FINANCIAL PERFORMANCE USING WORKING

CAPITAL OF VAULTUP TECH

TABLE OF CONTENTS
Sl.No.
1.

Contents

Page No.

INTRODUCTION:INDUSTRY PROFILE
WORKING CAPITAL MANAGEMENT
OBJECTIVES OF THE STUDY

2.

LITRATURE REVIEW

3.

RESEARCH METHOLODOGY

4.

DATA ANALYSIS AND INTERPRETATION

5.

SUMMARY OF FINDING AND RECOMMENDATIONS

6.

CONCLUSION AND BIBLIOGRAPHY

LIST OF TABLES

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Table No.

Contents

1.

Comparative Profit & Loss Account

2.

Trend analysis (Liability Side)

3.

Trend Analysis (Asset Side)

4.

Cash Flow Analysis

5.

Cash Flow Statement

6.

Profit & Loss Account

7.

Balance Sheet

LIST OF CHARTS
Chart No
1.
2.

Contents
Main Department Sales
Other Department sales

EXECUTIVE SUMMARY
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Page No.

PIC N FRAMES TECHNOLOGIES is the professionally managed software and web

development company with a dedicated and highly qualified team of professionals who
are committed to provide demonstrative yet eye catching software products to meet
business requirements of our clients worldwide and to further expand the horizon of their
business with our innovative creation loaded with latest technologies.
The major purpose of the study is to analyze the working capital management of PIC N
FRAMES TECHNOLOGIES by considering the annual report of two years. The financial
statement explains the trend analyzes and the ratio analyzes along with the comparative
balance statements.
Working capital is one of the most difficult financial concepts to understand for the smallbusiness owner. In fact, the term means a lot of different things to a lot of different
people. By definition, working capital is the amount by which current assets exceed
current liabilities. It involves the relationship between a firms short term assets and its
short term liabilities.
Funds needed for short term needs for the purpose like payment of wages and other day to
day expenses are known as working capital. The goal of working capital management is
to ensure that the firm is able to continue its operation and that it has sufficient cash flow
to satisfy both maturing short term debt and upcoming operational expenses. Working
capital is primarily concerned with inventories management, receivable management,
cash management and payable management.
The study involved few personal interviews with the financial heads of the company and
through observation methods. Company annual reports were being evaluated and working
capital management was being analyzed from it. For the purpose of the study convenience
sampling technique has been used.
The study has shown that the working capital of the company has improved as the current
asset is more than that of the current liabilities.

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CHAPTER -1
INTRODUCTION

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COMPANY PROFILE
4. COMPANY PROFILE
1. About Us
VaultUP Technologies provides complete Web Designing & Development solutions. Its
Corporate office in Rajpura, It offers a wide range of IT Solutions. We possess latest
available and usable technologies and tools for every domain. Latest and newest gadgets
and methodologies are used here to avail our clients with the best and latest solution.
Other than this we also have teams of highly experienced and knowledgeable
professionals having great expertise in their domain in order to deliver robust and user
friendly customizable solutions exactly according to the client needs. We care about your
needs, and are dedicated to delivering a solution that works for you and your industry.
2. Mission
To combine aggressive strategic marketing with quality products and services at
competitive prices to provide the Secured & Best IT Solutions for consumers.
Emphasizing on an ideal mix of tactical positioning for Web Application Development,
absorbing content of Web Application Development, Design structure of the Web
Application Development and above all the application development itself, which ensures
the most comprehensive and engaging online experience. Offer affordable, professional,
cost-effective, reliable and timely software and web development outsourcing services. To
set new standards in online communication and service is our strength. We want to
provide our clients, the latest Website developments and best Website designing services
to solve complex business issues.

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3. Description
First IT Company in Rajpura (40 Minutes Drive from Chandigarh) which provides a
solutions in Web Development, Web Designing, Software Development, Apps
Development, Internet Marketing, SEO, SMO, Bulk SMS, PPC. We are one of the Best
Provider in Web Designing & Web Development Company offering complete packages
of IT Services.
4. Services
4.1 Web Designing: VaultUP Technologies is an ace at developing websites. We are one of
the leading web development. Web development is a broad term for the work involved in
developing a web site for the Internet (World Wide Web) or an intranet (a private
network). Web development can range from developing the simplest static single page of
plain text to the most complex web-based internet applications, electronic businesses, and
social network services.
4.2 Web Development: VaultUP Technologies offers a complete package of affordable
website design and development. From the initial process of taking inputs from clients.
Web design encompasses many different skills and disciplines in the production and
maintenance of websites. The different areas of web design include web graphic design;
interface design; authoring, including standardized code and proprietary software; user
experience design; and search engine optimization.
4.3 SEO/SMO: SEO refers to search engine optimization, or the process of optimizing a
website so that people can easily find it via search engines like Google. If you want to
generate traffic through search, its best to do keyword research before you start writing.
This way, you can focus on keywords for which a certain amount of search volume

