Scribd
Upload
43 views26 pages

PRESENTATION KK

This document provides an analysis of the working capital management of Surya Pharmaceutical Ltd over a 4 year period from 2006-2007 to 2009-2010. It includes calculations of key working capital ratios such as current ratio, quick ratio, debtors turnover ratio, and inventory turnover ratio. The analysis found that the company's current ratios were within industry standards but liquidity increased over time. Recommendations include adopting new technologies to improve efficiency and raising more short-term funds which are cheaper than long-term funds. In conclusion, positive working capital and higher current assets indicate the company can pay short-term debts.

Uploaded by

Karam Kaur
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
43 views26 pages

PRESENTATION KK

This document provides an analysis of the working capital management of Surya Pharmaceutical Ltd over a 4 year period from 2006-2007 to 2009-2010. It includes calculations of key working capital ratios such as current ratio, quick ratio, debtors turnover ratio, and inventory turnover ratio. The analysis found that the company's current ratios were within industry standards but liquidity increased over time. Recommendations include adopting new technologies to improve efficiency and raising more short-term funds which are cheaper than long-term funds. In conclusion, positive working capital and higher current assets indicate the company can pay short-term debts.

Uploaded by

Karam Kaur
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 26

WORKING CAPITAL

TABLE OF CONTENT

 COMPANY PROFILE
 RESEARCH METHODOLOGY
 INTRODUCTION TO PROJECT
 LIMITATIONS OF MY STUDY
 SUGGESTIONS & RECOMMENDATIONS
 CONCLUSION
ABOUT SURYA
 Surya Pharmaceutical Limited is Global health care and
pharmaceutical services provider.

 Surya Pharmaceutical Limited was established in 1992,


Surya Pharmaceutical Ltd is into the business of
manufacture and export of pharmaceutical products.

 With a global presence in about 90 countries and


annual turnover of Rs 1300 crore .

 SPL is among the top 50 pharmaceutical companies in


India.
PRODUCT PORTFOLIO

Intermediates

Active pharmaceutical ingredients

Formulations

R&D

Mint Derivatives

Herbal Products
RESEARCH OBJECTIVES
 Todetermine the amount of working capital
requirement and to calculate various ratios
relating to working capital.
DATA COLLECTION TOOLS

 SECONDARY PARTICIPATION
◦ Data collection tools involving secondary participation
require no direct contact to gather information( e.g.
Web-Based Surveys)
 IN-PERSON OBSERVATION
◦ This tool is used when there is face to face contact
with other person(e.g. My guide Mr. Mohinder Singh).
INTRODUCTION OF MY PROJECT
 Every business needs funds for two purposes for
its establishment and to carry out its day- to-day
operations.
 Long terms funds are required to create
production facilities through purchase of fixed
assets.
 Funds are also needed for short-term purposes for

the purchase of raw material, payment of wages


and other day – to- day expenses etc. These
funds are known as working capital.
Size of working capital in SuryaPharmaceutical Ltd
Size of Working Capital

      (Rs. In CRORES)

Particulars 2006-07 2007-08 2008-09 2009-10


A) Current Assets        
Inventories 80.68 133.53 236.9 373.18
Sundry Debtors 45.9 70.15 78.47 137.31
Cash & Bank Balance 3.72 7.47 33.72 8.32
Loan & Advances 23.5 34.69 61.27 114.88

Total of A (Gross Working Capital) 153.8 245.84 410.36 633.69


         
B)Cuurent Liabilities        
CURRENT LIABILITY 120.93 181.04 328.27 506.51
Total of B 120.93 181.04 328.27 506.51
         
Net Working Capital (A-B) 140.87 64.8 82.09 127.18
WORKING CAPITAL TREND ANALYSIS

