CHAPTER 4

ANALYSIS OF WORKING CAPITAL OF RAVALI

SPINNERS PRIVATE LIMITED, KHANDAVALLI

1
Table no.4.1: STATEMENT OF CHANGES IN WORKING
CAPITAL FOR THE YEAR 2015-2016
(RS IN LAKHS)
Previous Current Changes in working
Particulars year year capital
2015 2016 Increase Decrease

A. Current assets:
Inventories 6848.47 3988.01 - 2855.46
Trade receivables 2247.36 3282.36 1035 -
Cash& bank balance 263.52 281.48 17.96 -
Loans and advances 495.89 861.54 365.65 -
Other current assets 1319.27 1820.93 501.66 -
11169.51 10234.32
Total current assets
B. Current liabilities:
-
Short 71817.58 6810.77
1006.81 -
term borrowings
Trade payables 185.39 22.42
162.97 -
Other CL 343.05 1630.67
- 1287.62
Total
current liabilities 8346.02 8463.86
(A-B)Net working capital 2823.49 1770.46
Decrease in WC - 1053.03

1053.03
TOTAL 2823.49 2823.49 4143.08 4143.08

2
INTERPRETATION:

The table 4.1 shows the statement of changes of working capital for the
period 2015-2016. All current assets are increased during the year 2016
when compared to 2015 but inventories decreased in 2016 when
compared to 2015. All current liabilities decreased but other current
liabilities increased in 2016 when compared to 2015. Hence there is a
decrease in working capital in 2016 when compared to 2015 i.e. 1053.03
lakhs.

3
Table no.4.2: STATEMENT OF CHANGES IN WORKING
CAPITAL FOR THE YEAR 2016-2017
(RS IN LAKHS)

Previous Current Changes in working

Particulars year year capital
2016 2017 Increase Decrease

A. Current assets:
Inventories 3988.01 7502.56 3514.55 -
Trade receivables 2269.24 3178.10 908.86 -
Cash& bank 281.47 116.80 - 164.67
Loans& advances 166.74 1299.59 1132.85 -
Other current assets 2104.47 2192.55 88.08 -
8809.93 14289.60
Total current assets
B. Current liabilities:
Short term borrowings 4677.65 5821.43
- 1143.78
Trade payables 22.42 50.39
- 27.97
Other current liabilities 2802.97 4496.83
- 1693.86
Short term provisions 26.21 184.93
- 158.32
7529.65 10553.58
Total current liabilities
(A-B) Net working capital 1280.28 3736.02
Net Increase in WC 2455.74 -
2455.74
TOTAL 3736.02 3736.02 5644.34 5644.34

4
INTERPRETATION:

The table 4.2 deals with the statement of changes of working capital for
the period 2016-2017. All current assets increased in 2017 when
compared to 2016. But cash balance decreased in 2017 when compared to
2015. All current liabilities increased during the year 2017 when
compared to 2015. Hence there exists an increase in working capital in
the year 2017 when compared to previous year 2016i.e. 2455.74 lakhs.

5
Table no.4.3: STATEMENT OF CHANGES IN WORKING
CAPITAL FOR THE YEAR 2017-2018
(RS IN LAKHS)

Previous Current Changes in working

Particulars year year capital
2017 2018 Increase Decrease
A. Current assets:
Inventories 7502.56 7029.78 - 472.78
Trade receivables 3178.10 3099.01 - 79.09
Cash& bank 116.80 617.95 501.15 -
Loans& advances 1299.59 188.72 - 1110.87
Other current assets 2192.55 1723.89 - 468.66
14289.60 12659.35
Total current assets
B. Current liabilities:
Short term borrowings 5821.43 6363.33
- 541.9
Trade payables 50.39 26.24
24.15 -
Other current 4496.83 3588.36
908.47 -
liabilities
Short term provisions 184.93 44.60
140.33 -
10553.58 10022.53
Total current liabilities
(A-B) Net working capital 3736.02 2636.82
Net decrease in WC - 1099.20
1099.20 -
TOTAL 3736.02 3736.02 2673.30 2673.30

6
INTERPRETATION:

The table 4.3 explains the statement of changes in working capital for the
period 2017-2018. All the current assets decreased in the year 2018 when
compared to 2017. But cash balance increased in 2018 when compared to
2017. All current liabilities decreased in 2018 but short term borrowings
increased when compared to the previous year 2017. Hence there is a
decrease in net working capital in the year 2018 when compared to 2017
i.e. 1099.20 lakhs.

