A STUDY ON CASH FLOW STATEMENT

OF
TCS- ION Company

A project report submitted to the Punjab Technical University in partial fulfillment of the
requirements for the award of the degree
of
Bachelor of Commerce (Professional)
(2013-2016)

Under the Guidance of

By
Prof.
B.com (P)

(Department

Submitted
of

Management

Studies)
1328956

DAV College, BATHINDA

(Affiliated to PunjabI University, PATIALA)

TABLE OF CONTENTS

S.NO

NAME OF TOPIC

PAGE NO.

CERTIFICATE
DECLARATION
ACKNOWLEDGEMENT
EXECUTIVE SUMMARY
CHAPTER-1

COMPANY PROFILE

CHAPTER-2

INTRODUCTION TO TOPIC

CHAPTER-3

REVIEW OF LITERATURE

CHAPTER-4

RESEARCH METHODOLOGY
-RESEARCH OBJECTIVES
-SCOPE OF STUDY
-IMPORTANCE OF STUDY
-LIMITATIONS OF STUDY

CHAPTER-5

DATA ANALYSIS & INTERPRETATION

CHAPTER-6

FINDINGS & CONCLUSION

CHAPTER-7

RECOMMENDATION/
SUGGESTION

CHAPTER-8

BIBLIOGRAPHY

DECLARATION

I hereby declare that the project entitled A STUDY ON CASH FLOW STATEMENT
OF TCS- iON Submitted in partial fulfillment of the requirements for award of the

degree of B.B.A. at DAV College Bathinda, Affiliated to Punjabi University, Patiala is an

authentic work and has not been submitted to any other University/Institute for award of
any degree/diploma.

Name-

\ACKNOWLEDGEMENT

Firstly I would like to express our immense gratitude towards our institution DAV College
Bathinda, which created a great platform to attain profound technical skills in the field of
B.com(P) thereby fulfilling our most cherished goal.
I would thank all the finance department of TCS- iON specially Mr. Aman Kumar, and
the employees in the finance department for guiding me and helping me in successful
completion of the project.
I will also specifically thank to Prof., Department, Head, Dav college Bathinda for the
(Internal Guide) for extending his cooperation in doing this project.
I shall be failing in my duty if I do not acknowledge the affection, assistance, blessings
an moral support given to me by my family, specially my father who encouraged me
and instilled me the self belief and never to say die attitude.
Last but not the least, I will like to thank God for blessing me and giving me such a
wonderful opportunity.

CHAPTER-1

COMPANY PROFILE

TATA Consultancy Service

Type

Public

Traded as

BSE: 532540
NSE: TCS
BSE SENSEX Constituent
CNX Nifty Constituent

Industry

IT services, IT consulting

Founded

1968

Founder

J.R.D Tata

Headquarters

Mumbai, Maharashtra, India

Area served

Worldwide

Key people

N Chandrasekaran
(CEO & MD)

Services

IT, business consulting and outsourcing services

Revenue

US$ 15.5 billion (2015)

Operating income

US$ 3.7 billion (2015)

Profit

US$ 3.5 billion (2015)

Total assets

US$ 54.58 billion (2015)

Total equity

US$ 84.35 billion (2015

Number of

335,620 (August 2015)

employees
Parent

Tata Group

Subsidiaries

iON Limited, TCS China, TRDDC, Computational Research

Laboratories

Slogan

Experience certainty

Website

www.tcs.com

Tata Consultancy Services Limited (TCS)is an Indian multinational information technology

(IT)

service, consulting and

business

solutions

company

head

quartered in Mumbai, Maharashtra. It is a subsidiary of the Tata Group and operates in 46

countries.TCS is one of the largest Indian companies by market capitalization ($80
billion). TCS is now placed among the Big 4 most valuable IT services brands
worldwide. In 2015, TCS is ranked 64th overall in the Forbes World's Most Innovative
Companies ranking, making it both the highest-ranked IT services company and the first
Indian company. It is the world's 10th largest IT services provider, measured by the revenues.

History:
2000 to present
On 25 August 2004, TCS became a publicly listed company.

In

2005,

TCS

became

the

first

India-based

IT

services

company

to

enter

the bioinformatics market.

In 2006, TCS designed an ERP system for the Indian Railway Catering and Tourism
Corporation.
In 2008, TCS's e-business activities were generating over US$500 million in annual revenues.
In 2008, TCS undertook an internal restructuring exercise which aimed to increase the
company's ability.
TCS entered the small and medium enterprises market for the first time in 2011, with cloudbased offerings. On the last trading day of 2001 TCS overtook RIL to achieve the highest
market capitalization of any India-based company.
In the 2011/12 fiscal year, TCS achieved annual revenues of over US$10 billion for the first
time.
In May 2013, TCS was awarded a six-year contract worth over 1100 crores to provide
services to the Indian Department of Posts.
In 2013, TCS moved from the 13th position to 10th position in the League of top 10 global IT
services companies
In July 2014, TCS became the first Indian company to cross the Rs 5 lakh crores mark in
market capitalization.
In Jan 2015, TCS ends RIL's 23-year run as most profitable firm.
Products and services:
TCS and its 67 subsidiaries provide a wide range of information technology-related products
and services including application development, business process outsourcing, capacity
planning, consulting, enterprise software, hardware sizing, payment processing, software
management and technology education services. Its established software products are TCS
Banks and TCS MasterCraft.
Service lines:
TCS' services are currently organized into the following service lines (percentage of total
TCS revenues in the 2012-13 fiscal year generated by each respective service line is shown in
parentheses):
Application development and maintenance (43.80%) value;

Asset leverage solutions (2.70%);

Assurance services (7.70%);
Business process outsourcing (12.50%);
Consulting (2.00%);
Engineering and Industrial services (4.60%);
Enterprise solutions (15.20%); and
IT infrastructure services (11.50%).
Operations:
TCS have 230 offices across 46 countries and 147 delivery centers in 21 countries.At the
same date TCS had a total of 58 subsidiary companies.
Locations:
TCS has operations in the following locations:
India: Ahmedabad, Bangalore, Baroda, Bhubaneswar, Chennai, Coimbatore, Patna, Delhi, Ga
ndhinagar, Goa, Gurgaon,Guwahati, Hyderabad, Bhopal , Indore, Jamshedpur, Kochi, Kolkat
a, Lucknow , Kalyanpur, Mumbai, Nagpur, Noida, Puneand siliguri, Trivandrum
Africa: South Africa, Morocco
Asia
(excludingIndia): Bahrain, China, Israel, UAE, Hon
gkong, Indonesia, Japan, Malaysia, Philippines, Saudi

Arabia,

Singapore, South

Korea, Taiwan, Thailand, Qatar

Australia: Australia
Europe: Belgium, Denmark, Finland, France, Germany, Hungary, Iceland, Republic

of

Ireland, Italy, Luxembourg,Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and

United Kingdom.
North America: Canada, Mexico and United States.
South America: Argentina, Brazil, Chile, Colombia, Ecuador, Peru and Uruguay.
Tata Research Development and Design Centre:

TCS established the first software research centre in India, the Tata Research Development
and Design Centre, in Pune, India in 1981. TRDDC undertakes research in Software
engineering, Process engineering and systems research. Research at TRDDC has also resulted
in the development of Sujal, a low-cost water purifier that can be manufactured using locally
available resources. TCS deployed thousands of these filters in the Indian Ocean Tsunami
disaster of 2004 as part of its relief activities. This product has been marketed in India as Tata
swach, a low cost water purifier.
Innovation Labs:
In 2007, TCS launched its co-innovation network, a network of innovation labs, start up
alliances, university research departments, and venture capitalists. In addition, TCS has 19
innovation labs based in three countries.TCS' partners include Collabnet, Cassatt, academic
institutions

such

as IITs, Stanford, MIT, Carnegie

Mellon and

venture

capitalists

like Sequoia and Kleiner Perkins.

Employees:
TCS is one of the largest private sector employers in India, and the second-largest employer
among

listed

Indian

companies

(after Coal

India

Limited).

TCS had a total of over 335,620 employees as of October 2015, of which 31% were
women. The number of non-Indian nationals was 21,282 as at March 31, 2013 (7.7%).The
employee costs for the FY 2012-13 were US$4.38 billion, which was approx. 38% of the
total revenue of the company for that period. In the fiscal year 2012-13, TCS recruited a total
of 69,728 new staff, of whom 59,276 were based in India and 10,452 were based in the rest of
the world. In the same period, the rate of attrition was 10.6%. The average age of a TCS
employee is 28 years. The employee utilisation rate, excluding trainees, for the FY 2012-13
was 82%. TCS was the fifth-largest United States visa recipient in 2008 (after
Infosys, CTS, Wipro and Mahindra Satyam).In 2012, the Tata group companies, including
TCS, were the second largest recipient of H-1B visas.
SubramaniamRamadorai, former CEO of TCS, has written an autobiographical book about
his experiences in the company called The TCS Story...and beyond.
As of June 2014, TCS has over 300,000 employees. It is world's third largest IT employer
behind IBM and HP..
Class action lawsuit:

On 14 February 2006, U.S. law firm LieffCabraserHeimann& Bernstein, LLP filed a

nationwide class action lawsuit against Tata. In July 2013, judge Claudia Wilken of the U.S.
District Court, Northern District of California in Oakland, California, granted final approval
to the settlement of the lawsuit on behalf of all non-U.S. citizens employed by TCS within the
state of California from 14 February 2002 to 30 June 2005. The workers claimed that they
were forced to sign over their federal and state tax refunds to their employer, as well as
stating their Indian salaries were wrongfully deducted from their U.S. pay. On February 22,
2013, the Company entered into an agreement to settle for a sum of INR 16,163 lakhs
($29.75 million), this class action suit filed in a United States Court relating to payment to
employees on deputation.

TATA Consultancy Service- iON

Type

Public

Traded as

NSE: TCS-iON

Industry

IT b services, IT consulting, IT Education

Founded

2014

Founder

J.R.D Tata, Syrusmistari

Headquarters

Delhi, Mumbai, Maharashtra, India

Area served

Worldwide

Key people

N Chandrasekaran
(CEO & MD)

Services

IT, business consulting and outsourcing services

Revenue

2 US$ billion (2015)

Operating income

US$ 0.12 billion (2015)

Profit

US$ .0123 billion (2015)

Total assets

US$ `12.58 billion (2015)

Total equity

US$ 4.35 billion (2015

Number employees 3000 (August 2015)

Parent

Tata Group

Slogan

Experience certainty

Website

www.tcsion.com

TCS- iON

Now TCS is dealing in education and web development under the name of iON.
TCS-iON is at present, the most rapidly growing online web solutions company in
India, providing IT enabled services, consultation and outsourcing to companies
spread in more than 165 countries across 7 continents. Their advanced delivery model
blends technology practices with functional expertise to help us improve our business
processes and boost performance.
Their professional website design, Website development, logo design, Flash design,
and SEO services, among others, can go a long way in determining the success of
your business. Custom creation also includes, but is not limited to, incorporating
images, video and other interactive content into our site, apart from the usual text
element
They offer their clients a repertoire of services like ecommerce website creation and
portal development, brand marketing on leading ad networks, digital marketing, web
analytics and much more. Their talented and experienced team of professionals
comprise Web 2.0 development executives who offer advanced solutions for
publishers and advertisers. They create professional and dynamic pages for us using
intelligent and smart practices.
They also double up as a digital marketing agency that serves leading brands,
corporate clients, as well as other players. Their cost-effective and customized web
development, and online media solutions are tailor-made to suit our specific needs and
requirements. TCS-iON offers us cutting edge services for website designing,
development and internet marketing. Their aim is to convert our Creating Global
Profeesionate.

Get Quality and Economic Web Services

TCS-iON is a web design and development company based in India .A fully
integrated ITEs firm, we provide world-class web design services to their global
clientele spread across 7 continents and major countries including USA, UK,
Australia, and several throughout Asia and Europe .
TCS-iON provides a wide range of highly cost-effective and customized web services
to companies in varied industries such as entertainment, fashion, music, finance,
environment, business, commerce, IT and telecommunications, travel and tourism,
hospitality, education, etc. Their affordable web services are ideal for small, medium
and large scaled private and corporate organizations and also start-up businesses and
aspiring entrepreneurs

TCS-iON is One-stop Shop for Comprehensive Web Services!

Their comprehensive list of web design and development services includes graphics
design, corporate identity design and custom logo design services, custom web
programming, blog customization and e-commerce solutions, Flash designs, search
engine optimization services and much more.

Website Design Services:

At TCS iON India, creative talent meets technical expertise to produce smart and effective
designs with high appeal and usability value. They understand your need to be different from
regular selling or informative sites, increase visitor inflow and decrease bounce rates. Their
professional web designers employ fresh innovative ideas and advanced designing tools to
produce optimized and profit generative websites for you.

