kakateya agro wc , project

WORKING CAPITAL MANAGEMENT

1.1 INTRODUCTION

Accounting is often referred to as the language of business. This record business transaction takes place during the accounting period with a view to prepare final statements. One of the important objectives of accounting is (1) to measure the profit of the business and (2) to ascertain the financial position of the business. The former is done through the preparation of the profit and loss account and the latter one requires the preparation of balance sheet. All accounting is done and designed to prepare these financial statement periodically, usually once a year. These statements provide vital information to several groups of affected parties like shareholders, creditors, employees and other like researchers, economists and financial analysts.

DEFINITION: Before attempting to define accounting, it may be added that there is no unanimity amount accounts as to its precise definition. Out of the various definitions, the most acceptable one is that given by AICPA committee on terminology. "The art of recording, classifying and summarizing in a significant Manner and in terms of money, transactions and events which are in Part at least, of financial character and interpreting the results there of.

The word can be classified into three categeories

1. Financial accounting.

2. Cost accounting

3. Management accounting.FINANCIAL ACCOUNTING:Financial accounting studies the business transaction and events for the enterprise as a whole and is attached more with reporting the results and position of the business to persons and authorities other than management - government, creditors, owners researchers etc. it is its historical in nature, it records and analyse business events long after they have taken place. The periodicity in reporting financial accounts is much wider. Financial accounting has to be governed by the "Generally accepted principles" and it is must in case of joint stock companies to meet the statutory provision of company law and income tax law. Financial accounting generally prepared by which the statements relating to a year.

COST ACCOUNTING:

Cost is the amount of expenditure (actual or notional) incurred on, or attributable to a specified thing or activity. Cost accounting aims at systematic recording of expenses and analysis of the same so as to ascertain in the cost of each product manufacturing or service rendered by an organization. Information regarding cost of each product or service would enable the management to know where to economize on coats how to fix prices how to maximize profits and so on. Cost accounting analysis the unit costs and profits and losses of different product lines.

MANAGEMENT ACCOUNTING:

Management accounting has developed out of the need for making more and more and managerial decision. Management accounting collects and provides accounting, cost accounting, economic and statistical information to the men at various managerial levels to assist them in the performance of managerial functions and their evaluations. It is the developed application of various techniques of recording, analyzing interpretation and presentation making the financial and costing performance of managerial functions, viz., planning, decision-making and control. Management accounting is simply "the presentation of accounting information in such a way as to assist management in the creation of policy and in day to day operations. MANAGEMENT ACCOUNTING AND FINANCIAL FUNCTIONS:Finance is the lifeblood of a business. Procuring and judicious use of finance are the two important objectives under financial management, just as production and sales are major function in an enterprise, finance is too an independent specialized function. Still it is well known it with other functions. Financial management thus is a separate management area. In many countries including India this function is performed by the accountant himself. Many organizations have financial executives besides the chief accountant. But mostly the accounting and finance functions are clubbed and the finance function is often considered as part of the functions attached to the accountant, it is not in appropriate to consider the same as part of the accounting Function.

The management accountant finance manager if there are separate positions mount work in close collaboration with one another. The former provides relevant accurate and prompt information while the latter will make decision. Based on the decision the management accountant may have to collect new information and data.

Working Capital Management

A managerial accounting strategy focusing on maintainingefficientlevels of both components of working capital, current assets and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses.

Working capital(abbreviatedWC) is a financial metric which representsoperating liquidityavailable to a business, organization or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Net working capital is calculated ascurrent assetsminuscurrent liabilities. It is a derivation of working capital, that is commonly used in valuation techniques such as DCFs (Discounted cash flows). If current assets are less than current liabilities, an entity has aworking capital deficiency, also called aworking capital deficit.

A company can be endowed withassetsandprofitabilitybut short ofliquidityif its assets cannot readily be converted into cash. Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturingshort-term debtand upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash.

Working capital management

Decisions relating to working capital and short term financing are referred to asworking capital management. These involve managing the relationship between a firm'sshort-term assetsand itsshort-term liabilities. The goal of working capital management is to ensure that the firm is able to continue its operationsand that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses.

Decision criteriaBy definition, working capital management entails short-term decisionsgenerally, relating to the next one-year periodswhich are "reversible". These decisions are therefore not taken on the same basis as capital-investment decisions (NPVor related, as above); rather, they will be based on cash flows, or profitability, or both.

One measure of cash flow is provided by thecash conversion cyclethe net number of days from the outlay of cash forraw materialto receiving payment from the customer. As a management tool, this metric makes explicit the inter-relatedness of decisions relating to inventories, accounts receivable and payable, and cash. Because this number effectively corresponds to the time that the firm's cash is tied up in operations and unavailable for other activities, management generally aims at a low net count.

In this context, the most useful measure of profitability isreturn on capital(ROC). The result is shown as a percentage, determined by dividing relevant income for the 12 months bycapital employed;return on equity(ROE) shows this result for the firm's shareholders. Firm value is enhanced when, and if, the return on capital, which results from working-capital management, exceeds thecost of capital, which results from capital investment decisions as above. ROC measures are therefore useful as a management tool, in that they link short-term policy with long-term decision making. Seeeconomic value added (EVA).

Credit policyof the firm: Another factor affecting working capital management is credit policy of the firm. It includes buying of raw material and selling of finished goods either in cash or on credit. This affects thecash conversion cycle.

Management of working capitalGuided by the above criteria, management will use a combination of policies and techniques for the management of working capital. The policies aim at managing thecurrent assets(generallycashandcash equivalents,inventoriesanddebtors) and the short term financing, such that cash flows and returns are acceptable.

Cash management. Identify the cash balance which allows for the business to meet day to day expenses, but reduces cash holding costs.

Inventory management. Identify the level of inventory which allows for uninterrupted production but reduces the investment in raw materials - and minimizes reordering costs - and hence increases cash flow. Besides this, the lead times in production should be lowered to reduceWork in Process (WIP)and similarly, theFinished Goodsshould be kept on as low level as possible to avoid over production - seeSupply chain management;Just In Time(JIT);Economic order quantity(EOQ);Economic quantity Debtors management. Identify the appropriatecredit policy, i.e. credit terms which will attract customers, such that any impact on cash flows and the cash conversion cycle will be offset by increased revenue and hence Return on Capital (orvice versa); seeDiscounts and allowances.

