WCM

SINTECH PRECISION PRODUCTS LIMITED
C-189 & 190, Site No. 1, B.S. Road, Ind. Area, Ghaziabad [U.P.]
Phone No.: 0120-2866320/21,3290635/37/38 Fax No. 0120-2867715
E-mail: marketing@sintechpumps.com Web Site: www.sintechpumps.com
CERTIFICATE
This is to certify that the Summer-Training Project of

FINANCE Titled WORKING CAPITAL MANAGEMENT and ITS
APPRAISAL is an original work and that this work has not
been submitted anywhere in any form. My indebtedness to
other works/publications has been duly acknowledged at the
relevant places. The project work was carried from 1 st June,
2009 to 31st July 2009 in
SINTECH PRECISION PRODUCT
LIMITED.
Date: 31st July 2009

Signature
(Bulbul Sharma)
PGDM ( 2009-10)
Signature
(Mr. Sanjeev Garg)
Sintech Precision Product Limited
ACKNOWLEDGEMENT
Words are indeed inadequate to convey my deep sense of gratitude to all those who have
helped me in completing this summer project to the best of my ability. Being a part of this
project has certainly been a unique and a very productive experience on my part.
I am really thankful to Mr. Sanjeev Garg, Finance Manager for making all kinds of
arrangements to carry the project successfully and for guiding and helping me to solve all
kinds of quarries regarding the project work. His systematic way of working and
incomparable guidance has inspired the pace of the project to a great extent.
I would also like to thank my mentor and project coordinator, Mr. Parminder Singh, Asstt.
Manager, (Finance & Accounts) for assigning me a project of such a great learning
experience and acquainting me with real life project financing and appraisal.
I am very grateful to CA Neeta Sahu (Training & Placement Officer) AJAY KUMAR GARG
INSTITUTE OF MANAGEMENT, Ghaziabad. Who has given me the opportunity to do this
project in the Sintech Precision Product Ltd. and very thankful to all lecturers of AKGIM,
Ghaziabad for their useful guidance and advise.
This project would not have been successful without the help of Mr.N.C. Dhingra
(Chairman) Mr. Sahil Dhingra (Managing Director) of Sintech.
Last but not least I would like to thank all the employees of Sintech Precision Product Ltd.
who have directly or indirectly helped me with their moral support for the completion of my
project.
(Bulbul Sharma)
TABLE OF CONTENTS
Acknowledgement
Abstract
1.
Introduction
The problems
Purpose of study
Research methodology
Scope of the study
Data sources
Limitations
2.
Industry Profile
3.
1.
Indian Economy
2.
Pump industry
3.
Global Pump Market Outlook
Sintech Precision Product Ltd. An Overview
Companys Profile
Vision, Misson & Quality
Product Range
Sectoral Overview
4.
Conceptual Framework
Introduction to Working Capital Management
Significance of working capital management
Liquidity vs Profitability: Risk Return trade off
Classification of working capital
Types of working capital needs
Financing of working capital
Factors determining working capital requirements

8
Working capital cycle
Sources of working capital
10
Inventory management
11
Cash management
12
Receivables management
13
Managing payables (Creditors)
5.
Working Capital Analysis and its Appraisal
6.
Major Findings
7.
Conclusion
8.
Suggestions and Recommendations
9.
Bibliography
10.
Appendices
ABSTRACT
This project is based on the study of working capital
management in Sintech Precision Product Ltd. An insight view
of the project will encompass what it is all about, what it aims
to achieve, what is its purpose and scope, the various methods
used for collecting data and their sources, including literature
survey done, further specifying the limitations of our study and
in the last, drawing inferences from the learning so far.
Sintech Precision Products Ltd., founded in 1986, by an
enterprising technocrat Mr. N.C.Dhingra is recognized as one of
the largest pumping solutions provider today in India. Sintech is
an advanced pumping solution provider for water intensive
heavy industries. With a very diverse product portfolio, Sintech
provides solutions for multifarious applications like clear water,
process, slurry, liquid with suspended solids, sewage, acids,
alkalies, seawater and many more. Sintech has branch offices
and dealership network in throughout the nation as well as
catering the international market.
The working capital management refers to the management of
working capital, or precisely to the management of current
assets. A firms working capital consists of its investments in
current assets, which includes short-term assetscash and
bank
balance,
securities.
inventories,
receivable
and
marketable
This project tries to evaluate how the management of working

capital is done in Sintech through inventory ratios, working
capital ratios, trends, computation of cash, inventory and
working capital, and short term financing.
INTRODUCTION
The problems
Purpose of study
Research methodology
Scope of the study
Data sources
Limitations
INTRODUCTION:
The project undertaken is on WORKING CAPITAL MANAGEMENT
IN SINTECH PRECISION PROUCT LTD.
It describes about how the company manages its working
capital and the various steps that are required in the
management of working capital.
Cash is the lifeline of a company. If this lifeline deteriorates, so

does the company's ability to fund operations, reinvest and
meet capital requirements and payments. Understanding a
company's cash flow health is essential to making investment
decisions. A good way to judge a company's cash flow
prospects is to look at its working capital management (WCM).
Working capital refers to the cash a business requires for dayto-day operations or, more specifically, for financing the
conversion of raw materials into finished goods, which the
company sells for payment. Among the most important items of
working capital are levels of inventory, accounts receivable,
and accounts payable. Analysts look at these items for signs of
a
company's
efficiency
and
financial
strength.
The working capital is an important yardstick to measure the

companys operational and financial efficiency. Any company
should have a right amount of cash and lines of credit for its
business needs at all times.
This project describes how the management of working capital takes place
at
SINTECH.
The Problems
In the management of working capital, the firm is faced with two
key problems:
First, given the level of sales and the relevant cost

considerations, what are the optimal amounts of cash,
accounts receivable and inventories that a firm should

choose to maintain?
Second, given these optimal amounts, what is the most

economical
way
to
finance
these
working
capital
investments? To produce the best possible results, firms

should keep no unproductive assets and should finance with
the cheapest available sources of funds. Why? In general, it
is quite advantageous for the firm to invest in short term
assets and to finance short-term liabilities.
PURPOSE OF STUDY
The objectives of this project were mainly to study the

inventory,
cash
and
receivable at SINTECH PRECISION
PRODUCT LTD., but there are some more and they are 1
The main purpose of our study is to render a better understanding of

the concept Working Capital Management.
To understand the planning and management of working capital at

SINTECH.
To measure the financial soundness of the company by analyzing various

ratios.
To suggest ways for better management and control of working capital at

the concern.
RESEARCH METHODOLOGY
This project requires a detailed understanding of the concept Working

Capital Management. Therefore, firstly we need to have a clear idea of
what is working capital, how it is managed in SINTECH, what are the
different ways in which the financing of working capital is done in the
company.
The management of working capital involves managing inventories,

accounts receivable and payable and cash. Therefore one also needs to
have a sound knowledge about cash management, inventory management
and receivables management.
Then comes the financing of working capital requirement, i.e. how the
working capital is financed, what are the various sources through which it
is done.
And, in the end, suggestions and recommendations on ways for better

management and control of working capital are provided.
SCOPE OF THE STUDY

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

student.
Through this project I would study the various methods of

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

working capital.
The project would also be an effective tool for credit

policies of the companies.
This will show different methods of holding inventory and

dealing with cash and receivables.
This will show the liquidity position of the company and

also how do they maintain a particular liquidity position.
DATA SOURCES:
The following sources have been sought for the preparation
report:
Primary sources such as business magazines, current annual reports, book

on Financial Management by various authors and internet websites the
imp
amongst
them
being
www.sintechpumps.com,
www.indiainfoline.com, www.studyfinance.com .
2
Secondary sources like previous years annual reports, CMA Data, reports
on working capital for research, analysis and comparison of the data
gathered.
While doing this project, the data relating to working capital, cash
management, receivables management, inventory management and short
term financing was required.
This data was gathered through the companys websites, its corporate
intranet, Sintechs annual reports and CMA Data of the last three years.
A detailed study on the actual working processes of the company is also

done through direct interaction with the employees and by timely
studying the happenings at the company.
Also, various text books on financial management like Khan & Jain,
Prasanna Chandra and I.M.Pandey were consulted to equip ourselves
with the topic.
LIMITATIONS OF THE STUDY:
We cannot do comparisons with other companies unless and until we

have the data of other companies on the same subject.
Only the printed data about the company will be available and not the
backend details.
Future plans of the company will not be disclosed to the trainees.
Lastly, due to shortage of time it is not possible to cover all the factors
and details regarding the subject of study.
The latest financial data could not be reported as the companys websites
have not been updated.
INDUSTRY PROFILE
Indian Economy
Pump Industry
Global pump
growth driver
market
outlook
and
INTRODUCTION TO THE INDUSTRY

