Working Capital Management for Infrastructure Firm

Mentor fms, MAIET

Presented by:Arun Verma

Introduction
Era Infra Engineering Limited (Era Infra) is an integrated infrastructure development company and is a part of Era group of companies. It involves in development of infrastructure projects for public and private sectors and operates across India. The company's clients include Bharat Heavy Electricals Limited (BHEL), Central Public Works Department (CPWD), Delhi Metro Rail Corporation Ltd, Hyderabad Growth Corridor Ltd, Indian Oil Corporation Ltd.

Working Capital Management

Meaning of Working Capital

Funds required for short term purposes or day to day expenses are working capital. WC refers to part of firms capital required for financing short term or current assets also known as revolving or short term capital or circulating capital.

Operating Cycle or Circular Flow Concept

Work in progress Finished goods

Raw material

Sales

Cash

Debtors

Classification of Working Capital

WC may be classified in two way: On the basis of concept - gross working capital - net working capital On the basis of time - permanent or fix WC. - temporary or variable WC

Objects of Working Capital

For the purchase of raw material. To pay wages & salaries. To incur day to day expenses and overhead costs. To meet selling costs. To provide credit facilities to the customer. To maintain the inventories of raw, work in progress, stores and spares and finished stocks.

Swot Analysis
Strength Employment and training opportunities in the field of company. Construction of the multi building projects on the feasible locations in the country. Sufficient availability of raw material and natural resources in the country is supportive for the industry.

Weakness
Chances of Natural disadvantage are there. Distance between construction projects reduces business efficiency. Training itself has become a challenge. Huge amount of money need to be invested in this industry.

Opportunities
Continuous private sector building boom will create more construction opportunities. Public sector projects will bring further opportunities. Financial supports like loan and insurance is support to the company. Remote areas in the country are easily accessible and plenty of land is available in the country.

Threats
Current economic situation may have an adverse impact on company. Infrastructure safety is a challenging task in construction industry. Inefficient accessibility in planning and concerning the infrastructure and signs.

Conclusion
In the years ahead, the era in India has to overcome various challenges with respect to housing, environment, transportation, power or natural hazards. Technocrats associated with the company need to employ innovative technologies to overcome these challenges. The outstanding performance under demanding situations in the past will stand in good stead and give confidence to the company.

Thank You