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Objective & Research Methodology

The document discusses the objective and methodology of a study on working capital management. The objective is to study sources and uses of working capital, analyze liquidity through ratios, and components like receivables, cash, and inventory management. The methodology uses descriptive research analyzing secondary data from company balance sheets, income statements, and financials over the last five years. Ratios and statements of working capital changes will be tools used to analyze the data.

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3K views4 pages

Objective & Research Methodology

The document discusses the objective and methodology of a study on working capital management. The objective is to study sources and uses of working capital, analyze liquidity through ratios, and components like receivables, cash, and inventory management. The methodology uses descriptive research analyzing secondary data from company balance sheets, income statements, and financials over the last five years. Ratios and statements of working capital changes will be tools used to analyze the data.

Uploaded by

chettiyar_rajan2693
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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OBJECTIVE OF THE PROJECT

“The study of working capital management”

There are numerous aspects of working capital management that makes it an important topic for the
study.The management of assets in any organization is an essential part of overall management. The
enterprise, at the time of formation attaches great importance to fixed assets management, as a part of
investment decision-making. However, in the overall day-to-day financial management, after the initial
investment, the management gives more importance to managing working capital. If we look at any
financial statement it will be evident that the investment in fixed assets remains more or less static but
the working capital is constantly changing. A healthy working capital position is the sign of a successful
business. This is reflected in adequate inventories, lowest level of debtors, minimum utilization of bank
facilities for working capital, etc. thus the study of working capital management occupies an important
place in financial management.

Decisions relating to working capital (Current assets - Current liabilities) and short term financing are
known as working capital management. It involves the relationship between a firm’s short-term assets
and its short term liabilities.

The goal of working capital management is to ensure that the firm is able to continue its operation and
that it has sufficient cash flow to satisfy both maturing short term debt and upcoming operational
expenses.

The main objective of the study was to put into practical the theoretical aspect of the study into real life
work experience. The study of working capital is based on tools like Ratio Analysis, Statement of changes
in working capital. Further the study is based on last 5 years Annual Reports

The main objective of the study :-

 To study the sources and uses of the working capital.

 To study the liquidity position through various working capital related ratios.

 To study the working capital components such as receivables accounts, Cash management,

Inventory management.

 To make suggestions based on the finding of the study.


RESEARCH METHODOLOGY

INTRODUCTION:
Research methodology is a way to systematically solve the research problem. The term research refers to
the systematic method consisting of enunciating the problem , formulating a hypothesis collecting the
data , analyzing the facts and reaching the certain conclusions either in the form of solution towards the
concern problem or in certain generalization for some theoretical formulation.

“The procedures by which researcher go about their work of describing, explaining and predicting
phenomenon are called methodology”.

RESEARCH DESIGN:
Descriptive research procedure is used for describing the recent situations in the organization and
analytical research to analyze the results by using research tools.

Descriptive Research:

Descriptive research, also known as statistical research, describes data and characteristics about
the population or phenomenon being studied. Descriptive research answers the questions who,
what, where, when and how.

Although the data description is factual, accurate and systematic, the research cannot describe what
caused a situation. Thus, Descriptive research cannot be used to create a causal relationship, where one
variable affects another. In other words, descriptive research can be said to have a low requirement
for internal validity.

In short descriptive research deals with everything that can be counted and studied. But there are always
restrictions to that. Your research must have an impact to the lives of the people around you. For
example,finding the most frequent disease that affects the children of a town. The reader of the research
will know what to do to prevent that disease thus, more people will live a healthy life.
Data Source & Collection Methods:

There are two types for collecting data

1. Primary data
2. Secondary data

Secondary Data:

Secondary data are those which have already been collected by someone else and which have
already been passed through the statistical process. The Secondary data consist of reality available
compendices already complied statistical statements. Secondary data consists of not only published
records and reports but also unpublished records.

Here we done the analysis on basis of secondary data, which included-

 Balance sheet of company


 Profit and loss A/C of Sathe Synthetics
 Cost sheets, & Trail balance of five years

SAMPLING DESIGN

Sampling unit : Financial Statements.


Sampling Size : Last five years financial statements.
Tool Used for calculations: - MS-Excel.

TOOLS USED FOR ANALYSIS OF DATA

The data were analyzed using the following financial tools. They are

 Ratio analysis.

 Statement of changes in working capital.

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