Chapter No.

1
Introduction to Study
Every financial manager is involved in financial decision making and financial planning in order to take right decision at right time, he should be equipped with sufficient past and present information about the firm and its operations and how it is changing overtime. Much of this information that is used by financial manager to take various decisions and to plan for the future is derived from the financial statements. The project, Working Capital Management of Micro Technologies India Limited focuses to analyze the working capital statements and to study different topic related ratios over the period of 4 years to determine the financial position of Micro Technologies India Limited, Mumbai. Financial analysis involves the use of various financial years WC statements. These statements do several things. First, the balance sheet summarizes the current assets, current liabilities and various parameters like inventory, Sundry Debtors, Sundry Creditors, Cash and bank balance, Provision for tax liabilities of a business at moment in time, usually the end of a financial year. Next one of the important tasks of the financial manager to reduce expenses which is directly affecting on profitability of the company. So, the schedule forming the part of the balance sheet statement summarizes the expenses of the firm over a period of time while balance sheet represents a snapshot of the firms financial position at a moment in time. Financial management is planning and controlling of financial resources of a firm with a specific objective. Since, financial management as a separate discipline is of recent origin, it is still in a developing stage. It is very crucial for an organization to manage its funds effectively and efficiently.

Importance of the study:

Financial management has assumed greater importance today as the financial strategies required to survive in the competitive environment have become very important. In the financial markets also new instruments and concepts are coming and one must say that a finance
1

manager of today is operating in a more complex environment. A study of theories and concepts of financial management has therefore become a part of paramount importance for academics as well as for practitioners but there are many concepts and theories about which controversies exist as no unanimous opinion is reached as yet. The project, Working Capital Management of Micro Technologies India Limited, further aims at discussing and understanding the concepts of financial management of Micro Technologies India Limited; the functions expect to be performed by the financial management as well as the objectives of financial managements.

Problem under the study:

As compare to last couple of years sales this year sales have been increased, as we look the net working capital management it is high as compare to last years. As per financial statement MTIL in high growth phase. By applying various academic concepts and my knowledge to find out whether, 1) Is company having efficient working capital management? 2) And what would be the reason? 3) Would MTIL make further improvement in WC management?

Scope of the study:

The management of working capital helps us to maintain the working capital at a satisfactory level by managing the current assets and current liabilities. It also helps to maintain proper balance between profitability, risk and liquidity of the business significantly. By managing the working capital, current liabilities are paid in time. If the firm makes payment to its creditors for raw material in time, it can have the availability of raw material regularly, which doesnt cause any obstacles in production process. Adequate working capital increases paying capacity of the business but the excess working capital causes more inventories, increases the possibility of delay in realization of debts.

On the other hand, absence of adequate working capital leads to decrease in return on investment. The goodwill of the firm is also adversely affected due to the inability to pay current liabilities in time. Hence, the management of working capital helps to manage all the factors affecting the working capital in the most profitable manner.

Limitations of the study:

Every project has its own limitations, so as ours. But we have to work irrespective of these limitations and find our way, so that we can achieve the required aim. Some of the limitations of our project are,

As our project is based on the data recorded by the company, we face the limitation of extracting that particular data because our access is limited for the sake of confidential information of the company. Another limitation is the un-audited MPRM statements, which leads to difference in the information of annual reports and monthly statements. The grouping of different items in the balance sheet also created hindrances for us, as it is very difficult to identify which item is clubbed with which head. But thanks to accounts personal who made it easy to understand these clubbing.

Micro Technologies (India) Ltd. is an IT based company, a leading global developer, manufacturer and marketer of security devices for its clients across the globe. Product lines include the much-needed security devices, life style and support systems and web-based software. Micro Technologies has a history of leading-edge security solutions products. This tradition continues through a singular focus on innovation, advanced technology and making the life of its clients safe, secure and manageable in terms of security, time and money one of the most important defining characteristics of a security and life support solution based company in the early 21st century. It is one of the most valued security solutions across the globe and has been accorded with many national and international awards for its growth and R & D. Micro Technologies aims at displaying not just the technological innovation and prowess but also the product diversity in various segments of vehicle, premises, mobile, other assets and now entering Energy & Health Segments.

HISTORY:
Mr. and Mrs. Sekhar is the founder of Micro Technologies (India) Ltd which was formed in the year 1992. Dr. P. Sekhar is the Chairman and Managing Director and Mrs. Jayanthi S., Executive Director of MTIL. Micro Technologies (India) Ltd is a Public listed company having an ISO 9001-2000 certification. The company under the guidance is spearheading in the field of innovative IT software solutions and security products. They have been the key driving force in conceiving and developing more than 180 innovative IT products. With several awards to the credit of the organization, like "Maharashtra IT Award", for R&D in IT sector, "Delloitte Fast 500 Asia Pacific Award" for being one amongst the 500 fastest growing companies in terms of revenue and "Dun & Bradstreet ECGC - Indian Exporters' Excellence Award", Micro Technologies under his steering has also observed a consistent growth of 70% in revenue due to these technological innovations and varied product lines.
4

VISION:
To emerge as a Global IT based Solution for customers in the field of Security, Life Style & Life Support Systems. To identify, source and deploy infrastructure, talent and resource in order to render superior Information Technology solutions worldwide.

MISSION:
To develop advanced technology products and to disseminate them through strategic alliances with emerging and existing leaders in the field of Information Technology.

To identify, source and deploy infrastructure, talent & resource to render a Qualitative and Efficient service in the field of Information Technology Worldwide.

To focus on client objectives and provide customized cutting edge solutions.

To provide innovative solutions to the global market.

GROUP COMPANIES:

Micro Technologies (India) Ltd. (MTIL)

MTIL is an IT based company, a leading global developer, manufacturer and marketer of security devices for its clients across the globe. Product lines include the muchneeded security devices, life style and support systems and web-based software. Dr. P. Sekhar is the Chairman and Managing Director and Mrs. Jayanthi S., Executive Director are the founder of Micro Technologies (India) Ltd which was formed in the year 1992.
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Micro Retail Ltd. (MRL)

MRL is subsidiary of Micro Technologies (India) Ltd, a company engaged in the area of retailing the range of Electronic Security, Software and messaging Products for vehicle, premises, and other assets. MRL plans to start its operations in "A" class cities, which includes metro and mini metro cities of India in the 1st phase than gradually to cover rest of cities.

