wroking capital management of britannia industries

8/12/2019 Wroking Capital Management of Britannia Industries

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Submitted By : ABHIJIT KUMAR NAGDEV

Admission No. : DPGD/JA12/0664

Specialization Name : Finance

Name of the Institute : Welingkar Institute of

Management.

Year : December 2013


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WORKING CAPITAL MANAGEMENT

Working Capital is the amount of capital that a business hasavailable to meet the day to day cash requirements of its

operations.

Working Capital refers to that part of the firm capital, which is

required for financing Short-Term or Current Assets such asCash, Marketable Securities, Debtors and Inventories.

Working Capital is also known as Revolving or Circulating

Capital or Short Term Capital.

There are two interpretation of working capital underthe balance sheet concept:

Gross Working Capital

Net Working Capital


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The term working capital refers to the Gross working capital

and represents the amount of funds invested in current assets.

Thus, the gross working capital is the capital invested in totalcurrent assets of the enterprises. Current assets are those assets

which are converted into cash within short periods of normally

one accounting year.

The term working capital refers to the net working capital. Net

working capital is the excess of current assets over current

liabilities or say:

Net Working Capital = Current Assets - Current Liabilities.


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The gross operating cycle of a firm is equal to the length of the

inventories and receivables conversion periods. Thus,

Gross Operating Cycle = RMCP + WIPCP + FGCP + RCP

RMCP = Raw Material Conversion Period

WIPCP = Work -in- Process Conversion Period

FGCP = Finished Goods Conversion Period

RCP = Receivables Conversion Period


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About Company:-

In 1918 The Company was Incorporated on 21st March, as a

public limited company under the Indian Companies Act, VII

of 1913.

In 1979 With effect from 3rd October, the name of the

Company was changed from the Britannia Biscuit Co., Ltd., to

Britannia Industries Ltd.

Company has its offices at Bangalore Headquarters,

Mumbai, Chennai, Delhi, Calcutta, Hyderabad

The Company is divided into two divisions

Biscuit &

Bakery

Britannia Industries LTD.


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Awards of Britannia Industries.

Britannia received the Most Respected

Company Award 2011 from Businessworld.

Bourbon received the Most Popular

Confectionery Product Preferred By Youth

(Biscuit) Award.

Britannia was awarded the Global

Performance Excellence Award (GPEA) by Asia

Pacific Quality Organization (APQO)


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Limitations:-

Large number of executive staff & their assistants are

appointed, at the same time they are highly paid which affects

to the profitability of company.

Dead Stock & Wastage of Material affects to the cost of

material.

Delivery of Material is not as per the schedule/timecommitment, so it also affects to the sales of company.


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Recommendation:-

Company should increase the inventory holding period. It is

the major part of working capital of company.

Company has to take control on cash balance because cash isnon earning assets and increase cost of funds.

Company should raise it fund through short term sources for

short term requirement of funds.


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wroking capital management of britannia industries

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