CHPTER-I

INTRODUCTION
Every business needs funds for two purposes for its establishment and to
carry out its day to day operation long term funds are required to create
production facilities through purchase of fixed assets such as plant & machinery,
land & building furniture, etc these funds are known as fixed capital. Funds are
known as fixed capital. Funds are required for short term purpose for the purchases
of raw material payment of wages, and other day to day expenses etc. are known as
working capital. In simple word, working capital refers to that part affirms capital
which is required for financing short term or current assets such as cash,
marketable securities, debtors and inventories. The term current assets refer to
those assets which in the ordinary course of business can be converted into cash
without one year without losing in value and without disrupting The operations of
the firm.
Objectives of the study:-
 To assess the position of the working capital of Mahindra & Mahindra Ltd.
 To study the Management of funded by Mahindra & Mahindra Ltd.
 To analyze and interpret related data
 To evaluate the inflow and outflow of funds
 To assess whether working capital. Is adequately maintained or not
 To concluded and suggest remedial measures to be taken by Mahindra
& Mahindra.
 CHAPTER- II
WORKING CAPITAL CONCEPT
2.1 Concept of working capital:-
For studying the need of working capital in a business, one has to study the
business under varying.
Circumstances such as a new concern, as a growing concern and as one which
has attained maturity. A new concur requires a lot of liquid funds to meet initial
expenses like promotion, formation, etc. these expense are called preliminary
expense and are capitalized. The amount needed as working capital in a new
concern depends primarily upon its size and the ambitions of its promoters Greater
the size of the business unit, generally, larger will be the requirements of working
capital. The amount of working capital needed goes on increasing with the growth
the expansion of business till it attains maturity. At maturity the amount of working
capital needed is called normal working capital.
There are two concept of working capital:-
A. Balance sheet concept
B. Operating cycle or circular flow concept.
A.Balance sheet concept:-
There are two interpolations of working capital under the balance sheet
concept:
i. Gross Working Capital
ii. Net working capital
In the broad sense the term working capital refers to the gross working
capital and represents the amount of funds invested in current assists. Thus the
gross working capital is the capital invested in total current assists of the
enterprises. Current assists are those assists which in the ordinary course .
CONSTITUENTS OF CURRENT ASSESTS.
1. Cash in hand and bank balances
2. Bills Receivables
3. Sundry Debtors (Less Provision for bad debts)
4. Short term loans and advances
5. Inventories of stocks , as:
A. Raw Materials
B. Work-in- Process
C. Stores and spares
D. Finished goods

6.Temporary investments of surplus funds

7.Prepaid expenses.
8.Accrued In comes.

In a narrow sense the term working capital refers to the net working Capital,
Net working capital is the excess of current assets over current liabilities, or says:
Net working Capital = Current assets-Current liabilities(Net working capital may b
positive or negative). When the current assets exceed the current liabilities the
working capital is positive and the negative working capital results when the
current liabilities 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 assets or the
income of the business examples of current liabilities are:
 CONSTITUENTS OF CURRENT LIABILITIES
1. Bills payables
2. Sundry creditors or accounts payable
3. Accrued or outstanding expenses
4. Short term loans, advances and deposits.
5. Dividends payable.
6. Bank Overdraft
7. Provision for Taxation, If it does not amount to appropriation of profits.

The gross Working capital concept is financial or going concern concept

whereas networking capital is an accounting concept of working capital these
two concept of working capital are not exclusive rather both have their own
merits. The gross concept is sometime preferred to the net concept of working
capital for the following reasons:
1) It enables the enterprise to provide the correct amount of working capital at the
right time.
2) Every management is more interested in the total current assets which it has to
operate than the sources from where it is made available.
The net working capital concept, however, is also important for the following
reasons:
1. It is a qualitative concept which indicates the firm’s ability to meet its
operating expenses and short term liabilities.
2. It is an indicator of the financial soundness of enterprises.
 2.3 How its calculated?
Methods of estimating working capital requirement:-
The following methods are usually followed in forecasting working capital
requirement of a firm:
A. Percentage of sales method
B. Regression analysis methods
C. Cash forecasting methods
D. Operating cycle methods
E. Projected balance sheet method