7
Table no.4.4: STATEMENT OF CHANGES IN WORKING
CAPITAL FOR THE YEAR 2018-2019
(RS IN LAKHS)

Previous Current Changes in working

Particulars Year year capital
2018 2019 Increase Decrease
A. Current assets:
Inventories 7029.78 7810.89 781.11 -
Trade receivables 3099.01 3813.87 714.86 -
Cash& bank 617.95 729.36 111.41 -
Loans& advances 188.72 74.46 - 114.26
Other current assets 1723.89 2085.13 361.24 -

14513.71 18147.81
Total current assets
B. Current liabilities:
Short term borrowings 6363.33 9063.49
- 2700.16
Trade payables 26.24 44.89
- 18.65
Other current liabilities 3588.36 3362.31
226.05 -
Short term provisions 44.60 143.09
- 98.49
10022.53 12613.78
Total current liabilities
(A-B) Net working capital 2636.82 1899.93
Net decrease in WC - 736.89
736.89
TOTAL 3721.60 3721.60 2931.56 2931.56

8
INTERPRETATION:

The table 4.4 represents the statement of changes in working capital for
the period of 2018-2019. All current assets increased in 2019 but loans
and advances balance decreased when compared to the previous year
2018. All current liabilities increased except other current liabilities in the
year 2019. Hence there exists decrease in net working capital in the
current year 2019 when compared to previous year 2018 i.e. 736.89
lakhs.

9
Table no.4.5: STATEMENT OF CHANGES IN WORKING
CAPITAL FOR THE YEAR 2019-2020
(RS IN LAKHS)

Previous Current Changes in working

Particulars year year capital
2019 2020 Increase Decrease
A. Current assets:
Inventories 7810.89 8975.79 1164.9 -
Trade receivables 3813.87 5430.81 1616.94 -
Cash& bank 729.36 237.53 - 491.83
Loans& advances 74.46 93.68 19.22 -
Other current assets 2085.13 3410.00 1324.87 -

14513.71 18147.81
Total current assets
B. Current liabilities:
Short term borrowings 9063..49 9850.44
- 786.95
Trade payables 44.89 602.55
- 557.66
Other current liabilities 3362.31 3722.23
- 359.92
Short term provisions 143.09 250.99
- 107.90
12613.78 14426.21
Total current liabilities
(A-B) Net working capital 1899.93 3721.60
Net increase in WC 1821.67 -
1821.67
TOTAL 3721.60 3721.6 4125.93 4125.93

10
INTERPRETATION:

The table 4.5 represents the statement of changes in working capital for
the period 2019-2020. All current assets increased but cash balance
decreased in 2020 when compared to 2019. All current liabilities
increased in the year 2020. Hence there is an increase in net working
capital in the current year 2020 when compared to previous year 2019 i.e.
1821.67 lakhs.

11
 WORKING CAPITAL ANALYSIS OF RAVALI
SPINNERS PVT LTD
Table no.4.6: STATEMENT OF CHANGES IN WORKING
CAPITAL FOR FIVE YEARS 2015-2020 (RS IN LAKHS)

Increase/decrease
Year Current Current Working in working
assets liabilities capital capital

2015-2016 10234.32 8463.86 1770.46 -1053.03

2016-2017 14289.60 10553.58 3736.02 +2454.74
2017-2018 12659.35 10022.53 2636.82 -1099.20
2018-2019 14513.71 12613.78 1899.93 -736.89
2019-2020 18147.81 14426.21 3721.60 +1821.67

INTERPRETATION:

The table 4.6 represents the changes in working capital for five years. The
working capital was decreased in the years 2015-2016, 2017- 2018 and
2018- 2019 and working capital has been increased in the years 2015-
2017 and 2019- 2020.

