final mba-surag

8/18/2019 Final MBA-surag

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A PROJTECT ON WORKING CAPITAL MANAGEMENT ATKRAYONS INTERIOR PVT LIMITED

Report Submitted In Partial Fulfilment of the Requirements for the Award of

Degree in Master of Business Administration of Mahatma Gandhi Uni ersit!

By

SURAG V S

Reg.No:4255

U!"e# $%e G&'"(!)e o*

M#+. So!y +$e,%e!

(Asst. Professor )

DEPARTMENT O- MANAGEMENT STUDIES

MANGALAM COLLEGE O- ENGINEERING

ETTUMANOOR KOTTAYAM

2/0212/04


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DECLARATION

"his is to state that the stud! entitled + A PR',")-" '( .'R%I(G -API"A/

MA(AG)M)(" A" %RA&'(S I(")RI'R P0" /IMI")D 1 is based on the original

wor$ #arried b! me under the super ision of M+. So!y S$e,%e! towards partial

fulfillment of the requirements for the M2B2A #ourse of M2G Uni ersit!2 "his has

not been submitted in part or full towards an! other degree or diploma2 All the data

3 both primar! and se#ondar!4 are true to the best of m! $nowledge

Pla#e SURAG 2 02 S

Date


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ACKNOWLEDGEMENT

First of all I than$ the god almight! for gi ing this opportunit! for me to do a

pro*e#t in the name 5PR',)-"6 in the #ompan! A PR',")-" '( .'R%I(G

-API"A/ MA(AG)M)(" A" %RA&'(S I(")RI'R P0" /IMI")D2 "his

pro*e#t ga e me a wonderful e7perien#e in the field of interior s!stem industr!

I would li$e to e7press m! heartfelt than$s to Diere#tor of the department

Prof2 DR FRA(-IS -8)RU(I/AM9 and DR2SIBU - -8I"RA(9 MBA9

M2phill9 Ph2D9 FDP:IIM%;9 AM":AIMA;9 MAIMSI:USA; 8ead 'f the Departmentmanagement studies for all a#ademi# fa#ilities e7tended to me2 I am immensel!

than$ful to m! internal pro*e#t guide Mrs2 S'(& S")P8)(9 Assistant professor of

the Management department9 for her #reati e and health! suggestions regarding this

pro*e#t wor$2

I e7press m! sin#ere gratitude to the Mr /I""'2 ,'8(S'( I would li$e to

e7tend m! gratitude to the guide Mr2 SAF))R 0 of the organi


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0.0 INTRODUCTION TO T E STUDY

"he a##ounting prin#iple board of Ameri#an institute of #ertified publi#

a##ountants9 USA9 has defined wor$ing #apital as follows=4

+.or$ing #apital9 sometimes #alled net wor$ing #apital9 is represented at the

e7#ess of #urrent asset o er #urrent liabilities and identifies the relati el! liquid

portion of total enterprise #apital whi#h #onstitutes a margin or buffer for maturing

obligations within the ordinar! operating #!#le of the business>2

Management of wor$ing #apital therefore is #on#erned with the problem that is

attempting to manage the #urrent assets9 the #urrent liabilities and the interrelationship

that e7ist between them 2in other word it refers t administration of botl #urrent assets

and #urrent liabilities2 "he basi# goal of wor$ing #apital management is to manage the

#urrent assets and #urrent liabilities of a firm in su#h a wa! that a satisfa#tor! le el of

wor$ing #apital is maintained i2e2 it is neither inadequate nor e7#essi e2

"his is be#ause both inadequa#! as well as e7#essi e wor$ing #apital implies

idle funds9 whi#h earns no profit for the business2 .or$ing #apital management

poli#ies of a firm ha e a great effe#t on its profitabilit!9 liquidit!9 and stru#tural health

of the organi


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? . S$#e!g$%e! $%e So78e!)y

.or$ing #apital helps to operate the business smoothl! without an! finan#ial problem for ma$ing the pa!ment of short4term liabilities2 Pur#hase of raw materials

and pa!ment of salar!9 wages and o erhead #an be made without an! dela!2 Adequate

wor$ing #apital helps in maintaining sol en#! of the business b! pro iding

uninterrupted flow of produ#tion2

2. E!%(!)e Goo"9'77

Suffi#ient wor$ing #apital enables a business #on#ern to ma$e prompt

pa!ments and hen#e helps in #reating and maintaining goodwill2 Goodwill is

enhan#ed be#ause all #urrent liabilities and operating e7penses are paid on time2

. E(+y O;$('!'!g Lo(!

A firm ha ing adequate wor$ing #apital9 high sol en#! and good #redit rating

#an arrange loans from ban$s and finan#ial institutions in eas! and fa orable terms2

4. Reg&7(# S&,,7y o* R(9 M($e#'(7

@ui#$ pa!ment of #redit pur#hase of raw materials ensures the regular suppl!

of raw materials from suppliers2 Suppliers are satisfied b! the pa!ment on time2 It

ensures regular suppl! of raw materials and #ontinuous produ#tion2

5. S6oo$% B&+'!e++ O,e#($'o!

.or$ing #apital is reall! a life blood of an! business organi


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. A;'7'$y To -()e C#'+'+

Adequate wor$ing #apital enables a firm to fa#e business #risis in emergen#iessu#h as depression2

SCOPE O- T E STUDY

At %ra!ons interior s!stems p t ltd a substantial part of the total assets are #o ered b!

#urrent assets2 8owe er this #ould be less profitable on the assumption that #urrent

assets generate lesser returns as #ompared to fi7ed assets2

8ere #omes the need of wor$ing #apital management or managing the in estments in

#urrent assets2 "hus the initial stages of %RA&'(S is not eas! at all to implement a

good wor$ing #apital management as it demands indi idual attention on its different

#omponents2

"he stud! of wor$ing #apital management is er! helpful for the organisation to $now

its liquidit! position2 "he stud! is rele ant to the organi


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OBJECTIVE O- T E STUDY =

) er!thing in life holds some $inds of ob*e#ti es to be fulfilled2 "his stud! is not ane7#eption to it2 "he following are a few straight forward goals whi#h i ha e tried to

fulfil in m! pro*e#t=

?; "o stud! the arious #omponents of wor$ing #apital2

; "o anal!


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STATEMENT O- T E PROBLEM

Finan#ial statements #an pro ide aluable insights into a firm6s performan#e2Anal!sis of finan#ial statements is useful for the #ompan! to e aluate its own

performan#e and also it is of interest to lenders :short term as well as long term;9

in estors9 se#urit! anal!sts9 managers and others2 "o e aluate the effe#ti eness of

operations and to determine its su##ess an anal!st has to #ombine quantitati e results

with qualitati e fa#tors2 For instan#e a #ompan!6s #urrent profitabilit! ma! be low2

8owe er9 be#ause of a#tions initiated b! the management li$e te#hnolog! up

gradation9 *oint enture and #ollaboration with a foreign partner9 et#2 "he prospe#ts for

better performan#e of the #ompan! in future ma! be bright2

"o fulfil its endea our to ma7imi


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PERIOD O- STUDY

"he stud! is #arried out for C da!s b! #olle#ting data for a period of three finan#ial!ear from E?E to E?

ASSUMPTIONS O- T E STUDY

It is assumed that all the information pro ided b! the #ompan! and #olle#ted from the

annual report are true and fair2

MET ODOLOGY O- T E STUDY

"his stud! is mainl! based on se#ondar! data2 "he data required for the stud! was

#olle#ted from annual reports and other published do#uments of the #ompan!2 "his

stud! #o ers three !ears period starting from E?E to E? 2 "he data #olle#ted from

these reports were #ompiled as per the requirement of the stud!2 Some data were

grouped and sub grouped to arri e at arious finan#ial indi#ators2 "he #olle#ted and#ompiled data was pro#essed with the help of ele#troni# medium to redu#e the #han#e

of human error2 An! flu#tuations before or after the stud! period is not under

#onsideration2

For anal!


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LIMITATIONS O- T E STUDY:

"he span of stud! is #onfined to onl! !ears2 "he #omparison of arious ratios

ma! not ha e the same #onditions9 whi#h ma! result in unrelated #omparisons2

"his stud! was #arried out onl! for C da!s2 So all the ne#essar! literature stud!

was not possible2

%RA&'(S interiors s!stems p t ltd not depends on for pro#urement of raw

materials suppl! of finished goods2 8en#e the .or$ing -apital In entor!

management te#hniques ha e to be ad*usted on a timel! basis9 based on

%RA&'(S interiors s!stems p t ltd needs2

In this pro*e#t report the .or$ing -apital Management -ash Management

s!stem followed during the time of doing the pro*e#t is re#orded and anal!