Micro Secure Solutions Ltd. (MSSL)

MSSL is subsidiary of Micro Technologies and engaged in range of Premises security products for commercial & residential premises with an exceptionally high level of customer satisfaction, irrespective of the type of the premises. MSSL's security solutions are backed by innovative, quality driven and cost effective products developed by Micro Technologies (India) Ltd.

Micro Associates Consultancy Pvt. Ltd. (MAC)

Micro Associates Consultancy (India) Pvt. Ltd (MAC) is one of Indias emerging companies in the area of Geographic Information System (GIS) solutions, with a major presence in India and ambitions to have global footprints. MAC has been in the business of GIS since 1992, developing ranges of GIS based products catering to various segments right from government and non-governmental agencies.

CERTIFICATIONS:
ARAI Certificate EMC Certificate ERTL Certificate NASSCOM Certificate IECEE Certificate ISO 9001 : 2000 Certificate

ACHIVEMENT AND AWARDS:

Micro Technologies tied up with the CIAN Pty. Ltd. to internationally distribute the security products. Micro Technologies (India) Ltd, won 'The World Business Leader Award, 2010' and 'World Leader Business Person Award, 2010. Micro Technologies won 'The Quality Summit Award, 2010' based on the criteria of the QC100 quality mode. Micro Technologies enters the Kuwait Market with its Vehicle and Mobile Security Solutions. Micro Technologies enters the Tanzania and Mongolia market. Micro Technologies nominated on Forbes 'Best Under A Billion' List among 20 Indian and 200 Asian Companies selected out of 12000 reputed companies. Micro Technologies wins the 'Amity Corporate Excellence Award'. Awarded with the 'Deloitte Technology Fast 50 (India) Award' for two consecutive years2007 & 2008. Micro Technologies wins the Dun & Bradstreet - ECGC - Indian Exporters' Excellence Award. Micro Technologies bags Maharashtra IT Awards, 2006. Dr. A P J Kalam, former president of India, felicitates Dr. P Sekhar for his significant contribution in the security segment. Micro Technologies and Bharti Airtel Limited ties up to offer Micro LMTS (Lost Mobile Tracking System) to secure the mobile handsets of Airtel subscribers. Micro Technologies ties up with MTNL to offer Mobile security solution-Micro LMTS to its Mumbai & Delhi Subscribers. Micro Technologies has entered into a strategic agreement to market Micro Products and its licenses to Sri Lanka. Launched new security products Micro MCS (Mobile Controller System), Micro SAMS (Student Attendance Management System) & Micro WSS (Wi-Fi Security System).

Launches an exclusive range of Products such as Micro BTS (Buddy Tracking System), Micro LNTS (Lost Notebook Tracking System) and Micro ISS (Intelligent Surveillance System).

BUSINESS STRATEGY:
The Company follows a cohesive strategy in developing its business:

Creation of new products: The Company intends to provide Research & Development along with the initiation of Innovative Technology particularly with a view to capitalize on the first mover advantage that it has in the IT based security industry and further plans to expand the size of its market, while mitigating business risk by reducing its dependence on only a few products.

Expansion and enhancement of products: The Company intends to expand and enhance its range of products. The Company operates in a highly technical and dynamic field. The Company believes that the key to success is to offer innovative and technologically advanced products.

Developing marketing and sales alliances: The Company intends to grow and strengthen its strategic alliances with distributor networks, which will assist the Company in sales and delivery.

Geographical expansion of product offerings: The Company intends to further expand the client base for its product offerings. The Company proposes to carry out the expansion with the help of strategic acquisitions and by entering into strategic alliances, with a view to eventually establishing a greater presence in new markets.

Maintenance of the existing customer base: The Company trains the staff at Micro Shoppes, enabling them to meet any customer requirement. The Company also maintains a 24-hour customer care service. Further, as the Company develops its portfolio of products and services, its existing customer base should continue to grow.

Brand equity: The Company intends to invest in developing and enhancing recognition of its brands, including its corporate name, through brand building efforts, communication and promotional initiatives such as interaction with industry research organizations, participation in industry events, public relations, media campaigns and investor relations efforts.

Maintaining strategic focus on the Indian market: The Company believes that India remains strategically important to its growth. The Company intends to continue to focus on growing its businesses in India. It will also continue to utilize the experience and expertise gained through Indian operations to expand globally.

Growth through acquisitions: The Company evaluates potential acquisition targets that offer an opportunity to grow its business by increasing its international presence.

Subsidiary Formation: The Company concentrates in forming subsidiaries for its main product line so as to create an impact and concentrate on the product based market segment.

PRODUCTS:

Micro VBB is an anti-theft vehicle security system. The crux of Micro VBB lies in the various sensors installed in your car. The moment there is an unauthorized activity in your vehicle, you get an SMS alert on to your mobile, or an email.

Micro FMS can be used to manage a fleet of vehicles efficiently using an online inventory system, which can process a variety of data and generate reports to suit various requirements. Micro FMS provides road transport companies and private fleets with a comprehensive, integrated suite of functions and services to address the end-to-end transportation process from vehicle dispatch through logistics management and settlement.

Micro Bike Security System is a small hardware device developed for the security of all type of two wheeler vehicles. Micro BSS comprises of a compact hardware unit which is fitted on to the bike, along with a small receiver unit. In the event of movement or tampering of the bike, the owner is immediately alerted through an alarm. Micro Bike Security System with its innovative features has a real-time alert system which alerts the user immediately as soon as anyone tampers with the bike.

Micro HSS is a premises security system, which can also be customized to specification and is available with various features and in different models to suit cost and
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functional requirements. It is a security system deployed on the premises to alert the registered user through SMS in case of any unauthorized or prohibited access in the user's premises.

Micro ACS is a menu driven software with GUI interface, which is use for office management. This software is an attendance monitoring and employee management system, generating variety of reports. Its user-friendly screen makes it easy to use with online and offline help. An effective mode of office management which is very less time consuming with its unique feature of instant report generation and tracking of the required information. It's a menu driven software with user friendly screen.

Micro LNTS (Lost Notebook Tracking System) is embedded on notebook hard drives, allowing systems to be tracked as soon as they are connected to the Internet. Micro LNTS not only tracks & recovers stolen computers - it deters theft. When a laptop is loaded with Micro Lost Notebook Tracking System, tracking-agent software silently connects with the company's monitoring centre whenever the device is connected to the Internet. If that notebook is reported stolen or lost, its location is tracked and the owner can recover the stolen property. They may login to their web-based personal tracking and monitoring page through www.microlnts.net to view and trace where their laptop has been accessed that too from any corner of the world. Micro LNTS is far more efficient and competitive to existing low end products available in the market include Regular Emails for computer/notebook.

