Working Capital Management

WORKING CAPITAL MANAGEMENT BELLARY STEEL
ROLLING MILL

Table of Contents
CHAPTER PARTICULARS PAGE NO.
I INTRODUCTION
Statement of the problem
Objectives
Methodology of the study
Scope of the study
Limitations of the study
II INDUSTRY PROFILE
III COMPANY PROFILE

IV
THEORETICAL ASPECTS OF THE
STUDY
V DATA ANALYSIS AND
INTERPRETATION
VI FINDINGS, SUGGESTIONS AND
CONCLUSION
ANNEXTURE
BIBLIOGRAPHY

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CHAPTERI
INTRODUCTION
INTRODUCTION
ROLLING MILL
Empirical observations show that the financial managers have to spend much of their
time to the daily internal operations relating to current assets and current liabilities of the firms.
As the largest portion of the managers time is devoted to working problems, it is necessary to
manage working in the best possible way to get maximum benefit. he effective management of
the business, among other things primarily depends upon the manner in which the short!term
assets and short run sources of financing are managed. he management or current assets
management consists of inventories, accounts receivable and cash " bank balances as the ma#or
components. here is a difference between current assets and fixed assets in terms of their
li$uidity. A firm re$uires many years to recover the initial investments in fixed assets such as
plant and machinery and land and buildings. %n the contrary, investments in current assets are
turned over many times a year. &nvestments in current assets such as inventories and book debts
are reali'ed during the firms working capital cycle, which is usually less than a year. (orking
capital is that proportion of a companys total capital, which is employed in short!term
operations. hus, a study in this field is of ma#or importance to both internal and external
analysis, for its close relationship with the day!to!day operations of a business.
here are many aspects of working capital management, which form an important function of a
financial manager)!
(orking management represents a large portion of the firms investment in assets.
(orking management has greater significance not only for small firms but also for large
firms.
he need for working capital is directly related to sales growth.
*ost of the work dealing with working capital management in confined to the balance
sheet, which is directed towards optimi'ing the levels of cash and marketable securities,
receivable and inventories. +or the most part, optimi'ation of these current assets is isolated from
the optimi'ation of the other current assets and the overall valuation of the firm.
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he decision concerning cash and resources, receivable, investments and current
liabilities is with an ob#ective of maximi'ing the overall value of the firm. %nce decisions are
reached these areas, the levels of working capital are also reduced. An appropriate level of
working capital is to be maintained as the excessive working capital interrupts the smooth flow
of the business activity and curbs profitability. Also, there are a lot of circumstances where
shortage of working capital has proved to be the ma#or factor for business failure. %perating
plans are out of control and the corporate ob#ectives get blurred. he suppliers and the creditors
give the firm an adverse credit rating and tighten up credit terms.
he problem of managing working capital has got a separate entity as against different
decision!making issues concerning current assets individually. (orking capital has to be
regarded as one of the conditioning factors in the long run operations of a firm, which is often
inclined to treat it as an issue of short!run analysis and decision!making.
he management of working capital hence involves constant vigilance to ensure that the
right $uantum is available on a continuing basis to support and promote the activities. -ound
financial and statistical techni$ues, supported by #udgment, should be used to predict the
$uantum of working capital needed at different time periods.
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STATEMENT OF THE PRO!LEM
(orking capital is an important re$uirement for any business, without which no business
can survive. Every activity of the business is related to the availability of the working capital.
hat is, arranging short!term financing, negotiating favorable credit terms, controlling the
movement of cash, administering the account receivable and monitoring the investment in
inventories. All this consumes a great deal of time of finance managers. Also the obstacles
inhabiting the effective working capital management throws open challenges to the finance
managers in managing working capital.
&nitially sponge iron business of. /E00A12 -EE0 1%%0&34 *&00 .was carried on,
but in the year 2555, economy of America came down, and a recession in the steel industry there,
reduced the buying power of American customers, thereby reducing the demand for sponge. 6ue
to which the sales of /E00A12 -EE0 1%%0&34 *&00 down which affected the profitability
of the company directly.
As profitability effects the working capital management of a firm, it created an opportunity to
prepare a case study at /E00A12 -EE0 1%%0&34 *&00.
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NATURE OF THE STUDY
According to the American institute of certified public accountants, financial statements reflect
8a combination of recorded facts, accounting conventions and personal #udgments and the
#udgments and conventions applied affect them materially.9 his implies that data exhibited in
the financial statements are affected by recorded facts accounting conventions and personal
#udgments.
Re"o#$ fa"ts) he term recorded facts means facts which have been recorded in the accounting
books. +acts which have not been recorded in the financial books are not depicts in the financial
statement, however material might be.
A""o%nt&n' "on(ent&on) &t implies certain fundamental accounting principles which have been
sanctified by long usage.
Pe#sonal *%$'+ents) &t has also an important bearing on the financial statement.
O!,ECTIVES OF THE STUDY
o study the efficiency of working capital management of the company
o analy'e the working capital trends in the company and study the efficiency of cash,
inventory and receivables management of the company.
o understand and analy'e the working capital position of /-1*. 6uring the period of
255:!15.
o measure the overall financial position of the organi'ation with the help of ratio
analysis.
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RESEARCH METHODOLOGY
1esearch is organi'ations in$uiry designed and carried out to provide information
to solve the problem. &n fact is the scientific investigation of a certain problem. 81esearch is the
process of systematically obtaining accurate answer to significant and pertinent $uestion by the
use of scientific method in gathering and interpreting information9. A 1esearch 6esign is the
specification of methods and procedures for ac$uiring the information needs to structure or solve
.2the problems. he type of research used was 6escriptive type.
his pro#ect 8A -tudy on (orking ;apital *anagement /E00A12 -EE0 1%00&34 *&00-
8of , is considered as an analytical research.
Analytical 1esearch is defined as the research in which, researcher has to use facts or
information already available, and analy'e these to make a critical evaluation of the facts,
figures, data or material. he pro#ect includes finding of primary data and secondary data. &t
includes surveys and fact!finding en$uiries. -o, the pro#ect basically covers description of state
of affairs, as it exists at present. <ere in this case, the researcher does not have control over the
variables. <ere, the #ob done as a researcher is to use the facts and information already available.
he research is done with the aid of the annual reports, the company database textbooks and the
observation and interaction being the only source of primary data whatever is used. he same set
information is analy'ed to make the critical evaluation of the material. (ith the given nature of
research this is an analytical type of research wherein the analysis of the existing set of affairs
are used to arrive the effect of working capital management on the return and profitability of the
company.
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SOURCES OF DATA
+or making the study of the topic working capital management with reference to
interview method, personal method, has been adopted. he decision in any business situation
depends on the data collected. +acts are expressed in $uantitative form can be termed as data.
-uccess of any statically investigation depends on the availability of accurate and reliable data.
hese depend on the appropriateness of the method chosen for data collection. hus, data
collection is a very basic activity in decision making
6ata may be classified as primary and secondary data.
P#&+a#- Data)
(hen data is collected under the control and supervision of the investigator, such type of
data referred to as primary data. &n the present study interview method has been used and
ascertained about the company from employees working in various departments. his method
involves presentation of oral!verbal stimuli and reply in terms of oral!verbal responses.
Se"on$a#- Data)
(hen data is derived from other sources, then data is called as secondary data. *ost of
the facts and figures in this report came from published sources like website of company
i.e.www.bsrm>555?yahoo.com and annual reports.

