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Vol. 2, Issue 3, March 2016

Ratio Analysis and Working Capital Management in

M/S. Pantaloon Retail (India) Limited
Mangayarkkarasi Muthuvelan
Assistant Professor, Department of Electronics and Communication Engineering, SMIT, Chennai, India.
[email protected]

wages, raw material, which are required for manufacturing the

Abstract — Working Capital Management plays a vital role goods to be sold.
in decision making in almost all kinds of industries. But it is The pantaloons retail moved into modern retail when they
more important in Multi-Chain Retail Industries, launched fashion retail chain in Kolkata at 1997. The food
Manufacturing, Construction & Engineering Procurement and bazaar and grocery chain are located in the most of the indian
Contracting (EPC) Industry. The basic tool used to understand
cities.
the Working Capital Management is Ratio Analysis of previous
consecutive five year’s data collected from M/s. Pantaloon Retail
(India) Limited. The company involves retail operations in II. REVIEW OF LITERATURE
Fabric Materials, Food Materials, Electronic Goods, Home Corporate profitability and working capital management
Needs and Logistics. But all these operations are focused on relationship was analyzed by Lazaridis Dr Ioannis and
retail markets in India. There was an increase in current assets
Tryfonidis Dimitrios. They used Athens Stock Exchange
during the period 2006-2009 due to purchase of current assets.
During the period 2006-2009 the working capital has been (ASE) during the period of 2001-2004. They found that there
increased, but there was a decrease in the year 2010 also the is a statistical significance between profitability, which can be
other current liabilities were decreased at this year. The firm studied via the conversion of cash cycle and gross operating
has greater solvency of 4.87 in the year 2007.The quick ratio profit. The managers can create profit by efficiently utilizing
shows satisfactory position from the year 2006-2007 and the cash conversion cycle [1].
operating ratio shows an unsatisfactory position. From 2006 Working capital management trends and its impaction
-2009 the debt-equity ratio was increased. The proprietary ratio firms’ performance was analyzed by Padachi Kesseven. To
of the company decreasing up to 2009 and suddenly increase in identify the root for any significant differences between the
2010. Fixed asset turnover ratio indicates the relationship
industries, working capital needs and profitability of firms
between the sales and fixed assets it reached maximum at 2010.
The financial position of the firm was good at the year 2010. were examined. Here, the dependent variable and return on
total assets were used as a measure of profitability. The
Index Terms — Current assets, Current liabilities, working sample of 58 small manufacturing firms was taken to analyze
capital, Profitability Ratio, Turnover Ratio, Solvency Ratio, the correlation between working capital management and
Schedule of changes in working capital. corporate profitability at the period 1998 –2003. The result
shows that big investment in inventories and receivables
which is associated with lower profitability. To analyze this
I. INTRODUCTION inventories, accounts receivables, accounts payable and cash
There are many studies available in the same area but no conversion cycle are used. He found there is a notable
study has been undertaken to analyze the working capital relationship between working capital management and
management of Pantaloon Retail (India) Ltd. The result of this profitability compared to the previous work. An increasing
study is purely from the management point of view and not trend in the short-term elements of working capital financing
from the worker’s point of view. reveals these findings [2].
This study titled “Working Capital Management with For the period 2000 to 2006 they investigated the
special reference to Pantaloon Retail (India) Ltd”. This study determinants of working capital management of listed firms in
covers the analysis and interpretation of working capital. Malaysia. Their results designate the growth of the company,
Analysis and interpretation of working capital refers to a care debt ratio and economic growth associate in the firm’s
of the information accommodate in the annual report to working capital management [3].
diagnosis the profitability and financial health of the business. They analyzed the performance of liquor industry from 2002
The firm has to spend large funds in current assets for to 2008. They studied among 12 listed companies, which are
earning profit and continuous production activity. When the on low level overall. They found so many ups and downs from
company earns sufficient profit then only it’s possible. It’s 2002 to 2008[4].
mainly depends on the magnitude of sales, which cannot be An attempt to bridge the space in the survey by offering
converted into cash immediately. empirical proof about working capital management and its
outcome to the performance of Malaysian companies from the
There should be a proper duration between the sale of position of market valuation and profitability.
goods and receipt of cash. At this period in order to sustain the The data for this analysis is retrieved from Bloomberg’s
sales activity working capital is required. The company database for the period 2003-2007. The result shows that
cannot sustain its sales with inadequate working capital. there were notable negative associations between working
During that time, it may not be in a position to purchase pay capital variables with firm’s performance by applying
correlations and multiple regression analysis [5].

