SYNOPSIS

TITLE OF PROJECT
A STUDY OF WORKING CAPITAL MANAGEMENT

COMPANY PROFILE

EXPRESS INFRATECH PVT. LTD

The company Express infratech Pvt. Ltd started its journey with little but confident steps as
an iron ore mining contractor in Barbil belt in Orissa. Little but wide experience, excellent
understanding to apply new technologies, strict quality control and delivery of service in time
made the company one of the reliable in the field. Soon after within one year it enlarged its
capacity threefold and widened its area of service to sundargarh and other adjacent mininig
rich areas in that state. The strategy for the years up to 2010 underlined the continued
importance of focusing on building a profitable and sustainable business platform for its
future development. After achieving its goals successfully as a contractor and on the wealth
of experience and expertise garnered in this sector, it planned to venture in to aggregate and
Quartzite mining in the capacity of mine owner. Self belief, strong determination, disciplined
work strategy along with bird eye analysis to remove it’s weakness at regular interval and
focusing on the strengths it gained during the journey, enabled us to materialize the dreams
come to be true on ground reality by the end of 2010. Now we have the capacity to supply
100000 MT metal chips/ Month with certain possibility to expand the same by the passage of
time. Though the prime area of expertise is mining and incidental activities pertaining to the
mining, it entered in another important business activity of trading Iron & Steel products. We
take every pride while mentioning the fact that performance of the company even in its very
initial stage, was surprisingly outstanding as this contributed more than expectation.
Motivated by this awesome performance, there was no option left instead to take it seriously
and treating this too, as prime business along with mining.
To summarize:
 Specialized in metal ore mining.
 Big supplier to National Highway Authorities of India Ltd for Road Metal
 Able to meet metal demand in desired quantity, quality and sizes anywhere in India.
 Apparently edging closer to export across the country as well.
 Providing services successfully as mining contractor in Orissa since last 7 years.
 High volume Iron & steel products trader.

INTRODUCTION & OBJECTIVE OF THE STUDY (Max. 200 words)

INTRODUCTION
Every business needs funds for two purposes for its establishment and to carry out its day- to-
day operations. Long terms funds are required to create production facilities through
purchase of fixed assets such as P&M, land, building, furniture, etc. Investments in these
assets represent that part of firm’s capital which is blocked on permanent or fixed basis and is
called fixed capital. Funds are also needed for short-term purposes for the purchase of raw
material, payment of wages and other day – to- day expenses etc.

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These funds are known as working capital. Funds, thus, invested in current assts keep
revolving fast and are being constantly converted in to cash and this cash flows out again in
exchange for other current assets. Hence, it is also known as revolving or circulating capital
or short term capital.

OBJECTIVES:
1. To understanding the concept and importance of working capital management.
2. To understanding various steps of operating cycle so which are involved in working
capital management?
3. To understanding the working capital management of ASP division of Company.
4. To understanding the meaning of two terms i.e. gross working capital and net working
capital.
5. To know the two types of working capital i.e. permanent working capital and temporary
working capital.

STATEMENT OF THE PROBLEM (Max. 500 words)

As we were seen as a liability towards the organization since there was no contribution from
our side towards, nobody actually paid any attention towards Working Capital. It was very
difficult to actually take out relevant information from the Comparative Study with Axis
Bank were very hesitant to let us meet the company. If cash flows are predictable it is simply
a problem of minimizing the total costs - the transaction cost and the opportunity cost.
Transaction costs against the cost of too much cash (opportunity cash) Cash flows, in
practice, are not completely predictable. At times they may be completely random. Under
such a situation, a different model based on the technique of control theory is needed to solve
the problem of appropriate level of working cash balance. A fire in a factory may burn
everything and owner’s only source of earning with investment of huge capital is finished but
insurance will come to one’s rescue if insurance is taken, all the operations can be started
again.
As we know working capital is the life blood and the centre of a business. Adequate amount
of working capital is very much essential for the smooth running of the business. And the
most important part is the efficient management of working capital in right time. The
liquidity position of the firm is totally effected by the management of working capital. So, a
study of changes in the uses and sources of working capital is necessary to evaluate the
efficiency with which the working capital is employed in a business. This involves the need
of working capital analysis.
The analysis of working capital can be conducted through a number of devices, such as:
1. Ratio analysis.
2. Fund flow analysis.
3. Budgeting.

