A STUDY ON WORKING CAPITAL MANAGEMENT OF

NHC
A Project Report Submitted by
LINSON LUKOSE
(Reg. No: 125900020)

SUBMITTED TO MANGALORE UNIVERSITY

IN PARTIAL FULFILMENT
OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
With Specialization in
FINANCE

Under the Valuable Guidance of

Internal Guide
External Guide
MR

MR. G.S.SUBRHMONYA

K.S. UNNIKRISHNAN
ASSOCIATE PROFESSOR

BRANCH MANAGER

SRINIVAS SCHOOL
OF MANAGEMENT
MUKKA, MANGALORE-574 146
2013- 2014

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DECLARATION

I LINSON LUKOSE, bearing Reg. No: 125900020 hereby declare that

this

project

report

entitled

STUDY

ON

WORKING

CAPITAL

MANAGEMENT OF NAGARJUNA HERBAL CONCENTRATES LTD. has

been prepared by me, under the guidance of

Mr. G.S.Subrhmonya,

Associate Professor, Department of Management studies, Srinivas School of

management, for the partial fulfillment of the requirements for the award of
the Degree of Master of Business Administration during the academic year
2013-1014.
I also declare that this project report is my original and independent
work and has not been submitted to any other Universities or institutes for
the award of any other Degree, Diploma, Fellowship or any similar titles. The
project work does not involve any plagiarism in any form and wherever the
contents have been drawn from the literature/ resources, due credit has
been given to the authors.

Place:

Mangalore

LINSON LUKOSE
Date

125900020

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ACKNOWLEDGEMENT
I am elated to present my report on A STUDY ON WORKING CAPITAL

MANAGEMENT OF NAGARJUNA HERBAL CONCENTRATES LTD I

deem it a privilege to acknowledge to all those who have directly helped me in the
preparation of this field study.
I would like to thank our principal Dr. Shreeprakash B, Srinivas School of Management,
Mukka for giving me an opportunity to carry out this study.
I would like to express my sincere gratitude to Mr. K. S. Unnikrishnan, HR manager
Nagarjuna Herbal Concentrates Ltd, Thodupuzha

for his valuable

suggestions, guidance and encouragement during the preparation of this project.

My special thanks to Dr. Vishnu Prasanna K. N, Professor and H.O.D of MBA
department for his encouragement and support to complete the project.
I express my utmost gratitude to the project guide,

Mr. G. S. Subrhmonya, Associate

Professor, faculty of MBA department who has guided me in carrying out this project.
I thank all the employees of

Ngarjuna Herbal Concentrates Ltd, Thodupuzha

for their support and co-operation.

Last but not least I thank my parents, my relatives and friends, without whose support and
encouragement this project study would not have been possible.

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Place:

LINSON LUKOSE

Date:

Reg No:12590002

CONTENTS

SL.NO.

CHAPTER-1

TOPIC

PAGE NO.

INTRODUCTION
1-16

INTRODUCTION TO THE TOPIC

COMPANY PROFILE

17-23

STATEMENT OF THE PROBLEM

23

SCOPE OF THE STUDY

23

OBJECTIVES OF THE STUDY

23

REVIEW OF LITERATURE

24-26

CHAPTER-2

RESEARCH METHODOLOGY
LIMITATION OF THE STUDY

27-31

CHAPTER-3

RESULTS , ANALYSIS
& INTERPRETATION

32-70

CHAPTER-4

FINDINGS , SUGGESTIONS

71-75

& CONCLUSION

BIBLIOGRAPHY & REFERENCES

76-77

ANNEXURE
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LIST OF TABLES
Table No.

Title

3.1.1

Schedule Of Changes In Working Capital On

2009 & 2010

3.1.2

Schedule Of Changes In Working Capital On

2010 & 2011

3.1.3

Schedule Of Changes In Working Capital On

2011 & 2012

3.1.4

Schedule Of Changes In Working Capital On

2012 & 2013

3.2.1

Changes In Gross Working Capital

3.2.2

Inventories To Gross Working Capital Ratio

3.2.3

Sundry Debtors To Gross Working Capital Ratio

3.2.4

Page No.

Cash And Bank Balance To Gross Working

Capital Ratio

3.2.5

Other Current Assets To Gross Working Capital

Ratio

3.2.6

Loan And Advances To Gross Working Capital

Ratio

3.2.7

Changes In Current Liabilities

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3.2.8

Sundry Creditors To Current Liabilities

3.2.9

Other Current Liabilities To Current Liabilities

3.2.10

Net Working Capital

3.2.11

Current Ratio

3.2.12

Quick Ratio

3.2.13

Absolute Liquid Ratio

3.2.14

Inventory Turnover Ratio

3.2.15

Inventory Holding Period

3.2.16

Inventory To Working Capital Ratio

3.2.17

Debtors Turnover Ratio

3.2.18

Debt Collection Period

3.2.19

Credit Turnover Ratio

3.2.20

Average Payment Period

3.2.21

Working Capital Turnover Ratio

3.2.22

Fixed Assets Turnover Ratio

3.2.23

Current Asset Turnover Ratio

3.2.24

Working Capital To Total Asset Ratio

3.2.25

Current Assets To Total Assets Ratio

3.2.26

Cash To Sales Ratio

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3.2.27

Cash To Current Liability Ratio

3.2.28

Cash Turnover Ratio

3.2.29

Proprietary Ratio

3.3.1

Calculation Of Days Inventory Outstanding

(DIO)

3.3.2

Calculation Of Days Sales Outstanding (DSO)

3.3.3

Calculation Of Days Payable Outstanding

(DPO)

3.3.4

Calculation Of Cash Conversion Cycle (CCC)

3.4.1

Trend Of Current Assets

3.4.2

Trend Of Inventories

3.4.3

Trend Of Sundry Debtors

3.4.4

Trend Of Cash & Bank Balance

3.4.5

Trend Of Other Current Assets

3.4.6

Trend Of Loans & Advances

3.4.7

Trend Of Current Liabilities

3.4.8

Trend Of Sundry Creditors

3.4.9

Trend Of Other Current Liabilities

3.4.10

Trend Of Net Working Capital

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LIST OF CHART
Table No.

Title

3.2.1

Changes In Gross Working Capital

3.2.2

Inventories To Gross Working Capital Ratio

3.2.3

Sundry Debtors To Gross Working Capital Ratio

3.2.4

Cash And Bank Balance To Gross Working

Capital Ratio

3.2.5

Other Current Assets To Gross Working Capital

Ratio

3.2.6

Loan And Advances To Gross Working Capital

Ratio

3.2.7

Changes In Current Liabilities

3.2.8

Sundry Creditors To Current Liabilities

3.2.9

Other Current Liabilities To Current Liabilities

3.2.10

Net Working Capital

3.2.11

Current Ratio

3.2.12

Quick Ratio

3.2.13

Absolute Liquid Ratio

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3.2.14

Inventory Turnover Ratio

3.2.15

Inventory Holding Period

3.2.16

Inventory To Working Capital Ratio

3.2.17

Debtors Turnover Ratio

3.2.18

Debt Collection Period

3.2.19

Credit Turnover Ratio

3.2.20

Average Payment Period

3.2.21

Working Capital Turnover Ratio

3.2.22

Fixed Assets Turnover Ratio

3.2.23

Current Asset Turnover Ratio

3.2.24

Working Capital To Total Asset Ratio

3.2.25

Current Assets To Total Assets Ratio

3.2.26

Cash To Sales Ratio

3.2.27

Cash To Current Liability Ratio

3.2.28

Cash Turnover Ratio

3.2.29

Proprietary Ratio

3.3.1

Representation Of Days Inventory Outstanding

(DIO)

3.3.2

Representation Of Days Sales Outstanding

(DSO)

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3.3.3

Representation Of Days Payable Outstanding

(DPO)

3.3.4

Representation Of Cash Conversion Cycle

(CCC)

3.4.1

Trend Of Current Assets

3.4.2

Trend Of Inventories

3.4.3

Trend Of Sundry Debtors

3.4.4

Trend Of Cash & Bank Balance

3.4.5

Trend Of Other Current Assets

3.4.6

Trend Of Loans & Advances

3.4.7

Trend Of Current Liabilities

3.4.8

Trend Of Sundry Creditors

3.4.9

Trend Of Other Current Liabilities

3.4.10

Trend Of Net Working Capital

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CHAPTER-1

INTRODUCTION

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1.1

INTRODUCTION
The developing economies are generally facing with the problem inefficient

utilization of resources available to them. Capital is the scarcest productive resources in such
economies and proper utilization of these resources promotes the rate of growth, cut down the
cost of production, and above all beef up the efficiency of the productive system. Hence,
purposeful harnessing of capital is of paramount importance in any development policy of such
economies. The total capital of a country comprises fixed capital and working capital.
Working capital is regarded as one of the conditioning factors in long run operations
of a firm which is often inclined to treat it as an issue of short run analysis and decision making.
It is not only influence earning capacity of the business under taking but also determined largely
their scope and content of operations. The management of working capital is concerned with the
management of the firms current accounts, which include current asset and current liabilities.
The study was conducted at Nagarjuna Herbals Concentrates Ltd. Thodupuzha. The study
focuses on working capital management of the company.

1.2 INTRODUCTION TO THE TOPIC

Working capital refers to the investment by the company in short terms assets such as
cash, marketable securities. Net current assets or net working capital refers to the current assets
less current liabilities.
Working capital is that part of companys capital which is used for purchasing raw
material and involve in sundry debtors. We all know that current assets are very important for
proper working of fixed assets. Suppose, if you have invested your money to purchase machines
of company and if you have not any more money to buy raw material, then your machinery will
no use for any production without raw material. From this example, you can understand that
working capital is very useful for operating any business organization. We can also take one
more liquid item of current assets that is cash. If you have not cash in hand, then you cannot pay
for different expenses of company, and at that time, your many business works may delay for not

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paying certain expenses. If we define working capital in very simple form, then we can say that
working capital is the excess of current assets over current liabilities.
Definition of Working Capital:
" Working capital is an excess of current assets over current liabilities. In other words, the
amount of current assets which is more than current liabilities is known as Working
Capital. If current liabilities are nil then, working capital will equal to current assets. Working
capital shows strength of business in short period of time. If a company have some amount in the
form of working capital, it means Company have liquid assets, with this money company can
face every crises position in market. "
Definition of 'Working Capital Management':
A managerial accounting strategy focusing on maintaining efficient levels of both components of
working capital, current assets and current liabilities, in respect to each other. Working capital
management ensures a company has sufficient cash flow in order to meet its short-term
debt obligations and operating expenses.
FACTORS DETERMINING THE WORKING CAPITAL

Operating cycles: - in the case of trading concern operating cycle is the time required to
turn cash into inventories, inventories into amount receivable and into cash. In the case of
financing firm the operating cycle include the length of time taken for the conversation of
cash into debtors and conversion of debtors into cash

Sales volume: - this is another important factor that affects or influences the amount of
working capital requirements. Adequate stocks are required to meet the operational
activities of the business. The more the sales volume, the more would be the size of
working capital.

Seasonal factors: - these are seasonal factors like fluctuation in demand for their
products. Certain industries manufacture and sell goods only during certain seasons. Such
concern require large amount of working capital during the season. For almost all firms
the fluctuation affects the level of working capital to be maintained

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Policies of the firm: - the policies of the firm affect working capital requirements. In
case of firm decides to grant two months credit to their client instead of existing one
month credit, it leads to higher level of investments and working capital. Working capital
requirements also influenced by the policies relating to depreciation, dividends etc.

Technological changes: - technological changes are also cause for changes in the level of
working capital. If a new process emerges as a result of technological developments,
which shortens the operating cycle. It need for working capital and vice versa.

Operating efficiency: - the operating efficiency of the management is also an important

determinant of the level of working capital. The management can also contribute to a
sound working capital position through its operating efficiency; though the management
cannot control the rise in prices it can ensure the efficient utilization of resources.

Price level changes: - changes in the price level also affect the requirement of working
capital. Rising price necessities the use of more funds for maintaining an existing level of
activity. The effect of rising prices is that a higher level of working capital is needed

Credit policy: - the credit policy retains to sales and purchases also affect the working
capital. The credit policy influences the requirement of working capital in two ways:
Through credit terms granted by the firm to its consumer/buyer of the goods
Credit terms available to the firm from its creditors.

The credit terms grants to customers have bearing on the magnitude of working capital by
determining the level of book debts. The credit sale results in higher book debts. A higher book
debt means working capital.

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CLASSIFICATION OF WORKING CAPITAL

working capital

on the basis of time

on the basis of concept

Gross working
capital
Net working
capital

variable

permanent
working capital

Seasonal working

working
capital

Special working
Initial

Regular working

working
Classification of working capital
Working capital may be classified in two ways, on the basis of concept and on the basis of time.
A. On the basis of concept
Gross working capital
Net working capital.
1. Net working capital

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This is the difference between current assets and current liabilities; current liabilities are
expected to mature with in an accounting year and include creditors, bills payable and
outstanding expenses.
Net working capital =current assets-current liabilities
2. Gross working capital
This refers to the firms investment in current assets. Current assets are the assets which can be
converted into cash within a short period say an accounting year. Current assets include cash,
debtors, bills receivables, short term securities
B. on the basis of time

Permanent working capital

Variable working capital

1. Permanent working capital

Permanent or fixed working capital is the minimum amount which is required to
ensure effective utilization of fixed facilities and for maintaining the circulation of current assets.
There is always a minimum level of current assets which is continuously required by the
enterprise to carry out its normal business operations. Such working capital grows as the size of
the business grows. This can be again classified into two as initial working capital and regular
working capital
A.

Initial working capital

At its inception and during the formative period of its operations a company must have enough
cash fund to meet its obligations. The need for initial working capital for every company to
consolidate its position
B. Regular working capital
Regular working capital is the minimum amount of liquid cash to be maintained in the business
to keep up the circulation of the flow of cash to inventories, to receivable and the receivables
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back into cash. Reserve margin is the excess of working capital maintained in addition to the
regular working capital for meeting unforeseen contingencies.

2. Variable working capital

Temporary or variable working capital fund represents additional assets required at different
times during the operation year. Such working capital varies with seasonal and cyclical variation
in business. It can be further classified as seasonal and special working capital.
A. Seasonal working capital
The amount of working capital which is required to meet the seasonal demand of busy product is
called seasonal working capital.
B. Special working capital
Special working capital is required to meet the extra ordinary needs and consequences like strike,
lock outs etc. Temporary working capital differs from permanent working capital in the sense
that it is required for short period and cannot be permanently employed in the business.
SOURCES OF WORKING CAPITAL
1. Internal sources
2. External sources

Internal sources
a. Retained earnings
b. Sale of fixed assets
c. Depreciation fund
d. Using the recourse meant for taxation

External sources
a. Bank credit

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b. Customer advances
c. Short term public deposits
d. Share Capital
e. Trade credit
f. Outstanding expenses

1.3 COMPANY PROFILE

INTRODUCTION
Nagarjuna Herbal Concentrates Ltd is a private limited company engaged in the
production and marketing of all kind of Ayurvedic medicines and popularizing the indigenous
system of medicines in our country, is located at thodupuzha. The construction of the company
started in the year 1985, and commissioned in October 1989.In the beginning company has only
87 agencies but now the authorized agencies are more than 930 and it is spreading throughout the
state. At present there are 1000 direct employees and 2000 indirect employees. The company has
a product range of 650 medicines. The Kerala State Industrial Development Corporation Ltd and
Kerala State Financial interest in the company.

