the
year 2019.

9. Current Assets Turnover Ratio

Current Asset Turnover - an activity ratio measuring firm’s ability of generating
sales through its current assets (cash, inventory, accounts receivable, etc.).
Sales
Current Assets Turnover Ratio = ___________________________
Average Current Assets
Company’s sales for the year 2020 was 3.4 times of average current assets.
Company achieved high current assets turnover ratio for the year 2019 but it
further decreased in year 2018 to 3.3.

10. Working Capital Turnover Ratio

Working capital turnover is a ratio that measures how efficiently a
company is using its working capital to support sales and growth.

Working Capital Sales

Turnover Ratio = ______________________________
Average Working Capital
Working capital turnover ratio for the year 2020 was 6.9 times which signifies
company’s sales was 6.9 times of average working capital. However it was high of
11.3 times in year 2019 and 5.8 times in year 2018.

11. Inventory Turnover Ratio

This ratio indicates that how fast inventory is used or sold. A high ratio is
good from the view point of liquidity and vice versa. A low ratio would
indicate that inventory is not used/ sold/ lost and stays in a shelf or in the
warehouse for a long time.
COGS
Inventory Turnover Ratio = _____________________________________
Average Inventory
Assets turnover ratio was 9.1 times for the year 2020 which signifies that inventory
was sold for 9 times. It was 23.8 times for the year which considered to be high
turnover of inventory into sales.

12. Debtor Turnover Ratio

The accounts receivable turnover ratio, also known as the debtor’s turnover
ratio, is an efficiency ratio that measures how efficiently a company is
collecting revenue – and by extension, how efficiently it is using its assets.
 Sales
Debtor Turnover Ratio = _____________________________________
Average Debtors

Debtor turnover for the year 2020 was 48.4 which signifies that during the year 2020
money was collected for 48 times. During the year 2019 it was 100 times which
means debt collection period was very low.

13. Debtor Velocity Ratio

Debtors’ velocity ratio indicates the average collection period. However, the average
collection period can be directly calculated as follows:
Average Debtors
Debtor Velocity Ratio = _______________________________ * 365/12
(Average collection Period) Sales

Company had collection period of 3.6 days during the year 2019 and 7 days in year
2018 however company increased collection period to 7.5 days in the year 2020.
14. Creditors turnover Ratio
The accounts payable turnover ratio, also known as the payables turnover or the
creditor’s turnover ratio, is a liquidity ratio that measures the average number of
times a company pays its creditors over an accounting period.
Total Credit Purchase
Creditors Turnover Ratio = _____________________________________
Average Creditors

Creditor turnover ratio of 2.5 for the year 2020 signifies that creditors paid for 2.5
times during the year. And same ratio for the year 2019 was 4.3 and 4.2 for the year
2018. Company’s creditor turnover ratio is decreasing every year which indicates
that company is not paying money to creditors frequently and blocks creditors
money which company need to improve.

15. Creditor Velocity Ratio

Average Creditors
Creditor Velocity Ratio = ________________________________ * 365/12
(Average collection Period) Total Credit Purchase

Creditor velocity ratio for the year 2020 was 4.8 month which indicates that it takes
5 months for company to pay to creditors which need to be further minimised.
creditor velocity ratio was low and favourable during the year 2018 and 2019 but
not favourable for the year 2020.
16. Net Profit Ratio
It indicates the result of the overall operation of the firm. The higher the ratio, per
profitable is the business.
Net Profit
Net profit ratio = ________________ *100
Net sales
Net profit is the profit available with company after paying all the expenses and
deductions. Company’s net profit ratio was very low during all the years despite
high gross profit ratio. Company earned only 3% of net sales in year 2020.
Company need to reduce its expenses to increase net profit.

