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CHAPTER-I
INTRODUCTION
Capital required for day to day working in the business concern, for purchasing raw
material, for meeting day to day expenditure on salaries, wages, rent, rates, advertisement,
etc. is called as working capital.
It represents the portion of the business concern total financial resource, which is put to
variable operative purpose .these are two concept of working capital
Gross working capital refers to firm total current assets .It can also called as circulating
capital.
Current assets are those assets which have short life span and are converted into cash
in accounting year the major current assets are cash bank balance, marketable securities,
accounts receivable and inventories.
Current liabilities are those liabilities which are intended to be paid in the ordinary
course of business within a year. The basic current liabilities account payable, bank overdraft,
outstanding expenses.
NEED AND IMPORTANCE OF THE STUDY
For measuring and finding the standing of the company, statements of profit & loss
a/c & the balance sheets are prepared for a fixed internal of time, mostly for one year. These
accounts together are known as financial statements.
They are prepared and presented with a view of recording, reporting and receiving the
progress of the organization. They reflect a combination, of facts and figures based on the
posting of business transaction to various legers according to the business principles and
practices. These statements have a limited usage for the management in forward planning. It
will be only a bird’s eye view of present financial position. The statements merely indicate
the funds inflow and outflow. It is a scrap shot of financial position of business on a given
date. To know the inherent significance or figures appearing in the statements, different tools
have to be used.
One of the tools is financial ratio analysis that relates the variable with certain
phenomenon, which reflects the increase or decrease in the variables and relation between
them. The information generated could be very useful for the management for evaluating the
performance and future financial planning.
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OBJECTIVES OF THE STUDY
1. To study the various aspects of working capital management like cash, account
receivable and inventories.
3. To analyze the growth of current assets, current liabilities, net working capital.
4. To analyze the financial performance of the company, using the working capital
management.
5. To give conclusion of the study and also offer suitable suggestions for efficient
management of working capital in Anika Bajaj.
Working capital is blood of organization. The day to day operations can be carried out in
an efficient manner only if adequate working capital is available. The cash decide the wealth
of an organization. The promptness in collection & payment of recent can be known only
with study of working capital, Therefore the scope of the study extends to
Procurement of funds.
Purchase of Raw material.
Maintenance of Raw material.
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LIMITATIONS OF THE STUDY
The study was conducted with the data available and analysis.
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RESEARCH METHODOLOGY
SOURCE OF DATA:-
For conducting the study necessary information has been collected from only
secondary sources of mainly published records of the “Anika Bajaj” and collected from the
studies and reports.
PRIMARY DATA:
The required primary data is sourced from discussions with the executives of the
company and departments of the organization i.e., financial and accounts department.
SECONDARY DATA:
The most of the data from the study is drawn from secondary data source. The
secondary data is collected from company annual reports, financial statements and other
available report, financial statement and other available records and statement and text book
on financial management.
PERIOD OF STUDY
The period of present study on working capital Concerned with the last five financial
years of data i.e. from 2014-15 to 2018-19.
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CHAPTERIZATION:
The Chapterization scheme of the present study presented here as under, gives a clear picture
about the organization of different chapters in the sub-contents covered in the each chapter.
Chapter1:- The first Chapter includes introduction to the topic, need for the study,
objectives, scope of the study, research methodology and limitations of the study, Theoretical
Framework through its gives a theoretical picture of the study.
Chapter2:- The second chapter consists of profile of the company and its history.
Chapter3:- The third chapter is core chapter of the study. The chapter through its analysis,
tabulation, and interpretation gives a clear picture of the present study.
Chapter 4: The fourth chapter deals with the summary parts of the study where the finding is
derived from the study. It also tries to offer some suggestions.
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CHAPTER-II
THEORETICAL FRAME WORK
Working capital refers to the investment by a company in short-term assets such as cash,
marketable securities, accounts receivables and inventories. A study of working capital is of
major importance to internal and external analysis because of its close relationship with the
current day to day operations of business.
Business needs funds for the purpose of its establishment and to carry out its day-to-day
operations. Long-term funds are required to create production facilities through purchase fixed
assets such as plant & machinery, land & buildings, furniture etc. investment in these assets
represents the part of firm's capital, which is blocked on a permanent or fixed and is called
fixed capital, Funds are also needed for short-term purpose for the purchase of raw materials,
payments of wages and other day-to-day expenses etc., these funds are known as working capital.
Working capital is one of the most important requirements of any business concern.
Working capital can be compared with the -blood of human beings. As human cannot survive
without blood, in the same way on business cannot survive without working capital.
Working capital management deals with maintaining the levels of working capital to
optimum, because if a concern has inadequate opportunities if the working capital is more than
required the concern will loose money in form of interest on the block funds. Therefore
working capital management plays a very vital role in profitability of a company.
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DEFINITION AND MEANING:
Working capital is commonly used for the capital required for day to day working in a business
concern, such as purchasing raw material for meeting day to day expenditure on salaries,
wages, rent rates, advertising etc.
Working capital management may be said to include in its definitions, needs, optimum
level of current assets, the tradeoff between profitability and risk associations with a firm's
level of current assets and liabilities financing mix strategies and so on.
Current Working capital measures how much in assets a company has available to
build its business. The number can be positive or negative, depending on how much debt the
company is carrying. In general, companies that have a lot of working capital will be more
successful since they can expand and improve their operations. Companies with negative
working capital may lack the necessary for also called net current assets or current capital.
Cash is the lifeline of a company. If this lifeline deteriorates, so does the company's
ability to fund operations, reinvest and meet capital requirements and payments.
Understanding a company's health is essential to making investment decisions. A good way to
judge a company's cash flow prospects is to look at its Working Capital Management (WCM).
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NEED FOR WORKING CAPITAL:
In case adequate working capital is not available for this period the company will not be in a
position to purchase raw material, pay wages and other expenses required for, manufacturing the
goods. Therefore sufficient amount of working capital is to be maintained at any point time.