Indian Economy
In the beginning of the year 2008 the economy was on a higher growth path with the macroeconomic fundamentals inspiring confidence and a general optimism about the medium to
long term prospects of the economy. The economy was expected to slow down marginally
from the three years of 9% plus growth in real GDP reflecting a cyclical downturn in the
global economy and expectations were that the growth would be around 8.5%. High oil
prices and domestic inflation and worsening of international financial crisis which had
surfaced in 2007 have been definite areas of concern. But the global situation deteriorated
massively after mid-September 2008 following collapse of series of investment banks in the
US. This resulted in choking of credit and global crash in stock markets. Crisis of this
magnitude in industrialized countries has impact around the world especially in the emerging
market countries like India. The Indian economy which started with a strong economic
performance lost the momentum once the ripple effects of the gloom in the global economy
set in. Sensex in January 2008 was all time high at 21206, came down to around 9000
towards the end. The high cost of crude oil around US$ 150 per barrel in August, 2008
added to the countrys woes in terms of higher import bill. Rupee weakened against dollar
sliding down from Rs.39 in the beginning of the year to Rs.48 towards the end.
According to the estimates released by Central Statistical Organisation (CSO) the real GDP
growth was 7.6% in the second quarter of 2008-09 as compared to 9.3% of the
corresponding quarter of 2007-08, reflecting deceleration in growth of industry and services.
The agricultural production was below the estimate. The index of industrial production
recorded 3.9% as compared to 9.2% in the previous year. Indias balance of payments
position witnessed widening of trade deficit. The crisis in global financial markets deepened
since mid September, 2008 exerting pressure on financial markets and crashing of equity
markets leading to wide spread volatility. The global turmoil in the financial markets spilled
over the emerging markets. This has finally affected the manufacturing sector. As a result,
authorities in several countries embarked upon an unprecedented way of policy initiatives to
contain systematic risk, arrest the plunge in asset prices and shore of the confidence in the
international banking system. This has brought about some level of stability. The Indian
Government has not lagged behind. It has been successful in bringing down inflation from
12.9% in August, 2008 to around 6% towards the end of the year. The challenges of high
growth and now global recession have become more complex especially with increased
globalization of world economy and growing influence of global developments, economic and
no economic. Upgrading infrastructure such as energy, roads, inflation management,

promoting growth of industrial sector, stability in financial market, containing deficit, both
domestic and external, promoting exports amidst global recession are the major challenges
that are faced by Indian economy.
Pumps Industry
Indian pumps, catering to a range of sectors from agriculture to nuclear power generation,
are expected to capture a bigger slice of the world market. With exports already reaching
around 70 countries, the Indian pump industry is poised to register a faster growth rate than
the global average, says an industry study. The Indian pump industry is set to grow at 6-7
percent over the next three years (against the 4 percent of the world pump market).
The growth witnessed by the Pumps Industry was in line with the performance of the Indian
economy. The growth in these sectors mainly came from Energy sector. This was the result
of capacity additions in Super Critical plants including Ultra Mega Plants. On the other hand,
increased forays from Chinese contractors into Energy Sector continued to exert pressure
on the demand. Demand for Submersible pumps is weather dependent and varies with
geographical location. Growth in standard industrial pumps is closely linked to the
development in the industrial sector of the economy. Trends in waste water sewage market
are encouraging due to increased Government spending. The earlier buoyant demand for
industrial valves tapered off in the latter part of the year due to drop in activities in Steel and
General Industry.
The industry, now holding euro 500 million worth of global market share, "is expected to
grow at a rate faster than the world pump market growth, capturing a larger share of the
market," states the study released by the Confederation of Indian Industry (CII). According to
industry estimates, India produces around one million pumps of various kinds. There are
around 800 large, medium and small units producing the pumps for sectors from agriculture
to nuclear power generation. "Indian pump manufacturers are able to meet most of the
domestic market demand," said Sarita Nagpal, head of manufacturing services of CII, which
works closely with the Indian Pump Manufacturers Association.
Exports have registered a 11 percent growth in the last two years after reversing a negative
11.5 percent trend in 2002-03 to clock 45 percent growth in 2003-04. India has today
become a reliable, technically competent, competitive and enterprising outsourcing option for
many
multinational
companies
in
industrial
pumps
and
systems.
The growth story has emerged through technical collaborations and joint ventures that Indian
companies have had with multinational majors. Technical know-how of global standard has
thus
been
well
absorbed.
In addition, various research institutes such as the Small Industries Testing and Research
Centre (Si'Tarc) in Coimbatore, have developed energy-efficient designs for pumps to meet
the norms of Indian standards.
The Indian pump industry has an outstanding record of indigenous research and
development in all three areas of technological intensities - from mass-produced pumps for
agriculture to gigantic pumps for interlinking rivers, and pumps for critical services such as
nuclear power generation. The Bureau of Indian Standards has developed 42 specifications
for
indigenous
pumps.
GLOBAL PUMP MARKET OUTLOOK AND GROWTH

DRIVERS
The world pump market is governed by the demand in United States, European Union and
Japan. With these countries burdened by recession, market forecasts up to 2013 have been
revised to a compounded average growth rate of just 0.3% from 3-4%. The global market for
centrifugal pumps in 2009 and 2010 is likely to contract, while that for positive displacement
pumps will post good gains. Consolidation of players in the pump industry through mergers
and acquisitions, may catch momentum in 2009 -10 in spite of the present recessionary
trends.
Although water and sewage, power, building services, industry, oil and gas are major drivers
of the global pump market, for KBL, water, power and irrigation will continue to be chief
market drivers.
Factors affecting growth of the global pump industry:
Per capita availability of water in Asia is less than other continents; and it will
continue to grow rapidly, thus increasing demand for delivery and treatment of that
water. Rising consumption with decreasing supplies of uncontaminated water is
pushing up the market of desalination plants for treating seawater.
Urbanization of Asia has seen relocation of more than one billion migrants from
villages to cities. This is creating pressure on the existing infrastructure including
delivery of utility water and removal and treatment of wastewater.
Most governments in Asia and in Africa are likely to increase their spending on
infrastructure projects like irrigation and drinking water schemes.
The world is moving towards energy efficient products and services to be able to
sustain the growth rates achieved in the past few years with petroleum being the
primary energy source.
Sintech Precision Product Ltd. An Overview
Companys Profile
Vision, Misson & Quality
Product Range
Key Players
Sectoral Overview
Introduction to the Company
Company Profile
Sintech Precision Products Ltd., founded in 1986, by an enterprising technocrat Mr.
N.C.Dhingra is recognized as one of the largest pumping solutions provider today in India.
With headquarters located in NCR of India, Ghaziabad, Sintech Precision Products Ltd has
built a strong presence in the domestic market over the past three decades.
Sintech is an advanced pumping solution provider for water intensive heavy industries. With
a very diverse product portfolio, Sintech provides solutions for multifarious applications like
clear water, process, slurry, liquid with suspended solids, sewage, acids, alkalies, seawater
and many more. Sintech has branch offices and dealership network in throughout the nation
as well as catering the international market.
With tremendous growth potential in future pumping technology market, Sintech Precision
Products Ltd has acquired certification from Moody International based in UK, who operates
in terms of the UKAS license requirements. Our system is regularly audited for compliance
to these International Standards.
Sintech Precision Products Ltd. an ISO 9001 certified company is now a leading & respected
pump manufacturer in India. Sintech make pumps are manufactured as per DIN-24256/ISO2858/IS 5120 /HIS/IS - 1520 standards and tested as per IS-9137, API-610 & ISO 2548
standards. Sintech make pumps constitutes of highly standardized and is designed with
modular structures and offers the best possible interchangeability. This largely reduces
spares inventory. Sintech has a high production system with two Manufacturing units.
Sintech Precision Products Ltd. has now expanded in all type of pumps suitable for
diverse multifarious applications like clear water, process, slurry, liquid with
suspended solids, sewage, acids, alkalies, sea water and many more application.
Till date SINTECH has supplied thousands of pumps for various critical and non
critical applications, which are working quietly and efficiently to the entire customer
satisfaction.
Vision
Sintech seeks to be recognised as the Innovator and thought leader of pumping related
products and technologies in domestic and global markets.
Mission
1
Improve customer returns
Create value through a culture of excellence
Innovate product and service delivery
Imbibe Quality as companys bloodline
Quality
Sintech Precision Products Ltd s Q3 model is a move in that direction. Principally based on
three quality-integrated pillars, the Q3 model reflects the inside out approach of the
organization, that incorporates Q1 Applied engineering expertise
Q2 Superior pumping capabilities
Q3 Exceptional service
QUALITY ASSURANCE PROCEDURES

Our Quality Assurance Department is manned by qualified engineers to ensure completion
of raw materials and final pumps with relevant quality norms. The activities are divided into
raw material inspection, in-process inspection and final inspection.
Sintech Precision Products Limited has in house facilities and equipments required for
ensuring quality, such as
Hydrostatic machine for hydrostatic test of the casing
Dynamic balancing machine for dynamic balancing of the impeller.
For non-destructive testing such as ultrasonic test magnetic particle test inspection is carries
out through external reputed agencies.A well laid test field for performance testing having
sophisticated flow meter with digital display by which flow of the liquid can be tested
accurately is available at our works.
Product Range
Type
Design
Rating
Capacity : upto 1,000

m3/hr
Head upto 1,100 m
SMS
Application/Sector
Boiler Feed
Mine De-watering
Water Supply
Jockey
Condensate Transfer
Descaling Operations
Industrial and
Municipal Water Supply
Cooling Towers
Injection Water
Spray Pond
Multistage Pump
SCS &
SCSD

m3/hr
Head upto 180 m
Horizontal Split
Casing Pump
SWP &
CPS
Water Pump
Process Pump
SAF

m3/hr
Head upto 140 m

m3/hr
Head upto 10 m
Axial Flow Pump
Air-conditioning
Water
Treatment Plant
Fire Fighting
Irrigation
Water Supply
Drip Irrigation
Cooling Tower
Condensate handling
Air-conditioning
Fire Fighting
Service Water
Chemical Process
Effluent Treatment
10
Hydrocarbon
11
Viscous Liquid
12
Acids Juice Pump
13
Distillery
Sea Water
River Water
Canal Water

m3/hr
Head upto 60 m
SSHQ
Non Clog Pump

m3/hr
Head upto 45 m
SMF
Sewage
Sewage
Effluent Treatment
Unscreened Juice
Slurry
Drainage
River water
Sludge
Grain Wash
Syrup
10
Melt
11
Mud
Injection Water
Sewage
Effluent Treatment
Drainage
River Water
Water Supply
General Water Supply
Cooling Tower
Spray and Injection
Mixed Flow Pump
SVT
SVMF
SVAF

m3/hr
Head upto 300 m
Water
Vertical Turbine
Vertical Mixed Flow
Vertical Axial Flow
SV
Free Air Capacity :

upto 4,975 m3/hr
Vacuum upto 685
Liquid Ring Vacuum mmHg
Pump
Capacity : upto 150