LITERATURE REVIEW
A research study on working capital management of paper industries in India was conducted
by R. Sivarama and Prasad (2001). Their Sample consisted of 21 selected paper mills,
including 9 large, 5 medium and 7 small scales for the period from 1983-84 to 1992-93. They
reported that the chief executives properly recognized the role of efficient use of working

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capital in liquidity and profitability, but in practice they could not achieve it. Again they
reported a clear reveal of a suboptimum utilization of working capital in paper industry.

P. Saravanan (2001) had undertaken a research on working capital management in non-

banking finance companies. Data from 1987-88 to 1996-97 for 10 non-banking finance
companies had been analyzed. He observed that, medium and large size non-banking
companies have efficiently made use of bank credit to finance their working capital
requirements.

RESEARCH METHODOLOGY (Max. 500 words)

1. INTRODUCTION: Honest efforts would be made to focus on the objectives under take
through collection of both primary and secondary data. Primary data will be collected mainly
to get factual response of the project which will help to have in depth analysis of the
problem. Secondary data will be collected from libraries, journals, earlier related studies, etc.
Various reports published by project managers related to project budgets will be considered
for understanding the problems of working capital.

2. TYPE OF RESEARCH: This project will be considered as an analytical research.

Analytical Research is defined as the research in which, researcher has to use facts or
information already available, and analyze these to make a critical evaluation of the facts,
figures, data or material.

3. RESEARCH DESIGN: The research design will be used in this study is both
‘Descriptive’ and ‘exploratory’.

4. RESEARCH PROBLEM: Financial statement is a collection of data organized according

to logical and consistent accounting procedure to convey an under-standing of some financial
aspects of a business firm. It may show position at a moment in time, as in the case of
balance sheet or may reveal a series of activities over a given period of time, as in the case of
an income statement. Thus, the term ‘financial statements’ generally refers to the two
statements.
(1) The position statement or Balance sheet.
(2) The income statement or the profit and loss Account.

5. SOURCE OF RESEARCH DATA: There will be mainly two sources:

 PRIMARY DATA: The primary data is that data which is collected fresh or first
hand, and for first time which is original in nature. In this study the Primary data will
be collected from Questionnaire and Personal Interaction with Finance manager and
other staff members.

 SECONDARY DATA: The secondary data are those which have already collected
and stored. Secondary data easily get those secondary data from records, annual
reports of the company etc. It will save the time, money and efforts to collect the data.

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 The major source of data for this project will be collected through annual reports,
profit and loss account of 5 year period from 2012-2016 & some more information
collected from internet, journals and text books.

6. SAMPLING DESIGN:
Sampling unit : Financial Statements
Sampling Size : Last five years financial statements

7. TOOLS USED FOR ANALYSIS OF DATA: The data will be analyzed using the
following financial tools. They are
 Ratio analysis.
 Statement of changes in working capital.

8. DATA ANALYSIS & INTERPRETATION: Classification & tabulation transforms the

raw data collected through questionnaire in to useful information by organizing and
compiling the bits of data contained in each questionnaire i.e., observation and responses are
converted in to understandable and orderly statistics are used to organize and analyze the
data.
• Simple tabulation of data using tally marks will be used.

LIMITATIONS:
Every project reports have certain limitations and the present study is no more exception.
These are:
 The time constraint will be one of the major problems.
 The lack of information sources for the analysis part.
 Getting accurate responses from the respondents due to their inherent Problems,
personality traits, and mood fluctuations will be very difficult task.
 Some respondents may be re-contacted as per their convenience of time.
 Some data may be given by the staffs might be not proper. Like their contact number &
address, etc.
 This study will be conducted within a short period. During the limited period the study
may not be retailed, fully fledged and utilization in all aspects.
 The analysis will be limited to just five years of data study (from year 2011 to year 2015)
for financial analysis.
 The findings of the study will be based on the information retrieved by the selected unit.
 Financial accounting does not take into account the price level changes.

REFERENCES:

BOOKS
 Financial management - Khan and Jain, Tata Mcgrw Hill
 Financial management - Prasanna Chandra, Tata Mcgrw Hill
 Management accounting - R.K. Sharma and K. Gupta

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  Financial Management and polices - V.K. Bhalla, ANMOL Publication Pvt. Ltd.
 Financial Management - K. Rajeswari, Sultan chand & sons

ANNUAL REPORTS & NEW PAPERS

 Annual Report of the Company.
 Catalogues & Boucher the Company.
 Times of India
 Economic Times
 The Hindu, etc.

WEB SITE VISITED

 www.weekipedia.com
 www.google.co.in
 www.wikipedia.org
 www.efinancemanagement.com
 www.transtutors.com, etc.

MAGAZINES
 Business world
 India Today
 Business today, etc.