A. PERCENTAGE OF SALES METHODS

This method of estimating working capital requirement is based on the
assumption that the level of working capital for any firm is directly related to its
sales value, if past experienced indicate a stable relationship between the amount of
sales and working capital, then this basis may be used to determine the
requirements of working capital for the future period. Thus If sales for the year
2007 amounted to Rs-30,00,000 and working capital required was Rs. 6,00,000; the
requirement of working capital for the year 2008 on an estimated sales of Rs.
40,00,000 shall be Rs. 8,00,000; i.e. 20% of Rs. 40,00,000. The individual items of
current assets and current liabilities can also be estimated on the basis of the past
experience as a percentage of sales. This method is simply to understand and easy
to operate but it cannot be applied in all cases because the direct relationship
between sales and working capital may not be established.
B.REGRESSION ANALYSIS METHODS
This method of forecasting working capital requirements is based upon the
statistical technique Estimating of predicting the unknown value of a dependent
variable from the known value of an independent variable. It is the major of the
average relationship between two or more variables, i.e. sales and working capital,
in terms of the original units of the data.
The relationship between sales and working capital is represented by the
equation :
Y=a+bx

Where Y= Working capital

a=Intercept of the least square
b= Slope of the regression line
X= Sales

C.CASH FORECASTING METHOD

This method of estimating working capital requirements involves forecasting
of cash receipts and disbursement during a future period of time. Cash forecast will
include all possible sources from which cash will received at the channels in which
payments are to be made so that a consolidated cash position is determined. This
method is similar to the preparation of cash budget. The excess of receipts over
payment represents surplus of cash and the assets of payment over receipts causes
deficit of cash or the amount working capital required.
D.OPERATING CYCLE METHOD
This method of estimating working capital requirements is based upon
the operating cycle concept of working capital. We have discussed earlier. The
speed /time duration require to complete one cycle determine the requirements of
working capital- longer the period of cycle, larger is the requirement of working
capital and vice-versa.

E.PROJECTED BALANCE SHEET METHOD

Under this method, projected balance sheet for future data is prepared
by forecasting of asset and liabilities by following any of the methods states above.
The excess of estimated total current assets over estimated current liabilities, as
shown in the projected balance sheet, is computed to indicate the estimated amount
of Working capital required.
 CHAPTER-III