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already exists in other words, write toward topics that people are already searching for
information about.
4.4 Mobile Apps: Mobile Web Site Design Andriod Mobile application development
iphone/ipad application. A mobile app, short for mobile application, or just app, is
application software designed to run on smartphones, tablet computers and other mobile
devices. such as the Apple App Store, Google Play, Windows Phone Store, and
BlackBerry App World. Mobile apps were originally offered for general
4.5 Bulk SMS:VaultUP Technologies offering bulk sms mobility services. This has opened
up vibrant new vistas for the mass communication industry through mobile phones. With
technological advancements and the increasing accessibility of mobile phones, sending
bulk SMS is an easy way to reach people without spending too much money. We help you
to redefine archetypes and revamp your SMS campaign with SMS marketing.
4.6 AMC & Maintenance:VaultUP Technologies provides AMC & maintenance to your
computers, Laptops & all peripherals .we can provide assistance in hardware drivers
upgrades and configuration printer and scanner installations,, software installations,
webcam and peripherals installations, window installations and optimization(with data
backup and restore if necessary).

COMPANY OVERVIEW

PIC N FRAMES TECHNOLOGIES

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COMPANY OVERVIEW
We are pleased to introduce ourselves as the professionally managed software and web
development company with a dedicated and highly qualified team of professionals who
arecommitted to provide demonstrative yet eye catching software products to meet
businessrequirements of our clients worldwide and to further expand the horizon of their
businesswith our innovative creation loaded with latest technologies.
We cater to all the web based needs of our clients with powerful web solutions right
fromtheconception to the completion of the project. The internet promotion services make
sure thatthe websites rank well on the popular search engines and gets maximum
exposure over theinternet. This is the reason why PIC N FRAMES Technologies is called
the 'One Stop Shop'for all your business needs.
When PIC N FRAMES Technologies web professionals do their job, results speak
themselves. Feel free to check our web site design portfolio and see the quality yourself.
Wedo web sites which make your visitors think about you: "Those guys are good!"Our
competent graphic designers provide creative designs for your logos, brochures, corporate
identity and presentations to your outmost satisfaction.You'll never interact with
automated support systems. Managers and customer carerepresentatives will contact you
personally making sure they understand your needs. You'llcommunicate with people who
are able to get inside your problem and find the propersolution..
We won't leave you alone if you need us after your project is complete. We realize you
mayneed additions, updates and enhancements at a later time. At time, we will be always
withyou to help in your project additions.

The company has:A team of highly qualified professional consists of php developers, ASP developers,
JAVA developers, designers, SEO experts and professionals of advanced
technologies like Joomla, Drupal, Smarty, .NET Nuke, etc.
The company team is committed to deliver the best of the project within stipulated
time frame to our clients at competitive pricing.
The company is conducting advanced training programmes for professionals with
Placement assurance.
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COMPANYS SERVICES & FUNCTIONAL AREAS:Web design and development.

Custom Software Development
Graphic Designing
Multimedia
Search Engine Optimization
Content Management Systems
Open source Customization
E-Commerce
Corporate Identity
Software Quality Testing
Advanced Training Program
LATEST TRENDS:Content Management Systems
Rich user Interfaces
Modal Boxes (Light boxes, Slim boxes)
Font Replacements
Huge Typography
PNG Transparency
Media Blocks
Carousels
Search Engine Optimization
iPhone and Mobile Ready Web Application
OUR VISION AND MISSION:
Some Important Security measures that we take in order to maintain and secure Application
Development are:

Only Management, Employees and special visitors having a valid photo id are
allowed to enter our premises.
Employees and Visitors have restricted access and arent allowed beyond specific
access points
Only Authorized and reliable users can gain access to our servers, networks and
workstations controlled through individual passwords.
All the emails received or sent are checked for viruses.
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Regular backup of all data and files.

Real time Spam protection and antivirus fordesktops and servers

WORKING CAPITAL
Management is an art of anticipating and preparing for risks, uncertainties and
overcoming obstacles. An essential precondition for sound and consistent assets
management is establishing the sound and consistent assets management policies
covering fixed as well as current assets. In modern financial management, efficient
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allocation of funds has a great scope, in finance and profit planning, for the most effective
utilization of enterprise resources, the fixed and current assets have to be combined in
optimum proportions.
Working capital in simple terms means the amount of funds that a company requires for
financing its day-to-day operations. Finance manager should develop sound techniques of
managing current assets.
MEANING:
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
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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 arethose 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.
Other types of assets are equally important i.e. CurrentAssets.
These types of 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.

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
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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.

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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. Moreover, the various
sources available for financing working capital requirements should be properly managed
to ensure that they are obtained and utilized in the best possible manner.

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.

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In case of a manufacturing company, the operating cycle is the length of time necessary to
complete the following cycle of events
1. Conversion of cash into raw materials
2. Conversion of raw materials into work-in-progress
3. Conversion of work-in-progress into finished goods
4. Conversion of finished goods into accounts receivables
5. 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 creditors avg. credit purchases per day.
OPERATING CYCLE OF MANUFACTURING BUSINESS
Realization

Sales

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Accounts Receivable

Cash

Finished Goods

Purchases
Production
Production
Raw Materials

Work-in-progress

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

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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.

