STUDY ON WORKING CAPITAL MANAGEMENT AT KKR GROUP OF COMPA CO MPANIES NIES (NIRAPARA) –OKKAL
Submitted by AMRUTA K !A!U C"mme#$e Ped%&"&y
CONTENTS
N"
Tit'e
P%&e N"
ABSTRACT
INTRODUCTION
,
THEORETICAL FRAMEWORK
+ -
COMPANY PROFILE DATA DATA ANALYSIS ANALYSIS AND INTERPRE INTE RPRETA TATION TION
. /*/
.
FINDINGS, SUGGESTIONS AND CONCLUSION
0*1
APPENDIX BIBLIOGRAPHY
*+ -
A!STRACT
The researcher coc!"#es $ha$ Wor%&' Ca(&$a! &s $he co$ro!!&' er)e o* a *&r+ *&r+ No -"s&es -"s&esss ca -e s"cces s"ccess*" s*"!!. !!. r" /&$ho"$ /&$ho"$ a#e0"a a#e0"a$e $e a+o"$ a+o"$ o* Wor%&' r%&' Ca(&$a! I or#&ar. (ar!ace Wor%&' Ca(&$a! &s $a%e $o -e 1$he *"# a)a&!a-!e *or +ee$&' #a. $o #a. re0"&re+e$s o* a e$er(r&se2 Wor%&' Ca(&$a! +aa'e+e$ &s cocere# /&$h $/o *ac$ors )&3 $he !e)e! o* c"rre$ asse$s $o -e he!# a# $he $.(e o* asse$s a# $he +e$ho# -. /h&ch $hese asse$s are *&ace# S&ce &)es$+e$ & c"rre$ asse$s asse$s re(res re(rese$ e$ss a s"-s$a s"-s$a$&a $&a!! (or$&o (or$&o o* $o$a! $o$a! &)es$+ &)es$+e$, e$, $he s$"#. s$"#. o* Wor%&' or%&' Ca(&$a! Maa'e+e$ -eco+es &+(or$a$ $h&s /or% a a$$e+($ &s +a#e $o ca!c"!a$e $he ecessar. ra$&os a# (re(ar&' $he s$a$e+e$s /h&ch /&!! he!( & $he aa!.s&s a# &$er(re$a$&o o* $he /or%&' ca(&$a! +aa'e+e$ To *&# o"$ $he *ac$ors &*!"ec&' /or%&' ca(&$a! & KKR 'ro"( o* co+(a&es The #a$a o-$a&e# /as aa!.3e# "s&' s$a#ar# *&ac&a! a# s$a$&s$&ca! $ech&0"es The s$"#. &s ("re!. -ase# o $he a"a! a"a! re(or$ re(or$ Wor%&' or%&' Ca(&$a! Ca(&$a! Maa'e+e$ Maa'e+e$ &s a esse$&a! esse$&a! (ar$ o* *&ac&a! *&ac&a! +aa'e+e$ +aa'e+e$ Here researcher s$"#&e# )ar&o"s ra$&os re!a$&' $o +eas"re+e$ o* $he /or%&' ca(&$a! s"ch as !&0"&#&$. ra$&o, (ro*&$a-&!&$. ra$&o, so!)ec. ra$&o, ac$&)&$. ra$&o e$c *ro+ $he .ear 455674585 $o 458978: Th&s s$"#. &s co#"c$e# $o aa!.3e /he$her $h&s *&r+ &s e+(!o.&' e+(!o.&' &$s Wor%&' or%&' Ca(&$a! Ca(&$a! e**ec$&)e e**ec$&)e!. !. a# e**&c&e$!. e**&c&e$!. *or &$s s+oo$h *"c$&o&' *"c$&o&' The researcher $o reach a coc!"s&o $ha$ $he /or%&' ca(&$a! a+o"$ sho/s $ha$ $he co+(a. &s & a (os&$&o $o +ee$ &$2s #a. $o #a. o-!&'a$&os
1
INTRODUCTION Wor%&' Ca(&$a! +a. -e re'ar#e# as $he !&*e-!oo# o* -"s&ess E)er. -"s&ess ee#s *"#s *or $/o ("r(oses ("r(oses Lo' $er+ *"#s *"#s are re0"&re# $o crea$e (ro#"c$&o (ro#"c$&o *ac&!&$&es $ho"'h ("rchase o* *&;e# asse$s, s"ch as (!a$, +ach&er., !a#, -"&!#&' e$c, *"#s are a!so ee#e# *or shor$ $er+ ("r(ose *or $he ("rchase o* ra/ +a$er&a!s, (a.+e$ o* /a'es a# o$her #a. $o #a. e;(e e;(es see e$c e$c $hese $hese *"# *"#ss are a!so a!so %o/ %o/ as Wor%& r%&' ' Ca(& Ca(&$a! $a! &s a!so a!so re)o! re)o!)& )&' ' or c&rc"!a$&' ca(&$a! or shor$7$er+ ca(&$a! Wor%&' Wor%&' Ca(&$a! ee#s are 'eera!!. *&ace# $hro"'h o"$s&#e so"rces So co$&"o"s care &s ecessar. $o "$&!&3e# $he+ & $he -es$ /a. The +a& o-
To aa!.3e !&0"&#&$., !&0"&#&$., (ro*&$a-&!&$. a# so!)ec. (os&$&o o* $he co+(a. co+(a. To aa!.3e &)es$+e$s & c"rre$ asse$s For &$era! a# e;$era! aa!.s&s o* co+(a. The ("r(ose ("r(ose o* $h&s s$"#. &s $o aa!.3e $he /or%&' ca(&$a! +aa'e+e$ +aa'e+e$ o* $he KKR
GROUPP=T LTD >NIRAPARA?7 O%%a! a# $o %o/ $he *ac$ors a**ec$&' &$s #a. $o #a. o(era$&os a# /or%&' ca(&$a!