METHODOLOGY
3.1-Sources of Data:-
Here for our working capital analysis purpose we have collected any the
secondary data given in the annual report as regard to the profit & loss A/c &
balance sheet.
It is not possible to collect the primary data due to consent of time. So all the
analysis are as secondary data.
3.2 Scope of the study:-
Different firms have different kinds of sources of funds. The scope of the study
comes out to evaluating ones knowledge by analyzing how an organization like
Mahindra & Mahindra with its limited resources is carrying out its daily activities.
It is only possible though an efficient fund management along with sound
working capital management.
3.3 Tools And Techniques of working capital:-
Liquid Ratio:-
The liquid ratio measures abilities of a firm to meet its short-term obligations
and reflect the short-term financial strength or solvency of a firm. The ratio which
indicate the liquidity of firms are
i. working capital or current ratio
ii. Acid test or quick ratio
iii. Absolute liquid ratio
i.Current ratio:-
It is the relationship between current assents current liabilities this ratio is
helpful in determining whether the current liability can be discharged by the
company is due time or not. It is otherwise known as working capital. The liquidity
position of the company is satisfactory, it the ratio is 2.11.
Current ratio = Current asset/current liabilities.
ii.Acid test or quick ratio:-
This ratio indicates about internal strength of the company to meet the
current liabilities not taking into account inventory. If ratio is 1:1 the company’s
potion is good in meeting short term liabilities.
Liquid ratio + liquid asset/ current liabilities.
Liquid assets= current assets.
(Inventories prepaid expenses).
iii.Absolute liquid ratio:-
This ratio indicates how fast the business is able to meet out side liabilities. If
the ratio is 0.5 the position would be food Absolute liquid ratio=absolute liquid
assets/current liabilities.
Absolute liquid ratio= cash + bank short term marketable.
Securities +Temporary Investment.
Current asset movement ratio:-
It is otherwise known as efficiency ratio or activity ratio. This ratio is
calculated to measure the efficiency on effectiveness with which a firm mange its
resources or assets. For this purpose following may be taken in consideration.
(a).Inventory turn over ratio:-
It is otherwise known as stock velocity. This ratio indicates whether stock has been
converted into sales effectively. Greater the ratio better the result. Inventory
turnover ratio = cost of good sold/Average inventor.
Where cost of good sold = sales gross profit.
Gross Profit = % on net sales.
Avg. inventory = (op, stock +C/o ,stock).
(b).Debtor turnover ratio:-
It is otherwise known as receivable turnover ratio or debtors velocity it refers
to the velocity of debt collection of firm.
Debtor turnover ratio= net credit annual sales/Avg. trade debtors.
Where net credit annual sale= total sales- (cash sales return inwards) Avg.
Trade debtor= (op, debtor +C/o-Debtor)/2.
Trade debtor = Sundry debtor + bills receivables+ account receivables.
Days/365/Debtor turnover ratio.
(C).Creditors turnover ratio:-
It is otherwise known as payable turnover ratio or creditors velocity. This ratio
indicates the velocity with which how many times of porches stand to pay and
remain as liabilities.
Creditor’s turnover ratio:-net credit purchase /Avg. trade creditor.
Where net credit annual purchase total purchase – (cash purchase + return out
word).
Trade creditor = sundry creditor + bills receivables + accounts pay able.
Avg. payment period no working days /365 /creditor turnover.
(d).working capital turnover ratio:-
The difference between current assets and liabilities are known a working
capital. Working capital directly related to sales. But working capital turnover
ratio indicates the velocity of the utilization of net working capital. There fore the
relation measures the efficiency being used by the firm.
Working capital turnover ratio= cast of sales/ Avg. working capital
Where working capital = current assets –current liabilities
Avg. working capital =(op. working capital +c /od. Working capital)
 CHAPTER-IV
COMPANY PROFILE
4.1 Origin & history of M & M Ltd.
In early 2008 Mahindra commenced its first overseas CKD operation with the
lunch of the Mahindra Scorpio in Egypt, in partnership with the Bavarian Auto
Group. This was soon followed by assembly facilities in Brazil vehicles assembled at
the plant in Bramante, Manaus, include Scorpio pick UPS in single and double cab
pick-up body styles as well as SUVS.
The US based Reputation Institute recently ranked Mahindra among the top
10 Indian companies in its Global 200: The world’s best corporate Reputation’s list.

Mahindra is currently preparing to sell the diesel SUVS and pickup trucks
starting in February 2011 in North America, through an independent distributor,
Global vehicles USA, based in Alpharetta, Georgia, Mahindra has announced it will
import pickup trucks from India in knockdown kit (CKD) form to circumvent the
chicken tax. CKDS are complete vehicles that will be assembled in the U.S from kits
of parts shipped in crates.

