Project Report

On
“STUDY OF WORKING CAPITAL MANAGEMENT OF
STERLITE INDUSTRIES”

Submitted to
Rashtrasant Tukadoji Maharaj Nagpur University

In Partial Fulfillment of degree of

Bachelor of Business Administration
in the faculty of commerce
FINANCIAL Management

Submitted By
ABHISHEK VERMA

Under the Guidance of

CA. MANISH SHAH

G H Raisoni College Of Commerce, Science & Technology

Nagpur (2023-2024)

1
 Declaration

I, Abhishek Verma hereby declare that the project entitled

“STUDY OF WORKING CAPITAL MANAGEMENT OF

STERLITE INDUSTRIES is a record of independent research

work carried out by me under the supervision and guidance of

CA. Manish Shah

This has not been previously submitted for the award of any

Diploma/ Degree of this or any other university.

Place : Nagpur Signature

Date : Abhishek Verma

2
 Acknowledgement

It is my pleasure to place on record my sincere gratitude

towards my guide CA. MANISH SHAH, who spent her precious
time providing innovative ideas and expert guidance to my
project work. It was her direction and encouragement at every
moment and step that motivated me to steer the research work
confidently and successfully.
I am grateful to Dr. Aarti Deshpande, Director , Dr.
Jasvinder Kaur , Officiating Principal, Dr. Pankaj Pethe
HOD BBA Department , for their encouragement, moral support
and the valuable guidance and also thankful to Teaching and
Non-teaching staff for their continuous help to complete this
project.
I am also grateful to CA. Manish Shah without their constant
support and timely help my project would never been completed.
I am indebted to my respected parents because of whose
blessings, I have been able to carry out this work successfully. I
am also thankful to all those who have directly or indirectly
helped me for this project work.

Place : Nagpur Signature

Date : Abhishek Verma

3
 INDEX
Chapter No. Particulars Page
No.
Chapter -1 INTRODUCTION 5-17
Chapter- 2 COMPANY PROFILE 18-22
Chapter- 3 AIMS & OBJECTIVES 23-24
Chapter- 4 RESEARCH METHODOLOGY 25-27
Chapter- 5 DATA ANALYSIS AND 28-35
INTERPRETATIONS
Chapter- 6 CONCLUSION & 36-40
SUGGESTIONS

BIBLIOGRAPHY/ 41-42
REFERENCES

ANNEXURE 43-53

4
INTRODUCTION

5
 INTRODUCTION

Sterlite Industries Limited, a subsidiary of Vedanta Resources Plc, was a

prominent player in the global metals and mining industry. Operating in
segments like copper, aluminum, zinc, lead, silver, and commercial
energy, Sterlite Industries set high standards in the sector.

Efficient working capital management was a key aspect of Sterlite

Industries' operations. By balancing short-term assets and liabilities
effectively, the company ensured smooth functioning. Managing
inventory levels, accounts receivable, and accounts payable helped
optimize cash flow and maintain liquidity. Monitoring working capital
ratios like the current and quick ratios was vital for assessing financial
health and making strategic decisions.

Sterlite Industries' robust working capital strategy supported its

operations and facilitated sustainable growth in the competitive metals
and mining landscape.

Sterlite Industries' working capital management encompassed various

strategies and practices aimed at optimizing its short-term financial
position. Here are some key details about Sterlite Industries' approach to
working capital management

6
1. Inventory Management: Sterlite Industries focused on efficiently
managing its inventory levels to balance the costs associated with
holding inventory and ensuring product availability. By monitoring
inventory turnover ratios and implementing just-in-time inventory
systems, the company minimized carrying costs and maintained
adequate stock levels to meet demand.

2. Accounts Receivable: Sterlite Industries implemented rigorous credit

policies and monitored accounts receivable closely to shorten collection
periods and reduce bad debts. By incentivizing early payment from
customers and conducting creditworthiness assessments, the company
aimed to improve cash inflows and minimize receivables outstanding.

3. Accounts Payable: Sterlite Industries strategically managed its

accounts payable by negotiating favorable payment terms with suppliers
while maintaining strong relationships. By taking advantage of
discounts for early payments and optimizing payment schedules, the
company improved cash flow and preserved liquidity.

4. Working Capital Ratios: Sterlite Industries regularly assessed key

working capital ratios like the current ratio and quick ratio to evaluate
its liquidity position and financial health. These ratios provided insights
into the company's ability to meet short-term obligations and manage
unforeseen cash requirements.

5. Cash Flow Monitoring: Sterlite Industries maintained a strong focus

on monitoring cash flows to ensure sufficient funds for operational
needs and strategic investments. By forecasting cash flows, managing
working capital cycles, and implementing cash conservation strategies,
the company prioritized liquidity management.

7
6. Strategic Investments: Sterlite Industries leveraged its working
capital management to support strategic investments in technology,
innovation, and sustainability initiatives. By optimizing working capital
efficiency, the company allocated resources effectively to drive long-
term growth and competitiveness in the industry.

7. Continuous Improvement: Sterlite Industries emphasized a culture

of continuous improvement in working capital management practices.
By fostering cross-functional collaboration, adopting best practices, and
leveraging technology solutions, the company enhanced its working
capital efficiency over time.

