INTRODUCTION

Financial Management is that managerial activity which is concerned with the planning and controlling of the firm s finance. Finance is one of the foundations of all kinds of economic activities. Finance is the life-blood of a business. The financial management study deals with the process of procuring necessary financial resource and their judicious use with a view to maximizing the value of the firm and there by the value of the owners i.e. equity share holders in a company. Practicing managers are interest in this subject because among the most crucial decisions of the firm are those which relate to finance, and an understanding of the theory of financial management provides them with conceptual and analytical insights to make those decisions skillfully.

FINANCIAL MANAGEMENT
Financial Management emerged as a distinct field of study at the turn of this century many eminent persons defined it in the following ways.

DEFINITIONS
According the BONNEVILE AND DEWEY: Financing consists in the rising, providing and managing of all the money, capital or funds of any kind to be used in connection with the business .

According to Prof.EZRA SOLOMAN: Financial Management is concerned with the efficient use of any important economic resource, namely capital funds .

FINANCE FUNCTIONS
It may be difficult to separate the finance functions from production, marketing and other functions, but the functions themselves can be readily identified. The functions of raising

funds investing them in assets and distributing returns earned from assets to shareholders are respectively known as. 1. Long term assets-mix (or) Investment Decision 2. Capital Mix (or) Financing Decision 3. Profit allocation (or) Dividend decision 4. Short term asset Mix (or) Liquidity Decision

GOALS OF FINANCIAL MANAGEMENT

y y y y Maximize the value of the firm to its equity shareholders. Maximization of profit Maximization of earnings per share. Maximization of return on equity (defined as equity earnings/net worth)

INTRODUCTION TO WORKING CAPITAL

Working capital is often referred to as lifeblood of an organization of its the money required for carrying on day today activities of an organization. The management of current assets is similar to that of fixed assets in the sense that in both cases a firm analysis their effects on its return and risk.

The management of fixed and current assets, however, differs in three important ways: first, in managing fixed assets, time is very important factor; consequently, discounting and compounding techniques play a significant role in capital budgeting and a minor one in the management of current assets. Second, the large holding of current assets, especially cash, strengthens the firms liquidity position (and reduce risk ness), but also reduces the overall profitability. Thus, a risk-return trade off is involved in holding current assets. Third, levels of fixed as well as current assets depend upon expected sales fluctuations in the short run. Thus the firm has a greater degree of flexibility in managing current assets.

Working capital is probable the often used financial management concepts verbally and misused practically. Independent of the nature of an organization, its constitution and activity requires working capital. Many organizations have failed or become sick mainly due to the mismanagement of this working capital .

MEANING AND DEFINITION

Working capital management or administration of all aspects of working capital, which manage the firm s current assets and current liabilities in such a way that a satisfactory level of working capital is maintained.

According to smith working capital management is concerned with the problem that arise in attempting to manage the current assets, current liabilities, and the inter-relationship that exists between them

TYPES OF WORKING CAPITAL

There are two types of working capital. They are: I) on the basis of concept 1) Gross working capital. 2) Net working capital.

1. Gross working capital

Refers to the firm s investment in current assets are the assets, which can be concerned into and with in an accounting year (or operating cycle) and include cash, short-term securities, debtors (accounts receivables or book debts) bills receivable and stock (inventory)

Gross working capitals points to the arranging of funds to finance current assets.

2. Networking capital
Refers to the difference between current assets and current liabilities. Currents liabilities are those claims of outsiders, which are expected to nature for payment within accounting years and include creditors (accounts payable). Bills Payable and outstanding expenses. Networking capital can be positive or negative. A positive networking capital will arise when current assets, exceed current liabilities and a negative working capital will arise when current liabilities are in excess of current assets.

II) On the basis of time 1) Permanent/fixed/fluctuating working capital 2) Temporary working capital

1) Permanent working capital

The need for current assets arises because of the operating cycle. The operating cycle is a continuous process and therefore, the need for the current assets is felt constantly. But the magnitude of current assets needed is not always a minimum level of current assets, which is continuously required by the firm to carry on its business operations. This minimum level of current assets is referred to as permanent or fixed working capital.

EXAMPLE: - Every firm has to maintain a minimum level of raw materials, work-in-progress, finished goods and cash balance. This minimum level of current assets is called permanent or fixed working capital as this part of capital is permanently blocked in current assets. As the business grows, the requirements of permanent working capital also increase due to the increase in current assets.

Temporary Or Fluctuating

Permanent Time

2. Temporary working capital

Depending upon the changes in production and sales, the need for working capital over and above permanent working capital, will have in be maintained to support the peak proceeds of sale and investment in receive may also increase during such periods. On the other hand, investment in raw material, working in progress and finished goods will fall if the market is slack.

The extra working capital needed to support the changing production and sales activities is called fluctuating, or variable or temporary working capital. The firm to meet liquidity measurement that will last only temporarily creates temporary working capital.

Temporary Or Fluctuating

Permanent

Time

THE NEED OR OBJECTIVES OF WORKING CAPITAL

The need for working capital to run day -to -day business activities cannot be over emphasized, we will hardly find business firm, which doesn t require any amount if working capital indeed, and firms differ in their requirements of the working capital. The uses of working capital management are: 1. To pay wages and salary. 2. It helps to the purchase of raw materials, components and spares. 3. It helps to incur day-to-day- expenses and overhead costs such as fuel, power, and office expenses etc. 4. It also to meet the selling cost as packing, advertising etc. 6

5. It provides credit facilities to the customer. 6. It helps to maintain the inventories of raw material, working progress, stores and spares and finished stock.

INDUSTRY PROFILE
Sugar cane is one of the important crops for the Indian farmer. Sugar and Jiggery are the main products that we get from Sugarcane. Other products such as Biogases for industrial use, Molasses for distillery, filter cake, Mud as an organic manure and green leaves with tops for cattle feed are also available as by products because of it s multi uses Sugarcane has played crucial role in Indian economy with rs.20000 cores turnover and width 450 mills providing assistance to 45 million sugar cane farmers and 2 million Sugarcane farmers and 2 million workmen directly and indirectly.

In A.P. sugar industry is an important Agro-based industry, occupying the second position next to text tile industry. The annual cultivated area is about 1.99 lack hectares with a yield of 149.45 lacks of tones during 96-97. At present, there are 36 sugar factories in the state and 50% of them are in co-operative sector. The co-operative sugar units in the states have been suffering due to lack of adequate cane irrigation facilities, working capital, by-product utilization, excessive employment etc.,. The sugar industries which provide direct employment to about 3 lacks persons of sugar cane followed by Brazil & Cuba. Sugar cane existed in India from 3000 B.C. The centre place of origin of sugar cane regarded as Northeastern Indian, from sugar cane seems to have been to China and other places by early travelers and no man s between 1800 and 1700 B.C. later. It was penetrated to Philippines, Jewa and other places. Actually the word sugar derived from a Sanskrit word shakra .