Tech Mahindra ltd. (Techs) formerly known as Mahindra British telecom

(MBT) is a Information Technology service provider company headquartering
Pune, India. It is a joint venture between Mahindra & Mahindra Limited (M & M )
and British telecommunications plc (BT), UK with M & M (Mahindra &
Mahindra)Holding 44% BT holding of the equity.
Its executive management consists of vineer Nayyar (vive Chairman) , sanjay
kalra (CEO) , Sanjoy Anand (Chief Financial officer) Sujit Baksis) (President-
Corporate Affairs) and L.Ravichandran (Executive vice president and COO)
4.2 Management:-
Board of Directors
 Keshub Mahindra
 Chairman
 Anand G Mahindra
 Vice – Chairman & Managing Director
 Deepak S. Parekh
 Nadir B. Godrej
 M.M Murugappan
 Narayanan Vaghul
 A.S Ganguly
 R.K Kulkarni
 Anupam Puri
 Thomas Mathew T.
 Nominee of life insurance
 Corporation of India
 Bharat Doshi
 Executive Director
 A.K Nanda
 Executive Director
 Narayan Shankar
 Company secretary
 CHAPTER V
DATA ANALYSIS
------------------- in Rs. Cr. -------------------

Balance Sheet of Mahindra and Mahindra

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 293.62 282.95 272.62 239.07 238.03
Equity Share Capital 293.62 282.95 272.62 239.07 238.03
Share Application Money 33.97 8.01 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 9,974.62 7,527.60 4,959.26 4,098.53 3,302.01
Revaluation Reserves 11.18 11.67 12.09 12.47 12.86
Networth 10,313.39 7,830.23 5,243.97 4,350.07 3,552.90
Secured Loans 407.23 602.45 981.00 617.26 106.65
Unsecured Loans 1,998.06 2,277.70 3,071.76 1,969.80 1,529.35
Total Debt 2,405.29 2,880.15 4,052.76 2,587.06 1,636.00
Total Liabilities 12,718.68 10,710.38 9,296.73 6,937.13 5,188.90
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 5,849.27 4,866.18 4,653.66 3,552.64 3,180.57
Less: Accum. Depreciation 2,841.73 2,537.77 2,326.29 1,841.68 1,639.12
Net Block 3,007.54 2,328.41 2,327.37 1,710.96 1,541.45
Capital Work in Progress 1,364.31 1,374.31 886.96 649.94 329.72
Investments 9,325.29 6,398.02 5,786.41 4,215.06 2,237.46
Inventories 1,694.21 1,188.78 1,060.67 1,084.11 878.48
Sundry Debtors 1,354.72 1,258.08 1,043.65 1,004.88 700.89
Cash and Bank Balance 447.62 475.17 635.61 310.58 415.89
Total Current Assets 3,496.55 2,922.03 2,739.93 2,399.57 1,995.26
Loans and Advances 2,653.52 2,034.47 1,402.45 866.19 1,011.50
Fixed Deposits 167.02 1,268.06 938.82 550.65 910.18
Total CA, Loans & Advances 6,317.09 6,224.56 5,081.20 3,816.41 3,916.94
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 5,289.67 3,822.50 3,520.20 2,525.31 2,138.77
Provisions 2,005.88 1,796.54 1,277.56 943.46 715.43
Total CL & Provisions 7,295.55 5,619.04 4,797.76 3,468.77 2,854.20
 Net Current Assets -978.46 605.52 283.44 347.64 1,062.74
Miscellaneous Expenses 0.00 4.12 12.55 13.53 17.55
Total Assets 12,718.68 10,710.38 9,296.73 6,937.13 5,188.92

Contingent Liabilities 2,632.10 2,307.70 1,220.39 985.35 1,008.27

Book Value (Rs) 174.85 138.02 191.91 181.43 148.72

7.
Mahindra and Mahindra

Profit & Loss account ------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 25,569.55 20,323.63 14,668.13 12,894.94 11,231.99