Overall, Sterlite Industries' working capital management was

characterized by a proactive and holistic approach to optimizing short-
term financial resources, enhancing liquidity, and supporting sustainable
growth in the metals and mining sector.

8
Ratio Analysis:

Fundamental Analysis has a very broad scope. One aspect looks at the
general (qualitative) factors of a company. The other side considers
tangible and measurable factors (quantitative). This means crunching
and analyzing numbers from the financial statements. If used in
conjunction with other methods, quantitative analysis can produce
excellent results. Ratio analysis isn't just comparing different numbers
from the balance sheet, income statement, and cash flow statement. It's
comparing the number against previous years, other companies, the
industry, or even the economy in general. Ratios look at the
relationships between individual values and relate them to how a
company has performed in the past, and might perform in the future.

Definition
Result of one number or quality divided by another. Ratios are the
simplest mathematical (statistical) tools that reveal significant
relationships hidden in mass of data, and allow meaningful
comparisons. Some ratios are expressed as fractions or decimals, and
some as percentages. Major types of business ratios include
(1) Efficiency, (2) Liquidity, (3) Profitability, and (4) Solvency ratio.

Meaning of Ratio:
A ratio is one figure express in terms of another figure. It is a
mathematical yardstick that measures the relationship two figures,
which are related to each other and mutually interdependent. Ratio is
express by dividing one figure by the other related
figure.

9
Improving the working capital of Sterlite Industries

1. Optimize Inventory Management:

- Identify slow-moving or obsolete inventory and liquidate it.
- Implement just-in-time (JIT) inventory management to reduce
carrying costs.

2. Streamline Accounts Receivable:

- Implement stricter credit policies to reduce outstanding receivables.
- Offer discounts for early payment to encourage faster collections.

3. Manage Accounts Payable Efficiently:

- Negotiate favorable payment terms with suppliers to improve cash
flow.
- Take advantage of early payment discounts to save on costs.

4. Reduce Operating Expenses:

- Identify areas where costs can be reduced without affecting quality.
- Consider outsourcing non-core functions to reduce overhead
expenses.

5. Improve Cash Flow Forecasting:

- Develop accurate cash flow projections to anticipate funding
requirements.
- Monitor cash flow regularly to identify potential shortages in
advance.

6. Explore Financing Options:

- Consider short-term financing options like lines of credit or working
capital loans.
- Evaluate long-term financing options for capital-intensive projects.

10
7. Optimize Working Capital Cycle:
- Minimize the cash conversion cycle by reducing the time it takes to
convert inventory to cash.
- Streamline processes to speed up the collection of receivables and
payment of payables.

8. Invest in Technology:
- Implement efficient accounting and ERP systems to automate
processes.
- Use data analytics to identify trends and optimize working capital
management.

9. Monitor Key Performance Indicators (KPIs:

- Track metrics like current ratio, quick ratio, and working capital
turnover ratio.
- Use KPIs to assess the effectiveness of working capital management
strategies.

10. Engage with Stakeholders:

- Collaborate with suppliers, customers, and financial institutions to
improve working capital efficiency.
- Communicate transparently with stakeholders to build trust and
facilitate cooperation.

By focusing on these points and implementing strategic initiatives,

Sterlite Industries can enhance its working capital position, strengthen
its financial stability, and support sustainable growth.

11
The analysis of working capital

1. Financial Health Assessment:

- By analyzing working capital, Sterlite Industries can assess its short-
term financial health and liquidity position.
- It helps in evaluating the company's ability to meet its short-term
obligations and fund its day-to-day operations.

2. Efficiency Measurement:
- Working capital analysis allows Sterlite Industries to measure the
efficiency of its working capital management.
- It helps in identifying areas where working capital can be optimized
to improve cash flow and operational efficiency.

3. Risk Management:
- By understanding the composition of its working capital
components, Sterlite Industries can identify potential risks.
- It helps in mitigating risks associated with liquidity shortages,
inventory management, and receivables collection.

4. Strategic Decision Making:

- Working capital analysis provides valuable insights for strategic
decision making within Sterlite Industries.
- It helps in determining the optimal level of working capital required
to support growth initiatives and investment opportunities.

5. Performance Evaluation:
- Through working capital analysis, Sterlite Industries can evaluate its
performance over time.
- It enables comparisons with industry benchmarks and identifies
areas for improvement in working capital management.

12
6. Cash Flow Management:
- Working capital analysis aids in forecasting and managing cash
flows effectively.
- It helps Sterlite Industries in maintaining sufficient liquidity to meet
operational needs and strategic objectives.

7. Investor Confidence:
- Investors and stakeholders rely on working capital analysis to assess
the financial stability and risk profile of Sterlite Industries.
- A strong working capital position can enhance investor confidence
and support sustainable growth.

8. Operational Efficiency:
- By analyzing working capital components such as inventory,
accounts receivable, and accounts payable, Sterlite Industries can
improve operational efficiency.
- It helps in streamlining processes, reducing costs, and optimizing
working capital cycles.

9. Compliance and Reporting:

- Working capital analysis is essential for ensuring compliance with
financial reporting requirements and regulations.
- It provides valuable data for internal reporting, external audits, and
regulatory filings.