India was the world s largest producer of sugar cane occupies a very pride place in the world. In India, the cultivation of sugar cane is 10,000 miles tones. The average yield, being 56 tones per acre of total cultivating land is occupied by sugar cane cultivation. Sugarcane is grown in almost all part of India, except in colder regions and extreme North Jammu Kashmir, Himachal Pradesh. 8

Area wise distribution of sugar industry in A.P.

S.No

Sector

No. of industries

Costal Area

Rayalaseema

Telangana

1 2 3

Co-operative Public sector Private sector Total

18 7 11 36

12 1 8 21

4 1 2 7

2 5 1 8

The list of Co-operative Sugar factories in A.P. 1. The Chittoor Co-operative sugars ltd, Chittoor. 2. The Chodavaram Co-operative sugars ltd, Chodavaram. 3. The Anakapalle Co-operative sugars ltd, Anakapalle. 4. The Etikuppaka Co-operative agricultural of industrial society ltd, Ethikuppaka. 5. Sir Vijayarama Gajapathi Co-operative sugars ltd. 6. The Amadavalasa Co-operative agricultural industrial society ltd, Srikakulam. 7. The West Godavari Co-operative sugars ltd, Eluru. 8. Palakollu Co-operative agricultural & industrial society ltd, Palakollu. 9. The Thandara Co-operative sugars ltd, Visakapatnam. 10. Nizamabad Co-operative sugars ltd, Nizamabad. 11. Sir Venkateswara Cooperative sugars ltd, Renigunta. 12. The Cuddapah Co-operative sugars ltd, Chennur. 13. The Nandyal Co-operative sugars ltd, Ponnapuram. 14. The Kovur Co-operative sugars ltd, Nellore. 15. Nagarjuna Co-operative sugars mills ltd, Gurzala. 16. Nampaneni Venkata Rao Co-operative sugars ltd, Hanuman Junction. 17. Sri Hanuman Co-operative sugars ltd, Hanuman Junction. 18. Palair Co-operative sugars ltd, Ammagudem.

COMPANY PROFILE
THE CHITTOOR CO-OPERATIVE SUGARS LIMITED is the first agro based major industry in Rayalaseema area. It was first registered on 22.8.1955 under the APSCS Act. Its area of operation comprises of 192 villages in 21 mandals.factory is located along cudalore-karnool national high way NO18, 3 k.m. towards Karnool from Chittoor. It owns 85.96 Acers of land. It was first commissioned on 18.1.1963 with a licensed and installed capacity of 1000 tones cane crushing per a day presently factory is working at an average of 1800-2000 tones a day.

Constitution: Election was stayed to this factoy during April 2000 From then on Wards: The official Board nominated by The Government Consists of:

1. Chittoor collector as person-n charge. 2. Managing Director. The Board of Chittoor Co-operative Sugar Factory Ltd., used to meet frequently from time to time as and when required. Annual general body meetings of the members of the society were held on 29-092000,29-09-2001,29-04-2002,08-09-2003 and 25-11-2003.

At present the strength of employees at various levels: a) Permanent (non seasonal) b) Seasonal permanent c) Consolidate wagers (sessonal) d) Daily wagers (NMR) 68 94 167 244 ----------------Total no.of Employees 573 10

MANAGEMENT
At present the elected board has assumed a charge on 6-4-2000. The present Board of directors as detailed below:-

 President  Board of directors  Employee director

1 14 1

MAJOR DEPARTMENTS: Administrative  Engineering  Manufacturing  Agriculture  Accounts &finance

PRODUCTS
 SUGAR  MOLASSES  CAPITAL STRUCTURE  Original project cost was RS. 128.50 lakhs. It has been funded from following sources:

11

I) Share capital from

RS. Lakhs

a)cane grower members b)state government

8.50 25.00 -------------------33.50 -------------------

II) Term loans

RS.Lakhs

 a)IFCI New Delhi  b)LICI Bombay

75.00 20.00 -------------------------128.50 ----------------------------

III)Capital outlay  Land  Buildings  Plant & machinery  Other assets  Per operative expences  Vehicles

Rs. Lakhs 2.38 5.90 109.34 5.77 4.00 0.96 ----------128.35 -----------

12

PRODUCT PROFILE

Sugar Cane
Sugar cane cultivated by the growers or promising varieties in terms of sugar content and yield. Cultivation techniques maturity of (decided by the cane personnel) harvested and supplied to the factory in trucks fresh less tops and roots. Trucks are weighed with cane on Weigh Bridge and unloaded on the moving cane carrier. Mechanical un-loaders do unloading. Again empty truck is weighed to assertion in the weight of cane unloaded.

Millings
Provided with a tandem of four mills land each mill is provided with three rollers. On the cane carried for cane preparation cane knives driven by motor and followed by a Fibrizer driven steam turbine are provided to chop the cane into small pieces and fiber to make the milling move efficient and to extract maximum juice from the cane. To make this process more effective assured quantity of water is added to Mills. After extraction of juices the waste materials is called bagasse.

Boilers
Provided with 2 nos. of boilers of each water evaporation capacity of 25 Mts. Per hour steam at 300 p sig (21 Kgs). Steam is used for driving the Fibrizer, mills by turbines and generator power, by steam turbine alternator. For boilers main fuel is bagasse. Surplus bagasse is sold to paper industries.

13

Clarification
Juice extracted form sugar cane in mills is weighted in automatic weighing scale. It is preheated in juice heater to 50-750. Then it is limited and sulphieted simultaneously. Juices will be coagulated form and will not settle. To induce settings cheaply and abundantly available positive is to be added i.e. namely time in slurry form, also called milk of lime, by using addition of such alkaline medium is again brought down to natural pH medium by bubo ling of sulphur dioxide gas. This gas is produced in sulphur burners and bubbled in preheated juices. By the aid of compressed air passing through sulphur burners. As such a juice is kept at slightly alkaline medium say 701 to 7.2. Then this treated juice is heated again in other row of juices heaters to 102 C and to send to graver. Graver is a big tank where settling is taking place. Continuously, such juices is sent and drawn from it with the detention time of juices of about 330 hours, in u tube principles.

Evaporation
In graver juices will be well settled and will have a golden yellow color of 7.0pH (Neutral). This clear juice will contain more than 85% of water and the remaining soiled (Sugar Maximum + a little sugar). In evaporators about 75% of water is removed and made syrup. This consists of one vapor cell and is followed by four bodies. Boiling is done under vacuum using exhaust stream from turbines tubes emerging out through tube plates and above this calandria vapor

14

space or shell. Steam circulated through calandreia and heating the outer point of huices is brought well below its origin boiling point. In the vapor cell alone exhaust steam is admitted into the calandria produced vapor to its subsequent body and soon. Vacuum is helping is drawing vapor from the preceding body and this boiling is called multi effect boiling and maximum fuel economy. Thus when juices is emerges out from last body it will be a syrup, losing about 75% of water.