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2.0 INDUSTRY PRO-ILE

ISTORY

INTERIOR DESIGNING INDUSTRY

Interior design des#ribes a group of arious !et related pro*e#ts that in ol e turning an

interior spa#e into an >effe#ti e setting for the range of human a#ti ities> that are to

ta$e pla#e there 2 ?H An interior designer is someone who #oordinates and manages su#h

pro*e#ts2 Interior design is a multifa#eted profession that in#ludes #on#eptual

de elopment9 #ommuni#ating with the sta$eholders of a pro*e#t and the management

and e7e#ution of the design2

In the past9 interiors were put together instin#ti el! as a part of the pro#ess of building2 ?H "he profession of interior design has been a #onsequen#e of the

de elopment of so#iet! and the #omple7 ar#hite#ture that has resulted from the

de elopment of industrial pro#esses2 "he pursuit of effe#ti e use of spa#e9 user well4

being and fun#tional design has #ontributed to the de elopment of the #ontemporar!

interior design profession2

In an#ient India9 ar#hite#ts used to wor$ as interior designers2 "his #an be seen from

the referen#es of 0ishwa$arma the ar#hite#t 4 one of the gods in Indian m!tholog!2

Additionall!9 the s#ulptures depi#ting an#ient te7ts and e ents are seen in pala#es built

in ? th #entur! India2

http://en.wikipedia.org/wiki/Interior_design#cite_note-autogenerated2003-1http://en.wikipedia.org/wiki/Interior_design#cite_note-autogenerated2003-1http://en.wikipedia.org/wiki/Interior_design#cite_note-autogenerated2003-1http://en.wikipedia.org/wiki/Architecturehttp://en.wikipedia.org/wiki/Interior_design#cite_note-autogenerated2003-1http://en.wikipedia.org/wiki/Architecturehttp://en.wikipedia.org/wiki/Interior_design#cite_note-autogenerated2003-1


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showrooms for the publi# to see2 Some of the pioneering firms in this regard

were .aring Gillow 9,ames Shoolbred 9 Mintons and 8olland Sons2 "hese

traditional high4qualit! furniture ma$ing firms began to pla! an important role as

ad isers to unsure

middle #lass #ustomers on taste and st!le9 and began ta$ing out #ontra#ts to design

and furnish the interiors of man! important buildings in Britain2

"his t!pe of firm emerged in Ameri#a after the -i il .ar 2 "he 8erter Brothers 9

founded b! two German emigre brothers9 began as an upholster! warehouse and

be#ame one of the first firms of furniture ma$ers and interior de#orators 2 .ith their

own design offi#e and #abinet4ma$ing and upholster! wor$shops9 8erter Brotherswere prepared to a##omplish e er! aspe#t of interior furnishing in#luding de#orati e

paneling and mantels9 wall and #eiling de#oration9 patterned floors and #arpets and

draperies2

A pi otal figure in populari


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In ?JJ the /ondon Dire#tor! of the Post 'ffi#e listed JE interior de#orators2 Some of

the most distinguished #ompanies of the period were -ra#e 9 .aring Gillow and

8olland Sons famous de#orators emplo!ed b! these firms9 in#luded "homas

)dward -oll#utt 9)dward .illiam Godwin 9-harles Barr! 9 Gottfried

Semper and George )dmund Street 2

T#(!+'$'o! $o ,#o*e++'o!(7 '!$e#'o# "e+'g!

B! the turn of the Eth #entur!9 amateur ad isors and publi#ations were in#reasingl!

#hallenging the monopol! that the large retail #ompanies had on interior design2

)nglish feminist author Mar! 8aweis wrote a series of widel! read essa!s in the

?JJEs in whi#h she derided the eagerness with whi#h aspiring middle4#lass people

furnished their houses a##ording to the rigid models offered to them b! the retailers2KH

She ad o#ated the indi idual adoption of a parti#ular st!le9 tailor made to theindi idual needs and preferen#es of the #ustomer=

'ne of m! strongest #on i#tions9 and one of the first #anons of good taste9 is that our

houses9 li$e the fish6s shell and the bird6s nest9 ought to represent our indi idual taste

and habits2

"he mo e towards de#oration as a separate artisti# profession unrelated to the

manufa#turers and retailers9 re#ei ed an impetus with the ?JKK formation of the

Institute of British De#orators with ,ohn Dibblee -ra#e as its president it represented

almost EE de#orators around the #ountr!2 ?EH B! ?K? 9 the /ondon Dire#tor! listed

? indi iduals trading as interior de#orators9 of whi#h ?E were women2 Rhoda and

Agnes Garrett were the first women to train professionall! as home de#orators in

http://en.wikipedia.org/wiki/Kelly's_Directoryhttp://en.wikipedia.org/wiki/Post_Officehttp://en.wikipedia.org/wiki/Post_Officehttp://en.wikipedia.org/wiki/John_Dibblee_Cracehttp://en.wikipedia.org/wiki/John_Dibblee_Cracehttp://en.wikipedia.org/wiki/Waring_%26_Gillowhttp://en.wikipedia.org/wiki/Waring_%26_Gillowhttp://en.wikipedia.org/wiki/Waring_%26_Gillowhttp://en.wikipedia.org/wiki/Thomas_Edward_Collcutthttp://en.wikipedia.org/wiki/Thomas_Edward_Collcutthttp://en.wikipedia.org/wiki/Edward_William_Godwinhttp://en.wikipedia.org/wiki/Charles_Barryhttp://en.wikipedia.org/wiki/Gottfried_Semperhttp://en.wikipedia.org/wiki/Gottfried_Semperhttp://en.wikipedia.org/wiki/Gottfried_Semperhttp://en.wikipedia.org/wiki/George_Edmund_Streethttp://en.wikipedia.org/wiki/Feminismhttp://en.wikipedia.org/wiki/Mary_Haweishttp://en.wikipedia.org/wiki/Interior_design#cite_note-9http://en.wikipedia.org/wiki/John_Dibblee_Cracehttp://en.wikipedia.org/wiki/John_Dibblee_Cracehttp://en.wikipedia.org/wiki/Interior_design#cite_note-10http://en.wikipedia.org/wiki/Kelly's_Directoryhttp://en.wikipedia.org/wiki/Post_Officehttp://en.wikipedia.org/wiki/John_Dibblee_Cracehttp://en.wikipedia.org/wiki/Waring_%26_Gillowhttp://en.wikipedia.org/wiki/Thomas_Edward_Collcutthttp://en.wikipedia.org/wiki/Thomas_Edward_Collcutthttp://en.wikipedia.org/wiki/Edward_William_Godwinhttp://en.wikipedia.org/wiki/Charles_Barryhttp://en.wikipedia.org/wiki/Gottfried_Semperhttp://en.wikipedia.org/wiki/Gottfried_Semperhttp://en.wikipedia.org/wiki/George_Edmund_Streethttp://en.wikipedia.org/wiki/Feminismhttp://en.wikipedia.org/wiki/Mary_Haweishttp://en.wikipedia.org/wiki/Interior_design#cite_note-9http://en.wikipedia.org/wiki/John_Dibblee_Cracehttp://en.wikipedia.org/wiki/Interior_design#cite_note-10


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?J C2 "he importan#e of their wor$ on design was regarded at the time as on a par

with that of .illiam Morris 2 In ?J L9 their wor$ 4Suggestions for 8ouse De#oration in

Painting9 .oodwor$ and Furniture 4 spread their ideas on artisti# interior design to a

wide middle4#lass audien#e2

Until re#entl! when a man wanted to furnish he would isit all the dealers and sele#t

pie#e b! pie#e of furniture toda! he sends for a dealer in art furnishings and fittings

who sur e!s all the rooms in the house and he brings his artisti# mind to bear on the

sub*e#t2

In Ameri#a9 -anda#e .heeler was one of the first woman interior

designers and helped en#ourage a new st!le of Ameri#an design2 She was instrumentalin the de elopment of art #ourses for women in a number of ma*or Ameri#an #ities

and was #onsidered a national authorit! on home de#oration 2 An important influen#e

on the new profession was "he De#oration of 8ouses 9 a manual of interior design

written b! )dith .harton with ar#hite#t 'gden -odman in ?JK in Ameri#a2 In the

boo$9 the authors denoun#ed 0i#torian4st!le interior de#oration and interior design9

espe#iall! those rooms that were de#orated with hea ! window #urtains9 0i#torian

bri#4a4bra# and o erstuffed furniture2 "he! argued that su#h rooms emphasi


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o er night2 She #ompiled her ideas into her widel! read ?K? boo$9 "he 8ouse in

Good "aste2

In )ngland9 S!rie Maugham be#ame a legendar! interior designer #redited with

designing the first all4white room2 Starting her #areer in the earl! ?K?Es9 her

international reputation soon grew she later e7panded her business to (ew

&or$ and -hi#ago 2 ?JH Born during the 0i#torian )ra 9 a time #hara#teri


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?KJL9 and the Ameri#an Designers Institute9 founded in ?K J9 were established as

organisations that go erned arious areas of design2

It was not until later that spe#ifi# representation for the interior design

profession was de eloped2 "he US (ational So#iet! of Interior Designers was

established in ?K 9 while in the U% the Interior De#orators and Designers

Asso#iation was established in ?KLL2 A#ross )urope9 other organisations su#h as "he

Finnish Asso#iation of Interior Ar#hite#ts :?KCK; were being established and in ?KKC

the International Interior Design Asso#iation was founded2

)llen Ma


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An interior designer ma! wish to spe#iali