Micro SAMS is a database management system with attendance record of Student and Lecturer remotely from various Locations - across the globe at one single point. The authorized administrator can use the online Micro SAMS to remotely view all the relevant details
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of all the branches of the Institution. Micro SAMS generates various MIS reports in order to take prompt action related to Attendance. RFID/ Biometric based login and logout for Lecturer, students and guest lecturers with image captured using webcam for attendance. The system alerts the administrator about the discrepancy. SMS/Email alert to the authorized user.

Micro Power Sinewave Home UPS is an exceptionally powerful top of the line technology product based on Digital Signal Processing with in-built Smart Battery management, 5 stage battery Charge Control System and an in built Diagnostic aid. It has seven audio alarms to give an idea about Reset, System Fault, Overload, Short Circuit, Low Battery, Water Reminder or if there is a weak DC connection.

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ORGANIZATIONAL STRUCTURE:

ID
Dr.Deshmukh

ED
Mrs. Jayanthi S.

Chairman & MD
Dr. P. Sekhar

ID
Mr. Anant Kale

ID
Mr. Bhave

CEO
Mr. Karthikeyan R

COO
Mr. Mukund Gupta

SOFTWARE DEVELOPMENT DEPT

CFO
Mr. Ganapathy

HUMAN RESOURCE DEPT

MARKETING DEPT

PRODUCTION DEPT

CORPORATE FINANCE

INTERNAL FINANCE

ACCOUNT DEPT

TREASURY DEPT

Above chart includes three level : 1) Corporate Level : It includes Board of directors (MD , Executive Director , Independent Directors, CEO, COO ) 2) SBU Level : It includes head of the department (CFO, Head of the Marketing Manager etc.) 3) Functional Level : It includes various sub Departments.

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BRANCHES & LOCATION:

Registered Office : MICRO TECHNOLOGIES (INDIA) LTD C-46, Electronic Sadan 1, 3rd Floor, Electronic Zone, MIDC, Mahape, Navi Mumbai-400 709. Tel : (91) (022) 2768 6687 / 2768 6689 Fax : (91) (022) 2762 0688 Corporate Office : MICRO TECHNOLOGIES (INDIA) LTD Futech Park EL-225, T.T.C Industrial Area, M.I.D.C, Mahape, Navi Mumbai-400 709. Tel : (91) (022) 2761 2761 Fax : (91) (022) 2761 2731 www.microtechnologies.net

Micro Secure Solution Ltd. & Micro Retail Ltd.

D-4, Udyog Sadan-3, Opp. SEEPZ, Central Road, Marol M.I.D.C., Andheri East, Mumbai - 400 093. Tel: +91-22-40743000-3029 Fax:+91-22-40743030 www.microsecure.net www.microretail.biz Micro Associates Consultancy (India) Pvt Ltd. Flat No:31 Bandal Dhankude Plaza, S.No:97/8/1/149 Part, Bhusari Colony, Paud Road, Kothrud, Pune-411038 www.microassociates.co.in

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TURNOVER : Annual Turnover of the Micro Technologies India Ltd

(Rs crore)

Financial Year Annual Turnover

2009-10 310.22

2008-09 230.67

2007-08 171.02

2006-07 07 106.36

2005-06 58.67

Annual Turnover
350

Amount In Crores

310.22 230.67 171.02 106.36 58.67 Annual Turnover

300 250 200 150 100 50 0 2005-06 2006 2006-07 2007-08 2008-09 2009-10

Financial Year

MANPOWER DETAILS DETAILS:

Micro Group generating employment to develop social responsibility. More than 500 regular and consultant employee are working with the company.

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CLIENTS:

Other Clients:
M.S.E.B. DAE N.M.M.C. ATLAS APCO MANTRALAYAN SICOM LTD AUTOFIN LTD M.P.C.B. TATA HONEYWELL B.P.C.L. TVS LUCAS BARC MMD CIDCO M.C.G.M.

New launch product : MICRO TECHNOLOGIES LAUNCHES MICRO JAI KISAN ~ Secured remote Water Management Tool for Rural India~

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Chapter No. 3
Objectives of the Study

To study of the financial position of the company. To find out liquidity of the company. To study of receivables management of the company. To analyze of Financial Statements.

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Chapter No. 4
Review of Literature
Working capital concepts comes from cash conversion process in cash with in various organizational activities like purchase of row material on cash and credit basis, processing on row material, Inventory of finished goods, sales on cash as well as credit basis, when company sale goods to the customer on credit basis seller become debtors and collection of debtors. All this process takes time and this time period blocks money, this is known as working capital and whole cycle is known as operating cycle.

I studied following concepts for analyze MTILs from this book are as follows,

No.
1)

Books
Financial Management

Author
M. Pandey

Publication
Vikas Publishing House Pvt. Ltd.

Edition / Year
9th EDITION : 2006

Operating Cycle: It is the time period involved in the conversion of raw material/resources into finished goods or services including the credit period involved for selling products/services.

The operating cycle is the length of time between company outlay on row material, wages, expenses and inflow of cash from sale of goods. The quicker operating cycle leads in increase in profitability of the firm. The length of operating cycle is the indicator of efficiency in management of short term funds and working capital.

As you seen Micro Technologies India ltd., is security product and software base company hence operating cycle includes all above discussed parameters.

18

Below chart shows operating cycle for product base company,

Cash

Debtors

Creditors

Operating Cycle

Sales

Raw Material

Finished Goods

Work in Progress

Operating Cycle = RM + WIP + FG + DB - CR

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No.
2)

Books
Financial Management

Author
Ravi M. Kishor

Publication
Taxman Publication Pvt. Ltd.

Edition / Year
7TH EDITION : Jan 2009

As per my topic Working Capital Management I referred various concepts from following books. Working Capital refers to a firms investment in short term assets. Working capital is the excess of current assets over current liabilities. It is also called as circulating capital, fluctuating capital and revolving capital. The working capital emphasis on how much current assets have been financed out of long term funds.

