schedule of changes in working capital for the year 2006

7/28/2019 Schedule of Changes in Working Capital for the Year 2006

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SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2006-07

PARTICULARS 2006 2007 Increase Decrease

CURRENTASSETS:

Cash on hand 42159.91 1283980.24 1241820.33 -------------

Balances with bank 494953.16 4095239.26 3600286.1 -------------

Interest Receivable 1826488.57 1826488.57 ------------ ------------

Closing stock 292692156.2 219662803.7 ------------ 73029352.5

Total current assets

A

295055757.8 226868511.7

LIABILITIES:

Outstanding Interest 4429829.45 6094477.9 ------------ 1664648.45

Total current liabilities-B

4429829.45 6094477.9

Working Capital

(A-B)

290625928.3 220774033.8

Net decrease in working

Capital

69851894.5 69851894.5

290625928.3 290625928.3 74694000.95 74694000.95


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Effect of working capital


CURRENT ASSETS:

Cash on hand 1283980.24 22575.2 ------------ 1261405.04

Balances with bank 4095239.26 15881189.48 11785950.22 ------------

Interest Receivable 1826488.57 1826488.57 ------------ ------------

Closing stock 219662803.7 96849740.27 ------------ 122813063.4

Total current assets -A 226868511.7 114579993.5

LIABILITIES:

Outstanding Interest 6094477.9 27190688.4 ------------ 21096210.5

Total current liabilities

-B

6094477.9 27190688.4

Working Capital (A-B) 220774033.8 87389305.1

Net decrease in working

Capital

133384728.7 133384728.7

220774033.8 220774033.8 145170678.9 145170678.9


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CURRENT ASSETS:

Cash on hand 22575.2 1878931.06 1856355.86 -------------

Balances with bank 15881189.48 18140037.49 2258848.01 -------------

Interest Receivable 1826488.57 1826488.57 ------------ -------------

Closing stock 96849740.27 110043159 13193418.73 -------------


LIABILITIES:

Outstanding Interest 27190688.4 40525798.4 ------------ 13335110


-B 27190688.4 40525798.4


Net Increase in working

Capital 3973512.6 3973512.6

91362817.7 91362817.7 17308622.6 17308622.6


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PARTICULARS 2009 2010


Increase Decrease

CURRENT ASSETS:

Cash on hand 1878931.06 141218.80 -------------- 1737712.20

Balances with bank 18140037.49 7254943.14 -------------- 10885094.35

Interest Receivable 1826488.57 1826488.57 -------------- --------------

Closing stock 110043159.00 304641449.50 194598290.50 --------------


LIABILITIES:

Out standing Interest 40525798.40 49024988.90 -------------- 8499190.50


-B

40525798.40 49024988.90

Working Capital

(A-B)

91362817.70 264839111.10

Net increase in

working Capital 173476293.40 173476293.40

264839111.10 264839111.10 194598290.50 194598290.50


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PARTICULARS 2010 2011


Increase Decrease

CURRENT ASSETS:

Cash on hand 141218.80 95082.92 ------------ 46135.88

Balances with bank

7254943.14 17849583.41

10594640.27 ------------

Interest Receivable 1826488.57

1826488.57

------------ ------------

Closing stock 304641449.50 281582198.30 ------------ 23059251.20


LIABILITIES:

Out standing Interest 49024988.90 46928301.64 2096687.26 ------------

Total current liabilities -B 49024988.90 46928301.64


Net Decrease in working

Capital

10414059.60 10414059.60

264839111.10 264839111.10 23105387.08 23105387.08


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CURRENT RATIO

Current ratio indicates ability of the company to meet the current obligation i.e., the

current assets must be sufficient to pay as and when the latter matrices. The standard ratio

is 2:1, the current ratio is calculated by using the formula:

Current assets

Current ratio = --------------------------

Current liabilities

YEAR CURRENT ASSETS CURRENTLIABILITIES RATIO

2006-07 23,33,30,395.13 18,90,06,552.17 1.234

2007-08 12,09,66,623.21 14,22,10,762.18 0.85

2008-09 14,13,26,040.41 14,78,60,117.24 0.955

2009-10 32,30,19,288.99 20,38,85,067.19 1.584

2010-11 31,32,95,829.13 21,93,27,902.79 1.428


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Diagram: -

INTERPRETATION:-

The current ratio was 1.234 in the year 2006 2007 and the year

2007-2008 the current ratio was 0.85 and in the year 2008 -2009 the current ratio was

0.955 this show the current ratio has increase every year but in the year 2009-2010 the

current ratio was decreased to 1.584 . In the year 2010 2011 the current ratio has

increases 1.428.The current ratio is above the standard of 2: 1 ratio and hence it can be said

that there is enough working capital in the Apna Circle InfoTech Pvt Ltd to meet its

current liabilities.

0.00

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

2006-07 2007-08 2008-09 2009-10 2010-11

QUICK ASSETS

CURRENT LIABILITIES

RATIO


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2.QUICK RATIO

Quick ratio are acid test ratio ignores less liquidity assets like inventory.

