INDEX SR. NO.

1 2 3 4 5 6 7 8 9

NAM E OF THE CHAPTER

INTRODUCTION (A) COMPANY PROFILE (B) TOPIC OBJECTIVE REASERCH METHODOLOGY HYPOTHESIS DATA COLLECTION DATA ANALYASIS CONCLUSION SUGGESATION LIMITATION

PAGE NO. 7-28 29-30 31-32 33-34 35-52 53-56 57-59 60-61 62-63 64-65

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BIBLOGROPHY

Introduction to Company

PRODUCTS
Bajaj Steel Industries Ltd. is promoted by technically qualified, financially sound, professionally experienced technocrats who crave for innovation and value addition. The experts are a well knit, highly motivated professionals, who always encourage initiative and gather a deep sense of job satisfaction. We are known for our innovative and cost-effective products in the marketplace. These products form the hallmark of our corporate entity and separate us from the rest. We are acknowledged by our customers as a leading manufacturer and exporter of the following products: Lint Cleaner Cotton Baling Press Cotton Pre-Cleaner Double Roller Cotton Gin

Other Products
Cotton Ginning Machine Pressing Peasants & Automation Machinery Bolt Opener

Lint Cleaner

Cotton Baling Press

Cotton Pre-Cleaner

Double Roller Cotton Gin 4

QUALITY STATEMENT
To Provide Products and services which consistently satisfy customers needs and to work towards continuous improvement in every functional area as a group and as individuals. To continuously strive to improve the quality of our activities and to do them correctly the first time To have an on-going commitment to foster a quality working environment for our employees. To maintain a leading position in the manufacture of products and services for contributing to the profits of the customer.

SUPERIOR FACILITIES
Highly EquippedNC Machine Shop Effective & Prompt Project Planning Services Well-Equipped Manufacturing Facility Tailor made designs to suit customer needs Well Established Quality Systems Continuous Research & Development

Range of Services
Double Roller Ginning Machines Building Structures

Auto Feeders for Ginning Machines

CNC Machining of Parts

Pre-Cleaners

Turnkey Projects 5

Raw Cotton Conveying Systems

Annual Operation & Maintenance Contracts

Lint Cleaners

Bale Packing Materials

Belt Conveyor Systems

Laboratory Gins

Lint Conveying Systems

Moisture Meters

Cotton Baling Presses

Fiber Testing Equipments

Screw Conveyors

Weigh Bridges

Elevators

Humidification Systems

Fully Automatic Ginning Plants

De-linters

Cotton Boll Openers

Consultancy Services

Seed Processing Machinery

Tyre Bullock Carts

Modernization of Existing Plants

Tarpaulins (HDPE/PP)

FACTORY VIEW
Bajaj Steel's equipped machine shop has more than 20 advance CNC machines and all kind of fabrication facility. Committed and trained personnel, All facility of metal cutting, machining, welding, sheet metal work etc. under one roof. We meet the requirements of the customer to his full satisfaction under one roof for machined components.

HIGHLIGHTS

Location C108, HINGNA MIDC, NAGPUR 440 028 (M.S.) INDIA Trained manpower More than 400 Total area 27456 sq. meters. Plant build-up area 8640 sq. meters. Twenty (20) CNC machines with multi floor CNC setup, Plasma cutting machines,

more than 50 conventional machines and a big set up of fabrication facility with all kind of welding and sheet metal cutting.

Other supporting QA equipments, Infrastructure ready for expansion.

Process of recertification of ISO/TS 16949 is in process due to relocation of the plant.

FACILITIES
Well equipped machine shop with more than 20 advance CNC machines and all kind of

fabrication facility. Committed and trained personnel, All facility of metal cutting, machining, welding, and sheet metal work etc. under one

roof. We meet the requirements of the customer to his full satisfaction under one roof for

machined components

BSIL STRENGTHS

Analysis for customers requirements. Simultaneous Engineering to define Customers requirement. Use of CAD-Inventor, computer simulation, for developing first time right machined

component.

Minimize process cost, manpower and variables. Quality built at every stage. Create product to exceed customer expectations. 100 % committed just-in-time deliveries. A good set up for all kind of tool room machines for in house development of jigs and Has a complete control on market i.e. Monopoly due to this IT benefits in both ways It takes complete 100% advance from customers as well as purchases raw materials in

credit.