STATEMENT STATEMENT OF TE PRO!LEM The (ro
a# so!)ec. (os&$&o o* $he co+(a. The s$"#. (ro'ress -. +a%&' "se o* Ra$&o Aa!.s&s a# Tre# Aa!.s&s *or aa!.s&' !&0"&#&$., (ro*&$a-&!&$. a# so!)ec. o* $he *&r +
SCOPE OF TE STUDY 2
The s$"#. &s &$e#e# $o o-$a& a )&e/ o* $he /or%&' ca(&$a! +aa'e+e$ (rac$&ce o* KKR GROUP OF COMPANIES >NIRAPARA?7 OKKAL a# cr&$&ca!!. e;a+&e $he *ac$ors /h&ch !e# $o $he cha'es & $he (ro*&$a-&!&$. o* $he cocer The *&ac&a! s$re'$h a# /ea%ess o* -"s&ess or'a&3a$&o sho"!# -e assesse# Th&s &s oe o* $he &+(or$a$ *"c$&os o* a *&ac&a! aa!.s$ I $h&s (ro
O!3ECTI4ES OF TE STUDY •
To
s$"#.
$he
Wor%&'
ca(&$a!
+aa'e+e$
o*
KKR
GROUP
OF
•
COMP COMPANIES> NIES> NIRAP NIRAPA ARA? -ase# -ase# o $he (as$ *&)e .ears .ears #a$a #a$a (ro)&# (ro)&#e# e# -. $he co+(a. To aa!.3e $he !&0"&#&$., so!)ec. a# (ro*&$a-&!&$. (os&$&o o* $he co+(a. To e)a!"a$e $he $re# aa!.s&s o)er a (er&o# o* $&+e To %o/ /he$her $here &s (er+ae$, $e+(orar. /or%&' ca(&$a! To *&# o"$ $he /or%&' ca(&$a! ecessar. $o co)er $he cos$ o* o(era$&' & $he
•
e$er(r&se To *&# o"$ $he *ac$ors *ac $ors &*!"ec&' /or%&' ca(&$a! & KKR 'ro"( o* co+(a&es
• • •
RESEARC METODOLOGY OF TE STUDY For $he s"ccess* s"ccess*"! "! co+(!e$&o co+(!e$&o o* o* $he (rese$ (rese$ s$"#. s$"#. $he researche researcherr o($e#
aa!.$&ca! aa!.$&ca!
