Prashant 2

VRL LOGISTICS pvt ltd Varur-Hubli ACKNOWLEDGEMENT
Before we get deep into the project, I would to take opportunity to express my profound thanks to people who have become part of this project. I would like to express my sincere and profound sense of gratitude to the management of VRL Logistics Pvt Ltd in Varur-Hubli for providing me such a great opportunity, and their support and valuable guidance for Working Capital Management in their
department.
I would like to thank the managing director of VRL Mr.Anand sankeshwar and also to Shri. S.G.Patil General Manager (HRD), for their support and advice and for giving me all the valuable information required to fulfill the needs of this project. I would also thank the entire Departmental staff of VRL who were very kind and supportive enough to spare their busy schedules, and for giving each and every detail I needed to complete my project. I extend my heartfelt and sincere thanks to our principal Dr. R.V. DADIBBAVI, OXFORD COLLEGE OF BBA, HUBLI for his valuable and timely guidance and support, and for his constant motivation throughout my project period. I also extend my heart full thank to my project guide Prof. jitendra.s, OXFORD COLLEGE OF BBA, HUBLI, without whose support and guidance I would not have been able to prepare this project.
OXFORD College Of Business administration, Hubli
VRL LOGISTICS pvt ltd Varur-Hubli CONTENTS

1. PROJECT PROFILE Executive summary Scope of study Objectives of the study Methodology Limitation 2. INDUSTRY PROFILE
5-7
9-15
Introduction Out look of the VRL

3. COMPANY PROFILE
17-26
Brief history
Organization profile
Quality policy Customers Organization chart 4. WORKING CAPITAL MANAGEMENT Introduction Concept Importance Determinates 28-36
VRL LOGISTICS pvt ltd Varur-Hubli Analysis 5. CASH MANAGEMENT Introduction Motives
Cash management cycle
38-41
Objectives
6. RECEIVABLE MANAGEMENT
43-48
Introduction Credit evaluation Optimum credit policy Benefits Company practice Average collection period
7. DATA ANALYSIS AND INTERPRETATION
50-73
8. SWOT ANALYSIS Strength Weakness Conclusion BIBLIOGRAPHY ANNEXURES OXFORD College Of Business administration, Hubli
3
VRL LOGISTICS pvt ltd Varur-Hubli
PROJECT PROFILE
EXECUTIVE SUMMARY
I have selected. VRL Logistics pvt ltd Varur-Hubli, for the project work Working capital management which I learned at my BBA 5th semester. VRL Logistics Pvt Ltd commenced its operation and started in year 1976. VRL Logistics is one of the leading road transportation companies in India, with operations in parcel transportation, express cargo, aviation and courier segments. Management of working capital is an essence of business activity a company should always maintain good amount of working capital on continuous basis. So I took this opportunity to study the working capital management of VRL Varur-Hubli.
SCOPE OF THE STUDY

The customer satisfaction survey activity entails: identification of customer segments in more details; listing the types of courier interfaces with customers; categorization of services received by various segment. Intended project activity for 2010 encompasses the desing, data collection, analysis and reporting of a statistically relisble survey of customer segments, perceptions of courier current levels of performance, service of performance standards exceptions, and service improvement opportunities. In order to be consistent with previous customer satisfaction studies, both the listof directorates and the satisfaction criteria will be consistent. However additional items of information will be added.
OBJECTIVES OF THE STUDY

To know the attribute of the customer towards the companys service. To know the service provide by the VRL Logistics. The understand the present service system. To find out the gap between present service and customer expectation. To know the price level of the VRL Logistics Ltd courier service compared to other competitors. To know the safety of documents and time management. To know the staff behavior with the customer. To sasses the level of satisfaction of customer towards courier service offered by the VRL Logistics Ltd.
METHODOLOGY
The data is collected from both primary and secondary source they are . Primary source: conversation with Mr. S. sudhakar. Financial conculter and also with college guie Mr. Anand Faculty in Finance. Secondary source: companys annual report and the company www.vrllogistics.com
LIMITATIONS
The time is the main limitation to this project. Because working capital management is a very vast subject and to study it thoroughly one month is a very short period.
INDUSTRY PROFILE
INDUSTRY PROFILE INTRODUCTION:
Had its start some 15-20 years ago. The courier industry was initially limited to the four metros New Delhi, Mumbai, kolkatta, and Chennai and to some extent to Bangalore. The reason was the airport connection these metros were. But, the changing economy and technical advancement seen on a daily basis, the industry has grown and extended faster to several cities and even rural areas. And it is still growing. A courier company anywhere in the world has its primary virtue is its efficiency to render service. The better the quality of service, the more the satisfied customers, better the chances of survival. The industry s booming and market is cut-throat competitive. The advancement of technology and internet has thing slight easier and more competitive as well.
Courier services in India can be segregated in few categories. Basically, it begins with intra-city service which are about speedy delivery of mails and goods within the city. Broadening the services, inter-city service are covered. Normally this is termed as surface cargo service where short distance and bulk loads are handled. Surface mode service is performed through two ways: firstly, on road (by bus or vehicle) and secondly on track (by train) service. The products are normally delivered through door to door.
Courier companies work in tandem with the foremost airlines and in sync with their well tuned, well associated set of connections the timely deliverance and protected service is guaranteed. Few other variant of service could be express service, ocean freight, industry solutions, logistics solutions, shipping tools. These particular services are individual of a companys area of specialization and diversification.
COURIER:
A courier is a person or a company who delivers message, packages, and mail courier are distinguished from ordinary mail services by features such as speed security, tracking. Signature, specialization and individualization of services, and committed delivery times, which are optional for most everyday mail services, as a premium service, courier are usually more expensive than usual mail services, and their use is typically restricted to packages where one or more of these features are considered important enough to warrant the cost. Different courier service operate on all scales, from within specific towns or cities,to regional, national and global service. The worlds largest courier companies are velox express, DHL, FEDEX, OBC, express Ltd, TNT.NV, UPS, and Aramex these offer services worldwide, typically via a hub and spoke model.
Couriers before the industrial area:

