A

PROJECT REPORT
ON

“STUDY OF WORKING CAPITAL

MANAGEMENT”
OF
TATA AUTOCOMP HENDRICKSON
SUSPENSIONS PVT. LTD.
CHAKAN, PUNE.

SUBMITTED TO
Savitribai Phule Pune University
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF
MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY
HARSHADA ASHOK NAIKARE

UNDER THE GUIDANCE OF

Dr. Mahavir Shetiya

S. N. G. INSTITUTE OF MANAGEMENT &

RESEARCH,
Rajgurunagar, Pune - 410512
2021-2022
 PROJECT WORK CERTIFICATE

This is to certify that Ms. Harshada Ashok Naikare a student of MBA 2nd
year (Financial Management) from S.N.G. Institute of Management &
Research Pune has completed has project work is our organization on the
topic of “Study of Working Capital Management” for the period 01st
October, 2021 to 31st December, 2021.

We wish him every success in his future endavours.

M/s TATA AutoComp Hendrickson Suspensions Pvt. Ltd.

 STUDENT’S DECLARATION

I undersigned hereby declare that, the project entitled, “Study of Working

Capital Management in M/s TATA AutoComp Hendrickson Suspensions
Private Limited” is executed as per the course requirement of two-year full
time MBA program of Savitribai Phule University of Pune. This report has
not been submitted by me or any other person to any other University or
Institution for a degree or diploma course. This is my own and original work.

Place: Khed, Pune Harshada Ashok Naikare

Date: 29th January, 2022 MB20107111

 ACKNOWLEDGEMENT

While presenting the report of my project, I have great pleasure in

acknowledgment the help rendered and guidance to me by various people
during the course of my project.
I would like to express my sincere thanks to my project external guide Mr.
Ravinder Guleria - CFO and Mr. P N Tiwari Manager of M/s TATA
AutoComp Hendrickson Suspensions Pvt. Ltd. For providing me permission,
guidance and cooperation during the study period.
I would like to express my sincere thanks and gratitude to Dr. Mahavir
Shetiya Sir S N G Institute of Management & Research, Rajgurunagr, Pune,
for her excellent guidance and support throughout this project work.
I would like to express my gratitude to all those who gave me the possibilities
to complete this report. I would like thank Dr. K. N. Jagtap Sir, Director, S
N G Institute of Management & Research, Rajgurunagr, Pune.
Finally, I wish to thanks my friends, faculty members and all others who have
helped me in completing this project work successfully.
I thanks to all above the almighty for my successful completion of this
project.

Harshada Ashok Naikare

 SIP Format
CONTENTS (Index)
Chapter
TITLE Page No
No.
COLLEGE CERTIFICATE I

COMPANY CERTIFICATE II

STUDENT’S DECLARATION III

ACKNOWLEDGEMENT IV

I Executive Summary

II Objectives of the Study

III Industry Profile

IV Company Profile

V Literature Review / Theoretical Background

VI Research Methodology

VII Data Analysis and Interpretation

VIII Findings

IX Conclusions

X Suggestions

BIBLIOGRAPHY

ANNEXURE
 CHAPTER-I

EXECUTIVE SUMMARY

This is a study conducted to focus on the short term financial

management or working capital management. Working capital refers to
that part of the firm’s capital which required for financing short term or
current asset. Adequate amount of working capital is required by the
firm in the form of different activities to continue uninterrupted and to
tackle problems that may arise. Financial viability structure and
utilization of working capital in the company is analyzed for three years
from 2019-2021
The study is mainly based on the secondary data. Ratios and statement
of changes in working capital are the tools used for the study. The
interpretations are summarized and suggestions are provided based on it

INDRODUCTION
Accordingly, I have assigned the project work on the topic of study of
“Working Capital Management” in M/s TATA AutoComp
Hendrickson Suspensions Pvt. Ltd.
Working capital management refers to a company managerial
accounting strategy designed to monitor and utilize the two
components of working capital, current assets and current liabilities, to
ensure the most financially efficient operation of the company. The
primary purpose of working capital management is to make sure the
company always maintains sufficient cash flow to meet its short-term
operating costs and short-term debt obligations.