Table no.4.7: GROSS AND NET WORKING CAPITAL OF

RAVALI SPINNING PVT LTD DURING THE YEAR
2015-2016

12
 Particulars 2015-2016
RS in lakhs %
Current assets:
Inventories 3988.01 38.97
Trade receivables 3282.36 32.07
Cash& bank 281.48 2.75
Loans& advances 861.54 8.41
Other current assets 1820.93 17.80
10234.32 100
GROSS WORKING CAPITAL(A)
Current liabilities:
Short term borrowings 6810.77 80.47
Trade payables 22.42 0.27
Other current liabilities 1630.67 19.26
8463.86 100
Total current liabilities(B)
NET WORKING CAPITAL(A-B) 1770.46

INTERPRETATION:

The table 4.7 explains the information about gross and net working
capital of ravali spinners pvt ltd for the year 2015-2016. It shows that all
current assets increased when compared to previous year 2012l5. But
inventories decreased in the current year 2016. Here net working capital
of this company decreased in the current year 2015 when compared to the
previous year 2015. So it is not easy for the company to meet its daily
requirements.

Table no.4.8: GROSS AND NET WORKING CAPITAL OF

RAVALI SPINNERS PVT LTD DURING THE YEAR
2016-2017
Particulars 2016-2017
RS in lakhs %
Current assets:

13
Inventories 7502.56 52.5
Trade receivables 3178.1 22.24
Cash & bank 116.8 0.82
Short term loan & advances 1299.59 9.1
Other current assets 2192.55 15.34
14289.6 100
GROSS WORKING CAPITAL(A)
Current liabilities:
Short term borrowings 5821.43 55.16
Trade payables 50.39 0.48
Other current liabilities 4496.83 42.6
Short term provisions 184.93 1.76
10553.58 100
Total current liabilities(B)
NET WORKING CAPITAL(A-B) 3736.02

INTERPRETATION:

The table 4.8 depicts the information about gross and net working capital
of ravali spinners pvt ltd for the year 2015-2017. It shows that all current
assets increased when compared to previous year 2015. But cash balance
decreased in the current year 2017. Here net working capital of this
company increased in the current year 2017 when compared to the
previous year 2015. So it could meet its daily requirements.

Table no.4.9: GROSS AND NET WORKING CAPITAL OF

RAVALI SPINNING PVT LTD DURING THE YEAR
2017-2018
Particulars 2017-2018
RS in lakhs %
Current assets:
Inventories 7029.78 55.53
Trade receivables 3099.01 24.48

14
Cash &bank 617.95 04.86
Short term loans & advances 188.72 01.49
Other current assets 1723.89 13.62
12659.35 100
GROSS WORKING CAPITAL(A)
Current liabilities:
Short term borrowings 6363.33 63.49
Trade payables 26.24 0.26
Other current liabilities 3588.36 35.80
Short term provisions 44.60 0.44
10022.53 100
Total current liabilities(B)
NET WORKING CAPITAL(A-B) 2636.82

INTERPRETATION:

The table 4.9 represents the information about gross and net working
capital of ravali spinners pvt ltd for the year 2017-2018. It shows that all
current assets decreased when compared to previous year 2017. But cash
balance increased in the current year 2018. Here net working capital of
this company decreased in the current year 2018 when compared to the
previous year 2018. So it is difficult for the company to meet its daily
requirements.

Table no.4.10: GROSS AND NET WORKING CAPITAL

OF RAVALI SPINNING PVT LTD DURING THE YEAR
2018-2019
Particulars 2018-2019
RS in lakhs %
Current assets:
Inventories 7810.89 53.82
Trade receivables 3813.87 26.28
Cash & bank 729.36 5.02

15
Loans & advances 74.46 0.51
Other current assets 2085.13 14.37
18147.81 100
GROSS WORKING CAPITAL(A)
Current liabilities:
Short term borrowings 9063.49 71.85
Trade payables 44.89 0.35
Other current liabilities 3362.31 26.65
Short term provisions 143.09 1.13
12613.78 100
Total current liabilities(B)
NET WORKING CAPITAL(A-B) 1899.63

INTERPRETATION:

The table 4.10 represents the information about gross and net working
capital of ravali spinners pvt ltd for the year 2018-2019. It shows that all
current assets increased when compared to previous year 2018. But loans
and advances decreased in the current year 2019. Here net working
capital of this company decreased in the current year 2019 when
compared to the previous year 2018. So it is not easy for the company to
meet its daily requirements.