In ancient times runners and homing pigeon and riders on horseback were used to deliver timely messages. Before there were mechanized courier services foot messengers physically ran miles to their destinations. to this day are marathons directly related to actual historical messengers routes.
10
TYPES OF COURIERS :
In cities, there is often bicycle courier or motorcycle courier but for consignments requiring delivery over greater distance networks, this may often include lorries, railway and aircraft. Many companies who operate under a JUST IN TIME or JIT inventory method often utilize on - board couriers. On - board couriers are individuals who can travel at a moments notice anywhere in the world, usually via commercial airlines. While this type of service is the second costliest GENERAL AVIATION charters are far more expensive companies analyze the cost of service to engage an on board courier versus the cost the company will realize should the product not arrive by a specified time.
11
INDIAN LOGISTICS OUT LOOK:
On the other hand, since year 2000, the Indian industrial sector has also begun to look up, and in 2006, it registered over 10% growth for the time decades. Primarily driven by the manufacturing and capital goods segments. In the Indian manufacturing industry, textile plays a predominant role, while the chemical industry is the second largest industrial sector (12% of the GDP). However, Indias influence in global trade remains low and the country represents only 1% of the world exports trade. India mainly exports engineering goods, germs and jewelers (83% of diamond sold in the world are cut in India), textile and fabrics, and leather goods. The major imports are oil, precious stones, chemical products and machinery/engineering equipments. Indias main trade partners (exports and imports ) are Belgium, china, Switzerland, UAE, the UK, and US. With Indias GDP growing at 9% and the manufacturing sector enjoying double digit growth rates the logistics industry is at an inflection point. Strong growth enables exist today in the forum of $250 billion worth of infrastructure investment phased introduction of vat, and development of organized retail, telecom, and auto component manufacturing will lead to increased market opportunities for logistics service providers (LSPs). India currently spends over 13% of its GDP on logistics, which is very high compared to western Europe and north America, where logistics cost as a percentage of GDP is in the become imperative and the growth in domestic demand is driven by a number of factors including the rising income level and easy availability of low cost finance. The auto sectors are key to the Indian economy from both the perspective of economic contribution as well as that of employment generation. The sectors employs 13 million people and contribution to around 17% of the direct taxes kitty, the growth in the domestic demand is driven by a number of factors including the rising income levels and easy availability of low cost finance. The auto sectors are key to the Indian economy from both the perspective of economic contribution as well as that of employment generation. The 13 million people and contribution to around 17% of the direct taxes kitty.
12
ABOUT VRL COURIER SERVICE:

This section was started in the year 1992, which deals with courier services that play a vital role in modern business. In fact it has been so well accepted by the people that prefer courier rather than the postal service. Courier is faster than transport because there is no compulsion for entire lorry to be full. Even a single parcel booked is sent to destinations through various sources. The company has covered around 350 stations for courier parcels. Daily circulation of covers is more than 3500 covers there are more than 350 branches only in Karnataka the main office is in Bangalore after the expansion of the courier services in Karnataka. They are booked at various booking offices and sent to the main office. The urn over of courier service was 5 crore per annum in the year 2008-09. it has become famous at national level. But on July 17th it has reduced to only Karnataka. Rate Charged: for one cover up to 250 grams the rate charged Rs. 10/Parcels: up to one kg 25 plus additional charge on every kg Rs. 15 per kg
BRIEF INTRODUCTION OF WORKING PROCESS :
Hubli courier office is the main office. And all collected consignment and documents which have collected through company employees and company agents are come to main office. In main office courier are classified according to city name and keeping that document in separate section. For keeping those classified documents the section has separate place for every state and city area, after this classified parcels will be sent to its destinations places.
13
Punch line of VRL courier service
Any where any time
14
VRL EXPRESS CARGO:

Surface, train and cargo mode service Dedicated company owned vehicle Door pick up and delivery On time delivery 24*7*365 days operation Dedicated and well ground customer care windows Extensive nation wide network
COMPETITORS OF VRL COURIER SERVICE :

Ksrts Dtdc Professional courier service Sharma travels National travel
15
Company profile
16
COMPANY PROFILE BRIEF HISTORY OF THE COMPANY
Vijayanda Road Lines ltd a company registered under the provision of company act 1956 has with its symbol of service. The VRL has built and maintained goodwill in the minds of public at large in the country in general and in Karnataka particular. The managing director Mr. Vijay.B.Sankeshar started as an individual transport in January 1976 without any background of experience. Initially for the first two years he suffered heavy loss. Then by end of 1977 he started as local transporter between in Hubli and Gadag. Due to effective service, business picked up and purchased one more lorry in 1978. during this work he observed activities of other well know transporter and started first parcel service from Bangalore to Hubli and Belgaum with only two lorries. Gradually the business picked up. Later the above proprietorship were converted onto private ltd. The company came onto existence in the year march 31st 1983, VRL company initially in the transportation of goods and service subsequently it concerned the business of courier service in the year 1996 it acquired passenger buses, initially vijayanda travels operating in the state Karnataka and Maharastra. Presently VRL existing with largest network in India, the VRL parcel service is indispensable for large no of corporate houses. This network spans the length and breadth of the country and is supported by large number transshipment hubs, VRL operates through a network of 2629 Locations 911 branches, franchises and valuable customer, now VRL expanding its service to reach even the remote location of the country with the help of 2900 vehicles (including 300 hi-tech buses).
Over the year VRL has pioneered in providing a safe and reliable delivery network in the field of parcel service. It has spread its operations to courier service express cargo and aviation to meet the growing of the customer base.
17
At the core of the groups transport business is its 43 acre transport cum warehouse complex in Varur, Hubli. This unique facility has all the essential back up service under one roof. The total built up area of complex is 2,50,00,000 sq ft with an additional 1,00,000 sq, ft, of land utilized for sheds and vehicle parking, this complex contain the head office building, transshipment godown, workshop, canteen, drivers rest room, own diesel bunk.
FINANCIAL HIGHLIGHTS OF THE YEAR 2010-11

The company earned total revenues of Rs. 892.92 crores and recorded profits after tax to the tune of Rs. 50.97 crores as against corresponding revenues of Rs. 714.67 crores and profits after tax of Rs. 29.10 crores for the earlier financial year. The same translates to a revenue growth of 25% driven by higher volumes and complemented by the consolidation measures initiated by the company during the earlier fiscal. I am confident of the company scaling greater heights in the years to come.
18
KEY MILSTONES OF VRL FROM 1976 2011

