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SUMMER TRAINING REPORT ON WORKING CAPITAL MANAGEMENT UNDERTAKEN AT
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SUMMER TRAINING
REPORT
ON
WORKING CAPITAL MANAGEMENT
UNDERTAKEN AT
OSWAL WOOLLEN MILLS LIMITED
In partial fulfillment of the requirement for the award of degree of
Master of Business Administration(MBA)
Submitted To: Submitted By:
CMT COLLEGE HARPREET SINGH MBA
COLLEGE OF MANAGEMENT & TECHNOLOGY- - PATIALA
(AFFILIATED TO PUNJABI UNIVERSITY-PATIALA)
DECLARATION
I am the student of College of Management & Technology, Department of Management, hereby
solemnly declare that the project report on "WORKING CAPITAL MANAGEMENT"
conducted at "OSWAL WOOLEN MILLS (INDIA) LIMITED" is the original work done by me
and moreover to the best of my knowledge, no similar report on this very company has been
submitted to CMT, Department of Management so far, for the fulfillment of the requirement of
the course of study under M.B.A program.
The project report is submitted in partial fulfillment of the requirements for the award of the
degree of Masters of Business Administration, being conducted at CMT, Department of
Management .
Harpreet Singh
ACKNOWLEDGEMENT
First of all I would like to express my heartful gratitude and thanks to Pawan Kumar (Placement Head ) for referring me to do my industrial training.
A research project is not prepared merely by the singular efforts of the person to whom the project is assigned, but it also requires the help and guidance of some others who help and co-operate directly or indirectly in completing the task successfully.
I would like to give my special thanks to R C Kaushal (Accounts Deptt.) project guide for assigning me such an interesting and worthwhile research project and for helping me throughout the project with his constant guidance and support .I would also like to thank departmental guides for his continuous support and advice for the successful completion of the project.
An accomplishment requires the efforts of many people and this work is no different. I feel obliged in taking the opportunity to thanks “MR. R.M SOOD” (Finance Controller) for his help & guidance. I also feel thankful to “Mr. R.C.Kaushal” (Accounts Manager), who have helped me understanding the project & how working capital management is applied at Oswal woollen mils.
I also express my deep sense of obligation to the management of Oswal Woollen Mills (Ludhiana) for giving me an opportunity to undergo field training in their esteemed organization.
During the training period at OSWAL I have learned that how theoretical concepts are applied in a real practice in managing working capital. I have also learned a lot about the corporate working culture and got a exposure to the various documents which are use in arranging working capital of organization.
TABLE OF CONTENTS
S.No. PARTICULARS PAGE NO.
1. WORKING CAPITAL
2. COMPANY PROFILE
3. SWOT ANALYSIS
4. OBJECTIVES OF THE STUDY
5. RESEARCH METHODOLOGY
6. LIMITIONS
7. DATA INTERPERTATION
8. FINDING OF THE STUDY
9. SUZZETIONS
10. CONCLUSION
INTRODUCTION OF THE STUDY
Meaning Of Working Capital Management:-
Working capital means the part of the total assets of the business that change from one form to
another form in the ordinary course of business operations.
The word working capital is a made of two words working and capital. The word
working means day to day operation of the business, whereas the word capital means monetary
value of all assets of the business.
Working capital may be regarded as the life blood of business. Working capital is of
major importance to internal and external analysis because of its close relationship with the
current day to-day operations of a business. Every business needs funds for two purposes.
1. Long term
2. Short term
1. Long term funds are required to create production facilities through purchase of fixed assets
such as plants, machineries, lands, buildings & etc
2. Short term funds are required for the purchase of raw materials, payment of wages, and other
day-to-day expenses.
It is other wise known as revolving or circulating capital
It is nothing but the difference between current assets and current liabilities. i.e.
Working Capital = Current Asset – Current Liability.
Businesses use capital for construction, renovation, furniture, software, equipment, or machinery.
It is also commonly used to purchase inventory, or to make payroll. Capital is also used often by
businesses to put a down payment down on a piece of commercial real estate. Working capital is
essential for any business to succeed. It is becoming increasingly important to have access to
more working capital when we need it.
Concept of Working Capital
Gross Working Capital = Total of Current Asset
Net Working Capital = Excess of Current Asset over Current Liability
Constituents of Working Capital:-
Current Assets Current Liabilities
Cash in hand / at bank
Bills Receivable
Sundry Debtors
Short term loans
Investors/ stock
Temporary investment
Prepaid expenses
Accrued incomes
Bills Payable
Sundry Creditors
Outstanding expenses
Accrued expenses
Bank Over draft
Working capital in terms of five components:
1. Cash and equivalents: - This most liquid form of working capital requires constant
supervision. A good cash budgeting and forecasting system provides answers to key questions
such as: Is the cash level adequate to meet current expenses as they come due? What is the
timing relationship between cash inflow and outflow? When will peak cash needs occur? When
and how much bank borrowing will be needed to meet any cash shortfalls? When will repayment
be expected and will the cash flow cover it?
2. Accounts receivable: - Many businesses extend credit to their customers. If you do, is the
amount of accounts receivable reasonable relative to sales? How rapidly are receivables being
collected? Which customers are slow to pay and what should be done about them?
3. Inventory: - Inventory is often as much as 50 percent of a firm's current assets, so naturally it
requires continual scrutiny. Is the inventory level reasonable compared with sales and the nature
of your business? What's the rate of inventory turnover compared with other companies in your
type of business?
4. Accounts payable: - Financing by suppliers is common in small business; it is one of the
major sources of funds for entrepreneurs. Is the amount of money owed suppliers reasonable
relative to what you purchase? What is your firm's payment policy doing to enhance or detract
from your credit rating?
5. Accrued expenses and taxes payable: - These are obligations of your company at any given
time and represent a future outflow of cash.
Two different concepts of working capital are :-
Balance sheet or Traditional concept
Operating cycle concept.
Balance sheet or Traditional concept: -
It shows the position of the firm at certain point of time. It is calculated in the basis of balance
sheet prepared at a specific date. In this method there are two type of working capital:-
Gross working capital
Net working capital
Gross working capital: - It refers to the firm’s investment in current assets. The sum
of the current assets is the working capital of the business. The sum of the current assets
is a quantitative aspect of working capital. Which emphasizes more on quantity than its quality,
but it fails to reveal the true financial position of the firm because every increase in current
liabilities will decrease the gross working capital.