Core Value

Leading edge Innovation as way of life Striving & sustaining profitable growth Building reputation by constructively contributing to society Dealing fairly with all who come in touch with us Core Purpose

To pioneer innovations by identifying customer needs & provide unique solutions

Product Portfolio/Projects

We are one of the prominent manufacturers, suppliers and exporters of an extensive assortment of Industrial Machines, Material Handling Equipment and Components. Our complete range is fabricated, machined and assembled in adherence to international quality standards at state-of-the-art facilities. To ensure dimensional preciseness, rigid construction and durability in the products, we use quality-tested grade of steel and other material for fabrication. Keeping in mind varied requirements of our esteemed clients, we also provide engineering & construction projects, plant maintenance, turnkey equipment installations. For more details please refer pdf file attached:
Our Activities

Our diversified business activities cater to varied requirements and demands of numerous sectors. We take pride in being largest manufacturer of Modern Cotton Ginning & Pressing Machinery in India. Apart from this, we are reckoned for the following:

A wide range of delinting and decorticating machinery manufacturing Offering electrical panels for various industrial applications Structural fabrication solutions for buildings and machinery installation Hydraulic cylinders, power packs & manifolds manufacturing for various applications Turkey Projects Plant maintenance solutions Consultancy services 10

Our Installation

With support of our diligent team, we render installation solutions for automatic as well as semiautomatic cotton ginning & pressing plants. Since inception in 1961, we have rendered installation services to over 4000 plants across the world. Apart from installation, we also offer consultancy services for installation. Our proficient team hold expertise in providing mechanical & electrical installation for plant maintenance and turnkey projects. Moreover, our esteemed clients can also avail the following installation services:

System tear-downs and rebuilds Installation of upgrade components Response to emergency shut-down

New system assembly Our Team We are empowered by highly qualified professionals, who hold expertise in their respective working profiles. Our team of over 1000 professionals work in close collaboration and harmony tirelessly round the clock to attain organizational objectives. Owing to their constructive efforts, we are able to provide solutions to varied requirements of our clients. Our team comprises the following professionals:

Engineers/Technicians Quality associates Warehousing Distribution professionals Service personnel Marketing managers Workers

Additionally, we conduct grooming sessions on a regular basis to keep them abreast with market developments and industry advancements.

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INTRODUCTION:
A study of working capital is of major importance to internal and external analysis because of its close relationship to current operations of the business. The term working capital originated at the time when most industries were closely related to agriculture. The amount of fund required for operating need varies from time to time in every business. But certain amount of assets in the form of working capital is always required if the business has to carry out its function efficiently and without a break. The requirement of finance in business arises mainly due to two factors, acquisition of fixed assets and provision of working capital. Fixed assets such as land, funds, broadly known as working capital, buildings, plant and machinery, equipments, etc. are essential for carrying on sales and production. The working capital is necessary to meet day to day revenue expenses

like purchase of materials, wage payment, meeting overhead expenses, etc. Working capital
keeps the business going. In short

Working Capital = Current Assets Current Liability CURRENT ASSETS

Cash In Hand Cash At Bank Sundry Debtors Bills Receivable Stock/ Inventories Short Term Investment Prepaid Expenses Increase in Current Assets results in increase in W.C. Decrease in Current Assets results in decrease in W.C. Increase in Current Liability results in decrease in W.C. Decrease in Current Liability increase in W.C. 13

CURRENT LIABILITY
Sundry Creditors Bills Payable Bank Overdraft Short Term Advances (loan) Outstanding Expenses Dividend Payable Provision For Taxation

DEFINITION:
According to Weston and Brigham Working Capital refers to a firms investment in short term assets, cash, short term securities, account receivable and inventories. According to Corine T. Norgard, It is the difference between companys current assets and current liabilities. The accounts which belong to this group are usually the most active in the company. Unlike fixed assets they reflect the companys daily activities. According to P.V. Kulkarni, It is the excess of current assets over current liabilities and provisions. It is net current assets or net working capital.

Theory of Working Capital:

From the financial management point of view, the nature of fixed assets and current assets differ from each other in following respects.

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.