Short term financing. Identify the appropriate source of financing, given the cash conversion cycle: the inventory is ideally financed by credit granted by the supplier; however, it may be necessary to utilize a bankloan(or overdraft), or to "convert debtors to cash" through "factoring".Meaning of Working Capital

Capital required for a business can be classified under two main categories via,

1)Fixed Capital

2)Working Capital

Every business needs funds for two purposes for its establishment and to carry out its day- to-day operations. Long terms funds are required to create production facilities through purchase of fixed assets such as p&m, land, building, furniture, etc. Investments in these assets represent that part of firms capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purposes for the purchase of raw material, payment of wages and other day today expenses etc.

These funds are known as working capital. In simple words, working capital refers to that part of the firms capital which is required for financing short- term or current assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in current assts keep revolving fast and are being constantly converted in to cash and this cash flows out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital or short term capital.

CONCEPT OF WORKING CAPITAL

There are two concepts of working capital:

1.Gross working capital

2.Net working capital

The gross working capital is the capital invested in the total current assets of the enterprises current assets are those

Assets which can convert in to cash within a short period normally one accounting year.

CONSTITUENTS OF CURRENT ASSETS

1)Cash in hand and cash at bank

2)Bills receivables

3)Sundry debtors

4)Short term loans and advances.

5)Inventories of stock as:

a.Raw material

b.Work in process

c.Stores and spares

d.Finished goods

6. Temporary investment of surplus funds.

7. Prepaid expenses

8. Accrued incomes.

9. Marketable securities.

In a narrow sense, the term working capital refers to the net working. Net working capital is the excess of current assets over current liability, or, say:

NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES.

Net working capital can be positive or negative. When the current assets exceeds the current liabilities are more than the current assets. Current liabilities are those liabilities, which are intended to be paid in the ordinary course of business within a short period of normally one accounting year out of the current assts or the income business.

CONSTITUENTS OF CURRENT LIABILITIES

1.Accrued or outstanding expenses.

2.Short term loans, advances and deposits.

3.Dividends payable.

4.Bank overdraft.

5.Provision for taxation , if it does not amt. to app. Of profit.

6.Bills payable.

7.Sundry creditors.

The gross working capital concept is financial or going concern concept whereas net working capital is an accounting concept of working capital. Both the concepts have their own merits.

The gross concept is sometimes preferred to the concept of working capital for the following reasons:

1.It enables the enterprise to provide correct amount of working capital at correct time.

2.Every management is more interested in total current assets with which it has to operate then the source from where it is made available.

3.It take into consideration of the fact every increase in the funds of the enterprise would increase its working capital.

4.This concept is also useful in determining the rate of return on investments in working capital. The net working capital concept, however, is also important for following reasons:

It is qualitative concept, which indicates the firms ability to meet to its operating expenses and short-term liabilities.

IT indicates the margin of protection available to the short term creditors.

It is an indicator of the financial soundness of enterprises.

It suggests the need of financing a part of working capital requirement out of the permanent sources of funds.

CLASSIFICATION OF WORKING CAPITAL

Working capital may be classified in to ways:

oOn the basis of concept.

oOn the basis of time.

On the basis of concept working capital can be classified as gross working capital and net working capital. On the basis of time, working capital may be classified as:Permanent or fixed working capital.

Temporary or variable working capital

PERMANENT OR FIXED WORKING CAPITAL

Permanent or fixed working capital is minimum amount which is required to ensure effective utilization of fixed facilities and for maintaining the circulation of current assets. Every firm has to maintain a minimum level of raw material, work- in-process, finished goods and cash balance. This minimum level of current assts is called permanent or fixed working capital as this part of working is permanently blocked in current assets. As the business grow the requirements of working capital also increases due to increase in current assets.

TEMPORARY OR VARIABLE WORKING CAPITAL

Temporary or variable working capital is the amount of working capital which is required to meet the seasonal demands and some special exigencies. Variable working capital can further be classified as seasonal working capital and special working capital. The capital required to meet the seasonal need of the enterprise is called seasonal working capital. Special working capital is that part of working capital which is required to meet special exigencies such as launching of extensive marketing for conducting research, etc.

Temporary working capital differs from permanent working capital in the sense that is required for short periods and cannot be permanently employed gainfully in the business.

IMPORTANCE OR ADVANTAGE OF ADEQUATE WORKING CAPITAL

SOLVENCY OF THE BUSINESS:Adequate working capital helps in maintaining the solvency of the business by providing uninterrupted of production.

Goodwill:Sufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill.

Easy loans:Adequate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms.

Cash Discounts:Adequate working capital also enables a concern to avail cash discounts on the purchases and hence reduces cost.

Regular Supply of Raw Material:Sufficient working capital ensures regular supply of raw material and continuous production.

Regular Payment Of Salaries, Wages And Other Day TO Day Commitments:It leads to the satisfaction of the employees and raises the morale of its employees, increases their efficiency, reduces wastage and costs and enhances production and profits.

Exploitation Of Favorable MarketConditions:If a firm is having adequate working capital then it can exploit the favorable market conditions such as purchasing its requirements in bulk when the prices are lower and holdings its inventories for higher prices.

Ability To Face Crises:A concern can face the situation during the depression.

Quick And Regular Return On Investments:Sufficient working capital enables a concern to pay quick and regular of dividends to its investors and gains confidence of the investors and can raise more funds in future.

High Morale:Adequate working capital brings an environment of securities, confidence, high morale which results in overall efficiency in a business.

EXCESS OR INADEQUATE WORKING CAPITAL

Every business concern should have adequate amount of working capital to run its business operations. It should have neither redundant or excess working capital nor inadequate nor shortages of working capital. Both excess as well as short working capital positions are bad for any business. However, it is the inadequate working capital which is more dangerous from the point of view of the firm.

DISADVANTAGES OF REDUNDANT OR EXCESSIVE WORKING CAPITAL

1.Excessive working capital means ideal funds which earn no profit for the firm and business cannot earn the required rate of return on its investments.

2.Redundant working capital leads to unnecessary purchasing and accumulation of inventories.

3.Excessive working capital implies excessive debtors and defective credit policy which causes higher incidence of bad debts.

4.It may reduce the overall efficiency of the business.

5.If a firm is having excessive working capital then the relations with banks and other financial institution may not be maintained.

6.Due to lower rate of return n investments, the values of shares may also fall.

7.The redundant working capital gives rise to speculative transactions.DISADVANTAGES OF INADEQUATE WORKING CAPITAL

Every business needs some amounts of working capital. The need for working capital arises due to the time gap between production and realization of cash from sales. There is an operating cycle involved in sales and realization of cash. There are time gaps in purchase of raw material and production; production and sales; and realization of cash.