Net working capital: - It is the difference between current assets and current liabilities or
the excess of total current assets over total current liabilities.
Working capital= current assets - current liabilities
Net working capital: - It is also can defined as that part of a firm’s current assets which is
financed with long term funds. It may be either positive or negative. When the current assets
exceed the current liability, the working capital is positive and vice versa.
Operating cycle concept : - The duration or time required completing the sequence of
events right from purchase of raw material for cash to the realization of sales in cash is called the
operating cycle or working capital cycle.
RawMaterial
Debtors&
Bills Receivables
Cash
Work In
Process
FinishedGoods
Sales
OperatingCycle
KINDS OF WORKING CAPITAL
Kinds Of Working Capital
On the Basis Of Concept
Gross WorkingCapital
Net WorkingCapital
On the Basis of Time
Permanent orFixed Working Capital
RegularWorking Capital
Reserve Working Capital
Temporary or Variable Working
Capital
SeasonalWorking Capital
SpecialWorking Capital
Gross Working Capital
Gross working capital refers to the amount of funds invested in current assets that are employed
in the business process. This is a going concern concept, since it is these aspects that financial
managers are concerned with if they are to bring about productivity from other assets. The gross
concept is used here, since one of the principal functions of the finance officer is to provide the
current amount of the working capital at the right time in order for the firm to realize the greatest
return on its investment.
Net Working Capital:Net Working Capital concept is different between current assets and
current liabilities. This concept is useful to groups interested in determining the amount and
nature of the assets that may be used to pay the current liabilities. Moreover, the amount that is
left after these debts are paid may be used to meet future operational needs.
Net Working Capital= Current Assets – Current Liabilities
Permanent or Fixed Working Capital:
Permanent or fixed working capital is minimum amount which is
required to ensure effective utilization of fixed facilities and for maintaining the circulation of
current assets. Every firm has to maintain a minimum level of raw material, work-
in-process, finished goods and cash balance. This minimum level of current assts is called
permanent or fixed working capital as this part of working is
permanently blocked in current assets. As the business grow the requirements of
working capital also increases due to increase in current assets.
Temporary or Variable Working Capital:Temporary or variable
working capital is the amount of working capital which is
required to meet the seasonal demands and some special exigencies. Variable
working capital can further be classified as seasonal
working capital and special working capital. The capital
required to meet the seasonal need of the enterprise is called seasonal
working capital. Special working capital is that part of
working capital which is required to meet special exigencies such
as launching of extensive marketing for conducting
research, etc..Temporary working capital differs from permanent
working capital in the sense that is required for short periods and
cannot be permanently employed gainfully in the business
IMPORTANCE OF ADEQUATE
WORKING CAPITAL
1. Solvency of the Business: - Adequate working capital helps in
maintaining the solvency of the business by providing uninterrupted of production.
2. Goodwill: Sufficient amount of working capital enables a firm to make
prompt payments and makes and maintain the goodwill.
3. Easy loans: Adequate working capital leads to high solvency and credit
standing can arrange loans from banks and other on easy and favorable terms.
4. Cash Discounts: Adequate working capital also enables a concern to avail
cash discounts on the purchases and hence reduces cost.
5. Regular Supply of Raw Material: Sufficient working
capital ensures regular supply of raw material and continuous production.
6. Regular Payment of Salaries, Wages and Other Day to Day Commitments: It leads
to the satisfaction of the employees and raises the morale of its employees, increases their
efficiency, reduces wastage and costs and enhances production and profits.
7. Exploitation of Favorable Market Conditions: If a firm is having adequate
working capital then it can exploit the favorable market conditions such as
purchasing its requirements in bulk when the prices are lower and holdings its inventories
for higher prices.
8. Ability to Face Crises: A concern can face the situation during the depression.
9. Quick And Regular Return On Investments: Sufficient working capital
enables a concern to pay quick and regular of dividends to its investors and gains
confidence of the investors and can raise more funds in future.
10. High Morale: Adequate working capital brings an environment of
securities, confidence, high morale which results in overall efficiency in a business.
EXCESS OR INADEQUATE WORKING CAPITAL
Every business concern should have adequate amount of working capital to run its business
operations. It should have neither redundant or excess working capital nor inadequate nor
shortages of working capital. Both excess as well as short working capital positions are bad for
any business. However, it is the inadequate working capital which is more dangerous from the
point of view of the firm.
Disadvantages of inadequate working capital:-Every business needs some amounts of
working capital. The need for working capital arises due to the time gap between production and
realization of cash from sales. There are time gaps in purchase of raw material and production;&
sales; & realization of cash.
FACTORS DETERMINIG THE WORKING CAPITAL REQUIREMENTS
Nature Of Business: The requirements of working is very limited in public utility undertakings
such as electricity, water supply and railways because they offer cash sale only and supply
services not products, and no funds are tied up in inventories and receivables. On the other hand
the trading and financial firms requires less investment in fixed assets but have to invest large
amt. of working capital along with fixed investments.
Size of the Business: Greater the size of the business, greater is the requirement of working
capital.
Production Policy: If the policy is to keep production steady by accumulating inventories it will
require higher working capital.
Length of Production Cycle: The longer the manufacturing time the raw material and other
supplies have to be carried for a longer in the process with progressive increment of labor and
service costs before the final product is obtained. So working capital is directly proportional to
the length of the manufacturing process.
Business Cycle: In period of boom, when the business is prosperous, there is need for larger
amt. of working capital due to rise in sales, rise in prices, optimistic expansion of business, etc.
On the contrary in time of depression, the business contracts, sales decline, difficulties are
faced in collection from debtor and the firm may have a large amt. of working capital.
Rate of Growth of Business: In faster growing concern, we shall require large amt. of working
capital.
SOURCES OF WORKING CAPITAL
The working capital requirements of a concern can be classified as:
1) Permanent or Fixed working capital requirements
2) Temporary or Variable working capital requirements
The various sources for the financing of working capital are as follows:
Financing of Permanent/Fixed or Long-Term Working Capital
Sources of Working Capital
Permanent or Fixed
SharesDebentures
Ploughing back of Profits
Temporary or Variable
Indigenous BankersInstallment Credit
Advances
Permanent working capital should be financed in such a manner that the enterprise may have its
uninterrupted use for a sufficiently long period. There are five permanent sources of working
capital.