Table no.4.11: GROSS AND NET WORKING CAPITAL

OF RAVALI SPINNING PVT LTD DURING THE YEAR
2019-2020
Particulars 2019-2020
RS in lakhs %
Current assets:
Inventories 8975.79 49.45
Trade receivables 5430.81 29.92
Cash & bank 237.53 1.30
Loans & advances 93.68 0.52

16
Other current assets 3410.00 18.80
18147.81 100
GROSS WORKING CAPITAL(A)
Current liabilities:
Short term borrowings 9850.44 68.28
Trade payables 602.55 4.18
Other current liabilities 3722.23 25.80
Short term provisions 250.99 1.74
14426.21 100
Total current liabilities(B)
NET WORKING CAPITAL(A-B) 3721.60

INTERPRETATION:

The table 4.11 shows the information about gross and net working capital
of ravali spinners pvt ltd for the year 2019-2020. It shows that all current
assets increased when compared to previous year 2019. But cash balance
decreased in the current year 2020. Here net working capital of this
company increased in the current year 2020 when compared to the
previous year 2019. So it is easy for the company to meet its daily
requirements.

Table no.4.12: CURRENT RATIO OF RAVALI SPINNERS

PRIVATE LIMITED FOR FIVE YEARS 2016-2020(RS IN LAKHS)

current assets
current ratio=
current liabilities

Year Current Current Current ratio

assets liabilities
2015-2016 10234.32 8463.86 1.20
2016-2017 14289.60 10553.58 1.35
2017-2018 12659.35 10022.53 1.26

17
 2018-2019 14513.71 12613.78 1.15
2019-2020 18147.81 14426.21 1.25

INTERPRETATION:

The table 4.12 deals with the information about current ratio of ravali
spinners pvt ltd for five the years 2016-2020. The standard norm of
current ratio is 2:1. But in all the five years company’s current ratio is
less than the standard norm. So the company’s current ratio does not
reached the standard norm 2:1. Current ratio in 2015- 2016 is 1.20 and it
is increased to 1.35 in 2016-2017 and current is decreased to 1.26 and
1.15 in the years 2017-2018&2018-2019 and again current ratio is
increased to 1.25 in 2019-2020 when compared to previous year 2018-
2019.

Chart-1: CURRENT RATIO POSITION OF RAVALI SPINNERS

PVT LTD DURING THE PERIOD 2016-17 TO 2019-20

18
 CURRENT RATIO
1.4

1.35

1.3

1.25

1.2

1.15

1.1

1.05

1
2015-2016 2016-2017 2017-2018 2018-2019 2019-20

19
Table no.4.13: QUICK RATIO OF RAVALI SPINNERS PRIVATE
LIMITED FOR FIVE YEARS i.e. 2016-2020(RS IN LAKHS)

Quick assets
Quick ratio=
Current liabilities

Quick assets = current assets- inventories

Year Current Inventories Quick Current Quick

assets assets liabilities ratio
2015-2016 10234.32 3988.1 6246.31 8463.86 0.74
2016-2017 14289.60 7502.56 6787.04 10553.58 0.64
2017-2018 12659.35 7029.78 5629.57 10022.53 0.56
2018-2019 14513.71 7810.89 6702.82 12613.78 0.53
2019-2020 18147.81 8975.79 9172.02 14426.21 0.64

INTERPRETATION:

The table 4.13 explains the information about quick ratio of ravali
spinners pvt ltd for five years 2016-2020. The standard norm of quick
ratio is 1:1. But in all the five years company’s current ratio is less than
the standard norm. Quick ratio in the year 2015-2016 is 0.74 and it is
decreased to 0.64, 0.56, 0.53 in the years 2016-2017,2017- 2018,2018-
2019 and quick ratio is again increased to 0.64 in the year 2019-2020
when compared to the previous years.