SCOPE OF THE STUDY
he study confines to /.-.1.*. the published annual reports supplied by the company for
important source of statistical data for #udging its working results and financial position. he
financial statement comprising of financial year were used.
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LIMITATIONS OF STUDY
his report is based on the annual reports, which are provided by the company that
cannot be relied upon.
he collection of data for analysis is restricted to /ellary -teel 1olling *ills., /ellary
only.
ime was ma#or limiting factor to the study.
Even though the information collected is reliable, it may not be 155A accurate.
%nly 7 years annual reports have been considered for the calculation of working capital
of the company.
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CHAPTERII
INDUSTRY PROFILE
ROLLING MILL
GENERAL INTRODUCTION OF INDUSTRY
-ince its independence, &ndia has experienced steady growth in the steel industry, thanks
in part to the successive governments that have supported the industry and pushed for its robust
development.
+urther illustrating this plan is the fact that a number of steel plants were established in
&ndia, with technological assistance and investments by foreign countries.
&n 1>>1, a substantial number of economic reforms were introduced by the &ndian
government. hese reforms boosted the development process of a number of industries B the
steel industry in &ndia in particular B which has subse$uently developed $uite rapidly.
&ndia continually posts phenomenal growth records in steel production. &n 1>>2, &ndia
produced 1..,, million tonnes of finished carbon steels and 1.7> million tonnes of pig iron.
+urthermore, the steel production capacity of the country has increased rapidly since 1>>1 B in
255>, &ndia produced nearly .:.7=7 million tonnes of finished steels and ..,>, million tonnes of
pig iron.
/oth primary and secondary producers contributed their share to this phenomenal
development, while these increases have pushed up the demand for finished steel at a very stable
rate.
&n 1>>2, the total consumption of finished steel was 1..@. million tonnes. &n 255>, the
total amount of domestic steel consumption was .,.>27 million tonnes. (ith the increased
demand in the national market, a huge part of the international market is also served by this
industry. oday, &ndia is in seventh position among all the crude steel producing countries.
ROLLING MILL
Top Companies in Indian Steel Industr
C Ahmadabad -teel ;raft) Droducer of windows, ventilators, steel doors and the like.
C /okaro -teel Dlant) -teel manufacturer.
C Essar -teel) Droducer of sponge iron, steel and iron ore pellets.
C Eindal &ron " -teel) Droducer of galvani'ed steel products.
C Eindal -teel " Dower) *anufacturer of mild steel slabs and sponge iron.
C -teel Authority of &ndia) *anufacturer of steel and iron.
C ata -teel) Droducer and supplier of wire rods, bars, and steel flats. " so on
ROLLING MILL
India!s Steel Industr
&ndiaFs -teel &ndustry is more than a century old. /efore the economic reforms of the
early 1>>5s the &ndian steel industry was a predominantly regulated one with the public sector
dominating the industry. &n 1>>2, the liberali'ation of the &ndia economy led to the opening up of
various industries including the steel industry. his led to the increase in the number of
producers, increased investments in the steel industry and increased production capacity. -ince
1>>5, more than 1s 1>,555 crores GH-I ..=5.7@ millionJ has been invested in the steel industry
of &ndia.
*ore than ,755 different varieties of steel are available in the steel industry of &ndia.
hese can however be classified into two broad categories !
C Flat P#o$%"ts +lat products include plates and hot rolled sheets such as coils and sheets. +lat
products are derived from slabs. %ne of the ma#or uses of steel plates is in ship building.
C Lon' P#o$%"ts 0ong products include bars, rods, wires, ropes and piers. hese are called
long products due to their shapes. 0ong products are made from billets and blooms. 0ong
products are mostly used in housing and construction and also in rail tracks.
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CHAPTERIII
COMPANY PROFILE
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COMPANY PROFILE
INTRODUCTION TO THE COMPANY )
/el l ary -t eel 1ol l i ng *i l l s short l y known as 8/-1*9 i s one of t he
l eadi ng re!rol l i ng mi l l manufact ures of $ual i t y *i l d st eel st ruct ural l i ke
/eams, ;hannel s, Angl es, +l at s, i n -out hern &ndi a set up i n /el l ary
6i st ri ct a backward regi on of Karnat aka i n 1>=5. hi s uni t , *Ls /-1*,
has now achi eved a t urnover of 1s. 2: crores per annum. /-1* i s a
DA13E1-<&D +&1*.
!RIEF HISTORY OF !SRM)
*Ls /el l ary -t eel 1ol l i ng *i l l s came i nt o exi st ence i n 1>=5, a
part nershi p fi rm, as a publ i c ut i l i t y uni t , by i nst al l i ng @9i nch rol l i ng
mi l l . he uni t i s l ocat ed at si ght number. @>5, Anant apur 1oad, /el l ary.
he i ni t i al product i on was .755 * pa. he out put of t he uni t was * -
-t ruct ural , angel s, fl at s, s$uares, and ' angel s and * - rounds.
-i nce i t s i ncept i on, t he uni t has grown i n l eaps and bounds and t o
cat er t o t he ever i ncreasi ng demand for st ruct ural , t he uni t i n t he year
1>=2!=, convert ed t he @9 i nch rol l i ng mi l l i nt o 159 i nch rol l i ng mi l l and
was abl e t o achi eve an annual t urnover of 1s. 1. 7 ;rore, produci ng
annual l y :555 * pa.
he promot ers once agai n went i n for expansi on of t he uni t i n t he year
1>>5 by i nst al l i ng 1:9 i nch rol l i ng mi l l t o t he speci al st ruct ural l i ke
ROLLING MILL
gi rders and channel s used for fabri cat i on of i ndust ri al sheds a rai l way
pl at form sheds. hese can be used for const ruct i on of dwel l i ng houses
t oo. (i t h t he i nst al l at i on of t hi s 1:9 i nch rol l i ng mi l l , t hi s uni t had t he
di st i nct i on of bei ng t he onl y of i t s ki nd i n t he ent i re st at e of Karnat aka.
(i t h t he annual t urnover of 1s. 1: ;rore up t o 1s. 2. ;rore, produci ng
annual l y 22555 * pa. %f out put .
he uni t was abl e t o procure t he re$ui red ski l l ed l abor from wi t hi n t he
st at es of Karnat aka and was abl e t o prove t hat a uni t l ocat ed i n
Karnat aka was pot ent i al enough t o t rai n and absorb l abor fro wi t h i n
st at es and uni nt errupt edl y cont i nue i t s product i on.
Keepi ng i n vi ew t he growi ng demand and re$ui rement of * -
-t ruct ural and heavy sect i ons, and havi ng regard t o safet y of workers t he
promot ers have now deci ded t o at omi 'e t he ent i re pl ant t o i ncrease t he
product i vi t y and effi ci ent ut i l i 'at i on of t he exi st i ng capaci t y and al so
keepi ng i n vi ew t he cost effect i veness t he promot ers have proposed t o go
i n at omi 'at i on of t he ent i re pl ant .
(i t h i ni t i al present i nvest ment of 1s. 25L ! l akhs i n 1>:>, t he uni t
has grown over t he years and at present t he uni t i s wort h of 1s. 12L !
;rore and wi t h addi t i onal i nvest ment of 1s. 2. @5 ;rore i ncl udi ng margi n
money for worki ng capi t al t he promot ers of =555 * pa. here by
l eadi ng t o an annual t urnover of 1s. ,=. 7 ;rore.
Aft er compl et i on of fi rst phase of expansi on programme as
di scussed above. &n t he second phase t he uni t i nt ends t o i nst al l 1oughi ng
st ands for bot h 1:9 and 159i nch mi l l , al ong wi t h rol l er t abl es and ski ds
whi ch hel ps t o i ncrease t he product i on of @555 * pa wi t h and
addi t i onal i nvest ment of 1s. @5L ! l akhs.
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o have uni nt errupt ed power suppl y, t o t i de over t he power ;ri si s,
t o get product i on const ant l y, and t o meet ever i ncreasi ng demand, t he
uni t approves i n t hi rd phase, t o have i t s own ;apt i ve Dower 4enerat or,
wi t h and i nvest ment out l ay of 1s. @5L ! l akhs.
!AC. GROUND OF THE COMPANY
/el l ary -t eel and 1ol l i ng *i l l s has been promot ed by 0at e -ri .
-i nganamal a 3agappa, who fi rst vent ured i n manufact uri ng agri cul t ural
i mpl ement s t hrough t he met hods used by a bl ack smi t h, -hri -. *adhava
-L o -. 3agappa, at a young age of 1> years # oi ned hi s fat hers busi ness
and was i nst rument al i n set t i ng up a /el l ary -t eel and 1ol l i ng *i l l s.
Aft er ac$ui ri ng vari ed experi ence i n rol l i ng mi l l s for about 15 years,
-hri -. *adhava i n 1>@5 t hought i t appropri at e t o go for backward
i nt egrat i on and he set up a new i ndust ry cal l ed 8/el l ary -t eel and Al l oys
0i mi t ed9 short l y known as 8/-A09 i n t he year 1>@.. -hri -. *adhava
who i s now havi ng over 77 years and experi ence i n market i ng of &ron and
-t eel product s i s wel l known i n t he &ndi an &ron and -t eel &ndust ry.
MODERNISATION!RIEF PROFILE
At present al l mat eri al s, Gbot h i nward and out goi ngJ are
manual l y handl ed. hi s process re$ui res a l ot of man power and huge
cost associ at ed wi t h t he l oadi ng and unl oadi ng of t he raw mat eri al s and
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fi ni shed product s. he exi st i ng process can be summed up as bel ow!
he raw mat eri al s i . e. , bi l l et and bl ooms are unl oaded from
t rucks manual l y and spread i n t he bi l l et s yard for cut t i ng
i nt o re$ui red l engt hs and si 'es.
he bi l l et s i n t he yard are t hen marked i nt o di fferent si 'es
and manual l y cut , whi ch re$ui res very heavy l abor.
he bi l l et s so cut are col l ect ed and st acked and charged
i nt o t he furnace manual l y.
PARTNERS)
he part ners of t he uni t are) !
1. -. *adhava
2. -. -i varam Drasad
,. -mt . -. Darvat hi *adhava
.. -. /hanu prakash
7. -. *adhu /abu
:. -. <ari Kri shna
Nat%#e of t/e Co+0an- )
/-1* i s a manufact uri ng fi rm produci ng *- /eams,
*- +l at s, *- Angl es, et c. , whi ch fal l s under t he umbrel l a of st eel
i ndust ry. /-1* i s a 1e!1ol l i ng mi l l wherei n raw mat eri al G/i l l et sJ are
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heat ed and t hen passed t hrough t he pressi ng machi nes t o get t he fi nal
re$ui red out put
V& s& on of t/e "o+0an-)
1. o doubl e t he product i on capaci t y of t he st eel pl ant product i on i n t he
subse$uent 2ears
2 o provi de t he st eel of t he i nt ernat i onal st andards.
, o use t he l at est st eel product i on t echnol ogy t o produce t he st eel and
mi ni mi 'e t he cost of t he product i on.
. o reduce t he cost of i nvent ory of raw mat eri al s and ot her product i on
mat eri al s.
7. o adopt eco!fri endl y product i on t echnol ogy and use t he professi onal
management *et hods i n managi ng t he organi 'at i on.
M& ss& on of t/e Co+0an-)
he mi ssi on of t he company i s t o produce $ual i t y i ron and
st eel product s as per domest i c and i nt ernat i onal market s and t o
achi eve t ot al cust omer sat i sfact i on professi onal syst ems and
pract i ce i n every fi el d, gi vi ng due wei ght age t o t he devel opment of
human resource avai l abl e i n t he organi 'at i on and t o est abl i sh
l eadershi p i n t he fi el d and cont ri but e t o nat i onal weal t h and
ul t i mat el y t o become one of t he best Gi n t erms t o t urnover and
effi ci encyJ st eel pl ant i n &ndi a.
O!,ECTIVES OF THE ORGANISATION
o earn a reasonable rate of interest on investment.
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o maximi'e utili'ation of the existing facilities in order to improve efficiency and
increase productivity.
o further enhance distribution network for providing assured service to customers
throughout the country through expansion of reseller network as per marketing plan.
o achieve lowest possible energy consumption rate
o use professional management methods.
o get net foreign exchange earns.
o act as a catalyst to accelerate industrial development of the region.
o establish long term relation with the customer.
Goals)
Employee health and welfare.
4iving good environment to society and employee
Aim to fly high as a top steel company in /ellary.
Employee satisfaction.
4iving a right $uality " $uantity to the customers.
A"/&e(e+ent
/-1* is the first company planned to establish &ntegrated -teel Dlant in the year
1>>2 in south &ndia.
A1a#$s
&n 1>>2 -<&1%*A3& A(A16 issued by -hiromani &nstitute.
&n1>>, &36&A3 ;%H3;E00%1 %+ *A3A4E*E3 EME;H&NE A(A16 issued by
honorable general secretary, /ombay.
ROLLING MILL
&n 1>>7 D1&6E %+ &36&1A 4%06 -A1 A(A16 issued by Dranab *ukher#ee.
4%06 -A1 A(A16 issued by &nstitute of Economic -tudies.
&E- H62%4A 1A3A A(A16.
&36&1A 4A36<& -%0&6A1&2 A(A16 by &ndian -olidarity counsel.
PRO"UCT PRO#ILE
S0on'e I#on)
-ponge &ron is the semi finished product, which is a ma#or raw material used in
producing /illets, *erchant 1olling *ill, /ar 1olling *ill, and -teel.
Earlier sponge iron was used to reduce the sulphur and carbon content present in
the scrape. 6ue to hike in the price of scrape, today sponge iron is directly used as a basic raw
material in production of steel.
C/e+&"al Co+0os&t&on of S0on'e I#on)
&n order to reduce carbon and sulphur content, which is present in the scrape the +e G&ronJ
content maintained in sponge iron is :@A to =2A.
(hen sponge iron is directly used in manufacturing steel, the +e GironJ content
maintained in sponge iron is above =7A.
!as&" Ra1 +ate#&al %se$ to 0#o$%"e one ton of s0on'e &#on)
&ron ore 1=55 kg
;oal 1275 kg
0ime stone 155 kg
ORGANISATION STRUCTURE.
St#%"t%#e of !SRM)
ROLLING MILL
*r. -. *adhava /-1* and *adhu babu /-1* are t he sol e
aut hori t y for t he whol e group. *adhu babuG%perat i ng managerJ, i s t he
head of t he fi rm, who i s cont rol l i ng al l t he depart ment s. <e i s al so head
of *arket i ng 6epart ment .
here are mai nl y 7 depart ment s i n t he /-1*, vi 'O
-al esL *arket i ng, Durchase " st ores, Account s " +i nance, <1 " Admi n,
and product i on " process depart ment s. %ut of t hese depart ment s /-1* i s
superi or i n -al es, +i nance and i n product i on depart ment s.
he st ruct ure i s wi del y spread but al l t he depart ment s are
cl osel y i nt er rel at ed and work t owards sat i sfyi ng t he cust omers.
Managing Director
Operations Officer
Director of supporting Director of personnel
Administrative Director
Executive Director
Finance
Manager
Marketing Manager Purchasing Manager HR and Administration
Production &
Process
orker!s manager
Foreman
E"# & PF officer
$ime keeping officer
Welfare officer
Accounting
officer
Assistant officer
Senior Officer
eight %ridge
Marketing Representatives
Purchasing Officer
Assistant "tores
"tores incharge
Supervisor
Clerks
ROLLING MILL
FUNCTIONAL DEPARTMENTS OF THE ORGANISATION
2. MAR.ETING
he marketing department takes care of the market development activities, network
expansions, sales and collections, and marketing accounts.
3. FINANCE AND ACCOUNTS
+inance and accounts department deals with corporate finance, account matters related to
employees, company infrastructure, investments and assets.
4. MATERIALS
he materials department arranges materials related to the product from various suppliers
by negotiating prices and ensuring $uality.