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• 0isual and Spatial Branding= "he use of spa#e as a media to e7press the -orporate

Brand

• -orporate= offi#e design for an! $ind of business su#h as ban$s

• 8ealth#are= the design of hospitals9 assisted li ing fa#ilities9 medi#al offi#es9 dentist

offi#es9 ps!#hiatri# fa#ilities9 laboratories9 medi#al spe#ialist fa#ilities

• 8ospitalit! and Re#reation= in#ludes hotels9 motels9 resorts9 #afes9 bars9 restaurants9

health #lubs and spas9 et#2

• Institutional= go ernment offi#es9 finan#ial institutions :ban$s and #redit unions;9

s#hools and uni ersities9 religious fa#ilities9 et#2

• Industrial fa#ilities= manufa#turing and training fa#ilities as well as import and

e7port fa#ilities2

• "ea#hing in a pri ate institute that offer #lasses of Interior Design

• Self4)mplo!ment

• )mplo!ment in pri ate se#tor firms

STYLES

A#$ De)o

"he Art De#o st!le began in )urope in the earl! !ears of the Eth #entur!9

with the waning of Art (ou eau 2 "he term >Art De#o> was ta$en from the )7position

Internationale des Arts De#oratifs )" IndustrielsModernes9 a world6s fair held in Paris

in ?K Art De#o re*e#ted man! traditional #lassi#al influen#es in fa or of more

streamlined geometri# forms and metalli# #olor2 "he Art De#o st!le influen#ed all

http://en.wikipedia.org/wiki/Art_Decohttp://en.wikipedia.org/wiki/Art_Decohttp://en.wikipedia.org/wiki/Art_Nouveauhttp://en.wikipedia.org/wiki/Art_Nouveauhttp://en.wikipedia.org/wiki/Art_Decohttp://en.wikipedia.org/wiki/Art_Nouveau


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areas of design9 espe#iall! interior design9 be#ause it was the first st!le of interior

de#oration to spotlight new te#hnologies and materials2

Art De#o st!le is mainl! based on geometri# shapes9 streamlining and #lean lines2 "he

st!le offered a sharp9 #ool loo$ of me#hani


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often had #ur ed edges9 geometri# shapes and #lean lines2 Art De#o lighting fi7tures

tended to ma$e use of sta#$ed geometri# patterns2

A#(; M($e#'(7+

+Ma*lis painting19 also #alled nagash painting is the de#oration of

the ma*lis or front parlor of traditional Arabi# homes in the Asir pro in#e of Saudi

Arabia and ad*oining parts of &emen "hese wall paintings9 an arabesque form

of mural or fres#o 9 show arious geometri# designs in bright #olors= +-alled NnagashN

in Arabi#9 the wall paintings were a mar$ of pride for a woman in her house21

"he geometri# designs and hea ! lines seem to be adapted from the

area6s te7tile and wea ing patterns2 +In #ontrast with the sobriet! of ar#hite#ture and

de#oration in the rest of Arabia9 e7uberant #olor and ornamentation #hara#teri


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red9 green9 !ellow and brown21 .hen women did not want to paint the walls

themsel es9 the! #ould barter with other women who would do the wor$2 Se eral

Saudi women ha e be#ome famous as ma*lis painters9 su#h as Fatima AbouGahas 2

"he interior walls of the home are brightl! painted b! the women9who wor$ in defined patterns with lines9 triangles9 squares9 diagonals and tree4li$e

patterns2 +Some of the large triangles represent mountains2 Oig

http://en.wikipedia.org/wiki/Barterhttp://en.wikipedia.org/wiki/Fatima_Abou_Gahashttp://en.wikipedia.org/wiki/Courtyardhttp://en.wikipedia.org/wiki/Porticoeshttp://en.wikipedia.org/w/index.php?title=Jiss&action=edit&redlink=1http://en.wikipedia.org/wiki/Majlishttp://en.wikipedia.org/wiki/Parquethttp://en.wikipedia.org/wiki/Gypsumhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Omanhttp://en.wikipedia.org/wiki/Omanhttp://en.wikipedia.org/wiki/Motif_(visual_arts)http://en.wikipedia.org/wiki/Motif_(visual_arts)http://en.wikipedia.org/wiki/Mesopotamiahttp://en.wikipedia.org/wiki/Mesopotamiahttp://en.wikipedia.org/wiki/Middle_Easthttp://en.wikipedia.org/wiki/Middle_Easthttp://en.wikipedia.org/wiki/Al-Qassim_Provincehttp://en.wikipedia.org/wiki/Al-Qassim_Provincehttp://en.wikipedia.org/wiki/Al-Qassim_Provincehttp://en.wikipedia.org/wiki/Plasterhttp://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/wiki/Clayhttp://en.wikipedia.org/wiki/Clayhttp://en.wikipedia.org/wiki/Barterhttp://en.wikipedia.org/wiki/Fatima_Abou_Gahashttp://en.wikipedia.org/wiki/Courtyardhttp://en.wikipedia.org/wiki/Porticoeshttp://en.wikipedia.org/w/index.php?title=Jiss&action=edit&redlink=1http://en.wikipedia.org/wiki/Majlishttp://en.wikipedia.org/wiki/Parquethttp://en.wikipedia.org/wiki/Gypsumhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Omanhttp://en.wikipedia.org/wiki/Motif_(visual_arts)http://en.wikipedia.org/wiki/Mesopotamiahttp://en.wikipedia.org/wiki/Middle_Easthttp://en.wikipedia.org/wiki/Al-Qassim_Provincehttp://en.wikipedia.org/wiki/Al-Qassim_Provincehttp://en.wikipedia.org/wiki/Plasterhttp://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/wiki/Clay


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J(,(!e+e 6($e#'(7+

,apanese design is based strongl! on #raftsmanship9 beaut!9 elaboration9

and deli#a#!2 "he design of interiors is er! simple but made with attention to detail

and intri#a#!2 "his sense of intri#a#! and simpli#it! in ,apanese designs is still aluedin modern ,apan as it was in traditional ,apan2

,apanese interior design is er! effi#ient in the use of resour#es2

"raditional and modern ,apanese interiors ha e been fle7ible in use and designed

mostl! with natural materials2 "he spa#es are used as multifun#tional rooms2 "he

rooms #an be opened to #reate more spa#e for an o##asion or more pri ate and #losed4

off b! pulling #losed paper s#reens #alled sho*i2 A large portion of ,apanese interior

walls are often made of sho*i s#reens that #an be pushed opened to *oin two roomstogether9 and then #lose them allowing more pri a#!2 "he sho*i s#reens are made of

paper atta#hed in thin wooden frames that roll awa! on a tra#$ when the! are pushed

opened2 Another large importan#e of the sho*i s#reen besides pri a#! and se#lusion is

that the! allow light through2 "his is an important aspe#t to ,apanese design2 Paper

translu#ent walls allow light to be diffused through the spa#e and #reate light shadows

and patterns2 Another wa! to #onne#t rooms in ,apan6s interiors is through Sliding

panels made of wood and paper9 li$e the sho*i s#reens9 or #loth2 "hese panels are

#alled Fusuma and are used as an entire wall2 "he! are traditionall! hand painted2

"atami mats are ri#e straw floor mats often used as the a#tual floor in

,apan6s interiors although in modern ,apan9 there usuall! are onl! one or two tatami

rooms2 A "o$onoma is often present in traditional9 as well as modern ,apanese li ing

rooms2 "his determines the fo#us of the room and displa!s ,apanese art usuall! a


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painting or #alligraph!2 Interiors are er! simple9 highlighting minimal and natural

de#oration2 "raditional ,apanese interiors9 as well as modern9 in#orporate mainl!

natural materials in#luding fine woods9 bamboo9 sil$9 ri#e straw mats9 and paper sho*i

s#reens2 (atural materials are used to $eep simpli#it! in the spa#e that #onne#ts to

nature2 (atural #olor s#hemes are used and neutral palettes in#luding bla#$9 white9 off4

white9 gra!9 and brown2

INDIAN SCENERIO

.ords of Indian origin su#h as calico 9chintz 9 and madras indi#ate the importan#e of

Indian te7tiles in the histor! of .estern interior design2 &et the Indians themsel esha e ne er been er! #ons#ious of this role9 their own domesti# interiors being of the

utmost simpli#it!9 with hardl! more than a #arpet or a pra!er mat to offset stone floors

and plain white walls2 "he impermanen#e of the materials used for the ma*orit! of

dwellings ma! ha e been a #ontributor! fa#tor2 In more palatial buildings9 howe er9

and #ommonl! in both 8indu and Buddhist temples9 walls were painted9 a pra#ti#e

that9 a##ording to literar! referen#es9 ma! go ba#$ to the Maur!a period :c. ?3

?J B-) ;2 Paintings that sur i e in #a e temples of the Gupta period : E3LEE-) ;

usuall! depi#t groups of a#ti e m!thi#al or human figures and are #hara#teri


26/84

%ra!ons Interiors is an IS' KEE?= EEJ -ertified turn$e! interior fit out #ompan! that

offers #on#ept4to4#ompletion ser i#es to de elop world4#lass offi#e interiors2 .e

spe#iali


27/84

"o pro ide #ustomer delight b! offering highl! professional ser i#e9 maintain

high le els of dis#ipline and ethi#s and remaining #ommitted to #ustomers and their

needs2

O V'+'o!