20
Chart-2: QUICK RATIO POSITION OF RAVALI SPINNERS PVT
LTD DURING PERIOD 2015-16 TO 2019-20

Quick ratio
0.8

0.7

0.6

0.5
Quick ratio
0.4

0.3

0.2

0.1

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

21
 Table no.4.14: CASH RATIO OF RAVALI SPINNERS PRIVATE
LIMITED FOR FIVE YEARS i.e. 2016-2020 (RS IN LAKHS)
Cash
Cash ratio=
Current liabilities

Year Cash Current Cash ratio

liabilities
2015-2016 281.48 8463.86 0.03
2016-2017 116.80 10553.58 0.01
2017-2018 617.95 10022.53 0.06
2018-2019 729.36 12613.78 0.05
2019-2020 237.53 14426.21 0.02

INTERPRETATION:

The table 4.14 represents the information about cash ratio of ravali
spinners pvt ltd. It shows that the cash ratio of all the five years is less
than one. Cash ratio in the year 2015-2016 is 0.03 and it decreased to
0.01 in the year2016- 2017. And again cash ratio increased to 0.06 in the
year 2017-2018 when compared to 2016-2017 and cash ratio decreased to
0.05, 0.02 in the years 2018-2019, 2018-2020 when compared to the
previous years.

22
Chart-3: CASH RATIO POSITION OF RAVALI SPINNERS PVT
LTD DURING THE PERIOD 2015-16 TO 2019-20

Cash ratio
0.07

0.06

0.05

0.04 Cash ratio

0.03

0.02

0.01

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.15: NET WORKING CAPITAL RATIO OF RAVALI

SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e. 2016-2020

23
 (RS IN LAKHS)

Net working capital

Net working capital ratio=
Net assets

Year Net working Net assets Net working

capital capital ratio
2015-2016 1770.46 9287.00 0.19
2016-2017 3736.02 12417.38 0.30
2017-2018 2636.82 12672.21 0.20
2018-2019 1899.93 14189.41 0.13
2019-2020 3721.60 14673.89 0.25

INTERPRETATION:

The table 4.15 represents the information about the net working capital
ratio of ravali spinners pvt ltd. It shows that net working capital ratio in
all the five years is less than one. Net working capital ratio in the year
2015-2016 is 0.19 and it increased to 0.30 in the year 2016-2017. And net
working capital ratio is deceased to 0.20, 0.13 in the years 2017-
2018,2018-2019 and again it increased to 0.25 in the year 2016-2020
when compared to the previous years.

24
 Chart-4: NET WORKING CAPITAL RATIO POSITION OF
RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-2016 TO 2019-2020

Net working capital ratio

0.35

0.3

0.25

0.2 Net working capital ratio

0.15

0.1

0.05

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.16: WORKING CAPITAL TURNOVER RATIO OF

RAVALI SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e.
2015-2020

(RS IN LAKHS)

25
 Sales
Working capital turnover ratio=
Net working capital

Year Sales Net working Working

capital capital turnover
ratio
2015-2016 19660.10 1770.46 11.10
2016-2017 23822.58 3736.02 6.37
2017-2018 22367.40 2636.82 8.48
2018-2019 33279.74 1899.93 17.51
2019-2020 39409.45 3721.60 10.58

INTERPRETATION:

The table 4.16 represents the information about working capital turnover
ratio of ravali spinners pvt ltd. It shows that the working capital turnover
ratio is higher, so the company is more active in the year 2015-2016 and
it is lower in the year 2016-2017, 2017-2018 so the company has
inefficient utilisation of working capital. And working capital turnover
ratio is higher in the years 2018-2019, 2019-2020 so the company is more
active when compared to the previous years.