1976 1983 1992 1994 1997 2003 2003 2004 2005 2006 Commencement of transport service through a proprietory concern by. Vijay sankeshwar commencement of business with a single truck. Business converted into a Private Limited Company by the name of Vijyanand Roadlines Private Limited. Commencement of courier service within the state of Karnataka. Vijayanand Roadlines Private Limited, becomes a deemed Public Limited Company. The status of the company changed from a deemed Public Limited Company to a Public Limited Company. Vijayanand Printers Limited becomes a wholly owned subsidiary. Entered into LIMCA BOOK OF RECORDS as single largest fleet owner of commercial vehicles in the private sector in India Commercial operation of Gigantic infrastructure facility at Varur, Hubli. ISO 9001:2000 Certificate for providing Passengers Travels service at Hubli, Bangalore, Belgaum (presently ISO 9001:2008). Entire stake in Vijayanand Printers Limited divested to Times Group.
2007 - Company diversified into power generation installed 34 wind Turbine Generators with capacity of 1025 MW each. 2007 - Company entered into air charter business and purchased 1A aircraft from Hawker Beechcraft Incorporation. 2009 UNFCCC approval for companys Wind Power Project.
2010 - Efforts of the Company recognized by way of several awards and recognition. 2011 - Foray into new logistics verticals Car Carrying and Chemical transportation.
19
COMPANY PROFILE
ESTABLISHED NAME OF THE ORGANIZATION PROPRIETOR LOCATION COMPANY
: 1976 : VIJAYANAND ROAD LINES PVT LTD, VARUR, HUBLI. : VIJAY SANKESHWAR : NH4 BANGALORE ROAD NEAR VARUR, HUBLI. : VRL LIMITED COMPANY
BOARD OF DIRECTORS Mr. VIJAY SANKESHWAR Mr. ANAD SANKESHWAR Mr. R.P.RAICHUR Mr. SUDHIR GHATE Mr. J.S. KORLAHALLI Mr. KARUNAKAR SHETTY Mr. SURESH ANGADI REGISTERED OFFICE : CHAIRMAN AND MANAGING DIRECTOR : MANAGING DIRECTOR : DIRECTOR (FINANCE) &CO, SECRATERY : DIRECTOR : DIRECTOR : DIRECTOR : DIRECTOR : 18TH Km, NH4, Bangalore Road, Varur, Hubli 581207, Karnataka. Phone no 0836-2237614, Email varurho@vrllogistics.com, Website www.vrllogistic.com
20
VISION, MISSION, VALUES AND QUALITY POLICY
VISION :
The vision is to inject new ideas in the transportation. Self motivate the employees for a change and there by change the organizational behavior to achieve companys goal. To provide quality and better service to public. To emerge as one the leading players in the transportation industry in India.
MISSION :
To provide highest quality service to our customers by continuously increasing cost efficiency and maintaining delivery deadlines. To encourage our employees workforce to strive for quality and excellence in everything they do, to promote team work and create a work environment that tales care of talent and bring out the best in our employees. Providing a quick and safe delivery of goods service is their motto.
THE VALUES :
Punctuality, Integrality, Honesty, Loyalty, and Credibility.
PHILOSOPHY :
They immensely follow : Time is Gold
21
QUALITY POLICY :
The VRL started with the sing of Symbol Of Service the VRL are committed to meet the needs and expectations of our customers by providing quick, prompt, efficiency, reliable, cost effective and safe service. Maintaining transparency in all their truncation and strive for continual improvement for enhancing customer satisfaction. In the words of chairman and managing director we are committed to provide quality transportation and logistics service consistently at reasonable rate and to continually improve the same to achieve customer to delight on sustainable basis.
CUSTOMERS OF THE VRL ;

Deep traders Surya agencies N.K. Electronics G.K. tires Birla tires Supreem Agencies Girias Sumitra Traders Samsung India Pvt ltd Onida Electronics Britania
22

Asian paints Sony India Pvt ltd
ORGANISATION GOALS :
The customer satisfaction is the key factor in todays market as customer is the king, hence forecast and analyze the requirement of the customer is a must. The goals of the company are as below. Quick and safe service Customer satisfaction and employee satisfaction Competition [rice Attain market leadership
OBJECTIVES OF THE COMPANY :

The main objective if the company is to provide good service to customer eith the reasonable rate and provide quick prompt and service. Human resource development. To develop the transportation business in states like Andra Pradesh, Tamilunadu and kerala. Training for all employees Customer satisfaction To have independent own building with printing machines and computer for each and every district Competitive price Productivity and innovation
23

To build highly motivated and committed team of staff by providing a good work culture to achieve individual performance To implement ISO 9002
SERVICES ;
The person who are booked for the travels are the covered by insurance They provide returned journey ticket booking facility To maintain their good service they go for only selected hotel place for hygienic food Incentives are their provided to drivers for safe and timely service Concession is provide for the school and college going students for their study trips Careful handling of goods consigned
ACHIEVEMENTS AND AWARDS : ACHIEVEMENTS;

The company has 2900 vehicles consisting of cargo and passenger buses and is claiming as a largest fleet owner in the world entitled for an entry in the business book record. The LIMCA BOOK OF RECORD has already accepted the entry and has been publishing the updated information in the year after year. The company has making all affect to have own infrastructure facilities like transshipment yards etc in all they business by acquiring the immovable properties. It is the company of certified by ISO 9001 and 2000.
24
AWARDS FOR VRL LOGISTICS Pvt Ltd :

The National Award for Environmental conservation at the CEAT India Road transportation Awards 2010 The Regional Award for Operational Excellence at the CEAT India Road Transportation Awards 2010 The New Era Award for Technology, innovation and Quality by Otherways Management Association, France, 2010
AWARDS FOR Mr. VIJAY SANKESHWAR :

UDOYG RATNA in 1994 for excellence n business SARIGE RATNA award in the year 1998 VISVESVARAYYA NAVARATNA award in 2003 PATRIKODYAMA & SAMAJIKA SEVA PURASKAR for the excellent contribution in the news paper industry and social service SIR M VISVESVERAYYA MEMORIAL AWARD IN 2007 for outstanding contribution to the economic and social development of Karnataka
AWARDS FOR Mr. ANAD SANKESHWAR :

ABCI Award in the year 2005 from the association of business communicators of India. MARKETING PROFESSIONAL OF THE YER for marketing excellence by Indira Group of Institutes in 2006 BEST SECOND GENERATION ENTREPRENEUR AWARD IN 2010 from TIE Global, USA
25
CUSTOMER CARE
WORK FLOW MODE
ACCOUNT SECTION
CONTRACORY BOOKING
PARCEL BOOKING
TICKET BOOKING
TRAVELS
26
WORKING CAPITAL MANAGEMENT
27
WORKING CAPITAL MANAGEMENT
MEANING :
Working capital is the short term investment, which is, concerned with the problems that arise to manage current assets the current liabilities and the relationship that exist between them.
CONCEPTS :
There are two concepts of working capital I. II. Gross Working Capital Net Working Capital
GROSS WORKING CAPITAL ;

The total capital employed in current assets or firms investments in current assets. Current are those assets which can be covered into cash within an accounting year and include cash short term securities, debtors, bills receivables, inventory it focuses on two aspects of current assets management. 1. Optimum investment in current assets i. e. to avoid two extreme prints excess and inadequate investments in current assets.
28

2. Financing of current assets it should make necessary arrangement of working capital fund whenever a firm due to increase level of business activities or for any other reasons.
NET WORKING CAPITAL :

It is difference between current assets and current liabilities of the excess current assets over current liabilities.
Current liabilities are those claims of the outsiders, which are expected to nature for payment within an accounting year and include creditors bills payable etc.
NEED FOR WORKING CAPITAL :