1) Shares: Issue of shares is the most important source for raising the permanent or long term
capital. A company can issue various types of shares as equity shares, preference shares and
deferred shares. According to companies act a company cannot issue deferred shares. Preference
shares carry preferential rights in respect of dividend at fixed rate and in regard to the repayment
to the capital at the time of winding up the company. Equity shares do not have any fixed
commitment charge and the dividend on these shares is to be paid subject to the availability of
sufficient profits. As far as possible a company should raise the maximum amount of permanent
capital by the issue of shares.
2) Debentures: A debenture is an instrument issued by the company acknowledging its debt to
its holder. It is also an important method of raising long term or permanent working capital. The
debenture holders are the creditors of the company. The interest on debentures is a charge against
profit and loss account. When the debentures are secured they are paid on priority to other
creditors. The debentures may be of various kinds such as naked or unsecured debentures;
secured or mortgaged debentures, redeemable debentures, irredeemable debentures, convertible
debentures and non-convertible debentures.
3)Ploughing Back of Profits: Ploughing back of profits means the reinvestments by concern of
its surplus earnings in its business. It is an internal source of finance and is most suitable for an
established firm for its expansion, modernization and replacement etc. This method of finance
has a number of advantages as it is the cheapest rather cost free source of finance; there is no
need to keep securities; there is no dilution of control; it ensures stable dividend policy and gains
confidence of the public. But excessive resort to Ploughing back of profits may lead to
monopolies, misuse of funds, & speculation, etc.
Financing of Temporary/Variable or Short-Term Working Capital
1) Indigenous Bankers: Private money lenders and other country bankers used to be the only
source of finance prior to the establishment of commercial banks. Inspite of the establishments
new financial institutions indigenous bankers also advance financial help to a few large-scale
industries, particularly during time of stress both for fixed capital and working capital but mainly
they have provided finance to small scale industries. They used to charge a very high rate of
interest and exploited the customers to the largest extent possible.
2) Installment Credit: This is another method by which the assets are purchased and the
possession of goods is taken immediately but the payment is made in installments over a
predetermined period of time. Generally, interest is charged on the unpaid price or it may be
adjusted in the price. But in any case, it provides funds for sometime and is used as a source of
short-term working capital by many business houses which have difficult fund position.
3) Advances: Some business houses get advances from their customers and agents against orders
and this source is a short term source of finance of them. It is a cheap source of finance in order
to minimize their investment in working capital, some firms having long production cycle,
especially the firms manufacturing industrial products prefer to take advances from their
customers.
4) Accrual Expenses and Deferred income: Accrued expenses are the expenses which have
been incurred but not yet due and hence not yet paid also. The major accruals items are wages
and taxes; these are what a firm owes to the employees and to the government Accruals vary
with the level of activity of the firm. When the activity level expands the accruals increases, and
when activity level contracts accrual decreases. Therefore accruals are treated as part of
spontaneous financing.
5) Commercial Paper: Commercial paper is an important money market instrument in advanced
countries like U.S.A. to raise short term funds. In India RBI introduced commercial paper in the
Indian money market on the recommendation of Vaghul Working Group. Commercial paper is a
form of unsecured promissory note issued by the firms to raise short term funds.
CALCULATION OF WORKING CAPITAL ANALYSIS OF WORKING CAPITAL FROM DIFFERENT ASPECTS
Statement of Working Capital2008 2009 2010 2011
CURRENT ASSETS Provisional Projected
Inventory
Sundry Debtors
Advances to supplier
of raw material
Other Current Assets
12800.83
6186.63
1533.27
8599.1
12915.9
7729
1363.96
6998.34
18148.18
9301.15
665.25
8706.75
26407.51
13506
650
10000.59
(A) Total Current
Assets
29119.83 29007.20 36821.33 50564.10
CURRENT
LIABILITIES
Sundry Creditors
Accrued Expenses
Bills Payable Under
L/C of raw material
Advance from
Customers
Statutory Liability
Other current liabilities
2716.71
1271.96
3016.18
225.14
257.86
15205.92
5588.18
1798.64
406.20
526.82
322.49
13070.4
3469.57
1716.64
3936.14
606.60
255.99
14463.56
4907
2150
2458
530.50
267
22609.4
(B) Total Current
Liabilities
22693.77 21712.73 24448.50 32921.90
Working Capital (Current Assets- Current Liabilities)(A-B)
6426.06 7294.47 12372.83 17642.20
How to determine the working capital:-
Ratio is a very important tools of determining the working capital.
MEANING OF RATIO
Ratios are the most frequently used in practice to access the financial performance and condition.
The absolute accounting figure reported in financial statement does not provide any meaningful
understanding unless it is related to some other relevant information ego Rs 500 crore net profits
may look impressive, but firms performance can be said good or bad only when it is related with
investments. The relationship between two accounting figures, expressed mathematically, is
known as a financial ratio.
For a layman ratio means %age of one in terms of two mathematical expressions" and as "title
relationship between two and more numbers"According to accountants Handbook by Wixon,
Kell and Bedford, “a ratio is an expression of the quantitative relation between two numbers”.
According to Kohler “a ratio is the relation of amount a to b expressed as a:b”.