10. Continuous Improvement:

- Regular analysis of working capital enables Sterlite Industries to
identify trends, patterns, and areas for improvement.
- It supports a culture of continuous improvement in working capital
management practices.

13
Overall, the analysis of working capital for Sterlite Industries is crucial
for financial management, risk mitigation, strategic planning, and
operational excellence. It plays a vital role in ensuring the company's
resilience, profitability, and long-term sustainability.

14
Tools used for working capital

1. Working Capital Ratio:

- Calculated as current assets divided by current liabilities.
- Helps assess the overall liquidity position of Sterlite Industries.

2. Current Ratio:
- Compares current assets to current liabilities.
- Indicates the company's ability to meet short-term obligations.

3. Quick Ratio:
- Measures the ability to meet short-term liabilities with quick assets
like cash and receivables.
- Provides a more stringent test of liquidity than the current ratio.

4. Cash Conversion Cycle:

- Evaluates the time taken to convert inventory into cash.
- Helps optimize cash flow and working capital efficiency.

5. Inventory Turnover Ratio:

- Compares the cost of goods sold to average inventory.
- Assesses how efficiently Sterlite Industries manages its inventory.

6. Accounts Receivable Turnover:

- Compares credit sales to average accounts receivable.
- Measures how quickly Sterlite Industries collects payments from
customers.

7. Accounts Payable Turnover:

- Compares credit purchases to average accounts payable.
- Evaluates how efficiently Sterlite Industries manages its payables.

15
9. Trend Analysis:
- Compares working capital ratios over multiple periods.
- Highlights trends and patterns in Sterlite Industries' working capital
management.

10. Peer Benchmarking:

- Compares working capital metrics with industry peers.
- Helps Sterlite Industries assess its performance relative to
competitors.

11. Scenario Analysis:

- Evaluates the impact of different scenarios on working capital.
- Assists in strategic decision-making and risk management.

12. Sensitivity Analysi:

- Assesses how changes in key variables affect working capital.
- Helps identify potential risks and opportunities.

13. Financial Modeling:

- Uses historical data and projections to model working capital
scenarios.
- Supports forecasting and planning for Sterlite Industries.

14. Working Capital Management Software:

- Tools that automate working capital analysis and monitoring.
- Enhance efficiency, accuracy, and decision-making in working
capital management.

By utilizing these tools, Sterlite Industries can gain valuable insights

into its working capital position, identify areas for improvement, and
make informed decisions to optimize its liquidity, efficiency, and
financial performance.

16
8. Working Capital Cycle Analysis:
- Tracks the time taken to convert working capital investments into
cash inflows.
- Identifies bottlenecks and opportunities for improvement.

The key points to consider when evaluating the working capital

performance:

1. Efficient Working Capital Management:

- Ensure that current assets are effectively utilized to generate revenue
and meet short-term obligations.

2. Optimal Inventory Management:

- Maintain a balance between carrying sufficient inventory to meet
demand and minimizing holding costs.

3. Timely Accounts Receivable Collection:

- Monitor and shorten the average collection period to improve cash
flow and reduce the risk of bad debts.

4. Effective Accounts Payable Management:

- Manage payables to optimize cash flow and maintain positive
relationships with suppliers.

5. Monitoring Working Capital Ratios:

- Regularly assess metrics like current ratio, quick ratio, and inventory
turnover to gauge liquidity and efficiency.

17
6. Cash Flow Forecasting:
- Develop accurate cash flow projections to anticipate working capital
needs and avoid cash shortages.

7. Minimizing Working Capital Cycle:

- Streamline processes to reduce the time it takes to convert inventory
and receivables into cash.

8. Strategic Supplier Relationships:

- Collaborate with suppliers to negotiate favorable payment terms and
discounts to enhance working capital management.

9. Automation and Technology:

- Implement tools and systems for efficient working capital analysis,
monitoring, and management.

10. Continuous Improvement:

- Regularly review and optimize working capital strategies to adapt to
changing market conditions and business needs.

By focusing on these key areas and implementing strategies to enhance

working capital performance, Sterlite Industries can improve liquidity,
increase operational efficiency, and strengthen its financial health.
Regular monitoring and proactive management of working capital are
essential.

18
COMPANY PROFILE

19
 COMPANY PROFILE

We are a Business Unit of Vedanta Limited ('formerly known as Sesa

Sterlite Limited/Sesa Goa Limited'). Vedanta Limited was created post
the Scheme of Amalgamation and Arrangement (Group Simplification
Scheme) of Sterlite Industries (India) Limited, The Madras Aluminum
Company Limited [MALCO], Sterlite Energy Limited [SEL] and
Vedanta Aluminum Limited [VAL] with Sesa Goa Limited [SGL].
We at 'Sterlite Copper', represent the Copper business of Vedanta
Limited. The Copper business of Vedanta Limited (Sterlite Copper) is
well positioned in the key core sector industries, has a strong track
record of performance.
Sterlite Copper operates a 400,000 Metric Tons Per Annum (MTPA)
Copper Smelter with associates facilities such as Refinery and Copper
Rod Plant, Sulphuric Acid plant of more 12,00,000 MTPA and a
Phosphoric Acid of 220,000 MTPA at Thoothukudi, Tamilnadu. Sterlite
Copper also operates a 160 MW coal based power plant in Thoothkudi,
Tamilnadu. Sterlite Copper has two units in Silvassa in the Union
Territory of Dadra & Nagar Haveli where it operates two Copper Rods
Plants (one in Chincpada and another in Piparia).