61
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Vol. 2, Issue 3, March 2016

At the period 2005-2009 the South Africa’s commercial TABLE I: OPERATING RATIO
banking sector performance was analyzed by Kumbirai and S.No YEAR COST OF NET OPERATIN
. GOODS SOLD SALES G RATIO
Robert Webb. For the first two years the overall bank + OPERATING
performance was increased. In 2007, there is a significant EXPENSES
change in the trend noticed at the onset of global financial 1 2005-200 1636.91 1808.58 90.50
crises also it reaches its peak during 2008-2009. Due to this 6
2 2006-200 2889.63 3175.52 91.10
crisis profitability of the South African Banking sector 7
feldown [6]. 3 2007-200 4456.03 4832.47 92.21
Working capital management of Andhra Pradesh Paper 8
Mills Limited (APPML) and Seshasayee Paper Mills Limited 4 2008-200 5597.32 5989.17 93.46
(SSPML) was analyzed by K. Madavi. She found that the cash 9
5 2009-201 5336.90 5716.22 93.36
ratio was not satisfactory in APPML compared to SSPML. So 0
the APPML should take corrective actions to exploit the idle Increasing in the cost of operating expenses over the past
cash and bank balances in strinking investments [7].
four years the operating ratio goes to unsatisfactory position.
Dr. T.N.R. Kavitha, and N. Manimuthu were analyzed the
Therefore, it is better for the management to control
financial position of Birla Corporation Cement Ltd during
increasing rate of cost of operating expenses.
2009-10 to 2012-13. The net profit margin was high at this
period, so it has good financial position. There was an 2. Operating Profit Ratio
increment in the inventory turnover ratio at the financial year It is the ratio of profit made from operating sources to
2012, which is also leads the company to be in great position. the sales, usually shown as a percentage.
Operating Profit
On the authority to the investment in current assets, the Operating Profit Ratio  x 100
liquidity position was excellent. Excess investment in current Sales
assets would block the funds, so they must concentrate on not
TABLE II: OPERATING PROFIT RATIO
to make further investment on it [8]. S.No YEAR OPERATING SALES OPERATIN
In this paper ratio analysis, working capital and the . PROFIT G PROFIT
schedule of changes in working capital was calculated. The RATIO
data taken to this analysis for the period 2005-2010 from the 1 2005-200 152.28 1808.58 8.42
annual report of Pantaloon Retail (India) Ltd [13]. 6
This paper is organized as follows: Section II describes the 2 2006-200 217.95 3175.52 6.86
Review of Literature. The Section III indicates the Research 7
3 2007-200 463.41 4832.47 9.59
Methodology and Data analysis with interpretation was 8
shown in section IV. Section V shows Summary of Findings 4 2008-200 672.25 5989.17 11.22
and Suggestions given in section VI. Section VII concludes 9
the paper. 5 2009-201 600.44 5716.22 10.50
0
III. RESEARCH METHODOLOGY The operating profit ratio flexuating during the study
period. It has maximum ratio at 2008-2009 the value is 11.22.
The data have been suitably rearranged, classified and
3. Overall Profitability Ratio
tabulated according to the requirements of the study.
It is the return on investment which shows the
• Nature of study: Case Study
percentage of return on the total capital employed in the
• Sample Design: Judgmental
• Data Source: Annual report of the company business.
• Type of Data: Secondary Data It is also called as “Return on investment” (ROI) or return
• Period of Data: 2005-06 to 2009-10 on capital employed (ROCE). It indicates the percentage of
return on the total capital employed in the business.
Operating Profit
Overall Profitablity Ratio  x 100
Capital Employed
IV. DATA ANALYSIS AND INTERPRETATION
A. Ratio Analysis
I) Profitability Ratio TABLE III: OVERALL PROFITABILITY RATIO
Profitability is an indication of the efficiency with the S.No. YEAR OPERATI CAPITAL OVERALL
NG EMPLOY PROFITAB
operations of the business is carried on [9-11]. PROFIT ED ILITY
1. Operating Ratio RATIO
This ratio designates the proportion of the cost of goods 1 2005-2006 152.28 910.77 16.72
2 2006-2007 217.95 2088.02 10.44
sales and also operating expenses to the net.
3 2007-2008 463.41 3468.58 13.36
Cost of Goods Sold + Operating Expenses
Operating Ratio  x 100 4 2008-2009 672.25 4327.05 15.54
Net Sales 5 2009-2010 600.44 3327.27 18.05