26
Chart-5: WORKING CAPITAL TURNOVER RATIO POSITION
OF RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-2016 TO 2016-20

Working capital turnover ratio

20
18
16
14
12
Working capital turnover ratio
10
8
6
4
2
0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.17: INVENTORY TURNOVER RATIO OF RAVALI

SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e. 2016-2020

(RS IN LAKHS)

27
 Sales
Inventory turnover ratio=
Average inventory

Year Sales Average Inventory

inventory turnover ratio
2015-2016 19660.10 5415.73 3.63
2016-2017 23822.58 5745.28 4.14
2017-2018 22367.40 7266.17 3.07
2018-2019 33279.74 7420.33 4.48
2019-2020 39409.45 8393.34 4.69

INTERPRETATION:

The table 4.17 deals with the information about inventory turnover ratio
of ravali spinners pvt ltd. It shows that the inventory turnover in the year
2015-2016 is 3.63 and it increased to 4.14 in the year 2016-2017 when
compared to the previous year 2015-2016. Inventory turnover ratio in the
year 2017-2018 decreased to 3.07 and again it is increased to 4.48, 4.69
in the years2018-2019, 2019-2020 when compared to the previous years.

28
 Chart-6: INVENTORY TURNOVER RATIO POSITION OF
RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-16 TO 2019-20

Inventory turnover ratio

5
4.5
4
3.5
3
Inventory turnover ratio
2.5
2
1.5
1
0.5
0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.18: DEBTORS TURNOVER RATIO OF RAVALI

SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e. 2016-2020

(RS IN LAKHS)

29
 turn Credit sales
Debtors =
ratio Average debtors

Year Credit sales Average Debtors

debtors turnover ratio
2015-2016 19660.10 2764.85 7.11
2016-2017 23822.58 2723.67 8.74
2017-2018 22367.40 3138.55 7.12
2018-2019 33279.74 3456.44 9.62
2019-2020 39409.45 4622.34 8.52

INTERPRETATION:

The table 4.18 depicts the information about debtor turnover ratio of
ravali spinners pvt ltd. It shows that the debtor’s turnover ratio in the year
2015-2016 is 7.11 and it increased to 8.74 in the year 2016-2017.
Debtor’s turnover ratio decreased to 7.12 in the year 2017-2018 when
compared to previous year and it increased to 9.62 in the year 2018-2019
and the ratio decreased to 8.52 in the year 2019-2020 when compared to
the previous year.

Chart-7: DEBTORS TURNOVER RATIO POSITION OF RAVALI

SPINNERS PVT LTD DURING THE PERIOD

30
 2015-16 TO 2019-20

Debtors turnover ratio

250

200

150
Debtors turnover ratio

100

50

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.19: CREDITORS TURNOVER RATIO OF RAVALI

SPINNNERS PRIVATE LIMITED FOR FIVE YEARS i.e. 2016-
2020

(RS IN LAKHS)

31
 Credit purchases
Creditors turnover ratio=
Average creditors

Year Credit Average Creditors

purchases creditors turnover ratio
2015-2016 8171.85 103.9 78.65
2016-2017 17765.94 36.40 488.07
2017-2018 14065.29 38.31 367.14
2018-2019 22632.48 35.56 636.45
2019-2020 27472.63 323.72 84.85

INTERPRETATION:

The table 4.19 represents the information about the creditor’s turnover
ratio of ravali spinners pvt ltd. It shows that the creditor’s turnover ratio
in the year 2015-2016 is 78.65 and the ratio increased to 488.07 in the
year 2016-2017. Creditor’s turnover ratio in the year 2017- 2018
decreased to 367.14 and it increased to 636.14 in the year 2018-2019 and
decreased to 84.85 in the year 2019-2020 when compared to the previous
year.