A firm needs working capital for the following reasons. 1. To run the day-to-day business activities. 2. To maximize the wealth of the share holders 3. To deal with the problem arising out of the luck of immediate realization of cash against goods sold. 4. To match between cash outflow and cash inflow of the firm 5. To smooth, uninterrupted functioning of firm activities. 6. stock of raw material, work in progress are kept to ensure smooth production and to guard against non-availability of raw material and there components.
29
DETERMINANTS OF WORKING CAPITAL :

There are no set rules or formulas to determine the working capital requirements of firm a large number of factors each having a different importance affects the working capital of a firm. The operating cycle is explained above in detail in also one of the determinant to the working capital requirement, so these following are some other factors that generally insurance the working capital requirements of a firm.
1) NATURE OF BUSINESS :
Working capital need is influenced by nature of the business trading and finance firms have a very small investments in fixed assets, but require a large sum of money to be invested in working capital.
2) BUSINESS CYCLE :
Working capital requirement is determined by the nature of the business cycle business fluctuation lead to cyclical and seasonal changed which in turn cause a shift in the working capital position.
3) PRODUCTION CYCLE :
It is another important factor to determine the working capital need of a company. How much working capital is require for procurements of raw materials is determined by this factor. The completion of the manufacturing process leads to the production of finished goods.
30
4) CREDIT POLICY :
Credit policy relating to the sales and purchase also affects the working capital used it policy influence the requirement of working capital in 2 ways. Through credit terms granted by the company to its customers. Credit terms available to the firms from its creations.
5) PRICE LEVEL CHANGES :

Changes in the price level also affect the requirement of working capital. Rising prices necessitate the rise of move funds for maintaining an existence level of activity changing price levels on working capital position vary from company to company depending on the nature of its operations its stand in the market.
6) RISKS :
The greater the uncertainty of receipt and expenditure, more the need of working capital, so, risk can also be an influencing factor on determining the working capital requirement of a firm.
31
TABLE SHOWING NET WORKING CAPITAL CHANGE OF VRL LOGISTICS PVT, LTD. SI. No 1 a) b) c) d) I 2 e) f) II Particulars Current assets
Inventory Sundry debtors cash & bank Loans &advances(short-term)
2007-08 633.06 2922.98 1961.89 4497.35 10015.28
2008-09 686.35 4459.29 2391.17 4691.9 12228.71
2009-10 695.51 4914.05 1864.69 5500.94 12975.19
2010-11 607.46 6873.78 1585.69 7470.97 16537.9
Gross working capital(a+b+c+d) Current liabilities

Current liabilities provisions
3355.96 105.12 3461.08
2944.9 109.83 3054.73
3815.18 1237.72 5052.90
5335.61 301.52 5637.13
Total current liabilities (e+f) Net Working Capital(I-II)
6554.2
9173.98
7922.29
10900.77
32
OPERATING CYCLE :
A firm should aim at maximizing the wealth of its shareholders, so the firm should earn sufficient return from it is operations. Earning a steady amount of profit requires successful sales activities. The firm has to invest enough funds in current assets for generating sales. Current assets are needed because sales do not convert cash instantaneously. There is always an operating cycle involved in the conversion of sales in to cash.
IT IS EXPLAINED THROUGH THE FLOWING DIAGRAM
Cash
Inventories
A/c Receivabels
Sales
33
LENGTH OF OPERATING CYCLE

The length of the operating cycle can be calculated in two ways ; I. Gross Operating Cycle II. Net Operating Cycle
I. Gross Operating Cycle :

The gross operating cycle of a trading concern in is the sum of inventory conversion period and debtors (Receivables) conversion period. Thus gross operating cycle is given as follows : INVENTORY CONVERSION PERIOD + DEBTORS CONVERSION PERRIOD
II. Net Operating Cycle :

Net Operating Cycle is the difference between Gross Operating Cycle and creditors (Payable) deferral period.
Length Of Operating cycle :

The sum of conversion period (ICP), Debtors conversion period (DCP). Operating Cycle Period = ICP+DCP Inventory Conversion Period 1) RML conversion period = RML inventory X 360 RML consumption
34

2) WIP conversion period = 3) F/G conversion period = WIP inventory X 360 Cost of Production Finished goods inventory X 360 Cost of goods sold
4)
Debtors conversion period =
debtors X 360 Credit sales at sales Creditors X 360 Credit sales
5)
Payable deferral period =
INVENTORY CONVERSION PRIOD (ICP) :

The total time needed for producing and selling the product and includes raw material conversion period. Work in progress conversion period and finished goods conversion period. ICP=RMCP+WIPCP+FGCP DEBTORS CONVERSION PERIOD [DCP] : The time required to collect the outstanding amount from the customers. GROSS OPERATING CYCLE [GOC] : The total of inventory conversion period and debtors conversion period. GOG=ICP+DCP NET OPERATING CYCLE [NOC] : It is the net difference between gross operating cycle and payable deferral period . PAYABLE DEFERRAL PERIOD [PDP] :
35

Capacity of firm to postpone the payments. The ability of a firm to acquire resources on credit and temporarily postpone payment of certain expenses it is length of time the firm is able to postpone payment on various resources purchases. CASH CONVERSION CYCLE [CCP] : It is the net difference between net operating cycle and depreciation and profit. CCC=NOC-Depreciation and Profit
IMPORTANCE OF OPERATING CYCLE :

Operating cycle concept is a new concept in working capital management, which has been gaining more and more importance in recent years. This concept emphasis the importance of time factor in the conversion of raw materials into final product and then into sales resulting in cash collection right from the acquisition of raw materials. Normally operating cycles passes through the following stages. a. Acquisition of raw materials b. Work in process c. Stock of finished goods d. Sale and realization of sale proceeds Operating cycle concept plays an important role in determining the working capital management of firm. Longer the operating cycle greater will be the amount of working capital requirement and shortest operating cycle requires limited amount of working capital. There fore an efficient management should try to reduce the time elapsed in these consecutive stages of operating cycle. Duration of manufacturing process right from the acquisition of raw materials till they are sold out after being converted onto final product and the realized determines the amount of working capital required.
REASONS FOR LENGTH OPERATING CYCLE :

Pro-longed operating cycles may be due to the following reasons :
36

1) In effective receivable management. 2) Lack of credit facilities from the suppliers. 3) In effective purchase policies.
CASH MANAGEMENT
37
CASH MANAGEMENT : MEANING :

Cash is the important current assets for the operations of the business. Cash a basis input needed to keep the business running on a continuous basis it is also the ultimate output expected to be realized by selling the service or product manufactured by the company. The company should keep the sufficient cash neither ,ore or less cash shortage will descript the firms manufacture operation while excessive cash will simply remain idle without contributing anything towards the companys profitability. Thus, a major function of the financial manager is to maintain a sound cash position. Cash is the money, which a firm can disburse immediately without any restriction the term cash included coins currency and cheques held by the firm and balance in its bank accounts. Sometimes more cash items such as marketable securities or bank time deposits are also included in cash.
MOTIVES FOR HOLDING CASH :