Working Capital = Current Assets - Current Liabilities

In business two types of assets are used, 1. Fixed assets 2. Current Assets Fixed Assets are used in business for a long period and they are not purchased for the purpose of selling them to earn profit. Current Assets are used for day-to-day operation of business. Current assets include cash, bank, stock, debtors, bill receivables, marketable securities etc. The capital employed in these assets is called working capital. The CA are those assets which are convertible in to cash within period of one year and are required to meet the day to day operations of the business. Hence in any business there should be proper balance between fixed capital and Working capital for efficient operation of business. Current Liabilities are those liabilities, which are to be paid in short period i.e. one year or within normal operating cycle. These include creditors, bills payable, bank overdraft, short-term loans, and outstanding expenses. The CL are those claims by outsiders which are expected to mature for payment within an accounting period.
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No.
3)

Books
Financial Management

Author
Khan & Jain

Publication
Tata McGrawHill Publishing Company Ltd.

Edition / Year
4TH EDITION : 2008

Balance Sheet Approach: 1) Gross Working Capital 2) Net Working Capital

Grows Working Capital refers to the firms investment in current assets only. Net Working Capital refers to excess of current assets over current liabilities.

Permanent Working Capital: It refers to the need of minimum level working capital to carry the firm business irrespective of change in level of sales or production. It is also known as fixed working capital or regular working capital. Temporary Working Capital: It is extra working capital over and above the permanent working capital needed to support the changing business activities and level of production and sales. It is also called as fluctuating working capital. Zero Working Capital: If current assets are equal to current liabilities then working capital will be zero. Positive Working Capital: It refers to excess of current assets over current liabilities. Negative Working Capital: In case current liabilities are more than current assets, the working capital will be called negative working capital.

Working capital management is concerned with the problems that arise in attempting to manage the current assets, current liabilities and the inter-relationship that exists between them.
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No.
4)

Books
Financial Management

Author
Dr. Satish M. Inamdar

Publication
Everest Publication Pvt. Ltd.

Edition / Year
4TH EDITION

As you seen Micro Technologies India Ltd. Company in security products and software development business hence I need to study following factors those are affecting companies requirement of working capital. The amount of working capital is depends upon the following factors:

1) 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 that too on cash basis. As such, no founds are blocked in piling inventories and also no funds are blocked in receivables. E.g. public utility services like railways, infrastructure oriented project etc. Their requirement of working capital is less. On the other hand, there are some businesses like trading activity, where requirement of fixed capital is less but more money is blocked in inventories and debtors.

2) Length of production cycle

In some business like machine tools industry, the time gap between the acquisition of raw material till the end of final production of finished products itself is quite high. As such amount may be blocked either in raw material or work in progress or finished goods or even in debtors. Naturally there need of working capital is high.

3) Size and growth of business

In very small company the working capital requirement is quit high due to high overhead, higher buying and selling cost etc. as such medium size business positively has edge over the small companies. But if the business start growing after certain limit, the working capital requirements may adversely affect by the increasing size.

4) Business/ Trade cycle

If the company is the operating in the time of boom, the working capital requirement may be more as the company may like to buy more raw material, may increase the
22

production and sales to take the benefit of favourable market, due to increase in the sales, there may more and more amount of funds blocked in stock and debtors etc. similarly in the case of depressions also, working capital may be high as the sales terms of value and quantity may be reducing, there may be unnecessary piling up of stack without getting sold, the receivable may not be recovered in time etc.

5) Terms of purchase and sales

Some time due to competition or custom, it may be necessary for the company to extend more and more credit to customers, as result which more and more amount is locked up in debtors or bills receivables which increase the working capital requirement. On the other hand, in the case of purchase, if the credit is offered by suppliers of goods and services, a part of working capital requirement may be financed by them, but it is necessary to purchase on cash basis, the working capital requirement will be higher.

6) Profitability
The profitability of the business may be vary in each and every individual case, which is in turn its depend on numerous factors, but high profitability will positively reduce the strain on working capital requirement of the company, because the profits to the extent that they earned in cash may be used to meet the working capital requirement of the company.

7) Operating efficiency
If the business is carried on more efficiently, it can operate in profits which may reduce the strain on working capital; it may ensure proper utilization of existing resources by eliminating the waste and improved coordination etc.

So, the main objective of working capital management is to manage current assets and current liabilities so that: -

There should be full utilization of fixed assets. There is an increase in Debt capacity and Goodwill. There is the advantage of favorable opportunities.

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No.
5)

Books
Management of Working Capital

Author
K. V. Smith

Publication
McGraw-Hill New York Publication Ltd.

Edition / Year
3rd EDITION :2002

I needed to study various concepts from books to find out liquidity of the Micro Technologies India Ltd; hence I referred following book, Ratio Analysis: The accounting ratios are used to describe significant relationships which exist between figures shown in the financial statement. A ratio is a quotient of two numbers and the relation is expressed between two accounting figures.

Source: Website : http://en.wikipedia.org/wiki/Financial_ratios

Liquidity Ratio:
The liquidity ratio measures the liquidity of the firm and its ability to meet its maturing short term obligations. Current Ratio: A current ratio of 2:1 indicates a highly solvent position. Current Assets, Loans & Advances Current Ratio =----------------------------------------------------Current liabilities & Provision

Quick / Liquid / Acid Test Ratio: An acid test ratio of 1:1 indicates a highly solvent position. Current Assets, Loans & Advances - Inventories Acid Test Ratio =-----------------------------------------------------------------Current liabilities & Provision Bank Overdraft

Absolute Liquid / Super Quick Ratio: The ideal absolute liquid ratio is taken as 1:2. Absolute Liquid Assets Absolute Liquid Ratio =----------------------------------------------------Current liabilities

Liquid Assets = Cash in hand + Marketable Securities + Debtors

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Chapter No. 5
Methodology of Study
To fulfill the project objective, I need specific primary and secondary information & specific structured format to achieve ultimate goal hence I referred following research methodology book.

Types of data:
1) First type is the primary data which was collected personally to be used and studied to prepare and reach the objectives already mentioned.

2)

The secondary data which was already prepared so these data was only

used to reach the aims and objectives of this project. These data has been collected from the financial reports of the company

Collection of Data:
The sources of collecting the primary data was through interviews, observation and questionnaire, however the secondary one was collected from the financial statements already available to the employees of the company and some of which was published.

A)

Questionnaire

This method of data collection is quite popular. In this method a questionnaire which consists a set of questions in a definite form - is send to the person concerned with a request to answer the questions and return the questionnaire. The respondents have to answer the questions on their own. For the purpose of fulfilling different parts of my project, I prepared a limited number of questionnaires in digital form. These questionnaires were e-mailed to the related persons in the company. I had to use the email since the company had a policy of reducing paper work by means of e-mail, so everybody had an email that had to be checked regularly. Therefore all the issues in the company were announced through these emails. And I have found it an effective way of collecting the data I required.
25

B)

Personal Interview

Personal Interview method requires a person known as the interviewer asking questions generally in a face to face contact to the other person or persons. In some cases, I had the chance to ask my questions personally from the Head of Finance as well as Accounting department and Head of Administration Department regarding the information I needed.