Chart-8: CREDITORS TURNOVER RATIO POSITION OF

RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-16 TO 2019-20

32
 Creditors turnover ratio
700

600

500

400 Creditors turnover ratio

300

200

100

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.20: RAW MATERIAL CONVERSION PERIOD OF

RAVALI SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e.
2015-2020

Raw material inventory

Raw material conversion period= × 360
Raw material consumed

33
 Year Raw material Raw material Raw material
inventory x 360 consumed conversion
period (in days)
2015-2016 2885.74 x 360 11742.29 88.5
2016-2017 5605.08 x 360 15046.61 134
2017-2018 15046 x 360 21687.11 111.5
2018-2019 5569.02 x 360 21687.11 92
2019-2020 6989.03 x 360 26052.62 96.5

INTERPRETATION:

The table 4.20 deals with the information about the raw materials
conversion period of ravali spinners pvt ltd. It shows that the raw
materials conversion period in the year 2015-2016 is 88.5 days and it
increased to 134 days in the year 2016-2017 when compared to previous
year 2015-2016. Raw materials conversion period decreased to 111.5
days and 92 days in the years 2017-2018, 2018-2019 and it increased to
96.5 days in the year 2019-2020 when compared to the previous year
2018-2019.

Chart-9: RAW MATERIALS CONVERSION PERIOD POSIYION

OF RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-16 TO 2019-20(IN DAYS)

34
 Used

Raw material conversion period

160

140

120

100
Raw material conversion period
80

60

40

20

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.21: WORK-IN-PROGRESS CONVERSION PERIOD OF

RAVALI SPINNERS PRIVATE LIMITED FOR FIVE YEARS

i.e. 2016-2020

35
 WIP inventory
Work −¿− progress conversion period= × 360
Cost of production

Year WIP inventory Cost of WIP conversion

x 360 production period(in days)
2015-2016 317.26 x 360 3282.35 35
2016-2017 355.34 x 360 7502.56 17
2017-2018 394.56 x 360 7029.78 20
2018-2019 381.92 x 360 7810.89 17.5
2019-2020 464.36 x 360 8975.79 18.5

INTERPRETATION:

The table 4.21 represents the information about the work-in-progress

conversion period of ravali spinners pvt ltd. It shows that the WIP
conversion period in the year 2015-2016 is 35 days and it decreased to 17
days in the year 2016-2017 when compared to the previous year 2015-
2016. WIP conversion period increased to 20 days in the year 2017-2018
but it decreased to 17.5 days in the year 2018-2019 and again it increased
to 18.5 days in the year 2019-2020 when compared to the year 2018-
2019.

Chart-10: WORK-IN-PROGRESS CONVERSION PERIOD

POSITION OF RAVALI SPINNERS PVT LTD DURING THE
PERIOD

2015-16 TO 2019-20

36
 Work-in-progress conversion period
40

35

30

25 Work-in-progress conversion
period
20

15

10

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.22: FINISHED GOODS CONVERSION PERIOD OF

RAVALI SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e.
2016-2020

37
 Finished goods inventory
Finished goods conversion period= ×360
Cost of goods sold

Year FG inventory x Cost of goods FG conversion

360 sold period(in days)
2015-2016 406.23 x 360 11827.31 12
2016-2017 1105.57 x 360 14251.39 28
2017-2018 1398.97 x 360 14537.78 34.5
2018-2019 1150.76 x 360 21850.89 19
2019-2020 933.14 x 360 26307.73 13

INTERPRETATION:

The table 4.22 shows the information about the finished goods conversion
period of ravali spinners pvt ltd. It shows that the finished goods
conversion period in the year 2015-2016 is 12 days and it increased to 28
days and 34.5 days in the years 2016-2017 and 2017-2018 when
compared to the previous years. Again finished goods conversion period
decreased to 19 days and 13 days in the years 2018-2019 and 2019-2020
when compared to the previous years.

Chart-11: FINISHED GOODS CONVERSION PERIOD POSITION

OF RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-16 TO 2019-20

38
 Finished goods conversion period
40

35

30

25 Finished goods conversion

period
20

15

10

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.23: DEBTORS CONVERSION PERIOD OF RAVALI

SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e. 2016-2020

Debtors
Debtor ' sconversion period= ×360
Credit sales

39
 Year Debtor’s x 360 Credit sales Debtor’s
conversion
period(in days)
2015-2016 3282.36 x 360 19660.10 60
2016-2017 3178.10 x 360 23822.58 48
2017-2018 3099.01 x 360 22367.40 50
2018-2019 3813.87 x 360 33279.74 41
2019-2020 5430.81 x 360 39409.45 49

INTERPRETATION:

The table 4.23 represents the information about the debtor’s conversion
period of ravali spinners pvt ltd. It shows that the debtor’s conversion
period in the year 2015-2016 is 60 days and it decreased to 48 days in the
year 2016-2017. Debtor’s conversion period increased to 50 days in the
year 2017-2018, it decreased to 41 days in the year 2018-2019 and again
it increased to 49 days in the year 2019-2020 when compared to the
previous year 2018-2019.