Prime Focus areas of the Sterlite Copper:

• Strong Governance and Compliance

• Environment, Safety and Health
• Talent Pool and Technology
• CSR and Community Relations
• Responsible Corporate Citizen
• Sustainable and Continued Operations with lowest energy, water and
natural resources consumption.
• Recycle, Reuse and sustainable disposal of solid wastes.

20
Vision of Sterlite Industries

To be the world's most admired copper producer, committed to create

enhanced value to all stake holders ensuring excellence, innovation and
sustainability.

Mission of Sterlite Copper

• Ensure Zero Tolerance towards the violation of safety, environment

and governance norms.

• Be one of the largest single location copper producer in the world at

lowest cost.

• Ensure all resources for long term sustenance

• Continuously upgrade technology to ensure high quality products and

services to sustain market leadership and surpass customer expectations

• Touch and transform lives of the community

• Create a workplace that respects and values all employees and

promotes innovation

• Develop downstream industries in line with Tamil Nadu Vision 2023

PRODCUTS:

Copper: Vedanta limited operates the largest copper smelter In India, in

Tuticorin. This contributes to nearly 50% of Vedanta Limited's profits.
In early 2016, due to local protests related to environment pollution, the
plant was temporarily shut down by the Tamil Nadu state government.
Vedanta has contested these claims, stating that its gas emissions are
well below the state norms and the emissions of 11 other neighboring
industries. It has also stated that their plant does not pump any water

21
into the sea, due to a change in the plant configuration after a previous
(2013) complaints from the state government.

22
Zine-Lead-Silver: Zinc India business is owned and operated by
Hindustan zinc limited (HZL). HZL owns and operates a fully
integrated zinc-lead business. HZL is one of the world's largest
integrated zinc-lead producers by volume. Sesa Sterlite owns 64.9% of
the share capital of HZL, while the Government of India remains an
equity partner and holds a 29.5% stake.
HZL is listed on Indian stock exchanges (NSE and BSE).HZL's fully
integrated zinc operations include five lead-zinc mines, one rock
phosphate mine, four hydrometallurgical zinc smelters, two lead
smelters, one lead-zinc smelter, four sulphuric acid plants, one silver
refinery and six captive power plants at our Chanderiya, Dariba and
Zawar facilities in the State of Rajasthan, processing and refining
facilities for zinc at Haridwar and for zinc, lead and silver at Pantnagar,
both in the State of Uttarakhand and in northern India.

Aluminum: BALCO has a smelter capacity of 345 ktpa with

capabilities to produce ingots, wire-rods, billets, busbars and rolled
products. BALCO's operations include mines, refineries, smelters and
captive power plants in the state of Chhattisgarh in India. Sesa Sterlite
holds a controlling 51% stake in BALCO, while the Government of
India remains an equity partner and holds the remaining 49% stake.

Pig Iron: This business is skewed towards catering to the steel mills and
foundries of the Indian market, in particular the Western and Southern
India.
The division manufactures basic, foundry and nodular grade pig iron
and also sells slag. The annual production capacity is 250,000 tons per
annum.

23
AIMS AND OBJECTIVE

24
 AIMS AND OBJECTIVE

Based on the information furnished in the Working Capital, various

objectives of this research on Working Capital and growth are:

• To learn about the Working Capital and growth of Sterlite

Industries.

• To know about the Working Capital position of Sterlite Industries.

• To learn the calculation of various ratios.

25
RESEARCH AND METHODOLOGY

26
 RESEARCH AND METHODOLOGY

Research Methodology is a way to systematically solve the research

problem. It may be understood as science of studying how research is
done, scientifically in it we study the various steps that generally
adopted by a researcher in studying his research problem along with the
logic behind them. "Accuracy of the study depends on the systematic
application of the method." The researcher has to decide the method to
be used that helps him to get a desired direction in a systematic way.

Sterlite Industries, now part of Vedanta, managed its working capital

using a strategic approach. Research involved analyzing cash flow
cycles, inventory levels, and receivables/payables management.
Methodology included optimizing cash conversion cycle, improving
inventory turnover, and efficient credit policies. This ensured effective
capital utilization for operations and growth.

27
Data Collection Method:

Data collection is important step in any project and success of any

project will be largely depend upon now much accurate you will be able
to collect and how much time, money and effort will be required to
collect that necessary data, this is also important step.

There are mainly two types of data:

• Primary data:

The primary data is that data which is collected fresh or first hand, and
for first time which is original in nature. Primary data can collect
through personal
interview, questionnaire etc. to support the secondary data.

• Secondary data:

Secondary data means data that already available i.e. they refers to the
data which have already been collected & analyzed by some else. When
the
researcher utilizes secondary data he has to look in to various sources
from where he can obtain them.