Working capital management is concerned with the problems that arise

in attempting to manage the current assets, the current liabilities
and the interrelationship that exists between them. The term current
assets refer to those assets which in the ordinary course of business
can be, or will be, converted in to cash within one year without
undergoing a diminution in value and without disrupting the
operation of the firm.

The goal of working capital management is to ensure that a firm is able

to continue its operations and that it has sufficient ability to satisfy
both maturing short-term debt and upcoming operational expenses.
The management of working capital involves managing inventories,
accounts receivable and payable, and cash. The excess of current
assets of a business organization over its current liabilities is termed as
the working capital of that organization.

The major current assets are cash, marketable security, account

receivable and inventory. Current liabilities are those liabilities which
are intended, at their inception, too be paid in the ordinary course of
business, within a year, out of the current assets or earning of the
concern. The basic current liabilities are account payable, bills
payable, bank overdraft and outstanding expenses.
 CHAPTER-II

OBJECTIVES OF THE STUDY

The study is conducted at M/s TATA AutoComp Hendrickson

Suspensions Pvt. Ltd. The study of working capital management is
purely based on secondary data and all the information is available
within the company itself in the form of records. To get proper
understanding of this concept, I have done the study of the balance
sheets, profit and loss A/C. So, scope of the study is limited up to the
availability of official records and information provided by the finance
department. The study is supposed to be related to the period of last three
years.

The main scope of the study was to put into practical the
theoretical aspect of the study into real lifework 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 three year’s balance sheet.

The primary objective of working capital management is to ensure a

smooth operating cycle of the business. Secondary objectives are to
optimize the level of working capital and minimize the cost of such
funds. The superior objective of financial management is wealth
maximization and that can be gained by profit maximization
accompanied by sustainable growth and development. For sustainable
growth and development, the objectives of all the stakeholders including
customers, suppliers, employees, etc should be aligned to the growth of
the organization.
Every project has its own limitation. The study is restricted for a
period of three years only commencing from 2019-2021. So it shows
limited period data is considered. As the financial information is
confidential, they do not want to share accurate data or information.
Study duration is very short (three months only. Limited interaction with
concerned head because of their busy schedule.
 CHAPTER-III

INDUSTRY PROFILE

Tata AutoComp manufactures auto parts. The Company produces and

supplies range of suspensions for system pusher, heavy duty tippers,
buses, trucks, and tractors. Tata AutoComp Hendrickson Suspensions
serves customers in India.

Hendrickson is a company that designs and manufactures air suspension

systems and components for the heavy-duty transportation market. Its key
products include truck, tractor, and trailer suspensions, lifetable
suspensions, steel leaf springs, bumpers, and stamped components.
 CHAPTER-IV

COMPANY PROFILE

Tata AutoComp Hendrickson Suspensions Private Limited is a 50:50 Joint

Venture between Tata AutoComp Systems Limited and Hendrickson
Investments Asia JV was formed in 2006. Ever since being formed, THSL
has been focusing on providing suspension solutions customized for
Indian operating conditions and maintenance practices. THSL has been
major contributor for the game changer 8x2 truck in India with its Lift
Axle Suspension system. It has also played significant role in
development of 37t truck segment. Leveraging on its experience of Indian
operating conditions and strong product knowledge of Hendrickson with
global operations, the company is developing a new series of products for
truck and bus applications in association with OEMs. Product lines
include:
 Auxiliary Suspensions (Lift axle) systems Pusher/ Tag position.
Bogie Suspensions systems for Tandem Drive axles for tippers in
medium and Heavy Duty Tippers.
 Advanced Rubber –metal suspension systems for tandem axles in
Trucks, Tippers and Haulage Tractors.
 Air suspension systems for trucks and tractors application.
 Parabolic Springs for trucks, tippers and tractors application.