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Vol. 2, Issue 3, March 2016

During the year 2005-2006 the overall profitability ratio is are judicious or not.
more i.e.16.72%, the company earned more. Later during the Net Sales
Fixed Assets Turnover Ratio 
next year, it had a heavy loss so its percentage decreased to Net Fixed Assets
10.44%. after that the company increased its productivity and
had a good growth in Return On Investment(ROI) is TABLE VI: FIXED ASSET TURNOVER RATIO
S.No YEAR NET NET FIXED FIXED ASSET
subsequent years and at last 18.05% during the year . SALES ASSETS TURN OVER
2009-2010.so it is utilizing its capital efficiency and usefully. RATIO
ii) Turnover Ratio 1 2005-2006 1808.58 395.49 4.57
The turnover ratios are also called as activity or efficiency 2 2006-2007 3175.52 805.75 3.94
ratio. They show the efficiency with the capital employed is 3 2007-2008 4832.47 1528.81 3.16
spin in the business. The overall profitability of the business 4 2008-2009 5989.17 1913.99 3.12
5 2009-2010 5716.22 1181.83 4.84
depends on two factors:
It has started decreasing from the year 2006-2009 and
i. The rate of return on capital employed.
finally it increases in 2010.wheareas in the year 2010 it
ii. The turnover, i.e. the speed at which the capital
reached to maximum of 4.84.
employed in the business spins. Higher the rate of rotation,
iii) Solvency Ratio
then the greater will be the profitability.
Sales
1. Shortem Solvency Ratio
Turn Over  i ) Current Ratio
Capital Employed
This ratio shows the firm’s commitment to meet its
TABLE IV: TURNOVER RATIO short-term liabilities. The assets that will be converted into
S.No YEAR SALES CAPITAL TURN cash within a year is called current assets. A company's debts
. EMPLOYED OVER or obligations that are due within one year is called current
RATIO
1 2005-2006 1808.58 910.77 1.99 liabilities.
Current Assets
2 2006-2007 3175.52 2088.02 1.52 Current Ratio 
3 2007-2008 4832.47 3468.58 1.39 Current Liabilities
4 2008-2009 5989.17 4327.05 1.38
TABLE VII: CURRENT RATIO
5 2009-2010 5716.22 3327.27 1.72
S.No. YEAR CURRENT CURRENT CURRENT
The turn over towards the capital employed during the year ASSETS LIABILITES RATIO
2005-2006 is 1.99.so that it has much earnings towards that.
1 2005-2006 844.48 245.43 3.44
The turnover decreased during the next year and subsequently
2 2006-2007 1749.45 359.58 4.87
for all the year it has increased; during the year 2009-2010 the
3 2007-2008 2628.58 637.66 4.12
ratio has increased its maximum level at 1.72.
4 2008-2009 3282.74 911.86 3.60
1. Working Capital Turnover Ratio
5 2009-2010 1917.80 887.63 2.16
The ratio which indicate the working capital has been
effectively utilized in sales or not. For small amount of The normal ratio is 2:1 it shows a good position in short
term financing. Whereas in this it has more than that, the
working capital a company can achieve large volume of sales,
company is utilizing more current assets to meets out their
this is an indication of operating efficiency of the company.
current liabilities but it has reduced in recent years than the
Net Sales
Working Capital Turnover Ratio  past. This solvency of the firm is more reasonable to evolve its
Net Working Capital
fund. The firm has greater solvency in the year 2007 i.e. 4.87
TABLE V: WORKING CAPITAL TURNOVER RATIO
S.No. YEAR NET NET WORKING whereas in the year 2010 it reduced to 2.16.
SALES WORKING CAPITAL TURN ii) Quick Ratio
CAPITAL OVER RATIO It’s the ratio of liquid assets to current liabilities. We
1 2005-2006 1808.58 599.05 3.01 cannot consider prepaid expenses and stocks as liquid assets.
2 2006-2007 3175.52 1389.87 2.28 Liquid Assets
3 2007-2008 4832.47 1990.92 2.43 Quick Ratio 
Current Liabilities
4 2008-2009 5989.17 2370.88 2.53
5 2009-2010 5716.22 1030.17 5.55

