WORKING CAPITAL MANAGEMENT

IN HCL INFOSYSTEMS LIMITED

PRESENTATION FOR VIVA

BY AASHU JANGID
 INTRODUCTION

• Working Capital management is the process of planning and controlling the level and mix of
current assets of the firm a well as financing these assets.
• A study of working capital is important is of major importance to internal external analysis
because of its closer relationship to current day to day operational requirements of working
capital are very essential.
• The importance of working capital management is reflected in the fact that financial
managers spend a great deal of time in managing current assets and current liabilities.
OBJECTIVES OF WORKING CAPITAL

• To minimise the amount of capital employed in

financing current assets.
• To manage the current assets in such a way that
the marginal return on investments in those assets
is not leas than the cost and capital acquired to
finance them.
• To maintain the proper balance between the
amount of current assets and current liabilities in
such a way that firm is also able to meet its
financial obligations.
IMPORTANCE OF WORKING CAPITAL

• Time devoted to working capital

• Investment in current assets
• Relationship between sales growth and current assets
• Importance to small firms
WORKING CAPITAL CYCLE

The working capital cycle is also known as

operating cycle. It refers to the duration
between the firm’s payment of cash for raw
material, entering into production and inflow
of cash from debtors and realization of
receivables. Simply speaking, operating cycle
is the duration between the outflow of cash
and inflow of cash and this may be evidenced
from the following working capital cycle.
HINDUSTAN COMPUTERS LIMITED (HISTORY)

• Hindustan computers limited also known as HCL Enterprise is one of India’s largest
electronics, computing and information technology company. The company comprises
two listed companies: a) HCL Technologies b) HCL infosystems.
• HCL infosystems Ltd is one of the pioneers in the Indian IT market, with its origin in
1976. For over quarter of a century, we have developed and implemented solutions for
multiple market segments, across a range of technologies in India.
CLASSIFICATION OF WORKING CAPITAL

Working capital can be classified as

follows:
 
• On the basis of time

• On the basis of concept

 
TYPES OF WORKING CAPITAL

• Permanent working capital - There is always a minimum minimum capital which is

continuously required by a firm in order to maintain its activities. Every firm must have
minimum of cash, stocks and other current assets, this minimum level of current assets
which must be maintained by any firm all the times is known as permanent working capital
for that from.
• Temporary working capital - Any amount over and above the permanent levels of
working capital is temporary, fluctuating or billable working capital. The position of the
required working capital is needed to meet fluctuations in demand consequent upon changes
in production and sales as a result of seasonal changes.
INVENTORY MANAGEMENT

• Inventory constitute the most important part of the current assets of large majority of
companies. On an average then when trees are approximately 60% of the current assets in
public limited companies in India. Because of the large size of inventory is maintained by
the firm, a considerable amount of funds is committed to them. It is therefore, imperative
to manage the inventory efficiently and effectively in order to avoid unnecessary
investment.
• Some of the inventory management techniques are : Economic order quantity, ordering
cost, carrying cost, ABC system, JIT(Just-in-time).
CASH
MANAGEMENT
Sources of Cash- Sources of additional working capital include the following:
• Existing cash reserves
• Profits (when you secure it as cash!)
• Payables (credit from suppliers)
• New equity or loans from shareholders
• Bank overdrafts or lines of credit.
• Long-term loans
CASH MANAGEMENT - HCL

• The cash management system followed by HCL Infosystems is mainly lock box system.
• Cash management system involves the following steps : (a) The branch offices of the
company at various locations hold the collection of checks of the customers. (b) Those
checks are either handed over to the CMS agency or bank of the particular location take
charge of whole collection. (c) These CMS agencies or bank send those cheques to the
clearing house to make them realised. (d) The CMS agencies or bank send information to the
central hub of the company regarding realisation/cheque bounced. (e) The central hub passes
on the realised funds to the company as per the agreed agreements. (f) The CMS agencies or
concerned bank provides the necessary MIS to the company as per the requirements.
BIBLIOGRAPHY

• Internet - www.hclinfosystems.in
• Textbooks on Financial Management - I.M. Pandey & Prasanna Chandra