m3/hr
Head upto 100 m
SGP
Irrigation
Hydropower
Chemicals
Pharmaceuticals
Food
Sugar
Plastic
Paper
Pulp
Thick Viscous Liquid
Dyes
Coaltar
Mollasses
Soaps
Paint
Thick Mollasses
Highly Viscous Liquid
Gear Pump
ST
Lobe Pump
/ Star Pump
Capacity : upto 100

m3/hr
Head upto 50 m
STF
Torque Flow
Pump
EB
&
EBM

m3/hr
Head upto 100 m
Capacity : upto 100

m3/hr
Head upto 50 m
Abrasive Slurries
Sewage
Industrial Waste
Sugar
Pulp and Paper
Steel
Power
Fibre
Textile
10
Waste Water
11
Grain Wash
12
Solid Handling
13
Cement Aquaculture
Massecuite
Magma
Sump Drainage
Dewatering
Ash Slurry
Wet Scrubber
Rota Pump
SSPL
Self Priming
Pump
Capacity : upto 250

m3/hr
Head upto 50 m
SECTORAL OVERVIEW
Power
This business group caters to the needs of power industry - conventional and renewable.
Considering the chronic shortage of power, this sector is bound to emerge as a major market
driver for decades to come. The Power group is proud
to have successfully completed the sump model test of cooling water system for India's first
ultra mega power project of 4000 MegaWatt (5 x 800 MW) at Kirloskarvadi. Orders received
include:
Raka Saudia Power & Water -
SWRO Barge Project
Co. Ltd.
2
Bhakra Beas Management
Pong Power Project
Board (P.W.)
3
Shri Chamundeswari Sugars -
Co-gen Plant Limited

(Through Avant Garde)
Clear Water Limited
2x250 MW Korba East
Clear Water Limited
2x210 MW Rayalaseema
TPS Stage II, Unit 3 & 4
Water Resource Management
This business group addresses the needs of water supply, water treatment and waste water
treatment segments. Water, like power is a major market driver for the pump industry and
equipment peripheral to water industry. Water stressed regions in the world are on the rise,
thanks to uncurbed urbanization, growing industrialization, increasing pollution levels and
absence of sufficient teeth to the
legislation to deal with water pollution across the world. India is no exception. Such a
scenario demands better and better water management, with latest technologies, cheaper
methods and sustainable operations.
This business group continues to serve municipal corporations, water and sewerage boards
of India. Delhi Jalboard's Vishwakarma project, Nagpur municipal corporation's Gorewada
and Mahadula projects and Maharashtra Jal
Pradhikaran's Malegaon project went on stream this year.
We made significant in-roads in waste water treatment segment in India as well as overseas,
based on the Gondwana Engineers Limited's strengths. Orders received include:
Steel Authority of India Llimted, Bhilai for a 30 million liters per day (MLD) sewage
treatment plant
Vadodara municipal Sewa Sadan for a 8.5 MLD sewage treatment plant
Pune municipal corporation for a 40 MLD sewage treatment plant
Sugar Industry
Some prestigious projects in sugar industry are:
Balrampur Chini Mills Limited
Khumbi Project
Balrampur Chini Mills Limited
Gularia Project
Bajaj Hindusthan Limited
Kinauni Project
Bajaj Hindusthan Limited
Kinauni Expansion
Uttam Sugar Mills Limited
Barkatpur Project
Uttam Sugar Mills Limited
Shermau Project
Paper / Etp / Chemical / Food
Some prestigious projects in Paper / Etp / Chemical / Food are:
Satyam Industries Pvt. Ltd
Clear Water Limited
Clear Water Limited
Kanoria Chemical &

Indus.Ltd.
Ghaziabad Organics Ltd.
Adinath Enterprises
Winsor Sathyam Engineering -
Panipat Project
Bhiwadi Project
Ghaziabad Project
FMC Satnam Agro Project

Bombay Rayon Fashion
Limited
Steel
Some prestigious projects in steel industry are:
Maa Chinnamastika Steel & Steel Project Power

Limited
IST Steel & Power Limited
Shri Mahavir Ferro Alloys P Ltd.
Bellary Project
-
Rourkela Project
Mines
Some prestigious projects in mines industry are:
10
Singareni Colleries Co. Ltd. -
15 HP
11
40 HP
12
75 HP
13
125 HP
WORKING CAPITAL MANAGEMENT

CONCEPTUAL FRAMEWORK
1
Introduction
Significance of working capital management
Liquidity Vs. profitability: Risk Return trade off
Classification of working capital
Types of working capital needs
Factors determining working capital requirements
Working capital cycle
Sources of working capital
Working capital position
10
Inventory management
11
Cash management
12
Receivables management
13
Managing payables (Creditors)
14
Financing current assets
15
Working capital & short-term financing
16
Financing Current Assets
Introduction to working capital

Working Capital is the Life-Blood and Controlling
Nerve Center of a business
The working capital management precisely refers to management of current assets. A firms
working capital consists of its investment in current assets, which include short-term assets
such as:
1
Cash and bank balance,
Inventories,
Receivables (including debtors and bills),
Marketable securities.
Working capital is commonly defined as the difference between current assets and
current liabilities.
Working Capital = Current Assets-Current Liabilities
There are two major concepts of working capital:

1
Gross working capital
Net working capital
Gross working capital:

It refers to firm's investment in current assets. Current assets are the assets, which can
be converted into cash with in a financial year. The gross working capital points to the
need of arranging funds to finance current assets.
Net working capital:

It refers to the difference between current assets and current liabilities. Net working
capital can be positive or negative. A positive net working capital will arise when current
assets exceed current liabilities. And vice-versa for negative net working capital. Net
working capital is a qualitative concept. It indicates the liquidity position of the firm and
suggests the extent to which working capital needs may be financed by permanent
sources of funds. Net working capital also covers the question of judicious mix of longterm and short-term funds for financing current assets.
Significance Of Working Capital Management
PAYMENT
TO
SUPPLIERS
EASY LOAN
FROM
BANKS
DIVIDEND
DISTRIBUTION
SIGNIFICA
N--CE OF
WORKING
CAPITAL
INCREASE
DEBT
CAPACITY
INCREASE
EFFECIENY
INCREASE
IN FIX
ASSETS
The management of working capital is important for several reasons:

1
For one thing, the current assets of a typical manufacturing firm account for half of
its total assets. For a distribution company, they account for even more.
Working capital requires continuous day to day supervision. Working capital has the
effect on company's risk, return and share prices,
There is an inevitable relationship between sales growth and the level of current
assets. The target sales level can be achieved only if supported by adequate
working capital Inefficient working capital management may lead to insolvency of
the firm if it is not in a position to meet its liabilities and commitments.
Liquidity Vs Profitability: Risk - Return trade of
Another important aspect of a working capital policy is to maintain and provide sufficient
liquidity to the firm. Like the most corporate financial decisions, the decision on how much
working capital be maintained involves a trade off- having a large net working capital may
reduce the liquidity risk faced by a firm, but it can have a negative effect on the cash flows.
Therefore, the net effect on the value of the firm should be used to determine the optimal
amount of working capital.
Sound working capital involves two fundamental decisions for the firm. They are the
determination of:
1
The optimal level of investments in current assets.
The appropriate mix of short-term and long-term financing used to support this
investment in current assets, a firm should decide whether or not it should use
short-term financing. If short-term financing has to be used, the firm must determine
its portion in total financing. Short-term financing may be preferred over long-term
financing for two reasons:
The cost advantage
Flexibility
But short-term financing is more risky than long-term financing. Following table will
summarize our discussion of short-term versus long-term financing
Maintaining a policy of short term financing for short term or temporary assets needs (Box
1) and long- term financing for long term or permanent assets needs (Box 3) would
comprise a set of moderate risk profitability strategies. But what one gains by following
alternative strategies (like by box 2 or box 4) needs to weighed against what you give up.
CLASSIFICATION OF WORKING CAPITAL

Working capital can be classified as follows:
On the basis of time
On the basis of concept
Types of Working Capital Needs
Another important aspect of working capital management is to analyze the total

working capital needs of the firm in order to find out the permanent and temporary
working capital. Working capital is required because of existence of operating cycle.
The lengthier the operating cycle, greater would be the need for working capital.
The operating cycle is a continuous process and therefore, the working capital is
needed constantly and regularly. However, the magnitude and quantum of working
capital required will not be same all the times, rather it will fluctuate.
The need for current assets tends to shift over time. Some of these changes reflect
permanent changes in the firm as is the case when the inventory and receivables
increases as the firm grows and the sales become higher and higher. Other
changes are seasonal, as is the case with increased inventory required for a
particular festival season. Still others are random reflecting the uncertainty
associated with growth in sales due to firm's specific or general economic factors.
The working capital needs can be bifurcated as:

3
Permanent working capital
Temporary working capital
Permanent working capital:
There is always a minimum level of working capital, which is continuously required

by a firm in order to maintain its activities. Every firm must have a minimum of cash,
stock and other current assets, this minimum level of current assets, which must be
maintained by any firm all the times, is known as permanent working capital for that
firm. This amount of working capital is constantly and regularly required in the same
way as fixed assets are required. So, it may also be called fixed working capital.
2
Temporary working capital:
Any amount over and above the permanent level of working capital is temporary,
fluctuating or variable working capital. The position of the required working capital is
needed to meet fluctuations in demand consequent upon changes in production
and sales as a result of seasonal changes.
The permanent level is constant while the temporary working capital is fluctuating
increasing and decreasing in accordance with seasonal demands as shown in the
figure. In the case of an expanding firm, the permanent working capital line may not
be horizontal. This is because the demand for permanent current assets might be
increasing (or decreasing) to support a rising level of activity. In that case line would
be rising.
FACTORS DETERMINING WORKING CAPITAL REQUIREMENTS
There are many factors that determine working capital needs of an enterprise.
Some of these factors are explained below:
Nature or Character of Business.