It will be interesting to understand the relationship between working capital, risk return
in manufacturing concern it is generally accepted that higher levels of working capital decrees
the risk and have the potential of increasing the profitability also.
ASSUMPTION:
There is a direct relationship risk and profitability, higher the risk higher the profitability,
while lower the risk lower the profitability. Current assets are less profitable than fixed assets...
Short-term funds are less expensive than long-term funds. On account of above principles, an
increasing in the ratio of current assets to total assets will be result in the decline of the
profitability of the firm, This is because investment in current assets as started above is less
profitable than in the fixed assets, However an increase in the ratio would decrease the risk of the
firm becoming technically insolvent. On the other hand a decrease in the ratio of current assets
to total assets would increase the profitability of the firm because investment in fixed assets
is more profitable then investment in current assets. However this increases the risk of
becoming insolvent on account of its possible inability in meeting its commitments in time due to
shortage of funds.
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CONCEPT OF WORKING CAPITAL :
It is the total of all the current assets, which include inventories, sundry debtors, and
cash in hand, and bank, advances, investments, short term deposits etc.,
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TYPE OF WORKING CAPITAL:
The working capital may also be classified into permanent and temporary working
capital .permanent working capital refers to the minimum amount of investment in all current
assets which is requires all the time to carry out minimum level of business activities . It
represent the current assets are called as core current assets .the amount of permanent
working capital remains in the business in one form or another form of assets .the suppliers of
such working capital are not paid during the life of the firm i.e. the assets concerned are
financed by funds raised from long term sources . Permanent working capital of the firm
increase with the volume of business as illustrated in figure 1
Amount of
working
capital Permanent
FIG1:
It represent that permanent capital is fixed over a period of time while temporary working
capital is fluctuating Permanent.
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Amount of Permanent
working
capital
fig2
It represents that: permanent working capital increasing over a period of time which
increases the level of business activity. And temporary working capital is fluctuating.
The amount of working capital that fluctuates from time to time on the basis of
business activity is called temporary working capital.
It represents additional current assets required at different times during the accounting
year. Temporary working capital requirement are met by fund raising from short term sources
of finance. Suppliers are paid generally during off range season.
Working capital management is aimed to manage the firm’s current assets and current
liabilities. So that a satisfactory level of working capital is maintained. If a firm is unable of
maintain adequate working capital .The firm may become insolvent and even be forced into
bankruptcy.
A firm must have adequate working capital it should not be excessive working capital
results in idle funds, which yield no profits for the business. Inadequate working capital
results into insufficient of funds for running the operations of the business smoothly.
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Sometimes it result into production interruption and there by reduces the profitability of the
business. Working capital management is concerned with all decision and acts the influence
the size and effectiveness of working capital efficient. Working capital management requires
that the firm should operate with some amount of working capital. The size of net working
capital varies from firm to firm and depends upon the nature of Business. The use of net
working capital is to measure a firm’s liquidity requirement cash flow and cash flow out of
business does concede. Cash out flow results forms payment of current liabilities are
predictable, whereas cash inflow are difficult to predict, the more the accuracy of prediction
of cash inflow the lower will be the net working capital requirement.
Working capital is required for a business because of the time gap between the sales and their
actual realization in cash. The time gap is technically called an operating cycle of the
Business fig -3 illustrates the operating cycle of a firm working capital management involves
management of different components of working capital such as account receivable and
i9nventories for determining the size and method of financing.
Cash
Raw material
Work in
progress
Account
receivable
Finished
Sales goods
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A brief description of various issues involved in the management of each of the
component of working capital is here below. Adequate cash balance have to maintained so
that no fund are blocked in idle cash which involves costs in terms if interest. Adequate cash
is required to meet business obligation as and when they raise. Cash requirement also arise to
meet unforced contingencies such as stake, increase in the price of raw material, and fall in
the collocation of the account receivable. The grater is the possibilities of contingencies. The
greater amount of fund required to maintain by the firm.
Adequate inventories protect the firm from the losses on account of shortage or delay
in production price variations and defer ratio of stock. Accounts receivable constitute a
significant portion of the hotel current assets of a business. Accounts receivable are the
results of goods or credit intended increase the scale volume and thereby increase in the
profits of the business. Management of accounts receivable is aimed to ensure liquidity.
Higher level of accounts receivable to be bad debt and inverse the collection cost.
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PERMANENT WORKING CAPITAL:
This refers to that minimum amount of investment in all current assets, which is
required at all times to carry out minimum levels of business activities. Permanents working
capital represent the current assets required on a continuing basis over the entire year. Amount of
permanent working capital remains in the business in one form or other. This is particulars
important form the point of view of financing. The suppliers of such working capital should not
expect its return during the lifetime of the firm.
The amount of such working capital keeps on fluctuating from time to time on the basis of
business activities. Working capital represents additional current assets required at different times
during the operating year.
Since working capital is excess of current assets over current liabilities, the forecast
for working capital requirements can be made only after estimating the amount of different
constituent's working capital.
I. Inventories
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I. INVENTORIES:
The terms inventories include stock of raw materials, work - in - process and finished
goods. The estimation of each of them will be made as follows:
WORK- IN-PROCESS: The cost of work - in - process includes raw materials, wages and
overheads. In determining the amount of work in process, the time period for which the
good will be in the course of production process, is most important.
FINISHED GOODS: The finished goods are kept in warehouse and according to the orders of the
customers, goods will be delivered.
II. SUNDRY DEBTORS: Debtors are those persons who will be purchase goods on credit
basis. The sundry' debtors will-be calculated on the basis of credit sales.
III. CASH AND BANK BALANCES: The amount of money to be kept as cash in hand or cash at
bank can be estimated on the basis of past experience.
IV. SUNDRY CREDITORS: The lag in payment to suppliers of raw materials, goods, etc., and
likely credit purchase to be made during the period will be help in estimating the amount of
creditors.