Chart-12: DEBTORS CONVERSION PERIOD POSITION OF

RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-16 TO 2019-20

40
 Sales
70

60

50

40 Sales

30

20

10

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.24: PAYMENT DEFERRED PERIOD OF RAVALI

SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e. 2013-2017

Creditors
Payment deferred period= ×360
Credit purchases

Year Creditors x 360 Credit Payment

41
 purchases deferred
period(in days)
2015-2016 22.42 x 360 8171.85 1
2016-2017 50.39 x 360 17765.94 1
2017-2018 26.24 x 360 14065.29 0.6
2018-2019 44.89 x 360 22632.48 0.7
2019-2020 602.55 x 360 27472.63 8

INTERPRETATION:

The table 4.24 represents the information about the payment deferred
period of ravali spinners pvt ltd. It shows that the payment deferred
period in the years 2015-206,2016- 2017 is 1 day and it decreased to 0.6,
0.7 days in the years 2017-2018, 2018-2019 when compared to previous
year. Payment deferred period increased to 8 days when compared to the
previous years.

Chart-13: PAYMENT DEFERRED PERIOD POSITION OF

RAVALI SPINNERS PVT LTD DURING THE PERIOD

2015-16 TO 2019-20

42
 Payment deferred period
9

5 Payment deferred period

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.25: GROSS OPERATING CYCLE OF RAVALI

SPINNERS PRIVATE LIMITED FOR FIVE YEARS i.e. 2016-2020

Gross operating cycle=Raw material conversion period +work ∈ progress conversion period+ finished

Year RMCP WIPCP FGCP DCP GOC(in

days)
2015-2016 88.5 35 12 60 195.5

43
2016-2017 134 17 28 48 227
2017-2018 111.5 20 34.5 50 216
2018-2019 92 17.5 19 41 169.5
2019-2020 96.5 18.5 13 49 177

INTERPRETATION:

The table 4.25 represents the information about the gross operating cycle
of ravali spinners pvt ltd. It shows that the gross operating cycle in the
year 2015-2016 is 195.5 days and it increased to 227 days and 216 days
in the years 2016-2017 and 2017-2018. Gross operating cycle decreased
to 169.5 days and 177 days in the years 2018-2019, 2019-2020when
compared to the previous years.

Chart-14: GROSS OPERATING CYCLE POSITION OF RAVALI

SPINNERS PVT LTD DURING THE PERIOD

2015-16 TO 2019-20

44
 Gross operating cycle
250

200

150
Gross operating cycle

100

50

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Table no.4.26: NET OPERATING CYCLE OF RAVALI SPINNERS

PRIVATE LIMITED FOR FIVE YEARS i.e. 2015-2020

Net operating cycle=Gross operating cycle−Payment deferred period

Year Gross operating Payment Net operating

cycle deferred period cycle(in days)
2015-2016 195.5 1 194.5
2016-2017 227 1 226

45
 2017-2018 216 0.6 215.4
2018-2019 169.5 0.7 168.8
2019-2020 177 8 169

INTERPRETATION:

The table 4.26 depicts the information about the net operating cycle of
ravali spinners pvt ltd. It shows that the net operating cycle in the year
2015-2016 is 194.5 days and it increased to 226 days and 215.4 days in
the years 2016-2017 and 2017-2018. Net operating cycle decreased to
168.8 days and 169 days in the years 2017-2018 and 2018-2019 when
compared to the previous years.

Chart-15: NET WORKING CAPITAL POSITION OF RAVALI

SPINNERS PVT LTD DURING THE PERIOD

2015-16TO 2019-20

46
 Net operating cycle
250

200

150
Net operating cycle

100

50

0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

47