I. Current Ratio
II. Quick Ratio
III. Absolute Liquid Ratio
I. CURRENT RATIO
Current Assets Current Ratio = -----------------------------
Current liabilities
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
1.2 1.24 1.34 1.34 1.59
DENIMS 1.71 1.98 1.47 2.00 1.41
COTTON
UNIT
0.26 1.23 1.01 2.58 1.45
TOTAL 1.23 1.28 1.34 1.51 1.54
2006-07 2007-08 2008-09 2009-10 2010-20110
0.5
1
1.5
2
2.5
3
MAIN TEXTILESDENIMSCOTTON UNIT
Analysis: A current ratio of more than one indicates that the value of short term assets is
more than short term liability .A current ratio of less than are denote poor liquidity
position. Commercial banks prefer current ratio or equal to 1.33.If we look current assets
of OWM ,then we find that current ratio in 2007 and 2008 is 1.23 and 1.28which has
increased in the year 2009.In 2010 and 2011 it has further increased to 1.51, 1.54
respectively .Since the current ratio of the firm for past years is more than 1.33, therefore
firm has been in good liquid position
II. Liquid Ratio
Liquid AssetsLiquid Ratio = ------------------ Current LiabilityLiquid Assets = Current Assets – (Inventory + Prepaid Expenses)PARTICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
.34 .53 .5 .58 .69
DENIMS .49 .87 .84 1.11 .66
COTTON
UNIT
.007 .11 .35 .32 .2
TOTAL .34 .51 .53 .6 .59
2006-07 2007-08 2008-09 2009-10 2010-20110
0.2
0.4
0.6
0.8
1
1.2
MAIN TEXTILESDENIMSCOTTON UNIT
Analysis
As a rule of thumb Quick Ratio of 1:1 is considered quiet satisfactory. It is generally
considered that if quick assets are equal to current liabilities then the concern may be able
to meet its current obligations. In the past years 2007-11quick ratios are lower than rule of
thumb which is unsatisfactory ,not good for a companywhich shows that company has less
quick assets than currant liability and in this year company hold lesser current assets
against current liability which is not good for the company
III. Absolute Liquid Ratio
Absolute Liquid AssetsAbsolute Liquid Ratio= ----------------------------
Current Liability
Absolute Liquid Assets = Cash + Bank + Marketable Securities
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
.03 .15 .19 .26 .28
DENIMS .16 .02 .04 .005 .003
COTTON
UNIT
.007 .01 .007 .001 .0005
TOTAL .03 .13 .17 .22 .18
2006-07 2007-08 2008-09 2009-10 2010-20110
0.05
0.1
0.15
0.2
0.25
0.3
MAIN TEXTILESDENIMSCOTTON UNIT
Analysis:The acceptable norm as per the rule of thumb is 0.5:1. In the year 2007 the liquidity
ratio is .03which increased in the year 2008,09,10 is .13.,17,.22.but in theyear2011 this ratio has
decreased to .18.
As a convention ,ratio of .5:1 is considered to be satisfactory. For the
2007,08,09,10,11 this ratio of the company it is below satisfactory .This is due to the decreasing
cash balance and increasing debtors i.e. the ability of the firm to realize the debtors has been
decreased. so this conclude that company cannot manage its debtor efficiently
B. Activity Ratios:Activity ratio measures the efficiency of effectiveness with which a firm
manages its resources or assets. These ratios are called turnover ratios because they indicate the
speed with which assets are converted or turned over into sale. Depending upon the purpose, a
number of turnover ratios can be calculated, as debtor turnover, stock turnover, capital turnover
etc.Following are the current assets movement or efficiency ratios:
Inventory Turnover Ratio
II Debtor Turnover Ratio
III Creditor Turnover Ratio
IV Working Capital Turnover Ratio
I Inventory Turnover RatiO
Cost of goods soldInventory Turnover Ratio = -----------------------
Average Inventory
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
2.02 2.54 2.59 2.64 2.39
DENIMS 4.72 10.22 11.29 9.32 4.82
COTTON
UNIT
_____ 1.41 18.35 1.14 1.72
TOTAL 2.27 times 2.88 times 3.6 times 2.74 times 2.55 times
2006-07 2007-08 2008-09 2009-10 2010-20110
2
4
6
8
10
12
14
16
18
20
MAIN TEXTILESDENIMSCOTTON UNIT
Inventory Conversion Period
IT may also be of interest to see average time taken for clearing the stock. This can be possible
by calculating inventory conversion period. This can formula as:
Weeks in year Inventory Conversion period = ------------------------------- Inventory Turnover Ratio
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
181 144 141 138 153
DENIMS 71 36 32 39 76
COTTON
UNIT
------ 259 20 320 212
TOTAL 161days 127days 101days 133days 143days
2006-07 2007-08 2008-09 2009-10 2010-20110
50
100
150
200
250
300
350
MAIN TEXTILESDENIMSCOTTON UNIT
Analysis: Inventory turnover ratio measures the velocity of conversions of stock in to sales .In
the year 2007,08 and 09 stock conversion period was satisfactory. It increased in the year 2010-
11 which shows the inefficiency of stock management. It further increased in the year 2008. So
management should increase its sales efficiency to reduce the stock conversion period to avoid
losses or we sayc ompany is not able to sell its full stock
II Debtor turnover Ratio
Credit is one of the important elements of sales promotion. Following a liberal credit policy can
increase the volume of sales. But the effect of liberal credit policy may result in tying up
substantial funds of firm in form of trade debtors. Trade debtors are expected to be converted
into cash within a short period and are included in current assets. Hence the liquidity position of
a concern to pay its short term obligations in time depends upon the quality of its trade debtors
two kind of ratios can be computed to evaluate the quality of debtor. These ratios are as follow:
a) Debtor Turnover Ratio
b) Average collection Period
a) Debtor Turnover Ratio::
Total SaleDebtor Turnover Ratio = -----------------
Average debtor
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
6.16 6.58 6.84 6.78 5.99
DENIMS 9.86 8.93 7.32 6.87 5.99
COTTON
UNIT
----- 14.79 15.18 8.88 12.47
TOTAL 6.58times 7.28times 7.36times 7.21times 6.53times
2006-07 2007-08 2008-09 2009-10 2010-20110
2
4
6
8
10
12
14
16
MAIN TEXTILESDENIMSCOTTON UNIT
b) Average collection Period: Weeks in Year Average Collection Period = ---------------------------
Debtor Turnover Ratio
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
59 55 53 54 61
DENIMS 37 41 50 53 61
COTTON
UNIT
---- 25 24 41 29
TOTAL 55days 50days 50days 51days 56days
1 2 3 4 50
10
20
30
40
50
60
70
Series1Series2Series3
Analysis: In the year 2007 debtors turnover ratio was low. From year 2008 to 2009 there is an
increase showing improved efficiency of management. It is slightly decreased in the year 2010
and 2011which shows the inefficiency of management.From the year 2008 to 2009average
collection period was very high. It is due to cash sales policy followed by the plant. It shows that
there are less credit sales made by the plant.
III Creditor Turnover Ratio:In the courses of business operation, a film has to make credit
purchases and incur short term liabilities. A supplier of goods i.e. creditors are naturally
interesting in finding out how much time the firm is likely to take in repaying its trade creditors.
The analysis of trade creditor turnover ratio is basically the same as of debtor turnover ratio
except that in place of trade debtor, the trade creditor are taken as the other component of ratio.
Same as debtor turnover ratio, creditor turnover ratio can be calculated in two forms:
a) Creditor Turnover Ratio:Creditor Turnover ratio represent number of times credit payment
has been made to the trade creditor during a year.