Their website design services are focused on producing uniquely appealing and resultoriented websites for our specialized business. Leverage our quality web design services
for dynamic and flexible websites and enjoy maximum benefit.

IT - as - a Service:
The IT-as-a Service business model of iON a cloud based ERP solution was conceptualized
by TCS through close interactions with Small and Medium Businesses (SMB) across relevant
stakeholders, developing a deep understanding of their ICT consumption pattern and business

challenges. An innovative service model, iON uses emerging technologies like cloud
computing and virtualization to create a holistic, fit-for-purpose solution stack for SMBs
integrating hardware, network, software and services. And all of this is backed by business,
technical and consulting services by iON. The iON Cloud ERP Solution is highly modular,
scalable and configurable giving SMBs the benefits of increased efficiencies; faster go to
market, predictability of technology as well as spend, IT talent on call and better business
results.

You gain from:

Integrated solutions:
We as a Cloud ERP Solution for SMBs offer single- window IT with a pre-integrated suite of
hardware, network, software and services. We ensure that your functions are digitized,
automated and connected. For example, if you are using a CRM solution along with a core
ERP (e.g a Manufacturing ERP) and have a document management system to organize
supporting files and an HRMS, we ensure that these solutions are connected and work as one.
So for you, it is simply one IT and not multiple applications. Integrated applications thus
provide a comprehensive view of business enabling better decisions.
Increased agility:
We bring in the agility to keep pace with changing processes or a new line of business. We
help you configure the processes to work as you currently do or the software recommends
and allows you to choose industry best practices based on your business parameters. iON
gives you increased convenience allowing you to perform various tasks from your mobile
device, no matter where you are. Being automatically compliant with statutory requirements,
the solution ensures your company is always audit ready and legally compliant.
A pay-as-you-use model:
Our model eliminates capital investment up front as we facilitate procurement of the IT
infrastructure and software on rent for the duration of the contract. Additionally, you only pay
for the number of users who actually use the software. Thus, you pay as you use on a monthly
basis which includes maintenance and training. Typically, with the iON Cloud ERP the ROI
exceeds rental within three months, when best practices are well followed.

Personalized solution:
Although iON is a cloud service for small and medium businesses, the software is
configurable to each business. You will always get the flavor of your business by picking and
choosing what processes you would need. Furthermore, the multilingual capability of the
software allows you to customize the solution label names to read in vernacular languages
(like Hindi, Marathi, Tamil etc) enabling users to learn and operate the solution with ease.
Automatic upgrades:
We continuously invest in our cloud based ERP solutions to incorporate best practices. The
software is constantly enriched based on user feedback and industry and statutory changes.
You will get the upgrades without disrupting your business operations or any additional cost.
Being in perpetual beta ensures that there is no technology obsolescence.
Enhanced Business Continuity
Our solution offers optimal performance in normal broadband connectivity along with a
stringent security mechanism to ensure your data privacy is maintained. The capacity of the
iON Cloud ERP solution grows with your increasing computing needs and reduces the need
for IT staff. The solution is resilient to failures as the service works from back-up data centers
in the event of a disaster, ensuring continuity of business operations.

PARTNER:
iON Partners play a key role in helping organisations of all sizes transform their businesses.
We help customers buy and implement solution that best fit their unique needs. iON Partners
also provide continuous support to customers after the implementation of the solution.
iON Sales and Implementation Partners
iON Sales and Implementation Partners (SIPs) are specially trained to help customers choose
and implement the best solution from a range of iON Education solution. SIPs have years of
expertise in the educational technology domain, and are well acquainted with the delivery
model of our solutions.
iON Channel Sales Partners

iON Channel Sales Partners have in-depth understanding of the education segment. The
Channel Sales Partners help customers across different education segments implement the
most appropriate iON solution.
A Manufacturing nervous system
Recording orders, sales and purchases would have little meaning unless they were connected.
At the heart of our manufacturing solution lies a production system that ensures that these are
in sync. You procure as much as you produce; and produce as much as you are able to sell.
The goal is as simple as keeping the lowest inventory.
At iON, we tend to make the complex manufacturing process look simple by connecting the
different parts of the operations. The software is organized into planning and execution.
Production plan for instance, would tell your operations to expect the right amount of sales,
and then initiate the right quantity of procurement. But what happens when the execution
slips from what is planned? Vigilant reports and dashboards would alert you in time.

Solution Stack:

Power your workforce performance:

Across industries, organizations are looking at new ways to manage their workforce and
measure performance through HR analytics, performance management systems, and social
media.
The iON Human Capital Management (HCM) Solution is an integrated solution that helps
you effectively manage your employees and increase productivity across your workforce. You
can align employee goals with business objectives, cultivate employee skills, measure and
reward performance. iON HCM is a complete Enterprise Resource Planning (ERP) solution
that automates your human resource management and payroll processes with on-demand
Business Intelligence (BI) reporting capabilities and dashboards to help make quick decisions
while maintaining statutory complianc iON Human Resources Management Solution
(HRMS) manages your recruitment and performance evaluation processes, while also
managing

employee

records

and

validating

their

financial

detailsiON

Payroll

Solution manages every stage of the payroll process, ensuring effective, accurate payroll
cycles and helps in faster decision making with on-demand business intelligence (BI)
reporting capabilities In addition, iON HCM has additional solution and services to further

enhance the productivity and learning environment in your organization iON Human Capital
Management (HCM) is delivered as a:
Managed Service: Manages the process end-to-end with the service delivered as an output.
Implementation Service: Delivers a completely configured system ready for end users to
transact and extract output on a day-to-day basis.

TCS in education:
Campus System:
iON Campus Management System comprises a suite of offerings, catering to seasonal
academic events, mapped to specific departments of an institution. Our solution facilitates the
entire student lifecycle management from enquiry to alumni. Offerings are integrated, yet
modular in nature, which can help automate certain functions within the institution depending
on preference and suitability. With Pre-built business processes and easy-to-configure
solution capabilities, institutions can start using the system with minimal implementation
time and effort. To make the delivery process smooth and effective for the end users, some of
the modules are available in a Managed Services model as well.
Assessment Management:

iON Assessment Management solution provides end-to-end services to configure and

schedule examinations starting from creating online and offline assessments to configuring
attendance, hall tickets, creating drives, as well as assigning a test center and exam shift to
candidates. The solution also manages the distribution of question papers, the Evaluation
process, in addition to Results Management and providing Support Service.
Digital evaluation:
iON Digital Evaluation solution enables evaluation of physical answer scripts made available
in electronic form. All the pages of the answer script and respective tabulated reports can be
accessed by the Evaluator, Supervisor and select members of the Institution. The solution
combines ease of manual evaluation coupled with flexibility, accuracy and efficacy of a
computer.
The manual evaluation method is transformed into a digital process starting with electronic
scanning of answer scripts, where student details are masked with fictitious code, questions
and relevant marking scheme is uploaded into the solution, evaluators assigned with
individual ID and password, supervisor reviews or re-assigns evaluated scripts in case of
discrepancies and finally the overall status of answer scripts evaluated, reviewed and pending
are known through the detailed Reports functionality. Thus, iON Digital Evaluation solution
from TCS addresses the major issues of the current evaluation process like missing answer
scripts in transit, human error in evaluation, tabulation and award lists and most importantly
struggling to announce results on time.
Demat Service:
iONDemat Services helps universities in leveraging IT to manage the entire lifecycle of
issuing certificates; starting from student record collection up to printing of certificates, along
with digital verification in a secured, organized, and cost-effective manner.
For student records that were maintained in physical registers before digitization, the services
include scanning and digitizing of the records along with secured storage and retrieval ondemand. The solution makes use of digital encryption technologies for providing the highest
degree of Data Security and Integrity along with increased speed of certificate issuance and
digital verification.
Communicator:

iON Communicator is the ultimate communication tool for Schools. Enabling the school
administration and teachers to connect with parents and students in real-time, from anywhere,
iON Communicator lets you communicate almost anything - news, alerts, calendar events,
photographs, activities or homework, from one, easy-to-use system. Giving you the flexibility
to communicate the way you want, it also includes a user-friendly smartphone app to access
all the communications. Be assured, that parents will never miss a communication, anymore.
Exam management:
TCS iON Exam Management Solution digitizes and automates University and Boards
Examination processes end-to-end, providing uncompromised 'Secrecy' in Examination
Question Paper creation and its distribution to various examination centers with significant
reduction in administrative and logistical overheads and costs. Increasing automation at every
step like enrolling students for each examination, scheduling of exams, exam centre
management, allocating students to exam centers, assigning subjects to faculties for question
paper creation, alerts and notifications to various stakeholders significantly reduces manual
effort, schedule compliance failures and unforeseen errors.
Course management:
iON In-Course Assessment is designed to enable Institutions delivering Professional higher
education an opportunity to leverage Computer Based Testing to empower their teaching staff
and enhance the value delivered to students. iON In-Course Assessment allows for secure and
collaborative content development and vetting by faculty, seamless delivery of tests and
capturing of student responses and generation of multiple meaningful stakeholder specific
reports on student performance data.
Leading Exchange:
iON Learning Exchange is a collaborative Learning Platform designed to provide an
incremental and interactive learning environment to enable an Institute increase participant
learning outcomes. Powered by best-in-class Learning Management System (LMS), the
learning spaces are enriched with a suite of collaboration tools helping learners to learn from
one another in a community structure.
Empower Learning:

iON Learning Exchange empowers teachers with tools to personalize learning for every
learner. A teacher can design & host course catalogues, enlist students into learner
communities and deliver incremental learning material in an immersive way using video,
audio, power point presentations and a variety of SCORM Compliant learning aids. External
links to world-class learning material in the world wide web of learning enables the learner to
dip into best resources on a subject or topic. Teacher can co-share delivery responsibilities
with Industry professionals or subject experts to provide relevancy to curriculum and meet
Industry employability expectations.
Personalized Feedback:
The power to conduct assessments after every learning module and provide personalised
feedback in an on-going manner helps learners to be ahead on the learning curve.
Personalized mentoring can be provided to each learner using Taxonomy and LOD tagging of
assessments linked to feedback and "incremental assist publishing". Results and Analytics of
learner groups help teachers to undertake remedial interventions for bringing parity in
learning.
Peer learning:
Learning outcomes can be paced faster by enabling room for peer learning. iON Learning
Exchange is designed for community based learning where learners share their expertise and
concerns using a suite of collaboration tools including Forums, Blog, Debate, Surveys,
Questions, Wiki and more. Peer to peer benchmarking and peer speak provide the necessary
impetus for pacing each other for better outcomes.
Content Management System:
Create Courses for various topics and subjects engaging members of the Institution in a
collaborative learning environment. Populate course content in multiple modes (SCORM
Compliant) and co-create content repository, co-deliver curriculum, collaborate with industry
and experts across geographies to bring best of class value delivery to your class rooms.
Testing Engine:
Effectively create, schedule and track Assessments & Assignments, with multiple modes of
response submission (online/offline/both). Create Question Bank with numerous Question
types (Multiple choice multiple answer, Multiple choice single answer, Fill in the blank,

True/False, Reading comprehension) and enrich the tests by tagging them to Syllabus,
Difficulty Level and Blooms Taxonomy parameters. Create Question Papers based on Rule
Engine, which fetches Questions based on Question Types, Syllabus, Difficulty Level and
Blooms Taxonomy Parameters.
Analytics Engine:
Analyze the assessment results on various parameters and provide dashboard for providing
right learning interventions to the participants of the Course to improve performance, hence
closing the learning-loop of 'Learn-Assess-Improve'.
Communication tools:
Leverage Communication features (Banner/ Multiple In-Focus & Notice-board items/
Notifications via Email/SMS) to engage and inform members. All this with the flexibility to
communicate with an individual or with all the members of a Community on general
broadcasts.

About Us

WEB PROGRAMMING
Every online business is different from other, even similar niche website. TCS-iON
India understands and respect individual clients needs and provide custom web
programming services to serve unique web requirements. Their team of qualified
professionals uses strategic planning and smart development process with quick
operationally efficient and productive website. Their aim is to provide smart and
practical solutions from their website. TCS-iON Indias custom website programming
services cause dramatic and measureable growth in their website.

FLASH DESIGN
Creative heads at TCS-iON India exploit Flashs vector technology to produce,

beautiful and eye-catching designs for you. From Flash intros, banners logos and
advertisements to full-blown Flash websites, they give our website the interactive
zing it desires. Their creative Flash design services help transform our website into an
effective communication interface.

LOGO DESIGN

TCS-iON India's logos are designed to successfully introduce your company to its
consumers and competitors. Their logos are stylish and aesthetic bearing superb
color scheme and graphical detailing that create long-lasting impressions. Their logo
design services give brand a simple, creative, and appealing quality capable of
significant impact on viewers. They guarantee quality logo design at minimal rates

only

at

TCS-iON

India.