Vacuum filter
Mud settled in graver is taken in rotary filters to extract juices from it and waste is called filter cake sent out and used as manure. Extracted juices is again mixed juices from mills after weighment tank and takes the path of process along with mills juices in acyclic form.

Sulphitation and syrup

The syrup from evaporator last body is again sulphited to beach to get white sugar and sent to pan supply tanks.

Pans
Pan bodies are similar to evaporators in construction with different design. Materials are invidiously boiled in four numbers under vacuum. When the syrup is further boil in pans. When the super saturation point reaches crystals come out its is again boiled up by addition kept in pan and the rest 2 portions sent to receivers. Then again pan is boiled. This process will help growth or crystal as desired by us. Three boiling are bone A, B, C. These are called massecuites. All these mass cuties (sugar + molasses) are purged in centrifugals respectively sugar and molasses are separated. Pans are boiler on vapor produced form vapor cell. 15

Centrifugals
Such made massecuties are dropped in crystallizers (a storage tank with stirring mechanism). From crystallizes taken into centrifugal machines and sugar and molasses separator. Centrifugal machines contain a basket fitted with mesh and screen of small opening and will not allow sugar crystals to pass through but only molasses. When one machine changed with massecuities and spun at 150 RPM molasses gets out and collects in a tank. Sugar remains in basket washed and dried by steam. Then dropped on hopper (to and or) shaking medium sugar will get dry when flowing and galls on sugar grader (fitted with meshes) screened and bagged. Bags weighed on P.O scales of 100kgs. And sent to go down. Molasses got from a massecuites; sugar and molasses form B massescuties and sugar form c massecuites (final) are again boiled in pans in cyclic manner. Molasses got fro c massecuites called final molasses is a waste and sent to storage tanks (Raw material for alcohol industries). Sugar is graded in accordance and large i.e., S-29, S-30. As the demand in the market is for S-30 it is made in the fact.

16

RESERCH & METHODOLOGY

Research Design
A Research Design is the specification of methods and procedures for acquiring the information needed to structure or to solve problem. It is the overall operational pattern or framework of the project that stipulated what information to the collected, from which source by what procedures .

17

NEED FOR THE STUDY

y y

The increasing ratio of current assets to total net assets. Low proportion of inventory in current assets in spite of more number of varieties of raw materials and finished goods.

The annual reports statements explain the various sources from which cash are raised and uses to which are put out. The balance sheet provides only a view of the business.

The operational result provided by the profit & loss A/C, is largely influenced by the availability of funds needs when required.

18

OBJECTIVE OF THE STUDY

This study is mainly focused to examine the short-time financial viability of chittor cooperative sugars as stated below:

y y y y

To analyse the schedule changes in working capital . To estimate the working performance of company through ratio analysis To study the short-term liquidity position of company To suggest necessary methods by which future improvements may be made in its management of working capital.

To evaluate the finacial position of company

19

SCOPE OF THE STUDY

The study is intended to know the financial status required for the chittoor co-operative sugars limited and the study is limited only to financial department. As most of the financial information is considered confidential, the access to the information was restricted.

20

DATA COLLECTION
The study required both primary and secondary data.

PRIMARY DATA
Primary data has been collected by interviewing financial executives who were chosen on the basis of their in depth knowledge and experience in the company. The interviews in nature are under to gain as much information as possible.

SECONDARY DATA
Secondary data was obtained from the past records file and reports of the organization also from other financial statements.

21

TOOLS USED FOR THE STUDY

1.Ratio Analysis
Ratio analysis is defined as the systematic use of ratio to interpret the financial statements so that the strengths weakness of a firm as well as its historical performance and current financial condition can be determined. A single ratio itself does not indicate favorable or unfavorable condition. It should be compared with some standard. Standards of comparison may consist of 1. Ratios calculated from the past financial statements of the same firm. 2. Ratios developed using the projected or Performa financial statement of the same firm. 3. Ratios of some selected firms, especially the most progressive and successful. At the same point of time. 4. Ratios of the industry to which the firm belongs.

Stages for Ratio Analysis:

The following procedure is generally followed, while analyzing the financial statements through ratio-analysis A) Arrangement of data B) Classification of ratios C) Interpretation of Calculated ratios D) Projections through ratios

22

Advantage or Importance of Ratio Analysis:

1. The Ability of corporation to meet its current obligations i.e., liquidity position. 2. Ratio analysis provides data for inter firm comparison. Ratios highlights the factors associated with successful & unsuccessful firms corporations. 3. The overall operating efficiency & performance of the corporation.

Limitations to Ratio Analysis

1. Standards for Comparison Ratios of a company have meaning only when they are compared with some standards and it is always a challenging job to find and adequate standard.

2. Company difference Situation of two companies are never same: Similarly the factors influencing the performance of a company in one year may change in another year. Thus, the comparison of the ratios of two companies becomes difficult and meaningless when they are operating in different situations. 3. Price level change The inter presentation and comparison of ratios are also rendered invalid by the changing value of money. A change in the price level can seriously affect the validity of comparisons of ratios computed for different time periods. 4. Standards for Comparison Ratios of a company have meaning only when they are compared with some standards and it is always a challenging job to find and adequate standard.

23

5. Different definitions of variables Comparisons are also made difficult due to difference in definitions. The terms like gross profit. Operating profit.net profit etc. has not got precise definitions and there is a conferrable diversity in practice as to how they should be measured 6. Changing Situations A balance sheet may fait to reflect the average or typical situation as it is prepared as of one moment of time. It ignores short-term fluctuations in assets and equities that may occur with in the period covered by the two balance sheet dates. 7. Differences in accounting methods Various differences are found among the accounting methods used by different companies. Which variously affect the comparability of financial statements. recording and valuing assets. Write-offs. company. Methods of

Costs. Expenses etc differ from company to

Current Ratio
This is the most widely used ratio. It is the ratio of current assets and current liabilities. It shows a firm s ability to cover its current liabilities with its current assets. Generally 2: 1 is considered ideal for a concern Le. Current assets should be twice of the current liabilities. If the current assets are two times of the current liabilities, there will be no adverse effect on business operations when the payment of current liabilities is made. If the ratio is less than 2, difficulty may be experienced in the payment of current liabilities and day to day operation of the business may suffer if the ratio higher then to it is

24

very comfortable for the creditor but, for the business concern, it is indicator of the idle funds a lack of enthusiasm for work. It is calculated as follows:

Current Assets Current Ratio = ---------------------------------Current Liabilities

Quick Ratio
This is the ratio of liquid assets to liquid liabilities. It shows a firm s ability to meet current liabilities with its most liquid or quick assets. The standard ratio 1: 1 is considered ideal ratio for a concern. Liquid assets are those, which can be easily converted into cash within a short period of time without loss of value. This ratio can be calculated by using the formula

Quick Assets Quick Ratio = -----------------------------Current Liabilities Quick Ratio = Quick Assets (inventory + prepaid expenses)

Absolute liquidity or cash ratio

The cash ratio is the cash & bank balance to the current liabilities.