IV. OUTSTANDING EXPENSES: The time lag in payment of wages and other expenses will
be help in estimation of outstanding expenses.
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SOURCES OF WORKING CAPITAL
There are mainly two types of sources of working capital, they are as follows:
SHARES: Issue of shares is the most important share for raising the permanent or long-term
capital. A company can issue various types of shares, preference share and deferred share.
PUBLIC DEPOSITS: Public deposits are the fixed deposits accepted by a business enterprise
directly popular in the absence of banking facilities.
TRADE CREDIT: Trade credit ref ers to the credit extended by the suppliers of goods
in the normal coerce of business. As present day commerce is built upon credit, the
trade credit arrangement of a firm with its suppliers is an important source of short-term
finance.
DEFERRED INCOMES: Deferred incomes are incomes received advances before supplying
goods or services. They represent funds received by a firm for which it has to supply
goods or services in future.
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advanced countries like U.S.A. In India, the reserve bank of India introduced
commercial paper in the Indian Money Market on the recommendations of the working
capital upon money market (Vague - Committee)
SIZE OF BUSINESS: The working capital requirements of a concern are directly influenced by
the size of its business, which may be measured in terms of scale of operations. Greater
the size of a business unit, larger will be the requirements of working capital.
TERMS OF SALES AND PURCHASE: Credit terms granted by the concern to its customers
as well as credit terms granted by its suppliers also affected the working capital.
SEASONAL VARIATION: The inventory of raw materials, spares and stores depends
on the conditions of supply. If the supply is prompt and adequate the firm can manage
with small inventory. However if the supply is unpredictable and scant then the firm, to
ensure continuity of production, would have to acquire stocks and when they are
available larger inventory should be carried.
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DIVIDEND POLICY: Dividend policy has a dominant influence on the working capital position
of an enterprise. If the management follows a conservative dividend policy, consequently
drains off large amounts from the pool of working capital.
CREDIT POLICY: The credit policy of a concern in its dealings with debtors and creditors
influence considerably the requirements of working capital. A concern that purchases it
requirements on credit and sells its product/services on cash requires lesser amount of
working capital.
PRICE LEVEL CHANGES: Changes in the price level also affect the working capital
requirements. Generally the rising prices will require the firm to maintain larger amount of
working capital as more fund will be requirement to maintain the same current assets.
OPERATING CYCLE: Working capital is required because of the time gap between the sales and
their actual realization of cash. This time gap is technically termed as "Operating Cycle" of
the business. In the case of manufacturing company, the operating cycle is the length of
time necessary to complete the following cycle of events:
TO CONVERT:
Conversion of inventories.
In case of financing firms the operating cycle includes the length of the time taken for
conversion of cash into debtors and debtors into cash.
Maintain of goodwill.
MANAGEMENT OF INVENTORY
Inventories are one of the major elements, which help the firm in obtaining the desired level
of sales. Inventories mean the stock of the product of a company and components of the products,
which include raw materials, work - in - process and finished goods.
The following are the techniques to control the size of the inventory
Just - in – time.
OBJECTIVES . O F INVENTORY:
Maintaining a minimum investment in inventories to minimize the direct and indirect case
associated with holding inventories to maximize the profitability.
RATIOS ANALYSIS
A ratio analysis is a widely – used tool of financial analysis. It defined as the systematic
use of ratio to interpret the financial statement so that the strength and weakness of the firm as
well as historical performance and the current financial conduction can be determined .The term
ratio refers to the numerical or quantitative relationship between the two items /variables .this
relation can be expressed as:
ACTIVITY RATIO
Activity ratios are concerned with the measuring the efficiency in the asset management.
These ratios are also called efficiency ratios or asset utilization ratio. The efficiency with which
the asset are used would be reflected in the speed and the rapidly with which assets are converted
into sales. Greater is the rate of turnover or conversion, the more efficient is the
utilization/management, other things being equal. For this reason, such ratios are also designated
as turnover ratios. Turnover is the primary mode for measuring the extent of efficient
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employment of assets by relating the assets to sales .an activity ratio may ,therefore, be defined
as test of the relationship between sales (more appropriately with cost of sales) and the various
assets of a firm. Depending upon the various type of assets, there are various types of activity
ratios.
This ratio establishes the relationship between costs of goods sold and average stock and
reflects the speed of turning over the stock into sales. The inventory \ stock turnover measures
how quickly inventory is sold. Promptness of sales indicates better performance of the business.
It is a test of efficient inventory management. Higher inventory turnover ratio is always
beneficial to the concern. A high ratio implies good inventory management. Lower inventory
turnover ratio shows that the stock is blocked and not immediately sold.
This ratio shows how quickly debtors & bills receivable are converted into cash. In others
words debtors’ turnover ratio is a test of liquidity of the debtors of a firm.
The higher the debtor turnover ratio and shorter the average collection period, the better
the liquidity of debtors as short collection period and high debtors turnover ratio imply prompt
payment on the part of debtors. On the other hand low debtor turnover ratio and long collection
period is preferred.
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This ratio shows how well the fixed assets are being used in business. The higher is the
ratio the better is the performance. On the other hand a low ratio indicates that the fixed assets
are not being effectively used.
INVENTORY TO NET WORKING CAPITAL:
Inventory is an important part of the current assets. If inventory is less than the working
capital his percentage will decrease. If inventory is more than the networking capital percentage
will increase generally low ratios will show sound working capital ratio should not exceed 100
percent.
THE CURRENT ASSETS TURNOVER RATIO:
Current asset turnover ratio is use to find out the current assets and also find out the sales.