Different questions and information I could collect during these two methods are:

The beginning and history of the MTIL Company. Numbers of staff working for different departments. The vision and mission of the company About the subsidiary companies, major clients, business partners of MTIL. Areas of operations. Other company related information.

C)

Printed and Digital Sources

The secondary data I collected was through the study of the financial statements already existed in the company in form of printed files or digital files reserved in the company for further references. I had chosen these files because of the reliability and suitability of this information which I was also sure about the accuracy of them.

These files consist of: Annual report of the company. ( Financial Year 2009-10) Financial balance sheets, ( Last four years) Income statements ( Last four years) Financial reports ( Last four years) Different reports prepared by Finance Department

26

Tool and Techniques of Data Analysis:

Microsoft Excel was used for tabulation of data, percentages are drawn for generalizing the study and graphs are used for having better pictorial representation as well as various financial tools and techniques like Comparative Analysis and Ratio Analysis used for working capital analysis.

Research Design:
Method of the Study

Objectives

Collection of Data

Primary Data

Secondary Data Annual Report Financial Statements Web Sites Books

Interview

Data Analysis & Interpretations

Observations & Findings

Conclusions & Suggestions

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Chapter No. 6
Data Analysis & Interpretation
For the purpose of study of working capital management we need to analyze various parameters of the working capital those parameters are as follows,

1) Inventory :
It includes raw material and finished goods. As you seen MTIL is in security product business company to need maintain stock of electronic components like PCB ( Printed Circuit Boards ), Capacitors, Resistors, UID cards, Cameras, Fire Detectors, etc. As well as various finished products like MicroHSS, MicroLMTS & some software products also to meet market requirements.

2) Debtors :
A debtor is an entity that owes a debt to someone else. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this debt arrangement is a bank, the debtor is more often referred to as a borrower. Debtors means credit sales, company management always adopt different credit policies for different clients. Before allowing credit to the company always clients credit worthiness, market position and order of quantity. And if you seen the companies client base most of the clients form government sector like ( HPCL , M.S.C.B., Cidco ) and generally they always demand for long credit payment and period.

3) Cash and Bank balance :

To maintain liquidity (Sound Position), and for making short payments company always maintain cash in their treasury account and some bank balance with banks.

4) Loan and Advances :

Every company always borrowing funds from bank for working capital in the form of loans and as you seen MTIL is in software development also hence before starting any project company takes advance from client which will be helpful to maintain liquidity.
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5) Sundry Creditors :
As you seen MTIL is in security product business company need to maintain stock of electronic components hence company always purchases in bulk amount. Purchasing in huge quantity always benefited for the company because sellers always allow discount on bulk purchase as well as credit also hence Sundry creditor is the important liability of the company. Micros one arm working on GIS technology and company having wide range of security products like vehicle tracking system, pet tracking system etc. which is required Maps that micro purchasing from international supplier like Google, MAP24, ASP MAP which generally not allowing maximum credit.

6) Provisions :
Company always keep some provision for shortly payment made proposed dividend, various taxes ( Income Tax, Dividend Tax), Payment of the gratuity etc. which is treated as a current liabilities.

7) Current ratio :
The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets and current liabilities. Generally current ratio of 2:1 indicates a highly solvent position

8) Quick ratio :
The Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to immediately extinguish or retire its CL. Quick Assets include those CA that presumably can be quickly converted to cash at close to their book value. Generally Acid Test ratio of 1:1 indicates a highly solvent position.

9) Absolute Liquid Ratio :

Super Quick Ratio includes which includes only cash in hand, marketable securities like bonds and commercial paper etc. and Debtors but micro did not use any marketable security. The ideal absolute liquid ratio is taken as 1:2.

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WORKING CAPITAL MANAGEMENT

TABLE 1: Analysis between Inventories & Net Working Capital
MICRO TECHNOLOGYIES (INDIA) LIMITED, Statement Shows Relation between Inventories & NWC AS AT 31st MARCH, 2010

(Rupees in million)

Particulars Total Inventories NET WORKING CAPITAL % of WC

2006-07

2007-08

2008-09

2009-10

196.79 380.44 512.11 700.54 821.56 1200.85 1727.43 2244.93 23.95 31.68 29.65 31.21 * Figures are rounded off all the nearest decimal
*Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Graph 1:

Inventories & NWC

2500.00

Rupees in million

Total Inventories 2000.00 1500.00 1000.00 821.56 500.00 196.79 0.00 2006-07 2007-08 2008-09 380.44 512.11 NET WORKING CAPITAL 1200.85 1727.43

2244.93

700.54

2009-10

Financial Year

Interpretation:

As you seen the nature of the business also affecting on working capital

MTIL Company is developing softwares and software Development Company has to carry maximum inventories. In FY 2009-10 Inventories of company shows almost 31.21% of the NWC. The inventory is the main component of the working capital and its contribution in the working capital is increasing.
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TABLE 2: Analysis between Debtors & Working Capital

MICRO TECHNOLOGYIES (INDIA) LIMITED, Statement Shows Relation between Sundry Debtors & NWC AS AT 31st MARCH, 2010

Particulars Debtors NET WORKING CAPITAL % of WC

2006-07

2007-08

(Rupees in million) 2008-09 2009-10

381.81 690.95 981.98 1166.58 821.56 1200.85 1727.43 2244.93 46.47 57.54 56.85 51.97 * Figures are rounded off all the nearest decimal
*Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Graph 2:

Sundry Debtors & NWC

2500 Debtors 2000 Rupees in millian 1500 1200.85 1000 821.56 500 0 2006-07 2007-08 2008-09 2009-10 381.81 690.95 981.98 1166.58 NET WORKING CAPITAL 1727.43 2244.93

Financial Year

Interpretation:
The debtors are 44.35% of the working capital in the year 2005-06 but it was increased continuously next three years and it has reduced to the 48.85% in FA 2009-10. It s good but there can be more decrease.
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TABLE 3: Analysis between Creditors & Working Capital

MICRO TECHNOLOGYIES (INDIA) LIMITED, Statement Shows Relation between Sundry Creditors & NWC AS AT 31st MARCH 2010

Particulars Sundry Creditors NET WORKING CAPITAL % of WC

2006-07
13.58

2007-08
50.91

2008-09
221.91

(Rupees in million) 2009-10

269.62

821.56 1.65

1200.85 1727.43 2244.93 4.24 12.85 12.01 * Figures are rounded off all the nearest decimal
*Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Graph 3:

Sundry Criditors & NWC

2500 2000 Rupees in million 1727.43 1500 1200.85 1000 821.56 500 221.91 0 13.58 2006-07 50.91 2007-08 2008-09 2009-10 269.62 Sundry Criditors NET WORKING CAPITAL 2244.93

Interpretation:

The creditors contribution in the working capital is increasing that indicates

MTIL is started operating more on credit rather than cash purchases and companys other overhead expenditures are also on credit. It is good but till our credit expenses like interest on these credits does not cross the cost of investing in working capital in cash purchases and expenses. The creditors also include advances paid by the customers.