In case of current assets, it is always necessary to strike a proper balance between the liquidity and profitability principles which is not the case of the fixed assets. Eg. If the size of the 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 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, sufficient cash is available to pay off the creditors and so on. However, investments in current assets more than 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 to small, it always involves the risk of frequent stock out, inability of the company to pay its dues in time. Working capital management is concerned with the problem arising out of the

attempts to manage current assets, current liabilities and inter-relationship between them. The intention is not to maximize the investment of working capital nor is it to minimize the same. The intention is to have optimum investment in working capital. 14

Effect of Inflation on Working Capital Requirement:

The phase of inflation can be identified with the situation of increasing price levels, increasing demand and increasing supply. As such, the working capital requirements multiply during the phase of inflation due to increasing cost of production and increasing level of sales turnover. 1. Possibility of using cheaper substitute raw material, without affecting the quality, should be explored. For this purpose, research activities may be conducted. 2. Attempts should be made to reduce the production cost to the maximum possible extent. For this purpose the techniques like time and motion study, intensive schemes, cost reduction programmes etc. may be implemented. 3. Attempts should be made to reduce the operating cycle to the maximum possible extent. Aiming at greater turnover at short intervals will go a long way to reduce the stress on working capital requirements. 4. Attempt should be made to reduce the amount looked up in receivables. Quicker realization of debts will go a long way to reduce the stress on working capital requirements. 5. Attempts should be made to make the payments of the creditors in time. This helps the business to build up good reputation and increases its bargaining power with respect to period of credit for payment and other conditions. 6. Attempts should be made to match the projected cash inflows and projected cash outflows. If they do not match, some of the payments should be postponed our purchases of certain avoidable items should be deferred.

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IMPORTANCE OF WORKING CAPITAL:

1. Adequacy of working capital creates a feeling of security and confidence:The proprietor of a concern or the officials of the company who can go home at night and can sleep in peace and comfort without worrying about how wages and salaries are going to be met the next day enjoy the position in business that can come only as a result of efficient management that has provided adequate working capital. 2. Adequacy of working capital is must for maintaining solvency and to

continue production:- It is essential that sufficient amount of funds be available to

purchase raw materials, payment of wage and salary bills, stock, finished goods and meet other administrative expenses. A manufacturing concern is bound to collapse in the absence of ready cash available to pay the bills for materials, direct labour, advertising and distribution expenses and other costs of doing business.

3. Creation of sound good-will:- It is a common experience of all prudent businessmen that sound goodwill can be maintained only by promptness in payment. The prompt payment of bills to suppliers of materials will not only ensure a continued but will establish credit for seasonal operation

4. Easy availability of cash discount:- Advantage may be taken of cash discounts in the purchase of raw materials or merchandise, resulting in a saving in interest charges on the amount of working capital employed.

5. Steady work for the employees and efficiency in production:- A continuous supply of raw materials and production means steady work for employees which raise their morale, increases their efficiency, lower costs and creates goodwill in the community. 16

6. Easy loans from the bank:- Banks are also favorably inclined in granting seasonal loans if the business is adequately financed in the first place and has good credit standing and trade reputation. In order to borrow from banks, a business must keep itself in fairly liquid condition. Thus the adequacy of working capital contributes a lot in raising the credit standing of company.

7. Facility of off- season purchasing:- Only concerns with adequate working capital can take advantages of purchasing the raw materials, coal and other factor supplies in a sharply advancing market, or in off/seasons periods, resulting in substantial savings where storage costs are not prohibitive. 8. Quick and steady return to the investor:- Everybody excepts quick return in his investments in the form of a withdrawal (in the case of an owner), or dividend (in the case of a share holder). In the case of insufficiency of working capital the profit to be retained in the business, but the case of their adequacy, ample dividend can be paid to the shareholder.

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WORKING CAPITAL CYCLE:

In any business there is bound to be a time lapse from the time funds are invested in business for buying raw materials and the cash is finally recycled back in the business through sales. This time span can be split into the following parts comprising the chronological sequence of events: Time required for conversion of cash into raw materials. Time required for conversion of raw materials into work-in-progress. Time spend in conversion of finished goods into debtors and bills receivables through sales. Time spend in conversion of finished goods into debtors into bills receivables through sales. Finally, the time taken to convert debtors and bills receivables into cash.