Composition of working capital- Major Current Assets

1)

Cash in hand and cash at bank

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2)

Bills receivables

3)

Sundry debtors

4)

Short term loans and advances.

5)

Inventories of stock as:

a.

Raw material

b.

Work in process

c.

Stores and spares

d.

Finished goods

6)

Temporary investment of surplus funds.

7)

Prepaid expenses

8)

Accrued incomes.

9)

Marketable securities.

Major Current Liabilities

1)

Accrued or outstanding expenses.

2)

Short term loans, advances and deposits.

3)

Dividends payable.

4)

Bank overdraft.

5)

Provision for taxation , if it does not amt. to app. Of profit.

6)

Bills payable.

7)

Sundry creditors.
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The gross working capital concept is financial or going concern concept whereas net
working capital is an accounting concept of working capital. Both the concepts have their
own merits.
The gross concept is sometimes preferred to the concept of working capital for the
following reasons:
1.

It enables the enterprise to provide correct amount of working capital at correct

time.

2.

Every management is more interested in total current assets with which it has to
operate then the source from where it is made available.

3.

It take into consideration of the fact every increase in the funds of the enterprise
would increase its working capital.

4.

This concept is also useful in determining the rate of return on investments in

working capital.

The Goal of Capital Management is to manage the firm s current assets & liabilities, so
that the satisfactory level of working capital is maintained. If the firm can not maintain
the satisfactory level of working capital, it is likely to become insolvent & may be forced
into bankruptcy. To maintain the margin of safety current asset should be large enough to
cover its current assets.
Main theme of the theory of working capital management is interaction between the
current assets & current liabilities.

CLASSIFICATION OF WORKING CAPITAL

Working capital may be classified in two ways:
o

On the basis of concept.

On the basis of time.

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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.
The extra working capital needed to support the changing production and
sales activities, is called variable or functioning or temporary working capital.
Temporary working capital differs from permanent working capital in the sense that is
required for short periods and cannot be permanently employed gainfully in the business.
IMPORTANCE OR ADVANTAGE OF ADEQUATE WORKING CAPITAL

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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

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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

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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.
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 I Trade Cycles:
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 will needs lower amt. of working capital as compared to a firm having a low rate
of turnover.
Credit Policy:
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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.
Production Policy:
If the policy is to keep production steady by accumulating inventories it will require
higher working capital.
Earning Capacity 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.

Others FACTORS:

Operating efficiency.
Management ability.
Irregularities of supply.
Import policy.
Asset structure.
Importance of labor.
Banking facilities, etc.

CONCEPT OF WORKING CAPITAL:

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There are 2 concepts:

Gross Working Capital
Net Working Capital
Gross working capital: - It is referred as total current assets.
Focuses on,

Optimum investment in current assets:

Excessive investments impairs firm s profitability, as idle investment earns nothing.

Inadequate working capital can threaten solvency of the firm because of its inability to
meet its current obligations. Therefore there should be adequate investment in current
assets.

Financing of current assets:

Whenever the need for working capital funds arises, agreement should be made quickly.
If surplus funds are available they should be invested in short term securities.
Net working capital (NWC) defined by 2 ways,
Difference between current assets and current liabilities
Net working capital is that portion of current assets which is financed with long
term funds.
NET WORKING CAPITAL = CURRENT ASSETS CURRENT
LIABILITIES
If the working capital is efficiently managed then liquidity and profitability both will
improve. They are not components of working capital but outcome of working capital.
Working capital is basically related with the question of profitability versus liquidity &
related aspects of risk
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
Page 25 of 61

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.

Page 26 of 61

INTERNSHIP
ACTIVITIES

METHODS OF WORKING CAPITAL ANALYSIS

There are so many methods for analysis of financial statements used in companies. Here
the following techniques are being used to analysis the working capital management of
VAULTUP TECHNOLOGIES

Comparative size statement

Trend analysis
Cash flow statement
Ratio analysis

A detail description of these methods is as followsCOMPARATIVE SIZE STATEMENT

Page 27 of 61

When two or more than two years figures are compared to each other we call them
comparative size statements in order to estimate the future progress of the business, it is
necessary to look at the performance of the company. These statements show the absolute
figures and also show the change from one year to another.
Benefits of this method to the company To indicate the trends, these statements show the change in production, sales and
expenses.
To make the data simple and more understandable

TREND ANALYSIS
To analyze many years financial statements, this method is used. This indicates the
direction on movement over the long time and help in the financial statements.
Procedure for calculating trends1. Previous year is taken as the base year
2. Figures of the base year are taken as 100
3. Trend % are calculated in relation to base year.
Benefits It is beneficial to find out the long run changes
It is helpful in future forecasting.

