Summer Internship Project Report

On

Financial and Stock management

At

Ambica Trading Co.

Submitted to :

Institute code : 778

Institute name :

Som-lalit Institute of

Business Management Studies,

Ahmedabad.

Under the guidance of

Dr. Lucky Mishra

In partial fulfilment of requirement of the award of the degree of master

of business addministration(MBA)

Offered By

Gujarat Technological University

Ahmedabad

Prepared by :
prince sachchade

217780592156

MBA (Semester- III)

Month and year

 Acknowledgement

The satisfaction that accompany the successful completion of the project

would be in complete without the mention of the people who made it possible.

I would like to take the opportunity to thank and express my deep sense of
gratitude to my firm’s propritor mr.Amrishbhai Modi and my faculty mentor Dr. lucky
mishra. I am greatly indebted to both of them for providing their valuable guidance at
all stages of the study, their advice, constructive, suggestions, positive and
continuous encouragement without which it would have not been possible to
complete the project.

I am thankful to Mr. Amrishbhai Modi for giving me the opportulity to work

with Ambica Trading Co.

I owe thanks and appreciation to the entire staff of the company for their co-
operation andassistance during the course of my project.

Ihope that I am build upon the experience and knowledge that I have gained
and make a valuable contribution towerds this industry in coming future.
 Declaration

I here by declare that the summer internship project report titled “Ambica
Trading CO.” in is a result of my own work and mu indebtedness to other work
publications,references,if any have been duly acknowledge.If I am found guilty of
copying from my other report or published information and showing as my original
work,or extending plagiarism limit,I understand that I shall be liable and punishable
by the university which may include ‘Fail’ in examination or any other punishment
that university may decide.

Enrollment No. Name Signature

217780592156 Prince sachchad

Place: Date:
 Table of Contents

No. Information

1 Preface

2 Introduction to Industry

3 Introduction to Organisation

4 What is finanacial Management?

5 How your oragnisation work?

6 What is stock management?

7 Oragnisaton’s Stock Methods

8 Objectives of the study

9 Research Methodology

10 Data Analysis
 Preface:-

The guide includes a basic text for teaching current and potential micro
business owners about different methods of distrubing products and services
recognizing that many business will use multiple methods in marketing.

Ther objective of the project was “to understanding market position and
develop the wholesale Industry for Ambica Trading Co.

The objective of this study was to analyze different financial position in

market.

Project was started on 1 0thaugust . to end ofth the

september.
7

The Main objective is to growth of the wholesale Industry and stand for long
time with better profit.
 Introduction To Industry
(Wholesale Industry)

Definiton :- Wholesaler

Individual or firm that purchases enormous amount of

merchandise from different makers or merchants distribution
centers them and exchanges to retailers.

Wholesaling or disseminating is the closeout of products or

product to retailers to industrial,commerical,institutional,or other
proffesional business clients or to different wholesalers and
related subjected administrations. In general,It is the clearance of
products to anybody other than a standard buyer.

What is difference between wholesale and retail ?

In simple terms retail means that you the product manufacturer or producer
sell your product directly to the consumer. selling wholesaler means you typically sell
your product in bulk qunatities to a middlemenwho in turn sells it to the consumer.

Reasons why retailers buy from wholesellers :-

 No direct distribution of a brand to their stores.

 Low margins by distributors.
 Direct distribution terms .
 Better deals at wholesale.
  To be aware of high selling products and brands.

History of wholesale Industry

The Wholesale channel helps the manufacturers achieve sales from markets
where they are not directly able to handle retail sales and their shipments it is
impossible to reach all the stores directly through your distributors.

Most Companies wil have strong direct distribution in cities like mumbai,but
as you go deep into India the dependence on wholesale Indirect channels increase.
For example, a brand which is selling in pan india across the regions in india may
have a wholesale component runing from 20% to as high as 50-70% depending on
the category. I brands dependence on rural india.
Introduction to organsization

Ambica Trading company is a gujarat based wholesale company established

in the year 2005 which is owned by Mr Amrishbhai Modi.