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TABLE 4: Analysis of Working Capital & Sales

MICRO TECHNOLOGYIES (INDIA) LIMITED, Statement Shows Relation between NWC and Sales AS AT 31st MARCH, 2010

Particulars NET WORKING CAPITAL SALES % of Sales

2005-06 612.86 585.57 104.66

2006-07

2007-08

(Rupees in millions) 2008-09 2009-10

821.56 1200.85 1727.43 2244.93 1067.76 1719.76 2306.67 3102.24 76.94 69.83 74.89 72.36 * Figures are rounded off all the nearest decimal
*Source : Financial Statement Year 2009-10 *Date : 31-March-2010

Graph 4:

Working Capital & Sales

3500.00 3000.00 Rupees in million 2500.00 2000.00 1719.76 1500.00 1000.00 500.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 612.86 585.57 1067.76 821.56 1200.85 1727.43 NET WORKING CAPITAL SALES 2306.67 2244.93 3102.24

Interpretation:
The working capital requirement as a percentage of sales is decreasing every year. In FY 2005-06 it was 111.66% of sales but in the current year the working capital required has reduced up to 77% of sales this reduction is the good sign of the increasing efficiency of the company. It resembles that the MTIL is able to generate more sales in less amount of working capital.
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TABLE 5: Analysis of Sundry Debtors & Sales

MICRO TECHNOLOGYIES (INDIA) LIMITED, Statement Shows Relation between Debtors & Sales AS AT 31st MARCH, 2010

Particulars Debtors SALES % of Sales

2005-06 289.98 585.57 49.52

2006-07

2007-08

(Rupees in millions) 2008-09 2009-10

381.81 690.95 981.98 1166.58 1067.76 1719.76 2306.67 3102.24 35.76 40.18 42.57 37.60 * Figures are rounded off all the nearest decimal
*Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Graph 5:

Debtors & Sales

3500 3000 Rupees in million 2500 2306.67 2000 1719.76 1500 1000 500 0 2005-06 2006-07 2007-08 2008-09 2009-10 585.57 289.98 381.81 1067.76 690.95 1166.58 981.98 Debtors SALES 3102.24

Interpretation:
As per Table-5, if we analyze the debtors as compared to the net sales of the last 2 years the debtors of our company are continuously decreasing as a percentage of sales, which is a good sign that we are not blocking our capital. But as compare to company growth rate sundry debtors are in under control.
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TABLE 6: Analysis of Sundry Creditors & Sales

MICRO TECHNOLOGYIES (INDIA) LIMITED, Statement Shows Relation between Creditors & Sales AS AT 31st MARCH, 2010

Particulars Sundry Creditors SALES % of Sales

2005-06
13.58

2006-07
50.91

2007-08
221.91

(Rupees in million) 2008-09 2009-10

269.62

1166.58 585.57 1067.76 1719.76 2306.67 3102.24 2.32 4.77 12.90 11.69 37.60 * Figures are rounded off all the nearest decimal
*Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Graph 6:

Criditors & Sales

3500 Sundry Criditors 3000 SALES Rupees in million 2500 2306.67 2000 1719.76 1500 1000 500 0 585.57 13.58 2005-06 50.91 2006-07 221.91 2007-08 269.62 2008-09 2009-10 1067.76 1166.58 3102.24

Interpretation:

The creditors as a percentage of sales show the sales we are generating are

from credit purchases up to what extent. If more sales are there from credit then the working capital required will be less. In the above table the creditors as a percentage of sales have increased slightly in the year 2008-09 but next FY 2009-10 it indicates drastic change almost 37.60% of sales. MTIL should try to increase this percentage so that more sales will not require more working capital, as the raw material can be availed on credit.
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TABLE 7: Analysis

of Current Assets

MICRO TECHNOLOGYIES (INDIA) LIMITED, STATEMENT SHOWS GROSS WORKING CAPITAL AS AT 31st MARCH, 2010 MENT (Rupees in million) 31.3.2007 31.3.2008 31.3.2009 31.3.2010 Particulars CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash & Bank Balance Loans & Advances TOTAL CURRENT ASSETS (A) or GROSS WC

196.79 380.44 512.11 700.54 381.81 690.95 981.98 1166.58 239.01 111.00 368.83 416.29 94.11 281.84 187.85 418.60 911.72 1464.23 2050.77 2702.01 * Figures are rounded off all the nearest decimal
*Source : Financial Statement Year 2009-10 2009 *Date : 31-March-2010 31

Graph 7:
3000.00 2500.00

Gross Working Capital

418.60

Rupees in million

2000.00 187.85 1500.00 1000.00 500.00 0.00 281.84 111.00 981.98 690.95 380.44 2007-08 368.83 1166.58 416.29

94.11 239.01 381.81 196.79 2006-07

512.11

700.54

Loans & Advances Cash & Bank Balance Sundry Debtors Inventories

2008-09 2009-10

Financial Years

Interpretation: Graph-7 indicates, in the FY 2008 and 2009-10 there is also continuously 2008-09 10
increasing in sundry debtors and inventory which indicates increase in sales.
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TABLE 8: FOUR YEARS WORKING CAPITAL SUMMARY

FOUR YEARS WORKING CAPITAL SUMMARY MICRO TECHNOLOGYIES (INDIA) LIMITED, STATMENT SHOWS WORKING CAPITAL AS AT 31st MARCH, 2010 (Rupees in millions) 31.3.2007 31.3.2008 31.3.2009 31.3.2010 Particulars CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash & Bank Balance Loans & Advances TOTAL CURRENT ASSETS (A) or GROSS WC LESS : CURRENT LIABILITIES Sundry Creditors Other liabilities Unclaimed Dividend Provision for Income Tax Provision for Proposed Dividend Provision for Dividend Tax Provision for Gratuity TOTAL CURRENT LIABILITIES (B) NET WORKING CAPITAL (A-B)