VISION:
By 2026, Tata AutoComp will be amongst the top 5 auto-component
companies in India by enabling mobility solutions with safe and
sustainable products and services, exceeding customer expectations.
MISSION:
Deliver value to all stakeholders by differentiation through safety, quality
and constant innovation.
VALUES:
Integrity: We must conduct our business fairly, with honesty and
transparency. Everything we do must stand the test of public scrutiny.
Pioneering: We will be bold and agile, courageously taking on
challenges, using deep customer insight to develop innovative solutions.
Excellence: We must constantly strive to achieve the highest possible
standards in our day-to-day work and in the quality of the goods and
services we provide.
Unity: We must work cohesively with our colleagues across the group
and with our customers and partners around the world, building strong
relationships based on tolerance, understanding and mutual cooperation.
Responsibility: We must continue to be responsible, sensitive to the
countries, communities and environments in which we work, always
ensuring that what comes from the people goes back to the people many
times over.
 CHAPTER-V

Literature Review / Theoretical Background

Introduction of Working capital management:
Working capital management refers to a company's managerial accounting
strategy designed to monitor and utilize the two components of
working capital, current assets and current liabilities, to ensure the most
financially efficient operation of the company. The primary purpose of
working capital management is to make sure the company always
maintains sufficient cash flow to meet its short-term operating costs and
short-term debt obligations.
Working capital management is concerned with the problems that arise in
attempting to manage the current assets, the current liabilities and the
interrelationship that exists between them. The term current assets refer to
those assets which in the ordinary course of business can be, or will be,
converted in to cash within one year without undergoing a diminution in
value and without disrupting the operation of the firm.
The goal of working capital management is to ensure that a firm is able to
continue its operations and that it has sufficient ability to satisfy both
maturing short-term debt and upcoming operational expenses. The
management of working capital involves managing inventories,
accounts receivable and payable, and cash. The excess of current assets
of a business organization over its current liabilities is termed as the
working capital of that organization.
The major current assets are cash, marketable security, account receivable
and inventory. Current liabilities are those liabilities which are intended, at
their inception, too be paid in the ordinary course of business, within a
year, out of the current assets or earning of the concern. The basic
current liabilities are account payable, bills payable and bank overdraft.
Definitions of Working capital management:
The term working capital is commonly used for the capital required for
day-to-day working in a business concern, such as for purchasing raw
material, for meeting day-to-day expenditure on salaries, wages, rents
rates, advertising etc. But there is much disagreement among various
financial authorities (Financiers, accountants, businessmen and
economists) as to the exact meaning of the term working capital.

Working capital is defined as, -

“Working Capital is the amount of funds necessary to cover the
cost of operating the enterprise”. Prof. Shubin

“Working capital is descriptive of that capital which is not fixed, but

the more common use of working capital is to consider it as the
difference between the book value of current asset and current
liabilities”. Prof. Hoogland

Calculation of Working capital:

The net working capital formula is calculated by subtracting the current
liabilities from the current assets. Here is what the basic equation looks
like:
Net working capital = current assets - current liabilities

Typical current assets that are included in the net working capital
calculation are cash, accounts receivable, inventory, and short-term
investments. The current liabilities section typically includes accounts
payable, accrued expenses and taxes, customer deposits, and other trade
debt.

A positive net working capital is better than a negative one. A positive

calculation shows creditors and investors that the company is able to
generate enough from operations to pay for its current obligations with
current assets.

A negative net working capital, on the other hand, shows creditors and
investors that the operations of the business are not producing enough to
support the business current debts.

Classification of Working capital:

Working Capital may be classified in two ways,

a) Concept based working capital

b) Time based working capital

Concept based working capital:

1) Gross Working Capital: It refers to the firm’s investment in total
current or circulating assets.
2) Net Working Capital: The term - Net Working Capital‖ has been
defined in two different ways:
3) It is the excess of current assets over current liabilities. This is, as a
matter of fact, the most commonly accepted definition. Some people
define it as only the difference between current assets and current
liabilities.
4) Alternate definition of net working capital is that portion of a firm’s
current assets which is financed by long-term funds.
Time based working capital:
Permanent working capital: This refers to that minimum amount of
investment in all current assets which is required at all times to
carry out minimum level of business activities. In other words, it
represents the current assets required on a continuing basis over
the entire year.