TABLE VIII: QUICK RATIO

The company’s working capital ratio has been increasing up S.No. YEAR LIQUID CURRENT QUICK
to 2007-2010. It reaches 5.55 at 2009-2010. Therefore, the ASSETS LIABILITES RATIO
company should take necessary steps for effective utilization 1 2005-2006 337 245.43 1.37
of working capital. 2 2006-2007 863.49 359.58 2.40
2. Fixed Asset Torn over Ratio 3 2007-2008 1198.74 637.66 1.88
This ratio indicates the investments in the fixed assets 4 2008-2009 1494.9 911.86 1.64
contribute towards sales. A comparison with a previous 5 2009-2010 647.13 887.63 0.73
period’s, it indicates whether the investment on fixed assets

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For average run 1:1 ratio is more acceptable. This ratio is The firm's investment in current assets (such as cash and
2:4 in the year 2007 which had a lesser thing in all those marketable securities, Receivables and inventory). The assets,
subsequent years, so it cannot meet its liabilities. At the year which are all converted into cash within the current year is
2010 it has 0.73 which utilizes less efficiency. called as current assets. Here, cash on hand, debtors, accounts
2. Longterm Solvency Ratio and bills receivable, stock and short-term securities are the
i) Debt Equity Ratio current assets.
It can be used to measure the relative proportions of outsider’s Gross Working Capital = Total Current Assets of
funds and shareholder’s funds invested in the company. Here, the company during the
the Shareholders funds includes preference share capital, financial year.
equity share capital, profit and loss a/c and capital reserves. II) Net Working Capital
Long Term Debt This is a qualitative concept. Current Assets should be
Debt Equity Ratio 
Shareholders Fund optimally more than Current Liabilities. To financing the
current assets, it requires good mixture of long term and
TABLE IX: DEBT EQUITY RATIO short-term funds.
YEAR LONG SHAREHOLDERS DEBT
A specific quantity of net working capital is changeless for
S.No. TERM FUND EQUITY
DEBT RATIO every firm, so it can be financed with long period funds.
1 2005-2006 428.10 526.90 0.81 The net working capital system is directly related to the
current ratio. In this paper we can use the same balance sheet
2 2006-2007 951.93 1092.18 0.87
data which can be used to calculate the net working capital
3 2007-2008 1991.77 1846.62 1.08 and current ratio.
4 2008-2009 2525.53 2272.42 1.1 Net Working Capital = Total Current Assets –
5 2009-2010 1236.03 2756.25 0.45
Total Current Liabilities