+e$ho# +e$ho# The #a$a o-$a&e# /as aa!.3e# aa!.3e# "s&' s$a#ar# s$a#ar# *&ac&a! a# s$a$&s$&ca! s$a$&s$&ca! $ech&0"es $ech&0"es The (r&c&(a! $ech&0"es $ech&0"es o* aa!.s&s aa!.s&s "se# & $he (ro
TOOLS OF DATA ANALYSIS The $oo!s /ere "se# *or #a$a aa!.s&s as *o!!o/s • • • •
L&0"&#&$. ra$&os Pro*&$a-&!&$. ra$&os So!)ec. ra$&os Ac$&)&$. ra$&os
ASSUMPTION OF TE STUDY 3
•
The #a$a '&)e -. $he co+(a. o**&c&a! are $r"e a# "-&ase# The #a$a co!!ec$e# *ro+ )ar&o"s seco#ar. so"rces are $r"e
LIMITATIONS LIMITATIONS OF TE STUDY
•
The s$"#. &s ("re!. -ase# o $he a"a! re(or$ The a)a&!a-&!&$. o* $he #a$a a# &*or+a$&o are !&+&$e# #"e $o $he $&+e *ac$or The s$"#. &s o!. *or oe (ar$&c"!ar co+(a. So &$er *&r+ co+(ar&so &s o$ (oss&-!e
•
#"e $o o7a)a&!a-&!&$. o* #a$a re'ar#&' o$her e$er(r&ses F&ac&a! s$a$e+e$s are 'eera!!. -ase# o h&s$or&ca! cos$ The C"rre$ (os&$&os are
•
&'ore# The -"s. /or% sche#"!e o* o**&cers res$r&c$e# $o 'e$ #e$a&!e# &*or+a$&o
•
TEORETICAL !ACKGROUND !ACKGROUND OF TE STUDY Wor%&' Wor%&' Ca(&$a! &s $he !&*e-!oo# o* -"s&ess -"s&ess a# $he co$ro!!&' co$ro!!&' er)e ce$re o* $he -"s&ess To r" a -"s&ess e**&c&e$!., a a#e0"a$e a+o"$ o* Wor%&' Wor%&' Ca(&$a! &s )er. 4
esse$&a! Th"s Wor%&' Ca(&$a! +aa'e+e$ *or+s a &$e'ra! (ar$ o* o)era!! cor(ora$e +aa'e+e$ Wor%&' Ca(&$a! &s $he a+o"$ o* *"#s, /h&ch $he co+(a. sho"!# ha)e & or#er $o *&ace &$s #a.7$o7#a. o(era$&os The *&ace +aa'er &s cos$a$!. e'a'e# & e#ea)o"r&' $o +a&$a& a so"# /or%&' ca(&$a! (os&$&o E;cess&)e Wor%&' Ca(&$a! !ea#s $o " re+"era$&)e "se o* scarce reso"rces a# &a#e0"a$e Wor%&' Ca(&$a! &$er(re$s $he s+oo$h *!o/ o* -"s&ess ac$&)&$. a# (ro*&$a-&!&$. The -a!ace a!!oca$&o o* $he Wor%&' Ca(&$a! *"#s -e$/ee &)e$or&es, -oo% #e-$s a# o$her co+(oe$s o* Wor%&' Wor%&' Ca(&$a! &s cr"c&a! (hase as Wor%&' Wor%&' Ca(&$a! Maa'e+e$ The (ro*&$a-&!&$. a# so!)ec. are ar e $/o o-
COMPANY PROFILE*INTRODUCTION The KKR 'ro"( /as se$ "( & 86 -. MrKKKara, MrKKKara, a +a /ho se$ o"$ /&$h $he )&s&o $o -r&' 0"a!&$. r&ce & $o $he $ra#&$&oa! ho+es o* Kera!a & So"$h I#&a A )e$"re /h&ch s$ar$e# o"$ /&$h $ra#&$&oa! +e$ho# o* -o&!&', s" #r.&' a# +&!!&', 're/ &$o oe o* 5
$he +os$ +o#er r&ce (rocess&' ho"ses & I#&a /&$h $he !a$es$ /or!#7c!ass $echo!o'. $o#a. KKR M&!!s -oa$s o* a s$a$e o* $he ar$ (!a$ /&$h $he h&'hes$ !e)e! o* $echo!o'. & $he /or!# , es"r&' (ro#"c$ (ro#"c$ $ha$ +ee$ $he +os$ +os$ s$r&'e$ a# h.'&e&c s$a#ar#s The KKR 'ro"( &s o/ a!! se$ $o -eco+e -eco+e a a+e o rec%o /&$h & *oo#s *oo#s The 'ro"( has (!as $o se$ "( a *oo# (ar% /&$h & *ac&!&$&es $o (rocess a# +a"*ac$"re a /&#e ra'e o* *oo# (ro#"c$s !&%e s(&ces, (&c%!es a# o$her (ro#"c$s *or /or!# +ar%e$s The *ac$or. o* KKR M&!!s &s !oca$e# & $he 'ree, (o!!"$&o7*ree O%%a! To/sh&(, ear Koch& & Kera!a & So"$h I#&a The *ac&!&$. &s e0"&((e# /&$h $he !eas$ $echo!o'. & $he /or!# *or e)er. as(ec$ as(ec$ o* (rocess&' o* (a##.7r&'h$ (a##.7r&'h$ *ro+ #es$&&', #es$&&', c!ea&', c!ea&', #r.