1) Transaction motive : The transaction motive requires a company to held to conduct its business in the ordinary course the company needs cash primary to make payments for purchases. Wages, salaries, other operating expenses etc.
2) Precautionary motive :
The precautionary motive is its need to hold cash to meet contingencies in futures. It provides a cushion to with stand some unexpected emergency. The precautionary amount
38

of cash defends upon the predictability of cash flows. The precautionary balance many kept cash and marketable securities.
3) Speculative Motive : The speculative motive relates to the holding of cash for investing in profit making opportunity as send when they arise. The opportunity to make profit may arise when the security prices changes.
CASH PLANNING
Cash inflows and outflows should be planned to project cash surplus or deficit for cash period of the planning period. Cash budget should be prepared for this purpose.
MANAGING THE CASH FLOW

The flow of cash should be properly managed. The cash inflows should be accelerated as far as possible, decorating the cash outflows.
OPTIMUM CASH LEVEL

The company should decide about appropriate level of cash balance. The cost of excess cash and danger of cash deficiency should be matched to determine the optimum level of cash balances.
INVESTING SURPLUS CASH

The surplus cash balances should be properly invested to earn profit. The firm should decide about the division of cash balance between bank deposits, marketable securities and inter corporate lending.
39
CASH MANAGEMENT AT VRL LOGISTICS PVT LTD

A well management of cash needs in a company can represents the amount of money company keeps with a bank on current or deposite account and the money holeds on the company. To control a companys cash flows one requires a plan of the companys operations for the relevant future period. This plan is based on forecasts of cash receipts. In patil works and cash disbursements for costs and purchase of equipments etc. COMPANY PRACTICE : Inflows and outflows of cash by the VRL (Varur-Hubli) CASH INFLOWS OF THE COMPANY : Advanced payment by the customers Sundry debtors / receivables Export incentives Other income
CASH OUTFLOWS OF THE COMPANY :
40

Sundry creditors payment Account payable Other expenses Wages and salary
PERCENTAGE OF CASH TO NET WORKING CAPITAL :

Cash is important component of current assets because of more liquid, it is also known as lifeblood of the business firm. This percentage of cash to net working capital and cash to gross working capital following particulars. Percentage of cash to net working capital = cash X 100 Net working capital
Particulars
Cash Working capital Percentage
Amount (2008-09)
2391.17 9173.98 26.06
Amount (2009-10)
1864.69 7922.29 23.53
PERCENTAGE OF CASH TO GROSS WORKING CAPITAL:

This percentage of cash to gross working capital shows the relationship between cash current assets, which indicates the portion of cash in the current assets.
Percentage of cash to gross working capital =
Cash X 100 Gross working capital
41
VRL LOGISTICS pvt ltd Varur-Hubli Particulars

Cash Gross working capital Percentage
Amount (2008-09)
2391.17 12228.71 19.55
Amount (2009-09)
1864.69 12975.19 14.37
RECEIVABLES MANAGEMENT
42
RECEIVABLE MANAGEMENT MEANING :

Receivables contribution a substantial portion of current assets of several firms e.g. in India tread debtors, after in ventures one the major components of current assets. They from about one third of current assets in India granting credit and creating debtors amount to the blocking of the companys funds. The interval between the date of sale and payment has to be financed out of working capital. These necessities the firm to get funds from banks or other sources. thus trade debtors represent investment, as substantial amounts are ties up in trade debtors, it needs careful analysis and proper management.
OBJECTIVES :
The following are the objectives of receivables management a. To maintain the good will of the company in the minds of customers : Good will is an intangible asset clearly specifies the reputation of the company to maintain the good will in the customers mind is essential because good will is only the alternative food for long life of the company there fore providing credit facility to the customers is to maintain the reputation. b. To have the regular customers Providing credit facility is to protect its sales from the competition and to attract the potential customers to buy its products at favorable terms. Regular customers are like KEB etc.
43
ESTABLISHING OPTIMUM CREDIT POLICY :

A companys investment in accounts receivable depends on :
a) Volume of credit sales b) Collection period The volume of credit sales is a functions of the firms total sales and percentage of credit sales to total sales. Total sales depend on market size firms market share product quality. Intensity of competition economic conditions etc. the financial manager hardly has any control over these variables. The percentage of credit sales to total sales are mostly influenced by the native of business and industry norms. The term credit policy is used to refer to the combination of the decision variables they arei. Credit standard ii. Credit terms iii. Collections efforts
On which the financial manager has influence.
THE CREDIT STANDARD : OXFORD College Of Business administration, Hubli
44

It is the criteria to decide the types of customers to whom goods could be sold on credit. It a company has more slow playing customers its investment in account receivables. will increase. The company will also expose to higher risk of default. Credit terms specify duration of credit and terms of payment by customers investment accounts receivables will be high if the customers are allowed extended time period for making payments collection efforts. Determine the actual collection period. The lower the collection period, the lower investment in accounts receivables and vice-versa.
OPTIMUM CREDIT POLICY : A Cost Benefit Analysis :

The firm operating is maximized when total cost is maximized for a given level of revenue. Optimum credit policy is one, which maximize the companys value. The value of the company is maximized when the incremental rate of return on investment is equal to the incremental cost of funds to finance the investment. As the firm looses its credit policy. Its investment in accounts receivable becomes more risky because of increase in slow paying and defaulting accounts. Thus we many state that goal of the firms credit policy is to maximize the value of the company. To achieve this goal the evaluation of investment in accounts receivable should involve the following steps.
Estimation of incremental operating profit Estimation of the incremental investment in account receivables Estimation of the incremental rate of return of investment Comparison of the rate of return with the required rate of return.
CREDIT TERM :
The stipulations under which the sells on credit to customers are called credit terms. These stipulations include : a) the credit period b) the cash discount
CREDIT PERIOD :
45

The length of time for which credit is expected to customers is called the credit period. It is generally started in terms of a net date. A firms credit period may be governed by the industry norms. However, depending on its objectives, the firm can lengthen the credit period on the other hand. The company may tighten it credit period if customers are defaulting too frequently and bad looses are building up.
COLLECTION PERIOD :
A collection policy is needed because all customers are slow payers while some are nonpayer. The collection efforts should there fore at accelerating collections from slow payers and reducing bad debts looses. A collection policy should ensure prompt collection is needed for fast turnover of working capital keeping collection costs and bad debts within limits and maintaining collection efficiency. Regularity in collections keeps debtors alert and they tend to pay their dues promptly. Receivables management at Patil Electric Works : a) To achieve growth in sales b) To increase profit c) To meet competition
Credit policy variables in Patil Electric Works Credit policy has important implication for the co0mpanys production, marketing and finance functions.
CREDIT STANDARDS :
Credit standard are the criteria, which a firm follows in selecting customers for the purpose of extension.
46
AVERAGE COLLECTION PERIOD :