PROFITABILITY RATIO
Apart from the creditors, both short term and long terms, also interested in the financial
soundness of a firm are the owners and management or the company itself. The management of
the firm is naturally eager to measure its operating efficiency. Simply, the owners invest their
fund in the expectation of reasonable return. The operating efficiency of the firm and its ability
to ensure adequate returns to its shareholders depends ultimately on the profit earned by it. The
profitability of the form can be measured by its profitability ratios. In other words, the
profitability ratios are designed to provide answers to the questions such as
What is the rate of profit for various divisions and segments of the firm?
Increase in gross profit ratio will mean Profit ability ratio related tom sales these ratios
are based on the premise that a firm should earn sufficient profit on each rupee of sale. If
adequate profits are not earned on sales, there will be difficulty in meeting the operating
expenses and no return will be available to the owner. These ratios consist of Profit margin and
expenses ratio
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Profit margin. The profit margin measures the relationship between profit and sales. As
the profit may be gross or net there are two type of profit margin.
Here, the profitability ratio is measured in terms of relationship between net profit and
net assets. The ROA may also be called profit to asset ratio there are various possible approaches
to define net profit and assets.
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CHAPTER-III
COMPANY PROFILE
About Bajaj: - The Bajaj Group is amongst the top 10 business houses in India. Its
and three-wheelers), home appliances, lighting, iron and steel, insurance, travel and
finance.
The group’s flagship company, Bajaj Auto, is ranked as the world’s fourth largest two- and
three- wheeler manufacturer and the Bajaj brand is well-known in over a dozen countries
Founded in 1926, at the height of India's movement for independence from the British, the
determination to succeed which are characteristic of the group today, are often traced back
to its birth during those days of relentless devotion to a common cause. Jamnalal Bajaj,
founder of the group, was a close confidant and disciple of Mahatma Gandhi. In fact,
Gandhiji had adopted him as his son. This close relationship and his deep involvement in
the independence movement did not leave Jamnalal Bajaj with much time to spend on his
newly launched business venture. His son, Kamalnayan Bajaj, then 27, took over the reins
of business in 1942. He too was close to Gandhiji and it was only after Independence in
1947, that he was able to give his full attention to the business. Kamalnayan Bajaj not only
consolidated the group, but also diversified into various manufacturing activities.
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The present Chairman of the group, Rahul Bajaj, took charge of the business in 1965.
Under his leadership, the turnover of the Bajaj Auto the flagship company has gone up
from Rs.72 million to Rs.100.76 billion (USD 2.3 billion), its product portfolio has
expanded from one to and the brand has found a global market. He is one of India’s most
distinguished business leaders and internationally respected for his business acumen and
entrepreneurial spirit.
Bajaj Auto limited is one of the largest two wheeler manufacturing company in India
apart from producing two wheelers they also manufacture three wheelers. The company
had started way back in 1945. Initially it used to import the two wheelers from outside, but
from 1959 it started manufacturing of two wheelers in the country. By the year 1970 Bajaj
Auto had rolled out their 100,000th vehicle. Bajaj vehicles have become an integral part of
the Indian milieu and over the years have come to represent the aspirations of modern
India.
Bajaj Auto also has a technical tie up with Kawasaki heavy industries of Japan to produce
The Bajaj Kawasaki eliminator has emerged straight out of the drawing board of
Kawasaki heavy industries. The core brand values of Bajaj Auto limited includes
Bajaj Chetak in 1980’s. This was around the time when the waiting list of Bajaj had
slowly evaporated and Indian consumers could buy the scooters ex-showroom. It was with
great pride did I buy a Bajaj scooter and was thrilled that it was available off-the-shelf.
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Bajaj Auto manufacturing units (1990’s) Bajaj Auto has three manufacturing units in the
country at Akurdi, Waluj and Chakan in Maharashtra, western India, which produced
1,814,799 vehicles in 1990’s. The sales are backed by a network of after sales service and
Bajaj Auto (2000’s) it has launch products which cater to every segment of the Indian two
wheeler market Bajaj CT 100 Dylex offers a great value for money at the entry level.
Similarly Bajaj Discover 125 offers the consumer a great performance without making a
Bajaj Auto also has a marked presence in the premium segment with models like the Bajaj
Pulsar creating a ripple on the Indian roads. The general trend of the two wheeler industry
has not left Bajaj Auto unscathed. Scooters which were once the main source of revenue
Bajaj Auto: In collaboration with Kawasaki Heavy Industries of Japan, this company is
the largest exporter of two and three wheelers in India. It was established in the year 1926
by Jamnalal Bajaj. The popular brands of this company are Pulsar and Discover DTSi. In
2005 the Discover DTS-I was chosen as Bike of the Year for its superb design by
Overdrive Awards. In the same year Bajaj Avenger and Bajaj Wave launched. And XCD
After I stopped riding scooters over the last ten years, my interest in two-wheelers came
down and I lost touch with the two-wheeler market. I did notice the shift from scooters to
motorcycles and the gradual overtake of Bajaj by Hero Honda. But, I thought that it was a
close fight between Hero Honda and Bajaj, with Hero Honda being the leader and Bajaj
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Company flash back
engineering, not only to domestic consumers but also internationally. Established just
eight decades back in 1926 by Jamnalal Bajaj, the company has been vested with India's
largest exporter of two and three wheelers, 196,710 units in 2005-06, a great 26 per cent
Bajaj Auto Ltd. sales have increased by approximately 21 per cent in the year 2007-08,
which exceeds Rs 65.4 billion, a record in the history of the company. The gross operating
profit stands at Rs. 9.3 billion, again a record. The profits after tax of the BAL are close to
Rs. 7.7 billion, and the pre-tax return on operating capital is at an impressive 80 per cent.