This takes account readily available cash and other assets which are quickly converted into

cash. The standard is ratio is 1:1. The general principle of quick ratio is as follows:

Liquid Assets

Quick ratio = --------------------------------

Current liabilities

YEAR QUICK ASSETS CURRENT LIABILITIES RATIO

2006-07 1,36,67,591.83 18,90,06,552.17 0.072

2007-08 2,44,16,882.94 14,22,10,762.18 0.169

2008-09 2,83,90,812.06 14,78,60,117.24 0.192

2009-10 1,86,38,461.57 20,38,85,067.19 0.091

2010-11 3,39,59,496.91 21,93,27,902.79 0.154


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Diagram: -

INTERPRETATION:-

The Quick ratio is below satisfactory level of 0:072 during the year 2006-07 and the year

2007-08 above the satisfactory level. However there is a increase during the years 2008-09

this year position is 2010-11 the increase in the Quick ratio indicates satisfy trend of

company.

0.00

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

2006-07 2007-08 2008-09 2009-10 2010-11

QUICK ASSETS

CURRENT LIABILITIES

RATIO


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INVENTORY TURNOVER RATIO

Turnover ratio is also known as stock velocity. This ratio is calculated to consider the

adequacy of the quantum of capital and its institution for investing in inventory.

A firm must have reasonable stock in caparison to sales. It is the ratio of cost of

sales and average inventory of. This ratio helps the financial managers to calculate

inventory policy. This ratio reveals the number of times finished stock is turned over

during a given accounting period. The ratio is used for measuring the profitability. These

are the various ways in which stock turnover ratio may be calculated.

Net sales

Inventory turnover ratio = --------------------------------

Average Inventory

YEAR NET SALES AVERAGE INVENTORY RATIO

2006-07 20,14,86,573.36 23,41,47,889.61 0.86

2007-08 13,05,17,436.90 13,75,97,979.61 0.948

2008-09 9,66,54,360.90 8,31,65,010.43 1.162

2009-10 12,37,19,616.75 10,30,03,384.82 1.201

2010-11 36,88,53,566.89 18,47,71,625.02 1.996


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Diagram: -

INTERPRETATION

The Inventory turnover ratio was 0.86 in the year 2006 2007 and the year 2007-2008 the

current ratio was 0.948 and in the year 2008 -2009 the current ratio was 1.162 this show

the current ratio has increase every year but in the year 2009-2010 the current ratio was

decreased to 1.201 . In the year 2010

2011 the inventory turnover ratio has increases

1.996.

0.00

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

2006-07 2007-08 2008-09 2009-10 2010-11

QUICK ASSETS

CURRENT LIABILITIES

RATIO


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5.CASH POSITION RATIO

Cash in the most liquid asset, a financial analyst may examine the ration of cash

and its equivalent to current liabilities. Trade investment or marketable securities are

equivalent of cash, therefore, they may be included in the computation of cash position

ratio.

Cash+ marketable securities

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

Current liabilities

YEAR CASH+MARKETABLE

SECURITIES

CURRENT

LIABILITIES

RATIO

2006-07 53,79,219.50 18,90,06,552.17 0.028

2007-08 1,59,03,764.68 14,22,10,762.18 0.111

2008-09 2,00,18,991.55 14,78,60,117.24 0.135

2009-10 79,51,888.86 20,38,85,067.19 0.039

2010-11 4,56,44,654.96 21,93,27,902.79 0.208


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Diagram: -

INTERPRETATION :-

The cash position ratio is inadequate as there are ups and downs during the year. The

above ratio indicates that the company is unable to quickly realize its current liabilities it is

not good enough.

0.00

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

2006-07 2007-08 2008-09 2009-10 2010-11

QUICK ASSETS

CURRENT LIABILITIES

RATIO


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6.WORKING CAPITAL TURNOVER RATIO

Working capital of a concern is directly related to sales. The current assets like

debtors, bills receivable, cash, and stock etc., change with the increase or decrease in sales.

The working capital is taken as:

Working capital =current assets-current liabilities

This ratio indicates the velocity of the utilization of net working capital. This ratio

indicates the number of times the working capital is turned over in the course of a year.

The ratio measures the efficiency with which the working capital is being used by a firm.

A higher ratio indicates the efficient utilization of working capital and the low ratio

indicates inefficient utilization of working capital.

SALES

WORKING CAPITAL TURNOVER RATIO = -------------------------------

NET WORKING CAPITAL

Year NETSALES NET WORKING CAPITAL RATIO

2006-07 20,14,86,573.36 4,43,23,842.96 4.545

2007-08 13,05,17,436.81 2,12,44,138.97 6.143

2008-09 9,66,54,360.90 1,35,34,076.83 7.141

2009-10 12,37,19,616.75 11,91,34,221.80 1.038

2010-2011 36,88,53,566.89 9,39,67,926.34 3.925


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Diagram: -

INTERPRETATION :-

This ratio indicates the velocity of the utilization of net working capital. This ratio

indicates the number of times the working capital is turned over in the course of a year.

The ratio measures the efficiency with which the working capital is being used by a firm.

This ratio indicates the number of times the net sales met with the working capital for the

year. The turnover of the working capital has highly increasing from 2006-2007 to 2008-

09.

0.00

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

2006-07 2007-08 2008-09 2009-10 2010-11

QUICK ASSETS

CURRENT LIABILITIES

RATIO


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schedule of changes in working capital for the year 2006

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