Absolute Liquidity Assets Absolute Liquidity Ratio = ------------------------------------Current Liabilities 25

Inventory Turnover Ratio

This ratio, also known as Stock Turnover Ratio, establishes relationship between cost of goods sold during a given period and the average amount of inventory held during that period. This Ratio reveals the number of times finished stock is turned over during a given accounting period. Higher the ratio, the better it is because it shows that finished stock rapidly turnover. On the other hand, a low stock turnover ratio is not desirable because it reveals the accumulation of obsolete stock, or the carrying of too much stock. The ratio is calculated as follows

Net Sales Inventory Turnover ratio = ---------------------Inventory

Working Capital Turnover Ratio

This ratio measures the relationship between working capital and sales. The ratio shows the number of times the working capital results. In sales working capital as usual is the excess of current assets over the current liabilities. Sales Working capital turn over ratio = -----------------------------Net Working Capital

26

2.SCHEDULE OF CHANGES IN WORKING CAPITAL

Since net working capital is excess of current assets over current liabilities, the increase or decrease in the net working capital can be found out by comparing the current assets and current liabilities contained in the balance sheets of two following dates.For this purpose, a statement is prepared which is called statement or schedule of changes in net working capital. This statement helps to identify the change in position of the working capital. While preparing the statement of changes in working capital, the following points are taken into account.

* Increase in current assets , increase in net working capital * Decrease in current assets , decrease in net working capital * Increase in current liabilities , decrease in net working capital * Decrease in current liabilities, increase in net working capital

The statement or schedule of changes in net working capital can be prepared by using one of the following forms.

1. Using only current account The statement or schedule of changes in net working capital can be prepared by using only current account, viz. account of current assets and current liabilities. While preparing the statement, the current assets and current liabilities of the previous year are compared with those of the current year and changes (increase or decrease) therein are determined. If the total of increase is more than that of decrease, there is an increase in net working capital, or vice verse. 2. Using both current and non-current accounts The statement or schedule of changes in net working capital can also be prepared by using both current as well as non-current accounts. Current account is the account of current assets and current liabilities and non-current account of non-current assets and non-current liabilities and owner's equity. Increase in an item of current assets or decrease in an item of current liabilities 27

from previous year to this year is debited, while increase in an item of current liabilities or decrease in an item of current assets is credited to current account. On other hand, increase in an item of non-current assets or decrease in an item of non-current liabilities from the previous year to this year is debited, while increase in an item of non-current liabilities and owner's equity and decrease in an item of non-current assets is credited to non-current account.

The preparation of statement of changes in networking capital under this method is advantageous as compared to the previous method as it is easy to prepare funds flow statement there from.

28

LIMITATIONS OF THE STUDY

y It is based on the data supplied by the factory personnel.

Since only 5 years data is used for the analysis the out come may not be generalized.

Due to limitations of time, it was unable to go far a depth study into the subject.

29

30

DATA ANALYSIS

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2005-06

Effect of working capital PARTICULARS CURRENT ASSETS: Cash on hand Balances with bank Interest Receivable Closing stock Total current assets -A LIABILITIES: Out standing Interest Total current liabilities -B Working Capital (A-B) Net decrease in working Capital 290625928.30 290625928.30 74694000.95 74694000.95 4429829.45 4429829.45 290625928.30 6094477.90 6094477.90 220774033.80 69851894.50 69851894.50 -----------1664648.45 42159.91 494953.16 1826488.57 292692156.20 295055757.80 1283980.24 4095239.26 1826488.57 219662803.70 226868511.70 1241820.33 3600286.10 ---------------------------------------------------------73029352.50 2005 2006 Increase Decrease

INTERPRETATION:
The net working capital requirement of the company during the year 2005 has been increased in 2006, and the net working capital of the company was recorded RS. 22,07,74,033.80 and it was been increased to Rs. 29,06, 25,928.30 in the year 2005.

31

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2006-07

Effect of working capital PARTICULARS CURRENT ASSETS: Cash on hand Balances with bank Interest Receivable Closing stock Total current assets -A LIABILITIES: Out standing Interest Total current liabilities -B Working Capital (A-B) Net decrease in working Capital 220774033.80 220774033.80 145170678.90 145170678.90 6094477.90 6094477.90 220774033.80 27190688.40 27190688.40 87389305.10 133384728.70 133384728.70 -----------21096210.50 1283980.24 4095239.26 1826488.57 219662803.70 226868511.70 22575.20 15881189.48 1826488.57 96849740.27 114579993.50 -----------11785950.22 ----------------------1261405.04 ----------------------122813063.40 2006 2007 Increase Decrease

INTERPRETATION:
The net working capital requirement of the company during the year 2006 has been increased in 2007, and the net working capital of the company was recorded RS. 8,73,89,305.10 and it was been increased to Rs. 22,07,74,033.80 in the year 2006.

32

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2007-08

Effect of working capital PARTICULARS CURRENT ASSETS: Cash on hand Balances with bank Interest Receivable Closing stock Total current assets -A LIABILITIES: Out standing Interest Total current liabilities -B Working Capital (A-B) Net Increase in working Capital 91362817.70 91362817.70 17308622.60 17308622.60 27190688.40 27190688.40 87389305.10 3973512.60 40525798.40 40525798.40 91362817.70 3973512.60 -----------13335110.00 22575.20 15881189.48 1826488.57 96849740.27 114579993.50 1878931.06 18140037.49 1826488.57 110043159.00 131888616.10 1856355.86 2258848.01 -----------13193418.73 ------------------------------------------------2007 2008 Increase Decrease

INTERPRETATION:
The net working capital requirement of the company during the year 2008 has been increased in 2007, and the net working capital of the company was recorded RS. 8,73,89,305.10 and it was been increased to Rs. 9,13,62,817.70 in the year 2008.