Thus working capital is needed for the following purposes:

For the purpose of raw material, components and spares.

To pay wages and salaries

To incur day-to-day expenses and overload costs such as office expenses.

To meet the selling costs as packing, advertising, etc.

To provide credit facilities to the customer.

To maintain the inventories of the raw material, work-in-progress, stores and spares and finished stock.

For studying the need of working capital in a business, one has to study the business under varying circumstances such as a new concern requires a lot of funds to meet its initial requirements such as promotion and formation etc. These expenses are called preliminary expenses and are capitalized. The amount needed for working capital depends upon the size of the company and ambitions of its promoters. Greater the size of the business unit, generally larger will be the requirements of the working capital.

The requirement of the working capital goes on increasing with the growth and expensing of the business till it gains maturity. At maturity the amount of working capital required is called normal working capital.

There are others factors also influence the need of working capital in a business.

FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENTS

1.NATURE OF BUSINESS:The requirements of working is very limited in public utility undertakings such as electricity, water supply and railways because they offer cash sale only and supply services not products, and no funds are tied up in inventories and receivables. On the other hand the trading and financial firms requires less investment in fixed assets but have to invest large amt. of working capital along with fixed investments.

2.SIZE OF THE BUSINESS:Greater the size of the business, greater is the requirement of working capital.

3.PRODUCTION POLICY:If the policy is to keep production steady by accumulating inventories it will require higher working capital.

4.LENTH OF PRDUCTION CYCLE:The longer the manufacturing time the raw material and other supplies have to be carried for a longer in the process with progressive increment of labor and service costs before the final product is obtained. So working capital is directly proportional to the length of the manufacturing process.

5.SEASONALS VARIATIONS:Generally, during the busy season, a firm requires larger working capital than in slack season.

6.WORKING CAPITAL CYCLE:The speed with which the working cycle completes one cycle determines the requirements of working capital. Longer the cycle larger is the requirement of working capital.

1.2 OBJECTIVES OF THE STUDY

To analysis and evaluates the Working capital Management and performance in kakatiya agro products.

To know the schedule of changes whether there is an increase or decrease in kakatiya agro products. To know the liquidity position of the company. To know the solvency position of the company.1.3 SCOPE OF THE STUDY

The study is confined to the financial performance of the Kakatiya Agro Products. This study aims at analyzing with the help of one tool of the financial performance of the company that is:

Ratio analysis

Working Capital

Ratio analysis is the process of computing, determining and presenting the relationship of items. A financial ratio expresses the relationship between two accounting figures.

1.4 NEED FOR THE STUDY

The theoretical background would not be useful for any one unless is done practically. So the importance of any project is to gain practical exposure and proper insight in the topic under study.

Analysis and interpretation through compilation of the accounts department the revenue, the income and the expenditure & by providing details of budgets. Results are compared with the standard of performance. Such a standard may be either the ratio which represents the target set by management as desirable for the business. So as Agrfford full diagnosis of the profitability of the financial soundness of the business various analysis is made.

The study will be helpful to management, employees, debtors, creditors and all more that depend on the organization & have interest to know the financial position of the company. The need of the study will be helpful to know the past happenings in the organization to plan for the future.1.5 LIMITATIONS OF THE STUDY

No primary data is used for the study.

This study has been limited i.e.,(2008-2013)

All ratios could not be covered under the study because of inadequate information.

Time and cost factors are other limitations.

Opinions of the managers of the organizations were taken into consideration hence there is a chance for personal bias..1.6 RESEARCH METHODOLOGY

The study is based entirely on the data that has been collected.

COLLECTION OF DATA:

The data relating to finance statements the Kakatiya Agro Products has been collected. The data has been collected from the published annual report for five years from 2007-2012 which were obtained from the industry? The financial sheets and profit and loss accounts have been used to collate the working capital.

PRIMARY DATA:

Primary data is known as synonymous to firsthand information that is exclusively collected for the study of the primary data in calculated for sake this Study has been the communication with the states members and personal Dias.

SECONDARY DATA:

This information is gathered from financial statements and records of the company like annual reports and its informative brochures. Information is also collected from the academic books and journals available on the subject.2.1 REVIEW OF LITERATUREFINANCIAL FUNCTIONS:The prime need of a business is to obtain and disburse funds. Each firm treats this as a special problem with in the limits of its specific environment. Generally speaking finance is concerned with

1. Obtaining funds at the lowest cost.2. Making the optimal use of these funds.

Every firm has its own goals aiming at a certain extent of profit generation. It is not necessary for a firm to have the goal of profit maximization as the only goal in the short run or even in the long run. The management might have its own limitations of deficiency and capacity levels of satisfaction and appraisal of future etc. more over social responsibilities add to the alteration of goals in various directions.

The typical problems that are faced by an accountant dealing with finance are

1. Type of expenditure of which a firm should get itself involved in a commitment to spend.

2. The volume of funds that should be committed by a firm on various types of expenditures.

3. The ways and means by which the existing funds committed as well as non committed could be utilized for getting the maximum benefit of the firm.

4. The course of action to be taken whenever the expectations do not materialize and a failure is to be averted.

5. The financing pattern that is considered desirable.

The decision in all these areas are conditioned by the objectives and goals of a firm desires to seek and are influenced by the environment prevailing outside the firm, irrespective of the objectives goals and strategies the relationship between costs of funds sources and earnings from funds from an integral part of the finance function.

Management is that managerial activity which is concerned with the planning and control of the firms financial resources. It was a branch of economics till 1890, and as a separate discipline, it is of recent origin. Still it has no unique body of knowledge of its own, and draws heavily on economics for its theoretical concepts even today.

The subject of financial management is of immense interest to both academicians and practicing manager. It is of great interest to academicians because the subject is still developing, and there are still certain areas where controversies exist for which no unanimous solution has been reached as yet.

MEANING OF FINICIAL MANAGEMENT

From the various definitions of the term business given above, it can be concluded that the term business. Finance mainly involves, rising of funds, and their effective utilization keeping in view the overall objective of the firm.

DEFINITION

1. Financial management is concerned with the efficient use of important economic sources namely capital funds. Solomon

2. Financial management is the application of the planning and control function to the finance function.

Howard and Upton3.1 COMPANY PROFILE

Kakathiya agro products and oils is one of the largest producers of spun yarns for the knitting and weaving industries in the world.

Offering a diverse product line to fulfill demands of customers worldwide, we have perfected our spinning processes by applying state-of-the-art automated technology and innovation to every phase of our yarn manufacturing process.