Temporary working capital: This refers to that minimum amount of

investment in all current assets which is required at all times to
carry out minimum level of business activities. In other words, it
represents the current assets required on a continuing basis over
the entire year.
DETERMINANTS OF WORKING CAPITAL

The factors influencing the working capital decisions of a firm may be

classified as two groups, such as

I. Internal factors
II. External factors

The internal factors include

1. Nature of business size of business,
2. Firm’s product policy
3. Firm’s credit policy
4. Availability of credit
5. Growth and expansion of business
6. Profit margin and dividend policy
7. Operating efficiency of the firm
8. Co-ordinating activities in firm

The external factors include

1. Business fluctuations,
2. Changes in the technology,
3. Infrastructural facilities,
4. Import policy and
5. The taxation policy etc.
RATIO ANALYSIS
Ratio analysis is one of the most powerful tool and widely used technique
of analyzing financial statements. It is the process of computing and
interpreting relationship between the items of the financial statements
for arriving at conclusions about the financial position and performance
of an enterprise. With the help of ratios, the financial statements can
be analyzed more clearly and scientific decisions are made from such
analysis. Ratio analysis can also be defined as the yard stick that
provides a measure of relationship between two accounting figures.
Ratio analysis can be used both in the trend or dynamic analysis and
statistical analysis.

Financial ratio analysis is the calculation and comparison of ratios which

are derived from the information in a company’s financial condition, its
operations and attractiveness as an investment. Financial ratios are
calculated from one or more pieces of information from a company’s
financial statements. For example, the ―gross margin‖ is the gross profit
from operations divided by the total sales or revenues of a company,
expressed in percentage terms. In isolation, a financial ratio is a useless
piece of information. In context, however a financial ratio can give a
financial analyst an excellent picture of a company’s situation and the
trends that are developing.

Financial ratio analysis groups the ratio into categories which tell us
about different facets of a company’s finances. Some ratios which are
most importance are listed below

1. Liquidity Ratio.
2. Leverage Ratio
3. Profitability Ratio.
4. Activity Ratio.
REVIEW OF LITERATURE / RESOURCH PAPER

Working capital management is the key area of financial management and

plays an important role in any industry. A number of researchers have
conducted research on the subject and its various components. This
Chapter is an overview of the research that has been carried out on the
subject. Some of the most relevant articles have been reviewed here as a
part of my research work.

As the title of the thesis broadly deals with working capital management of
the selected manufacturing units of Chakan, Pune the need arises to carry
out literature review under two major headings:

1. Working Capital Management

2. Components of Working Capital

It deals with all the aspects of working capital of which in depth study has
been carried out as discussed below.

1. Bhatt V. V. (1972) widely touches upon a method of appraising working

capital finance applications of large manufacturing concerns. It states that
similar methods need to be devised for other sectors such as agriculture,
trade etc. The author is of the view that banks while providing short-term
finance, concentrate their attention on adequacy of security and repayment
capacity. On being satisfied with these two criteria they do not generally
carry out any detail appraisal of the working of the concerns.
2. Dr. Khatik S. K. and Jain Rashmi (2009) state that the management of
working capital is one of the most important and key resources of an
organization for its day-to-day operations. Working capital can be taken as
funding resources for routine activities of business. It is the most vital and
important part of fund management and profitability for business. The
writer has analyzed the working capital position of MPSEB (Madhya
Pradesh State Electricity Board) by ratio analysis technique and it was
found that the position of current ratio, quick ratio, acid-test ratio, working
capital ratio, inventory turnover ratio are not up to the standard benchmark

3. Matarneh, Bashar (2012) is about small scale industries and its

important role in the Indian economy. This paper analyses the problem of
working capital management of Small Scale Industries (SSI) in Rajasthan
for a period of five years. As we know the small scale industries have to
decide about the sources of funds which can be availed to make investment
in the current assets. From the study, it has been found that the working
capital management is to decide
the pattern of financing of the current assets, which is one of the biggest
problems of working capital management. The problem of working capital
management of small scale industries is not new, it prevails all over India.
The SSI units have low capital base where investment on fixed assets is
found to be less. Without the help of government support and cooperation
from financial institutions, it was found to be very difficult to solve the
problem of working capital management of SSIs of Rajasthan in particular
and of India in general.
4. Chandra H. and Selvaraj A. (2012) analyses the working capital
management of selected Steel Companies in India for the period from
2000-01 to 2009-10. To measure the effective utilization of working
capital, operating cycle and cash conversion cycle were used. Besides, to
measure the determinants of cash conversion cycle, the Kieschnick model
was used. The study concludes with the observation that the size of a
company plays a vital role in determining the efficiency of its working
capital management. The working capital ratios across the small, medium
and large sized steel companies have played a vital role in determining the
working capital management of the selected Indian steel companies.