33

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2008-09

Effect of working capital PARTICULARS CURRENT ASSETS: Cash on hand Balances with bank Interest Receivable Closing stock Total current assets -A LIABILITIES: Out standing Interest Total current liabilities -B Working Capital (A-B) Net increase in working Capital 173476293.40 264839111.10 264839111.10 194598290.50 173476293.40 194598290.50 40525798.40 40525798.40 91362817.70 49024988.90 49024988.90 264839111.10 -------------8499190.50 1878931.06 18140037.49 1826488.57 110043159.00 131888616.10 141218.80 7254943.14 1826488.57 304641449.50 313864100.00 ---------------------------------------194598290.50 1737712.20 10885094.35 --------------------------2008 2009 Increase Decrease

INTERPRETATION:
The net working capital requirement of the company during the year 2009 has been increased in 2008, and the net working capital of the company was recorded RS. 9,13,62,817.70 and it was been increased to Rs. 26,48,39,111.10 in the year 2009.

34

SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2009-10

Effect of working capital PARTICULARS CURRENT ASSETS: Cash on hand Balances with bank Interest Receivable Closing stock Total current assets -A LIABILITIES: Out standing Interest Total current liabilities -B Working Capital (A-B) Net Decrease in working Capital 264839111.10 10414059.60 264839111.10 10414059.60 23105387.08 23105387.08 49024988.90 49024988.90 264839111.10 46928301.64 46928301.64 254425051.50 2096687.26 -----------141218.80 7254943.14 1826488.57 304641449.50 313864100.00 95082.92 17849583.41 1826488.57 281582198.30 301353353.20 -----------10594640.27 ----------------------46135.88 ----------------------23059251.20 2009 2010 Increase Decrease

INTERPRETATION:
The net working capital requirement of the company during the year 2009 has been increased in 2010, and the net working capital of the company was recorded RS. 25,44,25,051.50 and it was been increased to Rs. 26,48,39,111.10 in the year 2009. 35

RATIO ANALYSIS

Over several years scientific tools have been evolved for determine optimum level of working capital online assessment of each of the components of current assets for selective application of management control. Undisputedly the ratio analysis occupies place of prime importance. Ratio are complied and studied for profitability assessment of financial position sufficiency of working capital strategies perused by the organization short term and long term solvency liquidity etc. I would deal with some of the predominant rations more relevantly applicable net working capital management studies.

1.CURRENT RATIO
Current ratio indicates ability of the company to meet the current obligation i.e., the current assets must be sufficient to pay as and when the latter matrices. The standard ratio is 2:1, the current ratio is calculated by using the formula:

Current assets Current ratio = -------------------------Current liabilities

36

YEAR 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

CURRENT ASSETS 23,33,30,395.13 12,09,66,623.21 14,13,26,040.41 32,30,19,288.99 31,32,95,829.13

CURRENT LIABILITIES 18,90,06,552.17 14,22,10,762.18 14,78,60,117.24 20,38,85,067.19 21,93,27,902.79

RATIO 1.234 0.850 0.955 1.584 1.428

1.6 1.4 1.2

1 0.8 0.6 0.4 0.2 0 2005-06 2006-07 2007-08 2008-09 2009-10

YEARS

INTERPRETATION The current ratio is below satisfactory level of 1:58 during the year 2005-2006 and the year 2006-2007 above the satisfactory level. However there is a decrease during the years 2007-2008 to 2009-2010 the decrease in the current ratio indicates bad trend of company.

RATIOS
2010 2009 2008 2007 2006

37

2.QUICK RATIO
Quick ratio are acid test ratio ignores less liquidity assets like inventory. This takes account readily available cash and other assets which standard is ratio is1:1. The general are quickly converted into cash. The

principle of quick ratio is as follows:

Liquid Assets Quick ratio = -------------------------------Current liabilities

YEAR 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

QUICK ASSETS 1,36,67,591.83 2,44,16,882.94 2,83,90,812.06 1,86,38,461.57 3,39,59,496.91

CURRENT LIABILITIES 18,90,06,552.17 14,22,10,762.18 14,78,60,117.24 20,38,85,067.19 21,93,27,902.79

RATIO 0.072 0.169 0.192 0.091 0.154

38

0.2 0.18 0.16 0.14 0.12 5th Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr

RATIOS

0.1 0.08 0.06 0.04 0.02 0 2005-06 2006-07 2007-08 2008-09 2009-10

YEARS
INTERPRETATION The Quick ratio is below satisfactory level of 0:072 during the year 2005-2006 and the year 2006-2007 above the satisfactory level. However there is a increase during the years 20072008 this year position is 2008-2009 to 2009-2010 the increase in the Quick ratio indicates

satisfy trend of company.

3.INVENTORY TURNOVER RATIO

Turnover ratio is also known as stock velocity. This ratio is calculated to consider the adequacy of the quantum of capital and its institution for investing in inventory. A firm must have reasonable stock in caparison to sales. It is the ratio of cost of sales and average inventory of. This ratio helps the financial managers to calculate inventory policy. This ratio reveals the number of times finished stock is turned over during a given accounting period. The ratio is used for measuring the profitability. These are the various ways in which stock turnover ratio may be calculated. 39

Net sales Inventory turnover ratio = -------------------------------Average Inventory

YEAR 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

NETSALES 20,14,86,573.36 13,05,17,436.90 9,66,54,360.90 12,37,19,616.75 36,88,53,566.89

AVERAGE INVENTORY 23,41,47,889.610 13,75,97,979.610 8,31,65,010.425 10,30,03,384.815 18,47,71,625.020

RATIO 0.860 0.948 1.162 1.201 1.996

2 1.8 1.6 1.4 2010 2009 2008 2007 2006

RATIOS

1.2 1 0.8 0.6 0.4 0.2 0 2005-06 2006-07 2007-08 2008-09 2009-10

YEARS

40

INTERPRETATION The inventories are decreased in 2005-2006,2006-2007 and 2007-2008, the ratio is increases 2008-2009 and if decreases in2009-2010.

4.CURRENT ASSETS TURNOVER RATIO

Current assets turnover ratio indicates the extent to which the investments in current assets contribute towards sales. It comported with a previous period. It indicates whether the investment is fixed assets has been judicious or not.

Current assets turnover ratio=

Net Sales ---------------------Current Assets

YEAR 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

NET SALES 20,14,86,573.36 13,05,17,436.81 9,66,54,360.90 12,37,19,616.75 36,88,53,566.89

CURRENT ASSETS 23,37,61,514.16 12,09,66,623.21 14,13,26,040.41 32,30,19,288.99 31,32,95,829.13

RATIO 0.861 1.078 0.683 0.383 1.177

41

1.2 1 0.8 0.6 0.4 0.2 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010 2009 2008 2007 2006

RATIOS

YEARS

INTERPRETATION The ratio is increasing continuously from 2005-2006 to 2006-2007 and after year20072008 to 2009-2010 it increased. It indicates that the current assets were used.