1.3.1 NAGARJUNA AYURVEDIC GROUP

Nagarjuna is a paradigm shift among Ayurvedic companies in that Nagarjuna was the
first corporate House in the Ayurvedic sector in Kerala as against the family owned Ayurvedic
organizations. Beginning commercial production in 1986, Nagarjuna has today notched up a preeminent position among frontline Ayurvedic companies, marketing a broad spectrum of
Ayurvedic medicines and has achieved commendable sales with national & international
presence.

The Enterpreneur
Nagarjuna was established in the year 1989 by Sri V.G. Devadas Namboodiripad, an
entrepreneur, with a few experts in the Ayurveda field in the board of the management.

The Vision
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The vision of Nagarjuna is to the best solution provider in healthcare through Ayurveda.
In translating this vision into reality, its approach is to bring about synthesis of tradition and
modernity. All that Nagarjuna does is rooted in traditional values and principles of Ayurveda and
at the same time fulfils the requirement of modern ethos, particularly in convenience and form.
This is how Nagarjuna position itself in the mind of the consume.

The FIRST
1. Nagarjuna has several first to its credit. Some there are: The first to create synergy
between Ayurvedic & Ashtavaidya school of thought in ayurveda.
2. The first to take the franchise model of service health needs, on a wide scale, across the
state of Kerala, particularly to the rural areas.
3. The first to provide consistent focus on R & D activities in ayurveda sector in Kerala and
to establish a full-fledged facility for the same.
4. The first to create widespread awareness of medical plants among people and to make its
cultivation a popular as well as income generating programme.
5. The first to use modern promotional methods such as TV advertising on a large scale to
propagate Ayurveda.

1.3.2 The Group

Nagarjuna Ayurvedic Group presently consists the following organization
Nagarjuna Herbal Concentrates Ltd (NHCL)
NHCL the flagship company and the GMP (Goods Manufacturing Process) certified
manufacturing facility, which began commercial production in 1989 is situated at
Alakode Panchayat, Thodupzha in Kerala

Nagarjuna Ayurvedic Center Ltd (NACL)

NACL is the hospital providing authentic Ayurvedic treatments situated on the banks
of periyar at kalady in Kerala, in an atmosphere of tranquility and scenic charm.

NagarjunaAurvedic Retreat Ltd (NARL)

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A holistic healthcare center which provides alternative therapies besides Ayurveda
including classes in Indian philosophy and culture, well supported by a well stocked
reference library. Began operation in 2006 at Moolamkuzhi, east of Malayatoor in
Kerala.

Nagarjuna Research Foundation (NRF)

NRF is the charitable trust whose trustees are eminent personalities in society.
Besides research activities, NRF has done Yeman service in popularizing the cultivation
of MEDICINAL PLANTS, through various activities such as planting and distribution
of saplings imparting technical advice, conducting class and giving awards yearly
(Oushadhamitram Award). So far it has distributed over 25 lakhs sapling across
Kerala.

Nagarjuna Social Service Society (NSSS)

NSSS is an NGO established specially to carry out the promotional activities
related medical plants begun by NRF.

NgarjunaAurvedic Institute (NAI)

NAI a charitable trust, established to conduct educational program to a variety of
target groups, including international students.

1.3.3 ISO Certificate

Nagarjuna Herbal Concentrates Ltd. has received the ISO 9001:2000 certification. The
certificate has been issued by INTERTEK Quality Register International. It had received the
GMP certification earlier.

1.3.4 Products
There are Generic/Traditional medicines such as Kashayam, Arishtams, Lehyams, etc.
numbering over 500. There are also Proprietary / Branded products developed by Nagargunas
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R&D. There are as many 31 branded ethical products. Over The Counter (OTC) Products,
numbering over 20 are essential household medicines, such as Headache Balm, Hair oil, Brain
Nourisher remedies for throat pain and irritation for over all nourishment and validity and so on.
To suit modern requirements, liquid kashayams (27 product) have been converted to kashayam
capsules. Nagarjuna has more that 500 products,

1.3.5 Marketing
These products are marked through a wide network of over 800 franchise agencies in
Kerala over 150 outside the state. In facts Nagarjuna was the first to establish such a wide
distribution network in the Aurvedic sector particularly in the rural areas outside Kerala,
Nagarjuna has presence in as many as 17 states such as Karnataka, Andhra Pradesh, Tamil Nadu,
Goa, Orissa, Maharashtra, Gujarath and Delhi as well as joint ventures in many North Indian
States.

1.3.6 Exports
Nagarjuna overseas presence is in countries such as UK, USA, Switzerland, Holland,
Australia, Italy, UAE, Singapore, West Indies, Hungry and Bahrain, Russian and Saudi Arabia.

1.3.7 Nagarjuna R & D

Right from inception, Nagarjuna has focused on R&D as essential for Ayurveda in the
modern world situated in Alakode, Thodupuzha some of its activities are standardization of
Aurvedic medicines and new product development. Recently Nagarjuna R&D acquired atomic
absorption Spectrophrometer for the analysis of heavy metals like Arsenic, Mercury, Nickel,
Cadmium and Lead. Drugs controller Kerala has approved the quality control lab for testing of
crude drugs (raw herbs) for their authenticity and purity. In 2004 this approval has been extended
to finished products as well.

1.3.8 Medical Plants

Under the agencies of Nagarjuna Research Foundation, Nagarjuna had initiated
ongoing programs for promoting the cultivation of medical plants and trees widespread
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distribution of plants saplings, providing technical advice to farmers conducting classes at
schools and colleges institution of an yearly award (Oushadhamithram Award) to the best
farmer of medical plants etc., are some of activities under the program. Within the last 11 year,
over 25 lakhs saplings to the tribals at Nachar Watershed area in Idukki district in Kerala. The
medical plants programs have been taken over by NSSS.

1.3.9 Treatment
The demonstrative example of its treatment approach and practices is at its best in the
Ayurvedic Treatment Center at Kalady, situated on the Bank of river Periyar in an atmosphere
that exudes the natural charm of a trees-filled environment. The center and all the infrastructural
facilities for stay during treatment, a cafeteria serving Vegetarian cuisine and all the
infrastructural facilities and personnel for providing serious Ayurvedic treatments strictly as per
traditional protocol Nagarjuna is treatment centers are also preferred destination for westerners
and persons from other states seeking serious Ayurvedic treatment. Their number is increasing
day by day. The centre has won the coveted GREENLEAF certification from the Government
of Kerala, awarded to those possible manner.
1.3.10 Education
Nagarjuna conducts a 4 month intensive Panchakarma Therapist Training course
imparting theoretical and practical Ayurvedic education at Kalady begun 2 year ago it has
become a successful course. A reorientation programme on Kerala Ayurveda is also given to
physicians of other disciplines from other states, who desire to know more about Ayurveda as
practiced in Kerala. Plans are a foot to extend the educational programmes of different categories
to a variety of target groups including international students. These programmes will be
conducted by Nagarjuna Ayurvedic Institute.
PROMOTER OF THE COMPANY
PROMOTER Sri. V.G. Devdas Namboodiripad

OWNERSHIP PATTERN
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Authorised share capital

- Rs. 50000000

Issued, subscribed & paid up Capital - Rs. 26480000

Earnings per share

- Rs. 1.68

Reserves and surplus

- Rs. 30218000

(Of the above shares 180772 shares has been issued as fully paid up bonus shares)
COMPETITORS INFORMATION
The main competitors against Nagarjuna Herbal concentrates are the following;

Kottackal Arya Vaidhya sala.

Vydyaratnam Ayurveda pharmacy
Kerala Ayurveda pharmacy
Sitaram ayurveda pharmacy
SD Pharmacy

1.3.11 MCKINSEY 7S MODEL

The 7s model is a tool used for managerial analysis and actions that provide a structure with
which a company is considered as a whole, so that the organizations problems may be diagnosed
and strategy may be developed and implemented.
The 7s frame work was developed by a consultant company called McKinsey's in the late 1970s
to help the managers address the difficulties of organizational change

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1. STRATEGY
Nagarjuna aims at cost reduction and higher profitability through customer satisfaction. For
reducing cost, company follows material control system. Better and proper control of material and
appropriate allocation leads reduction in cost and satisfy the customer with quality products to
meet their expectations is the policy followed by the company. Quality control starts from its
inputs. So, Nagarjuna adopt quality assurance method to maintain quality of the product.
Personnel department of Nagarjuna tries to maintain the strategy of training and development
of employees. Company training such as coaching in plant, training at other units, customer
training, induction training, external training etc. There are mainly three types of strategy;
Business strategy
Continuously assimilate, analyze and apply knowledge to power superior financial
Decisions.
Focus on core competence in medical services.
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De risk through multiple products and diverse revenue streams.
Customer strategy
Enhance customer retention through quality research and service.
Efficiently deploy cutting-edge technology.
Create a wide, multi-modal network to serve customers at one stop.
People strategy
Attract exceptionally talented and driven people.
Ensure a conducive environment.

2. SRUCTURE
Managing Director
Strategy represents the structure
of the organization. A business need to be organized in a

specified form of shape that is generally refers to as organization structure. Organizations are
Executive Officer

structured in a variety of ways, dependent on their objectives and culture. The structure of the
company often indicates the way it operates and performs.
C.E.O

The design of an organization structure is a critical task of top management of an

organization. It refers to organizational arrangements & relationship. It prescribes formal
relationship
position and activities. Arrangements about reporting
relationship,
GM
Marketingamong various
Manager Finance
Manager (QC) Manager HR
Production Manager

how an organization member is to communicate with other members. Nagarjuna organization

structure is flexible enough to counter balance of external & internal environment. This will help

Manager (R&D)
Marketing Manager Kerala
Manager Marketing(outside)
Production Officer
Finance
in the smooth working of theAGM
company.
AGMHR Legal Advisor

ORGANISATIONAL STRUCTURE;
Asst. Manager
Personnel Officer
Chemist
Production Controller
Asst. MGR
Executive Regional Manager
Senior Commercial Officer
Supervisor
Executive
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Commercial Officer

Manager (QC)

HR Executive

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3. SYSTEM
System is a flow of activities involved in the daily operation of business. They refer to the
procedures, process and routines that are used to manage the organization and characterize how
important work is to be done. System in 7s framework refers to the rules, regulations and
procedures both formal & informal that complement the organization structure. It includes
production planning, control systems capital budgeting system. The system of

Nagarjuna

includes:
100% management information system.
The company has 100% management information system. It helps the company
very much in their day-to- day business administration. It also helps the company
to achive their target more effectively.
The office of Nagarjuna is fully automated i. e; they are looking forward for a
paper less office.
Reviews and meetings:

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Nagarjuna conducts periodical meetings every month regarding the performance of
company and also conducts meeting when ever necessary. In the branch level the branch
manager conducts meetings.
Internet and Technology:
Nagarjuna provides its employees the internet facility and technological support
to access and to share the information among as and when they require it. It facilitates better
communication among the employees. And also
Providing prompt and proactive customer services
Ensuring high quality services and products.
Motivating every new in the organization for active participation toward
continuous improvement in activities.

4. STYLE
Style refers to the way the management behaves and collectively spends time to achieve
organizational goal. Workers participation in management style is following in Nagarjuna. Various
council seen as works committee, safety committee, canteen committee and welfare committee are
established and are fully represented by the employees. In this committee worker are given a
chance to voice their opinion.
Style of leadership in the Nagarjuna is democratic leadership style. It is associated with team
building interpersonal leadership and human skill. Regarding the style of production Nagarjuna
adopted the policy of quality assurance method. It helps the company for ensuring quality of its
product and they are bringing the reputation to the company. Nagarjuna got Government certificate
ISO 9001;2000 for its quality.
Management style:
More a matter of what managers do than what they say, what are they focusing on. In
India Info line the leadership style followed is democratic group effort. Here all employees play an
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active part in giving suggestions for decision making. All major decision is taken in the branch
concerned. The managing director or the managers of the concerned departments and branches will
take the major decision. In Nagarjuna providing the incentives to the employees, those who are
reaching targets and promote them to the higher levels.
5. STAFF
The staff of Mckinsys 7S framework includes the human resource management, rewards and
recognition. It refers the employees and their general capabilities. Organization are made up of
human and its the people who makes the real difference to the success of the organization in the
increasingly knowledge based society. The main strength of Nagarjuna is its research teams
efficiency and team work of the employees. Staff of Nagarjuna include all functional level
Managers, Departmental Heads, Branch Managers, Regional Managers & Operating Employees.
Emphasis on hiring the best staff, providing them with rigorous training and monitoring support,
and this forms the basis of this organization strategy and competitive advantage over their
competitors.

6. SKILLS
Skills are considered as one of the most attributes (or) capacities of an organization. The
term skills include those characters which most people uses to describe a company. They are
recruiting the skilled candidates through direct interview and other sources, and the company
also providing training to these candidates for the better results, which is done by the
supervisors. The company has the skills needed to carry out the company strategy like.

A good specialized knowledge about the products and to serve the clients better.
High levels of specialization in communication.
Ability to convert the prospect into customers.
Apart from this the company follows on job training.

At the executors level where are improved skills by employees in areas like communication,
leadership, administration, time management, computer knowledge, presentation, team building
and also they are trained under various other aspects like self development.The HR department

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identifies several areas for continuously updating technical/professional skills for employees and
brings out attitudinal- change in developing good work culture in all areas.
7. SHARED VALUES
Shared values are the core values of the company. And also guiding concepts, values and
beliefs of the company. It also includes the long term vision of the company. It refer to a set of
values & aspirations that goes beyond the conventional formal statement of corporate objectives.
All members of the organization share some common fundamental ideas or guiding concepts
around which the company is built. These values and common goal keep the employees work
towards a common destination as a coherent team and are important to keep the team spirit alive.
Consider the employees as the key resources of the key resources of the organization and
provide assistance
Quality of the product.
Customer satisfaction rather than profit maximization.

SWOT ANALYSIS
Strength:
o Since Nagarjuna products are manufactured as per strict guidelines, they are able to make
high quality products.
o Company has a policy of continuous development and innovation in products that enables
it to maintain high marketing share.
o Frequent meeting between the owners and employers helps to build a good employeremployee relationship.
o Efficient R&D departments to develop new and efficient products.
o Excellent brand image and good costumer relationship
o Wide variety of products
o Good relationship between management and trade union
o Good customer satisfaction index
Weakness:
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o Lack of enough advertisement
o Low number of production and manufacturing units
o Lack of enough medicinal gardens
Opportunities:
o
o
o
o
o

Growing market demand.

Expanding its distribution area
Link with tourism area
Development of its own medicinal plants garden
Scope for innovation of Research & Development

Threats:
o
o
o
o
o

Transportation problems.
Entry of duplicates
Scarcity of raw materials
Cut throat Competition (e.g.: Kottakkal, Oushadhi, Dhanwandhari)
Customers may substitute other products

1.4 STATEMENT OF THE PROBLEM

Working Capital shortage or insufficiency or last minute arrangement for working
capital needs is a common phenomenon in Nagarjuna Herbal Concentrates Ltd. How to
streamline this issue is the main statement of problem of this project. The present technique
they use for management of working capital and its true efficiency has been analyzed in this
project.