Excise Duty 2,092.02 1,807.30 1,587.05 1,584.57 1,310.65

Net Sales 23,477.53 18,516.33 13,081.08 11,310.37 9,921.34

Other Income 563.13 285.09 132.65 575.96 531.17

Stock Adjustments 202.23 23.69 -156.29 149.11 6.41

Total Income 24,242.89 18,825.11 13,057.44 12,035.44 10,458.92

Expenditure

Raw Materials 16,604.88 12,461.56 9,208.71 7,963.82 6,937.16

Power & Fuel Cost 143.93 120.97 98.69 91.33 65.19

Employee Cost 1,445.56 1,199.85 1,024.52 853.65 666.15

Other Manufacturing Expenses 98.33 96.92 75.36 73.35 68.80

Selling and Admin Expenses 1,735.63 1,439.26 1,109.96 1,108.33 891.29

Miscellaneous Expenses 261.10 264.21 165.83 257.84 210.03

Preoperative Exp Capitalised -50.87 -59.55 -42.83 -46.49 -47.10

Total Expenses 20,238.56 15,523.22 11,640.24 10,301.83 8,791.52

 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 3,441.20 3,016.80 1,284.55 1,157.65 1,136.23

PBDIT 4,004.33 3,301.89 1,417.20 1,733.61 1,667.40

Interest 70.86 156.85 134.12 87.59 19.80

PBDT 3,933.47 3,145.04 1,283.08 1,646.02 1,647.60

Depreciation 413.86 370.78 291.51 238.66 209.59

Other Written Off 0.00 0.00 0.00 0.59 0.33

Profit Before Tax 3,519.61 2,774.26 991.57 1,406.77 1,437.68

Extra-ordinary items 0.00 72.49 48.97 0.00 -19.19

PBT (Post Extra-ord Items) 3,519.61 2,846.75 1,040.54 1,406.77 1,418.49

Tax 857.51 759.00 199.69 303.40 350.10

Reported Net Profit 2,662.10 2,087.75 836.78 1,103.37 1,068.39

Total Value Addition 3,633.68 3,061.66 2,431.53 2,338.01 1,854.37

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 706.08 549.52 278.83 282.61 282.23

Corporate Dividend Tax 96.56 74.23 33.23 38.48 42.50

Per share data (annualised)

Shares in issue (lakhs) 5,872.47 5,659.08 2,726.16 2,390.73 2,380.33

Earning Per Share (Rs) 45.33 36.89 30.69 46.15 44.88

Equity Dividend (%) 230.00 190.00 100.00 115.00 115.00

Book Value (Rs) 174.85 138.02 191.91 181.43 148.72

5.1 DATA ANALYSIS

5.1.1 Current Ratio:-

The following table shows the current ratio of three year i.e 2011-12,2012-13,
2013-14 .
Table 5.1
Year Current Current Corneal
Assets Liabilities ratio
2011-12 3748.17 2665.65 1.40.:1
2012-13 3644.37 3240.10 1.124:1
2013-14 5062.93 4797.76 1.06:1

Source: (Annual report if Mahindra & Mahindra)

In the above table indicate the relationship between current asset & current
liabilities. The following are the current ratio of three year.

 2011-12 -1.4:1
 2012-13 -1.124.:1
 2013-14- 1.06.1

Normally the ideal current ratio is 2:1 by analyzing the above table we can
see that current ratio has decreased over three year periods which is not good or
the company.
5.1.2 Quick Ratio:-
The following table shows the quick ratio of three year. i.e. 2011-12,2012-13,
2013-14 .
Table 5.2

Year Quick asset Current Quick Ratio

liabilities
2011-12 2869.69 2665.65 1.08.1
2012-13 2560.26 3240.01 0.79:1
2013-14 4002.26 4797.76 0.83:1

Source: (Annual report if Mahindra & Mahindra)

In the above table indicate the relationship between quick asset & current
liabilities. The following are the quick ratio of three year.