5.CASH POSITION RATIO

Cash in the most liquid asset, a financial analyst may examine the ration of cash and its equivalent to current liabilities. Trade investment or marketable securities are equivalent of cash, therefore, they may be included in the computation of cash position ratio. 42

Cash Position Ratio=

Cash+ marketable securities --------------------------------------------Current liabilities

YEAR 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

CASH+MARKETA-BLE SECURITIES 53,79,219.50 1,59,03,764.68 2,00,18,991.55 79,51,888.86 4,56,44,654.96

CURRENT LIABILITIES 18,90,06,552.17 14,22,10,762.18 14,78,60,117.24 20,38,85,067.19 21,93,27,902.79

RATIO 0.028 0.111 0.135 0.039 0.208

0.25

0.2

RATIOS

2010 0.15 2009 2008 0.1 2007 2006 0.05

0 2005-06 2006-07 2007-08 2008-09 2009-10

YEARS
INTERPRETATION The cash position ratio is inadequate as there are ups and downs during the year. The above ratio indicates that the company is unable to quickly realize its current liabilities it is not good enough.

43

6.WORKING CAPITAL TURNOVER RATIO

Working capital of a concern is directly related to sales. The current assets like debtors, bills receivable, cash, and stock etc., change with the increase or decrease in sales. The working capital is taken as:

Working capital =current assets-current liabilities

This ratio indicates the velocity of the utilization of net working capital. This ratio indicates the number of times the working capital is turned over in the course of a year. The ratio measures the efficiency with which the working capital is being used by a firm. A higher ratio indicates the efficient utilization of working capital and the low ratio indicates inefficient utilization of working capital. SALES WORKING CAPITAL TURNOVER RATIO = ------------------------------NET WORKING CAPITAL

Year

NETSALES

NET WORKING CAPITAL

RATIO

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

20,14,86,573.36 13,05,17,436.81 9,66,54,360.90 12,37,19,616.75 36,88,53,566.89

4,43,23,842.96 2,12,44,138.97 1,35,34,076.83 11,91,34,221.80 9,39,67,926.34

4.545 6.143 7.141 1.038 3.925

44

8 7 6 2010 5 4 2009 2008 2007 2006 2 1 0 2005-06 2006-07 2007-08 2008-09 2009-10

RATIOS

YEARS

INTERPRETATION This ratio indicates the number of times the net sales met with the working capital for the year. The turnover of the working capital has highly increasing from 2005-2006 to 2007-08.

7.TOTAL ASSET TURNOVER RATIO

This ratio indicates the sales generated per rupee of investment in total assets. Althought fixed assets are directly concerned with the generation of sales. But other assets also contribute to the production and sales activities of the firm. The firm must manage its total assets efficiency and should generate maximum sales through their proper utilization. 45

The total assets turnover is used know how many times the total assets are being converted into sales. If sales are not available cost of goods is to be considered. It shows in how many times the total sales are being concerted into total assets. The ratio is calculated by dividing the cost of goods sold as sales by total assets. The general principle for the calculation of this as follows Sales Total assets turnover ratio = -----------------Total assets

YEAR 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

NETSALES 20,14,86,573.36 13,05,17,436.81 9,66,54,360.90 12,37,19,616.75 36,88,53,566.89

TOTALASSETS 23,33,30,395.13 12,09,66,623.21 14,13,26,040.41 32,30,19,288.99 31,32,95,829.13

RATIO 0.863 1.078 0.683 0.383 1.177

46

1.2 1 0.8 0.6 0.4 0.2 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010 2009 2008 2007 2006

RATIOS

YEARS

INTERPRETATION The total asset turnover ratio increase in 2005-2006 and 2006-2007 after it decreased in 2007-08 and 2008-09 and after that increase the turnover ratio in 2009-2010.

47

FINDINGS
In the over all evaluation of the Working Capital Management at each and every aspect, the following are the findings.

1. Working Capital ratio of the chittoor Co-operative Sugar Ltd is decreasing in all the years which indicate poor liquidity position of the company. 2. Inventory turn over ratio of the Chittoor Co-operative Sugar Ltd is good in all the 5 years of study, which indicates the efficient management of inventory. 3. Fixed Assets to Net worth Ratio of the Chittoor Co-operative Sugars Ltd is greater than 1% which indicates the Owner s funds are sufficient to Finance Fixed Assets. 4. Fixed Assets Turn over Ratio of the Chittoor Co-operative Sugar Ltd is highest 2.4 in the year 2005-06, which the management is efficient in utilizing the Fixed Assets. 5. Current ratio of Chittoor Co-operative Sugars Ltd is highest 6.19 in the year 2005-06, which is the management of effective and efficient utilization 6. The company sales have been decreased in all the year. 7. The reserves and surplus is always accumulating every year. The company can capitalize the reserves and Surplus.

48

SUGGESTIONS y
The company should utilize the reserves and surplus by either capitalizing or invest the money some where as investment to get benefits.

y y y

The company should maintain adequate working capital The company should maintain the high liquidity position The company is under loss zone, so it needs some subsidy by government to develop its position.

By merging the company with other profitable company, the firm may Improve its performance.

y y y

By selling molasses to other plant the company can earn additional profit. By using the sugar can scrap the firm can generate it s electrically supply. By selling the scrap to bio-plants it can generate funds.

49

CONCLUSION

From the analysis on the working capital management at Chittoor Co-operative Sugar Ltd, conclude in spite of all suggestions, the company has to reduce its production cost to increase profit.

The inventory turn over is good in all the five years. The company should try to increase their sales. It should maintain the high liquidity position. Hence, the suggestions given are realistic which will lead to increase in the profitability of the company. The company should try to tap the market and set in brand value and do the best.

50

ANNEXURE

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED:: CHITTOOR TRADING ACCOUNT FOR THE YEAR 2006 PARTICULARS 1.OPENING STOCK:
a) Sugar b) Molasses 2. PURCHASES: a) Fertilisers & pesticides 3. Expenditure debitable to trading a/c 4. Cost of production Transferred from Manufacturing a/c 26,11,39,024.38 82,52,332.24 15,120.00 1,75,86,673.28 3. Misc. income Creditable to Trading a/c 4. Gross loss 16,82,44,220.70 --------------------45,52,37,370.60 -----------------------------------------45,52,37,370.60 ---------------------1,72,00,316.54 3,76,45,558.10

AMOUNT Rs. Ps.

PARTICULARS 1. OPENING STOCK:

a) Sugar b) Molasses 2. sales

AMOUNT Rs. Ps.