The shareholders fund was increased and the long term TABLE XI: WORKING CAPITAL FOR JUNE 2006
debts were flexuating during the study period. This indicates PARTICULARS JUNE 2006
positive position of the company. (Rs. in Crores)
Current Assets
i) Proprietary Ratio
Proprietary ratio is the relationship between proprietor’s Inventories 507.02
funds and total assets. Debtors 17.03
Shareholders Fund
Proprietary Ratio  Cash & Bank Balances 21.77
Total Assets
Loans & Advances 297.57
Shareholders Funds = Share Capital + Reserves
and Surplus Other Current Assets 1.09
It indicates the proportion at shareholder’s funds in the Total Current Assets (A) 844.48
total assets. At the time of winding up there is less danger to Current Liabilities
the creditors when the proprietary ratio is high.
Creditors 136.08
TABLE X: PROPRIETARY RATIO Other Current Liabilities 93.73
S.No. YEAR TOTAL SHAREHOLDER PROPRIETAR
ASSETS S FUND Y RATIO Provisions 15.62
1 2005-200 1156.20 526.90 0.46 Total Current Liabilities (B) 245.43
6
2 2006-200 2447.60 1092.18 0.45 Gross Working Capital (A) 844.48
7 Net Working Capital (A-B) 599.05
3 2007-200 4106.24 1846.62 0.44
8
4 2008-200 5238.91 2272.42 0.43 TABLE XII: WORKING CAPITAL FOR JUNE 2007
9 PARTICULARS JUNE 2007
5 2009-201 4214.90 2756.25 0.65 (Rs. in Crores)
0 Current Assets
It’s clear that the proprietary ratio of the company Inventories 855.96
decreasing during the study period. This is due to an increase
Debtors 65.17
in shareholder’s fund and reserves and surplus. It indicates
Cash & Bank Balances 162.97
efficient management of shareholder’s fund and less risk to
creditors in the event of wind up. Loans & Advances 633.85
B. Working Capital Management Other Current Assets 1.50
It’s a main part of firm’s capital which is required to Total Current Assets (A) 1749.45
financing current assets. The working capital can also be Current Liabilities
defined as the difference between the current assets and
Creditors 223.72
current liabilities [9-11].
I)Gross Working Capital Other Current Liabilities 120.15

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Provisions 15.71 Provisions 24.22

Total Current Liabilities (B) 359.58 Total Current Liabilities (B) 887.63
Gross Working Capital (A) 1749.45 Gross Working Capital (A) 1917.80
Net Working Capital (A-B) 1389.87 Net Working Capital (A-B) 1030.17

TABLE XIII: WORKING CAPITAL FOR JUNE 2008

C. Schedule of Changes in Working Capital
PARTICULARS JUNE 2008
(Rs. in Crores) The working capital is defined as the difference between
Current Assets current assets and current liabilities. The schedule of changes
Inventories 1429.84 in working capital is prepared to find out the increase or
Debtors 113.16 decrease in working capital during the year. Current assets
and current liabilities are taken to schedule working capital at
Cash & Bank Balances 121.10
the end of the current year is compared with that of the
Loans & Advances 962.32 previous year – This difference shows either increase or
Other Current Assets 2.16 decrease in working capital. The individual current items
Total Current Assets (A) 2628.58 (current assets and current liability) are compared to find out
Current Liabilities the effect of changes in working capital.
Creditors 310.40
Increase in current asset will lead to increase in working
capital and vice versa. On the other hand, increase in current
Other Current Liabilities 309.68
liabilities will lead to decrease in working capital and vice
Provisions 17.58 versa.
Total Current Liabilities (B) 637.66 TABLE XVI: SCHEDULE OF CHANGES IN WORKING CAPITAL
FOR JUNE 2006-07
Gross Working Capital (A) 2628.58
PARTICULARS JUNE-200 JUNE-200 CHANGES IN WORKING
Net Working Capital (A-B) 1990.92 6 7 CAPITAL
TABLE XIV: WORKING CAPITAL FOR JUNE 2009 INCREASE DECREAS
PARTICULARS JUNE 2009 IN 2007 E IN 2007
(Rs. in Crores) Current Assets
Current Assets Inventories 507.02 885.96 378.94 -
Debtors 17.03 65.17 48.14 -
Inventories 1787.84
Cash & Bank 21.77 162.97 141.12 -
Debtors 177.25 Balances
Cash & Bank Balances 109.34 Loans & 297.57 633.85 336.28 -
Advances
Loans & Advances 1202.56 Other Current 1.09 1.50 0.41 -
Other Current Assets 5.75 Assets
Total Current Assets (A) 3282.74 Total Current 844.48 1749.45
Assets (A)
Current Liabilities Current
Creditors 385.38 Liabilities
Other Current Liabilities 506.01 Creditors 136.08 223.72 - 87.64
Other Current 93.73 120.15 - 26.42
Provisions 20.47 Liabilities
Total Current Liabilities (B) 911.86 Provisions 15.62 15.71 - 0.09
Gross Working Capital (A) 3282.74 Total Current 245.43 359.58
Liabilities (B)
Net Working Capital (A-B) 2370.88 Working Capital 599.05 1389.87
(A-B)
TABLE XV: WORKING CAPITAL FOR JUNE 2010 Increase in 790.74 790.74
PARTICULARS JUNE 2010 Working Capital
(Rs. in Crores) Total 1389.87 1389.87 904.89 904.89
Current Assets There was an increase in working capital in the year 2007.
Inventories 1270.67 The financial position of company is good.
Debtors 123.57
Cash & Bank Balances 100.54
Loans & Advances 421.68
Other Current Assets 1.34
Total Current Assets (A) 1917.80
Current Liabilities
Creditors 446.48
Other Current Liabilities 416.93