CASH FLOW STATEMENT

Cash flow statements are the statements of changes in the financial position prepared on
the basis of funds defined in cash or cash equivalents. In short cash flow statement
summaries the cash inflows and outflows of the firm during a particular period of time.
Benefits for the company To prepare the cash budget
To compare the cash budgets
To show the position of the cash and cash equivalents.
Page 28 of 61

RATIO ANALYSIS
Ratio analysis is the process of the determining and presenting the relationship of the
items and group of items in the statements. Ratio can assist management in its basic
functions of forecasting, planning, coordination, control and communication.
Benefits to the company

Helpful in analysis of financial statements

Helpful in comparative study
Helpful in locating the weak spots of the company
Helpful in forecasting
Estimate about the trend of the business
Fixation of ideal standards
Effective control
Study of financial soundness

Objective of the study

To study the

TECHNOLOGIES
To find out different ratios related with working capital
To check the impact of cash flows on working capital of VAULTUP

TECHNOLOGIES
To know the current trend of Assets and Liabilities
To access the long term financial viability of company. To know whether the

various

proportions

of

working

capital

of

VAULTUP

management is constantly concerned about the overall profitability of the

VAULTUP TECHNOLOGIES (or )not.

To disclose to the extent possible other information related to the financial

statement users.
To provide reliable financial information those add,its in estimating the potential
of the enterprise.

Page 29 of 61

CHAPTER-2
REVIEW OF LITERATURE

Page 30 of 61

REVIEW OF LITERATURE

Eljelly, (2004): elucidated that efficient liquidity management involves planning and
controlling current assets and current liabilities in such a manner that eliminates the risk of
inability to meet due short-term obligations and avoids excessive investment in these assets.
The relation between profitability and liquidity was examined, as measured by current ratio and
cash gap (cash conversion cycle) on a sample of joint stock companies in Saudi Arabia using
correlation and regression analysis. The study found that the cash conversion cycle was of more
importance as a measure of liquidity than the current ratio that affects profitability. The size
variable was found to have significant effect on profitability at the industry level. The results
were stable and had important implications for liquidity management in various Saudi
companies. First, it was clear that there was a negative relationship between profitability and
liquidity indicators such as current ratio and cash gap in the Saudi sample examined. Second,
the study also revealed that there was great variation among industries with respect to the
significant measure of liquidity

Deloof,( 2003): discussed that most firms had a large amount of cash invested in working
capital. It can therefore be expected that the way in which working capital is managed will have
a significant impact on profitability of those firms. Using correlation and regression tests he
found a significant negative relationship between gross operating income and the number of
days accounts receivable, inventories and accounts payable of Belgian firms. On basis of these
results he suggested that managers could create value for their shareholders by reducing the
number of days accounts receivable and inventories to a reasonable minimum. The negative
relationship between accounts payable and profitability is consistent with the view that less
profitable firms wait longer to pay their bills.
Page 31 of 61

Ghosh and Maji, (2003): in this paper made an attempt to examine the efficiency of
working capital management of the Indian cement companies during 1992 1993 to 2001
2002. For measuring the efficiency of working capital management, performance, utilization,
and overall efficiency indices were calculated instead of using some common working capital
management ratios. Setting industry norms as target-efficiency levels of the individual firms,
this paper also tested the speed of achieving that target level of efficiency by an individual firm
during the period of study. Findings of the study indicated that the Indian Cement Industry as a
whole did not perform remarkably well during this period.

Shin and Soenen, (1998): highlighted that efficient Working Capital Management was
very important for creating value for the shareholders. The way working capital was managed
had a significant impact on both profitability and liquidity. The relationship between the length
of Net Trading Cycle, corporate profitability and risk adjusted stock return was examined using
correlation and regression analysis, by industry and capital intensity. They found a strong
negative relationship between lengths of the firms net-trading Cycle and its profitability. In
addition, shorter net trade cycles were associated with higher risk adjusted stock returns.

Smith and Begemann (1997): emphasized that those who promoted working capital
theory shared that profitability and liquidity comprised the salient goals of working capital
management. The problem arose because the maximization of the firm's returns could seriously
threaten its liquidity, and the pursuit of liquidity had a tendency to dilute returns.

Page 32 of 61

Chapter3
RESEARCH
METHODOLOGY

Page 33 of 61

RESEARCH
METHODOLOGY

Target
Working capital of VAULTUP TECHNOLOGIES
Sampling Unit
Working capital of VAULTUP TECHNOLOGIES at Rajpura.
Sampling Area

Rajpura

Sampling Size

Accounts of 2 years

Sampling Technique

Convenience Sampling
Page 34 of 61

Limitations of the study

Department heads were busy so time for interaction was less.

The entire financial position of the company cannot be disclosed.
Company provides only secondary data, so certain type of bias is in study.