Management Profile:-
Board of Directors
Rahul Bajaj Chairman
Madhur Bajaj Vice Chairman
Rajiv Bajaj Managing Director
Sanjiv Bajaj Executive Director
D.S. Mehta Director
Kantikumar R. Podar Director
Shekhar Bajaj Director
D.J. Balaji Rao Director
J.N. Godrej Director
S.H. Khan Director
Mrs. Suman Kirloskar Director
Naresh Chandra Director
Nanoo Pamnani Director
Manish Kejriwal Director
P Murari Director
Niraj Bajaj Director
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Committees of the Board
Audit Committee
S.H. Khan Chairman
D.J. Balaji Rao
J.N. Godrej
Naresh Chandra
Nanoo Pamnani
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Key Policies:-
Auto Ltd., manufacturer of two and three wheeler vehicles is committed to prevention of
all applicable environmental legislation and regulations. Towards this, we shall strive to:
Minimize the generation of waste and conserve resources through better technology and
practices, and promote environmental awareness amongst our employees and motivate
them to fulfill our commitments. We, at Bajaj Auto, pledge ourselves towards creating and
Quality Policy: - We at Bajaj Auto continue to firmly believe in providing the customer
value for money, for years, through our products and services. This we shall maintain and
improve,
In our decision making, quality, safety and service will be given as much consideration as
Quality shall be built into every aspect of our work life and business operations. Quality
safe and participative work environment in which all employees target the elimination of
losses in order to continuously enhance the capacity, flexibility, reliability and capability
profitability.
GROUP OF COMPANIES:
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Bajaj Auto is the flagship of the Bajaj group of companies. The group comprises of 34
companies and was founded in the year 1926.
The companies in the group are:
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Bachhraj Factories Pvt. Ltd.
Baroda Industries Pvt. Ltd.
Jeevan Ltd.
Bachhraj & Co Pvt Ltd
The Hindustan Housing Co. Ltd.
Hospet Steels Ltd
Networks:-
Distribution network covers 50 countries
250,204 units exported in 2005-06
Dominant presence in Sri Lanka, Colombia, Bangladesh, Mexico, Central America, Peru
and Egypt
Largest exporter of three-wheelers; over 75,297 units exported in 2005-06
All products customized as per market needs
27 per cent growth in total exports over 2004-05
In countries where we perceive a good market potential, we seek a tie up with one of the
major industrial establishments, which would be in a position to invest in the project and
which would also entail manufacturing activities apart from marketing, distribution and
after sales services through a well-established nation-wide network.
We offer a full range of services to such business partners:
• Training in sales, service and spare parts management based on the Bajaj distribution
system.
• Active support for setting up manufacturing facilities overseas including transfer of
technical knowhow.
• Assistance in setting up an assembly plant for assembly of vehicles from complete
knocked down (CKD) kits.
• Select machinery and equipment, training of technical personnel, all in a phased manner
as required
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Products of Bajaj Two – Wheelers:-
IMPORTANT PRODUCTS MANUFACTURED:-
The different products of BAJAJ – MOTOR can be given categories,
Models Stroke Displacement
Spirits 2 70CC
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DTS-i Engine
DIGITAL TWIN SPARK ignition engine has two Spark plugs located at opposite ends of
the combustion chamber and hence fast and efficient combustion is obtained. The benefits
of this efficient combustion process can be felt in terms of better fuel efficiency and lower
emissions.
DTS-i Engine can be further tuned to deliver exhilarating performance or exceptional
mileage
DTS-Si Engine -
Like DTS-i (which is the mother technology) the engine has 2 spark plugs, but, instead of
conventionally positioned straight ports, the offset positioning of the ports generate high
swirl and turbulence of the air fuel mixture in the combustion chamber. This results in
highly efficient combustion that further results in exceptional mileage. Like the mother
DTS-i technology, the DTS-Si technology is a patented technology developed by Bajaj
Auto R&D.
We are launching our first bike with 125 cc DTS-Si engine and best in class mileage of
109 kmpl in September 07. The mileage and performance of this bike is sure to delight
you.
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DTS-Fi-
DTS-Fi stands for "Digital Twin Spark Fuel Injection", a ‘Bajaj Patented Technology’. In fuel
injection the conventional carburettor has been replaced by injector which injects fuel in to the
engine in a spray form based on the instructions of the Engine Control Unit (ECU) which is a
part of the Engine Management System EMS. The Electronic Control Unit (ECU) is
microprocessor based and is the brain of the fuel injection system. It processes information sent
by various sensors and instantly determines optimum fueling and spark timing for various engine
operating conditions. The ECU contains detailed information of the engine's characteristics from
which it picks the necessary data for commanding both fueling & sparks timing.
Service
Congratulations on having acquired your new Bajaj vehicle. Now, let us help you to look
after it so that you continue to own it proudly for several years of faithful, trouble-free
performance. Browse this section for our simple maintenance tips and recommended
service schedules.
Create your own service chart; locate the Bajaj service station closest to you… We will
help you get the maximum value for your money through our troubleshooting tips.
In the unlikely event of encountering an unusual problem, you can consult our engineers
by posting your queries through this section.
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Awards:-
Product Awards Year By
Bajaj Pulsar DTS-Fi - Bike of the Year 2015 CNBC-TV18 Auto car Auto
Awards
Bajaj Platina 100cc - Bike of the Year 2012 NDTV Profit Bike India
Mr. Rajiv Bajaj - Man of the year 2006 2006 Auto car Professional
Mr. Rajiv Bajaj - Automotive Man of 2010 Bike India & NDTV India
the year 2005
Bajaj CT 100 - Motorcycle Total 2008 TNS Automotive
Customer Satisfaction Study 2005
Bajaj Discover DTS-i - Bike of the 2006 OVERDRIVE Awards 2005
Year 2005
Bajaj Discover DTS-i - Indigenous 2005 OVERDRIVE Awards 2005
Design of the Year 2005
BAJAJ AUTO - Bike Maker of the Year 2005 ICICI Bank OVERDRIVE
2004 Awards 2004
DTS-i Technology - Auto Tech of the 2004 ICICI Bank OVERDRIVE
Year 2004 Awards 2004
Bajaj Pulsar DTS-i Bike of the Year 2004 ICICI Bank OVERDRIVE
2004 Awards 2004
Wind 125 Two Wheeler of the Year 2004 CNBC AUTOCAR Awards 2004
2004
Wind 125 Bike of the Year 2004 2004 Business Standard Motoring
Bajaj Pulsar 180 DTS-i BBC World 2003 BBC World Wheels Award 2003
Wheels Viewer’s Choice Two Wheeler
of Year 2003
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PROFILE OF ANIKA BAJAJ
ORGANISATIONAL HISTORY
38
S.Giridhar who is a General Manager of Anika Auto Agency, Warangal is not a
manufacturing unit, it’s showroom for the different products of BAJAJ-MOTOR. Hence it
is desirable to choose a location for the sale of finished products which is certainly located
and accessible to the consumers.