5. PRODUCTION
his department takes care of the production and related activities to meet the target.
6. 7UALITY
Puality department ensure material $uality to deliver a finished goods for supply.
8. R 9 D
1 " 6 will carry out research on new designs and carry out appropriate developments on the
product before certifying satisfactory performance to the management
ROLLING MILL
N%+be# of e+0lo-ees 1o#:&n' &n !SRM)
6ivision 6ept. *anager Executive -taff (orkmen Total
-teel melt shop 5 2 5 11 24
1olling mills 5 2 . = 24
-ponge iron division = 21 15 ,> ;;
;aptive power plant 1 . 5 1@ 34
&ntegrated steel plant , 5 2 > 25
Administrative 6ept. , 2, 77 5 <2
/ranch 7 2 : 5 24
Total 2= 65 ;; <5 345
Ma*o# "o+0et&to#s of s0on'e &#on)
<ottur steels limited
1ayan steels limited
Eanaki steels limited
Nenkateshwara steels limited

!oa#$ of D&#e"to#s
*anaging 6irector.
3ominee 6irector of &+;&.
ROLLING MILL
6irector.
.
P#o+ote#s)
/-1* was promoted by *r.-.*adhav, as managing director and *rs.-.Darvathi, as
6irector of /ellary -teel 1olling mill. <is father GlateJ -.3agappa was the first and
foremost promoter and founder of /-1* private sector in Karnatak
TURN OVER
he annual turnover expected was normally 215555 of /ellary -teel 1olling *ills
!RANCHES
C/enna&
H-$e#aba$
M%+ba&
(orking capital management is one of the key responsibilities of finance manager. As
/-1* involves manufacturing activity it re$uires efficient amount of working capital to meet its
day!to!day needs. he long!term working capital needs are for building, plant, furniture, etc., and
the short!term needs are cash, inventories, securities, etc. he balances sheet shows the financial
position of a company at a given point of time. &t provides a snapshot and is regarded as a static
picture. he income statement or the profit and loss statement reflects the performance of a
company over a period of time. he significant accounting policies followed by /ellary -teel
1olling mills. are as followsO
T/e C%##ent Assets an$ C%##ent L&ab&l&t&es of !ella#- Steel Roll&n' M&lls. &s '&(en
belo1.
CURRENT ASSETS)
INVENTORIES
aJ 1aw materials, stores parts, components etc
ROLLING MILL
bJ -tock in rade
(ork!in!progress.
+inished goods.
cJ -crap.
SUNDRY DE!TORS Gunsecured considered good except doubtful debtsJ
aJ 6ebts outstanding for a period exceeding : months
bJ %thers
CASH AND !AN. !ALANCES
aJ ;ash in hand.
bJ Amount in ransit
cJ /alances with -cheduled /anks
LOANS AND ADVANCES Gunsecured considered good except doubtful debtsJ
aJ Advances recoverable in cash or kind.
bJ -undry Advances
CURRENT LIA!ILITIES AND PROVISIONS
CURRENT LIA!ILITIES
aJ -undry ;reditors.
bJ Acceptances
cJ rade Advances
ROLLING MILL
PROVISIONS
aJ +or taxation Gincluding +/J
bJ +or gratuity.
cJ +or Earned 0eaves
dJ +or (arranty ;laim
/y studying the working capital in /-1* one can know the factors influencing the
growth prospects of the company
SOURCES OF >OR.ING CAPITAL TO !ELLARY STEEL ROLLING MILLS
S/a#es) &ssues of shares is the most important source for raising the permanent or
long!term capital for /ellary -teel 1olling *ills, has ,,,2:@,@1= G,1,2:@,@1=J E$uity -hares of
1s 15L! each.
Loans) +inancial institutions such as commercial banks, life insurance
;orporation, industrial finance corporation of &ndia, state financial corporation etc provides long
term, short term, and medium term loans to the companies.
Se"%#e$ loans) /-1* ;ompany gets secured loans by borrowing money from)
aJ +rom /anks
bJ +inance 0ease obligations
cJ +rom a ;ompany
dJ Qero coupon debentures
Unse"%#e$ loans) /-1* ;ompany gets unsecured loans from)
aJ +ixed 6eposits Hnclaimed
bJ +rom ;ompanies
ROLLING MILL
CHAPTERIV
THEORETICAL ASPECTS OF THE
STUDY
ROLLING MILL
CONCEPTUAL DEFINITION
aJ F&nan"e) +inance is defined as the provision of money at the time when it is re$uired.
6epending upon the nature of activities business re$uires short term, medium term and
long term funds.
bJ F&nan"&al state+ent ) +inancial statement is the collection of data organi'ed according to
logical and consistent accounting procedures. &ts purpose is to convey and understanding
of financial aspect of a business firm.
cJ >o#:&n' "a0&tal ) working capital is the excess of current Assets over current liabilities.
(orking capital management is a significant in financial management due to the fact that
it plays a vital role in keeping the wheel of business enterprises running. (orking capital
management is concerned with short term financial decision.
dJ !alan"e S/eet ) /alance sheet shows all the assets owned by the concern and all the
liabilities and claims it owes to owners and outsiders.
eJ In"o+e State+ent ) &ncome statement is prepared to determine the operational position
of the concern. &t is the statement of revenues earned and the expenses incurred for
earning that revenue.
CONCEPTS OF >OR.ING CAPITAL
R3et working capital refers to the difference between the inflow and outflow of funds. &n
other words, it is the net cash inflow. &t is defined as the excess of current assets over current
liabilities and provisions. ;onceptually, working capital is either explained as) ! 3et (orking
;apital or 4ross (orking ;apital. hese concepts are not exclusiveO rather they have e$ual
ROLLING MILL
significance from management viewpoint. 4ross working capital refers to the firms investment
in current assets.
NEED FOR >OR.ING CAPITAL FINANCE
he need for working capital finance is over!emphasi'ed. Every business needs some
amount of working capital. he need for working capital arises due to the time gap between
production and reali'ation of cash from sales. here is an operating cycle involved in the sales
and reali'ation of cash. here are time gaps between purchase of raw materials " production,
production " sales and reali'ation of cash.
hus, working capital is needed for the following purposes.
+or the purpose of raw materials, components and spares.
o pay wages and salaries.
o incur day!to!day expenses and overhead costs such as fuel, power and office
expenses, etc.
o meet the selling costs as packing, advertising etc.
o provide credit facilities to the customers.
o maintain the inventories of raw materials, work in progress, stores
And spares and finished stock.
TYPES OF >OR.ING CAPITAL
Dermanent working capital
emporary working capital
(orking capital 4ross working capital
3et working capital
3egative working capital
VIMS GU P.G CENTRE, BELLARY Page ,5
ROLLING MILL
1eserve working capital
2? Pe#+anent 1o#:&n' "a0&tal)
&t means the minimum amount of investment in all current assets which is regarded at all
times to carry on minimum level of business activities. he operating cycle is a continuous
process and therefore, the need for current assets. /ut, the magnitude of current assets increases
and decreases over time. here is always a minimum level of current assets re$uired at all time
by the firm to carry on its business operations. his minimum level of current assets is known as
Dermanent working capital or fixed working capital.
3? Te+0o#a#- 1o#:&n' "a0&tal)
emporary working capital is also called as the fluctuating or variable working capital.
he amount of emporary working capital keeps on changing depending upon the changes in
production and sales.
4? G#oss 1o#:&n' "a0&tal)
&t is the amount of funds invested in the various components of current assets. &t refers to
the total current assets of the business. &t is also known as circulating capital, because the current
assets are rotating in their nature.
5? Net 1o#:&n' "a0&tal)
&t is the difference between current assets and current liabilities. &t is the excess of current
assets over current liabilities. his concept enables a firm to determine the exact amount
available at its disposal for operational re$uirements.
6? Ne'at&(e 1o#:&n' "a0&tal)
(hen a current liability exceeds current assets, it is called as negative working capital
emerges. -uch a situation occurs when a firm is nearing crisis of some magnitude.
ROLLING MILL
8? Rese#(e >o#:&n' Ca0&tal)
&t refers to the short term financial arrangement made by the business units to meet
uncertain changes or to meet uncertainties. /usiness firms are always exposed to risks which
may controllable or uncontrollable
NEED FOR MAINTENANCE OF ADE7UATE >OR.ING CAPITAL
An ade$uate or optimum working capital balance refers to the desired working capital
where a firm will not have excess or shortage of working capital and indicates both profitability
and li$uidity for the firm. &t is necessary to maintain an optimum cash balance, an optimum level
of inventory and an optimum level of debtors and receivable.
OPERATING CYCLE