196.79 381.81 239.01 94.11 911.72

380.44 690.95 111.00 281.84 1464.23

512.11 981.98 368.83 187.85 2050.77

700.54 1166.58 416.29 418.60 2702.01

13.58 11.55 0.58 40.51 21.00 2.94 90.16

50.91 90.75 0.65 95.42 21.93 3.72 263.38

221.91 14.83 0.65 73.12 10.97 1.86 323.34

269.62 43.28 0.85 109.16 25.79 4.38 4.00 457.08

821.56 1200.85 1727.43 2244.93 * Figures are rounded off all the nearest decimal *Source :Annual Report 2009-10; Financial Statements Year 2009-10 *Date : 31-March-2010

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Interpretation:
With reference to five years working capital summary Table-8, orking Table The above statement shows from the year 2007 to 2010 the requirement of the working atement capital increased drastically from 612.86 million to 2244.93 million which shows MTIL which increasing their Current Assets. It indicates growth rate of the Micro Technologies India Limited is high.

GRAPH 8: Growth shows Net Working Capital

Net Working Capital

2500.00 NET WORKING CAPITAL 2000.00 1727.43 Rupees in million 1500.00 1200.85 1000.00 821.56 500.00 2244.93

0.00 year 2006 2007 2008 2009

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TABLE 9: Table shows Percent Change in Working Capital

Percent Change in Working Capital Particulars
% change in working Capital % change in CA % change in CL

2006-07 07
34.05 36.09 57.93

2007-08
46.17 60.60 192.13

2008-09
43.85 40.06 22.77

2009-10
29.96 31.76 41.36

*Source : Financial Statement Year 2009-10 2009 *Date : 31-March-2010 31

Graph 9 :

Percent Change in Working Capital

250 % change in working Capital 200 % change in CA % change in CL 150

Percent Change

100

50 34.05 36.09 57.93 46.17

192.13

60.6

43.85

40.06

22.77

29.96

31.76

41.36

0 2006-07 07 2007-08 2008-09 2009-10

Financial Year

Interpretation:
The Table- 9 shows percent change in net working capital as compare to preceding year from year 2006-07 to 2009-10 respectively 34.05%, 46.17%, 43.85% and 29.96%. 10
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In year 2007-08 shows percent change in current assets or Gross Working Capital is 60.60% which is highest in table. The main reason is increase in Inventories, Sundry Debtors, loans and Advances are respectively 93.32%, 80.97% and 199.48% as compare to preceding year as well as high sales and more receivables. The sundry debtors are increasing due to the high sales in the FY 2007-08 resulting to high average collection period, which has been analyzed under Debtor analysis.

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Calculation of Liquidity Ratio:

The liquidity ratio measures the liquidity of the firm and its ability to meet its maturing short term obligations.

Analysis of the Current Ratio:

Formula: Current Assets, Loans & Advances Current Ratio =----------------------------------------------------Current liabilities & Provision

TABLE 10: Calculations of Current Ratio:

Current Ratio
Particulars Current Assets Current Liabilities Current Ratio 2006-07 911.72 90.16 10.11 2007-08 2008-09 2009-10 1464.23 2050.77 2702.01 263.38 323.34 437.08 5.56 6.34 6.18 *Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Interpretation:

As per Table -10 current ratio of the Micro technologies India Ltd.; is very high. If we analyze last four financial years from 2006-07 to 2009-10 Current Ratios are 10.11 : 1, 5.56 : 1, 6.34 : 1, 6.18 : 1 respectively. Generally current ratio of 2:1 indicates a highly solvent position, but company having better than this. This indicates company having strong liquidity position.

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Analysis of the Quick Ratio:

Formula of the Quick / Liquid / Acid Test Ratio:

Current Assets, Loans & Advances - Inventories Acid Test Ratio =-----------------------------------------------------------------Current liabilities & Provision Bank Overdraft

TABLE 11: Calculation of Quick Ratio:

Quick / Acid Test Ratio
Particulars Current Assets Inventory ( CA - Inventory) Current Liabilities Bank OD (CL - Bank OD ) Quick / Liquid Ratio 2006-07 911.72 196.79 714.93 90.16 Nil 90.16 7.93 2007-08 1464.23 380.44 1083.79 263.38 Nil 263.38 4.11 2008-09 2050.77 512.11 1538.66 323.34 Nil 323.34 4.76 2009-10 2702.01 700.54 2001.47 437.08 Nil 437.08 4.58

*Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Interpretation:
As per Table -11 Quick ratio of the Micro technologies India Ltd.; is very high. If we analyze last four financial years from 2006-07 to 2009-10 Quick Ratios are 7.93 : 1, 4.11 : 1, 4.76 : 1, 4.58 : 1 respectively. Generally Acid Test ratio of 1:1 indicates a highly solvent position, but company having better than this. This indicates company having strong liquidity position.

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Analysis of the Absolute Liquid Ratio:

Formula of the Absolute Liquid / Super Quick Ratio: The ideal absolute liquid ratio is taken as 1:2. Absolute Liquid Assets Absolute Liquid Ratio =----------------------------------------------------Current liabilities

Where,

Liquid Assets = Cash in hand + Marketable Securities + Debtors

TABLE 12: Calculation of Absolute Liquid Ratio:

Absolute Liquid Ratio
Particulars Sundry Debtors Cash & Bank Balance Marketable Securities 2006-07 2007-08 2008-09 2009-10 381.81 690.95 981.98 1166.58 239.01 111.00 368.83 416.29 Nil Nil Nil Nil 142.80 579.95 613.15 750.29 90.16 263.38 323.34 437.08 1.58 2.20 1.90 1.72 *Source : Financial Statement Year 2009 -10 *Date : 31-March-2010

Absolute Liquid Assets

Current Liabilities Super Quick / Absolute Liquid Ratio

Interpretation:
As per Table -12 Super Quick / Absolute Liquid Ratio of the Micro technologies India Ltd.; is very low in other word we can say it is not ideal. If we analyze last four financial years from 2006-07 to 2009-10 Super Quick Ratios are 1.28 : 2, 2.20 : 2, 1.90 : 2, 1.72 : 2 respectively. Generally Absolute Liquid ratio of 1:2 indicates a highly solvent position, but company having less than this. This indicates company having less super quick assets. Even MTIL does not used marketable securities; hence company should go for that.