 Working capital is one of the important fields of


management. It is very essential for an analyst to
make a study about the trend and direction of working
capital over a period of time. Such analysis enables as
to study the upward and downward trend in current
assets and current liabilities and it’s effect on the
working capital position.
“The trend is defined as smooth irreversible movement
in the series. It can be increasing or decreasing.”
W.C. Indices
180
154.92
160
140 126.68

120
100 100 W.C. Indices
80
60
50
40
20
0
2006-07 2007-08 2008-09 2009-10
Classification of working capital ratio

 Efficiency ratio
These ratio indicate the speed with which
assets are being turned over into sales.
1. Working capital turnover ratio
2. Inventory turnover ratio
3. Receivable turnover ratio
4. Current assets turnover ratio
 Liquidity ratio
These are the ratio which measure the short
term financial position of a firm.
1. Current ratio
2. Quick ratio
Working capital turnover ratio

Working Capital turnover ratio measures the


efficiency with which the working capital is used
by a firm.

WCT= SALES / NET WORKING CAPITAL


7
5.92 5.68
6
5 4.37
4
3
2 1.69
1
0
W.C.TOR
INVENTORY TURNOVER RATIO

 Inventory turnover ratio indicates the


number of times the stock has been
turned over during the period and evaluates the efficiency
with which a firm is able to manage its inventory.

Inventory turnover ratio=Net Sales/Avrage Inventory

It iIIs calculated by dividing the cost of good sold by average


inventory. The average inventory is the average of opening
and closing balance of inventory
Inventory TOR
3

2.5 2.64 2.62


2.37
2
Inventory TOR
1.5

0.5

0
0.03
Receivable turnover ratio

 Debtors turnover ratio indicates the velocity of


debt collection of firm . It indicate the number of
times average debtors are turned over during a
year. Generally the higher the value of debtor’s
turnover, the more is the management of credit.

Debtors turnover ratio=Sales/Avrage Debtors


Gross sales
Receivable turnover ratio =
Average account receivables 
Receivable TOR
5

4 4.44

3 3.48
2.78 2.6
Receivable TOR
2

0
Current Ratios
 Current Ratio measure liquidity and short
term financial position of a firm.

Current Ratio=Current Asset/Current Liability


Current ratio
1.36
1.34 1.35
1.32
1.3 Current ratio
1.28
1.26 1.27
1.24 1.25 1.25
1.22
1.2
Quick ratio

 Quick ratios establish the relationship between


quick or liquid assets and liabilities.
 All current asset are liquid asset except inventory

and prepaid expenses.

Quick Ratio=Liquid Asset/Current Liability


ASGFGH KKHKJHKJHF Current
liabilities
Quick ratio
0.7
0.6 0.62
0.6
0.5 0.52 0.51 Quick ratio
0.4
0.3
0.2
0.1
0
LIMITATIONS OF STUDY
 Limited data:- This project has completed with
annual reports it just constitutes one part of data
collection i.e. secondary. There were limitations for
primary data collection because of confidentiality.
 Limited period:- This project is based on four year
annual reports. Conclusions and recommendations
are based on such limited data. The trend of last four
year may or may not reflect the real working capital
position of the company
 Limited area:- Also it was difficult to collect the data
regarding the competitors and their financial information.
Industry figures were also difficult to get
SUGGESTIONS & RECOMMENDATIONS

 The company should focus on the adoption of latest


technology to improve the efficiency levels so that the
company can compete with their respective competitors
in a better way.
 Company should raise funds through short term sources
for short term requirement of funds, which
comparatively economical as compare to long term
funds.
CONCLUSION

The study of working capital management of Surya Pharmaceutical Ltd.


has revealed that the current rationing was as per the standard
industrial practice but the liquidity position of the company showed an
increasing trend.

The study has been conducted on working capital ratio analysis ,
which helped the company to manage its working capital efficiency and
effectively.
Positive working capital indicates that company has the ability of
payments of short terms liabilities.

Current assets are more than current liabilities indicate that company
used long term funds for short term requirement, where long term funds
are most costly then short term funds.
 
 

You might also like