SOURCES OF INFORMATION
Primary Data
The personal interview with senior officials and various members of finance and
accounts department and also with other departments and collected the data.
Secondary Data
Necessary for the study was available within the company itself. Other sources

Website
Textbooks

Page 35 of 61

Chapter 4
DAT ANALYSIS AND
INTERPRETATION

Page 36 of 61

COMPARATIVE P&L ACCOUNT

(For the year 2010-2011)
(Rs. in Crores)
FY 2011

FY 2010

% change

Net turnover

14095.2

10224.0

38

Other income

317.7

267.9

19

Total expenditure

10122.8

8155.3

24

Operating profit (PBIT)

4290.1

2336.6

84

Interest

228.6

218.3

Depreciation

610.0

563.1

Exceptional items

4.1

Profit before tax

3451.5

1559.3

121

Total tax expenses

1092.1

402.7

171

Net profit after total tax

2359.4

1156.6

104

Minority share

391.9

116.0

238

Page 37 of 61

Net profit

1967.5

1040.6

89

TABLE 2
TREND ANALYSIS
(For the liability side of 2010-2011)
Particulars
Current liability
Liability
Provisions
Total (A)

2011

2010

Base Trend %

Current Tend %

1266.86
183.20
1450.06

969.15
304.22
1273.37

100
100
100

130.73
60.21
113.87

Fixed liability
Share capital
91.69
Reserves
& 6138.35

91.69
4890.39

100
100

100
125.5

surplus
Loans
Def. tax liability
Total (B)
Total
liability

1979.67
584.38
7546.13
8819.50

100
100
100
100

149.09
99.68
129.39
127.15

2010

Base trend %

Current

2951.56
582.55
9764.15
11214.21

(A+B)

TABLE 3
TREND ANALYSIS
(For assets side of 2010-2011)
Particulars

2011

%
Fixed assets
Fixed assets
4582.79
Fixed assets held 14.33

3298.27
12.76

for disposable
Page 38 of 61

100
100

138.94
112.30

trend

Investments
Total (A)

4274.70
8871.82

3481.71
6792.74

100
100

122.79
130.60

Current assets
Stock
Interest accrued
Debtors
Cash
Loans
Total (B)
Total
assets

824.14
.70
576.48
116.38
824.69
2342.39
11214.21

750.73
1.46
413.45
155.58
705.54
2026.76
8819.50

100
100
100
100
100
100
100

109.77
47.94
139.43
74.80
116.88
115.59
127.15

(A+B)

TABLE 4
CAH FLOW ANALYSIS
(For 2010-2011)
(Rs in Crores)
Particulars
SOURCES OF CASH
Cash from operations
Increase in debts
Non operating cash flow
Decrease in cash and cash equivalent
Decrease in working capital
USES OF CASH
Net increase in investments
Net capital expenditure
Decrease in debts
Interest
Dividend
\]

TABLE 5
CASH FLOW STATEMENT

Page 39 of 61

FY 2011

FY 2010

1816.0
947.6
114.0
39.2
2916.8

1077.1
67.1
205.2
1349.4

647.1
1598.2
109.4
478.8
2916.8

549.2
399.5
53.3
112.7
165.8
1349.4

(For year 2010 2011)

(Rs in Crores)
Cash flow from operating 2011

2010

activities
Net profit before tax
Depreciation
Interest expenses
Interest income
Dividend income
Profit / loss on sale of fixed

1201.90
291.64
103.38
(29.48)
(38.04)
3.99

2189.26
317.91
111.84
(31.84)
(81.43)
(4.62)

assets (Net)
Profit on sale of long term (2.70)

(62.57)

investments(Net)
Profit on sale

current (49.41)

(7.27)

before

2449.01

1330.06

working capital changes

Trade and other receivables
Inventories
Assets held for disposal
Trade payables
Cash
generated
from

(314.56)
(73.41)
(1.57)
306.17
2365.64

(116.66)
(72.41)
0.97
159.70
1668.74

operations
Direct taxes paid(Net)
(632.97)
Net cash from operating 1732.67

(380.42)
1288.32

of

investments (Net)
Operating
profit

activities
Cash flow

from

investing

activities
Purchase of fixed assets
Sale of fixed assets
Purchase of investments
Sale of investments
Investments / advances in joint

326.4
(354.13)
(150.11)
(128.19)
(16.77)

410.5
(388.73)
(173.66)
(91.57)
(11.75)

ventures, subsidiaries & others

Interest received
(322.8)
Net cash from investing (301.75)

(255.21)
(231.24)

activities
Cash flow

5.65

from

financing 19.71

activities
Proceeds from borrowings
Repayments of borrowings

(75.41)
666.13
Page 40 of 61

(792.83)
53.64

Interest paid
Dividends paid
Corporate dividend tax
Dividend received
Net cash from financing

(1294.15)
3.37
74.29
39.37
(868.44)

24.74
1.79
55.28
86.32
(796.65)

activities
Net increase / decrease in cash

(140.78)

117.37

& cash equivalent

At beginning of year
At end of year

227.48
86.7

110.11
227.48

TABLE 6
PROFIT & LOSS A/C
of the year ending 2010-2011
(Rs. in Crores)

INCOME
Gross sales
Less- Excise Duty
Net sales
Interest & dividend income
Other income
Increase / decrease in stock
EXPENDITURE
Raw material consumed
Manufacturing expenses
Purchases of finished & other products
Payments to & provisions for employees
Selling, distribution, administration & other expenses
Interest
Depreciation
Profit before tax & exceptional items
Surplus on pre-payment of sales tax loan
Write back of provision for diminution
Profit before tax
Provision for current tax
Page 41 of 61

2011

2010

9607.97

7638.41

986.29
8603.59
113.27
168.49
(16.44)
868.91

985.80
6652.61
67.53
152.41
(43.48)
6829.07

2219.32
1744.33
321.16
459.40
1505.69
111.84
317.91
6679.65
2189.26
37.10
2226.36
(692.38)