5. Jain Arvind and Jain Nisha (1997) study the importance of inventory
management in scooter manufacturing companies in India. The main
objective of this paper is to examine the position of inventory control
techniques in scooter manufacturing companies in India. And to suggest
tools and techniques for overcoming the present problems in inventory
management. At the end of the study the authors suggest that if the units
make an honest effort to implement the techniques as suggested by them,
present problems in inventory management can certainly be overcome.
 CHAPTER-VI

RESEARCH METHODOLOGY
Research design:

Research design is the arrangement of conditions for collection and

analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedure. It constitutes the
blueprint for the collection, measurement and analysis of data. The design
adopted in the study is both descriptive and analytical done at branch
level.

Statement Problem:
This project deals with the study about - Working Capital Management‖
in M/s TATA AutoComp Hendrickson Suspensions Pvt. Ltd. The
working capital management is very important term. It involves the
study of day-to-day affairs of the company. The motive behind the
study is to develop an understanding about the working capital
management in the running business organization and to help the
company in developing the efficient working capital management.
Therefore, it helps in future planning and control decisions.

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 thing
that is absolutely necessary 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.
Sources of Data:

The analysis of financial viability of the company necessitates accurate

and reliable data. Therefore, the methodology used for the collection of
information. There are mainly two types of data. Primary data

Secondary data

Primary data:

Most of the information is collected from internal discussion with various

officials in the finance department and concerned executive of other
department.

Secondary data:

The information collection from: Annual reports, published records and

reference books, official websites. Executive and staff of financial
accounting department.

Tool of Analysis:

There are some of the tools, which are relevant for the study of ration
analysis and performance of TATA AutoComp Hendrickson.

Net working capital

Ratio analysis

Balance sheet
Limitations of the study:

The study is restricted for a period of three years only commencing

from 2019-2021. So it shows limited period data is considered.

As the financial information is confidential, they do not want to share

accurate data or information.

Study duration is very short (three months only).

Limited interaction with concerned head because of their busy schedule.

 CHAPTER-VII

DATA ANALYSIS
STATEMENT OF CHANGES IN WORKING CAPITAL:
Working capital means the excess of current assets over current liabilities.
Statement of changes in working capital is calculated for comparing the
figure of two consecutive years.

THE GENERAL RULE

a) An increase in current asset will increases working capital
b) A decrease in the current asset will decreases working capital
c) An increase in current liabilities will decreases working capital
d) A decrease in current liabilities will increases working capital.
The change in the amount of any current asset or current liability in the
current balance sheet as compared to that of previous balance sheet either
results in increase or decrease in working capital. The difference is
recorded for each individual current asset and current liability.

In case, current assets in the current period are more than in the previous
period, the effect is an increase in working capital and it is recorded in
the increase column. If a current liability in the current period is more
than in the previous period, the effect is decrease in working capital and
it is recorded in the decrease column.

Statement of changes in Working Capital for the year 2019-20

WORKING CAPITAL Rs in million
Particulars Actual 2018-19 Actual 2019-20
Current Assets
Inventory 292.7 221.3
Inventory in No of Days 37 65
Debtors 686.7 214.2
Debtors in No of Days 40 31

Other Current Assets 92.2 145.6

Total Current Asset 1,071.6 581.1

Current Liabilities
Creditors & Provisions 491.9 151.0
Creditors in No of Days 51 44
Provisions 179.2 153.0
Total Current Liabilities 671.1 304.0
Net Working Capital 400.5 277.1
Borrowing for Net Working Capital
Net Working Capital after Borrowing 400.5 277.1

INTERPRETATION:
The above table clearly shows the decrease in the working capital for the
year 2019 to 2020.