18

Credit Debtors Debtors Finished Goods

Work -inprogress

Crs. For purchase Cash

Raw Material Wages and Overheads

Crs. For expenses

19

Working capital cycle can also be represented in the following manner:

Receivable s

Work In Progress

Finished Goods

Raw Material

Cash/Bank

The cycle shows that the current assets are acquired either for resale or for conversion into finished goods which are converted into cash. Thus, once the cycle is complete, the current assets become cash. In other words, the current assets are self-liquidating in nature.

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CLASSIFICATION OF WORKING CAPITAL:

Working Capital Fixed Working Capital Variable Working Capital

Regular

Reserve Margin

Seasonal

Special

1. Fixed Working Capital:- As is apparent from the objective permanent is

that part of the capital which is permanently locked up in the circulation of the current asset and in keeping it in moving. For example, every manufacturing concern has to maintain stock of materials, work-inprogress, finished products, loose tools and equipments it also requires money for the payment of wages and salaries thought the years. Net working
capital minus fixed working capital will be the variable working also called as fluctuating working capital. i) Regular Working Capital is minimum amount of liquid capital needed to keep up the circulation of the capital from cash to inventories to receivable and back again to cash. This would include a sufficient cash balance in the bank to discount bills, maintain an adequate supply of raw material for processing, carry a sufficient stock of finished goods to give prompt delivery and effect the lowest manufacturing costs, and enough cash to carry necessary accounts receivable for the type of business engaged in. capital; it is

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ii)

Reserve margin is the excess over the need for regular working capital that should be provided for contingencies that arise at unstated periods. The contingencies include (a) rising price, which may make advisable to increase inventories (b) business depression, which may arise the amount of cash required to ride out usually stagnant periods (c) strikes, fires and unexpectedly serve competition, which use up extra supplies of cash (d) special operation such as experiments with products or with methods of distribution war contracts, to supply new business and the like, which can be undertaken only if sufficient funds are available which in many cases mean the survival of business.

2. Variable Working Capital: The variable working capital changes with the
volume of business. In many lines of business (e.g., Gur or Khandsari making an fur industry) operations are highly seasonal and as a result, working capital requirement vary greatly during the year. The capital required to meet the distinction between permanent and variable working capital should be raised in same way as fixed capital is procured, through a permanent investment of the owner or through long-term borrowing. As business expands, this regular capital will necessarily expand..

22

Variable Working Capital

A M O U N T

Fixed Working Capital

Period

23

The fixed working capital may not be fixed at all times. It may also increase depending on the size and growth of a business.

24

25

OBJECTIVES
To study the accounting system followed by Asoka Leyland To study accounts maintained through SAP(system application & product for data

processing of it To understand the flow of funds through working capital in such a way that the firm Recording transactions in journal and ledger Then posting it in ledger Preparation of final accounts To study regarding all the documents required for various transactions and the need

would always be able to meet its financial obligations when due. To understand the adequate working capital maintained for the operations of the

business

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27

RESEARCH METHODOLOGY

Financial research is a systematic design, collection and analysis of data & findings relevant to specific aspect of the company. The data was collected through financial statement like :

Annual Report Balance Sheet Profit & Loss A/C Other Articles

Along with the above sources the personal interview with official of the company also revealed some useful information required foot he project report.

The calculation were done for three consecutive year via, 2008 2009, 2009 2010, 2010 2011.

Working capital analysis itself is a techniques to asses the financial surrounding of the company. Methods like ratio analysis and balance sheet analysis also helps to study the financial condition of the organization.

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HYPOTHESIS

Hypothesis is tentative assumption made in order to draw out and test its logical imperial consequences. In most type of research the development of hypothesis plays on important role . Hypothesis should be very specific and limited to the place of research in hand because it has to be tested the role of the hypothesis is to guide the area research and keep him on the right track. Hypothesis is usually considered as the principles instrument in the research in this projector the following area has been formulated.

1) 2)

That there is efficient management of working capital of Bajaj still industries Nagpur. That there is various sources of working capital with respect Asoka Leyland Company Ltd.

3) 4) 5)

That there are various factors which affects in Working Capital. Sources of the fund are proper. The Company is having equitable working capital control.