 2011-12 -1.08:1
 2012-13 -1.0.79:1
 2013-14- 0.83:1

From the above table we conclude that the ratio is deceased from 0.5:1 (08-
09) to 0.28 (09-10) and the marginally increased to 0.33.:1 (10-11).
5.1.3 Stock turnover ratio:-
The following table shows the stock turnover ratio of three years i.e 2011-
12,2012-13, 2013-14 .
Table 5.3
Year Net sales Avg.Inventory Stock Turnover
ratio
2011-12 9608.72 878.48 10.93time
2012-13 9608.72 1084.11 9.966 time
2013-14 12640.06 1060.67 11.93 time

Source: (Annual report if Mahindra & Mahindra)

In the above table indicate the relationship between Net sales & Avg.
inventory. The following are the stock turnover ratio of three years.

 2011-12- 10.93 times

 2012-13- 9.966 times
 2013-14 11-.93 times

From the above table we see that the ratio has decreased from 10.93 times to
9.966 times and then increased to 11.93 times which means a better & efficient
inventory management.
5.1.4 Debtor turnover ratio:-
The following table shows the Debtor turnover ratio of three years.i.e. 2011-
12,2012-13, 2013-14 .

Table 5.4
Year Net sales Avg.sundry Debtor turnover
debtors ratio
2011-12 9603.72 700.89 13.7 times
2012-13 10804.64 1004.88 10.75 times
2013-14 12649.06 1043.65 12.12 times

Source: Annual report if Mahindra & Mahindra

In the above table indicate the relationship between Net sales and Avg. sundry
debtor. The following are the debtor turnover ratio of three years.
 2011-12- 13.7 times
 2012-13 -10.75 times
 2013-14 -12.12 times

The above table shows that the ratio decreased from 13.7 times during (08-09)
to (09-10) and then increased top 12.12 times in the next year. Being a
manufacturing company debtor turnover ratio is considered as satisfactory.
5.1.5Avg. Collection period:-
The following table shows the Avg. Collection period of three the i.e 2011-
12,2012-13, 2013-14 .

Table-5.5
Year No of working Sundrydebtor Avg. collection
day sales period
2011-12 265x700.89 9603.72 26.638 days
2012-13 365x1004.88 10804.64 33.947 days
2013-14 365x1043.65 12649.06 30.1 days

Source: Annual report if Mahindra & Mahindra

In the above table Indicate the relationship between No. of working & sundry
debtor sales. The following are the Avg. collection period of three years.

 2011-12 -26.638 days

 2012-13 -32.947 days
 2013-14- 30.1 days

The above table shows that it takes around 30 days to collection.

The receivable which is a good indicator.
For the coming years the company should try to reduce this Avg. collection
period.
5.1.6Creditor turnover ratio:-
The following table shows the creditor turnover ratio of three years.
i.e 2011-12,2012-13, 2013-14 .

Table -5.6
Year Net Avg. Sundry Creditor is
purchase Creditor turnover ratio
2011-12 6825.79 700.89 9.74 times
2012-13 1004.88 1004.88 33.947 days
2013-14 9241.93 1043.65 8.86 times

Source: (Annual report if Mahindra & Mahindra)

In the above table Indicate the relationship between No. of working & sundry
debtor sales. The following are the Avg. collection period of three years.

 2011-12 -26.9.74 times

 2012-13 -7.7 times
 2013-14- 8.86 times

In the above table shows that the ratio has decreased from 9.74 times to 7.7
times during (08-09) to (09-10) and then increased to 8.86 times in the year (10-
11).
5.1.7Avg. Payment period:-
The following table shows the Avg. Payment of three years i.e 2011-12,2012-
13, 2013-14 .

Table-5.7
Year No of Creditor Avg. payment
working days turnover ratio period
2011-12 365 9.74 times 37.47 days
2012-13 365 7.7 times 47.40 days
2013-14 365 8.86 times 41.19 days

Source: (Annual report if Mahindra & Mahindra)

In the above table Indicate the relationship between No. of working days 4
creditor turnover ratio. The following are the Avg. payment period of three years.