LOGO DESIGNS
Branding that delivers your message.
The quickest way to increase the value of the companys brand is with a well-integrated
design theme that is consistent across the web as well as on paper. A great logo is the
keystone of this theme and will attract the attention you want and deliver the sales that
company needs.
Their logos dont just create an identity; they create a connection with the audience they
speak to and differentiate the product or service being offered. Their logo and branding
should allow their customer to see you as providing a distinct solution to their unique
problem. A logo speaks volumes about what the company does, what its values are and what
it can achieve. They make sure the logo has as much personality as you do.
Logos that are designed by TCS-iON are as follows in march 2016 :-

SERVICES OF COMPANY
HTML5 & CSS3
At ION they offer PSD to CSS3 / JS / HTML5 services for their custom web design needs.
We will help us in getting the best web site design coded in HTML5 which is rich in
structural functionality and in CSS3 to enhance the presentation of your websites content.
Also HTML5/CSS3 expert takes into account pages loading time, SEO and web browsers
compatibility

CMS
Their Content Management Systems (CMS) service revolutionizes the manner in which we
manage our online information and content from web copy, published articles, press
releases, audio/video files, marketing brochures and other sales related assets. These
applications will help us enterprise store, maintain version control, publish content on the
web and manage documents or digital assets.

Ecommerce Website Development

Ecommerce is a type of business that continues to grow every day. As more people get
comfortable with the Internet, more people are willing to make purchases and do business in
this convenient way. Therefore, ecommerce website design and development is increasingly

important for any business looking to be successful on the Internet. Let SuffesCom be our
ecommerce solution provider and they will be sure to have thousands of satisfied customers.

The focus for an ecommerce business will be a website incorporating product information
and the ability to purchase or make orders online. At Suffes.Com they use the latest database
technology to create ecommerce solutions for our new or existing business.

SEO
Search Engine Optimization (SEO) is a technical cum marketing technique with which
SuffesCom assists its clients to realize their dream of making their websites rank high in web
searches. Search Engine Optimization is a process through which websites are honed in order
to make them visible to online searchers. Its worth pointing out that SEO is not a magic
bullet that will necessarily drive traffic and sales through the roof. SEO makes the website
stand out
from the crowd, especially if your industry is highly competitive or if you want to attract a
captive audience for a popular keyword or keywords.

Our process involves the following crucial steps:

Research
Their research team makes a research using various secondary research tools to better
understand the requirements of the client. They prefer to seek assistance from the client by
asking them various questions related to their Business (read website), Target Audience,
Strategic Keywords, etc. and then they formulate the clear and measurable objective for the
projects.

Analyze
After research they analyze the market potential and the present competition. They analyze
the market potential to ensure that the website is optimized in compliance with search engine
guidelines and they study the competition to identify the potential gap which needs to be
addressed by you.

STRONG RELATIONSHIPS BETWEEN CLIENTS

One of their biggest priorities of all is close collaboration with their clients. Whatever the size
of our company or, indeed, your proposed project, they take steps here at TCS - iON to
ensure that your project is carefully tracked and monitored, from the initial user analysis to
the final stage of usability testing.
This is certainly a thoroughness of approach that has been appreciated by our clients down
the years, who have included business owners, consultants and team leaders alike. It gives
you all the more reason to contact TCS iONwhen your firm next requires a high quality
software solution that brings with it a significant ROI.

Why Choose TCS- iON?

iON is the company which gives the guarantee that we can help your business or organization
to be the best by improving your profitability and efficiency.
They understand that you could be concerned about why you should utilize our services for
your requirements. It is but natural that you logically put these questions to yourself. In an era
where there are many others out there offering similar services claiming similar advantages, it
is worth considering the following points. At SuffesCom we thoroughly undertake the
following globally acknowledged advanced practices.
Latest technologies
They deploy the latest technologies to meet your unmatched IT requirements.
Excellent support
They offer the most excellent support and dedicated service by a full fledged web experts
team.
Best talent
They hire only the best talent available in the market and ensure that we utilize the cutting
edge top range methodologies and techniques to develop and execute your projects.
Productive work environment
They share a healthy work environment where our employees continually learn and mature as
a habitual practice.
Strict adherence to quality
Not only do we strictly adhere to the highest international level quality standards, but they
regularly communicate with our clients and keep them aware of the latest developments.
Satisfied Clientele
Needless to say, they have been able to develop a large list of satisfied clients in countries
around the globe. They are really proud to say that all this is due to our honest and equilateral
commitment in understanding the needs of our clients and providing them with precise
solutions in accordance with their individual requirements.

WHAT CLIENTS SAYS

Scott Adams
Remind people that profit is the difference between revenue and expense. This makes you
look smart and also significantly increases your chances.

Tasia
Amrinder worked diligently until he produced something I was happy with. We
communicated over Skype as often as needed and sometimes hed work afterhours to get the
revisions done before he went home for the day. Hes very patient and that makes life easy
when youre trying to produce something wonderful.

Brandon Doe
Engineers like to solve problems. If there are no problems handily available, they will create
their own problems. That is a very known fact there.

THEIR SERVICES
Their e-commerce solutions are the best blend of:

Website Development
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alteration in some format, by injected humour.

Website Designing
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alteration in some format, by injected humor.

Internet Marketing
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alteration in some format, by injected humor.

Website Maintenance:

Let Your Website Speak For You... Manage It Like Your SALESMAN..!!
They offer you fast and efficient website maintenance services. They will update, enhance,
backup and repair our site quickly and efficiently, while you can go on running your
business. They will maintain the quality of our website, keeping it fresh for our return
clients. If you need to add more images, new banners, new calendar events, change the
content of the site, backup
any important data, add new plug-in and functionality, let us do it for you .Their website
maintenance services are professional and affordable with quick turnaround and delivery times.
They always have custom solutions to website functionality problems at an affordable cost. They

offer professional help with any bugs or misfortunes which may happen to your site. Their
site monitoring is effective and professional. As soon as they receive maintenance requests,
the sites get updated or fixed right away. All the website development and maintenance is
being performed in a secure way, with non-disclosure of the passwords or any site
information.

Some other Services they offer:

a)
b)
c)
d)
e)
f)

Phone Business Application Development

iPhone Multimedia Application Development
iPhone Internet Apps Development
iPhone GPS Based Application Development
iPhone Entertainment Application Development
iPhone Gaming Application Development.

INTRODUCTION

WORKING CAPITAL
Working Capital is the Life-Blood and Controlling Nerve Center of a
business
No one can start business or run an enterprise without adequate funds. Every business
requires money to start and to carry out its day-to-day operations as requirement of amount of
capital depends on size and nature of business. To fulfil day to day requirement such as

purchase of current assets or maeketable securities which can be easily converted into cash,
purchase of raw material, payment of wages and other routine expenses, an enterprenuer has
required working capital. Those finance which are needed in short term to carry on operating
and short term activities is known as Working Capital, while long term finance which is
required to establish business through purchase of fixed assets such as Plant & Machinery,
Land and Building, etc,. is called Fixed Capital.
Working capital is the difference between resources in cash or readily convertible into cash
(current assets) and Current Liabilities. Generally the enterprise which has higher amounts of
working capital is better positioned for success. The company needs an adequate working
capital requirement, the minimum amount of resources that require to effectively covering the
cost and expenses necessary to operate the business. There should be match between assets
and liabilities of the company. If a company has more debts than current assets, then working
capital would be expressed in negative number, where as if assets are more than liabilities, a
company has positive working capital.
All such match will be possible when there should be a proper transformation of sources from
one to other referred to as Circulating Assets because of their cyclical nature. Management
of working capital is much important because shortage as well as excess of it may cause the
biggest failure of business in recent times. Meanwhile, the relationship between firms short
term assets and liabilities is considered to be working capital management.
The rationale behind this project study of Working Captal Management is to determine the
amount of working capital requirement on the basis of variouis financial ratios which help a
business man to take adequate decision through proper planning and control over business
activities. The project also depends on study of changes in the uses and sources of working
capital to understand that how a manager can increase the efficiency of business in
management of working capital.
For a manager it is very important to fixan adequate amount of working capital as of
circulating assets which revolves as fast as per their cyclical nature. For illustration, in a
business enterprise, initially cash employed to purchase inventory, which might be in cash or
on credit. If the inventory sold on credit, it turned into receivables, debtors. And once the
receviables are collected, they become cash and further reinvested for purchase of additional
inventory or as part of retained earning.

The adequate working capital requirement is the minimum amount of resources requires to
effectively cover costs and expenses necessary to operate the business and management of it
is needed to determine proper financial structure, taking adequate decision on its requirement
of working capital, source of finance from where funds to procure, components and factors of
affecting it which require for prompt payment, regular supply of raw material. It must ensure
that there has sufficient working capital that would bear all the cash flow problems such as
delay in payment to suppliers which eliminate the claim of discounts for prompt payment. In
recent times, to run a business is most crucial task for an entrepreneur because it is not
sufficient to have money in hand of businessman, but proper management of cash-flows and
returns which help to determine an optimum balance of it is needed which allows the
business to meet day to day expense. There should be an optimum balance of cash in firm to
maintain a sound liquidity position to settle dues in time fulfill transactional activities and
reduce opportunity cost.
So, this project concentrates on working capital, its factors, way to manage it adequately, and
its linked components which help a businessman to air business functioning properly with
maximum return at right time with right opportunity. It helps a manager to know what is the
reason to maintain adequate working capital requirements, how it should be done in form of
cash, receivables and inventory and also determine the impact of it.

WHAT IS WORKING CAPITAL?

Working capital refers to the investment by the company in short terms assets such as cash,
marketable securities. Net current assets or net working capital refers to the current assets less
current liabilities.
Symbolically, it means,
Net Current Assets = Current Assets-Current Liabilities.

In accounting, Working capital is the difference between the inflow and outflow of funds. In
other words, it is the net cash inflow. It is defined as the excess of current assets over current
liabilities and provisions. In other words, it is net current assets or net working capital.

Working capital represents the total of all current assets. In other words it is the Gross
working capital, it is also known as Circulating capital or Current capital for current assets
are rotating in their nature.
A study of working capital is of major importance to internal and external analysis because of
its close relationship with the day-to-day operations of a business. Working Capital is the
portion of the assets of a business which are used on or related to current operations, and
represented at any one time by the operating cycle of such items as against receivables,
inventories of raw materials, stores, work in process and finished goods, merchandise, notes
or bill receivables and cash.
Working capital comprises current assets which are distinct from other assets. In the first
instance, current assets consist of these assets which are of short duration.
Working capital may be regarded as the life blood of a business. Its effective provision can do
much to ensure the success of a business while its inefficient management can lead not only
to loss of profits but also to the ultimate downfall of what otherwise might be considered as a
promising concern.

The funds required and acquired by a business may be invested to two types of
assets:
1.Fixed Assets.
2. Current Assets

Fixed assets are those which yield the returns in the due course of time. The various
decisions like in which fixed assets funds should be invested and how much should be
invested in the fixed assets etc. are in the form of capital budgeting decisions. This can be
said to be fixed capital management.

Current Assets are required to ensure smooth and fluent business operations and can be
said to be life blood of the business. There are two concepts of working capital Gross and
Net. Gross working capital refers to gross current assets. Net working capital refers to the
difference between current assets and current liabilities. The term current assets refers to
those assets held by the business which can be converted into cash within a short period of

time of say one year, without reduction in value. The main types of current assets are stock,
receivables and cash. The term current liabilities refer to those liabilities, which are to be paid
off during the course of business, within a short period of time say one year. They are
expected to be paid out of current assets or earnings of the business. The current liabilities
mainly consist of sundry creditors, bill payable, bank overdraft or cash credit, outstanding
expenses etc.

LIQUIDITY Vs PROFITABILITY: RISK-RETURN TRADE OFF

Another important aspect of a working capital policy is to maintain and provide sufficient
liquidity to the firm. Like the most corporate financial decisions, the decision on how much
working capital be maintained involves a trade off- having a large net working capital may
reduce the liquidity risk faced by a firm, but it can have a negative effect on the cash flows.
Therefore, the net effect on the value of the firm should be used to determine the optimal
amount of working capital. Sound working capital involves two fundamental decisions for
the firm.

They are the determination of:

The optimal level of investments in current assets.

The appropriate mix of short-term and long-term financing used to support this
investment in current assets, a firm should decide whether or not it should use shortterm financing. If short-term financing has to be used, the firm must determine its
portion in total financing. Short-term financing may be preferred over long-term
financing for two reasons:

The cost advantage

Flexibility

CLASSIFICATION OF WORKING CAPITAL

Working capital may be classified in to ways:

On the basis of concept.

On the basis of time.

On the basis of concept working capital can be classified as gross working capital and net
working capital. On the basis of time, working capital may be classified as:

Permanent or fixed working capital.