1822.69
1580.34
240.15
407.64
1181.33
103.38
291.64
5627.17
1201.90
4.13
1206.03
(369.82)

Deferred tax
Profit after tax
Debenture redemption reserve no longer required
Investment allowance reserve no longer required
Balance brought forward from previous year
Profit available for appropriation
AppropriationsInterim dividend
Proposed dividend
Corporate dividend tax
General reserve
Balance carried to balance sheet

1.83
1535.81
38.56
0.05
878.37
2452.79

27.00
863.21
8.62
0.25
815.35
1687.43

252.10
35.36
1200.00
965.33
2452.79

183.35
25.41
600.00
878.37
1687.43

FY(2010-2011)

FY(2009-2010)

91.69
6138.35

91.69
4890.39

2291.00
660.56
2951.56
582.55
9764.15

1386.12
593.55
1979.67
584.38
7546.13

6770.97
3380.53
3390.44
1192.35
4582.79
14.33
4274.70

6114.12
3109.49
3004.63
293.64
3298.27
12.76
3481.71

0.70

1.46

TABLE 7
BALANCE SHEET
For the year ended 2011
(Rs in Crores)
SOURCES OF FUNDS
SHAREHOLDERS FUND
Share capital
Reserve & surplus
Loan funds
Secured loans
Unsecured loans
Deferred tax liabilities
TOTAL
APPLICATIONS OF FUNDS
Fixed assets
Gross block
Less depreciation
Net block
Capital work-in-progress
Fixed assets held for disposal
Investments
Current assets, loans & advances
Interest accrued on investments
Page 42 of 61

Inventories
Sundry debtors
Cash and bank balances
Loans and advances

824.14
576.48
116.38
824.69
2342.39

750.73
413.45
155.58
705.54
2026.76

1266.86
183.20
1450.06
892.33
9764.15

969.15
304.22
1273.37
753.39
7546.13

LessCurrent liabilities & provisions

Liabilities
Provisions
Net current assets
TOTAL

CAPITAL TURNOVER RATIO

(Amount in Rs.)
Capital Turnover Ratio
Year

Income From Services

Capital Employed

Ratio

2010

36,309,834

37,175,892

0.98

2011
53,899,084
2012
72,728,759
2013
55,550,649
Capital Turnover Ratio

53,301,834
70,231,061
56,473,652

1.01
1.04
0.98

Capital Turnover Ratio- By going through our calculation table & diagram Capital
Turnover Ratio, profit and loss accounts and balance sheets of PICNFRAMES the
following results can be drawn.
A) In the year 2009-2010 the capital turnover ratio is 0.98 times. This year, there is a
higher value of capital turn over and a shorter average collection period in comparison to
that of previous year. This is a good indication.
B) In the year 2010-2011 the capitals turnover ratio is 1.01 times. This year, the value of
capitals turnover is higher than the previous year due to decrease in average capital and
an increase in net sales.
C) In the year 2011-2012 the capital turnover ratio is 1.04 times This year, the value of
capital turnover is higher than the previous year due to decrease in average capital.

Page 43 of 61

D) In the year 2012-2013 the debtor turnover is 0.98 times and. This year, there is higher
value of capital turn over.
(CHIEF TECHNICAL OFFICER) - DEVELOPMENT DEPARTMENT
1- SAHIL KAPOOR
2- SARABJIT SINGH
3-SONU SOODH
HR DIRECTOR
SUMIT KUMAR SETHI1. CURRENT RATIO
(Amount in Rs.)
Current Ratio
Year

Current Assets

Current Liabilities

Ratio

2009
2010
2011
2012
2013

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

Interpretation
As a rule, the current ratio with 2:1 (or) more is considered as satisfactory position of the
firm.
When compared with 2012, 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 PICNFRAMES.
The sundry debtors have increased due to the increase to corporate taxes.
In the year 2012, the cash and bank balance is reduced because that is used for payment
Page 44 of 61

of dividends. In the year 2013, 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.
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.

Page 45 of 61

COMPARATIVE BALANCE SHEET OF PIC N FRAMES (2007-09)

PARTICULARS
YEAR
(07-08)
YEAR
(08-09)
INC. /DEC.
(AMOUNT)
INC. /DEC.
(%AGE)
CURRENT
ASSETS

INVENTORY
147.53
161.42
13.89
9.42
DEBTORS
34.38
33.44
(.94)
(2.73)
CASH & BANK
39.42
28.61
(10.81)
(27.42)
OTHER ASSETS
48.67
24.35
(24.32)
(49.97)
LOANS &ADV.
140.36
152.77
12.41
8.84
TOTAL

410.38
400.60
(9.78)
(2.38)
FIXED ASSETS
1519.44
1962.75
443.31
29.175
INVESTMENTS
945.96
1118.81
172.85
18.27
SHAREHOLDER
FUNDS

SHARECAPITAL
247.10
147.10
(100)
(40.47)
RESERVES
1259.66
1377.82
118.16
9.38

PARTICULARS

YEAR
(08-09)

YEAR
(09-10)

INC. /DEC.
(AMOUNT)

INC. /DEC.
(%AGE)

CURRENT
ASSETS
INVENTORY

161.42

208.37

46.95

29.08

DEBTORS

33.44

39.02

5.58

16.69

CASH & BANK

28.61

50.73

22.12

77.31

OTHER ASSETS

24.35

23.69

(.66)

(2.71)

LOANS &ADV.