"o be#ome a globall! preferred #ompan! in the #orporate world for pro iding #ost

effe#ti e turn$e! interior fit4out solutions with qualit!9 #ommitment9 time4spe#ified

deli er!9 safet!9 se#urit! and a long term #lient relation2

G&'"'!g ,#'!)',7e+

Co66'$6e!$ (!" >&(7'$y

In a##ordan#e with our @ualit! Poli#!9 %ra!ons Interiors offers hundred per#ent

#ommitments to high qualit!9 timel! deli er!9 and #ustomer delight2

P#o*e++'o!(7'+6

.ith %ra!ons Interiors9 !ou #an rest assured that !ou are dealing with a group of

highl! professional e7perts2 .e also hire our team #arefull! to ensure that people at all

le els of share our passion for #ustomer satisfa#tion2

S(*e$y 9'$% Ae+$%e$')+

&our safet! is paramount to us2 .e ensure that +loo$s1 do not #ompromise safet!2

.ith $ra!ons Interiors9 aestheti#s and safet! go hand in hand9 #omplementing ea#h

other2

C&+$o6e# S($'+*()$'o!

.e strongl! belie e in the adage that the #ustomer is the $ing2 .e also belie e that

happ! #ustomers are our passage to long term su##ess2


28/84

E6,7oyee E6,o9e#6e!$

'ur #arefull! #hosen staff is trained to understand #ustomer requirements qui#$l!9

empowered to ma$e strategi# de#isions9 and gi en a mandate to deli er qualit! time

after time2

>UALITY POLICY

.e shall deli er #ost effe#ti e solutions to our #ustomers the first time and

e er! time b! #ompl!ing with the requirements and #ontinuall! impro ing

effe#ti eness of our @ualit! Management S!stem2

.e belie e that word4of4mouth testimonials from our #ustomers are worth more than

an! other form of promotion2 .e also belie e that e er! pro*e#t should trans#end into

a long term relationship2 8en#e9 we #ommit to deli er the best for our #ustomers2 .e

are #ommitted to deli er e7#ellen#e at e er! step to a#hie e #ustomer delight2 From

ensuring that we use the highest qualit! of raw material9 engaging the best of people

and deli ering pro*e#ts on time9 our #ommitment to !ou is paramount2

8ere are *ust some of the steps we ta$e to ensure that we deli er on our qualit!#ommitment=

• .e wor$ #losel! with !ou to understand !our requirements #learl!

• .e belie e in e7tensi e planning before e7e#ution to redu#e negati e surprises

• Depending on !our requirements9 we put our best people on the *ob

• .e deal with the best #ontra#tors in the business

• .e sour#e material from the most trustworth! endors

• .e ensure that all our a#tions are #entered around !ou


29/84


30/84

ORGANISATION C ART

Designer

Staff

Staff

Design-lientSer i#

Dire#tor 4'peration

Staff Store%eeper

SiteSuper iso

Staff Store%ee er

SiteSu er isor

SiteSite)n ineer

Site)ngineer

Staff Site)n ineer

Staff

Pro*e#tMana er

BallingSafet

)7e#uti e)7e#uti eBallingSafet

Pro*e#tMana er

)7e#uti e

SiteManagement

A##ounts 8R

)7e#utie

)7e#uti eSiteM t=

GM-S

Ar#hite#t Design

)ngineer Pro#urement

8R I"

Finan#eA##ount

Pro*e#tM t=

@S

Dire#tor 4'peration

Bran#hRegisteredoffi#e Banglore

MA(AGI(GDIR)-"'R


31/84

SERVICE

For us at $ra!ons Interiors9 de eloping interiors is not about getting

the #olors and paints right it is about pro iding an atmosphere that soothes9 inspires

and moti ates2

.e also understand that timel! and #ost effe#ti e deli er! of pro*e#ts is the $e! to the

su##ess of an! pro*e#t2 .e a##ordingl! use a s#ientifi# wor$flow that in#ludes the

following steps=

-on#ept and Design Milestone4based Pro*e#t S#heduling

Pro*e#t )7e#ution

Pro*e#t Monitoring :using pro*e#t management and site management tools;

Pro*e#t -ompletion and Sign4off

Post pro*e#t ser i#es

.e ha e an in4house team of designers with ri#h e7perien#e in the industr! to

understand !our requirements and suitabl! transform them into blueprints2 )a#h

pro*e#t is handled b! a pro*e#t head along with full time pro*e#t engineer who ensure

that all milestones are rea#hed on time2

Areas of Spe#iali


32/84

• Floorings

• Gla


33/84

?; In#ome statement= "rading #on#erns9 whose finan#ial a#ti ities are restri#ted to

pur#hases and sales of goods prepare trading and Profit and /oss A##ount2 "he

trading and Profit and /oss A##ount in order to as#ertain their net in#omeQnet loss2

Manufa#turing #on#ern require information regarding the #ost of produ#tion also9

so the! prepare one more additional A##ount9 $nown as the manufa#turing

A##ount2 In #ase of ,oint Sto#$ -ompanies profit and loss appropriation is also

prepared to show the disposal of profit earned b! the #ompan!2 It furnishes the

information regarding pur#hases9 sales9 dire#t e7penses9 gross profit or gross loss

and net profit and net loss; Position statement= it is a mirror whi#h refle#ts the true position of the assets and

liabilities of the business on a parti#ular date2 Assets in#lude all #urrent and non4

#urrent assets and the liabilities in#lude #reditors equities and proprietors6 equities2It is traditionall! $nown as the balan#e sheet

DE-INITIONS O- WORKING CAPITAL:

"he following are the most important definitions of .or$ing #apital=

?2 .or$ing #apital is the differen#e between the inflow and outflow of funds2 In other words

it is the net #ash inflow2

2 .or$ing #apital represents the total of all #urrent assets2 In other words it is the Gross

wor$ing #apital9 it is also $nown as -ir#ulating #apital or -urrent #apital for #urrent assets

are rotating in their nature2

2 .or$ing #apital is defined as "he e7#ess of #urrent assets o er #urrent liabilities and pro isions2 In other words it is the (et -urrent Assets or (et .or$ing -apital2


34/84

.0 Wo#?'!g C(,'$(7 M(!(ge6e!$

A stud! of wor$ing #apital is of ma*or importan#e of internal and e7ternal anal!st

be#ause of its relationship with the #urrent da!4to4da! operations of business2

Funds9 #olle#ted from different sour#es are in ested in the business for the

a#quisition of assets2 "hese assets are emplo!ed for earning re enue2 "he basi#

problem fa#ing the finan#e manager of an enterprise is to trade4off between

#onfli#ting but equall! important goals of liquidit! and profitabilit!2 "he greater

the liquid resour#es of the firm9 the lesser will be its profitabilit! and i#e ersa2

"he firm has to maintain the wor$ing #apital at su#h le el as ma! ensure satisf!ing

earnings to the enterprise without *eopardi


35/84

amount in ested in wor$ing #apital #onsisting of wor$4in4progress9 raw materials and

#omponent sto#$s9 #onsumable items amounts owing b! #ustomers and #ash at the

ban$ or in hand2

In a##ounting wor$ing #apital is the differen#e between the inflow and outflow of funds2

'ther words9 it is the net #ash inflow2 .or$ing #apital is also $nown as

-ir#ulating -apital9 Flu#tuating -apital and Re ol ing -apital2 "he magnitude and

#omposition $eep on #hanging #ontinuousl! in the #ourse of business2

.2 Nee" *o# Wo#?'!g C(,'$(7

.or$ing -apital is signifi#ant be#ause of=

?; Adequate wor$ing #apital is required to #ontinue uninterrupted business operations2

; It is essential to run the da!4to4da! business a#ti ities2

; Greater olume of wor$ing #apital required to in est in #urrent assets for the

su##ess of sales a#ti ities2

C; "o ensure the ma7imi


36/84

#omplete the following sequen#e of e ents9 in #ase of a manufa#turing firm9 is #alled

the operating #!#le2

:?; -on ersion of #ash into raw materials

: ; -on ersion of raw materials into wor$4in4progress: ; -on ersion of wor$4in4progress into finished goods

:C; -on ersion of finished goods into a##ounts re#ei able and

: ; -on ersion of a##ounts re#ei able into #ash2


37/84

. Ty,e+ o* Wo#?'!g C(,'$(7

"he wor$ing #apital admits the following broad #lassifi#ations=

I2 Gross .or$ing -apital

II2 (et .or$ing -apital

:a; Positi e (et .or$ing -apital

:b; (egati e (et .or$ing -apital

III2 Permanent .or$ing -apital

I02 "emporar! .or$ing #apital

02 Balan#e sheet .or$ing #apital

-ash .or$ing -apital

I2G#o++ Wo#?'!g C(,'$(7

"he term Gross .or$ing #apital refers to the total of all #urrent assets2 In other

words9 the firm6s in estments in total #urrent or #ir#ulating assets2 -urrent assets are

the assets9 whi#h #an be #on erted into #ash within the a##ounting !ear2 It represents

short4term se#urities9 sundr! debtors9 bills re#ei able9 sto#$ :in entories;9 et#2