The host organization is located at Nakkalagutta water tank, Hanamkonda and Mulugu
road – Warangal. Situating on the main route of Warangal – Kazipet. This present location
is highly beneficial to the host organization for being accessible not only to the existing
consumers but also to potential consumers who will be attracted towards the organization
when they are passing on through that route.
DUTIES AND RESPONSIBILITIES:-
Managing Partners:-
Managing partners who is elected by the member partner will be the chief of the
organization the other partner will be solely and jointly responsible for the activities
undertaken by one partner, the managing partner will take all policy decisions as needed
from time to time actively participating in the affairs and management of the organization.
MANAGER:-
Manager is the Head of the administrative wing of the organization. Obliging and
implementing the instructions given by partners in general and managing partner in
particular by their facility the smooth functions of the day-to-day administration are the
main duties of the manager.
He will have to control all the different Department and its staff viz.., Salesman,
Accountant, Clerks, Cashier, Mechanics, Workers etc., Each such staff member is
accountable to the manager who in turn in accountable to the managing partner or
partners.
39
The organization is partnership firm in nature and selling BAJAJ – MOTOR products
through their showroom is the basic objective. Earning profits is the objective based on a
partnership deed executed between them, the provisions of which are as follows:
That the business of the partnership shall be of purchase and sale of BAJAJ – MOTOR
vehicles, spare parts and accessories.
That all the partners shall be the whole time partners and each of them shall be entitled to
claim remuneration on equal proportions out of the amount qualified for exemption under
income tax act.
That the capital of the firm is not fixed but shall contributed according to their mutual
convenience and respective capacities.
That the profit and losses of the firm shall be shared by the partners in equal proportions.
That the durations of the partnership shall be “AT-WILL” any partner desiring to leave the
firm can do so by at least three months’ notice in writing to the others partners of his
intension to do so.
That on the death (or) desire of any partners the firm shall not stand dissolved but shall be
carried on by the remaining partners with legal heirs.
That all the necessary and proper books of accounts shall be kept and maintained by the
main place at liberty to inspect them.
That all the books of accounts shall be closed once in every year i.e., 31 st march and net
profit / net losses as reflected by them shall be adjusted in the personal accounts of the
personal accounts of the parties this deed.
That the firms raise loans the markets or form any other sources, interest and other charges
there on shall be borne it.
AT LAST:-
Since the BAJAJ – MOTOR has three types of products
BAJAJ – MOTOR CYCLE.
BAJAJ – SCOOTERS.
BAJAJ – MOPEDS
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LIABLITIES
CAPITAL 834.56 834.56 834.56 1101.38 1500.55
RESERVES SURPLUS 15465.1 16048.5 16865.2 19391.5 22263
SECURD LOAN 5548.86 6367.67 6311.34 12262.4 22157.7
UNSECURED LOAN 187.77 678.87 2680 1697.13 2561.99
SUNDRY CREDTORS 3208.74 2667.28 4015.67 4639.62 6638.21
ACCEPTANCE 100.73 156.19 94.69 3.71 34.3
DIVIDENTS 12.4 14.59 18.64 297.72 26.19
INTREST ACCURED 40.83 26.99 17.36 15.15 8.39
PROVISIONS 388.07 616.2 662.03 376.45 1198.41
OTHER LIABLITIES 921.36 822.06 1210.59 1764.09 2873.36
DIFFERED TAX 2480.94 2501.42 2512.33 2478.09 2143.19
LIABLITIES
TOTAL 29189.3 30734.4 35222.5 44027.3 61405.3
ASSETS
CURRENT ASSETS
INVENTORIES 1794.27 2284.39 2682.88 2547.78 2882.49
SUNDRY DEBTOR 3132.67 3275.01 2286.55 2429.95 1612.94
LOANS ADVANCES 3260.59 3572.27 4183.13 3991.68 5524.01
41
CASH &BANK 446.96 685.54 881.93 631.08 1701.37
BALANCE
TOTAL(A) 8634.49 9817.21 10034.49 9600.49 11720.8
1
CURRENT
LIABLITIES
CREDITORS 3208.74 2667.28 4015.67 4639.62 6638.21
ACCEPTANCE 100.73 156.19 94.69 3.71 34.30
DIVIDENTS 12.40 14.59 18.64 297.72 26.19
INTEREST 40.83 26.99 17.36 15.15 8.39
ACCURED
PROVISIONS 388.07 616.20 662.03 376.45 1198.41
OTHER LIABLITIES 921.36 822.06 1210.59 1764.09 2873.36
TOTAL(B) 4672.13 4303.31 6018.98 7096.74 10778.8
6
Net working capital(A- 3962.36 5513.9 4015.51 2503.75 941.95
B)
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
(Rs in Crores)
PARTICULARS 2014-15 2015-16 Increase Decrease
CURRENTS
ASSETS(A)
Cash & balances 92.66 86.67 - 5.99
Balances with bank and 228.67 252.91 24.23 -
money at call and short
notice
42
Advances 500.78 534.57 33.79 -
Other assets 38.44 37.44 - 1.00
Total (A): 8660.56 911.60 - -
CURRENT
LIABILITIES(B)
Deposits 345.41 405.77 - 60.35
Other liabilities 83.20 89.07 - 5.87
Total (B): 428.62 494.84 - -
WORKING CAPITAL 431.94 416.76 - -
(A-B)
Increase in working 15.86 15.86 -
capital
From the above table it is clear that there is increase in net working capital position of the
bank during 2015-16 amounting to 15.18cr.