152.77

340.69

187.92

123

TOTAL

400.60

662.50

261.9

65.38

FIXED ASSETS

1962.75

2052.26

89.51

4.56

INVESTMENTS

1118.81

1132.05

13.24

1.18

SHARECAPITAL

147.10

155.17

8.07

5.49

RESERVES

1377.82

1449.32

7.15

5.19

TOTAL

1524.92

1604.49

15.22

.99

SECURED

1052.06

1191.16

13.91

13.22

UNSECURED

595.16

592

(3.16)

(.53)

TOTAL

1647.22

1783.16

10.75

.65

C. LIABILITIES

222.28

188.21

(34.07)

(15.32)

PROVISIONS

81.44

34.30

(47.14)

(57.88)

TOTAL

303.72

222.51

(81.21)

(26.74)

SHAREHOLDER
FUNDS

LONG-TERM
FUNDS

LIABILITIES

TOTAL
1506.76
1524.92

18.16
1.21
LONG-TERM
FUNDS

SECURED
579.53
1052.06
472.53
81.53
UNSECURED
602.85
595.16
(7.69)
(1.276)
TOTAL
1182.38
1647.22
480.22
40.61
LIABILITIES

C. LIABILITIES
157.54
222.28
64.74
41.09
PROVISIONS
28.36
81.44
53.03
187.16
TOTAL
185.90
303.72
117.77
63.43

In the year 2007-09 there is decrease in working capital due to steep rise in current
liabilities & provisions. As far financial position is concerned there is increase in capital &
long-term funds more than increase in fixed assets. It implies that a part of long-term funds
is used for financing a part of working capital as well. It reflects a good financial position
due to increase in reserves & surpluses.
COMPARATIVE BALANCE SHEET OF PIC N FRAMES (2008-2010)

In the year 2008-10, there is an improvement in working capital since stock, loans &
advances have increased significantly. The financial position of the company is favorable.

CAMPARATIVE BALANCE SHEET STATEMENTS

2008-2010
INVENTORY

DEBTORS

CASH & BANK

OTHER ASSETS

LOANS &ADV.

8%

16%

5%

4%

FIXED ASSETS

0%
INVESTMENTS
4%

SHARECAPITAL

RESERVES

1%
2%

SECURED

22%

0%

1%
1%

UNSECURED

C. LIABILITIES

PROVISIONS
35%

CAMPARATIVE BALANCE SHEET STATEMENTS

2007-2009
INVENTORY

DEBTORS

CASH & BANK

OTHER ASSETS

LOANS &ADV.

2%1% 5%
10%

FIXED ASSETS

37%

INVESTMENTS

SHARECAPITAL

2%

RESERVES
6%
4%
8%

UNSECURED

C. LIABILITIES8% PROVISIONS
0%

16%

2%

SECURED

COMPARATIVE BALANCE SHEET OF PICNFRAMES (2009-2011)

PARTICULARS

YEAR
(09-10)

YEAR
(10-11)

INC. /DEC.
(AMOUNT)

INC. /DEC.
(%AGE)

INVENTORY

208.37

224.31

15.94

7.65

DEBTORS

39.02

45.94

6.92

17.73

CASH & BANK

50.73

30.88

(19.85)

(39.12)

OTHER ASSETS

23.69

.86

(22.83)

(96.36)

LOANS &ADV.

340.69

518.93

178.24

52.31

TOTAL

662.50

820.92

158.42

23.91

FIXED ASSETS

2052.26

2011.95

(40.31)

(1.96)

INVESTMENTS

1132.05

1101.71

(30.34)

(2.68)

SHARECAPITAL

155.17

155.30

.13

.08

RESERVES

1449.32

1461.25

11.93

.82

TOTAL

1604.49

1616.55

12.06

.75

SECURED

1191.16

845

(346.16)

(29.06)

UNSECURED

592

906.28

314.28

53.08

TOTAL

1783.16

1751.28

(32.32)

(1.81)

C. LIABILITIES

188.21

191.59

3.38

1.80

PROVISIONS

34.30

74.31

40.01

116.64

TOTAL

222.51

265.90

43.39

19.50

CURRENT
ASSETS

SHAREHOLDER
FUNDS

LONG-TERM
FUNDS

LIABILITIES

In the year 2009-11, the balances of cash & other current assets have reduced while loans &
advances have increased. In current liabilities, provisions have riser too much, thus
working capital has reduced as compare to previous year. The long terms funds have
reduced,Still the companys overall performance is good.
COMPARATIVE BALANCE SHEET OF PICNFRAMES (2010-2012)
PARTICULARS

YEAR
(10-11)

YEAR
(11-12)

INC. /DEC.
(AMOUNT)

INC. /DEC.
(%AGE)

INVENTORY

224.31

254.28

29.89

0.1332

DEBTORS

45.94

42.71

(3.23)

(0.0703)

68.83

37.95

1.228

CURRENT
ASSETS

CASH & BANK

30.88

OTHER ASSETS

.86

.74

(.12)

(0.139)

LOANS &ADV.