Ambica trading Co.works under the wholesale Industry selling product to the
customers is the main objective of a firm.
This firm work with all types of sytems use for purchase of the product.
That firm work in 75% of wholsale and 25% of retail sale of the product.
The Profit margin of that firm arround 5 to 7% of selling of product.

Product Line

 Paper plates,Cup,Bowl etc

 Biodegrable Products
 Plastic Plates, Bowl, Glass etc.
 Baggasse Products
 Silver Containers.
 Paper napkins.

Geographical Area :-

That business was large and Broad. This Business was Expand to gujarat state.
Its company’s goodwill is most helpful for purchase the product.
This Business is a wholesale business and deal with all customers residing in
other states as well for sale for the Products and also goods are purchased from
the suppliers of different states as well.

Future Strategy:-

This firm’s already work with regular customers and to increase more
customers and get better profit maximization to this firm in future.

 Competition to Ambica Trading Co.

The biggest competitors to ambica trading co. are following.

 Mahavir Enterprise
 Bharat Kumar and Co.
 Kunal Marketing
 Shree J D Marketing
 Shanti Trading Co.
Objectives of the study :

To gain pratical knowledge in management

To study and understand the concept of finance and stock management

To develop the managerial skills

To develop the leadership quality

To know how theoratical concepts can be applied in practical manner

 Introduction of financial management

Finance can be defined as the art and science of management

Finance is concerened with the process institutions marketstands instruments
involved in the transfer of money among individuals business and goverments.
In business fianace involves the same types of decisions : How firms raise
money fromn investors , how firm invest money in an attempt to earn a profit and
how they decide whether to reinvest profit in the business or distribute them back
to investors.

Financial Management :-

1) Cash Purchase
2) Credit Purchase
3) Cash Sales
4) Credit Sales
5) Collection from debtors
6) Payments to creditors.
Techniques of Financial Management
(1) Common – size statements

(2) Trend Ratios

(3) Funds flow Analysis

(4) Capital Structure

(5) Ratio Analysis

(6) Cash-flow Analysis

(7) Capital Budgeting Techniques

(8) Working capital Management

Overview

Our organization manges finance with use of techniques of working capital

management.

 And second techniques is Cash-flow Analysis which is being used

in my organization.

The Preparation of cash flow Statements has been made mandatory. A

statement of cash-flow reports the cash receipts and cash payments and net
charges in cash resulting from operating investing and financing activities of
an enterprise during the period.

The cash flow statement reconciles the opening and closing balances of cash
 and cash equivalents for the reported accounting period It reports a net
cashinflow or outflow for each activity and for the overall business.

My organization work with liquidity Management.

Liquidity Management is the fundamental idea of the entrance to promptly

accessible money so as to store momentary venture, spread obligations and
pay for products and enterprises. Liquidity Planning is pivotal, and includes
money and treasury supervisors capacity to look to the organization's
monetary record and Convert Funds that are tied up in longer-term ventures
into money for the firm to use in its everyday tasks. Money Purchase. Money
Purchase alludes to a property securing with no financing.

Cash Purchase.

Cash Purchase refers to a property acquisition with no financing. It is

important for Purchase contracts to specify if there will be a cash purchase or
a finance purchase.

Uaually a seller offers a lower price for a cash purchase since the buyer
could close payment immediately and transaction costs to the seller would be
less than for a sale involving financing.

 Cash Purchase Benefits :-

 Purchase of product at low price

 Not Risk for collection.

 Increase the Purchasing Power

 Specific discount offer to customer.

 Accounting and Journal Entry for cash Purchase.

Purchase A/c Dr

To Cash A/c

 Credit Purchase

The person to whom the money is owned is called a “creditor” and the
amount owed is a current liability for the company.

Purchase orders are commonly used in large corporations to order

goods on credit.

 Accounting and Journal Entry for credit purchase.

Purchase A/c Dr…….

To Creditor’s Account …..

 Cash Sales

Cash sales are sales made against cash. It is where the seller receives
the cash consideration at the time of delivery.
 It is not necessary that the seller must receive the currently notes to
qualify a sale as cash sales.

Sales involving direct immediate transfer to the seller bank account or

payment through credit cards are also cash sales.