Net PurchaseCreditor Turnover Ratio = ----------------
Average Creditor Net purchase = Cost of Good Sold - Opening Stock + Closing Stock
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
3.25 5.35 4.56 4.75 5.47
DENIMS 8.13 17.23 15.98 10.7 11.7
COTTON
UNIT
---- 1.31 66.85 3.22 24.01
TOTAL 3.61times 4.9times 6.28times 5.26times 7.75times
b) Average Payment Period:
2007-08 2008-09 2009-10 2010-20110
10
20
30
40
50
60
70
80
MAIN TEXTILES 3.25DENIMS 8.13COTTON UNIT ----
Weeks in YearAverage Payment Period = --------------------------
Creditor turnover ratio
PATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
112 68 80 77 67
DENIMS 45 21 23 34 31
COTTON
UNIT
----- 279 5 113 15
TOTAL 101days 74days 58days 69days 47days
2006-07 2007-08 2008-09 2009-10 2010-20110
50
100
150
200
250
300
MAIN TEXTILESDENIMSCOTTON UNIT
Analysis
By analyzing the trend in 2 years it can be said that creditors are turned over 5 to 7 times in a
year. The average payment period decreases which is good . This shows that creditors are giving
supplies for credit for the fairly small interval of time. The reason for the small credit may be
goodwill to the group or the low price being charged by creditors..The average payment period
in the financial year 2010 is 69 days after that it declines and reached 47 days in 2011.
IV Working Capital Turnover Ratio:Working capital = Current assets - Current liabilities
Cost of goods soldWorking Capital Turnover = -------------------------
Average working capitalPATICULARS 2006-07 2007-08 2008-09 2009-10 2010-2011
MAIN
TEXTILES
5.4 5.47 4.86 4.79 2.97
DENIMS 6.02 6.53 10.4 6.04 7.49
COTTON
UNIT
------ 6.07 293.1 1.51 4.5
TOTAL 7.07 5.74 6.37 4.02 3.81
2006-07 2007-08 2008-09 2009-10 2010-20110
50
100
150
200
250
300
350
MAIN TEXTILESDENIMSCOTTON UNIT
Analysis
Working Capital Indicate that excess of current assets over current liabilities that is in the year
2010 it is 4.02 and the year 2011 it is 3.81.
Working capital turnover ratio is fluctuatating year by year which shows there is less
improvement in the efficient utilization of working capital by the management.
General nature of business
The working capital requirements of an enterprise are basically related to the conduct of
business. Enterprises fall into some broad categories depending on the nature of business. The
two relevant features are:-(1) The cash nature of business that is cash sale and (2)sale of services
rather than commodities.
Production cycle
Another factor which has a bearing on the quantum of working capital is production cycle. The
term production cycle or manufacturing cycle refers to the time involved in the manufacture of
goods. It covers the time span between the procurement of raw material and the completion of
the manufacturing process leading to the production of finished goods.
OSWAL WOOLEN MILLS LIMITED (OWM)
At owm, even the word
“Impossible”
Says
“I’m possible.”
Oswal Woolen Mills NAHAR GROUP established in 1949 surges ahead to establish it self as a
reputed industrial conglomerate with a wide ranging portfolio from Worsted Spinning, Cotton
Knitted, and Cotton Woven Garments, Woollen Hosiery Etc.
The group has spinning capacity of 0.4 millions cotton spindles 25000 worsted spindles with turn
over of $500 million inclusive of export turnover of $150 million. Out of total production,
60% of the production is dedicated to exports and the rest 40% for domestic market. The
production facility has been awarded ISO 9001:2000.
Today OWM is the flagship company of the glorious Nahar Empire and a proud owner of widely
loved Super Brand in Knitwear, Monte Carlo and Recognized Super Brand Canterbury. The
company boasts of a product portfolio that is truly large and varied. They include diverse types
of Woollen, Acrylic and Synthetic Blended Yarns, Lambs Wool Yarn, Woollen Viscose &
Acrylic Tops, Textile Fabric, Woollen Knitwear, Hosiery & Cotton Garments.
The markets of NAHAR GROUP are cries crossed allover the globe with major clientele in
Australia, New Zealand, Europe, Middle East, Africa, Russia and Asia. The objective is
meeting the buyer’s expectations with consistent quality backed by R & D divisions equipped
with latest equipment, Cream of highly qualified technocrats and adhering to timely schedules.
Today Oswal Woolen Mills LTD. is a company that owes its strength in the market and solidity
to foresight of its chairman Sh. Jawahar Lal Oswal, the professional inputs of the board of
directors and able to team of highly skilled mangers OSWAL WOOLEN MILLS LTD is the
Flagship Company of over US$500 millions NAHAR GROUP OF COMPANIES.
NAHAR SPINNING MILLS LIMITED Spinning a web of pure enchantment seems to be the aim and objective of NAHAR SPINNING,
reckoned to be the blue-chip in the NAHAR firmament.
Starting out as a tiny worsted spinning & hosiery unit in Ludhiana, it was incorporated as Private
Limited Company in December 1980 & became a Public Limited company in 1983. The steady
growth in manufacture & export of woolen/cotton hosiery, knitwear’s & woolen textiles enabled
the company to earn the recognition as an “Export House” followed by a “Recognized Trading
House” by the Government of India in a short span of 8 years. Its turbo-charged performance
brought them a host of fresh laurels… they include the “National Export Trophy” by the Apparel
Export Promotion Council. The latest is the prestigious Status of “Golden Trading House” in
recognition of its continuously outstanding performance accorded by the Government of India.
In 1992, as a measure of backward integration, the company diversified into the Spinning
Industry. Today it has an installed spindlage of 335000 spindles.
Simultaneously the company also established an ultra modern facility to manufacture 12.5
Million pieces of Hosiery Garments. Today Nahar Spinning T-shirts are being exported to
reputed international brands such as GAP, Arrow, Old Navy, Pierre Cardin, Philips Van Heusen,
Izod, Quicksilver, Price Costco…
As a measure of further value addition Nahan Spinning has put up a plant for the manufacture of
fine count mercerized yarn & fabrics catering to both, the domestic hosiery garment market as
well as export markets.