Ad antages of Gross .or$ing -apital= Gross .or$ing -apital is the amount of

funds in ested in the arious #omponents of #urrent assets2 "his #on#ept has the

following ad antages=

:?; It pro ides the amount of wor$ing #apital at the right time2

: ; It enables a firm to reali


38/84

II2Ne$ Wo#?'!g C(,'$(7

"he net #on#ept of wor$ing #apital is qualitati e9 indi#ating the firm6s abilit!

to meet its operating e7penses and #urrent liabilit!2 "he term (et .or$ing -apital

refers to the differen#e between #urrent assets and #urrent liabilities2 Alternati el!9 it

#an be defined as the portion of a firm6s #urrent assets9 whi#h is finan#ed with long4

term funds2 "his #on#ept is #ommonl! used for proprietar! organi


39/84

Differen#e between (et .or$ing -apital and Gross .or$ing -apital

(et .or$ing -apital Gross .or$ing -apital

1) (et wor$ing #apital is the

#on#ept of qualitati e nature2

2) It is indi#ating the firm6s

abilit! to meet its operating

e7penses and #urrent liabilit!2

3) It e7pressed as #urrent assetminus #urrent liabilit!2

4) It is a #on#ept er! popular in

a##ounting s!stem2

5) (et #on#ept is suitable for sole

trader and partnership firms2

6) It is useful to find out the true

finan#ial position of a

#ompan!2

7) In#rease in ban$ loan #annot

in#rease wor$ing #apital2

Retained profits9 sale of fi7ed

assets will in#rease net

wor$ing #apital2

1) Gross #on#ept of wor$ing

#apital is quantitati e in

nature2

2) It is pointing out the total

amount a ailable for finan#ing

the #urrent assets23) It indi#ates the total sum of

#urrent assets2

4) It is a #on#ept er! popular in

finan#ial management #ir#les2

5) Gross #on#ept suitable for

#ompanies2

6) It #annot re eal the true

finan#ial position of a

#ompan!2

7) ) er! in#rease in borrowing

will in#rease the gross

wor$ing #apital2


40/84

Re(+o!+*o# )%(!ge+ '! Wo#?'!g C(,'$(7: "he #hanges in the le el of wor$ing

#apital o##ur for the following reasons=

?2 -hanges in the le el of sales a#ti ities2

2 -hanges in the le el of operating e7penses2

2 Poli#! #hanges initiated b! management2

C2 "e#hnologi#al #hanges2

2 -!#li#al #hanges in the e#onom!2

L2 -hanges in operating #!#le2

2 Sour#e of #hange is seasonalit! in sales a#ti it!2

J2 -hanges in the fi7ing the le el of in entor! and re#ei ables2

Wo#?'!g C(,'$(7 G(,

A portion of #urrent assets is finan#ed through trade #reditors and a balan#e

portion b! share #apital9 long4term borrowings9 et#2 "hat portion of wor$ing #apital9

whi#h is finan#ed b! long4term fund9 is #alled wor$ing #apital gap2

E=)e++ (!" I!("e@&($e Wo#?'!g C(,'$(7

"he su##ess and otherwise of a business depends on the adequa#! of the said #apital

maintaining a desired le el2 Both e7#essi e and inadequate wor$ing #apital poses a

serious problem to a #ompan!9 whi#h ma! e en lead to its doom2 )7#essi e wor$ing


41/84

#apital means idle funds whi#h earn no profits for the firm2 Inadequate wor$ing

#apital impairs firm6s profitabilit! and liquidit!2

D(!ge#+ o* E=)e++ Wo#?'!g C(,'$(7

.hen wor$ing #apital is e7#essi e9 a firm fa#es the following problems

?2 It leads to unne#essar! pur#hase and a##umulation of in entories2

2 )7#essi e wor$ing #apital results in imbalan#e between liquidit! and profitabilit!2

2 It is an indi#ation of defe#ti e #redit poli#!2

C2 A #ompan! ma! not be tempted to o ertrade and lose hea il!2

2 )7#essi e wor$ing #apital leads to operational ineffi#ien#! be#ause large olume

of funds not being used2

L2 "his ma$es management #ompla#ent9 whi#h degenerates into managerial

ineffi#ien#!2

2 8igh liquidit! ma! indu#e a firm to underta$e great produ#tion9 whi#h ma! not

ha e a mat#hing demand2

D(!ge#+ o* I!("e@&($e Wo#?'!g C(,'$(7

.hen wor$ing #apital is inadequate9 a firm fa#es the following problems=


42/84

?2 Inadequate wor$ing #apital #auses stagnates growth and e7pansion2

2 It ma! not able to utili


43/84

. N($e o* '!"&+$#y

"he industr! #an be di ided into labour intensi e industries and #apital

intensi e industries2 /abour intensi e industries are those industries where labour isthe ma*or fa#tor of produ#tion2 /abour intensi e industries require more wor$ing

#apital where as #apital intensi e industries require less wor$ing #apital as there is

greater proportion of fi7ed assets2

4. Re@&'#e6e!$ o* )(+%

"he requirement of #ash also determines the needs of wor$ing #apital2 "he greater

the #ash requirements9 the higher will be the wor$ing #apital requirements2

5. Wo#?'!g )(,'$(7 )y)7e

In a manufa#turing #on#ern9 the wor$ing #apital #!#le starts with the pur#hase of

raw material and ends with the reali


44/84

throughout the !ear2 Su#h industries require large amount of wor$ing #apital during

su#h seasons2

. R($e o* +$o)? T!o8e#:

"here is an in erse #o4relationship between wor$ing #apital and the elo#it! or

speed of sto#$2 A firm ha ing a high rate of sto#$ turno er will needs lower

amount of wor$ing #apital as #ompared to a firm ha ing a low rate of turno er2

. C#e"'$ ,o7')y:

A #on#ern that pur#hases its requirement on #redit and sales its produ#tQser i#es on

#ash requires lesser amount of wor$ing #apital and i#e ersa2

. B&+'!e++ )y)7e:

In period of boom9 when the business is prosperous9 there is need for larger amount of

wor$ing #apital due to rise in sales9 rise in pri#es9 optimisti# e7pansion of business et#2

'n the #ontrar! in time of depression9 the business #ontra#ts9 sales de#line9 diffi#ulties

are fa#ed in #olle#tion from debtor and the firm ma! ha e a lesser amount of wor$ing

#apital2

.or$ing #apital management is er! important in modern business2 Anal!sis and

interpretation of finan#ial statement and wor$ing #apital is er! useful for short4term

management of funds2

TEMPORARY OR VARIABLE WORKING CAPITAL


45/84

"emporar! or ariable wor$ing #apital is the amount of wor$ing #apital whi#h is

required to meet the seasonal demands and some spe#ial e7igen#ies2 0ariable wor$ing

#apital #an further be #lassified as seasonal wor$ing #apital and spe#ial .or$ing

#apital2 "he #apital required to meet the seasonal need of the enterprise is #alled

seasonal wor$ing #apital2

Spe#ial wor$ing #apital is that part of wor$ing #apital whi#h is required to

meet spe#ial e7igen#ies su#h as laun#hing of e7tensi e mar$eting for #ondu#ting

resear#h9 et#2

"emporar! wor$ing #apital differs from permanent wor$ing #apital in the

sense that is required for short periods and #annot be permanentl! emplo!ed gainfull!

in the business2

IMPORTANCE OR ADVANTAGE O- ADE>UATE WORKING CAPITAL

So78e!)y o* $%e ;&+'!e++: Adequate wor$ing #apital helps in maintaining the

sol en#! of the business b! pro iding uninterrupted of produ#tion2

Goo"9'77: Suffi#ient amount of wor$ing #apital enables a firm to ma$e prompt

pa!ments and ma$es and maintain the goodwill2

E(+y 7o(!+: Adequate wor$ing #apital leads to high sol en#! and #redit standing

#an arrange loans from ban$s and other on eas! and fa orable terms2

C(+% D'+)o&!$+: Adequate wor$ing #apital also enables a #on#ern to a ail #ash

dis#ounts on the pur#hases and hen#e redu#es #ost2

Reg&7(# S&,,7y o* R(9 M($e#'(7: Suffi#ient wor$ing #apital ensures regular

suppl! of raw material and #ontinuous produ#tion2

Reg&7(# P(y6e!$ o* S(7(#'e+ W(ge+ (!" O$%e# D(y TO D(y


46/84

-ommitments= It leads to the satisfa#tion of the emplo!ees and raises the morale of its

emplo!ees9 in#reases their effi#ien#!9 redu#es wastage and #osts and enhan#es

produ#tion and profits2

E=,7o'$($'o! o* -(8o(;7e M(#?e$ Co!"'$'o!+: If a firm is ha ing adequate

wor$ing #apital then it #an e7ploit the fa ourable mar$et #onditions su#h as

pur#hasing its requirements in bul$ when the pri#es are lower and holdings its

in entories for higher pri#es2

A;'7'$y $o -()e C#'+e+: A #on#ern #an fa#e the situation during the depression2

>&')? (!" Reg&7(# Re$! o! I!8e+$6e!$+: Suffi#ient wor$ing #apital enables a

#on#ern to pa! qui#$ and regular of di idends to its in estors and gains #onfiden#e of the in estors and #an raise more funds in future2