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31

Balance Sheet of Asoka Leyland Industries Mar '11 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities 2.35 2.35 0.99 0.00 47.84 0.00 51.18 25.75 27.21 52.96 104.14 Mar '11 12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 69.68 35.41 34.27 13.04 0.28 61.42 23.63 1.02 86.07 11.46 17.54 115.07 0.00 55.62 2.89 58.51 56.56 0.00 104.15 4.84 213.58

------------------- in Rs. Cr. ------------------Mar '10 12 mths 2.20 2.20 0.00 0.00 44.12 0.00 46.32 23.79 22.23 46.02 92.34 Mar '10 12 mths 61.40 29.68 31.72 10.36 0.28 45.80 15.56 2.88 64.24 10.83 20.49 95.56 0.00 43.61 1.98 45.59 49.97 0.00 92.33 2.67 210.54 Mar '09 12 mths 2.20 2.20 0.00 0.00 34.39 0.00 36.59 8.80 21.93 30.73 67.32 Mar '09 12 mths 55.91 25.36 30.55 4.60 1.65 27.39 16.02 3.30 46.71 5.56 12.80 65.07 0.00 31.42 3.13 34.55 30.52 0.00 67.32 1.62 166.31 Mar '08 12 mths 2.20 2.20 0.00 0.00 19.79 0.00 21.99 14.00 20.43 34.43 56.42 Mar '08 12 mths 41.58 27.11 14.47 9.23 1.65 37.46 18.04 3.41 58.91 6.13 10.98 76.02 0.00 42.19 2.77 44.96 31.06 0.00 56.41 3.76 99.94 Mar '07 12 mths 2.20 2.20 0.00 0.00 13.43 0.00 15.63 14.76 15.01 29.77 45.40 Mar '07 12 mths 39.79 27.95 11.84 3.60 5.02 29.89 15.92 0.91 46.72 9.24 2.12 58.08 0.00 31.20 1.94 33.14 24.94 0.00 45.40 5.57 71.05

Working Capital Statement of Asoka Leyland Company Industries

32

(Rs. In Crore)

Particular A. CURRENT ASSETS Inventories Sundry Debtors Cash and Bank Balance Loans and Advances Total Current Assets

2011 (Mar) 61.42 23.63 1.02 11.46 97.53

2010 (Mar) 45.80 15.56 2.88 10.83 75.07

2009 (Mar) 27.39 16.02 3.30 5.56 52.27

B. CURRENT LIABILITIES Current Liability Provisions Total Current Liability 55.62 2.89 58.51 43.61 1.98 44.59 31.42 3.13 34.55

C. Net Working Capital (A B) 39.02 30.48 17.72

1) Ratio Analysis of Working Capital of Asoka Leyland Company Industries from 2009 2010 and 2011. 33

The Ratio of Gross Working Capital to Asset Determined the relationship between gross working capital to total asset. Gross working capital Represent total amount of investment in current asset. Total asset include current asset and Fixed Asset. Gross Working Capital Gross W. C. to total Assets = Total Assets Year 2011 : 58.39 x 100 104.15 = Year 2010 : 34.83 x 100 92.33 = Year 2009 : 26.73 x 100 67.32 = 39.71% 37.72% 56.06% x 100

Gross Working Capital To Total Asset

34

60 50 40 30 20 10 0 1 2011 2 2010 3 2009 Series1

An Examination of the table reveals the following :a) Gross Working Capital to total asset ratio varied between 39.71 to 56.06 during three years period of review.

2) CURRENT RATIO :. 35

Current Assets Current Ratio = Current Liability Year 2011 : 92.53 = 58.51 = Year 2010 : 75.07 = 44.59 = Year 2009 : 52.27 34.55 = 1.51% 1.68% 1.67%

Current Ratio :
36

1.7 1.65 1.6 Series1 1.55 1.5 1.45 12011

2010 2

32009

INTERPRETATION :Ideal Current Ratio is 2:1 Thus from the above we can say that company was almost in its ideal position in the year 2009 2010, but current ratio in 2010 2011 has decrease.