511.76

124.92

(386.84)

(0.7559)

TOTAL

813.75

491.48

(322.27)

(0.396)

FIXED ASSETS

2021.36

2498.22

485.86

0.241

INVESTMENTS

1101.71

1010.97

(90.74)

(0.0008)

SHARECAPITAL

155.30

179.40

24.1

0.155

RESERVES

1461.25

1842.29

381.04

0.260

TOTAL

1616.64

2021.76

405.12

0.250

SECURED

845

649.78

(195.22)

(0.23)

UNSECURED

906.28

619.90

(286.38)

(0.315)

TOTAL

1751.28

1269.68

(481.6)

(0.274)

SHAREHOLDER
FUNDS

LONG-TERM
FUNDS

LIABILITIES
C. LIABILITIES

191.59

276.07

84.48

0.440

PROVISIONS

74.31

71.34

(2.97)

(0.039)

TOTAL

265.9

347.41

81.51

0.306

In recent year, a sum of Rs.379 crores shown as loan & advances to the subsidiary of the
company named Ambuja cements Rajasthan Ltd, as a result the current assets shows
decreasing amount. As current liabilities has increased which result in reduced in working
capital as compared to previous year. As the amount of fixed assets is more than long-term
loan, which show that, the part of fixed assets is financed from working capital.

COMPARATIVE BALANCE SHEET 2010-2012

INVENTORY

DEBTORS

1% 3% 2%
CASH & BANK11%
OTHER ASSETS LOANS &ADV.

FIXED ASSETS INVESTMENTS

8%
31%
6%

6%

SHARECAPITAL RESERVES SECURED

4%
0%
6%

UNSECURED

C. LIABILITIES PROVISIONS
3%

19%

COMPARATIVE BALANCE SHEET 2009-2011

INVENTORY

DEBTORS

CASH & BANK

OTHER ASSETS

LOANS &ADV.

RESERVES

SECURED

2% 4%
9%

FIXED ASSETS

INVESTMENTS

28%
SHARECAPITAL

0%

UNSECURED

23%

13%
C. LIABILITIES
PROVISIONS
7% 0% 0% 1% 0% 12%

Chapter 5
FINDINGS AND RECOMMENDATIONS

FINDINGS

In 2011 there is increase in current assets by 24% than 2010 and there is increase in current
liability by 17%, because of greater increase in current assets than in current liabilities, the
position of Working Capital has improved.
The % of fixed assets has come down in 2011 from 2010
As per current ratio firm is able to pay its current liability
Quick ratio presents a better test of short term financial position, which shows better
working capital position of the firm
Debt equity ratio and debt to total fund ratio presents protection to long term lenders and
shows sufficient working capital in the firm
Gross profit and net profit have increased from previous year
Cash flow statement indicates outflow of cash in comparison to past year
Due to better long term and short term financial conditions firms working capital is
better than that of previous year.

RECOMMENDATIONS
The company must concentrate on the percentage of fixed assets in the coming years.
The company must keep on maintaining the firms debt and equity and debt to total fund
so as to maintain the working capital.
Apart from the topic recommendations, the billing sector must involve more number of
persons in order to reduce the rush.
The company should try to improve working capital turnover ratio by efficient utilization
of working capital.
The company should try to use more proprietors fund in current assets, so that they can
improve current assets to proprietors fund.
By using proprietors fund properly, the company can increase return on capital employed.

CHAPTER 6
CONCLUSION AND BIBLIOGRAPHY

CONCLUSION
1. The study is made on the topic financial performance using WORKING CAPITAL
analysis in VAULTUP TECH LTD.

2. The current and liquid ratio indicates the short term FINANCIALposition of VAULTUP
TECH LTD. whereas debt equity and proprietary ratio shows the long term financial
position.
3. Similarly, activity ratios and profitability ratios are helpful in evaluating the efficiency of
performance inVAULTUP TECH LTD.
4. The current ratio is above 1 in all the five years. The level of current assets and current
liabilities must be improved.

BIBLIOGRAPHY
COMPANY REPORTS

Annual reports of VAULTUP TECHNOLOGIES

2013-14
2014-15

BOOKS REFERRED

Khan, M.Y. and Jain, P.K., 2011, Financial Management, Tata McGraw-Hill, New

Delhi.
Sekaran, U. and Bougie, R., 2010, Research Methods for Business, New Delhi, Wiley-

India Edition, 5th edition.

2. Kothari, C.R., 1985, Research Methodology- Methods and Techniques, New Delhi,
Wiley Eastern Limited.

WEBLIOGRAPHY

http://en.wikipedia.org/wiki/itindustry
http://en.wikipedia.org/wiki/Workingcapital
http://en.www.google.com