The working capital requirement of a firm is closely related to the
nature of its business. A service firm, like an electricity undertaking
or a transport corporation, which has a short operating cycle and
which sells predominantly on cash basis, has a modest working
capital requirement. Oh the other hand, a manufacturing concern
like a machine tools unit, which has a long operating cycle and
which sells largely on credit, has a very substantial working capital
requirement.
Sintech is a manufacturing concern so this requires them to keep a
very sizeable amount in working capital.
Size of Business/Scale of Operations.

Sintech has a good position in its segment and they are also
spending their operations in the domestic market as well as in
foreign market. The scale of operations and the size it holds in the
market makes it a must for them to hold their inventory and current
asset at a huge level.
Rate of Growth of Business.
The rate of growth of sales indicates a need for increase in the

working capital requirements of the firm. As the firm is projected to
increase their sales by 69% from what it was in 2009, it is required
to guard them against the increasing requirements of the net current
asset by way of efficient working capital management. The sales
and projected sales level determine the investment in inventories
and receivables.
Price Level Changes.

Changes in the price level also affect the working capital
requirements. It was the reduced margins in the price of the raw
materials that had prompted them to go for bulk purchases thus
making on additions to their net current assets. They might have
gone for this large-scale procurement for availing discounts and
anticipating a rise in prices, which would have meant that more funds
are required to maintain the same current assets.
SOURCES OF WORKING CAPITAL
Sintech has the following banks available for the fulfillment of its working capital
requirements in order to carry on its operations smoothly:
Banks:
These include the following banks
1
Indian Bank
Syndicate Bank
NAME OF THE BANK
FUND BASED
NON-FUND BASED
INDIAN BANK
300
250
SYNDICATE BANK
200
100
TOTAL
500
350
WORKING CAPITAL CYCLE
The upper portion of the diagram below shows in a simplified form the chain of
events in a manufacturing firm. Each of the boxes in the upper part of the diagram
can be seen as a tank through which funds flow. These tanks, which are concerned
with day-to-day activities, have funds constantly flowing into and out of them.
RAW MATERIAL
CASH
OPERATING CYCLE
& BILLS RECEIVABL-ES
WORK IN PROGRESS
SALES
FINISH GOODS
The chain starts with the firm buying raw materials on credit.
In due course this stock will be used in production, work will be carried out on
the stock, and it will become part of the firms work-in-progress.
Work will continue on the WIP until it eventually emerges as the finished
product.
As production progresses, labor costs and overheads need have to be met.
Of course at some stage trade creditors will need to be paid.
When the finished goods are sold on credit, debtors are increased.
They will eventually pay, so that cash will be injected into the firm.
Each of the areas- Stock (raw materials, WIP, and finished goods), trade debtors,
cash (positive or negative) and trade creditors can be viewed as tanks into and
from which funds flow.
Working capital is clearly not the only aspect of a business that affects the amount of
cash.
The business will have to make payments to government for taxation.
Fixed assets will be purchased and sold
Lessors of fixed assets will be paid their rent
Shareholders (existing or new) may provide new funds in the form of cash
Some shares may be redeemed for cash
Dividends may be paid
Long-term loan creditors (existing or new) may provide loan finance,

loans will need to be repaid from time-to-time, and
Interest obligations will have to be met by the business
Unlike, movements in the working capital items, most of these non-working capital
cash transactions are not every day events. Some of them are annual events (e.g.
tax payments, lease payments, dividends, interest and, possibly, fixed asset
purchases and sales). Others (e.g. new equity and loan finance and redemption of
old equity and loan finance) would typically be rarer events.
INVENTORY MANAGEMENT
Inventories
Inventories constitute the most important part of the current assets of large majority
of companies. On an average the inventories are approximately 60% of the current
assets in public limited companies in India. Because of the large size of inventories
maintained by the firms, a considerable amount of funds is committed to them. It is
therefore, imperative to manage the inventories efficiently and effectively in order to
avoid unnecessary investment.
Nature of Inventories
Inventories are stock of the product of the company is manufacturing for sale and
components make up of the product. The various forms of the inventories in the
manufacturing companies are:
10
Raw Material: It is the basic input that is converted into the finished
product through the manufacturing process. Raw materials are those
units which have been purchased and stored for future production.
11
Work-in-progress: Inventories are semi-manufactured products.

They represent product that need more work they become finished
products for sale.
12
Finished Goods: Inventories are those completely manufactured

products which are ready for sale. Stocks of raw materials and work-inprogress facilitate production, while stock of finished goods is required
for smooth marketing operations. Thus, inventories serve as a link
between the production and consumption of goods.
Inventory Management Techniques
In managing inventories, the firms objective should be to be in consonance with the

shareholder wealth maximization principle. To achieve this, the firm should determine
the optimum level of inventory. Efficiently controlled inventories make the firm
flexible. Inefficient inventory control results in unbalanced inventory and inflexibilitythe firm may sometimes run out of stock and sometimes pile up unnecessary stocks.
Economic Order Quantity (EOQ): The major problem to be

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

includes all the cost of acquiring raw material. They include the costs
incurred in the following activities:
Requisition
Purchase Ordering
Transporting
Receiving
Inspecting
Storing
Ordering cost increase with the number of orders placed; thus the
more frequently inventory is acquired, the higher the firms ordering
costs. On the other hand, if the firm maintains large inventorys level,
there will be few orders placed and ordering costs will be relatively
small. Thus, ordering costs decrease with the increasing size of
inventory.
Carrying Costs: Costs are incurred for maintaining a given level of

inventory are called carrying costs. These include the following
activities:
Warehousing Cost
Handling
Administrative cost
Insurance
Deterioration and obsolescence

Carrying costs are varying with inventory size. This behavior is
contrary to that of ordering costs which decline with increase in
inventory size. The economic size of inventory would thus depend on
trade-off between carrying costs and ordering cost.
ABC System:
ABC system of inventory keeping is followed in the factories. Various

items are categorized into three different levels in the order of their
importance. For e.g. items such as memory, high capacity processors
and royalty are placed in the A category. Large number of firms has to
maintain several types of inventories. It is not desirable the same
degree of control all the items. The firm should pay maximum attention
to those items whose value is highest. The firm should therefore,
classify inventories to identify which items should receive the most
effort in controlling. The firm should be selective in approach to control
investment in various types of inventories. This analytical approach is
called ABC Analysis. The high-value items are classified as A items
and would be under tightest control. C items represent relatively least
value and would require simple control. B items fall in between the
two categories and require reasonable attention of management.
CASH MANAGEMENT
Sources of Cash:
Sources of additional working capital include the
following:
1
Existing cash reserves
Profits (when you secure it as cash!)
Payables (credit from suppliers)
New equity or loans from shareholders
Bank overdrafts or lines of credit.
Long-term loans
If you have insufficient working capital and try to increase sales, you can easily
over-stretch the financial resources of the business. This is called overtrading.
Early warning signs include:
1
Pressure on existing cash
Exceptional cash generating activities e.g. offering high discounts for early
cash payment
3
Bank overdraft exceeds authorized limit.
Seeking greater overdrafts or lines of credit
Part-paying suppliers or other creditors
Paying bills in cash to secure additional supplies
Management pre-occupation with surviving rather than managing
Frequent short-term emergency requests to the bank (to help pay wages,
pending receipt of a cheque).
CASH MANAGEMENT IN SINTECH PRECISION PRODUCT

LTD.
The cash management system followed by the SINTECH is mainly lock box
system.
Cash Management System involves the following steps:
The branch offices of the company at various locations hold the

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

house to make them realized. These cheques can be local or
outstation.
The CMS agencies or bank send information to the central hub of the
company regarding realization/cheque bounced.
The central hub passes on the realized funds to the company as per
the agreed agreements.
The CMS agencies or concerned bank provides the necessary MIS to

the company as per requirement.
In cash management the collect float taken for the cheques to be realized into cash is
irrelevant and non-interfering because banks such as Standard Chartered, HDFC
and CitiBank who give credit on the basis of these cheques after charging a very
small amount. These credits are given to immediately and the maximum time taken
might be just a day. The amount they charge is very low and this might cover the
threat of the cheque sent in by two or three customers bouncing. Even otherwise the
time taken for the cheques to be processed is instantaneous. Their Cash
Management System is quite efficient.
RECEIVABLES MANAGEMENT
Cash flow can be significantly enhanced if the amounts owing to a business are
collected faster. Every business needs to know.... who owes them money.... how
much is owed.... how long it is owing.... for what it is owed.
Late payments erode profits and can lead to bad debts.
Slow payment has a crippling effect on business; in particular on small businesses

whom can least afford it. If you don't manage debtors, they will begin to manage
your business as you will gradually lose control due to reduced cash flow and, of
course, you could experience an increased incidence of bad debt.
The following measures will help manage debtors:
Have the right mental attitude to the control of credit and make sure that it
gets the priority it deserves.
Establish clear credit practices as a matter of company policy.
Make sure that these practices are clearly understood by staff, suppliers and
customers.
Be professional when accepting new accounts, and especially largerones.
Check out each customer thoroughly before you offer credit. Use credit
agencies, bank references, industry sources etc.
Establish credit limits for each customer and stick to them.
Continuously review these limits when you suspect tough times are coming
or if operating in a volatile sector.
Keep very close to your larger customers.
Invoice promptly and clearly.