We are recognized worldwide as the industry leader for spun yarns due to our continued focus on product quality and our commitment to extraordinary customer service.

Headquartered in Guntur, Kakathiya agro products and oils Ltd. was founded in 1994 by a group of managing partners with a desire to build a high quality yarn manufacturing company.

While Kakathiya is a relatively young company in terms of textile firms, the management team of Kakathiya Spinning has many years of experience in the yarn manufacturing field. Starting with one open-end spinning facility in Guntur, the company, since its inception, has grown into one of the largest producers of 100% cotton and cotton-blend yarns in the world.

Kakathiya Spinning believes the most important aspect of a successful business is its people.

Quality and customer service are impossible without people. Development and implementation of technology are impossible without people. Efficient and safe operations of the plants are impossible without people.

Kakathiya has worked very hard in putting together a team of managers, engineers, technicians, sales people, and production associates to lead Kakathiya in the 21st century. And while each individual contributor has a distinct and different role within the company, it takes EVERYONE at Kakathiya working together for the company to achieve maximum success.

In modern fashion technology, the demand for perfection begins right at the birth of the raw material, permeates through every single process, till the highly discerning customer dons the finished garment.

It is this demand for perfection that has spurred the growth of an organisation and its corporate philosophy.

Those who can furnish clients with the best quality, competitive price, excellent customer services and prompt delivery can only survive in the market.

Kakathiya agro products and oils Limited takes immense pride in perceiving its role as the comprehensive architect of every single yarn and garment that its produces.

Kakathiya agro products and oils Limited is a multi-unit, multi-interest business group with a wide range of industrial activity, an organisation that has founded its evolution on value-based commercial practice.

Kakathiya agro products and oils Limited was established in 1994 with an initial capacity of 12,000 spindles.

Over its two decades of chequered growth it has expanded to 55,000 spindles -- 2912 rotors.

The company commenced operations with the manufacture of grey, gassed, mercerised and dyed cotton yarn. Today, the company has carved a niche for itself on the textile map of the country.

Kakathiya Group Companies

1) KAKATHIYA AGRO PRODUCTS & OILS PRIVATE LIMITED

2) KAKATHIYA BROTHERS COTTONS PRIVATE LIMITED.

3) KAKATHIYA HARANADHA REDDY INSTITUTE OF TECHNOLOGY (KHIT)

4) a) KAKATHIYA AGRO PRODUCTS AND OILS LIMITED POWER NELAKONDAPALLI, KODAD.

b)JANAPADU HYDRO POWER PROJECT LIMITED. NEREDUCHERLA, NALGONDA (DIST).

5) KAKATHIYA HOUSING & REAL ESTATES PVT. LTD.

6) AGRICULTURAL DIVISIONS AT OBULNAIDUPALEM & KANDULAVARI PALEM.

Each company in the Group specializes in a specific area, thus enabling us to better meet the diverse needs of the industry. Our companies are focused on meeting our customer's individual needs.

We exist to provide Superior customer satisfaction - developing solid, long-term relationships with our customers.

Our Vision

To achieve excellence in all sectors of the textile industry,from fiber to finished product, constantly striving to be at the forefront of our industry and to generate highest possible value for all stakeholders.

Our Mission

To manufacture international quality yarn and fabric, with the highest level of competitiveness on all parameters.

To effectively harness and integrate all available technology across various elements of the textile chain.

To cater to product innovation by mastering value added areas like processing and finishing.

SRI KAKATHIYA HARANADHA REDDY - CHAIRMAN

Sri Kakathiya Haranadha Reddy is the founder and promoter of the KSML and presently he is acting as Non Executive Chairman of the Board. He is aged about 74 years, holds a Masters Degree in Arts and graduate in Lam. He has about 45 years of rich experience in cotton and spinning business. Further he got good experience in the Ginning, Pressing, Oil Mills, Chilies and Rice Business etc. He was associated with the company since its inception.

Sri Kakathiya Haranadha Reddy is a Director on the Board of M/S Kakathiya Housing and Real Estates (P) Ltd. He is not a member of any committee within the meaning of clause 49 of the listing agreement with the stock exchanges.

Sri Kakathiya Haranadha Reddy is also a Philanthropist. He started Kakathiya Academy of Educational Society. From the current Financial Year " Kakathiya Haranatha Reddy Institute of Technology" started in Chowdavaram. Every Year he gives Education Scholarships to poor students.

SRI P. VENKATESWARA REDDY - MANAGING DIRECTOR

Mr. P.V. Reddy is the Managing Director of KSML aged 59 years.

Mr. P.V. Reddy, hailing from an agricultural family, is having lot of dedication, commitment and hand work and a much disciplined personality.

He has over 36 years of experience in Cotton, Ginning, Pressing, Spinning, Cotton Seed Oil, Chilies, and Rice Business etc.

Mr. P.V. Reddy handles purchase of Raw Cotton and looks after all the Civil Construction Activity of the company.

SRI G.V. KRISHNA REDDY - JOINT MANAGING DIRECTOR

Mr. G.V.K. Reddy is the Joint Managing Director of KSML and aged 53 years. He is a graduate in Mechanical Engineering with distinction from Andhra University and also University 1st Rank Holder. He is post graduate in Marine Engineering from Royal Naval Engineering College, Plymouth, UK. He has served in Indian Navy in various positions and took premature retirement as Commander to start the family business of spinning in 1993.

He had extensive tour of India with chairman to select suitable machinery for the spinning unit in 1993. he organized construction of spinning plant and erection of machinery in a record time. He also played a key role in organizing public issue of the company in 1995.

Mr. G.V.K. Reddy takes active part in day to day management, manufacturing, technical and liaisioning with Financial Institutions, Banks and other Govt. Departments of the company. He is responsible for Hydro Electric Plant Operation.

SRI M.V. SUBBA REDDY - WHOLE TIME DIRECTOR

Mr. M.V. Subba Reddy is the Whole Time Director of KSML aged 53 years.

He is associated with the company since 1996 as Purchase In charge (raw material).

He is post graduate in commerce.

He gained excellent knowledge in procurement of raw material sales of yarn and waste.

He is also having experience in accounts and looks after day to administration of Office, Accounts Department, and Purchase of Raw Material for OE Plant.

SRI M.R. NAIK - INDEPENDENT DERICTOR

Mr. M.R. Naik is a Non-Executive Independent Director of KSML.

He is aged about 72 years retired as IAS Officer.

He served the community in various capacities in Central and State Government Organization and also served as a member in the consumers forums constituted by the State Government and rendered valuable judgments in favor of consumers on several complaints came before for hearing.His knowledge and experience will be of great help to the company complying with various government and other institutional rules procedures and regulations.