The average collection period measures the quality of debtors since it indicates the quality of their collection the average collection period should be compared the against firms credit terms and collection efficiency. Average Collection Period = Debtors X 360 Sales
Particulars Debtors Sales ACP
Amount(in lack) 2009 4459.29 43737.84 36 Days
Amount(in lack) 2010 4914.05 51258.80 34 Days
INTERPRETATION :
The average collection period of the VRL in the year 2008-09 is 36 days and in the year 2009-10 is 34 days since the it is in decreasing order. It indicates that the firm has control over credit facility and credit collection.
47
PERCENTAGE OF DEBTORS TO NET WORKING CAPITAL :

The ratio indicates percentage of debtors in the net working capital. Percentage of Debtors to Net Working Capital = Debtors X 100 NWC
Particulars Debtors Net working capital Percentage
Amount (in lack) 2009 4459.29 9173.98 48.60
Amount (in lack) 2010 4914.05 7922.29 62.02
PERCENTAGE OF DEBTORS TO GROSS WORKING CAPITAL :

The percentage of debtors to gross working capital shows the portion of debtors in the current assets. Percentage of Debtors to Gross Working Capital = Debtors X 100 GWC
48

Particulars Debtors Gross working capital Percentage Amount (in lack) 2009 4459.29 12228.71 36.46 Amount (in lack) 2010 4914.05 12975.19 37.87
DATA ANALYSIS AND INTERPRETATION
49
DATA ANALYSIS AND INTERPRETATION
BALANCE SHEET FOR THE YEAR 2005-2006

Sl. no 1 2 3 Particulars 2006 799.85 18248.64 1406.83 2005 425.13 15699.39 1415.41 17539.93 14145.41 Change in Rs 374.72 2549.25 -8.58 2915.39 2530.55 (Rs. In Lacs) Change in (%) 88.14 16.23 -0.60 16.62 17.88
Sources of funds
Reserve and surplus
Loan funds
Secured funds Unsecured funds
Total Application of funds

4 Fixed assets
20455.32 16675.96
Current assets & loans & advances

5 6 7 8 Inventories Sundry debtors Cash and bank balance Loan and advances Total 869.5 1721.25 708.15 1357.06 4655.96 651.47 1227.15 513.94 1377.59 3470.15 218.03 494.1 194.21 -20.53 1185.81 33.46 40.26 37.78 -1.49 34.17
Current liability and provision
50

9 10 Liability Provisions Total 1792.61 363 2155.61 1466.35 293.85 1760.2 326.26 69.15 395.41 22.24 23.53 22.46
PROFIT AND LOSS ACCOUNT FOR THE YEAR 2005-2006

Sl.no 1 2 Particulars 2006 2005 Change in Rs Change in (%)
Income
Other income 378.98 186.32 192.66 103.40
Expenditure
3 4 5 6 Operating expenses Employees cost Administrative expenses Interest and financial charges 27981.94 3329.3 928.38 1582.07 21510.74 2063.19 861.22 1306.93 6471.2 1266.11 67.16 275.14 30.08 61.36 7.79 21.05
51

SL.NO 1 2 3 Particulars 2007 1661.5 39042.4 0 40703.9 4861.31 2006 799.85 18248.64 1406.83 20455.32 16675.96 Change in Rs 1161.65 20793.76 -1406.83 20248.58 31942.35 (Rs. In Lacs) Change in (%) 145.23 113.94 -100 98.98 191.54
Sources of funds
Reserve and surplus
Loan funds

4 Fixed assets

6 7 8 9 Inventories Sundry debtors Cash and bank balance Loan and advance 960.29 2371.32 1515.85 3856.31 8707.77 869.5 1721.25 708.15 1357.06 4655.96 90.79 650.07 807.7 2499.25 4051.81 10.44 37.76 114.05 184.16 87.02
Total Current liability and provision

9 10 Liabilities Provisions
2794.28 280.43
1792.61 363
1001.67 -82.57
55.87 -22.74
52
VRL LOGISTICS pvt ltd Varur-Hubli Total 3074.71

2155.61 919.1 42.63

(Rs. In Lacs) Change in (%) -7.71 16.72 42.21 42.61 37.48
SL.NO Particulars 1 Income 2 Other income
2007 349.74 32662.25 4734.84 1324 2175.16
2006 378.98 27981.94 3329.3 928.38 1582.07
Change in Rs -29.24 4680.31 1405.54 395.62 593.09
Expenditure
3 4 5 6 Operative expenses Employees cost Administrative expenses Interest and financial charges
53

SL.NO Particulars 2008 3375.29 43285.18 0 2007 1961.5 39042.4 0 41003.9 48618.31 Change in Rs 1413.79 4242.78 0 5656.57 4404.21 13.79 9.05 (Rs. In Lacs) Change in (%) 72.07 10.86
Sources of funds
1 2 3 Reserve And Surplus
Loan funds
Total 46660.47 Application of funds

4 Fixed assets 53022.55

5 6 7 8 Inventories Sundry debtors Cash and bank balance Loan and advances 633.06 2922.98 1961.89 4497.35 960.29 2371.32 1515.85 3856.31 8703.77 -327.23 551.66 446.04 641.04 1311.51 -34.07 23.26 29.42 16.62 15.06
Total Current liability & provision

10015.28
3355.96 105.12
2794.28 280.43 3074.71
561.68 -175.31 386.37
20.10 -62.51 12.56
Total
3461.08
54

(Rs. In Lacs) Change in (%) 129.77 11.09 34.40 -16.90 147.89
SL.NO Particulars 1 2 3 4 5 6 Income Other income Expenditure Operative expenses Employees cost Administrative expenses Interest and financial charges
2008 803.6 36284.55 6363.81 1100.12 5392.06
2007 349.74 32662.25 4734.84 1324 2175.16
Change in Rs 453.86 3622.3 1628.97 -223.88 3216.9
55

Sl.no Particulars 2009 3423.02 41998.28 59.14 45480.44 49449.32 2008 3375.29 43285.18 0 46660.47 53022.55 Change in Rs 47.73 -1286.9 59.14 -1180.03 -3573.23 (Rs. In Lacs) Change in (%) 1.41 -2.97 100 -2.52 -6.73
Sources of fund
1 2 3 Reserve and surplus
Loan funds

4 Fixed assets

5 6 7 8 Inventories Sundry debtors Cash and bank balances Loan and advances 686.35 4459.29 2391.17 4691.9 12228.71 633.06 2922.98 1961.89 4497.35 10015.28 53.29 1536.31 429.28 194.55 2213.43 8.41 52.55 21.88 4.32 22.10
Total Current liabilities and provisions

2944.9 109.83
3355.96 105.12 3461.08
-411.06 4.17 -406.35
-12.24 4.48
Total
3054.73
56