To make use of the emerging opportunities on the Global Textile Scenario and also to have a
focused business approach, the company went in for the Scheme of demerger and arrangement to
restructure its businesses. The Scheme has already been approved by the Hobble Punjab &
Haryana High Court vide its Order DT. 21st December, 2006. As per the scheme, company’s
Investment Activities stand demerged and transferred to Nahar Capital and Financial Services
Limited. This has drawn a visible line between two segment i.e., One Industrial (Textile)
business and Secondly Investment and Financial Activities.
Further as per the scheme “Textiles Business” of Nahar Exports Limited stand demerged and
transferred to the company (post demerger of investment business) in accordance with the terms
of the scheme. Thus upon implementation of the Scheme the spindlage capacity of the company
stand increased to 3.35 Lacks spindles.
MANAGEMENT OF THE COMPANYBOARD OF DIRECTORS
Under the articles of Association we cannot have fewer than three directors or more
than 12 directors. We currently have 10 directors in the company’s Board of Directors.
DETAILS OF DIRECTORS MR J.L OSWAL MR SANDEEP JAIN MR DINESH GOGNA MR AMARJEET SINGH MR KAMAL OSWAL MR DINESH OSWAL MRS H.K BAL MR K.S MAINI DR.O.P. SAHNI DR SURESH KUMAR SINGLA
KEY MANGERIAL EMPLOYEES: MRS MONICA OSWAL MRS RUCHIKA OSWAL MR NARAYAN DASS JAIN MR SAT PAUL NIJHAWAN MR RUKMESH MOHAN SOOD, 57 YEARS, is the financial controller of our
company. He is a qualified fellow member of the institute of chartered Accounts of India. He has 32 years of work experience in the field of finance and accounts .He began his carrier with our company in 1974 and he currently advises our company on finance and accounts. The gross remuneration paid to him in Fiscal 2006 was Rs.50 million.
MR VIRENDER SHARMA MR NAVDEEP SHARMA MR PRITAM SINGH MR NITIN SHARMA
FEATURES OF NAHAR GROUP
1. Total no of units 9.2. Group turnover is Rs 53814.35 in a current year.3. Export market: U.S.A, United Kingdom, Germany, Russia, Japan, Australia, New
Zealand, Holland ,Thailand, Hong Kong Singapore Taiwan, South Africa, Canada, Egypt, Israel and Bangladesh
4. No Strike/accident situation and near zero staff turnover.5. Important brand names are”MONTE CARLO” and CANTERBURRY” OWM were the
proud recipient of the “BEST exhibited Products”award from the international wool Secretariat for these two glamour’s brands.
6. Product Protfolio: Spinning, knitting,fabricsprocessing,hosiery garments.knitware,sugar,infrastructure development and information technology
7. COTTON COUNTY is there emerging ready to wear a Brand8. Beyond this professional portfolio lies the human group that has always been deeply
enriched in social upliftment at every level like Jawahar Lal Oswal public charitable Trust Mohan Dai Oswal Memorial Hospital
ACHIEVEMENTS OF NAHAR GROUP
The group has also achieved excellence in exports which has also been recognized by the export council as well as the govt. of India by bestowing several export rewards and trophies such as:
1. First gold trophy in global exports in 19892. First silver trophy in hosiery exports in 19903. Export award consecutively for five years(1989 to1994) for export for woolen
hosiery garments4. International award for excellence performance in exports in 19935. Silver trophy for second highest export performance in 1998-19996. ISO 9002 received in 20017. NAHAR EXPORT LIMITED, is the recipient of best Exporter for the year 2002-
038. Also NIEL,GARMENT Unit is the recipient of state level Safety Award
Due to its excellent export performance the company continues to enjoy the status of ”GOLDEN TRADING HOUSE ”.The export performance has also enabled the company to win two trophies for non quota category and the second one SILVER TROPHY for the highest export of cotton yarn in non quota category
MAJOR COMPETITORS OF OWM
WOOLEN PRODUCTS The textile and the apparel industry is highly competitive. No single company dominates the industry.OWM seek to compete in the domestic and export markets on the basis of the price , range, quality of their products, delivery times and customer services capacities. In the woolen hosiery garments range ,which is sold under brand ”MONTE CARLO” they do not have any significant competition and enjoy brand loyalty from their customers.MAJOR COMPETITORS IN PULLOVERS AND CARDIGANS
CASABLANCA PRINGE(SCOTLAND)
COMPETITORS OF WOOLEN/BIENDED WORSTED YARN BUISNESS VARDHMAN TEXTILES LIMITED JAYSHREE TEXTILES LIMITED MALWA COTTON MILLS LIMITED
COTTON GARMENT:
As regards their branded woven garments primarily cotton shirts and trousers, they are new entrant in already high competitive market, and they face competition from many established domestic as well as international brands. However, the woven cotton textile industry is highly competitive and no single company dominates the industry. They seek to compete in the domestic market on the basis of price, range, and quality of our products, brand name and our delivery times
COMPETITORS OF THEIR DENIM FABRIC ARVIND MILLS LIMITED AARVEE DENIMS LIMITED RAYMOND LIMITED
FINANCIAL INDEBTEDNESS
Set forth below is a brief summary of major borrowings of our company, as on September 30,2006 together with a brief description of certain significant terms of relevant financing agreements’LENDER
ICICI BANK LIMITED STATE BANK OF PATIALA CENTRAL BANK OF INDIA ALLAHABAD BANK PUNJAB AND SIND BANK
SWOT ANALYSIS
The SWOT analyses is a systematic identification of internal strength and weaknesses of the
business and environment opportunities and threats being faced by that business and provide
information that is helpful, in matching the firm’s resources and capabilities to the competitive
environment in which it operates. It is necessary for the organization to analyze its weakness that
can be removed by undertaking the project and what opportunities can be exploited and strengths
can be strengthen more. As such, it is instrumental in strategy formulation and selection. It is
dynamic and useful framework for choosing a staretgy.The following diagram shows how a
SWOT analysis fits into an environmental scan.
