EXECUTIVE SUMMARY

Indian Oil Corporation Limited, with a yearly turnover of about 2 Lac Corers is the biggest
Company in India in terms of sales. It has once again topped the Indian Companies in the
Fortune 500 list of Companies with a rank of 125. In such a large sized corporation the
common problem is the Receivable Management and formulating a sound Credit Policy and
Collection Procedure. In this fluctuating Oil Market it is very difficult to maintain the level of the
Sundry Debtors and hence the Profitability. Moreover the Private Companies are entering the Oil
Industry which has provided a tough competition for IOCL. In this study the Ratios are analyzed
to interpret the Financial Status of the Corporation and then it is compared with the market
Competitors. The Debtors of the Eastern Region has been analyzed in details and a few probable
solutions to the existing problems has been formulated
The intended growth strategy demands a strong financial position to build and sustain the growth
story. Any company whether industrial or trading requires the current assets for day to day
working of the unit and these current assets are often referred as working capital of the company
and is one of the major contributors in improving profitability of any organization and is a vital
component of success and survival i.e. both profitability and liquidity for the organization.
So looking at the importance of the working capital and working capital management, the
project was aimed to assist the company to analyze its present efficiency in terms of managing
working capital and assessing the future working capital requirement and assigning to identify
the major loopholes in various processes which are having or can have an adverse effect on the
working capital of the company and suggesting some of the important ways to handle those
condition.
The project started with understanding the company process and then reviewing the past
financial performances and working capital efficiency with the help of ratio analysis. The next
step was to see the operating cycles and the process of forecasting working capital and then
finding out the sources the company uses to raise these funds. The project also focuses on the
prevailing policies related to inventory, receivable, cash and payable management. The analysis
resulted in assessing the working capital requirement problem in the system of recording and
reporting of various data related to policy formulation and better working capital management.
There is an urgent need to develop a formal process of credit analysis of the existing and more
importantly the new customer to develop more specific credit terms and the most importantly a
proper monitoring and controlling system for a better management of receivables.
Managing working capital has always been a challenge for the big companies and IOCL is not an
exception to this.