Sl.no Particulars 1 2 3 4 5 6 Income Other income Expenditure Operative expenses Employees cost Administrative expenses Interest and financial charges 44388.05 8421.52 1207.67 5888.47 36284.55 6363.81 1100.12 5392.06 8103.5 2057.71 107.55 496.41 22.33 3233 9.77 9.20 863.39 803.6 59.7 7.44 2009 2008 Change in Rs (Rs. In Lacs) Change in (%)
57

Sl.no Particulars 2010 3768.66 36732.22 1109.87 41610.75 67470.07 2009 3423.02 41998.28 59.14 45480.44 49449.32 Change in Rs 345.64 -5266.06 1050.73 -3869.69 18020.75 (Rs in Lcas) Change in (%) 10.09 -12.53 17.76 -8.50 36.44
Sources of fund
Loan funds

4 Fixed assets

5 6 7 8 Inventories Sundry debtors Cash and bank balances Loan and advances 695.51 4914.05 1964.69 5500.94 12975.19 686.35 4459.29 2391.17 4691.9 12228.71 9.16 454.76 -426.48 809.04 746.48 1.33 10.19 -17.83 17.24 6.10

3815.18 1237.72
2944.9 109.83 2835.07
870.28 1127.89 2217.83
29.55 10.26 78.22
Total
5052.90
58

Sl.no Particulars 1 2 3 4 5 6 Income Other income Expenditure Operative expenses Employees cost Administrative expenses Interest and financial charges 46759.02 8982.43 1475.20 5161.31 36284.55 6363.81 1100.12 5392.06 10474.47 2618.62 375.08 -230.75 28.86 41.14 34.09 -4.27 868.54 803.6 64.94 8.08 2010 2009 Change in Rs (Rs in Lcas) Change in (%)
59

Sl.no Particulars 2011 6393.07 40796.98 3779.19 50969.24 75985.33 2010 3768.66 36732.22 1109.87 41610.75 67470.07 (Rs in Lcas) Change in Rs Change in (%) 2624.41 4046.76 2669.32 9358.49 8515.26 69.63 11.06 24.05 22.49 12.62
Sources of fund
Loan funds

4 Fixed assets

5 6 7 8 Inventories Sundry debtors Cash and bank balances Loan and advances 60.46 6873.78 1585.69 7470.97 16537.90 695.51 4914.05 1964.69 5500.94 12975.19 -635.05 1959.73 -379 1970.03 3562.71 -91.30 39.88 -19.29 35.81 27.45

5335.61 301.52
3815.18 1237.72 5052.90
1520.43 936.2 584.23
39.85 -75.63 11.56
Total
5637.13
60

Sl.no Particulars 1 2 3 4 5 6 Income Other income Expenditure Operative expenses Employees cost Administrative expenses Interest and financial charges 60336.08 10448.23 1425.35 4874.64 46759.02 8982.43 1475.20 5161.31 13577.06 1465.8 -49.85 -286.67 29.03 16.31 -3.37 -5.55 1095.16 868.54 226.62 26.06 2011 2010 Change in Rs (Rs in Lcas) Change in (%)
61
ANANLYSIS OF PERCENTAGE CHANGE IN RUPEES FOR THE PERIOD 2005-06 TO 2010-11
Sl.no Particulars 1 2 3 4 5 6 7 8 9 Reserves & surplus Inventories Sundry debtors Cash & bank balance Liabilities Other income Operative expense Administrative expense Interest & financial charge
2005-06 88% 33% 40% 37% 22% 103% 30% 8% 21%
2006-07 145% 10% 37% 114% 55% -8% 17% 43% 37%
2007-08 72% -34% 23% 29% 20% 129% 11% -16% 148%
2008-09 1.41% 8.42% 53% 22% -12% 7% 22% 10% 9%
2009-10 10.09 1.33 10.19 -17.83 29.55 8.08 28.86 34.09 -4.27
2010-11 69.63 -91.30 39.88 -19.29 39.85 26.06 29.03 -3.37 -5.55
62
CURRENT ASSETS CASH AND BANK BALANCE FROM 2006-07 TO 2010-11 YEAR
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
AMOUNT
1515.85 1961.89 2391.17 1864.69 1585.69
DIFFERENCE
807.07 446.04 429.28 526.48 279
63

DIFFERENCE A M O U N T
1000 807.07 800 526.48 600 446.04 429.28 279 400 200 0 2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011
YEAR
The bank are the substitutes for cash are most liquid for the company. The more cash and bank balance may be required when there is more operation to be done. In the last 4 years it has be clear that the highest growth in cash and bank balance found in the year 2006-07 (807.07)
SUNDRY DEBTORS FROM 2006-07 TO 2010-11 YEAR

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
AMOUNT
2371.32 2922.98 4459.29 4914.05 6873.78
DIFFERENCE
650.07 551.66 1536.31 454.76 1959.73
64

DIFFERENCE
2000
A M O U N T
1959.73
1536.31
1500 1000 650.07 551.66 500 0 454.76
2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011

YEAR
Sundry debtors are debts owned by the customer as good are sold on credit basis and are considered to be the most liquid current assets for the firm. As for the calculation, the highest rate in debtors found in the year 2010-11 at rate (1959.73)
INVENTORIES FROM 2006-07 TO 2010-11 YEAR

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
AMOUNT
960.29 633.06 686.35 695.51 607.46
DIFFERENCE
9.79 327.23 -53.29 -9.16 88.05
65
DIFFERENCE A M O U N T
400 300 200 100 0 -100
327.23 88.05
9.79
-53.29 -9.16
2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011

YEAR
The inventories constitute that major part of the current assets. The difference change in growth highest rate over the last 5 years 2007-08 (327.23)
CURRENT LIABILITIES SUNDRY CREDITORS FROM 2006-07 TO 2010-11 YEAR

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
AMOUNT
2794.28 3355.96 2944.90 3815.18 5335.61
DIFFERENCE
1197.97 561.68 411.06 870.28 1520.43
66
DIFFERENCE
2000
A M O U N T
1520.43 870.28 561.68 411.06 2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011
YEAR
1500 1197.97 1000 500 0
It may be inferred that the sundry creditors increases to during the year of 200607 (1197.97) as compared to present year 2010-11 (-1520.43) it will not increase.
OTHER LIABILITIES FROM 2006-07 TO 2010-11 YEAR

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
AMOUNT
280.43 105.12 109.83 1237.72 301.52
DIFFERENCE
82.57 175.31 -4.17 -1127.89 936.2
67
A M O U N T
936.2 1000 500 82.57 175.31 -4.71 0 -500 -1000 -1127.89 -1500 2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011
YEAR
DIFFERENCE
It may be inferred the other liabilities increased to during the year of 2010-11 (936.2). will be compared with the figure of 2009-10 (-1127.89).
Information relating to various current assets and liabilities includes in the year 2006-07 PARTICULARS Current assets
Inventories Sundry debtors Cash and bank balance
AMOUNT
960.29 2371.32 1515.85 4847.46
PERCENTAGE (%)
19.01% 48.91% 54.44% 100.00%
Total Current liabilities
68