&', #r.&', #e7 h"s%&', -ra7re+o)a!, (o!&sh&' a# *&a!!. sor$&' $h&s &*ras$r"c$"re o* a aro"# 4 core o* r"(ees & oe o* $he !ar'es$ & I#&a KKR M&!!s &s $he o!. r&ce +&!! & So"$h I#&a $o "se $he 7sor$e; +ach&e ca(a-!e o* o($&ca! &s(ec$&o *or 0"a!&$. co$ro! Th&s +ach&e scas e)er. 'ra& o* o($&ca! &s(ec$&o *or 0"a!&$. co$ro! Th&s +ach&e scas e)er. 'ra& o* r&ce a# re+o)es #&sco!o"re#, -ro%e a# &++a$"re r&ce, es"r&' $ha$ o!. r&ce $ha$ +ee$s $he s(ec&*&ca$&o ca!&-ra$e# & $he co+("$er +&ss&o &s se!ec$e# *or (ac%a'&' The res"!$ -ea"$&*"! r&ce o* e)e s&3e, co!o"r a# -ra $ha$ &s a *eas$ *or $he e.es e .es a# a /ho!eso+e +ea! N&ra(ara $he -ra# a+e & /h&ch KKR M&!!s M&!!s +ar%e$ +ar%e$ss r&ce, r&ce, &s $o#a. $o#a. $he !ar'es$ !ar'es$ se!!&' se!!&' Bra# & Kera!a a# has -eco+e -eco+e a ho"seho!# a+e
DATA DATA ANALYSIS AND INTERPR INT ERPRETA ETATION TION These are $he $oo!s "se# *or $he s$"#. o* Wor%&' Wor%&' Ca(&$a! Maa'e+e$ RATIO ANALYSIS
6
I$ &s a &+(or$a$ &+(or$a$ $ech&0"e $ech&0"e o* *&ac&a! *&ac&a! aa!.s&s aa!.s&s I *&ac&a! *&ac&a! aa!.s&s aa!.s&s a ra$&o &s "se# as a &#e; *or e)a!"a$&' $he *&ac&a! (os&$&o a# (er*or+ace o* a *&r+ A ra$&o he!(s $he aa!.s$ $o +a%e <"#'+e$ a-o"$ $he *&r+2s *&ac&a! (os&$&o a# (er*or+ace I s&+(!e !a'"a'e, ra$&o &s o "+-er e;(resse# & $er+ o* ao$her a# ca -e /or%e# o"$ -. #&)&#&' oe "+-er & $o $he o$her CLASSIFICATION OF RATIOS5
Se)era! ra$&os ca!c"!a$e# *ro+ acco"$&' #a$a ca -e 'ro"(e# &$o )ar&o"s c!asses accor#& accor#&' ' $o *&ac *&ac&a! &a! ac$&)&$. ac$&)&$. or *"c$&o *"c$&os s $o -e e)a!"a$e# e)a!"a$e# As s$a$e# s$a$e# ear!&er ear!&er $he (ar$&e (ar$&ess &$er &$eres es$e# $e# & *&a *&ac c&a &a!! aa!. aa!.s&s s&s are are shor shor$er $er a# a# !o' !o' $er+ $er+ cre# cre#&$ &$or orss a# a# o/e o/ers rs a# a# +aa'e+e$ shor$ $er+ cre#&$or2s +a& &$eres$ &s $he !&0"&#&$. (os&$&o or $he shor$ $er+ so!)ec. o* $he *&r+ Lo' $er+ cre#&$ors +ore &$eres$e# & $he !o' $er+ so!)ec. a# (ro*&$a-&!&$. o* $he *&r+ I )&e/ o* $he re0"&re+e$ o* $he )ar&o"s "sers o* ra$&o /e +a. c!ass&*. $he+ & $o *o!!o/&' ca$e'or&es 6 4 9 :
Li7u Li7uid idit ity y R%ti R%ti"8 "855 C"rre$ ra$&o, 0"&c% ra$&o, a-so!"$e !&0"&# ra$&o P#"b%bi'ity P#"b%bi'ity R%ti"85 Ne$ (ro*&$ ra$&o, o(era$&' ra$&o, 'ross (ro*&$ ra$&o S"'9e:$y R%ti"85 De-$7 E0"&$. ra$&o, Pro(r&e$ar. ra$&o A$ti9ity R%ti" F&;e# asse$ $"ro)er ra$&o, Wor%&' ca(&$a! $"ro)er ra$&o, De-$ors
$"ro)er ra$&o, I)e$or. $"ro)er ra$&o a# Cre#&$ors $"ro)er ra$&o
RATIO ANALYSIS CURRENT RAT R ATIO IO Current Ratio = Current Assets Current Liabilities
7
YEAR
CURRENT LIA!ILITIES
CURRENT ASSET
RATIO
455674585
:9:
4698
859:
458574588
5696694
::689
8989
458874584
5:86
:49989
854:66
458474589
:5565
::48:59
5685:4
45897458:
8:45669
8::8568
56:9
TA!LE TA!LE +6
RATIO 1.6 1.4 1.2 1 0.8
RATIO
0.6 0.4 0.2 0
C;%#t +6 INTERPRETATION