A Transaction that takes place and cash is given immendiately. Cash

needs to be paid upfront and even the delivery shall take place at the
same time If delivery takes place now and payment is to be seffled at a
later date agreed by both parties involved in transaction then It is no
longer a cash transaction.

 Credit Sales.

Credit Sales means allowances of goods to customer in order to pay in

advance. It is goods given to a customer on credit. That means you sell
the goods and collect cash at a later date per agreement with customer.

Credit sales are purchases made by customers for which payment is

delayed. Delayed payments allow customers to generate cash with the
purchased goods, which is then used to p ay back the seller.

The use of credit sales is a key competitive tools in some

industries, where longer payment terms can be used to attract
additional Customers.

A downside of credit sales is the risk of bad debt loss.

 The profit margin is high in credit sales comparisons of cash
sales.

Collection from debtors

Debtors are organizations or people that Owe the business money This
means that debtor’s collection period, is the Average amount of day it takes, for the
business to receive the money It is owed from its customers. Ashort debtor’s
collection period is good. If debtors pay quickly, it helps cashflow and reduces the
risk of customers not paying the money they owe.

Formula 1 :-

Debtor’s

Collection = debtors (amount of money) X 365 = number of days

Sales turnover

Formula :- 2

In accounting the term debtor collection period indicated the average time
taken to collect trade debts. In other words, a reducing period of time is an indicator
of increasing efficiency. It is enables the Enterprise. To compare the real collection
period with the granted theoretical credit period.

Debtors Average Debtors

Collection = x 365 = No. of Days
Period Credit Sales

Avg = Debtors at the brginning of the year

Debtors + debtors at the end of the year

Credit Sales are all sales made on credit A long debtors collection period is an
indication of slow or late payments by debtors.

 Payment to creditors.

A creditor could be a bank, Supplier or person that has provided money,

goods or services to a company and expects to be paid at a later date.

The company owes money to its creditors and the amounts should be
reported on the company’s balance sheet as either a current liability or
a non-current liability.

Other creditors include the Company’s Employees, governments and

customers Etc.

Some creditors are referred to as secured creditors because they have

a registered lien on some of company’s Assets.
 A Creditor without a lien on the Company’s Assets is an unsecured
creditors.

Creditor send reminder letters to customers who are overdue in their

payments and include a penalty fee if you wish.

Stock Management

Stock Management is the Practice of ordering, storing tracking

and controlling inventory.

Stock Management applies to Every item a business uses to produce

its products or services from raw materials to finished goods.

Stock Management may also be called stock control, inventory

management or inventory control.

Different types of stock.

(1) Raw Materials

Stock that is ready to be used in production of goods.

(2) Work in progress.

Unfinished goods that are still in production.

(3) Finished goods.

Items that are ready for Sale.
 Techniques of Stock Management
 Economic Order Quantity

Economic order quantity is the lowest amount of inventory you must

order to meet peak customer demand without going out of stock and
without producing obsolete inventory.

Its Purpose is to reduce Inventory as much as possible to keep the cost

of inventory as low as low as possible.

EOQ=2AO/C

Here, A=Annual Demand.

O=Ordering Cost,
C=Carrying/Storage Cost.

 FIFO Method And LIFO Method.

FIFO and LIFO are accounting methods used to value your inventory
and report your profitability.

FIFO (First In, First Out) is an Inventory accounting Method that says
the first items in your inventory are the first ones that leave.

LIFO (Last in first out) is an inventory accounting method that says the
last items in your inventory are the first once that leave.

LIFO is a great method for non – perishable homogeneous goods like

 stone or brick.

 Weighted Average Method

The weighted Average Method is used to assign the Average cost of

production to a product. Weighted Average Costing is used in
situations where :

Inventory items are so intermingled that it is impossible to assign a

specific cost to on Indivual unit.

The accounting System is not sufficiently, Sopnisticuted to reack FIFO

or LIFO Inventory Cayers

Inventory items are so commoditized that there is no way to assign a

cost to an individual unit.