Temporary or variable working capital

PERMANENT OR FIXED WORKING CAPITAL:

Permanent or fixed working capital is minimum amount which is required to ensure effective
utilization of fixed facilities and for maintaining the circulation of current assets. Every firm
has to maintain a minimum level of raw material, work- in-process, finished goods and cash
balance. This minimum level of current assets is called permanent or fixed working capital as

this part of working is permanently blocked in current assets. As the business grow the
requirements of working capital also increases due to increase in current assets.
TEMPORARY OR VARIABLE WORKING CAPITAL:

Temporary or variable working capital is the amount of working capital which is required to
meet the seasonal demands and some special exigencies. Variable working capital can further
be classified as seasonal working capital and special working capital. The capital required to
meet the seasonal need of the enterprise is called seasonal working capital. Special working
capital is that part of working capital which is required to meet special exigencies such as
launching of extensive marketing for conducting research, etc.

WORKING CAPITAL COMPONENTS

Cash and equivalents: - This most liquid form of working capital requires constant
supervision. A good cash budgeting and forecasting system provides answers to key
questions such as: is the cash level adequate to meet current expenses as they come
due? What is the timing relationship between cash inflow and outflow? When will
peak cash needs occur? When and how much bank borrowing will be needed to meet
any cash shortfalls? When will repayment be expected and will the cash flow cover it?

Accounts receivable: - Many businesses extend credit to their customers. If they do,
is the amount of accounts receivable reasonable relative to sales? How rapidly are
receivables being collected? Which customers are slow to pay and what should be
done about them?

Inventory: - Inventory is often as much as 50 percent of a firms current assets, so

naturally it requires continual scrutiny. Is the inventory level reasonable compared
with sales and the nature of your business? Whats the rate of inventory turnover
compared with other companies in your type of business?

Accounts payable: - Financing by suppliers is common in small business; it is one of

the major sources of funds for entrepreneurs. Is the amount of money owed to
suppliers reasonable relative to what you purchase? What is your firms payment
policy doing to enhance or detract form your credit rating?

Accrued expenses and taxes payable: - These are obligations of your company at
any given time and represent a future outflow of cash.

NEED FOR WORKING CAPITAL

Working capital may be regarded as the lifeblood of the business. Without insufficient
working capital, any business organization cannot run smoothly or successfully. In the
business the Working capital is comparable to the blood of the human body. Therefore the
study of working capital is of major importance to the internal and external analysis because
of its close relationship with the current day to day operations of a business. The inadequacy
or mismanagement of working capital is the leading cause of business failures.
The need of gross working capital or current assets cannot be overemphasized. The object of
any business is to earn profits. The main factor affecting the profits is the magnitude of sales
of the business. But the sales cannot be converted into cash immediately. There is a time lag
between the sale of goods and realization of cash. There is a need of working capital in the
form of current assets to fill up this time lag. Technically, this is called as operating cycle or
working capital cycle, which is the heart of need for working capital. This working capital
cycle can be described in the following words. If the company has a certain amount of cash, it
will be required for purchasing the raw material though some raw material may be available
on credit basis. Then the company has to spend some amount for labour and factory
overheads to convert the raw material in work in progress, and ultimately finished goods.
These finished goods when sold on credit basis get converted in the form of sundry debtors.
Sundry debtors are converted in cash only after the expiry of credit period. Thus, there is a
cycle in which the originally available cash is converted in the form of cash again but only
after following the stages of raw material, work in progress, finished goods and sundry
debtors. Thus, there is a time gap for the original cash to get converted in form of cash again.
Working Capital needs of company arise to cover the requirement of funds during this time
gap, and the quantum of working capital needs varies as per the length of this time gap.

Thus, some amount of funds is blocked in raw materials, work in progress, finished goods,
sundry debtors and day-to-day requirements. However some part of these current assets may
be financed by the current liabilities also. E.g. some raw material may be available on credit
basis, all the expenses need not be paid immediately, workers are also to be paid periodically
etc. But still the amounts required to be invested in these current assets is always higher than
the funds available from current liabilities. This is precise reason why the needs for working
capital arise.
From the Financial management point of view, the nature of fixed assets and current assets
differ from each other-1. The fixed assets are required to be retained in the business over a period of time and they
yield the returns over their life, whereas the current assets loose their identity over a short
period of time, say one year.
2. In the case of current assets, it is always necessary to strike a proper balance between the
liquidity and profitability principles, which is not the case with fixed assets. E.g. If the size of
current assets is large, it is always beneficial from the liquidity point of view as it ensures
smooth and fluent business operations. Sufficient raw material is always available to cater to
the production needs, sufficient finished goods are available to cater to any kind of demand of
customers, liberal credit period can be offered to the customers to improve the sales and
sufficient cash is available to pay off the creditors and so on.
However, if the investment in current assets is more than what is ideally required, it affects
the profitability, as it may not be able to yield sufficient rate of return on investment. On the
other hand, if the size of current assets is too small, it always involves the risk of frequent
stock out, inability of the company to pay its dues in time etc. As such, the investment in
current assets should be optimum. Hence, it is necessary to manage the individual
components of current assets in a proper way. Thus, working capital management refers to
proper administration of all aspects of current assets and current liabilities. Working Capital
Management is concerned with the problems arising out of the attempts to manage current
assets, current liabilities and inter-relationship between them. The intention is not to
maximize the investment in working capital nor is it to minimize the same. The intention is to
have optimum investment in working capital. In other words, it can be said that the aim of
working capital management is to have minimum investment in working capital without

affecting the regular and smooth flow of operations. The level of current assets to be
maintained should be sufficient enough to cover its current liabilities with a reasonable
margin of safety.

WORKING CAPITAL CYCLE

Working capital cycle indicates the length of time between a firms paying for materials
entering into stock and receiving the cash from sale of finished goods. In a manufacturing
firm, the duration of time required to complete the sequence of events is called operating
cycle.

In case of a manufacturing company, the operating cycle is the length of time necessary to
complete the following cycle of events

Conversion of cash into raw materials

Conversion of raw materials into work-in-progress

Conversion of work-in-progress into finished goods

Conversion of finished goods into accounts receivables

Conversion of accounts receivable into cash

The above operating cycle is repeated again and again over the period depending upon the
nature of the business and type of product etc. the duration of the operating cycle for the
purpose of estimating working capital is equal to the sum of duration allowed by the
suppliers.
Working capital cycle can be expressed as
R+W+F+D+C
Where,
R - raw material storage period = avg. stock of raw material / avg. cost of production per day
W work in progress holding period = avg. work in progress inventory / avg. cost of
production per day
F finished goods storage period = avg. stock of finished goods / avg. cost of goods sold per
day
D debtors collection period = avg. book debts / avg. credit sales per day
C credit period availed = avg. trade

WORKING CAPITAL MANAGEMENT

To start any business, First of all we need finance and the success of that business entirely
depends on the proper management of day-to-day finance and the management of this short
term capital or finance of the business is called Working Capital Management.
Working Capital is the key difference between the long term financial management and short
term financial management in terms of the timing of cash. Working capital management is a
short term financial management. Working capital management is concerned with the
problems that arise in attempting to manage the current assets, the current liabilities & the
inter relationship that exists between them. The current assets refer to those assets which can
be easily converted into cash in ordinary course of business, without disrupting the operations
of the firm.

Working capital management or short-term financial management is a significant facet

of financial management. It is important due to 2 reasons:

Investment in current assets represents a substantial portion of total investment

Investment in current assets and the level of current liabilities have to be geared
quickly to changes in sales.

Working capital involves activities such as arranging short-term finance, negotiating

favorable credit terms, controlling the movement of cash, administrating accounts
receivables, and monitoring the investment in inventories also take a great deal of time.
Management of working capital is concerned with the problem that arises in attempting to
manage the current assets, current liabilities. The basic goal of working capital management
is to manage the current assets and current liabilities of a firm in such a way that a
satisfactory level of working capital is maintained, i.e. it is neither adequate nor excessive as
both the situations are bad for any firm. There should be no shortage of funds and also no
working capital should be ideal. WORKING CAPITAL MANAGEMENT POLICES of a
firm has a great on its probability, liquidity and structural health of the organization. So
working capital management is three dimensional in nature as

1.

It concerned with the formulation of policies with regard to profitability, liquidity

and risk.

2.

It is concerned with the decision about the composition and level of current
assets.

3.

It is concerned with the decision about the composition and level of current
liabilities.

SIGNIFICANCE OF WORKING CAPITAL MANAGEMENT

The management of working capital is important for several reasons:

For one thing, the current assets of a typical manufacturing firm account for halfof its
total assets. For a distribution company, they account for even more.

Working capital requires continuous day to day supervision. Working capital hasthe
effect on company's risk, return and share prices.

There is an inevitable relationship between sales growth and the level of current
assets.

The target sales level can be achieved only if supported by adequateworking capital
Inefficient working capital management may lead to insolvency

IMPORTANCE
CAPITAL

OR

ADVANTAGE

OF

ADEQUATE

WORKING

 Solvency of the business: Adequate working capital helps in maintaining the solvency
of the business by providing uninterrupted of production.
Goodwill: Sufficient amount of working capital enables a firm to make prompt
payments and makes and maintain the goodwill.
Easy loans: Adequate working capital leads to high solvency and credit standing can
arrange loans from banks and other on easy and favorable terms.
Cash Discounts: Adequate working capital also enables a concern to avail cash
discounts on the purchases and hence reduces cost.
Regular Supply of Raw Material: Sufficient working capital ensures regular supply
of raw material and continuous production.
Regular Payment Of Salaries, Wages And Other Day TO Day Commitments: It
leads to the satisfaction of the employees and raises the morale of its employees,
increases their efficiency, reduces wastage and costs and enhances production and
profits.
Exploitation of Favorable Market Conditions: If a firm is having adequate working
capital then it can exploit the favorable market conditions such as purchasing its
requirements in bulk when the prices are lower and holdings its inventories for higher
prices.
Ability to Face Crises: A concern can face the situation during the depression.
Quick And Regular Return On Investments: Sufficient working capital enables a
concern to pay quick and regular of dividends to its investors and gains confidence of
the investors and can raise more funds in future.
High Morale: Adequate working capital brings an environment of securities,
confidence, high morale which results in overall efficiency in a business.

EXCESS OR INADEQUATE WORKING CAPITAL

Every business concern should have adequate amount of working capital to run its business
operations. It should have neither redundant or excess working capital nor inadequate nor
shortages of working capital. Both excess as well as short working capital positions are bad

for any business. However, it is the inadequate working capital which is more dangerous
from the point of view of the firm.

DISADVANTAGES OF INADEQUATE WORKING CAPITAL

Every business needs some amounts of working capital. The need for working capital arises
due to the time gap between production and realization of cash from sales. There is an
operating cycle involved in sales and realization of cash. There are time gaps in purchase of
raw material and production; production and sales; and realization of cash.
Thus working capital is needed for the following purposes:

For the purpose of raw material, components and spares.

To pay wages and salaries

To incur day-to-day expenses and overload costs such as office expenses.

To meet the selling costs as packing, advertising, etc.

To provide credit facilities to the customer.

To maintain the inventories of the raw material, work-in-progress, stores and spares
and finished stock.

For studying the need of working capital in a business, one has to study the business under
varying circumstances such as a new concern requires a lot of funds to meet its initial
requirements such as promotion and formation etc. These expenses are called preliminary
expenses and are capitalized. The amount needed for working capital depends upon the size
of the company and ambitions of its promoters. Greater the size of the business unit,
generally larger will be the requirements of the working capital.

FACTORS AFFECTING WORKING CAPITAL MANAGEMENT

The amount of working capital required depends upon a number of factors which can be
stated as below

NATURE OF BUSINESS

Some businesses are such, due to their very nature, that their requirement of fixed capital is
more rather than working capital. These businesses sell services and not the commodities and
not the commodities and that too on cash basis. As such, no funds are blocked in piling
inventories and also no funds are blocked in receivables. E.g. Public utility services like
railways, electricity boards, infrastructure oriented projects etc. Their requirement of working
capital is less. On the other hand, there are some business like trading activity, where the
requirement of fixed capital is less but more money is blocked in inventories and debtors.
Their requirement of the working capital is more.

LENGTH OF PRODUCTION CYCLE

In some business like machine tool industry, the time gap between the acquisitions of raw
material till the end of final production of finished product itself is quite high. As such more
amounts may be blocked either in raw materials, or work in progress or finished goods or
even in debtors. Naturally, their needs of working capital are higher. On the other hand, if the
production cycle is shorter, the requirement of working capital is also less.

SIZE AND GROWTH OF BUSINESS

In very small companies the working capital requirements are quite high overheads, higher
buying and selling costs etc. As such, the medium sized companies positively have an edge
over the small companies. But if the business starts growing after a certain limit, the working
capital requirements may be adversely affected by the increasing size.

BUSINESS/TRADE CYCLE

If the company is operating in the period of boom, the working capital requirements may be
more as the company may like to buy more raw material, may increase the production and
sales to take the benefits of favourable markets, due to the increased sales, there may be more
and more amount of funds blocked in stock and debtors etc. Similarly, in case of depression
also, the working capital requirements may be high as the sales in terms of value and quantity
may be reducing, there may be unnecessary piling up of stocks without getting sold, the
receivables may not be recovered in time etc.