19,19,96,947.80 69,07,474.80 20,14,86,573.36

51

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED :: CHITTOOR BALANCE SHEET AS ON 2006 LIABILITIES
1. Share capital 2.DEPOSITS & BORROWINGS: a) Deposits b) Borrowings 3. Out standing Interest payable 4. Adjusting heads Due by 5. Reserves 6. U.D.P 7. Audit fund 8. Reserve fund yet To be invested 9. Vysya bank balance 10. Bank of India 11. Canara bank 12. Indian bank 13. Indian overseas Bank 14. S.V. Grameena Bank 15. State bank of India 16. Union bank of India 17. CDCC bank, Chittoor 18. Corporation bank

Rs.
14,09,58,700.00 2,88,36,536.05 23,56,16,210.28 60,94,477.90 18,29,12,074.27 21,93,57,187.86 64,226.88 9,695.57 24,702.69 ---------------------

ASSETS
1. Cash on hand 2. BALANCE WITH BANKS: a) current account b) savings account 3. Shares in other Co-op. institutions 4. Deposits with Various agencies 5. F.Ds with banks 6. Loans & advances To members 7. Loans to other Co-op. sugar Factories 8. ADJ. heads due to 9. Interest receivable 10. Value of assets 11. Rvaluation of Assets 12. VALUE OF CLOSING STOCK: a) Stores stocks b) Packing material c) Stationary d) Sugar e) Sugar in process f) Molasses g) Molasses in process h) FMP raw material & feed 13. Deficits

Rs.
12,83,980.24 17,15,099.27 23,80,139.99 2,28,550.00 12,54,825.77 2,50,000.00 64,61,883.31 30,00,000.00 5,44,12,361.15 18,26,488.57 12,62,06,460.22 9,59,30,271.73 2,02,69,708.93 1,78,240.45 26,375.50 19,19,96,947.80 2,54,382.07 69,07,474.80 9,290.00 20,474.20 47,943.52

----------------------81,38,73,811.50 LESS: Difference between Assets & liabilites Total

29,92,13,003.98 ----------------------51,46,60,807.52 -----------------------

Total

---------------------51,46,60,807.52 ----------------------

52

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED:: CHITTOOR TRADING ACCOUNT FOR THE YEAR 2007 PARTICULARS 1.OPENING STOCK:
a) Sugar b) Molasses 2. Expenditure debitable to trading a/c 1,18,46,077.46 3. Cost of production Transferred from Manufacturing a/c 3,26,16,707.00 --------------------24,33,67,207.06 ---------------------19,19,96,947.80 69,07,474.80

AMOUNT Rs. Ps.

PARTICULARS 1. OPENING STOCK:

a) Sugar b) Molasses 2. sales 3. Misc. income Creditable to Trading a/c 4. Gross loss

AMOUNT Rs. Ps.

7,60,05,445.10 2,86,092.00 13,05,17,436.81 1,15,01,190.42 2,50,57,642.73 ---------------------24,33,67,207.06 -----------------------

53

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED :: CHITTOOR BALANCE SHEET AS ON 2007 LIABILITIES
1. Share capital 2.DEPOSITS & BORROWINGS: a) Deposits b) Borrowings 3. Out standing Interest payable 4. Adjusting heads Due by 5. Reserves 6. U.D.P 7. Audit fund 8. Reserve fund yet To be invested

Rs.
14,09,60,300.00 2,88,12,456.68 22,38,22,462.57 2,71,90,688.40 11,50,20,073.78 22,87,27,884.01 64,226.88 9,695.57 24,702.69

ASSETS
1. Cash on hand 2. BALANCE WITH BANKS: a) current account b) savings account 3. Shares in other Co-op. institutions 4. Deposits with Various agencies 5. F.Ds with banks 6. Loans & advances To members 7. Loans to other Co-op. sugar Factories 8. ADJ. heads due to 9. Interest receivable 10. Value of assets 11. Rvaluation of Assets 12. VALUE OF CLOSING STOCK: a) Stores stocks b) Packing material c) Stationary d) Sugar e) Sugar in process f) Molasses g) Molasses in process h) FMP raw material & feed 13. Deficits

Rs.
22,575.20 13,49,421.74 1,45,31,767.74 2,28,550.00 12,61,225.77 22,50,000.00 63,86,629.69 10,00,000.00 5,48,94,708.08 18,26,488.57 12,62,06,460.22 9,59,30,271.73 2,01,00,264.62 1,78,240.45 18,671.00 7,60,05,445.10 2,34,802.90 2,86,092.00 5,750.00 20,474.20 47,943.52

----------------------76,46,32,490.58

LESS: Difference between Assets & liabilites Total

36,18,46,708.05 ----------------------40,27,85,782.53 -----------------------

Total

---------------------40,27,85,782.53 ----------------------

54

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED:: CHITTOOR TRADING ACCOUNT FOR THE YEAR 2008 PARTICULARS 1.OPENING STOCK:
a) Sugar b) Molasses 2. PURCHASES: a) Fertilisers & pesticides 3. Expenditure debitable to trading a/c 4. Cost of production Transferred from Manufacturing a/c 7,60,05,445.10 2,86,092.00 5,04,000.00 69,45,366.83

AMOUNT Rs. Ps.

PARTICULARS 1. OPENING STOCK:

a) Sugar b) Molasses c) Pesticides 2. sales 3. Misc. income Creditable to Trading a/c 4. Gross loss

AMOUNT Rs. Ps.

7,88,16,404.20 1,06,60,683.35 3,62,250.00 9,69,20,394.30 69,04,064.85 5323482.37 ---------------------19,89,87,279.07 ----------------------

11,52,46,375.14 --------------------19,89,87,279.07 ---------------------

55

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED :: CHITTOOR BALANCE SHEET AS ON 2008 LIABILITIES
1. Share capital 2.DEPOSITS & BORROWINGS: a) Deposits b) Borrowings 3. Out standing Interest payable 4. Adjusting heads Due by 5. Reserves 6. U.D.P 7. Audit fund 8. Reserve fund yet To be invested

Rs.
14,09,61,400.00 2,91,54,179.61 26,60,73,587.95 4,05,25,798.40 10,81,07,592.19 24,80,88,004.02 64,226.88 9,695.57 24,702.69

ASSETS
1. Cash on hand 2. BALANCE WITH BANKS: a) current account b) savings account 3. Shares in other Co-op. institutions 4. Deposits with Various agencies 5. F.Ds with banks 6. Loans & advances To members 7. Loans to other Co-op. sugar Factories 8. ADJ. heads due to 9. Interest receivable 10. Value of assets 11. Rvaluation of Assets 12. VALUE OF CLOSING STOCK: a) Stores stocks b) Packing material c) Stationary d) Sugar e) Sugar in process f) Molasses g) Molasses in process h) Pesticides h) FMP raw material & feed 13. Deficits