The a-o)e char$ a# 'ra(h e;h&-&$s $he c"rre$ ra$&o o* $he co+(a. ,/h&ch &s sho/&' a *!"c$"a$&' $re# *ro+ 45567458: 45567458: I$ /as 8 &$ /as 'oo# 'oo# $o $he *&r+ as he &#ea! Ra$&o Ra$&o &s 48 a# $he &$ reaches $o 84 a# $he $he 4584 7 4589 #ec!&es #ec!&es 89 Th&s &#&ca$es &#&ca$es $ha$ $he *&r+ &s ha)&' h&'h !&0"&#&$. (os&$&o a# hece &$ ca +ee$ &$s o-!&'a$&os or !&a-&!&$&es
Ye%#
quick asset current liabilities
Cu##e:t Li%bi'itie8
8
R%ti"
455674585
49694
4698
545984
458574588
955:
::689
585:
458874584
445:
:49989
5:685584
458474589
84685
::48:59
54:4664:
45897458:
8984
8::8568
56:8696
T%b'e +6
RATIO 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0
RATIO
C;%#t +6 INTERPRETATION
The a-o)e char$ a# 'ra(h e;h&-&$s $he "&c% Ra$&o o* $he co+(a., /h&ch &s sho/&' sho/&' a *!"c$"a$&' $re# *ro+ 45567458: I$ /as 55 &$ /as 'oo# $he *&r+ as he &#ea! Ra$&o &s 88 a# The &$ reaches $o 5 a# he 45897458: #ec!&e 56: $h&s &#&ca$es $ha$ $he *&r+ &s ha)&' so"# *&ac&a! (os&$&o a# hece &$ ca +ee$ &$s o-!&'a$&os or !&a-&!&$&es a# +ee$ &$s !&a-&!&$&es *ro+ !&0"&# asse$s
A!SOLUTE LI
C%8;
Cu##e:t Li%bi'itie8 9
R%ti"
455674585
59
4698
54565:4
458574588
9:4
::689
5596
458874584
455
:49989
5555:4
458474589
4689
::48:59
5554
45897458:
44845
8::8568
558
T%b'e T%b'e +6, + 6,
RATIO 0.25
0.2
0.15
RAIO
0.1
0.05
0 2009 2009-20 -2010 10 2010 2010-20 -2011 11 2011 2011-2 -201 012 2 2012 2012-2 -201 013 3 2013 2013-2 -201 014 4
C;%#t +6,
INTERPRETATION Gee Geera! ra!!. !. a-so a-so!" !"$e $e !&0" !&0"&# &#&$. &$. ra$&o ra$&o 5 58 8 &s cos cos&# &#ere ere# # &#ea! &#ea! a# a# re(res re(rese$ e$ a sa$&s*ac$or. *&ac&a! (os&$&o *or a!! cosec"$&)e .ears c"rre$ !&a-&!&$&es &s !ess $ha cash c"rre$ !&a-&!&$&es #ecreas&' .ear a*$er .ear
RATIO OF CURRENT ASSET TO FI>ED ASSET
Current Asset Asset o fixed asset ratio = Current Asset Asset Fixed asset
10
Ye%#
Cu##e:t A88et
Fi?ed A88et
R%ti"
455674585
:9:
9948
848:44
458574588
5696694
945:6:
865896
458874584
5:86
9495
858
458474589
:5565
985885
8458
45897458:
8:45669
8:6
6:5:9
Ta-!e :: RATIO 100 100 80 60 40 RATIO 20 0
C;%#t +6+
INTERPRETATION Fro+ $he a-o)e char$ *or a!! .ears c"rre$ c"rre$ asse$ &s 'ra$er $ha *&;e# asse$ ra$&o &creas&' .ear a*$er .ear & $he .ear 45897458: ra$&o &s +&sera-!e s$a$e co+(are# $o o$her .ears & sho/s s!&'h$ )ar&a$&os PROFITA!ILITY RATIO
Net rofit Ratio =
Net rofit
x !""
Net Sale
11
Ye%#
Net P#"@it
Net S%'e
R%ti"
455674585
46:
:46656
55454
458574588
685
:4:5
554549
458874584
4885
:666445:
55:9:9
458474589
84945
:95:
88896
45897458:
4:869
9:69
55864
T%b'e 5 +6-
RATIO 1.2 1 0.8 0.6
RATIO
0.4 0.2 0 2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
C;%#t 5 -6-
INTERPRETATION Fro+ $he a-o)e char$ #"r&' $he $/o .ears $he *&r+ has 888 888 (ro*&$ & $he .ear 45847 45847 4589 $he *&r+ has has h&'h e$ (ro*&$ #"r&' #"r&' $he .ear 45897458: &$ sho/s e$ (ro*&$ &s 5586
12
GROSS PROFIT RATIO #ross rofit ratio = #ross #ross $rofit
x !""