RATE OF STOCK TURNOVER

There is an inverse co-relationship between the question of working capital and the velocity
or speed with which the sales are affected. A firm having a high rate of stock turnover wuill
needs lower amt. of working capital as compared to a firm having a low rate of turnover.

CREDIT POLICY

The firms credit policy directly affects the working capital requirement. If the
firm has liberal credit policy, hence the more credit period will be provided to the debtors so
this will lead to more working capital requirement. With the liberal credit policy
operating cycle length increases and vice versa.

SEASONAL VARIATIONS

In certain industries like raw material is not available throughout the year. They have to buy
raw material in bulk during the season to ensure an uninterrupted flow and process them
during the year. Generally, during the busy season, a firm requires larger working capital than
in slack season.

EARNING CAPICITY AND DIVIDEND POLICY

Some firms have more earning capacity than other due to quality of their products, monopoly
conditions, etc. Such firms may generate cash profits from operations and contribute to their
working capital. The dividend policy also affects the requirement of working capital. A firm
maintaining a steady high rate of cash dividend irrespective of its profits needs working
capital than the firm that retains larger part of its profits and does not pay so high rate of cash
dividend.

PRICE LEVEL CHANGES

Changes in the price level also affect the working capital requirements. Generally rise in
prices leads to increase in working capital.

PRODUCTION POLICY

If the policy is to keep production steady by accumulating inventories it will require higher
working capital.

PLANNING OF WORKING CAPITAL

Working capital is required to run day to day business operations. Firms differ in their
requirement of working capital (WC). Firm s aim is to maximize the wealth of share holders
and to earn sufficient return from its operations. WCM is a significant facet of financial
management. Its importance stems from two reasons:

Investment in current asset represents a substantial portion of total investment.

Investment in current assets and level of current liability has to be geared quickly to
change in sales.

Business undertaking required funds for two purposes:

To create productive capacity through purchase of fixed assets.

To finance current assets required for running of the business.

The importance of WCM is reflected in the fact that financial managers spend a great deal of
time in managing current assets and current liabilities. The extent to which profit can be
earned is dependent upon the magnitude of sales. Sales are necessary for earning profits.
However, sales do not convert into cash instantly; there is invariably a time lag between sale
of goods and the receipt of cash. WC management affect the profitability and liquidity of the
firm which are inversely proportional to each other, hence
proper balance should be maintained between two.
To convert the sale of goods into cash, there is need for WC in the form of current asset to
deal with the problem arising out of immediate realization of cash against good sold.
Sufficient WC is necessary to sustain sales activity. This is referred to as the operating or cash
cycle.

INVENTORY MANAGEMENT
Inventories constitute the most important part of the current assets of large majority
of companies. On an average the inventories are approximately 60% of the current
assets in public limited companies in India. Because of the large size of inventories
maintained by the firms, a considerable amount of funds is committed to them. It is
therefore, imperative to manage the inventories efficiently and effectively in order to
avoid unnecessary investment.

Nature of Inventories
Inventories are stock of the product of the company is manufacturing for sale and
components make up of the product. The various forms of the inventories in the
manufacturing companies are:

 Raw Material: It is the basic input that is converted into the finished
product through the manufacturing process. Raw materials are those units
which have been purchased and stored for future production.

Work-in-progress: Inventories are semi-manufactured products. They

represent product that need more work they become finished products for
sale.

Finished Goods: Inventories are those completely manufactured products

which are ready for sale. Stocks of raw materials and work-in-progress
facilitate production, while stock of finished goods is required for smooth
marketing operations. Thus, inventories serve as a link between the
production and consumption of goods.

Inventory Management Techniques

In managing inventories, the firms objective should be to be in consonance with the
shareholder wealth maximization principle. To achieve this, the firm should determine
the optimum level of inventory. Efficiently controlled inventories make the firm
flexible. Inefficient inventory control results in unbalanced inventory and inflexibilitythe firm may sometimes run out of stock and sometimes pile up unnecessary stocks.

Economic Order Quantity (EOQ): The major problem to be resolved is

how much the inventory should be added when inventory is replenished. If
the firm is buying raw materials, it has to decide lots in which it has to
purchase on replenishment. If the firm is planning a production run, the issue
is how much production to schedule. These problems are called order
quantity problems, and the task of the firm is to determine the optimum or
economic lot size. Determine an optimum level involves two types of costs:-

Ordering Costs: This term is used in case of raw material and

includes all the cost of acquiring raw material. They include the costs
incurred in the following activities:

Requisition

Purchase Ordering

Transporting

Receiving

Inspecting

Storing

Ordering cost increase with the number of orders placed; thus the more
frequently inventory is acquired, the higher the firms ordering costs.
On the other hand, if the firm maintains large inventorys level, there
will be few orders placed and ordering costs will be relatively small.
Thus, ordering costs decrease with the increasing size of inventory.

Carrying Costs: Costs are incurred for maintaining a given level of

inventory are called carrying costs. These include the following
activities:

Warehousing Cost

Handling

Administrative cost

Insurance

Deterioration and obsolescence

Carrying costs are varying with inventory size. This behavior is contrary
to that of ordering costs which decline with increase in inventory size.

The economic size of inventory would thus depend on trade-off

between carrying costs and ordering cost.

ABC System:
ABC system of inventory keeping is followed in the factories. Various items
are categorized into three different levels in the order of their importance. For
e.g. items such as memory, high capacity processors and royalty are placed
in the A category. Large number of firms has to maintain several types of
inventories. It is not desirable the same degree of control all the items. The
firm should pay maximum attention to those items whose value is highest.
The firm should therefore, classify inventories to identify which items should
receive the most effort in controlling. The firm should be selective in approach
to control investment in various types of inventories. This analytical approach
is called ABC Analysis. The high-value items are classified as A items and
would be under tightest control. C items represent relatively least value and
would require simple control. B items fall in between the two categories and
require reasonable attention of management.

CASH MANAGEMENT
Sources of Cash:
Sources of additional working capital include the following:

Existing cash reserves

Profits (when you secure it as cash!)

Payables (credit from suppliers)

New equity or loans from shareholders

Bank overdrafts or lines of credit.

Long-term loans

If you have insufficient working capital and try to increase sales, you can easily
over-stretch the financial resources of the business. This is called overtrading.
Early warning signs include:

Pressure on existing cash

Exceptional cash generating activities e.g. offering high discounts for early
cash payment

Bank overdraft exceeds authorized limit.

Seeking greater overdrafts or lines of credit

Part-paying suppliers or other creditors

Paying bills in cash to secure additional supplies

Management pre-occupation with surviving rather than managing

Frequent short-term emergency requests to the bank (to help pay wages,
pending receipt of a cheque).

CASH MANAGEMENT IN AIRSOFT INFOSYS

Cash Management System involves the following steps:

The branch offices of the company at various locations hold the collection of
cheques of the customers.

Those cheques are either handed over to the CMS agencies or bank of the
particular location take charge of whole collection.

These CMS agencies or bank send those cheques to the clearing house to
make them realized. These cheques can be local or outstation.

The CMS agencies or bank send information to the central hub of the
company regarding realization/cheque bounced.

The central hub passes on the realized funds to the company as per the
agreed agreements.

The CMS agencies or concerned bank provides the necessary MIS to the
company as per requirement.

In cash management the collect float taken for the cheques to be realized into cash
is irrelevant and non-interfering because banks such as Standard Chartered, HDFC
and CitiBank who give credit on the basis of these cheques after charging a very

small amount. These credits are given to immediately and the maximum time taken
might be just a day. The amount they charge is very low and this might cover the
threat of the cheque sent in by two or three customers bouncing. Even otherwise the
time taken for the cheques to be processed is instantaneous. Their Cash
Management System is quite efficient.

RECEIVABLES MANAGEMENT

Cash flow can be significantly enhanced if the amounts owing to a business are
collected faster. Every business needs to know.... who owes them money.... how
much is owed. how long it is owning. For what it is owed.
Late payments erode profits and can lead to bad debts.
Slow payment has a crippling effect on business; in particular on small businesses
whom can least afford it. If you don't manage debtors, they will begin to manage
your business as you will gradually lose control due to reduced cash flow and, of
course, you could experience an increased incidence of bad debt.
The following measures will help manage debtors:
1. Have the right mental attitude to the control of credit and make sure that it
gets the priority it deserves.
2. Establish clear credit practices as a matter of company policy.
3. Make sure that these practices are clearly understood by staff, suppliers and
customers.
4. Be professional when accepting new accounts, and especially largerones.

5. Check out each customer thoroughly before you offer credit. Use credit
agencies, bank references, industry sources etc.
6. Establish credit limits for each customer and stick to them.
7. Continuously review these limits when you suspect tough times are coming
or if operating in a volatile sector.
8. Keep very close to your larger customers.
9. Invoice promptly and clearly.
10.Consider charging penalties on overdue accounts.
11.Consider accepting credit /debit cards as a payment option.
12.Monitor your debtor balances and aging schedules, and don't let any debts get
too old.
Debtors due over 90 days (unless within agreed credit terms) should generally
demand immediate attention. Look for the warning signs of a future bad debt. For
example..
1. Longer credit terms taken with approval, particularly for smaller orders.
2. Use of post-dated checks by debtors who normally settle within agreed
terms.
3. Evidence of customers switching to additional suppliers for the same goods.
4. New customers who are reluctant to give credit references.
5. Receiving part payments from debtors.
Here are few ways in collecting money from debtors: -

Develop appropriate procedures for handling late payments.

Track and pursue late payers

Get external help if you own efforts fail.

Dont feel guilty asking for money .. its yours and you are entitled to it.

Make that call now. And keep asking until you get some satisfaction.

In difficult circumstances, take what you can now and agree terms for the
remainder, it lessens the problem.

When asking for your money, be hard on the issue but soft on the person.
Dont give the debtor any excuses for not paying.

Make that your objective is to get the money, not to score points or get even.

MANAGING PAYABLES (Creditors)

Creditors are a vital part of effective cash management and should be
managed carefully to enhance the cash position.
Purchasing initiates cash outflows and an over-zealous purchasing function can
create liquidity problems.
Consider the following:

Who authorizes purchasing in your company - is it tightly managed or spread

among a number of (junior) people?

Are purchase quantities geared to demand forecasts?

Do you use order quantities, which take account of stock holding and
purchasing costs?

Do you know the cost to the company of carrying stock?

How many of your suppliers have a return policy?

Are you in a position to pass on cost increases quickly through price

increases to your customers?

If a supplier of goods or services lets you down can you charge back the
cost of the delay?

There is an old adage in business that "if you can buy well then you can sell
well". Management of your creditors and suppliers is just as important as the
management of your debtors. It is important to look after your creditors- slow
payment by you may create ill feeling and can signal that your company is
inefficient (or in trouble!).

Remember that a good supplier is someone who will work with you to enhance the
future viability and profitability of your company.

Financing Current Assets

the firm has to decide about the sources of funds, which can be availed to make
investment in current assets.
Long term financing:
It includes ordinary share capital, preference share capital, debentures, long term
borrowings from financial institutions and reserves and surplus.
Short term financing:
It is for a period less than one year and includes working capital funds from banks,
public deposits, commercial paper etc.
Depending on the mix of short and long term financing, the company can
follow any of the following approaches.
Matching Approach
In this, the firm follows a financial plan, which matches the expected life of assets
with the expected life of source of funds raised to finance assets. When the firm
follows this approach, long term financing will be used to finance fixed assets and
permanent current assets and short term financing to finance temporary or variable
current assets.
Conservative Approach
In this, the firm finances its permanent assets and also a part of temporary current
assets with long term financing. In the periods when the firm has no need for
temporary current assets, the long-term funds can be invested in tradable securities
to conserve liquidity. In this the firm has less risk of facing the problem of shortage of
funds.
Aggressive Approach
In this, the firm uses more short term financing than warranted by the matching plan.
Under an aggressive plan, the firm finances a part of its current assets with short
term financing.

ADVANTAGES OF WORKING CAPITAL MANAGEMENT

Speed and Flexibility: One advantage of working capital financing is that most
eligible companies can obtain short-term loans, including accounts receivable credit
lines, inventory loans or bank lines of credit, in a short period of time. The loan
amounts are typically a fraction of revenues and are tied to assets that quickly convert
to cash. Working capital financing is generally flexible, with varying interest rates and
repayment terms. This flexibility can help companies with seasonal or periodic
fluctuations smooth out cash flow.

Short-Term Options: Accounts receivable credit lines and factoring, which occurs
when your company sells its receivables to a third party at a discount, directly tie to
your company's accounts receivables. As your company's revenues and associated
receivables grow, the credit line increases. As your company needs more money, these
working capital options make those funds available. These also provide a viable
choice for smaller or newer companies without the operational history or balance
sheet strength to qualify for a bank term loan or unsecured line of credit.