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TABLE XVII: SCHEDULE OF CHANGES IN WORKING CAPITAL TABLE XIX: SCHEDULE OF CHANGES IN WORKING CAPITAL
FOR JUNE 2007-08 FOR JUNE 2009-10

PARTICULARS JUNE-2007 JUNE-2008 CHANGES IN WORKING PARTICULARS JUNE-200 JUNE-201 CHANGES IN WORKING
CAPITAL 9 0 CAPITAL
INCREASE DECREASE INCREASE DECREAS
IN 2008 IN 2008 IN 2010 E IN 2010
Current Assets Current Assets
Inventories 885.96 1429.84 543.88 - Inventories 1787.84 1270.67 - 517.17
Debtors 65.17 113.16 47.99 - Debtors 177.25 123.57 - 53.68
Cash & Bank 162.97 121.10 - 41.87 Cash & Bank 109.34 100.54 - 8.8
Balances Balances
Loans & Advances 633.85 962.32 328.47 - Loans & 1202.56 421.68 - 780.88
Advances
Other Current 1.50 2.16 0.66 - Other Current 5.75 1.34 - 4.41
Assets Assets
Total Current 1749.45 2628.58 Total Current 3282.74 1917.80
Assets (A) Assets (A)
Current Current
Liabilities Liabilities
Creditors 223.72 310.40 - 86.68 Creditors 385.38 446.48 - 61.1
Other Current 120.15 309.68 - 189.53 Other Current 506.01 416.93 89.08 -
Liabilities Liabilities
Provisions 15.71 17.58 - 1.87 Provisions 20.47 24.22 - 3.75
Total Current 359.58 637.66 Total Current 911.86 887.63
Liabilities (B) Liabilities (B)
Working Capital 1389.87 1990.92 Working Capital 2370.88 1030.17
(A-B) (A-B)
Increase in 601.05 601.05 Decrease in 1340.71 1340.71
Working Capital Working Capital
Total 1990.92 1990.92 921 921 Total 2370.88 2370.88 1429.79 1429.79
There was an increase in working capital in the year 2008. There was a decrease in working capital in the year 2010.
This indicates higher investment in current assets. Thus the There was a decrease in current assets and fluctuating in the
company has an ability to meet its current obligations. current liabilities.
TABLE XVIII: SCHEDULE OF CHANGES IN WORKING CAPITAL
FOR JUNE 2008-09
V. SUMMERY OF FINDINGS
PARTICULARS JUNE-2008 JUNE-2009 CHANGES IN WORKING
CAPITAL Due to purchase of current assets there was an increase in
INCREASE DECREASE current assets during the period 2006-2009. During the study
IN 2009 IN 2009
period the working capital has been increased in the year
Current Assets
Inventories 1429.84 1787.84 358 - 2006-2009. In the year 2010 there was a decrease in working
Debtors 113.16 177.25 64.09 - capital. In the year 2010 other current liabilities were
Cash & Bank 121.10 109.34 - 11.76 decreased. The standard current ratio is 2:1. The firm has
Balances greater solvency in the year 2007 i.e., 4.87 where as in the
Loans & 962.32 1202.56 240.24 -
year 2010 the ratio is 2:16 .so the company has not maintained
Advances
Other Current 2.16 5.75 3.59 - an ideal ratio. The quick ratio shows satisfactory position
Assets from the year 2006-2007. Operating ratio shows an
Total Current 2628.58 3282.74 unsatisfactory position. Debt-equity ratio was increased from
Assets (A) 2006 -2009. The proprietary ratio of the company decreasing
Current
Liabilities
up to 2009 and suddenly increase in 2010. Fixed asset
Creditors 310.40 385.38 - 74.98 turnover ratio indicates the relationship between the sales and
Other Current 309.68 506.01 - 196.33 fixed assets. It reached maximum at 2010.
Liabilities
Provisions 17.58 20.47 - 2.89 VI. SUGGESSIONS
Total Current 637.66 911.86
Liabilities (B) The company has to improve its performance towards
Working Capital 1990.92 2370.88 making higher sales year by year. The companies working
(A-B) capital need gas been increasing during the past four years.
Increase in 379.96 379.96
Working Capital
Therefore, the company should take necessary steps for
Total 2370.88 2370.88 665.92 665.92 effective utilization of working capital. The company should
There was an increase in working capital in the year 2009. take necessary steps to maintain an ideal current ratio. The
There was an increase in current asset and decrease in current company can try to reduce operation expenses. The company
liabilities and provisions. This indicates satisfactory position may increase its fixed assets. The companies try to increase
of working capital. their units in many places.