28
DATA ANALYSIS &
INTERPRETATION

29
 DATA ANALYSIS & INTERPRETATION

Current Ratio = Current Assets

Current Liabilities

Current Ratio

Mar-23 22-Mar 21-Mar Mar-20 Mar-19

3.03 3.22 2.44 2.41 1.97

3.5
3.22
3.03
3

2.5 2.44 2.41

1.97
2

1.5

0.5

Interpretation:

From the above graph it is observed that current ratio of the company in
2017 was 1.19 but it has increase in 2018 to 2021 and it was continuing
increases

30
Quick Ratio = Quick Assets
Current Liabilities

Quick Ratio

Mar-23 22-Mar 21-Mar Mar-20 Mar-19

3.02 3.22 2.44 2.4 1.97

3.5
3.22
3.02
3

2.5 2.44 2.4

1.97
2

1.5

0.5

Interpretation:
Quick ratio measures your ability to access cash quickly to support
immediate demands. Also known as the acid test, the quick ratio divides
current assets

31
excluding inventory by current liabilities. In year 2019 quick asset ratio
is very low i.e. 1.97 compare to 2020, 2021, 2022 and 2023.
Net Profit ratio = Net profit *100
Net sales

Net Profit Margin

Mar-23 Mar-22 Mar-21 Mar-20 Mar-19

3,295.38 3,779.92 4,696.10 8,065.10 9,794.32

12,000.00

10,000.00 9,794.32

8,065.10
8,000.00

6,000.00
4,696.10

4,000.00 3,779.92
3,295.38

2,000.00

0.00

32
 0.04

0.03
0.03

0.02 0.02 0.02 0.02

0.02

0.01

0.00

Interpretation:
Total Assets is the sum of all assets, current and fixed. The asset
turnover ratio measures the ability of a company to use its assets to
efficiently generate sales. The higher the ratio indicates that the
company is utilizing all its assets efficiently to generate sales.
Companies with low profit margins tend to have high asset turnover.

Fixed assets turnover ratio = Net sales

Fixed assets

Fixed assets turnover ratio

Mar-23 Mar-22 Mar-21 Mar-20 Mar-19

0.86 1.19 1.18 1.17 0.99

33
 30.00 28.52

25.00 24.19 23.71

20.00

15.00

11.59

10.00 9.11

5.00

0.00

Interpretation:
Among the total capital employed in the form of total assets, this ratio
measures the contribution of fixed assets in sales and the resultant
profitability.
It is difficult to interpretate ratio as assets value based on historic cost.

Interest Coverage ratio = Debit

Interest Expense

Interest Coverage ratio

Mar-23 Mar-22 Mar-21 Mar-20 Mar-19

9.11 11.59 24.19 23.71 28.52

34
 30.00 28.52

25.00 24.19 23.71

20.00

15.00

11.59

10.00 9.11

5.00

0.00

Interpretation:
The Interest coverage ratio is used to determine how easily a company
can pay interest expenses on outstanding debt. The ratio is calculated by
dividing company's earnings before interest and taxes (EBIT) by the
company's interest expenses for the same period. The lower the ratio,
the more the company is burdened by debt expense. When a company's
interest coverage ratio is only 1.5 or lower, it: ability to meet interest
expenses may be questionable.

Debt-Equity Ratio = Long - term Debt

Shareholders Fund

Interest Coverage ratio

Mar-23 Mar-22 Mar-21 Mar-20 Mar-19

0.12 0.09 0.07 0.06 0.04

35
 0.14

0.12
0.12

0.10
0.09

0.08
0.07
0.06
0.06

0.04
0.04

0.02

0.00

Interpretation:
Debtor's turnover ratio was 0.4 which show inefficiency of credit
management. The above graph indicates that the company did not
follow strict credit providing policy.

36
Working Capital Calculation

Working capital represents a company's ability to cover its short-term obligations with its
current assets. It reflects the operational efficiency and financial health of a business. The
formula to calculate working capital is:

Working Capital =Total Current Assets − Total Current Liabilities

Total Current Current

Year Assets Liabilities Working Capital
2023 18,121.42 8,273.43 9,847.99
2022 15,321.24 8,529.27 6,791.97
2021 11,695.21 7,593.30 4,101.91
2020 243.86 4,763.78 -4,519.92
2019 158.54 4,521.26 -4,362.72

Working Capital
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
2023 2022 2021 2020 2019
-2,000.00
-4,000.00
-6,000.00

Interpretation

The table illustrates the fluctuation in Working Capital over the specified years. Notably, there's
a substantial positive trend from 2019 to 2021, with Working Capital increasing from -4,362.72
to 4,101.91. However, a sharp decline occurs in 2020, resulting in negative Working Capital (-
4,519.92), primarily due to a significant increase in Current Liabilities relative to Total Current
Assets. This suggests a volatile financial position during these years.

37
CONCLUSION

38
 CONCLUSION

*An immense support from my project guide motivated me to undertake

this practical project work in the most emphatic manner. It was not just
a part of my curriculum but a real-life experience of carrying out a field
work. My contribution included a detailed study of Ratio Analysis of
last five years
Sterlite Industries.

*My study included the analysis and interpretation of Working Capital

of Sterlite Industries to get the overview of working capital of the
company. Proper technique had been used for evaluating the ratios from
the working capital

*Analysis and data presentation of ratios has been done through using
simple tables and graph chart to show the figures in last three years.