Medium-Term Options: Your company can also finance working capital with a term
loan. Short-term working capital financing addresses cyclical needs throughout the
fiscal year. Mid-term working capital financing provides the funds to purchase
additional inventory and generate the receivables that increase working capital. For
companies with growth prospects over the next few years, this option provides access
to a steady stream of capital to cover gaps created by growth-related expenses.

REVIEW
OF
LITERATURE

Dr. G. Vara Kumar (2014) studied that working capital is the lifeblood and nerve center of
any business. No business can run successfully without adequate working capital. Hence,
working capital management is very important of corporate finance because it directly affects
the liquidity and profitability of the firm. An efficient working capital management (WCM)
has a significant effect towards the creation of firms value. The present paper gives various

review of Literature on working capital management (conceptual and research). The main
objective of this paper is to provide the wide variety of reviews on working capital
management in different industries and fields to identify the research gap for further studies.
The study has been identified that research studies of general nature relating to working
capital management are limited. Further, research studies touching upon finance are of
Automotive Battery industry are also very limited, while working capital management in
Automotive Battery Industry is hither to a much neglected area.

H. Chandra & A. Selvaraj (2012) studied that working capital is the backbone of an
organization. It refers to a portion of the total fund which finances the day to day working
expenses during the operating cycle. Management of working capital is one of the most
important functions of corporate management. It is rightly said, Inadequate working capital
is advantageous, whereas redundant working capital is a criminal waste. As a large
manufacturing industry, working capital management in the steel industry involves a large
portion of the company's total assets. The optimum working capital ensures the success of the
business, while its inefficient management will lead to the down fall of the company. Hence,
this paper analyses the working capital management of selected steel companies in India.
Further, to measure the effective utilization of the working capital, Operating Cycle and Cash
Conversion Cycle were used. To measure the determinants of Cash Conversion Cycle, the
Kieschnick model has been used. Finally, it was concluded that the size of a company plays a
vital role in determining the efficiency of its working capital management.

Bhaskar Bagchi (2012)The paper aims to explore the effects of components of working
capital management like cash conversion cycle (CCC), age of inventory (AI), age of debtors
(AD), age of creditors (AC), debt to total assets (DTA) and debt equity ratio (DER) on
profitability of FMCG firms. The profitability of firms is measured in terms of return on total
assets (ROTA) and return on investment (ROI). Working capital management is considered to
be a vital issue in financial management decision and it affects both liquidity and profitability
of the firm. The secondary data for analysis is retrieved from Prowess Database of CMIE for
ten year period from 2000 01to2009-10.

Ashok Kumar Panigrahi (2010) studied that since the liberalization of Indian economy,
there has been an upsurge in research on company finance, particularly aimed at
understanding how companies finance their activities and why they finance their activities in
these specific ways. In practice, it is observed that finance managers use different
combinations of debt and equity. The present study is aimed at to find out the trend and
pattern of financing by the Indian companies before and after the liberalization. The sheer
size and diversity of the Indian capital market are, on their own, more than sufficient reasons
for investigating Indian company financing in depth. In addition, the liberalization of the
market offers a unique laboratory for evaluating the development of companies as
liberalization proceeds. In this study, we attempt to compare and contrast the capital structure
of Indian corporate before and after liberalization. Going beyond this, we examine the impact
of liberalization and changes if any noticed due to liberalization, on the capital structure of
Indian companies. Effort is also made to analyze the capital structure decisions of Indian
companies in the recent past.
Amalendu Bhunia (2011) studied that the present study aims to identify the financial
strengths and weaknesses of the Indian public sector pharmaceutical enterprises by properly
establishing relationships between the items of the balance sheet and profit and loss account.
The study covers two public sector drug and pharmaceutical enterprises listed on BSE. The
study has been undertaken for the period of twelve years from 1997-98 to 2008-09 and the
necessary data have been obtained from CMIE database. The liquidity position was strong in
case of both the selected companies thereby reflecting the ability of the companies to pay
short-term obligations on due dates and they relied more on external funds in terms of longterm borrowings thereby providing a lower degree of protection to the creditors. Financial
stability of both the selected companies has showed a downward trend and consequently the
financial stability of selected pharmaceutical companies has been decreasing at an intense
rate. The study exclusively depends on the public sectors published financial data and it does
not compare with private sector pharmaceutical enterprises. This is a major limitation of the
research. The study is of crucial importance to measure the firms liquidity, solvency,
profitability, stability and other indicators that the business is conducted in a rational and
normal way; ensuring enough returns to the shareholders to maintain at least its market value.
The study will help investors to identify the nature of Indian pharmaceutical industry and will
also help to take decision regarding investment.

Dr. Huseyin Yilmaz (2011) studied that Cash management could be thought in a broader
perspective. My cash management model covers cash flow ratio analysis, cash improving
activities, management of excessive cash by classifying as free cash flow and dependent cash
flow, and financing cash gap. The financial statements are Balance Sheet, Income Statement,
and Statement of Cash Flows. Cash flow ratio analysis covers some cash flows ratios such as
cash flow adequacy, long term debt payout, dividend payout, reinvestment of cash, debt
coverage, and depreciation effect. Cash improvement activities are decreasing cash cycle,
improving cash dividend payout., new payment systems, managing cash in inflation
environment, efficient currency management, barter trade, leasing, using subsidiaries, cash
break event point etc. The model has given me an opinion about new cash management
definition. It will be given on the text.
Dr. Muhammad AZAM and Syed Irfan HAIDER (2011) studied that the purpose of this
study is to investigate the impact of working Capital Management on firms performance for
non-financial institutions listed in Karachi Stock Exchange (KSE- 30) Index. A panel data has
been used in this study for 21 Kse-30 Index listed firms over a period for the year 2001 to
2010. The results are obtained by using Canonical Correlation Analysis for identifying the
relationship between working capital management and firms performance. The findings
show that working capital management has significant impact on firms performance and it is
concluded that managers can increase value of share holder and return on asset by reducing
their inventory size, cash conversion cycle and net trading cycle. Increase in liquidity and
time period to supplier will also lead firms overall performances.
Mohammad Neab and Noriza BMS (2010) worked on crating the relationship between
Working Capital Management (WCM) and performance of firms. For their analysis they
chose the Malaysian listed companies. They administered the perspective of market valuation
and profitability. They used total of 172 listed companies from the databases of Bloomberg.
They randomly selected five year data (2003-2007). This research likewise the researches
quoted before studied the impact of the dimensions of working capital component i.e. C.C.C.,
current ratio (C.R.), current asset to total asset ratio (C.A.T.A.R), current liabilities to total
asset ratio (C.L.T.A.R.), and debt to asset ratio (D.T.A.R.) in effect to the firms performance
whereby firms value dimension was taken as Tobin Q (T.Q.) and profitability i.e. return on

asset (R.O.A.) and return on invested capital (R.O.I.C). They applied two different techniques
for analyzing the data that are multiple regression and correlations. They found that there is a
negative relationship between working capital variables and the firms performance.
Saswata Chatterjee (2010) focused on the importance of the fixed and current assets in the
successful running of any organization. It poses direct impacts on the profitability liquidity.
There have been a phenomenon observed in the business that most of the companies increase
the margin for the profits and losses because this act shrinks the size of working capital
relative to sales. But if the companies want to increase or improve its liquidity, then it has to
increase its working capital. In the response of this policy the organization has to lower down
its sales and hence the profitability will be affected due to this action. For this purpose 30
United Kingdom based companies were selected which were listed in the London Stock
exchange. The data were taken of three years 2006-2008. It analyzed the impact of the
working capital on the profitability. The dimensions of working capital management included
in this research which is quick ratios, current ratios C.C.C, average days of payment,
Inventory turnover, and A.C.P (average collection period).

OBJECTIVES
OF THE

STUDY

OBJECTIVES OF STUDY

The major objectives of this project are:

To study the maintenance of the working capital at appropriate level.

To study the availability of funds for setting the working capital standards.

To determine the components of working capital.

To study the management of the optimal cash amounts, accounts receivables and
inventories.

To determine the effect of working capital on business profitability.

To study operating cycle of working capital.

SCOPE
OF
STUDY

SCOPE OF THE STUDY

This project is vital to me in a significant way. It does have some
importance for the company too. These are as follows:

This project will be a learning device for the finance student.

Through this project I would study the various methods of the working capital
management.

The project will be a learning of planning and financing working capital.

The project would also be an effective tool for credit policies of the companies.

This will show different methods of holding inventory and dealing with cash and
receivables.

This will show the liquidity position of the company and also how do they maintain a
particular liquidity position.

RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY
Research methodology is a systematic way to solve the problem. It may be understood as a
science of study how research is done. We can say that research methodology has many
dimension and research methods do constitute as a part of research methodology. The study
of research methodology gives the necessary training in gathering material and arranging
them, participation in field work when it required, and also training in techniques of data
collection appropriate to particular problem, questionnaire and control on data. It helps to
sorting the data and interpreting it. Knowledge of project report plays a key role in project
work.
The study of research method provides you with the knowledge and skills you need to solve
the problem and meet the challenges of the fast- based decision. Marketing environment we
define Business Research as a systematic inquiry whose objective is to provide information to
solve managerial problem.
It seeks to find explanation to unexplored phenomena to clarify the doubtful facts and to
correct the misconceived facts.

Research Type-:
Research is a systematic way activity to achieve the truth. Research includes the procedure of
collecting the data, analysis it, and finding the truth. The research depends upon the scientific
methods.
Research is not a process of gathering information, as is sometimes suggested. Rather, it is
about answering the unanswered question. In much way the research can be seen as a process
of expanding of our ignorance. There is various type of research like descriptive,
experimental, Applied, Historical, Conceptual, Qualitative etc. According to my study and
resource I have choose descriptive research.
Descriptive Research
Descriptive study is a fact- finding investigation with adequate interpretation. It is the
simplest type of research. It is more specific than an explanatory study, as it has focus on
particular aspect of the problem studied. It is designed to get her descriptive information and
provide information for formulating more sophisticated studies. Data are collected by using
one or more appropriate method, observation, interviewing and mail questionnaire.

It is also called a statically research. In this I have describe the data and characteristics of
population. In research I tried to find the answer of questions who, what, when and how. In
descriptive research I choose frequency, average, and other statically calculation. I have
conduct a survey.
Research Design-:
Research Design is a framework to conduct the research.
This study used descriptive research. Descriptive research involves gathering data that
describe events and then organizes, tabulates, depicts, and describes the data
collection . It often uses visual aids such as graphs and charts to aid the reader in
understanding the data distribution and therefore offered a better clarification on online
advertising, and ultimately give a clear picture on the effectiveness and reliability of online
advertising and its relationship to purchase decision.
Descriptive research is used to describe characteristics of a population or phenomenon being
studied. It does not answer questions about how/when/why the characteristics occurred.
Rather it addresses the "what" question (what are the characteristics of the population or
situation being studied? characteristics used to describe the situation or population are usually
some kind of categorical scheme also known as descriptive categories.
Descriptive research generally precedes explanatory research. Hence, research cannot
describe what caused a situation. Thus, descriptive research cannot be used to as the basis of
a causal relationship, where one variable affects another. In other words, descriptive research
can be said to have a low requirement for internal validity.
The description is used for frequencies, averages and other statistical calculations. Qualitative
research often has the aim of description and researchers may follow-up with examinations of
why the observations exist and what the implications of the findings are.
It has two type one is longitudinal and second is Cross-sectional.

Why I choose descriptive study

The purpose of Descriptive Research

The most basic form of Research involves the description of the forms, actions,
changes over time of the natural and non-natural phenomena. It also involves the
description of similarities with other phenomena.

With the help of descriptive study I able to find the result accurately as well in good
manner.

I am able to clear my objective.

It becomes easy to collect the data.

In descriptive study I able to collect the both data like qualitative and quantitative.

Data collection
Data collection is the process of gathering and measuring information on variables of interest,
in an established systematic fashion that enables one to answer stated research questions, test
hypotheses, and evaluate outcomes. The data collection component of research is common to
all fields of study including physical and social sciences, humanities, business, etc. While
methods vary by discipline, the emphasis on ensuring accurate and honest collection remains
the same. The goal for all data collection is to capture quality evidence that then translates to
rich data analysis and allows the building of a convincing and credible answer to questions
that have been posed.
Regardless of the field of study or preference for defining data (quantitative, qualitative),
accurate data collection is essential to maintaining the integrity of research. Both the selection
of appropriate data collection instruments (existing, modified, or newly developed) and
clearly delineated instructions for their correct use reduce the likelihood of errors occurring.
In my research I have collect data from primary source and secondary source.