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Vol. 2, Issue 3, March 2016

VII. CONCLUSION Assets

Total Current 1,749. 2,628. 3,282. 1,917.
Based on analysis and subsequent findings it is concluded 844.48
Assets 45 58 74 80
that working capital management of the company is Current Liabilities
comparatively good in the study period. However, the Creditors 136.08 223.72 310.40 385.38 446.48
company has to make an improvement in certain areas to Other Current
93.73 120.15 309.68 506.01 416.93
Liabilities
bring the position better. In the year 2010 there was a decrease Provisions 15.62 15.71 17.58 20.47 24.22
in working capital because the other current liabilities were Total Current
245.43 359.58 637.66 911.86 887.63
decreased. The company has to invest more on fixed assets to Liabilities
improve their working capacity. In the last year of the study Net Current 1,389. 1,990. 2,370. 1,030.
599.04
Assets 86 91 88 17
when compared to the previous year it is found that profit was Misc.
lower. Therefore, the company is suggested to have a control - - - - -
Expenditure
over its expenses in all possible ways. The efficiency ratio of Total Assets
1,156. 2,447. 4,106. 5,238. 4,214.
the company shows good performance. Still the company has 20 60 24 91 90
to concentrate on its sales aspect than the monetary aspects
because it will make the firm more profitable. Profit and Loss Account for June 2006-10
(Rs. InCrores)
APPENDIX Profit Loss
Jun-06 Jun-07 Jun-08 Jun-09 Jun-10
Account
Balance Sheet for June 2006-16 (Rs. In Crores) Income
Balance Sheet Operating 1960.8 5295.8 6661.4
Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 3393.47 6316.66
as at Income 6 8 2
Sources of Expenses
Funds Material 1268.1 3556.2 4481.9
Equity Share 2239.53 4089.51
26.88 29.35 31.86 38.06 41.23 Consumed 5 1 5
Capital Manufacturin
Share Capital 58.96 78.15 100.66 115.91 99.14
- - - - 64.66 g Expenses
(Pending) Personnel
Share 112.72 207.74 275.78 275.94 280.18
Expenses
Application - 0.01 - - - Selling
Money 170.07 291.72 372.54 443.36 543.13
Expenses
Warrant Admin
Applicatin - - 63.26 22.88 122.88 198.69 358.38 527.28 672.01 704.26
Expenses
Money
Expenses
Reserves & 1,062. 1,751. 2,211. 2,527. - - - - -
500.02 Capitalized
Surplus 82 50 48 48
1808.5 4832.4 5989.1
Shareholders 1,092. 1,846. 2,272. 2,756. Cost of Sales 3175.52 5716.22
526.90 8 7 7
Fund 18 62 42 25
Operating
1,991. 2,525. 1,236. 152.28 217.95 463.41 672.25 600.44
Secured Loans 428.10 951.93 Profit
77 53 03
Unsecured Other
173.29 347.65 200.01 324.86 150.19 Recurring 3.93 4.36 30.93 12.08 22.33
Loans
1,299. 2,191. 2,850. 1,386. Income
Total Loans 601.39 Adjusted
58 78 39 22 156.21 222.31 494.34 684.33 622.77
Deferred Tax PBDIT
27.92 55.84 67.84 116.10 72.43 Financial
Liability 43.22 95.93 201.45 317.76 299.79
1,156. 2,447. 4,106. 5,238. 4,214. Expenses
Total Liabilities Depreciation 20.82 36.86 83.39 140.05 161.88
20 60 24 91 90
Application of Funds Other write
- - - - -
1,368. 1,876. 1,417. offs
Gross Block 366.01 767.07
76 45 04 Adjusted PBT 92.18 89.52 209.50 226.52 161.10
Depreciation 56.58 92.47 170.59 307.69 294.89 Tax Charges 27.67 60.96 69.68 75.38 37.25
1,198. 1,568. 1,122. Adjusted PAT 64.52 28.56 139.82 151.14 123.85
Net Block 309.43 674.60
17 76 15 Non Recurring
Capital WIP 86.06 131.13 330.64 345.23 59.68 -0.25 91.49 -13.83 -10.29 51.41
Items
1,528. 1,913. 1,181. Other Non
NB + CWIP 395.49 805.73
81 99 83 Cash -0.11 -0.06 0.03 -0.27 3.17
2,002. Adjustments
Investment 161.67 252.01 586.52 954.03
91
Reported Net
Current Assets 64.16 119.99 125.97 140.58 178.43
Profit
1,429. 1,787. 1,270.
Inventories 507.02 885.96 Earnings
84 84 67
Before 130.66 236.58 341.73 408.14 558.97
Debtors 17.03 65.17 113.16 177.25 123.57
Appropriation
Cash & Bank
21.77 162.97 121.10 109.34 100.54 Equity
Balance 6.72 7.54 10.67 11.57 17.13
Dividend
Loans & 1,202.
297.57 633.85 962.32 421.68 Preference
Advances 56 - - - - -
Dividend
Other Current 1.09 1.50 2.16 5.75 1.34
Dividend Tax 0.94 1.28 1.81 1.97 2.91