Debtors: Due to start discounting facility from customer, hence receivable

decrease

Creditors: Added more vendor on bill discounting facility to gain

discounting income.

Statement of changes in Working Capital for the year 2020-21

WORKING CAPITAL Rs in million
Particulars Actual 2019-20 Actual 2020-21
Current Assets
Inventory 221.3 243.3
Inventory in No of Days 65 69
Debtors 214.2 81.0
Debtors in No of Days 31 12

Other Current Assets 145.6 129.0

Total Current Asset 581.1 453.3

Current Liabilities
Creditors & Provisions 151.0 236.1
Creditors in No of Days 44 54
Provisions 153.0 273.6
Total Current Liabilities 304.0 509.7
Net Working Capital 277.1 (56.4)
Borrowing for Net Working Capital
Net Working Capital after Borrowing 277.1 (56.4)

INTERPRETATION:
The above table clearly shows the decrease in the working capital for the
year 2020 to 2021.

Debtors: Due to start discounting facility from customer, hence receivable

decrease

Creditors: Added more vendor on bill discounting facility to gain

discounting income & Commodity increase provision made.

RATIO ANALYSIS:
A ratio is a relationship expressed in mathematical terms between two
individual groups of data connected with each other in some logical
manner. Ratio analysis is widely used tool of financial analysis. This
systematic method helps to interpret the financial statement so that the
strengths and weakness of a firm as well as the historical performance and
current financial condition can be determined.

A ratio can be used as a yardstick for evaluating the financial position and
performance of a concern, because the absolute accounting data cannot
provide meaningful understanding and Interpretation. A ratio is the
relationship between two accounting items expressed mathematically. Ratio
analysis helps the analyst to make quantitative judgment with regard to
concern's financial position and performance.

Purpose of the ratio analysis

To study the short term solvency of the firm- liquidity of the firm.

To study the long term solvency of the firm- leverage position of the firm.

To identify the operating efficiency of the firm- turnover of the ratios.

STEPS INVOLVED IN RATIO ANALYSIS

STEP 1
Calculation of ratios from the information obtained from financial
statements according to the requirement of decision.
STEP 2
Compare the calculated ratios with pre-determined standard ratios. They
may be a past ratio of the same organization average ratio or a projected
ratio or the ratio of the most successful organization in the industry.
1.Current Ratio:
Current ratio may be defined as a relationship between current assets and
current liabilities. It is a measure of general liquidity and is most widely
used to make the analysis of short term financial position of a firm

Current Ratio = Current Assets / Current Liabilities

Rs. in million
Year Current assets Current liabilities Current ratio
2018-19 1071.64 917.47 1.6
2019-20 581.07 304 1.91
2020-21 453.27 509.66 0.89
CHART NO:01

INTERPRETATION:
The chart shows that current ratio in 2018-19 it is 1.60, in 2019-20 it is 1.91,
in 2020-21 it is 0.89 The current ratio of all the above three years is lower
the standard.
2.Net Working Capital:

Net Working capital = Current Assets - Current Liabilities

Rs. in million
Year 2018-19 2019-20 2020-21
Current assets 1071.64 581.07 453.27
Current liabilities 671.10 304.00 509.66
Net Working Capital 400.54 277.07 -56.39

CHART NO:02

INTERPRETATION:
The working capital of company has been showing fluctuating trend. It has
been decreasing from 2019-20. During 2018-19 working capital was highest
because of company purchase row-material.
3.Current Asset Turnover Ratio:
This ratio indicates the extent of current assets turnover in achieving sales of
the company.

Current Asset Turnover Ratio = Net Sales / Current Assets

Rs. in million
Year 2018-19 2019-20 2020-21
Net Sales 4938.85 2044.73 1703.67
Current assets 1071.64 581.07 453.27
Current assets turnover ratio 4.61 3.52 3.76
CHART NO:03

INTERPRETATION:
This ration shows 2018-19 decrease trend. The company has not succeeded
to achieve maximum sales with minimum level of investment in current
assets.
4.Working Capital Turnover Ratio:
This ration indicates the extent of working capital turnover in archiving sales
of the company.