 2011-12- 37.47 days

 2012-13- 47.40 days
 2013-14- 41.19 days

The above table that avg. payment period has slightly increased from 37.47
days during (08-09) to (09-10) and then substantially increased in the year (10-11)
i.e 41 days.
5.1.8working capital turnover ratio:-
The following table shows the working capital turnover ratio of three years.
i.e. 2011-12,2012-13, 2013-14 .

Table 5.8
Year Net Sales Net working Working capital
capital turnover ratio
2011-12 9603.72 1082.52 8.87 times
2012-13 10804.64 404.36 26.72 times
2013-14 12640.06 265.17 47.7 times

Source: (Annual report if Mahindra & Mahindra)

In the above table indicate the relationship between Net sales and Net
working capital. The following are the working capital turnover ratio of three
years.

 2011-12- 8.87 times

 2012-13- 26.72 times
 2013-14- 47.7 times

The above table shows that this ratio has increased considerably over 3 years
period which indicates better working capital management.
 CHAPTER – VI

SUMMARY OF FINDING CONCLUSION SUGGESTION

6.1 Summary of Finding:-
 Table 5.1 indicates the relationship between current assets & current
liabilities. The following are the current ratio of three years.
2011 1.40.1
2012 1.124.1
2013 1.06.1
 Table 5.2 indicates the relationship between Quick assets & current liabilities.
The following are the quick ratio of three years.
2008 1.08.1
2009 0.79.1
2010 0.83.1
 Table 5.3 indicates the relationship between Net Sales & Avg. inventory.The
following are the stock turnover ratio of three years.
2008 10.93 Times
2009 9.966 Times
2010 11.93 Times
 Table 5.4 indicates the relationship between Net sales & Avg. sundry
debtor.the following at the debtor of three years.
2008-09 13.7 Times
2009-10 10.75 Times
2010-11 12.12 Times
 Table 5.5 Indicates the relationship between No. of working day & sundry
debtor sales. The following are the Avg. collection period of three years.
2008-09 26.638 Days
2009-10 33.947 Days
2010-11 30.1 Days
 Table 5.6 Indicate the relation between Net purchase & Avg sundry creditor.
The following are the creditors turnover ratio of three years.
2008-09 9.47 Times
2009-10 7.7 Times
2010-11 8.86 Times
 Table 5.7 Indicate the relations between No. of working days & creditor
turnover ratio. The following are the Avg. payment period of three years.
2008-09 37.47 Days
2009-10 47.40 Days
2010-11 41.19 Days
 Table 5.8 Indicate the relationship between Net sales and net working
capital. The following are the working capital turnover ratio of three years.
2008-09 8.87 Times
2009-10 26.72 Times
2010-11 47.7 Times
 CONCLUSION
The needs of working capital cannot be over emphasized. It is necessary to
generate the objective of financial decision making to minimize the shareholders
wealth. The extents to which profits can be earned naturally depend upon
operating or cash cycle. The operating cycle can said to be the heart of working
capital. The continuing flow of cash to suppliers, to inventory, to accounts
receivables and into cash is called operating cycle. In the current study have taken
various ratios and the interpretation there of to measure the length of the
operating cycle of Mahindra &Mahindra ltd. From the interpretation it is found
that the firm’s liquidity position is good which is required.
In the terms of short-term solvency we have taken 3 ratios i.e. inventory
turnover, debtor’s turnover and creditor’s turnover. From the findings we can state
that the firm’s inventory turnover is not so good. Its debtor turnover and avg.
collection period are fluctuating year by year which means the company has not
good trade credit policy. But the creditor’s turnover is good while high credit
turnover ratio reflects liberal credit terms granted by the supplier.
Last but not least the higher working capital ratio is good for the
organization but very high ratio shows negative impact. So, in this cash we have to
slow down the capital ratio to at least 30 to 35 times in a year instead of 47.7
times and overall firm enjoys a good
liquidity and solvency position.
 SUGGESTION
After a careful analysis of different factors of working capital of the company
discloses completely with both negative and positive view. We suggest that the
higher working capital ratio is good for the organization but very high ratio shows
negative impact. So, in these cases we have to slow down the capital ratio to at least
30-35 times in years instead of 47.7 times in year instead of 47.7 times and overall
firm enjoy good liquidity and solvency ratio.
 BIBLIOGRAPHY
Books Author
 Financial Mahindra : Dr. S.N Maheswari
 Financial Mahindra : P.K Jain & K.L . Narang
 Financial Mahindra : P.K Jain 7 M.Y Khan
 Financial Mahindra : I.M Pandey.