SWOT Analysis Framework
Environmental Scan
Strengths of the company
Internal Environment
External Environment
Internal Environment
External Environment
Strength Weakness Opportunity Threats
(Farsightedness of the chairman MR. JAWAHAR Lal Oswal) Extensive Experience of our Promoters Many persons are working here for more than 50 yrs. This show commitment of
employees towards their org. Strong dealer network, mutual relations with them. Good training programs by OWM for their employees. Member of wool mark and ISO 9002 Automated machines of latest technology Exclusive designs, good texture and fabrics. Premium range of pullovers manufactured by them which no other co. produces. Laboratories for testing the quality of the product. Exports rising every year. Imported tarn from ITALY for premium range. The landed Properties in Gurgaon and Chennai. Quality Standards. Cost control
Weakness of the company
Faulty departmentation Risks relating to the price volatility in the import of wool. We face risk in relation to outsourcing of cotton segments of Monte Carlo. We are dependent upon foreign producers for greasy wool. Greasy wool have a material adverse effect on our operations. Depend on third parties for significant elements of our sales and distribution efforts. Operations are subject to a variety of environmental laws and regulations including those
covering hazardous materials. The success of our business is substantially dependent on retaining the services of our
Key management. Personnel and attracting talented professionals .The loss of the services of any these
persons may adversely affect our business and results of operations We have high working capital requirements. If the number of multi brand outlets and national chain stores continue to increase or
consolidate , our business could be negatively affected
OPPURTUNITES
With booming retail sector and big players like WALMART, BHARTI entering into that field, OWM is also stepping ahead with a mission of opening up of 150 retail outlets all over India under the brand name MONTE CARLO.
Fabrication for various companies likes NIKE,MARKS AND SPENCER.etc Manufacturing of Kids garments
THREATS Mushrooming and upcoming of small hosieries in Ludhiana
Seasonal demand for their major products i.e. pullovers
OBJECTIVES OF THE STUDY
Working Capital is synonymous with current assets. There is no denial about the fact that
working capital is one of the main important tools in the hands of the company for the successful
operations of the business. It is imperative for the finance manager to properly assess the future
requirements of working capital in the company. Keeping in view this objective in mind, the
company assigned this challenging project of estimating the future needs of working capital of
the company. The project itself speaks for the importance of the study.
Following of the main objectives of the study:-
To analyze the various components of working capital.
To study the working capital structure of the company.
To analyze the operating cycle of the company
To fulfill these entire objectives in my research it is essential to look after the statement
presenting the view of working capital.
RESEARCH METHODOLOGY
RESEARCH
Research in common parlance refers to a search for knowledge. One can also define research as a
scientific and systematic search for pertinent information on a specific topic. Research is an
academic activity as such the term should be used in a technical sense. Research refers to:
Defining and redefining problem
Formulating hypothesis or suggested solutions
Collecting, organizing and evaluating data
Making deductions and reaching conclusions
At last carefully testing the conclusions to determine whether they fit the formulating
hypothesis.
Scope of Study
Scope of research is only restricted to the population of OSWAL WOOLLEN MILLS
LUDHIANA.
RESEARCH PROCESS
Research process consists of series of action or steps necessary to effectively carry out research.
These steps are to be followed in the same sequence. These steps are as follows:
Specifying research objective
Preparing a list of needed information
Designing the data collection project
Select a sample size
Organizing and carrying data and reporting the findings.
Research Design
The research design is a pattern or an outline of the research project’s working, it is a statement
of only the essential elements study, those that provide the basic guidelines for the details of the
project. Further a research design is an arrangement of conditions for collection and analysis of
data in that aim to combine relevance to research purpose with economy in procedure. It
constitutes the blueprint for collection, measurement and analysis of data. Research design stands
for advance planning of the methods to be opted for collecting the relevant data and the
techniques to be used in their analysis, keeping in view of the objectives of their research.
The present study, being conducted, followed a Descriptive Design. It produces a picture of
phenomenon in which decision maker is in trusted. As the data would be responses from a
sample containing a large number of sources. Design of descriptive studies includes the nature
and source of the data, the nature of expected results and the analytical method.
The conceptual structure within which this research is conducted descriptive and exploratory in
nature as it brings forward the results concerning the set objectives, though facts, findings and
enquiries, moreover it describes the state of affairs that exists at present.
SOURCES OF DATA
The sources of data means from where we have to get data. There are mainly two sources of
data. These are:
PRIMARY DATA:
Depending upon the nature of the problem, primary data can be collected through various
methods. In this study, personal interviews with senior officials of different departments of
corporate office, with OSWAL WOOLLEN MILLS LIMITED and various members of finance
and accounts department of the company.
SECONDARY DATA:
The secondary data are those data which have already been collected by someone else and which
have already been passed through statistics process. I got published data as maintained by
company like company manuals, annual reports balance sheets etc.
Data collected through websites also.
REPORT WRITING AND PRESENTATION
Report encompasses- charts, diagrams
LIMITATION OF THE STUDY
1. The limitation of the study was that the data given was not correct, due to some technical problems in their E.R.P. system. So it needed to be checked twice or thrice. Also due to time constraint financial constraints was not able to study some more aspects of it.
2. Analysis is only a means and not ends in itself. The analyst has to make interpretation and draw his own calculation.
3. Calculations are difficult to do.4. The finance department doesn’t the proper and required information.
Statement of Working Capital
2008 2009 2010 2011
CURRENT ASSETS Provisional Projected
Inventory
Sundry Debtors
Advances to supplier
of raw material
Other Current Assets
12800.83
6186.63
1533.27
8599.1
12915.9
7729
1363.96
6998.34
18148.18
9301.15
665.25
8706.75
26407.51
13506
650
10000.59
(A) Total Current
Assets
29119.83 29007.20 36821.33 50564.10
CURRENT
LIABILITIES
Sundry Creditors
Accrued Expenses
Bills Payable Under
L/C of raw material
Advance from
Customers
Statutory Liability
Other current liabilities
2716.71
1271.96
3016.18
225.14
257.86
15205.92
5588.18
1798.64
406.20
526.82
322.49
13070.4
3469.57
1716.64
3936.14
606.60
255.99
14463.56
4907
2150
2458
530.50
267
22609.4
(B) Total Current
Liabilities
22693.77 21712.73 24448.50 32921.90
Working Capital (Current Assets- Current Liabilities)(A-B)
6426.06 7294.47 12372.83 17642.20
Interpretation-The above table shows the working capital of OWM. WE can see from the
diagram that the working capital of the company is increasing every year which is a good sign
for the company which means the current assets are more than its current liabilities which is a
good sign for the company.