Secondary data-:
It includes the data from internet hyperlinks and books, journals and news paper.
Mainly I have collected data from internet and books. The main aim to collect the secondary
data is to understand the meaning of consumers behaviour, process, and importance.
Secondary data is data which has been collected by individuals or agencies for purposes other
than those of our particular research study. For example, if a government department has
conducted a survey of, say, family food expenditures, then a food manufacturer might use this
data in the organisation's evaluations of the total potential market for a new product.

Similarly, statistics prepared by a ministry on agricultural production will prove useful to a

whole host of people and organisations, including those marketing agricultural supplies.
Secondary data may be available which is entirely appropriate and wholly adequate to draw
conclusions and answer the question or solve the problem. Sometimes primary data collection
simply is not necessary.
It is far cheaper to collect secondary data than to obtain primary data. For the same level of
research budget a thorough examination of secondary sources can yield a great deal more
information than can be had through a primary data collection exercise.
The time involved in searching secondary sources is much less than that needed to complete
primary data collection.
Secondary sources of information can yield more accurate data than that obtained through
primary research. This is not always true but where a government or international agency has
undertaken a large scale survey, or even a census, this is likely to yield far more accurate
results than custom designed and executed surveys when these are based on relatively small
sample sizes.
It should not be forgotten that secondary data can play a substantial role in the exploratory
phase of the research when the task at hand is to define the research problem and to generate
hypotheses. The assembly and analysis of secondary data almost invariably improves the
researcher's understanding of the marketing problem, the various lines of inquiry that could
or should be followed and the alternative courses of action which might be pursued.
Secondary sources help define the population. Secondary data can be extremely useful both
in defining the population and in structuring the sample to be taken. For instance, government
statistics on a country's agriculture will help decide how to stratify a sample and, once sample
estimates have been calculated, these can be used to project those estimates to the population.
Problem of secondary data-:

The research is totally dependent on the other. No personal judgement is there.

Market is changeable, so result is not accurate.

Lot of error occurs in secondary based research.

Difficulties in measurement.

The data is less reliable as compare to the primary source

RATIO
ANALYSIS

Ratio analysis:
Ratio analysis is a widely used tool of financial analysis. The term ratio in it refers to the
relationship expressed in mathematical terms between two individual figures or group of
figures connected with each other in some logical manner and are selected from financial
statements of the concern. The ratio analysis is based on the fact that a single accounting
figure by itself may not communicate any meaningful information but when expressed as a
relative to some other figure, it may definitely provide some significant information the
relationship between two or more accounting figure/groups is called a financial ratio helps to
express the relationship between two accounting figures in such a way that users can draw
conclusions about the performance, strengths and weakness of a firm.
Classification of ratios:
A) Liquidity ratios
B) Leverage ratios
C) Activity ratios
D) Profitability ratios

A) LIQUIDITY RATIOS:
These ratios portray the capacity of the business unit to meet its short term obligation from its
short-term resources (e.g.) current ratio, quick ratio.
i) Current ratio:
Current ratio may be defined as the relationship between current assets and current liabilities
it is the most common ratio for measuring liquidity. It is calculated by dividing current assets
and current liabilities. Current assets are those, the amount of which can be realized with in a
period of one year. Current liabilities are those amounts which are payable with in a period of
one year.
Current assets
Current assets = ------------------------Current liabilities
ii) Liquid Ratio:
The term liquidity refers to the ability of a firm to pay its short-term obligation as and when
they become due. The term quick assets or liquid assets refers current assets which can be
converted into cash immediately it comprises all current assets except stock and prepaid
expenses it is determined by dividing quick assets by quick liabilities.
Liquid assets

Liquid ratio = ------------------------Liquid liabilities

iii) Absolute liquidity ratio:
Absolute liquid assets include cash, bank, and marketable securities. This ratio obtained by
dividing cash and bank and marketable securities by current liabilities.
Cash +bank+ marketable securities
Absolute liquidity ratio = ---------------------------------------------Current liabilities
B) LEVERAGE RATIOS:
Many financial analyses are interested in the relative use of debt and equity in the firm. The
term solvency refers to the ability of a concern to meet its long- term obligation. Accordingly,
long-term solvency ratios indicate a firms ability to meet the fixed interest and costs and
repayment schedules associated with its long-term borrowings. (E.g.) debt equity ratio,
proprietary ratio, etc.
i) Debt equity ratio:
It expresses the relationship between the external equities and internal equities or the
relationship between borrowed funds and owners capital. It is a popular measure of the
long-term financial solvency of a firm. This relationship is shown by the debt equity ratio.
This ratio indicates the relative proportion of debt and equity in financing the assets of a firm.
This ratio is computed by dividing the total debt of the firm by its equity (i.e.) net worth.
Outsiders funds
Debt equity ratio = -----------------------------Proprietors funds
ii) Proprietary ratio: Proprietary ratio relates to the proprietors funds to total assets. It
reveals the owners contribution to the total value of assets. This ratio shows the long-time
solvency of the business it is calculated by dividing proprietors funds by the total tangible
assets.
Proprietors funds
Proprietary ratio = --------------------------Total tangible assets
C) ACTIVITY RATIOS:

These ratios evaluate the use of the total resources of the business concern along with the use
of the components of total assets. They are intended to measure the effectiveness of the assets
management the efficiency with which the assets are used would be reflected in the speed and
rapidity with which the assets are converted into sales. The greater the rate of turnover, the
more efficient the management would be (E.g.) stock turnover ratio, fixed assets turnover
ratios etc.
i) Stock turnover ratio:
This ratio indicates whether investment is inventory is efficiently used or not it explains
whether investment in inventories in with in proper limits or not. It also measures the
effectiveness of the firms sales efforts the ratio is calculated as follows.
Cost of goods sold
Stock turnover ratio = ----------------------------Average stock
Opening Stock + Closing Stock
Average stock = ----------------------------------------2

ii) Fixed assets turnover ratio:

The ratio indicates the extent to which the investments in fixed assets contribute towards
sales. If compared with a previous year. It indicates whether the investment in fixed assets
has been judious or not the ratio is calculated as follows.
Net sales
Fixed assets turnover ratio = ------------------Fixed assets
iii) Working capital turnover ratio: Working capital turnover ratio indicates the velocity of
the utilization of net working capital. This ratio indicates the number of times the working
capital is turned over in the course of a year. It is a good measure over trading and undertrading.
Net sales
Working capital turnover ratio = -------------------------Net working capital
iv) Return on total assets:

Profitability can be measured in terms of relationship between net profit and total assets. It
measures the profitability of investment. The overall profitability can be known by applying
this ratio.
Net profit
Return on total assets = ----------------------------- x100
Total assets

D) PROFITABILITY RATIOS:
The profitability ratios of a business concern can be measured by the profitability ratios.
These ratios highlight the end result of business activities by which alone the overall
efficiency of a business unit can be judged, (E.g.) gross ratios, Net profit ratio.
i) Gross profit ratio:
This ratio expresses the relationship between Gross profit and sales. It indicated the
efficiency of production or trading operation. A high gross profit ratio is a good management
as it implies that cost of production is relatively low.
Gross profit
Gross profit ratio = ----------------------------- x 100
Net sales
ii) Net profit ratio:
Net profit ratio establishes a relationship between net profit (after taxes) and sales. It is
determined by dividing the net income after tax to the net sales for the period and measures
the profit per rupee of sales.
Net profit
Net profit sales = ----------------- x 100
Net sales

DATA ANALYSIS
AND
INTERPRETATION

LIQUIDITY RATIO
1. CURRENT RATIO:
The current ratio is calculated by dividing current assets by current liabilities:
Current ratio =

Current Assets
Current Liabilities

The current ratio is a measure of the firms short-term solvency. It indicates the
availability of current assets in rupees for every one rupee of current liability.

(Amount in Rs. )
Current Ratio
Year

Current Assets

Current Liabilities

Ratio

2011
2012
2013
2014
2015

58,574,151
69,765,346
72,021,081
91,328,208
115,642,068

7,903,952
31,884,616
16,065,621
47,117,199
30,266,661

7.41
2.19
4.48
1.94
3.82

GRAPHICAL REPRESENTATION

Ratios
8
7

7.41

6
5

Ratios

4.48
3.82

3
2

2.19

1.94

1
0

2011

2012

2013

2014

2015

Interpretation
1) As a rule, the current ratio with 2:1 (or) more is considered as satisfactory position of
the firm.
2) When compared with 2011, there is an increase in the provision for tax, because the
debtors are raised and for that the provision is created. The current liabilities
majorly included of company for consultancy additional services.
3) The sundry debtors have increased due to the increase to corporate taxes.
4) In the year 2011, the cash and bank balance is reduced because that is used for

payment of dividends. In the year 2012, the loans and advances include majorly the
advances to employees and deposits to government. The loans and advances
reduced because the employees set off their claims. The other current assets include
the interest attained from the deposits. The deposits reduced due to the declaration
of dividends. So the other current assets decreased.
5) The huge increase in sundry debtors resulted an increase in the ratio, which is above
the benchmark level of 2:1 which shows the comfortable position of the firm.

2. QUICK RATIO
It establishes a relationship between quick, or liquid, assets and current liabilities. An
asset is liquid if it can be converted into cash immediately or reasonably soon without a
loss of value. Cash is the most liquid asset. Inventories are considered to be less liquid.

Quick ratio =

Liquid assets
Liquid liabilities

Liquid Assets = Current Assets Inventories.

(Amount in Rs.)

Quick Ratio
Year
2011
2012
2013
2014
2015

Quick Assets
58,574,151
52,470,336
69,883,268
89,433,596
115,431,868

Current Liabilities
7,903,952
31,884,616
16,065,620
47,117,199
30,266,661

GRAPHICAL REPRESENTATION:

Ratio
7.41
1.65
4.35
1.9
3.81

QUICK RATIOS
8
7

7.41

6
5

QUICK RATIOS

4.35

3.81

3
2
0

1.9

1.65

1
2011

2012

2013

2014

2015

Interpretation
Quick assets are those assets which can be converted into cash within a short period
of time, say to six months. So, here the sundry debtors which are with the long period
does not include in the quick assets.
Compare with 2011, the Quick ratio is increased because the sundry debtors are
increased due to the increase in the corporate tax and for that the provision created is
also increased. So, the ratio is also increased with the 2011.

3. CURRENT ASSET TURNOVER RATIO:

Assets are used to generate sales. Therefore; a firm should manage its assets
Efficiently to maximise sales. The relationship between sales and assets is called assets
turnover.

Current assets turnover =

Sales
Current assets

4. ABOSULTE LIQUIDITY RATIO:

Absolute Liquid Assets include cash in hand and at bank and marketable securities or
temporary investments. The acceptable norm for this ratio is 50% or 0.5: 1 or 1: 2 i.e. Re. 1
worth absolute liquid assets are considered adequate to pay Rs. 2 worth current liabilities in
time as all the creditors are not expected to demand cash at the same time and then cash may
also be realized from debtors and inventories.

(Amount in Rs.)

Absolute Cash Ratio

Year
2011
2012
2013
2014
2015

Absolute Liquid Assets

31,004,027
10,859,778
39,466,542
53,850,852
35,649,070

GRAPHICAL REPRESENTATION

Current Liabilities
7,903,952
31,884,616
16,065,620
47,117,199
30,266,661

Ratio
3.92
0.34
2.46
1.14
1.18

LIQIDITY RATIOS
4.5
4
3.92

3.5
3

LIQIDITY RATIOS

2.5

2.46

2
1.5
1
0.5
0

2011

0.34
2012

2013

1.14

1.18

2014

2015

Interpretation
The current assets which are ready in the form of cash are considered as absolute
liquid assets. Here, the cash and bank balance and the interest on fixed assets are
absolute liquid assets.
In the year 2014, the cash and bank balance is decreased due to decrease in the
deposits and the current liabilities are also reduced because of the payment of
dividend. That causes a slight increase in the current years ratio.

LEVERAGE RATIOS
PROPRIETORY RATIO:
The proprietary ratio (also known as the equity ratio) is the proportion of shareholders' equity
to total assets, and as such provides a rough estimate of the amount of capitalization currently
used to support a business
Formula :
Shareholders'equity
Total tangible assets
(Amount in Rs.)

Proprietary Ratio

Year
2011
2012
2013
2014
2015

Share Holders Funds

67,679,219
53,301,834
70,231,061
56,473,652
97,060,013

Total Assets
78,572,171
88,438,107
89,158,391
106,385,201
129,805,102

Ratio
0.86
0.6
0.79
0.53
0.75

GRAPHICAL REPRESENTATION

PROPRIETARY RATIOS
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

0.86

0.79
0.6

2011

2012

0.75

PROPERIETARY RATIOS

0.53

2013

2014

2015

Interpretation
The proprietary ratio establishes the relationship between shareholders funds to total assets. It
determines the long-term solvency of the firm. This ratio indicates the extent to which the
assets of the company can be lost without affecting the interest of the company.
There is no increase in the capital from the year2012. The share holders funds include capital
and reserves and surplus. The reserves and surplus is increased due to the increase in balance
in profit and loss account, which is caused by the increase of income from services.