1.5 SCOPE OF THE STUDY

This study has been carried out in Nagarjuna Herbal Concentrates Ltd in their Kerala plant.
Also the study is made on the basis of the financial statements given by the company and as
such, the conclusions shall be purely on the basis of the correctness of the statements. Though
some personal discussions with the managers and some employees of the Accounts department
have given some inputs to this study, the quality and quantity of the information revealed by
them affects the study. Also the period considered is of five years (2008-2013) and the
conclusions drawn may not be applicable for future due to changes in market conditions.
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1.6 OBJECTIVES OF THE STUDY
1. To study the management of working capital in NHCL.
2. To find out solutions to reduce shortage of working capital in the short term.
3. To find a suitable method or methods that can help manage working capital needs in a
better way.
4. How cost of working capital be reduced by managing the various sources of working
capital

1.7 REVIEW OF LITERATURE

SEYED MOHAMMAD ALAVINASA (2013) in his paper titled "Studying
the relationship between working capital management and
profitability of listed companies in Tehran stock exchange" stated
that working Capital is one of the most important trade factor and largest
instrument for attracting the profit. Each firm should have capital in order to
access profit from its trade. Capital refers to all financial resources that trade
unit consumes it and in this connection, financial management determines
the framework of the relationship between capital and firm.
Pratibha Jain and Kshitija Chaugule (2014) in their paper titled
"WORKING CAPITAL STRUCTURE AND LIQUIDITY ANALYSIS OF INDIAN
TEXTILES INDUSTRY" stated that an optimal working capital management
is expected to contribute positively to the creation of firm value. Improper
management of Working capital, that is, too much or too low working capital
may suffer firms, so an optimum level of working capital is the key to a
smooth inflow of profit. In this paper we investigate the Working capital
structure, working capital turnover position and liquidity analysis with the
help of different ratios. From our study we found that Bombay Dyeing
reflected good working capital structure and liquidity position
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HASAN AGAN KARADUMAN (2010) in his paper titled "EFFECTS OF
WORKING CAPITAL MANAGEMENT ON PROFITABILITY: THE CASE FOR
SELECTED COMPANIES IN THE ISTANBUL STOCK EXCHANGE" states
that Working capital management is one of the essential determinants of
firms market value because it directly affects profitability. Hence, firms
should establish a fine balance between profitability and risk when it comes
to managing working capital. This paper mainly aims to provide some
empirical evidence on the effects of working capital management on the
profitability of selected companies in the Istanbul Stock Exchange for the
period of 2005-2008.
Srinivas K.T (2010) in his paper titled "A STUDY ON WORKING
CAPITAL MANAGEMENT THROUGH RATIO ANALYSIS WITH REFERENCE
TO KARNATAKA POWER CORPORATION LIMITED" determines that
Working capital is nerve system of any business. Without proper working
capital management company cannot achieve its objectives and not possible
to maintain financial soundness. So in this perspective present study is
undertaken to study working capital management through ratio analysis at
Karnataka Power Corporation limited. From the present study it is found that
company financial position was seeing to be sound because the company
tries to increase its production and also net profit.
TENDAI ZAWAIRA ( 2014) in his paper titled " THE ASSOCIATION
BETWEEN WORKING CAPITAL MANAGEMENT AND PROFITABILITY OF
NON-FINANCIAL COMPANIES LISTED ON THE ZIMBABWE STOCK
EXCHANGE" determines main purpose of this study was to determine the
impact of different components of working capital management on
profitability of firms listed on the Zimbabwe Stock Exchange during the
dollarization era. it used to find out quick ratio, current asset to total asset
ratio, current liabilities to total asset ratio, debt ratio and age of company.
Therefore Zimbabwean firms should pay more attention to the management
of liquidity and payables.
VENKATA.N.RAMAN (2013) in his paper titled "IMPACT OF
RECEIVABLES MANAGEMENT ON WORKING CAPITAL AND
PROFITABILITY: A STUDY ON SELECT CEMENT COMPANIES IN INDIA"
In this paper an attempt is made to study the impact on Management of
Working Capital and Profitability. The ratios which highlight the efficiency of
working capital management viz., Current Assets Ratio, Total Assets Ratio,
Sales Ratio, working capital Turnover Ratio and Profitability Ratio, have been
computed to know the impact on working capital and profitability. Working
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capital and profitability were considered as dependent variables. The
investigation reveals that the receivable management across cement
industry is efficient and showing significant impact.
Singh Jasmer (2013) in his paper titled " SINGH JASMER A STUDY ON
WORKING CAPITAL MANAGEMENT OF TATA STEEL LTD" according to
his point of view Efficient management of Working Capital is very important
for the success of an enterprise. So, here an attempt is made by me to study
the working capital management of the selected unit i.e. TATA STEEL LTD.
From the financial management point of view, capital in broader sense can
be divided into two main categories- fixed capital and working capital. After
this study the research finds that the working capital position of the Tata
Steel Ltd. is not satisfactory.
MADHAVI.K (2014) in his paper titled "WORKING CAPITAL
MANAGEMENT OF PAPER MILLS" determines that A well designed and
implemented working capital management has a significant contribution for
firms profitability as well as to maintain liquidity powers. The purpose of this
study is to assess working capital adequacy and its impact on profitability; to
investigate the relationship between profitability and liquidity of firms. The
management of working capital is important to the financial health of
business of all sizes.
AGHA HINA (2014) in his paper titled " IMPACT OF WORKING CAPITAL
MANAGEMENT ON PROFITABILITY" stated that the main purpose of this
study is to empirically test the impact of working capital management on
profitability .the author collected secondary data to find out variable of
return on assets ratio to measure the profitability of company and variables
of account receivable turnover, creditors turnover, inventory turnover and
current ratio as working capital management criteria. The results of the
research show that there is a significant impact of the working capital
management on profitability of company
JENNY KOK (2012) in his paper titled " FINANCIAL SUPPLY CHAIN
MANAGEMENT CHALLENGES AND OBSTACLES" according to his paper
the focus of the research is on finding a way a Small and Medium sized
Enterprise can improve its WCM. A Case Study research method is used,
because a rich understanding of the context of the research is gained. The
primary data of this research is obtained via questionnaires whereas the
secondary data is collected and gathered via databases. Research has shown

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that there are big differences in the way working capital is optimized
between SMEs.
Sabri Bahjat Tamer ( 2012) in "The impact of working capital on
the value of the company in light of differing size, growth, and debt"
this study investigates the potential effect of the working capital
management on the value of the industrial companies in Jordan, by studying
determinants (company size, company growth, leverage) that affect
company value measured. To achieve the objectives of the study different
profitability ratios are used a sample constituted by forty-one (41) industrial
companies was selected.
M. NAKAMURA ALOMBINI (2011) in "KEY FACTORS IN WORKING
CAPITAL MANAGEMENT IN THE BRAZILIAN MARKET" he determines
that many studies have been conducted in corporate fianc regarding longterm investment and financing decisions. However, short-term asset
investments play a significant role in the balance sheet of companies. This
study used data from 2,976 Brazilian public companies from 2001 to 2008,
and found that debt level, size and growth rate can affect the working capital
management of companies.
Al. M Mamoun (2010) in "Working Capital Management and
Profitability: The Case of Industrial Firms in Jordan" he states the
study aims at examining the relationship between profitability and working
capital management measures for industrial companies listed on Amman
Stock Exchange. Therefore, efficient working capital management is
expected to enhance the profitability of these companies by trend analysis.
The results show that regardless of the level of profitability industrial
companies in Jordan pay their suppliers before collecting credit sales.
Sumaira Tufail (2011) in "Impact of Working Capital Management
on Profitability of Textile" he states that Working capital management
(WCM) is the management of short-term financing requirements of a firm
which includes maintaining optimum balance of working capital components
by using the cash efficiently for day-to-day operations. The main objectives
of this study are to examine and evaluate the working capital management
in ACC Limited, This also finds the relationship between Working Capital
Efficiency and Profitability, Profitability and Market ratios.
PRABHATH YADHAV KUMAR (2010) in "A Study on Working Capital
management in Public Enterprises" he defined that A well designed and
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implemented working capital management is expected to contribute
positively to the creation of a firms value. Those current assets are essential
for smooth business operations and proper utilization of fixed assets. The
study concentrates on the main components of working capital like inventory
management, accounts receivable management and cash management of
Public Enterprises. The tools used in this study includes ratio analysis and
trend analysis.
Preeti Singh (2012) in "ASSESSMENT OF WORKING CAPITAL AND
LIQUIDITY POSITION OF PUBLIC SECTOR STEEL ENTERPRISE IN
INDIA" he states the paper makes an assessment of management of
working capital, examines the adequacy observes the liquidity position and
areas of weakness and gives suggestions for the public sector Steel
enterprise in India. A weak liquidity position poses a threat to the solvency as
well as profitability of a firm and makes it unsafe and unsound. This research
paper analyses the liquidity management of SAIL and observes the liquidity
position and weakens.
Dr. S. Saravanan (2014) in "Research Paper Commerce A Study on
Working Capital Management of Cement Companies" he determines
that this level of working capital management serves as a check and
balances system to ensure that the amount of cash flowing into the business
is enough to sustain the companys operations. This study shows that it is an
ongoing process that must be evaluated using the current level of assets and
liabilities.
Valcemiro Nossa (2010) in "Working capital, profitability, liquidity
and solvency of healthcare insurance companies" he determines that
the purpose of this study is to analyze the adequacy of a working capital
management in terms of profitability, liquidity and solvency through an
empirical and analytical research and trend method. The results indicate
where financial current assets exceed onerous current liabilities, and cyclical
current assets exceed cyclical current liabilities is associated with higher
levels of profitability, liquidity and solvency.
DR. SHUKLA AVANISH KUMAR (2012) in " IMPACT OF WORKING
CAPITAL MANAGEMENT ON FIRMS PERFORMANCE: EVIDENCES FROM
LISTED COMPANIES OF INDIA" he states that Working capital
management is very significant course of action for any organization which
decides the flow and availability of cash and thus results in the effective

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firms performance. For the study, trend analysis is done. All the selected
samples are listed in Security Exchange Board of India, Mumbai.
Vishal Shah G. (2012) in " AN EMPIRICAL STUDY OF RECEIVABLES
MANAGEMENT IN REAL ESTATE SECTOR OF INDIA" Working capital is
considered to be lifeblood and controlling nerve centre of the business which
focuses on maintaining an optimum balance of working capital elements. For
the purpose of analysis researcher has used ratio techniques. The study
analyses the liquidity management of companies and observes the liquidity
position is very weak.
Paul Kenya (2013) in " Management of working capital and its
effect on profitability of manufacturing companies listed on Nairobi
securities exchange" he stated that the efficient management of working
capital is very vital for a business survival and thus a factor for overall boost
in profitability. Thus the study analyzed the effects of working capital
management on the profitability of manufacturing firms listed on the Nairobi
Securities Exchange by using the trend method. The study result shows that
there is effective management of working capital.
Dr. Rao Janardhan venkata (2011) in " A Study on Working Capital
Management in Cement Company" Working capital is considered to be
life-giving force to an economic entity and managing working capital one of
the most important functions of corporate management. he also finds the
relationship between Working Capital Efficiency and Profitability by analysis
of different probability ratios.
Rajdev Ankita (2013) in "WORKING CAPITAL MANAGEMENT OF
MAKSON" This paper makes an attempt to provide a study on the impact of
working capital management on liquidity, of Makson. he used the trend
method n comparative method. The findings suggest that the liquidity is
managed mostly by owners past experience and data. The originality of the
paper is that it conceptualises liquidity management in Makson group as a
learning process.
Khan Madiha (2013) in " Working Capital Management and
Performance of SME Sector" he states that the study investigates the
influence of working capital management (WCM) on performance of small
medium enterprises (SMEs) in Pakistan. he used the techniques of trend
analysis n ratios. The result of the study is that variable size and growth in
sales has positive influence on profitability.
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KARADAGLI.C (2012) in "The Effect of Working Capital
Management on the Profitability of Turkish SMEs " he determines that
this paper focuses on the effects of working capital management as
measured by different profitability ratios The findings suggest that effective
management of working capital improves firm performance. This study
shows that there is valuable improvement in external n internal forces of
working capital.
Kaveh Azinfar, Mohammad Reza Khalili (2013) in " The Study of
Factors Affecting Working Capital of Pharmaceutical Companies
Accepted in Tehran Stock Exchange" He stated that Policies and
procedures for financial management policy are based on the assumption
that the company will be taking and apply some major decisions. These
decisions include choosing the type of goods, offering services and financing
for fixed assets of the company. These decisions are playing the main and
determinant role on long-term firms profitability and have two important
applications on the management of working capital. Also, managers are
seeking to reach the desired liquidity and providing profitability targets by
them. The method of this study used that financial leverage variables, quick
ratio, percentage of asset growth ratio and growth of total assets have a
significant effect on the company working capital and the return on assets
variables and earnings before and interest tax to turnover had no effect on
working capital.

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CHAPTER 2
RESEARCH METHODOLOGY

This report is prepared on the basis of primary data and secondary data. Primary data are
generated when the researcher employs personal interviews, observations and experiments,
investigates a particular problem at hand. Secondary data on the other hand, those data are
collected from some earlier research study which is conducted in a similar manner and area as
well as data obtained from secondary sources like company records, internals etc
Primary data was not collected but the following informal methods were resorted to:
Informal interviews with the top executives.
Oral and personal discussions with the finance manager .
Personal observation.
The secondary data was collected from the following sources:
Annual accounts and Annual reports.
Company records and journals .
Audit Reports.
Website.
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Data Analysis and Interpretation
Data analysis was done using simple charts like pie-chart and bar diagrams. Also
some tools like the following were used for analysis and interpretation.

Changes in Working Capital

Ratio Analysis
Trend Analysis
Cash conversion cycle

A. Changes in Working Capital

The excess of current assets over current liabilities is referred to as the companies
working capital. The difference between the working capital for two given reporting periods
is called the changes in working capital. the schedule of changes are focused as follows:
increase in current assets

increase in working capital

decrease in current assets

decrease in working capital

increase in current liabilities -

decrease in working capital

decrease in current liabilities -

increase in working capital

The statement or schedules of changes in net working capital can be prepared by using
one of the following forms
1. Using only current account
the statement or schedules of changes in net working capital can be prepared by using
only current account. while preparing this statement, the current assets and current liabilities of
the previous year are compared with those of current year and changes therein determined.

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2. Using both current and non- current accounts
the statement or schedules of changes in net working capital can also be prepared
by using both current assets as well as non-current accounts. current account is the account of
current assets and current liabilities and non-current account of non-current assets and noncurrent liabilities and owners equity.

B. Ratio analysis
Ratio is simple arithmetical expression of the relationship of one number to
another. Ratio analysis is the process of determining, interpreting numerical relationship
based on financial statement with the help of accounting ratios derived from the profit and
loss account and balance sheet, it is a powerful tool of financial analysis. But ratio analysis
is not an end in itself. It is only a means of better understanding of financial strengths and
weakness of a firm.

Importance or advantages of ratio analysis

The following are the main advantages of ratio analysis.

Useful in financial position analysis.

Accounting ratios reveal the financial position of the concern. This helps the bank,
insurance companies and other financial institutions in lending and making investment
decisions.

Useful in simplifying accounting figures

Accounting ratios simply summaries and systematize the accounting figures in order to
make them understandable and in easy form.

Useful in assessing the operational efficiency.

Accounting ratios help to have an idea of the working of the concern. The efficiency of
the firm becomes evident when analysis when is based on accounting ratios.

Analysis is based on accounting ratios.

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The diagnosis the financial health by health by evaluating liquidity, solvency, profitability
etc, this helps the management to assess financial requirements and capabilities various
business units.