Analysis and Interpretation
1) Raw Material Conversion Period: PARTICULARS 2008-09 2009-10 2010-11Avg stock of raw
material
5514.43 7005.26 11762.54
Raw material
consumption
12.48 25.9 38.38
RAW MATERIAL
CONVERSION PERIOD
441.86 270.47 306.48
2008-09 2009-10 2010-20110
50
100
150
200
250
300
350
400
450
500
RAW MATERIAL CONVERSION PERIOD
RAW MATERIAL CONVERSION PERIOD
Interpretation: Raw Material Conversion period of the company in 2009 is 441.86 and then
decreasing in 2010 is 270.47 and in 2011 is again increasing 306.48.
2.Work in Progress Conversion Period:
PARTICULARS 2008-09 2009-10 2010-11Avg stock of WIP 1819.57 1884.26 3033.03TOTAL COST OF
PRODUCTION
121.38 123.78 175.65
WIP CONVERSION
PERIOD
14.99 15.22 17.27
2008-09 2009-10 2010-201113.5
14
14.5
15
15.5
16
16.5
17
17.5
WORK IN PROGRESS CONVERSION PERIOD
WORK IN PROGRESS CONVERSION PERIOD
Interpretation: Work in progress conversion period of the company has been increasing from last three years. It means that more days are required for the conversion of WIP. It is a sign of lower production.
3.Finished Goods Conversion Period
PARTICULARS 2008-09 2009-10 2010-11Avg stock of finished
goods
4812.78 5710.82 6788.42
COST OF GOODS
SOLD
127.32 136.44 183.97
FINISHED GOODS
CONVERSION PERIOD
37.8 41.86 36.9
2008-09 2009-10 2010-201134
35
36
37
38
39
40
41
42
43
FINISHED GOODS CONVERSION PERIOD
FINISHED GOODS CON-VERSION PERIOD
Interpretation: Generally, a high stock velocity indicates efficient management of inventory
because more frequently the stocks are sold; the lesser amount of money is required to finance
the inventory. The position of the firm is satisfactory in 2011 as finished goods conversion
period of the company is decreasing.
4 Debtor Conversion Period
PARTICULARS 2008-09 2009-10 2010-11AVG ACCOUNTS
RECEVIABLES
6957.82 8515.07 11403.58
SALES 115.9 183.65 241.56DEBTORS
CONVERSION PERIOD
60.03 46.37 47.21
2008-09 2009-10 2010-20110
10
20
30
40
50
60
70
DEBTORS CONVERSION PERIOD
DEBTORS CONVERSION PERIOD
Interpretation: In the year 2009 debtors’ turnover ratio was high. It decreased in the year
2010. It slightly increased in the year 2011 showing improvement in stock management i.e. there
is an increase showing improved efficiency of management
Gross Operating Cycle:
PARTICULARS 2009 2010 2011Raw Material Conversion PerioWork in Progress Conversion PeriodFinished Goods Conversion PeriodDebtors Conversion Period
441.8614.9937.860.03
270.47
15.22
41.86
46.37
306.4817.2736.947.21
Gross Total Period of Operating
Cycle
516.08 373.92 407.86
2008-09 2009-10 20010-110
100
200
300
400
500
600
GROSS OPERATING CYCLES
GROSS OPERATING CYCLES
RESULTS AND FINDINGS
There is lack of educated workers working in stores. Techniques used for inventory
management are not so good.
The stock turnover ratio of the company is decreasing
For managing cash, cash budget is prepared periodically by accounts department.
The working capital of the company increased in the past years periodically.
Stock conversion period of the company is increasing which shows the inefficiency of
stock management.
Gross period of the operating cycle of the company has increased
Sales, Net profit and EPS of the company are showing an upward trend.
Gross Profit of the company has decreased in 2008 due to increase in manufacturing
expenses.
Net profit ratio is decreasing during the period 2010 to 2011 which may be due to
increase in cost of goods sold.
Debt – equity ratio is almost satisfactory during all the years from the year 2007 to the
year 2011.
Working capital turnover ratio is increasing year by year which shows improvement in
the efficient utilization of working capital by the management.
SUGGESTIONS
OWM should finance a major portion of its requirement of working capital short term sources of finance as they are cheaper than the long term sources .It is financing a part of its working capital from long term sources of finance as it is cleared from the fixed assets to total long term fund ratio.
The Company is not adopting proper inventory systems like A.B.C analysis, V.E.D analysis etc. This inventory system can make the inventory management more result oriented .Since ,inventory covers the major portion of OWM’S current assets; it should be given prime attention.
The company should do proper Cost-to-Benefit analysis before purchasing the raw material i.e. wool for following months in the light of its storage cost, current prices, estimated future prices, further demand etc. along with the opportunity cost of holding such inventory.
The short term liquidity of the firm is not satisfactory as it is clear from the quick ratio .The company should immediate steps towards its improvements.
The surplus funds of the unit should be invested in some short marketable securities , rather than providing it to its subsidiary free of cost, to improve profitability along with the liquidity.
The company should reduce its production cycle to decrease its working capital requirements. As OWM does its production on the job basis , it should not be difficult for the company to reduce this
CONCLUSION
OWM has opted for a moderate overall working capital policy. This suggests that it is risk
averse. It wants a reasonable profit with a reasonable amount of risk. If it goes in for an
aggressive policy the profits generates could be high but accompanies with the high level of
profits will come high level of risks, which they feel is not appropriate. Since with this policy the
profit is being generated are substantially high a change in the working capital policy is not
called for.
On analyzing the operating cycle it has been found that operating cycle has increased by
approximately 48% as that of previous year. The operating cycle can be reduced to a greater
degree by trying to get a reduction in the raw material conversion period.
Since OWM produces only therefore the inventory requirement for the following months can be
accurately forecasted. Since, the raw material i.e. cotton and wool are a seasonal crop, it should
be stored for following months by analyzing the benefit of storing it, the storage cost associated
with, wool prices, its availability and also further requirements of the company as per its order.
Every month if forecast is made accordingly and order is placed, it would help in bringing down
the time required in the raw material storage period.
BIBLIOGRAPHY
Books:
Khan M.Y. and Jain P.K., Financial management, Tata Mc-Graw Hill (P)
Limited, New Delhi
Sharma Gupta, Management Accounting, Kalyani Publishers
REFERANCES
MR R.M SOOD (FINANCE CONTROLLER)
MR R.C KAUSHAL(ACCOUNT MANAGER)
Website
www.google.com
www.ask.com
www.wikipedia.com
www.owmnahar.com
www.owmnahar.in