The incrementing the working capital is noticed from the each individual asset/liabilities,
increase/decrease. The increment or decrement is detailed below:
1. The balances with bank and money at call and short notice have been increased
to 10.60% and advances to 6.75%. The cash and bank balances have been
decreases to 6.47% and other assets to 2.61%.
2. At the same the deposits have been increased to 17.47% and other liabilities to
7.06% which resulted in overall decrease in working capital.
43
Other assets 37.44 45.16 7.71 -
Total (A): 911.6 995.9 - -
CURRENT
LIABILITIES
Deposits 405.77 569.099 - 163.32
Other liabilities 89.07 101.85 - 12.78
Total (B): 494.84 670.95 - -
WORKING CAPITAL 416.76 324.98 - -
(A-B)
Increase in working 91.78 91.78 -
capital
Total: 416.76 416.76 176.10 176.10
From the above statistics it is clear there was increase in net working capital position of
the bank during 2016-17 amounting to 91.78Cr.
There was an increment in cash balances and other assets to 31.72% and 20.61%
respectively, during the financial year.
Balances with bank and money at call and short notice and advances have also increased.
We can see growth in the deposits of the bank which indicates that bank was successful in
collecting more deposits from its current and new customers.
We can see that bank’s working capital has increased when compared to that of previous
years indicating that the bank’s management have improved.
44
Advances 569.69 124.59 445.1
Other assets 45.16 56.31 11.15 -
Total (A): 995.9 475.29 - -
CURRENT
LIABILITIES
Deposits 569.09 667.21 - 98.12
Other liabilities 101.85 125.72 - 23.86
Total (B): 670.95 792.93 - -
WORKING 324.98 317.64 - -
CAPITAL (A-B)
decrease in 7.33 -
working capital
From the above table it is clear that there was decrease in net working capital position
during 2017-18 amounting to 7.33Cr.
There was decrement in balances with bank and money at call and short notice by
36.23%.
Decrease in advances by 78.13%.
Cash balances and other assets have also increased.
We can see growth in the deposits of the bank which indicates that bank was successful in
collecting more deposits from its current and new customers.
Bank’s working capital have been decreased when compared to previous year due to
decrease in balances with bank and money at call and short notice indicating poor
performance of the bank.
(Rs in crores).
PARTICULARS 2017-18 2018-19 Increase Decrease
CURRENTS
ASSETS
Cash & balances 124.2 139.68 15.48 -
Balances with bank 170.18 205.32 35.14 -
and money at call and
short notice
Advances 124.59 139.78 15.97 -
45
Other assets 56.31 65.12 8.81 -
Total (A): 995.59 549.9 - -
CURRENT
LIABILITIES
Deposits 569.09 631.27 - 62.69
Other liabilities 125.72 150.62 - 24.9
Total (B): 670.95 781.89 - -
WORKING 324.98 231.99 - -
CAPITAL (A-B)
decrease in working - 61.81 - 61.81
capital
From the above table it is clear that there was decrease in net working capital during
2018-19 compared to previous year 2017-18 amounting to 61.81Cr.
The decrement in the working capital is notified from each individual asset/liabilities,
increase/decrease. The increment or decrement is detailed below:
1. The balances with bank and money at call and short notice have been increased
to 11.2% and advances.
2. At the same time the deposits and other liabilities have been increased which
resulted in overall decrease in working capital.
LIQUIDITY RATIO
CURRENT RATIO:
Current assets
Current ratio = -----------------------
Current liabilities
CURRENT
YEARS CURRENT ASSETS CURRENT RATIO
LIABILITIES
46
2018-19 1172.81 1077.86 1.09
INTERPRETATION:
The ideal ratio is 2:1.The firm’s current Ratio is highest in 2016-2017 i.e. 2.28 and
lowest in 2018-2019 i.e. 1.09, It ability to meet current liability is good and has greater Short-
term solvency.
QUICK RATIO:
Quick Assets.
Quick Ratio = -------------------------
Current Liabilities.
47
Chart No. 3.02
INTERPRETATION:
The ideal ratio is 1:1. The firm’s Quick ratio is highest in 2015-2016 i.e. 1.75 and lowest
in 2018-2019 i.e. 0.82.Quick Ratio exclude inventories as they are deemed to be less liquid
component as such firms liquidity position is good.
LEVERAGE RATIO
DEBIT-EQUITY RATIO:
48
Chart No. 3.03
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
The ideal ratio is 2:1; the firm’s debt-equity ratio is highest in 2018-2019 i.e., 1.04 and
lowest in 2014-2015 i.e., 0.35. Lower is considered safer. Lower the degree of equity higher the
degree of protection enjoyed by creditors.
PROPRIETARY RATIO:
Prop Fund or Net Worth
Proprietary Ratio = -----------------------------------
Total Assets
PROPRIETARY
YEAR NET WORTH TOTAL ASSETS
RATIO
49
Chart No:3.04
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
The ideal ratio is 0.5. Is the satisfactory proprietary ratio. The firm’s proprietary ratio is
highest in 2014-2015 i.e., 0.56 and lowest in 2018-2019 i.e. 0.39. Higher is safer.
50
Chart No. 3.05
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
The ideal ratio is (0.67 or less than 1). The firm’s fixed assets ratio is highest in 2018-
2019 i.e., 0.99 and lowest in 2015-2016 i.e., 0.86. This ratio indicates whether the firm has raised
adequate long-term funds to meet its fixed assets requirement.