SRI V.S.N. MURTHY - NOMINEE DIRECTOR OF IREDA

Mr. V.S.N. Murthy is a Nominee Director of IREDA. He is aged about 70 years.

He is post graduate in commerce from Andhra University.

He worked 7 years in M/S Singareni Collieries Ltd. He joined in 1970 in APIDC as a Chief Accountant, and served for 27 years holding different positions in the Accounts and Finance Division.

He retired in the year 1997 as Chief General Manager (Financial Services). He is the Chairman of the Audit Committee.

He takes keen interest in analyzing the Balance Sheet, advising the company in expansion programs.

SRI N. PRABHAKARA RAO - INDEPENDENT DIRECTOR

Mr. N. Prabhakara Rao is the Non- Executive Independent Director of KSML.

He is aged about 75 years and is as Electrical Engineer.

He has retired as Superintending Engineer of APSEB having served in various capacities and used to provide his valuable suggestions in areas of Electrical Engineering etc., in times of need.

He is also Director in Janapadu Hydro Power Project Private Limited. He takes keen interest in protecting the share holders interest of the company.

SRI A. KRISHNA MURTHY - INDEPENDENT DIRECTOR

Mr. A. Krishna Murthy is Non-Executive Independent Director of KSML. He is aged about 69 years.

He is a post graduate in Law. He was selected as a Assistant Labour Officer through Group II-A, conducted by the Andhra Pradesh Public Service Commission in 1966.

He has retired as Joint Commissioner of Labour, in Labour, Employment & Training in 1999 after rendering 33 years of service in various capacities.

He is practicing as Labour Law Consultant and Advocate at Guntur for last 10 years. He has rich experience in the fields of Labour Law, Industrial Law Human Resources and Personal Administration.

SRI S. PULLA RAO - INDEPENDENT DIRECTOR

Mr. S. Pulla Rao is a Non-Executive independent Director of KSML. He is aged about 65 years.

He is a Commerce Graduate from Andhra University.

He joined Indian Revenue Service and retired as Joint Commissioner of Income Tax in June 2010 after rendering about 40 years of Service in various capacities in Income Tax Department.

He advises the company in tax related matters.

1.2 INDUSTRY PROFILECottonseed oil is cooking oil extracted from the seeds of cotton plant of various species, mainly Gossypiumhirsutum and Gossypiumherbaceum. All cotton that is grown is used to produce cotton fiber, animal feed, and oil. In 2011 cotton was the third biggest of the genetically modified crops grown worldwide, as measured by acreage: soybean was 47%, occupying 75.4 million hectares; biotech maize (51.00 million hectares at 32%), biotech cotton (24.7 million hectares at 15%) and biotech canola (8.2 million hectares at 5%)

Cotton seed has a similar structure to other oilseeds such as sunflower seed, having an oil-bearing kernel surrounded by a hard outer hull; in processing, the oil is extracted from the kernel. Cottonseed oil is used for salad oil, mayonnaise, salad dressing, and similar products because of its flavor stability.

Composition

Mississippi Cottonseed Oil Co. seed house, Jackson, Mississippi, USA

Its fatty acid profile generally consists of 70% unsaturated fatty acids (18% monounsaturated, and 52% polyunsaturated), 26% saturated fatty acids and 4% glycerol. When it is fully hydrogenated, its profile is 94% saturated fat and 2% unsaturated fatty (1.5% monounsaturated, and 0.5% polyunsaturated). The cottonseed oil industry claims cottenseed oil does not need to be hydrogenated as much as other polyunsaturated oils to achieve similar results.Gossypol is a toxic, yellow, polyphenolic compound produced by cotton and other members of the order Malvaceae, such as okra. This naturally occurring coloured compound is found in tiny glands in the seed, leaf, stem, tap root bark, and root of the cotton plant. The adaptive function of the compound facilitates natural insect resistance. In addition, global cottonseed production can potentially provide the protein requirements for half a billion people per year.

The three key steps of refining, bleaching and deodorization in producing finished oil act to eliminate the gossypol level. Ferric chloride is often used to decolorize cotton seed oil.

Acid oil Manufacturers & Exporters

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SEVEN IMPORTANT OILS:

1 - Arachis or peanuts seeds reached in the world the mark of 4.6 million tonnes during 2010-2011. The main productors are China (37% of the world crop and 32% for oil), India (25%), USA (5%), and various African states (Sudan, Senegal, Nigeria).

The probable centers of origin of Arachis species and A. hypogaea were in the Gran Pantanal (MatoGrosso, Brazil) and on the eastern slopes of the Bolivian Andes. The Incas cultivated this plant since 3000 B.C., but it was known in Europe only after the discovery of America. From Europe, peanuts were exported by the Portuguese and Spanish explorers over the rest of the world (Africa, China, Philippines, Cuba). Peanut seeds make an important contribution to the diet in many countries. They are a good source of proteins, lipids, and fatty acids for human nutrition. They are rich in oil, naturally containing from 47 to 50%. It has a high oleic content, which is associated with good oxidative and frying stabilities. It is a non-drying oil that solidifies from 0 to 38C.About 96% of peanut triacylglycerols are composed of palmitic, stearic, oleic and linoleic acids.

Cultivars from various countries presented the following fatty acid distribution: C16:0 = 9.313.0%, C18:0 = 1.13.6%, C18:1 = 35.658.3%, C18:2 = 20.943.2%, C20:0 = 0.32.4%, C20:1 = 0.73.2%, C22:0 = 1.84.4%, and C24:0 = 0.4 1.9%. Additional compositional data may be found in a review article (Carrin ME et al., Eur J Lipid SciTechnol 2010, 112, 697).The composition in triacylglycerol species is characterized by the presence of OOO (27%), OOL (18%), POO (17%), PLO (12%), OLL (11%) (Cunha SC et al., Food Chem 2011, 95, 518).

2 - Cotton, 4.7 mt oil in 2009-10. The plant is cultivated mainly for fibers. The first producer of cotton fiber was in 2010 China (24%, 33% for oil), followed by USA (19%), India (15%), Pakistan (8%), Brazil (6%).

