A STUDY ON

WORKING CAPITAL MANAGEMENT

Incorporated in June 12 2000

HQ in Chennai

other offices in Mumbai, New Delhi, Kolkata and Beijing

categorized into two segments engineering, procurement and

construction ('EPC') projects and development, sale andmaintenance of WTGs

WTG & Cooling tower factories in Pondicherry, Chennai andUmbergaon (Gujarat).

Joint Venture Partners with Leitwind

Company profile

MUNICIPAL SERVICES

PROCESS AND METALLURGY

POWER PLANTS

MINERAL PROCESSING

Objective

Limitations

Data sources

Concept of WC

- Gross Working capital

- Net Working capital

The need of Working capital management

A study on WORKING CAPITAL MANAGEMENT

Tools are ,

1. Ratio analysis2. Trend analysis3. Fund flow analysis

Classification of Ratio analysis,

1. Balance sheet ratio2. Revenue Statement ratio3. Mixed Ratio

Financial analysis

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Current ratio 1.07 1.02 3.18 2.05 1.81

0

0.5

1

1.5

2

2.5

3

3.5

Current ratio

Current ratio: Current asset / Current liabilities

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Quick ratio 0.91 0.91 2.92 1.79 1.64

0

0.5

1

1.5

2

2.5

3

3.5

Quick ratio

Quick ratio: Quick asset / Current liabilities.

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Cash holding ratio 0.04 0.13 0.66 0.26 0.07

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Cash holding ratio

Cash holding ratio: Cash / Current liabilities.

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Ratio 5.52 3.53 2.48 1.5 0.7

0

1

2

3

4

5

6

Ratio

Debt equity ratio: Debt / Equity

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

ratio 1.3 10.7 19.66 13.21 4.19

0

5

10

15

20

25

Inventory Turnover Ratio

Inventory turnover ratio : Cost of goods sold -----------------------

Avg inventory

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Net working capital ratio 3.464655085 2.825140521 0.988901715 1.531023778 2.408260004

0

0.5

1

1.5

2

2.5

3

3.5

4

Net working capital ratio

Working capital turnover ratio:Sales

-------------------------Net working capital

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Fixed asset turnover ratio 1.66 2.24 2.78 3.36 2.8

0

0.5

1

1.5

2

2.5

3

3.5

4

Fixed asset turnover ratio

Fixed asset turnover ratio:Fixed assets

---------------------Shareholder’s fund

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Ratio -15% 2% 5% 4% 4%

-20%

-15%

-10%

-5%

0%

5%

10%

Net Profit Ratio

Net profit ratio :Net profit after tax x 100

Sales

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

ROE -107% 5.02% 14.26% 10.59% 10.55%

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

ROE

Return on equity:Net income / Share holder’s equity

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Interest coverage ratio 0.96 1.44 2.1 3.12 10.7

0

2

4

6

8

10

12

Interest coverage ratio

Interest coverage ratio : EBIT / F I

company has some liquidity problem.

The company’s interest coverage ratio is below the ideal ratio,this was due to increase in debts.

A quick ratio is an indication that the firm is liquid and has theability to meet its current liabilities in time

Cash holding ratio ratio shows that company carries only smallamount of cash.

FINDINGs

the inventory turnover ratio has come down because the

company has spent less in the purchases when comparedwith the previous year.

The funds are not sufficient to finance the fixed assets &the firm has to depends upon outside to finance fixedassets.

FINDINGs