10.Consider charging penalties on overdue accounts.
11.Consider accepting credit /debit cards as a payment option.
12.Monitor your debtor balances and aging schedules, and don't let any debts get
too old.
Debtors due over 90 days (unless within agreed credit terms) should generally
demand immediate attention. Look for the warning signs of a future bad debt. For
example..
1
Longer credit terms taken with approval, particularly for smaller orders.
Use of post-dated checks by debtors who normally settle within agreed

terms.
Evidence of customers switching to additional suppliers for the same goods.
New customers who are reluctant to give credit references.
Receiving part payments from debtors.
Here are few ways in collecting money from debtors: -
Develop appropriate procedures for handling late payments.
Track and pursue late payers
Get external help if you own efforts fail.
Dont feel guilty asking for money .. its yours and you are entitled to it.
Make that call now. And keep asking until you get some satisfaction.
In difficult circumstances, take what you can now and agree terms for the
remainder, it lessens the problem.
When asking for your money, be hard on the issue but soft on the person.
Dont give the debtor any excuses for not paying.
Make that your objective is to get the money, not to score points or get even.
MANAGING PAYABLES (Creditors)
Creditors are a vital part of effective cash management and should be

managed carefully to enhance the cash position.
Purchasing initiates cash outflows and an over-zealous purchasing function can
create liquidity problems.
Consider the following: -
Who authorizes purchasing in your company - is it tightly managed or

spread among a number of (junior) people?
Are purchase quantities geared to demand forecasts?
Do you use order quantities, which take account of stock holding and
purchasing costs?
Do you know the cost to the company of carrying stock?
How many of your suppliers have a return policy?
Are you in a position to pass on cost increases quickly through price

increases to your customers?
If a supplier of goods or services lets you down can you charge back the
cost of the delay?
There is an old adage in business that "if you can buy well then you can sell
well". Management of your creditors and suppliers is just as important as the
management of your debtors. It is important to look after your creditors- slow
payment by you may create ill feeling and can signal that your company is
inefficient (or in trouble!).
Remember that a good supplier is someone who will work with you to
enhance the future viability and profitability of your company.
Financing Current Assets
The firm has to decide about the sources of funds, which can be availed to make
investment in current assets.
Long term financing:
It includes ordinary share capital, preference share capital, debentures, long term
borrowings from financial institutions and reserves and surplus.
Short term financing:
It is for a period less than one year and includes working capital funds from banks,
public deposits, commercial paper etc.
Depending on the mix of short and long term financing, the company can
follow any of the following approaches.
Matching Approach
In this, the firm follows a financial plan, which matches the expected life of assets
with the expected life of source of funds raised to finance assets. When the firm
follows this approach, long term financing will be used to finance fixed assets and
permanent current assets and short term financing to finance temporary or variable
current assets.
Conservative Approach
In this, the firm finances its permanent assets and also a part of temporary current
assets with long term financing. In the periods when the firm has no need for
temporary current assets, the long-term funds can be invested in tradable securities
to conserve liquidity. In this the firm has less risk of facing the problem of shortage of
funds.
Aggressive Approach
In this, the firm uses more short term financing than warranted by the matching plan.
Under an aggressive plan, the firm finances a part of its current assets with short
term financing.
Analysis
Of
Working
Capital
&
Its Variuos
Components
WORKING CAPITAL POSITION ANALYSIS IN SINTECH PRECISION

PRODUCT LIMITED
Net working Capital ( CURRENT ASSETS CURRENT

LIABILITIES)
(Rs.in
lacks)
YEAR
31.03.07
31.03.08
31.03.09
INVENTORIES
180.26
291.13
653.95
SUNDRY DEBTORS
114.33
390.84
219.79
10.81
34.30
28.22
6.67
28.08
21.44
78.74
CURRENT ASSETS
CASH AND BANK

OTHER CURRENT ASSETS
LOANS & ADVANCES
21.99
83.92
--------------
--------------
--------------TOTAL CURRENT ASSESTS
333.51
823.09
1008.67
--------------
--------------
---------------
LESS:-
CURRENT LIABILITIES AND PROVISIONS
Short term borrowing

Sundry creditors
Advanced received
Provisions
94.54
336.70
159.49
256.33
25.30
21.56
315.76
305.99
18.16
59.05
59.88
64.05
62
Instalments of term loan
14.66
21.11
72.00
Other current liabilities
16.82
29.36
70.34
TOTAL CURRENT LIABILITIES
--------------
--------------
--------------
332.37
720.71
888.02
----------------
----------------
---------------
NET WORKING CAPITAL
1.14
102.38
120.65
Data Interpretation
If we analysis the three years working capital position of the company, we find out that company has
sufficient working capital to meets its short term liability, it is good indicator for the company but in 2008,
working capital is increased by 101.24 lacs which shows that a sufficient amount has been blocked in
working capital which could be used for some other more beneficial purpose.
63
INVENTORY ANALYSIS
Inventory means stock of three things :1
Raw materials
Semi finished goods.
Finished goods.
Position of inventory in Sintech Precision Product Ltd.

(Rs.in lacks)
64
YEAR
31.03.07
Stores, Spare Parts etc.
31.03.08
10.10
31.03.09
.87
25.57
Stock In tradeFinished Goods

41.76
37.04
26.93
Raw Materials
340.08
78.74
184.53
Material under process

246.54
54.38
78.80
---------------
----------------
--------------180.26
291.13
653.95
-------------------------------
----------------
Analysis through chart:
65
INTERPRETATION:
By analyzing the 3 years data, We are looking increasing pattern in inventories. We can see that
inventories are increased from 180.26 lacs to 291 lacs in the year 2008 and in the year 2009 it is
increased from 291 lacs to 653 lacs. By seeing this pattern we can say that the company is managing
the inventory according to the sale. Company have a great demand for the pump in the year 2010 that is
biggest reason for increase in inventories. From other point of view we can say that the liquidity of firm is
blocked in inventories but to stock is very good due to uncertainty of availability of raw material in time.
SUNDRY DEBTORS ANALYSIS

Debtors or an account receivable is an important component of working capital and fall under current
assets. Debtors will arise only when credit sales are made.
Position of Sintech Precision Product Ltd.

(Rs.in lacks)
YEAR
31.03.07
Sundry Debtors
114.33
31.03.08
390.84
-------------
31.03.09
219.79
-------------
-------114.33
390.84
219.79
---------------
----------------
----------
66
INTERPRETATION
In the table and figure we see that there is rise in the debtors in the year 2008 and decrease in the year
2009. A simple logic is that debtors increase only when sales increase and decrease if sales decrease.
In the year 2008, sales is increased by 72.30% and decreased by 19.24% in the year 2009.
We can say that it is a good sign as well as negative also. Company policy of debtors is very good but a
risk of bad debts is always present in high debtors. when sales is increasing with a great speed the profit
also increases. If company decreases the Debtors they can use the money in many investment plans.
CASH AND BANK BALANCE ANALYSIS

Cash is called the most liquid asset an vital current assets, it is an important component of working
capital. In a narrow sense, cash includes notes, bank draft, cheque etc while in a broader sense it
includes near cash assets such as marketable securities and time deposits with bank.
67
Position of Cash and Bank Balance in Sintech Precision Product Limited

(Rs.in lacks)
YEAR
Cash Balance in hand
31.03.07
31.03.08
31.03.09
1.45
27.30
2.90
9.36
7.00
26.12
Bank BalanceWith Scheduled Banks
-------------
-------------
-----------10.81
-------------
34.30
29.02
-------------
------------
INTERPRETATION
If we analyze the above table and chart we find that it follows a uneven pattern. In the year 2007 it had
maintained a low amount of cash and bank balance. But in the year 2008, cash and the bank balances
has increased from 10.81 lacs to 34.30 lacs which is not a good sign for the company because it shows
that company is not using its cash for beneficial activities. Although, in the year 2009, cash has reduced
from 34.30 lacs to 29.02 lacs but this is very good sign for company because they are not holding the
68
cash in hand but using the cash for better projects, but still it is not conducive. From the other point of
view, company will not face the problem of liquidity as company is maintaining the cash balance.
LOANS AND ADVANCES ANALYSIS

Loans and Advances here refers to any to amount given to different parties, company, employees for a
specific period of time and in return they will be liable to make timely repayment of that amount in
addition to interest on that loan.
Position of Other Loans & Advances in Sintech Precision Product Limited

(Rs.in lacks)
YEAR
Advances to suppliers
Advances
Deposits
31.03.07
31.03.08
10.91
31.03.09
39.69
10.53
6.67
---------------
44.62
39.05
28.08
39.30
21.99
---------------
-----------28.11
106.82
105.91
--------------
----------------
-----------
69
120
100
80
AMOUNT ( IN LACKS )
60
40
20
0
2007
2008
2009
YEAR
INTERPRETATION
If we analyze the table and the chart we can see that it follows an increasing trend which is a good sign
for the company. We can see that from the year 2007 to 2008 it increased more than triple. We can see
that the increase of 275% and 6.08% in 07-08 and 08-09 respectively from previous year.
The increasing pattern shows that company is giving advances for the expansion of plants and
machinery which is good sign for better production of pumps and other goods. Although companys cash
is blocked but this is good that company is doing modernization of plants In time to compete with other
competitors in market.
70
CURRENT LIABILITIES ANALYSIS

Current liabilities are any liabilities that are incurred by the firm on a short term basis or current liabilities
that has to be paid by the firm with in one year.
Position of Other Current Liabilities in Sintech Precision Product Limited
(Rs.in lacks)
YEAR
31.03.07
31.03.08
31.03.09
Current Liabilities
Sundry Creditors
305.99
159.49
256.33
94.54
336.70
Advance Received
59.88
25.30
18.16
Provisions for taxes

64.05
21.56
59.05
Other Liabilities
70.34
16.82
29.36
Bank Loan
315.76
-----------------
-----------------
----------------332.37
720.71
888.02
-----------------
-----------------
-----------------
71
INTERPRETATION
If we analyze the above table then we can see that it follow an uneven trend. The important component
of current liabilities is sundry creditors and other liabilities. In 07-08 it decreased from 359.41 lacs to
256.33 lacs and in 08-09 it increased from 256.33 lacs to 305.99 lacs. This is liability for company so this
should be less. when company have minimum liabilities it creates a better goodwill in market. High
current liabilities indicate that company is using credit facilities by creditors.
SUNDRY CREDITORS ANALYSIS