%perating cycle indicates the length of time between firms paying for materials entering
into stock and receiving the cash from sale of finished goods. &n other words, the duration of the
re$uired time to complete the se$uence of events is called operating cycle. he operating cycle
may take the following se$uence)
2. In a Man%fa"t%#&n' Con"e#n
aJ ;onversion of cash into raw materials.
bJ ;onversion of raw materials into work in progress.
cJ ;onversion of work in progress into finished goods.
dJ ;onversion of finished goods into debtors.
he following figure shows the operating cycle of a manufacturing concern.
ROLLING MILL
3. In a T#a$&n' Con"e#n
aJ ;ash into inventories
bJ &nventories into debtors and bills receivables
cJ 6ebtors and bills receivables into cash
he following figure shows the operating cycle of a trading concern
VIMS GU P.G CENTRE, BELLARY Page ,,
ROLLING MILL
DANGERS OF E@CESS >OR.ING CAPITAL
&t results in unnecessary accumulation of inventory in the form of raw material or work in
progress or finished goods, leading to a high cost of storage, space, &nsurance, increased
theft, deterioration in the $uality of goods, etc.
Also, it is an indication of defective credit policy and slack collection period.
;onse$uently, higher incidence of bad debts adversely affects profits.
Excess cash in hand indicates idle cash and even though the li$uidity position of the
company is good, it lacks profitability.
Excessive working capital makes the management complacent, which degenerates into
managerial inefficiency.
Excess availability of cash tempts the executives to spend more.
FACTORS INFLUENCING >OR.ING CAPITAL
Nat%#e of b%s&ness
he working capital re$uirement of a firm basically depends upon the nature of its
business public utility undertakings like electricity, water supply and railways need very
little working capital because they offer cash sales only and supply services, not products
and such no funds are tied up in inventories and receivables. he manufacturing
undertakings also re$uire si'able working capital along with fixed investments because
they have also to build up inventories.
S&Ae of b%s&ness
he working capital re$uirements of a concern are directly influenced by the si'e of its
business, which may be measured in terms of scale of operations. 4reater the si'e of
business unit, generally, larger will be the re$uirements of working capital.
VIMS GU P.G CENTRE, BELLARY Page ,.
ROLLING MILL
<owever in some cases, even a smaller concern may need more working due to high
overhead charges, inefficient use of available resources and other economic disadvantages
of small si'e.
P#o$%"t&on "a0a"&t-
&n certain industries the demand is sub#ect to wide fluctuations due to seasonal
variations. he re$uirements of working capital in such cases depend on the production
policy.
Man%fa"t%#&n' 0#o"ess
&n manufacturing business the re$uirements of working capital increase in direct
proportion to length of manufacturing process. 0onger the process period of manufacture,
larger is the amount of working capital re$uired.
Seasonal (a#&at&ons
&n certain industries, raw material is not available through out the year. hey have to buy
raw materials in bulk during the season to ensure an uninterrupted flow and process them
during the entire year. A huge amount is, thus, blocked in the form of material inventories
during such season, which gives rise to more working capital re$uirements.
>o#:&n' "a0&tal "-"le
&n a manufacture concern, the working capital starts with the purchase of raw materials
and ends with the reali'ation of cash from the sale of finished products. he speed with
which the working capital completes one cycle determines the re$uirements of working
capital. 0onger the period of cycle, larger is the re$uirement of working capital.
Rate of sto": t%#n o(e#
here is a high degree of inverse correlation ship between the $uantum of working capital
and the velocity or speed with which the sales are affected. A firm having as high rate of
stock turnover will need lower amount of working capital as compared to a firm having a
low rate of turnover.
C#e$&t 0ol&"-
ROLLING MILL
he credit policy of a concern in its dealings with debtors and creditors influences
considerably the re$uirements of working capital. A concern that purchases its
re$uirements on credit sells its productsLservices on cash re$uires lesser amount of
working capital.
!%s&ness "-"le
/usiness cycle refers to alternate expansion and contraction in general business actively.
&n a period of boom i.e., when the business is prosperous, there is a need for larger
amount of working capital due to increase in sales, rise in prices, optimistic expansion of
business, etc. on the contrary, in the times of depression i.e., when there is a down swing
of the cycle, the business contracts, sales decline, difficulties are faced in collections from
debtors and firms may have a large amount of working capital lying idle.
Rate of '#o1t/ of b%s&ness
he working capital re$uirements of a concern increase with the growth and expansion of
its business activities.
Ea#n&n' "a0a"&t- an$ $&(&$en$ 0ol&"-
-ome firms have more earning capacity than others due to $uality of their products,
monopoly conditions, etc. such firms with high earning capacity may generate high cash
profits from operations and contribute to their working capital. he dividend policy of a
concern also influences the re$uirement of its working capital.
P#&"e le(el "/an'es
;hanges in the price level also affect the working capital re$uirements. 4enerally, the
rising prices will re$uire the firm to maintain larger amount of working capital, as more
funds will be re$uired to maintain the same current assets. he effect of rising prices will
be different for different firms. -ome firms may be affected much while some may not be
affected at all by the rise in prices.
Ot/e# fa"to#s
;ertain other factors such as operating efficiency, management ability, irregularities of
supply, import policy, asset structure, importance of labour, banking facilities, etc., also
influence the re$uirements of working capital.
VIMS GU P.G CENTRE, BELLARY Page ,:
ROLLING MILL
DANGERS OF INADE7UATE >OR.ING CAPITAL
he production process will be obstructed if there is shortage of working capital.
+ixed assets are not efficiently utili'ed if there is lot of working capital funds, which
leads to deterioration in profits.
he firm loses its reputation when it is not in a position to honor its short!term
obligations.
Hltimately it leads to the reduction in sale, as the firm cannot meet the demand of the
customers.
EFFECT OF INADE7UATE >OR.ING CAPITAL ON DECISION MA.ING)
-tagnates the growth of the firm,
hreatens the solvency of the firm,
;reates difficulties in implementing the operating plans,
1enders the firm unable to avail the attractive credit opportunities
EFFECTS OF E@CESS >OR.ING CAPITAL ON DECISION MA.ING
&mpairs firms profitability through idle cash and
*akes dividend policy liberal,
;reates difficulties to cope with the future, on the failure of the estimated speculative
profits.
IMPORTANCE OF >OR.ING CAPITAL
VIMS GU P.G CENTRE, BELLARY Page ,=
ROLLING MILL
Even though the skills for maintaining the working capital are somewhat uni$ue, the
goals are the same!vi'. to make an efficient use of funds for minimi'ing the risk of loss to attain
profit ob#ectives.
+irstly, the ade$uate of working capital contributes a lot in raising the credit!standing of a
corporation in terms of favorable rates of interest on bank loan, better terms on goods purchased,
reduced cost of production on account of the receipt of cash discounts, etc.
-econdly, a company with sufficient working capital is always in a position to take the
advantage of any favorable opportunity either to purchase raw materials or to execute a special
order or to wait for better market position.
&n the third place, the ability to meet all reasonable demands for cash without inordinate
delay is a great psychological factor to improve the all rounds efficiency of the business.
0astly, during slump the demand for working capital, instead of coming down, shoots up.
A good amount of working capital is locked up in the inventories and book debts. ;oncerns
having ample resources can tide over that period of depression.
hus, working capital is regarded as one of the conditioning factors in the long run
operations of the firm, which is often inclined to treat it as an issue of short run analysis and
decision making.
DETERMINANTS OF >OR.ING CAPITAL
6eterminants of (orking ;apital
VIMS GU P.G CENTRE, BELLARY Page ,@
ROLLING MILL
3ature of -i'e of *anufacturing Droduction Nolume of business
cycle policy sales