Working capital Turnover Ratio = Net Sales / Net Working Capital

Rs. in million
Year 2018-19 2019-20 2020-21
Net Sales 4938.85 2044.73 1703.67
Net Working Capital 400.53 277.07 -56.39
Net Working capital Turnover Ratio 12.33 7.38 -30.21

CHART NO:04

INTERPRETATION:
Working capital turnover ratio decrease. It is maximum during FY 2018-19.
Working capital turnover ratio for FY 2020-21 decrease because increasing
net working capital.
 CHAPTER-VIII

FINDINGS
Findings are the end result of the project study. It is the conclusion, which
the research establishes after analyzing the data from the questionnaire.

Some of the findings the researcher found out after carefully analyzing.

The questionnaire are as follows:

1) After FY 2020-21 sales of company has slow down as compared to last

year due COVID-19.

2) Whole manufacturing process depend on power supply.

3) There is a possible positive relationship between efficient working

capital management and profitability. company more efficient in managing
their working capital are expected to pose high level of profitability and
vice versa.

4) The ultimate objective of any company is to maximize the profit, but

preserving liquidity of the company is an important objective too.

5) Working capital of company has been showing fluctuating trend.

6) Working Capital Management is a very sensitive area in the field of

financial management as it involves the. decision of the amount and
composition of current assets and the financing of these assets.
 CHAPTER- IX

CONCLUSIONS
The Net profit margin of company has been almost increasing.

The working capital needs of company has gone due to fluctuation in

debtors & inventory turnover ratio.

Company has followed good inventory management policy.

Working capital management takes care of the short – term value creation.
Working capital management requires managing the short-term levels of
investment and financing them.

Working Capital is the lifeline of every industry, irrespective of whether it's

a manufacturing industry, services industry.

If those companies properly manage their cash, accounts receivables and

inventories in a proper way, this will ultimately increase profitability of
those companies.
 CHAPTER-X

SUGGESTIONS

The company should concentrate on the current ratio by utilizing

current asset for productive purpose in order to achieve the standard
ratio.

The company should take necessary steps to make use of the quick
asset for the development of the company and should balance with
the standard ratio.

Current assets turnover ratio is fluctuating. It’s not good for

company so in order to increase the current assets turnover ratio. A
company need to increase its sales.

The company is utilizing working capital effectively, this is good

sign for the company.

Gross profit ratio is not stable. So in order to increase the gross

profit. The company wants to increase the production.
 BIBLIOGRAPHY
BOOKS

Financial and Management Accounting: Dr. R Thiruma, Thakur pub.

Financial Management: Inamdar, S. M. Everest

Financial Management: Kishore, R. M. Taxman Allied Service

Financial Management: Kuchhal, S. C. Chaitanya

Financial Management: Kulkarni, M. A. Career

WEBSITE

http://tataautocomp.com

http://hendrickson-intl.com

https://en.wikipedia.org/wiki/Automotive_industry

http://www.heromotocorp.com/en-in/about-us/key-policies.html

http://www.investopedia.com/terms/w/workingcapitalturnover.asp
RESEARCH PAPER

Bhatt, V. V., (1972), Working Capital Finance: Criteria of Appraisal,

Economic and Political Weekly, Vol. 7 No. 17, pp. 842-845

Dr. Khatik S. K. and Jain Rashmi, (2009), Working Capital Analysis of

Public State Undertaking (A Case Study of Madhya Pradesh State
Electricity Board, Indian Journal of Finance, Vol. 3, No. 5, pp. 31-38

Matarneh, Bashar, (2012), Working Capital Management of Small Scale

Industries in Rajasthan, International Journal of Financial Research, Vol. 3,
No. 2, pp.78-85

Chandra H. and Selvaraj A., (2012), Working Capital Management in

Selected Indian Steel Companies, Indian Journal of Finance, Vol. 6, No.
11, pp.5-15

Jain Arvind and Jain Nisha, (1997), Inventory Control Techniques in

Scooter Manufacturing Companies in India - A Case Study, Indian Journal
of Accounting, Vol. XXVIII, pp. 57-63
 ANNEXURE