Website
 www.google.com
 www.mahindra.com
 www.wikipedia.com
 www.indiatimes.com
 www.indiaeconomic.com
CHAPTER-I

INTRODUCTION
CHAPTER-II

WORKING CAPITAL
CONCEPT
CHAPTER-III

METHODOLOGY
CHAPTER-IV

COMPANY PROFILE
CHAPTER-V

DATA ANALYSIS
 CHAPTER-VI

SUMMARY OF FINDING
CONCLUSION & SUGGESTION
 CONTENTS
CHAPTER-1
 INTRODUCTION 01
1. Objective of the study
CHAPTER-2
 WORKING CAPITAL CONCEPT 02-06

2.1 Concept of working capital

2.2 How its calculated,
CHAPTER-3
 METHODOLOGY 07-10
3.1 Sources of data
3.2 Scope of study
3.3 tools and techniques of working capital
CHAPTER-4
 COMPANY PROFILE 11-12
4.1 Origin & history of Mahindra & Mahindra Ltd.
4.2 Management
CHAPTER-5
 DATA ANALYSIS 13-21
5.1 Financial Highlights
5.2 Data analysis
CHAPTER-6
 SUMMARY OF FINDING CONCLUSION & SUGGESTION 22-26
6.1 Summary of Finding
6.2 Conclusion
6.3 Suggestion
6.4 Bibliography
 DECLARATION

I Suvam sekhar Barik bearing exam. Roll No. 12BA053 Of B.B.A

6th SEMESTER do hereby declare that I have prepared this project

“WORKING CAPITAL MANAGEMENT MAHINDRA & MAHINDRA LTD”.

This Project Prepared by me is genuine and original one. I have not

submitted this Project elsewhere for other purpose.

Suvam Sekhar Barik

B.B.A 6th SEMESTER
Class Roll No. BB-12-049
Exam Roll No.12BA053
Regd No: 14892/12
 GUIDE CERTIFICATE
This is to certify that the work entitled about the working capital
Management of Mahindra & Mahindra Ltd. Is a pace of project done by
Suvam Sekhar Barik a student of B.B.A bearing Exam Roll No:-12BA053
under my guidance and supervision for Partial Fulfillment of B.B.A
curriculum of Fakir Mohan Autonomous College, Balasore, Odisha.

To the best of my knowledge and belief the term project report.

Embodies the work of the candidate herself.
Has been duly completed.

It up to the standard both in respect to contacts and language for

being referred to the examiner.

I wish all the best for her Future.

Date Dr. Rabindra Ku. Mohanty

Place: H.O.D OF B.B.A
(Dept of B.B.A)
F.M Autonomous college
Balasore.
 ACKNOWLEDGEMENT
It gives me immense pleasure in preparing the project “working
capital management of Mahindra & Mahindra” I would sincerely
convey my regards to teachers under whose guidance and immense help
me to proceeds this project with full inspiration my study could not have
been completed if I had not been able to get the reference materials from
the company.
I am also immensely grateful to my esteemed guide whose
continuous and invaluable guidance can never be forgotten by me but for
whom; this study could not have got present shape. Last but not least. I
would also like to acknowledge my gratitude to all of them whom
assisted me in completing the project report.

Date: Suvam Sekhar Barik

Place: B.B.A 6th SEMESTER
Class Roll No. BB-12-049
Exam Roll No. 12BA053