'g% Mo#(7e: Adequate wor$ing #apital brings an en ironment of se#urities9

#onfiden#e9 high morale whi#h results in o erall effi#ien#! in a business2

EFCESS OR INADE>UATE WORKING CAPITAL

) er! business #on#ern should ha e adequate amount of wor$ing #apital to

run its business operations2 It should ha e neither redundant or e7#ess wor$ing #apital

nor inadequate nor shortages of wor$ing #apital2 Both e7#ess as well as

Short wor$ing #apital positions are bad for an! business2 8owe er9 it is the

inadequate wor$ing #apital whi#h is more dangerous from the point of iew of the

firm2


47/84

DISADVANTAGES O- REDUNDANT OR EFCESSIVE WORKING CAPITAL

?2 )7#essi e wor$ing #apital means ideal funds whi#h earn no profit for the firm and

business #annot earn the required rale of return on its in estments2

2 Redundant wor$ing #apital leads to unne#essar! pur#hasing and a##umulation of

in entories2

2 )7#essi e wor$ing #apital implies e7#essi e debtors and defe#ti e #redit poli#!

whi#h #auses higher in#iden#e of bad debts2

C2 It ma! redu#e the o erall effi#ien#! of the business2

2 If a firm is ha ing e7#essi e wor$ing #apital then the relations with ban$s and other

finan#ial institution ma! not be maintained2

L2 Due to lower rate of return n in estments9 the alues of shares ma! also fall2

2 "he redundant wor$ing #apital gi es rise to spe#ulati e transa#tion2

DISADVANTAGES O- INADE>UATE WORKING CAPITAL

) er! business needs some amounts of wor$ing #apital2 "he need for wor$ing

#apital arises due to the time gap between produ#tion and reali


48/84

T%&+ 9o#?'!g )(,'$(7 '+ !ee"e" *o# $%e *o77o9'!g ,,o+e+:

For the purpose of raw material9 #omponents and spares2

"o pa! wages and salaries2

"o in#ur da!4to4da! e7penses and o erload #osts su#h as offi#e e7penses2

"o meet the selling #osts as pa#$ing9 ad ertising9 et#2

"o pro ide #redit fa#ilities to the #ustomer2

"o maintain the in entories of the raw material9 wor$4in4progress9 stores and spares

and finished sto#$2

-ACTORS DETERMINING T E WORKING CAPITAL RE>UIREMENTS

0. NATURE O- BUSINESS: "he requirements of wor$ing is er! limited in publi#

utilit! underta$ings su#h as ele#tri#it!9 water suppl! and railwa!s be#ause the!

offer #ash sale onl! and suppl! ser i#es not produ#ts9 and no funds are lied up in

in entories and re#ei ables2 'n the other hand the trading and finan#ial firms

requires less in estment in fi7ed assets but ha e to in est large amt2 of wor$ing

#apital along wifh fi7ed in estments2

2.SI E O- T E BUSINESS: Greater the si


49/84

4. LENT O- PRDUCTION CYCLE: "he longer the manufa#turing time the raw

Material and other supplies ha e to be #arried for a longer in the pro#ess with

progressi e in#rement of labor and ser i#e #osts before the final produ#t is obtained2

So wor$ing #apital is dire#tl! proportional to the length of the manufa#turing pro#ess2

5. SEASONALS VARIATIONS: Generall!9 during the bus! season9 a firm requires

larger wor$ing #apital than in sla#$ season2

. WORKING CAPITAL CYCLE: "he speed with whi#h the wor$ing #!#le

#ompletes one #!#le determines the requirements of wor$ing #apital2 /onger the #!#le

larger is the requirement of wor$ing #apital2

MANAGEMENT O- WORKING CAPITAL

Management of wor$ing #apital is #on#erned with the problem that arises in

attempting to manage the #urrent assets9 #urrent liabilities2 "he basi# goal of wor$ing

#apital management is to manage the #urrent assets and #urrent liabilities of a firm in

su#h a wa! that a satisfa#tor! le el of wor$ing #apital is maintained9 i2e2 it is neither

adequate nor e7#essi e as both the situations are bad for an! firm2 "here should be no

shortage of funds and also no wor$ing #apital should be ideal2 .'R%I(G -API"A/MA(AG)M)(" P'/I-)S of a firm has a great on its

probabilit!9 liquidit! and stru#tural health of the organi


50/84

2.4 T EORETICAL BACKGROUND O- T E STUDY

Studies adopting a new approa#h towards wor$ing #apital management are

re iewed here2

V(! o#!e H0 .or$ing #apital management is the administration of #urrent

assets in the name of #ash9 mar$etable se#urities9 re#ei ables9 and in entories2

.or$ing #apital management as the regulation9 ad*ustments9 and #ontrol of the

balan#e of #urrent assets and #urrent liabilities of a firm su#h that maturing obligations

are met and the fi7ed assets are properl! ser i#ed2 HV(! o#!e: Reg&7($'o!+ (!"Co!$#o7 o* Wo#?'!g C(,'$(7 M(!(ge6e!$3 .

So6e #e7($e" #e+e(#)%e+ (#e ,#e+e!$e" ;e7o9 '! $%e (#e(+ o* Wo#?'!g C(,'$(7

M(!(ge6e!$ (!" P#o*'$(;'7'$y.

S(g(! in his paper 0 55 H0 perhaps the first theoreti#al paper on the theor! of

wor$ing #apital management9 emphasi


51/84

L( (#'"'+ (!" T#y*o!'"'+ 2// H2 in estigated the relationship that is statisti#all!

signifi#ant between #orporate profitabilit!9 the #ash #on ersion #!#le and its

#omponents2 .hen the authors repla#ed #ash #on ersion #!#le with a##ountsre#ei able and in entor!9 the! found negati e relationship with these two ariables

the opposite o##urred with a##ounts pa!able2 "he authors #on#lude that #ompanies

#an #reate more profit b! handling #orre#tl! the #ash #on ersion #!#le and $eeping

ea#h different #omponent to an optimum le el2

W(7?e# in his stud! 0 4H made a pioneering effort to de elop a theor! of

wor$ing #apital management b! empiri#all! testing9 though partiall!9 three

propositions based on ris$4return trade4off of wor$ing #apital management2 .al$er

studied the effe#t of the #hange in the le el of wor$ing #apital on the rate of return in

nine industries for the !ear ?KL? and found the relationship between the le el of

wor$ing #apital and the rate of return to be negati e2

De7oo* 2//4 H4 Resear#h with Belgian #ompanies from ?KK to ?KKL2 8e found

negati e relationship between gross operating profit and a##ounts re#ei able9

in entor! and a##ounts pa!able2 "he latter might indi#ate that less profitable

#ompanies wait longer to pa! their bill sta$ing ad antage of #redit period granted b!

their suppliers2

W'!(?(# (!" S6'$% 0 5 H5 the! ha e underta$en a trend of means of ?K

finan#ial ratios and found out that was a signifi#ant deteriotiation of a erage ratio

alue of these firms whi#h failed subsequentl!2 "he! also ha e found that ratio of net

wor$ing #apital to total asset was the most a##urate and stead! indi#ator of failure2

:.ina$ar and smith R2F= +-hanges in finan#ial stru#ture of unsu##essful industrial

#ompanies1;2

We7$e#9 in his stud! 0 / H stated that wor$ing #apital originated be#ause of the

global dela! between the moment e7penditure for pur#hase of raw material was made

and the moment when pa!ment was re#ei ed for the sale of finished produ#t2 "he


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stud! requires spe#if!ing the dela! #enters and wor$ing #apital tied up in ea#h dela!