Net sales Ye%#
G#"88 P#"@it
Net S%'e
R%ti"
455674585
48
:46656
5848::
458574588
8:8
:4:5
559:6
458874584
89588
:666445:
545969
458474589
84964
:95:
8:9
45897458:
86:54
9:69
558
T%b'e +6.
RATIO 1.6 1.4 1.2 1 RATIO 0.8 0.6 0.4 0.2 0 2009-20 -2010
2010-20 -2011
2011-20 -2012
2012-20 -2013
2013-20 -2014
C;%#t5 +6. INTERPRETATION
Fro+ $he a-o)e a-o)e char$ $he *&r+ has !o/es$ 'ross (ro*&$ & $he .ear 45857458 458574588 8 a# &$ &#&ca$e &#&ca$e $he o* cos$ o* (ro#"c$&o (ro#"c$&o o* $he co+(a. &s )er. h&'h & $he .ear 458874584 458874584 'ross 'ross (ro*&$ &s s!&'h$!. &+(ro)e# co+(are# $o $he .ear 45897458: has (ro*&$a-&!&$. ra$&o o* 558
13
OPERATING RATIO
%$eratin& Ratio = %$eratin& cost
x
!""
Net Sales
YEAR 455674585 458574588 458874584 458474589 45897458:
COST OF GOODS SOLD :4656486 :496:49 :64::99 96:96564 94:
OPERATING E>PENSE 848486: 8:454: 5 5 5
NET SALES :46656 :4:5 :666445: :95: 9:69
RATIO 854 85 66965 689: 666:94:
T%b'e5 +6/
RATIO 106 106 104 104 102 102 100 100 RATIO
98 96 94
C;%#t +6/
INTERPRETATION
14
The ra$&o &s "se# $o +eas"re $he 'eera! (ro*&$a-&!&$. o* $he cocer Lo/er $he ra$&o o* he .ear 458474589,85 $he +ore (ro*&$a-!e are $he o(era$&os &#&ca$&' a e**&c&e$ co$ro! o)er cos$s a# a a((ro(r&a$e se!!&' (ro*&$
FI>ED ASSET TO CAPITAL C APITAL EMPLOYED EMPLOYE D RATIO
Fixed Asset to Ca$ital '($loyed
= Fixed Asset
Ca$ital '($loyed
YEAR
CAPITAL EMPLOYED
FI>ED ASSET
RATIO
455674585
9948
4948:555
8:9::
458574588
945:6:
4948:555
895:6
458874584
9495
448:555
884:
458474589
985885
448:555
884558
45897458:
8:6
85555
565
TA!LE +60
RATIO 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0
RATIO
CART +60
15
INTERPRETATION The ra$&o &s "se# $o +eas"re $he 'eera! (ro*&$a-&!&$. o* $he cocer Lo/er $he ra$&o o* $he .ear 45897458:, 565 $he +ore (ro*&$a-!e are $he o(era$&os &#&ca$&' a e**&c&e$ co$ro! o)er cos$s a# a a((ro(r&a$e se!!&' (ro*&$
DE!T E
Debt E7uity R%ti"
Debt E7uity
YEAR 455674585 458574588 458874584 458474589 45897458:
DE!T 8:99566 85 889498 846465 89
E
RATIO :69556 588446 55854 59:: 586468
TA!LE TA!LE +6B +6 B
RATIO 5 4 3 2
RATIO
1 0
CART * +6B
INTERPRETATION 16
I $ sho/s a 0"&e$ sa$&s*ac$or. (er*or+ace $ha $he re+a&&' .ears h&'h #e-$ e0"&$. ra$&o &+(!&es a 'rea$er c!a&+ o* o/ers $ha cre#&$ors & $he .ear 455674585 &$ sho/s h&'h & $he ra$&o a# 45897458: &$ /as 86
CURRENT ASSET TO FI>ED FI> ED ASSET RATIO
Cu##e:t %88et t" @i?ed %88et #%ti" Cu##e:t %88et Fi?ed %88et Ye%# 455674585 458574588 458874584 458474589 45897458:
Cu##e:t %88et :9: 5696694 5:86 :5565 8:45669
Fi?ed %88et 9948 945:6: 9495 985885 8:6
R%ti" 848:44 865896 858 8458 6:5:9
T%b'e T%b'e 5+61
RATIO 100 100 80 60 40
RATIO