Total assets, includes fixed and current assets. The fixed assets are reduced because of the
depreciation and there are no major increments in the fixed assets. The current assets are
increased compared with the year 2014. Total assets are also increased than precious year,
which resulted an increase in the ratio than old.

ACTIVITY RATIOS
WORKING CAPITAL TURNOVER RATIO:
The working capital turnover ratio measures how well a company is utilizing its working
capital to support a given level of sales. Working capital is current assets minus current
liabilities. A high turnover ratio indicates that management is being extremely efficient in
using a firm's short-term assets and liabilities to support sales. Conversely, a low ratio
indicates that a business is investing in too many accounts receivable and inventory assets to
support its sales, which could eventually lead to an excessive amount of bad debts and
obsolete inventory.

Net sales/ income from services

(Beginning working capital + Ending working capital) / 2
(Amount in Rs.)

Working Capital Turnover Ratio

Year
2011
2012
2013
2014
2015

Income From Services

36,309,834
53,899,084
72,728,759
55,550,649
96,654,902

Working Capital
50,670,199
37,880,730
55,355,460
44,211,009
85,375,407

Ratio
0.72
1.42
1.31
1.26
1.13

GRAPHICAL REPRESENTATION

Working Capital Turnover Ratio

1.6
1.4

1.42

1.2

1.31

1.26
1.13

Ratio

0.8
0.6

0.72

0.4
0.2
0

2011

2012

2013

2014

2015

Interpretation
Income from services is greatly increased due to the extra invoice for Operations &
Maintenance fee and the working capital is also increased greater due to the increase in
from services because the huge increase in current assets.
The income from services is raised and the current assets are also raised together resulted
in the decrease of the ratio of 2015 compared with 2014.

5. FIXED ASSETS TURNOVER RATIO:

(Amount in Rs.)

Fixed Assets Turnover Ratio

Year
2011
2012
2013
2014
2015

Income From Services

36,309,834
53,899,084
72,728,759
55,550,649
96,654,902

Net Fixed Assets

28,834,317
29,568,279
17,137,310
15,056,993
14,163,034

Ratio
1.26
1.82
4.24
3.69
6.82

GRAPHICAL REPRSENTATION

Fixed Assets Turnover Ratio

8
7
6.82

6
5

Ratio

4.24

3.69

2
1
0

1.26
2011

1.82
2012

2013

2014

2015

Interpretation
Fixed assets are used in the business for producing the goods to be sold. This ratio shows the
firms ability in generating sales from all financial resources committed to total assets. The
ratio indicates the account of one rupee investment in fixed assets.
The income from services is greaterly increased in the current year due to the increase in the
Operations & Maintenance fee due to the increase in extra invoice and the net fixed assets are
reduced because of the increased charge of depreciation. Finally, that effected a huge increase
in the ratio compared with the previous years ratio.

7. CAPITAL TURNOVER RATIO

(Amount in Rs.)

Capital Turnover Ratio

Year
2011
2012
2013
2014
2015

Income From Services

36,309,834
53,899,084
72,728,759
55,550,649
96,654,902

Capital Employed
37,175,892
53,301,834
70,231,061
56,473,652
97,060,013

Ratio
0.98
1.01
1.04
0.98
1.00

GRAPHICAL REPRESENTATION

Capital Turnover Ratio

1.05
1.04
1.03
1.02
1.01
1
0.99
0.98
0.97
0.96
0.95

1.04
Ratio

1.01
1
0.98

2011

0.98

2012

2013

2014

2015

Interpretation
This is another ratio to judge the efficiency and effectiveness of the company like
profitability ratio.
The income from services is greaterly increased compared with the previous year and the
total capital employed includes capital and reserves & surplus. Due to huge increase in
the net profit the capital employed is also increased along with income from services.
Both are effected in the increment of the ratio of current year.

1. CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount in Rs.)
Current Assets To Fixed Assets Ratio
Year
2011
2012
2013
2014
2015

Current Assets
58,524,151
69,765,346
72,021,081
91,328,208
115,642,068

Fixed Assets
19,998,020
18,672,761
17,137,310
15,056,993
14,163,034

Ratio
2.93
3.74
4.20
6.07
8.17

GRAPHICAL REPRESENTATION

Ratio
9
8

8.17

7
6

6.07

5
4
3
2

3.74

Ratio

4.2

2.93

1
0

2011

2012

2013

2014

2015

Interpretation
Current assets are increased due to the increase in the sundry debtors and the net fixed
assets of the firm are decreased due to the charge of depreciation and there is no major
increment in the fixed assets.
The increment in current assets and the decrease in fixed assets resulted an increase in the
ratio compared with the previous year

PROFITABILITY RATIOS
GENERAL PROFITABILITY RATIOS
NET PROFIT RATIO
(Amount in Rs.)

Net Profit Ratio

Year
2011
2012
2013
2014
2015

Net Profit After Tax

21,123,474
16,125,942
16,929,227
18,259,580
40,586,359

Income from Services

36,039,834
53,899,084
72,728,759
55,550,649
96,654,902

Ratio
0.59
0.30
0.23
0.33
0.42

GRAPHICAL REPRESENTATION

Net Profit Ratio

0.7
0.6
0.5

0.59

0.4

0.42

0.3

0.33

0.3

0.2

Ratio

0.23

0.1
0

2011

2012

2013

2014

2015

Interpretation
The net profit ratio is the overall measure of the firms ability to turn each rupee of
income from services in net profit. If the net margin is inadequate the firm will fail to
achieve return on shareholders funds. High net profit ratio will help the firm service
in the fall of income from services, rise in cost of production or declining demand.
The net profit is increased because the income from services is increased. The

increment resulted a slight increase in 2015 ratio compared with the year 2014.

OPERATING PROFIT RATIOS

(Amount in Rs.)

Operating Profit
Year
2011
2012
2013
2014
2015

Operating Profit
36,094,877
27,576,814
29,540,599
31,586,718
67,192,677

Income From Services

36,309,834
53,899,084
72,728,759
55,550,649
96,654,902

Ratio
0.99
0.51
0.41
0.57
0.70

GRAPHICAL REPRESENTATION

Ratio
1.2
1

0.99

0.8

Ratio
0.7

0.6
0.57

0.51

0.4

0.41

0.2
0

2011

2012

2013

2014

2015

Interpretation
The operating profit ratio is used to measure the relationship between net profits and sales
of a firm. Depending on the concept, it will decide.
The operating profit ratio is increased compared with the last year. The earnings are
increased due to the increase in the income from services because of Operations &
Maintenance fee. So, the ratio is increased slightly compared with the previous year.

11.RETURN ON TOTAL ASSETS RATIO

(Amount in Rs.)

Return on Total Assets Ratio

Year
2011
2012
2013
2014
2015

Net Profit After Tax

21,123,474
16,125,942
16,929,227
18,259,580
40,586,359

Total Assets
78,572,171
88,438,107
89,158,391
106,385,201
129,805,102

Ratio
0.27
0.18
0.19
0.17
0.31

GRAPHICAL REPRESENTATION

Return on Total Assets Ratio

0.35
0.3

0.31
0.27

0.25
0.2

0.18

0.19

2012

2013

Ratio

0.17

0.15
0.1
0.05
0
2011

2014

2015

Interpretation
This is the ratio between net profit and total assets. The ratio indicates the return on total
assets in the form of profits.
The net profit is increased in the current year because of the increment in the income from
services due to the increase in Operations & Maintenance fee. The fixed assets are
reduced due to the charge of depreciation and no major increments in fixed assets but the
current assets are increased because of sundry debtors and that effects an increase in the
ratio compared with the last year i.e. 2014.

12. RESERVES & SURPLUS TO CAPITAL RATIO

(Amount in Rs.)

Reserves & Surplus To Capital Ratio

Year
2011
2012
2013
2014
2015

Reserves & Surplus

65,599,299
34,582,554
51,511,781
37,754,372
78,340,733

Capital
2,079,920
18,719,280
18,719,280
18,719,280
18,719,280

Ratio
31.54
1.85
2.75
2.02
4.19

Reserves & Surplus To Capital Ratio

35
30

31.54

25
Ratio

20
15
10
5
0

2011

1.85
20121

2.75
2013

2.02
2014

4.19
2015

Interpretation
The ratio is used to reveal the policy pursued by the company a very high ratio indicates a
conservative dividend policy and vice-versa. Higher the ratio better will be the position.
The reserves & surplus is decreased in the year 2014, due to the payment of dividends
and in the year 2015the profit is increased. But the capital is remaining constant from the
year 2012. So the increase in the reserves & surplus caused a greater increase in the
current years ratio compared with the older.

OVERALL PROFITABILITY RATIOS

13. EARNINGS PER SHARE

(Amount in Rs.)

Earnings Per Share

Year
2011
2012
2013
2014
2015

Net Profit After Tax

21,123,474
16,125,942
16,929,227
18,259,580
40,586,359

No of Equity Shares
207,992
1,871,928
1,871,928
1,871,928
1,871,928

Ratio
101.56
8.61
9.04
9.75
21.68

GRAPHICAL REPRESENTATION

Earnings Per Share Ratio

120
100

101.56

80

Ratio

60
40
20
0

21.68
2011

8.61
2012

9.04
2013

9.75
2014

2015

Interpretation
Earnings per share ratio are used to find out the return that the shareholders earn from their
shares. After charging depreciation and after payment of tax, the remaining amount will be
distributed by all the shareholders.
Net profit after tax is increased due to the huge increase in the income from services. That is
the amount which is available to the shareholders to take. There are 1,871,928 shares of
Rs.10/- each. The share capital is constant from the year 2012. Due to the huge increase in net
profit the earnings per share is greaterly increased in 2015.

14. PRICE EARNINGS (P/E) RATIO

(Amount in Rs.)
Price Earning (P/E) Ratio
Year
2011
2012
2013
2014
2015

Market Price Per Share

32.54
28.47
37.52
30.17
51.85

Earnings Per Share

101.56
8.61
9.04
9.75
21.68

Ratio
0.32
3.30
4.15
3.09
2.39

GRAPHICAL REPRESENTATION

Ratio
4.5
4

4.15

3.5
3.3

3.09

2.5

Ratio
2.39

2
1.5
1
0.5
0

0.32
2011

2012

2013

2014

2015

Interpretation
The ratio is calculated to make an estimate of application in the value of share of a company.
The market price per share is increased due to the increase in the reserves & surplus. The
earnings per share are also increased greaterly compared with the last year because of
increase in the net profit. So, the ratio is decreased compared with the previous year.

FINDINGS

FINDINGS
Current ratio is decreasing as compare to the ratios of last years and it is not up to this
mark as per as rule of thumb is concerned. This shows that companys liquidity position is
not so much good although Current Asset more than Current Liabilities.
Quick ratio is also not in such a sufficient position than the previous years quick ratio.
Current asset turnover ratio is increasing from 2010 2011 but its decreased in the year
of 2012.
Working capital turnover ratio has increased in 2011to 2015.
Debtor turnover ratio is deceased because debtors are decreasing due to decreased in
sales.
Net profit of company going negative where gross profit is also coming down but still its
positive which states that company is still in a position of profit.
Company has more borrowed funds as comparing to cash fund or business fund.
Company is not maintaining its stocks properly as what we got from the above data
interpretation.

RECOMMENDATIONS

RECOMMENDATIONS
The management of the working capital is equally important as the management of longterm financial investment. The goal of working capital management is to ensure that the
firm is able to continue its operations and that it has sufficient cash flow to satisfy both
maturing short-term debt and upcoming operational expenses.
The various steps TCS-iON Ltd., PATIALA may take to improve its working capital
management are as follows:

The company should increase its capacity to improve its net profitability

by finding new ways of increasing the profits.

Prompt collection from its debtors.
Moving towards more absolute liquidity.
Reduction in giving loans and collects more absolute information about its

debtors to decrease its loan.

Company should improve its working capital utilization more.

LIMITATIONS

LIMITATIONS
1. The study is being conducted under time and money constraints.
2. Due to shortage of time the study is conducted on very small scale i.e. based upon
material and information provided by the company.
3. I have faced a lot of problem in collecting the information about the company because
the company has refused to provide most of the information being confidential in
nature.

CONCLUSION

CONCLUSION
On the basis of above discussion I conclude that working capital management is must be
followed by every business of both level large as well small levels because its help company
to understand their financial position as well working capital position in the market. This
analysis includes such kinds of tools which helps whole company and their all employees to
position out their company in the stock market properly.
Working capital management gives lots of knowledge about the market as my study gives lots
of knowledge about his company named TCS- iON Patiala (Punjab). After reading out this
project report or go through of this project report I conclude that the position of this company
not so strong in the market but it doesnt says that this company has no market value. It has,
as its sales are increased about 7-8% in last three years. As income of this company is not
cross its beak even point but its still going well in the form of production & sales.

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