*The company's overall position is at a good position. Particularly the

current year's position is well due to raise in the profit level from the
last year position Sterlite Industries. It is better for the organization to
diversify the funds to different sectors in the present market scenario.

*Inventory is the biggest item of balance sheet that must have

demanded a large amount of maintaining cost. So, there is need for
efficient Inventory Management.

The study was helpful in assessing the strength and the working capital
of the Sterlite Industries.

39
SUGGESTIONS

40
 SUGGESTIONS

Companies should try to increase its proportion of fixed asset to net

worth.
* Companies should utilize its stock more efficiently.

* Companies should pay attention towards the proper and efficient

utilization of working capital.

* Companies should improve its sales strategy.

* Companies must increase its return.

* It should also pay attention in increasing its net worth in comparison

to sales.

* Companies must try and maintain a good fixed assets base.

* Companies should increase its net profit margin, so it can survive in

adverse condition also.

* Companies should try to reduce their expenses particularly non-

operating expenses, so that the margin of profit can be increased.

41
* Operating expenses should be especially considered to be reduced.

* There should be efficient utilization of shareholder fund to increase

return on investment and return on equity to maintain its goodwill in
investors mind.

* Operating expenses of Sterlite Industries should be reduced by

reducing the unnecessary expenses.

42
BIBLOGRAPHY

43
Reports:

• Sterlite Industries' Annual Reports (For last 5 years, From 2019 to

2023)

Internet Sources

• https://www.nibusinessinfo.co.uk/content/measure-your-financial-
performance
• https://www.moneycontrol.com/financials/sterliteindustries(india)/bal
ance-sheet/SII
• https://www.moneycontrol.com/financials/sterliteindustriesindia)/rati
Os/SII
• https://www.financialexpress.com/archive/sterlite-industries-
india/70403/

44
ANNEXURE

45
Consolidated Yearly Results of Sterlite Industries
(India) ________________in RS. Cr_________________
Mar '23 Mar '22 Mar '21 Mar'20 Mar '19
30,248.0
Net Sales/Income from operations 44,921.89 40,966.77 6 24,682.45 21,448.40
Other Operating Income 240.4 212.17 180.44
30,428.5
Total Income From Operations 45,162.29 41,178.94 0 24,682.45 21,448.40
EXPENDITURE
14,937.9
Consumption of Raw Materials 20,748.43 18,712.27 7 12,273.56 10,278.42
Purchase of Traded Goods 56.74 12.07 17.2 -- --
Increase/Decrease in Stocks 134.99 119.67 -565.72 -198.16 280.21
Power & Fuel 4,419.63 4,040.07 2,379.57 1,953.38 2,131.83
Employees Cost 1,879.94 1,612.21 1,131.65 853.96 756.08
Depreciation 2,031.78 1,829.81 1,030.13 749.79 700.67
Excise Duty -- -- -- -- --
Admin. And Selling Expenses -- -- -- -- --
R & D Expenses -- -- -- -- --
Provisions And Contingencies -- -- -- -- --
Exp. Capitalized -- -- -- -- --
Other Expenses 7,453.68 6,819.33 4,478.36 3,455.82 2,993.55
Other income 8,437.10 8,033.51 7,019.34 5,594.10 4,307.64
P/L Before Other Inc., Int., Excpt. 3,470.08 11,196.72 2,472.35 1,687.23 1,850.08
Items & Tax 11,907.18 11,197.62 9,491.69 7,281.33 6,157.72
Interest 922.24 852.42 301.19 342.35 397.28
P/L Before Exceptional Items & Tax 10,984.94 10,344.30 9,190.50 6,938.98 5,760.44
Exceptional Items -117.53 -472.64 --
P/L Before Tax 10,867.41 9,871.66 9,190.50 6,938.98 5,760.44
11,811.6
Tax 1,618.39 2,110.55 4 1,232.97 849.2
P/L After Tax from Ordinary Activities 9,249.02 7,761.11 7,378.86 5,706.01 4,905.41
Prior Year Adjustments -- -- -- -- --
ANNEXURE
Yearly Results

46
 Extra Ordinary Items -- -- -56.82 -296.96 5.31
Net Profit (Loss) For the Period 9,249.02 7,761.11 7,322.04 5,409.05 4,960.72
Minority Interest -2,528.91 -2,160.92 -1,994.53 -1,724.08 -1,267.14
Share Of P/L Of Associates -659.79 -772.27 -284.99 58.77 -153.59
Net P/L After M.I & Associates 6,060.32 4,827.92 5,042.52 3,743.74 3,539.99
Equity Share Capital 336.12 336.12 336.12 168.08 141.7
50,619.0 45,719.5 41,099.1 36,843.9 25,471.6
Reserves Excluding Revaluation Reserves 5 6 5 2 9
Equity Dividend Rate (%) -- --
EPS Before Extra-Ordinary
Basic EPS 18.03 14.36 15 46.79 49.96
Diluted EPS 18.03 14.36 14.32 45.84 49.96
EPS After Extra Ordinary
Basic EPS 18.03 14.36 15 46.79 49.96
Diluted EPS 18.03 14.36 14.32 45.84 49.96
Public Share Holding
No Of Shares (Crores) 112.02 115.09 114.95 27.78 19.93
Share Holding (%) 33.33 34.24 34.2 33.05 28.13
Promoters and Promoter Group Shareholding
a) Pledged/Encumbered
Number of shares (Crores) -- -- -- -- --
Per. of shares (as a % of the total sh. of prom. and
promoter group) -- -- -- -- --
Per. of shares (as a % of the total
Share Cap. of the company) -- -- -- -- --
b) Non-encumbered -- --
Number of shares (Crores) 179.19 179.19 177.46 -- --
Per. of shares (as a % of the total sh. of prom. and
promoter group) 100 100 100 -- --
Per. of shares (as a % of the total
Share Cap. of the company) 53.31 53.31 52.8 -- --