Useful in localities the weak of the business.

Accounting ratios are of great assistance in locating the weak spots in the business even
though the overall performances may be efficient weakness in financial structure due to
incorrect policies in the past or present are revealed through accounting ratios.

Useful in comparison of performance

Through accounting ratios comparison can made between one departments of a firm with
another of the same firm in order to evaluate the performance of various departments in
the firm

Types of ratios
Several ratios can be calculated from the accounting data contained in the financial
statements. The parties which generally undertake financial analysis right be the creditors,
owners and management. Each of them make financial analysis for their own purpose.
Accounting ratios may be classified into the following categories.
1. Activity or Turnover ratio
2. Profitability Ratios
3. Leverage Ratios
4. Liquidity ratio

Inventories to Gross Working Capital Ratio:

This ratio indicates the amount of funds tied up in inventories. A high ratio indicates slow cash
realization. It measures how well the company is able to generate cash using working capital at
its current inventory level.
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Inventories to gross working capital ratio= Inventories/ gross working capital ratio*100
Sundry debtors to gross working capital ratio:
The measurement of the company's financial leverage, calculated as the company's debt divided
by its total capital. Debt includes all short-term and long-term obligation. Total capital includes
the company's debt and shareholders equity, which includes common stock, preferred stock, and
minority interest.
Sundry debtors to gross working capital ratio= sundry debtors/ gross working capital
ratio*100
Cash and bank to gross working capital ratio:
Cash is the basic input or component of working capital. Cash is needed to keep the business
running on a continuous basis. So the organization should have sufficient cash to meet the
various requirements.
Cash and bank to gross working capital ratio=cash & bank/gross working capital

Other current assets to gross working capital:

Except inventories, sundry debtors, cash and bank balance and loans and advances and all
remaining items will be put under other current assets.
Other current assets to gross working capital=other current assets/gross working capital
Loans and advances to the gross working capital:
Short-term business loan financing the purchase of income-generating asset, principally
inventory. Working capital loans are generally written with lending terms of the company
requiring full payment within a specified period, such as 60 days or 90days from the date the
funds are advanced.
Loans and advances to the gross working capital=loans and advances/gross working capital

A.

Liquidity Ratio:

Liquidity refers to the ability of a firm to meet its current obligations as and when these
become due. The short-term current assets should either be liquid or near about liquidity. These

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should be convertible in cash for paying obligations of short-tem nature. To measure the
liquidity of a firm, the following ratios can be calculated.

Net working capital ratio

Current ratio
Quick ratio/liquid ratio
Absolute liquid ratio

Net working capital ratio

Net working capital is nothing but the difference between current assets and current
liabilities. When the current liability increases the working capital decreases. A high working
capital is not good for a company because it deficits the excessive blocking up of capital in
inventories and debtors. This will lead to reduce profitability.
It is expressed as:
Net working capital= current assets- current liabilities

Current Ratio:
The current ratio is the ratio of total current assets to total current liabilities. It
calculated by dividing current assets by current liabilities. A current ratio of 2:1 is
considered as satisfactory.
Current ratio = Current assets/current Liabilities
Quick Ratio:
This ratio is also known as quick ratio or acid test ratio. It is based on those current
assets which are highly liquid. Inventory and prepaid expenses are excluded because they are
deemed to be least liquid component of current assets. A high quick ratio is the indication
that the firm is liquid and has the ability to meet its current liabilities in time and on the other
hand low ratio represents liquidity position is not good.
Quick Ratio

Quick or Liquid Assets/Current Liabilities

Absolute Liquid Ratio:

Although receivables are generally more liquid than inventories yet there may be
doubt regarding their realization into cash in time. Absolute liquid ratio shows the
relationship between liquid assets which include cash, bank and marketable securities.
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Absolute liquid ratio = Absolute liquid assets/Current liabilities
Where,
Absolute liquid assets= Cash and Bank balances
B. TURNOVER RATIOS:
Funds are invested in various assets in business to make sales and earn profits. The efficiency with
which assets are managed directly affects the volume of sales. The ratios are called turnover ratios
because they indicate the speed with which assets are converted or turned over into sales. Depending
upon the purpose, a number of turnover ratios can be calculated. These are:
Inventory turnover ratio
Debtors turnover ratio
Average collection period
Creditors turnover ratio
Average payment period
Working capital turnover ratio
Current asset turnover ratio
Cash turnover ratio

ANALYSIS OF EFFICIENCY OF INVENTORY MANAGEMENT

Inventory Turnover Ratio

It indicates the number of times the stock has been turned over during the period and evaluates
the efficiency with which the firm is to manage inventory. A high inventory turnover indicates
efficient management of inventory because more frequently the stocks are sold; the lesser
amount of money is required to finance the inventory.
Inventory Turnover Ratio

= Cost of Goods sold / Average Inventory

Inventory Holding Period:

The number of days inventory is also known as average inventory period or inventory holding
period. A high number of days inventory indicates that there is a lack of demand for the product
being sold. A low days inventory ratio (inventory holding period) may indicate that the company
is not keeping enough stock on hand to meet demands.
Inventory Holding Period

365/ Inventory Turnover Ratio

Inventory to Working Capital Ratio:

Percentage measure of a firm's capability to finance its inventories from its available cash.
Numbers lower than 100 are preferable as they indicate high liquidity. Numbers higher than 100
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suggest that the inventories are too large in relation to the firm's financial strength this ratio is
usually calculated to study the liquid financial position of business enterprises.
Inventory to working capital ratio = Inventory/ working Capital *100
RECEIVABLES MANAGEMENT:
Accounts receivables are simply extension of credit to the firms customers, allowing them a
reasonable period of time in which to pay for the goods. Most firms treat accounts receivables as
a marketing tool to promote sales and profits. They represent extension of credit and investment
of funds and must be carefully managed.
The creation of accounts receivables is beneficial as well as dangerous. The finance manager has
to follow a policy which uses cash funds as economically as possible by extending receivables
without adversely affecting the chance of increasing sales and making more profits. Receivables
Management generally means what type of credit policy a firm should adopt so that sales and
profits can be promoted on the one hand and funds can be economically utilized on the other
hand.
ANALYSIS OF EFFICIENCY OF RECEIVABLES MANAGEMENT
Debtors Turnover Ratio:

This ratio indicates the number of times average debtors are turned over during a year.The
higher the value of debtor turnover ratio the more liquid is the debtors. Similarly low debtor
turnover ratio implies less liquid debtors.
Debtors turnover ratio

Sales/ Avg. Debtors

Debtor Conversion Period (DCP):

The average no. of days for which a firm has to wait before its receivables is converted into
cash.
Debtor Conversion Period=days in a year/Debtors turnover ratio

Creditors Turnover Ratio:

In the course of business operations, a firm has to make credit purchases and incur short-

term liabilities. A supplier of goods, i.e., creditor is naturally interested in finding out how
much time the firm is likely to take in repaying its trade creditors. The ratio indicates velocity
with which the creditors are turned over in relation to purchases.

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Creditors turnover ratio is calculated by using following formula:
Credit Turnover Ratio = Total Purchase / Creditors

Calculation average payment period of MCF Ltd. 2009-2013:

It is a variation of creditors turnover ratio. It is calculated to indicate the speed
with which the payments for credit purchases are made to creditors. It can be
calculated by using the following formula;
Average/creditors payment period = days in a year / creditor turnover ratio

Working capital turnover ratio:

Working capital turnover ratio indicates the velocity of the utilization of net working

capital. This ratio measures the efficiency with which the working capital is being used by a
firm.
Working Capital Turnover Ratio

Sales/Net Working Capital

Fixed assets turnover ratio:

This ratio establishes the relationship between sales or cost of goods sold and fixed assets. It
determines whether the investment made in fixed assets has really helped in generating sales.
It is calculated by using the following formula:
Fixed asset turnover ratio= sales/fixed assets

Current Asset Turnover Ratio:

Current asset turnover ratio between current assets and turnover of sales; this

indicates the contribution of current assets to sales. There is no standard current asset
turnover ratio. High current asset turnover ratio is an indication of better utilization of
current assets.
Current asset turnover= Sales / Current assets

Working Capital to Total Assets Ratio:

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It is the ratio working capital to total assets. The working capital to total assets
ratio measures a companys ability to cover its short term financial obligations by
comparing its total current assets to its total assets. This ratio can provide some insight
as to liquidity of the company, since this ratio can cover the percentage of remaining
assets compared to the companys total assets.
It is expressed as:
Working capital to total asset = Net working capital / Total assets

Current Asset to Total Asset Ratio:

Total Assets of a firm are the combination of current assets and fixed assets.
Current assets include cash in hand, cash at bank, debtors, bills receivables, stock,
prepaid expenses and marketable securities etc. It shows that out of total assets how
much percentage of current assets has.
It is calculated as:
Current asset to total asset ratio = Current assets / Total assets

Cash to Sales Ratio:

The cash turnover ratio denotes the circulation as utilization of cash during the
period of time. It shows the number of time the average cash balance of the firm
turnover during the year.
It is expressed as:
Cash to sales ratio = Cash / Sales

Cash to Current Liability Ratio:

It is the ratio of cash to current liability. Cash to Current liability ratios that
measures the company's ability to satisfy its short-term financial obligations
immediately and to obtain the liquidity measures.
It is expressed as:
Cash to current liability ratio = Cash / Current liability
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Cash Turnover Ratio
The cash turnover ratio denotes the circulation of cash balance of firms and
turnover during the year. It indicates a firms efficiency in its use of cash for
generation of sales revenue. It is the inverse of cash-to-sales ratio.
It is expressed as:
Cash turnover ratio = Net sales / Average cash

Proprietary Ratio:
This ratio is also called equity ratio or owners fund ratio or shareholders
equity ratio. This ratio points out relationship between the shareholders funds and
total tangible asset.
It is expressed as:
Proprietary ratio= shareholders fund / total tangible asset

Cash conversion cycle

One of the distinguishing features of the fund employed as working capital is that constantly
changes its form to drive business wheel. It is also known as circulating capital which
means current assets of the company, which are changed in ordinary course of business from
one form to another, as for example, from cash to inventories, inventories to receivables and
receivables to cash Elapsed time, usually expressed in days, from the outlay of cash for raw
materials to the receipt of cash after the finished goods have been sold. Because a profit is
built into the sales, the term earnings cycle is also used. The shorter the cycle, the more
Working Capital a business generates and the less it has to borrow. This cycle is directly
affected by production efficiency, credit policy, and other controllable factors.

It is expressed as:
Cash conversion cycle =DSO+DIO-DPO

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1. Trend Analysis
Trend Analysis is another important tool of financial statement, for analyzing the financial
performance of the company.

Meaning;
Trend Analysis may be defined as a comparative analysis of a companys financial ratios over
time. The financial statement may be analyzed by computing trends of series of information.
This method determines the directions upward or downward and involves the computation
of the percentage relationships that each statement items bears to the same item in the base
year. The information for a number of years is taken up, one years generally the first year is
taken as 100, and trend ratios for the other years are calculated based on the base year. Then
analyst is able to see the trend of the figures in upward or downward.

Procedure
One year is taken as base year. Generally, the first or last is taken as base year
The figures of the base year are taken as 100.
Trend percentages are calculated in relation to base year. If a figure in other year is, less the
figure in the base year, the percentage will be less than 100 and it will be more than 100 if the
figure is more than base year figure. Each years figure is divided by base years figure.
Trend analysis interpretation requires a caution study, because mere increase or decrease in
trend percentage may give misleading results if studied in isolation. An increase in of 20 % in
current is may be treated as favorable. If this increase in current asset is accompanied by an
equaling increase in sales may not increase profits if the cost of production has also gone up
The base year should be carefully calculated and selected. The base period should be a
normal period. The price level changes in subsequent years may reduce the utility of trend ratios.
If the figure of the base year period is small, then the ratios calculated on this ratio may not give
true idea about the financial data. The accounting procedures and conventions used for data and
presentation of financial statements should be similar; otherwise, the figures will not be
comparable.

LIMITATIONS OF THE STUDY

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Through the project, work has been completed successfully, a few limitations observed.
However, proper care has been taken to overcome the impact of limitations of the study.
The study is conducted with the available data gathered from the annual reports of NHCL

and the analysis was made accordingly.

One cannot make an accurate analysis, using the data of 5 years and judge the performance

of the whole company.

This study mainly used secondary data for the analysis, they were extracted for publishing

the statements of the corporation.

Confidential matters are not exposed by the company.

CHAPTER -3
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RESULTS & ANALYSIS AND

INTERPRETATION

A. changes in working capital

Schedule of changes in Working capital on the year 2009-2010
Particulars

2009

2010

Increase

34660541
9797833
7239354
48410
8861825

38670230
11899340
8629234
73660
13087623

4009689
2101507
1389880
25250

Decrease

a)CURRENT ASSETS
a.
b.
c.
d.
e.

Inventories
Sundry Debtors
Cash & Bank balances
Other current asset
Loans & advances

4225798
Total (a)

60607963

72360087

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b)CURRENT LIABILITY
a. sundry creditors
b. other current liabilities

16939816
13929733

16230316
12677222
709500

30869549

28907538

Total (b)

1252511

29738414

43452549

Net Working Capital (a-b)

13714135
Increase in working capital
13714135
43452549

43452549

13714135

13714135

ANALYSIS AND INTERPRETATION

According to schedule of changes in working capital for the year 2009 &
2010 there is increment in working capital. There is Rs. 137,14,135

increment in

working capital for the year 2009 & 2010. The various current assets for the year of
2009 & 2010 ( i.e., inventories (4009689) , sundry debtors (2101507) , cash & bank
balance (138980) , other current assets ( 25250) and loan and advance (4225798) )
shows better increment in working capital. By observing the schedule

we can

understand there is huge increment in current assets amount from the year 2009 to
2010. When a company increase its current assets it means its lead to a cash outflow
from the company. The company had to shell out money to buy the extra assets.

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Same time there is also increment in current liabilities in the year of 2009
& 2010. The various current liabilities ( i.e., sundry creditors (709500) and other
current liabilities (1252511) ) shows increment in those years. When a company increases
its current liabilities it means it's a cash inflow to the company.
When changes in working capital is positive, the company is either selling off current
assets or else raising its current liabilities. Working capital can also vary drastically year to
year. But its effects depends on how you view a business and investment. When there is
huge demand for the product the company is force to raise its current assets

Schedule of changes in Working capital on the year 2010-2011

Particulars

2010

2011

Increase

38670230

45570247

6900017

11899340

32602810

20703470

8629234

8818050

188816

73660

73450

13087623

15986717

Decrease

a)CURRENT ASSETS
a.
b.
c.
d.
e.