Cotton (Gossypiumhirsutum, Malvaceae) is probably known since 3000 B.C. Around 600 B.C., cotton came from India to Egypt and was brought in Europe by Alexander the Great (330 B.C.). This species contributes about 90% of the world production of fiber. The cotton oil was mentioned by Herodot (450 B.C.) but its worldwide use was born only in the 19th century. The kernel comprises about 50% of the seed and contains about 30% of oil. The world production of cottonseed was in 1999 about 36 million tons. About 97% of triacylglycerols are composed of palmitic (22%), oleic (18%) and linoleic (57%) acids. The composition in triacylglycerol species is characterized by the presence of LLP (29%), LLL (17%), OLL (14%), OLP (12%), and PLP (8%) (Lisa M et al., J Chromatogr A 2013, 1198-1199, 115).Cotton oil is characterized by its content in gossypol, a phenolic pigment involved in its storage stability, and in cyclopropenoid fatty acids which give the distinctive red color of that oil.The entire production of cotton oil is used in the manufacture of salad and cooking oils, shortenings and margarine, and to a lesser extent to produced soaps.

3 - Coprah from coconut (Cocosnucifera, Palmae), 3.7 mt oil in 2009-10.

Coconut palms are known to have been used in India since 500 B.C., the Spanish name coco dating from around 1500. Its origin is a subject of dispute, South America or Southeast Asia. Coconut palm known as "tree of life" is one of the most useful trees in the world. Population of humid tropical regions is almost entirely dependent on coconut as a source of food, fuel and shelter. In the 19th century the tree was used in Europe quite exclusively for the fibers. Plantations of palms begun at the end of the 18th century in Sri Lanka with the Dutch and Portuguese colonization.About 5000 nuts are needed to produce one ton of coprah (dried kernel) which has a fat content of about 65%, the whole fruit giving about 23% oil. As the lauric acid content is high (up to 52%), this oil belongs to the group of "laurics". The world production of coconuts was in 1999 about 49 million tons, Indonesia producing 30%, Philippines 23% and India 21%. In 2011, the major usages of coconut oil are for food industry (50%), and oleochemicals (47%).

In the coconut-growing countries, it is widely used for domestic consumption as cooking and frying oil. In western countries, it is largely used in the manufacture of margarine, to a lesser extent as ice cream fat, filling cream and confectionery oil. Besides its food uses, it has applications in cosmetics, soaps, detergents and shampoos. Glycerol produced from coconut is extensively used for several industrial applications (cosmetics, pharmaceuticals, explosives, paints). Recently, it has also found usage in the processing of biodiesel. A typical fatty acid distribution of coconut oil is : 12:0 (La): 37%, 14:0 (M): 19%, 8:0 (Cy): 15.6%, 18:1 (O): 11%, and 16:0 (P): 7% . The composition in triacylglycerol species is characterized by the presence of MLaCy (15%), LaLaCy (13%), PLaCy (8%), LaOCy (6%), SLaCy (5%) and MMCy (5%) (Lisa M et al., J Chromatogr A 2013, 1198-1199, 115).

4 - Palm kernel oil, 5.5 mt in 2009-10, in Malaysia, Indonesia and Africa. The first producer is Malaysia (52%), the second being Indonesia (28%). Statistics of world supply and consumption may be found in a specialized web site .

Oil palm (ElaeisguineensisJacq.) produces fruit which consist of a hard kernel (seed) inside a shell (endocarp), which is surrounded by a fleshy mesocarp. The mesocarp contains about 49% palm oil and the kernel about 50% palm kernel oil. Palm Kernel Oil is yellowish in colour and has a fatty acid composition different from that of palm Oil. Palm Kernel Oil contains mainly lauric acid (C12:0) and more than 80% saturated fatty acids. Palm Kernel Oil closely resembles Coconut Oil in its fatty acid formulation and characteristics, therefore is a cost effective substitute for Crude Coconut Oil in the production of quality soap. As this oil is rich in lauric acid, it is used in the synthesis of lauryl alcohol for detergent industry. The composition in triacylglycerol species is characterized by the presence of LaLaLa (22%), LaLaM (17%), LaMM (9%), LaLaO (6%), and CCLa (6%) (Chen CW et al., Food Chemistry 2012, 100, 178).

5 - Maize, Indian corn or corn (Zea mays), 2 mt oil in 2009-05. Cultivated in temperate regions, this plant is used accessorily for oil production.

Maize is one of the plants the most anciently cultivated by human, it originated probably from Central America (Mexico, New Mexico) where Indians used it since thousand years. Christopher Columbus brought in Spain some maize seeds from his first exploration (1493) and, through Italy, the plant were spread in the whole Europe. Whereas the total world production of corn amounted to about 600 million tons in 1999, the corn oil production is very low, about 400,000 tons. Corn seed has a maximum total oil content of 12% in some varieties used for starch production. Triacylglycerols comprise about 80%, phospholipids about 8% and glycolipids about 2-5%.

Corn oil is rich in tocopherols (up to 1 g per Kg), which account for its excellent stability.About 60% of corn oil is consumed as salad and cooking oil, the other use (30%) being for manufacture of margarine. A very small proportion is used for some industrial purposes (pharmacy, cosmetics).The composition in triacylglycerol species is characterized by the presence of POO (19%), OOL (18%), OOO (17%), OLL (15%), PLO (13%), SOO (8%) (Cunha SC et al., Food Chem 2011, 95, 518).

6 - Olive (Oleaeuropea), 3 mt oil in 2009-10.

Olive trees, originating from Asia Minor, characterize the Mediterranean civilization since thousand years. Olives are mentioned several times in the Bible. It is thought that they appeared in Europe around 1700 B.C. but were spread over the Roman Empire around 200 B.C. The oil content of the whole olive is about 30% but only 20% of the tonnage of fruit can be extracted by pressure. The world production of fruit was in 1999 about 14 million tons, Spain having the highest crop (32%), followed by Italy (19%), Greece (14%) and Turkey (11%). The amount of olive oil available varies from year to year and fluctuates from 1.4 to 2 million tons from 1960 to 1995.

In 2003-2009, 79% of the world production of olive oil is expected to be located in the European Community (about 2 million tons), 6% in Tunisia, 5% in Turkey, 4% in Syria, 2% in Morocco, and 1% in Algeria. The fruit or drupe is similar to that of a cherry and is the raw material for the production of olive oil and table olives. The pulp is rich in oil (75% on dry weight basis), the kernel containing only 12-28% oil. Olive oil is known to contain a large proportion of oleic acid (53-86%).

Combined with its natural antioxidants, this high content in oleic acid gives to olive oil an exceptional stability. Many studies were devoted to the physical and chemical changes of the olive fruit, both during development and as a result of the processing to produce table olives (Review in : Bianchi G, Eur J Lipid SciTechnol 2003, 105, 229). Good-quality olive oil is mainly used for edible purposes, the rest being used in industry (soap, textile, cosmetics, pharmacy).