Rs.
18,78,931.06 91,72,861.36 89,67,176.13 2,28,550.00 12,71,225.77 27,50,000.00 90,85,235.94 10,00,000.00 6,70,56,511.94 18,26,488.57 12,66,47,509.22 9,59,30,271.73 2,00,46,520.64 93,100.00 43,726.65 7,88,16,404.20 -------1,06,60,683.35 --------3,62,250.00 20,474.20 47,943.52

----------------------83,30,09,187.31

LESS: Difference between Assets & liabilites Total

39,71,03,323.03 ----------------------43,59,05,864.28 ----------------------Total ---------------------43,59,05,864.28 ----------------------

56

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED:: CHITTOOR TRADING ACCOUNT FOR THE YEAR 2009 PARTICULARS 1.OPENING STOCK:
a) Sugar b) Molasses c) Pesticides 2. PURCHASES: a) Fertilisers & pesticides 3. Expenditure debitable to trading a/c 4. Cost of production Transferred from Manufacturing a/c 5. Gross Profit

AMOUNT Rs. Ps. 7,88,16,404.20 1,06,60,688.85 3,62,250.00

11,20,000.00 1,14,74,796.84 25,75,46,899.47 5,17,51,887.40 ----------------------41,17,32,920.70 -----------------------

PARTICULARS 1. OPENING STOCK:

a) Sugar b) Molasses c) Pesticides 2. sales 3. Misc. income Creditable to Trading a/c

AMOUNT Rs. Ps.

26,74,59,792.80 75,14,240.77 1,16,480.00 12,46,29,656.78 1,20,12,750.35

---------------------41,17,32,920. ----------------------

57

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED:: CHITTOOR BALANCE SHEET AS ON 2009 LIABILITIES
1. Share capital 2.DEPOSITS & BORROWINGS: a) Deposits b) Borrowings 3. Out standing Interest payable 4. Adjusting heads Due by 5. Reserves 6. U.D.P 7. Audit fund 8. Reserve fund yet To be invested

Rs.
14,11,40,700.00 3,10,24,046.10 40,43,40,806.12 4,90,24,988.90 14,09,80,325.36 26,43,09,028.13 64,226.88 9,695.57 24,702.69

ASSETS
1. Cash on hand 2. BALANCE WITH BANKS: a) current account b) savings account 3. Shares in other Co-op. institutions 4. Deposits with Various agencies 5. F.Ds with banks 6. Loans & advances To members 7. Loans to other Co-op. sugar Factories 8. ADJ. heads due to 9. Interest receivable 10. Value of assets 11. Rvaluation of Assets 12. VALUE OF CLOSING STOCK: a) Stores stocks b) Packing material c) Stationary d) Sugar e) Sugar in process f) Molasses g) Molasses in process h) Pesticides h) FMP raw material & feed 13. Deficits

Rs.
1,41,218.80 1,66,827.11 70,83,116.03 2,28,550.90 12,67,225.77 2,50,000.00 1,06,24,987.20 10,00,000.00 7,32,09,660.39 18,26,488.57 12,91,97,586.22 9,59,30,271.73 2,06,58,101.84 5,87,128.50 28,089.00 26,74,59,792.80 78,41,426.47 75,14,240.11 4,15,715.92 1,16,480.00 20,474.20 47,943.52

LESS: Difference between Assets & liabilites Total

----------------------1,03,09,18,519.75 40,53,03,194.91 ----------------------62,56,15,324.84 ----------------------Total ---------------------62,56,15,324.84 ----------------------

58

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED:: CHITTOOR TRADING ACCOUNT FOR THE YEAR 2010 PARTICULARS 1.OPENING STOCK:
a) Sugar b) Molasses c) Pesticides 2. Expenditure debitable to trading a/c 3.. Cost of production Transferred from Manufacturing a/c 4. Pesticides Purchase 26,74,59,792.80 75,14,240.77 1,16,480.00 2,66,76,030.20 38,10,97,458.30 4. Gross loss 33,07,360.00 ---------------------68,61,71,362.07 ------------------------------------------68,61,71,362.07 ----------------------

AMOUNT Rs. Ps.

PARTICULARS 1. OPENING STOCK:

a) Sugar b) Molasses 2. sales 3. Misc. income Creditable to Trading a/c

AMOUNT Rs. Ps.

24,67,11,289.11 66,19,002.89 2,05,940.00 2,60,98,795.50 3,76,82,757.68

59

THE CHITTOOR CO-OPERATIVE SUGARS LIMITED:: CHITTOOR BALANCE SHEET AS ON 2010 LIABILITIES
1. Share capital 2.DEPOSITS & BORROWINGS: a) Deposits b) Borrowings 3. Out standing Interest payable 4. Adjusting heads Due by 5. Reserves 6. U.D.P 7. Audit fund 8. Reserve fund yet To be invested

Rs.
14,25,53,600.00 3,52,01,887.01 40,57,02,422.76 4,69,28,301.64 22,91,72,904.82 26,80,06,835.01 64,226.88 9,695.57 24,702.69

ASSETS
1. Cash on hand 2. BALANCE WITH BANKS: a) current account b) savings account 3. Shares in other Co-op. institutions 4. Deposits with Various agencies 5. F.Ds with banks 6. Loans & advances To members 7. Loans to other Co-op. sugar Factories 8. ADJ. heads due to 9. Interest receivable 10. Value of assets 11. Rvaluation of Assets 12. VALUE OF CLOSING STOCK: a) Stores stocks b) Packing material c) Stationary d) Sugar e) Sugar in process f) Molasses g) Molasses in process h) Pesticides h) FMP raw material & feed 13. Deficits

Rs.
95,082.98 33,80,265.98 14,46,93,17.43 2,28,550.00 12,70,225.77 2,50,000.00 18,17,48,73.00 10,00,000.00 7,55,41,003.33 18,26,488.57 13,99,27,312.64 9,59,30,271.73 1,94,14,206.14 14,70,696.50 40,532.00 24,67,11,289.11 62,98,460.92 66,19,002.89 8,01,596.61 2,05,940.00 20,474.20 47,943.52

LESS: Difference between Assets & liabilites Total

11,27,66,45,76.38 49,89,41,043.06 -----------------------62,87,23,533.32 -----------------------Total ---------------------62,87,23,533.32 ----------------------

60

BIBLIOGRAPHY
THE following books have reffered during the prepararion of this project: I.M.pandey - Financial management- Vikas publishing house PVT LTD, New Delhi-110014, 2003.  Prasanna Chandra- Financial management-Tata MCGrawhill-hill publications company ltd, New Delhi, 2002.  R.K.Sharma and Shashi K.Gupta -Management accounting Kalyani publishers, NewDelhi2003.  Advanced financial management - Publishes by director of studies- ICWAI. KOLKATA 70016.

Referred websites :     www.books.google.co.in www.investopedia.com www.futureaccountant.com www.citefin.com

61