17. Gross Profit Ratio

Gross profit ratio (GP ratio) is a profitability ratio that shows the relationship
between gross profit and total net sales revenue.
Gross Profit
Gross profit ratio = ________________ *100
Net sales
Company earned profit of 64% from Net sales which indicates company’s
operational performance was good. Company’s average GP ratio was more than
half of Net sales which means half of the sales made is earned as profit.
18. Return on Investment (ROI)
ROI is the most important ratio of all. It is the percentage of return on funds
invested in the business by its owners.
Return / Profit / Earnings
Return on Investment = _________________________ *100
Investment ( Capital )

19. Return on Assets (ROA)

Return on Assets (ROA) ratio is measured in terms of relationship between
net profits and assets employed to earn that profit. This ratio measures the
profitability of the firm in terms of assets employed in the firm.
Net Profit After Tax
Return on Assets = ______________________
Average Fixed Assets

20. Return on Capital Employed (ROCE)

Return on Capital Employed (ROCE), a profitability ratio, measures how
efficiently a company is using its capital to generate profits. The return on
capital employed metric is considered one of the best profitability ratios and
is commonly used by investors to determine whether a company is suitable
to invest in or not.
 Earnings Before interest and Tax
Return on Capital Employed = ________________________________
*100
Capital Employed

Capital Employed = Total Assets – Current Liabilities OR Fixed Assets +

Working Capital.

Company has generated 18% profit against capital invested in the year
2020, 14% profit in the year 2019 and 24% profit against capital invested in
the year 2017. However company generated only 4% profit against capital
invested in the year 2018. Company’s overall performance for the year
2020, 2019 and 2017 was good.

21. Return on Equity (ROE)

Return on Equity (ROE): Return on Equity measures the profitability of
equity funds invested in the firm. This ratio reveals how profitably of the
owners’ funds have been utilised by the firm.

Net Income
Return on Equity = _________________________________
Share holder’s Equity ( Net worth)
Company had good ROE ratio which indicates owners funds are
generating 21% return for the year 2020, 14% for the year 2019 and 30% for
the year 2017. However ROE was very low of 5% for the year 2018.

22. Earnings per Share (EPS)

Earnings per Share (EPS): The profitability of a firm from the point of view
of ordinary shareholders can be measured in terms of earnings n per share
basis.
This is known as Earnings per share. It is calculated as follows:

Net profit available to Equity share holder

Earnings per Share = ________________________________________
Total number of equity share holders

EPS indicates net profit available to equity share holders per share. EPS
for the year was 2.77 which indicates each equity share holder gets 2.77
Rupees and it is considered as very low. However for the year 2018 EPS
was 0.46 which is considered as very low.
 Bibliography
https://www.investopedia.com

https://www.accountingtools.com/articles/working-capital-analysis.html

https://www.wallstreetprep.com/knowledge/working-capital-101/

https://cleartax.in/s/working-capital-management

https://
corporatefinanceinstitute.com/resources/knowledge/modeling/working-cap
ital
 Findings & Suggestions
1. Company maintained very good gross profit but net profit after deducting
all the expenses and deductions was very low. Company need to reduce its
expenses to increase net profit. To reduce expenses company need to reduce
cost of goods sold by purchasing raw material in bulk and negotiating with
creditors to reduce purchase price.

2. Company is not generating enough revenue through net profit. Company

need to increase its sales by expanding market share in other states.

3. Trade receivables in the year 2020-19 increased to 508% which indicates

company’s major sales consists of credit sales and money is not received
from debtors. Company need to further rationalize credit policy.

4. Current assets of company were sufficient to cover current liabilities

during year 2020, 2018 and 2017.

5. Company had sufficient quick assets to pay current liabilities if it required

paying immediately.
6. Company’s debt is increasing every year with which total equity is also
increasing to cover debt.

7. Company maintained high cash on hand & bank which company should
reinvest in business expansion and paying debt.

8. Company’s net working capital is increasing every year and increased to

118% in the year 2020-19. Company had good liquidity position.

9. Company was not making payment to creditors on time due to which

creditor turnover ratio is decreasing every year. Company need to pay
surplus cash to creditors to reduce debt.

10. Company generated 70% profit from average assets for the year 2020
which indicates high utilisation efficiency.

11. Company is trying to increase return on equity/net worth every year.

12. Company’s EPS was very low during all the year which company need to
increase by increasing net profits.