Inventories
Sundry Debtors
Cash & Bank balances
Other current asset
Loans & advances

SRINIVAS SCHOOL OF MANAGEMENT MUKKA

210
2899094
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Total (a)

b)CURRENT LIABILITY
a. sundry creditors
b. other current liabilities
8393947

Total (b)

Net Working Capital (a-b)

Increase in working capital

72360087

103051274

16230316

24624263

12677222

17753169

28907538

42377432

5075947

17221293

43452549

60673842

17221293

60673842

60673842

30691397

30691397

ANALYSIS AND INTERPRETATION

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In the year 2010 & 2011 also the company shows increment in working
capital i.e. is Rs. 172,21,293. In those year the company having same current assets
items. So the various current assets items (i.e. inventories (6900017) , sundry debtors
(20703470) , cash & bank balance (188816) and loans & advances (2899094).

shows

increment in working capital from the last year. But in the same year other current
assets shows slight decrease in the working capital. That is 210. But as it shows very
small amount in decrement in working capital it will not effect that fast.
In the same year the company having same items of current liabilities. That is
nothing but sundry creditors and other current liabilities. This items shows the decrement
in working capital ( i.e. sundry creditors (8393947) , other current liabilities (5075947) ).
Other current liabilities may be included account payable , sales and taxes payable and
unearned revenue. In those items shows increment in the actual amount from its past
year. so off course its shows decrement in working capital in schedule of changes in
working capital
If the change in net working capital is positive, the change to current assets outweighs the
change in the current liabilities.Within the capital-budgeting process, a project typically adds to
current assets given additional inventories or potential increases in accounts receivables from
new sales. The increases to current assets, however, are offset by current liabilities needed to
finance the new project.

Schedule of changes in Working capital on the year 2011-2012

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Particulars

2011

2012

Increase

45570247

51106845

5536598

32602810

30036663

8818050

8972976

154926

73450

111065

37615

15986717

12109319

103051274

102336868

24624263

29524331

17753169

12227496

Decrease

a)CURRENT ASSETS
a.
b.
c.
d.
e.

Inventories
Sundry Debtors
Cash & Bank balances
Other current asset
Loans & advances

2566147

3877398

Total (a)

b)CURRENT LIABILITY
a. sundry creditors
b. other current liabilities

5525673

Total (b)

Net Working Capital (a-b)

4900068

42377432

41751827

60673842

60585041

88801

Decrease in working capital

60673842

60673842

SRINIVAS SCHOOL OF MANAGEMENT MUKKA

88801
11343613

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ANALYSIS AND INTERPRETATION
As per the schedule of changes in working capital in the year 2011 &
2012 there is decrease in working capital. Rs. 88,801 decrement is happened in the
those year.

In this year the current assets items are shows increment as well as

decrement in the working capital. The items inventories (5536598), cash & bank balance
(154926) and other current assets (37615) shows increment in working capital. The items
sundry debtors(2566147) and loans & advances (3877398) shows decrement in working
capital.
In the year 2011 & 2012 the current liabilities items sundry creditors and other
current liabilities shows increment as well as decrement shows in working capital. Sundry
creditors shows

Rs. 4900068 decrement

in working capital. Other current liabilities

shows Rs. 5525673 increment in working capital. Over all this year its shows the
decrement in working capital.
When changes in working capital is decreasing, the company is investing
heavily in its current assets, or else drastically reducing its current liabilities. Negative
working capital means that the business currently is unable to meet its short term
liabilities with its current assets. Therefore, an immediate increase in sales or additional
capital into the company is necessary in order to continue its operations.

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Schedule of changes in Working capital on the year 2012-2013
Particulars

2012

2013

Increase

Decrease

51106845

56618141

5511296

30036663

34296182

4259519

8972976

5354196

3618780

111065

96145

14920

12109319

14185126

102336868

110549790

29524331

35427630

12227496

10234341

a)CURRENT ASSETS
a.
b.
c.
d.
e.

Inventories
Sundry Debtors
Cash & Bank balances
Other current asset
Loans & advances

2075807

Total (a)

b)CURRENT LIABILITY
a. sundry creditors
b. other current liabilities

5903299
1993155

Total (b)
41751827

45661971

60585041

64887819

Net Working Capital (a-b)

Increase in working capital

4302778

64887819

64887819

SRINIVAS SCHOOL OF MANAGEMENT MUKKA

13839777

4302778
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ANALYSIS AND INTERPRETATION

According to the last 2 years schedule of changes in working capital
it shows increment in the working capital. That is Rs. 43,02,778. In those year also the
current a assets shows the increment and decrement in working capital. The current assets
items

inventories (5511296), sundry

debtors

(4259519) and loans

and

advances

( 2075807) shows increase in working capital compare to last year. And the items cash
& bank balance (3618780) and other current assets (14920) shows decrease in working
capital compare to last year. so the overall result in working capital shows in increment.
At the same time the current liabilities items sundry creditors
(5903299) shows decrement in working capital. and other current liabilities (1993155)
shows increment in working capital compare to last year.
So this schedule is giving a clear picture of how the company maintain
its working capital in the year 2012 & 2013. Increase in working capital means that the
business is able to pay off its short term liabilities. Also, a high working capital can be a
signal that the company might be able to expand its operation. So the company can
think of expanding their business in those year.

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Gross Working Capital

Table: 3.2.1
Table showing Changes in gross working capital for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Gross working capital

60607963
72360087
103051274
102336868
110549790
Graph No 3.1.1

Graph showing Changes in gross working capital for last 5 years

Gross Working Capital

120000000

103051274

102336868

2010-2011

2011-2012

100000000
80000000
60000000

60607963

110549790

72360087

40000000
20000000
0

2008-2009

2009-2010

2012-2013

ANALYSIS AND INTERPRETATION

There is a continues increment trend
in gross working capital from the year 2008-09
(60607963) to 2012-13 (110549790). There is slight decrement in the year of 2011-2012. But
very next year 2012- 13 there is an increment in gross working capital compare to last 4 years.
Investment in current assets should not be more or less. And this is sufficient to meet its day to
day operation. It is a quantities concept showing the total amount available for finance the

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current assets. It results every increase in borrowings will increase the gross working capital.
But the net working capital will remain the same.

Inventories to gross working capital ratio:

Table: 3.1.2
Table showing inventories to gross working ratio for last 5 years
Year

Inventories

2008-09
2009-10
2010-11
2011-12
2012-13

Gross working
capital
60607963
72360087
103051274
102336868
110549790

34660541
38670230
45570247
51106845
56618141

Ratio
57
53
44
50
51

Graph no: 3.1.2

Inventories to Gross Working

57
60

53

50

51

44

50
40
30
20
10
0
2008-09

2009-10

2010-11

2011-12

2012-13

G
raph showing Inventories to gross working capital ratio for last 5 years

ANALYSIS AND INTERPRETATION

In terms of absolute figures inventory holding fluctuates over the years. One of the reason being
subsidy declared by the government. As a result of which procurement is done at higher rate the
gross working capital has also gone up with total inventory holdings. A high ratio indicates slow
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cash realization. It measures how well the company is able to generate cash using working
capital at its current inventory level.

Sundry debtors to gross working capital ratio

Table 3.1.3
Sundry debtors to gross working capital ratio for last 5 years
Year

Sundry debtors

2008-09
2009-10
2010-11
2011-12
2012-13

9797833
11899340
32602810
30036663
34296182

Gross working
capital
60607963
72360087
103051274
102336868
110549790

Ratio
0.16
0.16
0.32
0.29
0.31

Graph no 3.1.3
Graph showing Sundry debtors to gross working capital ratio for last 5 years

Ratio
0.35
0.3
0.25
0.2
0.15
0.16
0.1
0.05
0
2008-09

0.32

0.31
0.29

Ratio

0.16

2009-10

2010-11

2011-12

2012-13

ANALYSIS AND INTERPRETATION

The graph shows a increases in debtors from the year 2008-09 to 2010-11, which is favorable to
the company sales have been increasing over the years. It can be noted that with the increased
sales, sundry debtors have been decreasing which is a favorable sign to the concern. Because the
company going to receive the cash with least period. But the company showing slight decrement

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in the last 2 years( 2011- 12 & 2012- 13) which happened due to the increment in sundry debtors
which not that good to the company.

Cash and bank balance with gross working capital ratio

Table no: 3.1.4
cash and bank balance with gross working capital ratio for last 5 years
Year

Cash & bank

Ratio

7239354
8629234

Gross working
capital
60607963
72360087

2008-09
2009-10
2010-11

8818050

103051274

0.09

2011-12

8972976

102336868

0.09

2012-13

5354196

110549790

0.05

0.12
0.12

Graph no: 3.1.4

Ratio
0.12
0.1
0.08
0.06
0.04
0.02
0

0.12

0.12
0.09

2008-09

0.09
0.05

2009-10

2010-11

2011-12

2012-13

Graph showing cash and bank balance with gross working capital ratio for last 5 years

ANALYSIS AND INTERPRETATION

From the companys cash and bank position shows the fluctuation between gross working capital
and cash and bank balances. Cash is one of the main factor which is required for meet the day to
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day requirement of the company. But here the company cash strength is in decreased manner. In
the year 2008-09 it had very good cash position but the year 2012-13 it shows very poor
performance. From 0.12 percentage it go down to 0.05.From this it is clear that the company has
no sufficient cash balance to meet the various requirements for their day to day operations.

Other current assets to gross working capital ratio

Table no: 3.1.5
other current assets to gross working capital ratio for last 5 years
Year
2008-09
2009-10

Other current assets

48410
73660

Gross working capital

60607963
72360087

Ratio
0.07
0.10

2010-11

73450

103051274

0.07

2011-12

111065

102336868

0.11

2012-13

96145

110549790

0.09

Graph no: 3.1.5

Ratio
0.12
0.1
0.08

0.11

0.1
0.07

0.09
0.07

0.06
0.04
0.02
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Ratios of other current assets to gross working capital ratio for last 5 years
ANALYSIS AND INTERPRETATION
From the companys other current assets show the fluctuation between gross working capital and
other current assets balances. Other current assets included prepaid expenses, advances paid to
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suppliers and advances paid to employees. In the year 2008-09 the ratio shows 0.07, but the very
next year it's go up to 0.1 which shows good improvement. But very next year again it go down
to 0.07. May it due to increment in operating cost. But very next year again their able to handle it
in good way. It came up to 0.11. But again in the last year it showing the poor performance in
maintain the other current assets (0.09).

Loans and advances to gross working capital ratio

Table no 3.1.6
Loans and advances to gross working capital for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Loans and advances

8861825
13087623
15986717
12109319
14185126

Gross working capital

60607963
72360087
103051274
102336868
110549790

Ratio
0.15
0.18
0.16
0.12
0.13

Graph no: 3.1.6

Ratio
0.18
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0

0.16

0.15

0.12

2008-2009

2009-2010

2010-2011

2011-2012

0.13

2012-2013

Graph showing Ratio between loans and advances to gross working capital for last 5 years
ANALYSIS AND INTERPRETATION
Loans and advances are utilized for making the payment of current liabilities, wages and salaries
of employees and also the tax liability of business. According to this table and graph the
company maintain more loans and advances in the year of 2009-10 (0.18). But remaining all
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years it shows decrease in loans and advances to gross working capital. In the year 2011-12
(0.12) shows least contribution of loans and advances to gross working capital. Even in the year
2012-13 (0.13) it not showing much increment. This is indicates that the contribution of loans
and advances to gross working capital is reduced.

Current liabilities
Table no 3.1.7
Table showing Changes in current liabilities for last 5 years
Year
2008-09

Current liabilities
30869549

2009-10

28907538

2010-11

42377432

2011-12

41751827

2012-13

45661971

Graph no: 3.1.7

Graph showing Changes in current liabilities

Current Liabilities
50000000
45000000
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0

45661971

30869549

2008-09

28907538

2009-10

42377432
2010-11

41751827
2011-12

2012-13

for last 5 years

ANALYSIS AND INTERPRETATION

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As per the table and graph it is clear that the current liabilities of the firm is keep on increasing
year to year. In 2008-09 it shows 30869549 current liabilities but after 4 year it shows 4566197.
That means it shows a increment in current liabilities. It may be due to increment in sundry
creditors and other liabilities items compare to previous year. But as per those year current assets
the company is able to maintain the standard 2.1 in their current liabilities. That means even
thought they have liabilities to meet they have enough current assets to overcome it. so company
is in fine position

Sundry creditors to current liabilities

Table no 3.1.8
Table showing Sundry creditors to current liabilities for last 5 years
Year

Sundry creditors

Current liabilities

Ratio

2008-09
2009-10
2010-11
2011-12
2012-13

16939816
16230316
24624263
29524331
35427630

30869549
28907538
42377432
41751827
45661971

0.55
0.56
0.58
0.71
0.76

Graph no: 3.1.8

Ratio
0.76

2008-2009

0.55

2009-2010
0.56

2010-2011
2011-2012

0.71
0.58

2012-2013

Graph showing ratio of Sundry creditors to current liabilities for last 5 years

ANALYSIS AND INTERPRETATION

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As per this table and graph we can observe the sundry creditors contribution for increment of
current liabilities. In the year 2008-09 shows 0.55 and in the year 2012-13 it shows 0.76. The
graph showing their is continuous increment in sundry creditors. Because the ratios goes on 0.55,
0.56, 0.58. 0.71 and 0.76 manner. It means sundry creditors have major contribution for the
increment of current liabilities. So if the company want to decrease the current liabilities the
company has to concrete more on the sundry creditors.

Other current liabilities to current liabilities

Table no 3.1.9
Other current liabilities to current liabilities for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Other current liabilities

13929733
12677222
17753169
12227496
10234341

Current liabilities
30869549
28907538
42377432
41751827
45661971

Ratio
0.45
0.44
0.42
0.29
0.22

Graph no: 3.1.9

Ratio
0.45

0.44

0.42

0.45
0.4
0.35

0.29

0.3

0.22

0.25
0.2
0.15
0.1
0.05
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing ratio of other current liabilities to current liabilities for last 5 years

ANALYSIS AND INTERPRETATION

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Other current liabilities may be included account payable , sales and taxes payable and
unearned revenue. So as per the table and graph it is clear that the other assets contribution to
the current assets is much less in last year. Because it shows decreased trend from the year 200809 to 2012-13.The ratio goes down from the ratio of 0.45 to 0.22. That means there is no much
contribution for the increment of current liabilities.

Net working capital

Table no 3.1.10
Table showing net working capital for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Current assets
60607963
72360087
103051274
102336868
110549790

Current liabilities
30869549
28907538
42377432
41751827
45661971

Net working capital

29738414
43452549
60673842
60585041
64887819

Graph no: 3.1.10

Net working capital

70000000
60000000
50000000
40000000

60673842

30000000
20000000

60585041

64887819

43452549
29738414

10000000
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Net working capital for last 5 years

ANALYSIS AND INTERPRETATION

The net working capital of the company shows a fluctuating trend throughout this period of
study. Due to huge amount of inventory holdings this company needs to up high net working
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capital to meet the day to day operations. It is because of increase production cost which includes
increases cost of raw materials, labour, transport and marketing expenses. But compare to all
other year last year that is on 2012-13 they maintain good net working capital. But still we can
say that they are in good position.

Current ratio
Table :3.1.11
Table showing Current Ratio for last 5 years
Year

Current assets

Current Liabilities

Current ratio

2008-09
2009-10
2010-11
2011-12
2012-13

60607963
72360087
103051274
102336868
110549790

30869549
28907538
42377432
41751827
45661971

1.96
2.50
2.43
2.45
2.42

Graph no: 3.1.11

Ratio
2.5
2
1.5
1

1.96

2.5

2.43

2.45

2.42

2009-10

2010-11

2011-12

2012-13

0.5
0
2008-09

G
raph showing Current Ratio for last 5 years

ANALYSIS AND INTERPRETATION

The current ratio of a firm measures the firms short term solvency. i.e. ability to meet the short
term obligation. Here we can see that every year the company current ratio is keep on increasing
from the ratio to 1.96 to 2.45. Average current ratio of the company for the past five years is
showing good, which means the company is ability to pay off the current obligation is high.
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Higher the current ratio higher is the amount available to pay for meeting current obligation. It
shows that the company had a good short term financial solvency and liquidity position.