 Organizations Stock Management

FIFO method is used by my organization. This method is also helpful fo

easily stock maintain. In my organization, FIFO loss of inventory in go
down or warehouse.
 Overview

As mentioned above my organization also adopted this

strategizes

(1) Purchase
(2) Sales
(3) Collection from debtors
(4) Payment to creditors.

Payment to suppliers has been done once after collection from debtors has
been done. This is done in order to maintain cash liquidity in the organization
as well.
  How your organization work?
My Organization is work with Liquidity concept.

 Part of my Organizations
1. Manufacturers
2. Wholesellers
3. Agent
4. Retailers
5. Customers

 PROCESSING CYCLE

MANUFACTURERS PURCHASE SALE

OR AMBICA RETAILERS
TRADING
AGENTS OR CO. CUSTOMER

WHOLESELLERS

Our Company was purchase goods from manufactuers as credit and in other
situation Payment to Manufacturers in advance.

Whole Transoprtation cost is bare by Manufacturers only,so it is not a relevant cost

in decision of Price Making Policy.

 LIST OF MANUFACTURERS
1. Eximius Disposables
2. Essen Speciality Disposables LLP
3. Pime Paper Industry
4. Monali Paper Products
5. Pioneer.

 LIST OF WHOLESELLERS
1. Make Easy Pack solutions LLP
2. Alka Lifestyle Private Limited
3. Mahavir Trading
4. Apple Marketing
5. V. Hygiene

 LIST OF AGENTS
1. Shreenath Traders
2. Narayani Agency
3. Vipul Traders.

 MEDIATOR
Ambica Trading Co. is work as MEDIATOR,purchase goods from
Mnufacturers,wholesellers and added Pofit marging,Mark-up on the cost price
 ,after that sale such goods to Customers & Retailers.

In this situatuion Organization is mainitain good relation with those suppliers

who provides assurance of always good quality product,not with those
suppliers who give in cheaper rate.

In case of Sales towards Customers & Retailers,Loading & unloading expenses

totally bare by them.However,company providing transportation facility for delivery
of goods.

 LIST OF RETAILERS
1. Bhagvati Enterprise
2. Aurobindo Traders
3. Prakash Provision Stores
4. Madhav Enterpise
5. Rutu caterers
6. Shri Ram Disposables
7. Laxmi Traders.

So, this is Working Capital Cycle,which is followed by

organization.
STATEMENT OF THE PROBLEM
 Introductionof the study
With the 2 nd largest country in the world in context of Population , it’s a very
difficult task to stay ahead in GDP along with minimum jeopardizing of natural
resources.
In developing country like India , plastic products now a days have made a huge
impacts on daily lives of people . Plastic has durability , veracity , flexibility , inert & so
on . Its having a light weight , high heat combustion , a very good abrasion resistance
, contains minimum water , molded in any shape , available in attractive colors & so
on.

In our business following are the core products which consist Plastic material,
1. Disposable Glasses , cups
2. Disposable Dish , Spoon , Bowl

Overcome of the hurdle…

Recycling of plastic products after that consumption is best alternative which seems
to be a reasonable assurance about environmental & economical benefit of country,
but in practical there is a vast difference in practical scenario in market . It is not a
best one solution of problem due to higher demand & consumption of plastic
contains Product . Now, In India looks like western countries a level of nuclear family
is increased , proportionately higher rate . Which create a more demand of this kind
of products at regular interval.
So, the government is think about PAPER ORIENED DESPOSABLES in whole country,
this lone option is in the end , if there is a complete prohibition of plastic material.
ISSUES IN APPLIANCE OF PAPER INSTEAD OF PLASTIC

Today,Ambica Trading Co. have 9-10 % of margin on sale while Industry average
margin is 7-8%.
Cost incur in Paper made output is approx 1.5X higher than the manufacturing done
from the Plastic material.
Which will direct affect company’s profitability . Because suppliers rate is but
obvious increased due to higher production cost.