/usiness 4rowth and -upply of
;ycle Expansion 1aw *aterials
;redit Dolicies Drofit *argin Drofit
of 1/& Appropriation
Drice 0evel ;apital -tructure
;hanges of the ;ompany
SOURCES OF >OR.ING CAPITAL
-ources of (orking ;apital
VIMS GU P.G CENTRE, BELLARY Page ,>
%perating
efficiency
&ndustry erms of
purchase
s and
sales
ROLLING MILL

0ong erm +inancing -hort erm +inancing
&ssue of -hares -hort erm loans
0oans from +inancial &nstitution &ndigenous /anks
Accepting Dublic 6eposits ;ommercial Dapers
+loating of 6ebentures +actoring of 1eceive
1aising +unds by &nternal +inancing rade ;redit

VIMS GU P.G CENTRE, BELLARY Page .5
ROLLING MILL
CHAPTERV
DATA ANALYSIS AND
INTERPRETATION
ANALYSIS AND INTERPRETATION OF DATA
TA!LE B C2
TA!LE SHO>ING GROSS >OR.ING CAPITAL CHANGES OF
!ella#- Steel Roll&n' M&lls DRs &n CCCEs?

ROLLING MILL
CHART 2
CHART SHO>ING GROSS >OR.ING CAPITAL CHANGES OF
!ELLARY STEEL ROLLING MILLS
Pa#t&"%la#s 3CC=3C2C 3CC<3CC= 3CC;3CC< 3CC83CC; 3CC63CC8
C%##ent Assets
&nventories =,:,2,@ .77,@:. 22>,=2= 21=,>:1 12=,72>
-undry 6ebtors 1,@>7,=@, 1,7>@,:27 1,,=@,>2, 1,12:,,>5 @27,55@
;ash "/alance .@.,2,5 72.,=.> .1,,::@ 1,>,.,. 21=,==,
0oans advances ==2,122 7@5,7,= ,@=,,2> 27,,>:@ 2.1,.@@
4ross (orking
;apital
,,@@@,,=, ,,17>,==7 2,.5>,:.= 1,=,=,=7, 1,.11,=>@
ROLLING MILL
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
AMOUNTS
FINANCIAL YEAR
GROSS WORKING CAPITAL
DATA ANALYSIS
+rom he above chart the gross working capital has fluctuated on every year. &n the year
financial year 2557!5: the gross working capital was 12=72> in the year 255>!15 was =,:2,@
with the growth of the business over a series of years.
INTERPRETATION

he gross working capital has fluctuated with the growth of the business over a
series of years. Even the current assets of the company have been fluctuating along with the
prospects of the company which is a good sign for the company. here is an increase in the
current assets of the company which helps the company for smooth flow of day to day activities.

TA!LE BC3
TA!LE SHO>ING NET >OR.ING CAPITAL CHANGES OF
DRs &n CCCEs?
VIMS GU P.G CENTRE, BELLARY Page .,
ROLLING MILL
Pa#t&"%la#s 3CC=3C2C 3CC<3CC= 3CC;3CC< 3CC83CC; 3CC63CC8
G#oss >o#:&n'
Ca0&tal
4,<<<,4;4 4,26=,;;6 3,5C=,85; 2,;4;,;64 2,522,;=<
D? C%##ent L&ab&l&t&es 3,6<633< 3,242,565 2,;84,;88 2,666,36; 2,3;4,235
Net >o#:&n' Ca0&tal 2,4C4256 2,C3<,432 856,<<2 2<3,5=8 24<,8;5
CHART) C3
CHART SHO>ING NET >OR.ING CAPITAL CHANGES OF
VIMS GU P.G CENTRE, BELLARY Page ..
ROLLING MILL
0
200000
400000
600000
800000
1000000
1200000
1400000
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
AMOUNTS
FINANCIAL YEAR
NET WORKI NG CAPI TAL

DATA ANALYSIS
he net working capital table indicates that excess current asset is available at the
disposal of the company for the operational re$uirements.
INTERPRETATION

he net working capital table indicates excess current asset is available at the disposal of the
company for the operational re$uirements. /y looking into the above analysis we can make that
the company has increased its inventory, debtors and cash balance this indicates &mprovement in
net working capital position of the company.

TA!LE B C4
ROLLING MILL
TA!LE SHO>ING OPERATING CYCLE CALCULATION
DRs &n CCCEs?
-0
3%
DA1&;H0A1- 2557!255: 255:!255= 255=!255@ 255@!255> 255>!2515
C2 Ra1 +ate#&al
"on(e#s&on 0e#&o$
A ;ost of 1aw material
consumed per day
=@2..2> 152@>.=2 1.7.:.1, 1@5>=.>@ 2551@.2=
/ 1aw material
inventory
.@.,2=@ @7>,7,> 1,7:7,5.7 2,.2,,11: ,,557,@>=
;onversion Deriod :2 6ays @. 6ays 15@ 6ays 1,. 6ays 175 6ays
C3 >o#:&n0#o'#ess
"on(e#s&on 0e#&o$
A ;ost of production per
day
@.5@.1: 11=5..: 17,,=.:. 1>11>.,. 211@=.2,
/ (ork!in!progress
inventory
.7,.,= 7=,1>7 @5,>57 1:>,2@5 1@.,,25
(ork!in!progress
holding days
7 6ays 7 6ays 7 6ays > 6ays > 6ays
C4 F&n&s/e$ 'oo$s
"on(e#s&on 0e#&o$
A ;ost of goods sold per
day
77@.@2 =12.5. =1>.7 1521.,: 17,1.=2
/ +inished goods
inventory
,7,>@: =,,221 151,:,2 12.,21. 1:>,1>1
+inished goods
inventory holding days
:. 6ays 15, 6ays 1.1 6ays 122 6ays 115 6ays
C5 Debto#s Colle"t&on
0e#&o$
A ;redit -ales per day @===.5> 11=2>.12 1:>75 25>7@.:> 2.57,.2>
/ Average -undry =,1,,25 >=7,:>> 1,272,:7= 1,.=:,5,2 1,:=2,>=2
VIMS GU P.G CENTRE, BELLARY Page .:
ROLLING MILL
6ebtors
;ollection Deriod @, 6ays @, 6ays =. 6ays =1 6ays :> 6ays
C6 Pa-+ent $efe##al
0e#&o$
A Durchases per day :725.7: @1@5.21 152>@.7. 1252=.5@ 1,721.11
/ ;reditors ,..,2@@ .22,57. 7,@,2@= =5@,,=7 @21,,27
;redit holding days 7, 6ays 72 6ays 72 6ays 7> 6ays :5 6ays
Fo#+%lae %se$ to 'et t/e 0#o0e# $ata &n t/e abo(e table a#e as follo1s)
2. Ra1 +ate#&al A(e#a'e "ost of Ra1 +ate#&al
VIMS GU P.G CENTRE, BELLARY Page .=
ROLLING MILL
In(ento#- F
Cost of Ra1 +ate#&al "ons%+e$
3. >o#:&n0#o'#ess A(e#a'e "ost of 1o#:&n0#o'#ess
In(ento#- F
Cost of 0#o$%"t&on
4. F&n&s/e$ Goo$s Cost of F&n&s/e$ Goo$s
In(ento#- F
Cost of 'oo$s sol$
5. Debto#s Colle"t&on A(e#a'e S%n$#- Debto#s
Pe#&o$ F
C#e$&t Sales
6. C#e$&to#s Pa-+ent A(e#a'e S%n$#- C#e$&to#s
Pe#&o$ F
C#e$&t P%#"/ase
.TA!LE BC5
TA!LE SHO>ING SUMMARY OF OPERATING CYCLE CALCULATION OF
VIMS GU P.G CENTRE, BELLARY Page .@
ROLLING MILL
ANALYSIS OF OPERATING CYCLE CALCULATIONS
VIMS GU P.G CENTRE, BELLARY Page .>
3% DA1&;H0A1- 2557!255: 255:!255= 255=!255@ 255@!255> 255>!2515
51 &nventory conversion
period
A 1aw material :2 6ays @. 6ays 15@ 6ays 1,. 6ays 175 6ays
/ (ork!in!progress 7 6ays 7 6ays 7 6ays > 6ays > 6ays
; +inished goods :. 6ays 15, 6ays 1.1 6ays 122 6ays 115 6ays
52 1eceivable
conversion period
@, 6ays @, 6ays =. 6ays =1 6ays :> 6ays
5, 4ross %perating
;ycleG1S2J
21. 6ays 2=7 6ays ,2@ 6ays ,,: 6ays ,,@ 6ays
5. Dayment 6eferral
period
7, 6ays 72 6ays 72 6ays 7> 6ays :5 6ays
57 3et %perating
;ycleG,!.J
1:1 6ays 22, 6ays 2=: 6ays 2== 6ays 2=@ 6ays
ROLLING MILL
+rom the table number 57 the raw material inventory level in the year 2557!255: which
stood as 1s .@.,2=@, 255:!255= which stood as 1s @7>,7,>, 255=!255@ which stood as 1s
1,7:7,5.7 and 255@!255> which stood as 1s 2,.2,,11: and 255>!2515 which stood ,,557,@>=
indicating that the company has good production and does not have any uncertainty in supply of
raw materials. here has been an increase in the level of work in progress inventory and hence it
is a satisfactory level, also /ellary -teel 1olling *ills has maintained an increasing level of
finished goods inventory to meet the demand of the customers.
&n the case of 6ebtors collection period it has been decreased year by year. &n 2557!255:
collection period was @, 6ays, where as 255:!255= collection period was @, 6ays was constant
but in 255=!255@ collection period is decreased to =. 6ays and in 255@!255> collection period
was decreased to =1 6ays and 255>!2515 collection period was decreased to :> days it means is
not extending the credit facile /ellary -teel 1olling *ills. ties to the there valued customers.
he debtors collection period is decreasing, which is good sign from the companys
point of view. &t means the company is in position to collect its debts in time and is also
capable of managing its day today activities.
he companys creditors are increased to 1s @21,,27 in 255>!2515 en compare to last four years
shown in table. &n the view of the companys financial position is paying more interest to
reduced its creditors. A higher creditors ratio or 0ower credit period en#oyed ratio in
255@!5> and 255=!5@. his indicates creditors paid slowly
INTERPRETATION)