Creditors or an account payable is an important component of working capital and fall under current
liability. Creditors will arise only when credit purchases are made.
Position of Sundry Creditors in Sintech Precision Product Limited

(Rs.in lacks)
YEAR
Sundry Creditors
31.03.07
31.03.08
159.49
256.33
-------------
31.03.09
305.99
-------------
--------159.49
256.33
305.99
72
---------------
----------------
---------Analysis through chart:
350
300
250
200
AMOUNT ( IN LACKS) 150
100
50
0
2007
2008
2009
YEAR
INTERPRETATION
In the table and figure we see that there is continuous rise in the creditors in the company
in the successive years. A simple logic is that creditors increase only when purchases increase and if
purchase increases on credit it is not good sign for growth. This is liability for company so this should be
less. when company have minimum liabilities it creates a better goodwill in market. High current liabilities
indicate that company is using credit facilities by creditors.
BANK LOANS AND ADVANCES ANALYSIS

73
Position of Bank Loans & Advances in Birla Corporation Limited

(Rs.in lacks)
YEAR
31.03.07
Bank Loan
31.03.08
94.54
Advances from the customers
25.30
---------------
31.03.09
336.70
315.76
18.16
59.88
---------------
-----------122.84
354.86
375.64
--------------
----------------
-----------
AMOUNT ( IN LACKS )
400
350
300
250
200
150
100
50
0
2007
2008
2009
YEAR
74
INTERPRETATION
If we analyze the table and the chart we can see that it follows an increasing trend which is not a good
sign for the company. We can see that from the year 2007 to 2008 it increased more than double. The
increasing pattern shows that company is taking loan for the expansion of plants and machinerecy which
is not a good sign because company depends on the external source. On the other hand, company has
reduced the bank loan in 2009 and increase in advances received from the customer, this is good sign
for company.
PROVISIONS ANALYSIS
Position of Other Provisions in Sintech Precision Product Limited
(Rs.in lacks)
YEAR
Provision for Taxes
31.03.07
31.03.08
21.56
59.05
---------------
---------------
21.56
59.05
---------------
----------------
31.03.09
64.05
------------64.05
------------
75
70
60
50
40
AMOUNT ( IN LACKS )
30
20
10
0
2007
2008
2009
YEAR
INTERPRETATION
From the above table we can see that provision shows an increasing trend and the huge amount is
being kept in these provisions. Though the profits of the company are increased income tax is also
increased which is good that company is creating goodwill in market by paying income tax in time.
Although company is paying more income tax but also they are earning more. Other provisions are also
for the benefit of employees and public. This is good sign for Company growth.
76
Working
Capital Ratios
&
Its
Interpretation
77
Position of WORKING CAPITAL RATIO in Sintech Precision Product Limited
FORMULA
INVENTORY + RECIVEABLE - PAYABLE

WORKING CAPITAL RATIO= ------------------------------------------------------------(AS % OF SALES)
YEAR
WORKING CAPITAL RATIO
SALES
31.03.07
18
31.03.08
32
31.03.09
53
78
60
50
40
AS %
30
20
10
0
2007
2008
2009
YEAR
INTERPRETATION
This ratio indicates whether the investments in current assets or net current assets ( i.e., working
capital ) have been properly utilized. In order words it shows the relationship between sales and working
capital. Higher the ratio lower is the investment in working capital and higher is the profitability. But too
high ratio indicates over trading.
This ratio is an important indicator about the working capital position. Now if we analyze the three years
data, we find that it follows an increasing trend which means that its investment in working capital is
lower and the company is utilizing more of its profit. But we find that ratio is increasing at a very fast rate
which is not a good sign for the company and the company is required to look into these matters closely.
Position of CURRENT RATIO in Sintech Precision Product Limited
FORMULA
TOTAL CURRENT ASSETS
CURRENT RATIO= -------------------------------------------TOTAL CURRENT LIABILITIES
YEAR
31.03.07
31.03.08
31.03.09
79
CURRENT RATIO
1.00
1.14
1.14
1.2
1.15
1.1
1.05
1
0.95
0.9
2007
2008
2009
YAER
INTERPRETATION
This ratio reflects the financial stability of the enterprise. The standard of the normal ratio is 2:1 but in
most of companies standard is taken according to Tandon Committee which is taken as 1.33:1.
Now if we analyze the three years data it can be predicted that it holds a stable position all through out
period but it is seen that it holds a low position than the standard one and the company is required to
improve its position.
80
Position of QUICK RATIO in Sintech Precision Product Limited
FORMULA
TOTAL CURRENT ASSETS - INVENTORIES

QUICK RATIO= ----------------------------------------------------------------TOTAL CURRENT LIABILITIES
YEAR
QUICK RATIO
31.03.07
0.46
31.03.08
0.74
31.03.09
0.40
81
INTERPRETATION
It is the ratio between quick liquid assets and quick liabilities. The normal value for such ratio is taken to
be 1:1. It is used as an assessment tool for testing the liquidity position of the firm. It indicates the
relationship between strictly liquid assets whose realizable value is almost certain on one hand and
strictly liquid liabilities on the other hand. Liquid assets comprise all current assets minus stock.
By analyzing the three years data it can be said that its position was weak in the year 2007 but it
improved significantly in the next year and again it is declined during the 2009. It is to be said that it does
not meet with the standard but in the year 2008 it was very close to the standard and it can be said that
its liquidity position is not good & stable.
Position of CURRENT ASSETS TO FIXED ASSETS RATIO in Sintech Precision Product Limited
FORMULA
CURRENT ASSETS
CA TO FA RATIO = ----------------------------FIXED ASSETS
YEAR
CATO FA RATIO
31.03.07
31.03.08
1.65
2.93
31.03.09
3.21
82
3.5
3
2.5
2
DAYS 1.5
1
0.5
0
2007
2008
2009
YEAR
INTERPRETATION
Assuming a constant level of fixed assets, a higher CA/FA ratio indicates a conservative current assets
policy and a lower CA/FA ratio means an aggressive current assets policy assuming other factors to be
constant. A conservative policy i.e. higher CA/FA ratio implies greater liquidity and lower risk; while an
aggressive policy i.e. lower CA/FA ratio indicates higher risk and poor liquidity.
Now if we analyze the three year data we find the CA TO FA Ration in increasing pattern, so we can say
that company is following the conservative policy to finance its short term capital requirement.
Position of INVENTORY TURNOVER RATIO in Sintech Precision Product Limited
FORMULA
83
AVERAGE STOCK
STOCK TURN OVER RATIO ( IN DAYS )= --------------------------------------- * 365
COST OF GOODS SOLD
YEAR
INVENTORY TURNOVER RATIO
31.03.07
104
31.03.08
79
31.03.09
227
( in Days)
INTERPRETATION
This ratio tells the story by which stock is converted into sales. A high stock turnover ratio reveals the
liquidity of the inventory i.e., how many times on an average, inventory is turned over or sold during the
year. If a firm maintains a minimum stock level in order to maximize sales by quick rotation of inventory
and the holding cost of inventory will be minimum. A low stock turn over ratio reveals undesirable
accumulation of obsolete stock.
84
By analyzing the three year data it seen that it follows an uneven trend. We see that it is reduced to 79
from the 104 days in 2008 and in 2009 it is increased by 148 days, Which is not a good indicator for the
company. Company should have to reduce the inventory conversion period in order to reduce the cost.
Position of RECEIVABLE RATIO in Sintech Precision Product Limited
FORMULA
DEBTORS
RECEIVABLE RATIO = ---------------- * 365
SALES
YEAR
31.03.07
RECEIVABLE RATIO (IN DAYS)
31.03.08
54
70
31.03.09
104
120
100
80
DAYS
60
40
20
0
2007
2008
2009
YEAR
INTERPRETATION
85
Generally a low debtors turnover ratio implies that it considered congenial for the business as it implies
better cash flow. The ratio indicates the time at which the debts are collected on an average during the
year. Needless to say that a high Debtors Turnover Ratio implies a shorter collection period which
indicates prompt payment made by the customer.
Now if we analyze the three year data we can say that it holds a good position while receiving its money
from its debtors. The ratios are in an decreasing ternd, which implies that recovery position is not good
company and Company have to reduce the receivable period.
Position of PAYABLE RATIO in Sintech Precision Product Limited
FORMULA
CREDITORS
PAYABLE RATIO= ----------------------------- * 365
COST OF SALES
YEAR
PAYABLE RATIO (IN DAYS)
31.03.07
92
31.03.08
31.03.09
69
135
86
160
140
120
100
80
DAYS
60
40
20
0
2007
2008
2009
YAER
INTERPRETATION
Actually this ratio reveals the ability of the firm to avail the credit facility from the suppliers throughout the
year. Generally a low creditors turnover ratio implies favorable since the firm enjoys lengthy credit period
Now if we analyze the three years data we find that in the year 2008 the ratio was very
high which means that its position of creditors that year was not good, but in the 2009 it is seen that it
has followed a decreasing trend which is very good sign for the company. So we can say it enjoys a very
good credit facility from the from the suppliers.
87
Position of Operating Cycle in Sintech Precision Product Limited
Formula = Inventory Conversion Period + Receivable Conversion Period Deferral

Period
Calculation of Operating Cycle at Sintech:-
( All Figures in Days)
Particulars
2007-08
2008-09
2009-10
ICP
104
79
227
RCP
54
70
104
149
431
Gross
Cycle
Operating 158
DP
92
69
135
Net OP
66
80
296
350
300
250
200
Days
150
100
50
0
2007-08
2008-09
2009-10
YEAR
Interpretation
88
When a company has lower d/e ratio, it means that company is utilizing its own funds and reserves
rather than taking loans from outsiders. Company have a uneven trend in d/e ratio. In the year 2007 it
was 1.02 but in the year 2009 it is declined to .55 so we can say that now company is using more its
fund as compare to previous year, but still the ratio is high. Company have to reduce the ratio.
MAJOR FINDINGS
Statement Showing Difference from Previous Year
(amt. in lacks)
Particulars
Working Capital
Sales
Current Assets
Sundry Debtors
Inventories
Cash & Bank
391
220
by 243%
by 44%
291
654
by 62%
by 125%
34
-29
by 209%
by 15%
07-08
08-09
102
121
by 5000%
by 19%
1323
-1069
by 72%
by
19.10%
823
1009
by 146%
by 23%
89
Bank Loan and