Resolve the futuristic issue-

The entity always believe in HIGH QUALITY-HIGH BRANDING .So , it’s neither thinking
about purchase at cheaper rate , otherwise quality will be degraded . However, profit
is may be achieved at same or higher , but it’s for a short period of time . So despite ,
law margin of profit , company will be continue purchasing standard product .
Now , company is thinking about established OWN manufacturing plant within 2-3
years , so that purchase cost will be significantly reduced and achieved higher
amount of profit with predefined standard of quality.
After having own plant major indirect expense like Storage cost , handling cost ,
loading/ unloding cost , transportation cost, conveyance cost will be almost avoid .
However , for establishing of plant higher amount of capital will be required , which
will be sufficient in the hands of company as Capital fund.
 RESEARCH METHODOLOGY

Here research regarding the finance and stock management of Ambica

Trading Co. has been done to get the idea about how an organization manages
its finance and liquidity as well as the stock of their product in practical manner.
Type of data :-
Here, to undertake the research of the study secondary data has been used.
also, quantitative data has been used for the study.
Data collection instrument :-
There are various instruments available to collect the secondary data.
Here, the annual reports of the firm as well as the stock reports are used to
undertake the research.
Research design :-
There are various research designs available to undertake the research.
but, here descriptive research design has been used for the study.
LITERATURE REVIEW-For Stock Management

The vast majority of the organization estimates the capacity to fulfill the client by
following 3 factors.

1.)Number of requests which act per plan

2.)Number of requests which are sent according to plan

3.)The inactive time in stock just as deficiency

In the Business of Disposable things , which contains Plastic and paper and
thermocol , association not just consider precise amount of stock level yet
additionally put more accentuation on the very much oversaw of physical stock. It is
vital , generally the expense of putting away and dealing with and keeping up will be
essentially high.

Limiting Inventory Investments

Most organization attempt to limit the cash related with stock in order to improve
gainfulness of the organization. This is estimated utilizing Inventory turnover
proportion , which estimates how rapidly the stock is escaping framework to the
purchaser.

Stock Turnover = Sales/COGS

________________

Normal Inventory

Proficient INVENTORY CONTROL incorporates how the stock are planned

appropriately, no deferrals between sniffing of crude materials and products. The
measure of crude materials decides the workforce and different variables. Each
organization will acquire fixed expense and vertical expense . There ought to be a
harmony between the Fixed expense and Variable expense.

Support INVENTORY-Inventories are here and there used to counter assault the
vulnerabilities of interest and supply . They could likewise be utilized to deal with
unexpected circumstances like poor transportation , low quality and so forth .
Support Inventory or wellbeing stock is the measure of stock which is in
overabundance contrasted with the present interest of products . The more security
stock a firm has little is its likelihood of running into a stock out circumstance.

Expectation INVENTORY-Firm frequently buy and hold stock which is a lot higher
than their present necessities fully expecting future occasion . These occasion can
incorporate,

Occasional varieties popular .

Value Variations .

An approaching work strike.

This technique enables firms to develop their stock stores when the interest is
declining and as the interest shoots up they can use the stock . The organizations
need not expand their generation limit and over-burden their laborers when there is
an abrupt ascent sought after.
In the entity there is a huge challenge of maintaining deliberate stock at a proper
level.
However , with the techniques of JIT principal, EOQ & ABC analysis, a firm can
estimate its demand.
In regular course of business and its peak season like various Festivals , marriage
season etc.
Firm is very meticulous in the examining and ordering of physical inventory . Their
superior physical inventory management helps in accurate stock quantity
 measurement and its valuation.

DETAILS OF CLOSING INVENTORY [ From Financial

Statement of Organization]
2018 2018 2017
2017

Particulars Quantity Amount Quantity Amount

(Packet) (Packet)

Plastic based Inventory 6450 2,48,551/- 24643 16,67,323/

Thermocol based Inventory 7024 3,58,255/- 18060 8,59,500/-

Paper based Inventory 16606 6,21,050/- 12532 3,23,302/-

Total 12,27,856/- 28,50,125/-

Conclusion :

So from the whole report we have seen the how the wholesale industry works in
practical and real manner and how ambica trading co. works in wholesale and retail
industry. Also, from the above table we can see that ambica trading co. sales and
amount of earning keeps on increasing which shows that the organization is growing
with each passing year in this compatativ market.