20 0
C;%#t +61
INTERPRETATION
17
Fro+ $h&s $h&s
ra$&o o* c"rre$ c"rre$ asse$ $o $o *&;e# asse$ asse$ ra$&o &creas& &creas&' ' a# & $he $he .ear 45567 45567
4585 & #ecreas&' a# &$s 848: a# & $ha$ .ear c"rre$ asse$ a# c"rre$ c"rre$ !&a-&!&$&es sho/s a h&'h ra$&o & he .ear 45897458: 45897458: 6: 6: &s sho/s a *!"c$"a$&' .ear $o .ear .ear
FINDINGS Wor%&' Ca(&$a! Maa'e+e$ &s a esse$&a! (ar$ o* *&ac&a! +aa'e+e$ Here researcher s$"#&e# )ar&o"s ra$&os re!a$&' $o +eas"re+e$ o* $he /or%&' ca(&$a! s"ch as !&0"&#&$. ra$&o, (ro*&$a-&!&$. ra$&o, so!)ec. ra$&o, ac$&)&$. ra$&o e$c *ro+ $he .ear 455674585 $o 458978: 458978: •
The c"rre$ c"rre$ ra$&o o* $he *&r+ *&r+ sho/s sho/s h&'h, &$ &#&ca$es $ha$ $he *&r+ ca +ee$ &$s
o-!&'a$&os or !&a-&!&$&es •
N&ra(ara sho/s a *a)o"ra-!e 0"&c% ra$&o, so $he *&r+ ca +ee$ &$s !&a-&!&$&es *ro+ !&0"&# asse$s The a-so!"$e !&0"&#&$. ra$&o o* N&ra(ara /as -e!o/ $he &#ea! s$a#ar# I$ &#&ca$es $ha$
• •
$he *&r+ has a "sa$&s*ac$or. *&ac&a! (os&$&o Ne$ Pro*&$ ra$&o o* $he *&r+ /as 0"&$e sa$&s*ac$or. The *&r+ (ro)&#&' !o/er ear&' a)a&!a-&!&$. $o $he e0"&$. share ho!#ers o* $he co+(a. The (ro*&$a-&!&$. $o $o$a! *"# or &)es$+e$s o* N&ra(ara /as *!"c$"a$&' a# &$ /as a
•
0"&$e sa$&s*ac$or. sa$&s *ac$or. The 0"&$e sa$&s*ac$or. #e-$7e0"&$. ra$&o o* $he *&r+ &#&ca$es $ha$ $he *&r+ has a
•
"*a)o"ra-!e so!)ec. (os&$&o The &s$a-&!&$. (ro(r&e$ar. ra$&o o* $he *&r+ &#&ca$es $ha$ $he cre#&$ors ha)e h&'her r&s% The !o/er De-$or2s $"ro)er ra$&o /h&ch sho/s a &e**ec$&)e +aa'e+e$ o* #e-$ors a# $he *&r+ &s & a &!!&0"&#&$. (os&$&o F!"c$"a$&' Wor%&' Ca(&$a! $"ro)er ra$&o &#&ca$es $ha$ $he *&r+ &s o$ (ro(er!. e+(!o.&' Wor%&' Ca(&$a!
18
SUGGESTIONS Th&s s$"#. &s co#"c$e# $o aa!.3e /he$her $h&s *&r+ &s e+(!o.&' &$s Wor%&' Wor%&' Ca(&$a! e**ec$&)e!. a# e**&c&e$!. *or &$s s+oo$h *"c$&o&' 8 The !&0"&# !&0"&#&$. &$. (os&$& (os&$&o o o* $he *&r+ ca -e &+(ro) &+(ro)e# e# -. /a. o* (ro(er (ro(er "$&!&3a$ "$&!&3a$&o &o o* c"rre$ a# !&0"&# asse$s 4 Ne$ (ro*&$ (ro*&$ ra$&o sho/s sho/s h&'h *!"c$"a *!"c$"a$&o $&osJ sJ $he research researcher er reco++e reco++e#s #s $o $he *&r+ $o $a%e re+e#&a! +eas"res & or#er $o o)erco+e $h&s s&$"a$&o 9 The The co+( co+(a. a. co"!# co"!# &cr &crea ease se $he $he e$ e$ (ro* (ro*&$ &$ -. re#"c& re#"c&' ' $he cos$ cos$ o* (ro# (ro#"c "c$& $&o o,, o(era$&' e;(eses a# -. &creas&' $he sa!es B. #o&' so, $he *&r+ ca +a&$a& a#e0"a$e cash a# -a% -a!aces : The The #e-$ #e-$or orss o* $he co+( co+(a a. . &s #ecreas #ecreas& &' ' o)er o)er $he .ears .ears,, co+(a co+(a. . co"!# co"!# a#o($ a#o($ a co+(e$e$ cre#&$ (o!&c. $o a$$rac$ $he c"s$o+ers Icreas&' #e-$ors &s a so!"$&o $o 5. 6.