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Chapter No. 7
Observations & Findings

Observations :
1) MTIL software Development Company has to carry maximum inventories in FY 2009-10 Inventories of company shows almost 31.21% of the NWC. 2) The debtors were continually increasing from last three years but it has reduced by 48.85% in FA 2009-10. It s good but there can be more decrease. 3) The creditors contribution in the working capital is increasing that indicates MTIL is started operating more on credit rather than cash purchases. 4) Micros one arm working on GIS technology and company having wide range of security products like vehicle tracking system, pet tracking system etc. which is required Maps that micro purchasing from international supplier like Google, MAP24, ASP MAP which generally not allowing maximum credit. 5) In FY 2005-06 it was 111.66% of sales but in the current year the working capital required has reduced up to 77% of sales. 6) Creditors as a percentage of sales have increased slightly in the year 2008-09 but next FY 2009-10 it indicates drastic change almost 37.60% of sales. 7) In year 2007-08 shows percent change in current assets or Gross Working Capital is 60.60% which is highest in table. 8) Current Ratio is very high. If we analyze last four financial years from 2006-07 to 200910 Current Ratios are 10.11 : 1, 5.56 : 1, 6.34 : 1, 6.18 : 1 respectively. 9) If we analyze last four financial years from 2006-07 to 2009-10 Quick Ratios are 7.93 : 1, 4.11 : 1, 4.76 : 1, 4.58 : 1 respectively. 10) Super Quick / Absolute Liquid Ratio of the Micro technologies India Ltd.; is very low in other word we can say it is not ideal. If we analyze last four financial years from 2006-07 to 2009-10 Super Quick Ratios are 1.28 : 2, 2.20 : 2, 1.90 : 2, 1.72 : 2 respectively. 11) As we seen the MTIL having efficient working capital management but still micro can improve it through reduce in debtors collection period and increase on maximum credit time.
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Findings :
1) As you seen the nature of the business also affecting on working capital, MTIL software Development Company has to carry maximum inventories 2) Micro is it in growth phase as well as in Security product segment MTIL is leading company hence company need to carry maximum inventory to fulfill the market demand. 3) The debtors were continually increasing from last three years but it has reduced in financial year 2009-10. 4) The working capital requirement as a percentage of sales is decreasing every year this reduction is the good sign of the increasing efficiency of the MTIL. 5) The debtors as compared to the net sales of the last 2 years the debtors of our company are continuously decreasing as a percentage of sales. 6) The debtors as compared to the net sales of the last 2 years the debtors of our company are continuously increasing cash sales. 7) Purchase on credit from international supplier increase custom duty which affecting on companies profitability. 8) The main reason is increase in Inventories, Sundry Debtors, loans and Advances are respectively 93.32%, 80.97% and 199.48% as compare to preceding year as well as high sales and more receivables. 9) Current ratio of the Micro technologies India Ltd.; is very high. Generally current ratio of 2:1 indicates a highly solvent position, but company having better than this. This indicates company having strong liquidity position. 10) Quick ratio of the Micro technologies India Ltd.; is very high. Generally Acid Test ratio of 1:1 indicates a highly solvent position, but company having better than this. This indicates company having strong liquidity position. 11) Super Quick / Absolute Liquid Ratio of the Micro technologies India Ltd.; is very low. 12) MTIL does not used any marketable securities like commercial paper or bonds, if near future company required more working capital funding company go for that. 13) Working capital Source of funding is reserves and borrows from government and private banks.

45

Chapter No. 8
Conclusion & Suggestions Conclusions :

MTIL Company trying to reduce their inventories from last couple of years which leads to the company management efficiently managing inventories. As well as percentage of debtors has been also reduced year by year which shows company management efficiently working on increase cash sales and debtors collection period. reducing

In working capital blocked capital is too high as compare to requirement of working capital in inventories, debtors, etc. Study indicates MTIL Company is market leader in security product segment hence company can demand to the suppliers maximum credit quantity as well as credit period which helps to reduce required working capital. Company having high growth in domestic and international market hence company should carry some extra inventory which helps them to fulfill the market demand. MTIL having better liquidity position but company having high current ratio so company should be try to maintain standard or near about. As we seen Security product market segment is growing very fast hence if in future company needs any extra working capital company can use marketable securities. As we seen MTIL has better liquidity position still as compare to competitors or same security product industry average company need to increase their current ratio that is mean need to increase current assents.

46

Suggestions :
As we are the market leaders in our products and the number of competitors is also very low, we can ask for the full advance payment for domestic sales also. Thus reducing the investment in the receivables.

We should try to develop domestic suppliers for the goods we are importing so that the expense on custom duty can be reduced.

In working capital blocked capital is too high as compare to requirement of working capital in inventories, debtors, etc. company should go for aggressively reduction policy

MTIL should try to increase this percentage so that more sales will not require more working capital, as the raw material can be availed on credit.

Observation indicates company having less super quick assets. Even MTIL did not use marketable securities; hence company should go for that.

MTIL mostly concentrating only IT security products which is very good but as per company profile Company having very good position in software industry like Tracking Softwares, So company can easily enter in pure software development in domestic as well as international market.

More emphasis should be given on the advertisement and sales promotion as it has more reach than any other sales promotional tool.

For developing domestic supplier company can go for forward as well as backward integration through the acquisition process which will reduce cost and increase profitability of the company

47

Bibliography:
Books
Financial Management Financial Management Financial Management

Author
Ravi M. Kishor

Publication
Taxman Publication Pvt. Ltd. Everest Publication Pvt. Ltd. Tata McGraw-Hill Publishing Company Ltd. Vikas Publishing House Pvt. Ltd. McGraw-Hill New York Publication Ltd. New Age International

Edition / Year
7TH EDITION : Jan 2009 4TH EDITION 4TH EDITION : 2008 9th EDITION : 2006 3rd EDITION :2002 2nd EDITION : 2004

Dr. Satish M. Inamdar Khan & Jain

Financial Management Management of Working Capital Research Methodology

M. Pandey

K. V. Smith

C.R. Kothari

Internet sites: www.microtechnologies.net http://en.wikipedia.org/wiki/Financial_statement http://en.wikipedia.org/wiki/Financial_ratios http://cpaclass.com/fsa/ratio-01a.htm http://beginnersinvest.about.com/od/financialratio/Financial_Ratios.htm www.esesv.com

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