Advances
107
106
by 269%
by .93
Current Liabilities
Sundry Creditors
Bank Loan and

Advances
Provisions &
Deposits
Other Liabilities
256
306
by 42%
by 19.53%
355
376
by 196%
by 6%
80.16
136
by121.31%
by70%
29.36
70.34
by 74.55%
by 139.5%
721
888
by 117%
by 23%
Working Capital is increased by 19% only in 2008-09 as compare to 5000% increase in 2007-08
and if we analysis the working capital with sales, the sales is decreased by 19% in 2008-09,
thats why working capital is increased by 19% only.
90
Current assets and Current liabilities are increased by 23% in 2008-09 as compare to previous
year but current assets are increased by 146% in 2007-08 as compare to 117% increase in
current liabilities, so we can say that working capital is increased because of increase in current
assets.
Inventory is increased by 125% in 2008-09 as compare to 2007-08, so we can say

that current assets are increased due to the increase in the inventory.
Cash and the bank balances are decreased by 15% which shows company might
face the liquidity problem.
Debtors are decreased by 44% in 2008-09 whereas creditors are increased by

19.37% in 2008-09, which shows that company enjoys the good payable period
and goodwill among the creditors.
Bank loan and Advances are increased by 6% only as compare to 196% increase
in 2007-08, which shows that company using more of its debt to fund the short
term requirements.
3. Operating cycle of the company is increasing which shows the poor receivable
policy
collection
91
CONCLUDING ANAYSIS
1
The working capital position of the company is sound and the various sources
through which it is funded are optimal.
The company has used its purchasing, financing and investment decisions to good
effect can be seen from the inferences made earlier in the project.
The debts doubtful have been doubled over the years but their percentage on the
debts has almost become half. This implies a sales and collection policy that get
along with the receivables management of the firm.
The various ratios calculated are an indicator as to the fact that the profitability of
the firm and sales are on a rise and also the deletion of the inefficiencies in the
working capital management.
The firm has not compromised on profitability despite the high liquidity is
commendable.
92
Sintech Precision Product Ltd. has reached a position where the default costs are as
low as negligible and where they can readily factor their accounts receivables for
availing finance is noteworthy.
SUGGESTIONS AND RECOMMENDATIONS
93
The management of working capital plays a vital role in running of a

successful business. So, things should go with a proper understanding
for managing cash, receivables and inventory.
Sintech Precision Product Ltd. is managing its working capital in a
good manner, but still there is some scope for improvement in its
management. This can help the company in raising its profit level by
making less investment in accounts receivables and stocks etc. This
will ultimately improve the efficiency of its operations. Following are
few recommendations given to the company in achieving its desired
objectives:
1
The business runs successfully with adequate amount of the working capital but the
company should see to it that the cash should not be tied up in excessive amount of
working capital.
Though the present collection system is near perfect, the company as due to the
increasing sales should adopt more effective measures so as to counter the threat of
bad debts.
The over purchasing function should be avoided as it could lead to liquidity

problems.
The investment of cash in marketable securities should be increased, as it is very

profitable for the company.
Holding of excessive and insufficient stock must be avoided as it creates a burden

on the cash resources of a business and results in lost sales, delays for customers,
etc respectively.
94
BIBLIOGRAPHY
Following sources have been sought for the preparation of this report:
1
Corporate Intranet
Financial Statements (Annual Reports)
CMA Data
Direct interaction with the employees of the company
Internet ---1
www.sintechpumps.co.in
www.scribd.com
www.indianpumpsindustry.com
Textbooks on financial management -
I.M.Pandey
Khan and Jain
95
96
Appendi
ces
CRITICAL MANAGEMENT ANALYSIS DATA (CMA)
97
BALANCE SHEET
LIABILITIES
STATEMENT
Sheet 1
AS PER BALANCE SHEET AS AT 31st MARCH

Lacs
Sintech Precision Products
2007
2008
2009
2010
Limited
Aud
Aud
Est.
Proj
II
III
IV
CURRENT LIABILITIES
Short-term borrowings from
banks(including bills purchased,
discounted & excess borrowing
placed on repayment basis)
(i.) From applicant banks
(ii.) From other banks
0.00 336.70 400.00 400.00

94.54
0.00
0.00
0.00
(iii) Of which BP & BD

SUB TOTAL
94.54 336.70 400.00 400.00
Short term borrowings from others

Sundry Creditors (Trade)
Advance payments from custo-
159.49 256.33
90.77 133.33
25.30
18.16
20.00
50.00
21.56
59.05
8.05
30.68
14.66
58.55
43.76
24.53
(specify major items)
16.82
29.36
25.00
30.00
Liabilities for Expenses
16.82
29.36
25.00
30.00
mers/deposits from dealers

Provision for taxes
Dividend payable
Other statutory liabilities
(due within one year)
Deposits/instalments of term
loans/DPGs/Debentures,etc.
(due within one year)
Other current liabilities &
provisions(due within 1 Yr)
98
SUB-TOTAL (B)
237.83 421.45 187.58 268.54
TOTAL CURRENT LIABILITIES
TERM
332.37 758.15 587.58 668.54
LIABILITIES
Rs. In
Lacs
----------------------------------Sintech Precision Products

Form III : Sheet 2
Aud
2007
2008
2009
2010
Aud
Aud
Est.
Proj
Debentures (not maturing

within one year)
Preference shares
(redeemable after one year)
Term loans(excluding instalment)
5.84
0.00
0.00
0.00
16.20
95.93
27.97
3.44
68.51
60.25
180.25
180.25
0.00
0.00
0.00
0.00
90.55
156.18
208.22
183.69
422.92
914.33
795.80
852.23
24.91
24.91
44.91
44.91
payable within one year)

Deferred Payment Credits(car Loans)
(excluding instalments due
within one year)
Term deposits (repayable
after one year)
Other term liabilities
TOTAL TERM LIABILITIES
TOTAL OUTSIDE LIABILITIES
NET WORTH
------------------------Ordinary share capital
General reserve
Revaluation reserve
Other reserve (excluding
provisions)
99
Surplus (+) or deficit (-) in
73.56
85.50
112.45
204.50
15.13
23.32
23.32
23.32
Share Application Money
0.70
0.00
0.00
0.00
Share Premium
0.00
0.00
80.00
80.00
NET WORTH
114.30
133.73
260.68
352.73
TOTAL LIABILITIES
537.22
1048.06
1056.48
1204.96
20.50
58.55
43.76
24.53
Profit & Loss Account

Others (specify)
Deferred Tax Liability
Closing Balance Of TL(Check)
100
101

FIXED ASSETS
Form III : Sheet 4
Gross Block(Land & Building
Rs. in Lacs
2007
2008
2009
2010
Aud
Aud
Est.
Proj
228.40
255.94
285.94
285.94
29.41
47.86
66.46
85.06
198.99
208.08
219.48
200.88
3.61
16.70
73.20
13.20
0.00
0.00
0.00
0.00
2.72
13.50
70.00
10.00
0.89
3.20
3.20
3.20
1.11
0.00
0.00
0.00
TOTAL OTHER NON-CURR. ASSETS
4.72
16.70
73.20
13.20
Intangible assets (patents,
0.00
0.00
0.00
0.00
machinery, work-in-process)
Depreciation to date
NET BLOCK
Investment/bookdebts/advances/
deposits which are not current
assets
(i) a) Investment in subsidiary
Co./affiliates
b) Other Investments
(ii) Advances to suppliers of
capital goods & contractors
(iii)Deferred receivables (maturity
exceeding one year)
(iv)Others (a) Debtors> 6 months
(b) Security Deposits
(c) Others
Non-consumables stores &
spares
Other non-current assets including dues from Directors
goodwill, prelim.expenses, bad/

doubtful exp.not provided for etc)
102
TOTAL ASSETS(34+37+41+42)
537.22
1047.87
1056.29
1204.77
ASSESSMENT OF WORKING CAPITAL REQUIREMENT
FORM II : OPERATING STATEMENT

---------------------------------------------------Sheet 1
Amount in Lacs
Branch
INDIAN BANK, GHAZIABAD

As per profit and loss account actuals/
estimates for the year ending 31st March
2007
2008
2009
2010
Limited
Aud
Aud
Est.
Proj
II
III
IV
GROSS SALES
i.
Domestic sales
ii.
Export sales
871.45
1458.04
1529.71
2206.00
0.00
0.00
0.00
0.00
3.73
3.14
5.00
8.50
875.18
1461.18
1534.71
2214.50
107.19
137.86
129.71
206.00
767.99
1323.32
1405.00
2008.50
75.59
72.31
6.17
42.95
Add other revenue income

Job Work
Total
2
Less excise duty

Deduct other items
Net sales ( item 1 - item 2 )
% age rise (+) or fall (-) in net
103
sales compared to previous

year (annualized)
5
Cost of Sales
i.)
Raw materials (including
476.99
682.05
874.00
1210.00
476.99
682.05
874.00
1210.00
72.87
111.85
139.00
193.00
(b) Indigenous
72.87
111.85
139.00
193.00
iii)
Power and fuel
12.53
17.34
21.85
31.25
iv)
Direct labour
8.34
61.24
74.25
78.75
64.42
99.52
124.00
172.00
9.56
18.45
18.60
18.60
644.71
990.45
1251.70
1703.60
72.46
54.38
78.80
148.25
717.17
1044.83
1330.50
1851.85
stores and other items used

in the process of manufacture)
(a) imported
(b) Indigenous
ii)
Other spares
(a) Imported
(Factory wages & salary)

v)
Other mfg. Expenses
vi)
Depreciation
vii)
SUB TOTAL (I TO VI)
viii)
ADD: Opening stocks-in-Process)

