PROJECT REPORT ON WORKING CAPITAL MANAGEMENT CAMPCO LTD MANGALORE

RAMYA.P

Company profile
BACKGROUND: ARECANUT is an important commercial crop in India and finds a place in all religious, social and cultural functions in India. Cultivation of Areca nut is mostly confined to states of Karnataka, Kerala and Assam, but the consumption is spread all over the country. India is considered as the largest Areca nut country in the world.

 The CAMPCO was registered on 11th July 1973 under section 7 of the Karnataka Co-operative Societies Act 1984. The marketing activity, the area has been extended to the whole country. Areca nut purchase operations were extended to Assam, Andaman and Goa but in recent years purchase operations in Assam had to be closed due to disturbances.

 Full Name : The Central Areca nut and Cocoa Marketing and Processing Co-operative Limited (CAMPCO). Status : A Co-operative Society registered under the Multi State Co-operative Societies Act, 1984. Area of operation: Karnataka and Kerala states for Membership.NoLimit for Marketing. Main Object : Procurement/Processing/Marketing of Areca nut and Since 1980 Cocoa/Cocoa Products.

 Date of Registration :11.07.1973 Date of Commencement :12.11.1973 Capital : Rs.50.00 Crores. Paid up share Capital: Rs.20.53 Crores.

 OBJECTIVES OF THE STUDY: To highlight the structure and utilization of working capital and to assess the liquidity position of the company. To study and analyze the practice adopted by the company for the Management of its working To study in detail the management of cash, inventories and account receivables.

 To analyze efficiency and effectiveness of working capital management in the firm. To analyze the structure and growth of the working capital liquidity position of the company with help of ratio analysis.

Working capital management

Working capital is the life blood and nerve centre of a business. Just as Circulation of blood is essential in the human body for maintaining life, working capital is very essential to maintain the smooth running of a business. No business can run successfully without an adequate amount of working capital.

Working capital refers to that part of firms capital which is required for financing short term or current asset such as cash, marketable securities, debtors, and inventories. In other words working capital is the amount of funds necessary to cover the cost of operating the enterprise. Every business needs adequate liquid resources in order to maintain day-to-day cash flow. It needs enough cash to pay wages and salaries as they fall due and to pay creditors if it is to keep its workforce and ensure its suppliers.

OBJECTIVES OF WORKING CAPITAL MANAGEMENT: Liquidity Profitability TYPES OF WORKING On the basis of concept 1. Gross Working Capital 2. Net Working Capital

 On the basis of Periodicity of Requirements: Fixed or Permanent working capital Temporary or Variable working capital

FINDINGS:
Inventories have captured major position in the current assets The net working capital also showed an increasing trend from past two years because the increase in current assets. It has been found that the inventory turnover ratio and the days of inventory holding have shown a fluctuating trend throughout the period of study.

 CAMPCOs borrowing is increasing over the years this may create the problem of liquidity and also the control over the company Analysis of gross working capital showed an increasing trend during the period of study. The growth rate shows fluctuating trend due to the changes in the investment in the current assets A lot of fluctuation can be seen in the cash and bank balance mainly in 2008-09, where the cash has decreased to 799lakhs

 Because of the nature of the business the company should maintain a large amount of working capital as cash inventories and as debts. It has been found that inventories have captured major position in the current assets. The sundry debtors, cash & bank balance have a fluctuating share in the total current assets. It has been found that the inventory turnover and the days inventory holding have a fluctuating trend throughout the period of study.

SUGGESTIONS:
The amount of inventory is more in current assets make an effort to bring inventory down by proper inventory management Company is not having sufficient sales promotion activities. Giving more and more advertisement through various advertisement medias can increase the sales. Promote members to invest the savings in the company in the form of deposits

 As arecas demand is reducing over the year the alternate use of areca has to be developed for the survival of the campco for a long period. Campco should go for a major job works for chocolate so that the plant can be better utilized and it can enjoy the economics of scale. Excess cash should be invested in short term securities. Research and development to find the alternative use of the area.

 The company should take necessary step to bring down the debtors collection period and inventory holding to enhance the working capital.

CONCLUSION
The study of working capital management was sincerely conducted by me in CAMPCO Ltd., to study the position of current assets and current liabilities. Working capital management is the measure of judging companys profitability. Today working capital management places an important role in the management of business. Hence the company should spend a group deal of tie in managing current assets and current liabilities.

 Thus financial manager of the company should analyze the problem in working capital and try to reach the outcome so as reduce the huge investment in working capital management The Campco to be more successful should improve its working capital management on the suggested and also implement such measures to improve the marketing strategy.

 In recent years the companys multinational firms has come in to the chocolate business. The company has further plans in increasing capacity and new technology. The company further plans for increasing sales, developed goods, advertisement media etc..