Quick ratio
Table 3.1.12
Table Showing Quick Ratio for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Quick assets
25947422
33689857
57481027
51230023
53931649

Current Liabilities
30869549
28907538
42377432
41751827
45661971

Quick ratio
0.84
1.17
1.36
1.23
1.18

Graph no 3.1.12

Ratio
2008-09
2012-13 2008-09
0.84
1.18
2011-12
1.23

2009-10
1.17

2009-10
2010-11
2011-12
2012-13

2010-11
1.36

Graph showing Quick Ratio for last 5 years

ANALYSIS AND INTERPRETATION

A quick ratio of 1:1 is usually considered to be ideal. In the year 2008-09 the ratio was 0.84. But
after 4 years it go up to 1.18. That means Throughout the years the company is able to
maintained its standard ratio above 1:1.Quick ratio represents a rigorous measure of firms ability
to service short term liability. From the above table we can say that the company is having

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sufficient money to meet current obligation. Totally we can say that company is able to
maintaining its liquidity position.

Absolute Liquid Ratio

Table 3.1.13
Table showing Absolute Liquid Ratio for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Cash
7239354
8629234
8818050
8972976
5354196

Current liabilities
30869549
28907538
42377432
41751827
45661971

Absolute liquid ratio

0.23
0.30
0.21
0.21
0.12

Graph no: 3.1.13

Absolute liquid ratio

0.3
0.3
0.25

0.23

0.21

0.21

0.2
0.12

0.15
0.1
0.05
0
2008- 2009

2009-2010

2010-2011

2011- 2012

2012- 2013

Graph showing Absolute Liquid Ratio

ANALYSIS AND INTERPRETATION

The acceptable standard for this ratio is 0.5:1. Its shows that the company was able to maintain
the standard till the year 2011-12. But in the last year 2012-13 they could not maintain sufficient
amount of cash to meet their day to day expenses. It means the cash position of the company is
below the standard. Thus we can say that it may be due to very less cash and bank balance

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maintained because major cash receipts and payments are handled by corporate or their increased
the cost of production.

Inventory turnover ratio

Table 3.1.14
Table Showing Inventory Turnover Ratio for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Cost of goods sold

72239465
75848810
75748512
91238182
91336061

Average inventory
34010981
36665386
42120239
48338546
53862493

Ratio
2.12
2.07
1.80
1.89
1.70

Graph no: 3.1.14

Ratio
2.5

2.12

2.07

1.8

1.89
1.7

1.5
1
0.5
0
2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

Graph showing Inventory Turnover Ratio for last 5 years

ANALYSIS AND INTERPRETATION

Inventory turnover ratio indicates how many times stock has turned over during the year. Higher
the ratio higher is the management of inventory. But here the stock of the company is keep on
decreasing year by year. It come down from 2.12 to 1.7. It means that low level of inventory has
serious implications, there is a danger of the firm being out of stock and incurring high stock out
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cost. A stock turnover of 8 times a year is considered ideal. Hence there is no efficient inventory
management.
INVENTORY HOLDING PERIOD:
Table 3.1.15
Table showing Inventory Holding Period for 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Net working days

365
365
365
365
365

Inventory turnover ratio

2.12
2.07
1.80
1.89
1.70

Inventory holding period

172
176
203
193
215

Graph no: 3.1.15

Inventory holding period

250
200
150
100

172

176

2008-09

2009-10

203

193

2010-11

2011-12

215

50
0
2012-13

Graph showing Inventory Holding Period

ANALYSIS AND INTERPRETATION

Here the number of days of Inventory holding period is high indicates there is less demand for
the products. It is fluctuating every year which is not a good indicator for companys progress.
Holding period in 2008-09 was 172 days which were fluctuating in the year 2012-13 it increased

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to 215 days. This shows that the decreasing acceptance and demand for the products of NHCL
and increases a lot of expenses incurred for holding of inventory.

Inventory to working capital turnover ratio

Table 3.1.16
Table showing inventory to working capital turnover ratio for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Inventory
34660541
38670230
45570247
51106845
56618141

Working capital
29738414
43452549
60673842
60585041
64887819

Ratio
117
90
75
84
87

Graph no: 3.1.16

Ratio
140
120 117
100

90

80

75

84

87

60
40
20
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Inventory to working capital ratio for last 5 years

ANALYSIS AND INTERPRETATION

Here we can observe that the amount of inventory has been increased over the years. But the
contribution on inventory to working capital is in decreased manner. During 2008-09 it was up to
117 percent of total working capital. But in current year its (2012-13) it came down to 87
percent of total working capital is the form of inventory. And because of slight increment in last
2 years we can say that the company has improving its liquidity position in good way. And we
can say that the Present liquidity position of the company is not that bad.

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DEBTORS TURNOVER RATIO:
Table 3.1.17
Table Showing Receivable Turnover Ratio for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Credit Sales

Average Debtors

Ratio

47780610
54457043
49650665
60785738
92538289

9748867
10848587
22251075
31319737
32166423

4.90
5.02
2.23
1.94
2.88

Graph no: 3.1.17

Ratio
6

4.9

5.02

5
2.88

2.23

1.94

2
1
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph Showing Receivable Turnover Ratio for last 5 years

ANALYSIS AND INTERPRETATION

This ratio indicates the number of times average debtors are turned over during a year .As we can
observe that, the debtors turnover ratio of the company shows decreased trend. In 2008-09 (4.9)
and 2009-10 (5.02) the company was able to maintain more liquidity in debtors which is
favorable to the company, but last 3 years ( 2010-11 (2.23), 2011-12 (1.94), 2012-13 (2.88) ) its
shows very bad performance compare first 2 years. That means low debtors turnover ratio
implies inefficient management of debtors or less liquid debtors of the company.

Debt collection period

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Table 3.1.18
Table Showing Debt Collection period for last 5 years
Year

Net Working Days

Receivables Turnover Ratio

Debt collection period

365
365
365
365
365

4.90
5.02
2.23
1.94
2.88

74
73
164
188
127

2008-09
2009-10
2010-11
2011-12
2012-13

Graph no: 3.1.18

Debt collection period

200
180
160
140
120
100
164

80

188
127

60
40

74

73

2008-09

2009-10

20
0
2010-11

2011-12

2012-13

Chart showing Debtors Collection Period for last 5 years

ANALYSIS AND INTERPRETATION
This ratio reflecting the proportion of long term debt over the capital employed by the co. In first
2 year (2008-09, 2009-10) company maintained very good DCP, but 2010-11 & 2011-12 it go up
to 164 & 188 which shows that there is not prompt payment on the part of debtors. But in last
year again they improved their performance it come down to 127 which implies quick payment
of debtors. Shorter the collection period the better is quality of debtors as a shorter collection
period implies that quick payment of debtors which is good for the company.

Credit turnover ratio

Table 3.1.19
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Table Showing Credit Turnover Ratio for last 5 years
Year
2008-09

credit purchase

2009-10

63476637

2010-11

43456745

2011-12

55328956

2012-13

70346689

Avg. Creditors

64079821

Ratio

3.86
16614358
3.83
16585066
2.13
20427290
2.04
27074297
2.17
32475981

Graph no: 3.1.19

Ratio
3.86

3.83

4
3.5
3
2.5

2.13

2.04

2.17

2010-11

2011-12

2012-13

2
1.5
1
0.5
0
2008-09

2009-10

Chart showing Credit Turnover Ratio for last 5 years

ANALYSIS AND INTERPRETATION
The ratio indicates velocity with which the creditors are turned over in relation to purchases. It is clear
that creditor turnover ratio varies over the years. It was 3.86 times in the year 2008-09. In the year
2009-10 also the company maintain same ratio (3.83). But in the year 2010-11, 2011-12
and 2012-13 it go down to 2.13, 2.04, 2.17 respectivel y. It shows that company has
making prompt pa yment to the creditors .

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Average payment period
Table 3.1.20

Table showing average payment period for last 5 years

Net working days
365
365
365
365
365

Year
2008-09
2009-10
2010-11
2011-12
2012-13

Creditor turnover ratio

3.86
3.83
2.13
2.04
2.17

Period
95
95
171
179
168

Graph no 3.1.20
Graphical representation of average payment period for last 5 years

Average Payment Period

200
180
160
140
120
100
80
60
40
20
0

171

95

95

2008-09

2009-10

2010-11

SRINIVAS SCHOOL OF MANAGEMENT MUKKA

179

2011-12

168

2012-13

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ANALYSIS AND INTERPRETATION

It is ratio indicate the speed with which the payments for credit purchases are made to creditors.
Generally, lower the ratio better is the liquidity position of the company and higher the ratio less
liquid is the position of the company. That means in the year 2008-09 and 2009-10 the company
is maintain good liquidity position but after 2 year the average payment period gown up to

171,179 from 95. But in the last year company shows slight decrement in APP which
favor to the company.

Working Capital Turnover Ratio

Table 3.1.21
Table Showing Working Capital Turnover Ratio for last 5 years
Year
2008-09

Sales
151122442

Working capital
29738414

2009-10
2010-11
2011-12

159428174
170602662
182357214

43452549
60673842
60585041

2012-13

183036578

64887819

Ratio
5.08
3.67
2.81
3.01
2.82

Graph no: 3.1.21

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Ratio
6
5.08
5
4

3.67

2.81

3.01

2010-11

2011-12

2.82

2
1
0
2008-09

2009-10

2012-13

Graph showing Working Capital Turnover Ratio for last 5 years

ANALYSIS AND INTERPRETATION
This ratio indicates the number of times the working capital is turned over in the course of a year.
A high working capital ratio indicates the effective utilization of working capital and less
working capital ratio indicates less utilization. In the year 2012-13 the working capital is not
well utilized where the ratio was 2.82 but in the year 2008-09 it was 5.08 which shows the
better utilization of working capital of the company but last year performance indicates that
working capital is not being well utilized and proves inefficient management.

Fixed asset turnover ratio

Table 3.1.22
Table Showing Fixed Asset Turnover Ratio for last 5 years
Year

2008-09
2009-10
2010-11
2011-12

Sales
151122442
159428174
170602662
182357214

2012-13

183036578

Fixed assets
44048397
51952598
40917211
40306739
40179143

Ratio
3.43
3.07
4.17
4.52
4.56

Graph no: 3.1.22

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Ratio
4.17

5
3.43

4.56

4.52

3.07

3
2
1
0
2008-09

2009-10

2010-11

2011-12

2012-13

Chart showing Fixed Assets Turnover Ratio for last 5 years

ANALYSIS AND INTERPRETATION
This ratio is highly useful in measuring the efficiency and profit earning capacity of the
company. In 2008-09 and 2009-10 the company having very lower ratio which indicates
underutilization of fixed assets. But from the year 2010-11 to 2012-13 it shows growing trend
which indicates greater utilization of fixed assets in terms of sales. This ratio is especially useful
for manufacturing concerns where sales are produced largely by the capital invested in fixed
assets.

Current asset turnover ratio

Table 3.1.23
Table showing Current asset turnover ratio for last 5 years
Year

2008-09
2009-10
2010-11
2011-12
2012-13

Sales
151122442
159428174
170602662
182357214
183036578

Current Assets
60607963
72360087
103051274
102336868
110549790

Ratio

2.49
2.20
1.66
1.78
1.66

Graph no 3.1.23

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Ratio
3
2.5

2.49
2.2

1.66

1.78

1.66

1.5
1
0.5
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graphical representation of current assets turnover ratio for last 5 years

ANALYSIS AND INTERPRETATION
This ratio indicates the contribution of current assets to sales. High current asset turnover

ratio is an indication of better utilization of current assets which they able to maintain in
the year 2008-09 & 2009-10. But after this 2 years company start to show poor
performance in handling current assets. Low current asset turnover ratio suggests that
current assets are not being effective which will effect to the sales of the company

Working capital to total assets ratio

Table 3.2.24
Table Showing Working Capital to Total Asset Ratios for last 5 years
Year
Net working capital
Total assets
Ratio
2008-09
29738414
0.28
107662860
2009-10
43452549
0.34
128416685
2010-11
60673842
0.41
149572485
2011-12
60585041
0.40
150747607
2012-13
64887819
0.41
159832933
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Graph no 3.1.24

Ratio
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0

0.41

0.4

0.41

0.34
0.28

2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Working Capital to Total Asset Ratio for last 5 years
ANALYSIS AND INTERPRETATION

The working capital to total assets ratio in the year 2008-09 is 0.28 and in the year 200910 , 2010-11, 2011-12 and 2012-13 it increase to 0.34, 0.41, 0.4, 0.41 respectively.
Increment in this ratio indicates there was more demand in domestic market compared to
international market so they brought more machines to produce goods. Which means the
networking of the company moves along with the total assets. Which means in the current
year company is in growing stage.

Current Assets To Total Assets Ratio

Table 3.2.25
Table Showing Current Assets to Total Asset Ratio for last 5 years
Year
2008-09

Current assets

2009-10

72360087

2010-11

103051274

Total assets

60607963

107662860
128416685
149572485

SRINIVAS SCHOOL OF MANAGEMENT MUKKA

ratio

0.56
0.56
0.69

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2011-12

102336868

2012-13

110549790

0.68

150747607

0.69

159832933
Graph no 3.1.25

Ratio
0.69
0.7
0.6

0.56

0.68

0.69

0.56

0.5

Ratio

0.4
0.3
0.2
0.1
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Current Assets to Total Asset Ratio for the last 5 years
ANALYSIS AND INTERPRETATION

The high current ratio shows that the concern is primarily engaged in trading activities
and does not have heavy investment in fixed assets. The company makes huge investment
in current assets than fixed assets or in long term investment because to meet the day to
day requirement of the company is much important, that company requires temporary
working capital to make continuous production. So in the year 2012-13 the company
more focus on current assets than fixed assets which shows 0.69.
Cash to Sales Ratio:
Table 3.1.26
Table showing Cash to Sales Ratio for last 5 years
Year
2008-09

Cash

Net sales

7239354

151122442

Ratio
0.05

2009-10

8629234

159428174

0.05

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2010-11

8818050

170602662

0.05

2011-12

8972976

182357214

0.05

2012-13

5354196

183036578

0.03

Graph no 3.1.26

Ratio
0.06
0.05
0.05

0.05

0.05

0.05

0.04

Ratio

0.03

0.03

0.02
0.01
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Cash to Sales Ratio for last 5 years

ANALYSIS AND INTERPRETATION
It shows the number of time the average cash balance of the firm turnover during the year. As
per the table and graph in 2008-09, 2009-10, 2010-11 & 2011-12 it shows a content flow (0.05)
in performance. But in the year 2012-13 it go down to 0.03 which show very poor performance
in utilization of cash during the particular year. It happened because of increase in expenses of
the company and repayment of loans and advances of the company and also provision against the
misrepresentation and stock deficit.