Sub-total
ix)
Form II : Sheet 2
2007
2008
2009
2010
Aud
Aud
Est.
Proj
Deduct : Closing stocks-inProcess
x)
Cost of Production
xi)
Add : Opening stock of

finished goods
SUB-TOTAL
xii)
SUB-TOTAL (Total cost of Sales)
148.25
205.75
662.79
966.03
1182.25
1646.10
3.19
37.04
26.93
71.35
665.98
1003.07
1209.18
1717.45
37.04
26.93
71.35
100.88
628.94
976.14
1137.83
1616.57
82.59
143.09
158.00
190.00
711.53
1119.23
1295.83
1806.57
Selling general and administrative

Expenses
78.80
Deduct closing stock of

finished goods
xiii)
54.38
SUB-TOTAL (5+6)
104
Operating profit before interest
56.46
204.09
109.17
201.93
( 3-7 )
9
Interest
12.31
60.23
76.17
81.20
10
Operating profit after interest (8-9)
44.15
143.86
33.00
120.73
0.15
1.43
2.00
2.00
0.15
1.43
2.00
2.00
0.09
0.00
0.00
0.00
0.09
0.00
0.00
0.00
0.06
1.43
2.00
2.00
11
(i)
Add other non-operating income
(a)
Bank Interest on FDRs
(b)
(c)
(d)
Sub-total ( income )
(ii)
Deduct other non-operating expenses
(a)
P&P expense inncluding

all book entries written off
(b)
Sub-total ( expenses )
(iii)
Net of other non-operating

income/expenses
12
Profit before tax/loss[10+11(iii)]
44.21
145.29
35.00
122.73
13
Provision for taxes
17.13
12.62
8.05
30.68
14
Prior Years Adjustment(if any)#
0.00
0.00
0.00
0.00
15
Net profit/loss for the year ( 12-13 )
27.08
132.67
26.95
92.05
16
(a) Equity dividend paid-amt
27.08
132.67
26.95
92.05
100.00
100.00
100.00
100.00
(Already paid+ B.S. provision)

(b) Dividend Rate
17
Retained profit ( 14-15 )
18
Retained profit/Net profit (% age)

# (-)ve for expense/provisions and (+) ve for gains
FUND FLOW STATEMENT

FUND FLOW (DETAILED)

Limited
Lacs
2007
2008
2009
2010
105
SOURCES
a.
Net Profit (After Tax)
b.
Aud
Aud
Est.
Proj
27.08
132.67
26.95
92.05
Depreciation
9.55
18.45
18.60
18.60
Increase in Capital (incl. Share Premium)
0.00
0.00
100.00
0.00
d.
Increase In TL. Incl.public deposits
46.75
65.63
52.04
0.00
e.
Decrease in
i.) Fixed Assets
0.00
0.00
0.00
0.00
ii.) Other Non Current Assets
3.94
0.00
0.00
60.00
Others
2.20
7.41
0.00
0.00
g.
Total
89.52
224.16
197.59
170.65
USES
a.
Net Loss
0.00
0.00
0.00
0.00
b.
Dec.in Term Liab. incl. Pub.Dep.
0.00
0.00
0.00
24.53
c.
Increase in
86.19
27.54
30.00
0.00
ii) Other Non current assets
0.00
11.98
56.50
0.00
d.
Dividend Payment
0.00
0.00
0.00
0.00
Others
0.00
0.00
0.00
0.00
Total
86.19
39.52
86.50
24.53
i) Fixed Assets
FUNDS FLOW STATEMENT

(Summary)
Lacs
Particulars
2006
2008
2009
2010
Aud
Aud
Est.
Proj
3.33
184.64
111.09
146.12
119.17
489.58
-59.48
227.08
80.96
3I
Long Term Surplus/Deficit
4ii
Increase/decrease in Curr. Assts.
5iii
Inc./Dec. in CL other than BB
86.63
183.62 -233.87
6iv
Inc./Dec. in WC Gap
32.54
305.96
174.39
146.12
7v
Net Surplus (+) Deficit (-)
-29.21 -121.32
-63.30
0.00
8vi
Inc./Dec. in Bank Borrowings
63.30
0.00
29.21
242.16
106
Lacs
Particulars
2007
2008
2009
2010
Aud
Aud
Est.
Proj
Long Term Sources
89.52
224.16
197.59
170.65
Long Term Uses
86.19
39.52
86.50
24.53
3.33
184.64
111.09
146.12
Surplus/Deficit
Movement of TNW (Corporate)
Lacs
2007
2008
2009
2010
Aud
Aud
Est.
Proj
84.93
108.61
248.69
375.64
27.08
132.67
26.95
92.05
ii Increase in Capital
0.00
0.00
100.00
0.00
iii Dec./(-) Inc.in Intangible Assets
0.09
0.00
0.00
0.00
iv Inc../(-) \ Dec.in Reserves
2.20
7.41
0.00
0.00
v. Adjust prior year expenses
-0.07
0.00
0.00
0.00
0.00
0.00
0.00
0.00
114.30
248.69
375.64
467.69
Particulars
Opening balance
1Add.
i Profit/(-)Loss after Tax
2Less
Div Paid(Incl.Div.Tax)/ Withdrawals
TNW
107
FUND FLOW (DETAILED)
Lacs
Limited
1
SOURCES
Aud
2007
2008
2009
2010
Aud
Aud
Est.
Proj
a. Net Profit (After Tax)
0.00 132.67
26.95
92.05
b. Depreciation
9.55
18.60
18.60
0.00
0.00 100.00
0.00
Increase in Capital (incl. Share Premium)
d. Increase In TL. Incl.public deposits
18.45
0.00
65.63
52.04
0.00
i.) Fixed Assets
0.00
0.00
0.00
0.00
ii.) Other Non Current Assets
0.00
0.00
0.00
60.00
Others
0.00
7.41
0.00
0.00
e. Decrease in
g. Total
9.55 224.16 197.59 170.65
USES
a. Net Loss
5.69
0.00
0.00
0.00
b. Dec.in Term Liab. incl. Pub.Dep.
0.00
0.00
0.00
24.53
i) Fixed Assets
0.00
27.54
30.00
0.00
ii) Other Non current assets
0.00
11.98
56.50
0.00
d. Dividend Payment
0.00
0.00
0.00
0.00
Others
0.00
0.00
0.00
0.00
Total
5.69
39.52
86.50
24.53
c.
Increase in

(Summary)
Lacs
Particulars
3I
Long Term Surplus/Deficit
Aud
2007
2008
2009
2010
Aud
Aud
Est.
Proj
3.86 184.64 111.09 146.12
108
4ii
Increase/decrease in Curr. Assts.
0.00 489.58 -59.48 227.08
5iii
Inc./Dec. in CL other than BB
0.00 183.62 -233.87
6iv
Inc./Dec. in WC Gap
0.00 305.96 174.39 146.12
7v
Net Surplus (+) Deficit (-)
3.86 -121.32 -63.30
0.00
8vi
Inc./Dec. in Bank Borrowings
0.00 242.16
0.00
63.30
80.96
Lacs
Particulars
Aud
2007
2008
2009
2010
Aud
Aud
Est.
Proj
Long Term Sources
9.55 224.16 197.59 170.65
Long Term Uses
5.69
Surplus/Deficit
3.86 184.64 111.09 146.12
39.52
86.50
24.53
109

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SINTECH PRECISION PRODUCTS LIMITED

This is to certify that the Summer-Training Project of

SINTECH PRECISION PRODUCT

Date: 31st July 2009

Scope of the study

Global Pump Market Outlook

Sintech Precision Product Ltd. An Overview

Vision, Misson & Quality

Introduction to Working Capital Management

Significance of working capital management

Liquidity vs Profitability: Risk Return trade off

Classification of working capital

Types of working capital needs

Financing of working capital

Factors determining working capital requirements

Working capital cycle

Sources of working capital

Managing payables (Creditors)

Working Capital Analysis and its Appraisal

Suggestions and Recommendations

This project tries to evaluate how the management of working

Scope of the study

Cash is the lifeline of a company. If this lifeline deteriorates, so

The working capital is an important yardstick to measure the

First, given the level of sales and the relevant cost

accounts receivable and inventories that a firm should

Second, given these optimal amounts, what is the most

investments? To produce the best possible results, firms

The objectives of this project were mainly to study the

receivable at SINTECH PRECISION

The main purpose of our study is to render a better understanding of

To understand the planning and management of working capital at

To measure the financial soundness of the company by analyzing various

To suggest ways for better management and control of working capital at

This project requires a detailed understanding of the concept Working

The management of working capital involves managing inventories,

And, in the end, suggestions and recommendations on ways for better

SCOPE OF THE STUDY

This project will be a learning device for the finance

Through this project I would study the various methods of

The project will be a learning of planning and financing

The project would also be an effective tool for credit

This will show different methods of holding inventory and

This will show the liquidity position of the company and

Primary sources such as business magazines, current annual reports, book

A detailed study on the actual working processes of the company is also

LIMITATIONS OF THE STUDY:

We cannot do comparisons with other companies unless and until we

Future plans of the company will not be disclosed to the trainees.

INTRODUCTION TO THE INDUSTRY

no economic. Upgrading infrastructure such as energy, roads, inflation management,

GLOBAL PUMP MARKET OUTLOOK AND GROWTH

Factors affecting growth of the global pump industry:

Sintech Precision Product Ltd. An Overview

Vision, Misson & Quality

Introduction to the Company

Improve customer returns

Create value through a culture of excellence

Innovate product and service delivery

Imbibe Quality as companys bloodline

QUALITY ASSURANCE PROCEDURES

Hydrostatic machine for hydrostatic test of the casing

Dynamic balancing machine for dynamic balancing of the impeller.