3) Gross Working Capital to fixed Asset Ratio : 37

The Ratio described the relationship between gross working capital and fixed assets. Gross Working Capital Gross W. C. and Fixed Asset Ratio = Fixed Asset Year 2011 : 58.39 x 100 14.78 = Year 2010 : 34.83 x 100 11.17 = Year 2009 : 26.73 x 100 08.78 = 304.44% 311.82% 395.06% x 100

Gross Working Capital to fixed assets ratio :-

38

400 300 200 100 0 Series1 Series1

2011

2010

2009

a) Gross Working capital to Fixed Asset Ratio is decrease row 304.44 in 2009 to 395.06 in 2010. b) The fixed asset were continually decrees from 0.78 crore in 2009 Rs. 395.06 crore in 2011.

4) Sales to Networking Capital Ratio :

39

The Ratio show the number of items, working capital is turnover in stated period. This ratio can also be called as working capital turnover ratio. The higher the ratio, the lower is the amount of networking capital. Sales Sales to Net Working Capital = Net Working Capital Year 2011 : 22.08 x 100 39.02 = Year 2010 : 22.45 x 100 30.48 = Year 2009 : 24.06 x 100 17.72 = 135.78% 73.65% 56.59% x 100

Sale to Net Working Ratio :

40

140 120 100 80 60 40 20 0 1 2011 2 Series1

2010

3 2009

5) Inventory to Net Working Capital Ratio : 41

The Ratio is calculate to as certain leave of inventories. Increased in the value of sale requires proportionate increase in inventory should not exceed the amount of net working capital an equal ratio disables. Inventory Inventory to Net Working Capital Ratio = Net Working Capital Year 2011 : 61.42 x 100 39.02 = Year 2010 : 45.80 x 100 30.48 = Year 2009 : 27.39 x 100 17.72 = 154.57% 150.26% 157.41% x 100

Inventory to Net Working Capital Ratio : 42

158 156 154 152 150 148 146 1 2011 Series1 2 2010 3 2009 Series1

The Ratio of inventories to Net Working Capital varied between 154.57 to 157.41 during the three years review period the inventory to Net Working Capital ratio is highest of 157.41.

6) Inventory to Current Asset Ratio : 43

The Ratio explain the relationship of inventory to current asset. Inventory Inventory to Current Asset Ratio = Current Asset Year 2011 : 61.42 x 100 97.53 = Year 2010 : 45.80 x 100 75.07 = Year 2009 : 27.39 x 100 52.27 = 52.40% 61.00% 62.98% x 100

Inventory to Current Asset Ratio :

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70 60 50 40 30 20 10 0 12011 2 2010 Series1

2009 3

Interpretation : The Ratio is highest at 62.98 in 2011 an lower at 52.14 in 2009. The inventory to current ratio is continuously increasing year by year.

7) Net Working Capital to Total Asset Ratio : 45

Net Working Capital Net Working Capital Ratio = Total Asset Year 2011 : 39.02 104.15 = Year 2010 : 30.48 92.33 = Year 2009 : 17.72 67.32 = 0.263 0.330 0.375

Net Working Capital to Total Asset Ratio : 46

2011

2009

2 2010 3 2009

Interpretation : Higher the ratio, higher will be the effective utilization of working capital. Net Working capital ratio in 2010 less then that of the year 2010 and 2009. Thus we can says that working capital in the year 2010 - 2011 has not been effectively utilized.

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DATA ANALYSIS
The data serve as the bases or raw material for analysis. Data collection is a term used to describe a process of preparing and collecting data - for example as part of a process improvement or similar project. The purpose of data collection is to obtain information to keep on record, to make decisions about important issues, to pass information on to others. Primarily, data is collected to provide information regarding a specific topic. There are mainly 2 types of data:-

1. PRIMARY DATA This includes the data collected directly by the researcher. They are those which are collected afresh and for the first time and thus happen to be original in character. 2. SECONDARY DATA This includes data that are readily available which is used This by the researcher for studies. This are those which are collected by some one else and which have already been passed through the statistical process.

SAP (System Application & Product For Data Processing)

Financial excellence is achieved when resources, people, and technology are leveraged to ensure strong cash flow and liquidity, compliant and accurate financial reporting, while maximizing the profitability. With SAP solutions, companies can accurately manage liquidity and cash, streamline processes and lower costs, ensure the financial health of the enterprise, as well as reduce the cost of compliance and risk in the face of a challenging economy and regulatory landscape. SAP ERP Financials, an application of SAP Business Suite, helps deliver greater insight and visibility across organizations, operational efficiency and effectiveness, and flexibility to help you enable efficient and compliant accounting and reporting. No matter the industry or size of 49

your business, you can implement only the software you need to solve your unique business challenges in your own time and without expensive upgrades.