Cash to current liability ratio

Table 3.1.27
Table showing Cash to Current Liability Ratio for last 5 years
Year
2008-09

Cash

Current liability

7239354

30869549

SRINIVAS SCHOOL OF MANAGEMENT MUKKA

Ratio
0.23
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2009-10

8629234

28907538

0.30

2010-11

8818050

42377432

0.21

2011-12

8972976

41751827

0.21

2012-13

5354196

45661971

0.12

Graph no 3.1.27

Ratio
0.35
0.3
0.25
0.2

0.3
0.23

0.21

Ratio

0.21

0.15

0.12

0.1
0.05
0
2008-09

2009-10

2010-11

2011-12

2012-13

Grap
h showing Cash to Current Liability Ratio for last 5 years

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ANALYSIS AND INTERPRETATION

It shows a fluctuating trend in all 5 years. In the year 2012-13 it shows very low
percentage of ratio(0.12). It is due to higher amount of current obligations and such
balance. Other all years the percentage of ratio is higher than 2012-13. it is high because
of decrease in expenses. As per 2012-13 the firm has sufficient cash to meet the current
liabilities. It means the company able to satisfy its short term financial obligations
immediately and to obtain the liquidity measures.
Cash Turnover Ratio
Table 3.2.28
Table Showing Cash Turnover Ratio for last 5 years

Year
2008-09

Net sales

Cash

151122442

7239354

Ratio
20.88

2009-10

159428174

8629234

18.48

2010-11

170602662

8818050

19.35

2011-12

182357214

8972976

20.32

2012-13

183036578

5354196

34.19

Graph no 3.1.28

Ratio
34.19
35
30
25

20.88

18.48

19.35

20.32

2009-10

2010-11

2011-12

Ratio

20
15
10
5
0
2008-09

2012-13

Graph showing Cash Turnover ratio for last 5 year

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ANALYSIS AND INTERPRETATION
The cash turnover ratio denotes a firms efficiency in its use of cash for generation of sales
revenue. From the above table and graph it is clear that the cash turnover ratio is very high in
2012-13 (34.19) compared to all other years. This indicates that the cash resources of the
company are utilized very effectively. That means firms gets immediately sales receipt within
credit period sanctioned to the debtors which good to the company for the effective management
of cash.

Proprietary ratio
Table 3.2.29

Table Showing Proprietary ratio for last 5 years

Year

Shareholders fund

Total asset

proprietary Ratio

2008-09
2009-10
2010-11
2011-12
2012-13

27167544
49834772
53820182
49933087
52243895

107662860
128416685
149572485
150747607
159832933

0.25
0.39
0.36
0.33
0.33

Graph no 3.1.29
Graphical Representation of Proprietary Ratio for last 5 years

Proprietary Ratio
0.45
0.4

0.39

0.36

0.35

0.33

0.33

2011-12

2012-13

0.30.25
0.25
0.2
0.15
0.1
0.05
0
2008-09

2009-10

2010-11

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ANALYSIS AND INTERPRETATION

This ratio is very useful to highlights the financial position of the company. In the year 2008-09
it was very low which imply that company is not in a position to pay all of its creditors and
therefore a low proprietary ratio is a cause of concern for the creditors of the company. But rest
all years company performance is not bad compare to 2008-09. Proprietary ratio can be
interpreted as good if it is high because a higher proprietary ratio would imply that company has
enough capital to repay its creditors whenever any such demand is made by the creditors. A
lower proprietary ratio is a causes of concern for the creditors of the company.

TREND ANALYSIS
Inventories
Table 3.3.1
Table showing Trend of current assets for 5 years
Year
Current assets
Trend Value
2008-09
100
60607963
2009-10
119
72360087
2010-11
170
103051274
2011-12
169
102336868
2012-13
110549790
182
Graph 3.2.1

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Trend Value
200

182

170

180
160

169

140

119

120100
100
80
60
40
20
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing current assets

ANALYSIS AND INTERPRETATION
The current assets of the company during the year 2008-2009 (60607963) is selected as the base
year for calculating the trend percentage. Al the year it shows increasing trend for current assets
than the base year. In the year 2012-2013 it shows maximum trend percentage (182) of current
assets of the company. The current assets of the company are increasing throughout the study and
trend shown an increasing trend except in the year 2011-2012.

Inventories
Table 3.3.2
Table showing Trend of Inventories for last 5 years
Year
Inventories
Trend Value
2008-09
100
34660541
2009-10
112
38670230
2010-11
131
45570247
2011-12
147
51106845
2012-13
56618141
163
Graph 3.2.1

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Trend Value
180

163
147

160
140
120100
100

131
112

80
60
40
20
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Inventories Trend for last 5 years

ANALYSIS AND INTERPRETATION

The amount of inventories during the year 2008-2009 (34660541) is selected as the base year for
calculating the trend percentage. In the year 2012-2013 has the maximum trend percentage (163)
of inventories of the company. The inventories of the company are increasing throughout the
study and in the years 2009-10, 2010-11, 2011-12 and 2012-13 shows continues an increasing
trend that is 112, 131, 147, 163 respectively.

Sundry debtors:
Table 3.3.3
Table showing Trend of Sundry debtors for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Sundry debtors
9797833
11899340
32602810
30036663
34296182

Trend Value
100
121
333
307
350

Graph 3.2.3
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Graph showing Trend of Sundry debtors for last 5 years

Trend Value
400

350

350

307

300

333

250
200
150
100
100

121

50
0
2008-09

2009-10

2010-11

2011-12

2012-13

ANALYSIS AND INTERPRETATION

The amount of sundry debtor during the year 2008-2009 (9797833) is selected as the base year
for calculating the trend percentage. Sundry debtor trend has increased over past four years
compare to base year. But in the year 2011-12 (307) showing a slight decrement trend than the
previous year 2010-11 (333). In the current year 2012-13 sundry debtors are increased to 350 %
compared to all the previous years. Sundry debtors of the company from the year 2008-2009 to
2012-13 are in a better position.

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Cash and Bank Balances:
Table 3.3.4
Table showing Trend of Cash and bank balance for last 5 years
Year
Cash & bank
Trend Value
2008-09
100
7239354
2009-10
119
8629234
2010-11
122
8818050
2011-12
124
8972976
2012-13
5354196
74
Graph 3.2.4

Trend Value
140
120
100
100

119

122

124

74

80
60
40
20
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph
showing Trend of Cash and bank balance for last 5 years

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ANALYSIS AND INTERPRETATION

The amount of Cash and bank balances during the year 2008-2009 (7239354) is selected as the
base year for calculating the trend percentage. A cash and bank balance of the company was in
increased trend till the year 2011-12 ( 119, 122 & 124) compare to base year. But in the year
2012-13 sudden-lily it came down to below the base year. It came down from 124 to 74 which
shows a very major trend variance.

Other current assets

Table 3.3.5
Table showing Trend of Other Current Assets for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Other current assets

48410
73660
73450
111065
96145

Trend Value
100
152
152
229
199

Graph 3.2.5

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Trend Value
229

250

199

200
152

152

2009-10

2010-11

150
100
100
50
0
2008-09

2011-12

2012-13

G
raph showing Trend of Other Current Assets for last 5 years
ANALYSIS AND INTERPRETATION
The amount of other current assets during the year 2008-2009 (48410) is selected as the base
year for calculating the trend percentage. In the year 2011-12 has the maximum trend of other
current assets of the company. In all the year it shows increasing trend of current assets compare
to base year. But in the year 2012-13 is showing decreasing trend compare to previous year. It
came down from 229 to 199 which indicate decreasing trend.

Loans and Advances

Table 3.3.6
Table Showing Trend of Loans and Advances for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Loans and advances

8861825
13087623
15986717
12109319
14185126

Trend Value
100
148
180
137
160

Graph 3.2.6
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Trend Value
200
180
160
140
120
100 100
80
60
40
20
0
2008-09

180
160

148

137

2009-10

2010-11

2011-12

2012-13

G
raph showing Trend of Loans and Advances for last 5 years
ANALYSIS AND INTERPRETATION
The amount of Loans and Advances during the year 2008-2009 (8861825) is selected as the base
year for calculating the trend percentage. In the year 2010-11 shows maximum trend. But all the
year it shows increased trend more than base year. But in the year 2011-12 (137) & 2012-13
(160) shows decreased trend compare to 2010-11 (180) A Loans and Advances of the company
have showing the increasing trend from the year 2008-09 to 2010-11.

Current liabilities:
Table 3.3.7
Table showing Trend of Current Liabilities for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Current liabilities
30869549
28907538
42377432
41751827
45661971

Trend Value
100
94
137
135
148

Graph 3.2.7

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Trend Value
160
140
120
100
100

137

135

2010-11

2011-12

148

94

80
60
40
20
0
2008-09

2009-10

2012-13

Gr
aph showing Trend of Current Liabilities for last 5 years

ANALYSIS AND INTERPRETATION

The amount of current liabilities during the year 2008-2009 (30869549) is selected as the base
year for calculating the trend percentage. In the year 2012-13 (148) it shows maximum trend
value. But in the year 2009-10 (94) shows the trend which below the base. But in the year 201011 it shows increased trend than the previous year. In the year 2011-12 shows less trend than the
previous year. But from this it go up to 148 in the year 2012-13.

Sundry Creditors:
Table 3.3.8
Table showing Trend of sundry creditors for last 5 years
Year
Sundry creditors
Trend Value
2008-09
16939816
100
2009-10
16230316
96
2010-11
24624263
145
2011-12
29524331
174
2012-13
35427630
209
Graph 3.2.8
Graph showing Trend of Sundry Creditors for last 5 years
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Trend Value
250
209

200
174
150
100

145
100

96

50
0
2008-09

2009-10

2010-11

2011-12

2012-13

ANALYSIS AND INTERPRETATION

The amount of sundry creditors during the year 2008-2009 (16939816) is selected as
the base year for calculating the trend percentage. In the year 2009-10 (96) the trend goes down
below the base year. After that in the year 2010-11, 2011-12 & 2012-13 there is continues
increment in trend (145, 174 & 209). The year 2012-13 (209) shows the highest trend value.

Other current liabilities

Table 3.3.9
Table showing Trend of Other Current Liabilities for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Other current liabilities

13929733
12677222
17753169
12227496
10234341

Trend Value
100
91
127
88
73

Graph 3.2.9

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Trend Value
140

127

120
100
100

91

88
73

80
60
40
20
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graph showing Trend of Other Current Liabilities for last 5 years

ANALYSIS AND INTERPRETATION

The amount of other current liabilities during the year 2008-2009 (13929733) is selected as the
base year for calculating the trend percentage. Only in the year 2010-11 it shows the trend above
the base year. Rest all years that means in the year 2009-10 (91), 2011-12 (88) & 2012-13 (73)
shows the trend below the base which indicate decrease in the other current liabilities of the
company.

Net working capital

Table 3.3.10
Table showing Trend of Net working capital for last 5 years
Year
2008-09
2009-10
2010-11
2011-12
2012-13

Net working capital

29738414
43452549
60673842
60585041
64887819

Trend Value
100
146
204
204
218

Graph 3.2.10

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Trend Value
250
218

200
150
100

204

204

2010-11

2011-12

146
100

50
0
2008-09

2009-10

2012-13

G
raph showing Trend of Net working capital for last 5 years
ANALYSIS AND INTERPRETATION
The amount of net working capital during the year 2010-2011 (29738414) is selected as the base
year for calculating the trend percentage. The graph shows continues increment in all the years
which shows above the base year that is 2009-10 (146), 2010-11 (204), 2011-12 (204) & 201213 (218). In the year 2012-13 (218) shows the maximum trend than the previous year.

Cash Conversion Cycle

Calculation Days Inventory Outstanding (DIO)
Table 3.4.1

Table showing days inventory outstanding for last 5 years

Year

Average inventory

2008-09
2009-10
2010-11
2011-12
2012-13

34010981
36665386
42120239
48338546
53862493

Annual cost of goods sold

72239465
75848810
75748512
91238182
91336061

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DIO(in days)
172
176
203
193
215

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Graph 3.3.1

DIO(in days)
250
215

203

200
172

176

2008-09

2009-10

193

150

100

50

0
2010-11

2011-12

2012-13

Graphical representation of days inventory outstanding for last 5 years

Calculation Days Sales Outstanding(DSO) for 5 years
Table 3.4.2

Table showing days sales outstanding for last 5 years

Year
2008-09
2009-10
2010-11
2011-12
2012-13

Average account receivable

9748867
10848587
22251075
31319737
32166423

Annual sales

DSO(in days)

151122442
159428174
170602662
182357214
183036578

24
25
48
63
64

Graph 3.3.2

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DSO(in days)
64

63

70
60

48

50
40
25

24

30
20
10
0

2008-09

2009-10

2010-11

2011-12

2012-13

Graphical representation of days sales outstanding for last 5 years

calculation days payable outstanding(DPO) for 5 years
Table 3.4.3
Table showing days payable outstanding for last 5 years

Year

Cost Of Goods Sold

DPO(in days)

Average account payable

2008-09

84

16614358

72239465

2009-10

80

16585066

75848810

20427290

75748512

2010-11

98

2011-12

108

27074297

91238182

2012-13

130

32475981

91336061
Graph 3.3.3:

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DPO(in days)
140

130

120

108
98

100
84

80

80
60
40
20
0
2008-09

2009-10

2010-11

2011-12

2012-13

Graphical representation of DPO for last 5 years

Calculation of cash conversion cycle

CCC= DIO + DSO DPO
Table 3.4.4
Table showing cash conversion cycle for the last 5 years
Year

DPO(in days)

2008-09

DIO(in
days)
172

2009-10

DSO(in days)

Cash conversion cycle (in

days)

24

84

112

176

25

80

121

2010-11

203

48

98

153

2011-12

193

63

108

148

2012-13

215

64

130

149

Graph 3.3.4

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Cash conversion cycle

180
160
140
120
100
80
60
40
20
0
2008-09

2009-10

2010-11

2011-12

2012-13

G
raphical representation of Cash cycle for last 5 years
ANALYSIS AND INTERPRETATION
The company is showing positive cash cycle. Positive cash cycle means at current state of
operations entity is taking more time to generate cash as compared to time required to make
payments. Positive cash cycle does not necessarily a result of increasing conversion time or
delayed payments from customers it may be because creditors are now asking for quick
payments.