BALANCE SHEET AS AT MARCH 31, 2019

Rs. in million
As at March 31, As at March 31,
Particulars Notes
2019 2018

ASSETS
1 Non-current assets
(a) Property, plant and equipment 4 97.94 101.91
(b) Capital work-in-progress 4 426.00 411.53
(c) Intangible assets 5 4.07 5.20
(d) Financial assets
(i) Other financial assets 6 5.69 5.32
(e) Deferred tax assets (net) 7 7.60 6.50
(f) Income-tax asset (net) 8 51.09 49.57
(g) Other non current assets 9 30.29 59.14
Total non-current assets 622.68 639.17

2 Current assets
(a) Inventories 10 292.70 382.17
(b) Financial assets
(i) Investments 11 527.09 1,124.53
(ii) Trade receivables 12 686.72 167.88
(iii) Cash and cash equivalents 13 61.12 33.01
(iv) Other financial assets 6 1.16 0.99
(c) Other current assets 14 4.03 3.62
Total current assets 1,572.82 1,712.20

TOTAL ASSETS 2,195.50 2,351.37

EQUITY AND LIABILITIES

1 Equity
(a) Equity share capital 15 124.20 124.20
(b) Other equity
(i) Retained earnings 16 1,400.15 1,165.81
Total equity 1,524.35 1,290.01

Liabilities
2 Non-current liabilities
(a) Provisions 17 29.92 30.20
Total non-current liabilities 29.92 30.20

3 Current liabilities
(a) Financial liabilities
(i) Trade payables 18 588.76 958.87
(ii) Other financial liabilities 19 11.31 12.56
(b) Provisions 17 5.10 5.86
(c) Other current liabilities 20 36.06 53.87

Total current liabilities 641.23 1,031.16

TOTAL EQUITY AND LIABILITIES 2,195.50 2,351.37

BALANCE SHEET AS AT MARCH 31, 2021

Rs. in million
Particulars Notes As at March 31, As at March 31,
2021 2020
ASSETS
1 Non-current assets
(a) Property, plant and equipment 4 92.90 89.05
(b) Capital work-in-progress 4 423.10 445.40
(c) Right of use asset 5 44.40 57.87
(d) Intangible assets 6 2.52 4.26
(e) Financial assets
(i) Other financial assets 7 4.42 4.45
(f) Deferred tax assets (net) 8 10.34 8.79
(g) Income-tax asset (net) 9A 16.71 34.56
(h) Other non current assets 10 1.31 13.69
Total non-current assets 595.70 658.07

2 Current assets
(a) Inventories 11 243.34 221.34
(b) Financial assets
(i) Loans 12 600.00 100.00
(ii) Investments 13 484.82 681.49
(iii) Trade receivables 14 80.97 200.27
(iv) Cash and cash equivalents 15 74.35 10.75
(v) Other balances with banks 15 198.00 -
(vi) Other financial assets 7 0.64 1.32
(c) Other current assets 16 112.46 106.30
Total current assets 1,794.58 1,321.47

TOTAL ASSETS (1+2) 2,390.28 1,979.54

EQUITY AND LIABILITIES

1 Equity
(a) Equity share capital 17 124.20 124.20
(b) Other equity
(i) Retained earnings 18 1,703.69 1,491.01
Total equity 1,827.89 1,615.21

Liabilities
2 Non-current liabilities
(a) Financial Liabilities
(i) Lease Liabilities 41 37.44 48.84
(b) Provisions 19 24.84 25.52
Total non-current liabilities 62.28 74.36

3 Current liabilities
(a) Financial liabilities
(i) Lease Liabilities 41 11.41 10.90
(ii) Trade payables 20
(a) Total outstanding due of micro enterprises and small 43.07 -
enterprise
(b) Total outstanding due of creditors other than micro 383.72 242.32
enterprises and small enterprise
(iii) Other financial liabilities 21 1.04 7.18
(b) Provisions 19 5.28 5.99
(c) Income-tax liabilities (Net) 9B 5.63 -
(d) Other current liabilities 22 49.96 23.58

Total current liabilities 500.11 289.97

TOTAL EQUITY AND LIABILITIES (1+2+3) 2,390.28 1,979.54