The composition in triacylglycerol species is characterized by the presence of OOO (61%), POO (20%), OOL (12%) (Cunha SC et al., Food Chem 2011, 95, 518).

7 - Sesame (Sesamumindicum, Pedaliaceae), world crop: 0.8 mt oil in 2009-05.

It is thought that this plant was used by the Persians since about 4000 B.C. Sesame oil was used as a remedy and as a cosmetic (Homer reported in Iliad that the goddess Hera spread abundantly sesame oil on her skin before she seduced Zeus). The primary center of origin could be the Fertile Crescent or the Indian sub-continent. The plant is cultivated in tropical to temperate zones, from 40N to 40S latitude. India is the major producer (ca. 25% of the world production). Sesame seeds are used whole, or processed for oil and meal. Whole seeds are used to prepare candies and halva, in baking, soup, and porridge.

Sesame seeds have a high oil content (about 50%) but crops are heavily variable. The oil contains ca. 10% palmitic acid, 4% stearic acid, 47% oleic acid and 39% linoleic acid, is expensive and used for culinary purposes mainly in countries of production.

Its good conservation capacities are due to the presence of a potent antioxidant, sesamol, release from sesamolin upon hydrolysis by storage. The oil is also used as a solvent or carrier for medicine and cosmetics. The world production of sesame seeds was in 1999 about 2.4 million tons, India having the highest crop (27%), followed by China (21%), Sudan (9%) and Myanmar (Burma) (8%).

4 DATA ANALYSIS &INTERPRETATION

Table - 4.1

In Lakhs

Statement of Changes in Working Capital for the Year 2009-2010

ParticularsAs on 31-3-2009As on 31-3-2010Effect on Working Capital

IncreaseDecrease

CURRENT ASSETS

Inventories22.5832.910.32

Sundry debtors173.5217.6644.16

Cash & Bank balance38.5940.021.43

Loans and Advances10.512.612.11

(A)Total Current Assets245.17303.19

CURRENT LIABILITIES

Current Liabilities230.71235.064.35

Provisions000

(B)Total Current Liabilities230.71235.06

(A)-(B) Net Working Capital 14.4668.13

Increase in Working Capital53.6753.67

TOTAL68.1368.1358.0258.02

Interpretation:The Statement of Changes in Working Capital for the Year 2009-2010 is showing that, current assets in 2009 is 245.17 and in 2010 is 303.19, current liabilities in the year 2009 is 230.71 and in 2010 is 235.06, so the working capital is increased i.e 53.67. Table - 4.2

In Lakhs



IncreaseDecrease

CURRENT ASSETS





(A)Total Current Assets303.19600.12

CURRENT LIABILITIES


Provisions000

(B)TotalCurrent Liabilities235.06457.13



TOTAL142.99142.99296.93296.93

Interpretation:

The Statement of Changes in Working Capital for the Year 2010-2011 is showing that, current assets in 2010 is 303.19 and in 2011 is 600.12, current liabilities in the year 2010is 235.06 and in 2011 is 457.13, so the working capital is increased i.e 74.86. Table - 4.3

In Lakhs



IncreaseDecrease

CURRENT ASSETS





(A)Total Current Assets600.12 1,312.17

CURRENT LIABILITIES


Provisions044.4544.45

(B)Total Current Liabilities457.13781.87



TOTAL530.30530.30792.98792.98

Interpretation:

The Statement of Changes in Working Capital for the Year 2011-2012 is showing that, current assets in 2011 is 600.12 and in 2012 is 1312.17, current liabilities in the year 2011 is 457.13 and in 2012 is 781.87, so the working capital is increased i.e 387.31. Table - 4.4

In Lakhs



IncreaseDecrease

CURRENT ASSETS

Inventories106.15139.8933.74

Sundry debtors917.591,407.34489.75



(A)Total Current Assets 1,312.17 2,207.64

CURRENT LIABILITIES

Current Liabilities737.421,062.37324.95

Provisions44.4552.938.48

(B)Total Current Liabilities781.871,115.30

(A)-(B) Net Working Capital 530.301,092.34


TOTAL1,092.341,092.34895.47895.47

Interpretation:

The Statement of Changes in Working Capital for the Year 2012-2013 is showing that, current assets in 2012 is 1312.17 and in 2013 is 2207.64, current liabilities in the year 2012 is 781.87 and in 2013 is 1092.34, so the working capital is increased i.e 562.04. Table - 4.5

In Lakhs



IncreaseDecrease

CURRENT ASSETS

Inventories139.89231.2591.36

Sundry debtors1,407.342,331.85924.51


Loans and Advances495.981,017.46521.48

(A)Total Current Assets2,207.643824.13

CURRENT LIABILITIES

Current Liabilities1,062.372,006.51944.14

Provisions52.9345.097.84

(B)Total Current Liabilities1,115.302,051.60

(A)-(B) Net Working Capital 1,092.341,772.53


TOTAL1,772.531,772.531,624.331,624.33

Interpretation:

The Statement of Changes in Working Capital for the Year 2011-2012 is showing that, current assets in 2012 is 2207.64 and in 2013 is 3824.13, current liabilities in the year 2012 is 1092.34 and in 2013 is 2051.60, so the working capital is increased i.e 680.19.LIQUID RATIOS

The purpose of liquidity ratio is to measure the ability of the firm to meet its current obligations and to provide a quick measure of liquidity by current ratio and quick ratio. Infact, analysis of liquidity needs the preparation of cash budget, cash flow and funds flow statements, but liquidity ratios by establishing relationship between cash and other current assets to current obligations, provide a quick measure of liquidity. A firm should ensure that it does not suffer from lack of liquidity and also that it does not excess liquidity.

The most common ratios, which indicate the extent of liquidity or lack of it, are:

1.Current ratios

2.Quick ratios

3.Net working capital ratios etc.,Current ratio

The current ratio is a measure of the firms short-term solvency. It indicates the availability of current assets in rupees for every one rupee of current liabilities. A ratio of greater than one means that the firm has more current assets than current liabilities claims against them. A standard ratio between is 2:1.

Table - 4.6

Current assets

Current Ratio =--------------------------

Current Liabilities

YearsCurrent assetsCurrent LiabilitiesRatio

2009-10303.19235.061.29

2010-11600.12457.131.31

2011-121,312.17781.871.68

2012-132,207.641,115.302.0

2013-143,824.132051.61.86

Graph 4.1

Interpretation:

In the above chart showing the current ratio is increasing trend, i.e 1.29, 1.31, 1.89, 2.10 and 1.86. it is maintain above the standard form of current ratio i.e 2:1.