ROLLING MILL
According to the above table the operating cycle takes 2=@ days to convert raw materials
into cash in the year 255>!2515. he net operating cycle has increased over year by year i.e. in
2557!255: 1:1 days, 255:!255= has to increased to 22, days, in the year 255=!255@ has
increased to 2=: days, in the year255@!255> has increased to 2== days. 6ue to the following
reasons can be highlighted about these fluctuations.
&n the year 255>!2515 raw material holding days have increased by 1: days this is
because raw material consumption has increased to 1s =,,5:,::> and at the same time the level
of raw material inventory has increased to 1s ,,557@>=
%ne reason would be the policy of company, to reduce the inventory holding to bring the
cost down, but there is an increase in the work!in!progress holding days when compared to that
of the year 2555!2515, due to fluctuations of demand for the companys product in the market.
;ollection period is reduced so as to increase the cash inflows, where as the payment
deferral period is increased to :5 days in the year 255>!2515 when compared to 72 days in the
year 255:!255=, 72 days in 255=!255@, and 7> days in the year 255@!255>. his indicates that
the company has to take necessary steps to control disbursements for maximum availability of
cash.
ROLLING MILL
RATIO ANALYSIS
he ratio analysis is one of the most important and powerful tools of financial analysis. &t
is the process of establishing and interpreting various ratios. &t is with the help of ratios that the
ratios that the financial statement can be analy'ed more clearly and decisions made from such
analysis. 9.
CURRENT RATIO
;urrent ratio may be defined as the relationship between current assets and current
liabilities. he main ob#ective of is to measure the ability of the firm to meet its short term
financial soundness of the firm. his ratio is also known as working capital ratio. &t is computed
by dividing the total current assets by total current liabilities. he standard ratio is 2)1

Total C%##ent Assets
C%##ent #at&o F
Total C%##ent L&ab&l&t&es
;urrent assets include cash in hand, cash at bank, bills receivable, sundry debtors,
inventory, prepaid expenses, outstanding incomes temporary investments and advances. ;urrent
liabilities include bills payable, sundry creditors, bank overdraft, unclaimed dividend,
outstanding expenses, provision for taxation and proposed dividend etc.
ROLLING MILL
TA!LE BC6
TA!LE SHO>ING CURRENT RATIO

DRs &n CCCEs?
YEAR
CURRENT
ASSETS
CURRENT
LIA!ILITIES
CURRENT
RATIO
3CC63CC8 2,522,;=< 2,3<8,2C4 2.C=<
3CC83CC; 2,;4;,;64 2,6;8,6C; 2.2C3
3CC;3CC< 3,5C=,85; 2,<C6,3CC 2.446
3CC<3CC= 4,26=,;;6 3,325,;<6 2.53;
3CC=3C2C 4,<<<,4;4 42C<<<< 2.36C
ROLLING MILL
CHART C4
CHART SHO>ING CURRENT RATIO

0
1
2
3
4
5
6
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (IN TIMES)
FINANCIAL YEAR
CURRENT RATIO
DATA ANALYSIS
he above table shows the current ratio for the five fiscal years. ;omparing with the
corresponding years in 255@!255> there is slight improvement in the current ratio but again slight
decrease in the year 255>!2515. he analysis shows that the company has a li$uidity position is
not satisfactory.
INTERPRETATION)
4enerally current ratio of 2)1 is considered ideal for a concern.
hrough this analysis we can make out that the ratio is less than 2, difficulty may be experienced
in the payment of current liabilities " day!to!day operations of business may suffer
ROLLING MILL
7UIC. RATIO
Puick ratio reveals the relationship between $uick assets and current liabilities. &t is also
known as li$uid ratio or acid test ratio. he main ob#ective of computing this ratio is to measure
the ability of the company to meet its short term obligations as and when due, without relying
upon the reali'ation of stock. Puick assets include all current assets except inventory and prepaid
expenses. ;urrent liabilities include all current liabilities except bank overdraft.

7%&": Assets
7%&": #at&o F
C%##ent l&ab&l&t&es
TA!LE BC8
TA!LE SHO>ING THE 7UIC. RATIO
DRs &n CCCEs?
YEAR 7UIC. ASSETS
CURRENT
LIA!ILITIES
7UIC. RATIO
3CC63CC8 2,3<5,38= 2,3<8,2C4 2.CC
3CC83CC; 2,62=,;=3 2,6;8,6C; C.=8
3CC;3CC< 3,2;=,=3C 2,<C6,3CC 2.32
3CC<3CC= 3,;C4,=22 3,325,;<6 2.33
3CC=3C2C 4,263,246 4,2C<,<<< 2.C2
ROLLING MILL
CHARTC5
CHART SHO>ING THE 7UIC. RATIO