ADVANTAGES OF SAP

Gain efficiency in finance to streamline financial processes, such as reporting cycles,

receivables, and payments

Drive strategy and growth and improve the quality of business decisions for all

employees, bridging analysis and planning with strategic execution

Manage risk and compliance through embedded controls and real-time monitoring and

exception-based analysis

Optimize working capital to accelerate cash flows, manage liquidity, and improve control

over cash balances The following are the sources from where I have collected my data:

PRIMARY DATA: SAP has been planned to use from 2007-2008 but it has started utilizing in almost full swing in BSIL from 2009-2010 SAP is one of the ERP. But It is the leader of all ERP In BSIL there are different modules for different department such as sales, purchase, finance etc. In BSIL My SAP ecc 5.0 is used SAP is very useful and has various advantages such as time saving, minimum risk, no need for repeated entries When raw materials are purchased, the purchase department makes entries in journal through SAP and that entry automatically is also seen in financial books as well. thus there is no need for finance department to make repeated entries 50

 IN CASE OF INPUT:1. 2. 3. 4. 5. Firstly purchase ( quotations) are made materials management make entries in SAP Then bills are made by finance department then payment is made then entries of payment is made

IN CASE OF OUPUT:1. 2. 3. Quotations are taken and Advances are received sales are made sales department make entries in sap

4. that amount is checked and the amount is collected by finance department and then receipts are issued

SECONDARY DATA:1. BSIL Balance sheet (2010-2011 ) 2. Profit and loss Statement

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CONCLUSION

Working Capital Management involves deciding upon the amount and composition of current assets and how to finance these assets. The greater the relative proportion of liquid assets, the less the risk of running out of all cash, all other things being equal. However the profitability also will be less. Similarly, the larger the proportion of long-term funds to finance the firm, the lesser the risk of cash insolvency all other things being equal. However, the profit of the firm is likely to be less. Thus, while making decisions about composition and the extent of current assets and financing the structure the firm has to resolve the trade off between the risk and profitability. Therefore in the working capital management , it is very much crucial to consider the assets and financial mixes. Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between a firm's shortterm assets and its short-term liabilities. 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.

Decision criteria
By definition, working capital management entails short term decisions - generally, relating to the next one year period - which are "reversible". These decisions are therefore not taken on the same basis as Capital Investment Decisions (NPV or related, as above) rather they will be based on cash flows and / or profitability. One measure of cash flow is provided by the cash conversion cycle - the net number of days from the outlay of cash for raw material to receiving payment from the customer. As a management tool, this metric makes explicit the inter-relatedness of decisions relating to inventories, accounts receivable and payable, and cash. Because this number

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effectively corresponds to the time that the firm's cash is tied up in operations and unavailable for other activities, management generally aims at a low net count.

In this context, the most useful measure of profitability is Return on capital (ROC). The result is shown as a percentage, determined by dividing relevant income for the 12 months by capital employed; Return on equity (ROE) shows this result for the firm's shareholders. Firm value is enhanced when, and if, the return on capital, which results from working capital management, exceeds the cost of capital, which results from capital investment decisions as above. ROC measures are therefore useful as a management tool, in that they link short-term policy with long-term decision making

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SUGGESTION

Bajaj Steel Industries should trust to update the technology Bajaj Steel Industries should constructed of full resources utilization. Bajaj Steel Industries should constructed on there look product and price consistency. Bajaj Steel Industries should relia on cost efficiency and strong financial resources. Operating expenses can be reduced by making effective operating system.

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LIMITATIONS
1) 2) 3) 4) Limited manual were available. Positive performance of working capital will reflact on the financial health. Study is best of Bhandara Region only. Study period is very low (two months)

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BIBLOGRAPHY
Books:Financial Management- G. Sudarshan Reddy Management accounting- R. S. N. Pillai AND Bagavathi Financial management- Rustogi Financial Management P. V. Ratnam Financial Management P. V. Kulkarni

ANNUAL REPORT ARTICALS

Web sites: 1. www.bajajngp.com 2. www.google.com

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