CHAPTER-4

FINDINGS,
SUGGESTIONS
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& CONCLUSION

FINDINGS
Working capital management usually considered to involve administration of current assets and
current liabilities in such a way that an optimum level of working capital is maintained in the
company throughout the period of study. According to this project following finding are found
While we look at the computed current ratio of NHCL it clearly shows that the company
is maintaining a very good liquidity position and there is no shortage of working capital
except in first year.
A quick ratio of 1:1 is usually considered to be ideal. And in the year 2012-13 it
decreased to 1.18. Throughout the years the company has maintained its standard ratio
above 1:1 except first year
The acceptable standard for Absolute liquid ratio is 0.5:1. Thus spinning we can say that
in all the years, it is below the standard due to very less cash and bank balance
maintained because major cash receipts and payments are handled by corporate office.
The inventory turnover ratio indicates the company is not effectively managing the
inventories. And more part of working capital is needed for inventory because of high
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inventory holding period. In NHCL the holding period is fluctuating every year which is
not a good indicator for companys progress.
Here we can observe that the percentage of inventory in total inventory has been
increased over the years. In the current year its (2012-13) 87 percent of total working
capital is the form of inventory.
Debtors turnover ratio shows decreasing trend. In the year 2008-09 the debtors turnover
ratio was 4.90 which is favourable to the company but in the later year the ratio has been
decreased because both sale and debtors have declined. And Collection period has been
increased in the year this shows that there is not prompt payment on the part of debtors.
It is clear that creditor turnover ratio changing over the years and it shows that company has
making prompt payment to the creditors. In the year 2008-09 & 2009-10 the average
payment period was 95 days each which implies quick payment of creditors but in the
later year the collection period has been increased this shows that there is not prompt
payment on the part of creditors.
In the year 2013 the working capital is well maintained where the ratio is 2 times the
current asset compared to the current liabilities.
Fixed assets turnover ratio is especially useful for manufacturing concerns where sales
are produced largely by the capital invested in fixed assets. In this case fixed assets
turnover ratio increased in 2012-2013 (4.56) than that of 2011-12 (4.52). This indicates
greater utilization of fixed assets.
In the year 2012-13 (1.66), 2011-12 (1.78) & 2010-11 (1.66) current asset turnover ratio
was very low. Low current asset turnover ratio suggests that current assets are not being
effective which will effect to the sales of the company.
In the year 2012-13 the working capital to total asset ratio was high it indicates there was
more demand in domestic market compared to international market so they brought more
machines to produce goods.
The company makes huge investment in current assets than fixed assets or in long term
investment because to meet the day to day requirement of the company is much
important, that company requires temporary working capital to make continuous
production. So in the year 2012-13 the ratio is 0.69.
The cash to sales ratio is content in the years 2008- 09, 2009-10, 2010-11 & 2011-12 and
the last years 2012-13 it is low because of increase in expenses of the company and

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repayment of loans and advances of the company and also provision against the
misrepresentation and stock deficit.
In Cash to Current liability ratios it found that the firm has sufficient cash to meet the
current liabilities.
The cash turnover ratio indicates that the cash resources of the company are utilized very
effectively. That means firms gets immediately sales receipt within a credit period
sanctioned to the debtors which is good to the company
The inventories of the company are increasing throughout the study and trend shown an
increasing trend except in the year 2009-2010.
Sundry debtors of the company from the year 2008-2009 onwards are in a better position
which is favorable to the company
A cash and bank balance of the company has an increasing trend except in the year 20122013. In 2009-10, 2010-11 & 2011-12 it shows increasing trend.
In the year 2011-12 has the maximum trend percentage of other current assets of the
company.
A current liability of the company has an increasing trend except in the year 2009-10.
The sundry creditors of the company has an maximum trend in 2012-13. All other years
has the trend value above the base except in the year 2009-10.
Other current liabilities of the company has maximum increased trend in the year 201011
A Net working capital of the company has an increasing trend all the year. In 2012-13 it
shows maximum trend value.
The proprietary ratio indicates that the company has average capital to pay off its
creditors and implies that there has been no shortage in the payment of creditors in all the
years except 2008-09.
The company is showing positive cash cycle. It indicates that current state of operations
entity is taking more time to generate cash as compared to time required to make
payment.

SUGGESTIONS
The current ratio is an important determinant of firms liquidity position.
The company maintains a favorable ratio in all year. But still they have to
concentrate more on its improved performance through by collecting
outstanding accounts receivable, pay off some current liabilities, and convert
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fixed assets into cash by selling unused equipments, increase in cash balance
with long term loan.
Company should establish a standard of optimum cash balance to be
maintained in the business.
The financial statements of the company show that there is a good sale year
after year and the company can concentrate more on the improvement of
sales through better distribution policies.
Low turnover ratio showed accumulation of finished or semi finished goods,
which resulted a large period of inventories in the concern. It is therefore
suggested that the management should check the size of this component
periodically and should try to reduce its level.
The company can increase its profitability by proper inventory management
as it has borrowed from bank and financial institution mainly to finance its
working capital.
Company should take necessary step to bring down to the debtor collection
period and inventory holding period to enhance the working capital
efficiency
CONCLUSION
The Nagarjuna Herbal Concentrates Ltd is a well established firm and the financials
reports shows that company is in a growing position. The ultimate objective of every business
concern is to maximize profit. The management of the company work hard to attain this
objective while striving to maintain its prestige and goodwill. The prestige and goodwill can be
protected only by maintaining sufficient liquidity and ensuring solvency.
The Working capital management of NHCL, Thodupuzha were studied by analyzing
Liquidity, Profitability and Solvency of the Company. It is seen that profitability of the company
is satisfactory even though it shows loss in one or two years .profitability ratio indicates that the
concern has large amount of manufacturing expense. In the year 2010-11 & 2011-12 the overall
performance of the company is below their standard. But last year 2012-13 company is in
growing position. They trying to improve their profitability from previous year. The liquidity
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position of the company is satisfactory they have maintained the acceptable level of working
capital. Considering the solvency ratio, the companys ability to meet its liability is
satisfactory .The proprietary ratio of the company is less than one, so the long term solvency is
not so better. The schedule of changes in working capital indicates that the net working capital
of the concern shows an increasing trend in the last two years. The company has a growing rate
of working capital turnover ratio and so it represents efficient utilization of working capital.
The Company's financial position is satisfactory. But the company should take
measures to increase its working capital position. By the efficient use of asset , the company can
improve its financial position .the amount of working capital within the concern is increased so
that the company can use the capital to meet the expenses. It will help to improve the working
capital management of the concern. Gross profit can be increased by adopting favorable
purchasing policies and by reducing sales etc. It will increase the production and so it helps to
decrease the cost of goods sold. I hope that the measures suggested may be helpful to improve
further Performance of NHCL.

BIBLIOGRAPHY
Books
C R Kothari, "Research Methodology" Wishwa Prakasam, 1999, New Delhi
Khan M.Y, Jain P. K, "Financial Management" Tata McGraw Hill Publishing Co. Ltd, New
Delhi, 5th Edition, 2008
Pandey I. M, Financial Management Vikas Publishing House Pvt. Ltd, New Delhi, 9th
Edition, 2004.
SudhindraBhat, Financial Management (Principles and Practices), Excel Books, 2nd
Edition, 2008.
A roar M.N., Cost and management accounting, Himalaya publishing house.
Daniel P.Carpenter, The American political science review 1996.
Websites
www.wikipedia.com
www.mofpi.nic.in
www.nagarjuna.com

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http://www.investorwords.com
www.Infoline.com
https://www.google.co.in

Research Article

1. ALAVINASA MOHAMMAD SEYED (Jan 2013) - Title "Studying The

Relationship Between Working Capital Management And Profitability Of Listed
Companies In Tehran Stock Exchange." ( Business Management Dynamics
Vol.2, No.7 , ISSN: 2047-7031 )
pp: 01-08

2. PRATIBHA JAIN AND KSHITIJA CHAUGULE (March 2014) - Title: " Working
Capital Structure And Liquidity Analysis Of Indian Textiles Industry." (VSRD International Journal Of Business And Management Research, Vol. IV Issue III , ISSN: 23192194)
pp: 81-84

3. KARADUMAN AGAN HASAN (Feb 2010) - Title " Effects Of Working

Capital Management On Profitability: The Case For Selected Companies In
The Istanbul Stock Exchange" (International Journal Of Economics And
Finance Studies Vol. 2, No.2, ISSN: 1309-8055) pp: 47-54

4. K.T SRINIVAS (Sept 2010) - Title " A Study On Working Capital

Management Through Ratio Analysis With Reference To Karnataka Power
Corporation Limited" (National Monthly Refereed Journal Of Research In
Commerce & Management, Vol. 5 ,ISSN: 2059- 9534) pp: 80-88

5. ZAWAIRA TENDAI (April 2014) - Title "The Association Between

Working Capital Management And Profitability Of Non-Financial Companies
Listed On The Zimbabwe Stock Exchange" (International Journal Of Research
In Social Sciences, Vol.3, ISSN 2307 - 227X) pp: 114-118

6. RAMAN VENKATA.N (March 2013) - Title " Impact Of Receivables

Management On Working Capital And Profitability: A Study On Select Cement
Companies In India." (International Journal Of Marketing, Financial Services &
Management Research , Vol.3, ISSN: 2277- 3622) pp: 163-169

7. JASMER SINGH (July 2013) - Title " A Study On Working Capital

Management Of Tata Steel Ltd" ( International Journal Of Advanced Research
In Management And Social Sciences Vol. 2, No. 7, ISSN: 2278- 6236) pp:
237-143
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8. MADHAVI.K (March 2014) - Title " Working Capital Management Of Paper
Mills" ( International Journal Of Research In Business Management, Vol. 2, No.
3, ISSN: 2347-4572 ) pp: 63-72

9. HINA AGHA ( Jan 2014) - Title "Impact Of Working Capital Management

On Profitability" (European Scientific Journal Vol.10, No. 1, ISSN 1857- 7431)
pp: 374- 380

10. KOK JENNY (Nov 2012) - Title "Financial Supply Chain Management
Challenges And Obstacles." ( International Journal Of Business And
Management Vol. 5, No. 11, ISSN: 2224-9729 ) pp: 140- 145

11. TAMER BAHJAT SABRI (June 2012) - Title "The Impact Of Working
Capital On The Value Of The Company In Light Of Differing Size, Growth, And
Debt." ( ACRN Journal Of Entrepreneurship Perspectives Vol. 1, Issue 2, ISSN
2224-9729) pp: 132 - 143

12. ALOMBINI NAKAMURA.M (Nov 2011) - Title " Key Factors In Working
Capital Management In The Brazilian Market." ( BEH - Business And
Economic Horizons
Volume 7, Issue 1, ISSN: 0034-7590) pp: 27-41

13. AL. M MAMOUN (Feb 2012) - Title "Working Capital Management And
Profitability: The Case Of Industrial Firms In Jordan." (RAE - Revista De
Administrao De Empresas, Vol. 52, No. 1, ISSN: 1450-2275) pp. 55-69

14. TUFAIL SUMAIRA (June 2011) - Title " Impact Of Working Capital
Management On Profitability." (European Journal Of Economics, Finance And
Administrative Sciences, Vol.6, No.3, ISSN 2635-9446) pp:75-82

15. YADHAV KUMAR PRABHATH ( May 2010) - Title " A Study On Working
Capital Management In Public Enterprises." (Proceedings Of 3rd International
Conference On Business Management Vol. 7, No.2 Vitoria-ES, ISSN 18082386) pp 37-59

16. SINGH PREETI ( July 2012) - Title "Assessment Of Working Capital And
Liquidity Position Of Public Sector Steel Enterprise In India." (CAMS Journal Of
Business Studies And Research, Vol. 5, No.3, ISSN : 0975-7953) pp: 1- 18

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17. DR. S. SARAVANAN (Feb. 2014) - Title "Research Paper Commerce A
Study On Working Capital Management Of Cement." ( International Journal Of
Innovative Research In Commerce & Management Vol. 2 , ISSUE NO. 9,ISSN
2277-8160) pp: 36-41
18. NOSSA VALCEMIRO (Aug 2010) - Title "Working Capital, Profitability,
Liquidity And Solvency Of Healthcare Insurance Companies." ( International
Journal Of Technological Exploration And Learning (IJTEL) Vol. 2, Issue 4,
ISSN:1808-2010) pp: 161-166

19. DR. SHUKLA AVANISH KUMAR (Sept 2012) - Title " Impact Of Working
Capital Management On Firms Performance: Evidences From Listed
Companies Of India." (International Journal Of Research In Commerce, It &
Management, Vol.5, No.3, ISSN: 2231-5756) pp: 1- 12

20. SHAH G. VISHAL (Jan 2012) - Title "An Empirical Study Of Receivables
Management In Real Estate Sector Of India." ( International Journal Of
Marketing And Technology , Vol. 2, Issue 8, ISSN: 2249- 1058) pp: 431-443

21. PAUL KENYA (Feb 2013) - Title "Management Of Working Capital And Its
Effect On Profitability Of Manufacturing Companies Listed On Nairobi
Securities Exchange." (International Journal Of Business And Finance
Management Research Vol.2, No.9, ISSN: 2053-1842) pp: 35-42

22. DR. RAO JANARDHAN VENKATA (Sept 2011) - Title " A Study On Working
Capital Management In Cement Company." (International Journal Of
Management & Business Studies IJMBs Vol. 1, Issue 3, ISSN: 2330-9519) pp:
91- 94

23. RAJDEV ANKITA (July 2013) - Title " Working Capital Management Of
MAKSON." (Researchers World -Journal Of Arts, Science & Commerce Vol.
1 , No. 4, ISSN: 2231-4172) pp: 87- 90

24. KHAN MADIHA (Jan 2013) - Title " Working Capital Management And
Performance Of SME Sector" (European Journal Of Business And
Management Vol.5, No.1, ISSN 2222-1905) pp: 60-66

25. KARADAGLI.C (Sept 2012) - Title "The Effect of Working Capital

Management on the Profitability of Turkish SME." (Mediterranean Journal of
Social Sciences Vol 4, No 13, ISSN: 2039-9340) pp: 531-538

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26. KAVEH AZINFAR, MOHAMMAD REZA KHALILI (Nov 2013) - Title "The
Study Of Factors Affecting Working Capital Of Pharmaceutical Companies
Accepted In Tehran Stock Exchange" (Asian Journal Of Business And
Management Sciences Vol. 1, No. 2, ISSN: 2307-3071)
pp: 130-134

ANNEXURE
Balance Sheet of Nagarjuna Herbal Concentrates Ltd. for last 5 years ( amount in rupees)

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Particulars

2009

2010

2011

2012

2013

Assets
Current Assets Loans
& Advances:Inventories
Debtors
Cash & Bank Balances
Other Assets
Loans & Advances

34660541
9797833
7239354
48410
8861825

38670230
11899340
8629234
73660
13087623

45570247
32602810
8818050
73450
15986717

51106845
30036663
8972976
111065
12109319

56618141
34296182
5354196
96145
14185126

Total Current Assets

60607963

72360087

10305127
4

102336868

110549790

Investment
Fixed Assets:
Land
Buildings
Plant
Furniture
Office equipment
Vehicle
Electronical Fitting

3006000

4104000

8104000

9104000

2785786
10766403
11246098
14595242
299590
2245000
1896688

4362270
14989667
12885987
14584125
411655
2450450
2268444

4881179
14637600
14047084
1651307
453202
2465911
2170456

4289401
13925919
15942406
1468593
438208
2135669
1978947

Total Fixed Assets

44048397

51952598

40306739

40179143

Total
Liabilities

107662860

128416685

150747607

159832933

Sundry Creditors
Other Current Liability

16939816
13929733

29524331
12227496

35427630
10234341

41751827

45661971

48236693
10826000
100814520

50453067
11474000
107589038

26480000
23453087

26480000
25763895

150747607

159832933

5604000
4881179
15207676
13700977
1788218
436546
2455243
2447372
40917211
14957248
5
16230316
12677222

Total Current liability

30869549

28907538

Secured Loans
Unsecured Loans
Total Liabilities

40103447
9522320
80495316

40416375
9258000
78581913

Share Capital
Share Capital
Advances
Reserve and Surplus

21566800
3243274
2357470

21850400
3305697
24678675

Total

107662860

128416685

24624263
17753169
42377432
43195871
10179000
95752303
22935000
3505697
27379485
14957248
5

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Income Statement of Nagarjuna Herbal Concentrates Ltd. for last 5 years (amount in rupees)
Particulars

Sales
Less : Cost of Goods
Sold
Gross Profit

2009

2010

15942817
4
151122442 75848810
72239465

2011

2012

2013

17060266
2
75748512

18235721
4
91238182

183036578
91336061
91700517

Less operating
expenses
Administrative
expenses
Selling Expenses
Operating Profit
Add Other Income
Less Non operating
expenses
Net profit

83579364

94854150

91119032

32844670
25247509

53301727
38384603

56784917
36519709

25487185
1338652

3167820
1967874

-2185594
1929152

78882977

31582736
22137870
25162371
1358763
2651134
6329714

26825837
6676225

5135694
6804220

-256442
7423936

20149612

-1668526

-7680378

47553327
33729318
10417872
1477765
11895637
7085716
4809921

20191420

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