47
 Balance sheet of sterlite industries
Mar '23 Mar '22 Mar '21 Mar'20 Mar '19
Sources Of Funds
Total Share Capital 6,316.36 6,316.36 6,316.36 6,316.36 6,316.36
Equity Share Capital 6,316.36 6,316.36 6,316.36 6,316.36 6,316.36
Share Application Money 0 0 0 0 0
Preference Share Capital 0 0 0 0 0
Reserves 14,199.80 13,248.39 11,499.6 10,744.36 8,920.86
5
Revaluation Reserves 0 0 0 0 0
Net worth 20,516.16 19,564.75 17,816.0 17,060.72 15,237,122
1
Secured Loans 0 0 0 0 0
Unsecured Loans 914.39 1,173.54 1,187.98 1,464.30 1,786.62
Total Debt 914.39 1,173.54 1,187.98 1,464.30 1,786.62
Total Liabilities 21,430.55 20,738.29 19,003.9 18,525.02 17,023.84
9
Mar '23 Mar '22 Mar '21 Mar '20 Mar '19

12 MThs 12 MThs 12 MThs 12 MThs 12 MThs

Application Of Funds
Gross Block 356.66 356.07 347.23 376.63 368.92
Less: Annum
Depreciation 260.03 255.17 248.52 283.23 273.95
Net Block 96.63 100.9 98.71 93.4 94.97
Capital Work in Progress 121.89 73.41 55.72 17.84 5.99
Investments 9,026.07 6,541.19 6,319.17 6,316.57 6,316.36
Inventories 15.66 18.51 35.69 26.59 19.52

48
 Sundry Debtors 1.48 0.01 0 0 0.02
18,104.2 15,302.7 11,659.5
Cash and Bank Balance 8 2 2 217.27 139
18,121.4 15,321.2 11,695.2
Total Current Assets 2 4 1 243.86 158.54
Loans and Advances 6,671.11 8,675.46 9,507.17 8,380.19 9,354.33
Fixed Deposits 0 0 0 8,916.10 6,323.76
Total CA, Loans & 24,792.5 23,996.7 21,202.3 17,540.1 15,836.6
Advances 3 0 8 5 3
Deferred Credit 0 0 0 0 0
Current Liabilities 8,273.43 8,529.27 7,593.30 4,763.78 4,521.26
Provisions 4,333.14 1,444.64 1,078.69 679.14 708.85
12,606.5
Total CL & Provisions 7 9,973.91 8,671.99 5,442.92 5,230.11
12,185.9 14,022.7 12,530.3 12,097.2 10,606.5
Net Current Assets 6 9 9 3 2
Miscellaneous
Expenses 0 0 0 0 0
21,430.5 20,738.2 19,003.9 18,525.0 17,023.8
Total Assets 5 9 9 4 4

Contingent Liabilities 2,112.74 2,306.44 1,790.28 164.74 190.86

Book Value (RS) 32.48 30.97 27.01 27.01 24.12

49
 Operating ProfitProfit & Loss
-369.37
account -116.53 -139.2 (India)-45
of sterlite industries -150.66
PBDIT 10,718.64 8,985.18
Mar '23 4,933.30 4,260.88
Mar '22 Mar '21 Mar'20 Mar '19 4,133.45
Interest 375.65 378.73 203.66 386.46 475.3
PBDT
Income 10,342.99 8,606.45 4,729.64 3,874.42 3,658.15
Depreciation
Sales Turnover 4.96 352.25 6.96 415.86 6.08409.46 8.99 449.21 6.17318.89
Other Excise
WrittenDuty
Off 0 0 0 0 0 0 0 1.07 00.84
Profit Before Tax
Net Sales 10,338.03352.258,599.49
415.864,723.56409.463,865.43
448.14 3,651.98
318.05
Extra-ordinary items 0 0.469,101.7 -0.19 114.65 -192.35
Other Income 11,088.01 5,072.50 4,305.88 4,284.11
PBT (Post Extra-Ord 1
Items)
Stock Adjustments 10,338.03-2.548,599.95 -17.064,723.378.54 3,980.08
6.67 3,459.63
8.33
Tax 543.71 534.859,500.527.27 200 162.85
Total Income 11,437.72 5,490.50 4,760.69 4,610.49
Reported Net Profit 9,794.32 8,065.10 1 4,696.10 3,779.92 3,295.38
Total ValueExpenditure
Addition 707.47 505.65 547.17 493.75 469.39
Raw Materials
Preference Dividend 0 11.61 0 9.68 0 10.03 0 6.06 07.64
Power
Equity & Fuel Cost 8,842.916.836,316.365.452,463.38
Dividend 6.2 2,210.00
5.93 1,705.42
8.48
Employee
Corporate DividendCost
Tax 0 444.73 0 345.34 0 277.92 0240.91 282.1
0
OtherPer
Manufacturing
share data Expenses 54.37 46.4 86.47 29.66 21.21
(annualized)
Selling and Admin Expenses 0 0 0 155.41 110.09
Miscellaneous Expenses 201.54 108.46 176.5863,163.6
61.84 47.52
Shares in issue (lakhs) 63,163.64
Preoperative Exp Capitalized 0 63,163.64 0 63,163.64 0 4 0 63,163.64
0
EarningTotal
Per Share (Rs)
Expenses 15.51 719.0812.77515.33 7.43557.2 5.98 499.81 5.22477.04
Equity Dividend (%) 140 Mar '23 100Mar '22 39Mar '21 35 Mar'20 Mar 27 '19
Book Value (Rs) 32.48 30.97 28.21 27.01 24.12
12 MThs 12 MThs 12 MThs 12 MThs 12 MThs