#enter with the help of information regarding a erage dela! and added alue2

I! C%#'+$o,%e# (!" K(6(7(8(77' 2// H stud!9 the! in estigated a sample of ?C

#orporate hospitals in India using panel data anal!sis for the period KLQK to EE QEL2

"he independent ariables used were #urrent ratio9 qui#$ ratio9 in entor! turno er

ratio9 wor$ing #apital turno er ratio and debtorTs turno er ratio9 ratio of #urrent asset

to total asset9 ratio of #urrent asset to operating in#ome9 #omprehensi e liquidit!

inde79 net liquid balan#e si


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in estment2 'n the other hand9 other indi#ators li$e #urrent and qui#$ rations

displa!ed no asso#iation2

o9o#$% (!" We+$%e(" 2// H0/ ha e studied wor$ing #apital management

pra#ti#es of small firms in the U%2 "he! found four t!pes of firms= #ompanies of the

first t!pe #on#entrate on #ash management routines2 "hese firms are generall! large

and !oung9 and ha e most e7ternal finan#ing2 "he se#ond t!pe firms with less e7ternal

finan#ing #on#entrate on in entor! management routines2 "he third t!pe #ompanies

emphasi


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the ris$ of liabilit! to meet due short term obligations and a oid e7#essi e in estment

in these assets2 "he relation between profitabilit! and liquidit! was e7amined9 as

measured b! #urrent ratio and #ash gap :#ash #on ersion #!#le;2

"he stud! founded that the #ash #on ersion #!#le was more important as

measure of liquidit! than the #urrent ratio that affe#ts the profitabilit! 2"he si


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the same questionnaire9 whi#h enables #omparison of pra#ti#es in the US9 -anada and

Australia2 "he results show for e7ample some differen#es in wor$ing #apital

management poli#ies between the #ountries due to institutional differen#es9 su#h as

the ban$ing s!stem2

P(!'G(#(%' 0 / H05 )7amine the liquidit! position of the large Indian

#ompanies for the period of ?K E4?K ? to ?KJL4?KJ with the help of standard

finan#ial ratio and wor$ing #apital ratio ha e been #omputed to e7plain the signifi#ant

of asso#iation between the ratioNs2 :PaniGarahi= +.or$ing -apital Management1= #ase

of large Indian #ompanies;2

Jo+e e$ (7. 0 H0 "he! found that a shorter #ash #on ersion #!#le led to better

profitabilit!2 After that9 this finding has been tested se eral times b! other resear#hers

with different samples and mainl! #onstant results2 Relati e profitabilit! #an be

impro ed with aggressi e wor$ing #apital management2

Co,e7(!" (!" K%oy 0 / H0 applied -APM to de elop a theor! of #redit

e7pansion2 "he! argued that #redit should be e7tended onl! if the e7pe#ted rate of

return on #redit is greater than or equal to mar$et determined required rate of return2

"he! used -APM to determine the required rate of return for the firm with its new

ris$9 arising from un#ertaint! regarding #olle#tion due to the e7tension of #redit2 "hus9

these studies show how -APM #an be used for de#isions in ol ed in wor$ing #apital

management2 'ne more approa#h9 used mainl! in empiri#al studies9 towards wor$ing

#apital management has been to appl! regression anal!sis to determine the fa#tors

influen#ing in estment in wor$ing #apital2 Different studies in the past ha e

#onsidered different e7planator! ariables to e7plain the in estment in in entor!2 A

brief re iew? of these studies is important as regression equation of in estment in

wor$ing #apital9 in the present stud!9 would be formulated on the basis of wor$s on


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in estment in in entor!2 In in entor! in estment literature9 there is basi#all! one

s#hool of thought a##ording to whi#h firms aim at an optimum or desired sto#$ of

in entories in relation to a gi en le el of outputQsales2 "his is $nown as a##eleration

prin#iple2

S%&76(! (!" Co= + 0 5H0 "he stud! used shulman and -o76s :?KJ ; net

liquidit! balan#e and wor$ing #apital requirement as a pro7! for wor$ing #apital

measurement and de elopment multiple regression models2 "he empiri#al resear#h

found that6s firm6s #apital e7penditure has a signifi#ant impa#t on wor$ing #apital

management2 :Shulman and -o76s= +.or$ing -apital Measurement and De elop

Multiple Regression Models21;

W'7+o! 2// H0 has put so mu#h attention to the finan#ial managers and fa#tors

of impa#t on .or$ing #apital management2 "herefore managers are alwa!s loo$ing

for wa!s to balan#e the assets and liabilities9 the stud! of fa#tors affe#ting the

management of the loo$ing #apital in Bra


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#ash flow9 #ompan! si


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industr! effe#t9 operating #ash flows9 growth opportunit! for a firm9 firm performan#e9

and si


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RESEARC DESIGN

"he stud! is des#ripti e in nature2 "his is an attempt to e aluate the performan#e of

the #ompan! through the finan#ial statement anal!sis b! the finan#ial data2 .hi#h are

dis#losed in a##ounting poli#ies2 Des#ripti e resear#h in#ludes sur e! and fa#t finding

enquiries of different $inds2 "he ma*or purpose of des#ripti e resear#h is the

des#ription of the state affairs as it e7ists at present2

RESEARC MET OD

"he method used in this resear#h is statisti#al method2 Statisti#al method is a s!stem

of pro#edures and te#hniques of anal!sis applied to quantitati e data2 It #onsists of a

s!stem of statisti#al te#hniques appli#able to numeri#al data2

STEPS IN STATISTICAL MET OD

-'//)-"I'( 'F MA")RIA/= "he data must be #olle#ted in a s!stemati# manner2

"he data should be reliable9 purposeful and adequate2

PR)S)("A"I'( 'F DA"A = "he #lassified data should be presented in a neat

manner with the help of tables9

A(A/&SIS 'F DA"A= "he anal!


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"he stud! is basi#all! #onfined to se#ondar! data obtained from the annual report of

the #ompan!9 boo$s of a##ounts9 periodi#al statisti#s gi en b! offi#ial websites et#2

"he sour#e of data used for the stud! was balan#e sheet and profit and loss a##ount of

the #ompan!2 "he se#ondar! data was #olle#ted from the annual reports of the

#ompan! from EEK4?E to E? 4?C2

TOOLS USED -OR ANALYSIS

0. SC EDULE O- C ANGES IN WORKING CAPITALS#hedule of #hanges in wor$ing #apital is a measure of #ompanies short term liquidit!

orIts abilit! to #o er short term liabilities

2. RATIO ANALYSIS

Ratio anal!sis is one of the powerful tools of the finan#ial anal!sis2 A ratio #an be

defined as the indi#ated quotient of two mathemati#al e7pressions and as the

relationship between two or more things2 Ratio is thus9 the numeri#al or arithmeti#al

relationship between two figures2 Ratio anal!sis stands for the pro#ess of determining

and presenting the relationship of items and group of items in the finan#ial statement2

It is an important te#hnique of finan#ial anal!sis2 It is a wa! b! whi#h finan#ial

stabilit! and health of a #on#ern #an be *udged. CORRELATION

-orrelation is a term that refers to the strength of a relationship between two

ariables2 A strong9 or high9 #orrelation means that two or more ariables ha e a

strong relationship with ea#h other while a wea$9 or low9 #orrelation means that the

ariables are hardl! related2

4. TREND ANALYSIS "rend anal!sis is another important tool of finan#ial statement9 for anal!


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+"rend anal!sis ma! be defined as a #omparati e anal!sis of a #ompan!6s finan#ial

ratios o er time2 "he finan#ial statement ma! be anal!


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I!$e#,#e$($'o!:

"he -urrent Ratio was E2K? for E?E4?? and in#reased to ?2E in the !ear

E??4? and for E? 4? the ratio de#reased to E2KE2

"he #urrent ratio has met the standard of =? ratio and hen#e it #an be said that

there is enough wor$ing #apital to meet the #urrent liabilities2 8en#e it #an be noted

that steps ha e been ta$en to in#rease the #urrent ratio in the pre ious finan#ial !ear2so

that enough wor$ing #apital is not a ailable to meet the #urrent obligation2 "hus the

liquidit! position is not mu#h fair and a##eptable

45%

50%

4%

CURRENT RATIO

2010-2011 2011-2012 2012-2013

Figure 4 C2?


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A;+o7&$e L'@&'"'$y R($'o

Co!)e,$: Absolute liquidit! ratio is a ratio of #ash in hand and at ban$ to -urrent

/iabilities2 "he standard ratio is E2 = ?2

A;+o7&$e L'@&'"'$y R($'o C(+% '! %(!" C(+% ($ ;(!? C#e!$ L'(;'7'$'e+

"able C2 = Absolute /iquidit! Ratio

I!$e#,#e$($'o!:

"he absolute liquidit! ratio was E2 ? for E?E4?? and in#reased to E2 L in the !ear

E??4E? and for the !ear E? 4? the ratio de#reased to E2EEC

Ye(# C(+% C#e!$

L'(;'7'$'e+

R($'o

2/0/1

2/00

?E EJ ? E2 ? = ?

2/001

2/02

LLJJ ?EEJE LK E2 L= ?

2/021

2/0

KK EJ L? LLE E2EEC = ?