Quick Ratio

This ratio establishes a relationship between of liquid assets and current liabilities. It is an absolute measure of liquidity management of the concern. An asset is liquid if it can be converted in to cash immediately or reasonably soon without a loss of value, it ignores totally the stocks. Because inventories normally require some time for realizing into cash: their value also has a tendency to fluctuate. The standard quick ratio is 1:1.

Table - 4.7

Quick Assets (Current Assets Inventory)

Quick Ratio = -----------------------------------------------------------

Current Liabilities

YearsQuick AssetsCurrent LiabilitiesRatio

2009-10270.29235.061.14

2010-11520.8457.131.14

2011-121206.02781.871.54

2012-132,067.751,115.301.85

2013-143,592.882051.61.75

Graph 4.2

Interpretation:

In the above chart showing the quick ratio is decreasing trend throughout the study period, i.e 0.31, 0.42, 0.23, 0.13 and 0.10. It is not maintaining the standard form of quick ratio.Table - 4.8

Cash

Cash Ratio=------------------------------------

Current Liabilities

YearsCashCurrent LiabilitiesRatio

2009-1040.02235.060.17

2010-1195.52457.130.21

2011-1214.59781.870.02

2012-13164.431,115.300.15

2013-14243.572051.60.12

Graph 4.3

Interpretation:

In the above chart showing the cash ratio is increasing and decreasing trend throughout the study period, i.e 0.17, 0.21, 0.02, 0.15 and 0.12 but quick ratio is the below standard form.

Table - 4.9

Net Sales

Working Capital Turnover Ratio =----------------------------------

Working Capital

YearsNet SalesWorking CapitalRatio

2009-10482.468.137.08

2010-11706.98142.994.94

2011-121459.02697.722.09

2012-131969.871227.071.61

2013-142526.411772.531.43

Graph 4.4

Interpretation:

In the above chart showing that, the working capital turnover ratio is showing decreasing trend throughout the study period, i.e 7.08, 4.94, 2.09, 1.61 and 1.43.

Table - 4.10

Return on Investment (ROI)=Profit before Interest, Tax & Dividend X 100

Profit before Interest, Tax & Dividend

Return on Investment (ROI)= ---------------------------------------------------

Capital Employed

YearsPBITCapital EmployedRatio

2009-1065.9326.72.47

2010-1181.8727.72.96

2011-12165.4344.223.74

2012-13208.250.474.13

2013-14192.9850.473.82

Graph 4.5

Interpretation:

In the above chart showing that, the return on investment ratio is showing increasing and decreasing trend throughout the study period, i.e 2.47, 2.96, 3.74, 4.13 and 3.82.Table - 4.11

Net Sales

Capital Turnover Ratio =-----------------------------------

Capital Employed

YearsNet SalesCapital EmployedRatio

2009-10482.426.718.07

2009-11706.9827.725.52

2011-121459.0244.2232.99

2012-131969.8750.4739.03

2013-142526.4150.4750.06

Graph 4.6

Interpretation:

In the above chart showing that, the capital turnover ratio is showing increasing trend throughout the study period, i.e 18.07, 25.52, 32.99, 39.03 and 50.06.

Table - 4.12

Gross Profit

Gross Profit Ratio=------------------------------------

Net Sales

YearsGrass ProfitNet SalesRatio

2009-1065.93482.40.14

2010-1181.87706.980.12

2011-12165.431459.020.11

2012-13208.21969.870.11

2013-14192.982526.410.08

Graph 4.7

Interpretation:

In the above chart showing that, the gross profit ratio is showing decreasing trend throughout the study period, i.e 0.14, 0.12, 0.11, 0.11 and 0.08. Table - 4.13

Net Sales

Total Asset Turnover Ratio =----------------------------------

Total Assets

YearsNet SalesTotal AssetsRatio

2009-10482.4323.971.49

2010-11706.98630.841.12

2011-121459.021600.430.91

2012-131969.872475.180.80

2013-142526.414063.480.62

Graph 4.8

Interpretation:

In the above chart showing that, the total asset turnover ratio is showing decreasing trend in period 2010-14, i.e. 1.49, 1.12, 0.91, 0.80 and 0.62.

5.1 FINDINGS

In the Year 2009-2010 is showing that, current assets in 2009 is 245.17 and in 2010 is 303.19, current liabilities in the year 2009 is 230.71 and in 2010 is 235.06, so the working capital is increased i.e. 53.67.




In the Year 2012-2013 is showing that, current assets in 2013 is 2207.64 and in 2014 is 3824.13, current liabilities in the year 2013 is 1092.34 and in 2014 is 2051.60, so the working capital is increased i.e. 680.19. Current ratio is increasing trend, i.e. 1.29, 1.31, 1.89, 2.10 and 1.86. It is maintain above the standard form of current ratio i.e. 2:1.

Quick ratio is decreasing trend throughout the study period, i.e. 0.31, 0.42, 0.23, 0.13 and 0.10. It is not maintaining the standard form of quick ratio. Cash ratio is increasing and decreasing trend throughout the study period, i.e. 0.17, 0.21, 0.02, 0.15 and 0.12 but quick ratio is the below standard form.

The working capital turnover ratio is showing decreasing trend throughout the study period, i.e. 7.08, 4.94, 2.09, 1.61 and 1.43.5.2 SUGGESTIONS

To increase the profit further the company has to control the operating expenses.

The company should try to control over on fixed assets.

Working Capital Turnover ratio is increasing trend, means it is under trading.

The company has it largest share of working capital blocked in Receivables.

5.3CONCLUSION

I would like to conclude is that the company is maintaining increasing trend of current assets which is good but along with the current liabilities are also showing an increasing trend. So here the working capital requirement is set off with the current assets and current liabilities. So it is good for the company to reduce its current liabilities.

BIBLIOGRAPHY

Advanced Accountancy volume 1, Sultan Chand & Sons Publishers

R.L.GUPTA & M. RADHA SWAMY

Advanced Accountancy volume 2, Sultan Chand & Sons Publishers

R.L.GUPTA & M. RADHA SWAMY

Financial Management, Tata McGraw Hill Publishing Company Ltd.

M.Y. KHAN & P.K.JAIN

Financial Management, Vikas Publishing House Pvt. Ltd.

M.Y. KHAN & P.K. JAIN

Financial Management, Tata McGraw Hill publishing Company Ltd.

PRASANNA CHANDRA

Visited website www.google. Com

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