Sundry creditors Provisions 2784.28 280.43 3064.71 90.84 9.15 100.00%
Total
current liabilities
90.84% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% S un dry cred ito rs
current assets
54.44% 60.00% 48.91% 50.00% 40.00% 30.00% 19 .81 % 20.00% 10.00% 0.00% Inventories S und ry C ash and d ebtors ba nk b alance
9.15%
P ro vis io ns
It may be revealed that in the over all composition of sundry creditors ate the highest (90.84%), followed by sundry debtors (48.91%), Inventories (19.01%), Cash and bank balance ( 54.44%), Provisions (9.15%).
AMOUNT
633.06 2922.98 1961.89 5517.93 3355.96
PERCENTAGE (%)
11.47% 52.97% 35.55% 100.00% 96.96%

Sundry creditors
69

Provisions 105.12 3461.08 3.03% 100.00%
Total
C urren t assets
60.00% 40.00% 20.00% 0.00% 11.47% 50.00% 0.00% 52.97% 35.55% 100.00%
current liabilities
96.96%
3.03%
InventoriesS undry Cas h and debtors bank balance
S undry c reditors
P rovis ions
Information relating to various current assets and liabilities includes in the year 2008-09
PARTICULARS Current assets

AMOUNT
686.35 4459.29 2391.17 7536.81
PERCENTAGE (%)
9.10% 59.16% 31.72% 100.00%
Total
70
VRL LOGISTICS pvt ltd Varur-Hubli Current liabilities

Sundry creditors Provisions 2944.9 109.83 3054.73 96.40% 3.59% 100.00%
Total
Current assets
60.00% 40.00% 20.00% 0.00% 9.10%
50.00%
Current liabilities
96.40%
59.16% 31.72%
100.00%
3.59%
Inventories Sundry Cash and debtors bank balance
0.00%
Sundry creditors
Provisions
AMOUNT
695.51 4914.05 1864.69 7474.25
PERCENTAGE (%)
9.30% 65.74% 24.94% 100.00%
71

Total
C urren t assets
65.74% 80.00% 60.00% 24.94% 40.00% 9.30% 20.00% 0.00% InventoriesS undry Cas h and debtors bank balance
C urrent liabilities
75.50% 80.00% 60.00% 40.00% 20.00% 0.00% S undry c reditors P rovis ions 24.49%
AMOUNT
607.46 6873.78 1585.69 9066.93
PERCENTAGE (%)
6.69% 75.81% 17.48% 100.00%
72

Total
C urren t assets
75.81% 80.00% 60.00% 17.48% 40.00% 6.69% 20.00% 0.00% InventoriesS undry Cas h and debtors bank balance
C urrent liabilities
94.65% 100.00% 50.00% 0.00% 5.34%
S undry c reditors
P rovis ions
ESTIMATION OF NET WORKING CAPITAL

Year 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Current Assets 4847.46 5517.93 7536.81 7474.25 9066.93 Current Liabilities 3064.71 3461.08 3054.73 5052.9 5637.13 Gross Working Capital 4847.46 5517.93 7536.81 7474.25 9066.93 Net Working Capital 1782.75 2056.85 4482.08 2421.35 3429.8
73
A M O U N T
5000 4000 3000 2000 1000 0
Net Working Capital (CA-CL)

4482.08 3429.8 2421.35 1782.75 2056.85
20062007
20072008
20082009
YEAR
20092010
20102011
FINDINGS :
There is a dedicated workers increase in growth of their turnover They provide good service that leads to customer satisfaction The company is recommended by Indian books association Mumbai They provide training facility They have good brand image They provide direct and indirect employment to many people
74

They did not under go any lockout, strike etc They have new courier service called CARGO EXPRESS which refers to the 24 hours of service The company is having wide network of branches spread all over Karnataka, Andhra Pradesh, Madhya Pradesh, Maharashtra, New Delhi.
75
SWOT ANALYSIS
SWOT ANALYSIS STRENGTHS :

In house body designing facility enabling maximum vehicle utilization Vehicle repair and maintenance facility Tie-ups with spare part suppliers resulting in cost savings. Dedicated research and development team Highly experienced management with sound industry expertise. Active involvement of promoters in the management
76

OPERTUNITIES : They can enter into hotel business They can decentralize their garage and office They can concentrate on remote villages They can tie up with the government transport service They can enter into international courier and cargo express service They can extent heir service to north and south station Another English newspaper to be published out of the side of the Karnataka
THREATS :
Uncertain policies of changing policy government Competition can enter into market for leadership New technology economic slowdown Maintenance Competition
77
CONCLUSION
CONCLUSION :
The conclusion of whole the study is that the management of working capital in the VRL Logistics Pvt. Ltd. Is very good as it is above corporate standard. The profits of company are also growing with the sped, as the management of working capital is getting good. As well as level of working capital liquidity of company is also affected positively. So the study showing it is true that the working capital is the guiding for the organization survival growth and profitability.
78
79
BIBLIOGRAPHY
BIBLIOGRAPHY :
Financial Management : Khan & Jain Financial Management : I. M. Panday Annual Report VRL
80

www. vrllogistics.com www.google.com
81

Prashant 2

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Prashant 2

Загружено:

Авторское право:

Доступные форматы

VRL LOGISTICS pvt ltd Varur-Hubli ACKNOWLEDGEMENT

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli CONTENTS

Introduction Out look of the VRL

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

SCOPE OF THE STUDY

OBJECTIVES OF THE STUDY

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

INDUSTRY PROFILE INTRODUCTION:

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

Couriers before the industrial area:

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

INDIAN LOGISTICS OUT LOOK:

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

ABOUT VRL COURIER SERVICE:

BRIEF INTRODUCTION OF WORKING PROCESS :

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

Punch line of VRL courier service

Any where any time

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

VRL EXPRESS CARGO:

COMPETITORS OF VRL COURIER SERVICE :

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

COMPANY PROFILE BRIEF HISTORY OF THE COMPANY

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

FINANCIAL HIGHLIGHTS OF THE YEAR 2010-11

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

KEY MILSTONES OF VRL FROM 1976 2011

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

ESTABLISHED NAME OF THE ORGANIZATION PROPRIETOR LOCATION COMPANY

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

VISION, MISSION, VALUES AND QUALITY POLICY

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

CUSTOMERS OF THE VRL ;

OXFORD College Of Business administration, Hubli

VRL LOGISTICS pvt ltd Varur-Hubli

OBJECTIVES OF THE COMPANY :