0
0.2
0.4
0.6
0.8
1
1.2
1.4
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (IN TIMES)
FINANCIAL YEAR
QUICKRATIO
ANALYSIS
he able shows that the Puick ratio is decreased to 1.51 in the year 255>!2515 when compared
to the previous years. his further confirms that there are fluctuations in the short!term li$uidity
of the company. -o above analysis shows that /-1* li$uidity position is not satisfactory but
trying to meet the standard i.e 1)1.
INTERPRETATION)
+or 255:!255> the company is showing increased ratio and later on in the year 255>!2515 it is
showing lightly decreased ratio of 1.51
he companys $uick ratio though not satisfactory but it is trying to maintain standard.
ROLLING MILL
INVENTORY TURNOVER RATIO
&nventory turnover ratio is the ratio, which indicates the number of times the stock is
turned over i.e., sold during the year. &n other words, it is the ratio between the cost of goods sold
and average stock. his ratio can be calculated as follows.
Sales
In(ento#- T%#no(e# Rat&o F
A(e#a'e In(ento#-
TA!LE B C;
TA!LE SHO>ING INVENTORY TURNOVER RATIO
DRs &n CCCEs?
Yea# Sales A(e#a'e Sto":
In(ento#- T%#n O(e#
Rat&o
3CC63CC8 5,3<2,23; 23;,23= 36.3C
3CC83CC; 4,3C4,84; 28<,;;8 36.4;
3CC;3CC< 8,2<8,;22 334,<55 3;.85
3CC<3CC= ;,85=,=32 453,;=8 33.43
3CC=3CC2C =,83=,4C2 <4=,663 22.58
ROLLING MILL
CHART C6
CHART SHO>ING INVENTORY TURNOVER RATIO
0
5
10
15
20
25
30
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (INTIMES)
FINANCIAL YEAR
INVENTORY TURNOVERRATIO
DATA ANALYSIS
he able and figure shows that the KE; has very low turnover ratio. &t was 27.25 in the
year 2557!5: and there was a slight improvement and it increased to 27.,= in the year 255:!5=
and in 255=!5@ was 2=.:. and in year 255@!5> was 22.,2 and it decreased to 11..: in the year
255>!2515.
INTERPRETATION)
<igher the inventory turnover ratio the better is the position of the company in the above case in
the year 255=!255@ the inventory turnover ratio was very good but it was gradually reduced from
the year 255@!2515 the inventory turnover position of the company has decreased, its not a good
indication of the company.
ROLLING MILL
DE!TORS TURNOVER RATIO
6ebtors urnover 1atio is to establish the relationship between credit sales and trade
debtors. &n other words, it indicates the velocity of debts collection of the firm in a year. his
ratio is calculated as follows.
C#e$&t Sales
Debto#s T%#no(e# Rat&o F
Debto#s
TA!LE B C<
TA!LE SHO>ING DE!TORS TURNOVER RATIO
DRs &n CCCEs?
Yea# Sales Debto#s
Debto#s T%#n O(e#
Rat&o
3CC63CC8 4,3C4,84; ;42,43C 5.4< t&+es
3CC83CC; 5,3<2,23; =;6,8== 5.4= t&+es
3CC;3CC< 8,2<8,;22 2,363,86; 5.=5 t&+es
3CC<3CC= ;,85=,=32 2,5;8,C43 6.2< t&+es
3CC=3C2C =,83=,4C2 2,<=6,;<4 6.C; t&+es
ROLLING MILL
CHARTC8
CHART SHO>ING DE!TORS TURNOVER RATIO
0
2
4
6
8
10
12
14
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (IN TIMES)
FINANCIAL YEAR
DEBTORSTURNOVERRATIO
DATA ANALYSIS
+rom the table and figure it is clear that debtor turnover ratio increasing over the years. &t was
..,@ times in the year 2557!5: it increased to ..,> times and ..>. times and 7.1@ in the year
255:!5= and 255=!5@ and 255@!255> respectively. &t again slight decrease in the year 255>!2515
to 7.5=. Analysis shows that credit allowed period is increasing over by year.
INTERPRETATION)
he analysis of debtors turnover ratio supplements the information regarding the li$uidity of
one item of current asset of the firm. he ratio measures rapidly receivables are collected. A high
ratio is indicative of shorter time B lag between credit sales and collection. A lower ratio shows
that debits are not being collected rapidly. he above analysis states that the debtors turnover
ratio was very good in the year 255@!255> but in the year 255>!2515 it has been slightly
decreased this shows that their ability to collect the debt has been slightly decreased
&t shows inefficiency of credit management of the company.
VIMS GU P.G CENTRE, BELLARY Page :5
ROLLING MILL
CREDITORS TURNOVER RATIO
;reditors urnover 1atio is used to establish relationship between credit purchase and
average trade creditors. he ob#ective of calculating this ratio is to determine the efficiency with
which the creditors are managed. his ratio is calculated as follows
C#e$&t 0%#"/ase
C#e$&to#sT%#no(e# Rat&o F
A(e#a'e "#e$&to#s
TA!LE B C=
TA!LE SHO>ING CREDITORS TURNOVER RATIO
DRs &n CCCEs?
Yea# PURCHASES CREDITORS
CREDITORS
TURNOVER RATIO
3CC63CC8 3,4<C,CC4 455,3<< 8.=2 t&+es
3CC83CC; 3,=<6,;;6 533,C65 ;.C; t&+es
3CC;3CC< 4,;6<,=8< 64<,3<; 8.=< t&+es
3CC<3CC= 5,4<=,<<8 ;C<,4;6 8.3C t&+es
3CC=3C2C 8,58<,435 <22,342 ;.=; t&+es
ROLLING MILL
CHART C;
CHART SHO>ING CREDITORS TURNOVER RATIO
0
2
4
6
8
10
12
14
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (IN TIMES)
FINANCIAL YEAR
CREDITORSTURNOVERRATIO
DATA ANALYSIS
he ratio indicates the rates at which the payments are made to creditors i.e. the number
of times payments are made to creditors. <ere the ratios are in 255:!5= is =.5= times that is
higher and in 255=!5@ is :.>@ times which have further decreased to :.25 times in 255@!5>,we
can again increase in the year 255>!2515 to =.>=. 0ower the ratios indicate creditors are not paid
in time. <ere the condition is good. hey have enough periods for payments. ;reditors and
6ebtors are interrelated. ;ompany is giving credit to debtors according to the credit got by their
creditors.
INTERPRETATION)
he lower the creditor turnover ratio the better is the position of the company. he above
analysis indicates that the ;%1 was satisfactory in the years 255=!255> but it has slightly
ROLLING MILL
increased in the year 255>!2515 which is not a good sign for the company. <igh ratio indicates
that the business in not taking full advantages of credit period allows by creditors.
>OR.ING CAPITAL TURNOVER RATIO
(orking ;apital urnover 1atio expresses the relationship between the working capital
and sales. he ratio indicates how effectively a company is utili'ing its working capital. &t
indicates the velocity of the utili'ation of net working capital.
Sales
>o#:&n' "a0&tal t%#no(e# #at&o F
Net >o#:&n' "a0&tal
TA!LE B2C
TA!LE SHO>ING >OR.ING CAPITAL TURNOVER RATIO
DRs &n CCCEs?
Yea# Sales
Net >o#:&n'
Ca0&tal
>o#:&n' Ca0&tal
T%#n O(e# Rat&o
3CC63CC8 4,3C4,84; 24<,8;5 34.2C t&+es
3CC83CC; 5,3<2,23; 2<3,5=8 34.58 t&+es
3CC;3CC< 8,2<8,;22 856,<<2 =.6< t&+es
3CC<3CC= ;,85=,=32 2,C3<,432 ;.55 t&+es
VIMS GU P.G CENTRE, BELLARY Page :,
ROLLING MILL
3CC=3C2C =,83=,4C2 2,4C4,256 ;.4< t&+es

CHART<
CHART SHO>ING >OR.ING CAPITAL TURNOVER RATIO
WCTR, 7.38
0
5
10
15
20
25
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (IN TIMES)
FINANCAL YEAR
WORKING CAPITAL TURNOVERRATIO
DATA ANALYSIS
A higher ratio indicates efficient utili'ation of working capital and lower ratio indicates
otherwise. <ere in table, it is shown that the year 2557!5: the ratio is 2,.15 times which has
increased to 2,..: times in 255:!5= and further it has decreased to >.7@ times, =... times and
=.,@ times in 255=!5@, 255@!5> and 255>!2515 respectively. -ince net working capital has high
variations over the period which shows the inefficient utili'ation of working capital of the
company. hough the company is a big manufacturing unit, they are producing the goods to the
VIMS GU P.G CENTRE, BELLARY Page :.
ROLLING MILL
institutions rather than individuals. he company is more concentrating on export market and
bulk sales
INTERPRETATION)
+rom the above analysis it can be determined that from the year 2557!255= the position was
good and satisfactory but from the year 255=!15 it has been gradually decreased this is not a
good sign for the company. &t indicates that working capital is not efficiently utili'ed.
CASH TURNOVER RATIO
he cash turnover ratio is the ratio between cash and sales. ;ash for this purpose,
means cash in hand, cash at bank and readily reali'able investment or securities. his ratio
indicates the extent to which the company efficiently utili'es cash resources. &t is also helpful in
determining the li$uidity of the company.
Net Ann%al Sales
Cas/ T%#no(e# Rat&o F
Cas/
TA!LE B 22
TA!LE SHO>ING CASH TURNOVER RATIO
DRs &n CCCEs?
Yea# Sales Cas/ Cas/ T%#n O(e# Rat&o
3CC63CC8 4,3C4,84; 32;,;;4 25.;2
ROLLING MILL
3CC83CC; 5,3<2,23; 24=,545 4C.;C
3CC;3CC< 8,2<8,;22 524,88< 25.=8
3CC<3CC= ;,85=,=32 635,;5= 25.6<
3CC=3C2C =,83=,4C2 5<5,34C 2=.<=
CHART =
CHART SHO>ING CASH TURNOVER RATIO
0
5
10
15
20
25
30
35
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (IN TIMES)
FINANCIAL YEAR
CASH TURNOVERRATIO
DATA ANALYSIS
he standard cash turnover ratio is 15)1. A cash turnover ratio of 15)1 or more indicates the
effective utili'ation of cash resource of the company. +or the past five fiscal years, as shown in
the table shows the ratios are more than the standard ratio and the ratios are increasing at very
high rate. &n the year 2557!5: the ratio was 1..=1A and the ratio was sudden increase from
1..=1A to ,5.=5A in the year 255:!5= and later it decreased to 1..>:A and 1..7@A in the year
255=!5@ " 255@!5> respectively and again increased to 1>.@> in the year 255>!2515.
VIMS GU P.G CENTRE, BELLARY Page ::
ROLLING MILL
INTERPRETATION)
higher the cash turnover ratio of the company higher the li$uidity position of the company in
the above case there was a declining trend from 255=!255> but there was a increasing trend in
the year 255>!2515 which shows a good sign for the company for maintaining li$uidity position.
FI@ED ASSETS TURNOVER RATIO
he ratio, which expresses the relationship between the sales and total assets, is known as
fixed assets turnover ratio.
Sales
F&Ge$ assets t%#no(e# #at&o F
F&Ge$ Asset
TA!LE B23
TA!LE SHO>ING FI@ED ASSETS TURNOVER RATIO