50
Key Financial Ratio of Sterlite industries

Mar '23 Mar '22 Mar '21 Mar'20 Mar '19

Investment Valuation Ratios
Face Value 10 10 10 10 10
Dividend Per Share 14 10 3.9 3.5 2.7
Operating Profit Per Share (Rs) -0.58 -0.18 -0.22 -0.07 -0.24
Net Operating Profit Per Share (Rs) 0.56 0.66 0.65 0.71 0.5
Free Reserves Per Share (Rs) -- -- -- 12.99 10.57
Bonus in Equity Capital -- -- -- -- --
Profitability Ratios
Operating Profit Margin (%) -104.86 -28.02 -33.99 -10.08 -47.81
Profit Before Interest And Tax Margin (%) -3.27 -1.29 -2.65 -1.14 -3.44
Gross Profit Margin (%) -106.26 -29.69 -35.48 -12.08 -49.75
Cash Profit Margin (%) 85.65 84.8 85.77 77.26 75.86
Adjusted Cash Margin (%) 85.65 84.8 85.77 77.26 75.86
Net Profit Margin (%) 85.61 84.73 85.66 79.59 71.76
Adjusted Net Profit Margin (%) 85.61 84.73 85.66 79.59 71.76

51
 Return On Capital Employed ((%) 49.99 43.29 25.92 22.92 24.17
Return On Net Worth (%) 47.73 41.22 26.35 22.15 21.62
Adjusted Return on Net Worth (%) 47.73 41.22 26.35 21.45 22.82
Return on Assets Excluding Revaluations 32.48 30.97 28.21 27.01 24.12
Return on Assets Including Revaluations 32.48 30.97 28.21 27.01 24.12
Return on Long Term Funds (%) 49.99 43.29 25.92 22.92 24.17
Liquidity And Solvency Ratios
Current Ratio 1.97 2.41 2.44 3.22 3.03
Quick Ratio 1.97 2.4 2.44 3.22 3.02
Debt Equity Ratio 0.04 0.06 0.07 0.09 0.12
Long Term Debt Equity Ratio 0.04 0.06 0.07 0.09 0.12
Debt Coverage Ratios
Interest Cover 28.52 23.71 24.19 11.59 9.11
Total Debt to Owners Fund 0.04 0.06 0.07 0.09 0.12
Financial Charges Coverage Ratio 28.53 23.72 24.22 11.01 8.67
Financial Charges Coverage Ratio Post
Tax 27.09 22.31 24.09 10.8 7.95
Management Efficiency Ratios
Inventory Turnover Ratio 22.49 22.47 11.47 18.58 18.22

52
 43,934.9
Debtors Turnover Ratio 472.82 41,586.00 4,094,600.00 4 15,745.09
Investments Turnover Ratio 22.49 22.47 11.47 18.58 18.22
Fixed Assets Turnover Ratio 0.99 1.17 1.18 1.19 0.86
Total Assets Turnover Ratio 0.02 0.02 0.02 0.02 0.02
Asset Turnover Ratio 0.02 0.02 0.02 0.03 0.02

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held 10.91 7.06
Number of Days In Working Capital 11,810.45 11,813.63 11,013.40 9,718.02 12,005.47
Profit & Loss Account Ratios
Material Cost Composition 3.29 2.32 2.44 1.35 2.4
Imported Composition of Raw Materials
Consumed -- -- -- -- --
Selling Distribution Cost Composition -- -- -- 24.14 22.71
Expenses as Composition of Total Sales 0.02 1.89 1.62 2.19
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 90.28 78.31 52.45 58.46 51.75

53
 Dividend Payout Ratio Cash
Profit 90.24 78.24 52.38 58.32 51.65
Earning Retention Ratio 9.72 21.68 47.55 39.63 50.97
Cash Earning Retention Ratio 9.76 21.75 47.62 39.78 51.05
Adjusted Cash Flow Times 0.09 0.15 0.25 0.4 0.51

Mar '23 Mar '22 Mar '21 Mar'20 Mar '19

Earnings Per Share 15.51 12.77 7.43 5.98 5.22

Book Value 32.48 30.97 28.21 27.01 24.12

54
55