rish major ppt

8/6/2019 Rish Major Ppt

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For HARJEET STEEL PVT. LTD.

BY-RISHIKA MAHALLEY



� This project named working capital

management was carried out at Harjeet

Steels Pvt. Ltd to analyze and understand

financial feasibility of the company.� The company was established way back in

1983 mainly to cater to in-house

requirements of forging quality steels.

� it is a leading manufacturer of quality t.m.tbars, rod, squares, hexagon, octagon angels

and channels etc.



�The working capital management is the

process of identifying the financial

strength and weakness of the firm by

properly establishing relationshipbetween the items of the balance-sheet

and the profit and loss account because

the figures recorded in the financial

statements are absolutely incapable ofrevealing the soundness or otherwise of a

Company s financial position or

performance.



� Financial Management provides a frame work

for selecting a proper course of action &

deciding a viable commercial strategy.

� The can be achieved by:-

1. Profit maximization

2. Wealth maximization



1. An adequate supply of raw materials.

2. Cash to meet the operation payments.

3. The ability to grant credit to customers.

4. The capacity to wait for market for its

finished products.

5. Investment in various current assets.

6. Appropriate sources of fund to financecurrent assets.

7. Proportion of long term and short term funds

to finance current assets.



FORMULA 2005 2006 2007 2008 2009 2010

Current Ratio

=CA/CL

2.35:1 1.65:1 1.65:1 1.597:1 1.285:1 1.366:1

Liquid Ratio

=LA/CL

0.52:1 0.46:1 0.44:1 0.499:1 0.297:1 0.267:1

W.C. to Gross

Sales

=W.C./Gross

Sales

0.16:1 0.087:1 0.098:1 0.081:1 0.031:1 0.031:1

W.C. to Net

Block

=W.C. / Net

Block

0.44:1 0.24:1 0.21:1 0.230:1 0.127:1 0.151:1

W.C. to Cost of

Sales=

W.C./Cost of

Sales

0.192:1 0.105:1 0.12:1 0.091:1 0.039:1 0.047:1



�Monitoring :In Harjeet Steel Plant, all the

three aspects of working capital are

monitored separately.

�CASH

�INVENTORY

�RECEIVABLES



�Cash is monitored every day and

intimated to top management as

well as fortnightly to thecompany.

�The cash report generated daily

has all details of cash inflows &outflows.



� Inventory is monitored differently for stores,

raw materials and finished goods on monthly

basis.

� The inventory reports providing the billdetails of sales, inventory, working capital

position and debtors of the local sales for the

previous month.



�The working capital ratio indicates

the company has funded for working

capital through long term fundswhich represents accepted finance

policy.

rish major ppt

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