o)erco+e $he !&0"&#&$. (ro-!e+ The co+(a. ca re#"ce $he cos$ o* (ro#"c$&o a# $r. $o &+(ro)e &$s (ro*&$a-&!&$. The /or%&' ca(&$a! ra$&o *!"c$"a$&' .ear -. .ear, so $he co+(a. sho"!# &crease $he
/or%&' ca(&$a! $"ro)er ra$&o 7. The co+(a. sho"!# +a&$a& 0"&c% ra$&o $o $he &#ea! ra$&o 88 The sa!e o* o* co+(a. co+(a. &s &creas&' &creas&' .ear .ear -. .ear .ear I* $he $he co+(a. co+(a. &s $r.&' $r.&' $o re#"ce re#"ce $he cos$ o* (ro#"c$&o (ro#"c$&o &$ ca ear +ore (ro*&$
19
CONCLUSION The s$"#. /as co#"c$e# $o aa!.s&s /or%&' ca(&$a! +aa'e# & KKR M&!!s P)$ L$# >N&ra(ara? The *&ac&a! s$a$e+e$ o* $he co+(a. &s aa!.se# a# &$er(re$e# The aa!.s&s a# &$er(re$a$&o o* #a$a re!a$&' $o /or%&' ca(&$a! +aa'e+e$ o* $he co+(a. he!(e# $he researcher $o reach a coc!"s&o $ha$ $he /or%&' ca(&$a! a+o"$ sho/s $ha$ $he co+(a. &s & a (os&$&o $o +ee$ &$2s #a. $o #a. o-!&'a$&os
20
!I!ILIOGRAPY
CRKOTHARI, Research Methodology, Methodology, Seco Seco# # E#&$ E#&$&o &o, , Ne/ Ne/ A'e I$era$&oa! P"-!&shers, Ne/ De!h&, 8665
IM PANDEY , Financial Management , Seco# E#&$&o, =&%as =&%as ("-!&sh&' ho"se ()$ !$#, Ne/ De!h& ,4559
MY Kh Kha, PK a&, Management Accounting , *o"r$h *o"r$h e#&$&o e#&$&o, , Ta$a a$a McGra/ h&!!s ("-!&sh&', Ne/ De!h&, 455
SP G"($ha, Statistical Method , Th&r$ee$h e#&$&o, S"!$a Cha# @ So2s P"-!&shers, Ne/ De!h& ,4558
Prasaa Cha#ra, Financial Management , S&;$ S&;$h h E#&$ E#&$&o &o, , Ta$a7M $a7MC C Gra/7H&!! P"-!&sh&' Co+(a. L&+&$e#, Ne/ De!h&, 455:
APPENDI>
6 CURR CURREN ENT T RAT RATIO Current Ratio = Current Assets Current Liabilities 6
Quick Ratio =
Quick Assets Current Liability
,6 A!SO A!SOLU LUTE TE LI< LIED FI>ED ASSET ASSET Current ratio ratio to fixed Asset Asset ratio = Current Asset Fixed Asset -6 NET NET PRO PROFI FIT T RA RATIO Net rofit Ratio =
Net $rofit
x
!""
Net sales .6 GROS GROSS S PRO PROFI FIT T RAT RATIO ×
#ross rofit ratio = #ross $rofit Sales 7. 6 OPERATING RATIO
!""
×
%$eratin& ratio = Cost of &oods sold + %$eratin& ex$enses
!""
Sales Cost of &oods sold = %$enin& Stock + urchases + )irect 'x$enses 'x$enses * Closin& Stock Stock
E
)ebt 'quity
B6 PROP PROPRI RIET ETA ARY RA RATIO
ie
%utsider,s fund Shareholder,s Shareholder,s Fund
ro$rietary ratio ratio = Share holders holders fund -otal -otal asset Share holders fund = 'quity share ca$ital + reference reference share ca$ital + Reser.e / sur$lus 0 Fictitious asset 16 FI>ED ASSETS ASSETS TO TURNO4ER TURNO4ER RATIO RATIO Fixed Assets to -urno.er -urno.er ratio ratio =
11.
Net sales Fixed assets
WORKING CAPITAL TURNO4ER RATIO
1orkin& 1orkin& ca$ital turno.er ratio =
Net sales Net 2orkin& ca$ital
6 DE!TORS TURNO4ER RATIO RATIO )ebtors turno.er turno.er ratio =
Net Sales A.era&e A. era&e )ebtors
,6 IN4ENTORY IN4ENTORY TURNO4ER TURNO4ER RATIO RATIO 3n.entory turno.er turno.er ratio = Cost Cost of &oods sold sold 4 A.er A.era&e a&e in.entory
A.era&e A. era&e in.entory = %$enin& Stock+ Closin& Stock