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"he absolute liquidit! ratio is below the standard of E2 =?2 It shows that the

liquidit! position of the #on#ern is not good2 8en#e adequate #ash balan#e need to be

maintained b! the #ompan!2 But in the !ear E??4? the adequate #ash balan#e was

good :E2 L=?;

35%

64%

0%

ABSOLUTE LI>UIDITY RATIO

2010-2011 2011-2012 2012-2013

-'ge 4.2

Wo#?'!g C(,'$(7 T!o8e# R($'o


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Co!)e,$: "his ratio indi#ates how effi#ientl! the wor$ing #apital of the firm is

being utili


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"he wor$ing #apital turno er ratio was negati e for the !ear E?E4 E?? in the !ear

E??4 E? it has in#reased to K2C times2 But in the !ear E? 4 E? it has

#onsiderabl! de#reased to C2 times2

.or$ing #apital turno er is the abilit! to generate sales per rupee of wor$ing#apital2 It should alwa!s be positi e but in the initial !ears the ratio was negati e

whi#h not a fa orable position to the #ompan!2 For !ear E??4 E? the ratio has

impro ed to K2C times and But in the !ear E? 4 E? it has de#reased to C2

times whi#h shows that the organi


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Co!)e,$: "his ratio measures sales per rupee of in estment in #urrent assets2 "his

ratio measures the effi#ien#! with whi#h #urrent assets are emplo!ed 3 a high ratio

indi#ates a high degree of effi#ien#! in asset utili


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I!$e#,#e$($'o!:

"he #urrent asset ratio for the !ear E??4? was ?E2 ? and in E? 4? it de#reased

to

9 C?and it is a big fall it made a lot of problems in the wor$ing #apital management

76%

24%

CURRENT ASSET RATIO

2011-2012 2012-2013

-'ge 4.4

SCHEDULE OF CHANGES IN WORKING CAPITAL OFKRAYONS INTERIORS SYSTEMS PVT LTD 20!!"20!2#


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PARTICULARS 20!! 20!2 INCREASE DECREASECurrent assets

a) Inventoriesb) Cash and cash

equivalencec) Short ter

loans andadvances

1234300

1020!75

74"133

1324740

566!!54

33270!7

"0440

4647"7"

2577"54

# #

#

T$ &' ()**+, &--+ -A#

3004308 !032068!

Current liabilit$a) %rade &a$ablesb) 'ther current

liabilitiesc) Short ter&rovisions

2!7!7!2

2"3446

""000

7"7303!

1307332

!00000

#

50"4256

1013!!6

701000

T$ &' ()**+,'.&/.'. .+- #

327!228 !0080370

W$*1., (& . &' "266 20 2403!!

N+ .,(*+&-+ ., .,$*1., (& . &'

50723! 507231

T$ &' 240311 240311 7316373 7316373

T(;7e1 4.4

I!$e#,#e$($'o! In the !ear E??4 E? s#hedule of #hanges in wor$ing #apital shows a net

in#rease in the wor$ing #apital and that is good in the wor$ing #apital management in

that !ear wor$ing #apital is properl! utilised but in the !ear E? 4? the net de#rease

is o##urred that #ondition is not fa ourable in the wor$ing #apital management


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KARL PERSON S COE--ICIENT O- CORRELETION:

"he following table #ontains the amount of #urrent liabilities :in ?E la$hs; and #urrent

assets


71/84

:in ?E la$hs; from the period E?E4 E??to E? 4 E?

7 2JC & 2KL V& 2E? 7 2? ! L 2 E

T(;7e1 4.

PearsonNs #orrelation #oeffi#ient :named after %arl Pearson9 ?J 4?K L; is a number between

4? and ? that measures the strength of a 7'!e(# #e7($'o!+%', between two #ontinuous

ariables2 "he absolute alue of the #oeffi#ient measures how #losel! the ariables are related2

W 2E?4: 2JC; : 2KL;

W 2? 4: 2JC2 WL 2 E4: 2KL;2

504.2

( *+ C,++ %*SS %S

./)I 10 *K S

C,++ %I* I I%(

.$)I 10 *K S

(I

10 *KS

F 2I

10 *K S

y2I

10 *K S

2010-2011

3 04 3 27 " "4 " 24 10 62

2011-2012

10 32 10 0! 104 0! 106 50 101 60

2012-

2013

20 4! 22 61 463 05 41" 43 571 21

%'%* 33 !4 35 "6 577 01 535 17 623 50


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20.45 24./2

504.2

505.22

# /.

V -urrent asset

& -urrent liabilit!

From the %arl parsons #orrelation #oeffi#ient the #urrent asset of the firm is greater

than #urrent liabilit!2 So the #al#ulation sa!s that the #ompan! is $eeping high positi e

#orrelation

TREND ANALYSIS


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TREND ANALYSIS E UATIONCURRENT YEAR× 100

BASE YEAR

In the finan#ial anal!sis the dire#tions of #hange o er a period of !ears is of #ru#ial importan#e2 "he trend anal!sis of ratio indi#ates the dire#tion of #hange2 "he

basi# tenden#! of the statisti#al data9 to rise or fall or to remain the same with the passage of time is $nown as trend2 So the trend refers to long period #hanges2 "rend#an be measured b! arious methods2 For trend anal!sis9 methods of least square

pro ide us with a mathemati#al #ur e9 whi#h will be fit to the gi en series2 "hete#hnique of obtaining this mathemati#al #ur e b! the prin#iple of least square is$nown as a #ur e fitting2

A straight line trend #an be fitted to the data b! the method of #ur e fitting based on the most popular prin#iple #alled prin#iple of least square2 Su#h a straightline is also $nown as line of best fit2 It gi es as a straight line from the line will beequal to the total of erti#al distan#es at arious point on the other side of the straightline2 .hen some of de iations on either side is equal to


74/84

T&/'+ "4 8

2 0 1 0 - 2 0 1 1 2 0 1 1 - 2 0 1 2 2 0 1 2 - 2 0 1 30

300430!

1032067!

204!1624

100 343 6!1

C)**+, &--+ *+,9 &,&':-.-C,++ % %rend &ercenta e

i ure- 4 5

INTERPRETATION

&)AR -URR)("

ASS)"S

"rend per#entag

e

E?E4 E?? EEC EJ ?EE

E??4 E? ?E EL J C

E? 4 E? ECJ?L C LJ?


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In the above table the trend anal$sis ratio is increasin %his increase is ood 8or the co &an$ I8 the current assettrend &ercenta e increases the co &an$ 9ill et a oodasset ana e ent in 8uture 9hich is bene:cial 8or theco &an$


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TREND ANALYSIS OF CURRENT LI ALITY

T&/'+ ; 4

2010-2011 2011-2012 2012-20130

5000000

10000000

15000000

20000000

25000000

3271227

100!036"

22612660

100 30! 6"1

current libalit$

C,++ % I* I I%I S %+ ; < +C %*=

i ure- 4 6

TREND ANALYSIS OF WORKING CAPITAL

YEAR CURRENT

LIA ILITIES

TREND

PERCENTAGE

2010-2011 3271227 100

2011-2012 100!036" 30!

2012-2013 22612660 6"1


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"able 4C2?E

Y+&* N+ W$*1.,

C& . &'

T*+,9

+*(+, & +

2010-2011 .266"1") 100

2011-2012 24030" -"0

2012-2013 .2131036) 7"!


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-INDINGS

From the ratio anal!sis found that the #urrent ratio is not mu#h fa ourable the

#ompan! #an6t meet their wor$ing #apital obligations appropriatel!

"he absolute liquidit! ratio is below the standard of E2 =?2 It shows that theliquidit! position of the #on#ern is not good2 8en#e adequate #ash balan#e need to

be maintained b! the #ompan!


79/84

For !ear E??4 E? the wor$ing #apital ratio has impro ed to K2C times and But

in the !ear E? 4 E? it has de#reased to C2 times whi#h shows that the

organi


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For impro ement of organi


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CONCLUSION

"he stud! re eals the wor$ing #apital management at %ra!ons interiors s!stems

pri ate /td2 "he present finan#ial position of the #ompan! is not good2 .or$ing

#apital is #ontrolling ner e #entre of a business2 (o business #an be su##essfull! run

without an adequate amount of wor$ing #apital2 It is er! essential to maintain the

smooth running of a business2

"he #on#ept of wor$ing #apital management has its own importan#e in the

#urrent s#enario2 "he #ash management is anal!


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BIBLIOGRAP Y


83/84

BIBLIOGRAP Y

TEFT BOOKS:

?2 Maheswari Dr S2n +Finan#ial management19 (inth edition9 EEL sultan #hand sons9

(ew Delhi

2 Pande! I2M29 +Finan#ial Management19 0i$as Publishing 8ouse P t2/td2 J th )dition

?KKK2

2 Prasanna -handra9 +Finan#ial management19 Fourth edition ?KKK9 "ata M#2graw hill

publishing #ompan! ltd9 (ew Delhi2

C2 Gupta9 sashi29 +finan#ial management19 Cth edition9 EE 9 $al!ani publisher9 new delhi

2 %othari -2R2 +Resear#h Methodolog!19 .ish apra$ashan9 (ew Delhi9 EE?2

AR"I-/)S=

An o er iew of wor$ing #apital management and #orporate finan#ing2

.or$ing #apital management2

.or$ing -apital Management Manages Flow of Funds1 :&ear EEK;

+.or$ing -apital Management4an )ffe#ti e "ool for 'rganisational Su##ess1 &ear

: EEJ;

We;+'$e:

www2 %ra!onsinteriors2#o2in

www2 Google2#om

www2 In estopedia2#om

www2mone!#ontrol2#om


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www2wi$ipedia2#om

final mba-surag

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