DRs &n CCCEs?
YEAR SALES FI@ED ASSETS RATIO
3CC63CC8 4,3C4,84; 2<8,243 2;.32
3CC83CC; 5,3<2,23; 2;3,3;8 35.<6
3CC;3CC< 8,2<8,;22 238,2;< 5=.C4
3CC<3CC= ;,85=,=32 284,=28 58.8;
3CC=3C2C =,83=,4C2 2,8=;,536 6.8;
VIMS GU P.G CENTRE, BELLARY Page :=
ROLLING MILL
CHART2C
CHART SHO>ING FI@ED ASSETS TURNOVER RATIO
0
5
10
15
20
25
30
35
40
45
50
RATIO (IN TIMES)
FINANCIAL YEAR
FIXED ASSET TURNOVERRATIO
DATA ANALYSIS)
he standard norm is 7 times. &n all the five fiscal years there is more than 7 times. &t
indicates inefficient utili'ation of fixed asset. +ixed assets turnover ratio has increased to 1=.21
to 2..@7 in the year 2557!5: when compared to 255:!5= and there be gradual increase from
VIMS GU P.G CENTRE, BELLARY Page :@
ROLLING MILL
2..@7 to .>.5, in the year 255:!5= when compared to 255=!5@. &n the year 255@!5> it has
decreased to .:.:= from .>.5, in the year 255=!5@ and again increased to 7.:= in the year 255>!
15.
INTERPRETATION)
he higher is the ratio, the better is the performance.
&n the above analysis shows that sudden decrease in the ratio it indicates that fixed assets are not
being efficiently utili'ed
CURRENT ASSETS TURNOVER RATIO
;urrent assets turnover ratio is computed by dividing net sales by current assets. he
ratio indicates the extent to which the investment in current assets as contributed towards sales.
hus it helps the firm to know its efficiency of utili'ing current assets. &f the ratio is high then it
indicates the firm is in good position. &t shows the over or under trading position is relation to the
$uantum of working capital.
he ;urrent Asset urnover ratio is calculated as follows)
Sales
C%##ent asset t%#no(e# #at&o F
C%##ent assets
TA!LE B 24
TA!LE SHO>ING CURRENT ASSET TURNOVER RATIO

DRs &n CCCEs?
YEAR SALES CURRENT ASSETS RATIO
3CC63CC8 4,3C4,84; 2,522,;=< 3.38
3CC83CC; 5,3<2,23; 2,;4;,;64 3.58
3CC;3CC< 8,2<8,;22 3,5C=,85; 3.68
3CC<3CC= ;,85=,=32 4,26=,;;6 3.53
VIMS GU P.G CENTRE, BELLARY Page :>
ROLLING MILL
3CC=3C2C =,83=,4C2 4,<<<,4;4 3.5;
CHART22
CHART SHO>ING CURRENT ASSET TURNOVER RATIO
2.1
2.2
2.3
2.4
2.5
2.6
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
RATIO (IN TIMES)
FINANCIAL YEAR
curre! "##e! !ur$%er r"!&$
DATA ANALYSIS)
here is increase in current assets ratio in all the five years even though the ratio is less
than 1 from past four years which shows management has not better utili'ed the current assets.
/ut in the current year 255@!5> it had been better utili'ed its current assets towards making sales
of the company. here is a slight improving in utili'ing the current assets from year to year.
VIMS GU P.G CENTRE, BELLARY Page =5
ROLLING MILL
INTERPRETATION)
&t measures the efficiency of a firm in managing and utili'ing its assets the higher the turnover
ratio the more is the management and utili'ation of the assets and vice versa. &n this case the
current asset turnover ratio is gradually increasing from the year 2557!5@ but from the year
255@!15 the position is fluctuating which shows that the current asset turnover position is good.
ROLLING MILL
CHAPTERVI
FINDINGS, SUGGESTIONS AND
CONCLUSION
SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION
FINDINGS)
he study of working capital management at /ellary -teel 1olling *ills .reveals the following
findings.
4ross Drofit has increased. his is due to increase in selling price of the company as
compared to sales and there is lower cost of production.
here is constant control over the companies operating cost or overheads which shows
the operational efficiency of the company. (hich gives fair return on investmentT
6ebtors turnover ratio is high and debtors collection period has decreased. his
indicates the collections are made promptly.
;reditors turnover ratio is moderate and the credit payment period is also $uite normal.
ROLLING MILL
(hen we look at the working capital turnover ratio, working capital has been effectively
utili'ed in making sales i.e. year by year.
he increase in debtors turnover ratio shows company follows a sound credit policy.
he company is in a position to collect its debts in time and is also capable of managing
its day today activities.
he inventory turnover ratio is increasing over the past few years indicating the
companys sound inventory policy it indicates that companys inventory is moving
$uickly.
;urrent assets and ;urrent liabilities are increasing.
SUGGESTIONS)
%n the basis of performance evaluation of /ellary -teel 1olling *ills through working
capital analysis for a period of five!years from 255: to 2515 the following are the
recommendations.
he company has to increase its current assets and $uick assets ade$uately.
he company has to reduce its debtors collection period to ,5 days.
he company should increase its investment in working capital from sales so that they
can meet the current liabilities in future
VIMS GU P.G CENTRE, BELLARY Page =,
ROLLING MILL
;ompany has to take corrective steps towards proper usage of short term assets for
making sales.
he ;urrent 1atio and li$uidity 1atios are below the standard ratio i.e. 2)1.
he operating cycle period has been decreased so that working capital re$uirement
should be less and in turn it is improving li$uidity position of firm.
he profit of the company can be maximi'ed by reducing operating expenses.
he company should maintain stable rate of current ratio.
6ebtor turnover ratio of the company is satisfactory so the companies receivable
management is good. /ut in this respect too company has to take care not to follow
excessively stringent credit policies as it may lead to lower sales.
(orking capital turnover ratio has increased. his is due to considerable increase in
sales, however working capital is concerned so the company should put more effort to
increase the sales and continue the same.
he concern should make necessary arrangement to increase cash balance so as to
provide sufficient coverage to Puick liabilities.
CONCLUSION
o ensure li$uidity position of the firm it must have sufficient funds. A large amount of working
capital would mean that the firm has idle funds, lower the amount of working capital, higher
would be the amount of risk. o ward off both risks of ill!li$uidity and excess li$uidity, the firm
should maintain an optimum level of current assets. An ade$uate working capital re$uired for
smooth running of the firm. (orking capital usually concerns with administration of all current
assets and current liabilities.
VIMS GU P.G CENTRE, BELLARY Page =.
ROLLING MILL
he ;ompany is expanding day by day to meet the challenges of competitions in the
market. hus, with a good infrastructure and efficient human forces the company is moving
towards the success rapidly.
he overall working capital of the company is good but they have to take care about the
each components of working capital which plays vital role in managing day!to!day activities of
the company. As /ellary -teel 1olling *ills, is a manufacturing company there is no hard and
fast rule to maintain the standard norms as other companies are following. he practical analysis
is different from the theoretical explanations so we have calculated what we got from the
company.
A study of working capital management shows that the net working capital re$uirement
has come down and also there is a significant improvement in collections due to a rigid credit
policy adopted by the company. &n conclusion, it is efficient in managing capital of the company.
A still better efficient planning of the working capital management can raise more profits
for the company taking it to the heights of prosperity, which make to reduce the companies
working capital.
he basic ob#ective of working capital management is to have a balanced li$uidity
position. he company has a positive net working capital during all the years of its operation.
his indicates the companys good li$uidity position. his is also made clear by the current
assets ratio, which is greater than one all the years. &t means that the investment in current assets
is more sufficient to meet its obligations

ROLLING MILL

ANNEXTURE
!ALANCE SHEET FOR THE PAST 6 YEARS
DRs &n CCCEs?
DA1&;H0A1- -;<E6H0E
2557!
255:
255:!
255=
255=!
255@
255@!
255>
255>!
2515
SOURCES OF FUNDS
SHAREHOLDERHS FUNDS
aJ ;apital A .,2,:@@ .,2,:@@ .>2,:@@ .72,:@@ =.2,@@:
VIMS GU P.G CENTRE, BELLARY Page =:
ROLLING MILL
bJ 1eserves " surplus ! :=7,7.1 :=7,7.1 :=7,7.1 =>>,@1@ >1:,>51
LOAN FUNDS
aJ secured loans 251,551 1=:,5=, 2..,2>. ,,2,,>, 1,1=,,,:@
bJ unsecured loans 2,125 1=,751 =2,5.> 15@,=7> 2>.,:,@

TOTAL
APPLICATION OF FUNDS
FI@ED ASSETS
aJ 3et block E 12=,.:: 11@,>.> 117,@71 1,,,1=1 1,:5.,2.>
bJ ;apital work in progress 7@,::: 7,,,2= 15,,2= ,5,=.7 >,,1=:
INVESTMENTS F 777,>71 :55,5:@ 7@.,=72 7@.,=72 :75,@@7
CURRENT ASSETS, LOANS 9
ADVANCES G
aJ &nventories 12=,72> 21=,>1: 22>,=2= .77,@:. =,:,2,@
bJ -undry 6ebtors @27,55@ 1,12:,,>5 1,,=@,>2, 1,7>@,:27 1,@>7,=,@
cJ ;ash " /ank /alances 21=,==, 1,>,.,. .1,,::@ 72.,=.> .@.,2,5
dJ 0oans " Advances 2.1,.@@ 27,,>:@ ,@=,,2> 7@5,7,= ==2,122
LESS)CURRENT
LIA!ILITIES9PROVISIONS H
aJ ;urrent liabilities
1,2=,,12
.
1,777,27
=
1,=:,,=:
:
2,1,1,.7
.
2,7@7,2@
@
bJ Drovisions 12,>=> 21,275 .1,.,. @,,,,1 72,,::5
VIMS GU P.G CENTRE, BELLARY Page ==
ROLLING MILL
NET CURRENT ASSETS 127,:>7 1:1,2.: :5.,..= >..,>>5 ==>,.@7
MISCELLANEOUS
E@PENDITURE TO THE
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Working Capital Management

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