67
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 ISSN (ONLINE): 2395-695X
ISSN (PRINT): 2395-695X

International Journal of Advanced Research in Biology, Engineering, Science and Technology (IJARBEST)
Vol. 2, Issue 3, March 2016

Retained [8] Dr. T.N.R. Kavitha, and N. Manimuthu, “A Study of Working Capital
123.00 227.76 329.25 394.60 538.93
Earnings Management with Special Reference to Birla Corporation Cement Ltd,
Kolkata,” IOSR Journal of Business and Management, Pp. 72-75.
[9] Financial Management by Dr. S.N. Maheswari, Sultan Chand & Sons
ACKNOWLEDGMENT Publications.
The author would like to thank the anonymous reviewers [10] Financial Management by I.M. Pandey, Vikas Publications.
[11] Financial Management by Prasanna Chandara.
for their careful revision and important suggestions which
[12] Events and Analysis of Big Bazzar - April 9th, 2008.
significantly helped to improve the presentation of this paper. [13] www.pantaloonretail.in

REFERENCES M. Mangayarkkarasi MBA, M.E is working as an

Assistant Professor in the Department of Electronics
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between working capital management and profitability of listed years of teaching experience. She received her
companies in the Athens Stock Exchange,” 2004. Bachelor's degree in Electronics and Communication
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[3] M. A. Zariyawati, H. Taufiq, M. N. Annuar and A. Sazali “Determinants First Class from Sri Sivasubramaniya Nadar college of Engineering, Anna
of working capital management: Evidence from Malaysia,” ICFTE, University during the year 2013. She was a University Rank Holder in PG.
Author’s photo
Pp. 190 – 194, 18-20 June 2010. She has published a paper “Performance Analysis of OFDM System With
[4] D. Wu-Jun and H. Wen-Xiu, “A Differential Analysis on Working Channel Estimation And Phase Noise Reduction Using EKF” International
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