51
Chart No. 3.06
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
The firms total debt ratio is highest in 2018-2019 i.e. 1.58 and lowest in 2014-2015 i.e.,
0.79. This ratio shows the relationship between external equity (Long term liabilities + current
liabilities) and external equity.
INTEREST COVERAGE RATIO:
PBIT
Interest Coverage Ratio = -----------------------
Interest
Table No.3.18 INTEREST COVERAGE RATIO
INT.COVER-
YEARS PBIT INTEREST
AGE RATIO
52
Chart No.3.07
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATIONS:
The PBIT should be ideally 6 to 7 time’s fixed interest charges. Interest coverage ratio is
highest in 2015-2016 i.e., 13.45 and lowest in 2014- 2015 i.e., -5.64. Highest is considered it can
easily meet its interest burden even PBIT suffer a decline.
ACTIVITY RATIO
INVENTORY TURNOVER RATIO:
Net sales
Inventory Turnover Ratio = ------------------
Closing Stock
Table No. 3.19: INVENTORY TURNOVER RATIO
INV.TURNOVER
YEARS NET SALES CLOSING STOCK
RATIO
53
Chart No. 3.08
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
The ideal ratio is (Higher or 8 times). The ratio is highest in 2015-2016 i.e., 71.58 &
lowest in 2016-2017 i.e., 45.14. The high inventory turnover indicates efficient management of
inventory.
54
c
Chart No. 3.09
INTERPRETATION:
The ratio is highest in 2018-2019 i.e., 8.55 & lowest in 2015-2016 i.e. 4.45. Highest ratio
shows the efficient management of credit.
CREDITOR TURNOVER RATIO:
Net Purchases
Creditor Turnover Ratio = --------------------------------
Avg.Creditor Period
55
Chart No.3.10
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
The ideal ratio is (lower is the best). This ratio is highest in 2016-2017 i.e., 1.95. The
lowest in 2014-2015 i.e., 0.18. This ratio explains velocity with which creditors are paid. High
ratio indicates that creditors are not paid in times.
56
Chart No.3.11
INTERPRETATION:
The higher is the best. The working capital turnover ratio is highest in 2018-2019 i.e.,
25.67 and lowest in 2015-2016 i.e., 3.93. The higher is safer.
57
Chart No.3.12
INTERPRETATION:
Fixed assets turnover ratio is highest in 2012-2013 i.e., 1.16 and lowest in 2018-2019 i.e.,
0.49. The higher the ratio the higher ratio is the better is the performance on the other hand a low
ratio indicates that the fixed assets are not being effectively used.
INVENTORY TO NET WORKING CAPITAL:
Closing inventories
Inventory to Net Working Capital = ------------------------------
Net Working
Table No. 3.24: INVENTORY TO NET WORKING CAPITAL
INV.TO NET
CLOSING NET WORKING
YEAR WORKING
INVENTORIES CAPITAL
CAPITAL
58
Chart No. 3.13
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
Inventory to net working capital is highest in the year 2018-2019 i.e., 3.06 & lowest in
the year 2015-2016 i.e., 0.41. This analysis indicates that the ratio is always less than 1, which is
a healthy sign as to management of inventory in terms of working capital.
Current Asset
Current Assets Turnover Ratio = ----------------------
Sales
59
Chart No.3.14
INTERPRETATION:
The current assets turnover ratio is shows in times. This ratio is highest in the year 2018-
2019 i.e., 0.48 & lowest in 2014-2015 i.e., 0.37. This ratio is use to find out the current assets
and also find out sales.
PROFITABILITY RATIO
NET PROFIT RATIO:
60
Chart No3.15
Source Name: Annual Reports of Anika Bajaj Auto Agency,Wgl
INTERPRETATION:
This ratio is shows that the higher is the better. This ratio highest in 2014-2015 i.e., 8.27
and lowest in 2018-2019 i.e., 5.38. There is a high net profit in 2016-2017 which means there
is efficiency of production, administration, selling financing, pricing and tax management.
RETURN ON ASSETS:
Net Profit after Interest and Tax
Return on Assets = -------------------------------------------------- X100
Total Assets
61
Chart No. 3.16
INTERPRETATION:
This ratio is shows that the higher is the better. This ratio highest in 2015-2016 i.e., 5.83
& lowest in 2018-2019 i.e., 2.17. Here the profitability ratio is measured in terms of relationship
between net profit and net assets.
CONCLUSION
1. The net working capital requirements of the company indicate slight (or) abnormal
fluctuations. The net working capital decreased in the year 2017-2018 by 3020.42,when
compared to 2015-2016.
2. Statement of change in working capital shows increasing trend for the years 2014-2019,
which is a good sign.
3. In Comparative balance sheet the current asset shows increasing trend and the current
liability shows decreasing trend. But in 2018-2019 there is a slight change.
4. The current assets are higher than current liabilities. The company has better liquidity
position.
5. Debt-equity ratio is low which means greater degree of protection enjoyed by the
creditors.
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6. The fixed assets turnover ratio is high and there is greater efficiency in assets
management and utilization.
7. Working capital turnover ratios are high. It is due to the effective management of working
capital.
SUGGESTIONS
The following are suggestions based on the analysis of balance sheet, working capital offered
from ensuring effective management of working capital.
1. Current ratio Working capital requirements of the company are to be estimated well
before the commencement of final year, so that performance is evaluated and corrective
steps can be initiated.
2. Anika Bajaj has focused the attention to reduce the investment in loans and advances and
sundry debtors. In the area surplus are pure spare have been identified in various projects.
4. The company has to adopt the inventory control technology such as ABC analysis and
ordering level.
5. The company must prepare the cash budget in advance for the next account period.
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6. The overall company performance is extremely well and over all working capital is also
satisfactory.
BIBLIOGRAPHY
A) BOOKS
B) JOURNALS
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C) WEBSITES
www.google.com
www.anikabajaj.com.
www.wikianikabajaj.com
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